Trump’s 50% Tariffs Hit India: A Blow to Economic Growth
MUMBAI — Donald Trump’s steep 50% tariffs on India have kicked in, weeks after the US president issued an executive order imposing an additional 25% penalty on India over its purchases of Russian oil and weapons.
This makes India — one of the US’s strongest partners in the Indo-Pacific — among the countries hit with the highest tariffs in the world. This could deal a blow to exports and growth in the world’s fifth largest economy, given that the US was, until recently, India’s largest trading partner.
Indian Government in Firefighting Mode
The tariff setback has sent the Indian government into firefighting mode. Earlier this month, Indian Prime Minister Narendra Modi made a promise to cut taxes to mitigate their economic impact. He has also urged domestic self-reliance.
Modi’s Call for Self-Reliance and Economic Resilience
He said that a Diwali gift in the form of a “massive tax bonanza” was on its way for the common man and the millions of small businesses that power Asia’s third largest economy. Wearing a bright saffron turban and addressing crowds of spectators from the ramparts of Delhi’s Red Fort during Independence Day celebrations, Modi also urged small shop owners and businesses to put up boards of “Swadeshi” or “Made in India” outside their stores.
Modi’s Economic Strategy Amidst Tariff Troubles
For many watching, this is clearly aimed at countering Donald Trump’s brutal 50% tariff rate on India which will disrupt millions of livelihoods across the country’s export-driven industries that supply everything from clothes to diamonds and shrimp to American consumers.
Tax Reforms and Economic Stimulus
But spurring long-pending tax reforms that immediately put more money into the hands of people could help the government soften some of the blow, experts say. And so, after a $12bn income tax giveaway announced in the budget earlier this year, Modi is now aiming for an overhaul of India’s indirect tax architecture – a reduction and simplification of the goods & service tax (GST).
Impact on Consumption and GDP Growth
Private consumption is a mainstay of India’s economy, contributing to nearly 60% of the country’s GDP. While rural spending – supported by a bumper harvest – has remained strong, demand for goods and services in cities has continued to slow down due to lower wages and job cuts in major sectors like IT, post the pandemic.
Optimism Amidst Challenges
India’s stock markets have cheered these announcements. And despite the panic caused by trade uncertainties, earlier this month, India also got a rare sovereign rating upgrade from S&P Global, after a gap of 18 years. A sovereign rating measures how risky it is to lend to a government or invest in a country. But even as Modi rushes through with long-delayed reforms, India’s growth prospects have slowed significantly from the 8% levels seen a few years ago, and its external crisis shows no sign of ebbing.
Exploring the Enchanting World of Underwater Caves
Dive deep into the mysterious realm of underwater caves and discover a world like no other. These hidden gems are teeming with life, from colorful coral reefs to exotic sea creatures. As you descend into the depths, you’ll be captivated by the beauty and wonder that surrounds you.
Each cave has its own unique features, from intricate rock formations to ancient artifacts. The play of light and shadow creates a mesmerizing effect, casting a magical glow over everything in sight. It’s like stepping into another world, where time seems to stand still.
But don’t be fooled by the serene beauty of these caves – they can be treacherous and unforgiving. Navigating through narrow passageways and dark tunnels requires skill and precision. Only the most experienced divers dare to venture into these depths, knowing the risks that come with exploring such a fragile ecosystem.
Despite the challenges, the allure of underwater caves is undeniable. The sense of adventure and discovery is unmatched, drawing in thrill-seekers and nature lovers alike. So grab your scuba gear and prepare to embark on an unforgettable journey into the enchanting world of underwater caves.
