Jin10 data reported on August 28, analysts from Fitch's BMI said that India's tax reform plan could offset the impact of U.S. tariffs on the economy. According to the proposed reforms, the Goods and Services Tax will be simplified, and the average tax rate will be dropped. Although the Goods and Services Tax has become the second largest source of government revenue, BMI expects that the reform will have a minimal impact on Goods and Services Tax revenue. This should also stimulate private consumption. This boost may be enough to offset the burden of tariffs. Currently, BMI has downgraded India's growth forecast, expecting a growth rate of 5.8% for the fiscal year 2025-2026 and a growth rate of 5.4% for the fiscal year 2026-2027.
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Fitch's BMI: India's tax reform may offset the impact of Trump's tariffs.
Jin10 data reported on August 28, analysts from Fitch's BMI said that India's tax reform plan could offset the impact of U.S. tariffs on the economy. According to the proposed reforms, the Goods and Services Tax will be simplified, and the average tax rate will be dropped. Although the Goods and Services Tax has become the second largest source of government revenue, BMI expects that the reform will have a minimal impact on Goods and Services Tax revenue. This should also stimulate private consumption. This boost may be enough to offset the burden of tariffs. Currently, BMI has downgraded India's growth forecast, expecting a growth rate of 5.8% for the fiscal year 2025-2026 and a growth rate of 5.4% for the fiscal year 2026-2027.