Finance Minister Nirmala Sitharaman on Friday said the government’s new dual-slab goods and services tax (GST) structure would provide a significant boost to India’s growth momentum, even as policymakers prepare targeted support for exporters grappling with higher US tariffs.
The revamped GST regime, effective September 22, will consolidate the existing multi-rate system into two slabs of 5% and 18%. In addition, a 40% rate will apply to select luxury and sin goods. “GST impacts every one of the 1.4 billion Indians. From household purchases to automobiles, everything is touched by GST, so this reform will have a very positive impact,” Sitharaman said in an interview, adding that industry leaders had assured her the benefits of lower rates would be passed on to consumers.
India’s economy expanded 7.8% in the June quarter, the fastest in five quarters, but rising US tariffs on Indian exports have raised concerns over sustaining this pace. Sitharaman clarified that the GST reform was not specifically designed to offset tariff shocks, but acknowledged it would “collaterally help” the sectors most affected.
She said a relief package tailored for tariff-hit sectors is under discussion. “Respective ministries are in talks with affected industries and a package is being worked out,” the minister noted, without setting a timeline.
The minister also confirmed discussions on easing Press Note 3 restrictions, which mandate prior approval for investments from countries sharing land borders with India, and flagged ongoing visa relaxations for renewable energy and domain-specific exports.
On the macro front, Sitharaman reiterated India’s position on Russian oil imports, stating decisions will be guided by national interest. She stressed that “relentless work on next-generation reforms” is underway following the Prime Minister’s Independence Day roadmap.
