Union commerce and industries minister Piyush Goyal said he is "very confident" that the GST cuts, effective from September 22, will give a big leg up to the economy, bring in more investments and create jobs.
"…The GST (reforms) will ensure that Indian investments continue to power on. When there is demand there will be interest (by industry) to put more investments. A growing demand means growing jobs," Goyal told Network 18 in an interview on September 4.
"More investments will lead to more jobs in manufacturing and services," Goyal said, adding that services PMI hit a 15-year high in August.
India’s services sector recorded its strongest-ever expansion since 2010 in August, with the HSBC India Services PMI Business Activity Index climbing to 62.9, up from 60.5 in July. This is the third straight month the index has held above 60, underscoring resilient demand in the world’s fastest-growing major economy.
Goyal further added that in FY26, India’s overall exports would be higher than that of FY25. In FY25, India’s overall exports (manufacturing and services) reached a record high of $824.9 billion, up 6.01 percent on year.
On Wednesday, GST Council recommended cuts on a range of items – from daily use to automobiles, which took the average rate of taxes to fall below 10 percentage, from around 11.5 percent earlier.
Goyal noted that he sees a big consumption boost, which will bring in more revenues in place of loss.
On impact of higher US tariffs on India’s GDP, the Commerce Minister said that it will not be significant. "India is predominately a domestic economy…our exports as a part of our GDP is still relatively low and our imports are much higher. So the impact will not be significant," said Goyal.
With Q1 growth coming in at 7.8 percent, many economists have raised their full year forecast to 6.8-7 percent, from 6.3 percent earlier. However, Chief Economic Adviser V Anantha Nageswaran, last week, retained the forecast of 6.3-6.8 percent – mentioned in the Economic Survey – due to a lower growth expected in Q2 in the wake of 50 percent US tariffs.
Trump first levied a 25 percent tariff on India as talks for a mini-version of a trade deal to avert reciprocal duties failed, starting August 7. He then imposed a penalty, of additional 25 percent, for buying Russian crude. The effective tariff, beginning August 27, stands at 50 percent.
On August 11, the finance ministry said that around 55 percent of Indian merchandise exports to the US will be subject to 25-percent reciprocal duties. India exported goods worth $86.51 billion to America in FY25.
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