Indian Prime Minister Narendra Modi unveiled sweeping tax reforms that could boost his image in the face of a US trade war, but strain government revenue, analysts said.
The changes are set to make daily essentials like electronics cheaper; Modi also called on Indians to buy more domestically made goods, echoing calls from his supporters to boycott US products after Washington’s tariff hike on Indian imports.
The timing of the overhaul is “purely determined by political exigencies” and could improve Modi’s standing with voters, a communications consultant told Reuters, but the tax cuts will dent government coffers.
Modi’s indirect tax system has largely underperformed, a Bloomberg columnist argued, and its reform “would benefit from less politics and more economics.”