India's government slashed Goods and Services Tax (GST) rates on numerous goods, including air conditioners, tea, and school supplies, to combat the effects of US tariffs and boost consumption. The new two-slab structure (5% and 18%) replaces the previous four-slab system, aiming to simplify the tax system and stimulate the economy, particularly during the upcoming festive season. While this move could lead to significant revenue losses for the government, economists believe increased consumption will offset these losses and counter the impact of US tariffs. The changes are part of a larger economic strategy including income tax cuts and reduced borrowing costs.

Prepared by Christopher Adams and reviewed by editorial team.