In what’s regarded as an unjustified move by the Indian administration, Prime Minister Narendra Modi announced enticing potential tax cuts as a countermove to the impending tariffs placed by the U.S regime, under the leadership of President Donald Trump.

The U.S government, under Trump’s management, has been rigorously operating a policy of protectionism. This policy stance has led to heightened concerns of tariff imposition on Indian goods heading to the U.S markets. The rising tension between the two trading giants has primarily been a consequence of divergent views on trade tariffs and policies.

In response to this increasingly worrying situation, Modi’s government has floated its new strategy encompassing attractive tax cuts. This move is aimed at cushioning the Indian economy from the potential blow of Trump’s looming tariffs.

As stated by Prime Minister Modi, the decision to implement tax cuts is not merely an incentive, but a necessity. For him, the prospective U.S tariffs are not only “unjustified” but also “unfair.” He believes that these tariffs could potentially dampen the vitality of the Indian economy, more so, the spirited Indian manufacturing and export sectors.

His proposed tax deductions intend to prop up these sectors, ensuring they remain competitive even in the face of unfavourable tariff impositions. Modi’s approach underlines a commitment to safeguarding India’s economic stability and interests, even under challenging circumstances.

Nonetheless, there is significant apprehension regarding the feasibility and effectiveness of these tax cuts, particularly in light of the economic strain caused by the turbulent relationship with the U.S. The tax reductions might provide temporary relief to Indian companies, but it’s uncertain whether this respite would be enough to mitigate the long-term effects of the potential U.S tariffs.

Overall, the unfolding scenario is fraught with uncertainties, and there exists a palpable tension in the global trade landscape. The consequential effects of Modi’s tax cuts and Trump’s proposed tariffs are yet to be seen; meanwhile, business firms, traders, and consumers are left grappling with these fluctuating circumstances.

While the Indian government’s tax cut proposal may seem like a favourable buffer for Indian corporations, its success will largely be measured by how well it manages to offset the repercussions of the impending U.S tariffs. As things currently stand, the path ahead is indeed filled with unpredictability and potential challenges for various sectors of the world economy. Read more