In a move that has lit up homes across India ahead of Diwali, Prime Minister Narendra Modi has announced a sweeping reduction in the Goods and Services Tax (GST) on essential items—a festive “gift to citizens” that promises to ease household budgets and uplift consumer confidence.
From mschool stationery, milk products like ghee, sewing machines, utensils, televisions, toothpaste, and brushes, to clothing and even popular namkeens, GST rates have been slashed dramatically to 5% and in many cases to 0%, making daily living far more affordable for the average Indian family. For millions, this translates into direct savings on education, nutrition, hygiene, and lifestyle essentials—a tangible benefit just as the festive season begins.
In contrast, the government has taken a firm stance on luxury and harmful goods. Luxury cars, alcohol, paan masala, tobacco, sugary drinks, and fast food will now attract GST as high as 40%, signaling a conscious push to promote healthier lifestyles and responsible consumption while maintaining revenue strength.
These measures are expected to ease living expenses for millions, spur consumer confidence, and add festive cheer to India’s economy just as families prepare for Diwali celebrations.
Industry leaders have welcomed the announcement as both timely and decisive. Nitin Rao, CEO of InCred Wealth, said:
“The GST cuts are here and have been announced quickly and efficiently with an element of urgency, to boost demand before the festive season. Focus has been to give support to tariff-impacted labour-intensive industries, to make goods cheaper (visible benefits of individual scale will be seen by the middle class in mid-level value purchases) and will improve sentiments post the tariff issues and general slowdown. History has showed that such measures add significantly to GDP growth and a repeat is expected. Positive this will play out, though a small concern remains wherein recent measures like the rate cuts and budgetary measures on reduced taxes have not created necessary consumption boosters. We will have to wait and see if this welcome third step reverses the consumption trend or there is a deeper problem around availability of money with consumers. For now, the market sentiments will be positive.”
The announcement has sparked waves of optimism nationwide. Households see immediate relief, small businesses anticipate increased demand, and industries dependent on consumer spending expect a positive boost in the months ahead. Economists view the move as both strategic and sensitive, combining economic prudence with social responsibility.
India’s Global Leadership Amid Tariff Tensions
The announcement also comes at a time when India is asserting its economic independence on the global stage. Recent tariff hikes imposed by U.S. President Donald Trump on Indian exports triggered discontent not just in New Delhi but across the world. Several nations—including China, Finland, Australia, and others—have openly acknowledged India’s right to fair trade practices and called the U.S. measures heavy-handed against an emerging economy that is fast becoming central to global growth.
Finland’s President, for instance, cautioned against isolating India, warning that such moves could weaken Western influence in Asia. China has backed India’s stance, framing it as part of a larger debate on equitable treatment of developing economies. Even trade analysts in Europe and the Asia-Pacific have argued that punitive tariffs risk pushing India closer to alternative blocs such as BRICS, strengthening multipolarity in global trade.
Prime Minister Modi’s GST reforms are more than just a fiscal adjustment—they are a lifeline for households, a stimulant for the economy, and a statement of intent to the world. By easing the cost of living at home and standing tall against unfair global trade practices, Modi has reinforced his stature as the leader of the world’s largest democracy. India’s journey as a confident, rising power is no longer just a domestic story—it is one that is commanding recognition and solidarity across continents.
