GST 2.0 likely to offset impact of US tariffs, say experts

The Goods and Services Tax (GST) 2.0 reforms are expected to bring down inflation and help cushion the Indian economy against the headwinds of fresh US tariffs by boosting domestic consumption, analysts said. With the rate cuts set to take effect from September 22, a wide range of consumer goods will become cheaper, creating more room for household spending. Experts estimate that lower taxes on essential and discretionary consumer goods could ease retail inflation by up to 100 basis points, giving a strong fillip to demand ahead of the festive season.
Mukesh D Ambani, Chairman and Managing Director of Reliance Industries Limited and Reliance Retail, welcomed the government’s second-generation GST rationalisation, calling it a “big booster to India’s economic growth.”Congratulating Prime Minister Narendra Modi for delivering what he described as a historic “Diwali Gift to the people of India,” Ambani said the rationalisation would make products and services more affordable, simplify business operations, lower inflation, and drive consumption growth across the retail sector.
“With GDP growth rate already at 7.8% in the first quarter of this financial year, the new reforms have the potential to accelerate the economy even further, raising the growth rate closer to double digits,” Ambani said.
Aligning with his views,Isha Ambani, Executive Director of Reliance Retail Ventures Limited, termed the new GST regime “a transformative step” that would ease household budgets while reducing compliance burdens for businesses.“Reliance Retail is committed to pass on the entire benefit of the new GST regime to customers from Day 1 across all its consumption baskets,” she said, adding that the reforms represented the government’s clear intent to promote consumer welfare and improve the ease of doing business.“Our pledge is simple: whenever costs go down, our customers must get the benefit in their wallets,” she added.Industry leaders reportedly noted that the GST rationalisation marks a defining moment in India’s consumption-driven growth story. By cutting costs, controlling inflation, improving efficiency, and enabling scale, the reforms will create opportunities across the retail value chain—from farmers and MSMEs to suppliers, kiranas, and end-consumers.

(Business Correspondent)