NEW DELHI: Union Commerce and Industry Minister Piyush Goyal has assured that there is “no need to panic” over the 50 per cent tariff imposed by US President Donald Trump on Indian exports, adding that negotiations are underway and will lead to a balanced and fair outcome.
He noted that while the higher duties, which came into effect on August 27, have impacted nearly $48 billion worth of Indian exports including textiles, footwear, and food products India and the United States continue to maintain good relations. Goyal stressed that trade negotiations have no fixed timeline and must be approached with patience.
The tariff, initially set at 25 per cent, was later doubled to 50 per cent, with Washington citing India’s continued imports of Russian oil. The duties apply to all Indian goods entering the US market or withdrawn from bonded warehouses for consumption.
Amid this, India has announced sweeping Goods and Services Tax (GST) reforms. The 56th GST Council meeting decided to rationalise the structure from four slabs to two 5% and 18% by merging the 12% and 28% rates. The Compensation Cess on coal, carbonated beverages, and larger cars has been scrapped, while essentials such as health and life insurance premiums have been fully exempted. Luxury and sin goods will continue to attract a 40% tax.
Goyal explained that the GST overhaul was a “holistic and well thought-out” measure, coincidentally announced at the same time as the US tariffs. He emphasised that such reforms take months of preparation and are designed to simplify taxation, boost demand, and strengthen manufacturing.
India’s economy has remained resilient, recording 7.8% GDP growth in the first quarter of FY2025-26, surpassing the 6.5% estimate. Inflation has also fallen to an eight-year low of 1.55%. According to Goyal, the GST reforms will add further momentum, setting India firmly on track to become a $30 trillion economy by 2047.
