PM Modi announced a $20 billion economic reform package to stimulate domestic consumption.
It includes revamping GST to a simpler two-tier system—5% on essentials and 40% on others
like cigarettes.
The plan is expected to spur private consumption, comprising 60% of India's $4 trillion GDP.
Economists estimate the move could add 0.6% to GDP growth and lower inflation.
The reform helped trigger India’s first S&P sovereign rating upgrade in 18 year
s.
However, rising U.S. tariffs and suspended trade talks pose new external risks.
Bond yields rose, reflecting fiscal concerns tied to the reform package.
Markets responded positively initially, anticipating a consumption-driven
economic push.
The success of this reform depends on implementation speed and external environment.
If executed well, it may reinvigorate India’s growth and investor sentiment.