How Will Global Tariffs Be Countered by Local Markets? Insights from Varanasi Professor
Click to start listening
Synopsis
As global tariff wars pose challenges for Indian exporters, Professor Mishra highlights the government's strategy to bolster local markets, ensuring consumer demand surges during the festive season. Discover how GST changes could reshape the economic landscape!
Key Takeaways
- Domestic market is a key focus to mitigate global tariff impacts.
- GST rationalization could simplify tax structures and enhance compliance.
- Upcoming festive season is crucial for consumer demand.
- 'Vocal for Local' supports indigenous products.
- Lower GST rates may lead to increased sales and government revenue.
Varanasi, Sep 3 (NationPress) As the 56th GST Council meeting, presided over by Union Finance Minister Nirmala Sitharaman, commenced in New Delhi, Professor Anoop Kumar Mishra, the Head of the Economics Department at DAV College in Varanasi (affiliated with BHU), remarked that the government is striving to leverage the domestic market to mitigate the effects of global tariff conflicts on Indian exporters.
"This meeting can be analyzed from two angles. Firstly, the tariff conflict initiated by US President Donald Trump is causing hurdles for Indian exporters. When our goods are exported, they face nearly 50 percent additional duties," Professor Mishra stated to IANS.
The two-day Council meeting, taking place on September 3-4, is anticipated to address rate rationalization. Among the proposals are the removal of the 12 percent and 28 percent GST slabs in favor of a more straightforward structure of 5 percent and 18 percent, alongside a 40 percent slab for so-called "sin goods".
Mishra underscored the second significant context for this meeting - the impending festive season in India.
“This 56th meeting is occurring just before the festivals, a time when consumer demand typically surges. The government is aiming to ensure that losses caused by global tariffs can be offset through the internal market. This is India’s response to the tariff conflict,” he elaborated.
He connected this strategy to the government’s emphasis on ‘Vocal for Local’.
"India is advocating for indigenous products. The Prime Minister has consistently emphasized that self-reliance will stem from strengthening local industries. The GST decisions under review are designed to support that vision," he mentioned.
Mishra also noted that rationalizing GST could enhance consumption while simultaneously bolstering government revenue.
“With the festive season approaching, consumer numbers will rise. Lower GST rates will result in cheaper goods, stimulating demand. When demand increases, government revenue also grows. It creates a win-win scenario for both consumers and the state. These decisions could be groundbreaking,” he asserted.
Additionally, he pointed out the advantages for producers unable to export their products due to high tariffs.
“Such manufacturers will now discover opportunities within the domestic market. This will generate revenue, provide consumers with lower prices, and allow exporters to mitigate their losses. Everyone benefits,” he told IANS.
The GST Council meeting convenes Union and state Finance Ministers with the agenda of implementing structural reforms in GST, including rate adjustments, compliance simplification, and exploring new compensation mechanisms for states. A preparatory meeting for officers was conducted on Tuesday to lay the groundwork for these vital discussions.
Point of View
The recent GST Council meeting in New Delhi signifies a strategic response to global economic pressures. The emphasis on local markets and consumption not only seeks to cushion exporters from tariff impacts but also aims to stimulate domestic demand, aligning with government initiatives for self-reliance.
NationPress
03/09/2025
Frequently Asked Questions
What are the key points discussed in the GST Council meeting?
The meeting focused on rate rationalization, including potential removal of 12% and 28% GST slabs, and promoting domestic markets to counter global tariffs.
How will the GST changes benefit consumers?
Lower GST rates are expected to make goods more affordable, thereby encouraging higher consumer demand during the festive season.
What is the significance of the 'Vocal for Local' initiative?
'Vocal for Local' aims to promote indigenous products, supporting local industries and enhancing self-reliance in the economy.
How might these changes impact exporters?
Exporters facing high tariffs may find new opportunities in the domestic market, reducing their losses and contributing to overall revenue.
What economic benefits can be expected from the GST Council's decisions?
Rationalizing GST could boost consumption, increase government revenue, and create a favorable environment for both consumers and businesses.
