USISPF backs India’s tax cuts as investor-friendly reset

Mukesh Aghi, president and CEO of USISPF, said the reforms would bolster investor confidence at a critical time.

USISPF logo / USISPF

The U.S.–India Strategic Partnership Forum (USISPF) welcomed India’s sweeping Goods and Services Tax (GST) reform, calling it a transformative reset of the country’s indirect tax system and a key signal to global investors.

The US-India Tax Forum, a policy platform under USISPF, said the measures reflect the government’s commitment to ease of doing business, consumer welfare, and a predictable investment environment.

Also Read: India cuts consumption taxes after US tariff blow

“GST 2.0 marks a strategic inflection point in India’s tax reform journey, one that prioritizes simplicity, certainty, and broad-based growth,” said Tarun Bajaj, chairperson of the US-India Tax Forum and former revenue secretary.

He noted that rationalized rates on household goods and agricultural products, exemptions on essentials, and streamlined refunds would reduce costs, ease compliance, and support consumption-led growth.

Mukesh Aghi, president and CEO of USISPF, said the reforms would bolster investor confidence at a critical time. “This is a major boost to investor sentiment. The next-generation GST reforms, an investor-friendly, growth-driven reset of India’s indirect tax regime, send a strong signal to global investors about transparency, ease of doing business, and policy predictability,” he said.

The reform was approved at the 56th meeting of the GST Council, India’s federal decision-making body on indirect taxation, chaired by finance minister Nirmala Sitharaman on Sept. 3.

The new system simplifies the Goods and Services Tax (GST) structure to two main rates—5 percent and 18 percent—while retaining a higher 40 percent levy on sin and luxury goods.

Effective Sept. 22, the reform also introduces sweeping relief measures such as zero tax on essentials like bread, paneer, and life-saving medicines, and reduced rates on a wide range of consumer goods, automobiles, and electronics.

Economists project the changes could add up to 1.2 percentage points to India’s GDP growth. Indian markets surged on the announcement, with auto and consumer stocks leading gains.

Alongside the rate changes, the government has pledged structural improvements such as operationalizing the GST Appellate Tribunal by year-end, a move expected to ease litigation backlogs and provide greater certainty to businesses.

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