India's Modi cuts taxes, pushes self-reliance amid Trump tariff tensions
dubaieye1038.com -- Friday, August 15, 2025, 6:53:34 AM Eastern Daylight Time
Categories: Trade Policy & Tariffs, Tax Policy & Reform, Economic Policy & Jobs

Indian Prime Minister Narendra Modi urged the country on Friday to move towards more self-reliance, manufacture everything from fertilisers to jet engines and EV batteries, and vowed to protect farmers in the face of a trade conflict with Washington.
With the punishing tariffs imposed on Indian exports by US President Donald Trump expected to hurt growth in the world's fastest growing major economy, Modi announced lower goods and services taxes (GST) from October - a move that could help boost consumption.
He also announced India would set up a new defence system called 'Sudarshan Chakra' in the aftermath of India's four-day military conflict with Pakistan in May. He did not elaborate but a government statement said the system is aimed at neutralising enemy infiltrations and enhancing India's offensive capabilities.
Indian defence and policy circles have informally referred to the Russian S-400 air defence system - which played a key role during the fighting with Pakistan - as Sudarshan Chakra, after a Hindu mythological weapon.
Modi was addressing the nation on the occasion of its Independence Day at a time New Delhi has been struggling with Trump's tariffs and the collapse of trade talks, largely due to differences over imports of American farm and dairy products.
"Farmers, fishermen, cattle rearers are our top priorities," Modi said in his customary annual address from the ramparts of the Red Fort in New Delhi. "Modi will stand like a wall against any policy that threatens their interests. India will never compromise when it comes to protecting the interests of our farmers," he said.
Modi did not mention the tariffs or the US in his speech that lasted nearly two hours.
Last week, Trump imposed an additional 25 per cent tariff on Indian goods, citing New Delhi's continued imports of Russian oil in a move that sharply escalated tensions between the two nations. The new import tax will raise duties on some Indian exports to as high as 50 per cent - among the highest levied on any US trading partner.
Modi has never spoken about the tariffs directly, only alluding to them in a speech last week, where he swore to protect the interests of farmers, even if it came at a personal price. Farmers are a key political constituency in India and they violently protested against Modi's last big push to reform the sector, forcing him to repeal three farm laws in 2021 in what was a rare defeat for him.
TAX CUTS TO BOOST CONSUMPTION
Although local manufacturing and self-reliance have been Modi's key focus areas for years now, the push is seen to have gained urgency amid ongoing global trade tensions and supply chain disruptions.
"The need of the hour is to take a resolve for building a strong India... I want our traders, shopkeepers to display boards for 'Swadeshi' products," Modi said, using the Hindi word for made in India goods. He said made in India semiconductor chips would hit the market by the end of this year and that India was pushing for self-reliance in producing critical minerals with exploration underway at more than 1,200 locations.
Trump's tariffs threaten to disrupt India's access to its largest export market, where shipments totalled nearly $87 billion in 2024, hitting sectors like textiles, footwear, shrimp, gems and jewellery. In retaliation, some supporters of Modi have sought to stoke anti-American sentiment and called for a boycott of US companies such as McDonald's, Coca-Cola, Amazon and Apple.
Trade talks between New Delhi and Washington collapsed after five rounds of negotiations over disagreement on opening India's vast farm and dairy sectors and stopping Russian oil purchases.
Modi's promise to cut GST by October's Diwali festival, which encompasses one of India's biggest shopping seasons, follows previous commitments to overhaul it by reducing the number of rate brackets under the 2017 tax regime.
A group of ministers have been preparing a report that will consider merging tax slabs and lowering rates on some products.
In February, India cut personal income tax for some individuals to boost spending. Earlier this month, the central bank kept interest rates steady, following a 100 basis point cut this year so far.
The government has proposed to the ministers' panel that it recommend reducing taxes on mass use items as well as on goods used by women, students and farmers to boost consumption and enhance affordability, the finance ministry said in an X post.
The government will move towards making GST a simple tax with two rate slabs, one standard and another merit, it said. Special rates will be applicable only for a few select items.
Sign Our PetitionThe recent news surrounding Indian Prime Minister Narendra Modi's push for self-reliance amid escalating trade tensions with the United States highlights a complex intersection of nationalism, economic strategy, and historical context. Modi's call for a self-sufficient India, particularly in manufacturing critical goods like fertilizers, jet engines, and electric vehicle (EV) batteries, resonates with a longstanding desire in India to break free from dependency on foreign imports. However, this self-reliance initiative must be examined critically, especially considering its implications for the working class and broader social justice movements within the country.
Historically, India has grappled with its colonial past and the economic exploitation that accompanied it. The push for "Swadeshi," or a preference for domestically produced goods, dates back to the Indian independence movement, where it served as both a practical and symbolic rejection of British goods and economic dominance. Modi's invocation of this term in his speeches reflects a strategic emphasis on nationalism that may appeal to certain segments of the population. However, it is crucial to interrogate whether this nationalism translates into genuine economic empowerment for the working-class citizens, particularly farmers, who have been the backbone of Indian society. Modi's previous failure to reform agricultural laws, which led to widespread protests and the eventual repeal of those laws, serves as a cautionary tale about the effectiveness of top-down approaches that overlook grassroots needs.
The focus on local manufacturing must also be viewed through the lens of economic equity. While tax cuts aimed at boosting consumption may provide temporary relief in a struggling economy, they risk exacerbating existing inequalities if they do not translate into sustainable job creation or increased wages for workers. Modi's emphasis on protecting farmers is commendable, especially given their crucial role in the country's food security and economy. However, the question remains whether this rhetoric will lead to meaningful policy changes that address the systemic challenges faced by farmers, such as debt, inadequate infrastructure, and access to markets. The recent tariffs imposed by the United States, which have raised duties on Indian exports to levels that could stifle trade, further complicate this narrative, as they highlight the vulnerabilities of an economy reliant on external markets.
Moreover, the introduction of the 'Sudarshan Chakra' defense system post-conflict with Pakistan illustrates the militarization of national policy in response to external pressures. While national security is undeniably important, an aggressive military posture can detract from addressing pressing social issues like poverty, education, and healthcare. The prioritization of defense spending over social welfare reflects a broader trend seen globally, where governments often allocate resources to military endeavors rather than to the well-being of their citizens. This approach is inherently flawed, as it neglects the foundational principle that a strong nation is one that invests in the health and prosperity of its people.
As we consider Modi's agenda, it is essential to connect these developments to ongoing global struggles for social justice, labor rights, and economic equity. The backdrop of rising populism and nationalism in various countries, including the United States under Trump's administration, serves as a reminder that economic policies must prioritize the most marginalized communities. Modi's government must be held accountable for how its policies affect not only the economy but also the lives of everyday citizens. A focus on self-reliance should not come at the expense of social rights or environmental sustainability.
In conclusion, the call for a self-reliant India encapsulates a broader struggle against economic dependency and external pressures. However, the historical context, the need for equitable labor practices, and the implications of militarization must be critically examined. As citizens and activists engage with these issues, it is crucial to advocate for policies that genuinely uplift marginalized communities and prioritize the well-being of all individuals over mere economic metrics. Only then can we hope to foster a truly equitable and just society, free from the pitfalls of a narrow nationalism that often serves the interests of the few at the expense of the many.
The recent actions and rhetoric of Indian Prime Minister Narendra Modi reveal significant layers of political maneuvering that intersect with broader economic and social themes. At the heart of Modi's address is a call for self-reliance, encapsulated in the term "Atmanirbhar Bharat," or self-sufficient India. This initiative is particularly crucial against the backdrop of escalating trade tensions with the United States under the Trump administration. The imposition of substantial tariffs on Indian goods, raising duties as high as 50%, illustrates a precarious moment in international trade that could have cascading effects on economies dependent on exports. As we examine Modi's strategies, it becomes evident that the implications of his policies extend beyond India, affecting global supply chains and the welfare of agricultural communities worldwide.
Historically, the relationship between the U.S. and India has been marked by oscillation between cooperation and conflict, influenced heavily by domestic policies and global market dynamics. Modi's government, which has positioned itself as a proponent of nationalist economic policies, is reacting defensively to these tariffs while simultaneously attempting to galvanize domestic support by emphasizing the importance of agriculture and local manufacturing. Farmers have historically been a vital political constituency in India, and Modi’s pledge to protect their interests directly reflects lessons learned from the tumultuous protests that led to the repeal of his farm laws in 2021. Such a context underscores how domestic political pressures can shape and redirect foreign policy, making it a critical talking point for discussions about governance and accountability in any nation.
As citizens of the United States and supporters of equitable global trade practices, it is essential to critically examine how the political landscape is influenced by the actions of powerful leaders like Modi and Trump. One actionable step we can take is to advocate for a trade policy that prioritizes fairness and mutual benefit over punitive tariffs. Promoting local and global initiatives that support sustainable farming and manufacturing can foster international solidarity with farmers in India who are struggling under the weight of economic pressures. By aligning interests across borders, we can amplify calls for trade agreements that prioritize human rights, environmental sustainability, and economic equity, rather than succumbing to isolationist tendencies.
Moreover, it is vital to recognize the historical context of global trade and its implications for developing nations. In the wake of colonialism, many countries have continued to grapple with the legacies of economic exploitation. The imposition of tariffs and trade barriers can exacerbate these disparities, particularly for countries like India that are striving for industrial and agricultural growth. Engaging in discussions about fair trade practices, supporting international labor rights, and advocating for policies that address the structural inequities in trade can empower citizens to challenge the status quo. By promoting educational initiatives that highlight the importance of equitable trade, we can foster a more informed electorate capable of demanding systemic change from their representatives.
Finally, as we navigate these complex international dynamics, it is crucial to strive for a narrative that encompasses understanding and empathy rather than division. While Modi's actions may be seen as a protective measure for Indian farmers, they also reflect a broader trend of nationalism that can lead to isolationism and conflict. As concerned global citizens, we must promote dialogue that seeks to bridge gaps rather than deepen them. By engaging with individuals from different political perspectives, we can foster a culture of understanding and collaboration that prioritizes shared global interests over nationalistic fervor. This approach not only serves to strengthen international relations but also lays the groundwork for a more equitable and just global economy.
In conclusion, the evolving landscape of international trade, as exemplified by Modi's recent initiatives and Trump's tariffs, presents both challenges and opportunities for collective action. By advocating for fair trade, understanding the historical context of these policies, and promoting dialogue across political divides, we can contribute to a more equitable world. It is essential to recognize our power as engaged citizens to influence policies that promote sustainability, equity, and respect for the rights of all individuals—regardless of their country of origin.
Based on the article regarding India's current political and economic strategies under Prime Minister Modi, particularly in the context of trade tensions with the United States and a focus on self-reliance, here is a detailed list of actions we can take to engage with these issues effectively:
### Personal Actions You Can Take
1. **Support Local Products**: - **Action**: Prioritize purchasing locally-made products to support self-reliance and local economies. - **Example**: Create or join a local initiative that promotes "Made in India" products—such as a community fair or social media campaign.
2. **Engage in Advocacy Campaigns**: - **Action**: Write to local representatives about the importance of supporting farmers and local manufacturing. - **Who to Write**: Reach out to your local MP or government officials. - **Example**: - Name: [Insert your local MP's name] - Email: [Insert local MP's email address] - Address: [Insert local MP's postal address] - **What to Say**: Express your support for policies that protect farmers and promote local production. Mention the significance of self-reliance in the face of global trade tensions.
3. **Petition for Sustainable Agricultural Policies**: - **Action**: Start or support petitions that advocate for sustainable agricultural practices and farmer protections. - **Example**: Use websites like Change.org to create a petition to demand fair trade policies that protect local farmers from tariffs. - **Share**: Distribute the petition through social media and community groups to gather support.
4. **Participate in Community Meetings**: - **Action**: Attend local government and community meetings focusing on economic policies and farmer welfare. - **Example**: Look for events organized by local agricultural boards or community centers and participate actively in discussions.
5. **Support NGOs and Community Initiatives**: - **Action**: Contribute time or resources to NGOs that focus on farmer rights and local manufacturing. - **Example**: Volunteer with organizations like the **Kisan Mazdoor Sangharsh Committee** or similar local groups that advocate for farmers.
6. **Educate Yourself and Others**: - **Action**: Stay informed about local and global economic policies that affect agriculture and trade. - **Example**: Host a community workshop or discussion group to address the implications of trade policies on local economies.
7. **Social Media Advocacy**: - **Action**: Use your social media platforms to raise awareness about the challenges faced by farmers and the importance of local manufacturing. - **Example**: Create posts that highlight stories of local farmers and businesses to inspire others to support them.
8. **Contact Economic Policy Makers**: - **Action**: Write to policymakers or ministries regarding trade and agricultural policies. - **Who to Write**: The Ministry of Agriculture & Farmers' Welfare. - **Example**: - Name: Shobha Karandlaje, Minister of State for Agriculture - Email: [Insert official email if available] - Address: Krishi Bhawan, Dr. Rajendra Prasad Road, New Delhi, 110001, India. - **What to Say**: Advocate for protective measures for farmers against international trade policies that threaten their livelihoods.
### Summary
In engaging with the current political landscape in India, personal actions focused on supporting local economies, advocating for farmers, and participating in community initiatives can significantly impact. By reaching out to representatives, participating in advocacy, and promoting local products, you can contribute to building a sustainable and self-reliant economy.