PM Modi GST Reforms Trump Tariffs 2 4 Lakh Crore Boost Economy Stocks
Last month, when US President Donald Trump announced a 50% tariff on some goods coming from India, there was a panic in economic circles. Many people feared that this would affect India’s economy in the coming days, but when the Indian stock market opened on Monday i.e. on Monday, the scene was completely opposite. Investors’ faces were blooming and there was a tremendous boom in the market. In fact, Trump’s tariff more impact was the announcement of Prime Minister Narendra Modi’s change in GST. On the occasion of Independence Day, PM Modi said that by Diwali a big improvement will be made, which will reduce the tax burden. The effect of his announcement was such that the market woke up.
While the market was falling after Trump’s tax announcement, the Sensex jumped 1100 points as soon as the news of Modi’s GST reform came. In just 35 minutes, investors earned around Rs 9 lakh crore. It is a clear indication that the Modi government is ready to answer the pressures like America’s tariffs on its own. Many American agencies have also admitted that this step of India is going to be very strong and effective.
India’s market will blossom with the change of GST
Many things will be cheaper after cuts in GST rates, which will not only increase the purchase of people, but will also speed up production and economic activities in the country. American financial company Morgan Stanley says that this decision may increase India’s economic growth from 0.5% to 0.7%. Now about 99% of the goods, which were earlier 12% GST, will now be charged only 5% tax. At the same time, about 90% of the items on which there was 28% tax on earlier, now 18% tax slabs have come into the slab. Only a few luxury goods and ‘things of sin’ such as cigarettes, alcohol etc. will still be taxed. With this change, most things of everyday needs will become cheaper, which will directly benefit the common man. This will increase the consumption in the market and will also benefit from the country companies. Brokerage companies like Morgan Stanley and Emkay Global estimate that this improvement in GST will bring an additional demand of about Rs 2.4 lakh crore in the market. This can increase India’s GDP growth from 50 to 70 basis points.
India’s credit rating also improves
Just a day before the announcement of major changes in GST, the world’s famous credit rating agency S&P Global has increased India’s Sovereign Credit Rating. In the report released on 14 August 2025, S&P has increased India’s long-term rating from ‘BBB-‘ to ‘BBB’, while the short-term rating has been rated from ‘A-3’ to ‘A-2’. In addition, transfer and convertibility (T&C) ratings have also been increased from ‘BBB+’ to ‘A-‘.
The agency has done this improvement in view of India’s fast economic speed and stable policies. S&P has said that now the outlook (future direction) of India’s rating has been changed from ‘negative’ to ‘positive’, that is, further improvement is expected in the coming time.
S&P believes that there is stability in policies in India, the government is investing big on infrastructure and financial planning is also looking strong. Along with this, the government’s vigilant financial and monetary policies are helping to reduce the burden of debt and interest of the country. The report also said that if the situation persists in the next two years, then India’s rating can improve further.