Prime Minister Narendra Modi seems to have paid heed to India Inc’s call for sweeping reforms in response to the crisis brought upon by the straining of trade, economic, and diplomatic ties with Donald Trump’s US.“Being dependent on other countries recipe for disaster, we must be self-reliant to safeguard of our interests,” PM Modi said in his speech at the Red Fort celebrating India’s Independence Day. “We are forming a task force for next-generation reforms,” he added.The announcement, coming a day after S&P Global upgraded the country’s sovereign rating for the first time since 2007, is significant. Many industry leaders have asked the government to ‘not waste a good crisis’.
“India must go beyond incremental reform and create a genuinely effective single-window clearance system for all investment proposals,” Anand Mahindra, the billionaire chairman of the Mahindra Group, said recently.The latest call for reforms has come amidst tariff negotiations with the US, which recently imposed a 50% tariff on exports from India.
The high-handed approach from team Trump has cast a shadow on India’s economic prospects. Many believe that India must boost consumption, diversify its exports, and reduce the reliance on the US to minimise the impact of the tariffs and improve the leverage in future trade negotiations.”If someone becomes too dependent on others, the very question of freedom starts to fade… Aatmanirbhar is not limited merely to imports, exports, rupees, pounds, or dollars. Its meaning is far broader,” PM Modi said.As part of Aatmanirbhar Bharat (self-reliant India) initiative, the government of India has been taking steps to improve domestic manufacturing and consumption. To boost consumption, PM Modi promised cuts in the goods and services tax (GST) before Diwali, which falls on October 20 this year.The Prime Minister also had a message for the manufacturers. “Dum kaam par dum zyada,” he said, urging for products that are both high-value and cost-effective. He promised reforms to simplify processes and increase the number of patents, among other measures.Aside from the reforms, Modi also said that the government would take steps to ensure security in energy (both from fossil fuels and renewable sources), semiconductor chips, fighter jets, and critical minerals.Earlier in June this year, the Modi administration presented a report card outlining the reform efforts taken in the last 11 years of the regime under the National Democratic Alliance led by the Bharatiya Janata Party. You can read more about it here.Read more: There’s a significant risk to India’s growth and budget projections
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