PM Modi has promised major GST reforms as a Diwali gift, aiming to lower taxes and boost MSMEs, a move seen as strategic amid rising global trade uncertainties following Donald Trump’s push for higher US import tariffs.
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| PM graced the 79th Independence Day celebrations at Red Fort, in Delhi on August 15, 2025. |
New Delhi : Prime Minister Narendra Modi, in his address to the nation on the occasion of India’s 79th Independence Day, announced that citizens could expect a “double Diwali” this year, with a major “next-generation” Goods and Services Tax (GST) reform package set to be unveiled as a festive gift. Speaking from the ramparts of the Red Fort, Modi said the upcoming changes would significantly reduce the tax burden on households and businesses, particularly benefiting micro, small and medium enterprises (MSMEs), while making daily-use items cheaper and boosting overall economic growth.
Recalling the implementation of the GST regime on July 1, 2017, which replaced a patchwork of state and central levies, the Prime Minister said the government had succeeded in simplifying tax compliance and reducing costs for businesses over the past eight years. Now, after a comprehensive review by a high-powered committee in consultation with state governments, Modi said the new reform plan was ready for rollout. “This will be a big gift for the people. Common citizens will see lower taxes, and our MSMEs will get a substantial boost,” he assured.
The Prime Minister also lauded India’s globally acclaimed Unified Payments Interface (UPI), calling it a “wonder” of the digital age, and urged the youth to innovate and ensure India’s dominance in technology, creative industries, and social media. “Why should our wealth go out of the country? We have the talent to create world-leading solutions right here,” Modi said.
Politically, the announcement comes at a time when global trade tensions are rising following former US President Donald Trump’s recent push for steep increases in American import tariffs, a move likely to disrupt supply chains and potentially trigger retaliatory measures from other economies. In this context, Modi’s promise of tax relief through GST reform could serve as a strategic domestic cushion against global economic uncertainties. By reducing costs for Indian consumers and producers, the reforms may help bolster internal demand, insulating the economy from possible downturns in exports and external trade shocks.
Moreover, the timing—just ahead of Diwali and in a politically charged atmosphere—underscores the government’s intent to reinforce its economic stewardship narrative. The reforms could be positioned as a proactive measure to keep India competitive in a potentially protectionist global environment, while also shoring up public sentiment ahead of key state elections. In effect, the “double Diwali” promise is as much about economic recalibration as it is about political signalling, offering relief at home while projecting resilience abroad.
Recalling the implementation of the GST regime on July 1, 2017, which replaced a patchwork of state and central levies, the Prime Minister said the government had succeeded in simplifying tax compliance and reducing costs for businesses over the past eight years. Now, after a comprehensive review by a high-powered committee in consultation with state governments, Modi said the new reform plan was ready for rollout. “This will be a big gift for the people. Common citizens will see lower taxes, and our MSMEs will get a substantial boost,” he assured.
The Prime Minister also lauded India’s globally acclaimed Unified Payments Interface (UPI), calling it a “wonder” of the digital age, and urged the youth to innovate and ensure India’s dominance in technology, creative industries, and social media. “Why should our wealth go out of the country? We have the talent to create world-leading solutions right here,” Modi said.
Politically, the announcement comes at a time when global trade tensions are rising following former US President Donald Trump’s recent push for steep increases in American import tariffs, a move likely to disrupt supply chains and potentially trigger retaliatory measures from other economies. In this context, Modi’s promise of tax relief through GST reform could serve as a strategic domestic cushion against global economic uncertainties. By reducing costs for Indian consumers and producers, the reforms may help bolster internal demand, insulating the economy from possible downturns in exports and external trade shocks.
Moreover, the timing—just ahead of Diwali and in a politically charged atmosphere—underscores the government’s intent to reinforce its economic stewardship narrative. The reforms could be positioned as a proactive measure to keep India competitive in a potentially protectionist global environment, while also shoring up public sentiment ahead of key state elections. In effect, the “double Diwali” promise is as much about economic recalibration as it is about political signalling, offering relief at home while projecting resilience abroad.
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