India cuts taxes for shoppers to counter Trump's trade war.

Live from the UK, this is the Marketplace Morning Report from the BBC World Service.

Hello, I'm at Kareishi.

Let's start in India, where the country's finance minister has announced massive tax cuts

on hundreds of everyday consumer items aimed at boosting domestic demand.

It comes amid hefty US tariffs of 50% on

Indian exports. The BBC's Davina Gupta joins us on Marketplace. Hi there, Davina. Hi, Nick. How are you?

I'm very good, thank you. So what's been announced? Well, the mood certainly has changed. People here

are talking about a festive cheer. What's

happened is the most sweeping tax overhaul that India has seen in years, simplifying what

used to be an extremely complicated and a multi-tiered system. And we're talking about indirect

taxes. So these are the ones that people pay when they buy goods and services GST or goods and services tax.

And here's what's changed.

Consumer items like cooking oils, soaps, shampoos, coffee, something that has a direct impact on household budgets.

All of them are getting cheaper.

Then essentials like bread and milk will be tax-free, big-ticket electronics, taxes on them are getting slashed.

The logic is simple, Nick. Cut taxes, spark demand, and that in turn will support tens of millions of jobs

which are right now threatened because of the steep tariffs from the US. And what are the cost implications for

businesses? Well, that's an important point because because of those 50% steep tariffs,

experts have said that India's economy stands to lose almost 50 to 60 billion dollars. And on top of

this, these tax cuts, experts have said that it will cost the

exchequer almost $6 billion. So essentially, nobody is earning from it immediately. But what the

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