(Commonwealth_India) The economic challenges India is facing originate from across the ocean. With Donald Trump back at the helm in the U.S., his administration has reimposed steep tariffs, a blunt 50% hike on Indian exports worth nearly $48 billion. For the factories, workshops, and millions of workers whose livelihoods depend on selling to American buyers, the tariff increase isn’t just policy. It’s personal. And it hurts.
In cities like Tiruppur, Panipat, or Moradabad, places where looms run late into the night and generations have stitched, carved, or woven goods bound for foreign shores, the news has landed like a hammer. Orders are being paused. Contracts are being rethought. Exporters, particularly those with smaller operations that already operate on narrow profit margins, are currently assessing their losses and considering strategies to maintain their workforce.
For 20-year-old Rafiq, who irons garments for an export house in Delhi, the change could mean a shorter workweek or no work at all. For Anita, a tailor in Jaipur, it could mean putting off school fees for her children. These are not abstract economic consequences; they’re real moments in real homes, reshaping real futures.
But even as anxiety grows, the Indian government is trying to shift the focus from what can’t be controlled abroad to what can be strengthened at home. Rather than responding with threats or counter-tariffs, the Indian government is quietly focussing on a different strategy: its own people and its own market.
The centre of this response is a major overhaul of India’s Goods and Services Tax (GST), a tax system that affects almost everything bought or sold in the country. The plan? The plan is to reduce the current four tax slabs to just two: 5% and 18%. It’s a technical fix, yes, but its purpose is deeply human.
The idea is to lower the cost of essentials, ease the financial burden on families, and give the domestic economy room to breathe and grow. Everyday items such as cooking oil, toothpaste, furniture, and possibly even small cars could become more affordable. For a family choosing between saving for a medical emergency or buying a new appliance, that difference matters. It can restore a little choice, a little dignity.
A simpler GST system means fewer compliance hurdles, faster refunds, and less time spent drowning in paperwork for businesses, especially small and medium enterprises. It’s about giving entrepreneurs space to focus on what they do best: create, build, hire, and grow.
The government hopes that with more money in people’s pockets, spending will rise, and that increase in demand will begin to fill the gap left by falling exports. It’s not an instant fix. But it’s a bet on something solid: the strength of India’s domestic economy, powered by over a billion consumers with aspirations, needs, and the will to move forward.
And there’s reason for cautious hope. According to the State Bank of India, these GST reforms could inject nearly ₹1.98 trillion, around $22 billion, into the system. That boost could lift India’s GDP by about 0.6%. While it may not be a miraculous solution, it represents a significant step forward.
Still, no one’s pretending the process will be easy. The tariffs will sting. Exporters will struggle. Some will close their businesses. Workers will face uncertainty. However, a quiet, determined shift is happening, one that suggests India doesn’t need to wait for global powers to set the pace. It can chart its own course.
That choice reflects resilience and hope, as it avoids panic. It avoids posturing. It does this by simply turning inward, taking stock, and choosing to bet on its own people, their needs, their spending power, and their ability to carry the economy forward.
It’s a moment of hardship, yes. But it’s also a moment of reflection and quiet resolve. Amid the noise of global politics and trade wars, India is choosing not to shout but to build. Instead of pursuing headlines, India is focussing on fostering stability. Instead of retaliating, India is pursuing reform.
Ultimately, this isn’t just about numbers or trade routes. It’s about individuals such as weavers, factory owners, shopkeepers, families, and a nation striving to withstand the challenges by maintaining stability from within.
