Modi’s Diwali Gift Could Worsen India’s Tariff Sting
The prime minister’s promised tax cuts could stall festive-season spending.
India’s consumers may be reluctant to spend.
Photographer: Anindito Mukherjee/BloombergPrime Minister Narendra Modi has promised 1.4 billion consumers a big Diwali gift of lower consumption taxes, presumably to soften the blow in case President Donald Trump goes ahead with his threat and doubles tariffs on India this week. But the cure comes with its own headaches.
Amazon.com Inc. and Walmart Inc.’s Flipkart will launch their annual shopping festivals a month or more before the Diwali holidays in the third week of October. If buyers postpone their purchases during this crucial period to wait for lower prices, inventories will pile up. The auto industry, which expects to benefit the most from tax reductions, is asking Modi to speed up the cuts.