JPMorgan Chase & Co. has highlighted India as a “bright spot” in the global economy, citing strong domestic growth and low dependence on exports. Sjoerd Leenart, the bank’s top Asia Pacific executive, said India has the potential to navigate current challenges like tariffs and H-1B visa changes, and still emerge stronger.
India Faces Global Challenges
India has been affected by policy changes from the United States. The US doubled its 25% reciprocal tariff on Indian goods due to India’s purchases of Russian oil. Recently, President Trump also signed an order introducing a $100,000 entry fee for new H-1B visas, where Indians represent over 70% of applicants. Existing visa holders are not affected, providing some relief.
Moody’s View on Indian IT Sector Amid H-1B Visa Changes
Moody’s says the new $100,000 H-1B visa fee will increase operating costs for Indian IT service companies. However, steady global demand for IT services is expected to cushion some of these cost pressures.
According to Moody’s, large players like TCS and Infosys are better placed to handle rising expenses and price pressures. Still, U.S. policy changes could slow the growth of India’s services exports, and fewer skilled workers heading to the U.S. may also reduce remittance inflows. Despite these challenges, India’s current account deficit is expected to remain within manageable levels.
GST 2.0 and Tax Cuts Boost Growth
Prime minister Narendra Modi has launched GST 2.0 during Navratri, reducing taxes on essentials to 5% and on electronics and vehicles to 18%. This reform provides relief to the middle class, MSMEs, and consumers, while promoting the Make in India initiative. Simplified taxes and lower rates are expected to accelerate economic growth.
PM Modi also announced income tax cuts, which, together with the GST reforms, are expected to save Indian households around Rs 2.5 trillion ahead of the Diwali season. He encouraged citizens to buy local products to strengthen domestic consumption and make India more self-reliant amid global protectionist trends.
Trade Talks with the US
India’s Commerce Minister Piyush Goyal is scheduled to visit the US to negotiate a mutually beneficial trade agreement. The visit aims to ease tensions after President Trump’s recent call with PM Modi. However, disagreements over US access to India’s dairy and farm markets continue to delay the final deal.
Conclusion: With strong domestic growth, tax reforms, and ongoing trade talks, India is positioning itself as a resilient economy even amid global uncertainties.
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