FM's tax cuts may give more elbow room to govt to sign the RCEP deal

Key pain point of Indian industry, of being a high-cost producer of goods, substantially reduced; Indian tax on companies now slightly below average Asian level

Friday’s tax cuts could give the government more space to look to sign the Regional Comprehensive Economic Partnership (RCEP) deal between 16 Asian nations, including India. Finance minister Nirmala Sitharaman has substantially reduced one of the pain points of Indian industry, that of being a high-cost producer of goods. The reduction of corporation tax rates to a competitive pan-Asian level—a KPMG data set shows the Indian tax on companies is now slightly below the average Asian level—means high capital costs are not a very significant phenomena for the Indian economy going ahead. The aggregate corporation tax rates are now lower