India has outlined its most sweeping tax reform since 2017, proposing to compress the four-tier Goods and Services Tax into two slabs of 5 percent and 18 percent. The plan, sent to state governments for approval, would scrap the 12 percent and 28 percent rates and shift roughly 99 percent of items currently taxed at 12 percent into the lower 5 percent band. Prime Minister Narendra Modi wants the changes in place by October, ahead of the Diwali shopping season, arguing they will lighten household bills and simplify compliance. Federal officials say the GST Council, which includes all state finance ministers, will take a final decision in the coming weeks. Consumer staples groups such as Nestlé, Hindustan Unilever and Procter & Gamble stand to benefit from cheaper inputs, while the government hopes the overhaul will revive demand as growth slows and trade tensions with Washington intensify. Economists warn the lower rates could trim federal and state revenues by about US$20 billion a year, yet New Delhi insists the fiscal-deficit target can still be met. IDFC First Bank estimates the measure could lift gross domestic product by 0.6 percent within a year, offsetting some of the near-term revenue shortfall. The tax revamp comes as President Donald Trump’s administration imposes a 25 percent tariff on Indian exports and signals additional duties over New Delhi’s continued purchase of discounted Russian crude. India’s seaborne imports of Russian oil climbed to a record 2 million barrels per day in August, underscoring the Modi government’s strategy of cushioning external shocks through cheaper energy while using domestic tax cuts to shore up consumer spending.