Prime Minister Narendra Modi has announced what officials describe as the largest overhaul of India’s Goods and Services Tax since its 2017 launch, proposing to collapse the current four-rate structure into two slabs of 5% and 18%. New Delhi wants the changes in place before the Diwali festival season in October to spur consumer spending. The Finance Ministry estimates the reform will remove roughly $20 billion in annual tax burdens from households and companies. Despite the foregone revenue, senior officials told reporters they remain confident of meeting the current year’s fiscal-deficit target, citing buoyant direct-tax collections and expenditure reprioritisation. The move comes as trade tensions with Washington intensify ahead of a second round of U.S. tariffs on Indian goods later this month. Modi has framed the GST cut as both a stimulus measure and a step toward making India a more attractive destination for foreign investment. Investors welcomed the announcement. Gift Nifty futures indicated the benchmark Nifty 50 would open about 1.2% higher on Monday, extending gains from an S&P Global Ratings upgrade that reaffirmed India’s macroeconomic stability. Lower oil prices after U.S.–Russia talks also supported sentiment.