Modi Tax Cut to Spark Tough Talks With Cash-Strapped States

Indian Prime Minister Narendra Modi will likely face tough negotiations with states, who are expected to shoulder the bulk of revenue losses from his surprise move to lower consumption taxes within three months.

Modi proposed a major rejig of the complex goods and services tax last week, a move many businesses had been pushing for since the system was rolled out in 2017. Stocks rallied as investors bet lower taxes on everyday goods would boost consumer spending and help offset the drag on economic growth from higher US tariffs.