NEW DELHI: India said on Friday it would slash corporate taxes to among the lowest in Asia as part of its drive to kickstart the stuttering economy, sending the country’s stock market surging as analysts predicted a renewal of interest in the region.
Finance Minister Nirmala Sitharaman said the main rate for domestic firms would fall to 22 percent from 30 percent as New Delhi aims to attract companies spooked by the China-US trade war that has hammered global supply chains.
The move looks to give a lift to Prime Minister who faces increasing pressure to relight once-stellar economy after five consecutive quarters of slowing growth saw India this year lose its status as the fastest-expanding major economy to China.
Sitharaman said that to “attract fresh investment in manufacturing and boost Make In India” the tax rate for new companies would be cut to 15 percent from 25 percent, the Press Trust of India news agency said.
He told reporters the new rates would be “comparable with the lowest tax rates in the South Asian region and in South East Asia”.The announcement sent shares soaring more than five percent in Mumbai — the biggest jump in 10 years — while the rupee and firmed against the dollar.