Commerce Minister Piyush Goyal said India’s ties with the United States remain strong despite recent tariff frictions, emphasising that both nations are working to finalise a trade pact by November 2025.
In an exclusive interview with Rahul Joshi, MD and Group Editor of Network18, Goyal acknowledged there have been “blips” but dismissed them as temporary setbacks.
He called the recent GST rationalisation “the most transformative step the nation has seen, possibly in the last 50-60 years.” He said the reform will ease costs for consumers, spur demand, and create a virtuous cycle of growth.
Below are the edited excerpts of the exclusive interview:
Q: A historic reform in GST rationalisation. My first question: All this started with the Prime Minister’s address on August 15, when he spoke about atmanirbharta. He framed it in the context of swadeshi. He framed it in the context of a quality drive. He gave a hint to us on that day that big reforms were coming. Your first reaction to this GST rationalisation…
Goyal: I’d like to compliment Prime Minister Modi for taking this bold decision. I see this as the most transformative step the nation has seen, possibly in the last 50-60 years.
This is a journey that Prime Minister Narendra Modi started in 2014. Back then, he spoke about Make in India. He was conscious that ultimately, we would have to become self-reliant. He promoted Digital India. He promoted Startup India. Swachhta was at the core of his work. He started the concept of trusting the people of India. Remember, one of the first decisions was, you don’t need to notarise a document. It was crazy—you had to make a Xerox copy, get it notarised, spend money, go and sit before someone and plead.
Ease of doing business is the pathway to a developed economy, and ease of living is a commitment to the people of India to ensure wider prosperity and inclusive growth. These decisions yesterday have happened over a sustained 11-year journey of taking a broken, fragile five economy to becoming the top-five economy of the world, soon to become the third largest by 2027.
An economy that was low on growth, high on inflation, starved of foreign exchange, with a completely broken banking system. An economy where there was no hope—investments were falling, and our passport had no respect anywhere in the world. Inheriting that from the Congress, Prime Minister Modi, brick by brick, step by step, brought reforms, brought changes, showed that he trusted the people of India, focused on a better quality of life for the poorest of the poor through various initiatives, brought social security into their lives, got 25 crore people out of poverty, faced the crisis of COVID admirably without letting the economy collapse as happened in many other developed nations.
In fact, bouncing back so well that for four years now, we are the fastest-growing large economy. Last quarter was 7.8% growth, with only 1.55% inflation. Who could have imagined that if you look back at 2014, in less than a decade, this country would transform so rapidly, so beautifully, and a foundation would be created on which a $4 trillion economy aims to become a $30 trillion economy by 2047. That, I think, is Prime Minister Narendra Modi’s very astute handling of the economy, and this transformative step that he had alluded to in his 15th August address. Of course, it has happened over many months of hard work. The Finance Ministry, Nirmala Sitharaman, the groups of ministers from the states, the groups of secretaries—all working, recognising that now compensation cess would no longer be required. We have got the elbow room to be able to give this huge bonanza and give our consumers the opportunity to spend more and give a boost to the Indian economy.
Q: There were also income tax cuts for the middle class in the last Budget, and now the rationalisation of GST, a long-standing demand. Like you said, it has taken months of work on it. How confident are you that this is going to spur demand, spur consumption, and also eventually investment?
Goyal: It’s very logical. Take, for example, the reduction in cement from 28% to 18%. It suddenly brings down the cost of real estate and building a home. Prime Minister Modi has already provided free homes to four crore families in the country, with another two crores more in the coming four or five years. A reduction in cement prices also helps the middle class acquire the ability to own an affordable home.
When you reduce the price for tractors, tractor parts, and other farm equipment, you are helping the farmer modernise, helping him improve his productivity. When you make the two-wheeler cheaper, or a small car cheaper of 1200 CC, the aspirational middle class, the young men and women who want to have a two-wheeler, get encouraged and are able to afford one. With interest rates also simultaneously coming down, thanks to low inflation and loans becoming cheaper and easily available in the strong banking system that we have today—not what we had in 2014—when the housewife goes out into the market, almost every product of daily use, all food products, all processed foods, materials required for a kitchen, foodstuffs, utensils, everything will see a transformational reduction in prices.
Industry has committed to us that they will make sure that the full benefit, net of input taxes, is passed on to the consumers. So, consumers are in for a significant gain, and I’m very, very confident.
Q: And how are you sure of that? How will you ensure that the industry complies? There have been cases of profiteering in the past.
Goyal: Few and far between. Otherwise, our experience is that you can trust the industry. Prime Minister Modi’s biggest strength has been that he has trusted industry, and they have never let him down. Similarly, the people of India have trusted Prime Minister Narendra Modi, and we have never let them down. So, I think it’s a two-way trust. Industry across the country, every sector, has assured the government that they will be with the government. They recognise that lower taxes and lower prices will give buoyancy to demand, and higher demand leads to higher taxes. Ultimately, higher demand also promotes more investment, because demand leads to more manufacturing in India. So, it’s a virtuous cycle of growth, and the multiplier impact is what will give India a big boost.
Q: Let us also talk a little bit about the revenue implications this might have. By one estimate, about ₹48,000 crore would be the revenue impact. Do you see that we will be able to take care of this? Any kind of fiscal slip that you see going forward?
Goyal: We are currently collecting nearly ₹2 lakh crore every month. And with this boost in demand, the revenue will probably go up rather than fall.
Q: So, you’re expecting some amount of revenue buoyancy as a result of this.
Goyal: Exactly. And I think every economic theory suggests that. For that matter, in ₹2 lakh crore a month, that’s ₹24-22 lakh crore collected in a year. This is hardly a very consequential amount.
Q: If you look at the Q1 GDP numbers at 7.8%, it’s a five-quarter high. How do you react to these numbers, especially in the context of someone calling it a dead economy?
Goyal: Rahul Gandhi has been a naysayer and a person who could never understand economics. We have seen that over the years. He sees ghosts where there are none. He cannot appreciate that the people of India are seeing significant improvement in their lives. He has not yet been able to reconcile that the people of India have voted him out three times in a row. It’s a rocket that somehow seems to fail every time it tries to take off.
Rahul Gandhi actually hurts the sentiments of 140 crore Indians who can see the improvement in their lives, who can see that Prime Minister Modi has reduced their income tax, who can see that Prime Minister Modi is providing 80 crore Indians—even after they have come out of poverty—with free food grains. Who can see that the fertiliser prices haven’t gone up in 11 years because Prime Minister Modi has made sure that any burden of increase in fertiliser prices—and there has been a huge increase—is borne by the central government.
Prime Minister Modi is a sensitive human being, very, very concerned and caring for the last man at the bottom of the pyramid. Right from day one, he worried about their social security. Right from day one, he committed his government to the poor, to the marginalised sections, to the unbanked sections of society. After all, what was Jan Dhan? He made the bank doors open for every citizen of this country. What was Ayushman Bharat? Finally, everybody above 70 gets free healthcare.
So today, 62 to 65 crore brothers and sisters, and everybody above the age of 70, are eligible for free healthcare. With the reduction of GST on premiums for life and health policies from 18% to zero, the middle class will now be able to buy more insurance and secure their future, their health, and guard against unfortunate incidents in their lives or their families’ lives.
I think it’s a very concerted effort over the years in a very smart fashion, while making sure the sanctity of the fundamentals of the economy remains strong, while making sure we don’t slip back, but only power on for a brighter future for every Indian. Prime Minister Modi has clearly shown that good economics can also equal good politics.
The old adage of the Congress, which was always looking at very low-ambition ideas, was full of scams and scandals—the coal scam, the telecom scam, the Commonwealth Games scam—the list goes on and on. Prime Minister Modi, in 11 years, has run an honest government. An honest government will always have money to spare, to give benefits worth over ₹2 lakh crore in one shot through the reduction of GST.
Q: So, will it give some comfort to the markets as well? They have been slightly soft over the last few quarters. Do you think it will also give market participants a reason to celebrate, because bold reforms are on the way, and this government is not hesitant to take risks?
Goyal: I think very clearly the market recognises that we are in safe hands. They recognise that a decisive, strong leader like Prime Minister Modi will always keep national interests ahead of everything else. And therefore, while they’ve been a little soft, they’ve been range-bound. Between 24,500–25,500 the Nifty has moved. But I’m very confident that this, and the impact of this, starting on the first day of Navratri, on 22nd September, will give a big leg up to the economy, to GDP growth, will ensure that Indian investments continue to power on.
It will attract more people to set up base. Ultimately, when there is demand, there will be interest in investment to meet that demand. A growing demand means growing jobs, growing numbers of people required in the supply chain. More investments will lead to jobs in manufacturing. Services are already growing at a double-digit level. You saw the numbers—the Services PMI is at an all-time high. So, I think all in all, India is poised for a very bright future. I assure you, our exports this year will also be higher than last year.
Q: Let me rewind a little bit and come to what you’ve been dealing with. You’ve been at the centre of it. Till about July 6 or 7, things seemed to be going fine with our negotiations with the US. Then, in a matter of weeks, we had a tariff of 25%, then another 25% on top of that. What went wrong in these few weeks?
Goyal: I think the US–India relationship is one of the most consequential relationships on the globe today. We are two very large democracies. We believe in the rule of law. We have been allies and friends for long. We have had certain blips, like we had the sanctions post the nuclear tests in 1998. I look at this only as one more situation, which will pass as there is a deeper understanding of the reality of the situation, and I am very confident this relationship will only strengthen in the years to come.
Q: And how soon do you expect things to resolve?
Goyal: It could happen soon enough. It may take some time. Irrespective, we will continue to be friends. We will continue to be engaged with the United States, and I am sure we will continue to have greater economic relationships, defence relationships, greater interest in a safe, fair, and secure Indo-Pacific. In some sense, it’s a very multi-dimensional relationship, where we contribute to each other’s economies in different ways, and will continue to do so.
Q: We also picked up that you said somewhere that things could happen as soon as November. Is that correct?
Goyal: If you recall, when Prime Minister Modi and President Donald Trump met in February, they had tasked the two teams to conclude the first tranche of a bilateral trade agreement by the fall of 2025, which is about November 2025. I’m sure we will continue to be engaged to try and find solutions to reach that outcome. If at all, it’s give and take a few days, a few weeks, a few months—in a nation’s history, such small periods will not define long-term objectives and goals.
Q: I think what surprised and even shocked some people was the erratic and incendiary language that was used by some of the officials of the Trump administration, calling it Modi’s war or a laundromat of the Kremlin. How do you react to this? Are conciliatory noises coming from the other side now?
Goyal: I think there could be either some misunderstandings or some personal opinions that may be reflected in that. I do not think that deters the US and India from continuing to maintain a strategic alliance and partnership. Our friendship is far stronger than a few comments that may be made by a few people.
Q: China, in the beginning, retaliated with retaliatory tariffs. Would India do anything like that?
Goyal: India is a patient country, and I believe we should make every effort to come to a better, deeper understanding within the framework of international trading laws. Therefore, I think we have always believed in dialogue, diplomacy, and an effort to strengthen rather than weaken relationships.
Q: President Trump has recently said that India has offered to cut tariffs to zero, and time is running out. What do you say to that?
Goyal: I never negotiate such agreements and free trade deals with the media. We negotiate behind closed doors, and once the negotiations are complete, we’ll certainly come back to you.
Q: So, what are the red lines—things that we will not compromise on?
Goyal: I think any issue that can hurt national interests, that can hurt the interests of our farmers, our fishermen, our MSME industry, or issues which are sensitive with religious sensitivity—those would broadly be the issues where India would need more understanding when we finalise the framework of our agreement. We will never compromise on the interests of our farmers, our fishermen, our MSMEs, or our religious sensitivities.
Watch the accompanying video for the entire conversation.
