19/08/2025

BIZ & FINANCE TUESDAY | AUG 19, 2025

17

India proposes slashing taxes on small cars

Modi is set to meet Chinese President Xi Jinping at the end of the month while Chinese Foreign Minister Wang Yi will visit India this week for talks on the disputed border between the two countries. A planned visit by American trade negotiators to New Delhi from Aug 25-29 has been called off, a source said over the weekend, delaying talks on a proposed trade agreement and dashing hopes of relief from additional US tariffs on Indian goods from Aug 27. – Reuters Google agrees to A$55m fine for anti-competitive deals with telcos SYDNEY: Google agreed yesterday to pay a A$55 million (RM151 million) fine in Australia after the consumer watchdog found it had hurt competition by paying the country’s two largest telcos to pre-install its search application on Android phones, excluding rival search engines. The fine extends a bumpy period for the Alphabet-owned internet giant in Australia, where last week a court mostly ruled against it in a lawsuit brought by Fortnite maker Epic Games accusing Google and Apple of preventing rival application stores in their operating systems. Google’s YouTube was also last month added to an Australian ban on social media platforms admitting users aged under 16, reversing an earlier decision to exempt the video-sharing site. On anti-competitive tie-ups with Australian telcos, the country’s consumer watchdog said yesterday Google struck deals with Telstra and Optus, under which the tech giant shared with them advertising revenue generated from Google Search on Android devices between late 2019 and early 2021. Google admitted the arrangement had a substantial impact on competition from rival search engines, and has stopped signing similar deals while also agreeing to the fine, the Australian Competition and Consumer Commission (ACCC) added. “Today’s outcome ... created the potential for millions of Australians to have greater search choice in the future, and for competing search providers to gain meaningful exposure to Australian consumers,” ACCC chairman Gina-Cass Gottlieb said. Google and the ACCC have jointly submitted to the Federal Court that Google should pay the A$55 million fine. The court must still decide if the penalty is appropriate, the ACCC said, but the cooperation between the regulator and Google has helped avoid lengthy litigation. A Google spokesperson said the company was pleased to resolve the ACCC’s concerns which involved “provisions that haven’t been in our commercial agreements for some time”. “We are committed to providing Android device makers more flexibility to pre-load browsers and search apps, while preserving the offerings and features that help them innovate, compete with Apple, and keep costs low,” the spokesperson added. Google owns Android. A Telstra spokesperson referred Reuters to an earlier statement saying it and Optus, owned by Singapore Telecommunications, had fully cooperated with the ACCC and promised not to sign agreements with Google to pre-install its search product since 2024. SingTel was not immediately available for comment. – Reuters

down from nearly 50% pre-Covid, industry data showed. The tax cut will be a big win for Maruti, whose market share has plunged to about 40% from over 50% in the last five years as sales of its small cars such as Alto, Dzire and Wagon-R dropped. The segment makes up half of all cars sold by Maruti – majority-owned by Japan’s Suzuki Motor. Carmakers Hyundai Motor India and Tata Motors also stand to gain. Cars with higher engine capacity that currently attract 28% GST and an additional levy of up to 22% – resulting in total taxes of about 50% – may come under a new special rate of 40%, the source said. The government source added that details are being firmed up to consider if any extra levies should be imposed over the 40% to keep the overall tax incidence for big cars the same at 43%-50%. On the other hand insurance penetration in India continues to remain low, at 3.8% of GDP, in 2024, according to research firm Swiss Re Institute. The companies believe the lowering of GST will help boost sales of insurance products. Shares of automakers such as Maruti, Mahindra & Mahindra , Hero MotoCorp, Bajaj Auto and Eicher Motors jumped 2%-8% in morning trade. Shares of insurance companies such as ICICI Prudential, SBI Life and LIC jumped 2%-4%. – Reuters

boost consumption, and make essential and aspirational goods more accessible to a wider population,” Mahesh Nandurkar, equity analyst at Jefferies said in a note. “Maruti (Suzuki) should be the biggest beneficiary of this potential cut.” Modi’s deep tax cuts will strain government revenues but are winning praise from businesses and political pundits who say they will bolster his image in an ongoing trade fight with Washington. Federal government officials over the weekend said New Delhi has proposed only two rates of taxation – 5% and 18% – under the revamped structure. The highest 28% slab will be abolished. The new proposal, however, will impose a 40% tax on several “sin-goods” like tobacco products and luxury items. The announcement will not be effective until the GST Council, which is chaired by the federal finance minister and has representatives from all states, gives a nod. A meeting is expected by October. Sales of small cars, defined as those having engine capacity below 1200cc for petrol vehicles and 1500cc for diesel and not exceeding 4 metres in length, have slowed over the last few years as buyers switched to bigger, feature-rich SUVs. Small cars made up a third of the 4.3 million passenger vehicles sold in the world’s third-largest automobile market last fiscal year,

NEW DELHI: India aims to slash taxes on small cars and insurance premiums as part of a sweeping reform of its goods and services tax (GST), a government source said yesterday, as Prime Minister Narendra Modi’s plan sparked a rally in stock markets. Modi’s administration revealed plans of the biggest tax overhaul since 2017 over the weekend, and consumer, auto and insurance companies are likely to emerge as the biggest winners when product prices drop from October, once the reform is approved. The federal government has suggested lowering GST on small petrol and diesel cars to 18% from the current 28%, said the source who is directly involved in the matter. The GST on health and life insurance premiums may also be lowered to 5% or even zero from 18% currently, the same source said. Indian markets climbed yesterday, with the benchmark Nifty index trading 1.3% higher, on course for its best day in three months. Auto stocks also rallied. The tax cuts “would enhance affordability, o Modi govt also plans maximum of 5% GST on insurance premiums

Modi addressing the nation during Independence Day celebrations at the historic Red Fort in Delhi. – REUTERSPIC

US official says Indian buying of Russian crude must stop WASHINGTON: White House trade adviser Peter Navarro said India’s purchases of Russian crude were funding Moscow’s war in Ukraine and had to stop. unfairly singled out for buying Russian oil while the United States and European Union continue to purchase goods from Russia. high-value exports while giving Moscow the dollars it needs,” Navarro wrote.

processing in the June quarter was about 24% compared to an average 22% in 2024/25. He said purchases for the September quarter were continuing and the discounts on Russian oil were in the range of US$1.50 per barrel to the Dubai benchmark. Longtime rivals China and India are quietly and cautiously strengthening ties against the backdrop of the US president’s unpredictable approach to both. Indian Prime Minister Narendra

The adviser also said India’s close ties with Russia and China made it risky to transfer cutting-edge US military capabilities to India. Separately, Indian Oil Corp, the country’s top refiner, will continue to buy Russian oil depending on economics, the company’s head of finance Anuj Jain told an analyst meeting yesterday. Jain said his company’s Russian oil

US President Donald Trump announced an additional 25% tariff on Indian goods earlier this month, citing New Delhi’s continued purchases of Russian oil. The move will take total tariffs on imports from India to 50%. “India acts as a global clearinghouse for Russian oil, converting embargoed crude into

New Delhi was “now cozying up to both Russia and China”, Navarro wrote in an opinion piece published in the Financial Times yesterday. “If India wants to be treated as a strategic partner of the US, it needs to start acting like one.” India’s Foreign Ministry has previously said the country is being