Decoding PM’s speech amid US trade tiff: Less tax, more savings, plus ‘swadeshi’

“Whatever we can make in our country, we must,” Prime Minister Narendra Modi said in his address to the nation on Sunday, September 21, doubling down on the “swadeshi” and “made in India” pitch amid tensions over trade and talent with the US.

He focused on higher savings due to income tax and GST reforms, and local production and consumption — tying it all into ‘aatmanirbharta’ or self-reliance — though not speaking directly about the massive US trade tariffs and the recent move by President Donald Trump to existentially hurt the H-1B visa regime that’s used by high-skilled Indians to work in the US.

What PM Modi said on GST

In a 19-minute speech focusing at first on taxes and savings, he spoke about the recent rate rationalisation in the Goods and Services Tax (GST).

The new GST rates, which bring down prices of hundreds of essential goods, kick in on September 22.

Modi called it the start of a “Bachat Utsav” or “savings festival”, and noted that it would start on the first day of Navratri, the Hindu religious celebration that traditionally marks the beginning of the festival season in India.

“Combined with the Income Tax relief (effectively zero tax for those with incomes up to ₹12 lakh a year, announced in the last budget), the GST reforms will now mean savings of ₹2.5 lakh crore for Indians,” he said.

It’s ‘swadeshi’ vs tariffs

Though Modi’s government has clarified that the GST rate cut has nothing to do with the US tariffs, many from his party BJP and allies have spoken of an inverse effect: They argue that price cuts due to lower GST will spur consumption at home, thus cutting the need to export goods to the US or elsewhere.

The messaging for “swadeshi” — with or without a mention of Trump and tariffs — has anyhow remained a central theme ever since India was hit by the massive 50% tariffs, half of which are described by Trump as “penalty” for buying Russian oil despite the Ukraine war.

Even after Trump imposed a $100,000 fee on H-1B visas on Friday, effectively killing the future of the programme, Modi chose to speak about self-reliance in an apparent response. “We have no major enemy in the world. Our only real enemy is our dependence on other countries… and together we must defeat this enemy of India,” Modi said on Saturday at an event in his home state Gujarat.

What’s happening on India-US trade deal?

Talks for a trade deal between India and the US continue in the meantime, despite major hiccups and mixed signals from the American administration.

On September 22, India’s commerce minister Piyush Goyal is traveling to the US for the next round of talks. Goyal also spoke about Indian talent potentially coming back home to “innovate and design here”.

The US trade tariffs mainly hit India’s exports to the US, which are way lower than the imports, but Modi went with a wider theme of how manufacturing in India must be a prideful mission for all Indians — “from the small shopkeepers to the ones buying from them, everyone should be proud to say, ‘I sell swadeshi’, ‘I buy swadeshi’”.

About a month ago, too, PM Modi used his radio show ‘Mann ki Baat’ to say that true service to the nation lay in promoting indigenous goods. “We must awaken the spirit of swadeshi,” he said, invoking Mahatma Gandhi and citing “global economic uncertainties”.

Before his September 21 address, the Opposition Congress had asked if the PM would “dare” speak on the tariffs, the visa fee, and Trump’s claims of having stopped an India-Pakistan war in May when India retaliated militarily with Operation Sindoor to a terror attack in Kashmir.

Modi’s government has maintained that India made the ceasefire decision on Pakistan’s request, independent of any mediation.