International News 03 September 2025
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India Plans Largest GST Reform in a Decade to Boost Consumption and Industry
India is preparing to slash Goods and Services Tax (GST) rates by up to 10 percentage points on nearly 175 products, marking the biggest reform in its indirect tax system since the GST’s launch in 2017. The proposal includes cutting GST on everyday items like toothpaste, shampoo, and talcum powder from 18% to 5%, while appliances such as air conditioners and televisions will see rates drop from 28% to 18%—timed ahead of the Diwali shopping season. Global brands like Samsung, LG, and Sony, as well as Indian consumer goods giants Hindustan Unilever and Godrej, are expected to benefit. The reform also extends to key export goods such as fertilizers, farm machinery, and textiles, aiming to cushion the blow from U.S. tariffs while stimulating domestic demand. In the automotive sector, small hybrid cars will see GST lowered from 28% to 18%, benefiting Japanese automakers like Toyota and Suzuki, though raising concerns among EV players such as Tata Motors and Mahindra that cheaper hybrids could slow India’s electrification drive. Two-wheelers under 350cc, which make up 95% of sales, will also face lower taxes, supporting producers like Bajaj Auto, Hero MotoCorp, and TVS Motor. In contrast, larger vehicles will face higher GST rates of 40%, while sin goods such as coal, gambling, and carbonated drinks will continue to be taxed heavily. The final list will be decided at the GST Council meeting on September 3–4, with the reform expected to enhance consumer purchasing power and bolster India’s economic resilience ahead of year-end demand.
South Korea’s Inflation Cools to Nine-Month Low in August
South Korea’s consumer inflation eased to 1.7% in August 2025, the slowest pace in nine months, down from 2.1% in July and below market expectations of 2.0%. The sharp decline was largely driven by a 13.3% drop in telecommunications costs, after major operator SK Telecom offered a 50% subscription discount to all 24 million users following a data breach. This temporary factor significantly weighed on overall price growth despite rising living costs in other sectors. Core inflation, which excludes volatile food and energy prices, slowed to 1.3% year-on-year from 2.0% in July, marking its weakest pace since August 2021. The data suggests easing price pressures may give policymakers more room to focus on growth, as South Korea faces external trade headwinds and weak manufacturing activity amid ongoing U.S. tariff pressures.
US Dollar Recovers Slightly After Five-Day Slide
The US dollar edged up in early Asian trading on Tuesday (Sept 2, 2025), snapping a five-day losing streak as investors awaited the reopening of US financial markets after Labor Day. The dollar index rose 0.1% to 97.709, rebounding from its lowest level since July 28. Pressure on the greenback has been fueled by safe-haven demand for gold, which is trading near record highs, and political risks after President Donald Trump dismissed Fed Governor Lisa Cook, sparking concerns over central bank independence as prospects for rate cuts remain uncertain. Gold extended its rally, hitting its highest since April and trading at US$3,482.55 per ounce, while silver eased 1.2% after a 14-year peak. The dollar gained 0.1% to 147.33 yen, while the euro slipped 0.03% to US$1.1707 following stronger eurozone PMI data. The Australian dollar fell 0.1% to US$0.6549 after a five-day rally, the New Zealand dollar held at US$0.5903, and the British pound edged down 0.1% to US$1.3539. This week, markets will focus on key US economic releases, including ISM manufacturing and services indices and the non-farm payrolls report, to gauge the impact of Trump’s policies on growth and labor markets.