By Shri Baisnab Charan Pradhan, High Commissioner of India to Sierra Leone

India is entering an important new phase in its economic journey following the recent sweeping reforms to the Goods and Services Tax (GST), often referred to as “GST 2.0” or “next-generation GST.” These reforms are not merely technical adjustments to tax rates, but represent a broader vision: to build a simpler, more transparent tax system; to ease burdens on households and businesses; to stimulate consumption and investment and in doing so, to lay a stronger foundation for sustainable long‐term growth.

As India’s High Commissioner to Sierra Leone, I see these changes as deeply relevant not only for India’s internal economic trajectory but also for enhancing India’s economic engagement with Africa, including with Sierra Leone. Here is an outline of the nature of the reforms, the domestic economic impacts we expect and what this means for our bilateral and regional cooperation going forward.

Some of the key features of the Next-Generation GST Reforms that were announced earlier this month include:

The GST rate structure has been revised to fewer, broader slabs. Key is the move away from multiple intermediate slabs (for example 12% and 28%) to a simpler structure of 5% and 18% for the vast majority of goods and services, plus a higher rate (40%) reserved only for “luxury” or “sin” goods.

Many items of everyday consumption (food staples, medicines, medical devices, household goods, agricultural inputs) have been shifted into the lower or zero taxed categories. This reduces cost of living and production costs in many sectors.

Alongside rate changes, there are reforms to how GST is administered: fewer compliance notices; simplified returns; measures to reduce disputes and delays; faster refunds, especially in cases of inverted duty structure; enhanced clarity in classification; stronger integration with other regulatory and tax systems.

To preserve revenue and discourage certain harmful consumption, a higher GST slab (40%) has been introduced for luxury items and sin goods. 

Expected Domestic Impacts and Long-Term Growth Implications

These reforms set the stage for several positive outcomes in India’s economy over the medium to long term. With lower taxes on essential goods and services, households have more disposable income. This is particularly meaningful for middle- and lower-income groups. The resulting rise in demand can stimulate production, sales and employment in consumer goods, retail, agriculture, health and other sectors.

By reducing tax burdens on essentials, the inflation component due to indirect taxes will be lowered. This helps keep consumer prices more stable. It also can enhance purchasing power, which supports inclusive growth.

Over the past 11 years, India has pursued a series of transformative economic reforms—from the rollout of the original GST in 2017 and the Insolvency and Bankruptcy Code (IBC), to digital financial inclusion through the JAM trinity (Jan Dhan, Aadhaar, Mobile) and infrastructure expansion under the National Infrastructure Pipeline. The recent “Next-Generation GST” reforms build on this foundation, streamlining the tax structure, reducing compliance burdens and enhancing transparency. By lowering tax rates on essentials and simplifying administration, these reforms boost consumption, reduce business costs and foster investment. This aligns with India’s broader strategy to formalize the economy, enhance ease of doing business and stimulate domestic demand.

As the world’s fastest-growing large economy, India is well-positioned to be a key driver of global economic growth. With a young population, rising productivity and deepening integration into global supply chains, India’s reform momentum will underpin sustainable, inclusive growth for decades to come.

Implications for India–Africa Engagement & Sierra Leone

India’s emergence as a stronger, more efficient and growing economy has important implications for our relationships with our African partners. For Sierra Leone in particular, some of these effects are:

As India’s production becomes more competitive, costs fall and demand rises, there is scope for deeper two-way trade with Africa. Lower taxes in India may also reduce export costs for Indian goods destined for Africa, making them more price-competitive.

A simpler tax regime, stable regulatory environment and rising domestic demand will boost investor confidence. Indian firms and investors are more likely to look outward, to Africa, for partnerships in manufacturing, agriculture, infrastructure, healthcare and technology. Sierra Leone stands to benefit from such partnerships: technology transfers, joint ventures, infrastructure projects and skills development.

As India lowers costs in medical devices, medicines and agricultural inputs domestically, our experience and scale in these sectors can be leveraged in cooperation with partners in Africa. India can more affordably share innovations in public health, nutrition, agriculture mechanization and other development priorities. This can support Sierra Leone’s goals in improving healthcare access, food security and rural incomes.

With reforms improving India’s manufacturing competitiveness, there is potential for stronger inclusion of African countries in supply chains, whether as suppliers of raw materials, as sites for parts or in downstream manufacturing. Building these linkages strengthens trade resilience and provides opportunities for African economies to benefit from global value chains.

India’s reforms offer an example of how tax policy, administrative simplification and digital tools can be used to foster growth, formalize economies and reduce poverty. There is scope for sharing of best practices, technical cooperation, and capacity building in tax administration, regulatory reform, customs, etc., which can benefit Sierra Leone and other African states.

Conclusion

In sum, India’s “next generation” GST reforms mark more than a fiscal policy change: they are part of a broader strategy to promote inclusive growth, to increase competitiveness, to improve living standards and to strengthen India’s role in the global economy.

For Sierra Leone and our wider African partners, this evolving Indian economy offers both an opportunity and partnership. As India grows more efficient and competitive, there are many avenues through which we can work together, through trade, investment, shared innovation and cooperation in public goods.

As High Commissioner, I look forward to fostering those partnerships, to seeing Indian-African trade and investment reach new heights and to ensuring that the benefits of reforms on both sides are shared widely and fairly.

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