Vietnamese firms brace for India’s GST reform wave
The new tax regime of India is a landmark reform that promises to generate profound changes in India’s business landscape and will directly affect Vietnamese investors, producers, and exporters in this market.
New Delhi (VNA) – The Vietnam Trade Office in India, in collaboration with consultancy firm KPMG India, on September 17 hosted an online seminar focusing on India’s tax policy adjustments and its impacts and implications for Vietnamese enterprises.
The event aimed to help Vietnamese companies grasp key policy changes and prepare appropriate response strategies.
Opening the event, Vietnamese Trade Counsellor in India Bui Trung Thuong noted that on September 3, the Indian Government approved the new Goods and Services Tax (GST 2.0), which will take effect on September 22.
Under the reform, the multi-tier tax system will be simplified to two main rates of 5% and 18%. More than 200 essential items including electronics, automobiles, medical equipment, footwear, and household goods will benefit from tax cuts.
This is a landmark reform that promises to generate profound changes in India’s business landscape and will directly affect Vietnamese investors, producers, and exporters in this market, Thuong said.
Ridhima Mehta, a tax expert at KPMG India, said GST 2.0 centres on simplifying tax structures, adjusting rates, and modernising administrative procedures. Fewer tax brackets will help reduce disputes and provide greater transparency and stability while digitalised registration, filing, and refund processes will ease compliance for small businesses, start-ups, and exporters.
She highlighted that several sectors stand to gain, notably health care, education, textiles, agriculture, electronics, and essential consumer goods. Conversely, coal and other polluting energy sources will face higher taxes to promote clean energy. Meanwhile, life and health insurance will be fully exempt from GST, creating momentum for India’s insurance market.
For Vietnamese businesses, the reform not only helps to lower costs and boost competitiveness but also requires swift adaptation, Mehta stressed. Firms are advised to adjust management systems, update ERP software, review contracts, manage inventory carefully, and devise appropriate pricing strategies to maximise benefits.
༒ Between January and July 2025, Vietnam’s exports to India reached 5.94 billion USD, up 10.7% year-on-year, maintaining a trade surplus. Key export items such as steel, textiles, and plastic products are expected to gain from the new tax regime. However, sectors like footwear, farm produce, and aquatic products may face stronger competition due to India’s temporary refund scheme and domestic consumer goods incentives./.
Vietnamese businesses are eager to learn from India’s technological solutions, experience, and modern governance practices to pursue green development and digitalisation, said a Vietnamese official.
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