It's self interest.

"Prime Minister Narendra Modi said that India, guided by its mantra of 'Reform, Perform and Transform,' is now ready to help the world break free from the grip of slow growth." The PM "painted a picture of a confident nation that is no longer a silent observer but contributes significantly to global economic revival." ET. "India will be able to increase its share in global GDP from 3.3% in in 2021 to 4.1% in 2028." India's GDP was $4 trillion in 2024, with a per capita nominal GDP of around $2800, wrote Dr SP Sharma. A 0.8% increase in the share of global GDP in seven years is not exactly blistering pace and the rise could be due to weakness in other economies. Meanwhile, "US Treasury Secretary Scott Bessent has warned that Washington could increase secondary tariffs on India." "Russian oil made up 35% to 40% of India's oil imports in 2024 - up from 3% in 2021." "Trump's new 50% tariffs rate on India is set to come into effect on 27 August." BBC. On 15 August, "PM Modi announced the introduction of Next-Generation GST reforms by this Diwali, aimed at reducing taxes on daily use items." pib.gov.in. In reality, the festival season in India will start with Ganesh Chaturthi on 27 August and run till Diwali on 21 October (Calendar). "The proposed cut in goods and services tax (GST) rates is being welcomed by consumers, but companies across sectors are reporting a slowdown in sales as buyers wait for lower prices ahead of PM Modi's Diwali gift promise." ET. Hindus consider this period to be auspicious for buying more expensive goods like cars, refrigerators and washing machines. Post-Covid Indian companies have substantially reduced their debt. "Profit after tax increased to more than Rs 11 trillion in FY25 from less than Rs 4 trillion in FY19." "India Inc cash holding has tripled to more than Rs 13 trillion as of March 2025 from around Rs 4.5 trillion in Marcch 2018." And yet, "There is limited crowding-in of private investment demand after years of public-sector led capex." "India Inc, sitting on a huge cash pile, should now display the proverbial 'animal spirits' and participate in the India growth story more vigorously," wrote SK Das & S Sharma. 'Animal spirits' seem to have shifted to the bond market. Yields on benchmark Indian sovereign bonds climbed the most in 14 months after PM Modi announced fewer and likely lower slabs for indirect taxes." ET. Yield on the benchmark 10-year bond rate in India is 6.545% this morning (MarketWatch) even though the RBI cut its repo rate to 5.50% on 6 June (pib. gov.in.). The US Federal Reserve held its Funds rate at 4.25%-4.5% in July (BBC) while the yield on 10-year Treasury is 4.269% (CNBC). The Indian government borrows at 100 basis points higher than the RBI interest rate while the US government borrows at the rate set by the Fed. Lower tax rates were supposed to increase consumer spending but has had the opposite effect, so companies would be reluctant to increase capacity and that means no increase in employment, while lower tax collections may increase government borrowing which is reflected in rising bond yields. People see their own interest. Logical.