India has cut its corporate tax rates in an effort to spur investment and boost growth in the country’s faltering economy.
Finance Minister Nirmala Sitharaman said the base corporate tax rate would be lowered to 22% from 30%.
The surprise move triggered a stock market rally, with the Sensex index jumping 4.5%.
The tax cuts are the latest measures to boost spending and shore up investment in India.
Under the slate of reforms announced on Friday, India will lower its corporate tax rate to 22% from 30% for companies that don’t seek exemptions.
Firms that do receive incentives or exemptions will see their tax rate cut to 25% from 35%.
In addition, some new manufacturing firms will see their corporate tax rate lowered to 15% from 25%.
A Prasanna, head of research at ICICI in Mumbai, said the move would boost investment and employment.
“This is a long overdue and hugely positive move…