Between headlines of the White House’s latest administration-ending scandal and Robert Mueller’s progress in the Trump-Russia probe, vital news about a rising superpower slipped completely under the American media’s radar. In the World Bank Group’s 2018 Ease of Doing Business Index rankings, which rewards better business environments and simpler regulations, India shot up 30 places to 100th overall, largely as a result of a major increase in the Index category of “Paying Taxes.” The revised ranking vindicates Prime Minister Narendra Modi’s pro-business reforms, one of his administration’s major focuses, and emphasizes the monumentality of one of his signature pieces of legislation thus far, the Goods and Services Tax (GST), which came into effect on July 1, 2017.

Before the passage of the GST, the Indian taxation system presented a major inconvenience to manufacturers: the cascading effect of taxes. The pre-GST tax code levied indirect taxes, such as value-added taxes (VAT) and excise taxes on manufacturers and goods at each stage of the manufacturing process. For example, a tax was levied at the acquisition of cotton, the conversion of cotton to shirts, the distribution of shirts to retailers, and the sale of the shirts to consumers. The problem with that system was in decentralization, which meant that states levied taxes during certain phases of the manufacturing process and the federal (or in Indian parlance, central) government levied taxes on other steps. Because of the lack of unification, manufacturers could not receive input credit on state taxes towards federal taxes and vice versa, meaning that manufacturers (and consumers at the final point of sale) paid tax on taxes—clearly, an unfair system. This cascading effect of taxes led to higher prices for consumers and a negative incentive for manufacturers.

The passage of the GST unified this hodge-podge taxation landscape by subsuming state and central duties, surcharges, VATs, sin taxes, and excises at each step of the manufacturing process with a new single tax. The GST sets five tax rates, 0%, 5%, 12%, 18%, and 28%, and classifies every good and service under one of the five rates, with extra cess (tax) for certain products, like luxury cars and tobacco, and a special rate for precious stones and gold. With the GST, manufacturers can claim input credit and deduct their previous step’s tax burden from their current step’s tax burden, and the state and central governments share the revenue generated. This means goods and services are properly taxed at the nominal tax rate, rather than being subject to cascading taxes. The tax is collected through the central government’s integrated GST system, an ambitious end-to-end IT framework that collects tax equal to the sum of the state and central tax rate. The state is then credited its state GST tax revenue and the central government keeps its central GST revenue. The integrated GST system credits the state in which the good or service is consumed, because the GST is a consumption tax.

The effect of the GST on India’s two-trillion-dollar economy will be enormous. Because of the simplified nature of the system, which will be implemented through the aforementioned nation-wide IT program, previously unorganized sectors of the economy—unintended black markets, like the fast-moving consumer goods sector—will become available for taxation. The result of closing inefficiencies and loopholes in the system will lead to lower consumer prices for a variety of goods and services, especially for basic goods and services necessary for survival, ending the regressive policies of the previous tax system — counteracting some of the regressive policies of consumption taxes such as the GST . Goods will also move more quickly across state lines, as state border checkpoints, once necessary to assess state import duties, are abolished. Initial uncertainty about the GST’s implementation hurt India’s GDP growth, falling to a low of 5.7% in the April-June period, but Morgan Stanley expects India to grow at 6.4% in 2017 and 7.4% in 2018, as the long-term benefits of the GST kick in. The Economic Times, for example, reported on the potential for a GST-assisted improvement in the Ease of Doing Business ranking to influence Western credit rating agencies’ outlooks on India, which traditionally have been negative — currently, India is rated the lowest of investment-grade ratings, BBB-, by Moody’s, Standard & Poor’s, and Fitch.

The Modi government celebrated the World Bank’s optimistic outlook for India, but continues to eye ambitious reforms to place India in the top-50 countries for ease of doing business. In particular, the administration has put forth 90 specific policy proposals, 22 of which concern construction permits and 14 of which concern registering property, two areas where India suffers in its World Bank ranking, at 181st and 154th out of 190 respectively. Other potential areas of improvement for future reforms include enforcing contracts (164th), starting a business (ranked 156th), and trading across borders (146th), while areas of strength include protecting minority investors (4th), getting credit (29th), and getting electricity (29th). The Modi administration has also overseen two other significant reforms alongside the GST; namely, bankruptcy code reform and public bank recapitalization, which will bolster growth in 2018. Though India’s efforts to modernize and reform may not be receiving attention in American media, which is absorbed with its nation’s domestic policy debates, India nonetheless is making strides in its effort to become a global economic superpower.