India said on Friday it would slash corporate taxes to among the lowest in Asia as part of its drive to kickstart the stuttering economy, as New Delhi aims to attract companies spooked by the China-US trade war that has hammered global supply chains.

Finance Minister Nirmala Sitharaman said the main rate for domestic firms would fall to 22 percent from 30 percent, saying the new rates would be “comparable with the lowest tax rates in South Asian region and in South East Asia”.

The move also looks to give a lift to Prime Minister who faces increasing pressure to relight once-stellar economy after five consecutive quarters of slowing growth saw India this year lose its status as the fastest-expanding major economy to China.

The announcement sent shares soaring more than 5 percent in Mumbai – the biggest jump in 10 years – while the rupee and firmed against the US dollar.

Jeffrey Halley at Oanda said the cuts were “likely to re-energise investor interest in the sub-continent” after two and a half years “of slowing growth and disappointment in PM Modi’s reform progress”.

Friday’s move will make it more tempting for foreign companies operating in China that have been hit by the China-US trade war, which has seen both sides impose tariffs on goods worth hundreds of billions of dollars.

India’s economy, the world’s 6th largest, was booming until recently but it has slowed in recent months, with growth in manufacturing dropping to 0.6% in the last quarter from 12% a year earlier.

A surprise demonetisation in 2016 and a new goods and services tax have taken a dire toll on many businesses. (AFP, AP)