India's industrial activity growth slowed to 4% in August 2025, down from a six-month high of 4.3% in July. The slowdown was primarily driven by the consumer durables and non-durables sectors, along with slower growth in manufacturing, capital goods, and infrastructure. Conversely, mining, primary goods, and electricity showed positive turnarounds. Experts noted that recent tariff and GST reforms had no immediate effect on these figures. The Index of Industrial Production (IIP) data, released by the Ministry of Statistics and Programme Implementation, highlighted that while growth slowed, it remained significantly higher than the 0% growth recorded in August of the previous year.
- The Index of Industrial Production (IIP) growth slowed to 4% in August 2025.
- Consumer durables and non-durables sectors were the primary drags on industrial growth.
- Mining and primary goods sectors saw a turnaround, with primary goods hitting a seven-month high of 5.2%.
A recent analysis by the Comptroller and Auditor General (CAG) of India highlights the varied fiscal health of Indian states post-pandemic. While some states like Uttar Pradesh and Maharashtra showed revenue surpluses, others like Punjab and Kerala face high debt-to-GSDP ratios and interest payment burdens. The report notes that many states rely heavily on central transfers and lottery revenues rather than sustainable tax bases. Furthermore, 'off-budget' borrowings and delayed GST compensation have masked true fiscal deficits. The analysis warns that high welfare spending, while socially necessary, must be balanced with capital expenditure to ensure long-term economic stability.
- The CAG report shows that state debt levels spiked significantly following the COVID-19 pandemic.
- States like Punjab have debt-to-GSDP ratios exceeding 45%, leading to a 'debt trap' where new borrowings are used to pay interest.
- There is a significant 'vertical imbalance' where states are responsible for most social spending but have limited independent revenue sources.
In his latest 'Mann Ki Baat' address, Prime Minister Narendra Modi made a strong pitch for 'Swadeshi' (locally made) products and Khadi to strengthen India's economy. He highlighted that Khadi sales have surged significantly in recent years and urged citizens to support local artisans during the upcoming festival season. The PM also mentioned the 100th anniversary of the Rashtriya Swayamsevak Sangh (RSS), describing its journey as inspiring. Additionally, he lauded Lt. Commanders Dilna and Roopa Alagirisamy for becoming the first Indian women to circumnavigate the globe in a double-handed sailing vessel, symbolizing Indian grit.
- The Prime Minister emphasized the adoption of Swadeshi goods as a path to making India self-reliant (Atmanirbhar).
- Khadi is promoted as a symbol of national pride and a means to provide livelihoods to rural artisans and entrepreneurs.
- The address marked the upcoming centenary of the RSS, highlighting its role in the country's social fabric.
Observed on September 29, the International Day of Awareness of Food Loss and Waste (IDAFLW) highlights that one-third of global food is lost or wasted. In India, post-harvest losses cost nearly ₹1.5 trillion annually, impacting farmer incomes and environmental stability. Food loss contributes significantly to greenhouse gas emissions, particularly methane from rotting paddy. Solutions include strengthening cold chains through the PMKSY scheme, adopting AI-driven forecasting for logistics, and promoting a circular economy where surplus food is redirected to food banks and waste is converted into compost or bioenergy.
- Nearly one-third of all food produced globally is lost or wasted, undermining food security and climate goals.
- In India, post-harvest losses amount to approximately 3.7% of the agricultural GDP, with fruits and vegetables being the most vulnerable.
- Food loss generates over 33 million tonnes of CO2-equivalent emissions annually in India across 30 major crops.
The article discusses the 'Engels' pause,' a period where technological progress leads to productivity gains without immediate improvements in worker welfare. Currently, AI mirrors this by boosting corporate efficiency while stagnating wages and increasing inequality. To mitigate this, the author suggests governance models like the Mohamed bin Zayed University of Artificial Intelligence (MBZUI) for human capital development, robot taxes, or Universal Basic Income (UBI). Treating AI infrastructure as a public good and ensuring equitable access to compute and data are essential to prevent a prolonged period of jobless growth and social disparity.
- The 'Engels' pause' refers to a historical lag between technological innovation and the rise in living standards for the working class.
- AI is currently increasing productivity but also causing job displacement and widening the gap between capital owners and labor.
- Effective governance is required to redistribute AI-driven wealth through mechanisms like robot taxes or UBI experiments.
U.S. President Donald Trump has announced 100% tariffs on branded and patented medicines, effective October 1, to weaponize access to healthcare. While a 15% cap exists for the EU and Japan, hubs like the U.K., Switzerland, and Singapore face the full burden. India’s generics industry is currently spared, but uncertainty remains over Active Pharmaceutical Ingredients (APIs) and future expansions to biosimilars. This move could significantly raise drug costs for American patients and disrupt global supply chains, forcing nations like India to diversify export markets and accelerate alternative trade alliances to maintain pharma sector growth.
- The U.S. is imposing 100% tariffs on imported branded and patented medicines to reshape global supply chains.
- India's generics industry, which accounts for 90% of U.S. prescriptions, is currently exempt but remains vulnerable to future tariff expansions.
- There is significant uncertainty regarding whether Active Pharmaceutical Ingredients (APIs), dominated by India and China, will be included in the tariff net.
Online gaming companies have approached the Supreme Court, stating that their businesses have 'shut down' due to the implementation of the Promotion and Regulation of Online Gaming Act, 2025. The new law bans real money games, related banking services, and advertisements. The companies are seeking an urgent hearing and interim relief, arguing that the law violates the right to equality, freedom of expression, and the established legal distinction between games of skill and games of chance. The Centre maintains that the law is necessary to curb the 'rapid mushrooming' of online money games that pose risks to individuals and families.
- The Promotion and Regulation of Online Gaming Act, 2025, effectively bans real money online gaming in India.
- Gaming firms argue the law is unconstitutional and fails to distinguish between skill-based gaming and gambling.
- The Supreme Court has transferred various petitions from High Courts to itself to ensure a uniform authoritative pronouncement.
U.S. President Donald Trump has announced a new round of significant tariffs on a variety of imported goods, including a 100% duty on branded or patented pharmaceutical products unless the manufacturing firm builds a plant in the U.S. Additionally, a 25% tariff has been placed on heavy-duty trucks, while household furniture faces duties ranging from 30% to 35%. Trump justified these moves as a response to the 'flooding' of the U.S. market by foreign goods and a tool to protect domestic manufacturers from unfair competition. These actions signal a shift towards using tariffs as a primary foreign policy and revenue-generating tool.
- A 100% tariff applies to any branded pharmaceutical product unless the company manufactures it within the United States.
- Heavy-duty trucks face a 25% tariff, specifically targeting exporters from countries like Mexico, Canada, Japan, Germany, and Finland.
- The administration views tariffs as a significant revenue source, with projections suggesting a collection of $300 billion by year-end.
During a meeting in New Delhi, Prime Minister Narendra Modi and Russian Deputy PM Dmitry Patrushev discussed the creation of a BRICS Grain Exchange. This common agricultural food exchange aims to boost trade among BRICS member-countries and strengthen win-win cooperation in agriculture and food processing. The two sides also discussed the ongoing work on a Free Trade Agreement (FTA) between India and the Eurasian Economic Union (EAEU). Trade turnover between India and Russia reached a historic high in 2024, and both nations are looking forward to the 23rd India-Russia annual summit.
- The BRICS Grain Exchange is proposed to facilitate agricultural trade within the bloc.
- Discussions included a potential Free Trade Agreement with the Eurasian Economic Union.
- Agricultural cooperation focuses on fertilizers, food processing, and mutual trade.
Despite having over 5,400 km of international borders, India's eight Northeast states contribute a negligible 0.13% to national exports. In contrast, four states (Gujarat, Maharashtra, Tamil Nadu, Karnataka) account for over 70% of merchandise exports. The Northeast lacks operational trade corridors and adequate logistics infrastructure, with trade often being secondary to security concerns. The region's tea industry in Assam is also facing a crisis due to rising costs and stagnant prices. Experts argue for a shift from 'securitised bottlenecks' to 'Act East' trade hubs to integrate the region into the global economy.
- India's export economy is highly centralized, with Gujarat alone contributing over 33%.
- The Northeast remains structurally unrepresented in national export-shaping institutions like the Board of Trade.
- Infrastructure in the Northeast is often performative, with roads existing on paper but lacking cold-chain facilities.
A proposed one-time $100,000 fee for new H-1B visa applications could significantly impact Indian students, who recently became the largest group of international students in the U.S. Over 75% of Indian students are enrolled in STEM fields, and many rely on the H-1B path for employment after their Optional Practical Training (OPT). The high fee, combined with existing educational debts, could price many out of the American job market. In 2024, Indian households spent billions on U.S. education, often through loans or life savings, making this financial barrier particularly daunting for those seeking to transition from student status to initial employment.
- Indian students have overtaken Chinese students as the largest group of international students in the United States.
- More than 75% of Indian students in the U.S. are enrolled in STEM (Science, Technology, Engineering, and Mathematics) courses.
- In FY24, 57% of all initial H-1B beneficiaries were Indian nationals, many transitioning from F-1 student visas.
The U.S. administration's proposal to implement a $100,000 annual fee on H-1B visas threatens the business models of Indian IT giants like TCS, Infosys, and Wipro. These firms have traditionally relied on 'wage arbitrage,' where Indian engineers work for lower costs than their American counterparts. A $100,000 fee would make this model economically unviable, potentially forcing firms to shift operations overseas or accelerate automation. While intended to protect domestic jobs, critics argue it could lead to an 'innovation exodus' as international students and skilled professionals seek opportunities in countries like Canada or Australia instead.
- The proposed $100,000 fee represents a massive increase from current filing costs, making the H-1B system prohibitively expensive.
- Indian IT firms face a choice between drastically raising prices or moving entire business functions out of the United States.
- The policy could inadvertently benefit large U.S. tech firms that can absorb costs while hurting smaller startups and mid-sized companies.
Prime Minister Narendra Modi is set to transfer the first installment of ₹7,500 crore to 75 lakh women in Bihar under the Mukhya Mantri Mahila Rozgar Yojana. Each eligible woman will receive ₹10,000 as initial assistance to start a business of her choice. The scheme targets women from economically weaker sections, nuclear families, and non-income tax payees in the 18-60 age group. Following a performance review after six months, an additional grant of ₹2 lakh will be provided to eligible women entrepreneurs. The Rural Development Department is the nodal agency for this massive economic empowerment initiative aimed at strengthening Bihar's economy.
- The scheme provides an initial non-returnable assistance of ₹10,000 to 75 lakh women to foster entrepreneurship.
- Priority is given to Jeevika Self-Help Group members and women from economically weaker sections without permanent income.
- An additional ₹2 lakh grant is available for those who show successful business progress after a six-month performance review.
The 56th GST Council meeting introduced 'GST 2.0,' aimed at simplifying the tax structure and reducing compliance burdens. The reform collapses the old four-slab structure into a simpler set: approximately 5% for essentials, 18% as the standard rate, and 40% for luxury/sin goods. These changes are expected to benefit MSMEs by reducing litigation and improving margins. Procedural simplifications, such as faster refunds and easier compliance for small firms, have been introduced. While there might be short-term revenue costs, long-term gains include increased formalization, fiscal buoyancy, and a boost in consumption due to lower prices on non-luxury goods.
- GST 2.0 aims for rate rationalization, moving 99% of goods and services into the 18% or lower tax categories.
- The reform addresses long-standing issues like inverted duty structures and complex classification disputes that hindered business growth.
- MSMEs are expected to be the primary beneficiaries of reduced compliance friction, faster refunds, and administrative ease.
India and the U.S. are in disagreement over corn imports. While the U.S. seeks market access for its surplus corn, India remains hesitant due to its strict policy against Genetically Modified (GM) crops. Currently, India only allows GM cotton cultivation. Importing GM corn could risk contaminating the food chain. Additionally, India's push for ethanol blending has increased domestic demand for maize, but the government prefers boosting local production over imports. India's small-scale farming model contrasts sharply with the U.S.'s large-scale, subsidized industrial agriculture, making direct competition difficult for Indian farmers.
- India prohibits the import of GM food crops to protect its biodiversity and food chain.
- The demand for corn in India is rising due to the ethanol-blended petrol programme.
- U.S. agriculture is highly subsidized and dominated by large-scale industrial operations.
The Indian economy faces a conundrum where household spending, a primary driver of growth, needs a significant jump-start. While government infrastructure spending has been robust, other engines like private investment and net exports are flagging. Industrial capacity utilization remains below 80%, discouraging private sector expansion. Despite GST reforms and income tax reductions in Budget 2025, consumers are more likely to save than spend. The surplus of labor and a skill deficit keep wages low, limiting disposable income. To reach an 8% growth target, the economy requires more fiscal investment to overcome high inertia in consumption.
- The economy relies on four engines: household consumption, private investment, government expenditure, and net exports.
- Government capital expenditure growth is expected to slow down compared to the immediate post-pandemic years.
- GST reforms effective from September 22 aim to lower prices and encourage rural spending.
Prime Minister Narendra Modi has introduced the 'GST 2.0' regime, transitioning from a four-slab to a simplified two-slab tax system. Termed as 'bachat utsav' (festival of savings), the reform aims to reduce the tax burden on households, potentially saving them ₹2.5 lakh crore. The PM emphasized that this move, coupled with income tax exemptions up to ₹12 lakh for individuals, would benefit the middle and 'neo-middle' class. The reform is also intended to promote 'Aatmanirbharta' (self-reliance) by making domestic products cheaper and encouraging the MSME sector to regain its manufacturing excellence.
- The GST system has been simplified from a four-slab structure to a two-slab system to ease compliance.
- Many daily use goods previously taxed at 12% have been moved to the 5% slab.
- Income tax exemption has been provided for individuals earning up to ₹12 lakh per year.
The U.S. government has clarified that the recently announced $100,000 H-1B visa fee is a one-time payment applicable only to new applicants in the upcoming lottery cycle, rather than an annual fee. This clarification followed widespread panic among Indian tech workers and a surge in last-minute flight bookings. While the fee aims to encourage hiring local talent, it poses a significant challenge for Indian IT firms. Experts suggest India should reduce its reliance on U.S. jobs by bolstering domestic infrastructure and exploring new markets in Artificial Intelligence and emerging economies like China and Russia.
- The $100,000 fee applies only to fresh H-1B visa petitions starting with the next lottery cycle.
- Current visa holders and those applying for renewals are exempt from this specific fee hike.
- Indian nationals typically account for 71% of H-1B visas, making them the most impacted group.
Prime Minister Narendra Modi inaugurated and laid the foundation stones for multiple development projects worth over ₹34,200 crore in the maritime sector during the 'Samundar se Samridhi' event in Gujarat. Emphasizing the goal of 'Atmanirbhar Bharat' by 2047, the PM highlighted the need to reduce dependence on other countries. Key projects include the Mumbai International Cruise Terminal, new container terminals at Syama Prasad Mookerjee Port (Kolkata) and Paradip Port, and the Tuna Tekra Multi-Cargo Terminal. These initiatives aim to modernize India's port infrastructure, enhance global trade competitiveness, and ensure maritime security.
- The projects are part of the 'Samundar se Samridhi' initiative focused on transforming the maritime sector through 'Make in India'.
- Significant investments are being made in container berths, cargo handling facilities, and modern road connectivity at major ports.
- The Prime Minister emphasized that self-reliance in sectors like shipping and electronics is vital for national stability.
U.S. President Donald Trump has announced a significant increase in H-1B visa fees, raising them from the current $2,000-$5,000 range to a flat $100,000 per year. This move is expected to disproportionately affect Indian professionals, who account for 71% of H-1B petitions. Analysis shows that nearly 60% of Indian H-1B holders earn less than the proposed annual fee, making it financially unviable for many employers to sponsor them. The Indian government has expressed concern over the 'humanitarian consequences' and views the move as a pressure tactic ahead of crucial bilateral trade negotiations scheduled for late September.
- The fee hike targets the H-1B non-immigrant visa, which allows U.S. companies to employ foreign workers in specialty occupations.
- Indian nationals are the primary beneficiaries of this visa category, making India the most affected country globally.
- The new fee structure could cost up to $300,000 for a standard three-year visa period, exceeding the annual salary of many mid-level workers.
The European Commission has proposed its 19th sanctions package against Russia since the 2022 invasion of Ukraine. These sanctions aim to restrict Russia's access to advanced technologies, including AI and geospatial data, and critical resources for weapons production. Significantly, EU top diplomat Kaja Kallas suggested that Indian entities might be impacted by these measures. The package also targets Russia's "shadow fleet" of vessels used to bypass existing sanctions and proposes a total ban on Russian LNG imports by January 2027. This move occurs shortly after the EU announced plans to upgrade its strategic relationship with India.
- The new EU sanctions focus on squeezing Russia's access to AI, geospatial data, and critical industrial resources.
- The proposal includes a ban on transactions with certain banks in Russia and third parties, as well as sanctions on crypto platforms.
- The EU aims to sanction 118 additional vessels part of Russia's "shadow fleet" used for illicit trade.
Thousands of onion farmers in Maharashtra are protesting a sharp decline in market prices, which have fallen well below production costs. Farmers blame the government's Price Stabilisation Fund (PSF) policy, specifically the release of buffer stocks by NAFED and NCCF at lower rates, for further depressing market prices. They are demanding a stable export policy and a halt to buffer stock sales that disadvantage local producers. With production exceeding demand and quality deteriorating in storage, farmers are facing significant financial distress, leading to calls for immediate government intervention and a minimum support price of ₹1,500 per quintal.
- Onion prices in Maharashtra have dropped to ₹800–₹1,000 per quintal, while production costs are around ₹2,200–₹2,500.
- The Price Stabilisation Fund (PSF) is used to maintain a strategic buffer to regulate prices for consumers, often at the expense of farmers.
- NAFED and NCCF are the primary agencies responsible for procuring and releasing onion buffer stocks.
The Indian government has taken a significant step toward making the Goods and Services Tax Appellate Tribunal (GSTAT) functional by notifying the timelines for filing appeals. Taxpayers can now file appeals against orders communicated before April 1, 2026, until June 30, 2026. Additionally, the scope of cases for the Principal Bench has been expanded. This move is expected to resolve the massive backlog of GST-related litigation that has been pending for years due to the absence of a dedicated appellate body. Experts believe this structured framework will bring predictability and timely access to justice for businesses facing indirect tax disputes.
- The GSTAT is the second independent forum for dispute resolution under the GST law.
- The 56th GST Council meeting decided to make the GSTAT operational for accepting appeals by late 2024.
- The Principal Bench of the GSTAT will handle specific categories of cases, now with an expanded scope.
Recent analysis of the Household Consumption Expenditure Survey (2022-23) suggests that while extreme poverty in India has significantly declined, food deprivation remains a concern. Using the 'thali meal' as a metric, researchers found that a significant portion of the population cannot afford two balanced meals a day, even with PDS subsidies. The article proposes restructuring the Public Distribution System (PDS) by eliminating subsidies for well-off households and expanding them for the bottom 5% to 10% of the population. This targeted approach aims to ensure adequate protein intake through pulses and achieve a more equitable distribution of essential food items across all socio-economic fractiles.
- The World Bank reports that extreme poverty in India (living on less than $2.15/day) fell to 2.3% in 2024.
- Food deprivation is measured by the ability to afford a 'thali meal' consisting of carbohydrates, proteins, and vitamins.
- The current PDS is criticized for being 'unwieldy and ineffective' as it spreads resources too thinly across all income groups.