India's biotech industry has grown from 500 startups in 2018 to over 10,000 in 2025, supported by the BioE3 Policy. India aims for a $300-billion bioeconomy by 2030. While India is a global leader in generics and vaccines, the sector faces challenges like regulatory complexities, high capital requirements for Phase II clinical trials, and a 'brain drain' of talent. The article suggests a dedicated biotechnology fund, blended-finance structures, and streamlined regulations to help startups scale and compete globally in high-impact areas like precision medicine.
- The BioE3 Policy aims to transform India into a $300-billion bioeconomy powerhouse by 2030.
- India provides over 60% of global doses for essential immunizations like DPT and BCG.
- Scaling challenges include fragmented infrastructure and the high cost of clinical validation for startups.
China has filed a complaint against India at the World Trade Organization (WTO) over New Delhi's subsidies for electric vehicles (EVs) and batteries. This marks the first step in the dispute settlement process. China has also filed similar applications against Turkiye, Canada, and the EU. The move comes amid a widening trade deficit between the two nations, which reached $99.2 billion in 2024-25. While India's exports to China contracted by 14.5%, imports from China rose by over 11%, highlighting significant trade imbalances.
- China is challenging India's domestic subsidy regime for the green energy sector under WTO rules.
- The complaint follows similar Chinese actions against other major trading partners like the EU and Canada.
- India's trade deficit with China has reached nearly $100 billion, driven by rising imports.
India's goal of 500 GW renewable energy by 2030 and net-zero by 2070 depends on securing critical minerals like lithium, cobalt, and Rare Earth Elements (REEs). Currently, India relies heavily on imports, particularly from China. To achieve 'Atmanirbhar Bharat,' India must enhance domestic mining, improve recycling infrastructure (circular economy), and forge global partnerships. The government has launched the National Critical Mineral Mission and amended mining laws to attract private investment and streamline licensing, aiming to build a self-reliant supply chain for national security.
- Critical minerals are essential for EV batteries, solar panels, and wind turbines.
- India currently relies on imports for nearly 100% of its lithium, cobalt, and nickel requirements.
- The circular economy is vital, as India formally recycles only 10% of its four million metric tonnes of annual e-waste.
The 2024 Nobel Prize in Economic Sciences was awarded to Philippe Aghion, Peter Howitt, and Joel Mokyr for their research on how institutions and innovation drive economic progress. Their 'creative destruction' model suggests that long-term growth is generated by internal forces like innovation and research rather than external factors. The article notes that while this model thrives in liberal markets, it faces challenges from modern protectionism and the success of state-led economies like China. It serves as a warning that for democracies to thrive, they must protect institutional freedoms.
- The prize recognizes the 'creative destruction' model and endogenous growth theory.
- The research emphasizes that competition and private incentives are the primary engines of technological progress.
- The model highlights that long-term growth is generated by innovation, education, and research within an economy.
The global economic order is shifting from a normative consensus to great-power conflict, primarily between the US and China. This transformation involves 'digital colonialism' and the weaponization of supply chains. The article suggests that India and the Global South must collaborate to construct a new economic deal that ensures fair representation in international financial institutions. India needs to recalibrate its domestic policies, adopting a commanding role in critical sectors like energy, infrastructure, and digital ecosystems, while maintaining a non-aligned 'India way' that prioritizes national interests over partisan politics.
- Global markets are shifting from laissez-faire capitalism to state-mediated markets serving oligopolies.
- Digital colonialism is emerging through the control of value chains and the weaponization of data and supply lines.
- India must lead the Global South in pushing for a new debt-relief framework and fair-trade policies.
The 2025 Nobel Prize in Economic Sciences was awarded to Joel Mokyr, Philippe Aghion, and Peter Howitt. Mokyr was recognized for identifying the prerequisites for sustained growth through technological progress, emphasizing the role of 'useful knowledge.' Aghion and Howitt were honored for their 'theory of sustained growth through creative destruction,' which explains how new innovations replace older technologies, leading to economic gains but also the destruction of incumbents. Their research provides a mathematical model to determine optimal R&D investment and suggests that governments should subsidize R&D to ensure long-term societal benefits and overcome resistance from established interest groups.
- Joel Mokyr distinguished between propositional knowledge (natural world) and prescriptive knowledge (instructions/recipes).
- The theory of 'creative destruction' posits that innovation leads to growth but also displaces existing technologies and interests.
- The research suggests that R&D should be subsidized because private firms may not invest enough if they cannot capture all the value.
India's retail inflation dropped to a 99-month low of 1.54% in September 2025, falling below the RBI's comfort band of 2%-6%. This trend suggests that supply is outstripping demand, a situation similar to China's oversupply problem. The article argues that the RBI needs to improve its forecasting accuracy, as its predictions have seen drastic revisions within short periods. To stimulate the economy, there is a call for the Monetary Policy Committee (MPC) to consider significant interest rate cuts in December to boost private investment and consumption, as current household savings are being used to reduce debt rather than increase spending.
- Retail inflation reached a 99-month low of 1.54% in September 2025.
- The RBI's target inflation rate is 4%, with a tolerance band of 2%-6%.
- Low inflation indicates weak domestic demand, prompting calls for interest rate cuts by the MPC.
The 2025 Nobel Prize in Economic Sciences was awarded to Joel Mokyr, Philippe Aghion, and Peter Howitt for their research on innovation-driven economic growth. Mokyr's work focuses on historical factors and technological progress, while Aghion and Howitt developed the mathematical model of "creative destruction." This concept describes an endless process where new, better products and technologies replace old ones, driving long-term prosperity. The prize, worth $1.2 million, highlights that sustained growth is not guaranteed and requires specific institutional and technological prerequisites to counteract economic stagnation.
- The laureates explained how innovation and technological progress are the primary drivers of long-term economic growth.
- The 'creative destruction' model posits that growth arises from the continuous replacement of old technologies with new ones.
- Joel Mokyr’s research emphasizes the historical role of the 'culture of growth' and institutional frameworks in fostering innovation.
India and Canada have agreed to relaunch their trade dialogue and restore diplomatic ties following a meeting between External Affairs Minister S. Jaishankar and Canadian Foreign Minister Anita Anand. The discussions focused on restarting talks for a Comprehensive Economic Partnership Agreement (CEPA) and exploring cooperation in AI, energy, and food security. Both nations also began preliminary discussions on Small Modular Reactor (SMR) nuclear-powered reactors. This move signals a "repair mode" in bilateral relations, which had been strained since 2023 due to security issues and allegations regarding the killing of a Khalistani activist.
- India and Canada are re-establishing the India-Canada Ministerial Dialogue on Trade and Investment.
- Discussions included an invitation for Canadian PM to visit India for the AI Impact Summit in February 2026.
- Cooperation on Small Modular Reactor (SMR) technology marks a new area of civil nuclear energy partnership.
Indian Railways is undergoing a massive transformation to become a net-zero carbon emitter by 2030, four decades ahead of India's national target. Key initiatives include 100% electrification of broad-gauge tracks, the introduction of hydrogen-powered trains under the "Hydrogen for Heritage" initiative, and the use of solar and wind energy. The shift also involves moving freight from road to rail to increase the rail share to 45% by 2030. Financial mechanisms like sovereign green bonds and loans from the World Bank and IRFC are supporting this multi-billion dollar decarbonization plan.
- Indian Railways aims for net-zero emissions by 2030 through electrification and renewable energy integration.
- Over 98% of the broad-gauge network is already electrified, significantly reducing diesel dependence.
- The "Hydrogen for Heritage" initiative plans to deploy 35 hydrogen-powered train sets.
Economists C. Rangarajan and D.K. Srivastava analyze India's potential growth rate, suggesting it currently stays around 6.5%. While some argue for a 7.8% growth based on recent quarterly data, the authors emphasize the relationship between the Real Gross Fixed Capital Formation (GFCF) and the Incremental Capital-Output Ratio (ICOR). To achieve growth above 6.5%, India needs to increase the GFCF rate to approximately 34% of GDP and reduce the ICOR. The analysis highlights the importance of private sector investment and the impact of technological changes like AI on long-term growth prospects.
- India's potential growth rate is estimated at 6.5% based on historical GFCF and ICOR trends.
- The GFCF has remained stable at around 33.6% of GDP, but private investment needs to rise to push growth further.
- Public sector investment has been a major driver recently, but its momentum appears to be slowing down.
India's retail inflation, measured by the Consumer Price Index (CPI), dropped to 1.54% in September 2025, the lowest since June 2017. This decline is primarily attributed to falling food and fuel prices. The figure is currently below the Reserve Bank of India’s (RBI) lower comfort bound of 2%. While food inflation is expected to remain benign due to a good monsoon, risks persist from late monsoon withdrawals. Categories like clothing and footwear also saw a slowdown, whereas housing and intoxicants experienced a slight uptick in inflation rates.
- Retail inflation fell to 1.54% in September, driven by a contraction in food and beverage prices.
- The current inflation rate is below the RBI's mandated lower comfort limit of 2%.
- Food and beverages saw a contraction of 1.4% in September compared to 8.4% inflation a year ago.
India has seen a surge in women-focused cash transfer programs like Bihar’s Mukhyamantri Mahila Rojgar Yojana and Karnataka’s Gruha Lakshmi. While 89% of Indian women now own bank accounts—higher than the global average of 77%—true economic agency remains limited. Data shows that many women use their accounts primarily to withdraw cash for household needs rather than for savings, borrowing, or business operations. Barriers include a 19% gender gap in mobile phone ownership, lack of digital literacy, and social norms. For cash transfers to build agency, women need control over assets and access to credit beyond simple deposits.
- 89% of Indian women own bank accounts, significantly higher than the global average of 77%.
- The 'JAM trinity' (Jan Dhan, Aadhaar, Mobile) is the backbone of India's Direct Benefit Transfer (DBT) architecture.
- A significant gender gap exists in mobile phone ownership and digital financial literacy, hindering full financial inclusion.
Amidst global geopolitical volatility, the India-UK economic relationship is showing steady progress. UK Prime Minister Keir Starmer’s recent visit to India reinforced bilateral ties, focusing on defense, investment, and cultural exchange. Unlike the fraught negotiations with the US or EU, India and the UK have quietly advanced their trade deal signed in July. India is currently the world's fourth-largest economy, yet it accounts for less than 2% of the UK's total merchandise exports, indicating significant growth potential. Key developments include a £350 million missile supply deal and commitments by 64 Indian companies to invest £1.3 billion in the UK.
- India is the fourth-largest economy globally but has a low share in the UK's total merchandise exports.
- The UK accounts for approximately 3% of India's total exports, suggesting ample scope for trade expansion.
- A strategic £350 million missile deal highlights deepening defense cooperation between the two nations.
The Uttar Pradesh government has introduced the Export Promotion Policy 2025-30 to support exporters affected by the 50% U.S. tariffs on Indian goods. The policy focuses on key sectors like leather, textiles, and gems, which face significant competition from countries like Vietnam. It offers financial assistance, marketing development support, and logistics subsidies to help small businesses reach international markets. By strengthening the 'One District One Product' (ODOP) scheme and improving global connectivity through new airports, the state aims to build a resilient export base and achieve a $1 trillion economy.
- The policy provides a 30% reimbursement of inland freight costs to help landlocked exporters.
- Financial assistance is provided to MSMEs to meet international standards and participate in global trade fairs.
- The ODOP scheme has been a major driver, promoting unique products from all 75 districts of Uttar Pradesh.
India and the European Union (EU) are optimistic about concluding a Free Trade Agreement (FTA) by the end of 2024 following the 14th round of negotiations in Brussels. While bilateral trade reached €120 billion in 2024, challenges remain regarding tariffs, sustainability, and carbon regulations. India has specifically objected to the EU's Carbon Border Adjustment Mechanism (CBAM), a tax on carbon-intensive imports scheduled for full implementation in January 2026. Additionally, discussions touched upon the India-Middle East-Europe Economic Corridor (IMEC) and the Global Gateway Forum to enhance connectivity and investment.
- Negotiators are working to resolve sensitive issues in agriculture, dairy, pharma, and automobiles.
- India opposes the EU's CBAM, viewing it as a trade barrier that links climate action with trade.
- The India-Middle East-Europe Economic Corridor (IMEC) remains a strategic priority for both regions.
Despite political promises, unemployment remains a critical issue in Bihar. Analysis of the Periodic Labour Force Survey (PLFS) for 2023-2024 shows that Bihar ranks lowest among large states in Worker Population Ratio (WPR) and Labour Force Participation Ratio (LFPR). The state's unemployment rate stands at 5.2% (quarterly) and 3% (annual). A significant concern is the 'Discouraged Worker Effect,' where individuals stop looking for work due to poor job prospects, leading to deceptively low unemployment figures. Bihar also has a high proportion of casual laborers (23.8%) and very low female workforce participation (30.1%).
- Bihar has the lowest WPR and LFPR among nine large, low-income states in India.
- The state's female WPR is significantly lower than the national average and neighboring states like Jharkhand.
- A high percentage of the workforce (23.8%) is engaged as casual laborers, indicating a lack of formal job opportunities.
The Karnataka State Cabinet has approved the 'Karnataka Menstrual Leave Policy-2025,' which grants one day of paid leave per month to women employees. This landmark decision makes Karnataka the first state in India to cover both the government and private sectors under such a policy. While Bihar and Odisha provide menstrual leave for government employees, and Kerala has implemented it in universities, Karnataka's policy is the most inclusive to date. The move is aimed at supporting women's health and promoting a more gender-sensitive work environment across the state.
- The policy provides one day of paid leave every month for menstruating employees.
- It is applicable to all women working in government offices and private companies in Karnataka.
- The decision follows recommendations to improve workplace participation and health outcomes for women.
India and the United Kingdom have finalized a £350-million defense agreement for the Indian Army to procure missiles. Additionally, both nations signed an Implementing Arrangement for a £250-million project to develop electric-powered engines for Naval ships. Prime Minister Narendra Modi and UK PM Keir Starmer described the partnership as a vital pillar of global stability. The deal is accompanied by significant economic commitments, with 64 Indian firms, including TVS Motor and Cyient, pledging to invest £1.3 billion in the UK, potentially creating 7,000 jobs. Furthermore, UK universities Lancaster and Surrey received approval to establish campuses in India.
- The deal establishes a broader complex weapons partnership between India and the UK.
- Collaboration on electric-powered engines for Naval ships marks a new milestone in maritime defense technology.
- Indian private sector investment in the UK is expanding across engineering, semiconductors, and e-mobility sectors.
As the global economy enters a period of uncertainty due to trade fluctuations and tariffs, the article emphasizes the need for Indian private capital to invest domestically. Despite record profits, private investment has not kept pace, with many firms looking toward foreign markets. The author argues that relying on external demand is risky and that the focus should shift to stimulating domestic demand and enhancing internal productivity. Furthermore, India's gross expenditure on R&D remains low at 0.64% of GDP, mostly funded by the government. A shift toward private sector-led innovation is crucial for long-term economic resilience.
- Private capital expenditure in India has remained sluggish despite high corporate profits and government incentives like PLI schemes.
- India's R&D spending is significantly lower than global peers (e.g., China at 2.1% of GDP), with the private sector contributing very little.
- The current global environment of 'de-globalisation' makes it imperative for Indian capital to unlock domestic wealth for local growth.
The World Bank has upgraded India's GDP growth outlook for the financial year 2025-26 to 6.5%, up from its previous estimate of 6.3%. This upgrade is attributed to resilient domestic conditions, strong private consumption, and the positive impact of GST reforms. However, the forecast for 2026-27 has been slightly lowered to 6.3% due to potential headwinds from U.S. tariffs on Indian exports. Despite global uncertainties, India is expected to remain the world's fastest-growing major economy. The report also noted that rural wage growth and agricultural output have performed better than expected.
- India's real GDP growth reached 7.8% in the April-June 2025 quarter, exceeding initial expectations.
- The World Bank credits GST reforms, including simplified compliance and reduced tax brackets, for supporting economic activity.
- Potential U.S. tariffs (up to 50%) on three-quarters of India's goods exports are a significant risk factor for future growth.
The Reserve Bank of India (RBI) is taking a measured approach to the rollout of its Central Bank Digital Currency (CBDC). Deputy Governor Rabi Sankar stated that the RBI is in no hurry for a full-scale retail launch and is waiting to see how other countries implement their digital currencies. The most immediate and appropriate use case for CBDC is identified as cross-border payments, which could significantly reduce costs and time. Additionally, the National Payments Corporation of India (NPCI) has unveiled biometric authentication for UPI payments, aiming to replace PINs with more secure and user-friendly fingerprint or face recognition.
- The RBI views cross-border payments as the primary use case for CBDC to enhance efficiency in international transactions.
- India is waiting for global standards and simultaneous launches by other nations before a full retail CBDC rollout.
- NPCI has introduced biometric authentication (fingerprint/face) for UPI to improve security and ease of use for senior citizens.
Recent changes in U.S. immigration policies, including a proposed $100,000 visa fee for new H-1B workers, are creating hurdles for international STEM talent, particularly from India. Data shows that while the U.S. IT sector has grown significantly, the growth of home-grown STEM talent has not kept pace with demand. Non-residents earn a disproportionately high number of STEM Master’s and Doctoral degrees in the U.S. As the U.S. tightens its borders, countries like China, the U.K., and Germany are actively vying for this talent. This shift could potentially lead to a 'brain drain' from the U.S., impacting its long-term technological edge.
- The U.S. relies heavily on foreign-born talent, with non-residents earning 55% of STEM Master’s degrees in 2020-21.
- Proposed high visa fees and restrictive policies may push skilled Indian professionals to look for opportunities in other countries.
- Computer and mathematical occupations in the U.S. grew by 40% between 2016 and 2024, far outstripping domestic talent supply.
India holds approximately 25,000 tonnes of gold in private hands, valued at $2.4 trillion, yet remains a major importer, contributing significantly to the trade deficit. The article advocates for a revitalized, trust-based gold monetisation scheme to unlock this 'under-the-pillow' wealth. By creating a transparent ecosystem with hallmarking centers and digital gold accounts, the government can mobilize domestic capital for infrastructure and innovation. This shift would reduce reliance on volatile foreign investment and external debt. Transforming gold from a passive asset into a productive economic tool is seen as essential for India's journey toward 'Atmanirbharta' (self-reliance).
- Indian households hold nearly $2.4 trillion worth of gold, which is larger than the total credit extended by Indian banks.
- Gold imports account for roughly 8% of India's total import bill, creating a persistent trade deficit.
- A successful gold monetisation scheme requires infrastructure for trusted valuation, seamless logistics, and tax-free incentives for depositors.