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Saturday, May 16, 2026 12:22 PM

India Economy

Government Raises Gold, Silver Import Duty to 15% to Control Imports and Support Rupee

In a significant policy move, the Indian government has increased import duties on gold and silver to 15% from the earlier 6%, aiming to reduce precious metal imports and ease pressure on the country’s foreign exchange reserves. The decision comes amid growing concerns over India’s rising trade deficit and weakening rupee, as heavy bullion imports have added strain to external finances. Analysts believe the higher tariffs could discourage fresh demand in one of the world’s largest gold-consuming markets. The announcement follows Prime Minister Narendra Modi’s recent appeal urging citizens to postpone non-essential gold purchases for a year in the national interest. He had cited global economic uncertainty and tensions in the Middle East as reasons to conserve foreign exchange reserves. According to trade estimates, India’s gold imports have surged sharply in recent years, with increasing shipments from the UAE. Policy experts have also called for a review of tariff concessions under the India-UAE trade agreement, which they say contributed to higher imports. Union Minister Ashwini Vaishnaw also supported the move, stressing the need to reduce import-driven spending as geopolitical instability continues to impact global markets and energy routes through the Strait of Hormuz. The tariff hike has triggered mixed reactions. While some see it as a necessary step to protect the rupee and improve the trade balance, others fear it may encourage smuggling, disrupt wedding-season buying, and increase costs for consumers. Source: TOI  

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PM Modi Revives Covid-Era Work Culture Habits, Urges Indians to Prefer WFH and Virtual Meetings Amid Global Uncertainty

Prime Minister Narendra Modi has urged citizens to adopt certain work and travel habits that were common during the Covid-19 pandemic, including work-from-home arrangements, virtual meetings, and online conferences, as India prepares for possible economic pressure caused by rising global tensions in West Asia. Addressing a gathering in Secunderabad after launching development projects worth around ₹9,400 crore in Telangana, PM Modi said the country must focus on reducing unnecessary fuel consumption and lowering dependence on imported energy resources. Highlighting the importance of energy conservation, the Prime Minister advised offices and organisations to once again encourage remote working wherever possible. He said online meetings and digital conferences can help cut daily commuting, lower petrol and diesel usage, and ease pressure on fuel demand, especially in major cities. Unlike the pandemic years, Modi clarified that the appeal is not linked to any health emergency, but rather to economic preparedness during a period of international instability impacting fuel prices, supply chains, and global markets. He also encouraged citizens to make greater use of public transport such as metro rail services, and suggested carpooling when private vehicles are necessary. Beyond workplace habits, PM Modi called on people to limit non-essential foreign travel, postpone overseas vacations and destination weddings for the next year, and reduce unnecessary gold purchases to help conserve foreign exchange reserves. The Prime Minister said responsible consumption is essential at a time when the world is facing challenges related to energy security. He added that India is continuing to invest in alternative energy solutions such as solar power, ethanol blending, CNG mobility systems, and piped gas networks. During the same visit, Modi inaugurated and laid the foundation stone for multiple infrastructure projects in Telangana, including highways, railways, petroleum facilities, industrial developments, and the PM MITRA textile park in Warangal.

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Median CEO Pay in India Rises to ₹10.5 Crore in FY26, Growth Slows Amid Market Volatility

The median compensation for professional, non-promoter CEOs in India increased by 5% year-on-year to ₹10.5 crore in FY 2025–26, according to a report by Deloitte. However, this marks the slowest pace of growth since the COVID-19 period, reflecting changing compensation structures and broader economic uncertainties. The report highlights a shift in executive pay design, with greater emphasis on incentives, stock-linked compensation, and emerging leadership roles such as Chief Digital Officers. Experts note that subdued equity market performance over the past 12–18 months and rising geopolitical risks have contributed to more cautious salary increments. Among top executives, Chief Financial Officers (CFOs) saw the highest rise in compensation. This trend is driven by increased demand for financial expertise, a strong focus on capital efficiency, and direct accountability to shareholders. Notably, around 15% of companies in the NIFTY 50 witnessed changes in CFO positions, indicating significant churn and high demand for experienced talent. The study also points to a transformation in remuneration strategies. Companies are moving away from a uniform approach and adopting multiple long-term incentive plans tailored to different employee groups. While larger firms, especially those in the NIFTY50, are implementing complex multi-year Performance Share Plans, smaller organisations continue to rely on traditional stock options or ESOPs. Additionally, firms are increasingly linking executive rewards to internal performance metrics rather than stock price movements alone, aiming for sustainable value creation. Strengthened governance practices, clearer executive contracts, and improved transparency in compensation decisions are further shaping the evolving CXO pay landscape. The findings are based on the seventh edition of the Deloitte India Executive Performance and Rewards Survey, released in September 2025, which covered insights from over 350 organisations across the country. Source: PTI

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India Needs Unified Policy Push to Build USD 100 Billion Creative Economy by 2030: CII

India must adopt a cohesive, well-coordinated policy framework to transform its creative sector into a USD 100 billion economic powerhouse by 2030, according to the CII’s India’s M&E Sector Report, unveiled at the 12th CII Big Picture Summit 2025 in Mumbai. The report projects that such a unified policy push could significantly boost the Media & Entertainment (M&E) industry’s GDP contribution while creating over five million new jobs. While the global M&E industry is expected to touch USD 3.5 trillion by 2029 with a 3.7% CAGR, India’s sector is poised for much stronger expansion at 9.8% CAGR, nearly 2.6 times the global rate. However, India still accounts for only 2% of the global media market, and its creative economy contributes merely 1% to the country’s GDP. To unlock full growth potential, the report calls for structural reforms, beginning with unified, modern regulation to replace the current fragmented, medium-specific laws that lead to inconsistent standards and compliance complexity. Such harmonisation, CII says, would support innovation, strengthen IP protection, and help India lead in fast-rising segments like gaming, streaming, and digital media. The report identifies infrastructure gaps as a major barrier to growth. Limited film studios, production facilities, and advanced tech infrastructure have led to capital flight and lost employment opportunities. CII recommends greater investment in top-tier production hubs, widespread 5G rollout, and technology integration to improve content creation and accessibility across India. Entrepreneurship challenges also need attention. The report advocates for a single-window digital clearance system, stronger anti-piracy enforcement, and simplified processes to improve business ease and attract global investments. Despite India’s rising global visibility in storytelling, the country’s media exports remain relatively low. CII suggests establishing dedicated export funds and streamlined export mechanisms to help Indian creators scale internationally and boost cultural impact. Talent shortages—particularly in animation, VFX, and digital media—pose another significant obstacle. The report recommends internationally aligned training standards and deeper collaboration between industry and academia to build a future-ready workforce. It concludes that a comprehensive National Media & Entertainment Policy, modeled on the National AVGC-XR Policy, could offer much-needed clarity and direction to navigate the industry’s rapid technological transformation. Source: ANI

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Foreign Investment in India’s I&B Sector Slows Sharply in June Quarter Despite Strong Overall FDI Momentum

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Foreign direct investment (FDI) inflows into India’s Information and Broadcasting (I&B) sector recorded a significant slowdown during the April–June 2025 quarter, even as the country’s broader FDI landscape remained steady. According to the latest data from the Department for Promotion of Industry and Internal Trade (DPIIT), cumulative FDI in the I&B sector stood at ₹76,143.29 crore by the end of June 2025 — up marginally from ₹75,590.84 crore in March 2025 and ₹74,369.17 crore in December 2024. This translates to just ₹552.45 crore in fresh FDI inflows during the first quarter of FY26, marking a steep 54.8% drop compared to ₹1,221.67 crore in the previous quarter. The figures, compiled from April 2000 onwards, indicate that investor sentiment in the I&B industry has cooled off after a relatively strong start to the year. While cyclical adjustments may partly explain the decline, analysts point out that the sector’s overall contribution to India’s total FDI remains small. High-growth areas such as Telecommunications, Automobiles, and Computer Software & Hardware continue to dominate, collectively accounting for over 25% of cumulative inflows. In contrast, the entire I&B segment—including print, broadcasting, and online media—makes up less than 1% of total FDI received since 2000. Despite the slowdown in the media sector, India’s overall FDI performance continues to demonstrate resilience. Cumulative inflows between April 2000 and June 2025 have surpassed ₹92 lakh crore. During the April–June 2025 quarter alone, total FDI (including equity, reinvested earnings, and other capital) amounted to ₹2,22,120 crore, with equity inflows contributing ₹1,59,428 crore. Experts suggest the current dip in I&B investments reflects a mix of regulatory uncertainties, industry consolidation, and fewer big-ticket deals. However, growing interest in digital media, OTT platforms, and sports broadcasting could spur renewed investor confidence later in the year—particularly as policymakers revisit FDI rules to align with the rapidly evolving digital ecosystem. With India’s media and entertainment sector undergoing rapid digital transformation, stakeholders are optimistic that upcoming reforms could help unlock new opportunities and make the I&B landscape more attractive to global investors. Source: Economic Times

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FM Nirmala Sitharaman Launches Nationwide Drive to Return ₹1.84 Lakh Crore in Unclaimed Assets

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Finance Minister Nirmala Sitharaman on Saturday unveiled a major national campaign aimed at returning nearly ₹1.84 lakh crore worth of unclaimed financial assets to their rightful owners. These funds are currently lying idle across banks, the Reserve Bank of India (RBI), insurance companies, mutual funds, provident fund accounts, and other financial institutions. The three-month-long initiative focuses on creating public awareness and simplifying the process for individuals and families to reclaim their lost or forgotten assets. “These unclaimed amounts are not the government’s property — they belong to citizens,” Sitharaman emphasized, noting that people have long demanded action to recover such funds from entities like the RBI or the Investor Education and Protection Fund (IEPF). Explaining the reasons behind unclaimed assets, she said they often result from missing documents, untracked policies, or lack of awareness, describing the situation as “a ripe fruit hanging within reach but not yet claimed by those it belongs to.” The campaign is structured around three core pillars — Awareness, Access, and Action. Awareness: Educating citizens about the existence of unclaimed money. Access: Enabling easier tracking through the RBI’s UDGAM portal. Action: Ensuring officials follow up on even the smallest clues to help people reclaim their assets. Reassuring the public, the Finance Minister said the funds remain safe and are merely held in custody by the government and financial institutions, not owned by them. “Whether with banks, SEBI, or any other body, the money is securely maintained,” she said. Unclaimed deposits are transferred to the RBI, while unclaimed shares and securities are moved to the IEPF. The government aims to use this drive to reconnect individuals with their financial assets and enhance public trust in the country’s financial ecosystem. Source: TNN

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India’s Economy Holds Steady Despite Global Trade Pressures: SBI Capital Report

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India’s economy continues to demonstrate robust resilience amid global trade headwinds and fiscal strains, supported by strong domestic demand and government expenditure, according to a new report by SBI Capital Markets. The study highlighted that while protectionist tariff policies — particularly from the United States — have become a major global challenge, India managed to remain relatively shielded in the first quarter, achieving an impressive GDP growth of 7.8%. The report pointed to ongoing structural reforms as a key factor driving momentum. A streamlined Goods and Services Tax (GST) framework is expected to inject around ₹50,000 crore into the economy, further boosting consumption. However, Indian exporters are increasingly under strain due to retaliatory tariffs from trade partners, with some duties reaching 50%. Notably, a 25% levy linked to Russian crude purchases has heightened cost pressures and disrupted trade flows. On the currency front, despite a softer U.S. dollar, the Indian rupee depreciated nearly 5% year-on-year, hitting record lows. The Reserve Bank of India has limited its interventions, opting instead to allow the weaker currency to support exports while conserving forex reserves. Externally, while capital inflows remain tepid, the current account deficit is viewed as manageable despite sluggish merchandise exports. The analysis also contrasted India’s fiscal situation with that of advanced economies. Rising debt burdens in countries such as the U.S. and U.K. are steepening bond yield curves, while in India, higher state government borrowing continues to exert pressure on long-term yields. Adding to the global backdrop, weaker U.S. employment data has heightened expectations of an imminent Federal Reserve rate cut in its upcoming policy review, the report noted. Source: IANS Photo Credit: iStock  

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GST Council Unveils New 5% and 18% Tax Slabs, Effective September 22

In a landmark move, the GST Council in its 56th meeting, chaired by Finance Minister Nirmala Sitharaman, approved a simplified tax structure by removing the 12% and 28% slabs. The new framework will now feature two primary slabs of 5% and 18%, along with a special 40% bracket for luxury and sin goods. The revised rates will come into force from September 22. The marathon meeting, which lasted over 10 hours, saw the Centre and states reaching a consensus on rationalisation. West Bengal Finance Minister Chandrima Bhattacharya pegged the estimated revenue loss from this restructuring at ₹47,700 crore, while Uttar Pradesh Finance Minister Suresh Khanna noted that the final tax incidence on demerit goods could still see further review. Speaking to the press, Sitharaman highlighted that the reforms prioritise the middle class and common man. Daily-use products such as hair oil, soaps, shampoos, toothbrushes, toothpaste, bicycles, kitchenware, and tableware will now attract a 5% rate. Items reduced from 5% to nil tax include UHT milk, paneer, chena, and all varieties of Indian breads. Several food and FMCG items like namkeen, sauces, pasta, noodles, chocolates, coffee, butter, ghee, preserved meat, cornflakes have been brought down to 5%. Goods earlier taxed at 28%—including air conditioners, larger television sets, dishwashers, small cars, and motorcycles up to 350 cc—will now fall under the 18% bracket. The highest GST category of 40% will be applicable to products like cigarettes, gutka, chewing tobacco, bidis, zarda, paan masala, and certain sugary or caffeinated beverages including carbonated drinks and fruit-based fizzy beverages. Prime Minister Narendra Modi welcomed the move, calling it a step towards ease of living. He said the decision, made jointly by the Centre and states, will significantly benefit farmers, MSMEs, the middle class, women, and youth. During my Independence Day Speech, I had spoken about our intention to bring the Next-Generation reforms in GST. The Union Government had prepared a detailed proposal for broad-based GST rate rationalisation and process reforms, aimed at ease of living for the common man and… — Narendra Modi (@narendramodi) September 3, 2025 Hon’ble Prime Minister Shri @narendramodi announced the Next-Generation GST Reforms in his Independence Day address from the ramparts of Red Fort. Working on the same principle, the GST Council has approved significant reforms today. These reforms have a multi-sectoral and… pic.twitter.com/NzvvVScKCF — Nirmala Sitharaman Office (@nsitharamanoffc) September 3, 2025 Source: India TV Photo Credit: PTI

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India Posts 7.8% Growth in April–June, Services and Manufacturing Fuel Expansion

India’s economy surged 7.8% in the April–June quarter of FY 2025-26, outpacing expectations and reinforcing its status as the fastest-growing major economy worldwide. Robust demand, thriving services, and steady manufacturing are driving the momentum, placing the nation firmly on track to achieve a projected $7.3 trillion GDP by 2030 and secure its spot as the third-largest global economy. Broad-based growth across sectors India’s real GDP for Q1 FY26 stood at ₹47.89 lakh crore, up from ₹44.42 lakh crore last year, marking a significant improvement from the 6.5% growth recorded in the same period of 2024-25. On the supply side, agriculture grew 3.7% on the back of strong monsoons, manufacturing expanded 7.7%, construction advanced 7.6%, while services surged 9.3%. Gross Value Added (GVA) rose 7.6%, underscoring a widespread economic rebound. Economic Affairs Secretary Anuradha Thakur highlighted that growth is anchored in “strong fundamentals and resilient domestic demand,” citing steady gains across all key sectors. Services remain the star performer The services sector continued to shine with 9.3% growth, buoyed by trade, transport, hotels, communication, real estate, financial services, and public administration. Private consumption rose 7%, aided by higher employment, easing inflation, and healthier rural demand, while government spending grew nearly 10% in nominal terms. Industrial revival and GST milestone  Industrial activity strengthened, with the Index of Industrial Production rising 3.5% in July, compared to 1.5% in June. Manufacturing led the uptick, particularly in metals, electrical equipment, and mineral products. Meanwhile, GST marked its eighth anniversary in July 2025, with over 1.52 crore active registrations. States such as Uttar Pradesh, Maharashtra, Gujarat, Tamil Nadu, and Karnataka accounted for almost half of total registrations. Women entrepreneurs are becoming increasingly significant, making up 20% of taxpayers, with 14% of firms entirely women-owned. Upcoming GST reforms in October aim to lower essential taxes, simplify compliance for MSMEs, and boost transparency. Investment and foreign inflows Government-led infrastructure spending continues to support growth, with capital outlay reaching ₹10.52 trillion in FY25. Private investment has picked up pace, backed by improved business sentiment and capacity expansion. India attracted $81 billion in foreign inflows in FY25, pushing cumulative FDI since 2000 past $1 trillion. Equity inflows grew 27% year-on-year, while forex reserves remained robust at $695.5 billion in July, briefly crossing the $700 billion mark in June. Inflation relief and jobs boost  Inflation dropped sharply to 1.55% in July 2025, the lowest since 2017, with food inflation turning negative. RBI Governor Sanjay Malhotra credited healthy harvests and adequate supplies for the moderation, noting stable inflation should further spur demand. The labour market also showed resilience, with unemployment falling to 5.2% in July. Rural unemployment was 4.8%, compared with 6.8% in urban areas. Youth unemployment declined to 10.2%, below the global average. Female labour force participation has doubled over the past six years to 41.7%, signalling a structural shift. Reforms and outlook Government programs such as the Production Linked Incentive (PLI) scheme, Digital India, Bharat 6G Vision, PM Viksit Bharat Rozgar Yojana, and GatiShakti are fuelling manufacturing, digitalisation, and employment. Initiatives in financial inclusion, skilling, and logistics are also strengthening India’s growth base. Global agencies remain optimistic—IMF and UN project over 6% growth in the coming years, while S&P recently upgraded India’s sovereign rating for the first time in 18 years. Looking ahead, India’s economy is poised to cross the $5 trillion threshold by 2027, and $7.3 trillion by 2030. Policymakers will, however, need to balance growth with stability while ensuring inclusive benefits across regions and demographics. Source: DD News 

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India Set to Become World’s 3rd Largest Economy by 2028: Morgan Stanley

India is on course to become the third-largest economy in the world by 2028 and is expected to more than double its GDP to $10.6 trillion by 2035, according to a new report by Morgan Stanley released on Wednesday. The report highlights that several Indian states — notably Maharashtra, Tamil Nadu, Gujarat, Uttar Pradesh, and Karnataka — could individually near the $1 trillion GDP mark, placing them among the globe’s top 20 economies by the next decade. “Currently, Maharashtra, Gujarat, and Telangana lead the economic race among states,” the report noted, adding that states like Chhattisgarh, Uttar Pradesh, and Madhya Pradesh have climbed significantly in economic rankings over the past five years. India to Drive Global Growth Morgan Stanley projects that India will account for roughly 20% of global economic growth over the next ten years. As a result, the country is positioned to become a major growth engine for global corporations and investors. The report underscores the pivotal role of India’s federal structure — with 28 states and eight Union Territories — in propelling economic progress. It points out that each state manages its fiscal policies independently and competes to attract business and investment through favourable industrial policies and ease-of-doing-business reforms. “Every investment decision, factory setup, or enterprise ultimately lands in a particular state,” the report explains. Competitive Federalism as a Growth Catalyst The study places strong emphasis on “competitive federalism” — a model in which states innovate and vie with one another for economic advancement. This approach, Morgan Stanley argues, will be critical for India to become a global manufacturing powerhouse, significantly raise per capita income, and maintain a robust capital market performance over the coming years. As India moves toward its projected $10.6 trillion economic size, the role of states will become even more vital. Their ability to legislate independently and shape business environments allows them to create conducive ecosystems for growth. Infrastructure Boom Underway The report also points to a decade of strong infrastructure development. Central government capital expenditure has surged, growing from 1.6% of GDP in FY15 to 3.2% in FY25. This investment has led to a 60% increase in national highway length, a doubling of airports, and a fourfold expansion of metro rail systems. National-level programs such as PM Gati Shakti, the National Infrastructure Pipeline, Bharatmala, Sagarmala, and UDAN have all complemented state-led initiatives in infrastructure, energy, water, and urban development. For India to realize its long-term economic aspirations, the report concludes, continuous collaboration between the central and state governments will be essential. Source: IANS

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