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India has moved to  cut fuel taxes sharply  in a bid to shield its refining sector and consumers from the impact of surging crude prices caused by the ongoing Middle East conflict. Government Steps In to Cushion Oil Price Surge The government reduced fuel levies significantly: Gasoline tax cut to 3 rupees/litre (from 13 rupees) Diesel tax cut to zero (from 10 rupees) The move comes as global oil prices have surged, with India’s crude basket rising to  around US$123 per barrel , up from  US$85 in March 2024 . Refiners Protected, Pump Prices Unchanged Bharat Petroleum Corp Ltd  and other state-owned refiners — which control about  90% of fuel retailing in India  — are expected to  maintain current pump prices . This suggests the tax cuts are designed primarily to: Protect refining margins Prevent sudden  price hikes for consumers Maintain  economic stability ahead of inflation risks Oil Shock Forces Policy Response India, the  world’s...

Simple Summary Rupee posts its biggest gain in over three years Indian stocks jump the most since 2021 US slashes tariffs on Indian goods to 18% Deal removes a major overhang on Indian markets What Happened Indian markets roared higher after US President  Donald Trump  announced a sharp  tariff cut on Indian goods to 18% , down from 25%, while also  scrapping an additional 25% levy  tied to India’s purchases of Russian crude. Market Reaction Nifty 50 Index:   +5% intraday  (biggest jump since 2021) Indian rupee:   +1.2% to 90.46/USD , its strongest move in more than three years The deal delivered  much-needed relief  to the rupee, which had been  Asia’s worst-performing currency in January . Why It Matters India sends a  large share of exports to the US Tariffs had weighed on  equities, currency and foreign inflows The agreement  lifts a key source of uncertainty  for investors “The deal finally provides some rel...

Investor & Industry Impact Note India is preparing its most meaningful auto-market liberalisation in decades as part of a near-final  EU–India free trade agreement (FTA) . A sharp cut in car import tariffs will reshape competitive dynamics across  luxury, mass-market and EV segments , with clear winners and losers emerging. What’s Changing (Policy Snapshot) Import tariffs on EU-made cars cut to 40%  from as high as 110% Gradual reduction toward 10% over time Initial quota:  ~200,000 internal-combustion cars per year EVs excluded for first five years , then phased into similar cuts Deal announcement expected  imminently , subject to final ratification This is India’s biggest auto market opening to date. WINNERS European Automakers (Primary Beneficiaries) Volkswagen Mercedes-Benz BMW Renault Stellantis Why they win Ability to  import premium and niche models at far lower prices Can  test demand before committing capex  to local manufacturing Str...

India and the United States are close to finalizing a  trade agreement  that could  slash tariffs on Indian exports to 15%–16% , down from the current average of about  50% , according to a report by the  Mint  newspaper citing three sources familiar with the talks. As part of the potential deal,  New Delhi may agree to gradually curb imports of Russian oil  while allowing  greater US exports of non-genetically modified corn and soymeal  into India. The announcement could come during a possible  meeting between US President Donald Trump and Indian Prime Minister Narendra Modi  at the upcoming  ASEAN Summit in Malaysia , the report said. The move is seen as a major step toward easing trade tensions between the two countries and aligning India more closely with the US amid shifting global supply chains.

India’s industrial production contracted in August for the first time in nearly two years, signaling a slowdown in the country’s rapid economic growth. The index of industrial production declined by 0.1% year-on-year, following a 4.7% growth in July, according to the Ministry of Statistics . Economists had predicted a 1% increase . This decline aligns with other indicators pointing to a moderation in India’s growth . Purchasing managers’ surveys for September showed a slowdown in both the services and manufacturing sectors , while output in eight core industries —including steel, coal, and cement—also contracted by 1.8% in August compared to a year earlier. After India’s economy expanded by over 8% in the fiscal year ending in March 2024, economists are now downgrading their forecasts for the current fiscal year’s GDP growth , with the median estimate at 6.9% . Some banks, like Goldman Sachs , predict growth as low as 6.5% , while the Reserve Bank of India remains more optimis...

  India plans to shift its fiscal policy framework from targeting a specific fiscal deficit to focusing on the ratio of government debt-to-gross domestic product (GDP) after the fiscal year 2025-26, according to TV Somanathan, Finance Secretary of the Ministry of Finance. Key Points for Investors and Policy Makers: Policy Shift: Current Target: Historically, India has aimed for a fiscal deficit of 3% of GDP but has struggled to meet this goal. New Focus: Post-2026, the government will prioritize the debt-to-GDP ratio as the primary fiscal policy anchor. Rationale for Change: Economic Resilience: Somanathan highlighted that India can sustain a fiscal deficit above 3% due to its high nominal growth rates, which help maintain fiscal sustainability. Rating Concerns: Rating agencies have flagged India’s high debt-to-GDP ratio as a significant factor affecting its sovereign rating. Fiscal Targets: Current Targets: The federal government aims to reduce the fiscal deficit to 4.9% of G...