Economy

Prime Minister Narendra Modi is set to preside over the forthcoming Governing Council meeting of NITI Aayog on May 24, signaling renewed momentum for India’s top policy think tank. The annual gathering, which brings together chief ministers, Union ministers, and lieutenant governors, is a crucial platform for intergovernmental coordination and strategic policy formulation. While the agenda is still being finalized, the meeting is expected to address pressing national priorities, including economic growth, federal cooperation, and development planning.

India's Commerce and Industry Minister Piyush Goyal has indicated openness to extending the compliance timeline for a sweeping Quality Control Order (QCO) concerning electrical appliances, following significant concerns raised by domestic manufacturers. The industry has welcomed the quality mandate but seeks a phased implementation due to the challenges of certification, testing infrastructure, and complex global supply chains.

The Goods and Services Tax Network (GSTN) has deferred the planned locking of Table 3.2 in Form GSTR-3B, a move that would have restricted the ability of taxpayers to edit pre-filled data on inter-state supplies to unregistered persons and composition dealers. Originally scheduled to take effect from the April 2025 tax cycle, the change has been delayed following strong feedback from businesses. This decision offers critical relief for sectors heavily reliant on business-to-consumer (B2C) transactions.

India’s foreign exchange reserves witnessed a sharp rise of USD 4.553 billion, reaching USD 690.617 billion for the week ended May 9, 2025, according to data released by the Reserve Bank of India (RBI). The growth was largely driven by a significant jump in the country’s gold reserves, which increased by USD 4.518 billion. This recovery follows a dip in the previous week and reinforces India’s robust external position, even as minor declines were observed in other components such as Special Drawing Rights (SDRs) and the IMF reserve position.

The Indian rupee modestly appreciated by 1 paisa to settle at 85.53 against the U.S. dollar on Friday, buoyed by strong foreign institutional investor (FII) inflows and a slight dip in the dollar index. However, gains were tempered by rising Brent crude prices, widening trade deficit figures, and sluggish domestic equity markets. The trade deficit reached a five-month high in April due to surging imports, though export growth remained resilient.

India’s economic outlook for 2025 has been slightly downgraded to 6.3%, according to a mid-year update from the United Nations. While this marks a decline from the previous estimate of 6.6% and a significant slowdown from the 7.1% growth recorded in 2024, India continues to rank among the fastest-growing large economies. Robust domestic consumption, government-led investment, and resilient services exports are expected to cushion the impact of weakening global trade dynamics and geopolitical uncertainty.

For the first time, India’s unemployment rate has been measured on a monthly basis, revealing a rate of 5.1% in April 2025, according to fresh data from the Ministry of Statistics & Programme Implementation. The new monthly Periodic Labour Force Survey (PLFS) aims to provide more timely insights into joblessness across the country. The survey highlights notable disparities across gender, age groups, and urban-rural divides, with youth unemployment and urban joblessness remaining significantly high.

India’s merchandise exports recorded a notable increase of 9.03% year-on-year in April 2025, reaching USD 38.49 billion, according to recent government data. Despite this robust export performance, the trade deficit widened to USD 26.42 billion, driven largely by a 19.12% surge in imports to USD 64.91 billion during the month. Commerce Secretary Sunil Barthwal expressed optimism about sustaining export momentum, underscoring India’s resilience in global trade.

India’s passenger vehicle dealership industry is poised for a 7–9% growth in fiscal 2026, underpinned by favorable macroeconomic conditions such as reduced interest rates, revised tax slabs, and subdued inflation. According to a report by Crisil Ratings, both urban and rural demand are expected to contribute meaningfully, with SUVs leading the charge in cities and small cars gaining ground in rural areas. The industry is also likely to benefit from rising ancillary revenues and improved operating margins, even as inventory levels remain elevated.

In a decisive move to reinvigorate industrial development and restore investor confidence, the Andhra Pradesh government has approved 19 major investment proposals totaling over Rs. 33,000 crore during the sixth State Investment Promotion Board (SIPB) meeting. Spanning key sectors such as energy, electronics, information technology, tourism, and textiles, the projects are expected to generate more than 34,000 jobs. Chief Minister N.