Economy

The Reserve Bank of India released the minutes of its Monetary Policy Committee meeting held between September 19 and October 1, 2025, where the panel unanimously decided to keep the repo rate unchanged at 5.5% for the second straight time, emphasizing caution due to global trade uncertainties like US tariffs, while lowering inflation forecasts and raising GDP growth estimates to support India's economic stability.

China has recently tightened export controls on rare earth technologies and materials, adding more elements to its restricted list amid rising tensions with the US over tariffs. This move has disrupted global supply chains for key technologies like electric vehicles and wind turbines, prompting India to plan a national stockpile of rare earth elements to protect its growing needs in clean energy and manufacturing sectors.

The Centre is pushing for the Reserve Bank of India (RBI) to oversee two key state-owned institutions—the Employees' Provident Fund Organisation (EPFO) and the Post Office Savings Bank (POSB)—following a Rs 96 crore fraud in POSB and growing concerns over the management of massive social security funds. This move aims to strengthen regulatory controls and improve governance in these critical entities handling trillions in public savings.

The International Monetary Fund (IMF) has issued a caution in its latest World Economic Outlook update, drawing similarities between the current boom in Artificial Intelligence (AI) investments and the dot-com bubble of the late 1990s, warning that unmet expectations could lead to sharp market corrections. This comes as global tech giants like Google announce massive AI investments, including a $15 billion commitment to build an AI data centre in India's Andhra Pradesh, underscoring the rapid influx of capital into AI and its potential implications for economic stability worldwide, including in emerging markets like India.

China has ramped up its crude oil stockpiling, adding nearly 160 million barrels worth over $10 billion to its reserves in the first nine months of 2025, driven by low global prices and expanding storage capacity. This move, amid ongoing US-China trade tensions and risks of tighter sanctions on key suppliers like Russia and Iran, highlights Beijing's focus on energy security, influencing global oil markets by absorbing excess supply and keeping prices stable.

The Employees' Provident Fund Organisation (EPFO) has introduced significant reforms to make partial withdrawals easier for its over 30 crore members, as approved in the 238th meeting of the Central Board of Trustees on October 13, 2025. These changes merge complex rules into three simple categories, allow up to 100% withdrawal of eligible balance while requiring a 25% minimum contribution balance, and reduce minimum service periods, aiming to enhance financial flexibility without compromising long-term retirement security.

US President Donald Trump recently moderated his threats of imposing 100% tariffs on Chinese goods after a sharp drop in American stock markets, while China firmly stated it would not back down and would fight to protect its interests. This development, following China's new controls on rare earth exports, exposes the limits of using tariffs to fix trade imbalances and provides important hints for India, which is dealing with US tariffs up to 50% on its goods and additional penalties for importing Russian oil, pushing New Delhi toward reforms and stronger ties with Asian economies.

The Royal Swedish Academy of Sciences has awarded the 2025 Nobel Prize in Economic Sciences to Joel Mokyr, Philippe Aghion, and Peter Howitt for their pioneering research that explains how innovation and the process of creative destruction have transformed economic stagnation into sustained growth over the past two centuries. Announced on October 13, 2025, this recognition highlights the shift from historical economic flatlines to ongoing progress, offering insights into managing technological changes amid global challenges like AI advancements and trade barriers, which are crucial for countries like India aiming for self-reliant development.

India's ethanol blending program, aimed at reducing oil imports and supporting farmers, has seen a major shift where grains like maize and rice now contribute more to ethanol production than sugarcane-based sources. This transition, highlighted in recent data for the 2024-25 supply year, is driven by favorable pricing policies and poor sugarcane harvests due to droughts, raising concerns about sustainability, food security, and the sugar industry's future amid the push for 20% blending by 2025-26.

China has announced the addition of five more rare earth elements—holmium, erbium, thulium, europium, and ytterbium—to its export control list, effective from November 8, 2025. This move tightens Beijing's grip on the global supply of these critical materials ahead of upcoming talks between US President Donald Trump and Chinese President Xi Jinping, escalating trade tensions and highlighting concerns over national security and high-tech dependencies.

The Centre has announced the identification of 100 Aspirational Agriculture Districts across 29 states and Union Territories under the Prime Minister Dhan-Dhaanya Krishi Yojana (PMDDKY), with Uttar Pradesh leading the list with 12 districts. This move, approved by the Union Cabinet with an annual outlay of ₹24,000 crore, aims to boost agricultural productivity, promote sustainable practices, and achieve self-reliance in underperforming agricultural regions through the convergence of 36 existing schemes.

Union Home Minister Amit Shah, while inaugurating the expansion of Sabar Dairy in Gujarat on October 3, 2025, highlighted that India's dairy sector has grown by 70% over the past 11 years, making it the fastest-growing in the world. This announcement underscores the sector's role in boosting rural incomes and national GDP, amid ongoing initiatives like White Revolution 2.0 and recent GST reductions on dairy products to further accelerate growth.