Economic policies, market trends, and financial developments
European Union's top commissioners for trade and agriculture are arriving in Delhi this week with a 30-member negotiating team to accelerate discussions on the India-EU Free Trade Agreement. This visit follows a recent phone call between Prime Minister Narendra Modi and EU leaders Ursula von der Leyen and Antonio Costa, where they emphasized an early conclusion to the deal. The talks have gained momentum due to the ongoing US tariff war, prompting India to seek concessions similar to those the EU recently offered the US on climate-related trade measures.
The 56th GST Council meeting has introduced significant rate reductions on inputs in key sectors like textiles and fertilizers, easing the inverted duty structure where input taxes exceed output taxes. However, persistent wide gaps between these rates continue to raise concerns among industries, primarily due to delays in input tax credit refunds and resulting working capital blockages, prompting calls for faster processing mechanisms.
Prime Minister Narendra Modi has introduced sweeping GST reforms aimed at stimulating domestic consumption and economic resilience amid escalating global trade tensions and looming U.S. tariffs. The changes involve streamlining the tax structure, providing immediate relief to consumers and MSMEs, and potentially repositioning India’s growth trajectory.