Recent 6 months news in Economy

The Central Government has notified amendments to the India-Mauritius Double Taxation Avoidance Agreement (DTAA) to prevent treaty abuse and tax avoidance. The amended treaty, whose protocol was signed in 2024, introduces the Principal Purpose Test (PPT) and came into force on August 10, 2026.

Following the amendment, Mauritius-based investors and investment funds claiming treaty benefits may face increased scrutiny regarding the commercial substance and purpose of their transactions.

The central government has announced that Karnataka, Maharashtra, Uttar Pradesh, Gujarat, and Tamil Nadu will become permanent members of a new Standing Committee under the Goods and Services Tax (GST) framework.

The committee, comprising 12 states, aims to strengthen tax administration and expand the taxpayer base. India currently has 1.7 crore registered GST taxpayers.

The Research, Development and Innovation Fund (RDIF), a flagship initiative of the central government, has announced its first cohort of 19 Second Level Fund Managers (SLFMs).

The cohort comprises 14 Alternative Investment Funds (AIFs) and 5 Focused Research Organisations (FROs), approved by the Empowered Group of Secretaries (EGoS). These approved institutions have secured a combined RDIF funding commitment of ₹7,131 crore under the government RDI Scheme.

According to the “Trade and Development Report 2026: The Geoeconomics of Development” released by the United Nations Conference on Trade and Development (UNCTAD), the economy of India is projected to grow by 7.3%.

The report projected global economic growth at 2.6% (down from 2.9% in 2025) and growth in developing economies at 4% (down from 4.7% in 2025). Additionally, Asia is expected to contribute 59% of global growth in 2026.

According to a report by Business Monitor International (BMI), a unit of Fitch Solutions Company, the GDP growth forecast of India for FY27 has been raised to 7.5% from 6.8%.

However, the forecast for FY28 is lowered to 6.3% from 6.5% due to concerns over household consumption and external economic risks.

The 57th meeting of the Goods and Services Tax (GST) Council was held in New Delhi under the chairpersonship of Union Minister Nirmala Sitharaman.

During the meeting, the council made recommendations relating to process reforms, primarily covering registration, returns, refunds, and adjudication. The council also issued clarifications regarding the applicability of GST on the supply of certain goods and services, alongside measures for trade facilitation and streamlining compliances.

According to the International Monetary Fund (IMF), India’s growth forecast for FY27 has been raised to 7% from the earlier 6.4%. The IMF also revised its growth forecast for FY28 upward to 7% from 6.7%.

According to a report by the World Bank (WB), the GDP growth of India for FY27 is revised upwards to 7.1% from the earlier projection of 6.6%.

Additionally, the WB projects the GDP growth of India at 7.2% for FY28 and 7% for FY29.

The Department of Commerce (DOC) under the Ministry of Commerce and Industry (MoC&I) has extended the Remission of Duties and Taxes on Exported Products (RoDTEP) scheme until December 31, 2026.

The Ministry of Textiles (MoT) has also extended the Rebate of State and Central Taxes and Levies (RoSCTL) scheme until December 31, 2026. These extensions are intended to mitigate the impact of geopolitical disruptions in West Asia.

According to a report by the Ministry of Finance (MoF), the real Gross Domestic Product (GDP) of India for Q2 FY27 is projected to grow by 7.3%.

The MoF also highlighted a positive export outlook, with total exports reaching $400 billion during the first five months of FY27.

The Union Cabinet has approved a commitment of ₹10,000 crore for the establishment of the SME Growth Fund (SGF). Under this framework, the centre will provide the amount to an Alternative Investment Fund (AIF) to support Small and Medium Enterprises (SMEs).

The initiative aims to provide growth-oriented capital for SMEs in manufacturing, services, technology, and innovation-driven sectors. It is designed to enable the emergence of “champion Indian enterprises” across strategic value chains.

The Ministry of Finance has reduced the windfall tax on the export of diesel and Aviation Turbine Fuel (ATF) effective from October 1, 2026.

The export duty on diesel was lowered to ₹16 per litre from ₹20, and the levy on ATF was reduced to ₹10.5 per litre from ₹15. The government has maintained the export duty on petrol at ₹0.5 per litre for the upcoming fortnight.

The Department of Economic Affairs under the Ministry of Finance (MoF) has maintained the interest rates for all Small Savings Schemes (SSS) for the third quarter (Q2) of the FY27. This marks the 14th consecutive quarter without a revision since the last adjustment in December 2024.

The interest rates for Sukanya Samriddhi Yojana (SSY) and Senior Citizen Savings Scheme (SCSS) are fixed at 8.2%. The rates for National Savings Certificate (NSC), Kisan Vikas Patra (KVP), and Public Provident Fund (PPF) are 7.7%, 7.5%, and 7.1% respectively.

It is to be noted that the MoF has performed quarterly reviews of SSS interest rates since 2016 based on the methodology of the Shyamala Gopinath Committee (2023). Under this framework, SSS rates are kept 25 to 100 basis points (bps) higher than the government bond yields.

According to the monthly bulletin of the RBI, the net Foreign Direct Investment (FDI) into India reached a five-year high of $7.35 billion in July 2026. This is the highest recorded inflow since May 2021 when it stood at $8.80 billion.

The net FDI in July 2026 represents a 64% increase compared to the same period in the previous year. The cumulative net FDI for the period from April to July 2026 reached $13.4 billion.

According to the “Asian Development Outlook (ADO) September 2026: Navigating Prolonged Energy Shocks and El Nino” report released by the Asian Development Bank (ADB), the Gross Domestic Product (GDP) growth of India for FY27 is raised to 7% (an increase of 40 basis points from the earlier estimate of 6.6%).

The report also projected the inflation rate of India for FY27 at 5%.

According to the “Global Economic Outlook - September 2026” report released by Fitch Ratings, the GDP growth forecast of India for the FY27 has been raised by 50 bps to 6.9% from the earlier projection of 6.4%.

The rating agency also projected that the headline inflation of India will increase to 5.5% by December 2026.

The Cabinet Committee on Economic Affairs has approved the increase in Minimum Support Prices (MSP) for all mandated Rabi crops for the Marketing Season 2027-28 to ensure remunerative prices for growers.

The highest absolute increase in MSP was announced for Safflower at ₹675 per quintal, followed by Rapeseed and Mustard at ₹413 per quintal. The increase for other Rabi crops includes ₹390 per quintal for Lentil, ₹136 per quintal for Barley, ₹83 per quintal for Gram, and ₹25 per quintal for Wheat.

Union Minister Shivraj Singh Chouhan has approved procurement worth ₹5,547.99 crore at the Minimum Support Price (MSP) under the Price Support Scheme (PSS) for the Kharif Marketing Season 2026-27 across Uttar Pradesh, Karnataka, and Telangana.

Uttar Pradesh received the largest share of the approved procurement at ₹3,992.57 crore. Procurement worth ₹1,107 crore was approved for pulse and oilseed farmers in Karnataka, while Telangana received ₹448.42 crore.

According to the “OECD Economic Outlook, Interim Report September 2026: Weathering Successive Shocks” released by the Organisation for Economic Cooperation and Development (OECD), the Gross Domestic Product (GDP) growth of India for FY27 is revised upwards by 80 basis points (bps) to 7.1% from the earlier 6.3%.

The growth for FY28 is projected at 6.5%. The report also estimated the inflation of India for FY27 and FY28 at 4.7% and 4.2% respectively.

According to the report “Economic Outlook Asia-Pacific Q4 2026: Exports, Domestic Demand Will Shore Up Growth” released by S&P Global Ratings, the GDP growth of India for FY27 is revised upwards to 7% from 6.6%.

The growth for FY28, FY29, and FY30 is projected at 7.2%, 7%, and 6.8% respectively.