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August 13, 2025 India Boosts Semiconductor Manufacturing, Enacts Key Legislative Reforms, and Strengthens International Ties

In a significant push for self-reliance and economic growth, the Union Cabinet has approved substantial investments in semiconductor manufacturing. Parliament has enacted crucial legislative changes, including a new Income Tax Bill and amendments to the Insolvency and Bankruptcy Code. Economically, India maintains a positive outlook with controlled inflation and a stable repo rate. On the international front, India's diplomatic engagements have seen improved relations with China, enhanced strategic partnerships with Uzbekistan, and ongoing disarmament dialogues with Australia. These developments underscore India's focus on domestic industrial growth, policy modernization, and strategic global positioning.

Major Economic and Industrial Initiatives

The Union Cabinet has given its approval for an outlay of ₹4,600 crore for four new semiconductor manufacturing projects. These facilities will be established in Odisha, Punjab, and Andhra Pradesh, significantly bolstering India's domestic chip production capabilities under the India Semiconductor Mission (ISM).,,, This move aims to enhance India's electronics manufacturing value addition from 20% to over 30% in the coming years.

India's annual defence production reached a record ₹1.51 lakh crore in Fiscal Year 2024-25, marking an 18% growth over the previous year and a 90% increase since FY 2019-20., Defence exports also touched a record high of ₹23,622 crore in FY25, indicating a strong push for indigenisation and self-reliance in the defence sector.,

The Union Health Ministry launched the SHRESTH – State Health Regulatory Excellence Index, a national framework designed to benchmark and strengthen state drug regulatory systems through transparent, data-driven evaluation.

Under the Pradhan Mantri Ujjwala Yojana (PMUY), the Union Cabinet approved a subsidy of ₹300 per 14.2 kg cylinder for up to nine refills per year for beneficiaries, with an expenditure of ₹12,000 crore for FY 2025-26.

Key Legislative Developments

Parliament passed a new Income Tax Bill, 2025, on August 12, 2025, which will replace the six-decade-old Income Tax Act, 1961, and come into force from April 1, 2026., The new bill aims to simplify the complex income tax laws without imposing any new tax rates.

The government also introduced the Insolvency and Bankruptcy Code (Amendment) Bill, 2025, in the Lok Sabha., This bill proposes significant procedural, definitional, and structural reforms to the IBC, 2016, with objectives to reduce delays, maximize value for stakeholders, and improve governance.

Two significant bills for the sports sector, the National Sports Governance Bill and the National Anti-Doping Bill, were passed by Parliament on August 12, 2025, aiming to improve sports infrastructure and facilities in the country.,,

Economic Outlook and Monetary Policy

Deloitte projects India's GDP growth to be between 6.4% and 6.7% in Fiscal Year 2025-26, driven by resilient capital markets, a dynamic consumer base, and a globally competitive workforce., The Reserve Bank of India's (RBI) Monetary Policy Committee (MPC) decided to keep the repo rate unchanged at 5.5% during its August 2025 meeting. India's Consumer Price Index (CPI) inflation reached a 77-month low of 2.1% year-on-year in June 2025. Ratings firm Crisil forecasts India's headline inflation to average 3.5% in FY26.

S&P Global Ratings stated that the US tariffs imposed on Indian imports would not significantly impact India's economic growth or its positive sovereign ratings outlook, as India's economy is not heavily trade-dependent.

International Relations and Engagements

China has eased restrictions on urea exports to India, with a potential supply of up to 300,000 tons, signaling an improvement in diplomatic relations between the two countries amidst US trade challenges. India has also lifted restrictions on tourist visas for Chinese citizens.

The 7th round of India-Australia dialogue on Disarmament, Non-Proliferation, and Export Control was held in New Delhi on August 12, 2025, fostering mutual understanding and contributing to their Comprehensive Strategic Partnership.

Prime Minister Narendra Modi held a telephone conversation with Uzbek President Shavkat Mirziyoyev on August 12, 2025, to deepen the strategic partnership between India and Uzbekistan. Discussions focused on expanding cooperation in trade, connectivity, healthcare, technology, and cultural exchanges.

India is hosting the 18th International Olympiad on Astronomy and Astrophysics (IOAA) in Mumbai in 2025, welcoming over 300 young astronomers from 64 countries., This event aims to promote scientific thinking and foster international cooperation in space sciences.

Other Notable Developments

Rajasthan has initiated India's first drone-based artificial rain trial at Ramgarh Dam, marking a shift from traditional aeroplane-assisted cloud seeding.

The Bibi Fatima Women's Self-Help Group (SHG) from Karnataka won the prestigious UNDP Equator Prize 2025 for their work in biodiversity conservation and sustainable farming.,

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