India's economy has shown remarkable resilience, registering a robust 7.8% Gross Domestic Product (GDP) growth in the first quarter (April-June) of the current fiscal year. Prime Minister Narendra Modi announced this impressive figure at the Semicon India 2025 conference, highlighting that India has "outperformed every expectation" despite global economic challenges and "economic self-interest" from other nations, a veiled reference to US tariffs. This growth is reportedly visible across manufacturing, services, agriculture, and construction sectors, propelling India towards becoming the world's third-largest economy.
In a significant move to boost economic transparency and ease of doing business, Finance Minister Nirmala Sitharaman revealed upcoming "next-generation" Goods and Services Tax (GST) reforms. These reforms, set to be discussed at the crucial GST Council meeting on September 3rd and 4th, aim to simplify the tax slab structure, potentially reducing the main slabs to three: 5%, 18%, and 40%. The goal is to lower compliance burdens for small businesses and potentially introduce tax cuts on various consumer goods and daily essentials.
The banking sector is also under the spotlight, with President Droupadi Murmu emphasizing its "pivotal role" in India's growth story. Speaking at the 120th foundation day celebrations of City Union Bank, she urged banks to expand credit, particularly for infrastructure and Micro, Small, and Medium Enterprises (MSMEs), and to enhance financial literacy and agri-tech support. The Finance Minister also noted a significant improvement in the asset quality of scheduled commercial banks.
On the trade front, Commerce Minister Piyush Goyal is scheduled to meet with exporters to devise strategies to boost India's outbound shipments. This meeting is critical given the 50% tariff imposed by the US on Indian goods. Discussions are expected to cover short, medium, and long-term action plans, including easing norms for Special Economic Zone (SEZ) units and promoting e-commerce exports to help businesses cope with the steep duties.
Furthermore, the Prime Minister reiterated India's growing ambitions in the semiconductor industry, emphasizing the nation's innovation capacity and youthful talent pool as key drivers of global confidence in building the semiconductor future with India.
In market news, the Indian benchmark equity indices, Nifty 50 and Sensex, closed lower on Tuesday, with foreign portfolio investors being net sellers for the seventh consecutive session.