India's Economy and Policy - Newspaper Summary

 The sources provide a comprehensive snapshot of India's economy and policy as of October 2025, situating its strong domestic performance against a volatile global economic and technological backdrop.

India's Economic Health and Policy Stance

India's economy is generally depicted as resilient and growing, though vulnerable to external shocks.

Macroeconomic Performance and Outlook:

• India is highlighted as the fastest-growing major economy in the world. Economic performance surpassed expectations in FY26, with GDP growing 7.8% in the first quarter, fueled by resilient domestic demand and strong investment momentum.
• The overall economic outlook is optimistic, supported by healthy domestic demand, low inflation, robust household consumption, and favorable private investment.
• India secured the second rank in the Mint’s Emerging Markets Tracker, trailing only China, driven by strong import cover and improved stock market performance.

Policy and Regulatory Environment:

• Inflation Targeting (FIT): India's Flexible Inflation Targeting (FIT) framework (4% target, with a +/- 2% tolerance band) has proven resilient since 2016, with average inflation falling sharply to 4.8%, the steepest decline among Asian peers adopting FIT. The RBI projects inflation for FY26 to be subdued, lowering its forecast to 2.6%.
• GST Reforms: The recent overhaul of the Goods and Services Tax (GST 2.0), which reduced tax slabs from four to two (retaining 5% for essential goods and 18% standard), is expected to bolster domestic demand and ease CPI inflation by an estimated 65-75 basis points by FY26-27.
• Tax Administration and Technology: The National Democratic Alliance (NDA) government is engaged in rewriting the Income-Tax Act (1961) to reduce ambiguity and litigation. However, there is caution regarding new technologies; the Bombay High Court quashed an I-T order after noting the assessor had blindly relied on non-existent, AI-generated case laws, warning quasi-judicial authorities against unverified use of AI.
• Telecom Policy: The Supreme Court provided a significant boost to Vodafone Idea by allowing the government to reassess its demand for Adjusted Gross Revenue (AGR) dues as a policy matter, which the telecom operator viewed as an impetus to the Digital India vision.
• Digital Governance: India is moving towards digitizing key public services, such as the digital revamp of the Central Government Health Scheme (CGHS) using the eShushrut Pharmacy Module to improve drug delivery and ensure end-to-end accountability for its 4.7 million beneficiaries.

Financial Sector and Technology Landscape in India

India's financial markets are seeing strong activity, particularly in technology and capital deployment, accompanied by stringent regulatory efforts to combat fraud.

Capital Markets and Start-ups:

• India’s IPO market is booming, ranking as the world’s third-largest market for IPO fundraising in the first nine months of 2025, raising $10.5 billion.
• Major IPOs are planned by Fractal Analytics (an AI unicorn seeking a $3 billion valuation) and Lenskart (targeting an $8 billion valuation).
• The gaming ban hitting Dream11’s core business prompted the company to seek a stock broking license to leverage its large user base.
• The markets regulator (SEBI) is proposing offering special incentives, such as higher coupon rates or discounted prices, to specific investor groups (senior citizens, women, etc.) to boost retail participation in corporate bonds.
• Fintech and Digital Finance: Fintech is integral to India’s economic engagement. India’s institutional ecosystem (RBI, NPCI, FIU) is positioned to lead the responsible adoption of stablecoins, viewing them as a complement to traditional banking infrastructure that could accelerate tokenized credit and financial assets, particularly useful for global remittance channels.
• Digital Security and Fraud: Bank frauds surged 194% in value to ₹36,014 crore in FY25. In response, the RBI has mandated dynamic two-factor authentication for transactions starting April 1, 2026. Banks are aggressively deploying defenses, including AI monitoring of suspicious transactions, behavioral biometrics (analyzing typing rhythm/mouse movement), and in-app security features like disabling screenshots and implementing Aadhaar biometrics for verification.

India in the Global Economic and Tech Landscape

India’s economy is deeply intertwined with global flows of trade, capital, and technology, facing challenges from geopolitical rivalries and technological disruptions.

Geopolitics and Trade:

• US-China Rivalry: While the US and China recently reached an agreement to postpone new tariffs, keeping hopes of a trade deal alive, the situation remains uncertain due to rapid escalations and de-escalations. China's slowing growth and sustained deflation pose a risk to global markets, as it might dump cheaper goods into other economies, potentially hurting India's competitiveness.
• Rare Earth Minerals: China holds near dominance in the critical minerals market (70% of mining, 90% of processing) and leverages this politically. The US and other nations are seeking to diversify supply chains, but breaking China's grip is difficult due to its cost advantage and restriction on technology transfer. India, lacking sufficient domestic supply, sees this restriction on technology as a major stumbling block to boosting its own manufacturing efforts.
• Russian Sanctions and Energy Trade: Despite Western sanctions aimed at crippling Russia’s fossil fuel revenue, India and China continue to purchase large quantities of Russian oil. Indian Oil Corporation (IOC) confirmed it would abide by the latest US sanctions on Russian suppliers (Rosneft and Lukoil), which supply a significant portion of India's crude imports, likely forcing Indian refiners to seek costlier West Asian alternatives. India is also purchasing discounted Russian steel, leading Russia to become the fourth-largest source of finished steel imports for the country.

Technology Adoption and Competition:

• AI Disruption: The "spectre of AI" is forcing India’s large IT firms (TCS and Tech Mahindra) to rethink strategies. These companies are leveraging synergies within their massive conglomerate groups (Tata and Mahindra) to grow their business pipelines amid uncertainties like tariffs and AI. Meanwhile, Bessemer Venture Partners is heavily focusing its investment thesis on AI startups that aim to disrupt the incumbent Indian IT services sector.
• Global Hiring Caution: Globally, large American companies like JPMorgan, Walmart, and Airbnb are adopting an "ultra-lean model of staffing," betting that they can sustain growth and increase profitability without adding employees, largely due to anticipated productivity gains from AI and automation.
• Quantum Supremacy Race: The contest for quantum technology leadership is accelerating globally. While the US currently leads, China is rapidly narrowing the gap due to massive government funding ($15.3 billion pledged by Beijing compared to $1.9 billion by the US).
• Infrastructure Investment: Elon Musk’s satellite internet company, Starlink, took a major step toward establishing Indian operations by leasing its first office in Mumbai, planning to set up nine gateway earth stations across the country, potentially transforming connectivity. India is also promoting manufacturing self-reliance through the Electronics Components Manufacturing Scheme (ECMS), approving projects for components like PCBs and camera modules.
• Global Tech Competition: Qualcomm is challenging Nvidia in the lucrative AI data center market with new chips (AI200 and AI250), diversifying beyond its reliance on the smartphone market.