Economic Policy - Newspaper Summary

 Based on the attached sources, here is a detailed summary of the economic policy news:

The economic policy news covers a broad range of sectors, including fiscal management, international trade, manufacturing incentives, digital infrastructure, and regulatory enforcement.

I. Macroeconomic and Fiscal Policy

• Inflation Outlook: India's retail inflation is projected to have cooled significantly to 1.5% in September from 2.1% in August, according to a poll of 19 economists. This expected moderation is attributed to a favorable base effect due to the spike in food prices the previous year and the recent easing of food prices, specifically vegetables and pulses.
• GST Impact: The partial impact of Goods and Services Tax (GST) rate cuts implemented in the latter part of September is also cited as a factor contributing to the decline in inflation.
• GST Overhaul: The GST Council is reportedly planning an overhaul to simplify tax credit claims and refunds by eliminating data mismatches and curbing unnecessary tax notices.
• House Price Index: The All-India House Price Index (HPI), which uses transaction-level data from 18 major cities, saw an annual increase of 3.6% in the first quarter of the current fiscal year (Q1).

II. International Trade and Tariff Policy

• US Pharma Tariffs (Generics Exclusion): The Trump administration announced it is not planning to impose tariffs on generic drugs from foreign countries, easing concerns among Indian exporters. The proposed 100% tariff is aimed at "branded or patented" pharmaceuticals, excluding generics. This stance is a major scaling-back of the Commerce Department’s pharmaceutical tariff investigation. India supplies nearly half of the U.S. generic drugs.
• Textile Tariffs (Tiruppur Crisis): Following U.S. President Donald Trump slapping additional tariffs of up to 50% on Indian textile imports (reportedly due to India buying Russian oil), exports from Tiruppur (India’s knitwear capital) have become uncompetitive. Manufacturers are renegotiating contracts and offering large discounts to US buyers. Exporters are appealing to the Finance Minister for sops, including extending the non-performing asset classification period from 90 to 180 days and implementing a two-year moratorium on term loans.
• Seafood Exports to US: India’s seafood industry received a boost with the US National Marine Fisheries Service (NMFS) confirming that India’s exports meet American mammal protection standards, allowing continued shipments. This approval comes even though rival exporters like China, Mexico, and Ecuador were denied certification. However, high existing tariffs on Indian seafood exports remain a key challenge.
• Medical Device Exports Support: The Department of Pharmaceuticals (DoP) is working on a plan to help domestic medical device makers overcome stiff US tariffs and regulations. Proposed solutions include targeted subsidies for small and medium enterprises (SMEs), mutual recognition agreements with the US Food and Drug Administration (FDA) for easier product acceptance, and establishing a dedicated export facilitation desk. This initiative aims to increase export value to the US by 25% within three years and reverse the growing trade deficit.
• India-UK Trade Goals: Prime Minister Narendra Modi set a target to double bilateral trade with the UK to $112 billion by 2030, accelerated by the recently signed India-UK Free Trade Agreement (FTA). Modi highlighted opportunities in telecom, AI, biotech, critical minerals, and defense co-design/co-production.

III. Infrastructure, Industry, and Regional Development

• Gujarat Economic Master Plan: Chief Minister Bhupendra Patel unveiled a ‘Regional Economic Master Plan’ for Gujarat’s five key economic regions. The plan aims to grow Gujarat’s economy from $280 billion (FY 2023) to over $3.5 trillion to realize the vision of Viksit Bharat @2047. Focus areas include Advanced Manufacturing (EVs, semiconductors), the Blue Economy (shipbuilding, maritime tourism), and expanding the service sector.
• Semiconductor Investment in Gujarat: Union Minister Ashwini Vaishnaw stated that Gujarat has attracted ₹1.25 lakh crore in investment in the semiconductor sector, with four major plants established and 30 Japanese companies planning component manufacturing.
• Electronic Component Manufacturing Scheme (ECMS): The ECMS, notified in April, has garnered proposed investments of $13 billion from 249 applicants, indicating a strong push for local electronics manufacturing. VVDN Technologies is seeking subsidies under ECMS to invest over $100 million in manufacturing bare Printed Circuit Boards (PCBs) and displays, with long-term goals of backward integration to include capacitors and resistors.
• Solar Value Chain Localization: Avaada Electro plans to manufacture the entire solar component value chain—from polysilicon to modules—domestically by FY28, supporting India’s self-reliance push. Furthermore, the Ministry of New and Renewable Energy proposed mandating the use of locally manufactured solar wafers starting June 2028.
• Capital Expenditure Trends: Central government capital expenditure rose 43% to ₹4.3 trillion in the first five months of 2025-26. However, the value of new private capital expenditure announced dropped 46% to ₹5.2 trillion in Q2.
• Railway Infrastructure: The government approved four multi-tracking projects worth ₹24,634 crore to add nearly 894 km to the railway network across four states.

IV. Digital, Finance, and Regulatory Policy

• AI Mission and Compute Capacity: Prime Minister Narendra Modi stated that India is building high-performance computing capacity under its AI mission to ensure that every innovator and startup has easy, low-cost access to new technologies. He stressed that India supports a global framework for ethical AI, based on principles of equitable access, population scale, and responsible deployment.
• Telecom Spectrum Pricing: The telecom secretary confirmed that no provider has raised concerns about high spectrum reserve prices, suggesting that low data tariffs indicate pricing is acceptable. However, internal Department of Telecommunications (DoT) analysis shows that only 15.5% of auctioned spectrum since 2010 was sold at a premium, implying low effective competition. The Telecom Regulatory Authority of India (Trai) is examining the next auction's contours, including the possibility of opening auctions to more service providers.
• Recovery of Bankruptcy Assets: The Union government and the Insolvency and Bankruptcy Board of India (IBBI) are working to scrutinize and recover assets involved in shady pre-bankruptcy transactions (preferential, undervalued, fraudulent) committed by previous management. As of FY25 end, recovery stood at only ₹7,900 crore out of the ₹3.85 trillion sought.
• MUDRA Funding: The Micro Units Development and Refinance Agency (MUDRA) plans to raise up to ₹5,000 crore through its first-ever bond sale to diversify its funding base.

V. Health and Governance Policy

• Drug Safety Audit: The Central Drugs Standard Control Organisation initiated a pan-India drive to inspect, test, and audit cough syrup manufacturers following recent child deaths linked to contaminated products.
• Wellness Standardization: The Bureau of Indian Standards (BIS) is finalizing standards for mud baths and other naturopathy treatments (including hydrotherapy, yoga, and diet therapy) to ensure safety, consistency, and scientific credibility for these traditional therapies.
• Environmental Fines (Draft Bill): A draft Environment Laws (Amendment) Bill proposes stiff minimum penalties, including a fine of ₹5 crore and seven years imprisonment, for causing substantial environmental damage, with higher penalties (up to ₹20 crore or life term) for severe violations.
• Anti-Pollution Cess (Delhi): The Supreme Court approved, in principle, imposing an anti-pollution cess on commercial vehicles entering Delhi, with rates set at ₹700 for light commercial vehicles (LCVs) and ₹1,300 for trucks.

VI. Corporate Governance and Investing Philosophy

• Corporate Governance Debate: A discussion piece argues that corporate governance must extend beyond mere regulatory compliance. Regulations provide a basic framework but cannot define behavior, integrity, or foresight. It suggests that clinging to minimal compliance reflects a "bureaucratic mindset" and risks anchoring companies to the low end of the governance curve.
• Value Investing in the AI Era: The rise of AI, which instantly summarizes corporate information, has ended the "old information edge" in value investing. However, the core advantage remains in independent, careful thinking and interpreting information better than others, rather than relying solely on the speed of AI-generated summaries.