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Small business confidence dips amid trade worries

Small business confidence dips amid trade worries

Small business confidence is taking a hit as concerns surrounding international trade escalate. The dip in the ASSOCHAM–Dun & Bradstreet Small Business Confidence Index (SBCI) for the April–June 2025 quarter reflects this growing anxiety. Many SMEs are worried about the potential ramifications of global trade uncertainty, including tariffs, trade wars, and disruptions to supply chains. These factors are casting a shadow over the business outlook for many firms.
Specifically, businesses that are heavily reliant on exports or imports are feeling the pressure most acutely. Increased costs associated with tariffs and logistical challenges are squeezing profit margins. Some businesses are contemplating diversifying their supply chains or exploring alternative markets to mitigate the risks. However, these adjustments require time and investment, adding to the existing concerns about economic slowdown.
The unease surrounding global trade is also affecting investment decisions. Many SMEs are adopting a more cautious approach, delaying or scaling back expansion plans until the outlook becomes clearer. This hesitancy to invest could have broader implications for economic growth, as SMEs are significant contributors to job creation and innovation. The situation in Q1FY26 remains uncertain, with many businesses closely monitoring developments in global trade negotiations.
Confidence Index Declines
Despite the dip, the index remains 6% higher on a year-on-year basis and well above its long-term average, reflecting a phase of cautious optimism among India’s small and medium enterprises (SMEs). India’s small business sentiment has seen a slight moderation in the April–June 2025 quarter, as the ASSOCHAM–Dun & Bradstreet Small Business Confidence Index (SBCI) edged down by 1.8% from the previous quarter, settling at 105.4.
Despite the dip, the index remains 6% higher on a year-on-year basis and well above its long-term average, reflecting a phase of cautious optimism among India’s small and medium enterprises (SMEs).
The decline in the SBCI signals a cooling off from the more buoyant sentiment observed in previous quarters. While still positive, the index level of 105.4 suggests that SMEs are becoming more circumspect about the immediate future. This moderation is primarily driven by concerns over global trade uncertainty and the potential for an economic slowdown, which are impacting their business outlook.
Several factors contribute to the index’s decline. Rising input costs, coupled with fluctuating demand in both domestic and international markets, are putting pressure on SMEs. Furthermore, access to credit remains a challenge for many smaller businesses, hindering their ability to invest and expand. The situation in Q1FY26 will be critical in determining whether this is a temporary blip or a more sustained downward trend in small business confidence.
Impact On Investment Plans
The prevailing economic slowdown and global trade uncertainty are directly influencing the investment strategies of Indian SMEs. A noticeable trend is the postponement of capital expenditure, with many businesses opting to conserve resources rather than embark on new ventures or expand existing operations. This risk-averse approach stems from the fear that adverse trade policies or a further dip in demand could render new investments unprofitable.
Specifically, planned investments in areas such as technology upgrades, infrastructure improvements, and workforce expansion are being reassessed. While some SMEs are proceeding with essential upgrades to maintain competitiveness, discretionary investments are largely on hold. This cautious stance could have a knock-on effect on innovation and productivity growth within the sector, potentially hindering long-term economic development. The impact on investment plans is a direct consequence of the decline in small business confidence.
Furthermore, the availability of credit plays a crucial role in investment decisions. With increased uncertainty, lenders are becoming more stringent in their lending criteria, making it harder for SMEs to access the finance they need. This tightening of credit conditions further exacerbates the investment slowdown, particularly for smaller businesses that rely heavily on external funding. The outlook for Q1FY26 remains uncertain, with investment plans contingent on a more stable and predictable economic environment.
Government Response Examined
In response to the dip in small business confidence and the growing concerns surrounding global trade uncertainty, the government is actively exploring measures to support SMEs. These measures aim to mitigate the negative impacts of trade tensions and bolster the business outlook for smaller enterprises. Several initiatives are under consideration, focusing on easing access to credit, reducing regulatory burdens, and promoting domestic demand.
One key area of focus is streamlining the process for SMEs to obtain loans and credit facilities. The government is working with banks and financial institutions to encourage more lending to the sector, particularly for businesses affected by the economic slowdown. This includes exploring options such as credit guarantee schemes and interest rate subsidies to reduce the cost of borrowing for SMEs. Efforts are also underway to simplify compliance procedures and reduce the administrative burden on small businesses, freeing up resources for investment and growth.
Furthermore, the government is actively promoting domestic demand to offset the impact of reduced export opportunities. This involves initiatives such as infrastructure development projects and incentives for local manufacturing. These efforts aim to create a more supportive environment for SMEs to thrive, despite the challenges posed by global trade uncertainty. The government’s response in Q1FY26 will be critical in shaping the future of small business confidence and ensuring the continued growth of the SME sector.

June 12, 2025
Fssai advisory on misleading “100%” food claims

Fssai advisory on misleading “100%” food claims

The Food Safety and Standards Authority of India (FSSAI) has released a crucial advisory targeting misleading claims in food labelling and food advertising. This directive specifically addresses the use of “100%” claims on food product packaging. The FSSAI’s move aims to safeguard consumers from deceptive marketing practices and ensure accurate representation of food products. This advisory is a significant step towards strengthening food safety and food standards across India.

The FSSAI’s advisory cautions Food Business Operators (FBOs) against using unqualified statements such as “100% pure”, “100% natural”, or “100% safe” on their products. These 100% claims can often mislead consumers into believing a product is entirely free from additives, contaminants, or processing, which may not always be the case. The regulator emphasises the need for transparent and truthful information on food labels to enable informed purchasing decisions.

This advisory from the FSSAI is likely to have a considerable impact, particularly on SMEs and startups operating within India’s food sector. Many of these businesses rely heavily on marketing strategies that highlight perceived purity or naturalness to attract customers. The new guidelines will require them to reassess their current food labelling and food advertising practices to ensure compliance with food regulations and avoid potential penalties for misleading claims.
Common Misleading Claims
The FSSAI advisory highlights several common examples of misleading claims that FBOs often employ. One prevalent tactic involves using “100% natural” claims on products that have undergone significant processing or contain added ingredients. For example, a fruit juice labelled “100% natural” might contain added sugars or preservatives, contradicting the claim. Similarly, the term “100% pure” is frequently misused on products like honey or ghee, even when they may contain traces of adulterants or have been processed in a way that alters their original composition. These misleading claims undermine consumer trust and distort the market.

Another area of concern is the use of “100% safe” claims. The FSSAI points out that no food product can be guaranteed to be entirely risk-free for all consumers. Factors such as individual allergies, sensitivities, or pre-existing health conditions can influence how a person reacts to a particular food. Therefore, making blanket “100% safe” statements on food packaging is considered misleading and potentially dangerous. The FSSAI emphasises that FBOs must avoid making unqualified safety assertions and instead focus on providing accurate information about ingredients, potential allergens, and proper usage instructions to promote food safety.

Furthermore, the advisory addresses instances where companies use creative wording to imply a “100% claim” without explicitly stating it. This includes phrases like “made with 100% real ingredients” when only some of the ingredients meet that standard. Such subtle forms of deception also fall under the purview of the FSSAI’s scrutiny. The regulator is urging SMEs and larger businesses across India to review their food labelling and food advertising materials carefully to ensure they are not making any overt or implied misleading claims that could violate food regulations and compromise food standards. Compliance with these guidelines is crucial for maintaining consumer confidence and fostering a fair marketplace.
Understanding The Regulations
The FSSAI’s stance on “100% claims” is rooted in the Food Safety and Standards Act, 2006, and associated regulations. These regulations mandate that food labels must provide clear, accurate, and truthful information about the product’s contents, origin, and manufacturing process. The Act empowers the FSSAI to set food standards, regulate food manufacturing, distribution, and sale, and take action against FBOs that violate food regulations. The current advisory serves as a clarification and reinforcement of these existing legal provisions, specifically targeting the deceptive use of “100% claims” in food labelling and food advertising.

Specifically, the FSSAI’s regulations pertaining to food labelling require that all ingredients be listed in descending order of weight, and any additives, preservatives, or processing aids must be clearly identified. Nutritional information, including calorie count, fat content, and sugar levels, must also be prominently displayed. The “100% claim”, when used, must be substantiated by verifiable evidence and not contradict any other information provided on the packaging. For instance, a product labelled “100% juice” must genuinely consist of only juice without any added sugars, preservatives, or artificial flavourings. Any deviation from these requirements can lead to enforcement action by the FSSAI.

Furthermore, the FSSAI’s advisory draws attention to the broader principles of fair trade and consumer protection enshrined in Indian law. The Consumer Protection Act, 2019, prohibits unfair trade practices, including misleading food advertising and false representations about the quality, quantity, or composition of goods. By issuing this advisory, the FSSAI is reinforcing its commitment to upholding these principles and ensuring that consumers in India are not misled by deceptive marketing tactics. The FSSAI aims to create a level playing field for businesses while safeguarding the health and economic interests of consumers. This focus is important to improve food safety and food standards across India, especially for SMEs.
Compliance And Enforcement
The FSSAI has outlined a multi-pronged approach to ensure compliance with its advisory on misleading claims. This includes proactive monitoring of food labelling and food advertising across various platforms, from physical packaging to online advertisements. The FSSAI will conduct regular inspections of food manufacturing facilities and retail outlets to verify that FBOs are adhering to the guidelines. This rigorous oversight is designed to deter the use of misleading claims and promote transparency in the food sector. Consumers also play a vital role in enforcement by reporting suspected violations to the FSSAI.

In cases of non-compliance, the FSSAI has the authority to take a range of enforcement actions against FBOs. These actions may include issuing warning notices, imposing monetary penalties, suspending or cancelling licenses, and even initiating legal proceedings. The severity of the penalty will depend on the nature and extent of the violation, as well as the FBO’s history of compliance. The FSSAI is committed to ensuring that penalties are proportionate and serve as a deterrent against future violations. This firm stance underscores the FSSAI’s commitment to upholding food safety and food standards.

To further support compliance, the FSSAI plans to conduct educational outreach programs for SMEs and other stakeholders in the food industry. These programs will provide guidance on best practices for food labelling and food advertising, as well as clarification on the specific requirements of the advisory. The FSSAI believes that education and awareness are crucial for fostering a culture of compliance within the industry. These outreach programs will help FBOs understand their obligations and avoid unintentional violations of food regulations. The FSSAI advisory is designed to protect consumers from misleading claims and promote fair competition in the Indian food market.

June 11, 2025
Up government boosts msme exports with upnva campaign

Up government boosts msme exports with upnva campaign

The Uttar Pradesh government has officially launched the UPNVA campaign, a strategic initiative designed to significantly boost exports from the state’s Micro, Small, and Medium Enterprises (MSME) sector. The campaign aims to provide a comprehensive support system for small businesses, enabling them to access global markets more effectively. UPNVA represents a multi-pronged approach, incorporating training programmes, financial assistance, and logistical support to empower MSMEs to compete on an international scale. The up government envisions this campaign as a catalyst for economic growth, fostering job creation and enhancing the overall competitiveness of Uttar Pradesh.

The UPNVA campaign will focus on identifying and nurturing export-ready MSMEs across various sectors within Uttar Pradesh. It includes workshops on export procedures, quality control, and international marketing strategies. Furthermore, the campaign will facilitate participation in international trade fairs and exhibitions, providing a platform for MSMEs to showcase their products and establish valuable business connections. The upnva campaign seeks to streamline the export process, reducing bureaucratic hurdles and making it easier for small businesses to navigate the complexities of international trade. The ultimate goal is to drive substantial growth in msme exports from Uttar Pradesh.
Msme Export Growth Strategy
The UP government’s MSME export growth strategy hinges on several key pillars. Central to this is identifying high-potential sectors within Uttar Pradesh, such as handicrafts, textiles, leather goods, and agricultural products. The UPNVA campaign will then provide targeted support to businesses in these sectors, helping them to adapt their products and processes to meet international standards. This involves rigorous quality control measures, adherence to global certifications, and the adoption of sustainable production practices.

Another crucial aspect of the strategy involves strengthening the export infrastructure within Uttar Pradesh. This includes improving transportation networks, streamlining customs procedures, and establishing dedicated export promotion zones. The UP government is also working to enhance access to export finance, providing MSMEs with the capital they need to scale up their operations and compete effectively in international markets. This support extends to helping small businesses navigate complex trade regulations and access market intelligence, ensuring they are well-informed and prepared to succeed.

Furthermore, the strategy emphasises the importance of collaboration between government agencies, industry associations, and academic institutions. The UPNVA campaign will facilitate partnerships between MSMEs and research institutions, promoting innovation and the development of new exportable products. It will also work closely with industry associations to identify common challenges and develop collective solutions. This collaborative approach is essential to creating a supportive ecosystem for MSME exports and driving sustainable economic growth across Uttar Pradesh.
Government Support Initiatives
The Uttar Pradesh government is implementing a range of support initiatives to bolster the UPNVA campaign and ensure its success. These initiatives include financial assistance programmes, skill development training, and infrastructure improvements specifically designed to benefit MSMEs. Subsidised loans and credit guarantee schemes are available to help small businesses access the capital they need to expand their production capacity and fulfil export orders. The up government understands the financial constraints often faced by msmes and is committed to providing targeted financial support.

Furthermore, the upnva campaign provides extensive skill development training to enhance the capabilities of workers in the MSME sector. These training programmes cover a wide range of topics, including modern manufacturing techniques, quality control procedures, and international marketing strategies. The goal is to equip MSMEs with the skills they need to produce high-quality goods that meet international standards and to effectively market their products to global customers. The up government believes that investing in human capital is essential for driving sustainable export growth.

In addition to financial assistance and skill development, the up government is also focusing on improving the infrastructure that supports MSME exports. This includes upgrading transportation networks, streamlining customs procedures, and establishing dedicated export promotion zones. The aim is to reduce the time and cost associated with exporting goods from Uttar Pradesh, making it easier for small businesses to compete in international markets. These initiatives collectively contribute to a more conducive environment for MSME growth and facilitate increased exports from the region.
Expected Economic Impact
The UPNVA campaign is projected to have a significant and multifaceted economic impact on Uttar Pradesh. By fostering growth in MSME exports, the campaign is expected to generate substantial revenue for the state, contributing to overall economic prosperity. Increased exports will lead to higher production levels, creating new employment opportunities across various sectors. This will not only reduce unemployment rates but also improve the living standards of many families in Uttar Pradesh. The up government anticipates a significant boost to the state’s GDP as a direct result of the campaign’s success.

Furthermore, the UPNVA campaign is expected to enhance the competitiveness of Uttar Pradesh’s MSME sector on a global scale. By providing small businesses with the necessary training, financial assistance, and logistical support, the campaign will enable them to produce higher-quality goods and services that meet international standards. This will not only increase exports but also attract foreign investment to the state, further stimulating economic growth. The long-term impact of the UPNVA campaign is expected to be a more diversified and resilient economy in Uttar Pradesh, less reliant on domestic markets and more capable of competing in the global arena.

The success of the UPNVA campaign will also have a positive ripple effect on other sectors of the Uttar Pradesh economy. Increased demand for raw materials and components from MSMEs will benefit local suppliers, creating further employment opportunities and stimulating economic activity in rural areas. The campaign is also expected to promote innovation and entrepreneurship, as small businesses are encouraged to develop new products and services for export markets. The upnva campaign represents a strategic investment in the future of Uttar Pradesh, with the potential to transform the state into a major export hub.

June 11, 2025
India’s cashless journey, digital payments, Nirmala Sitharaman, last 11 years, financial revolution

India’s cashless journey, digital payments, Nirmala Sitharaman, last 11 years, financial revolution

India is currently undergoing a significant shift towards digital payments, establishing itself as a leader in the global fintech landscape. Recent data highlights the rapid adoption of Unified Payments Interface (UPI) with daily transactions exceeding ₹70,000 crore. The sheer volume of transactions, exemplified by 596 million transactions processed in a single day, demonstrates the extent to which digital payments are becoming the standard method of exchange for many Indians.
The month of May showcased UPI’s robust growth, with 18.68 billion transactions recorded, an increase from 17.89 billion in April. This represents a 33 per cent year-on-year surge compared to the 14.03 billion transactions processed in May of the previous year. The value of these transactions also saw a substantial rise, reaching ₹25.14 lakh crore last month, marking a 5 per cent increase from ₹23.95 lakh crore in April and a 23 per cent rise from ₹20.45 lakh crore in May of the previous year.
The average daily transaction volume now stands at 602 million, with an average daily transaction value of ₹81,106 crore. These figures underline the increasing reliance on UPI for both small and large transactions. The National Payments Corporation of India (NPCI) data shows UPI’s growing dominance in the country’s digital payments ecosystem. Its share in the total transaction volume has risen to 83.7 per cent in the current financial year, up from 79.7 per cent in the previous financial year. This reinforces UPI’s position as the primary driver of cashless transactions across India.
Evolution over the last decade
Over the past decade, India’s digital payment landscape has undergone a transformative evolution, driven by technological advancements, policy interventions, and a growing consumer appetite for convenient and secure transaction methods. The journey began with initial forays into electronic fund transfers and mobile banking, gradually gaining momentum with the introduction of innovative platforms and applications.
The early 2010s witnessed the rise of mobile wallets and payment gateways, offering consumers alternatives to traditional banking channels. These platforms provided ease of use and accessibility, particularly for the tech-savvy urban population. However, adoption remained limited due to concerns about security, interoperability, and a lack of widespread awareness. The turning point came with the launch of the Unified Payments Interface (UPI) in 2016.
UPI revolutionised the digital payments ecosystem by enabling seamless and instant money transfers between bank accounts using a single mobile application. Its interoperability, coupled with a user-friendly interface, facilitated widespread adoption across diverse demographics. The government’s push for financial inclusion, coupled with initiatives like demonetisation, further accelerated the shift towards digital transactions. The result has been exponential growth in digital payments, transforming India into a global leader in fintech innovation. This growth has not only streamlined financial transactions but also empowered small businesses and individuals, fostering economic growth and inclusion.
Government initiatives and Nirmala Sitharaman’s role
The Indian government has played a crucial role in fostering the growth of digital payments, with Finance Minister Nirmala Sitharaman being a prominent advocate for this financial transformation. Government policies and initiatives have been instrumental in creating an environment conducive to the adoption of cashless transactions. The emphasis on financial inclusion, combined with the promotion of digital literacy, has empowered citizens across various socio-economic backgrounds to participate in the digital economy.
Nirmala Sitharaman has consistently highlighted the benefits of digital payments, emphasising their role in enhancing transparency, reducing corruption, and improving efficiency in financial transactions. Her support for initiatives like UPI has been pivotal in driving its widespread adoption. By actively promoting the use of digital platforms, the government aims to create a more robust and inclusive financial system. Sitharaman’s leadership in this area underscores the government’s commitment to leveraging technology for economic development and citizen empowerment.
Furthermore, the government has implemented various schemes and incentives to encourage the use of digital payment methods. These include tax benefits for merchants accepting digital payments and awareness campaigns to educate the public about the security and convenience of cashless transactions. The collaborative efforts between the government, regulatory bodies, and private sector players have been essential in creating a vibrant and innovative digital payments ecosystem. This collaborative approach ensures that India remains at the forefront of the global digital payments revolution.
Challenges and the future of cashless India
Despite the impressive growth and widespread adoption of digital payments in India, several challenges remain. One of the most significant is the digital divide, with a substantial portion of the population still lacking access to the internet and smartphones. This disparity limits the reach of digital payment solutions, particularly in rural areas and among lower-income groups. Bridging this divide requires concerted efforts to improve digital infrastructure and promote digital literacy.
Cybersecurity concerns also pose a significant challenge. As digital transactions increase, so does the risk of fraud and data breaches. Ensuring the security and integrity of digital payment systems is crucial for maintaining public trust and preventing financial losses. This necessitates robust cybersecurity measures, including advanced encryption technologies, fraud detection systems, and user awareness campaigns. Collaboration between financial institutions, technology providers, and regulatory bodies is essential to address these evolving threats.
Looking ahead, the future of cashless India appears promising, with significant opportunities for further innovation and growth. The integration of emerging technologies like blockchain and artificial intelligence (AI) could enhance the security, efficiency, and accessibility of digital payment systems. For example, blockchain could provide a more transparent and secure platform for transactions, while AI could be used to detect and prevent fraudulent activities in real-time. Continued investment in digital infrastructure, coupled with supportive government policies, will be crucial for realising the full potential of cashless India. The focus should be on creating a seamless, secure, and inclusive digital payments ecosystem that benefits all citizens.

June 10, 2025
Govt notifies sez reforms

Govt notifies sez reforms

The government has introduced ground-breaking reforms to the Special Economic Zones (SEZ) regulations, specifically targeting the unique demands of the semiconductor and electronics component manufacturing sectors in India. Recognising that manufacturing in these sectors is capital-intensive, reliant on imports, and subject to lengthy periods before profitability, the rule changes aim to stimulate pioneering investments and boost manufacturing in these high-technology sectors.

Following amendments to Rule 5 of the SEZ Rules, 2006, an SEZ established solely for the manufacturing of semiconductors or electronic components will now require a minimum contiguous land area of just 10 hectares, a significant reduction from the previous requirement of 50 hectares. Further, changes to Rule 7 of the SEZ Rules, 2006, empower the Board of Approval for SEZs to waive the condition that SEZ land must be free of encumbrances in cases where it is mortgaged or leased to the Central or State Government or their authorised agencies.

The amended Rule 53 now allows the value of goods received and supplied free of charge to be included in Net Foreign Exchange (NFE) calculations and assessed using relevant customs valuation rules. Moreover, amendments to Rule 18 of the SEZ Rules now permit SEZ units in the semiconductor and electronics component manufacturing sectors to supply domestically into the Domestic Tariff Area after paying the applicable duties. These key amendments aim to make SEZs more accessible and attractive for investment in these critical sectors.
Impact On Businesses
These SEZ reforms are poised to have a substantial impact on businesses operating within the semiconductor and electronics manufacturing sectors in India. The reduction in minimum land requirements will particularly benefit small and medium-sized enterprises (SMEs), allowing them to establish operations within SEZs without the burden of acquiring vast tracts of land. This increased accessibility could foster greater participation from domestic players, boosting competition and innovation within the industry.

The relaxation of encumbrance norms provides much-needed flexibility for companies seeking to set up manufacturing units. Previously, the requirement for encumbrance-free land presented a significant hurdle, especially for businesses with existing land holdings that may have been mortgaged or leased. By allowing the Board of Approval to waive this condition in certain cases, the reforms will unlock opportunities for companies to leverage their existing assets and expedite the establishment of their SEZ operations.

Furthermore, the inclusion of free-of-cost goods in NFE calculations offers a more realistic assessment of the economic contribution of SEZ units. This change acknowledges the prevalence of such arrangements in the semiconductor and electronics manufacturing industries, where components are often provided by parent companies or international partners. By accounting for these goods, the reforms will provide a more accurate picture of the net foreign exchange earned by SEZ units, potentially leading to more favourable policy decisions and incentives.

The ability for SEZ units to supply domestically into the Domestic Tariff Area after paying applicable duties presents a significant opportunity for businesses to tap into the growing Indian market. This will enable them to diversify their revenue streams, reduce their reliance on exports, and cater to the increasing demand for electronics and semiconductor products within the country. This provision could also incentivise foreign companies to establish manufacturing facilities in India, with the aim of serving both domestic and international markets.
Simplified Procedures
The recent reforms to the SEZ regulations also encompass simplified procedures, designed to reduce bureaucratic hurdles and streamline operations for businesses. The Department of Commerce has implemented measures to expedite the approval process for new SEZ units and facilitate smoother customs clearances for goods moving in and out of these zones. These streamlined procedures are expected to significantly reduce the time and cost associated with setting up and operating within SEZs, making them more attractive to investors.

One key aspect of the simplified procedures is the introduction of a single-window clearance system for various approvals and permits required by SEZ units. This system will consolidate multiple application processes into a single online platform, reducing the need for businesses to interact with numerous government agencies. This will not only save time and resources but also enhance transparency and accountability in the approval process.

Furthermore, the government is committed to reducing the compliance burden on SEZ units by simplifying reporting requirements and adopting risk-based inspections. This means that businesses with a proven track record of compliance will be subject to fewer inspections and less stringent reporting obligations. This will allow them to focus on their core business activities, rather than spending excessive time on administrative tasks. These simplified procedures are expected to contribute significantly to the ease of doing business within SEZs, fostering a more conducive environment for investment and growth in the semiconductor and electronics manufacturing sectors in India.
Future Outlook
Looking ahead, these SEZ reforms are expected to catalyse a new era of growth and innovation within India’s semiconductor and electronics manufacturing sectors. The government envisions India emerging as a global hub for high-tech manufacturing, attracting significant foreign direct investment (FDI) and creating numerous high-skilled job opportunities. The recent policy changes are a crucial step towards realising this ambitious vision.

Industry analysts predict that the reduced land requirements and relaxed encumbrance norms will lead to a surge in the number of SEZ applications, particularly from SMEs and domestic manufacturers. This increased participation could foster a more competitive and dynamic ecosystem, driving innovation and technological advancements within the semiconductor and electronics industries. The reforms are also expected to encourage existing SEZ units to expand their operations and invest in new technologies.

Furthermore, the government plans to continue refining the SEZ policy framework based on industry feedback and evolving global trends. This includes exploring further simplifications to procedures, providing targeted incentives for research and development, and fostering collaborations between SEZ units and academic institutions. By remaining agile and responsive to the needs of the industry, India aims to solidify its position as a leading destination for semiconductor and electronics manufacturing, attracting both domestic and international investment in the years to come. The success of these SEZ reforms is crucial for India’s economic growth and its ambition to become a self-reliant manufacturing powerhouse.

June 10, 2025
New credit cover aids MSME exporters by September

New credit cover aids MSME exporters by September

The central government is drafting a new credit guarantee scheme for export-oriented MSMEs, with the aim of finalising it within a month. This initiative focuses on providing collateral-free loans of up to Rs 20 crore per borrower, significantly boosting trade finance accessibility for small businesses. The scheme intends to offer substantial credit cover to mitigate risks associated with export activities.

Under the proposed framework, the scheme may guarantee up to 95% of loans for micro and small enterprises, offering robust support to the sector. Medium enterprises can expect a guarantee of up to 75% on their loans, ensuring a considerable level of risk mitigation. The guarantee fee for borrowers is projected to be around 1.5%, making the scheme affordable and accessible.

A senior official stated that the government aims to roll out the scheme by September. The scheme will remain active for six years, aligning with the 16th Finance Commission award cycle, which concludes at the end of fiscal year 2031. This long-term commitment provides stability and assurance to exporters, fostering a conducive environment for growth and expansion in international markets. The new credit cover should help to reduce reliance on export insurance in some cases.
Benefits For Exporters
This enhanced credit cover promises substantial benefits for exporters, particularly small businesses striving to expand their global footprint. By providing guarantees on loans, the scheme reduces the need for collateral, unlocking much-needed trade finance for MSMEs. This increased access to capital enables exporters to fulfil larger orders, invest in new technologies, and explore new markets, ultimately driving export growth and contributing to the nation’s economic prosperity.

Furthermore, the scheme’s risk mitigation aspect provides a safety net for exporters, shielding them from potential losses due to unforeseen circumstances in international trade. This security encourages businesses to take calculated risks and pursue ambitious export strategies, fostering innovation and competitiveness. The reduction in reliance on export insurance translates to lower operational costs for exporters, further enhancing their profitability and competitiveness in the global marketplace. The credit cover aims to create a more level playing field, enabling even the smallest exporters to compete effectively on the international stage.
Expected Implementation Timeline
The government is working diligently to ensure the scheme’s launch by September. This ambitious timeline reflects the urgency in addressing the trade finance needs of MSME exporters. Preparations are underway across various departments to streamline the approval process and ensure seamless implementation. The focus is on creating a user-friendly platform for small businesses to access the credit cover without unnecessary bureaucratic hurdles.

The proposed six-year operational period, extending until the end of FY31, provides exporters with a long-term perspective for their export strategies. This extended duration allows businesses to confidently invest in capacity building, market development, and innovation, knowing that the credit cover will be available to support their growth over the medium term. The government believes this stability will encourage exporters to explore new markets and forge lasting international partnerships, contributing to sustained export growth and economic diversification. This also provides ample time to assess the scheme’s effectiveness and make any necessary adjustments.

The September launch date is a key target, and stakeholders are working collaboratively to meet this deadline. This includes finalising the operational guidelines, setting up the necessary infrastructure, and conducting awareness campaigns to educate exporters about the benefits of the scheme. The government is committed to ensuring that all eligible MSME exporters can easily access and benefit from this vital credit cover, thereby boosting their competitiveness and contributing to the nation’s export success. The emphasis on risk mitigation and enhanced trade finance accessibility is expected to have a significant positive impact on the export sector.

June 9, 2025
RBI Rate Cut Forecast for 2025: What to Expect

RBI Rate Cut Forecast for 2025: What to Expect

The Reserve Bank of India (RBI) is widely expected to implement a rate cut in the coming months, driven by a confluence of factors suggesting a need for more accommodative monetary policy. Inflation, while still above the RBI’s comfort zone, has shown signs of easing, prompting a reassessment of the current restrictive stance. Furthermore, concerns about sustaining economic growth momentum are mounting, particularly given global headwinds and subdued domestic demand in certain sectors.

Several economists believe the RBI is preparing to act. A key consideration is the real interest rate, which remains relatively high. By reducing the repo rate, the RBI aims to lower borrowing costs for businesses and consumers, encouraging investment and spending. Market participants are closely watching upcoming inflation data and the central bank’s commentary for further clues about the timing and magnitude of the anticipated rate cut. Nomura, for example, has revised its forecast and now anticipates the first rate cut in the fourth quarter of 2024, followed by further easing into 2025.

The potential rate cut isn’t solely about immediate economic stimulus. The RBI also considers the broader financial stability implications. A measured approach is expected, with the central bank carefully calibrating the size of the rate cut – likely in increments of 25 basis points – to avoid destabilising the currency market or triggering inflationary pressures. The decision-making process involves a delicate balancing act between supporting growth and maintaining price stability, a challenge the Monetary Policy Committee (MPC) is keenly aware of.
Impact On Borrowers
A rate cut by the RBI will have a direct and positive impact on borrowers across various segments. Lower repo rate translates to reduced lending rates for banks, which they are likely to pass on to their customers. This means individuals with existing loans, such as home loans, auto loans, and personal loans, can expect their equated monthly instalments (EMIs) to decrease. For new borrowers, the cost of taking out a loan will also be lower, making credit more accessible and affordable.

The extent of the benefit will depend on the transmission of the rate cut by individual banks. While the RBI’s monetary policy actions influence overall interest rates, banks ultimately decide how much of the rate cut they pass on to their customers. Factors such as their own cost of funds and competitive pressures will play a role in their decision-making. Borrowers should compare offers from different banks to secure the best possible interest rates.

Beyond individual borrowers, businesses will also benefit from lower borrowing costs. Companies seeking to expand their operations, invest in new equipment, or manage their working capital will find it cheaper to access credit. This can lead to increased investment, job creation, and overall economic growth. A reduction in interest expenses can also improve the profitability of businesses, allowing them to become more competitive. The impact will be felt particularly strongly by small and medium-sized enterprises (SMEs), which often rely heavily on bank financing.
Expert Predictions
Experts hold varied opinions regarding the precise timing and magnitude of the upcoming rate cut. While a consensus exists that the RBI will eventually ease its monetary policy, the degree of certainty and the expected timeline differ. Some economists, like those at Nomura, have already issued revised forecasts, predicting a rate cut as early as the fourth quarter of 2024. They base their assessment on the moderating inflation and the need to stimulate economic activity.

Other analysts remain more cautious, suggesting that the RBI will likely adopt a wait-and-see approach, closely monitoring incoming economic data before making any firm decisions. These experts emphasise the importance of ensuring that inflation remains firmly under control before loosening monetary policy. They suggest that the central bank may prefer to wait until there is more concrete evidence of a sustained decline in inflation before implementing a rate cut.

The size of the potential rate cut is also a subject of debate. While most analysts expect the RBI to move in increments of 25 basis points, some suggest that a larger, more aggressive rate cut may be necessary to provide a significant boost to the economy. However, this would carry the risk of destabilising the currency market and fuelling inflationary pressures. Therefore, the RBI will likely proceed with caution, carefully weighing the potential benefits and risks of each policy decision. Most forecasts anticipate a cumulative reduction of 50-75 basis points in the repo rate by the end of 2025.
Market Reaction
The anticipation of a rate cut has already started influencing market sentiment. The bond market has reacted positively, with yields on government securities softening in recent weeks. This reflects expectations that the RBI will soon begin to ease its monetary policy, leading to increased demand for bonds and pushing prices higher. The equity market has also shown a positive response, with banking and financial stocks, in particular, experiencing gains. Investors anticipate that lower interest rates will boost credit growth and improve the profitability of financial institutions.

The currency market’s reaction is more complex. While a rate cut could potentially weaken the rupee, the impact may be mitigated by other factors, such as strong foreign exchange reserves and positive investor sentiment towards the Indian economy. The RBI is likely to manage the currency market carefully, intervening if necessary to prevent excessive volatility. Analysts at Nomura suggest that the overall impact on the rupee will depend on the magnitude and pace of the rate cuts, as well as global economic conditions.

Corporate bond spreads are also expected to narrow as the prospect of lower interest rates makes it cheaper for companies to borrow money. This will improve the financial health of businesses and encourage investment. The overall market reaction will depend on the RBI’s communication strategy and the clarity it provides regarding its future policy intentions. A well-communicated and gradual approach to rate cuts is likely to be viewed favourably by the markets, minimising the risk of any negative surprises. Market participants are closely monitoring the evolving economic landscape and the RBI’s signals to adjust their investment strategies accordingly. Many forecasts anticipate a positive market trajectory in the event of a well-managed rate cut in 2025.

June 5, 2025
IESA champions green ev battery reuse

IESA champions green ev battery reuse

India Energy Storage Alliance (IESA) champions a future where EV batteries don’t simply become waste at the end of their first life. IESA envisions a robust ecosystem built around the reuse of these batteries, transforming them from potential environmental hazards into valuable resources. Their vision is rooted in the principles of sustainability, aiming to minimise the environmental impact of electric vehicles and promote a circular economy.

IESA sees tremendous potential in repurposing EV batteries for various secondary applications. This includes energy storage systems for homes, businesses, and even grid-scale projects. By giving EV batteries a second life, IESA aims to reduce the demand for new battery production, conserving precious resources and lowering carbon emissions. They actively promote the adoption of green technology and best practices within the industry.

As a leading industry body, IESA is actively working to facilitate the development of this ecosystem. They are involved in research, policy advocacy, and awareness campaigns to highlight the benefits of battery reuse and recycling. Their work focuses on creating a supportive environment for businesses and innovators to thrive in this emerging sector, ultimately driving the growth of a sustainable energy storage market in India and beyond.

Benefits Of Battery Reuse

Repurposing EV batteries offers a multitude of advantages that extend beyond environmental considerations. Economically, it can significantly reduce the cost of energy storage solutions. Second-life batteries, while not suitable for the demanding requirements of electric vehicles, can still provide substantial energy storage capacity for less critical applications, making energy storage more accessible to a wider range of consumers and businesses.

From a sustainability perspective, battery reuse minimises the environmental footprint associated with battery production. Extracting raw materials and manufacturing new batteries are energy-intensive processes that contribute to greenhouse gas emissions. By extending the lifespan of EV batteries through reuse, we can significantly reduce the demand for these resource-intensive activities. This aligns perfectly with IESA’s commitment to promoting green technology and a circular economy in India.

Moreover, a thriving battery reuse industry creates new economic opportunities and jobs. The processes involved in testing, refurbishing, and repurposing EV batteries require skilled technicians and engineers, fostering innovation and growth in the energy storage sector. As an industry body, IESA recognises the potential for India to become a global leader in battery reuse and recycling, driving economic growth while promoting environmental stewardship.

Reuse Challenges And Solutions

Despite the clear advantages, the path to widespread EV battery reuse isn’t without its obstacles. One major hurdle lies in the standardisation of battery technology. The lack of uniformity in battery designs, chemistries, and management systems across different electric vehicles makes it challenging and costly to assess, repurpose, and integrate second-life EV batteries into new applications. This inconsistency increases the complexity of testing and refurbishment processes, hindering the scalability of reuse initiatives.

Another significant challenge is ensuring the safety and performance of reused EV batteries. Thorough testing and certification are essential to guarantee that these batteries meet the required safety standards for their new applications. Concerns about degradation, thermal runaway, and potential hazards need to be addressed through rigorous quality control measures. Developing robust testing protocols and certification frameworks is crucial for building trust and confidence in the reliability of second-life batteries.

To overcome these challenges, collaboration is key. IESA actively promotes partnerships between automakers, battery manufacturers, energy storage companies, and research institutions. By working together, stakeholders can develop common standards, share best practices, and create innovative solutions for battery reuse and recycling. Furthermore, government support and policy incentives are essential to encourage investment in this emerging sector and accelerate the transition towards a circular economy for EV batteries in India. This includes financial support for research and development, tax incentives for companies involved in battery reuse, and clear regulatory frameworks to ensure responsible and sustainable practices. IESA, as a leading industry body, is actively advocating for such policies.

Industry Collaboration And Growth

The growth of the EV battery reuse sector hinges significantly on robust collaboration between various stakeholders. IESA plays a pivotal role in fostering these partnerships, bringing together automakers, battery manufacturers, energy storage companies, and research institutions. These collaborative efforts are crucial for establishing industry standards, streamlining processes, and promoting best practices for EV batteries’ second life.

Standardisation of battery technology is a key area where industry-wide cooperation is essential. By working towards common battery designs and management systems, the challenges associated with assessing, repurposing, and integrating second-life EV batteries can be significantly reduced. This will make the reuse process more efficient and cost-effective, ultimately boosting the scalability of reuse initiatives across India.

Furthermore, collaborative research and development initiatives are vital for advancing battery reuse technologies. By pooling resources and expertise, stakeholders can develop innovative solutions for testing, refurbishment, and integration of second-life batteries into various applications. This includes exploring new chemistries, improving battery management systems, and developing advanced diagnostic tools to ensure the safety and performance of reused batteries. IESA, as a prominent industry body, actively facilitates these collaborative projects to accelerate the growth of the green technology sector.

Government support and policy incentives are also critical drivers of industry growth. Clear regulatory frameworks, financial support for research and development, and tax incentives for companies involved in battery reuse and recycling can create a favourable environment for investment and innovation. IESA actively engages with policymakers to advocate for policies that promote sustainability and the circular economy for EV batteries in India, driving the transition towards a greener future for electric vehicles.

June 5, 2025
Decathlon’s Indian ambition

Decathlon’s Indian ambition

The Indian market presents a compelling, yet complex, landscape for sports retail giants like Decathlon. Boasting a young and increasingly health-conscious population, India has witnessed a surge in fitness fads and a growing interest in diverse sporting activities. This burgeoning demand is fuelled by rising disposable incomes and greater awareness of the benefits of an active lifestyle. However, this potential is tempered by several factors. The market is highly price-sensitive, and competition is fierce, ranging from established domestic players to international brands. Furthermore, infrastructure challenges and logistical complexities can impact supply chain efficiency and overall profitability. Despite these hurdles, the sheer size and growth potential of the Indian market make it an attractive target for Decathlon’s expansion plans. Decathlon recognises the importance of tailoring its offerings to suit local preferences and price points. The company is actively exploring opportunities to leverage the “Make in India” initiative, aiming to source and manufacture more products locally. This strategy not only reduces costs but also allows Decathlon to better cater to the specific needs and tastes of Indian consumers. The company’s commitment to sustainability and circularity also resonates with an increasingly environmentally aware consumer base.
Growth Strategy Details
Decathlon’s growth strategy in India hinges on a multi-pronged approach. A key element is expanding its physical presence through a mix of large-format stores in metropolitan areas and smaller, more accessible outlets in Tier 2 and Tier 3 cities. This ensures wider reach and caters to diverse customer segments. The company also focuses on strengthening its online presence, recognising the increasing importance of e-commerce in the Indian market. A seamless online-offline experience is crucial to capture the digitally savvy consumer base. Another vital aspect of Decathlon’s strategy is product localisation. The company is actively investing in research and development to create products specifically designed for the Indian climate, playing conditions, and consumer preferences. By increasing local sourcing through the “Make in India” initiative and manufacturing, Decathlon aims to offer competitive prices while maintaining quality standards. This commitment to localisation demonstrates a deep understanding of the Indian market and its unique requirements. Beyond product and channel strategies, Decathlon is building strong community engagement through sports events, workshops, and partnerships with local sports clubs and schools. This approach fosters brand loyalty and promotes a sporting culture. Emphasising value-added services such as equipment rentals, repair services, and personalised sports advice further enhances the customer experience. Decathlon’s commitment to circularity, with initiatives like product buy-back and recycling programs, appeals to environmentally conscious consumers and reinforces its brand values within the competitive sports retail landscape.
Challenges And Opportunities
Decathlon’s path in the Indian market, while promising, is paved with both significant challenges and abundant opportunities. One of the major hurdles is navigating the complex regulatory landscape, which can vary significantly from state to state. Obtaining necessary permits and approvals can be time-consuming and bureaucratic, potentially delaying expansion plans. Furthermore, infrastructure limitations, particularly in smaller cities and rural areas, pose logistical difficulties for efficient supply chain management. These challenges demand a robust and adaptable operational strategy. However, these challenges are counterbalanced by immense opportunities. The increasing adoption of digital technologies across India provides a significant avenue for Decathlon to expand its reach and engage with customers through e-commerce platforms and digital marketing. The growing popularity of fitness fads and sports activities among the younger generation presents a vast, untapped market for sports retail. Decathlon can capitalise on this trend by offering a diverse range of products and services that cater to the evolving needs and preferences of Indian consumers. Moreover, the “Make in India” initiative offers Decathlon the opportunity to establish local manufacturing facilities, reduce costs, and create employment opportunities. Another opportunity lies in embracing sustainability and circularity. As environmental awareness grows among Indian consumers, Decathlon’s commitment to eco-friendly practices, such as using recycled materials and offering product repair services, can resonate strongly with its target audience. The company can further strengthen its brand image by actively promoting sustainable sporting habits and supporting environmental conservation initiatives. By addressing both the challenges and opportunities strategically, Decathlon can solidify its position as a leading player in the Indian sports retail market and contribute to the growth of the sporting culture in the country.
Competitive Landscape
The Indian sports retail sector is a dynamic arena with a mix of international and domestic players vying for market share. Decathlon faces stiff competition from established Indian brands like Reliance Retail’s Trends, Lifestyle, and Shoppers Stop, which have a strong understanding of local consumer preferences and well-established distribution networks. These retailers often offer a wider range of apparel and footwear brands, catering to diverse fashion sensibilities alongside sporting goods. International competitors such as Adidas, Nike, and Puma also hold significant positions in the Indian market. They leverage their global brand recognition and premium product offerings to attract a segment of consumers willing to pay a premium for quality and performance. These brands often partner with celebrities and sports personalities to enhance their brand image and appeal to aspirational consumers. Decathlon distinguishes itself through its focus on offering high-quality, affordable sports equipment and apparel across a wide range of sports, targeting a broader demographic. The rise of e-commerce has further intensified the competitive landscape, with online platforms like Amazon, Flipkart, and Myntra offering a vast selection of sports goods from various brands. Decathlon needs to effectively compete in the digital space by providing a seamless online shopping experience, competitive pricing, and efficient delivery services. The company’s commitment to “make in India” initiative and “circularity” initiatives can further differentiate it from competitors by appealing to environmentally conscious consumers and offering locally relevant products. The key to success in this competitive environment lies in understanding the nuances of the “Indian market”, adapting to evolving consumer preferences, and offering a compelling value proposition that balances quality, affordability, and sustainability.

June 5, 2025
India uk foreign office consultations bolster strategic ties

India uk foreign office consultations bolster strategic ties

India and the UK have reaffirmed their commitment to a stronger bilateral partnership following recent foreign office consultations. These discussions served as a platform to review the comprehensive strategic partnership, identifying areas for enhanced collaboration and setting the stage for future joint initiatives. Both nations expressed a shared desire to deepen cooperation across various sectors, reflecting the mutual importance placed on the relationship.

The consultations highlighted the increasing convergence of interests between India and the UK on a range of global issues. Officials engaged in productive dialogue, exchanging perspectives on regional security, multilateral cooperation, and emerging challenges. This commitment to open communication underscores the importance both countries place on their ability to navigate complex international landscapes together. The dialogue also emphasized the mutual benefits of increased strategic exports and technology cooperation.
Key Discussion Points
The foreign office consultations centred around several key areas crucial to the India-UK relationship. Discussions involved strengthening cooperation in multilateral forums, with both sides reiterating their commitment to upholding international law and promoting a rules-based global order. Counter-terrorism efforts were also a significant focus, with both nations pledging to enhance intelligence sharing and collaborative measures to combat the threat of terrorism in all its forms. Officials also addressed regional security concerns, exchanging views on developments in their respective neighbourhoods and exploring avenues for joint initiatives to promote stability.

Climate change featured prominently in the dialogue, reflecting the shared commitment of India and the UK to addressing this global challenge. Both sides explored opportunities for collaboration on renewable energy, sustainable development, and climate finance. Furthermore, the discussions encompassed cooperation in the Indo-Pacific region, with both countries emphasizing the importance of maintaining freedom of navigation and promoting inclusive growth and security. The India-UK partnership aims to contribute to a stable and prosperous Indo-Pacific.

Beyond these broad themes, the foreign office consultations also addressed specific areas for enhanced collaboration. These included promoting educational exchanges, fostering cultural understanding, and strengthening people-to-people ties. Both India and the UK recognise the importance of nurturing these connections to build a deeper and more resilient partnership for the future. Increased strategic exports and technology cooperation were also identified as vital components of the economic partnership, driving innovation and creating new opportunities for growth in both countries.
Defence And Security Cooperation
Defence and security cooperation emerged as a central pillar of the India-UK strategic partnership during the foreign office consultations. Both sides expressed a firm commitment to deepening collaboration in these critical areas, recognising the shared security challenges they face in a complex global environment. Discussions focused on enhancing military-to-military engagement through joint exercises, training programmes, and personnel exchanges. This increased interaction aims to improve interoperability and build mutual understanding between the armed forces of both nations.

Maritime security in the Indo-Pacific region was a key area of focus, with both India and the UK reaffirming their commitment to maintaining a free, open, and inclusive maritime domain. They acknowledged the importance of safeguarding sea lanes of communication and ensuring the peaceful resolution of maritime disputes, in accordance with international law. The dialogue included discussions on potential joint maritime exercises and information sharing to enhance maritime domain awareness and promote regional stability.

Furthermore, the foreign office consultations explored opportunities for enhanced defence industrial cooperation. Both countries recognised the potential for collaboration in defence technology development and manufacturing, with a focus on promoting technology cooperation and strategic exports. Discussions covered potential joint ventures, technology transfers, and co-production initiatives, aiming to strengthen India’s defence manufacturing capabilities and foster innovation in the defence sector. The India-UK partnership seeks to leverage the strengths of both nations to enhance their defence capabilities and contribute to regional security.
Trade And Investment Opportunities
The India-UK partnership is poised to unlock significant trade and investment opportunities, building upon the existing robust economic ties. The recent foreign office consultations underscored the commitment of both nations to deepen their economic engagement, setting ambitious targets for future growth. Discussions centred on streamlining trade procedures, reducing barriers to investment, and fostering a more conducive environment for businesses to thrive.

A key focus of the dialogue was the ongoing negotiations for a comprehensive Free Trade Agreement (FTA). Both sides expressed optimism about the progress made so far and reiterated their determination to conclude a mutually beneficial agreement that will unlock significant economic potential. The FTA is expected to boost trade in goods and services, promote investment flows, and create new jobs in both countries. The India-UK partnership aims to establish a modern and ambitious trade framework that reflects the evolving needs of their economies.

Beyond the FTA, the foreign office consultations also explored sector-specific opportunities for enhanced collaboration. These included renewable energy, healthcare, technology, and infrastructure. Both India and the UK recognise the potential for joint ventures and investment partnerships in these sectors, leveraging their respective strengths and expertise. The discussions highlighted the importance of promoting innovation, facilitating technology cooperation, and creating a level playing field for businesses to compete.

The consultations also addressed the importance of promoting strategic exports and technology cooperation. Both sides recognised the potential for enhanced collaboration in areas such as defence, aerospace, and cybersecurity. The India-UK partnership aims to facilitate technology transfers, promote joint research and development, and create new opportunities for businesses to participate in global value chains. These efforts are expected to drive innovation, create high-skilled jobs, and strengthen the economic resilience of both countries. The dialogue also emphasized the importance of supporting small and medium-sized enterprises (SMEs) to access new markets and participate in global trade.

June 4, 2025