Daily News - Thursday, 24 April 2025

US solar tariffs on four SE Asian nations may aid India's exports (Financial Express)

The US has imposed prohibitive tariffs—up to 3,521%—on solar imports from Cambodia, Vietnam, Malaysia, and Thailand, opening new export opportunities for Indian solar manufacturers, though experts caution that diverting supply to the US could create shortfalls in India’s domestic market, where capacity is only just becoming self-sufficient. With Chinese exports facing restrictions and the US seeking alternative suppliers, Indian solar exports to North America, Europe, and MENA are expected to surge, backed by domestic incentives like the Approved List of Models and Manufacturers and Production Linked Incentive (PLI) schemes. Industry leaders note that unless similar trade actions are imposed on India, the country’s solar sector is well-positioned to capitalize on shifting global supply chains and rising demand.

⁠First round of India-US BTA talks begins in Washington (Financial Express)

India and the US have commenced their first in-person chief negotiators’ meeting in Washington to expedite a bilateral trade agreement (BTA), aiming to finalize terms within a 90-day pause in reciprocal tariffs, during which the US has suspended an announced 26% additional duty on Indian goods. The talks focus on product coverage for tariff reductions, schedules for easing import duties, and regulatory matters, with India targeting high US tariffs on items like tobacco and peanut butter, while the US demands better market access in agriculture, autos, and trade balance. In FY24-25, India recorded an 11.6% rise in merchandise exports to the US at $86.51 billion and a 7.4% increase in imports at $45.3 billion, resulting in a $41.21 billion trade surplus, prompting discussions on India potentially increasing imports of US petroleum and defence equipment to help address the deficit.

India, Saudi to work on setting up two oil refineries (mint)

⁠India and Saudi Arabia have agreed to jointly establish two oil refineries in India, advancing Saudi Arabia’s $100 billion investment commitment in key sectors like energy, petrochemicals, infrastructure, and fintech, as reaffirmed during PM Modi’s visit to Jeddah on 22 April 2025. The move aligns with India’s energy security strategy amid rising demand, complementing Bharat Petroleum’s greenfield refinery project in Andhra Pradesh. Additionally, the India-Saudi Strategic Partnership Council (SPC) decided to form new Ministerial Committees on Defence and Tourism Cooperation, while reviewing collaboration across trade, technology, security, agriculture, and cultural exchange. 

World Bank lowers India’s FY26 growth forecast to 6.3% (mint)

⁠The World Bank has revised India’s FY25 growth forecast downward by 0.4 percentage points to 6.3%, citing weak private investment, underwhelming public capital expenditure, global economic slowdown, and policy uncertainty; this follows the IMF’s downgrade of India’s GDP projection to 6.2% from 6.5%. While private consumption may get a lift from tax cuts and improved public investment implementation, exports are likely to suffer due to weaker global demand and shifting trade policies. The World Bank also noted South Asia’s regional growth would decelerate to 5.8% in 2025 (down 0.4 points from earlier forecasts), with government revenues in the region averaging just 18% of GDP (compared to 24% for other developing economies), emphasizing the need for stronger domestic revenue mobilization. 

Watches, handbags, paintings, other luxury items to attract 1% tax collected at source (The Indian Express)

Effective April 23, 2025, a 1% Tax Collected at Source (TCS) will be levied at the point of sale on high-value luxury items—such as wristwatches, handbags, antiques, sculptures, sunglasses, home theatre systems, shoes, sportswear, and horses—priced above Rs 10 lakh, as per a recent Income Tax Department notification. Originally proposed in the July 2024 Budget and enabled by the Finance Act, 2024 through an amendment to Section 206C, the measure aims to track high-value discretionary spending and align it with taxpayers’ income profiles to curb evasion and broaden the tax base. While the luxury goods sector may face transitional compliance and documentation challenges, the government anticipates improved regulatory oversight, increased formalisation, and stricter KYC enforcement.