Current Affairs - Economy

Chabahar Port, located in Iran’s Sistan-Baluchistan region, is India’s only deep-sea port with direct open-ocean access outside the Strait of Hormuz. Developed under the 2016 Chabahar Agreement between India, Iran, and Afghanistan, it offers a vital trade route to Afghanistan and Central Asia, bypassing Pakistan. The port enhances India’s regional connectivity via the International North-South Transport Corridor (INSTC), supports humanitarian aid, and strengthens strategic presence in the Indian Ocean. It also counters China’s Gwadar Port and BRI influence, making it central to India’s economic and geopolitical ambitions despite challenges like US sanctions.

India’s overall unemployment rate in August 2025 stood at 5.1%, reflecting an improvement in both urban and rural employment conditions. Male unemployment dropped to 5.0%, reaching a five month low, while rural unemployment fell significantly from 5.1% in May to 4.3% in August. A notable highlight was the rise in female labour force participation, which climbed from 32% in June to 33.7% in August. These numbers suggest that the economy was stabilizing with more job opportunities emerging across regions, marking a positive trend in employment and workforce engagement during that period.

India’s retail inflation, measured by the Consumer Price Index (CPI), stood at 2.07% in August 2025, rising from 1.61% in July. Even with this uptick, the figure remained well below the Reserve Bank of India’s 4% target, offering relief to households and leaving room for accommodative monetary policy. The increase was largely driven by higher prices in categories like vegetables, meat, fish, oil, fats, and personal care, even though food inflation overall remained in deflation for the third straight month. With inflation still comfortably within RBI’s tolerance band, the environment supports economic growth while maintaining price stability.

Fitch Ratings revised India’s FY25 GDP growth forecast upward to 6.9%, an increase from its earlier estimate of 6.5%. This revision reflects strong domestic demand, resilient private sector activity, and the positive impact of GST reforms. Consumer spending and supportive financial conditions, including stable interest rates and liquidity, have strengthened India’s economic outlook despite global trade challenges. GST reforms are expected to further enhance compliance, lower costs of doing business, and stimulate consumption. Fitch also projects India’s economy will maintain robust momentum in the medium term, averaging 6.3% growth by FY27, keeping the country ahead of global growth trends.

The UPI–UPU Integration was launched in Dubai during the 28th UPU Congress by Jyotiraditya Scindia. This integration connects India’s Unified Payments Interface (UPI) with the Universal Postal Union (UPU) platform, making global remittances faster, safer, and more affordable. By linking the systems, India aims to enhance financial inclusion, strengthen cross-border digital transactions, and reduce the cost of sending money internationally. Additionally, India pledged USD 10 million towards innovation, e-commerce, and digital payments. This initiative also aligns with the United Nations’ sustainable development goal of reducing global remittance costs to below 3% by 2030, thus empowering millions of migrant workers and their families.