Current Affairs - Economy

HDFC Capital Advisors partnered with the International Finance Corporation (IFC) to launch the $1 billion H-DREAM Fund, aimed at financing green affordable housing projects in India. IFC, a member of the World Bank Group, has invested $150 million as the anchor, with the remaining $850 million expected from other institutional investors. Managed by HDFC Capital, the fund focuses on promoting sustainable construction practices while addressing India’s housing shortage. By targeting affordable and mid-income housing that meets green building norms, the initiative supports climate resilience, energy efficiency, and urban development in line with the United Nations Sustainable Development Goals.

On August 2, 2025, India’s Unified Payments Interface (UPI) set a new benchmark by crossing 707 million daily transactions, highlighting the country’s accelerating digital payments ecosystem. This growth reflects widespread adoption across both urban and rural areas, with increasing usage among small vendors, large retailers, and consumers alike. The National Payments Corporation of India (NPCI) has indicated that UPI now handles around 85% of all digital transactions in India and nearly half of global real-time digital payments. This surge aligns with the Indian government’s goal of reaching 1 billion daily transactions, underlining India’s leadership in digital financial innovation and inclusion.

In July 2025, India’s GST collections reached ₹1.96 lakh crore, reflecting a 7.5% increase from the same month in the previous year. This growth was primarily driven by strong performance in both imports and domestic transactions. Although the net revenue growth was only 1.7% due to a surge in refunds, the gross collection increase remained significant. The 7.5% rise highlights the continued resilience of the economy in terms of tax compliance and consumption patterns. This figure does not represent regional or net growth numbers, which are often impacted by other variables like refunds or state-specific performance.

Donald Trump imposed a 25% tariff on Indian goods exported to the United States, effective from August 1, 2025. This move marks a significant escalation in trade tensions between the two countries. Trump justified the decision by citing India's high tariff barriers and ongoing military and energy ties with Russia during the Ukraine conflict. Alongside the tariff, a penalty was also announced for India's continued imports of Russian oil and weapons. The tariff decision followed a temporary 90-day suspension period and reflects growing geopolitical friction as well as trade-related disagreements between India and the US, potentially affecting key export sectors.

The International Monetary Fund (IMF) has revised India’s GDP growth forecast upward to 6.4% for both 2025 and 2026. This update reflects improved global financial conditions, a weaker US dollar, and reduced trade pressures due to lower-than-expected global tariffs. These favourable external factors, combined with India’s strong domestic demand and economic reforms, have positioned it as the fastest-growing major economy in the world. The IMF’s projection, calculated on a calendar year basis, indicates a resilient economic trajectory for India despite global uncertainties, reinforcing its attractiveness as a destination for foreign investment and a model of emerging market stability.