Current Affairs - Economy

The Union Cabinet, under the leadership of Prime Minister Narendra Modi and the Cabinet Committee on Economic Affairs, has approved the Fair and Remunerative Price (FRP) for sugarcane at Rs. 355 per quintal for the 2025–26 season. This price is set for a basic recovery rate of 10.25 per cent. The FRP is the minimum price that sugar mills are required to pay to sugarcane farmers and plays a crucial role in protecting farmer interests, especially in a country like India, which is the world's largest producer and consumer of sugar.

India is set to introduce a significant policy reform by allowing foreign companies to acquire up to a 49% stake in its nuclear power sector. This marks a major shift in one of the country’s most tightly controlled industries, aimed at scaling up nuclear energy as part of its clean energy transition. The move is intended to reduce dependency on coal and meet carbon emission reduction targets. To enable this, amendments to the Civil Liability for Nuclear Damage Act, 2010 and the Atomic Energy Act, 1960 are being proposed, with expected discussion and passage in the Monsoon Session of Parliament in July 2025.

The World Bank has adjusted its projection for India’s GDP growth for the fiscal year 2025-26, lowering it from an earlier estimate of 6.7% to 6.3%. This downgrade is attributed to various factors, including weaker private investment and a reduction in public capital expenditure. Additionally, broader regional economic struggles in South Asia, influenced by political and financial instability in neighbouring countries, have contributed to this more cautious outlook. The revision reflects growing concerns about both global and domestic economic environments impacting India’s near-term growth potential.

A 1% Tax Collected at Source (TCS) has been introduced on luxury goods priced above ₹10 lakh, as per the provisions of the Finance Act, 2024. This includes high-end items such as luxury watches, designer handbags, and yachts. The new tax is effective from April 22 and aims to increase oversight of high-value transactions while promoting financial transparency. It also mandates that sellers comply with TCS regulations and requires buyers to undergo stricter KYC procedures. This initiative is a part of the government’s broader strategy to track and regulate luxury spending in the economy.

India imposed a 12% safeguard duty on steel imports specifically in response to fears of dumping linked to China. This action was taken after high U.S. tariffs on Chinese goods led to a surge in steel imports into India, raising concerns about market disruption and injury to the domestic steel sector. The Directorate General of Trade Remedies found evidence that supported these concerns, prompting the protective measure. The goal of the duty is to shield Indian manufacturers from unfair pricing practices and maintain stability in the domestic steel industry.