Current Affairs - Economy

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.

In March 2025, India’s core infrastructure sector output recorded a year-on-year growth of 3.8%, showing a marginal rise from the 3.4% growth in February 2025. This growth was primarily fueled by a sharp increase in electricity generation, spurred by early summer conditions and widespread heat waves. The core sector includes eight major industries that account for over 40% of the Index of Industrial Production (IIP). While this growth was lower than the 6.3% seen in March 2024, it still reflects positive momentum, especially in the power, steel, and cement sectors, supported by higher government and private sector investments in infrastructure.

In the financial year 2024-25 (FY25), India’s leather and non-leather footwear exports experienced a notable growth of 25%, totalling $5.7 billion. This surge reflects strong demand and performance in the sector, supported by initiatives and market expansion efforts. The Council for Leather Exports (CLE) has projected that this upward trend will likely continue, with expectations of crossing the $6.5 billion threshold in FY26. The 25% growth rate underscores the competitiveness and rising global footprint of India’s leather industry, making it a key contributor to the country’s export economy.

In March 2025, India’s pharmaceutical exports experienced a remarkable YoY surge of 31.21%, reaching $3.68 billion compared to $2.80 billion in March 2024. This made March the strongest-performing month of FY25 in terms of export growth. The impressive increase was driven by a shortage of generic prescription drugs in the US, strategic diversification into new markets, and urgency to ship ahead of a proposed US tariff hike, which was later paused. Despite global economic and logistical challenges, this surge contributed significantly to India surpassing its annual pharmaceutical export target.