Current Affairs - Economy

On July 2, 2025, the Ministry of Road Transport and Highways (MoRTH) implemented a major change by reducing toll charges by up to 50% on specific highway stretches that include expensive infrastructure such as bridges, tunnels, flyovers, and elevated roads. Previously, tolls were calculated at ten times the rate per kilometre for such structures, making travel costly. Under the new system, toll will be calculated based on the lesser of two formulas—either ten times the structure length plus the rest of the highway or five times the total stretch—effectively slashing the toll by half in many cases. This reform aims to ease financial pressure on travellers and improve highway usage.

At the end of March 2025, India’s external debt stood at $736.3 billion, which amounted to 19.1% of the country’s GDP, as reported by the Reserve Bank of India. This marked an increase from the previous year, when the external debt was $668.8 billion or 18.5% of GDP. External debt includes borrowings from foreign sources such as international financial institutions, foreign governments, and private commercial entities. The rise in the external debt-to-GDP ratio reflects changes in both borrowing levels and overall economic performance. Monitoring this ratio is important for assessing a country's debt sustainability and economic health in the global financial system.

India’s external debt rose by 10% year-on-year to $736.3 billion as of March 2025, according to the Reserve Bank of India. This reflects an increase of $67.5 billion from the previous year's figure of $668.8 billion. The growth was influenced by factors such as global financial conditions, increased international borrowing by corporations, and currency valuation changes, particularly the appreciation of the US dollar. The rise in external debt also led to a slight increase in the debt-to-GDP ratio from 18.5% to 19.1%, highlighting concerns over macroeconomic vulnerability and the growing role of external financing in India’s economic framework.

India's foreign direct investment (FDI) saw a notable rise in April 2025, reaching $8.8 billion, which represents a 23% increase compared to the same period in the previous year. This growth contributed positively to the Reserve Bank of India's foreign exchange reserves, even though other external inflows like non-resident deposits showed a slowdown. The resilience of India’s external sector, backed by strong FDI and external commercial borrowings, played a key role in strengthening forex reserves, which stood at $698.95 billion in June. The 22% figure directly quantifies the FDI inflow growth year-over-year.

India’s coffee exports have experienced a substantial 125% growth over the past decade, rising from $800 million in 2014–15 to $1.8 billion in 2024–25. This impressive increase is a result of the Coffee Board of India’s targeted strategies, including digital transformation, promotion of value-added products, and support for sustainable farming. The introduction of financial incentives and machinery subsidies further empowered exporters, helping to boost output and quality. Additionally, India has expanded its presence in international markets, with Europe, the Middle East, and East Asia emerging as key destinations. This growth underscores India's evolving role in the global coffee trade.