Tag: India

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India, Japan unite for UNICORN naval project

India and Japan have launched their first joint defence technology project by agreeing to co-develop the UNICORN (Unified Complex Radio Antenna) system for Indian Navy warships.

The advanced antenna combines multiple communication and surveillance systems into a single integrated mast, helping ships become harder to detect on enemy radar while improving operational efficiency.

The project will be jointly developed with Japanese technology and manufactured in India, marking a major step in defence cooperation between the two countries. Announced during the India-Japan summit in New Delhi, the agreement reflects growing strategic trust and supports a shared vision for a secure, stable and rules-based Indo-Pacific.

The partnership also signals closer collaboration in advanced defence technologies and maritime security.

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Beyond

June GST collections rises by 13.9%

India’s gross Goods and Services Tax (GST) collections rose to ₹1.94 lakh crore in June, registering a 13.9 per cent year-on-year growth, reflecting robust domestic demand, higher imports and continued improvement in tax compliance.

The increase was largely driven by healthy economic activity across sectors. GST revenue from domestic transactions recorded strong growth, indicating sustained consumer spending and business momentum. Meanwhile, GST collected on imports stood at ₹60,038 crore, highlighting the steady pace of overseas trade and its contribution to government revenues.

After adjusting for refunds, net GST collections also posted a healthy increase, underlining the resilience of the Indian economy despite an uncertain global environment. The latest figures suggest that consumption and business activity remained strong through June, providing another positive signal for economic growth.

The latest numbers are also expected to provide the government with greater fiscal room to continue investing in infrastructure, public services and development projects while maintaining fiscal discipline.

Economists said the consistent rise in GST collections reflects the expanding formal economy, better compliance by taxpayers and the growing use of digital systems such as e-invoicing and online tax filing. These reforms have improved transparency and helped strengthen revenue collections over the past few years.

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India’s exports hit six-month high in May

India’s trade deficit widened in May even as exports recorded their strongest performance in six months, reflecting the growing impact of higher imports on the country’s external trade balance.

Merchandise exports increased 18% from a year earlier to about $43.4 billion, supported by healthy demand for engineering products, electronics, chemicals and pharmaceuticals. The rise marked the highest monthly export figure in six months and signalled improved momentum in overseas shipments.

Despite the strong export performance, imports rose even more sharply to nearly $70 billion. Increased purchases of crude oil, gold, electronic goods and industrial raw materials pushed import bills higher and expanded the trade deficit to approximately $26.4 billion.

For policymakers, the figures present a mixed picture. On one hand, stronger exports point to resilience among Indian manufacturers and exporters. On the other, the widening trade gap highlights India’s dependence on imported commodities and consumer goods.

The export sector has benefited from improved global demand and efforts to diversify markets. Exporters have also expanded shipments in sectors where India enjoys a competitive advantage, helping offset uncertainties in parts of the global economy.

Economists noted that a higher trade deficit does not necessarily signal weakness if it is accompanied by strong economic growth. However, sustained increases in imports could influence the country’s current account position and currency dynamics.

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Retail inflation edges up to 3.93% in May

India’s retail inflation accelerated to 3.93 per cent in May from 3.16 per cent in April, driven largely by an increase in food prices, according to official data released on Thursday.

The rise marks the first increase in consumer inflation in several months, although the figure remains below the Reserve Bank of India’s medium-term target of 4 per cent. The latest reading was also lower than market expectations of a sharper increase, offering some relief to policymakers and investors.

Food prices were the main contributor to the uptick, with inflation in key categories such as vegetables and other essential commodities showing signs of firming up after recent moderation. Economists said the trend reflects lingering supply-side pressures and seasonal factors affecting food costs.

Despite the increase, inflation remains well within the RBI’s comfort zone, supporting the central bank’s focus on boosting economic growth. Earlier this month, the RBI lowered interest rates and adopted a more growth-oriented policy stance amid easing inflationary pressures.

However, economists cautioned that risks remain. Rising global crude oil prices, weather-related disruptions and fluctuations in food supplies could exert upward pressure on prices in the coming months. The progress of the monsoon season will be closely watched, given its impact on agricultural output and food inflation.

For businesses and consumers, the data signals a relatively stable inflation environment, though concerns over input costs and commodity prices persist. Analysts said a sustained rise in food inflation could influence consumption patterns and affect household spending.

The latest inflation figures are unlikely to trigger an immediate shift in monetary policy, but they reinforce the need for continued monitoring of price trends. Markets will now look to upcoming economic data for clues on whether inflation remains contained or begins to move higher in the second half of the year.

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US overtakes Gulf as India’s top gas supplier

The United States has emerged as India’s largest supplier of liquefied natural gas (LNG) and liquefied petroleum gas (LPG), overtaking traditional Gulf exporters as disruptions in West Asia reshape global energy trade.

The change comes after conflict involving Iran affected shipping routes through the Strait of Hormuz, a key passage for energy supplies from the Gulf. India depends heavily on the route for its LNG and LPG imports, prompting buyers to seek alternative sources as supply uncertainty increased.

According to industry data, US shipments of LNG and LPG to India rose sharply in May. American LNG exports accounted for more than 40 per cent of India’s monthly LNG requirements, while LPG supplies from the US exceeded the combined volumes received from major Gulf suppliers.

Energy analysts say the shift reflects both immediate supply concerns and a broader effort by India to diversify its energy sources. For years, Gulf nations such as Saudi Arabia, Qatar, the UAE and Kuwait dominated India’s gas imports. However, recent geopolitical tensions have highlighted the risks of relying heavily on a single region.

The growing energy partnership between India and the US had already been gaining momentum before the latest disruptions. Indian state-owned refiners signed long-term LPG supply agreements with US producers, helping strengthen trade ties between the two countries.

Experts note that importing gas from the US is generally more expensive than sourcing it from the Gulf because of longer shipping distances. Despite the higher costs, securing reliable supplies has become a priority amid ongoing uncertainty in West Asia.

The development is expected to deepen energy cooperation between New Delhi and Washington while improving India’s energy security. However, analysts believe Gulf countries will remain important suppliers once regional shipping conditions stabilize.

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Beyond

India puts Starlink approval on hold for security reasons

The Indian government has reportedly put on hold the final approval process for Starlink, the satellite internet service operated by Elon Musk’s SpaceX, amid growing security concerns linked to its reported use during the ongoing conflict involving Iran.

According to reports, authorities are reassessing Starlink’s proposed operations in India after concerns emerged about how satellite-based internet services can be used in conflict zones and sensitive security situations. The review is focused on ensuring that India’s national security interests are adequately protected before commercial operations are allowed to begin.

Starlink has been seeking regulatory clearances to launch its satellite broadband services in India and has already secured several key approvals in recent months. The company aims to provide high-speed internet connectivity, particularly in remote and underserved regions where conventional broadband infrastructure remains limited.

However, recent reports highlighting the use of satellite communication networks in conflict-affected areas have prompted Indian authorities to take a closer look at the technology’s security implications. Officials are understood to be examining issues related to user verification, lawful interception capabilities, data access, emergency controls and the ability of government agencies to monitor communications when required under Indian law.

The review comes at a time when governments worldwide are debating the regulatory challenges posed by satellite internet services. Unlike traditional telecom networks that operate through ground-based infrastructure, satellite broadband systems function through constellations of satellites orbiting the Earth, creating new questions around jurisdiction, oversight and security compliance.

Industry experts note that while satellite internet services have the potential to transform connectivity in rural and remote areas, regulators are increasingly focused on balancing technological innovation with national security requirements.

The reported pause does not necessarily indicate a rejection of Starlink’s India plans. Instead, it appears to be part of a broader review process aimed at ensuring that all operational, legal and security safeguards are in place before commercial deployment.

For now, Starlink’s entry into the Indian market remains under regulatory examination.

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Q4 current account surplus stands at 0.7% of GDP

India recorded a current account surplus of $7.1 billion, or 0.7% of GDP, in the fourth quarter of FY26, reflecting the strength of the country’s services exports and remittance inflows despite a wider merchandise trade deficit.

According to data released by the Reserve Bank of India (RBI), the surplus marked an improvement in India’s external sector performance during the January-March quarter. The positive balance was primarily driven by robust earnings from services exports and steady inflows of money sent home by Indians working abroad.

Services exports, particularly in information technology, business services, consulting and financial services, continued to remain a key contributor to foreign exchange earnings. India’s globally competitive services sector helped cushion the impact of a growing trade gap in goods.

Remittances also remained a major source of support. Inflows from overseas Indians contributed significantly to the current account balance, highlighting the continued importance of the Indian diaspora to the country’s external finances.

The merchandise trade deficit widened during the quarter as imports outpaced exports. Higher imports of crude oil, electronics, machinery and other goods contributed to the increase. However, the strong performance of the services sector and remittances more than compensated for the trade imbalance.

Economists said the surplus demonstrates the resilience of India’s external sector despite global economic uncertainties. The country’s diversified sources of foreign exchange earnings have helped maintain stability even as international trade conditions remain challenging.

A current account surplus occurs when the value of exports of goods and services, along with income and transfer receipts, exceeds the value of imports and outgoing payments. Such a surplus generally supports the domestic currency and strengthens foreign exchange reserves.

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Elon Musk flags India’s falling birth rate concerns

India’s fertility rate has fallen below the replacement level of 2.1 children per woman, drawing attention from billionaire entrepreneur Elon Musk. Reacting to a social media post highlighting the trend, Musk said the decline was particularly notable among educated populations.

According to recent data, India’s fertility rate has dropped to around 1.9, signalling a slowdown in population growth. These falling birth rates are linked to factors such as urbanisation, higher education levels, delayed marriages and greater workforce participation by women.

While lower fertility can ease pressure on resources, demographers warn that sustained declines could eventually lead to an ageing population and labour shortages, challenges already being faced by several developed nations.

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India plans to bring E85 fuel to cut oil imports

India has introduced E85 fuel, a new blend containing 85% ethanol and 15% petrol, as part of its efforts to reduce crude oil imports and promote cleaner transport. The fuel will be priced around ₹20 per litre cheaper than regular petrol.

The move is part of the government’s broader ethanol blending programme aimed at improving energy security and reducing dependence on fossil fuels. Officials say greater use of ethanol can help lower India’s fuel import bill while supporting farmers and the domestic biofuel industry.

E85 can only be used in flex-fuel vehicles, which are designed to run on higher ethanol blends. Several automobile manufacturers are preparing to launch flex-fuel models in India as the government pushes for alternative fuel options.

The government believes E85 will help reduce vehicle emissions because ethanol is a renewable fuel produced from agricultural feedstock such as sugarcane. Higher ethanol use is expected to lower the transport sector’s carbon footprint compared to conventional petrol.

India has made significant progress in ethanol blending in recent years and has achieved key targets ahead of schedule. The launch of E85 is seen as the next step in expanding the country’s biofuel ecosystem.

The introduction of E85 aligns with India’s wider strategy to diversify energy sources through biofuels, electric vehicles and other cleaner alternatives. The government hopes the new fuel will contribute to lower emissions, reduced fuel costs and greater energy independence in the years ahead.

Experts say the success of E85 will depend on the availability of flex-fuel vehicles and the expansion of fuel distribution infrastructure. Consumer awareness and access to refuelling stations will also play an important role in driving adoption.

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Corporate

South Korea tops India as World’s sixth-largest stock market

South Korea has overtaken India to become the world’s sixth-largest stock market by market capitalisation, driven by a strong rally in technology and semiconductor stocks.

Statistical reports show the combined value of companies listed in South Korea has crossed $5 trillion, ahead of India’s market capitalisation of about $4.8 trillion. The shift has pushed India to seventh place in global stock market rankings.

The rise has largely been powered by the global artificial intelligence boom. South Korean chipmakers such as Samsung Electronics and SK Hynix have attracted strong investor interest as demand for AI-related chips and data-centre infrastructure continues to grow.

Indian markets, meanwhile, have faced pressure from weaker corporate earnings, foreign investor outflows and a weaker rupee. The absence of major AI-focused companies in benchmark indices has also limited gains compared with technology-heavy markets.

The latest development comes shortly after Taiwan moved ahead of India in global market rankings, causing India to slip from fifth to seventh position within a relatively short period.

The rankings underline the growing impact of AI-driven investments on global markets, with countries that have strong semiconductor industries benefiting the most from the ongoing technology boom.

Despite the decline, analysts remain positive about India’s long-term outlook. They point to strong economic growth, rising domestic participation in equities and continued infrastructure investment as key strengths supporting future market expansion.

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