India’s Income Tax Department is moving to ensure compliance among cryptocurrency investors, contacting thousands of individuals who have failed to declare their cryptocurrency transactions in their income tax returns. The initiative is part of a broader strategy to address potential tax evasion in the rapidly-growing digital asset sector.

With the rise of cryptocurrencies and non-fungible tokens (NFTs) – classified as ‘Virtual Digital Assets’ – the Indian government has toughened up the country’s tax regime. Gains from the transfer of these assets are taxed at a flat rate of 30%, irrespective of whether they are considered business income or capital gains. In addition, a 1% Tax Deducted at Source (TDS) is applied if the transaction values exceed certain thresholds. This ensures that the tax obligations are met upfront, reducing the chances of evasion.

The Income Tax department’s recent communication targets assessment years 2023-24 and 2024-25, focusing on taxpayers who might have omitted or misdeclared cryptocurrency income. The department said the new drive is part of its NUDGE campaign, which aims to remind taxpayers of their obligations under a ‘trust taxpayers first’ philosophy.

Official sources described the number of such individuals as ‘significant’, indicating a widespread issue of non-compliance. The campaign is designed to be non-intrusive, yet effective in guiding taxpayers toward fulfilling their tax responsibilities.

Jignesh Shah, a partner at Bhuta Shah & Co LLP, commented: “In India, the crypto investments – cryptocurrencies, NFTs and other digital tokens – are governed under the provisions relating to Virtually Digital Assets (VDAs). The provisions mandate a uniform tax rate of 30% (plus applicable surcharge and cess) irrespective of the nature of the income earned by a taxpayer.” This uniformity in taxation simplifies the process for both taxpayers and the authorities, ensuring clarity and consistency in tax compliance, he said.

Shah said the tax regulations also stipulate that any VDAs received as gifts are taxable in the hands of the recipient if the value exceeds Rs 50,000 (around £430) in a financial year. The Income Tax department is conducting data analytics to identify discrepancies between declared income and TDS returns filed by cryptocurrency exchanges, suggesting that some individuals could face ‘verification or scrutiny’. This proactive approach helps in maintaining transparency and accountability, reinforcing the government’s commitment to a fair tax system.

The tax authority said the measures reflect the government’s broader initiative to curb potential money laundering and unaccounted income through cryptocurrency investments. The current taxation framework does not allow for loss offsets against other income, underscoring the government’s effort to streamline revenue collection from this sector. This ensures that the tax system remains robust and effective in capturing the economic activities associated with digital assets. The government’s vigilance in monitoring compliance is crucial as the digital asset market continues to evolve, it said.

As the digital asset market continues to grow, investors are urged to comply with taxation requirements to avoid penalties. This initiative is the third in the Income Tax department NUDGE series, following previous campaigns on foreign asset declarations and the withdrawal of bogus deduction claims.

The government said that by fostering a culture of compliance, the Income Tax department “aims to build trust and ensure that all taxpayers contribute their fair share”.

It added: “The ongoing efforts to educate and guide taxpayers are pivotal in achieving long-term compliance and fiscal responsibility. The [tax authority’s] strategy not only focuses on enforcement but also emphasizes the importance of taxpayer education, which is crucial in a rapidly changing financial landscape.”

 

India’s 6.5% GDP growth in FY25 ‘creditable’ in face of global headwinds

India has managed to maintain healthy economic growth despite global economic and political volatility, according to India’s Chief Economic Adviser, V Anantha Nageswaran.

Speaking to news agency ANI, Nageswaran said: “The global context has become uncertain and complex. Economic and political conditions have turned unfavourable for growth. Given these situations, the Indian economy has maintained a good growth rate in 2024-25 at 6.5%.” For 2025-26, the government projects GDP growth in the range of 6.3%–6.8%.

Nageswaran noted that the gap between India’s growth rate and that of developed economies is now significantly wider than it was during the 2003-08 high-growth phase, when India expanded at 8%-9%.

“To achieve 6.5% on a steady basis in this environment is a creditable achievement. India is poised to maintain that track record,” he said.

The Indian AI market could triple in size to over $17 billion by 2027, driven by increased investments in technology, a burgeoning digital ecosystem and a strong pool of skilled professionals, according to a new study.

India has 16% of the world’s AI talent, placing it behind only the US, reflecting both its demographic advantage and strong STEM education system, according to Boston Consulting Group (BCG) research.

The report, titled ‘India’s AI Leap: BCG Perspective on Emerging Challengers’, said India has a thriving AI ecosystem with over 600,000 AI professionals, 700 million internet users, and a surge of AI start-ups, with over 2,000 launched in the past three years.

“India’s domestic AI market is projected to more than triple to $17 billion by 2027, making it one of the fastest-growing AI economies globally. This momentum is fuelled by rising enterprise tech investments, a thriving digital ecosystem and a robust talent base,” the report said.

It added that India’s public digital infrastructure provides a robust and scalable base for AI integration across various industries. It also said that with a large base of internet users and extensive smartphone adoption, India generates massive volumes of data, which is the used for training AI models.

India is set to create 45 new data centres in 2025, adding to its existing network of 152 centres, as set out in the government’s IndiaAI initiative.

“AI is no longer an option but a business necessity. Indian companies are using it to leapfrog traditional growth curves and compete confidently on the global stage,” said Mandeep Kohli, Managing Director and Partner, BCG India.

“While the hurdle rate for successful deployment is high, the rewards are even higher, and the results speak for themselves. What separates the leaders is not just the tech, but how they manage change, build talent and embed AI into the fabric of their organisation.”

 

Government set to help Indian MSMEs improve export sales

The Indian government is considering formulating a scheme to fund the country’s exporters in registering new products in new markets, Commerce and Industry Minister Piyush Goyal has said.

He added that the entire cost of such registration – especially designed for India’s micro, small and medium-sized enterprises (MSMEs) will be funded by the government.

“I am thinking of coming out with a scheme that any MSME that needs to spend any amount of money to register their products anywhere in the world, particularly for new products, new markets, new exporters, the government will fund the whole cost,” Goyal said while addressing business delegation on an official visit to Switzerland. During the trips the minister held meetings with Swiss leaders and companies to boost trade and investments between the two countries.

This scheme is expected to be part of the Export Promotion Mission (EPM), which was announced in the Budget. It could include include easy credit schemes for MSMEs, e-commerce exporters, facilitation of overseas warehousing and global branding initiatives, to tap emerging export opportunities and strengthen trade tools for small businesses.

The country’s total exports of goods and services have increased to $825bn in 2024-25, up from $778bn in the 2023-2024 fiscal year. MSMEs account for more than 40% of the country’s exports.

Goyal also urged the Indian industry to focus on exporting value-added goods and run campaigns for brand building and marketing. “I would urge you to come with an idea for the government to support (exporters) in brand building, in getting registrations around the world,” he said.

The minister added that a number of Free Trade Agreements (FTAs) have been signed and implemented by India with countries, including the UAE and Australia, to provide greater market access to Indian exporters.

And active negotiations for FTAs are ongoing with countries including Oman and New Zealand, as well as the European Union (EU).

The Chinese government has introduced revised regulations to tackle the scourge of late payments, guaranteeing payments owed to small and medium-sized enterprises (SMEs).

The revised regulation, which took immediate effect and is now in force, will help strengthen the legal protection for private enterprises, mostly SMEs, further optimize the business environment and enhance fair participation in market competition, said market experts and leading company executives.

According to the new regulation, large enterprises are required to pay SMEs within 60 days of delivery of goods or services. Other revisions require detailing work responsibilities, improving supervision and enhancing punishments for illegal activities.

Nie Xianzhu, vice-president of the China Association of Small and Medium Enterprises, said the revised regulation has further raised awareness of the “crippling issues” faced by SMEs. He said: “The problem-oriented and targeted approach will help relieve the capital pressure on SMEs and stimulate their endogenous driving force and vitality.”

Collecting long-overdue payments is a major difficulty hindering the development of SMEs, Nie said, adding that the problem stems from the declining payment capability of enterprises amid a sluggish global economy, lacklustre demand and fiscal pressures at various government levels.

Meanwhile, large enterprises often place payments owed to SMEs low on their funds priority list, Nie added. He said: “In the broader context of pursuing progress while maintaining stability, helping SMEs resolve difficulties is an effective way to stabilize overall growth.”

According to data from the National Bureau of Statistics (NBS), the accounts receivable of major industrial enterprises hit 25.86 trillion yuan ($3.6 trillion) at the end of April, up 9.7% year-on-year, while the average collection period for accounts receivable was 70.3 days, a year-on-year increase of four days.

Li Hongjuan, deputy director of the Private Economy Research Office at the Economic System and Management Institute, which is part of the National Development and Reform Commission, said the revised regulation reflects the government’s strong attention to the issues of arrears owed to SMEs.

“It clarifies the responsibilities of the government and relevant departments, strengthening accountability and coordination,” she said. “Also, it shortens the payment period and standardizes payment practices, addressing the root causes of arrears. It precisely regulates pain points such as hidden contract terms.”

Li said SMEs were an important part of the national economy and social development, serving as a key pillar for stabilizing employment, improving people’s livelihoods and reviving economic growth.

Private companies, mostly SMEs, contribute over 60% of China’s GDP, 70% of technological innovation and 80% of urban employment, NBS data shows.

The government is also taking steps to promote sustainable development in the private sector.

China’s first all-encompassing law focusing on promoting the private economy took effect on May 2025, when the government issued a guideline for stepping up financing support for micro and small enterprises.

Business leaders welcomed Beijing’s intensified efforts to support the development of the private sector, expecting to see more detailed supporting measures to ensure effective implementation.

“The regulation plays a significant role in boosting the confidence of businesses,” said Cheng Shuqing, Party secretary of Beijing-based Pan-China Group.

Ye Lin, a professor at Renmin University of China Law School, called for more efforts to improve the long-term mechanism for resolving SME payment arrears. “More efforts are needed to ensure that the asserting rights of SMEs are not affected during their future business operations,” he said.

 

China to be responsible for 25% of global growth in 2025

China is expected to contribute around a quarter of global growth this year,” according to Marshall Mills, senior resident representative of the International Monetary Fund in China.

In an interview at the 2025 Tsinghua PBCSF Global Finance Forum, Mills said there might be an upward revision of the fund’s 2025 economic growth forecast for China if recent tariff rollbacks and strong first-quarter growth momentum are maintained.

“With these positive developments, there is a potential upside. We’ll have to look at all the factors together and provide an updated forecast in due course,” Mills said, adding that the first-quarter results of China’s economic growth were “a welcome, positive surprise”.

Malaysia is set to become the driving force in shaping a more sustainable and inclusive future for the region, delegates at the recent 46^th ASEAN Summit were told.

According to International Islamic University Malaysia lecturer Prof Dr Zainal Abidin Sanusi, Malaysia’s consistent commitment to green policies and renewable energy initiatives sets it apart as a natural leader for ASEAN’s next phase of development.

“As Chair this year, Malaysia can act as a catalyst for a sustainable development model that is not dependent on the unsustainable frameworks of developed nations,” Zainal Abidin said. “The climate crisis is already here which means ASEAN must act boldly and collectively.”

He also emphasised that ASEAN must move away from fossil fuel-based strategies and toward models that prioritise climate resilience, responsible resource management and social justice.

Under the theme ‘Inclusivity and Sustainability’, the ASEAN 2025 agenda called for long-term, people-centred development, but Zainal Abidin warned that this vision must be translated into tangible policies and actions.

“Without inclusivity, inequality will continue to widen. Without sustainability, progress will be short-lived. Malaysia’s leadership as ASEAN Chair in 2025 is critical to ensuring that today’s growth doesn’t become tomorrow’s burden,” he said.

He added that Malaysia’s domestic policies already reflect this forward-thinking approach. “Initiatives like the National Environmental Policy, Green Economy Framework, New Industrial Master Plan and a strong push for renewable energy underscore its commitment to climate action and environmental governance,” he said.

“With a moderate and balanced foreign policy, Malaysia is seen as a credible bridge between ASEAN and external partners such as the Gulf Cooperation Council (GCC) and China,” he said.

Zainal Abidin further called on Malaysia to champion the environmental, social and governance principles, promote access to education and technology, and elevate the voices of women, youth and local communities in shaping ASEAN policies.

“Malaysia can lead by example in making development and sustainability complementary, not conflicting, strategies,” he said.

Addressing ASEAN 2025, Malaysia’s Prime Minister Anwar Ibrahim Malaysia said the country remained steadfast in facing various global challenges and continues to play a role as the catalyst and leader of regional diplomacy.

He said that although the world is facing various challenges, including geopolitical tensions and trade tariffs, Malaysia remains firmly anchored.

“Malaysia is among the first countries to act in protecting the interests of industry and businesses and the welfare of the people.

“Comprehensive and inclusive strategic measures have been taken, with the involvement of various parties to ensure the country remains economically stable and competitive,” he said.

The Prime Minister also described this year’s ASEAN Summit as the best in the history of the organisation. “The Asean Summit… very much proved that the spirit of teamwork is the key to fulfilling the aspirations and ambitions of the country,” he said.

He also expressed confidence that the Visit Malaysia 2026 initiative will be a new catalyst for economic growth and the proliferation of employment opportunities.

The chair of ASEAN rotates annually based on the alphabetical order of the English names of member states, and in 2025 the role is being held by Malaysia.

 

Accountants ‘play critical role in sustainability’

Accountants are increasingly vital in embedding Environmental, Social, and Governance (ESG) principles into corporate decision-making and reporting, according to Malaysia’s Minister of Finance II, Amir Hamzah Azizan.

He said the accounting profession’s advocacy for sustainability aligns closely with national priorities, such as the National Energy Transition Roadmap (NETR) and the New Industrial Master Plan 2030 (NIMP 2030), which aim to accelerate green growth and industrial transformation.

“In executing these plans, we are counting on accountants to play a critical role in guiding companies to improve their sustainability practices, particularly in governance by ensuring high-quality, reliable disclosures are aligned with international standards. Such reliable and credible reporting is crucial for attracting low-carbon investments and enhancing the international competitiveness and green credentials of Malaysian products.

“Their contributions enhance transparency, support climate action, and help guide Malaysia toward a low-carbon, resilient economy,” he said.

India now fourth-largest economy in the world, overtaking Japan, according to the top Indian government public policy think-tank.

BVR Subrahmanyam, chief executive of NITI Aayog, described the overall geopolitical and economic environment as “favourable to India”. He said: “We are the fourth-largest economy as I speak. We are a $4 trillion economy.” Citing IMF data, Subrahmanyam added that India’s economy is now larger than Japan’s.

“It is only the US, China and Germany that are larger than India, and if we stick to what is being planned and what is being thought through, in two-and-a-half to three years we will be the third largest economy,” Subrahmanyam said.

The International Monetary Fund (IMF), in its latest World Economic Outlook (WEO) report said that India is expected to be the fourth largest economy in the world with a GDP of $4.19 trillion in 2025.

India’s nominal GDP for 2025 (FY26) is expected to be $4.187 billion, marginally ahead of the likely GDP of Japan which is estimated at $4.187 billion, the IMF said.

According to IMF data, India’s per capita income has doubled from $1,438 in 2013-14 to $2,880 in 2025.

The organisation also said the Indian economy is projected to grow at 6.2% in 2025-26, slower than earlier estimated rate of 6.5%, due to escalated trade tensions and global economic uncertainty.

“For India, the growth outlook is relatively more stable at 6.2% in 2025, supported by private consumption, particularly in rural areas,” the IMF stated.

According to the report, the global growth is projected at 2.8% in 2025, lower by 0.5 percentage points estimated earlier. In 2026, the global economy is estimated to grow at 3%.

A new NITI Aayog paper, called ‘Viksit Rajya For Viksit Bharat @ 2047’, said from being considered a part of the so-called ‘fragile five’ economies of the world, India rose to become the top five economies of the world in just a decade.

In 2013, Morgan Stanley coined the term ‘fragile five’ in reference to the emerging market economies of Brazil, India, Indonesia, South Africa and Turkey.

The World Bank defines high-income countries as those whose annual per capita income is more than $14,005 (2024–25). India has the potential and aims to be a high-income country by 2047, with an economy worth $30 trillion.

“It will have all the attributes of a developed country with a per capita income that is comparable to the high-income countries of the world today,” the paper said.

It added that in order to achieve the goal of a Viksit Bharat by 2047, an overall framework for strategic interventions and reforms based on six key building blocks have been identified.

These are: Macro-Economic Goals and Strategy; Empowered Citizens; A Thriving and Sustainable Economy; Technology and Innovation Leadership; A Global Leader, Vishwa Bandhu; and Enabling Factors – Governance, Security and Justice delivery.

 

Interim India-US trade deal could be in place by July

A team of US officials are expected to visit India in June for trade talks, with the possibility that the two countries agreeing on an interim trade pact by June 25, trade sources have said.

India’s chief negotiator, Special Secretary in the Department of Commerce Rajesh Agrawal, recently undertook a four-day visit to Washington, holding talks with his US counterpart on the proposed agreement.

Commerce and Industry Minister Piyush Goyal was also in Washington, meeting with United States Commerce Secretary Howard Lutnick twice during his visit.

Both sides are looking at an interim trade deal before the first tranche of the proposed bilateral trade agreement (BTA), with the US’ 26% reciprocal tariff on India suspended until 9 July this year. However, Indian goods still attract the 10% baseline tariff imposed by the US.

Both countries have fixed a deadline to conclude the first phase of the proposed BTA by September-October of this year.

The US was India’s largest trading partner for the fourth consecutive year in 2024-25, with bilateral trade valued at $131.84 billion. The US accounts for about 18% of India’s total goods exports.