India’s quest for sustained growth over the next two decades will be driven by bold reforms, an enhanced domestic economy and institutional collaborations designed to tackle a fast-changing world, Finance Minister Nirmala Sitharaman has said.

She said the last two Budgets have laid the groundwork for this transformation, with a clear multi-sectoral policy agenda, she said, while speaking at California’s Stanford University.

In the past decade, the government has undertaken structural reforms, rationalising over 20,000 compliances, decriminalising business laws and digitising public services to reduce friction, Sitharaman said.

She further said a significant thrust on infrastructure development has also created a strong foundation for manufacturing-led growth by bolstering investor confidence over the past 10 years.

This has been enabled by a more than four-fold increase in the union government’s capital expenditure between 2017-18 and the 2025-26 Budget, she said.

“Our experience with implementing the Business Reform Action Plan by different state governments has demonstrated that deregulation is a powerful catalyst for industrial growth,” she said.

“Over the next two decades, sustaining India’s growth momentum calls for a fresh approach grounded in bold reforms, stronger domestic capacities, renewed institutional partnerships and adaptive strategies suited for the evolving global landscape,” the Finance Minister said.

India has set a goal to become a developed nation by 2047, the year when the country would enter the 100th year of its independence.

“As we lay the foundation for a developed India, we must stay committed to long-term goals, without losing sight of present realities. The global order is changing. That poses challenges but also opportunities. We must be prepared to tackle the former while seizing the latter,” she said.

Despite the pandemic shock and a banking crisis, she said, India’s “progress over the past decade, anchored in strong macroeconomic fundamentals and steady reforms, gives us confidence and direction for the road ahead”. As a result, she said, India has risen from the world’s 10th-largest economy to the fifth largest.

Quoting a report by Indiaspora and BCG, she said Indian first-generation immigrants founded 72 unicorns between 2018 and 2023 and these unicorns were worth at least $195 billion, employing nearly 55,000 people.

Some of the infrastructure projects in India stand out, such as the country’s Digital Public Infrastructure (DPI), she said.

More than a billion digital identities have been created using DPI, she said, adding, using these digital identities bank accounts of people were created and during Covid-19 pandemic, money was transferred by the government in a click of a button.

“DPI also was useful in administering vaccines during Covid-19 pandemic. In my interactions with the G20, the World Bank or the IMF, this singular population-scale achievement of India is repeatedly lauded,” she said.

Speaking about the government’s thrust on small and medium business, Sitharaman said, a vibrant and thriving network of small and medium enterprises is essential for domestic manufacturing growth.

The government has undertaken numerous initiatives to support MSMEs, from easing access to credit, redefining size thresholds, facilitating prompt payments from large buyers and simplifying compliance burdens, she said.

“The Open Network for Digital Commerce, launched in April 2022, has successfully onboarded more than 764,000 vendors across 616 cities.

“Our next focus is reducing regulatory frictions, digitising approvals, and integrating MSMEs into global value chains. Special support to women-led and rural enterprises will help enhance economic opportunities and ensure more inclusive growth,” she said.

With regard to encouraging and increasing participation of women in the labour market, Sitharaman said, maternity leave has been increased to six months.

“Two years ago, we came up with a scheme where we increased interest rates on deposits made by women to 7.5% to encourage women to keep their savings in banks rather than keeping that as cash at home, she said, adding that property registration in the name of women has tax concessions.

The International Monetary Fund (IMF) has cut its FY26 growth forecast for India by 30 basis points to 6.2%, citing escalating trade tensions and global uncertainty in its latest World Economic Outlook (WEO).

“For India, the growth outlook is relatively more stable at 6.2% in 2025 (2025–26), supported by private consumption, particularly in rural areas, but this rate is 0.3 percentage point lower than that in the January 2025 WEO Update on account of higher levels of trade tensions and global uncertainty,” the IMF report said.

The WEO stressed that escalating trade tensions have generated extremely high levels of policy uncertainty, making it more difficult than usual to establish a central global growth outlook.

The IMF has projected global growth to fall from an estimated 3.3% in 2024 to 2.8% in 2025 (down 0.5 percentage points from the January forecast), before recovering to 3% (down 0.3 percentage points from January) in 2026, with downward revisions for nearly all countries.

“The downgrades are broad-based across countries and reflect in large part the direct effects of the new trade measures and their indirect effects through trade linkage spill-overs, heightened uncertainty, and deteriorating sentiment,” the IMF said.

The IMF report said that India is projected to experience a smaller growth decline in 2025–50 of about 0.7 percentage points. However, the decline, it said, will intensify over 2050–2100 as the country passes its demographic turning point.

The Economic Survey has projected India’s gross domestic product (GDP) growth for FY26 in the range of 6.3%–6.8%. The statistics ministry has pegged GDP growth for FY25 at 6.5%.

India’s wealthiest families ‘under-reporting incomes’

Wealthier families in India are under-reporting their income in order to minimise their tax liabilities, according to new research.

Report author Ram Singh, Delhi School of Economics (DSE) director and a permanent member of the Monetary Policy Committee of the Reserve Bank of India, said: “On average, the total income reported by the bottom 10% of individuals is more than 120% of their wealth; for the wealthiest 5% of individuals, it is just about 3.7% of their wealth”, Singh wrote in his paper, ‘Do the Wealthy Underreport their Income?’.

Singh came to his conclusions by studying the wealth and reported incomes of over 7,600 families and their family members across India, with the raw data taken from the national account of listed companies of the wealthiest Indian families, income tax statistics from the Central Board of Direct Taxes, the Lok Sabha election affidavits (2014 and 2019), and the Forbes list (FL) of billionaires, among others.

The report said that the wealthiest 0.1% of families report a total income of roughly 2% of their wealth, and the wealthiest Indian families on the Forbes list (FL) report a total taxable income of less than 0.6% of their wealth, states the study.

In contrast, the study adds that the bottom 10% of families report 188% of their wealth as total income.

According to the study, the under-reporting of income increases with wealth, and even after adding all types of income, the reported income of the wealthiest 0.1% of families is still less than 20% of their capital income or annual return from wealth. In other words, 80% of the capital income of the top 0.1% goes unreported, Singh said.

Similarly, the paper states that 90% of the capital income of the Forbes-list, ultra-wealthy families goes unreported.

“Besides under-reporting their rental income and disguising their taxable income as tax-free agricultural income, the wealthy also avoid taxes by exploiting gaps in tax rules,” Singh said.

He added: “All wealth groups evade tax on rental and case-based business income and misreport taxable income as tax-free agricultural income. However, the wealthy and super-wealthy engage in tax avoidance [and] exploit gaps in tax rules. Further, they minimise their income-wealth ratio by suppressing dividend pay-outs and take-outs of wages, honoraria and commissions.”

The paper also stated: “Even with the most generous estimates, the tax liability of the top centile [individuals] amounts to 1% of their wealth. For the top one-tenth of the top centile, the total tax liability amounts to less than 0.8% of their wealth. The super-wealthy Indians on the Forbes List pay tax that is less than 0.2% of their wealth.”

New legislation to empower local cooperatives is currently being drafted by Malaysia’s Entrepreneur Development and Cooperatives Ministry, the government has confirmed. The new Act will replace the Cooperative Societies Act 1993.

Minister Ewon Benedick said the Cabinet paper on the matter was presented to the Cabinet and it was agreed in principle earlier this year. He said: “The main objective of drafting the new cooperative act is to strengthen the cooperative movement by liberalising regulations and empowering the Malaysia Cooperative Societies Commission as the regulatory body for cooperatives.

“With this new act, the ministry is optimistic it will create responsive and dynamic cooperatives, facilitate business activities of cooperatives and improve governance,” he said.

Ewon highlighted that the decision to draft the act was based on the findings of the ministry’s 2023 study entitled ‘Study on Related Laws and Constraints on Cooperatives as Business Entities within the Legal Context’.

He said the study revealed that existing laws restricted cooperatives from venturing into certain business areas, including regulations requiring cooperatives to establish subsidiaries under the Companies Commission of Malaysia.

Malaysia’s National Entrepreneurship Policy 2030 (DKN2030) recently set a target for cooperative revenue generated by 2025 to reach RM60 billion (£10.3 billion), said Benedick.

The minister expects the revenue to increase to RM100 billion by 2030 through efforts and initiatives that will be implemented under the policy.

“To strengthen the cooperative movement, DKN2030 has outlined the role of cooperatives through a strategic core, such as stimulating the development of integrated and holistic entrepreneurship that focuses on cooperatives as a driver for inclusive socioeconomic development,” he said.

He said there are 15,315 cooperatives in Malaysia with a total income of RM38.5 billion, and a total of RM16.99 billion in share capital and cooperative membership fees have been recorded with total assets of RM159.9 billion.

South-east Asia growth set to slow

ASEAN’s economic growth outlook looks uncertain, due to the impact of reciprocal tariffs, leading to downward revisions in growth forecasts for several member states.

CGS International’s latest report notes that Malaysia, Singapore and Thailand have all experienced a slight decrease in their projected growth rates. However, it also points out that some ASEAN countries might benefit from product substitution as a result of the high tariffs imposed on China.

The report anticipates that the 10% minimum tariff will remain in effect, and ASEAN will seek concessions to prevent further increases. Nevertheless, the report suggests that securing a deal favourable to the bloc is unlikely.

The impact of the 10% reciprocal tariff varies across ASEAN economies, according to CGS International. Vietnam is considered particularly vulnerable due to its high reciprocal tariff and strong reliance on the US market. Malaysia and Thailand are assessed to have a medium level of exposure, followed by Singapore. Indonesia is seen as the most insulated, attributed to its low dependence on exports and reduced exposure to the US.

The exemption list, which includes semiconductors, provides some relief, as over 60% of Malaysia and Singapore’s exports to the US are exempted. However, CGS International cautions that this relief might be temporary, given reports that the US administration is considering separate tariffs on the semiconductor and pharmaceutical industries.

The analysis suggests a shift in the dynamics of international trade, with the potential for a permanent minimum tariff and efforts to weaken the US dollar. This shift could pose challenges to ASEAN’s export-oriented growth model, necessitating a transition towards greater reliance on consumption-driven growth.

The report said that:

• Malaysia’s 2025F GDP growth forecast revised to 4.2% from 4.6%.

• Singapore’s 2025F GDP growth forecast lowered to 1.6% from 2.5%.
• Thailand’s 2025F GDP growth forecast revised to 1.8%, compared with the April 2 assessment of 1.5%, but still lower than the pre-April forecast of 2.3%.
• Indonesia’s 2025F GDP growth forecast maintained at 5.0%, acknowledging the fluid situation and potential for future downgrades.

India is taking a “cautious but optimistic approach” to its proposed bilateral trade agreement (BTA) with the United States, according to Commerce and Industry Minister Piyush Goyal, who added that the government would not compromise national interest for the sake of speed.

Responding to questions on the India-US trade negotiations, Goyal said: “We do not negotiate at gunpoint. Timely restrictions are good as they encourage us to talk swiftly, but until we can protect the interests of the country and people, it is never good to be hasty.” The minister underlined that every step in the talks is taken with ‘India first’ in mind, aligning with the long-term vision of Viksit Bharat 2047 – the initiative with the goal of making India a developed nation by its centennial year of independence.

India and the US are working toward finalising the first phase of the agreement by September or October this year. The two sides have set an ambitious goal to more than double bilateral trade to $500 billion by 2030, up from the current $191 billion.

“Considering the growth trajectory India is expected to follow over the next 25–30 years, with a young, aspirational population driving demand, we believe India presents a compelling case for a strong bilateral trade agreement with the United States,” Goyal said at a press conference.

Meanwhile, Goyal noted that discussions with the European Union on a free trade agreement are also progressing, but stressed that such talks succeed only when both parties are sensitive to each other’s concerns. He acknowledged that Indian businesses often face non-tariff barriers in the EU market, which remain a sticking point in negotiations.

Speaking at the Italy-India Business Forum, the minister also highlighted the urgent need to fast-track the India-EU free trade agreement. “Concrete steps need to be taken,” he urged, suggesting that the agreement could significantly strengthen economic ties between both regions.

Goyal pointed to the India-Middle East-Europe Corridor (IMEC) as a strategic initiative that could deepen India’s engagement with Italy and other EU nations. He called for smoother investment flows and reduced trade hurdles between India and Italy, noting the existing trade volume of $15 billion has room to grow substantially.

“There is tremendous potential to grow,” Goyal said, adding that promoting investment and ensuring seamless trade could unlock new opportunities for both sides.

The minister said that the Indian authorities are on alert to prevent any misuse of trade routes. A close watch is being maintained to ensure that other countries do not route their exports through India to evade US tariffs. Similarly, the Central Board of Indirect Taxes and Customs (CBIC) has been instructed to monitor that Indian exporters do not use third countries to reroute goods.

Officials emphasized that India remains a trusted trade partner of the US, and any such circumvention could damage that reputation.

Exports hit record levels

India’s total exports of goods and services rose by 5.5% to a record $820.93 billion in the financial year ending March 31, compared with $773 billion in the previous year, according to Commerce Secretary Sunil Barthwal. This growth comes despite global economic uncertainties and trade tensions, he said.

Merchandise exports stood at $437.4 billion, while non-petroleum exports registered a 6% year-on-year increase, reaching $374.08 billion in FY25.

However, India’s trade deficit widened to $21.54 billion in March, up from $14.05 billion in February, according to data from the Ministry of Commerce and Industry. Merchandise exports rose marginally by 0.7% to $41.97 billion during the month, while imports surged by 11.3% to $63.51 billion, leading to the broader gap.

Compared with February, exports in March jumped 13.75%, while imports grew 24.6%.

Major changes to corporate tax rules have been announced by the UAE in an effort to attract more domestic and foreign investments. The changes were announced by the Ministry of Finance and outlines scenarios that will see non-residents subjected to taxation in the country.

“The new decision specifies the cases in which a non-resident juridical investor in a Qualifying Investment Fund (QIF) or Real Estate Investment Trust (REIT) is considered to have a nexus in the UAE and is therefore subject to taxation,” according to an update shared by the official Emirates News Agency.

Details shared by the news agency suggest that a nexus will arise for QIF investors that breach the real estate threshold either on the date of the dividend distribution or the date the ownership interest is acquired. The first applies if the QIF distributes 80% or more of its income within nine months from its financial year-end. The date of ownership interest acquisition will be considered if the QIF fails to distribute at least 80% of its income within the same stipulated period. A nexus will also be created for a non-resident juridical investor in a QIF that fails to meet the diversity of ownership conditions in the tax period in which the failure occurs.

Meanwhile, a nexus for REIT investors will arrive “on the date of the dividend distribution” if the trust distributes 80% or more of its income within nine months of its financial year end. It will apply from the date the ownership interest is acquired in case the REIT fails to distribute at least 80% of its income within this timeframe.

The Ministry of Finance also specified that non-resident juridical investors investing exclusively in a QIF or REIT would not be considered to have a taxable presence in the country — except in the cases outlined. The move is intended to “reduce foreign investors’ compliance burdens”.

Dhruv Tanna, associate vice president at DIFC-based investment and wealth management firm PhillipCapital, said the decision provided “much-needed clarity” to non-resident investors in QIFs and Reits regarding their potential tax exposure in the UAE under the corporate tax regime.

“By defining the circumstances in which a nexus is created, this decision distinguishes between passive, diversified investments and structures that either concentrate on UAE real estate or lack sufficient distribution or ownership diversity,” he said.

“Specifically, triggering events – such as failure to distribute 80% of income within nine months or breaching diversity thresholds – serve as practical indicators of when a non-resident investor’s involvement becomes sufficiently substantial to warrant tax treatment akin to a domestic presence.”

‘Make It in the Emirates’ 2025 to feature diverse range of sectors

‘Make It in the Emirates 2025’ has announced the opening of visitor and media registration for its fourth edition, the largest industrial gathering in the UAE, set to take place from 19 to 22 May at ADNEC Centre Abu Dhabi.

Make it in the Emirates 2025 is led by the Ministry of Industry and Advanced Technology, in collaboration with the Abu Dhabi Investment Office, the UAE Ministry of Culture, and ADNOC, and is organised by ADNEC Group. The event reflects a strong commitment to fostering industrial growth, increasing investment opportunities, and driving economic diversification in the UAE.

ADNEC Group said in a statement: “The Make It in the Emirates Forum and Exhibition is distinguished by in-depth discussions and studies, providing companies with the resources, insights, and networks needed to thrive in an evolving global landscape. It also supports the UAE’s vision for sustainable industrial development, aligning with Operation 300 Billion Strategy.

“This edition will mark a significant leap in both size and procurement commitments that drive economic diversification and long-term value creation. As the region’s leading industrial event, Make It in The Emirates 2025 presents unprecedented investment and business opportunities, offering direct access to pre-approved industrial projects in high-growth sectors, supported by the government.”

It added: “The exhibition will feature a diverse range of sectors, including manufacturing, renewable energy, advanced technology, and logistics, along with showcases of heritage crafts and innovative services.

“The organisation of the Make It in the Emirates embodies the leadership’s vision to position the UAE as a global platform for industry. It also underscores the attractiveness of the country’s regulatory environment and the advanced infrastructure it provides, in line with its strategic efforts to become a global centre for advanced industry and innovation.”

• Find out more about the event and to register go to https://www.miite.ae/