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/

China should pivot its economic growth model from investment and export reliance to innovation and driving domestic consumption if it is to achieve its 5% annual growth target outlined in this year’s Government Work Report, a leading economic expert has said.

Liu Shijin, vice-chairman of the China Development Research Foundation and deputy director of the Committee on Economic Affairs of the CPPCC National Committee, said successful reforms would support the growth of China’s economy.

Liu said: “In the past two years, the economic recovery process after the pandemic has shown an overall upward trend in China, but still faces the pressure of insufficient demand, which is not a lack of investment, but a lack of consumption.

“From an international perspective, there is currently a gap of nearly 20 percentage points between China’s consumption-to-GDP ratio and the global average level. In terms of purchasing power parity, compared with OECD countries at roughly the same stage of development as China, the household consumption, service consumption and final consumption in China are about one-quarter to one-third different from the former. These reflect a structural deviation in China’s consumption patterns, influenced by several factors.”

He said China’s basic public services were facing problems such as low overall quality and large internal disparities. At present, the monthly pension of retirees from urban government departments and institutions versus other urban retired workers stands at about 6,000 yuan ($826) and about 3,000 yuan respectively.

“However, the gap between urban and rural areas is significant. Unlike urban residents, rural residents — who make up 95% of participants in the urban and rural residents’ pension insurance system — receive a monthly pension of just 220 yuan, which is just one-fifteenth of that received by urban retirees,” Liu said.

“On the other hand, the level of urbanization is low. In the services consumption sector, demand for goods has largely reached saturation. Services consumption – closely linked to urbanization – such as medical care, education, social security, culture and entertainment, remains difficult to access in traditional rural areas or underdeveloped counties.

“Even if residents are willing to consume certain goods or services, they often cannot due to a lack of services or high costs. As urban areas provide a high-quality services consumption environment, China’s population has increasingly migrated to urban centres, especially large first-tier cities in recent years. Therefore, enhancing urbanization is crucial for expanding services consumption.”

He said that a major reason for China’s consumption challenge is its wide income gap. Currently, China’s middle-income group consists of about 400 million people, but there are still about 900 million relatively low-income individuals. “International experience shows that, if the middle-income group does not account for the majority of population, it is prone to confront insufficient demand in the second half of the medium-speed growth period,” Liu said.

To solve the problem of insufficient demand and achieve the growth target, this year’s Government Work Report attaches great importance to consumption and prioritizes stimulus of it as its primary policy focus. It is required to address structural deviations so that the low-income segment with the greatest consumption potential can increase their spending power.

He added: “China should take efforts to steadily expand domestic demand. Accelerating urbanization and narrowing the income gap – with a particular focus on social security – are crucial steps. One approach could involve reallocating part of the government’s stimulus funds into the basic pension insurance fund for urban and rural residents, effectively doubling the monthly pension for 170 million rural participants, from about 200 yuan to 400 yuan.

“Moving forward, State-owned capital should be transferred to the pension fund on a large scale, with priority given to the basic pension insurance fund for urban and rural residents. In cities with large numbers of migrant workers, it is essential to gradually enhance social security and pension payment mechanisms, where some progress has already been made. Furthermore, the government should liberate the social productive forces in the integrated development of urban and rural areas, promote the two-way smooth flow of production factors such as people, land and capital between the two areas, and drive the second wave of urbanization in China.”