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Electric two-wheeler firms in talks with govt for localisation relief
Surajeet Das Gupta New Delhi
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Electric two-wheeler (e2W) firms have approached the Ministry of Heavy Industries (MHI), seeking exemptions from including
electric motors in the localisation calculations under the production-linked incentive (PLI) scheme for automobile and auto components — and from the phased manufacturing programme (PMP) localisation requirement for subsidy eligibility under the PM Electric Drive Revolution in Innovative Vehicle Enhancement scheme.
In a meeting with the MHI, 2W companies told the government that their stock of rare earth magnets is dwindling, leaving them with no option but to import electric motors — already fitted with rare earth magnets — directly from China. Earlier, many companies
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Hindustan Times
6 hours ago
- Hindustan Times
India's economic resilience guards against tariff threats
The impact of the US's 25% tariff on imports from India appears to be far less catastrophic than what some had predicted. Meanwhile, the trade deal with the US remains in negotiation, and there is every reason to expect that once talks advance, the tariff rate could be scaled down. Estimates suggest that the 25% tariff might translate into an annual impact of just $10-11 billion — a relatively modest impact. While the India-UK FTA negotiations were multifaceted, the agreement was not solely about lowering tariffs or increasing trade volumes; it was also about redefining economic diplomacy in a multipolar world. (Bloomberg) With the American delegation scheduled to visit New Delhi later in August, both sides have ample opportunity to recalibrate their positions. Trade deals are shaped not by threats but by diligent negotiations between officials representing institutional interests of their respective countries. In that light, US President Donald Trump's statements seem part of a broader tactic aimed at bolstering America's bargaining position rather than signalling an irreversible shift in economic policy. Therefore, there is no need to panic. India's growth story is one of rising momentum, driven by deep structural shifts and smart strategic positioning. Over the past year, India has defied global headwinds that have hindered many advanced economies. While high inflation, tightening monetary policies and geopolitical uncertainty have strained markets elsewhere, India has maintained an impressive growth trajectory. India's ability to sustain high growth is anchored in robust domestic demand, strong public capital expenditure, and the sustained expansion of its booming services sector. At the same time, there has been a deliberate policy recalibration toward achieving self-reliance, integrating global supply chains and boosting manufacturing competitiveness. Initiatives like the Production Linked Incentive (PLI) schemes across sectors such as electronics, semiconductors and renewable energy have attracted substantial foreign direct investment. Moreover, the nation's digital revolution has firmly established India as a leader in the digital economy across the Global South. In this context, the recently-signed India-UK free trade agreement (FTA) takes on added significance. While the FTA negotiations were multifaceted, the agreement was not solely about lowering tariffs or increasing trade volumes; it was also about redefining economic diplomacy in a multipolar world. For India, an ambitious FTA with the UK offers several strategic advantages. One, it sends a positive signal to global investors, affirming that India remains open for business — both strategic and reform-minded. Two, the deal provides a pathway for India to build deeper trade links with advanced economies at a time when globalisation is evolving towards regionalisation. And three, the agreement reinforces India's effort to diversify its export markets — a crucial counterbalance to the uncertainties of US trade policy and the slowing pace of growth in some of its traditional markets. The UK is currently India's 18th largest trading partner, with bilateral trade exceeding $50 billion. The FTA will serve to lower existing tariffs, ease regulatory hurdles and promote greater mobility for Indian professionals. Even contentious issues, such as agricultural trade, though politically sensitive, appear manageable. The relatively modest scale of UK agricultural exports could provide the room needed to sidestep potential disputes, easing negotiation complexities on that front. At the same time, India's impressive economic performance is underscored by several headline-grabbing trends across its major sectors. For instance, in the realm of global supply chains, India has emerged as a formidable competitor in the smartphone market. This transformation illustrates how India is successfully capitalising on new geopolitical realities and diversifying manufacturing hubs. Additionally, macroeconomic indicators have painted an encouraging picture. With retail inflation falling to a six-year low of 2.1% in June 2025, the consumer sector has found its footing amid otherwise volatile global conditions. Employment metrics reveal a healthy labour market. Exports have seen a year-on-year boost of approximately 5.9%, while remittances have reached a record $135.5 billion. The Manufacturing Purchasing Managers' Index (PMI) in July 2025 hit a 17-year high of 59.2, reflecting robust industrial activity and strong global demand. Public health initiatives, too, have contributed significantly to the overall picture. The Jan Aushadhi Kendras, which offer affordable medicine and have saved citizens ₹38,000 crore in health care costs over the last 11 years, exemplify how policy initiatives are directly alleviating household expenses and improving standards of living. Energy and infrastructure sectors are part of this rosy picture as well. India has crossed the 1-billion-tonne mark for coal production — a symbol of its energy self-reliance — while simultaneously ramping up renewable energy capacity. With 22 gigawatts of solar and wind capacity added in the first half of 2025, India is on track to overtake the US in clean energy installations. In the digital domain, India's transformation is truly remarkable, which reinforces India's position as a hub of technological innovation. Furthermore, the growth of Global Capability Centres (GCCs) in Tier-II and Tier-III cities — now numbering over 1,700 and generating $64.6 billion in revenue — demonstrates a broader socio-economic transformation. With these centres creating tens of thousands of jobs outside the traditional Tier-I urban hubs, India is leveraging lower costs, burgeoning talent pools, and improved infrastructure to reshape its economic geography. In essence, while President Trump's statements may have generated headlines, the underlying data tells a more encouraging story. India's broad-based growth, strong macroeconomic fundamentals, and strategic policy shifts point to an economy that is far more robust and resilient than any single trade dispute could jeopardise. Rather than succumbing to external pressure, India is actively repositioning itself as a major player on the global stage, capable of turning challenges into opportunities. Ultimately, the narrative is one of confidence, adaptability and strategic foresight. India's economic resilience serves as a compelling counterpoint to any external rhetoric. The picture, then, is not one of crisis but of calculated evolution — a testament to India's ongoing journey towards becoming a robust and dynamic engine of global growth. Syed Zafar Islam is a national spokesperson of the BJP, former Member of Parliament, and former managing director, Deutsche Bank, India. The views expressed are personal.
Mint
12 hours ago
- Mint
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US President Donald Trump's tariff offensive can be likened to the covid pandemic for affecting all countries. What sounded bizarre on paper is a reality. Five years after the covid outbreak, the economic disruption caused by one man has been remarkable, marked by whims and contradictions. While there appears to be room for discussion on a trade deal, India should be prepared for the worst: A scenario in which the US threat of a 25%-plus tariff comes to bear. Is there anything the Indian government can do to protect exporters? Also read: The week in charts: Trump's 25% India tariff, TCS's mass layoffs, oil on the boil Yes. A kind of public-private arrangement could be made—with a sunset clause—for the overall cost imposed to be shared by the government and exporters so that higher prices at the other end do not depress US demand. A support framework should be drawn up to help exporters adjust to this new normal over a period of 1-3 years. Policy decisions would need to be taken on two scores. First, should the package be only for impacted exports to the US or for all merchandise exports? The former could imply discrimination, while supporting the export of goods to all destinations could be justified on the need for a fillip to this broad activity in the face of global headwinds. Second, for how long should such support last? Specifying a time-frame will spell certainty for exporters. Both will, of course, depend on the Centre's fiscal space. After those calls are taken, a package can be devised. A narrowly aimed one need not involve any special new scheme, as existing policy programmes can be used to help tariff-affected businesses. This way, we will need only minor budget-outlay additions. First, support can be provided through India's production-linked incentive (PLI) scheme. The utilization of funds under it was targeted at around ₹2 trillion over five years from 2020-21, but is likely to fall short. This incentive can be extended to companies that face raised US tariffs. The payback provided under the PLI scheme can serve as compensation for firms that maintain or increase their exports to the US. The payback rate can be based on the comparative tariff disadvantage within an industry vis-a-vis competing industries in other countries. Thus, if Vietnam has a tariff of 20% and competes in ready-made garments, this industry can be provided a payback that takes that difference into account. Its thematic contours would be similar to the PLI scheme's. Also read: Trump's 25% tariff threat puts $87 billion in Indian exports at risk Second, the government could deploy an interest subvention scheme, promising a credit cost payback of 1-2 percentage points. A call can be taken on whether this should be industry-specific or only for micro, small and medium enterprises (MSMEs), which contribute significantly to India's overall exports but probably is the most vulnerable sector. MSMEs face borrowing challenges and hence any subvention will help. Ideally, though, such a benefit should apply to all exporters. Third, the Reserve Bank of India's (RBI) targeted long-term repo operations (TLTRO), which were largely successful during the pandemic, can be revived. The central bank could provide funds at a sub-repo or repo rate to banks, which in turn can lend to tariff-affected exporting units or industries. This can be another way to lower their cost of credit. The funds should be short-term in nature and only for working capital purposes. This way, exporting units can become more competitive on finance costs. RBI could announce a TLTRO programme for a period of 1-2 years. Fourth, India's credit guarantee scheme can be extended to exporters, so that banks lend them funds without hesitation. The pandemic-time Emergency Credit Line Guarantee Scheme was very popular and it worked well for MSMEs. 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Countries like Vietnam, Korea, Philippines, Bangladesh and Sri Lanka face lower US tariffs than India, which amounts to a major disruption. Policy steps could offer exporters a cushion, while sunset clauses would give them time to scout for new export markets and prevent government props from leading to complacency. Also read: Services sector may catch up with merchandise exports in FY26 Also, RBI would have to watch the rupee. The US reset could cause dollar volatility. In theory, higher tariffs should drive up US inflation and bond yields. This will attract investment from overseas, which, together with reduced US imports, should strengthen the dollar against other currencies. Central banks will have to take a call on how much currency weakening they are okay with. A lot will depend on domestic inflation and the strength of foreign exchange reserves. The government, meanwhile, could explore policy adjustments to provide outward shipments a large-scale fillip. 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Time of India
18 hours ago
- Time of India
NITI Aayog launches India Electric Mobility Index to assess state-level EV readiness
New Delhi: NITI Aayog on Monday launched the India Electric Mobility Index (IEMI), a first-of-its-kind tool to comprehensively track and benchmark the progress of states and union territories in achieving their electric mobility IEMI scores all Indian states and UTs out of 100 across 16 indicators grouped under three core themes—Transport Electrification Progress, Charging Infrastructure Readiness, and EV Research and Innovation index was launched by NITI Aayog Member Rajiv Gauba in the presence of B V R Subrahmanyam, CEO of NITI Aayog, Kamran Rizvi, Secretary, Ministry of Heavy Industries, O P Agarwal, Distinguished Fellow, NITI Aayog and Sudhendu Sinha, Programme Director – E-Mobility, NITI Aayog. 'The IEMI provides a transparent, comparative framework to assess progress across key themes such as electrification, infrastructure, and innovation. It enables states to benchmark their efforts, identify gaps, and learn from each other's successes,' Gauba said. According to the government think tank, the index enables evaluation across states and UTs by identifying key drivers of success and areas requiring targeted interventions. It aims to inform decision-making, promote healthy competition among states, and encourage sharing of best practices. CEO B V R Subrahmanyam said, 'NITI Aayog has already been at the forefront of enabling the ongoing EV revolution. This index is yet another effort by NITI Aayog to propel India towards its vision of a decarbonized and energy-secure future.' The tool underscores the importance of state-level coordination, integrated planning, and cross-sectoral collaboration in achieving India's electric mobility vision. The index covers both demand-side and supply-side aspects of electric mobility, tracking adoption, infrastructure growth, and ecosystem R&D. The report and dashboard launched alongside the index will help policy makers, industry, and researchers in monitoring EV transition outcomes and aligning with India's net-zero commitment by 2070.
