Sovrenn Times: Macroeconomy Update | 03 Sep 2025
SBI: States to Gain ₹14.1 Lakh Cr From GST 2.0 Despite Short-Term Dip
An SBI Research report projects that states will emerge as net gainers from the proposed GST rate rationalisation, with revenues expected to cross ₹14.1 lakh crore in FY26, including devolution. The exercise will shift to a two-tier structure (5% & 18%) with a 40% sin/luxury slab, phasing out the 12% rate. While states may see a 3–4% short-term dip, the report highlights they ultimately accrue ~70% of GST collections, ensuring long-term buoyancy. Opposition states, however, warn of ₹1.5–2 lakh crore potential losses, higher than SBI’s earlier ₹85,000 crore estimate. SBI notes simplification will widen the tax base, cut compliance costs, and improve efficiency, driving structural gains beyond immediate revenue.
India Seeks WTO Consultations Over US 50% Copper Tariff; $360M Exports at Risk
India has requested WTO consultations after the US imposed a 50% tariff on copper products from Aug 1, threatening exports worth $360M in FY25. The duty—applied indefinitely—adds to earlier US tariffs on Indian steel, aluminium, and auto components. India argues the move is a safeguard measure in disguise, while the US cites “security interests.” India is a net copper importer ($14.45B in FY25) but also imports $288M copper scrap from the US, flows that may now be disrupted. The tariff clash has stalled India–US bilateral trade agreement (BTA) talks, where the US is pressing for access to India’s agri/dairy markets. Despite tensions, India–US trade rose 21.6% YoY to $33.5B in Apr–Jul, with both nations aiming to double total trade to $500B by 2030.
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Govt Identifies 10 Highway Corridors for Green Hydrogen Trucks; Logistics Cost Falls 6%
The Centre has earmarked 10 highway stretches including Delhi–Agra, Ahmedabad–Surat, and Kochi–Thiruvananthapuram for green hydrogen-powered trucks, with IOC and Reliance setting up hydrogen stations. Truck makers Tata Motors, Ashok Leyland and Volvo have begun production of hydrogen vehicles to support this shift. India aims to cut vehicular pollution and position itself as a global exporter of green hydrogen. Union Minister Nitin Gadkari said logistics costs have already reduced by 6%, backed by IIM Bangalore, IIT Chennai and IIT Kanpur studies. Costs that earlier stood at 14–16% of GDPare targeted to reach single digits by Dec 2025, improving competitiveness against China (8%) and the US/EU (12%). The push aligns with India’s goal of a $5 trillion economy and becoming the world’s No.1 auto market within five years
UNCTAD: Global Trade Policy Uncertainty Hits Record in Q1 2025, Risks Growth & Stability
The World Trade Policy Uncertainty Index reached a record high in Q1 2025, rising multi-fold YoY, according to UNCTAD’s Global Trade Update. The surge is raising trade costs, unsettling markets, and disproportionately hurting low-income economies and small firms. The US, as the world’s largest importer, is a key driver—its tariff deadlines triggered 10% higher air shipments in Q1, followed by a sharp Q2 drop. Among 15 mapped economies, India is the second least exposed to US trade policy shifts after China, based on UNCTAD’s intra-industry trade index. The report highlights three risks—higher costs/slower growth, financial instability, and erosion of global trust. UNCTAD recommends advance notice of policy changes, stronger trade agreements, and diversification of export markets to restore resilience.
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TN Signs ₹7,020 Cr MoUs in Germany, Secures 15,000+ Jobs Across Auto, Renewable & R&D
Tamil Nadu CM MK Stalin announced the signing of 26 MoUs worth ₹7,020 Cr, projected to create 15,000+ jobs, during the TNRising Germany Investment Conclave. Of this, 23 MoUs worth ₹3,819 Cr were sealed at the conclave, generating 9,000 jobs, with key global leaders picking TN for their next growth phase. Major investments include Knorr-Bremse’s ₹2,000 Cr plant for railway doors & braking systems (3,500 jobs) and Nordex Group’s ₹1,000 Cr wind turbine expansion (2,500 jobs). ebm-papst committed ₹201 Cr to expand its GCC and manufacturing base, adding 250 jobs in HVAC and auto tech. The state also engaged BMW leadership, pushing for expansion in TN’s strong EV ecosystem. With 60+ German companies already present, Stalin positioned TN as “India’s Germany”, underscoring its role as the industrial heartbeat of the country.