Sovrenn Times: Macroeconomy Update | 09 Sep 2025
India posts the lowest unemployment rate of 2% among G20
Union Labour Minister Mansukh Mandaviya said India’s unemployment rate stood at 2%, the lowest in the G20, citing World Economic Forum data. He credited rapid growth and schemes like Pradhan Mantri Viksit Bharat Rozgar Yojana (PM-VBRY), which allocates ₹99,446 crore to create 3.5 crore jobs in 2 years, with 1.92 crore for first-time workers. At an MoU signing with Mentor Together and Quikr, Mandaviya highlighted NCS’s role as India’s top digital job platform, now with 44 lakh active vacancies and 5.79 crore jobseekers. The Quikr tie-up adds 1,200 daily listings across 1,200+ cities, while Mentor Together will mentor 2 lakh youth in year one. The government’s wider ₹2 lakh crore youth package targets 4.1 crore beneficiaries via skilling and self-employment schemes like MUDRA and PM SVANidhi.
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India–Israel $800 Mn Investment Pact Signed, Trade Set to Triple with FTA
India and Israel on Monday signed a Bilateral Investment Agreement (BIA) to provide stronger protection for investors and boost mutual economic ties. The agreement, signed by Finance Minister Nirmala Sitharaman and her Israeli counterpart Bezalel Smotrich, introduces minimum standards of treatment and an independent arbitration mechanism to enhance investor confidence. Bilateral investments currently stand at $800 million, while trade volumes between the two nations have doubled in recent years, with both sides eyeing a three- to four-fold increase through a Free Trade Agreement (FTA) expected to be finalised in the coming months. The pact is also expected to expand cooperation in high-growth areas such as cybersecurity, defence, fintech, innovation, and infrastructure. Both ministers underlined their commitment to building a secure and enabling ecosystem for long-term investments, positioning the partnership as a key pillar of economic and strategic growth.
GST 2.0 Brings Relief for Energy Storage Sector with Uniform 18% Battery Tax
The India Energy Storage Alliance (IESA) hailed GST 2.0 as a landmark reform for the sector, noting that the GST Council has streamlined tax rates by bringing all advanced batteries, including flow, sodium-ion, and metal-air, under a uniform 18% slab. Previously, lithium-ion batteries were taxed at 18% while other chemistries faced 28%, creating barriers for emerging technologies. IESA said this move levels the playing field for non-lithium-ion solutions, boosting domestic innovation and supporting India’s long-duration energy storage goals. The reforms also cut GST on ammonia to 5% for the clean hydrogen ecosystem and reduced rates on hydrogen fuel cell vehicles under 4 metres from 12% to 5%. However, requests to slash GST on EV parts, battery separators, and charging services remain pending, with the Fitment Committee citing duty inversion concerns. Despite these, IESA called the reforms forward-looking, saying they lower barriers to clean energy adoption and urged continued dialogue to address remaining tax anomalies.
India’s Russian Oil Imports Fall 34% From March Peak to 1.3M bpd as Cargoes Shift to China
India’s state-owned refiners are struggling to revive purchases of discounted Russian crude as October-loading offers shrink, with cargoes increasingly diverted to China. Russian oil flows to India dropped to 1.3M barrels/day in late August, down from 1.97M in March, according to Bloomberg ship-tracking data. Indian Oil Corp. said procurement continues “depending on economics,” with current discounts at $2–3/barrel to Dubai benchmark. However, imports may fall another 0.25M barrels/day next month, FGE NexantECA warned. The pullback comes as US tariffs and sanctions tighten pressure on Moscow, while OPEC+ supply curbs ease, increasing competition from Middle Eastern producers. Despite this, Finance Minister Nirmala Sitharaman reaffirmed India’s intent to keep buying Russian crude, defying Washington’s push.
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GST Cuts to Benefit 10 Crore Dairy Farmers, Lower Input Costs for Agriculture and Food Processing
The recent GST rate cuts on dairy products, farm inputs, and food processing items will directly benefit more than 10 crore dairy farmers while boosting India’s cooperative sector, according to the Ministry of Cooperation. The reforms correct inverted duty structures in fertiliser manufacturing, helping check price rises and ensuring timely availability of inputs during sowing. For dairy, exemptions on milk and paneer, along with reduced tax on processing equipment, will improve margins for both individual farmers and cooperatives. Major dairy players like Amul have welcomed the move. Lower prices of tractors and related components are also expected to aid small farmers in fodder cultivation and transporting produce, providing wider benefits across the agriculture and animal husbandry ecosystem.