Sovrenn Times: Macroeconomy Update | 12 August 2025
India’s 13-Fold Surge in DDGS Output Threatens $17 Bn Edible Oil Import Reduction Goal
India’s ethanol push has driven DDGS production to an estimated 5.5 Mn tonnes in 2025, a 13-fold jump in just two years prompting feed makers to replace costlier oilmeals, depressing oilseed prices, and driving farmers away from soybeans and groundnuts toward record-high corn planting. As of August 8, oilseed acreage was down 4% YoY while corn jumped 10.5%. The shift jeopardises New Delhi’s target to boost edible oil output from 12.7 Mn tonnes to 25.45 Mn tonnes by 2030-31, reducing import reliance from the current 16 Mn tonnes that cost $17 Bn annually. Traders warn imports could top 20 Mn tonnes within 6-7 years, pushing global prices higher amid tightening supplies, while domestic oilmeal and DDGS surpluses strain export markets already turning to U.S. suppliers.
Lok Sabha Passes Overhauled Income Tax Bill; LLP AMT Scrapped, Late Refund Claims Allowed
The Lok Sabha has cleared the Income Tax (No.2) Bill, set to replace the 1961 Act from next fiscal year, cutting chapters nearly in half and introducing a simplified “tax year” concept. Key reforms include removal of Alternate Minimum Tax on LLPs, permission for refund claims even if returns are filed after the due date, and exemptions for anonymous donations received by purely religious trusts. The bill aligns MSME definitions with the MSME Act, reintroduces certain inter-corporate dividend deductions, and exempts LRS remittances for education (via financial institutions) from TCS. Professionals with income above ₹50 Cr annually must now adopt prescribed e-payment modes. Experts say the revised draft, which incorporates almost all Select Committee recommendations, addresses pain points by easing compliance, improving clarity, and relaxing provisions on charitable trusts, transfer pricing, and associated enterprise definitions.
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India Bans $2 Bn Jute Imports from Bangladesh via Land Routes, Bilateral Trade at $12.9 Bn
India has extended its ban on several jute products from Bangladesh through all land ports, now covering bleached/unbleached woven fabrics, jute twine and rope, and jute sacks, though imports remain permitted via Nhava Sheva Seaport. This follows earlier restrictions in April, May, and June on various jute and bast fibre products, ready-made garments, and processed foods, alongside the withdrawal of transhipment facilities for most exports. The measures come amid escalating diplomatic tensions after controversial remarks by Bangladesh’s interim leader Muhammad Yunus and concerns over attacks on minorities. With bilateral trade at USD 12.9 Bn in 2023-24 India exporting USD 11.46 Bn and importing USD 2 Bn the ban targets a sector where Bangladesh is a key competitor to India’s textile industry.
India to Roll Out ₹40 Bn Credit Guarantee Scheme for SMEs & Exporters Hit by US Tariffs
The Centre plans to offer 10–15% credit guarantees for loans overdue up to 90 days, targeting small businesses with turnover up to ₹5 Bn and exporters impacted by US tariffs. Around ₹40 Bn will be allocated, with eligibility covering stressed firms under RBI’s SMA-0 to SMA-2 category that are not yet NPAs. About 55% of Indian merchandise exports to the US face new tariffs, prompting additional plans for term loans to small exporters backed by 70–75% government guarantees.
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Paddy Sowing Up 12% This Kharif; Overall Crop Acreage Nears 1,000 Lakh Hectares
Paddy sowing has reached 364.80 lakh hectares this kharif season, 12% higher than last year’s 325.36 lakh hectares, as per Agriculture Ministry data till August 8. Total kharif crop coverage rose to 995.63 lakh hectares from 957.15 lakh hectares a year ago. Pulses acreage was steady at 106.68 lakh hectares, while coarse cereals expanded to 178.73 lakh hectares. Oilseed planting fell to 175.61 lakh hectares, and cotton declined to 106.96 lakh hectares. Sugarcane saw a slight rise to 57.31 lakh hectares. The IMD projects an above-normal monsoon for 2025.