Sovrenn Times: Macroeconomy Update | 21 Aug 2025
India–Russia Trade Stays Strong at $65 Bn as Moscow Offers Market Access Amid US Tariffs
Russia has offered to increase imports from India if Indian goods face hurdles in the US due to new tariff policies. India–Russia trade hit $65 Bn in FY24, with crude oil making up the bulk as Russia is India’s largest oil supplier. Despite Western sanctions, discounted Russian crude has kept India’s import levels stable. Roman Babushkin, Charge d’Affairs of the Russian Embassy in India, called US pressure on India’s oil purchases “unjustified and unilateral.” He added that sanctions hurt those imposing them more than Russia. Highlighting “trust” in India–Russia ties, he said Moscow would welcome Indian exports while ensuring energy cooperation continues undisturbed.
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RBI Pushes Principle-Based Regulations to Strengthen $4 Tn Financial System
The Reserve Bank of India is shifting towards principle and outcome-based regulations, Deputy Governor M Rajeshwar Rao said at IIM Kozhikode. This approach aims to give India’s regulated entities (REs) greater flexibility while maintaining systemic stability.
Rao stressed the need for forward-looking supervision through technology, horizon risk scanning, and regulatory innovation. The RBI is simplifying compliance by adding FAQs and examples in its regulatory guidelines. Consumer protection remains central, with policies designed to safeguard over 1.3 Bn Indians dependent on the financial system. Rao warned that striking the right balance is crucial: overregulation risks stifling innovation, while lax oversight risks instability.
India’s Textile Exports Rise 5.37% YoY to $3.1 Bn in July 2025; Cumulative April–July Up 3.87%
India’s textile exports showed resilience in July 2025, growing 5.37% YoY to $3.10 Bncompared to $2.94 Bn last year, despite global uncertainties. Cumulative exports for April–July 2025 reached $12.18 Bn, up 3.87% from $11.73 Bn a year ago, according to DGCIS data. Ready-made garments led the surge, clocking $1.34 Bn in July (4.75% growth) and $5.53 Bn cumulatively (7.87% growth). Other drivers included strong demand in jute, carpets, and handicrafts, showcasing the sector’s diversified strengths. The performance highlights India’s robust textile base, spanning cotton, MMF-based fabrics, and eco-friendly traditional products. The ministry reaffirmed that the sector remains a key driver of jobs, exports, and economic growth, even in mixed global trade conditions.
PSBs Post Record Q1 FY26 Profit of ₹44,218 Cr, Up 11% YoY; SBI Alone Contributes 43%
India’s 12 public sector banks (PSBs) posted a record Q1 FY26 profit of ₹44,218 Cr, registering 11% YoY growth from ₹39,974 Cr in Q1 FY25. SBI led the pack, contributing ₹19,160 Cr, or 43% of total PSB earnings, marking a 12% profit rise YoY. In percentage terms, Indian Overseas Bank topped the growth chart with 76% profit surge to ₹1,111 Cr, followed by Punjab & Sind Bank with 48% rise to ₹269 Cr. However, PNB bucked the trend, reporting a 48% decline in net profit to ₹1,675 Cr from ₹3,252 Cr a year ago.Other strong performers included Central Bank of India (32.8% growth), Indian Bank (23.7%), and Bank of Maharashtra (23.2%). The finance ministry has urged PSBs to channel higher lending towards the productive sectors of the economy, reinforcing growth momentum.
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India Pushes Back on US Tariffs as Ambassador Engages US Lawmakers on Trade & Energy
India’s Ambassador to the US, Vinay Mohan Kwatra, met multiple US Congress members this week including Warren Davidson, Pete Sessions, Marc Veasey, and Michael Baumgartner to brief them on India’s stance on trade and energy. The outreach comes after President Trump’s 50% tariffs on Indian goods, including a 25% levy on Russian oil purchases, set to take effect August 27. Kwatra underlined India’s need for fair and balanced trade, while stressing the growing hydrocarbon partnership between New Delhi and Washington. In talks with Davidson, India sought support amid tariff tensions; with Sessions and Veasey, discussions highlighted energy security and equitable trade frameworks. New Delhi has termed the tariffs “unjustified and unreasonable” and signaled it will safeguard its economic interests. Meanwhile, Russia’s envoy said Moscow has a “special mechanism” to support India if US punitive measures disrupt its crude imports.