There is frenzied activity going on to light up the country and the lives of its people – the festival of lights always dazzles and brings cheers. The Diwali ‘diyas’ are visible in the Government of India’s efforts to sustain economic growth, as reflected in reports from the Organisation for Economic Co-operation and Development (OECD), the Asian Development Bank (covered below), and Fitch Ratings. The India-European Free Trade Association (EFTA) Trade and Economic Partnership Agreement (TEPA) came into effect on 01 October 2025, constituting a commitment to investment and job creation. Innovation in India continues to be noticed globally, and bright spots emerge.
Asian Development Bank – The Asian Development Bank (ADB) has forecast India’s gross domestic product (GDP) to grow by 6.5% in both fiscal years (FY2025, ending 31 March 2026) and FY2026, according to the Asian Development Outlook (ADO) September 2025. While the FY2025 forecast remains unchanged from ADB’s July 2025 projection (as reported by Asia Law Portal here), the FY2026 estimate has been revised downward from 6.7% to 6.5%. This adjustment reflects anticipated headwinds from newly imposed US tariffs on Indian exports. However, resilient domestic consumption and strong performance in service exports are expected to cushion the impact of these trade barriers. “Despite ongoing trade challenges, we remain optimistic about India’s long-term growth trajectory,” said ADB Country Director for India Mio Oka. “The implementation of tariffs will weigh on growth, but the overall impact on GDP is expected to be contained due to India’s relatively lower exposure to the US market, increased exports to alternative markets, sustained strength in services exports, and a pickup in domestic demand.” Recent policy steps—including reductions in GST rates, cuts in personal income tax, and employment-linked fiscal incentives for both workers and firms—are poised to boost consumption across rural and urban regions and reinforce economic momentum, the report says. The report highlights several near-term risks, including escalating trade tensions that could impact broader sectors of the economy, global geopolitical uncertainties that may dampen demand for India’s exports, and domestic disruptions stemming from ongoing flood-related shocks. However, on the upside, growth could be spurred if US tariffs on India are lowered to align more closely with those imposed on other countries in Asia and the Pacific.
FPI Investment Relaxation – The Securities and Exchange Board of India (SEBI), in its 211th Board Meeting has approved amendments to SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018, with the objective of facilitating ease of doing business and enhancing inclusive participation of institutional investors in the IPO process. SEBI decided to relax entry norms for foreign portfolio investors (FPIs), seeking to counter their continued withdrawal from the nation’s equity market. The regulator eased initial public offering (IPO) issue sizes for large Indian companies to strengthen an already impressive pipeline of share sales that could hit a record this year. SEBI decided to allocate a quota to insurance companies and pension funds in the anchor books of IPOs, while reducing the minimum investment limit in long-value private equity (PE) funds to boost investor participation, among several steps to bolster the capital markets. The regulator said sovereign wealth funds and overseas retail funds will be able to access domestic markets via an automatic window. This single clearance window enables simplified registration across multiple investment routes and reduced compliance requirements. As per SEBI’s assessment, this rule will cover 70% of 11,913 registered FPIs. These manage assets worth Rs 81 lakh crore in the country. These amendments are expected to broaden anchor investor participation by easing participation for large FPIs operating multiple funds, thus enabling more diversified anchor books and aligning with global best practices.
Global Innovation Index – The Global Innovation Index (GII) ranks 139 world economies according to their innovation capabilities. In its 18th edition, India ranks 38th overall, from 39th last year, and a 10-place jump from 2020 (48). Consisting of roughly 80 indicators, grouped into innovation inputs and outputs, the GII aims to capture the multi-dimensional facets of innovation. India continues to lead innovation within the Central and Southern Asia region and remains the top-performing lower-middle-income economy. Its strengths lie in its scale, entrepreneurial activity and a growing ability to translate scientific knowledge into commercial impact. India ranks 1st in ICT services exports and boasts a strong business landscape supported by a dynamic VC scene. It ranks 4th in Late-stage VC deals and 9th in Finance for startups and scaleups. Indian Unicorn valuation (11th) and its growing Intangible asset intensity (8th), reflect its knowledge and tech-driven economy. Yet, challenges remain. India continues to lag in Infrastructure and R&D spending, equal to only 0.65 per cent of its GDP in 2020, reflecting the need for further investment. Two clusters in India enter the global top 30: Bengaluru (21st) and Delhi (26th). India and Viet Nam remain the longest-standing overperformers, exceeding expectations for their level of development for the 15th consecutive year.
Draft Data Protection Rules – The draft digital personal data protection rules are now in the final stages of review and likely to be published soon. There are several media reports citing authorities from the Ministry of Electronics and Information Technology confirming this update. These draft rules were published in early 2025, and a total of 6,915 feedback/inputs have been received from citizens and stakeholders, as reported by Asia Law Portal.
