Development Watch – Week #3 Aug’25

Development News

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$48 billion of India’s export goods subject to US tariffs

If the USA imposes additional 25 per cent on India, around $48.2 billion of India’s merchandise export to the US is likely to be subject to those tariffs, according to the Parliament. Reciprocal tariff at the rate of 25% has been imposed on certain goods exported from India to the US starting from August 7, 2025. Further, additional ad valorem rate of duty of 25% with effect from August 27, has been imposed on certain goods exported from India. Government is committed to secure and advance country’s national interest and protect the welfare of our farmers, workers, entrepreneurs, exporters, MSMEs and all sections of industry and take all necessary steps to help mitigate impact on trade including through appropriate export promotion and trade diversification measures. India and the US are negotiating a multi-sector Bilateral Trade Agreement (BTA). So far, five rounds of talks have been completed between the two countries on the proposed BTA. US has announced countervailing duties (CVD) on export of Melamine, Hexamine, Epoxy Resins, Ceramic Tile, Hard Empty Capsules, Overhead Door Counterbalance Torsion Springs, and High Chrome Cast Iron Grinding Media from India in the period January to July 2025.

Indian Oil MoU with Air India for sustainable fuel

Indian Oil Corporation (IOC) has signed a landmark agreement to supply sustainable aviation fuel to Air India, representing a significant step towards a greener and cleaner aviation in India. IOC plans to begin production of sustainable aviation fuel (SAF) from used cooking oil starting December this year at its Panipat refinery. SAF is an alternative fuel made from non-petroleum feedstocks that reduces emissions from air transportation. It can be blended up to 50 per cent in conventional aviation turbine fuel (ATF or jet fuel), depending on availability. India has mandated 1 per cent SAF blending in jet fuel sold to international airlines from 2027.

Deutsche Bahn interest in high speed trains

Deutsche Bahn (DB) is exploring opportunities to operate and maintain high-speed trains in India, including potential involvement in bullet train projects. DB has already engaged in discussions with Indian authorities regarding these high-speed initiatives. Furthermore, the company aims to expand its presence in India’s Regional Rapid Transit System (RRTS) and is also leveraging AI for railway operations and maintenance. DB holds the operations and maintenance (O&M) mandate for Delhi-Meerut RRTS corridor. It handles over 50,000 passengers daily, peaking at 75,000-80,000 during rush days. On the benefits of artificial intelligence (AI) for railways, Niko said DB recently introduced Digital Workforce Management to optimize scheduling, vacation planning, and shift assignments.

Infrastructure boost in outer Delhi

The Dwarka Expressway and UER II are poised to significantly benefit Delhi’s peripheral areas, making them more attractive to homebuyers as central areas become increasingly expensive. The opening of the Dwarka Expressway and Urban Extension Road (UER) II is set to provide a major boost to peripheral areas of Delhi as the main cities are becoming unaffordable to home buyers. Areas such as Sonipat, Panipat, and Kundli stand to gain from UER, which will provide easier access to the Delhi airport. The inauguration of the Urban Extension Road (UER) II, also known as Delhi’s third Ring Road, complementing the fully operational 29-km Dwarka Expressway.

India, China and Japan drive 90% demand

India, China, and Japan drove over 90% of the demand during H1 2025. New supply across the 11 APAC markets rose by 45.4% to 4.8 million square metres (51.7 million square feet). Office leasing across 11 key markets reached 4.5 million square metres (48.4 million square feet)in the first half of the year – a 9.6% year-on-year increase – reflecting a broader recalibration of workplace strategies. Markets monitored included Australia, Mainland China, Hong Kong, India, Indonesia, Japan, New Zealand, Philippines, Singapore, South Korea and Taiwan, said Colliers’ new report, Asia Pacific Office Market Insight H1 2025. The Philippines and Japan recorded robust year-on-year gains of 56% and 55% respectively. Meanwhile, India, Mainland China and Japan continued to anchor regional activity, collectively accounting for more than 90% of total office demand, it mentioned.

Govt to boost Maritime Development Fund to Rs. 70,000 Crores

The government is scaling up the proposed Maritime Development Fund (MDF) to ₹70,000 crore, 2.8 times the allocation in the February Budget. It will support shipyards, ship repair, ancillaries, expand shipping tonnage, and port-linked infrastructure. The larger MDF was recently cleared by the Expenditure Finance Committee (EFC) headed by the Finance Ministry’s Expenditure Secretary. The EFC reviews proposals involving over ₹500 crore to assess their financial viability and impact. By 2047, India’s maritime sector will need investment between $885 billion and $940 billion. The Maritime Development Fund will follow a blended finance model with 49% concessional capital from the government, including contributions from state-owned major ports. It will balance risk-return profiles of diverse investors and the balance 51% commercial capital from multilateral/bilateral lenders and sovereign funds. Deendayal Port Authority Kandla is spearheading initiatives to foster the growth of methanol, green ammonia, and green hydrogen sectors, aiming for a prominent position on the global maritime stage. Declared a green hydrogen hub, DPA Kandla is actively promoting a green hydrogen ecosystem, with major industrial partners establishing giga-scale plants. The Parliament has also approved the Indian Ports Bill, 2025, aiming to elevate India’s maritime operations to global standards.

Curbing solar power output for grid stability

India is reducing solar power generation during periods of low demand to stabilize the grid and alleviate power line congestion, according to the Ministry of New and Renewable Energy. This curtailment has led to significant revenue losses for solar producers, particularly in Rajasthan. This is due to delayed transmission projects and a slowdown in power demand. Congestion in power lines due to some new plants coming into operation ahead of schedule and delayed transmission projects have also forced power output curbs, known as curtailment. Rajasthan, the top green power producing state, were facing prolonged and frequent curtailments, which had risen to 48% of output during peak generation hours. The producers have lost more than $26 million in revenue since April due to the curbs.