Daily News - Wednesday, 29 January 2025

⁠India, Oman to amend tax treaty, speed up trade pact (Financial Express)

India and Oman signed a protocol to amend their 1997 Double Taxation Avoidance Agreement (DTAA) to align with global tax standards, simplify procedures, and strengthen cooperation, alongside expediting talks for an early signing of the Comprehensive Economic Partnership Agreement (CEPA). The CEPA, which surpasses India’s deal with the UAE in scope and liberalization, will grant India access to 98% of its products in Oman and significant service sector benefits, with negotiations completed in March 2024 but delayed for review. During his visit, Commerce Minister Piyush Goyal co-chaired the 11th India-Oman Joint Commission Meeting, met top Omani officials, and discussed enhancing trade, investment, technology, food security, and renewable energy collaboration. 

⁠India, China agree to resume air travel (mint)

India and China have agreed to resume direct air services after nearly five years and are working on resolving trade and economic differences, signalling a thaw in relations after the 2020 border clash. The decision follows a meeting between India’s Foreign Secretary Vikram Misri and China’s Foreign Minister Wang Yi in Beijing, where both sides discussed economic concerns to enhance policy transparency and predictability. With sluggish economic growth and rising trade threats from the U.S., China sees India as a crucial market, while India seeks Chinese expertise, components, and machinery to boost exports and sustain economic momentum. 

New incentives to tap Trump’s China stance weighed (mint)

The Indian government is considering fiscal incentives, including a revised 15% concessional corporate tax scheme, to attract fresh investments amid U.S. President Donald Trump’s anti-China stance and to sustain economic growth. With India’s GDP slowing to 5.4% in Q2 2024-25 and FY25 growth projected at 6.4%—a four-year low—these incentives aim to boost manufacturing, create jobs, and counter the impact of sluggish domestic and global demand. The revised scheme, potentially featuring in the Union Budget on February 1, may extend beyond manufacturing to select service sectors, ensuring targeted economic stimulus. 

Nearly $2 bn earmarked for critical minerals sector (mint)

⁠India’s mines ministry has earmarked nearly $2 billion (₹16,300 crore) to develop its critical minerals sector, focusing on securing raw materials like lithium to reduce import dependence and support energy transition efforts. Prime Minister Narendra Modi’s cabinet is expected to approve an initial $300 million this week, with funding contributions from the National Mineral Exploration Trust (₹8,700 crore), the Department of Science and Technology (₹1,000 crore), and the Geological Survey of India (₹4,000 crore). The funds will be used for exploration, R&D, and a proposed production-linked incentive scheme to boost investment in critical mineral processing, though final details are still under discussion. 

Sri Lanka in talks with Adani group to lower cost of power (Business Standard)

The Sri Lankan government has begun talks with Adani Group to lower the power tariff for two wind energy projects in the northern province, aiming to reduce the price from $0.08 to $0.06 per kWh or lower. Despite U.S. bribery allegations, which Adani has denied, the company maintains that its $1 billion green energy investment in Sri Lanka remains intact, with the $442 million wind power deal undergoing a standard tariff review by the new government. Sri Lanka is pushing for faster renewable energy adoption to reduce reliance on costly fuel imports and enhance energy security.