Fiscal deficit down to 0.8% of FY26 target in April-May (The Economic Times)
India’s fiscal deficit stood at just 0.8% of the annual target in April-May 2025, the lowest since at least 1997, primarily due to a record ₹2.69 lakh crore dividend from the RBI that led to a rare fiscal surplus of ₹1.73 lakh crore in May. Total revenue rose 24% year-on-year—more than double the budgeted 10%—driven by a 42% surge in non-tax revenue and steady 10% growth in tax collections, while capital expenditure jumped 54% to ₹2.21 lakh crore. With strong receipts, analysts expect the Centre may boost capital spending by an additional ₹80,000 crore this fiscal, raising total capex to nearly ₹12 lakh crore and keeping the 4.4% fiscal deficit target for FY26 well within reach.
FM Nirmala Sitharaman calls for reforms in global sovereign rating methodologies (The Economic Times)
Finance Minister Nirmala Sitharaman has urged global rating agencies to reform their methodologies, arguing that current models understate India’s macroeconomic stability and long-term structural strengths. Despite being the world’s fifth-largest economy and maintaining the highest growth rate among major economies since 2021–22—with IMF projections of 6.2% growth this year and 6.3% in FY27—India continues to receive the lowest investment-grade ratings (BBB- or Baa3) from S&P, Moody’s, and Fitch. She emphasised that fairer ratings could lower borrowing costs and attract greater private investment, especially for emerging markets and developing economies.
US trade talks at crucial stage; India sticks to agriculture, dairy stand (The Economic Times)
India-US trade talks have reached a critical stage as New Delhi remains firm on protecting domestic interests in agriculture, GM crops, and dairy, despite US pressure for greater market access in these sectors. Negotiators are aiming to finalise a phased trade deal before July 9, when a 26% reciprocal tariff imposed by the Trump administration is set to take effect, although a baseline 10% tariff will still apply. India has made it clear that its red lines—particularly those safeguarding small and subsistence farmers—will not be compromised, even as both sides push to conclude the initial phase of the agreement.
Goyal discusses FTAs with industry, exporters ahead of key trade talks (Business Standard)
Commerce and Industry Minister Piyush Goyal met with export councils and industry bodies to assess how recent free trade agreements are creating export opportunities while also addressing challenges in utilizing earlier trade pacts. The meeting comes as India intensifies negotiations with the US, EU, UK, and other nations, aiming to finalize key trade agreements, including a bilateral deal with the US and a comprehensive pact with the EU by December. The session also reviewed Special Economic Zones (SEZs) reforms aimed at boosting scale and efficiency to help meet India’s target of becoming a $5 trillion economy by 2027.
