Short Stories: Your Monthly Business Wrap for June

Rates, Repos, Reset

The RBI monetary policy committee has cut the repo rate for the third time straight by 50 basis points, bringing it down to 5.5%. Governor Sanjay Malhotra announced that inflation is now projected at 3.7% for FY26, with GDP growth retained at 6.5%. The move is expected to lower lending rates and boost bond prices.

The decision follows a review of macroeconomic trends and aims to insulate India’s economy from global headwinds and restore domestic momentum. The rate cut was welcomed by the real estate sector, which expects increased housing demand and improved affordability.

Space Race Begins

Elon Musk’s Starlink has secured a satcom licence from the Indian government after a nearly three-year-long wait. The milestone brings the company closer to launching commercial operations in the country. The licence, granted after security clearance, positions Starlink alongside OneWeb and Reliance Jio as a key player. The satcom market is now bracing for pricing battles, with Trai’s proposed charges facing resistance.

Slipping Core Signals

India’s core sector growth slipped to a nine-month low of 0.7% in May, down from 1% in April and 6.9% a year earlier. Fertiliser, electricity and natural gas output declined sharply. Economists say this dip will likely drag industrial output, with IIP growth projected at 1.5–2.5%. Cement and steel offered some cushion, driven by government-led capex. Analysts have cautioned that weak momentum in key sectors may persist if infrastructure growth slows.

No MDR on UPI

The finance ministry has reaffirmed that UPI transactions will not attract a merchant discount rate (MDR). The ministry also dismissed rumours around MDR as “false, baseless and misleading”. MDR on RuPay debit cards and Bhim-UPI transactions had been scrapped in January 2020 to promote digital transactions.

Momentum Slips Slightly

The World Bank has revised India’s FY26 growth forecast to 6.3%, down from 6.7% projected in January, citing subdued exports and slower investments. Despite the downgrade, India remains the fastest-growing major economy globally. The cut mirrors a broader global economic slowdown, with global growth trimmed to 2.3% amid rising trade barriers and policy uncertainty. High borrowing costs and muted consumption also weigh on India’s outlook, though recovery is expected as domestic reforms gain traction.

Ticking Tax Clock

In a move aimed at enforcing stricter compliance timelines, taxpayers will be blocked from filing GST returns more than three years past their original due date, starting July 2025, the GSTN has announced. For the July tax period, returns will be filed in August. GSTN advises taxpayers to reconcile records and file pending returns soon, as this provision was first flagged in October 2024.

Leadership Reshuffle

The government has appointed RBI deputy governor T Rabi Sankar as a part-time member of the 16th Finance Commission, following the resignation of former finance secretary Ajay Narayan Jha. Sankar will serve until October 31, 2025. Meanwhile, Sat Pal Bhanoo has been given additional charge as LIC MD and chief executive. Bhanoo is the seniormost among LIC’s four MDs. The appointment gives Bhanoo full financial and administrative powers of the CEO.

Climate Meets Capital

L&T has become the first Indian company to issue an ESG bond under Sebi’s new sustainability-linked bond framework, raising ₹500 crore with HSBC as the sole arranger. While this is a milestone in aligning finance with climate goals, the move also signals increasing regulatory pressure on corporates to walk the sustainability talk. L&T’s ESG bond demands accountability not just green branding.

Dumping Days Over

India has imposed a five-year anti-dumping duty on aluminium foil, pretilachlor and acetonitrile imported from China, Taiwan and Russia. The move, based on findings by the Directorate General of Trade Remedies, aims to protect manufacturers from unfair pricing practices.

Deals, Data, Diplomacy

Assocham and Switzerland’s Swissmem have signed a three-year strategic partnership, with a key focus on MSMEs. Inked during the Swissmem Industry Day in Bern, the MoU aims to boost trade, investment and technology transfer by facilitating joint ventures, industrial exhibitions and cross-border knowledge sharing—particularly in mechanical and electrical engineering. The agreement also provides for IP co-ownership and confidentiality, creating structured global growth opportunities for Indian MSMEs and strengthening bilateral economic ties.