PM’s Two-Nation Visit
AI, defence and trade were the highlights in Prime Minister Narendra Modi’s four-day trip to France and the US. In France, the PM co-chaired the AI Action Summit at the invitation of President Emmanuel Macron.
The PM’s first trip to Washington, DC under US President Donald Trump’s second term was a business-first affair as both sides agreed to increase trade, through partnerships on space travel, AI and energy production, and finalise a new defence framework.
The visit took place in the shadow of President Trump’s order that US trade partners will face sweeping reciprocal tariffs. While both countries announced that two-way trade would more than double to $500bn by 2030, it is not clear yet if India will be exempt from reciprocal tariffs. For the time being, India has cut import duties on many items and committed to enhancing trade through increased purchase of oil and gas, which is expected to lower the US’ trade deficit with India.
Simplifying Direct Tax Structure
The new Income Tax Bill pares down the existing six-decade-old Act by streamlining provisions and removing obsolete references, while maintaining continuity in the direct taxation structure.
A major change is the introduction of the concept of ‘tax year’ in place of ‘assessment year’. But while the Bill is close to half the size of the law, tax experts say that it lacks major tweaks and has only made the law more concise by removing redundant explanations.
Trump Effect Triggers FPI Sell-off
It has been the worst start to a calendar year for domestic markets in nearly a decade with foreign portfolio investors selling off more than Rs 1 lakh crore worth of equities in the first two months of 2025. The sell-off has been driven by a combination of a shift in US policies, slow corporate earnings and a rise in US bond yields.
