Weekly Finance Roundup: India’s Big Moves in Trade, Tax & Markets (Week 37, Sep 7 – Sep 13)

India’s financial ecosystem has been buzzing with activity this week, from major trade policy announcements to a sweeping tax overhaul and big-ticket corporate moves. For students, professionals, and market watchers, these developments offer crucial insights into how India is positioning itself for sustained growth in a volatile global economy.

Whether you’re tracking trade balances, foreign portfolio flows, or M&A activity, understanding these shifts is key to building informed perspectives on markets and policy. For learners pursuing an investment banking course, these events serve as real-world case studies on how government decisions, corporate strategy, and investor behavior intersect to shape financial outcomes.

This week, we cover India’s support package for exporters hit by U.S. tariffs, Amazon’s entry into India’s direct lending space, and why foreign investors pulled out the highest amount from Indian financial stocks in seven months. Let’s dive into the details.

India’s Support for Exporters Amid U.S. Tariffs

Image source: INC42

India’s Finance Minister, Nirmala Sitharaman, announced a targeted relief package for exporters impacted by the recent 50% tariff hike by the U.S. on select Indian goods. This comes as a much-needed cushion for sectors like textiles, chemicals, and auto components, which were expected to take a significant hit due to reduced price competitiveness in global markets.

The government’s plan reportedly includes interest subvention schemes, faster GST refunds, and sector-specific incentives aimed at minimizing export slowdown. Such measures are crucial at a time when global trade tensions are running high, and maintaining India’s share in export markets is key to sustaining GDP growth.

According to Reuters, this move is expected to help India’s export-driven sectors stay competitive and protect thousands of jobs. It also signals India’s commitment to supporting its manufacturing sector as it strives to reach its ambitious $1 trillion export target by 2030.

Also read: Understanding the 25% Tariff Impact Through the Lens of Financial Modeling

A slight rise in India’s retail inflation, but it might leave room for lower rates

Closer to home, India had a slight uptick in retail inflation, as CPI rose to 2.07% in August from 1.61% in July, largely because of slower falls in food prices, especially in vegetables, meat and eggs, according to Reuters.

Even with the run-up in inflation, it is still comfortably sitting in the RBI’s 2-6% target band, which should give flexibility for the RBI to cut rates if the economy slows as projected in the next several quarters. Another World Bank report video suggested projected GDP growth for India of about 6.4% for FY2025-26, however, external risks and challenges, especially weak global demand and high energy prices, could put downward pressure on that growth momentum.

Amazon’s Axio Acquisition – Big Tech Bets on India’s Lending Market

In a major development for India’s fintech ecosystem, Amazon has completed its acquisition of Axio, a Bengaluru-based digital lending platform. This deal gives Amazon direct access to the highly competitive lending space in India, enabling it to offer embedded finance products to its massive user base.

Image source: INC42

The acquisition is significant because it could reshape the way credit is distributed in India, particularly for small and medium businesses that face challenges accessing traditional bank loans. With this move, Amazon can integrate credit offerings into its e-commerce ecosyste

m, encouraging more spending and supporting small sellers on its platform.

For finance students and professionals, this deal presents a great case study in valuation and synergy analysis. In fact, learners in a financial modeling course could use such acquisitions to practice building discounted cash flow (DCF) models, analyzing deal multiples, and assessing post-merger integration benefits.

Reuters reports that Amazon’s fintech play comes at a time when digital credit demand in India is expected to grow at a CAGR of over 20% in the next five years.

FPI Outflows Hit 7-Month High – Market Mood Turns Cautious

Foreign Portfolio Investors (FPIs) pulled out nearly ₹23,290 crore ($2.7 billion) from India’s financial sector stocks in August, the highest monthly outflow in seven months. This selling spree was largely attributed to concerns over narrowing net interest margins in banks, rising global bond yields, and a general shift toward safer assets.

Such large-scale outflows often create temporary pressure on equity markets, especially in sectors like banking and NBFCs, which have high FPI ownership. However, market experts believe this could present a buy-on-dips opportunity for long-term investors as India’s economic fundamentals remain intact.

As reported by Reuters, domestic institutional investors (DIIs) have been net buyers during the same period, partially offsetting the FPI exodus. This highlights the growing role of domestic capital in stabilizing Indian markets.

GST 2.0 – Major Tax Overhaul to Boost Growth

In one of the most significant tax reforms since the launch of the Goods and Services Tax (GST) in 2017, India has rolled out what experts are calling “GST 2.0.” This reform simplifies the indirect tax structure by eliminating the 12% and 28% slabs, replacing them with a dual-rate system of 5% and 18%, while also introducing a new 40% slab for luxury and sin goods.

Additionally, health and life insurance premiums are now exempt from GST, making them more affordable and encouraging wider adoption of insurance in India, a critical step toward improving financial security for citizens.

This simplification is expected to significantly reduce compliance burdens for businesses, improve tax collections, and stimulate consumer demand, particularly in sectors like FMCG, automobiles, and electronics. According to FT, the timing of the reform, just ahead of the festive season, is strategic and could give a timely boost to consumption-driven growth.

Also read: The Latest GST Reforms – What Businesses and Professionals Must Know

China Intensifies Fiscal Reforms to Jumpstart Consumption & Investment

At the heart of global economic focus is once again China following Finance Minister Lan Foan’s announcement of deepening fiscal reforms and enacting focused regional policies for consumption and investment. According to a report from Reuters, this is Beijing’s reaction to waning economic growth, which has been under pressure from a drawn-out downturn in property and diminished demand for exports.

The government’s proposed plan includes better coordination of policy measures between the central and local governments, tax relief for households and small businesses, and increased infrastructure spending to catalyze and support future growth. This comes in the wake of China’s local government hidden debt, which, according to IMF reports, ranges over $13 trillion.

FSDC’s Warning – Risks to Financial Stability

The sub-panel of the Financial Stability and Development Council (FSDC) recently flagged emerging risks to India’s financial system. The report pointed to potential vulnerabilities arising from the rapid growth of fintech credit, increased exposure to unsecured loans, and evolving cyber risks in the financial sector.

While India’s banking system is currently well-capitalized, the FSDC has recommended continuous stress testing, enhanced cybersecurity measures, and tighter oversight of shadow banking entities. According to Fortune India, these recommendations are aimed at ensuring that India’s strong growth trajectory is not derailed by systemic shocks.

For students and professionals, this is a reminder of why risk management frameworks are critical in financial planning and why careers in regulatory compliance, risk analysis, and cybersecurity are becoming increasingly important.

Key Takeaways for Students & Finance Professionals

This week’s developments underscore how interconnected India’s financial system is with global and domestic trends. The government’s tariff relief measures protect exporters, Amazon’s Axio deal highlights the opportunities in fintech lending, FPI outflows serve as a barometer of global investor sentiment, and GST 2.0 signals a renewed push toward fiscal simplification.

For aspiring finance professionals, analyzing these trends can build strong macroeconomic awareness. Students can use such real-world case studies to enhance their understanding of topics covered in programs like an investment banking course, which often focus on policy analysis, M&A activity, and capital markets behavior. Similarly, hands-on exercises from a financial modeling course can help learners translate this news into actionable insights, such as building models to assess the impact of GST changes on sector profitability.

Conclusion – The Road Ahead

India’s financial sector continues to evolve rapidly, shaped by proactive policy changes, global trade dynamics, and corporate innovation. The coming months may bring market volatility as investors digest these changes, but the long-term picture remains optimistic with strong domestic demand and a government committed to economic reforms.

Staying informed through weekly roundups like this helps finance students, professionals, and investors make smarter, data-backed decisions. As India moves closer to its $5 trillion economy vision, keeping an eye on trade policies, tax reforms, and market flows will be key to spotting both opportunities and risks ahead.

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