Digest for 30 August, 2025
US Appeals Court Rules Trump's Global Tariffs Illegal
A US federal appeals court has ruled that most of President Donald Trump's "reciprocal tariffs" are illegal, finding he overstepped his authority by using emergency economic powers. The court affirmed that only Congress holds the power for such sweeping duties. The decision impacts numerous trading partners, including India. However, the tariffs will remain in place temporarily to allow the Trump administration time to appeal to the Supreme Court, marking a significant setback for its aggressive trade policies.
India and Japan Deepen Strategic Ties with 10 Trillion Yen Investment Pledge
During a summit in Tokyo, India and Japan solidified their "Special Strategic and Global Partnership," with Japan pledging a 10 trillion yen (approx. ₹60,000 crores) investment in India over the next decade. The two nations signed 13 agreements, establishing a 10-year economic roadmap and frameworks for defence cooperation, supply chain resilience in sectors like semiconductors and clean energy, and a joint lunar exploration mission, Chandrayaan-5. The collaboration aims to bolster economic security and regional stability.
Rupee Breaches 88 Mark, Closes at All-Time Low Against US Dollar
The Indian rupee fell to a historic low, breaching the 88 mark for the first time to close at 88.09 against the US dollar. The sharp 51-paise decline is attributed to heightened trade tensions following the imposition of steep US tariffs on Indian goods, significant foreign fund outflows, and strong dollar demand from importers. The depreciation puts pressure on India's import-dependent sectors and could fuel inflation, impacting the broader economy and household costs.
Indian Economy Grows 7.8% in Q1, Fastest Pace in Five Quarters
India's Gross Domestic Product (GDP) grew by 7.8% in the April-June quarter of the 2025-26 financial year, marking its fastest pace in five quarters. The growth, which surpassed the RBI's projections, was primarily driven by a strong performance in the agriculture sector. With this result, India maintains its position as the world's fastest-growing major economy, significantly outpacing China's 5.2% growth during the same period, according to data from the National Statistical Office.
Opposition-Ruled States Demand 5-Year Compensation for Proposed GST Reforms
Finance ministers from eight opposition-ruled states have collectively demanded a five-year compensation package from the central government over proposed GST reforms. They estimate that consolidating the current four-tier structure into a two-tier system could cause an annual revenue loss of up to ₹2 lakh crore. The group plans to formally present its proposal, which also suggests an additional levy on sin and luxury goods to protect state finances, at the upcoming GST Council meeting.