Fiscal consolidation: government commits to a strict fiscal deficit target and measures to stabilize external financing.
The government commits to strict fiscal consolidation with a defined fiscal deficit ceiling and to fully finance the current account without drawing on reserves. Policy measures include compressing non essential imports (notably gold), boosting exports via increased incentives and funding, attracting stable foreign financing through FDI liberalisation, public sector fund raising abroad, NRI and institutional investor engagement, and calibrated liberalisation of longer term ECBs in consultation with the central bank.

Interest subvention rate increased for exporters, expanding eligible sectors and directing immediate clearance of pending claims.
An administrative increase in the Interest Subvention rate for exporters' credit has been announced, maintaining eligibility for all micro and small enterprise exporters and specified sectoral beneficiaries (handlooms, handicrafts, carpets, toys and sports goods, processed agricultural products, readymade garments, selected engineering tariff lines and certain textile made-ups). The government has directed immediate clearance of pending claims and scheduled a Board of Trade review to assess the export environment and implementation implications.

Monetary policy trilemma: limited discretion to counter external volatility while balancing growth support and inflation control.
The Reserve Bank kept key policy rates and the cash reserve ratio unchanged while maintaining the MSF markup, adopting a stance to address external shocks, support growth, guard against inflation, and manage liquidity to ensure credit flow. Liquidity tightening measures were used to stabilise the foreign exchange market and will be calibrated back as stability returns. Growth was revised down amid weak industrial activity; inflation will be guided toward the Bank's stated level by the target date using all instruments. Principal risks include external financial volatility, a large current account deficit, weak investment conditions, and supply constraints.

Monetary policy: repo rate unchanged at 7.25% amid FX volatility; liquidity tightening and gold import curbs deployed.
The Reserve Bank maintains a cautious monetary policy stance to restore foreign exchange stability amid capital outflows while managing growth and inflation risks. Operational measures include keeping the repo rate at 7.25%, reverse repo at 6.25%, MSF and bank rate at 10.25%, CRR at 4.0%, restricting LAF access (aggregate and bank-level limits), open market sales, a special repo window for mutual funds, tighter currency derivative norms, and gold import rationalisation with a 20/80 export availability requirement.

Monetary policy recalibration to restore exchange rate stability and manage inflationary and macro financial risks proactively.
Reserve Bank of India identifies heightened macro financial risks warranting a cautious monetary stance: slow recovery supported by monsoon, weak industrial activity and slack aggregate demand, alongside a still-large CAD and deteriorating external financing indicators. Contagion from global bond re pricing increased financial market volatility, prompting Reserve Bank measures to stabilise the exchange rate and tighten liquidity through higher facility rates, restricted LAF access, raised daily reserve maintenance and open market sales. Headline WPI inflation moderated but CPI remains elevated, with currency depreciation and fuel price risks noted.

Market economy status sought under antidumping rules while long-term potash supply cooperation and sectoral MoUs advance.
The Commission advanced sectoral trade cooperation, focusing on securing long-term supply agreements for potash with volumes and terms to be finalised between the Belarusian potash producer and an Indian counterpart to be nominated by the Government of India. India and Belarus signed a Protocol and agreed to negotiate a textiles MoU. Belarus requested recognition as a market economy and revocation of antidumping duties; India stated the request is under consideration within its antidumping rules. Parties also agreed to create a Belarusian software Certification Centre and schedule business promotion events.

National Manufacturing Policy acceleration to fast track NMIZ development and align tax and labour provisions for manufacturing growth.
The Manufacturing Industry Promotion Board directed acceleration of National Manufacturing Policy implementation and NIMZ development, endorsed lodging the Technology Acquisition and Development Fund within the Global Innovation and Technology Alliance to operationalise the Fund, instructed the Ministry of Labour to convene a tripartite meeting to finalise an Industrial Disputes Act amendment, required the Department of Revenue to include NMP approved capital gains tax relief in the Direct Tax Code Bill, and tasked the Department of Heavy Industry and the National Manufacturing Competitiveness Council to propose measures and identify tariff lines to strengthen the capital goods sector.

Export-reserved allocation for gold imports requires nominated banks to reserve a portion and limit domestic supply to jewellers.
Imports of gold in any form or purity, including coins and dore, must be allocated so that nominated banks and nominated agencies reserve a portion of each lot exclusively for export; domestic supply is permitted only to jewellery businesses and bullion dealers supplying jewellers, and nominated entities must ensure compliance with these instructions when handling related foreign exchange transactions.

Current account deficit management: demand restraint, fuel price correction, export push and structural reforms to restore macro stability.
The speech sets a macroeconomic strategy to address exchange rate volatility and a high current account deficit by combining demand side restraint on gold and petroleum imports, continued fuel price correction to eliminate under recoveries, and supply side export promotion aided by a depreciated currency; monetary measures target short term speculative pressures while fiscal consolidation, public investment in infrastructure, project facilitation, and a package of regulatory reforms and FDI liberalisation are deployed to revive investment and growth.

Trade Diversification: seeking African markets to counter engineering export decline and boost bilateral trade and investment.
Sharp contraction in engineering exports led Commerce, MEA and EEPC India to pursue trade diversification into African markets through diplomatic engagement, business outreach, and trade-promotion events. Several heavy engineering segments showed significant declines and most panels recorded negative growth; the strategy aims to leverage India-Africa trade synergies, firm participation in trade shows, and bilateral commercial facilitation to arrest export decline and expand engineering market access.

Violation of KYC/AML norms leads to monetary penalties and cautionary letters under banking regulatory powers.
Reserve Bank of India imposed monetary penalties on twenty-two banks and issued cautionary letters to seven others for violations mainly concerning KYC and AML requirements, invoking powers under Section 47A(1)(c) read with Section 46(4)(i) of the Banking Regulation Act, 1949. On-site scrutiny revealed deficiencies in customer identification, risk categorisation and KYC updation, transaction monitoring, filing of cash transaction reports, adherence to cash limits for certain sales and remittances, and rules on remittances and import of gold. Show-cause notices were issued and banks' submissions considered before sanctions or cautionary letters were applied.

Intellectual property regime affirmed as TRIPs compliant; patent ruling characterised as judicial, reassuring foreign investors.
The Minister affirmed that India's Intellectual Property laws are TRIPs compliant and that the Novartis decision was a judicial ruling, addressing patent-protection concerns; he also promoted foreign investment by outlining opportunities under the National Manufacturing Policy and National Investment and Manufacturing Zones and urged French support for the India-EU BTIA to enhance bilateral trade and investment.

Focus Product Scheme: High-tech products gain export incentive for eligible shipments, effective from notified export commencement date.
Inclusion of specified high-technology items in the Focus Product Scheme provides an export incentive equal to 2% of FOB value for qualifying shipments; a Task Force and stakeholder consultations recommended adding 158 products from engineering, electronics, chemical and pharmaceutical sectors, with the incentive applicable from the notified commencement date and implemented via a separate foreign trade notification.

India's software and IT services exports reached Rs.2,484.3bn in 2011-12, led by computer services and USD invoicing.
The RBI's annual survey for April 2011-March 2012 collected firm level invoice values by activity, service type, currency, country and GATS mode, covering 731 firms (~81% of export value), and reported Rs. 2,484.3 billion (US$51.8 billion) in software and ITES/BPO exports-75.2% from computer services and 24.8% from ITES/BPO-with USD as the principal invoice currency (76.4%), increased off site delivery (82.2%), and consolidated international trade including foreign affiliates at Rs. 2,937.7 billion.

Oil supply commitment assured to Mauritius, alongside export certification for basmati and coordinated textile cooperation measures.
India reaffirmed commitment to uninterrupted petroleum supplies to Mauritius under a renewed MRPL supply agreement and advanced regulatory arrangements for agricultural exports by nominating the Export Inspection Council to issue a Certificate of Authenticity for basmati rice, forwarding a draft recognition agreement for Mauritius, and harmonising domestic standards. The document also records five textile sector MoUs, a Letter of Intent for workforce training and a DISHA style compliance code, cooperation on mango standards, consideration of visa liberalisation, and a negotiating emphasis that Trade Facilitation be balanced with development concerns such as food security.

Foreign direct investment approvals: government cleared sectoral FDI proposals enabling JV, LLP, WLA and telecom entries.
Government action on foreign investment applications: the Foreign Investment Promotion Board recommended approval of eight FDI proposals across sectors-White Label ATMs, downstream commodity broking, additional WLA activity, increased foreign equity infusion, an LLP for software services, duty free operations, a wholly foreign-owned manufacturing entrant, and a telecom joint venture-aggregating approximately Rs.1311.54 crore; ten proposals were deferred, six rejected, two advised to use the automatic route, one withdrawn, one advised to apply for approval, one partially rejected/automatic-route, and one decision pending.

Service tax exemption for SEZ units: ab initio relief or refund available for services used in authorised operations.
SEZ units and Developers may obtain either ab initio exemption or refund of service tax, education cess and secondary and higher education cess on specified services received and used for authorised operations. Ab initio exemption requires Approval Committee clearance of specified services, a Form A 1 declaration verified by the SEZ Specified Officer, authorisation in Form A 2 from the jurisdictional Commissioner, provision of that authorisation to the service provider, quarterly Form A 3 statements, and an undertaking to repay tax with interest if exclusive use for authorised operations is not maintained. Refunds for non exclusive use follow distribution under rule 7 of the Cenvat Credit Rules and require Form A 4 claims and documentary payment proof.

Corporate Social Responsibility donation to Prime Minister's National Relief Fund aids Uttarakhand flood relief via corporate contribution.
The Chairman cum Managing Director of the Export Credit Guarantee Corporation of India handed over a cheque of Rs. Five Crore to the Union Minister for Commerce and Industry as a contribution to the Prime Minister's National Relief Fund for Uttarakhand flood relief, and the payment was made from the Corporation's Corporate Social Responsibility funds.

Export promotion focused on high tech and value added goods, paired with credit support and streamlined port clearances.
The ministerial consultation addresses export weaknesses affecting the current account deficit and proposes policy and administrative measures to boost exports, prioritize value added and high tech products, and expand incentive schemes. Operational priorities include providing a differential credit rate or enhanced interest subvention for exporters, reducing transaction costs via Electronic Data Exchange, and implementing round the clock customs clearance at major ports, with particular focus on SME exporters and coordination with finance and executive leadership for further action.

Index of Eight Core Industries records 2.3% growth in May 2013, led down by coal, crude oil and natural gas declines.
The Index of Eight Core Industries (weight 37.90% in IIP) stood at 159.2 in May 2013 with 2.3% growth year on year, down from 7.2% in May 2012; the decline was mainly due to negative growth in Coal, Crude Oil, Natural Gas and Fertilizer, while Steel, Cement, Electricity and refinery products registered positive but softer gains. Data are provisional and include prorated SEZ refinery figures.