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    India–Nepal Inter-Governmental Sub-Committee on Trade, Transit and Cooperation to Control Unauthorised Trade Meets in New Delhi
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September 18, 2026
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Customs cooperation and trade facilitation advance electronic origin verification, pre-arrival information exchange, and safeguards against preferential trade misuse.
Customs cooperation and trade facilitation measures included pre-arrival information exchange, electronic verification of Certificates of Origin, and Customs automation and digitalisation. These measures are directed at facilitating legitimate trade while ensuring compliance with applicable rules and preventing misuse of preferential trade arrangements. Rail and road connectivity, freight movement, Integrated Check Posts and land-port infrastructure were reviewed to improve infrastructure utilisation and address operational bottlenecks affecting bilateral and transit trade.
September 18, 2026
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Preferential equity issuance approved to strengthen capital, support digital lending expansion, and fund subsidiary operations subject to required approvals.
OnEMI Technology Solutions Limited has approved a preferential issue of equity shares to identified investors, subject to shareholder and requisite regulatory and statutory approvals. The issuance is proposed under the Companies Act, 2013, the SEBI capital-issue and disclosure framework, other applicable SEBI regulations, and applicable law. Seventy-five per cent of the additional capital raised is proposed for infusion into its wholly owned subsidiary to support lending, technology, digital capabilities and product expansion, while the remaining twenty-five per cent is proposed for general corporate purposes.
September 18, 2026
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Fraudulent input tax credit claims through bogus invoices prompted arrest over alleged invoicing without actual supply of goods.
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September 18, 2026
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September 18, 2026
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Reusable consent-based KYC enables integrated onboarding, reporting, record updates and periodic re-verification for regulated financial institutions.
Central KYC-based onboarding enables regulated financial institutions to reuse a customer's existing verified identity record through the Central KYC Registry with customer consent. The integrated solution supports onboarding, KYC reporting, unsolicited notifications and re-KYC. It retrieves consented KYC records through CKYC APIs, uses facial matching or video-based customer identification for authentication, and applies AI-based duplicate detection. Reporting automates validation, image correction and real-time registry submission, while record updates and simplified periodic re-verification support the currency of institutional KYC information.
September 18, 2026
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Benchmark interest rate normalisation raises borrowing costs while monetary policy monitors inflation, wage growth, currency risks, and economic recovery.
The Bank of Japan increased the uncollateralised overnight call rate from 1.0 per cent to 1.25 per cent, advancing monetary-policy normalisation after a prolonged period of near-zero or negative rates. The increase was assessed against gradual economic recovery, inflation near its target, wage growth, currency fluctuations, elevated crude oil prices, and external risks. Further tightening remains contingent on stable price increases, wage developments, and monitoring of other risks.
September 18, 2026
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Net direct-tax collections exceeded Rs 12.12 lakh crore through 17 September, reflecting 13 per cent growth following increased advance-tax receipts. Gross direct-tax collections exceeded Rs 14.32 lakh crore, while refunds exceeded Rs 2.20 lakh crore. Corporate-tax and non-corporate tax collections increased, as did Securities Transaction Tax collections. Advance-tax receipts exceeded Rs 5.22 lakh crore, comprising increased corporate advance tax and non-corporate advance tax payments.
September 18, 2026
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Upper-layer NBFC listing compliance sharpens corporate governance conflict over public accountability, shareholder liquidity, and preservation of private ownership.
Tata Sons' status as an upper-layer non-banking financial company has brought its proposed public listing into focus after the Reserve Bank of India rejected its application to voluntarily surrender core investment company registration. Tata Sons is required to take steps to comply with the enhanced regulatory framework applicable to upper-layer NBFCs, which includes stock-market listing. Classified in 2022, Tata Sons did not meet the original listing deadline and had pursued deregistration after repaying debt.
September 18, 2026
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Upper-layer NBFC compliance places Tata Sons on a listing-oriented path emphasising transparency, governance, shareholder visibility, and philanthropic continuity.
Reserve Bank of India rejection of Tata Sons' application to surrender its core investment company registration requires compliance with the upper-layer non-banking financial company regulatory framework. The resulting regulatory path is associated with public listing. Shapoor Mistry supports listing as a means to enhance transparency, shareholder visibility, and corporate governance accountability, while potentially clarifying the holding company's value and supporting a durable flow of value towards charitable activities without compromising Tata's philanthropic mission.
September 18, 2026
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Duty-free market access will cover all covered exports upon entry into force under the bilateral free trade agreement.
Upon entry into force, the India-New Zealand Free Trade Agreement grants duty-free access in New Zealand for 100 per cent of Indian exports, including textiles and apparel, leather and footwear, engineering goods, pharmaceuticals, agriculture, and processed food products. It also provides enhanced preferential access to the Indian market for specified New Zealand exports. The Agreement further covers services, investment, professional, student and youth mobility, and cooperation in agricultural productivity, pharmaceuticals and medical devices, traditional medicine and AYUSH, technology, and trade facilitation.
September 18, 2026
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Competition clearance for additional shareholding acquisition facilitates increased investment in Azure Power's renewable energy business by OMERS Infrastructure.
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September 18, 2026
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Competition approval for interconnected acquisitions enables shared equity acquisition in Great White and sole control acquisition in ITVIS.
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September 17, 2026
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September 17, 2026
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Secondary sanctions on Russian energy trade could expose major crude importers to punitive tariffs and economic pressure.
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September 17, 2026
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Trust-nominated director consent shapes the contested chairmanship reappointment as regulatory classification renews pressure to consider a stock-market listing.
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September 17, 2026
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September 17, 2026
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Board chair reappointment validity turns on mandatory nominee-director approval, amid separate listing-compliance and succession disputes.
Tata Sons' board reappointed its executive chairman by majority vote, but Tata Trusts contend that the resolution is void under the Articles of Association because both Trust-nominated directors must approve a chairmanship resolution. The dispute also concerns the effect of the chairman's earlier decision to step aside, an ongoing successor-selection process, and uncertainty over a nominee director's status following a failed general meeting. Separately, the rejection of Tata Sons' deregistration request has revived questions over compliance with the listing requirement applicable to an upper-layer non-banking financial company.
September 17, 2026
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Deep-sea fishing access supports export-oriented harvesting of high-value species, with foreign-port high-seas landings recognised as exports.
Deep-sea fishing policy promotes expansion of fishing operations within India's Exclusive Economic Zone (EEZ) and on the high seas to increase fisherfolk income through exports of high-value species. High-seas catch classification has been altered so that fish caught on the high seas and offloaded at a foreign port are treated as exports rather than imports.
September 17, 2026
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Merchant discount rate on eligible UPI payments places charges on merchants while preserving consumer protections and small merchant exemptions.
Merchant Discount Rate at 0.4 per cent will apply from October 15 to person-to-merchant UPI payments above Rs 2,000, payable by merchants and subject to a cap for high-value transactions. Individual transfers and most everyday merchant payments remain free, while eligible small QR-code merchants are exempt. Essential-service payments and capital-market transactions receive separate fee treatment, and a portion of MDR collections will support small-merchant UPI adoption.

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Customs, DGFT & SEZ

Third Bi-monthly Monetary Policy Statement, 2016-17 (By Dr. Raghuram G. Rajan, Governor)

August 9, 2016

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Monetary and Liquidity Measures

On the basis of an assessment of the current and evolving macroeconomic situation, it has been decided to:

  • keep the policy repo rate under the liquidity adjustment facility (LAF) unchanged at 6.5 per cent;
  • keep the cash reserve ratio (CRR) of scheduled banks unchanged at 4.0 per cent of net demand and time liabilities (NDTL); and
  • continue to provide liquidity as required but progressively lower the average ex ante liquidity deficit in the system from one per cent of NDTL to a position closer to neutrality.

Consequently, the reverse repo rate under the LAF will remain unchanged at 6.0 per cent, and the marginal standing facility (MSF) rate and the Bank Rate at 7.0 per cent.

Assessment

2. Since the second bi-monthly statement of June 2016, several developments have clouded the outlook for the global economy. Across advanced economies (AEs), growth in Q2 of 2016 has been slower than anticipated, and the outlook is still mixed. Headwinds in the United States from declining inventory investment were offset somewhat by strong payroll numbers. In the Euro area, the re-emergence of stress in some parts of the banking sector and the Brexit vote increased uncertainty. In Japan, downside risks have intensified in the form of a stronger yen, deflationary risks and contracting industrial production, triggering monetary and fiscal stimuli.

3. Among emerging market economies, activity remains varied. GDP growth stabilised in China in Q2, on the back of strong stimulus. Manufacturing activity was weak in July due to adverse weather and subdued export demand, although smaller firms recorded an uptick in new orders. Recessionary conditions are gradually diminishing in Brazil and Russia, but the near-term outlook is still fragile due to policy uncertainties and soft commodity prices.

4. World trade remains sluggish in the first half of 2016. International financial markets did not anticipate the Brexit vote and equities plunged worldwide, currency volatility increased and investors herded into safe havens. Since then, however, equity markets have regained lost ground. Currencies, barring the pound sterling, have stabilised, with the yen appreciating the most on risk-on demand as well as the announcement of fresh stimulus. Yields on government bonds have fallen further and the universe of negative yielding assets is expanding at a fast pace, reflecting high risk aversion and expectations of further monetary accommodation by systemic central banks. Crude prices, which had risen to an intra-year high in May on supply disruptions, remain volatile. Other commodity prices, barring those of precious metals, remain soft due to weak demand.

5. On the domestic front, several factors are helping to support the recovery. After a delayed onset, the south west monsoon picked up vigorously from the third week of June. By early August, the cumulative rainfall was 3 per cent higher than the long period average, with more than 80 per cent of the country receiving normal to excess precipitation. Kharif sowing strengthened after a lacklustre start, particularly with respect to pulses. Barring cotton, jute and mesta, sowing of all crops is currently above last year’s acreage. These developments engender greater confidence about the near-term outlook for value added in agriculture. The target for kharif production set by the Ministry of Agriculture appears within reach.

6. Industrial production picked up in May on the back of manufacturing and mining, following a contraction in the preceding month. The uneven performance of industrial output reflects the lumpy and order-driven contraction of insulated rubber cables, a component of capital goods. Excluding this item, industrial production rose at 3.0 per cent in the current financial year. In fact, capital goods production excluding insulated rubber cables expanded by 8.0 per cent. Nonetheless, the prolonged sluggishness in the capital goods sector is indicative of weak investment demand. The rate of contraction in consumer non-durables slowed, pointing to some revival in rural demand. On the other hand, the pace of growth of consumer durables has been stable and buoyed by urban consumption demand, although it eased in May on base effects. Barring the contraction in natural gas and crude oil on account of structural bottlenecks, the core sector has been resilient as of 2016-17 so far, and should support industrial activity going forward. There are some signs of green shoots in manufacturing too, with purchasing managers and the Reserve Bank’s industrial outlook survey indicating a pick-up in new orders, both domestic and external. Business confidence is also looking up in recent months, though the Reserve Bank’s survey for March 2016 suggests that capacity utilisation, seasonally adjusted, is still weak.

7. Service sector purchasing managers polled the thirteenth successive month of expansion in July on the basis of a sharp acceleration in new business. Business expectations remained optimistic on better economic conditions and planned increases in marketing budgets. High frequency indicators of service sector activity are still, however, emitting mixed signals, although a larger number of indicators are in acceleration mode in Q1 of 2016-17 than in the preceding quarter. Automobile sales across most segments, railway, port and international air freight traffic, foreign tourist arrivals, and domestic air passenger traffic are providing the underlying momentum for the upturn. The gradual improvement in the services sector is getting broad-based.

8. Retail inflation measured by the headline consumer price index (CPI) rose to a 22-month high in June, with a sharp pick-up in momentum overwhelming favourable base effects. The rise was mainly driven by food, with vegetable inflation higher than the usual seasonal rise at this time of the year. Sugar prices also firmed up due to a decline in domestic production after two successive years of drought. While pulses inflation started moderating, prices of pulses have been rising again since April after a short-lived correction in the previous quarter. Inflation pressures are also incipient in cereals. These developments fed through into households’ inflation expectations three months ahead, reversing the decline seen in the last two quarters.

9. Fuel inflation remained subdued, mainly due to sustained deflation in prices of liquefied petroleum gas. Excluding food and fuel, inflation eased across major sub-groups. Further excluding petrol and diesel from transport, inflation fell below 5 per cent for the first time since the introduction of the combined CPI. Softer inflation readings were recorded across services constituents in health, education, personal care and effects, and other categories of household consumption. Rural wage growth has been rising albeit moderately, driven up by wages of agricultural labourers. On the other hand, staff costs in the organised sector were relatively restrained.

10. Liquidity conditions eased significantly during June and July on the back of increased spending by the Government which more than offset the reduction in market liquidity because of higher-than-usual currency demand. The injection of durable liquidity through purchases under open market operations (OMOs), amounting to ₹ 805 billion so far, also helped in easing liquidity conditions, bringing the system-level ex ante liquidity deficit to close to neutrality (albeit without seasonal adjustment). Accordingly, the average daily liquidity operation switched from net injection of liquidity of ₹ 370 billion in June to net absorption of ₹ 141 billion in July and ₹ 405 billion in August (up to August 8). The Reserve Bank conducted variable rate repos and reverse repos of varying tenors in order to manage evolving liquidity conditions, with a more active use of reverse repos to manage the surplus liquidity. Reflecting the easy liquidity conditions, the weighted average call rate (WACR) and money market weighted average rate remained on average 15 basis points below the policy repo rate since June. Interest rates on other money market instruments such as certificates of deposit (CDs) and commercial paper (CPs) have also declined in both the primary and secondary markets.

11. In the external sector, merchandise export growth moved into positive territory in June after eighteen months. This upturn was reasonably widespread, covering chemicals, marine products, handicraft, plastic, rice, electronic and engineering goods. On the other hand, imports continued to decline, albeit at a slower pace than in recent months. While lower crude oil prices continued to compress the POL import bill, domestic demand for gold remained muted, with domestic gold prices trading at a discount vis-a-vis international prices. Non-oil non-gold imports continued to shrink, pulled down by coal, fertilisers, ores, iron and steel and machinery and transport equipment. Cumulatively, the trade deficit narrowed in Q1 of 2016-17 on a year-on-year basis. Net receipts on account of services remained flat in April-May 2016, with net outflow under communication services and sluggish software earnings. While the pace of foreign direct investment inflows slowed in the first two months of 2016-17, net portfolio flows were stronger after the Brexit vote, notwithstanding considerable volatility characterising these flows. The level of foreign exchange reserves rose to US$ 365.7 billion by August 5, 2016.

Policy Stance and Rationale

12. The recent sharper-than-anticipated increase in food prices has pushed up the projected trajectory of inflation over the rest of the year. Moreover, prices of pulses and cereals are rising and services inflation remains somewhat sticky. There are early indications, however, that prices of vegetables are edging down. Going forward, the strong improvement in sowing on the back of the monsoon’s steady progress, along with supply management measures, augers well for the food inflation outlook. The prospects for inflation excluding food and fuel are more uncertain; if the current softness in crude prices proves to be transient and as the output gap continues to close, inflation excluding food and fuel may likely trend upwards and counterbalance the benefit of the expected easing of food inflation. In addition, the full implementation of the recommendations of the 7th central pay commission (CPC) on allowances will affect the magnitude of the direct effect of house rents on the CPI. On balance, inflation projections as given in the June bi-monthly statement, i.e. of a central trajectory towards 5 per cent by March 2017 with risks tilted to the upside, are retained (Chart 1).

13. Looking ahead, the momentum of growth is expected to be quickened by the normal monsoon raising agricultural growth and rural demand, as well as by the stimulus to consumption spending that can be expected from the disbursement of pay, pension and arrears following the implementation of the 7th CPC’s award. The passage of the Goods and Services Tax (GST) Bill augurs well for the growing political consensus for economic reforms. While timely implementation of GST will be challenging, there is no doubt that it should raise returns to investment across much of the economy, even while strengthening government finances over the medium-term. This should boost business sentiment and eventually investment. The current accommodative stance of monetary policy and comfortable liquidity conditions should also provide a congenial environment for the reinvigoration of aggregate demand conditions. However, successive downgrades of global growth projections by multilateral agencies and the continuing sluggishness in world trade points to further slackening of external demand going forward. Accordingly, the GVA growth projection for 2016-17 is retained at 7.6 per cent, with risks facing the economy at this juncture evenly balanced around it (Chart 2).

14. Risks to the inflation target of 5 per cent for March 2017 continue to be on the upside. Furthermore, while the direct statistical effect of house rent allowances under the 7th CPC’s award may be looked through, its impact on inflation expectations will have to be carefully monitored so as to pre-empt a generalisation of inflation pressures. In terms of immediate outcomes, much will depend on the benign effects of the monsoon on food prices.

15. In view of this configuration of risks, it is appropriate for the Reserve Bank to keep the policy repo rate unchanged at this juncture, while awaiting space for policy action. The stance of monetary policy remains accommodative and will continue to emphasise the adequate provision of liquidity. Easy liquidity conditions are already prompting banks to modestly transmit past policy rate cuts through their MCLRs and pro-active liquidity management should facilitate more pass-through.

16. It may be recalled that the refinements to the liquidity management framework effected in April 2016 were intended to smooth the supply of durable liquidity over the year using asset purchases and sales as needed, and progressively lower the average ex ante liquidity deficit in the system to a position closer to neutrality. The Reserve Bank intends to continue with this strategy, with the intention of closing the underlying liquidity deficit over time so that the system moves to a position of structural balance. As regards the management of the imminent FCNR(B) redemptions, the Reserve Bank has been frontloading liquidity provision through open market operations and spot interventions/deliveries of forward purchases. The Reserve Bank will continue with both domestic liquidity operations and foreign exchange interventions that should also enable management of the FCNR(B) redemptions without market disruptions. With a view to further front-loading the provision of liquidity, it has been decided to conduct an open market purchase auction on August 11, 2016. Details are being announced separately.

17. The fourth bi-monthly monetary policy statement will be announced on October 4, 2016.

Alpana Killawala
Principal Adviser

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Acts Income Tax