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* The week concluded with another round of tariffs imposed by the US, this time on branded pharmaceuticals (100%), which reflected in muted sentiment in the domestic markets despite India’s exposure towards generics.

* The US also imposed tariffs on bathroom vanities (50%), furniture (30%) and heavy trucks (25%) effective from 1st Oct, to promote local manufacturing in these categories.

* China pledged to reduce greenhouse gas emissions by 10% and also decided to raise the share of non-fossil fuels in energy consumption to 30% by 2035. This is in sharp contrast to the US President’s speech at the UN where he attacked climate change action as economically damaging.

* The Centre announced a new cash transfer scheme in Bihar with an initial grant of INR 10,000, with a cash outlay of USD 75bn. This is in addition to two more such cash transfer schemes announced by the state. Bihar’s fiscal deficit % of GDP was revised to 9.2% of GDP in FY25 while it is budgeted to fall to 3% in FY26, which seems unrealistic.

* The CAG of India flagged concerns over the practice of states (BR, UP and MP) wherein they bunch their expenditures in the final month of the fiscal year, leading to rushed spending and inefficient use of funds and lack of documentation.

* Although excessive rainfall in several states including MH, PJ and KA has adversely impacted kharif crops, foodgrain production is projected to exceed the government’s target of 171.4mn tonnes driven by increased acreage.

* Media reports indicate that the central government is contemplating increasing its capex for FY26 by INR 200bn-300bn, without stretching its fiscal deficit target of 4.4%. The decision is expected after the mid-year review in Sep-Oct’25.

* Markets will be closely monitoring the RBI’s policy decision next week; markets are divided on the likelihood of a rate cut and “status quo”. Our expectation tilts more towards policy easing.

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