Page 11 - Banking Finance October 2025

ROUNDUP

proved operating conditions, with quality as export-ready and aims to Parliament and awaiting presidential
companies ramping up input purchases increase local output. assent, is expected to save Indian ex-
and hiring. Optimism about future de- Mercedes has invested Rs. 3,000 crore porters up to $100 billion in transaction
mand remains strong across the sector. over the past three decades and cur- costs. The law recognises digital Bills of
Economist Pranjul Bhandari noted that rently assembles 20,000 units annually Lading (BoL), streamlining trade pro-
a recent hike in US tariffs on Indian for domestic sales. It now seeks to le- cesses.
goods may have caused a slowdown in verage India's cost advantages and By adopting blockchain-based
new export orders, as American buy- manufacturing ecosystem for interna- tokenisation, exporters-especially
ers pause amid uncertainty. tional markets. MSMEs-can now access faster trade
Still, domestic demand and production Company officials in Germany con- finance, insurance, and customs clear-
gains helped offset export softness. firmed continued investments in India, ance, eliminating courier delays and
Companies appear confident, expect- calling it a "priority market." They also paperwork losses.
ing growth momentum to continue hope for favorable terms under the Currently, export documentation takes
into the festive quarter. India-EU FTA under negotiation. 5-7 days, leading to delays at ports and
This sharp rise in PMI shows that India's Capt. Anand Jayaraman of MOL ech- stalled financing. With digital BoLs,
manufacturing sector remains resil- oed similar sentiments, saying many tokens can be securely transferred in-
ient, even amid global trade tensions, global auto firms now produce in India stantly between parties.
for both local and export markets.
and is likely to continue contributing India's logistics costs stand at 14% of
significantly to the country's GDP. Mercedes' move could bolster India's GDP-far above the global average of
position as an auto manufacturing hub.
9%. The digitisation of BoLs is ex-
Mercedes-Benz eyes ex- The plan, if realised, will not only gen- pected to cut trade transaction costs
erate jobs but also boost auto exports, by 30%.
porting 'Made in India' potentially strengthening India's Make
The government is aligning digital BoLs
cars in India mission. with global standards such as

Mercedes-Benz plans to expand its New Lading Act could save UNCITRAL's MLETR and ICC's DSI to
Pune facility and export Indian-as- Indian exporters $100 bil- support cross-border legal recognition
sembled vehicles globally, according to and smoother trade.
Union Minister Nitin Gadkari. The lion The move could significantly enhance
company sees India's manufacturing The Bills of Lading Bill 2025, passed by the ease of doing business and export
competitiveness.
Indian economy likely grew 6.7-7% in Q1 FY26

India's GDP likely expanded between 6.7% and 7% in Q1 FY26, as per esti- GST collection rises 6.5%
mates by SBI and other agencies, with the official figures due later this
month. This reflects a steady performance amid global uncertainties. in August on strong do-
mestic growth
Manufacturing PMI averaged 58.1-58.6 while services PMI rose from 58.7
in April to 60.4 in June. CPI inflation hit a 77-month low at 2.1% in June 2025, India's GST collections rose 6.5% in
further aiding economic momentum. August 2025 to Rs. 1.86 lakh crore,
driven entirely by a 9.6% increase in
Exports grew 5.9% year-on-year, with merchandise exports rising 7.2%.
domestic transactions. Import-related
Forex reserves provided an import cover of over 11 months.
GST fell by 1.2%, reflecting global slow-
The Finance Ministry said Q1 data reflects resilient supply and demand fun- down trends.
damentals. However, the gap between real and nominal GDP has narrowed
to 3.4%, down from 12% in FY23. Refunds dropped nearly 20%, leading
to net GST revenue growth of 10.7%
Experts warn that lower inflation may reduce the deflator, masking a slow- at Rs. 1.66 lakh crore. Experts suggest
ing growth trend. Nominal GDP could fall to 8% in Q1, possibly signalling a this may be due to delays in process-
moderation in momentum despite strong fundamentals. ing refunds amid fiscal tightening.

10 | 2025 | OCTOBER | BANKING FINANCE