India Economic Update
Milind S. Kothari
Managing Partner
BDO India

The Indian economy is seeing a much-needed revival from the pandemic-induced devastation that nearly paralysed the country during the summer months of April and May.

The brutal second wave took the thunder out of the promising recovery reported in the previous quarter, which had shown a growth of 1.5% in the GDP backed by a favourable base effect. Unfortunately, the state lockdowns hit India’s industrial activity in May, with manufacturing activity dropping to its lowest in 10 months; forcing producers to reduce inventory which in turn accelerated job attritions.

For the fiscal year 2020-21, India’s economy took an overall hit of USD 83bn, contracting by 7.3% in real terms. As such, the June quarter was slated to publish strong growth, compared to the vertical contraction of 24.4% reported in the corresponding quarter last year. Before the second wave began; expert opinion veered towards a 14% GDP growth for the next fiscal 2021-22. However, the projections have been significantly pared down to a single-digit 9% as the revised target. The target to achieve a GDP of USD 5tn by 2025, which seemed steep even before the pandemic, now looks almost impossible.

Surprisingly, the last fiscal year 2020-21 threw up two unusual financial occurrences. First, the tax collections rose by 4.9% year-on-year despite a significant drop in the GDP. The increase could be attributed to higher tax collections that were buoyed by indirect tax collections, leveraged on unrestrained fuel prices. The second was a current account surplus, reported for the first time in 17 years. This excess is attributable to a lacklustre demand and a better-than-expected increase in exports. In addition, a massive surge in foreign portfolio investment of USD 36.10bn and strong capital inflows also contributed to the surplus. However, it is debatable whether a current account surplus bodes well for a growing economy, especially if it is on account of capital scarcity. Investing more and running a current deficit more than savings is undoubtedly preferable. Notably, India’s foreign exchange reserves crossed a record USD 600bn for the first time, and after a risk-off period in April-May, the prospects for capital inflows are improving again.

In early June, this year, the Finance Minister, Ms. Nirmala Sithararaman, announced a much-awaited USD 8.5bn fiscal package to energise the economy ravaged by the second wave. The eight measures announced in the package included a new credit guarantee scheme for health, tourism, and micro borrowers, besides expanding the emergency credit line guarantees and extending the employment scheme. But, once again, while the focus seemed to fix the supply side, it is uncertain what exactly would help or impact economic recovery. The general perception is that the measures support the economy via investments but do not provide a consumption boost that the industry has been clamouring for.

A critical provision in the Budget 2021, has resulted in the Strategic Disinvestment Policy, 2021. The proposal to divest two nationalised banks and an insurance company is, unprecedented. To top this, the privatisation of state-run companies in all but four sectors would mean that the Government would exit the agricultural sector entirely. It would quit manufacturing steel, chemicals and pharmaceuticals, engineering goods, transportation vehicles and equipment, industrial and consumer goods, and the textiles industry. In services, the exit list would include trading and marketing, consultancy services of various kinds, and hotels and tourism. Achieving the privatisation goal is indeed a tall order. The Department of Investment and Public Asset Management may not be up to the task as its decisions are invariably questioned, leading to delay in chasing timelines. This, therefore, validates the legitimacy of the demand to constitute an independent ministry of privatisation that would be better empowered to take timely decisions.

The monsoon session of the parliament began this month, and the Government has lined up 17 bills as part of the legislative agenda. Unfortunately, absent in the list is the much-awaited regulation that would deal with digital currencies. In the coming months, two key aspects that will impact growth are, how fast the country can vaccinate its citizens and how India can avoid the third wave after the shocking experience of the second.

Significantly, the path-breaking reforms launched in 1991 that unleashed the era of free markets completed 30 years this June. Back then, the reforms were forced upon the nation on account of a grave fiscal and balance of payment crisis. While successive governments have worked and expanded on those reforms, a lot more needs to be done to achieve the full potential that the country holds. There are compelling cases of urgent reforms needed in education, healthcare, judicial reforms, comprehensive social security, low-carbon economic footprint, and a clear framework to bring back private investment in infrastructure.

The list of reforms still waiting to happen is long. However, to realise the potential that the economy holds, the dream pursuit of double-digit growth remains on top of the wish-list.

M & A Tracker
Rajesh Thakkar
Partner and Leader

M&A Tax and Regulatory

Deal Advisory Services

M&A in India

Between June 2021 to July 2021, around 106 M&A deals were announced of which 71 M&A deals were completed. The aggregate value of deals announced is USD 12,550.81mn; dominated by 71 domestic deals (USD 7,626.92mn) followed by 35 cross border deals (USD 4,923.89mn)

In terms of sectors (considering only closed deals), the Information Technology sector saw the maximum deal value, with deals worth USD 1,176.43mn followed by the Utilities sector with deals worth USD 458.80mn and the Industrial sector with deals worth USD 210.12mn

Significant Deals completed between June 2021 to July 2021

Target Company
Great Learning Education Pte. Ltd.
Acquiring Company
Think and Learn Private Limited
Deal Value (in mn USD)
Information Technology
  • Think and Learn Private Limited (‘Think and Learn’ managing the popular application ‘Byju’s’) acquired Great Learning Education Pte. Ltd. (Great Learning) for USD 600mn (INR 44.67bn) in cash, stock, and earnout
  • As part of the transaction, existing shareholders of Great Learning swapped shares with Think and Learn
  • With the acquisition, Think and Learn has entered the upskilling and reskilling segment
  • With this investment Great Learning would accelerate organic and inorganic growth in India and across global markets and expand its high-quality, transformational offerings to learners everywhere
  • Post this transaction, Great Learning continues to operate as an independent unit under Think and Learn Pvt. Ltd.
Target Company
Epic Creations Inc.
Acquiring Company
Think and Learn Private Limited
Deal Value (in mn USD)
Information Technology
  • A second back-to-back acquisition for Think and Learn when it acquired Epic Creations Inc. for the total consideration of USD 500mn (INR 37.37bn)
  • Post this transaction, Epic Creations Inc. operates as fully owned subsidiary of Think and Learn
  • The acquisition helps Think and Learn to expand its footprint in the US by providing access to more than 2 million teachers and 50 million kids in Epic Creations Inc.’s existing global user-base
Target Company
Avaada Energy Private Limited
Acquiring Company
Global Power Synergy Public Co. Limited
Deal Value (in mn USD)
  • Global Power Synergy Public Co. Limited (Global Power), through its subsidiary Global Renewable Synergy Co. Limited acquired a 41.6% stake in Avaada Energy Private Limited (Avaada Energy) for a total consideration of USD 453.3mn (INR 33.69bn)
  • The deal between Global Power and Avaada Energy is a significant business move, as it will expand Global Power’s renewable energy capacity to 8,000 MW by 2030, allowing it to accelerate on the road of clean energy for low-carbon society and leading to the development of sustainable energy together
  • The investment is in line with Global Power’s growth strategy in the renewable energy business internationally and enhances its expertise in the solar power generation as well as the business collaboration in the area of its renewable energy business in the future
Target Company
Jet Airways India Limited
Acquiring Company
Kalrock Capital Management Limited
Deal Value (in mn USD)
  • A consortium of Kalrock Capital Management Limited and Murari Lal Jalan acquired Jet Airways India Limited for USD 185.30mn (INR 13.75bn) through the insolvency resolution process.
  • Out of the total consideration, USD 64.01mn (INR 4.75bn) shall be used for payment to stakeholders and USD 121.29mn (INR 9bn) shall be infused for capital expenditure and working capital requirements for smooth functioning
  • As per the plan, the Kalrock Capital Management Limited and Murari Lal Jalan consortium will infuse INR 3.8bn in phases in the first two years and follow it up with another INR 5.8bn. in three to five years of the airline’s operations

Significant deals announced between June 2021 to July 2021 but are not completed

Target Company
Dewan Housing Finance Corporation Limited
Acquiring Company
Piramal Capital and Housing Finance Limited
Deal Value (in mn USD)
  • Piramal Capital and Housing Finance Limited (Piramal Capital) is acquiring Dewan Housing Finance Corporation Limited (DFHL) for USD 5,106.03mn (INR 372.50bn) pursuant to an insolvency process
  • The National Company Law Tribunal has approved the overall resolution plan of the Piramal Group for the acquisition. It has already received approval from the Competition Commission of India and the Reserve Bank of India
  • Post transaction, DFHL will operate as a subsidiary of Piramal Capital
Target Company
Fullerton India Credit Company Limited
Acquiring Company
Sumitomo Mitsui Financial Group, Inc.
Deal Value (in mn USD)
  • Sumitomo Mitsui Financial Group, Inc (Sumitomo Mitsui) is acquiring a 74.9% stake in Fullerton India Credit Company Limited (Fullerton India) from Fullerton Financial Holdings Pte Ltd. for a total consideration of approximately USD 2,000mn (INR 148.66bn)
  • Sumitomo Mitsui will also acquire the remaining 25.1% after a transition period
  • The acquisition will help Sumitomo Mitsui's Asian push towards consumer and MSME lending, with the expertise of Fullerton India in serving mass-market consumers and MSME customers in India
Feature Story
Gunjan Prabhakaran
Partner & Leader/ Indirect Tax
BDO in India

India-UK trade relations – The road ahead

India and the UK recently announced the India-UK Enhanced Trade Partnership (ETP) reaffirming their commitment towards negotiating a comprehensive Free Trade Agreement (FTA) to double the bilateral trade between the two countries by 2030. A well-designed and comprehensive FTA can provide multiple benefits, including access to the global market, preferential tariffs, and new business opportunities to overcome international trade barriers.

In International trade, there are three types of trade barriers, i.e., natural barriers, tariff barriers, and non-tariff barriers. Natural barriers can either be physical or cultural such as different languages or distance. Tariff barriers discourage international trade as they make imported goods costlier than domestic ones. Non-tariff barriers provide special privileges to domestic manufacturers and retailers as they impose restrictions such as import quota, embargoes, exchange controls, etc.

The European Union (EU) was one single market with the UK as a part, however, with BREXIT, the UK has formally left the EU and is now free to negotiate trade deals with the rest of the world. To begin with, the UK has concluded trade agreements with major trade partners like Canada, Central America, Japan, Switzerland, Singapore, etc. and has also initiated talks for trade with members of the World Trade Organization (WTO) on WTO terms and with other developing countries under the UK’s Generalized Scheme of Preferences. The UK has also signed mutual recognition agreements with Australia, New Zealand, and the United States of America to recognise the results of one another’s conformity assessments and to initiate trade deals.

India and the UK have officially invited feedback from stakeholders and to this effect, India released a consultation paper inviting suggestions from industries and associations on 25 June 2021. The UK has undertaken a 14-week consultation process with trade and industry which is due to conclude on 31 August 2021.

Both countries are expecting growth of cross-border trades in various sectors including automobiles, hospitality, health, agri-food, pharmaceuticals, and apparel and are also discussing mutual benefits in other areas like e-commerce, public procurement, banking services, etc.

The upcoming FTA will unlock the full potential of the trade and commercial relationship between the two countries and will also help both countries explore opportunities such as:

  • Trade by removing and lowering tariffs
  • Promoting investment flows
  • Accessing a wide range of products at competitive prices
  • Aligning shared values to meet global challenges
  • Improved trade conditions
  • Strengthening rules-based international trading system, etc.

This Agreement will help in augmenting bilateral trade by providing an appropriate supportive policy framework for supply chains formed by global multinational corporations and for deepening production networks between India and the UK.

The stakeholders in both countries should consider FTA as a huge trade opportunity and should maximise benefits. Key stakeholders need to explore demand for their products in the other country within their existing production capability and revisit their supply chain inwards to align with the origin criteria, and outwards for smooth supply of goods to the receiving country. Tariff elimination under FTAs can provide businesses a level playing field. It can help countries gain substantial access to large markets at concessional rates of duty for competitive products. Businesses in India and the UK should actively participate and share concerns/objectives to make this agreement beneficial for both countries in the long run.

Guest Column
Rajesh Shukla
Head of Indirect Tax
Tata Motors

FTA as a consequence of Brexit – Strengthening the India-UK trade relationship

Until Brexit, businesses in the UK enjoyed trade protections as a member of the EU Customs Union, however, this also meant limitations in many ways as the UK individually could not make trade deals with non-EU countries. Brexit has opened new doors of opportunities for the UK, which now is free to negotiate a new generation of trade deals with the rest of the world. After Brexit, the UK Government has set an ambition to secure Free Trade Agreements (FTAs) with countries covering 80% of UK trade by the end of 2022.

Currently, India & the UK are discussing trade deals to derive mutual benefits for both countries. Accordingly, a consultative paper has been released for comments by the stakeholders to formulate a basic framework of the FTA, which will form the basis of an evidence-based approach for negotiation and decision-making on the FTA by both countries.

Evidence suggests that with a systematic approach, FTAs can lead to a large, sustained increase in trade in goods and services between partner countries. In order to achieve the maximum potential from the proposed FTA, both countries should focus on achieving the following objectives:

  • Promote trade in goods by lowering tariffs
  • Improve trade conditions by removing non-tariff barriers
  • Remove barriers affecting trade in service and improve market access for foreign services providers
  • Providing impetus for investment and exchange of technology by removing risk and uncertainty

In the current trade scenario, India has a very high tariff on the import of goods and a high number of non-tariff barriers as well. These non-tariff barriers include regulations, standards, and procedures required to ensure that domestic legislative requirements are met. Additionally, India’s restrictions on services trade are substantially higher across sectors as per the Services Trade Restrictiveness Index (STRI) released by the OECD.

In the upcoming FTA, it is expected that India will reset and lower the tariffs in priority sectors and ease out non-tariff barriers to improve trade between the countries. These measures are expected from both sides in an endeavour to ensure access to a wide range of products and services at competitive rates to consumers.

The proposed FTA should also aim at removing quotas so that there is no limit on how much trade a trader can undertake between the countries. Generally, in trade deals under FTAs, issues relating to reducing delays or eliminating border checks are not taken up on priority, however, small measures like this can ensure a great deal of success in ease of doing business. Special provisions in the FTA can be incorporated for safety standards, product standards, packaging, etc. on which traded goods can be checked at the port of entry.

Further, the proposed FTA should also incorporate provisions to minimise risks and uncertainties associated with long-term investments by businesses. This measure alone will ensure that the proposed FTA is successful in the long run. Trade and industry bodies should also actively engage in the consultation process to include further opportunities and remove existing and potential bottlenecks through the proposed FTA.

These measures may provide the relevant framework for the proposed FTA between India and the UK, which will further strengthen the existing strong and long-standing trade relationship.

Expert Reel
UK Trade Policy Observatory

So what are the prospects for UK-India trade? What’s India’s game plan, and how likely is it that it will achieve its objectives? Click below to hear Chris Horseman joined Dr Mattia Di Ubaldo, Fellow of the UK Trade Policy Observatory; Dr Amrita Saha, Research Fellow at the Institute of Development Studies; and Professor Abhijit Das, Head of the Centre For WTO Studies at the Indian Institute of Foreign Trade.

Trade Bites · An enhanced partnership? Prospects for the UK-India trade relationship


  1. The re-sharing of content is not undertaken with a view to promote/endorse or recommend any company/ product/ service and is purely for reference only. The views/content expressed by the original publishers or creators are their own, and don’t reflect the views or professional opinion/advice of the Indian Tiffin’s editorial team 1 and of BDO India.
  2. Content shared in this section is publicly available information on which BDO India has no control, in terms of its nature or reliability.
  3. The content re-shared by the Indian Tiffin’s editorial team may not be latest but is curated and represented with a view to establish maximum relevance. BDO India and its associates make no representations or warranties of any type, express or implied, about the completeness, accuracy, reliability, suitability, or availability with respect to the information contained in this section for any purpose. Any dependence you set on such information is thus strictly at your own risk.
  4. BDO India and its associates shall not be held liable for any loss or damage including without limitation, indirect or consequential loss or damage; or any loss or damage whatsoever arising from the content re-sharing under this section, loss of profits, revenues, business opportunities, goodwill, or anticipated savings or any indirect or consequential loss suffered by any party with respect to the content/accuracy of the information published. Accordingly, none of the contributors, administrators, or anyone else connected with the Indian Tiffin in any way whatsoever can be responsible for the appearance of any inaccurate or libellous information or for your use of the information contained in or linked from these web pages.
  5. This section does not create or imply any contractual or extracontractual liability on the part of BDO India and the Indian Tiffin or any of its associates, owners, organisers, or other users.
  6. All information including data, text, software, music, sound, photographs, graphics, video, messages, or other materials ("Content") in this section, is the sole responsibility of the person from where such content is originated. Any of the trademarks, service marks, collective marks, design rights or similar rights that are mentioned, used, or cited in this section are the property of their respective owners/originators.
  7. This section may include links to other websites or applications. Such websites or applications are governed by their respective privacy policies, which are beyond our control.

1Indian Tiffin’s Editorial team also refers BDO in India and its associates, partners, employees, advisors and assigns



Engaging the international palate for over 6 years with exclusive stories, economic trends, and pertinent themes from India

BDO India introduced the Indian Tiffin in 2015 with an aim to provide international audiences, insights into key economic variables and themes trending in India.

Having completed 6 successful years, with fantastically encouraging feedback from readers, we are delighted to re-introduce the Indian Tiffin with a digital refresh.

Anchored on the concept of The Indian ‘Dabbawala’ legacy (accurate, efficient, and timely delivery) each edition of the Indian Tiffin, endeavours to bring forth the right blend of information, significant for cross-border business considerations, enabling informed decision making.