India Economic Update
Milind S. Kothari
Managing Partner
BDO India

India’s economic performance - a standout amongst large economies, clocking GDP growth over 6%, remains a mixed bag with some vital signs showing stress, whereas some others displaying buoyancy.

The Goods and Services Tax (GST), the main-themed indirect tax, returned the highest-ever collection in April 2023 at USD 22.60bn, which augurs well for the new fiscal year (April-March). Additionally, April’s manufacturing index consisting of coal output, fuel demand, and auto sales showed the economy holding firm despite global headwinds. Fortunately, the decline in crude prices to below USD 80 a barrel has been critical in providing macro stability. The forex reserves are a shade under USD 600bn and likely to remain in the comfort zone for the next five to six years, with exports expected to pick up on the back of Free Trade Agreements (FTAs) augmenting the reserves.

On the other hand, the core output of key infrastructure sectors (i.e., coal, crude oil, natural gas, refinery products, fertilizers, steel, cement, and electricity), that carries a 40% weight in the Index of Industrial Production (IIP), is trending south. Another noteworthy statistic has been declining exports, dragged down by sluggish demand, manifested by the recession in major markets. While India’s goods exports shrank 12.7% in April, the trade deficit fell to a 20-month low at USD 15.2bn, mainly on account of cooling of oil prices. Government economists opine that macroeconomic stability, the cornerstone for a sustainable growth rate, is at perceived risk from El Nino-triggered drought conditions, geopolitical developments, and global financial turmoil.

Despite the inherent weakness, manufacturing and burgeoning infrastructure growth could be the drivers to push India to remain the fastest-growing economy over the next few years. The Government has prioritised investment through Production-Linked Incentive (PLI) schemes that have been expanded beyond the initial 14 sectors to include semiconductors and solar components.

Meanwhile, Foreign Direct Investment (FDI), for once, shows a downward trend, resulting in the first decline after a decade of y-o-y growth. The reasons attributable are funding winter on the back of unsustainable valuations and a broader credit squeeze in developing countries. While PLI schemes are leading investments in manufacturing for a broader basket of segments, including hardware, the gains are offset by declining investments in the software industry.

Prime Minister, Mr Narendra Modi’s cherished target for India to become a USD 5tn economy will be possible if the economy continues to grow at an average of 7.4% in real terms for the next four years. The expectations are that inflation will remain range-bound under 4% and the depreciation of the rupee limited to 2%. These parameters are ambitious and challenging, but achievable. There is also a heavy bet on the digital public infrastructure revolution and its impact beyond digital payments. Interestingly, several sectors and areas such as health, education, financial inclusion and agriculture, have benefited from digitalisation, improving transparency and accountability.

One of the present government's critical agenda items is signing FTAs with developed countries. The FTAs should facilitate India’s entry into the supply chain of multinational companies, which will also push exports significantly. The MNC pie represents nearly 50% of global exports. On the back of a strong FTA network, the Ministry of Commerce is hopeful that India will achieve USD 1tn in goods and services exports by 2030.

The latest population estimates show that India has surpassed China as the most populous country with almost 40% or 571mn young people (aged 20-44 years). The foremost question is whether India will reap the demographic dividend. In his Independence speech in 2022, the Prime Minister declared that India would achieve the ‘developed country’ status by 2047, the 100th year of its independence. To achieve this status, India’s income needs to grow at 9-10% and lose the tag of a low-income country. The Government will likely focus on seven to eight areas vital for the economy and human development. Small businesses will be a focus for job creation. Then there’s growth in manufacturing and exports. Agro, food processing and capital expenditure will also get attention, as will the ease of doing business and women’s labour force participation.

To realise the high ambition set by the Prime Minister of achieving long-term economic goals and uplifting the lives of the average Indian, a multiplicity of factors, such as good governance, a stable economic environment, the critical role of policy-making and reforms, complemented by substantial investment by the private sector, among many others, have a pivotal role to play. It is the pursuit of a full agenda that will help India realise its ambition to become a developed nation by 2047.

M & A Tracker
Rajesh Thakkar
Partner and Leader

M&A Tax and Regulatory

Deal Advisory Services

M&A in India

Between 30 March 2023 and 29 May 2023, around 81 M&A deals were announced of which 48 M&A deals were closed. The aggregate value of deals announced was USD 1,820.04mn; dominated by 59 domestic deals (USD 1,541.89mn) and 22 cross-border deals (USD 278.15mn).

In terms of sectors (considering only closed deals), the Telecommunication Services sector saw deals worth USD 100mn followed by the Consumer Discretionary sector with deals worth USD 65.65mn and the Materials sector with deals worth USD 37.8mn.

Significant deals closed between 30 March 2023 and 29 May 2023

Target Company
Excel Telesonic India Private Limited
Acquiring Company
Macquarie Capital Securities India Private Limited
Deal Value (in mn USD)
Telecommunication Services
  • Macquarie Capital Securities India Private Limited (Macquarie Capital) acquired a majority stake in Excel Telesonic India Private Limited (Excel Telesonic) for USD 100mn (INR 8.20bn)
  • The acquisition would help Excel Telesonic to substantially scale its infrastructure services and imbibe global best practices, ultimately leading to superior networks for telecom operators and delighted end users
  • Post transaction, Excel Telesonic will operate as a subsidiary of Macquarie Capital
Target Company
CIE Automotive India Limited
Acquiring Company
Not Available
Deal Value (in mn USD)
Consumer Discretionary
  • Mahindra and Mahindra Limited sold the entire 3.2% stake in CIE Automotive Limited for USD 65.50mn (INR 5.42bn)
  • The sale was an open market transaction of 1,21,22,068 shares at a price of INR 447.65 per share
Target Company
Archimica S.p.A.
Acquiring Company
PI Industries Limited
Deal Value (in mn USD)
  • PI Industries Limited (PI Industries) through its subsidiary PI Health Sciences Netherlands B.V (PI Health), acquired Archimica S.P.A. from Plahoma Twelve GmbH for USD 37.80mn (INR 3.09bn)
  • The acquisition enabled the company's plans of growth and expansion in the pharmaceutical sector
  • PI Health would combine the acquired businesses' R&D capabilities with the brand-new integrated pharma research centre being developed in IKP Hyderabad for CRO and CDMO offerings to a wider set of customers across the entire pharma value chain
  • Post transaction, Archimica S.p.A will operate as a subsidiary of PI Industries

Significant deals announced between 30 March 2023 and 29 May 2023, but not closed

Target Company
Raymond Consumer Care Limited, FMCG Business
Acquiring Company
Godrej Consumer Products Limited
Deal Value (in mn USD)
Consumer Staples
  • Godrej Consumer Products Limited (Godrej Consumer) entered into a business transfer agreement to acquire the FMCG Business of Raymond Consumer Care Limited (Raymond Consumer) for USD 344.67mn (INR 28.25bn) in an all-cash deal
  • As a part of the transaction, along with the FMCG Business, Godrej Consumer will acquire the trademarks of Park Avenue, KS, Kamasutra, and Premium, through a slump sale
  • The acquisition is expected to strengthen Godrej Consumer men grooming business and provide the company space in the fragrance and sexual wellness categories
  • With this acquisition, Raymond has announced the demerger of its Lifestyle business to Raymond Consumer to create a listed entity with a pure-play B2C-focused Lifestyle Business
  • The transaction is expected to be completed by 10 May 2023
Target Company
Unichem Laboratories Limited
Acquiring Company
Ipca Laboratories Limited
Deal Value (in mn USD)
  • Ipca Laboratories Limited (Ipca) entered into a definitive agreement to acquire a 59.38% stake in Unichem Laboratories Limited (Unichem) for USD 224.21mn (INR 18.39bn) through a share purchase agreement followed by an open offer
  • Pursuant to the above transaction, the buyer will acquire 23,501,440 Equity Shares at a price of INR 440 each for a total consideration of INR 10.34bn from Prakash Amrut Mody through a share purchase agreement and the remaining 18,305,495 Equity Shares for INR 8.05bn from public shareholders through an open offer
  • The transaction is subject to, inter-alia, approval of the Competition Commission of India
  • Post transaction, Ipca will hold 59.38% stake in the company
Target Company
TCNS Clothing Company Limited
Acquiring Company
Aditya Birla Fashion and Retail Limited
Deal Value (in mn USD)
Consumer Discretionary
  • Aditya Birla Fashion and Retail Limited (AFRL) entered into a definitive agreement to acquire 51% stake in TCNS Clothing Company Limited (TCNS Clothing) for a total consideration of USD 202.34mn (INR 16.55bn) through a Share Purchase Agreement (SPA) followed by an open offer
  • The deal will take place through the acquisition of the founding promoter’s stake through an SPA and a conditional public open offer
  • Post transaction, AFRL will hold a 29.36% stake in TCNS Clothing and TCNS Clothing will operate as a subsidiary of AFRL
Feature Story
Gunjan Prabhakaran
Partner & Leader/ Indirect Tax
BDO in India

Free Trade Agreements: Resetting India’s approach to international trade

The strategic advantages of entering into Free Trade Agreements (FTAs) have resulted in the Government focusing on concluding FTAs with critical trade partners.

In the recent past, the Indian Government has reset its approach to trade, by focusing on entering into FTAs with various trading partners to promote bilateral trade. Once India decided to opt-out of the Regional Comprehensive Economic Partnership (RCEP), the focus shifted to FTAs.

It is relevant to note that the FTAs not only deal with various customs duty concessions, but also focus on various other aspects to promote trade in goods and services, such as the grant of visas, opening up of relevant sectors, removal of non-tariff barriers and ease in procedural requirements, etc. The approach of entering FTAs with important trade partners allows the Government to adopt a calibrated approach to prioritise the trade deals which can maximise the potential of the country’s trade while supporting the developing sectors of the economy with a gradual opening-up. This has resulted in the Government focusing on concluding the FTAs with important trade partners, some of which have been under discussion for a long period.

In the year 2022, India operationalised two FTAs, i.e., the Comprehensive Economic Partnership Agreement (CEPA) with the UAE and the Economic Cooperation and Trade Agreement (ECTA) with Australia.

The positive impact of the India-UAE CEPA on bilateral trade was evident from the fact that the exports from India to UAE registered a growth of 8.5% y-o-y, as compared to general growth in exports excluding the exports to the UAE, which was 3.1% for the period of May 2022 to March 2023 (i.e., after CEPA came into effect). Considering that it has only been about five months since the ECTA with Australia came into effect, the data to gauge the impact of the ECTA on Indo-Australia trade is not yet available, although the sentiments are positive.

Presently, India is in active negotiations for the FTAs with the UK, the EU and Canada. The status of negotiations of each of these FTAs is as under:

India-UK FTA

  • The ninth round of negotiations for the India-UK FTA concluded on 28 April 2023, with detailed policy discussions, and the tenth round is scheduled to be held in India between 5 and 9 June 2023.
  • As per reports, 13 out of 26 chapters have been substantially closed, with significant progress in other chapters. Some of the important open areas are the scope of agreement for the service sector and visas, IPR, Indian regulations for data localisation, agriculture and duty rates on whisky.

India-EU FTA

  • After a long hiatus, the negotiations for an FTA between India and the EU were reignited in June 2022. The fourth round of negotiations concluded in March 2023 and the fifth round is scheduled to be held between 12 and 16 June 2023.
  • From the official statements post the fourth round, it appears that while over the four rounds held so far, some progress has been made and agreement has been reached on some of the issues, the dialogue is still ongoing for most of the issues. It would also be interesting to see how the issues relating to the upcoming Carbon Border Adjustment Mechanism by the EU are addressed in the FTA.

India-Canada FTA

  • While the FTA between India and Canada had been under negotiations for a while, it is presently envisaged that initially, India and Canada would enter into an   among others, high-level commitments in goods, services, investment, rules of origin, sanitary and phytosanitary measures, technical barriers to trade, and dispute settlement, and may also cover other areas where mutual agreement is reached. Eventually, this will take the shape of a comprehensive FTA. The seventh round of negotiations for EPTA was held in April 2023 and according to press reports, there is a likelihood that the EPTA may be signed in the second half of the year.

In addition to the above, negotiations for the India-GCC FTA should commence soon, apart from re-initiating negotiations for the India-Israel FTA.

With ‘Make in India’ – An initiative by the Government of India to promote the country as the most preferred global manufacturing destination, gaining momentum, the industry needs to maximise a multitude of opportunities available under the FTAs. The industry should also adequately present to the Government, the areas of importance for negotiating future FTAs with respective trade partner/s. The Government in turn should ensure stability in norms and incentives to augment investments in India and mutual cooperation with the trading partners.

Guest Column
Bibhas Kumar
Senior Manager Finance – Indirect Taxation
Hindustan Unilever Limited

Free Trade Agreements – An impetus to growth

As part of the ‘Make in India’ initiative, India has set an ambitious export target of USD 2tn by 2030. Pursuant to the disturbances caused in global trade due to the COVID-19 pandemic and the Ukraine conflict, the Indian Government sought to capitalise on emerging opportunities by enhancing manufacturing facilities in India and being an important part of the alternate supply chains. The increased focus of the Indian Government on entering into Free Trade Agreements (FTAs) with key trading partners is dovetailing well in this endeavour of the Government.

FTAs refer to the agreements between India and other countries/ regional blocs to reduce or eliminate trade barriers through mutual recognition to enhance trade Under FTAs, the customs duties on imports made from the partner countries are exempted/ charged at a lower rate, various non-tariff barriers and procedures are relaxed, exports between partner countries are becoming competitive and efficient, and bilateral trade is witnessing increased growth. Recently, the focus on FTAs has increased, with agreements with the UAE and Australia coming into effect over the last year and various other FTAs with key trading partners, such as the UK, the EU, Canada, etc. under negotiations.

One of the important outcomes of the FTAs is the creation of global supply chains, where companies can plan their procurements in a way that takes advantage of the FTAs and optimises the customs duty outgo. Countries with FTAs with important trading partners also become manufacturing hubs for supplying to these trading partners, leading to an increase in economic activity, creation of employment opportunities and growth in the economy. Apart from this, the FTAs also help open the hitherto untapped markets for domestic manufacturers, encouraging their growth.

While FTAs lead to the creation of global supply chains, they have their share of complications. Exporters need to properly track the value addition in a country, which can be a complex exercise in some industries, especially when the product being exported has multiple components. In addition, for Indian importers, there is an additional requirement of documentation under the Customs Administration of Rules of Origin under Trade Agreements Rules, 2020 (CAROTAR Rules). Under these rules, Indian importers need to ensure that the imported goods meet the rules of origin criteria (value addition norms, etc.) prescribed for availing benefits under the FTA. However, in many cases, the details to assess the fulfilment of relevant criteria for being eligible to claim benefits under FTA are not available with the Indian importers and they rely on the Certificate of Origin issued by the relevant authority in the exporting country to claim benefits under FTAs. While the Central Board of Indirect Taxes and Customs (CBIC) has issued various clarifications on the same, including that the provisions of the FTA would prevail over CAROTAR Rules, the provisions in the rules remain and importers look forward to engaging with the Government to resolve the issues and help economic growth.

In summary, the FTAs can help in growing the manufacturing sector of a country by opening various markets and allowing the procurement of key inputs at a lower cost. FTAs also help in the growth of services trade by opening up various services sectors, consequently, resulting in economic prosperity.

Expert Reel
The Economic Times

As reflected in its recent FTAs with the UAE and Australia, and the ongoing negotiations with the UK, the EU, Canada and other countries in the West, the way India looks at international trade is changing. This is in contrast to the hitherto followed ‘Look East Policy’ and is a future-minded move to diversify and modernise trade dynamics, support domestic manufacturing and service industries and inch closer to the export target of USD 2tn by 2030.

India’s Finance Minister Nirmala Sitharaman speaks about the growth and resilience of the Indian economy, India’s manufacturing plans within the international trade context and the view of trade vis-à-vis the modern sense of globalisation. She also speaks about India’s recent series of completed FTAs and ongoing negotiations. 

Here's a snippet from her recent interaction at the American think-tank Peterson Institute for International Economics in Washington


  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. 
  5. 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.
  6. 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.
  7. 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.
  8. 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.

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



Engaging the international palate for over 8 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 8 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.