September 2025: A Snapshot of India’s Economic Landscape and Global Corporate Maneuvers
The end of September 2025 brings a mixed bag of economic indicators and strategic corporate announcements that paint a nuanced picture of the current market environment. From industrial production figures to a gold market rally and key corporate deals, here is a breakdown of the week’s most significant developments.
Industrial Production and Economic Growth
India’s Index of Industrial Production (IIP) for August 2025 registered a growth of 4.05%, a figure that, while positive, was tempered by a downward revision of the July IIP to 4.27% (a revision of 80 bps). A key highlight for August was the sharp month-on-month revival in mining output and an increase in electricity generation. However, the manufacturing sector’s IIP was lower compared to July, largely attributed to the tariffs imposed by the US. This outcome was a disappointment, as analysts had expected a much stronger performance given the low base from the previous year. For the first five months of the fiscal year (FY26), IIP growth stood at 3.8%, falling short of the 4.3% recorded in the previous year.
Gold’s Unprecedented Rally
The gold loan market is currently experiencing a historic boom, fueled by the price of 24K gold surpassing the ₹1,15,000 per 10 grams mark. The total lending against gold jewelry has more than doubled over the last year, soaring from ₹1.32 trillion to ₹2.94 trillion. This surge in gold prices is driven by global factors, including rising demand from central banks and a growing trend of de-dollarization. Investment managers are also increasingly recommending gold as a crucial risk mitigator in portfolios, especially after it delivered returns of over 35% since the start of 2025.
The RBI’s Crucial Monetary Policy Meeting
The Reserve Bank of India’s Monetary Policy Committee (MPC) met from September 29 to October 1, 2025, to decide on the next steps for monetary policy. The general market consensus is that the RBI will maintain the status quo and avoid rate cuts for the time being. This is largely because recent GST cuts have already injected significant liquidity into the market and helped reduce the prices of goods and services. The final decision, however, will be a result of the vote by the six MPC members and will also be influenced by the likely actions of the US Federal Reserve. In the lead-up to the announcement, bond yields have been hardening over the past few weeks.
State Government Capex on the Rise
Capital expenditure (capex) by state governments showed a healthy growth rate of 14% in the first five months of FY26 compared to the same period last year. This follows a strong 30% year-on-year growth in the April-June period. While there may be some moderation in the pace of growth, potentially due to monsoon effects or a low base from the previous year’s central elections, the central government’s commitment remains strong. The Union government has budgeted to provide ₹1.50 trillion in 50-year interest-free capex loans to states in FY26, with sanctions for ₹75,000 crore already completed.
Key Corporate Developments
Corporate India saw two significant announcements. The leading pharmaceutical company, Lupin, through its Dutch subsidiary Nanomi BV, announced the acquisition of VISUFARMA BV of the Netherlands for a consideration of €190 million. This deal, which will expand Lupin’s European footprint, gives it access to a broad portfolio of eye health products and established commercial infrastructure.
In the technology sector, UST, a global leader in AI and tech transformation, made a major strategic investment in Kaynes Semicon, a prominent Indian semiconductor manufacturer. This partnership aims to collaborate on next-era electronics for sectors like Electric Vehicles (EVs), renewables, and consumer technology, aligning with India’s ambition to become a major semiconductor hub.
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