India’s Policy and Market Pulse : Aug 10 – 17, 2025

India witnessed one of its most action-packed weeks in recent economic history. Between August 10 – 17, 2025, the country saw a wave of government policy announcements, RBI regulatory moves, and private-sector developments that could reshape its trajectory toward the 2047 developed nation goal.

From Prime Minister Modi’s historic Independence Day address to RBI’s AI governance framework and big-ticket semiconductor approvals, this week marks a decisive shift toward technology-driven growth, employment generation, and financial modernization.

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🔑 The Policy Surge

Modi’s Independence Day Announcements (Aug 15)

PM Modi unveiled eight major initiatives worth over ₹1 lakh crore, with a strong focus on jobs, technology, and governance reforms.

• PM Viksit Bharat Rozgar Yojana: ₹1 lakh crore package to create 3 crore jobs; ₹15,000 grant per first-time private sector employee.

• Semiconductor Mission: First Made-in-India chip by end-2025.

• Nuclear Energy Expansion: Tenfold increase in nuclear capacity by 2047; 10 reactors under construction.

• Samudra Manthan Mission: Deepwater exploration to cut import dependence.

• GST 2.0: To be rolled out Diwali 2025 – simplified indirect taxes & MSME relief.

• Reform Task Force: Cutting red tape and pushing governance modernization.

• Infrastructure Boost: Inauguration of ₹11,000 crore projects, incl. Dwarka Expressway & Urban Extension Road-II.

• Green Push: Use of millions of tons of waste in road construction.

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⚙️ Semiconductor & Manufacturing Push

On Aug 12, the Union Cabinet approved four new semiconductor projects worth ₹4,600 crore across Punjab, Odisha, and Andhra Pradesh.

• Total approved projects so far: 10 (₹1.60 lakh crore cumulative investment).

• SiCSem Pvt Ltd: First commercial Silicon Carbide fab in Odisha with UK’s Clas-SiC Wafer Fab.

• Continental Device India expanding Mohali fab with South Korean tech partners.

• 2,034 new skilled jobs expected.

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🏦 RBI’s Big Regulatory Week

The Reserve Bank of India made three major announcements:

1. FREE-AI Framework (Aug 13) – India’s first AI governance framework for the financial sector (103 pages, 7 guiding principles, 26 recommendations).

2. Rupee Internationalization Push (Aug 12) – Foreign entities with Special Rupee Vostro Accounts can now invest surplus balances in Indian govt securities.

3. Financial Inclusion Drive (Aug 8 – 11) – RBI Governor & Deputy Governors visited rural camps; 35 lakh accounts updated across 1.41 lakh camps.

Historic milestone: AU Small Finance Bank became the first SFB to get in-principle approval for universal bank transition – RBI’s first such approval since 2014.

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📉 Business & Market Snapshot

• Corporate Earnings: Q1FY26 profits up 9.4% YoY, but largely due to one-offs. Core operating profits declined.

• Auto Sector Weakness: Hero MotoCorp & Hyundai down ~12%; M&M, Eicher, TVS buck trend with growth.

• Stock Markets: Sensex at 80,598 (Aug 14); resilient despite FII outflows.

• Startup Funding: July 2025 down 42% YoY; but AI & enterprise tech saw traction (Safe Security raised $70M).

• M&A Surge: Q1 2025 deal value hit $27.5B (+29.6% YoY); domestic M&A up 145%, led by energy sector ($7.3B).

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📊 Strategic Implications

• Employment + Infrastructure = Short-term boost in jobs & demand.

• Semiconductors + AI Regulation = Long-term tech sovereignty & financial modernization.

• RBI’s proactive stance makes India a regulatory pioneer in AI adoption for banking.

• Traditional sectors remain weak, showing an economy in transition.

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🧭 The Road Ahead

The convergence of job creation, infrastructure, AI governance, and semiconductor manufacturing signals a coordinated strategy for India’s economic transformation.

Challenges remain – weak consumer demand, global volatility, and execution risks – but the direction is clear: India is betting big on tech-driven, manufacturing-led growth while keeping financial stability in check.

This week may well be remembered as a turning point in India’s 2047 journey.

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👉 What do you think – will India’s semiconductor and AI bets deliver quick wins, or will traditional sector weakness drag growth?