Record-Breaking Economic Expansion Buoys Indian Economy
India’s private sector surged forward in August 2025, as revealed by HSBC’s flash India Composite PMI, which jumped to 65.2 from July’s 61.1—the strongest reading since the 2005 survey began. The growth was driven by booming services (PMI at 65.6) and resilient manufacturing (59.8). New orders rose at their fastest pace in nearly 18 years, and export demand soared to the highest level since 2014. Businesses ramped up hiring and raised prices amid swelling demand, which may prompt the Reserve Bank of India to hold onto a restrictive monetary stance despite rising inflation risks. Business confidence also climbed to its highest level since March.
MCQs:
1. What was the August India Composite PMI reading?
A) 61.1
B) 65.2
C) 59.8
D) 70.1
Answer: B) 65.2
2. Which sector led the expansion?
A) Manufacturing
B) Construction
C) Agriculture
D) Services
Answer: D) Services
3. What may the RBI consider due to sharp inflation momentum?
A) Cutting interest rates
B) Maintaining restrictive policy
C) Reducing reserve requirements
D) Introducing a new currency
Answer: B) Maintaining restrictive policy
India–China Warm Up Ties amid U.S. Trade Tensions
India and China have signaled a thaw in their bilateral relationship following pressure from the U.S. over India’s oil imports. Chinese FM Wang Yi and PM Modi agreed to resume trade, flights, journalist visas, and cultural exchanges, and discussed managing the Himalayan border dispute. This rapprochement comes as India grapples with steep U.S. tariffs on its goods. Despite the rapprochement, analysts caution that core strategic differences persist.
MCQs:
1. Which country did India improve ties with amid U.S. tensions?
A) Russia
B) China
C) Pakistan
D) Japan
Answer: B) China
2. What bilateral arrangements did India and China agree to resume?
A) Military exercises
B) Cultural exchanges, flights, visas, and trade
C) Joint border patrols only
D) Currency swaps
Answer: B) Cultural exchanges, flights, visas, and trade
3. What is one concern analysts have despite improving ties?
A) Economic slowdown
B) Strategic differences remain
C) Border clashes may restart
D) Currency manipulation
Answer: B) Strategic differences remain
U.S. Cancels Trade Talks, Raises Tariff Pressures
The U.S. has canceled its planned trade negotiations with India, originally slated for August 25–29 in New Delhi, just as a new round of tariffs (25–50%) is set to kick in on August 27. The move follows unresolved disputes over India's refusal to open its agricultural and dairy sectors and continued imports of Russian oil—criticized by the Trump administration. India condemned the cancellation, pointing to inconsistent U.S. treatment compared to other Russia-linked trade partners.
MCQs:
1. When were the canceled trade talks scheduled?
A) August 15–19
B) August 25–29
C) September 1–5
D) July 20–24
Answer: B) August 25–29
2. Why did the U.S. cancel the talks according to reports?
A) India demanded too many concessions
B) Disagreement over agriculture, dairy, and Russian oil imports
C) Travel restrictions
D) Environmental concerns
Answer: B) Disagreement over agriculture, dairy, and Russian oil imports
3. What tariff level is India facing?
A) 10–20%
B) 25–50%
C) 5–10%
D) No new tariffs
Answer: B) 25–50%
