This increase marked the largest annual jump since 2012, when the NTS began compiling such data. Companies with no net income now account for 44.5 per cent of all firms paying corporate taxes last year. The share had remained below 40 per cent until 2019 and first surpassed it in 2020.

Meanwhile, the number of firms earning over 10 billion won ($7.03 million) fell by 7.3 per cent to 3,776. This was the first decline in firms posting high net profits since records began. South Korea also recorded a tax revenue shortfall of 30.8 trillion won in 2024, following a 56.4 trillion-won deficit in 2023.

Foreign investment remained strong, especially by British investors, who traded 557.4 trillion won of South Korean stocks between January and August. Total foreign trading reached 1,247.7 trillion won ($889 billion), highlighting international interest despite domestic economic slowdown.

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The World Bank increased India’s GDP forecast for FY26 to 6.5%, up from 6.3% projected in June. The rise comes from resilient domestic demand, tax reforms, and strong rural recovery. Bangladesh’s growth is pegged at 4.8%, while Bhutan’s estimate fell to 7.3% due to hydropower delays. Growth in Maldives is expected at 3.9%, and Nepal may slow to 2.1% amid unrest.

Sri Lanka’s forecast has been upgraded to 3.5%, supported by tourism and service exports. South Asia’s overall growth is projected at 6.6% in 2025 but may ease to 5.8% in 2026 due to global and regional risks, including trade uncertainty and AI-related disruptions.

World Bank Vice President Johannes Zutt urged South Asian nations to address risks and embrace AI for productivity gains. The report also advised reforms to boost jobs, improve connectivity, and expand safety nets for workers affected by technology shifts.

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Pranjul Bhandari, Chief India Economist at HSBC, said activity stayed strong despite being slightly below August’s high. The Future Activity Index reached its highest level since March, reflecting optimism among services firms.

The services sector continues to benefit from strong demand, new business activity, and a positive outlook. It remains a key contributor to India’s economic performance this year.

India’s manufacturing sector also maintained growth in September, though at a slower pace. The HSBC India Manufacturing PMI fell to 57.7 from 59.3 in August. Manufacturing output grew steadily, with stable employment and inventories, showing confidence in upcoming business prospects. Analysts said both sectors’ slight moderation does not affect the overall growth momentum, supported by steady domestic demand, policy stability, and improved business confidence.

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S&P Global reported that India’s GDP rose 7.8% in the June quarter, higher than expected. Inflation is now forecast at 3.2% this fiscal year after food prices dropped. The Reserve Bank of India may cut interest rates by 25 basis points.

Domestic demand remains strong as consumer spending and government investment continue to rise. India stands out in Asia-Pacific for resilient growth despite global challenges. Higher U.S. tariffs and slower global trade have slowed other regional economies.

China, by contrast, faces weaker exports and slowing domestic consumption. S&P expects China’s GDP to grow 4% in the second half of 2025 and 2026. Falling housing sales and low consumer confidence are adding pressure.

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The United States, India’s largest trading partner, imposed the tariffs in two stages last month, citing Russian crude imports and trade barriers. The steep duties have hit sectors like textiles, gems and jewellery, shrimp, leather, and footwear. Pharmaceuticals, energy, and electronics remain unaffected. With the US accounting for 20 per cent of India’s $437 billion exports, experts warn of serious risks to jobs and earnings. Chief Economic Adviser Anantha Nageswaran has warned that the tariffs could shave 0.5 per cent off GDP if not offset.

Alongside export relief, Sitharaman announced India’s biggest Goods and Services Tax reform since 2017. Effective September 22, essentials like bread, milk, and toiletries will attract a reduced 5 per cent GST, while most goods will face 18 per cent. Luxury and sin goods will move to a new 40 per cent slab.

The Finance Minister said the GST overhaul would ease household expenses and encourage consumption. Analysts believe that a mix of tariff relief for exporters and domestic tax reforms will help India withstand external shocks while boosting internal demand.

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