Sep 5: American Eagle and GST 2.0 Win, Cannabis Wellness Booms

The world just lost a fashion titan: Giorgio Armani, the minimalist maestro who quietly reshaped fashion from Milan to Mumbai. Rest in timeless style, sir and just know that in India, your brand will live on … even if it is through bargain t-shirts and gym bags plastered with your logo. Imitation is the sincerest form of flattery.

Now, let’s get into the Dispatch! 🚀

Today’s reading time is 6 mins.

Slim gains on Thursday, supported by GST reforms, which triggered a rally in consumption-led sectors, particularly auto and FMCG stocks.

A Much-Needed Reset: India’s GST has undergone its biggest overhaul since 2017. The GST Council has scrapped the 12% and 28% slabs, moving most goods into just two rates—5% & 18%, effective September 22, 2025. The reset is expected to trim household costs by 7–8% in urban areas and 5–6% in rural India, though the actual relief depends on how much industry passes the benefits to consumers.

Clothing and Housing Relief—With Caveats: Fabrics and clothes priced up to ₹2,500 now attract a 5% GST, down from 12%, offering festive relief. But clothing above this threshold will be taxed at 18%, worrying global fashion brands like Zara, H&M, and Lacoste, as well as local manufacturers. In the housing sector, input costs like cement and paints have shifted from 28% to 18%, which developers are calling a “festive bonanza.”

Sin Goods in the Highest Slab: A steep 40% GST is now reserved for sin and luxury goods. This includes tobacco, pan masala, sugary drinks, junk food, high-end cars, yachts, private aircraft, and online gaming platforms. These items, previously taxed at 28% plus cess, now face a single rate intended to discourage harmful consumption while ensuring steady revenue.

The Road Ahead: While GST 2.0 is being pitched as a Diwali gift to the aam aadmi, its true impact hinges on whether India Inc. passes on the benefits. For households transitioning from subsistence to security, even modest savings on food, clothing, and housing matter—potentially unlocking a consumption boom in the world’s fastest-growing middle class.

A Wellness Shift: India’s wellness supplement market is evolving as consumers move beyond traditional vitamins and protein powders to stress-relief oils, caffeine gummies, cordyceps mushroom pills, and CBD-based recovery gels. Among these, cannabis-derived medicines stand out, riding on clearer regulatory guidance and a growing acceptance of alternative therapies. The domestic cannabis-based products market, valued at $1.3 billion in FY2024, is projected to hit $4.7 billion by FY2032, growing at a staggering 17% CAGR.

The Legal Landscape: Cannabis-based medicines are not new to India; they have long existed within Ayurveda and are regulated under the Drugs and Cosmetics Act, 1940, and the Narcotic Drugs and Psychotropic Substances Act, 1985. Since 2014, the Ayush Ministry has overseen their use, requiring central and state-level licenses for production and sales.

Rise of D2C Cannabis Brands: Startups like Boheco (Bombay Hemp Company) and Awshad are spearheading this new wave. Boheco, backed by marquee investors including the late Ratan Tata, reports 45% repeat customers and closed FY2025 with ₹7.5 crore in revenue, up from ₹5.3 crore the previous year. Similarly, Awshad saw a threefold jump in revenue in July 2025 compared to the year before, with an average customer spend of ₹5,200. These figures spotlight a shift from experimental purchases to consistent consumer trust.

The Marketing Dilemma: Despite rising demand, experts warn against exaggerated claims. Doctors stress that cannabis-based medicines should be prescribed and consumed under medical guidance, ideally for short-term therapeutic use alongside lifestyle changes.

India in the Global Context: Globally, the cannabis market is booming, projected to grow from $72.8 billion in 2025 to $125.7 billion by 2030 at an 11.5% CAGR. North America leads, thanks to widespread legalization and product innovation, while Europe and Latin America are gradually opening up. Medicinal cannabis is gaining legitimacy, with pharmaceutical firms investing heavily in cannabinoid-based therapies.

The Road Ahead: For India, the cannabis wellness boom sits at a delicate intersection of tradition and modernity. Ayurvedic roots provide legitimacy, but modern D2C packaging and marketing bring both opportunity and risk. With regulatory clarity improving and consumer curiosity rising, cannabis could well become India’s next big alternative wellness export. Yet, without stringent oversight on safety and claims, the line between cure and hype will remain thin.

Amazon’s credit push: Amazon has completed its roughly $200 million cash acquisition of BNPL lender Axio, securing a valuable NBFC license from the RBI. The deal allows Amazon to expand its checkout finance offerings both on and off its platform, provide personal loans, and eventually lend to SMEs. This move aligns with a broader consolidation trend in the Indian fintech sector, especially after the shutdown of players like ZestMoney.

SoftBank’s stake trim in Ola: Japanese investment giant SoftBank has offloaded a 2.15% stake in Ola Electric through open market transactions, reducing its total holding to 15.68% from its previous 17.83%. Despite this sale, SoftBank remains the second-largest shareholder after Ola's founder, Bhavish Aggarwal.

Festive fee hikes: E-commerce and food delivery giants are raising platform fees to boost profitability and counter rising operational costs, especially before the festive season. Swiggy, Zomato have upped their fee, similarly, Myntra, Flipkart and Amazon have a new marketplace fee.

Tough investment times: Foreign companies halted projects in India valued at nearly ₹2 lakh crore in the first quarter of the 2025-26 fiscal year. Economists point to "tariff-related uncertainty," specifically around a "mini trade deal" with the U.S. that has seen missed deadlines, as the main reason for the investor pessimism.

Big Tech's India Bet: US tech giants are significantly increasing investments in India, drawn by its enormous digital user base and vast talent pool. The country has over 400 million Instagram users and 500 million WhatsApp users. OpenAI is also planning to build a massive 1-gigawatt data centre to support its operations.

Ford Racing: Ford Motor Company has rebranded its motorsports program as Ford Racing, a move announced by Will Ford, great-grandson of Henry Ford. More than a name change, the rebrand reflects a renewed commitment to aligning Ford’s racing heritage with its future innovations. The new logo keeps Ford’s iconic blue oval, now paired with bold “RACING” lettering. Will Ford described the reintroduction as a fresh way of thinking about how racing drives both the business and the brand.

Road Meets Track: The shift unifies Ford’s racing and production engineering under one global leadership. Technologies tested in competitions like Dakar and Daytona will directly influence road cars, while consumer vehicles will inspire advancements on the track. This synergy is already evident in vehicles like the F-150 Raptor, which benefits from lessons learned in extreme off-road races.

The Bigger Picture: Ford is not just honoring its history by reviving its racing identity, it’s reaffirming racing as central to its DNA, where innovation, performance, and heritage meet.

Celebrity-Driven Momentum: American Eagle is reaping the rewards of star-studded marketing. Its “Sydney Sweeney Has Great Jeans” campaign (despite facing backlash online for perceived racial undertones) has delivered what Chief Marketing Officer Craig Brommers described as “unprecedented new customer acquisition.” The brand confirmed Sweeney will remain central to its campaigns through the rest of the year, with fresh creative twists on the way. Adding to the momentum, American Eagle also teamed up with NFL star and Taylor Swift’s fiancé, Travis Kelce, through his clothing label Tru Kolors. The collaboration has expanded AE’s reach among young shoppers and fueled the brand’s visibility. Together, the Sweeney and Kelce campaigns have reportedly pulled in over 700,000 new customers and generated a staggering 40 billion impressions.

Holiday Outlook: Looking ahead, American Eagle forecasts flat annual comparable sales, a better result than analysts’ expectation of a 1.1% decline. Analysts remain bullish, particularly as the brand leans into Kelce’s NFL visibility and continued buzz around Sweeney. Barclays analyst Adrienne Yih called the collaborations “genius,” noting they are primed to deliver a meaningful boost during the holiday season. 

Malaysia’s Rare Earth & China: Malaysia has discovered 16.2 million metric tons of rare earth reserves worth $175 billion, putting it at the center of the global race for critical minerals. The discovery has attracted the attention of both China and the U.S. with China offering technical assistance but only through state-owned firms, citing technology security. The U.S. is also in talks with Kuala Lumpur, worried that China’s involvement could tilt strategic balances. Malaysia, meanwhile, is leveraging both sides to secure better trade and investment deals.

“King of Icebergs” A23a Cracks: Nearly four decades since it calved from Antarctica, the colossal iceberg A23a (once the largest on Earth) has begun breaking apart as it drifts into warmer South Atlantic waters. Scientists predict that A23a is nearing the end of its life and could vanish entirely within weeks.

Porsche to Exit Germany’s DAX: Porsche AG, the luxury automaker majority-owned by Volkswagen, will be removed from Germany’s benchmark DAX index on September 22, following a more than one-third plunge in its share price over the past year — largely due to U.S. import tariffs and weakening demand in China.

BYD’s Cooling Momentum: China’s largest electric vehicle maker BYD has cut its 2025 sales target from 5.5 million to 4.6 million vehicles, a 16% reduction that reflects the slowest growth the company has seen since 2020. This pullback follows a 30% quarterly profit decline, intensified competition from rivals like Geely and Leapmotor, and softening domestic demand amid broader economic pressures.

JPMorgan’s Digital Bank Plans: In a strategic drive to expand its digital footprint in Europe, JPMorgan Chase plans to launch its Chase digital retail bank in Germany in the second quarter of 2026, marking its entry into its second major European retail market after the UK.  

India’s road to growth: India is planning to invest $125 billion over the next decade to build 17,000 km of new high-speed, access-controlled roads. The project aims to reduce logistics costs and will use a hybrid financing model to attract private investment.

Kuki-Meitei deal: A peace deal has been renewed between the Indian government, the Manipur government, and the Kuki-Zo groups. The agreement, aimed at ending ethnic violence that has killed over 260 people since May 2023, includes measures to protect Manipur's integrity and monitor militant groups. 

Bengal assembly uproar: Chaos erupted in the West Bengal Assembly during a speech by CM Mamata Banerjee on migrant worker issues. Five BJP MLAs were suspended. A scuffle broke out after the BJP's chief whip was forcibly removed by marshals, resulting in him being hospitalised.

New GST’s impact on Kerala: Kerala's Finance Minister, K. N. Balagopal, stated that the state will face an annual revenue loss of ₹8,000-10,000 crore due to the new GST rate rationalisation. The state supports the cuts but wants the Centre to ensure benefits reach the public and provide compensation.

Germany becomes talent magnet: Amid stricter visa rules in the US and UK, Germany is actively seeking Indian talent. Germany has 1.4 million job vacancies and is digitizing visa processes to attract skilled Indian talent. Indian students are the largest international group in Germany, but challenges remain in retaining migrants long-term.

Tax tussle: Based on analyst projections, recent GST rate cuts could lower inflation by 25 basis points (bps) but might increase the fiscal deficit by up to 40 bps. The ₹48,000 crore revenue loss from the changes is expected to be offset by increased consumer demand.

THAT’S ALL FOR TODAY!

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