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.