Sep 4: GST 2.0 delivered, Deep Tech Alliance, Google's Big Win

In an irony not to be missed, Leaders Xi, Putin, and Kim were caught in a rare hot mic moment talking about living to 150 in the middle of a massive military parade. The conversation, which could have passed for an anti-aging podcast if the participants weren’t actual nuclear power leaders, consisted of the top dudes talking about organ transplants and biotech keeping people young forever. While it’s good to know awkward small talk is universal we’re not exactly sure how we feel about a 150 year old Kim Jong Un.

Now, let’s get into the Dispatch! 🚀

Today’s reading time is 6 mins.

Sensex and Nifty climbed on investor optimism about a possible GST rate cut that could boost domestic consumption.

Council Meeting & High Expectations: The 56th meeting of the GST Council opened today in Delhi with high expectations that long-awaited reforms may finally take shape. Consumers and businesses watched closely as the Council rationalized the current four-tier GST structure into just two slabs of 5 and 18 per cent, along with a special 40 per cent rate for luxury and demerit goods. The proposal, backed by Prime Minister Modi in his Independence Day address and shaped by a Group of Ministers, sharply reduced the cost of household essentials, bring down prices of premium goods, and potentially give a festive-season boost to the economy.

What Gets Cheaper: According to the Centre’s plan, almost all items currently taxed at 12 per cent would fall to 5 per cent, while a large majority of goods in the 28 per cent bracket would move to 18 per cent. That means cheaper staples like ghee, nuts, medicines and even bicycles, as well as a price cut for appliances such as refrigerators and televisions. Automobiles may see a split structure: entry-level cars at 18 per cent, while luxury vehicles and SUVs would fall under the new 40 per cent bracket. Tobacco, cigarettes and pan masala too will attract the highest rate. The Centre is also pushing for electric vehicles to be taxed at just 5 per cent, clashing with a ministerial panel’s suggestion of 18 per cent for EVs priced up to ₹40 lakh.

Pushback and Cess Debate: The reforms, however, faced resistance from opposition-ruled states worried about revenue losses. Eight states have demanded a clear compensation mechanism, while the Centre insists that lower rates will boost consumption and offset losses over time. The issue of the compensation cess, which was extended until 2026, will also come up, with discussions on possibly ending it earlier to repay Covid-era loans.

GST 2.0: Who Really Wins? The 56th GST Council meeting has triggered fresh debate on who truly stands to gain from GST 2.0 - the middle class at the checkout counter or India Inc. in the boardroom. The government’s simplification of the four-tier system into two slabs, has raised hopes of lighter bills for households. But not all benefits may reach consumers immediately, as companies might retain part of the margin. For businesses, however, the reform is about more than repricing. It offers room to rework strategies, widen margins, and expand into smaller packs and rural markets. FMCG and textile firms look set to be immediate winners, while autos and electronics remain weighed down by compensation cess. The bigger question is fiscal: trimming slabs risks revenue gaps, leaving states uneasy. For now, GST 2.0 promises relief for households and opportunity for companies but the balance between consumer cheer and corporate bonus remains the real puzzle. 

Big Ticket Investment: Eight venture capital and private equity firms from the US and India are coming together to back India’s deep tech ambitions. The newly formed India Deep Tech Investment Alliance is set to channel more than $1 billion into Indian startups over the next decade, a move that could reshape the country’s innovation arena.

Who’s In The Club? The founding members of the alliance include a heavyweight mix of global and Indian names: Celesta Capital, Accel, Blume Ventures, Gaja Capital, Ideaspring Capital, Premji Invest, Tenacity Ventures, and Venture Catalysts. Each firm has pledged long-term private capital, ranging from seed to Series B rounds, with no appetite for late-stage investments. Alongside funding, the alliance will offer mentorship, industry access, and networking opportunities, while also supporting startups as they scale within India and eventually expand overseas.

Why It Matters: The timing is significant. Earlier this year, the Indian government approved a ₹1 lakh crore ($11 billion) Research, Development, and Innovation (RDI) scheme to accelerate deep tech R&D. Under the RDI framework, alliance members must invest in “sunrise sectors,” ensure startups are domiciled in India, and secure regulatory approvals. This kind of formal grouping is unusual in the venture world, where firms typically compete or co-invest informally.

Complications On The Horizon: Still, the alliance unfolds against a backdrop of geopolitical friction. In February, Donald Trump and Narendra Modi unveiled the TRUST initiative (Transforming the Relationship Utilising Strategic Technology) to strengthen bilateral tech ties. Yet, relations quickly soured when Trump slapped a 50% tariff on Indian goods, citing New Delhi’s continued oil trade with Russia. Analysts warn such flashpoints could complicate otherwise ambitious tech collaborations.

The Bottom Line: For India’s deep tech founders, this alliance offers both capital and credibility, two essentials for scaling globally competitive ventures. But whether this translates into lasting impact may depend as much on political will in Washington and New Delhi as it does on the promise of India’s startup ecosystem. 

Jane Street vs SEBI: US trading firm Jane Street has appealed to the Securities Appellate Tribunal against an interim order by SEBI, alleging the regulator withheld crucial documents needed for its defence. The firm has paid the ₹4,843 crore (~$567 million) penalty but has stopped local trading and wants the tribunal to compel SEBI to disclose all relevant materials.

Indian Firms' Rural Push: Indian companies are focusing on small-town and village markets to counter the new 50% US tariffs. According to NielsenIQ, rural consumption has grown faster than urban for six consecutive quarters. Firms like Britannia and Pidilite are reporting strong Q1 growth by expanding their distribution networks into smaller towns, while GST tax cuts are expected to boost household demand further.

EV Tax Surge: An Indian tax panel has proposed a significant increase in GST on luxury electric vehicles, a move that could affect automakers like Tesla, BMW, and Mercedes-Benz. The panel recommends raising the tax to 18% for EVs priced between $23,000 and $46,000, and to 28% for those above $46,000.

Renewables Push: India is poised to add a record 39-43 GW of renewable energy capacity in 2025, with 30 GW already added and 22 GW from solar and wind in the first half of the year. Minister Pralhad Joshi stated this brings the total to 226 GW, with an additional 186.3 GW under implementation and 67.08 GW tendered, nearing the 500 GW target for 2030.

A Partial Victory For The Big Boss: Google scored an important, if qualified, win in its long-running antitrust fight with US regulators. A federal judge in Washington has ruled that the company will not be forced to sell its Chrome browser or its Android operating system - both considered vital engines of Google’s ad-fueled empire. Investors welcomed the outcome, sending shares of Alphabet up more than 7% in after-hours trading. Apple, which relies heavily on Google’s lucrative search partnership, also saw a bump.

What The Court Ordered: The ruling, however, comes with strings attached. Google must now share key data with competitors, a move designed to loosen its iron grip on online search and advertising. By granting rivals more access, the court hopes to create a more level playing field. While this doesn’t dismantle Google’s dominance overnight, it hands a potential opening to AI firms developing next-generation chatbots and search tools.

Relief For Apple And Device Makers: One of the biggest concerns heading into the ruling was whether Google would be barred from making its multibillion-dollar revenue-sharing payments to Apple and other device makers. For now, those payments (estimated at $20 billion annually) remain intact.

The Bigger Picture: The decision caps nearly five years of legal wrangling and is part of a broader US crackdown on Big Tech power that spans multiple administrations. Google still faces other antitrust battles, including one tied to its Play Store practices after a win by Fortnite maker Epic Games, and another looming trial over its online ad technology monopoly. Google has signaled it may appeal, potentially sending the case all the way to the Supreme Court. In the meantime, regulators remain under pressure to show they can rein in Silicon Valley giants without derailing innovation. 

Another GPT Glitch: ChatGPT users across the globe reported fresh access troubles, with more than 2,000 complaints in the US and around 550 in India. OpenAI has not issued a statement yet. The hiccup adds to a growing list of service disruptions in 2025, following major outages in June and July. 

Crypto Currency Lifeline: Venezuela is increasingly turning to cryptocurrencies like Tether (USDT) as U.S. dollars grow scarce due to oil sanctions and shrinking reserves. Businesses and banks are using government-approved wallets to swap bolivars for USDT, keeping trade and essential imports afloat.

Novartis Heart Drug Deal: Swiss drugmaker Novartis has inked a licensing and options agreement worth up to $5.2 billion with China’s Argo Biopharmaceutical. The deal centers on Argo’s RNAi-based cardiovascular drug candidates and gives Novartis first negotiation rights for its lead asset, BW-00112. This expands the companies’ existing collaboration in tackling heart disease.

England’s Ban On Energy Drinks -The UK government plans to ban the sale of high-caffeine energy drinks to under-16s, citing risks like obesity, sleep disruption, and poor concentration. Officials estimate the move could prevent obesity in up to 40,000 children and deliver long-term health gains.

China’s 'Suez Canal' Plans: China is crafting a game-changing rail corridor- dubbed the "Suez Canal on rails", running from Chongqing to Europe. This inland route will allow freight to reach Europe in under two weeks, shaving 10–20 days off traditional sea transit.

Bandra’s Bastian Closes Down: Actress Shilpa Shetty's popular Mumbai restaurant, Bastian Bandra, is shutting down amid a ₹60 crore fraud case against her and her husband, Raj Kundra. Shetty, who co-owns the eatery, announced the closure on social media, calling it "the end of an era" and noting that the brand's other location will remain open.

Byju’s assets frozen: The Karnataka High Court has temporarily frozen the assets of Byju's founder, Byju Raveendran, in a $235 million dispute with Qatar Holding, enforcing a recent arbitration award. This legal move adds to the many ongoing challenges for the edtech company.

HIL’s player crisis: The Hockey India League (HIL) faces another challenge as England, the Netherlands, Belgium, and Germany refuse to release players for its upcoming season. This follows a previous season where 29 foreign players pulled out, and two teams withdrew, raising concerns about the league's future.

New Immigration Law: A new Immigration and Foreigners Act 2025 is now in effect in India. The law exempts Hindu, Christian, Sikh, Buddhist, Jain, and Parsi migrants from Afghanistan, Bangladesh, and Pakistan who arrived before December 31, 2024, from penal action for staying without valid documents.

THAT’S ALL FOR TODAY!

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