Top of the Morning : India Suspends Indus Waters Treaty | Delhi’s EV Policy Shake-Up | India–Saudi Oil Pact

To get your dose of daily business news, tune into Mint Top of the Morning on Mint Podcasts available on all audio streaming platforms.https://open.spotify.com/show/7x8Nv1RlOKyMV5IftIJwP1?si=bf5ecbaedd8f4ddcIndia Suspends Indus Waters Treaty After Pahalgam AttackA day after the Pahalgam terror attack in Jammu & Kashmir killed 26, India suspended the Indus Waters Treaty with Pakistan, marking one of its strongest diplomatic moves yet. The Cabinet Committee on Security, led by PM Narendra Modi, announced the decision as part of a five-point response. The 1960 treaty had granted Pakistan control over the western rivers (Indus, Jhelum, Chenab), which irrigate most of its farmland. With 80% of the Indus water flow benefiting Pakistan, the move gives India leverage it’s never fully exercised. BJP MP Nishikant Dubey supported the move with a sharp remark: “Pakistanis will die without water.” Experts warn it could worsen Pakistan’s deepening water crisis and cripple its agriculture sector.India-Saudi Energy Ties Deepen with New Refinery DealIndia and Saudi Arabia are ramping up their strategic energy partnership. During PM Modi’s recent visit to Jeddah, both nations agreed to jointly build two oil refineries in India—a major move to secure India’s future energy needs. The pact came during the India–Saudi Strategic Partnership Council meeting, where both sides also pushed forward a $100 billion Saudi investment commitment spanning energy, fintech, healthcare, and infrastructure. New ministerial committees on defence and tourism cooperation were also announced. Despite Modi cutting the trip short due to the Kashmir attack, the visit marked a pivot in Indo-Saudi ties—from transactional to transformational.Delhi’s EV Policy Shift Sparks Auto Sector DivideA draft policy from the Delhi government proposes waiving road tax and registration fees on strong and plug-in hybrid cars priced up to ₹20 lakh—putting them on equal footing with full EVs. Domestic automakers like Tata Motors and Mahindra, heavily invested in BEVs, are alarmed. “If hybrids get the same perks, why invest in EVs at all?” said one executive. Japanese players like Toyota and Maruti Suzuki, dominant in hybrids but lagging in EVs, stand to gain. The move could make models like the Maruti Grand Vitara hybrids significantly cheaper than diesel rivals, including Tata Harrier and Mahindra XUV700. While the draft awaits finalization, its ripple effect could shift national EV-hybrid policy dynamics.IMF Warns of US Recession Risk Amid Trump TariffsThe IMF has downgraded the US growth forecast for 2025 to 1.8%, from 2.7%, citing rising global trade tensions and President Trump’s aggressive tariff hikes. The likelihood of a US recession is now pegged at 40%. The tariff regime, particularly against China, is inflating costs and dampening consumer demand. A jaw-dropping 3,521% tariff on Southeast Asian solar panels is just the start, with more on pharma and semiconductors expected. Globally, growth forecasts are down: China at 4%, the EU at 0.8%, and the world average trimmed to 2.8%. India’s forecast was cut to 6.2%, but it remains the fastest-growing major economy.Luxury Shoppers Face New 1% Tax on Big BuysFrom April 22, 2025, luxury purchases above ₹10 lakh will attract a 1% Tax Collected at Source (TCS), as notified by the Central Board of Direct Taxes (CBDT). The rule applies to high-end watches, handbags, shoes, artworks, collectibles, yachts, sports gear, and even racehorses. “It aligns with global tax transparency trends,” said BDO India’s Munjal Almoula. The move aims to monitor high-value spending and expand the tax net. The TCS will apply to the full purchase value once it crosses the ₹10 lakh threshold—so if you’re splurging on luxury, expect the taxman to ride along.