AGP Executive Report

GST Access: India’s GST Council is easing a major barrier for small online sellers: businesses can use an e-commerce operator’s warehouse to register in states where they have no premises, making nationwide sales easier. The Council also approved automated refunds and registration amendments. MSME Credit: Lenders say AI can turn fragmented records into loan assessments in minutes, but human oversight remains vital to protect credit quality and customer trust. Pacific Business: The ADB and Australia committed $12.85 million to help Pacific governments improve business rules and expand finance for small firms and women entrepreneurs. Regional Growth: Telangana plans a Centre of Excellence to help MSMEs grow and reach new markets. Japan’s Small Firms: Labour shortages are pushing small businesses to the brink, adding pressure to recruit and retain workers.

Thailand’s small firms under pressure: The Bank of Thailand warns repeated shocks have weakened household and small-business finances. Flooding has disrupted trade and tourism, with estimated losses of up to 33.8 billion baht; the bank is urging lenders to offer relief. Japan’s labour crunch: Shortages drove a record 240 bankruptcies in the first half of the fiscal year, with rising staff costs behind more than half. Restaurants are struggling to hire and turning customers away. Telangana support: The state plans a Centre of Excellence to help MSMEs adopt technology, find markets and connect with investors, alongside a monthly day to resolve business grievances. Qatar supply chains: Qatar Chamber says SMEs are joining industrial, infrastructure and energy supply chains as suppliers and technology partners, helping build resilience and create jobs. India compliance: GST changes could let 1.6 million small businesses file annual returns, easing paperwork and making e-commerce sales simpler.

Digital Access: Elon Musk says Starlink could help Indian small businesses reach global customers, but Indian officials cite security concerns as the service awaits approval. Solomon Islands Agribusiness: A UK-funded chocolate-processing machine will help Kokonut Pacific Solomon Islands boost cocoa production and exports. The social enterprise works with more than 1,000 farmers. India MSME Support: Telangana plans a Centre of Excellence to help small firms adopt technology, reach markets and attract investment, alongside monthly grievance sessions. Pakistan Industry: Officials say they are developing support for power-looms businesses, including better SME access to finance and measures to ease collateral hurdles. SME Finance: Malaysia’s central bank is set to provide an additional RM5 billion expected to benefit 9,000 more SMEs.

Telangana MSME Push: The state plans a Centre of Excellence to help small firms adopt technology, find markets and attract investment. A monthly grievance day is also planned. India’s GST Reset: Proposed changes would remove tax officers’ arrest powers, raise the prosecution threshold to ₹5 crore and simplify seller registration. Faster refunds could ease cash-flow pressure for small businesses. Funding and Relief: India approved a ₹10,000-crore SME growth fund, while Malaysia’s 2027 budget plans higher minimum wages and expanded tax relief. Malaysia’s central bank is also adding RM5 billion to support 9,000 more SMEs. Rate Pressure: The RBI raised its benchmark rate by 0.25 percentage points to 5.5% and signalled tighter policy, which could increase borrowing costs for businesses.

India’s Business Reforms: GST Council recommendations would simplify registration and refunds, ease e-commerce rules and raise the prosecution threshold to ₹5 crore, offering relief to small firms. SME Funding: The government approved a ₹10,000-crore growth fund for direct equity investment in Indian MSMEs; lender NeoGrowth also raised ₹85 crore to expand digital lending. Malaysia’s SME Support: The 2027 budget proposes higher tax relief and a minimum-wage rise, while an additional RM5 billion from the central bank is expected to reach 9,000 more SMEs. Export Access: Vietnam is promoting digital storefronts and product data to help small businesses and cooperatives connect with overseas buyers.

Malaysia Budget: The 2027 budget pairs tax relief for small businesses with an additional RM5 billion in central-bank support expected to benefit 9,000 more SMEs. India Tax Reform: GST changes aim to ease compliance, speed up e-commerce registration and let around 1.6 million small businesses file annual returns; the prosecution threshold also rises to ₹5 crore. SME Finance: Indian digital lender NeoGrowth raised ₹85 crore to expand MSME lending. China Growth Support: A new policy package includes expanded relending quotas for small enterprises, alongside rate cuts and support for technology and agriculture. Growth Capital: India’s Cabinet has approved a ₹10,000-crore SME fund for direct equity investment, aimed at helping promising firms scale.

GST Relief: India’s tax council has approved easier registration and refunds, removed tax officers’ arrest powers and raised the prosecution threshold to ₹5 crore. Small firms with turnover up to ₹5 crore may also get an annual-return option. Lending: Mumbai-based NeoGrowth raised ₹85 crore from FMO and LeapFrog to grow its MSME loan book towards ₹3,000 crore. Separately, India’s small-business credit reached ₹50.9 lakh crore in June, with sole proprietors driving growth. Microfinance: India’s chief economic adviser urged lenders to prioritise savings and insurance over credit, warning that over-lending and mis-selling have fuelled repeated crises. Payment Costs: GTRI is urging India to scrap a planned 0.4% fee on merchant UPI payments above ₹2,000, warning it could squeeze small-business margins and push up prices. Power Bills: In Pakistan, electric motors use nearly half of industrial electricity, making efficiency upgrades a potential way for small factories to cut costs.

India’s GST Reset: New rules scrap tax officers’ arrest powers, raise the prosecution threshold to ₹5 crore and could let 16 lakh small firms file annual returns, easing compliance and online selling. Credit and Cash Flow: Small-business credit in India reached ₹50.9 lakh crore, driven by sole proprietors, even as a separate warning on microfinance urges lenders to curb borrower over-indebtedness. Growth Funding: Pakistan approved a mechanism to bring microfinance and other non-bank lenders into government loan-guarantee schemes, widening potential access to finance for small firms and farmers. SME Innovation: Singapore air-conditioning contractor Innoflex has grown from five staff to nearly 100 and is developing AI tools to turn its engineering expertise into new services. Payment Changes: Australia’s plan to stop the tax office accepting credit-card payments from December has prompted calls for consultation, with ministers acknowledging small businesses’ cash-flow concerns.

India’s SME Push: The GST Council is weighing fewer criminal penalties, removal of arrest powers and simpler compliance. A separate ₹10,000-crore growth fund will invest directly in small firms to help them scale. Payment Costs: India may delay new UPI charges until January 2027 after merchants warned fees could squeeze margins during the festive season. Credit & Rates: Rajasthan’s small-business lending grew 16.8% year on year, ahead of the national 14.9%; meanwhile, India’s rate hike is expected to raise costs for MSMEs. Cross-Border Growth: Abu Dhabi and India’s FICCI have agreed to expand trade and investment links, building on $101.25 billion in bilateral trade. Pacific Resilience: Fiji is promoting parametric insurance to help farmers and small businesses recover faster from climate-related losses.

AI Access: Japan’s Shoko Chukin Bank plans to connect small and midsize businesses with U.S. AI startups, giving firms a route to explore new technology. PNG Small Businesses: Entrepreneurs are calling for more support to grow local products, saying business services and finance often cater to large companies. India Funding and Costs: The government approved a ₹10,000 crore SME Growth Fund, while the RBI’s rate rise to 5.5% is expected to increase borrowing costs. Tax and Compliance: India’s GST Council is set to consider faster refunds and registrations, alongside simpler rules that small businesses say they need.

RBI Tightens for Small Borrowers: India’s RBI MPC hiked the repo rate 25 bps to 5.5% and shifted to “calibrated tightening,” warning home-loan and SME borrowing costs could rise as inflation risks from food, fuel and fertilisers persist. India SME Funding Push: India’s Cabinet approved a ₹10,000-crore SME Growth Fund for direct equity support to MSMEs, aiming to help firms scale and enter global markets. GST & Compliance Relief Talk: India’s GST Council is set to discuss easing e-commerce rules and reducing small-business compliance friction, while New Zealand’s National Party floated a 47-point plan to cut employment and GST admin burdens for small firms. Freelancers Face New Export Rules: From Oct 1, RBI’s new FEMA rule requires service exporters to file an Export Declaration Form (EDF), affecting freelancers, agencies and online educators selling services overseas. SME IPO Appetite in Textiles: Small and mid-sized textile firms are increasingly using SME IPOs to fund capacity, working capital and debt reduction, even as investors are urged to scrutinize cash flows and liquidity. AI Risk for SMBs: Grab CEO Anthony Tan warned rapid AI adoption could widen inequality into a “K-shaped recovery,” urging practical AI access for small businesses. Regional Business Climate: ASEAN’s ESG Symposium 2026 focused on turning green-transition plans into action via public-private-people partnerships. Cross-border Trade Headwinds (Africa): A CEO survey found 81.3% expect more cross-border activity, but financing access remains a major drag on AfCFTA trade growth.

SME Financing Push (India): India’s Union Cabinet has approved a ₹10,000-crore SME Growth Fund to plug long-term equity gaps for small and medium firms, with most funding aimed at manufacturing SMEs and support for scaling, tech adoption, and global market entry. Digital Lending Drive (India): DFS Secretary Sanjay Lohiya urged banks to expand digital outreach and move to end-to-end digital loan processing, including working-capital channels like UPI credit lines and credit cards for micro-enterprises. Insurance Broker Backlash (India): The Insurance Brokers Association of India warned that proposed IRDAI norms—product-wise commission caps and tighter insurer expense limits—could cut 60–70% of broking revenue and cost up to 10 lakh jobs, while seeking more time to submit feedback. AI Infrastructure Deal (Asia/Global): Navitas completed its Claros acquisition to strengthen “grid-to-xPU” power delivery for AI data centers, adding IVR capabilities for next-gen architectures. SME Market Access (Asia): First Digital signed a definitive deal to become a Nasdaq-listed public company, tied to its FDUSD stablecoin and its Finance District agentic-economy platform.

UPI MDR Shift: India’s UPI will introduce a 0.4% Merchant Discount Rate from 15 Oct 2026 for select person-to-merchant payments above ₹2,000, with a ₹300 cap for ₹75,000+ transactions—while consumers and most small merchants stay on zero MDR. GST 2.0 Push: Industry chambers want the next GST 2.0 phase to unlock stuck input tax credit, speed refunds, simplify compliance, and cut disputes as the GST Council reviews reforms. SME Funding & Logistics: India’s Cabinet is expected to consider an Rs 10,000 crore SME growth fund plus an integrated transport and logistics authority to improve liquidity and support compliance. SME IPO Reality Check: SME IPOs in India are lagging—many trade below issue price and median returns are flat-to-negative, while mainboard listings have outperformed. Banking for SMEs: Kotak Mahindra Bank is taking SME promoters to IIT campuses for AI-focused workshops, aiming to help businesses adopt AI-driven growth. NBFC Outlook: NBFCs are seen posting strong 1HFY27 growth, but margins may compress as funding costs stay elevated. Digital Payments Beyond Borders: OKX launched OKX Money, letting users convert 50+ local currencies into US dollar-backed stablecoins to speed settlement for emerging-market users and small businesses. SME Market Listings: Three BSE SME debuts (Acme Universal Safezone 9, Pind Hospitality, Shivchem Agro) raised nearly Rs 68 crore, with mixed first-day pricing. ASEAN Energy Transition: ASEAN leaders face a tougher energy trilemma—security, affordability, and decarbonisation—amid rising demand and continued fossil-fuel reliance.

SME Decarbonisation Push: Schneider Electric is expanding its Decarbonization Champion Program with Greenly, adding carbon accounting and a structured emissions-cutting roadmap for electrical value-chain SMEs across the Pacific, with training, Scope 1/2 reporting, audits and incentives. Trade Finance Connectivity: Hong Kong’s HKMA hosted CargoX Solution Day, signing an MoU with the PAA Digital Trade Alliance to link Hong Kong trade data infrastructure with regional platforms to speed up cross-border trade finance for SMEs across Hong Kong, Mainland China and ASEAN. China Gig Work Pressure: A Beijing delivery rider describes relentless schedules and tight delivery deadlines that can push workers into dangerous road risks—an SME-adjacent reminder of how platform rules shape everyday costs and labour realities. Cybersecurity for Small Firms: A Rejetto HTTP File Server flaw (CVE-2026-61500) is reported as actively exploited within 24 hours of disclosure; users are urged to update immediately to 3.2.1+. India SME Lending Watch: A guide on “best small business loans” in India highlights how fintech, NBFCs, banks and government schemes fit different borrower needs—especially around speed, collateral and loan size. Tourism Shift in Costa Rica: Costa Rica is seeing a surge in Canadian arrivals (+24.1% in the first eight months of 2026), as travellers reroute away from the US and longer stays boost local tourism demand.

India Growth & Jobs: Tata Sons chairman N Chandrasekaran said India’s economy is stable and robust, with long-term growth hinging on energy security, advanced manufacturing jobs and investment in human capital. GST 2.0 Push: Finance Minister Nirmala Sitharaman flagged the next phase of GST reforms aimed at simpler compliance and more certainty for businesses, with process changes due before the GST Council and continued gains in GST collections and taxable supplies. SEBI Warns on Finfluencers: SEBI chief Tuhin Kanta Pandey cautioned investors and traders to avoid anonymous tips and unrealistic return claims as India’s capital markets deepen and retail participation grows. India-US Trade Talks Plateau: Sitharaman said negotiations on the India-US trade agreement have hit a “plateau,” with further concessions likely hard without room for compromise. SME Snapshot (Kashmir): MSMEs in J&K hit a record 3.25 lakh units, driving most industrial employment and a growing share of investment. IPO Watch (BSE SME): Black Opal Consultants’ IPO was subscribed 69 times, with shares set for listing on the BSE SME platform. Business Finance (HDFC Bank): HDFC Bank shares rose after RBI-approved appointment of ICICI veteran Anup Bagchi as new MD & CEO. SME Digitalisation (Policy): Government urged SMEs to embrace digitalisation for growth and job creation.

SME Digital Push: Ghana’s trade ministry urged SMEs to adopt digital tools to cut waste, boost productivity and create jobs, citing a UNIDO-Japan project that helped firms spot shop-floor problems and apply targeted fixes. Tobacco Policy Debate: WHO’s Western Pacific tobacco-control discussion in Manila drew fire over its focus on price hikes and e-cigarette bans, even as New Zealand, Japan and Korea show faster progress using lower-risk alternatives. Finance Rules Hit Good NBFIs: Bangladesh’s NBFI leaders warned that rules meant for failing finance companies are now restricting even well-run firms, limiting deposits, lending and restructuring. Road Safety + Infrastructure: India’s NHAI issued new guidelines for access-controlled high-speed national highways under a 50,000 km plan, standardising lane and safety specs for future corridors. Pet-Food Micro-Opportunity: A pet-food storage founder says she built a functional, airtight, fridge-friendly solution after finding a market gap—an example of product innovation from everyday pain points. SME Market Access: Airbnb offered $10,000 for farmers to host guests on their property, aiming to help small rural operators tap tourism demand.