Winning Bizness Economic Desk

The country’s exports in the last fiscal (FY 24) rose substantially to markets such as China, Singapore, the United Arab Emirates (UAE) and Russia, though it must be pointed out that this rise has come on the top of a low base.

Apart from the above countries, the United Kingdom, Australia, Saudi Arabia, the Netherlands and South Africa are among the top ten countries as far as India’s exports are concerned.

The country’s overall exports, merchandise and services combined in FY 24 are estimated to be USD 776.68-billion, largely steady on a yearly basis, according to data from the union commerce ministry.

A point to be noted here is that while exports of services increased 4.4 per cent to USD 339.62-billion, merchandise goods exports slid 3.1 per cent to USD 437.06-billion.

With respect to exports in March of this year, merchandise exports fell 0.7 per cent to USD 41.68-billion while exports moved southward 6.3 per cent to USD 28.54-billion.

Here, it must be pointed out that India’s overall exports in 2022-23 (FY 23) was worth USD 775.87-billion, up 14 per cent and almost USD 100-billion on a yearly basis.

With regard to imports, the country’s overall imports in FY 24 fell 4.8 per cent to USD 854.80-billion. In March of this year, merchandise and services exports slid 5.41 per cent and 2.46 per cent, respectively.

The figures reveal that the various measures taken by the central government to make Indian manufacturers globally competitive seem to be paying dividends.

Among the various steps the government took was to launch a Production Linked Incentive (PLI) scheme in various sectors, including electronic goods to not only make the country’s manufacturers globally competitive but also to attract investments, enhance exports, integrate India into the global supply-chain and reduce dependency on imports.

India To Receive Healthy Monsoon Rains

The India Meteorological Department (IMD) has forecast a bountiful monsoon for the year which is welcome news indeed for not only farmers and the agriculture sector but for the overall economy as well.

Last year, El Nino had adversely impacted Inda’s monsoon by six per cent. This year, El Nino has not yet fully faded away, but it is expected to do so by June and progress to La Nina.

The latter is a converse cooling effect that is usually linked to surplus rainfall by the second-half of the monsoon (August and September), the India Meteorological Department’s Director-General Dr Mrutyunjay Mohapatra said.

The weather agency will update its monsoon forecast next month (in May) and is expected to provide more information on how the monsoon is expected to spatially distribute itself across the country.

The models indicate a 30 per cent chance of monsoon rains being over ten per cent categorised as `excess’ by the IMD. This is a significant jump considering that in any given year there is only a 17 per cent chance of such `excess’ rain.

A point to be highlighted here is that for the agriculture sector, the two most important monsoon months are June and July for it is in these two months, that a large fraction of kharif crops are planted.

However, the IMD has not indicated the quantity of rainfall expected during these months.

There are presently two factors favouring healthy rainfall. The first is a positive Indian Ocean Dipole (IOD) or a cooler-than-normal Indian Ocean in the east as compared to the west, which is helpful to bring rain to several states in south India.

Though it is neutral presently, it is expected to turn positive by August which is the middle of the monsoon season.

The second factor related to a below normal snow cover in the northern hemisphere and Eurasia. According to Dr Mohapatra, historically, there has been an inverse relationship between the levels of snow there and the monsoon.

The current IMD forecast also indicates that `above normal’ rain was likely over most parts of the country except northwest, east and north-east India.

India Clocks All-Time High PV Sales in FY 24

Retail sales in the country’s passenger vehicles (PV) segment touched an all-time high last fiscal (FY 24), revealed data released by the Federation of Automobile Dealers Association (FADA).

In FY 24, a total of 3,948,143 units were sold; this is an 8.45 per cent increase from the 3,640,399 units sold in the previous year (FY 23).

FADA said that passenger vehicles’ retail sales witnessed a milestone year due to improved vehicle availability, a compelling model mix and launch of new models.

Other factors responsible for pushing higher sales, according to FADA were the enhanced supply dynamics, strategic marketing efforts and expansion in road infrastructure.

An important point to be highlighted here is that the year also witnessed a high demand for Sports Utility Vehicles (SUVs); in fact, this is the first time in the country that SUVs hold a market share of 50 per cent, FADA said.

In March of this year, however, passenger vehicles’ sales moved southward by six per cent as compared to March of the previous year (2023) due to heavy discounting and selective financing.

Additionally, the segment was adversely affected by the electoral climate as well as economic worries. A total of 3,22,345 passenger vehicles were sold in the month as compared to 3,43,527 units last year.

As compared to 3,30,107 units in February 2024, the segment’s sales were lower by 2.35 per cent.

Overall, auto retail sales in the country moved northward by 10.29 per cent in FY 24.

A total of 24,530,334 units were sold and this included passenger vehicles, commercial vehicles, two-wheelers, three-wheelers and tractors, as compared to 22,241,361 units in FY 23.

A point that requires highlighting here is that the three-wheeler segment clocked the highest increase in sales; it registered a steep climb of 48.83 per cent. It was followed by the two-wheeler segment (9.3 per cent) and passenger vehicles.

According to FADA President Mr Manish Raj Singhania, three-wheeler sales were driven by the introduction of cost-effective compressed natural gas fuel options and new electric models. Additionally, a strong market sentiment combined with the introduction of high-quality after-sales service also helped fuel sales.

An increase in sales of two-wheelers was influenced by enhanced model availability, new product introduction and a positive market sentiment.

Also helping drive sales were special schemes and the rural market’s recovery after the Covid-19 pandemic. Commercial vehicles clocked the lowest growth of 4.82 per cent in retail sales during the year.

Signs Of Recovery In Retail Industry, Says RAI

The Retailers Association of India (RAI) said that the retail industry is witnessing signs of recovery and that on an average there has been a growth of about eight per cent at a pan-India level in March of this year over the same month last year (2023).

This growth was fuelled by sports goods, beauty and wellness and apparel segments, according to the latest findings of the RAI.

Retail chains have resumed expansion and this clearly signals an optimism within the industry, it observed.

RAI’s CEO Mr Kumar Rajagopalan said that “in March 2024, our review of the retail sector revealed signs of a recovery in growth. The consumption landscape appears robust, driven by increased discretionary spending on apparels and sports goods.”

Mr Rajagopalan said that the jewellery sector, however, has experienced a slight slowdown last month despite a significant growth since last Diwali, likely due to the surge in gold prices.

Retail business in south India reported a growth of nine per cent in March 2024 over March of the previous year. In western India, retailers recorded a sales growth of eight per cent followed by the north and east, signalling a growth of seven and six per cent, respectively.

In categories, sports goods expanded 11 per cent followed by the apparel and beauty segments which registered a growth of 10 per cent each as compared to sales levels in March 2023.

Footwear, food and grocery segments also clocked a nine per cent growth each, the report said. Jewellery segment’s growth was estimated at six per cent while consumer durables and electronics segments posted a de-growth of four per cent in March of this year over March 2023, as per the RAI report.