Winning Bizness Economic Desk

The country’s exports of goods and services are expected to breach the USD 800-billion mark by the end of this financial year (FY 25) despite some headwinds existing externally, a top central government minister said.

“We’ll see positive growth in goods and services exports,” the country’s minister of commerce and industry, Mr Piyush Goyal said. The minister was speaking at an event organised by the Gem and Jewellery Export Promotion Council (GJEPC).

The country’s exports would grow despite continued challenges in the external market as well as geo-political tensions, Mr Goyal said.

India’s overall exports—goods and services—registered an only 0.04 per cent growth at USD 776.68-billion in the last fiscal (FY 24).

What this means is that exports of USD 800-billion would translate into a three per cent growth.

On the Free Trade Agreement (FTA) with the United Kingdom ((UK), Mr Goyal said that India hoped to make progress with respect with it.

“Even with the UK, irrespective of the election result, we hope to make progress after the new government comes in. If the current government comes in, they are deeply committed to the FTA,” the minister observed.

He further stated that the Commerce Department was actively engaging with the G-7 nations to minimise the impact of their decision to impose direct restrictions on Russian origin diamonds.

India’s GDP to Reach USD 4-trillion This Fiscal

India is heading towards reaching an USD 4-trillion GDP milestone this year, outpacing global growth rates, a senior Indian government official said.

Mr Sanjeev Sanyal, a member of the Economic Advisory Council to the Prime Minister of India made this observation at the Cambridge India Conference held at the historic Cambridge Union. Mr Sanyal shared insights into the country’s remarkable economic growth trajectory and future prospects while engaging in a dialogue with Mr Kishen Shastry, a Ph.D economist from the University of Cambridge.

India has the ambitious goal of breaching the USD 4-trillion GDP mark and solidify its position as the world’s fastest-growing economy, Mr Sanyal pointed out.

“This year, India’s GDP will reach USD 4-trillion, putting us on par with Japan in terms of economic size. We continue to lead as the world’s growing economy by a significant margin. Last year, our growth rate surprised us at 8.2 per cent and we anticipate an over seven per cent growth this year, outpacing all major economies,” the senior Indian government official said.

India is expected to overtake Japan and Germany to emerge as the world’s third-largest economy by 2027. In US dollar terms, India is the fifth-largest economy with a size of about USD 3.7-trillion in nominal terms.

Bangalore Intl Airport Leads in Perishable Exports for Fourth Consecutive Year

The Kempegowda International Airport (KIA) continues to remain India’s leading hub for perishable exports. This is the airport’s fourth consecutive year at the top.

The operator of the airport—Bangalore International Airport Limited (BIAL)—has reported a substantial growth in perishable cargo handling with a total of 63,188-metric tonnes processed during the 2023-24 financial year.

This is an eighteen per cent increase from the previous year which is a very healthy growth indeed.

BIAL further said that KIA has essayed a key role in India’s perishable exports, handling 28 per cent of the country’s total perishable cargo.

An important point to be highlighted here is that the airport also managed 44 per cent of South India’s perishable exports and secured a 28 per cent share in national perishable cargo for FY 2023-24.

The numbers reflect KIA’s critical contribution to the country’s agriculture and perishable goods trade. An important point to be noted here is that the airport also facilitated the export of 2,050-metric tonnes of flowers.

India’s Kharif Sowing Area Up by 14 Per Cent Due to Good Rains

The area under kharif crop sowing in India has zoomed northward by 14.1 per cent to 378.72-lakh hectares as compared to 331.9-lakh hectares during the same period a year ago.

An important point that requires highlighting here is that the area under pulses sown this year has climbed up steeply by 50 per cent to 36.81-lakh hectares from 23.78-lakh hectares last year, India’s Ministry of Agriculture and Farmers Welfare said.

The sowing of arhar (tur) has risen sharply to 20.82-lakh hectares as against 4.09-lakh hectares last year in the same period.

The point to note here is that a higher pulse production would help to contain the retail inflation as the prices of arhar and moong have increased significantly for the past several months.

The Centre has been encouraging farmers to cultivate more area under pulses, especially tur, due to crop failure in the past two consecutive years and achieve self-sufficiency in pulses and oilseeds by 2027.

While the area under sugarcane has risen marginally to 56.88-lakh hectares this year from 55.45-lakh hectares last year, the area under soyabean has more than doubled to 60.63-lakh hectares from 28.86-lakh hectares.

Area under paddy cultivation has increased to 59.99-lakh hectares against 50.26-lakh hectares last year.

A point to note here is that sowing of oilseeds has also climbed up to 80.31-lakh hectares from 51.97-lakh hectares. There has also been a significant increase in sowing of cotton, with 80.63-lakh hectares coverage, while it was 62-lakh hectares last year.

FADA Says Cars’ Retail Sales Slide in June

Retail sales of cars in the country slid last month for the second straight month—this is mainly attributed to the heatwave across the country, which, according to a dealers’ organisation, deterred customers from purchases.

The Federation of Automobile Dealers Association (FADA) said that this decline in sales in June was despite “substantial discounts”.

Passenger vehicle sales moved southward 6.8 per cent Year-on-Year (YoY) in June, a steeper decline than the one per cent fall in May of this year, FADA which tracks monthly retail sales from dealers to buyers, said.

Here, a point to note is that auto sales are seen as a key indicator of private consumption in the country. As per government data, India’s auto industry constitutes around seven per cent of its country’s GDP.

Retail sales of small cars and electric vehicles were particularly adversely affected as the severe heatwave in the country, especially in the northern region resulted in fewer footfalls at dealerships; this, consequently, led to fewer people buying cars.

Additionally, the subdued retail demand has also led to muted wholesales for some car-makers, according to industry analysts.

“Despite improved product availability and substantial discounts aimed at stimulating demand, market sentiment remains subdued due to extreme heat resulting in 15 per cent less walk-ins. Dealer feedback highlights challenges such as low customer enquiries and postponed purchase decisions,” FADA’s President Mr Manish Raj Singhania, said in a statement.

Services Sector Grows as Export Orders Surge

The country’s services sector growth picked-up last month (June), propelled by a huge surge in international orders, an industry survey conducted by S&P Global showed.

In May, the sector’s growth had slid to a five-month low.

India’s Purchasing Managers’ Index (PMI) for services increased slightly to 60.5 in June from a five-month low of 60.2 recorded in the previous month of May.

“June data indicated a sustained upturn in Indian service sector output, with the rate of expansion quickening from May’s five-month low amid a stronger rise in new orders and an unprecedented expansion in international sales,” S&P Global observed in its monthly report.

The services PMI is based on a survey of around 400 service sector companies.

A PMI point above 50 indicates growth in the sector while below 50 shows contraction. The services PMI has been above the 50 mark for nearly three-years.

In June, a substantial support to the growth in the services PMI came from increased orders from overseas markets. “Asia, Australia, Europe, Latin America, the Middle-East (ME) and the United States (US) were all cited as sources of new work from abroad,” the rating agency said.

Positive client appetite led to service providers in India to recruit additional staff and the pace of job creation in June was the strongest in 22-months.

A point that needs highlighting here is that there were short-term as well as permanent hirings across junior, middle and senior level positions.