Winning Bizness Economic Desk

India has now emerged as one amongst the top 25 arms exporting nations. At one time, India was the world’s second-largest importer, but now over the last few years, India has broken into the top 25 arms exporting nations bracket.

The Economic Survey 2024 highlights that India’s defence production expanded substantially from Rs 74,054-crore in FY 17 to Rs 1,08,684-crore in FY 23, thereby giving a massive push to defence exports.

Presently, India’s increasing production of defence equipment and systems is changing its narrative as the world’s second-largest arms importer.

The Economic Survey says: “India has transitioned from being an arms importer to securing a place in the list of the top 25 arms exporting nations.”

The survey highlights the defence industry’s efforts, including those of the private sector and Defence Public Sector Undertakings (DPSUs) for achieving the highest-ever defence exports.

Additionally, there has been an increase in the number of export authorisations issued to defence exporters.

About 100 domestic companies are presently exporting a wide range of defence products and equipment, including aircraft such as the Dornier-228, artillery guns, BrahMos missiles, Pinaka rockets and launchers, radars, simulators and armoured vehicles, the survey pointed out.

To boost defence exports, the government has implemented several policy initiatives over the past ten-years.

Export procedures have been simplified and made industry-friendly with end-to-end on-line export authorisation reducing delays and facilitating ease of business.

The Atmanirbhar Bharat initiatives have encouraged indigenous design, development and manufacture of defence equipment, thereby reducing dependency on imports in the long run.

A point that requires highlighting here is that the policy push towards indigenisation includes a list of products that will cease to be imported in a staggered timeline.

A very important initiative is the government allocating funds to support the private sector in the defence segment.

Bangalore Emerges as Country’s Biggest Real Estate Market in Last Quarter

The southern city and capital of Karnataka state, Bangalore, has emerged as the leading residential real estate market with a sale of 18,550-units last financial quarter.

This was stated in a report from Real Estate Intelligence Service (REIS) of JLL Research.

An important point highlighted by the report is that new launches in the city increased by almost 45 per cent with 16,537-units.

Sustained demand for property in Bangalore supported by the booming IT sector, infrastructure upgradation programmes and conducive business environment has been attracting several national and regional developers to the city resulting in healthy launches every quarter, Mr Rahul Arora, Senior Managing Director (Karnataka and Kerala), JLL India, said.

According to Mr Arora, the Whitefield area in Bangalore contributed 47 per cent of the new launches followed by Hosur Road and Bellary Road.

A significant point here is that the upper-mid segment apartments held a dominant 62 per cent share in the last financial quarter. The units in this segment are between Rs 1-crore-to-Rs 3-crore.

“Interestingly, around 25 per cent of Bangalore’s sales were contributed by projects launched during the first six-months of the year, signalling strong buyer confidence in such developments,” Mr Samantak Das, Chief Economist and Head of Research and REIS India, JLL, said.

Adani Group Submits Investment Proposal for Nairobi Airport Upgradation

Leading Indian blue-chip conglomerate, the Adani group, has submitted a proposal for the upgradation of Nairobi airport in Kenya.

This was stated by the Kenya Airports Authority (KAA) which said that it has received an investment proposal from the well-known Indian corporate house.

This investment proposal under the public-private partnership has been submitted by the Adani group company Adani Airport Holdings Ltd (AAHL) for Nairobi’s Jomo Kenyatta International Airport (JKIA).

Presently, AAHL manages seven airports in India and is also developing the Navi Mumbai airport.

The Adani company’s proposal has come following the Kenyan government approving a medium-term investment plan for the upgradation of the passenger terminal building, runway, taxiway and apron at the Nairobi airport, Mr Henry Ogoye, JKIA’s Managing Director and CEO, said.

“Kenya Airports Authority (KAA) received an investment proposal under the Public Private Partnerships Act 2021 from the Adani Airport Holdings Limited, a key airport operator, to invest in a new passenger terminal building, second runway and refurbishment of the existing facilities at JKIA,” Mr Ogoye said.

JKIA was built in 1978 and is a strategic national asset. AAHL’s proposal will be subjected to technical, financial and legal reviews alongside requisite due processes in compliance with the Public Private Partnerships Act 2021, he said.

Government Support Helps India’s Toy Industry to Boost Exports

Government’s support to the domestic toy industry has helped it increase its exports and reduce dependence on Chinese imports.

Measures such as mandatory quality norms and increase in customs duties have immensely helped the country’s toy industry to boost its exports, the Economic Survey said.

India’s emergence as a toy exporting nation can also be attributed to its integration into the global value chain and zero duty market access for domestically manufactured toys in critical countries such as the United Arab Emirates (UAE) and Australia.

Here, it must be pointed out that India’s toy industry has faced challenges in the past in the global trade landscape consistently, being a net importer of toys for many years.

“Rising exports, coupled with declining imports, transformed India from a deficit to a surplus nation in the trade of toys,” it said.

A point that requires highlighting here is that for over a decade, India relied heavily on China for around 76 per cent of its toy imports.

“India’s import bill for toys from China dropped down from USD 214-million in FY 13 to USD 41.6-million in FY 24, leading to a decline in China’s share in India’s toy imports from 94 per cent in FY 13 to 64 per cent in FY 24, indicating India’s competitiveness in the international toy market,” the Survey said.

A significant development has been that the number of manufacturing units has doubled due to the focussed efforts by the government during the 2014-2020 period.

Amongst the measures initiated by the government to perk-up the country’s toy industry include the formulation of a comprehensive National Action Plan for Toys with 21 specific action points, an increase in basic customs duty on toys, sample testing of each import consignment to curb sub-standard imports, issuance of a Quality Control Order for toys and support through cluster-based approach.

India Has High Tax-to-GDP Ratio, Says Revenue Secretary

India has a high tax-to-GDP ratio though it may have a lower tax base as compared to its peers, the Secretary, Department of Revenue, Ministry of Finance (MoF), Mr Sanjay Malhotra, said.

“The tax-to-GDP, given the level of development, is not low. We are slightly above what our per capita income indicates,” Mr Malhotra said at a recent Confederation of Indian Industry (CII) event.

The Revenue Secretary additionally highlighted the fact that the tax-base would further increase as more formalisation took root within the country.

The World Bank (WB) has said that a tax-to-GDP ratio of over 15 per cent is a key ingredient for economic growth. India’s general government tax-to-GDP ratio of 18 per cent is lower than China’s at 21 per cent and the United States’ 25 per cent.

“More people will find it difficult to stay out of the tax-base and tax net,” Mr Malhotra observed.

With respect to the concerns of industry about capital gains, Mr Malhotra said that the government has simplified the process. “It is primarily a simplification process,” he said.

“We have given you one rate, instead of the two the industry demanded. It is an exercise to remove the tax arbitrage between various asset classes and an attempt to reduce the difference in taxation between capital gains and other forms of income,” he said.

Tea Exports Remain Stagnant in 2023

India’s tea exports remained almost stagnant at 231.691-milllion kilograms during the calendar year 2023, according to the latest Tea Board data.

Exports of the beverage during the preceding calendar year 2022 were 231.08-million kilograms.

A spokesperson of the Indian Tea Association (ITA), a top planters’ body was quoted in a leading newspaper as saying that the loss of the Iran market due to payment problems following the US sanctions had affected off-take of the beverage on the whole.

Iran’s imports of Indian tea had plummeted to around 5.16-million kilograms during 2023 as compared to 54-million kilograms in 2019.

Another important point that requires highlighting here is that shipments to Russia, the largest buyer in the CIS bloc of nations, were also hit due to its conflict with Ukraine.

Region-wise, exports of north Indian tea last calendar year were 141-million kilograms while that of south India was 90.69-million kilograms in the same period.