Winning Bizness Economic Desk

India cannot match its neighbour country China’s 8-to-10 per cent economic growth which the latter attained in the past. India is also far from replacing its northern neighbour as a global manufacturing hub, Morgan Stanley’s Chief Asia Economist, Mr Chetan Ahya, told a leading media outlet.

He is, however, optimistic about India’s economic growth prospects. The country’s economy will likely grow steadily at 6.5-to-7 per cent over the long-term.

China’s growth has averaged 10 per cent a year in the three decades after its leadership unleashed economic reforms in 1978, according to official figures.

The Morgan Stanley official said that economic progress in India was hamstrung by a lack of infrastructure and a low-skilled work-force. “Both these constraints make us believe that India’s growth is going to be strong, but at 6.5-7 per cent rather than 8-10 per cent,” Mr Ahya said.

A point that needs highlighting here is that Morgan Stanley had said in another report that India’s current world-beating economic growth rate on the back of an investment boom resembles that of 2003-07 when growth averaged more than eight per cent.

The report—The Viewpoint: India—Why This Feels Like 2003-07 observed that after a decade of investment to GDP steadily sliding, capex has emerged as a crucial growth-driver in India.

“We think the capex cycle has more room to run, therefore the current expansion closely resembles that of 2003-07,” it said.

S&P Global Market Intelligence Revises India’s Growth Forecast Upward for FY 25

S&P Global Market Intelligence has upwardly revised its forecast for India’s economic growth to 6.8 per cent for the next fiscal (FY 25). Earlier, the organisation had pegged India’s growth at a lower 6.6 per cent during FY 25.

This revision follows soon after another reputed international organisation Moody’s upped India’s growth forecast to eight per cent from 6.6 per cent in FY 24 on the back of a strong domestic consumption and high expenditure from the government.

In the October-to December quarter of 2023 or the third-quarter of this fiscal (FY 24), the country achieved a very heartening 8.4 per cent climb with sectors such as manufacturing, electricity and construction putting up a robust show.

S&P Global Market Intelligence has also upped its global growth forecast from 2.3 per cent to 2.6 per cent on the basis of better growth in countries such as the United States (US), the United Kingdom (UK) and India.

Gold Jewellery Exports Up 16.43 Per Cent

The country’s gold jewellery exports registered a robust 16.43 per cent climb to USD 821.55-million Year-on-Year (YoY).

However, a point to be noted here is that its gems and jewellery exports slid 12.66 per cent (YoY) to USD 3.05-billion in February of this year. Imports clocked a marginal northward movement of 1.12 per cent to USD 2.26-billion.

The above indicated a widening trade gap in the gems and jewellery segment.

According to a Gem and Jewellery Export Promotion Council (GJEPC) report, “The overall gross exports of gems and jewellery at USD 3,046.84-million (Rs 25,274.640-crore) in the month of February 2024 is showing a decline of 12.66 per cent (-12.34 per cent in Rupee terms) as compared to USD 3,488.51-million (Rs 28,832.86-crore) for the same period the previous year.”

Additionally, a point that requires highlighting here is that the total gross export of gold jewellery at USD 821.55-million (Rs 6,815.65-crore) in February showed a growth of 16.43 per cent (16.91 per cent in Rupee terms) compared to USD 705.61-million (Rs 5,829.65-crore) the previous year.

India’s Smartphone Exports to US Rises, China and Vietnam’s Slide

In a significant and happy development for India, its smartphones exports to the United States (US) have climbed up steeply.

India has quadrupled its share among smartphone exporters to the US, while the shares of China and Vietnam have declined.

India’s smartphone exports to the US expanded 254.3 per cent on year to USD 3.53-billion in the April-to-December period which catapulted the country to the position of the third biggest smartphone exporter to the US.

An analysis by the Ministry of Commerce and Industry has revealed that this has enabled the country to get up its market share to 7.76 per cent from two per cent in the same period of the previous year.

“After production of i-phones scaled up and an increase in overall (smartphone) production, there has been a significant rise in our exports to the US,” an official was quoted as saying in a news report.

During the nine-month period, China’s share in the US market slid to 70.9 per cent from 77.7 per cent in the year-ago period.

China exported USD 35.1-billion worth of smartphones to the US market in the April-to-December period, down from the USD 38.26-billion in the previous year.

Similarly, Vietnam too has registered a slide in its market share to 12 per cent from the earlier 19 per cent. Vietnam is the second biggest exporter of smartphones to the United States.

The south-east Asian country’s shipment of phones fell to USD 5.47-billion in the April-to-December period from USD 9.36-billion in the same period of the previous year.

An important point to highlight here is that of India increasing its share in the US in the face of competition from recognised electronic manufacturing leaders such as China and Vietnam which is very significant indeed.

In 2022-23, the United Arab Emirates (UAE) was the biggest market for India-made smartphones but by May 2023, the US had overtaken it. The Gulf country, however, still remains at number two with shipments of USD 2-billion.

The UAE is followed by the United Kingdom (UK), the Netherlands and the Czech Republic.

An important point to be noted here is that this year exports have already touched USD 10.5-billion in the April-to-December period, growing at 46 per cent on year.

India’s Sports Industry’s Revenue Crosses Rs 15,000-cr in 2023

India’s sports industry clocked a 11 per cent growth and recorded a total revenue of Rs 15,766-crore in 2023 (compared to 2022), as per a report released by GroupM ESP.

The revenues include sponsorship spends, media spends and endorsement fees. An interesting point here is that nearly 87 per cent of the sports industry’s revenues came from cricket amounting to Rs 13,701-crore in 2023, up 13 per cent.

Sponsorship spends climbed up steeply to Rs 7,345-crore in 2023, up 24 per cent over 2022 primarily driven by a significant increase in franchise fees indicating the robustness of India’s franchising eco-system led by the Indian Premier League (IPL) and WPL, the report titled Sporting Nation—Building a Legacy said.

The overall media spends on sports were almost flat and stood at Rs 7,494-crore in 2023 (down one per cent over 2022). This was primarily due to factors such as a tough business environment combined with inflationary pressures, which, in turn, led to muted spending by advertisers across sports as well as non-sports genres.

In terms of IPL ad spends alone, while TV ad spends declined 17 per cent, digital ad spends grew by over 25 per cent in 2023. The report also noted that OTT platforms were essaying a key role in transforming the sports consumption patterns.

The report added that sports celebrities earned a total of Rs 927-crore in endorsement fees in 2023, up 24 per cent.

“Indian sports industry, from about Rs 2,400-crore in 2008 to over Rs 15,000-crore in 16-years, reflects the elevated status of sports and the fast-evolving sporting culture in India. This highlights the sports industry’s expansion as well as commercialisation and its growing influence on the global stage. From being a sporting nation in the making, we are now marching towards building a legacy in this field,” Mr Vinit Karnik, Head Sports, e-sports and entertainment, GroupM said.