Winning Bizness Economic Desk

India clocked a 11.9 per cent growth in exports in February of this year to USD 41.4-billion, the highest monthly exports during this fiscal. This rise was primarily propelled by increased shipments of engineering goods, electronic items and pharma products.

Trade deficit in February worked out to USD 18.7-billion, up from the USD 16.57-billion in the year-ago month, as gold imports moved northward steeply.

Merchandise imports were valued at USD 60.11-billion, up 12.16 per cent compared to the USD 53.58-billion in February of 2023.

Gold imports surged 133.82 per cent to USD 6.15-billion during February of this year as against the USD 2.63-billion in the year-ago period, according to union commerce ministry data.

During the April-to-February period, gold imports stood at USD 44-billion, up 38.76 per cent over the compared period during the last financial year.

The country’s Commerce Secretary Mr Sunil Barthwal said that despite several difficulties such as the on-going Russia-Ukraine war and recession in certain countries, the February exports exceeded all expectations.

“If you look at the 11-months period of the financial year this is the highest export growth which we have achieved, both merchandise as well as overall. This is very heartening,” Mr Barthwal said.

The second heartening aspect was that India’s overall exports were likely to be higher this financial year than last year’s record exports, he said.

“We will be crossing the record which we achieved last year and last to last year,” the country’s Commerce Secretary said.

India’s overall exports (merchandise and services combined) in the April-to-February period 2023-24 are estimated to be USD 709.81-billion, a growth of 0.83 per cent over the April-to-February period of 2022-23.

The overall imports in the April-to-February 2023-24 period are estimated to be USD 782.05-billion, showing a contraction of 4.64 per cent over the corresponding period of the last fiscal.

IMF Official Says Indian Economy Can Grow at 8 Per Cent or More Till 2047

The country’s economy can expand at eight per cent or more till 2047 if the country can redouble the good policies that it has implemented over the last ten-years and accelerate reforms, a senior International Monetary Fund (IMF) official said.

The eight per cent growth target was ambitious because the country has not grown consistently at eight per cent but it was achievable, Mr Krishnamurthy Venkata Subramanian, Executive Director at the IMF said.

If the country grew at eight per cent, India could be a USD 55-trillion economy by 2047, the senior IMF official said while speaking at the Times Now Summit.

According to Mr Subramanian, historically from 1991 onwards, the country’s average economic growth has been slightly in excess of seven per cent. India’s economy grew at a better-than-expected 8.4 per cent in the final three-months of 2023, logging the fastest pace in the past one-and-a-half-years.

The growth in the October-to-December period helped take the estimate for the current fiscal (FY 24) to 7.6 per cent.

“And if India grows at eight per cent, India can be a USD 55-trillion economy by 2047,” Mr Subramanian said.

India needed to strengthen its domestic economy as about 5.8 per cent of the country’s GDP came from domestic consumption, the senior IMF official said while emphasising strongly the need for encouraging the manufacturing sector for job creation.

He also pointed out that reforms were required in land, labour, capital and logistics sectors.

Retailers Clock 5 pc Growth in February: RAI

Retailers in India clocked on an average a growth of five per cent in February of this year as compared to the same period last year.

This indicated continued sluggishness in demand, according to the Retail Business Survey by the Retailers Association of India (RAI).

The growth, however, was driven by categories such as sports goods, footwear and quick service restaurants (QSRs).

The Association’s CEO Mr Kumar Rajagopalan said that “customers seem to spend cyclically across categories and regions. East of India was showing strong growth for most part of the financial year, but seems to have weakened over the last couple of months. Similarly, CDIT products growth seem to face headwinds in the last quarter while it grew well in the first three quarters.”

According to the industry body, in February of this year retailers in the west and south India clocked a growth of six per cent each. North India registered a growth of four per cent followed by east India at a growth of only three per cent.

“In categories, sports goods reported a growth of nine per cent followed by footwear (8 per cent) and QSR (7 per cent), compared with sales levels in February 2023,” the RAI said.

Renault-Nissan to Invest USD 600-700-mn to Make India An Export Hub

The Renault-Nissan alliance is stepping up its investments in India to make for and sell in the world’s third-largest automotive market.

The grouping which also includes Mitsubishi Motors, plans to invest USD 600-700-million at its Chennai-based facility to step-up platform localisation and improve sophistication levels in manufacturing, the management said at a press conference.

This will help spawn multiple powertrains, including hybrid cars but not electric vehicles as planned earlier.

“The EV plans are under discussion. The focus is on exports now,” Renault Group’s CEO Luca De Meo said at the press conference.

The company plans to roll-out four cars—five and seven-seater SUVs—across both brands in the next three-years. The localisation will be on the lines of the Renault Kiger and Nissan Magnite—sub four-metre compact SUVs that are made in India for the world.

India is at the heart of the Renault-Nissan alliance’s global operations, the group’s chairman, Jean Dominque Senard, said.

“Renault-Nissan has 1.4-million cars on Indian roads. We have produced 2.7-million cars in our 17-years of operations, about half of which were exported,” Senard said.

“The plant in Chennai has produced about 4.4-million powertrains. This is the next era of this alliance in India,” he said.

Morgan Stanley Increases India’s GDP Growth Forecast for FY 25 to 6.8 Per Cent

Renowned global brokerage firm Morgan Stanley has revised upward its gross domestic product (GDP) growth forecast for FY 24-25 to 6.8 per cent, up from its earlier forecast of 6.5 per cent.

Morgan Stanley has revised its growth forecast for the on-going financial year (FY 24) to 7.9 per cent.

The brokerage firm expects India’s GDP growth to remain robust with an anticipated growth rate of around seven per cent in the fourth-quarter of FY 24 (quarter ending in March 2024).

This growth momentum is expected to be widespread, with converging gaps between rural-urban consumption and private-public capital expenditure in FY 25.

The firm sees a favourable inflation trajectory, with recent trends indicating a moderation in headline inflation.

Softening food inflation, coupled with a meaningful moderation in core inflation due to supply-chain easing and subdued price pressures, is expected.

The firm also foresees a shallow easing cycle in monetary policy, driven by sustained traction in industrial and capital expenditure activities.

These revisions are an optimistic outlook on India’s economic trajectory, with Morgan Stanley highlighting the country’s strengths and stability as defining features of the current cycle.

Morgan Stanley projects headline inflation to average 4.5 per cent in FY 25, down from 5.4 per cent in FY 24, while core inflation is expected to remain subdued at 4.1 per cent.

The firm anticipates further supply-chain normalisation and easing commodity price pressures, which will contribute to the disinflation trend.

Despite the positive economic outlook, Morgan Stanley pointed to the potential risks from global factors and domestic uncertainties. Slower than expected global growth, elevated commodity prices and tighter global financial conditions pose risks to India’s growth and macro-economic stability.

Domestically, the Lok Sabha election to be held in April-May of this year combined with changes in the policy mix require close monitoring, it said.

India’s Forex Reserves at All-Time High

The country’s foreign exchange reserves hit an all-time high of USD 642.49-billion in the week-ended March 15 (earlier this month). This surpassed the previous highest of USD 642.45-billion in September 2021.

India’s forex kitty increased by USD 6.4-billion in the week-ending March 15. Here, it must be pointed out that in the previous week, the reserves moved northward by USD 10.5-billion.

This is the fourth week in a row India’s forex reserves witnessed a growth.

For the week-ended March 15, the foreign currency assets (FCA), a major component of the reserves, increased by USD 6.034-billion to USD 568.386-billion, the Reserve Bank of India (RBI) data showed.

Expressed in dollar terms, the FCA include the effect of appreciation or depreciation of non-US units like the Euro, Pound and Yen held in the forex reserves.

Gold reserves increased by USD 425-million to USD 51.14-billion during the week, the Reserve Bank said.

The Special Drawing Rights (SDRs) were up by USD 65-million to USD 18.276-billion, the apex bank said.