Winning Bizness Economic Desk
India’s finance ministry in its monthly economic review for October 2024 said that food inflation was expected to ease over the next few months.
This downward movement in food inflation would be because of the likelihood of a bumper kharif harvest.
Here, it must be pointed out that in October of this year, retail inflation had climbed up to 6.21 per cent, a 14-month high, propelled by elevated food inflation in a “few vegetables”, the review said.
“Supply disruptions from heavy rains in major producing states contributed to price pressures in tomatoes, onions and potatoes, while elevated global prices drove up oil and fat inflation,” it said.
A favourable monsoon, adequate reservoir levels and higher minimum support prices are likely to boost rabi sowing and production.
The report stated that many hi-frequency indicators of economic activity have shown a `rebound’ in October amid a clouded global economy and a brief period of softening momentum over the monsoon months.
The indicators include rural and urban demand and supply-side variables like Purchasing Managers’ Index and E-way bills generation, the report released by the Department of Economic Affairs pointed out.
The economic outlook is “cautiously optimistic” for the next few months with agriculture likely to benefit from favourable monsoon conditions, increased minimum support prices and adequate supply of inputs.”
The report further pointed out that “geo-political developments and policy decisions of the next administration in the US will determine the course of trade and capital flows.”
India Set To Be Third-Largest Economy: Goyal
The country is on track to become the third-largest economy in the world with a stable currency, substantial foreign exchange reserves and preparedness to meet global challenges, India’s commerce and industries minister, Mr Piyush Goyal said.
“Today, India stands proud, resilient and determined on the cusp of an extraordinary transformation. Under Prime Minister Mr Narendra Modi, the nation is well on its way to becoming the third-largest economy in the world and is prepared to meet global challenges,” Mr Goyal said at an event recently.
The Indian currency (Rupee) has held its position as one of the least volatile among major currencies, and forex reserves stand at about USD 675-billion—among the five largest globally, Mr Goyal said.
Pointing out that India was committed to promoting sustainable trade practices and green technologies, the Minister said that advancing renewable energy targets, the country had already achieved 200 GW of the 500 GW target set for 2030.
“To encourage private sector participation in deep technology and sunrise domains, the government of India has announced a fund of Rs 1-trillion, which will provide long-term financing to promote innovation. I urge industry to leverage this fund to scale-up innovation in critical areas in a public-private mode, with academia partnerships,” Mr Goyal said.
Russia Now Largest Crude Oil Supplier to India
India’s Union Minister for Petroleum and Natural Gas, Mr Hardeep Puri, said that Russia has now become the largest supplier of crude oil to India, accounting for more than 35 per cent of the country’s imports.
Speaking at an event, Mr Puri pointed to the dramatic shift in India’s oil sourcing over the past two-years, with Russian oil imports surging from a mere 0.2 per cent in February 2022 to consistently occupying the top spot in recent months.
“For quite some time now Russia has been the largest supplier of crude to India. The percentage would be upwards of 35 per cent, but it varies from month to month,” the union minister said.
According to Mr Puri, the increase was influenced by global price dynamics and availability, with India balancing long-term contracts with spot market purchases.
The union minister further pointed to the evolving nature of India’s energy partnerships mentioning other significant suppliers such as Saudi Arabia, the United Arab Emirates (UAE), Iraq, Kuwait and the United States.
Mr Puri, speaking about the country’s progress in the energy sector, said that it is evident in key achievements such as the reduction of fuel prices over a three-year reference period, making India the only country globally to achieve this.
The government has achieved success in increasing ethanol blending in petrol from 1.53 per cent in 2014 to 16 per cent in 2024 with the goal of reaching 20 per cent next year, Mr Puri said.
“This achievement places India as the second-largest economy in bio-fuel blending following Brazil. The expansion of City Gas Distribution (CGD) coverage was also underscored with 100 per cent CGD area coverage expected in 2024, compared to just 5.5 per cent in 2014, he said.
India’s Engineering Exports Rise in October
The country’s engineering exports achieved a remarkable milestone in October of this year, clocking a Year-on-Year (YoY) growth of 38.5 per cent, reaching USD 11.19-billion, as compared to USD 8.08-billion in October of last year (2023).
What requires highlighting here is that this is the sixth consecutive month of growth and the first instance this fiscal (FY 25) when monthly exports breached the USD 10-billion mark.
Cumulatively, engineering exports for the April-to-October period (2024-25) moved northward 8.27 per cent to USD 66.58-billion, up from the USD 61.50-billion during the same period last year.
Every sector’s share in the country’s total merchandise exports also moved northward, reaching 28.72 per cent in October of this year as per the Department of Commerce’s estimates.
The growth was broad-based with 33 of 34 engineering panels showing positive growth. However, on a cumulative basis, seven panels including iron and steel, registered declines.
Despite a 29.4 per cent jump in iron and steel exports in October, cumulative exports from the segment declined by 20.91 per cent due to competition from China and weak demand in key markets like Europe and the Middle-East (ME).
A point to note here is that non-ferrous metals showed mixed trends. Copper, aluminium and zinc exports expanded by 26 per cent,17 per cent and 31 per cent, respectively, in October.
However, cumulative figures showed slides due to earlier sluggish months, geo-political tensions, restrictive trade policies and rising domestic demand, particularly from the EV segment.
State-wise, Maharashtra, Tamil Nadu and Gujarat propelled engineering exports, contributing over 56 per cent of the total. What needs to be highlighted here is that these trends reveal the resilience and dynamism of the country’s engineering sector amid global challenges.
India’s Milk Production Up 5.62 pc in FY 24
The country’s milk production registered a 5.62 per cent growth over the past 10-years to reach 239.30-million tonnes (MT) during 2023-24 as per data from the Centre.
This is despite the milk output of buffaloes declining by 16 per cent annually. The total milk production in the country was 146.3-million tonnes in 2014-15.
The Union Minister of Fisheries, Animal Husbandry and Dairying, Mr Rajiv Ranjan Singh, released the annual publication of Basic Animal Husbandry Statistics 2024 (BAHS 2024) on the occasion of National Milk Day.
According to the report, production has increased by 3.78 per cent during 2023-24 over estimates of 2022-23. Milk output in the country stood at 230.58 million tonnes in 2022-2023.
Here, it must be pointed out that the annual growth rate has decreased in the past two fiscal years. In 2017-18, the growth was 6.62 per cent, while it stood at 6.47 per cent in FY 19.
The growth rate in FY 20 and FY 21 was 5.69 per cent and 5.81 per cent, respectively. However, growth slid to 5.77 per cent in FY 22 and 3.83 per cent and 3.78 per cent in FY 23 and FY 24, respectively.
The Minister said that dairy was the single largest agricultural commodity contributing five per cent to the national economy and directly employing more than eight-crore farmers. The majority of these are women.
“India is ranked first in milk production, contributing 24 per cent of global milk production with milk production reaching 230.58-million tonnes in 2022-23….,” he said.
The top five milk producing states during 2023-24 were Uttar Pradesh with a share of 16.21 per cent of total milk production followed by Rajasthan (14.51 per cent), Madhya Pradesh (8.91 per cent), Gujarat (7.65 per cent), and Maharashtra (6.71 per cent).
In terms of annual growth rate (AGR), the highest AGR was registered by West Bengal at 9.76 per cent, followed by Jharkhand at 9.04 per cent, Chhattisgarh at 8.62 per cent and Assam at 8.53 per cent over the previous year.
