Winning Bizness Economic Desk
India is on track to become the third-largest economy in the world by fiscal year 2030-31, credit rating agency S&P Global said in a report.
The report—India Forward Emerging Perspectives—said that this growth will be driven by a robust projected annual growth rate of 6.7 per cent.
The report pointed out that in order to maintain the growth momentum, continued economic reforms were crucial.
This would help improve business transactions and logistics, boosting private sector investment and reducing reliance on public capital.
The credit rating agency anticipated that the Indian equity market would stay dynamic and competitive due to strong growth prospects and better regulation.
Foreign inflows into Indian government bonds have moved northward steeply since the country joined major emerging market indexes which is anticipated to grow, S&P Global said, adding that the country must develop infrastructure and geo-political strategies, particularly regarding its extensive coastline, to maximise trade benefits.
According to the credit rating agency, a strong port infrastructure was required to match rising exports and bulk commodities imports because about 90 per cent of India’s trade is maritime.
Pointing out that domestic energy demands were increasing, the report stated that the country needed to develop sustainable technologies including renewables and low-emission fuels, balancing energy security with its energy transition plans.
S&P Global suggested that the use of AI would boost economic growth of the economy, adding it would bring opportunities for public-private partnerships to replicate the success of India’s digital infrastructure.
Here, it must be pointed out that the country’s GDP expanded by a very healthy 8.2 per cent during FY 24, continuing to be the fastest-growing major economy—it grew by 7.2 per cent in 2022-23 and 8.7 per cent in 2021-22, according to official data.
Ready-made Garments Exports Shoot Up To USD 1.26-billion in August
India’s Ready-Made Garments (RMG) exports from India shot up 11.9 per cent on a Year-on-Year (YoY) basis to USD 1.26-billion in August of this year despite the on-going crisis in the Red Sea region and global headwinds pulling down overall goods exports.
Exporters are hopeful that the growth momentum would continue as long-term policy support schemes focussed on garment exports.
Additionally, certain engagements with old FTA partner countries such as Japan and Korea, are starting to yield positive results.
Total RMG exports for the April-to-August 2024-25 period was USD 6.39-billion.
“I am hopeful that the growth momentum will continue. While the global garment sourcing is realigning itself, we are ready to play a significant role. The long-term policy support for garment exports related schemes will provide stability in the policy regime and will help further thrust garment exports from the country,” Mr Sudhir Sekhri, chairman, AEPC, said.
One of the “most heartening” developments was the news that the engagement with old FT partner countries like Japan and Korea had started yielding positive results, Mr Sekhri said.
RMG exports to Japan, Korea, Australia, Mauritius and Norway expanded by 7.7 per cent, 16.8 per cent, 12.5 per cent, 6.6 per cent and 17.3 per cent, respectively, in the first quarter (Q1) of this fiscal year (FY 25).
India’s Oilmeals Exports Decline 4 Per Cent in April-August period
India’s oilmeals export slid southward by four per cent to 18.68-lakh tonnes (LT) in the April-to-August 2024-25 period as against the 19.45-lakh tonnes (LT) in the same year-ago period.
This is according to data from the Solvent Extractors Association of India (SEA) and it showed that the country’s oilmeals export registered a slide in the month of August as well.
India exported 3.14-lakh tonnes of oilmeals during August of this year as against 3.54-lakh tonnes in the same month of last year (2023), which marks a slide of 11 per cent.
Mr B V Mehta, the executive director of Solvent Extractors Association (SEA) attributed this reduction in export during the first five-months of 2024-25 to the decline in export of rapeseed meal and castor seed meal.
India exported 8.84-lakh tonnes of rapeseed meal during the April-to-August 2024-25 period as against 11.55-lakh tonnes in the corresponding period of 2023-24.
Here, it must be pointed out that Bangladesh and South Korea are the major importers of rapeseed meal. The current crisis in neighbouring Bangladesh may adversely affect, at least temporarily, the export of rapeseed meal by road or rail.
The country’s castor seed meal export moved southward to 1.16-lakh tonnes in the April-to-August period of 2024-25 as against the higher 1.46-lakh tonnes in the same period of the last year (2023-24).
A point of interest to mention here is that export of soyabean meal from India rose to 8.48-lakh tonnes in the first five-months of 2024-25 as against 4.81-lakh tonnes in the corresponding period of the previous fiscal (FY 24).
Mr Mehta said that higher imports by Iran and France helped bolster the export of soyabean meal during the April-to-August period of 2024-25.
Iran imported 1.14-lakh tonnes of soyabean meal from India (including shipment via Dubai) and France 83,603-tonnes during the period.
Other major importers of oilmeals include South Korea, Vietnam, Thailand and Bangladesh.
Vegetables Output Slips, Fruits Yields Increase
The country’s horticulture production is estimated to have dipped marginally by 0.65 per cent to 353.19-million tonnes (MT) in 2023-24 (July-to-June) as compared to 355.48-million tonnes (MT) in the previous year.
The above is according to the third advance estimate released a few days ago.
In the second advance estimate, the agriculture minister had estimated horticulture production at 352.23-million tonnes.
The drop in overall horticulture output was due to lower vegetables production. Fruits output has, however, increased.
Among all vegetables, the drop in onion was very high. The vegetable production is pegged at 205.80-MT, lower than the 212.55-MT in 2022-23.
The third advance estimate is up from the 204.96-MT of vegetables pegged in the second estimate in April.
The minister said that an increase in the production of tomatoes, cabbage, cauliflower and some other vegetables offset a decline in staples like potatoes and onions.
Onion production is estimated at 24.24-MT, down from 30.21-MT a year ago, and potato production to 57.05-MT, down from 60.14-MT.
However, tomato production is estimated to have increased to 21.32-million tonnes from 20.43-million tonnes. Potato production had dipped in Bihar and West Bengal, while onion fell in Maharashtra.
On the other hand, fruit production has been pegged at 2.29 per cent higher at 112.73-million tonnes in 2023-24 from 110.21-million tonnes in 2022-23.
The minister said that increased production was noticed in mango, banana, lime/lemon, grapes and custard apples.
However, it also noted that production of apples, citrus fruits, guava, litchi, pomegranate and pineapple had dropped.
The estimate also indicated that output in honey, flowers, plantation crops, spices and aromatic and medicinal plants together was 34.66-million tonnes, up by six per cent from 32.72-million tonnes in the previous year.
These figures highlight the mixed performance of India’s horticulture sector, with some crops flourishing while others faced tough times in the 2023-24 crop year.
Forex Reserves Rise to a Fresh High of USD 689.45-billion
India’s forex reserves moved steeply northward by USD 223-million to a new all-time high of USD 689.458-billion for the week ended on September 13, according to data released by the Reserve Bank of India (RBI).
The overall forex kitty had jumped by USD 5.248-billion to a high of USD 689.253-billion for the previous reporting week ended on September 6 of this year.
For the week ended September 13, the foreign currency assets (FCAs), a major component of the reserves, however decreased by USD 515-million to USD 603.629-billion, the data showed.
Expressed in dollar terms, the foreign currency assets (FCAs) 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 899-million to USD 62.887-billion during the week, the Reserve Bank said.
The Special Drawing Rights (SDRs) dropped by USD 53-million to USD 18.419-billion, the apex bank said.
India’s reserve position with the International Monetary Fund (IMF) declined by USD 108-milllion to USD 4.523-billion in the reporting week, the apex bank data showed.
