Winning Bizness Economic Desk

India’s premier public sector lender State Bank of India (SBI) has lowered its GDP growth forecast for fiscal 2024-25 (FY 25) to 6.3 per cent. This, it is important to point out, is lower than the National Statistical Office (NSO)’s projection of 6.4 per cent.

The bank said that it has lowered its GDP growth projection due to multiple economic challenges, including a slowdown in lending and manufacturing, shortly after the Ministry of Statistics and Programme Implementation (MoSPI) released its Gross Domestic Product (GDP) projections just a few days ago.

State Bank of India’s revision reflects concerns over a slowdown in lending and manufacturing, coupled with the effects of a large base effect from the previous year.

A general slowdown in aggregate demand is evident in the first advance estimates for GDP, which indicates tempered expectations for FY 25, SBI said.

“Historically, the difference between the RBI’s estimate and NSO’s estimate is always in the range of 20-30 basis points (bps) and hence the 6.4 per cent estimate of FY 25 is along expected and reasonable lines. We, however, believe that GDP growth for FY 25 could be around 6.3 per cent with downward bias,” SBI said.

The first advance estimates, released by the government for this fiscal (FY 25), suggests a GDP growth rate of 6.4 per cent, a steep slide from the 8.2 per cent of last fiscal (FY 24).

According to the NSO’s data, agriculture and allied activities are projected to grow by 3.8 per cent in FY 25, up from 1.4 per cent in FY 24, driven by robust policy measures and public infrastructure development.

However, a point that requires highlighting here is that industry and services is expected register a slowdown in growth as compared to last year.

The report underlined the significance of government consumption, predicting nominal growth of 8.5 per cent and real growth of 4.1 per cent, which is expected to boost the economy.

An important point to note here is that the manufacturing and services sectors’ under-performance presents a big challenge to maintaining higher growth rates.

Private consumption has emerged as a key driver of economic growth with an anticipated real growth rate of 7.3 per cent this fiscal, up from the four per cent of the last fiscal (F 24).

It must be highlighted here that this increase is backed by strong agricultural growth and lower food inflation.

However, what should also be mentioned is that despite this positive trend, investment growth has slowed to 6.4 per cent, down from nine per cent in the previous year, with no significant rebound expected in the second-half of the financial year.

India’s Steel Demand to Grow 8-9 pc in 2025: CRISIL

The country’s steel demand is likely to expand by 8-to-9 per cent this year (2025) over the previous year.

This will be propelled by a shift towards steel-intensive construction in the housing and infrastructure sectors along with a better demand from engineering, packaging and other segments, CRISIL said.

Domestic supply, however, remains a point of concern.

“In 2024, supply growth from India’s mills was benign at 5.2 per cent with extended periods of planned and maintenance shutdowns,” said Mr Sehul Bhatt, Director—Research at CRISIL Market Intelligence and Analytics.

The aggregate crude production by the top seven players increased by a very tiny 0.05 per cent while finished steel production rose by 0.5 per cent in 2024 over the previous year.

However, crude and finished steel production from medium and small players increased 14 per cent and 11.3 per cent, highlighting the consistent demand growth from long steel end-users.

An important point to highlight here is that muted domestic supply has led to a big jump in imports.

The country’s steel imports moved steeply northward by 41 per cent to 4.7-million tonnes in the first six-months of the current financial year, while exports slid by 36 per cent to 2.31-million tonnes during the same period.

The steel demand in the country climbed up by 11 per cent last year (2024) over the previous year, whereas the overall global steel demand fell by one per cent during the year.

In 2025, global steel demand is expected to inch up by 0.5-1.5 per cent on the back of easing financial conditions and pent-up demand from key steel consuming economics.

Tata Co Obtains CCI Approval to Acquire Majority Stake in Pegatron India

Tata group company, Tata Electronics (TEPL), has obtained the Competition Commission of India (CCI) approval to acquire a majority stake in Pegatron Technology, a Taiwanese contract manufacturer and Apple iPhone supplier.

Tata Electronics is a wholly-owned subsidiary of Tata Sons and has expertise in manufacturing high-precision components for large customers.

The company will acquire the majority shareholding of Pegatron India in two tranches, CCI said in a release.

Tata Electronics, through Tata Electronics Systems Solutions is also engaged in the provision of Electronics Manufacturing Services (EMS) for smart phones.

Pegatron India provides EMS for smart phones like those of Apple and exports its products to North America, Asia and Europe.

Its sole Indian plant is located in Chennai, employing nearly 10,000 workers and producing an estimated five-million iPhones annually.

In October 2023, Tata Electronics also acquired the Taiwanese contract manufacturer Wistron InfoComm for USD 131-million (over Rs 1,000-crore) becoming the first Indian company to manufacture iPhones for both domestic and global markets.

Akasa Air Appoints Belson Coutinho as COO

Inda’s domestic air-carrier Akasa Air has announced the appointment of its co-founder and marketing expert Mr Belson Coutinho as its Chief Operating Officer (COO) from January.

Mr Coutinho will be responsible for in-flight services, airport services, maintenance and engineering, flight operations, Integrated Operations Command Centre (IOCC), among others, while also spearheading Akasa Air Learning Academy, the airline in a statement.

Mr Coutinho was holding the position of the airline’s Chief of Marketing and Experience Officer (CMO and CXO), prior to this appointment.

“His passion for brand-building, service excellence, training, technology, processes, employee centricity and sharp focus on cost leadership equips him to bring tremendous value to his new role as our COO,” said Mr Vinay Dube, founder and Chief Executive Officer (CEO) of Akasa Air.

India to Export 1-mn Tonne of White Rice to Indonesia

India will export one-million tonne of non-basmati white rice to Indonesia annually for four-years, a government official was quoted in the media as saying.

India is the world’s biggest exporter of rice.

In Indonesia, harvesting typically commences in March and rice is a staple for its 280-million population.

Indonesia’s output is estimated to fall 2.43 per cent this year to 30.34-million tonnes due to a longer spell of dry weather in 2023, necessitating imports.

The Union Ministry of Co-operation entered into a deal with Indonesia’s ministry of trade to ship supplies through the National Co-operative Exports Limited, a national enterprise set up last year, the official said.

The Indian co-operative will source white rice from the open market through open bids from co-operative societies, the official said.

 

Here, it is important to point out that India had restricted rice exports first in September 2022, banning shipments of broken rice. It also imposed a 20 per cent duty on white rice.

In July 2023, it banned all shipments of rice.

The country had produced 137.82-million tonnes in 2023-24 despite poor rains and last year’s summer-sown or kharif output was 119.93-millon tonnes, according to official data.