Winning Bizness Economic Desk

India’s Prime Minister Mr Narendra Modi on May 2 of this year commissioned the country’s first deep water transhipment port in Kerala’s Vizhinjam.

Vizhinjam International Deepwater Seaport in the southern state of Kerala was conceptualised in 1991 and has acquired operational status in 2025.

It is important to point out here that this port has the potential to make India a global shipping hub going forward.

Built under the Public Private Partnership (PPP) mode at a cost of Rs 8,900-crore, the port is operated by India’s leading corporate blue-chip conglomerate, the Adani Group, with the Kerala government holding a majority stake in it.

What needs highlighting here is that following the port getting operational, it has the potential of saving around USD 220-million annually for the country.

A transhipment port is one which has terminals where cargo containers are shifted from one vessel to another before the ships reach their destinations.

These ports are used to process large amounts of international cargo, something for which the country had to rely previously on foreign ports such as Colombo in Sri Lanka to do.

In the past, the absence of such infrastructure facilities within India meant longer transit times and potential delays for businesses. The Vizhinjam port will help solve this problem.

It needs to be pointed out here that without a deepwater transhipment port in India, 75 per cent of the country’s transhipment cargo comes through foreign ports such as Colombo (Sri Lanka), Singapore and Jebel Ali in the United Arab Emirates (UAE).

Consequently, there are longer transit times and delays for domestic traders costing them an additional USD 80-to-USD 100 per container.

What needs highlighting here is that apart from the money aspect, having its own infrastructure to handle transhipment cargo would help insulate the country’s supply-chains from potential geo-political shocks.

A big advantage is that the port’s location puts it close to international shipping routes, making it possible for India to service big cargo vessels with a capacity upward of 20,000 containers.

Additionally, the port’s location is optimal because it has minimal sand movement along the coast, thus crucially reducing maintenance costs.

GST Collection Touches All-Time High of Rs 2.36-lakh-crore in April

The gross Goods and Services Tax (GST) collection has hit an all-time high of Rs 2.36-lakh-crore in April of this year.

This, it must be highlighted is 12.6 per cent higher than the collection of Rs 2.10-lakh-crore in April of last year (2024).

The net GST collection during the month is Rs 2.09-lakh-crore, up 9.1 per cent when compared to the same month in the year-ago period.

While gross revenue from domestic transactions increased by 10.7 per cent to Rs 1.89-lakh-crore, the revenue from imports moved northward by 21 per cent to Rs 46,900-crore.

The total refunds climbed up steeply by 48 per cent to Rs 27,341-crore.

A point that needs highlighting here is that the strong double-digit growth in gross GST collections in April of this year reveals improved economic activities.

In FY 25, gross GST collections moved northward by an average 9.5 per cent, showing a likely saturation of growth potential of the GST.

The net revenue averaged a growth of 8.6 per cent in FY 25.

The GST is a big source of revenue for both the centre and states with the consumption tax accounting for around 28 per cent of the central government’s total tax revenue in FY 25.

The April collection is encouraging and most states and Union Territories (UTs) reported positive growth, with only a handful seeing single-digit increases.

India Ends K Subramanian’s Term at the IMF

India has announced the termination of Dr Krishnamurthy Subramanian’s services as Executive Director (ED) at the International Monetary Fund (IMF) with immediate effect.

Mr Subramanian took charge as Executive Director on November 1, 2022, and he still has six-months left in his three-year tenure.

“The Appointment Committee of the Cabinet (ACC) has approved termination of Dr Krishnamurthy Subramanian as Executive Director (India) at the International Monetary Fund with immediate effect,” the ACC’s order dated April 30 stated.

Here, what needs pointing out is that on the IMF’s official web-site, Mr Krishnamurthy Subramanian was listed as Executive Director until May 2.

From May 3, the role of the constituency representing India, Bhutan, Bangladesh and Sri Lanka has been marked `vacant’.

Mr Subramanian’s departure comes just days before the IMF Executive Board’s meeting on May 9 which will review funding arrangements for Pakistan.

India is likely to oppose additional financial assistance to Pakistan at the meeting, citing concerns over terror financing.

Before Mr Subramanian, another economist from India Mr Surjit Bhalla served as India’s Executive Director at the IMF from November 2019. He was re-elected in 2020 for a second two-year term.

Strong Demand Could Help India Grow at Between 6.5-6.7 pc in FY 26: Deloitte

India’s GDP growth this fiscal (FY 26) has been projected at between 6.5 per cent-to-6.7 per cent, said Deloitte.

Deloitte has estimated the country’s GDP growth at around 6.3 per cent-to-6.5 per cent for last year (FY 25 or the year-ended March 31, 2025).

The tax incentives provided in February’s budget are expected to help spur domestic demand this fiscal in an otherwise uncertain global business environment.

The economic outlook for this financial year hinges on a delicate balance between evolving trade relations and government efforts to boost domestic consumer demand.

“Growth this fiscal will be contingent on two opposing forces,” Deloitte’s India’s Economy Outlook stated.

The first factor would be the positive impact of tax incentives and at increasing consumer spending. The second and opposing force would be the potential negative impact of uncertainty in global trade networks on the Indian economy.

“The interplay of tax stimulus and trade uncertainties could keep growth between 6.5 per cent-to-6.7 per cent for the current fiscal year,” it stated.

The central government in its budget had announced tax incentives which would benefit the middle-class. Despite this, the higher economic activity is expected to offset the decline in reserves, helping the government adhere to its fiscal deficit target.

“The tax exemptions announced during the budget will increase disposable income in the hands of the young population, with higher income elasticity,” Deloitte India’s Economist Rumki Majumdar was quoted in a media report as saying.

An important point to note here is that a bilateral trade agreement between India and the United States by the fall, will help the country find new opportunities and tap into the US market amidst global trade uncertainties, Deloitte said.

India’s Foreign Exchange Reserves Climb USD 1.98-bn to USD 688.13-bn

The country’s foreign exchange reserves moved northward USD 1.983-billion to UD 688.129-billion during the week ended April 25, the Reserve Bank of India (RBI) said.

This is the eighth consecutive week of an increase in the kitty, which had jumped USD 8.31-billion to USD 686.145-billion in the previous reporting week.

The foreign exchange reserves had touched an all-time high of USD 704.885-billion in end-September 2024.

For the week ended April 25, the Foreign Currency Assets (FCAs), a major component of the reserves increased USD 2.168-billion to USD 580.663-billion, the Reserve Bank said.

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

Gold reserves slipped USD 207-million to USD 84.365-billion, the country’s apex bank said. The Special Drawing Rights (SDRs) were up USD 21-million to USD 18.589-billion, the RBI data showed.

India’s reserve position with the IMF was also up USD 2-million to USD 4.512-billion in the reporting week, the apex bank’s data showed.

RBI Data Shows Credit Growth to Agriculture Sector Dips in March

Bank credit growth to the country’s agriculture sector slowed down to 10.4 per cent on a Year-on-Year (YoY) basis for the fortnight ended March 21 of this year.

Advances to the industry remained flat at eight per cent as per the Reserve Bank of India (RBI) data released just a few days ago.

The country’s apex bank has released the data on sectoral deployment of bank credit collected from 41 select commercial banks, accounting for about 95 per cent of the total non-food credit deployed by all banks taken together.

Credit to agriculture and allied activities registered a growth of 10.4 per cent YoY as of the fortnight ended March 21, 2025, as against 20 per cent in the corresponding fortnight of the previous year.

“Credit to industry expanded by 8.0 per cent (YoY) as on the fortnight ended March 21, 2025, same as in the corresponding fortnight of the previous year,” the Reserve Bank said.

Among major industries outstanding credit to `petroleum, coal products and nuclear fuels’, `basic metal and metal products’, `all engineering’ and `construction’ clocked a rapid YoY growth.

Here, it is important to point out that credit growth in the infrastructure segment, however, decelerated.