Weekly News 11 - 15 March 2024
Monday, 11 March 2024 (The Economic Times) India Inks Pact with EFTA, Gets $100B Commitment
India recently inked a significant trade and economic partnership deal with the European Free Trade Association (EFTA), comprising Switzerland, Norway, Liechtenstein, and Iceland. This agreement entails a binding commitment of $100 billion in investments over the next 15 years, aiming to boost foreign direct investment (FDI) in India and generate a million direct jobs. Prime Minister Narendra Modi highlighted the potential for collaboration with EFTA's innovative and R&D-driven economies, while Commerce and Industry Minister Piyush Goyal emphasized the modern and ambitious nature of the deal, marking India's first FTA with four developed nations. The agreement, which includes provisions on tariff concessions and investment relations, aims to provide legal certainty and balance asymmetries within the economies involved.
Industry stakeholders have welcomed the deal, anticipating improved market access for Indian goods in EFTA markets and expanded employment opportunities, particularly given the historic $100 billion investment commitment. With EFTA offering substantial tariff concessions covering a significant portion of India's exports, sectors like processed agricultural products stand to benefit, along with industries such as gaming and animation, which receive commitments for mutual collaboration. The agreement also addresses visa categories, securing commitments that facilitate intra-corporate transfers and independent professional services, further enhancing bilateral economic cooperation between India and EFTA member states.
Tuesday, 12 March 2024 (The Economic Times) Ind-Ra Sees India Becoming $15 trillion Economy by FY47
India Ratings and Research (Ind-Ra) predicts that India will ascend to an upper-middle-income country status by fiscal year 2036, with its economy reaching the $15 trillion mark by fiscal year 2047. Maintaining a real GDP growth rate of 6.25% could lead to this transition, with a projected per capita income of $9,218 by FY47. However, a faster growth rate of 8% could expedite the achievement of the $15 trillion milestone by FY43. Ind-Ra underscores the importance of factors like GDP growth, inflation, and exchange rates in determining India's economic trajectory, foreseeing the country's advancement to an upper-middle-income category by FY36 and to a $15 trillion economy by FY43-47.
Despite India's ambition to become a $30 trillion economy by 2047 and attain developed status, economists caution that achieving this goal poses significant challenges. Sustaining a growth rate of 9.7% per annum, necessary for reaching $30 trillion, has been rare historically, occurring only twice in the past 50 years. Additionally, the forecasted slowdown in India's growth rate, expected to dip to 7.6% in FY24, raises concerns about sustaining growth without robust global demand and trade. Ind-Ra highlights the restrictive nature of global demand and trade since FY12, indicating potential hurdles for India's growth trajectory in the coming years.
Wednesday, 13 March 2024 (Financial Express) Coal PSUs target 9 GW renewable capacity by 2030
State-run coal companies in India are aiming to play a larger role in renewable energy, with a target of achieving 9 gigawatts (GW) of renewable energy capacity by 2030, primarily focusing on solar energy. This move aligns with the nation's goal of increasing the share of non-fossil fuels in its energy mix and achieving net-zero emissions by 2070. Currently, major state-run coal enterprises like Coal India, NLC India, and SCCL have a combined solar capacity of 1.7 GW, with additional capacity from windmills. The government has directed these companies to expedite the adoption of solar energy solutions, including rooftop solar panels on government buildings and solar projects in de-coaled areas, to reduce carbon footprints.
The coal ministry is pursuing an ambitious net-zero electricity consumption plan for coal and lignite public sector undertakings, promoting both rooftop and ground-mounted solar projects across mining facilities. Plans are underway to develop solar parks in reclaimed mining areas and other suitable lands to leverage underutilized resources for sustainable energy generation. This initiative is in line with the government's updated NDC target to achieve 50% cumulative electric power installed capacity from non-fossil fuel-based resources by 2030. Companies like Coal India and NLC India are investing significantly in renewable energy projects, aiming to contribute to India's transition towards a green economy and meeting its renewable energy targets.
Thursday, 14 March 2024 (The Indian Express) Tata fab to roll out first chip by 2026-end; PM Modi says ‘historic’
Prime Minister Narendra Modi marked a significant milestone by laying the foundation stone for three semiconductor plants, including India's inaugural commercial fabrication facility. Describing the event as "historic," Modi emphasized its role in shaping a resilient future for the nation. The flagship fabrication plant, a collaboration between Tata Electronics and Taiwan's Powerchip Semiconductor Manufacturing Corporation (PSMC), is set to be established in Gujarat's Dholera, with an estimated investment of Rs 91,000 crore. Additional projects include a chip packaging plant by the Tatas in Assam and another by the Murugappa Group's CG Power in partnership with Japan's Renesas in Gujarat's Sanand city. These ventures, totalling Rs 1.26 lakh crore, were recently cleared under India's capital expenditure incentive scheme for the semiconductor ecosystem, underscoring the government's commitment to bolstering the country's semiconductor capabilities amid evolving global dynamics.
The approvals signify a significant stride in India's semiconductor aspirations, reflecting the government's recognition of electronics manufacturing as a pivotal driver of economic growth, with chip manufacturing at its core. As geopolitical tensions continue to influence global dynamics, India is strategically positioning itself in the semiconductor domain to harness its potential as a catalyst for economic advancement. The establishment of these semiconductor facilities aligns with India's broader vision of fostering self-reliance and technological innovation in key strategic sectors, marking a crucial step towards enhancing the nation's competitiveness on the global stage.
Friday, 15 March 2024 (Financial Express) ₹750-cr ‘blended’ fund for agri startups soon
The government is set to launch a dedicated fund of ₹750 crore to bolster investment and enhance efficiency in the agricultural and allied sectors through technology-driven agri-startups and rural enterprises. Dubbed the "Agri-SURE" scheme, the initiative will employ a blended capital support model involving private sector participation, with Nabventures, a subsidiary of Nabard, overseeing its management. With contributions of ₹250 crore each from the agriculture ministry and Nabard, and the remaining ₹250 crore mobilized from private investors, the fund aims to support approximately 85 startups over the next five years, with individual investments of up to ₹25 crore. Target sectors for investment include agri-tech, food processing, animal husbandry, fisheries, supply chain management, farm mechanization, and biotechnology, with the primary goal of fostering new linkages within the rural ecosystem.
This initiative, announced in the budget for 2022-23 by Finance Minister Nirmala Sitharaman, seeks to address the financing gap faced by startups in scaling their operations and establishing critical forward and backward linkages in rural areas. By promoting investments in innovative, technology-driven ventures in agriculture and allied sectors, the fund aims to stimulate infrastructure development and employment generation in rural communities. Building on existing programs like the 'Innovation and Agri-Entrepreneurship Development' initiative under the Rashtriya Krishi Vikas Yojana, Agri-SURE represents a strategic move to leverage private capital and technological innovation for sustainable growth in India's agricultural landscape.
