Daily News - Tuesday, 19 November 2024

Electronics among top Apr-Oct exports (mint)

⁠India’s merchandise exports rose to $252.28 billion during April-October 2024, compared to $244.51 billion a year ago, driven by growth in key sectors like engineering goods (up 9.73% to $67.49 billion), electronics (up 23.7% to $19.07 billion), and pharmaceuticals (up 7.97% to $17.05 billion), while traditional sectors such as petroleum products (down 14.04% to $40.94 billion) and gems and jewellery (down 7.73% to $17.17 billion) reported declines. Exports in October reached $39.2 billion, reflecting resilience despite global headwinds, though the trade deficit widened due to higher imports, with top-performing commodities including tobacco (up 38.1%), handicrafts (up 13.9%), and rice (up 5.27%). Analysts project FY25 exports to reach $435 billion, emphasizing the need to address sectoral challenges like European demand disruptions for petroleum and competitive pressures in gems and jewellery to sustain momentum. 

⁠India trade deficit with Asian peers rising faster (Financial Chronicle)

⁠India’s trade deficit with Asian trading blocs like ASEAN (up 302.9%), South Korea (up 164%), and Japan (up 138%) from 2007-09 to 2020-22 has grown significantly faster than its global trade deficit, which rose by 81.2% in the same period, with a notable 76% increase in the deficit with ASEAN in the past five years alone. The deficit with China, which reached $85 billion in FY2024, remains a major concern, exacerbated by Free Trade Agreements (FTAs) with ASEAN, South Korea, and Japan, allowing duty-free access for up to 90% of traded categories, while China’s indirect trade through ASEAN prompted stricter enforcement of origin certificates. Experts highlight that FTAs have deepened India’s trade imbalances with these nations, leveraging their robust manufacturing capacities, and necessitating strategic policy revisions to curb the rising deficits. 

⁠US tariff war may hit textiles, auto parts (Financial Chronicle)

⁠Potential tariff hikes under the Trump presidency could impact India’s export shipments in key sectors such as textiles, chemicals, metal products, auto components, and telecom, while exports like cut and polished diamonds and pharmaceuticals may face less disruption, according to ICRA. Indian textile exports, particularly vulnerable to trade policy changes, could lose competitiveness to Bangladesh and Vietnam, while auto components, heavily reliant on the US market, may also see reduced demand. Chemicals, dyes, and pigments may remain relatively stable due to China’s strong market presence, but downstream metal products (e.g., tubes and fittings) and telecom exports could face challenges from higher duties, threatening India’s share in these segments. 

FM: Bank rates stressful, make them affordable (Financial Chronicle)

Union Finance Minister Nirmala Sitharaman urged banks to lower borrowing costs, describing current interest rates as “very stressful” and emphasizing their role in driving industrial expansion critical to India’s “Viksit Bharat” aspirations. Speaking at the 11th SBI Banking and Economics Conclave, she aligned with Commerce Minister Piyush Goyal’s earlier call to prioritize industrial growth over food inflation in monetary policy, though CPI inflation breaching 6% in October limits the scope for near-term rate cuts. Sitharaman also highlighted manageable core inflation levels (3-4%), government efforts on supply-side measures for essential commodities, and set ambitious lending targets for MSMEs—₹7 lakh crore by FY27—to support growth. 

India asks rich nations to remove curbs on tech transfer (Financial Express)

India, at a UN ministerial round-table on pre-2030 ambition in Baku, urged developed nations to achieve net-zero emissions by 2030, dismantle barriers to technology transfer, and bridge the climate finance gap to enable equitable climate action. Environment Secretary Leena Nandan emphasized that while innovative clean energy technologies are crucial for a low-carbon future, intellectual property rights and high costs hinder access for developing countries, and COP29 must ensure these technologies are affordable and adaptable. India also called for $1.3 trillion annually in public climate finance, rejecting profit-driven private sector funding, and criticized unilateral measures like the EU’s Carbon Border Adjustment Mechanism for disproportionately burdening poorer nations with climate action costs.