Daily News - Thursday, 19 December 2024
GDP growth to accelerate to 6.6% in FY26: India Ratings (mint)
India Ratings and Research (Ind-Ra) projects India’s economic growth to accelerate to 6.6% in FY26, up from its 6.4% forecast for FY25, with investment growth outpacing consumption growth and Gross Fixed Capital Formation (GFCF) expected to rise by 7.2% in FY26, compared to 6.7% in FY25. The Reserve Bank of India’s interest rate cuts, anticipated between 100-125 basis points, will depend on controlled food inflation, while economic risks remain tied to external factors such as tariff wars, capital outflows, and a strengthening dollar. Ind-Ra notes that private sector investments are sector-specific (e.g., roads, airports, and renewable energy), while fiscal and external tightening will persist into FY26 despite an easing of monetary conditions.
Tea, Rice Exports to Iran may Take a Hit on Rial Devaluation (The Economic Times)
India’s exports of orthodox tea and basmati rice to Iran may face challenges as Iran devalues its currency, raising the dollar exchange rate to 596,470 rials, making imports costlier; this impacts premium orthodox tea ($3/kg for Indian tea vs. $4.2/kg for Sri Lankan tea) and basmati rice, which saw prices drop by ₹800/quintal due to reduced demand and insurance challenges. Iran, which consumes 30-35 million kg of India’s orthodox tea annually, might still rely on medium-grade tea for affordability, while basmati rice exports—25% of India’s total 5.24 million tonnes in FY24—are shielded by government-subsidized rates of 285,000 rials per dollar for rice imports. India’s overall tea exports are expected to rise to 260 million kg in 2024 from 220 million kg in 2023, despite fluctuating Iranian demand.
After Mexico, Canada, and China, Trump trains the tariff gun on India (The Indian Express)
US President-elect Donald Trump has criticized India’s tariff regime, highlighting 100% tariffs on certain US products and threatening reciprocal taxes on Indian goods, which could strain the $120 billion bilateral trade relationship where India currently enjoys a surplus. Trump’s remarks come as India faces internal pressures to raise tariffs, including a proposed 25% increase on steel imports, which contrasts with ongoing efforts to align tariffs with global averages to boost competitiveness. While the US-China trade war previously benefited India with a $36.8 billion export increase, US tariffs on Indian goods could hamper the country’s already sluggish export growth and its position in global trade dynamics.
Nov. pharma sales up 10%, fastest in 13 mths (Financial Chronicle)
India’s pharmaceutical market saw a 1.8% volume growth in November 2024, reversing four months of decline, with value growth hitting 9.9%, the fastest in 13 months, driven by 5.4% price increases, 2.7% growth from new launches, and robust demand across therapies like derma (15.8%), cardiac (11.7%), and gastro (11%). Chronic and acute segments showed strong performance, while the market introduced 746 new stock-keeping units (SKUs) and revised prices for 3,024 SKUs, highlighting innovation and dynamic pricing strategies. From January to November 2024, the market posted an average value growth of 7.7% year-on-year despite negative 0.7% volume growth, reflecting resilience amid challenges.
Cll focuses on boosting exports (Financial Chronicle)
The Confederation of Indian Industry (CII) has emphasized the need to address critical challenges in manufacturing and export growth, particularly for MSMEs, to double India’s share in global trade from the current 2%. Key recommendations include enhancing digital trade infrastructure, adopting global best practices like the Customs Authority on Advance Ruling Regulation (CAARR) 2021, and strengthening the Authorized Economic Operator program to reduce trade costs and boost efficiency. CII also advocates for a unified online portal for port-related issues and smoother refund processes without appeals in undisputed cases, aiming to streamline operations and improve exporter productivity.
