Daily News - Tuesday, 14 January 2025

⁠China, India seek new oil supplies (mint)

⁠Chinese and Indian refiners are actively seeking alternative crude supplies as the latest U.S. sanctions on Russian oil producers Gazprom Neft and Surgutneftegaz, along with 183 vessels, aim to restrict Moscow’s revenues from oil exports. In response, Bharat Petroleum purchased 2 million barrels of Oman crude for February loading, and India has permitted Russian oil cargoes booked before January 10 to be discharged at ports under a waiver until March. Meanwhile, five sanctioned tankers remain anchored off China’s Shandong province, highlighting the immediate impact on shipping and trade dynamics.

⁠FY26 fiscal deficit may be 4.4-4.6% of GDP, says report (mint)

⁠India’s fiscal deficit is expected to range from 4.4% to 4.6% of GDP in FY26, with a target of 4.9% for FY25 and a reduction to below 4.5% in FY26, according to Goldman Sachs. The fiscal impulse is anticipated to dampen growth, with capital expenditure growth slowing and limited scope for welfare spending increases, while the fiscal deficit for FY25 could fall to 4.7-4.8% due to lower expenditure and higher-than-expected dividends from the RBI. India’s GDP growth slowed to 5.4% in the September quarter, highlighting the challenges of uneven sectoral performance, which the upcoming budget aims to address for economic recovery. 

⁠Food inflation down to 8.34% in Dec (Financial Express)

Retail food inflation eased to 8.34% in December, down from 10.87% in October, due to a decline in vegetable prices with the arrival of winter harvests, while edible oil inflation remained high at 14.6%. Inflation in pulses moderated to 3.83%, reflecting robust kharif harvests and lower output of key varieties like chana and tur, while cereal inflation remained at 6.51%, supported by a bumper rice harvest. The government plans to offload 2.5 million tonnes of wheat to curb future price rises, and inflation in spices, meat, and milk showed a gradual decline. 

⁠Rupee depreciation over long term good for India: Panagariya (Financial Express)

⁠Arvind Panagariya, Chairman of the Sixteenth Finance Commission, endorsed India’s current exchange rate policy of allowing the rupee to depreciate in the long term while managing it in the short term, citing the critical role of the 1991 devaluation in driving economic liberalization. He highlighted that the rupee’s depreciation over the decades spurred a six-fold increase in exports from $50 billion in 2002 to $300 billion in 2011-12, with current exchange rates around Rs 86 per US dollar. Panagariya also emphasized that allowing the rupee to find its natural value helps balance inflation and enhances export competitiveness, while cautioning against a hands-off approach, especially due to large remittances and capital inflows.

⁠India sees no disruptions to Russian oil supply (Financial Chronicle)

India does not anticipate any immediate disruption in Russian oil supply, as US-sanctioned tankers are permitted to discharge shipments of oil booked before January 10, with Russia expected to find alternative routes for delivery. While new US sanctions aim to reduce Russian oil exports to major customers like India and China, the global Brent crude price rose above $81 per barrel, driven by concerns over potential supply disruptions. However, sources believe Russia may offer deeper discounts to India to meet the $60 per barrel price cap, and the price is expected to ease below $80 as supply remains sufficient.