India’s GDP is projected to grow at 6.2 per cent in FY26, with CPI inflation around an average 4.0 per cent, a report showed on Friday, adding that it does not expect any further rate cuts from the RBI “unless downside risks to growth materialise”.

The Current Account Deficit or CAD (as per cent of GDP) is projected at 1.0 per cent in FY25 and 0.9 per cent in FY26, while the fiscal deficit is estimated at 4.4 per cent, according to a CareEdge Ratings report.

“The 10-year G-Sec yield is expected to range between 6.0 per cent–6.2 per cent by the end of FY26, and the USD-INR exchange rate is projected to trade between 85 and 87 by the end of FY26,” the report mentioned.

In the recent MPC, RBI signalled prioritising growth amid easing inflation concerns. In a significant liquidity measure, the RBI also announced a phased 100 bps CRR cut starting September, which is expected to inject approximately Rs 2.5 lakh crore of durable liquidity into the system by December 2025.

For FY26, the RBI retained its GDP growth forecast at 6.5 per cent, while lowering the CPI inflation projection to 3.7 per cent from 4.0 per cent. Meanwhile, crude oil prices surged sharply in June amid heightened Middle East tensions, touching around $79 per barrel — the highest since January 2025 — before easing by 14 per cent as tensions subsided.

CareEdge Ratings expects Brent to average $65–70 per barrel in FY26, assuming no further escalation in tensions. These levels do not warrant changes to their FY26 forecasts for India’s growth, inflation, fiscal deficit, CAD or the rupee.

“Nonetheless, the conflict in the Middle East remains a key monitorable, especially as the Strait of Hormuz accounts for over a quarter of global seaborne oil trade,” said the report.

India’s diversified crude oil import basket also provides some buffer. Based on quantity imported, Iran’s share in India’s POL (petroleum, oil and lubricants) imports fell to just 0.1 per cent in FY25 (from 5.2 per cent in FY15).

While the Middle East remains a major supplier, its share has declined to 50 per cent from 60 per cent over the past decade. In contrast, imports from other countries like Russia surged to 28.5 per cent in FY25 from just 0.2 per cent in FY15.

—IANS

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India is likely to see a GDP growth of 6.5 per cent in current fiscal (FY26) due to robust domestic demand, a normal monsoon and monetary easing, a report by S&P Global Ratings said on Tuesday.

Domestic demand resilience is particularly relevant in limiting the economic slowdown in economies less exposed to goods exports such as India. “We see India’s GDP growth holding up at 6.5 per cent in fiscal 2026 (year ending March 31, 2026). That forecast assumes a normal monsoon, lower crude oil prices, income-tax concessions and monetary easing,” said the report covering Asia-Pacific economies.

In India, falling food inflation also helps contain headline inflation. The country’s annual rate of inflation based on the Wholesale Price Index (WPI) eased further to a 14-month low of 0.39 per cent in May from 0.85 per cent in April and 2.05 per cent in March.

Meanwhile, the country’s inflation rate based on the Consumer Price Index (CPI) has declined to 2.82 per cent in May this year compared to the same month of the previous year. This is the lowest level of retail inflation since February 2019, figures released last week showed.

Food Inflation declined to 0.99 per cent during May, which is the lowest since October 2021. This is the seventh month in a row that food inflation has registered a decline as the agricultural output has been on the rise. The RBI has also revised its inflation outlook for 2025-26 downwards from the earlier forecast of 4 per cent to 3.7 per cent, Reserve Bank Governor Sanjay Malhotra said on Friday.

The sharp decline in inflation has enabled the RBI to go in for a 50 basis points cut in the repo rate from 6 per cent to 5.5 per cent to spur growth in the economy, in the monetary policy review.

According to S&P Global Ratings, many regional economies had a good start to 2025 on robust domestic demand. Several got a temporary fillip from a front-loading of exports to the U.S. ahead of anticipated tariffs. In India, growth picked up after a soft patch. The report now expects 4.3 per cent GDP growth in China in 2025 and 4.0 per cent in 2026.

“While this is significantly lower than the government’s target for this year, it would be a solid result given the external strains. Chinese imports will be subdued this year and next, but not as weak as exports,” it mentioned. Asia-Pacific economies face sizable external pressure, notably from uncertain US tariff policy and soft imports in China.

“We expect domestic demand to broadly remain healthy, in part because of policy easing. But what this means for the resilience of regional economies varies sharply, with export-dependent ones less well placed,” the report mentioned.

–IANS

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The government is poised to surpass its revised capital expenditure (capex) target of Rs 10.18 lakh crore for FY25 by a modest margin. According to an NDTV Profit report on Sunday, citing a top official, “The data received so far indicates that we are likely to exceed the revised target by a significant margin in absolute terms”. The capex target was lowered to Rs 10.18 lakh crore (revised estimates) in the Union Budget 2025-26, from Rs 11.1 lakh crore.

For current fiscal (FY26), a capex allocation of Rs 11.21 lakh crore has been set by the government. According to Union Finance Minister Nirmala Sitharaman, the Indian economy will continue to be the world’s fastest-growing economy backed by the increase in the government’s capital expenditure in the Budget for 2025-26 and rising consumption levels, especially in the rural areas. The effective capital expenditure works out to 4.3 per cent of the GDP in the Budget for 2025-26 while the fiscal deficit is 4.4 per cent. “This indicates that the government is using the entire borrowed resources for financing effective capital expenditure, creating capital assets,” she pointed out.

The Indian economy is expected to clock 6.5 per cent growth in 2025-26, driven by government investment in big infrastructure projects, and an acceleration in private investment during the year, according to the latest EY Economy Watch report. A Jefferies report said last month that there has been a significant increase in capital expenditure in India, with growth expected to continue in the coming months as several sectors witnessing strong investments.

The government’s focus on railways and road projects has helped achieve significant progress, with around 83-87 per cent of the financial year 2025 revised estimates already completed for these sectors. The government’s commitment to capital expenditure remains strong, with transfers to states rising by approximately 60 per cent.

This financial support is expected to further accelerate infrastructure projects at the state level, boosting overall economic growth. The capital outlay of the country’s top 15 states for FY26 is projected to rebound by 18 per cent (year-on-year) to Rs 7.2 lakh crore, driven by a post-election boost in capital spending, execution of infrastructure projects and continued allocation of Rs 1.50 lakh crore to states through interest-free capex loans in the Union Budget 2025-26, according to a CareEdge Ratings report.

—IANS

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New Delhi, Jan 20 (IANS): India’s coffee exports have almost doubled in the last four years, reaching $1.29 billion in FY 2023-24 from $719.42 million in 2020-21, making the country the seventh-largest coffee producer globally, according to a statement released by the Commerce and Industry Ministry on Monday.

In the first half of January 2025, India exported over 9,300 tonnes of coffee with top buyers including Italy, Belgium, and Russia. The country’s coffee exports have grown significantly due to the increasing global demand for its rich and unique flavours.

Approximately three-fourths of India’s coffee production consists of Arabica and Robusta beans, which are primarily exported unroasted. However, there is a growing demand for value-added products like roasted and instant coffee, further fuelling the export boom.

Due to the rise of the cafe culture, higher disposable incomes and a growing preference for coffee over tea, coffee consumption in India is also steadily increasing.

This trend has been observed mainly in both urban and rural areas.

Domestic consumption has increased from 84,000 tonnes in 2012 to 91,000 tonnes in 2023, the statement said. This surge reflects a broader shift in drinking habits, as coffee becomes a staple in daily life.

India’s coffee is primarily grown in the ecologically rich Western and Eastern Ghats, areas famous for their biodiversity. Karnataka leads in production, contributing 248,020 MT in 2022-23, followed by Kerala and Tamil Nadu.

These areas are home to shaded plantations that not only support the coffee industry but also play a vital role in preserving the natural environment, helping to maintain the ecological balance of these biodiversity hotspots.

The Coffee Board of India has launched several important initiatives to enhance coffee production and meet growing domestic and international demand.

Through the Integrated Coffee Development Project (ICDP) the focus is on improving yields, expanding cultivation in non-traditional regions and ensuring the sustainability of coffee farming.

The statement said these measures are part of a comprehensive strategy to strengthen India’s coffee industry, increase productivity, and improve its global competitiveness.

A prime example of this success is Araku Valley, where nearly 150,000 tribal families, in collaboration with the Coffee Board and the Integrated Tribal Development Agency (ITDA), have increased coffee production by 20 percent.

This achievement is backed by Girijan Co-Operative Corporation (GCC) loans. It shows how coffee farming empowers communities and supports the vision of Aatmanirbhar Bharat.

These initiatives, combined with export incentives and logistical support, are crucial in expanding India’s coffee industry. They help improve both domestic production and global competitiveness, firmly establishing India as a leading player in the global coffee market.

Interestingly, India’s journey with coffee began centuries ago, when the legendary holy saint Baba Budan brought seven Mocha seeds to the hills of Karnataka in the 1600s.

His simple act of planting these seeds in the courtyard of his hermitage in Baba Budan Giri unknowingly set in motion the rise of India as one of the world’s prominent coffee producers.

Over the centuries, coffee cultivation in India has evolved from a humble practice to a thriving industry, and the country’s coffee is now widely loved worldwide.

–IANS

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The Indian economy is projected to grow at a robust 6.8 per cent in the financial year 2025-26, driven by strong high-frequency indicators, according to a Bank of Baroda forecast.

The report expects nominal GDP growth to be around 10.5 per cent during the next financial year. It highlights that key indicators of this growth include robust air passenger traffic, a rise in services PMI, and increased GST collections.

Additionally, higher rabi crop sowing is expected to boost agricultural growth, providing a stable foundation for the economy. The report highlighted that the Indian economy has shown resilience, driven by strong festive demand and steady improvement in economic activity.

This resilience is reflected in high-frequency indicators that have shown a significant uptick in the third quarter of FY25. The report states that while there has been a slowdown in 2024-25, on the bright side both private and government consumption is expected to register a strong growth of 7.3 per cent (4 per cent in FY24) and 4.1 per cent (2.5 per cent in FY24) respectively in FY25.

Furthermore, in a positive surprise, the export growth is likely to register a strong growth of 5.9 per cent against a growth of 2.6 per cent in FY24. It also highlights that government expenditure is expected to pick momentum in the second half of 2024-25 which will emerge as a driver of growth. Besides, the report is bullish about the higher growth in the agricultural sector.

However, the report cautions about downside risks due to global headwinds. Among these, the threat of a tariff war looms large as the incoming US administration under President Trump may impose protectionist trade policies. Such measures could disrupt global trade and potentially trigger retaliatory actions, posing risks to global economic stability.

It said, “A range of economic and strategic risk prevails post the imposition of the tariff policies by the incoming US President Mr Trump. This could be a far-reaching impact on global trade”. Domestically, the focus will shift to key economic events, including the Union Budget, corporate performance in the third and fourth quarters, and the Reserve Bank of India’s monetary policy decisions, the report added.

–IANS

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India’s job market continues to boom, with a massive 4.67 crore jobs added in the last fiscal year and robust growth evident in the formal and informal sectors in the current financial year 2024-25. This strong employment generation is reflected in double-digit growth in the unincorporated sector and significant enrollment increases across key social security schemes like EPF and ESIC.

While a massive 4.67 crore additional jobs were created in the Indian economy in the financial year ended March 2024, the fast pace of employment generation has continued into 2024-25 in both the formal and informal sectors, official data shows.

The total estimated employment in India’s Unincorporated Sector recorded a double-digit growth of 10.01 per cent during October 2023–September 2024, compared to the same period of the previous year, according to the annual survey of the Ministry of Statistics released on Thursday.

The Annual Survey of Unincorporated Sector Enterprises (ASUSE) shows that among the broad sectors covered, the number of establishments in the “Other Services” employed more than 12 crore additional workers between October 2023 and September 2024, marking an increase of more than one crore workers from 2022-23 and reflecting robust labour market growth.

Among the broad activities, the “Other Services” sector showed the highest annual growth of 17.86 per cent, followed by 10.03 per cent in the manufacturing sector. The unincorporated non-agricultural sector plays an important role in the Indian economy contributing significantly to employment, Gross Domestic Product, and the overall socio-economic landscape.

This sector sustains millions of livelihoods and acts as a backbone for the incorporated sector by supplying goods and services, reinforcing its role in the domestic value chain. Similarly, India’s employment in the formal sector, which offers better quality jobs, has kept up its growth momentum during the first half of the current financial year with an increase in new additions across the three social security schemes compared to the same period last year, according to official figures released in November.

New enrolments to the Employees’ Provident Fund scheme, which applies to larger organisations and better-paid employees, increased by 2.3 per cent to 6.1 million in the first half of 2024-25 (April-September), compared to the same period of the previous year. New subscriptions to Employees’ State Insurance Corporation, which applies to smaller organisations, grew faster at 5.2 per cent with 9.3 million additions during the first half of the current financial year.

Similarly, subscriptions to the National Pension System were 6.8 percent higher, reflecting the rising number of employees entering better job streams. The Finance Ministry’s latest monthly economic review also observed this improvement in job quality.

–IANS

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As 2025 begins with heightened global uncertainties ahead of US President-elect Donald Trump’s inauguration, India continues to be in a much stronger position economically as high-frequency indicators showed a pick-up in the pace of growth in the third quarter of the current fiscal year (Q3 FY25).

GST collections, services purchasing managers’ index (PMI), air passenger growth, and vehicle registrations saw a notable improvement in Q3 versus Q2, according to a Bank of Baroda (BoB) report. On the other hand, while the manufacturing sector is expanding slowly in China, lifting domestic consumption and reviving the real estate sector is proving to be a task for the administration.

The US economy is giving mixed signals regarding growth. While the labour market appears to be softening and manufacturing activity is weak, retail sales, pending home sales, and the service sector seem to be doing well. In Europe, manufacturing activity cannot pick up pace so far, while the service sector is regaining ground.

In India, the current account deficit (CAD) narrowed to 1.2 percent of GDP in Q2 FY25 from 1.3 percent of GDP in Q2 FY24. “While the trade deficit was higher, buoyant services exports and continued strength in remittances underscored the lower CAD. Our year-end market analysis shows that both Sensex and Nifty 50 surged by 8.7 percent and 9 percent in CY24, respectively.

Sensex touched an all-time high this year as it breached the mark of 85,500,” said Sonal Badhan, economist, Bank of Baroda. Sectors including real estate, consumer durables, and IT were amongst the best-performing stocks in CY24.

The Indian rupee depreciated by 2.8 per cent in 2024, but remained one of the better-performing currencies among its peers. The pressure on yields was lower and boosted demand flow as the market witnessed the bond inclusion in the JP Morgan emerging market index, Bloomberg, and FTSE Russel.

According to the report, high frequency indicators have shown notable improvement in the October-December 2024 period. GST collections have jumped by 8.3 per cent (YoY) in Q3 to Rs 5.5 lakh crore, and are also up from Rs 5.3 lakh crore in Q2, signalling further improvement in consumption pattern. Apart from this, helped by festive demand, other indicators of urban consumption have also improved.

Air passenger air traffic registered 11.6 per cent growth in Q3, compared with 7.8 per cent growth registered in Q2. Services PMI averaged 59.2 in Q3 versus 58.1 in the same period last year.

“We expect quarterly corporate results to also show improved performance in Q3,” said Badhan.

On the central bank actions, the report said growth is expected to recover in H2 FY25 and inflation abating, “we see a scope of 25 bps rate cut in February 2025. We expect a cumulative easing of 50-75bps in the current cycle” Furthermore, with the expectation of a pick-up in government spending followed by improvement in both government and private investment in H2, the IIP growth will perform a lot better in H2 FY25 from H1 FY25, it noted.

–IANS

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The year 2024 has been historic for the Indian stock market as companies have raised a record capital of over ₹3 lakh crore so far this year through Initial Public Offerings (IPOs), Qualified Institutional Placements (QIPs), and Rights Issues, breaking the previous record of raising capital – ₹1.88 lakh crore in 2021.

According to reports, 90 companies have raised or announced fundraising of ₹1.62 lakh crore so far this year, which is 2.2 times more than last year’s ₹49,436 crore.

The amount raised through new issues in 2024 is around ₹70,000 crore, compared to ₹43,300 crore in 2021. So far in 2024, 88 companies have raised ₹1.3 lakh crore through QIPs.

Earlier, 25 companies raised the highest amount ₹80,816 crore, through QIPs in 2020. So far, 20 companies have raised about ₹18,000 crore through rights issues.

Last year, this figure was ₹7,266 crore and in 2022 it was ₹3,884 crore. This figure is also expected to increase in the last two weeks of 2024, as this week, IPOs of companies like DAM Capital Advisors, Ventive Hospitality, Carraro India, Senores Pharmaceuticals, Transrail Lighting, Concord Enviro Systems, Sanathan Textiles, and Mamta Machinery are open.

Experts say that the reason for the large amount of funds raised by the companies is the high economic growth rate, due to which companies are making more capital expenditures for expansion. It also shows the increasing confidence of the investors in the equity market.

The growth rate of the Indian economy was 8.2 per cent in the financial year (FY) 2023-24. According to the Reserve Bank of India, the growth rate is estimated to be 6.6 per cent in the current financial year (FY 2024-25).

–IANS

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An estimated $2.2 trillion investment in infrastructure development is imperative to support India’s GDP expansion to $7 trillion by 2030.

According to a report by Knight Frank India, India’s economy must grow at a CAGR of 10.1 per cent between 2024 and 2030 to achieve a size of $7 trillion.

The investment opportunity for private participation in infrastructure development in India ranges between $103.2 billion to $324 billion.

“India stands at the cusp of a transformative era in infrastructure development. By harnessing the power of private investment, we can accelerate our journey towards achieving our ambitious economic growth targets,” said Rajeev Vijay, Executive Director-Government and Infrastructure Advisory, Knight Frank India.

The central government aims to reduce its gross fiscal deficit to below 4.5 per cent by 2025, and increasing private sector participation in infrastructure development would help balance fiscal deficit targets.

At an existing investment share composition of Centre (51.2 per cent), state (44.1 per cent), and private (4.7 per cent), the estimated gross fiscal deficit in 2030 will be 4.7 per cent, which is above the government’s defined fiscal deficit threshold.

In this scenario, the private participation in infrastructure development in India amounts to $103.2 bn until 2030. However, this composition’s share of private investment is negligible and needs to expand.

However, a 10 per cent increase in private investments in infrastructure to 14.7 per cent brings the potential opportunity amount to $324 billion, an annual average of $54 billion until 2030.

This will potentially support the government in maintaining healthy fiscal balances.

The report said that by increasing private participation in infrastructure development, the government could redirect expenditures towards other key segments of economic growth, such as public healthcare, strengthening human capital, debt payments, etc., which will support the long-term growth of the economy.

On a sector-wise analysis, renewable energy, data centres, roads and highways, warehousing and logistics have significant potential to attract private investments.

The report mentioned that sectors such as urban mass transit, airports, power distribution, etc., hold massive investment opportunities supported by rapid urbanisation and shifting demographics.

“For India to achieve its ambitious economic growth targets, massive infrastructure investments are necessary,” the report added.

—IANS

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Reserve Bank of India (RBI) Governor Shaktikanta Das has said that the Indian economy is strong enough to handle any adverse fallout from global events. “Today, the growth of the Indian economy presents a picture of stability and strength,” Das said while addressing an event at the launch of the Kochi International Foundation here.

The country’s external sector is also strong, and the current account deficit (CAD) has remained within manageable limits, standing at 1.1 percent of GDP. Earlier, in 2010 and 2011, it was in the range of six to seven per cent, he added. The central bank chief also pointed out that India has one of the largest foreign exchange reserves in the world at about $675 billion. He further stated that the country’s inflation was expected to be moderate despite periodic humps. India’s inflation rose to 6.2 per cent in October from 5.5 per cent in September because of food inflation, he said. Referring to inflation as an elephant in the room, Das remarked: “Now the elephant has gone out of the room for a walk, then it will go back to the forest.”

He also pointed out that when the Ukraine war started, inflation went up but the RBI followed the right monetary policy, unlike some other countries, and succeeded in keeping the price spiral in check. “What we did not do in India is also important. RBI did not print notes because if we start printing notes the problems we are trying to resolve will expand and go beyond handling. In many countries the inflation was deep-rooted but ours is moderating,” he added.

“We kept our interest rate 4 per cent, therefore making our recovery much easier,” he pointed out. Das also highlighted how the RBI is bringing about a transformational change in credit delivery, especially to small entrepreneurs and farmers, through the Unified Payments Interface (UPI) and the Unified Lending Interface (ULI) launched recently.

–IANS

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