Category: Economy

India’s Product-Linked Incentive (PLI) schemes, launched in 2020, are transforming the manufacturing and export landscape. With a budget of Rs 1.97 lakh crore (USD 26 billion), the initiative boosts domestic production, exports, and job creation across 14 sectors.

Investment and Employment Growth

The Ministry of Commerce and Industry reports that PLI schemes have attracted investments worth Rs 1.46 lakh crore (USD 17.5 billion). Production under the initiative has reached Rs 12.5 lakh crore (USD 150 billion), while exports total Rs 4 lakh crore (USD 48 billion). Additionally, the program has generated 9.5 lakh direct and indirect jobs nationwide.

Key Sectors Leading the Charge

PLI benefits extend to key sectors, including Mobile Manufacturing, Pharmaceuticals, Automobiles, Telecom, Specialty Steel, and Advanced Chemistry Cell (ACC) Batteries. Over 1,300 manufacturing units have been established across 27 states and union territories, creating a diverse industrial base.

MSME Sector Boost

The scheme has significantly impacted the MSME sector by driving demand for ancillary units through anchor manufacturing facilities. This ripple effect has strengthened value chains and accelerated MSME growth.

White Goods Sector Success

The PLI scheme’s influence on the white goods sector highlights its effectiveness, fostering innovation and improving competitiveness across industries.

Prime Minister Narendra Modi participated in the ‘Ek Varsh-Parinaam Utkarsh’ event, marking one year of Rajasthan’s state government.

Addressing the gathering, he congratulated the Rajasthan government and its people on completing a successful year. He praised Chief Minister Bhajanlal Sharma and his team for driving development in the state.

PM Modi highlighted the positive impact of these development efforts. He stated that the initiatives will attract investors, create jobs, boost tourism, and benefit farmers, women, and youth in Rajasthan.

He emphasized the government’s support for solar power installations on rooftops and in agricultural fields. Under the PM KUSUM scheme, Rajasthan plans to set up hundreds of new solar plants. He said that when families and farmers become energy producers, their household income will increase.

The Prime Minister also highlighted the long-term benefits of Rajasthan’s modern infrastructure projects. He noted that these efforts would benefit both current and future generations, contributing to a stronger Rajasthan and a more developed India.

Japan aims for renewable energy to supply 50% of its electricity mix by fiscal 2040. Nuclear power will cover an additional 20%, according to a draft of the revised basic energy policy.

This shift is part of Japan’s push for clean energy while meeting rising power demand. As the world’s second-largest importer of liquefied natural gas (LNG) and a major buyer of Middle Eastern oil, Japan’s energy plans are closely watched by global oil, gas, and coal producers.

Thermal power use, especially from inefficient coal-fired plants, will drop from 68.6% in 2023 to 30-40% by 2040. The draft does not detail the share of coal, gas, and oil within this percentage.

“LNG-fired power is a realistic transition tool,” the draft states. It calls for joint efforts from the government and private sector to secure long-term LNG contracts to guard against price hikes and supply disruptions.

The industry ministry’s draft proposes raising renewables to 40-50% of power supplies by fiscal 2040. This target nearly doubles the 22.9% share in fiscal 2023 and surpasses the 36-38% goal set for 2030.

Argentina’s economy saw a near 4% boost in the third quarter of 2024, marking the end of its recession. This growth outperformed analysts’ expectations, signaling a shift in economic momentum.

Despite the quarterly growth, overall activity remains below 2023 levels. Argentina’s GDP in the third quarter was 2.1% lower than the same period last year. However, this result is an improvement compared to earlier quarters, which recorded declines of 5.2% in Q1 and 3.4% in Q2.

The INDEC national statistics bureau published fresh data on Monday, confirming the positive shift. Between July and September, GDP grew by 1.6%, marking the first quarterly increase in over a year.

This growth is particularly notable as it’s the first time Argentina’s GDP has risen since President Javier Milei took office last December. After three consecutive quarters of decline, this turnaround offers a glimmer of hope for the country’s economic outlook. Analysts had forecasted more modest growth, but Argentina’s economy has exceeded those predictions. The shift in GDP trends indicates potential stability and recovery, though the nation’s economic activity still has ground to cover to reach 2023 levels. The next quarters will be crucial in assessing sustained progress.

India’s private sector output grew at its fastest pace in four months, driven by stronger demand in services and manufacturing. Preliminary survey data showed record job growth, helping the economy close 2024 on a high note.  

The HSBC December flash India Composite Purchasing Managers’ Index (PMI), compiled by S&P Global, rose to 60.7, matching August’s figure. This marked an increase from November’s 58.6. The PMI has stayed above 60 for most of the year, a level of strength not seen since 2008. The 50-point mark separates growth from contraction.  

Economist Ines Lam from HSBC attributed December’s manufacturing PMI rise to gains in production, new orders, and employment. “The quickening expansion in new domestic orders points to stronger growth momentum,” Lam said.  

Demand growth was most notable in the services sector, where the PMI climbed to 60.8 from November’s 58.4, hitting a four-month high. The manufacturing PMI also rose to 57.4 from 56.5 last month. Service providers saw a surge in sales, with the new business sub-index reaching its highest level since January.  

International demand for both goods and services also increased, with goods experiencing a faster rise than services. While India’s economy grew at a slower 5.4% last quarter, easing inflation is expected to support stronger private sector demand in 2025.

Indonesia reported a $4.42 billion trade surplus in November, double analysts’ forecasts of $2.21 billion. The rise came as exports surged and imports fell below market expectations, according to official data released on Monday.  

The November surplus marked the largest since March. It followed a slightly revised October surplus of $2.48 billion. Analysts believe this trade data will be a key factor in the central bank’s upcoming monetary policy review on Wednesday, where no change to key rates is expected.  

Exports grew 9.14% year-on-year to $24.01 billion, far exceeding the expected 4.92% rise. The growth was driven by higher shipments of agricultural and manufactured products, like cocoa butter and powder. However, shipments of top commodities like coal dropped 4.4%, while palm oil shipments increased only 2.2%.  

Imports remained flat at $19.59 billion, defying forecasts of a 6.15% rise. Key imports, including machinery, electronics, and steel, all recorded declines. Following the trade data, Indonesia’s rupiah strengthened slightly but stayed near four-month lows against the U.S. dollar.

Britain announced a major overhaul of its planning system to boost growth and build 1.5 million homes in five years. Prime Minister Keir Starmer called the current planning system a “chokehold” on growth and pledged bold reforms.

“The housing crisis means the dream of homeownership feels distant for many,” Starmer said. “Our plan puts builders, not blockers, first. We’ll fix the broken system, provide homes for working families, and drive growth.”

The new plan requires local authorities to set housebuilding timetables within 12 weeks or face government intervention. It also introduces mandatory housing targets, prioritizing areas with the least affordable housing.

The Local Government Association welcomed reforms but stressed the need to address workforce shortages, construction costs, and local councils’ financial health. “Faster planning decisions alone won’t guarantee more houses,” it stated.

The move aims to simplify approvals, fast-track developments, and increase home availability, supporting the broader goal of economic growth and affordable housing for all.

Prime Minister Narendra Modi will visit Prayagraj on December 13 for a three-hour tour, The Indian Express reported. During his visit, he will inaugurate and lay the foundation for projects worth ₹7,000 crore. He will also perform a puja at the Sangam.

PM Modi is set to arrive around 11 am and will travel from Arail Ghat to Quila Ghat on a hybrid electric catamaran named after Nishadraj, which he previously launched in Varanasi.

Most of the projects are linked to road and corridor development, with a key highlight being the Shringverpur Dham corridor. Known as the “Kingdom of Nishadraj” in the Ramayana, the corridor aims to make pilgrim visits to Shringverpur easier.

Modi will also inaugurate projects related to railways, airports, irrigation, road development, and the beautification of ghats. Additionally, he will launch the “Kumbh Sahayak Chatbot” to support pilgrims.

The visit emphasizes infrastructure development and better connectivity, with a strong focus on boosting tourism and pilgrimage experiences in the region.

The Indian government will require clean energy firms to use locally made solar cells in government projects from June 2026. The Renewable Energy Ministry announced that only solar cells from an approved list of companies will be allowed. This move aims to reduce reliance on Chinese imports.

India already mandates the use of locally made photovoltaic (PV) modules for government projects. The new rule now extends to solar cells as well.

The government aims to boost non-fossil fuel capacity to 500 gigawatts (GW) by 2030, up from the current 156 GW. India’s current PV module-making capacity is around 80 GW, but its solar cell-making capacity is just over 7 GW. Currently, companies rely heavily on Chinese solar cells to manufacture PV modules.

The Renewable Energy Ministry stated that a list of approved cell manufacturers will be released soon. This comes as India’s cell-making capacity is expected to increase significantly next year.Industry Experts on the Impact
Vikram V, Vice President of Corporate Ratings at ICRA, said, “Modules using locally made cells may be costlier than imported ones. Scaling up production and improving cost-efficiency will be crucial for India’s solar cell market.”

The 7th CICA Business Council Plenary Session and the 9th CICA Business Forum took place in Astana this November, bringing together representatives from India and other Asian nations. The event focused on strengthening regional economic ties and enhancing cooperation between businesses and governments.

With participation from nearly 100 companies across Asia, the forum resulted in key agreements aimed at fostering growth and development. Major areas of focus included training programs, joint investment initiatives, and new formats for business-government interaction. These initiatives are expected to streamline collaboration and boost trade among CICA member states.

One of the most notable highlights was the report on Kazakhstan’s trade with CICA members, which reached an impressive $82 billion in 2023. The figure reflects the growing role of CICA in promoting cross-border trade and investment. As an active participant, India remains a key player in strengthening these ties, contributing to increased trade volumes and investment opportunities.

The successful conclusion of the plenary and forum highlights CICA’s growing influence as a platform for economic cooperation in Asia. By encouraging member states to collaborate on training, investment, and policy alignment, the forum aims to create a more integrated and prosperous Asian economy.