Category: Economy

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. 

Abu Dhabi, the capital of the United Arab Emirates (UAE), announced new measures on Wednesday to simplify business processes as part of its economic diversification strategy away from oil.

The emirate, which holds over 90% of the UAE’s oil reserves, introduced the Abu Dhabi Registration Authority (ADRA). This centralized body will serve as the sole platform for business registration, according to an official statement.

Like other oil-exporting regions, Abu Dhabi is accelerating its shift toward sectors such as tourism, logistics, manufacturing, and industry to achieve sustainable economic growth. This shift aligns with global efforts to reduce reliance on fossil fuels.

The ADRA will operate under Abu Dhabi’s Department of Economic Development (ADDED), which plays a key role in streamlining government strategy. ADDED aims to attract foreign investment, encourage local businesses, and ensure economic compliance with UAE and international regulations.

“We want to make business easier and simpler,” said Ahmed Jasim Al Zaabi, chairman of ADDED, during the opening session of Abu Dhabi Business Week. He emphasized that centralizing business registration would enhance regulatory compliance.

Abu Dhabi’s economy grew by 4.1% in the second quarter of 2024, based on preliminary government data.

The government has removed the windfall tax on domestically produced crude oil and exports of petrol, diesel, and aviation turbine fuel, addressing industry demands after falling international oil prices significantly reduced export values. The Department of Revenue announced the decision on Monday, rescinding the June 2022 notifications that imposed the tax, with immediate effect.

“The industry had been urging the government to withdraw the tax, arguing it was no longer justified given the prolonged period of subdued international oil prices,” an official said anonymously.

The windfall tax, introduced in July 2022, aimed to curb private refiners from cutting domestic fuel supplies to profit from surging overseas demand during a time when Brent crude prices were around $110-120 per barrel. However, since August 2024, Brent crude has remained below $80 per barrel, currently around $72.

Latest trade data shows the impact of declining global oil prices, with India’s per-unit petroleum export value dropping to $312.50 per tonne in the first half of 2024-25, compared to $792 per tonne in the same period last year, despite higher export volumes.

Saudi Arabia, the world’s top oil exporter, is likely to cut crude prices for Asian buyers in January to their lowest levels in years, according to traders. The January official selling price (OSP) for Arab Light could drop by 70 to 90 cents per barrel from December, marking at least a four-year low, a Reuters survey of six Asian refinery sources revealed.

“The weaker Middle East benchmark prices in November are driving the cuts,” said traders. Despite TotalEnergies purchasing 15.5 million barrels of crude in the S&P Global Platts window, the gap between front and third-month Dubai prices narrowed by 86 cents last month, reducing the backwardation spread. (Backwardation is when near-term prices exceed future prices.)

Spot premiums for January-loading Middle East grades also halved from the previous month due to weak demand. Similarly, Arab Extra Light’s OSP is expected to follow Arab Light’s drop, while heavier grades like Arab Medium and Arab Heavy may see steeper price reductions as fuel oil margins continue to decline.

“Chinese refining margins remain poor, and we’re hoping for larger price cuts for heavy grades,” one respondent added.

Traders also noted that the upcoming OPEC+ meeting on December 5 could influence supply in early 2025 and potentially impact Saudi Aramco’s pricing decisions. Many expect the state oil giant to announce January prices only after the meeting.

The Indian government is ramping up efforts to achieve its 6.5%-7% economic growth target for this fiscal year, despite slower-than-expected growth from July to September. Economic Affairs Secretary Ajay Seth expressed confidence that growth would pick up in the second half of the year.

“Investor-friendly policies are in place, and tax rules have been simplified to attract more investments,” Junior Finance Minister Pankaj Chaudhary told lawmakers on Monday. The government is also focusing on boosting domestic manufacturing with increased incentives for electric vehicle makers and plans to raise the FDI limit in the insurance sector to 100%.

Prime Minister Narendra Modi, fresh from electoral victories in Maharashtra and Haryana, is expected to accelerate infrastructure spending as part of the $576 billion budget unveiled in July. Analysts believe this spending surge, alongside other measures, will provide a significant push to growth in the coming months.

“Government expenditure over the past few weeks will likely drive growth in the December quarter,” said economist Pranjul Bhand. The Reserve Bank of India may also face added pressure to adjust interest rates to support economic recovery.

India has exported organic food products worth nearly $450 million as of November 25 in the current fiscal year, according to government data. The exports totaled 2,63,050 tonnes, valued at $447.73 million, a statement revealed on Monday.

Union Minister of State for Food Processing Industries, Navneet Singh Bittu, shared details in a written reply to the Lok Sabha, outlining organic export trends over the past five years.

In 2019-20, India exported 6,38,998 tonnes of organic products worth $689.10 million. The following year, exports rose to 8,88,179.68 tonnes, earning $1,040.95 million. Exports then tapered off, recording 4,60,320.40 tonnes for $771.96 million in 2021-22, 3,12,800.51 tonnes for $708.33 million in 2022-23, and 2,61,029 tonnes for $494.80 million in 2023-24.

Bittu highlighted the role of the Agricultural & Processed Food Products Export Development Authority (APEDA) in implementing the National Programme for Organic Production (NPOP).

“NPOP oversees certification, organic farming standards, and marketing. It certifies operators for production, processing, and trading,” he stated. Currently, India has 1,016 organic-certified processing units under the program.

Saudi Arabia increased research and development (R&D) spending to $6.02 billion in 2023. This marks a 17.4% rise from 2022. Official data revealed the growth in R&D human resources as well. The workforce reached 49,337 by the end of 2023, up by 12.2%. The number of researchers increased to 36,832, showing a 22.1% annual rise.

Vision 2030 prioritizes R&D in energy, technology, and sustainability.

These efforts aim to reduce oil dependence and diversify the economy. R&D employees in higher education grew significantly, reaching 37,540 in 2023. This reflects a growing focus on education and research investment.

In August 2023, Saudi Aramco announced a $100 million investment over the next decade. The funding supports research at King Abdullah University of Science and Technology (KAUST). This partnership focuses on energy transition, sustainability, and digital technologies.

Negotiators at the COP29 climate conference in Baku reached a historic agreement on global carbon credit trading rules, ending nearly a decade of debate over the system.

The deal establishes a framework allowing countries and companies to buy carbon credits for reducing or removing greenhouse gas emissions elsewhere and count these reductions toward their own climate goals.

Supporters believe the agreement brings much-needed clarity for nations and businesses aiming for net-zero targets. They argue it could channel billions of dollars into environmental projects.

However, critics highlight flaws in the rules, unresolved after years of discussion. They warn the system might allow countries and companies to continue polluting while claiming offsets.

On Tuesday, Britain received an order for a 30-year inflation-linked government bond for 65.99 billion pounds. On this, the United Kingdom Debt Management Office says, “a record level of demand as higher government borrowing costs drew investors in.” The DMO further elaborates that it would be an issue worth 4.25 billion pounds of the 1.25% November 2054 index-linked gilt. This makes the total amount in issue rise to 12.75 billion pounds.

The syndication received a strong order book, slightly exceeding the £64 billion recorded when the bond was last sold via syndication in July. This marked a record for an index-linked gilt.

On Tuesday, the syndication sold the 1.25% index-linked 2054 gilt, yielding four basis points higher than the November 2055 index-linked gilt. This sale represented a price at the top end of the initial guidance, as is typical for gilt syndications. This meant a real yield of 1.5692%, higher than the 1.4236% seen in July’s sale. It was the highest inflation-adjusted borrowing cost for British government bonds since these sales began in 2005.

On Tuesday, Saudi Arabia agreed to sign nine investment deals in metals and mining worth more than 35 million riyals, which is equivalent to $9.32 billion. The companies included in the deal include India Vedanta and China’s Zijin Group.

The deal’s announcement was helped during the World Investment Conference by the Global Supply Chain Resilience Initiative, a government program under the Saudi government’s National Investment Strategy in Riyadh.

The mining industry in the Kingdom is part of the 2030 vision plan to diversify the economy and cut down on fossil fuel reliance. With this, the government is seeking to attract a $100 billion foreign investment in a year under the 2030 plan.

A conference presentation showed that oil-to-metals conglomerate Vedanta will build copper facilities with a 7.5 billion riyals capital expenditure, including a smelter and refinery with 400,000 metric tons per annum (tpa) capacity and a 300,000 tpa copper rod plant.

The same presentation also predicted that the project would bring domestic self-sufficiency in copper production, contributing 70 billion riyals in economic growth.