Category: Economy

Sri Lanka’s President Ranil Wickremesinghe has sought India’s help in establishing policy reforms, governance, capacity building, digitalization, and public service delivery, an official statement issued by India’s Ministry of Personnel, Public Grievances and Pensions said.

The Indian delegation led by the Director General of the National Centre for Good Governance (NCGG), Bharat Lal met Sri Lanka’s President on April 1 and discussed policy reforms, good governance, digitalization, capacity building and training, institution building, and assured public service delivery.

The Sri Lankan President admired the way India has managed socioeconomic development and has ensured high economic growth. During the meeting, Ranil Wickremesinghe shared his vision for the island country, a strategy to address the recent economic challenges and put the country on the path of high economic growth. He also urged the NCGG to help in establishing a University of Governance and Public Policy in Sri Lanka, the statement read.

Sri Lanka is keen to learn the policy-driven governance model of India and the massive use of digital technology in the planning, execution, and monitoring of various programmes and projects.

“During a series of meetings set up by the President’s office, top civil servants expressed their appreciation for the sustained assistance that India has provided to Sri Lanka during its recent unprecedented economic crisis. The NCGG DG spoke about the Prime Minister’s mantra of ‘neighbourhood first’ and highlighted the special relationship India-Sri Lanka have,” the statement added.

The Asian Development Bank (ADB) in a report has said that China’s recovery from the COVID-19 pandemic and strong demand in India will drive strong economic growth in Asia this year. Asia’s developing economies are on course for faster growth and moderating inflation this year and next, even as advanced economies are contributing to a darker global outlook, the report issued on April 4 added.

The ADB projected that China’s economy will grow 5 percent this year and 4.5 percent next year — better from last year’s 3 per cent growth, but slower than its long-term average. India’s economy is expected to grow at a slower pace of 6.4 percent this year compared to a 9.1 percent annual pace of expansion in 2021, as it rebounded from the worst of the pandemic, and 6.8 percent in 2022. However, it’s one of the fastest expansions for a major regional economy.

The ADB added that growing imports of Russian crude oil, especially by China and India, will likely cushion the impact of rising prices — such as exports to China, India and Turkey more than doubled last year.

The group’s 46 member nations across the continent are set to grow at 4.8 percent in 2023 and 2024, faster than the 4.2 percent last year, the ADB said in an update to its regional forecasts. Inflation should moderate to 4.2 percent this year in a slight easing from 4.4 percent in 2022.

India saw the sale of over one lakh electric vehicles (EVs) every month from October 2022 to March 2023, says the data shared by the Government. In October 2022, 117,252 EVs were sold. The next month, Indians bought as many as 121,389 EVs as against 104,783 in December 2022. EV sales touched a fresh high for a month in March 2023.

In the financial year 2023, as many as 11,71,203 EV units were sold in India, an increase of over 150% against the sale of 4,58,748 EVs in the financial year 2022. Record 1,30,430 EV units were sold in March 2023. In FY23, India bought as many as 11,70,916 EV units, crossing the million milestone for the first time in a fiscal year. This is a massive jump of over 150 percent as against the sale of 4,58,748 EV or battery-operated vehicles in the previous financial year, according to Vahan data. The maximum number of vehicles sold in the petrol category was 1,74,36,125.

In the EV segment, the vehicle category that contributed the most to the sales were two-wheelers and three-wheelers. Two-wheelers, the most affordable EV sub-segment, saw 716,447 units being sold while as many as 397,429 units were sold in the electric three-wheeler segment.

The Ministry of Defence, Government of India has signed a ₹1,700-crore contract with BrahMos Aerospace (BAPL) for procurement of next-generation maritime mobile coastal batteries (long range) and BrahMos missiles. These systems will enhance multi-directional maritime strike capability of the Indian Navy, said the ministry in a statement. The delivery of the batteries is scheduled to begin from 2027.

“The systems will be equipped with supersonic BrahMos missiles and will significantly enhance multi-directional maritime strike capability of the Indian Navy,” the statement added.

BAPL is a joint venture between India and Russia, making a crucial contribution to augment the new generation surface-to-surface missile with enhanced ranges. The latest deal is a boost to the Centre’s Self-reliant India initiative, said the Ministry of Defence.

“This contract is going to give further boost to indigenous production of critical weapon systems and ammunition with active participation of indigenous industries. This project will generate an employment of more than 90,000 man-days over a period of four years. With the majority of the equipment and sub-system sourced from indigenous manufacturers, these systems will be a proud flag bearer of ‘Aatmanirbhar Bharat’,” the statement said.

The United Kingdom reached an agreement with Indo-Pacific partners to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) at a virtual ministerial meeting late March 31, 2023.

The CPTPP is a free trade agreement between 11 countries. “After 21 months of negotiations, this is the UK’s biggest trade deal since Brexit and [it] becomes the first European country to join CPTPP,” the government said.

The 11-country trans-Pacific trade pact includes Japan and Australia. The deal is important, as Britain looks to deepen ties in the Indo-Pacific region and build its global trade links after leaving the European Union. “Joining the CPTPP trade bloc puts the UK at the centre of a dynamic and growing group of Pacific economies,” UK Prime Minister Rishi Sunak said in a statement, adding the deal demonstrated the real economic benefits of the country’s post-Brexit freedoms.

The United Kingdom has been looking to build global trade ties after its departure from the European Union in 2020, and has looked to turn towards geographically distant, but fast-growing economies. Other members of CPTPP are Brunei, Canada, Chile, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam. The UK is the first new member to join the group. Membership of CPTPP will supplement existing bilateral Free Trade Agreements the UK has with most of the member countries. The country said the deal, which will cut tariffs on cars, spirits and dairy products, would boost the economy by 1.8 billion pounds ($2.2 billion) each year in the long-run — a figure that could rise as more countries join the pact.

Sri Lanka plans to seek a fresh $1 billion temporary credit facility from India to buy essential items such as food and medicine, said official media on March 27. Its ministry officials met with Indian counterparts to secure the facility, said the state-run Daily News newspaper in a report.

The island country had in March received the first tranche of the $3 billion International Monetary Fund (IMF) bailout plan to help it overcome its economic crisis and catalyse financial assistance from other development partners.

Speaking at a discussion hosted by the Central Bank’s Centre for Banking Studies, Sri Lanka’s Former Central Bank Governor Indrajith Coomaraswamy said, “Negotiations are also underway to secure an Indian rupee swap from the RBI. The sum is still unknown; it could be as much as USD 1 billion. That is still under consideration.” The senior economist added, “This is expected to facilitate trade between Sri Lanka and India.”

According to Indrajith Coomaraswamy, the Sri Lankan government has also begun discussions with Indian authorities to extend the repayment of the USD 1 billion credit line obtained last year and debt under the Asian Clearing Union by five years.

Ranjith Siyambalapitiya, state minister of finance, also announced last week that Sri Lanka had settled a loan instalment of USD 121 million from prior facilities provided by India, using the first tranche of the IMF bailout package.

The Ministry of Electronics and Information Technology (MeitY) has constituted a nine-member team with the goal to make India a “product developer and manufacturing nation,” a news report said on March 27. The panel, which includes some of the veterans from the Indian electronics industry, has reportedly been given a period of two months to submit its recommendations.

The panel will be headed by MeitY additional secretary Bhuvnesh Kumar, while Joint secretary (electronics) Amitesh Kumar Sinha will serve as its member convenor. Indian electronic industry veterans, including HCL founder Ajay Chowdhary, Dixon Technologies chief Sunil Vachani, Lava International chairman Hari Om Rai, and Boat Lifestyle co-founder Aman Gupta, among others, are reportedly part of the team.

Quoting sources, the news report said that “the objective will be to increase electronics manufacturing with higher value addition”. The task force will focus on boosting local electronics manufacturing by looking beyond the production-linked incentive (PLI) scheme. An important government initiative launched during the first COVID-19 lockdown in 2020, the Rs 36,000-crore PLI scheme has attracted major global manufacturers, including Apple suppliers Foxconn, Wistron and Pegatron, and South Korean gadgets’ giant Samsung. The establishment of the task force to add value to electronics making comes at a time when India is being seen as an alternative to the manufacturing hubs of China and Vietnam.

The World Bank has warned that average potential global economic growth will fall to a three-decade low of 2.2% per year through 2030, bringing in a “lost decade” for the world’s economy, if policymakers fail to adopt ambitious initiatives to boost labour supply, productivity and investment.

In a new report, the World Bank said that failure to reverse the expected slowdown in potential gross domestic product (GDP) growth would have profound implications for the world’s ability to tackle climate change and reduce poverty. Concerted efforts to boost investment in sustainable sectors, cut trade costs, leverage growth in services, and expand labour force participation could boost potential GDP growth by up to 0.7 percentage point to 2.9%, the report added.

World Bank Chief Economist Indermit Gill said that policies which incentivised work, increased productivity, and accelerated investment could reverse the trend.

The overlapping crises in the last few years, such as the pandemic and Russia’s invasion of Ukraine, had ended nearly three decades of sustained economic growth, adding to worries about slowing productivity, which is essential for income growth and higher wages. As a result, average potential growth in GDP dropped to 2.2% from 2022 to 2030, 2.6% in 2011 to 21, and 3.5% rate seen from 2000 to 2010. Low investment will also slow growth in developing economies, with their average GDP growth plunging to 4% for the 2020s, from 5% in 2011 to 2021 and 6% from 2000 to 2010.

New York is the top financial centre in the world, says a list released by think-tank Z/Yen. The list of top 10 financial centres includes London, Singapore, Hong Kong, San Francisco, Los Angeles, Shanghai, Chicago, Boston and Seoul. Mumbai stands 61st in the list, followed by New Delhi at 65th position and Gujarat’s GIFT City at 67th rank.

Published on 23 March 2023, the thirty-third edition of the Global Financial Centres Index (GFCI 33) evaluated future competitiveness and rankings for 120 financial centres around the world. An initiative of China Development Institute (CDI), Shenzhen and Z/Yen Partners, London, the researchers studied 130 financial centres of which 120 financial centres are in the main index. The GFCI is compiled using 153 instrumental factors. These quantitative measures are provided by third parties, including the World Bank, the Economist Intelligence Unit, the OECD and the United Nations.

Ranking at third place in the list, Singapore has maintained its slight lead over Hong Kong in fourth position. Chicago, Boston, and Seoul have entered the top 10, replacing Paris, Shenzhen, and Beijing. Seven Western European centres feature in the top 20 in GFCI 33. Only Guernsey and Reykjavik rose 10 or more places in the rankings.

In the Middle East and Africa region, Dubai and Abu Dhabi continue to take first and second places. Casablanca is the leading financial centre in Africa. Mauritius and Riyadh have gained 10 or more places in the rankings.

Israeli Foreign Minister Eli Cohen and United Arab Emirates Ambassador to Israel Mohamed Al Khaja signed a customs deal on March 26 that paves the way for the countries’ free trade agreement to come into force. The Prime Minister of Israel Benjamin Netanyahu was present on occasion. The agreement will go into force on April 1.

The Israel-UAE Comprehensive Economic Partnership Agreement was signed in Dubai last May, but could not go into force until the two countries signed the customs agreement on Sunday. The customs agreement took time to conclude as the countries had to carefully go through every product and decide what would be covered. The agreement lowers or eliminates tariffs on more than 96% of tariff lines and 99% value of trade between the two countries.

Prime Minister Netanyahu said at the signing ceremony that the agreement will “bring about a reduction in customs, will bring down the cost of living, and will give a shot in the arm to business between Israel and the UAE.”

The free trade agreement covers regulation, customs, services, government procurement, e-commerce, and the protection of intellectual property rights.

According to the deal, about 96% of products traded between the countries, including food, agriculture, cosmetics, medical equipment, and medication, will be excused from customs duty. A number of products will be exempted immediately, while others will gradually be granted an exemption.

The UAE and Israel signed a normalization agreement in 2020 as part of the US-backed Abraham Accords.