Category: Economy

In August, Saudi Arabia surpassed Russia to become the second-biggest supplier of oil to India, while Iraq retained the top spot, according to industry and trade sources.

Saudi Arabia shipped 8,63,950 barrels of crude to India last month, up 4.8% from last month, while Russia shipped 8,55,950 barrels, down 2.4% from December 2011.

In spite of Saudi Arabia’s gain, India cut African imports in order to cut its share of oil from the Organization of Petroleum Exporting Countries to 59.8%.

Following Moscow’s invasion of Ukraine in late February, India became Russia’s second biggest oil buyer after China. It is thought that the two countries, eager to secure raw materials at discounted prices, are cushioning the impact of western sanctions on Moscow as a result of their agreement to secure raw materials at discounted prices.

However, Moscow’s ‘special military action’ in Ukraine has not been publicly condemned by New Delhi. A Shanghai Cooperation Organisation summit, a regional security organization, will be held alongside a meeting between Modi and Putin on Friday.

In June, India imported a record amount of oil from Russia, but its imports have been declining since Moscow narrowed oil discounts and refiners lifted shorter-term supplies.

Foreign banks and rating agencies are increasingly becoming optimistic about India’s potential to grow and as a key investment destination, while the global economy keeps fretting about intense pains caused by the biggest economies be it as front-loading of Federal Reserve rate hikes or China’s deteriorating construction bubble.

Moody’s yesterday proclaimed a stable outlook on India, saying its credit profile shows key strengths, including its huge and diversified economy with high growth potential, a comparatively robust external position, and a firm domestic financing base for government debt.

McKinsey & Co’s chief executive asserted it’s not India’s decade but it’s India’s century. “India is the future talent factory for the world. By 2047, India would have 20% of the world’s working population. And with supply chains being reimagined, it has massive potential for India across all aspects of manufacturing. The third is digitization. India has leapfrogged on the digital scale. All those are the raw materials to do something special for not only the Indian economy but potentially for the world,” McKinsey’s Bob Sternfels told ET.

India’s finance minister said that advancing economies like that of India are showing a high possibility to lead the global economy for the next 5-6 decades.

India and Japan come together to combat the ever-increasing expansionist behavior of China in the Indo-Pacific region. Both countries plan to soon carry out their first-ever air combat exercise with fighter jets, improve their reciprocal military logistics pact and augment the range of defense-industrial collaboration to make the most advanced weapon systems.

Defence Minister Rajnath Singh and his counterpart Yasukazu Hamada met and discussed the importance of the India-Japan defense partnership and the vital role it will play in clinching a free, open, and rules-based Indo-Pacific region. “We also held extensive discussions on ways to enhance maritime cooperation, including MDA (maritime domain awareness),” Singh said.

While India is struggling with the unceasing military clashes in eastern Ladakh with China, though in some areas, troops have been withdrawn, Japan is strengthening its military potentialities to prepare for any eventuality stemming from the Taiwan Strait crisis.

The India-Japan joint statement considered Tokyo’s decision to scrutinize all options, such as its “counter-strike” capabilities, for its national defense. “The Japanese side expressed its determination to fundamentally reinforce its defense capabilities within the next five years and secure substantial increase of defense budget needed to effect it,” the statement said.

“Acknowledging Japan’s determination to reinforce its defense capabilities, the Indian side expressed its support to work towards enhanced security and defense cooperation,” it added

Saudi Arabia’s real gross domestic product increased by 12.2% in the second quarter compared with last year’s second quarter, according to data published on Wednesday. The kingdom, which is the world’s largest oil exporter, gains an advantage due to escalating crude prices and a post-pandemic recuperation.

The government had expected a growth of 11.8% at the end of July, but the growth figure in the second quarter exceeded the estimate. The economy improved by 2.2% from the first quarter.

“The growth is mainly due to the high increase in oil activities by 22.9% y-o-y,” the General Authority for Statistics said. The oil economy grew 4.4% from the first quarter to the second quarter.

Non-oil activities saw an increase of 8.2% on a yearly basis and 4.5% from the first quarter. Government activities grew by 2.4% in the first six months of 2022, a 0.4% rise compared to the first quarter.

The American services sector grew at a somewhat quick pace in August amid indications of easing supply issues and decelerating price gains, according to an industry survey released on Tuesday.

The Institute for Supply Management’s services index went up to 56.9 percent, a little above the July level, flouting expectations of a decline. The new orders index rose 1.9 percentage points, and employment jumped 1.1 points, ISM said, while prices went down 0.8.

“The services sector had a slight uptick in growth for the month of August due to increases in business activity, new orders, and employment,” ISM survey chair Anthony Nieves said in a statement.

Companies replying to the survey noted “some supply chain, logistics and cost improvements; however, material shortages remain a challenge,” he said. A hopeful prospect was that “employment improved slightly despite a restricted labor market.”

Two-thirds of the US economy depends on the service sector, which comprises a large variety of services, from education to IT to medicine.

Even in the middle of very high US inflation, the sector has expanded steadily for 151 months, except for a two-month decline as the United States battled with the coronavirus pandemic in April and May 2020.

In the last fiscal year, India’s exports of goods and services surpassed USD 675 billion, and the country aims to increase international trade to USD 2 trillion by 2030, according to Commerce and Industry Minister Piyush Goyal.

While speaking with faculty, researchers, and students at Stanford University here, Goyal said India’s economy would be worth USD 30 trillion by the time it celebrates its 100th anniversary.

He continued by saying, “In a business as usual scenario, when India will be celebrating its 100th anniversary of independence in 2047-2050, we will have a USD 30 trillion economies and perhaps a USD 35-45 trillion economy if some of the aggressive plans the government is putting together work out. Goyal said that’s what he aims to bring to the table.

Only the US, China, Japan, and Germany have larger economies than India, with a GDP of USD 3.3 trillion. As compared to the UK, India ranked 11th among large economies a decade ago. During the June quarter, the Indian economy expanded 13.5%, surpassing the UK, which fell to sixth place.

A lot of effort has been put into laying the foundation on which the country can rapidly transform, grow its economy, improve its systems, and engage in technology in the last few years, according to Goyal. Over the past year, we saw some successes in our international engagement, with exports of goods and services reaching USD 675 billion for the first time.

A minister added that we aim to increase our international trade to about USD 2 trillion by 2030.

In August, the non-oil private sector in Saudi Arabia grew faster than it had in October of last year as business activity improved.

The Saudi Arabian S&P purchasing managers’ index (PMI) for the entire economy rose to 57.7 in August from 56.3 in July, breaking above the series average of 56.8 since 2009. A reading above 50.0 indicates that activity is expanding.

David Owen of S&P Global Market Intelligence wrote, “Saudi Arabia’s PMI pointed to increased resilience in the non-oil economy during August as business activity and sales continued to grow strongly despite reports of increased global economic concern.”

Since the pandemic, the number of new orders has increased at the fastest rate since October last year, driven by improved customer demand, higher exports, and overall economic recovery. The rise in new orders was fueled by a strong increase in export orders, although the pace was a little slower than July’s eight-month high.

According to the series average of 61.4, the manufacturing sub-index rose to 61.5 in August from 59.9 in July. For the second consecutive month, input cost growth slowed, roughly in line with the series average. This is the fifth consecutive month that the employment sub-index has increased, albeit marginally and at a slower pace than in July.

India’s gross domestic product (GDP) witnessed a two-digit growth of 13.5% in the first quarter of the 2022-2023 financial year at a time when powerful economies around the globe are finding it difficult and the giant Chinese economy is crawling towards a declining economic activity.  The reason for India’s economic success is the carefully assessed implementation of fiscal and monetary measures announced by the Narendra Modi government after the 2020 COVID-19 outbreak in the country.

Another reason for India’s good performance is the Modi government’s aim on protecting the poor through PM Gareeb Kalyan Yojana, easy loans to micro, small and medium enterprises (MSMEs), better public funding for capital expenditure, and exciting private investments, such as told by government officials and experts.

“Modi government’s capital expenditure during Q1 of FY23 stands at ₹1.75 lakh crore, which is equivalent to capital expenditure in the whole financial year of 2013-14 during the Congress-led United Progressive Alliance (UPA) era,” one of them said.

India’s Private Final Consumption Expenditure (PFCE) in the first quarter of the current fiscal year stands at Rs 22 lakh crore, which is a 10% increase as compared to pre-pandemic levels of Rs 20 lakh crore in 2019-20, showing a slow but steady increase in household consumption despite Covid-19 disturbances, he said.

Dubai’s property market surged in the first six months of 2022 as investors came in large numbers, with Russia being in the top five buyers list as the gulf country takes advantage of an influx of wealth due to Western sanctions.

The first half of the year witnessed residential real estate transactions surge 60 percent with an 85 percent increase in the value of properties sold, property consultancy Betterhomes said in a report.

The top five buyers belonged to India, the United Kingdom, Italy, Russia, and France, in that order, followed by Canada, the United Arab Emirates, Pakistan and Egypt tied in eighth place, Lebanon, and China.

The number of Russian buyers moved up 164 percent in the first six months of this year from the first half of 2021, Betterhomes said. The numbers for France and Britain increased by 42 percent and 18 percent, respectively, while those from India dropped 8 percent and Italy fell 17 percent.

The geopolitical instability in Europe led to the increased demand and mortgage buyers looking to get in ahead of interest rate hikes, Betterhomes said.

Earlier this year, Reuters reported Russians were investing money into Dubai properties, seeking financial shelter in the wake of Western sanctions on Moscow over its invasion of Ukraine.

India has said it will help reinforce peace and prosperity in the Middle East and is confident to contribute significantly to economic growth, food security, and energy in the region and South Asia, through the newly formed I2U2 grouping.

 I2U2 comprises four countries India, Israel, the UAE, and the US. “I” stands for India and Israel and “U” for the US and UAE.

Prime Minister Narendra Modi attended the coalition’s first virtual summit on July 14, alongside US President Joe Biden, Israeli Premier Yair Lapid, and UAE President Mohammed bin Zayed Al Nahyan. Modi said the organization has constructed a positive plan of work and its framework is a good example of practical cooperation in the wake of increasing global unpredictability. The leaders agreed to augment joint investment in six important areas of water, energy, transport, space, and health and food security.

After the first virtual meeting, a joint statement said this “unique grouping of countries aims to harness the vibrancy of our societies and entrepreneurial spirit to tackle some of the greatest challenges confronting our world, with a particular focus on joint investments and new initiatives in water, energy, transportation, space, health, and food security”.