Category: Economy

The foreign exchange reserves of India rose above a six-month high of $576.76 billion in the week through January 27, said the Reserve Bank of India’s (RBI) statistical supplement on February 3.

According to the Weekly Statistical Supplement released by the RBI, forex reserves rose by $3.03 billion during the week ending January 27. This is the third consecutive week that the country’s reserves have risen. In the week to January 20, the reserves stood at $573.73 billion.

The uptick in the foreign exchange reserves is a result of the rise in the Foreign Currency Assets (FCA), which is a major component of the overall reserves. The FCA increased $2.66 billion to $509.02 billion for the week ending January 27. The gold reserves increased $316 million to $44.03 billion. The Indian rupee ended at 81.83 against the US Dollar on February 3.

The dollar appreciated against several currencies, including the rupee, last year. While the rupee has been one of the better-performing currencies worldwide, the modest depreciation it experienced may have added to the domestic inflationary pressures and widened the Current Account Deficit. The currency also touched record low levels and breached the 83-mark for the first time last year. In response, the RBI spent forex reserves to cushion the fall.

German Chancellor Olaf Scholz pledged €200 million (roughly $215 million) to help Brazil defend the Amazon rainforest on January 30. The package announced during a visit by German Chancellor Olaf Scholz to Brazil included green energy and reforestation initiatives. During his visit to Brasilia, Scholz said he was delighted about Brazil’s return to the world stage under its new president, Luiz Inacio Lula da Silva.

The package for Amazon includes a new €31 million fund for Brazilian states for rainforest protection. The German Development Ministry said €93 million would go towards reforesting projects. Another €35 million had been halted by Germany and Norway under former President Jair Bolsonaro and was reactivated. Funds in the package are also earmarked for renewable energy and energy efficiency initiatives and reforestation programs.

The German government confirmed it will resume payments to the Amazon Fund, financial aid from European countries to Brazil to protect the Amazon rainforest and combat deforestation. According to Brazil’s government, the first payment of about R$ 193 million (USD $38 million) will go towards alleviating the health crisis of the Yanomami indigenous people.

Germany and Norway had suspended payments from the Amazon Fund in 2019, the first year of former President Jair Bolsonaro’s government, due to the lack of public policies to protect the Amazon.

The Singapore dollar saw a more than five-year peak on February 2 after the United States central bank said it had passed a critical point and began to improve in the fight against inflation. The Singapore currency rose 0.2 per cent to 1.3038 per US dollar, its highest since January 2018, and after overnight gains, was up about 0.7 per cent since January 31.

The Singdollar has been on an upward trajectory this year due to rising expectations of easing inflation and less aggressive monetary tightening. It has gained about 2.7 per cent since ending 2022 at 1.3395 to the greenback. Other regional currencies such as the Philippine peso, Indonesian rupiah and the South Korean won have also strengthened between 0.7 per cent and 1 per cent to hit multi-month highs against a softer dollar.

“The Singapore dollar Neer (nominal effective exchange rate) has retreated from the top towards the midpoint of (the Monetary Authority of Singapore’s) policy band, a sign that policy focus may start to shift from inflation towards economic slowdown,” said Philip Wee, Foreign Exchange Strategist, DBS Bank in an interview.

The Federal Reserve raised interest rates by a widely expected 25 basis points on February 1. Its Chairman Jerome Powell said that a “disinflationary process has started”.

Presenting the first Budget of Amrit Kaal on February 1, Union Finance Minister Nirmala Sitharaman in her Union Budget 2023-24 speech said, the Indian economy is on the right track and heading towards a bright future. The budget was also the last full budget of the Modi government before the 2024 Lok Sabha elections.

This year’s Union Budget focuses on seven key areas: inclusive development, reaching the last mile, infrastructure and investment, unleashing the potential, green growth, youth power and financial sector.

The capital expenditure increased for infrastructure development to Rs 10 lakh crore with capital outlay of Rs 2 lakh crore for modernising, expanding Railways. The capital investment increased for the third year by 33%, which come to 3.3% of GDP.

The other major highlights are the new tax regime, with reduced number of slabs from 6 to 5 and increased tax exemption limit to Rs 3 lakh; setting up a subsidiary of EXIM Bank for trade re-financing, data embassies, a single window IT system for getting approvals from various regulators, 100 labs in engineering colleges for developing 5G apps; and three centres of excellence in artificial intelligence to be set up in leading educational institutions in the country.

In terms of conservation, a new scheme is to be launched to aid the optimal use of wetlands, mangrove plantation to be taken up along the coastline under the new MISHTI scheme, the new Gowardhan Scheme to promote a circular economy with a total investment of Rs 10,000 crore, and the Green credit programme to be notified under the Environment Protection Act to incentivise environmentally sustainable and responsible actions by companies.

Under India’s one-year G20 presidency, Assam is all set to host the inaugural Sustainable Financial Working Group (SFWG) conference and Youth 20 Inception event in February.

The first SFWG meeting would be held on February 2-3 at the Hotel Radisson Blu in Guwahati, where 94 delegates from G20 member countries, guest countries, international organisations, and government officials from India will be present. The first day’s programme includes a yoga session and three SFWG seminars. The day’s activities will conclude with a river cruise, Ratri bhoj par samvaad, and a cultural event. The second day will also include a yoga session, three side event sessions, the fourth SFWG session, and a dinner for delegates at the Brahmaputra Heritage Centre.

The Youth 20 Inception event in Guwahati on February 7-8 will host 250 delegates at Hotel Radisson Blu and IIT, Guwahati. More than 400 students from Assam’s various academic institutions would take part in this event. The event is the first of several events on the five Y20 themes to be hosted across the country in the run-up to the last Y20 summit in August 2023. The event will focus on the themes of peace and reconciliation, the future of work, climate change and disaster risk reduction, youth in democracy and governance, health and well-being, and sports.

Led by a surge in the shipment of goods, the Netherlands became India’s third-largest export destination after the US and UAE during April-December 2022. It has taken over major destinations such as the UK, Hong Kong, Bangladesh and Germany, said the Commerce Ministry. India’s trade surplus with the Netherlands has also increased from $1.5 billion in 2017 to $12.3 billion in 2022.

India’s exports, such as petroleum products, electronic items, chemicals and aluminium goods, to the European country rose by about 69 per cent to $13.67 billion during April-December 2022 as against $8.10 billion in the same period previous year, the data showed. In 2021-22 and 2020-21, the outbound shipments from India to the country stood at $12.55 billion and $6.5 billion, respectively. In 2021-22, the Netherlands was the fifth largest destination for Indian exports as against ninth in 2020-21.

The Netherlands has emerged as a hub for Europe with efficient port and connectivity with the EU through road, railways and waterways. Petroleum exports went up significantly. Aluminium, electrical and electronics and pharma exports also contributed significantly.

In the calendar year, India’s exports to the country increased to $18.1 billion in 2022 from $5.5 billion in 2017. The Netherlands is also a major investor in India. In April-September 2022, India received $1.76 billion in foreign direct investment from the Netherlands. It was $4.6 billion in 2021-22.

Singapore will strongly support India’s G20 priorities in the current uncertain global landscape against the backdrop of the strained multilateral system, Trade and Industry Minister Gan Kim Yong said at the 74th Republic Day reception hosted by the Indian High Commissioner in Singapore on Wednesday.

 “We are confident that under its G20 leadership, India will put forth an agenda that is inclusive, ambitious, action-oriented and decisive. Singapore will lend our strong support to India’s G20 priorities,” he said.

India assumed the Presidency of the G20 or Group of 20 for one year from December 1, 2022, to 30 November 2023. The theme of India’s presidency is “One Earth, One Family, One Future” which shows its commitment to Vasudhaiva Kutumbakam (the world is one family).

“The theme of One Earth, One Future calls on all of us to work together on common challenges,” said Gan.

He further elaborated on the close ties between India and Singapore and their collaboration in many traditional areas such as defence, trade and culture, noting that economic cooperation between the two countries has grown from strength to strength.

Singapore is the largest foreign investor in India, and Singapore companies’ investment has increased from $1.3 billion in 2005 to $6 billion in 2020, a 50-fold increase over just 15 years. There are more than 400 Singapore companies operating in India. Indian companies make up the largest foreign contingent in Singapore, totalling over 8,000. On the regional front, Gan called for India and ASEAN to work together for the prosperity of Southeast Asian countries.

The Gautam Budh Nagar Industrial Department said on Friday that it has signed investment proposals worth ₹5,87,000 crore in the past two months with businesses interested in setting up units in Noida, Greater Noida and under the jurisdiction of the Yamuna Expressway Industrial Development Authority (Yeida).

The department now hopes that at least 33% of these investment proposals materialise within the next one or two years so that new opportunities can be created and employment generated. “We are making efforts so that all of the proposals are realised and the district performs better,” said Anil Kumar, Deputy Commissioner of the District Industries Centre (DIC), Gautam Budh Nagar.

The Noida and Greater Noida authorities and Yeida, on the direction of the Uttar Pradesh government, organised road shows and events to attract investors to the district last year. The government has engaged all departments and industrial bodies to attract investors in the run up to the global investors’ summit to be held in the state on February 12, said officials.

The DIC said 884 proposals for various departments have been submitted by domestic and international investors so far. Of these, 294 are for medium, small and micro enterprises and export promotion. The other proposals include 199 for Noida, 88 for Greater Noida and 45 for Yeida; 67 proposals are IT related, 41 are for handloom units, and one is for a food supply unit.

Maharashtra government signed memorandum of understanding (MoUs) with six companies at the World Economic Forum (WEF), Davos, Switzerland, for a total investment of ₹25,000 crore in the Pune region. The proposed investment is in various sectors, including pharmaceuticals, automobiles, data, electric vehicles and food processing.

A delegation led by Chief Minister Eknath Shinde represented Maharashtra at the WEF this year. The six MoUs signed in Davos carry the potential of generating more than 8,500 jobs, said Maharashtra Industries Minister Uday Samanth.

The six MoUs signed include a MoU worth ₹1,650 crore with Nipro Corporation, Japan, for a glass tubing production facility that will make Maharashtra a hub of pharmaceuticals’ production and create 2,000 job opportunities. Mahindra Electric Vehicle Automobile Limited is expected to start an electric automobile manufacturing unit at Chakan, Pune, estimated to create 3,000 employment opportunities, for which it has promised an investment of ₹10,000 crore, Samanth said. Pune is set to see an increase in food processing capabilities with the signing of a MoU with Rukhi Foods, which is likely to set up a ₹250 crore greenfield food processing plant near Pune.

External Affairs Minister S. Jaishankar on Thursday said India has extended a concessional $40 million Line of Credit for developing sporting infrastructure in the Maldives.

The line of credit is part of India’s efforts to bring Prime Minister Narendra Modi’s flagship projects such as “Fit India” and “Khelo India” into the ambit of the Neighbourhood First Policy. The projects of Fit India and Khelo India were introduced by the Indian government to revive sporting and fitness culture at the grassroot level in the country.

S. Jaishankar was on a three-day visit to the Maldives and Sri Lanka to further expand bilateral engagement with the two key maritime neighbours of India. He also inaugurated the community centre in Shaviyani Foakaidhoo with his Maldivian counterpart Abdulla Shahid. The community centre is part of 45 high-impact projects that New Delhi is partnering with the Maldives government, of which 23 have been completed.

New Delhi’s cooperation in the areas of sports and youth development has expanded rapidly, through the gifting of equipment and training of Maldivian athletes in India, Jaishankar said. “We have undertaken grant projects for setting up youth centres, strengthening sports infrastructure and establishing open-air gyms on 64 islands, including in Foakaidhoo,” he added.

The ministers also agreed to extend a further MVR 100 million as grant to the Maldives to undertake more projects towards the creation of local island infrastructure and socio-economic development of island communities.