Category: Economy

The Indian economy today is transparent, open and watchable, said Union Finance Minister Nirmala Sitharaman while addressing the US business community on April 11 in Washington, encouraging them to come and invest in India and be part of the country’s amazing growth story.

The union minister was speaking at a luncheon meeting of the US-India Strategic and Partnership Forum, where she told representatives of the top US companies that the current state of the Indian economy is due to the path-breaking and futuristic reforms, such as digitisation, undertaken by Prime Minister Narendra Modi in the last nine years.

She added that for the next 25 years in the budget, the government has proposed that India should become an artificial intelligence (AI) hub. Three centres of excellence have been proposed in the premier institutions such as the Indian Institute of Technology, which would research into AI and find out tools that can make the life of businesses or householders easy.

Nirmala Sitharaman’s pitch to the US business community also highlighted the government’s hydrogen mission announced in the last two budgets. The Indian government has specifically identified the next 25 years leading towards India’s hundred years of being free from Imperial rule, added the minister. “So, by 2047, we expect India…meeting the aspirations of our youth…You’re looking at a very high potentially youthful, very skilled population which is going to contribute to India’s growth,” Sitharaman said.

India will use the G20 narrative to push its digital transformation story to the rest of the world with an objective of transforming the lives of people in the Global South, said India’s G20 sherpa Amitabh Kant on April 11.

The senior bureaucrat was addressing the 8th National Leadership Conclave held by All India Management Association (AIMA) in New Delhi. He underlined that globally there are 4 billion people who are without a digital identity and 2.5 billion people do not even have a bank account. There are 133 countries in the world which do not have digital fast payments, he added.

Kant specified the advancements India has made in the field of digitisation and digital payments, and how digitisation has transformed the lives of citizens and become a more productively efficient economy. “… How do we take this model of India to the rest of the world is the challenge and we will use the G20 narrative to push this digital transformation story of India to the rest of the world and see how we can use this opportunity to transform the lives of citizens in the Global South and that is what is important,” he said.

The Group of Seven (G7) advanced economies has set its sights on aiding developing countries in the introduction of central bank digital currencies (CBDCs) that adhere to international standards, Japan’s top currency diplomat Masato Kanda said on Tuesday.

During a recent speech in preparation for the International Monetary Fund and World Bank Spring 2023 meetings, Japan’s top currency diplomat Masato Kanda revealed that the move would be among the key themes of G7 discussions, alongside other grave issues like Russia’s invasion of Ukraine. He noted that G7 could address challenges the global community face from fast-moving digital technology by providing developing countries with detailed guidelines to develop CBDCs.

“We have to address risks from the development of CBDC by ensuring factors such as appropriate transparency and sound governance,” he said, adding, “As a priority of this year, the G7 will consider how best to help developing countries introduce CBDC consistent with appropriate standards, including the G7 public policy principle for retail CBDC.”

The Japanese minister mentioned that the rise of digital technology has also introduced new challenges, such as cyber-security, the spread of misinformation, social and political divides, and the risk of destabilising financial markets.

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.