Category: Economy

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.

Taiwan President Lai Ching-te signed an economic partnership agreement with the European Union on Monday. The agreement says that it would boost cooperation in semiconductors and that the two sides should work together as democracies.

Taiwan has pushed the signing of investment and trade deals with the EU, which would be politically significant for Taiwan because of its diplomatic isolation and general exclusion from most global bodies and agreements.

The EU has been stating Taiwan as a “like-minded” partner under the European Chips Act to boost semiconductor production in Europe and minimize dependency on Asia, despite the lack of formal ties with the Chinese-claimed island. 

Speaking at a Taiwan-EU investment forum in Taipei, Lai stated that Taiwan and the EU must form a “strong democratic umbrella” and build secure supply chains for global democracies despite the threat of expanding authoritarianism. “Looking to the future, Taiwan hopes to take an innovative approach towards signing an economic partnership agreement with the EU,” he said. Lai added that such an agreement would set a sound institutional base for further cooperation in semiconductors and AI.

Taiwan Semiconductor Manufacturing Co (TSMC) has supported Taiwanese investment in the EU. In August, TSMC launched a new chip plant in Dresden and Germany, expected to be a key supplier to European Industry and automakers.

Amongst the G20 countries, India is projected to be the fastest-growing economy, with a 7% GDP growth in 2024. Following India is Indonesia in the second spot with a 5% GDP growth and China sits at the third place with a growth rate of 4.8%.

The MyGov post on X stated – “India takes the lead in the G20 with an impressive 7% GDP growth rate projected for 2024! This achievement highlights India’s robust economy, showcasing its resilience and fast-paced growth amidst global challenges.” The post was released during the ongoing G20 summit in Brazil.

Russia, which is ranked 4th on the list, has a projected GDP growth of 3.6% that is followed by Brazil, which is the summit host with 3%. The African region is next on the list with a GDP of 3%, while the US is in the 7th position with a GDP growth of 2.8%.

Amongst the Western powers, Canada is expected to grow at 1.3%, followed by Australia at 1.2%. The European Union, France, and the UK have been clubbed in the slow growth category with a 1.1% growth rate. Italy is expected to grow even slower at 0.7%, while Japan lies at 0.3%. The worst performer in the list is Germany amongst the advanced countries, with a growth rate projected to zero.

Mr. Piyush Goyal, Union Minister of Commerce and Industry, forecasted at the Amazing Goa Global Business Summit 2024 on Friday that India’s economy would grow to $35 trillion in the next 25 years. Goyal emphasised India’s strong economic trajectory, expressing optimism that the country, currently valued at $3.5 trillion, will reach $35 trillion within the next quarter-century. He said that the twenty-first century is India’s moment to shine, predicting that it will become the world’s third-largest economy within three years.

Goyal credited India’s potential to its strong economic fundamentals, which include stable inflation, substantial foreign exchange reserves, and a favourable investment environment. These conditions, he stated, have resulted in foreign direct investment (FDI) doubling over the last decade compared to the prior one. Reflecting on India’s shift from one of the “fragile five” economies in 2014 to the world’s fifth-largest, Goyal praised Prime Minister Narendra Modi’s leadership, citing his ambition for stability and progress. Goa’s CM Dr. Pramod Sawant reiterated this view, emphasising the state’s aim to expand beyond tourism and become a destination for developing sectors. Former Union Minister Suresh Prabhu complimented India’s low-risk investment appeal, which has cemented the country’s status as a reliable global partner.

India-Russia trade is currently worth USD 66 billion, with expectations of reaching USD 100 billion by 2030, according to External Affairs Minister (EAM) S. Jaishankar. Speaking at the India-Russia Business Forum in Mumbai, Jaishankar emphasised the continuous increase in bilateral commerce, emphasising that the ambitious goal is realistic and doable.

The USD 100 billion objective, set during the annual meeting in July 2024, reflects the two countries’ growing economic cooperation. However, Jaishankar emphasised the importance of addressing trade imbalances, regulatory impediments, and non-tariff barriers in order to ensure more equitable trade. He remarked that a balanced commercial relationship will benefit both countries while also increasing mutual trust.

Jaishankar emphasised the need of local currency trade settlements, such as Special Rupee Vostro Accounts, in fostering financial integration. He also emphasised the importance of critical connectivity initiatives, such as the International North-South Transport Corridor, Chennai-Vladivostok Maritime Corridor, and Northern Maritime Route, in enabling smooth logistics.

The session, organised by FICCI and Russia’s Business Council for Cooperation with India, was attended by Russia’s First Deputy Prime Minister Denis Manturov, who shared Jaishankar’s views on strengthening trade ties.