Latest news with #DepartmentofEconomicAffairs
Time of India
19 hours ago
- Business
- Time of India
India's Q1 trade shines: Core merchandise exports up 7.2 per cent; rupee, forex reserves show resilience, says Economic Affairs department
Representative AI image India's trade performance showed strength in the first quarter of financial year 2026, as reported in the Monthly Economic Review by the Department of Economic Affairs (DEA). The report, cited by ANI, indicated total exports, encompassing goods and services, increased by 5.9 per cent year-on-year (YoY) in April-June FY26. Core merchandise exports, excluding petroleum and gems & jewellery, registered a growth of 7.2 per cent YoY. These statistics demonstrate India's robust external sector performance amidst global economic challenges. The report further claimed, "Amid shifting global trade patterns, India's trade performance remains resilient in Q1 of FY26." Foreign exchange reserves maintained sufficient levels, ensuring import coverage exceeding 11 months, signifying India's economic stability and protection against external disturbances. The Indian rupee displayed stability despite global oil price variations and a short-term Middle East conflict, with the exchange rate remaining stable through June 2025. The assessment addressed the wider global trade situation, noting that ongoing geopolitical tensions have introduced additional uncertainties to international trade flows. Global trade in goods and services showed stability in the initial half of 2025, with a USD 300 billion increase. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like These Are The Most Beautiful Women In The World Undo UNCTAD's July 2025 assessment revealed that global trade experienced a slowdown in 2025's first quarter, followed by recovery in the second quarter. Developed nations led trade growth, whilst developing countries showed reduced performance compared to previous quarters. Trade-related uncertainty showed improvement. The Trade Policy Uncertainty Index, reaching its highest in April 2025, decreased by approximately 35 per cent month-on-month by June 2025, suggesting enhanced stability in global trade policies. Nations worldwide are increasingly adopting bilateral discussions to address trade disagreements. Additionally, countries are strengthening supply chain stability through domestic production incentives in essential sectors and geographical diversification of suppliers. These strategies seek to maintain sustainable and stable trade operations in the current divided global economic landscape. Stay informed with the latest business news, updates on bank holidays and public holidays . Discover stories of India's leading eco-innovators at Ecopreneur Honours 2025
Business Standard
19 hours ago
- Business
- Business Standard
Early data from FY26 indicate potential for a turnaround in foreign investment flows says DEA
Department of Economic Affairs or DEA stated in a latest monthly update that in the face of ongoing global uncertainty, India achieved a capital and financial account surplus of USD 21.7 billion in FY25 on account of higher NRI deposits (USD 16.2 billion) and external commercial borrowings (USD 18.4 billion). However, during FY25, both net Foreign Direct Investment (FDI) and net Foreign Portfolio Investment (FPI) inflows declined vis-?-vis FY24, primarily influenced by cautious global investment trends shaped by geopolitical tensions and tighter financial conditions worldwide. Early data from FY26 indicate the potential for a turnaround in foreign investment flows. flows. Gross FDI inflows grew by 5 per cent (YoY) in April-May FY26 and stood at USD 15.9 billion. There are notable improvements in equity inflows and a lower incidence of repatriations, signalling fresh confidence in India's long-term growth prospects, particularly in sectors like digital infrastructure and manufacturing. On the portfolio investment side, net FPI amounted to USD 0.4 billion during Q1 FY26. While the debt segment witnessed outflows of USD 4.1 billion, these were offset by inflows of USD 4.5 billion in the equity segment. This suggests that global investors are selectively re-entering Indian equities, driven by expectations of stable inflation, credible fiscal consolidation, and ongoing growth in domestic demand. The government noted that during July 2024 to mid-July 2025, there has been a cumulative inflow of USD 7.5 billion through the Fully Accessible Route (FAR).
Business Standard
21 hours ago
- Business
- Business Standard
High-frequency indicators reflected broad-based strength in Indian economy says Department of Economic Affairs
India's economy sustained its growth momentum in the first quarter of FY26, supported by robust domestic demand, resilient business and services activity, and a favourable onset of the southwest monsoon, according to Monthly Economic Review report released by the Department of Economic Affairs (DEA). High-frequency indicators reflected broad-based strength, registering strong year-on-year growth. While the manufacturing and construction sectors continued to expand, the services sector anchored the overall economic growth in Q1 of FY26. As of now, favourable progress in the southwest monsoon has bolstered agricultural activity, leading to higher kharif sowing compared to the previous year. Adequate fertiliser availability and comfortable reservoir levels augur well for a healthy harvest outlook, providing fresh impetus to rural incomes and consumption. Inflationary pressures continue to recede in Q1 of FY26, with CPI inflation falling to a 77-month low of 2.1 per cent in June 2025. This sharp moderation was driven by a significant decline in food inflation, particularly in the prices of vegetables and pulses. Wholesale price inflation also moved into the deflationary zone at -0.1 per cent, providing further relief on the cost front.
Business Standard
21 hours ago
- Business
- Business Standard
India's trade performance reflects resilience, trade deficit narrows sharply in Q1FY26
Department of Economic Affairs stated in a latest monthly update that in light of the shifting global trade patterns, India's trade performance in Q1 FY26 reflects resilience. The country's total exports (goods & services) have registered a growth rate of 5.9 per cent (YoY) in Q1 FY26, reaching USD 210.3 billion. While merchandise exports have grown by 1.9 per cent (YoY), services exports grew by 10.9 per cent (YoY) during the period. This strength in the services exports has generated a net services surplus of USD 46.9 billion, which narrowed the trade deficit to USD 20.3 billion, a reduction of 9.4 per cent compared to Q1 FY25. During the same period, core merchandise exports continued to grow strongly by 7.2 per cent (YoY), mainly driven by electronic goods that have grown by 47.1 per cent (YoY). Petroleum products exports fell starkly by 15.6 per cent (YoY) during Q1 FY26. Similarly, merchandise imports have increased by 4.2 per cent (YoY); the petroleum, crude and products imports fell by 4.4 per cent (YoY). This reduction is likely attributable to the softening of the average Crude Oil FOB Price (Indian Basket), which has decreased to USD 67.2 per barrel in Q1 FY26 from USD 85.2 per barrel in Q1 FY25. India's trade performance in June 2025 reflects prevailing quarterly trends. Merchandise exports remained stable at USD 35.1 billion, similar to their level in June 2024, although core merchandise exports registered a 4.8 per cent (YoY) increase. Merchandise imports decreased by 3.7 per cent (YoY), primarily driven by falling gold imports and petroleum, crude and products. Notably, in June 2025, gold imports decreased by 27.6 per cent month-on-month from May 2025, which can be attributed to import restrictions implemented in June 2025. Robust services exports in June 2025 generated a net services surplus of USD 15.3 billion. As a result, the overall trade deficit narrowed to USD 3.5 billion in June 2025, representing a reduction of 51.9 per cent compared to June 2024.
Economic Times
2 days ago
- Business
- Economic Times
India has its task cut out for a rare challenge
Synopsis India's economy faces challenges despite a stable outlook, warns the June Economic Review. Sluggish global demand, US slowdown, tariff uncertainty, and weak private investment may slow growth. Medium-term risks include shifts in global supply chains for semiconductors, rare earths, and magnets. India's reliance on China for rare earth imports exposes key sectors like electronics and automotive to supply disruptions, impacting production and exports. AP Despite a broadly stable outlook, India's economy faces notable headwinds, the latest Economic Review for June warned. Sluggish global demand, especially from a contracting US economy, alongside uncertainty over tariffs and weak private investment, could weigh on growth. While FY26 may see steady momentum, deeper shifts in global supply chains for semiconductors, rare earths, and magnets pose medium-term challenges. In the medium term, given the ongoing momentous shifts in global supply chains in the areas of semiconductor chips, rare earths and magnets, India has its task cut out, said the review by the Department of Economic Affairs. The economy has the look and feel of 'steady as she goes' as far as FY26 is concerned, as per the report. Despite the broadly positive outlook, downside risks remain, it said. "While geopolitical tensions have not elevated further, the global slowdown, particularly in the US (which shrank by 0.5 per cent in Q1 2025), could dampen further demand for Indian exports. Continued uncertainty on the US tariff front may weigh on India's trade performance in the coming quarters.""Slow credit growth and private investment appetite may restrict acceleration in economic momentum. Further, given the deflationary trend in the wholesale price index, one has to observe economic momentum in nominal quantities. Measured in constant prices, economic activity may appear healthier than it is." India's key industrial sectors ranging from transport equipment to electronics, rely significantly on rare earth imports, with China being the dominant supplier. A recent SBI analysis suggested that ongoing curbs on Chinese rare earth exports could influence domestic production, export competitiveness, and, to some extent, the financial exposure of banks linked to these industries. The top sectors impacted by China's ban include – Transport equipment, basic metals, machinery, construction and electrical and electronics, as per the analysis. Both domestic production and exports will be impacted."Rare earth being a critical mineral, disruption in supply of rare earth can impact the financial exposure of banks to these sectors as also ancillary ones. However, it should be kept in mind vulnerability is also a function of available inventory of rare earth and disruption is not immediate uniformly across sectors," said SBI analysis of India's trade data showed that the country's total imports of rare earth elements and related compounds have averaged around $33 million annually over the past four years, with FY25 imports at $31.9 million. Imports of magnets have been significantly higher, averaging $249 million during the same period and rising to $291 million in FY25. The study highlighted that direct absorption of rare earths is concentrated in six core sectors, notably basic metals and electrical and optical the case of magnets, usage is primarily concentrated in the automotive, electrical and electronics, and machinery sectors. A granular, sector-by-sector analysis—factoring in both direct rare earth inputs and the embodied rare earth content in magnets (assumed at 33% by weight)—was undertaken from two angles: final demand and export rare earth footprint, measured in kilograms, serves as an approximate indicator of how vulnerable sectoral output may be to disruptions in the supply of rare earths or related value-added earth is a subset of critical mineral with wide application in many emerging technologies. Critical minerals (including rare earth) form an important part of the modern production process because of their uniquephysical, chemical properties in reducing energy consumption, achieve miniaturization and thermal the last three decades, there has been an explosion in the applications of rare earth and their alloys in several technology of their unique physical, chemical, magnetic, luminescent properties, these elements help to make many technological advantages such as reduced energy consumption, miniaturization, durability and thermal stability.
