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Time of India
5 days ago
- Business
- Time of India
India growth outlook: Economy in good shape, but faster growth needs infra push and trade deals, says Sanjeev Sanyal
India's economy is performing well but needs continued investment in infrastructure, trade agreements coming through, and ease of doing business to accelerate growth, Sanjeev Sanyal, a member of the Prime Minister's Economic Advisory Council, said on Friday. 'So we are in good shape, but can we grow faster? Yes, but for that, we will need to first put in place things like free trade agreements. We will have to keep investing in our own infrastructure and ease of doing business, so it's not like growth somehow naturally happens,' Sanyal told ANI. He emphasised that sustained effort is needed to navigate the global economic environment and achieve growth of more than 7-8 per cent annually. 'It requires effort, and we are putting in that effort, and the idea is that as and when we settle into the new environment, we can take full advantage of this and grow at more than 7-8 per cent. I mean there's no reason we shouldn't aspire to grow at 8 per cent every year,' he said. On trade, PM-EAC member Sanyal highlighted that India is actively engaging with new markets to build resilience amid turbulent global conditions. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like American Investor Warren Buffett Recommends: 5 Books For Turning Your Life Around Blinkist: Warren Buffett's Reading List Undo 'Old order is breaking down and there will be a period of turbulence, but as you have noticed, we have navigated this reasonably well… We are signing free trade agreements with a large number of countries. We already have some with countries like Japan, Australia, the UAE, the UK, and so on,' he said. Talks are in advanced stages with the European Union and the United States, he added, noting that India is proactively positioning itself for long-term economic security and growth. 'Our purpose is to provide as much of a cushion to our domestic economy so that we can keep growing,' he said. Earlier in May, Sanyal had attributed India's 6–7 per cent growth to process reforms that don't always make headlines but significantly enhance productivity. Speaking in Bengaluru at a seminar titled 'Reforms: Way To Vikasit Bharath,' he said hundreds of micro-level improvements were quietly driving results. 'These are not reforms that you hear about in the headlines or in newspapers; unless you happen to be from that little sector, you probably don't know anything about it. And yet it is the accumulation of these hundreds of small reforms,' he said, as quoted ANI. Stay informed with the latest business news, updates on bank holidays and public holidays . AI Masterclass for Students. Upskill Young Ones Today!– Join Now
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Business Standard
7 days ago
- Business
- Business Standard
India should negotiate trade deal with US on its own terms: EAC-PM chief
India should negotiate a trade agreement with the US on its own terms, keeping in view the national interest, Economic Advisory Council to the Prime Minister (EAC-PM) Chairman S Mahendra Dev has said. Dev expressed hope that India will have an advantage over other countries on tariffs once the Free Trade Agreements (FTAs) are signed, and it would boost exports. "The overall approach of India is negotiating trade agreements with countries on its own terms and keeping in view the national interests. The negotiations are going on and the ultimate decision depends on the mutual interests of both countries," he told PTI. US President Donald Trump has said the proposed trade deal with India would be on the lines of what America has finalised with Indonesia on Tuesday. Under the US-Indonesia trade pact, the Southeast Asian nation will provide complete access to its market to US products, while Indonesian goods would attract a 19 per cent duty in America. In addition, Indonesia has committed to purchasing $15 billion in US energy, $4.5 billion in American Agricultural Products, and 50 Boeing jets. The Indian team is in Washington for the fifth round of negotiations for the proposed Bilateral Trade Agreement (BTA). India has hardened its position on the US demand for duty concessions on agri and dairy products. New Delhi has, so far, not given any duty concessions to any of its trading partners in a free trade agreement in the dairy sector. India is seeking the removal of this additional tariff (26 per cent). It is also seeking the easing of tariffs on steel and aluminium (50 per cent) and the auto (25 per cent) sectors. Against these, India has reserved its right under the WTO (World Trade Organisation) norms to impose retaliatory duties. Asked should India has a slightly higher inflation target rate for a growth economy, Dev said, "There is no need to increase inflation target when the present framework is doing well on both inflation and growth objectives." He noted that there are some suggestions that RBI should use core inflation, excluding food for inflation targeting (IT). "We will have better inflation data from CPI after the revision of base year to 2024," the EAC-PM Chairman said. Dev said the experience of (IT) in the last 10 years shows that Inflation stayed within the band of 2 per cent-6 per cent with some exceptions and inflation declined significantly under IT framework. "It may be noted that higher inflation hurts the poor and middle class mostly. Low inflation is also important for sustainable growth," he said. Since 2016, India has adopted a flexible inflation targeting (IT) framework where the RBI aims to maintain a specific inflation rate, currently 4 per cent, with a tolerance band of +/- 2 per cent (i.e., between 2 per cent and 6 per cent). Similarly, Dev said the Fiscal Responsibility and Budget Management (FRBM) targets should be continued for sound fiscal management. "It may be noted that a higher fiscal deficit will increase inflation and hurt growth," he said, adding that Interest payments will be higher and lower funds will be left for development expenditure. While noting that the government has done well to reduce fiscal deficit from 9.2 per cent in FY21 to 4.8 per cent in FY25 and budgeted 4.4 per cent in FY26, he said the government has been sticking to its fiscal consolidation roadmap despite competing demands for expenditures. On Production Linked Incentive (PLI), he said one should not look at only the direct effect of PLI-linked sectors, as there is significant interlinkage between PLI and non-PLI sectors. "PLI incentives, along with FTAs with other countries, should attract FDI and enhance exports," Dev said. He pointed out that studies indicate that the share of Direct Value Addition (DVA) declined for electronics while the share of indirect DVA increased, suggesting linkages with upstream industries. "Government is working on increasing gross value added, reducing import content and increasing employment for PLI sectors by encouraging local manufacturing capability," Dev said. The government launched the PLI scheme for 14 sectors to incentivise domestic manufacturing, increase production, create new jobs and boost exports. The thrust of PLI is to make domestic manufacturing globally competitive and reduce imports by increasing domestic value addition. The PLI scheme adopts a sector-specific approach, avoiding a "one size fits all" methodology. In the electronics sector, PLI aims to scale up assembly processes to encourage the existing domestic manufacturing ecosystem. India is one of the biggest assemblers and exporters of mobile handsets. In FY15, mobile phone imports accounted for 78 per cent of the market in value terms, whereas by FY23 this figure had dropped to just 4 per cent. "A similar story can be heard for exports. The electronics and renewable energy sectors have attracted higher FDI inflows," Dev said. (Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
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Business Standard
15-07-2025
- Business
- Business Standard
Economy to grow at 6.5% in FY26 despite global uncertainties: EAC-PM Chair
The Indian economy is expected to grow at 6.5 per cent in the current financial year, despite geo-political tensions and trade policy uncertainties, Economic Advisory Council to the Prime Minister (EAC-PM) Chairman S Mahendra Dev said on Tuesday. In an interview with PTI, Dev further said that domestic growth will be driven by low inflation, resulting from good monsoon and benign interest rate regime, triggered by three back-to-back rate cuts by the Reserve Bank of India. "There are significant global headwinds like the twin shocks of geo-political tensions and trade policy uncertainties. "However, the Indian economy is resilient and continues to be the fastest growing country among large economies," the eminent economist said. According to Dev, high-frequency indicators for the first two months of 2025-26 indicate resilient performance of the domestic economy. "A 6.5 per cent of GDP growth for FY26 is feasible despite global uncertainties. India's medium-term growth prospects seem to be robust with sound fiscal management," he said. Dev also emphasised that rising government capital expenditure will have positive impact on growth with a healthy expansion in private consumption. The International Monetary Fund (IMF) and the World Bank have slashed India's growth projections for 2025-26 to 6.2 per cent and 6.3 per cent, respectively, citing uncertain global environment and high trade tensions. The Indian economy is estimated to have grown at 6.5 per cent in the previous fiscal year. As per the Reserve Bank of India's projections, the country's economy will expand at the same rate in the current fiscal year as well. Dev said there are many domestic tailwinds such as low inflation, rate cuts, and cash reserve ratio (CRR) cut by the RBI, expected good monsoon, measures in the last Budget like rising capital expenditure, tax reduction, etc. "These tailwinds may raise both rural and urban demand by raising both investment, consumption and some push to exports," he said, adding that on the supply side, agriculture and services are doing well and the growth of manufacturing will improve over the years. Responding to a question on inflation, Dev said with a good monsoon, food inflation should be under control this year. "Projections show continued moderation in the prices of many commodities, including crude oil. "Of course, we have to be watchful about the geopolitical uncertainties and tariff-related tensions, which can raise commodity prices," he said. CPI headline inflation was 2.10 per cent in June 2025 and it is the lowest year-on-year inflation after January 2019. Crude oil prices are currently under control. Food inflation in June 2025 was -1.06 per cent. Assuming a normal monsoon, RBI projected inflation at 3.7 per cent for FY26. Responding to a question on surge in net outward foreign direct investment (FDI), Dev pointed out that the World Investment report 2025 shows that global FDI inflows grew a marginal 3.7 per cent in gross FDI to USD 1,509 billion in 2024. "This is much lower than the global FDI inflows that had peaked nine years ago at USD 2,219 billion in 2015," he said. In other words, Dev said global FDI itself is growing slowly. Noting that India's FDI inflows have increased 14 per cent in FY25 -- although there was a moderation in net FDI -- he said it is known that there was net outward FDI and a rise in repatriation. "Exits and repatriation are part of the process and indicates a sign of a mature market. Unless you enable exit, the country can't attract investment," the EAC-PM chairman said. He pointed out that it may be noted that non-resident deposits and external commercial borrowings (ECBs) recorded higher net inflows in FY 25 compared to FY24. "Higher gross FDI also indicates that India continues to remain an attractive investment destination," Dev said. Referring to the government's push for public capital expenditure, Dev said increasing government capex will also have impact on private sector investment as studies have shown that creation of national highways and rural roads have increased businesses in rural and urban areas. "In other words, government capex will have multiplier effects. There are some green shoots on private capex," he asserted. Pointing out that many state governments are also attracting domestic and foreign private investment, he said the corporate sector and banks are earning more profits now and their balance sheets are in good shape. "So, there is no problem of capital availability. Industry is positive about India's growth story," Dev said. While the corporate sector is probably holding investment in capacity expansion due to global uncertainties and overcapacity in some countries like China, increase in rural and urban demand will facilitate more private investment, he said. "Many firms turned debt free and doubled their cash on the books. India Inc has to make new investments instead of keeping the cash," the EAC-PM said. Citing Economic Survey 2024-25, which had argued for deregulation and easing "compliance burden", he said there is a need for more progress on "ease of doing business" at the state level. "Hopefully, private capex will be more once the domestic demand increases further and global uncertainties are reduced," Dev said, adding that once the tariff concerns are over, there will be more opportunity for Indian industry to invest.
Time of India
15-07-2025
- Business
- Time of India
Economy to grow at 6.5 pc in FY26 despite global tensions, trade uncertainties: EAC-PM chairman
The Indian economy is expected to grow at 6.5 per cent in the current financial year, despite geo-political tensions and trade policy uncertainties, Economic Advisory Council to the Prime Minister (EAC-PM) Chairman S Mahendra Dev said on Tuesday. In an interview with PTI, Dev further said that domestic growth will be driven by low inflation, resulting from good monsoon and benign interest rate regime, triggered by three back-to-back rate cuts by the Reserve Bank of India . "There are significant global headwinds like the twin shocks of geo-political tensions and trade policy uncertainties. "However, the Indian economy is resilient and continues to be the fastest growing country among large economies," the eminent economist said. According to Dev, high-frequency indicators for the first two months of 2025-26 indicate resilient performance of the domestic economy. Live Events "A 6.5 per cent of GDP growth for FY26 is feasible despite global uncertainties. India's medium-term growth prospects seem to be robust with sound fiscal management," he said. Dev also emphasised that rising government capital expenditure will have positive impact on growth with a healthy expansion in private consumption. The International Monetary Fund (IMF) and the World Bank have slashed India's growth projections for 2025-26 to 6.2 per cent and 6.3 per cent, respectively, citing uncertain global environment and high trade tensions. The Indian economy is estimated to have grown at 6.5 per cent in the previous fiscal year. As per the Reserve Bank of India's projections, the country's economy will expand at the same rate in the current fiscal year as well. Dev said there are many domestic tailwinds such as low inflation, rate cuts, and cash reserve ratio (CRR) cut by the RBI , expected good monsoon, measures in the last Budget like rising capital expenditure, tax reduction, etc. "These tailwinds may raise both rural and urban demand by raising both investment, consumption and some push to exports," he said, adding that on the supply side, agriculture and services are doing well and the growth of manufacturing will improve over the years. Responding to a question on inflation, Dev said with a good monsoon, food inflation should be under control this year. "Projections show continued moderation in the prices of many commodities, including crude oil. "Of course, we have to be watchful about the geopolitical uncertainties and tariff-related tensions, which can raise commodity prices," he said. CPI headline inflation was 2.10 per cent in June 2025 and it is the lowest year-on-year inflation after January 2019. Crude oil prices are currently under control. Food inflation in June 2025 was -1.06 per cent. Assuming a normal monsoon, RBI projected inflation at 3.7 per cent for FY26. Responding to a question on surge in net outward foreign direct investment (FDI), Dev pointed out that the World Investment report 2025 shows that global FDI inflows grew a marginal 3.7 per cent in gross FDI to USD 1,509 billion in 2024. "This is much lower than the global FDI inflows that had peaked nine years ago at USD 2,219 billion in 2015," he said. In other words, Dev said global FDI itself is growing slowly. Noting that India's FDI inflows have increased 14 per cent in FY25 -- although there was a moderation in net FDI -- he said it is known that there was net outward FDI and a rise in repatriation. "Exits and repatriation are part of the process and indicates a sign of a mature market. Unless you enable exit, the country can't attract investment," the EAC-PM chairman said. He pointed out that it may be noted that non-resident deposits and external commercial borrowings (ECBs) recorded higher net inflows in FY 25 compared to FY24. "Higher gross FDI also indicates that India continues to remain an attractive investment destination," Dev said. Referring to the government's push for public capital expenditure, Dev said increasing government capex will also have impact on private sector investment as studies have shown that creation of national highways and rural roads have increased businesses in rural and urban areas. "In other words, government capex will have multiplier effects. There are some green shoots on private capex," he asserted. Pointing out that many state governments are also attracting domestic and foreign private investment, he said the corporate sector and banks are earning more profits now and their balance sheets are in good shape. "So, there is no problem of capital availability. Industry is positive about India's growth story," Dev said. While the corporate sector is probably holding investment in capacity expansion due to global uncertainties and overcapacity in some countries like China, increase in rural and urban demand will facilitate more private investment, he said. "Many firms turned debt free and doubled their cash on the books. India Inc has to make new investments instead of keeping the cash," the EAC-PM said. Citing Economic Survey 2024-25, which had argued for deregulation and easing "compliance burden", he said there is a need for more progress on "ease of doing business" at the state level. "Hopefully, private capex will be more once the domestic demand increases further and global uncertainties are reduced," Dev said, adding that once the tariff concerns are over, there will be more opportunity for Indian industry to invest.
The Hindu
15-07-2025
- Business
- The Hindu
Economy to grow at 6.5% in FY26 despite global tensions, trade uncertainties, says EAC-PM chairman Mahendra Dev
The Indian economy is expected to grow at 6.5% in the current financial year, despite geo-political tensions and trade policy uncertainties, Economic Advisory Council to the Prime Minister (EAC-PM) Chairman S Mahendra Dev said on Tuesday (July 15, 2025). In an interview with PTI, Mr. Dev further said that domestic growth will be driven by low inflation, resulting from good monsoon and benign interest rate regime, triggered by three back-to-back rate cuts by the Reserve Bank of India. "There are significant global headwinds like the twin shocks of geo-political tensions and trade policy uncertainties. "However, the Indian economy is resilient and continues to be the fastest growing country among large economies," the eminent economist said. According to Mr. Dev, high-frequency indicators for the first two months of 2025-26 indicate resilient performance of the domestic economy. "A 6.5% of GDP growth for FY26 is feasible despite global uncertainties. India's medium-term growth prospects seem to be robust with sound fiscal management," he said. Dev also emphasised that rising government capital expenditure will have positive impact on growth with a healthy expansion in private consumption. The International Monetary Fund (IMF) and the World Bank have slashed India's growth projections for 2025-26 to 6.2% and 6.3%, respectively, citing uncertain global environment and high trade tensions. The Indian economy is estimated to have grown at 6.5% in the previous fiscal year. As per the Reserve Bank of India's projections, the country's economy will expand at the same rate in the current fiscal year as well. Mr. Dev said there are many domestic tailwinds such as low inflation, rate cuts, and cash reserve ratio (CRR) cut by the RBI, expected good monsoon, measures in the last Budget like rising capital expenditure, tax reduction, etc. "These tailwinds may raise both rural and urban demand by raising both investment, consumption and some push to exports," he said, adding that on the supply side, agriculture and services are doing well and the growth of manufacturing will improve over the years. Responding to a question on inflation, Mr. Dev said with a good monsoon, food inflation should be under control this year. "Projections show continued moderation in the prices of many commodities, including crude oil. "Of course, we have to be watchful about the geopolitical uncertainties and tariff-related tensions, which can raise commodity prices," he said. CPI headline inflation was 2.10 per cent in June 2025 and it is the lowest year-on-year inflation after January 2019. Crude oil prices are currently under control. Food inflation in June 2025 was -1.06%. Assuming a normal monsoon, RBI projected inflation at 3.7% for FY26. Responding to a question on surge in net outward foreign direct investment (FDI), Mr. Dev pointed out that the World Investment report 2025 shows that global FDI inflows grew a marginal 3.7% in gross FDI to $1,509 billion in 2024. "This is much lower than the global FDI inflows that had peaked nine years ago at $ 2,219 billion in 2015," he said. In other words, Dev said global FDI itself is growing slowly. Noting that India's FDI inflows have increased 14% in FY25 — although there was a moderation in net FDI — he said it is known that there was net outward FDI and a rise in repatriation. "Exits and repatriation are part of the process and indicates a sign of a mature market. Unless you enable exit, the country can't attract investment," the EAC-PM chairman said. He pointed out that it may be noted that non-resident deposits and external commercial borrowings (ECBs) recorded higher net inflows in FY 25 compared to FY24. "Higher gross FDI also indicates that India continues to remain an attractive investment destination," Mr. Dev said. Referring to the government's push for public capital expenditure, Dev said increasing government capex will also have impact on private sector investment as studies have shown that creation of national highways and rural roads have increased businesses in rural and urban areas. "In other words, government capex will have multiplier effects. There are some green shoots on private capex," he asserted. Pointing out that many state governments are also attracting domestic and foreign private investment, he said the corporate sector and banks are earning more profits now and their balance sheets are in good shape. "So, there is no problem of capital availability. Industry is positive about India's growth story," Mr. Dev said. While the corporate sector is probably holding investment in capacity expansion due to global uncertainties and overcapacity in some countries like China, increase in rural and urban demand will facilitate more private investment, he said. "Many firms turned debt free and doubled their cash on the books. India Inc has to make new investments instead of keeping the cash," the EAC-PM said. Citing Economic Survey 2024-25, which had argued for deregulation and easing "compliance burden", he said there is a need for more progress on "ease of doing business" at the state level. "Hopefully, private capex will be more once the domestic demand increases further and global uncertainties are reduced," Dev said, adding that once the tariff concerns are over, there will be more opportunity for Indian industry to invest.
