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Hans India
28-06-2025
- Business
- Hans India
Rare earths crisis: India taking concrete steps to mitigate possible disruptions
New Delhi: As recent export restrictions imposed by China on key rare earth materials disrupt global supply chains, India has been taking a series of steps on the domestic front to mitigate possible disruptions, according to Finance Ministry. A concerning phenomenon amidst the tariff and trade developments was the imposition of restrictions on the export of rare earth elements (REEs) by China. Minerals such as lithium, cobalt, nickel, and rare earth elements are vital for solar panels, wind turbines, electric vehicles, and energy storage systems. 'Hence, such restrictions are bound to hamper the development of industries such as electric vehicles, defence and renewable energy,' said Finance Ministry's 'Monthly Economic Review for May 2025'. 'A list of 30 critical minerals was identified, with 24 brought under the exclusive auction authority of the Central Government through August 2023 amendments in the Mines and Minerals (Development and Regulation) Act, 1957. The Government of India had also launched the National Critical Mineral Mission (NCMM) in January 2025, a seven-year initiative (2024-25 to 2030-31), to build a self-reliant and resilient framework for securing critical minerals essential to India's clean energy transition and strategic sectors,' according to the Economic Review document. The NCMM targets 1,200 domestic exploration projects and supports overseas acquisitions by both PSUs and private entities. It also aims to strengthen the entire value chain through patents, skill development, mineral processing parks, and recycling of secondary sources. India is also expanding offshore exploration and forging international partnerships, including with Argentina and Australia, to diversify supply sources. The country joined the US-led Minerals Security Partnership (MSP) that aims to strengthen critical mineral supply chains through public and private sector investment. India is the only developing country member in the 14-member MSP. 'Further, India is investing abroad in exploring and acquiring critical mineral assets in resource-rich countries. A Joint Venture, Khanij Bidesh India Ltd. (KABIL), has been incorporated with the objective of acquiring critical mineral assets abroad,' said the Economic Review. Under the NCMM mission, the Geological Survey of India (GSI) has intensified its exploration programmes. In the 2024-25 field season, GSI had taken up 195 projects, focused on identifying and assessing critical mineral deposits. The guidelines for setting up Centres of Excellence (CoE) under the NCMM were issued in April 2025. CoEs will identify, develop and implement extraction processes and beneficiation technologies for a host of critical minerals from multiple sources and conduct directed R&D to reach Technology Readiness Levels. The Minerals (Evidence of Mineral Contents) Amendment Rules, 2025, were notified by the Ministry of Mines on June 12, 2025, to revise the exploration norms for establishing "evidence of mineral contents" in respect of REEs in a mineral block. This is crucial for determining when a mineral block is ready to be auctioned for mining or composite licenses, for rare earth elements. Earlier this week, Union Minister for Heavy Industries and Steel, H.D. Kumaraswamy, said the government is likely to take a decision within the next 15 to 20 days on launching a subsidy scheme to support domestic production of rare earth magnets. The scheme is aimed at reducing India's dependence on China for critical components used in electric vehicles and other high-tech industries.


Business Recorder
09-06-2025
- Business
- Business Recorder
Overseas Pakistanis help country post historic current account surplus of $1.9bn in 10MFY25
Pakistan has reported a current account surplus of $1.9 billion during the first ten months of the financial year 2024-25, marking a major turnaround from the $1.3 billion deficit recorded in the same period last year, according to the Pakistan Economic Survey 2024-25 unveiled on Monday. The improvement comes despite ongoing geopolitical disruptions in global trade and a widening trade deficit. The surplus was largely driven by a record-breaking $31.2 billion in remittances, reflecting a nearly 31% year-on-year increase in the said period. A monthly high of $4.1 billion in March 2025 helped ease external financing pressures and supported the build-up of foreign exchange reserves, which climbed to $16.60 billion as of May 30, including $11.51 billion held by the State Bank of Pakistan (SBP). Another strong contributor was the IT sector, which posted $3.1 billion in export earnings, including $400 million generated by freelancers—a testament to the growing digital services economy. Pakistan's current account posts $12mn surplus in April 2025 However, challenges persist. The goods trade deficit rose to $21.3 billion, as imports increased by 11.8%, outpacing the 6.8% growth in exports, which stood at $26.9 billion. Key export drivers included textiles and rice, while imports surged mainly in petroleum, machinery, and food. 'The government achieved a historic primary surplus of 3% of GDP for July-March FY25, up from 1.5% in the same period last year (FY24),' Finance Minister Muhammad Aurangzeb said in the Economic Review. The services account also widened, registering a $2.5 billion deficit, while the primary income account deficit climbed to $7.1 billion, primarily due to higher interest payments and dividend repatriation. On the financial side, foreign direct investment slipped 2.7% to $1.8 billion, indicating subdued investor sentiment. Net outflows of $1.6 billion were recorded as debt repayments intensified and liabilities shrank. Despite these concerns, the rupee remained stable, trading at Rs278.72 against the US dollar, buoyed by external account improvements. With global trade expected to grow 2.7% in 2025, Pakistan aims to sustain its recovery through structural reforms under the URAAN Pakistan framework, focusing on export diversification, IT growth, trade diplomacy, and infrastructure improvements. The current account surplus signals progress, but sustaining momentum will require targeted reforms to address underlying vulnerabilities in the external sector.


India Gazette
28-05-2025
- Business
- India Gazette
India offers deep cuts on tariffs as talks with US proceed FT
New Delhi aims, however, to maintain high tariffs on key agricultural products, the outlet has said India has proposed deep cuts in import tariffs on various goods, in an effort to reach a preliminary trade agreement with the US, the Financial Times reported on Wednesday. However, the country reportedly aims to maintain high tariffs on sensitive agricultural products, such as grains and dairy items. India is seeking to secure a deal before July 9, when the US has threatened to impose a 26% reciprocal tariff on all Indian goods. Sources familiar with the negotiations told the FT that India has shown willingness to cut tariffs on less sensitive farm products such as almonds, which currently face tariffs of up to 120%. It could also consider reducing tariffs on imported oil and gas, which range from 2.5 to 3%, the report said. The FT's sources declined to provide details on the range of US goods which New Delhi offered to "substantially" cut tariffs on, as the negotiations were at an "early stage." Indian trade officials have hinted, however, that any concessions would be similar to those offered in recent trade agreements, such as the one they have with the UK, in which India agreed to reduce tariffs on items such as alcoholic spirits, cars - including electric vehicles - car parts, and engineering goods. On Tuesday, India said that a successful trade agreement with the US could "flip current headwinds into tailwinds," according to a report by the Finance Ministry'sMonthly Economic Review. This can "open up new market access and energize exports," the report added. The US introduced an additional tariff on Indian products, effective April 2, but it was suspended for a 90-day period, and is set to expire on July 9. Meanwhile, the standard 10% US tariff on Indian goods remains in places. US President Donald Trump hascalled Indiathe "tariff king." In February, New Delhi announced a reduction in customs duties on items including luxury cars and solar cells, according to reports, in a move seen as aimed at addressing US trade concerns. India's federal budget for 2025 proposed reducing the peak import tariff from 150% to 70% and average tariffs from 13% to below 11%. India is also willing to buy US defense equipment and liquefied natural gas, government officials said. However, despite this, the US has advised companies such as Apple to avoid expanding manufacturing in India. (


Mint
01-05-2025
- Business
- Mint
Deloitte sees Indian economy picking up as tax stimulus to offset tariff woes
New Delhi: Deloitte expects India's economy to grow at a slightly faster pace in the ongoing financial year, breaking away from other international heavyweights that recently cut their projections for the country. The global consultancy sees the Indian economy growing at 6.5-6.7% in 2025-26, up from an estimated 6.3-6.5% in 2024-25, driven by strong domestic demand that could offset the impact of global trade uncertainties. India's economy treads a careful balance between shifting global trade dynamics and government measures to stimulate domestic demand, Deloitte said on Thursday in its India Economy Outlook for May. According to Deloitte, India's economic growth in FY26 will be contingent on two opposing forces—the positive impact of tax incentives aimed at growing consumer spending, and the potential impact of the uncertainty in global trade networks on the Indian economy. 'The interplay of tax stimulus and trade uncertainties could keep growth between 6.5% and 6.7% for the current fiscal year,' it added. The International Monetary Fund recently cut its FY26 forecast on India's economic growth to 6.2% from its earlier estimate of 6.5%, and slashed its global trade outlook as the US tariff war raises concerns worldwide. IMF's revision followed similar cuts by the Asian Development Bank, Moody's Analytics, and S&P Global. Moody's Analytics cut its calendar 2025 growth forecast for India to 6.1%, down by 30 basis points from its March projection, in response to the US tariffs. On Tuesday, the Union finance ministry said in its Economic Review for March that India's economy continued to show resilience and stability despite global uncertainties and trade-related disruptions, with key indicators pointing to sustained growth momentum in the final quarter of FY25. Last month, US President Donald Trump imposed a 27% reciprocal tariff on Indian goods, claiming the South Asian country levied an average 52% on US imports. However, his administration soon moved to temporarily ease duties on trading partners, including India. The US reciprocal tariff on India temporarily stands at 10% while the two nations progress towards stitching a bilateral trade agreement. 'All eyes are on the ongoing negotiations between the two nations', said Rumki Majumdar, economist, Deloitte India. 'Indian exports to the US tend to be more price-sensitive, while our imports are relatively less elastic. This makes it critical to preserve our export competitiveness,' she added. 'Depending on India's ability to negotiate with the US and come up with a bilateral trade agreement quickly, trade tariffs may potentially shave 0.1% to 0.3% off India's growth.' According to Deloitte, India's economic slowdown in FY25 was primarily due to election-driven uncertainties, unexpected rainfall in the first half of the year, and global trade volatility. However, the government's decision to forgo about Rs1 trillion in revenue through income tax cuts could see more money in the hands of the middle-class consumers, driving up consumption. 'The tax exemptions announced during the budget will increase disposable income in the hands of the young population with higher income elasticity… The projected economic expansion and immediate impact on consumption could translate to an impact of around 0.6% to 0.7% of the nation's GDP in fiscal year 2025 to 2026,' Majumdar said. 'The consumption multiplier (increase in final income driven by new injection of spending) could create economic activity worth between ₹ 6.7 trillion and ₹ 7.9 trillion in the medium term, creating a cycle of economic growth,' she said. Majumdar added that lower inflation, rangebound global oil prices, lower borrowing rates, more liquidity (due to the easier monetary policy), and a more certain global environment would help boost sentiment. First Published: 1 May 2025, 04:50 PM IST


Mint
29-04-2025
- Business
- Mint
Indian economy showing resilience amid global uncertainties, says finance ministry
New Delhi: India's economy continues to show resilience and stability despite global uncertainties and trade-related disruptions, with key indicators pointing to sustained growth momentum in the final quarter of FY25, said the finance's ministry's Economic Review for March, released on Tuesday. Rising GST collections, higher e-way bill generation, improved consumer sentiment, and a manufacturing revival indicated strengthening economic activity, while rural demand remained steady with increased household consumption, it added. The document, prepared by the finance ministry's department of economic affairs, said manufacturing was on the upswing, with the Reserve Bank of India's industrial outlook survey reporting stronger production, order books and capacity utilisation, and its order books, inventories and capacity utilisation survey for Q3FY25 also indicating higher capacity utilisation and underscoring an industrial recovery. The ministry added that inflation had eased significantly, with retail inflation falling to 4.6% in FY25 from 5.4% a year earlier—the lowest in six years—helped by government interventions and a favourable harvest that moderated food prices. In March 2025, India recorded its lowest year-on-year inflation since September 2019. "While the overall inflation outlook has improved, supported by a rate cut and positive food price trends, geopolitical uncertainties warrant close monitoring," the ministry added. India's retail inflation eased to a six-year low in March, driven by softer food prices. Consumer price index (CPI)-based inflation rose 3.34% year-on-year in March, down from 3.61% in February and 4.85% a year earlier. Food inflation also moderated to 2.69% in March from 3.75% in February and 8.52% in in March 2024. The latest monthly Economic Review also highlighted the government's continued commitment to fiscal consolidation, with the general government fiscal deficit steadily declining from its pandemic highs, thereby increasing the availability of domestic savings for private-sector investment and reducing the overall cost of capital. India reported economic growth of 6.2% of GDP in Q3FY25, up from 5.6% in the previous quarter, leaving much to be done in the final quarter to achieve the full-year revised growth target of 6.5% set by the National Statistical Office. Recently the International Monetary Fund (IMF) cut India's growth forecast for the current fiscal year (FY26) from 6.5% to 6.2%, owing to US tariffs. The revision came after similar cuts by the Asian Development Bank (ADB), Moody's Analytics and S&P Global, which downgraded India's growth forecast for the same reasons. The economic review also stressed the importance of timely action by policymakers and businesses to prevent uncertainty from dampening momentum, noting that India's large domestic economy presented an opportunity to trigger a virtuous cycle of investment, income growth, demand, and capacity expansion. "In contrast to normal times, action and execution have greater impacts now. It is an opportunity not to be missed," it added. First Published: 29 Apr 2025, 05:35 PM IST