Latest news with #IndianEconomy
Times of Oman
20 hours ago
- Business
- Times of Oman
Positive trajectory in Indian economy continues in 2025-26, all indicators indicate resilience: FinMin
New Delhi: The positive trajectory in the Indian economy appears to be continuing in 2025-26, with initial high-frequency indicators suggesting that economic activity has remained resilient, according to the Ministry of Finance's monthly report, released on Friday. High-frequency indicators such as e-way bill generation, fuel consumption, and PMI indices point to continued resilience. "Rural demand has strengthened further, supported by a healthy rabi harvest and a positive monsoon outlook," the monthly economic review of the finance ministry said. "Urban consumption is being supported by increased leisure and business travel, as seen in the rise of air passenger traffic and hotel occupancy." However, the report noted that there are signs of softening in areas like construction inputs and vehicle sales. Retail and food price inflation registered a sustained and broad-based decline in May 2025, driven by robust agricultural production and effective government interventions. Continuing its downward trend, consumer price inflation in India hit an over six-year low in May, in respite to common people. According to the statistics ministry, the year-on-year inflation rate based on Consumer Price Index (CPI) for the month of May was 2.82 per cent (provisional). It is the lowest year-on-year inflation since February 2019. The inflation rate is within the Reserve Bank of India's (RBI) manageable range of 2-6 per cent. Retail inflation last breached the Reserve Bank of India's 6 per cent upper tolerance level in October 2024. Since then, it has been in the 2-6 per cent range, which the RBI considers manageable. Coming back to the finance ministry report, India's economic momentum continues to grow, reflecting the country's ability to navigate complex global challenges while sustaining domestic growth drivers. In 2024-25, real GDP grew by 6.5 per cent, aligning with the Second Advance Estimates. "This growth came amid a challenging global environment marked by geopolitical tensions and trade uncertainties. Robust domestic demand, particularly a rebound in rural consumption, steady investment activity, and a positive shift in net exports, underpinned the economy's resilience. The services sector continued to be the main driver of growth on the supply side. Industrial output also expanded, with strong growth in construction and a stable performance in manufacturing. The agriculture sector rebounded, bolstered by favourable monsoon conditions and record food grain production," the report read. On the external front, India's total exports (merchandise and services) recorded a year-on-year growth rate of 2.8 per cent in May 2025, reflecting the resilience of exports amid tariff uncertainties and subdued global economic conditions. As of June 13, 2025, foreign exchange reserves remain strong, standing at USD 699 billion, which provides an import cover of 11.5 months. Additionally, the Indian rupee has experienced moderate volatility, in contrast to the more pronounced adjustments observed in other economies, the ministry said. The labour market indicators show signs of stability. "White-collar hiring witnessed a rise in hiring with core sectors such as AI/ML professionals, Insurance, Real Estate, BPO/ITES, and Hospitality leading the hiring growth. The employment sub-indices of the PMI indicate strong employment growth, with the employment sub-indices reaching a high. Formal job creation is also on the rise, as indicated by the growing net payroll additions under the Employee Provident Fund Organisation," it added. As was widely expected, the Indian economy grew by 6.5 per cent in real terms in the recently concluded financial year 2024-25, official data showed recently. The Reserve Bank of India had projected 6.5 per cent GDP growth for the fiscal year 2024-25. In 2023-24, India's GDP grew by an impressive 9.2 per cent, continuing to be the fastest-growing major economy. According to official data, the economy grew 8.7 per cent and 7.2 percent, respectively, in 2021-22 and 2022-23. This February, the World Bank said India will need to grow by 7.8 per cent on average over the next 22 years to achieve its aspirations of becoming a developed country by 2047. However, the World Bank asserted that getting there would require reforms and their implementation to be as ambitious as the target itself. To realise the vision of 'Viksit Bharat', a developed nation dream by 2047, India will need to achieve a growth rate of around 8 per cent at constant prices, on average, for about a decade or two, the Economic Survey document for 2024-25 tabled on January 31 asserted. India has made quite a turnaround, climbing the ladder of economic growth. This can be gauged from the 11th in 2013-14, India has positioned itself to become the fourth largest economy in 2025-26. Even as India has overtaken many countries in terms of the size of the economy over the past decade, the per capita income in India however remains very low.
Bloomberg
a day ago
- Business
- Bloomberg
India Posts Current Account Surplus as Trade Gap Narrows
India's current account returned a better than expected surplus in the January-March quarter as trade deficit narrowed following the revision of gold import data. The surplus in the broadest measure of trade in goods and services was $13.5 billion, or 1.3% of gross domestic product in the period, according to Reserve Bank of India data released Friday.
Times of Oman
a day ago
- Business
- Times of Oman
India's economy and exports seen resilient despite the geo-political developments in West Asia
New Delhi: The limited trade exposure to Israel and Iran, coupled with proactive engagement on infrastructure and technology, ensures that the ongoing conflict does not impact India's economic ambitions. As the world navigates an increasingly unpredictable geopolitical landscape, India offers a rare blend of economic resilience and policy foresight, anchoring its role as a stable force in the global economy. The global economy in 2025 continues to be clouded by geopolitical volatility, tariff tensions, and region-specific conflicts. Yet, amid the storm, India stands out as an exception, demonstrating resilience and stability in both economic performance and external trade. The deepening crisis in West Asia, particularly between Israel and Iran, has had little to no visible impact on India's economic trajectory or its export performance. Supported by robust fundamentals and prudent policymaking, the Indian economy has not only withstood external shocks but also shown encouraging growth signals across sectors. Indian Economy Remains Steady Amid Global Uncertainty Despite the global uncertainty stemming from geopolitical conflicts, trade restrictions, and financial tightening in developed economies, the Indian economy continues to expand steadily. According to the latest data, India's GDP growth in Q4 of 2024–25 has remained strong, signalling the continuation of a resilient growth path. The economy has benefited from a confluence of factors such as macroeconomic stability, effective fiscal management, and growing domestic demand. Foreign Direct Investment (FDI) has reached a three-year high in 2024-25, reflecting strong investor confidence in India's long-term potential. In the current year, 2025-26, the April FDI inflows were at USD 8.8 billion, manufacturing and business services accounted for half of the gross FDI inflows. Simultaneously, India's merchandise exports have touched an all-time high in 2024-25, contributing positively to the current account and boosting industrial production. India's exports grew at 2.7% in the month of May 2025, showing significant resilience despite global headwinds. Inflation, a key concern for many economies, has eased significantly in India, falling to a seven-year low due to well-managed food supplies, lower core inflation, and the Reserve Bank of India's calibrated policy stance. GST collections also hit an all-time high in May 2025, underlining robust consumption and formal sector expansion. On the capital markets front, Indian equities have performed steadily despite external pressures, supported by domestic inflows and improving corporate earnings. As India enters the new fiscal year, expectations of a good monsoon, rising rural demand, and improved credit flows to consumers and producers are poised to reinforce growth momentum. Private Sector Gains and Rural Boost Reinforce Momentum India's private sector activity surged in June 2025, hitting a 14-month high, a clear indication of expansion in the services and manufacturing sectors. The manufacturing Purchasing Managers' Index (PMI) reached 58.4, while the services PMI climbed to 60.7 — a 10-month high in June 2025. This uptick is attributed to strong domestic demand, increasing export orders, and favourable cost conditions for inputs. Enterprises across both sectors reported not only improved sales and higher new export orders but also increased hiring, a sign of expanding production capacities and confidence in business prospects. With inflationary pressures softening, firms are better positioned to maintain pricing power while offering competitive goods and services globally. In parallel, the rural economy is also showing promising signs. By June 20, 2025, Kharif sowing had increased by 10% over the same period last year, reaching 13.2 million hectares. The enhanced progress of the monsoon has particularly benefitted crops like rice and pulses, ensuring greater income support for rural households. While cotton sowing has slightly declined, the broader trend points toward an encouraging agricultural season. Strong Outlook for 2025–26 Amid External Headwinds S&P Global Ratings recently upgraded India's GDP growth forecast for FY2025–26 to 6.5%, citing favourable macroeconomic conditions such as a normal monsoon, declining global oil prices, and improved financial conditions. The report also notes that India's growth will continue to be driven by domestic demand, both consumption and investment, even as global exports face a slowdown due to weak external demand. While concerns remain over the sluggish global trade environment, India's well-diversified export portfolio and growing services trade offer a cushion. Additionally, the government's continued push toward infrastructure investment, ease of doing business, and Make-in-India initiatives are expected to strengthen the domestic industrial base and improve export competitiveness. No Impact of West Asia Conflict on India's Exports Despite the escalated hostilities between Israel and Iran, there has been no significant impact on India's exports to West Asia. This continuity can be attributed to India's well-managed port infrastructure, diversified export destinations, and strong bilateral mechanisms. Concerns over crude oil price volatility, often linked to Middle Eastern conflicts, have also been downplayed. Analysts believe that short-term fluctuations in oil prices are unlikely to have a major impact on India's macroeconomic stability, especially since India maintains adequate strategic reserves and benefits from hedging practices. These are temporary, event-driven fluctuations, they are unlikely to alter the long-term trajectory of India's energy or trade policies. Limited Trade Exposure to Israel and Iran A closer look at India's bilateral trade data further confirms that India's overall economic exposure to the Israel-Iran conflict remains limited. India's total trade with Israel and Iran during 2024–25 stood at approximately $3.7 billion each — a modest fraction of India's overall trade basket, which crossed $824 billion last fiscal 2024-25 India's exports to Iran primarily include rice, engineering goods , and petroleum products. On the other hand, exports to Israel are more diversified into gems and jewellery, engineering goods and electronic goods. On the import side, India majorly sources electrical machinery and precious stones from Israel. Imports from Iran are primarily agricultural and natural, comprising fruits, minerals & oil, and chemicals. Given the relatively narrow base of imports and exports with these countries, any disruption, even if it occurs, would have only a limited effect on India's aggregate trade flows. Strategic Engagement and Regional Connectivity India's relations with both Israel and Iran are not just transactional but strategically nuanced. In April 2025, India signed a revised agreement with Israel for agriculture cooperation, focusing on advanced technologies, R&D, and productivity enhancement. The agreement aims to establish more Centres of Excellence and bolster water-use efficiency and food processing , steps that have the potential to raise farmer incomes and improve product quality. With Iran, India's strategic interests are most visibly tied to the Chabahar Port Project. In May 2024, India and Iran inked a 10-year agreement for the operation of the Shahid Beheshti terminal at Chabahar Port. Under this arrangement, India Ports Global Limited (IPGL) will invest approximately USD 120 million in equipment and operations, and an additional USD 250 million in credit lines for other mutually agreed-upon infrastructure projects. This partnership holds immense potential for improving regional connectivity, especially toward Afghanistan and Central Asia, and strengthening India's presence in the International North-South Transport Corridor (INSTC). Chabahar's growing significance offsets any perceived short-term trade disturbances. Conclusions In conclusions, India's macroeconomic stability and foreign trade momentum remain intact, despite the geopolitical turbulence in West Asia. The country has managed to insulate itself from the adverse external environment through diversification, strategic autonomy, and consistent economic reforms. With rising private sector activity, strong agricultural output, resilient exports, and record-breaking GST collections, India is well-positioned to continue its growth path in FY2025–26.
Entrepreneur
a day ago
- Business
- Entrepreneur
The Micro, Small, and Mighty: MSME Day 2025
The story of India's MSMEs is far from over. Their future will be shaped not only by how well they adopt new technologies but also by how inclusively they grow, how strategically they invest, and how sustainably they operate. Opinions expressed by Entrepreneur contributors are their own. You're reading Entrepreneur India, an international franchise of Entrepreneur Media. As India marks MSME Day 2025, the country finds itself at a critical juncture. With over 7.4 crore micro, small and medium enterprises (MSMEs) accounting for nearly 30 per cent of GDP, 45.7 per cent of exports, and employing over 20 crore people, the sector is undeniably the backbone of the Indian economy. The emergence of Industry 5.0 marks a new chapter for India's MSMEs, where the fusion of human creativity and intelligent machines could redefine manufacturing, services, and even artisanal sectors. But despite its scale and contribution, MSMEs face a complex matrix of challenges such as – limited access to finance, outdated technology, skill gaps, and infrastructure bottlenecks. Yet, a quiet transformation is underway, powered by digital tools, policy support, and a growing recognition that innovation must be inclusive if India is to realise its vision of becoming a $5 trillion economy. Levelling the Playing Field Vinod Kumar, partner & leader - manufacturing at PwC India, highlights this inflection point: "India's MSME sector is undergoing a pivotal transformation, with technology emerging as a key enabler of competitiveness and scalability." For Kumar, MSMEs are increasingly adopting digital tools such as cloud-based ERP systems, e-commerce platforms, digital payments, and AI-powered analytics—to streamline operations, access broader markets, and enhance productivity. "Whether in precision engineering, healthcare devices, or agri-tech," he says, "the integration of smart technologies with human creativity is unlocking new possibilities." This momentum is mirrored in the numbers. According to a SME Digital Insights Study, over half of SMEs in India now use public cloud infrastructure, and one in five has migrated more than 50 per cent of their workload to the cloud. Cloud-powered tools like ERP and CRM systems are helping integrate business functions, streamline operations, and promote remote collaboration—without the need for large IT teams or capital-heavy infrastructure. Aditya Kinra, vice-president, Tata Teleservices, highlights how cloud adoption is reducing barriers to scale: "By shifting to cloud-based infrastructure, MSMEs can eliminate heavy capital investments in physical servers and IT hardware, opting instead for pay-as-you-go models that optimise resource utilisation." He also points to the strategic advantages MSMEs gain in this shift: "With affordable and accessible digital solutions, they can now leverage the same technological tools as large corporations—driving innovation, accelerating growth, and competing on an equal footing." Technology Alone Isn't Enough But if technology is the fuel, people are still the engine. For many MSMEs, especially those in rural or legacy sectors, the gap in digital literacy remains a major hurdle. Kinra notes that while adoption is growing, challenges such as limited digital skills, cybersecurity risks, and fragmented implementation still hinder full-scale transformation. "Technology adoption alone is not enough—businesses also need the right skill sets and strategic guidance to maximise their digital investments," he says. The government, too, has tried to bridge these divides with targeted schemes like Udyam Registration, Emergency Credit Line Guarantee Scheme (ECLGS), and the Production-Linked Incentive (PLI) scheme. These are designed to streamline compliance, improve credit flow, and support tech adoption. Yet, as Lajpat Yadav, COO at Ador Welding Ltd., puts it, "Disparities persist, such as limited access to capital, poor access to technology, and limited accessibility to the formal marketplace." He argues that structured financial practices, disciplined budgeting, and stronger financial literacy are equally essential for long-term sustainability. Platforms, Policy, and Partnerships Some firms are taking this message seriously. Ketan Kulkarni, CEO of AllcargoGATI, points out that, "Platforms like ONDC, Amazon, and Flipkart allow MSMEs to bypass traditional distribution channels and connect directly with customers." The stakeholders need to be focused on bolstering MSME clusters across India, providing end-to-end supply chain solutions that allow them to grow beyond hometown constraints. Yet, it's not just about commerce. Vasu Naren, CMD of Sona Machinery Ltd., reminds us that the government still needs to step it up. "The government needs to lay special emphasis on investing in Research and Development (R&D), refining quality control processes, and developing innovation ecosystems in order to improve MSME competitiveness." To match global standards, Naren believes India must invest more to improve quality control processes and reduce the skill gap with technology training. "AI will change the world and so will it change the MSME industry," he says, "and all workers, owners, stakeholders must be well prepared for it." This call for a broader support ecosystem is echoed by Rajneesh Kumar, SVP at Flipkart Group, who says that, "With strategic collaborations like Walmart Vriddhi, we are collectively enabling entrepreneurs to scale their aspirations and significantly contribute to India's burgeoning digital economy." Similarly, Jason Fremstad, SVP at Walmart, underscores the importance of equipping entrepreneurs with the business skills and market access needed to thrive in a digital economy. "Many micro enterprises face difficulties in securing the knowledge, tools and market access they need," he says. "Empowering these entrepreneurs has helped them to build and scale their business sustainably." Ready for the Future At a broader level, India's MSME sector remains hampered by regulatory complexity, low productivity in traditional industries, and insufficient integration into global value chains. Experts suggest a systemic, policy-driven approach is needed; one that combines infrastructure development, digital upskilling, simplified compliance, and access to formal credit markets. Pankaj Gupta, MD & CEO, Godrej Finance sums it up perfectly, "Many MSMEs don't lack ambition, they lack access, clarity, and confidence. They need support in understanding compliance, unlocking working capital, and going digital without getting overwhelmed." The story of India's MSMEs is far from over. Their future will be shaped not only by how well they adopt new technologies but also by how inclusively they grow, how strategically they invest, and how sustainably they operate. As India looks ahead to 2047 and the vision of a developed, self-reliant nation, the role of MSMEs will be nothing short of decisive.
Yahoo
a day ago
- Business
- Yahoo
India's economy to hold top spot for growth, but underlying weaknesses remain: Reuters poll
By Pranoy Krishna and Vivek Mishra BENGALURU (Reuters) -The Indian economy will grow at a mostly steady pace this fiscal year and next after marking a four-year low in 2024-25, according to economists polled by Reuters, who have mostly either kept their forecasts unchanged or made marginal upgrades. That stable outlook comes despite the Reserve Bank of India cutting interest rates by a full percentage point since early this year, including an unexpected 50 basis point reduction on June 6, to boost growth in the face of rising global uncertainties. But the world's fastest-growing major economy still earns that title mostly because government capital expenditure remains strong. Gross domestic product was forecast to expand 6.4% in the current fiscal year ending March 2026, the June 17-26 Reuters poll of 51 economists found. That is weaker than 6.5% reported for fiscal year 2024-25, which was the slowest since 2020-21. Growth was forecast to pick up modestly to 6.7% in FY 2026-27. That marks a slight upgrade from last month's poll, which had medians of 6.3% and 6.5%, respectively. "Most of the growth that was happening was mainly because of the capital expenditures of the government, which will flatten out," said Indranil Pan, chief economist at Yes Bank. Private sector spending is still trailing far behind, and analysts generally agree the economy is still failing to create enough quality jobs for its large young population. "One of the biggest challenges for India at the current juncture ... is per capita income. Job creation has not been strong enough to generate the income needed to support sustainable economic growth," Pan added. Some economists said there may be downgrades to the GDP outlook in the coming months if New Delhi fails to secure a trade agreement with Washington before the 90-day pause on tariffs comes to an end on July 9. Trade talks between the two sides have stalled over auto parts, steel and farm goods, Indian officials with direct knowledge told Reuters on Thursday, dashing hopes of a deal ahead of U.S. President Donald Trump's deadline to impose reciprocal tariffs. But ANZ economist Dhiraj Nim wrote they have upgraded their FY 2026 growth forecast on hopes that the two countries would reach a trade deal. "Even so, growth will remain below potential in a challenging global environment, warranting policy support," he added. The RBI shifted its policy stance to "neutral" from "accommodative" on June 6, signalling a likely end to its shallowest rate-cutting cycle in over a decade. But economists are divided on whether there would be a long pause or another 25-basis-point cut in the final three months of the year. Just over half of respondents - 28 of 53 - expected the repo rate to stay at 5.50% in the fourth quarter, while the rest forecast it at 5.25% or lower. Consumer inflation was expected to average 3.6% this fiscal year before rising to 4.3% next year, the poll showed. (Other stories from the June Reuters global economic poll) Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
