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Economists at the country's largest lender, SBI, today said they see India's Q2 real GDP growth slowing down further to 6.5% in the September quarter of this fiscal year. Amid concerns over the country's economic growth rate and whether it is slowing down, the analysts said they expect FY25 growth to come "closer to" 7%. SBI analysts join a long line of agencies like Fitch, ADB, IMF, Moody, World Bank, S&amp;P, and even RBI in forecasting India's GDP growth for FY25 in the range of 6.8% to 7.2% for FY25, driven by robust consumption and investment. SIP inflows have been at an all-time high, and so has QIP (qualified institutional placement) fundraising. As many as 71 companies raised Rs 88,678 crore this year through QIPs. Activity in Indian primary markets also remained robust, with 78 mainboard IPOs in 2024; this is a 111% rise from just 38 listings in FY23. Between April and June 2024, India's real GDP grew by 6.7%, the lowest growth seen in 15 quarters, pushing experts to believe that India is caught in a cycle of slowdown. "There is some incipient pressure evident on the domestic economy. Based on our analysis of 50 meaningful leading indicators (both consumption and demand-centric), a dip looks plausible across select cohorts of agriculture, industry, and services in Q2," the <keyword id="22337294" type="General" weightage="20" keywordseo="SBI-economists" source="keywords">SBI economists</keyword> added. Stating that they track 50 indicators to gauge economic activity, SBIs note said the proportion of indicators showing acceleration declined to 69% in Q2 FY25, as against 80% in Q2 FY24 and 78% in Q1 FY25. However, things might be changing now, given that rural demand has started looking up amidst muted urban demand. SBI also explained that the ongoing regulatory tightening on unsecured lending and roadblocks that are hindering rollover/refinancing of debt through unsecured credit are dismantling the unwarranted exuberance that had built up post-pandemic, especially in the urban areas. Madhu Lunawat, CIO &amp; Fund Manager, Bharat Value Fund states that the overall investment environment remains strong due to favorable economic conditions supporting government policies &amp; reforms. "The sustainable inflow from domestic investors is going to support the Indian equity market in any kind of correction. The long-term bullish structure of Indian economy will continue to attract new domestic &amp; global investors to participate in India’s growth story through various Investment avenues.” <h2>Rate cuts not on cards</h2>RBI Governor Shaktikanta Das clarified today that changing the monetary policy stance to 'neutral' does not mean a rate cut is imminent in the central bank's next policy announcement. Notably, RBI MPC is set to meet between December 4 and 6, 2024, to decide if the prevailing repo rate of 6.5%, which has stayed unchanged for the last 2 years, should be brought down or not. In its last meeting, The <keyword id="20501100" type="General" weightage="20" keywordseo="RBI-monetary-policy" source="keywords">RBI monetary policy</keyword> committee had shifted its stance to 'neutral' indicating that it is open to adjusting interest rates based on economic conditions. "It should not be assumed that we have done this, so therefore the next step is a rate cut. A change in stance doesn't mean that the next step is a rate cut in the very next meeting. It's not so," Das said. Das also cautioned that inflation remains a key factor, and inflation and CPI prints for October are expected to stay high.

SBI economists see Q2 GDP growth slowing down to 6.5%; FY25 growth to be closer to 7%

Indian banks are expected to have steady growth in earnings and returns over the next 3–4 years, according to a recent report by Jefferies. It expects a 13% compound annual growth rate (CAGR) in loan growth for banks between FY24 and FY27, helmed by a supportive environment and expected adjustments in interest rates. "We expect steady growth in earnings and stable returns, Over FY24-27, the banks we cover should see 13% CAGRin loans We factor 25-50 bps cut in rates, &amp; depending on timing, NIMs will move," the report said. Depending on the timing, these rate cuts could impact banks' <keyword id="20076541" type="General" weightage="20" keywordseo="net-interest-margins" source="keywords">net interest margins</keyword> (NIMs), which measure the difference between interest income generated and interest paid to depositors. The report also notes that banks' net interest income (NII), a critical metric that is reflective of how much a bank earns from its lending, could grow at a steady 12% CAGR, which would support overall earnings growth. <h2>Rate cuts probable next year</h2>Per SBI Mutual Fund's monthly outlook for November 2024, while markets were initially speculating possible rate reductions in December this year or February next year these chances now stand dampened due to two reasons. First, elevated CPI numbers in September, which stood at a nine-month high, underlined the stickiness of food inflation. Secondly, RBI governor Das recently highlighted his hawkish stance at a conference, stating that "rate cuts at this stage would be premature and risky’. The report further adds that February 2025, or even April, would be a better time to discuss repo rate cuts in India. Even <keyword id="19985925" type="General" weightage="20" keywordseo="bank-credit-growth" source="keywords">bank credit growth</keyword> has continued to outpace deposit growth for two years now. However, they seem to be inching closer in the recent past. For instance, in October 2024, while bank credit growth remained at 12.7%, the deposit growth rate followed closely at 11.8%. This also means that banks are witnessing an elevated bank credit-to-deposit ratio, standing at 77% in October. <h2>Risks in unsecured lending </h2>However, Jefferies noted some areas of caution that could influence growth in other revenue streams, particularly fees. Growth in fees may be at risk due to expected declines in the disbursal of unsecured loans, which generally carry higher interest rates and generate higher fees for banks. October saw stress and defaults rising in the unsecured lending space, prompting the RBI to intervene. As a result, unsecured loans by banks have only grown by 12.1%, the lowest since the pandemic. Despite these risks, the report expects banks' return on assets (ROA) and return on equity (ROE) to remain healthy, underscoring the sector's stable profitability potential. The report also highlights that while the Nifty Banks index has risen by 19% over the past year, it has still underperformed the broader Nifty index, which delivered 27% returns in the same period. BSE Bankex has been along similar lines, generating returns worth 19% over one year. While the Nifty banks' index has a YTD (yield to date) of 7.63%, it continues to trail Nifty's YTD of 11.30%

Indian banks to have steady growth in earning over next 3-4 years, fees from unsecured lending may dip, notes Jefferies report

Dear readers, As we approach yet another weekend, here are some key developments across various sectors. Nvidia has surpassed Apple to become the world’s largest company, driven by the AI boom. Meanwhile, the US Federal Reserve cut interest rates, by 25 basis points to 4.75%, the second such reduction in 2024. In the workplace, Gen Z’s approach to mental health got attention, with one employee taking a week off after a breakup. Additionally, Indian banks are expecting steady growth, despite challenges in unsecured lending. Read on for all the details! <h2>Top stories from the week </h2> Indian banks to have steady growth in earnings over next 3-4 years, fees from unsecured lending may dip, notes Jefferies report Jefferies forecasts steady earnings growth for Indian banks over the next 3–4 years, with a 13% annual loan growth rate. However, a decline in unsecured lending could reduce fee income. While net interest income is expected to grow at 12%, challenges such as rising defaults and a potential dip in rate cuts could affect profitability. Despite this, banks’ return on equity and assets remain promising. <a href="https://www.businessinsider.in/finance/news/indian-banks-to-have-steady-growth-in-earning-over-next-3-4-years-fees-from-unsecured-lending-may-dip-notes-jefferies-report/articleshow/115048179.cms" data-type="tilCustomLink" target="_blank">Read more</a> Nvidia becomes world’s largest company amid AI boom, surpasses Apple in the race Nvidia has surpassed Apple to become the world’s largest company by market capitalization, driven by the AI boom. The company’s strong performance is fueled by surging demand for its chips used in AI technologies. With a market cap hitting $3.43 trillion, Nvidia continues to dominate the AI hardware sector, powering data centres and AI research. The company’s revenue growth of 122% YoY further cements its leadership in the AI space. <a href="https://www.businessinsider.in/business/news/nvidia-becomes-worlds-largest-company-amid-ai-boom-surpasses-apple-in-the-race/articleshow/115003223.cms" data-type="tilCustomLink" target="_blank">Read more</a> ‘He had a breakup and took a one-week leave’: Manager shares about his Gen-Z employee, internet reacts A manager’s tweet about granting a Gen Z employee a week off for a breakup sparked widespread debate. While the manager expressed frustration over project delays, internet users defended the employee’s mental health needs, criticizing the manager’s lack of empathy. Some supported the manager’s view, pointing out generational differences in work culture. The incident went viral, furthering discussions about Gen Z’s unique workplace expectations. <a href="https://www.businessinsider.in/careers/news/he-had-a-breakup-and-took-a-one-week-leave-manager-shares-about-his-gen-z-employee-internet-reacts/articleshow/115041747.cms" data-type="tilCustomLink" target="_blank">Read more</a> US Fed cuts interest rates by 25 bps, Powell notes Trump’s victory to have no impact on policy decisions The US Federal Reserve has cut interest rates by 25 basis points to 4.75%, the second such reduction in 2024. Fed Chairman Jerome Powell emphasized the Fed’s independence despite Trump’s criticism and suggested that the economic outlook remains uncertain, though the Fed is focused on inflation targets. Trump’s policies may lead to higher inflation, adding complexity to the Fed’s efforts to stabilize prices. Experts anticipate that bond yields will stabilize, benefiting emerging markets like India. <a href="https://www.businessinsider.in/finance/news/us-fed-cuts-interest-rates-by-25-bps-powell-notes-trumps-victory-to-have-no-impact-on-policy-decisions/articleshow/115070690.cms" data-type="tilCustomLink" target="_blank">Read more</a> Big Tech’s winners and losers from Donald Trump’s win, according to the market After Donald Trump’s election victory, tech stocks surged, with companies like Tesla seeing significant gains. Tesla’s rise was fueled by Trump’s public support for CEO Elon Musk. Conversely, companies like Apple faced challenges due to fears over potential tariffs on China. While some, like Google, might benefit from lighter regulations, others like Meta could face political challenges. Overall, the election results reshaped market expectations for Big Tech’s future. <a href="https://www.businessinsider.in/tech/news/here-are-big-techs-winners-and-losers-from-donald-trumps-win-according-to-the-market/articleshow/115067798.cms" data-type="tilCustomLink" target="_blank">Read more</a> <h2>Top web stories</h2> <a href="https://www.businessinsider.in/entertainment/webstories/donald-trump-on-screen-a-look-at-his-iconic-cameos/slidelist/115045250.cms" data-type="tilCustomLink" target="_blank">Donald Trump on screen: A look at his iconic cameos</a> <a href="https://www.businessinsider.in/india/webstories/8-lifestyle-mistakes-contributing-to-health-problems-in-india/slidelist/115051791.cms" data-type="tilCustomLink" target="_blank">8 lifestyle mistakes contributing to health problems in India</a> <a href="https://www.businessinsider.in/travel/india/webstories/10-magical-indian-experiences-every-traveller-should-try/slidelist/115052527.cms" data-type="tilCustomLink" target="_blank">10 magical Indian experiences every traveller should try</a>

Weekend wrap: Nvidia’s AI-driven surge, Indian banks’ steady growth and more

<ul><li>The <keyword id="19899810" type="General" weightage="20" keywordseo="Reserve-Bank-of-India" source="keywords" meta.keywordsubtype="org" meta.entityname="Reserve Bank of India" meta.hostid="261" meta.entityid="Reserve Bank of India">Reserve Bank of India</keyword> will conclude the three-day <keyword id="19913109" type="General" weightage="20" keywordseo="Monetary-Policy-Committee" source="keywords">Monetary Policy Committee</keyword> (<keyword id="19918491" type="General" weightage="20" keywordseo="MPC" source="keywords">MPC</keyword>) meeting today.</li><li>The central bank is expected to announce its decision on policy rates.</li><li>The <keyword id="19899808" type="General" weightage="20" keywordseo="RBI" source="keywords">RBI</keyword> has maintained the <keyword id="20094323" type="General" weightage="100" keywordseo="repo-rate" source="keywords">repo rate</keyword> at 6.50% for the past nine meetings.</li></ul>The Reserve Bank of India (RBI) is set to conclude the three-day Monetary Policy Committee (MPC) meeting today, with Governor <keyword id="19913110" type="General" weightage="20" keywordseo="Shaktikanta-Das" source="keywords">Shaktikanta Das</keyword> expected to announce the central bank's decision on policy rates. The meeting, which <a href="https://www.businessinsider.in/finance/news/rbis-monetary-policy-committee-meeting-begins-today-announcement-on-october-9/articleshow/113999887.cms">began</a> on October 7, has garnered significant attention, as the RBI has maintained the repo rate at 6.50% for the past nine meetings. The repo rate has remained steady since the RBI adopted a cautious stance to balance inflation control and <keyword id="19900794" type="General" weightage="20" keywordseo="economic-growth" source="keywords">economic growth</keyword>. Key factors that the MPC is weighing include persistent inflationary pressures, particularly in food prices, as well as global economic uncertainties. According to data from the Ministry of Statistics &amp; Programme Implementation, while All India Consumer Price Index (CPI) inflation moderated to 3.65% in August--within the RBI's target band of 2-6%. <keyword id="19999654" type="General" weightage="20" keywordseo="food-inflation" source="keywords">Food inflation</keyword> remains elevated at 5.65%, above the central bank's medium-term target of 4%. This, coupled with rising global crude oil prices due to geopolitical tensions in West Asia, has intensified concerns over inflation. Despite these challenges, the RBI has so far opted for a status quo on the repo rate, aiming to foster economic recovery after the pandemic. However, today's announcement will be closely watched to see if the central bank shifts its stance, especially given the external pressures and uncertainties surrounding global markets. Economists, however, have noted that the RBI will not make any changes in its policy stance before December. "With the focus on taming headline inflation, the RBI is likely to hold the rates although the core inflation is within the limit. It is possible the RBI may shift to the neutral stand" said M Govind Rao, Member, of the Fourteenth Finance Commission and former Director, of the National Institute of Public Finance and Policy. On September 18, the US Federal Reserve announced a steep 50 basis points interest cut in its review meeting. US Fed announced the rate cuts after holding interest rates steady for eight straight meetings. "In this overarching macroeconomic setting of heightened geopolitical tensions, core inflation inching upwards, oil price volatility, and high food inflation, we anticipate a change in the RBI's policy stance from "withdrawal of accommodation" to "neutral" at its forthcoming MPC meeting on October 9, 2024. However, we do not see any rate action coming and the benchmark interest rates may not undergo any change" said Manoranjan Sharma, Chief Economist, Infomerics Ratings. Earlier this month the central government appointed three new members to the monetary policy committee. The MPC comprises three members from the RBI and three external members appointed by the Central Government. With inputs from ANI. SEE ALSO: <a href="https://www.businessinsider.in/business/auto/news/byd-emax-7-electric-mpv-launched-in-india-starting-at-26-9-lakh/slidelist/114046121.cms">BYD eMax 7 electric MPV launched in India starting at ₹26.9 lakh</a> <a href="https://www.businessinsider.in/personal-finance/news/heres-how-a-reddit-user-was-able-to-get-an-iphone-16-at-under-27000/articleshow/114035179.cms">Here’s how a Reddit user was able to get an iPhone 16 at under ₹27,000</a> <a href="https://www.businessinsider.in/stock-market/news/hyundai-swiggy-ather-upcoming-large-ipos-in-india/slidelist/114014140.cms">Hyundai To Swiggy: Everyone wants to cash in on the IPO bonanza</a>

RBI MPC announcement today: Rates unlikely to change, RBI may change stance to neutral

A recent report by Axis AMC shed light on the burgeoning Indian mutual fund industry. Since March 2021, the MF industry has grown at a CAGR (compounded annual growth rate) of 23.65%, touching an AUM (asset under management) of Rs 67.25 lakh crore in October 2024. <keyword id="20300870" type="General" weightage="20" keywordseo="Equity-Mutual-Funds" source="keywords">Equity mutual funds</keyword>, which garnered Rs 41,886.69 crore during the month, saw a 58.96% YoY growth. The biggest contributor to the equity segment was sectoral funds, which captured 29.3% of net equity sales in October 2024. In all, they brought in Rs 12,278.78 crore during October 2024. The AUM of <keyword id="20890471" type="General" weightage="20" keywordseo="Hybrid-Funds" source="keywords">hybrid funds</keyword> also stood at Rs 9.24 lakh crore during the month, registering an annual growth of 47.8% and inflows worth Rs 16,863.30 crore during October 2024. Amidst this, the arbitrage funds led in net sales, capturing 3.61% of their AUM with monthly inflows worth Rs 7,181.70 crores. There and more people are entering the Indian markets, as is evident in the growing SIP corpus (Systematic Investment Plans), which saw contributions worth Rs 25,323 crore in October 2024, a 54.7% year-over-year growth. In October 2024, about 63,69,919 new SIPs were registered, taking the number of SIP accounts to a record high of 10,12,34,212 The growth in equity investments was largely led by retail investors and HNIs (high-net-worth individuals). Since March 2021, the retail segment in mutual funds has seen a 31.2% CAGR, while banks and foreign investors have recorded a CAGR of 31.8% during the same period. Corporations were the biggest contributors to debt mutual funds. Notably, the AUM of debt funds grew 14.8% over the previous year to stand at Rs 10,65,037 crore as of October 2024. The category saw net sales worth Rs 47,699 crore last month. Also testimony to the growing interest of investors in mutual funds were the figures of <keyword id="23958398" type="General" weightage="20" keywordseo="Passive-Mutual-Funds" source="keywords">passive mutual funds</keyword>, which recorded net sales worth Rs 8,025 crore during the month. Out of this, just index funds observed net sales of Rs 7,931 crore in the previous month. AUM from the top 30 Indian cities grew at 22.6% CAGR, whereas other cities grew at 27.8% CAGR since March 2021. FY25 also seemed to be the year where NFOs received an enthusiastic response from investors. So far, a total of 124 NFO schemes have managed to collect a total of over Rs 77,932 crore.

Mutual funds in spotlight: Industry grew at 23.65% CAGR since March 2021

India’s political landscape is increasingly being defined by the troubling nexus between crime and politics. A study has highlighted a startling correlation: the election of politicians with criminal records is directly linked to a rise in crime across the country, particularly in states with weaker institutional frameworks. As India's political system continues to grapple with this issue, the societal consequences are becoming clear. <h2>A history of <keyword id="23341122" type="General" weightage="100" keywordseo="criminal-politicians" source="keywords">criminal politicians</keyword></h2><keyword id="21026899" type="General" weightage="20" keywordseo="Pappu-Yadav" source="keywords">Pappu Yadav</keyword>, a veteran politician from Bihar, serves as a prime example of this disturbing trend. Having represented his constituency for nearly 25 years, Yadav has faced 41 criminal cases, including serious accusations of murder and kidnapping. Despite his conviction in 2008, Yadav was acquitted in 2013, and he continues to hold political influence. His case is not unique; the political scene in states like Bihar, Uttar Pradesh, and Madhya Pradesh is littered with politicians facing multiple criminal charges. Anant Singh, another prominent figure from Bihar, holds a political career shadowed by 38 criminal cases, including murder, kidnapping, and attempts to murder. These individuals represent a broader pattern where politicians accused of serious crimes continue to serve in public office despite their criminal backgrounds. "They are getting elected, and over time the number has only been going up," remarks lead author Nishith Prakash. "In some states, it could be as high as almost 40% of people who are representing the state have some kind of a criminal accusation." <h2>Crime begets crime</h2>The research delves into the ramifications of electing criminally accused politicians. The study found that states with a higher number of such politicians also experienced increased <keyword id="22044507" type="General" weightage="20" keywordseo="crime-rates" source="keywords">crime rates</keyword>. For example, states like Bihar, Madhya Pradesh, Rajasthan, Odisha, and Uttar Pradesh, known for their historically weak institutions, have seen crime rise by 4.3% annually with the election of criminal politicians. The number increases to 5.8% when the politicians are accused of serious crimes like murder and kidnapping. <div type="Article" hostid="261" msid="113692670" title="What will it take for Kangana Ranaut’s &amp;#39;Emergency&amp;#39; to finally hit theatres?" mstype="2" mssubtype="0"></div>Prakash notes that weak rule of law and institutional failure create fertile ground for such politicians to not only rise to power but also exacerbate the deteriorating law-and-order situation. When politicians themselves are involved in criminal activities, they often manipulate legal and administrative systems, further weakening law enforcement and emboldening criminal networks. The reign of <keyword id="20122630" type="General" weightage="20" keywordseo="lalu-prasad-yadav" source="keywords">Lalu Prasad Yadav</keyword>, president of the Rashtriya Janata Dal political party in Bihar, illustrates the adverse impact criminal politicians can have. Under his leadership, Bihar’s political environment devolved into what is now infamously known as "Jungle Raj," a period marked by rampant kidnappings for ransom, particularly targeting affluent individuals like doctors and schoolchildren. The researchers note that during this time, the kidnapping industry flourished as criminals enjoyed either direct or indirect support from the state. <h2><keyword id="22404298" type="General" weightage="20" keywordseo="impact-on-women" source="keywords">Impact on women</keyword> and <keyword id="19900794" type="General" weightage="20" keywordseo="economic-growth" source="keywords">economic growth</keyword></h2>Beyond the immediate rise in general crime rates, the study revealed alarming statistics regarding crimes against women. Electing criminally accused politicians was found to increase crimes against women by 12.6%. In states where such politicians held office, female labour force participation dropped by 10-11%, as women felt unsafe and chose not to engage in work outside their homes. The research also highlighted the economic toll criminal politicians take on their constituencies. Areas represented by politicians accused of serious crimes saw economic growth lag between 2.3% and 6.5% per year compared to other regions. These leaders often misappropriate public funds, divert resources for personal gain, and enable criminal enterprises, all of which stifle local development. <h2>Legal measures taken</h2>India has made strides in identifying and tracking criminally accused politicians. A landmark 2003 ruling by the <keyword id="19895345" type="General" weightage="20" keywordseo="Supreme-Court" source="keywords" meta.keywordsubtype="org" meta.entityname="Supreme Court" meta.hostid="261" meta.entityid="Supreme Court">Supreme Court</keyword> mandated that candidates for political office must disclose their criminal records, making it easier for voters and institutions to scrutinise their backgrounds. However, the law only disqualifies convicted individuals from running for office, allowing accused politicians to continue their political careers while facing serious charges. <div type="Article" hostid="261" msid="113446721" title="It&amp;#39;s not just the rhetoric — apathy and jokes could be fueling a spiral of retaliatory political violence, expert warns" mstype="2" mssubtype="0"></div>The research conducted by Prakash and his team has caught the attention of Indian courts and the Election Commission. While reform is slow, there is growing recognition that the quality of political leadership has a profound impact on societal outcomes, from crime rates to economic performance. "The quality of politicians matters," Prakash notes. "Who you elect has implications on outcomes that we care about. It could be economic growth, it could be crime against women, it could be labour force participation. These are very important outcomes for society and the economy." The findings of this research have been published in Journal of Law Economics and Organization and can be accessed <a href="https://docs.iza.org/dp15259.pdf">here</a>.

Not only does electing “criminal” politicians often lead to an increase in crime in India, it can also be terrible for the economy: study

The Indian cement industry is on track to reach 5.09 billion tonnes by 2028-29, driven by robust government investment in infrastructure. According to an IANS report originally attributed to Infomerics Ratings, this marks a compound annual growth rate (CAGR) of 4.9 per cent between 2024 and 2029. In 2022-23, the industry’s market size stood at 3.82 billion tonnes, with a total installed capacity of 622 million tonnes per annum (MTPA) in FY24 and production at 427 million tonnes. Notably, India contributes over 8 per cent to the world’s total installed cement capacity, highlighting its importance in the global market. Despite this, India’s per capita cement consumption is 260 kg—significantly below the global average of 540 kg—indicating substantial room for growth. Globally, the cement market is projected to grow at a CAGR of 4.3 per cent from 2024 to 2032. The sector’s expansion is fuelled by ambitious government initiatives, including an allocation of ₹11.11 lakh crore for infrastructure in FY25 and housing schemes like Pradhan Mantri Awas Yojana. The construction sector consumes 55 per cent of cement production, while public infrastructure projects account for the remainder. The industry also plays a critical role in employment, providing direct jobs to over one million people and creating downstream opportunities for about 20,000 individuals per million tonnes of cement produced. Private players dominate the sector, controlling 98 per cent of production capacity, while public sector units hold a mere 2 per cent. Domestic production meets almost all demand, with imports accounting for just 0.2 per cent of total production in FY23. However, exports have declined recently due to reduced global demand and rising competition. India currently has 341 cement manufacturing facilities, including 159 integrated large cement plants, 120 grinding units, and 62 mini cement plants. Cement production has seen steady growth, with a 7.1 per cent increase in September 2024 and a cumulative growth of 1.6 per cent between April and September of FY25, according to the Ministry of Commerce and Industry. This growth aligns with India’s overall industrial performance, which saw a 2 per cent rise in core industries in September, led by cement, steel, coal, and fertilisers. As India invests heavily in infrastructure and housing, the cement industry is set to play a pivotal role in supporting the nation’s economic and developmental goals. (with IANS inputs)

India's cement industry expected to grow to 5.09 billion tonnes by 2028-29 amid infrastructure push: Report

India could see a shift in foreign direct investment (FDI) trends in the second term of Donald Trump (Trump 2.0) as President of the United States, says a research report by the State Bank of India. The report highlighted that under his first term, Trump 1.0, the Trump administration made sweeping regulatory changes aimed at attracting investments back to the U.S., which impacted FDI inflows globally, including India. It added that if similar policies are reintroduced in Trump 2.0 also, it could create challenges for emerging markets like India, which rely on FDI as a significant driver of economic growth. Notably, a recent Kotak report highlighted that a complete Republican control over all arms of the US government would mean increased US earnings via corporate tax cuts, higher tariffs on imports into the US and greater US fiscal deficits. The first two could spell doom for emerging markets like India and China, since foreign investors will make a beeline for investing more money in the US markets, which will come at the cost of intense selloff in emerging markets. However, higher fiscal deficits will eventually lead to the dollar weakening after the initial euphoria dies down. "India may see shifts in foreign direct investments (FDIs) during Trump 2.0. The Trump 1.0 administration saw significant regulatory changes aimed at attracting investments back to the US," the SBI report stated. However, given that India has been gradually diversifying its sources of FDI (foreign direct investments), this trend could serve as a buffer against any potential decline. Moreover, domestic institutional investors have been stepping up big time, maintaining some balance to the massive exodus of FIIs over the past month. So far in November 2024, FIIs have withdrawn Rs 19,849 crores from the cash segment in Indian markets, while DIIs have poured in Rs 14,014.18 crores as of November 10th, 2024. "India is no longer dependent on the traditional sources of FDI inflows... unlike the recent past, FDI is now coming in many new sectors," noted the SBI report. Unlike a decade ago, when most FDI inflows came from a limited number of traditional sectors, India is now attracting investment in a wide array of industries, including renewable energy, sea transport, medical devices, and surgical appliances. Data suggests over the last 24 years, i.e., between April 2000 and June 2024, FDIs have poured in $1,013.4 billion in the Indian economy. Out of this, 67%, i.e., $689.88 billion, has come in just the last 10 years. The report added there are up to 12 emerging sectors showing strong FDI interest, which could help offset any loss of inflows in conventional sectors if there is a shift in global investment patterns under another Trump administration. In the last financial year, the top 5 sectors that have received the highest quantum of FDI inflow include the services sector (finance, banking, insurance, and business) which makes up about 16% of the inflows. This is followed computer software &amp; hardware, which constitute around 15% of total FDI flows. Trading and telecommunications follows with a share of 6% each, and Automobile Industry comes next with a 5% share. In the short term, the potential for increased U.S. tariffs, more restrictive H-1B visa policies, and a stronger dollar could bring some volatility to India's trade and investment landscape. However, in the long term, these challenges might also encourage India to expand its manufacturing capabilities, diversify export markets, and focus on becoming economically more self-reliant. Notably, India has maintained a merchandise trade surplus with the U.S. despite tariffs imposed during Trump's first term. This indicates that Indian exports have remained resilient, and there is potential to strengthen this trade relationship further by capitalizing on emerging sectors and reducing dependency on traditional industries. Suman Chowdhury, Executive Director &amp; Chief Economist, Acuité Ratings &amp; Research Limited cautions that in the medium to long term, the trade relationship with the US may see a structural improvement. "Higher tariff and trade restrictions in the US with China should translate into better opportunities for exports of manufactured goods from India", he adds.

FDIs may shift to US under Trump 2.0 but it is unlikely to severely impact FDIs inflow to India, says SBI Report

India's GDP growth is projected at 7.2 per cent in 2024-25, around 7 per cent in the next fiscal, and after that, there is a strong likelihood that the growth will revert to the 8 per cent trend, said <keyword id="19899810" type="General" weightage="20" keywordseo="Reserve-Bank-of-India" source="keywords" meta.keywordsubtype="org" meta.entityname="Reserve Bank of India" meta.hostid="261" meta.entityid="Reserve Bank of India">Reserve Bank of India</keyword> deputy governor <keyword id="20244361" type="General" weightage="20" keywordseo="Michael-Debabrata-Patra" source="keywords">Michael Debabrata Patra</keyword>. He was speaking at the New York Fed Central Banking Seminar organised by the <keyword id="20238413" type="General" weightage="20" keywordseo="Federal-Reserve-Bank" source="keywords" meta.keywordsubtype="org" meta.entityname="Federal Reserve Bank" meta.hostid="261" meta.entityid="Federal Reserve Bank">Federal Reserve Bank</keyword> here on Monday. "...I do believe with all the strength of my conviction that India's time has come," he said, and highlighted the country heads into its future with the youngest population in the world with a median age of 28 years. Unlike in many parts of the world, the working age population is growing -- every sixth working age person is an Indian. Patra said that since independence in 1947, India's growth path has undergone three structural shifts with trend growth, having risen to 7 per cent during 2002-2019. After the severe contraction during the pandemic, a new growth trajectory averaging 8 per cent seems to be forming during 2021-24, he said. India is now regarded as the fastest growing major economy in the world. Already the fifth largest economy in terms of market exchange rates, it is poised to become the third largest economy by 2030, the senior RBI official said and added the country is already the third largest economy in terms of <keyword id="20776921" type="General" weightage="20" keywordseo="purchasing-power-parity" source="keywords">purchasing power parity</keyword>. "Our projections show that India's <keyword id="21013593" type="General" weightage="20" keywordseo="real-GDP-growth" source="keywords">real GDP growth</keyword> will be 7.2 per cent in 2024-25 and around 7.0 per cent in 2025-26 in a cyclical correction to the rebound from the pandemic. Thereafter, there is a strong likelihood that India's growth will revert to the 8 per cent trend," Patra said. On inflation, he said it is projected to average 4.5 per cent in 2024-25 and 4.1 per cent in 2025-26. Consumer Price Index (CPI) based inflation fell below target during July-August but rose to 5.5 per cent in September on the back of a pickup in price momentum in some food items and adverse base effects inherent in year-on-year measurement. "Our projection indicates that these price pressures will persist in October and November before headline inflation realigns with the target from December 2024 and remains aligned in 2025-26," the deputy governor said. He also emphasised that India is emerging as a world leader in leveraging <keyword id="20181895" type="General" weightage="20" keywordseo="digital-technologies" source="keywords">digital technologies</keyword> for transformative change.

India likely to grow at 7.2% in FY25, says RBI deputy governor

India's services sector showed robust expansion in October, per the <keyword id="22267674" type="General" weightage="20" keywordseo="HSBC-India-Services-PMI" source="keywords">HSBC India Services PMI</keyword> (Purchasing Managers' Index), which rose to 58.5 last month, up from September's ten-month low of 57.7. October's figures managed to exceed even the long-run PMI average of 54.1, largely on the back of a strong sales pipeline and elevated demand. Employment, or job creation in this sector accelerated to its fastest growth rate in 26 months. Anticipating solid, sustained demand in the near term, firms added new employees at the most rapid pace in over 2 years. October also saw <keyword id="23834175" type="General" weightage="20" keywordseo="input-costs-rise" source="keywords">input costs rise</keyword> at their fastest pace in 3 months, indicating renewed demand and economic activity in the country. The ISM Services PMI, an indicator of the economic health of the US, also exceeded expectations, reaching 56.0 compared to the forecasted 53.8, suggesting strong growth within the services sector. "During October, the Indian services sector experienced strong expansions in output and consumer demand, as well as job creation, which achieved a 26-month high," said Pranjul Bhandari, Chief India Economist at HSBC. The sector saw increased business activity across multiple fronts, with export sales showing significant growth and companies reporting stronger demand from international markets including Africa, Asia, the Americas, the Middle East, and the UK. However, industry experts remain cautiously optimistic about the sector's prospects. Suman Chowdhury, Chief Economist at Acuité Ratings &amp; Research, noted that while the October recovery is promising, several factors warrant careful monitoring. “The recovery in the PMI indices in October 2024 is promising for the second half of the fiscal after the dip in several high-frequency indicators in September 2024. Industrial and service activity has expectedly received a boost from the anticipated spike in consumption demand in Q3 FY25, driven by the festivities and the marriage season," she said. Chowdhury added that it will be crucial to monitor the sustainability of these PMI indices at these elevated levels, given the reported weakness in urban demand in Q2 as flagged by FMCG companies. She also noted that potential increases in wholesale and core retail inflation, combined with higher input costs and wage pressures, could delay expected interest rate cuts. RBI governor Shaktikanta Das also noted that inflation and CPI figures for October might be elevated, pushing ahead any chances of interest rate cuts in the near future. Acuité Ratings &amp; Research maintains its GDP growth forecast at 7.0% for FY25 while acknowledging the multiple downside risks that will require close observation in the coming months.

India's Services Index jumps to 58.5 in October as employment grows the fastest in 26 months

Rupee appreciated 7 paise to 84.22 against the US dollar in morning trade on Tuesday, on a sharp rebound in domestic equities amid improved investor risk appetite. Forex traders said the <keyword id="21663515" type="General" weightage="20" keywordseo="MSCI-equity-index" source="keywords">MSCI equity index</keyword> rebalancing significantly boosted sentiment for Indian equity markets as <keyword id="19932515" type="General" weightage="20" keywordseo="foreign-institutional-investors" source="keywords">foreign institutional investors</keyword> broke a 40-session streak of net selling by purchasing Rs 9,947 crores on Monday, lending robust support to the rupee. Moreover, the win by the incumbent government in Maharashtra, further fueled investor confidence in economic stability, sparking a rally in equity markets. At the interbank foreign exchange, the rupee opened at 84.27 and moved in a tight range and touched an early high of 84.22 against the greenback, registering a gain of 7 paise over its previous close. On Monday, the rupee appreciated 12 paise to close at 84.29 against US dollar. "While Donald Trump's aggressive trade policies loom large, the rupee's outlook remains cautiously optimistic. The <keyword id="19899810" type="General" weightage="20" keywordseo="Reserve-Bank-of-India" source="keywords" meta.keywordsubtype="org" meta.entityname="Reserve Bank of India" meta.hostid="261" meta.entityid="Reserve Bank of India">Reserve Bank of India</keyword>'s projection of a GDP growth rebound to 7.6 per cent in Q3 has infused fresh confidence in India's economic trajectory. Additionally, a surge in capital inflows is likely to provide robust support," CR Forex Advisors MD Amit Pabari said. Pabari further said that the RBI's vigilant stance will be critical in managing volatility, with interventions likely at key levels to maintain stability. "Given the factors, the USDINR pair appears to face resistance around the 84.50 level, with expectations of trading within a range of 83.80 to 84.50, leaning toward a downside bias," he said. On the global front, US Treasury Secretary nominee Scott Bessent's fiscal deficit reduction agenda capped US Treasury yields, Pabari said. The dollar index, which gauges the greenback's strength against a basket of six currencies, was trading higher by 0.28 per cent at 107.11. Brent crude, the global oil benchmark, rose by 0.33 per cent to USD 73.25 per barrel in futures trade. In the domestic equity market, the 30-share equity benchmark Sensex jumped 167.76 points or 0.21 per cent to 80,277.61 points in early trade, while Nifty jumped 55.80 points or 0.23 per cent to 24,277.70 points. Foreign Institutional Investors (FIIs) turned net buyers in the capital markets on Monday, purchasing shares worth Rs 9,947.55 crore, according to exchange data. SEE ALSO:<a href="https://www.businessinsider.in/tech/mobile/news/oneplus-open-oxygenos-15-update-now-rolling-out-with-flux-themes-improved-ai-features-and-more/articleshow/115657313.cms" target="_blank"></a> <a href="https://www.businessinsider.in/tech/mobile/news/oneplus-open-oxygenos-15-update-now-rolling-out-with-flux-themes-improved-ai-features-and-more/articleshow/115657313.cms" target="_blank">OnePlus Open OxygenOS 15 update now rolling out with Flux Themes, improved AI features and more</a><a href="https://www.businessinsider.in/tech/news/microsofts-ai-powered-recall-feature-is-now-rolling-out-to-copilot-pcs/articleshow/115654136.cms" target="_blank"></a> <a href="https://www.businessinsider.in/tech/news/microsofts-ai-powered-recall-feature-is-now-rolling-out-to-copilot-pcs/articleshow/115654136.cms" target="_blank">Microsoft’s AI-powered Recall feature is now rolling out to Copilot+ PCs</a><a href="https://www.businessinsider.in/business/telecom/news/jio-airtel-and-vi-lost-nearly-11-million-subscribers-in-september-2024/articleshow/115565541.cms" target="_blank"></a> <a href="https://www.businessinsider.in/business/telecom/news/jio-airtel-and-vi-lost-nearly-11-million-subscribers-in-september-2024/articleshow/115565541.cms" target="_blank">Jio, Airtel and Vi lost nearly 11 million subscribers in September 2024</a>

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