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India’s Chief Economic Advisor (CEA), <keyword id="20690607" type="General" weightage="20" keywordseo="V-Anantha-Nageswaran" source="keywords">V Anantha Nageswaran</keyword>, remains optimistic about the nation’s economic prospects despite a slower-than-expected <keyword id="19972825" type="General" weightage="20" keywordseo="GDP-growth" source="keywords">GDP growth</keyword> in the second quarter of FY2024-25. Speaking at the Bharat @100 Summit hosted by Assocham, he said that the fundamental health of the economy remains robust, according to a report by aNI. Nageswaran highlighted several indicators demonstrating the economy’s resilience. “If you run through the checklist for the <keyword id="19948184" type="General" weightage="100" keywordseo="Indian-economy" source="keywords">Indian economy</keyword>, the health is pretty robust,” he noted, pointing to controlled levels of external debt as a share of GDP, declining non-performing assets in the banking system, and stable inflation trends. Although certain food items have caused inflationary spikes, their impact is limited within the overall consumer price index basket, he explained. The CEA praised the shift in fiscal expenditure priorities over the past seven years, with greater focus on capital investments rather than revenue spending. This reallocation, he suggested, has bolstered long-term economic stability and growth potential. India’s GDP growth for the July-September quarter was 5.4%, significantly below the Reserve Bank of India’s forecast of 7%. While this has sparked concerns among economists, Nageswaran urged against overreacting. Erratic monsoons and excessive rainfall disrupted economic activity in Q2, he explained, while global uncertainties and supply chain pressures further weighed on growth. Despite these challenges, he maintained confidence in the broader growth narrative, citing improvements in key economic metrics. For instance, India’s gross capital formation has risen from 27.3% of GDP in the second decade of the 2000s to 30.8% today. Private consumption remains steady, and exports—spanning both services and manufacturing—continue to perform well even amid challenging global conditions. Nageswaran also underscored India’s growing competitiveness in international trade. He noted that the nation’s total <keyword id="24325087" type="General" weightage="20" keywordseo="exports-as-a-percentage-of-GDP" source="keywords">exports as a percentage of GDP</keyword> now surpass China’s, showcasing its resilience and adaptability in a shifting global trade environment. However, he cautioned against reading too much into quarterly fluctuations, highlighting the impact of geopolitical developments such as trade restrictions from the US on critical minerals and rare earths, as well as policy shifts in China. These external factors, he suggested, are likely to persist and may continue influencing short-term economic trends. (with ANI inputs)

Indian economy is resilient despite Q2 challenges, says CEA Nageswaran

The country's <keyword id="20631272" type="General" weightage="20" keywordseo="merchandise-exports" source="keywords">merchandise exports</keyword> are expected to increase about USD 60-70 billion to <keyword id="20120060" type="General" weightage="20" keywordseo="USD-500-billion" source="keywords">USD 500 billion</keyword> by the end of FY25, apex exporters' body <keyword id="20516660" type="General" weightage="20" keywordseo="FIEO" source="keywords">FIEO</keyword> said on Thursday. Federation of <keyword id="702966" type="General" weightage="20" keywordseo="Indian-export" source="Orion">Indian Export</keyword> Organisations (FIEO) President <keyword id="19991031" type="General" weightage="20" keywordseo="Ashwini-Kumar" source="keywords">Ashwini Kumar</keyword> also said the country's <keyword id="20061029" type="General" weightage="20" keywordseo="services-exports" source="keywords">services exports</keyword> are also likely to reach USD 390-400 billion this fiscal. "We are looking for merchandise <keyword id="19916774" type="General" weightage="20" keywordseo="exports" source="keywords">exports</keyword> between USD 500-510 billion in 2024-25. In the services, we expect exports to be around USD 390-400 billion for the current fiscal," Kumar told reporters in New Delhi. She said <keyword id="20677957" type="General" weightage="20" keywordseo="traditional-markets" source="keywords">traditional markets</keyword> like the US and Europe will help in <keyword id="21683869" type="General" weightage="20" keywordseo="boosting-Indias-exports" source="keywords">boosting India's exports</keyword>. In 2023-24, exports had dipped over 3 per cent to USD 437 billion.

India's merchandise exports to rise 12-15%, reach USD 400 billion this fiscal: FIEO

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

<keyword id="19894886" type="General" weightage="20" keywordseo="China" source="keywords" meta.keywordsubtype="org" meta.entityname="China" meta.hostid="153" meta.entityid="China">China</keyword>, <keyword id="19895159" type="General" weightage="20" keywordseo="Russia" source="keywords" meta.keywordsubtype="org" meta.entityname="Russia" meta.hostid="153" meta.entityid="Russia">Russia</keyword>, Iraq, <keyword id="19908927" type="General" weightage="20" keywordseo="UAE" source="keywords" meta.keywordsubtype="org" meta.entityname="UAE" meta.hostid="153" meta.entityid="UAE">UAE</keyword>, <keyword id="19895045" type="General" weightage="20" keywordseo="Singapore" source="keywords" meta.keywordsubtype="org" meta.entityname="Singapore" meta.hostid="153" meta.entityid="Singapore">Singapore</keyword> are among countries where <keyword id="19895063" type="General" weightage="20" keywordseo="India" source="keywords" meta.keywordsubtype="org" meta.entityname="India" meta.hostid="153" meta.entityid="India">India</keyword>'s <keyword id="19916774" type="General" weightage="100" keywordseo="exports" source="keywords">exports</keyword> in the just-concluded <keyword id="19910979" type="General" weightage="20" keywordseo="financial-year" source="keywords">financial year</keyword> have risen substantially, though with a low base. The other countries in the Top 10 list are the UK, Australia, Saudi Arabia, the Netherlands, and South Africa. India's overall exports, merchandise and <keyword id="19896799" type="General" weightage="20" keywordseo="services" source="keywords">services</keyword> combined, in the just-concluded financial year 2023-24 are estimated to be USD 776.68 billion, largely steady on a yearly basis, commerce ministry data showed on Monday. In a break up, exports of merchandise goods declined 3.1 per cent to USD 437.06 billion, and exports of services rose 4.4 per cent to USD 339.62 billion. Coming to exports in March 2024, merchandise exports declined 0.7 per cent to USD 41.68 billion, and services exports declined 6.3 per cent to USD 28.54 billion. India's overall exports 2022-23 were worth USD 775.87 billion, a growth of over 14 per cent and almost USD 100 billion on a yearly basis. Coming to <keyword id="19933566" type="General" weightage="20" keywordseo="imports" source="keywords">imports</keyword>, India's overall imports in 2023-24 declined 4.8 per cent to USD 854.80 billion. In March 2024, merchandise and services exports declined 5.41 per cent and 2.46 per cent, respectively. Among various steps the government took was to launch a Production Linked Incentive (PLI) scheme in varied sectors, including electronic goods, to make Indian manufacturers globally competitive, attract investments, enhance exports, integrate India into the global supply chain and reduce dependency on imports. These seemed to have reaped dividends.

India's exports to China, UAE, Russia, Singapore rose in 2023-24

Union Minister of Road Transport Highways, <keyword id="19897455" type="General" weightage="20" keywordseo="nitin-gadkari" source="keywords">Nitin Gadkari</keyword> on Tuesday said that <keyword id="19895063" type="General" weightage="20" keywordseo="india" source="keywords">India</keyword> will soon be in a position to export <keyword id="459398" type="General" weightage="20" keywordseo="Lithium-ion-batteries" source="Orion">lithium-ion batteries</keyword>. Speaking at the Society of Indian Automobile Manufacturers (SIAM's) 64th convention in New Delhi, the Union Minister said," I'm confident that we'll be in a position to export <keyword id="1607661" type="General" weightage="20" keywordseo="Lithium-ion" source="Orion">lithium-ion</keyword> batteries to the different parts of the world. At the same time, the research is going on. The aluminium, ironic oil, and different types of chemistry. I feel that it is also a good thing and there is a huge market for that." <keyword id="19934966" type="General" weightage="20" keywordseo="gadkari" source="keywords">Gadkari</keyword> said with government initiatives and incentives many Indian companies are venturing into lithium-ion battery manufacturing. "The good thing is that lithium-ion manufacturing is now <keyword id="19898586" type="General" weightage="20" keywordseo="adani" source="keywords">Adani</keyword>, <keyword id="19904884" type="General" weightage="20" keywordseo="tata" source="keywords">Tata</keyword>, Maruti, LG, and Samsung. They are all coming in this business. Because...Take the example of semiconductors the government adopted is such a good policy because of that after 2 three years we will be the number one in the manufacturing of the semiconductors in the world," he said. Going further, Gadkari stated that India's EV market is expected to grow to one crore units of annual sales by 2030 and will create five crore jobs. Indian EV market has the potential to become Rs 20 lack crore by 2030. Gadkari asked the industry to focus on quality, better designs, and use the latest technology if they want to compete in the segment and boost exports. Consumers are now conscious of quality. The government is working on establishing a testing agency for better research and testing of vehicle manufacturing. CIIT Training Institute will be established in Pune with a sanctioned cost of Rs 450 crore. "Regarding the Testing Agency for Better Research and Development and Development world-class Testing Agency in CIIT Pune we have decided to start a new venture there with international standards and having all types of the facility which are available in the world and my department has sanctioned 450 Cor or that already DPR is in process and next three months we will try to start this project and that is to be very important for the industry where we will get maximum service and maximum to all the industry," he said. The Union Minister requested the automobile industry to support and cooperate with the government for India's scrappage policy. Gadkari asked the industry to promote and come up with better incentives for the scrappage of old vehicles. The vehicle manufacturers of the USA and Europe have increased their sales by 9 to 12 per cent by promoting scrappage policy. He also thanked the industry for the decision to provide a 3 percent discount for vehicle owners for scrapping their vehicles, adding that the cost of components can be reduced by 20-40 per cent due to the move. Gadkari urged the industry to establish their own scrappage centres. In his remarks, Gadkari said, "The automobile industry plays a pivotal role in realizing the Prime Minister's vision of transforming India into a 5 trillion-dollar economy and elevating it to the third largest economy globally. Our ambition is to extend it as the number one auto manufacturing industry worldwide. As we target a carbon-neutral status by 2070, innovation and sustainable practices in the auto sector are crucial." SEE ALSO: <a href="https://www.businessinsider.in/business/auto/news/ather-energy-looks-to-raise-3100-crore-files-ipo-papers-with-sebi/articleshow/113214971.cms">Ather Energy looks to raise ₹3,100 crore, files IPO papers with SEBI</a> <a href="https://www.businessinsider.in/tech/mobile/news/iphone-16-pro-iphone-16-pro-max-india-price-specifications/articleshow/113204340.cms">iPhone 16 Pro and iPhone 16 Pro Max with bigger displays, A18 Pro chipset launched starting at ₹1,19,900</a> <a href="https://www.businessinsider.in/tech/mobile/news/apple-iphone-16-iphone-16-plus-price-specs/articleshow/113203568.cms">iPhone 16, iPhone 16 Plus with A18 chipset launched starting at ₹79,900</a>

India will soon be in a position to export Lithium-ion batteries: Nitin Gadkari

Despite geopolitical tensions in <keyword id="19897269" type="General" weightage="20" keywordseo="europe" source="keywords">Europe</keyword> and the <keyword id="19904316" type="General" weightage="20" keywordseo="middle-east" source="keywords">Middle East</keyword>, <keyword id="19895063" type="General" weightage="20" keywordseo="india" source="keywords">India</keyword>'s <keyword id="20631272" type="General" weightage="20" keywordseo="merchandise-exports" source="keywords">merchandise exports</keyword> grew by 5.8% to $109.96 billion compared to $103.9 billion in the same period last year, according to a CRISIL report. The report states that the deceleration in the growth momentum of exports in June compared to May was largely due to an 18.2% contraction in oil exports. The growth momentum slowed down in June, with merchandise exports increasing by only 2.6% year-on-year, down from 9.1% in May. Non-oil exports continued to maintain steady growth, rising by 7.7% in June, almost in line with the 7.8% growth recorded in May. Services exports exhibited a strong performance in June, contributing positively to the overall trade scenario. The positive aspect is that merchandise imports grew at a slower pace of 5% year-on-year in June, down from 7.7% in May. However, core imports, excluding oil and gold, surged by 7.1%, increasing from the 0.8% growth in the previous month. This spike in core imports was partially driven by a low base effect from the previous year. Despite the positive growth in exports, the <keyword id="20201391" type="General" weightage="20" keywordseo="trade-deficit" source="keywords">trade deficit</keyword> widened to $21 billion in June from $19.2 billion in the same month last year. For the first quarter, cumulative imports rose by 7.7% to $172.4 billion from $160 billion, resulting in a trade deficit of $62.44 billion, up from $56.1 billion. This widening deficit was mainly due to a higher oil trade deficit, while the non-oil trade deficit narrowed. Services exports were a bright spot, increasing by 10.2% year-on-year to $29.76 billion in May. On the other hand, service import growth moderated to 5.4%, down from 19.1% in the previous month. Consequently, the services trade surplus expanded to $13.02 billion, up from $11.1 billion in May last year. Oil exports fell by 18.3% year-on-year and 18.5% month-on-month in June, despite stable international prices. This suggests a reduction in export volumes, with exports falling to $5.5 billion from $6.8 billion in June last year and the previous month. Oil imports increased by 19.6% in June compared to 28% in May, driven by domestic demand and local refineries operating above capacity. Sectors such as drugs and pharmaceuticals, engineering goods, organic and inorganic chemicals, and ready-made garments showed positive growth. However, pharmaceuticals (9.9% vs. 10.5%) and ready-made garments (3.7% vs. 9.8%) saw slower growth compared to May. Gems and jewellery exports continued to decline, marking the seventh consecutive month of negative growth at -1.4% year-on-year. Growth in carpets, handloom products, man-made products, plastics, and linoleum was positive but slower than the previous month. Handmade carpets (-16.6% vs. 20.6%), jute manufacturing (-11.1% vs. -5.2%), and leather products (-2.2% vs -2.1%) recorded contractions. Cashew exports have been declining since 2018, with only sporadic months of positive growth. In June, cashew exports fell by 7.3%, an improvement from the 25.8% decline in May. Coffee (70% vs. 64.2%), fruits and vegetables (7% vs. 20.8%), rice (1% vs. 2.8%), spices (9.8%vs. 20.3%), tea (3.2% vs. 19.6%), and tobacco (37.7% vs. 58.4%) saw slower growth compared to May. Marine products (-7.7% vs. -3.9%) and meat, dairy, and poultry products (-13.9% vs. 22.9%) also experienced a decline. Increases were noted in electronic goods (15.9% vs. 6.7%), fruits and vegetables (22.6% vs. 3%), non-ferrous metals (47.6% vs. 1.1%), project goods (31.4% vs. -44.3%), textiles and yarn fabric made-up articles (23.8% vs. -1.1%), and wood products (16.2% vs. -7.2%). The fiscal year has started positively with steady merchandise export growth in the first quarter. Encouragingly, multilateral organisations have forecasted better year-on-year trade growth. The Indian government's focus on foreign trade agreements (FTAs) is expected to further boost trade. However, the persistent growth in imports surpassing exports is a concern, widening the trade deficit. The recent US tariff hikes on Chinese imports could lead to potential dumping by China in the Asian market, including India, which requires close monitoring. Despite these challenges, the expected moderation in domestic growth may help contain import growth and the trade deficit. The service trade surplus and robust remittance flows are positive indicators that the current account will remain stable.

Indian exports show resilience amid global challenges in first quarter, says CRISIL report

As <keyword id="19895063" type="General" weightage="20" keywordseo="India" source="keywords">India</keyword>'s <keyword id="19916774" type="General" weightage="100" keywordseo="exports" source="keywords">exports</keyword> in the first quarter of 2024-25 (April-June) crossed the $200 billion mark, the government has expressed its optimism about reaching its full-year target of $800 billion. "We are quite optimistic and it gives us optimism that we'd be crossing our <keyword id="19944038" type="General" weightage="20" keywordseo="USD" source="keywords">USD</keyword> 800 billion of trade this year," Commerce Secretary Sunil Barthwal said on Monday while releasing India's trade data for June. India's overall exports, merchandise and services combined in the month of June were to the tune of $65.47 billion, a 5.4% rise on a yearly basis, commerce ministry data showed. Same month last year it was at $62.12 billion. In break up, <keyword id="22419320" type="General" weightage="20" keywordseo="exports-of-merchandise-goods" source="Orion">exports of merchandise goods</keyword> rose from $34.32 billion to $35.20 billion, and exports of services rose from $27.79 to $30.27 billion. In May, merchandise and services exports combined were to the tune of $68.29 billion, a 10.2% rise on a yearly basis. The country's <keyword id="19933566" type="General" weightage="20" keywordseo="imports" source="keywords">imports</keyword> too increased year-on-year in June, data showed today. The same was the case in May. The overall imports, both merchandise and services combined, increased from $69.12 billion to $73.47 billion, a rise of about 6.3%, in June. In the recently concluded financial year 2023-24, India registered record exports at $778 billion. In 2022-23, the country exported goods and services combined at $776.3 billion. In break up, services exports rose from $325.3 billion to $341.1 billion in 2023-24. Merchandise exports though marginally declined from $451.1 billion to $437.1 billion. Among various steps the government took was to launch a <keyword id="8870884" type="General" weightage="20" keywordseo="Production-Linked-Incentive" source="Orion">Production Linked Incentive</keyword> (PLI) scheme in varied sectors, including electronic goods, to make Indian manufacturers globally competitive, attract investments, enhance exports, integrate India into the global supply chain and reduce dependency on imports. These seemed to have reaped dividends. China, Russia, Iraq, <keyword id="19908927" type="General" weightage="20" keywordseo="uae" source="keywords">UAE</keyword>, and Singapore were among the countries where India's exports in the just-concluded financial year have risen substantially, though with a low base. The other countries in the Top 10 list are the UK, Australia, Saudi Arabia, the Netherlands, and <keyword id="19899437" type="General" weightage="20" keywordseo="south-africa" source="keywords">South Africa</keyword>. Overall imports declined from $898.0 billion in 2022-23 to $853.8 billion. Both merchandise and services exports declined during the financial year. Overall trade deficit significantly improved from $121.6 billion in 2022-23 to $75.6 billion in 2023-24.

India's Apr-Jun quarter exports cross $200 bln, government optimistic of reaching  $800 bln annual target

Despite unfavourable economic conditions in major markets such as the European Union (EU), the US, and West Asian nations, Indian <keyword id="21353395" type="General" weightage="100" keywordseo="textile-exports" source="keywords">textile exports</keyword> grew by 9.59 per cent compared to the previous year in May 2024, the Confederation of <keyword id="22064995" type="General" weightage="20" keywordseo="Indian-textile" source="keywords">Indian Textile</keyword> Industry (CITI) said in a report. Simultaneously, <keyword id="22064997" type="General" weightage="20" keywordseo="Indian-apparel-exports" source="keywords">Indian apparel exports</keyword> saw a growth of 9.84 per cent during the same period. The CITI in its report highlighted that the cumulative exports of textiles and apparel during May 2024 registered a growth of 9.70 per cent over May last year. The country's overall exports for May 2024 surged to USD 68.29 billion. This was a substantial year-on-year increase of 10.2 per cent, according to data released by the Commerce Ministry on June 14. The analysis noted that during Apr -May' 24, Indian textile exports registered a growth of 6.04 per cent over the previous year, while apparel exports registered a growth of 4.46 per cent during the same time period. The cumulative exports of textiles and apparel during April-May 2024 saw a surge of 5.34 per cent as compared to the same period last year. The recently released export data revealed that sectors such as electronic goods, drugs and pharmaceuticals, organic and inorganic chemicals, engineering goods, petroleum products, plastics &amp; linoleum, cotton yarn/fabs made-ups ( textiles manufactured), handloom products, etc., man-made yarn/fabs./made-ups, handloom products etc. performed well in the exports from the country. Other merchandise products, such as meat, dairy and poultry products, mica, coal and other ores, minerals including processed minerals, RMG of all textiles, tea, coffee, rice, tobacco, carpet and handicrafts, oil seeds; and fruits and vegetables, did well too. On Friday, AshwKumar, President of the Federation of Indian Export Organisations (FIEO), highlighted that a positive trajectory was seen in May 2024, driven by robust order bookings. Among the top ten export markets for India were the US, UAE, Netherlands, UK, China, Singapore, Saudi Arabia, Bangladesh, Germany and France. Considerably, in these markets, the exports registered a double-digit growth rate. Breaking down export data released yesterday, the merchandise exports witnessed a 9.1 per cent rise to USD 38.13 billion, while service exports climbed by 11.7 per cent, reaching USD 30.16 billion. SEE ALSO:<a href="https://www.businessinsider.in/stock-market/news/hyundai-motor-india-files-draft-papers-with-sebi-for-indias-biggest-ipo/articleshow/111014559.cms" target="_blank"></a> <a href="https://www.businessinsider.in/stock-market/news/hyundai-motor-india-files-draft-papers-with-sebi-for-indias-biggest-ipo/articleshow/111014559.cms" target="_blank">Hyundai Motor India files draft papers with SEBI for India’s biggest IPO</a><a href="https://www.businessinsider.in/tech/mobile/news/tata-group-reportedly-looking-to-acquire-a-majority-stake-in-vivo-india/articleshow/110987274.cms" target="_blank"></a> <a href="https://www.businessinsider.in/tech/mobile/news/tata-group-reportedly-looking-to-acquire-a-majority-stake-in-vivo-india/articleshow/110987274.cms" target="_blank">Tata Group reportedly looking to acquire a majority stake in Vivo India</a><a href="https://www.businessinsider.in/sports/webstories/kkr-beats-mi-in-terms-of-brand-value-csk-and-rcb-continue-to-lead/slidelist/110963926.cms" target="_blank"></a> <a href="https://www.businessinsider.in/sports/webstories/kkr-beats-mi-in-terms-of-brand-value-csk-and-rcb-continue-to-lead/slidelist/110963926.cms" target="_blank">KKR beats MI in terms of brand value, CSK and RCB continue to lead</a>

Indian textile exports surge by 9.59% in May despite global economic challenges

<keyword id="19956758" type="General" weightage="20" keywordseo="finance-minister" source="keywords">Finance Minister</keyword> <keyword id="19916618" type="General" weightage="20" keywordseo="nirmala-sitharaman" source="keywords">Nirmala Sitharaman</keyword> on Tuesday announced a <keyword id="20274081" type="General" weightage="20" keywordseo="credit-guarantee-scheme" source="keywords">credit guarantee scheme</keyword> for facilitating <keyword id="22087606" type="General" weightage="20" keywordseo="term-loans" source="keywords">term loans</keyword> for <keyword id="19910977" type="General" weightage="20" keywordseo="MSMEs" source="keywords">MSMEs</keyword> to purchase machinery and equipment without collateral or third-party guarantee. In her Budget speech in the Lok Sabha, she said the Budget provides special attention to micro, small &amp; medium enterprises (MSMEs) and manufacturing, particularly labour-intensive units. "We have formulated a package, covering financing, <keyword id="20961204" type="General" weightage="20" keywordseo="regulatory-changes" source="keywords">regulatory changes</keyword> and technology support for MSMEs to help them grow and also compete globally, as mentioned in the interim budget," she said. The credit guarantee scheme for MSMEs in manufacturing will operate on the pooling of credit risks of such entities. "A separately constituted self-financing guarantee fund will provide, to each applicant, guarantee cover up to Rs 100 crore, while the loan amount may be larger," the minister announced in the Budget. The borrower will have to provide an upfront guarantee fee and an annual guarantee fee on the reduced loan balance. She also announced a new mechanism for facilitating the continuation of bank credit to MSMEs during their stress period. Sitharaman said that while being in the 'special mention account' (SMA) stage for reasons beyond their control, MSMEs need credit to continue their business and avoid getting into the NPA stage. "Credit availability will be supported through a guarantee from a government-promoted fund," she added. In another move to help MSMEs, the minister announced a new assessment model for credit to the sector. She said public sector banks will build their in-house capability to assess MSMEs for credit, instead of relying on external assessment. "They will also take a lead in developing or getting developed a new credit assessment model, based on the scoring of digital footprints of MSMEs in the economy," she added. The new assessment model, she said, is expected to be a significant improvement over the traditional assessment of credit eligibility based only on asset or turnover criteria. It will also cover MSMEs without a formal accounting system. Mohammad Athar (Saif), partner and leader capital projects and infrastructure development, PwC India, said the credit guarantee scheme and <keyword id="22514802" type="General" weightage="20" keywordseo="e-commerce-export-hubs" source="keywords">e-commerce export hubs</keyword> for MSMEs will enable demand creation and boost India's aspiration of achieving USD 1 trillion in exports by 2030, driven by MSMEs. Sitharaman also announced that to enable MSMEs and traditional artisans to sell their products in international markets, e-commerce export hubs will be set up in public-private-partnership (PPP) mode. These hubs, under a seamless regulatory and logistic framework, will facilitate trade and export-related services under one roof. Vivek Jalan, Partner, Tax Connect, a multi-disciplinary firm, said, as requested by the trade and industry bodies and laid down by the Economic Survey, for MSME businesses, the compliance burden is also sought to be relaxed. Litigations will be reduced in the new <keyword id="22517694" type="General" weightage="20" keywordseo="Vivaad-Se-Vishwas-Scheme" source="keywords">Vivaad Se Vishwas Scheme</keyword>, he added. Rumki Majumdar, Economist, Deloitte India, said the credit guarantee schemes for MSMEs in the <keyword id="19955573" type="General" weightage="20" keywordseo="manufacturing-sector" source="keywords">manufacturing sector</keyword>, facilitating term loans for the purchase of machinery, and formulating packages to finance technology support to them will go a long way to providing access to finance and increasing investments, which have been key challenges in the sector.

FM announces credit guarantee scheme, other measures for MSMEs

Boost in domestic <keyword id="19914449" type="General" weightage="20" keywordseo="manufacturing" source="keywords">manufacturing</keyword> due to PLI (production linked incentive) schemes and increase in <keyword id="19916774" type="General" weightage="20" keywordseo="exports" source="keywords">exports</keyword> on account of free trade agreements are expected to bridge the country's <keyword id="20201391" type="General" weightage="20" keywordseo="trade-deficit" source="keywords">trade deficit</keyword> further, <keyword id="20613906" type="General" weightage="100" keywordseo="Economic-Survey" source="keywords">Economic Survey</keyword> said on Monday. However, it said that fluctuations in <keyword id="19936629" type="General" weightage="20" keywordseo="commodity-prices" source="keywords">commodity prices</keyword>, especially for critical imports like oil, metals, and agricultural products, can impact India's trade balance and inflation levels. The Survey said that though ongoing geopolitical headwinds impacted India's merchandise exports, lowering international commodity prices ensured a lower trade deficit in FY24 than in FY23. The country's merchandise trade deficit narrowed to USD 240 billion in 2023-24 from USD 265 billion in 2022-23. It added that changes in trade policies by major trading partners or geopolitical developments can affect India's export opportunities and market access. "In the coming years, India's trade deficit is expected to decline further as the <keyword id="19981334" type="General" weightage="20" keywordseo="PLI-scheme" source="keywords">PLI scheme</keyword> is expanded and India creates a globally competitive manufacturing base in several product categories," the Survey said. It added that the recently signed FTAs (free trade agreements) are expected to increase the <keyword id="22374533" type="General" weightage="20" keywordseo="global-market-share" source="keywords">global market share</keyword> of the country's exports. The PLI scheme for sectors like mobile manufacturing, information technology (IT) hardware, pharmaceutical, telecommunications, and food product are helping to increase manufacturing and cut imports. India has implemented <keyword id="20000557" type="General" weightage="20" keywordseo="FTA" source="keywords">FTA</keyword> with Mauritius, Australia and the UAE. It added that a narrowing merchandise trade deficit and rising service exports have improved the CAD (<keyword id="20054874" type="General" weightage="20" keywordseo="current-account-deficit" source="keywords">current account deficit</keyword>), ending with a surplus of 0.6 per cent of GDP in Q4 of FY24. However, the risks to the performance of India's external sector are on the downside due to the persistence of current <keyword id="19955176" type="General" weightage="20" keywordseo="geopolitical-tensions" source="keywords">geopolitical tensions</keyword> and policy uncertainty, it said. Some of the challenges listed by the survey includes fall in demand from major trading partners like the US, rise in trade cost, and volatility in commodity prices. Attacks on shipping in the Red Sea and drought in the Panama Canal have resulted in trade flows being re-routed, increasing journey time and costs. India's merchandise trade relies heavily on maritime trade, so disturbances in major shipping routes can impact its economy. "It is critical to explore what these changing paradigms mean for India. Policies need to be a mix that straddles security concerns with economic considerations," the survey said, adding India's push towards manufacturing in complex and niche sectors through schemes such as PLI and Make in India aims to balance these goals. Further, the survey emphasised on the need to focus on improving India's competitiveness in many product areas. For example, it said, India has tremendous potential in becoming a large global exporter in agricultural commodities. Fostering stronger regional trade ties and adding more markets for Indian goods will help mitigate global demand fluctuations. "In an era when global economic growth is likely to be buffeted by geopolitical tensions and protectionism, growing India's exports of goods and services will be a stiffer challenge than before," it cautioned. Commenting on this, Rumki Majumdar, Economist, Deloitte India, said that despite global uncertainties, India's exports are recording positive growth rates. "That shows the resilience of our exports amidst global uncertainties," she said, adding, "by transforming our export basket and focusing on higher margins and value addition across various sectors, India will easily achieve its ambition of USD 2 trillion in exports by 2030-31."

India's trade deficit expected to decline further: Economic Survey

The <keyword id="19899808" type="General" weightage="20" keywordseo="RBI" source="keywords">RBI</keyword> on Tuesday proposed rationalising <keyword id="19909672" type="General" weightage="20" keywordseo="regulations" source="keywords">regulations</keyword> that cover <keyword id="19986776" type="General" weightage="100" keywordseo="export" source="keywords">export</keyword> and <keyword id="20040382" type="General" weightage="20" keywordseo="import" source="keywords">import</keyword> <keyword id="19971375" type="General" weightage="20" keywordseo="transactions" source="keywords">transactions</keyword> with an aim to promote ease of doing <keyword id="19933715" type="General" weightage="20" keywordseo="business" source="keywords">business</keyword> and empower banks to provide more efficient service to their <keyword id="19986712" type="General" weightage="20" keywordseo="foreign-exchange" source="keywords">foreign exchange</keyword> customers. The central bank has issued 'Regulation of Foreign Trade under Foreign Exchange Management Act (<keyword id="19940710" type="General" weightage="20" keywordseo="fema" source="keywords">FEMA</keyword>), 1999 - <keyword id="20399690" type="General" weightage="20" keywordseo="draft" source="keywords">Draft</keyword> Regulations and Directions' in this regard. As per the draft, every exporter should furnish to the specified authority a declaration specifying the amount representing the full export value of the goods or services. "The amount representing the full export value of goods and services shall be realised and repatriated to India within nine months from the date of shipment for goods and date of invoice for services," it said. The draft also proposes that an exporter who has not realised the full value of export within the time specified may be caution listed by the authorised dealer. An exporter who has been caution listed can undertake export only against receipt of advance payment in full or against an irrecoverable letter of credit, to the satisfaction of the authorised dealer. According to the draft, no advance remittance for the import of gold and silver should be permitted unless specifically approved by 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="153" meta.entityid="Reserve Bank of India">Reserve Bank of India</keyword>. The RBI said the proposed regulations are intended to promote ease of doing business, especially for small exporters and importers. They are also intended to empower Authorised Dealer banks to provide quicker and more efficient service to their foreign exchange customers, the central bank said. The RBI has sought comments on the draft regulations under FEMA and directions to authorised dealer banks by September 1.

RBI proposes rationalising regulations on export, import transactions

The <keyword id="19900449" type="General" weightage="20" keywordseo="government" source="keywords">government</keyword> may relax the requirement of making payments to <keyword id="19910977" type="General" weightage="100" keywordseo="MSMEs" source="keywords">MSMEs</keyword> within 45 days of buying goods and services, to prevent large corporates from looking at other sourcing avenues, sources have noted. An announcement to this effect could be made in the Budget likely to be presented on July 23. The government is considering suggestions regarding changes to Section 43B(h) of the <keyword id="19936187" type="General" weightage="20" keywordseo="Income-Tax-Act" source="keywords">Income Tax Act</keyword> made by MSMEs during pre-budget consultations, sources said. The government, in last year's budget added a new clause under Section 43B of the Income Tax Act to address the challenge of delayed payments faced by MSMEs in the country. According to Section 43B(h) of the Income Tax Act, introduced through the Finance Act 2023, if a larger company does not pay an <keyword id="19990810" type="General" weightage="20" keywordseo="MSME" source="keywords" meta.keywordsubtype="org" meta.entityname="MSME" meta.hostid="261" meta.entityid="MSME">MSME</keyword> on time -- within 45 days in case of written agreement -- it cannot deduct that expense from its taxable income, leading to potentially higher taxes. MSMEs fear that due to this provision, large buyers could cold-shoulder MSME suppliers and start buying either from those MSMEs that are not registered with Udyam or from non-MSMEs. The amendment was brought in for MSMEs to get timely payment, but a lot of concerns were raised by them, sources said, adding that they feared that large corporate, in bid to safeguard their interest, can shift their sourcing requirement to bigger firms or ask their vendors to give up their MSME registration to do business with them. Earlier in May, Finance Minister <keyword id="19916618" type="General" weightage="20" keywordseo="nirmala-sitharaman" source="keywords">Nirmala Sitharaman</keyword> had said the changes, if any, to the rule will have to be done in the full Budget in July under the new government as per the representations submitted by MSMEs. The MSME sector accounts for 30% of the country's gross domestic product (GDP) and the second largest employer after agriculture. The share of <keyword id="35090" type="General" weightage="20" keywordseo="Exports" source="Orion">exports</keyword> from products specified for MSMEs constituted 45.56 % of the country's total exports.

Govt may relax 45-day payment rule for MSMEs in Budget 2024

India has signed mutual recognition agreements (MRAs) with <keyword id="551085" type="General" weightage="20" keywordseo="customs-authorities" source="Orion">customs authorities</keyword> of seven nations and is actively pursuing negotiations for such pacts with other countries, a top official said. The Central Board of Indirect Taxes and Customs and the Federal Customs Service, Russia, this month signed the Authorised Economic Operator (AEO) MRA to provide reciprocal benefits to accredited and trusted exporters of both signatories in the clearance of goods by the customs authorities of the importing country. "The CBIC and the Federal Customs Service, Russia signed the <keyword id="21760232" type="General" weightage="20" keywordseo="Authorized-Economic-Operator" source="keywords">Authorized Economic Operator</keyword> (AEO) Mutual Recognition Agreement, which is a major <keyword id="20467509" type="General" weightage="20" keywordseo="trade-facilitation" source="keywords">trade facilitation</keyword> boost for Indian importers and exporters. While this is the 7th MRA that has been signed by <keyword id="20001024" type="General" weightage="20" keywordseo="indian-customs" source="keywords">Indian Customs</keyword>, negotiations are being actively pursued with many other Customs' administrations," CBIC Chairman <keyword id="159142" type="General" weightage="20" keywordseo="Sanjay-Kumar-Agarwal" source="Orion">Sanjay Kumar Agarwal</keyword> said in a communication to field formation. The AEO programme enables Customs administration to identify safe and compliant exporters and importers and to provide them with better facilitation. AEO MRA is already in place for seven countries, including Korea, UAE, Hong Kong and Taiwan.

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