Indian Economy : News,Discussions & Updates
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RBI has announced Quantitative Easing of around 3.7 Lakh Crores. Government has announced 1.7 lakh crores, 15 thousands crores are for equipment, RBI has also spent some $20 Billions in defending the Rupee.
Total commitment so far from Indian government is around $94 Billion dollars, and a lot more will be needed. Thankfully we have some $500 billions as reserves that will help us mitigate this crisis.
Total commitment so far from Indian government is around $94 Billion dollars, and a lot more will be needed. Thankfully we have some $500 billions as reserves that will help us mitigate this crisis.
India to grow fastest among G20 economies despite Coronavirus; these countries to be worst-hit
"The global economic picture is looking bleak, with recessions in almost every developed economy across the world. We assume that there will be a recovery in the second half of the year," said Agathe Demarais, Global Forecasting Director, EIU.
X
India’s growth projection stood on the top while others are set to dive deep into recession except for two other countries – China and Indonesia.
Even as the Indian economy is likely to be battered by the Coronavirus pandemic this year, it is still likely to be better off than all other G20 countries. The Economist Intelligence Unit (EIU) in its post-Covid-19-outbreak revised growth forecast for G20 countries in 2020 downgraded projected FY21 GDP growth of India to 2.1 per cent from 6 per cent before the outbreak. While this looked like a free fall but when compared to other G20 countries, India’s growth projection stood on the top while others are set to dive deep into recession except for two other countries – China and Indonesia.
While India will be the fastest-growing this year at 2.1 per cent, China and Indonesia will grow at 1 per cent in 2020, EIU forecast said. “The global economic picture is looking bleak, with recessions in almost every developed economy across the world. We assume that there will be a recovery in the second half of the year, but downside risks to this baseline scenario are extremely high, as the emergence of second, or third waves of the epidemic would sink growth further,” said Agathe Demarais, Global Forecasting Director, EIU in the forecast update on its website.
The biggest contraction in the GDP growth this year among the rest 17 of the G20 countries would be suffered by Italy (-7 per cent), Germany (-6.8 per cent) and Argentina (-6.7 per cent) followed by Brazil (-5.5 per cent), Mexico (-5.4 per cent), France (-5 per cent), Saudi Arabia (-5 per cent), and UK (-5 per cent). The US economy would contract to -2.2 per cent in 2020. Demarais said the uncertainty will remain high since it is “hard to see an exit strategy from the lockdowns.” Moreover, many countries will be staring at a debt crisis due to the “combination of lower fiscal revenues, and higher public spending,” he said.
Rating agencies have also cut India’s growth forecast in their projections. While Moody’s Investor Service cut the forecast from 5.3 per cent to 2.5 per cent for 2020, Fitch Ratings had slashed the growth from 5.6 per cent to 5.1 per cent for FY21, PTI reported. On the other hand, UBS Securities expected the GDP to grow by 4 per cent in FY21 down from 5.1 per cent forecast.
India to grow fastest among G20 economies despite Coronavirus; these countries to be worst-hit
"The global economic picture is looking bleak, with recessions in almost every developed economy across the world. We assume that there will be a recovery in the second half of the year," said Agathe Demarais, Global Forecasting Director, EIU.
X
India’s growth projection stood on the top while others are set to dive deep into recession except for two other countries – China and Indonesia.
Even as the Indian economy is likely to be battered by the Coronavirus pandemic this year, it is still likely to be better off than all other G20 countries. The Economist Intelligence Unit (EIU) in its post-Covid-19-outbreak revised growth forecast for G20 countries in 2020 downgraded projected FY21 GDP growth of India to 2.1 per cent from 6 per cent before the outbreak. While this looked like a free fall but when compared to other G20 countries, India’s growth projection stood on the top while others are set to dive deep into recession except for two other countries – China and Indonesia.
While India will be the fastest-growing this year at 2.1 per cent, China and Indonesia will grow at 1 per cent in 2020, EIU forecast said. “The global economic picture is looking bleak, with recessions in almost every developed economy across the world. We assume that there will be a recovery in the second half of the year, but downside risks to this baseline scenario are extremely high, as the emergence of second, or third waves of the epidemic would sink growth further,” said Agathe Demarais, Global Forecasting Director, EIU in the forecast update on its website.
The biggest contraction in the GDP growth this year among the rest 17 of the G20 countries would be suffered by Italy (-7 per cent), Germany (-6.8 per cent) and Argentina (-6.7 per cent) followed by Brazil (-5.5 per cent), Mexico (-5.4 per cent), France (-5 per cent), Saudi Arabia (-5 per cent), and UK (-5 per cent). The US economy would contract to -2.2 per cent in 2020. Demarais said the uncertainty will remain high since it is “hard to see an exit strategy from the lockdowns.” Moreover, many countries will be staring at a debt crisis due to the “combination of lower fiscal revenues, and higher public spending,” he said.
Rating agencies have also cut India’s growth forecast in their projections. While Moody’s Investor Service cut the forecast from 5.3 per cent to 2.5 per cent for 2020, Fitch Ratings had slashed the growth from 5.6 per cent to 5.1 per cent for FY21, PTI reported. On the other hand, UBS Securities expected the GDP to grow by 4 per cent in FY21 down from 5.1 per cent forecast.
India to grow fastest among G20 economies despite Coronavirus; these countries to be worst-hit
china growing at 1% is going to be difficult. there has been a lot of coverup by china so far - its difficult to cover that up as the year ends
Core sector output improves for February, records 5.5% growth
The improvement in the index was led by Electricity, coal, cement and refinery products.
ET Online | Last Updated: Mar 31, 2020, 05.25 PM IST
Core sector industries comprise 40.27% of IIP.(File Photo)
Core sector output improved for the month of February clocking growth of 5.5 per cent compared to just 1.4 per cent in January.
The improvement in the index was led by Electricity, coal, cement and refinery products.
The eight core sector industries comprise 40.27 per cent of the Index of Industrial Production.
Electricity production grew at 11 per cent while coal output rose by 10.3 per cent over the same period last year.
For the April-February period, the growth rate in the eight core sector industries was recorded at just one per cent compared to 4.2 per cent in the same period last year.
Core sector output improves for February, records 5.5% growth
The improvement in the index was led by Electricity, coal, cement and refinery products.
ET Online | Last Updated: Mar 31, 2020, 05.25 PM IST
Core sector industries comprise 40.27% of IIP.(File Photo)
Core sector output improved for the month of February clocking growth of 5.5 per cent compared to just 1.4 per cent in January.
The improvement in the index was led by Electricity, coal, cement and refinery products.
The eight core sector industries comprise 40.27 per cent of the Index of Industrial Production.
Electricity production grew at 11 per cent while coal output rose by 10.3 per cent over the same period last year.
For the April-February period, the growth rate in the eight core sector industries was recorded at just one per cent compared to 4.2 per cent in the same period last year.
Core sector output improves for February, records 5.5% growth
Fed gives RBI what it wants: dollar swap facility
Updated: 01 Apr 2020, 12:56 AM IST
By Dhirendra Tripathi
NEW DELHI : The US Federal Reserve on Tuesday gave the Reserve Bank of India (RBI), as well as all other central banks, currency swap facility to help them fund their dollar requirements. The facility was so far extended to select central banks that did not include the RBI or the People’s Bank of China.
The Fed’s move is a very positive and accommodative step and will help stabilize markets, reduce volatility, and ease pressure on currencies such as the rupee, said analysts
RBI had recently, albeit informally, requested the Fed to be given this facility, said a person aware of the development. The facility, effective 6 April, will be in place for at least six months, the Fed said.
The RBI did not respond to emailed queries if it had recently sought this facility. The RBI, under its former governor Urjit Patel, had in 2017 urged the Fed for access to the facility, then enjoyed by the European Central Bank, the Bank of Japan, the Bank of England, and some others.
The RBI had expressed the desire for a currency swap agreement with the Fed because of the pressure on the rupee over the last couple of weeks, said the person cited above. On 19 March, the Fed had announced currency swap agreements with some of the world’s top central banks with the aim of containing the risks of shortage of dollars in global markets. It however excluded India at the time.
With the currency swap option being given to central banks and other international monetary authorities, they can now enter repurchase agreements with the Fed and temporarily exchange their US treasuries held with it for US dollars.
World markets, be they equities, bonds, oil, currency, or others, have been in turmoil over the past month because of fears of recession, caused by the rapid spread of Covid-19. Most equity markets have plunged 30%-40%, while crude touched 18-year lows to trade below $20.
India’s healthy dollar reserves notwithstanding, RBI believes that currency swap lines can provide it with much needed ammunition to stabilize trade and forex outflows during volatile times such as the current crisis. The central bank’s dollar reserves fell to $437 billion as on 27 March from $447 billion a week earlier, due to the selling in the markets but still remain robust, according to RBI data.
The uncertainty has led to a surge in demand for the world’s safest currency, causing it to appreciate significantly against other currencies. In the first three months of 2020, the rupee has weakened by 5.5% against the US dollar. It closed at 75.63 against the greenback on Tuesday. It had weakened to an all-time low of 76.33 on 23 March, a 6.5% erosion since 31 December.
Fed gives RBI what it wants: dollar swap facility
Updated: 01 Apr 2020, 12:56 AM IST
By Dhirendra Tripathi
- The move will help stabilize markets, reduce volatility and ease pressure on currencies like the rupee
- A source said the RBI had expressed the desire for a currency swap agreement with the Fed due to pressure on the rupee
NEW DELHI : The US Federal Reserve on Tuesday gave the Reserve Bank of India (RBI), as well as all other central banks, currency swap facility to help them fund their dollar requirements. The facility was so far extended to select central banks that did not include the RBI or the People’s Bank of China.
The Fed’s move is a very positive and accommodative step and will help stabilize markets, reduce volatility, and ease pressure on currencies such as the rupee, said analysts
RBI had recently, albeit informally, requested the Fed to be given this facility, said a person aware of the development. The facility, effective 6 April, will be in place for at least six months, the Fed said.
The RBI did not respond to emailed queries if it had recently sought this facility. The RBI, under its former governor Urjit Patel, had in 2017 urged the Fed for access to the facility, then enjoyed by the European Central Bank, the Bank of Japan, the Bank of England, and some others.
The RBI had expressed the desire for a currency swap agreement with the Fed because of the pressure on the rupee over the last couple of weeks, said the person cited above. On 19 March, the Fed had announced currency swap agreements with some of the world’s top central banks with the aim of containing the risks of shortage of dollars in global markets. It however excluded India at the time.
With the currency swap option being given to central banks and other international monetary authorities, they can now enter repurchase agreements with the Fed and temporarily exchange their US treasuries held with it for US dollars.
World markets, be they equities, bonds, oil, currency, or others, have been in turmoil over the past month because of fears of recession, caused by the rapid spread of Covid-19. Most equity markets have plunged 30%-40%, while crude touched 18-year lows to trade below $20.
India’s healthy dollar reserves notwithstanding, RBI believes that currency swap lines can provide it with much needed ammunition to stabilize trade and forex outflows during volatile times such as the current crisis. The central bank’s dollar reserves fell to $437 billion as on 27 March from $447 billion a week earlier, due to the selling in the markets but still remain robust, according to RBI data.
The uncertainty has led to a surge in demand for the world’s safest currency, causing it to appreciate significantly against other currencies. In the first three months of 2020, the rupee has weakened by 5.5% against the US dollar. It closed at 75.63 against the greenback on Tuesday. It had weakened to an all-time low of 76.33 on 23 March, a 6.5% erosion since 31 December.
Fed gives RBI what it wants: dollar swap facility
Covid-19 outbreak could be Indian pharma’s big opportunity in Africa
April 2, 2020
By Oommen C. Kurian & Kriti Kapur
Pushing pharma exports.
The Covid-19 global pandemic has brought to the fore the intricate inter-dependencies that exist within the international pharmaceutical market.
China, the epicentre of the global outbreak, is also the world’s largest supplier of active pharmaceutical ingredients (APIs), also known as bulk drugs. India, which is a leading exporter of generic drugs across the world, depends on China for more than two-thirds of its bulk drug needs.
Estimates indicate that India supplies up to 50% of the United States’ generic drug needs, and vulnerabilities caused by Covid-19 have caused disruptions across global pharmaceutical supply chains. Perhaps this is also a good opportunity for India to reassess dependencies and plan for the future.
According to the government of India’s own estimates, India ranks third worldwide for pharmaceutical production by volume and 13th by value. It accounts for about 10% of the world’s production by volume and 1.5% by value. This apparent discrepancy points towards the relatively lower price of Indian pharmaceutical products, and the high demand they enjoy in the global market. A major supplier of affordable low-price drugs across the world, India’s role as the “pharmacy of the world” is well acknowledged by experts.
The Africa prescription
A joint analysis recently conducted by the African Export-Import (EXIM) Bank and the Export-Import (EXIM) Bank of India shows that commercial trade between Africa and India has expanded more than eight-fold (pdf) from $7.2 billion in 2001 to $59.9 billion in 2017. India is currently Africa’s fourth-largest national trading partner. India accounted for more than 6.4% of Africa’s total trade in 2017, considerably higher than 2.7% in 2001. However, Africa still accounts for about 8% of India’s total trade, similar to its share in 2001.
Pharmaceuticals are a major component of India’s trade expansion strategy, particularly with the country’s stated objective of a wider diversification of the export profile in terms of both products as well as destinations. Along with other sunrise industrial products like electronics, India’s export push focuses on pharmaceuticals as global demand expands.
Indian pharmaceutical industry aspires to become the world’s largest supplier of drugs by 2030. India aims to increase its industry revenue to $120 billion-$130 billion by 2030 from current revenue of $38 billion at a compound annual growth rate (CAGR) of 11-12%.
Pharmaceuticals are a major component of India’s trade expansion strategy, particularly with the country’s stated objective of diversification of exports in terms of both products as well as destinations.
India’s historical role in supporting a large number of relatively poorer nations—particularly in Africa to reduce their disease burden and deal with HIV, tuberculosis, and malaria through low-cost, generic medicines is widely acknowledged. Pharmaceutical products dominate India’s exports to Africa and along with petroleum products, account for about 40% of total Indian exports (pdf) in African markets.
Given an increasing buy-in for domestic production within African political leadership and an expanding pharmaceutical market driven by the improved purchasing power of governments and population, an analysis of long-term trends of pharmaceutical exports from India to African countries has been lacking.
The import-substitution resulting from a focus on domestic production may shift the composition of exports to Africa in favour of bulk drugs away from formulations or finished drugs, a category where India has traditionally dominated China.
Columns highlighted in red colour indicate Chinese dominance over India in pharma exports to African countries. Meanwhile, thosein green show Indian dominance over China in pharma exports.
In 2017, India fared better than China in terms of formulations, across the 10 largest export markets of pharmaceuticals in Africa namely South Africa, Egypt, Morocco, Kenya, Algeria, Ethiopia, Tunisia, Sudan, Tanzania, and Nigeria. However, with regards to bulk drugs, China exported more to five of these 10 markets (Table 1). With Covid-19 bringing to the forefront of India’s blind spots as a global pharma giant when it comes to generics, India might want to reduce its dependency on Chinese bulk drugs for strategic reasons.
Also, with the ongoing trade war with the US, China has offered a major push to its pharmaceutical sector to diversify and produce generics and biosimilars. This move to aggressively replace innovation drugs with homemade follow-on drugs may have an implication for export markets like Africa as well.
The key is scale
India’s need to produce its own bulk drugs can perfectly align with its ambition to become a bulk drug exporter to markets like Africa. Given this context, India should consider embracing economies of scale and increasing the production of bulk drugs to aggressively compete with the Chinese in the Africa market.
Our country-specific analysis tracking exports of bulk drugs and formulations to the ten biggest pharmaceutical markets in Africa over the last three years can inform country-specific policy measures for the government as well as the private sector.
India: A future pharma major.
Our analysis shows that in the three biggest pharmaceutical markets—South Africa, Algeria, Egypt, and India has room for tremendous improvement. South Africa, a country with a thriving domestic pharmaceutical industry, where India serves as a source of 28.3% of imports of finished drugs, the contribution to bulk drug imports is a meagre 3%.
Even as India strives to expand its finished drugs exports to Africa, the fact remains that in none of these markets is India’s share of bulk drugs more than 24%. Given India’s dependency on Chinese bulk drugs, perhaps it is time for India to help wean itself and its African trade partners off Chinese bulk drugs as well, going beyond the mere short-term economic benefits.
This piece was first published on orfonline.org. We welcome your comments at ideas.india@qz.com.
Covid-19 outbreak could be Indian pharma’s big opportunity in Africa
April 2, 2020
By Oommen C. Kurian & Kriti Kapur
Pushing pharma exports.
The Covid-19 global pandemic has brought to the fore the intricate inter-dependencies that exist within the international pharmaceutical market.
China, the epicentre of the global outbreak, is also the world’s largest supplier of active pharmaceutical ingredients (APIs), also known as bulk drugs. India, which is a leading exporter of generic drugs across the world, depends on China for more than two-thirds of its bulk drug needs.
Estimates indicate that India supplies up to 50% of the United States’ generic drug needs, and vulnerabilities caused by Covid-19 have caused disruptions across global pharmaceutical supply chains. Perhaps this is also a good opportunity for India to reassess dependencies and plan for the future.
According to the government of India’s own estimates, India ranks third worldwide for pharmaceutical production by volume and 13th by value. It accounts for about 10% of the world’s production by volume and 1.5% by value. This apparent discrepancy points towards the relatively lower price of Indian pharmaceutical products, and the high demand they enjoy in the global market. A major supplier of affordable low-price drugs across the world, India’s role as the “pharmacy of the world” is well acknowledged by experts.
The Africa prescription
A joint analysis recently conducted by the African Export-Import (EXIM) Bank and the Export-Import (EXIM) Bank of India shows that commercial trade between Africa and India has expanded more than eight-fold (pdf) from $7.2 billion in 2001 to $59.9 billion in 2017. India is currently Africa’s fourth-largest national trading partner. India accounted for more than 6.4% of Africa’s total trade in 2017, considerably higher than 2.7% in 2001. However, Africa still accounts for about 8% of India’s total trade, similar to its share in 2001.
Pharmaceuticals are a major component of India’s trade expansion strategy, particularly with the country’s stated objective of a wider diversification of the export profile in terms of both products as well as destinations. Along with other sunrise industrial products like electronics, India’s export push focuses on pharmaceuticals as global demand expands.
Indian pharmaceutical industry aspires to become the world’s largest supplier of drugs by 2030. India aims to increase its industry revenue to $120 billion-$130 billion by 2030 from current revenue of $38 billion at a compound annual growth rate (CAGR) of 11-12%.
Pharmaceuticals are a major component of India’s trade expansion strategy, particularly with the country’s stated objective of diversification of exports in terms of both products as well as destinations.
India’s historical role in supporting a large number of relatively poorer nations—particularly in Africa to reduce their disease burden and deal with HIV, tuberculosis, and malaria through low-cost, generic medicines is widely acknowledged. Pharmaceutical products dominate India’s exports to Africa and along with petroleum products, account for about 40% of total Indian exports (pdf) in African markets.
Given an increasing buy-in for domestic production within African political leadership and an expanding pharmaceutical market driven by the improved purchasing power of governments and population, an analysis of long-term trends of pharmaceutical exports from India to African countries has been lacking.
The import-substitution resulting from a focus on domestic production may shift the composition of exports to Africa in favour of bulk drugs away from formulations or finished drugs, a category where India has traditionally dominated China.
Columns highlighted in red colour indicate Chinese dominance over India in pharma exports to African countries. Meanwhile, thosein green show Indian dominance over China in pharma exports.
In 2017, India fared better than China in terms of formulations, across the 10 largest export markets of pharmaceuticals in Africa namely South Africa, Egypt, Morocco, Kenya, Algeria, Ethiopia, Tunisia, Sudan, Tanzania, and Nigeria. However, with regards to bulk drugs, China exported more to five of these 10 markets (Table 1). With Covid-19 bringing to the forefront of India’s blind spots as a global pharma giant when it comes to generics, India might want to reduce its dependency on Chinese bulk drugs for strategic reasons.
Also, with the ongoing trade war with the US, China has offered a major push to its pharmaceutical sector to diversify and produce generics and biosimilars. This move to aggressively replace innovation drugs with homemade follow-on drugs may have an implication for export markets like Africa as well.
The key is scale
India’s need to produce its own bulk drugs can perfectly align with its ambition to become a bulk drug exporter to markets like Africa. Given this context, India should consider embracing economies of scale and increasing the production of bulk drugs to aggressively compete with the Chinese in the Africa market.
Our country-specific analysis tracking exports of bulk drugs and formulations to the ten biggest pharmaceutical markets in Africa over the last three years can inform country-specific policy measures for the government as well as the private sector.
India: A future pharma major.
Our analysis shows that in the three biggest pharmaceutical markets—South Africa, Algeria, Egypt, and India has room for tremendous improvement. South Africa, a country with a thriving domestic pharmaceutical industry, where India serves as a source of 28.3% of imports of finished drugs, the contribution to bulk drug imports is a meagre 3%.
Even as India strives to expand its finished drugs exports to Africa, the fact remains that in none of these markets is India’s share of bulk drugs more than 24%. Given India’s dependency on Chinese bulk drugs, perhaps it is time for India to help wean itself and its African trade partners off Chinese bulk drugs as well, going beyond the mere short-term economic benefits.
This piece was first published on orfonline.org. We welcome your comments at ideas.india@qz.com.
Covid-19 outbreak could be Indian pharma’s big opportunity in Africa
India to export wheat to Afghanistan and Lebanon
India will be exporting around one lakh tonnes of wheat to Afghanistan and Lebanon under government to government (G2G) arrangement. The country is expecting a record wheat production of 106.21 million tonne this year - 2.61 million tonnes more last year’s out put.
India to export wheat to Afghanistan and Lebanon
India will be exporting around one lakh tonnes of wheat to Afghanistan and Lebanon under government to government (G2G) arrangement. The country is expecting a record wheat production of 106.21 million tonne this year - 2.61 million tonnes more last year’s out put.
India to export wheat to Afghanistan and Lebanon
Please share your thoughts on Indian job market after this crisis is over? Which sectors will see demand and which will go down? What will happen to IT Sector and Indian service Industry? Pharma Sector, Health spending of GoI.
@_Anonymous_ @Falcon @nair @Ashwin @Milspec @vstol Jockey @suryakiran @saho @RISING SUN @Gautam @Quicksilver @Tatvamasi and everyone else.
@_Anonymous_ @Falcon @nair @Ashwin @Milspec @vstol Jockey @suryakiran @saho @RISING SUN @Gautam @Quicksilver @Tatvamasi and everyone else.
Airline industry, Speciality upscale restaurants, Movie Theaters, Tourism related avenues, Smaller NBFC's, Securities and investments co's. and automobiles will see downturn.
Steel, Cement, Power, Banking, Pharma(limited nos), IT, Sugar, Coal, Construction (Road infra), will bounce back.
Too early to say anything yet, as it depends on duration of the lock down, and with 21 days, the way the spread is, i expect atleast another 21 days if not more..... Once that is decided then there would be some clarity...... The entire economy is going to go down, and there will be a tsunami in every industry with a cascading effect......
It depends on when are we going to get out of the woods. By & large I agree with Milspec. However the job market will be depressed irrespective of the sectors involved. This FY is a lost one in terms of GDP growth, which goes without saying. If we don't get into the negative unlike most of the world, you can see it as a big positive. Most of the next FY will be spent on regaining lost growth. I just hope this administration has the cunningness to use this crisis as an opportunity to ease up land & labour restrictions to boost industry & if not at least kick start them through SEZs.