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India saved USD 13 billion by importing discounted Russian crude
The share of crude petroleum imported from Russia surged to around 36% in the 11 months of the fiscal year 2024 from a mere 2% in the fiscal year 2022.
Rakesh Kumar | Updated on: 30 Apr 2024, 6:55 am
Rakesh Kumar | Updated on: 30 Apr 2024, 6:55 am
NEW DELHI: India has saved around $13 billion by importing discounted crude oil from Russia in the past two years, according to a study by ICRA, the rating agency.
However, the rating agency's report also highlights a decreasing trend in the discount on crude year-on-year. India, being one of the largest energy consumers globally, has significantly increased its imports of crude oil from Russia since the latter's invasion of Ukraine in 2022.
The share of crude petroleum imported from Russia surged to around 36% in the 11 months of the fiscal year 2024 from a mere 2% in the fiscal year 2022.
“ICRA estimates this to have led to savings in India’s oil import bill amounting to $5.1 billion in FY2023 and $7.9 billion in 11M FY2024, thereby compressing India’s current account deficit (CAD)/GDP ratio by 15–22 bps in FY2023-24,” reads the study of ICRA.
According to energy cargo tracker Vortexa, India received 1.36 million barrels of crude oil per day from Russia in March 2024, compared to 1.27 million barrels per day in February 2024. According to the Commerce Ministry of India, the country imported $3.61 billion worth of crude oil from Russia in February 2024, following $4.47 billion in January 2024.
The reason behind Russia becoming the top supplier to India is its offer of discounted crude. After Western countries shunned Russian crude, India and China emerged as the biggest beneficiaries. Industry estimates suggest the discount on Russian crude oil was over $30 per barrel in 2022, but has fallen below $5 per barrel in 2024.
ICRA reports that the monthly discounts relative to price significantly narrowed throughout fiscal year 2024, from approximately 23% in April-August to an average of around 8% in September-February, resulting in a notable decline in savings during the latter period.
Consequently, if the discounts on purchases of Russian crude persist at the current low levels, ICRA anticipates India's net oil import bill to rise to $101-104 billion in fiscal year 2025 from $96.1 billion in fiscal year 2024, assuming an average crude oil price of $85 per barrel for the fiscal year.
Previously, Iraq, Saudi Arabia, and the UAE were India's traditional crude oil suppliers. According to February 2024 data from the Ministry of Commerce and Industry, India imported $2.6 billion worth of crude oil from Saudi Arabia, placing it in second position. The third position was filled by Iraq, with $2.24 billion worth of crude oil imported in February 2024. Overall, India's oil import bill for February 2024 stood at $13.25 billion.
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Source: The New Indian Express
This saving is more than all the weapons we imported from Russia in last five years.
Akula deal is going to turn out a dud. And we are going to loose any payments we have made.
Coz as of 2022, Russians jointly inspected 3 hulls for transfer, all 3 were found not fit for refurbishment.
Chakra is back in Russia and it's also under repairs now, it's also in a bad condition.
Maybe by this year end we will have an announcement.
India Becomes 1st Country To Receive Over $100 Billion In Remittances: UN
India received over USD 111 billion in remittances in 2022, the largest in the world, becoming the first country to reach and even surpass the USD 100 billion mark, the United Nations migration agency has said.
www.ndtv.com
India now net exporter of medical consumables - Times of India
India Business News: The country exported consumables and disposables worth $1.6 billion, while it imported products worth only about $1.1 billion in 2022-23, Union pharma
timesofindia.indiatimes.com
The govt shouldn't stray away from getting access to high-end tech though. We were always going to make a move towards Russian energy, even before the war began.
Then let's hope it's replaced by the Yasen in a purchase deal instead of lease.
inflation: India's retail inflation eases marginally to 11-month low of 4.83 per cent in April - The Economic Times
In April, India's retail inflation slightly decreased to 4.83 percent annually from 4.85 percent the previous month, as per government data released on Monday. According to a Reuters poll of 44 economists, the estimated figure was 4.80 percent.
Handing out any Yasens would seriously dent their posture against NATO. Really doubt they'd be willing to do that especially given how the situation in Europe is shaping up.
More likely, they'll try to repay us off for the money we spent on the lease in some way or the other (e.g. foregoing royalty payments on a lot of stuff, giving us permission to modify stuff we otherwise couldn't, like replacing MKI's DFCC, and validating them etc).
We need 2 SSNs though. Or at least 1 Yasen with a 15-year lease period, could be second-hand. The alternative is we will be forced to delay operationalizing our own SSNs by many years due to lack of trained crew.
The Yasen-M production is coming to an end so there's room for expansion. The Indian contracts are a cashcow for Sevmash. Plus selling 1 or more subs to India will help subsidize their own expanding production. The speed of delivery will be very high as well.
Politically too, there is a need for Russia to match the Australian deal. And the US doesn't want to push Russia to the point where they will start selling advanced weapons to rogue states at highly subsidized rates, making India a good alternative. Not to mention, we do not want Russia to find Pakistan's market after ours.
Furthermore, Russia and India need another big ticket deal to keep military relations going for another 2-3 decades to makeup for our dependency on Russian aviation. We also use them to balance our relations with the US.
It's obviously a longshot given current conditions, but there are too many advantages for both countries going for it.
Bull run continues! Indian equity markets hit $5 trillion market cap; $1 trillion wealth added in less than 6 months - Times of India
India Business News: Indian stock market has added $1 trillion wealth in 6 months, entering $5 trillion club on Tuesday with total market value on BSE reaching Rs 414.75 l
timesofindia.indiatimes.com
Looks like there is still a lot of investor confidence despite elections. I wish that they highlighted which sectors are seeing the most growth and continued investment.
India's fast economic growth lays firm ground for next government
India's economy grew at a faster-than-expected pace of 7.8% year-on-year in the first three months of 2024, helped by a strong performance in the manufacturing sector, and economists expect the momentum to continue this year.
The gross domestic product (INGDPQ=ECI), opens new tab growth in the first three months of 2024, the fourth quarter of 2023/24 fiscal year, was lower than a revised 8.6% expansion in the previous quarter, government data released on Friday showed.
However, it was higher than the 6.7% growth forecast by economists in a Reuters poll.
In the October-December quarter, the headline growth figure was boosted by a sharp fall in subsidies, while gross value added (GVA), seen by economists as a more stable measure of growth, rose 6.5%.
In the March quarter, GVA rose by 6.3%.
India's economic growth for the full fiscal year 2023/24 was revised up to 8.2%, the highest among large economies globally, from an earlier government estimate of 7.6%.
The growth figures will be a boost for Indian Prime Minister Narendra Modi, who is largely expected to win a third term in the national election, with results scheduled to be released on June 4.
Manufacturing output rose 8.9% year-on-year in the three months ending in March, compared with a revised expansion of 11.5% in the previous quarter, while farm output growth accelerated to 0.6% after revised 0.4% growth in the previous quarter, the data showed.
Investors are looking ahead to the election results and full-year budget in mid-July to assess any steps by the new government to boost the economy.
The Reserve Bank of India's (RBI) record surplus transfer of 2.11 trillion rupees ($25.3 billion) earlier this month is likely to allow the government to increase state spending or cut the fiscal deficit.
The RBI's monetary policy committee is expected to hold benchmark repo rate (INREPO=ECI), opens new tab at 6.50% at its June 5-7 meeting, with inflation staying above 4%, the mid-point of its 2-6% target, economists said in a Reuters poll.
High-frequency indicators data for April including auto sales, housing loans and fuel consumption reflected strong urban consumer demand, though there were concerns about weak rural demand despite forecasts of a above normal monsoon this year.
Globally, economic activity remains resilient, with China's economy growing 5.3% year-on-year and the U.S. economy expanding at 1.3% annualised rate in March quarter amid signs of inflation easing, strengthening hopes of a pick up in India's exports.
On Wednesday, S&P Global raised its sovereign rating outlook for India to "positive" from "stable", adding that regardless of the outcome of the national elections it expected broad continuity in economic reforms and fiscal policies.
It expects the economy to grow at 6.8% in the current fiscal year starting April, and close to 7% annually over the next three years.
lfg 8.2%
Attachments
NEW DELHI, May 31 (Reuters) - India's economy grew at a faster-than-expected pace of 7.8% year-on-year in the January-March quarter, helped by strong growth in the manufacturing sector, and economists expect the momentum to remain strong this year.India's fast economic growth lays firm ground for next government
India's economy grew at a faster-than-expected pace of 7.8% year-on-year in the first three months of 2024, helped by a strong performance in the manufacturing sector, and economists expect the momentum to continue this year.www.reuters.com
The gross domestic product (INGDPQ=ECI), opens new tab growth in the first three months of 2024, the fourth quarter of 2023/24 fiscal year, was lower than a revised 8.6% expansion in the previous quarter, government data released on Friday showed.
However, it was higher than the 6.7% growth forecast by economists in a Reuters poll.
In the October-December quarter, the headline growth figure was boosted by a sharp fall in subsidies, while gross value added (GVA), seen by economists as a more stable measure of growth, rose 6.5%.
In the March quarter, GVA rose by 6.3%.
India's economic growth for the full fiscal year 2023/24 was revised up to 8.2%, the highest among large economies globally, from an earlier government estimate of 7.6%.
The growth figures will be a boost for Indian Prime Minister Narendra Modi, who is largely expected to win a third term in the national election, with results scheduled to be released on June 4.
Manufacturing output rose 8.9% year-on-year in the three months ending in March, compared with a revised expansion of 11.5% in the previous quarter, while farm output growth accelerated to 0.6% after revised 0.4% growth in the previous quarter, the data showed.
Investors are looking ahead to the election results and full-year budget in mid-July to assess any steps by the new government to boost the economy.
The Reserve Bank of India's (RBI) record surplus transfer of 2.11 trillion rupees ($25.3 billion) earlier this month is likely to allow the government to increase state spending or cut the fiscal deficit.
The RBI's monetary policy committee is expected to hold benchmark repo rate (INREPO=ECI), opens new tab at 6.50% at its June 5-7 meeting, with inflation staying above 4%, the mid-point of its 2-6% target, economists said in a Reuters poll.
High-frequency indicators data for April including auto sales, housing loans and fuel consumption reflected strong urban consumer demand, though there were concerns about weak rural demand despite forecasts of a above normal monsoon this year.
Globally, economic activity remains resilient, with China's economy growing 5.3% year-on-year and the U.S. economy expanding at 1.3% annualised rate in March quarter amid signs of inflation easing, strengthening hopes of a pick up in India's exports.
On Wednesday, S&P Global raised its sovereign rating outlook for India to "positive" from "stable", adding that regardless of the outcome of the national elections it expected broad continuity in economic reforms and fiscal policies.
It expects the economy to grow at 6.8% in the current fiscal year starting April, and close to 7% annually over the next three years.
lfg 8.2%
India GDP power-surge: FY24 growth beats expectations at 8.2%! Top 10 takeaways from Q4 GDP data - Times of India
India Business News: India GDP growth: India's economic performance continues to exceed expectations. The country's GDP growth for the 2024 fiscal year is provisionally es
timesofindia.indiatimes.com
RBI moves 100 tonnes gold from UK to its vaults in India
TNN | May 31, 2024, 10.44 AM IST
NEW DELHI: Reserve Bank of India has moved a little over 100 tonnes of gold from the UK to its vaults in the country, marking the first time at least since early 1991, when precious metal at this scale has been added to the stock held locally.
A similar quantity of gold may be headed into the country again in the coming months with official sources telling TOI that the transfer to locations within the country was for logistical reasons as also for diversified storage.
According to the latest data, at the end of March, RBI had 822.1 tonnes of gold, of which 413.8 tonnes was overseas. It is among central banks that bought gold in recent years, with 27.5 tonnes added during the last financial year.
For a large number of central banks, Bank of England has traditionally been the storehouse and India is no different with some the yellow metal stocks lying in London from pre-Independence days.
“RBI started purchasing gold a few years ago and decided to undertake a review of where it wants to store it, something that is done from time to time. Since stock was building up overseas, it was decided to get some of the gold to India,” an official said.
For most Indians, gold has been an emotional issue, especially after the Chandra Shekhar govt pledged the precious metal to tackle the balance of payments crisis in 1991. While RBI bought 200 tonnes of gold from the International Monetary Fund around 15 years ago, over the last few years, a steady build up in stocks has taken place through purchases by the Indian central bank.
“It shows the strength of the economy and the confidence, which is in sharp contrast to the situation in 1991,” said a source.
But getting 100 tonnes of gold, which is almost a fourth of the stock in the country at the end of March, was a massive logistical exercise, requiring months of planning and precise execution. It involved close coordination between the finance ministry, RBI and several other wings of govt, including local authorities.
To begin with, RBI got a customs duty exemption to ship the metal into the country with the Centre “foregoing revenue” on what is a sovereign asset. But there was no exemption from integrated GST, which is levied on imports, as the tax is shared with the states.
It also took a special aircraft to fly the large quantities of gold with detailed security arrangements put in place. The move will also help RBI save on some of the storage cost, which is paid to Bank of England, although the amount is not significant.
Within the country, gold is held in vaults in RBI’s old office building on Mumbai’s Mint Road as well as Nagpur.
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Source: The Times of India
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India turns back to a current account surplus in March 2024
After 2021, we've seen the first quarter when India's current account turned a surplus for the quarter. This has been very interesting as the deficit was very low in the last few quarters.
Gold is a big portion of the current account. In my view, it's a financial investment mostly so we should remove it from the current account. If you do that, we've been having five consecutive quarters of a surplus
There's a bit of a slowdown in IT exports. This is probably related to a drop in US tech spending and some of the impact of reorganization as interest rates rise in the US and AI provides a bit of a cushion.
FPI though, saw a $11bn net investment in the quarter into both stocks and bonds
The RBI has bought some $30 bn in the quarter just to retain the rupee at the 83 levels. They don't seem to want the rupee to appreciate, but it's probably the only way ahead considering future inflows from FPIs into equities and into bond indexes. Meanwhile, as India migrates away from crude oil based products slowly, we will see the trade deficit remain shallow. Let's hope for two things:
After 2021, we've seen the first quarter when India's current account turned a surplus for the quarter. This has been very interesting as the deficit was very low in the last few quarters.
Gold is a big portion of the current account. In my view, it's a financial investment mostly so we should remove it from the current account. If you do that, we've been having five consecutive quarters of a surplus
Massive: The Trade Deficit Narrows
We've seen a major drop in net import of goods, and a slight drop in export of services, in the March quarter. That has brought the trade deficit to just $8 bn. Remember India imports goods (a trade deficit) and exports services (IT services).There's a bit of a slowdown in IT exports. This is probably related to a drop in US tech spending and some of the impact of reorganization as interest rates rise in the US and AI provides a bit of a cushion.
Remittances: Still Strong
Indians abroad send back money to their families and that continues to remain a strong inflow, hitting $107bn for the year. (India gets the most in the world)Investment flows: FDI still weak, FPIs continue
FDI remains weak on a net bases, barely at $2bn. This is probably going to be negative as companies like Hyundai and a few other MNCs sell their shares in India.FPI though, saw a $11bn net investment in the quarter into both stocks and bonds
Keeping the surplus up
While the surplus is a bit of a surprise, it's also natural as the world contracts in trade and investment flows remain strong. Remittances have massively swept inflows into India.The RBI has bought some $30 bn in the quarter just to retain the rupee at the 83 levels. They don't seem to want the rupee to appreciate, but it's probably the only way ahead considering future inflows from FPIs into equities and into bond indexes. Meanwhile, as India migrates away from crude oil based products slowly, we will see the trade deficit remain shallow. Let's hope for two things:
- Hope the RBI allows the rupee to appreciate back to below 80, and
- Hope the surplus situation continues on the current account