Street expects RBI to keep CRR unchanged, opt for open-market operations to ease liquidity
After contracting for six straight months, India's exports rose 5.99 per cent to $27.58 billion in September on account of growth in shipments of drugs and pharmaceuticals and readymade garments, as per the government data released on Thursday. Exports stood at $26.02 billion in September 2019. The country's imports contracted 19.6 per cent to $30.31 billion in September.
The Chinese currency too is expected to continue its fall.
Investment announcement for $100 bn over 5 years likely.
Markets ended on a positive note with 50-share Nifty surging above the key resistance level of 6,000 this Friday after Infosys, the company with fifth-highest weightage on the Sensex defied analysts' estimates and posted steady dollar revenue growth for fiscal 2014.
Noting 80 per cent of India's requirement of petroleum products was imported, the Prime Minister said this dependence was likely to increase.
'The cost of financing the fiscal deficit will decrease, as new passive investors join in.'
The economy keeps chugging along on the back of massive international borrowing, on a scale that is generally recognised as unsustainable. As a consequence, it has an abysmal savings-GDP ratio.
Indian frontline benchmarks - the S&P BSE Sensex and the Nifty50 - have rallied around 12 per cent each since June-end and outperformed their global peers by a wide margin. On Thursday, the US Fed hiked interest rates by another 75 basis points (bps) - the third such hike this year - and surprised the markets by projecting further sizable hikes in the coming months. With the latest hike, the Fed fund rate (FFR) now stands in the range of 3 - 3.25 per cent and is highest since January 2008.
The sole economic superpower does not want to dethrone the dollar, or for that matter practise Third World economics.
Under MRA, Japan is to recognise Indian medical degrees and treat the country's doctors and other medical personnel on par with its own.
The combined fertiliser, food and petroleum subsidy budgeted estimate for FY19 is Rs 2.64 trillion, while the revised estimate is Rs 2.66 trillion. If the carrying forward to FY20 does not happen, the revised estimates for the major subsidies could actually cross Rs 3 trillion for the first time ever.
Nifty ended up 12 points or 0.3% at 4,637.
India's balance of payments in negative territory.
The rupee on Monday appreciated by 11 paise to 54.64 against the US dollar in early trade at the Interbank Foreign Exchange, aided by selling of the American currency by exporters and banks.
At India's largest bullion dealer turnover has dropped to 20-30 kg a day from about 300 kg.
Strength in dollar against some other currencies overseas weighed on the rupee
Non-basmati white rice accounts for nearly 25-30 per cent of total rice exported from the country.
Barring a few exceptions India has a chronic trade deficit with most of its existing FTA partners as it is with most of its proposed FTA partners.
The country's exports rose by about 6 per cent to a "record" $447 billion during 2022-23 on account of healthy growth in the outbound shipments of sectors such as petroleum, pharma and chemicals and marine, Commerce and Industry Minister Piyush Goyal said on Thursday. The country's imports also grew by 16.5 per cent to $714 billion in 2022-23 as against $613 billion in 2021-22. He said that the exports of goods and services together scaled "new heights" and has increased by 14 per cent to $770 billion in 2022-23 as against 676 billion in 2021-22.
Eurozone crisis has hit the India-France bilateral trade and achieving the USD 12 billion target (of the trade) would be difficult this year, French Ambassador to India, Francois Richier, said.
The government has hiked import duty on gold three times in a year and recently raised it by 2 per cent to 8 per cent to curb demand.
The broader NSE Nifty ended at 10,888, a gain of 0.77 per cent or 83 points, after shuttling between 10,900.35 and 10,844.85.
Investors may take a 5 to 10 per cent exposure to silver. 'Have a long-term investment horizon when investing in silver ETFs to ride out short-term market fluctuations.'
At the Interbank Foreign Exchange market, the local unit commenced strong at 54.40, which was also to be the day's high, as against previous close of 54.57.
'Midcap and smallcap indices are trading in the expensive zone.'
According to SBI Ecowrap, every $10/barrel increase in oil price results in additional import bill of $8 billion.
The trade deficit is now at $21 billion.
After topping it for two consecutive years, Gujarat slipped three places on the NITI Aayog's Export Preparedness Index (EPI) for 2022, as Tamil Nadu emerged as the most export-ready state, the central think tank said in its report released on Monday. In a continuing trend, coastal states were found to have the most robust export infrastructure, which officials attributed to the integration of maritime trade into the core of their economies. Maharashtra and Karnataka retained their positions -- second and third, respectively; Haryana was ranked first among landlocked states and fifth overall.
While an official in the Commerce Department indicated a trade war was in the offing, till now the government has been in wait-and-watch mode.
"Indian business is ready to face the brave new world of globalisation. China is an important part of that brave new world. We must engage China and learn to both compete and cooperate," Singh, who began a three-day maiden visit here, said at a brainstorming session with the business delegation accompanying him, ahead of the Sino-Indian business summit on Monday.
Imports rose by 1.44 per cent to $43.44 billion in March 2019.
Under the scheme, also called the Export Credit Insurance Scheme, the insurance guaranteed could cover up to 90 per cent of the principal and interest.
The rupee resumed higher at 64.40 a dollar from Friday's close of 65.24 and touched a low of 64.54 at the interbank foreign exchange market.
Imports dropped by a sharper pace of 7.36 per cent to $41.9 billion, signalling weakening of the economy especially with regard to fresh investments as inward shipments of plant and machinery fell by eight per cent, according to provisional data released on Thursday.
The Commerce Ministry on Friday proposed revamp of the SEZ policy to address issues concerning land acquisition and boost exports with a view to bridge the widening trade deficit.
Sharp rate hike in Russia further raised concerns about the global economy.
The BSE benchmark Sensex recovered by nearly 44 points in early trade today on buying by funds and retailers amid a mixed trend in Asian region.
Country's exports continued to decline for the fifth month due to slowdown in the western economies.
'There is a fiscal crisis building up, which might become apparent when the Finance Commission presents its report,' warns T N Ninan.
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