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The Print
7 days ago
- Business
- The Print
Resilient trade partnerships present strategic opportunities: RBI bulletin
India is scheduled to sign a free trade agreement with the UK on Thursday. Prime Minister Narendra Modi has already left for London to witness signing of the comprehensive economic and trade agreement. It also said India's economic activities held up during June-July despite tariff policy uncertainties. Mumbai, Jul 23 (PTI) Building more resilient trade partnerships present a strategic opportunity for India to deepen its integration with global value amidst rising uncertainties and geo-economic fragmentation, Reserve Bank's bulletin said on Wednesday. New Delhi is also in discussion with Washington for a India-US free trade agreement. An article on 'State of the Economy' in the Reserve Bank's July Bullet said the global macroeconomic environment remained fluid in June and July so far amidst geopolitical tensions and tariff policy uncertainties. 'Domestic economic activity held up, with improving kharif agricultural season prospects, continuation of strong momentum in the services sector and modest growth in industrial activity,' it said. It further said that as intense negotiations are underway for closing trade deals before the new import tariff rates kick in from August 1, 2025, the focus is back on US trade policies and their spillover effects globally. The average trade tariff rates are set to touch levels unseen since the 1930s, the article said. Moreover, risk of imposition of new high tariffs looms large for additional sectors. The evolving pattern of global trade flows and supply chains are far from settled. These uncertainties pose considerable headwinds to global economic prospects. 'Amidst rising trade uncertainties and geo economic fragmentation, building more resilient trade partnerships presents a strategic opportunity for India to deepen its integration with global value chains,' it said. The article also noted that the headline retail (CPI) inflation remained below 4 per cent for the fifth consecutive month in June driven by deflation in food prices. System liquidity remained in surplus to facilitate a faster transmission of policy rate cuts to the credit markets. The external sector remained resilient, backed by ample foreign exchange reserves and a moderate external debt-to-GDP ratio. Easing inflation, improving kharif season prospects, front-loading of government expenditure, targeted fiscal measures and congenial financial conditions for faster transmission of rate reductions should support aggregate demand in the economy, going forward, it added. The central bank said that views expressed in this article are those of the authors and do not represent the views of the Reserve Bank of India. PTI NKD CS HVA This report is auto-generated from PTI news service. ThePrint holds no responsibility for its content.
The Wire
7 days ago
- Business
- The Wire
India's Net Foreign Direct Investment Falls by 98.2% as Compared to Last Year
The net foreign direct investment (FDI) in India fell significantly by 98.2 per cent to $40 million in May 2025. A year ago, in May 2024, it stood much higher at $2.2 billion. New Delhi: The net foreign direct investment (FDI) in India fell significantly by 98.2 per cent to $40 million in May 2025, on higher repatriation/divestment and outward investments from the country. A year ago, in May 2024, the net FDI, which is the difference between gross inflows and outflows, stood much higher at $2.2 billion, reported Business Standard, citing data from the Reserve Bank of India (RBI). While repatriation\divestment stood at $5.0 billion for May 2025,, up from $4.1 billion in May 2024, outward FDI in May 2025 was $2.1 billion, higher than $1.8 billion in May 2024. Gross FDI was $7.2 billion in May 2025 which was also lower than $8.1 billion in May 2024. According to the State of the Economy article in the RBI bulletin for July 2025, more than three-fourths of total FDI inflows in May 2025 was accounted for by Singapore, Mauritius, the UAE and the US. Manufacturing, financial and computer services were the top recipient sectors. In the first two months of the current financial year, cumulative net FDI was flat at $3.9 billion in April-May 2025. The figure was $4.0 billion in April-May 2024. The outward FDI from India registered a significant increase, rising to $5.3 billion in April-May 2025 from $3.1 billion in April-May 2024, reported Business Standard. The Wire is now on WhatsApp. Follow our channel for sharp analysis and opinions on the latest developments.
Mint
24-07-2025
- Business
- Mint
India's economy is resilient in the face of headwinds
In the face of new US tariffs, uncertainty over higher trade barriers and signs of stagnant domestic consumer demand, India's economy broadly seems to be holding up well. The Reserve Bank of India's State of the Economy report captures its resilience. Also read: Core inflation is back. What does it mean for India's monetary policy? Credit for this is due to plentiful rainfall, which has brightened farm prospects, a robust services sector and industrial activity that has been uneven but growth-supportive. Separately, the Asian Development Bank has forecast India's economic growth at 6.5% in 2025-26. Though this is a tad lower than its April forecast, it's still good under the current circumstances. Also read: The global economy is powering through a historic increase in tariffs It makes India stand out among the world's big economies. That said, the months ahead could see turbulence if New Delhi's trade negotiations with Washington do not deliver on expectations. With America's 1 August deadline for extra tariffs nearing, the chance of a quick trade deal look bleak. That parleys have dragged on suggests several sticky points. Also read: Tariff risk drives another round of Asia forecast downgrades India's government has rightly stated that it would brook no compromise of Indian interests. What exactly this means can be debated, but we should perhaps brace for some disappointment .
Economic Times
24-07-2025
- Business
- Economic Times
India's economy shows resilience amid global tariff challenges, macroeconomic risks
Mumbai: Macroeconomic risks might remain underpriced even as tariff levels near the 1930s highs, central bank economists said, while noting that India's domestic economy is sufficiently resilient to withstand the challenges posed by an in-transition global economic order. ADVERTISEMENT "Underpricing of macroeconomic risks by financial markets remains a concern. The average trade tariff rates are set to touch levels unseen since the 1930s. Moreover, the risk of imposition of new high tariffs looms large for additional sectors," Reserve Bank of India (RBI) economists said in the latest monthly bulletin. Despite these global headwinds, India's economy shows resilience, undergirded by strong fundamentals, easing inflation, favorable monsoons, and proactive fiscal measures, said the authors in the 'State of the Economy' report. Inflation has eased in India, where policymakers have lowered policy rates cumulatively by a full percentage point since February. While credit offtake has so far been rather circumspect, most economists expect greater demand for loans in the second half of the economy."Despite global uncertainties, the Indian economy remains largely resilient, supported by strong macroeconomic fundamentals," they said. "Easing inflation, improving kharif season prospects, front-loading of government expenditure, targeted fiscal measures and congenial financial conditions for faster transmission of rate reductions should support aggregate demand in the economy, going forward."Their views, however, do not necessarily reflect those of the central bank. Early onset and timely progress of the southwest monsoons have helped boost kharif sowing to 708 lakh hectares (as on July 18, 2025), up 4.1% compared to the corresponding period of last year. ADVERTISEMENT India's services sector sustained its strong growth momentum in June, with PMI services recording the highest expansion in 10 months. But the available high-frequency indicators for June point to modest industrial activity, the report noted. Inflation seems to be under control. Headline inflation declined to 2.1% (year-on-year) June 2025-the lowest since January 2019-from 2.8% in May. Core inflation inched up higher to 4.4 % in June 2025 from 4.2% in May. On regional distribution, both rural and urban inflation eased further to 1.7% and 2.6%, respectively, in June, with a greater fall witnessed in rural inflation. ADVERTISEMENT Even as net FDI-a stable source of foreign exchange-was very low, inflows through other sources such as external commercial borrowings and NRI deposits and slower dollar demand from importers made up for the slowdown. (You can now subscribe to our ETMarkets WhatsApp channel)
Time of India
24-07-2025
- Business
- Time of India
India's economy shows resilience amid global tariff challenges, macroeconomic risks
Mumbai: Macroeconomic risks might remain underpriced even as tariff levels near the 1930s highs, central bank economists said, while noting that India's domestic economy is sufficiently resilient to withstand the challenges posed by an in-transition global economic order. "Underpricing of macroeconomic risks by financial markets remains a concern. The average trade tariff rates are set to touch levels unseen since the 1930s. Moreover, the risk of imposition of new high tariffs looms large for additional sectors," Reserve Bank of India (RBI) economists said in the latest monthly bulletin. Explore courses from Top Institutes in Please select course: Select a Course Category Despite these global headwinds, India's economy shows resilience, undergirded by strong fundamentals, easing inflation, favorable monsoons, and proactive fiscal measures, said the authors in the 'State of the Economy' report. Inflation has eased in India, where policymakers have lowered policy rates cumulatively by a full percentage point since February. While credit offtake has so far been rather circumspect, most economists expect greater demand for loans in the second half of the economy. "Despite global uncertainties, the Indian economy remains largely resilient, supported by strong macroeconomic fundamentals," they said. "Easing inflation, improving kharif season prospects, front-loading of government expenditure, targeted fiscal measures and congenial financial conditions for faster transmission of rate reductions should support aggregate demand in the economy, going forward." Live Events Their views, however, do not necessarily reflect those of the central bank. Early onset and timely progress of the southwest monsoons have helped boost kharif sowing to 708 lakh hectares (as on July 18, 2025), up 4.1% compared to the corresponding period of last year. Agencies India's services sector sustained its strong growth momentum in June, with PMI services recording the highest expansion in 10 months. But the available high-frequency indicators for June point to modest industrial activity, the report noted. Inflation seems to be under control. Headline inflation declined to 2.1% (year-on-year) June 2025-the lowest since January 2019-from 2.8% in May. Core inflation inched up higher to 4.4 % in June 2025 from 4.2% in May. On regional distribution, both rural and urban inflation eased further to 1.7% and 2.6%, respectively, in June, with a greater fall witnessed in rural inflation. Even as net FDI-a stable source of foreign exchange-was very low, inflows through other sources such as external commercial borrowings and NRI deposits and slower dollar demand from importers made up for the slowdown.
