Latest news with #SujanHajra
South China Morning Post
5 hours ago
- Business
- South China Morning Post
India expected to maintain robust growth despite Pakistan tensions, trade woes
India is poised to remain the world's fastest-growing major economy this year, analysts have said, with a recent jumbo rate cut by its central bank expected to boost consumption and investment, even as the country contends with fresh military tensions with Pakistan and an uncertain global trade environment. The Reserve Bank of India (RBI) last week delivered a larger-than-expected interest rate cut of 50 basis points and reduced the cash reserve ratio – the minimum amount of capital banks must park with the central bank – by one percentage point. The move is projected to inject about US$29.15 billion into the banking system by year-end. The surprise monetary easing followed robust economic performance, with gross domestic product expanding 7.4 per cent in the January to March quarter – an acceleration that helped prompt the RBI's pre-emptive push to sustain growth. 'It looks unlikely that India will be able to maintain the 7.4 per cent growth, but it should be able to record a growth of 6.5–7 per cent in this financial year [ending March 2026],' Sujan Hajra, chief economist and executive director at the Anand Rathi group, told This Week in Asia. A man walks past the rupee symbol outside the Reserve Bank of India headquarters in Mumbai on June 6. The central bank last week delivered a larger-than-expected interest rate cut of 50 basis points. Photo: AP India is set to overtake Japan as the world's fourth-largest economy by the end of this calendar year, according to projections by the International Monetary Fund. The impact of India's tensions with Pakistan and volatile global environment was likely to be offset by the central bank's monetary easing, Hajra said.
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Business Standard
4 days ago
- Business
- Business Standard
How will RBI's policy decision impact market? Analysts prefer these stocks
The Reserve Bank of India (RBI), in a major move on Friday, June 6, 2025, slashed the repo rate by 50 basis points (bps) to 5.5 per cent and it also shifted the policy stance to "Neutral" from "Accommodative". Additionally, the Monetary Policy Committee (MPC) cut the cash reserve ratio (CRR), the percentage of a bank's total deposits that must be maintained in cash with the RBI, by 100 bps to 3 per cent from earlier 4 per cent. The central bank now projects the consumer price index (CPI) for FY26 at 3.7 per cent overall, revised down from 4 per cent. It has maintained the country's gross domestic product (GDP) growth forecast for FY26 at 6.5 per cent. How did Sensex and Nifty react to RBI's policy decision? Buoyant by RBI's policy decision, Indian equities edged higher. Around 11:50 AM, Sensex was up 754 points or 0.93 per cent at 82,195.38. Similarly, Nifty50 gained 245 points or 0.99 per cent at 24,997. CATCH LIVE UPDATES How do market experts view RBI's policy decision? We see tailwinds for net interest margins (NIMs) given the improving systemic liquidity and the deposit rate cuts taken by most banks. However, even as H1FY26 will see a more pronounced impact of the rate cut on NIMs, some respite is expected over H2FY26. VK Vijayakumar, chief investment strategist, Geojit Investments This big rate cut will impact the margins of the banks and, therefore, bank stocks will be under pressure in the near-term. However, the credit growth that this rate cut will hopefully stimulate will compensate for the dip in margins. The change in monetary stance from accommodative to neutral also indicates that more rate cuts are unlikely unless the situation warrants. Sujan Hajra, chief economist & executive director, Anand Rathi Group Overall, the policy decision is constructive for both equity and debt markets. In equities, interest-sensitive sectors are poised to benefit. While lower rates and policy transmission could have weighed on bank net interest margins in the near term, the sizeable CRR cut provides a significant offset, making this a particularly positive move for banks. Vinit Bolinjkar- head of research, Ventura RBI's move brings major relief to borrowers, with EMIs set to drop further following a cumulative 100 bps cut since February. The MPC's stance shift and CRR cut will offer timely support to the economy and markets amid global uncertainties. What are charts suggesting after RBI's policy decision? "The policy outcome is a positive surprise that could lead to a resumption of an uptrend in the Banking and NBFC space which has been consolidated in a range since last one month. The 20 DEMA in Bank Nifty at 55,400 will be sacrosanct support for the near term while we could see the index rallying towards 57,000-57,400 in the near term," said Ruchit Jain, Head - technical research at Motilal Oswal Where to invest after RBI's policy decision? Kulkarni of Axis Securities PMS prefers banks with promising growth prospects, healthy deposit franchises, stable asset quality metrics, and strong and steady management teams. His picks include HDFC Bank, ICICI Bank, and Kotak Bank among the larger private banks, and City Union Bank among the mid-sized banks.
India Gazette
13-05-2025
- Business
- India Gazette
India's retail inflation eases to 3.16% in April; analysts paint a positive outlook
New Delhi [India], May 13 (ANI): India's retail inflation has moderated to 3.16% in April, down from 3.34% in March, according to official data released by the Ministry of Statistics and Programme Implementation on Tuesday. This is the lowest year-on-year inflation since July 2019. The decline in inflation is attributed to a decrease in prices of vegetables, pulses and products, fruits, meat and fish, personal care and effects and cereals and products. Effectively, headline inflation declined 18 basis points in April 2025 compared to March 2025. The year-on-year inflation rate based on All India Consumer Food Price Index (CFPI) for April 2025 over April 2024 is 1.78 per cent (Provisional). The inflation rate is within the Reserve Bank of India's (RBI) manageable range of 2-6% Retail inflation last breached the Reserve Bank of India's 6 per cent upper tolerance level in October 2024. Since then, it has been in the 2-6 per cent range, which the RBI considers manageable. Food prices were a concern for Indian policymakers, who wished to sustain retail inflation around 4 per cent. After the RBI's April monetary policy review meeting, the central bank said that inflation is expected to remain under control in the financial year 2025-26. Inflation has been a concern for many countries, including advanced economies, but India has largely managed to steer its inflation trajectory well. The RBI held its benchmark repo rate steady at 6.5 per cent for the eleventh consecutive time, before cutting it first time in about five years in February 2025. Analysts expect inflation to remain under control, allowing the RBI to focus on supporting economic growth. They expect the RBI to cut interest rates further, citing controlled inflation and a focus on growth. Moreover, a good monsoon forecast is expected to cool down food inflation further. Moderating inflation is expected to bolster economic growth and private final consumption expenditure Sujan Hajra, Chief Economist and Executive Director, Anand Rathi Group, said, 'Softening food and crude oil prices are likely to keep inflation below the RBI's 4 per cent target, creating room for a potential repo rate cut in the upcoming MPC meeting. However, steadily rising service inflation may exert some pressure on core inflation. Overall, with inflation under control, the policy focus is expected to shift more firmly towards supporting growth--an environment that, along with a likely decline in interest rates, bodes well for corporate earnings and the Indian equity market outlook.' Aditi Nayar, Chief Economist and Head-Research and Outreach at ICRA, said, 'The benign April 2025 headline inflation print, expectations of another sub-4 per cent print in May 2025, the dip in crude oil prices in the recent weeks, and the IMD's forecast of an above normal monsoon in 2025 as well as an early onset in Kerala will allow the MPC to continue to place a higher weight on growth vis-a-vis inflation, when it meets in June 2025.' Hemant Jain, President, PHDCCI, said, 'This (moderation in retail inflation) is expected to further comfort RBI to reduce interest rates, in the next bi-monthly MPC meeting, which will reduce industry debt burden... Going ahead, we expect food inflation to cool down further given the anticipation of a good monsoon. Further, the crude prices are expected to be range-bound between USD 60 and USD 65 per barrel in the short to medium term, further boosting private final consumption expenditure and therefore bolstering economic growth.' Sankar Chakraborti, MD and CEO, Acuite Ratings and Research, said, '...we expect the Reserve Bank of India to cut the repo rate by an additional 50 basis points cumulatively in the coming months.' Rajani Sinha, Chief Economist, CareEdge Ratings, said, 'For FY26, we expect CPI inflation to average 4.2 per cent. While commodity prices have cooled off, trade policy uncertainties and geopolitical tensions remain monitorable, given their implications on global supply chains. On the monetary policy front, moderating inflation should provide comfort to the MPC in undertaking further rate cuts. We expect a further 50 bps reduction in the policy rate in FY26'. (ANI)
News18
13-05-2025
- Business
- News18
CPI April 2025: India's Inflation Cools Down To 3.16%, Lowest Since July 2019
Last Updated: CPI Inflation Rate April 2025: The fall in April 2025 inflation comes amid a sharp decline in food inflation during the month. CPI Inflation Rate April 2025: India's retail inflation, based on the Consumer Price Index (CPI), in April 2025 fell to 3.16 per cent, which is the lowest since July 2019, according to the latest official data released on Tuesday. The fall in April 2025 inflation comes amid a sharp decline in food inflation during the month. There is decline of 18 basis points in headline inflation of April, 2025 in comparison to March, 2025. It is the lowest year-on-year inflation after July, 2019. Food Inflation In April 2025 Year-on-year inflation rate based on All India Consumer Food Price Index (CFPI) for the month of April, 2025 over April, 2024 is 1.78% (Provisional). A sharp decline of 91 basis point is observed in food inflation in April, 2025 in comparison to March, 2025. The food inflation in April, 2025 is the lowest after October, 2021. Corresponding inflation rate for rural and urban are 1.85% and 1.64%, respectively. Sujan Hajra, Chief Economist & Executive Director, Anand Rathi Group said, India's CPI inflation eased to a six-year low of 3.16% in April 2025, driven by falling prices of vegetables, pulses, and cereals, with food inflation at its lowest since October 2021. Softening food and crude oil prices, he added, are likely to keep inflation below the RBI's 4% target, creating room for a potential repo rate cut in the upcoming MPC meeting. 'However, steadily rising service inflation may exert some pressure on core inflation. Overall, with inflation under control, the policy focus is expected to shift more firmly towards supporting growth—an environment that, along with a likely decline in interest rates, bodes well for corporate earnings and the Indian equity market outlook." Rural And Urban Inflation In April 2025 In April 2025, rural headline inflation fell to 2.92% from 3.25% in March, and food inflation dropped to 1.85% from 2.82%. Urban headline inflation decreased slightly to 3.36% from 3.43%, with a notable reduction in food inflation to 1.64% from 2.48%. Housing inflation for April was 3.00%, down from 3.03% in March. Education inflation rose to 4.13% from 3.98%, covering both rural and urban sectors. Health inflation remained almost steady at 4.25% compared to 4.26% in March, for both sectors. Transport and communication inflation increased to 3.73% from 3.36%, while fuel and light inflation jumped to 2.92% from 1.42%, both reflecting combined rates for rural and urban areas. Kerala experienced the highest inflation for April month to 5.94%, followed by Karnataka (4.26%) and Jammu and Kashmir (4.25%). First Published: May 13, 2025, 16:24 IST
Khaleej Times
06-04-2025
- Business
- Khaleej Times
Impact of Trump's tariffs ‘minimal' on India, say experts
India, the world's fifth-largest economy, is poised to emerge relatively unscathed from a new torrent of tariffs under President Trump's 'Liberation Day' plan. While the move has sparked concerns over potential disruptions in international commerce, experts argue that the impact of these tariffs on India's economic trajectory will be minimal, with a projected slowdown of just 20-40 basis points in the current financial year. In the face of global trade headwinds, India's strategic positioning and policy adaptability may allow it to not only weather the storm but also capitalise on emerging opportunities. As the world navigates shifting trade dynamics, the fastest-growing major economy's expansion remains firmly on track, say economists. More importantly, the nation's strong domestic fundamentals, coupled with lower tariff exposure compared to peers, may even allow India to turn this challenge into a strategic advantage. Trump's measures, designed to enforce reciprocal trade terms, also target several major economies, including China, Brazil, Japan, and the European Union. According to Goldman Sachs, the tariffs could increase the total effective tariff on Indian goods by 19.5 per cent, potentially reducing exports by $15 billion — approximately 0.4 per cent of India's GDP. While this figure may seem concerning at first glance, a deeper analysis reveals a more resilient outlook. India's trade relationship with the US remains robust, with bilateral trade reaching $124 billion in 2024. Indian exports to the US accounted for $81 billion, while imports stood at $44 billion, resulting in a substantial trade surplus of $37 billion. The US is India's largest export destination, absorbing 18 per cent of total outbound shipments — a sharp rise from just 6.0 per cent in 2006. Given this strong trade foundation, the direct impact of reciprocal tariffs is expected to be limited. Brokerage firm Motilal Oswal estimates that India's exports in the six most vulnerable sectors constitute only 1.1 per cent of GDP. Even under a worst-case scenario, where exports to the US decline by $3.6 billion (0.1 per cent of GDP), the broader economic repercussions would be marginal, it said. This assessment is based on a tariff differential of 9.0 per cent and an export elasticity of -0.5, meaning that a 1.0 per cent increase in tariffs could reduce exports by just 0.5 per cent. India's tariff burden remains significantly lower than that of other key trading nations. Under the new US regime, Indian goods will face a 26 per cent duty — on par with the EU (20 per cent) and Japan (25 per cent) but far below the rates imposed on China (54 per cent), Vietnam (46 per cent), Sri Lanka (44 per cent), and Bangladesh (37 per cent). This discrepancy positions India favourably in the global supply chain, potentially allowing it to attract trade diversion from higher-tariff competitors. Sujan Hajra, chief economist at Anand Rathi Group, notes that India's economic resilience could turn this trade headwind into an opportunity. 'Even if US exports decline by 10 per cent, the hit to GDP would be limited to around 0.2 per cent,' he explains. 'With lower tariff rates than key peers and a modest impact on exports, India may even gain from supply chain shifts.' Financial markets have responded optimistically to the developments. The Indian rupee appreciated by 34 paise against the US dollar in early trading following the announcement, buoyed by a weaker greenback and falling crude oil prices. Forex traders attribute this resilience to India's strong macroeconomic fundamentals and the limited direct impact of tariffs. HSBC's global trade forecast suggests a broader slowdown in export growth — from 2.9 per cent in 2024 to 1.3 per cent in 2025-26 — driven by reduced US import demand and global trade uncertainty. However, India's domestic consumption and investment-driven growth model insulates it from severe external shocks. The Federation of Indian Export Organisations (FIEO) acknowledges that US tariffs will affect Indian businesses but emphasises that India is better positioned than many competitors. 'We are in a lower tariff band compared to China, Vietnam, and others,' says Ajay Sahai, director-general of FIEO. 'While there will be an impact, we remain relatively well-placed.' President Trump's remarks during his recent address highlighted India's historically high tariffs on American goods, which he claimed reached 56 per cent. In response, the US imposed a discounted reciprocal tariff of 26 per cent on Indian imports. Despite these tensions, India's long-term economic prospects remain strong. Economist argue that while the new US tariffs introduce short-term uncertainties, India's economic fundamentals — strong domestic demand, a competitive export sector, and lower tariff exposure than peers — suggest minimal disruption. The IMF's January 2024 World Economic Outlook reaffirms India's status as the fastest-growing major economy, with projections indicating it could soon become the world's third-largest economy.
