Indian Economy at a glance

Fecha publicación: 29 mayo, 2018
Categorías: Logistics & Customs
Etiquetas: india
Autor: Roger Pallares - Logistics General Manager

According to the latest World Economic Outlook (April 2017), India’s GDP growth slowed down from 7.9% in 2015–16 to 6.8% in 2016–17 as its cash-strapped economy hit its otherwise robust expenditure on consumption after demonetization. Nevertheless, the pace of the country’s economic growth has outstripped that of any other economy in the world (including China, which followed closely with a 6.7% growth). This trend is expected to continue, since the IMF expects this growth to accelerate to 7.2% and 7.7% in the following two years, respectively, and eventually rise to around 8%. The IMF’s report cites implementation of structural reforms, loosening of supply-side bottlenecks and appropriate fiscal and monetary policies as the key drivers of this growth.

Unlike the case of many other export-led economies, what gives a tremendous boost to India’s GDP is its high domestic consumption, which supports its growth and makes it resilient to global economic upheavals. The domestic demand or household consumption rates account for around 60% of India’s GDP, compared to 37% in China.

Corporate earnings in India are expected to grow by over 20 per cent in FY 2017-18 supported by normalization of profits, especially in sectors like automobiles and banks, while GDP is expected to grow by 7.5 per cent during the same period.

India has retained its position as the third largest startup base in the world with over 4,750 technology startups, with about 1,400 new start-ups being founded in 2016, according to a report by NASSCOM.

India’s labour force is expected to touch 160-170 million by 2020, based on rate of population growth, increased labour force participation, and higher education enrolment, among other factors, according to a study by ASSOCHAM and Thought Arbitrage Research Institute.

India’s foreign exchange reserves stood at US$ 366.781 billion as on March 17, 2017 as compared to US$ 360 billion by end of March 2016, according to data from the RBI.

Indian Economy

Recent Developments

With the improvement in the economic scenario, there have been various investments leading to increased M&A activity. M&A activity in India more than doubled year-on-year to reach US$ 61.26 billion in 2016-17. Early-stage start-ups in India are expected to raise US$ 800 million in 2017, due to greater focus on profitability and sustainable growth.

The Union Cabinet, Government of India, has approved the Central Goods and Services Tax (CGST), Integrated GST (IGST), Union Territory GST (UTGST), and Compensation Bill. This is the biggest Indirect Tax reform in the History of India with direct benefit to the Indian Consumer. This has resulted in Lower Tax burden by Widening the Tax Net. This will also lead to Consolidation in Warehousing by various Companies resulting in lower operating cost. The organized sector will now grow at a much higher rate.

The Union Cabinet has approved a memorandum of understanding (MoU) between India and United Arab Emirates (UAE), aimed at enhancing cooperation in the field of small and medium enterprises (SMEs) between the two countries, and thereby providing an opportunity for the Indian SMEs to improve and innovate further.

The Union Cabinet has approved a MoU between India and the African Asian Rural Development Organization (AARDO), to implement capacity building programs for rural development.

The Union Cabinet has approved a MoU between India and Hungary, aimed at improving bilateral cooperation in the field of water management, which is expected to develop relations between public and private organizations concerning water resources of both the countries.

The Government of India and the Government of the United States of America have signed a MoU to enhance cooperation on energy security, clean energy and climate change through increased bilateral engagement and further joint initiatives for promoting sustainable growth.

The Government of India plans to auction 280 mines with an estimated mineral value of over Rs 10 lakh crore (US$ 153.64 billion) in the fiscal year 2017-18, and also use drone technology to prepare topography maps and inspect mines.

Indian merchandise exports registered a growth of 17.48 per cent year-on-year in February 2017 at US$ 24.49 billion, according to the data from Ministry of Commerce & Industry

Retail price inflation for February 2017 was reported at 3.65 per cent, compared to 5.26 per cent a year ago, as per CSO.

India’s industry output grew 2.74 per cent year-on-year in January 2017, led by a good performance in the capital goods sector which registered a 10.7 per cent year-on-year growth.


Roger Pallares - Logistics General Manager

Roger Pallares – Logistics General Manager

Arola Logistics&Customs

Etiquetas: india


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