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Informist, Tuesday, Apr. 29, 2025

 

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--Fin min: Prospects of agriculture sector remain bright for FY26 
--CONTEXT: Comments from fin min's Monthly Economic Review report for March 
--Fin min: Mfg showing signs of revival with robust business expectations 
--Fin min: Goods exports may face pressure due to global uncertainties 
--Fin min: Svcs exports to likely remain resilient amid global uncertainties 
--Fin min: Global trade risks warrant diversification into unexplored mkts 
--Fin min: Time for pvt cos to invest in product differentiation, quality 
--Fin min: Outlook for Indian economy appears positive

 

NEW DELHI – The ongoing disruption in global trade not only warrants close monitoring but also diversification of trade into unexplored markets, the finance ministry said in a report Tuesday. The current scenario also presents an opportunity for the private sector to start investing in product differentiation, the ministry said. 

 

The imposition and the subsequent suspension of reciprocal tariffs by the US have worsened the outlook for global trade and growth. While tariffs for most countries will not come into effect till Jul. 9, the US has levied tariffs of up to 245% on China. India and the US are working on a bilateral trade agreement and aim to conclude the first tranche of the deal by fall this year.

 

"The Indian economy continues to remain stable and resilient amid the rising disruption and uncertainties in global trade," the ministry said in its March edition of the Monthly Economic Review. However, uncertainties stemming from global developments constitute a key risk for the growth outlook for 2025-26 (Apr-Mar), the report said. 

 

"More than trade, the perception of prolonged uncertainty may cause the private sector to put its capital formation plans on hold," the ministry said. "The private sector and policymakers must be mindful of this risk and act urgently to avoid making uncertainty feed upon itself."

 

Capital formation can lead to a mutually reinforcing cycle of investment-income growth-demand growth-additional capacity creation, the ministry said, adding that execution has greater impacts now and this is an "opportunity not to be missed".

 

"For the private sector, this is the time to invest in product differentiation and quality as easy pickings recede into history," the ministry said. "Private capital formation holds the key to the sustainability of this favourable constellation."

 

The overall outlook of the Indian economy appears positive, the ministry said. While merchandise exports may face pressure due to global uncertainties, services exports will likely maintain their resilience, the ministry said.

 

The finance ministry's Economic Survey has projected India's GDP growth at 6.3-6.8% in FY26. The Reserve Bank of India earlier this month lowered its GDP growth forecast for the current year by 20 basis points to 6.5%, citing global trade-related uncertainties.

 

Prospects of the agriculture sector this year remain bright, supported by healthy reservoir levels and robust crop production, the ministry said. Manufacturing activity is also showing signs of revival with robust business expectations, while services sector activity continues to be resilient, the ministry said.  

 

"With the right strategies in place, continued domestic reforms, and a strong focus on infrastructure development and job creation, the economy can demonstrate resilient growth despite global uncertainties," the report said.  End

 

Reported by Shubham Rana

Edited by Saji George Titus

 

 

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