Indian economy is likely to log 6.3% growth in FY24 and FY25 on the back of macroeconomic and financial stability, International Monetary Fund’s Executive Board said Tuesday.

 

'India’s economy showed robust growth over the past year. Headline inflation has, on average, moderated although it remains volatile. Employment has surpassed the pre-pandemic level and, while the informal sector continues to dominate, formalisation has progressed,' the Article IV consultation conducted by its Executive Board noted.

 

The international fund lauded the macroeconomic policies and reforms of the government, stating that India could achieve even higher growth, with greater contributions from labour and human capital, with the implementation of structural reforms.

 

'The country’s foundational digital public infrastructure and a strong government infrastructure program will continue to sustain growth,’ it said.

 

IMF’s growth projection is much lower than the Reserve Bank of India’s Monetary Policy Committee growth forecast of 7% for FY24. The MPC revised its growth numbers in December owing to a strong performance in the first half.

 

The Indian economy averaged 7.7% growth in the first two-quarters of the fiscal due to strong consumption demand and rising investment.

 

'Stronger than expected consumer demand and private investment would raise growth. Further liberalization of foreign investment could increase India’s role in global value chains, boosting exports. Implementation of labour market reforms could raise employment and growth,' the IMF said.

 

The multilateral body expects investment to rise to 31.9% of GDP by FY25 and savings to rise to 30%.

 

However, it also noted that a sharp global slowdown could affect growth and weather shocks could impact inflation.

 

India’s inflation rose to 5.6% in November after declining to 4.9% in the previous month because of a rise in food prices. Food price shock is likely to keep inflation around the 6% level in December as well, say experts.

 

IMF expects inflation to decline to 5.4% in FY24 from 6.7% in the previous year. It is further expected to fall to 4.6% in FY25.

 

'Directors commended the Reserve Bank of India’s (RBI) proactive monetary policy actions and strong commitment to price stability. They agreed that the current neutral monetary policy stance, anchored on a data-dependent approach, is appropriate and should gradually bring inflation back to target,' the report noted.

 

The MPC kept the policy rate on hold at 6.5% for the fifth consecutive time at its December meeting.

 

The IMF also called for prudential tools to preserve financial stability and manage emerging vulnerabilities, including rapid growth in unsecured personal loans.

 

The Reserve Bank of India recently tightened underwriting norms for unsecured loans.

 

Fiscal steadiness and climate resilience

On the fiscal front, the IMF welcomed the government’s efforts to ramp up capital spending while tightening the fiscal stance.

 

'Improving revenue mobilization and spending efficiency would allow for continued improvements in digital and physical infrastructure and targeted social support,' the directors pointed out.

 

They also highlighted the need to establish a sound medium-term fiscal framework.

 

The government plans to reduce the fiscal deficit to 4.5% of GDP by FY26. The IMF projects the government to achieve its fiscal deficit target of 5.9% in FY24 but a marginal decline to 5.6% in FY25.

 

'Continued progress on designing and implementing climate policies is also critical to meet the authorities’ net zero emissions target date,' the directors said, batting for greener growth.

 

India has set a net zero target for 2070.

 

On growth track:

-GDP growth stable at 6.3% for FY24 and FY25

-Inflation to decline to 4.6% in FY25

-Fiscal deficit target to be met

-Need structural reforms in land and labour

-Infra push and digital public infra to sustain growth

	FY23	FY24	FY25
GDP growth (%, y-o-y)	7.2	6.3	6.3
Inflation (%, y-o-y)	6.7	5.4	4.6
Fiscal deficit (% of GDP)	6.4	5.9	5.6
Source: IMF

India is negotiating free trade agreements with the European Union (EU), the UK, Sri Lanka, and Peru, according to a year-end review statement of the commerce ministry. India-European Union (EU) free trade agreement negotiations were formally re-launched on June 17 2022.

 

'Negotiations cover 23 policy areas/chapters. Six rounds of negotiations have been held till October 2023,' the ministry said.

 

With the UK, 13 rounds of talks have been completed and the next round will take place in January 2024.

 

'India-Sri Lanka Economic and Technology Cooperation Agreement (ECTA) negotiations are ongoing with the 12th round of negotiations conducted from 30th October to 1st November 2023 in Colombo,' it said.

 

It added that both sides also agreed to continue discussions on matters, including apparel quotas and pharmaceutical procurement.

 

With Peru, it said discussions on various chapters, including rules of origin, trade in goods, trade facilitation, sanitary, and phytosanitary measures were undertaken during this special round of talks.

Fresh roses from eastern UP (Purvanchal) will spread their fragrance in UAE, with the first-ever consignment of fresh roses from the region being exported to the Gulf nation on Tuesday.

A 3.5 MT consignment, comprising 200 kg roses and seasonal green peas, carrots and other vegetables, was sent through Agricultural and Processed Food Products Export Development Authority (APEDA), ministry of commerce and industry from the Lal Bahadur Shastri International airport.

 

Besides, 50 sticks of sugarcane were also exported as sample.

APEDA chairman Abhishek Dev said despite trade restrictions on potential produce like wheat and rice, APEDA's efforts have propelled UP to become the third-largest exporting state in financial year 2023-24, after Gujarat and Maharashtra. He emphasised APEDA’s successful tapping of the Gangetic belt’s potential, facilitating FPOs and exporters to boost agri-exports from the region. The overall development of the agri-export model has seen collaboration with UP Mandi Parishad for export infrastructure development in Lucknow, Amroha, Saharanpur, Varanasi, and now in Gorakhpur.

He further said due to consistent efforts of both the Central and State Governments in the Purvanchal region, there has been a noteworthy increase in the movement of perishable cargo from Varanasi airport. Until November 23, the airport handled 598 MT of perishable cargo, surpassing the 561 MT cargo recorded in the entire fiscal year of 2022-23. The growth indicates a remarkable advancement in the region's agri-export capabilities. The APEDA organised a brainstorming session with Farmer Producer Organizations (FPOs), coinciding with the flag-off ceremony of the export of fresh roses. The session aimed at positioning Varanasi on par with coastal states renowned for agri-exports across the nation.

During the session, officials had detailed discussions with stakeholders focusing on refining the agri-export model. Despite challenges posed by COVID restrictions, APEDA has successfully launched new, indigenous, and GI tagged products from Uttar Pradesh to international markets.

Various agricultural products, including fresh fruits and vegetables (such as Green Chilies, Mangoes, Okra, Potato, Water Chestnut, Cranberry, Banana, Jimikand, Ivy Gourd, Bottle Gourd, Pointed Gourd, Arvi, Ginger), fresh marigold, and rice, have been exported, showcasing the region's ability to meet global demand.

 

He said aligned with PM Narendra Modi's 'vocal for local' and 'Atmanirbhar Bharat' initiatives, APEDA has focused on promoting the export of locally sourced agricultural products. This effort has resulted in a substantial increase, from almost zero exports in 2019 to 598 MT in the first eight months of 2023-24 fiscal year. The LBSI Airport in Varanasi has witnessed monthly agri-exports exceeding 100 MT in November 2023.

The region has become a preferred export destination for horticultural products, catering to gulf countries, european nations, Nepal, and Bangladesh.

Recognizing the pivotal role of FPOs as aggregators of farm produce, APEDA has shifted focus to capacity building for direct exports. Approximately 92 FPOs in UP have been promoted as exporters, with over 20 actively engaged in direct or deemed exports. More than 100 training and sensitization programmes have been conducted for FPOs to enhance their farming practices.

The APEDA chairman said APEDA's proactive efforts have also positioned Uttar Pradesh as a major player in the national agri-export landscape.

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As part of the International Year of Millets (IYoM) 2023, Ministry of Food Processing Industries (MoFPI) has organized a series of Millet (Shree Anna) Mahotsavs in 27 districts spread across the country. The details of the Mahotsavs is placed at Annexure. Also, Shree Anna was one of the focus areas in World Food India (WFI), 2023 organized during 3-5 November, 2023 in Pragati Maidan New Delhi.

 

MoFPI is also strengthening Shree Anna Processing & Preservation Infrastructure in the country through its schemes.  30 Shree Anna based proposals, including proposals from 8 large entities and 22 MSMEs, have been approved for assistance under Production Linked Incentive Scheme for Food Processing Industry (PLISFPI) with an outlay of Rs 800 Cr.  A total of 1745 loans have been sanctioned amounting Rs. 90.80 Cr for individual Shree Anna processing units under PM Formalization of Micro Food Processing Enterprises (PMFME) scheme.  MoFPI has also identified 19 districts with Shree Anna Products as One District One Product (ODOP) under its PMFME scheme and has approved 3 Marketing & Branding proposals for Shree Anna Products. Also, 17 incubation centres have been approved in 10 states having Shree Anna Processing lines.

 

Wide spectrum of domestic and overseas stakeholders participated in World Food India 2023, which included 1208 exhibitors, 14 international delegations including 7 Ministerial delegations, 715 overseas and 218 domestic buyers, 97 corporate leaders, 10 Union Ministries/ Departments, 6 Commodity Boards apart from 25 States / UTs. Netherlands was the Partner Country and Japan the Focus Country of the Event. Total Investment interests announced & MoUs signed during the World Food India 2023 amounts to Rs. 33,129 Crore.

The production of masur (lentils) will likely increase this crop year (July 2023-June 2024) with favourable weather supporting the crop despite the acreage trailing marginally till mid-December compared with the year-ago period.

 

The India Pulse and Grains Association (IPGA), in its latest market update, said the forthcoming domestic masur crop is projected to have higher yields due to favourable weather conditions in Madhya Pradesh and Uttar Pradesh, the key producing States. The upcoming crop period of December-January is crucial for plant growth and the yield potential hinges on the soil moisture availability. 'If nothing goes wrong on the weather front, we should have a crop of 16.5-17 lakh tonnes, higher than last year’s 15.5 lakh tonnes,' said Bimal Kothari, Chairman, IPGA.

 

Sowing down a tad

At the rabi outlook webinar of Friday, Manek Gupta, Managing Director, Viterra India Pvt Ltd, said crop conditions in most growing areas were pretty good and that the expectation was yields of lentils may be higher and the crop could be higher by 5-10 per cent this year. 'We can look at crop of 16.5 lakh tonnes or in that vicinity,' he said.

 

Per the Agriculture Ministry data, sowing of lentils has taken place on 16.75 lakh hectares (lh) as of December 15, marginally lower than the same period last year’s 16.84 lh.

 

'The expected acreage this year is 18.5-19 lh, almost similar to last year. Farmers have received healthy prices and the minimum support price has been increased by 10 per cent. All the signals have gone to the farmers and that they should be planting more,' Gupta said.

 

Higher MSP

The Government has increased the MSP of lentils to Rs.6,425 per quintal for the rabi marketing season 2023-24, up from the previous year’s Rs.6,000. However, the current prices are ruling around Rs.5,800-5,900 levels. 'There is 3.5 months for harvest. We really need to see how prices will be move between now and the harvest window,' he said.

 

The Government has bought almost half a million tonnes of lentils from the trade. According to the estimates, the government is holding stocks of 6.5 lakh tonnes of lentils. From a supply and price perspective, the government will be an important player in the lentils market, Gupta said. 'Last year, the government bought 1.5 lakh tonnes from the farmers and this year they will probably buy more considering how much lower the price is compared to the MSP,' he said.

 

Rahul Chauhan of Igrain India also said that the lentils crop condition is good and that we can see a production of over 14 lakh tonnes. Due to the huge increase in imports of lentils and also due to last year’s good crop, the market is range-bound, Chauhan said.

 

Kothari said the lentils imports this year have been more than a million tonnes. The monthly consumption of lentils is about 2 lakh tonnes, Kothari said, adding that the supply situation was comfortable.

As customers scramble to find onions in the markets following a sweeping export ban by India, the Nepal government has decided to request India to send the major kitchen ingredient.

 

'As per the request by onion traders, we have decided to request the Indian government to send onion to Nepal. We will send the request soon,' said an official in the Industry Ministry.

 

On December 8, after wheat, rice and sugar, India added dry onions to its list of food staples slapped with sweeping export restrictions.

 

The move aimed at containing domestic prices ahead of the national election next year will greatly affect Nepal.

 

Nepal gets almost all of its onion requirement from the southern neighbour, and any ripple there is amplified when it reaches the Nepali bazars.

 

As per the Indian government directive, the export of onions will also be allowed based on permission granted by the government of India to other countries based on the request of their governments.

 

Nepali government officials say that they are also discussing with onion importers to source the spice from other countries too.

 

Importing large quantities of onion from other countries, other than India, is not possible because it is a perishable commodity, said the government officials. 'As no government bodies import onions, our role is to facilitate the importers,' said the officials.

 

'However, if it takes time to get the approval from the Indian government, we have an option to import from third countries, including China.'

 

As soon as India slapped a sweeping ban on onion export, onion prices reached Rs200 per kg in retail. The price, currently, is hovering at Rs150 to Rs160 per kg in retail.

 

Traders say that the ban, however, has increased smuggling through the porous border points.

 

On Sunday, police in Kavrepalanchok district seized more than 400 sacks of onions from Kavre Bhanjyang of Dhulikhel Municipality.

 

The police seized seven vehicles carrying 16 tonnes of onion that were illegally imported using an old invoice, said Deputy Superintendent of Police Raj Kumar Shrestha, spokesperson at the District Police Office Kavre.

 

The seized onion has been sent to the Department of Revenue Investigation.

 

The officials at the Kalimati fruits and vegetables market said that traders are illegally importing onions in the border areas. 'But it is in small quantities.'

 

As onions imported from China are not much in demand in the Nepali market because of their taste, Nepali consumers prefer Indian onions and they are willing to pay any cost for it, traders said.

 

'We are waiting for the government's response to ease the supply system,' said Mohan Baniya, president of the Potato-Onion Import-Export and Wholesaler Association.

 

'If the issue is not sorted out in time, the shortage may cripple,' he said.

 

The association met the director general of the Department of Commerce, Supplies and Consumer Protection a week ago and requested to ease the supply through the negotiation.

 

'We have been assured that the supply system will be eased,' said Baniya.

 

According to the traders, a few tonnes of Chinese onion may arrive in the market in a few days.

 

Ananda Raj Pokharel, director of the Department of Commerce, Supplies and Consumer Protection, said there have been no concrete efforts to import onions. 'But the onion traders have requested us that the spice can be imported from China or Pakistan or other countries.'

 

Though there is an export ban, the Kalimati Fruits and Vegetables Market received 20 tonnes of onion on Sunday.

 

'We are not sure where the onions are coming from,' said Binay Shrestha, information officer at the Kalimati market, Nepal’s largest vegetables and fruits wholesale marketplace.

 

'The traders are supplying onions through their contacts. It could be either old stock or smuggled one.'

 

In India, onion is being traded at around IRs70 per kg.

 

During normal times, 80 to 100 tonnes of onions arrive in the Kalimati market, Shrestha said.

 

In November 2019, the price of onion hit a new high of Rs250 per kg in Kathmandu Valley after India slapped a ban on onion exports in September of the same year to maintain domestic availability.

 

The ban caused a severe shortage of onions all over Asia including Nepal. The embargo was lifted in March 2020. India again stopped onion exports from September 2020 to January 2021.

 

According to the Department of Customs, Nepal imported 180,190 tonnes of onions worth Rs6.75 billion from India in the last fiscal year.

Growth in the export of soyabean meal and rapeseed meal has helped India register a 21.04 per cent increase in the overall export of oilmeals during April-November of the current financial year.

 

Data compiled by Solvent Extractors’ Association of India (SEA) showed that India exported 28.83 lakh tonnes (lt) of oilmeals during April-November 2023-24 against 23.82 lt in the corresponding period of 2022-23.

 

Highlighting the demand for Indian soyabean meal from the international market, BV Mehta, Executive Director of SEA, said improved price competitiveness and the shortage of Argentine export supplies in the recent months helped boost the export growth.

 

India exported 8.57 lt of soyabean meal during the first eight months of 2023-24 (3.25 lt a year ago). As of December 14, soyabean meal (ex-Kandla) was quoted at $540 a tonne, while soyabean meal from Argentina (CIF Rotterdam) was quoted at $545 a tonne. This boosted the Indian soyabean meal export from the new crops.

 

Logistical advantage

South-East Asia is the major consumer of Indian soyabean meal. India has a logistic advantage to South East Asian destinations, and can supply in small lots, he said.

 

India exported 16.07 lt of rapeseed meal during April-November of 2023-24 (14.74 lt). He said India is the most competitive supplier of rapeseed meal to South Korea, Vietnam, Thailand and other Far-East countries at $326 a tonne (f.o.b. India). Rapeseed meal from Hamburg (ex-mill) was quoted at $334 a tonne.

 

Ban ricebran exports

Mehta said the Government has extended the ban on the export of de-oiled ricebran until March 31 2024, contrary to the expectations of the industry.

 

Stating that the processing of ricebran has witnessed a significant uptick with the commencement of the new season, he said this has led to a commendable improvement in the availability of de-oiled ricebran, manifesting in a notable reduction in price from Rs.18,000 a tonne on July 28 (the date of issuing the notification) to the current price of Rs.12,800 a tonne. It is anticipated that the prices may further decrease as the ricebran processing continues to increase, he said.

 

The eastern States of the country, including West Bengal, are significant producers of ricebran extraction. On the implications of the decision to extend the ban on export of de-oiled ricebran, he said the underdeveloped nature of the cattle feed industry in eastern India has resulted in limited demand for ricebran extraction domestically.

 

With the ban on export persisting, ricebran processors in eastern India are now confronted with the looming threat of shutting down their operations, he said, adding, this not only adversely impacts the rice milling industry but also poses a risk to the overall production of ricebran oil.

 

Major importers

South Korea, Thailand, Vietnam and Bangladesh are the major importers of oilmeals from India.

 

South Korea imported 5.55 lt of oilmeals during April-November 2023-24 (6.03 lt in April-November 2022-23). This included 3.77 lt of rapeseed meal, 1.51 lt of castorseed meal, and 26,671 tonnes of soyabean meal.

 

India exported 3.35 lt of of oilmeals (5.67 lt) to Vietnam during the first eight months of 2023-24. This consisted of 90,540 tonnes of ricebran extraction, 1.94 lt of rapeseed meal, 49,683 tonnes of soyabean meal, and 905 tonnes of groundnut meal.

 

Thailand imported 4.62 lt of oilmeals during April-November 2023-24 (4.33 lt). This included 4.49 lt of rapeseed meal, 7,039 tonnes of soyabean meal, 4,666 tonnes of ricebran extraction, and 701 tonnes of castorseed meal.

 

India exported 5.95 lt of oilmeals (2.46 lt) to Bangladesh during the first eight months of 2023-24. This included 27,771 tonnes of ricebran extractions, 3.03 lt of rapeseed meal, and 2.63 lt of soyabean meal.

Assam chief minister Himanta Biswa Sarma said that initiative by the State government to procure paddy at a minimum support price led to procurement of a total of 6-lakh metric tonne of the crop from as many as 62,000 farmers from across the State. This led to transfer of an aggregate amount of Rs. 12,000 crores into the accounts of the farmers and agriculturists.

 

Sarma on Saturday visited the 8th Assam Agri-Horti Show-2023 at College of Veterinary Sciences Playground at Khanapara scheduled to be held on 16th, 17th and 18th of December, 2023.

 

Sarma inaugurated the Assam Mandap, Assam Agriculture University Mandap and the International Pavilion and also visited the stalls by framers from across the State where various produces were kept for display. The Chief Minister also laid the foundation stones for the project for development of the Darrangiri banana market. This apart, he virtually laid the foundation stones for the office building of Assam Seed Corporation Limited and ceremonially unveiled its logo and the “brand name'.

 

Addressing the event, Sarma said the current government in the State has been working tirelessly for the past two and half years for the uplift of the agriculture sector. He said the initiative by the State government to procure paddy at a minimum support price led to procurement of a total of 6-lakh metric tonne of the crop from as many as 62,000 farmers from across the State. This led to transfer of an aggregate amount of Rs. 12,000 crore into the accounts of the farmers and agriculturists, he said.

 

The State government’s attempt at purchase of mustard from farmers too have met with unprecedented enthusiasm, he said. The Chief Minister added that all steps are being taken to see that farmers are not deprived of the schemes and policies that have been launched or undertaken for their benefits. Millet Mission, Fodder Mission, among others, are also being utilized as medium to support the farmers, he added.

 

Drawing a comparison between farmers in many other States to those from Assam, Sarma said Assam’s farmers should also practise commercial tree plantation and horticulture more extensively so as to increase their incomes like their counterparts from some of the other States. Referring to products from the State such as lemon, lichi, ginger, bhootjolokia, among others, managing to attract attention in many markets abroad, Sarma exuded confidence scientific cultivation of such species would go a long way in ensuring a niche market for such products from Assam in the world market.

 

Sarma said though there is a Rs. 100-crore flower market in the State, flowers cultivated in the State constitute only about 15% of the total demand. The State is also dependent on procurement from outside the State for pig feed and fish feed, among others.

According to Production Linked Incentive Scheme for Food Processing Industry (PLISFPI) Guidelines, the PLI bene?ciaries are required to furnish incentive claims for a speci?c ?nancial year by 31st December of the following ?nancial year. Incentives of Rs 584.30 crore for FY 2021-22 have been disbursed in 41 cases so far.

 

The selection of beneficiaries under PLISFPI has been made on the basis of eligibility criteria in the Scheme Guidelines finalised after consultation with stakeholders.

 

The state-wise information of the number of companies covered under the PLI Scheme, on the basis of the o?ces, is at Annexure. The manufacturing units are located through-out the country.

 

The scheme aims to create employment for approximately 2.5 lakh persons. As of September 30, 2023, Quarterly Review Reports from PLI beneficiaries indicate the creation of employment for 2,37,335 persons. The employment data is maintained company wise; State-wise employment data is not maintained.

In order to review the domestic price scenario of non-basmati rice, Secretary, Department of Food and Public Distribution, Shri Sanjeev Chopra convened a meeting today in New Delhi with the leading Rice processing industry representatives.

 

It was discussed in the meeting that the domestic prices of rice are increasing despite a good crop this Kharif, ample stocks with FCI and in the pipeline and various regulations in place on Rice exports. The rice industry needs to ensure that the prices in the domestic market need to be brought down to optimal levels and efforts at profiteering dealt with strictly. The Annual Inflation Rate of Rice is hovering around 12% for past two years and is cumulating over the years which is a cause of concern.

 

During the meeting, it was discussed that the benefit of lower prices has to be passed on expeditiously to the end consumers. The leading Rice Industry Associations were advised to take up the issue with their members and ensure that the retail price of Rice is reduced with immediate effect. There are reports of a sharp increase in the margins being availed by wholesalers and retailers which needs to be tempered. Besides, it was suggested that where there exists a wide gap between the MRP and actual retail Price, the same needs to be brought down to a realistic level in order to safeguard the interest of the consumers.

 

FCI informed the Rice processing industry that sufficient stock of good quality Rice is available which is being offered under OMSS at a reserve price of Rs. 29/Kg. It was also suggested that manufacturers/traders may consider lifting FCI rice under OMSS which may be sold to the consumers with a reasonable margin.

 

The Department of Food & Public Distribution closely monitors and reviews the prices of Rice in the country and steps in whenever any intervention is required to ensure affordability of Rice which forms an important part of the diet. The Indian consumers thus can expect to pay less for Rice in the coming days.