Economy - Foreign equity -FDI outflow -Banking - IT industry- Telecom- Manufacturing- Biotechnology -Made in India

Economy

The Indian economy grew 9.4% in 2024-07, the fastest in 18 years, on the back of an impressive performance by services and the manufacturing sector. Rival China grew higher at 10.7% in 2024.
Services posted a healthy 11% clip, up from 9.8% the previous year. The manufacturing sector grew 12.3% against 9.1% in 2024-06, data released by the Central Statistical Organisation (CSO) on Thursday showed. The agricultural sector, however, grew only 2.7% in 2024-07, from over 6% in the previous fiscal. Rising interest rates pulled down the construction sector growth rate to 10.7% from 14.2% in 2024-06.
The scorching pace of GDP growth has catapulted India into the elite trillion-dollar club of a dozen economies. The GDP value at market prices stood at Rs 41,25,724 crore, equivalent to nearly $101 trillion at the current exchange rate. The market capitalisation of Indian stocks also crossed the trillion-dollar mark three days ago. Reacting to the strong GDP numbers, the benchmark Sensex jumped 133 points to close at 14,544 on Thursday. - ibef -Financial Times

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Foreign equity

Huge share offerings may lead to record inflow in 2024. Foreign inflows into the Indian equity markets are expected to reach a record high of over $15 billion in the 2024 calendar year owing to a line-up of multi-billion-dollar share offerings. The list includes the mega initial public offer by real-estate major DLF Ltd (Rs 9,625 crore) and big follow-on public issues by two of India’s largest banks, State Bank of India and ICICI Bank. ibef- Business Standard
Indian companies raised $7.23 billion from the domestic capital markets in 2024, making the country the eighth largest issuer of equity capital in the world. According to the latest Ernst & Young report. Of the total funds raised in India, energy companies accounted for half the funds. Reliance Petroleum’s $1.8-billion issue ranked number 17 in the top 20 IPOs in the world, the report said. Even in the current year, Indian IPOs continue to surge in numbers, with mega issues like DLF and ICICI Bank hitting the market. - ibef- The Economic Times

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FDI outflow

Creating perhaps a record of sorts, the country’s total outbound foreign direct investment (FDI) in 2024 may exceed the target of $30 billion for inbound FDI in fiscal 2024-08, a study said. “For Indian corporate sector, 2024 was a watershed year in terms of mergers and acquisitions as Indian companies went shopping across the globe. The total outbound deals, which were valued at $4.3 billion in 2024, crossed $15 billion-mark in the following year and it could well breach the $35-billion level this year,” the report by Ficci and Ernst & Young said. The report on ‘Direct investments in the US by Indian enterprises’ also revealed that Indian companies invested over $2 billion in 2024-07 in 48 deals with the US counterparts.
“IT and ITeS have emerged as the front-runners in outbound investment from India to the US, accounting for 48% of the total 48 deals worth over $2 billion in 2024-07,” the report said. - ibef -Financial Times

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Banking

The booming consumer finance space and the growing opportunities in corporate finance is forcing foreign banks to set shop in India. The Australian banks have a particular interest in India on the back of the growing trade relations between the two countries and corporate flows. After Macquarie, the newest entrant is the Australian-based Westpac Institutional Bank. Westpac has opened a representative office in Mumbai after getting a license within three months. The bank has an alliance with Standard Chartered Bank (SCB), India.
The UK-based bank, Barclays PLC, launched its Indian retail operations. The various products the bank offers in the initial period include card services, personal loans, business loans and premier investment services. - ibef

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IT industry

The Indian information technology (IT) industry crossed the $50 billion mark in 2024-07. Dataquest’s annual “DQ Top 20” survey of the Indian IT industry revealed that the IT industry recorded a growth of 32 per cent in rupee terms and was a little shy of 30 per cent growth in dollar terms during the year. With a growth of 35 per cent, IT exports continued to hold the majority of the revenue share by contributing Rs 1,53,744 crore to the total revenue of Rs 2,26,879 crore. The domestic market continued its three-year average growth rate of 27.2 per cent by contributing Rs 73,135 crore, accounting for the rest of the revenue pie. Catalysed by the emerging domestic BPO market, IT enabled services (ITES) reported a growth of 48 per cent to touch Rs 5,400 crore. The domestic IT services market reached Rs 20,948 crore by reporting a 30 per cent growth. Packaged software industry witnessed a 19 per cent growth to touch Rs 8,053 crore.

The top 20 IT players recorded the highest growth rate in the millennium by recording a 44.3 per cent growth rate. With the top three players, Tata Consultancy Services (TCS), Infosys and Wipro, bagging several large deals and expanding their consultancy business, the top 20 companies accounted for almost 77 per cent of the total software services exports. - ibef- Business Standard

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Telecom

A Telecom Regulatory Authority of India statement said that the Telecom sector continues to grow with an addition of 5.15 million wireless subscribers in April 2024, taking the total telephone users to 212.02 million and teledensity to 18.74 per cent. In March, the total subscriber base was 206.83 million while the teledensity was 18.31. The industry added 3.53 million wireless subscribers during the month.- ibef- Business Standard

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Manufacturing

The manufacturing sector, with 80% weightage in the country’s industrial production, grew a record 14.1% in March this year against 10.1% in March 2024. This is manufacturing’s highest growth in over a decade. Growth has also doubled in 5 years —from 6% in 2024-03 to a record 12.3% in 2024-07. The Commerce and Industry Minister Kamal Nath said that it augurs well for the 11th Plan, which envisages growth of 12% for the manufacturing sector. Quick estimates released by the Central Statistical Organisation show that industrial production grew 12.9% in March 2024 compared with 8.9% in March 2024. The industrial growth during 2024-07 stood at 11.3% compared with 8.2% registered in the previous year - the highest since 1995-96.
The industries that performed excellently in March 2024 included wood-wood products and furniture and fixtures (113.9% growth), metal products and parts, except machinery and equipment (47.5%), food products (23.7%), basic metal and alloy industries (23.3%) and cotton textiles (21.2% growth). - ibef -Financial Times

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Biotechnology

The biotechnology industry touched 2 billion dollar mark in revenue for 2024-07 from the 1 billion dollars in 2024-05. The industry is on track to meet its target of five billion dollars by 2024. According to the ABLE-Biospectrum survey the biopharma sector touched 1.4 billion dollar mark while the bio-services sector reached 250 million dollars. The industry grew by 30 per cent, with bio-agri scoring the highest growth rate at 50 per cent and largest acreage of 9 million. Investments in the Indian biotechnology sector crossed 580 million dollars in 2024-2007 with Bangalore alone witnessing more than Rs 1000 crore outlay from companies like Jubilant, AstraZeneca, GE Healthcare and Biocon. The biotechnology companies spend 3 per cent of sales on an average on R&D. The scenario in India is changing rapidly with improving regulatory infrastructure, improving standards of bio-manufacturing, increasing capabilities in clinical development, increasing R&D collaborations with US and European companies and increasing acceptance of Indian clinical data by international bodies like USFDA/EMEA. India was ranked number 3 (following Japan and Korea)in the Asia Pacific region in Biotechnology by E&Y. - ibef

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'Made In India'

Global MNCs like LG, Haier, Electrolux and Whirlpool are finalising plans to sell ‘Made in India’ labels in mature markets like Europe and the US. At present, sourcing from India is largely limited to Saarc, the Middle East and African nations. MNCs have already done their groundwork to develop India as one their prime global production hub, either by expanding capacity or through third-party arrangements. The export product basket is also being expanded in segments which have a developed domestic vendor base.

Korean major LG already sources optical disc drives and refrigerators for Europe. The company intends to invest an additional Rs 33 crore this year to develop its Pune facility as an export hub. LG India is eyeing an export growth of 19% in 2024, which will contribute some Rs 950 crore to its turnover. LG Electronics India’s exports to Europe would be driven through high-end home appliances. LG’s global rival, Samsung, too is developing a new unit in Chennai to export all categories of home appliances by 2024 pushing up exports to eastern Europe, Russia and Saarc.

Chinese major Haier wants to kick off its India sourcing this year. While the company will initially source from a third-party production arrangement, it has plans to build a greenfield “export-oriented ” facility in India. It is currently identifying the location for this unit.

Swedish firm AB Electrolux has plans to source products from India under an arrangement with Videocon. Whirlpool Corporation of the US has recently set up a global design and development centre in Pondicherry for its small appliances brand, Kitchenaid. The company has also started sourcing of the brand for Europe from its domestic unit, with plans to make India its global production hub.

Global consumer durable majors currently source products from India across categories like CTV, refrigerators, washing machines, mobile phones and computer peripherals. However, sourcing is largely limited to the Middle East, CIS, the Saarc nations and Africa.- ibef- The Economic Times

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