Current Affairs - Economy

India is set to launch the EFTA Desk in New Delhi to enhance economic relations with the European Free Trade Association (EFTA). This initiative aligns with the India-EFTA Trade and Economic Partnership Agreement and aims to boost trade, investment, and business collaboration between India and EFTA member nations. The EFTA consists of Iceland, Liechtenstein, Norway, and Switzerland. By establishing this desk, India seeks to facilitate smoother economic interactions and expand its engagement with these European economies, fostering stronger trade partnerships and investment opportunities.

The Reserve Bank of India (RBI) reduced the repo rate by 25 basis points (bps), bringing it down to 6.25%. This marks the first rate cut in 57 months, reflecting a shift in the RBI’s policy stance after a series of rate hikes since 2022. The move is aimed at supporting economic growth while keeping inflation in check. A lower repo rate typically results in reduced borrowing costs for businesses and consumers, stimulating demand in key sectors such as housing and automobiles. Despite the cut, the RBI remains cautious due to global uncertainties and inflation risks.

India ranks as the 3rd largest digitalized economy globally, behind the United States and China, according to the State of India’s Digital Economy (SIDE) Report 2024. Despite this strong position in overall digitalisation, India ranks 12th among G20 nations in terms of individual user digitalisation. The digital economy contributed 11.74% to India’s GDP in 2022-23, with projections to reach 13.42% by 2024-25. By 2029-30, it is expected to contribute 20% of GDP, surpassing both agriculture and manufacturing. The report also highlights disparities in digitalisation levels across different Indian states.

Kerala has secured a ₹2,424.28 crore loan from the World Bank under the Programme for Results (P for R) model to implement the Kerala Health System Improvement Programme. This initiative aims to enhance value-based healthcare, prevent non-communicable diseases, address climate-related health risks, and improve emergency response systems. The programme also focuses on strengthening healthcare services for the underprivileged and improving coordination between various state departments. This financial support is expected to significantly boost Kerala’s healthcare infrastructure and ensure better medical services for its population.

India has emerged as the world's 2nd largest mobile manufacturer, driven by the rapid expansion of its electronics industry. The country now has over 300 mobile manufacturing units, a significant rise from just 2 in 2014. Nearly 99.2% of mobile phones sold in India are locally produced, with the manufacturing value surging from ₹18,900 Cr in FY14 to ₹4,22,000 Cr in FY24. Additionally, mobile phone exports have surpassed ₹1,29,000 Cr, reflecting India's growing role in the global electronics supply chain. The focus is now shifting towards semiconductor production and strengthening the electronics value chain.