Current Affairs - Economy

In 2024, India became the fourth-largest consumer of biofuels globally, surpassing China, as reported in the Statistical Review of World Energy 2025. India's biofuel usage rose by 40% from the previous year, reaching 77 thousand barrels of oil equivalent per day. Although India still lags behind in biofuel production compared to China, this milestone highlights the country's commitment to clean energy and reducing carbon emissions. Biofuels such as ethanol and biodiesel, which are derived from renewable sources, play a crucial role in achieving sustainability in the transport and industrial sectors. This ranking underscores India’s growing leadership in green energy adoption.

On July 2, 2025, the Ministry of Road Transport and Highways (MoRTH) implemented a major change by reducing toll charges by up to 50% on specific highway stretches that include expensive infrastructure such as bridges, tunnels, flyovers, and elevated roads. Previously, tolls were calculated at ten times the rate per kilometre for such structures, making travel costly. Under the new system, toll will be calculated based on the lesser of two formulas—either ten times the structure length plus the rest of the highway or five times the total stretch—effectively slashing the toll by half in many cases. This reform aims to ease financial pressure on travellers and improve highway usage.

At the end of March 2025, India’s external debt stood at $736.3 billion, which amounted to 19.1% of the country’s GDP, as reported by the Reserve Bank of India. This marked an increase from the previous year, when the external debt was $668.8 billion or 18.5% of GDP. External debt includes borrowings from foreign sources such as international financial institutions, foreign governments, and private commercial entities. The rise in the external debt-to-GDP ratio reflects changes in both borrowing levels and overall economic performance. Monitoring this ratio is important for assessing a country's debt sustainability and economic health in the global financial system.

India’s external debt rose by 10% year-on-year to $736.3 billion as of March 2025, according to the Reserve Bank of India. This reflects an increase of $67.5 billion from the previous year's figure of $668.8 billion. The growth was influenced by factors such as global financial conditions, increased international borrowing by corporations, and currency valuation changes, particularly the appreciation of the US dollar. The rise in external debt also led to a slight increase in the debt-to-GDP ratio from 18.5% to 19.1%, highlighting concerns over macroeconomic vulnerability and the growing role of external financing in India’s economic framework.

India's foreign direct investment (FDI) saw a notable rise in April 2025, reaching $8.8 billion, which represents a 23% increase compared to the same period in the previous year. This growth contributed positively to the Reserve Bank of India's foreign exchange reserves, even though other external inflows like non-resident deposits showed a slowdown. The resilience of India’s external sector, backed by strong FDI and external commercial borrowings, played a key role in strengthening forex reserves, which stood at $698.95 billion in June. The 22% figure directly quantifies the FDI inflow growth year-over-year.