Current Affairs - Economy

Moody’s Ratings, in its May 2025 update to the Global Macro Outlook, has revised India’s GDP growth forecast for the calendar year 2025 downward to 6.3%. The downgrade from the earlier estimate of 6.5% is attributed to rising global trade and policy uncertainty, particularly from evolving U.S. trade strategies, and heightened geopolitical tensions across multiple regions, including the India-Pakistan border and the South China Sea. Additionally, financial market volatility and tight global liquidity conditions have added to the economic risks. Despite this, Moody’s maintained India’s 2026 growth forecast at 6.5%, expecting conditions to stabilise over time.

India and the United Kingdom have recently concluded a Free Trade Agreement (FTA) and a Double Contribution Convention aimed at enhancing bilateral trade and economic cooperation. The agreement is expected to significantly benefit sectors such as textiles, leather, footwear, toys, gems, jewellery, and engineering goods. It aims to create greater export opportunities and boost manufacturing, thereby unlocking new economic potential for both countries. This strategic move underscores the growing economic ties between India and the UK, positioning both nations to leverage mutual strengths and expand their global trade footprint.

The Maldives has unveiled plans to establish the Maldives International Financial Centre (MIFC) in its capital, Malé, with a massive $8.8 billion investment. This ambitious project, in collaboration with the Qatari-owned MBS Global Investments, is expected to be completed by 2030. Designed as a sustainable financial-free zone, the MIFC will serve as a hub for global financial institutions, fintech startups, and remote-working professionals. The initiative reflects the Maldives' strategic move to diversify its economy beyond tourism and position itself as a prominent financial player in the Indian Ocean region.

In the financial year 2024-25, India’s non-petroleum exports reached a record 374.08 billion dollars, marking a 6% increase from the previous year. This growth contributed significantly to India’s overall export performance, which hit an all-time high of 824.9 billion dollars. The rise in non-petroleum exports reflects improved competitiveness and diversification in India’s export basket, particularly in manufactured goods and services. This 6% growth is a positive indicator for India’s external sector, helping to reduce the trade deficit and support overall economic momentum amid global challenges in trade and supply chains.

The Union Cabinet, under the leadership of Prime Minister Narendra Modi and the Cabinet Committee on Economic Affairs, has approved the Fair and Remunerative Price (FRP) for sugarcane at Rs. 355 per quintal for the 2025–26 season. This price is set for a basic recovery rate of 10.25 per cent. The FRP is the minimum price that sugar mills are required to pay to sugarcane farmers and plays a crucial role in protecting farmer interests, especially in a country like India, which is the world's largest producer and consumer of sugar.