Current Affairs - Economy

According to the Reserve Bank of India (RBI) Remittances Survey for 2023-24, the United States has overtaken the United Arab Emirates (UAE) as India's largest source of remittances. The US contributed 27.7% of total remittances to India, surpassing the UAE's contribution of 19.2%. This shift is attributed to an increase in skilled professionals migrating to advanced economies, leading to higher remittance inflows from countries like the US, the UK, Canada, and Australia, while Gulf Cooperation Council (GCC) nations' share has decreased.

In February 2025, India's Wholesale Price Index (WPI) inflation stood at 2.38%. This increase was driven by higher prices in food products, textiles, and manufacturing. Additionally, the WPI Food Index dropped, and food inflation declined from 7.47% to 5.94%. The Fuel & Power index rose by 2.12%, while Primary Articles decreased by 1.74%, and Manufactured Products saw a 0.42% increase month-over-month.

According to Morgan Stanley, India’s GDP is projected to reach $5.7 trillion by 2028, making it the third-largest economy globally, surpassing Germany and Japan. Currently, India is ranked fifth but is expected to overtake Japan by 2026 to become the fourth-largest economy. This growth is driven by strong macroeconomic policies, improved infrastructure, and a growing consumer market, which will increase India’s share of global GDP from 3.5% in 2023 to 4.5% in 2029.

Moody’s Ratings has projected that India’s GDP growth will exceed 6.5% in the fiscal year 2025-26, an increase from 6.3% in FY 2024-25. This growth is expected to be driven by higher government capital expenditure, tax cuts to stimulate consumption, and monetary easing through interest rate cuts. Moody’s expects these factors will help India achieve robust economic growth despite challenges in the banking sector, including moderate deterioration in asset quality and stress in certain loan categories.

India, despite being the largest spice producer globally, holds just 0.7% of the global seasoning market. This low market share is largely due to the country's focus on raw spice exports rather than processed or value-added products. Only 48% of India's spice exports are processed, and there are concerns regarding the quality of products, such as instances of adulteration and pesticide residues. Addressing these issues and increasing value addition in exports could help India gain a larger share of the global seasoning market.