Current Affairs - Economy

The government has authorized 100% Foreign Direct Investment (FDI) via the automatic route for the aircraft Maintenance, Repair, and Overhaul (MRO) sector. This move is aimed at boosting the MRO industry by increasing foreign investment. Alongside this, a uniform 5% IGST rate on aircraft parts and tools imports has been introduced, which enhances the sector’s competitiveness. The new policies also include extended export periods, reduced GST, exempted customs duty, and simplified clearance procedures, all designed to improve efficiency and attract investment.

India Ratings & Research (Ind-Ra) has increased its GDP growth forecast for FY25 to 7.5%, up from the previous forecast of 7.1%. This adjustment reflects stronger consumption demand and is supported by various factors such as government capital expenditure, improved corporate and bank balance sheets, private sector investment, and measures outlined in the union budget. Additionally, Private Final Consumption Expenditure is expected to rise to 7.4% due to favorable budget measures and a potentially above-normal monsoon, contributing to the overall growth projection.

In June 2024, the Index of Eight Core Industries (ICI) experienced a 4% increase compared to June 2023. This growth reflects positive performance across various key sectors, including Coal, Electricity, Natural Gas, Steel, Fertilizers, and Cement. The percentage increase indicates a solid expansion in the core industries, which is essential for understanding the broader economic activity and industrial growth trends in the country.

In 2023, India became the second-largest user of anti-dumping measures globally, following the US. This marked a significant shift as India reduced its average tariffs to 17%, down from 18.1% in 2022, while simultaneously increasing its use of anti-dumping duties. India initiated 45 anti-dumping investigations and imposed duties in 14 cases, indicating its proactive stance on protecting domestic industries from unfair trade practices despite the overall reduction in tariff levels.

According to a NITI Aayog report, India has set an ambitious target to achieve $500 billion in electronics manufacturing by 2030. This target comprises $350 billion from finished goods and $150 billion from components. The current electronics production in India stands at $101 billion, indicating significant growth potential in the sector. Achieving this goal is expected to boost employment to around 6 million jobs and substantially increase exports.