Around the market.

Impact on garment exports

The Indian apparel industry's weakness on this front has led to a decline in the share of global exports amid growing demand for garments made of mixed synthetics in developed countries. A report released by the research institute Global Trade Research Initiative has stated that India's apparel industry cannot grow properly due to lack of synthetics. Thus, clothes made of synthetics have now become a favorite in the fashion industry. According to the report, 70 percent of the clothes bought by developed countries are made of mixed synthetics. But their share in Indian exports is less than 40 percent. Which is the main reason for India's weak garment exports. India's apparel exports in 2023 were $14.5 billion, far below China's $114 billion, the European Union's $94.4 billion, Vietnam's $81.6 billion, and Bangladesh's $43.8 billion.

The fiscal deficit target will be achieved

The government has spent only three-fourths of the total revised estimate in the 10 months of the current financial year. According to these latest figures from the Controller General of Accounts, the government now has ample room to spend more in February-March. The fiscal deficit for the April-January 2024 fiscal year stood at Rs 11 lakh crore, about 64 percent of the revised estimate. It was 67.8 percent in the same period last year. According to economists, it can be estimated that the fiscal deficit target can be achieved even if there is an increase in expenditure in February-March. However, if this expenditure is not increased, the fiscal deficit will remain below the target. During April-January in FY 2024, both revenue and capital expenditure were about 75 percent of the target. Experts say that the remaining amount can be spent in the next 2 months, with enough projects available for investment through capex. Capital expenditure has increased by 26.5 percent compared to last year. However, the government's capital expenditure in January 2024 fell to Rs. 476 billion, which in January 2023 is Rs. It was around 800 billion.

Export ban on processed petroleum will have no impact on India

Russia's 6-month ban on exports of processed petroleum will not affect India. Sources in the know said that the ban is unlikely to extend to cod oil. Russian officials confirmed this at a meeting held in December. Russia has accepted a proposal to impose sanctions for the next six months from March 1 to meet domestic demand. The latest ban is on processed petroleum, which will not affect us. However, more importantly, these restrictions are unlikely to extend to crude oil. Last year, Russia banned the export of petrol between September and November, to make up for shortages and control rising domestic prices. According to the data, Russia has been the largest oil supplier for 15 consecutive months till December.

GVA of agriculture sector slowed down for the first time

Agriculture and related activities have emerged as exceptions to the economic recovery. Kharif production in the country has been affected by monsoon uncertainty. In the October-December quarter of FY2023-24, the sector's gross value added (GVA) rose to 0.7 per cent for the first time in 19 quarters, compared to a growth of 1.6 per cent in the second quarter. Growth was 5.2 per cent in the third quarter of 2022-23, which has also played an important role in reducing GVA of agriculture and allied sectors. In the second advance estimate, the growth rate of agriculture and allied activities is projected to be only 0.7 per cent in 2023-24, the slowest expansion in eight years. A sluggish growth rate of 0.6 percent was recorded in 2015-16. In fact, the projected growth rate is less than half of the first advance estimate of 1.8 percent for 2023-24. The third quarter of the financial year is usually the kharif crop season.