Prasenjit Basu and Laavanya Sisaudia, analysts and economists at ICICI Securities, said, “Given the broad based cyclical rebound in engineering goods, textile and pharmaceutical exports, we expect merchandise exports of India to accelerate further through the rest of FY24 and into FY25.”

India’s merchandise exports were up 6.2 per cent YoY in October 2023 and 2.4 per cent on YoY basis in Aug-Oct’23 period, recovering slightly ahead of the rest of Asia’s exports, said a report by ICICI Securities. South Korea’s exports grew by 5.1 per cent on-year in October 2023 after 13 consecutive months of contraction, while Taiwan’s exports declined only 2.8 per cent YoY in Aug-Oct’23, although they were down 12.8 per cent YoY in Jan-Oct’23. China, however, was a slight exception with its goods exports declining 8.2 per cent YoY in Aug-Oct’23, worse than its Jan-Oct’23 contraction of 5.2 per cent YoY, similar to India’s 4.9 per cent YoY decline for Jan-Oct’23. 

Prasenjit Basu and Laavanya Sisaudia, analysts and economists at ICICI Securities, said, “Given the broad based cyclical rebound in engineering goods, textile and pharmaceutical exports, we expect India’s merchandise exports to accelerate further through the rest of FY24 and into FY25.”

Even as US import demand in Jan-Sep’23 weakened, it is now rebounding from its troughs even with the broad US economy weakening now, and this recovery in US and OECD demand will benefit Asia’s exports (including India’s). 

CAD to shrink to 0.4 per cent of GDP in FY24E

With services exports continuing to strongly outpace services imports, India’s services trade surplus expanded 21.7 per cent YoY in Apr-Oct’23. Further, since the merchandise deficit also declined by 12 per cent YoY, the current account deficit (CAD) is likely to have narrowed to about 0.7 per cent of GDP for the period, said ICICI Securities. “The final quarter of the fiscal year is usually the strongest for the current account balance, so we expect the CAD to shrink to 0.4 per cent of GDP for FY24 – assuming that Brent crude oil averages $90/bbl in the Dec’23-Mar’24 period. Should Brent settle near its current levels (USD 80.5/bbl), a current account surplus will be the likely outcome in FY24,” the analysis report stated. 

Exports, imports likely to strengthen in FY25

With Asia’s economies strengthening and the US Fed beginning to ease monetary policy by mid-CY24, the merchandise export recovery is likely to gather pace, said ICICI Securities. Nonetheless, it added, a cyclical recovery in the global economy (other than China) will still result in mildly higher commodity prices. Given the likely strengthening of Indian import demand next year, the CAD is likely to remain slightly below 1 per cent of GDP in FY25 despite the expected rebound in exports.

Services exports grow at a modest pace

Based on the RBI data, India’s services exports grew 9.1 per cent YoY in Jul-Sep’23 (Q2FY24), while services imports declined 3.5 per cent YoY – compared with 6.2 per cent YoY and -1.2 per cent YoY respectively in Q1FY24. Including the Oct’23 estimates, the services trade surplus in Apr-Oct’23 widened by 21.7 per cent YoY, thus continuing to contribute to a YoY reduction of the current account deficit (CAD).

Cotton textile exports accelerate sharply, synthetics resume growing

Cotton textiles began rebounding in Jul’23, and have accelerated notably in Aug-Sep’23 (+26.7 per cent YoY) and Oct’23 (+36.5 per cent YoY). Synthetic textiles also resumed growing in Oct’23 (+10.2 per cent YoY), but garment exports were still contracting. 

Pharma exports strengthen; refinery, jewellery past their cyclical trough

The pharmaceutical sector has seen steady export growth over the past eight years, and accelerated to 29.3 per cent YoY growth in Oct’23 – taking their growth for Apr-Oct’23 to 8.1 per cent YoY. Petroleum product exports, however, still declined 4.65 per cent YoY in Oct’23 (and -16.2 per cent% YoY in Apr-Oct’23), while jewellery exports declined 9.8 per cent YoY in Oct’23, and 22.3 per cent YoY in Apr-Oct’23. Yet both are well past their cyclical trough and close to resuming at least modest growth, the ICICI Securities analysis stated. 

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 If the  IEA’s  global  net-zero emissions target is  to be  achieved,  India  will need  an additional  $101 billion in funding, on top  of  the  amount needed to triple it,  the  Ember  report  said.  

 An agreement  to triple installed  renewable energy  capacity is expected to be one of the main  discussion  points  at the upcoming COP28 climate meeting in Dubai.  However,  highlighting the challenges in  achieving  such a transition, a new report  shows  that India  will  need an investment of about $293 billion to triple its  installed  renewable energy  capacity by  2019.  

  This  translates to  around  Rs 24 lakh crore. But  tripling  India’s  renewable capacity  may  not be an adequate contribution if the world  wants  to  move towards  a  carbon neutral path.  The International Energy Agency (IEA) net zero scenarios are contingent on India being able to do much more than just tripling its renewable capacity.  

 $293 billion needed for India’s tripling of renewables by 2030: Report 

 If the IEA global net zero pathways are to be met, India would require an additional financing of $101 billion, over and above the money required for tripling, as per the report by Ember.  

 Renewable energy 

 The tripling of global renewable energy installed capacity is one of the key targets being pushed for adoption at COP28. 

 An agreement on tripling of renewable energy installed capacity is expected to be one of the main points of discussion at the upcoming COP28 climate meeting in Dubai. But highlighting the challenges in effecting such a transition, a new report has found that India would need an investment of about $293 billion to triple its renewable energy installed capacity by 2030.  This  translates to  around  Rs 24 lakh crore. But  tripling  India’s  renewable capacity  may  not be an adequate contribution if the world  wants  to  move towards  a  carbon neutral path.  The International Energy  Agency’s  (IEA) net zero  emissions  scenarios  depend  on  India’s ability  to do  more than  simply triple  its renewable capacity.  

 A new report by Ember, a UK-based independent think tank  focusing  on climate  issues,  notes that India  has  set  a target of  tripling its renewable energy capacity  by  2030,  long  before  that target is recognized  as a mandatory global  target  to ensure that there is still  an opportunity. limit the increase in  global temperature  to below  1.5 degrees Celsius  compared to  pre-industrial times. India has announced  plans to reach 450 GW of  installed  renewable  energy  capacity by 2030, more than three times  its  current capacity of about 135 GW.  But if  it wants to meet  the  IEA’s  global  net-zero emissions targets,  India  will  need to  increase  its  installed  renewable  capacity to about 570 GW by 2030, Ember said.  This  would require an additional  $101 billion in funding, on top  of  the  amount needed to triple it.  

 “This  includes additional investments  of approximately $68 billion  in  solar, $8 billion  in  wind, $14 billion  in storage  and $11 billion  in additional  transmission  capacity.  This  takes  the total investment in this scenario to  about  $394 billion (about 32 lakh crore),” the report said. 

  Tripling installed  renewable energy  capacity  globally  is one of the key targets  proposed  for  COP28. The proposal was included in the  outcome of the  G20 summit  in New Delhi in September and  was later  endorsed by about 60  countries.  

 According to IEA estimates, this  single  measure  could  avoid about 7 billion  tons  of carbon dioxide emissions  by  2030. Installation of new renewable energy capacity  increases by 9 to 10% each year,  but  will  need to  nearly  doubled to reach  that goal. The goal is to triple it  by 2030.  

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  Babish Agarwal’s  Ola Electric, which he likens to  the  Tesla  of  the West,  has grown sales of electric scooters  from zero to 338,000  units  in about two  years and aims to list on the stock market.  

 Bhavish  Agarwal, India’s  answer to Elon Musk, is  hell-bent on bringing  millions of electric scooters  to market  and  leading the country  to a cleaner future.  But some  of his mechanics  can’t  keep  up.  

  Mr. Agarwal’s  Ola Electric, which he likens to  the  Tesla  of  the West, is  seeking to go public  after  selling electric scooters  from zero to 338,000  units  in about two years. The  technology  entrepreneur  promises  to banish  internal combustion  engines  (ICE) from India, where  two-wheelers dominate  the roads. 

  “We are ending  the ICE  era,”  the 38-year-old told Reuters ahead of the launch of  the  new Ola  electric scooter, which starts  at about  $1,000,  on  August  15,  India’s  Independence  Day. Ta.  He said the company, already valued at $5.4 billion, would quadruple its annual production capacity  of electric scooters  to 2 million  units  by  the beginning of the  year. 

  But there are some holes in Ola’s  rapid  journey. 

 Parts of the company’s nationwide network of over 400 service hubs which maintain and repair its EVs are showing signs of strain after the surge in sales, according to Reuters visits to 35 centres in 10 states between July and October, plus interviews with 36 Ola service staff and 40 customers. 

  Staff at more than half of those centres, mainly sites in the big metropolitan areas of Mumbai, Chennai and Bengaluru, said they had significant backlogs, with demand outstripping their workforce or their supply of spare parts, and repair waiting times ranging from three days to two weeks.  At an Ola workshop in Thane, among the biggest of the 14 centres in the Mumbai region, more than 100 e-scooters awaiting repairs were visible outside in a clearing, many parked in a muddy clearing gathering dust and littered with bird droppings. 

  Bhavish Aggarwal’s Ola Electric, which he likens to Tesla in the West, is zipping towards a stock-market listing after going from zero to 338,000 e-scooter sales in about two years.  

 Bhavish Aggarwal’s Ola Electric, which he likens to Tesla in the West, is zipping towards a stock-market listing after going from zero to 338,000 e-scooter sales in about two years. (Photo  from  Ola Electric website) 

 Bhavish  Agarwal, India’s  answer to Elon Musk, is  hell-bent on bringing  millions of electric scooters  to market  and  leading the country  to a cleaner future.  But some  of his mechanics  can’t  keep  up. 

  Mr. Agarwal’s  Ola Electric, which he likens to  the  Tesla  of  the West, is  aiming to go public  after  increasing sales of electric scooters  from zero to 338,000  in about two years. The  technology  entrepreneur  promises  to banish  internal combustion  engines  (ICE) from India, where  two-wheelers dominate  the roads.  

  “We are ending  the ICE  era,”  the 38-year-old told Reuters ahead of the  August  launch of  Ola’s  new  electric scooters, which start  at about  $1,000. 15th, India’s  Independence  Day.  He said the company, already valued at $5.4 billion, would quadruple its annual production capacity  of electric scooters  to 2 million  units  by  the beginning of the  year. 

  But there are some holes in Ola’s rapid journey.  

  Ola’s  nationwide network of  more than  400 service  centers service  and repair  electric vehicles,  according to Reuters visits to 35  centers  in 10 states  and  interviews with 36 Ola service  employees between July  and  October. Some areas are showing signs of congestion due to large-scale power outages. Sales skyrocketed and the number of customers reached 40.  

  Aggarwal, Ola’s  founder and  CEO, promised in January  that customers would be able to  drop off  their vehicles  at the  hub and receive same-day service in most cases.  In  an  August interview, he said customers  are “voting  with their wallets every  month”  by  purchasing Ola’s electric vehicles. However,  he acknowledged  that  service capacity  was an issue  and said Ola was  “aggressively” expanding  its service network by adding 100 new  centers  and hiring more technicians. 

  “We have the  most  products on the  market…and  we  need to expand  our service network,” he said. An Ola  spokeswoman  said the Reuters  report did not  accurately capture the  scope  and quality of the  company’s  robust and growing  services business.  

 Ravi Bhatia of  automotive consultancy  JATO Dynamics said a good service network  is essential  in India, the  world’s largest  two-wheeler market.  He added that technology-packed electric vehicles  are new to  Indians as they are  more sensitive to  shocks  and  shocks  than many  traditional  scooters and  motorcycles. The driving environment in  India can  certainly be challenging, with  hundreds of millions of people  using two-wheelers  to navigate  often congested and  potholed roads.  Ola  “needs to  build  its service  infrastructure  accordingly, otherwise  it  will  get hurt by word of mouth,”  Bhatia said. 

  “Tesla  for the West, Ola for the  rest.” 

 Agarwal has often declared, “Tesla is for the West, Ola is for the rest,”  and  he is  a man in a hurry.

 He  said  all new scooters and  motorcycles  sold in India could be electric by the end of 2025,  meaning that by 2030,  70% of new two-wheeler sales  would be electric. This significantly exceeds the government’s target. 

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  India’s merchandise  exports  also recorded a slight increase  in  October, rising 6.2%,  only the second  increase  in the  current  financial year. 

  Global goods  trade is  recovering thanks to  sales  of automobiles  and electronic  components,  the World Trade  Organization (WHO)  said in its quarterly Goods Trade Barometer report released on Monday. 

  The apex trade body said  the current  barometer index  of 100.7  is  higher than  the previous reading of 99.1  in August  last  year.  

 Barometer values  ​​above  100 are associated with above-trend  trading volume,  while barometer values  ​​below  100  indicate commodity trading  has  fallen below trend or will  fall below trend  in the  future  near  the. 

 “The strength of the  auto  and electronic components indices  can  be explained by  growing  global demand for electric vehicles, while the weak  performance of commodities can  be partly  attributed to This is  due to  the  weakening  real estate market while  interest rates remain  high.”  India is the  fastest growing market for  electric  vehicles.  

The Economic Survey 2022-23  indicates  that  India’s  domestic electric vehicle market will  witness  a  compound annual growth rate (CAGR)  of 49% from  2022  to  2030, with  sales of  10 million  units annually  by 2030.  The  WTO  has  predicted that  third quarter  trade statistics  will be released. rose  slightly  thanks to accelerating GDP growth in the  US  and China, even as  the  European  Union’s economic slowdown  continued to weigh on global demand. 

  Global  merchandise trade  volumes remained stable  in the second quarter of 2023, up  0.2% quarter-on-quarter  but still down  0.5%  year-on-year. 

  The  indicators that make up the barometer  are mixed, with some rising  significantly  above trend and others remaining  above  or below trend. The  largest increases  were  recorded  in the  automobile  production and  sales  index  (110.0) and electronic components trade (109.8). The  WTO said indexes  for air freight (100.3), export orders  (99.4)  and container shipping (98.0)  ended in line with trend  or slightly  lower,  while the  index  raw materials  (95.6)  fell  below  trend.  

  India’s merchandise  exports  also recorded a slight increase  in  October, rising 6.2%,  only the second  increase  in the  current  financial year. 

  Exports  fell  due to weak demand in Western economies as  high interest  rates  weighed on  consumption.  

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