In September came the news that India had become the fifth-largest economy in the world. Going by predictions, it will become the third-biggest economy over the next five years. Surely it’s a moment of pride and glory for every citizen of this country - especially considering that, following independence, we remained a predominantly agricultural economy for 40 to 45 years; the trade liberalization process started only in the 1990s. Today, the service sector (IT, banking, education, healthcare, financial technology, hospitality, etc.), followed by manufacturing, is spearheading India’s economic transformation, putting it on the world map.
While we celebrate this achievement, we still have a long way to go. Per-capita GDP has to be increased massively in order to feel real, inclusive growth. There are upticks, but still a lot of ground needs to be covered.
The first two quarters of the financial year have seen double-digit growth. Given the global headwinds and expected slowdown, we should end the year with a GDP growth average of 7%, which could still be considered a job well done. At the heart of this story is robust consumption, which seems currently to be isolated from the high inflation/slow growth challenges. Despite interest rate hikes, monthly sales of new houses and vehicles have broken records this year, which explains the demand velocity. GST collections have also stood consistently at the higher end of the band, allowing government some extra muscle to finance big infra projects. Overall, India may look more resilient to any major global financial mishaps. But it simply cannot afford to take its eyes off the road.
As for business, raw material costs have soared for imported scrap owing to the rupee’s 7-8% loss against the US dollar. Also, exports of aluminium alloys, refined copper ingots and copper alloys to China and Japan have been muted owing to tapering of demand there. This has impacted some of the new capacities targeting exports which were due this year.
The discussions over having standards on aluminium and copper scrap have intensified. Apparently, primary producers are trying to push non-tariff barriers on to secondary by asking for unreasonable quality and sampling thresholds.
In the lead industry (India is one of world’s biggest secondary lead producers), smelters cheered as the government ratified the new Battery Waste Management Rules 2022, which give in-depth clarity on types of batteries, extended producer responsibility, audit trails, certifications, and so on. This will benefit organized players and widen their scope.
As the country celebrates Diwali and new year at the end of this month, let’s hope for some sparkle in business too.