India Economy Thread

This is fake news manufactured by Western media. At the very least, it lacks any credible basis.

There is a huge trade deficit between India and Russia (mainly due to oil trade). The trade deficit between India and China is even larger. ------ India does not have enough RMB to pay for Russian oil.

Russia has plenty of oil and weapons to export to India, but India does not have enough goods to export to Russia. In the future, the trade deficit will continue to widen.

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Russia stated: "Russia is ready to welcome an unlimited number of Indian workers."

My opinion is that this is merely a political statement. Its practical significance is very limited.

1. Russia lacks the massive capital needed to improve its industrial infrastructure. Due to political issues, they find it difficult to attract Western capital. Chinese capital will invest in Russia, but the projects and enterprises funded by Chinese capital will use Chinese and Russian workers, and perhaps even North Korean workers. They will not extensively employ Indian workers.

2. Xenophobia is deeply ingrained in Russian national identity. Indian communities, on the other hand, are known globally for their strong sense of solidarity. These are two extremely conflicting ideologies. They are unlikely to merge successfully.
It's hard to tell the authenticity of information online nowadays; this is a report from Reuters.
 
@CallSignMaverick @Thinking @vasanthm @Vkdindian1 @r3alist @Dalit @Meengla

Looks like Oman has got ModiFied!


The India–Oman Comprehensive Economic Partnership Agreement (CEPA), signed on December 18, introduces specific mobility provisions that expand market access for Indian professionals, executives and service suppliers seeking temporary entry and employment in Oman.

Under the CEPA, Oman has agreed to raise the quota for Intra-Corporate Transferees (ICTs) from 20% to 50%, allowing Indian companies operating in Oman to deploy a much larger share of senior executives, managers and specialists for overseas assignments.

The pact also marks a major shift for Contractual Service Suppliers (CSS). Indian professionals providing services under contracts in Oman will now be allowed to stay for up to two years, with the option of a two-year extension, compared with a much shorter 90-day limit earlier. Commerce ministry officials said this change would particularly benefit project-based work and long-term service delivery by Indian firms.

"The agreement enhances Mode-4 market access, which covers the temporary movement of individual professionals such as executives, specialists, service suppliers and business visitors, by easing entry conditions and extending permitted stays for Indian professionals in Oman," India's commerce ministry said in a statement.

In addition, the CEPA liberalises temporary entry for business visitors, independent professionals and service suppliers across a range of sectors, including accountancy, taxation, architecture, engineering, medical and allied services. These provisions are expected to support Indian companies in executing contracts, setting up operations and delivering specialised services in Oman.

Commerce and Industry Minister Piyush Goyal said the mobility chapter of the CEPA creates a fair and predictable visa regime for Indian skilled professionals, while fully respecting Oman’s sovereign employment and labour policies.

In a social media post, Goyal described the mobility commitments as a key outcome of the agreement, aimed at enabling smoother movement of talent and strengthening services trade between the two countries.

The commerce ministry said the mobility framework aligns with Oman’s Vision 2040, which seeks to attract skilled professionals and global expertise, while offering Indian talent longer tenures and greater certainty in one of the Gulf region’s key markets.

The mobility provisions are being seen as one of the most tangible gains of the India–Oman CEPA, going beyond traditional trade concessions to directly facilitate cross-border movement of professionals and skilled manpower.

On the tariff front, the CEPA mentions that Oman will offer zero-duty access on about 98% of its tariff lines, covering over 99% of India’s exports by value, giving Indian goods near-complete duty-free entry into the Omani market.

India, in turn, has committed to reducing or eliminating duties on around 78% of its tariff lines, accounting for roughly 95% of imports from Oman, while keeping sensitive sectors such as dairy, certain agricultural products and gold outside the scope of tariff concessions. Officials said the tariff commitments are expected to significantly enhance price competitiveness and boost bilateral trade flows.

Regards
 
How have India’s exports jumped 20 percent, despite Trump’s trade war?

Despite a 50 percent tariff, India’s exports to the US grew by more than one-fifth in November, as New Delhi looks to diversify its export markets.

Technicians work on the assembly line in a solar manufacturing hub in Greater Noida, on the outskirts of New Delhi, India

Technicians work on the assembly line in a solar manufacturing hub in Greater Noida, on the outskirts of New Delhi, India [File: Priyanshu Singh/Reuters]

By Usaid Siddiqui
Published On 17 Dec 202517 Dec 2025
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India’s exports increased by nearly 20 percent in November year-on-year, the country’s fastest growth in three years, driven primarily by exports to the United States and China.

The rise comes at a time when many countries are struggling to protect exports from the impact of steep US tariffs introduced by US President Donald Trump. Earlier this year, the US slapped an additional 25 percent tariff on India in retaliation for its continued purchases of Russian oil, Trump said, bringing total tariffs to 50 percent.

The November rise in Indian exports also comes as China recorded a trade surplus of more than $1 trillion, in part reflecting how global trade flows are being reshaped as a result of the Trump trade wars.

The export figures, reported this week by India’s Ministry of Commerce and Industry, reflected resilient demand for Indian goods and a strategy of diversifying to new export markets, the ministry said, an approach other countries are also adopting as they look to reduce reliance on the US.

What were India’s exports in November?​

India’s goods exports were valued at $38.13bn in November 2025, up about 19.4 percent year-on-year. This was a reversal of the 11.8 percent year-on-year decline in exports to $34.38bn that India recorded in October.

Imports, especially of gold, oil, and coal, also decreased by 1.88 percent, helping to shrink India’s goods trade deficit to about $24.5bn, its lowest level since June. In October, the trade deficit had ballooned to $41.68bn.

According to the Commerce Ministry, key drivers for strong exports included engineering goods, electronics and pharmaceuticals.

Where is India sending most of its exports now?​

Despite the new tariffs, India’s exports to the US – its largest single destination – grew by 22 percent in November, reaching approximately $7bn.

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The healthiest export sectors were engineering, electronics, jewellery and gems, and pharmaceuticals.

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“India has held fort on the US exports despite tariffs,” Commerce Secretary Rajesh Agrawal said at a press briefing.

Meanwhile, shipments to China surged by 90 percent year-on-year to $2.2bn. China recorded notably higher Indian imports, with electronics and engineering goods seeing sizeable increases.

The Commerce Ministry added that exports to Spain, the United Arab Emirates and Tanzania were also driving growth.

INTERACTIVE - India exports-1765949248


Why are exports to the US still booming?​

In part, November’s figures include Indian sales of goods that are not subject to US trade tariffs, Sambit Bhattacharyya, professor of economics at the University of Sussex in the United Kingdom, said.

“India’s exports of electronics and pharmaceuticals to the US increased, and these product categories are exempt from tariffs. Furthermore, tea, coffee, spices and other food items were also added to the exemption list, and all of them are experiencing steady growth.”

However, analysts also say continued healthy exports to the US signal that traders expect it to eventually relax tariffs on other goods, as the two countries are still working towards a trade deal.

In November, for example, New Delhi and Washington signed a long-term contract under which state-owned Indian companies IOC, BPCL and HPCL will buy 2.2 million metric tonnes of US liquefied petroleum gas (LPG) each year. That represents 10 percent of India’s total LPG imports.

Bhattacharyya said, “India is working with the US in securing a trade deal, and it is expected that average tariffs would come down and there will be more exemptions.

“Therefore, it is likely that there will be more concessions from the US side. It seems that US buyers remain optimistic about their Indian suppliers, and Indian exports remain competitive in the US market.”

Is India diversifying exports away from the US as well?​

Yes. Despite some positive signs regarding exports, uncertainty over US-India relations lingers. While the Trump administration claimed earlier this year that India had agreed to stop buying discounted Russian oil, it has shown little sign of doing so.

India has also resisted US pressure to open up sensitive sectors such as agriculture and dairy to US imports, insisting it will protect farmers and not “bow down” to tariff demands, while Trump is demanding greater market access.

In July this year, India and the UK signed the Comprehensive Economic and Trade Agreement under which tariffs have been reduced. Last year, India also signed the Trade and Economic Partnership Agreement with the European Free Trade Association countries – Switzerland, Norway, Iceland and Liechtenstein – under which they have linked markets in return for investment.

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India is currently in talks with Mexico to counter tariff policies there and create new export corridors. Mexico’s Senate on Wednesday approved tariff hikes of up to 50 percent from January on imports from India and other countries, a move analysts say is aimed at appeasing Washington.

It is also holding trade talks with Oman.

“India would also be looking to diversify into Eurasian and Central Asian markets,” Sussex University’s Bhattacharyya said.

Why else are India’s exports high?​

Bhattacharyya said exports were buoyed in November because the rupee was weaker.

“The rupee devalued against the dollar, which partially counterbalanced the negative effects of tariff on price competitiveness of Indian exports,” he said.

“What is reported is year-on-year growth, which is export figures for November 2025 compared to November 2024. November 2024 was the month of Red Sea crisis, which had a negative impact on exports to the US,” he added.

“Therefore, the November 2025 export growth figures may appear to be overly optimistic due to a low base.”

INTERACTIVE - India trade-1765949244


Which other countries are showing healthy exports despite US trade tariffs?​

China’s exports maintained growth in 2025, enabling the country to record a trade surplus of more than $1 trillion.

Earlier in the year, the US imposed tariffs of 145 percent on Chinese goods before reducing them to facilitate trade negotiations. Beijing has weathered the standoff by increasing exports to non-US markets, however.

Strong demand from Europe, Southeast Asia and other Asian markets for electronics, electric cars and rare-earth metals, among others, have offset a decline in US-bound shipments caused by the tariffs war.

China’s exports to the European Union also saw strong growth, up an annual 14.8 percent in November year-on-year, and an 8.2 percent rise in exports to countries in Southeast Asia.

For the first 11 months of 2025, China’s goods surplus rose 21.7 percent year-on-year, with high-tech products driving much of the expansion. Shipments in this category grew 5.4 percent faster than overall exports.

INTERACTIVE- What are China biggest exports trade 2024 world-1765285569


Vietnam has also registered export increases in 2025, with its trade surplus with the US reaching $121.6bn over the same period, despite the 20 percent tariffs imposed on its goods by the Trump administration.

In November, Vietnamese exports to the US jumped 22.5 percent year-on-year, outpacing the 15.1 percent growth in shipments to other markets, according to official statistics.

Are other countries diversifying away from the US?​

There has been increased momentum in multilateral and bilateral trade negotiations as countries seek alternatives to the US market.

Bhattacharyya said, “Countries are looking to diversify away from the US into Asian markets such as China, Japan and ASEAN. Trade deals is one way of ensuring trade and reducing trade uncertainty. Incentivising investments and opening up markets is also another way of securing trade.”

The EU has signed a trade deals with Latin American bloc Mercosur, Mexico and Indonesia. The deals include cutting or phasing out most tariffs on goods, widening access to markets for industrial and agricultural exports, as well as environmental and labour commitments.
 
$4.5 bn project.
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One area where I have been somewhat disappointed with the Modi govt is the rather long delay in getting its policies on oil & gas E&P, coal mining and mining of metals, REE etc in place. We need to substantially boost our domestic energy and mining output to cut down our structural trade deficit.

Regards
 
Need more labour reforms, the new labour bill that's been passed is in the right direction but they seem like baby steps...
 
KEY POINTS
  • In under 24 hours, India received investments of more than $50 billion from Amazon and Microsoft.
  • Google is investing $15 billion, while AI companies like ChatGPT, Google and Perplexity are offering free access to AI tools for millions of Indians.
  • India has abundance of resources for data centers, large talent and digital user pool, and market opportunity.
Big Tech is doubling down on investing billions in India, drawn by its abundance of resources for building data centers, a large talent and digital user pool, and market opportunity.

In under 24 hours, Microsoft and Amazon pledged more than $50 billion toward India's cloud and AI infrastructure, while Intel on Monday announced plans to make chips in the country to capitalize on its growing PC demand and speedy AI adoption.
While India trails the U.S. and China in the race to develop a native AI foundational model, and lacks a large domestic AI infrastructure company, it wants to leverage its expertise in the information technology sector to create and deploy AI applications at enterprise level, also offering Big Tech companies a huge opportunity.

Having a model or computing is not enough for any enterprise to use AI effectively, and it requires companies making application layer and a large talent pool to deploy them, S. Krishnan, secretary at India's Ministry of Electronics and Information Technology, told CNBC.

Stanford University ranks India among the top four countries along with the U.S., China and the UK in the global and national AI vibrancy ranking. GitHub, a community of developers, has ranked India at the top with the global share of 24% of all projects.

India's opportunity lies more in "developing applications" which will be used to drive revenues for AI companies, Krishnan said.

On Tuesday, Microsoft announced $17.5 billion in investment in the country, spread over 4 years, aimed at expanding hyperscale infrastructure, embedding AI into national platforms, and advancing workforce readiness.

"This scale of capex gives Microsoft first‑mover advantage in GPU‑rich data centers while making Azure the preferred platform for India's AI workloads, as well as deepening alignment with the government's AI public infrastructure push," said Tarun Pathak, research Director at Counterpoint Research.

Amazon on Wednesday announced plans to invest over $35 billion, on top of the $40 billion it has already invested in the country.

Over the past few months, AI and tech majors such as OpenAI, Google, and Perplexity have offered their tools for free to millions in India, with Google also firming up its plans to invest $15 billion toward building data center capacity for a new AI hub in southern India.
"India combines a huge digital user base, rapidly growing cloud and AI demand, and a high-talent IT ecosystem that can build and consume AI at scale, making it more than just a market for users and instead a core engineering and deployment hub," Pathak said.

Data center opportunity​

India has several advantages when it comes to building data centers. Markets such as Japan, Australia, China and Singapore in the Asia Pacific region have matured. Singapore, one of the oldest data center hubs in the region, has limited room to deploy large-scale data centers due to land availability issues.

India has abundant space for large-scale data center developments. When compared with data center hubs in Europe, power costs in India are relatively low. Coupled with India's growing renewable energy capacity — critical for power-hungry data centers — and the economics begin to look compelling.

Local demand, fueled by the rise of e-commerce — a major driver of data center growth in recent years — and potential new rules for storing social media data, strengthens the case.

Put simply: India is entering a sweet spot where global cloud providers, AI players, and domestic digitalization all converge to create one of the world's hottest data center markets.

"India is a pivotal market and one of the fastest‑growing regions for AI spending in Asia Pacific," said Deepika Giri, associate vice president and head of research, big data & AI, at International Data Corporation.

"A major gap, and therefore a significant opportunity, lies in the shortage of suitable compute infrastructure for running AI models," she added. Big Tech is looking to capitalize on the infrastructure opportunity in India by investing heavily in the cloud and data center space.

Global companies are expanding capacities closer to service bases in IT cities such as Bangalore, Hyderabad and Pune from traditional centers like Mumbai and Chennai which are closer to landing cables, as they build data centers in India for the world, Krishnan said.
 

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