India Economy Thread
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vasanthm
SpeedLimited
BRICS CBDCs aren’t a serious thing, that part is overhyped. But the rest is real. A lot more trade is now settling without the dollar, India dumped about $50bn of US Treasuries, and even brought back physical gold from the UK in a short span.
Pakistanis will say India is acting under Western pressure, yada yada. Where as India follows its own interests. We’re not going to do dumb, loud chest thumping just to score brownie points. These shifts are happening quietly in the background.
chinasun
Registered Member
EU, India set for historic trade deal amid US tariffs
In what's been called a victory for free trade, the EU and India are set to agree on "the mother of all deals" and a defense pact that aims to lure India away from its close political and military ties to Russia.
At Khan Market in New Delhi, Atul Mehra was optimistic that a deal between the European Union, the world's single largest market, and India, the world's fastest growing major economy, will revive his gems and jewelry business. He lost a quarter of his earnings last year, after US President Donald Trump imposed 50% tariffs on his country.
"We have suffered massive losses since the tariffs, people in the US were our major clients," he told DW. "And we hope that a deal with the Europeans will help us, and everybody."
Vishnu Gupta, a garment shop owner on the same street who has business all over India, said the deal would allow him to expand his trade and find new markets.
While the US has said the high tariffs are meant to dissuade India from buying Russian crude oil, it appears the EU has adopted a different approach to lure India away from Moscow's orbit — more trade and stronger defense ties.
In what's been called a victory for free trade, the EU and India are set to agree on "the mother of all deals" and a defense pact that aims to lure India away from its close political and military ties to Russia.
At Khan Market in New Delhi, Atul Mehra was optimistic that a deal between the European Union, the world's single largest market, and India, the world's fastest growing major economy, will revive his gems and jewelry business. He lost a quarter of his earnings last year, after US President Donald Trump imposed 50% tariffs on his country.
"We have suffered massive losses since the tariffs, people in the US were our major clients," he told DW. "And we hope that a deal with the Europeans will help us, and everybody."
Vishnu Gupta, a garment shop owner on the same street who has business all over India, said the deal would allow him to expand his trade and find new markets.
While the US has said the high tariffs are meant to dissuade India from buying Russian crude oil, it appears the EU has adopted a different approach to lure India away from Moscow's orbit — more trade and stronger defense ties.
Sam6536
Registered Member
There's a lot of scope for growth in Indo-European relations. In the recent years the balance of trade was skewed in India's favour due to export of refined Russian oil. It'll be better for both parties to diversify the trade.
A military deal might only give India access to the EU's Safe fund.
Attachments
SoulSpokesman
Trusted Member
My dear friend Professor Riazul Haq sb's take in his own inimitable style on the real state of affairs of the Indian economy.
www.riazhaq.com
Ruling politicians in New Delhi continue to hype their country's economic growth even as the Indian currency hits new lows against the US dollar, corporate profits fall, electrical power demand slows, domestic savings and investment rates decline and foreign capital flees Indian markets. The International Monetary Fund (IMF) has questioned India's GDP and independent economists Professors Arun Kumar and Ashoka Modi and investment banker Ruchir Sharma have detailed why the Indian official data can not be trusted. It seems that the BJP-led government of Prime Minister Narendra Modi is fast losing credibility by politicizing the civilian bureaucracy and the military brass to project their economic and military failures as successes.
Beyond the disputed claim of being the "fourth largest economy", the Modi government's failure on the national health and wellness front is also getting more attention. “Air is unbreathable. Water is undrinkable. Food is adulterated. What’s the point of becoming the 4th largest economy?” asked India-American technology entrepreneur Sabeer Bhatia in an X message recently. Gita Gopnath, Harvard professor of economics, said at the World Economic Forum in Davos this week that the economic impact of pollution on India is more severe than the effects of tariffs imposed on the country. “About 1.7 million lives are lost every year in India because of pollution. That’s 18% of the total deaths in India,” Gopinath said, quoting a World Bank study. “Even from an international investor’s perspective … the pollution holds you back.”
An international badminton tournament in India has brought global spotlight on the lack of basic hygiene in India. Foreign players complained about dusty floors, dirty courts, bird droppings and unhygienic conditions at the India Open in New Delhi. “I think the floors are dirty. There is a lot of dirt on the courts. There’s bird excrement. There are birds flying around in the arena,” said 28 year-old Denmark women’s singles player Mia Blichfeldt. Andres Antonson, world number three badminton player, withdrew from the India Open Super 750 in New Delhi for the third consecutive year, choosing to pay a $5,000 fine. He cited "extreme" hazardous air pollution in Delhi as the reason for skipping the mandatory tournament, arguing it is not a safe place to hold the event.
The IMF has recently expressed doubts about Prime Minister Narendra Modi's BJP government's GDP data. It has particularly questioned the government's statistical methodologies, inflation measurement, and the estimates of the informal economy used in reporting the country's gross domestic product. Professor Arun Kumar of Jawaharlal Nehru University believes the IMF's concerns are valid. He thinks the real size of India's economy is only half of what is officially claimed. “The economy is almost 50% wrong – when the government says it’s $3.8 trillion, my estimate is it is probably still $2.5 trillion because we are overestimating the unorganized sector, which is actually declining. This is building up over a period of time,” Kumar told Indian journalist Karan Thapar.
In its recent assessment, the International Monetary Fund (IMF) has given a "C" grade to India's national accounts. In particular, the IMF has raised the issue of the government using 2011-12 as the base year as being outdated, the discrepancy between production and consumption data and the use of Wholesale Price Index, and not a Producer Price Index, to deflate many economic activities to derive real GDP from nominal GDP.
Corporate profits of Indian firms are growing at a much slower pace than the 8.2% GDP growth in its most recent quarter. Net income for Nifty 50 Index firms likely rose 1.1% in the three months through Dec. 31 from a year earlier, according to analyst estimates compiled by Bloomberg. That would be the slowest pace in five quarters, weighed down by deteriorating margins for banks. Falling profits and declining currency are causing foreign capital to flee Indian markets. Foreign Portfolio Investors (FPIs) pulled out over $20 billion from Indian equities in 2025, marking a severe, sustained withdrawal that has continued into 2026. Net Foreign Direct Investment (FDI) has seen consecutive monthly outflows, including $1.67 billion in October and $446 million in November 2025. Investment banker Ruchir Sharma wrote about it in a Financial Times op ed titled "India needs to import more capital and export fewer workers". Ruchir wrote: "Most strikingly, corporate revenue normally grows (or shrinks) with the economy — in any country. But last year corporate revenue growth for listed companies in India decelerated to barely half the GDP growth rate"
The source of the biggest error is the way India estimates the informal economy which, including agriculture, accounts for almost 45% of GDP. To do so, India uses the formal sector as a proxy to estimate the performance of the informal sector. But if the two sectors are moving in opposite directions, as has happened after demonetization, GST imposition and the pandemic, you could end up overestimating the unorganized sector.
Indian-American economist Ashoka Mody, author of "India is Broken", has argued that the current unemployment crisis in India is a direct result of the destruction of the informal sector, particularly the mom and pop stores that employed a large number of Indians.
Questions about the veracity of India's official GDP figures are not new. These have been raised by many top economists. For example, French economist Thomas Piketty argues in his best seller "Capital in the Twenty-First Century that the GDP growth rates of India and China are exaggerated. Picketty writes as follows:
"Note, too, that the very high official growth figures for developing countries (especially India and China) over the past few decades are based almost exclusively on production statistics. If one tries to measure income growth by using household survey data, it is often quite difficult to identify the reported rates of macroeconomic growth: Indian and Chinese incomes are certainly increasing rapidly, but not as rapidly as one would infer from official growth statistics. This paradox-sometimes referred to as the "black hole" of growth-is obviously problematic. It may be due to the overestimation of the growth of output (there are many bureaucratic incentives for doing so), or perhaps the underestimation of income growth (households have their own flaws)), or most likely both. In particular, the missing income may be explained by the possibility that a disproportionate share of the growth in output has gone to the most highly remunerated individuals, whose incomes are not always captured in the tax data." "In the case of India, it is possible to estimate (using tax return data) that the increase in the upper centile's share of national income explains between one-quarter and one-third of the "black hole" of growth between 1990 and 2000. "
Regards
Independent Economists Expose Modi's Fake GDP
News, analysis and opinions about India, Pakistan, US, Canada, Europe, Mid East, South Asia, Silicon Valley, High Technology, Economy, Politics, World
Ruling politicians in New Delhi continue to hype their country's economic growth even as the Indian currency hits new lows against the US dollar, corporate profits fall, electrical power demand slows, domestic savings and investment rates decline and foreign capital flees Indian markets. The International Monetary Fund (IMF) has questioned India's GDP and independent economists Professors Arun Kumar and Ashoka Modi and investment banker Ruchir Sharma have detailed why the Indian official data can not be trusted. It seems that the BJP-led government of Prime Minister Narendra Modi is fast losing credibility by politicizing the civilian bureaucracy and the military brass to project their economic and military failures as successes.
Beyond the disputed claim of being the "fourth largest economy", the Modi government's failure on the national health and wellness front is also getting more attention. “Air is unbreathable. Water is undrinkable. Food is adulterated. What’s the point of becoming the 4th largest economy?” asked India-American technology entrepreneur Sabeer Bhatia in an X message recently. Gita Gopnath, Harvard professor of economics, said at the World Economic Forum in Davos this week that the economic impact of pollution on India is more severe than the effects of tariffs imposed on the country. “About 1.7 million lives are lost every year in India because of pollution. That’s 18% of the total deaths in India,” Gopinath said, quoting a World Bank study. “Even from an international investor’s perspective … the pollution holds you back.”
An international badminton tournament in India has brought global spotlight on the lack of basic hygiene in India. Foreign players complained about dusty floors, dirty courts, bird droppings and unhygienic conditions at the India Open in New Delhi. “I think the floors are dirty. There is a lot of dirt on the courts. There’s bird excrement. There are birds flying around in the arena,” said 28 year-old Denmark women’s singles player Mia Blichfeldt. Andres Antonson, world number three badminton player, withdrew from the India Open Super 750 in New Delhi for the third consecutive year, choosing to pay a $5,000 fine. He cited "extreme" hazardous air pollution in Delhi as the reason for skipping the mandatory tournament, arguing it is not a safe place to hold the event.
The IMF has recently expressed doubts about Prime Minister Narendra Modi's BJP government's GDP data. It has particularly questioned the government's statistical methodologies, inflation measurement, and the estimates of the informal economy used in reporting the country's gross domestic product. Professor Arun Kumar of Jawaharlal Nehru University believes the IMF's concerns are valid. He thinks the real size of India's economy is only half of what is officially claimed. “The economy is almost 50% wrong – when the government says it’s $3.8 trillion, my estimate is it is probably still $2.5 trillion because we are overestimating the unorganized sector, which is actually declining. This is building up over a period of time,” Kumar told Indian journalist Karan Thapar.
In its recent assessment, the International Monetary Fund (IMF) has given a "C" grade to India's national accounts. In particular, the IMF has raised the issue of the government using 2011-12 as the base year as being outdated, the discrepancy between production and consumption data and the use of Wholesale Price Index, and not a Producer Price Index, to deflate many economic activities to derive real GDP from nominal GDP.
Corporate profits of Indian firms are growing at a much slower pace than the 8.2% GDP growth in its most recent quarter. Net income for Nifty 50 Index firms likely rose 1.1% in the three months through Dec. 31 from a year earlier, according to analyst estimates compiled by Bloomberg. That would be the slowest pace in five quarters, weighed down by deteriorating margins for banks. Falling profits and declining currency are causing foreign capital to flee Indian markets. Foreign Portfolio Investors (FPIs) pulled out over $20 billion from Indian equities in 2025, marking a severe, sustained withdrawal that has continued into 2026. Net Foreign Direct Investment (FDI) has seen consecutive monthly outflows, including $1.67 billion in October and $446 million in November 2025. Investment banker Ruchir Sharma wrote about it in a Financial Times op ed titled "India needs to import more capital and export fewer workers". Ruchir wrote: "Most strikingly, corporate revenue normally grows (or shrinks) with the economy — in any country. But last year corporate revenue growth for listed companies in India decelerated to barely half the GDP growth rate"
The source of the biggest error is the way India estimates the informal economy which, including agriculture, accounts for almost 45% of GDP. To do so, India uses the formal sector as a proxy to estimate the performance of the informal sector. But if the two sectors are moving in opposite directions, as has happened after demonetization, GST imposition and the pandemic, you could end up overestimating the unorganized sector.
Indian-American economist Ashoka Mody, author of "India is Broken", has argued that the current unemployment crisis in India is a direct result of the destruction of the informal sector, particularly the mom and pop stores that employed a large number of Indians.
Questions about the veracity of India's official GDP figures are not new. These have been raised by many top economists. For example, French economist Thomas Piketty argues in his best seller "Capital in the Twenty-First Century that the GDP growth rates of India and China are exaggerated. Picketty writes as follows:
"Note, too, that the very high official growth figures for developing countries (especially India and China) over the past few decades are based almost exclusively on production statistics. If one tries to measure income growth by using household survey data, it is often quite difficult to identify the reported rates of macroeconomic growth: Indian and Chinese incomes are certainly increasing rapidly, but not as rapidly as one would infer from official growth statistics. This paradox-sometimes referred to as the "black hole" of growth-is obviously problematic. It may be due to the overestimation of the growth of output (there are many bureaucratic incentives for doing so), or perhaps the underestimation of income growth (households have their own flaws)), or most likely both. In particular, the missing income may be explained by the possibility that a disproportionate share of the growth in output has gone to the most highly remunerated individuals, whose incomes are not always captured in the tax data." "In the case of India, it is possible to estimate (using tax return data) that the increase in the upper centile's share of national income explains between one-quarter and one-third of the "black hole" of growth between 1990 and 2000. "
Regards
CallSignMaverick
Registered Member
SoulSpokesman
Trusted Member
Modi ka bolbaala, Trump ka munh kaala
www.hindustantimes.com
Indo-EU trade deal signed.
Regards
India-EU trade deal signed: Why it's 'mother of all' agreements that has drawn US attention
India and the EU have signed a free trade agreement which is expected to boost trade, eliminating or reducing tariffs on over 96 per cent of EU exports.| India News
www.hindustantimes.com
Indo-EU trade deal signed.
Regards
vasanthm
SpeedLimited
Modi ka bolbaala, Trump ka munh kaala
India-EU trade deal signed: Why it's 'mother of all' agreements that has drawn US attention
India and the EU have signed a free trade agreement which is expected to boost trade, eliminating or reducing tariffs on over 96 per cent of EU exports.| India News
Indo-EU trade deal signed.
Regards
This deserves its own thread to discuss and share updates, would suggest someone create it.. will take another year to operationalise as it needs to pass through the EU parliament
'Hope to implement FTA within this calendar year': Piyush Goyal on India-EU trade pact - The Times of India
India-Europe FTA Live Updates: Today’s summit at Hyderabad House marks the end of an 18-year journey, as India and the European Union officially fina
timesofindia.indiatimes.com
Some details of deal. Ofcourse deal is useless if you don't have means to capitalize. I hope industries are expanding and increasing efficiency by the time this takes effect..
Sam6536
Registered Member
Carney is visiting India in March. Trade deal with Canada is on the cards.Modi ka bolbaala, Trump ka munh kaala
India-EU trade deal signed: Why it's 'mother of all' agreements that has drawn US attention
India and the EU have signed a free trade agreement which is expected to boost trade, eliminating or reducing tariffs on over 96 per cent of EU exports.| India News
Indo-EU trade deal signed.
Regards
Israel FTA will probably happen in the next year or so. Netanyahu will probably visit this year.
vasanthm
SpeedLimited
'Hope to implement FTA within this calendar year': Piyush Goyal on India-EU trade pact - The Times of India
India-Europe FTA Live Updates: Today’s summit at Hyderabad House marks the end of an 18-year journey, as India and the European Union officially fina
Some details of deal. Ofcourse deal is useless if you don't have means to capitalize. I hope industries are expanding and increasing efficiency by the time this takes effect..
I’d expect a lot of EU firms to add India to their footprint to derisk supply chains. With lower tariffs both ways, you’ll see components moving back and forth between India and the EU for assembly and value add. That’s where the real gains is.
vasanthm
SpeedLimited
I’ve been saying this for a while, any disruption to the global trade order makes India’s inefficiencies relatively more acceptable and that plays to India’s strengths.
CallSignMaverick
Registered Member
CallSignMaverick
Registered Member
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