India's Trade Agreements and Economic Outlook

Trade Agreements

• Negotiations on India's Terms: India is engaging in trade agreements with countries like the US, New Zealand, Oman, Chile, Peru, and the EU, prioritizing national interests.
• UK-India Free Trade Deal: Expected to significantly boost trade and provide an edge in tariffs, enhancing exports.
• Benefits from US Trade Deal: The government is focused on protecting agriculture and industry interests, looking to benefit from reduced duties compared to competitors like Vietnam and China.

Economic Assessment

• Rural and Urban Consumption: Rural consumption is rising due to consistent agricultural growth and expected good monsoons. Urban consumption may increase with tax benefits and lower inflation, especially during festivals.
• Private and Government Investment: Private investment shows initial growth signals, influenced by increased government capital expenditure. Challenges include global uncertainties and overcapacity in some markets.

Growth Projections

• FY26 Growth Estimate: A 6.5% GDP growth is considered achievable despite global challenges, aided by domestic factors like low inflation and increased capital expenditure.

Pathway to Developed Economy by 2047

• Engines of Growth: Emphasis on investment and export growth, efficiency in capital usage, and productivity enhancement.
• Opportunities: Despite global trade uncertainties, India has potential in exports, leveraging its young workforce and advancements in technology.
• Focus Areas: Education and skill development are crucial, alongside creating quality employment for inclusive growth.

Integration with Global Value Chains

• Global Trends: India stands to gain from global industrial diversification, supply chain restructuring, and the China+1 strategy.
• Government Role: Policies are in place to enhance India's integration into global value chains.