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Knight Frank India's latest report reveals a concerning surge in the number of ghost malls in India, with a high vacancy rate of 36.2 per cent, categorized as Grade C. The report highlights that the number of ghost shopping malls has increased to 64 in 2023 from 57 in 2022, while the number of malls in tier-1 cities has decreased by 3 per cent due to some being demolished for residential purposes. The report estimates that these underperforming malls have incurred a sunk cost of $799 million in 2023, up from $524 million in 2022. Factors contributing to the decline of malls include poor design, bad management, and competition from high-grade malls. The report also emphasizes the growing disparity between well-performing malls and those with high vacancies, prompting a move towards repurposing or demolishing these struggling malls. 
India's Commerce Ministry has engaged in discussions with various departments and trade experts to establish standard operating procedures (SOPs) for negotiating free trade agreements (FTAs). A two-day 'Chintan Shivir' was organized to address FTA strategy and SOPs for trade negotiations, with suggestions including comprehensive consultations with public and private sector players. The importance of timely sharing FTA details with line ministries was emphasized to prepare views on agreements. India is actively negotiating trade pacts with the UK, EU, Peru, Australia, and the Eurasian Economic Union. In 2023-24, India's goods and services exports reached a record high of $778.2 billion, showcasing a slight increase from the previous year. Notably, India has signed trade agreements with Mauritius, the UAE, Australia, and the European Free Trade Association since 2021.
Foreign Portfolio Investors (FPIs) have offloaded nearly $6 billion in Indian equities since April 19, with net outflows reaching ₹28,242 crore by May 17, amid election outcome jitters. Despite the India VIX doubling to 20.6, analysts remain unconcerned, citing a lower fear gauge compared to previous election cycles. Domestic institutions have countered the FPI selling spree in May 2024 with increased buying, driven by strong SIP inflows. V K Vijayakumar of Geojit Financial Services attributes the FPI selling to the outperformance of Hong Kong's Hang Seng Index, prompting a shift of funds from expensive markets like India to cheaper markets. The uncertainty surrounding the election outcome has contributed to heightened volatility in the Indian market, with expectations of a dramatic change in FPI equity flows post-election results.
A committee has been formed by the Petroleum & Natural Gas Regulatory Board (PNGRB) in India to develop a strategy for the growth of the natural gas sector and ensure that infrastructure is not under-utilized. The committee, led by Former Chairperson of PNGRB, D K Sarraf, aims to increase the share of natural gas in the country's energy basket from 6% to 15% by 2030. With a focus on Vision 2040, the committee will assess the demand and supply of natural gas infrastructure in India, including pricing, transportation, and connectivity to demand centers. The report is expected within three months and will address various aspects of the gas value chain, domestic vs. imported gas availability, and the need for structured infrastructure development to meet increasing demand. This initiative comes as the government pushes for the sector's expansion and invites bids for gas network projects, emphasizing the importance of aligning supply with demand to prevent underutilization of infrastructure.
The Reserve Bank of India, in its monetary policy review in April, projected a GDP growth rate of 7 per cent for the fiscal year 2023-24. India Ratings and Research expects the GDP growth rate for the March quarter to be 6.7 per cent, with an overall projection of 6.9-7 per cent for the fiscal year. The GDP numbers for the fourth quarter and the provisional estimates for the fiscal year are set to be released by the Government on May 31. The country's economy showed growth rates of 8.2 per cent, 8.1 per cent, and 8.4 per cent in the first three quarters of 2023-24. The principal economist at India Ratings and Research, Sunil Kumar Sinha, highlighted the wedge between GVA and GDP growth rates, attributing the higher tax collection as a significant factor. Despite uncertainties in the global economy, the Finance Ministry remains optimistic about India's economic performance, citing resilient growth and steady external sector performance.
In April, India's merchandise exports saw a 1% increase to $34.99 billion, although the trade deficit widened to $19.1 billion, the highest in four months. The government has recovered about ₹852 crore under an amnesty scheme for exporters to settle defaults in export obligations. Small exporters have requested an extension of the scheme until September. The new foreign trade policy allows for a one-time settlement of defaults in export obligations. Imports also rose by 10.25% to $54.09 billion, driven by a surge in gold imports. Total exports in goods and services for 2023-24 reached $778.21 billion, with merchandise exports at $437.1 billion and services exports at $341.1 billion. The figures are expected to increase further as data compilation continues.
Sanjiv Puri, Chairman and Managing Director of ITC Limited, has been elected as the new President of the Confederation of Indian Industry (CII) for the term 2024-25. Rajiv Memani, Chairman of EY India, has been appointed as the President Designate, while R Mukundan, Managing Director & CEO of Tata Chemicals Limited, has taken on the role of Vice President. Puri, an alumnus of IIT Kanpur and Wharton School of Business, has a strong background in agriculture and sustainability initiatives. Memani, a trusted advisor to various organizations, will bring his expertise in mergers and acquisitions to his new role. The CII, under the leadership of these new office bearers, is expected to focus on driving innovation and inclusive growth in the Indian industry.
In a bid to revive the age-old tradition of producing attar, Amazon and Boond Fragrances have joined forces to bring natural perfumes back to the forefront. Once the perfume capital of India, Kannauj in Uttar Pradesh saw a decline in attar production due to the influx of alcohol-based imports. However, the Tandon siblings, Krati and Varun, stepped in during the Covid pandemic to promote natural and oil-based perfumes, creating Boond Fragrances. Sourcing raw materials from local farmers, the siblings have reintroduced attar using traditional techniques like _Degh-Bhapka_, with the help of Amazon's marketplace to reach a wider audience. Boond's products, including the evocative _Maati_, have garnered global interest, providing employment opportunities for artisans and reviving the essence of Kannauj's perfume-making heritage.
The Food Safety and Standards Authority of India (FSSAI) has issued a warning against the use of calcium carbide for artificial ripening of fruits due to its health risks, including dizziness, vomiting, and skin ulcers. The FSSAI has directed food safety departments across all states and Union Territories to take strict action against violators under the FSS Act, 2006. The advisory comes during the crucial mango season, emphasizing the dangers of using calcium carbide, which releases harmful acetylene gas containing arsenic and phosphorus. The FSSAI has highlighted the safer alternative of ethylene gas for fruit ripening and urged traders, fruit handlers, and Food Business Operators to comply with the regulations to ensure food safety.
In a speech at the CII's Annual Business Summit 2024, Anantha Nageswaran, Chief Economic Advisor to India's Finance Ministry, emphasized the importance of preparing the country's youth for the impact of Artificial Intelligence (AI) on their lives and employment prospects. Nageswaran highlighted the need to focus on the physical health of the youth cohort alongside AI readiness to achieve India's goal of becoming a developed country by 2047. He also addressed challenges related to economic growth, energy security, and global financial stability, stressing the importance of skilling, employability, and manufacturing to sustain high levels of growth. Nageswaran expressed confidence in addressing employment generation challenges through improved infrastructure and bank balance sheets, while acknowledging the need for continued efforts in skilling and learning outcomes. The government's approval of an AI mission with a significant budget allocation reflects India's commitment to preparing for the future of technology and job opportunities in the sector.
In a speech at the CII’s Annual Business Summit, Chief Economic Advisor V Anantha Nageswaran warned against the sachetisation of futures and options (F&O) trade, emphasizing the need for different financial literacy for such investments. Nageswaran highlighted the importance of ensuring that the capital market grows in areas where Indian household savings can be utilized productively, cautioning against the risks associated with F&O trading. This comes amidst a decline in net household savings and a significant increase in investments in mutual funds and shares. Finance Minister Nirmala Sitharaman also expressed concerns about the unchecked growth in retail F&O trading, urging regulatory bodies to safeguard investors' interests. Sebi chairperson Madhabi Puri Buch echoed these sentiments, emphasizing the need for a long-term investment strategy to ensure sustainable returns. Despite the surge in F&O trading participation during the pandemic, research shows that only a small percentage of individual traders have been profitable in this segment.
