Economy

The Reserve Bank of India's (RBI) recent rate cuts are expected to cause a slight contraction in the profitability of banks in FY26, according to a report by Crisil Ratings. The Return on Assets (RoA), a critical profitability metric, is forecasted to decline by 0.10-0.20 percentage points to 1.1-1.2% from a two-decade high of 1.3% in FY25. This reduction is largely attributed to a compression in Net Interest Margins (NIMs) as loan rates decrease faster than deposit rates.

In a bid to revolutionize India's agricultural practices, Union Agriculture Minister Shivraj Singh Chouhan has called for a more robust role for the country's 731 Krishi Vigyan Kendras (KVKs), which are the cornerstone of agricultural research and extension services. During a virtual dialogue, the minister emphasized the need for a six-point agricultural strategy aimed at boosting production, lowering costs, ensuring fair crop prices, and promoting sustainable farming practices.

As the U.S. escalates its trade war with China, imposing a staggering 145% tariff on Chinese goods, Indian exporters are finding themselves at a unique crossroads. With the U.S. tariffs making it increasingly difficult for Chinese exporters to maintain direct shipments to the U.S., American sourcing firms are looking towards India as a strategic partner to circumvent these burdensome costs.

India's ability to remain competitive despite the global tariff environment is a testament to its growing economic stature, according to Union Minister Jyotiraditya Scindia. In a recent interview, Scindia emphasized that India's vast domestic market, scale advantages, and focus on innovation will continue to drive its competitiveness. The country is not only resilient in the face of rising tariffs but is also poised to become the third-largest economy globally by 2028.

Crude oil prices faced downward pressure in early trade on Tuesday, with futures on the Multi Commodity Exchange (MCX) dipping by Rs 27 to Rs 5,254 per barrel. The decline reflects a broader weakening in global demand, as market participants adjust their positions amidst less-than-optimistic signals from overseas markets. This price drop is indicative of the volatility often experienced in the commodities market, where global economic factors, including shifts in demand and supply, play a significant role in influencing pricing trends.

The Indian auto component industry is poised to experience a revenue setback of up to Rs 4,500 crore in the current fiscal year, as exports to the United States face adverse impacts from newly imposed tariffs. A recent report by Icra highlights that Indian auto component manufacturers could see a decline in growth, with revenue growth forecasted to ease to 6-8% by FY2026.

: A new report by Climate Risks Horizon suggests that India could eliminate its dependence on thermal coal imports by 2029 if it increases its renewable energy capacity by 50 gigawatts annually. This ambitious shift would save India approximately USD 66 billion in foreign exchange over the next five years, with potential savings of USD 173 billion by 2034. The report also highlights India’s growing reliance on imported coal, which has been exacerbated by global price volatility and currency fluctuations.

Uttar Pradesh is setting ambitious goals to boost its export sector, aiming to triple its outbound shipments to over Rs 5 lakh crore by 2030. A new export policy, set for approval soon, will drive this goal by tapping new markets and products, while offering incentives such as capital subsidies and digital support. The policy will strengthen UP’s contribution to India’s overall export performance, fostering infrastructure development and supporting exporters with various financial aids.

A recent report highlights the challenges faced by women entrepreneurs in Tier II and III cities, revealing that a significant number of them still struggle to access credit despite various government schemes. The report, based on a survey of over 1,300 women business owners, emphasizes the need for customized financial products, gender-sensitive lending practices, and alternative credit options.

On April 28, Commerce and Industry Minister Piyush Goyal embarked on a five-day visit to London, Oslo, and Brussels to further India's trade and investment relations with the UK, Norway, and the European Union (EU). The trip is crucial, with negotiations on a proposed free trade agreement (FTA) between India and the UK entering the final stages. Additionally, the visit comes on the heels of India’s comprehensive free trade agreement with the European Free Trade Association (EFTA) and ongoing talks for an FTA with the EU, which is progressing swiftly.