The week in charts: Govt’s festive bonanza, exports growth, inflation woes

Exports rise

India's merchandise exports saw a marginal uptick of 0.5% to $34.58 billion in September after a gap of two months. At the same time, the growth in imports slowed down compared to the previous months, mainly driven by lower gold imports. Consequently, the trade deficit narrowed to a five-month low of $20.78 billion. The growth in core exports (non-oil and non-gold exports) was relatively better, at 9.2%, driven by strong growth in engineering goods (10.6%), electronics goods (7.9%) and chemicals (7.2%), a report by Barclays noted.

Vegetable woes

India's retail inflation rose to a nine-month high of 5.49% in September, primarily due to a dissipating base effect and a sharp rise in vegetable inflation, which soared to a 14-month high of 35.99%. Overall food inflation rose to 9.24% from 5.66% the previous month, adding volatility to the headline inflation and reducing the possibility of a rate cut in December. Oil and fats also added to the inflationary pressures, shifting from the deflation zone in August to the inflation zone in September.

Festive bonanza

₹9,448 crore: This is the combined cost to be borne by the government per annum due to the hike in Dearness Allowance (DA) and Dearness Relief (DR) to central government employees and pensioners ahead of Diwali. The Union Cabinet has announced a 3% hike in DA, taking the total rise to 53% of basic pay, for central government employees and pensioners. The decision came along with a slew of other measures, including a hike in minimum support prices (MSP) of Rabi crops for the marketing season 2025-26.

RIL’s report card

Reliance Industries Ltd showcased the strength of its diversified business portfolio in the September quarter, with gains in some sectors offsetting weaknesses in others. The company reported a consolidated profit of ₹19,101 crore in the July-September quarter, down 4% year-on-year even as its oil-to-chemicals (O2C) segment posted a bigger 25% decline due to reduced global demand. However, strong performance from its telecom arm, Jio, helped mitigate the impact of falling margins, with its consolidated revenue rising 1% year-on-year to ₹2.58 trillion, beating the street estimate of ₹2.34 trillion.

Coffee craze

India's coffee exports rose 45% year-on-year to reach ₹6,467 crore in the first five months of 2024-25. This growth follows a 16% rise in 2023-24, during which exports had surpassed ₹10,000 crore during the full year, an analysis by howindialives.com showed. However, this growth was mainly driven by a rise in coffee prices as in volume terms growth figures were 12.5% for April-August FY25 and -5.8% for the full year FY24. Nevertheless, rising prices due to growing demand, especially for instant coffee, have put India in a sweet spot.

Strategic deal

$950 million: That is the value for which Temasek Holdings has agreed to acquire a 17-18% stake in Blackstone-backed VFS Global Services. The deal values the visa outsourcing and technology services company at $5 billion in equity and $7 billion in enterprise value, Mint reported. This deal follows Blackstone's 2021 purchase of a 75% stake in VFS from Swedish private equity firm EQT AB for $1.8 billion. The deal follows Blackstone's exploration of various ways to monetize its VFS Global stake, including a 51% stake sale and a possible IPO.

Retail power

Adani group stocks saw a reduced interest among retail investors in the September quarter, despite institutional confidence remaining largely intact. According to a Mint analysis of Capitaline data, the retail investor base for nine of the group’s 11 listed stocks declined sequentially after a surge in April-June. The drop followed new allegations from Hindenburg Research in August, which accused the Securities and Exchange Board of India (Sebi) chair of conflicts of interest. While some analysts attribute the decline to profit-taking, concerns over regulatory integrity may have also shaken retail sentiment.

Chart of the week: Divide views

Indian voters had divided views about the integrity of exit polls, which failed to deliver correct predictions of election results in the past few months, according to the latest biannual YouGov-Mint-CPR Millennial Survey. While 46% believed that the predictions of the 2024 elections were fraudulent, 54% gave the benefit of the doubt. Even 40% of supporters of the Bharatiya Janata Party (BJP) found exit polls fraudulent.

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