Economy
The week in charts: Trump’s threat, mixed PMI, IPO frenzy
Summary
News and developments from the week gone by, through numbers and charts.Every Friday, Plain Facts publishes a compilation of data-based insights with easy-to-read charts to help you delve deeper into the stories reported by Mint in the week gone by. US President-elect Donald Trump has warned the Brics nations of 100% tariffs if they create or support a separate currency to move away from the dollar. Meanwhile, passenger vehicle (PV) sales, which have been struggling to maintain momentum throughout 2024, experienced yet another setback in November.
PMI strain
The HSBC India Manufacturing PMI fell to 56.5 in November from 57.5 in October, signalling a slowdown in manufacturing activity amid concerns over India's consumption outlook. Despite a rise in selling prices, the highest since October 2013, pricing pressures and fierce competition dampened demand, while new order intake was the weakest in 11 months.
Also Read: RBI’s GDP projections on test as India’s Q2 GDP growth falls short
The PMI reading comes after disappointing Q2 GDP data, which showed weak performance in manufacturing. Meanwhile, the services sector PMI fell slightly in November to 58.4, from 58.5 in the previous month, owing to a drop in the growth of new orders and output.
Tariff threat
Donald Trump threatened to impose 100% tariffs on Brics nations if they created a separate currency or moved away from the dollar. Experts, however, suggest such a measure is unlikely for two reasons: First, a common Brics currency remains a distant prospect, and second, the US runs substantial trade deficits with key Brics members. The US imports more from countries like China, Russia, India and South Africa than it exports, which means higher tariffs could harm the US economy as much as the Brics nations, a Mint analysis shows.
Pulses push
Two million hectares: This is the area of land that the Centre is aiming for the sowing of pulses across the country, as falling production and rising imports drive food prices up, Mint reported. The initiative is aimed at encouraging farmers to grow the heavily imported tur, urad and masur varieties. The pulses will be grown on watershed land in regions like Madhya Pradesh, Maharashtra and Rajasthan, and the plan is part of a larger plan to utilize four million hectares of watershed land for farming.
Also Read: IndiGo: Navigating turbulence as market leader
Sales slump
Passenger vehicle (PV) sales faced a 7.6% year-on-year decline to 400,746 units in November. The decline came after a temporary surge in sales in October driven by festive discounts. So far, five out of 11 months in 2024 have recorded a contraction in sales. Market leader Maruti Suzuki saw a 16% decline to 129,939 units in November. Other major players, including Hyundai, Tata Motors and Kia, also reported contractions in their sales.
Visitor woes
A viral post about declining foreign tourist arrivals in Goa highlights a broader trend across India where tourism is yet to recover completely to pre-pandemic levels. While foreign tourist arrivals in India grew 43.5% to 9.3 million in 2023, they were still below the 2019 peak of 10.9 million, a Mint analysis showed. In 2024, about 4.8 million foreign tourists arrived in the first half but the annual figure is unlikely to reach 10 million amid the rising popularity of countries like Vietnam, Sri Lanka and the Philippines.
e-Vision
₹9,000 crore: This is the value of the Centre’s proposed plan to support local manufacturing of battery components for electric vehicles (EVs) and clean energy systems, Mint reported. Batteries cost about 40% of an EV, and a push to make local components may bring EV prices on par with conventional fuel vehicles. The proposed plan focuses on critical components such as anodes, cathodes and electrolytes. It aligns with India’s goal to create a global hub for electrolyzers and green hydrogen.
Also Read: Why Audi and Cadillac want to line up for Formula 1
IPO frenzy
The year 2024 has been a landmark one for India’s IPO market, with a record ₹1.4 trillion raised across main-board and small and medium enterprises (SME) segments. The surge in fundraising and retail participation has been fuelled by strong listing gains, driving massive oversubscriptions. The average IPO size has doubled to ₹1,800 crore, reflecting heightened investor confidence. Despite foreign investors pulling back from the secondary market, interest in the primary market remains strong, with over ₹1 trillion in IPOs in the pipeline.
Chart of the week: Luxe boom
Affluent Indians have been driving strong sales for luxury brands even as overall consumption demand has slowed. In FY24, the local arms of top brands like Louis Vuitton, Christian Dior and Hermes together sold ₹1,400 crore worth of clothes, bags and other merchandise in India, Mint reported.
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