The Indian market has made a cautious start to the July series, and rightly so. After two prolific months of an FII driven rally, the situation is likely to get murkier before it improves.
While the market is playing its tricks, the Indian economy continues to improve with rural India leading the charge. IMD update suggests that in the first leg, India has received 22% above normal rainfall across the country. This news will cheer the farmers and policymakers alike.
The data from the agriculture ministry has suggested that Kharif sowing has picked up. Oilseeds planting is 5x and pulses are at 3x times higher than the last year. The agricultural growth will further boost rural income and the demand for consumer goods, automobiles, fertilizers, pesticides and FMCGs.
Taiwan - A Joker in the pack:
For the Indian government, in its pursuit to reduce the trade deficit with China, Taiwan has emerged as a preferred trading partner. With companies in China and ASEAN countries reaching their saturation point, Taiwan has been looking to move its businesses and invest majorly in the Indian economy.
According to the World Economic Forum report, Taiwan intends to move the manufacturing base to India. The items include those, for which India depends on China. The country is also seeking to speed up a Free Trade Agreement with India.
Currently, 103 Taiwanese companies are present in India. They are further in the process to set up the first Taiwan Technology International Park. The land has been acquired near Bengaluru for the same and it is expected to house 100 IT companies by 2022.
Amid the growing uproar against Chinese products, The Trade Promotion Council of India has warned about a complete boycott’s ill effects. According to them, India must strengthen its trade relations with other countries before any such adventure. A sudden boycott would further disrupt the already broken supply chains across Indian commerce.
Rural India is gearing up to lead the charge with things looking up for the farm sector. Packaged consumer goods sales in rural India have reached 85% of pre-COVID levels versus 70% in urban areas and metro cities. Rural income level is expected to boost further with added working days and under MGNREGA and new Rojgar Yojana of the central government.
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