Trade triumph

After three years of prolonged negotiations, India and the UK finalised a landmark free trade agreement (FTA) this week. The deal eliminates tariffs on nearly 100% of Indian exports, creating significant export growth opportunities for labour-intensive sectors, including textiles, gems, and engineering goods. The UK, currently India's 7th largest trading partner, offered zero-duty access to several sectors. However, experts caution that Indian exporters must still navigate the competitive challenges of the UK market to fully capitalise on this historic agreement.

Seasonal illusion

The latest goods and services tax (GST) collection touched yet another "record-breaking" level in April. While this is technically the highest, it represents a seasonal spike due to year-end economic activity and compliance and does not accurately reflect steady and sustainable trends. This spike in April usually normalises in subsequent months, showed a Mint analysis. Full-year data, on the other hand, reveals a slower growth in collections compared to India's economic expansion in the past two years, with GST buoyancy declining below 1.

Developmental advances

130: That was the rank of India on the Human Development Index (HDI) in 2023, up from 133 in 2022, according to the latest report by the United Nations Development Programme (UNDP). This improvement places India firmly in the medium human development category, while edging closer to the high development threshold. While India has made an improvement, it remains behind Sri Lanka, China, and Indonesia, among others. The HDI evaluates long-term progress across three fundamental dimensions: health, education, and standard of living.

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Muted debut

Bengaluru-based Ather Energy made a market debut earlier this week, but was met with a lukewarm response. Against the issue price of ₹321 per share, its share price was listed at a little premium of ₹328 per share on the National Stock Exchange. Its share price closed at ₹303.90 on 8 May, down from the listing price. Ather Energy's initial public offering (IPO) came against the backdrop of volatile market conditions and a cautious investor sentiment after Ola Electric's weak debut. 

Ather Energy solidified its position in India by increasing its share in the electric two-wheeler market from 7.9% in 2021-22 to 10.7% by December 2024-25. However, it was significantly behind key players like Ola Electric (34.1%), TVS Motor (19.4%), and Bajaj Auto (18.1%).

Momentum restored

India's services sector rebounded in April after slowing down in March, primarily driven by new order inflows. The seasonally adjusted HSBC India services purchasing managers' index (PMI) rose to 58.7 in April from 58.5 in March. While this represents an improvement over the previous month, April's reading fell short of 59.0 in February. 

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Nevertheless, India's services sector has remained strong and posted an above 50-mark, which separates expansion from contraction. With manufacturing activity also rising in April, the composite output index rose to 59.7 in April from 59.5 in March.

Safety measures

27: That's the number of airports in the north and north-west regions closed for civilian movement on 7 May morning, at least until 10 May due to security reasons. This was done in the wake of precision strikes carried out by India on 'terrorist infrastructures' at nine sites in Pakistan and Pakistan-occupied Kashmir (PoK) after 26 tourists were killed in a terrorist attack in Pahalgam in April. The airports in Sri Nagar, Amritsar, Jammu, Pathankot, and Ludhiana, among others, were closed, while Delhi's Indira Gandhi International Airport remained operational.

Revenue-profit gap

Consumption-focused companies drove revenue growth for India Inc. in Q4FY25, even though profit growth lagged, according to a Mint analysis of 439 listed firms. The analysis included 13 companies from the Nifty India Consumption Index, which derive over half their revenue domestically. 

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Revenue growth of consumption companies was strong at 12%, outpacing other companies that recorded 3%. However, their profit growth lagged at 6.9% as against 9.5% growth posted by other companies. This divergence underscores input cost pressures.

Taxing times

US President Donald Trump proposed 100% tariffs on all foreign films, aiming to save a "dying" Hollywood. This latest tariff move addresses filmmakers increasingly leaving Hollywood for cheaper production destinations abroad. The proposal could significantly impact international cinema, including Indian films that generate substantial box office revenue in the US market.