Page 16 - Policy Economic Report_Feb'25

POLICY AND ECONOMIC REPORT
OIL & GAS MARKET

Services: The services sector's contribution to Gross Value Added (GVA) increased from 50.6% in
FY2014 to 55.3% in FY2025, indicating its growing significance in the economy. India accounts for
seventh-largest share in global services exports, underscoring India’s global competitiveness in
the sector.

6. Fiscal Health
Fiscal Deficit: The fiscal deficit is projected to be 5.9% of GDP in FY2025, aligning with the
government's fiscal consolidation roadmap.

7. Employment and Labor Market
Labor Market Improvement: India's labor market indicators have shown significant improvement
in recent years, reflecting better employment opportunities and workforce participation. Indian
labour market indicators have improved with unemployment rate declining to 3.2% in 2023-24
(July-June) from 6% in 2017-18 (July-June).

8. Foreign Direct Investments (FDI)
FDI Inflows: Global foreign direct investment grew by 4.4% in 2023, reaching a record $41 trillion.
India, Mexico, and Brazil each saw their inward direct investment positions rise by around $130
billion or about 20%, marking the largest increase for these three economies since the survey
began in 2009.

9. Exports
Overall Export Growth: In the first nine months of FY25, India's overall exports grew by 6%, with
services exports increasing by 11.6% year-on-year. Non-Petroleum and non-Gems & Jewellery
exports went up by 9.1% reflecting resilience of India’s merchandise exports amid volatile global
conditions.

Global Market Share: India's share in global goods exports rose to 1.8% in FY24, up from an
average of 1.7% during FY16-FY20, indicating a positive trend in export competitiveness.
Challenges from International Trade Policies: India's exports are facing pressures due to stringent
trade policies from major partners like the United States and the European Union. The U.S. has
escalated import tariffs, and the EU's carbon tax poses additional challenges, necessitating efforts
to boost export competitiveness and diversify markets.

10. Credit and Banking
Bank Credit Growth: Bank credit has grown at a steady rate, with credit growth converging
towards deposit growth, reflecting a balanced expansion in the banking sector.
Non-Performing Assets (NPAs): The Gross Non-Performing Assets (GNPA) ratio of Scheduled
Commercial Banks declined to a 12-year low of 2.6%, indicating improved asset quality and
financial stability.

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