As of January 1, 2025, several significant developments have occurred in India and
internationally:
India's Economic Outlook
India's current account deficit narrowed to 1.2% of GDP ($11.2 billion) in the July-September
quarter of 2024, down from 1.3% the previous year. This improvement is attributed to a rise in
services exports, particularly in computer services, business, travel, and transportation sectors.
However, the merchandise trade deficit increased to $75.3 billion from $64.5 billion, with a record
monthly deficit of $37.84 billion in November due to a surge in gold imports and weakened global
demand for exports. The government is investigating the high gold imports contributing to this
deficit, which has also impacted the value of the rupee. Private transfer receipts, mainly
remittances, rose to $31.9 billion. The balance of payments showed a surplus of $18.6 billion for
the quarter, though it is expected to turn negative in the following quarter due to a widening trade
deficit and decreased capital inflows. citeturn0news9
Additionally, the Indian government is implementing measures to achieve a GDP growth target of
6.5%-7% for the current fiscal year, despite slower-than-expected growth in the July-September
quarter. The economic slowdown was mainly due to weaker manufacturing and consumption,
leading the government to consider rate cuts by the central bank. Economic Affairs Secretary Ajay
Seth expressed optimism that growth would pick up in the latter half of the fiscal year. Following
electoral wins in Maharashtra and Haryana, the government plans to increase infrastructure
spending, part of a $576 billion budget announced in July. Initiatives include boosting incentives
for electric vehicle manufacturers and amending insurance laws to raise the FDI limit. Analysts
believe that increased government spending and a sharp rise in exports in the quarter ending
December will contribute to achieving the growth target. citeturn0news12
India-Bangladesh Relations
Bangladesh and India's foreign secretaries met in Dhaka to address escalating tensions following
the exile of former Bangladeshi Premier Sheikh Hasina in August. This high-level meeting marks
the first since massive protests ended Hasina's 15-year rule. Key issues discussed include the
arrest of a Hindu spiritual leader, attacks on minority Hindus in Bangladesh, and increased security
concerns. India halted most visa issuances to Bangladeshis and withdrew many nationals
involved in infrastructure projects due to safety threats. The discussions emphasized mutual
respect and sensitivity to each other's concerns, with India expressing its desire to work closely with
Bangladesh's interim government led by Muhammad Yunus for stability and progress.
Bangladesh, however, urged India not to interfere in its internal affairs and reassured that all
religions are freely practiced in the country. Both parties aim to find a resolution to prevent
further escalation of tensions. citeturn0news14
India-Canada Diplomatic Relations
The diplomatic crisis between Canada and India has intensified following accusations by Canada
that Indian agents were involved in serious criminal activities on Canadian soil, including intelligence
gathering and interference in democratic processes. Canada requested the removal of immunity
for six Indian diplomats, including the ambassador, to facilitate questioning over violent incidents
targeting the South Asian, particularly Sikh, community. Following India's refusal, these diplomats
were expelled. Tensions escalated after the June 2023 assassination of Sikh separatist Hardeep
Singh Nijjar in Canada. The accusations allege that Indian officials, including Amit Shah, oversaw a
network targeting Sikh separatists using intelligence gathered by diplomats and RAW agents.
India dismisses these accusations as politically motivated, asserting Canada has not provided
evidence. Despite this, the U.S. has urged India to take the accusations seriously and cooperate
with Canada, while maintaining better bilateral relations than those between Canada and India.
citeturn0news16
Advancements in India's Defense Technology
In the 1990s, India began developing the Kaveri, a homegrown military jet engine, aimed at
fostering self-reliance in defense technology. However, the Kaveri failed to produce the necessary
thrust for its Tejas aircraft, redirecting efforts towards future drones. India's ambition to build an
"indigenous" jet engine remains, with plans to collaborate with a Western partner. Major
contenders for this partnership include General Electric (US), Rolls-Royce (UK), and Safran (France).
The partnership will enable the full development and production of the engine in India, integrated
into its fifth-generation fighter jets by the mid-2030s. This project has significant geopolitical
implications as India's defense relationships evolve, especially with mounting rivalries and
collaborations. The outcome of this partnership will impact both defense and civil industries,
propelled by extensive funding and India’s strategic shift in its military and industrial policies.
citeturn0news17
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