2025-02-01 06:48

NEW DELHI, Feb 1 (Reuters) - India will focus on boosting the spending power of its middle class population, encouraging inclusive development and private investment to strengthen growth, Finance Minister Nirmala Sitharaman said on Saturday, announcing the annual budget. Measures to assist the poor, the youth, farmers and women were also a part of the budget for 2025-26, said Sitharaman, highlighting plans for "transformative reforms in taxation". Here are the highlights of the budget: RELIEF TO MIDDLE CLASS TAXPAYERS * Raises threshold of nil tax slab for income tax payers to 1.2 million rupees ($13,900) per year * Proposes to change income tax slabs, tax rates to benefit all taxpayers * Maximum tax rate of 30% raised to incomes of 2.4 million rupees and above under new tax regime * To introduce Income Tax Bill in parliament to simplify tax rules, reduce litigation * Analysts say tax cuts to boost consumer demand GDP GROWTH/FISCAL DEFICIT * Expects nominal GDP growth of 10.1% y/y in 2025/26 * Expects fiscal deficit at 4.4% of GDP in 2025/26 vs revised deficit of 4.8% of GDP in current fiscal year * Gross borrowings seen at 14.82 trillion rupees for 2025/26 * Net borrowings seen at 11.54 trillion rupees for 2025/26 REVENUE RECEIPTS * Total revenue receipts for 2025/26 seen at 34.20 trillion rupees vs revised 30.88 trillion rupees for current fiscal year * Net tax revenue receipts for 2025/26 seen at 28.37 trillion rupees EXPENDITURE * Total budget spending for 2025/26 estimated at 50.65 trillion rupees vs revised spending of 47.16 trillion rupees in 2024/25 * Revised spending target for 2024/25 lowered by 1.04 trillion rupees against initial budget estimates * Capital spending target for 2025/26 set at 11.2 trillion rupees, against revised target of 10.18 trillion for current fiscal year RAISES FDI LIMIT * Proposes to raise foreign direct investment limit in insurance to 100% from 74% * Taxation, power sector, urban development, mining, financial sector and regulatory reforms focus of budget FARM OUTPUT * To launch six year mission to boost pulses output * To launch five year mission for cotton production MANUFACTURING INCENTIVES * To set up National Manufacturing Mission to provide policy support and to further 'Make in India' manufacturing programme * Credit guarantee cover for small and medium firms enhanced to 100 million rupees * Fund of funds to be set up for start-ups with government contribution of 100 billion rupees * To set up five national skilling centres to enhance skilled manpower for manufacturing * To provide 1.5 trillion rupees 50-year interest free loans to states for infrastructure development * Announces Maritime Development Fund with a corpus of 250 billion rupees * To set up Urban Challenge Fund worth 1 trillion rupees * To enhance regional air connectivity to 120 new destinations over 10 years * Policy for critical minerals development to be launched Sign up here. https://www.reuters.com/world/india/india-budget-aims-boost-farm-output-push-inclusive-growth-2025-02-01/

2025-02-01 06:40

India gives tax relief to boost spending power of middle class Fiscal deficit for 2025-26 seen at 4.4% from 4.8% this year Missions to boost farm productivity, manufacturing, exports FDI limit in insurance sector raised to 100% from 74% NEW DELHI, Feb 1 (Reuters) - India slashed personal tax rates in its annual budget on Saturday, as the world's fifth largest economy focuses on boosting domestic demand amid uncertainty over the global economic outlook due to potential new tariff barriers. The world's most populous country is expected to post its slowest growth in four years next year amid frail urban demand and weak private investment, while stubbornly high food inflation has dented disposable incomes. The government said people earning up to 1.28 million Indian rupees ($14,800) per year will not have to pay any taxes, raising its threshold from 700,000 rupees. It also lowered tax rates for people earning above the new threshold. "The new structure will reduce taxes on middle class and leave more money in their hands, boosting household consumption, savings and investment," Finance Minister Nirmala Sitharaman said in parliament. The move will result in an annual 1 trillion Indian rupee ($11.6 billion) hit to Treasury revenues. Measures to assist the poor, youth, farmers and women were also included in the budget for 2025-26, Sitharaman said. Increasing living costs have weighed on the popularity of Prime Minister Narendra Modi, with one survey showing more Indians are becoming less hopeful about their quality of life. Per capital income is around $2,700 for India's population of 1.4 billion, with about one-third considered middle class. The tax cut is "likely to spur consumer demand and savings by the middle class that has faced challenges from elevated inflation and lower income growth," Sakshi Gupta, economist at HDFC Bank. The move led to a rally in consumer stocks such as Maruti Suzuki (MRTI.NS) , opens new tab, Godrej Consumer Products (GOCP.NS) , opens new tab and Prestige Estates (PREG.NS) , opens new tab, which jumped by 4% to 8%. To balance the revenue lost, the government has budgeted for a modest increase in capital spending this year, which will rise to 11.21 trillion rupees in 2025-26 compared to a lowered 10.18 trillion in the current year. The modest infrastructure spending increase disappointed investors in the sector and stocks of firms including Larsen & Toubro (LART.NS) , opens new tab, NBCC (NBCC.NS) , opens new tab, IRB Infra (IRBI.NS) , opens new tab and KEC International < KECL.NS> were down between 1% and 6%. The government expects to improve its finances, targeting a fiscal deficit of 4.4% of GDP in 2025-26, down from a revised 4.8% of GDP in the current year. It will borrow 14.82 trillion Indian rupees via the bond markets to fund this year's fiscal deficit. The government, however, refrained from pre-empting the impact of potential tariffs from U.S. President Donald Trump on India and focussed on lowering some input costs for industries that have been raising output such as electronics and renewables. FOCUS ON FARM, MANUFACTURING AND FINANCIAL SECTOR India has faced a bout of high food inflation over the past year due to weather changes impacting output. To boost productivity across the farm sector, the government will launch a national mission to push high-yielding crops, with a special focus on pulses and cotton production. To help farmers, the limit for subsidised credit has been raised to 500,000 Indian rupees ($5,778) from 300,000 rupees earlier. The government will also launch missions to push manufacturing and exports, Sitharaman said, without going into details. India has long aimed to boost the share of manufacturing and exports in its economy but has had little success. The share of manufacturing in the economy has remained close to 17%, short of its long-standing goal of 25%. To deepen the penetration of insurance in the economy, the foreign direct investment limit on insurance was raised to 100% from 74% currently. ($1 = 86.5360 Indian rupees) Sign up here. https://www.reuters.com/world/india/indias-modi-seek-boost-growth-ease-cost-living-budget-2025-02-01/

2025-02-01 03:32

BEIJING, Feb 1 (Reuters) - China's top financial market regulator said on Saturday that "stabilising the market, stabilising confidence and stabilising expectations" were priorities as the government works to provide better access to capital for leading technology. Wu Qing, who took over as the head of China's Securities Regulatory Commission a year ago when China's stock markets were sliding, said regulators had been working to restore confidence since late September, when Beijing rolled out a series of stimulus measures. Those measures, Wu said, support President Xi Jinping's goal of making China a "financial power" and creating capital-market funding opportunities for companies with innovative technology. "In today's world, finance is a battleground for the great powers," Wu said in remarks published by Qiushi, the official policy publication of the Chinese Communist Party. China's blue-chip CSI300 index is up more than 20% since Beijing unveiled monetary and fiscal stimulus in late September, although the market has shed more than half its initial gains. Many overseas investors want more clarity on U.S. President Donald Trump's plans for China and Beijing's response. Trump said on Friday he was imposing 10% tariffs on goods from China, as well as 25% levies on imports from Canada and Mexico. He had said in a Fox News interview aired on Thursday, however, that he believed he could make a deal with China on trade. Wu said in his essay that the focus for capital markets in China had shifted from "scale expansion" to more targeted support for key technologies, in line with Xi's priority for development of industries like artificial intelligence, biosciences, robotics and others the president has labelled "new productive forces". The regulator said despite the scale of China's stock and bond markets - the world's second-largest - and the number of listed companies, there was not enough financing support for innovation. "The structure is not reasonable. The scientific and technological content of listed companies is too low, and the market has not fully played its role in supporting innovation and industrial innovation," he said. Sign up here. https://www.reuters.com/world/china/chinas-market-regulator-says-stabilising-confidence-key-2025-02-01/

2025-01-31 22:56

Jan 31 (Reuters) - Global grain merchant Archer-Daniels-Midland (ADM.N) , opens new tab will soon start laying off employees as part of a global effort to cut costs as low crop prices erode profit, three people briefed on the matter told Reuters on Friday. Operations in the United States would be the focus of the cuts, one of the sources said. Corn, soybean and wheat prices hit four-year lows in 2024 as global stocks of the food staples ballooned to multiyear highs and whittled down profit margins for agribusinesses like ADM that make money from storing, processing and trading around the world. ADM has previously said it is focused on controlling costs as the global grains glut and low prices dragged down profit, and warned that the current challenging commodities cycle would continue through 2025. Rival agribusiness Cargill in December began laying off employees around the world in a drive to cut headcount by 5%. It was unclear how many jobs would be affected at ADM. The company declined to comment on Friday. The most heavily impacted region would be the United States, with the focus on operational areas including plants, ports and warehouses, one source said. Layoffs would also take place, however, across all regions and departments, the source added. ADM executives were expected to address the restructuring after the company posts fourth quarter results on Tuesday, the source added. Sign up here. https://www.reuters.com/business/adm-make-layoffs-soon-cut-costs-sources-say-2025-01-31/

2025-01-31 22:55

WASHINGTON, Jan 31 (Reuters) - (This Jan. 31 story has been corrected to show that Phillips 66 expects tariffs to divert Canadian oil away from the U.S. markets, not production cuts in the Midwest and Rocky Mountain region, in paragraph 9) U.S. President Donald Trump said on Friday he expects his administration to impose tariffs related to oil and gas around Feb. 18 and it could reduce the planned levy on some Canadian crude. The U.S. imports some 4 million barrels per day of oil from Canada, roughly 70% of which is processed by refiners in the U.S. Midwest. A tariff on oil imports could lead to lower production of fuel at those facilities and drive up costs for consumers, analysts and companies have warned. Trump did not name a specific country to which the new tariffs would apply or provide any more details about the plans. "We're going to put tariffs on oil and gas," Trump told reporters in the White House's Oval Office. "That'll happen fairly soon, I think around the 18th of February." Asked if tomorrow's tariffs would include Canadian crude, Trump said: "I'm probably going to reduce the tariff a little bit on that. We think we're going to bring it down to 10% for the oil." That would be instead of 25% that Trump has previously spoken about. Many U.S. oil refiners, especially in the Midwest, rely on imported crude because their facilities are configured to run heavier crude grades, such as those from Mexico and Canada. They are awaiting clarity while preparing for the new tariffs on Canadian and Mexican crude imports. Earlier this month, imports of crude from Canada to the United States hit record levels. Refiner Phillips 66 said the tariffs may divert Canadian oil away from the U.S. at first. Phillips 66, along with HF Sinclair and Par Pacific Holdings (PARR.N) , opens new tab have elevated exposure to Canadian crude, data from TD Cowen shows. "Our commercial and optimization teams have been working hard to develop every possible scenario we can think of and how we would respond" to Trump's tariffs, said Gary Simmons, chief operating officer of Valero, during call with analysts on Thursday. Valero is the second-largest U.S. refiner by capacity. Sign up here. https://www.reuters.com/world/us/trump-vows-tariff-chips-oil-gas-2025-01-31/

2025-01-31 22:45

Trump says looks forward to meeting Japanese leader Ishiba keen to build early personal rapport with Trump US and Japan long-term allies who share concerns about China Official says Japan may make energy, defense commitments to stave off threat of tariffs WASHINGTON, Jan 31 (Reuters) - U.S. President Donald Trump said on Friday that Japan's Prime Minister Shigeru Ishiba will visit him next week at the White House and he looks forward to the conversation. "They’re coming in to speak to me and I’m looking forward to it," Trump told reporters in the Oval Office. The meeting is expected to take place on Friday, Feb. 7. Japan's Asahi newspaper reported on Thursday that the leaders of the two long-time allies will discuss strengthening economic and security cooperation. Ishiba, who took office in October, a little over a month before Trump's reelection, is keen to build a personal relationship early in the U.S. president's second term and deepen Japan's key U.S. alliance amid shared concerns about China's growing power, people familiar with the matter said. Ishiba plans to highlight how Japanese companies create jobs in the U.S. and increases in Japan's defense budget, the people said. Shinzo Abe, a predecessor of Ishiba's as prime minister who launched significant defense reforms and was assassinated in 2022, enjoyed a strong rapport with Trump during the latter's first term. Analysts say Ishiba will want to build on that despite concerns about Trump's threats of tariffs to correct trade imbalances. Officials familiar with the matter told Reuters that Japan is considering offering support for a $44 billion gas pipeline in Alaska as it seeks to court Trump and forestall potential trade friction. Japan has doubts about the viability of the proposed 800-mile pipeline, which Trump has said is key for U.S. prosperity and security, given the overall costs of the gas relative to other sources, but is prepared to offer to explore a deal if asked, the officials said. Tokyo may include such a commitment among other concessions, such as buying more U.S. gas and increasing defense spending and manufacturing investment in the U.S., to reduce its $56 billion bilateral trade surplus and stave off the threat of tariffs, one of the officials said. Trump's defense secretary, Pete Hegseth, spoke by phone with Japanese Defense Minister Gen Nakatani on Thursday, and Japan will have been heartened by the Pentagon hailing the U.S.-Japan alliance "the cornerstone of peace and security in the Indo-Pacific region" in its readout of the call. "The two officials reiterated the importance of deepening defense cooperation to strengthen deterrence and to advance a shared vision for a free and open Indo-Pacific region," the Pentagon statement said. Abe was the first foreign leader to hold a summit with Trump after his 2016 election win, but Ishiba is set to be beaten to that accolade this time by Israeli Prime Minister Benjamin Netanyahu. Nicholas Szechenyi, head of the Japan program at Washington's Center for Strategic and International Studies think tank, said Ishiba's main objective would be to stress that Tokyo will remain a reliable ally to the U.S. He said the summit would have strategic impact in signaling that alliances will remain a fundamental pillar of U.S. strategy in Asia with U.S.-Japan ties at its core. "Ishiba’s case is straightforward: Japan is an ally that is stepping up by investing more in its own defense, advancing security cooperation with the U.S., and investing in the U.S. economy," he said. Szechenyi said the economic agenda could take center stage. "A few concrete proposals from Ishiba, maybe on energy imports or new investments in American manufacturing, could help him further Japan’s reputation as an economic partner and set the tone for a productive U.S.-Japan relationship under Trump," he said. Sign up here. https://www.reuters.com/world/trump-says-japans-prime-minister-will-visit-next-week-2025-01-31/