1) Inflation Rate related News :
India’s Inflation Rate :
India’s annual retail inflation dropped to 3.61% in February 2025, marking the first time in six months that it has fallen below 4%. The decline was mainly driven by a reduction in vegetable prices, which helped bring food inflation down to 3.75%, the lowest level since May 2023. This cooling inflation trend may give the Reserve Bank of India (RBI) more room to consider further rate cuts after its recent 25-basis-point reduction in February.
Meanwhile, the Indian economy continues to grow steadily, expanding by 6.2% in the October-December 2024 quarter. This growth was fueled by rising government expenditure, strong consumer spending, and improvements in rural demand. Private consumption saw a 6.9% year-on-year increase, supported by declining food prices and festive season purchases.
The lower inflation rate is expected to provide further economic stability and may influence future monetary policy decisions.
Extra Reference : Reuters
USA Inflation related News :
On a yearly basis, CPI rose by 2.8% in February, compared to 3% in January. This suggests that inflationary pressures may be easing, which could impact the Federal Reserve’s decisions on interest rates (Source: The Wall Street Journal).
Inflation: Definition & Meaning
Inflation is the rate at which the general level of prices for goods and services increases over time, reducing the purchasing power of money. When inflation rises, you need more money to buy the same products.
Key Features of Inflation:
✔ Prices Increase – Everyday items like food, fuel, and rent become more expensive.
✔ Money Loses Value – ₹100 today buys less than ₹100 did a year ago.
✔ Measured by CPI & WPI – The Consumer Price Index (CPI) and Wholesale Price Index (WPI) track inflation.
Example of Inflation:
- In 2020, a loaf of bread costs ₹30
- In 2025, the same loaf costs ₹45
- This price increase over time is inflation.
Types of Inflation:
1️⃣ Demand-Pull Inflation – High demand for goods/services pushes prices up.
2️⃣ Cost-Push Inflation – Rising costs (wages, raw materials) increase prices.
3️⃣ Hyperinflation – Extreme inflation where prices skyrocket rapidly.
4️⃣ Stagflation – High inflation + slow economic growth + high unemployment.
Is Inflation Good or Bad?
🔹 Moderate Inflation (2-3%) is healthy for economic growth.
🔹 High Inflation reduces purchasing power, making life expensive.
🔹 Deflation (negative inflation) is also bad, as falling prices slow down the economy.
Who Controls Inflation?
👉 Central Banks like the RBI (India) and Federal Reserve (USA) control inflation by adjusting interest rates and money supply.
Inflation & How It’s Measured
Inflation is measured using different metrics that track changes in the prices of goods and services over time. The most commonly used inflation indicators are:
1️⃣ Consumer Price Index (CPI)
Definition: Measures the average price change of a basket of goods and services consumed by households.
✔ Includes food, fuel, housing, healthcare, and transportation.
✔ Used to track cost-of-living changes.
✔ Reported monthly by governments (e.g., the U.S. Bureau of Labor Statistics & India’s Ministry of Statistics).
🔹 Formula:CPI=(Cost of basket in current year/Cost of basket in base year)×100
2️⃣ Core CPI
Definition: Same as CPI but excludes food and energy prices, which are volatile.
✔ Gives a clearer picture of long-term inflation trends.
✔ Used by central banks (like the Federal Reserve & RBI) for policy decisions.
3️⃣ Wholesale Price Index (WPI)
Definition: Measures the price changes of goods sold at the wholesale level (before they reach consumers).
✔ Includes raw materials, intermediate goods, and bulk products.
✔ Used more in India and other countries than in the U.S.
🔹 Formula: WPI= (Current wholesale price/ Base Year Wholesale Price) ×100
4️⃣ Producer Price Index (PPI)
Definition: Measures inflation at the production stage, tracking price changes for goods sold by manufacturers and producers.
✔ Includes raw materials, intermediate goods, and services.
✔ Helps predict future consumer inflation.
✔ Used in the U.S., Europe, and other global markets.
5️⃣ GDP Deflator
Definition: Measures price level changes across all goods and services in an economy.
✔ Broader than CPI because it covers both consumer & business spending.
✔ Used to track inflation at the national level.
🔹 Formula:GDP Deflator=(Nominal GDP/Real GDP)×100
✔ If the GDP Deflator rises, it means the overall price level in the economy is increasing.
6️⃣ Personal Consumption Expenditures (PCE) Index
Definition: Tracks price changes for goods/services purchased by households.
✔ Includes substitution effect (how people switch to cheaper goods when prices rise).
✔ The Federal Reserve prefers PCE over CPI for setting monetary policy.
Which Metric is Best?
📌 CPI → Best for tracking cost of living.
📌 Core CPI → Best for long-term inflation trends.
📌 WPI/PPI → Best for wholesale & producer-level inflation.
📌 GDP Deflator → Best for overall economy-wide inflation.
📌 PCE Index → Best for central bank policy decisions.
Each metric serves a different purpose, and governments, businesses, and economists use a combination of them to understand inflation trends.
2) Industrial Production related News :
India’s industrial production has shown mixed trends in early 2025.
Industrial Growth in January 2025
In January 2025, India’s Index of Industrial Production (IIP) grew by 5% year-on-year, marking its highest increase in eight months. The manufacturing sector played a key role in this growth, expanding by 5.5%, compared to 3.6% in the same period last year. However, mining sector growth slowed to 4.4%, down from 6.4% in January 2024.
Manufacturing Slowdown in February 2025
Despite strong industrial growth in January, February 2025 saw a slowdown in manufacturing activity. The Manufacturing Purchasing Managers’ Index (PMI) fell to 56.3, the lowest in 14 months, due to reduced domestic and global demand. However, employment levels remained stable, and inflationary pressures eased.
Decline in Thermal Coal Imports
India’s thermal coal imports fell for the sixth consecutive month in February 2025, dropping 15.3% to 12.16 million metric tons. This decline reflects a slowdown in industrial energy demand and an increase in domestic coal production, suggesting a move toward greater energy self-sufficiency.
Government Initiatives for Industrial Growth
The Union Budget 2025 aims to boost India’s manufacturing sector, with forecasts predicting that its share in Gross Value Added (GVA) could increase from 14% to 21% by 2032. Programs like the Production-Linked Incentive (PLI) scheme are expected to strengthen key sectors such as electronics, electric vehicles, and pharmaceuticals, making India a competitive global manufacturing hub.
Extra Reference :
Reuters
What is Industrial Growth?
Industrial growth refers to the increase in production, output, and overall economic activity in industries like manufacturing, mining, electricity, and construction. It is often measured using the Index of Industrial Production (IIP), which tracks the performance of different industrial sectors.
Key Indicators of Industrial Growth:
✔ Index of Industrial Production (IIP) – Measures changes in industrial output over time.
✔ Purchasing Managers’ Index (PMI) – Indicates expansion or contraction in manufacturing.
✔ Gross Value Added (GVA) in Industry – Shows the contribution of industries to GDP.
✔ Employment in Industry – More jobs indicate industrial expansion.
What It Indicates When Industrial Growth Changes?
📈 When Industrial Growth Increases:
✅ Strong Economic Activity – More goods are being produced, showing a healthy economy.
✅ Higher Employment – Industries hire more workers, reducing unemployment.
✅ Higher Investments – Investors see potential and put more money into businesses.
✅ Rising Incomes – Wages may increase due to higher demand for labor.
✅ Stock Market Boost – Industrial and manufacturing stocks often perform well.
🔹 Example: If India’s IIP rises by 5%, it means industries are producing 5% more than last year, signaling economic expansion.
📉 When Industrial Growth Declines:
❌ Slowing Economy – Less production means reduced economic activity.
❌ Job Losses – Companies may cut jobs due to lower demand.
❌ Lower Investments – Investors may hesitate to invest in industries.
❌ Reduced Consumer Spending – Less industrial activity often means weaker purchasing power.
❌ Stock Market Decline – Industrial stocks may fall due to weaker earnings.
🔹 Example: If IIP falls by 2%, it signals a contraction, meaning industries are producing 2% less than the previous year, which could indicate economic trouble.
Factors Affecting Industrial Growth:
📌 Government Policies – Supportive policies (like tax cuts, incentives) boost growth.
📌 Global Demand – Strong export demand leads to higher industrial production.
📌 Raw Material Prices – Higher costs (e.g., steel, oil) can slow growth.
📌 Interest Rates – Lower rates encourage businesses to expand; higher rates slow them down.
📌 Infrastructure Development – Better roads, ports, and electricity support industry expansion.
All in all
Industrial growth is a key driver of economic health. Rising industrial production signals a strong economy, while a decline can indicate economic slowdowns or recessions. Monitoring industrial growth helps governments, businesses, and investors make informed decisions.
3) Nifty Chemical Index related News :
Nifty Chemicals Index Launched by NSE Indices
The NSE Indices, a subsidiary of the National Stock Exchange (NSE), introduced the Nifty Chemicals Index on March 11, 2025. This newly launched index tracks the performance of the top 20 chemical companies listed in the Nifty 500, based on their six-month average free-float market capitalization.
The Nifty Chemicals Index aims to serve as a benchmark for asset managers and is expected to facilitate the creation of passive investment products, such as Exchange Traded Funds (ETFs) and index funds. With India’s chemical sector playing a significant role in the economy, this index is designed to offer investors a clear insight into the industry’s performance.
Extra Reference:
Purpose and Companies in the Nifty Chemicals Index
The Nifty Chemicals Index was introduced to track the performance of leading chemical companies listed in the Nifty 500. It serves as a benchmark for investors and asset managers, helping them analyze trends in the chemical sector and aiding the development of passive investment products, such as Exchange Traded Funds (ETFs) and index funds.
This index is particularly useful for investors looking to focus on the chemical industry, which plays a crucial role in India’s economy. By providing a sector-specific benchmark, it enhances transparency and helps in better investment decision-making.
While an official list of companies in the index is not readily available, it likely includes major chemical sector playerssuch as UPL Limited, Pidilite Industries, Deepak Nitrite, and Tata Chemicals, which are already part of the Nifty 500.
For an accurate and updated list of companies, investors should refer to the official NSE Indices website or NSE’s latest announcements.
Importance of the Chemical Industry in India
The chemical industry plays a crucial role in India’s economy, impacting multiple sectors and contributing significantly to GDP, employment, and industrial growth.
Contribution to GDP
The chemical sector contributes around 7% to India’s GDP, making it a key pillar of industrial development. Given its extensive applications in manufacturing, agriculture, and infrastructure, its growth directly affects the overall economy.
Employment Generation
The industry provides jobs to nearly 5 million people, making it a major employment generator. It supports both direct and indirect employment, including roles in production, research, distribution, and retail.
Diverse Product Portfolio
India’s chemical industry is highly diversified, producing over 80,000 chemical products. These include:
- Basic chemicals (used in manufacturing and processing)
- Specialty chemicals (for pharmaceuticals, electronics, and automotive sectors)
- Agrochemicals (such as fertilizers and pesticides for agriculture)
- Petrochemicals (used in plastics, textiles, and fuel production)
Global Standing
India is the sixth-largest producer of chemicals in the world and the third-largest in Asia. The country is a major exporter of chemicals, supplying raw materials and finished products to global markets.
Growth in Petrochemicals
The petrochemical segment is expanding rapidly due to rising demand for products used in electric vehicles, renewable energy, and consumer goods. India is expected to attract investments worth $87 billion in the petrochemical industry over the next decade.
Infrastructure and Investment
Leading companies are investing heavily in chemical production and refining projects. For instance, Bharat Petroleum Corporation Limited (BPCL) has planned an $11 billion refinery and petrochemical complex in Andhra Pradesh to boost domestic production and reduce dependency on imports.
Conclusion
India’s chemical industry is a key driver of economic growth, providing essential raw materials for various sectors, generating employment, and attracting large-scale investments. As global demand for chemicals rises, India’s strategic position in this industry makes it a significant player in international markets.
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