Mumbai, May 16: Economists expect the Reserve Bank of India’s (RBI) dividend to the government to surpass a record over Rs 2.5 lakh crore this year as the central bank earnings, through the sale of dollars to prop up the rupee as it sharply depreciated during 2024-25, are reported to have shot up. This higher profit will be transferred to the government as a dividend in 2025-26.

The previous record dividend transferred to the government stands at Rs 2.1 lakh crore during 2024-25 which helped to keep the fiscal deficit in check, while enabling the Finance Ministry to continue with its expenditure on big ticket infrastructure projects to spur growth and social welfare schemes to uplift the poor.

This was a record jump from the Rs 87,416 crore transferred to the government in 2023-24 for the profit made in 2022-23. Similarly, the government is expected to get another booster shot through the RBI dividend in the current financial year as well.

“Among the RBI’s earnings, forex transactions are expected to be most significant in light of the in light of the central bank’s measures to lower rupee volatility by strong dollar purchases earlier in fiscal 2025 and difference in the current versus historical exchange rate. Add to this the interest income on government securities and earnings from funds extended to banks in midst of previous tight liquidity. “This transfer could amount to a record high at around Rs 2.5-2.7 lakh crore this year,” said Radhika Rao, senior economist at DBS Bank.

Earnings on forex transactions are expected to be substantial with gross dollar sales tracking at $371.6 billion in fiscal 2025 till February compared to $153 billion in fiscal 2024, according to Gaura Sengupta, chief economist at IDFC First bank. She estimates the RBI dividend to be between Rs 2.6 lakh crore to Rs 3 lakh crore, according to an Media report.

The higher dividend creates fiscal space of 0.1 per cent to 0.2 per cent of GDP, estimates Sengupta. With support from the higher-than-budgeted RBI surplus and savings on a few expenditure heads, the central government is in a fairly strong position to counter the growth slowdown risks and any potential emergency spending requirements.

Apart from helping to lower the fiscal deficit, the RBI dividend will be a significant infusion to core liquidity in the banking system during the current financial year. This will help to keep interest rates low and allow banks to extend more loans to corporates and consumers to accelerate economic growth and create more jobs.

The RBI board of directors met on Thursday to review the economic capital framework which is the basis for deciding the surplus transfer or amount of dividend to be given to the government. The meeting comes ahead of deciding and approving the surplus transfer to the government.

The transferable surplus is determined on the basis of the ECF adopted by the Reserve Bank on August 26, 2019, as per recommendations of the Bimal Jalan-headed Expert Committee to Review the extant Economic Capital Framework of the RBI.

The Committee had recommended that the risk provisioning under the Contingent Risk Buffer (CRB) be maintained within a range of 6.5 to 5.5 per cent of the RBI’s balance sheet.

New Delhi, May 16: The bilateral trade between India and the United Kingdom (UK) is expected to increase by around 15 per cent annually until 2030, factoring in the aspect that the free trade agreement (FTA) will come into effect in a year, a report showed on Friday.

The recently concluded free trade agreement (FTA) between India and Britain offers a strategic opportunity for Indian companies to expand their footprint in the UK market, stimulate domestic manufacturing and contribute to economic growth, according to the report by CareEdge Ratings.

“This landmark FTA also fosters investment, joint ventures, and collaboration in the service sector, thereby deepening economic ties. Going forward, this agreement marks a pivotal shift in India-UK economic relations, unlocking new opportunities for businesses, strengthening manufacturing, and enriching consumer markets,” said D Naveen Kumar, Associate Director, CareEdge Ratings.

Currently, the trade value between the United Kingdom (UK) and India is approximately 2 per cent of India’s total trade value, although it has been growing steadily at a compound annual growth rate (CAGR) of 11 per cent over the last decade.

The UK and India entered into a free trade agreement (FTA) on May 6, following approximately three years of negotiations.

Under the agreement, India will reduce tariffs on 90 per cent of British goods, with 85 per cent becoming completely duty-free over a period of 10 years. In return, Britain has agreed to lower its tariffs on certain products, resulting in 99 per cent of India’s exports to the UK facing zero duties.

“Some of the benefits of FTA for Indian exporters would include improved market access, stable supply chains, increased competitiveness, higher volumes and new avenues for growth,” the report mentioned.

The FTA is expected to boost India’s exports by significantly reducing tariffs, easing trade barriers leading to improved market access and make Indian products more price competitive, thereby increasing their demand in the UK.

Additionally, this has provided some relief to exporters who have been facing sluggish sales and uncertainty about potential reciprocal tariffs from the US.

In key sectors such as automobiles, whisky, industrial machinery, and pharmaceuticals, significant gains are set to be made through steep tariff reductions and simplified regulations.

According to the report, the India–UK FTA is poised to create substantial opportunities for Indian gems and jewellery makers by tapping into the UK’s affluent consumer base and well-developed luxury market.

The tariffs range from 8 per cent to 14 per cent for various electrical and engineering goods. With their removal under the India–UK FTA, Indian manufacturers are poised to gain a clear competitive edge over other global suppliers, said the report.

Doha, May 15: Qatar and the US signed here a series of deals to boost bilateral cooperation following a meeting between the two heads of state, according to a statement from the Emiri Diwan, the administrative office of the Qatari Emir.

The two sides on Wednesday signed a purchase agreement for Boeing aircraft, which is described by the White House in a fact sheet elaborating on some of the deals as a “historic” sale order worth $96 billion, with Qatar Airways’ acquisition of up to 210 Boeing 787 Dreamliner and 777X aircraft, Xinhua news agency reported.

Qatar and the US also signed a statement of intent on defence cooperation, outlining over $38 billion in potential investments, including support for burden-sharing at Al Udeid Air Base in Qatar and future defence capabilities related to air and maritime security.

In addition, two letters of offer and acceptance were signed, one for US General Atomics MQ-9B drones and the other for a counter-drone system developed by US defence firm Raytheon, with the US securing agreements valued at about $3 billion in total, according to the White House fact sheet.

A joint declaration of cooperation between the two governments was also signed.

Prior to the signing ceremony, Qatari Emir Sheikh Tamim bin Hamad Al Thani and US President Donald Trump held talks on a range of bilateral issues, with a particular focus on investment, energy, military, and security cooperation.

They also discussed regional and international developments, particularly those in the Middle East, with the Qatari Emir emphasising the importance of promoting peace and stability in the region.

The US President has thanked his Qatari hosts for having helped “negotiated the release of the last living American hostage in Gaza, Edan Alexander”.

“Hopefully, this is a stepping stone for getting the rest of the hostages back,” Trump said as he spoke at a state dinner in Lusail Palace.

Trump also revisited some of his usual talking points, speaking about his 2024 election success and reported increases in military recruitment in the US.

The meeting came during Trump’s visit to the Gulf state, part of his first major overseas tour since taking office in January — a trip that also includes stops in Saudi Arabia and the United Arab Emirates.