India Market Watch: Factory Output Slows Down, Retail Inflation Climbs and Flipkart Expands Logistics Capacity

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India’s Factory Output Slows Down, Retail Inflation Climbs

The country’s factory output growth rate rose by a negligible 0.1 percent in March, according to the Central Statistics Office. The flat turn was disappointing as factory output had finally turned a positive corner to reach 2 percent, after two straight months of decline.

Factory output growth in India is assessed on the basis of the index of industrial production. Another worrying statistic was the decline in growth, by 1.2 percent, in the index for manufacturing and the marginal decline by 0.1 percent in the index for mining. On the other hand, the index for electricity registered a strong growth of 11.3 percent.

Rate of inflation bucked the recent slowing trend in April, despite a good monsoon rainfall being predicted, which reversed the expectations of the Reuters economists tracking the situation. Annual retail inflation (based on the consumer price index) rose to 5.39 percent in April after two straight months of decline, unlike the predicted 5 percent. Breaking this down, annual retail inflation in the rural economy registered a high 6.09 percent as opposed to 4.68 percent in the urban economy. In the same period, the annual food inflation jumped from 5.21 percent to 6.32 percent.

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E-commerce Giant Flipkart to Tap into Local Stores

In a bid to strengthen its last-mile delivery options, the logistics arm of Flipkart, Ekart, has connected with a network of 700 corner stores (known as kiranas) across 28 cities in India. The alternate delivery program will thus have personnel from the corner stores making deliveries in a radius of 500 to 800 meters. Flipkart makes over 300,000 shipments daily and projects that these moves will boost its success of delivery attempts by 10 percent. Aside from corner stores, Flipkart also seeks to tie in with photocopy centers, mobile stores, and internet cafes to enable greater scalability in India’s towns, as per the company’s vice president of operations, Neeraj Aggarwal.

Earlier, Ekart had set up experience centers and pick-up zones at tech parks so that office employees could collect orders from a single outlet. The logistics wing also partnered with Apollo Pharmacy in 280 of its outlets where customers could pick up their shipments. Presently, the e-commerce firm is looking to double its logistics arm, Ekart, as a standalone business that will serve third-party orders as well.

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India to Develop Greater Regional Connectivity in South Asia

India will establish infrastructure projects worth U.S. $5 billion to encourage mobility of resources across South Asian borders with the aid of the Asian Development Bank (ADB). The announcement was made by the Economic Affairs Secretary, Shaktikanta Das, at the South Asia Sub-regional Economic Cooperation (SASEC) 2025 workshop.

Proposed plans include setting up Integrated Customs Ports (ICPs) and improved Land Customs Stations (LCS) at key border points with Bangladesh, Nepal, and Bhutan to facilitate trade and migration. The ICPs will have dedicated passenger and cargo terminals with adequate customs and immigration counters, x-ray scanners, passenger amenities, and other related services such as fuel stations in a single complex. The LCSs will have more adequate warehouses, parking lots, banks, hotels, and fuel outlets among other services. The first proposed road corridor will link India with Bangladesh, Nepal, and Bhutan via North Bengal; the second road corridor will establish India-Myanmar connectivity from Manipur.

Other infrastructure projects in the pipeline include an initiative by the Power Grid Corporation of India to extend three 230 KV transmission lines to Myanmar with a credit support line of U.S. $64 million arranged between the Exim Bank of India and Myanmar Foreign Trade Bank. The 1,320 MW Maitree Thermal Power Project, a joint venture of the National Thermal Power Corporation Limited (NTPC) and the Bangladesh Power Development Board is also among the prospective projects meant to promote regional cooperation between SASEC countries.

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