India pushes for $2.6 billion Iran smelter

[asquare]

There is some debate about this outside of China, but inside of China we don't recognize PPP as a measure of GDP.

The focus on nominal GDP is because currency matters. Much of America's economic hegemony in this world is based on the US dollar as the global reserve currency.

I agree with you as far as currency matters in terms of a nation's influence or power (not the nominal value of the currency, but it's stability and therefore it's use in denominating transactions and reserves— and you could argue, reversing causality, that the use of a currency in denominating transactions and reserves depends on the issuing nation's influence and not just the stability of the currency). The argument here was about the value of GDP PPP vs nominal GDP as a measure of economic progress.

I am not familiar with China's objection to PPP as a comparison tool. Is it because China doesn't agree with the commodity basket used? Does China have it's own equivalent of PPP using an alternate commodity basket?

 

[Chinese-Dragon]

I agree with you as far as currency matters in terms of a nation's influence or power (not the nominal value of the currency, but it's stability and therefore it's use in denominating transactions and reserves— and you could argue, reversing causality, that the use of a currency in denominating transactions and reserves depends on the issuing nation's influence). The argument here was about the value of GDP PPP vs nominal GDP as a measure of economic progress.

I am not familiar with China's objection to PPP as a comparison tool. Is it because China doesn't agree with the commodity basket used? Does China have it's own equivalent of PPP using an alternate commodity basket?

Well, China doesn't recognize the methodology of the World Bank in calculating PPP, and our National Bureau of Statistics only publishes GDP figures using nominal Yuan values.

There is a political dimension too, many in China believe that the West is trying to paint China as having the "largest economy" to force us into taking on responsibilities that we don't need, since we are still a developing country.

China Doesn’t Want Its Economy to Be No. 1 - Wall Street Journal

 

[SwAggeR]

Iran might have the same fate as Libya has

Your this attitude is sick. Now deal is done. Iran has international support with it.US has no moral ground to do anything different and anyway at moment ISIS is bigger headache for them.

As before , India is just fishing for a partner to counter and needle Pakistan nothing more

Don't cry, cheer up !! We are not investing to set up muhjahid factory.

We have no agenda other than economic.

 

[asquare]

Well, China doesn't recognize the methodology of the World Bank in calculating PPP, and our National Bureau of Statistics only publishes GDP figures using nominal Yuan values.

There is a political dimension too, many in China believe that the West is trying to paint China as having the "largest economy" to force us into taking on responsibilities that we don't need, since we are still a developing country.

China Doesn’t Want Its Economy to Be No. 1 - Wall Street Journal

I'll look up the methodological objections China has. As a concept, PPP is sound. Therefore I'd imagine that the differences are purely methodological and not conceptual.

I think the political dimension is exaggerated. The idea behind PPP, particularly its conceptual predecessor, 'the law of one price' has existed for centuries.

 

[danger007]

What's with seeing every thing through these negative glasses? You guys take everything about India just too seriously.

that guy comparing Iran with afghan... and he completely ignore differences between to countries... Security and talibans....

 

[Spectre]

Yes it has increased their influence and has kept dollar value up despite massive debt that they have.

Can you elaborate on the effect or lack thereof debt on currency valuations?

AFAIK dollar value depends a lot on risk on/off mentality in currency markets.

May be there is some causal relation b/w debt and currency valuations but then there is a lot of factors affecting currency valuations and the contribution of debt is debatable.

As long as US can service the debt there should be no issue. The primary reason for upwards movement of dollar these days is due to flight to safety in times of turbulence in global markets.

@asquare your opinion?

 

[Chinese-Dragon]

I'll look up the methodological objections China has. As a concept, PPP is sound. Therefore I'd imagine that the differences are purely methodological and not conceptual.

I think the political dimension is exaggerated. The idea behind PPP, particularly its conceptual predecessor, 'the law of one price' has existed for centuries.

Also, I think a lot of people see GDP as an indicator of "economic power" (a vital component of "national power") rather than just economic progress.

So it seems very misleading to say "China is number 1" (as per the sensationalist newspaper headlines) when we are still way behind. It gives the wrong impression, and a common sentiment here is that it is deliberately being pushed in order to pressure China for political reasons, when we are still only a developing country.

 

[asquare]

Can you elaborate on the effect or lack thereof debt on currency valuations?

AFAIK dollar value depends a lot on risk on/off mentality in currency markets.

May be there is some causal relation b/w debt and currency valuations but then there is a lot of factors affecting currency valuations and the contribution of debt is debatable.

As long as US can service the debt there should be no issue. The primary reason for upwards movement of dollar these days is due to flight to safety in times of turbulence in global markets.

@asquare your opinion?

In the modern world the most important determinant of a currency's value is financial flows. Since the size of financial transactions dwarfs trade in goods and services, currency fluctuations can be explained entirely in terms of financial flows. Therefore, you're right— risk adjusted asset returns are the most crucial determinant. Public debt, in the case of the US, is not a concern since issuing the world's only real reserve currency makes them essentially immune to default.

Interest rates (adjusted for inflation differentials) and risk perceptions (hence your point about flights to safety) are the most important determinants. In the coming months, as the increase in US interest rates draws closer we'll see a further dollar appreciation. This has second order effects too, investors will anticipate the appreciation of the dollar and this anticipated appreciation will cause larger purchases of US assets, increasing inflows to the US and causing a further actual appreciation.

Also, I think a lot of people see GDP as an indicator of "economic power" (a vital component of "national power") rather than just economic progress.

So it seems very misleading to say "China is number 1" (as per the sensationalist newspaper headlines) when we are still way behind. It gives the wrong impression, and a common sentiment here is that it is deliberately being pushed in order to pressure China for political reasons, when we are still only a developing country.

Maybe the Chinese government can initiate a more nuanced debate? Emphasising the differences in living standards between the West and China, while still accepting that PPP is a useful measure. I fully understand that it is very difficult to nuance political debate and newspaper headlines though.

 

[Spectre]

Public debt, in the case of the US, is not a concern since issuing the world's only real reserve currency makes them essentially immune to default.

Being a Finance Professional,I could see that we were gonna be on the same page on this.

However going beyond the obvious there are some very serious concerns about upcoming interest rate hikes and/or QE.

I raised the point regarding debt because though we all know dollar being what it is US can never default however after interacting with some economists and asset managers of major funds, I am beginning to nurture certain doubts. This probably is not the right thread to talk about it so I would end by posing a question on which I hope you can ponder on.

What happens when foreign capital inflows stop or reduces to such an extent that it is unable to bridge the trade deficit gap? Fiscal Balance dictates that private savings have to exceed business investment equivalently to fund the gap b/w this trade deficit and capital inflows.

What I have suggested above is probably gonna be a major avenue of attack on US economy and markets and this would make 2007 seem like a walk on a sunny day.

 

[The Last of us]

People do get carried away and sometimes make statements like Iran becoming an economic superpower. Sorry but this is not something realistic ( not in the foreseeable future anyway). I am not denying the capability of Iran but one has to remain reasonable. Iran's top priory should be to become a highly self sufficient, advanced, industrialised country and link those together and become an economy whom one can call "knowledge based economy". In other world, Iranian science and technology sector will innovate and create products and those ideas are funded and produced in industry and exported. Iran has already taken good steps in that directions and has made some good companies like MAPNA, but there is a lot more to be done. Obviously things like agriculture exports and especially service sector should also be invested in as well. However, what worries me the most is corruption and mismanagement. Without the proper management we will never reach our potential and reduce corruption. So the real challenge for Iran is not sanctions but whether it can remove the corrupt parasites in our society which sadly seem to be ubiquitous.

And with regard to the GDP issue, we need to concentrate on being advanced and industrialised (which increase GDP naturally anyway) and have great revenues. Simply increasing nominal GDP for the sake of increasing GDP would be to fool ourselves. Nominal GDP is not necessary an indicator of how advanced/industrialised one country is over another. For example, saudi arabia has higher GDP than Iran, does that mean they're more industrialised and advance than Iran? Absolutely not.

 

[mike2000 is back]

Firstly , he is living in Canada

secondly , Iran is not an Island , it's a country which is the home to oldest civilization on planet earth . i really hate it when people from western countries feel the need to get bloated just cause they were born in a richer country .

dude it's just a question of when and where you were given birth to . you're no better than the poor little black girl in african sahara who eats ants to continue living

britain is great yeah . great because they managed to invade others and colonize them steal their resources and brutally murder whoever stood up === > that is only if you're truly from GB .

When us Iranians had the tech to make eye implants 3000 BCE & public bathrooms 2000 years ago , i just can't imagine how shitty your people were living ====> that is only if they existed .

Bow to me

BTW , My deepest respects fly out to people of NK for making politicians in US pee their pants as the thought of attacking their home passes their dark and twisted minds . also for living under rough conditions and taking it from literally everyone .

even a random cyber-warrior from UK

Lool where did i mention your country in my reply? Lool. Since when is Iran North Korea? strange.....

Moreover, its north korea's own delusional leaders fault cor making ghrir own country such a shit hole and being isolated/sanctioned because of their constant emprty rhetorics and threats. Lool. Since when do you think the U.S Is scared/crying because of North korea??
Are you even serious or being sarcasic? North korea is nowhere near a single threat to the U.S , if not for the Chinese they would have gotten their asses handed out to them long time ago. Iran sometimes acts like north korea by overestimating itself and thinking they are anywhere near a threat to the U.S . Not even Russia and China who are leagues ahead of North Korea and Iran are delusional enough to think they can take on the U.S alone AS OF NOW and come out on top. Still need quite alot of time for that.

North korea could have followed its patron China(just like Vietnam did) and open up/shed its crazy outdated ideology while still retaining political control of the country, but no they have decided to keep being stubborn amd thinking they can take on the world as they are so mighty. all this while their people die of hunger and trying to immigrate to 'evil capaitalistic puppet' S.korea you call that paying your deepest respect to such leaders?? Devils advocate indeed. Lol. Even the chinese leadership have been trying to talk some sense to the crazies in North korea for ages now invane, they have all but given hope on doing that anymore.lool and here you are praising them.

I just dont get what people think when defending such a delusional leadership/rulers who have brought untold hardship to their people because they think they can take on the world. thats not geo politics works, hou always have to be pragmatic and know your strength(hide it but never overestimate it) and be ready to make concessions when necessary looking at the bigger picture/long term returns.. Geo politics is merely a game , you should never take it too seriously/personal. Just need to know how to play it my man.

 

[Manindra]

No. PPP is the way to go. GDP is a measure of nations production capacity. Just translating the GDP in local currency into US dollar using the exchange rate won't cover the difference in cost of goods and work force.

Give you and example: a $24,000 income per year in Iran will give you the same buying power and quality of life that $100,000 per year in Canada would give you. Simply speaking $1 can produce (or buy) much more in Iran than it could in Canada. So you need to take that into account in order to be able to compare nation's production capacity.


Well China is the biggest economy in the world. It was actually announced a few months back.

Yes, it would be but if you are not connected with global world.
Just people say India have many people who earn only $ 2 a day ignoring its buying power in India & subsidy provided by government of India.
But for international transaction you need US Dollar.
For social indicator PPP is best way but for national indicator nominal is the best.
I believe if Iranian government work hard then Iran would be in G-20 in 5 years after lifting sanctions.

 

[Skywalker]

What you said in summery :

BS , Blah blah ,.....

Sunni , suppress , Shia , kill , blah blah .....

BS , blah .

Anyways i hope progressive iran will be better for pakistan and the region

period .

Your personality seems to be on blah blah, hope fully you will now stopping taking blah blah sedative, when people have no answer they come up with blah blah.

 

[haman10]

Your personality seems to be on blah blah.

 

[IN-2030]

Tehran, Aug 9, IRNA - Iranian and Indian officials will meet next week to discuss plans to construct an aluminum smelter and a captive power plant in Iran in a project worth about $2.6 billion.

India pushes for $2.6b Iran smelter

National Aluminum Co Ltd (NALCO)’s idea to set up the 1-million-ton capacity facility is driven by power shortages in India given that electricity accounts for 40 percent of smelting costs.
Tapan Kumar Chand, NALCO’s new chairman and managing director, will meet Iran’s Ambassador to India Gholamreza Ansari in New Delhi next week to take things forward, the Tehran-based English newspaper Iran Daily reported.
Chand said his company would prefer a local partner who could supply cheap electricity to fire the smelter. For feedstock in the plant, NALCO will ship alumina from the Indian state of Odisha.
The company has been planning to build the smelter since 2014 but was dragging its feet because of sanctions on Iran.
Last month’s conclusion of nuclear talks has encouraged the Indian government and companies to push for stepped-up trade with the Islamic Republic.
India’s state-owned Kudremukh Iron Ore Company Ltd (KIOCL) plans to import one million metric tons of iron ore from Gol Gohar Mining Company of Iran. The Mangalore-based company makes pellets from the imported ore and exports them to Iran.
KIOCL has already supplied 50,000 metric tons of high grade iron ore pellets to Iran and expects to sell 1-2 million tons more.
On Monday, Ambassador Ansari said Iran would welcome India’s participation in various ‘big ticket projects’ in diverse sectors.
Indian Oil Minister Dharmendra Pradhan plans to visit Tehran at the head of a delegation to win back development of a major gas field, which New Delhi lost by dawdling under US pressures.
India has signed a memorandum of understanding to develop Iran’s strategically-located Chabahar port but a commercial accord has to be inked yet in order to start the project.

Long live Iran-India relationship .

Jalne wale jalte rahenge....India-Iran relation strong hote rahenge