Indian Economy - News & Updates - Archive

[Neo]

Jet Airways India, Deccan Fall to Record Lows on Fuel ​

By Vipin V. Nair

July 1 (Bloomberg) -- Jet Airways (India) Ltd., the nation's biggest domestic carrier, and Deccan Aviation Ltd. fell to record lows in Mumbai on concern higher jet fuel prices will widen losses from an estimated $1.5 billion this year.

Jet Airways slumped 11.3 percent to 380.75 rupees, extending its decline for the year to 62 percent. Deccan, the biggest low- cost carrier, declined 5.1 percent to 56.85 rupees.

Indian Oil Corp., the nation's largest refiner, raised prices today, bringing increases for jet fuel to 52 percent since January. Higher fuel costs, the biggest expense for airlines, led to Jet Airways posting its first loss in five years.

``Jet Airways' shares have room to decline further as it's expected to post losses for the next two years,'' said Lokesh Garg, an analyst with Kotak Securities Ltd., who rates the stock `sell'. ``It may touch as low as 300 rupees.''

Jet Airways and its budget-carrier unit may post a combined loss of 20 billion rupees in the next two fiscal years, Citigroup Inc. said in a note to clients on June 26.

The carrier today fell to the lowest since it sold shares for 1,100 rupees apiece in Feb. 2005.

`Catch-22'

``The airlines are facing a Catch-22 situation. They are under pressure to raise fares because of the rising fuel costs. But that may lead to lower demand and affect load factors,'' said Kapil Kaul, chief executive officer of the local unit of Centre for Asia Pacific Aviation, an industry consultant. ``Increase in oil prices is going to be a regular affair.''

India's carriers may double their combined losses to $1.5 billion this year on fuel and discounted tickets, the Centre predicted last month.

SpiceJet Ltd. declined 11 percent to 22.15 rupees, the lowest since Dec. 10, 2004.

To contact the reporter on this story: Vipin V. Nair in Mumbai at vnair12@bloomberg.net.

Bloomberg.com: India & Pakistan

 

[Neo]

India Stocks Drop to Lowest in More Than a Year on Rate Concern ​

By Saikat Chatterjee

July 1 (Bloomberg) -- India's benchmark Sensitive Index fell for a third day to its lowest in more than a year on concern that rising interest rates will hurt profits of banks and property developers.

ICICI Bank Ltd., the nation's second-largest lender, spiraled near a two-year low after raising the rate charged to its best borrowers. DLF Ltd., the nation's biggest developer, plunged to a level last seen 12 months ago.

``The high interest rates are already hurting demand for loans and other consumer goods,'' said R.K. Gupta, who manages the equivalent of about $100 million of stocks at Taurus Asset Management Co. in New Delhi.

The Bombay Stock Exchange's Sensitive Index, or Sensex, fell 499.92, or 3.7 percent, to 12,961.68 at the 3:30 p.m. local time close. This is the index's lowest level since April 5, 2007. The S&P CNX Nifty Index on the National Stock Exchange declined 143.80, or 3.6 percent, to 3,896.75.

Property developers fell after mortgage lenders including Housing Development Finance Corp., the country's largest, and ICICI Bank said they will raise interest rates. ICICI Bank fell 6.5 percent to 589.10, its lowest since Aug. 28, 2006, after raising the rate it charges its best borrowers to 16.5 percent from 15.75 percent. State Bank of India, the nation's biggest, fell 7.8 percent to 1,025.30.

DLF, Unitech

DLF fell 6.9 percent to 369.1 rupees, its lowest since July 4, 2007. Unitech Ltd., India's second-biggest developer, declined 5.6 percent to 161.75 rupees, its lowest since Oct. 11, 2006.

Stocks also fell after India's federal ruling coalition and its communist allies failed to resolve their differences over a nuclear accord with the U.S., threatening the survival of Prime Minister Manmohan Singh's government. The communist parties, whose support is necessary for the ruling coalition to maintain its majority in parliament, have threatened to withdraw their backing if the government proceeds with the accord.

``A mid-term election in India looks quite possible and what is worse is that the country may have to deal with another hung parliament,'' said Taurus Asset Management's Gupta. In addition, ``expectations of quarterly earnings that are due next week do not look very good.''

Housing Development Finance will report on July 16.

Fuel Prices

India's government last month raised retail fuel prices to pare more than $50 billion of revenue losses at refiners, which are forced to sell fuel at below-market price. The fuel price increases contributed to the acceleration in India's inflation to the fastest pace in 13 years.

Oil today rose, extending this year's 48 percent gain, after ABC News reported Israel is increasingly likely to attack Iran this year, starting a conflict that would threaten supplies from the Middle East. Crude oil for August delivery rose as much as 2 percent to $142.73 a barrel in electronic trading on the New York Mercantile Exchange.

The following stocks rose or fell. Tickers are in brackets behind company names:

Jet Airways (India) Ltd. (JETIN IN) dropped 48.40 rupees, or 11 percent, to 380.75, a record low. Indian Oil Corp. (IOCL IN), the nation's largest refiner, yesterday said it will raise the price of jet fuel by 4.4 percent starting today.

JSW Steel Ltd. (JSTL IN) declined 124.7 rupees, or 14 percent, to 775.90. The country's third-biggest producer of the metal plans to spend 60 billion rupees in the year ending March 31 to expand and buy mines in India and overseas to increase raw material supply, the Financial Express reported.

Tata Motors Ltd. (TTMT IN) fell 17.55 rupees, or 4.1 percent, to 408.5. The nation's largest maker of trucks and buses said it will increase the price of commercial vehicles by an average 3 percent to cover higher input costs. The prices will be raised from today, the Mumbai-based company said.

To contact the reporters on this story: Saikat Chatterjee in New Delhi at schatterjee4@bloomberg.net

Bloomberg.com: India & Pakistan

 

[Neo]

Citigroup to Raise $400 Million for Indian Roads​

By Sumit Sharma

July 1 (Bloomberg) -- Citigroup Inc., the biggest U.S. bank, plans to raise an additional $400 million for investments in India with Infrastructure Development Finance Co. Ltd., said Sanjay Nayar, chief executive for the firm's Indian operations.

Citigroup and Infrastructure Development, a Mumbai-based financing company, have already raised $525 million for a fund that will invest in roads, ports, power plants and other utilities in India, Nayar told reporters in Mumbai.

Prime Minister Manmohan Singh is wooing funds to build the airports and power stations needed to sustain the nation's economic growth. 3i Group, Europe's biggest publicly traded private equity firm, raised $1.2 billion in April for India, where infrastructure projects are estimated by the government to reach $450 billion by 2012.

Blackstone Group LP, the world's biggest buyout firm, isn't part of this fund, Nayar said. Citigroup had agreed to start a $5 billion Indian infrastructure fund with Blackstone and two Indian finance companies in February 2007.

Bloomberg.com: India & Pakistan

 

[Flintlock]

Cuba seeks Indian help to set up 150,000 bpd refinery
Tue Jul 1, 2008 12:30pm BST

NEW DELHI, July 1 (Reuters) - Cuba has invited Indian firms to invest in a planned 150,000 barrels a day refinery in the island nation, India's oil ministry said in a statement on Tuesday.

It also sought India's help in upgrading and expanding its existing refineries at a meeting in Madrid on Monday between Indian Oil Minister Murli Deora and his Cuban counterpart Yadira Garcia Vera, the statement added.

The two countries have finalised the India-Cuba Hydrocarbon Agreement for co-operation in the oil and gas sector, it added without elaborating.

ONGC Videsh Ltd, the overseas investment arm of state-run explorer Oil and Natural Gas Corp (ONGC.BO: Quote, Profile, Research), has stakes in nine exploration blocks in Cuba, and total ownership of two. (Reporting by Nidhi Verma, Editing by Mark Williams)

Cuba seeks Indian help to set up 150,000 bpd refinery | Reuters.com

 

[Neo]

India’s trade deficit widens to record ​

Wednesday, July 02, 2008

NEW DELHI: India’s trade deficit widened in May to a record $10.77 billion as the pace of export growth slowed and oil import costs surged, official data showed on Tuesday, helping the rupee fall to a 15-month low.

Analysts said the surge in global oil prices would keep pressure on the deficit and rupee in months ahead with demand for oil products in Asia’s third-largest economy seen remaining robust despite a hike in fuel prices.

“The rise in the oil import bill was expected as global prices have surged. The market was anticipating a high trade deficit and current account deficit,” said D K Joshi, principal economist at domestic ratings agency CRISIL. Data released by the Commerce and Industry Ministry showed India’s export growth slowed to a 14-month low of 12.9 per cent in May, sharply down from expansion of 36.6 per cent in April due in part to slowing sales in key markets like the United States.

Exports in the month stood at $13.78 billion, up slightly from $12.21 billion a year ago, while imports grew by an annual 27.1 per cent to $24.55 billion, driven mainly by oil purchases, which surged by 50.8 per cent to $8.47 billion.

Global crude oil prices rose almost 16 per cent in May to $130 a barrel at the end of the month. On Tuesday, oil was trading at just over $142 a barrel.

The trade deficit in May widened from $7.1 billion in the same month a year ago, and was up from $9.87 in April 2008. The rupee eased to a 15-month low of 43.440/450 to a dollar at 1030 GMT, sharply lower from Monday’s close of 43.0250/0300 as rising prices of crude intensified concerns over the trade deficit and the stock market fell sharply.

The local unit has lost more than 9 per cent so far in 2008. For the first two months of the 2008/09 fiscal year, the deficit stood at $20.64 billion, higher than $13.92 billion in the same period of last year.

“In the first five months of the calendar year, India’s trade deficit has amounted to $41 billion, more than 60 per cent higher than $25.5 billion deficit for the same period of 2007,” Robert Prior-Wandesforde, an economist with HSBC, said in a report.

“At this rate, the country is heading for a triple-digit trade deficit in calendar 2008, equivalent to about 10 per cent of GDP.” But other analysts said the depreciating rupee would help revive export growth and improve profit margins of software exporting firms.

India’s trade deficit widens to record

 

[Bushroda]

Exploring India's booming economy
Morris R. Beschloss,
The Desert Sun, CA
July 3, 2008

Although India is acknowledged as one of the world's hottest growth areas, little is known of the components that are fast pushing this nation to the top among the world economies.

Population

India possesses the fastest growing population in the world, expanding at the rate of 16 million per year. India already is pressing China for the No. 1 spot and is due to pass its fellow Asian giant within the next generation, on its way to 1.5 million people.

This mega-nation's per-capita income is destined to eventually sextuple the per-capita income of its giant neighbor because of its much greater drive toward modern technology.

India's middle class numbers 330 million and is fast growing. Their newly earned money is spent on retail sales growth, averaging 13 percent or more for the next several years.

Infrastructure

The government's investment in the country's infrastructure is skyrocketing, rising 9.9 percent in 2007. Automotive sales are accelerating at a 17 percent growth rate; airline passenger traffic is expected to more than triple over the next five years from 14 million to about 50 million people per year.

India's government already has issued plans on spending $90 billion on industrial-related projects over the next three years.

This will include:

High-speed rail freight lines.

Power plants to supply an additional 4000 megawatts.

Three new seaports.

Six new airports.

12 new industrial clusters.

Over the next four years, by 2012, the Indian government plans on spending a total of $500 billion to build out and improve India's infrastructure.

Manufacturing

Manufacturing accounts for almost 30 percent of India's economy. India has lately become a world leader in the technology service industry. It now handles the outsourcing for hundreds of U.S.-based computer hardware and software manufacturers and telecoms.

The single largest employer in India is the manufacturing sector, which employs more than 100 million people. This sector is now growing at an annual clip in excess of nine percent.

Corporate earnings

Corporate earnings in India are growing at an astounding 35 percent annual rate. The 30 largest companies of that most populous nation have increased their earnings at 35 percent in this year's first quarter. It's far surpassed projected revenues by 20 percent.

Of 800 publicly-traded companies, average earnings growth has reached 17 percent.

Three companies have doubled their earnings over last year - Ambuja Cement and telecom giants Bharti Airtel and Reliance Communications.

Such world-class giants as Tata Steel and pharmaceutical company Ranbaxy Labs also have experienced major earnings growth, with 12 percent and 19 percent growth, respectively.

Tata Motors is expected to put thousands of cars on India's growing network of highways late this year. It's expected that millions of Indians will eventually own these incredibly cheap cars ($2,500 each).

Investment

Private equity investors are now putting more money into India than in China. Nearly $20 billion in private equity poured into India in 2007, a 156 percent jump over 2006, and 34 percent greater then invested in China in 2007. Infrastructure investments account for the lion's share of the private equity flows into India, followed by telecom, banking and financial services, and real estate.

Natural resources

To cap such a long list of advantages is India's quest for an increasing search for oil sources all over the world. Its steel industry expects growth of about 8 percent a year as demand nearly doubles from the current level of 36 million tons of steel per year to 65 million tons by 2012. This demands a huge consumption of iron ore.

India's copper consumption stands about 2.5 percent of the world consumption, still less than China's per capita consumption. With the stupendous growth that lies ahead, this subcontinent will be relying on an increasing amount of the world's dwindling supply of global natural resources.

Morris R. Beschloss writes frequently for The Desert Sun. His blog on mydesert.com is updated as news happens. He can be heard on KPSI Radio 920 AM every Friday 8-9 a.m., KGAM Radio 1450 Saturday 9-10 a.m., seen on KESQ Channel 3, and on Time Warner Cable TV Channel 111.

 

[Flintlock]

End may be in sight for today's G8
Mon Jul 7, 2008 4:29am BST

By Alan Wheatley, China Economics Editor

TOYAKO, Japan (Reuters) - As the Group of Eight rich nations get down to business at their annual summit, Asia finds itself confined to the fringes, asking how long it must wait for political power to flow east to match its economic muscle.

Japan, of course, is a founding member of the G8. But efforts to recognise the clout of the region's emerging economic dynamos are fumbling and piecemeal.

Some Asian states recently won a few more votes at the International Monetary Fund. India's finance minister is in the running to chair the Fund's main policy-setting panel, while Hong Kong publicly called last week for an Asian to be the next head of the influential Bank for International Settlements.

And China, India, South Korea, Indonesia and Australia are among 14 countries that will make a cameo appearance at this year's summit, which is taking place at a luxury hilltop resort on the northern Japanese island of Hokkaido.

But this is small beer considering the sea change in the world economy since the first "fireside chat" summit in 1975.

In that year, China was in the final spasms of Mao Zedong's Cultural Revolution and India plunged into a state of emergency. The two neighbours were economic dwarfs.

Today, though not yet giants, the pair leads a phalanx of developing countries whose rapid growth has driven energy and commodity prices to such dizzy heights that the fallout will be a major topic of this week's talks.

"If you think of the G8 as a club of the most influential countries in the global economy it's hard to see how you can keep China and India out," said Hal Hill, an economics professor at Australian National University in Canberra.

Indeed, President Nicolas Sarkozy of France said on Saturday it was "not reasonable" for the G8 -- which also includes the United States, Japan, Germany, Britain, Italy, Canada and Russia -- to keep meeting without emerging powers like China and India.

End may be in sight for today's G8 | Reuters.com

 

[Flintlock]

India Inc hopes reforms will now get a push forward
8 Jul, 2008, 1441 hrs IST, IANS

NEW DELHI: With Left parties withdrawing support to the United Progressive Alliance (UPA) government on Tuesday, India Inc hopes the slow-moving economic reforms programme will now be put on the fast track.

From key decisions pertaining to the financial sector to further opening up of the Indian economy to foreign investors, the Prime Minister Manmohan Singh government had its hands tied down by the crucial support from Left parties.

These, the corporate sector feels, can now see the light should the government survive following support from Samajwadi Party, which has been known to be supportive of the private sector when it was in power in Uttar Pradesh.

"The nuclear deal will now come to a logical conclusion. The economic reforms will re-commence," said D.S. Rawat, secretary general of the Associated Chambers of Commerce and Industry (ASSOCHAM).

"For long there has been a hide and seek game going on between the Left parties and the UPA government over the civilian nuclear deal with the US," Rawat told reporters in one of the first reactions from the corporate sector.

An immediate reaction also came from the stock market where equities staged a smart rally and made up for some of the lost ground minutes after Communist Party of India-Marxist (CPI-M) general secretary Prakash Karat announced the withdrawal of support.

The sensitive index (Sensex) of the Bombay Stock Exchange (BSE), which had lost 476.03 points in the morning, immediately cut its losses to 208.8 points, or 1.54 percent.

"Left leaders were creating hurdles in implementing some decisions like foreign direct investment in insurance sector," said D H Pai Panandikar, corporate analyst and former chief of the Federation of Indian Chambers of Commerce and Industry (FICCI).

"The government can now think of opening up the insurance sector," he said, adding one of the important issues, which the Left was consistently opposed to, was allowing 49 percent foreign investment in the insurance sector.

"The deal will also help India become energy-efficient," said the president of the RPG Foundation, a Delhi-based economic policy think-tank.

Senior functionaries of the Confederation of Indian Industry (CII), however, were unavailable for immediate comment, but some members hoped the realignment within the dynamics of the UPA government would result in reforms being put back on track.

"The Left leaders were never creative in their approach about issues of national importance. They were acting more as activists than responsible coalition partners," said Dalip Kumar, senior economist with the National Council of Applied Economic Research (NCAER).

"The pace of reforms, however, will depend upon the kind of support which the government now gets from its new allies like the Samajwadi Party," he added.

India Inc hopes reforms will now get a push forward- Indicators-Economy-News-The Economic Times

 

[Bushroda]

India Inc hopes reforms will now get a push forward
8 Jul, 2008, 1441 hrs IST, IANS

India Inc hopes reforms will now get a push forward- Indicators-Economy-News-The Economic Times

Good riddance of these commie jack@sses. Something that should've been done a longtime back.

 

[muse]

Indian software exports cross $40 billion mark

NEW DELHI: Indian software exports grew 29% to cross the $40 billion mark in the fiscal year just ended despite global economic turmoil, the outsourcing industry’s top body said.

“I would request you to focus not just on the number but on the maturity and resilience the industry has shown,” Som Mittal, the president of the National Association of Software and Services Companies told reporters Wednesday.

“Never have there been so many uncertainties in the overall world.” IT export growth for the fiscal year ended March 31 was down 4$ from the previous fiscal year, with earnings sharply reduced after the rupee gained more than 12% against the dollar in 2007, the body has said.

“After what hit us last year, and I would say hit, we were very susceptible to the currency,” said Mittal, saying last year’s slowdown was a wake-up call to the industry.

“If the rupee would always depreciate, we would always make money. But we don’t know which way the rupee will go. We need to weed out inefficiencies.”

The United States is the biggest market for Indian software and service exports, which are forecast by the industry group NASSCOM to hit $60 billion by 2010. But the software services industry was able to weather a US economic slowdown down fuelled by a housing loan crisis by diversifying into new areas and growing the domestic Indian market, Mittal added.

Last year the domestic software services market grew by 26% to almost $12 billion, taking the industry as a whole past the $50 billion mark. Software and services revenue is supposed to grow between 21 and 24% in the current fiscal year, a decrease NASSCOM’s Mittal attributed to the industry’s larger base and ongoing global economic uncertainty. “The first round of growth is always easier,” said Mittal. “The next 10 years is going be structurally very different.” Mittal said the industry would need to compete harder by adopting automation and increasing services in other languages in order to continue to post high growth. Mittal also expressed concern about a talent crunch and said the industry would have to increase its training efforts.

The industry currently employees two million people but Dun and Bradstreet, the US-based provider of financial information, has estimated that the industry would face a shortage of half a million skilled workers by 2009. afp

 

[Bushroda]

India to register growth rate of 8.5 pc this year: Official

Colombo (PTI): Indian economy is expected to grow by over 8.5 per cent during the current fiscal notwithstanding indications of a global slowdown, a top Indian government official said on Thursday.

"We are hopeful that India will continue to maintain high economic growth and the economy could grow by at least 8.5 per cent during 2008-09," Commerce Secretary Gopal K Pillai said here.

Pillai said the demand for infrastructure funding was estimated at 500 billion dollars and the present annual flow of 80 billion dollars investments in the core sectors was encouraging.

He said the fundamentals of the economy were satisfactory and augured well for high growth.

Pillai said if the current level of investments in the infrastructure was maintained there was no reason why India could not continue to register a GDP growth of between 8-10 per cent during the next few years.

As per the estimates released by the Central Statistical Organisation, real GDP at factor cost grew by 9 per cent in 2007-08 after recording a 9.6 per cent growth in 2006-07.

While services continued to grow robustly at 10.8 per cent during the last fiscal, the industry reported a slight slowdown in growth in 2007-08.

Industrial growth at 8.3 per cent in 2007-08 was considerably lower than the 11 per cent growth recorded in 2006-07.

The manufacturing sector grew at 8.8 per cent during the previous fiscal, however lower than the strong 12 per cent growth clocked in 2006-07.

 

[Bushroda]

UAE affected by rising inflation in India
By Subramani Dharmarajan, Senior Reporter
XPRESS, United Arab Emirates
July 10, 2008

With rates hitting a 13-year high of 11.42 per cent towards end of June in India, there is an overriding concern over a cascading effect on prices of food and other commodities imported by traders in the UAE.

These concerns have grown after Indian economists predicted that inflation would peak at 12.5 per cent to 13 per cent over the next two months in the wake of rising world oil prices.

“Naturally with Indian inflation in double digits and no signs of stabilising anytime soon, imports from India are sure to cost more,” said Saifee Rupawala, CEO of EMKE Group, the parent company of LuLu hypermarket chain. “With the UAE economy already reeling under the global inflationary trends and prices of almost all consumer goods, both food and non-food, witnessing unprecedented rise, I think the rise in Indian inflation will only add to the woes. “The Indian government has already put export restrictions in place on many commodities such as non-basmati rice and pulses,” he noted.

Silver lining

Rupawala also saw a silver lining, “We do maintain optimum stock levels and also import directly from other countries. We don’t see any need to press the panic button yet since our dedicated international buying team is always exploring new sourcing centres.”
More on Xpress: Homepage | Dubai's newest and truest tabloid newspaper, online

Veteran hotelier Lakhmichand Lulla, who founded the Ambassador Hotel, reckoned that
with cheaper vegetables coming from Jordan and Syria, the impact of the rise in prices of
Indian vegetables imported into the UAE would be somewhat blunted.

Kiran Sangani, chartered accountant and senior member of the India Business Professional Council, said that prices of rice, sugar and milk in India have shot up to 30
per cent, while the cost of living in the UAE has gone up to 12 per cent over the past two months, even as rise in rents, educational fees and transportation costs continue to
pummel families. “If you want to get good quality vegetables and fruits, they come at Dh40 to Dh50 per kilogram,” said Sangani.

The rising inflation is also affecting the workplace.

According to him, businessmen can’t bring new people to the UAE without shelling out 20 to 30 per cent more in salaries, both to retain existing staff and recruit more personnel from India. Sangani said the “comfort pay level” for a family of four to live decently in rented flat is Dh20,000 to Dh25,000 a month.

 

[Flintlock]

'SEZs driving forces of economic growth'

13 Jul, 2008, 1235 hrs IST, IANS
NEW DELHI: India's booming economy will scale further heights if steps like special economic zones (SEZs) are executed effectively, says Rashid Alleem of Hamriyah Free Zone Authority (HFZA), Sharjah.

The energetic director general of HFZA, a free economic zone spread in an area of 25 million sq metres, does not believe that inflation and sluggish world economy could hamper India's medium and long-term growth process.

"Inflation is a global phenomenon. There is sluggishness in the world economy. Your economy is on the right track. Pace of economic process is quite satisfying," Alleem said in an interview.

Quite impressed by India's SEZ policy, Alleem said there was no scope for either complacency or short-sightedness to maintain a competitive edge in today's world economy.

"Economy is moving so fast. It is an era of free zones. If you sit with clarity and a focussed vision, there is no problem. India has to set business examples for others," he said.

Alleem, along with a delegation from the United Arab Emirates (UAE), was in the city to attend a global conclave on "Special Economic Zones: What Will Drive Them", organised by India's leading industry lobby Associated Chambers of Commerce and Industry of India (Assocham) July 9.

Referring to HFZA, Rashid said: "Around 3,000 companies have their set-ups in our free economic zone. Around 300 of them are Indian companies like Essar and Larsen & Toubro."

HFZA, which started operations in late 1995, has seven zones, namely, construction world, maritime city, steel city, timber land, oil and gas zone, perfume world, and petrochemical zone.

"There are 400,000 people employed in HFZA. One can just imagine the kind of job potential an SEZ possesses ," he said.

Assocham also conferred the best performing SEZ award on HFZA. Planning Commission member Anwarul Hoda gave the award to Rashid.

Asked if he had plans for collaboration with Indian firms for developing more free economic zones in his country or in India, Rashid said discussions were going on, but nothing tangible had yet come out.

"We are, of course, in touch with some Indian players, but I do not have anything tangible to share with you. It is perhaps too early to think of results," Rashid said.

In India, there are 462 formally approved SEZs at present, of which 222 have already been notified, and over 40 of them are fully operational.

An official estimate says that 336,235 people were employed - directly and indirectly - in SEZs as on March 2008, while direct employment created in notified SEZs stood at 97,993 as on March 31, 2008.

"It is heartening to learn that India has put in place dedicated mechanism to look into every proposal for SEZ, and for the subsequent clearance to be given," he said.

'SEZs driving forces of economic growth'- Infrastructure-Economy-News-The Economic Times

 

[Flintlock]

India's trade environment more favourable: World Bank

New Delhi (PTI): India's trade environment is more favourable compared to its other South Asian neighbours with the trade tarriffs in the country substantially reduced since the nineties, a World Bank report said.

"India has achieved substantial reductions in tariffs since the nineties and the current external environment is relatively favourable compared to low-income and South Asian country group averages", Lead Economist and Trade Programe Leader at the World Bank Institute Gianni Zanini said, while releasing a report 'World Trade Indicators (WTI) 2008'.

Zanini, who was speaking at a the event jointly organised by FICCI and World Bank here, however, added that India's agriculture exports face high barriers and its share of trade with preferential partners is low.

The report said India's governance environment is relatively more favourable than the average South Asian or low -income country and is an improvement from the situation in the early 2000s.

Along with improvement in trade facilitation, real growth in trade and related jump on trade integration has been high, driven by high import requirements of a booming economy and services exports, it added.

It also said with severe power shortages, congested roads, and poor-quality railways and ports, deficient infrastructure is a major binding constraint to trade activity in the country.

Zanini, was hopeful that the trade growth in India would be maintained despite slowdown in the world economy.

"There is evidence of 'delinking' of the world economy with India's growth", he said.

The Hindu News Update Service

 

[Flintlock]

India's GMR Acquires 50% of InterGen for $1.1 Billion (Update3)

By Archana Chaudhary and Vipin V. Nair

June 25 (Bloomberg) -- GMR Infrastructure Ltd. acquired 50 percent of Dutch power utility InterGen NV for $1.1 billion, the biggest overseas energy acquisition by an Indian company.

GMR Infrastructure bought the stake from AIG Highstar Capital II L.P., a fund owned by American International Group Inc., according to a statement from the Bangalore-based company today. Ontario Teachers Pension Plan owns the remaining half of InterGen, the statement said.

The stake will give GMR access to InterGen's 12 operating power plants in the U.K., the Netherlands, Mexico, Australia and the Philippines, which have total annual sales of $1.65 billion. GMR Infrastructure reported sales of 22.95 billion rupees ($536 million) in the fiscal year ended March 31.

This is ``an integral part of our global strategy to be the world's leading energy and infrastructure company,'' G.M. Rao, chairman of the GMR Group, said in the statement. ``This acquisition will provide us a platform to expand in InterGen's existing geographies and new geographies.''

GMR Infrastructure has a $1.1 billion loan for two years to finance the stake, Chief Financial Officer Ashutosh Agarwala told reporters in Mumbai today. The loan may be replaced later with long-term debt, he said.

The purchase is expected to be completed by December, GMR Infrastructure said.

InterGen has a total gross capacity of 12,766 megawatts, including 4,680 megawatts of projects under development.

``We exit our investment leaving InterGen as a strong, well- capitalized company under the exceptional leadership of current Chief Executive Officer Neil H. Smith and his very capable team,'' AIG Highstar Managing Partner Christopher H. Lee said in a separate statement.

N.M. Rothschild & Sons advised GMR Infrastructure.

To contact the reporters on this story: Archana Chaudhary in Mumbai at achaudhary2@bloomberg.net; Vipin V. Nair in Mumbai at vnair12@bloomberg.net.
Last Updated: June 25, 2008 05:54 EDT