Indian Economy - News & Updates - Archive

[macintosh]

India's Reliance ships spot Jan fuel to Iran
Tue Feb 3, 2009 7:56pm


NEW DEHLI, Feb 3 (Reuters) - India's Reliance Industries (RELI.BO: Quote, Profile, Research) exported more than 750,000 barrels of fuel to Tehran in January, trade sources said on Tuesday.

Reliance had stopped selling fuel to the Islamic Republic last year after French banks BNP Paribas (BNPP.PA: Quote, Profile, Research) and Calyon stopped offering credit on the deals, after pressure from Western nations that believe Tehran is trying to develop nuclear weapons.

"They sent one 36,000-tonne (306,684 barrels) gasoline cargo, and two 27,000-30,000 tonne (223,200 barrels) gas oil cargoes for Bandar Abbas port in January," said one of the traders. The company itself declined comment.

Tehran has not renewed its term supply deal with Reliance, said a Middle East-based source familiar with the Islamic Republic's fuel import supply programme, but the source declined to provide more details.

An Asian-based trader said Reliance continued to ship out refined oil products to Iran.

"How can they stop trade on one side? It is difficult to believe that they continue to buy significant quantity of Iranian crude and stop selling products," the trader said.

He said Reliance had exported two cargoes each of diesel and petrol to Iran in December, but in the following month two diesel cargoes and one petrol cargo were shipped out.

In January, India's Mangalore Refineries and Petrochemicals Ltd (MRPL.BO: Quote, Profile, Research) looked unlikely to renew its term deal to supply gas oil to Iran following a price dispute.

The Business Standard newspaper early last month reported that Reliance had decided to stop gasoline supplies to Iran after fulfilling all contractual obligations.

The report said that decision came after eight U.S. congressmen wrote to the U.S. Export-Import Bank to suspend all financial assistance to Reliance until it agreed to halt sales to Iran.

Reliance operates a 660,000 barrels per day refinery at Jamnagar in western India and its subsidiary Reliance Petroleum Ltd (RPET.BO: Quote, Profile, Research) commissioned a new export-focused 580,000 bpd plant adjacent to the existing refinery.

After reaching full capacity, the $6 billion new refinery and the existing plant will make the Jamnagar complex the world's single-biggest supplier of fuels to the global market, pumping out 1.24 million bpd.

(Additional reporting by Luke Pachymuthu in DUBAI; Editing by Mark Williams)

 

[Nihat]

China likely to drag India to WTO over toy ban: Report


Beijing: China may ask the World Trade Organisation (WTO) to investigate a six-month import ban slapped on its toys last month by India, the official China Daily reported on Wednesday, citing a source close to the matter.

Worries about protectionism are rising as the impact of the global financial crisis spreads, increasing the temptation for governments to bring in measures that will help their firms in the short-term but worsen the overall economic pain.

India last month banned imports of several types of toys from China for six months "in the public interest," without giving any further details of why.

The Toy Association of India President, Raj Kumar, said India had likely taken the step in the interest of the economy and consumer safety.

The Chinese government will proably ask the global trade regulator to look into whether the move violates its laws, the state-owned paper said, quoting a source who asked not to be named.

China's manufacturing industry - a key supplier of toys, apparel and food to much of the world - has faced a wave of complaints in recent years, most recently as thousands of people have fallen ill as a result of consuming milk powder tainted with melamine, a chemical used to make plastics.

The world's leading toymaker Mattel recalled over 21 million Chinese-made toys worldwide in 2007 due to excessive levels of lead paint and other unsafe components.

But the Chinese report quoted a trade lawyer saying that the Indian policy was an illegal and protectionist.

"The ban cannot hold water. The Indian side is doomed to lose in the court if the Chinese government appealed to the WTO Dispute Settlement Body," said Fu Donghui, managing director of Allbright Law Firm Beijing, which deals with WTO-related cases.

Beijing had already said last month that it was "strongly dissatisfied" with the European Union's imposition of duties on its screws and fasteners, which it said had obvious protectionist intentions and harmed the rights of Chinese manufacturers.

 

[LCA]

Why isn't it easy to beat India in IT- Software-Infotech-The Economic Times

Why isn't it easy to beat India in IT
4 Feb 2009, 1004 hrs IST, IANS

WASHINGTON: China is unlikely to overtake India in outsourcing business anytime soon and it would take not one country but a lot of small ones to
knock it off the top, according to a US expert.

"China is pretty far behind India and even places like the Philippines and Eastern Europe. It's largely due to a language problem," said Robert Kennedy, author of The Services Shift, a new book on offshoring in an interview with Forbes.com.

"There are real challenges. Services exports from China will grow, but they won't overtake India anytime soon," he added. Only government policy could offset the growing trend of globalisation, said Kennedy, director of the Global Initiative at the University of Michigan's Ross School of Business.

"But there are about 200 countries in the world, and about 150 of those are developing countries. If you look out over the next five years, 90 percent will be open to the global economy."

"A decade ago, if you wanted to cut costs it was an India story. We identified 30 countries that have policies in place to promote service exports. All of the parking tickets in New York City are processed in Ghana, he said. "It won't be one country that will knock India off the top. It will be a lot of small countries."

Tremendous liberalisation on the policy side is a key driver of outsourcing on a macro level, he said noting "In the mid-to-late-1980s, the global economy consisted of the US, Europe and Japan."

"Places like India and China were behind Central and Eastern Europe and parts of Africa. They weren't really engaged in the global economy. That's completely changed. Roughly 3 billion people have entered the global economy."

The digitisation of business processes is another driver, he said noting, "Perot Systems has a huge claims processing operation in India... In the past it was done by middle-income Americans, but now it's done by middle- or high-income Indians."

The low cost and high speed of computing and telecom besides a global pool of talent around the world were the other drivers.

"There is a lot of engineering talent in India and China, which leads to the last trend -- the rise of a global business culture," Kennedy said.

"It's much easier for someone at Citibank or AIG to do business in India if they've been to the same schools and they use the same software like PeopleSoft. That has made it much easier to go abroad, as well," he said.

 

[macintosh]

Cairn to invest $3.8 bn in Rajasthan
Press Trust of India
Wednesday, February 04, 2009 (Barmer)


Cairn India will invest $3.8 billion in three blocks out of its 25 discoveries in Rajasthan, more than double the previously approved cost of $1.5 billion.

The development cost of the Mangala, Bhagyam and Aishwariya fields is proposed at $2.9 billion, against previously approved $1.5 billion.

Another $940 million would be invested in laying a heated pipeline from Barmer to the Gujarat coast, said an official of ONGC, which has a 30 per cent stake in the Rajsthan fields.

When the $1.5 billion cost was approved in 2005, the peak production was estimated at 1,25,000 barrels a day, which in the revised figure has gone up to 1,75,000 barrels per day, he said, adding there has been an increase in the cost of equipment, facility, drilling and manpower.

 

[LCA]

Indian annual inflation at 5.07 pct on Jan. 24 | Markets | Reuters

Indian annual inflation at 5.07 pct on Jan. 24
Thu Feb 5, 2009 11:28am IST

NEW DELHI, Feb 5 (Reuters) - India's wholesale price index <INWPI=ECI> rose 5.07 percent in the 12 months to Jan. 24, below the previous week's annual rise of 5.64 percent, government data showed on Thursday.

It was also below a median forecast in a Reuters poll of analysts of 5.21 percent.

The annual inflation rate was 4.78 percent during the corresponding week of the previous year.

The wholesale price index is more closely watched than the consumer price index, which is published monthly, because it covers a higher number of products and is released weekly.

 

[macintosh]

Forex reserves up, stands at USD 248,611 mn
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Forex reserves increased by USD 990 million to touch USD 248,611 million as on Jan. 30, 2009, mainly due to rise in foreign currency and assets collections on a weekly basis.

As per the weekly statistical supplement of the Reserve Bank of India (RBI) released on Feb 6, 2009, foreign currency assets increased by USD 589 million to stand at USD 238,894 million.

During the same period, the reserve position in the International Monetary Fund (IMF) increased marginally by USD 2 million at USD 830 million. The gold reserves increased by USD 399 million to stand at USD 8,884 million.

Foreign currency assets expressed in USD include the effect of appreciation or depreciation on non-US currencies (such as Euro, Sterling and Yen) held in reserves.

 

[slugger]

ADB: India shows resilience amid economic downturn

India has shown resilience amid the global economic downturn, the Asian Development Bank (ADB) said on Saturday.

The global economies have seen a downturn, which may become even deeper, and the recovery will take longer than earlier expected, but India's economy was expected to grow at around 7 percent in 2008, the Manila-based bank said in a press release, quoting ADB president Haruhiko Kuroda.

"Although lower than last year's 9-percent growth, this is nonetheless an impressive growth rate and a remarkable demonstration of India's resilience," said Kuroda, who also called for a "global solution" for the global financial crisis.

Besides immediate short-term actions to stabilize finance, longer-term planning was also needed to reform the regulatory and institutional framework for the world's financial systems, he said.

An "Asian Financial Stability Dialogue", involving finance ministries, central banks and other financial regulators, could discuss and coordinate efforts to address the financial crisis, he added.

ADB is an international development finance institution whose mission is to help its developing members to reduce poverty and improve the quality of life of their people, according to the bank's own profile. Established in 1966, ADB is owned and financed by its 67 members, of which 48 are from the region and 19 are from other parts of the globe.

Since 1986, ADB has provided more than 19. 2 billion U.S. dollars of assistance through loans, grants, and technical assistance packages

Source

 

[slugger]

Indian vice-president visits Myanmar to enhance bilateral economic co-op

Indian Vice-President Shri M. Hamid Ansari is due to arrive in Nay Pyi Taw later on Thursday to begin an official visit to Myanmar.

Ansari's Myanmar trip will be a reciprocal one to that to India made by Vice-Chairman of the Myanmar State Peace and Development Council Vice Senior-General Maung Aye in April last year.

During Maung Aye's April New Delhi visit, three documents between the two governments were signed, namely a framework agreement on the construction and operation of a multi-modal transit and transport facility on the Kaladan River connecting the Sittway Port in Myanmar with the Indian state of Mizoram, a memorandum of understanding on intelligence exchange to combat transnational crime including terrorism, and an agreement on avoidance of double taxation for investors from the two countries and prevention of fiscal evasion with respect to taxes on income.

The framework agreement includes upgrading of Sittway Port of Myanmar, improvement tasks for running of vessels along the route of Kaladan from Sittway Port to Sitpyitpyin and construction of roads from Sitpyitpyin to the border region.

In June last year, Indian Minister of State for Commerce and Power Shri Jairam Ramesh visited Nay Pyi Taw, during which four more economic cooperation agreements were inked. They were one on bilateral investment promotion, a 20-million-U.S. dollar credit line between the Exim Bank of India and the Myanmar Foreign Trade Bank (MFTB) for financing the establishment of an aluminum conductor steel reinforced wire manufacturing facility, another 64-million-dollar credit line between the two banks for financing three 230-kilovolt transmission lines in Myanmar and the one for providing banking arrangement between the MFTB, Myanmar Investment and Trade Bank and the United Bank of India.

In October of the year, Indian Minister of State for Commerce and Power Jairam Ramesh visited Myanmar, during which the 3rd meeting of Myanmar-India Joint Trade Committee was held in Mandalay touching on issues such as bilateral cooperation in banking services, extension of export items and promotion of trade between the two countries, upgrading of border trade carried out at Reedkhoda (India) and Tamu-Moye (Myanmar) to normal trade, and bilateral cooperation in electric and energy sectors.

Following the meeting, India granted 18 more items of goods for trading in border area with Myanmar, bringing the total to 40.

An India-Myanmar information technology (IT) center was then opened in Yangon.

In November the same year, Myanmar and India held its 9th round of consultations between foreign offices of the two countries at deputy minister level, agreeing to cooperate in a wide range of areas of mutual interest and promptly implement the bilateral agreements inked during Maung Aye's India visit.

Relations between Myanmar and India, which share a border of over 1,600 kilometers, have been growing during the past few years with cooperation in all sectors, particularly in those of trade and economy.

Myanmar official statistics showed that Myanmar-India bilateral trade reached 995 million U.S. dollars in the 2007-08 fiscal year with Myanmar's exports to India accounting for 810 million U.S. dollars and its imports from India 185 million U.S. dollars.

India stands as Myanmar's 4th largest trading partner after Thailand, China and Singapore and also Myanmar's second largest export market after Thailand, absorbing 25 percent of its total exports.

The Myanmar compiled figures also showed that India's contracted investment in Myanmar reached 219.57 million U.S. dollars as of October 2008. India injected 137 million dollars into the oil and gas sector in 2007.

 

[Destructlord]

India only has $248,611 billion USD in its reserves??!!!!!! :-S How do you want to confront the global financial crisis with that guys?! After all of these sanctions Iran has $500,010 billion USD and even though Majlis blaming Pres. Ahmadinejad thats he spends too much!!!

 

[jeypore]

India only has $248,611 billion USD in its reserves??!!!!!! :-S How do you want to pass the global economy crisis with that guys?! After all of these sanctions Iran has $500,010 billion USD and even though Majlis blaming Pres. Ahmadinejad thats he spends too much!!!

Mr. destructlord,

You need to re-read your figures for Iran. Total GDP of Iran is 386 billion, how could you have foreign reserve of 500 billion. Look at your figures again and come back.

Thanks.

 

[tyagi]

India only has $248,611 billion USD in its reserves??!!!!!! :-S How do you want to pass the global economy crisis with that guys?! After all of these sanctions Iran has $500,010 billion USD and even though Majlis blaming Pres. Ahmadinejad thats he spends too much!!!

iran has 81 billion us $ in foreign exchange reserves.

 

[macintosh]

India only has $248,611 billion USD in its reserves??!!!!!! :-S How do you want to pass the global economy crisis with that guys?! After all of these sanctions Iran has $500,010 billion USD and even though Majlis blaming Pres. Ahmadinejad thats he spends too much!!!

India has 248.611 billion USD and Iran has 80 billion USD.

 

[slugger]

Forex reserves rise $990 m

Foreign exchange reserves rose [by] $990 million during the week ended January 30, largely on account of revaluation of gold in reserves and non-dollar currencies vis-a-vis the dollar.

According to the latest figures released by the Reserve Bank of India, total foreign exchange reserves, including gold and SDR, rose $990 million to touch $248.6 billion. While foreign currency assets rose $589 million, the value of gold in reserves rose $399 million during the week. Reserve with the International Monetary Fund rose $2 million.

Major international currencies such as the euro and the pound have been weakening against the dollar, which in turn, is impacting the valuation of foreign exchange reserves, expressed in dollar.

 

[slugger]

India set to beat China in growth rate

All it the brighter side of the current downturn. India may pip export-dependent China in the last quarter of FY09 and emerge as the fastest growing nation among all large economies.

As China&#8217;s GDP growth rate dropped to 6.8% during the October-December quarter and is expected to go down further, the Indian government has become hyper-active to achieve at least a 6.5% growth in Q4 to register a win over China.

If India achieves a better growth rate than China even for one quarter, the message will go across to the world and help India in wooing foreign capital, waiting to chase growth stories. Already, government officials in India have been highlighting reports of a few investment analysts who doubted China&#8217;s official GDP numbers and claimed that it could just be in the positive territory in the last quarter.

A secretary in the government of India confirmed to SundayET that India has a brighter chance of overtaking China in the last quarter of FY09, or Q1 in case of China which follows the calendar year.

&#8220;China is heavily dependent on exports and the way things are unfolding China&#8217;s GDP for January-March quarter would be quite low. We have so far achieved 7.9% and 7.6% growth in the first two quarters, according to the provisional numbers. Though our Q3 number, to be announced by month end, is expected to be less than the comparable number in China (6.8% in Oct-Dec, 08), the softening of interest rates will stimulate demand and ensure a faster growth rate than China in Q4,&#8221; he said.

Though the Chinese economy grew at 9% during 2008, down from the revised 13% growth rate in 2007, the last quarter number (6.8%) has made the Indian authorities hopeful that India might be able to pip China in GDP growth. As China&#8217;s export constitutes 37% of its economy against 13% in the case of India, the recession in the developed world will make China suffer the most.

PM&#8217;s economic advisory council (EAC) member Satish C Jha said he won&#8217;t be surprised if India grew faster than China. &#8220;The situation in China is worse than us. Exports are drastically coming down and China is hit hard. Our economy is driven more by domestic demand and our rural economy is much more resilient than that of China. If our stimulus packages are implemented properly, I won&#8217;t be surprised if India pips China in GDP growth,&#8221; Mr Jha said.

Source....

 

[Dilli]

Warner Bros to outsource jobs to India

In a move that could ruffle a few feathers in the Barack Obama administration, American entertainment giant Warner Bros has said it will be outsourcing jobs to India.

It is believed that about 200 positions are to be outsourced to India and Poland by Warner Bros, which will slash as many as ten per cent of its 8,000-strong workforce in the coming days.

"While no final decision have been made internationally, the company expects the layoffs, elimination of open positions and outsourcing to affect nearly 800 positions worldwide, or approximately ten per cent of its 8,000 employees," a Warner Bros official told PTI in an e-mailed statement.

About 200 open positions and 300 outsourced jobs would be affected as part of the reduction, while another 300 employees would be laid off, the official said, adding that jobs would be outsourced to India.

While the spokesperson declined to comment on exact number of jobs being moved to India, the sources said that about 300 positions are being outsourced, out of which about 200 would go to India and Poland.

Open positions are referred to those, which are currently vacant, and for which, the company was hiring.

In January, Warner Bros' Chairman and Chief Executive Barry Meyer along with president and chief operating officer Alan Horn had said the company would be reducing its staff strength.

"We have examined every aspect of our business in order to cut costs responsibly and to keep staff reductions to a minimum.

One way to achieve these objectives is to outsource certain job functions to a third-party company," Meyer and Horn wrote in an e-mail to employees on January 20.

It noted that even though the decision to cut the workforce was "very difficult" to make, the move reflects changes necessary for stability and growth going forward.

"We are very sad to announce that based on the global economic situation and current business forecasts, the studio will have to make staff reductions in the coming weeks in order to control costs," the e-mail said.

Meyers and Horn wrote in the e-mail that the changing entertainment business landscape, shifting consumer demand and the overall state of the economy have affected companies around the world, and "Warner Bros is not immune to these factors".

Warner Bros to outsource jobs to India