Indian Economy-News & Updates

[Varad]

FY12 export target of $300bn still doable: Commerce secy

India's export story is starting to lose sheen. Exports have grown just 11% in October, while imports have surged over 20%, a development that pushed trade deficit to record high of USD 20 billion.
Despite the downtrend in exports, commerce secretary Rahul Khullar says, the USD 300 billion target for FY12 is still within reach. However, he warns that if something untoward happens, either in US or in Europe or elsewhere, then the knock-off and contagion effects will hit everybody.
In an interview to CNBC-TV18’s Siddharth Zarabi, Khullar says, there is no further scope for additional sops for industry. "We have already done what we could," he adds.

FY12 export target of $300bn still doable: Commerce secy - CNBC-TV18 -

 

[Varad]

Gujarat lags in FDI, gets only 2.5% of total inflows

Industrial investment may be pouring into Gujarat, and the state may be growing at a fast rate, but it continues to lag behind other industrialised states of the nation in attracting Foreign Direct Investment (FDI). This is evident from the state’s lowly share of only 2.5% of the total FDI inflows in the country between April and August in the current year.

Data released by the Union department of industrial policy & promotion shows that Gujarat attracted FDI of Rs1,908 crore ($426 million) in April-August 2011 and was ranked fifth among all states in this area.

The total FDI in the country, in the same period, stood at Rs77,864 crore ($17.37 billion) which means that Gujarat attracted only 2.5% of the total inflows. This, at a time, when FDI inflows in the country have nearly doubled when compared with the previous year.Maharashtra, which is planning an industrial policy on the lines of Gujarat to attract investment, attracted FDI to the tune of a whopping Rs28,124 crore ($ 6.26 billion), i.e. 36% of the total inflows.

Delhi, parts of UP, and Haryana, attracted Rs22,272 crore ($ 4.98 billion) worth of FDI, i.e. around 29%.

Minister of state for finance, Saurabh Patel, said that Gujarat was poised to attract higher FDI.

A senior government official, requesting anonymity, said, “The major industrial investments, which are driving Gujarat’s growth, are from domestic sources. FDI in the state has been traditionally lower. However, inflows this year are likely to be much higher than in previous years.” He pointed out that FDI inflows in the state are set to go up over the next few months after automobile majors Ford and Peugeot start work on their car manufacturing plants. Both the companies have announced investments of Rs4,000 crore over three years.

Gujarat had attracted FDI to the tune of Rs3,294 crore in 2010-11, while it was worth Rs3,876 crore in 2009-10. Officials said that FDI inflows this year would be significantly higher. According to DIPP, Karnataka attracted FDI worth Rs3,844 crore ($ 858 million) in the same period, the third highest, followed by Tamil Nadu with Rs3,177 crore ($715 million ). Andhra Pradesh was ranked sixth with FDI of Rs1,836 crore ($412 million), while West Bengal attracted FDI to the tune of Rs1,393 crore ($312 million).

The sector-wise breakup of FDI in different states was not available, but the highest investments were in the services sector, telecommunications, drugs & pharma, automobiles, computer software & hardware, power and petroleum among others.

Gujarat lags in FDI, gets only 2.5% of total inflows - India - DNA

 

[SpArK]

Unisafe forays into India; aims Rs 800 cr sales in 5 yrs - NDTV Profit

 

[SpArK]

A new horizon for Korea-India ties


India and South Korea have almost equal GDPs and rank among the world’s top 14 economies, showing highly commendable growth performance in the past two decades. In recent years, the countries have been deeply committed to sharing common values on democracy, the market economic system, outward and global orientation, and putting an emphasis on high-level learning in an IT environment.

The countries share past colonial experiences as well. And both belong to the G-20, playing an important role in shaping a new global economic architecture. Against this backdrop, it was historic and significant that Korea and India enforced the Comprehensive Economic Partnership Agreement (CEPA) in January of 2010. The almost two-year-old bilateral CEPA has provisions for the substantial reduction of both tariffs and non-tariff barriers in a phased manner.

Despite their many similarities, India and Korea have almost opposite factor endowments in terms of land and population. Until the late 1980s, the two countries pursued different paradigms of development; while India pursued an inward-looking development path, Korea followed an outward-looking development strategy.

As a result, the two countries show differences over time in their stages of industrial development, manpower development, and trade and investment liberalization regimes. In light of the inherent differences in both economies, the CEPA opened up new opportunities to deepen bilateral relations on trade, investment, and R&D collaborations with the free movement of professionals.

In this context, the 10th India-Korea Dialogue organized by the Seoul Forum for International Affairs (SFIA) and the Indian Council for Research on International Economic Relations (ICRIER), was held in Chennai last week with a focus on post-CEPA evaluation and further utilization. It turned out to be very timely and productive.

Since the historic effectuation of the Korea-India CEPA, Korea’s exports and imports to and from India increased sharply in 2010 ― by 43 percent and 37 percent, respectively ― compared to 2009’s performance, amounting to $11.4 billion and $5.6 billion. Given this immediate visible increase in bilateral trade, the two countries must work together to make the agreement of higher quality than the original through active implementation of the agreement by establishing necessary institutional and administrative measures.

It is well known that the Indian economy has grown by 7-8 percent annually in the past several years to provide an important engine of global growth alongside China while the U.S. and most EU economies were severely hit by the recent global economic meltdown and subsequent sovereign debt problems. As the silver lining amid a gloomy world economic outlook, China and India, the most populous two nations, recorded 10 and 7.6 percent growth, respectively, last year. China is rapidly aging but India maintains the youngest population structure. With a rising per capita income, India offers a blue ocean in the domestic market.

Beyond the inherent expanding of market access to manufactured goods to each other’s economy, the two countries need to work on collaborative measures for respective service sector development not only to upgrade their economic structure but also to create jobs. It is well known that India and Korea have comparative advantages in the IT sector, India being an IT soft powerhouse and Korea being an IT hard power. A synergistic combination of the two in this IT era is likely to bring in tremendous value-added to both economies.

For example, the Delhi-Mumbai Industrial Complex, an ambitious corridor for India’s future growth pole in the global information age, requires a variety of collaborations between the two countries. Korea has rich experiences in modern SOC development projects overseas as well as IT-based new town developments domestically.

Both countries have already proven that the Hyundai Automotive Plant in Chennai and India’s Tata Daewoo in Gunsan have been excellent examples of bilateral business success. India’s back office functions and competitive cloud computing service in its finance sector and Korea’s new initiative to become a regional financial hub could be effectively combined to ensure much-needed financial development in both countries. Indeed, both India and Korea, as likeminded economies, can create an “Asian knowledge platform” to benefit themselves and Asia as a whole.

The writer is currently the Foreign Investment Ombudsman and Chair of the Presidential Regulatory Reform Committee.

 

[SpArK]

India announces $100 million Standby Credit Facility to Maldives - India - DNA


Prime Minister Manmohan Singh Saturday announced a USD 100 million Standby Credit Facility to Maldives and a number of other key initiatives, including building the capacity of Maldivian security forces, boosting India's ties with this strategic island nation.

The crucial decisions, taken during talks between Singh and Maldivian President Mohamed Nasheed in Male, assume significance as these reflect India's growing outreach towards the tiny island nation in the Indian Ocean amidst attempts by China to make inroads rapidly in the region.

Recognising the common threat from terrorism and piracy, the two sides decided to undertake coordinated patrolling and aerial surveillance, exchange information and develop an effective legal framework against these.

Singh, who was here primarily for the 17th SAARC Summit, was accorded a rare honour when he addressed the 'People's Majlis' (Maldivian Parliament), becoming the first foreign head of government or State to do so in its history of 78 years.

The two sides signed six agreements, including a historic framework accord on development cooperation and a pact under which India will extend a Standby Credit Facility of USD 100 million to help stabilise Maldivian fiscal position.

The new Standby Credit Agreement would significantly enhance infrastructure and capacities in Maldives.

The Framework Agreement on Cooperation for Development is a blue print for cooperation in areas such as trade and investment, food security, fisheries development, tourism, transportation, information technology, new and renewable energy, communications and enhancing connectivity by air and sea.

Singh, who is the first Indian Prime Minister to visit Maldives in eight years, noted that terrorism, extremism and piracy were the common threats to the two countries.

Among the pacts signed was an MoU on Combating International Terrorism, Trans-National Crime, Illicit Drug Trafficking and Enhancing Bilateral Cooperation in Capacity Building, Disaster Management and Coastal Security.

An agreement on the transfer of the sentenced persons was also signed between India and Maldives to facilitate the social rehabilitation of sentenced persons in their own countries. It provides nationals of either country, who have been convicted and sentenced, the opportunity to serve their sentences within their own society.

Singh said India will help build capacity within Maldives by supporting the construction of a National Police Academy.

"Our two countries have agreed upon a multi-pronged approach to deal with these problems," he told the Maldivian lawmakers.

A Joint Statement issued after the talks said, "the two leaders agreed to strengthen cooperation to enhance maritime security in the Indian Ocean Region through coordinated and aerial surveillance, exchange of information, capacity building and the development of an effective legal framework against piracy."

After the agreement-signing ceremony, Singh told a joint press conference that the two leaders discussed all issues, including the future cooperation in the bilateral partnership as also the cooperation which was already on a high growth trajectory.

On his part, President Nasheed thanked Singh for the framework agreement of cooperation on a number of areas that will be beneficial to both the countries and go a long way in Indian assistance to Maldives' development and progress.

The other pacts signed included one on renovation of the Indira Gandhi Memorial Hospital, the main referral hospital in Maldives. Singh said work would be taken up on full swing and India expects to hand over the renovated facility by May 2013.

The two leaders reaffirmed their unequivocal and uncompromising position against terrorism in all its forms and manifestations, the joint statement said.

Recognising that their security interests are interlinked in the region, they reiterated their assurance that each side would be sensitive to the concerns of the other on the issue and that their respective territories would not be allowed for any activity inimical to the other and by any quarter.

India also extended a Line of Credit (LOC) of USD 40 million to Maldives for the construction of 500 housing units.

Both sides agreed to undertake measures to strengthen links in the banking and financial sectors, including by improving credit and insurance facilities and assistance in the establishment of development finance institutions.

It was agreed to enhance connectivity by air and sea, in particular through shipping links and ferry services. The two leaders directed officials to expeditiously work towards starting a regular passenger-cum-cargo ferry service between Kochi and Male and other destinations between the two nations.

Singh announced that India would undertake a feasibility study on the development of the regional port in Kulduffushi in Maldives. The two leaders also directed that direct flights between Mumbai/Delhi- Male sectors be operationalised soon.

The two leaders recognised the need to pursue reform of the main UN bodies, including the revitalisation of the UN General Assembly and expansion of the UN Security Council.

Nasheed reiterated his country's support for India's candidature for permanent membership of an expanded and reformed UN Security Council.

 

[IndoCarib]

India to grow at 7.6% in '12 despite industrial slowdown: Citi - NDTV Profit

 

[Varad]

Ease FDI norms in aviation sector: ASSOCHAM


With Kingfisher Airlines facing serious financial crisis and most others making losses, an industry chamber on Sunday said the government needs to rationalise taxes on the aviation sector and ease FDI norms to allow foreign airlines to pick up stake in Indian carriers.

" The government allows FDI of up to 49% in Indian carriers. However, foreign airlines are not allowed to invest directly or indirectly in domestic carriers, a rule the government should scrap for healthy growth of civil aviation sector," ASSOCHAM secretary general D S Rawat said.

"But major private and government-owned airlines like Air India, Jet Airways, Kingfisher Airlines and SpiceJet have flown into debt turbulence due to elevated fuel costs and fierce price wars.

"Airlines could suffer losses worth about Rs 15,000 crore in the current financial year with Air India alone likely to account for more than half of it," Rawat said.

The airline industry, he said, required fresh funds and there would be a question mark on their survival if they are unable to raise them.



The statement could be music to the ears of Kingfisher owner Vijay Mallya who has himself been raising this demand for several months now. However, other carriers like Jet Airways have been opposed to it.

Asking the government to formulate a new civil aviation policy, Rawat said in a report that the aviation industry has all ingredients to grow but airlines were facing huge losses as over one-third of operating costs were due to the price of aviation turbine fuel which was heavily taxed.

To keep pace with the booming passenger and cargo traffic, the industry needs an investment of Rs 1.5 lakh crore over the next 15 years, the ASSOCHAM official said.

Ease FDI norms in aviation sector: ASSOCHAM - Hindustan Times

 

[53fd]

India has seen jobless growth, says top adviser:

India may have grown at over eight percent, but a top adviser has expressed concern over the "stagnant employment situation", saying the country with 40 million unemployed people witnessed "jobless growth" during the Eleventh Five Year Plan period from 2007-08 to 2011-12.

"The only explanation for an almost stagnant employment situation is simply that not enough jobs are available in the economy, even with an eight percent plus growth rate," National Advisory Council member N.C. Saxena told IANS in an interview.

"The Eleventh Five Year Plan witnessed jobless growth," he said.

Saxena, a retired bureaucrat, said the government's argument that more young people are now attending educational institutions fails to explain "why there are still 40 million unemployed people in the country (according to the Current Daily Status figures of National Sample Survey Organisation 66th round), who should have got the jobs if the economy was creating them."

He has flagged the issue for consideration of NAC chairperson Sonia Gandhi, who also heads the Congress-led United Progressive Alliance.

Pointing out a flaw in policy implementation, Saxena said "the government could create only one million jobs against a target of 50 million jobs during the Eleventh Plan period and has now set a near impossible target of creating 60 million jobs during the Twelfth Five Year Plan (2012-13 to 2016-17).

According to Saxena, a former member secretary with the Planning Commission, the number of actual workers during 2007-08 to 2011-12, when the Indian economy was growing rapidly, increased just by a million.

In contrast, the number of people in the age group 15-59 years increased by about 50 million during the period.

He pointed to a lacuna in the demographic dividend theory of the government - that the pool of people in the working age group can be used productively in an economy, saying the number of people in the labour force actually declined from 470.1 million in 2004-05 to 469.9 million people in 2009-10.

"This means the Plans completely failed as there has not been any significant increase in employment opportunities. Against this, the number of non-workers in the age group 15-59 years soared," said Saxena.

Suggesting a relook at policy implementation, Saxena further said "one has to examine whether macro policies in India have been pro-employment and pro-poor in the post reform period".

Offering a solution, Saxena expressed hope that "the National Council for Skill Development under the prime minister makes skill development among youth a national priority."

Besides the creation of new jobs, he said, the government should also aim at improving the quality of employment in the unorganised sector in which nearly 92 percent of the work force is engaged.

India has seen jobless growth, says top adviser - India - DNA

 

[Varad]

Vietnam’s pepper output fall raises export hopes for India

Vietnam, which emerged as the major pepper producer and exporter by the turn of last century, dislodging India as the leader in global pepper trade, is experiencing a drop in the production and a low stock of the commodity. The production projections in near future are not encouraging either. Crop projections in countries such as Brazil and Indonesia are also low. So is the carryover stock in these two countries. Other than Vietnam and India, other main pepper producing countries include, Brazil, Indonesia, Malaysia, Sri Lanka, China and Ecuador.

Vietnam now being the largest producer and exporter of pepper, and Brazil and Indonesia being two other major producers, any development in Vietnam, Indonesia or Brazil — be it with regard to production, harvesting, or quality — is bound to have some effect on the pepper market in India and elsewhere. And that’s exactly what is happening. The current low level of production and low carryover stocks in these three countries are raising export hopes from India in the months to come.

“According to reports, Vietnam is having low stocks. There are estimates that the production is also expected to fall this year. Brazil and Indonesian crop is expected to be lower. Low carryover stock in Brazil and Indonesia is likely to raise exports here in coming months. Latest reports from Spice Board of India indicates the likely pepper exports for the period April-August 2011 have risen by 12 per cent to 8.750 mt in 2011 from 7,800 mt in 2010 same period,” Religare Commodities, said in its latest report on pepper.

The report said, “Exports and domestic demand from north India remained good. Traders expect that with low stocks, lower global production and rising export demand, the trend is likely to remain bullish for the commodity from a medium to long-term point of view. Strengthening in the Dollar vs Re rates could have beneficial impact on the export front. But short-term correction possibilities remain.”

Interestingly, production of pepper in India is predicted to be lower. However, this increased export demand can be met even with a lower production, thanks to a dip in domestic consumption.

According to International Pepper Community (IPC) figures, Indian production during 2010-11 is pegged around 48,000 tonne as against 50,000 tonne during 2009-10. And Indian consumption during 2011 is estimated around 40,000 tonne and carry-over stock at the beginning of year at 14,500. Consumption is seen lower by 10 per cent probably due to higher prices of pepper.

Directorate of Cocoa, Areca nut and Spices Development (DASD) also predicted a lower production for the next year. According to DASD, Indian pepper output during the new crop season (2011-12) is estimated to be around 43,000 tonne, which is lower by around 5,000 tonne than the previous crop. Both trade and government sources are of the opinion that the new crop would be lower due to disease and neglect. Of the total, 1,000 tonne would be white pepper.

Carry -over stock at the end of 2011 is also projected lower at around 15,000 tonne. Karnataka crop is pegged around 25,000 tonne, and followed by Kerala with 13,000 tonne. Tamil Nadu chips in with 5,000 tonne.

This depleting stocks in its turn helped pepper futures pick up. Geojit Comtrade in its pepper report said, “Pepper futures picked up due to depleting stocks and March-12 thin arrivals in the local markets. The spot price stood steady at Rs.32500 per 100kg in Kochi mandi. Availability of Indian pepper at a competitive rate in the international market is likely to increase the export demand. Indian parity was offered in range $7,150-$7,450 per tonne. Dry weather for the last few days in major growing areas in southern states in India is likely to boost the harvesting activities.”

“However India Met*eorological Department had cited the return of La Nina, which is associated with good rains over India. As per media report, the Malaysian Pepper Bo*ard is lining up various strategies to inc*rease pepper cultivation in the country, the objective is to produce 40000 tonnes of pepper by 2020, official added. Acc*ording to revised estimates by IPC, the total production of pepper is lowered by 17230 tonnes from 2010 output to 3.18 lakh tonnes in 2011,” it said. zz

Vietnam

 

[Tangent]

India to grow at 7.6% in '12 despite industrial slowdown: Citi - NDTV Profit

This is because of wrong policies of Congress govt. RBI kept on tightening the nuts, no new initiative or reforms forthe govt.
In fact the govt. has been in sort of paralysis on the economic matter since long.
They make targets of 9+% and do nothing or opposite to achieve that.
This govt. is fast running out of it's time.

 

[Varad]

India International Trade Fair begins on Monday

NEW DELHI: The 31st edition of the annual India International Trade Fair (IITF) that opens Monday is expected to attract 6,000 exhibitors and nearly 1.5 million visitors.

Finance Minister Pranab Mukherjee, along with Commerce and Industry Minister Anand Sharma, is scheduled to inaugurate the 14-day event to be organised at Pragati Maidan, the country's largest fair and exhibition venue.

IITF is organised by the India Trade Promotion Organisation (ITPO), under the commerce ministry. It is the largest integrated trade fair in the country with both B2B (business to business) and B2C (business to consumer) components.

The first five days of the fair (Nov 14-18) will be reserved for business visitors only. The fair will open for general public from Nov 19-27.

According to ITPO chairman and managing director Rajeev Kher, this year the organisation has not partnered with any country but with four Indian states -- West Bengal and Jharkhand as partner states and Bihar and Orissa as focus states.

"There is a huge participation from various states and abroad. This year even the number of outlets have been increased," Kher said.

The theme for this year's event is 'Indian handicrafts - The magic of the gifted hands'.

The fair will host products from 230 exhibitors from 26 countries, in addition to 27 Indian states, 31 central government ministries and around 260 private companies.

The visitors can also expect a wide-variety of Indian and international cuisines.

International participants too seem excited about the event and business prospects, with South Africa's Department of Trade and Industry setting up about 19 stalls.

The IITF is one of the largest trade fairs in the world in terms of exhibitors and visitor participation.

India International Trade Fair begins on Monday - The Economic Times

 

[IndoCarib]

Friedman: India reaches out to 'the last person' - Houston Chronicle

 

[SpArK]

India's NALCO says finalises 240,000 T alumina export deal | Agricultural Commodities | Reuters

 

[ramu]

Coke, partners to invest $2 billion in India over 5 years

GURGAON: In one of its single biggest investments, beverage major Coca Cola and its partners will invest USD 2 billion (around Rs 10,000 crore) over the next five years to enhance its operations in India and set up a new plant.

"Along with our partners, we will invest USD 2 billion in India in the next five years. Apart from China and US in the past, this is one of our single largest investment in a country," Coca Cola Eurasia and Africa group president Ahmet C Bozer told reporters here.

India is one of the most important growth markets for Coca Cola and the investment is being made as a part of the company's 2020 vision of doubling system revenues globally, he said.

Since its re-entry into India in 1993, Coca Cola has pumped over USD 2 billion into the country.

"This investment is part of our commitment to invest in innovation partnerships, portfolio of brands and enhancing infrastructure," Coca Cola India and South-West Asia president and CEO Atul Singh said.

A part of the planned investment will go toward setting up a company-owned manufacturing plant.

Singh said the firm is currently scouting locations in Karnataka for establishing the new facility.

Coke, partners to invest $2 billion in India over 5 years - The Times of India

 

[Varad]

Focus on developing world helps India boost exports

http://www.livemint.com/2011/11/14004114/Focus-on-developing-world-help.html