Indian Economy-News & Updates

[Yeti]

India build for next Landy Defender

Jaguar Land Rover will build the next generation of its back-to-basics Defender off-roader in India, the boss of parent company Ratan Tata has revealed.

It may even export Indian-built Defenders back to the UK in kit form, to be assembled there by British workers. The aim is to lower manufacturing costs and build vehicles closer to their prime markets, such as booming India.

Tata told Autocar magazine: “We are looking at producing the platform for the new Defender in India.” The idea is to use the same platform as the basis for some Tata car models.

It is the next step in the ambitions of the British-based, Indian-owned luxury car company, to expand into both India and China.

Land Rover already builds some of its Freelander models in India – exported in kit form for final assembly there – after announcing last March that it was to build an initial 2000 cars a year at its plant in Pune.

Executives described the move at the time as ‘dipping a toe in the water.’ But a full manufacturing facility would mark a significant step up.

The next Defender is due around 2015 and the recent DC100 concept shows what the company has come up with so far in that regard, although negative public reaction towards the rather soft-looking, high-tech concept could persuade them to change it somewhat. -Daily Mail & IOL

 

[Yeti]

NEW DELHI: The expanding middle class in India will be worth over $1tr by the end of this decade, offering huge opportunities for marketers, a new study has argued.

According to figures from PricewaterhouseCoopers, the advisory firm, this consumer segment is due to achieve a value of $1tr by 2021, part of a trend observable across a number of developing nations.

The key driver for this process in India will be the rising number of people within the middle class, increasing from 470m in 2010 to 570m in 2021, a shift holding considerable promise for marketers.

"Our research shows pioneers that succeed in creating profitable growth use strategies and innovations very different from those employed in more developed economies," the study said.

Generating in-depth consumer insights must play an essential role in securing such a favourable position, reflecting the fact that these shoppers have distinctive needs within countries like India.

"Value propositions can't simply focus on low cost if they are also going to connect with the segment's aspirational framework. Nor can companies treat the emerging middle class as a homogeneous set of customers," the study said.

"Differences based on location (urban vs rural), age, religion, and language require customised products and services based around a standard and scalable platform and the right value proposition will fuel rapid growth."

SD Shibulal, CEO of Infosys, the IT services firm, suggested that innovation would be a crucial capability for organisations seeking to progress in India and other similar nations.

"India has an emerging middle class of 300m people, they want goods, they want services," he said. "Countries like India are looking for products that are affordable, durable, relevant to the market."

"So many corporations, not only from Europe, from anywhere else in the world, are looking at these emerging markets as growth opportunities."

Wipro, another information technology pioneer based in India, is also utilising knowledge gained locally to achieve success overseas.

"Some of our highest growth markets are outside the Western world, including India, including the Far East, including the Middle East, and what we're doing is very, very significant reverse innovation in India, custom made to the domestic requirements of the emerging markets," said Azim Premji, its chairman.

Data sourced from Business Standard/CNN; additional content by Warc staff, 30 January 2012

 

[Shaurya]

India plans to settle Iran oil payment in Rupees, says RBI deputy governor H R Khan

NEW DELHI: India is considering settling payment for oil imports from Iran in rupees, the Reserve Bank of India deputy governor H.R. Khan said on Monday.

Khan said New Delhi was evaluating different options to settle payment for oil imports from Iran, India's second biggest oil supplier.

"There are different options which are being evaluated. It is a bilateral issue. It cannot be discussed openly," Khan said.

Earlier this month Reuters reported that India and Iran have agreed to settle some of their $12 billion annual oil trade in rupees, citing a government source, resorting to the restricted currency after more than a year of payment problems in the face of fresh, tougher U.S. sanctions.

When asked whether India was considering settling oil payments through rupees, Khan said: "Yes".

On whether the payments would continue, he said: "Yes, it is continuing and hope it will continue."

Iran's supplies to India have been fraught with payment problems in the past 13 months after a clearing mechanism was scrapped in December 2010 and refiners have sought alternative supplies

 

[StingRoy]

Sensex ends at 17200; highest January gain in 18 years - The Economic Times

MUMBAI: The Bombay Stock Exchange's Sensex witnessed a sharp surge in last half an hour of trade to close near important resistance levels. The benchmark recorded highest gains for the month of January in 18 years, say reports. All the sectoral indices closed in the green with banks, realty, metals and auto leading the upmove.

The Nifty ended at 5203.75, up 116.45 points or 2.29 per cent. The broader index touched a high of 5215.40 and low of 5120.15 intraday.

The Bombay Stock Exchange's Sensex closed at 17201.04, up 337.74 points or 2 per cent. The 30-share index touched a high of 17238.99 and low of 16965.58 in trade today.

BSE Midcap Index moved 2.03 per cent higher and BSE Smallcap Index gained 1.46 per cent.

Amongst the sectoral indices, BSE Bankex rallied 3.98 per cent, BSE Realty Index gained 3.45 per cent, BSE Metal Index moved 2.61 per cent higher and BSE Auto Index advanced 2.37 per cent.

 

[Shaurya]

Good News from Manufacturing sector

So far, economic development in the world’s largest democracy has focused on services more than manufacturing. But India needs balance and car makers provide an example to follow.

India’s manufacturing sector makes up only 16 per cent of its GDP. This needs to increase if the country is to find jobs for its huge population. Yet on the back of strong domestic demand, global car manufacturers have flocked to India and are helping to make the sector globally competitive – particularly in small cars. Capacity is expected to increase from 4.8 million units in 2010 to 12 million in 2018 according to Rothschild. India is set to become the third-largest auto maker in the world and could become a major exporter.

Small cars make up 70 per cent of the domestic market. And although Tata and Mahindra provide strong local competition, foreigners are dominant. Foreign direct investment (FDI) into the automotive industry increased by 48 per cent to $7.4-billion in 2011, according to Ernst & Young. Suzuki alone has a 45-per-cent share.

With no caps on FDI, new entrants are spurring competition. And in contrast to recent policies on retail, state governments have been welcoming. Clusters are being created in the south and west of India where states such as Tamil Nadu and Gujarat offer cheap land to attract investment.

But it’s not just the domestic market that is fuelling growth. Exports already make up 15 per cent of output, and many firms have ambitions to develop the international angles. Hyundai uses India as the global source point of all their small cars. Last year it exported 247,000 cars from India – almost double the 2007 figure. Ford (F-N12.420.131.06%) is stepping up export of Indian cars to over 50 countries. And Toyota (TM-N73.480.370.51%) says it plans to export cars to South Africa in March, 2012, the first time it will ship Indian-made cars overseas.

Infrastructure bottlenecks, skills shortages and slow-moving bureaucracy pose big challenges to India’s manufacturing development. But as labour cost in China rise, India has an opportunity to win market share. In autos, it may have found a formula that can be replicated.

India’s wheels of fortune - The Globe and Mail

 

[bhagat]

India's per capita income crosses Rs 50K

New Delhi: Reflecting growing prosperity, India's per capita income grew by 15.6 per cent to Rs 53,331 per annum in 2010-11, crossing the half-a-lakh rupees mark for the first time, according to government data.
"The per capita income at current prices is estimated at Rs 53,331 in 2010-11, as against Rs 46,117 for the previous year, depicting a growth of 15.6 per cent," said the Quick Estimates of National Income released by the Central Statistical Office (CSO).

The growth in per capita income comes on the back of 8.4 per cent expansion of the Indian economy during the last fiscal.

Per capita income is the earnings of each Indian if the national income is evenly divided among the country's population of around 120 crore. It is an important indicator of overall prosperity in the country.

However, the increase in per capita income at constant (2004-05) prices, after discounting for inflation, was about 6.4 per cent in 2010-11. It was Rs 35,993 in 2010-11, as against Rs 33,843 in the previous year.

According to the figures, the size of the economy at current prices rose to Rs 71,57,412 crore last fiscal, up 17.5 per cent from Rs 60,91,485 crore in 2009-10.

Based on 2004-05 prices, the Indian economy expanded by 8.4 per cent during the fiscal ended March, 2011.

The GDP at constant (2004-05) prices in 2010-11 has been estimated at Rs 48,85,954 crore, as against Rs 45,07,637 crore in 2009-10, as per the Quick Estimates.

The rate of growth in the 2009-10 fiscal stood at 8.4 per cent, as per provisional estimates which were also released today.

As per the Quick Estimates, private final consumption expenditure (PFCE) in the domestic market at current prices was estimated at Rs 43,59,792 crore in 2010-11, as against Rs 37,22,036 crore in 2009-10.

At constant (2004-05) prices, the PFCE stood at Rs 30,87,047 crore in 2010-11, as against Rs 28,52,301 crore in the previous fiscal.

"In terms of GDP at market prices, the rates of PFCE at current and constant (2004-05) prices during 2010-11 are estimated at 56.8 per cent and 58.9 per cent, respectively, as against the corresponding rates of 57.6 per cent and 59.7 per cent, respectively, in 2009-10," the data said.

The per capita PFCE in the domestic market in 2010-11 stood at Rs 36,760 at current prices and Rs 26,029 at constant (2004-05) prices, as against Rs 31,812 and Rs 24,379, respectively, in 2009-10.

Gross Domestic Saving (GDS) stood at Rs 24,81,931 crore in 2010-11, as against Rs 21,82,970 crore in 2009-10, constituting 32.3 per cent of the GDP at market prices, as against 33.8 per cent in the previous year.

"The decrease in the rate of GDS has mainly been due to the decrease in the rates of financial savings of the household sector from 12.9 per cent to 10 per cent and the private corporate sector from 8.2 per cent in 2009-10 to 7.9 per cent in 2010-11," the estimates said.

Gross Domestic Capital Formation, however, increased from Rs 23,63,670 crore in 2009-10 to Rs 26,92,031 crore in 2010-11.

At constant (2004-05) prices, it increased to 19,74,172 crore last fiscal from Rs 18,38,870 in 2009-10.

"The rate of gross capital formation at current prices is 35.1 per cent in 2010-11 as against 36.6 per cent in 2009-10. The rate of gross capital formation at constant (2004-05) prices is 37.7 per cent in 2010-11 as against 38.5 per cent in 2009-10," the Quick Estimates said.

It further said that the change in stocks of inventories, measured as additions to stocks increased at current prices, stood at Rs 2,54,970 crore in 2010-11 as against Rs 1,74,310 crore in the year-ago period.
India's per capita income crosses Rs 50K

 

[Yeti]

India's factory PMI jumps to 8-month high in Jan - The Economic Times


BANGALORE: India's manufacturing sector grew at its fastest pace in eight months in January as factory output surged the most on record on increased domestic and foreign demand, a business survey showed on Wednesday.

 

[lepziboy]

December exports up 6.7% to $25 billion

New Delhi: India's December exports rose an annual 6.7 percent to USD 25 billion, while imports for the month rose 19.8 percent to USD 37.8 billion, leaving a trade deficit of USD 12.7 billion, the government said on Wednesday.

Exports between April-December rose 25.8 percent to USD 217.6 billion. Oil imports for the month rose 11.2 percent to USD 10.3 billion. Figures are rounded off.

Indian exporters enjoyed record growth last fiscal year, but have struggled in recent months in the face of economic turbulence in the European Union, which is India's biggest trade partner.

---------- Post added at 10:30 PM ---------- Previous post was at 10:30 PM ----------

http://zeenews.**********/business/economy/december-exports-up-6-7-to-25-billion_38088.html

 

[Shaurya]

December exports up 6.7% to $25 billion

New Delhi: India's December exports rose an annual 6.7 percent to USD 25 billion, while imports for the month rose 19.8 percent to USD 37.8 billion, leaving a trade deficit of USD 12.7 billion, the government said on Wednesday.

Exports between April-December rose 25.8 percent to USD 217.6 billion. Oil imports for the month rose 11.2 percent to USD 10.3 billion. Figures are rounded off.

Indian exporters enjoyed record growth last fiscal year, but have struggled in recent months in the face of economic turbulence in the European Union, which is India's biggest trade partner.

---------- Post added at 10:30 PM ---------- Previous post was at 10:30 PM ----------

http://zeenews.**********/business/economy/december-exports-up-6-7-to-25-billion_38088.html

ah, still not meeting the requirement, trade deficit is still too high... but anyways, its reasonable...

 

[Shardul.....the lion]

India's factory PMI jumps to 8-month high in Jan - The Economic Times

ANGALORE: India's manufacturing sector grew at its fastest pace in eight months in January as factory output surged the most on record on increased domestic and foreign demand, a business survey showed on Wednesday.

The HSBC manufacturing purchasing managers' index (PMI) , compiled by Markit, jumped to 57.5 from 54.2 in December.

"Activity in the manufacturing sector rebounded again in January led by higher demand from both domestic and foreign clients, suggesting some recovery in sentiment in recent months," said Leif Eskesen, economist at HSBC.

India's headline PMI has held above the 50 level that separates growth from contraction for almost three years, underlining the sector's resilience in the face of a global downturn and euro area debt crisis.

India's factory output sub-index jumped to 62.9 in January from 55.8 in December, the biggest rise from one month to the next on record. Both the output and the new orders indexes rose to their highest level since May last year.

The figures suggest a startling pick up in a sector that has been battered by feeble growth in the United States and Europe and a prolonged spell of monetary policy tightening in India.

Industrial output expanded 5.9 percent in November from a year earlier, official data showed last month showed, beating all forecasts and swinging from a contraction of 4.7 percent in October.

Analysts have cut their forecasts for the economy and expect it to grow in the year to March at its slowest pace in two years. The economy grew 6.9 percent in the quarter ended September 2011.

After 13 rate rises to stamp out inflation in between March 2010 and October 2011, the central bank signalled last month it was shifting its focus to growth by cutting the cash reserve requirements for banks by 50 basis points.

The PMI suggests more strength lies ahead because new orders showed demand from both domestic and export clients. However, price pressures remain as input costs grew at a faster pace than in December.

"These numbers suggest it's premature for the RBI to cut policy rates and that they have to await evidence of a significant and sustained decline in inflation and/or further materialization of downside risks to growth before they can roll out rate cuts," Eskesen said.

Wholesale inflation, the main measure of price pressures in India, slowed to a two-year low of 7.47 percent in December as rising food costs slowed sharply. However, manufacturing inflation was still strong, leaving the central bank little room for more aggressive policy measures to help growth.

 

[lepziboy]

Rupee hits highest level in nearly 3 months
Updated on Wednesday, February 01, 2012, 17:04

Mumbai: The rupee touched its highest level against the dollar in nearly three months on Wednesday, supported by strong dollar inflows and a recovery in the local stock market.

At closing hour of trade, the rupee was at 49.27/28 to the dollar after touching 49.26, a level not seen since November 8. It closed at 49.44/45 on Tuesday.
http://zeenews.**********/business/finance/rupee-hits-highest-level-in-nearly-3-months_38119.html

 

[Shaurya]

Not related to Economic sector but stilll..

It seems Noida is planning to separate residential and commercial areas, looks like something's cooking up and the city planners are now deciding to separate the residential areas from industrial areas.. Nice development eh??

Noida seals offices and banks in residential areas

The Noida Authority on Wednesday began implementing the Supreme Court directive against commercial establishments being run from residential areas, sealing 11 premises, including eight banks.

The establishments were sealed in Sector 19 area.

"The sealed establishments were the ones that were served final notices by us to relocate or shut down, but they were still operating. All establishments of commercial nature being run in residential sectors or even in industrial areas, as well as those flouting other land-use norms, would be targeted," the authority's chief executive officer S.K. Dwivedi said.

The sealed bank branches include Vijaya Bank, State Bank of India NRI Branch, Indian Bank, Punjab & Sind Bank, Bank of Maharashtra and Andhra Bank.

On Thursday, the authority plans to seal illegal nursing homes, departmental stores and other shops.

Sources in the authority said the drive would continue for around a month.

The Supreme Court Dec 5, 2011 had directed the Noida Authority to get the residential areas of the city rid of all commercial establishments, and help them relocate to designated areas.

Noida seals offices and banks in residential areas - The Economic Times

 

[Shaurya]

I am very happy on this decision

Sourcing clause on retail FDI well thought out: Sharma

The government today virtually ruled out revisiting the condition on sourcing in 100% FDI in single-brand retail, stating that the decision on 30% mandatory procurement from the domestic small enterprises is well thought out.

"I think, it is a well-considered policy and surely sourcing from within the country and small and medium units is something which is very healthy. It would only be the experience which will tell how rewarding it will be for the investors and the small enterprises," Commerce and Industry Minister Anand Sharma said.

He was talking to reporters on sidelines of a TERI function here.
Sharma made these comments a day after he met CEO of Swedish furniture IKEA Mikael Ohlsson in Paris.

According to a Commerce Ministry statement, Ohlsson had shared his views on the local sourcing clause in the FDI policy with regard to single-brand retail.

IKEA has already stated that the sourcing clause might be difficult to implement.

Earlier, in January, the government had notified opening of 100% FDI in single-brand retail, with a clause that in case foreign ownership increases beyond 51%, 30% local sourcing from the small units would be mandatory.

Apprehensions have been expressed on the rule since in several areas, the domestic small vendors may not have the required skill and and capabilities to be suppliers of global scale in terms of capacity and quality.

A unit is considered small if its investment in plant and machinery is not beyond Rs five crore.

The government has been forced to put on hold its Decision of November 24 to open FDI in multi-brand retail, following political opposition and Trinamool Congress, a key ally of the ruling UPA.

Sourcing clause on retail FDI well thought out: Sharma

 

[Shaurya]

An IIT in New York?

New York: The Indian Institute of Technology, Mumbai and Noida-based Amity University are among 15 institutions worldwide that have submitted bids to the city of New York to set up a science and engineering campus here under a plan by Mayor Michael Bloomberg to drive local economic growth and create jobs.

The city received seven proposals from a total of 17 institutions. Name of the institute selected to set up the engineering and applied sciences campus would be announced in January after an extensive selection process that will choose a project which generates the greatest benefit to the city and its taxpayers, Bloomberg said in a news conference here.

New York opens doors to Universities worldwide, all for jobs. Reuters
The winner of the ‘Applied Sciences NYC’ initiative will get incentives like free city land and as much as $100 million in capital for the project.

IIT Mumbai is part of a consortium that includes New York University, University of Toronto, UK’s university of Warwick, City University of New York and Carnegie Mellon. The consortium is proposing to set up a centre for urban science and research in downtown Brooklyn for more than 500 graduate students.

Amity University has submitted a proposal to set up a campus in Governor’s Island near here. The other institutes that responded to the Applied Sciences ‘Request for Proposals’ include Steiner Studios, Columbia University, Cornell University, Technion-Israel Institute of Technology, New York Genome Center, Mount Sinai School of Medicine, Rockefeller University, SUNY Stony Brook and Stanford University.

“Universities are always a major magnet for talent and the world’s most dynamic companies always gravitate to places where they can find the best and the brightest,” Bloomberg said.

“Along with everything we are doing to diversify and strengthen our economy, a new applied sciences campus has the potential to be a real economic game changer that will create jobs immediately, and for generations,” he added.

Bloomberg had in July this year invited proposals from universities, institutions and consortiums to develop and operate a “new or expanded state-of-the-art” campus in the city dedicated to engineering and the applied sciences.

The proposals submitted contain plans for new facilities ranging from 400,000 square feet to over two million square feet.

The institutions propose private investments of more than $ 800 million in the first phases of their projects and this could be increased to $ 2.5 billion over the long-term.

 

[lepziboy]

SC cancels all 2G licences issued by Raja
Updated on Thursday, February 02, 2012, 11:44

New Delhi: In a historic verdict, the Supreme Court on Friday cancelled all 122 2G telecom licences granted during the tenure of former telecom minister A Raja in 2008.

An apex court bench comprising of Justices G S Singhvi and A K Ganguly held that 122 licences for 2G spectrum were granted in ‘arbitrary and unconstitutional manner’.

Companies which stand to lose their licences include Videocon, Swan, Idea, Tata and Loop.

However, affected companies have been given four months to enter into talks with government and renegotiate spectrum cost based on current market rates.

The court directed TRAI to make fresh recommendation on grant of 2G licences, while making it clear that the allocation of spectrum will be done through auction.

And proceeds from the sale will go to the public exchequer so as to recover the loss that occurred due to faulty sale of spectrum.

The bench had earlier issued notices to 11 private telecom companies, which were granted licences despite allegedly being ineligible to secure them or had failed to launch services within stipulated time-frame.

The private telecom companies which were issued notices included Etisalat, Uninor, Loop Telecom, Videocon, S-Tel, Allianz Infra, Idea Cellular, Tata Teleservices, Sistema Shyam Teleservices, Dishnet Wireless, Vodafone-Essar along with TRAI.

No SIT but CVC to keep tab of CBI probe

The court while dismissing the plea for constitution of a Special Investigation Team (SIT), directed the CBI, which is probing the 2G case, to give status report on its investigation to the Central Vigilance Commission (CVC).

The CVC would in turn keep appraising the apex court of the progress in investigations.

Trial court to decide on Chidambaram

SC while refusing to direct the CBI to probe the alleged role of P Chidambaram in the 2G case said that the trial court will decide on probe against the Home Minister. The court of Judge OP Saini is scheduled to reconvene on Feb 4.