India Economic News Consulate General of IndiaNovember 2015 Munich

Make in India week: February 13 - 18, 2016:

Govt. of India has announced its decision to organize a landmark event called the “Make in India Week “ in Mumbai from Feb 13- Feb 18,2016 to provide greater momentum and thrust to the ‘Make in India’ initiative of Government of India. Hon’ble Prime Minister of India would inaugurate the event on 13th

February, 2016. The Make in India week would showcase the people, policies and partnership that are driving India’s new manufacturing revolution. The theme of the weeklong event would be innovation, design, advanced manufacturing and sustainability.

Govt. of India unleashed big bang FDI reforms, eased rule for 15 sectors:

The Govt. of India had announced major policy changes aimed at easing rules for foreign direct investment across 15 sectors including agriculture and plantations, construction, single-brand and wholesale retail, private banks, aviation and broadcasting. Rules had also been eased for mining and mineral separation of titanium, defence and limited liability partnerships. Also the need to seek FDI approval from cabinet has been reduced with FIPB authorised to clear proposals up to Rs 5000 crore (approx.. Euro 696 million) now, compared to Rs 3000 (approx. Euro 418 million) crore earlier.

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$32.87 bn FDI received by India in October-September:

India received $32.87 billion foreign direct investment (FDI) during October 2014 to September 2015 in sector like computer software and hardware, services sector, trading, automobile, construction activities, chemicals, power, pharmaceuticals, industrial machinery and food processing. As per official data, while Retail Trading attracted $70.75 million investment, the Defence and Railway related components received only $0.08 million and $23.2 million FDI during the same period.

India's GDP grows at 7.4% in Q2 of FY16; manufacturing grows at robust 9.3%:

India's GDP rose 7.4 % in the second quarter of 2015-16, in line with expectations but faster than the 7% growth recorded in the preceding three-months. China's GDP rose 6.9% in the same quarter. The high growth was driven by a robust 9.3% rise in gross value added (GVA) in the manufacturing sector.

India world's 7th most valued 'nation brand'; US on top:

India has moved up one position to become the world's seventh most valued 'nation brand', with an increase of 32 per cent in its brand value to $2.1 billion.The US remains on the top with a valuation of $19.7 billion, followed by China and Germany at the second and the third positions respectively, as per the annual report on world's most valuable nation brands compiled by Brand Finance. The UK is ranked 4th, Japan is at fifth position and France is sixth on the list.

India to displace UK and be third largest aviation market by 2026: IATA:

According to the International Air Transport Association (IATA), India is among the five fastest-increasing markets with 275 million new passengers. IATA estimates the five fastest-increasing markets in terms of additional passengers per year over the forecast period will be China, the US, India (275 million new passengers

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for a total of 378 million), Indonesia and Brazil. As per data, China and India are growing fast with annual growth this year-to-date of 12.5% and 16.5% respectively.

Volkswagen to roll out India-specific compact sedan next year:

German car major Volkswagen AG has announced its decision to roll out an India-specific compact sedan next year from its Pune plant and has invested Rs 720 crore (approx. Euro 100 million ) in the development of the new model. With the investment in the new compact sedan Volkswagen will add a new model to its product portfolio. This is a part of the Rs 1,500 crore (approx Euro 210 million) investment that was announced by Volkswagen India at the beginning of 2014. Volkswagen currently produce Volkswagen Polo, Volkswagen Vento and Skoda Rapid at its manufacturing facility at Pune.

IMF supports India’s current economic reforms:

According to IMF Spokesman, The International Monetary Fund (IMF) broadly supports the direction of India’s economic reforms undertaken by the government led by Prime Minister Narendra Modi. In its report on global prospects and policy - “IMF Developments, Outlooks, Risks”, the IMF has said that in a global “environment of increased uncertainty”, India’s growth will benefit from recent policy reforms, a consequent pickup in investment, and lower commodity prices. The IMF had forecasted last month that overtaking China, India is expected to grow at 7.3 percent in 2015, rising to 7.5 percent in 2016.

Foreign defence cos can own49% in local JVs sans govt nod:

The Government of India has decided to allow foreign portfolio investors (FPIs) to increase stakes in local Defence units to 49% from the current 24% through the automatic route, a move that will open up further funding

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for the sector. The government has also decided to allow foreign defence players to own up to 49% in Indian joint ventures through the automatic route, meaning no prior government approval will be required. However, any foreign direct investment (FDI) above 49% will require government nod. The government is also doing away with sub-limits within the overall sectoral cap.

GST will be implemented from next fiscal: Venkaiah Naidu:

Union minister for Parliamentary Affairs Mr. Venkaiah Naidu has expressed hope that the Goods and Service Tax (GST) Bill will be rolled out in the next financial year. He termed the GST as the biggest tax reform since independence as it subsumes all indirect taxes to create one rate and integrates country into one market.

German engineering services firm to expand India operations:

As per reports, leading German automotive

engineering services firm, RLE International is expanding its India operations in the next five years to capitalise on growing business opportunities and by leveraging its global capabilities at a lower cost in India. RLE International, a three-decade-old, Euro 100 million Cologne-based privately-owned company had set up two design and software development centres in Bengaluru and Chennai in 2005, with a revenue of euro 5 million (Rs.35 crore) for calendar year 2014. The company is expected to increase its headcount by four-fold to 1,000 from the existing 250 engineers by 2020.

Taiwanese contract manufacturing major Wistron to Make in India:

After the entry of top contract manufacturer Foxconn, it's the turn of the $20 billion Taiwanese maker Wistron Corp to tap into the country as India remains on the radar of global electronics manufacturers. Wistron, which makes devices for companies such as Blackberry, HTC and Motorola, has

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partnered home-grown telecom retailer and manufacturer, Optiemus formaking mobile devices and are targeting investments of $200 million. India, which has doled out sops for companies making in the country while hiking import duty, hopes to counter China's dominance in manufacturing through such investments.

France to give €2 billion for smart cities:

France has become the first country to make a financial commitment towards Govt. of India’s ambitious ‘Smart City’ project. According to Ambassador of France in India, around €2 billion will be provided to convert Chandigarh, Nagpur and Puducherry into smart cities. Also, the proposed investment would primarily come from French companies, which perhaps already have significant exposure in India, with the government backing them. the US had earlier said it would partner Ajmer, Allahabad and Vishakapatnam, while Singapore took up Amaravati, the new capital of Andhra Pradesh, and Japan chose

Varanasi for the smart city project.

India to overtake China as Asia’s biggest producer of workers:

Asia’s work force is set to shrink over coming decades with India overtaking economic rival China as the region’s biggest source of workers. By 2050, the Asia Pacific region will have nearly 50 per cent of the world’s total work force, down from 62 per cent today, according to Bloomberg analysis of United Nations data. The shifting patterns will see India account for 18.8 per cent of the global work force compared with 17.8 per cent today, toppling China from the top spot. India’s super sized labour force is often referred to as its demographic dividend, a key asset on its way to achieving economic superpower status.

Housing for all may boost economy by 3.5% by 2022: India Ratings:

According to India Ratings, Prime Minister Modi's ambitious project 'Housing For All' has the potential to push up the country's

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economy by 3.5 per cent by 2022 with sectors supplying crucial inputs to the construction industry being the biggest beneficiaries. According to the report, sectors like cement, iron and steel are expected to be the biggest beneficiaries of the Housing for All (HFA) programme. The agency estimates the cost of constructing 20 million houses during FY16-FY22 will be around Rs 2,14,286 crore (approx. Euro 30000 million) per annum.

India's exports to outpace China by 2025: HSBC:

According to a forecast by global banking major- HSBC, India's export segment is projected to outpace China in the period between 2025 and 2050. As per new forecasts in HSBC's report 'Trade Winds' -- the merchandise exports from India are expected to grow by an average of six percent a year in the period between 2025 and 2050. Currently, the slowdown in global demand scenario and a dip in prices of petroleum products has dented India's exports as India is a major exporter of refinery products.

The country's goods shipments were down for the eleventh straight month in October with merchandise exports declining by 17.53 percent to $21.35 billion from $25.89 billion worth of goods sold abroad during the corresponding month of last year.

Make in India push: Government announces indirect tax sops for shipbuilding:

The government has announced indirect tax sops for shipbuilding industry, providing a push the sector that holds big 'Make in India' potential. The Finance Ministry has exempt all raw material parts used in the manufacture of ships/vessels/tugs and pusher crafts etc. from customs, and central excise duties, a measure that is expected to provide a greater push to domestic manufacture. India's shipbuilding industry has been under stress for many years.

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iQor to invest $200 million in India, to create 20,000 jobs:

US-based aftermarket services provider iQor has announced plans to invest $200 million in building end-to-end aftermarket services across India. The company will open two new repair depot hubs in Chennai and Hyderabad along with new service centres. The company caters to the after-sales service needs of manufacturers of

smartphones, tablets, desktop computers, notebooks, digital players and consumer products

***DISCLAIMER

This newsletter is a compilation of news articlesfrom various business e-newspapers and in no

way is an endorsement or reflection ofviews of Consulate General of India, Munich.

For queries contact:

Mr. Asheesh Gupta, Consul (E & C), Consulate General of India, Widenmayer Strasse 15, 80538 Munich, Germany. Email: cpic@cgimunich.com , Web: www.cgimunich.com