WEEKLY ECONOMIC BULLETIN - indiainbusiness.nic.inindiainbusiness.nic.in/newdesign/upload/Publications/Weekly/Nov... · Jayant Sinha said the priority of the government will be job

NEWS FEATUREReform should be people-driven, simplify processes: Modi at G20Prime Minister Narendra Modi in his address to the G20 nations in Brisbane on November 15 spoke of theneed for reform - to make it people-driven and that it should lead to simplification of processes.

Queensland can be vital partner in India’s development: says ModiPrime Minister Narendra Modi met business leaders over breakfast in Brisbane and said that the Australianstate of Queensland can be a vital partner in India’s development.

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Sushma Swaraj woos UAE investors External Affairs Minister Sushma Swaraj sought investment from foreign and Indian entrepreneurs in theUnited Arab Emirates (UAE), highlighting government’s “clear policies to facilitate business environment,transparency and speed” to “make India an investment and manufacturing destination”.

Toshiba to invest $30 mn in power T&D business in IndiaToshiba Corporation has announced that it will invest about $30 million in a power transmission and dis-tribution business in India.


OVERSEAS INVESTMENTS

ITP Division Ministry of

External Affairs Government of India

Issue no 597 INovember 11-November 17, 2014

p. 02/06

TRADE NEWSIndia-US agreement on food stockpiling welcomedWorld Trade Organization (WTO) head Roberto Azevedo has welcomed the India-US deal on food stockpilingwhich clears the way for implementing the international trade agreements reached last year at the meeting ofWTO ministers in Bali.


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SECTORAL NEWS1-bn-tonne coal output target by 2019 ‘doable’: Piyush GoyalAiming to make India self-sufficient in coal, Power and Coal Minister Piyush Goyal today said the target of doubling domestic production from the current 490 million tonnes level was “possible”.


NEWS ROUND-UPIndia will cross 6% growth in 2015-16: Jayant SinhaExpressing confidence that India will cross 6% GDP growth in 2015-16, the new Minister of State for FinanceJayant Sinha said the priority of the government will be job creation and inflation management.


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>> NEWS FEATURE

Reform should be people-driven, simplifyprocesses: Modi at G20Prime Minister Narendra Modi in his address to the G20 nations in Brisbane on November 15 spoke of the need for reform- to make it people-driven and that it should lead to simplification of processes.

Speaking at a retreat and lunch be-fore the G20 summit, Modi said reformshould be technology driven and shouldhave scale and address the rootcauses, according to tweets posted byministry of external affairs spokesper-son Syed Akbaruddin.

“Reforms should lead to simplifica-tion of processes...& processes of gov-ernance must be reformed - PM@narendramodi to G-20,” said a tweet.

He said: “Reform is a continuousmulti-stage process... must be institutionalized - Globally, reforms are handicapped with perception of being governmentprograms, a burden on the people, this needs to change.”

“Reforms should lead to simplification of processes... and processes of governance must be reformed,” he said.“Reform is bound to face resistance... must be insulated from political pressures. Reform has to be driven by the peo-

ple....cannot be by stealth,” he added.Earlier, in his first engagement of the day, Modi said repatriation of black money kept abroad was a key priority and

called for “close coordination” on the issue during a meeting of BRICS leaders.The G20 membership comprises a mix of the world’s largest advanced and emerging economies, representing about

two-thirds of the world’s population, 85 percent of global gross domestic product and over 75 percent of global trade.The members of the G20 are Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy,

Japan, South Korea, Mexico, Russia, Saudi Arabia, South Africa, Turkey, Britain, the US and the European Union.Source: Indo-Asian News Service

WEEKLYECONOMIC BULLETIN 3


>> NEWS FEATURE

Prime Minister Narendra Modi met business leaders over breakfast in Brisbane and said that the Australian state ofQueensland can be a vital partner in India’s development.

Speaking at the breakfast meeting organised by Queensland Premier Campbell Newman, Modi said he has alwaysplaced great emphasis on relations between states and not just be-tween national capitals, according to a statement issued by the min-istry of external affairs. The prime minister noted the Queenslandgovernment’s role in fostering cooperation with India.

“You and your government are doing a lot to pursue economic oppor-tunities with India,” Modi told Premier Newman.

“(In) September, there was a Queensland-Gujarat Energy Round-table in Gandhinagar... I am naturally pleased that Queensland will beparticipating in the ‘Vibrant Gujarat’ summit in 2015 to showcase its in-frastructural capabilities,” Modi added.

He also noted that trade delegations from Queensland have beensent to other Indian cities like New Delhi and Kolkata as well.

“India is (Queensland’s) fourth largest export destination. For us,Queensland is emerging as a major investment destination,” Modi said at the meeting. He welcomed the state’s effortsto invest for A$16 billion in coal mining, which he said, would “set a new standard for India-Australia cooperation”.

“(It will) demonstrate how Australia and (the state of ) Queensland can be a vital partner in meeting India’s require-ment for energy and other vital resources,” Modi said.

The prime minister said that there were immense possibilities for cooperation between India and Queensland, not justin the area of coal, which is already a major item of exports to India, but also in resources in general, as the Indian indus-trial sector gathered momentum and grows. “We could also commence the import of liquified natural gas from Queens-land,” Modi said at the meeting. The prime minister noted that Queensland is the leader in the areas of mining andmining technologies, services and equipment, mining consultancy, mine safety, coal washeries and mine management.

“Queensland’s economy has been performing well, on basis of (its) traditional strengths... like tourism, resources andagriculture, (and) also through... investments in areas of advanced technologies and services,” Modi said.

The prime minister noted that Queensland could be a partner in strengthening India’s food security, agriculture, edu-cation and advanced technology requirements.

“Indian investors would be willing to partner with (Queensland), as more and more Indians are drawn to the incrediblebeauty and hospitality of (this) state,” Modi said.

The prime minister spoke about launching the “Make in India” initiative to promote manufacturing in the country.He encouraged businesses in Queensland to participate in India’s ambitious plan for smart, sustainable and habitable

cities to cater to its growing urban population. “It is expected that nearly 11 percent of the world’s urban population in 2025 will live in India,” Modi told the business

leaders at the meeting.“You can make India a manufacturing hub... and import back (to) Australia,” he said.“We have launched a major set of reforms to boost economic growth and improve the quality of life of (the) people,”

Modi added.“You will begin to find a difference in India,” Modi told the business leaders and assured that there would no longer be

uncertain and unpredictable pathways and hurdles for doing business in India.Source: Indo-Asian News Service

Queensland can be vital partner in India’sdevelopment: says Modi

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WEEKLYECONOMIC BULLETIN >> NEWS FEATURE


Prime Minister Narendra Modi on November 12 met a host of Southeast Asian leaders as he made a major push to in-crease economic engagement between India and the 10-member ASEAN and said his government places equal empha-

sis on ease of doing business in India as well as on makingpolicies attractive.

Modi met his Thai and Malaysian counterparts, PrayutChan-o-cha and Najib Tun Razak, as well as Sultan of BruneiHassanal Bolkiah and Singapore Prime Minister Lee HsienLoong.

In his separate meetings with the four ASEAN leaders,Modi spoke about the ‘Make in India’ campaign launched toattract business to India and discussed possibilities of eco-nomic cooperation with them. He also met Myanmar opposi-tion leader Aung San Suu Kyi. In his maiden speech at theASEAN-India Summit in Nay Pyi Taw, Modi said there will bemajor improvement in India’s trade policy and environment

and his government would move ahead with connectivity projects with ASEAN “with speed”.Modi said his government was laying stress on infrastructure, manufacturing, trade, agriculture, skill development,

urban renewal and smart cities.“Make in India is a new mission. I invite you to this new environment in India. Indian companies are also keen to invest

in and trade with ASEAN,” he said.He suggested that a review be conducted of the India-ASEAN Free Trade Agreement on goods to improve it further

and make it beneficial to all. Modi appealed that the FTA on Services and Investment, which still awaits inking, “bebrought into force at the earliest”.

He said to deepen connectivity with ASEAN, a special purpose vehicle is proposed to be set up to facilitate financingand quick implementation of projects.

He invited the ASEAN block to “come and participate in building India’s 100 smart cities and renewal of 500 cities”.Modi also said both sides should move quickly towards mutual recognition of degrees, a major stumbling block in the

inking of the FTA on goods and services.Referring to the Regional Comprehensive Economic Partnership Agreement, which is being negotiated, Modi said it

can become a springboard for economic integration and prosperity in the region.He also referred to the issue of maritime trade and passage, a touchy subject especially in context of China’s growing

assertiveness over the South China Sea, and said that everyone has the responsibility to follow international law andnorms on maritime issues, as is done in the realm of air passage.

“In future, we will also need this in space,” he said.On the South China Sea, he said that for peace and stability, everyone should follow international norms and law and

hoped the Code of Conduct on South China Sea can be concluded soon on the basis of consensus. At a dinner gala in theevening, Modi and US President Barack Obama shook hands and Obama called him a “man of action”.

Modi held a bilateral meeting with Myanmarese President Thein Sein on November 11 after his arrival.The ASEAN members are Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Singapore, Thailand, Philippines

and Vietnam.Source: Indo-Asian News Service

Modi pushes for increased economic engagement with ASEAN

WEEKLYECONOMIC BULLETIN >> NEWS FEATURE5


South Carolina Governor Nikki Haley on November 14 sought building of business ties between her state and Indiancompanies.

“India is my second home. Attracting investments from overseas companies is my job, but building business ties withIndian companies is my personal desire. Hence, I request CII to facilitate this as much as possible,” Haley said.

She was addressing business leaders and entrepreneurs at an interaction on “Doing Business with South Carolina” or-ganised by Confederation of Indian Industry (CII) in Chandigarh.

Haley, who arrived on November 13, is leading an 18-member delegation from South Carolina. She said companiesfrom Punjab and Chandigarh could come and invest in South Carolina.

“Come, invest and set up a business in South Carolina and we at the government level will service you as an addedemployee as well. We will assign a specific project manager to you who will handhold you right from the beginning con-cerning all aspects like land, labour, financing, source of raw material, marketing, legal formalities, transportation facili-ties etc,” Haley said.

“I believe if businesses are doing well in a state, all else like education, jobs, economy, health will fall perfectly inplace and take care of them.

“Hence, the first thing I did after taking over was to do away with the regulations, bureaucracy and labour unions hurt-ing the business. I set up a committee on business promotion with all industry members on the board,” she said.

“Being pro-industry and focused on industry, now ours is the third best state in the US to do business in, with lowestcost of business and living,” she said.

She said the key sectors to invest in South Carolina included automobile, aerospace, IT, pharmaceuticals, rubber andtextiles.

“Boeing’s leading manufacturing plant is in our state and soon BMW’s South Carolina plant would also be their lead-ing plant. So is the case of various top tyre manufacturers of the world like Michelin, Bridgestone, Continental etc.

It is so easy to do business in South Carolina. 60 percent of the new investments in South Carolina are from the exist-ing businesses in the form of expansion,” she said.

Nikki Haley had met Punjab Deputy Chief Minister Sukhbir Singh Badal on November 13.During the meeting, Haley told Badal that South Carolina would support Punjab in establishing aero-space, pharma-

sector, tourism and agro-processing industries.Haley, whose father’s family used to live in Verka suburb of Amritsar till the early 60s before migrating to the United

States, arrived in Amritsar on November 14. Haley was re-elected governor of South Carolina recently.This is Haley’s first visit to her family’s home state in nearly four decades. Born in 1972, Nikki had last visited Amritsar

as a two-year-old. Her father Ajit Singh Randhawa used to live in Verka.Expressing her delight at coming back to Punjab, Haley said: “The last time I came was when I was two years old. I

am looking forward to the visit to the Darbar Sahib (Golden Temple).”Haley is on a 10-day trip to India where she is visiting New Delhi, Mumbai, Chandigarh and Amritsar to seek invest-

ment for her state.Relatives of Haley, who was Nimrata Randhawa before her marriage, had celebrated in Verka when she became South

Carolina governor for the first time in November 2010.She became the first Indian-American woman to become governor of a state in the US.

Source: Indo-Asian News Service

Nikki Haley seeks strong business tieswith India

6


Prime Minister Narendra Modi met his Thai counterpart Prayut Chan-o-cha in Nay Pyi Taw on November 12 and said thatthere were several possibilities of economic cooperation between the two countries.

Modi congratulated Prayut on becoming prime minster of Thailand and said “amsure our relations will become stronger”.

Prayut, who was Thailand’s army chief, took over as prime minister in August, thefirst serving army officer to assume the top office in over 20 years.

Prayut told Modi that “I fully agree and admire the concept of Make in India. It candrive the economy. Thailand can apply it for its economy too”, according to tweetsposted by the Prime Minister’s Office twitter handle @PMOIndia.

Both leaders also discussed tourism, especially their common Buddhist heritage.Modi invited the Thai leader to India and told him that India is looking forward to

welcoming him.He told him that External Affairs Minister Sushma Swaraj would be going to Thai-

land to attend a Sanskrit Conference.Modi also conveyed birthday greetings to Thai King Bhumibol Adulyadej, which

falls Dec 5. “Please convey my birthday greetings to His Majesty. Pray for his long life,” he told Prayut.Earlier, Modi met the Malaysian Prime Minister Najib Tun Razak and invited Malaysian companies to make in India.


Modi meets Thai PM, discusses economic cooperation, tourism


>> NEWS FEATURE

SAARC satellite services to cover Myanmar: ModiPrime Minister Narendra Modi announced on November 13 that the services of a SAARC satellite that he had proposedearlier this year will be extended to Myanmar as well.

“Now, I want to announce that this satellite and all its benefits will be given to Myanmar,” Modi said at a community re-ception hosted by the Indian diaspora at the end of his three-day visit to Myanmar.

“This will be beneficial, among others, in health, telemedicine, and long distance education,” he said.In June this year, after the successful launch of the PSLV C23 rocket, Modi had asked the Indian Space Research Or-

ganisation (ISRO) to develop a satellite that would serve all the SAARC nations. In the function, he also spoke of his government’s “Make in India” mission. “The whole world is now seeing India through

a changed eye. They are looking at ways to reach out to us,” Modi said at the community reception. “We have started the‘Make in India’ initiative and we want everyone to come and look at the opportunities that India has to offer,” Modi said.

Not just the Indian government, the Indian diaspora is also being is being looked with special eyes by the entire world,according to him. “This is something that has to be maintained and enhanced. You must work in the country of your adop-tion and also for yourselves,” he said.

Lauding the Indian diaspora, he said: “I would like to praise the discipline I have observed among you and I will remem-ber this.” He also hailed the Myanmar government for the way it hosted the Association of Southeast Asian Nations(Asean) Summit and the East Asia Summit for which he had come to this country. “Over three days, I met several leadersof the world. I congratulate the Myanmar government for the way it handled the entire event,” the prime minister said.

Earlier in the day, Modi had a series of meetings beginning with Russian Prime Minister Dmitry Medvedev, followed bythose with Philippines President Benigno Sime n Cojuangco Aquino III, Chinese Premier Li Keqiang and Indonesian Presi-dent Joko Widodo. He also had a brief interaction with Japanese Prime Minister Shinzo Abe.

The prime minister also addressed the 9th East Asia Summit.Source: Indo-Asian News Service

External Affairs Minister Sushma Swaraj sought investment from foreign and Indian entrepreneurs in the United ArabEmirates (UAE), highlighting government’s “clear policies to facilitate business environment, transparency and speed” to“make India an investment and manufacturing destination”.

“Our focus is growth with good governance and transparency with an eye on manufacturing, infrastructure and trade,”she said in an interaction with the business commu-nity .

Highlighting her government’s achievements, shesaid it was “firmly committed to bring back growth,have clear policies which will facilitate business en-vironment, transparency and speed, well thought outdecisions. The result is there before you in just fivemonths: GDP growth is showing early signs of recov-ery”.

The minister said making India an investment andmanufacturing destination was Prime MinisterNarendra Modi’s utmost priority.

She said the “Make in India” campaign, launchedby Modi on September 25, represented an attitudinalshift in the way India relates to its investors.

“I feel that there is no better time than now for the UAE business community to join our hands as partners in India’sgrowth story. There are immense possibilities to enhance trade and investment cooperation.”

Seeking to allay fear of investors, the minister said: “I understand the apprehensions in the minds of some of you re-garding your past experiences of investments in India. But let me assure you that our government is committed to honourthe commitments made and opening up of sectors for foreign investment.”

“Bilateral Trade and Investment Protection Agreement between India and UAE have entered into force with effect from23 September 2014 and would facilitate safety of your investments,” Sushma Swaraj added.

She said that the UAE was among the countries with which India has a Double Taxation Avoidance Agreement “havingcertain preferential features conducive for increased investment in India”, as she promised that investments from UAEinto India would “not only be safe but would also provide good returns”.

“Indian investors are already one of the largest groups in the UAE. In turn, UAE can also become a substantial sourcefor meeting our investment requirements. Moreover, the UAE and, especially Dubai, can become our gateway to largerMENA region and, indeed, to Africa as a whole,” she added.


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WEEKLYECONOMIC BULLETIN >> OVERSEAS INVESTMENTS


Sushma Swaraj woos UAE investors

Toshiba Corporation has announced that it will invest about $30 million in a power transmission and distribution businessin India. The Japanese firm said the new investment will be for expanding the production capacity of Toshiba Transmis-sion & Distribution Systems (India) Pvt. Ltd. in Hyderabad.

“Toshiba Corporation will reinforce its transmission & distribution (T&D) business in India with a 3-billion yen (approx.$30 million) investment in new production capacity at Toshiba Transmission & Distribution Systems (India) Pvt. Ltd. (TTDI)in Hyderabad,” the company said in a statement .

This investment is part of the $100 million Toshiba plans to invest in T&D business in India by 2016.“India is a high growth market that Toshiba has positioned as a strategic base for its power-related businesses,” said

Katsutoshi Toda, chairman and managing director, TTDI.A new line for large power transformers will come on line in spring 2015, at the same time as the full scale launch of a

new line for switchgears. Alongside its existing production line of small- and medium-capacity transformers and low- andmedium-voltage switchgears, the new power transformer line will support production of 765kV transformers with a ca-pacity of 500MVA, while the new switchgear line will produce high voltage products.

“Toshiba is seeking to secure a 20 percent share of the Indian market by 2018, and also reinforce Toshiba Transmission& Distribution Systems (India) Pvt. Ltd. as a core T&D production base for other major markets, including Europe, ASEAN,and Africa,” added Toda.

India continues to record high economic growth, and long-term capital investment for infrastructure is expected in keyareas such as electricity and transportation. In T&D, the Indian government is promoting measures to increase the num-ber of 765kV substations, toward increasing the country’s transmission capacity five times by 2017. This policy is drivingdemand for large power transformers and high voltage switchgears.

Toshiba established Toshiba Transmission & Distribution Systems (India) Pvt. Ltd. in 2013 by acquiring T&D businessfrom Vijai Electricals Ltd for $200 million and also started operation of a new power transformer facility in Russia in Feb-ruary 2014.


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WEEKLYECONOMIC BULLETIN >> OVERSEAS INVESTMENTS


Toshiba to invest $30 mn in power T&Dbusiness in India

Cisco Systems Inc., the networking gear maker, will invest $1.7 billion in its Indian operations to expand its market and winmore contracts as the country goes on a digitization drive under a new administration, The Economic Times reported onNovember 17, citing a company executive.

The investment includes a $40 million innovation fund, the paper said, citing Dinesh Malkani, president of Cisco SystemsIndia Private Limited.

Cisco’s CEO John Chambers has said he is “betting big” on India as Prime Minister Narendra Modi’s government pro-motes a Digital India umbrella program, which consolidates ongoing and new government projects to improve govern-ment-to-citizen services on the back of greater access to the Internet.

India is looking to spend more than $5 billion on expanding its broadband networks to connect more villages over thenext three years, and anticipates a market of $15 billion locally over the next few years in the area of “Internet-of-Things,”which refers to the increasing proliferation of sensors that can send back signals on everything from the stress inside a carengine to the strain on a human heart.

Cisco is marketing its concept of “smart cities” in India and Modi has said he wants to see the rise of a 100 such cities.The company has also implemented many of these ideas at its Bangalore campus, its largest outside the U.S.

Source: International Business Times

Cisco to invest $1.7B in India to capturemore government contracts: Report

9

WEEKLYECONOMIC BULLETIN >> TRADE NEWS


World Trade Organization (WTO) head Roberto Azevedo has welcomed the India-US deal on food stockpiling which clearsthe way for implementing the international trade agreements reached last year at the meeting of WTO ministers in Bali.

“This breakthrough represents a significant step in efforts to get the Bali package and the multilateral trading systemback on track,” Azevedo said on November 13. “It will now be important to consult with all WTO members so that we cancollectively resolve the current impasse as quickly as possible.”

The International Chamber of Commerce (ICC) also hailed the India-US agreement calling it “an important milestone forthe global economy.”

“Today’s breakthrough is a real victory for all of us-business governments and consumers-and we look forward to see-ing rapid action to implement the deal on the ground,” ICC Secretary General John Danilovich said.

The Paris-based ICC had campaigned for a deal to end the stalemate over food security that had held up the implemen-tation of the Trade Facilitation Agreement (TFA). Danilovich met Indian Commerce Secretary Rajeev Kher in Delhi lastmonth.

Along with other elements of the Bali package of agreements, TFA “has a huge potential to boost growth and create upto 21 million new jobs, the majority of which would be in developing economies,” Danilovich said.

Noted the timing of the India-US agreement, he said, “Together with the deal at the Asian Pacific Economic Cooperation(APEC) summit to expand the WTO’s agreement on information technology, we can safely say this was the week whenmultilateralism was put back at the centre of trade policy-making.”


India-US agreement on food stockpilingwelcomed

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In what could give a major boost to India’s growing economic influence across Asia and Africa, the Exim Bank of India aimsto increase Indian project exports to $50 billion within the next five years from the current levels of $27 billion.

This will be done through the bank’s innovative initiatives and by leveraging the increasing opportunities in Africa andAsia, Yaduvendra Mathur, the bank’s chairman and managing director, said.

He said, as of the end of September this year, there were 374 project export contracts valued at $26.85 billion sup-ported by the bank under execution in 78 countries across Africa, Asia and the Commonwealth of Independent States(CIS) by 112 Indian companies.

“These projects have been supported by EximBank through a mix of funded and non-funded facil-ities,” Mathur said in Accra.

He said, Exim Bank, in collaboration with theAfrican Development Bank, was also setting up aProject Development Company (PDC) in Africa toidentify and develop infrastructure projects withthe objective of providing the Indian private sectoran opportunity to invest in and implement suchprojects in Africa.

The PDC is expected to provide specialist projectdevelopment expertise to take the infrastructureproject from concept to commissioning. It shallfocus on infrastructure projects that have specific strategic interest for India. It is expected to provide an entire gamut ofproject development expertise to identified projects.

Mathur said government of India’s support would be critical to achieve this target for India. “Exim Bank proposes to organise a series of stakeholders’ seminars to seek industry feedback for creating a level play-

ing field for Indian project exporters,” he added.Meanwhile, the Indian government has extended two additional Lines of Credit (LoCs) to the the Gambian government

valued at $22.50 million for financing an electrification expansion project for greater Banjul area and $22.50 million for fi-nancing replacement of asbestos water pipes with UPVC pipes there.

The LoC agreements to this effect were signed Oct 29, 2014, by Debasish Mallick, deputy managing director, on behalfof Exim Bank and by Minister of Finance and Economic Affairs, Kebba S. Touray, on behalf of the government of The Gam-bia.

With the signing of these two LoC agreements totalling $45 million, Exim Bank, till date, has extended five LoCs to TheGambia, on the direction of the Indian government, taking the total value of LoCs extended to $78.58 million.

The first LoC of $6.7 million was extended to The Gambia in November 2005 for financing the supply of 500 tractorswith spares and assembly. The second LoC of $10 million was extended August 2008 for construction of the National As-sembly Building Complex in Gambia and the third LoC of $16.88 million was extended in October 2012 for completion ofthe same complex.

The Gambia is a country located in West Africa, and is surrounded by Senegal and a short coastline on the AtlanticOcean in the west. It is situated around the Gambia river which flows through the country’s centre and empties into the At-lantic Ocean. The main items that India exports to Gambia are cotton, cereals, man-made fibres and electrical machineryand equipment.

Exim Bank to boost Indian project exportsto $50 bn

Services exports rose 5.3 per cent to $ 12.94 billion in September this year compared to the same month last year.However, import of services during the month fell by 9.1 per cent to $ 6.17 billion against the year-ago period, accord-

ing to the RBI data.In August 2014, services exports were nearly flat at $ 12.24 billion. The import of services was up 7.5 per cent at $

6.77 billion in August over the year-ago month.The cumulative receipts of exports in services during April-September stood at $ 79.05 billion, while cumulative pay-

ments (or imports) were at $ 43.04 billion.Services export in 2013-14 stood at 167.01 billion, while imports were at $ 88.19 billion.The services sector contributes about 60 per cent to country’s gross domestic product.

Source: Press Trust of India

Services export up 5.3% at $ 12.94 b in September

11



Under the LOC, Exim Bank will reimburse 100 percent of contract value to the Indian exporters, upfront upon shipmentof goods. The LoCs will be used for sourcing of goods and services from India.

With the signing of these agreements, Exim Bank has now in place 188 LoCs, covering 63 countries in Africa, Asia, LatinAmerica, Europe and the CIS, with credit commitments of over $10.51 billion, available for financing exports from India.

Exim Bank’s LoCs afford a risk-free, non-recourse export financing option to Indian exporters. Besides promoting India’sexports, Exim Bank’s LoCs enable demonstration of Indian expertise and project execution capabilities in emerging mar-kets.


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WEEKLYECONOMIC BULLETIN >> SECTORAL NEWS


Aiming to make India self-sufficient in coal, Power and Coal Minister Piyush Goyal today said the target of doubling do-mestic production from the current 490 million tonnes level was “possible”.

He even went a step further and said the country should make efforts to become an exporter of coal by drawing up aclear roadmap for the same.

“We have plans to ramp up coal production to a billion tonnes from its current level of 490 million tonnes. It is clearlydoable, it is not a fanciful target, they have 200mines which have not yet opened up, technologi-cal innovations can make it possible,” Goyal said.

Out of the total domestic coal production of565 million tonnes, Coal India produces 490 mil-lion tonnes. This is targeted to be doubled to onebillion tonnes annually by 2019. The state-runfirm will invest Rs 5,000 crore to buy 250 rakesfor transporting coal.

The Minister said India should not remain animporter of thermal coal for power plants but onthe contrary should be in a position to supply tothe world and increase its own power generationcapacity significantly.

Goyal said this after meeting global investors where he assured them that the government will address their con-cerns.

“The investors have had serious concerns in the last 4-5 years like stalled projects, rupee depreciation and uncertainbusiness environment,” he said.

However, with the new government in place this has started to change. They are looking at India afresh and going for-ward the investments in the power sector are going to be quite large and investors both from within India and abroad cansee good, robust policy which we are reassuring to all the investors, he added.


1-bn-tonne coal output target by 2019‘doable’: Piyush Goyal

13

Indian IT sector has seen robust head count addition in the recently concluded September quarter, making it the best inthree years.

A scan of recent quarterly reports, show top five IT firms have hired 35, 200 employees on a net basis in the July-Sep-tember quarter, up from 14,300 employees in the same quarter last year. The previous best was September 2011 quarter,when these firms added over 40,000 people.

The strong hiring trend comes amid reports that $118-billion domestic IT industry hiring will slow due to automation andchange in business models. According to report by research firm Crisil, incremental recruitment by the IT services industrywill halve to 55,000 in fiscal 2018 from 105,000 in fiscal 2014, despite a 13-15 per cent revenue growth forecast for thisperiod. It also pointed out reduction in employee costs from 69 per cent of total costs in fiscal 2013 to 64 per cent in thelast fiscal.

In the July-September quarter, Cognizant lead the pack accouting for a third of the hiring. The firm added 12,300 em-ployees, which is the best in its history. Tata Consultancy Services saw net head count addition of 8,326. Infosys (4,127 em-ployees), Wipro (6,845 employees) and HCL (3,831 employees) also saw healthy net additions.

“The skills that we need shift a little bit. So we want to make sure that we do not have any skills mismatch. So, we scari-fied a little bit of utilisation so that we have the right skills for the changing demand and position ourselves well so that wedo not have revenue leakage as we go into next year,” Cognizant President Gordon Coburn said in the recent earnings call.

According to foreign brokerage firm J.P. Morgan top six companies (including Tech Mahindra) collectively hired moreemployees 38,009 on a net basis, in the September 2014 quarter, than in any quarter over the past three years.

“For us it the most striking statistic of September 2014 quarter,” analysts Viju K. George and Amit Sharma wrote in a re-search note.

“This has partly to do with utilization peaking in the sector (except Tech Mahindra & Wipro). It also has to do with catch-up from fresher commitments made at the campuses some time ago. Nevertheless, adjusting for these two factors, we findemployee addition in the sector heartening. Lateral hiring is still over 50 per cent of total hiring on aggregate,” the reportsaid.

“Strong hiring numbers across the industry indicate confidence on pipeline and current assessment of growth opportuni-ties. We do recognize that part of the hiring would be to build bench and provide cushion against increasing attrition rates.Nonetheless, the magnitude of increase in hiring numbers is a significant positive,” according to Kotak Institutional Equities.

“Admittedly, employee growth is not a perfect indicator of demand strength but there cannot be fulfilment of strong de-mand (if it exists) without employee addition. Not everything can be automated to obviate employee hiring and where au-tomation is doable, there are limits to how much automation companies can single-mindedly pursue without sacrificingrevenue growth,” J.P. Morgan noted.

Source: The Hindu



IT firms see best hiring quarter in threeyears

In order help local people, US-based Amazon’s Indian arm is working on a business model to involve grocery stores in itsnetwork, Communications Minister Ravi Shankar Prasad said inNew Delhi on November 11.

“Amazon shared with me that they want to involve grocery storesin their business. They want to start delivery of products throughgrocery stores as it will help grocery stores have more footfall ofpotential customers,” he told reporters.

The minister also tweeted after meeting Amazon India MD AmitAgarwal and Amazon vice president, International Public PolicyMonique Meche, that: “Amazon team lead by VP India met and dis-cussed about taking benefits of eCommerce to rural areas andsmall towns.”

The Amazon officials also told the minister that they have plansto set up data centre in India.

“They said that they want to set up data centre in India which is again a welcome step,” Prasad said.Source: Indo-Asian News Service

India and Nepal are likely to sign an agreement for the construction of a 900 MW power project and another one for startinga direct bus service between Kathmandu and New Delhi during the visit of Prime Minister Narendra Modi for the upcomingSAARC summit in Kathmandu.

The agreement for the Arun Hydropower Project being developed by Satluj Vidyut Nigam will be signed after the twocountries had finalised a Power Development Agreement (PDA) for constructing the 900 MW Upper Karnali power projectbeing developed by GMR consortium, a couple of months ago.

Nepal will host the 18th SAARC summit in Kathmandu on November 26-27.Two Nepalese cities have formed sister city relationships with two Indian cities and preparations are underway to sign a

memorandum of understanding for the purpose.An MoU will be signed between Nepal and India for making Kathmandu-Varanasi and Janakpur-Ayodhya sister cities

during the visit of Prime Minister Modi.A motor vehicle agreement for a direct bus service between Kathmandu and New Delhi is also likely to be signed.Modi, who will arrive in Nepal by land on November 25, will also visit Muktinath a famous pilgrimage site in the north-

west mountain region of Nepal before wrapping up his visit on November 28.Source: Press Trust of India

14



Amazon plans to involve local grocerystores in network: Prasad

India, Nepal to sign deal for 900 MWpower project

15

WEEKLYECONOMIC BULLETIN >> NEWS ROUND-UP


Expressing confidence that India will cross 6% GDP growth in 2015-16, the new Minister of State for Finance Jayant Sinhasaid the priority of the government will be job creation and inflation man-agement.

“We are expecting the growth to pick up and be on the accelerating tra-jectory. Hopefully we will cross 6-6.5% next year,” Sinha told reporterssoon after taking charge.

He further said the economy will return to 7-8% sustainable growth tra-jectory in the coming years.

The economic growth slumped to 4.7% in 2013-14 and is estimated tobe between 5.4-5.9% in current fiscal.

The 51-year old Sinha, an IIT-Delhi and Harvard alumnus, was inductedas the Minister of State during the expansion of Union Council of Ministersof Prime Minister Narendra Modi yesterday.

Sinha also expressed hope that the government will be able to push theInsurance Bill and the Constitutional amendment bill on Goods and Serv-ices Tax (GST) during the Winter session of Parliament beginning Novem-ber 24.

Referring to the Insurance Laws Amendment Bill, which seeks to raise FDI cap in the sector from 26% to 49%, he said:“when it comes to Parliament we are confident that we will get the support that we require”.

As regards GST, Sinha said: “that itself has gone through years and years of preparation and consensus building ... We aresure will be able to show some positive results in this session”.

On fiscal situation, he said, it was well in hand and the government is monitoring the situation very closely with respect totax collections.

Referring to the priorities of the government, he said they have already been articulated by the Prime minister and the Fi-nance Minister.

“First, creating jobs is very important for us and for the economy. The second area that we have emphasised and we havedone well on is obviously managing inflation and price rise, which has been a major election issue and I think we have done re-markably well on that,” Sinha said, adding it was necessary to get the investment cycle moving.

Earlier, he was briefed by senior officials in the Ministry soon after taking charge. He assumes office at a time when theMinistry is preparing the Budget for 2015-16.

“We have been fortunate to have tailwinds of lower oil prices which are going to help on the expenditure side. So when wetake into account we are very confident that we will be able to achieve our fiscal targets,” he said.

Sinha was elected to the Lok Sabha in May this year from Hazaribagh in Jharkhand.His career has seen him work as an investment fund manager and management consultant.


India will cross 6% growth in 2015-16:Jayant Sinha

16

WEEKLYECONOMIC BULLETIN >> NEWS ROUND-UP

RBI to invite applications for payment banksby November-end: Raghuram RajanThe RBI will invite applications for setting up of small and payment banks – aimed to cater to small businesses and low in-come households – by the end of this month after putting in place finalnorms in this regard.

Besides, Reserve Bank is also planning to revamp its cash manage-ment system, Governor Raghuram Rajan said.

Addressing micro-financiers at a Nabard function , Rajan also said thatmicrofinance borrowers should be protected from arbitrary loan pricing.

The RBI Governor also reiterated his reservation against repeated loanwaivers by various state governments, saying the move distorts creditpricing, thereby also disrupting the credit market.

“There should be a reasonable ceiling on interest rate on loans frommicrofinance lenders for consumer protection,” he said.

Following the October 2010 crisis in the then undivided AndhraPradesh that crippled the MFI sector, an RBI-appointed Malegam panelhad suggested 26 per cent monthly cap on interest rates for the sector.This cap was notified by the central bank in April 2012.

The Andhra Pradesh crisis began after the state government banned recovery by any coercive means, following a string ofalleged suicides by micro-credit borrowers.

Both Andhra Pradesh and Telangana governments have declared loan waivers for the farmers hit by cyclone Phailin lastyear.

While the Telangana government has given the mandated 25 per cent of the written off loan amount to the banks, AndhraPradesh has not done it so far.

Banks have over Rs 1.3 trillion exposure to the farm sector in these two states.Source: The Indian Express


WEEKLYECONOMIC BULLETIN >> NEWS ROUND-UP17


India’s wholesale inflation drops to 5-year lowIndia’s annual wholesale inflation rate dropped to its lowest level in five years to 1.77 percent in October from 2.38 percent inthe previous month and 7.24 percent for the like month of the previous year, official data showed on November 14.

In what has come as a major respite for an average consumer, the annual food inflation actually declined by 1.3 percentdue to a drop in the prices of fruits and vegetables, somelentils and coarse cereals. But prices of fish, eggs, muttonmoved up.

Similarly, as per data on official wholesale price index re-leased by the government, the index for fuel and power alsodeclined by 1.3 percent, due to lower prices of aviation fuel,petrol, diesel and kerosene.

The index for manufactured products remained un-changed.

The drop in wholesale inflation, along with a fall in the re-tail index and the rise in factory output reported earlier thisweek, are some welcome signs for the Reserve Bank of Indiato consider an interest rate cut to push growth.

The Confederation of Indian Industry (CII) welcomed the fall in headline inflation on account of an across the board drop infood, fuel and manufacturing goods’ prices.

“Going forward, the deceleration in global commodity prices as also the government’s firm commitment to keep inflationunder check would help rein in inflationary expectations and significantly reduce the upside risks to inflation,” CII said in astatement.

“This provides sufficient room to the RBI to review its prolonged pause in policy rates and move towards policy easing inits forthcoming monetary policy especially as investment and consumption demand are yet to show visible signs of a pick-up”, said Chandrajit Banerjee, director general, CII.

Industry chamber FICCI said the considerable softening in prices comes as a great relief.“The government is committed towards achieving fiscal consolidation and this along with alleviated inflation creates room

for a more accommodative stance from the central bank in terms of rate reduction in the policy to be announced nextmonth”, said A. Didar Singh, secretary general, FICCI.




India sole major economy to see growth picking up: OECDIndia is the only major economy that is projected to see a pick-up in its growth momentum, the Organisation for EconomicCooperation and Development (OECD) said in London on November 12.

The Paris-based think tank whose members are mostly developed countries and some emerging countries like Mexico,Chile and Turkey, said most major economies, including the US, Brazil, China and Russia, are expected to experience stablegrowth momentum.

The OECD readings for the month of September are based on Composite Leading Indicators (CLI) that are designed to an-ticipate turning points in economic activity.

“India is the only major economy where the CLI points to a pick-up in growth momentum,” OECD said in a statement.The September CLI for India touched 99.1, the highest since May when it stood at 98.6.The OECD, however, said the CLI indicators point towards a weak growth momentum in Europe.“Within the Euro area, the CLI continues to point to a loss of growth momentum, with stronger signals of a slowdown in

the case of Germany and Italy. In France, however, the outlook continues to suggest stable growth momentum,” it said.While India has recorded economic growth of below 5 percent in the last two financial years, the Reserve Bank of India has

forecast the economy to grow at 5.5 percent in 2014-15 and at 6.3 percent during 2015-16.In a development that should bring comfort to India’s central bank to ease interest rates, data showed on November 12

the country’s factory output grew at 2.5 percent in September even as retail inflation to a record low of 5.52 percent duringOctober.

Commenting on the data on industrial production, the Federation of Indian Chambers of Commerce and Industry (FICCI)said in a statement : “It is heartening to see the positive growth of manufacturing in September which seems to be broadbased too.”




Double delight: Industrial output up, pricerise slowsIndustrial output growth gathered strength in September and retail inflation cooled to a fresh record low in October, provid-ing some signs of an economic revival and bolstering the case for an interest rate cut. Data released by the Central StatisticsOffice (CSO) on November 12 showed industrial output grew a better-thanexpected 2.5% year-on-year in September, thefastest in the past three months led by a spurt in the capital goods segment. In August, industrial output rose an annual0.5%.

Separate data released by the CSO showed retail inflation at 5.5% in October, against the previous month’s 6.5%. The Oc-tober figure is the lowest since the Centre started computing the new series of data in January 2012. Cooling food and fuelprices helped moderate the overall numbers.

The latest inflation data saw India Inc repeat its call for the Reserve Bank of India to cut rates when it reviews monetarypolicy on December 2. Finance minister Arun Jaitley, in an interview to TOI, had called for a reduction in interest rates follow-ing moderation in price pressure. The RBI has so far resisted calls for reducing interest rates citing stubborn inflationarypressures but some economists said they expect some easing in the months ahead.

“Both sets of data released this evening were better than expected with CPI easing to 5.5% from 6.5% last month and in-dustrial output rising 2.5% from 0.5%. Given that the pace of normalization in inflation has been relatively faster than that ofgrowth, we maintain our view of cumulative 100 basis poins easing in policy rates by FY16,“ said Rohini Malkani, economist atCitigroup, India.

India Inc stepped up the pressure for an interest rate cut and said the industrial output data signalled early signs of revivalbased on what it called “feel good factors and positive investor sentiment.

“We welcome the drop in inflation based on consumer price index and hope this would propel the RBI to reduce policyrates in its forthcoming monetary policy especially as consumer demand continues to be tepid,“ said Chandrajit Banerjee, di-rector-general at the Confederation of Indian Industry . The industrial output data showed the capital goods sector, a keygauge of economic activity, rose 11.6% year-onyear in September compared with a decline of 6.6% in the year earlier periodand a fall of 9.8% in the previous month.

The consumer segment continued to remain sluggish. Consumer durables contracted an annual 11.3% in September com-pared to a decline of 10.6% in September 2013 while consumer goods fell an annual 4% compared to an expansion of 1% inthe previous year ago period. The inflation data showed the moderation was led largely by softening food prices. Prices ofvegetables de clined 1.5% year-on-year in October while overall food and beverages prices rose 5.7% year-on-year slowerthan the double digit levels in the past.

“These numbers should be viewed with caution. First, the base effect is pronounced and will be so in November too whenthe CPI index peaked. These numbers could turn around in December and January when the index had come down last year.Second, the ministry of agriculture has forecaste lower kharif output for cereals, pulses and oilseeds. This being the case,there could be some upward bias on inflation in the coming months,“ said Madan Sabnavis, chief economist at Care Ratings.

Source: The Times of India

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