IndUS Business Journal

Ficci-IIFA business forum sheds light on India, Spain trade ties

Jun 25, 2016 0

Madrid– On the occasion of 60 years of India-Spain relations, the Ficci-IIFA Global Business Forum that took place here on the second day of the festival focused on the urgent environmental issues especially renewable energy which could be the key to tackle climate change.

With regard to economic and political relationships, the highlights of this year’s forum was innovation and entrepreneurship which were becoming staple features of an evolving society and bringing out tremendous changes across the world in the way that business are forming and altering the face of modern trade and industry state connectivity.

The Ficci-IIFA Global Business forum was addressed by a host of Indian and Spanish speakers including a special address by Subhash Chandra Pandey, Additional Secretary and Financial Advisor, Department of Industrial Policy and Promotion, Ministry of Commerce and Industry, Government of India, on “Lets Make in India for the World” and address by Jaime Garcia-Legaz, Secretary of State for Trade, Ministry of Economy and Competitiveness, Government of Spain, on “India and Spain: way forward for promoting trade and investment relations”.

This was followed by panel discussions on various subjects like “Co-operation in renewable: the only way to counter climate change imperatives” moderated by Alfredo Bonet, International Director, Spain Chamber of Commerce and “Building New Linkages in Infrastructure sector (Roads, Ports, airports and railways) between India and Spain” moderated by Maria Aparici, Deputy Director General for Trade Policy with Europe and Asia, Ministry of Economy and Competitiveness.

The other panel discussions were on “Services: Pormoting Synergies in IT, Smart Cities and Tourism between India and Spain” moderated by Arvind Thakur, CEO and Joint Managing Director, NIIT Technologies Ltd and “Soft Power, Soft Sell: cooperation in Media and Entertainment to define next 60 years of India- Spain economic relations” moderated by Luid Cueto, General Coordinator, Madrid City Hall. (IANS)

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Gold up 4.69 % after Britain votes to quit EU

Jun 25, 2016 0

Chicago– Gold futures on the COMEX division of the New York Mercantile Exchange advanced sharply on Friday as Britain voted to exit the 28-nation European Union (EU).

The most active gold contract for August delivery gained $59.30, or 4.69 per cent, to settle at $1,322.40 per ounce.

Gold_ShotGold advanced to its highest level since July 11, 2014, when gold closed at $1337.40 per ounce, datas collected by Xinhua reports showed on Friday.

US investors displayed fear, triggering a rush to the precious metal as a safe haven after Britain voted to leave the European Union.

The referendum has been dubbed the “Brexit” by investors and is largely seen as a highly destabilising move. Analysts noted that the potential for a Brexit has caused volatility in the market, driving investors to gold to seek refuge from the Brexit vote.

An extensive fall in equities also gave extensive support to the precious metal as the US Dow Jones Industrial Average fell sharply on Friday.

Analysts noted that when equities post losses, the precious metal usually goes up, as investors are looking for a safe haven, while the opposite is true when US equities post gains.

On the US economic front, new orders for manufactured durable goods in May decreased $5.3 billion, or 2.2 per cent, to $230.7, the Commerce Department said on Friday.

Meanwhile, the Thomson Reuters/University of Michigan index of consumer sentiment showed on Friday that the final reading of the consumer sentiment for June fell to 93.5 from 94.7 in May.

On Thursday, gold futures fell for fifth trading days in a row as investors bet that Britain would remain in the European Union after the Brexit referendum.

Analysts believe that the market will be dominated by the Brexit vote in the coming days, and fear will add additional support to the precious metal.

Analysts note that the last US financial crash in 2008 was spread over several days, and that if conditions worsen, the precious metal will likely increase in value due to its safe haven properties.

Silver for July delivery rose 43.60 cents, or 2.51 per cent, to close at $17.789 per ounce. Platinum for July delivery added $20.80, or 2.15 per cent, to close at $987.10 per ounce.

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Brexit unleashes bears, mows down equities, rupee

Jun 25, 2016 0

By Porisma Pompi Gogoi & Rohit Vaid

Mumbai– Key Indian equity indices dropped by around a per cent each as investors’ sentiments were eroded on the back of negative global cues during the just concluded weekly trade.

The equity markets were dented on Britain’s vote to exit the EU, which cascaded into a sharp drop in the rupee’s value and dried up foreign fund inflows.

The 30-scrip sensitive index (Sensex) of the BSE plunged by 286.37 points or 1.07 per cent at 26,367 points, whereas the 51-scrip Nifty of the National Stock Exchange (NSE) lost 81.6 points or 0.99 per cent at 8,088.60 points.

The benchmark indices had started the week on a flat note, prompted by the news of Reserve Bank of India (RBI) Governor Raghuram Rajan formally declining a second term.

The global markets, too, remained in a volatile state during the entire week as investors were seen disappointed by US Federal Reserve Chairperson Janet Yellen’s comments on the prospects of jobs’ growth in the world’s largest economy.

However, some value buying after the initial downside helped lift prices. The World Bank’s retention of India’s economic growth forecast at 7.6 per cent for 2016-17 also kept value buying intact.

Moreover, the Indian government’s latest announcements on liberalisation of the foreign direct investment (FDI) regime in the country also gave a slight boost to the Indian economy.

Even the positive announcements on the macro front, such as contraction in the country’s current accout deficit (CAD) also buoyed investors’ sentiments.

However, later in the week, the UK vote to leave the EU triggered volatility in the western economies as well as emerging markets.

According to market observers, the initial volatility was brought about by the Central Bank Governor Raghuram Rajan’s surprise announcement about his plans to quit after the end of his tenure in September.

“But losses were written off by the government announcements on FDI and textile sector policy,” Dhruv Desai, Director and Chief Operating Officer of Tradebulls, told IANS.

Anand James, Chief Market Strategist at Geojit BNP Paribas Financial Services, told IANS: “Last week we had a cataclysmic end, with Britons’ decision to leave EU which caught markets by surprise.”

“Though the potential for Britain leaving the EU was fairly priced in the earlier weeks, the previous day had given positive hopes that they will choose to remain.”

James pointed out that the negative surprise from Brexit proved too much for the markets.

“The pound dropped to the lowest since 1985, Nikkei fell nearly eight per cent, other Asian markets were also deep in red, and even Australia dropped over three per cent,” he added.

“Indian indices recovered sharply off lows, but yet, Nifty’s close was still 2.5 per cent in red.”

Sector wise, all the sub-indices of the BSE ended in the red. The realty index was down 3.74 per cent, followed by the index for industrials, down 3.62 per cent, and metals was down 3.59 per cent,

Among the individual stocks of the Sensex, Mahindra and Mahindra was the top gainer with 1.12 per cent, followed by Bajaj Auto (up 1.05 per cent), Asian Paints (up 0.48 per cent), GAIL (up 0.33 per cent), and Su Pharmaceuticals (up 0.27 percent).

The losers were led by Tata Motors (down 7.99 per cent), followed by Tata Steel (down 6.37 per cent), Larsen and Toubro (L&T) (down 4.26 per cent), ICICI Bank (down 4.07 per cent) and ONGC (down 3.79 per cent).

The week also saw an outflow of funds due to global concerns. The provisional figures from the stock exchanges suggested that the foreign institutional investors divested stocks worth Rs 641.17 crore during the week under review, while domestic institutional investors purchased scrip worth Rs 1,068.37 crore.

The figures from the National Securities Depository (NSDL) showed that foreign portfolio investors were net sellers of equities worth Rs 4,776.43 crore, or $708.77 million from June 20-24.

Experts further said that the extreme volatility of “Black Friday” — June 24, 2016 — when Britain decided to exit the EU will be overcome eventually, though investors are expected to be “very cautious before taking on any fresh positions.”

On Friday, the Indian rupee weakened by 71 paise to 67.96-97 against a US dollar from its previous close of 67.25-26 to a greenback. It had dived over 1.4 per cent to an intra-day low of 68.22 to a US dollar.

On a weekly basis, the currency fell by 88 paise to 67.96-97 against a US dollar from its previous close of 67.09 to a greenback. (IANS)

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Sky is the limit for India’s infrastructural appetite: Jaitley

Jun 25, 2016 0

Beijing–Stressing that India will improve upon its 7.6 per cent growth of last fiscal, Finance Minister Arun Jaitley has said the sky is the limit for the country’s appetite to draw infrastructural investments.

In an interview to China’s English language television channel CCTV, he said infrastructure finance is also one of the main focus areas for the first board of governors meeting of the Asian Infrastructure Investment Bank (AIIB).

Indian Finance Minister Arun Jaitley

Indian Finance Minister Arun Jaitley

“The potential for investing in infrastructure, urbanisation, housing, power, electricity, water, social sector, for us even today, the sky is the limit. That’s the kind of investments we require,” Jaitley said in the interview.

“Depending on the kind of finances that are initially available, we would like to see which ones of these projects — some of them could be financed by the AIIBA,” he said.

“India has a massive infrastructure programme which is going on. There are programmes of highways, railways, airports, sea ports and also programmes with respect to water suplies, sewages, smart city creation — more urbanisation,” he added.

The finance minister said a good monsoon this year will boost rural economy and therefore add to the growth rate of the economy.

“We grew by 7.6 per cent last year, we’ll certainly maintain that and with a good monsoon, hopefully improve upon that. It (growth rate) is sustainable for the reason that India still has lot of distance in terms of economic growth to cover,” he said.

Jaitley said currently the public finances are taking the lead in infrastructure financing in India, but in due course as the economy picks up, the private sector will also boost it.

Emphasising that India has been the second largest partner in China-led AIIB, he said that these parallel institutions are developing because of the need of infrastructure finance.

“I think it is inevitable that irrespective of the theme of the conference, this issue (infrastructure finance) will dominate all economic discussions,” he said.

Even though the new technology industrial revolution is likely to come, in large populated economies like India job growth is also extremely important, he said.

“I think these are inevitable subjects but at the root of it all, the issue is that there is a global slowdown. As to how long will this continue, how does the world pull itself out of the situation, and how does growth return to the world,” he said.(IANS)

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With only 3% population of India, California produces 125 percent of India’s GDP

Jun 25, 2016 0

By Devanik Saha

As California, the US’ richest state, recently overtook France and Brazil to become the world’s sixth largest economy, according to a Bloomberg analysis, a comparison with India reveals that California has three per cent of India’s population but a gross domestic product (GDP) 125 per cent larger.

California, a powerhouse of innovation and technology, has 39 million people; less than Odisha which has a population of 41 million. Texas follows California with a GDP of $1.58 trillion (Rs 105 lakh crore) – 79 percent of India’s current GDP with 2.1 per cent of its population.

indian flagThis data offers some perspective as India’s economy – ranked eighth in 2015 with a GDP of $2 trillion (Rs 134 lakh crore) – is projected to climb past Brazil, the United Kingdom, France, Germany and Japan and become the world’s third-largest in 2030 with a GDP of $7.3 trillion (Rs 489 lakh crore), according to an IndiaSpend analysis of 2015 US government data.

Over these 15 years, China’s GDP is projected to double to $18.8 trillion (Rs 1,260 lakh crore) – more than twice its current size – helping narrow the gap with the US, whose GDP in 2030 should be $23.8 trillion (Rs 1,595 lakh crore), according to the US projection.

The US economy made up a quarter of the global economy in 2006, 23 per cent in 2015, and will be a fifth by 2030. India’s GDP share in the world will almost double from 3.18 per cent in 2015 to 6.21 per cent in 2030.

California-flagThe Indian economy will more than double to $5 trillion in a “matter of few years”, said Finance Minister Arun Jaitley in June 2016, as the government steps on its reforms agenda to accelerate growth.

The US projection said India will cross the $5 trillion mark in 2025.

To illustrate the size and power of the US economy, we compared India’s GDP to the GDP of individual US states, factoring in their population, to indicate the magnitude by which India lags the US in wealth and productivity. That lag also indicates the potential for India’s future growth-if that potential is realised.

The GDP Of Maharashtra, India’s richest state = GDP of Connecticut, 23rd-richest US state

With a GDP of $2.5 trillion (Rs 168,000 crore), California – also the most populous state – created the most jobs of any state in the US in 2015, more than the second and third-most-populous states, Florida and Texas, combined. Four of the world’s 10 largest companies are based in California.

With far fewer people, US states have economies that are not just richer but more productive than those of Indian states.

With a GDP of $0.26 trillion (Rs 18 lakh crore), Maharashtra is India’s richest state, followed by Tamil Nadu ($0.17 trillion, Rs 11.2 lakh crore) and Uttar Pradesh ($0.16 trillion, Rs 10.4 lakh crore).

Maharashtra’s GDP almost equals that of Connecticut ($0.26 trillion), ranked 23rd in the US by GDP. Maharashtra’s area is 21 times larger and it has a population 31 times as large as Connecticut.

Tamil Nadu has a GDP almost equal to that of Iowa, the 30th-richest state in the US.

The Indian economy is a bright spot in an economically depressed global landscape, and is the world’s fastest-growing, said a 2015 report by the International Monetary Fund (IMF).

The Indian government’s efforts to improve business climate have gained momentum, the IMF report said, emphasising reforms in key areas. These include:

* Addressing bottlenecks in the energy, mining and power sectors

* Increasing investment to help close India’s major infrastructure gaps

* Simplifying land acquisition and environmental clearances

* Reforming the agriculture sector to ensure greater efficiencies in food procurement, distribution, and storage.

Notes:

  1. The base year for Indian state GDPs is 2010-11 in Rs crore; for US states, the base year is 2010 in US dollars
  1. To convert GDPs of Indian states into US dollars, we have considered an exchange rate of $1 = Rs 67
  1. Actual figures of GDPs may vary due to currency fluctuations or change in base years, but the trends largely remain the same.

(25.06.2016 – In arrangement with IndiaSpend.org, a data-driven, non-profit, public interest journalism platform. Devanik Saha is a New Delhi-based freelance journalist. The views expressed are those of IndiaSpend.) IANS.

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Prime Minister Modi launches Smart City Projects

Jun 25, 2016 0

Pune–Prime Minsiter Narendra Modi on Saturday evening inaugurated various ‘Smart City Projects’ under the Smart Cities Mission at a function here.

Modi launched 84 such projects including 14 for Pune, for various other cities across the country, at an investment of around Rs 2,000 crore.

Indian Prime Minister Modi

Indian Prime Minister Modi

The 20 selected Smart Cities were linked to the Pune venue through videoconferencing wherein their states’ Chief Ministers and other leaders gave details of their plans for the Smart Cities in their states and interacted with the PM.

Modi visited an expo on Smart Cities, inaugurated a contest on ‘Make Your City Smart’ and a Smart Net Portal on the occasion at the Shiv Chhatrapati Sports Complex in Balewadi, on the outskirts of Pune.

Maharashtra Governor C. V. Rao, Chief Minister Devendra Fadnavis, Union Urban Development Minister Venkaiah Naidu and other dignitaries were present on the occasion.

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India has done little to bridge energy supply-demand gap

Jun 25, 2016 0

New Delhi– India has done very little in the last few decades by way of harmonizing its governance structures to secure its energy needs despite a surging demand to fuel its growing economy, and the crisis may worsen in the coming years, a policy discussion forum here was told.

Vikram Singh Mehta

Vikram Singh Mehta

“We have done very little over the last few decades to make the policy linkages between energy-environment and climate change. We did not pay enough attention on energy infrastructure, conservation, subsidisation of LPG and petrol. These are all policy inadequacies that contributed to the increase in demand of energy,” said Brookings India Chairman Vikram Singh Mehta, who previously served with Shell India as its CEO.

Mehta was speaking at a roundtable, ‘India’s Energy Security and Climate Change Commitments: Policy Challenges’, organized by Delhi-based think tank Society for Policy Studies (SPS) in association with the India International Centre (IIC) on Friday evening.

He said government policies had failed to balance the pace between surging demand and supply constraints that caused the current energy crisis in India, the fifth largest energy consumer in the world.

India is home to nearly 18 per cent of the global population but uses only six per cent of the world’s primary energy resources and the country is set for a sustained growth in energy demand with its growing economy, according to the Energy Outlook 2015.

“The energy crisis facing India is because the demand is surging and the supply is failing to keep pace with demand,” Mehta said, pointing out that the demand was due to the rising population and growing prosperity in the country.

“India has a large population. And the youth are aspirational too. We have developed and are now entering the high energy trajectory of consumption,” said Mehta, who also served as strategic planning advisor in the state-run Oil India Ltd.

He said since the current government’s policies were focused on modernization and expansion of its manufacturing sector “into higher gear” with the Make in India initiative, the country needed “to create jobs which are energy intensive”.

He also said “India is the driver of energy demand in the world” after China with India’s share in world energy demand rising by nearly 6 per cent over the last 15 years. Demand for energy for the rest of the world increased by 2.5 per cent during this period.

Mehta also warned that India must be ready to tackle the crisis that can get worse as countries on which “we are dependent are either in huge political or economic crisis”.

Asked if the present Bharatiya Janata Party-led government was different from the previous rule in tacking the crisis, Mehta said: “The NDA has benefited from the drop in global oil prices. Earlier oil companies were bearing the burdens of subsidies. This government and the Prime Minister in particular are aware of how technology can enhance energy security and availability..”

Karthik Ganesan, a research fellow at Council on Energy, Environment and Water (CEEW), in his presentation of his study focused on the development of long-term energy scenarios in India and energy efficiency improvements in the industrial sector of the country.

Ganesan drew attention to India’s commitments at the Paris climate change conference and the need for informed clean energy policy initiatives based on life cycle analysis. (IANS)

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Thailand tourism appoints Anusha Dandekar its brand ambassador

Jun 25, 2016 0

Mumbai– Attempting an image makeover, the Tourism Authority of Thailand (TAT) has appointed Indo-Australian actress-singer and former MTV VJ Anusha Dandekar as brand ambassador to lure more women tourists and focus on ‘girly getaways’ there, an official said here on Saturday.

Anusha Dandekar is Thailand tourism's brand ambassador

Anusha Dandekar is Thailand tourism’s brand ambassador

Dandekar has been selected for her love for Thailand and for symbolising the exact segment the country wants to target, said TAT Mumbai Director Soraya Homchuen.

“Women travelers already represent 30 per cent of arrivals from India, compared to a negligible proportion of our market mix and mostly visiting families on holidays earlier. We want to scale this up to more than double by 2022,” Homchuen said.

Anusha Dandekar is Thailand tourism's brand ambassador

Anusha Dandekar is Thailand tourism’s brand ambassador

TAT will showcase Thailand as a choice for women travelers to escape together for short breaks, weekends, bachelorettes, kitty parties and girly holidays, she added.

Excited by the new assignment, Dandekar said Thailand remains her favourite destination and though she has visited it over 50 times, it never gets old for her.

Homchuen said a Thomas Cook survey this year revealed 70 per cent of women prefer to travel with friends compared to family and love the local culture, cuisine, shopping, spa and wellness, and move without a tour manager.

“The women travelers prefer safe, easy-to-navigate destinations and Thailand fits all these requirements the best,” she pointed out.

Referring to various global studies showing that nearly 80 per cent of all holiday decisions are taken by women and between 2011-2020, the women travelers’ segment would grow exponentially, she said targeting women “makes sense”.

Easily accessible by a four-hour flight (Mumbai-Bangkok), tourism accounts for overall 20 per cent of Thailand’s GDP with 29 million tourists from all over the world visiting the country in 2015, with a target of 100 million by 2032. (IANS)

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French European Indian Organisation launched in Paris

Jun 25, 2016 0

Paris– An organisation to promote social, economic and cultural cooperation between India and Europe has been established with a base in the French capital.

French European Indian Organisation (FEIO) hopes to be a catalyst for the two sides to realise their full economic potential, a statement from the organisation said here on Saturday.

Mohan Kumar

Mohan Kumar

“It is very good that the organisation is getting both the countries together as the members and its community can help the world and India to grow bigger,” Indian Ambassador to France Mohan Kumar said.

The aim of FEIO is to promote entrepreneurship and facilitate industrial growth and assist organisations to network for strategic partnerships, either technical or commercial, the statement said.

“This forum will help members to have bilateral trade with France, Europe, and India. It plays an advocacy role on a wide range of matters and acting as an impetus to growth and development of businesses, on policy and implementation matters,” FEIO president Satish Reddy said. (IANS)

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Brexit pushes rupee into bear grip, to range from Rs 67-68

Jun 25, 2016 0

By Rohit Vaid

Mumbai– Britain’s exit from the European Union (Brexit) is likely to keep the Indian rupee under a tight bear grip of around Rs 67-68 to a US dollar in the very near-term.

According to experts, the negative impacts of Brexit will further divert foreign funds from the bourses and currencies of India and other emerging markets (EMs) to more stable investment options like gold, silver and the US dollar.

The Indian rupee is predicted to range between 67.20-68.20 in the very near-term.

Rupees“Now that Brexit is over, equities and currencies have pulled back a bit before close. Rupee looks forward to monsoon, and the monsoon session (of parliament),” Hiren Sharma, Senior Vice President, Currency Advisory at Anand Rathi Financial Services, told IANS.

“Rupee is expected to be in a range of 67.20/66.80 to 67.80/68.20 in the very near-term.”

Experts further said that the extreme volatility of “Black Friday” — June 24, 2016 — when Britain decided to exit the EU will be overcome eventually, though investors are expected to be “very cautious before taking on any fresh positions.”

On Friday, the Indian rupee weakened by 71 paise to 67.96-97 against a US dollar from its previous close of 67.25-26 to a greenback. It had dived over 1.4 per cent to an intra-day low of 68.22 to a US dollar.

On a weekly basis, the currency fell by 88 paise to 67.96-97 against a US dollar from its previous close of 67.09 to a greenback.

The barometer 30-scrip sensitive index (Sensex) of the BSE closed on Friday at 26,397.71 points, down 604.51 points, or 2.24 per cent.

This was the biggest fall in percentage terms since May 12, 2015, which wiped off nearly Rs 3.3 lakh crore in the market capitalisation of BSE listed stocks.

The Nifty of the National Stock Exchange (NSE) recouped some losses and ended at 8,088.60 points, down 181.85 points, or 2.20 percent.

Bansi Madhavani, analyst, India Ratings and Research, told IANS that an immediate sentiment of risk aversion is likely to keep the rupee on the defensive amid heightened volatility; however relatively stronger macro fundamentals may cushion the impact vis-à-vis its peers.

Madhavani pointed out that more central banks may now be inclined to stay in and widen their accommodative stance, while the US Federal Reserve may reassess its rate normalisation trajectory.

“This is likely to support the emerging markets, once the panic subsides,” Madhavani said.

“Over the coming week, focus will be on how the rest of the EU nations respond to the exit as also how central banks respond to this unprecedented shock.”

Anindya Banerjee, Associate Vice President for Currency Derivatives with Kotak Securities, said: “Over the short run we expect volatility to stay very high, as the central bank’s intervention to stabilise asset prices and market’s attempt to reduce leverage and risk create a perfect storm in financial markets.”

“Emerging market currencies like the rupee are exposed to this kind of volatility. Though our macros are sound, but weak growth environment and expensive valuation of risk assets can cause the rupee to depreciate against the dollar and yen.”

Banerjee’s forecast pegs the Indian rupee to remain in a broad 67-69 range over the medium term.

Centrum Direct’s Senior Vice President and Head for Treasury and Banknotes Business, Hariprasad M.P., cautioned that currently the rupee has a strong depreciation bias and the immediate levels to watch out would be Rs 68.20 to a dollar.

“If it breaches that level, the rupee would depreciate towards 69.00. The rupee is likely to open above 68 levels on Monday,” he explained.

Other analysts elaborated that Brexit is unlikely to revive foreign flows to India in a hurry.

In 2016, the equity segment noted a net portfolio inflow of $2.8 billion, while debt outflows stood at $1.1 billion.

As per provisional figures from the stock exchanges, the foreign institutional investors (FIIs) divested stocks worth Rs 641.17 crore during the week under review.

The National Securities Depository (NSDL) figures showed that foreign portfolio investors (FPIs) were net sellers of equities worth Rs 4,776.43 crore, or $708.77 million from June 20-24.

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