สรุปข่าวเศรษฐกิจอินเดียประจำวันที่ 5 กรกฎาคม 2556

Govt might relax Pharma FDI
In a move that could make it easier for the foreign drugmakers to use the faster expansion route by rapping up with their robust Indian counterparts, the Government may relax the pharma FDI. The source said the Department of Industrial Policy and Promotion (DIPP) would favour approval of the brownfield FDI proposals if the target Indian company's domestic market share is below a threshold.

The limit would be defined in order to facilitate approval for acquisition of most Indian drug companies, except half a dozen or so at the top. And all the investment has to go through the route of Foreign Investment Promotion Board (FIDB). Today the FIDB will take up 10 pharma proposals, including the $1.6-billion buyout of Strides Arcolab's injectables arm by US major Mylan Inc.

However, the DIPP insists on rigorous regulatory assessment of brownfield pharma investment, saying that foreign takeover of domestic companies would be detrimental to India's healthcare sector and lead to an increase in drug prices.

(Source: the Financial Times)

Govt to check Imported Electronic Products
With the safety standard set by the Bureau of Indian Standard (BIS), now government decided to start surveillance of electronic products imported into the country to verify their compliances. The monitoring will be done once in a two years.

This move is likely to add the woes of multinational electronics manufacturers because, as of, till now the government had asked for self-evaluation and declaration. According to the source, the department of electronics and information technology (DeitY) plans to monitor the compliance of safety standard from next year.

" The companies may have problems once we start surveillance because currently they can go to any BIS-certified lab to get their products registered, but after that we will decide where the products will go," said a DeitY official.

(Source: the Financial Times)

Govt may raise Import Duty on Raw Sugar to 15%
Currently the import duty on raw sugar is at 10%, but a panel of ministers on Monday is believed to have decided to increase to 15%.

The source said, the panel-comprising of agricultural minister, finance minister, and food minister-took the decision to discourage cheaper inflows of the sweetener from overseas and enable domestic producers to clear cane arrears at the earliest. The latest official data showed that sugar mills owed farmers a record Rs.12,500 crore for cane purchase until 15 April, as cane prices remained elevated while returns from sugar sales failed to keep pace.

(Source: Business Standard, the Financial Express)

Govt starts its plan to give 15 major Airports to Private
The Indian government has planned to invite private sector to operate 15 major airports, fulfilling that, it approved Chennai and Kolkata airports to be the first to go yesterday.

The two airports are currently under the Airport Authority of India (AAI) operation. But separately, the AAI has invested around Rs.1, 000 crore to modernize 50 low-cost airport in the country. Therefore, the new terminals built by the AAI in the two cities may be leased out to private concessionaire who would be asked to pay a compensation for the AAI.

The others on the line for privatization as envisaged by the Prime Minister in the current financial year include Lucknow, Guwahati, Jaipur and Ahmedabad.

(Source: Business Standard)

Food Ordinance seen as accelerator: the law won't hit Fiscal Deficit
The government said on Thursday that the food security law will not impact the fiscal deficit for the current year. It is certain that it will achieve the fiscal deficit target at 4.8%.

The assurance from the finance ministry came after private economists said fiscal deficit may exceed the target by 50 basis points or 0.5%. P Chidambaram, Finance Minister has set aside Rs.77,740 crore towards food subsidiary in the budget estimates for the current fiscal and allocated additional Rs.100 crore towards the incremental cost on account of the food security law.

However, Nomura said it did not expect much impact of the law in the current fiscal, but warned it could have serious consequence later. "We don't expect a substantial fiscal impact of the bill in FY14 as it is likely to be implemented only in phases initially...However, the medium-term consequence could be far reaching and will be clear from FY15 onwards," Nomura economist Sonal Varma wrote in a note.

(Source: Business Standard, the Business Times)

Economic Section
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