สรุปข่าวเศรษฐกิจอินเดียประจำวันที่ 12 กรกฎาคม 2556

"India Has the Right to explore oil in South China Sea," Vietnam said
Notwithstanding China's objections to Indian oil exploration and also in the support of India's "Look East" policy, Vietnam on Thursday asserted that India has the right to explore and do exploitation works in South China Sea as they are in the Exclusive Economic Zone of Vietnamese Sea.

The two countries held their 15th Joint Commission meeting here in New Delhi yesterday, whereupon India has extended 17 Lines of Credit totalling $164.5 million, and is also setting up a $2 million Vietnam-India Advanced Resource Center in ICT in Hanoi and providing a PARAM Supercomputer as a grant for the use in multiple applications.

Addressing a press conference with external affairs minister Salman Khurshid, Vietnam Foreign Minister Pham Binh Minh said that both countries had discussed the South and East China Seas and firmly expressed both sides' position that the UN Convention on the Law of the Sea needs to be respected.

(Source: the Economic Times, the Financial express)

FM Defends Indian Eco Policies as Growth Oriented asked US to come
Expressing that it is mutual interest of both the countries for India to become manufacturing economy, Finance Minister P Chidambaram asked US to come set up manufacturing bases in India.

In his meeting with CEOs and senior leaders of companies, with substantial investments in India, the Finance Minister Chidambaram met representatives of US companies - Microsoft, Lockheed Martin, Boeing, International Lease Finance Corporation among others - in Washington and informed them about recommendations of the Arvind Mayaram committee on enhancing foreign direct investment (FDI) caps in many sectors, and the steps being taken to implement the recommendations.

Besides, he also met Senator Max Baucus, who is the chairman of the Senate Finance Committee, whereby Chidambaram stated that while some concerns have been expressed about the current business environment in India, the policies adopted by the government are "pro-growth and World Trade Organisation compliant". He stressed New Delhi is committed to ensure a transparent, fair and non-discriminatory investment environment for foreign investors seeking to do business in India.

Then, finance minister underscored Indian concerns about the provisions in the US Comprehensive Immigration Reform Bill relating to skilled non-immigrant visas.

(Source: the Economic Times, the Financial Express, Business Standard)

Reversal of Rupee falling is still out of Sight: Subba
Reserve Bank governor D. Subbarao said that it is still very difficult to predict as to when the rupee will reverse declines and that inflation remains elevated. These were due to global factors and controlling high inflation is the priority, he told the reporters.
The currency has slumped almost 9% versus dollar in the past three months and touched an all time low July 8, threatening to stoke import costs and curb the Reserve Bank of India's scope to extend interest-rate cuts.

Subbarao said he'll assess growth, inflation and the external situation in his July 30 policy decision. He also said, "The depreciation will make oil and commodity imports more expensive and that will feed into overall inflation. India's current-account deficit has been high and global development in recent have sparked exchange-rate movements in several emerging nations, including India."

(Source: the Financial Express, the Economic Times)

Service Tax Exemption for all units in SEZ
The Finance Ministry decided to give upfront service tax exemption for all Special Economic Zone (SEZ) developers and units which means additional savings of Rs.1,500 crore for these units annually, as they longer have to wait for refunds.

Although the gain would be of Rs.1,500 crore only, the new move would improve liquidity of the SEZ developers and units even more substantially as they don't have to pay the tax in the first place and wait for the refund. However, there is a concern regarding that the new rule might be subject to misuse.

Field of officers of the department suspect that without a place of provision of rules to ensure services were consumed foe exports, the SEZs units may be used as a front services actually used in operations outside SEZs.

(Source: the Financial Express, the Economic Times)

Firms will have to disclose the Source of Funds Coming via Pref Shares
Market regulator Sebi has made it a mandatory for companies to disclose the source of funds coming through preferential allotment of shares, a move aimed at discouraging the use of front entities by promoters to increase their stake.

Sebi also made it compulsory to allot preference shares in dematerialized form to ensure adequate audit trial and apply lock-in provisions. "Shares allotted to preferential issue shall not be transferred till trading approval is granted for such shares by the stock exchanges. Further, the lock-in period shall commence on the date of such approval." Sebi said.

However, Sebi felt this would have limited efficacy despite ensuring greater transparency because the money trial is quickly lost due to fungibility.

(Source: the Economic Times)

Economic Section
Royal Thai Embassy