สรุปข่าวเศรษฐกิจอินเดียประจำวันที่ 15 กรกฎาคม 2556

India under Threat to lose auto market to Thailand and Indonesia
With the sluggish market growth and high interest rate combined with lack government incentives, India is likely to lose auto industry to Thailand and Indonesia as they are gaining more fresh foreign investments.

Despite being a big market and home to several global auto majors, India is now under threat of losing a large chunk of fresh investment from the likes of Honda, Toyota, Nissan and Ford to regional competitors Thailand and Indonesia. Both the Asian rivals have offered incentives to first-car buyers and they also have similar low tax digit. By 2016, around Rs. 24,000 crore will be invested in Indonesia by companies like Honda, Nissan, Toyota, and Volkswagen for capacity expansion. In Thailand, Honda is investing Rs. 3,300 crore in a new plant, apart from expanding production at older plant. This will take its capacity to 4.2 lakh units by 2015. Ford is investing Rs.2,700 crore in second plant, while Nissan is also investing Rs. 2,116 crore in a second plant.

Much of the capacity expansions planned by Toyota, Ford, VW, and Honda to these countries are for Export Purposes. They export to South America, Europe, Australia, and Africa. Above all, major auto companies seem to look at the advantage of Asean Free Trade Agreement which includes ten member states. Therefore, making them major auto production bases in the region.

(Source: the Financial Express)

FDI up 25% in April at $2.3B
Foreign Direct Investment (FDI) into India increased 25% year-on-year to $2.32 billion in April, the highest level in the past six months. The sectors that received large FDI inflows during the month include hotel and tourism ($2.32 billion), pharma ($987 million), chemicals ($51 million), and construction ($32 million), according to the data.

The most FDI in April came from Singapore ($1.29 billion), followed by Mauritius ($355 million), the Netherlands ($173 million), and the US ($149 million). According to the official, steps taken by the government are helping to boost FDI flows. Since September, several reform initiatives have been taken, including liberalizing FDI norms in civil aviation, retail and power exchanges.

(Source: the Economic Times)

Infy Eyes European IT
Infosys, India's second largest software firm, is looking to acquire technology and back-office services arms of European companies as they open up to the idea of outsourcing such work with an eye on cutting costs. According the European head of Infosys, the deals that the firm is chasing could give it committed business worth $40-$250 million over three to five years.

Europe makes up 23% revenues of the $7.4 billion revenue of Infosys but most of it comes from the United Kingdom and Nordic countries, Indian companies including Infosys, have been trying to gain market share in continental European markets such as Germany and France. Industry experts consider such buyout-based technology contracts as good opportunities for Indian outsourcers to gain entry into continental Europe, especially when the United States is raising barriers to doing business.

(Source: the Economic Times)

Bajal Electricals Looks to Expand Global Footprint
Bajal Electricals is readying itself for global expansion, for which it plans to set up an integrated research and development center to create next generation of products. The company, which is celebrating the completion of its 75 years, is looking to set up hubs to cater to new global markets as part of plans to scale up contribution of export to its total turnover from the current level of 1%.

Stating that it is aspiring to be a formidable player in the global market and the focus on innovation for new products, Bajal Electricals Joint MD Anant Bajal said, "One thing we have not done in the last 75 years is to take our products across the globe."

(Source: the Economic Times, Business Standard)

FIPB Rejects 4 FDI Proposals, Defers One
On14th July, the Foreign Investment Promoting Board (FIPB) rejected proposals of MCX, SNAP Networks, Alliance Insurance Brokers Pvt Ltd, and Mauritius-based Highdell Investment Ltd for non-disclosure of "beneficial ownership".

"Beneficial ownership has to be disclosed...we are looking at the quantum of information given," said a governmental official privy to the deliberation. Country's tax authorities have time and again voiced concerns over Indian money being re-routed through tax havens, the so called round tripping, and called for a closer check at the time of approving any investment proposals.

As a result, the FIPB has rejected as many as four proposals and deferred one in its last meeting because there was no clarity about sources of funds and beneficiaries of investment, sending clear signal that government may be desperate for foreign funds but it will insist on antecedence of funds.

(Source: the Economic Times, Business Standard)

PM to open Assocham annual meeting on Friday
Prime Minister Manmohan Singh will inaugurate the annual general meeting (AGM) of the Associated Chamber of Commerce and Industry of India (Assocham) on Friday.

Singh's presence can be seen as an attempt to woo industry as this would be the third chamber annual meet he would be inaugurating.
The Prime Minister had recently batted for sustained growth in the manufacturing sector in order to attain eight-nine per cent growth. Keeping this and the elections in mind, Assocham has kept its theme as "India Manifesto 2014". Apart from Singh, Bharatiya Janata Party president Rajnath Singh, leader of Opposition Sushma Swaraj and Shiv Sena President Uddhav Thackeray would be addressing the AGM. "This would be a stage for political parties to come up with their manifesto. Our theme has five focus points - economic, livelihood, energy, ecological and national security. Industry would be able to know what the major political parties are thinking in these lines," said D S Rawat, Assocham Secretary General.

(Source: Business Standard)

Economic Section
Royal Thai Embassy