สรุปข่าวเศรษฐกิจอินเดียประจำวันที่ 16 กรกฎาคม 2556

India to review bilateral trade pacts, especially with Thailand & ASEAN
Amid glamour from industry against conceding trading partners more access without extracting significant gains in return, the finance ministry started reviewing the bilateral investment treaties and now it wants a review of FTA from department of commerce whether India got what she expected from the FTA or not, most importantly with Thailand and ten members Asean.

Indian industry body CII revealed that Indian industry's biggest concern is the India-Thailand agreement which has kicked off in a limited way with an early harvest scheme that has eliminated tariffs on 82 items.India's imports from Thailand rose to $5.6 billion in 2012-13 from $2.7 billion in 2008-09 while export grew to $3.7 billion from $1.94 billion over the same period. India's trade deficit with Asean, with which it signed a trade agreement in August 2009, has widened to $18 billion from $14.9 billion in 2009-10.

India has had a bitter experience with imports of gold from Thailand at a concessional duty under the trade early harvest scheme. And heavy bullion imports were one of the main factors for the rise in India's trade deficit to an all-time high of 4.8% of GDP in 2012-13. Source said that most FTAs have periodic review clauses in which concerns of both sides are taken on board, so India can use these reviews to ensure a better deal for itself even as it does better due diligence in the ongoing negotiations. Now India has adopted a cautious approach in its negotiations with EU to protect its interest.

(Source: the Economic Times)

International Infra Giants in fray for Rs.4,000-cr railway contract
Many international companies such as Mitsui, Marubeni, Sojitz, Fujita, and others are in fray for a Rs.4,000 crore railway contract to build a 320-km stretch between Vadodara andVaitarna in Maharashtra on the western freight corridor. This will connect Dadri in Uttar Pradesh with JN Port in Maharashtra, source said.

The bidding for the project would be done in a couple of months after which the selected names would be sent to Japan International Cooperative Agency (JICA), the funding agency for the 1,500-km western freight corridor, a part of the 3,300-km dedicated freight corridor being constructed at the cost of Rs.95,000 crore. The railways will call bids for another stretch on the eastern corridor in which 24 firms have shown interest.

(Source: the Financial Express)

June inflation up to 4.89%
According to data released by the commerce ministry on Monday,Wholesale Price Index (WPI)-based inflation rose to 4.86% in June, after falling to a 43-month low of 4.7 % in May. As retail inflation for the month stood at 9.87 %, the Reserve Bank of India (RBI) has been caught in a dilemma on easing its monetary stance later this month, analysts said. "Of course, we will take into account inflation numbers while framing the policy," RBI Governor D Subbarao told reporters after a meeting with Finance Minister P Chidambaram.

The rise in inflation was mainly due to a 8.14 % rise in the prices of primary articles, against 6.65 % in May. Prices of food articles rose 9.74 %, against 8.25 % in May. The sharpest rise was seen in the case of vegetables - prices rose 16.47 %, against 4.85 % in May.

For manufactured items, which have a share of about 65 % in the WPI basket, inflation fell to 2.75 %, against 3.11 % in May. "We thought higher food prices would be offset by the easing price growth of manufactured goods. However, in the end, it wasn't enough. The headline figure ticked higher. Higher diesel prices linked to lower fuel subsidies continue to support overall prices," said Glenn Levine, senior economist, Moody's Analytics.

Overall, WPI-based inflation remained in the Reserve Bank of India (RBI)'s comfort zone of four-five per cent, two weeks ahead of the central bank's monetary policy review.

(Source: the Financial Express, Business Standard)

FDI norms to be decided today
The PM called for a meeting with his key cabinet colleagues to finalize the proposed foreign direct investment (FDI) policy suggested by the Marayam panel today, in a indication that the government is keen to rush through reforms before Parliament convenes for the monsoon session.

The Marayam committee recommended at least 49% FDI in most sectors through the automatic route and higher FDI limit in many sectors such as multi-brand retaikl, telecom, and civil aviation in a bid to attract stable foreign inflows as CAD touched an all-time high of 4.8% of DPG last fiscal.

(Source: the Economic Times, the Financial Express)

Govt puts infra projects on fast track
Prime Minister Manmohan Singh has approved the constitution of an inter-ministerial group to clear the backlog of Rs.2-lakh core railways projects that have been stuck due to lack of funds for over a decade. The group comprises of the finance secretary, Railways Board chairman and Planning Commission secretary.

The group will come up with a creative financing-cum-implementation mechanism for enhancing investment and clearing the Rs.2-lakh crore backlog in a prioritized manner. The steering group will hold its first meeting on July 19, and the proposal to be discussed include Mumbai elevated rail corridor, eastern freight corridor of Indian railways, two international airports in Bhubneshwar and Imphal, power and transmission projects, a port project, one express way project, and two locomotives projects in Bihar.

(Source: the Economic Times, the Financial Express)

Veg oil imports up 21% in June as production dips
According the industry data, vegetable oil imports increased by 21% in June, to 9.47 lakh tonne, because of lower domestic production and rising local demand for cooking oil. The industry body pegged vegetable oils imports at a new record level of at 107-110 lakh tonne in the 2012-13 marketing year (November to October) compared to about 102 lakh tonne previous year.

Solvent Extractors' Association executive director BV Mehta said, "We have already reached 71.5 lakh tonne of imports and further 35-40 lakh tonne expected between July and October, taking overall to 107-110 lakh tonne." India imports palm oil from Indonesia and Malaysia and soyabean oil from Argentina andBrazil. The country imports about 60% of its domestic demand. Currently there is zero duty on crude nad 7.5% on refined edible oils.

(Source: the Financial Express)

Economic Section
Royal Thai Embassy