สรุปข่าวเศรษฐกิจอินเดียประจำวันที่ 25 กรกฎาคม 2556

Posco and Arcelor exit won't impact India

The decision of global steelmakers ArceloMittal and Posco to scrap their India projects will not upset the demand supply equilibrium in the country in the short to medium term, according to some top domestic steelmakers.

Last week, Arcelor Mittal, the world's largest steelmaker, said it was scrapping its plan to build a large plant in Odisha due to land acquisition problems. The announcement came close on the heels of Korean steelmaker Posco citing the same reason for pulling the plug on its Karnataka project. However, the move to pull out the projects will not impact India at least in a short term, according to state-run SAIL's chairman CS Verma.

The steel input is very crucial to the industry such as infrastructure, automobile, and consumer goods.Demand for steel in India, Asia's third-largest economy, was 73 million tonnes per annum in 2012-13, which was mostly met through domestic production. And the steel market in India has a huge potential for growth. Based on an average GDP growth rate of 8%, domestic demand for steel is estimated to touch 155 million tonnes per annum by 2020.

With several new capacities in the pipeline, India's crude steel capacity of 92 mtpa now is expected to touch 200 mtpa by 2020. According to Verma, by the turn of the decade, demand and supply is expected to be more or less in balance in the Indian market.

(Source: the Economic Times, Business Standard)

Govt relaxed tough norms to woo retail FDI                                                        

In a fresh bid to attract global multi-brand retail companies to the country, the government has decided to relax norms for FDI in the sector, including dropping the condition that such firms can open shop only in cities with a population of at least 1 million.

A Cabinet note moved by the department of industrial policy and promotion (DIPP) has also proposed to ease norms about sourcing from small-scale enterprises and the investment criteria for back-end infrastructure. The government hopes the sops will finally spark investments as no company has even applied for permission since it allowed 51% FDI in multi-brand retail last September.

According the DIPP, the global retailers now can set up shop anywhere. And the stipulation that 30% of procurement must be from Indian "small industries" with total investment of less than $ 1 million, revised to include "medium-scale industries with a total investment not exceeding $ 2 million". Besides, requirement that foreign partners must spend 50% of their investment in back-end infrastructure is now only for the first $100 million brought in by them, not for their total investment.

(Source: the Financial Express)

P-notes investment at 11-month low in June

Investments into Indian shares through participatory notes (P-Notes), a preferred route for high net-worth individuals (HNIs) and hedge funds from abroad, hit an 11-month low of Rs. 1.47 lakh crore (about $25 billion) in June.

According to the latest data released by the Securities and Exchange Board of India (Sebi), the total value of P-Note investments in Indian markets (equity, debt and derivatives) declined to Rs. 1,47,498 crore at the end of June after hitting a six-month high of Rs. 1.68 lakh crore in May.

According to the source, the June figure has reached the lowest level since July 2012, when the cumulative value of such investments stood at Rs. 1.29 lakh crore. P-Notes, mostly used by overseas HNIs, hedge funds and other foreign institutions, allow them to invest in Indian markets through registered Foreign Institutional Investors, while saving on time and costs associated with direct registrations.

(Source: the Financial Express, Business Standard)

India to be World's 3rd largest automobile market by 2016

The source said yesterday, India will become the third largest automotive market in the world by 2016 ahead of Japan, Germany and Brazil, riding on its domestic automotive sales, according to IHS Automotive, a global market information provider.

Although the economic growth vulnerability and lower sentiment resulted in market slowdown in 2012 and 2013, India is expected to regain strong growth trend from 2014 onward, said the Colorado-based firm."We expect that by 2016, vehicle sales would surpass Brazil, Germany and Japan making India the third largest market," IHS Senior Principal Economist Charles Chesbrough said.

The implications for auto demand are huge in India and the country has been moving along the penetration path. IHS said, as India develops, its citizens acquire wealth; demand for automobiles will increase as the need of personal transportation rises. "It may take a little longer in India because they do not have the infrastructure...but we know about the personal behavior as people gain wealth, they want freedom, ability to go where they want to go and when they want to go," Chesbrough said.

(Source: the Economic Times)

Karnataka revise IT policy for investment

In an effort to regain its old glory and attract fresh investment in the information technology sector, state of Karnataka intends to revise the IT Policy.
"We are stilly studying the current policy and revise it after discussing with the stakeholders and the industry," S R Patil, minister for IT, BT and Science and Technology said. The government aims to attract the global IT majors into the state and in this connection a road show will be held in China, Taiwan andUnited States among others.

He said, the government is also considering a move to offer an attractive incentive package besides land and infrastructure facilities to new investors in the state. And as part of the efforts to increase the export of IT from the present Rs. 1.35 lakh crore to Rs. 4 lakh crore by 2020, the government has drawn up a detailed roadmap.

The department of IT, BT and S&T has identified Mangalore, Mysore, Hubli-Dharwad, Belgaum, andGulbarga among others to promote the IT industry. The government has in its possession 2,000 acres inBelgaum and will acquire land in other cities.

"Infosys has already shown interest in setting up campuses in Hubli and Belgaum. We have already given them 50 acres at Gamanagatti area in Hubli and we are ready to offer them another 50 acres in Belgaum to them. We are confident of attracting other companies into secondary cities. We are talking with many of them," the minister said.

(Source: Business Standard)

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