สรุปข่าวเศรษฐกิจอินเดียประจำวันที่ 1 สิงหาคม 2556

New Definition of FDI
The government is set to change the definition of control in the foreign direct investment (FDI) policy. The new definition will seek to give more teeth to shareholder agreements or voting agreements; it would apply with prospective effect.

The new definition, which the Cabinet Committee on Economic Affairs is expected to approve on Thursday, will replace the existing one under the FDI policy, thereby aligning it with the Companies Bill and the view of the Securities and Exchange Board of India. After cabinet approval, the Reserve Bank of India will notify the new definition and repeal the earlier notification.
Under the proposed new rules, an Indian company will be considered a foreign entity if the majority stake is held by foreign investors or is foreign-controlled. Any investment by such a company will also be considered foreign investment. The new definitionwill help in "checking entry of indirect foreign investments into those sectors where there are sectoral caps", sources said.

(Source: Business Standard)

Indian FDI creates 30,000 jobs in Nepal
Indian investors, who pumped in FDI worth $3.25 million into Nepal, created employment opportunities for 30,000 youths in the country, according to Joydeep Majumdar, Charge de' affairs of Indian Embassy in Nepal.

Majumdar made the remarks while delivering a keynote speech at the Nepal-India business conclave here organised by Indian Embassy in association with Nepal- India Chamber of Commerce and Industries (NICCI).

"The extensive privileges, facilities and assistance extended by India to Nepal, coupled with India's own economic growth and a market of 1.2 billion people, could be instrumental in driving Nepalese economy towards high growth if these efforts are complemented by the Government of Nepal through renewed commitment, for improving the investment and business climate in Nepal," he said.

(Source: Business Standard)

Govt makes new port tariff norms
The shipping ministry on Wednesday announced a new set of guidelines for determining tariffs at major ports, under which ports are allowed to charge a maximum of 15% above the ceiling rate, which would be decided by the Tariff Authority for Major Ports (TAMP). However, the tariff revisions are applicable only for prospective projects, and not for the existing ones.

Under the new guidelines, TAMP would still have the powers to determine the tariffs based on the performance of individual ports. "Proposal for increase in tariff should be sent to TAMP, stating achievements in performance standards in the previous year. These should be certified by an independent engineer drawn from an approved panel," according to the guidelines. TAMP shall not consider a hike in tariff if the performance standards of a port are not achieved.

"This first phase of guidelines has taken some time for us to bring out. We are trying to bring out another set of guidelines so that the existing projects would also be benefited. But that will take some time," shipping minister GK Vasan said.

(Source: the Financial Express, Business Standard)

3% Interest rate subsidy for exporters
In a move to boost exports, the government on Wednesday raised the rate of interest on subsidy scheme for exporters to 3% from the current 2% and widened the coverage of the scheme to cover more sectors. The finance ministry provided additional funds of Rs.2, 000 crore for this, over and above the earlier allocation of Rs.1, 550 crore, which was mainly used to fund the last year's subvention demand of over Rs.1, 200 crore.

This assumes significance in the wake of India's merchandise exports declining 1.4% to $ 72.46 billion in the June quarter, besides showing the highest decline in eight months at 4.57% to stand at $23.78 billion in June.

"The rate of interest subvention from Thursday, which would be available to exporters, would be enhanced to 3%. The government is making available the required resources to clear all claims of the exporters and the provisions are being made to ensure that claims of the all the exporters are settled forthwith," said commerce and industry minister Anand Sharma. Besides, he has also called a meeting of Board of Trade (BoT) on August 27 to consider more steps to boost exports.

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

Chinese worker strike over Apollo takeover of US's tire
Nearly 5,000 Chinese workers at a Sino-US joint venture tyre manufacturer are on strike in protest at the American parent company's $2.5 billion takeover by an Indian firm, a union leader said on Wednesday.

Cooper Tire and Rubber announced last month that it would be taken over by Apollo Tyres of India, making the combined group the seventh-largest such firm in the world. But thousands of staff at Cooper Chengshan, a joint venture in the eastern province of Shandong, have walked out in protest.

The union wants to block the transaction, which saw Cooper shares leap on the New York stock exchange. Yue Chunxue, director of the Cooper Chengshan union branch, accepted that the ambitious demand might not be achievable. Employees have become increasingly vocal in China, with numerous labour disputes occurring in recent years. But the cause of the Cooper Chengshan strike is unusual, with protests normally focusing on pay and working conditions.

The strike began on July 13, Yue said, because workers were concerned Apollo Tyres will be unable to repay debt taken on in the highly leveraged acquisition, so that their interests could be at risk. "We oppose this purchase, first of all because Apollo does not have sufficient strength," he said, adding the USD 2.5 billion cost was mostly being funded through bank loans with annual interest of USD 100 million-USD 200 million. As a result worker wages and benefits could not be guaranteed after the purchase, Yue said. He also expressed worries about potential conflicts with new Indian bosses.

(Source: the Financial Express, Business Standard)

Economic Section
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