สรุปข่าวเศรษฐกิจอินเดียประจำวันที่ 12 พฤศจิกายน 2556

$          5        factors helping Indian exports:

1.      Improved demand conditions in key markets: Conditions in the US and Europe are improving and the UK has done extremely well. Consumer confidence is returning to those markets, jobs data is positive all of which is helping trade grow.

2.         Weaker rupee to the aid: The rupee hit a 7 week low yesterday, and even as it has appreciated over 8% since the August all-time low of 68.85/$, the trend is expected to remain weak as taper concerns re-emerge and oil demand slips back into the market. This depreciation, while not good for the country’s import bill, has improved competitiveness of Indian exporters.

3.        Bangladesh, China orders redirected to India: Export competitiveness has been further aided by an appreciating Yuan and rising labour costs in China as well as diversion of orders from Bangladesh on account of wage protests in September 2013, and a factory accident in April 2013 according to India Ratings.

4.    Government measures help: The government had earlier this year also announced several export boosting measures like extension of its interest subvention scheme to boost textile and engineering exports, and reports suggest more measures are in the anvil with new items likely to be added to the focused market scheme (FMS) and focus product scheme (FPS) to expand these lists.

5.        FTAs have shown results: Notwithstanding the criticism of the finance ministry of the commerce ministry’s thrust on free trade agreements (FTA) with partner countries, the commerce minister claims free trade agreements have actually been helping Indian exports. Anand Sharma has said most of the regional/bilateral FTAs signed by India are either related to SAARC countries or to South East Asia and North East Asia.

(Source: Business Standard)

RBI waives 'No Objection Certificate' criteria for investment from NRI into finance firm

The Reserve Bank today waived the requirement of No Objection Certificate (NoC) with regard to share transfer from residents to non-residents where the investee company is in the financial services domain. On a review, it has now been decided that the requirement of NoC(s) will be waived from the perspective of Foreign Exchange Management Act, RBI said in a notification. However, it said "any 'fit and proper or due diligence' requirement as regards the non-resident investor as stipulated by the respective financial sector regulator should have to be complied with." As per existing norms, the NOCs are obtained from the respective financial sector regulators or regulators of the investee company as well as transferor and transferee entities. In a separate notification, RBI said, any authorisation such as Advance Authorisation (AA)/Duty Free Import Authorisation (DFIA) has be utilised for import of gold meant for export purposes only and no diversion for domestic use shall be permitted. It further said entities/units in the SEZ and EoUs, premier and star trading houses are permitted to import gold exclusively for the purpose of exports only.

(Source: Economic Times)

Finance Ministry expects $25 billion inflows via swap windows by Nov-end

The Finance Ministry expects inflows of $ 25 billion by November end through forex swap windows opened by the Reserve Bank to attract deposits from non-resident Indians and allow banks to borrow overseas. Until yesterday, the RBI had received $ 17.5 billion through the special windows for swapping foreign currency non-resident (bank) deposits and overseas foreign currency borrowings by banks. "Till November 30, our ( FCNR-B) window is open. We might even touch $ 25 billion," Economic Affairs Secretary Arvind Mayaram told reporters. Until yesterday, the RBI had received $ 17.5 billion through the special windows for swapping foreign currency non-resident (bank) deposits and overseas foreign currency borrowings by banks.

(Source: Economic Times)

Cheap loans scarce, firms rush for foreign bonds

As securing cheap term loans from banks has become difficult amid tightening regulations, Indian companies are turning aggressive in foreign bond markets. Traditionally, the foreign fund-raising route has been dominated by banks, which lend the funds raised to companies as term loans. Earlier, only top-rated investment grade companies participated directly in the foreign bond market, as these were able to raise funds at cheap rates. Largely, companies stepped into the bond market to raise long-term debt (of maturities exceeding five years), as short-term debt was available from banks (term loans). This year, Indian companies have raised foreign syndicated term loans worth $15.8 billion, against $17.6 billion in 2012. The trend of Indian companies scouting for cheaper funds abroad in both the bond and the term loan markets is likely to acquire greater momentum in the near future.

(Source: Business Standard)

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