สรุปข่าวเศรษฐกิจอินเดียประจำวันที่ 29 พฤศจิกายน 2556

Government to soon clear confusion over foreign investor tax regime

The Government will come up with a solution to clear the prevailing confusion around the tax regime for foreign portfolio investors (FPIs) in the next fortnight, a top Finance Ministry official said. FPIs are a new category of foreign investors introduced recently. The category has two sub-components - FIIs and qualified foreign investors (QFI) who can participate in the market directly or on an individual level. With a view to unify FIIs and QFIs, the Sebi had last month approved the FPI regime and announced formulation of the Sebi (foreign portfolio investors) Regulations, 2013. However, the Revenue Department was reportedly upset with the move as it required some changes in the existing laws, which was introduced in the last Budget.

(Source: Economic Times)

Cabinet defers decision on FDI in pharma, housing

The Cabinet today deferred decision on relaxing FDI norms for the housing sector and reducing foreign investment limit to 49 per cent in rare and critical areas of the pharma segment. The Department of Industrial Policy and Promotion (DIPP) has proposed to reduce FDI cap from 100 per cent to 49 per cent in the "rare or critical pharma verticals".  Several departments, including the DIPP, have raised serious concerns over continuous acquisitions of Indian drug makers by global multinational firms. According to sources, three categories have been proposed to define "rare or critical". It includes companies with five or more manufacturing units, and companies with 40 per cent or more market share irrespective of the total number of manufacturing facilities. The DIPP has also proposed incorporating conditions for foreign firms like mandatory investment in R&D and non-compete clause in the shareholders pact. India at present permits 100 per cent FDI in the pharma sector through automatic approval route in the new projects, but the foreign investment in existing pharma companies is allowed only through FIPB's approval. Regarding FDI in the housing sector, DIPP has proposed relaxing FDI norms including easing conditions for exit before the three-year lock-in period. It has proposed easing conditions for exit of foreign players before the three-year lock-in period.

(Source: Economic Times)

Trade deficit and CAD will come down this year: T C A Ranganathan

The turnaround in exports is because of India's diversification into new markets, especially Latin America, T C A Ranganathan, chairman and managing director of Export-Import Bank of India said in an interview. He mentioned that the rupee, undoubtedly, has helped exports. Growth has mainly come from oil exports, which have grown 16 per cent from April-October. Imports are coming down mainly due to gold. But there is no denying that the economy is also slowing down. Some imports have been shut off due to rupee correction, which means diversion has taken place from an importer to a domestic producer.

(Source: Business Standard)

India to take tough stand at WTO meet

With elections in mind, the Cabinet Committee on WTO-related matters, chaired by Prime Minister Manmohan Singh, has apparently given the mandate to Commerce and Industry Minister Anand Sharma to take a tough stand on India's strategy at the coming ninth WTO Ministerial Conference (MC9) in Bali, Indonesia. Although it has decided to agree to an interim measure that will remove the limit on food subsidies, it will seek "binding commitments" from developed countries to continue with the adhoc agreement until a permanent solution is fully achieved. It seems on the much controversial peace clause (PC) or due restraint clause under the chapter of Public Stockholding For Food Security Purposes, the government had decided to take a position wherein it would seek an interim measure until a permanent solution was achieved to remove the cap on food subsidies for farm support. But, the Cabinet decided that India will seek to get the PC immune from trade disputes also under the Agreement on Subsidies and Countervailing Measures (ASCM), which is not the case at present. Finally, the government has said until all these demands are accepted in Bali, it might not be able to grant its consent for the trade facilitation agreement (TFA) that sought to simplify customs rules globally, which was something that the developed countries were pushing for a long time.

(Source: Business Standard)

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