สรุปข่าวเศรษฐกิจอินเดียประจำวันที่ 13 มกราคม 2557

Exports lose steam, deficit widens despite low imports

The recovery in exports that helped arrest the slide in India's external balances seems to have lost some steam with shipments rising at the slowest pace in six months in December, but the seventh successive monthly decline in imports, led once again by gold, helped contain the trade deficit to just over $10 billion. Exports rose 3.49 per cent in December from a year ago to $26.35 billion, data released on Friday showed, while imports fell 15.25 per cent to $36.49 billion, yielding a trade deficit of $10.14 billion compared with $9.22 billion in November. Gold and silver imports dropped 68.83 per centin December. The export number was softer on account of lower petroleum product shipments amid a planned refinery shutdown at Reliance Industries. The Indian currency strengthened to 61.9 to the dollar on the hopes that the current account deficit (CAD)is likely to be well below even the revised government forecast of $60 billion and that exports will pick up again. Freeing up fuel prices and imposing stiff curbs on gold imports aided by the timely revival of exports helped retrieve the situation with the current account deficit expected at around 2.5 per cent of GDP for the year, following the sharp narrowing of the trade deficit in the first nine months. Exports in the April-December period rose 5.94 per cent to $230.3 billion, while imports fell 6.55 per cent to $340.3 billion, leaving a trade gap of $110 billion compared with $147 billion in the year-earlier period. The government said exports would have been higher but for a scheduled shutdown of the Jamnagar refinery of Reliance Industries that depressed petroleum exports. Gold and silver imports in December recorded a 68.83 per cent decline in December to $1.77 billion from $5.6 billion last year, as against $1.05 billion in November. The government may ease curbs on gold imports given the sharp improvement in CAD.

(Source: Economic Times)

India Inc uninspired by modest export growth in December

Uninspired by export growth easing to 3.49 per cent in December, India Inc has asked the government to consider measures, including widening the scope of incentives, to help the country's outbound shipments expand at double-digit rates. India's exports grew 3.49 per cent in December to US $ 26.3 billion, while imports dipped 15.25 per cent. However, lower imports helped to narrow the trade deficit to USD 10.1 billion in December compared with USD 17.5 billion in the same period of 2012. Growth in exports was slower than in November, when outbound shipments rose 5.86 per cent. Commerce Secretary S R Rao said export growth slowed mainly because of a drop in petroleum exports. For the April-December period, exports aggregated USD 230.3 billion and imports US $ 340.3 billion while the trade deficit stood at US $ 110 billion.

(Source: Economic Times)

Rupee may have a weak start; yields likely to fall

The contraction in the Index of Industrial Production (IIP) could dampen the sentiments in the foreign exchange market on Monday, with the rupee's weakness. Dashing hopes of a recovery, the IIP contracted 2.1 per cent in November 2013, the lowest in six months. This was due to poor performance of the manufacturing sector and lower consumer goods output, particularly white goods. The rupee had ended strong on Friday at 61.91 a dollar compared to the previous close of 62.08. The Indian currency had opened at 62.01 and touched an intra-day high of 61.83 a dollar. The Consumer Price Index-based inflation hit 11.24 per cent in November 2013 against 10.17 per cent in the previous month. The Wholesale Price Index-based inflation for November 2013 was 7.52 per cent against 7 per cent the previous month. Government bond yields could fall this week as December inflation was expected to show an improvement. The yield on the 10-year benchmark government bond ended at 8.76 per cent on Friday against the previous close of 8.79 per cent.

(Source: Business Standard)

FDI in railways gets a green signal

The ministry of home affairs has finally given its green signal to the proposal of allowing foreign direct investment (FDI) in railways. The Cabinet Committed on Economic Affairs (CCEA) is expected to consider the proposal later this week. The department of industrial policy and promotion (DIPP) has been pushing for allowing FDI in railways since August last year. The government is also keen to have it passed before the elections. By the final Cabinet note, India will allow foreign players to invest only in construction and maintenance of railway projects, not in operations. As a result, 100 per cent FDI might be allowed in this case. Apparently, the final Cabinet note is to propose that up to 100 per cent FDI should be allowed in dedicated freight corridors and high-speed railway networks falling under the fixed-line category. And, up to 74 per cent should be allowed in the case of collaborations and joint ventures in other areas. The railways ministry seemed keen in getting FDI, especially in public-private partnership (PPP) projects. This is because domestic private players have shown little interest in this segment. Officials had earlier indicated that once the FDI proposal was cleared, foreign investors will be allowed to hold stake in special-purpose vehicles meant for PPP in construction projects. The move will also help the railways achieve its revenue target of Rs 60,000 crore through projects like construction of factories to manufacture locomotives and coaches. Currently, FDI is not allowed in railway transport other than mass rapid transport systems and component manufacturing. According to DIPP statistics, foreign equity flows in railway-related components between April 2000 and September 2013 stood at $368 million.

(Source: Business Standard)

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