Daily Economic News - 29 April 2014

FMCG firms may be hit as rural incomes slow down

Rural consumers had become richer over the past few years thanks to big spends by the government on infrastructure projects, which created jobs, and employment guarantee schemes, which resulted in a sharp rise in wages. Moreover, the government increased support prices for crops, which drove up farm incomes. FMCG firms, as also makers of cars and two-wheelers, have reaped the benefits of higher spends in the hinterland and have come to rely heavily on rural catchments for revenues.

However, volumes in these markets have been tapering off in the last six to eight months, and the golden years for rural growth of 2009-12, when volumes grew 7-9%, are unlikely to return soon.

(Source: The Financial Express)

NRIs invest over $2 billion in Indian realty in 2013 on weak rupee

Riding on the back of a weak rupee and heightened promotions by developers to attract them at a time when domestic demand was weak. NRIs spent at least 35 per cent more on buying homes across the country in 2013 compared with the previous year and made for almost 12per cent of total apartment sales in the top seven cities.

According to the World Bank, India led remittance flows globally, receiving $70 billion in 2013. A large population of NRIs across the globe is from Gujarat. For an NRI, Indian property was at least 30per cent cheaper last year because of a combination of low prices and appreciating dollar against the rupee.

In Kerala, another state, which has a huge NRI base, almost 65per cent of home sales in 2013 were to NRIs, up from about 55per cent in 2012.

(Source: The Economic Times)

JSPL invests $800 million in Oman Steel Plant

Naveen Jindal's JSPL group has commissioned a greenfield 2 million tonne (mt) steel plant in Sohar, Oman at an investment of $800 million. The greenfield unit, part of Jindal Shaheed Iron & Steel, a wholly owned subsidiary of JSPL, is one of the largest steel plants in the Gulf region. With this, JSPL has gearing up to meet a substantial part of the shortfall in the North Africa and Gulf region, where steel demand is estimated at 12 million tonne per year.

The steel melting shop, using state of-art technology from Danielli Italy, is Oman's first and largest such unit and was commissioned in 23 months from the start of work at the site. 

(Source: The Economic Times)

India may not impose anti-dumping duty on solar power gear imports

The government may refrain from imposing anti-dumping duty on cheap solar power gear imports, as it tries to pin down the cost of renewable energy as part of a plan to cut India's dependence on fossil fuel.  The renewable energy ministry, which next month will decide on a dumping case filed by some domestic manufacturers, fears that the cost of solar power production will increase by at least Rs 1.6 crore per mw if anti-dumping duty is imposed on the imports, which are mainly from the US, China, Taiwan and Malaysia. 

Around 4,000 mw worth of solar projects have been tendered. Half of the projects are under The Solar Mission and almost all the state-level projects are built on imported content. They will get stuck when the prices go up if a dumping duty is imposed." India's National Solar Mission was announced in 2009 with the aim to generate 20 gigawatts of energy by 2022.

The plan will help cut rolling blackouts in Asia's third-largest economy where most of the power generation is coal-based.

(Source: The Economic Times)

European Union bans Indian Alphonso mangoes, veggies from May 1

The EU found some random fruitflies, in about 6% of the consignments sometime back in 2013. They told the Indian regulators, APEDA. The Indian side responded in August 2013, giving details of the improved systems and certification, which would come into effect from April 1. However, on 26th March, the EC took a decision to ban imports of all Indian mangoes, even as Indian authorities implemented the new systems from April 1. Importers in the UK say the fruitfly issue can be resolved by treating.

(Source: The Economic Times)

Government for discussion paper on royalty payment ceiling

Amid worries over a 50 per cent rise in royalty payments by Indian firms to their foreign partners or multinational parents in four years to 2012-13, the government is likely to bring a discussion paper for review of the present unbridled policy, after the Lok Sabha polls are over.

Until December 16, 2009, lumpsum royalty payments were capped at $2 million. For the cases where there were no flat rates, royalty payment for technological collaboration was capped at five per cent of domestic sales and eight per cent of exports. For use of a brand name, royalty could be paid at up to one per cent of sales and two per cent of exports. Till these caps were imposed, royalty payments could automatically be made by Indian companies to their foreign partners. Beyond these levels, approval of the Foreign Investment Promotion Board (FIPB) was required.

In 2009-10, about $4.44 billion was paid as royalty by Indian companies. This was 13 per cent of foreign direct investment (FDI) inflow into India that year. In 2012-13, Indian companies' royalty payments increased to $6.99 billion or 18 per cent of India's FDI inflows that year. These payouts have increased 57.43 per cent in the space of four years.

(Source: Business Standard)

Thaiindianet. Team

29 April 2014