สรุปข่าวเศรษฐกิจอินเดียประจำวันที่ 3 พฤษภาคม 2556

RBI cuts repo rate by 25 bps, warns on inflation

The Reserve Bank of India (RBI) on Friday cut its key lending rate by a quarter of a percentage point to 7.25%, in line with expectations, while sounding a warning about inflation.

The Indian central bank has been cautious in relaxing its policy stance in the face of high inflation. India’s wholesale price inflation exhibited a steadily easing trend throughout the fiscal year to March, dropping below 7% in February and allowing the RBI headroom to cut rates. Core inflation, which excludes volatile food and fuel prices and is one of the key factors that determine the RBI policy stance, has also dropped significantly.

CPI inflation stayed in double digits for most of last fiscal, negating the benefit of slowing wholesale price inflation and adding to RBI’s dilemma on the course of monetary action amid a slowdown in economic growth. CPI was 10.39% in March. RBI will announce its mid-quarter review of monetary policy on 17 June.

(Sources: Reuters India, Livemint, Times of India, Business Standard, India Today)

Apollo Tyres sets up second exports hub in Thailand

Apollo Tyres yesterday said it has set up its second exports hub in Thailand to cater to the ASEAN region, which contributes 40 % to the company's overseas income.

After Dubai for the Middle East region, this is the second hub outside the company's operations in India, The Netherlands and South Africa, it added.

"The ASEAN region has gradually become one of Apollo's strongest export markets out of India, accounting for more than 40 % of exports revenue," the statement said.

The contribution of the ASEAN region to the total exports revenue of the company out of India has doubled in the last three years, it added.

Exports out of India are projected to grow at a double digit rate in the next few years. The size of the commercial vehicle tyre replacement market in ASEAN is 6 million units a year.

(Sources: Economic Times, Indiatimes, Business Standard, Hindu Business Line)

Manufacturing PMI lowest since Nov ’11

Manufacturing activity slumped to its lowest since November 2011, a private survey showed on Thursday, raising hopes that the RBI may go even beyond the expected 25 basis point cut in policy rates on Friday to stimulate the economy.

The HSBC Manufacturing Purchasing Managers' Index (PMI) dropped to 51.0 in April from 52.0 in March.

(Sources: Economic Times, Indiatimes, Livemint, NDTV, India Everyday, Moneycontrol)

Government approves $ 573 million highway projects in West Bengal

The government today approved a $ 573 million road project in West Bengal under its flagship road development programme - National Highways Development Project (NHDP).

The project cost for 155 km stretch is estimated at $ 573 million including the cost of $ 167 million towards land acquisition, re-settlement and rehabilitation and other pre-construction activities.

This stretch is a part of East-West corridor envisaged under NHDP-Phase II, and is a vital link for connectivity to North East. The stretch will also help in uplifting the socio-economic condition of the region, besides increasing employment potential for local labourers.

(Sources: Economic Times, Indiatimes, Firstpost, Rediff News, i4u, Daily India News)

India growth story intact, will continue to grow faster on domestic demand: ADB President

Growth in emerging Asian economies, including India and China, is likely to remain robust and resilient even after the global crisis due to strong domestic demand, Asian Development Bank's new president Takehiko Nakao said.

Speaking on Thursday, ahead of the ADB's annual meeting, Nakao conceded that the current account surpluses in emerging economies had depleted to 2% from 10% because of the economic crisis.

Admitting that private sector has been a key contributor to Asia's economic boom and a powerful tool in the fight against poverty, he said there still remains considerable untapped potential for drawing on the entrepreneurship, talent and productivity in our region.

(Sources: Economic Times, Indiatimes, Indian Radios, News BCC, Daily India News)

CCEA paves way for IKEA's $ 1.93 billion investment plan in India

The government on Thursday cleared Swedish home furnishing major IKEA's $ 1.93 billion investment proposal, the biggest investment in single-brand retail sector after the government liberalised policy in November 2011.

IKEA, which has already been sourcing products from India over the last 25 years, initially plans to set up 10 furnishing and homeware stores over a period of ten years. Commerce and industry minister Anand Sharma called the decision a 'historic' one.

(Sources: Economic Times, Indiatimes, Hindustan Times, Smart Investors, Worldnews)

Economic Section

Royal Thai Embassy