สรุปข่าวเศรษฐกิจอินเดียประจำวันที่ 22 สิงหาคม 2556
Tata Steel eyes infra projects in Thailand
Tata Steel Thailand on Wednesday said it foresaw a high demand for its products due to the country's planned $70-billion investment in infrastructure projects. President Peeyush Gupta said if the ambitious infrastructure projects were approved, his company "will stand to gain as all these projects need steel and cement".
"We will have two and a half years worth of extra demand being created over a period of seven years," he said. Thailand plans to borrow 2.2 trillion baht ($70 billion) to finance four new high-speed train routes and extend mass transit lines in Bangkok.
(Source: Business Standard)
India, ASEAN close to economic pact
Commerce and industry minister Anand Sharma, who is in Brunei, participated in the ASEAN economic ministers (AEM) -India consultations.
In the meeting, the ministers took note of completion of legal scrubbing of India-ASEAN agreements on trade in services and investment.
They also endorsed the texts of these pacts for the required steps to be taken by the participating countries for the implementation of the agreements. ''This brings to the completion the Comprehensive Economic Partnership Agreement (CEPA) process between India and ASEAN,'' a statement said. Now the only formality remaining is formal signing of the pact.
During the ASEAN-India Commemorative Summit in December last year, India and the 10-nation Asean (Association of South East Asian Nations) had finalized the free trade agreement in services and investments. Both the sides had already implemented free trade pact in goods in 2011. The free trade pact after its implementation is expected to facilitate temporary movement of business people, including contractual service suppliers and independent professionals in accounting, architecture, engineering services, medical and dental, nursing and pharmacy, computer services and management consulting.
(Source: the Financial Express)
RBI measures fall flat, rupee slums to 64.54 a $
The Reserve Bank of India's (RBI's) measures to infuse liquidity and allow banks to reduce their mark-to-market losses failed to cheer the market on Wednesday. A weaker rupee pulled down stocks and exerted pressure on bond yields, over dollar demand and concern that the US might pare stimulus as early as next month, intensifying outflows and leaving the currency vulnerable to a current account deficit.
The Federal Open Market Committee, which published minutes of its July meeting late on Wednesday night, however, offered few clues on tapering of Fed's bond-purchase programme. The policymakers were "broadly comfortable" with Chairman Ben Bernanke's plan to start reducing bond buying later this year.
The rupee fell 2% to a new low of 64.54 a dollar, in spite of what traders said was sporadic central bank intervention in both spot and forward markets. The Indian currency saw sharp volatility against the dollar as it weakened by 151 paise during intra-day trade — much like the volatility last seen on November 24, 1997.
(Source: Business Standard, the Economic Times, the Financial Express)
June FDI rose 16% to $ 1.44 bn
Foreign direct investment (FDI) into India increased by about 16% year-on-year to $1.44 billion in June. According to a senior official in Department of Industrial Policy and Promotion (DIPP), during April-June period of the fiscal, foreign direct investment into the country grew by 22% to $5.39 billion from $4.42 billion during the same period of previous year.
The sectors that received large FDI inflows during the first quarter of the fiscal include pharmaceuticals ($1 billion), services ($945 million), automobile industry ($ 515 million) and computer software and hardware ($171 million), the official said. The maximum FDI during the quarter came from Singapore ($1.85 billion), followed by Mauritius ($1.09 billion), Germany ($510 million), the Netherlands ($408 million) and the US ($315 million).The official added that recent steps taken by the government are helping in improving the investment environment in the country.
The government has liberalized FDI policy in as many as 12 sectors which include telecom, tea and petroleum & natural gas. FDI inflows in 2012-13 aggregated $22.42 billion, a decline from $36.50 billion in 2011-12. India is estimated to require about $1 trillion between 2012-13 to 2016-17 to fund infrastructure such as ports, airports and highways to boost growth.
(Source: the Financial Express, the Economic Times)
Auto, pharma firms set to get major tax relief
Automobile and pharmaceutical companies are set to get a major relief in their tax liability as the revenue department has decided to make it binding on tax officials to honour the potential costs of warranty and litigation as a deductible expense while calculating their total income.
The move is seen as an attempt to reduce litigation and provide certainty to taxpayers.The Tax Accounting Standards (TAS) finalized by the revenue department would prevent officers from disallowing the provision made for potential cost of warranty or litigation as a deduction, holding them as notional items.
There have been many instances in the automobile and consumer durables sectors, where companies such as Hyundai Motor India, Maruti Suzuki India and Carrier Airconditioning & Refrigeration were disallowed the provisions made for meeting the potential cost of warranty, saying such expenses cannot be allowed until these have actually been incurred.
(Source: the Financial Express)
India tries putting a brave face in front of global financial bodies as rupee tanks
As global factors take a toll on the Indian economy, the government on Wednesday worked out a strategy for increasing its engagement with multilateral institutions and assured that measures taken to contain the current account deficit (CAD) would yield results.
In a meeting with Finance Minister P Chidambaram, India's executive directors at the World Bank, International Monetary Fund (IMF) and Asian Development Bank (ADB) discussed a long-term strategy for a greater degree of interaction with the government.
The government means business—was the broad message given at the conference. In a session on "Indian Economy", all issues currently affecting the economy and the measures taken by the government to manage the situation were broadly discussed. The finance ministry made the executive directors and their advisors aware of various measures the government has taken in the last one month. The measures to restrict capital outflows have been perceived as capital controls by the ministry. The content, implication and rationale behind these measures were explained to India representatives at multilateral institutions.
The strategy for engagement with other international bodies like G20 and regional groupings like Saarc and Asean was also discussed. The approach to develop various projects, too, was discussed in the meeting which was also attended by representatives from the private sector.
(Source: Business Standard)
Economic Section
Royal Thai Embassy
