Turning a new chapter in its relationship with Canada, India on April 15 clinched a multi-million-dollar deal for uranium to power its civilian nuclear programme for five years and also inked 13 agreements on skill development as Prime Minister Narendra Modi after talks with Prime Minister Stephen Harper sought Canada’s “cooperation and investment in every area of India’s national development priority”. Modi said the bilateral “relationship had drifted in the past”. Modi said Canada has the potential to be a partner in India’s economic transformation and assured a “new environment in India, which is open, predictable, stable and easy to do business in”. The highlight of the agreements was the $350-million uranium deal that was signed by Cameco and the Atomic Energy Commission of India in the presence of Modi and Harper. It marked a new chapter in India’s ties with Canada, which had imposed sanctions on India after its nuclear tests. Under the deal which runs through 2020, Cameco will supply 7.1 million pounds of uranium concentrate to India. Welcoming the deal which has been reached after protracted talks, Modi said at a joint press conference with Harper: “The agreement on procurement of uranium from Canada for our civilian nuclear power plants launches a new era of bilateral nuclear cooperation. It also reflects a new level of mutual trust and confidence.” Announcing visa on arrival for Canadians, Modi said his government wants to promote people-to-people contacts between the two countries. Canadians can apply online and will be eligible for visas for 10 years. Modi said India and Canada have complementary interests. “India offers immense opportunities for Canada. Canada has the potential to be India’s key partner in many sectors, including energy, manufacturing, skills development, research, education, and his smart city project,” Modi said. Apart from this, a number of agreements were signed following talks between the two leaders. These are in the areas of civil aviation and space, skill development and higher education. In his remarks, Harper said: “Your visit indicates the strong friendship between Canada and India. This is a growing relationship. Trade potential between our countries is enormous.” Lauding Modi for undertaking economic reforms and his “minimum government, maximum governance” mantra, Harper said: “The historic visit by Prime Minister Modi to Canada combined with the number and scope of agreements signed between our governments clearly demonstrate the commitment of both countries to taking bilateral relations to new heights.” Modi said both leaders were “absolutely committed to establish a new framework for economic partnership” and that both have “made rapid progress on long pending agreements”. He said he was confident that the Bilateral Investment Promotion and Protection Agreement can be signed “very soon” and that both sides will implement the road map to conclude the Comprehensive Economic Co-operation Agreement by September 2015. Modi said both sides have agreed to deepen cooperation to combat terrorism and extremism. “We will also promote a comprehensive global strategy, and consistent policy and action against all sources of terrorism and its support.” Both sides have also agreed “on the need to enhance our defence and security cooperation”, said Modi. “I believe that Canada is a major Asia Pacific power and should play a more active role, including in regional institutions, in promoting a stable and prosperous future for the region,” he said. Earlier, Modi in an oped in The Globe and Mail said he hoped to make the visit “a springboard” to take the bilateral partnership in trade, investment and innovation to a new level and also that both sides would resume commercial cooperation in civil nuclear energy. In the morning, he was accorded a ceremonial welcome with full military honours. He arrived in the Canadian capital on Tuesday evening on the final leg of his three-nation tour from Germany and earlier France. The prime minister, welcomed by his Canadian counterpart Harper, was given a gun salute and also inspected a guard of honour. Modi also met Canadian Governor General David Johnston at the latter’s official residence, Rideau Hall.
Modi seeks strong partnership between Indian Lion, German Eagle
Prime Minister Narendra Modi on April 14 wooed German business, assuring an open and stable environment in India to give a fillip to his ‘Make in India’ initiative, and said there could be a strong partnership between India’s Lion and Germany’s Eagle. Modi also pushed for UNSC permanent membership for both countries, saying they have “earned the right”. Addressing the media after talks with German Chancellor Angela Merkel, he said “I believe that there will be a strong partnership between the King of the Earth, Lion and the King of the Skies, the Eagle.” Referring to his last visit to Berlin, when Air India One had stopped at Berlin enroute to Brazil for the BRICS summit in July, Modi said: “When I last came to Berlin, Germany was successful in winning the World Cup Final. This time in Berlin, I feel that we will also be successful in taking the strategic partnership between India and Germany to new heights.” Modi’s stopover at Berlin clashed with the FIFA World Cup final. Merkel chose to watch the final, which Germany won after many years, over a meeting with Modi. “My objective of coming to Germany was not only to invite the German industry to India, but to assure them that they would find an open and stable environment, which would be easy to do business in; and that they will have my full support to invest and work in India,” he said. Referring to the India-EU Free Trade Agreement, Modi said he has requested Merkel that India and EU “should resume the negotiations quickly and conclude a balanced and mutually beneficial agreement at the earliest”. He also proposed that both sides should increase cooperation in advanced technology and defence manufacturing. On terrorism, Modi said: “We need a comprehensive global strategy to deal with this global challenge, in which India and Germany can work together.” He also proposed that both cooperate in the areas of maritime, cyber and space security. “Earlier when we used to talk about terrorism, people used to say it is a law and order problem. Now they have realized how big a threat it is,” he said. In an apparent reference to Pakistan, Modi said: “Pressure should be created on governments who give shelter to terrorists. If we can make this effort and isolate terrorists and people supporting terrorists...” He also pitched for the United Nations to pass a resolution defining terrorism. “There is a proposal pending for a long time where there is a need to define terror. I would request the United Nations to pass the resolution and define terror. Only then we can unite people opposing terrorism,” he said. On permanent membership in the UN Security Council, Modi said: “It is my belief that India and Germany are two countries that have earned the right to be permanent members of the UNSC. Our membership will also be beneficial to the world. We both would like to see tangible progress in the United Nations Security Council reforms during the 70th Anniversary year of the United Nations.” Answering a query later about UNSC reforms, Modi regretted that India was yet not a member of the council though the United Nations will complete 70 years of its formation. Noting India had never attacked any other country and was the land where Gautam Buddha and Mahatma Gandhi were born, he said that “after formation of the UN, India is among the countries that has contributed the most to peacekeeping efforts and its contribution has been lauded”. The joint statement referred to cooperation in the field of skill development, urban development, including in smart cities, railways, Ganga cleaning, renewable energy, education and science and technology. “We agree that we strengthen our efforts towards carrying on negotiations for an ambitious EU India Free Trade Agreement with a view to its early conclusion. “Our discussions in Germany have established a robust road-map for expanding our multi-faceted and mutually beneficial ties. We are confident that this will receive a further boost during the visit of the German Chancellor to India for the 3rd Inter- Governmental Consultations,” it said. Earlier, Modi was accorded a ceremonial welcome at the Federal Chancellery where the chancellor was also present. Later, Modi attended a working lunch hosted by her after which the two leaders held bilateral talks. Modi later visited the Berlin Hauptbahnhof, the main railway station in Berlin. He later left for Canada on the final leg of his three-nation tour which began in France.
India is better country today for foreign investors: Modi
Prime Minister Narendra Modi, who has invited global companies to invest in India, continued his pitch at the grand industrial fair here on April 13, this time listing what exactly makes the country an attractive destination. Inaugurating the India Pavilion and a business summit at Hannover Messe with German Chancellor Angela Merkel, Modi said the 10 months of his government has put an end to the retrospective tax regime, eased the regulatory environment, fast-tracked approvals and encouraged innovation and entrepreneurship. “All this is a historic opportunity for German companies. You would already be knowing the direction of my government and the steps we are taking. We have committed ourselves for creating and improving the business environment. “I can assure you that once you decide to be in India, we are confident to make you comfortable. “You will be able to see for yourself the winds of change in India. We are very keen to develop the sectors where you are strong. We need your involvement. The scope and potential, the breadth and length of infrastructure and related developments is very huge in India.” India is the partner country this year at the world’s largest industrial fair here. “Indo-German partnership should and will flourish. Participation at Hannover Messe will be beneficial for both sides,” the prime minister said. Hannover Messe, which exists since 1947, normally has around 6,000 exhibitors and about 200,000 visitors over a one week period. At the inaugural, India showcased its ‘Make In India’ prowess, which left the German chancellor rather impressed. “I’ve never seen a vibrant show like this. It brought alive India’s civilization, culture and technology,” Merkel told Modi as they walked around the India Pavilion. India was last partner country in 2006, while the Indian business participation this year has 350 companies taking part. Heads of several leading companies will be present, including Tata Group chairman Cyrus Mistry and Infosys’ Vishal Sikka. Modi’s entourage to the fair comprises five union ministers and three chief ministers. Eighteen Indian states are taking part in Hannover Messe. India is very much present in Germany these days through the lion logo representing the ‘Make in India’ campaign unfurled all over the country, at airports and other public places. “The symbol of the lion has been carefully chosen. The lion cannot be stopped, like our journey cannot be stopped, that too by our own rules,” Modi said. “There is more potential in Indo-German economic collaboration. Our economic partnership is not as much as what both nations would like to have,” he added. Germany is the eighth-largest foreign direct investor in India. German FDI in India during the period 1991-2014 was valued at $7.57 billion. Germany is also India’s largest trading partner in the European Union, with bilateral trade amounting to some 16 billion euros in 2014. In an Op-Ed piece in German newspaper Frankfurter Allgemeine Zeitung on Monday, Modi said that through “our ‘Act East’ and ‘Link West’ policy, India has the potential of becoming the middle ground for East and West as a manufacturing hub that serves both our vast domestic market and becomes a base for global exports and general well-being”. “I visualize India as a key engine of global growth. Our democratic principles and practices are guarantors of stability. We have a free media and an independent judiciary that allows all opinions to be aired without fear.”
World Bank pegs India’s growth at 8 percent next fiscal
The World Bank has forecast India’s growth accelerating to 8 percent in the next fiscal and said the country is well-placed in a region that has not only logged the highest economic expansion but would benefit the most from cheaper oil bill. According to the bank’s South Asia Economic Focus report, which is released twice a year, the exports sector in the region remains a cause for worry, even as the lower oil import bill should trigger a complete revamp of fuel subsidy regime. The new projections come soon after host of agencies and organisations expressing renewed confidence on the Indian economy. International credit rating major Moody’s revised India’s sovereign ratings outlook to positive from stable, while Fitch reaffirmed its stable outlook on India. The think-tank of rich nations, the Organisation for Economic Cooperation and Development (OECD), also endorsed high growth prospects for India. Similarly, the Asian Development Bank (ADB) has also projected the country’s growth at 7.8 percent in 2015-16 and at 8.2 percent in 2016-17. World Bank South Asia Chief Economist Martin Rama said the biggest oil price dividend to be cashed in by South Asia is one yet to be earned. But it is not one that will automatically transit through government or consumer accounts, he said, commenting on the latest findings of the report. “Cheap oil gives the opportunity to rationalize energy prices, reducing the fiscal burden from subsidies and contributing to environmental sustainability,” he added, even as India’s oil import bill for February this year, the latest period for which data is available, shrank by more than 55 percent over the corresponding month of last year. The World Bank said India’s GDP (gross domestic product) growth is expected to accelerate to 7.5 percent in fiscal 2015-16. “It could reach 8 percent in fiscal 2017-18, on the back of significant acceleration of investment growth to 12 percent during (FY2016-FY2018),” the economic focus report said. “The country is attempting to shift from consumption - to investment-led growth, at a time when China is undergoing the opposite transition.” Since the fall in crude oil prices from mid-2014, the finance ministry has estimated that the subsidy burden on account of oil for the year 2014-15 will be around Rs.80,000 crore. With the steep fall in oil prices the subsidy burden has been projected to come down from a high of Rs.1.39 lakh crore for 2013-14 to around Rs.80,000 crore in 2014-15. The steep fall in the oil prices has also allowed the three-state owned petroleum products retailers to pass on the benefit of cheaper prices to consumers. The retailers have been allowed by the government to fix the prices of petrol and diesel prices as per international prices. The three oil marketing companies (OMCs) have been revising rates on the 1st and 16th of every month based on the fortnightly average of international oil prices and the rupee-dollar exchange rate. The country’s oil imports during April-February, 2014-15, totalled $130.84 billion, down 12.24 percent from the corresponding period of the previous fiscal.
India assures foreign investors of a modern tax regime
India’s Finance Minister Arun Jaitley has assured foreign investors that the government of Prime Minister Narendra Modi was working on a more modern tax regime as part of ongoing reforms to increase investment and reduce regulations to realise double-digit growth. “In order to realise double-digit growth we need to undertake a number of reforms to increase investment and reduce burdensome regulations. Key among them are taxes,” Jaitley said in a speech at the Peterson Institute for International Economics in Washington. Spelling out a tax vision for India at the leading think tank on international economic issues, Jaitley said he believed that with the reforms underway in India, “we are well on our way to having one of the more modern tax systems in the world.” Noting that India, “one of the bright spots in the economy”, is attracting the attention of investors and policymakers around the world because of its rising growth prospects, he acknowledged investors’ concerns about tax related issues. Outlining various reforms undertaken by the Modi government, Jaitley said, “Fundamentally we have restored faith in government and its ability to push the Indian economy toward the path of sustained double-digit growth.” Spelling out his vision of a modern 21st century tax system for India, Jaitley said the Indian Parliament will pass a bill in the coming three weeks to implement Goods and Services Tax (GST), a consumption-based value-added tax. It would, he said, create a broad tax base, strengthen revenues going forward, increase the tax-GDP ratio, promote transparency, reduce corruption and go toward creating an Indian common market because it will replace a number of state-levied taxes. India’s direct tax system needs to catch up with the modern GST system, said Jaitley noting, “Currently we have in some ways the worst of both worlds: high marginal corporate taxes (35 percent) but low effective collection (22 percent).” “We create the perception of a high tax country and yet do not collect commensurate taxes,” he said. “We need to change this to promote investment and growth. At the same time we need to create incentives for savings.” A long standing demand of the US financial services industry, for allowing foreign investments in alternative investment fund (AIF) structured has been introduced in this year’s Budget, he said. To simplify procedures for domestic companies to attract foreign investments, the budget does away with the distinction between foreign portfolio investments (FPI) and foreign direct investments (FDI), and replace the separate ‘carveouts’, Jaitley said. “This move is expected to attract more portfolio flows in the near to medium term in debt as well as equities,” he said. “To promote offshore funds, it has been proposed that the activity carried out through an eligible fund manager located in India shall not constitute a business connection for being taxed in India.” This clarification will help in relocation of fund managers in India, from Singapore and other such destinations, he said. Turning to foreign investors’ “concerns about retrospective taxation, tax harassment, unpredictability and arbitrariness in tax administration,” Jaitley held out an assurance “that we are absolutely committed to a transparent and predictable tax regime.” “There will be no retrospective actions and we will see taxpayers as partners not as potential hostages or victims,” he declared.
Modi pitches for Canadian investment, connects with diaspora
Prime Minister Narendra Modi on April 16 pitched for investments for India as he met Canadian bankers and pension fund managers, winding up his three-nation tour before flying back home on April 17. The Canadian businesspeople conveyed to Modi that demand to do business with India has gone up exponentially and India was now on top of their list. Canada is the last leg of Modi’s three-nation tour, during which he has pushed the ambitious “Make in India” initiative and signed several agreements, including a deal on the supply of uranium to power India’s civilian nuclear programme. In the Canadian capital Ottawa, India’s National Skill Development Corporation (NSDC) on Wednesday signed 13 memoranda of understanding with 12 Canadian educational institutions, including nine colleges, NSDC said in a statement. On Wednesday evening, Modi connected with thousands of cheering Indians at a rock-star event at the Ricoh Coliseum in Toronto as he promised to “clean up” the “dirt” left behind by the previous government and said there is new atmosphere of trust in India. People cheered when Modi, while referring to his mission to clean India and root out corruption, said in Hindi:”Jinhone gandgi karni thee, woh kar ke chale gaye. Lekin hum safai kar ke jayenge (Those who created scams and dirt have now gone, we will clean up the mess”). Modi was accompanied by Canadian Prime Minister Stephen Harper on the stage. In a repeat of the Madison Square Garden event, Modi had the crowd in raptures. In an around-hour-long speech in Hindi, amid chants of “Modi, Modi” by the crowd, he said that the new government has brought about a change in the people’s mindset. The prime minister drew the loudest applause when he said his mission is “Skill India while theirs was Scam India”. There were rounds of cheers every time he took a dig at the previous regime. The prime minister wondered why the likes of Google and Microsoft cannot be created in India when Indian IT specialists are playing an important role in these tech giants. “We have undertaken to promote innovation in India through the Atal Innovation Mission and skill development through our Skill India mission,” he said. Modi, who earlier travelled to Germany and France said the two biggest achievements of his visits were the signing of a deal in France for manufacturing nuclear reactors in India and the supply of uranium from Canada. “These two agreements will help India become a big contributor to clean energy in the world.” Lauding the Indian diaspora in Canada, Modi urged them to contribute to their ancestral land. The OCI and PIO cards have been merged and the new OCI card will be for life and available to people of Indian origin up to their fourth generation, the prime minister said. Earlier, Canadian Prime Minister Stephen Harper introduced Modi to the gathering. “Under your leadership, Canada feels closer to India than any time before,” Harper said. “We had extended a hand of friendship (to Modi) long before others,” the Canadian leader said, referring to Canada’s participation in the annual Vibrant Gujarat summit launched by Modi as chief minister in 2003.
Now Moody’s, Economist project higher growth for India
The bullish projections for the Indian economy continue. A week after it revised its outlook on India to positive from stable, global ratings major Moody’s pegged the country’s growth at 7.5 percent for 2015, while the Economist Intelligence Unit said a 7.1 percent expansion will be sustained over the next four years. “India’s economy is on a cyclical upswing. Forward looking indicators suggest domestic demand is gathering momentum,” said Faraz Syed, associate economist, Moody’s Analytics, on Friday. According to the ratings agency, low inflation rate has enabled the Reserve Bank of India (RBI) to cut interest rates by 50 basis points in early 2015 which has helped in easing pressure on the private sector. “Lower rates as well as the government’s infrastructure and disinvestment programs should provide a boost to domestic-oriented industries,” said Syed. The RBI had cut its repurchase rate by 25 basis points on January 15 and on March 4. However, RBI Governor Raghuram Rajan, who conducted the first bi-monthly review of the monetary policy for the current fiscal year on April 7, decided to retain the policy rates. The RBI made it clear that it will cut interest rates further only if it sees more robust containment of prices and commercial banks lowering the cost of housing, auto and corporate loans. “Since most banks didn’t reduce their lending rates until recently, the full impact of the rate cuts will probably be felt in the second half of 2015. Thus, consumer spending likely will get a bigger boost later this year,” Syed said. Rajan has projected a 7.8 percent growth for the current fiscal year, subject to a normal monsoon. The Economist Intelligence Unit’s (EIU) latest global forecast has pegged India’s growth annual growth to clock 7.1 percent over the next four years. It said that the Indian economy is strengthening, off the back of lower oil prices, which has eased structural problems with high inflation. “In its first full budget, for fiscal year 2015-16 (April-March), the government pledged more money for much-needed roads and railways and cut some red tape for entrepreneurs,” EIU’s global forecast said. “It (government) relaxed slightly some fiscal deficit targets and increased spending on welfare. All of these moves are positive, but are no more than incremental improvements,” the forecast added. Meanwhile, Moody’s analysis further suggested that the country’s first quarter GDP (gross domestic product) growth will be around 7.3 percent on a year-on-year basis. The growth projections come soon after Moody’s had revised India’s sovereign ratings outlook to positive from stable. Another ratings agency Fitch had reaffirmed its stable outlook on India. The think-tank of rich nations, the Organisation for Economic Cooperation and Development (OECD), also endorsed high growth prospects for India. Similarly, the Asian Development Bank (ADB) has also projected the country’s growth at 7.8 percent in 2015-16 and at 8.2 percent in 2016-17. On April 14, the World Bank had forecast India’s growth accelerating to 8 percent in the next fiscal. The ratings agency further noted the government’s disinvestment plans as being a significant instrument in raising funds for infrastructure creation. “Funds raised from disinvestments will be spent on developing India’s ailing infrastructure. If revenues fall short, we expect the government to cut expenditure to meet its 3.9 percent deficit target for 2015- 2016,” Syed said. “Lower government spending is a downside risk to our forecast over the coming year,” Syed added. For 2015-16 fiscal beginning April, the government has budgeted to collect Rs.69,500 crore through public sector disinvestment. Recently, approximately 5 percent of the Rural Electrification Corp. was sold in early April. The share issue stood oversubscribed by 553 percent. Moody’s said that the India’s current account deficit (CAD) is expected to remain steady in 2015 thanks to lower oil and gold prices. India’s CAD came down to $8.2 billion -- or 1.6 percent of the gross domestic product -- in the third quarter ended December 2014. With the steep fall in oil prices the subsidy burden has been projected to come down from a high of Rs.1.39 lakh crore for 2013-14 to around Rs.80,000 crore in 2014-15. EIU’s forecast gave a similar view on benefit of lower crude oil prices for the Indian economy and the Indian currency. “Oil will continue to exert an influence over emerging-market currencies: those of large producers such as Russia have suffered significant depreciations, while those of importers such as India have shown much more resilience,” the EIU’s forecast added.
India’s ability to absorb economic shocks is stronger: Jaitley
With the vast depth and size of its market, India’s ability to absorb international shocks is far stronger as reflected in the rupee remaining relatively stable, Finance Minister Arun Jaitley has said. “International factors obviously have an impact. Considering the vast depth and size of the Indian market...Our ability to absorb those shocks is far stronger,” Jaitley said when asked about the level of risk from the external environment given that the US Federal Reserve is poised to start raising rates this year. “Even in the past, when international trends have been far more volatile, our dependence on our own domestic markets has made us relatively more stable than ever, and I won’t call it threats or risks -- if we continue with our own internal ability to carry on with our own reform process, is our strength,” he said. “As long as we continue that, our ability to absorb various international possible scenarios would be reasonably high,” Jaitley said in response to the question at the Peterson Institute for International Economics. Jaitley said by and large, the strength of the Indian economy is also reflected in the fact that the rupee has remained relatively most within the stable range. “We do believe that the rupee will find its real value, or real strength in the international currency market, even when several currencies did face a serious challenge recently,” he said. “It’s been relatively more stable, even relationship with the dollar, with regard to most other currencies, it has strengthened in comparison,” he added. Talking about disinvestment, Jaitley said in terms of quantum of disinvestment public privatisation, the current government is way ahead of any government in the past. “In the year just concluded, my disinvestment target is the largest ever divestment in Indian history, and this year is going to be much more, if not twice as much as the last year,” Jaitley said in response to a question. “Therefore, certainly strategic disinvestment in some cases is a part of my agenda,” he said. “Which are the companies I choose for it, we make this decision known at a later stage, but in terms of quantum of disinvestment public privatisation, we are way ahead of any government in the past,” Jaitley said.
India to see investment, consumption powered growth: IMF
Growth is expected to pick up in India due to increased investment and consumption but the country needs to tackle land acquisition issues and poor bank credit growth for it to live up to the expectations of being the ‘new bright spot’ in Asia, the International Monetary Fund (IMF) said on April 17. India’s growth is likely to strengthen to 7.5% in 2015 and 2016 (from 7.2% in 2014), benefitting from recent policy reform announcements and lower oil prices (India, being a net oil importer), Changyong Rhee, IMF’s director of the Asia Pacific department said. He added that early implementation of the reforms will reinforce confidence and increase potential growth. Gradual fiscal consolidation would strengthen resilience in India and other Asian countries where debt is high, he said, adding that decline in oil prices provides an opportunity to phase out subsidies to make room for infrastructure and social spending. Kalpana Kochhar, Deputy Director in the Strategy, Policy and Review Department of the IMF, said growth in India would come from investment proposals already approved by the government in addition to increased consumption, but the fall in bank credit growth (at 12.6% in 2014-15, the lowest since 1995-96) and high non-performing assets ratio of banks (likely to rise from 4.5% in December 2014 to 5.7% by March 2016) are areas of concern. Meanwhile, the Reserve Bank of India governor Raghuram Rajan said he was hoping for at least 10 years of massive infrastructure spending in India for the country to be in the high growth trajectory. “We (India) need to ensure better financing of infrastructure projects,” he said. Rajan, however, added that it was also important to ensure that land acquisition is done the right way. There have been some instances where land acquisition by stealth had led to opposition from farmers and in turn creating opportunities for politicians to exploit the sensitive issue, he said. Recently, the controversial land acquisition ordinance was re-promulgated even as the opposition parties and farmers are protesting the amendments proposed by the Modi government to the land acquisition Act including doing away with the provision for obtaining consent of 80% of the affected people prior to acquisition as well as doing away with the social impact assessment clause. On other suggestions to ensure a sustained high growth, Rajan said it was important to ensure that domestic demand is the main driver of growth rather than solely depending on an export-led growth strategy. “By all means we should export more, but there is a large internal market and we should develop it,” Rajan said, adding that the major growth areas include services sector, especially those that are technology-based.
Foreign fund inflows cross Rs 83,000 cr this year
Foreign Portfolio Investors (FPIs) have bought shares worth Rs 2,984 crore till April 17 this month, while they infused Rs 1,043 crore in the debt markets, taking their net investment to Rs 4,027 crore (USD 645 million), as per the data compiled by Central Depository Services Ltd. With overseas investors pumping in over Rs 4,000 crore in the Indian capital markets so far this month, total foreign fund inflows have reached Rs 83,000 crore since the beginning of the year. Analysts expect the inflows to accelerate further in view of clearance of reform bills for insurance, coal and mining, as also on assurances on controversial issues like General Anti Avoidance Rules (GAAR). Foreign Portfolio Investors (FPIs) have bought shares worth Rs 2,984 crore till April 17 this month, while they infused Rs 1,043 crore in the debt markets, taking their net investment to Rs 4,027 crore (USD 645 million), as per the data compiled by Central Depository Services Ltd. This has taken their total net investment in the country’s capital markets (equity and debt segments) so far in 2015 to Rs 83,002 crore (about USD 13.4 billion). Market participants attributed the robust inflows to positive investor sentiment driven by several reform measures announcement by the government. Finance Minister Arun Jaitley announced a slew of measures to attract overseas investment in the country in the his Budget for 2015-16. Besides, he has deferred the controversial GAAR by two years to soothe investors’ nerves, saying its immediate applicability can create “panic” in markets. The net inflows by overseas investors in debt markets stood at Rs 1.59 lakh crore in last year 2014, while the same for equities was Rs 97,054 crore. Overall, the net investment by foreign investors stood at Rs 2.56 lakh crore last year.
European energy firms show interest in Himachal
CINK Hydro Energy, a Czech Republic-based company, has showed interest in investing in Himachal Pradesh hydropower plants, while Provotek of Germany has proposed to commission a wind energy manufacturing facility in the state, a statement said on April 14. A delegation of the state government officials led by principal secretary for industries R.D. Dhiman is currently visiting Germany. A delegation of 15 industrialists from the state is also there to explore business opportunities and joint ventures. Prime Minister Narendra Modi and German Chancellor Angela Merkel visited the Himachal Pradesh Pavilion at the ongoing Hannover Messe in Hannover, Germany, on Monday.
Google, Facebook, Twitter to gain from growth of eCommerce in India: UBS
Logistics infrastructure constraints and low credit card penetration have been unable to slow the rising pace of eCommerce in India. According to reports, the Internet & Mobile Association of India (IAMAI) estimates the Indian eCommerce market to be currently worth $16 billion. However, the pace at which most of the companies in the eCommerce space have been able to raise money has often sparked off a debate regarding the viability of the business models of these companies. A recent report by UBS titled “Is India in an eCommerce bubble?” suggests that investor concerns about eCommerce being a bubble in India seem to be misplaced and suggests stocks listed in India and abroad that it thinks will be key beneficiaries of this growth. “Our analysis of the supply-chain for offline retail by category implies adequate margins for etail in future. Inherent operating leverage in the business model and 700bp (as a percentage of gross merchandise value) lower discounting should lead to operating profit for the industry by 2020E. Grocery is a much bigger part of retail in India than in other markets. Success in this segment would imply upside to our valuation estimates,” it says. According to UBS, outside of private equity investment or listed global companies, equity investors can gain exposure to this space through online classifieds and travel; and among the India-listed stocks, maintain a ‘buy’ rating for Nasdaq-listed Makemytrip, Info Edge and a ?sell? rating for Just Dial. Among telecom companies, it maintains a buy rating on Bharti Airtel and Idea Cellular. “Hindustan Unilever (HUL), Colgate, and Titan should benefit from the expanding reach of their premium products. Page Industries and TTK Prestige are vulnerable, in our view. Logistics companies are direct beneficiaries of etail growth. We believe logistics companies with pan-India coverage and robust last-mile delivery will benefit most,” it suggests. Here are the stocks that UBS thinks will be likely beneficiaries of the eCommerce boom in India: Google is a key source for diverting traffic to eCommerce sites in India. We believe Google to capture significant marketing budget of eCommerce/internet companies as they progress to capture the market share. We expect Google to make most dents in the Indian market through its Android One program. Facebook is the second-most visited website in India. We believe Facebook can play an active role in eCommerce space with emergence of e-shops and through the sale of ad space. We expect retailers to increasingly invest in Facebook advertising to drive traffic to their own sites, particularly as more sophisticated advertising tools are adopted. eBay management has been clear about its intentions for growth in BRIC and EM in general and plans to increase sales in these geographies by 4x. In our view, eBay is capable of making significant investments to achieve these BRIC market goals, both organically and inorganically. eBay also has exposure to the Indian eCommerce market through its investment in Snapdeal, which provides eBay with access to SnapDeal’s active user base and technology (software, distribution capabilities). Twitter’s acquisition of Zipdial (mobile marketing firm unique to emerging markets) to make Twitter content more accessible in markets such as India and over time, increase the number of marketing opportunities for Twitters advertising customers. We expect it to gain with the emergence of target advertising. Amazon is one of the significant etailers in India and operates through market-place model.While India’s current contribution to Amazon’s total revenue is low, we expect substantial gains from Indian eCommerce and expect the company to remain a top two or three player in future. Amazon is the largest foreign and listed company in Indian etail and has an added advantage of its multiple geographical experience, global best practice and technology accessibility. Nasper has investments in Flipkart (general retail), Ibibo (online travel), OLX (classifieds), PayU (payments) and Redbus (online bus booking). Most of the companies it has invested in are leaders in their respective verticals, and as such we think Naspers is well-placed to benefit from the growth in Indian eCommerce. Rocket Internet has a portfolio of investments in the Indian eCommerce space with a primary focus on internet retailing through Jabong (Fashion), Fab Furnish (Furniture), Food Panda (food delivery), Coupon Nation (group buying/deals), Print Avenue (order printing) and Office Yes (stationary). We believe Rocket Internet will be a key beneficiary of acceptance of online retailing (etailing) in India.
Four Indians among Time’s most influential people
Prime Minister Narendra Modi and three others of Indian origin figure in the Time magazine’s list of 100 most influential people in the world. Besides Modi, others are Microsoft CEO Satya Nadella, ICICI CEO Chanda Kochhar and India’s foremost mental health expert professor Vikram Patel. Patel, who teaches at the London School of Hygiene and Tropical Medicine in the UK and heads an organization, Sangath, in Goa, has done seminal research on suicides in India. Reacting to the achievement, he hoped that the Indian government would wake up to the serious shortage of programmes and experts to deal with mental health problems. Patel told TOI on phone from Montreal: “The vast majority of people with mental disorders do not receive care which can greatly improve the quality of their lives. The treatment gap exceeds 90% for community based psychosocial interventions. “Hope very much that this recognition will increase the attention that the world’s governments and donors give to mental health, not just in India where issues like suicide, alcohol abuse, depression, autism and schizophrenia are almost en tirely ignored by public health systems leading to enormous unmet needs and human rights abuses,” he said. When asked if India was doing enough to solve mental health problems, he replied in the negative: “(I) witness complete absence of public health approach to suicide for example.” A research by Patel on suicides in India had thrown up shocking findings in 2010.The southern states, Tamil Nadu, undivided Andhra, Karnakata and Kerala, that together constitute 22% of the country’s population, recorded 42% of suicide deaths in men and 40% among women. Praising the leadership qualities of ICICI Bank chief Chanda P Kochhar, her friend and Deutsche Bank co-CEO Anshu Jain has said he is yet to find anything she can’t do. Kochhar, who has been at the helm of ICICI Bank since 2009, is among the three Indians and the only Indian woman named in the list of “The 100 Most Influential People” in the world by Time magazine. According to Jain, himself a well-known banker, Kochhar has shaped retail banking in India ever since she assumed her pivotal role in establishing ICICI Bank during the 1990s. “Her calm, soft-spoken and understated demeanour belies her strength of conviction and clarity of thought,” Jain said in the profile about Kochhar written in the magazine. “When Chanda speaks, people listen carefully,” he said while adding that he is yet to find anything that Kochhar can’t do. Noting that Kochhar is a first-class leader, strategist and friend, Jain said that when young women turn to her for advice, she tells them to put aside their unconscious inhibitions.
India builds first smart city in Gujarat
India’s push to accommodate a booming urban population and attract investment rests in large part with dozens of “smart” cities like the one being built on the dusty banks of the Sabarmati river in western India. So far, it boasts modern underground infrastructure, two office blocks and not much else. The plan, however, is for a meticulously planned metropolis complete with gleaming towers, drinking water on tap, automated waste collection and a dedicated power supply – luxuries to many Indians. With an urban population set to rise by more than 400 million people to 814 million by 2050, India faces the kind of mass urbanisation only seen before in China, and many of its biggest cities are already bursting at the seams. Ahead of his election last May, Prime Minister Narendra Modi promised 100 so-called smart cities by 2022 to help meet the rush. At a cost of about $1 trillion, according to estimates from consultants KPMG, the plan is also crucial to Modi’s ambition of attracting investment while providing jobs for the million or more Indians who join the workforce every month. His grand scheme, still a nebulous concept involving quality communications and infrastructure, is beginning to take shape outside Gandhinagar, capital of the state of Gujarat, with the first “smart” city the government hopes will provide a model for India’s urban future. “Most (Indian) cities have not been planned in an integrated way,” said Jagan Shah, director of the National Institute of Urban Affairs which is helping the government set guidelines for the new developments. Smart city, Narendra Modi, Narendra Modi smart city, Smart Cities, First smart city in Gujarat, Sabarmati river, narendra modi gujarat, Prime Minister Narendra Modi, Gandhinagar, KPMG, India news, Modi model of development Among the challenges to getting new cities built or existing cities transformed is the lack of experts who can make such huge projects work and attracting private finance. “To get the private sector in, there is a lot of risk mitigation that needs to happen because nobody wants a risky proposition,” he told Reuters, stressing the need for detailed planning. To build smart cities, India allocated 60 billion rupees ($962 million) in its annual federal budget for the financial year starting April 1, even as it spent just a fraction of last year’s allocation of 70.6 billion rupees, said Shah Gujarat International Finance Tec-City (GIFT), as the smart city is called, will double up as a financial hub, with tax and other breaks to lure banks, brokerages and other businesses. Developed in partnership with IL&FS Engineering and Construction, it aims to compete with India’s own financial capital of Mumbai as well as overseas rivals like Dubai and Singapore. Smart city, narendra modi, narendra modi smart city, Smart Cities, First smart city in Gujarat, Sabarmati river, narendra modi gujarat, Prime Minister Narendra Modi, Gandhinagar, KPMG, india news, modi model of development Pressure on India’s existing urban centres is already intense, with cities like Mumbai gridlocked by traffic and hampered by poor infrastructure and a lack of amenities like parks and effective public transport. Yet some experts believe that building new cities may not be the answer to India’s swelling urban population “To address India’s urbanisation challenge we have to start looking at our existing cities,” said Shirish Sankhe, director at consultant McKinsey and Company, India. He added that new cities would be only a small part of the solution relative to brown field projects. India has built planned cities in the past, including Chandigarh, designed by French architect Le Corbusier, and Gandhinagar itself. But the scale of its current push is unprecedented. A bird’
