FIIs pour in Rs 13,000 cr in Indian bond market in Aug
Overseas investors have pumped in about Rs 13,000 crore in the Indian debt market so far this month, endorsing the country\'s growth potential and political stability. This takes the total investment in the debt market to around Rs 99,000 crore so far this year. Foreign investors were gross buyers of debt securities worth Rs 31,639 crore till August 22, and sellers to the tune of Rs 18,649 crore - a net inflow of Rs 12,990 crore ($2.14 billion), as per latest data. The country\'s debt market has seen a recent surge in foreign buying especially last week after pulling out money in the first fortnight of August. Moreover, foreign investors had poured in Rs 16,072 crore ($2.65 billion) in a single day (August 20) in the debt market. According to market analysts, foreign investors believe that the new government would bring several reform measures to pep up the sluggish economy. Foreign investors have pumped in a staggering Rs 98,802 crore ($12.76 billion) into the Indian bond market so far this year, higher than investments of Rs 76,705 crore ($16.4 billion) into equities during the period. The different overseas investors operating in Indian markets include FIIs (Foreign Institutional Investors), FPIs (Foreign Portfolio Investors) and QFIs (Qualified Foreign Investors). From the beginning of June, FIIs along with sub-accounts and qualified foreign investors have been clubbed together by market regulator Sebi to create a new investor category called FPIs.
FDI jumps 34% to $1.92 bn in June
Foreign direct investment (FDI) flows to India surged by about 34 per cent to $1.92 billion in June, according to the official data. In June 2013, the country had received FDI worth $1.44 billion. During April-June in this fiscal, the foreign inflows recorded a growth of 34 per cent. FDI was at $7.23 billion in April-June, 2014-15 compared to $5.39 billion in April-June 2013-14, the data by Department of Industrial Policy and Promotion showed. In May, the FDI figure ($3.60 billion) was the highest since September 2013 when the country received foreign investment of $4.13 billion. Amongst the top 10 sectors, telecommunications received the maximum FDI in the first quarter of the current fiscal at $2 billion followed by services ($738 million), pharmaceuticals ($680 million) and construction ($281 million). During the period, India received maximum FDI from Mauritius at $2.61 billion, followed by Singapore ($1.18 billion), the UK ($567 million), Japan ($695 million) and the US ($249 million). In 2013-14, FDI inflows in India were $24.29 billion against $22.42 billion in 2012-13. India requires around $1 trillion in the next five years to overhaul its infrastructure sector, including ports, airports and highways to boost growth. The government is taking more steps to boost FDI in the country. It has raised the foreign investment limit to 49 per cent in defence manufacturing and relaxed the policy in construction sector. The government has also proposed to increase the FDI cap in insurance to 49 per cent.
India can increase FII limit in G-Sec: Report
India can easily increase the limits of FIIs in G-Secs by $5-$30 billion to shore up its foreign exchange reserves thus providing a cushion against potential volatility in the global currency markets, an expert report said. According to the Bank of America Merrill Lynch (BAML) report, the central government can also do away with separate limits for sovereign wealth funds (SWF) within the overall $81 billion foreign institutional investors\' (FIIs) debt limits. The BAML said the FIIs have utilised 97.4 percent of their $25 billion limit following the $2.6 billion inflow on August 20. According to BAML, the separate SWF limits are not being utilised as many of them invest in the Indian paper through FIIs. The BAML said the increase in limits of FIIs in G-Secs will help to raise the foreign exchange reserves to guard against effects of global currency market volatility. \"In case of outflows, India will be no worse off if the RBI (Reserve Bank of India) buys the FX (foreign exchange) during inflows,\" the report states. Secondly, FII inflows into government securities are easier to attract as RBI rate cycle is peaking. And the interest incorporate debt will take time as concerns about corporate stress remain, says the BAML report. According to the report, the corporate debt market is still not very liquid, especially in comparison to the G-Sec market, as it is dominated by long-hold investors, like insurers. Further, it is not realistic to expect that debt FIIs can be pushed into corporate debt to get India debt exposure if the GSec quota is filled up. According to the report, higher FII inflows into G-Sec should help to bring down the lending rates following the RBI\'s100 basis points cut in the statutory liquidity ratio.
Exports projected to touch $750 bn by 2018-19
Boosted by a forthcoming foreign trade policy, India\'s exports are expected to cross the $350 billion mark in 2014-15 and reach $750 billion by 2018-19, the Federation of Indian Export Organisations (FIEO) said. \"I am much optimistic that we would be able to cross $350 billion mark in 2014-15. Since the new foreign trade policy is likely to be announced shortly to be effective from 2014-19, FIEO projects an export target of $750 billion by 2018-19,\" FIEO president Rafeeq Ahmed told media persons in New Delhi. With the global trade scenario improving and expected to grow at twice the rate of 2.3 percent in 2013, Indian exports have done reasonably well in first four months of the current fiscal showing a growth of 8.62 percent in April-July and touching $107.8 billion, he said. Ahmed said India\'s traditional markets like the US and Europe are also showing better economic performance. These regions account for about 30 percent of the country\'s exports. Slowdown in the western markets have severely impacted India\'s exports. Exports growth slipped to 7.33 percent in July after registering double-digit expansion in the previous two months, pushing up the trade deficit to a year-high of $12.22 billion. The country\'s exports in the last three years have been hovering at $300 billion. It was $312.35 billion, $300.4 billion and $307 billion in 2013-14, 2012-13 and 2011-12 respectively. The government is taking several steps to boost the shipments, and is soon expected to announce measures in the forthcoming foreign trade policy (FTP), Ahmed said. He suggested the government grant the interest subsidy scheme to all sectors and exporters and extend it till March 2017. According to Ahmed, there is a need to revive the special economic zones (SEZ). \"There is a need for immediate withdrawal of minimum alternate tax and dividend distribution tax and restore the SEZ policy to its original form. This would go a long way in regaining trust and confidence of domestic and foreign investors,\" he said. Ahmed also recommended the government announce setting up of country and product specific export clusters or parks on the lines of SEZs. \"It will help in making India a manufacturing and export hub. Government should give special emphasis on boosting the manufacturing sector as it impacts exports too,\" he said. FIEO director general Ajay Sahai said exporters need to explore markets like Latin America, Russia and Africa.
Indian exports to ASEAN to touch $280 bn in 10 yrs: StanChart
Indian exports to the 10-nation ASEAN bloc is expected to reach $280 billion in the next 10 years, says a Standard Chartered research report. According to the global financial services major, the India-ASEAN trade corridor, currently worth around $80 billion, has been growing fast at a compound annual growth rate of 23% over the past decade. In FY 2013-14, India\'s exports to the bloc stood at $33.13 billion. In addition, the new Indian government has prioritised strengthening ties with the Association of South East Asian Nations. \"We expect exports to ASEAN to reach $280 billion in 10 years, at which point it would hold a 15% share in Indian exports,\" Standard Chartered said in a research report. The report added that this projection is based on the assumption that India\'s export/GDP ratio will continue to rise as the economy liberalises and integrates further with the global economy. Several complementaries in India-ASEAN exports suggest room for both parties to gain from trade. India has an advantage in pharmaceuticals, gems and jewellery, and iron and steel, while the ASEAN bloc has an advantage in natural resources and electronics. According to the report, there are six areas with export potential -- include Petroleum products, organic chemicals, vehicles (including auto components), pharmaceuticals, gems and jewellery and apparel and clothing accessories. These categories rank among India\'s top 10 export items by value. \"The first three are categories where ASEAN already accounts for a sizeable chunk of total Indian exports, and where export growth is high. The last three are areas where we feel there is potential for India to increase export growth rates,\" the report said. Standard Chartered further noted that greater physical connectivity within the region via the trilateral highway and the Mekong corridor is likely to enhance trade in the India-ASEAN corridor, and should also be a priority for India\'s new government. In a bid to enhance trade ties, India and ASEAN have already implemented Free Trade Agreements in goods. For services and investments, both sides have concluded negotiations. ASEAN comprises Indonesia, Malaysia, the Philippines, Singapore, Thailand, Myanmar, Cambodia, Laos, Vietnam and Brunei.
Govt set to revise patent norms for pharma
The government is set to revise the guidelines for evaluating applications seeking intellectual property rights (IPR) for pharmaceuticals. This follows an increasing number of drug patent filings, along with litigation between innovator companies and generic drug producers. The controller general of patents, designs and trademarks, under the department of industrial policy and promotion, issued draft guidelines in this regard. “The (aim is) to help examiners and controllers of the patent office consistently achieve uniform standards while examining and granting patents,” a senior official said. The proposed guidelines, he said, would complement the existing norms and procedures. Detailed guidelines on certain provisions of patent law will enable a standard procedure while evaluating and deciding on complex applications. The government feels pharma products require separate guidelines due to the intricacies involved and the implications in the case of medicines. Uniform evaluation standards are also expected to reduce and bring clarity on patent challenges According to an intellectual property right (IPR) lawyer, India granted as many as 970 pharmaceutical product patents between 2007 and 2011, whereas the number has increased to around 1300 between 2011 and 2013. In 2005, when India changed its patent law and started granting patents in medicines, only three pharma patents were granted. The number rose to 113 in 2006 and 772 in 2007. The trend continued with as many as 1,369 patents being approved in pharma in 2008 and 1,046 in 2009, as per the Indian patent office. While patent approvals have increased, patent challenges and litigations are also on a rise in the country. Various domestic firms including Natco, Cipla and Glenmark have locked horns with multinationals such as Novartis, Merck and others over patent infringement etc. In some cases, domestic firms have also approached the government and the regulator to issue compulsory license against patented medicines. According to the official, the draft guidelines aims at bringing in clarity and uniformity in various provisions of the patent law such as section 3(d) which does not allow incremental innovation to be patented. The proposed guidelines also define words such as \"invention\" and \"inventive step\" and explains how they need to be interpreted while examination of applications seeking IPR on pharmaceuticals. The draft guidelines, however, clarifies that applications should be examined on a case -to - case basis, without being prejudiced.
DISCLAIMER
This newsletter is compilation of news articles from various business-e-newspapers and in no way is an endorsement or reflection of Embassy of India, Berne views.
