FPI inflows hit $1.5 billion in Oct; reaches $35 billion in 2014
Continuing to bet big on the government\'s reforms agenda, overseas investors have poured in $1.5 billion in the Indian market so far this month taking the total inflow to $35 billion since January. The net investment by foreign investors into debt market was at Rs 12,645 crore ($2.06 billion) between October 1-22, while they pulled out Rs 3,500 crore ($570 million) from the stock market during the same period, taking the total to $1.5 billion, as per latest data. Market analysts maintain that foreign investors (Foreign Institutional Investors or Foreign Portfolio Investors) have been betting on the Indian market mainly on account of the reforms agenda of the new government at the Centre. Also, they anticipate inflows would continue in the coming months on slew of measures announced by the government. The Cabinet has given the go-ahead to deregulation of diesel price and also came out a new gas pricing formula. Besides, government has promulgated ordinance for e-auction of coal blocks. Since the beginning of the year, the net investments by overseas investors into Indian equity markets stood at Rs 79,938 crore ($13.3 billion) so far this year, while the same for debt markets was at Rs 1.3 lakh crore, taking the total to Rs 2.10 lakh crore ($35 billion) Since the beginning of June, FIIs ( Foreign Institutional Investors) along with sub-accounts and qualified foreign investors have been clubbed together by market regulator Sebi to create a new investor category called Foreign Portfolio Investors. Strong inflows in the recent months have taken the cumulative net investments of foreign investors into India to over USD 206 billion since 1991. In rupee terms, their investments are at Rs 10 lakh crore level during the period.
FIIs up stake in oil PSUs in September quarter
Foreign Institutional Investors (FIIs) have increased their stake in most of the state-owned oil and gas companies in the September quarter, stock exchange data showed. FIIs have raised their holdings in ONGC, Oil India, HPCL, BPCL, IOC and GAIL India during July-September quarter. They bought an additional 34.71 million shares worth of around Rs 1,500 crore of these six companies during the recently concluded quarter. ONGC and Oil India would be the biggest beneficiaries of diesel price deregulation and the gas price revision. With under recoveries disappearing in the case of diesel, ONGC is expected to gain the most, believe oil & gas analysts. Oil marketing companies such as HPCL, BPCL and IOC would also be the beneficiaries following the new oil and gas reforms. In HPCL, the overseas investors have increased their ownership by 1.5 percentage points to 14.10% in September 2014 quarter. They held 12.59% stake in June quarter and 9.27% at the end of September 2013 quarter. The stock rallied nearly 9% to Rs 534 during intra-day deal on BSE. It’s trading near to its lifetime high of Rs 555 touched in September 2010. FIIs acquired an additional 21.79 million shares of ONGC in last quarter. Their stake in the country’s largest oil exploration and production firm increased to 7.17% in September quarter from 6.92% at the end of June quarter. They held 6.52% stake in September 2013, data shows. The stock was up 7% at Rs 424 on BSE. FIIs stake in BPCL increased to 12.57% from 12.23%, GAIL India to 19.11% (18.77%), IOC to 2.45% (2.41%) and Oil India to 9.65% (9.63%).FDI proposals worth Rs.988.3 crore approvedThe government has approved 20 proposals of foreign direct investment (FDI) amounting to Rs.988.3 crore, an official statement said in New Delhi. \"Based on the recommendations of Foreign Investment Promotion Board (FIPB) in its meeting held on September 16, 2014, the government has approved twenty proposals of Foreign Direct Investment amounting to Rs.988.3 crore approximately,\" the finance ministry statement said. Some of the proposals that got clearances are - Bharti Shipyard, Solar Industries, Hatsoff Helicopter Training, Verizon Communications, Ironman Media and Advisory Services and Indusind Bank.
India 2nd fastest growing air cargo market after Middle East: IATA
India has emerged as the second fastest growing air cargo market after the Middle East and is expected to grow at a compound annual rate of about seven per cent over the next five years, an IATA forecast said. India would also be among the ten largest international freight markets by 2018 led by the United States supplying 10,054,000 tonnes and China with 5,639,000 tonnes, the International Air Transport Association\'s (IATA) Industry Forecast 2014-2018 shows. It estimated that \"the second fastest-growing market, India, will experience a compound annual growth rate (CAGR) of 6.8 per cent to add 622,000 extra tonnes.\" Apart from the US and China, the remaining eight largest international freight markets would be the UAE (4,974,000 tonnes), Germany (4,763,000), Hong Kong (4,648,000), Republic of Korea (3,487,000), Japan (3,480,000), the United Kingdom (2,808,000), Chinese Taipei (2,350,000) and India (2,223,000). Noting that global freight volumes were expected to rise annually by 4.1 per cent over the next five years, it showed the largest air freight traffic share last year was within Asia Pacific (21.6 per cent), followed by Europe-Asia Pacific (12.3 per cent) and North and Mid-Pacific (10 per cent). Observing that air cargo remained vital to the global economic system, IATA chief Tony Tyler said more than USD 6.8 trillion worth of goods, equivalent to 35 per cent of total world trade by value, would be transported around the world by air in 2014. However, he warned that despite the positive picture, \"the overall risks to the economic outlook, and therefore to air freight, remain towards the downside. Trade protectionism is a constant danger\". He quoted World Trade Organization data to show that between November 2013 and May 2014 alone, 112 new trade restrictive measures were enacted by G-20 governments. \"Geopolitical concerns, volatility of oil prices and competition from rail and sea could also affect this forecast. The air cargo industry certainly cannot afford to be complacent,\" Tyler said.
Govt eases norms for private defence firms
In a move expected to rake in investments into the defence sector, the government allowed private defence manufacturing firms to sell equipment to state-run entities without prior approval. However, permission would be required to sell to non-government entities, the Ministry of Commerce and Industry said. “The Licensee shall be allowed to sell defence items to government entities under the control of Ministry of Home Affairs, State governments, Public Sector Undertakings and other valid Defence Licensed Companies without approval ofthe Department of Defence Production [DoDP],” the Ministry said in a communique .“However, for sale of the items to any other entity, the Licensee shall take permission from the DoPD,” it said. The Ministry also removed the cap on the annual production capacity for defence-related equipment. However, licensed firms would be required to submit their production returns to the government every six months.
Mobile shopping set to drive e-commerce in India
The online retailers are taking the smart phones route to tap the market opportunity offered in Tier-II and Tier-III cities. Most leading players expect 90 per cent of their online shopping to come through smart phones and tablets within the next few years. India is the second largest mobile phone market with more than 930 million customers. According to IDC data, the domestic smart phone market grew 84 per cent in the second quarter of 2014 and is expected to grow rapidly. With the huge market potential offered by smart phones, companies such as Snapdeal, Flipkart, Myntra, among others, have already launched mobile applications. “The growth in internet usage in India, largely on mobile devices, is the key driver for e-commerce growth. Specifically for fashion, the non-availability of the latest brands in Tier-II and Tier-III cities has led to high interest in online shopping,” said Myntra Chief Revenue Officer Prasad Kompalli. Over the next three years, online market place Snapdeal expects 90 per cent of its order to come from people who buy through their mobile devices. “Currently, around 60 per cent of our orders come through our mobile platform. We are hoping to receive 75 per cent of our transactions through mobile within the next one year. The same is expected to touch 90 per cent over the next three years,” said Kunal Bahl, Co-founder and CEO of Snadeal.com. Another reason for the increase in mobile commerce is the penetration of smart phone into the rural markets. Around 45per cent of the online users in India access internet only through their mobile phones. As per industry experts, out of all shopping queries in India, 30 per cent come from mobile phones, however, presently less than 5per cent of total digital commerce happens through mobile According to a recent report from IT research and advisory firm Gartner, the e-Commerce market is expected to grow 70 per cent and touch $6 billion in 2015.“Mobile commerce will help organisation skip the desktop wave with increasing penetration of affordable smart devices with connectivity and a rapidly growing ecosystem to engage customers on mobile,” said Praveen Sengar, research director, Gartner.
India world\'s 4th largest steel maker at 62.41 mn tonne in Jan-Sept
With 62.41 million tonnes output, India remains the world\'s fourth largest steel producer in the first nine months of the current year, preceded by China, Japan and the US. World Steel Association (WSA) data showed India\'s steel production grew by 1.8%, the second highest among the top four steel producing nations, during the January-September period from 61.27 MT in the same period last year. India has been the world\'s fourth largest steel maker for the last four years. The order is likely to remain unchanged in current year too, an industry expert said. During the first nine months, China produced 618 MT steel which is a little more than half of world\'s total production at 1,231 MT. China logged 2.3% growth during the period. But its steel production remained static in September, as per data revealed by WSA, at 67.5 MT when compared with the same month last year. Japan remained the remote second with 83.1 MT production during the nine-month period clocking just 0.8% growth over 82.4 MT production in the same period last year. The US stood at the third spot with 66.33 MT production compared to 65.3 MT output during the January-September period of the last year.Though the growth in world\'s third largest producing nation grew by 1.6% during the period, in September steel production in the US fell by 0.1% over the same month last year. Russia and South Korea vie for the fifth slot with 53.4 MT and 53.2 MT output in the first nine months of the current year. The balance is, however, tilted towards the Asian nation as it logged 9.4% growth, highest among major steel producing nations, in steel production during the period compared to Russia\'s 3.1%..
Govt aims to make $15-bn IoT industry in India by 2020
The government is working on an ambitious plan to create $15 billion \'Internet of Things\' industry in the next six years. Internet of Things, or IoT, can be loosely described as a network of inter-connected devices that can be accessed through the Internet. For instance, with IoT, street lights will automatically go off when they sense no traffic on the roads and consequently save power. Another application could be a smart band that will automatically alert physician when body vitals go to abnormal levels. \"Among other things, IoT can help automate solutions to problems faced by various industries like agriculture, health services, energy, security, disaster management etc. Through remotely connected devices,\" the draft IoT policy document says. Some of the proposed concepts under the policy include development of tools to monitor quality of water flowing in taps and levels in reservoirs, smart environment to monitor quality of air, technology to monitor changes in body vitals and send alerts to hospitals. Human role will be limited to setting up parameters for alerts and other activities expected from the objects. The policy has the objective \"to create an IoT industry in India of $15 billion by 2020. This will also lead to increase in the connected devices from around 200 million to over 2.7 billion by 2020.\" The number of internet-
connected devices (12.5 billion) surpassed the number of human beings (7 billion) on the planet in 2011, and by 2020, Internet-connected devices are expected to number between 26 billion and 50 billion globally, the draft policy document said. The proposed policy is in line of government\'s plan to develop 100 smart cities in the country, for which Rs 7,060 crore has been earmarked in the current year\'s Budget. Devices or objects under IoT, will be connected seamlessly on networks and communicate with least human intervention. The IoT policy excludes phones, tablets and personal computers. The Department of Telecom has already floated a draft policy on technical communication among machines but is yet to finalise guidelines. To boost IoT, the government has plans to fund creation of resource centres and test-beds as a common experimental facility to conduct experiments with an allocation of Rs 18 crore as 100% fund with Rs 1 crore for each partner and Rs 3 crore for nodal agency over a period of five years. The government will set up incubation centres that are proposed to be called National Centre of Excellence in partnership with IT industry body NASSCOM and other industry associations at an estimated cost of Rs 35 crore for 5 years to execute a centre with capacity of 40 people.
Think tank formed to draft National IPR policy
A think tank has been formed to draft the National Intellectual Property Rights policy, an official statement said. \"Department of Industrial Policy and Promotion has constituted a IPR Think Tank to draft the National Intellectual Property Rights Policy and to advice the Department of Industrial Policy and Promotion on IPR issues,\" a commerce and industry ministry statement said. Justice Prabha Sridevan is the chairperson of IPR Think Tank. The think tank will identify areas in the IPRs where study needs to be conducted and will furnish recommendations in this regard to the ministry. It will provide views on the possible implications of demands placed by the negotiating partners. It will keep the government regularly informed about the developments taking place in IPR cases which have an impact upon IPR Policy, and will prepare periodic reports on best practice followed in foreign countries. Also, it will advise the government on best practices to be followed in trademark offices, patent offices and other government offices dealing with IPR in order to create an efficient and transparent system of functioning in the said offices. It has also been given the task to highlight anomalies in the present IPR legislations and to advice possible solutions to the ministry.
India\'s growth pace to pick up as Narendra Modi govt\'s reforms draw investmentIndia\'s economy will likely grow at its fastest pace in two years in the current fiscal year as Prime Minister Narendra Modi implements reforms to attract investment, a Reuters poll of economists showed. The after-glow from Modi\'s election victory earlier in the year helped India\'s economy clock a robust 5.7 per cent growth rate for the quarter ending in June. \"The outlook is improving and that mostly reflects the fact that the new government has pledged to prioritise economic reforms. First we saw an improvement in sentiment and now it is translating to actual pick-up in activity,\" said Tuuli McCully, senior economist at Scotiabank. \"Obviously, we really need to see more (reforms). But as of now, I am encouraged by how things are moving.\" Over the past month, Modi\'s government has stepped up economic reforms, opening up the coal industry to private investors and freeing diesel prices to market forces from government subsidies. The latest Reuters poll of 20 economists taken over the past week show Asia\'s third-largest economy will likely grow 5.5 per cent this fiscal year and 6.4 per cent the next, slightly better than 5.3 per cent and 6.3 per cent expected in the July poll. \"India is transitioning away from stagflation conditions, and the much-needed combination of higher real rates, a more friendly investment environment and structural reforms appear to be slowly coming together,\" wrote Manoj Pradhan, an economist at Morgan Stanley.
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.
