India NewsletterMay, 2013FROM THE EDITORS DESKConsumption Led Economic Growth in India Spurs Manufacturing Industry Expans...
OTHER ECONOMIC HEADLINESForex reserves rise by USD 1.1bn in Apr-DecCCI push to projects worth `74,000cr (14bln US$) hit by...
WHO’S EXPANDING IN INDIAU.S digital film company Netflix Inc. may be looking to enter the Indian market, withits latest re...
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Indian Economic Status May 2013


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Indian Economic News, IIP Growth % (Index of Industrial Production) Graph, WPI % Growth (Wholesale Price Index) Graph, Corporate Headlines and Who’s Expanding in India, Everything in Indian Economic Status Newsletter May 2013

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Indian Economic Status May 2013

  1. 1. India NewsletterMay, 2013FROM THE EDITORS DESKConsumption Led Economic Growth in India Spurs Manufacturing Industry ExpansionRajabahadur V ArcotIndependent Industry Analyst / columnist and AutomationConsultantMember, Advisory Board, Expand in IndiaResulting from the robust economic growth that India has witnessed in recent years, the middleclasspopulation, with disposable incomes, has been expanding. According to the study done by theNational Council for Applied Economic Research, the middle class households would swell to 53.3million from around 31.4 million in 2010-11. Their discretionary spending creates the demand for awhole range of manufactured goods, such as mobile phones, entertainment electronics, a broadrange of home appliances, with the more affluent among them splurging on durables, such as cars,two wheelers, washing machines, and such others. This presents immense growth opportunities toalmost all industry segments. While the country has sufficient production capacity in industries suchas automotive, cement, metals, and others and has the ability to expand the existing capacity, thecountry is not that well placed in other segments, such as consumer and industrial electronics,communication equipment, and machinery and lacks the inherent technology. While the country isone among the major producers of fruits and vegetables, it is a laggard in food processing. It alsoneeds to expand its infrastructure requiring massive financial capital, which it lacks. The presentsupply side and other constraints that the country is facing result in high inflation and unsustainabletrade deficit. India, in order to live up to the full potential, seeks global investments, especiallyforeign direct investments aimed at establishing production facilities. The country has supportivepolicies governing payment of royalty, repatriation of profits, and such others. India permits 100percent foreign equity in most industries. Additionally firms setting up in special economic zones(SEZs), operating in electronic hardware or software technology parks, or operating as 100 percentexport-oriented entities may also be fully foreign-owned.While most countries suffer from diminishing consumer demand and the resulting productioncapacity glut, India’s challenge is to create the much needed production capacity to meet a robustconsumer demand for a broad portfolio of manufactured products and goods. Thus, India should beon the radar screen of global companies that seek long-term growth opportunities.CORPORATE HEADLINESSuzuki Motors stake in Maruti Suzuki goes up to 56.21%RIL nears first gas discovery after 5 yearsAurobindo Pharma gets USFDA nod for anti-AIDS drugStrides arm forms JV with Pfenex for biosimilar productsEtihad picks up 24% stake in Jet AirwaysMukesh Ambanis 4G arm Reliance inks `1,200cr( 220mln US$) pact with Anil AmbanisTPG keen to sell balance 10% in Shriram TransportOpto Circuits arm to sell diagnostic cardiology businessOrchid enters into strategic partnership with Europe-based AllecraECONOMIC AND POLITICAL NEWSIndustrial growth weakThe Index of Industrial Production (IIP)reported 0.6% growth for the month ofFebruary 2013 decelerating from 2.4% inJanuary 2013 and 4.3% in the correspondingmonth of the previous year. Marginal growthin the Index of Industrial Production (IIP)surprised positively though, considering thatthe consensus estimates pegged a de-growth,mainly as the eight core industries (37.9%weightage in the index) reported a 2.5%decline in growth for the month. On acumulative basis, during the April – Februaryperiod of FY2013, growth in industrialproduction, at 0.9%, indicates a low-level.(The HSBC India Manufacturing…witnessedthe slowest rate of expansion in 16 months inMarch as power outages hamperedproduction activity and decline in newbusiness orders, and ManufacturingPurchasing Managers Index (PMI) -- ameasure of production - stood at 52 in Marchdown from 54.2 in February)Inflation softens to 40-month lowWhole sale Price Index (WPI) inflation forMarch 2013 moderated to more than a three-year low in March 2013. It came in at 6.0% ascompared to 6.8% in the previous month and7.7% in March 2012.The deceleration in inflation can mainly beattributed to softening primary article(particularly food) inflation. Core inflationreceded for the seventh straight month to3.4% as compared to 3.8% in the previousmonth and 5.0% in the corresponding monthof the previous year, reflecting the decline incommodity prices on a yoy basis and weakpricing power in manufacturing. Inflation forthe month of January 2012 has been revisedupwards to 7.3% as against 6.6% reportedearlier, due to revision in fuel and primaryarticle inflation.
  2. 2. OTHER ECONOMIC HEADLINESForex reserves rise by USD 1.1bn in Apr-DecCCI push to projects worth `74,000cr (14bln US$) hit by delaysUnder-recovery on diesel down to `6.52per litreServices PMI falls to 17-month low inMarchGovernment gives extra time to 14 SEZdevelopers to execute projectsIndian economy to grow at a higher paceof 6% in FY14: ADBCRISIL cuts FY2014 GDP growth forecast to6%Government to award 30 port projectsworth `25,000cr (4.75 bln US$) this fiscalIndia-China bilateral trade projected atUS$100bn by 2015Road Ministry sets target to award 9,000km projects in FY14Exports from India down 1.76% to USD300bn in FY13Car sales estimated to grow 3-5% inFY14:SIAMCoal linkages to 16,000MW power plantsnot possible : Coal MinistryFDI in the telecom sector, which includesradio paging, cellular mobile, basictelephone services, attracted $ 1.99billion during April-January period of the2011-12 fiscal, as per the Department ofIndustrial Policy and Promotion (DIPP).Some key measures taken for boostingexports from India include:The Export Promotion Capital Goods(EPCG) scheme which allowed import ofcapital goods including spares for export-related production at zero duty forspecified sectors and at a concessionalrate of 3% Customs duty for all sectors.Extension of 2% interest subvention up toMarch 2014 to textile made up articlesand specified items in Engineering sectorin addition to specified labor intensivesectors coving Handlooms, Handicrafts,Carpets, SMEs, Toys, Sports Goods,Processed Agricultural Products andReady-Made Garments.Addition of items in duty free import ofspecified raw materials for manufacture ofhandloomsReduction in minimum land arearequirement by half for differentcategories of SEZs.WHO’S EXPANDING IN INDIAVISITENGLAND wants to grow its MICE business from India and will leverage its Asia-Pacific office in New Delhi to broaden its network of trade partners.Sarova Hotels, has announced signing of two more hotels in GujaratMarks & Spencer Reliance India Pvt. Ltd is stepping up its expansion in the countryafter reporting strong growth across its brands. The UK-based retailer plans to openfive stores of 20,000- 23,000 sq. ft each by this summerIndias diversified FMCG conglomerate CavinKare Pvt. Ltd. Has announced its plan toexpand its beauty salon business, Trends in Vogue Pvt. Ltd., across India. The brandhas planned to open 350 salons in metros and mini-metros by 2015. - GROWTH % (INDEX OF INDUSTRIAL PRODUCTION) 7.6 7.58 8.17.3 7.3 FEB12 MAR12 APR12 MAY12 JUNE12 JULY12 AUG12 SEP12 OCT12 NOV12 DEC12 JAN13 FEB13 March, 13WPI % GROWTH (WHOLESALE PRICE INDEX)
  3. 3. WHO’S EXPANDING IN INDIAU.S digital film company Netflix Inc. may be looking to enter the Indian market, withits latest recruiting attempt hinting at a possible India expansion.Export Development Canada (EDC) reported out today on USD 600 million in newtransactions that will facilitate new export business between Canadian companiesand Indian multinationals.German sportswear major Adidas is stepping up India expansion for its sportsfashion and lifestyle brand Adidas Originals. It plans to have 20 exclusive stores bythe end of the year.London-listed mining to markets firm Gemfields Plc says the appetite for colouredgems including emerald, ruby and amethyst is growing in India. The company saidit is looking to tie up with Jewellery designers and retailers to bring out exclusiverange.The Swedish multinational apparel-retailer Hennes & Mauritz (H&M) has submittedits application to Foreign Investment Promotion Board (FIPB) for opening 50 wholly-owned-single-brand-retail stores across India. H&M is planning to make aninvestment of Rs. 7.2 billion in IndiaLeading jewellery retailer Gitanjali Group plans to set up a total of 550 shops inIndia and abroad by end of this year, a top company official said.Honda Cars will invest Rs 2,500 crore (450 Mln US$) at its Tapukara (Rajasthan)plant by next year to build a new assembly line for cars with an annual cap of120,000 units.More than two-thirds of companies doing business in India plan to expand theiroperations in rural markets, according to new research by Accenture.HPCL approves joint venture for `37,320cr Barmer refineryTata Power commissions 21 MW wind power project in RajasthanPetronet signs first US deal; to import 4 mn tonnes of LNGJindal Stainless plans to double Odisha plant capacity to 2 MTTo grow its instrument cluster business in India, Denso has acquired shares ofPricol Components Limited, a subsidiary of Pricol Limited which designs,manufactures and sells instrument clusters for passengerDISCLAIMERThis report is solely for knowledge purposes. The informationcontained here has been obtained from sources which Expand InIndia believes to be reliable. The Company does not warrant thatsuch information is accurate or complete.ABOUT EXPAND IN INDIAExpand in India, addresses the need ofcompanies looking to expand in India in aquicker and cost effective manner. Expand inIndia has been built as a handy resource forCompanies eyeing route to business partners inIndia for their India expansion and forprospective partners to connect with principalsin a seamless fashion using this portal. Add tothis our networking and consulting value add -and companies can be on stream to capturerevenues quickly.Services Offered by Expand in India Market Research Business Plan / Entry Strategy Business Partner Search Legal Entity Formation Resourcing Business DevelopmentXNI Consultancy Services Pvt. Ltd. 161, Windsor Greens, F-28, Sector-50, Noida-201301Tel: +91-120-4316510, +91-9810209134E-mail: Website: