Trade 16 Nov 2016 by Tojo Jose

Problems for rupee resurfaces as capital outflows weakens the currency

Problems for rupee resurfaces as capital outflows weakens the currency

Rupee lost 49 paise against Dollar on Tuesday amidst domestic cash disturbances and a distant prospect for interest rate hike in the US. More than the cash stalemate, it was the expectation about a Fed rate hike that weakened the currency. Rupee reached a five-month low of 67.72 against dollar at the end of trading on Tuesday. Several EME currencies also undergone weakness against dollar. The Chinese Yuan reached its eight year low against the US green back. Chinese officials who follows a fixed exchange rate system allowed yuan to depreciate to 6.8495 against their target of 6.83. Yuan’s low will help Chinese exports. On the other side, the US is losing competitiveness amid

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Foreign Investment 12 Nov 2016 by Tojo Jose

NSG outsider India signs civil nuclear agreement with Japan

NSG outsider India signs civil nuclear agreement with Japan

India and Japan signed the much-anticipated civil nuclear cooperation agreement that will fasten India’s nuclear energy projects. The agreement will promote nuclear energy projects in India and is an indication of the country’s ability to support nuclear energy projects despite an outsider of the NSG. "This agreement is a legal framework that India will act responsibly in peaceful uses of nuclear energy and also in Non-Proliferation regime even though India is not a participant or signatory of NPT," Modi said referring to the significance of the agreement for India as the country is not a member of the NSG. Prime Minister Modi and his Japanese counterpart signed the a

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India and China 02 Nov 2016 by Tojo Jose

India searching options to limit the alarming level of Chinese imports

India searching options to limit the alarming level of Chinese imports

Trade with China is turning into a steep welfare loss for India. Already, the trade deficit - straight indicator to show the trade position of the country has registered $53bn deficit with China. Surprisingly, this is happening when the whole world trade is falling. India’s huge trade deficit is more a result of the country’s inability to produce quality manufacturing. Government has launched several steps including the Make in India initiative. At the same time, China has not shown any interest to accommodate Indian imports so that the deficit may come down from the high unsustainable way. Such an official position by Beijing is compelling the government to make some

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Trade 21 Oct 2016 by Tojo Jose

India and the US reopens the IPR Pandora box

India and the US reopens the IPR Pandora box

India and the US- the fast emerging friends on several fronts continue to differ on IPR issues. In the bilateral Trade Policy Forum meeting held at New Delhi, representatives of the two countries both countries opened new areas of conflicts within the IPR front.  Commerce Minister Nirmala Sitharaman firmed the stand of limiting IPR within WTO’s TRIPs agreement.   She highlighted the UN High level panel report on access to medicines. “I pointed out to the USTR that a report brought out by a UN high level panel on access to medicines clearly vindicates India’s position on TRIPS plus issues such as data exclusivity and patent linkages,”- the Co

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External Sector 08 Oct 2016 by Tojo Jose

BRICS Contingent Reserve Arrangement becomes operational to meet short term BoP problems

BRICS Contingent Reserve Arrangement becomes operational to meet short term BoP problems

The launch of the Centralized reserves of the five BRICS countries was announced by Finance Minister Arun Jaitely. The CRA was established in 2015 by the five BRICS countries – Brazil, Russia, India and China. It was created as an emergency drawing mechanism to meet immediate balance of payment problem. The CRA’s fund of $100 bn is a major reserve arrangement outside the Bretton Woods system. It is the IMF that holds the largest reserve arrangement under the BWS (Bretton Woods System) and it comprises reserves of 189 countries. India, Brazil and Russia have contributed $18 billion to the CRA and will have an access limit of $18 bn each out of the total $100 reserves.

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Foreign Investment 04 Oct 2016 by Tojo Jose

Reliance emerges as the leading offset partner for Rafale

Reliance emerges as the leading offset partner for Rafale

Anil Ambani’s Reliance Group is set to gain from the just signed Rafale aircraft deal. Reliance signed a Joint Venture with Dassault Aviation France for providing components for construction of the 36 fighter craft that India is going to purchase from the French Company. The Rs 60000 crore deal has a 50% offset content with Indian firms getting opportunity to supply components. Domestic value addition opportunity for the indian industry is estimated to be Rs 24000 crores out of the deal. Nearly 74 percent of the 50 percent offset value should be exported from India. This means that nearly 40% of the total deal amount or approximately Rs 24000 crores. As per indications, do

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Foreign Investment 20 Sep 2016 by Tojo Jose

India’s external debt surges to $486 bn; share of ECBs and Short term debt falls

India’s external debt surges to $486 bn; share of ECBs and Short term debt falls

The external debt of the country reached $486.6 bn as on March end 2016. According to the verification of the trend by the government on the basis of the Report published by the RBI, the external debt of the country increased by $10.6 bn compared to a year ago. NRI Deposits drives external debt Unlike in the past, debt was driven by NRI deposits. The share of NRI deposits increased to 25.1% though commercial borrowings continue to be the major component of external debt with 37.3% share. According to the data, NRI deposits increased from $115 bn to $127 bn during the year. on the other hand, ECBs increased to $ 181.3 bn from $180.6 bn. A positive development about the debt scena

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Trade 30 Aug 2016 by Tojo Jose

US revives comprising stand on WTO issues with India

US revives comprising stand on WTO issues with India

The US has expressed the hope it can find common ground on trade issues with India and other developing countries on controversial trade issues like the Doha round subjects at the WTO. Jeff Zients, Director of the National Economic Council told the PTI that there is the need for enhanced cooperation at global economic platforms. Citing the WTO, Mr Zient asserted that the future looks bright for the WTO. Mr Zient will be in India next week for the second India -US Strategic and Commercial Dialogue. Both countries are in an effort to raise their trade engagement to a higher level because of overall warmth prevailing between them. The new soothing view from the US on evergreen disp

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India and China 16 Aug 2016 by Tojo Jose

Chinese tabloid urges India to be open to China -Pakistan Economic Corridor through PoK

Chinese tabloid urges India to be open to China -Pakistan Economic Corridor through PoK

China’s official tabloid looking mouthpiece – the Global Times in an article advised India to accept the China Pakistan Economic Corridor (CPEC) project for the welfare of the entire region. No third party is aimed in the project and according to the article, it is unfortunate that the CPEC has opened a new area of confrontation between the two countries. The article seems to be published in the context of External affairs Minister Sushama Swaraj’s protest and India’s concern at the project running through the PoK. The article without concentrating on the economic content of the CPEC, goes on political lines. Midway through the GT reporter who himself auth

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Trade 12 Aug 2016 by Tojo Jose

RCEP: Officials to meet on tariff structure today; India to fight zero tariff formula

RCEP: Officials to meet on tariff structure today; India to fight zero tariff formula

The crucial meeting of the officials of the proposed RCEP is meeting in Vietnam. Meeting of the officials will negotiate on future tariff structure within the RCEP which has 16 members including ASEAN countries, India China, Japan, South Korea, Australia and New Zealand. The RCEP is an Asian alternative to the US led TPP where China is not a member. From the Indian angle, the proposed FTA discussion is very important as the country is the least prepared for the aggressive tariff cut suggested by others especially China. Beijing aims a zero tariff structure for bulk of the manufacturing commodities given its advantage in the sector. ASEAN is also not opposed to such a tariff struc

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