India’s current account deficit has registered its smallest deficit figure in the last seven years. Declining trade deficit amidst the global recession has helped to narrow down the trade deficit. According to the RBI's quraterly estimate about trade data for the quarter, other developments for the quarter include fall in services exports which is a matter of concern in the context of sharp decline in exports of goods. The current account deficit for the fourth quarter of the last financial year (2015-16) was just $300 million which is around 0.1% of GDP. This is significantly lower than US$ 7.1 billion (1.3 per cent of GDP) in Q3 of 2015-16 and marginally lower than US$ 0
Civilizational giants -India and Iran agreed to build the much anticipated gateway to central Asia- Chabahar port. On the finance side of the port development, PM Modi declared that India will open $500 mn line of credit. Iran’s reentry into mainstream world after the US ban removal has facilitated the deal. Already, India has expanded import of crude from Iran. The port is situated just little away from the Pakistan border and is expected to fuel India’s effort to get a transit route into Central Asia. Connecting the port, a corridor will be completed through Afghanistan. It is expected that the two sides will complete the detailed financial side of the project soon.
Apple’s visiting CEO, Tim Cook has announced a software development center in Bengaluru as India has emerged as the fastest growing market for the US based company. Through opening of some development facilities in India, Apple expect some policy leverage in its favor from the government for the company’s Indian plans. Cook has reached India after a Chinese visit where the California based company has announced $1bn investment in car hail app firm Didi. Being a high priced brand, Apple is facing a big hurdle in the Indian market because of competition from rookie smart phone manufactures. Already, other players from Korea and China are occupying the smart phone market
In a major agreement that may redirect capital flows into India, the government has modified Double Taxation Avoidance Agreement (DTAA) with Mauritius. Both countries have made the amendment thirty-three years into the running of the DTAA which was signed in 1983. As per the modification, capital gains made by a Mauritius registered company on share selling in India will be taxed in India. The tax becomes source based (tax should be paid at the source of tax (e.g. India) rather than residence based (e.g. Mauritius) of the entity that makes the income). This change will help India to reduce the DTAA misuses of round tripping and treaty shopping. Majority of the FDI coming from Mau
The government is not in favour of brining a retrospective sunset policy in the SEZ review, hinted commerce Minister Nirmala Sitharaman at the Loksabha. The commerce Minister added that government will not hurt the industry by imposing a retrospective withdrawal of an already declared tax concession like the sunrise clause. India’s SEZs are slow performers on export front compared to similar industrial and export agglomerations abroad. In a recent statement in the Parliament, the Minister stated that ‘special economic zones (SEZs) have seen a slowdown in terms of exports, increased number of applications for denotification, slower operationalisation and fewer n
The Commerce Ministry’s initial estimate of trade data for the disappointing year of 2015-16 shows that exports have dipped by 15.8% to $261 billion. Imports also declined for the year, registering a fall of 15.2%. imports for the year was $ 379 bn as against $ 448 billion during the previous year. This is the lowest export figure in five years. The previous low was 2010-11, where export figure was $ 242bn. Over the last one and a half year, India was registering monthly decline in exports. Exports figures have declined during the last fifteen months continuously. The major downward pulling factor for exports was the global slow down. According to the Ministry’s press
Commerce Ministry to make additional promotional measures for reviving export growth momentum Amidst continuous decline in exports, the Commerce Ministry has brought out plans for providing stimulus to the sector. Exports have registered fifteenth straight month decline and is set to settle near to $300 bn this year. Different export revival measures were suggested at the meeting of the Board of Trade (BoT) on Wednesday. The BoT is a newly constituted body that has 72-member comprising mainly exporters and is chaired by the Commerce Minister. A major suggestion put forward by the BoT is to extend Priority sector lending norm to the MSMEs (Micro and Small and Medium Enterprises)
The government has brought clarification to the long awaited FDI policy in the ecommerce sector. As per the notification by the DIPP (Directorate of Industrial Policy and Promotion), 100% FDI is allowed through automatic route in marketplace model of ecommerce. At the same time, FDI is not allowed in inventory model. The marketplace model is followed by most of the domestic firms including flipkart, snapdeal, and foreign competitor amazon. On the other hand, the inventory model is followed by Chinese aspirant Alibaba. The new policy gives a thumps down for Alibaba’s dream Indian market entry. But for the Indian firms, the step is a relief as they can go for external f
French companies will be making $10 bn investment in India’s infrastructure sector in the next five years. France’ visiting President Francois Hollande’s delegation has revealed that French companies have invested $1 bn per year in India over the last five years. Hollande is the Chief Guest for this year’s Republic Day Ceremony. The most important agreement between the two sides will be the Rafale deal that may cost India around Rs 36000 crore. Agreement between the two on the deal is delayed because of the defence offset content India demanded with the original plan. "The majority of these investments are meant for the industrial sector, which mak
In the context of changing environment, India is considering more diversification of its crude sourcing. At present, bulk of the crude -around 60%, is coming from Middle East. Diversification of supplies means tat the country is reducing its dependence on crude imports from Middle East led by Saudi Arabia. Already premium pricing by Saudi Arabia, Iran’s entry into the world market and declining prices have added different dimensions to the crude market. India is third largest importer of crude after China and the US. Minister of Petroleum and Natural Gas Dharmendra Pradhan at the India –Africa Hydrocarbon Conference at New Delhi has indicated that as a part of t
Dictionary on Indian Economy
- Logic of withdrawing Rs 1000 and Rs 500 notes
- Raghuram Rajan: The Gladiator returns to Chicago
- Why the GST reform is transformational?
- Good intention but poor thinking - what troubles demonetization?
- India Black Money Report: CBI underestimates black money at Rs 25 lakh crore
- High interest rate rather than inflation is the macroeconomic problem for India right now
- Japan’s first trade deficit in 30 years is part of the Global Shift
- Why we need an emergency monetization plan as well?
- Arvind Subramanian rocks with 'Chakravyuha' in Economic Survey
- NREGS: give respect to the tax payer’s money