Download India Economic News Consulate General of India January 2016

India Economic News
January 2016
Start-up India: Stand-up
moment for start-ups:
Prime Minister Narendra
Modi has launched another
flagship scheme of Govt of
India, ‘Startup India’. Tax
exemption on capital gains
and income tax holiday for
three years were among the
other big-bang incentives
announced
to
“promote
growth and profit”. The new
incentives for startups, known
as start-up action plan, would
include: i) Self-certification
regime;
ii)
Hassle
free
Registration through mobile
app; iii) No labour inspection
for initial 3 years; iv)funding
support worth Rs. 10,000
crores ; v) Credit guarantee
fund for startups; vi) 80%
rebate on patent application;
vii) Income tax relief for first 3
years; viii) Exemption from
Consulate General of India
Munich
Capital Gain Tax; ix) Easy exit
with the help of the proposed
Bankruptcy code (the exit
clause will be included in the
Insolvency & Bankruptcy Bill
2015 that will make exit
possible within 90 days); x)
incubation centres to support
Startups across the country; x)
relaxed norms of public
procurement for startups
Union government releases
first list of 20 smart cities:
The Union Government of
India has announced the
names of the first 20 urban
areas that will be developed
as smart cities with an
investment of Rs 50,802 crores
(approx. Euro 6865 million)
has been proposed in selected
smart cities and towns during
the five-year period. The list
includes five capital cities
among the 20 smart cities
chosen. The selected cities will
be equipped with basic
infrastructure, efficient urban
mobility and public transport,
IT
connectivity
and
egovernance mechanisms. In
the future, the government
plans to announce 40 cities
each to be developed as a
Smart City. Following is the
list of 20 smart cities:
1. Bhubaneswar; 2. Pune; 3.
Jaipur; 4. Surat; 5. Kochi; 6.
Ahmedabad;
7.
Jabalpur;
8.Vishakapatnam;9.Sholapur;1
0.Davangere;
11.Indore;
12.NDMC;
13.Coimbatore;
14.Kakinada; 15. Belagavi; 16.
Udaipur; 17. Guwahati; 18.
Chennai; 19. Ludhiana; 20.
Bhopal
economic expansion would
come down from 6.9 per cent
in 2015. On the other hand,
Indian economy is expected to
grow at 7.3 per cent in 201516. The Fund scaled down
world economic growth at 3.4
per cent in 2016 and 3.6 per
cent in 2017. The comparative
figures were 3.6 per cent and
3.8 per cent in the October
outlook.
The
IMF
cut
economic growth projection of
emerging markets by 0.2
percentage points, higher than
one percentage point in case
of advanced economies, both
for 2016 and 2017. However,
global growth is likely to be
marginally better in 2016 and
2017 compared with 3 per cent
in 2015.
IMF retains India forecast,
cuts world growth:
Centre plans sops to woo
medical tourists:
The IMF has retained India's
growth projections at 7.5% for
2016-17 and 2017-18 each,
even as it cut its forecast for
the global economy by two
percentage points for 2016
and 2017 calendar years on
depressed oil and commodity
prices.
Though
China's
economic growth projections
have been retained at 6.3 per
cent and 6 per cent for 2016
and 2017 respectively, the
According to Mr. Mahesh
Sharma,
Indian
Union
Tourism Minister, India plans
to roll out the red carpet for
medical tourists with a series
of initiatives being planned.
These include online approval
for medical visa, accreditation
of hospitals and wellness
institutions and establishing
fixed charges for services.
The Ministry has set up three
sub-committees
working
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under the National Medical
and
Wellness
Tourism
Promotion Board to look into
regulatory, accreditation and
marketing issues. The 25member
board
includes
experts from the related fields
and chambers of commerce.
The ministry also plans to set
up a dedicated web portal
highlighting
information
related to facilities and
services offered by hospitals,
health and yoga centres, spas,
wellness institutes along with
costs.
Indian luxury market to cross
$18.3
billion
by
2016:
Assocham:
An Association of Chambers
of
Commerce
of
India
(Assocham) study has stated
that with the increasing brand
awareness
and
growing
purchasing power of the
upper class in tier II and III
cities, Indian luxury market is
expected to cross $18.3 billion
by 2016 from the current $14.7
billion. As per the study, areas
such as five star hotels & finedining, electronic gadgets,
luxury personal care, and
jewelry performed well in the
year of 2015 and are expected
to grow by 30-35% over the
next three years. With the
luxury market expected to
grow at over 25% year on
year,
private
equity
investments (PE) in the luxury
segment are expected to
increase and support the
enhanced size of the Indian
luxury market.
India will be a
performer’ in 2016:
report:
‘star
PwC
India will be a “star
performer” among emerging
market economies and is
expected to clock 7.7% growth
in 2016, outshining China for
the second consecutive year,
according to a PwC report, a
global
consultancy
firm.
Among the seven emerging
economies
(China,
India,
Brazil,
Mexico,
Russia,
Indonesia and Turkey), India
will be a “star performer”,
while the Brazilian and
Russian
economies
will
contract and China will slow
down, the report further said.
While the G7 economies (the
US, the UK, Japan, Germany,
France, Italy and Canada) are
expected to grow at fastest
rate since 2010, led by the first
two,
the
E7
emerging
economies will grow slower
than their trend rate (but still
faster than the G7).
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Consulate General of India, Widenmayer Strasse 15,
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Foxconn plans to make India
hub for Africa, West Asia:
Taiwanese electronics major,
Foxconn intends to make
India
a
key
global
manufacturing
hub
for
servicing
markets
across
Africa and West Asia, which
may result in an inflow of
billions of dollars. Foxconn,
which has already started
making
phones
and
televisions in India as part of
its contract manufacturing
business, intends to widen the
engagement with the market.
The world's largest electronics
major is making products for
companies such as Sony,
Xiaomi, Gionee and Microsoft
at its India units and has plans
to grow the number of
locations from the present
ones in Andhra Pradesh,
Tamil Nadu and Maharashtra.
Foxconn chairman Terry Gou
had last year committed a $5billion
investment
in
Maharashtra.
Indian economy likely to
grow at 7.9% next fiscal:
India Ratings & Research:
According to India Ratings &
Research (Ind-Ra), the Indian
economy is expected to grow
by 7.9 per cent in the next
fiscal and may progress at a
similar pace over a couple of
years extending beyond 2019.
The agency added that the
various macro parameters
show that India has and is
likely to perform better than
its peers in the near term.
Agency is of the view that
even in the next five years or
so, the GDP growth is likely to
hover around this level of
sub-8 per cent and can surpass
it only if the host of policy
initiatives taken by the new
government actually show
results. Ind-Ra expects the
agriculture sector to grow at
2.2 per cent in 2016-17,
services sector at 9.5 per cent
and industrial sector at 7.6 per
cent. Against the backdrop of
low inflation, stable rupee and
the fact that the fiscal &
current account deficits are no
longer a threat, Ind-Ra
believes domestic demand
will remain the key driver of
India’s GDP growth in 201617. Consumer sentiments
which were hit by a high and
stubborn inflation over the
last few years, though still
subdued,
are
gradually
recovering.
Ind-Ra
also
expects the fiscal deficit of
FY17 to come in at 3.9 per cent
of GDP.
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Consulate General of India, Widenmayer Strasse 15,
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Apple plans to launch stores
in India:
Apple is now planning to
bring the ambiance of Apple
Stores to India - the world’s
second
largest
telecom
market. Apple Inc. has filed
an application with the
Department
of
Industrial
Policy and Promotion (DIPP)
to open its own branded
stores in India. The proposal
is under examined by DIPP. It
is not yet clear as to how
many stores it will open in
India or how much it will
invest. The American tech
giant as also applied for a
permission to sell its products
directly online following the
government’s
easing
of
foreign direct investment
(FDI) rules on single brand
retail. The latest move by the
world’s largest tech firm, by
market cap, shows the
increased importance of India,
where its sales crossed the $1
billion mark for the first time
in the last fiscal, according to
results filed with the Registrar
of Companies. At present,
Apple has a minuscule market
share of under 2% in
smartphone
market
as
compared to rival South
Korea’s Samsung Electronics
Corp., the largest smartphone
maker in India, closely
followed by India’s home
grown
brand
Micromax
Informatics Ltd.
World Bank to be anchor
investor in Rail Development
Fund: Suresh Prabhu:
According to Minister for
Railways, Mr. Suresh Prabhu
the World Bank would be the
anchor investor in the new
Railway Development Fund,
which would be used to fund
modernisation
of
Indian
railways. While announcing
that the fund would be kick
started soon as there is
unanimity in the World Bank
leadership, he added that the
World Bank leadership had
realized that based on the
performance in the past one
year, Indian Railways is in the
“right direction”. However,
Prabhu did not divulge the
size of the fund, but indicated
that it would be the largest
ever provided by the World
Bank to the Indian railways.
The International Finance
Corporation (IFC) would look
into the possibility of revenue
generation
through
nonrailway operation, he said.
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Consulate General of India, Widenmayer Strasse 15,
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Coke to set up plant in MP
industrial area:
Hindustan
Coca-Cola
Beverages has said it will
invest Rs 750 crore in phases
as the Madhya Pradesh
government develops its first
industrial area in public
private partnership on 679
hectares about 72 km south of
state capital, Bhopal. The area
is to be developed, operated
and maintained by a private
developer.
According
to
Audyogik
Kendra
Vikas
Nigam (AKVN), Bhopal, the
area will be developed,
operated and maintained by
the private player for a period
of 15 years. There will be no
hazardous industry and there
will be a zero-discharge
policy. Also, no company will
be allowed to discharge
effluents as the area is in the
vicinity of the Narmada river.
Coca-Cola [Hindustan CocaCola Beverages] has been
issued a letter of intent for
allotment of about 110 acres.
The company have plans to
set up six bottling lines at the
site.
RBI modifies norms for
credit
to
overseas
subsidiaries of Indian firms:
The Reserve Bank of India
(RBI) modified norms for
banks
to
extend
credit
facilities to overseas stepdown subsidiaries of Indian
companies to finance projects
undertaken abroad. The RBI
has
reviewed
its
2007
instructions permitting banks
in India to extend funded or
non-funded credit facilities to
step-down subsidiaries of the
overseas arms of Indian firms,
and has come out with
modified
norms.
The
immediate
overseas
subsidiary of the Indian
company, the RBI added,
must be directly controlled by
the Indian parent company
through any of the modes of
control recognized under the
Indian Accounting Standards.
In addition, the Indian parent
company must directly hold a
minimum
51%
of
its
shareholding. The RBI also
asked the banks to make an
additional provision of 2%, in
addition to country risk
provision applicable to all
overseas exposures, against
standard assets representing
all exposures to step-down
subsidiaries.
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Consulate General of India, Widenmayer Strasse 15,
80538 Munich, Germany. Web: www.cgimunich.com
Insurance FDI cap hike
results in cash inflow in JVs:
According
to
sources,
enhancement of FDI cap to
49% in insurance sector will
lead to greater flow of foreign
funds into India’s private JVs
and an investment of Rs 6,000
crore (approx. Euro 833
million) is expected into the
sector
during
2016.
Consequent upon passage of
the
Insurance
Laws
(amendment) Bill,
foreign
investors
have
started
ploughing capital into their
Indian joint ventures, raising
their equity holdings. As
many
as
10
insurance
companies have applied for
regulatory clearances to bring
in foreign investment of Rs
6,192 crore (approx.. Euro 860
million). They have applied to
insurance regulator IRDAI
and
Foreign
Investment
Promotion
Board
(FIPB).
According
to
Insurance
Regulatory and Development
Authority of India, the total
FDI in insurance sector as on
March 31, 2015, was about Rs
8,031 crore (approx. Euro 1115
million) .
India to build its heaviest
rocket to carry 10-tonne
satellites:
Indian
Space
Research
Organization (ISRO) plans to
build its heaviest rocket,
which can carry satellites
weighing 10 tonnes into space.
Currently, the space agency’s
geosynchronous
satellite
launch vehicle (GSLV MK-2)
can carry satellites weighing
only
two
tonnes.
The
proposed rocket would be
powered by a semi-cryogenic
engine — that runs on
kerosene and liquid oxygen.
Semi-cryogenic engines are
environment-friendly
and
bring down the cost of
launches significantly. The
design process for the semicryogenic engine has been
completed and it is being built
by Godrej Aerospace. ISRO,
however, did not set a timeframe
for
the
rocket
development.
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Consulate General of India, Widenmayer Strasse 15,
80538 Munich, Germany. Web: www.cgimunich.com
***
DISCLAIMER
This newsletter is a compilation of news articles
from various business e-newspapers and in no
way is an endorsement or reflection of
views of Consulate General of India, Munich.
For queries contact:
Mr. Asheesh Gupta, Consul (E & C), Consulate General of
India, Widenmayer Strasse 15, 80538 Munich, Germany.
Email: [email protected] , Web: www.cgimunich.com
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Consulate General of India, Widenmayer Strasse 15,
80538 Munich, Germany. Web: www.cgimunich.com