Indian Economy: News and Discussion

[proud_indian]

China may have found a way to keep India in the dark over trade deficit

China's policies have been under focus, putting Beijing in a spot over trade surplus.
ET Online|

Updated: Apr 15, 2019, 03.34 PM IST

Recently released data have brought to the fore a whole new angle in the India-China trade tangle. According to a story published in the Mint newspaper, China may have found a perfect way to blunt India's charge regarding the ballooning deficit in bilateral trade.

Trade numbers for 2018 showed India-China trade deficit falling by a significant $10 billion, mainly because of a sizeable increase in exports by India. Trade watchers cheered, Commerce Minister Suresh Prabhu even put out a celebratory tweet on the "whopping, unprecedented reduction" in India's trade deficit with China.

Going by Mint's analysis of these figures, there is probably a big catch, though. It shows that during the same period, there was a sharp rise in Hong Kong's export to India of the same goods that New Delhi buys from Beijing. This has now given rise to serious doubts that China may have begun using Hong Kong to camouflage the real size of its sale to India.

A data deep dive

According to Commerce ministry data, China saw its trade surplus with India go down from $59.3 billion to $57.4 billion in 2018. During the same year, Hong Kong's trade deficit with India — which stood at $3.9 billion in 2017 — turned into a $2.7-billion surplus on the back of rising exports to India. Combined figures showed India's trade deficit with Hong Kong and China expanded to $60.1 billion in 2018 from $55.4 billion the year before.

Data shows India's exports to China for 2018 stood at $16.5 billion — a rise of 30.4 per cent over the previous year. During the same period, India's exports to Hong Kong fell from $15 billion to $13.3 billion. These two figures combined, it made for a $900 million loss for India.

In the analysis, data from calendar year 2018 is being used because complete sectionalised figures for the entire 2018-19 are not yet out. In most cases, full-fiscal data generally follows the same pattern as calendar year data.

Hong Kong is an autonomous territory — a special administrative region — which was transferred to China by Britain in 1997. It continues to be run under the "one-country, two-systems" mechanism.

While calculating trade figures, India should always regard China and Hong Kong as one entity, a government official said.

Deliberate ploy, or coincidence?
The Mint analysis — product by product — explains how this latest phenomenon may be happening. India's imports of mobile phone spare parts from China fell by 34.1 per cent in 2018, while the import of the same product from Hong Kong jumped by a whopping 728 per cent during the same period.

China's export of LAN adaptor cards to India slipped by 32 per cent, but that of Hong Kong shot up by 173 per cent.

One of the most significant figures in the story pertains to digital monolithic integrated circuits. Imports by India of the item from China rose too, but the rise in imports from Hong Kong was eye-watering — 6017 per cent.

Of late, China's skewed policies have been under renewed focus, putting Beijing in a spot over burgeoning surplus with its trade partners. India is a case in point. To cut its massive trade deficit, India for some time has been pressuring China to open IT and pharma, among other sectors, for Indian companies.

Recent years have witnessed India's trade deficit with China rising in an out-of-proportion manner, owing primarily to the shooting import of electronic goods. It has put India's balance of trade under serious pressure.

According to Commerce ministry data, the India-China bilateral trade touched $84.44 billion in 2017, in which India's deficit was $52 billion. In FY18, exports to China had risen 31 per cent to $13.33 billion while imports were up just 24.64 per cent at $76.38 billion, which increased the trade deficit to a whopping $63 billion.

Coming back to the latest curious phenomenon, is it a deliberate ploy or just plain coincidence? The paper's query to China Embassy in Delhi elicited no response. China is perfectly capable of playing such tricks though, the article says quoting an Commerce ministry official.

https://economictimes.indiatimes.co...k-over-trade-deficit/articleshow/68884958.cms

 

[Why so serious?]

India's March exports pick up, help contain trade deficit
1 min read . 15 Apr 2019Aftab Ahmed and Manoj Kumar , Reuters

• Merchandise exports rose 11.02% to $32.55 billion in March from a year earlier
• Imports were up 1.44% to $43.44 billion in March from a year earlier

India Trade DeficitMarch Trade DeficitIndia Export Data

New Delhi: India's goods exports picked up in March, boosted by the weaker rupee despite a slowdown in global trade growth, helping the country to contain its trade deficit despite a surge in oil imports.

Merchandise exports rose 11.02% to $32.55 billion in March from a year earlier, while imports were up 1.44% to $43.44 billion during the same period, a statement by the trade ministry said on Monday.

Oil imports, the biggest item in the import bill, rose 5.55% to $11.75 billion, driven by a rise in Indian demand and increases in global crude prices.

India meets nearly 80% of its fuel demand through imports.

The ministry does not issue separate data for trade in services. That is issued in about a month's time by the Reserve Bank of India.

However, the ministry did issue estimates for goods and services trade in the year to 31 March, based on the full-year merchandise trade figures and the first 11 months of services trade.

Total exports of goods and services were estimated at $535.45 billion in the financial year, up 7.97% from a year earlier, compared with estimated imports of $631.29 billion, up 8.48%, the statement said.

Prime Minister Narendra Modi in 2015 set a target to double India's exports of goods and services to $900 billion, raising the country's share of global exports to 3.5% from about 2%, by 2020.

Modi, who is seeking a second term in a general election that began last week, has been criticised by industry and opposition parties for not doing enough to boost exports and create jobs in the manufacturing sector.


"The prospects for exports look very challenging going forward," said Ravi Sehgal, chairman of the Engineering Export Promotion Council, who referred to a slowdown in global trade amid trade tensions between the United States and China.

Exporters said the new government should make exports its top priority, as this sector has a huge potential for creating jobs, the most pressing need for the country.

 

[HariNalwa]

In short term we should focus export on markets that are about value rather than brand.. e.g. Asia , Africa, South America , central Asia

Where we can deliver good product for good price .. this will give basis and know-how to then build brand value and move up the chain to higher margin markets that require best-in-class

 

[HariNalwa]

Offcourse and our domestic market which is huge ... this should be the starting point

I can see huge opportunities abroad in various sectors:
- Auto: commercial vehicles , farm equip, 2 wheelers , good value passenger cars at low-medium point , Ev 2 wheelers
- Pharma
- IT : moving up the value chain.. the big companies need to start packaging the know-how into products and selling / supporting whole package ( not just support )
- services : maintenance contracts for planes, trains, grids oseas

 

[garg_bharat]

Modi government has removed infrastructural bottlenecks. Road, rail, ports, electricity sectors have seen bottlenecks removed. India is exporting finished goods while it used to export raw materials earlier. The efficiency is reflected in prices which have been under control.

The fact is India is enjoying unprecedented wealth under Modi.

Modi years have added one trillion US dollars to the GDP.

 

[garg_bharat]

There is a broad-based push to improve exports. The dollars earned will go straight to infrastructure projects. If Modi returns to power, Indians will see huge improvement in living standards in the next five years.

With the current momentum, India can overtake Germany in just three years.

 

[HariNalwa]

There is a broad-based push to improve exports. The dollars earned will go straight to infrastructure projects. If Modi returns to power, Indians will see huge improvement in living standards in the next five years.

With the current momentum, India can overtake Germany in just three years.

Yes agreed , we need at least 10 more year of Modi ji and the leadership at the helm.. this is a crucial period ...

3 trillion this year end
5 trillion before 2023
10 trillion by 2030

 

[HariNalwa]

Modi government has removed infrastructural bottlenecks. Road, rail, ports, electricity sectors have seen bottlenecks removed. India is exporting finished goods while it used to export raw materials earlier. The efficiency is reflected in prices which have been under control.

The fact is India is enjoying unprecedented wealth under Modi.

Modi years have added one trillion US dollars to the GDP.

Once the core infra is in place.. the economy can actually accelerate to 10-12 percent growth for a period. Similar happened with China 2004-2008 ... tail end of govt infra spending plus private sector growth from removal of infra bottlenecks.

If these things align also expect INR to increase against USD ... so building world class niche sectors with high barrier to entry ( capital, skills ) will be important - ISRO is a shining example...

 

[Raweg]

Bata Fined Rs 9,000 For Charging Chandigarh Customer Rs 3 For Bag

www.ndtv.com/india-news/bata-india-ltd-fined-rs-9-000-for-charging-chandigarh-customer-rs-3-for-bag-2025296%3famp=1&akamai-rum=off

 

[Prashant12]

Indian forex reserves continue to swell, adds another $1.1 billion

India's foreign exchange reserves continued its northward push, increasing by USD 1.105 billion to touch USD 414.886 billion in the week to April 12, the Reserve Bank data showed Friday.

In the previous week, reserves had increased by USD 1.876 billion to USD 413.781 billion.

In the reporting week, foreign currency assets, which are a major component of the overall reserves, rose by USD 646.4 million to USD 386.762 billion.

Expressed in US dollar terms, foreign currency assets include the effect of appreciation/depreciation of non-US currencies like the euro, pound and the yen held in the reserves.

The forex kitty had touched a life-time high of USD 426.028 billion in the week to April 13, 2018.

Gold reserves also increased by USD 77.4 million to USD 23.303 billion, according to the data.

The special drawing rights with the International Monetary Fund was up by USD 3.3 million to USD 1.458 billion. The country's reserve position with the Fund also increased by USD 378.1 million to USD 3.362 billion, the apex bank said.

https://www.businesstoday.in/top-st...ell-adds-another-11-billion/story/338723.html

 

[Haldiram]

Seeems like forex is growing every month by a billion.
Ultimately it will stagnate after a certain point

Why? it's just the beginning of the spurt. When countries increase their bilateral trade, they tend to gain and hold a larger stash of each other's currencies and stocks in reserve, for quicker transactions. India recently set up a new bank account exclusively for dealing with payments to-and-from Iran on Mumbai port (viz Chabahar trade). Japan also had a currency swap agreement. All of this is because other countries want a lower base "lock in rate" for INR-vs-their currency because they know Indian economy is going to boom.

We're at a moment in time which is like 2003-2004 (context : everything suddenly quadrupled in the next 3 years). Economy, forex reserves, jobs, everything just went up. Even that time, the situation was such that crude prices were going up and forex reserves seemed to be peaking out and people were saying that unemployment is high << exactly like it is now.

There was a slight bump in 2004, when people were writing obituaries of Indian economy, claiming that this is the peak for India, and everything would only go downhill from there.

Then. It. Quadrupled.

FIIs were net buyers in this correction. They withdrew in November 2018, and pumped in double the money in March 2019 when the market got cheaper. Money has just begun to flow into India through various channels. Direct FDI, FII, foreign MNCs buying land, expanding their employee base etc. Everyone is betting on India.

It went from 30$ B to 300$ B in the 2000-10 decade. That's a 1000% rise in just 10 years. From there, it has grown just 20% in the 2010-2020 decade. We have not peaked out, we have actually underperformed and starting to recover. The peaking out will happen in 2030. That's where the projections of a 10 trillion economy are coming.

 

[Indx TechStyle]

View: Here's what we know for sure about jobs in India
In 2016, unemployment was around 5%. More worryingly, the labor force participation stood at 50%, as per a survey.

A highly educated Indian youth is more than five times as likely to be unemployed as an uneducated one.

As nearly a billion Indians go to the polls this month and next, no one doubts jobs will be central to their vote. We just can’t agree on whether the employment picture is rosy or dark. While the government cites payroll data to claim significant job creation, the opposition holds up a leaked preliminary report that pegged unemployment in 2017 at 6.1 percent, which if true would be the highest rate in 45 years.

It might be more useful instead to concentrate on the most recent numbers we can all agree on, which come from a government survey of over 150,000 households across India between April and December of 2015. Although dated -- it was conducted before demonetization and the introduction of a nationwide goods-and-services tax -- the survey reveals several interesting things about employment in India, including one trend of particular relevance to policymakers and another to jobseekers.

The data suggest that, at least in 2016, unemployment hovered around 5 percent. More worryingly, the labor force participation rate stood at an unusually low 50 percent, meaning only half the working-age population was actively working or seeking employment. By comparison, China’s labor participation rate averaged 75 percent from 1990 to 2017. Rates in other emerging Asian economies such as Vietnam (77 percent), Indonesia (70 percent), Thailand (69 percent) and Bangladesh (57 percent) are typically much higher as well.

Among those who are participating, the situation varies greatly depending on where they live. Dynamic states which are actively improving their ease of doing business -- including Chhattisgarh (1.9 percent), Karnataka (1.5 percent) and Gujarat (0.9 percent) -- recorded the lowest unemployment rates. By contrast, progressive states that have scored well on human-development indicators such as literacy and maternal health don’t seem to be great job-creators: Unemployment in Kerala came in at 12.5 percent, while in Tripura and Himachal Pradesh it stood at 19.7 percent and 10.6 percent respectively. Not surprisingly, these states have lagged in improving their business environment.

The trend holds true when one drills down into specific categories of workers as well. It’s remarkable that states that have generally fared well on social indicators nevertheless register alarmingly high levels of female unemployment -- as high as 30 percent in Kerala. By contrast, the states generating most jobs have spread the wealth to women as well as men: Karnataka, Chhattisgarh and Gujarat have female unemployment rates as low as 2 percent, 1.8 percent, and 1.1 percent respectively. (Even there, however, the rates of female labor force participation remain disturbingly low, as they do across the country.)

Similarly, while unemployment is higher among youth in India (13.5 percent) than those over 30 years of age (1.5 percent), as it is in much of the world, economically dynamic states have also found jobs for younger workers. Gujarat (2.7 percent) and Karnataka (4.4 percent) have the least youth unemployment, while states which rank low on the ease of doing business, including Kerala (29.7 percent), Himachal Pradesh (32 percent) and Tripura (36.7 percent) report particularly high levels of youth unemployment.

If all that should persuade politicians from all parties of the need to focus on eliminating red tape and promoting investment-friendly policies, the numbers also contain sobering lessons for new job-seekers. What stands out is how concentrated unemployment is among the most-educated young Indians. Unlike in developed economies, where jobs increasingly flow to the better-educated, in India the trend is the opposite. Nearly 35 percent of Indian youth who possess graduate degrees and above are unemployed, while relatively uneducated young workers (6.2 percent unemployment) are doing much better. A highly educated Indian youth is more than five times as likely to be unemployed as an uneducated one.

Why might this be? The gap probably says something about the quality of the jobs being created, with most involving mundane or repetitive tasks. It also says something about the quality of Indian education: Too many engineers and other professionals are waving around degrees that are relatively worthless.

The latter raise expectations without providing necessary skills, so graduates prefer to remain unemployed rather than accept work that seems beneath their station. Some believe their time is better spent preparing for further tests and qualifications so they can, for instance, win particularly prized positions such as those in the government.

Leaders certainly have a responsibility to improve education and to generate more high-quality jobs. Until they do, however, at least some Indian youth need to think harder about whether a vocational education would serve them better than a fine-sounding degree. A little realism might brighten the jobs picture just a bit.

 

[Mikesingh]

The fact is India is enjoying unprecedented wealth under Modi.

Modi years have added one trillion US dollars to the GDP.

Try convincing the Cong, the Leftists, and the Lutyens media.

 

[garg_bharat]

Try convincing the Cong, the Leftists, and the Lutyens media.

They will be satisfied only when they get their 15%.

 

[garg_bharat]

Jobs situation for non technical university graduates may lag behind technical graduates as growth is focused on infra and industry. There is still shortage of tech manpower.

 

[sorcerer]

Hindustan Zinc Ltd becomes world’s ninth largest producer of silver
https://theprimetime.in/hindustan-zinc-ltd-becomes-worlds-ninth-largest-producer-of-silver/

 

[shankyz]

Government E-Marketplace (GeM) - A Silent E-commerce Revolution

https://www.financialexpress.com/in...lakh-of-smartphones-from-this-portal/1555838/

Government E-Marketplace (GeM): Government departments are buying lakhs of smart phones, bicycles, computers and printers online to cut cost and root out corruption in public procurement. However, these large scale online purchases don’t mean big bucks to top e-commerce firms such as Amzaon, Flipkart and Snapdeal.

Thanks to Prime Minister Narendra Modi’s Digital India initiative, a little known government portal is helping various ministries, departments, PSUs and state governments to purchase these items at competitive prices in a transparent manner.

Early this year when women and child development department of government of Maharashtra was looking to purchase over 1.2 lakh smart phones for its Poshan Abhiyan scheme, it did not turn to Amazon or Flipkart. It procured these phones at a total cost of Rs 100 crore, over Rs 8,300 a piece. The order was placed on Government E-Marketplace (GeM) portal through competitive bidding.

Similarly, when India Post Payments Bank (IPPB) was surveying the market to procure around 1.5 lakh smart phones, availability of large number of original equipment manufacturers on government’s platform helped it to identify the right product. The Bank placed two different orders on the same day in November 2018 to procure 1.5 lakh smart phones at a cost of Rs 153 crore.

Prime Minister Narendra Modi has launched Government E-marketplace (GeM) in 2016 to provide a transparent and efficient mechanism for the public procurement worth over Rs 3 lakh crore a year.

Within three years of its operation, the GeM notched a total turnover of over Rs 17,000 crore last year. Though the total value of confirmed orders was around Rs 22,000 crore but the orders worth over Rs 42,00 crore were delayed despite confirmation of the lowest bidder due to ongoing election process and other reasons.

In 2018-19, the total procurement by the state governments also crossed the total procurement by the central government on GeM platform.

Encouraged by the strong demands from the state governments, GeM CEO Radha Chauhan has set an ambitious target of notching a turnover of Rs 50,000 in the current financial year.

Sent from my ONEPLUS A5000 using Tapatalk

 

[Prashant12]

Government sells 'enemy properties' worth Rs 1,874 crore in April

NEW DELHI: In a first, the government has sold 'enemy properties' worth Rs 1,874 crore in April, as it seeks to fast-track the sale process of such assets to meet the Rs 90,000-crore disinvestment target set for the current fiscal.

The government has mopped up Rs 2,350 crore as the disinvestment proceeds in the first month of 2019-20, of which, Rs 476 crore was on account of IPO of Rail Vikas Nigam Ltd (RVNL) and Rs 1,874 crore from the sale of 'Enemy Property', according to data on the DIPAM website.

The Cabinet in November 2018 had given its go-ahead to the Department of Investment and Public Asset Management (DIPAM) to sell 'enemy shares' and 'enemy properties' -- which refers to the assets left behind by people who migrated to Pakistan or China and are no longer citizens of India.

Thereafter in March 2019, the Cabinet cleared the mechanism for monetisation of immovable 'enemy property' assets held under the custody of the Custodian of Enemy Property for India (CEPI).

According to the asset monetisation guideliness laid down by DIPAM, the CEPI or the Ministry of Home Affairs selects the properties for sale in consultation with stakeholders and the state government.

Such assets would have to be free of encumbrances and encroachment. The final approval for sale of such assets is given by a ministerial panel headed by the finance minister.

In the previous financial year, the government mopped up Rs 84,972 crore from disinvestment, including sale of 'enemy shares' worth Rs 779 crore.

https://economictimes.indiatimes.co...-1874-crore-in-april/articleshow/69112149.cms

 

[Haldiram]

government seeks to fast-track the sale process of such assets to meet the Rs 90,000-crore disinvestment target set for the current fiscal.

They are pretty aggressive with their divestment target.

The govt. has been using PSUs to sell massive stakes in stocks causing a collapse in many scrips at the expense of the retail investor.

LIC earns 72% more profit on equity bet

Life Insurance Corporation of India (LIC), the largest domestic institutional investor, earned a whopping 72 per cent more profit from its equity play in FY17 at Rs 19,000 crore.

They are doing short term intra-month trading to top up their cash reserves. A massive chunk of money that the retail traders lost was transferred to the govt.

The recent Sensex rally has helped the insurance behemoth book 19 per cent more profit in March quarter alone. During the April-December period of 2016, it had netted Rs 16,000 crore profit.

In FY16, LIC had booked Rs 11,000 crore profit from the market on a total investment of Rs 23 lakh crore.

 

[Haldiram]

Someone dumped 500 million shares of Yes bank today. Stock fell by 30% in a single day.

Benco, this is not Yes Bank, it's NO Bank