Indian Economy: News and Discussion

[IndianHawk]

It means that our manufacturing can survive only if gets government protection in the form of antidumping laws.
So there is no chance of us becoming exporters of manufactured products as because other countries will provide equal opportunities to China as well as India.

That logic works for new manufacturing capability .
We only need govt protection to establish new manufacturing units and sustain then for 3-4 years.

Once we have a viable manufacturing industry we can export plenty and best Chinese too.

For example our electronic exports have grown very fast recently. We are already a huge exporter of automobiles. We are huge exporter of generic medicine . Our smartphone exports have grown very fast too.

We are probably largest producer of two wheelers and major exporters.

 

[Sanatani]

The main reason are Chinese imports.

We can substitute a lot of them easily like data cable headphones , Chargers and toys ,small electrical things etc.

The problem is that whoever invests to build them in India will have to face chinese dumping and won't make profit for a while this prevents people from investing.

But if we apply huge tarriff on China or ban chiese supply outright we can give space for our industries to catch up. We did the same with ppe when we returned shitty Chinese products.

And we did the same with smartphone components as we kept increasing tarrff gradually on different components to promote domestic building. And now we are second largest smartphone maker in the world. And we have seen more and more smartphone components built in India now.

So basically our manufacturing can thrive if we give it protection from Chinese or asean dumping untill it reaches competitive scale.

The other issue is land availability for huge factories and labour reforms. Good thing is that many governments have built landpools and UP and MP have reformed labour laws.

Also refer to my post here to have a look at our present manufacturing trend.

India in facts and data - Myth busting thread

This thread will be used to impart accurate data and facts about India. Economy , defense spending , infrastructure progress . Investment , manufacturing energy sector. Etc. The goal is to remove common misconceptions about our current status in various sectors and in the world in general. So...

defenceforumindia.com

Loved your post.
One more doubt. We are successful in IT related services.
Where did we go wrong with manufacturing that we are not able to replicate the success of IT services in manufacturing too.

 

[IndianHawk]

Loved your post.
One more doubt. We are successful in IT related services.
Where did we go wrong with manufacturing that we are not able to replicate the success of IT services in manufacturing too.

Land and labor issues. plus too many restrictions on fdi in various sectors.
Also our infrastructure development has been too slow previously compared to china. But that again is connected to land acquisition and fdi .

Land acquition has been a nightmare for foreign firms only recently states have started to provide readymade landpool for factories and infrastructure..

As a result of that we have become 6th largest manufacturer in the world. Soon to be 5th.

Also our infrastructure development pace has started to match china.

Labour issue were final roadblock but now they are being solved too. In next 10 years we should become worlds second largest manufacturer given those changes. Ahead of Japan and USA and slightly behind or on par with china.

 

[nrj]

India’s forex reserves rise to $487 billion
India’s foreign exchange reserves rose $1.726 billion to $487.039 billion during the week to May 15, just short of its life-time high of $487.238 billion. After the reserves reached its previous lifetime high in the week to March 6, it fell by $11.983 billion in the week ended March 20, the highest fall since the global financial crisis of 2008, and subsequently increased.

India’s forex reserves rise to $487 billion

After the reserves reached its previous lifetime high in the week to March 6, it fell by $11.983 billion in the week ended March 20, the highest fall since the global financial crisis of 2008, and subsequently increased.

www.financialexpress.com

We should earn some interest on it. If we earn 3 to 4 pc, even then it will be a huge amount.

And who is giving 3%-4% interest earning ?

 

[Craigs]

And who is giving 3%-4% interest earning ?

Invest in blue chip companies worldwide. Dividend is at least 2% or greater. Many fallen angels are doing good as well. Now we do need to be careful which companies we choose but I do believe RBI has the necessary expertise to do that.

 

[IndianHawk]

Invest in blue chip companies worldwide. Dividend is at least 2% or greater. Many fallen angels are doing good as well. Now we do need to be careful which companies we choose but I do believe RBI has the necessary expertise to do that.

The way I understand our forex are mostly our holdings of us govt dollar bonds and other institutional bonds. So we will get whatever interest are promised on those bonds.

 

[IndianHawk]

India overtakes China in fintech funding in Q1

China, where the pandemic originated, has been particularly hit hard.Fintech startups in India attracted VC investments of $330 million in Q1 2020, compared with China’s $270 million

www.livemint.com

• China, where the pandemic originated, has been particularly hit hard
• Fintech startups in India attracted VC investments of $330 million in Q1 2020, compared with China’s $270 million

Get ready to hear more of these reports. As backlash for coronavirus builds up.

Some members were arguing that money diverted from china won't come to India.

But as I said before there is no better place than India for investment now.

 

[ashdoc]

India's worst ever recession is here, says CRISIL

india stares at worst ever recession

 

[nrj]

India's worst ever recession is here, says CRISIL

india stares at worst ever recession

Hardly a surprise, Covid-19 only accelerated the eventuality.

--

Agri output will be healthy this year, might even be better if rain gods are kind. Once again Kisan saves the country from total doom. We collectively owe so much to the farmers of this country.

 

[Rxbanda]

How long can it take for the economy to bounce back at least to pre-covid levels like 4-5% GDP growth?

 

[Kumata]

How long can it take for the economy to bounce back at least to pre-covid levels like 4-5% GDP growth?

I don't see any hope until we have a vaccine. Consumption need to be given a kick and right now people are in survival mode...Personally speaking , Until absolutely essential, i wont' go and make a high ticket purchase.... times are unpredictable... this virus have changed our life for ever IMO ...

 

[Mikesingh]

The only alternative country that can have the scale, skills & space to service American demand effectively is India - ⁦⁦
@HarvardBiz

 

[Craigs]

The way I understand our forex are mostly our holdings of us govt dollar bonds and other institutional bonds. So we will get whatever interest are promised on those bonds.

Forex reserves are earned first and then converted into bonds. There is no rule that says we have to buy US treasury bonds only or other sovereign bonds. If there is a will then there will be a way.

 

[Mikesingh]

I don't see any hope until we have a vaccine. Consumption need to be given a kick and right now people are in survival mode...Personally speaking , Until absolutely essential, i wont' go and make a high ticket purchase.... times are unpredictable... this virus have changed our life for ever IMO ...

Unfortunately, Modi's dream of a $5 trillion economy by 2024-25 has gone bust!

 

[here2where]

Unfortunately, Modi's dream of a $5 trillion economy by 2024-25 has gone bust!

<hip hop music starts>
Don;t blame it on Pooh...
coz it was ...

boo boo boo...
<music fades/>

<repeat till cows coo>

 

[here2where]

How long can it take for the economy to bounce back at least to pre-covid levels like 4-5% GDP growth?

When are you planning to take that next Bali/Sydney vacation, buy a second car for spouse to use for mall-hopping with friends, buy that nice kawasaki bike for Sunday morning rides to the hills/villages, 70k iphones, that next playstation P4/5/6/whateva, etc etc etc.

I dont see anyone with an ounce of common-sense thinking along these lines for the next 1 year atleast. Not with jobs vanishing like snow in the desert. We are in survival mode now.

I don't see any hope until we have a vaccine. Consumption need to be given a kick and right now people are in survival mode...Personally speaking , Until absolutely essential, i wont' go and make a high ticket purchase.... times are unpredictable... this virus have changed our life for ever IMO ...

Bit ticket casualties are RE (defaults rising on RE 'investments' and prices falling thru the floor) and Automobiles (WFH becoming common and drivable vacations rare).

 

[IndianHawk]

Forex reserves are earned first and then converted into bonds. There is no rule that says we have to buy US treasury bonds only or other sovereign bonds. If there is a will then there will be a way.

It's not a rule but a practical reality. Also us bonds are the safest investment out there.

 

[IndianHawk]

Unfortunately, Modi's dream of a $5 trillion economy by 2024-25 has gone bust!

Depends on how rupee behaves in next 4-5 years.

When china was 11 trillion ppp economy ( which we are right now too) it was already 5 trillions economy in USD because yuan gained strength fast.

In actual production of economy we are already there.
But a weak rupee is showing our size as much smaller.

 

[Rxbanda]

It's not a rule but a practical reality. Also us bonds are the safest investment out there.

sirji, ek question.
Is the ForEx increasing because RBI is buying USD bonds? If that is the case, will this not weaken the INR?

 

[IndianHawk]

sirji, ek question.
Is the ForEx increasing because RBI is buying USD bonds? If that is the case, will this not weaken the INR?

It does weaken the rupee. But rbi has to secure forex more than equivalent of 3-4 months import.
Iirc rbi is targeting 700-1000 billion of forex.
To have complete import security .

Besides weak rupee will lead to boost in exports. Once we have export surplus in few years rupee will strengthen back on the strength of exports .