It is unfair to quote insiders so pointedly esp. when they've shared info in confidence.Anoop.G wrote:This has been confirmed to me by last night the Tata's CEO designate of this venture. He is a batchmate of mine and an old Tata employee. The formal appointment is yet to be made.nam wrote:Confirmation from the TamilNadu CM himself.
https://twitter.com/CMOTamilNadu/status ... 2165552128
You seem to believe that India can still emerge as a major world hub for manufacturing, especially by becoming part of global supply chains at a time when companies are looking to de-risk their exposure to China. What is the progress in this regard? Can India emerge as a credible alternative to China in global supply chains?
India has not started speaking about manufacturing only after the pandemic. We have been working on increasing
manufacturing for sometime now. India is, after all, a young country with a skilled workforce. But India doesn’t believe in
gaining from the loss of others. India will become a global manufacturing hub on its own strengths. Our effort is not to
become some country’s alternative, but to become a country which offers unique opportunities. We want to see the
progress of all. If India progresses, 1/6th of humanity will progress.
We saw how a new world order was formed after World War II. Something similar will happen post Covid-19. This time,
India will ride the bus of manufacturing and integrating in global supply chains. We have specific advantages in the form
of democracy, demography and demand.
So, what are the policy measures you propose to enable India take this giantleap?
India’s pharma sector, during the past few months, has already demonstrated the way ahead. India has emerged as a key
player in global pharma supply chains. We have become the second largest manufacturer of PPE kits in a very short
duration. India is also making a mark in manufacturing technologically advanced items like ventilators and from almost
negligible capacity earlier, we are now manufacturing thousands of ventilators in quick time.
From independence till the pandemic started, around 15-16 thousand ventilators in working condition existed in
government hospitals across India. Now, we are moving rapidly towards adding another 50000 ventilators these
hospitals.
Now, that we have successfully established this model. We can emulate it in other fields. Our recently launched
production-linked incentive (PLI) schemes for mobile manufacturing, pharmaceutical and medical devices are good
examples of this focused and targeted approach to attract internationally reputed investors to create capacities with
global scales and competitiveness, as well as make India their export hub. In the mobile phone segment alone, it’s
expected that production worth over 10 lakh crore will take place over the next five years, of which 60% will be exports.
According to Moody’s, 154 greenfield projects from the US have come to India in
2020, compared to 86 in China, 12 in Vietnam and 15 in Malaysia. This is a clear
indication of global confidence in India’s growth story going forward. We have
laid strong foundations to make India the foremost manufacturing destination.
The corporate tax cut, introduction of commercial mining in coal sector, opening
up of space sector for private investment, lifting defence restrictions on air routes
for civil aviation use, are some steps that will go a long way in boosting growth.
But what we should also understand is that India can grow only as fast as our
states do. There needs to be healthy competition among the states in attracting
investment. States are also competing on the Ease of Doing Business rankings.
Incentives alone may not be enough to bag investments, states will need to build
infrastructure and follow good development-related policies.
Demand for online study support is fueling business for Indian teachers, who are tutoring American children on everything from calculus to computer programming. They are helping U.S. high-school students get through their homework and college students better understand their economics and engineering reading.
“One of the massive benefits of the Indian economy is the education system,” said Erik Manuevo, vice president of content and operations at Chegg. “In subjects that are often challenging, the Indian education system is better equipped to train individuals to become experts.”
There is no doubt that the first round of the stimulus has had a positive impact on the economy and anyone who says otherwise is perhaps ignoring the stringency of the lockdown and its implications for companies that saw a severe cash-flow problem which could have forced them towards bankruptcies.
The focus, now, however, is on the growth recovery process as we attempt to address the key challenge of restoring economic activity to the pre-Covid-19 levels as quickly as possible.
It would be worthwhile to remember that this will remain a challenge till the pandemic is contained with the availability of a vaccine.
Nonetheless, a bulk of the policy support extended on the supply side would require now for demand to be back into the system to help restore the balance sheet of private companies.
The government has thus far decided to bank on government employees to drive the final consumption in its second stimulus and we will have to wait to see its impact over the coming few quarters.
However, the issue of providing support to the economy is far from over as government and the Reserve Bank of India will have to continue with the policy support well into the next financial year.
Exports earnings form a key high frequency economic indicator. September 2020 was the first month of goods export rise after a six month falling streak. Exports registered almost 6 per cent year on year growth over September 2019 and hit the $27.58 billion mark.
In a Covid-19 pandemic-marred year, this is a good sign. Indian exports have recovered much faster than imports, indicating an operational resilience in a very tough year. Not only did the lockdowns created day to day hassles for manufacturers, the global demand itself has been under pressure with all major buying centres for Indian goods witnessing their own economic slowdown.
In fact in June this year, India recorded its first-ever trade surplus since January 2002. That was the era when India did not depend much on Chinese imports and was taking small steps in capturing some of the merchandise markets. But it was all downhill since then, until the pandemic-led dynamics produced a $790 million trade surplus this year.
Exports earnings form a key high frequency economic indicator. September 2020 was the first month of goods export rise after a six month falling streak. Exports registered almost 6 per cent year on year growth over September 2019 and hit the $27.58 billion mark.
In a Covid-19 pandemic-marred year, this is a good sign. Indian exports have recovered much faster than imports, indicating an operational resilience in a very tough year. Not only did the lockdowns created day to day hassles for manufacturers, the global demand itself has been under pressure with all major buying centres for Indian goods witnessing their own economic slowdown.
In fact in June this year, India recorded its first-ever trade surplus since January 2002. That was the era when India did not depend much on Chinese imports and was taking small steps in capturing some of the merchandise markets. But it was all downhill since then, until the pandemic-led dynamics produced a $790 million trade surplus this year.
These industries are also labour intensive, which adds to the job market normalisation. As several of Indian export destinations are witnessing a second wave of the Covid-19 pandemic, the uncertainty may continue for some more time.
With the government looking to capitalise on the global trade momentum away from China, next few months will be crucial for Indian exports. Not only this year’s trade picture needs to improve, but there’s also a directional one-time opportunity to tap.
Nonetheless, despite all the issues and disruptions across the supply chain, it is heartening to see the Indian exporters getting their act together in the last couple of months. The export increase to the US and the trade deficit narrowing with China is good news. Sustaining this over the full year will be key to building on the idea of Aatmanirbhar Bharat.
What took so long? Perhaps some thought that it's not a good idea to antagonize the world's 2nd largest economy while you're trying to develop? Imagine if China for the past 40 years decided to curb Japanese investment and imports due to territorial disputes, or rejected Taiwan for the paused Civil War. You can't do everything at once. If your priority is economic growth, which priority are you willing to sacrifice to accomplish it?Mollick.R wrote:Tightening the screws on Chini guys.........
This also begs same repeatedly asked questions.......
Why it took so Long ? & Why it was being ignored in first place to begin with ??
India issues quality control order for some leather goods to restrict cheap imports
By Kirtika Suneja, ET Bureau Last Updated: Oct 29, 2020, 01:33 PM IST
NEW DELHI: India on Thursday notified a quality control order on leather footwear and products in a move that will restrict their cheap imports into the country the central government, after consulting the Bureau of Indian Standards (BIS), is of the opinion that it is “necessary or expedient so to do in the public interest”.
The Department for Promotion of Industry and Internal Trade (DPIIT) mandated the BIS with the certification of ten such products including leather safety boots and shoes, canvas boots rubber sole, sports footwear and antiriot shoes in the Footwear made from Leather and other materials (Quality Control) Order, 2020. India imported leather articles worth $ 453.12 million in FY20 of which $318.45 million came from China.
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The order follows the Toys (Quality Control) Order that requires all toys and material for children below 14 years to be certified by the BIS which is India’s national standards body.
The department had in January issued quality norms to control imports of steel tubes, tubulars and other wrought steel fittings, steel tubes for structural purposes and water wells, along with heavy duty electric cables, aerial bunched cables, elastomer insulated cables, welding cables, shot firing cables and halogen-free, flame retardant cables.
Toys, furniture, sports goods and glass items are some of the products in a list of about 370 for which technical standards have been in the works since late last year and seek to reduce dependence on imports and improve domestic manufacturing.
Read Full Article Here//ET Link
https://economictimes.indiatimes.com/ne ... content=23
very good overviewVamsee wrote:A new growth formula for manufacturing in India
India is at a decisive point in its journey toward prosperity. The economic crisis sparked by COVID-19 could spur reforms that return the economy to a high-growth track and create gainful jobs for 90 million workers to 2030; letting go of this opportunity could risk a decade of economic stagnation. A new report from the McKinsey Global Institute identifies a reform agenda that could be implemented in the next 12 to 18 months. It aims to raise productivity and incomes for workers, small and midsize firms, and large businesses, keeping India in the ranks of the world’s outperforming emerging economies.
Chennai: Among the emerging nations, India seems to be the worst affected by the Covid-19 pandemic as the strength of the economy has deteriorated the most in India in the first half of 2020, finds a study.
The Investors’ Macro Ratings Index, which looks at investors’ perception of the economy based on parameters like real GDP growth, inflation, fiscal deficit and bank credit, has deteriorated in all the emerging economies, as per a report by Motilal Oswal Financial Services. However, India was the most affected in the first half and Taiwan was the least affected. The study examined macro-economic parameters in emerging economies like India, Brazil, China, Indonesia, South Korea, Malaysia, Russia, South Africa, Taiwan and Thailand.
As per IMF’s projection, India’s real GDP growth is expected to contract 10.3 per cent in 2020, which is the highest contraction among the 10 emerging markets. India is also the only economy with a double-digit contraction. On the other hand, China is expected to see 1.9 per cent growth, the highest among all of them.
At 4.9 per cent retail inflation in 2020 will be the highest in India. Inflation has eased in most of the emerging economies, except India. Average inflation during the nine-month period of 2020 has more-than-doubled in India, while in most of the emerging nations it was lower than the same period in 2019.
Interesting numbers. I would assume some of the imports go towards creating export products, however given the value add, the cost of that imports will be way lower than exports.Suraj wrote:So far in the current fiscal year:
Foreign portfolio investment: $8.5 billion net
FDI (April-Aug): $25 billion
Foreign exchange reserves: increased from $475 billion to $560 billion (+$85 billion)
Trade (April-Sept):
Merchandise exports: $126 billion (-21%)
Merchandise imports: $148 billion ( -40%)
Two issues with that comparison. The investment by Chinese companies is no where comparable to the level of technology investment provided by Japan & Taiwan. Basically Chinese FDI (in cash or material) doesn't move India's needle. The biggest "technology" investment is cheap mobile phone assembly plant.DavidD wrote: What took so long? Perhaps some thought that it's not a good idea to antagonize the world's 2nd largest economy while you're trying to develop? Imagine if China for the past 40 years decided to curb Japanese investment and imports due to territorial disputes, or rejected Taiwan for the paused Civil War. You can't do everything at once. If your priority is economic growth, which priority are you willing to sacrifice to accomplish it?
Adhering to the warning, I'll avoid geopolitics and reply to the economics part. I'm pretty sure Japanese investments in China in the beginning were manufacturing of very cheap stuff, and smartphones are pretty appropriate IMO relative to the technological level of Chinese manufacturers right now. The Japanese/Koreans etc. aren't exactly strangers to subsidies either.nam wrote:Two issues with that comparison. The investment by Chinese companies is no where comparable to the level of technology investment provided by Japan & Taiwan. Basically Chinese FDI (in cash or material) doesn't move India's needle. The biggest "technology" investment is cheap mobile phone assembly plant.DavidD wrote: What took so long? Perhaps some thought that it's not a good idea to antagonize the world's 2nd largest economy while you're trying to develop? Imagine if China for the past 40 years decided to curb Japanese investment and imports due to territorial disputes, or rejected Taiwan for the paused Civil War. You can't do everything at once. If your priority is economic growth, which priority are you willing to sacrifice to accomplish it?
Second, when was the last time Taiwanese or Japanese troops intruded in to China and killed 20 PLA troops?
It is not as if India companies cannot produce majority of the goods imported from China. It is done because it is cheaper, helped by heavy subsidies from CCP to undercut competition.
US & India together make up 95% of Chinese trade surplus! If CCP doesn't like to behave, they can watch the surplus disappear.
Adhering to what warning? This isn't a general economics thread, if it goes away from the topic of "Indian economy," Suraj is still going to wield the thunderbolt.DavidD wrote: Adhering to the warning, I'll avoid geopolitics and reply to the economics part....
India stands "nowhere".
That's exactly what I used to think about electrolyzer tech. But there seems to be some movement in this direction.KL Dubey wrote:^^Let's not get too excited about some random news article. There is no $700 bn new business on the horizon here. Most of the claims in the article are BS.
A water electrolyzer is no super duper technology. Its just a very expensive way to make hydrogen. There is very little innovation here if any. Just because some Chinese company is making them doesn't mean we should jump in too.
A gauge of activity across India’s manufacturing sector jumped to the highest in more than a decade as sales continued to surge. The IHS Markit India Manufacturing Purchasing Managers’ Index rose to 58.9 in October 2020—the highest since mid-2008—from 56.8 in September. A reading over 50 indicates economic expansion. New orders and output at Indian manufacturers continued to recover from the Covid-19-induced contractions seen earlier in the year, with PMI results for October highlighting historically sharp monthly rates of expansion, said Pollyanna De Lima, economics associate director at IHS Markit.
The ongoing relaxation of Covid-19 restrictions, better market conditions and improved demand helped manufacturers secure new work in October. In response to strong sales gains and softer containment measures, firms lifted production at the strongest pace recorded since late-2007, according to the release. Consequently, quantities of purchases rose at the quickest pace in just under nine years. Export orders also picked up, recording a rise most pronounced in close to six years.
IndeedSuraj wrote:Clearly, the Hindu festival season has done wonders to revive the animal spirits of the economy after the summer lockdown.
https://www.businesstoday.in/current/ec ... 17602.htmlANI
@ANI
UPI crossed 2-billion transaction mark in Oct 2020. UPI volume has grown 80% from 1.14 billion transactions in Oct 2019 to 2.07 billion transactions last month. Transaction value jumped 101% from Rs 1,91,359.94 crores to Rs 3,86,106.74 crores:Amitabh Kant,NITI Aayog CEO
New Delhi: Finance secretary Ajay Bhushan Pandey on Sunday hinted that the government is working on another stimulus package but he refrained from giving a timeframe.
"We keep monitoring the situation on the ground to assess which sector of the economy or segment of the population needs what kind of help at which time and respond accordingly. We keep taking suggestions from industry bodies, trade associations, various ministries and after going through their suggestions and requirements of the economy, we come out with timely measures," Ajay Bhushan Pandey said in an exclusive interview to news agency ANI.
Mr Pandey added that the government was working on the stimulus package and deliberations on further interventions were on.
The October GST collection has been ₹ 105,155 crore which is 10 per cent higher year-on-year for the corresponding month last year. This September, the economy had also shown 4 per cent growth at ₹ 95,480 crore in GST collections year-on-year. Further, the country has seen a growth in electricity consumption, exports, and imports, he said.
"September and October data shows that we have reached Pre-COVID-19 level and gone into positive territory. If we compare with the last year, the E-Way bill in September has seen year on year growth of 10 per cent and in October it has seen a growth of 21 per cent," he said.
"If we are able to maintain this growth for the next five months, then we can say that we can transition from deep negative zone to near-zero growth zone by March 2021. International Monetary Fund (IMF) has projected India''s GDP to contract 10.3 per cent this fiscal year, revised from its forecast of a 4.5 per cent decline in June," he added.
"The dilemma for governments across the world was creating a balance between protecting lives and livelihoods. India took the path of a strict lockdown to ramp up health infrastructure and focused on human lives. This strategy has paid off," Reddy said.
She observed that science evolved to give better cures, medical infrastructure was created, supplies like PPEs ramped up and our death rate has been contained.
"It's clearly time for bold actions on the livelihood front. The recent monetary policy assures that the government and the regulator will do everything it takes to keep the economy afloat. Let us start pushing our growth agenda vigorously," said Reddy.
"As we can see the initial green shoots of recovery have begun," she added.
Active cases are coming down despite normalisation of economic activities. A vaccine breakthrough seems to be on the horizon. Lower oil, gold and Chinese goods imports have made India current account-surplus. Foreign exchange reserves are about to exceed foreign exchange debt. Global firms are opening up their purses for direct as well as portfolio investment. Agriculture reforms will materially benefit a large rural population. Labour reforms and postal life insurance schemes are steps in the right direction for India becoming a manufacturing hub, although a lot more needs to be done on the ground.
The September 20 quarterly results are by and large ahead of street expectations. Margins have expanded across sectors due to deep cost cuts. In sectors like auto and consumer durables, volumes are ahead of expectations. Many attribute it to pent-up demand. Demand, pent up or otherwise, has recovered due to steps taken in the past. However, it needs to be sustained in the future by further measures.
The monetary policy is accommodative but credit transmission needs to improve further. Policy rates are at lifetime low levels but the cost of borrowing needs to be lowered for below-AA rated borrowers. Fiscal stimulus has supported growth at the bottom of the pyramid but sectors like travel, tourism, hotel, retailing, aviation, infrastructure etc require more support. The path of fiscal prudence is important but it needs to be achieved by raising non-tax resources like proceeds from strategic divestment and monetisation of assets, unlocking capital stuck in gold lying in tijori etc.
Ease of doing business has improved but rule of law needs to be improved. Despite good intentions, commercial disputes are getting addressed like the never-ending trial of the 1992 security scam rather than the quick, everyone-wins solution of Satyam. Our laws are being made for the lowest common denominator as crooks escape without adequate punishment. This increases the cost of compliance for the rest. Investment cannot pick up sustainably unless rule of law is experienced by investors. Big has become bigger in these challenging times, but eventually small and medium firms need to become competitive and prosper.
iMac_too
@iMac_too
Just watch it for Rajiv Bajaj
Bullet points:The original assessment was that there will be three stages of economic activity — the first will be the lockdown stage where economic activity is restricted, the second will be the normalisation stage where growth moves closer to the pre-Covid levels and the third is the growth revival process, where economic activity turns green and gradually begins to move towards the norm of 6-7 per cent.
Second quarter (Q2) was the normalisation stage — and this was already highlighted using several high-frequency indicators in an earlier article that can be accessed here.
The second quarter indeed saw improvement in several high-frequency indicators as economic activity started to normalise albeit at a slow pace.
The interesting fact, however, pertains to the surprise results of a few private sector banks — namely HDFC and ICICI Bank.
Ira Duggal of Bloomberg Quint made an important observation based on the company’s quarterly performance as she highlighted the strong growth in the home mortgage products offered by the banks.
This is an important sign as India’s residential real estate sector has faced its own sets of challenges over the last few years. The increased demand for home loans is, therefore, important to ensure our economy can fire on all its engines.
Lower interest rates along with price correction can be two potential reasons that are driving the decision for people to purchase residential real estate.
However, an equally important reason could be the pandemic — and forced savings as an outcome of the lockdown which could be finding a way to be invested into residential real estate.
But the goods and services tax (GST) collections in the month of October for the month of September further indicated an impressive growth even as contact services remained muted.
Sectors such as tourism, civil aviation and hospitality continue to operate at substantially lower capacity than pre-Covid times. Despite this constraint, a healthy increase in GST collections indicates an accelerated economic recovery in the non-contact services sector.
For the first time this year, the GST collections crossed the Rs 1 lakh crore figure in October and were nearly Rs 10,000 crore more during the same period in 2019. This is consistent with the estimates contained in the joint paper cited earlier.
Add to this, the recently-released Manufacturing PMI, which was 58.9 vs 56.8 in the previous month marking the strongest improvement in over a decade. The level of fresh orders and output both continue to recover indicating a healthy restoration of the corporate sector balance-sheet.
More importantly, the growth was led by the intermediate goods category, which indicates strong backward and forward linkages. Along with this, consumer and investment goods sub-sectors also saw a robust growth combined with a strong growth of new export orders.
In a positive development, the total number of E-way bills generated in October surged to 64.1 million, the highest tally recorded since the E-way bill system was introduced more than two years ago, reports Economic Times.
This comes as 27,400 taxpayers generated about 49.5 million electronic invoices in since 1 October when the e-invoice system under GST came into force for all companies with an annual turnover of Rs 500 crore or more.
Who's then going to pay for expenditure? Or should we just accept 20% fiscal deficit, further govt borrowing, high cost of corporate borrowing and extreme inflation.vijayk wrote:Wouldn't this recovery be further helped by reducing GST rates?
JTull wrote:Who's then going to pay for expenditure? Or should we just accept 20% fiscal deficit, further govt borrowing, high cost of corporate borrowing and extreme inflation.vijayk wrote:Wouldn't this recovery be further helped by reducing GST rates?
