India International Political Economy

The India economy is expected to surpass China as the fastest growing economy in 2009 according to Businessweek.

The key to such a milestone is for the India economy to reach a least 6.5 percent growth in Q4 2008 which could surpass China as its exports continue to decline and as India capitalizes on domestic demand.

India government officials have declared that India economic growth adjusted has hit 7.9% and 7.6% in the first two quarters of 2008.

The India trade deficit rose to $7.6 billion as the global economic crisis takes hold of the India economy according to Bloomberg.

India exports fell in December for a third straight month while India imports were up 8.8 percent leaving the India trade deficit in less than a desirable position for the Indian government.

The Federation of Indian Export Organizations trade group expects further declines in Indian exports could lead to as much as 10 million job losses.

In addition the World Bank estimates that international trade will decline in 2009 for the first time in 25 years presenting a challenge for emerging economies to get up with economic growth targets.

The India economy gained more relief as the India inflation rate hit a low of 5.64 percent according to Bloomberg.

The India economic news put the inflation rate at an 11 month low as commodity prices and consumer demand ease in the wake of the global economic crisis.

Although the inflation news is positive for Indian consumers it is concerning for the Indian government as the India economy has slowed for two consecutive quarters. [Read more →]

The Reserve Bank of India (RBI), India’s central bank, lowered its growth expectation for the India economy to 7 percent according to Bloomberg.

The India economic news comes despite the Reserve Bank of India’s (RBI) recent decision to hold interest rates that would have otherwise helped spur the India economy.

The new India economic growth forecast by India’s central bank is down from its initial target of 8 percent for 2009 and is primarily driven by the current global economic crisis. [Read more →]

The India economy saw India’s central bank, the Reserve Bank of India (RBI), maintain interest rates despite the global economic crisis according to Bloomberg.

The key driver of the decision by the Reserve Bank of India (RBI) to maintain rates is concern over India’s fiscal deficit which is now expected to be higher than originally estimated and will ultimate hurt the India economy if not addressed.

The India economic news sent Indian bonds to its lowest levels in more than two weeks. [Read more →]

The Indian economy is expected to grow as its slowest rate since 2003 as 6.8 percent according to Bloomberg.

The poor forecast for the India economy comes in the wake of the global economic crisis and as demand for outsourced IT services continues to wane.

Fortunately for the Indian economy, inflationary concerns are at bay as wholesale price inflation came down to 5.6 percent in January which is down half of what it was in August. [Read more →]

Vittorio Colao, Vodafone’s global CEO, announced that Vodafone plans to further invest in India but is concerned over the clarity of India’s foreign direct investment (FDI) policy according to ET Bureau.

Vodafone’s criticism of India’s foreign direct investment (FDI) policy is that it too complex with multiple interpretations unlike China’s policy.

Vodafone’s last India investment of Hutchison was delayed by several months because of controversy over India’s foreign direct investment (FDI) policy.

Vodafone’s India investment news went on to state that Vodafone will not sell its 4% stake in Bharti Airtel. [Read more →]

The investment arm of Intel, Intel Capital, has announce it will invest in India $23 million according to AP.

The India investment news comes as Intel continues to loose revenues in the wake of the current global economic slowdown.

Intel’s investment in India will go towards the purchase of three Indian companies involved in online marketing to education: One97 Communications, IndiaMART.com and Global Talent Track. [Read more →]

The India economy saw car sales in December decline 7 percent according to Bloomberg.

The poor India economic news comes a car sales in India have declined five consecutive months and as the India economy continues to loose steam in the wake of the current global economic slowdown.

Currently, Indian banks charge as much as 15 percent for car loans so the recent decision by the Indian government and India central bank to reduce interest rates should lead to lower interest rate requirement and spur car sales or at least stop the bleeding moving forward. [Read more →]

The India economy’s most-watched inflation measure, the wholesale price index, fell from 8.4 percent to 8 percent according to AP.

India’s economic news by the Ministry of Commerce is welcome as the India central bank aims to hit an inflation target of 5 percent after hitting a high of 12.9 percent in August.

Lower inflation on food prices, etc. will allow the India government more room to adjust interest rates accordingly to keep up with Indian economic growth targets which the World Bank expects at just 5.8 percent in 2009.

The Indian economy received unexpected but welcome news as the inflation hit 8.98 percent according to Bloomberg.

The India economic news comes as India’s inflation rate has continued to drop from a 16 year double digit high of 12.91 percent in August. [Read more →]

The Toyota Motor Corp of Japan has announce that it will invest in India $711 million according to INAS.

The Indian investment is part of an extensive expansion plan for Toyota Kirloskar Motors that expects to produces a capacity of 100,000 units annually starting in 2010.

Toyota Kirloskar Motors is a joint venture between Toyota Motors and India’s Kirloskar. [Read more →]

The Bank of India cut its prime lending rate by 75 basis points in an effort to help the Indian economy weather the current global economic crisis according to Reuters.

This leaves the prime lending rate at 13.25 percent which help the India economy continue its growth trajectory as the global economy slows.

A rate cut of this magnitude less than 6 months ago would have overheated the Indian economy as inflation continues in double digits. [Read more →]

The Indian economy saw its inflation rate drop to 10.68 percent in October according to Xinhua News Agency.

The wholesale price index (WPI) which includes prices for items such as raw rubber and groundnut seed declined 0.3 percent in addition to a 0.4 percent decline in items such as power, fuel, light and lubricants.

This Indian economic news continues to point the global economy and emerging markets towards a deflationary scenario in conjunction with a deep recession. [Read more →]

India’s inflation rate has slowed for the third week in a row offering welcome relief to the Indian economy according to International Herald Tribune.

With inflation at 3.72 percent a year ago, a drop from 12.34 percent to 12.10 percent is significant consider the Indian economy is ripe to overheat.

Consensus is the Reserve Bank of India (RBI) will continue tightening the money supply to help continue the inflation down trend. [Read more →]

Despite a second week of India inflation slowing, the Indian economy is still overheated and continues to concern India’s central bank according to AFP.

The Wholesale Price Index is the key cost of living barometer for the Indian economy and has slipped from 12.40 percent to 12.34 percent in the last two weeks.

Nonetheless, India’s central bank is expected to raise interest rates in order to continue cooling the Indian economy. [Read more →]

GIC, the Singapore government sovereign wealth fund investment arm, plans to invest in India’s Arcil, Asset Reconstruction Company of India, through a 10 percent stake according to The Economic Times.

The India investment deal is subject to India’s Foreign Investment Promotion Board (FIPB) approval and Arcil’s CEO S Khasnobis Arcil declined to comment on the move by GIC.

Arcil is India’s largest asset reconstruction company otherwise known as an ARC. [Read more →]

Infosys, the leading Indian outsourcing company, plans an India investment of $753 million dollars to buy Axon Group, a multinational British consultancy, according to AFP.

The Infosys Indian investment comes just after other high profile Indian investments such as that of Tata Motor’s recent purchase of Jaguar and Land Rover from Ford.

Axon Group has approximately 2,000 in Australia, North America, Malaysia and Britain. [Read more →]

India’s Ministry of Finance has reported that the Indian economy is experiencing 12.01 percent inflation according to the Gulf Daily News.

The India economic news puts the Indian inflation rate at a 13 year high, and although the Reserve Bank of India (RBI) has taken measures to control inflation, the greater concern is whether or not the measure to fight double digit inflation will start to dramatically impact India’s economic growth. [Read more →]

Kamal Nath, the India trade minister, blast the US as he accused the United States of hurting the worlds poorest according to Guardian UK.

The comments by the Indian trade minister came during the current World Trade Organization (WTO) Doha round of talks in which agricultural tariff and subsidy policies among developed nations continue to cause angst for developing trading nations.

See also: Brazil Government Officials Balk on First Day of Doha [Read more →]

Sovereign wealth fund GIC has announced it will invest in India’s Reid & Taylor $209 million according to Businessweek.

The GIC India investment with take more than a 25% stake in Reid & Taylor and continues to diversify the Singapore sovereign wealth fund’s portfolio.

Reid & Taylor, a wholly-owned subsidiary of S Kumars Nationwide, produces fabrics, apparel and home textiles and is a more than 100-year-old brand. [Read more →]

The Reserve Bank of India (RBI), the India Central Bank, raised rates according to AFP.

The move by the India government’s central bank comes as India inflation hits over 11 percent which is a 13 year high.

Sharp price increase in food and fuel continues to afflict the India economy and India’s poor masses. [Read more →]

The India government and Singapore plan to sign a bilateral intellectual property rights trade agreement according to Forbes.

The India trade agreement with Singapore continues to help trade relations as Singapore trade ranks as India’s 4th largest merchandise export market and 4th in term of India foreign direct investment with $4.7 billion in Singapore investments. [Read more →]

The India central bank, the Reserve Bank of India, raised interest rates in an effort to fight inflation according to Bloomberg.

The move the Reserve Bank of India to increase the repurchase rate from 7.75 percent to 8 percent is the first rate hike in 15 months.

With increased global monetary tightening, the India economy now joins the list of many economies that expect a slow down as the US economy continues [Read more →]

The India government and India’s Department of Telecom have threatened to ban BlackBerry devices in India according to TMCnet.

The restriction surrounds the India government’s demand to have Research in Motion (RIM), the producer of the BlackBerry device, deliver encryption keys if needed by India’s security services.

The stance by the India government seems highly [Read more →]

India investment in the retail sector has lost the top spot on A.T. Kearney’s Global Retail Development Index according to Reuters.

Key drivers to the dethronement include the absence of competition, strong economic growth, and a rapid increase in spending by the largest demographic of Asia’s youngest consumers.

India investment protectionism and concerns over [Read more →]

India’s retail industry is expected to quadruple by 2011 according to Reuters.

Key drivers of the increase from 4 percent to 16 percent are an increase in competitive pricing as the India government loosens restrictions in hypermarkets, supermarkets and department stores.

Currently, the India economy is dominated by small ‘mom-and-pop’ shops which have expressed high levels of concern should India foreign direct investment in the [Read more →]

SRF Ltd, India’s leading tire cord manufacturer, plans to acquiring Thai Baroda Industries (TBIL) according to The Times of India.

The India investment is estimated at [Read more →]

India’s Bharti Airtel, India’s leading integrated telecom company will likely resume talks to merger with MTN, South African telecommunications giant, according to the Business Standard.

The challenge that the India investment deal faces surrounds India foreign direct investment regulations that restrict a full scale merger.

While India foreign direct investment law allows 51 per cent but since foreign direct investment in [Read more →]

Maxis Communications, Malaysia’s biggest mobility firm, which owns 74 percent of Aircel Cellular, will invest in India according to Reuters.

The India investment deal is expected to be worth as much as $5 billion and will allow Aircel Cellular to build 14,000 additional telecom towers.

The move by Maxis Communications to further in invest in India also includes a plan by Aircel Cellular to [Read more →]