India International Political Economy

The Indian economy saw its inflation rate increase by 4.78 percent in November according to AFP.

The increase marks a ten month high for the Wholesale Price Index (WPI) which is India’s key measure for inflation in the Indian economy.

The key driver of the rise in India inflation is an increase in food prices which jumped over 16 percent in November.

German based Volkswagen (VW) has announced it will invest in India through a 19.9 percent stake in Maruti Suzuki according to AFP.

The Indian investment deal is worth about $2.5 billion and will give VW the needed volume to outpace Toyota as the worlds largest car maker as Maruti Suzuki produces over half the cars in India.

Suzuki gains from the VW investment in India by securing valuable hybrid technology that VW offers.

The Society of Indian Automobile Manufacturers (SIAM) announced that car sales in the Indian economy rose 61 percent in November according to Dow Jones.

The surge in car sales accounts for the largest percent rise in more than five years with sales entering the India economy of 133,687 units.

SIAM said the key driver to the car sales increase is the various federal government stimulus packages that encourage Indians to purchase cars now in order to spur the India economy. [Read more →]

Food prices rose 17 percent in the India economy in 2009 according to AFP.

The recent monsoon is to blame as food stables such as rice have risen as much as 37 percent putting tremendous strain on the India economy.

The concerning India economic news is putting pressure on the India Central Bank to tighten monetary policy in order to cool a rapidly expanding India economy. [Read more →]

Indian exports declined 6.6 percent in October from a year earlier according to the India government’s Commerce Ministry and Dow Jones.

Nonetheless, the drop fell at a slower pace then in September in which India exports fell 13.8 percent year on year.

India’s trade deficit now stands at $8.88 billion as of October. [Read more →]

US based Scripps Networks Interactive Inc announced it will invest in India through a majority stake in the lifestyle unit of New Delhi Television Ltd. (NDTV) according to Reuters.

The Indian investment is worth $55 million and will give Scripps a 69 percent stake in NDTV Lifestyle and aligns with the company’s current global expansion strategy.

Scripps brand portfolio includes the Food Network, Fine Living Network and HGTV to name a few. [Read more →]

French based tire company, Michelin, announced it will invest in India $868 million according to Dow Jones.

The Indian investment will go towards the production of a radial tire factory in the southern city of Tamil Nadu in Chennai.

A key driver in the decision by Michelin to invest in India is the continued increase in automobile sales in India. [Read more →]

India exports declined at a slower rate in October according Bloomberg.

The positive Indian trade news is an indication that the global recession is waning as Indian exports only dropped 11.4 percent as compared to the 13.8 percent in September.

Nonetheless, according to Finance Secretary Ashok Chawla, the Indian economy will struggle significantly to hit its needed 9 percent growth rate without a recovery in India’s exports which are driven largely by the demand of the industrialised nations. [Read more →]

Auto sales in the Indian economy rose 21 percent in September according to Reuters.

The positive Indian economic news makes it the eight straight month of car sales growth from market leaders such as GM, Hyundai and Maruti Suzuki India.

The key drivers for the India economic boost from car sales are lower borrowing cost and the demand generated by numerous festivals. [Read more →]

India exports declined 19.4 percent year on year in August according to Dow Jones.

Despite the decline in India trade, the pace of the decline is slower then in July which fell 28.4 percent as the global recession put global demand on hold.

Nonetheless, Indian exports have declined for 11 straight months thus far. [Read more →]

The Indian economy saw wholesale prices fall in August but at a slower rate according to Bloomberg.

While the Indian economic news is still positive, the Indian wholesale-price index only dropped 0.12 percent which suggest that inflation in the Indian economy may return shortly.

An increase of inflation in the Indian economy between four to five percent is a warning sign according to India’s top economic advisory the Panning Commission. [Read more →]

Indian imports of gold have dropped by 29 percent in July according to Bloomberg.

The India trade news comes as somewhat of a surprise as gold imports have been on the rise ever since May and the Indian gold buying season has just started.

A key driver to drop in Indian imports of gold is the demand decline in the jewelry market as the price of gold continues to climb. [Read more →]

The world’s top data storage equipment firm, EMC Corp, plans to invest in India $1.5 billion over the next five years according to Reuters.

The India investment by EMC is designed to focus on its research and development infrastructure and follows similar Indian investment strategies by other multi-national firms such as Accenture and IBM in a grab to employ educated, English speaking and lower wage technical workers. [Read more →]

The India economy saw car sales in August grow by 26 percent according to WJS.

Key drivers to the positive Indian economic news include seasonal demand due to the festival season, the launch of various new car models by car maker and numerous India Central Bank lending rate cuts that have helped credit availability. [Read more →]

India exports declined as much as 28.4 percent in July according to Bloomberg.

The decline in India trade marks the tenth straight month that Indian exports have dropped.

The key driver of the poor India trade news is the negative impact from the global recession on textiles, jewelers and leather producers which has also lead to a cut in as many as 500k jobs in the Indian economy. [Read more →]

The India economy saw wholesale prices decline 1.74 percent in August from a year earlier according to Bloomberg.

The decline marks the biggest drop in Indian wholesale prices in three decades as it was back in 1978 when the Indian economy saw wholesale prices fall to 1.9 percent.

Despite the poor Indian economic news, the Indian central bank is expected to keep interest rates low which should help spur continued growth in the India economy. [Read more →]

Inflation in the Indian economy hit a 13 month low to 3.92 percent in the first week of February according to AFP.

The India economy gauges Indian inflation by wholesale prices which hit a 13 month high back in August at 12.91 percent.

Key drivers of the decline include a fall in commodity prices and the negative effects of the global recession. [Read more →]

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. [Read more →]

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. [Read more →]

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 →]