Prime Minister Modi’s currency experimentation has not stopped India’s vibrant economy, which is the world’s 4th fastest growing economy in the world thus far in 2017.
That’s according to the World Bank’s latest edition of Global Economic Prospects. For 2017, India’s economy is expected to advance 7.2 percent. That’s slightly above the country’s long-term growth. GDP Annual Growth Rate in India averaged 6.12 percent from 1951 until 2017, reaching an all time high of 11.40 percent in the first quarter of 2010 and a record low of -5.20 percent in the fourth quarter of 1979, according to Tradingeconomics.com.
The Indian economy has benefited from a stable macroeconomic environment of low inflation and interest rates, which has helped shake off a temporary slow-down in consumer spending and a drop in investment that followed the demonetization program back in November 2016 -- which took 86 percent of the country’s currency out of circulation.
India’s economy has also benefited from ongoing market reforms that have improved competitiveness. For 2016-17, India scored 4.52 points out of 7, according to Global Competitiveness Report published by the World Economic Forum, slightly above its ten year average of 4.33 points. That helped the country climb to rise to the position as the 39th most competitive nation in the world -- out of 138 countries ranked in the report.
The Competitiveness Rank in India averaged 52.73 from 2007 until 2017, reaching an all time high of 71.00 in 2015 and a record low of 39.00 in 2017.
Improved competitiveness, in turn, has helped narrow the country’s current account deficit to 0.70 percent of the country's Gross Domestic Product in 2016. Current Account to GDP in India averaged -1.40 percent from 1980 until 2016, reaching an all time high of 2.28 percent in 2003 and a record low of -4.80 percent in 2012, according to Tradingeconomics.com.
Financial markets have taken notice. The iShares S&P India have gained 20.76 percent over the last twelve months, though those figures are still lagging behind the markets of neighboring Pakistan.
The Indian IT industry's software exports will grow 7-8 per cent and the domestic market 10-11 per cent in the current fiscal 2017-18, said its apex body Nasscom on Thursday.
"The outlook for the IT industry in fiscal 2017-18 (FY 2018) is 7-8 per cent growth in software exports and 10-11 per cent in the domestic market," said the National Association of Software and Services Companies (Nasscom).
The lower revenue outlook comes in light of political and economic uncertainties that impacted decision-making and discretionary spend during the last fiscal (2016-17), it said in a statement.
Noting that digital solutions and niche segments would be the key growth drivers, the industry's representative body said the revenue projection was based on improvements in financial services and high potential in digital business.
"The fiscal year will see growth driven by the modernisation of operations for client firms and the adoption of new technologies such as SaaS (Software As A Service) applications, cloud platforms, BI (Business Intelligence), cognitive and embedded analytics as enterprise customers scale digital projects," said the statement.
Source: Business Insider
It is not just Coal India which is planning a global foray by acquiring coal assets abroad with listing on the London bourse. Its trade unions, too, appear to be keen on having global exposure which may help them learn and adapt better to changing business dynamics.
Coal India’s largest trade union, Indian National Mineworkers’ Federation (INMF), which enjoys support of more than 40 per cent of the workers is attending the IndustriALL Global Union (IGU) conference in Geneva. The members attending the conference are there to interact with global trade union leaders. They wish to draw upon global trade union leaders’ experience and come up with a sustainable industrial policy for the coal workers and improvise on organisational capabilities.
The IGU conference is going to focus on five large areas which include building a strong union for the mineworkers, both at the national as well as global levels, and defending workers’ rights in the fast changing mining among other issues. “Mechanisation of the mines and digitisation of the company as well as the coal sector has now become imminent. Under a scenario when Coal India is thinking of a global presence, we (trade unions) also need to think on similar lines and keep pace with changing business dynamics,” S. Q. Zama, secretary general of INMF told Business Standard before leaving for Geneva.
As per Zama, Coal India's initial talks with officials from the London Stock Exchange is an indication of the company's intent to raise foreign funds and make its presence felt across Western Europe. Also, the company’s other central trade unions (CTUs) like All India Coal Workers Federation, Indian Mine Workers’ Federation (IMWF) and others view the company's move to acquire coal assets abroad as intent of imbibing increased mechanisation of the mines in the country. “We are not against mechanisation as we understand that it is needed to raise productivity. But we need to take into consideration the changing energy scenario as well which is moving towards renewable energy sources and need to understand the future of coal mining,” Ramendra Kumar, general secretary of IMWF said.
At the trade union congress in Geneva, INMF will be interacting with trade union leaders from 140 countries to discuss industry issues and the way forward. Further, it also hopes to implement a few of the takeaways from the Geneva conference in Coal India.
“The conference will analyse the transformation in digitisation and advance technologies and draw up a comprehensive role of the trade unions for future modern societies in light of structural diversities,” Zama said.
While the CTUs have called for a strike from June 19-21 to protest the Centre’s proposal to merge the Coal Mines Provident Fund (CMPF) with Employees Provident Fund (EPF) and the delay in revising wages of about 500,000 coal workers, a major contention point of the trade unions is over growing number of outsourced staff in the company.
Coal India, which was established in 1975 following nationalisation of coal mines, had 650,000 staff on its payroll, which fell to 333,000 in 2014 and has further come down to 326,000 following retirement and voluntary schemes.
As per the CTUs, as high as 52 per cent of the 492 mt coal mined during 2014-15 was carried out by contractual workers while this ratio is poised to increase to 55 per cent in the current financial year.
“Contractual employees accounted for nearly 40 per cent of the total production just five years back. It has now increased to over 55 per cent and is expected to go up in the days ahead,” Rajendra Prasad Singha, general secretary of Hind Khadan Mazdoor Federation said.
Source: Business Standard
Cyprus was blacklisted by the Indian tax authorities in 2013 for not providing important tax information requested by the Indian tax authorities under the Double Taxation Treaty. Cyprus was classified as a 'notified jurisdictional area'. As a result of this, all payments made to Cyprus attracted 30% withholding tax (previously 15%) and those receiving money in India from a person or entity located in Cyprus were required to disclose adequate information regarding the source of funds.
The above measures made investments between the two countries limited.
The removal of Cyprus from India's blacklist came after both countries agreed to changes in the Double Taxation Avoidance Agreement.
On the 18th of November 2016 India and Cyprus have signed the amended bilateral tax treaty under which capital gains arising from sale of shares on investments made by Cyprus companies will be taxable at the applicable domestic tax rate.
With the signing of the amended Double Taxation Agreement, the Indian Tax Department made a decision to rescind the three year old order blacklisting Cyprus as a notified jurisdictional area with effect from the date of issue, thus removing Cyprus from its blacklist of countries with insufficient information exchange.
H.E. Mr. Nicos Anastasiades, President of the Republic of Cyprus is currently on a State Visit in India. During his official visit he will meet with the President of India, with ministers and other highly ranked government officials and will sign a number of bilateral agreements and Memorandum of Understandings in diverse fields.
Cyprus and India enjoy strong economic ties. Cyprus is the 8th largest foreign investor in India (with cumulative foreign direct investment of above USD 9 billion) having invested in manufacturing industries, cargo handling, shipping and logistics, financial leasing, stock exchange and real estate.
The new double tax avoidance treaty will further strengthen the economic ties between the two countries and open the door for substantial business development and cooperation in diverse fields.
Tesla Motors is planning to set up a factory in India to cater to the local demand for electric cars, at a time when the Modi government has launched an ambitious plan of moving to 100 per cent electric mobility by 2030.
The US carmaker is looking to enter India as a retailer and is in talks with the government for waiver of restrictions on imports of its high-end electric cars until its factory is built here.
“In discussions with the government of India requesting temporary relief on import penalties/restrictions until a local factory is built,” Elon Musk, chief executive officer, Tesla, said in a tweet on Thursday. He did not specify a time frame for the India venture.
The import penalties or restrictions that Musk referred to are most likely the norms for multinationals to set up single-brand retail in India, which mandate them to source at least 30 per cent locally.
Unlike traditional automakers, Tesla sells and services its vehicles on its own rather than through local dealers.
Even Apple has been trying to get India to waive its local sourcing norms temporarily. While in the past the government has indicated that it might make exceptions for high-tech products (presumably iPhones and Tesla cars), there has been no clarity yet.
Because of this, India’s current laws would mandate Tesla to set up a factory and begin sourcing components locally before even selling its first car here.
Last month, Musk had flagged this very issue while answering a query on Twitter about when the company would launch its business in India.
“Tesla always sells directly, but apart from asking for permission to sell directly, they might be looking for some concessions on the vehicles or the factory they want to set up. All these companies come looking for special packages,” said Abdul Majeed, partner, assurance at PwC India.
India does not restrict import of automobiles by wholesalers, but it levies a huge customs duty of 119 per cent on a CBU (completely built unit). This was done to force global luxury automakers, which were eager to tap India’s growing base of rich individuals, to set up local manufacturing and assembly units.
Over the past couple of years, this policy has largely worked, with brands such as Mercedes-Benz, Audi, BMW, JLR and Volvo having units in India.
Experts believe that the government should do the same even for electric vehicles as it will help boost the local industry.
Source: Business Standard