BENGALURU, (Reuters) - Activity in India's dominant service sector accelerated in April thanks to a pick up in new business that encouraged firms to hire at the fastest pace in seven years, a private survey showed on Friday.
Indications of solid services and manufacturing growth, supported by improved demand, suggest Asia's third largest economy is motoring along nicely as it shrugs off disruptions caused by a goods and services tax (GST) and demonetisation.
The Nikkei/IHS Markit Services Purchasing Managers' Index rose to a three-month high at 51.4 in April from March's 50.3, holding above the 50-mark that separates growth from contraction for a second month.
"It was encouraging to see the Indian service economy report a positive start in the April quarter, with output growth gaining momentum as demand conditions improve," Aashna Dodhia, an economist at IHS Markit, said in a statement accompanying the survey.
"India's overall economy also saw price pressures moderating further, with input and output charge inflation registering at the slowest since September 2017 and June 2017 respectively."
Inflation could therefore slow further from March's five-month low and closer to the Reserve Bank of India's medium-term target of 4.0 percent. That would allow the central bank to stay on hold until the second half of next year as expected
The survey showed strong domestic and foreign demand and drove the sub-index on new business to 51.4 from 50.6 in March.
A sister survey on Wednesday showed factory activity accelerated in April on strong domestic demand and output.
Taken together, they pushed the composite PMI, which includes both manufacturing and services, to 51.9 in April from March's 50.8, its highest in three months.
"As the service economy contributes a greater proportion to real GDP, and continued to be outperformed by its manufacturing counterpart, overall private sector growth was only modest and below the historical trend," Dodhia said.
Service providers remained optimistic about growth in the year ahead, although the expectations index slipped slightly from March's reading.
The service sector plays a crucial role in India's economy as it contributes about 60 percent to the country's gross domestic product.
India regained its status as the world's fastest growing major economy in the October-December quarter, surpassing China for the first time in a year, and is likely to retain that title this year and next.
Source:- Business Standard
WhatsApp executive Neeraj Arora could be elevated to be the next CEO of WhatsApp, as per a report by TechCrunch. The report stated that Neeraj Arora could be "one possible candidate for the CEO role" at the company after founder and CEO Jan Koum stepped down from his position earlier this week.
Koum’s decision to leave the company he founded in 2009 came amidst reports of a clash with its parent, Facebook, over its strategy and Facebook’s attempts to use its personal data and weaken its encryption.
Meanwhile, Neeraj, an IIT Delhi alumnus, and former Google corporate development manager has been at WhatsApp since 2011, much before the Facebook acquisition. He largely manages the business side of the mobile-messaging company. He has also served as a board member for Paytm.
If promoted to the top job at WhatsApp, Neeraj will find himself in the league of Indian-origin CEOs such as Satya Nadella and Sundar Pichai, who head global tech majors such as Microsoft and Google.
The Facebook-owned messenger app is also in search for its India head. The US-based company is looking for an individual who can lead their India operations which includes products for people and business along with peer to peer payments.
Source:- People Matters
There are no flashy events but we are celebrating the 20th anniversary of the rebooted India-US relationship this week. Ironically, it was the Pokhran nuclear tests of May 1998 that started India and US on a journey of rediscovering each other, initially through the long walks that Jaswant Singh and Strobe Talbott took together. Here is a small sampler of the distance we have travelled – in 1998, US was taking India to the cleaners, piling nuclear and tech sanctions on us. In 2018, US energy secretary was telling a Delhi audience to do the smart thing and take the “world’s best” nuclear reactors from the US. From the first Firefinder radars in 2001, India is closing in on armed Predator drones from the US.
A defence and strategic relationship developed quickly between New Delhi and Washington, capped by Manmohan Singh’s landmark nuclear deal. Convergences in strategic and security outlook forged by the need to balance China’s rise and check Pakistan’s terror instincts also brought the two countries together, sweetened by India’s rise as a technology power and Indian Americans’ amazing successes.
The trade relationship was always a laggard, but it was subsumed by everything else. Indian officials and government leaders’ favourite line to the US was, and remains – look at our trade in the context of the larger relationship. That line just went past its sell-by date.
Donald Trump does not find it incompatible to have a robust strategic relationship with India while simultaneously hitting India on the trade front. So, as Sushma Swaraj and Nirmala Sitharaman prepare for the “2+2” talks with Mike Pompeo and James Mattis, this tried and tested Indian whine is not likely to get much traction.
On April 13, USTR announced it would review India’s eligibility under the General System of Preferences (India is the largest beneficiary) – this means US will go after India on its recent decision of cap prices of medical devices by “reviewing” permissions for India to export some goods at zero tariff, like jewellery. USTR doesn’t see India through the strategic prism, never has. India is already on the priority watch list in the Super 301 report for IPR ‘violations’; foreign exchange policies are under the scanner, and has been dragged to the WTO on export subsidies. A more protectionist America spouting MAGA and MIGA (‘Make India Great Again’) are seriously at odds here.
On export subsidies, India has a thin case. It should have foreseen trouble when it crossed the $1000 threshold in 2015 and moved to make changes. Now it is doing so in haste and under pressure, never a good idea. On the trade deficit front, India has a much better argument – this is a growing trade relationship, India’s rising buys of oil and gas from the US by itself has a salutary effect on the trade numbers, as does its promised buy of civilian aircraft. But by and large, if India is seen to be a reliable centre for technology innovation and protection, New Delhi has an opportunity to ride this storm. The very fact that the US is hitting India via the WTO is a sign that they don’t want to go down a unilateral path, while giving India time to make adjustments.
A bigger problem on the horizon is Russia-sized, as India comes under the radar of CAATSA (Countering America’s Adversaries Through Sanctions Act) – somehow US sanctions continue to dog India no matter how far the two countries travel together. The simple issue here is if India buys the S-400 missile interceptors from Russia, or anything which would qualify as “significant transaction”, the US could use this law to slap sanctions on India.
Whether the Trump administration gets this or not, just the threat will have an instant blowback on all US defence companies seeking to sell in India – the US as an ‘unreliable’ defence partner will be back on the table and Russia will naturally become the biggest beneficiary. India has been diversifying its weapons buys for, not because of US threats but because its in India’s interest. That’s the way it should remain.
Trump is also expected to toss the Iran nuclear deal into the Straits of Hormuz, potentially affecting India’s prized investment in Chahbahar port. But here India has an easy strategic point – Chahbahar is good for Afghanistan that’s good for both of us.
At least with the Trump administration, India doesn’t have to re-invent the wheel on Pakistan. From all accounts, Washington’s distrust of Rawalpindi as almost as deep as India’s. Pakistan used to be an issue in the strategic discourse between US and India until very recently. Not any more, as we saw most recently during the FATF negotiations, when US, India and even China lined up to call Pakistan out on terrorism.
However, there is now a concerted effort by the US and Europe to drag the Taliban to the table and accept a peace offer by Ashraf Ghani in Afghanistan. This runs the risk of becoming a band-aid solution, a fig leaf for departing western troops from Afghanistan, leaving a target-oriented counter-terrorism operation in place. We would not be looking at peace, but a real possibility of Pakistan strengthening its hold over Afghanistan in the coming years, because this plan does not involve shutting down the terror factory. That would be terrible from the point of view of regional dynamics.
The US now defines its strategic interests a little more narrowly, so India would have to refine its game. The Modi-Xi dosti can and exist alongside the Quad and the US-India, France-India relationship. India will position officials in US’ Centcom base and fight with the US on trade. On the larger canvas, the strategic relationship with the US is seeing India playing a more decisive role in an evolving bipolarity taking shape in the world.
Source:- The Times of India
NEW YORK: India tops the list of the fastest growing economies in the world for the coming decade and is projected to grow at 7.9 per cent annually, ahead of China and the US, according to a Harvard University report.
The Centre for International Development (CID) at Harvard University said in new growth projections yesterday that countries that have diversified their economies into more complex sectors, like India and Vietnam, are those that will grow the fastest in the coming decade.
"India tops the list as the fastest growing country for the coming decade, at 7.9 per cent annually, in the economic complexity growth projections. India has made inroads in diversifying its export base to include more complex sectors, like India and Vietnam, are those that will grow the fastest in the coming decade.
"India tops the list as the fastest growing country for the coming decade, at 7.9 per cent annually, in the economic complexity growth projections. India has made inroads in diversifying its export base to include more complex sectors, such as chemicals, vehicles, and certain electronics," the report said.
It said that India's productive capabilities far exceed expectations for its current income level, which contributes to the projection of rapid growth for the coming decade.
The researchers also find India ranks the best on the criteria termed the Complexity Opportunity Index (COI), which measures how easy it is to redeploy existing knowhow to enter new complex products.
"India's existing capabilities have not only diversified its exports, but also allow for easy redeployment into related products that depend on those capabilities, making further diversification relatively easy," it said.
China is projected to grow at 4.9 per cent annually to 2026, the US three per cent and France 3.5 per cent.
The top ranking in COI means India has many "unrealised opportunities" to diversify into related, high-value sectors to continue to drive productivity growth and job creation.
"Up to now, that potential remains unrealized, however, as India's complexity has not changed over the past decade. The rapid growth that is predicted is effectively capitalizing on previous gains in complexity," the report added.
It stressed that ensuring the long-run potential of India's economic growth will rely on realizing diversification into related products. The other major challenge will be to ensure the inclusive nature of this productive transformation, as the gains made in new chemical, vehicle and electronics exports are highly concentrated in specific localities of the subcontinent.
"Whether that knowhow can be disseminated into new areas of India will in part determine whether rapid growth can be sustained in the long-term," it said.
Director of CID, professor at Harvard Kennedy School (HKS) and the leading researcher of The Atlas of Economic Complexity, Ricardo Hausmann said that Southeast Asia continues to dominate the global growth landscape, driven by the diversification of economies into complex manufacturing, but the leading countries have shifted within the region, with the Philippines, Vietnam, Indonesia, and Thailand poised to lead growth in the coming decade.
Uganda comes second on the list of the fastest growing economies to 2026, predicted to grow at 7.5 per cent annually. The growth projections are based on economic complexity, a single measure of each country's economy which captures the diversity and sophistication of the productive capabilities embedded in a country's exports.
The report further noted that after a decade of growth driven by record oil and commodity prices, the researchers find a landscape that has shifted in favor of more diversified economies. In sub-Saharan Africa, growth is shifting eastward from commodity-driven West Africa to East Africa, with Uganda, Tanzania (4th), and Kenya (10th) in the top 10 predicted fastest growing countries globally for the coming decade.
The researchers further point out that many low-income countries, including Bangladesh, Venezuela, and Angola have failed to diversify their knowhow and face low growth prospects.
"Others like India, Turkey, and the Philippines have successfully added productive capabilities to enter new sectors and will drive growth over the coming decade," said Sebastian Bustos, a lead CID researcher in trade and economic complexity methods.
Source:- The Economic Times
In a significant development on Friday, the Chinese government announced that it has removed import duties on 28 medicines, including critical cancer and cancer alkaloid-based drugs from May 1.
According to a Press Trust of India report, this decision will aid the Indian pharmaceutical industry, which is known around the world for manufacturing low-cost generic drugs, to bump up the export of these pharmaceuticals to China.
“China has exempted import tariffs (duties) for 28 drugs, including all cancer drugs, from May 1st. Good news for India’s pharmaceutical industry and medicine export to China. I believe this will help reduce trade imbalance between China and India in the future,” Chinese Ambassador to India Luo Zhaohui said in a tweet.
However, the potential benefit of this move is yet to be ascertained.
India’s trade deficit with China currently stands at a whopping $62.8 billion in 2017-18, as compared to $51 billion a year before.
Source:-The Better India