June 2014

India should seal trade pact with EU

Business Line, 26 June, 2014
Despite several rounds of the negotiations which started in 2007, the proposed EU-India Bilateral Trade and Investment Agreement (BTIA) covering trade in merchandise, services and investment. More…

Textile exports set to touch $ 50 billion mark this fiscal, says Union Textiles Minister Santosh Kumar Gangwar

The Economic Times, 23 June, 2014
Textile exports are set to touch $ 50-billion mark in the current fiscal, Union Textiles Minister Santosh Kumar Gangwar said today. More…

Sky is the limit in India-Japan relationship: Shinzo Abe’s advisor

Business Standard, 11 June, 2014
The sky is the limit in the India-Japan relationship, a senior Japanese official said today, pinning high hopes on the cooperation between the two nations, particularly in the fields of nuclear energy and defence. More…

UK to assist India in ensuring lifting of ban on Mango import

The Economic Times, 20 June, 2014
A British government agency will help Indian authorities to put in place measures needed ahead of the visit of an EU team to India to ensure the ban on import of Alfonso mango is lifted. More…

GDP growth forecasted at 5.5% in 2014-15 for India : World Bank

Business Standard, 11 June, 2014
The World Bank in its report – Global Economic Prospects (GEP) a relatively weak growth due to subdued manufacturing activity and investment growth in India, the GDP projection has reduced to 5.5% for this financial year from 5.7% projection in April. India’s growth is expected to accelerate to 6.3% in FY2016 and 6.6% in FY2017 .WB posited that a weaker than average carry-over and weak start to the year in India – the largest regional economy – means that even with an expected pick-up in quarterly growth during 2014, the rise would be only modest. This forecast assumes that reforms will be undertaken to ease supply-side constraints, particularly in energy and infrastructure, improve productivity, and strengthen the business environment, and that fiscal consolidation continues and a credible monetary policy stance is maintained. With respect to exports India received a temporary increase due to significant currency depreciation during second half of 2013, following the US Federal Reserve’s tapering intention in late May. However the outlook for exports is positive with India expected to lead in South Asian region to accelerate exports during forecast period, in line with strengthening global import demand, particularly in US and Euro area. India’s investment growth has been significantly slow due to delays in clearance of projects particularly in infrastructure, steel, and energy sectors. As these investment projects stream down during the forecast period (2014-16), overall investment activity expected to pick-up. The report highlights risk elements for India, with Non-Performing Loans (NPLs) forming a threat to the banking sectors. Stressed bank loans exceed 10% of loans in India. The report suggests NPL management and capitalization for state-owned banks in India wherein they constitute close to three-quarters of banking assets. A large current account deficit of 5% in 2012 and openness to portfolio capital flows had made India vulnerable to slowing of capital flows during the mid-2013 turmoil. With respect to India’s fiscal deficit, the gap grew rapidly during global financial 2008, supporting a sharp post-crisis rebound in GDP growth. This stimulus has been withdrawn gradually – although India’s general government deficit in 2013 is estimated to be more than 2% points of GDP higher than in 2007, indicating that depleted fiscal buffers have yet to be fully restored. In addition, pressures could arise on the expenditure side if there are demands to provide stimulus to support weak growth or there is a failure to reform subsidies for fuel, food and fertiliser (2.2% of India’s GDP in FY2013-14). For South Asia, the report projected growth in 2014 at 5.3%, 2015 at 5.9% and 2016 at 6.3%. The growth is expected to pick-up modestly in 2014 with firming global demand and easing domestic constraints offsetting a tightening of international financial conditions. Key risks of a weak monsoon rains and stressed banking sectors might trouble the South Asian region. For the global economy, the World Bank lowered its growth projection for 2014 to 2.8% from 3% made in January. It projected global GDP to expand 3.4% in 2015 and 3.5% in 2016, broadly in line with the projections in January. More…