India - Latest News/Current Events, Economic Overview & Trade Relations
Quick Facts about India
| Official Name | Republic of India |
| Capital | New Delhi |
| Location | Southern Asia, bordering the Arabian Sea and the Bay of Bengal, between Burma and Pakistan |
| Area | total: 3,287,590 sq km land: 2,973,190 sq km water: 314,400 sq km |
| Climate | varies from tropical monsoon in south to temperate in north |
| Terrain | upland plain (Deccan Plateau) in south, flat to rolling plain along the Ganges, deserts in west, Himalayas in north |
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Good News for India's Economy
As reported by the finance ministry, Indian economic growth is predicted to spur as much as 7.75 percent in 2009. Two of the most important reasons are the improving U.S economy in second quarter reports and the recent successful harvests from the monsoon rains.
India's exports fell for the eighth consecutive month in May 2009, while industrial output increased 1.4 percent in April 2009. The economy expanded 6.7 percent, which is the most sluggish pace in the past six years, since 2003, where the economy expanded between 8.5 percent and 9 percent. Among India's many strengths is the country's large service sector, which contributes about 55 percent of India's GDP. Furthermore, the government's rural jobs program, which guarantees 100 days of work in a year for the poor has kept "rural income and consumption strong," according to the finance ministry. With income, consumption, growth, output and a strong service sector, India's economy "has shock absorbers" that will ensure the country's economic revival.read source article
Indian Stocks Increased 49% This Year
The rally this year has helped India post the fifth-best performance among the 89 markets tracked by Bloomberg News globally. Valuations have also climbed, with the Sensex now valued at 16 times reported earnings, double November's low of 8.1 times. "The relative outperformance and the strong move in the market post the elections have now priced in improving economic fundamentals," the analysts wrote in the report. "The upcoming budget next month will be very important for the overall direction of the market." The Sensex advanced 1.7 percent to 14,590.18, the highest in more than a week, as of 1:23 p.m. in Mumbai.
India's Sensex gained 49 percent advance this year and further gains depend on government policies to boost economic growth and pare a budget deficit, Nomura Holdings Inc. said. The benchmark Bombay Stock Exchange Sensitive Index may rise to 16,400 in the next 12 months, a "muted" 14 percent gain from yesterday's close, Nomura analysts led by Prabhat Awasthi said in a report today. Investors should own a mix of so-called defensive and domestic cyclical shares, they added.India and Deflation
There are numerous reasons for deflation to occur. It can be caused by a decrease in the supply of money or credit or by a decrease in government and consumer spending. Side effects that accompany deflation are increased unemployment, due to lower levels of demand in the economy and dwindling profits. This could further increase the severity of a recession.
There are numerous reasons for deflation to occur. It can be caused by a decrease in the supply of money or credit or by a decrease in government and consumer spending. Side effects that accompany deflation are increased unemployment, due to lower levels of demand in the economy and dwindling profits. This could further increase the severity of a recession. In India, the Ministry of Commerce and Industry has reported that "wholesale prices fell 1.61% in the year to June, compared with a rise of 0.13% the previous week" Analysts said that prices would continue falling for the next fourth months, now that lower food prices have pulled the index down. An economist at Nomura, Sonal Verma, predicts that the country will "have negative numbers at least till September, primarily because inflation had picked up very sharply during this period last year." Figures show that inflation rose up to 12.9% in August 2008 but has been decreasing since then.read source article
Indian Economy Shows Signs of Recovery
India's industrial output increased 1.4% from April 2008. An economist at HSBC, Robert Prior-Wandesforde said, "[Indian] output growth almost certainly bottomed on a year-on-year basis in March and we are looking for a healthy upward trend to develop from here."
India's industrial output increased 1.4% from April 2008. An economist at HSBC, Robert Prior-Wandesforde said, "[Indian] output growth almost certainly bottomed on a year-on-year basis in March and we are looking for a healthy upward trend to develop from here." This improved perspective of output is due mainly to an increase in domestic demand, particularly from government infrastructure and construction projects, according to Nikhilesh Bhattacharyya, an analyst at Moody's.India's Plan to Boost Economic Growth
President Pratibha Patil has announced that she will push for reforms to revive the economy by taking steps to increase foreign investment in-flows and inject more capital in banks.
President Pratibha Patil has announced that she will push for reforms to revive the economy by taking steps to increase foreign investment in-flows and inject more capital in banks. Welfare programs and higher investment in sectors such as infrastructure will be pursued as well. The president said that welfare projects for farmers and an expansion of rural employment guarantee project are high on the agenda. Families below the poverty line will be given 25kg of rice or wheat every month at 3 rupees a kilo.read source article
India grew more than expected
For the 2008/09 fiscal year to March 31, India's economy grew 6.7 percent, its weakest in six years and sharply slower than rates of 9 percent or higher in the previous three years. "A main reason (for the slowdown) was financing drying up as a result of the global crisis," said Malik. "The revival in capital markets automatically means one of the negatives crippling investment is addressed." Growth was seen at around six percent in the first half and closer to seven percent in the second. Next year, economists expect growth of eight percent. The economy still has "significant pent-up demand for investment, especially in infrastructure and in affordable housing," said Goldman Sachs economist Tushar Poddar. The numbers gave cheer to the Congress-led government, which swept back to power earlier this month on a poverty alleviation platform. Its strong mandate is seen as a positive for investors, spelling political stability. Finance Minister Pranab Mukherjee has said the government will make increasing growth its top priority to help India's "common man" -- even at the risk of ballooning an already large fiscal deficit.
The rise in expenditure on the election campaign may have boosted India's March quarter performance but downside effects from the external turmoil have been far too strong to be fully offset by the jump in political spending, the note said. "The impressive victory of the Congress party foreshadows economic reforms, which may help to strengthen the Indian economy," said Sherman Chan, economist at Moody's Economy.com.Browse Asia News Archive
Trade Agreements
Global System of Trade Preferences among Developing Countries
Algeria
Argentina
Benin
Bolivia
Brazil
Cameroon
Chile
Colombia
Cuba
Ecuador
Egypt
Ghana
Guinea
Guyana
Iran
Iraq
Libya
Mexico
Morocco
Mozambique
Nicaragua
Nigeria
Peru
Sudan
Tanzania, United Republic Of
Trinidad And Tobago
Tunisia
Venezuela
ZimbabweThe Global System of Trade Preferences arose out of the United Nations Group of 77. The Group first appeared interested in 1976 to develop a global system of trade for developing countries. Over years of negotiations, the agreement was signed by the participating members of the Group of 77. The members are currently looking to expand their economic ties to other developing countries in Asia, Latin America and Africa. http://www.unctadxi.org/templates/Page____6207.aspx
India – Singapore Closer Economic Partnership
India’s first Closer Economic Partnership Agreement was signed with Singapore in 2005 after thirteen rounds of negotiations. The agreement is also the first comprehensive bilateral agreement that Singapore has entered with a south Asia economy. A key feature of the Agreement is the avoidance of double taxation agreement. This prevents double taxation of an income earned by a resident of one member country in another member country. http://app.fta.gov.sg/data//fta/file/India-Singapore%20Comprehensive%20Economic%20Cooperation%20Agreement.pdf
India – Sri Lanka Free Trade Agreement
Trade has grown immensely among the two countries since the signing of a trade agreement. India is the 4th largest investor in Sri Lanka and their economic, political and social relationship remains close. India grants nearly 1/6th of its total development credit to Sri Lanka. Currently both countries are looking to establish a Comprehensive Economic Partnership Agreement. http://commerce.nic.in/ilfta.htm
Indo – Nepal Treaty of Trade
The government of India will allow Nepal customs duty free access to the Indian market. The treaty has had a positive impact on Nepal in both trade and economic development. The treaty gets renewed every five years unless a party wishes to end the treaty. http://commerce.nic.in/nepal.doc
South Asian Free Trade Area
Introduced at the South Asian Association for Regional Cooperation summit, the South Asian Free Trade Area created a free trading zone that reaches 1.4 billion people. The SAFTA contains zero customs duty on practically all products. http://www.saarc-sec.org/data/summit12/saftaagreement.pdf
Trade Organizations
Asia Cooperation Dialogue (ACD)
The Asia Cooperation Dialogue (ACD) is an International Organization to promote Asian cooperation at a continental level, helping to integrate the previously separate regional organizations of political or economical cooperation such as ASEAN, SAARC
Bay of Bengal Iniative for MultiSectoral Technical and Economic Cooperation (BIMSTEC)
The Bay of Bengal Initiative for MultiSectoral Technical and Economic Cooperation (BIMSTEC) is an international organisation involving a group of countries in South Asia and South East Asia. The member nations of this group are: Bangladesh, India, Myanmar, Sri Lanka, Thailand, Bhutan and Nepal.
Centre on Intergrated Rural Development for Asia and the Pacific (CIRDAP)
The Centre for Integrated Rural Development for Asia and the Pacific (CIRDAP) is a regional intergovernmental and autonomus organization
East Asia Summit (EAS)
The East Asia Summit (EAS) is a Pan-Asia forum of 16 countries in East Asia, with ASEAN in a leadership position.
South Asian Association for Regional Cooperation (SAARC)
The South Asian Association for Regional Cooperation (SAARC) is an economic and political organization of eight countries in Southern Asia. It was established on December 8, 1985 by India, Pakistan, Bangladesh, Sri Lanka, Nepal, Maldives and Bhutan. In April 2007, at the Association's 14th summit, Afghanistan became its eighth member.