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Issue no. 2 May, 2014

INDIA DIGEST A Newsletter from Embassy of India, Paramaribo

India to emerge as global powerhouse: Manmohan In his last address to the nation before tendering his resignation to the President, Prime Minister Manmohan Singh on May 17 said, “I am confident of the future of India.” “The emergence of India as a major powerhouse of the global economy is an idea whose time has come,” Singh said. “I am sure that India will emerge as an economic might. I hope the next government works for the betterment for the country,” Manmohan Singh said.

India Inc hails Modi victory, looks for bold reforms Happy at the clear mandate given by voters to the BJP-led NDA, India Inc on May 16 exuded confidence that Narendra Modi will initiate bold and decisive policy reforms to promote economic growth. “A clear mandate is positive for India. FICCI hopes that this mandate will help the leadership restore much needed investor confidence, attract higher investments and generate employment, especially in the manufacturing sector,” FICCI president Sidharth Birla said.

India’s forex reserves up $1.97 bn India’s foreign exchange (forex) reserves rose by $1.97 billion to $313.83 billion for the week ended on May 9, led by a sharp jump in overseas currency assets, Reserve Bank of India (RBI) data showed.

Pharma exports up 10.5% in April India’s pharmaceutical exports grew 10.5 per cent, year-on-year, to $1.26 billion in April, according to Commerce Ministry data. “This year we are expecting a healthy rate of growth in pharma exports. Regions like Africa will help in enhancing exports,” said an official.

Apparel exports up 14% in April Showing clear signs of a revival, apparel export has registered an impressive growth rate of over 14% in the first month of this financial year. The statistics, recently made public by the Apparel Export Promotion Council (AEPC) in Gurgaon, show that the export sector rebounded in double-digit growth in the month of April, having brought off business deals of over $1.3 billion. “For April 2014-15, the garment sector grew by 14.33%. The Indian garment manufacturing sector has the highest potential and it needs to increase competitiveness to provide a further boost to apparel exports from India,” said Virender Uppal, Chairman, AEPC.

India’s growth rate will pick up soon: Rajan Reserve Bank of India (RBI) Governor Raghuram Rajan has expressed optimism on India’s growth rate going beyond the 5% mark soon. “The economy has been growing at a flat rate of 5% and hopefully we will see it picking up in the near future,” he told PTI on the sidelines of a special talk at Oxford University on May 5. Rajan also reiterated his view on the growth rate being inextricably linked with curbing inflation. “I have always stressed that stimulating growth and controlling inflation are not opposed to each other. Inflation is what is standing in the way of India’s growth,” he added.

CAD to be at 2% of GDP: Rangarajan The country’s current account deficit (CAD) is expected to be around two per cent of the gross domestic product (GDP) as compared with 1.7 per cent in 2013-14, owing to reduction in import of gold and inflation showing some signs of decline, said C Rangarajan, chairman of Economic Advisory Council to the Prime Minister.

India’s exports rise 5.26 percent in April Riding on the excellent export performance of mint, chilli and seed spices, India’s spice exports has India’s exports rose by 5.26 percent to $25.63 billion in April this year from $24.35 billion recorded in the same month last year, government data showed on May 9. Imports during the month under review dropped by 15 percent to $35.72 billion as compared to $42.02 billion in April 2013, according to data released by the ministry of commerce and industry here.


India’s sugar output to be 24.8 million tonne: USDA The US farm department has estimated India’s sugar production at 24.8 million tonne for the ongoing 2013-14 season, higher than the 23.8 MT forecast by the domestic industry body ISMA. The country had already produced 23.15 MT sugar till April 15 of the current October-September season, as per the data maintained by Indian Sugar Mills Association.

India’s biotech sector likely to touch $7 bn by FY15: Study India’s biotechnology sector is likely to touch $ 7 billion mark by end of the current fiscal with an average growth rate of about 20 per cent, according to a study by Assocham. The country’s biotechnology sector is divided into five segments based on the products and services offered – bio pharmaceuticals, bio services, bio agriculture, bio industry and bio informatics. The biotechnology sector in India, comprising of about 400 companies, has grown three-fold in last five years to reach $ 4 billion mark in FY13, the study pointed out.

India’s growth story a work in progress: PM Prime Minister Manmohan Singh on April 30 said India’s development story was “a work in progress” and that “there is a lot of distance that is still to be covered.” He was speaking at his farewell speech at the Planning Commission, with which he has been associated for the past three decades. “With an increasingly open and liberalised economy with a greater reliance on market mechanisms, we need to reflect on what needs to be the role of the Planning Commission in this new world,” Dr. Singh said.

Economic growth of 6% in FY15 is possible: Chidambaram India’s economy is likely to recover and achieve 6% growth in 2014-15 on the back of sound economic policies and a pick-up in investment, finance minister P Chidambaram said on May 1.


New plan panel to decide on growth revision: Ahluwalia The Planning Commission chaired by Prime Minister Manmohan Singh on April 30 discussed the mid-term appraisal of the 12th Plan period but did not take any decision on lowering the growth target, leaving it for the new panel that will be formed after the general elections. The Planning Commission has set a target of 8 percent economic expansion for the 12th Five Year Plan period that runs from fiscal 2012-13 to 2016-17. Ahluwalia said economic growth in the coming years will depend on the policies of the new government that will come into power after the general election.

India can be leader in supplying medicines: Cipla Chairman India can be a global leader in supplying affordable and high quality medicines to the world, and especially to the underdeveloped countries where such medicines do not reach the poor because of their high cost and the monopoly of foreign manufacturers, said a leading entrepreneur. “India has emerged as the pharmacy of the world,” said Yousuf Hamied, chairman of pharmaceutical giant Cipla. “India is not just contributing to the arena of medicines but also playing a humanitarian role by manufacturing medicines and supplying them at a low cost across the world,” he said. “India is supplying essential medicines to people in all corners of the world. It is a great role towards humanity and also an initiative to curb the monopoly over medicines created by multinational pharma companies,” said Hamied.

Raghuram Rajan regains firepower with $300 billion reserves When Raghuram Rajan took charge of India’s central bank in September, the rupee was near its weakest on record and foreign reserves were at a three-year low. In the seven months since, the currency has been a world beater and holdings have climbed back above $300 billion. India’s defences against financial-market volatility are improving, according to Barclays Plc, as developing nations brace for an increase in US interest rates flagged by the US Federal Reserve. India’s currency hoard has risen $34 billion since the start of September to $309 billion, while the rupee rallied 14% from a record low of 68.845 per dollar in August, the biggest gain among 78 global exchange rates tracked by Bloomberg. Nomura Holdings Inc. sees the currency extending gains this quarter, buoyed by a combination of increased capital inflows and a narrowing current-account deficit.


Players from Gulf nations plan to invest in Indian solar sector Solar manufacturing sector in India is all set to get a boost players from Gulf countries are contemplating to invest in the country both in terms of finance and technology. They plan to form joint ventures with Indian manufacturers based on their engineering capabilities. The seeds of this collaboration were sown during a recent meeting of members of National Solar Energy Federation of India (NSEFI) and officials of Solar Alliance of Gulf Cooperation Council (GCC) and Saudi Arabia Solar Association. The collaboration assumes significance in view of India gaining experience in Solar energy in recent years and oil rich GCC countries increasingly focusing on solar energy and regional co-operation against global warming and climate change in general and solar energy in particular.

Corporate America committed to long-term investment in India Corporate America has reaffirmed US companies’ commitment to India’s growth and focus on reviving investor sentiment and cross-border collaboration in the first year after India’s elections. The US-India Business Council (USIBC), comprised of more than 350 of the top-tier US and Indian companies, made the reaffirmation at a meeting in New York with the Reserve Bank of India (RBI) governor, Raghuram Rajan. The private meeting was attended by top executives from global financial services companies and institutional investors, USIBC said.

Exports likely to grow at least 10 per cent in 2014: FIEO India’s exports are likely to grow by at least 10 percent in 2014, exporters body FIEO said on April 15, basing its forecast on the WTO’s projections of global trade. “On a rough estimate, India’s export growth has been more than double the global trade growth and thus we should expect a minimum of 10 per cent increase in exports in 2014,” Federation of Indian Export Organisations (FIEO) President Rafeeque Ahmed said.

WTO figures bring cheer to Indian export sector With the World Trade Organisation projecting world trade to grow by 4.7 per cent in 2014 and a slightly faster growth at 5.3 per cent in 2015, whic h is a 20-year average growth rate, the Federation


of Indian Export Organisations has noted that this augurs well for India’s exports. While world trade grew by 7.35 per cent on an average between 2005 and 2013, India’s exports grew by 15.66 per cent on an average in the same period, according to the FIEO. However, since India recorded only a modest growth of about 4 per cent in 2013-14, it is necessary for the trade to look at a 15 per cent increase in exports, taking it to $360 billion in 2014-15, said the FIEO chief.

eBay aims to create the world’s largest trader base in India In a move to create the world’s largest trader base, online marketplace eBay has tied up with traders body CAIT to encourage small retailers for selling products through its platform. eBay and Confederation of All India Traders (CAIT), which is associated with over 20,000 small trader associations in the country, have signed a Memorandum of Understanding (MoU) for the education and modernisation of Indian traders with the establishment of an ecommerce centre of excellence (COE). eBay, one of the world’s largest e-commerce platforms, has about 25 million traders globally and around 45,000 in India.

TCS, Mitsubishi sign agreement; to merge IT units India’s largest software services firm Tata Consultancy Services (TCS) has signed an agreement with Japanese major Mitsubishi Corporation to form a single IT services unit, the company said on April 21. The merger, in which TCS will hold 51 per cent stake and Mitsubishi 49 per cent, will create a new IT services company of significant scale in the Japanese market with annual turnover of over $600 million. TCS will hold 51 per cent in the merged entity, while Mitsubishi will have 49 per cent and the merged entities would be operational from July 2014, it added.

Data mining are of high strategic significance for Indian firms Technologies like data mining, cloud and cybersecurity have a high strategic importance for Indian companies in helping them transform their business over the next five years, a study by CII-PwC said. According to the study, 79 per cent of the respondents (CEOs of Indian firms) said technological advancements were changing how their consumers, workforce and operating environments work. About 71 per cent said “demographic shifts” and “shifts in global economic power” (51 per cent) would also play a role in this change, the report added. This newsletter is produced by Embassy of India, Paramaribo For feedback & comments please write to


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