Thread: Indian Economy

The Indian economy is doing well and should easily clock more than 8% this year and the year after while recent fears of a rise in the RBI repo rate due to lingering fears of higher than expected inflation (driven by strong consumer demand and hence spending) have put a damper on the growth of the sensex for this month and probably january as well.

Sameeeeeer!
Where have you been man??
Good to have you back!

Indian economy grows 9.1pc in half year

NEW DELHI: India’s economy grew 9.1 per cent in the first half of the financial year to September led by strong manufacturing growth, the government said on Tuesday.

“An important and favourable development in recent times is the growing sign of an industrial resurgence, particularly in manufacturing,” junior finance minister SS Palanimanickam told parliament while presenting a mid-year economic review. Industry recorded growth of 10.9 per cent during April to September, while services grew at 10.7 per cent.

The telecommunications sector saw an annual average growth of 27.1 per cent from 2000 to 2005, according to the review figures. Last month, official data showed that the economy grew a higher-than-expected 9.2 per cent in the second quarter to September, prompting the central bank to tighten monetary policy in December.

Prime Minister Manmohan Singh has set a target of nine per cent annual growth. Lifting annual growth to nine per cent from eight per cent over the next five years was “ambitious but feasible”, Singh said on December 9.

http://www.thenews.com.pk/daily_detail.asp?id=36185

Nissan to build 200,000-unit plant in India
Sun Dec 31, 2006 11:56 PM ET

TOKYO, Jan 1 (Reuters) - Nissan Motor Co. will build a 200,000 unit-a-year car factory in India with an initial investment of 50 to 60 billion yen ($420 to $500 million), the Nikkei newspaper said on Monday.

To support the Japanese auto maker's production, about 10 parts suppliers from Japan will also start local operations, bringing the group's total investment to around 100 billion yen, said the Japanese business daily, formerly called Nihon Keizai Shimbun, without citing sources.

The plant will begin operations in 2009.

Production will mostly centre on a new compact car with an engine displacement of around 1000cc. About one-third will be sold in India, and the rest exported to Europe and other regions, the paper said.

Nissan is considering whether to participate in a joint project between France's Renault SA and Indian utility and tractor maker Mahindra & Mahindra Ltd. , which are due to build a plant to assemble 500,000 cars a year from mid-2009. Renault holds 44 percent of Nissan.

Nissan has said it would make a decision by the beginning of March.

The Nikkei said Nissan would still take a stake in the Renault-Mahindra venture, but had decided that India's fast-growing car market warranted a plant of its own, especially in light of export possibilities due to cheap production costs, the paper said.

Nissan's plant, whose location will be finalised this month, would gradually add more models, eventually expanding its annual capacity to 400,000 units, the paper said. Two or three port cities in the west and south have been shortlisted for the site.

Under its mid-term plan, Nissan is looking for cheap production and parts procurement sites which it calls LCC, or leading competitive countries, and has earmarked India as a candidate example, along with China.

Among its group suppliers, Calsonic Kansei Corp. is due to invest as much as 5 billion yen for a factory to produce air-conditioning units and other parts, the Nikkei said.

India's passenger vehicle market in Asia's fourth-biggest economy is forecast to double to 2 million units by 2010.

Nissan has been looking for a way into the burgeoning Indian market, where Japan's Suzuki Motor Corp. and Honda Motor Co. have a sizeable presence.

Nissan has an agreement under with Suzuki is to supply Nissan with a new small car on an original equipment manufacturing (OEM) basis, mostly for export to Europe starting in 2008. In November, it called off discussions to form a separate joint manufacturing project in India with Suzuki.

Toyota Motor Corp. , which is set to become the world's biggest auto maker this year, is also looking to develop a low-cost passenger vehicle to boost its limited presence in India and challenge the dominance of Maruti Udyog Ltd. , a unit of Suzuki. ($1=119.04 Yen)

http://today.reuters.com/news/articl...-NextArticle-2

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India's GDP valued at a staggering $ 900 bn

NEW DELHI: The Indian growth story seems to be getting better by the day. Prime Minister’s Economic Advisory Council (EAC) headed by former RBI Governor Dr C Rangarajan has reflected both positives and negatives in the economy especially on the balance of payments side.

Rangarajan and his team updated the Prime Minister Dr Manmohan Singh on Balance of Payments (BOP) outlook for the current fiscal on Thursday.

In the report, the PM’s team has projected net accretion to reserves at US $22.6 billion during this fiscal. This will only add to the already build up in forex reserves that have crossed the US $177 billion mark as on last Friday.

Though continued healthy accretion in forex inflows is a welcome development, leveraging these funds and channeling them into productive projects, infrastructure ventures is a daunting task. “Utilising these funds in a judicious way is the biggest challenge before the government” said former RBI Governor Dr Bimal Jalan in a chat with ET Online.

Build up in forex reserves should be seen as an opportunity to do away with differential taxation regime for foreign and domestic players in industry and services sectors, bringing about a level playing field for those promoting long-term capital intensive core sector projects, said a banker on condition of anonymity.

Second major challenge seems to be the widening trade deficit that is likely to touch a staggering US $65.1 billion as per EAC report. With surge in oil import bill and moderation in non-oil imports, the deficit on trade front should definitely be a cause for concern.

But not many agree on this point. “In a developing economy like ours when our export growth is over 20 per cent and net invisibles are high, trade deficit should not be a matter of great concern” said Dr Jalan.

As per EAC data, the merchandise exports likely to touch US $128.4 billion while the imports are estimated to be US $194.3 billion. Software exports at US $28.5 billion and remittances from abroad at US $26.5 billion during 2006-07 are expected to make up for surge in imports and lead to accretion in forex reserves.

Thirdly, the report captures one important trend i.e. the ratio of total trade to GDP which is expected to jump to 35.9 per cent from 32.8 per cent in 2005-06. This ratio significantly points to the growing global integration of Indian economy.

Fourth major pointer in the report is that for the first time the net foreign direct investment (FDI) would touch US $9 billion, way above the portfolio flows of about US $7 billion. The EAC report has also accounted for the US $3 billion worth outward FDI during the financial year in case the Tata – Corus deal comes through or Reliance – GE Plastics takeover materializes given the aggressive mood of Indian corporates.

Fifth major pointer is the muscle that the Indian economy has amassed during last few years. Indian economy is expected further consolidate its size at a massive US $902 billion (Rs, 3,089,260 crore). The trend indicates that the economy is growing at a staggering US $100 billion per annum given the fact that the GDP was estimated at US $798 billion in 2005-06.

Wow nice.

Crossing $1000 billion will be a significant milestone.

BTW, China's GDP is around $2234 billion, while the US's is $13,500 billion!

So its just the starting, this is.

Originally Posted by Karthik

Wow nice.

Crossing $1000 billion will be a significant milestone.

BTW, China's GDP is around $2234 billion, while the US's is $13,500 billion!

So its just the starting, this is.

As they say..

First mile is hard to run.. second mile is easily done.

As economy is doubling every 7 years, so in next 9-10 years we should expect us to be in China's current position.