Indian Rupee Gains 8 Paise At 67.10 Against Us Dollar In Early Trade

Indian rupee gains 8 paise at 67.10 against US dollar in early trade
Indian rupee gained 8 paise at 67.10 in early trade (9.34 am) against the US dollar at at the Interbank Foreign Exchange (forex) market on Tuesday following selling of the American currency by banks and exporters amid firm domestic and global cues.
By: FE Online | Updated: August 30, 2016 10:02 AM  

Indian rupee vs US dollar Indian rupee gained 8 paise at 67.10 in early trade (9.34 am) against the US dollar at at the Interbank Foreign Exchange (forex) market on Tuesday following selling of the American currency by banks and exporters amid firm domestic and global cues. (Photo: Reuters)

Indian rupee gained 8 paise at 67.10 in early trade (9.34 am) against the US dollar at at the Interbank Foreign Exchange (forex) market on Tuesday following selling of the American currency by banks and exporters amid firm domestic and global cues. The local currency had opened at 67.11 and closed on Monday at 67.18 level against the US dollar. Domestic equity firm opening also supported the rupee. The BSE Sensex was trading 172.49 points up at 28,075.15, while NSE Nifty was trading 53.60 points up at 8,661.05 following firm global cues amid RBI’s latest report that said near-term growth outlook for India seems brighter than last fiscal and the economy is likely to expand at 7.6 percent in 2016-17.

Dollar weakness against other emerging market currencies also contributedto the rally. The American currency gave up gains after doubts were raised on weather US Federal Reserve really would hike interest rates as soon as September.

The rupee on Monday depreciated by 12 paise to close at 67.18 a dollar on account of strong demand for the US currency amid expectations of rate hike by the US Federal Reserve before the end of the year.

The Reserve Bank of India’s (RBI) reference rate for the dollar stood at 67.18 and for Euro stood at 75.18 on August 29, 2016. While the RBI’s reference rate for the Yen stood at 65.62, the reference rate for the Great Britain Pound (GBP) stood at 88.01.

 

Sources:financialexpress.com
 

Further Drop In Steel Imports To Help Domestic Mills Regain Lost Market Share

The twin impact of anti-dumping duty and minimum import price is likely to help steel players overcome market challenges led by domestic weak demand. While imposition of provisional anti-dumping duty (ADD) on hot-rolled and cold-rolled coils for six months will help domestic flat steel producers overcome challenges in the market caused by weak domestic demand, extension of minimum import price (MIP) on a truncated list of steel products for two months will benefit the industry, ratings agency ICRABSE 1.39 % has said in its latest sector report.

The latter will particularly benefit producers of long steel products which do not attract ADD as of now.

"India's steel imports, which fell by around 29% year-on-year (YoY) in April-June quarter of the current fiscal largely due to MIP and Safeguard Duty (SGD), are expected to reduce further in the coming months, thus helping domestic mills regain lost market share," Jayanta Roy, senior vice-president, ICRA said.

Domestic hot-rolled coil (HRC) prices witnessed a drop in July 2016 on account of weak demand and subdued Chinese export prices. However, after the imposition of ADD in August 2016, HRC prices have increased by Rs. 1,500/tonne and are expected to remain buoyant in the near term as domestic HRC prices are still cheaper than landed cost of Chinese import offers by about 13%.

However, steel prices are unlikely to increase significantly from the current levels unless demand growth strengthens, ICRA said given a marginal demand growth of 0.4% in Q1 FY2017 and concern linked to overcapacity in the domestic market. Given the scenario, an expected revival in rural demand following a normal monsoon after two years, and a likely rise in discretionary consumption after the 7th Pay Commission payouts, remain critical for an improvement in domestic steel consumption in the second half of FY2017, the report added.

 

Sources:economictimes.indiatimes.com

Businessline Twenty Years Ago Today: Sugar Export To Be Decanalised

 The United Front Government has decided to decanalise sugar exports, breaking the monopoly of the Indian Sugar and General Industries Export Import Corporation (ISIGEC) which was the sole canalising agency until now Parliament’s approval will be sought shortly to amend the Sugar Export Promotion Act (1958) The decision to allow several players to export sugar by amending the SEPA Act has been taken by the Union Cabinet. The Food Ministry, which piloted the proposal for decanalisation, will forward a draft amendment to the SEPA to the Law Ministry for clearance.

Hind Lever pays 60% interim

Hindustan Lever Ltd (HLL) has announced an interim dividend of 60 per cent. It had declared an interim dividend of 50 per cent in the previous year. The company has recorded a 37 per cent jump in net sales at Rs 2,207.27 crores for the half year ended June 30, 1996 compared with Rs. 1,610 crores in the corresponding period of the previous year. According to a press release, the company has recorded a profit after tax (before extraordinary items) of Rs 147 89 crores, an increase of 40.1 per cent Profit before tax for the period was Rs. 23853 crores.

ICICI tells nominees to police corporates

The ICICI has told its nominees on company boards to act against managements which do not perform and adhere to ‘best’ corporate practices. In what signals an attempt to raise the standards of corporate governance in India, where the financial institutions have large equity holdings, ICICI has told its nominees to closely monitor the working of the company and also ensure that promoters follow the mandatory procedures at board meetings.

 

Sources;thehindubusinessline.com

Indian Oil Corp Raises Oil Import From Iran To 5 Mt For Fy'17

 Indian Oil Corp, the nation's biggest oil firm, has raised crude oil import from Iran to four fold and has cleared most of the past payments as sanctions against the Persian Gulf nation were eased.

"We have contracted to import 5 million tonnes (MT)of crude oil from Iran in 2016-17, up from 1.2 MT,"  IOC Director (Finance) A K Sharma said here.

India has steadily raised crude oil imports from Iran after US sanctions were lifted in January this year. Iran today is India's fourth biggest crude oil supplier.

Iran, which was India's second biggest supplier of crude oil after Saudi Arabia till 2010-11, had been relegated to 7th place in 2013-14 and 2014-15 out of the 50-odd nations India sources its crude oil from.

But with the lifting of sanctions in January this year, crude oil imports have steadily climbed. India imported 12.7 MT of crude oil in 2015-16, up from 11 MT in the previous two fiscals.

That made it 6th largest supplier of oil to India.

In April-June this year, India bought 5 MT of crude oil from Iran, making it the fourth largest supplier just a shade behind Venezuela which exported 5.2 MT.

Iran had in 2009-10 supplied 21.2 MT which came down to 18.5 MT in 2010-11 and to 18.1 MT in the year after.

Sharma said imports from Iran were going exactly in line with the plans. "Month-wise lifting is in line with the 5 MT contracted volume," he said.

IOC Director (Refineries) Sanjiv Singh said the company had paid $510 million out of the total outstanding of $621 million due to Iran in past oil dues.

Sanctions had blocked payment routes and dues had accumulated over the past couple of years.

After accounting for the exchange variations, the total outstanding due is only $55 million now, he said.

Iraq this year has overtaken Saudi Arabia as India's top oil exporter. It sold 11 MT of crude oil to India during April-June, higher than 10 MT sourced from Saudi Arabia.

Saudi Arabia has been India's top supplier of crude oil — selling 35 MT of oil in 2014-15 and 40.04 MT in 2015-16.

During the first three months of current fiscal, India imported 53.2 MT of crude oil, 65 per cent of which came from the volatile Middle East region.

India imports about 80 per cent of its oil needs.

 

Sources;business-standard.com

Cai Projects 33.60 Million Bales Cotton Production For 2016-17

 A favourable monsoon across the country has resulted in an increase in productivity of cotton despite a 10% fall in area under cultivation for the year 2016-17. However, according to the first projection report by Cotton Association of India (CAI), cotton production is being estimated at 33.60 million bales (A bale of 170 kg) for the year 2016-17, marginally lower from 33.77 million bales production in 2015-16.

The projected balance sheet drawn by the association has estimated total cotton supply for the cotton year 2016-17 at 40 million bales as against 42 million bales last year. Cotton year starts from October and end in September every year in India.

"Area under cotton crop is expected to be lower by 10 per cent in 2016-17. However, productivity is likely to be higher during the 2016-17 season due to the better weather conditions across all cotton growing regions in India. Therefore, the crop for the next cotton season is expected to be similar to the cotton crop for the current season," said Dhiren Sheth, president of CAI.

As per the agriculture department of India, cotton sowing has been done on an area of around 10.15 million hectares as on August 19, 2016, down by 8 per cent from 11.02 million hectares in corresponding period of 2015.

CAI in the projection report has estimated domestic consumption at 30.80 million bales same as in current year.

However, despite no significant change in domestic production and consumption of cotton, the association has predicted higher import of two million bales in next cotton year as against 1.5 million bales in this year.

Cotton production in the central zone of India which includes Gujarat, Maharashtra and Madhya Pradesh has been estimated at 19.50 million bales as against 18.47 million bales. On the other hand, production estimates for north and south zone stand at 4.2 million bales and 9.3 million bales, respectively. Last year, while north zone had seen production of around four million bales, south zone had seen around 10.75 million bales.

According to CAI, as on July 31, 2016, 33.40 million bales of cotton have been arrived in the markets in current season.

 

Sources;.business-standard.com

Rupee Weakens To A One-Week Low Against Us Dollar

The Indian rupee on Monday weakened to a one-week low against the US dollar, tracking the losses in its Asian peers after comments by US Federal Reserve speakers on last Friday raised the possibility of a September rate hike.

Traders are also cautious ahead of the gross domestic product (GDP) data for the June quarter and fiscal deficit data for July on 31 August. According to Bloomberg analyst estimates, GDP may be at 7.5% from 7.9% in the March quarter.

The home currency closed at 67.18 per dollar—a level last seen on 22 August, down 0.18% from its previous close of 67.06. The rupee opened at 67.14 per dollar and touched a low of 67.21, a level last seen on 22 August.

The 10-year bond yield closed at 7.123%, compared with its Friday’s close of 7.129%. Bond yields and prices move in opposite directions.

India’s benchmark Sensex index rose 0.43% or 120.41 points to closed at 27,902.66. So far this year, it has gained 6.83%.

Most Asian currencies markets slipped after Fed chair Janet Yellen indicated that an interest rate increase remains on the cards for this year.

The case for a rate hike has strengthened in recent months, with a lot of new jobs being created, and economic growth is looking likely to continue at a moderate pace, Yellen said in a speech at the Fed’s annual monetary policy conference in Jackson Hole, Wyoming, on Friday.

While Yellen did not give guidance on what the central bank needs to see before raising rates, she said the Fed already thinks it is close to meeting its goals of maximum employment and stable prices. She described consumer spending as “solid” but noted that business investment was weak and exports hurt by a strong dollar, Reuters reported.

South Korean won was down 1%, Malaysian ringgit 0.7%, Indonesian rupiah 0.42%, Japanese yen 0.34%,Taiwan dollar 0.22%, Philippines peso 0.18%, China renminbi fell 0.17% and Singapore dollar 0.13%. However, Thai Baht was up 0.18% and China offshore was up 0.04%.

The rupee is down 1.5% till date this year, while foreign institutional investors (FIIs) have bought $5.78 billion in equity and sold $1.19 billion in debt markets.

The dollar index, which measures the US currency’s strength against major currencies, was trading at 95.7, up 0.14% from its previous close of 95.566.

 

Sources :.livemint.com

Higher Domestic Prices Dent Cotton Exports From India

 Domestic cotton prices are on the upside since April, due to expectation of weak production. This has affected exports, mainly to Pakistan. In the current cotton year (it runs from October of one year to September of the next), about 37 per cent of exports have been to Pakistan. However, with prices moving up to Rs 50,000 a candy (356 kg), this is being hit, says the trade.

“China is the major buyer for Indian cotton but this year's demand was not so good. Against it, due to crop failure, Pakistan became a major importer. However, if our prices were lower, our overall export might be higher than it has,” said J Thulasidharan, president of the Indian Cotton Federation.


As per reports, Pakistan is looking at other options such as the US to import cotton. Even Indian experts believe that. So far, India has exported about 2.5 million bales to Pakistan only out of the total exports of 6.8 million bales.

"During June and July this year, Indian cotton prices were higher than international prices. While buyers are getting cheaper cotton from others why one should buy at the higher rates. However, all depends on demand. There was a good demand from Pakistan this year but after prices gone up, this has affected the export from India," said Naveen Mathur, associate director of commodities and currencies business at Angel Broking.

Because of high cotton prices in domestic markets, many mills from South India are importing from West Africa. According to industry sources, India has imported about two million bales of cotton during this year so far.

Thulasidharan said: "Higher domestic price also increased the cotton import this year as stock size in India is less. This has forced the domestic mills to import cotton. So far India has imported about two million bales and it may increase further.

 

Sources ;business-standard.com

India's First Textile City Likely To Come Up In Ap

India’s first integrated textiles city is likely to come up in Andhra Pradesh. The central government has already initiated the process of identifying land, technology and expertise for the same.

According to sources, Textiles Minister Smiriti Irani has spoken to Andhra Pradesh Chief Minister N Chandra Babu Naidu for providing land and other facilities.


With Naidu’s Telugu Desam Party being an ally of the ruling National Democratic Alliance at the Centre, the proposal, mooted by the NITI Aayog, is likely to be accepted.

Officials said Irani, along with Naidu and top officials from NITI Aayog, would visit China to get a first hand information on the working and structure of the proposed mega textile city.

The city would be largely catering to the export market and build a brand for Indian textiles.

China is a pioneer in building such mega textiles cities. The China Textile City in Keqiao district is one such example.

Founded in the 1980s, China Textile City is the first national professional textile market spread over a construction area of 3.65 million square metres with 29,000 companies managing 40,000 kinds of products.

The textiles sector is the largest employer in the country, employing 32 million people and is critical to Prime Minister Narendra Modi’s plans to create jobs in the country.

It announced a special package for the sector in June aimed at improving India’s competitiveness, which would lead to greater production. The reforms, in turn, are expected to generate 10 million new jobs in the textiles sector in three years.

The package is estimated to cost Rs 6,000 crore, which includes funds for additional five per cent duty drawback for the garments sub-sector.

The government will also bear the cost of employers’ contribution under the Employees’ Provident Fund scheme for new employees of the garment sector earning less than Rs 15,000 a month for the first three years.

The government is also working on a revamped national textiles policy, which is expected to be placed before the Cabinet soon. The draft policy focuses on achieving $300 billion exports and 35 million new jobs by 2024-25.

India exported $36.25 billion worth of textiles and related goods in 2015-16 — a 2.4 per cent decline from 2014-15.

 

 

Sources :business-standard.com

India Aims For Zero Import By 2020, 37 Mobile Manufacturing Units Set Up In Last 1 Year

India has attracted investment from 37 mobile manufacturing companies in last one year that have generated 40,000 direct jobs and 1.25 lakh indirect employment, IT Minister Ravi Shankar Prasad said today

"We decided to make India a big hub of electronics manufacturing. In the last one year, 37 new mobile manufacturing units have come," Prasad said after inaugurating government-funded 'Electropreneur Park'

He said that 11 crore mobile phones have been made in the country in last one year compared to 6 crore earlier

"We have given jobs to forty-thousand people and 1.25 lakh indirect jobs," Prasad said

Chinese companies like Gionee and Xiaomi are making their handsets at Foxconn plant in Andhra Pradesh. Domestic companies such as Karbonn, Lava, Micromax, Intex, Jivi, iTel, and MTech too have set up their manufacturing plants in the country

As per industry sources, Chinese company LeEco will start mobile manufacturing unit on Tuesday

Prasad said that besides manufacturing electronics product in India, product designing is also important

He said that government has provided Rs 10,000 crore under Electronics Development Fund to support new entrepreneurs in the field of electronics
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The Electropreneur Park (EP), which was innaugurated on Saturday in South Campus of Delhi University, is an incubation centre set up with government funds of around Rs 21 crore to support incubation of up to 50 companies

Also Read: India's share in global smartphone market may double in 3 years: Prasad

Set-up in collaboration with academia and industry represented by Indian Electronics and Semiconductor Association, the Park will focus on creation of intellectual property rights and product development to increase domestic manufacturing of electronics items

"India imports electronic goods of over Rs 3 lakh crore

By 2020 government aims to bring down import to zero. The Electropreneur Park started today is a step in that direction," Minister of State for IT and Law P P Choudhary said

Ministry of Electronics and IT has selected six start-up firms that will develop products at this incubation centre

"6 out of 176 start-ups have been selected which means they have capability of developing good quality products and selection of six more are in pipeline," MEITY Additional Secretary Ajay Kumar said.

 

Sources ;indiatoday.intoday

Refinery Wars: China, India Win; S. Korea, Japan, Singapore Lose

There is little doubt that China’s surging exports of refined fuels have cut profit margins for Asia’s refiners, but the pain is unlikely to be shared equally across all the region’s exporters of oil products.

Given the scarcity of detailed official data on oil product imports and exports among many Asian countries, it’s nigh impossible to build a completely accurate picture of the likely winners and losers.

However, detailed data is provided by China on the export destinations of its product exports, and Australia, the region’s biggest importer of refined fuels, also gives a country-by-country breakdown of its imports.

The overall picture for Asia’s refiners is that profit margins appear to have shifted structurally lower as a result of China’s massive exports of diesel and petrol.

China’s exports of 370,000 barrels per day (bpd) of diesel in July were 181.8% higher than the same month last year, and year-to-date exports are up a staggering 223%.

Its petrol exports are also up sharply, rising 84.3% in the first seven months from a year ago.

The Chinese customs data does give clues as to where the additional fuel exports are heading, with gasoline shipments to Malaysia rising 490% in the first seven months of the year for example.

For diesel, Chinese exports to the Philippines are up an astounding 2,084% to the equivalent of about 45,000 bpd, and those to Australia have jumped 1,049%.

But these figures must be treated with some caution as they reflect only direct exports to those countries, and not cargoes shipped through another country.

Chinese customs figures show a 134.7% rise on diesel exports to Singapore in the first seven months of the year and an 119% increase in shipments of gasoline.

Singapore is the region’s main trading hub and the Chinese exports to the island state are almost certain to be re-exported to other countries.

Australia shows losers

For this reason, looking at the Australian statistics is useful, as it breaks down fuel imports by country of origin.

Australia reports data in megalitres and converting this to barrels per day using the BP conversion factors shows that China exported about 54,000 bpd of refined products in June, the latest month for which statistics are available.

This was almost 50% higher than the average 37,800 bpd Australia imported from China in the year ended 30 June.

As China’s exports to Australia have risen, other countries have seen theirs decline.

South Korea’s total product exports to Australia were about 135,800 bpd in June, down from an average of 167,800 bpd in 2015-16, while Singapore’s dropped to 86,795 bpd from 135,700 bpd and Japan’s from 121,700 bpd to 86,000 bpd.

Looking specifically at diesel, the main product that Australia imports given its reliance on the fuel for powering the country’s mining industry, and a similar pattern emerges.

Australia bought 37,608 bpd of diesel from China in June alone, versus an average 10,511 bpd for the year to 30 June.

Shipments from South Korea to Australia dropped to 46,963 bpd in June from the 2015-16 average of 71,496 bpd, Singapore declined to 52,731 bpd from 80,444 bpd and Japan to 64,707 bpd from 68,000 bpd.

While Australia’s three traditional suppliers of refined products all appear to be losing market share, it’s not just China that is gaining.

Australia bought 47,900 bpd of diesel from India in June, up from the 2015-16 average of 30,000 bpd.

With both China and India gaining increased shares of Australia’s open and competitive refined fuels market, this would seem to indicate that they are more competitive than refineries in South Korea, Japan and Singapore.

Given both India and China have the most modern and presumably cost-efficient refineries in the region, it makes sense that they’re able to be more competitive.

China’s overbuilding of refinery capacity will continue to act as a disruptor in Asia’s fuel markets, making profits harder to come by and forcing refiners to focus on cost-cutting and flexibility in marketing in order to prosper. Reuters.

 

Sources :.livemint.com

To Make India Diamond Global Trading Hub, Commin Eyes Booster Shot For First-Ever Snz

The commerce ministry is pitching for a reasonable and presumptive tax structure for the diamond industry — roughly similar to the one in Belgium — in the special notified zone (SNZ) to help India emerge as a global trading hub in the precious stones, reports Banikinkar Pattanayak in New Delhi.

Though the revenue department will have the final say on the tax rate, the commerce ministry will likely favour a presumptive tax on turnover of 2-3%. Such a move, the ministry feels, is vital to provide a leg-up to the country’s first SNZ for diamond in Mumbai.

The zone hasn’t witnessed any trading activity since its inauguration in December last year due to a “convoluted” tax structure, a senior official told FE. This could be part of the commerce ministry’s pre-Budget recommendations, to be submitted to the finance ministry.

Currently, as per the benign assessment procedure (BAP) introduced in 2007-08, net profit for the diamond business is presumed at 6 % for the purpose of computing corporate income tax. However, the industry’s contention is that 6% is too high, as the usual profit margin in the business is only 1-3%. By contrast, the effective presumptive tax for the diamond industry in Belgium stands at a meagre 0.06-0.09% of turnover, while that in Israel is in the range of 0.29% to 0.33%.

Even a task group under former director general of foreign trade Anup Pujari had conceded that only 2% of the industry players might be able to meet the threshold of 6%. This is because actual net profit in diamond manufacturing is in the range of 1.5-4.5% and in diamond trading in the range of 1-3%, the task group had said in a report in 2013.

Also, there can be huge differences in yields and in the gross margins of various companies, as the processes and the yield vary, depending on the rough diamonds procured.

Such high tax, along with a plethora of documents required to be submitted for complying with the tax structure, have encouraged domestic companies to import rough diamonds from places like Antwerp or Dubai and export them after polishing.

India had set up the special notified zone in Mumbai for diamond to remove middlemen and encourage overseas diamond mining companies to open their offices at designated places to sell rough diamonds directly to Indian manufacturers. This was also to help relatively smaller players to cut down on costs on foreign travels and setting up offices in places like Antwerp or even Dubai to source diamonds.

The success of the SNZ is important as although over 90% of the world’s rough diamonds are polished in India, domestic manufacturers still have to source the commodity from Belgium due to a benign tax regime there.

 

Sources:.financialexpress.com

Today, Kwid Is Biggest Make In India Story: Renault India's Md Sumit Sawhney

 Renault India's managing director Sumit Sawhney says the response to the Kwid mini car has exceeded expectations. The French carmaker is now going all out to tap the growing Indian market with one new car every year for the next four-five years. Renault, he said, is in an "investment mode" as it continues to invest in new products and Kwid variants. In a meeting held last week with ET reporters, Sawhney said India needs better free trade agreements (FTAs) with Europe, UK and Asean countries. Edited excerpts:

How has the journey of Kwid been so far?
The mini-car segment is the toughest segment and very hard to break. Nobody has succeeded in the past, but in the last 10 months, we have managed to garner 15 per cent share and we are selling about 9,000 units a month. We knew entry into this segment cannot be half hearted. So we created a platform for emerging markets ground up and for the first time in our 118-year history, a global car was launched outside of Europe, that too in India. So far, it has exceeded our internal expectations.

What was the recipe for the success?
We cannot succeed if we don't bring innovation. This is not just limited to design, product, features or technology. One of the biggest innovations for us was on cost. That is why everything about Kwid was built ground up. We wanted to sell a car at a certain price, so we went ahead with 98 per cent localisation. Nobody has ever done this before in India. Barring some electronics parts, all major parts are locally manufactured. Today, Kwid is the biggest 'Make in India' story. We invested a lot in basics, if you want to succeed in a country like India, you cannot succeed by luck. You need the infrastructure. We have invested in a big plant, a very big technology centre, which employs 5,000 people, two design centres in India and a global parts distribution centre in Pune. We got the basics right. For us it is a global car designed and developed out of India.

What are your future plans and projections?
Our aim is to launch one new car every year. We have been able to come up with a new CMFA platform and launched one car with 98 per cent localisation. We can recreate things in the sub-4-metre segment. We have understood the localisation game and can go beyond four metres also. A platform can easily take 4-5 bodies of new styles. I already have 75,000 customers for the Kwid. Before we close the year, we will have 1,25,000 customers on the road.

How important is India for Renault global?
This year, India is among the top 10 markets for Renault worldwide (in terms of volumes). The world's top three car markets will be China, the US and India. Renault is new to China, and is not there in the US and we are in a good position in India. So India remains very, very important. Chairman Carlos Ghosn reviews all the India programmes himself.

Are cab aggregators a target segment?
At this point no. We have enough demand from the personal owner segment for Kwid, which is our volume driver. But for the overall industry, it definitely is a target segment.

How difficult is it to satisfy the Indian customer?
The Indian customer is socially very aware. They want the latest and the best at the lowest cost. That is a combination which is very tough to create. If we see the same markets, 7-8 years back, the life cycle of a product was 5-6 years, but now you have to bring in changes every 2-3 years. Otherwise, the customer will bypass you. So the second point is consumer loyalty is very low in our country because he is always looking forward to a value proposition. The consumer is never wrong, we will have to keep pace with his expectations. If we have to bring something in India, it has to be innovative, it has to be a game changer. First it was the Renault Duster, now it is the Kwid. There are many more to follow.

What about Kwid's profitability?
In small cars nobody makes money till the time you have localised. Maruti SuzukiBSE -0.10 % is making money, so is Hyundai, so it was important for us that we make money on what we launch. That was also one of the criteria for pushing for 98 per cent localisation, so that we are not exposed to too much of forex risk, because that is what kills us. As for small cars, without going into specifics, we are slightly ahead of our internal plans on profitability. So is Renault overall making money? My answer will be no, as we are in an investment mode. We are still investing in Kwid and in our future products.

What is India's potential as an export hub?
We need better FTAs with Europe, UK and the ASEAN countries. Australia has stopped manufacturing cars and everything they buy is imported into the country. Similar is the story in the middle-east. Africa is another big opportunity. Also, India has the potential to be a big base for parts exports. Our chunk of parts sourced for global operations from India is growing month on month. Today we are making big number of cars in Romania, Turkey, and Morocco. A lot of our cars to Europe come from Morocco. With good policies we can explore such opportunities out of India also. There is so much capacity lying here in our country that if we have favourable FTAs, it can be deployed for exports. That wouldn't even need significant investments.

 

Sources ;economictimes.indiatimes.com

Rupee Closes Higher Against Dollar

The rupee on Tuesday strengthened against the US dollar, tracking gains in the Asian currencies markets.

The home currency closed at 67.06 per dollar, up 0.18% from its previous close of 67.19. The rupee opened at 67.12 per dollar and touched a high and a low of 67.04 and 67.14 respectively.

Asian currencies closed higher. The South Korean won was up 1%, Philippines peso 0.23%, Taiwan dollar 0.22%, Japanese yen 0.2%, Thai baht 0.2%, Chinese renminbi 0.12%, Singapore dollar 0.1%, China offshore 0.1%.

US Federal Reserve chair Janet Yellen is scheduled to deliver a speech on Friday on the US economy and monetary policy at the Economic Policy Symposium at Jackson Hole, Wyoming. Yellen’s remarks will be delivered following the hawkish rhetoric from Fed vice-chairman Stanley Fischer and New York Fed president William Dudley, Reuters reported.

The 10-year bond yield closed at 7.159%, compared with its Monday’s close of 7.161%. Bond yields and prices move in opposite directions.

India’s benchmark Sensex index rose 4.67 points, or 0.02%, to 27,990.21. So far this year, it has gained 7.17%.

The rupee is down 1.35% till date this year, while foreign institutional investors have bought $5.85 billion in equity and sold $1.1 billion in debt markets.

The dollar index, which measures the US currency’s strength against major currencies, was trading at 94.346, down 0.18% from its previous close of 94.519.

 

Sources ;livemint.com

World Steel Production At 133.7 Mn Tonne In July, Up 1.4%: Wsa

 World's crude steel production stood at 133.7 million tonne in July, up 1.4% from corresponding period last year with India making a significant contribution in%age terms despite a not-so-strong demand scenario in the domestic market.

As per the World Steel Association (WSA) release, China's crude steel production was at 66.8 million tonne, up 2.6% from same period last year.

Elsewhere in Asia, Japan produced 8.9 million tonne crude steel, an increase of 0.5%, while India produced 8.1 million tonne of crude steel in July 2016, up 8.1% compared to the same month last year. South Korea's crude steel production was 6 million tonne, up 1.5%.

The WSA report showed production for 66 countries across globe where capacity utilisation ratios of the 66 countries were at 68.3%, same as the July 2015 levels. On sequential basis, however, utilisations dropped 3.7%age points.

In the European Union, Germany's crude steel production stood at 3.4 million tonne, down 6.1%, while United Kingdom produced meagre 0.7 million tonne, down 27.3%.

Turkey's crude steel production for July 2016 was 2.7 million tonne, up 6.5% from same period last year. Russia produced 6.1 million tonne crude steel, up 0.9% over last year. Ukraine produced 2.1 million tonne crude steel, up 10.5% compared to the same month in 2015. United States produced 6.9 million tonne, a decrease of 2.2% compared to July 2015, while Brazil's crude steel production stood at 2.7 million tonne, down 6.0% on year-on-year basis.

Despite weak seasonality, this is a strong performance. "We attribute this production rise to recent commissioning of capacities by most of the bigger integrated producers such as Steel Authority, JSW Steel and Tata Steel," said Emkay Global in its report. Essar Steel has also been improving its utilization, it said.

Since last few months several measures have been put in place by several countries to protect their steel industries with India being no exception. India has notified anti- dumping duty on hot-rolled and cold-rolled products recently replacing minimum import price (MIP) to address the concerns of the primary steel producers. However, despite these measures, poor demand has been weighing on the prices for last few months.

"We believe, sustainable demand growth is eminent for price recovery and so a good monsoon and 7th pay commission may help in this regard," said the brokerage.

 

sources :business-standard.com

Govt Slaps Anti-Dumping Duty On Cold-Rolled Flat Steel Products

Less than a fortnight after imposing anti-dumping duty on hot-rolled flat steel products was imposed, the Finance Ministry has extend a similar levy on another grade of steel — cold-rolled flat products.

Continuing its protectionist approach towards the domestic steel industry, the government has imposed provisional anti-dumping duty on cold-rolled flat products of steel imported from China, South Korea, Japan and Ukraine, for six months.

Cold-rolled flat products of steel are used in sectors such as automotive, appliances, furniture, electrical panels, general engineering, capital goods, construction, packaging including drums and barrels, coating and plating including galvanising, colour coating, tinplates etc.

This Revenue Department move has come less than a fortnight after the Designated Authority in the Commerce Ministry recommended levy of provisional anti-dumping duty. The anti-dumping duty imposed is difference between $ 594 per tonne and “landed value” in case of specified producers from these four countries. In case of some producers, a ‘Nil’ rate has also been specified by the Revenue Department.

Essar Steel India Ltd, Steel Authority of India Ltd, JSW Steel Ltd and JSW Steel Coated Products Ltd had jointly filed the petition seeking anti-dumping duty on cold-rolled flat products of steel from these four countries.

According to steel industry officials, with the minimum import price on 66 products extended for two months in early August, the anti-dumping duty on hot-rolled flat steel products and the same on cold-rolled steel products, the entire gamut of steel imports have been covered.

The government has come out with these measures so that the domestic industry remains competitive after steel imports shot up 20 per cent year-on-year at 11.208 million tonne in 2015-16.

When minimum import price was first levied in February 2016, it helped bring down imports. During April-July 2016, total steel imports have come down to 2.39 million tonnes or 34 per cent lower than the same period last year.

Domestic production which grew 3.7 per cent to 35.238 million tonne during April-July 2016 has managed to substitute falling imports. But, steel consumption has largely remained stagnant at 26.18 million tonnes during the period.

Steel stocks

As the anti-dumping duty on cold-rolled flat steel products was expected, shares of domestic steelmakers did not react much to the development.

“The positive impact had been factored in by the market. Therefore, there was not much action on the trading floor with the steel stocks on Thursday,” a Mumbai-based analyst said.

On Thursday, shares of JSW Steel shares closed 0.45 per cent higher at ?1,779.95, Steel Authority of India Ltd closed 0.1 per cent lower at ?48.1, Tata Steel closed 1.06 per cent lower at ? 387.20 while Jindal Steel and Power Ltd closed 4.02 per cent higher at ?85.45.

However, stocks of steelmakers have rallied over the last one year due to the policy decisions that have kept them competitive against imports.

In the last one year, Tata Steel’s shares rose 53 per cent, JSW Steel’s share price has grown 80 per cent, Jindal Steel and Power Ltd’s stock price rose 20 per cent and only SAIL’s share price has slumped by 16 per cent.

 

Sources :.thehindubusinessline.com

Buffalo Meat Exports On Recovery Path

 India's buffalo meat exports have recovered from last year's sharp decline on reduced supplies from Brazil, the world's largest exporter.

Data compiled by the Agricultural and Processed Food Export Development Authority, showed India's buffalo meat exports at 280,853 tonnes worth $814.09 million in April-June against 269,756 tonnes worth $853.90 million in the corresponding period last year.


The unit value realisation declined from $3,165.44 a tonne in April-June 2015 to $2,898.65 a tonne during the same quarter this year.

India's buffalo meat exports to major importing countries, especially in West Asis, have gained due to the supply uncertainty in Brazil and Pakistan.

"India has raised its certified halal meat supply in the last few months. Since many export-oriented units have modernised their plants, importers have now shifted their demand from countries like Portugal, Argentina and Pakistan," said Arshad Ali Quddus, proprietor of Al Quddus Sons International, a New Delhi-based buffalo meat exporter.

India is gaining a market captured earlier by Brazil due to lower realisation by its exporters. The Brazilian real has appreciated 12 per cent against the dollar after a steep fall last year. By contrast, the Indian rupee has depreciated by 2 per cent.

Buffalo meat exports on recovery path
India's buffalo meat exports declined in volume and value in 2015-16 on a slump in demand. From 1.48 million tonnes worth $4.78 billion in 2014-15, exports fell to 1.31 million tonnes worth $4.06 billion in 2015-16.

"The recovery during April-June is likely to continue," said an exporter based in Uttar Pradesh.

Credit rating agency ICRA forecasts India's buffalo meat exports will be driven by improving infrastructure, a sizeable buffalo population, the relatively lower price of Indian buffalo meat, and steady demand in the international market. ICRA estimates buffalo meat exports will grow at an annual rate of 8 per cent to Rs 40,000 crore by 2020-21.

"While India has been exporting buffalo meat for almost two decades, this industry has only gained momentum in the last decade. This can be attributed to multiple factors, such as increasing demand from countries like China, Vietnam and Thailand, the slaughtering method meeting the religious requirements of certain ethnicities, price competitiveness, high buffalo population, and low domestic consumption," said Sabyasachi Majumdar, senior vice-president, corporate sector ratings, Icra.

Uttar Pradesh has 28 per cent of the country's buffalo population and is the leading buffalo meat-producing state, housing 60 per cent of standalone slaughterhouses and meat processing units.

Indian buffalo meat exports have grown at 29 per cent annually from Rs 3,533 crore in 2007-08 to Rs 26,682 crore in 2015-16, accounting for around 20 per cent of the world's total buffalo meat exports by volume.

 

Sources: business-standard.com

Change In Eu Regulations May Pose Problems For Indian Grape Export

A change in regulations on pesticide residue levels in grapes proposed by the European Union (EU) is likely to pose problems for the export of Indian grape to these countries in the coming season.


The EU has proposed to bring down residue levels of chlormequat chloride (CCL), a plant growth regulator, from the existing levels of 0.05 ppm (papers per million ) to 0.01 ppm soon.

Top officials of the Maximum Residue Level (MRL) Committee met in Pune, along with senior officials of the Union commerce department, APEDA at the National Research Centre for Grapes, has decided to approach the EU to file a say on behalf of Indian exporters, senior officials said.

In 2010, Indian grape exports faced a setback, with EU reluctant to accept Indian table grape consignments as chlormequat chloride — a plant growth regulator — was detected in excess of the prescribed maximum residue level (MRL).

In 2009, EU had come up with new regulations on pesticides, raising the chemicals to be monitored from 98 to 167.

Unaware of the changed rules, Indian exporters who did not meet the new standards faced had rejection. Although only less than 10% of the total export volumes were rejected, the issue has escalated into a big one, going by the worry writ large on the face of both European delegates and Indian grape exporters.

Indian grapes began to find favour after 2014 when a 1.92 lakh tonne of grapes were exported by Indian traders to around 94 countries. Of this Europe and the UK together accounted for the largest share of 65,000 tonnes.

According to Jagannath Khapre, president, All India Grape Exports Association who was also present for the meet, it was decided at the meeting to seek a five-year period from EU to ensure that the existing residue levels in the soil completely go down.

CCL as a chemical is not hazardous and is used by grape farmers as a plant growth regulator, he explained. The European Food Safety Authority has also prescribed 1.06 ppm as a safe level and the existing European regulations state that the residue levels should be around 0.05 ppm, he explained.

The detection machines with EU until now have been able to detect pesticides to the level of 0.05 ppm and with advanced technology can now detect up to 0.01 ppm, he said.

A decision has been taken to present the relevant documents before the European Union authorities and seek a status quo on the existing levels, he said.

Khapre said the EU had proposed the changes in the regulation in June and as soon as it came to the notice of the association and other industry people, they approached the commerce ministry that responded by sending officials to understand the situation.

Around 60,000 tonne was exported to EU for the 2015-16 season. Canada has granted market access for the Indian fresh grapes. This follows the recent Indo-Canadian bilateral discussions held in New Delhi.

However, the Indian exporters will be able to take advantage of this development only from the next season. Canada will open a new market for the Indian exporters, who have been mainly shipping the fresh grapes to European countries.

But Canada has imposed conditions that exporters have to register the vineyards and pack houses, and maintain traceability.

The Netherlands is the largest buyer of Indian fresh grapes, accounting for more than half of the exports, followed by the UK and Germany.

 

Sources:  financialexpress.com

World Beating Growth Lures India Refiners To Myanmar Fuel Market

Indian refiners are seeking a foothold in neighboring Myanmar to capitalize on growth prospects as the Southeast Asian nation emerges from a half-century of military rule.

Numaligarh Refinery Ltd., a unit of India's second-biggest state-run refiner Bharat Petroleum Corp., plans to export gasoline to Myanmar. Indian OilBSE 0.89 % Corp., the largest refiner, is also keen on tapping the fuel retailing opportunity. An International Monetary Fund forecast for world beating economic expansion in 2016 points to growing demand for petrol and diesel in the nation.

"The growth opportunity in Myanmar is fabulous," Numaligarh Refinery's Managing Director P. Padmanabhan said in an interview in New Delhi. "We're talking to the Myanmar government."

Padmanabhan said Numaligarh Refinery eventually plans to supply 500,000 metric tons of gasoline every year, which is equivalent to about a quarter of the estimated 50,000 barrels a day of petrol Myanmar currently consumes. While the Asian Development Bank estimates the country needs $80 billion of power, transport, and technology projects through 2030, challenges in fuel retailing include industry fragmentation, shifting rules and illegal outlets.

The $67 billion economy of 54 million people offers untapped opportunities for foreign companies, after the US eased sanctions following elections last year.

It imports over 60 per cent of its refined fuel, and three domestic refineries with a combined potential for 57,000 barrels a day operated at 30 per cent capacity in 2015, according to BMI Research.

The forecaster estimates Myanmar's fuel consumption will expand at an average of 6 per cent yearly during 2016-2020, outpacing Cambodia, Vietnam and Thailand.

Numaligarh Refinery is prepared to truck supplies in while the company builds a pipeline through the Indian border to Tamu in Myanmar.

"If the price is very attractive in Myanmar, I'm willing to start tomorrow," Padmanabhan said in the Aug. 10 interview, adding he's seeking to boost exports to other neighbors such as Bangladesh, Bhutan and Nepal.

The Assam-based refiner in March exported India's first shipment of diesel to Bangladesh in about eight years. Padmanabhan said the target is at least 1 million metric tons of diesel exports annually to the South Asian nation.

Indian Oil Chairman B. Ashok told Bloomberg in March the state-run company owns three refineries in the northeast that can supply fuel to Myanmar.

China is Myanmar's largest trading partner, and China's Guangdong Zhenrong Energy Co. and local partners are planning a $3 billion oil refinery. That underscores the competition India faces for access to the opportunities Myanmar is thought to offer.

 

 

Sources:economictimes.indiatimes.com

Rupee Weakens Past 67 Mark Per Us Dollar

The Indian rupee on Friday weakened past the 67 mark, to hit a three-week low, against the US dollar as traders expect that the Reserve Bank of India (RBI) may delay cutting interest rates after recent higher inflation data. Traders also remained cautious ahead of the announcement of a new governor for the RBI expected anytime now.

At 1.30pm, the home currency was trading at 67.03 a dollar, down 0.30% from its previous close of 66.81. The rupee opened at 66.96 a dollar and touched a low of 67.03, a level last seen on 29 July.

India’s wholesale price inflation shot up to 3.55% in July from 1.62% a month ago on the back of rising prices of food and non-food articles, while consumer price inflation was at 6.07% in July from 5.77% in June on the back of rising food prices.

The 10-year bond yield was trading at 7.137%, compared with its Thursday’s close of 7.143%. Bond yields and prices move in opposite directions.

India’s benchmark Sensex index fell 0.22% or 61.75 points to 28,061.69. So far this year, it has gained 7.5%.

The rupee is down 1.3% till date this year, while foreign institutional investors (FIIs) have bought $5.73 billion in equity and sold $1.14 billion in debt markets.

Asian currencies were trading lower. South Korean won was down 0.92%, Taiwan dollar 0.8%, Malaysian ringgit 0.5%, Singapore dollar 0.46%, Philippines peso 0.41%, Indonesian rupiah 0.33%, China offshore 0.29%, Japanese yen 0.26% and Thai baht 0.28%.

The dollar index, which measures the US currency’s strength against major currencies, was trading at 94.438, up 0.29% from its previous close of 94.157.

Minutes of the US Federal Reserve’s last meeting struck a more dovish tone than earlier comments by New York Fed president William Dudley, who had flagged the possibility of borrowing costs being increased as soon as next month. US officials have twice cut projections for their rate hike path as economic weakness and volatile financial markets undermine the case for policy to be tightened, Bloomberg reported.

 

Sources :livemint.com

After Decline In Exports To The Usa And Europe, Indian Woollen Industry To Expand Market

 India's woollens industry is shifting focus to markets such as Kazakhstan, Germany, China and Australia as it faces decline in exports to the USA and Europe since the last financial year due to warmer winters and economic slowdown.

"The constant global warming is reducing severity of winter and it is playing a vital role in decline of exports. What is worrying is that the decline is 17 per cent from April to June 2016," said Sushil Kaura, chairman of Wool & Woollens Export Promotion Council under textiles ministry.

The exports that are mainly concentrated to the US and Europe dropped 3 per cent in 2015-16. Exports of wool and woollen products stood at Rs 3,012 crore in 2015-16 compared to Rs 3,112 crore a year ago

"The decline is 9.4 per cent in dollar terms for the period," Kaura said.

In dollar terms the exports stood at $462 million in 2015-16 compared to $510 million in the previous fiscal.

To overcome the impact of climate change, the council is holding trade fairs in the current financial year at Almaty in Kazakhstan, Melbourne in Australia, Munich in Germany and in China.

Apart from the changing climate, the rise in price of imported wool has heated up competition from Turkey, Thailand and Bangladesh for exporters. The 30-35 per cent rise in price of imported wool this fiscal has squeezed margins for the domestic players.

A Tirupur based manufacturer said that while makers of premium fabric and garments like RaymondBSE -3.75 % are able to absorb the price rise in imported wool, the smaller players are losing business.

"The last two winters have been of degrowth as impact of La Nina has arrested temperature drop in December and January," said Sudershan Jain, president of Ludhiana-based Knitwear and Apparel Manufacturers Association of Ludhiana,.

The industry feels that there is immediate need of government support in the form of increase in duty drawback rates, speedy release of drawback, abolition of import duty on raw wool, textile machinery and spare parts, and consideration of special package to boost exports, Kaura said.

 

Sources :economictimes.indiatimes.com

Sopa Urges Government To Increase Import Duty On Soyabean Oil

The Soybean Processors Association of India (SOPA) has urged the Narendra Modi government to increase duty on imported crude soybean oil to 37.5% and 45% on refined soybean oil, which is the WTO bound rate. This will check large scale import of cheap soybean oil and enable the domestic industry to start soybean meal exports again. It will also encourage soybean and other oilseed growers, the association feels.

In a letter to the Prime Minister, SOPA chairman Davish Jain has said that the soybean processing industry has been going through one of its toughest periods for the last 3 years and many of the units have had to close down. The major reason for this is large scale import of cheap edible oils including soybean oil at low rate of duty which has pushed up our prices of soybean meal and made us uncompetitive in the world market. Our exports have fallen from a high of Rs. 15000 crores to just Rs. 1500 crores during the last four years. The attached table and graph clearly show that as the soybean oil imports went up, soybean meal exports went down correspondingly and from a net foreign exchange earning of Rs. 6545 Crores in 2012-13, there was a net foreign exchange outflow of Rs. 19419 Crores in 2015-16. The net impact of increased soy oil import alone would be Rs. 25664 Crores.

"The burgeoning import of soybean oil which has increased several fold from a mere 10.55 lakh tons per annum (average of 2011-13) to 40 lakh tons (likely import in 2016) is also detrimental to the interest of oilseed cultivation in the country and will take us toward being totally dependent on imported oil as our own production of oilseeds may further go down," the letter adds.

At a time when the entire oilseed processing industry, particularly the soybean processing units are in great distress and facing closure because of cheap oil imports, the lobby of a handful of large importers and refiners have taken the opposite view in their own self-interest and have asked the government for reduction in duty on crude edible oil. This move has created a clear demarcation between the interests of business, led by importers versus the industry which is striving hard to survive.

The decision to maintain a duty differential of 7.5% between refined and crude oil was taken after careful consideration and a thorough investigation by the Tariff Commission (Ministry of Finance) into all aspects of oil refining. The cost of crude oil refining is not more than 5% at current prices and the 7.5% duty differential adequately protects the interest of crude oil importers. The demand for higher differential duty is, therefore, totally unjustified.

Right now when the very survival of the indigenous crushing industry is at stake, any reduction in duty will only mean more sickness, moving away of farmers from soybean cultivation and further increase in our dependence on imports. If the foreign suppliers were to take advantage of the situation and increase edible oil prices, the story of pulses may get repeated in edible oils also, Jain said in the letter.

 

Sources :economictimes.indiatimes.com

Coal India Anticipates Higher Sales As Imported Coal And Pet Coke Prices Rise

 The recent surge in international coal prices and pet coke may prove to be a boon for Coal India as it can now expect increased sales, particularly of the higher coal grades, to both the thermal and non-thermal consumers.

Imported coal prices, late June onwards, surged by over 30%. This month, imported coal of 6,000 GCV (gross calorific value) costs about $ 65 or Rs. 4348 a tonne on an average while pet coke surged by 73%. During January, pet coke was priced at $ 53 a tonne which has now increased to $ 92 or Rs. 6153 a tonne. Compared to these, Coal India's coal of a similar grade is priced at Rs. 3,000 for both the power and non-power sectors.

"Following the increase in imported coal prices and the government's push to increase sales of indigenous coal, consumers now will be interested in higher purchases of Indian coal", a senior Coal India official told Business Standard.

According to the official, the company is now considering modification of its e-auction calendar as well as the mix of coal grades offered in the auctions to meet the requirements of coal based power plants in the coastal belts as well as the cement and sponge iron segment.

A joint meeting between railways, port authorities and thermal power companies has paved the way for Coal India to send high as well as low grade coal to the ports from where deliveries to the consumers can be made either through inland waterways or the maritime route.

Also, higher offtake will imply Coal India increasing its production to meet the set target as the pithead stock situation will ease. During April-July, Coal India had lagged behind by six% to its targeted production of 172.72 million tonne (mt). The offtake situation was further dismal as only 89% of the 196.45 mt target could be achieved. Now, with import substitution a possibility for Indian coal buyers, the situation may improve.

Data from Motilal Oswal showed that Coal India's average monthly e-auction realisations from higher coal grades has been hovering between Rs. 2,505-3,044 a tonne during April to June this year as the coal monolith put 17.66% of the total 26.3 mt under the hammer.

"Higher grade allocation of coal in the auction is likely to increase following the recent changes in the imported coal and pet coke prices as non-power sector will try to purchase more indigenous coal", Dhruv Muchhal, an analyst with Motilal Oswal told this newspaper.

However, e-auction realisations had declined to Rs. 1,227 per tonne in June this year from Rs. 1,447 per tonne in May, on mix and lower premiums. The premium over notified price was down from Rs. 246 each tonne to Rs. 187 for every tonne over the same period.

A report from Motilal Oswal stated that Vedanta will be substituting imports completely.

Mucchal opined that rising pet coke prices too will bring some of the customers back to high-grade coal.

Coal Consumers Association of India (CCAI) is also of the opinion that Indian companies may shift to import substitution of higher coal grades now that the global prices have increased and Coal India is improving its quality.

"There may be an increase in demand of indigenous coal as Coal India has improved its quality of despatch as well as sending crushed coal. The rise in prices of imported coal will fillip it further", Subhasri Chaudhuri, secretary general of CCAI told this business daily.

Sharp increase in coal imports by China amidst its declining production is stated to be the key driver of the recent global thermal coal price increase. In June, China imported 21.8 mt of coal which is 31% higher when compared to the similar month of 2015 while it decreased its production by 17% in the same month under consideration.

 

Sources:.business-standard.com

Uk And Eu Based Indian Businesses Likely To Take A Hit Post Brexit: Deloitte

The BREXIT event is likely to have adverse repercussions for number of Indian businesses across industries as growth in the United Kingdom (UK) and European Union (EU) take a hit. The Deloitte study on BREXIT, highlights that, the problem of slowing sales might get compounded by issues of a weaker currency. The report analyses four possible scenarios that UK could adopt and the impact of each of those scenarios for business in general, feels Deloitte.

"Effects will vary with the kind of negotiations the UK government has with the rest of the EU. So, while Britain has decided to exit the EU, the question of how that plays out both politically and economically assumes significance. Indian companies can expect some hit to their UK businesses as overall growth in the country slows in the immediate short run. A weaker currency would also mean that any repatriation of profits from the UK region is likely to result in losses as compared to the pre-BREXIT era", said Anis Chakravarty, Lead Economist & Partner, Deloitte India.

UK used to be India's third biggest trading partner 15 years ago. Today, Britain ranks 12th in terms of bilateral trade and is one of seven countries with which India has a trade surplus. While the bilateral trade relationship between UK and India is dominated by goods, services also form an important part of the equation.

"At this juncture it is almost futile to say that BREXIT implies uncertainty, but that is an aspect most economies and corporates would have to deal with. However, in the mid to long run, if the forces of globalisation play itself out well, an event such as BREXIT may turn out to be a positive for India bringing it closer both to the EU and UK", said Anis Chakravarty.

According to the Deloitte study, in the scenario that the UK decides to become a member of the European Economic Area (EEA), could possibly be advantageous for India in terms of trade. In particular, UK would have the liberty to set their own external tariff and independently negotiate their own trade deals with countries outside of the EU. As such, trade deals negotiated between the UK and India could provide for huge potential for improvement and closer collaboration in terms of trade.

In the event that UK's trade is governed by the World Trade Organisation (WTO), the British government can change existing trade policies with India and further liberalize it by reducing tariffs. Further, if the UK and India manage to finalize an FTA, this would give UK-India trade a huge boost.

However, India would not be able to use the UK as a gateway to the European Union in terms of trade as easily as before. Further, goods exported through the UK to the EU are obligated to meet various EU standards, which is another factor making it difficult to trade with the EU through the UK. Consequently, trade between India and the EU through the UK may be hampered, and existing trade channels and supply chains involving the UK and the EU may be disturbed.

In terms of specific industries, there could be certain effects on businesses operating in sectors including Industrial and Consumer Products, Retail, Financial Services, Life Sciences and Health Care and Information Technology.

The Industrial and Consumer products sector is vast and has significant exposure to the UK economy. Companies in this sector that have manufacturing units in the UK, the access to single markets is important as their products can get artificially uncompetitive if they had to pay import duties. Indian garment exporters have already witnessed a 5% drop in demand in the last year. Bilateral trade of precious metals and stones between the UK and India amounted to over USD 2 billion in FY16, and is India's largest import from the UK.

India's Life Sciences and Healthcare sector has significant exposure to the UK, and a hit to demand in UK and the EU is likely to show effects on profits and sales. Many IT companies also have their EU headquarters in the UK and use the country as a gateway for business across the EU.

 

Sources :economictimes.indiatimes.com

Seafood Exports Could Grow 20% In Fy17

 Seafood exports from India are likely to increase 20 per cent in 2016-17, thanks to renewed global demand and addition of more areas for aquaculture.

Exports from the country had declined in 2015-16 with the slowdown in global economies and better supply from competing countries such as Thailand and Vietnam. In dollar terms, the percentage of plunge in exports was about 15 per cent in 2015-16 compared to $5,511.12 million exports registered in 2014-15.


"Renewed global demand for disease-free, healthy shrimps from India, over southeast Asia, has made Indian shrimp exporters revise their projection for a year-on-year export revenue growth of 15-20 per cent in FY17. Even a few months ago, the industry was not so bullish about the new year and was expecting the downturn of last year to continue, primarily owing to lower production. Exports had dropped 10 per cent in the last financial year, pulled down by both production-related issues and lower prices," said Rahul Kulkarni, director, WestCoast Group, seafood exporter.

Southeast Asian countries such as Vietnam, Thailand, Malaysia, Indonesia and China have been hit by diseases, labour and production issues. Thailand, which has been severely affected by diseases for the past several years, is also recovering from blacklisting by the US due to human rights abuses in seafood trade. These economies compete with India in exports.

Seafood exports could grow 20% in FY17
With their friendly policies, states such as Andhra Pradesh and Odisha have opened up opportunities for aquaculture farmers to bring more areas under shrimp production.

"Odisha has added 25 per cent to the existing number of ponds. Andhra has added about 25,000 hectares into aquaculture production. Similarly, West Bengal, Tamil Nadu, Maharashtra and Kerala have added to their number of ponds. Gujarat has added aquaculture ponds in a big way. There will be a growth of 15 per cent this year quantity-wise," said Ajay Dash, president (Odisha region), Sea Food Exporters' Association of India

 

Sources :business-standard.com

Rupee Falls 3 Paise Against Us Dollar Post Rbi Policy Meet

The rupee depreciated 3 paise against the US dollar on Tuesday after the Reserve Bank of India announced the policy rates keeping the key rates unchanged.

Rupee fell to 66.87 against the US dollar. It opened at 66.78. RBI kept the policy repo rate under the liquidity adjustment facility unchanged at 6.5 per cent.

"Re should be rangebound at the current level as the policy is supportive of the currency and will not depreciate," said NS Venkatesh head of treasury IDBI BankBSE -0.36 %. "At system level there will be no impact of FCNRB. Once the event is over, we will have to reassess the situation."

Dealers expect rupee to remain at 66.65-67.10 levels against the US Dollar till mid September.

"The Reserve Bank will continue with both domestic liquidity operations and foreign exchange interventions that should also enable management of the FCNR(B) redemptions without market disruptions," said RBI in the policy statement. "With a view to further front-loading the provision of liquidity, it has been decided to conduct an open market purchase auction on August 11, 2016."

Forex dealers said strength in the dollar against some other currencies overseas and a weak trend in the domestic equity market in early trade also weighed on the rupee.

The local currency has closed lower at 66.84 on fresh dollar demand form banks and importers on the back of strong dollar in overseas markets on Monday.

The benchmark BSE Sensex was trading 19.34 points, or 0.07 per cent, down at 28,127.37 post policy statement.

 

Sources :economictimes.indiatimes.com

M&M Launches Unpolished Pulses To Grab Share Of Rs 350 Crore Pie In Mumbai

The estimated Rs 1.5 lakh crore branded pulses market in the country has attracted yet another corporate, thanks to the hefty margins and potential for growth it commands. Mahindra Agri Solutions (MASL), a wholly-owned subsidiary of M&M, which launched tur dal under NuPro brand a year ago in Mumbai, has launched chana, moong, masoor and urad dals across 4000 outlets in the city.

NuPro pulses are targeted at the upper middles class, educated woman of the city. Urad dal has been priced at Rs 130 per half a kilo, moong dal (Rs 185 a kilo), Masoor Dal (Rs 160/kg) and chana dal (Rs 175 a kilo). The premiums that the unpolished dals command range from 50-100 per cent to the normal variety of dals, basis consumer affairs ministry data on July 5.

Justifying the prices, Sharma said, "These are sundried, unpolished variety of pulses which take approximately half the time to cook. Besides we vouchsafe for the purity and high quality assurance, which is why NuPro had a healthy 30 per cent repeat purchase."

The two larger rivals of MASL are Tata Sampann and Satyam, which have 20 per cent and 8-9 per cent market share in Mumbai respectively, said Sharma.

The company which had sales of Rs 2.5 crore in pulses in FY16 targets to generate revenue of Rs 20 crore from pulses in the current fiscal in Mumbai. It's grander aims include expanding to the country's top 10 cities over the years and commanding a 5 per cent market share of the overall Rs 1.5 lakh cr branded market.

MASL also sells edible oils like soya and mustard under the NuPro brand in West Bengal, and fruits and vegetables under the Saboro, Spanish for tasty, brand. The revenues of MASL grew 12 times to Rs 900 crore in the past five years through fiscal year 2015-16.

Around 90-95 per cent of the procurement of pulses is from the domestic market, mainly APMC market yards and appx 10 per cent from Myanmar, Tanzania and Canada. The company has reached out to 2500 farmers in Maharashtra in areas like Latur and Amravati and plans to swathe 10,000 farmers in the near future.

In fact, claims Sharma, the productivity of pulses, which stands at an average 650 kg/hectare in India, rose to 800-850 kilo/ha, thanks to advisory and high quality input sales by MASL to farmers inn Latur. In comparison average yield in China is 1900 kg/ha for pulses, Sharma added.

Ashok Gulati, Infosys chair professor for agri at ICRIER, also said that corporates tend to charge higher premiums because of "quality assurance" and brand equity "which isn't built out of thin air." "If you knew the kind of oils being used by some to polish dals in the unorganized sector, you'd stop eating them," he said. "The bigwigs (corporates) can't afford to erode their brand equity by engaging in malpractice so you as a customer can be sure of quality even if you're paying a higher price."

The size of the branded pulses market is a tad less than 1 per cent of the overall size of the pulses market countrywide at Rs 156 lakh crore, which opens the potential for tremendous growth of the organized sector, Sharma add

 

Sources :economictimes.indiatimes.com

Edible Oil Refiners Seek Duty Cut On Crude Palm Oil Imports

 Indian refiners of edible oil have sought a cut in the import duty on crude palm oil, which they said will offer the local industry a level playing field at a time when imports of refined products are growing at a quick pace.

Their lobby group, the Solvent Extractors' Association of India, has written to the Prime Minister, requesting to cut the duty on their key raw material to 5% from the current 12.5%. It has also sought retaining the current 20% duty on refined palm oil imports.

Palm oil exporting countries levy a 12% duty on crude shipments and 5% on refined oil to protect their domestic industry. When the local import duty is added to this, say Indian refiners, the cost becomes heavy for them.

"It (cutting duty on crude imports) will not affect the government's agenda of checking inflation as the prices of edible oil will not be impacted," said BV Mehta, the association's executive-director.

Currently, edible oil prices are at last year's levels, Mehta said. He sees the prices following a usual patterns, with a marginal increase likely towards the upcoming festival season.

The local industry is worried about increasing imports of refined palm oil in India. The share of imported refined oil has now reached 32% of the total import of palm oil, Mehta said, calling it the "highest percentage" in recent years. This trend is expected to gain momentum due to forthcoming festival season, Mehta said.

 The share of refined palm oil in total imports was 18% in fiscal 2014 and 20% in the year before that.

"The refineries importing crude palm oil are barely managing to recover variable cost. The entire fixed cost, interest on capital expenditure, depreciation and profit are left uncovered," Mehta said. "In such circumstances, no refinery can sustain or survive."

Refiners are on the edge as the landed cost of crude and refined oil is almost at par, a refiner said. "Cheap refined oil imports will push most refiners into the red."

The industry is also looking at greater volumes of byproducts in case the import of crude palm oil is increased. Byproducts like palm stearin and palm fatty acid distillate are key raw material for the chemical and soap industry. Some of the byproducts are used for the manufacture of vanaspati, bakery shortenings and margarine.

"In the last budget, the import duty on palm stearin and palm fatty acid distillate was reduced to nil," said an industry representative. "While the import duty on these byproducts was made nil, the duty differential between crude and refined oil was retained at 7.5%, thereby making the refining route of crude more expensive than direct import of refined palm oil."

 

Sources :economictimes.indiatimes.com

India Slaps Anti-Dumping Duty On Steel Products From 6 Nations

An anti-dumping duty of USD 474-557 per tonne was imposed on 'hot-rolled flat products of alloy or non-alloy steel' import from China, Japan, South Korea, Russia, Brazil and Indonesia, the Department of Revenue in the Ministry of Finance said in a notification.

The duty would be in force for six months till February 7, 2017.

The anti-dumping duty was imposed on recommendation of the Directorate General of Anti Dumping (DGAD).

An anti-dumping duty of USD 474 per tonne was imposed on import of hot-rolled flat products of alloy or non-alloy steel of a width up to 2100 mm and thickness up to 25 mm from Korea and Japan.

Korean firms attracting the anti-dumping duty are Hyundai Steel Company and POSCO. Three Japanese companies JFE Steel Corp, Nippon Steel and Sumitomo Metal Corp are also featuring in the list.

A similar anti-dumping duty was slapped on import of similar products from China, the exporter company being Angang Steel Company Ltd and Zhangjiagang. Imports of the same from Indonesia, Russia and Brazil too attracted USD 474 per tonne duty.

Hot rolled flat products of alloy or non-alloy steel not in coils (commonly known as sheets and plates) of a width up to 4950 mm and thickness upto 150 mm imported from Korea, Japan, China, Russia, Brazil and Indonesia would attract USD 557 per ton anti-dumping duty.

DGAD "has come to the provisional conclusion that the subject goods have been exported to India from the subject countries below normal value (and) the domestic industry has suffered material injury on account of subject imports from the subject countries," the notification said.

Also, DGAD felt "the injury has been caused by the dumped imports of the subject goods from the subject countries".

 

Sources :economictimes.indiatimes.com

India Exported Meat Worth $568 Million In April-May

 India exported meat and meat products worth $568 million during April-May of this fiscal, Parliament was informed today.

The main export destinations include Vietnam, Egypt, Malaysia, Saudi Arabia and Iraq.

India mainly exports processed meat and meat of buffalo, sheep and goat.

In quantity terms, the overseas shipments stood at 1,92,748 tonnes in the first two months of this fiscal, Commerce and Industry Minister Nirmala Sitharaman said in a written reply in the Lok Sabha.

She also said "representations are being received from time to time from some religious/social organisations demanding ban on export of meat and its products".

At present, there is no proposal to lift the ban on export of beef, she added.


Replying to a separate question, she said during April-May of 2016-17, services exports from India stood at $26.37 billion. It was $154.31 billion in 2015-16.

The minister said initiatives announced by the government like Services Exports from India Scheme are expected to enhance the exports.

 

Sources :economictimes.indiatimes.com