'Govt Must Support Services Exports Through Conducive Policy'

A conducive regulatory environment will help India's services industry become more competitive and the government needs to support exports from the sector through incentives, tax and duty structures, says a report.

"A conducive regulatory environment and infrastructure could enhance India's global competitiveness in services, with increased productivity, quality employment, and increased trade and investment for inclusive growth," said the CII-KPMG report titled 'The Indian services sector: Poised for global Ascendancy'.

With the government increasing focus on services exports, coupled with a reviving economy and a policy-based push to the sector, India is expected to witness a significant jump in the same, translating into growth of the economy.

Highlighting importance of technology and infrastructure for trade and export promotion, the report said government further needs to focus on upgrading technology in the respective sectors, offer financial funding and support for sector development and provide guidance on new markets to enter.

"It is important for the government to also support growth in the existing and potential export markets through conducive policies, incentives and tax and duty structures."

The report released by Commerce and Industry Minister Nirmala Sitharaman at the Global Exhibition on Services (GES) at Greater Noida was presented to President Pranab Mukherjee at the function here.

The report said increased levels of foreign direct investment (FDI) and constant supply of cost-effective and technically skilled workforce can help ensure support of resources for the growth of services sector.

India has created a niche for worldwide exports in software and professional services, the focus now is expected to enhance exports in healthcare, education, banking, and finance sector, the report said.

The emphasis is also likely to be on diversification of export destinations to offer services to emerging markets, in addition to the traditional developed markets of the US and Europe, it added further.

"Policy initiatives, including trade reforms, and liberalisation of industrial and service sectors, may provide the required push to the sectors as well", said the report.

The report included key services sectors such as IT, telecom, tourism, media and entertainment, healthcare, management consulting, logistics and professional services.

According to the report, services sector contributed about 61 per cent to India's Gross Domestic Product in 2014-15 and grew at about 10 per cent per annum, making the country the second fastest growing services economy in the world.

"India's share in global services exports was 3.2 per cent in 2014-15, double that of its merchandise exports in global merchandise exports at 1.7 per cent, placing India in the eighth place currently amongst the top ten exporters of service in the world", it added.

"India's young demographic profile, combined with its rising literacy rate, offers it a significant competitive advantage vis-a-vis other developing economies," Rajat Wahi, Partner and Head, Consumer Markets, KPMG in India said.
Along with 'Make in India' initiative that is striving to boost the manufacturing sector, Prime Minister Narendra Modi has outlined a vision to represent India as a world-class services hub across sectors. Multiple stakeholders need to work cohesively to help achieve this vision,

 

Source :timesofindia.indiatimes.com

India Should Ease Tech Equipment Import Rules To Meet Renewable Energy Target: Lm Wind Power

 While the country has been attracting capex in renewable energy, the Indian government should ease rule for import of technology equipment in order to meet the 100 Gigawatt (Gw), said Denmark-based LM Wind Power that inaugurated its manufacturing facility at Halol near Vadodara in Gujarat.

Leading global wind turbine blade manufacturer, LM Wind Power has invested roughly 25 million euros or Rs 200 crore for the Gujarat facility, which is its second in the country.

"Government should make rules easy for import of new technology equipment in India. This will help the industry in many ways and also help match the target set by government in renewable energy," said Marc De Jong, chief executive officer of LM Wind Power.

According to Jong, global technology imports have brought down cost of wind power generation in India to Rs 5 per kilo watt from Rs 50 in past two decades.

LM Wind Power would be supply blades to wind projects in the northern part of India and beyond from its Gujarat facility. The production focuses on blades up to 60 meters in length with room for expansion.

"The Halol plant will cater demands from northern part of India. Moreover, we are aiming at exporting blades from here if and when demand arises," said Niraj Basaria, managing director for India, LM Wind Power.

The company currently operates a blade manufacturing facility in Dabaspet at Karnataka and a global technical centre for research, development and services in Bangalore. The company has approximately 1400 employees in India including 400 in Gujarat plant.

Currently LM Wind Power has installed capacity of 1.60 Gw in India and with the new plant in Gujarat it is expecting the same to rise to 2.50 Gw in next two or three years.

 

Source :.business-standard.com

Chinese Dumping Takes Toll On Indian Tyre Makers

Domestic tyre manufacturers are facing stiff competition from Chinese brands, on the back of an unexpected surge in import of radials into the country. With the import of truck and bus radials (TBR) shooting up 64 per cent in FY16, the bulk of the Rs 35,000-crore new investments by Indian tyre makers are under stress.

Delhi-based Apollo Tyres, the largest TBR manufacturer in India, has committed Rs 2,700 crore investment to double its TBR capacity to 12,000 a month at its Chennai plant.

Most of India's TBR imports are from China, whose share in the category jumped to 90 per cent in 2015-16 from 40 per cent in 2013-14, according to data shared by the Automotive Tyre Manufacturers’ Association (ATMA).

TBR import to India has swelled 2.5 times over the past two years. From an average per-month import of 40,000 units in FY14 and 65,000 in FY15, TBR imports crossed 100,000 units a month in FY16, according to ATMA.

Such dumping of radials comes at a time when the TBR segment is progressing to radials from cross-ply tyres. At present, 40 per cent of the industry is radialised, while the balance is still cross-ply. This ratio is set to reverse, according to experts.

The uptick in radial demand is in sync with an equal rise seen in demand for medium and heavy trucks and buses, which closed last year with 302,373 units against 232,755 units sold in 2014-15, according to data by the Society Of Indian Automobile Manufacturers.

Chinese dumping takes toll on Indian tyre makers
Further, the Chinese TBR import has come to account for 30-40 per cent of the replacement demand for TBR in India. A Chinese truck or bus radial costs $140-150 (Rs 9,400-10,000) in India, around 30 per cent lower than an Indian tyre costing Rs 15,000. According to ATMA, the per-unit import price from China in many cases is less than the cost of raw materials in India.

K M Mammen, chairman of ATMA, said: “The government needs to take urgent measures to halt such sharp surge in imports and dumping of tyres. Tyre manufacturers in India have made major investments. But, indiscriminate import and dumping of cheap tyres from China are queering the pitch for domestic manufacturing.”

According to data for the April-December 2015 period, the average domestic production of TBR per month in India is 500,000 units. Apollo is the leader in this segment, followed by Chennai-based MRF and Delhi-based JK Tyres.

"The capacity utilisation levels of the industry in case of TBR manufacturing have come down to 70 per cent in 2015-16 from 80-85 per cent in the previous year. TBR is the fastest growing large tyre category in India," said Rajiv Budhraja, director-general of ATMA.

 

Source :.business-standard.com
 

Sugar Exports From India Dry Up On Robust Domestic Prices

With domestic sugar prices firming up, exports of the sweetener from India have almost come to a standstill. Ex-mill sugar prices that were hovering around R33 per kg over the past week improved to touch R36-R37 per kg in Maharashtra and R36.50-R37.50 per kg in Uttar Pradesh. International prices shoot up on Monday on forecasts of a cut in production in the coming season, but this is unlikely to improve exports, traders said.

According to the Bombay Sugar Merchants Association, 14-15 lakh tonne of sugar has been exported from India so far and chances of improvement in the situation are bleak this season. Mukesh Kuvedia, secretary general of the association, says that although international rates of the sweetener have improved to around $470 per tonne on Monday, traders are preferring the domestic market over overseas markets.

Over the past week, international prices have been on the lower side (around $330-$400 per tonne) and the start of the Brazilian sugar season was also expected to impact Indian export, he said.

The government was instrumental in persuading mills to agree to a target of 32 lakh tonne of sugar exports in 2015-16. With forecasts of lower output and higher local prices, the trader sentiment is that India may not be able to meet its export target. In addition, prices of raws have also touched 15 cents from 14.2 cents. However, with the season almost ending and very few mills are in a position to take up the production of raw sugar, which is usually factored in at the start of the season despite government subsidies, Kuvedia said.

Now the mills will have to wait for the next season which begins in October and then plan for raw sugar exports since this subsidy is allowed for the 2015-16 season, Kuvedia said.
 

 

Source :.financialexpress.com

IndiaS Crude Oil Import Bill Halves To $64 Bn In 2015-16

India’s crude oil import bill nearly halved to USD 64 billion in 2015-16 fiscal as global oil prices slumped to multi-year lows.

India imported 202.1 million tonnes of crude oil in the fiscal year that ended March 31, for USD 64.4 billion, according to latest data available from Petroleum Ministry.

This compared to import of 189.4 million tonnes of crude oil for USD 112.7 billion in the previous 2014-15 fiscal.

In rupee term, import of crude oil, which on processing converts into fuel like petrol and diesel, was Rs 4,18,931 crore in 2015-16, down from Rs 6,87,416 crore a year ago.

While the basket of crude oil India imports averaged USD 84.16 per barrel in 2014-15, it cost only USD 46.17 a barrel in FY16. Indian basket averaged USD 105.52 per barrel in 2013-14.

Domestic crude oil production was marginally lower at 36.9 million tonnes in 2015-16 from 37.5 million tonnes in the previous financial year. Consumption however fuel consumption at 183.5 million tonnes, registered a growth of 10.9 per cent, the highest in 15-years.

India also imported 28.3 million tonnes of petroleum products worth USD 10 billion in FY16 compared with USD 12.1 billion it had paid for import of 21.3 million tonnes of fuel in the year ago period.

Fuel exports improved during March 2016 by 11.4 per cent to 5.5 million tonnes worth USD 2.3 billion. On cumulative basis, petroleum product exports were lower by 5.1 per cent to 60.6 million tonnes worth USD 27.4 billion as against export of 63.9 million tonnes of fuel for USD 47.3 billion.

Indigenous crude oil production during March was lower by 5.1 per cent (3.1 million tonnes) than in the previous year.

 

Source :.financialexpress.com