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Posted By: Sanjay Nagi | 01 May 2017

India Business Updates

 

 

Overview

  1. India witnessed a total growth of M & A deals by 4 folds, growing to US$ 28 billion.
  2. Infosys in a bid to buy back shares from the public is spending US$ 2 billion in the form of buyback of shares and giving a dividend to others.
  3. Infrastructure sector witnessed deals worth US$ 3.49 billion in FY17, of which 88% were mergers and acquisitions.

Market observations

  1. India has the second fastest growing services sector with its compound annual growth rate at nine per cent, just below China’s 10.9 percent, during the last 11-year period from 2001 to 2012, Russia lags far behind at 5.4 percent.
  2. Retail inflation grew at a rate of 3.81% in India.

Stories around business

  1. The government banned sale and registration of Bharat Stage three vehicles, which left the auto industry with nearly 1.5 lakh vehicles worth more than 5,600 crores.
  2. TAL Manufacturing Solutions forms a strategic partnership with Italy’s RTA for BRABO robot.
  3. Passenger vehicle sales in India to grow 7-9 per cent in FY18 as per a report by Society of Automobile engineers.
  4. Amazon acquired a license from the Reserve Bank of India to operate a Prepaid Payment Instrument in India.

Stories from around India

  1. Oil marketing companies in India have decided to regulate oil prices on a daily basis as compared to the current practice of fortnightly price revision, this will be a nationwide process after a pilot phase in 5 cities.
  2. All Metre Gauge tracks to be converted into Broad Gauge
  3. The Government has passed the GST bill, which will make nearly 70% of the goods for sale cheaper.
  4. International North-South Transportation Corridor(INSTC) a land and sea-based 7,200-km long network comprising rail, road and water routes that are aimed at reducing costs and travel time for freight transport in a bid to boost trade between Russia, Iran, Central Asia, India and Europe is one step closer to fulfillment. It will reduce the travel cost and distance by 30% and 40% respectively.

Resource Column

Why India

India ranks third in terms of preferred investment destination. (Just after China and the United States) India has emerged as one of the most attractive destination not only for investment but also for doing business in the recent years. One of the fastest growing economies in the world which have not only sustained global downturn of 2008-09.

Some of the reasons behind India’s unparoled growth are:

  • Large and fast growing middle class & graduation of poor to middle class and hence growing domestic consumption
  • Indian Government’s constantly evolving investor friendly policy
  • Lower cost of production due to lower labor rates
  • Availability of skilled manpower
  • Abundant natural resources
  • Government’s emphasis on infrastructure improvement
  • India’s location, close to markets of South East Asia, Middle East and Europe.

Foreigners can directly invest in India either on their own or as a joint venture, with a few exceptions about investment limits and sectors. No government approval is required for FDI in virtually all sectors except a small negative list formulated by the government. Use of foreign brands names/trademarks is permitted for sales in India. Indian capital markets are open to FII’s and Indian companies can raise funds from international capital markets.

India is likely to become one of the largest economies in the world by the year 2025 as per projections made by internationally renowned consultants and IMF. Businesses around the world do not like to miss the growth opportunities offered by Indian markets and hence some of them are already stepping up their investments and rest eying India for investments in coming years.

About the author

Sanjay Nagi - Market Insight Consultants, Noida (India- a Member firm of ADAM Global Network)


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