Indian Economic News, IIP Growth % (Index of Industrial Production) Graph, WPI % Growth (Wholesale Price Index) Graph, Corporate Headlines and Who’s Expanding in India, Everything in Indian Economic Status Newsletter May 2013

1. India Newsletter
May, 2013
FROM THE EDITORS DESK
Consumption Led Economic Growth in India Spurs Manufacturing Industry Expansion
Rajabahadur V Arcot
Independent Industry Analyst / columnist and Automation
Consultant
Member, Advisory Board, Expand in India
Resulting from the robust economic growth that India has witnessed in recent years, the middleclass
population, with disposable incomes, has been expanding. According to the study done by the
National Council for Applied Economic Research, the middle class households would swell to 53.3
million from around 31.4 million in 2010-11. Their discretionary spending creates the demand for a
whole range of manufactured goods, such as mobile phones, entertainment electronics, a broad
range of home appliances, with the more affluent among them splurging on durables, such as cars,
two wheelers, washing machines, and such others. This presents immense growth opportunities to
almost all industry segments. While the country has sufficient production capacity in industries such
as automotive, cement, metals, and others and has the ability to expand the existing capacity, the
country is not that well placed in other segments, such as consumer and industrial electronics,
communication equipment, and machinery and lacks the inherent technology. While the country is
one among the major producers of fruits and vegetables, it is a laggard in food processing. It also
needs to expand its infrastructure requiring massive financial capital, which it lacks. The present
supply side and other constraints that the country is facing result in high inflation and unsustainable
trade deficit. India, in order to live up to the full potential, seeks global investments, especially
foreign direct investments aimed at establishing production facilities. The country has supportive
policies governing payment of royalty, repatriation of profits, and such others. India permits 100
percent foreign equity in most industries. Additionally firms setting up in special economic zones
(SEZs), operating in electronic hardware or software technology parks, or operating as 100 percent
export-oriented entities may also be fully foreign-owned.
While most countries suffer from diminishing consumer demand and the resulting production
capacity glut, India’s challenge is to create the much needed production capacity to meet a robust
consumer demand for a broad portfolio of manufactured products and goods. Thus, India should be
on the radar screen of global companies that seek long-term growth opportunities.
CORPORATE HEADLINES
Suzuki Motor's stake in Maruti Suzuki goes up to 56.21%
RIL nears first gas discovery after 5 years
Aurobindo Pharma gets USFDA nod for anti-AIDS drug
Strides' arm forms JV with Pfenex for biosimilar products
Etihad picks up 24% stake in Jet Airways
Mukesh Ambani's 4G arm Reliance inks `1,200cr( 220mln US$) pact with Anil Ambani's
TPG keen to sell balance 10% in Shriram Transport
Opto Circuits' arm to sell diagnostic cardiology business
Orchid enters into strategic partnership with Europe-based Allecra
ECONOMIC AND POLITICAL NEWS
Industrial growth weak
The Index of Industrial Production (IIP)
reported 0.6% growth for the month of
February 2013 decelerating from 2.4% in
January 2013 and 4.3% in the corresponding
month of the previous year. Marginal growth
in the Index of Industrial Production (IIP)
surprised positively though, considering that
the consensus estimates pegged a de-growth,
mainly as the eight core industries (37.9%
weightage in the index) reported a 2.5%
decline in growth for the month. On a
cumulative basis, during the April – February
period of FY2013, growth in industrial
production, at 0.9%, indicates a low-level.
(The HSBC India Manufacturing…witnessed
the slowest rate of expansion in 16 months in
March as power outages hampered
production activity and decline in new
business orders, and Manufacturing
Purchasing Managers' Index (PMI) -- a
measure of production - stood at 52 in March
down from 54.2 in February)
Inflation softens to 40-month low
Whole sale Price Index (WPI) inflation for
March 2013 moderated to more than a three-
year low in March 2013. It came in at 6.0% as
compared to 6.8% in the previous month and
7.7% in March 2012.
The deceleration in inflation can mainly be
attributed to softening primary article
(particularly food) inflation. Core inflation
receded for the seventh straight month to
3.4% as compared to 3.8% in the previous
month and 5.0% in the corresponding month
of the previous year, reflecting the decline in
commodity prices on a yoy basis and weak
pricing power in manufacturing. Inflation for
the month of January 2012 has been revised
upwards to 7.3% as against 6.6% reported
earlier, due to revision in fuel and primary
article inflation.

2. OTHER ECONOMIC HEADLINES
Forex reserves rise by USD 1.1bn in Apr-
Dec
CCI push to projects worth `74,000cr (14
bln US$) hit by delays
Under-recovery on diesel down to `6.52
per litre
Services PMI falls to 17-month low in
March
Government gives extra time to 14 SEZ
developers to execute projects
Indian economy to grow at a higher pace
of 6% in FY14: ADB
CRISIL cuts FY2014 GDP growth forecast to
6%
Government to award 30 port projects
worth `25,000cr (4.75 bln US$) this fiscal
India-China bilateral trade projected at
US$100bn by 2015
Road Ministry sets target to award 9,000
km projects in FY14
Exports from India down 1.76% to USD
300bn in FY13
Car sales estimated to grow 3-5% in
FY14:SIAM
Coal linkages to 16,000MW power plants
not possible : Coal Ministry
FDI in the telecom sector, which includes
radio paging, cellular mobile, basic
telephone services, attracted $ 1.99
billion during April-January period of the
2011-12 fiscal, as per the Department of
Industrial Policy and Promotion (DIPP).
Some key measures taken for boosting
exports from India include:
The Export Promotion Capital Goods
(EPCG) scheme which allowed import of
capital goods including spares for export-
related production at zero duty for
specified sectors and at a concessional
rate of 3% Customs duty for all sectors.
Extension of 2% interest subvention up to
March 2014 to textile made up articles
and specified items in Engineering sector
in addition to specified labor intensive
sectors coving Handlooms, Handicrafts,
Carpets, SMEs, Toys, Sports Goods,
Processed Agricultural Products and
Ready-Made Garments.
Addition of items in duty free import of
specified raw materials for manufacture of
handlooms
Reduction in minimum land area
requirement by half for different
categories of SEZs.
WHO’S EXPANDING IN INDIA
VISITENGLAND wants to grow its MICE business from India and will leverage its Asia-
Pacific office in New Delhi to broaden its network of trade partners.
Sarova Hotels, has announced signing of two more hotels in Gujarat
Marks & Spencer Reliance India Pvt. Ltd is stepping up its expansion in the country
after reporting strong growth across its brands. The UK-based retailer plans to open
five stores of 20,000- 23,000 sq. ft each by this summer
India's diversified FMCG conglomerate CavinKare Pvt. Ltd. Has announced its plan to
expand its beauty salon business, Trends in Vogue Pvt. Ltd., across India. The brand
has planned to open 350 salons in metros and mini-metros by 2015.
5.3
6.2
9.5
3.7
3.4
2.5
-5
6
2.7
1.1
4.1
-3.5
-1.3
2.5
-2
0.2
2.3
-0.4
8.3
-0.6 -0.5
2.4
0.5
-6
-4
-2
0
2
4
6
8
10
12
IIP GROWTH % (INDEX OF INDUSTRIAL PRODUCTION)
6.9
7.4
6.9
7.2
7.6 7.6 7.5
8 8.1
7.3 7.3 7.2
6.6
6.8
6
JAN'12 FEB'12 MAR'12 APR'12 MAY'12 JUNE'12 JULY'12 AUG'12 SEP'12 OCT'12 NOV'12 DEC'12 JAN'13 FEB'13 March, 13
WPI % GROWTH (WHOLESALE PRICE INDEX)

3. WHO’S EXPANDING IN INDIA
U.S digital film company Netflix Inc. may be looking to enter the Indian market, with
its latest recruiting attempt hinting at a possible India expansion.
Export Development Canada (EDC) reported out today on USD 600 million in new
transactions that will facilitate new export business between Canadian companies
and Indian multinationals.
German sportswear major Adidas is stepping up India expansion for its sports
fashion and lifestyle brand ' Adidas Originals'. It plans to have 20 exclusive stores by
the end of the year.
London-listed mining to markets firm Gemfields Plc says the appetite for coloured
gems including emerald, ruby and amethyst is growing in India. The company said
it is looking to tie up with Jewellery designers and retailers to bring out exclusive
range.
The Swedish multinational apparel-retailer Hennes & Mauritz (H&M) has submitted
its application to Foreign Investment Promotion Board (FIPB) for opening 50 wholly-
owned-single-brand-retail stores across India. H&M is planning to make an
investment of Rs. 7.2 billion in India
Leading jewellery retailer Gitanjali Group plans to set up a total of 550 shops in
India and abroad by end of this year, a top company official said.
Honda Cars will invest Rs 2,500 crore (450 Mln US$) at its Tapukara (Rajasthan)
plant by next year to build a new assembly line for cars with an annual cap of
120,000 units.
More than two-thirds of companies doing business in India plan to expand their
operations in rural markets, according to new research by Accenture.
HPCL approves joint venture for `37,320cr Barmer refinery
Tata Power commissions 21 MW wind power project in Rajasthan
Petronet signs first US deal; to import 4 mn tonnes of LNG
Jindal Stainless plans to double Odisha plant capacity to 2 MT
To grow its instrument cluster business in India, Denso has acquired shares of
Pricol Components Limited, a subsidiary of Pricol Limited which designs,
manufactures and sells instrument clusters for passenger
DISCLAIMER
This report is solely for knowledge purposes. The information
contained here has been obtained from sources which Expand In
India believes to be reliable. The Company does not warrant that
such information is accurate or complete.
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