Recent optimism in financial markets about India’s prospects isn’t all driven by pre-election elation. Investors have been cheered by headline improvements to economic fundamentals and at the heart of that positive sentiment is the balance of payments.
It’s something the incumbent government is keen to flaunt. But take a closer look and India’s external balances don’t look quite as good as the headline figures suggests. Continue reading »
On Monday, India’s gold industry went on strike, a symbolic protest against government efforts to curb official imports and limit smuggling of the yellow metal.
The strike has added to pressure on New Delhi to roll back recent hikes in duties and quantitative restrictions on gold imports, which are crippling the trade. But what will happen when a new government comes into power following this year’s general election? Continue reading »
Restrictions on India’s gold imports will be reviewed by the end of March if concerns over the country’s external balances ease up, India’s finance minister, Palaniappan Chidambaram, said on Monday.
As the second largest gold importer after China, any shift in India’s import policies could have an influence on world markets. However, much depends on how policymakers judge their progress in bringing down the current account deficit. Continue reading »
After the Argentine peso depreciated sharply at the end of last week, talk has begun of a wider EM rout. Once engines of growth for the global economy, emerging markets are now seen as vulnerable with signs of weakness emerging in the Chinese economy and the US Federal Reserve reeling in its asset purchase programme, adding to domestic woes.
While the spotlight was on Argentina on Friday, how unstable are markets in India? Continue reading »
When the Reserve Bank of India put out its latest statement on the nation’s current account deficit on Monday it looked like good news.
The gap narrowed to $5.2bn, or 1.2 per cent of GDP, in the three months to September from $21.0bn, or 5 per cent of GDP, in the same period a year earlier. But are these numbers simply a mirage? Continue reading »
It’s official. India believes a government led by Narendra Modi, the contentious prime ministerial candidate for the opposition Bharatiya Janata Party, would be a blessing for the economy. At least, so says Goldman Sachs.
In a note to clients on Tuesday, analysts at Goldman increased their target for the Nifty index at the end of 2014 to 6,900 points. The benchmark index is currently trading around 6,240 points.
Earlier this year, Goldman had a cautious view on India. But the Nifty has gained 30 per cent since the end of August and the bank has good reason to raise its investment outlook. Continue reading »
In the fourth part of our series on gold in India, beyondbrics asks why sales of the precious metal were so subdued before this month’s Diwali festival – usually a peak season.
See also part one, jewellers in a desperate spot, part two, gold loans on the up, part three, the story in charts, and from FT Analysis, India: Part of the fabric. Continue reading »
In the third part of the beyondbrics series on India and gold, we tell the story of the country’s obsession in seven charts.
[See also the FT analysis: India: Part of the fabric; beyondbrics series part 1, the jewellers in a desperate spot; and part 2, the growth in gold loans.] Continue reading »
In the second part of a beyondbrics series on India and gold, we look at the surge in gold loans – a market that highlights the country’s obession with the metal, and serves to reinforce demand.
See part one: India’s jewellers in a desperate spot. Coming on Friday: India and gold in charts. Continue reading »
What can India do about its gold habit? In the first part of a beyondbrics series, to accompany the FT’s Analysis of India and gold, we look at the impact of recent measures to curb the country’s gold appetite on the jewellery industry. Continue reading »
What do you do if you are an emerging market country that is suffering from a widening current account deficit, has a battered currency and is pretty much being shunned by foreign investors at the moment?
Well if you are India, you can try joining an international benchmark index. Continue reading »
Two things have shown India in a bad light recently: the brutal rape of a 23 year-old student in New Delhi in December, and an economic downturn which pushed the rupee into freefall. Both have affected visitor numbers – India is seen as a more dangerous and cheaper tourist destination now.
In attempt to boost the tourism industry, India is looking to change visa rules and make it easier to enter the country. Will it have any effect? Continue reading »
By Saurabh Mukherjea and Ritika Mankar Mukherjee
It is hard to read a newspaper these days, whether in India or abroad, without running into opinion pieces criticising the performance of the Indian economy. Whilst the critics differ in their targets – some focus on the incumbent administration’s incompetence, others on India’s institutional shortcomings such as endemic corruption – as the tide of cheap American money recedes, India’s shortcomings are clear for all to see. Not only is the currency battered, the economy too will slide towards low single digit growth.
We disagree not so much with India’s economic predicament – the weak economic growth and the sliding rupee are matters of fact – but with the portrayal of a cyclical downturn as a structural crisis. This, to our mind, is one of the three myths regarding India that are being perpetuated at present. Continue reading »
Are Indian policy makers delivering on their promises? Here’s one to watch.
India’s finance minister Palaniappan Chidambaram has vowed that the country’s unsustainable current account deficit will be brought down this year. So what do the latest figures, released by the central bank after markets closed on Monday, show? Continue reading »
India’s mandarins aren’t quite done tinkering with the gold market.
This week, the government hiked customs duty on gold and jewellery from 10 per cent to 15 per cent, a move aimed both at reducing imports and protecting domestic goldsmiths ahead of the festival season. Continue reading »