India economy

On Friday Indian companies will begin posting their results for the quarter ended in September – the first full three-month period under the country’s new, pro-business government.

The latest macroeconomic indicators suggest the economy has picked up following this year’s general election, growing at 5.7 per cent in the three months to June. But if analyst forecasts are anything to go by, only some sectors have received a boost from renewed optimism in India. Read more >>

Investors have been awaiting an upturn in India’s economy since Narendra Modi, prime minister, took power in May. But a raft of recent data paints a mixed picture, with inflation moderating while slack industrial production conflicts with some robust consumer spending signals.

The Wholesale Price Index (WPI), out on Monday, confirmed that inflation is easing, reaching a 58-month low of 3.74 per cent year-on-year in August from 5.19 per cent in July. Read more >>

Until about a decade ago India was barely producing enough cotton to meet its own needs, let alone export the stuff. But this year Asia’s third largest economy will overtake China to become the world’s biggest producer of cotton.

Data from the US Department of Agriculture released on Thursday suggests that India will produce 30m bales of cotton in the season that began August 1 while China will produce just 29.5m bales. Read more >>

Since April car sales in India have been improving as consumer sentiment picks up following this year’s general election – and August saw the biggest year-on-year jump in this upturn as festival season neared.

Sales of passenger cars were up 15.2 per cent year-on-year in August to 153,758 units, according to data published on Wednesday by the Society of Indian Automobile Manufacturers (Siam), a trade body. Read more >>

India emerges from the latest World Economic Forum Global Competitiveness Report as the sickest member of the BRICs. It is ranked a lackluster 71st among 144 countries surveyed, down 11 places from last year and 22 places from five years ago. Moreover, it is ranked the lowest among its peers for the first time in years (China comes in 28th, Russia 53th, Brazil 57th).

The consequences of India’s lower GDP growth are also increasingly obvious: whereas India’s GDP per capita was higher than China’s only 15 years ago, it now stands at only a quarter of that of its Eastern neighbor.

So how come this all happened, and what can be done about it? Read more >>

Remember that story back in June, when the Indian government blocked a couple of foreign sources of funding for Greenpeace India?

It looks like the courts may not let New Delhi withhold the international transfers. On Wednesday, the Delhi High Court ordered that the blocked funds should be shifted from accounts with the central bank to Greenpeace’s accounts and placed in a fixed deposit until October 10, when a final verdict will be announced. Read more >>

By Jim O’Neill, Bruegel

Is it all over for the rise of the BRIC grouping (Brazil, Russia, India and China)?

On one level, this seems like a rather odd time to be asking such a question, especially when the political leaders of the BRICS countries (the four named above plus South Africa) have recently agreed to set up a joint development bank to be headquartered in Shanghai. So, the BRICS name is certainly here to stay, and in terms of global governance, their influence is likely to rise as a group because of the bank. Read more >>

Ratan Tata (pictured), who was the head of India’s powerful Tata group until 2012, ushered in a period of ambitious international expansion at the company. He is one of the most respected figures in the business community today.

On Wednesday, it was announced that the illustrious businessman has personally invested in Snapdeal, the online marketplace that is battling to win a share of India’s fast-growing market for ecommerce. Read more >>

Deutsche Post DHL, which makes money by shipping parcels around the world, plans to invest at least €100m in India over the next two years and is piloting a new e-commerce model for the Asia Pacific in the fast-growing market.

The move reinforces the recent take-off in India’s online shopping sector, as large platforms consolidate, infrastructure improves and internet penetration rises. Read more >>

Yoga guru BKS Iyengar passed away last week. As the tributes poured in, Iyengar was credited with spreading awareness of Indian culture around the world.

The yoga master was awarded the Padma Vibhushan, the second highest civilian award in India, earlier this year – and his style of teaching has become big business in the western world.

The New Yorker provides a glimpse into the master’s childhood and his own education in yoga as a young man in the 1930s, when ‘physical culture’ was taking off around the world: Read more >>

The details of Gap’s move into the India yields insights into how Asia’s third largest market remains both very distinct from the West and at the same time increasingly similar.

In the US and European markets, womenswear is central to any brand’s expansion strategy, but in India this segment is dominated by traditional dress supplied by local companies. Thus, successful western retailers targeting India have either focused on menswear or on accessories, such as shoes and handbags.

But the strategy of San Francisco-based Gap reveals a market in flux. The group’s local franchisee, Arvind Lifestyle Brands Ltd, envisages the lion’s share of revenue still coming from menswear but at the same time perceives a growing following from women born after 1990. Read more >>

Japanese and Indian culture could hardly be more different, but senior executives at Toto, the Kitakyushu-based toilet products manufacturer, say doing business has been a breeze in Asia’s third largest economy.

The Japanese group, whose fancy ceramic toilet fittings are already used in premier properties like the Four Seasons and Oberoi hotels in Mumbai, opened a manufacturing facility in India this week hoping to expand in the fast growing market.

Toto launched a 180,000 sq metre plant in Halol, Gujarat, that will produce some 500,000 toilet bowls every year. The group’s president, Madoka Kitamura, told beyondbrics that he expects about half of the output to be sold within India while the rest is exported to the Middle East and Europe. Read more >>

Martin Sorrell, chief executive of WPP, the world’s biggest marketing services company, is bullish about India, suggesting the market is set for strong growth and that local companies should focus on tapping this vast market before expanding abroad.

Sorrell considers what he would do right now if he were an ‘Indian oligarch’. Some groups have succeeded in expanding globally, be it organically or inorganically, but that strategy comes with its own challenges.

“India is a massive market – it’s a 1.2bn person market, it has benefited from the rise of the middle-class,” he says. “I would milk the opportunities here until I have exhausted them before moving abroad.” Read more >>

Since the early days of its software industry in the 1980s, nearly all of India’s large IT companies have earned their crust selling software to companies in America, who have tended to be more open to outsourcing than competitors in Europe and Asia.

But for how much longer? Not that long in the case of Tata Consultancy Services at least, the country’s largest IT group by sales, which soon looks set to earn more than half of its revenues outside the US for the first time, according to chief executive Natarajan Chandrasekaran. Read more >>