India trade

By Anil K Gupta and Haiyan Wang

Chinese president Xi Jinping’s visit to India this week will likely be the most significant meeting between the leaders of China and India since Rajiv Gandhi’s visit to Beijing in 1988. Indeed, India’s leading business daily has gone so far as to suggest that Xi will bring along with him commitments to invest $100bn over the next five years. But while ties between India and China are growing quickly, such estimates remain highly unrealistic and risk saddling this burgeoning relationship with unrealistic expectations.

An article in the Economic Times newspaper quotes China’s consul-general in Mumbai: “On a conservative estimate, I can say that we will commit investments of over $100bn or thrice the investments committed by Japan during our President Xi Jinping’s visit next week. These will be made in setting up of industrial parks, modernization of railways, highways, ports, power generation, distribution and transmission, automobiles, manufacturing, food processing and textile industries.” Continue reading »

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. Continue reading »

Investors gave new Infosys chief executive Vishal Sikka a show of confidence on Monday, as shares in the IT outsourcer closed up nearly 4 per cent. Rupee weakness was part of the reason — software exporters prosper as India’s currency drops — but a large chunk seems to stem from optimism about Mr Sikka himself.

Is that optimism justified?

beyondbrics took a trip to Bangalore to meet him last week, as reported here last Friday. Sikka then met with various Indian journalists the following day, prompting various stories over the weekend. The combination of these appears to have soothed investor worries. Continue reading »

The recent devastation in Syria has had one less expected outcome far away on the shores of India.

Exports of cumin, a popular spice used in curry powder and medicines, have shot up to compensate for the disruption to supplies in the Middle East. But prices aren’t spiking as you might expect. Continue reading »

As India’s current account deficit ballooned to unsustainable levels last year, the government slammed the breaks on gold imports with duty hikes and new rules on re-export of the yellow metal. The result was that the jewellery industry hit a standstill.

However, according to Pakistani authorities, India’s official inflows of gold have simply shifted to unofficial channels. Time for action. Continue reading »

India’s trade data for the month of December was published on Friday, showing the trade deficit narrowed to $10bn from $18bn in the same month a year earlier.

That sounds like good news – but it’s not as good as a deficit of just $9bn in November – and it is possible that the gap will soon balloon as the government loosens its grip on gold imports. Continue reading »

India’s external balances have been a focal point this year as the country’s economic woes have centred around the depreciation of the rupee.

So policy makers will be pleased to see India’s trade deficit narrowing yet again. The gap was squeezed to $9.2bn in November from $17.2bn in the same period a year earlier, according to new data from the Ministry of Commerce and Industry. Good news? Continue reading »

India’s economic woes and the sharp decline in the value of the rupee are well known. But, the theory goes, as a currency depreciates, exporters stand to benefit.

Or do they? Is a fall in the rupee that much of a positive for India’s exporters? Continue reading »