Category — Economy

India Tops Growth in Passenger Vehicle Sales Globally

According to the Society of Indian Automobile Manufacturers, for the period January to May 2017, India topped the growth of passenger vehicle sales globally. With a sales growth of 11.34 percent India overtook the 9.05 percent growth of Japan, the only other Asian economy to have grown in terms of passenger vehicle sales. Other countries that posted a marginal growth were Germany at 4.68 percent, France at 3.34 percent, and Brazil at 2.29 percent.

Tesla Cars

Due to factors such as lower penetration levels, improving road network, greater buying abilities and addition of several new models, India’s market was able to outdo its peers in the growth of new car sales, reports ET Auto.

 Jan – May ’16 and ’17 Passenger Vehicle Sales Globally
Country Jan-May 16 Jan-May 17 %Change
India 1,196,781 1,332,442 11.34%
China 9,671,100 9,421,100 2.59%
US 2,215,452 1,997,708 9.83%
UK 1,164,870 1,158,357 0.56%
France 875,076 904,341 3.34%
S Korea 544,055 529,096 2.75%
Brazil 785,653 803,609 2.29%
Japan 1,788,331 1,950,186 9.05%
Germany 1,394,200 1,459,400 4.68%

Source: Society of Indian Automobile Manufacturers

August 6, 2017   No Comments

India a Top 10 Trade Partner for USA

India is currently U.S.’s 9th largest goods trading partner with $67.7 billion in total (two way) goods trade during 2016. Goods exports totaled $21.7 billion; goods imports totaled $46.0 billion. The U.S. goods trade deficit with India was $24.3 billion in 2016.

According to the U.S. Census Bureau, the country’s top imports include jewelry, silverware, sporting and athletic goods, toys, basic chemicals, pharmaceuticals, medicines, apparel, accessories, textiles, and coal and petroleum products.

U.S. top exports include precious stones, pearls, metals, basic chemicals, medical and surgical equipment, metal manufacturing, computers, electronic products, and machinery other than electrical.

The tables below compare the figures for the first five months of U.S. – India trade for 2016 and 2017. The table also lists the trade figures for the first five months of 2009 which show that the trade deficit in that year was less that in recent years.  All figures below are in millions of U.S. dollars on a nominal basis and not seasonally adjusted.

Month, Year Exports Imports Month, Year Exports Imports
Jan ’17    1,703.0     3,791.9 Jan ’09

 

1,139.8 1,833.5
Jan ’16    1,485.7     3,693.3
Feb ’17    1,937.8      3,474.3 Feb ’09    1,046.8  1,579.0
Feb ’16    1,526.3      3,660.9
Mar ’17     2,114.5        4,143.9 Mar ’09    1,123.5  1,773.0
Mar ’16     1,834.5        3,997.0
Apr ’17     1,939.4        3,730.5 Apr ’09     1,268.8          1,799.2
Apr ’16     1,772.7        3,678.3
May ’17      2,056.9        4,531.1 May ’09     1,507.5  1,580.8
May ’16      1,585.9        4,124.9

Comparison of U.S. trade in goods with India for Jan to May in 2017 and 2016, and 2009.

 

August 4, 2017   No Comments

Investor Outlines Macro Trends in India

Macro thinker and author of the institutional newsletter, Global Macro Investor, Raoul Pal, identifies big trends ahead of time and has 24,000 Twitter followers. He enunciates that the next big macro idea is India.

Pal says, “India has built the world’s first national digital infrastructure, leaping at least two generations of financial technologies and has built something as important as the railroad was to the U.K. or the interstate highways were to the U.S. India is now the most attractive major investment opportunity in the world.

Pal outlines 7 phases that has made India the biggest emerging market macro story in the world. Lightly edited excerpts follow:

Phase 1 – The Aadhaar Act

In 2009, India launched a project called Aadhaar, and began creating a biometric database based on a 12-digit digital identity, authenticated by finger prints and retina scans, to identify and document its population. As of 2016, 1.1 billion people  or 95% of the population now has a digital proof of identity.

Phase 2 – Banking Adoption

The Government of India  allowed the creation of eleven Payment Banks, which can hold money but don’t do any lending. To motivate people to open accounts, the government offered free life insurance, and linked bank accounts to social welfare benefits. Within three years, more than 270 million bank accounts were opened and $10bn in deposits flooded in. People who registered under the Aadhaar Act could open a bank account using just their Aadhaar number.

Phase 3 – Building Out a Mobile Infrastructure

Since people were able to instantly open a mobile phone account using their Aadhaar identification,  mobile phone penetration surged and went from 40% of the population to 79% within a few years.

The Unique Identification Authority of India, which administers Aadhaar, met with executives from Google, Microsoft, Samsung and Qualcomm, among others, to develop Aadhar-compliant devices which can integrate features such as secure cameras and iris authentication. Microsoft launched a lite version of Skype designed to work on an unstable 2G connection, and which is integrated with the Aadhaar database, so video calling can be used for authenticated calls.

Phase 4 – UPI – A New Transaction System

On December 30, 2016, the government launched Bharat Interface for Money, a digital payments platform using a Unified Payments Interface by which payments can be made by those with Unified Payments Interface accounts to those that do not have such accounts. Additionally, people can check their bank balances, and use QR codes for instant payments on this digital payments interface. Payments can now be made without using mobile phones — just using fingerprints and an Aadhaar number is required. This system works on a 2G network so it reaches even the most remote parts of India. It will revolutionize the agricultural economy, which employs 60% of the workforce and contributes 17% of GDP. Farmers will now have access to bank accounts and credit, along with crop insurance.

Phase 5 – India Stack – A Digital Life

India Stack is a framework that will make the new digital economy work seamlessly. It’s a set of APIs (Application Programming Interface) that allows governments, businesses, startups and developers to utilize a unique digital infrastructure via a presence-less, paperless and cashless service delivery.

Essentially, it is a secure Dropbox for a person’s entire official life and creates what is known as eKYC: Electronic Know Your Customer.

Using India Stack APIs, all that is required is a fingerprint or retina scan to open a bank account, mobile phone account, brokerage account, buy a mutual fund or share medical records at any hospital or clinic in India. It also creates the opportunity for getting instant loans and brings insurance to the masses, particularly life insurance.

India Stack is the largest open API in the world and will allow for massive fintech opportunities to be built around it. India is already the third largest fintech center but it will jump into first place in a few years. The country is already organizing hackathons to develop applications for the APIs.

Phase 6 – A Cash Ban

The cash ban of November 2016 forced everyone into the new digital economy. It has the hugely beneficial side-effect of reducing everyday corruption, recapitalizing the banking sector and increasing government tax take, thus allowing India to rebuild its crumbling infrastructure.

India was a cash society but once the dust settles, cash will account for less than 40% of total transactions in the next five years. It may eliminate cash altogether in the next ten years.

Phase 7 – The Investment Opportunity

The future for India is massive technological advancement, a higher trend rate of GDP and more tax revenues. Tax revenues will fund infrastructure – ports, roads, rail and healthcare. Technology will increase agricultural productivity, online services and manufacturing productivity.

Telecom, banking, insurance and online retailing will boom, as will the tech sector. FDI is already exploding and will rise massively in the years ahead as technology giants and others pour into India to take advantage of the opportunity.

Nothing in India will be the same again.

 

August 1, 2017   No Comments

Harvard Study: India Becomes New Economic Growth Pole, Surpasses China

According to the Harvard University‘s Center for International Development  growth projections, India will feature on top of the list of the fastest growing economies until 2025 with an average annual growth of 7.7 per cent. The university-wide center works to advance the understanding of development challenges and offer viable solutions to problems of global poverty.

Indian flag

Key Highlights of the  study:

  • “The economic pole of global growth has moved over the past few years from China to neighboring India, where it is likely to stay over the coming decade.”
  • “The countries that are expected to be the fastest growing – India, Turkey, Indonesia, Uganda, and Bulgaria – are diverse in all political, institutional, geographic and demographic dimensions.”
  • “India, Indonesia and Vietnam have accumulated new capabilities that allow for more diverse and more complex production that predicts faster growth in the coming years.”
  • “What they [the countries mentioned in the previous bullet] share is a focus on expanding the capabilities of their workforce that leaves them well positioned to diversify into new products and products of increasingly greater complexity.”
  • “India has made inroads in diversifying its export base to include more complex sectors, such as chemicals, vehicles, and certain electronics.”

NDTV says, that the growth projections are based on measures of each country’s economic complexity, which captures the diversity and sophistication of the productive capabilities embedded in its exports and the ease with which it could further diversify by expanding those capabilities.

 

 

July 10, 2017   No Comments

India Holds $124 Billion in U.S. Securities

The most recent data available with the U.S. Treasury Department shows that India increased its holding of American government securities to $124.1 billion at the end of April, a $7 billion increase from the previous month.

Among the BRIC nations, India had the third largest exposure to the U.S. government securities after China and Brazil, while Russia‘s holding rose to $104.9 billion reports the Press Trust of India.

With the U.S. economy witnessing relatively better economic growth trends, India has hiked its exposure to the securities. According to the latest estimate from the Bureau of Economic Analysis released last month, “Real gross domestic product increased at an annual rate of 1.2 percent in the first quarter of 2017.”

picture depicting growth

June 27, 2017   No Comments