Category — Economy

KKR Invests $50 Million in India’s Walchand Nagar Industries

New York City-based private equity firm KKR & Co., will invest $50 million (Rs 300 crore) in Mumbai-based Walchand Nagar Industries, one of India’s oldest business groups.
KKR has so far deployed around $4 billion in structured financing to business groups in India over the past seven years, and has invested approximately $2.5 billion in 12 private equity transactions since 2006. The company’s India strategy has been predominantly into partnership deals and it has developed a niche structured-credit platform, in India.
KKR Logo

The deal will help Walchand retire some of its bank loans, besides providing capital to drive growth. The funds will also be used for expansion of its defense business, reports the Economic TimesWalchand Nagar Industries has a strong presence in India’s defense, aerospace, and nuclear industries, and, according to its website, it works closely with India’s Defense Research and Development Organization, and Space Research Organization.

May 22, 2017   No Comments

India Finalizes Rates for new GST Tax

At a two-day meeting of the Goods and Services Tax (GST) Council in Srinagar, the capital of India’s northernmost state of Jammu and Kashmir, India finalized tax rates that will apply to different goods and services from July 1. A panel comprising federal and state finance ministers fixed the rates for over 1211 items under the Goods and Services tax.

Goods
No tax will be imposed on food items such as fresh meat, fish chicken, eggs, milk, butter milk, yogurt, natural honey, fresh fruits and vegetables, flour, bread, and salt to mention a few. Stamps, judicial papers, printed books, newspapers, and bangles, are some of the non-food items which will not be taxed.

A 5% tax will be applied on items such as fish fillet, cream, skimmed milk powder, frozen vegetables, coffee, tea, spices, and edible oil for example. Kerosene, coal, medicines, stents and lifeboats will also be taxed at 5%.

A 12% tax will be levied on frozen meat products , butter, cheese, ghee, dry fruits in packaged form, animal fat, sausage, fruit juices, savory snack items. Ayurvedic medicines, tooth powder, incense, coloring books, picture books, umbrellas, sewing machines, and mobile phones also fall in this tax bracket.

An 18% tax slab will be applied to refined sugar, pasta, cornflakes, pastries and cakes, preserved vegetables, jams, sauces, soups, ice cream, instant food mixes, and mineral water to name a few. Tissues, envelopes, tampons, note books, steel products, printed circuits, cameras, speakers and monitors also fall in this tax slab.

A 28% tax – the highest in the GST systemwill be levied on chewing gum, molasses, waffles and wafers coated with chocolate, and aerated water. This tax slab also includes items such as paints, deodorants, shaving creams, after shave lotions, shampoos, dyes, sunscreen, wallpaper, ceramic tiles, water heaters, dishwashers, weighing machines, washing machines, vending machines, vacuum cleaners, shavers, hair clippers, automobiles, motorcycles, aircraft for personal use.

Services

No Tax on Education and Healthcare services, hotels and lodges with tariffs below $15. The services that are currently exempt shall continue to be exempt under the GST regime. Services by government, and foreign diplomatic missions are also covered in the exemption list.

A 5% tax will apply to transport services such as railways, and economy class air transport,  cab aggregators, and small restaurants.

A 12% tax will be levied on hotels that do not have air conditioners, business class air tickets, fertilizers, and work contracts.

 An 18% tax slab will apply to hotels that have air conditioning and that serve liquor, telecom services, IT services, branded garments, insurance, and financial services.

A 28% tax will be applied to 5-star hotels, betting on races, and movie tickets.

Input tax credit will lower all taxes. E-commerce establishments will deduct 1% tax at source before paying suppliers. The GST Council will take up taxation of gold and other precious metals and items such as packaged foods, footwear and textiles at the next meeting on June 3, India’s Finance Minister Jaitley said. Taxation of lottery service has also not been decided yet reports the Economic Times.

“Several process related changes can now be undertaken as the passage of the rules has paved the way for the introduction of the most significant tax reform in India,” said M.S. Mani, senior director at Deloitte Haskins & Sells LLP.

Taxes

May 20, 2017   No Comments

India’s Benchmark Index Sets Record

The S&P BSE Sensex climbed to record levels on strong corporate earnings and gains in Asian markets:  the index rose 0.6 percent to close above 30,000 for the first time; while the NSE Nifty 50 Index, advanced 0.5 percent.

BSE Sensex chart

Seven out of the nine Nifty-listed companies have either met or exceeded their earnings expectations for the January-March quarter, according to data compiled by Bloomberg. Out of the 13 sector indices compiled by BSE Ltd., fast-moving consumer goods surged the most, rising to its highest level since at least 2005. ITC Ltd., was the top performer on the Sensex, rising to a record high.

“Strong company results show that the market has broken away from the shackles of demonetization,” Jitendra Panda, managing director at Peerless Securities Ltd., in Kolkata said. “This milestone for the Sensex was long-awaited and with companies displaying momentum in the numbers, we expect better days ahead,” he added.

May 18, 2017   No Comments

India is U.S.’s 9th Largest Trading Partner

India is currently our 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. Add in services and the number exceed $100 billion.

Exports

  • India was the United States’ 18th largest goods export market in 2016.
  • U.S. goods exports to India in 2016 were $21.7 billion, up 1.1% ($237 million) from 2015 and up 124.2% from 2006.
  • The top export categories (2-digit HS) in 2016 were: precious metal and stone (diamonds) ($7.0 billion), machinery ($2.0 billion), optical and medical instruments ($1.3 billion), mineral fuels ($1.2 billion), and electrical machinery ($1.2 billion).
  • U.S. total exports of agricultural products to India totaled $1.3 billion in 2016, our 21st largest agricultural export market. Leading domestic export categories include: tree nuts ($522 million), cotton ($250 million), pulses ($144 million), fresh fruit ($72 million), and planting seeds ($32 million).
 US Agricultural Exports to India, 2016India offers promising export growth prospects for U.S. agriculture with a large and rapidly expanding middle class, rising disposable incomes and shifting consumption patterns toward higher-value agricultural commodities. India’s imports of U.S. agriculture have been growing, particularly consumer-oriented agricultural goods, where products have made major headway.

May 17, 2017   No Comments

Norway Increases Investments in India

According to Norwegian Ambassador to India Nils Ragnar Kamsvag, ” The simplified Goods and Services Tax is a good example of India speeding up its economic reforms process. We are very upbeat about seeing India take such measures, as these will help not only India emerge as a very strong economy in the world, but give a boost also for Norway’s trade relations with India. GST is another milestone in strengthening India’s economic position globally.”

Picture of Nils Ragnar Kamsvåg

Nils told the Economic Times that Norway’s sovereign wealth fund, the world’s biggest such fund, is willing to increase exposure in India. The value of this fund rose to a record 8 trillion Norwegian crowns ($935 billion) in the first week of May this year.

The fund, run by a unit of the central bank, invests proceeds from Norway’s oil and gas industry in foreign stocks, bonds and real estate, and is now worth more than 2.5 times the country’s annual GDP. Over the last three years, the Norwegian government took policy initiatives to increase investments by its Government Pension Fund Global in India, to approximately $9 billion.

May 14, 2017   No Comments