Category — Politics

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

12 Indian States Lead Business Reforms

India’s Department of Industrial Policy and Promotion and its  Ministry of Commerce and Industry, in partnership with the World Bank Group, released the results of the Assessment of State Implementation of Business Reforms 2015-16.

This Assessment studies the extent to which the 36 states and federally administered territories have implemented DIPP’s 340-point Business Reform Action Plan (BRAP) for the period July 1, 2015 to June 30, 2016. The BRAP includes recommendations for reforms on 58 regulatory processes, policies, practices or procedures spread across 10 reform areas spanning the life cycle of a typical business. The BRAP portal, among the first of its kind globally, allowed the states and federally administered territories to submit evidence of implemented reforms.

32 of the 36 states and federally administered territories submitted evidence of implementation of 7,124 reforms. These submissions were reviewed by the World Bank team and validated by DIPP’s team on whether they met the objectives of the BRAP. A total of 6,069 reforms were approved as implemented or not applicable on the portal.

The results of the assessment released by Government of India’s Press Information Bureau demonstrate that States have increasingly risen to addressing the challenge of making it easier to do business. The national implementation average stands at 49%, significantly higher than the previous year’s national average of 32%.

Based on implementation of reforms, the states and federally governed entities have been divided into four categories:

Category States
Leaders

(90-100%)

Andhra Pradesh, Telangana, Gujarat, Chhattisgarh, Madhya Pradesh, Haryana, Jharkhand, Rajasthan, Uttarakhand, Maharashtra, Odisha, Punjab
Aspiring Leaders

(70-90%)

Karnataka, Uttar Pradesh, West Bengal and Bihar

 

Acceleration Required

(40-70%)

Himachal Pradesh, Tamil Nadu and Delhi
Jump Start Needed

(0-40%)

Kerala, Goa, Tripura, Daman & Diu, Assam, Dadra & Nagar Haveli, Puducherry, Nagaland, Manipur, Mizoram, Sikkim, Arunachal Pradesh, Jammu & Kashmir, Chandigarh, Meghalaya, Andaman & Nicobar Islands, and Lakshadweep.

August 3, 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

Ram Nath Kovind Will Be India’s 14th President

Ram Nath Kovind, the presidential candidate proposed by the ruling BJP-led National Democratic Alliance, won  66 per cent of the votes cast by an electoral college of Ministers of Parliament and state lawmakers, defeating the opposition’s candidate Meira Kumar, and will be the next President of India. He will be sworn in as President on July 25. The President holds a largely ceremonial, head of state position in India, with virtually all executive powers residing with the Prime Minister.

Born on October 1, 1945, Kovind is an attorney by training and a native of the Kanpur area (where the India Expert Gunjan Bagla was also born) and has a long standing political career. He resigned as Governor of the state of Bihar to participate in the presidential elections. He served as the chairman of the Senate (Rajya Sabha) Committee.  Kovind also represented India in the United Nations.

Kovind’s career as a lawyer spanned 16 years. He was a Federal Government attorney in the Delhi High Court from 1977 to 1979 and a Federal Government Standing Counsel in India’s highest court, the Supreme Court, from 1980 to 1993. He served as member on the board of management of the Dr. B.R. Ambedkar University, Lucknow, and was a member of the board of governors of the Indian Institute of Management, Kolkata.

Ram Nath Kovind Wins Election

July 20, 2017   No Comments

U.S. House Passes Bill on Defense Cooperation with India

The U.S. House of Representatives passed a $621.5 billion defense policy bill that includes defense cooperation with India. An amendment in this regard, moved by Indian-American Congressman Ami Bera, was adopted by a voice vote by the House as part of the National Defense Authorization Act 2018, beginning October 1 this year.

The India-related amendment passed by the House requires the Secretary of Defense, in consultation with the Secretary of State, to develop a strategy for advancing defense cooperation between the United States and India. “The United States is the world’s oldest democracy and India is the world’s largest democracy. It is vitally important to develop a strategy that advances defense cooperation between our two nations,” Bera said.

Photograph of Ami Bera

The Act now  needs to be passed by the Senate before it can be sent to the White House for President Donald Trump to sign into law, reports News 18.

Cara Abercrombie, Deputy Assistant Secretary of Defense for South and Southeast Asia, said, “We have the same interests in upholding this international system that upholds the rule of law that favors freedom of navigation, open sea lanes of communication, and freedom of over flight. Those are values that are critically important to the United States and India to our economic prosperity and to our access in the region.”

July 16, 2017   No Comments