Category — Politics

First American Crude Oil Shipped to India

The first shipment of two million barrels of American crude oil costing $100 million will reach India in the last week of September, opening a new chapter in trade between India and the U.S. This consignment is a fraction of India’s $70 billion oil import bill for 2016-17. Given the volume being contemplated by Indian companies, this new development is currently expected to boost the bilateral oil trade to $2 billion annually.

The Hindustan Times reports that while the 40-year-old ban on export of American oil was lifted by the then U.S. President Barack Obama in December 2015, the real move started during the maiden meeting between Prime Minister Narendra Modi and U.S. President Donald Trump on June 26 when the two leaders agreed to deepen the engagement in the energy sector.

President Trump and PM Modi

Saudi Aramco‘s decision to raise Arab Light crude price by 60 cents per barrel for Asian buyers narrowed the differential between West Asian crude oil and North Sea Brent, the benchmark for most of global oil trade. The narrowed differential turned U.S. oil attractive for India even after factoring the distance between the two countries.

India’s largest state-run refiner-marketer Indian Oil Corporation Limited (IOC) and state-owned companies Bharat Petroleum Corporation Limited (BPCL) and Hindustan Petroleum Corporation Limited (HPCL) have all opted for American crude oil.

BPCL bought a cargo containing 500,000 barrels each of Mars and Poseidon, and 1 million barrels of U.S. WTI Midland sweet crude; IOC sealed a deal to purchase 1.6 million barrels of crude oil from the U.S. in July, and this month it placed an additional order of 2 million barrels. HPCL plans to buy low-sulfur oil from the United States in the next few months for its 166,000 barrel per day refinery in southern India.

Senator Ted Cruz said Texas will provide crucial oil exports to India and serve as a reliable long-term supplier of energy.

August 17, 2017   No Comments

India to Divest Stake in Four Defense Companies

Aiming to meet its $11 billion divestment target by March 2018, the Government of India is considering selling up to 25% of its stake in four state-owned companies under the control of the department of defense through an initial public offering. It has invited proposals by August 18.

The four companies are Mazagon Dock Limited., Bharat Dynamics Limited, Garden Reach Shipbuilders & Engineers Limited., and Mishra Dhatu Nigam Limited, reports VCCircle.

Government of India, Logo

August 15, 2017   No Comments

Income Tax Collections Rise 42 percent in India

Tax compliance in India has improved: more than 28.2 million taxpayers filed their tax returns for the 2016-17 financial year before the extended deadline of August 5 — a 24.7% increase over the previous year, the Federal Board of Direct Taxes announced. Though the deadline for filing returns is over, taxpayers can file returns for FY17 till 31 December, after paying a penalty of $78.

Live Mint reports that the number of individual filers rose 25.3% in the April-August tax period of 2017-18 to 27.9 million, the Federal board of Direct Taxes said. The amount of advance personal tax collected during the period also surged 42% over the same period of last year.

“Part of the growth in returns filed can be attributed to the demonetization exercise. Those who have made cash deposits in banks after demonetization may be among those who have newly come into the category of return filers,” said Amit Maheshwari, partner, Ashok Maheshwary and Associates Llp.

 

Taxes

 

August 13, 2017   No Comments

Mobius: Stock Indices in India May Double in 3-4 Years

Dr. Mark Mobius, executive chairman of Templeton Emerging Markets Group, an affiliate of  San Mateo, CA-based Franklin Templeton Investments, expects India’s Stock Exchange indices,the  Nifty and the Sensex to double within the next three or four years.

“This is  due to the high growth rate of the country and a more rational interest environment where interest rates are more in line with what the market is able to pay,” Mobius said in a phone interview from Singapore.

Mark Mobius
“Also, you will see the foreign reserves of the country will continue to grow. In addition, if liberalization continues, you will see much more foreign investment coming in, in addition to the domestic investment,” he added.

Mobius explained that as interest rates get lower deposit rates become lower too and this will drive people to invest in equity markets. He believes that though India’s markets are booming on consumption rates currently, infrastructure is likely to emerge as a bigger theme. This will happen “from privatization of the state-owned enterprises; part of it will come from raising money for infrastructure projects, and of course, the way you do that is by making it safer for infrastructure investors to go into the market,” he said.

Mobius added that geopolitical risks bothering India could be of concern, reports Live Mint.

 

 

August 13, 2017   No Comments

Air India Seeks Loan for Six Boeing Aircraft

Even as the Government of India is working on the final plans for a strategic disinvestment of its stake in loss-making national carrier Air India, the airline is ready with plans to fly to more overseas destinations. The airline seeks offers from banks and financial institutions to arrange bridge financing of up to $740 million for the purchase of six Boeing 787-8 planes, according to a tender document.

An Air India Aircraft

“In addition to the Government of India guarantee, Air India will offer the aircraft as a security. The facility should be a direct loan without the requirement for formation of a special purpose vehicle structure which requires title transfer,” the tender document said.

Air India has a fleet of 110 airplanes, including 33 Boeing aircraft, reports BusinessLine.

 

August 8, 2017   No Comments