Indian Government to Bail Out State-Owned Banks

Over the next two years, New Delhi plans to pump about $32 billion into state-owned banks in a bid to increase money flow, significantly spur economic activity, loosen credit conditions, and boost investment and growth.

The Economist explains that according to the plan unveiled on October 24th, the ailing banks will lend the government $21 billion, about a third of their combined market value. The government will reinvest this money in bank shares, thus ensuring they no longer need a bail-out. Bankers are being encouraged to use a new bankruptcy code to deal with bust borrowers; raise 580 billion rupees themselves, perhaps by selling non-core assets, and receive a further 180 billion rupees from government coffers left over from a previous scheme.

Indian Rupee Symbol

The total funds for the initiative equal roughly 1.3 percent of the country’s GDP. Within one year of implementation, the drag on bank credit growth is expected to decrease by up to 10 percentage points, while GDP growth could rise by up to 5 percentage points, Goldman Sachs said.

CNBC reports that according to analysts at both Goldman Sachs and ING Bank, the Indian rupee is expected to gain in strength over the next year as a result of recapitalization.

This move is associated with risks:

Interest payment on the bond will come at a budgetary cost, which may increase government expenditure and the fiscal deficit, according to Radhika Rao, economist at Singapore headquartered DBS Bank.

The move could “sustain the risk of more public sector bank loans turning sour, swelling the country’s [bad loan] ratio,” according to a note by ING Bank.

October 28, 2017   No Comments

India and USA Are Natural Allies says Tillerson

U.S. Secretary of State Rex Tillerson arrived in India as part of a multi-stop tour across the Middle East and South Asia. He had discussions with Prime Minister Narendra Modi, and  India’s minister for Foreign Affairs Ms. Sushma Swaraj. Tillerson and Swaraj stressed the close relationship and shared values between the two countries and pledged to work closely on matters of security, and also to enhance defense and economic cooperation.

The US Secretary of State, Mr. Rex Tillerson calls on the Prime Minister, Shri Narendra Modi, in New Delhi on October 25, 2017.

The US Secretary of State, Rex Tillerson calls on Prime Minister Narendra Modi, in New Delhi on October 25, 2017

Tillerson mooted a larger role for India in stabilizing the economy of Afghanistan, and pledged American support to fight terrorists. “In the fight against terrorism, the United States will continue to stand shoulder to shoulder with India. Terrorist safe havens will not be tolerated,” he said.

Tillerson expressed concern that extremist groups could threaten the security of Pakistan. “We also are concerned about the stability and security of Pakistan’s government, as well as that these terrorist organizations have enlarged their numbers, enlarged their strength and their capability,” he told reporters.

While recognizing India as a key partner in the face of what he considers as China‘s negative influence in Asia, Tillerson reiterated that India could play a wider role in the region, reports Voice of America.

“The United States supports India’s emergence as a leading power and will continue to contribute to Indian capabilities to provide security throughout the region.” He said Washington was willing to provide New Delhi with advanced technologies for its military modernization.

“We also look forward to further cooperation in the broader Indo-Pacific region as we both promote a rules-based approach to commerce, and a transparent and sustainable approach to economic development,” he said.

October 27, 2017   No Comments

India Seeks to Upgrade its Food Processing Ecosystem

India seeks to partner with companies in the food processing ecosystem in the U.S. to incorporate best practices into its food value chain.
Ahead of the mega ‘World Food India‘ trade show in New Delhi from November 3-5, 2017, India’s minister for the food processing industry, Harsimrat Kaur Badal, is leading a visiting Indian delegation which met officials from companies across the food value chain in Chicago and Washington D.C.

Badal said that World Food India provides a platform to food processors, machine manufacturers, technology suppliers and refrigeration companies that are interested in expanding their footprint in newer markets. India is looking at partnering with those companies to upgrade Indian systems and technologies, she added.

Food processing

India has a $600 billion retail sector, of which 70 percent is food retail. This figure set to increase three times by 2020, reports the Economic Times.

October 8, 2017   No Comments

Ford Focuses on Smart Mobility in India

Ford India hosted the City of Tomorrow Symposium in New Delhi where opinion leaders, academics, innovators, policymakers, and special TED speakers got together for an interactive symposium. The thought leaders explored the innovative use of technology and discussed collaboration between the state and private sectors on the issues of mobility and transportation solutions in India’s Smart Cities.

Ford Smart Mobility, a subsidiary of Ford established in 2016, designs, builds, grows and invests in emerging mobility services. It recently partnered with the city of Indore, in the state of Madhya Pradesh, signing a memorandum of understanding to work together to address the city’s most pressing transportation issues, reports YourStory.

Route Map

Ford shared that it had already launched new smart mobility initiatives across Asia which they would introduce in India, including:

Dynamic shuttles – It will initiate a pilot project of its smart shuttle services involving its employees in Chennai by the end of this year.

Car sharing – the company has invested in Zoomcar, India’s leading car sharing company.

Creative spaces –  Ford will launch a new Smart Mobility Innovation Hub in Chennai, where an open-plan office will bring together Ford’s Global-Data-Insight-Analytics and Information Technology teams to harness creativity and explore new data-driven approaches to solving mobility problems.

Traffic management traffic cameras will enable authorities to collect data that will inform traffic management, heighten safety, and allow long-term planning.


October 6, 2017   No Comments

Mattis: U.S. to share advanced defense technologies with India

The first high-ranking official of the Trump administration to visit India since January, U.S. defense secretary James Mattis said on a two-day visit to New Delhi, “We look forward to sharing some of our most advanced defense technologies through the bilateral Defense Technology and Trade Initiative.”

Live Mint reports that Mattis and India’s defense minister Nirmala Sitharaman, discussed broadening maritime cooperation in the Indo-Pacific region, eradicating safe havens for terrorism, defense cooperation, drones, counter-terrorism and other major issues of mutual concern. They also focused on re-energizing the Defense Technology and Trade Initiativeas a mechanism to promote technology sharing as well as co-development and co-production efforts.” 

The U.S. Secretary of Defense James Mattis and India's Minister for Defense, Nirmala Sitharaman at a press conference in New Delhi on September 26, 2017.

The U.S. Secretary of Defense James Mattis and India’s Minister for  Defense,  Nirmala Sitharaman in New Delhi on September 26

Harsh V. Pant, professor of international relations at King’s College, London, said, “Defense ties have been growing rapidly between the two democracies and have been one of the most important factors propelling the relationship.”

“The relationship that we are building with India is not to the exclusion of other countries,” Mattis told reporters. “It is specifically designed for inclusion using a rules-based order that any nation that is living by the traditional rules of non-interference in other states in today’s age of anti-terrorism will not find this relationship in any way adversarial,” Mattis said.

September 26, 2017   No Comments