Kolkata: Isuzu Motors India would start contract manufacturing of its sports utility vehicles and pick-up trucks at Hindustan Motors’ Chennai plant from December.
Hind Motors in a note to the accounts for April-June quarter said the manufacturing was expected to start from December this year. In June, both the companies had signed an agreement for this.
Success in my Habit
Tuesday, August 20, 2013
Ashwagandha gets US patent for vaccine adjuvant
Mumbai: A group of researchers from Pune University and Serum Institute have received a patent on the use of Ashwagandha as a vaccine adjuvant, or component that helps improve its efficacy.
A medicinal herb, Ashwagandha is also referred to as Indian Gensing.
In a project supported by the Department of Science and Technology, the research was part of a project to develop “botanical immunomodulators” as adjuvants to improve vaccine efficacy, said a researcher from Serum.
In the past, the industry used aluminium salts as an adjuvant, but as newer vaccines are developed, industry is also looking for alternatives, he added.
In fact, the finding would be used in new vaccines such as the pentavalent vaccine targeting meningitis, or those against dengue and pneumococcal diseases, said Serum Executive Director Suresh Jadhav.
About nine herbs were studied, before research found the required property in ashwagandha (Withania somnifera) and more work was done to understand in what ratio it could be used in a vaccine, a researcher said.
Unlike earlier instances where companies tried to patent turmeric, for example, the researcher clarified, the patent here was in an area not claimed by ayurveda.
VACCINE APPLICATIONS
Further, he said, that all known claims on herbs have been digitised and a patent would not have been granted in the US, if the latest claim was similar to existing knowledge in India or China.
The adjuvant showed properties where it could be used with other licensed adjuvants in T-cell dependent antigens such as diphtheria, tetanus and pertusssis group of vaccines.
The project was supported by DST and Serum Institute of India with total financial outlay of Rs 90 lakh spread over 3 years.
The research project was completed in 2007, but development work continued at Serum Institute.
Patents were filed in India and in the US.
The researchers receive their patent in India in 2007, but the US patent was granted on August 6.
A medicinal herb, Ashwagandha is also referred to as Indian Gensing.
In a project supported by the Department of Science and Technology, the research was part of a project to develop “botanical immunomodulators” as adjuvants to improve vaccine efficacy, said a researcher from Serum.
In the past, the industry used aluminium salts as an adjuvant, but as newer vaccines are developed, industry is also looking for alternatives, he added.
In fact, the finding would be used in new vaccines such as the pentavalent vaccine targeting meningitis, or those against dengue and pneumococcal diseases, said Serum Executive Director Suresh Jadhav.
About nine herbs were studied, before research found the required property in ashwagandha (Withania somnifera) and more work was done to understand in what ratio it could be used in a vaccine, a researcher said.
Unlike earlier instances where companies tried to patent turmeric, for example, the researcher clarified, the patent here was in an area not claimed by ayurveda.
VACCINE APPLICATIONS
Further, he said, that all known claims on herbs have been digitised and a patent would not have been granted in the US, if the latest claim was similar to existing knowledge in India or China.
The adjuvant showed properties where it could be used with other licensed adjuvants in T-cell dependent antigens such as diphtheria, tetanus and pertusssis group of vaccines.
The project was supported by DST and Serum Institute of India with total financial outlay of Rs 90 lakh spread over 3 years.
The research project was completed in 2007, but development work continued at Serum Institute.
Patents were filed in India and in the US.
The researchers receive their patent in India in 2007, but the US patent was granted on August 6.
M&M plans Rs 10,000-cr investment, net rises
Mumbai: Tractor and utility vehicle market leader Mahindra & Mahindra (M&M) on Tuesday posted a 29 per cent rise in net profit for the quarter ended June, helped by higher sales of tractors and tighter control measures. The Mumbai-based company reported a standalone net profit of Rs 937 crore during the quarter against Rs 725 crore in the same quarter last year.
The fall in its passenger vehicle’s sales was made up by a buoyant demand for tractors. Helped by a favourable monsoon, M&M tractor sales rose 26 per cent in the first quarter at 71,696 units against 56,861 units in the same quarter last year.
ALSO READ: q1-profits-113081301186_1.html" target="_blank">M&M: Growth in tractor sales & other income drive Q1 profits
Pawan Goenka, president (automotive and farm equipment sectors), said, “The tractor segment was pegged to post a growth of five-six per cent for the year, but we now expect it to finish with a double digit growth. However, we have no clear sign of any turnaround in the passenger vehicle segment.”
Other factors such as no increase in commodity prices, lesser focus on discounting and marginal price hike during the quarter helped the company in improving margins. In line with other companies, M&M, too, got a boost from income received as dividend during the quarter. Together with the dividend, a total of Rs 164 crore was received under the head ‘other income’ against Rs 60 crore in the year-ago period. The company posted net sales of Rs 9,906 crore for the reporting quarter as compared to Rs 9,247 crore posted in the same quarter last year. Operating margins stood at 14.4 per cent as against 13.9 per cent.
ALSO READ: M&M gains 3.8% amid MSCI addition talk
At the 67th annual general meeting, Anand Mahindra, the new chairman, said the company would invest Rs 10,000 crore in the next three years towards new product development and the setting up of a new plant. The company is making investments towards new products including a new compact sports utility vehicle, a new Scorpio, electric variants of some of the existing models and new models in partnership with its Korean subsidiary.
The fall in its passenger vehicle’s sales was made up by a buoyant demand for tractors. Helped by a favourable monsoon, M&M tractor sales rose 26 per cent in the first quarter at 71,696 units against 56,861 units in the same quarter last year.
ALSO READ: q1-profits-113081301186_1.html" target="_blank">M&M: Growth in tractor sales & other income drive Q1 profits
Pawan Goenka, president (automotive and farm equipment sectors), said, “The tractor segment was pegged to post a growth of five-six per cent for the year, but we now expect it to finish with a double digit growth. However, we have no clear sign of any turnaround in the passenger vehicle segment.”
Other factors such as no increase in commodity prices, lesser focus on discounting and marginal price hike during the quarter helped the company in improving margins. In line with other companies, M&M, too, got a boost from income received as dividend during the quarter. Together with the dividend, a total of Rs 164 crore was received under the head ‘other income’ against Rs 60 crore in the year-ago period. The company posted net sales of Rs 9,906 crore for the reporting quarter as compared to Rs 9,247 crore posted in the same quarter last year. Operating margins stood at 14.4 per cent as against 13.9 per cent.
ALSO READ: M&M gains 3.8% amid MSCI addition talk
At the 67th annual general meeting, Anand Mahindra, the new chairman, said the company would invest Rs 10,000 crore in the next three years towards new product development and the setting up of a new plant. The company is making investments towards new products including a new compact sports utility vehicle, a new Scorpio, electric variants of some of the existing models and new models in partnership with its Korean subsidiary.
CDC and Abraaj Group invest $17.5 million in AP-based Rainbow Hospitals chain
New Delhi: Global development finance institution CDC Group and Dubai-based private equity investor Abraaj Group have jointly invested Rs. 107.3 crore ($17.5 million), for an undisclosed stake, in Rainbow Hospitals, the UK-based government-owned institution announced on Tuesday.
Proceeds from the investment will be used by the Hyderabad-based Rainbow Hospitals to expand its presence beyond Andhra Pradesh.
The 450-bed paediatric and maternity healthcare-focused hospital chain will set up hospitals in Chennai, Pune, Visakhapatnam and Kurnool, and increase its number of beds to 1,000 by 2017. The capital infusion is also expected to support the creation of as many as 3000 new jobs, up from its present employment figure of about 1,000.
"In parallel, we would also like to develop tertiary paediatric care in tier-2 like Vizag and Kurnool," said Ramesh Kancharla, chairman and managing director, Rainbow Hospitals.
Established in 1999, Rainbow Hospitals is India's largest specialized paediatric and maternity care company with four maternity, paediatric and neonatal intensive care units, and one outpatient clinic in Hyderabad. The business has expanded with four centres added in the last six years.
"With employment in the group currently at around 1,000 people, we expect this to grow as much as four times over the course of our investment, led by the rapid growth in the Indian healthcare market," pointed out Srini Nagarajan, regional director for CDC's South Asia operations.
He also added that with demand expected to grow at around 15% per annum over the next decade, it was clear that the gap in provision of healthcare in India will need to be plugged by the private sector.
The latest transaction is CDC's first direct equity investment in India since the launch of its new investment strategy in late 2012.
Under its new strategy, announced in September last year, CDC now provides direct debt and equity investment to businesses in South Asia and Africa, while continuing to act as a fund-of-funds investor.
From 2004 to 2010, it operated primarily as a fund-of-funds investor, investing in companies through intermediary fund managers.
The Rainbow Hospitals investment also builds upon Abraaj Group's long-standing partnerships with healthcare institutions in South Asia and represents its sixth healthcare investment in the region.
"The Abraaj Group has been an early and committed investor in the healthcare space and this transaction represents our 28th investment globally in this sector," said Balaji Srinivas, managing director at the Abraaj Group.
Proceeds from the investment will be used by the Hyderabad-based Rainbow Hospitals to expand its presence beyond Andhra Pradesh.
The 450-bed paediatric and maternity healthcare-focused hospital chain will set up hospitals in Chennai, Pune, Visakhapatnam and Kurnool, and increase its number of beds to 1,000 by 2017. The capital infusion is also expected to support the creation of as many as 3000 new jobs, up from its present employment figure of about 1,000.
"In parallel, we would also like to develop tertiary paediatric care in tier-2 like Vizag and Kurnool," said Ramesh Kancharla, chairman and managing director, Rainbow Hospitals.
Established in 1999, Rainbow Hospitals is India's largest specialized paediatric and maternity care company with four maternity, paediatric and neonatal intensive care units, and one outpatient clinic in Hyderabad. The business has expanded with four centres added in the last six years.
"With employment in the group currently at around 1,000 people, we expect this to grow as much as four times over the course of our investment, led by the rapid growth in the Indian healthcare market," pointed out Srini Nagarajan, regional director for CDC's South Asia operations.
He also added that with demand expected to grow at around 15% per annum over the next decade, it was clear that the gap in provision of healthcare in India will need to be plugged by the private sector.
The latest transaction is CDC's first direct equity investment in India since the launch of its new investment strategy in late 2012.
Under its new strategy, announced in September last year, CDC now provides direct debt and equity investment to businesses in South Asia and Africa, while continuing to act as a fund-of-funds investor.
From 2004 to 2010, it operated primarily as a fund-of-funds investor, investing in companies through intermediary fund managers.
The Rainbow Hospitals investment also builds upon Abraaj Group's long-standing partnerships with healthcare institutions in South Asia and represents its sixth healthcare investment in the region.
"The Abraaj Group has been an early and committed investor in the healthcare space and this transaction represents our 28th investment globally in this sector," said Balaji Srinivas, managing director at the Abraaj Group.
CDC and Abraaj Group invest $17.5 million in AP-based Rainbow Hospitals chain
New Delhi: Global development finance institution CDC Group and Dubai-based private equity investor Abraaj Group have jointly invested Rs. 107.3 crore ($17.5 million), for an undisclosed stake, in Rainbow Hospitals, the UK-based government-owned institution announced on Tuesday.
Proceeds from the investment will be used by the Hyderabad-based Rainbow Hospitals to expand its presence beyond Andhra Pradesh.
The 450-bed paediatric and maternity healthcare-focused hospital chain will set up hospitals in Chennai, Pune, Visakhapatnam and Kurnool, and increase its number of beds to 1,000 by 2017. The capital infusion is also expected to support the creation of as many as 3000 new jobs, up from its present employment figure of about 1,000.
"In parallel, we would also like to develop tertiary paediatric care in tier-2 like Vizag and Kurnool," said Ramesh Kancharla, chairman and managing director, Rainbow Hospitals.
Established in 1999, Rainbow Hospitals is India's largest specialized paediatric and maternity care company with four maternity, paediatric and neonatal intensive care units, and one outpatient clinic in Hyderabad. The business has expanded with four centres added in the last six years.
"With employment in the group currently at around 1,000 people, we expect this to grow as much as four times over the course of our investment, led by the rapid growth in the Indian healthcare market," pointed out Srini Nagarajan, regional director for CDC's South Asia operations.
He also added that with demand expected to grow at around 15% per annum over the next decade, it was clear that the gap in provision of healthcare in India will need to be plugged by the private sector.
The latest transaction is CDC's first direct equity investment in India since the launch of its new investment strategy in late 2012.
Under its new strategy, announced in September last year, CDC now provides direct debt and equity investment to businesses in South Asia and Africa, while continuing to act as a fund-of-funds investor.
From 2004 to 2010, it operated primarily as a fund-of-funds investor, investing in companies through intermediary fund managers.
The Rainbow Hospitals investment also builds upon Abraaj Group's long-standing partnerships with healthcare institutions in South Asia and represents its sixth healthcare investment in the region.
"The Abraaj Group has been an early and committed investor in the healthcare space and this transaction represents our 28th investment globally in this sector," said Balaji Srinivas, managing director at the Abraaj Group.
Proceeds from the investment will be used by the Hyderabad-based Rainbow Hospitals to expand its presence beyond Andhra Pradesh.
The 450-bed paediatric and maternity healthcare-focused hospital chain will set up hospitals in Chennai, Pune, Visakhapatnam and Kurnool, and increase its number of beds to 1,000 by 2017. The capital infusion is also expected to support the creation of as many as 3000 new jobs, up from its present employment figure of about 1,000.
"In parallel, we would also like to develop tertiary paediatric care in tier-2 like Vizag and Kurnool," said Ramesh Kancharla, chairman and managing director, Rainbow Hospitals.
Established in 1999, Rainbow Hospitals is India's largest specialized paediatric and maternity care company with four maternity, paediatric and neonatal intensive care units, and one outpatient clinic in Hyderabad. The business has expanded with four centres added in the last six years.
"With employment in the group currently at around 1,000 people, we expect this to grow as much as four times over the course of our investment, led by the rapid growth in the Indian healthcare market," pointed out Srini Nagarajan, regional director for CDC's South Asia operations.
He also added that with demand expected to grow at around 15% per annum over the next decade, it was clear that the gap in provision of healthcare in India will need to be plugged by the private sector.
The latest transaction is CDC's first direct equity investment in India since the launch of its new investment strategy in late 2012.
Under its new strategy, announced in September last year, CDC now provides direct debt and equity investment to businesses in South Asia and Africa, while continuing to act as a fund-of-funds investor.
From 2004 to 2010, it operated primarily as a fund-of-funds investor, investing in companies through intermediary fund managers.
The Rainbow Hospitals investment also builds upon Abraaj Group's long-standing partnerships with healthcare institutions in South Asia and represents its sixth healthcare investment in the region.
"The Abraaj Group has been an early and committed investor in the healthcare space and this transaction represents our 28th investment globally in this sector," said Balaji Srinivas, managing director at the Abraaj Group.
Cabinet approves setting up of Tax Administration Commission
New Delhi: The Union Cabinet today approved the proposal for setting up of the Tax Administration Reform Commission (TARC).
Finance Minister P. Chidambaram in his Budget Speech 2013-14 had announced a proposal to set up the Commission.
The Commission will consist of a Chairman, two full-time members and four part-time members, of which at least will be from the private sector.
The Chairman will be an eminent person having wide experience of tax administration and policy making. The two full-time members will be with a background in revenue service pertaining to Income Tax and Central Excise and Customs respectively. The term of the Commission will be 18 months.
The Commission will review the application of tax policies and tax laws in India in the context of global best practices and recommend measures to strengthen the capacity of the tax system in India that would reflect best global practices.
The Commission will help in removing ambiguity in application of tax policy and tax laws, thereby establishing a stable tax regime and a non-adversarial tax administration. The Commission will facilitate an efficient tax administrative system that would enhance the tax base as well as tax payer base.
The Union Cabinet also approved a proposal for exemption of prior approval of Cabinet for disposal/auction of immovable properties acquired by the Union Government under the provisions of Chapter XX-C of the Income Tax Act 1961.
Finance Minister P. Chidambaram in his Budget Speech 2013-14 had announced a proposal to set up the Commission.
The Commission will consist of a Chairman, two full-time members and four part-time members, of which at least will be from the private sector.
The Chairman will be an eminent person having wide experience of tax administration and policy making. The two full-time members will be with a background in revenue service pertaining to Income Tax and Central Excise and Customs respectively. The term of the Commission will be 18 months.
The Commission will review the application of tax policies and tax laws in India in the context of global best practices and recommend measures to strengthen the capacity of the tax system in India that would reflect best global practices.
The Commission will help in removing ambiguity in application of tax policy and tax laws, thereby establishing a stable tax regime and a non-adversarial tax administration. The Commission will facilitate an efficient tax administrative system that would enhance the tax base as well as tax payer base.
The Union Cabinet also approved a proposal for exemption of prior approval of Cabinet for disposal/auction of immovable properties acquired by the Union Government under the provisions of Chapter XX-C of the Income Tax Act 1961.
VLCC acquires Singapore-based wellness firm GVig
New Delhi: Making its second overseas acquisition this year, the home-grown wellness and slimming firm VLCC has bought controlling stake in Singapore-based Global Vantage Innovative Group (GVig), which manufacturers and retails beauty and wellness products.
VLCC did not disclose the deal size, but industry insiders note that the deal is in the Rs 100-Rs 120 crore range. The company had earlier this year acquired Malaysian slimming and personal care firm Wyann International. It said the latest acquisition would help in expanding its presence in the South-East Asian region.
Mukesh Luthra, Chairman, VLCC Group, told Business Line, “We have acquired 80 per cent stake in GVig. The acquisition will give us a foothold in dermatological solutions. It will also help us gain access into GVig’s wellness products, research and development laboratory and manufacturing facilities.”
GVig provides wellness solutions through its subsidiaries BelleWave Cosmetics in the skin and haircare category, Celblos Dermal Research Centre, which offers dermatological solutions, and Enavose Life Science Research, offers a range of Swiss-made skincare and body wellness solutions.
Luthra said the acquisition has been funded through a mix of debt and internal accruals.
Asked on the products positioning in the India’s $5.7 billion beauty and wellness segment, Luthra said the products would be in the masstige (mass+ prestige) category.
He said VLCC had reported a turnover of Rs 1,000 crore in fiscal year ending March 2013. “We hope to touch a turnover of Rs 1,500 crore”.
PE investor Everstone Capital has been an investor in VLCC since 2007. It has 15 per cent stake and their funds were used for scaling up its India wellness services business and VLCC’s personal care business. CLSA had exited VLCC through a management buyout.
VLCC did not disclose the deal size, but industry insiders note that the deal is in the Rs 100-Rs 120 crore range. The company had earlier this year acquired Malaysian slimming and personal care firm Wyann International. It said the latest acquisition would help in expanding its presence in the South-East Asian region.
Mukesh Luthra, Chairman, VLCC Group, told Business Line, “We have acquired 80 per cent stake in GVig. The acquisition will give us a foothold in dermatological solutions. It will also help us gain access into GVig’s wellness products, research and development laboratory and manufacturing facilities.”
GVig provides wellness solutions through its subsidiaries BelleWave Cosmetics in the skin and haircare category, Celblos Dermal Research Centre, which offers dermatological solutions, and Enavose Life Science Research, offers a range of Swiss-made skincare and body wellness solutions.
Luthra said the acquisition has been funded through a mix of debt and internal accruals.
Asked on the products positioning in the India’s $5.7 billion beauty and wellness segment, Luthra said the products would be in the masstige (mass+ prestige) category.
He said VLCC had reported a turnover of Rs 1,000 crore in fiscal year ending March 2013. “We hope to touch a turnover of Rs 1,500 crore”.
PE investor Everstone Capital has been an investor in VLCC since 2007. It has 15 per cent stake and their funds were used for scaling up its India wellness services business and VLCC’s personal care business. CLSA had exited VLCC through a management buyout.
Govt eases land requirement norms for SEZ to attract more investors
New Delhi: Government made the special economic zones attractive for the investors by notifying relaxations in the minimum area requirements and easing the exit clause for developers on Monday. In line with the announcement made by the commerce and industry minister in April, the amendment in SEZ rules will allow SEZ developers to add one product category on each additional 50 hectares of land.
There will be no minimum area required for IT SEZs, but only a minimum built up area of 1 lakh square meters for the top-7 cities, 50,000 square meters for the next 15 cities and 25,000 square meters for the rest of the cities. "The idea is to give incentives to push these IT SEZs out of the big cities and explore the less dense cities," said a commerce department official.
Multi-product SEZ's minimum land requirement has been cut to 500 hectares from 1,000 hectares. Single product SEZ's minimum land requirement has been cut to 50 hectares from 100 hectares. Multi-services SEZs will be treated on a par with single-product SEZs, with the minimum area being slashed to half from 100 hectare. This will allow multi-product SEZ developers with a minimum land requirement of 500 hectare to set up multi-services SEZ on an additional 50 hectare of land.
For SEZs to be set up exclusively for electronics hardware, agro-based food processing, biotechnology, handicrafts, the minimum area required will be 10 hectares.
Agro-based food processing SEZs are being introduced following demands by the agrarian states. SEZs allow duty-free imports or domestic procurement of goods and also provide 100% income tax exemption on export income for SEZ units for the first five years.
There will be no minimum area required for IT SEZs, but only a minimum built up area of 1 lakh square meters for the top-7 cities, 50,000 square meters for the next 15 cities and 25,000 square meters for the rest of the cities. "The idea is to give incentives to push these IT SEZs out of the big cities and explore the less dense cities," said a commerce department official.
Multi-product SEZ's minimum land requirement has been cut to 500 hectares from 1,000 hectares. Single product SEZ's minimum land requirement has been cut to 50 hectares from 100 hectares. Multi-services SEZs will be treated on a par with single-product SEZs, with the minimum area being slashed to half from 100 hectare. This will allow multi-product SEZ developers with a minimum land requirement of 500 hectare to set up multi-services SEZ on an additional 50 hectare of land.
For SEZs to be set up exclusively for electronics hardware, agro-based food processing, biotechnology, handicrafts, the minimum area required will be 10 hectares.
Agro-based food processing SEZs are being introduced following demands by the agrarian states. SEZs allow duty-free imports or domestic procurement of goods and also provide 100% income tax exemption on export income for SEZ units for the first five years.
India Inc’s Europe investments stood at $56 bn in 2003-12
Mumbai: Indian companies have invested €43 billion ($56 billion) across Europe between 2003-2012, of which €29 billion was mergers & acquisitions of 411 companies.
About €14 billion was invested across 511 projects during the decade, according to a report by the Europe India Chamber of Commerce (EICC), a body that promotes bilateral trade between the European Union and India.
The primary driver behind this investment is the rapid growth of Indian Multinational Corporations (MNC) which is seeking new markets for growth and diversifying risks, access to new technologies, R&D capabilities and leveraging their cash rich positions against low valuations in today’s financial market, it said in the report.
The report – ‘Indian Companies in the European Union: Reigniting Economic Growth’ – also said that Indian companies employ 1.34 lakh professionals in Europe, including 40,000 new jobs created by 511 greenfield investments.
The biggest pan-European employer is the Tata group, which counts about 80,000 employees across its 19 companies in Europe, including the IT giant Tata Consultancy Services.
“Indian Businesses have shown an extremely good track record in turning around troubled companies and that has made their investments even in existing European enterprises as both job protecting and job creating ones,” said Sunil Prasad, Secretary General of the EICC.
A dominant 47 per cent of the Indian greenfield investment and 63 per cent of the employment creation was accrued to the United Kingdom – with which India has strong historic, social and economic ties.
This was followed by Germany, the Netherlands, France, Belgium and Italy – which jointly accounted for 41 per cent of investment and 25 per cent of employment creation.
About €14 billion was invested across 511 projects during the decade, according to a report by the Europe India Chamber of Commerce (EICC), a body that promotes bilateral trade between the European Union and India.
The primary driver behind this investment is the rapid growth of Indian Multinational Corporations (MNC) which is seeking new markets for growth and diversifying risks, access to new technologies, R&D capabilities and leveraging their cash rich positions against low valuations in today’s financial market, it said in the report.
The report – ‘Indian Companies in the European Union: Reigniting Economic Growth’ – also said that Indian companies employ 1.34 lakh professionals in Europe, including 40,000 new jobs created by 511 greenfield investments.
The biggest pan-European employer is the Tata group, which counts about 80,000 employees across its 19 companies in Europe, including the IT giant Tata Consultancy Services.
“Indian Businesses have shown an extremely good track record in turning around troubled companies and that has made their investments even in existing European enterprises as both job protecting and job creating ones,” said Sunil Prasad, Secretary General of the EICC.
A dominant 47 per cent of the Indian greenfield investment and 63 per cent of the employment creation was accrued to the United Kingdom – with which India has strong historic, social and economic ties.
This was followed by Germany, the Netherlands, France, Belgium and Italy – which jointly accounted for 41 per cent of investment and 25 per cent of employment creation.
India's exports show double-digit uptick for first time in 2 years
New Delhi: India exported goods worth $25.83 billion in July, a growth of 11.64 per cent — the best in nearly two years — propelled by higher demand for pharmaceuticals, textiles, chemicals and petrochemicals, and a falling rupee.
A sharp fall in gold and silver imports and a modest decline in the oil bill led to a 6.12 per cent decrease in overall imports, to $38.10 billion in July. Gold and silver imports declined sharply to $2.97 billion during July compared to $4.47 billion in the corresponding month last year following the increase in import duties and other curbs imposed recently by the Government.
The trade deficit narrowed, to $12.26 billion during the month, compared to $17.47 billion during July 2012, bringing some relief to policy makers grappling with a high current account deficit and a weakening rupee.
The Government said it was hopeful the export incentives announced recently, including an increase in the interest rate subsidy for select sectors, would help to keep exports on the growth track for the rest of the fiscal.
UP FROM NEGATIVE ZONE
The relatively high growth in exports , following two months of decline and several months of tepid increases, pulled the overall export figure for the fiscal out of the negative zone. Exports posted a 1.72 per cent growth in the April-July period, to $98.29 billion.
Commerce Secretary S. R. Rao said during a press briefing on Monday that export growth should keep pace in the coming months as recent incentives start showing results. While the rupee exchange rate was also helping exporters, Rao said a stable currency helps exporters in their long-term contracts.
“Very few exportis on spot-price basis. What is important is to have a stable currency. The new incentives announced by the Minister should play out in the next couple of months. We expect exports to be doing slightly better,” he said.
Rao added that the export growth target for the year was 10 per cent, and the country should be doing better over the next few months. The Commerce Department's continued focus on new markets such as Latin America, Africa and South East Asia, would also help exporters, he said.
Exporters said continued support from the Government was essential. Although the US market was showing definite signs of improvement, demand from the EU was still unstable, they said.
“The pre- and post-shipment credit rates are hovering around 10 per cent, which is very high when compared to interest rates available to our competitors. The Government should re-introduce separate rates of fixed 7.5 per cent for the labour intensive sectors of clothing and textiles,” Apparel Export Promotion Council chief A. Sakthivel said.
“The Government should continue with its reform process and address the issue of availability of credit and transaction cost related matters with the same zeal so that the momentum continues,” FIEO President Rafeeque Ahmed said.
OTHER IMPORTS TOO DOWN
Apart from gold and silver, other products that witnessed an import decline included project goods, vegetable oil, and precious and semi-precious stones.
Oil imports during July were 8 per cent lower at $13.816 billion, while non-oil imports, at $25.39 billion, were 5.26 per cent lower than the same month last year.
In the April-July period, imports posted a growth of 2.82 per cent to $160.73 billion while the trade deficit stood at $62.44 billion, compared to $59.69 billion last year.
Exports in 2012-13 fell 1.6 per cent, to $300.6 billion, as a slowdown in the global economy reduced demand, while imports increased by a marginal 0.44 per cent to $491.48 billion from $489.31 billion.
A sharp fall in gold and silver imports and a modest decline in the oil bill led to a 6.12 per cent decrease in overall imports, to $38.10 billion in July. Gold and silver imports declined sharply to $2.97 billion during July compared to $4.47 billion in the corresponding month last year following the increase in import duties and other curbs imposed recently by the Government.
The trade deficit narrowed, to $12.26 billion during the month, compared to $17.47 billion during July 2012, bringing some relief to policy makers grappling with a high current account deficit and a weakening rupee.
The Government said it was hopeful the export incentives announced recently, including an increase in the interest rate subsidy for select sectors, would help to keep exports on the growth track for the rest of the fiscal.
UP FROM NEGATIVE ZONE
The relatively high growth in exports , following two months of decline and several months of tepid increases, pulled the overall export figure for the fiscal out of the negative zone. Exports posted a 1.72 per cent growth in the April-July period, to $98.29 billion.
Commerce Secretary S. R. Rao said during a press briefing on Monday that export growth should keep pace in the coming months as recent incentives start showing results. While the rupee exchange rate was also helping exporters, Rao said a stable currency helps exporters in their long-term contracts.
“Very few exportis on spot-price basis. What is important is to have a stable currency. The new incentives announced by the Minister should play out in the next couple of months. We expect exports to be doing slightly better,” he said.
Rao added that the export growth target for the year was 10 per cent, and the country should be doing better over the next few months. The Commerce Department's continued focus on new markets such as Latin America, Africa and South East Asia, would also help exporters, he said.
Exporters said continued support from the Government was essential. Although the US market was showing definite signs of improvement, demand from the EU was still unstable, they said.
“The pre- and post-shipment credit rates are hovering around 10 per cent, which is very high when compared to interest rates available to our competitors. The Government should re-introduce separate rates of fixed 7.5 per cent for the labour intensive sectors of clothing and textiles,” Apparel Export Promotion Council chief A. Sakthivel said.
“The Government should continue with its reform process and address the issue of availability of credit and transaction cost related matters with the same zeal so that the momentum continues,” FIEO President Rafeeque Ahmed said.
OTHER IMPORTS TOO DOWN
Apart from gold and silver, other products that witnessed an import decline included project goods, vegetable oil, and precious and semi-precious stones.
Oil imports during July were 8 per cent lower at $13.816 billion, while non-oil imports, at $25.39 billion, were 5.26 per cent lower than the same month last year.
In the April-July period, imports posted a growth of 2.82 per cent to $160.73 billion while the trade deficit stood at $62.44 billion, compared to $59.69 billion last year.
Exports in 2012-13 fell 1.6 per cent, to $300.6 billion, as a slowdown in the global economy reduced demand, while imports increased by a marginal 0.44 per cent to $491.48 billion from $489.31 billion.
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