Xiaomi, Foxconn to set up two more units in India

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Chinese smartphone maker Xiaomi today said it is looking to set up two more manufacturing facilities in India through its Taiwanese contract manufacturer Foxconn Technology Group.

Manu Jain, Xiaomi’s India Chief, said they are in talks with various state governments for finalising the land and other issues for the plants.

In August last year, Xiaomi, together with Foxconn, started assembling phones locally in Chittoor district of Andhra Pradesh.

“We have not finalised the locations for the facility yet. We are talking to multiple governments to see where we should be setting up (the plants). The factories are owned and operated by Foxconn, but dedicatedly (make production) for us. It is not a joint venture. We have some sort of financial arrangement between us,” Jain said.

Jain said the company may also launch air purifiers in India before the beginning of winter season.

“We think that it is a category which is about to take off. We are trying to bring that this year. The perfect time to launch is before winter, because that is when fog combines with smoke and becomes smog,” he said.

Xiaomi, which presently registers 90 per cent of its sales from online channel in India, is planning to double offline presence over the next few months.

Xiaomi recently launched Redmi 3S and Redmi 3S Prime in the country priced at Rs 6,999 and Rs 8,999, respectively. The phones will be initially available at Mi.com and Flipkart. The handset maker sells over one million phones a quarter in the country.

Source: http://www.newindianexpress.com/business/news/Xiaomi-Foxconn-to-set-up-two-more-units-in-India/2016/08/13/article3576806.ece

Forex reserves hit life-time high at $365.49 bn

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Country’s foreign exchange reserves rose by USD 2.81 billion to reach a life-time high of USD 365.49 billion in the week to July 29, helped by rise in foreign currency assets, the Reserve Bank said today.

In the previous week, the reserves had dropped by USD 664 million to USD 362.69 billion.

Foreign currency assets (FCAs), a major component of the overall reserves, rose USD 2.79 billion to USD 341.04 billion in the reporting week, RBI data showed.

FCAs, expressed in dollar terms, include the effect of appreciation/depreciation of non-US currencies such as euro, pound and yen held in the reserves.

Gold reserves remained unchanged at USD 20.58 billion.

The country’s special drawing rights with International Monetary Fund increased by USD 8.5 million to USD 1.48 billion while the reserve position rose by USD 13.6 million to USD 2.39 billion, RBI said.

Source: http://www.financialexpress.com/industry/banking-finance/forex-reserves-hit-life-time-high-at-365-49-bn/339688/

CBDT signs bilateral APAs with Japanese trading firm arm

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The Central Board of Direct Taxes has signed bilateral advance pricing agreements with Indian arm of a Japanese trading company, a move that will help bring down transfer pricing disputes relating to intra-group transactions.

“The Central Board of Direct Taxes (CBDT) entered into a bilateral advance pricing agreement (APA) on August 2, 2016, with Indian subsidiary of a Japanese trading company. This is the first bilateral advance pricing agreement with a Japanese company having a rollback provision in it,” a finance ministry statement said today.
Overall, it is fourth bilateral APA signed by CBDT.

Signing of the pact is an important step towards ascertaining certainty in transfer pricing matters of MNC cases and dispute resolution, the statement noted.

The APA scheme was introduced in the Income-Tax Act in 2012 and the rollback provision in 2014.

The scheme intends to provide certainty to taxpayers in the domain of transfer pricing by specifying methods of pricing and setting the prices of international transactions in advance.

Its progress strengthens the government’s mission of fostering a non-adversarial tax regime, the statement said.

CBDT expects more APAs to be concluded and signed in the near future.

An APA, usually for multiple years, is signed between a taxpayer and the tax authority (CBDT in India) on an appropriate transfer pricing methodology for determining the price and ensuing taxes on intra-group overseas transactions.

Source: http://www.business-standard.com/article/pti-stories/cbdt-signs-bilateral-apas-with-japanese-trading-firm-arm-116080400879_1.html

FDI inflows rise 7% to $10.55 bn in Q1

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Foreign direct investment (FDI) inflows grew 7 per cent to $10.55 billion during the first quarter against $9.88 billion in January-March 2015.

According to the Department of Industrial Policy and Promotion (DIPP) data, the sectors, which attracted maximum FDI during the period, include computer hardware and software, services, telecommunications, power, pharmaceuticals and trading business.

In terms of countries, India received maximum overseas inflows from the US, Singapore, Mauritius, Japan and the Netherlands.

An official said with the government further liberalising foreign investment policies for services sector in the Budget, more inflows would come.

The government has recently relaxed FDI norms in about eight sectors, including defence, civil aviation, food processing, pharmaceuticals and private security agencies.

Foreign investment is considered crucial for India, which needs around $1 trillion for overhauling infrastructure sector such as ports, airports and highways to boost growth.

A strong inflow of foreign investments will help improve the country’s balance of payments situation and strengthen the rupee value against other global currencies, especially the US dollar.

 

Source: http://www.thehindubusinessline.com/economy/fdi-inflows-rise-7-to-1055-bn-in-q1/article8916909.ece

Foreign capital flow into EMs climbs to $25 billion

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Emerging markets (EMs) have witnessed an inflow of $25 billion from foreign portfolio investors in this month so far, says a report.

Equity flows were the dominant driver this month, with an estimated $14.6 billion in inflows, while debt flows were more moderate at $10.2 billion, according to the report by the Institute of International Finance.
Inflows were dominated by EM Asia, followed by Latin America, while EM Europe and Africa, West Asia saw modest outflows.

“Regionally, EM Asia saw total inflows of $19.1 billion, followed by Latin America with inflows of $8.7 billion, while there were modest outflows from EM Europe and AFME,” the report noted.

Portfolio flows to EMs rose to $24.8 billion in July from $13.3 billion in the preceding month. Prior to that, EMs saw an outflow of $12.3 billion in May.

“In fact, July marked only the second month over the past year where portfolio flows were above their long-term average of $22 billion,” it added.

The recovery in flows during the past few months follows a period of exceptional weakness in EM portfolio flows that began with China’s mini-devaluation almost a year ago and saw cumulative outflows of $81 billion from EMs, compared to $96 billion during the global financial crisis.

Source: http://www.business-standard.com/article/markets/foreign-capital-flow-into-ems-climbs-to-25-billion-116072800946_1.html

Cairn India to invest in existing projects

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Cairn India, the petroleum exploration arm of London-listed Vedanta Resources, plans to continue investing in its existing projects to enhance domestic hydrocarbon production despite tough operating conditions and uncertain economic environment mainly because of strong demand outlook for the commodities.

Based on the International Energy Agency’s World Energy Outlook, by the year 2040, 91% of India’s demand for oil and 49% demand for gas would be met by imports. This high dependence would entail significant cost to the economy, it said.

“We will continue to invest in our existing assets to increase production and maximize economic recovery. I remain confident that your company will play a pivotal role in India’s quest for energy security,” said Cairn India’s FY16 annual report quoting chairman Navin Agarwal.

The key enablers for Cairn India’s growth would be strength in ‘execution’, technology along with a strong balance sheet, he added.

Cairn India’s Rajasthan block has significant national importance as it has considerably helped reduce country’s crude oil imports.

The company operates over 27% of domestic crude oil production. During the year, Cairn India’s operations helped reduce India’s import bill by over Rs 21,000 crore and its gross contribution to the government exchequer was over Rs 10,000 crore.

Cairn India’s success, over the years, has been reinforced by innovative application of technology. This has enabled early adoption of technology including enhanced oil recovery in the Rajasthan field.

One of the world’s largest polymer flood projects at Mangala, continued to yield positive results and contributed an average of 14,000 barrels of oil equivalent per day, during FY2016, said the report.

During the year, amid low oil price environment, Cairn India has focussed on optimising costs, building talent and capabilities from within, and keeping employees focussed on goals and priorities of the organisation, said the report. This enabled the company to generate free cash flow over $637 million, it said.

Despite steep drop in crude oil prices, Cairn India adhered to its stated dividend policy with a pay-out amounts to 31.6% of the company’s annual consolidated normalized net profit, informed Agarwal.

Regarding merger of the oil company with Vedanta, Agarwal said Cairn India continues to work towards completion of merger which would generate value for the shareholders and de-risk the company. Upon the merger, Cairn India will get access to Vedanta’s tier-one metal and mining assets, which are well-invested, low cost and have a long life.

On Thursday, Cairn India reported a 28 per cent fall in its June quarter net profit at Rs 360 crore against Rs 501 crore in the corresponding period a year earlier. Revenues dipped to Rs 1,885 crore from Rs 2,627 crore due to slump in crude oil prices.

Source: http://www.business-standard.com/article/companies/cairn-india-to-invest-in-existing-projects-116072100828_1.html

Central Board of Direct Taxes (CBDT) signs seven Unilateral Advance Pricing Agreements (APAs)

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The Central Board of Direct Taxes (CBDT) entered into seven (7) Unilateral Advance Pricing Agreements (APAs) today, i.e., 18th July, 2016, with Indian taxpayers. Some of these agreements also have a Rollback” provision in them.

 

The APA Scheme was introduced in the Income-tax Act in 2012 and the Rollback” provisions were introduced in 2014. The scheme endeavours to provide certainty to taxpayers in the domain of transfer pricing by specifying the methods of pricing and setting the prices of international transactions in advance. Since its inception, the APA scheme has attracted tremendous interest and that has resulted in more than 700 applications (both unilateral and bilateral) having been filed in just four years.

 

The 7 APAs signed today pertain to various sectors of the economy like banking, Information Technology and Automotives. The international transactions covered in these agreements include software development Services, IT enabled Services (BPOs), Engineering Design Services and Administrative & Business Support Services.

 

With todays signings, the total number of APAs entered into by the CBDT has reached 77. This includes 3 bilateral APAs and 74 Unilateral APAs. In the current financial year, a total of 13 Unilateral APAs have been entered into so far.

 

The progress of the APA Scheme strengthens the Governments mission of fostering a non-adversarial tax regime. The CBDT expects more APAs to be concluded and signed in the near future.

Source: http://www.business-standard.com/article/government-press-release/central-board-of-direct-taxes-cbdt-signs-seven-unilateral-advance-pricing-116071800966_1.html