FTA with EU: India to take up ‘stock-taking exercise’

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FTA with EU: India to take up ‘stock-taking exercise’ for a free trade agreement with the EU later this month, after a gap of three years, and pitch for greater market access in services..

India will undertake a “stock-taking exercise” for a free trade agreement with the EU later this month, after a gap of three years, and pitch for greater market access in services once the stage is set for further negotiations, a senior commerce ministry official said.

Before engaging in serious formal talks on the EU-India Bilateral Trade and Investment Agreement (BTIA), a “stock-taking exercise” will be undertaken, as some contours of the earlier negotiations have to be altered, keeping in view the changes that have taken place since the talks were stuck in 2013, Arvind Mehta, additional secretary in the commerce ministry, told FE.

For instance, India has further liberalised many sectors for foreign investments, including some of the areas where the EU had interests, over the past three years. For instance, the FDI cap in insurance has been raised to 49% from 26% and 100% FDI is allowed in telecoms. In private sector banking, full fungibility of foreign investment is now permitted and accordingly FIIs/FPIs/QFIs can now invest up to a sectoral limit of 74%, with certain conditions.

While India feels the flexibilities shown by it in further opening up to foreign investments should be considered positively by the EU, it also expects some reciprocal measures by the 28-member bloc to address its concerns, especially on data privacy and market access in the services sector. However, there will be no binding commitments until India’s core concerns are addressed suitably, Mehta said. The BTIA negotiations cover boosting goods and services trade as well as investment.

India seeks a data secure status because the high compliance cost with EU’s data protection laws will hit small and medium enterprises (SMEs) of India and make them un-competitive.

Mehta said India will be betting for a trade facilitation agreement (TFA) in services at the World Trade Organisation — similar to the TFA in goods — that would focus on liberalised visa regime, long term visas for business community and freer movement of professionals for the greater benefit of both India and the world. India will pursue it vigorously in negotiations for the BTIA as well as Regional Comprehensive Economic Partnership. RCEP is a proposed FTA between the Asean members and the six states with which it has forged FTAs, including India.

Gr3

India is keen on services, as they account for over a half of its GDP. The EU is India’s largest trade partner, accounting for close to 15% of trade in both goods and services. It is a major market for Indian textiles, garments, pharmaceuticals, gems and jewellery and IT. The EU is also the largest source of FDI inflows to India, accounting for over one-fourth of the total. However, India ranks only ninth among the EU’s top trade partners, making up for just about 2% of its total merchandise goods in 2014.

BTIA talks were to be revived last year, but the EU’s surprise ban on 700 products of GVK shocked India, which then called off the negotiations. Prior to that, the negotiations centred around India’s demand for.

The EU is interested in further liberalisation of FDI in multi-brand retail and insurance, and closed sectors like accountancy and legal services. The underutilised private banking space in India is another draw. India’s intellectual property regime (IPR), which is unlikely to allow ever-greening of patents, remains a concern for European pharma majors. Moreover, the EU has been seeking a cut in the high import duties on assembled vehicles and wines and spirits. In case of assembled vehicles, the import duties remain in the range of 60-75%.

Source: http://www.financialexpress.com/article/economy/fta-with-eu-india-to-take-up-stock-taking-exercise/191733/

Foreign investors find Indian realty sector attractive again after 5 years

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At least Rs 14,680 crore of funds have been raised in sector so far in current investment cycle.

Foreign investors’ interest in Indian real estate is on the rise after almost five years, India-specific fundraisings indicate.

The cycle started gaining momentum just before the 2014 general elections and at least $2.2 billion (Rs 14,680 crore) of funds have been raised so far in the current investment cycle, indicating an improvement in foreign investors’ confidence in Indian real estate, said consultancy firm JLL India. “During the pre-GFC (global financial crisis) phase, 82% of funds got raised in US dollar.

This reduced to 57% in post-GFC phase when micro-market understanding was required more than banking on the macro-economy,” said Shobit Agarwal, managing director of capital markets at JLL India. “Interestingly, the contribution, 2014-onwards, has increased considerably to 70% – hinting that the positivity is here to stay for some time.”

Recent easing of foreign direct investments rules is expected to bring in more capital into the property sector. PE funds are also looking to leverage on this rising interest among foreign investors.

“We believe this is an opportune time to invest in Indian real estate, with rigorous risk management and strong asset management.

Offshore funds are showing interest in Indian real estate and there is lot of interest from FDI funds back in Indian real estate,” said Rubi Arya, chief executive of Milestone Capital Advisors. “We are planning to leverage further on our structured debt and commercial platform to raise money from offshore funds.”

According to Arya, FDI funds are looking to invest in pre-leased commercial assets, create strategic-level partnerships with reputed developers mainly through equity deals and make structured debt investments in residential projects.

India-specific cumulative fundraising attained its peak in the pre-GFC period. During this period between 2005 and 2008, there were 50 such funds that raised $16 billion in total. However, post-GFC, only 29 funds got raised in five years, with cumulative fundraising of $3.9 billion, said the JLL India report.

Not only has the volume of investment increased, but there has also been an increase in the average investment size from $134 million to $184 million in the current cycle that started in 2014.

Source: http://economictimes.indiatimes.com/articleshow/50476154.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst

SEBI puts in place new form for ASBA

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With a checklist regime kicking in for initial public offerings (IPOs), capital markets regulator the Securities and Exchange Board of India (SEBI), has put in place a new form for ASBA (Application Supported by Blocked Amount) facility.

ASBA facility has become mandatory for all categories of investors applying for a public issue for making payment from Friday. The facility allows the bid amount to remain in the applicants account till the time the shares are finally allotted.

In a circular, SEBI said that the application form for ASBA would be printed in a booklet form of A4 size paper.

Besides, SEBI has prescribed white colour form for Resident Indian, NRIs applying on a non repatriation basis and blue colour form for NRIs, Foreign Venture Capital Investor, Foreign Institutional Investors, their Sub-Accounts (other than sub-accounts which are foreign corporates or foreign individuals bidding under the QIB Portion), on a repatriation basis.

It further said that top of the application form will have a coloured identifier strap incorporating the name of the issuer, ISIN (An International Securities Identification Number) and type of form (Repatriation, Non- Repatriation). Besides, the main application should have information about eight digit application number, PAN number, bidders depository account details, investor category, among others.

A confirmation by the applicant (on behalf of joint bidders) that he/she has read, understood and agrees to such confirmations is also required.

The regulator said that application should also highlight about different category of investors (retail, non-institutional and QIBs), number of equity shares (reservation if applicable), percentage of issue available for allotment, basis of allocation in case of over-subscription, mode of allotment and terms of payment.

The new circular will be applicable for all public issues opening on or after January 1, 2016, SEBI said.

The regulator, in August, had made ASBA facility mandatory for all categories of investors applying for a public issue.

In order to enhance the points for submission of applications, SEBI had also allowed Registrar and Share Transfer Agents (RTAs) and Depository Participants (DPs) to accept application forms (both physical as well as online) and make bids on the stock exchange platform.

This will be over and above the stock brokers and banks where such facilities are presently available. The number of bank branches with ASBA facility has now increased to about 95,500, from 9,800 when this facility was introduced.

Source: http://www.thehindu.com/business/Industry/new-form-for-asba-in-place/article8055065.ece

Czech Republic to help India modernise heavy industry

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India has signed a protocol with Czech Republic to promote bilateral cooperation in the field of heavy industry, especially in industrial cooperation and facilities construction, the Union Cabinet was apprised today.

The protocol includes modernisation of the existing facilities in India by the Czech companies, including modernisation of three plants of Heavy Engineering Corporation and a central public sector enterprise (CPSE) under the Department of Heavy Industries at Ranchi, set up with Czech support in early 1960’s.

“The aim of the protocol is to promote bilateral cooperation…in the field of heavy industry on the principle of mutual convenience and benefit, in accordance with the laws valid on the territories of the states of the Parties and their obligations resulting from other international agreements,” an official statement said.

Source:  http://economictimes.indiatimes.com/articleshow/50467014.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst

US, India to boost defence ties, fast-track co-production

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India and the US have ramped up their defence and strategic ties by agreeing to fast-track co-production ventures as their defence ministers held wide-ranging talks on regional and global security issues besides discussing the growing menace of terrorism.

Defence Minister Manohar Parrikar and his American counterpart Ashton Carter held one-and-a-half hour long closed door discussions yesterday during which the two leaders “reviewed the cooperation between our armed forces which have grown stronger”.

Parrikar said India and US share a strategic partnership that reflects their shared values and interests. Defence and security cooperation is a vital component of this partnership, he said.

Describing the Indo-US defence partnership as an anchor of global security, Carter said the Obama Administration is ready to further strengthen this relationship.

“The Indo-Asia-Pacific is one of the most consequential parts of the world for America’s future. And we welcome India’s rise as a security partner in a region where half of humanity lives, and half of the world’s economic activity takes place,” Carter told reporters at a joint news conference with the visiting Indian Defence Minister.

Carter informed Parrikar that the US has updated its policy on gas-turbine engine technology transfer to India to expand cooperation in production and design of sensitive jet engine components.

As a result of this policy update, Carter said that the US will be able to expand cooperation in production and design of sensitive jet engine components.

Carter and Parrikar look forward to US companies working with their Indian counterparts to submit transfer requests that will benefit from this updated policy, said a joint statement.

During the meeting, the two leaders discussed ways and means to move the ambitious Defence Technology and Trade Initiative (DTTI) forward.

Expressing satisfaction with DTTI progress to date, the two committed themselves to identifying additional projects for possible co-development and co-production of high technology items that meet the transformational intent of DTTI, the joint statement said.

This was the third meeting between the two leaders in less than six months.

Yesterday the two leaders stayed together for nine hours, including four hours abroad USS Eisenhower, a nuclear-powered aircraft carrier.

“Through our meetings today and expanded cooperation in the days to come, the US-India defence partnership will become an anchor of global security, as together, we work towards a common future, a common future between the United States and India that is destined,” Carter said.
“This is a relationship that will be critical in strengthening the Indo-Asia-Pacific security architecture, so that everyone there can continue to rise and prosper,” said the US Defence Secretary.

Carter said he and Parrikar discussed the progress that has been made towards cooperation on jet engines and aircraft carrier design and construction as well as opportunities to collaborate on additional projects of interest, which will also further Prime Minister Narendra Modi’s ‘Make in India’ policy.

Parrikar said their desire is to further collaborate in the higher-end technologies within the framework of DTTI.

“The assurance I have, and I am confident of that India is placed at a level which would ensure that red tapism is cut. I think this is the biggest take home one can get. We have got a very clear promise and we have been experiencing it that our issues are fast-tracked,” he told reporters.

Parrikar said some US companies have shown interest in setting up manufacturing base in India for fighter jets for which India has asked the Pentagon if there is any advance clearance system from their side.

“They (US) are very positive on that,” the Minister said adding that the US side has indicated that pre-approval could be considered on all such proposals coming from companies like Boeing and Lockheed.

As many as 17 new ideas for cooperation under the DTTI are also being discussed.

“We have identified many new areas for cooperative research and development, and both sides are committed to continue to exchange ideas in the search for additional projects for possible co-development and co-production that meet the spirit of DTTI,” he said.

Both sides said that progress has been made on the Defence Technology and Trade Initiative (DTTI) pathfinder projects which include the Raven mini Unmanned Aerial Vehicles (UAVs), “roll-on, roll-off” mission modules for C-130J aircraft, Mobile Electric Hybrid Power Sources (MEHPS) and Next Generation Protective Ensemble (NGPE) for soldiers.

The two leaders discussed range of regional security issues, including the threat posed by the Islamic State and entities such as Al-Qaeda and its affiliates, Lashkar-e-Taiba, Jaish-e-Mohammad, D Company, the Haqqani Network and other regional terror groups, according the joint statement.

Parrikar said in all his meetings in the US, terrorism was one of the key issues of discussions with American leadership.

“The issue of terrorism was a key topic discussion in all engagements Terrorism has become a global phenomenon and requires a comprehensive response. Terrorists of all shades and affiliations must be countered without any differentiation,” he told reporters.

Carter said terrorism of all kinds in South Asia has been and remains a serious problem. India, he said, has been attacked and is continuously threatened with attack from terrorists. However, India has ruled out any enhancement of its role

in the Middle East in view of the emergence of deadly ISIS in Syria and Libya.

Parrikar said there has been no change in India’s policy on participating only in UN approved peacekeeping missions.

But India is and has been sharing intelligence with the US on issues related to terrorism, he said.

Source: http://www.business-standard.com/article/pti-stories/us-india-to-boost-defence-ties-fast-track-co-production-115121100316_1.html

SEBI to allow soon mutual funds sale on e-commerce platforms

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SEBI Chairman, U K Sinha said sale of mutual funds on e-commerce platforms could become effective in a month, a move which will help deepen the respective market. He said sale of mutual funds on e-commerce platforms could become effective in a month, a move which will help deepen the respective market. The markets regulator has set up a committee under Infosys co-founder Nandan Nilekani to deliberate ways in which electronic means can be used better for sale of mutual funds (MF).

The committee is also working to make sale of mutual funds possible on e-commerce platforms, the SEBI Chairman said. “My guess is that in the next one month, this will be done (permitting sale of mutual funds on e-commerce websites),” he said while speaking to media on the sidelines of the launch of Bandhan Bank’s 600th branch.

According to Sinha, mutual fund growth in the country has been “very good” and that an ever-growing number of consumers flock to e-commerce websites for shopping. “However, electronic means are not used as well as they should have been and the growth is not happening using such means. We have some experts deliberating on how the electronic means can be used better,” Sinha said.

Targeting the young and educated people with high salaries and disposable income, Sinha said, the move would help them invest easily. “If these people are doing e-shopping, and they know financial markets, then they should also invest in MFs and that is the direction in which we are thinking,” the SEBI Chairman said.

On listing of start-ups, Sinha said it will take its own time. “Important thing to note is that the regulations are in place. If there is a company under pressure, there is alternative before the company to raise(funds),” Sinha noted, adding that the markets regulator was in dialogue with start-ups related to the issue.

Sinha also noted that some start-ups have raised issues concerning taxation but the same is beyond the jurisdiction of SEBI. On initial public offers (IPOs), the SEBI chief said that the pipeline by companies for the coming year is “very healthy”. “You might have noticed that the time taken by SEBI in providing its observations, has come down substantially. Earlier, matters went up to one year, now it is three months on an average for IPOs.”

Sinha noted that SEBI had allowed Rs 60,000 crore worth of IPOs in 2013-14, but the promoters had decided to withdraw the offers implying lack of desire to make investments. “In 2014-15 we saw around Rs 9,500 crore worth of IPOs and this year already Rs 18,000 crore has been garnered through IPOs, while the pipeline going forward is very healthy”, Sinha said.

Source: http://yourstory.com/2015/12/sebi-mutual-funds-e-commerce/

FDI flow in to India grows by 35% in last 17 months

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Foreign direct investment into India has grown by 35 per cent in the last 17 months even as across the world it has fallen by 16 per cent, a top Union government official said today.

“FDI in India has grown by 35 per cent at a point of time when FDI across the world has fallen by 16 per cent,” Department of Industrial Policy and Promotion Secretary Amitabh Kant told reporters here.

He said ‘Make in India’ was launched in end-September last year and since then FDI has grown by 40 per cent as compared to the previous year, “but if you look at the last seventeen months of this government FDI has grown by 35 per cent as compared to the previous seventeen months.”

FDI has come into manufacturing, consumer goods, logistics and food processing sectors, he added.

Kant was today given additional charge of the post of CEO, NITI Aayog, consequent to the completion of tenure of Sindhushree Khullar.

Asked about the additional charge, he said “…I have not yet taken over.”

On startups, Kant said, “there is a huge energy, vitality and dynamism amongst startups in India and we need to carry this forward from digital startups to manufacturing startups, to startups in agriculture and social innovation areas, and from tier one to tier two and three cities.”

“The Prime Minister will be launching the Startup India movement on January 16 in New Delhi, we are inviting all the startups from Bengaluru to participate in this.”

“On that day we will link up all the IITs, IIMs, NITs and central universities for viewing of the startup India discussions from morning to evening,” he added.

He also said to provide a major impetus to the sector the Prime Minister will unveil the action plan for startups on that day.

On the economy, Kant said India is growing at 7.4 per cent and “it is an oasis of growth in the midst of a very balanced economic landscape across the world.”

“Challenge for India is to grow at 9-10 per cent over a long period of time over the next three decades or more,” he said.

“If India has to grow at 9-10 per cent India must become a very easy and simple place for people to do business….; It has to grow rapidly in manufacturing sector,” he added.

While speaking about the Make in India initiative of the government, Kant said Make in India week is being organised from February 13 to 18 in Mumbai, where about hundred countries are participating from across the world. Also, Asia business forum will be held during this event.

Stating that government is taking a series of measures to make India a very easy and a very simple place to do business, he said, “We have created an e-biz platform with Infosys where we have put twenty government services online with one single point of payment….”

“Our objective is that in the long run there should be only one identification number for the businessmen. The company identification, the labour identification and others should all get merged into one identification and there should be just one single form…..” he added.

Speaking about competition among states in ease of doing business, Kant said last year we had ranked the states on hundred points, this year we are doing it on 340 points.

“We expect Karnataka to do extremely well this year and take action on all 340 points and prove its position; Karnataka must come in top three,” he added.

 

Source: http://www.business-standard.com/article/pti-stories/fdi-flow-grows-by-35-in-last-17-months-official-115122900639_1.html