Jan. 21 – India, the world’s second-largest rice producer cut export taxes and reduced the minimum export price of basmati rice in order to boost commodity exports and protect farmers. Commerce and Industry minister Kamal Nath announced on Tuesday that the US$162 a ton tax on exports of basmati rice would be slashed. Minimum export prices of the commodity will also reduce from US$1,200 a ton to US$1,100 a ton. The changes come during a expectations of a bumper harvest.
Basmati exports fell by 12 percent to 760,000 tons in the first 10 months of the fiscal year. The move to cut taxes and prices comes after lobbying from beleaguered Basmati exporters who currently owe around US$1-1.2 billion to paddy farmers. The move is expected to boost sagging Indian Basmati sales worldwide compared to Pakistani Basmati and restore the brand value in the short and long term, the Economic Times said.
Jan. 20 – Inflation rates which have fallen by more than 50 percent since October last year have boosted the government exchequer encouraging the state to reveal a third stimulus package.
On Monday, commerce and industry minister Kamal Nath announced that the government was likely to introduce a third stimulus package in February. "The government will continue to inject adequate funds and will continuously provide stimulus to the domestic demand-driven economy,'' the minister told the Times of India.
Jan. 19 – Prime Minister Manmohan Singh said that fiscal deficit will continue to deepen in the next fiscal year as India continues to pump in money to stimulate consumption. “We will have to tolerate a high fiscal deficit for the next year to accommodate expenditure needed to stimulate the economy,” he told the Wall Street Journal. India is expected to miss its fiscal deficit target of 2.5 percent for this year. The fiscal year runs from April to March.
The government has already announced plans to spend Rs. 200 billion (US$4.1 billion) primirarily to boost the country’s ailing infrastructure sector. Key interest rates have also been slashed significantly. The Reserve bank of India cut the repurchase rate by 3.50 percentage points, the cash reserve ration by 4.0 percentage points and the reverse repurchase rate by 2 percentage points since October. Inflation which was at a 16 year high of 12.91 percent last August has also cooled significantly to 5.24 percent as of the first week of January.
Jan. 16 – In order to ensure the safty and quality of food and drug products being exported from India to the United States, the U.S. Food and Drug Administration (FDA) recently opened two offices in New Delhi and Mumbai.
The move is part of the FDA's Beyond Our Borders Initiative, which will place 35 personnel in 14 locations around the world. The FDA has already opened offices in China and further plans to start offices in Mexico, South America, Europe and the Middle East.
The move into India by the FDA is two pronged – a US government audit last year said the FDA’s infrastructure was inadequate to inspect factories that export drugs to the U.S..To compound their problem further, India is also the fourth largest exporter by volume of drugs and biologics, especially generics, to the US. The Indian pharmaceutical industry had exported drugs worth about US$7.4 billion (Rs 363.6 billion) last year.
Jan. 15 – Intel capital and Clifford Chance the world's biggest law firm by revenue both announced investments into India. While Intel capital said they would be pumping in US$23 million into three unlisted firms, Clifford Chance announced a tie-up with AZB, one of the country's top law firms.
Investing money from its US$250 million India technology fund, the venture capital arm of the Santa Clara-based chipmaker Intel Corp said it will pour money into One97 Communications a telecom-managed value added services provider, IndiaMART.com an online marketplace and a vocational education institute Global Talent Track. According to the company Intel Capital has invested into 60 Indian companies till date.
Jan. 14 – In a bid to revive the Indian Information Technology sector due to the lack of foreign funds pouring in and the Satyam Computers scam case, the Indian government has decided to amend the income tax law relating to tax exemption for units operating out of special economic zones (SEZs). The move which will provide a boost to the bottomlines of large Indian IT companies such as Infosys, Wipro and TCS seeks to provide a 100 percent exemption on profits to SEZs set up by IT majors like Infosys, Wipro and TCS under the parent companies for the first five years.
“We have finally been able to convince the finance ministry that Section 10AA(7) of the I-T Act is an anomaly. All SEZs should be entitled to 100 percent tax exemption on profits. The relevant notification will be issued by the Central Board of Direct Taxes shortly,” a commerce department official told Economic Times.
Jan 13 – Tighter credit, a weak job market and a slowing economy pulled growth in India’s passenger car sales down to two percent or 1.2 million units in 2008.
Car makers across the board were affected by the downturn as sales dropped seven percent in December itself. Maruti Suzuki India Ltd., the nation’s biggest carmaker, suffered a 10 percent drop in sales in December while Tata Motors Ltd.’s sales fell 47 percent. Honda Motor Co has also decided to delay opening its second factory in Asia’s fourth-largest automotive market.
Jan 12 – Buckling under government pressure, 55,000 officers of 14 protesting oil companies in India called off their strike on Friday evening and resumed work. The three day nation wide strike by mid level officers who were demanding higher pay, led to unprecedented fuel shortages, and a 10-20 percent increase in prices of fruits and vegetables across India.