Markets

New Issue of Asia Briefing: An Introduction to Development Zones Across Asia

May 10 – The new issue of Asia Briefing Magazine, titled An Introduction to Development Zones Across Asia, is out now and will be temporarily available as a complimentary PDF download on the Asia Briefing Bookstore throughout the months of May and June.

The use of development zones in their different guises has been an effective model essentially brought to prominence by China over the past 25 years to help both foreign investors and domestic companies meet in a relationship that provides tax advantages to both. Development zones typically permit the foreign investor to bring component parts into a country for assembly without having to pay import duties. Investors may then add in locally-sourced components, assemble the final product, and warehouse it all duty free before then having the option of exporting the finished product (collecting some VAT rebates on the locally sourced portion) or entering the domestic market with a product assembled at local labor costs. Continue reading →

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India to Return to 7-8% Growth By 2015

Apr. 29 – In several recent statements both to the press, international investors, and the Indian parliament, India’s President, Prime Minister, and Finance Minister have stated that they are confident in returning to seven or eight percent annual growth as early as 2015. They have also stressed that foreign direct investment (FDI) is critical in this regard, signaling further facilitation in the times to come.

“We are confident that we will return to 7-8 percent growth bracket in the next two to three years,” said President Pranab Mukherjee on Tuesday, speaking to the IFTDO’s World Conference and Exhibition in New Delhi. “We need to revitalize investment in the country for this purpose. We welcome foreign investment which has a critical role in bringing in modern technology and globalizing our economy.”

Prime Minister Manmohan Singh recently expressed similar sentiments to the Indian Parliament. Continue reading →

Posted in Business, Markets | Tagged India, India Growth | Leave a comment

New Issue of Asia Briefing: Expanding Your China Business to India and Vietnam

Mar. 6 – The second issue of our new issue Asia Briefing Magazine, titled Expanding Your China Business to India and Vietnam, is out now and will be temporarily available as a complimentary PDF download on the Asia Briefing Bookstore throughout the months of March and April.

As operational costs in China continue to rise, an increasing number of companies are looking at either relocating or moving part of their China-based facilities to lower cost markets elsewhere in emerging Asia. This makes sense since China itself is trying to move away from an export-driven economy and into a consumption-driven growth model.

Meanwhile, countries such as Vietnam are actively courting these export businesses through tax incentives and preferential policies similar to those that helped China get to where it is today. India, too, with its abundant, young and inexpensive workforce, coupled with a massive consumer market, is looking strikingly similar to China 20 years back. Continue reading →

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Indigenising Defence

No country has become powerful by being dependent on foreign defence supplies. It is now increasingly imperative for India to indigenise production through private sector involvement with the aim of eventually developing the ecosystem of a defence industry.

By Aakash Brahmachari

Feb. 18 – The unfolding scandal in the Indian Air Force’s acquisition of 12 helicopters from AgustaWestland has exposed yet again, the need for India to reduce the import quotient of its defence equipment purchases. It’s time to accelerate indigenisation through the participation of India’s private sector, simplify rules and specifications, and streamline the acquisition process.

As India seeks to replace its aging defence system, it has become the world’s largest armaments customer – and is expected to spend more than $80 billion between 2011 and 2015. India’s own public sector, which has so far been entrusted with localizing development, is notorious for cost overruns and long delays. For instance, the Light Combat Aircraft (LCA), India’s indigenous attempt to replace its dated MiG-21 fighters, was an early ambitious attempt. However, it first flew in 2001 and was scheduled to be inducted into the Indian Air Force in 2012 – four decades after the program was started. The ‘Arjun,’ India’s Main Battle Tank, was judged to be too expensive and inadequate for the Army’s requirements – hundreds of T-90S tanks were purchased from Russia instead. Now we are dependent on the French for fighters and missiles; the Russians for naval ships and aircraft; the Italians for helicopters; the Israelis for drones and missiles; the Americans for transport aircraft. Continue reading →

Posted in Markets, Politics | Tagged Foreign Defence, India, Privatization | 1 Comment

As China Burns More Coal, India Needs More

Feb. 14 – Recent figures from the U.S. Energy Information Administration have revealed that China consumes almost as much coal as the rest of the world combined. Perhaps even more shocking, it has been estimated that India, who currently faces domestic shortages, could be importing as much coal as China by 2017. As the Asian giants continue to consume resources at an extraordinary rate to fund their development, it is increasingly clear that their consumption of coal may be a cause for concern.

In 2011, China’s coal consumption grew 9 percent, rising to a massive 3.8 billion tons. In the same period, the rest of the world combined was consuming 4.3 billion tons of coal. Analysts from Macquarie Bank now expect China to consume 3.9 billion tons in 2013.

Chinese coal imports, however, will fall by almost 10 percent in 2013 due to rising domestic supply, improved transport networks and weak power demand growth. According to a poll of 12 analysts, total imports are expected to stand at almost 210 million tons in 2013, compared to the 234.3 million tons of coal which was imported last year. Continue reading →

Posted in Foreign Trade, Markets | Tagged China, Coal, India, Power | Leave a comment

U.S. Says India’s Solar Program Unfair For Foreign Investors

Feb. 12 – This United States (U.S.) has filed a complaint with the World Trade Organization (WTO) that challenges India’s national solar program, claiming that it discriminates against foreign solar products. According to the U.S., India’s solar program, which was initially launched in 2010, requires producers to utilize Indian-manufactured solar cells and modules. This ‘forced localization’ has resulted from the subsidies the Indian government has offered for using domestically produced equipment instead of foreign imports.

“Let me be clear: the United States strongly supports the rapid deployment of solar energy around the world, including with India,” said U.S. Trade Representative Ron Kirk. “Unfortunately, India’s discriminatory policies in its national solar program detract from that successful cooperation, raise the cost of clean energy, and undermine progress toward our shared objective.” Continue reading →

Posted in Foreign Trade, Markets | Tagged India Foreign Trade, India Investment, Solar Power | Leave a comment

ASEAN-India Free Trade Area Part I: Introduction

By Alex Tangkilisan

Feb. 7 – The ASEAN–India Free Trade Area (AIFTA) is a free trade area consisting of the 10 member states of the Association of Southeast Asian Nations (ASEAN) and India. The initial framework agreement was signed in Bali, Indonesia, on October 8, 2003, and the final agreement was signed on August 13, 2009. The free trade area came into effect on January 1, 2010.

In the aftermath of the recent ASEAN-India Commemorative Summit in New Delhi on December 20-21, 2012, and the subsequent passing of the free trade agreement (FTA) on services and investments, economic ties and prosperity are set to blossom between the two regions. Continue reading →

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