IMF revises India’s growth to 7.6% for FY17 and FY18
The International Monetary Fund raised projections for India’s economic growth by 0.2 percentage points to 7.6 per cent for 2016-17 and 2017-18, in the midst of subdued growth pegged at 3.1% globally. In its World Economic Outlook, the IMF said that “India’s GDP will continue to expand at the fastest pace among major economies, with growth forecast at 7.6 per cent in 2016–17”. It further added that “India’s economy continues to recover strongly, benefiting from a large improvement in the terms of trade triggered by lower commodity prices, effective policy actions and stronger external buffers which have helped boost investment.”
India and France sign € 7.87 billion deal for 36 Rafale fighter jets
India and France recently concluded negotiations on the sale of the new generation Rafale aircraft for the Indian Air Force. It is the biggest defence deal ever signed by India, and includes substantial maintenance and weapons components. It also features an Offset clause in the contract, under which French industry will invest half the contract value back in the country which is expected to develop some expertise domestically in the aerospace sector. Indian officials said 74 percent of the 50 percent offset value would be exported from India. This is expected to result in a gain of over 3 billion Euros over the next 7 years. There is also a six percent technology sharing part, which will strongly boost the manufacturing capacity of the domestic aeronautical industry
Telangana, Andhra Pradesh top states in Ease of Doing Business
A study jointly carried out by the World Bank and the Department of Industrial Policy and Promotion (DIPP) found that the newly formed state of Telangana, as well as Andhra Pradesh have jointly topped the 2016 all-India State/Union Territory-wise Ease of Doing Business rankings. The rankings are on the basis of a 340-point business reform action plan and their implementation by the States. This new report shows that there has been a rapid uptake of reform measures in the States attracting most foreign investment, and have managed to create substantially better conditions for running a business in its territory.
Indian investment could shift to continental Europe over Brexit fears
The recent Brexit decision by the UK has caused a lot of volatility in the international financial markets, as well as a steep depreciation of the British Pound, which, while making investments in the UK currently attractive, also makes existing contracts unviable and impacts earnings of Indian companies. Those Indian companies manufacturing and exporting to the UK for the European market have till date benefitted from preferential access to the EU. However, as this is likely to be revoked, many companies may shift their operations to other cities, such as Paris and Barcelona. This will create many new opportunities for European entrepreneurs to enter into strategic partnerships with Indian firms to invest within Europe, as well as find new entryways into the vast Indian market.
THOMAS JOSEPH, Director de MAPP LAW CHAMBERS