INSIDE THIS ISSUE
   
   
   
  01 MAIN
   
   
  02 TRADE & ECONOMY
   
   
  03 INVESTMENT UPDATE
   
   
  04 NEWSMAKERS
   
   
  05 INFOTECH
   
   
  06 CULTURE
   
   
  07 TRAVEL
   
   
  08 CALENDAR
   

   
  HIGHLIGHTS
   
  Indian Economy: On the Move
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  “The Merchants of Bollywood”
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  Adventure Racing in Paradise
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  02. TRADE AND ECONOMY
   
 
   
 

Indian Economy: On the Move



India is the fastest-growing market in cell phones, automobiles, travel and tourism, In cell phones, India is growing at a whopping 60%. It has been ranked the second-fastest growing travel and tourism economy in the world ahead of China, and right behind Montenegro, as per the latest ’04 forecasts released by WTTC.

In automobiles, India logged the fastest growth among the top 15 passenger car-producing countries last year. As per latest rankings by the International Organisation of motor vehicle manufacturers, OICA, India’s car production grew 30% in ’04 followed by Brazil at 17%.

Indians are spending more on luxury items than ever before. According to AC Neilsen figures for January-August the home theatres grew 386.8%, frost-free refrigerators 42.4%, ACs 116%, flat TVs 64% and fully automatic washing machines surged 35.2%.

While certain consumer durables categories have grown by over 50%, some like laptops have defied all rules of gravity with a whopping 123% y-o-y growth in the April to June quarter. According to a Morgan Stanley report, in June ’05, the growth rate of the consumer goods sector was at a 10-year high.

A recent McKinsey quarterly report says India’s consumer demand — increasing three to five times faster than the economy — reveals the outlines of an aspiring middle class that is vibrant, growing and young. Indeed, 70% of India’s citizens are less than 36 years old, and the country is home to 20% of the world’s population under the age of 24. Here is a compilation of various reports that show India Inc on the move.
   
   
   
 

 

      

 
India's forex reserves up US$ 623 million

India's foreign exchange reserves resumed their upward journey, rising by US$ 623 million during the week ended August 26, 2005.
The reserves, which had fallen last week by $1.1 bn after continuously rising for three previous weeks, stood at $1,43,841 mn, according to the Reserve Bank of India's weekly statistical supplement. Foreign currency assets also increased by $616 mn, standing at $1,37,999 mn as on August 26, RBI said.

7.3 per cent GDP growth likely: CII report

The Indian economy is expected to clock a growth rate of 7.3 per cent for the current fiscal on account of strong prospects of kharif crop production and buoyant industrial and services sector performance, according to a CII report.

In its latest State of Economy Report, the CII has said that the minimum support services announced by the Government for the 2005 kharif season resulted in an increase in area under sowing for major crops.
Because of this, CII expects agriculture to grow at 3.2 per cent for the current fiscal, significantly higher that 1.1 per cent growth recorded in 2004-05.

The report also points towards a better than expected performance of Index of Industrial Production, which grew at 9.3 per cent in April-July period of the current fiscal.
According to the report, a strong growth in non-food credit, growth in capital goods, production and imports are perhaps the factors supporting sustained growth for the industrial sector.

The report further says that inflation
 

is expected to be on the higher side at 5-5.5 per cent due to rising crude oil prices.

Booming India to have global impact : IMF

According to International Monetary Fund India’s booming but relatively closed economy could have a profound impact on the world economy at large. Revising up India’s ’05 growth forecast by half a percentage point to 7.1 per cent, the International Monetary Fund said an opening Indian economy with a young population and rapid growth rates could become a key engine of world growth over the next decade.
Some 75-110m will enter India’s labor force over the next decade, the Fund said in its twice-yearly World Economic Outlook. And government efforts to boost international trade links will bear fruit, it added. India’s exports, although coming from a relatively low level, were forecast to more than double by ’10, while imports will nearly triple. The IMF said imports were growing at about 33 per cent in ’03-04, four times as fast as the ’90-’02 period.

Aviation sector growth takes off in July

India’s civil aviation sector achieved significant growth during July 2005 in terms of passenger handling, both at the international and domestic terminals. However, cargo handling registered minimal growth. This was revealed in a report brought out by the ministry of statistics and programme implementation after a review of the performance of infrastructure sector during April-July this year. In July, domestic terminals handled 21.83 lakh passengers, registering growth of 22.3% over the same month last year. Cumulatively, growth during April-July 2005 totalled 20.4%, with

  

the number of passengers handled going up to 90.32 lakh in comparison with the corresponding period last year. Passenger handling at international terminals during July 2005 was 10.8% higher, with the number of passengers totalling 13.49 lakh. Cumulatively in April-July, international terminals handled 52.45 lakh passengers, registering an increase of 12.5% over the same period last year.

Industrial growth to stay high

According to Institute of Economic Growth’s monthly report, Industrial growth is expected to grow at 9.2 per cent over the next three months.
The present positive sentiments in the economy and growing external demand as reflected in the high export growth have contributed to high growth in the industrial sector, says the Monthly Monitor.

Auto components sector grows multi fold

According to UNDP Human Development Report, the Indian automobile components industry is an example of a successfully nurtured infant industry. The size of the auto component industry has grown from $2.4 billion in 1997 to $8.7 billion in 2004-05. India has emerged as a significant exporter of parts too. From $578 million in 2001-02, overseas sales of Indian vendors have jumped to $1.4 billion the last financial year. The industry is poised to reach export $25 billion worth of parts by 2015, according to a McKinsey report.
International comparisons show that the top Indian companies are globally competitive across a wide range of automobile component products. Defect rates have dramatically reduced — seven companies have been awarded the Deming Prize for quality — and companies are mastering new technologies.