Resume operations, says FM Sitharaman; India Inc cites hurdles in way

Industry wants cash in the hands of the poor, more policy reform in sectors such as tourism, automotives and aviation

Industry needs to quickly resume operations and increase investments to ride out the Covid-19-induced economic slowdown, Finance Minister Nirmala Sitharaman told industrialists on Wednesday. But it may be easier said than done, said India Inc, highlighting low levels of demand and several challenges being faced by businesses, big and small.

Sitharaman’s virtual conference with senior members of the Confederation of Indian Industry (CII) was designed to gauge industry’s mood on the recent economic package, a senior government official said. The minister was accompanied by all five secretaries from the finance ministry along with the Chief Economic Advisor. Corporate Affairs Secretary Injeti Srinivas also joined in.

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CII members flagged the lack of demand, suggesting direct cash transmission into the hands of the poor needs to be stepped up. There is need for further policy reform in certain sectors, such as tourism, automotives and aviation, they said. Discussions need to be undertaken to protect jobs, increase demand, and ensure survival of large businesses which face unprecedented challenges, the CII said.

“While a lot has been announced in the package, it was pointed out that more needs to be done for sectors that have been left out, including large corporations and exports. Targeted policy changes need to be brought out quickly for these, and then industry can decide on how to deal with the crisis going forward,” said an industry member who attended the meeting.

Amazon not doing India a favour by investing billion dollars: Piyush Goyal

Minister’s remarks come a day after Bezos announced $1 billion investment

Amazon is not doing India a favour by investing a billion dollars, said Piyush Goyal, Minister of Commerce and Industry, a day after the e-commerce giant’s founder and CEO Jeff Bezos announced the incremental investment in the country.

Speaking at the Raisina Dialogue 2020, an annual event organised by the Observer Research Foundation, Goyal said on Thursday, “they may have put in a billion dollars but then if they make a loss of a billion dollars every year, then they jolly well have to finance those billion dollars. So it’s not as if they’re doing a great favour to India when they invest a billion dollars.”

Bezos, considered the richest man in the world with a net worth of $117 billion, is in India for the first edition of his firm’s micro, small and medium enterprises focused event — Amazon Smbhav. In New Delhi, he announced the investment of $1 billion, in addition to the $5 billion Amazon has invested over the past five years.

The latest round of investment will go towards digitising 10 million MSME businesses in India, and help such firms export $10 billion worth of “Make in India” goods by 2025 through its platform. However, Goyal was clearly not pleased with the announcement. Talking about the losses incurred by Amazon’s marketplace, he added that if the company was bringing in money “largely to finance its losses”, which amount to $1-1.5 billion a year at a turnover of $10 billion, then it raises the question of how the losses occurred.

Sikkim standoff: China's economic stakes in India is no worry for Beijing

India may hold the promise of a big market for China, but that promise is yet to be fulfilled

 

The sikkim standoff between India and China over a border dispute in the Sikkim region has given rise to speculation over how the latter would respond to the situation. The Chinese leadership has ruled out any talks with India until the Indian troops vacate what it considers to be its territory. In response, the Indian foreign secretary has noted that differences should not become disputes between neighbours.

But the stalemate continues, bringing into sharp focus its impact particularly on China’s economic ties with India. On social media including many WhatsApp groups, a campaign is already on to show how Indians can respond to China by rejecting goods that are produced in that country and sold in India.(economy policy)

It is a campaign charged with nationalistic emotion. But how seriously can such a campaign really impact Chinese exports or investments? To assess that, it is important to look at some numbers on India’s trade with China and the flow of Chinese investments into India.

There is no doubt that Chinese direct investments in India have been rising steadily. From being the 37th largest foreign investor in India in 2011, it has now scaled up to the rank of the 17th largest foreign investor in 2017.

 INDIA-CHINA foreign trade

That appears to be a fast rise in the pecking order, but actually the size of total Chinese investments in India and the annual flows are very little, almost insignificant either as a share of India’s total foreign investment or as a per cent of China’s total investments abroad.

Consider the following numbers. Between April 2000 and March 2017, India received cumulative foreign investments of over $332 billion. Of this, however, China’s share is only $1.63 billion. In 2010-11, China invested only about $2 million in India. That year, India had received total foreign direct investments (FDI) of over $14 billion..

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