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India Economic News Consulate General of IndiaJanuary 2013 Munich

Indian economy to grow at 6.8% in 2013. D&B:

According to global research firm Dun & Bradstreet (D&B), India's GDP is likely to register 5.5 per cent growth during 2012, much below the expansion level achieved in the previous year. According to the official data, the economy grew by 5.3 per cent in the July-September period this year, while in quarter ended June 30, the economy grew by 5.5 per cent. The economy is likely to witness a growth rate of 6.8 per cent in the next year driven by the reform push of the government, says a report.

FDI in services sector up 5% in April-Oct:

India's foreign direct investment (FDI) inflows into the services sector increased by 5 per cent to USD 3.6 billion during the April-October period of this fiscal, according to the latest data of industry ministry. The financial and non-financial services sector had attracted FDI worth USD 3.42 billion during the same period last year.

FII inflow in stocks surpasses Rs 24,000 crore-mark in December:

Overseas institutional investors have pumped in more than Rs 24,000 crore (USD 4.4 billion) in the Indian stock market in December, the

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highest in 10 months, taking total FII inflow for the year to over USD 24 billion. In December, Foreign Institutional Investors (FIIs) were gross buyers of shares worth Rs 71,595 crore, while they sold equities amounting to Rs 47,412 crore.

M&A activity expected to see sharp jump in 2013: Ernst & Young:

Although global uncertainties and domestic factors impacted mergers and acquisitions (M&As) in India in 2012, they are expected to see a sharp jump in 2013, to be driven mainly by cross-border activity, global consultancy firm Ernst & Young has said. "Deal activity declined by 8.1 per cent as global uncertainties and domestic factors left an impact on Indian M&A in 2012. However, the momentum temporarily picked up in 3Q12 and expected to continue in 2013," Ernst & Young said in its report on M&A here.

IT industry may grow at 11-12% next fiscal: PwC India:

"The pent-up demand for information technology products and solutions,geographical diversification, focus on niche service offerings will help drive the industry growth", Sanjay Dhawan, Leader Technology, PwC India, has said. The increased technology adoption by the Indian Government would also boost prospects of domestic revenue growth. The industry is most likely to grow at around 11-12 per cent in the coming financial year, he said, commenting on the prospects for the industry in the New Year. Crossing the $100-billion revenue mark, with a growth rate of 4 per cent in 2011-12 was a milestone for the Indian IT-IT-enabled services industry.

India’s economy will be bigger than UK’s in 5 yrs:

India will overtake the United Kingdom by 2017 to become the largest economy in theCommonwealth. Britain, which has reclaimed its place as the world's sixth-largest economy from Brazil, will,

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however, be larger than France by 2022, a leading forecaster has predicted. According to the Centre for Economics and Business Research (CEBR), the United Kingdom, however, will not be able to avoid a relative decline over the next decade, falling to the eighth position behind India, Brazil, and Russia, but avoiding the dramatic plunge expected for France and Italy.

FDI Inflows double:

September 2012 recorded the highest inflow of FDI for a single month so far with about USD 4.67 billion being received in comparison to USD 1.76 billion FDI received in September, 2011. FDI inflows were largely in the sectors of services, metallurgical, construction and automobile.

FII limit in domestic debt raised by 10 billion USD:

To attract long term investments into the debt market and to narrow the current account deficit, the finance ministry raised the foreign institutional investor (FII) limits in Government

securities and corporate bonds by USD 5 billion each.

FIPB approves foreign investment in pharma sector:

The Foreign Investment Promotion Board (FIPB) which is responsible for approving foreign investments would continue to clear acquisitions in the pharmaceuticals sector till such time that appropriate changes are made in the competition laws whereby purview over such matters would pass on to the country’s competition authority.

India to become one of the biggest players in mobileapplications:

According to the Internet and Mobile Association of India (IAMAI), India is tipped to become one of the biggest players in the global applications market by 2016, overtaking leading smartphone app markets such as the US and five Western European countries. The country, which is presently ranked seven in smartphone shipments will rise to number three by 2016.

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Moody’s rates India as ‘Stable’:

Moody’s Investor Services said that India’s outlook is stable based on the structural strength of India – a high household savings rate and relatively competitive private sector. It expected that the GDP growth rate would rise from 5.4% in 2012-13 to 6% in 2013-14.

Goldman Sachs expects India to reach above expectations:

Leading International Fund house Goldman Sachs Asset Management Chairman, Jim O Neill expected that GDP growth rate in India will exceed expectations in 2013 since policy makers may make surprisingly positive moves.

Goldman Sachs also expects FDI in multi-brand retails to push growth:

It is expected that for every 1.7 dollar of foreign investment, a GDP growth of one dollar would occur. FDI would also reduce the high current account deficit, it was observed.

Merger and Acquisitions tally reaches to USD 41 billion:

M &A deals worth nearly USD 10 billion took place in the month of November, 2012, taking the year-to-date total to USD 41 billion.Though the number of M & A deals reduced from 71 a year ago to 56, in dollar terms it increased by several billion dollars. While the 71 deals accounted for only USD 1.4 billion, the 56 deals this year accounted for USD 9.7 billion.

FDI in telecom sector declines:

FDI in the telecom sector for the period April to September, 2012 has declined to only USD 43 million compared to an FDI inflow of USD 1.9 billion for the same period in 2011. The global economic slow down, coupled with domestic problems in the telecom sector are given as reasons for the decline in FDI to this sector.

India’s growth in domestic air traffic ranked second:

The Indian growth rate of 13.1 % in the domestic air traffic is ranked second in the world,

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next only to Kazakhstan which experienced a growth rate of 22.5% . It is expected that by 2016, there would be 107.2 million domestic passengers in India, next only to the US, China, and Brazil.

India is 19th biggest exporter of merchandise trade:

According to a report released by WTO Secretariat, India had exported USD 297 billion in merchandise trade which is larger than that of many countries such as Australia,

Brazil, Switzerland and Sweden.

HSBC predicts India to have fastest growing market in the World:

Due to rising bilateral trade with China, growing consumer wealth and high confidence level of its traders, India is expected to be the fastest growing market till 2020, according to a HSBC trade forecast.

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This newsletter is a compilation of news articlesfrom various business e-newspapers and in no

way is an endorsement or reflection ofviews of Consulate General of India, Munich.

For queries contact:

Mr. VSDL Surendra, Consul (PIC), Consulate General of India, Widenmayer Strasse 15, 80538 Munich, Germany.

Email: cpic@cgimunich.com , Web: www.cgimunich.com