India’s merchandise exports exceed $ 400 bn for first time
India’s annual merchandise exports crossed $ 400 billion for the first time, which Prime Minister Narendra Modi said was an important milestone in the country’s self-reliance journey. Exports in 2021-22 till March 21 were $ 400.8 billion, 37 percent more than the previous financial year.
Why it’s important: Indian shipments of petroleum products, engineering, gems and jewelry, and chemicals have increased despite disruptions caused by the coronavirus pandemic and the Ukraine war. They would further increase as India has been inking trade pacts with several countries in the recent past.
Market regulator asks 26 FPIs to unwind positions within six months
The Securities and Exchange Board of India is set to cancel registrations of 26 foreign portfolio investors from jurisdictions that are not signatories to a multilateral framework for cooperation in securities regulation. Most of them are based in Canada. They have been told to shut down their funds and unwind their positions within six months.
Why it’s important: The funds affected by the regulator’s orders include well-regarded pension funds, trusts, and insurance companies, and comes at a time FPIs have pulled out more than Rs 380 billion in February from Indian markets. It remains to be seen whether it will soften its stand in the days to come.
Future Retail’s overseas bondholders receive assurance of recovery
Financially stressed Future Retail’s offshore bondholders have received a formal communication that a Reliance Industries-linked entity will fully absorb $ 500 million of senior secured bonds, implying a full recovery for them although local lenders, fearing a haircut, have appointed Saraf and Partners as their legal advisor to counsel them on how to maximize their recovery.
Why it’s important: The recovery assurance is contingent upon the proposed takeover of the company by a Reliance-backed entity is approved by the National Company Law Tribunal. The dollar-denominated notes will then be transferred to Reliance Retail and Fashion Lifestyle from the effective date of the scheme.
Government may seek crypto transaction logs from banks and exchanges
Indian tax authorities may tell banks and crypto exchanges to report transactions of virtual digital assets as the government begins taxing gains from cryptocurrencies and non-fungible tokens from April 1. So far, the tax department has relied on voluntary disclosures on transactions of VDAs. Once implemented, the sale and purchase of digital assets will reflect in the annual information statement.
Why it’s important: Although India is yet to regulate cryptocurrencies, it said in this year’s budget that there will be a new tax on earnings from virtual digital assets at 30 percent and an additional 1 percent tax on payments related to transfers of digital assets.
Taxmen raid offices of Hero MotoCorp, senior management
The income tax department has carried out searches at 25 premises of two-wheeler maker Hero MotoCorp, including offices and residence of chairman Pawan Munjal and other senior executives. Hero MotoCorp termed the raids as a routine inquiry by the tax authorities.
Why it’s important: Tax authorities have intensified such search operation and the income-tax department has searched offices and residences of Omaxe and the Hiranandani Group in recent weeks. It is also said to have conducted searches at some startups.
Central government to remove COVID-19 restrictions but mask use to continue
The central government has revoked the provisions of the Disaster Management Act to contain the coronavirus pandemic after two years as there has been a continuous drop in COVID-19 infections in the country. It has, however, said the use of face masks and social distancing rules will continue to be in force.
Why it’s important: The government’s move signals the end of pandemic restrictions and a return to normalcy that would boost business sentiment. A large proportion of Indians are also now vaccinated.
Nothing stops Maruti Suzuki from producing electric vehicles: Chairman
The announcement by Suzuki Motor, the parent of Maruti Suzuki, about an investment of about Rs 104.45 billion by 2026 for local manufacturing of electric vehicles and batteries in Gujarat does not restrict the India arm from making electric vehicles, chairman R C Bhargava said.
Why it’s important: Although there has been a lot of interest in electric vehicles of late, the country’s largest carmaker has said in the past that it does not have immediate plans to enter the segment. Bhargava’s statement is to reassure shareholders that it will not become just a distributor of products of Suzuki Motor Gujarat.
Tata Group to pare debt by selling shares and portfolios
Tata group companies, including Indian Hotels, Tata Motors Finance and Tata Teleservices, are taking steps to reduce their debt by selling shares and some of their business portfolios. Indian Hotels has launched a qualified institutional placement of shares worth Rs 20 billion to reduce its debt by half. Tata Motors Finance is in talks with State Bank of India to sell its vehicle portfolio worth Rs 145 billion. Tata Teleservices repaid debt worth Rs 24.2 billion in the past two weeks.
Why it’s important: the Tata Group’s net debt has fallen to Rs 2.04 trillion in 2020-21, compared with Rs 2.6 trillion the previous financial year. The group’s policy is to reduce substantial debt across group companies in the next two years, investment bankers said.
Auto fuel prices rise for the second day, stoking inflation fears
State-owned oil marketers have raised petrol and diesel prices the second straight day on Wednesday, signalling a steady increase in retail prices to cover the high cost of crude oil that has been surging in the recent past. Petrol and diesel prices were up Rs 0.80 a litre each, taking retail prices to Rs 97.01 and Rs 88.27 a litre respectively.
Why it’s important: Crisil has said that the oil firms need to hike auto fuel rates by Rs 15-20 if crude price of the Indian basket rises to $ 110-120 per barrel. Such as large increase within a short span of time will fuel inflationary pressures that would crimp household budgets and subdue demand.
Proposal to let local firms list overseas put on backburner
The Indian government has frozen plans to allow domestic firms to list overseas as it seeks to bolster its own capital markets, government officials and industry sources have said. New Delhi’s decision marks a reversal in policy after officials said late last year that the new rules for overseas listings would be announced in February.
Why it’s important: The development will be a blow to foreign funds and stock exchanges that were seeking to tap into the country’s tech boom. Global investors have pushed for India to allow overseas listings, saying foreign markets would give Indian companies better access to liquidity and capital.
