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India could see a shift in foreign direct investment (FDI) trends in the second term of Donald Trump (Trump 2.0) as President of the United States, says a research report by the State Bank of India. The report highlighted that under his first term, Trump 1.0, the Trump administration made sweeping regulatory changes aimed at attracting investments back to the U.S., which impacted FDI inflows globally, including India. It added that if similar policies are reintroduced in Trump 2.0 also, it could create challenges for emerging markets like India, which rely on FDI as a significant driver of economic growth. Notably, a recent Kotak report highlighted that a complete Republican control over all arms of the US government would mean increased US earnings via corporate tax cuts, higher tariffs on imports into the US and greater US fiscal deficits. The first two could spell doom for emerging markets like India and China, since foreign investors will make a beeline for investing more money in the US markets, which will come at the cost of intense selloff in emerging markets. However, higher fiscal deficits will eventually lead to the dollar weakening after the initial euphoria dies down. "India may see shifts in foreign direct investments (FDIs) during Trump 2.0. The Trump 1.0 administration saw significant regulatory changes aimed at attracting investments back to the US," the SBI report stated. However, given that India has been gradually diversifying its sources of FDI (foreign direct investments), this trend could serve as a buffer against any potential decline. Moreover, domestic institutional investors have been stepping up big time, maintaining some balance to the massive exodus of FIIs over the past month. So far in November 2024, FIIs have withdrawn Rs 19,849 crores from the cash segment in Indian markets, while DIIs have poured in Rs 14,014.18 crores as of November 10th, 2024. "India is no longer dependent on the traditional sources of FDI inflows... unlike the recent past, FDI is now coming in many new sectors," noted the SBI report. Unlike a decade ago, when most FDI inflows came from a limited number of traditional sectors, India is now attracting investment in a wide array of industries, including renewable energy, sea transport, medical devices, and surgical appliances. Data suggests over the last 24 years, i.e., between April 2000 and June 2024, FDIs have poured in $1,013.4 billion in the Indian economy. Out of this, 67%, i.e., $689.88 billion, has come in just the last 10 years. The report added there are up to 12 emerging sectors showing strong FDI interest, which could help offset any loss of inflows in conventional sectors if there is a shift in global investment patterns under another Trump administration. In the last financial year, the top 5 sectors that have received the highest quantum of FDI inflow include the services sector (finance, banking, insurance, and business) which makes up about 16% of the inflows. This is followed computer software &amp; hardware, which constitute around 15% of total FDI flows. Trading and telecommunications follows with a share of 6% each, and Automobile Industry comes next with a 5% share. In the short term, the potential for increased U.S. tariffs, more restrictive H-1B visa policies, and a stronger dollar could bring some volatility to India's trade and investment landscape. However, in the long term, these challenges might also encourage India to expand its manufacturing capabilities, diversify export markets, and focus on becoming economically more self-reliant. Notably, India has maintained a merchandise trade surplus with the U.S. despite tariffs imposed during Trump's first term. This indicates that Indian exports have remained resilient, and there is potential to strengthen this trade relationship further by capitalizing on emerging sectors and reducing dependency on traditional industries. Suman Chowdhury, Executive Director &amp; Chief Economist, Acuité Ratings &amp; Research Limited cautions that in the medium to long term, the trade relationship with the US may see a structural improvement. "Higher tariff and trade restrictions in the US with China should translate into better opportunities for exports of manufactured goods from India", he adds.

FDIs may shift to US under Trump 2.0 but it is unlikely to severely impact FDIs inflow to India, says SBI Report

The country's <keyword id="20344433" type="General" weightage="100" keywordseo="forex-reserves" source="keywords">forex reserves</keyword> touched a <keyword id="19953076" type="General" weightage="20" keywordseo="record-high" source="keywords">record high</keyword> of <keyword id="22711333" type="General" weightage="20" keywordseo="USD-675-billion" source="keywords">USD 675 billion</keyword> on August 2, <keyword id="22204269" type="General" weightage="20" keywordseo="Reserve-Bank-Governor" source="keywords">Reserve Bank Governor</keyword> <keyword id="19913110" type="General" weightage="20" keywordseo="Shaktikanta-Das" source="keywords">Shaktikanta Das</keyword> said on Thursday. The previous all-time high for the kitty was USD 670.857 billion on July 19 this year, and the last reported reserve was USD 667.386 billion as on July 26. Das said overall, the country's <keyword id="20811151" type="General" weightage="20" keywordseo="external-sector" source="keywords">external sector</keyword> "remains resilient" as indicated by an improvement in key indicators. "We remain confident of meeting our <keyword id="22711421" type="General" weightage="20" keywordseo="external-financing-requirements" source="keywords">external financing requirements</keyword> comfortably," he said in his statement after the review of the <keyword id="20104157" type="General" weightage="20" keywordseo="monetary-policy" source="keywords">monetary policy</keyword>. Das said <keyword id="20015748" type="General" weightage="20" keywordseo="foreign-portfolio-investors" source="keywords">foreign portfolio investors</keyword> turned net buyers in the domestic market from June 2024 with net inflows of USD 9.7 billion during June- to August 6, after witnessing outflows of USD 4.2 billion in April and May. Gross foreign direct investment (FDI) rose by more than 20 per cent in April-May 2024, while net FDI flows doubled during this period compared to the corresponding period of the previous year, the Governor said. External commercial borrowings by Indian entities moderated, but non-resident deposits were higher in April-May, he said.

India's forex reserves at record high of USD 675 billion, external sector resilient: RBI Governor Shaktikanta Das

New Delhi, The government on Wednesday eased <keyword id="19946825" type="General" weightage="20" keywordseo="foreign-direct-investment" source="keywords">Foreign Direct Investment</keyword> (<keyword id="19946824" type="General" weightage="20" keywordseo="fdi" source="keywords">FDI</keyword>) norms in the space sector by allowing 100 per cent overseas investment in making components for satellites, as part of efforts to attract overseas players and private companies into the segment. The decision was taken at the <keyword id="19901283" type="General" weightage="20" keywordseo="cabinet" source="keywords">Cabinet</keyword> meeting chaired by Prime Minister <keyword id="19895781" type="General" weightage="20" keywordseo="narendra-modi" source="keywords">Narendra Modi</keyword>. Now, the satellite sub-sector has been divided into three different activities with defined limits for foreign investment in each such sector, according to an official statement. Presently, FDI in the space sector is allowed up to 100 per cent in the area of satellite establishment and operations through government route only. By changing the current policy, the government has allowed up to 74 per cent FDI under automatic route in satellites-manufacturing and operation, satellite data products, and ground and user segments. Beyond this limit, government approval will be required in these areas for FDI, it said. Up to 49 per cent FDI is allowed through the automatic route for launch vehicles and associated systems or subsystems, creation of spaceports for launching and receiving spacecraft. Beyond 49 per cent, FDI in these activities would require government approval, it added. Further, up to 100 per cent overseas investments are permitted under the automatic route for manufacturing of components and systems/sub-systems for satellites, ground and user segments. This increased private sector participation would help generate employment, enable modern technology absorption and make the sector self-reliant. It is expected to integrate Indian companies into global value chains. Through the decision, the government seeks to liberalise the FDI policy provisions in the space sector by prescribing easy entry routes and providing clarity for overseas investments in satellites, launch vehicles and associated systems or subsystems, creation of spaceports for launching and receiving spacecraft and manufacturing of space-related components and systems. With this, companies will be able to set up their manufacturing facilities within the country, duly encouraging Make In <keyword id="19895063" type="General" weightage="20" keywordseo="india" source="keywords">India</keyword> initiatives of the government.

Govt eases FDI norms in space sector; 100% in making components for satellites

New Delhi [India], June 5 (ANI): The Bharatiya Janata Party (<keyword id="19894848" type="General" weightage="20" keywordseo="bjp" source="keywords">BJP</keyword>)-led National Democratic Alliance (<keyword id="19938590" type="General" weightage="20" keywordseo="NDA" source="keywords">NDA</keyword>) secured a majority in the general elections, securing a third term for Prime Minister Narendra Modi. This victory indicates continuity in policy, particularly in <keyword id="21785272" type="General" weightage="20" keywordseo="infrastructure-spending" source="keywords">infrastructure spending</keyword> and boosting domestic manufacturing, which are expected to support robust <keyword id="19900794" type="General" weightage="20" keywordseo="economic-growth" source="keywords">economic growth</keyword>. However, the NDA's slim margin of victory and the BJP's loss of an outright majority in parliament may slow down more extensive economic and fiscal reforms, potentially impeding <keyword id="20101140" type="General" weightage="20" keywordseo="fiscal-consolidation" source="keywords">fiscal consolidation</keyword> efforts. In fiscal 2023-24, India's real GDP accelerated to 8.2 per cent from 7.0 per cent the previous year, driven by significant gains in gross fixed capital formation as the government's infrastructure programs gained momentum, even as private consumption remained subdued. <keyword id="20227907" type="General" weightage="20" keywordseo="Moodys" source="keywords" meta.keywordsubtype="org" meta.entityname="Moody's" meta.hostid="261" meta.entityid="Moody's">Moody's</keyword> projects India's economic strength to continue, with an anticipated real <keyword id="19972825" type="General" weightage="20" keywordseo="GDP-growth" source="keywords">GDP growth</keyword> of around 7 per cent over the three-year period from fiscal 2023-24 to 2025-26. This growth is expected to benefit from ongoing infrastructure development and digitalization efforts. Despite this outlook, structural weaknesses pose risks to long-term growth potential. High youth unemployment and low productivity growth in the agriculture sector constrain economic expansion. The agricultural sector's modernization has been stalled by political challenges, as evidenced by the repeal of key reforms in 2021 following widespread farmer protests. Additionally, gains in manufacturing have been uneven, limiting labour force diversification away from agriculture, which still accounts for 40 per cent of total employment. Foreign direct investment (FDI) inflows have declined over the past three years, despite a favourable geopolitical climate amid US-China tensions. This trend suggests persistent constraints within India's investment climate. To address these challenges, further structural reforms and enhanced implementation of existing initiatives, such as the production-linked incentive schemes to promote manufacturing, calibrated liberalisation of cross-border trade, and reconsideration of labour reforms, are necessary. The government's focus on fiscal consolidation is expected to continue, but significant improvements in debt ratios and interest servicing have yet to be realised. Since the trough in fiscal 2020-21, the central government's deficit has likely narrowed for three consecutive years. The interim budget for fiscal 2024-25 projects a deficit of around 5 per cent of GDP, aiming for a 4.5 per cent deficit by fiscal 2025-26. However, India's fiscal consolidation post-pandemic has not outpaced other emerging markets in Asia-Pacific, and its fiscal and debt metrics remain weaker than those of Indonesia, the Philippines, Thailand, and other Baa-rated peers globally. India's general government debt is projected to stabilise above 80 per cent of GDP over the next three years, compared to 70.5 per cent in fiscal 2018-19. General government interest payments are forecast to fall to around 24 per cent of general government revenue over the next two years, down from over 28 per cent in fiscal 2020-21, but still higher than the pre-pandemic ratio of less than 23 per cent. While increased budgetary allocations for infrastructure indicate an improvement in spending quality, debt servicing remains a significant portion of expenditure, reflecting ongoing constraints on fiscal flexibility. This situation underscores the need for the incoming government to balance fiscal consolidation with growth-supportive measures. The upcoming final budget for the fiscal year ending March 2025 will provide further insights into India's fiscal policy direction through 2029. As the Modi administration embarks on its third term, the focus will likely remain on sustaining economic growth while addressing the persistent <keyword id="21500054" type="General" weightage="20" keywordseo="fiscal-challenges" source="keywords">fiscal challenges</keyword> that hinder India's long-term economic potential.

Modi 3.0 will offer policy continuity, but BJP's loss of outright majority may slow down fiscal reforms: Moody's

New Delhi [India], May 12 (ANI): India received foreign institutional inflows worth USD 26.6 billion into <keyword id="6354553" type="General" weightage="20" keywordseo="real-estate" source="Orion">real estate</keyword> during the six-year period from 2017 to 2022, a three-fold rise from the preceding six-year period, according to Nasdaq-listed investment management company Colliers. <keyword id="396143" type="General" weightage="20" keywordseo="foreign-investments" source="Orion">Foreign investments</keyword> in India have been on the rise over the last few years as the industry underwent an overhaul, with major structural, policy reforms inducing transparency and ease of business operations, according to Colliers' 'India- High on Investors' Agenda' report. The report delves into the factors that make India a preferred choice for global investors and how it has stepped ahead of other emerging economies. According to the report, foreign investments accounted for a sizeable share of 81 per cent of the total investments in real estate during 2017-22. "The country's investor-friendly FDI policies, increased transparency in deal structures, and higher investment limits through the direct route have encouraged global investors to invest in India's real estate sector," Colliers said. Institutional investments in real estate continued to remain upbeat in January-March 2023 as well, rising by 37 per cent year-on-year at USD 1.7 billion, led by the office sector. "India's favourable demographic indicators, deep digital talent pool, developmental government policies, infrastructure advancements and competitive costs have made it one of the top choices for global enterprises, fueling real estate demand in India. The strong economic and business fundamentals are enhancing institutional investors' sentiments; forging strategic partnerships to expand their portfolios," said Sankey Prasad, Chairman and Managing Director at Colliers India. From the perspective of global and Asia Pacific investors, the Indian property market currently offers attractive pricing, better valuations, and higher yields on assets. At the Asia Pacific level, India has become a preferred investment destination as Indian cities offer higher yields compared to other cities in the region at relatively lower pricing points. Major Indian cities like Bengaluru and Mumbai occupy the second and third positions, respectively, in terms of commercial yield on real estate assets across the region.

Indian real estate saw 3x  rise in foreign institutional investments during 2017-22: Colliers

<ul><li><keyword id="160091" type="COMPANY" weightage="20" keywordseo="USIBC">USIBC</keyword> has urged the Indian government not to tighten e-commerce rules and not to make any more material restrictive changes to e-commerce investment rules.</li><li><keyword id="853920" type="COMPANY" weightage="20" keywordseo="CAIT">CAIT</keyword> has sent a strongly-worded letter to USIBC President Nisha Biswal stating that USIBC's intervention is unwarranted and runs against the interests of the 85 million traders of India.</li><li>CAIT National President B.C. Bhartia and Secretary General Praveen Khandelwal said that the intervention of USIBC shows both <keyword id="18635" type="COMPANY" weightage="20" keywordseo="Amazon">Amazon</keyword> and <keyword id="80487" type="COMPANY" weightage="20" keywordseo="walmart">Walmart</keyword> are trying every route for an embargo over proposed changes in Press Note.</li></ul>New Delhi, The <keyword id="76562" type="ORGANIZATION" weightage="20" keywordseo="Confederation-of-All-India-Traders">Confederation of All India Traders</keyword> (CAIT) has strongly criticised US-based lobby group <keyword id="181958" type="ORGANIZATION" weightage="20" keywordseo="US-India-Business-Council">US-India Business Council</keyword> (USIBC) for objecting to an initiative of DPIIT to reframe the Press Note 2 of <keyword id="44528" type="COMPANY" weightage="20" keywordseo="FDI">FDI</keyword> policy. "The uncalled-for intervention of USIBC shows utter desperation of US companies like Amazon and Walmart and which are part of this lobby group, as they have understood that their sinister game of controlling and dominating e-commerce and retail trade of India will soon be over and they are trying to block initiative of DPIIT for bringing a new Press Note and e-commerce policy," CAIT said. "However, the 85 million-strong business community of India will ensure that reforms in e-commerce landscape should take place as soon as possible," the trader's body said. The CAIT has sent a strongly-worded letter to USIBC President Nisha Biswal stating that without knowing the true facts and under pressure of Amazon, Walmart and others, USIBC's intervention is unwarranted which runs against the interests of the 85 million traders of India. USIBC has urged the Indian government not to tighten e-commerce rules and not to make any more material restrictive changes to e-commerce investment rules as it will limit e-commerce firms from leveraging their scale. CAIT National President B.C. Bhartia and Secretary General Praveen Khandelwal said that at a time when in a recent judgement, the Delhi High Court has found Amazon guilty of violation of FDI policy and FEMA, the intervention of USIBC shows both Amazon and Walmart are trying every route for an embargo over proposed changes in Press Note. Bhartia and Khandelwal said that such a hue and cry is not understandable. CAIT said the government is not bringing any new law or policy and it is just trying to include Dos and Don'ts of the Press Note. Further scaling of any business can't be stopped by law or any policy. However, the scaling or growth in business has to be within the purview and parameters as defined in the policy or the law. "Why any entity should worry when the government is clarifying the policy?" CAIT asked. Bhartia and Khandelwal said that USIBC is mistaken in terming the business of these companies as an investment in India. The capital which these companies are using is meant to operate their business activities whose return in shape of revenue is accrued by these companies as their profit. Therefore, terming such capital as investment is factually wrong. CAIT said they are using this so-called investment as burning of capital to support their unethical business practices and also to violate the FDI policy of the government and the Foreign Exchange Management Act (FEMA). In a recent judgement of Delhi High Court, the court has taken on record that Amazon is violating FDI policy and FEMA, it added. SEE ALSO: <a href="https://www.businessinsider.in/business/news/one-thing-we-now-know-for-sure-is-in-the-budget-proposals-a-new-infra-lending-institution/articleshow/80600438.cms" data-type="tilCustomLink">One thing we now know for sure is in the budget proposals⁠— a new infra lending institution</a> <a href="https://www.businessinsider.in/budget/news/nirmala-sithraman-union-budget-2021-date-time-schedule-and-other-details-you-should-know/articleshow/80598178.cms" data-type="tilCustomLink" target="_blank">Union Budget 2021: Date, time, schedule and other details you should know</a> <a href="https://www.businessinsider.in/business/startups/news/a-golden-chance-for-startups-to-raise-a-funding-of-2-million-in-just-10-minutes-at-iit-bombays-e-summit-2021/articleshow/80598283.cms" data-type="tilCustomLink" target="_blank">A golden chance for startups to raise a funding of ₹2 million in just 10 minutes at IIT Bombay’s E-Summit 2021</a>

CAIT miffed with USIBC for intervening in India's e-commerce policy

The government has permitted <keyword id="44749" type="ORGANIZATION" weightage="20" keywordseo="Foreign-Direct-Investment">foreign direct investment</keyword> (FDI) of up to 74 per cent under the automatic route in the defence sector with a view to attracting overseas investors, according to a press note issued by the DPIIT on Thursday. However, foreign investments in the defence sector would be subject to scrutiny on the grounds of national security and the government reserves the right to review any foreign investment in the sector that affects or may affect national security, the Department for Promotion of Industry and Internal Trade (DPIIT) said in the note. As per the current FDI policy, 100 per cent overseas investments are permitted in the defence industry -- 49 per cent under the automatic route, while beyond that government approval was required. According to the Press Note 4 (2020 series): "FDI up to 74 per cent under automatic route shall be permitted for companies seeking new industrial licences". It also said that infusion of fresh investment up to 49 per cent, in a company not seeking industrial licence or which already has government approval for FDI in defence, shall require "mandatory" submission of a declaration with the defence ministry in case change in equity/shareholding pattern or transfer of stake by existing investor to new foreign investor for FDI up to 49 per cent, within 30 days of such change. Proposal for raising FDI beyond 49 per cent from such companies will require government approval, it added. "The decision will take effect from the date of FEMA (Foreign Exchange Management Act) notification," it said. The decision to permit up to 74 per cent FDI in the <keyword id="2377476" type="PERSON" weightage="20" keywordseo="defence-manufacturing">defence manufacturing</keyword> through the automatic route was announced by Finance Minister Nirmala Sitharaman in May while announcing the fourth tranche of the Rs 20 lakh crore stimulus package for the coronavirus-hit economy. In July 2018, the government had relaxed foreign direct investment norms in the defence sector by allowing up to 49 per cent FDI under the automatic route. The move was aimed at boosting domestic industry as India imports about 70 per cent of its military hardware. According to the DPIIT data, defence industries has received FDI equity inflows of USD 9.52 million (Rs 56.88 crore) during April 2000 and March 2020. Under the government route, foreign investors have to take prior approval of the respective ministry/department, while in the automatic route, the investor just has to inform the RBI after the investment is made. Total FDI into India increased by 18 per cent to USD 73.45 billion in 2019-20. SEE ALSO: <a href="https://www.businessinsider.in/sports/news/dailyhunt-app-founders-confirm-ipl-2020-associate-sponsorship/articleshow/78169667.cms">EXCLUSIVE: Dailyhunt founders confirm IPL 2020 associate sponsorship — promise new release for Josh ahead of India’s biggest cricket tournament</a> <a href="https://www.businessinsider.in/stock-market/markets/news/hcl-tech-enters-the-list-of-top-10-most-valued-companies-in-india/articleshow/78165311.cms">HCL Tech enters the list of top 10 most valued companies in India</a> <a href="https://www.businessinsider.in/science/space/news/first-intact-planet-found-circling-a-dead-star-this-jupiter-sized-anomaly-is-in-orbit-rather-than-being-pulled-apart-at-the-seams/articleshow/78166938.cms">First 'intact' planet found circling a dead star — this Jupiter-sized anomaly is in orbit rather than being pulled apart at the seams</a>

Foreign investors can now pump in up to 74 % FDI under automatic route in India's defence sector

The risk to <keyword id="3658" type="General" weightage="80" keywordseo="india" source="Orion">India</keyword>'s sovereign rating from external pressures is limited, said <keyword id="125045" type="General" weightage="100" keywordseo="fitch-ratings" source="Orion">Fitch Ratings</keyword> on Wednesday. In its latest report, Fitch Ratings said India's external buffers appear sufficient to cushion risks associated with the rapid monetary policy tightening in the US and high global commodity prices. "External finances are becoming less of a strength in India's credit profile, but we expect foreign-exchange reserves to remain robust and India's current-account deficit to be contained at a sustainable level," Fitch Ratings said. According to the credit rating agency, public finances are the key driver of the rating and are only modestly affected by these developments, particularly as India is relatively insulated from global volatility due to the sovereign's limited reliance on external financing. India's foreign reserves fell by almost $101 billion in January-September 2022, but are still large at around $533 billion. The decline has reversed much of the reserve accumulation that occurred during the Covid-19 pandemic and reflects valuation effects, a widening current-account deficit, and some intervention by the <keyword id="6354335" type="General" weightage="50" keywordseo="reserve-bank-of-india" source="Orion">Reserve Bank of India</keyword> (<keyword id="30067" type="General" weightage="50" keywordseo="rbi" source="Orion">RBI</keyword>) to support the Indian rupee's exchange rate. The RBI has attributed about two-thirds of the decline to valuation effects. According to Fitch Ratings, India's forex reserve cover remains strong at about 8.9 months of imports in September. "This is higher than during the "taper tantrum" in 2013, when it stood at about 6.5 months, and offers the authorities scope to utilise reserves to smooth periods of external stress," Fitch Ratings said. Large reserves also provide reassurance about debt repayment capacity. Short-term external debt due is equivalent to only about 24 per cent of total reserves. Gross external debt stood at 18.6 per cent of gross domestic product (GDP) in 2Q22, which is low compared with the median of 72 per cent for '<keyword id="147629" type="General" weightage="50" keywordseo="bbb" source="Orion">BBB</keyword>' rated sovereigns in 2021. Sovereign exposures are small, with only about four per cent of GDP in primarily multilateral financing. Foreign investor holdings of domestic sovereign debt represent under two per cent of the total, reducing the risk of spillovers to the wider market should they seek to reduce their exposure, Fitch Ratings said. The credit rating agency forecast India's current-account deficit in the fiscal year ending March 2023 (FY23) to reach 3.4 per cent of GDP, from 1.2 per cent in FY22. Imports have surged on strong domestic demand growth and high oil and coal prices. Meanwhile, export growth has moderated from the fast pace seen in January-June 2022, amid declines in prices for steel, iron ore and agricultural products. Recessions in key European and US export markets will weigh on near-term export prospects. "However, we forecast the current-account deficit to narrow in FY24, to 2.0 per cent of GDP, as easing global energy prices will also dampen imports. Our robust medium-term economic growth outlook on India should facilitate the financing of the deficit, particularly from <keyword id="44528" type="General" weightage="50" keywordseo="fdi" source="Orion">FDI</keyword>," the report notes. According to Fitch Ratings, the widening of the current account deficit partly reflects a run-down in household savings, which rose markedly during the pandemic. "Nonetheless, we expect India's current-account deficit will be wider in the next few years than it was in the period prior to the pandemic. This is partly because we see fiscal deficits remaining above pre-pandemic levels, with only gradual consolidation, amid increased public capex spending," Fitch Ratings said. According to the credit rating agency, the RBI will continue to use reserves to manage exchange-rate volatility and this will probably erode reserve buffers further in the near term, but the impact will depend on the scale and duration of intervention. Domestic factors are the primary driver of the RBI's current monetary policy tightening. "However, risks to our current forecast that India's repo rate will peak at 6 per cent in FY24 are skewed to the upside, as there is a significant chance of rate hikes in the US beyond those in our assumptions, which could put further downward pressure on the rupee and increase imported price inflation," Fitch Ratings said. 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Risk to India's sovereign rating from external pressures is limited: Fitch

New Delhi, In a significant development related to war between e-commerce giants and traders of India, the Union Government has directed the Enforcement Directorate and Reserve <keyword id="6355303" type="DOMAIN" weightage="20" keywordseo="bank-of-india">Bank of India</keyword> to take necessary action against <keyword id="18635" type="COMPANY" weightage="20" keywordseo="Amazon">Amazon</keyword> and Walmart-owned-Flipkart. The Centre has taken strong cognizance of various complaints made by the Confederation of All India Traders (CAIT) for <keyword id="2621917" type="PERSON" weightage="20" keywordseo="blatant-violation">blatant violation</keyword> of <keyword id="35066" type="ORGANIZATION" weightage="20" keywordseo="fdi-policy">FDI Policy</keyword> and Foreign Exchange Management Act, 1999 (FEMA) by these companies. CAIT National President B.C. Bhartia and Secretary General Praveen Khandelwal informed that on several complaints made by the CAIT to Union <keyword id="84" type="ORGANIZATION" weightage="20" keywordseo="Commerce">Commerce</keyword> Minister Piyush Goyal in the recent past against Amazon &amp; Walmart-owned-<keyword id="6354742" type="COMPANY" weightage="20" keywordseo="Flipkart">Flipkart</keyword>, the Department of Promotion of Industries and Internal Trade (DPIIT) of the Ministry of Commerce in its letter issued on December has asked both Enforcement Directorate and Reserve Bank of India to take necessary action against Amazon and Flipkart. Bhartia and Khandelwal said that in its communication to ED and RBI, the DPIIT has forwarded four complaints of CAIT including violation of FDI policy in deal between Flipkart and Aditya Birla Group, violation of FDI policy related to FDI in manufacturing which is being used for Multi Brand Retailing by various e-commerce companies, violation of FEMA and its rules by Amazon and blatant violation of FEMA and FDI Policy by Amazon and Flipkart and exploitation of loopholes by them. CAIT said that traders across Country will observe Year 2021 as "Bhartiya Vyapaar Samman Varsh" under the aegis of CAIT and all efforts will be made to clean the e-commerce landscape of India and an era of manipulations, mal-practices and exploitation will come to end and the CAIT will promote and encourage traders across Country to adopt digital commerce and digital payments as new instruments to widen the net of business in India. SEE ALSO: <a href="https://www.businessinsider.in/stock-market/news/top-stocks-to-watch-tata-steel-vedanta-adani-green-tata-motors-maruti-mm-dhfl-v-mart-indian-bank-and-others/articleshow/80038635.cms">Top stocks to watch — Tata Steel, Vedanta, Adani Green, Tata Motors, Maruti, M&amp;M, DHFL, V-Mart, Indian Bank, and others</a> <a href="https://www.businessinsider.in/tech/mobile/news/checkout-the-list-of-upcoming-new-mobiles-in-january-2021-with-expected-price/articleshow/80039794.cms">Upcoming smartphones in India in January 2021</a> <a href="https://www.businessinsider.in/international/news/ten-of-the-most-outrageous-predictions-for-2021-according-to-saxo-bank/slidelist/80040045.cms">From Amazon buying Cyprus to Germany bailing out France — here are ten of the most ‘outrageous’ predictions for 2021</a> <a href="https://www.businessinsider.in/business/startups/news/india-edtech-in-charts-how-the-shi[%E2%80%A6]es-of-byjus-unacademy-and-others/articleshow/80040270.cms">India’s edtech in charts – How the shift to online learning meant money, valuation and users for the likes of BYJU’S, Unacademy, and others</a>

Amazon and Flipkart accused of violating FDI policy — Indian government asks RBI and ED to take action

The Confederation of All India Traders (CAIT) in a letter sent to Union Commerce Minister Piyush Goyal has said <keyword id="1007503" type="PERSON" weightage="20" keywordseo="foreign-entities">foreign entities</keyword> like <keyword id="18635" type="COMPANY" weightage="20" keywordseo="Amazon">Amazon</keyword> and <keyword id="6354742" type="COMPANY" weightage="20" keywordseo="Flipkart">Flipkart</keyword> are hell bent on ruthlessly destroying the Indian retail sector with their deep pockets and expansive lobby of legal experts who will stop at nothing before trampling the lives of over 40 crore Indians. CAIT in a communication sent to Goyal said that FDI in e-commerce section of Press Note No.2 of FDI Policy 2016/2018, the stipulations of which foreign entities like Amazon and Flipkart are hell bent on ruthlessly destroying the Indian retail sector with their deep pockets and expansive lobby of legal experts who will stop at nothing before trampling the lives of over 40 crore Indians. "It is nothing less than a daylight robbery where expressive prohibitions of Press Note No.2 are grossly and blatantly are being violated by such foreign entities derived with their ulterior motives to implement their hidden agenda to control and dominate not only the e-commerce business but also the retail trade of India in a very clandestine manner", it said. CAIT said that instead of complying the stipulations of said Press Note both in letter and spirit to respect the law of the land, these foreign entities are deliberately each and every rule of the Press Note No.2 treating India as a banana republic. Under such a grim situation and particularly in the wake of current highly vitiated e-commerce business, a duty is cast upon the Government to protect sanctity of the law, rules and regulations pertaining to FDI in e-commerce and therefore necessity of a new and fresh Press Note replacing Press Note No.2 of the FDI policy is need of the hour. The loopholes of the present policy are being exploited by foreign e-commerce giants like Amazon and Flipkart so that these loopholes are properly plugged and the policy is implemented as per its original intent. CAIT said that such control allows them do predatory pricing, deep discounting, preferential treatment of sellers with capital dumping through their affiliate sellers at its root. All this is done to gain the market share and make illegitimate financial gains at the expense of livelihood of 8.5 crores small merchants, their dependent families and employees. To circumvent the restriction imposed on the <keyword id="2387771" type="POSITION" weightage="20" keywordseo="marketplace-model">marketplace model</keyword> of e-commerce, a common practice resorted to by these giant foreign e-commerce entities has been to create affiliate companies as sellers, in such a way that they have full control on their business by the way of equity and/or economic participation through their parent/group companies without strictly falling within the definition of 'Group Company' in FDI policy. To plug these loopholes CAIT has demanded to include vital points for issuance of a new Press Note on FDI policy in e-commerce. In order to clearly demarcate the boundary between "market place model" and "inventory based model", any type of direct/indirect, equity or economic relationship, between "e-commerce marketplace entity" and "seller on its platform" should be prohibited. For this purpose, any type of relationship between "marketplace entity" and "Seller", whether direct or indirect, equity or economic or otherwise should be strictly prohibited. Such prohibited relationship between Marketplace and Seller may include, but not limited to, Group companies, Affiliates, Related Parties, Associate Companies, Beneficial owners or any other person(s)who can exercise such control. It also suggested that marketplace based model of e-commerce would mean provision of an information technology digital platform by an e commerce entity to act as a facilitator between buyer and seller only. Inventory based model of e-commerce would mean an e-commerce activity where inventory of goods and services is owned by e-commerce entity and is sold to the consumers directly. E-commerce market place entity and its Group Companies will not, directly or indirectly, own or control the inventory i.e. goods or services purported to be sold on the marketplace. Such an ownership or control over their inventory will render the business into inventory-based model. Marketplace entity &amp; its Group Companies shall not, directly or indirectly sell inventory of goods or services purported to be sold on the marketplace to the Sellers. If any goods or services which are sold by the Group Companies of marketplace and are resold in the e-commerce platform, then such activity shall be treated as inventory based model of e-commerce, CAIT said. The seller having ownership or control on its inventory by the Group Companies of e-commerce marketplace entity, is not permitted to sell its goods or services on the marketplace. Inventory of a seller on the marketplace will be deemed to be controlled by e-commerce marketplace entity if such seller purchases its inventory purported to be sold on the marketplace directly or indirectly from its Group Companies. Further, each marketplace entity and its affiliates, group companies, associates shall provide all details, information, documents, statements and returns as required by the Government or any Regulator, at prescribed intervals or from time to time for verification of compliance with the provisions of these guidelines, CAIT said. 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You Searched For "FDI policies" and got 10 results

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