Indian Economy : News,Discussions & Updates

Bali78

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Indian exports are suffering because of this. We have to be competitive to take advantage of the global trade recovery which we are not.
But if rupee value goes down(to help export sector), price of petrol and diesel will go through the roof and that will be political harakiri.
 

Ashwin

Agent_47
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India is not an exporting economy. We are an importing economy and a stronger rupee will help us more.
If you want to create massive numbers of jobs, you have to export. Service exports are not job creators but manufacturing is. That is the whole point of Make in India.

No single nation in the has history managed to become fast prosper without exports. (After industrial revolution.)
 
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vstol Jockey

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If you want to create massive numbers of jobs, you have to export. Service exports are not job creators but manufacturing is. That is the whole point of Make in India.

No single nation in the has history managed to become fast prosper without exports. (After industrial revolution.)
I do not agree with you. India has a very large market base of its own and we need to curb imports which are creating this problem.
 

Ashwin

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I do not agree with you. India has a very large market base of its own and we need to curb imports which are creating this problem.
A very large market is not helpful when its purchasing power is lowest in the world. Import is inevitable in a globalized world.

Take the example of mobile phones. Chinese can make cheap phones because they have the scale and expertise they accrued from large manufacturing and exports. Majority of Indian's can only buy low-cost phones because of low purchasing power. Here import is inevitable. Indian companies don't have the expertise because they failed at world-class manufacturing/R&D which they can only accumulate by competing globally.
 
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Pundrick

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But if rupee value goes down(to help export sector), price of petrol and diesel will go through the roof and that will be political harakiri.
RBI is neither allowing Rupee to depreciate or appreciate, it is maintaining an equilibrium to ensure stability in the economy. A sudden appreciation or depreciation in any economy like India is never good. Imagine both 'extreme' the scenario:
1). Rupee Appreciation : Export will decline, thats means MSME will loose business and that will result in massive job loss.
2). Rupee Depreciation : Crude oil bill will be large and will hurt CAD and economy as whole.

So the sole objective of RBI is to maintain stability in Rupee and don't allow any sudden movement in our currency. So the sudden increase in Forex from last 2 years, is result of increase in FDI. The moment dollar gets dried up the Forex will go down in shync unless there is some paradigm shift in Indian economy.
 
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Nilgiri

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Dec 4, 2017
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1). Rupee Appreciation : Export will decline, thats means MSME will loose business and that will result in massive job loss.

It depends, if the rupee appreciation is coming because of improving competitiveness of the MSME + exporters (direct Consumption/Supply side) etc....or from investment side etc....because these have fundamentally very different operation scale in the economy and also velocities of their liquidity and multiplier effects etc.

Thus the underlying effect on domestic jobs + capex cycles + liquidity is more complicated depending on what is the cause of the REER changes and the underlying elasticities of labour etc.. I have talked on this in detail before on the previous version of this forum, but it got wiped away sadly.
 
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Butter Chicken

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India, Saudi Aramco agree to partner on $44 billion refinery-petchem project

NEW DELHI (Reuters) - Saudi Aramco and a consortium of Indian state refiners agreed to build a mega refinery and petrochemical project on India’s west coast for an estimated $44 billion, oil officials at the signing of an initial agreement said on Wednesday.

Top executives of Saudi Aramco and India’s Ratnagiri Refinery & Petrochemicals (RRPL) - a joint venture of Indian Oil Corp (IOC.NS), Hindustan Petroleum Corp (HPCL.NS) and Bharat Petroleum Corp (BPCL.NS) - signed a memorandum of understanding to take equal stakes in the project in Maharashtra state.

The project includes a 1.2 million-barrel-per-day (bpd) refinery integrated with petrochemical facilities with a total capacity of 18 million tonnes per year, the officials said on the sidelines of the International Energy Forum.

Saudi Aramco will supply at least 50 percent of the crude to be processed at the planned refinery, officials said.

Saudi’s petrochemical company SABIC is also keen to invest in a cracker and other facilities in India, he said.
 

The enlightened

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India, Saudi Aramco agree to partner on $44 billion refinery-petchem project

NEW DELHI (Reuters) - Saudi Aramco and a consortium of Indian state refiners agreed to build a mega refinery and petrochemical project on India’s west coast for an estimated $44 billion, oil officials at the signing of an initial agreement said on Wednesday.

Top executives of Saudi Aramco and India’s Ratnagiri Refinery & Petrochemicals (RRPL) - a joint venture of Indian Oil Corp (IOC.NS), Hindustan Petroleum Corp (HPCL.NS) and Bharat Petroleum Corp (BPCL.NS) - signed a memorandum of understanding to take equal stakes in the project in Maharashtra state.

The project includes a 1.2 million-barrel-per-day (bpd) refinery integrated with petrochemical facilities with a total capacity of 18 million tonnes per year, the officials said on the sidelines of the International Energy Forum.

Saudi Aramco will supply at least 50 percent of the crude to be processed at the planned refinery, officials said.

Saudi’s petrochemical company SABIC is also keen to invest in a cracker and other facilities in India, he said.
$44 Billions 😵
We should be moving away from oil and other polluting fuels FFS. Present refining capacity is already oversized as it is geared towards export. Better to invest in hydrogen fuel cells and nuclear power.
 
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randomradio

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$44 Billions 😵
We should be moving away from oil and other polluting fuels FFS. Present refining capacity is already oversized as it is geared towards export. Better to invest in hydrogen fuel cells and nuclear power.

India's oil consumption is expected to peak in 2040 and then taper down over many years. The money is being invested for the long term.
 
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screambowl

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1). Rupee Appreciation : Export will decline, thats means MSME will loose business and that will result in massive job loss.
2). Rupee Depreciation : Crude oil bill will be large and will hurt CAD and economy as whole.


Past 5 years Rupee has only fallen Vs Dollar and Euro. Neither it's sudden appreciation nor it's sudden depreciation. It's a gradual depreciation.

If any of those above had been practiced, 1 euro = 80 INR wouldn't be the currency exchange on today's date.

India's oil consumption is expected to peak in 2040 and then taper down over many years. The money is being invested for the long term.

By 2040 the resource going to star depleting exponentially. And the oil rate would be higher than Gold. If India does not resort to bio fuel and throw aways crops and bio waste which Indi has in tones, India will have disbalance in energy production cost. Which will lead to inflation.
 

Pundrick

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Dec 2, 2017
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Past 5 years Rupee has only fallen Vs Dollar and Euro. Neither it's sudden appreciation nor it's sudden depreciation. It's a gradual depreciation.

If any of those above had been practiced, 1 euro = 80 INR wouldn't be the currency exchange on today's date.
Plz elaborate your post.

I actually presented extreme scenarios and results, that may or may not be true in India's case due to our mixed nature of economy.
 

Pundrick

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Dec 2, 2017
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$44 Billions 😵
We should be moving away from oil and other polluting fuels FFS. Present refining capacity is already oversized as it is geared towards export. Better to invest in hydrogen fuel cells and nuclear power.
Our oil demand will only go upwards in next 20 years. It is not going down very soon, so the sane thing will be to secure our energy supply line with Mid-East countries.

No doubt we are moving towards renewable energy sources very rapidly but thats not enough to fulfill our energy needs for next decade. This new refinery will take at least 5 years to complete and by that time our demand will accelearte at constant 8-10% per annum. This is long term planning.
 

screambowl

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Plz elaborate your post.

I actually presented extreme scenarios and results, that may or may not be true in India's case due to our mixed nature of economy.


My point is the dollar and euro has gradually gone stronger in the past 5 years. And rapidy after the demonetization and GST introduction. Indian economy is currently going through massive transformation and the result would only come after 5 years. So any way currently it has become so unpredictable that in future whether the rupee would rise or the dollar would rise. We do not know the result of these transformation in the Indian economy which were sudden.
 

Bali78

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Dec 26, 2017
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My point is the dollar and euro has gradually gone stronger in the past 5 years. And rapidy after the demonetization and GST introduction. Indian economy is currently going through massive transformation and the result would only come after 5 years. So any way currently it has become so unpredictable that in future whether the rupee would rise or the dollar would rise. We do not know the result of these transformation in the Indian economy which were sudden.
This is the graph of $ vs Rs for last 5 years. How exactly Dollar gone stronger rapidly after Demon and GST?? Actually Rupee value has gone up after introduction of GST!!
1523486433798.png
 

Pundrick

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Dec 2, 2017
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This is the graph of $ vs Rs for last 5 years. How exactly Dollar gone stronger rapidly after Demon and GST?? Actually Rupee value has gone up after introduction of GST!!
View attachment 2345
Remember 8th November 2016 was also the day when Trump was elected, so more than Demonetization it is Trump effect. Investors started pulling out their money to invest in USA due to T's America First policy.
 
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Bali78

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Dec 26, 2017
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Remember 8th November 2016 was also the day when Trump was elected, so more than Demonetization it is Trump effect. Investors started pulling out their money to invest in USA due to T's America First policy.
Demonetization had some impact on stock market and FIIs did pull out money. But that was temporary and FII came back within 3 months. You can see over last one year rupee has appreciated and is more or less stable.
 

The enlightened

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Dec 2, 2017
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India's oil consumption is expected to peak in 2040 and then taper down over many years. The money is being invested for the long term.
Our oil demand will only go upwards in next 20 years. It is not going down very soon, so the sane thing will be to secure our energy supply line with Mid-East countries.

No doubt we are moving towards renewable energy sources very rapidly but thats not enough to fulfill our energy needs for next decade. This new refinery will take at least 5 years to complete and by that time our demand will accelearte at constant 8-10% per annum. This is long term planning.
We have more than sufficient investment in oil refining. We have probably zero investment in fuel cells which will become the backbone of future long haul transportation. Look at what the rest of the world is upto. We will once again be left behind when the next transport revolution comes despite having had equal opportunity to lead it. What you are calling for is continued dependence on fuel imports when we can eliminate all that with nuclear+fuel cells to provide clean and independent energy.
 

randomradio

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Nov 30, 2017
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We have more than sufficient investment in oil refining. We have probably zero investment in fuel cells which will become the backbone of future long haul transportation. Look at what the rest of the world is upto. We will once again be left behind when the next transport revolution comes despite having had equal opportunity to lead it. What you are calling for is continued dependence on fuel imports when we can eliminate all that with nuclear+fuel cells to provide clean and independent energy.

We are investing in fuel cells.
India’s first Hydrogen Fuel Cell-powered bus flagged off by IOC - ET EnergyWorld

We are starting with lithium ion too.
Isro set to transfer tech on low-cost e-vehicle batteries to industry: Chief - Times of India

The problem with oil is, it is much cheaper and there's plenty of stuff today that requires oil more than fuel cells, particularly aircraft, heavy vehicles, generators etc. The govt plans on banning the sale of fossil fuel cars by 2030, but I think it will be possible only by 2040. So, we are going to see oil peak by then regardless of what plan is carried out today. It's only 20 years away.

They may not meet their goal of 100% electric sales by 2030.
No Plans To Switch To 100% Electric Vehicles By 2030: Government

Most of the advanced economies are talking about post 2040 as well.

Our oil consumption is 4 million barrels a day where we have tens of millions of people living first world lives. So you can imagine what the consumption will be like in 2040 when more than a billion people will have first world lives.
 

RISING SUN

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Dec 3, 2017
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Pro-poor move makes India 2nd largest LPG importer
India is the world’s second largest importer of LPG (liquefied petroleum gas) after China and remains ahead of Japan as the Modi government’s drive to provide clean cooking fuel to millions of poor families expanded household demand by nearly 8% in 2017-18. India beat Japan in 2016 to become the world’s third-largest consumer of crude oil after the US and China.

Both International Energy Agency and Opec see India as the main driver of growth in global oil demand for the coming decade as an expanding middle class drives auto sales and “energy justice” for the poor pushes up fuel consumption. Government data indicates India’s import of LPG topping 11 million tonnes in 2017-18 on the back of household consumption expanding nearly 8% as Ujjwala — one of the Modi government’s flagship social programmes — adds volume to overall demand.





Only recently, international media reports quoting shipping data pegged India’s LPG import at 2.4 million tonnes in December, exceeding China’s 2.3 million tonnes for the first time. But India still trails China’s average monthly import of 2.7 million with 1.7 million tonnes of its own.

While a monthly import spike may be caused by a variety of factors, signs of consumption growth are, nevertheless, all there. Not surprising then that the rapid progress of Ujjwala under oil minister Dharmendra Pradhan’s watch is estimated to push up household demand for LPG to more than 27 million tonnes by 2022, up from more than 18 million tonnes.

The PM may flag the success of Ujjwala to emphasise the potential of India’s energy market and need for an equitable global pricing regime when he addresses policymakers and oil industry captains at the 16th International Energy Forum ministerial in New Delhi on Wednesday.
Pro-poor move makes India 2nd largest LPG importer - Times of India