Welcome to the December 18, 2014 bulletin of key policy decisions and high-impact news from India, presented by the Embassy of India, in Washington D.C.
High-Impact News

Inflation Hits Zero, Lowest in 5+ Years

Wholesale price inflation hit the zero level in November, the lowest in about five-and-a-half years, based on price declines in food, fuel and manufactured items. The Wholesale Price Index-based inflation was at 1.77 percent in October, well down from 7.52 percent in November 2013. According to data released by the Government,food inflation fell to a nearly three-year low of 0.63 percent. The last time WPI was lower was minus-0.3 per cent in July 2009.

Rep. Tulsi Gabbard Meets PM Modi and Other Leaders


Visiting Member of the U.S. Congress Representative Tulsi Gabbard called on Prime Minister Narendra Modi on December 17. During the meeting they discussed a broad range of issues including India-U.S. relations, maximizing the economic opportunities, environmental challenges, regional security challenges, and terrorism. Congresswoman Gabbard expressed keen interest in India's spiritual and cultural traditions and spoke about her efforts to promote them in the U.S. On December 16, Ms. Gabbard called on External Affairs Minister Sushma Swaraj.

First Meeting of the India-U.S. Contact Group on Civil Nuclear Cooperation

The first meeting of the India-U.S. Contact Group on civil nuclear cooperation took place in New Delhi on December 16-17, 2014. The Contact Group was established pursuant to the decision of the Indian Prime Minister and the U.S. President as articulated in the Joint Statement of September 30, 2014. The Contact Group, which comprised relevant experts from both sides, held detailed discussions on a range of implementation issues, including administrative issues, liability, technical issues and licensing to facilitate the establishment of U.S.-designed nuclear power plants in India. 

HCL Technologies Signs Deal with Washington Gas    


Indian IT firm HCL Technologies has signed a 30-month agreement with Washington Gas (a unit of WGL Holdings) which distributes natural gas to about 1.1 million customers in Washington D.C., Maryland and Virginia in the United States. HCL will modernize the billing software for Washington Gas' legacy mainframe software, among other upgrades.  

U.S. Burger Chain Carl's Jr. to Enter India


American burger chain Carl's Jr., which will open its first Indian restaurant next year, believes India could become one of its largest international markets outside the U.S., with plans to open about 100 restaurants in the next five years. Ned Lyerly, President-International of the parent company of Carl's Jr., said, "India is in the middle of the burger revolution and we believe this is the perfect time for our brand to be launched in the country." He added, "We have studied the market to develop processes to offer both vegetarian and non-vegetarian options."

Mumbai to Get World's 3rd-Largest Metro Rail Network

In a move that could revolutionize transportation in India's business capital, the Mumbai Metropolitan Region Development Authority has planned a 280-mile network of metro rail corridors for the city and surroundings -- the third largest in the world. The system, which would be behind only those in Shanghai and Beijing in size, would develop over the next 8 to 10 years.  
Key Policy Decisions

Railways Offer $14.4 Billion in Foreign Investment Opportunities


Foreign investors can put as much as $14.4 billion into India's rail infrastructure through foreign direct investment, suggests a list of projects released by the railway ministry. The $10 billion Mumbai-to-Ahmedabad high-speed corridor is the largest of the projects. "We are going to hold two investor meets to apprise potential investors of the kind of models and projects on offer for participation," Railway Board Chairman Arunendra Kumar said.                                                                                       


Govt. Reforms Power Sector via Electricity Act Amendments           

Ushering in major reforms in the power sector, the Government has approved amendments to the 2003 Electricity Act, including allowing consumers to select their power supplier. "The amendments will also promote competition, efficiency in operations and improvement in quality of supply of electricity in the country resulting in capacity addition and ultimate benefit to the consumers," said a Government statement.       


State-Run Banks Can Now Raise Capital from Market    


State-run banks are now allowed to raise equity capital from the market, as long as the Government's stake in the banks does not fall below 52%, opening the way for public offers by many state-run banks, including the State Bank of India. The proposal is part of the Government plan to cut banks' dependence on the budget for capital. 


Govt. Targets $100 Billion in 2015 Trade with ASEAN


India's annual trade with the 10-member Association of Southeast Asian Nations currently stands at around $80 billion and could jump much higher in 2015. "We hope by 2015 it will touch $100 billion and [double] by 2022," said Commerce and Industry Minister Nirmala Sitharaman. She added that India's Look East policy aimed at strengthening ties with Southeast Asia has become the Act East policy.

Liquidity Help for Micro, Small, Medium Enterprises 


The Cabinet has approved the setting up of a $79 million Credit Guarantee Fund for Factoring for mirco, small and medium (MSME) businesses. Factoring is a financing tool for suppliers that makes prepayments against invoices, providing liquidity to MSMEs and facilitating collection of receivables.


Reserve Bank Eases Rules for Infrastructure Loans

The Reserve Bank of India eased rules for long-term loans by lenders to the infrastructure sector and heavy industry, allowing for easier refinancing and more flexible restructuring. The rules are intended to help the Government's push to revive stalled infrastructure projects as a means to help the economy.

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