India may overtake Germany to become fourth-largest economy in 2026: Report

India is expected to overtake Germanyto become fourth-largest economy in 2026 and Japan to become third largest in 2034, according a recent report by the UK-based Centre for Economics and Business Research (CEBR).
It further said India is also set to reach a gross domestic product (GDP) of $5 trillion by 2026, 2 years later than the government's target.
"India has decisively overtaken both France and the UK to become the world's fifth-largest economy in 2019. It is expected to overtake Germany to become fourth largest in 2026 and Japan to become the third largest in 2034," the report, titled 'World Economic League Table 2020', said.
Japan, Germany and India will battle for third position over the next 15 years, according to the CEBR.
Referring to Prime Minister Narendra Modi-led government's target of taking the economy to $5 trillion by 2024, it said, "India is also set to reach a GDP of $5 trillion by 2026 2 years later than the current government target."
But, dark clouds gathering all over the economy are leading many to question the maintainability of the target.
Noting that Indian data revisions mean that 2019 was the year when the country's economy finally overtook the UK and France, the report said, "But, slow growth during the year has increased pressure for more radical economic reforms."

Despite the rapid ascent of countries such as India and Indonesia, it is striking how little an impact this will have on the US and China's dominant roles in the global economy, said Pablo Shah, senior economist at Cebr.
India, which till recently was hailed as the world's fastest-growing major economy, has seen growth rate decline to a six-year low of 4.5 per cent in the September quarter of 2019-20.
This has largely been attributed to the slowdown in investment that has now broadened into consumption, driven by financial stress among rural households and weak job creation.
The World Economic League Table is an annual calculation by Cebr jointly published by Cebr and Global Construction Perspectives. The base data for 2019 is taken from the IMF World Economic Outlook.

Probe finds Tata Steel, SKF, Schaeffler units colluded on bearings prices

An Indian antitrust probe has found that units of Tata Steel Ltd, Sweden's AB SKF and Germany's Schaeffler AG colluded on the pricing of bearings, according to an investigation report seen by Reuters.
The Competition Commission of India (CCI) began an investigation in 2017 after receiving allegations of five companies colluding on bearings prices from 2009-2014 to pass higher raw material costs onto customers in the auto sector.

Bearings reduce friction in moving parts, helping smooth the operation of vehicles. India's bearings market is dominated by SKF and Schaeffler and is worth $1.3 billion, showed data from ICRA Research.
CCI's investigations arm, in a report dated May 6 which has not been made public, said it analysed company emails, call records and executive testimonies and concluded that SKF India Ltd, Schaeffler India Ltd, National Engineering Industries, and Tata Steel's bearings division contravened antitrust law by discussing and agreeing prices.
SKF, the world's largest maker of ball-bearings, in a statement said it aided the investigation, and that "we dispute any claim of wrongdoing on the part of SKF".
Schaeffler did not respond to a request for comment. Tata Steel and National Engineering Industries—part of Indian conglomerate CK Birla Group—declined to comment beyond saying the CCI proceedings were confidential.
The investigations arm said it found no evidence against the fifth firm, ABC Bearings, part of U.S. firm Timken Co, the report showed. ABC Bearings declined to comment.
The report also showed the investigations arm considered the collusion lasted through the financial year to March 2011 but found no evidence to indicate when it actually ended.
The four firms, "through personal meetings of key persons, on two occasions shared the strategic information regarding their future efforts to seek price increase from" auto sector companies, the investigations arm said in its 106-page report.
The CCI did not respond to a Reuters request for comment. A person with direct knowledge of the matter said senior CCI officials are reviewing the report and that the antitrust body is able to dispute the findings of its investigation arm.
The CCI can fine firms up to three times the profit made in each year of wrongdoing or 10% of revenue, whichever is higher.
In 2014, European Union antitrust regulators fined SKF, Schaeffler and three Japanese auto parts makers $1.3 billion for taking part in a bearings cartel from 2004 through 2011.
"Incentive to collude"
The investigation report showed the four companies controlled nearly 75% of the domestic bearings market in the period 2009-11 - a time when prices of steel, the key raw material in bearings, were fluctuating sharply.
The steep steel price volatility, the CCI's investigation arm said, provided the companies an "incentive to collude".
There was consensus among the firms "to seek price increase of 12% and settle at 6%" with tractor and automotive manufacturers. With motorbike makers, there was a consensus to seek a 10% price increase and settle at 4%, the report showed.
The investigation arm also said Schaeffler and National Engineering Industries told the CCI that employees had participated in discussions with competitors "mainly to seek coordinated price increase of bearings". It did not elaborate on when the companies disclosed discussions to the CCI.
During the probe, ABC Bearings, SKF and Tata Steel's bearings division told the CCI they had no evidence of such discussions, the report showed.
"The conduct of the parties has resulted in appreciable adverse effect on competition," the CCI investigation arm said in the report. "The sharing of price information is particularly sensitive from the competition law perspective."

US stocks stumble on fears of looming recession; Dow falls over 700 points

Wall Street main indexes slumped more than 2.5 per cent on Wednesday, as a closely watched US bond market indicator pointed to a renewed risk of recession following poor economic data from Germany and China.
The S&P 500 index has now sunk 4.5 per cent since President Donald Trump announced a fresh round of tariffs on Chinese imports at the start of August and is on course for its worst three-week percentage slide this year.

A brief recovery on Tuesday on signs that Washington would delay some of those moves quickly evaporated on Wednesday morning.
Yields on two-year Treasury notes rose above the 10-year yield for the first time since 2007, a metric widely viewed as a classic recession signal, spooking investors.
The interest-rate sensitive bank subsector plunged 4.3 per cent, while the broader financial sector fell 3.5 per cent, putting them on course for their biggest one-day percentage fall this year.
"The bond market is the one that seems to be leading, the stock market is just kind of following at this point. That tells you we are in a headline market where investors will react quickly to what the flavor of the day is," said Joe Saluzzi, co-manager of trading at Themis Trading in Chatham, New Jersey.
"If you look at the US fundamentals right now, growth is decent and earnings have been good and that supports stock market at this level."
Adding to grim mood was data showing Germany's economy contracted in the second quarter, while Chinese industrial output growth cooled to a more than 17-year low in July.
The CBOE Volatility index, also known as Wall Street's "fear gauge", rose 5.2 points to 22.71.
Eight of the 11 major S&P sectors shed more than 2 per cent . Only the defensive utilities sector was higher, while consumer staples and real estates posted the smallest losses.
At 13:04 p.m.
ET, the Dow Jones Industrial Average was down 709.51 points, or 2.70 per cent , at 25,570.40, the S&P 500 was down 79.36 points, or 2.71 per cent , at 2,846.96. The Nasdaq Composite was down 239.60 points, or 2.99 per cent , at 7,776.76.
The energy sector shed 3.9 per cent as oil prices slumped on demand worries.
Shares of Apple Inc were down 2.7 per cent after boosting markets a day earlier with a 4 per cent rise. Chipmakers were also down, with the Philadelphia chip index slumping 3.4 per cent .
The biggest decliner on the S&P 500 index was Macy's Inc, down 14.6 per cent , after the department store operator cut its full-year profit forecast as it discounted heavily to clear excess spring season inventory.
Rivals Kohl's Corp, Target Corp and Nordstrom Inc slipped between 3.2 per cent and 10.8 per cent .
Declining issues outnumbered advancers for a 4.97-to-1 ratio on the NYSE and for a 5.64-to-1 ratio on the Nasdaq.
The S&P index recorded eight new 52-week highs and 51 new lows, while the Nasdaq recorded 14 new highs and 221 new lows.

Govt may seek up to $14.5-bn credit from foreign lenders for MSMEs: Report

The government is in talks with foreign lenders to provide as much as $14.5 billion in credit to millions of its small firms, two officials said, in a sign the country's banking system may not be robust enough to do the job on its own.
The government is in discussions with multiple foreign lenders, including Germany's state-owned development bank KfW Group, the World Bank and some Canadian institutions to extend lines of credit to small enterprises, one of the officials, who did not want to be identified, told Reuters.

KfW's India office confirmed the discussions, though the main focus was on credit lines to support small businesses' solar power generation. The talks were at an early stage, KfW said. The World Bank's India spokesperson did not reply to an email seeking comment.
The official said the government plans to source up to Rs 1 trillion of loans from foreign institutions because Indian banks were not in a position to provide enough capital for the small business sector, which is seen as critical to job creation.
"We are exploring, we are having discussions with various funding agencies if something can be done (for small and medium firms)," the second official said.
The officials did not provide full details of the discussions they are having with banks, or identify all those they are talking to, but said talks are at a very early stage.
India's micro, small and medium enterprise (MSME) ministry is discussing the proposal to pull in foreign banks with the country's ministry of finance, which will make a final call, the second official said.
The push for foreign loans comes on the heels of the Indian government's announcement earlier this month that it plans to borrow about Rs 700 billion by issuing overseas sovereign bonds.
India's 63 million firms in the micro, small and medium firm sector are responsible for more than a quarter of the country's manufacturing and services output, and must be re-energised for Prime Minister Narendra Modi's government to kick-start the economy.
Gross domestic product growth fell to a five-year low of 5.8 per cent in the January-March quarter, well below the 8 per cent-plus rates that the government is targeting.
But credit availability for small and medium firms, which also account for about 45 per cent of India's total exports, has worsened due to a liquidity crisis in the country's shadow banking industry that has seen big lenders struggling to remain solvent.
State-owned banks, which dominate the sector, have not been able to drive increased lending because they are burdened with more than $145 billion in bad loans.
This has led to a severe credit squeeze for smaller firms.
They pay up to 17 per cent annual interest on loans from banks, while the shadow banks, which are also known as non-banking financial companies (NBFCS) can charge as much as 20 per cent.
Last month, a study by a Reserve Bank of India panel said the overall deficit in credit for the MSME sector is estimated at about Rs 20 trillion to Rs 25 trillion.
But lending to such firms can be risky as some lack proper financial information, such as historical cash flow data, which makes challenging for banks to assess the credit risks.
To mitigate such risks for foreign banks, the loans would be given sovereign guarantees and be routed through Indian government agencies such as the Small Industries Development Bank of India, the first official said.