KKR to invest Rs 5,550 crore in Reliance Retail Ventures for 1.28% equity

 Global investment firm KKR will invest Rs 5,500 crore in Reliance Retail for 1.28 per cent equity share, Reliance Industries Limited said in a BSE filing on Wednesday. This marks the second investment by KKR in a Reliance subsidiary, following a Rs 11,367 crore investment in Jio Platforms announced earlier this year.

KKR's investment values Reliance Retail at a pre-money equity value of Rs 4.21 trillion.

“I am pleased to welcome KKR as an investor in Reliance Retail Ventures as we continue our onward march. KKR has a proven track record of being a valuable partner to industry-leading franchises and has been committed to India for many years," said Mukesh Ambani in a statement issued by RRVL.

Reliance Retail runs supermarkets, India's largest consumer electronics chain store, a cash and carry wholesaler, fast-fashion outlets and an online grocery store JioMart. The acquisition of Future Group's retail business added about 1,700 large stores to RIL's 11,806 stores in its retail segment and increased its organised retail revenue market share by around 5 per cent.

Weeks after Ambani, raised about $20 billion selling stakes in his technology venture to investors including Facebook Inc. and Google, the tycoon is repeating the same with his retail business. Earlier, Silver Lake had invested Rs 7,500 cr into Reliance Retail Ventures, valuing the business at about Rs 4.2 trillion.

Silver Lake also put $1.35 billion for a stake in Ambani’s Jio Platforms Ltd, while KKR invested $1.5 billion.

Henry Kravis, Co-Founder and Co-CEO of KKR said, “We are pleased to deepen our relationship with Reliance Industries through this investment in Reliance Retail Ventures. Reliance Retail’s new commerce platform is filling an important need for both consumers and small businesses as more Indian consumers move to shopping online."

KKR is making its investment from its Asia private equity funds. Founded in 1976, KKR has USD 222 billion in assets under management as of June 30, 2020. It currently has about USD 5.1 billion in private equity investments across more than 15 Indian companies, including Jio Platforms, JB Chemicals, Max Healthcare, Eurokids International and Ramky Enviro Engineers.

The investment will add fire to Ambani's battle for dominance in the retail market that is also being eyed by Jeff Bezos' Amazon.com and Walmart Inc's Flipkart.

After monetising Jio Platforms -- which houses the firm's telecom arm and digital ventures, richest Indian Mukesh Ambani is roping in investors in the retail business.

All the 13 investors, who had poured in a combined Rs 1.52 lakh crore in Jio Platforms, have been offered a chance to explore investing in the retail unit.

Besides Silver Lake and KKR, the other investors in Jio Platforms include Facebook, Google, private equity groups Vista and General Atlantic and Abu Dhabi's sovereign wealth fund Mubadala. With this, Jio Platforms and Reliance Retail account for over Rs 9 lakh crore of RIL valuation.

Moody's cuts India's 2020 growth forecast to 5.4% amid coronavirus fears

Globalrating agency Moody’s said on Monday that India’s economic recovery is likely to be shallow and expand at a lower pace of 5.4 per cent in Calendar 2020 than the earlier estimate of 6.6 per cent.
In a review of the global economy to assess likely to impact on Coronavirus outbreak, Moody’s said it (virus and its spread) has diminished optimism about prospects of an incipient stabilisation of global growth this year.

With the virus continuing to spread, it is still too early to make a final assessment of the impact on China (A1 stable) and the global economy.
India’s economy has decelerated rapidly over the last two years. the real gross domestic product grew at a meagre 4.5 per cent the third quarter of calendar Q3 2019. Improvements in the latest high-frequency indicators such as PMI data suggest that the economy may have stabilised.
Moody’s said, "while the economy may well begin to recover in the current quarter, we expect any recovery to be slower than we had previously expected". Accordingly, the revised forecasts for growth of the Indian economy are 5.8 per cent for 2021 (as against previous projection of 6.7 per cent for 2021).
A key to stronger economic momentum would be the revival of domestic demand, both rural and urban, in India. But equally important is the resumption of credit growth in the economy.
As data from the Reserve Bank of India (RBI) shows, credit impulse has deteriorated throughout the last year due to drying up of lending from non-bank financial institutions as well as from banks.
Banks have been both unwilling to lend and to lower lending rates despite successive interest rate cuts by the central bank. As a result, non-food bank credit growth decelerated to 7 per cent in nominal terms in December 2019, down sharply from 12.8 per cent a year earlier.
The deterioration in credit growth to the commercial sector is particularly stark. Nominal credit to industry grew at only 1.6 per cent year-on-year in December 2019, while credit to the services sector registered 6.2 per cent nominal growth, and credit to agriculture and related activities grew 5.3 per cent.
It revised global GDP growth forecast down and expects G-20 economies to collectively grow 2.4 per cent in 2020, a softer rate than last year, followed by a pickup to 2.8 per cent in 2021.
Moody’s said its baseline scenario assumes that the outbreak will cause disruption in Q1 economic activity. The spread of the coronavirus will be contained by the end of Q1, allowing for the resumption of normal economic activity in Q2.
At present, China's economy is by far the worst affected. However, the rest of the world also has exposure as a result of a hit to global tourism in the first half of this year and short-term disruptions to supply chains.
The effects on the global economy could compound if the rate of infection does not abate and the death toll continues to rise. The supply chain disruptions in manufacturing would become more acute the longer it takes to restore normalcy, it added.
Observations
• Revises down forecasts for growth of Indian economy to 5.8% for 2021, against previous projection of 6.7%
• Key to stronger economic momentum would be revival of domestic demand and resumption of credit growth
• Cuts global GDP growth forecast and expects G-20 economies to collectively grow by 2.4 per cent in 2020
• Says the coronavirus outbreak in China is expected to cause disruption in the first quarter

Global oil demand could nearly halve if coronavirus threat escalates

Global crude oil demand could drop as much as 42 per cent to 0.77 million barrels per day (million b/d) from the current estimated 1.33 million b/d in February 2020 on a year-on-year basis if the Wuhan virus, or the crononavirus as it is also known, spreads more, says a note from S&P Global Platts.
"In the worst case, global demand growth will remain negative until May. In best case, it would bounce back to positive in March. Yet, notice worst-case is – for now – assumed recession-free. In worst-case, demand reduction would be comparable to a major slowdown. In best-case, it would be similar to a three-month warm winter effect,” S&P Global Platts note said.

The coronavirus already has financial markets rattled. While experience with virus outbreaks in the past suggests that they often bounce back quickly, the actual economic impact on China, according to analysts at Rabobank International, hinges on the ability of the Chinese government to contain the virus and its policy actions to mitigate the impact.
Already key international airlines including British Airways, Lufthansa, American Airlines, United Airlines, Swiss International Air Lines and Austrian Airlines, suspended or reduced flights due to the outbreak. The virus has now impacted over 7,711 people globally, with cases emerging in India, the US and Europe, while the death toll across China has also climbed.
In its worst-case scenario, Claudio Galimberti, the head of demand, refining and agriculture analytics for Platts Analytics assumes the whole of China’s transport system will be impacted severely, with up to 23 per cent of passenger and freight trips being canceled across the country in February. It also assumes China’s aviation demand will drop by an unprecedented 50 per cent in the same period.
chartSource: S&P Global Platts
The coronavirus outbreak comes at a time when geopolitical risks to oil supply are likely to remain elevated in 2020, as both the US and Iran continue their maximum pressure campaigns. Sanctions relief looks unlikely before the November 2020 US presidential election, although US sanctions policy has proven unpredictable, analysts say.
Meanwhile, the Organization of the Petroleum Exporting Countries (Opec) is already in discussion to bring forward its scheduled March 5-6 meeting as the oil market continues to be buffeted by the impacts of the coronavirus outbreak, reports indicate. The cartel is considering deeper oil-production cuts, or extending its current supply curbs beyond their March expiry.
Given the developments, analysts have already revised down their forecasts for China's refinery throughput in February and March by 600,000 barrels per day (b/d) to 1 million b/d, with crude oil imports set to slow further in April and May.
“Consumption is a meaningfully more important contributor to the economy than it was in 2003 at the time of the SARS episode, and now accounts for over 70 per cent of China’s gross domestic product (GDP) growth (versus less than 40 per cent in 2003). This leads us to believe the drag on the economy may be more severe in magnitude than what we saw in 2003. However, a recovery may not be as speedy, as China’s economy is now not only much larger in size but also growing at a more modest rate than the double-digit rate experienced 14 years ago,” wrote analysts at Franklin Templeton Emerging Markets Research in a recent note.

Chris Wood cuts India exposure; DLF replaces Godrej Properties in portfolio

Globalinvestor and global head of equity strategy at Jefferies has cut his weightage on India by 2 percentage points in his Asia Pacific ex-Japan relative-return portfolio. Besides India, weightage of Indonesia, Thailand and Vietnam has also been cut by one percentage point each. On the other hand, exposure to Korea has been increased by 5 percentage points, Wood wrote in his weekly note to investors, GREED & fear.
ALSO READ: DLF, Godrej Properties: Realty stocks that have gained in 2019
Among the Indian basket of stocks, Wood has replaced his investment in Godrej Properties with DLF, which has found favour with other brokerages as well. Recently, analysts at Morgan Stanley had upgraded DLF to ‘overweight’ with a price target of Rs 269.
DLF, according to Morgan Stanley, has restructured its business model and balance-sheet to become a more focused development and rental company. From here, the spotlight will shift towards monetisation of its Rs 100 billion in unsold completed inventory, leading to positive free cash flow generation (around Rs 5 – 6 billion per annum) and, potentially, further deleveraging, Morgan Stanley had said.

ALSO READ: DLF's inventory sales key to gains, firm to breach FY20 sales guidance
Significantly higher contribution from rent-yielding asset portfolio, better monetisation opportunity in the large concentrated land bank in the Devco, improved pricing benchmark in New Gurgaon/Phase V and REIT listing that has helped benchmark valuation for DLF Cyber City Developers Ltd’s (DCCDL's) large portfolio are some of the reasons, Morgan Stanley feels, have triggered an improvement in DLF’s net asset value (NAV) quality.
Over the past few years, DLF has significantly improved its balance sheet through equity dilution. The company has reduced its total debt of Rs 270 billion in 2017 to Rs 164 billion in 2019 (including its share in DCCDL net debt). In addition, it has been able to fund capex to be able to increase its rental income to Rs 32 billion as compared to Rs 25.7 billion in 2017.
“From here, DLF’s balance sheet can further improve thanks to positive free cash flow visibility from next year onwards. DCCDL should be able to fund its multi-year capex through internal accruals, implying no incremental burden on its balance sheet. We have raised our March 2021 NAV estimate to Rs 359 per share (from Rs 287 for March 2019),” wrote Sameer Baisiwala, an equity analyst tracking the company at Morgan Stanley in a recent co-authored report with Pooja Bhatia, their research associate.
ALSO READ: Analysts see more headroom for quality real estate stocks
Meanwhile, Wood remains bullish on the Indian real estate sector and expects long-term end user demand to make a comeback.
“Amidst all the current bearish focus that the government’s affordable housing programme continues to generate both supply and demand. Supply is rising because of tax breaks provided to developers to do affordable housing while demand comes from the subsidies provided electronically to the house buyers who met the qualifying income criteria. The other point to note is that India’s commercial real estate market continues to boom where yields, while down from the peak, are much more attractive at around 8 per cent,” Wood wrote.
At the bourses, DLF has been on an uptrend over the past two months, up nearly 51 per cent since October. On a year-to-date (YTD) basis though, Godrej Properties has been the best performing realty counter with a gain of nearly43 per cent, while DLF has gained 23 per cent. The S&P BSE Sensex has gained 12 per cent during this period, while S&P BSE Midcap and S&P BSE Smallcap indices have lost around 5 per cent and 10 per cent, respectively.

MARKET LIVE: Sensex opens 100 pts higher, Nifty near 10,900; ONGC zooms 4%

Global cues, rupee's trajectory, oil price movement, and stock-specific action will influence market direction today even as investors worry about the slowdown in the domestic economy.
The Reserve Bank of India (RBI) on Wednesday made it mandatory for banks to link all their fresh retail loans to an external benchmark, effective October 1 — the central bank’s repo rate being one such benchmark. READ MORE
GLOBAL CUES
Wall Street’s main indexes rebounded on Wednesday, after robust economic data from China, easing tensions in Hong Kong and British lawmakers’ approval of a law to delay Brexit provided relief to investors worried about global growth. The Dow Jones rose 0.91 per cent, the S&P 500 gained 1.08 per cent, and the Nasdaq Composite added 1.3 per cent.
Asian stocks perked up on Thursday. MSCI’s broadest index of Asia-Pacific shares outside Japan was up 0.24 per cent, Japan's Nikkei gained 1.09 per cent, and Australian shares increased by 0.33 per cent.
Oil prices rose more than 4 per cent on Wednesday and Brent futures rose $2.44, to settle at $60.70 a barrel.
(With inputs from Reuters)
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Jio Fibre launch today: From offers to registration, all you need to know
At the company's Annual General Meeting (AGM) last month, Reliance Industries Chairman and Managing Director Mukesh Ambani announced that JioFibre customers would get free voice calls for life from landline, 100 megabit (mbps) to 1 gigabit per second broadband speed for subscription starting Rs 700 a month and a free HD TV set on commitment to an annual plan. READ MORE

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Wipro secures $300 million worth IT contract from ICICI Bank
IT services company Wipro on Wednesday said it has bagged an IT outsourcing contract worth around $300 million (around Rs 2, 200 crore) from ICICI Bank under which it would provide a comprehensive suite of services to the lender.

As a part of the contract which has a tenure of 7 years, Wipro entered into a business transfer agreement with Vara lnfotech, a Mumbai based company, for an all cash consideration of Rs 321 crore. Vara Infotech currently provides IT services to ICICI Bank, and post acquisition of this business, Wipro will be the new service provider to the lender. READ MORE

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Stocks to watch
Wipro: The IT services company on Wednesday said it has bagged an IT outsourcing contract worth around $300 million (around Rs 2, 200 crore) from ICICI Bank under which it would provide a comprehensive suite of services to the lender.

PNB: Global rating agency Moody's on September 4 upgraded the outlook on Punjab National Bank (PNB), which will merge OBC and United Bank of India with itself, to 'positive' from 'stable'. READ MORE
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Analysts bullish on mid-cap IT stocks as valuations turn attractive
Infosys touched a fresh high of Rs 822.30 apiece on the BSE on Wednesday, after foreign brokerage firm UBS maintained a 'buy' rating on the stock with the target price of Rs 850. Thus far in calendar year 2019 (CY19), the stock has gained 23 per cent as against one per cent rise in the S&P BSE Sensex. In fact, the stock has done well since the presentation of the Budget in July – rising nearly 11 per cent at a time when the S&P BSE Sensex has slipped over 8 per cent. READ MORE
Infosys
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Decorative paints and footwear stand out amid slowdown, may remain outliers
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Re-categorisation of stocks: Fund managers seek review of new norms
Equity fund managers, who manage assets worth Rs 6 trillion, are seeking a review of the re-categorisation norms introduced by the Securities and Exchange Board of India (Sebi) about two years ago.

Money managers are of the view that some tweaking in the methodology prescribed for classifying a stock as large-, mid- or small-cap will bring about more flexibility in their investment calls and help curb unnecessary churn. READ MORE

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Top FPIs see modest rise in investment value amid sustained volatility
The investment value of top foreign portfolio investors (FPIs) saw a modest rise in the past year amid sustained volatility. The holding of the top 25 FPIs in Indian shares stood at Rs 4.6 trillion as on June 30, 2019, up 16 per cent over the same period last year, according to data from nseinfobase.com. The data has taken into account funds that own more than 1 per cent in Indian stocks. READ MORE
Top FPIs see modest rise in investment value amid sustained volatility
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Nifty View:

Markets started this week with a massive sell-off due to weaker automobile sales along with weak GDP data. On Wednesday, however, market saw smart recovery from lows and managed to close with marginal gains of 46.80 points at 10,844.70. Niftybank showed more strength with gains of 1.12 percent at 27,123.80. As per option data, huge put writing was witnessed on lower strikes ranging from 10,700 to 10,800 which will act as support for the this truncated weekly expiry. We can witness resistance on higher end at 10,900 and 11,000 as highest OI stand on these strikes. We should keep a positive bias on Nifty and any dip will be an opportunity for the traders keeping 10,750 as a base. READ MORE

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Sebi seeks IndiGo's response to Gangwal's letter over corporate governance
The Securities and Exchange Board of India (Sebi) has sought a response from IndiGo on a fresh letter by the company's co-promoter Rakesh Gangwal regarding corporate governance issues. In a filing to the stock exchanges on Wednesday, InterGlobe Aviation said the markets regulator has sought comments on a letter written by Gangwal on August 30. "The company will provide its response to the Sebi," the filing said. READ MORE
IndiGo co-promoter Rakesh Gangwal
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Sebi urges unified G-sec, corporate bond market to spur economic growth
Ajay Tyagi, chairman, Securities and Exchange Board of India (Sebi) says a unified platform for government and private securities could go a long way in developing the corporate bond market in the country. The Sebi chief says for the economic growth trajectory to move to the next level all means of financing corporate investments need to fire up. READ MORE
Ajay Tyagi, Chairman, SEBI

Tech giants put India plans on hold, seek clarity on e-commerce policies

Global technology majors have put on hold their investment plans for India as they wait for a new government to clear the air around a host of issues such as the e-commerce policy and data protection laws, people in the know said.
Public policy teams of Amazon, Flipkart, Facebook, and TikTok, among others, are planning to meet senior officials of the Department for Promotion of Industry and Internal Trade (DPIIT), finance ministry, and information technology ministry after the formation of the government, to understand its stance.

“A lot of questions remain unanswered. The e-commerce policy talks more about data protection. The changes companies had to make due to the tweaks in the FDI (foreign direct investment) policy are still affecting businesses. We need to understand what exactly the new government would do on these issues,” said a senior public policy advisor to one of the biggest e-commerce companies in India. These companies are concerned about data protection laws, which make it mandatory for them to store all data of Indian users onshore. “The problem is that the government is not even allowing us to process the data offshore. If that stays, it would affect businesses a lot,” added the advisor.
Many companies have also deferred their investment plans. “We need to know what the policies are. There is too much to and fro happening on that front. Till the time we have crystal clear policies, investment might not happen,” said a senior vice-president of a technology firm.
The proposed e-commerce policy, aimed at streamlining and regulating the digital business ecosystem, is expected to dominate the headlines after May 23. The new government will have to navigate through the differences between public and industry opinion regarding the policy that has diverged despite a long stakeholder consultation period.
“While the government has already held detailed discussions with technology companies, law firms, and industry associations over myriad aspects of the policy, only provisions regarding data flows and foreign investment have been incorporated into the policy. We don't know what happened to the other issues such as e-commerce norms, trademark rights, and the extent to which online services will come under the policy hammer," a senior functionary of the Confederation of Indian Industry said.
Meanwhile, civil society bodies and interest groups have also written to DPIIT Secretary Ramesh Abhishek, expressing concerns over the consultation process.
In a letter sent to Abhishek earlier this week, 13 such groups have called for publishing all comments received by the DPIIT as part of the public consultation, to provide an opportunity to all stakeholders to submit counter-comments. The letter reviewed by Business Standard points out this is the norm in other government consultations on policies of public interest.
"Prior public consultations conducted by other government bodies such as the Telecom Regulatory Authority of India and the Ministry of Electronics and Information Technology have maintained a higher level of transparency by publishing the comments received,” it said. The letter, co-signed by more than 10 academics, has also requested more discussions on issues such as tax, competition issues, intellectual property and intermediary liability.
However, the issue of data management is expected to be most contentious. “The overarching approach to data management, which mis-classifies data as a national asset, deprives individuals of autonomy over and consent for their personal data, a protected right in India,” the Asia Internet Coalition has said, which counts Apple, Facebook, Google and LinkedIn as its members.
Policy concern
Global firms unsure of whether and how to shift consumer data from offshore to local servers
Investment plans remain on hold due to uncertainties about tax liabilities
Tech biggies say classifying data as 'national asset' is against laws protecting data privacy
Questions over e-commerce norms, copyright issues and regulation of online services remain

Global military spending at new post-Cold War high, fueled by US, China

Global military expenditure reached its highest level last year since the end of the Cold War, fueled by increased spending in the United States and China, the world's two biggest economies, a leading defence think-tank said on Monday.
In its annual report, the Stockholm International Peace Research Institute (SIPRI) said overall global military spending in 2018 hit $1.82 trillion, up 2.6 percent on the previous year.

That is the highest figure since 1988, when such data first became available as the Cold War began winding down.
US military spending rose 4.6 percent last year to reach $649 billion, leaving it still by far the world's biggest spender. It accounted for 36 percent of total global military expenditure, nearly equal to the following eight biggest-spending countries combined, SIPRI said.
China, the second biggest spender, saw military expenditure rise 5.0 percent to $250 billion last year, the 24th consecutive annual increase.
"In 2018 the USA and China accounted for half of the world's military spending," Nan Tian, a researcher with the SIPRI Arms and Military Expenditure (AMEX) programme, said.
With President Donald Trump committed to strong national defence despite reducing US troops numbers in conflict zones such as Afghanistan, 2018 marked the first increase in U.S.
military spending since 2010, SIPRI said. His defence spending request to Congress this year is the largest ever in dollar terms before adjustment for inflation.
"The increase in U.S. spending was driven by the implementation from 2017 of new arms procurement programmes under the Trump administration," Aude Fleurant, the director of the SIPRI AMEX programme, said in a statement.
The other top spenders are, in declining order, Saudi Arabia, India, France, Russia, Britain, Germany, Japan and South Korea. Saudi Arabia, which is leading a military coalition battling Iran-aligned Houthis in Yemen, was the biggest per capita spender on defence, just ahead of the United States.
NATO TARGET
Trump has criticised some of Washington's NATO allies in Europe, especially Germany, for failing to meet the alliance's spending target of 2 percent of gross domestic product.
SIPRI data showed military spending equalled 1.2 percent of GDP in Germany - Europe's largest economy - last year, based on GDP estimates for 2018 from the International Monetary Fund.
Britain and France, the two other largest economies in Europe, spent 1.8 percent and 2.3 percent of GDP respectively on defence in 2018.
Military expenditure by all 29 NATO members amounted to just over half of global spending, SIPRI added Russia, which flexed its military muscles with its 2014 annexation of Ukraine's Crimea region and intervention in the Syrian conflict, dropped out of the list of the top five spenders in 2018 following an annual decline of 3.5 percent.
Despite a sustained drive to upgrade and modernise Russia's armed forces, President Vladimir Putin has had to tighten purse strings following a sharp decline in global oil prices and the need to prioritise some domestic spending programmes.
Russian spending recorded its first annual decline in nearly two decades in 2017, with a fall of 20 percent in real terms, SIPRI estimates released last year showed.

Technology can displace, transform 45m jobs globally by 2025: Report

Advent of digital technologies will have an impact on jobs, and up to 45 million jobs can get displaced or transformed by 2025, a report has warned.
Productivity gains through digital technologies will help create up to 65 million new jobs during the same timeframe, a McKinsey Global Institute report said Friday.

"Retraining and redeployment will be essential to help some 10-45 million workers whose jobs could be displaced or transformed," the report said. It can be noted that the report comes amid tech industry leaders raising question marks over the skillsets of Indian techies and wondering whether they will be helpful in the future.
According to the report, core digital sectors like IT/software and business process management, digital communication and electronics manufacturing can double their GDP contributions to up to $435 billion by 2025.
"All stakeholders will need to respond effectively if India is to achieve its digital potential," it added.
Companies will have to invest in building capabilities, including through partnering with universities, governments will have to invest in digital infrastructure and public data that can be used by organisations, it said.
To capture the gains, we will require more ease in creating, scaling and exiting startups as well as policies to facilitate retraining, it said.
Individuals will have to keep abreast of the changes and keep themselves informed on how the digital economy can impact their work, it recommended. The study said up to $150 billion each of benefits can be accrued in sectors, including agriculture, education, energy, financial services, healthcare, logistics and retail if they embrace digital technologies.
It, however, added while domestic businesses are digitising "rapidly", it is not an even growth as there are laggards everywhere.

India shrugs off global trade war fears with world-beating GDP growth in Q1

India’s economy expanded at the fastest pace in nine quarters, as strong domestic consumption and robust manufacturing growth overwhelmed any global trade-war worries.
Gross domestic product grew 8.2 per cent in the three months ended June, from a year earlier, the Statistics Ministry said in a statement in New Delhi on Friday. That was faster than the 7.6 per cent median estimate in a Bloomberg survey of 42 economists. Only one economist, Saugata Bhattacharya of Axis Bank Ltd., accurately predicted the pace.

Reforms and fiscal prudence are serving the economy well and this growth in an environment of global turmoil represents the potential of India, Finance Minister Arun Jaitley said in posts on Twitter.
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The economy is expected to expand more than 7.5 per cent in the fiscal year to March 2019, Subhash Chandra Garg, economic affairs secretary in the finance ministry, said in New Delhi, adding that growth was now on a steady track.
India grew by a sub-par 6.6 per cent in fiscal 2018, provisional estimates showed, as demand was weakened by the lingering effects of a note ban in 2016 and the chaotic introduction of a consumption tax.
The numbers cement India’s position as the world’s fastest-growing major economy, outpacing China -- where an intensifying trade conflict with the US has dimmed the outlook. The South Asian economy may receive a further boost from an anticipated increase in government spending in coming months, as Prime Minister Narendra Modi tries to boost his party’s prospects for the general election due in 2019.
There are risks for the economy looming. They include higher oil prices, tightening global financial conditions and a shortfall in taxes that could put budget targets out of reach. The rupee’s slump on Friday to a record low of 71 per dollar could deter foreign investors, fan imported inflation and prompt intervention from the central bank -- all of which carry implications for growth.
ALSO READ: Q2 likely to see 7.5% GDP growth; election impact in Q3 and Q4
“While the worst appears to be behind us, there could be some headwinds to growth going forward,” said Indranil Pan, chief economist at Mumbai-based IDFC Bank Ltd. Higher interest rates, banking sector stress, and the likelihood that trade wars will weaken the global economy’s momentum are among the concerns he cited.
For now, the International Monetary Fund is forecasting Asia’s third-biggest economy will grow 7.3 per cent in the fiscal year through March 2019 and 7.5 per cent in the next. The Reserve Bank of India, which has increased interest rates twice since June to curb inflation, expects the economy to expand 7.4 per cent in fiscal 2019.

Boeing plans to expand aerospace engineering footprint in Bengaluru

Global aerospace major Boeing announced its expansion of engineering and technology centre and said it would accommodate another 1,000 new employees to drive aerospace innovation.
The "newest phase" of Boeing India Engineering and Technology Centre (BIETC) inaugurated yesterday would double the existing footprint and accommodate another 1,000 new employees, who will work on cutting-edge technologies that will drive aerospace innovation from India, Boeing said.

The centre has increased its employee count from just 100 when it was inaugurated in early 2017, to over 1,000, the company said in a statement here.
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As the centre grows over the next few years, it will develop into a team of over 2,500 employees in specialized fields of IT, engineering and R&D, it added.
The facility will help Boeing to scale up its aerospace, R&D and engineering activities in its existing facilities, the statement said.
The facility will also have an integrated lab for IoT, Analytics and Mobility, a 3DX lab to develop 3D experiences, a Systems Integration Lab and a Proof of Concepts Lab.
"Over 25 collaboration areas in the centre will enable teams to develop, scale and deliver aerospace innovations with agility. The facility will also drive strategic initiatives like Digital Transformation," the statement said.
The teams will innovate in digital aviation, electrical, mechanical and systems design and provide support for lab and flight testing for aircraft.
The company is also developing skills in the Indian aviation sector by partnering with vocational training institutes, industrial training institutes and its local partners to train workers for the aerospace industry.
"The new centre reflects an agile and driven Boeing in India, one that inspires people to collaborate and accelerate step-change innovation," Boeing India President Pratyush Kumar said.

Global trade war spooks markets; Sensex dips 1.2%, Nifty lowest since Oct

The Indian markets came under pressure on Friday amid a sell-off in global equities due to escalating trade tensions between the US and China. The feud between the two largest economies of the world raised concerns of slowing global economic growth and weak corporate earnings.
Hours after President Donald Trump announced the US’ plans to impose tariffs on $60 billion worth of annual Chinese imports, Beijing retaliated by unveiling tariffs on $3 billion worth of US imports.
The move hit equity assets hard with markets across Asia, Europe, and the US tumbling up to 4 per cent. Losses posted by Indian markets were relatively moderate due to the surprise buying support from overseas investors.
The NSE Nifty fell below the 10,000 mark for the first time since October 9. It ended at 9,998, down 1.15 per cent. The Sensex declined 410 points, or 1.24 per cent, to 32,597, its lowest close since December 5.
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The Indian markets have been under pressure due to high oil prices, political uncertainty, and frauds at public sector banks. The Sensex is down 10 per cent from the record highs of January.
“Tariff wars have made investors jittery. The markets could fall further. Global developments and domestic political uncertainty have made stocks volatile.
However, the correction gives an opportunity for investors to make long-term bets,” said Ravi Muthukrishnan, head of institutional research, Elara Capital.
Despite the sharp correction, foreign institutional investors emerged as strong buyers, even as their domestic counterparts sold shares worth Rs 9.3 billion on Friday. FIIs picked up shares worth Rs 16.3 billion, taking their month-to-date buying to Rs 120 billion. Market players said strong buying by FIIs was a ‘silver lining’ in an otherwise weak environment.
Global trade war spooks markets; Sensex dips 1.2%, Nifty lowest since Oct “Volatility in share markets was likely to remain high, but the broad trend could remain up since a global recession was unlikely and earnings growth remained strong globally,” said Shane Oliver, head of investment strategy, AMP Capital.
Shares of companies exposed to global trade felt the heat, with the BSE Metal index declining close to 3 per cent. Banking stocks also saw huge declines on reports of a fresh fraud worth over Rs 13 billion at Union Bank of India, whose shares fell 8.3 per cent. Among the Sensex firms, YES Bank, Axis Bank, SBI, and ICICI Bank declined the most, between 3 per cent and 4 per cent.
The BSE MidCap and SmallCap indices underperformed the benchmark indices, as nearly 2,150 stocks declined on the BSE, while only 558 advanced. Despite the sharp fall, valuations continue to remain above long-term averages. The Sensex is trading at 17.3 times its estimated 12-month forward earnings compared to the 10-year average of 16 times. In January, valuations had soared to around 20 times.
According to Muthukrishnan, investors should need to keep an eye on three key developments: How global trade wars pan out, election outcomes, and the earnings growth trajectory.