Home / In The News / India

India

INDIAN FERTILIZER COMPANIES CONCERN OVER 20 PERCENT CUT OF SUBSIDIES

MUMBAI: Indian fertilizer companies will soon raise potash prices after the government last week cut subsidies by 20 per cent for the current financial year, officials said.

Higher potash prices charged to millions of Indian farmers will hurt demand in one of the world’s largest importers of the fertilizer, raising concerns for big global suppliers. To offset the subsidy cut, Indian companies also plan to bargain for lower prices in their annual import contracts with international suppliers like Uralkali, Potash Corp of Saskatchewan, Agrium Inc, Mosaic, K+S, Arab Potash and Israel Chemicals.

India buys potash from these global miners in annual contracts that the South Asian country usually signs at the start of its fiscal year beginning on April 1. Contracts signed by India and China are considered international benchmarks, and are closely watched by other potash buyers such as Malaysia and Indonesia.

India’s potash producers will have to raise prices now, said a senior official with a leading domestic company. The official did not wish to be identified because he is not authorized to talk to media. “But we will do this after consulting the government and other industry officials,” he said. Prime Minister Narendra Modi’s cabinet last week cut potash subsidies by 20 percent from a year earlier to 7,437 rupees ($114.49) a ton for the 2017/18 fiscal year. Government officials in February had said New Delhi could cut the potash subsidies by 17 percent.

India relies on imports to meet its annual potash demand of about 4 million tonnes, but higher prices are expected to limit its use by the country’s 263 million farmers, who will plant rice, cane, corn, cotton and soybean crops in the monsoon months of June and July. With the strengthening of the rupee against the dollar, fertilizer companies would likely not pass on the entire subsidy reduction to farmers, said an official with a private fertilizer company. The Indian rupee has appreciated 4.5 percent so far in 2017. “Considering the reduced subsidy, we will negotiate with suppliers to try to get potash at the lowest price for Indian farmers,” U.S. Awasthi, managing director of Indian Farmers Fertiliser Cooperative Ltd, the biggest producer, said.

INDIAN TRACTORS SALE ON RISE FOLLOWING WAIVER OF LOANS TO FARMERS

MUMBAI, April 5) – Tractor sales in India are likely to grows in double digits in the fiscal year that started on April 1, following a decision by at least two states to waive some loans to farmers, India’s biggest tractor maker said. India’s tractor industry posted 18 percent volume growth in the fiscal year that ended March 31.

Nearly two-thirds of farmers in India buy tractors via bank loans and a waiver by two states on loans to farmers whose crops have been hit by poor weather for crops will make them eligible for fresh borrowing. Other states are considering similar moves.

“The farm loan waiver is certainly a positive enabler for the industry,” Rajesh Jejurikar, the head of Mahindra & Mahindra’s farm equipment division, told Reuters on the sidelines of a conference Mahindra launched new tractor platform Jivo, aiming to boost its sales of small tractors, Jejurikar said. India’s most populous state, Uttar Pradesh, said it would waive $5.6 billion of loans to help millions of farmers reeling from losses after unfavourable weather in the past few years hit their crops.

The southern state of Tamil Nadu has also waived farm loans, while the western state of Maharashtra and northern state of Punjab are considering writing off loans to smallholders.

TRACKING DEVICES MANDATORY FOR PUBLIC TRANSPORT VEHICLES

Chennai The government has recently passed a regulation that all public transport vehicles with over six seater capacity will have fitments of location tracking devises and one or more emergency buttons.

This new regulation will come into effect from April 1, 2018 and will include not only state transport buses but also smaller vehicles like school vans, ambulance and other special purpose public carriers. This plus a separate regulation on speed control alarms for private vehicles will drive the new age norms in 2018, said auto industry experts.

Already all commercial vehicles are fitted with a speed limiting mechanism, in force since October 2016. ” The government is currently debating whether private vehicles can be fitted with an alarm which will go off once the driver crosses a prescribed speed limit,” said a senior SIAM (Society of Indian Automobile Manufacturers) official. Thevehicle tracking regulation will not only cover newly manufactured vehicles but also existing vehicles in the national pool. “Existing vehicles will also need the GPS vehicle tracking devise so they will go for a retro fitments,” said Amit Dakshini, Group Chief Strategy Officer at Pricol.

“The idea is that the vehicle tracking system will give better control to authorities and fleet owners, telling them the speed of the vehicle, the route taken, diversions etc and so it will be populated in as many vehicles as possible,” he added. Already number of truck makers offer the GPS system depending on customer demands.

Big fleet operators, for instance, are now demanding GPS fitted trucks in their fleet for better regulation. As for the speed limiting devise, that too may soon be made mandatory for the vehicle pool aswell. “There has been discussion about making the speed limiting devise mandatory for all trucks plying on Indian roads and may eventually be passed by Supreme Court as a judgement on safety grounds,” said Dakshini.

Telematics devises are still in their nascent stage of market penetration in India but given the regulatory drive it is expected to see growth. “From an OE fitted perspective, penetration levels (for telematic devises) are less than 5% in India which is expected to reach 15% by 2020,” he said. Pricol, which currently supplies telematics solutions to companies like JCB, John Deere, CNH and Tata Motors, is looking to Rs 100 crore from its telematics business by this fiscal end and triple that in the next 2-3 years.

 

95 PERCENT HOUSEHOLDS PREFER TO PARK MONEY IN FIXED DEPOSITS

NEW DELHI: More than 95 per cent Indian households prefer to park their money in bank deposits, while less than 10 per cent opt for investing in mutual funds or stocks, a new Sebi survey showed.

The survey, conducted across urban and rural areas of the country, showed that life insurance was second most preferred investment vehicle, followed by precious metals, post office savings and real estate in the top-five.

Mutual funds came at sixth place (9.7 per cent), followed by stocks (8.1 per cent), pension schemes, company deposits, debentures, derivatives and commodity futures (1 per cent) as investment vehicles for the urban households.

Among the rural households, not even one per cent of the survey respondents were investors, while even the awareness about mutual funds and equities was dismal at just 1.4 per cent. However, 95 per cent of rural survey respondents had bank accounts, 47 per cent life insurance, 29 per cent post office deposits and 11 per cent saved in precious metals.

On a positive note, the survey found the investor base in India is increasing as nearly 75 per cent of the investors in the Sebi Investor Survey 2015 participated in the securities markets for the first time within the last five years.

The survey was commissioned in the year 2015 and got completed last year, while its results were released today by the capital markets regulator. Nielsen, a global leader in primary research, has conducted and analysed this Sebi survey. The last survey was conducted in 2008-09.

Sebi said the survey first listed a set of 2,04,694 households and basic information about demographics, income, savings and investments were collected. In the second step, a subset of 50,453 amongst these listed households were chosen to conduct the final survey. The data was used to create an estimate of the total number of investing households at the end of 2015.

Using a bootstrapping methodology project, it was estimated that there were a total of 3.37 crore investor households in India. Of these, 70 per cent (2.37 crore) reside in urban areas while the other 1 crore were rural households.

Among these, mutual funds were the most popular investment instruments with nearly 66 per cent (or 2.2 crore households) investors. There were an estimated 1.9 crore households which invested in equities and 77 lakh household which invested in bonds (public, private and PSU).

STEEL INDUSTRY OUT OF WOOD

New Delhi, Apr 5 () India’s steel industry has come out of the stress, with the exports going up by 57 per cent and imports declining by 34 per cent, the government told the Rajya Sabha .

Steel Minister Chaudhary Birender Singh said the country’s steel output is at around 120 million tonnes and the government is aiming to achieve 300 million tonnes by 2030. “There was recession in globalsteel sector and it had an impact on India as well. Our steel industry was in stress for more than three years. But the situation has changed in last six months,” he said.

In the last six months, steel output has gone up by 15 lakh tonnes and exports have shot up by 57 per cent while imports have down by 34 per cent, he added.

He said modernisation and expansion work of steel PSUs — SAIL and RINL — is expected to be completed by December this year and the renovated plants would be able to achieve 70 per cent capacity utilisation in the next six months. On modernisation of steel PSUs, the minister said more than Rs 61,500 crore has been invested for expansion and modernisation of SAIL. “Barring Bhilai, modernization and expansion work is still going on. It is likely to be completed by December,” Singh said.

Some plants functioning after modernisation are able to achieve 40 per cent of the capacity utlisation, while some up to 70 per cent. “It takes time to ramp up production be it in Bhilai, Rourkela or Bokaro. It takes 2-3 years for complete ramp up. I am hopeful that in the next six months, we will be able to achieve 70 per cent capacity utlisation,” he noted.

USE OF DOMESTIC STEEL MANDATORY FOR INFRA PROJECTS

New Delhi: India is likely to mandate use of domestic steel for government infrastructure projects to boost demand for local companies and check cheaper imports.

The Steel Ministry is likely to take to the Union Cabinet this month a proposal that seeks to provide preferential treatment to steel made in India in government projects. It may also seek Cabinet approval forthe National Steel Policy (NSP), 2017 which seeks to double production as well as consumption and put forth strategies to overcome challenges like high input costs and financial stress facing the sector.

“We want to promote and encourage the growth of domestic steel industry and so we want that India-made steel should be given preference in government funded projects. A draft Cabinet note has already been initiated,” Steel Minister Chaudhary Birendra Singh said here.

He was addressing a national conference of secondary steel producers.

Asked whether the government plans to make it mandatory or on preferential basis, Singh said: “This should be taken on a preference basis. In government ministries and departments where the consumption of steel is more, like Railways, I want that on the preference basis, they should use steel made in India and it should be made part of the tender.” Singh added however that steel which is not available in the country can be imported.

There would be a quantum jump in the steel consumption once the proposal is approved, he said, adding Railways, urban housing, shipping and national highways are big customers. The government, he said, will spend Rs 4 lakh crore on infrastructure projects, which will boost steel demand.

On the new steel policy, Singh said: “We have already released the draft policy. We have also received feedback from stakeholders. We will include any good suggestions made by secondary steel producers. In this month only, we will send it to the Cabinet for approval”.

Through this policy, he said, the government plans to more than double the steel production capacity and per capita consumption from the present level.

In January, the ministry had released the draft policy to ensure that the steel sector follows a sustainable path of development in respect of augmenting capacity to 300 million tonnes by 2030-31 in environment friendly manner.

It is an effort to steer the industry to achieve its future potential and strategy to deal with various impediments like high input cost, availability of raw materials, dependency on imports and financial stress.

Check Also

Gulf News

Gulf

Colour a key driver when GCC buyers decide on purchasing cars Colour plays an important …

Leave a Reply