Mar 18, 2013
Trade policy pill for deficit
Trade policy pill for deficit
The upcoming foreign trade policy is likely to announce measures to boost exports that will bring down the current account deficit. Interest sops, extension of focus market and focus product schemes and incentives to SEZs are among the measures being considered.
The annual supplement to the Foreign Trade Policy 2009-2014 is likely to be unveiled in early April. The government is likely to set an export target of around $375 billion for 2013-14, a marginal increase from the current fiscal, as shipments are expected to pick up with the global economy showing signs of recovery.
Mar 18, 2010
War chest to buy energy assets abroad
India is planning to set up a sovereign fund of about $20 billion to help state-owned ONGC to compete with its Chinese rivals in acquiring oil and gas assets abroad.
The oil and finance ministries are currently discussing the proposal in the backdrop of ONGC’s failure to acquire any assets last year and Beijing marching ahead, a senior oil ministry official said.
“We have proposed a $20-billion sovereign fund, but it is up to the finance ministry to work out the numbers and the model. There is unanimity of views in the government that such a fund should be set up as the country’s energy demands are expected to increase and acquisitions abroad are the only way to ensure energy security,” the official said. India’s foreign exchange reserves stood at $278 billion in the first week of this month.
Officials said the Chinese model would be studied closely by the government. China with $2.4 trillion of reserves has set up a $300 billion sovereign fund for energy and mineral assets.
R.S. Sharma, chairman and managing director of ONGC, said “such a fund would be very helpful in competing with China”.
Industry sources said “Beijing with its huge foreign exchange reserves gives low-interest loans to its companies to aggressively pursue the acquisition of overseas energy assets.”
ONGC Videsh Limited, the overseas arm of ONGC, can take investment decisions on its own up to a sum of Rs 300 crore. Beyond this, ONGC Videsh needs cabinet approval, which makes the bidding exercise time consuming.
Besides, in the absence of a sovereign fund, ONGC does not have the financial muscle to bid aggressively.
Officials said Chinese firms spent $32 billion last year buying oil, coal and metals assets abroad. ONGC, on the other hand, acquired only Britain’s Imperial Energy for $2.1 billion in December 2008.
In the past two years, Chinese firms have outbid ONGC in acquiring stakes in Swiss oil exploration firm Addax Petroleum, Iraq’s Halfaya and Zubair oilfields and Algeria’s Berkine Basin oilfields.
Earlier, government panels had proposed a sovereign fund to buy overseas assets. A committee headed by National Manufacturing Competitiveness Council chairman V. Krishnamurthy has asked the government to “establish a centralised fund for the acquisition of foreign companies or assets in various sectors.”
India is planning to set up a sovereign fund of about $20 billion to help state-owned ONGC to compete with its Chinese rivals in acquiring oil and gas assets abroad.
The oil and finance ministries are currently discussing the proposal in the backdrop of ONGC’s failure to acquire any assets last year and Beijing marching ahead, a senior oil ministry official said.
“We have proposed a $20-billion sovereign fund, but it is up to the finance ministry to work out the numbers and the model. There is unanimity of views in the government that such a fund should be set up as the country’s energy demands are expected to increase and acquisitions abroad are the only way to ensure energy security,” the official said. India’s foreign exchange reserves stood at $278 billion in the first week of this month.
Officials said the Chinese model would be studied closely by the government. China with $2.4 trillion of reserves has set up a $300 billion sovereign fund for energy and mineral assets.
R.S. Sharma, chairman and managing director of ONGC, said “such a fund would be very helpful in competing with China”.
Industry sources said “Beijing with its huge foreign exchange reserves gives low-interest loans to its companies to aggressively pursue the acquisition of overseas energy assets.”
ONGC Videsh Limited, the overseas arm of ONGC, can take investment decisions on its own up to a sum of Rs 300 crore. Beyond this, ONGC Videsh needs cabinet approval, which makes the bidding exercise time consuming.
Besides, in the absence of a sovereign fund, ONGC does not have the financial muscle to bid aggressively.
Officials said Chinese firms spent $32 billion last year buying oil, coal and metals assets abroad. ONGC, on the other hand, acquired only Britain’s Imperial Energy for $2.1 billion in December 2008.
In the past two years, Chinese firms have outbid ONGC in acquiring stakes in Swiss oil exploration firm Addax Petroleum, Iraq’s Halfaya and Zubair oilfields and Algeria’s Berkine Basin oilfields.
Earlier, government panels had proposed a sovereign fund to buy overseas assets. A committee headed by National Manufacturing Competitiveness Council chairman V. Krishnamurthy has asked the government to “establish a centralised fund for the acquisition of foreign companies or assets in various sectors.”
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