A slowdown in reforms in India over the past five years–and a virtual pause in procurement–may be about to change following renewed optimism and confidence as the new government shows, for the moment at least, that it is serious. As hectic activity takes place in the ministries of commerce, finance and defense, increasing manufacturing, exports and foreign direct investment (FDI) are focus areas of the new regime.
Foreign companies can now own 49 percent of Indian defense companies, following a change announced as part of the country’s budget statement on July 10. The budget was presented by Finance and Defense Minister Arun Jaitley, a member of the newly elected government. It includes an allocation of $38.17 billion for defense, a gain of 12.44 percent. Some $15.76 billion of this (up from $13.15 billion last year) is capital expenditure, used primarily for procurement.
As the U.S. expressed “concern” on Tuesday over the devaluation of China’s currency, making its exports cheaper but reducing the buying power of Chinese consumers, Chinese airlines continued to feel the pain of a weaker yuan as the value of their foreign debt rose with the relative strengthening of the U.S. dollar. China Southern Airlines, for one, on Tuesday issued a profit warning report estimating a first-quarter net loss resulting from negative foreign exchange fluctuations.
Indian commerce minister Anand Sharma announced the raising of the country’s cap on foreign direct investment (FDI) in 13 important industrial sectors, including defense. But while the defense industry was expecting the cap to be raised to 49 percent from the present 26 percent, Sharma said that defense proposals for more than 26 percent will be permitted only for state-of-the art technology.
As vendors await the announcement of belated contracts, India continues to grapple with its ever-changing defense procurement policy, with the latest–DPP 2013–announced and effective from June 1. The focus of DPP 2013 is on buying Indian defense products, even though these can fill only a fraction of the country’s requirements.
The Indian government has finally given in to demands to ease restrictions on foreign direct investment (FDI) in the country’s struggling airlines. The unexpected September 14 announcement clears the way for foreign carriers to take up to a 49-percent stake in Indian operators, with the exception of government-owned Air India. However, industry and financial analysts indicated to AIN that they view the policy U-turn cautiously, warning that it won’t necessarily mean salvation for cash-strapped carriers.
The NBAA Convention, to be held in late October in Orlando, Fla., will offer what the association bills as an “unprecedented chance” for attendees to have face-to-face discussions with people influential in aviation policies throughout Asia. As part of the show, the U.S. Trade and Development Agency (USTDA), Asia-Pacific Economic Cooperation (APEC) and U.S. Department of Transportation will sponsor a “reverse trade mission,” bringing regulators and policymakers from several Asian countries to Orlando for NBAA 2012 and then Washington, D.C., a few days after the convention.
The World Trade Organization (WTO) has rejected much of Airbus’s July 2010 appeal against its ruling that the European airframer has unfairly benefitted from subsidies, but its May 18 judgment still leaves plenty of scope for the protagonists to argue over how it gets interpreted.
The Office of the United States Trade Representative (USTR) yesterday appealed to the World Trade Organization (WTO) Appellate Body two findings in the panel report on European subsidies (EU) to Airbus in late June. In its appeal, the U.S.
International Water-Guard Industries (IWG) is “adjusting its pricing and business policies in response to the unprecedented shift in exchange rates between the U.S. and Canadian dollar.” According to IWG president and CEO David Fox, the Burnaby, British Columbia-based company has raised its U.S. prices by 7 percent “while working with non-U.S.
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