India reported reduction in its foreign direct investments. The draft national e-commerce policy has been introduced and currently available for submission of comments by stakeholders. The news to cheer was India’s climb in global intellectual property index. The RBI’s forecast on India’s GDP growth was announced in its recent monetary policy committee meeting.
Dip in Foreign Direct Investment.
Foreign direct investment (FDI) into India contracted by 7 per cent to USD 33.49 billion during April-December in the current fiscal, according to commerce and industry ministry data. Foreign fund inflows during April-December 2017-18 stood at USD 35.94 billion.
The key sectors that received the maximum foreign investment during the nine months of the fiscal include services (USD 5.91 billion), computer software and hardware (USD 4.75 billion), telecommunications (USD (USD 2.29 billion), trading (USD 2.33 billion), chemicals (USD 6.05 billion), and the automobile industry (USD 1.81 billion).
Singapore was the largest source of FDI during April-December 2018-19 with USD 12.97 billion inflow, followed by Mauritius (USD 6 billion), the Netherlands (USD 2.95 billion), Japan (USD 2.21 billion), US (USD 2.34 billion), and the UK (USD 1.05 billion). A decline in foreign inflows could put pressure on the country’s balance of payments and may also impact the value of the rupee.
Draft National E-commerce Policy.
The Department for Promotion of Industry and Internal Trade has formulated Draft National eCommerce Policy. It may be noted that the Government had recently made significant amendments to the FDI policy on e-commerce and the plans for introducing this e-commerce policy had been reported by Asia Law Portal in December 2018.
The draft policy seeks to provide for consideration and discussion, a policy framework that will enable the country to benefit from rapid digitization of the domestic, as well as global economy. Comments/suggestions on the draft policy have been invited from stakeholders and the last date for receiving comments is March 09, 2019.
India Climbs on IP Index.
The U.S. Chamber of Commerce’s Global Innovation Policy Center (GIPC) recently released its International IP Index, “Inspiring Tomorrow,” which assesses the intellectual property (IP) environments of 50 world economies, representing 90 percent of global GDP. Covering all forms of IP, the report highlights movement in almost half the Index economies over the last year.
While there is still much room for continued improvement, India experienced its second consecutive year of growth in the IP global ranking, jumping eight places from 44th to 36th. Recognition of international standards of copyright protection and incentives for intellectual property have helped India jump eight places to 36th position on this International IP Index, the highest gain for any country this year.
“The improvement reflects important reforms implemented by Indian policymakers towards building and sustaining an innovation ecosystem for domestic entrepreneurs and foreign investors alike,” it said in a statement. The index ranks countries based on 45 indicators. India’s overall score has also increased substantially from 30.07% (12.03 out of 40) in the previous edition to 36.04% (16.22 out of 45) in the present edition.
Among the weaknesses, the index has cited barriers to licensing and technology transfer, including strict registration norms, limited framework for the protection of biopharmaceutical IP rights, patentability rules outside international standards, lengthy pre-grant opposition proceedings and previously used compulsory licensing for commercial and non-emergency situations as key hurdles.
RBI Forecast on Economic Growth.
The Reserve Bank of India recently released Minutes of the 15th Monetary Policy Committee Meeting. The report which covered various aspects of the Indian economy mentioned with respect to the growth outlook that the GDP growth for 2018-19 in the December policy was projected at 7.4 per cent (7.2-7.3 per cent in H2) and at 7.5 per cent for H1:2019-20, with risks somewhat to the downside.
The Central Statistics Office had estimated GDP growth at 7.2 per cent for 2018-19. The report further stated that looking beyond the current year, the growth outlook is likely to be influenced by the following factors. First, aggregate bank credit and overall financial flows to the commercial sector continue to be strong, but are yet to be broad-based.
Secondly, in spite of soft crude oil prices and the lagged impact of the recent depreciation of the Indian rupee on net exports, slowing global demand could pose headwinds. In particular, trade tensions and associated uncertainties appear to be moderating global growth. Taking into consideration the above factors, GDP growth for 2019-20 is projected at 7.4 per cent – in the range of 7.2-7.4 per cent in H1, and 7.5 per cent in Q3 – with risks evenly balanced.