Here are some of the prominent events of the Indian business world in 2013:
Gold imports reduce drastically: There was a drastic fall in gold imports in 2013, mainly due to the government’s efforts to control the current account deficit (CAD). The introduction of the 80:20 rule (under which 20% of gold imported has to be compulsorily exported), and raised import duty on gold (now at 10%) also contributed to a net reduction of imports. The result is that India might not be the top importer of gold in 2013, that distinction going to China. Read more here.
Global players MNCs like PepsiCo and Unilever increase investment in India: Large Indian companies may have decided to stay expenditure for now, but big global players have kept trust in India’s growth story. 2013 saw companies such as PepsiCo and Unilever raising their investment in India. The former is to put in $5.5 billion by 2020, while the latter raised its stake in Hindustan-Unilever (its Indian arm) by 14.78%. This year also saw big international brands such as Burger King, H&M and Ikea setting up shop in India. British retailer Marks & Spencer is one of several international retailers who have decided to step up their focus on the Indian markets. Read more here.
IT sector makes a sharp turnaround: India’s IT sector saw several ups and downs in 2013, such as N R Narayana Murthy coming out of his 11-year retirement to head Infosys again, and the US Immigration Bill, which proposes to drastically cut jobs of foreign nationals in the US and doubling the cost of H1-B visas. But once the US economy bounced back, this sector saw several new lucrative deals, and is expected to grow further. Read more here.
Rural economy rescues India: The country’s urban-rural divide is blurring. With rising incomes, rural India is fast catching up with its urban counterpart. In 2013, at a time when urban demand slowed due to high inflation, people in rural India spent their incomes on tractors, two-wheelers, cars, mobile phones, fast-moving consumer goods, and even personal care products. Several companies and sectors that would have taken a hit found their saviour in the hinterland. Read more here.
Uncertainty in telecoms sector: Despite attempts by the government to rescue the telecom industry, such as allowing 100% Foreign Direct Investment (FDI), it continues to be in a state of uncertainty. The failure of the 2G spectrum auction, and operators reducing discounts and raising call charges were among the low points of this sector this year. The end of the year did see some light, with some big deals happening, such as Bharti Airtel and Reliance Jio Infocomm’s comprehensive telecom infrastructure sharing arrangement. But the sector still has a long way to go. Read more here.
Fewer mergers and acquisitions: India witnessed a reduction in mergers and acquisitions (M&A) in 2013, both in value and in volume, as compared to 2011 and 2012. The economic slowdown, the fall of the rupee and political uncertainty ahead of the 2014 Lok Sabha elections are among the reasons that contributed to this, and there is unlikely to be any significant change in the first quarter of 2014. However, what is remarkable, according to experts, is the growth in investments in spite of private equity (PE) exits and the rupee depreciation. Read more here.