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WEEKLY NEWSLETTER GROUP1

1. GOVT CREATES 'JAPAN PLUS' TO FAST TRACK JAPANESE INVESTMENTS

"Japan Plus" team has been created in the Department Of Industrial Policy and Promotion (DIPP) to
facilitate and fast track Japanese investments. An outcome of the recently concluded visit of the Prime
Minister of India to Japan, the mandate of the Japan Plus team runs through the entire spectrum of
investment promotion research, outreach, promotion, facilitation and aftercare.
The government has also constituted a Core Group chaired by the Cabinet secretary on India-Japan
Investment Promotion Partnership. The commitment by Japan to invest $35 billion or 3.5 trillion YEN is
for infrastructure sector over five years. This will include ongoing projects such as the Delhi-Mumbai
Industrial Corridor or the Chennai-Bangalore Economic Corridor.
Apart from public and private investments, this amount would include Japanese Overseas Development
Assistance at a concessional rate. On Thursday, India and Japan also inked the bilateral advance pricing
agreement, which is expected to bring clarity on taxation issues between the two authorities.
Source:
1. http://www.business-standard.com/article/economy-policy/imp-rotn-pls-government-creates-japanplus-to-fast-track-japanese-investments-114100900980_1.html
2. http://economictimes.indiatimes.com/news/economy/policy/india-sets-up-japan-plus-investmentteam-to-speed-up-proposals/articleshow/44765782.cms

2. INDUSTRIAL OUTPUT GROWS SLOWER THAN EXPECTED AT 0.4% IN AUGUST

A weaker than expected growth in industrial production in August has been reported by the Indian
manufacturing sector. The output of 0.4% though was unchanged from July but significantly lower than
economists' expectation of a 2.2% increase. In August, manufacturing growth contracted to 1.4% as high
inflation, poor infrastructure, bureaucratic red tape and a slow pace of government policy-making hurt
confidence of investors and consumers.

The tepid industrial growth may increase pressure on the central bank to ease monitory policy earlier
than it plans. Though a 5.7% increase in gross domestic product has been reported in the three months
to June, which was the highest in more than two years.
Source:
1. http://www.nasdaq.com/article/indias-industrial-output-weaker-than-expected-in-august--update20141010-00401
2. http://www.livemint.com/Politics/rS1pg00dgB92KACosyCnfM/Industrial-output-growsslowerthanexpected-at-04-in-Augu.html?utm_source=copy

3. INDIA LIKELY TO JOIN ASIAN INFRASTRUCTURE BANK

Chinese President Xi Jingping has announced the formation of the Asian Infrastructure Bank (AIB).
Thought on the lines of the Asian Development Bank (ADB), it is expected to boost the infrastructure
financing in the region. The ADB, which was established in 1966, has Japan and the US as the greatest
shareholders followed by China and India respectively. Both Japan and the US have majority voting rights
at ADB and this had been a bone of contention with China, who had long been vying for a larger share.
The AIB has been announced as a measure to bring better economic growth to the region and to
effectively manage the flow of money. China would possess 42% of the voting rights, followed by India,
who has just confirmed to join the AIB, with 19% rights.
Source:
1. http://www.business-standard.com/article/opinion/a-new-source-of-funding-asian-infrastructureinvestment-bank-shakes-up-old-structures-114091000609_1.html
2. http://timesofindia.indiatimes.com/business/india-business/India-likely-to-join-Asian-infrastructurebank/articleshow/44455632.cms

4. CHINA'S GATEWAY TO GLOBAL FINANCIAL MARKETS IN DANGER?

Hong Kongs status as one of the world's most important financial centers could change if China reacts
too severely to pro-democracy protests currently disrupting the city. International companies appreciate

Hong Kong as a hub for carrying out business with China not just because it is a financial center, but
because of the secure legal conditions and the independence of the courts in the city.
The Hong Kong Stock Exchange (HKEx) is the sixth largest stock exchange in the world and the second
largest in Asia. The "special administrative region" is also the second-largest private equity center in Asia.
More than 70 of the world's 100 biggest banks operate in Hong Kong, and some two-thirds of all direct
foreign investments in China pass through this nerve center.
A violent crackdown on the pro-democracy demonstrators currently staging protests in the city center
could have extremely damaging consequences. If Hong Kong were to be damaged as a financial center
amid the current political unrest, it would considerably accelerate Shanghai's rise to become the most
important international financial hub in China - not just because the Chinese government will try to bring
this about, but also because Chinese and international demand will move in the direction of Shanghai. If
Hong Kong were to suffer a political setback, Singapore would profit from it. But the main beneficiary
would be Shanghai.
Source:
1. http://www.dw.de/is-chinas-gateway-to-global-financial-markets-in-danger/a-17972748
2. http://qz.com/272952/why-china-doesnt-feel-the-need-to-back-down-in-hong-kong/

3. RECENT TRENDS IN CRUCIAL ECONOMIC INDICATORS

Consumer prices in India rose to 7.8 percent annual in August of 2014, slowing slightly from 7.96 percent
in July. Food Inflation in India remained unchanged at 9.16 percent in August of 2014 from 9.16 percent
in July of 2014. GDP growth rate of 5.7 is a major recovery for the Indian economy. However monsoon
deficiency remains a cause of worry as it also affects non-agricultural sectors through demand effects.
Foreign Direct Investment in India decreased to 2390 USD Million in June of 2014 from 4753 USD Million
in May of 2014. Foreign Exchange Reserves in India decreased to $ 311427 Million in the week ended
October 3rd, 2014 from $ 314118.5 Million in the previous week.
Source:
1. http://www.tradingeconomics.com/india/inflation-cpi
2. http://www.tradingeconomics.com/india/food-inflation
3. http://www.tradingeconomics.com/india/gdp-growth-annual