India Newsletter

April, 2013

IIP GROWTH % (INDEX OF INDUSTRIAL PRODUCTION)

12 10 8 6 4 2 0 -2 -4 -6 -5 1.1 -3.5 -0.4 -1.3 -2 0.2 -0.6 -0.5 5.3 6.2 3.7 3.4 2.5 6 4.1 2.7 2.5 2.3 2.4 9.5 8.3

ECONOMIC AND POLITICAL NEWS

The Index of Industrial Production (IIP), in January 2013 improved to 2.4% yoy as compared to de-growth of 0.5% yoy in December 2012 and 1.0% yoy growth in January 2012. The rebound in IIP growth, after two straight months of contraction, can be attributed to a pick-up in manufacturing activity and electricity production. The Manufacturing sector, reported a 2.7% yoy growth during the month aided by a low base effect as compared to a growth of 1.1% yoy in January 2012 with 11 of the 22 industry groups in manufacturing registering a positive growth. Wholesale Price Index (WPI) inflation for February 2013 edged up to 6.8% as compared to 6.6% yoy in the previous month, rising by 0.6% mom largely driven by the rise in fuel index (3.0% mom). Core inflation receded for the sixth straight month to 3.8% yoy as compared to 4.1% yoy in the previous month, reflecting the decline in commodity prices and weak pricing power. India's current account deficit (CAD hit a record high of 6.7 percent of GDP in the last quarter (Oct-Dec12). The current account deficit has widened to $32.63 billion in the three months through December, compared to $22.3 billion in the September quarter. India's current account deficit at 6.7% is the highest in the last 5 years. It was 4.3% a year ago and 5.4% in the previous quarter. New Urea Investment Policy to boost expansion plan the recently approved New Urea Policy is likely to encourage fertilizer companies to set up new plants and expand existing capacities, thereby reducing dependence on imports. India currently imports ~30% of its urea requirement Passenger Car volumes down 26% YoY for Feb13 but growth momentum in Utility Vehicles continues. Weakness continues in Commercial Vehicle segment; down 11% YoY in February 13. Domestic Two-Wheeler volumes down 2.8% with all sub-segments showing weak growth. Three-Wheeler (passenger) segment benefits from fresh permits, registers 7% YoY growth

WPI % GROWTH (WHOLESALE PRICE INDEX)

9 8 7 6 5 4 3 2 1 0
JAN'12 FEB'12 MAR'12 APR'12 MAY'12 JUNE'12 JULY'12 AUG'12 SEP'12 OCT'12 NOV'12 DEC'12 JAN'13 FEB'13

6.9

7.4

6.9

7.2

7.6

7.6

7.5

8.1 7.3 7.3 7.2 6.6 6.8

QTRLY GDP GROWTH TRENDS%

10 9.2 9 8 7 6 5 4 3 2 1 0
1QY11 2QY11 3QY11 4QY11 1QY12 2QY12 3QY12 4QY12 1QY13 2QY13 3Qy13

8.5 7.6

8.2

8 6.7 6.1 5.3 5.5 5.3 4.5

ECONOMIC AND POLITICAL NEWS

Gas pricing policy to be reviewed, uncertainties removed: FM Govt plans to ease, scrap FDI sectoral limits Government to cut subsidies outgo to 1.5% of GDP by FY2017 Government plans to set up National Power Committee FDI inflow in Bangalore around US$9.3bn in last 10 years RBI (Reserve Bank of India) cuts repo rate by th 25basis points to 7.5% on 19 March Financial inclusion plan key criteria for new bank license: RBI Loans to PPP infra projects to be treated as secure loans: RBI Budget 'realistic', positive for ratings, says Moody's Current account deficit biggest concern: Chief Economic Adviser High inflation prompting more gold buys: RBI Share of exports in India's overall GDP rises to 17.7% in FY12 India will grow at 6% next year: World Bank Delinking of environment and forest clearances gets Supreme Court nod World Bank to lend $5 bn for poverty eradication Indirect tax collections rise by 20% in Apr-Feb Foodgrain output likely to dip 3.5% to 250MT in FY2013 India, Africa revise 2015 trade target upwards to US$100bn India's 2013-14 total food subsidy stands at `1,30,000cr (nearly 25 bln US$) FDI up 8% at US$2.2bn in January, 2013 India to install 1300-1400 MW solar power in 2013 Outbound deals of Indian companies at US$11bn in 2012 Telcos need `90,000cr capex (nearly 18 bln US$) for 100% teledensity in villages by 2020: E&Y Assocham Electrical equipment industry sees 11% fall in revenue Fertiliser subsidy payment of `31,580cr (nearly 5.6 bln US$) may remain outstanding Textiles Min asks firms to invest in technical textiles FIPB clears 12 FDI proposals worth `2,600cr (nearly 480 mln US$) Food processing sector got `6,198cr (nearly 1.2bln US$) FDI in less than 3 yrs Gujarat govt to develop India's first International Financial Services Centre
70 60 50 40 30 20 10 0

Import Export Growth Trend %

Export Import

May'11 June'11 Jul'11 Aug'11 Sep'11 Oct'11 Nov'11 Dec'11 Jan'12 Feb'12 Mar'12 Apr'12 May'12 June'12 Jul'12 Aug'12 Sep'12 Oct'12 Nov'12 Dec'12 Jan'13 Feb'13

-10 -20

INDUSTRY AND CORPORATE NEWS

Strides Arcolab finally sells speciality arm to Mylan for US$1.6bn Cipla plans US$512mn takeover of South Africa's Cipla Medpro Alembic Pharma gets US nod for antidepressant tablets Dr Reddy's launches anti-SRE drug in US Coal India sets 492 MT production target for FY2014 Coal India to set up ` 9,000cr (nearly 1.6 bln US$) power plant in Odisha Mahindra bets on maiden e-car launch ONGC (Oil & Natural Gas Corporation), Oil India may bid for Mozambique gas stake ONGC-led consortium to study feasibility of Mangalore LNG terminal ONGC (Oil & natural Gas Commission) ties up with BPCL (Bharat Petroleum Corporation Ltd) , Mitsui to set up LNG terminal at Mangalore 4,000 MW Mundra UMPP (Ultra Mega Power Project) fully operational: Tata Power RCF (Rashtriya Chemical Fertilizer) & SAIL (Steel Authority of India Ltd) stake sale offer done RIL(Reliance Industry Limited) teams up with Samsung, plans 4G phones for 5.5k INR. GVK, Aurizon to develop Oz basin infrastructure Viacom to buy TV18's residual stake in ETV's regional play Rajasthan Government, HPCL tie-up for `37,230cr (nearly US$7 bln) refinery JSW steel to raise US$600mn from overseas markets in next quarter Infosys expands footprint in Latin America, opens delivery center in Costa Rica NMDC (National Mineral development Corporation) eyes `10,000cr (US$1.8 bln US$) from stake sale in Nagarnar plant Bharti Airtel launches 4G services in Chandigarh, Mohali and Panchkula Apollo Global Management to sell 11% stake in Dish TV MRPL retracts Haldia PetChem buyout plan AAI (Airport Authority of India) to release deregistered KFA (Kingfisher Airlines) planes after government nod Ashok Leyland sells stake worth `216cr (nearly 40mln US$) in IndusInd Bank Hindalco, Vedanta in race to buy Rio Tinto's Iron Ore Company RIL to give up 4,266 sq km of KG-D6 block Amtek close to buying German company Neumayer Tekfor GMR may sell 5-star hotel at Hyderabad airport Wipro launches new platform for healthcare providers Visa Steel forms JV with SunCoke Energy Asian Paints to acquire 51% stake in Sleek Credit Suisse buys 1.56% stake in Emami for `141cr (nearly 26 mln US$) Investing in India to secure future growth; Panasonic Corp L&T to buy 50% in Future Generali Insurance Educomp Solutions sells its entire 50% stake in Eurokids Nalco, Mines Ministry inks MoU for higher production, sales
DISCLAIMER This report is solely for knowledge purposes. The information contained here has been obtained from sources which Expand In India believes to be reliable. The Company does not warrant that such information is accurate or complete.

MAJOR UPCOMING EVENTS

1. April 10- Import export Data 3. April 15- Monthly Wholesale Prices 2. April 12- Industrial Production YoY 4. Start of Corporate Results Announcements

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