Indiaâ s Market Oulined by Atlantic International Partnership

The central government budget which set the tone for reducing fiscal deficit and
an unexpected increase in the policy rate to rein in inflation has convinced th
e markets and economists that India is on its way to having a robust economic gr
owth. Industrial output also continued to grow at a fast pace in January as comp
anies produced more cars and cement. In the fiscal year 2011 that ends in March
2011, GDP growth of 8.5% is achievable. Long-term predictions for the southwest
monsoons are expected to be normal, giving a boost to agricultural production an
d domestic demand.
Atlantic International Partnership (AIP) offers a comprehensive service giving y
ou, AIP investors and entrepreneurs access to Marketplaces in your region and ar
ound the World.
Inflation in India has been surging, driven by a low base and high food prices a
s the weakest monsoon rains in 37 years last year hurt farm output. Inflation ru
nning at 8.5% may have peaked and it is expected to ease by April as the winter-
sown crop comes to market. The year-on-year inflation rate for food articles was
16.22% in the week ending March 13, far above the comfortable zone for the cent
ral bank and the government. In order to manage the inflationary expectations, t
he central bank increased overnight lending and borrowing rates by 0.25 percenta
ges point each, making it one of the first major central banks to raise rates. T
he central bank further announced that it would continue to roll back its loose
monetary policy to manage prices, as the country canâ t have sustained strong growth
with high inflation. We expect a 0.25-percentage-point rate hike in mid-April an
d another increase of one percentage point through March 2011. The rebound in in
dustrial activity also saw a surge in Indiaâ s exports for the third month running in
January. Exports in January rose 11.5% from a year earlier to $14.34 billion, a
fter having increased 9.3% to $14.61 billion in December. Imports increased 35.5
% in January to $24.70 billion while oil imports rose by 56% to $7.05 billion. N
on-oil imports, a barometer of investment activity, grew 28.8% to $17.65 billion
.
On the back of robust economic numbers and policy pronouncements, the rating age
ncy Standard & Poorâ s raised its rating outlook to stable, expecting the fiscal situ
ation to recover and growth to remain strong in the coming years. The governmentâ s c
ommitment to follow the recommendations of the 13th Finance Commission, as well
as its move to reduce fertilizer subsidies and raise domestic fuel prices were t
aken as positive indicators. The countryâ s external position continues to be in a co
mfortable zone.
AIP investors are uniquely dynamic individuals or groups of individuals. AIP inv
estors invest their capital in new or early stage companies. We have found that
AIP investors are not a source of capital alone but we have found them to make e
xcellent mentors. As most AIP investors are in fact successful entrepreneurs or
business people themselves we have found that they are able to offer entrepreneu
rs advice and helpful suggestions based on the experience that they have accumul
ated from their own businesses.
It is unlikely that India will benefit from the Google-China spat as the Indian
government will not provide the kind of benefits China extends to the manufactur
ing sector in China. But some relocation is likely to emerge. For example, Ameri
can companies GoDaddy and Dell have threatened to pull out of China and relocate
themselves in India.