Oil price biggest risk for Indian economy: Moody's survey
Mumbai, July 4 : A majority of Indian and foreign investors consider that high oil prices have emerged as a significant risk to the country's economy, Moody's Investors Service said on Wednesday.
The US rating agency's report is based on a survey of 175 respondents, including from over 100 financial institutions at the annual India Credit Conference in Mumbai and Singapore held in June.
Investors were asked questions on issues like top risks facing the Indian economy, fiscal deficit, the recapitalizsation package for public sector banks and credit conditions for Indian corporates among others.
"Most of the respondents highlighted high oil prices as the top risk while 30.3 per cent of those in Singapore picked rising interest rates as the next top risk and 23.1 per cent of those in Mumbai picked domestic political risks as the second top risk," Moody's Vice President Joy Rankothge said in the report.
Most respondents said they believed India would not meet the central government's fiscal deficit target of 3.3 per cent of GDP for the current fiscal.
While only 23.3 per cent of the investors in Singapore and 13.6 per cent in Mumbai felt that the fiscal targets would be achieved, 84.7 per cent in Mumbai and 76.7 per cent in Singapore expected some fiscal slippage.
On the government's bank recapitalisation plan, 85.7 per cent in Singapore and 93.6 per cent in Mumbai thought that it was insufficient to resolve the non-performing assets (NPA), or banks' bad loans, challenges.
In this connection, while 59.6 per cent of the attendees in Mumbai thought that banks will be unable to raise capital from the markets, 32.1 per cent in Singapore felt the same way.
Respondents in both locations said funding conditions will be one of the top factors driving the outlook for non-financial corporates - 38 per cent in Mumbai and 34.6 per cent in Singapore.
According to the report, 28 per cent of respondents in Mumbai selected the resumption of capital investment as the second key factor affecting credit outlook while only 11.5 per cent felt this way in Singapore.
In contrast, 26.9 per cent of the Singapore attendees selected government policy and reforms as the second most important factor affecting the credit outlook, compared with 22 per cent in Mumbai.
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India to get first national security semiconductor fabrication plant
Wilmington (PTI): Under a transformative collaboration with the US, India will get a national security semiconductor fabrication plant that will produce chips for use in military hardware and next-generation telecommunications.
The India-US joint project was announced following talks between Prime Minister Narendra Modi and US President Joe Biden in Wilmington on Saturday.
A joint fact sheet on Modi-Biden talks said the two leaders "hailed" the semiconductor project as a "watershed arrangement".
It will be the first ever India-US semiconductor fabrication partnership.
It is the first time ever the US military has agreed to do a partnership for these highly-value technologies with India and it is a watershed moment as it is as significant as the civil nuclear deal, people familiar with the matter said.
"President Biden and Prime Minister Modi hailed a watershed arrangement to establish a new semiconductor fabrication plant focused on advanced sensing, communication, and power electronics for national security, next-generation telecommunications, and green energy applications," the fact sheet noted.
It said the "fab, which will be established with the objective of manufacturing infrared, gallium nitride and silicon carbide semiconductors, will be enabled by support from the India semiconductor mission as well as a strategic technology partnership between Bharat Semi, 3rdiTech, and the US Space Force."
The Fab becomes not only India’s first, but one of the world's first multi-material fabs for national security, the people cited above said.
The fact sheet said Modi and Biden praised combined efforts to facilitate resilient, secure, and sustainable semiconductor supply chains including through GlobalFoundries' (GF) creation of the GF Kolkata Power Center in Kolkata.
It said the project will enhance mutually beneficial linkages in research and development in chip manufacturing.
"The leaders welcomed steps our industry is taking to build safe, secure, and resilient supply chains for US, Indian, and international automotive markets, including through Ford Motor Company's submission of a Letter of Intent to utilize its Chennai plant to manufacture for export to global markets," the document said.
It said Modi and Biden commended ongoing efforts to build more expansive cooperation around 5G deployment and next-generation telecommunications.
This includes the US Agency for International Development's plans to expand the Asia Open RAN Academy with an initial USD 7 million investment to grow this workforce training initiative worldwide, including in South Asia with Indian institutions.
