Embassy of India

-- A Monthly Economic Newsletter

Vol.5. No.6
June 15, 2004


Norden Shipping Line Contemplates Indian Branch Office

The reputable Danish shipping company Dampskibsselskabet Norden A/S is considering the possibility of  placing its fifth international office in India - in addition to its existing offices in Annapolis, Rio de Janeiro, Shanghai, and Singapore. Norden’s Managing Director, Mr. Steen Krabbe is of the view that the change of  government in India augurs well for the shipping industries, and that the liberal outlook of India’s new  Prime Minister Dr. Manmohan Singh improves the odds in favour of preserving focus on infrastructure and transport.

Already, more ships from Norden’s fleet touch at Indian ports than at Chinese. In the present scenario,   Norden’s dry cargo vessels primarily carry coal to India and in turn transport steel ore and cement from India to China.

Trends in Exchange Rates 

Average monthly exchange rate figures indicate that the Rupee appreciated by 2.4% against the Dollar in month of April 2004 alone - the second-highest    escalation after the 3.5% appreciation in February 2004. Overall, the Rupee has appreciated by as much as 10.3% against the Dollar since May 2002, whereas it has depreciated by 17.3% against the EURO, by 10.8% against the Pound, and by 5.3% against the Yen.

Trends in Merchandise Trade 

India’s merchandise trade grew by 21.4% to touch US$ 137 billion in the fiscal year 03-04. Merchandise       exports grew by 17.3%, reaching a total value of US$ 61.8 billion, while merchandise imports went up by 25%, taking the total import value to US$ 75.2 billion.

Inflation Rates 

A point-to-point comparison of the wholesale price   index shows that inflation levels have softened with the rates going down to 4.5% in the fiscal year 03-04 from 6.5% in FY 02-03.

Further Increase in Foreign Exchange Reserves

India’s Foreign Exchange Reserves increased by US$ 22.0 billion in the fiscal year 02-03 and by a further US$ 36.9 billion in FY 03-04. The increase in the first month of FY 04-05 was US$ 5.5 billion. As on May 21st 2004, India’s total Forex Reserves, therefore, stood at US$ 118.57 billion. 

Buoyant Indian GDP Growth Rate Estimates

While the Central Statistical Organization places  India’s GDP growth rate estimate for the fiscal year April 03 - March 04 at a level as  high as 8.1%, the Asian Development Bank (ADB) predicts an   Indian GDP growth between 7.4% and 7.6% during the  current fiscal (April 04 - March 05), expecting the momentum to continue in the next two years as well. On its part, the National Council of Applied        Economic Research feels that India’s GDP growth rate should reach around 7.1% for the current fiscal.



India-Denmark Trade Statistics

   April 2003-March 2004
           (Financial year)             

India's Exports to Denmark 2037.38
India's Imports from Denmark 1562.58
Total Trade 3599.96
Trade Balance + 474.80

January - March 2004
           (Calendar year)             

India's Exports to Denmark 608.29
India's Imports from Denmark 418.98
Total Trade 1027.27
Trade Balance + 189.31

IFC Plans to Float Rupee Bonds

Encouraged by the soft interest rate regime pursued by India during the past five years, the World Bank and its private lending arm the International Finance Corporation (IFC) are planning to float rupee-denominated bonds worth US$ 100 million each. According to senior officials of the two multilateral agencies, these bonds are   expected to be raised when market conditions are favourable. All clearances for the bonds have been obtained.

(All Figures in Danish Kroners)

Following are the highlights of the new Indian Government’s

Common Minimum Programme

Foreign Investment

· Foreign Direct Investment (FDI) will continue to be encouraged and actively sought particularly in areas of infrastructure, high technology, and exports and where local assets and employment are created on a significant scale. The country needs and can easily absorb at least two to three times the present level of FDI inflows.

· Foreign Institutional Investors (FIIs) will continue to be encouraged while the        vulnerability of the financial system to the flow of speculative capital will be reduced.

· Overseas investments in the hydrocarbon industry will be actively encouraged.

Economic Growth

· To ensure that the economy grows at least 7%-8% per year in a sustained manner.

· To unleash the creative energies of our entrepreneurs, businessmen, scientists,        engineers, and all other professionals and productive forces of the society.

· The highest investment, credit, and technological priority to the continued growth of agriculture, dairying, and agro-processing.

· Service industry will be given all support to fulfil its true growth and employment potential.

· Textile industry will be enabled to meet the new challenges imposed by the abolition of quotas under the international multi-fibre agreement in January 2005.

Economic Reforms

· Commitment to economic reforms with a human face, that stimulates growth,        investment, and employment. Further reforms are needed and will be carried out in agriculture, industry, and services.


· Highest priority to the development and expansion of physical infrastructure like roads, highways, ports, power, railways, water supply, sewage treatment, and       sanitation. Public investment in infrastructure will be enhanced, even as the role of the private sector is expanded.

· Increased role for private generation of power and, more importantly, power            distribution.


· Generally, profit-making companies will not be privatized.

· All privatization will be considered on a transparent and consultative case-by-case basis.

· Loss-making companies will either be sold off or closed after due compensation to workers.


CMP is by no means a comprehensive agenda. It is a starting point that highlights the main priorities, policies and programmes.

Inside This Issue

World Bank/IFC Plans to Float Rupee Bonds


Buoyant Indian GDP Growth Rate Estimates


Further Increase in India’s Foreign Exchange Reserves


Norden Shipping Line Contemplates Indian Office


Rapid Expansion of India’s Telecom Network


New Commercial Indian Website Launched


India’s Tourism Sector Flourishing

Printpack India 2005
Aero India 2005



Motorola’s Indian Software Centre
to Develop Mobile Handsets

Global telecom equipment major Motorola has chosen its global software centre in India to design and develop new entry level mobile handsets, both GSM (global system for mobile communications) and CDMA (code division multiple access). The new handsets are   expected to hit the market in the year 2005.

New Commercial Indian Website

The Investment and Trade Promotion (ITP) Division of the India's Ministry of External Affairs has recently launched a new, comprehensive website offering a variety of investment-, industry-, & trade-related information as well as a ‘Guide for Business Visitors’, ‘Latest Economic Trends’, an Economic Profile of India, Profiles of Indian States, and Sector-wise Profiles.

The site is  designed, developed, and maintained by the Federation of Indian Chambers of Commerce &    Industry (FICCI). Representatives of Danish trade and industries are urged to visit this site at:


Rapid Expansion of  India’s Telecom Network

The fiscal 2003-2004 was a landmark year to India’s tele-communication sector. 21.7 million new lines were added to the country’s tele-communication    network during the year, more than double the 8.9 million lines added in the fiscal year 2002-2003. Line additions in 2003-2004 exceeded the total number of lines existing in India only six years back.


Aero India 2005 - 5th International Aerospace Exposition

(February 9th—13th 2005)

Air Force Station Yelahanka,

Organized by

Ministry of Defence,
Government of India in close cooperation with the
Indian Air Force and Ministry of Civil Aviation.

Published by Embassy of India, Copenhagen, 15, Vangehusvej, 2100 Copenhagen Tel: 39290854 Fax: 39270218 Email:



 8th International Exhibition on

Printing & Packaging Technology

Showcasing India’s

Graphic Arts Industry

 (January 18th -  23rd 2005)


Pragati Maidan, New Delhi


 (in collaboration with the Indian Printing, Packaging, & Allied Machinery Manufacturers’ Association (IPAMA))

India Trade Promotion Organization
Pragati Bhawan, Pragati Maidan
New Delhi-110001
Phone: 00 91 11 23 37 15 82
     Fax: 00 91 11 23 37 14 59

 Contact Executive:

Mr. Amrit Singh
Deputy General Manager
(Domestic fairs Division)

International Conference on



 (October 11th - 13th 2004)



India Habitat Centre
Lodhi Road, New Delhi



Consultancy Development Centre
Technical Consultancy Development
Programme for Asia & the Pacific
India Habitat Centre
East Court, Zone 4 B
Lodhi Road, New Delhi-110003
Phone: 00 91 11 24 64 82 68
    Fax: 00 91 11 24 60 26 02

Contact Executive:
Mr. Somenath Ghosh, Secretary General


Tourist Arrivals in India to rise by 25%

Despite the negative events worldwide, Indian tourism industry has not been adversely affected. Foreign tourist arrivals in India are tipped to rise by 25% this year, thanks to the revival of tourism in Jammu & Kashmir, a boom in southern states such as Goa and Kerala, and a series of promotions led by the 300th anniversary  celebrations of the Taj Mahal.

In the first three months of the calendar year 2004, foreign tourist arrivals in India have already gone up by 16% compared to the first quarter of 2003. This trend is expected to continue with the liberalization of   chartered flights and India emerging as a safe, all-round, year-round destination.

Thus foreign exchange earnings from tourism have registered a sharp increase. After recording a 23% rise in calendar year 2003, forex earnings during January-March 2004 have gone up by 21% compared to the  corresponding period of 2003.

In the light of these developments, the World Travel & Tourism Council (WTTC) has listed India amongst the Top 10 travel and tourism economies in the world, placing India second among the fastest growing tourism economies with an annualized real growth of 8.8%.