Do it yourself

The foreign trade of India is presently standing at a critical threshold. A successful crossover will open abundant opportunities, while a failure will close many more doors. Before looking at the opportunity, it is pertinent to note the current state of affairs of our foreign trade. The broader picture of India's foreign trade could be summarized as follows: (a)    India's total exports have mostly ranged between $25bn and $30bn per month since 2011. (b)    India's total imports have mostly ranged between $35bn and $45bn per month since 2011. (c)     India's trade balance has consistently worsened since 2004, and is mostly ranging between $10bn and $15bn since 2011. (d)    India's non oil trade balance has worsened materially since 2004 and stands close to $100bn per annum. (e)     India's foreign trade growth has consistently lagged the overall GDP Growth since 2012. ...

Since I reviewed my investment strategy three months ago ( see here ), few things have changed in the economy and market place; the most noteworthy being the following: (i)     The economic slowdown has become more pronounced. Both consumption and investment demand have slowed to multiyear low levels. The government has admitted that this slowdown is unique in nature, since it is for the first time in India that a economic slowdown has been triggered by poor demand growth rather than the usual supply side constraints. Many corporates, especially consumer facing businesses like FMCG and Automobile have echoed similar views. However, the recognition of the unique character of the slowdown within the government has been quite delayed. This has resulted in some misdirected policy actions. (ii)    The government has started the process of restructuring of tax laws, beginning with the announcement of new structure of the corporate tax rates. This has ...