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☆ Exclusive: India's LIC plans investment exposure caps post Adani share rout
▼ + stars: | 2023-03-24 | by ( Nikunj Ohri | ) www.reuters.com time to read: +3 min

After the Adani group lost over $100 billion in valuation post scathing allegations by U.S.-based Hindenburg Research, state-run LIC was criticized for having over $4 billion exposure to companies from the group. "LIC is looking to have 'boundary conditions' on its investments that would limit its exposure to scrips," said the source. The caps, once approved by the LIC board, would further limit the insurer's exposure. The move is aimed at strengthening investment strategies, and fence LIC from public criticism of its investment decisions or exposure to entities like the Adani group, the second source said. LIC had invested 301.2 billion rupees in shares of Adani group companies, and has a debt exposure of 61.82 billion rupees.

☆ India likely to propose removing long-term tax benefits for debt mutual funds - source
▼ + stars: | 2023-03-24 | by ( ) www.reuters.com time to read: +2 min

As such, the tax rate applicable would be based on the income tax slab in which the investor falls. Currently, investors in debt funds pay income tax on capital gains according to the income tax slab for a holding period of three years. "Debt mutual funds had a favourable tax regime as compared to banks' fixed deposits and small savings," Amit Maheshwari, a tax partner at AKM Global said, adding now debt mutual funds will be taxed at par with other investments. "This could impact debt mutual funds investments in corporate bonds." Mutual funds provided liquidity to debt investors, and the move is counter-productive to efforts for deepening bond markets in India, said Edelweiss' Gupta.

NEW DELHI, March 20 (Reuters) - India plans to extend restrictions on the export of diesel and gasoline after the current fiscal year ends this month to ensure the availability of refined fuels for the domestic market, two government sources with direct knowledge of the matter said. That forced state refiners to fill the void and meet demand at home by selling fuels at government-capped lower prices. "We would like to extend it ... we want private companies to sell diesel and petrol in the Indian market. Why should only state-run companies suffer when all Indian refiners are buying discounted Russian oil," the official said. Reporting by Nidhi Verma and Nikunj Ohri; Editing by Jacqueline WongOur Standards: The Thomson Reuters Trust Principles.

☆ India's money laundering rules to apply to crypto trade - gov't notification
▼ + stars: | 2023-03-08 | by ( ) www.reuters.com time to read: +1 min

MUMBAI, March 8 (Reuters) - India's money laundering laws will apply to trade in cryptocurrencies, the federal government said in a notification dated March 7. The exchange between virtual digital assets and fiat currencies, the exchange between one or more forms of virtual digital assets and the transfer of digital assets will be covered under money laundering laws, the notification said. The safekeeping or administration of virtual digital assets and the participation in financial services related to the offer and sale of virtual digital assets will also be covered, the notification added. The Reserve Bank of India has said that cryptocurrencies should be banned as they are akin to a Ponzi scheme. Extending India's money laundering rules to cryptocurrencies will give authorities greater authority in monitoring the transfer of these assets beyond the country's borders.

☆ India finance minister: RBI will take action as required to keep inflation within expected limits
▼ + stars: | 2023-02-20 | by ( ) www.reuters.com time to read: 1 min

Feb 20 (Reuters) - The Reserve Bank of India will take necessary steps to manage inflation within "expected limits,' Finance Minister Nirmala Sitharaman said on Monday. "In emerging markets, the situation is unique to each of the countries. In that I think, RBI is watching the Indian economy and taking a call as and when it is required," Sitharaman said. Sitharaman was speaking in a post budget industry event in Jaipur. Reporting by Nikunj Ohri; Editing by Kim CoghillOur Standards: The Thomson Reuters Trust Principles.

☆ India cuts windfall tax on crude, aviation turbine fuel and diesel
▼ + stars: | 2023-02-16 | by ( ) www.reuters.com time to read: +1 min

BENGALURU, Feb 16 (Reuters) - India has cut its windfall tax on crude oil and exports of aviation turbine fuel and diesel, according to a government notification dated Feb. 15. Windfall tax on crude was cut to 4,350 rupees ($52.60) per tonne from 5,050 rupees per tonne, effective Thursday. The government also cut export tax on aviation turbine fuel to 1.50 rupees per litre from 6 rupees per litre, and reduced export tax on diesel to 2.50 rupees per litre from 7.50 rupees per litre, the notification said. India had in July imposed the windfall tax on crude oil producers and levies on exports of gasoline, diesel and aviation fuel after private refiners wanted to make gains from robust refining margins in overseas markets, instead of selling it cheap at homeThe cuts came as Indian refiners continued to stock up discounted Russian fuel amid a steady increase in domestic consumption. ($1 = 82.7010 Indian rupees)Reporting by Nallur Sethuraman in Bengaluru and Nikunj Ohri in New Delhi; Editing by Sohini GoswamiOur Standards: The Thomson Reuters Trust Principles.

☆ G20 exploring cryptocurrency regulation, India's finance minister says
▼ + stars: | 2023-02-11 | by ( Nikunj Ohri | ) www.reuters.com time to read: +1 min

Feb 11 (Reuters) - The Group of 20 (G20) big economies is exploring whether the group could collectively regulate cryptocurrencies, Finance Minister Nirmala Sitharaman said on Saturday. Given the sophisticated technologies involved with these virtual assets, countries must discuss whether a given regulation is needed, said Sitharaman, whose country is this year's G20 president. Prime Minister Narendra Modi's government has for several years debated drafting a law to regulate or even ban cryptocurrencies but has not made a final decision. India will host G20 finance ministers and central bank governors this month. The Reserve Bank of India has said that cryptocurrencies should be banned as they are akin to a Ponzi scheme.

The Adani Group has denied any wrongdoing. "Depending on the outcome of the MSCI review, we could see more pressure on select Adani group stocks." "This determination has triggered a free float review of the Adani Group securities." Adani Group did not respond to a Reuters request for comment. They accuse his government of giving undue favours to the Adani Group, a charge denied by the government and the company.

LIC and EPFO have combined assets under management of 50 trillion rupees ($604.87 billion). The power and finance ministries, the LIC, PFC and REC did not reply to emails seeking comment. A third government official said the finance ministry was looking at steps to push climate financing. "The investment committee of LIC will have the flexibility to tweak their investments accordingly," Singh said. The power ministry has asked the three power financiers to extend foreign currency loans to Indian borrowers for payment to overseas vendors in order to save hedging costs.

New Delhi, Feb 4 (Reuters) - Foreign portfolio investors will lose a preferential tax rate on interest from Indian government securities and corporate and foreign currency bonds, a senior tax official said on Saturday. Foreign portfolio investors have been enjoying a lower 5% tax on interest earned on bonds since 2013, making investments in the country more attractive. Ending this treatment would require them to pay a 20% tax on interest income from July 1. The task force, reviewing India this year, is "much concerned about trusts because it becomes a route... for illegal activities, money laundering," he said. India's $550 billion budget, unveiled on Wednesday, proposes a series of changes for charitable trusts that include regular registration to access tax benefits.

Spokespeople for SEBI and Adani Group did not immediately respond to requests for comment. Among several allegations, Hindenburg accused Adani Group last week of using offshore tax havens and stock manipulation. On Tuesday, Adani Group mustered support from investors for a $2.5 billion share sale for Adani Enterprises, in what some saw as a stamp of investor confidence at a time of crisis. Reuters Graphics[1/5] Indian billionaire Gautam Adani speaks during an inauguration ceremony after the Adani Group completed the purchase of Haifa Port in Haifa port, Israel January 31, 2023. The U.S. dollar-denominated bonds of Adani Ports maturing in February 2031 led the losses, falling 3.59 cents to 67.58 cents.

☆ India to focus on growth, jobs in last full budget before 2024 election
▼ + stars: | 2023-02-01 | by ( ) www.reuters.com time to read: +2 min

[1/4] India's Finance Minister Nirmala Sitharaman holds up a folder with the Government of India's logo as she leaves her office to present the federal budget in the parliament, in New Delhi, India, February 1, 2023. REUTERS/Adnan AbidiNEW DELHI, Feb 1(Reuters) - India will focus on economic growth and job creation, the finance minister said on Wednesday presenting the government's last full budget in parliament before a general election due next year that Prime Minister Narendra Modi is projected to win. The aim is to have strong public finances and a robust financial sector for the benefit of all sections of the country, Nirmala Sitharaman said. She added that despite a global slowdown because of the COVID-19 pandemic and the Russia-Ukraine war, the Indian economy was "on the right track". Sitharaman is expected to lower the government's fiscal deficit while announcing spending and other measures to keep India as one of the fastest-growing major economies in the world.

On Tuesday, the Adani group appeared to have fought back the attack by the New York-based short-seller Hindenburg and rallied investors behind the $2.5 billion share issue of flagship firm Adani Enterprises (ADEL.NS). It was a rare defeat for a man who has seemed unstoppable in recent years. In recent years, the $220 billion Adani Group empire has attracted foreign investment - France's TotalEnergies (TTEF.PA), for example, partnered with Adani last year to develop the world's biggest green hydrogen ecosystem. On Wednesday, Adani said his company felt it wasn't "morally correct" to proceed with the share sale following the volatility in the market. But he said in a statement to the exchange the company was financial stable and that the withdrawal of the share issue will not impact its future plans.

☆ India's LIC has no plans currently to bid for more in Adani share sale- source
▼ + stars: | 2023-01-30 | by ( Nikunj Ohri | ) www.reuters.com time to read: +1 min

NEW DELHI, Jan 30 (Reuters) - India's state-backed Life Insurance Corp (LIC) (LIFI.NS) has no current plans to bid in the ongoing $2.5 billion secondary share sale of Adani Enterprises (ADEL.NS), a source with direct knowledge of the matter told Reuters on Monday. read moreLIC, the country's largest insurer, took 5% of Adani share offering's anchor portion of $736 million, but has no plans to bid for more in the ongoing book building process that closes Tuesday, the source said. Hit by weakened sentiment after the Hindenburg report, Adani Enterprises shares closed at 2,892.85 rupees ($35.51) on Monday, well below the offer price range of 3,112-3,276 rupees per share. LIC is taking a cautious approach and the board had only approved the anchor bid, the source said. LIC already holds a 4.23% stake in the flagship Adani firm, while its other exposures include a 9.14% stake in Adani Ports and 5.96% in Adani Total Gas.

☆ Exclusive: India's LIC reviewing Adani response to short seller's allegation
▼ + stars: | 2023-01-30 | by ( Nikunj Ohri | ) www.reuters.com time to read: +2 min

[1/2] Life Insurance Corporation of India (LIC) logo is seen displayed in this illustration taken February 20, 2022. REUTERS/Dado Ruvic/Illustration/FilesNEW DELHI, Jan 30 (Reuters) - India's Life Insurance Corporation (LIC) (LIFI.NS) said on Monday it was reviewing the Adani Group's response to scathing criticism by a U.S. short-seller and would hold talks with the group's management within days. State-run LIC, the country's largest insurer, says it has invested 364.7 billion rupees ($4.47 billion) in Adani companies, about 1% of its assets under management. "Of course we are studying the 413-page reply given by Adani Group," Kumar said. ($1 = 81.6120 Indian rupees)Reporting by Nikunj Ohri Editing by David Goodman and Raju GopalakrishnanOur Standards: The Thomson Reuters Trust Principles.

New Delhi, Jan 27 (Reuters) - India's federal government is likely to keep its gross market borrowing below 16 trillion rupees ($196 billion) for 2023/24 as it does not want to destabilise the bond market with any negative surprises, two sources close to the deliberations said. "Feedback from the market participants is that a borrowing of 15.5-16 trillion rupees can be absorbed well in the next financial year," one of the officials told Reuters. The government has so far raised 12.93 trln rupees up to Jan. 27, which is 91% of the overall gross borrowing target of 14.21 trillion rupees in the 2022/23 fiscal year which ends on March 31. Traders are waiting for the Union budget on Feb. 1, with the government's fiscal consolidation path and its borrowing calendar for fiscal year 2024 set to be the next market-moving trigger. In a Reuters poll, economists forecast the government will borrow a record 16 trillion Indian rupees in the fiscal year to March 2024 on higher infrastructure spending.

Adani, whose home state is Gujarat in western India, built his business empire from scratch after starting as a commodities trader. Adani's business empire grew rapidly and his wealth ballooned. In recent years, the $220 billion Adani Group empire has attracted foreign investment - France's TotalEnergies (TTEF.PA), for example, partnered with Adani last year to develop the world's biggest green hydrogen ecosystem. It is not known what was discussed and Adani Group did not respond to a request for comment on Friday. Adani Group's consolidated gross debt stands at $23.34 billion, Jefferies says.

The government plans to raise 160 billion rupees through green bonds for the current fiscal ending March 31, with the first tranche of 80 billion rupees scheduled for auction on Wednesday. "The expectation of a green premium is in line with 'greenium' that issuers have got globally," said one of the two sources. "Green bonds should command a premium because of the mandates to invest in these securities. The RBI will auction 40 billion rupees each of five-year and 10-year green bonds. "It will be advisable to appoint an external auditor with an oversight by CAG (Comptroller and Auditor General) for utilisation of green bond proceeds."

☆ India's December wholesale inflation eases to nearly a 2-year low
▼ + stars: | 2023-01-16 | by ( ) www.reuters.com time to read: +1 min

NEW DELHI, Jan 16 (Reuters) - India's annual wholesale price inflation (WPI) (INWPI=ECI)eased to its lowest levels in nearly two years, helped by a sharp fall in vegetable prices. Government data on Monday showed WPI inflation for December was 4.95% year-on-year, lower than the Reuters forecast of 5.60% and 5.85% recorded in the previous monthFood index rose 0.65% in December, with prices of vegetables falling nearly 36% year-on-year. In November, the food index rose 2.17%. "Low manufacturing inflation is a reflection of cooling global commodity prices. December WPI inflation was lowest since February 2021, according to Refinitiv data.

☆ India lets banks use face recognition, iris scan for some transactions - sources
▼ + stars: | 2023-01-13 | by ( Nikunj Ohri | ) www.reuters.com time to read: +2 min

NEW DELHI, Jan 13 (Reuters) - The Indian government is allowing banks to verify individual transactions that exceed a certain annual limit using facial recognition and an iris scan in some cases, in a bid to reduce fraud and tax evasion, three sources told Reuters. The prospect of banks using facial recognition has concerned some privacy experts. "This raises substantial privacy concerns especially when India lacks a dedicated law on privacy, cybersecurity and facial recognition," said Pavan Duggal, an advocate and cyber law expert. The government has said it is targeting parliamentary approval of a new privacy law by early 2023. The Aadhaar card has a unique number tied to an individual's fingerprints, face and eye scan.

☆ Indian government gets bids for majority stake in IDBI bank
▼ + stars: | 2023-01-07 | by ( ) www.reuters.com time to read: +1 min

NEW DELHI, Jan 7 (Reuters) - The Indian government has received multiple bids for a majority stake in IDBI Bank (IDBI.NS), an official said in a tweet on Saturday, after the deadline for expressions of interest closed earlier in the day. The government, which owns 45.48% of IDBI Bank, is looking to divest a 30.48% stake in the lender, alongside state-owned Life Insurance Corp of India (LIC) (LIFI.NS), which will sell a 30.24% stake from its holding of 49.24% in the bank. Ahead of Saturday's deadline, India's market regulator this week allowed the government to reclassify its shareholding in IDBI Bank as "public" post sale, making it simpler for the new buyer to meet the minimum public shareholding norm. India's finance ministry on Monday also extended an exemption to the new buyer of IDBI Bank that allows it to maintain a 25% minimum public shareholding in the lender. The time limit to increase the public shareholding in the lender would be specified in due course, the government said.

The government uses the estimates as a basis for its growth and fiscal projections for the next budget due on Feb. 1. Since September, economists have been cutting their 2022/23 growth projections to around 7% due to slowing exports and risks of high inflation crimping purchasing power. India's nominal growth, which includes inflation, is projected to be at 15.4% for 2022/23, up from an earlier 11.1% estimate. "The nominal GDP growth is higher, implying that the government's fiscal deficit target will be achieved," said Sabnavis. "Buoyant albeit mixed domestic consumption should help to stave off some of the pain arising from weak exports during this period," Aditi Nayar, economist at ICRA.

Food and fertiliser subsidies alone account for about one-eighth of India's total budget spending of 39.45 trillion rupees this fiscal year, but reductions in food subsidies in particular may prove politically sensitive with elections looming on the horizon. The government expects to budget around 2.3 trillion rupees for food subsidies in the coming fiscal year, compared with 2.7 trillion rupees for the current year to March 31, the two officials said. Spending on fertiliser subsidies will likely fall to about 1.4 trillion rupees, according to one of the officials and a third government official. That compares with nearly 2.3 trillion rupees this year, the third official added. The finance ministry declined to comment, while the food and fertiliser ministries did not immediately reply to requests for comment.

☆ India's April-Nov fiscal deficit touches $118 billion
▼ + stars: | 2022-12-30 | by ( Nikunj Ohri | ) www.reuters.com time to read: +1 min

Dec 30 (Reuters) - India's fiscal deficit (INFISC=ECI) for April-November was 9.78 trillion rupees ($118.23 billion) or 58.9% of annual estimates, government data showed on Friday. Net tax receipts were 12.25 trillion rupees, while total expenditure was 24.43 trillion rupees, the data showed. The government's subsidy bill for food, fuel and fertiliser was 3.01 trillion rupees during April-November, nearly exhausting the 2022/23 budgeted amount of 3.18 trillion rupees. Reuters reported India's subsidy bill was expected to touch 5.5 trillion rupees this fiscal year on account of high food and fertiliser prices due to the war in Ukraine. In February, while presenting the annual budget, Finance Minister Nirmala Sitharaman set the fiscal deficit target at 6.4% of gross domestic product for 2022/23 starting April, compared to 6.7% in the previous fiscal year.

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