Oct Inflation falls to 7.45%, slowest in 8 months.....

Government data showed on Wednesday. India's wholesale price index (WPI) rose a slower-than-expected 7.45 percent in October from a year earlier.Analysts on average had expected an annual WPI rise of 7.96 percent. The annual reading for August was revised up to 8.01 percent.

India set to allow cheaper wines, cars from Europe !!!

Now one can hope to drive in the latest Audi or BMW at a considerably lower price as the government may lower the import duty to 30% in 2017 and scale it down further to 20% in 2020 as part of the Broad-based Trade & Investment Agreement (BTIA) with the 27 nation bloc. Similarly, customs duty on "high-end" wine is proposed to be slashed to 30% from near 150% levels now. Although the move may not be palatable to local players, for consumers, this could mean an endless party as anything that costs over $3.75 a bottle is likely to be subjected to lower import duty. The steep reduction will make life difficult life for local players, especially at a time when home-grown barons such as Vijay Mallya too have been forced to sell stakes to global giants. In case of automobiles, when to reduce import duty to 30% is a bone of contention. EU is demanding that the levy be slashed to that level in 2017 itself, while Indian negotiators had got the Trade & Economic Relations Committee headed by the prime minister to agree to the cut sometime around 2022. The current tariff for import of automobiles is 100%, although the notified rate, which is applied to new cars, is 60%.

Rupee falls to 2-month low, erases post-reform gains !!!

The rupee fell to its lowest in early two months after data showing a record trade deficit and a contraction in factory output stoked fears about economic growth at a time of continued high inflation. The rupee's fall to as low as 55.12 to the dollar has erased a rally sparked by the government's announcements of a slew of fiscal and economic reforms in mid-September that took the local currency to as high as 51.32 to a dollar on Oct 5. However, the rupee has steadily slipped since that peak, as investors resumed their focus on an economy set to grow at its slowest pace in a decade and on little prospects of immediate rate cuts as Reserve Bank of India retains its focus on inflation. The trade deficit "is negative on the rupee. The uptrend in headline WPI into 8 per cent has come into radar now. The rupee will need strong support from the euro to prevent extended weakness beyond 55.10," said Moses Harding, head of asset liability management at IndusInd Bank.

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GOLD TREND

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