India Open to $300 Billion Oil & Gas Investments

India will offer global investors $300 billion worth of investment opportunities in the hydrocarbon sector over the next decade to keep pace with the country’s energy demand, India’s Minister for Oil Dharmendra Pradhan said.

Speaking in New Delhi at the India Energy Forum, organized by CERAWeek the Houston-based information and insights company IHS Markit, Pradhan said that India’s oil and gas output has been stagnant for years while its fuel demand has risen. Modi’s government is taking steps to unlock the country’s vast energy reserves and boost foreign investment in the sector; it has relaxed rules, including those on pricing and marketing, he added.

Natural Gas, Oil Rig

India, which imports over 80 percent of its oil needs, wants to reduce this figure by 10 percent by 2022, reports Live Mint. The country wants to attract foreign investors to $300 billion worth of energy projects that will include increasing the country’s refining capacity, oil and gas block exploration, and developing gas infrastructure, including the transport of liquefied natural gas and re-gasification.

October 15, 2017   No Comments

Matthews Asia: India is a fertile environment for an investor

In an interview with Morningstar, Robert Horrocks, Chief Investment Officer of Matthews Asia, the largest dedicated Asia-only investment firm headquartered in Westborough, MA, discussed the investment climate in India with senior editor Emma Wall.

Key takeaways from the interview:

On whether India has lived up to the investment hype under Prime Minister Modi

Horrocks: India has done very well apart from the last year or 18 months or so. But yes, I think, a lot of this was focused on Modi. But you got to remember he is the head of a central part of the government and he has to contend with all the states and the local governments. And that often means things move a little more slowly than you’d like.

On whether there is greater link between politics and markets in emerging markets as opposed to developed markets where the two things can be less connected

Horrocks: The reason for the connection between politics and the economy and the markets in India in particular is they are where China was 20 years ago. They need to build up the infrastructure. These are the things that governments are supposedly doing very well. So, that’s the reason for the linkage.

On the factors that will predict India’s stock market will deliver

Horrocks: Modi has done some things very well indeed. He has put in place a demonetization which I think I would said this would have had a much more detrimental impact on the economy in the short term. He has done some changes to the legal infrastructure to make bankruptcy law a little bit more clear. But these are things that take time.

The other thing I would mention is the achievements of the central bank. India used to be a high inflation economy. It was spending more than it saved. And the actions of the central [bank] over the last five years have brought that core inflation rate right down to a level where India’s savings are now pretty much able to mobilize all the investment it needs in the economy. The inflation rate is very reasonable even for a developed nation. So, it’s not just Modi. India has done quite a few things right.

On the greatest opportunities for an Asian investor

Horrocks: You still have to focus on the management of the business, you still have to look at the businesses that allocate capital properly. One of the issues with India at the moment is the fact that capital is scarce relative to other countries in the region. So, companies have to retain that capital themselves. That means you are putting a greater degree of trust in the management that they are going to look after that for you. So, that’s really the key. But India is a market [where] there’s opportunities across kinds of sectors. So, it’s quite a fertile environment for an investor there.

I would say the one element of caution I would have about India at the moment is the valuations. It is one of the more expensive markets in the region. You are right that a lot of hope surrounds Modi and the government and that’s been priced in a little bit to the market. So, you just have to be cautious and just pick your spots carefully.

But I do think corporate profit growth is still going to be pretty decent over the next few years.

Return on Investment

October 10, 2017   No Comments

India Aspires to Sell Only Electric Cars by 2030

A Government of India-led initiative – the National Electric Mobility Mission Plan – targets annual sales of 6-7 million EV/Hybrid vehicles by 2020. The government hopes that by 2030, all vehicles sold in India will be electric-powered says a blog post from India Energy.

Speaking on “Changing Energy Economics and India” at New Delhi, India’s minister for energy, Piyush Goyal, said that the country will help facilitate the electric car effort by offering subsidies for a couple of years. “After that,” he said, “the cost of electric vehicles will start paying for themselves,” reports CNN.

Elon Musk tweeted: India commits to sell only electric cars by 2030. It is already the largest market for solar power. https://t.co/EGBNTPzmE5 — Elon Musk (@elonmusk) June 1, 2017

India’s government is pushing to expand its solar energy capacity.

Modi tweeted: Paris Agreement reflects our duty towards protecting the Earth and our natural resources. For us, this is an article of faith: PM pic.twitter.com/8cnSqClBPf — PMO India (@PMOIndia) June 3, 2017

India Energy Logo

June 12, 2017   No Comments

Russia to Build Two New Nuclear Power Plants in India

India and Russia signed the General Framework Agreement and Credit protocol for Units 5 and 6 of the Kudankulam Nuclear Power plant located in the southern state of Tamil Nadu. Nuclear Power Corporation of India Ltd., and Russia’s Atomstroyexport, a subsidiary of Rosatom, will build the reactors. Each of the two units will have a capacity to produce 1,000 MW of power.

Both countries agreed that there were ‘steady and demonstrable’ achievements in bilateral civil nuclear partnership, including transforming the Kudankulum site into one of India’s largest energy hubs, reports BusinessLine.

PM Modi and President Putin

“We will strive to build an ‘energy bridge’ between our states and expand bilateral relations in all areas of energy cooperation, including nuclear, hydrocarbon, hydroelectric, and renewable energy sources and in improving energy efficiency. Cooperation in the peaceful uses of nuclear energy has emerged as one of the hallmarks of the strategic partnership between the two countries, contributing to India’s energy security and energizing broader scientific and technological cooperation,” said a ‘Vision Document’ issued after the talks.

June 8, 2017   No Comments

Solar Power Becoming Increasingly Important in India

India’s government plans to draw 40% of the country’s energy from renewables by 2030, and it is because of the government’s commitment that India is about to become the biggest market for solar energy, said San Jose, CA-based SunPower CEO Tom Werner.

Prime Minister Modi wants to spend $3.1 billion on state aid for India’s solar panel manufacturing industry to increase India’s photovoltaic capacity and create an export industry, according to Bloomberg.

Kamuthi Solar Power Plant

The World Economic Forum says SunPower isn’t the only company taking note. Having acquired San Mateo, CA-based SolarCity,  CEO Elon Musk of Tesla is also interested in the solar energy sector in India, and might enter the market as early as this summer.

April 29, 2017   No Comments