India Insight

Deficit? What deficit? India makes a golden version of everything

(Any opinions expressed here are those of the author and not of Thomson Reuters)

Indians use gold for all sorts of things. As the world’s biggest gold consumer, its citizens use coins, bars and jewellery  as gifts, dowries and investments that are literally more solid than a share in a company. The ill effect that this has on India’s current account deficit has led the government to try to curb demand.  Here are a few examples of demand that nobody can seem to curb.

This week, gold importer RiddiSiddhi Bullion’s subsidiary Dia Jewels unveiled India’s first gold-plated motorbike. About 35 to 40 kilograms of silver went into making the miniature two-wheeler model, which is gold plated and studded with diamonds, and took six months to make, said Mukesh Kothari, director of Riddisiddhi Bullions.

“It was my dream project to make such a bike, which has never been made before in the Indian markets … Moreover it’s not for sale, so neither have we priced it nor have we marketed it,” Kothari said. The bike cost around $100,000.

The bike is a successor to the GoldPlus Tata Nano. Unveiled in 2008, the Nano was billed as the world’s cheapest car. The gold version, from 2011, was studded with 80 kilograms of 22-karat gold, 15 kilograms of silver, and gemstones.

While a standard Nano costs 155,000 rupees ($2540), this variant was worth 220 million rupees ($3.6 million based on today’s exchange rate).  The car was not for sale, but was a branding and promotional initiative of a Tata group company.

India’s busy Auto Expo and the risk of an industry believing its own publicity

After fighting through the sea of camera-wielding car enthusiasts clutching their bags filled with corporate gifts to meet with Anand Mahindra, vice-chairman of the Mahindra group, it was difficult to argue with his rosy view of India’s car industry.

“Just look at all these people,” said Mahindra. “If these crowds translate into market appetite, it’s not much of a slowdown,” he added, shaking his head at the view from a glass-walled office high above the teeming masses at the India Auto Expo on Friday.

Mahindra has reason to be cheerful. Sales of cars by his group’s autos arm have remained strong this year. But he wasn’t the only executive shrugging off a slump in India’s car industry with glib comments about the sharp elbows of hundreds of thousands of excited punters that thronged the India Auto Expo this weekend.

Indian dilemma — To Nano or not to Nano

I was stuck in a traffic jam on one of New Delhi’s busiest roads, taking in the sights and smells of vehicles idling in all directions, when my cab driver turned to me and asked — “Are you going to buy the Tata Nano?”

It’s a question thrown at me several times over the past few months and each time the answer has been “No”.

Tata Motors is launching the Nano, the world’s cheapest car, on March 23. Bookings open in the second week of April and the 100,000-rupee car is slated to hit Indian roads before July.

Singur: It ain’t what you do, it’s the way that you do it

As the deadlock over Singur and the Tata Nano plant rumbles on, much of the debate seems to be missing the point.

SingurThis week, Mukesh Ambani said a “fear psychosis is being created to slow down certain projects of national importance” and said industry should be encouraged to make such large investments.

But in the words of the old song by Ella Fitzgerald (and more recently Bananarama) “It ain’t what you do, it’s the way that you do it”.