The rupee has plummeted to record lows against the US dollar and has gained little support so far from liquidity tightening steps taken by RBI. Sajjad Hussain / AFP
The rupee has plummeted to record lows against the US dollar and has gained little support so far from liquidity tightening steps taken by RBI. Sajjad Hussain / AFP

India acts to curb flows of overseas investment



India's latest steps to prop up the rupee will deter many Indians from buying homes abroad and hinder overseas expansion plans for many companies.

The Reserve Bank of India on Wednesday unveiled a slew of dramatic measures to reduce flows of foreign exchange out of the country. These included cutting the overseas direct investment limit for Indian companies from 400 per cent to 100 per cent of their net worth.

The central bank also reduced the amount of money that Indian residents can send abroad to US$75,000 a year compared with the previous limit of $200,000. It also banned Indian residents from investing that money in property abroad "directly or indirectly".

The rupee has plummeted to record lows against the US dollar and has gained little support so far from liquidity tightening steps taken by RBI last month and the finance ministry's announcement of several measures targeted at reducing the current account deficit on Monday.

"Individuals who were planning to buy international real estate at attractive valuations and planning for their kids' education and housing abroad will now see such plans challenged," said Om Ahuja, the chief executive of residential services at Jones Lang LaSalle India. "Currently, the variety of options available on the international property market offer very attractive rental yield and valuations, making the proposition of investing in property abroad a potentially lucrative one. However, the new restrictions will put a dampener on the sentiments of Indian investors who were considering this route."

Indian nationals invested the most money into the Dubai property market during the first half of this year, spending more than Dh8 billion in 499 transactions, according to Dubai Land Department figures released this month. However, it did not say how many of these were resident in India and how many resided elsewhere in the world.

"While there could be some impact on the Dubai property market for Indians looking to invest abroad in the emirate I suspect it will be fairly limited," said Craig Plumb, the head of research in the Jones Lang LaSalle's Dubai office. "We believe that the majority of the Indian purchasers in Dubai are resident elsewhere - either in the UAE or the UK," he said.

Moreover, with the sort of wealthy purchasers we are talking about, if they are hit by the rules, they are likely to be able to find a way around them."

The central bank described the measures as "aimed at moderating outflows". It also banned the import of gold coins. In an effort to boost foreign currency flows into the country, the RBI eased the control of interest rates on some fixed deposit schemes for NRIs (non-resident Indians), which will mean better interest rates for expatriates on some accounts.

The RBI excluded state oil companies from the cap on overseas direct investment. Other companies can apply to the central bank to seek special approval if they want to invest more than 100 per cent of their net worth.

"On the one hand, the domestic environment is not conducive for investing in and, on the other, foreign investments will become more difficult," A Subbarao, the group chief financial officer of RPG Enterprises, told the Indian business newspaper Mint. "This will have some setback for Indian companies looking to invest abroad." He pointed out that the approvals might not be given at all in some cases.

Similarly, individuals that want to remit more than $75,000 out of India can apply for permission too in special cases, although it is not clear how easily and under what circumstances they would be able to gain the approval.

The rupee yesterday traded near its record lows.

"Finance minister P Chidambaram has maintained these are temporary measures and not capital controls, but judging by the reaction of the Indian rupee, the markets seem to be getting a mixed message," said Gaurav Kashyap, the head of futures at Alpari ME, a global online currency and commodity broker.

Steps announced by the finance ministry this week to narrow India's current account deficit included restricting imports of non-essential items. On Tuesday, India raised the import duty on gold, which is a major cause of the large deficit, to 10 per cent from 8 per cent.

lbarnard@thenational.ae

Explainer: Tanween Design Programme

Non-profit arts studio Tashkeel launched this annual initiative with the intention of supporting budding designers in the UAE. This year, three talents were chosen from hundreds of applicants to be a part of the sixth creative development programme. These are architect Abdulla Al Mulla, interior designer Lana El Samman and graphic designer Yara Habib.

The trio have been guided by experts from the industry over the course of nine months, as they developed their own products that merge their unique styles with traditional elements of Emirati design. This includes laboratory sessions, experimental and collaborative practice, investigation of new business models and evaluation.

It is led by British contemporary design project specialist Helen Voce and mentor Kevin Badni, and offers participants access to experts from across the world, including the likes of UK designer Gareth Neal and multidisciplinary designer and entrepreneur, Sheikh Salem Al Qassimi.

The final pieces are being revealed in a worldwide limited-edition release on the first day of Downtown Designs at Dubai Design Week 2019. Tashkeel will be at stand E31 at the exhibition.

Lisa Ball-Lechgar, deputy director of Tashkeel, said: “The diversity and calibre of the applicants this year … is reflective of the dynamic change that the UAE art and design industry is witnessing, with young creators resolute in making their bold design ideas a reality.”

The specs

Engine: 3.6-litre, V6
Transmission: eight-speed auto
Power: 285hp
Torque: 353Nm
Price: Dh159,900
On sale: now

ANATOMY OF A FALL

Director: Justine Triet

Starring: Sandra Huller, Swann Arlaud, Milo Machado-Graner

Rating: 5/5

RACE CARD

5pm: Maiden (PA) Dh80,000 1,400m
5.30pm: Maiden (PA) Dh80,000 1,200m
6pm: Arabian Triple Crown Round-1 (PA) Listed Dh230,000 1,600m
6.30pm: HH The President’s Cup (PA) Group 1 Dh2.5million 2,200m
7pm: HH The President’s Cup (TB) Listed Dh380,000 1,400m
7.30pm: Wathba Stallions Cup (PA) Handicap Dh70,000 1,200m.

The specs

Engine: 3.5-litre twin-turbo V6

Power: 380hp at 5,800rpm

Torque: 530Nm at 1,300-4,500rpm

Transmission: Eight-speed auto

Price: From Dh299,000 ($81,415)

On sale: Now

The specs

Engine: 1.5-litre 4-cylinder
Transmission: CVT
Power: 119bhp
Torque: 145Nm
Price: Dh,89,900 ($24,230)
On sale: now

COMPANY PROFILE

Company name: Revibe
Started: 2022
Founders: Hamza Iraqui and Abdessamad Ben Zakour
Based: UAE
Industry: Refurbished electronics
Funds raised so far: $10m
Investors: Flat6Labs, Resonance and various others

Company Profile

Name: Direct Debit System
Started: Sept 2017
Based: UAE with a subsidiary in the UK
Industry: FinTech
Funding: Undisclosed
Investors: Elaine Jones
Number of employees: 8

The biog

Place of birth: Kalba

Family: Mother of eight children and has 10 grandchildren

Favourite traditional dish: Al Harees, a slow cooked porridge-like dish made from boiled cracked or coarsely ground wheat mixed with meat or chicken

Favourite book: My early life by Sheikh Dr Sultan bin Muhammad Al Qasimi, the Ruler of Sharjah

Favourite quote: By Sheikh Zayed, the UAE's Founding Father, “Those who have no past will have no present or future.”

Race card

5pm: Handicap (PA) Dh80,000 (Turf) 1,600m; 5.30pm: Maiden (PA) Dh80,000 (T) 1,400m

6pm: Handicap (PA) Dh80,000 (T) 1,400m; 6.30pm: Handicap (PA) Dh80,000 (T) 1,200m

7pm: Wathba Stallions Cup Handicap (PA) Dh70,000 (T) 2,200m

7.30pm: Handicap (TB) Dh100,000 (PA) 1,400m

Match info:

Wolves 1
Boly (57')

Manchester City 1
Laporte (69')

PSG's line up

GK: Alphonse Areola (youth academy)

Defence - RB: Dani Alves (free transfer); CB: Marquinhos (€31.4 million); CB: Thiago Silva (€42m); LB: Layvin Kurzawa (€23m)

Midfield - Angel di Maria (€47m); Adrien Rabiot (youth academy); Marco Verratti (€12m)

Forwards - Neymar (€222m); Edinson Cavani (€63m); Kylian Mbappe (initial: loan; to buy: €180m)

Total cost: €440.4m (€620.4m if Mbappe makes permanent move)

COMPANY PROFILE

Name: Dooda Solutions
Based: Lebanon
Founder: Nada Ghanem
Sector: AgriTech
Total funding: $300,000 in equity-free funding
Number of employees: 11

THREE

Director: Nayla Al Khaja

Starring: Jefferson Hall, Faten Ahmed, Noura Alabed, Saud Alzarooni

Rating: 3.5/5

Euro 2020

Group A: Italy, Switzerland, Wales, Turkey 

Group B: Belgium, Russia, Denmark, Finland

Group C: Netherlands, Ukraine, Austria, 
Georgia/Kosovo/Belarus/North Macedonia

Group D: England, Croatia, Czech Republic, 
Scotland/Israel/Norway/Serbia

Group E: Spain, Poland, Sweden, 
N.Ireland/Bosnia/Slovakia/Ireland

Group F: Germany, France, Portugal, 
Iceland/Romania/Bulgaria/Hungary

8 traditional Jamaican dishes to try at Kingston 21

  1. Trench Town Rock: Jamaican-style curry goat served in a pastry basket with a carrot and potato garnish
  2. Rock Steady Jerk Chicken: chicken marinated for 24 hours and slow-cooked on the grill
  3. Mento Oxtail: flavoured oxtail stewed for five hours with herbs
  4. Ackee and salt fish: the national dish of Jamaica makes for a hearty breakfast
  5. Jamaican porridge: another breakfast favourite, can be made with peanut, cornmeal, banana and plantain
  6. Jamaican beef patty: a pastry with ground beef filling
  7. Hellshire Pon di Beach: Fresh fish with pickles
  8. Out of Many: traditional sweet potato pudding
Living in...

This article is part of a guide on where to live in the UAE. Our reporters will profile some of the country’s most desirable districts, provide an estimate of rental prices and introduce you to some of the residents who call each area home. 

MATCH INFO

Rugby World Cup (all times UAE)

Final: England v South Africa, Saturday, 1pm

The specs: 2018 Nissan Patrol Nismo

Price: base / as tested: Dh382,000

Engine: 5.6-litre V8

Gearbox: Seven-speed automatic

Power: 428hp @ 5,800rpm

Torque: 560Nm @ 3,600rpm

Fuel economy, combined: 12.7L / 100km

BIGGEST CYBER SECURITY INCIDENTS IN RECENT TIMES

SolarWinds supply chain attack: Came to light in December 2020 but had taken root for several months, compromising major tech companies, governments and its entities

Microsoft Exchange server exploitation: March 2021; attackers used a vulnerability to steal emails

Kaseya attack: July 2021; ransomware hit perpetrated REvil, resulting in severe downtime for more than 1,000 companies

Log4j breach: December 2021; attackers exploited the Java-written code to inflitrate businesses and governments

The five pillars of Islam

1. Fasting

2. Prayer

3. Hajj

4. Shahada

5. Zakat

Our family matters legal consultant

Name: Hassan Mohsen Elhais

Position: legal consultant with Al Rowaad Advocates and Legal Consultants.

The past winners

2009 - Sebastian Vettel (Red Bull)

2010 - Sebastian Vettel (Red Bull)

2011 - Lewis Hamilton (McLaren)

2012 - Kimi Raikkonen (Lotus)

2013 - Sebastian Vettel (Red Bull)

2014 - Lewis Hamilton (Mercedes)

2015 - Nico Rosberg (Mercedes)

2016 - Lewis Hamilton (Mercedes)

2017 - Valtteri Bottas (Mercedes)

MATCH INFO

Serie A

Juventus v Fiorentina, Saturday, 8pm (UAE)

Match is on BeIN Sports

CABINET OF CURIOSITIES EPISODE 1: LOT 36

Director: Guillermo del Toro
Stars: Tim Blake Nelson, Sebastian Roche, Elpidia Carrillo
Rating: 4/5

COMPANY PROFILE

Name: Xpanceo

Started: 2018

Founders: Roman Axelrod, Valentyn Volkov

Based: Dubai, UAE

Industry: Smart contact lenses, augmented/virtual reality

Funding: $40 million

Investor: Opportunity Venture (Asia)

Our family matters legal consultant

Name: Hassan Mohsen Elhais

Position: legal consultant with Al Rowaad Advocates and Legal Consultants.

Price, base / as tested From Dh173,775 (base model)
Engine 2.0-litre 4cyl turbo, AWD
Power 249hp at 5,500rpm
Torque 365Nm at 1,300-4,500rpm
Gearbox Nine-speed auto
Fuel economy, combined 7.9L/100km