India, still definitely not China, but investment showing at least some flutters of life A few charts and some commentary plucked from a rather bullish note on India from Goldman's Asia Pacific team: Some of the key data points and lead indicators related to investment demand have started to show signs of pick up. The decline in new project starts in industrial and infrastructure projects seem to have halted in 2QFY14, although project starts still remain at low levels. We are also seeing early signs that fewer new projects have stalled - an indication that we may be close to a trough in the investment cycle given recent policy initiatives from the government and new approvals coming through in power and road projects. In the manufacturing sector, the production of the core industries related to infrastructure (which includes Coal, Oil and natural gas, Fertilizers, Steel, Cement and Electricity) has picked up and the raw materials inventory to sales ratio (based on OBICUS survey of more than 1000 manufacturing companies) is turning up again which are generally lead indicators for pick-up in the investment demand. On the infrastructure front, some large-scale government projects are now progressing well, post initial delay. The Dedicated Freight Corridor (DFC), which aims at easing freight traffic bottlenecks, has acquired substantial land tracts and environmental clearances are almost completed. The project has already secured international funding and execution appears on-track, with ordering for some phases already underway. The Delhi-Mumbai Industrial Corridor (DMIC) project, which will consist of integrated Investment Regions (IRs) and Industrial Areas (IAs) within both sides of DFC between Delhi and Mumbai, has already seen implementation on track in parts of Dholera (Gujarat) for Industrial areas and Haryana for roadways (Exhibit 10). We expect more infrastructure contracts to be awarded from these projects over the course of next year. The power sector has also seen some progress in structural reforms. Coal-supply bottlenecks which have been a source of concern are easing. Coal India Limited (CIL) has already signed 140 of the 173 Fuel Supply Agreements (FSAs) till September for 60K MW out of 78K MW of coal based power projects. The Power Purchase Agreement (PPA), which allows power companies to pass on the cost of imported coal to customers, has also been finalized. Although, calling this a "start" wouldn't quite do the state of India's infrastructure justice and, well, one should always watch the trend. More on Goldman's "Modi-fied" (geddit?) viewpoint and their belief in a BJP-bump in the usual place alongside some thoughts from Barc. Related links: India's bitter land battles set to roll on - FT India's feedback loops and the divisive Mr Modi - FT Alphaville Brazil's infrastructure worst of the Brics? Get real! beyondbrics India's infrastructure: Blackout nation - Economist