AAPI: November 2016

LISBON, 20th November 2016

Index of this Newsletter

INDIA

INDIA & THE WORLD

21. India's Foreign Trade: October, 2016
22.1. India, Brazil sign pacts to deepen cooperation in agri, cattle genomics
22.2. Brazil embraces "Make in India": Perto/Digicon opens its first ATM machine plant in India
23. Tata Housing, Macquarie to invest Rs 2,000 crore in top residential realty projects
24.1. India, Japan plan to develop 'Pacific, Indian Ocean' corridor
24.2. India, Japan and a new regional architecture
25.1. Crocs to open 55 new outlets in India
25.2. Dyson eyes India entry next year with own retail stores

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LISBON, 20th November 2016

NEWSLETTER, 20-XI-2016

INDIA

– GENERAL POLICY, INFRASTRUCTURES, COUNTRY FINANCES, ETC.

1.1. Tapping value added to finance urban infra projects through innovative Value Capture Financing

Press Information Bureau | Nov. 08, 2016

New Delhi: In the context of growing demand for resources to finance ongoing urban infrastructure expansion, the Ministry of Urban Development will soon come out with a policy framework for an innovative resource mobilization through Value Capture Financing (VCF). This seeks to enable States and city governments raise resources by tapping a share of increase in value of land and other properties like buildings resulting from public investments and policy initiatives, in the identified area of influence.

The Ministry will soon have inter-ministerial consultations on Value Capture Financing based on the feedback from the States. Shri Rajiv Gauba, Secretary (Urban Development) held final round of consultations with States in this regard last week.

The Ministry is keen about integrating VCF into project feasibility assessment for systematic and large scale adoption of capturing a part of potential increase in the value of land and other properties resulting from the proposed investment. The Ministry has identified ten ways of VCF out of which only a couple are being currently used for project financing by some States.

The proposed VCF policy framework that works as a guide to State and city governments will assist in assessing the scope of resource mobilization, identifying the area of influence of proposed projects and optimizing resource mobilization.

The different instruments of VCF are ; Land Value Tax, Fee for changing land use, Betterment levy, Development charges, Transfer of Development Rights, Premium on relaxation of Floor Space Index and Floor Area Ratio, Vacant Land Tax, Tax Increment Financing, Zoning relaxation for land acquisition and Land Pooling System.

While Betterment levy and Development charges are being currently used to some extent in States, the other instruments also have substantial scope for resource mobilization.

Traditional resource mobilization through direct sale of land, the most fundamental asset owned and managed by States and Urban Local Bodies is an inefficient form of resource mobilization and the Ministry is keen about land monetization more effectively though value capture. This innovative mechanism could also be used by central Ministries investing heavily in building national highways, railway projects, power generation and port infrastructure development.

Some cases of current use of VCF tools are: The Mumbai Metropolitan Region Development Authority (MMRDA) and City and Industrial Development Corporation Limited (CIDCO) have used different Value Capture methods including Betterment levy to finance infrastructure development in the urbanizing areas. Tamil Nadu and Maharashtra have made Land Value Tax applicable to urban areas too under which increase in land value is tapped through increased revenue tax. West Bengal has formulated a system to capture gains from land use conversion. Area based Development charges are being resorted to in Andhra Pradesh, Gujarat, Maharashtra, Tamil Nadu and Madhya Pradesh. Karnataka, Gujarat and Maharashtra have made enabling provisions for enabling Transfer of Development Rights to buy additional FSI/FAR. Tax Increment Financing (TIF) enables realization of investments through increased taxes in the area of influence of a project and has been proposed by some cities under Smart City Plans.

Andhra Pradesh Government has resorted to Land Pooling for acquiring land for its Amaravati Capital Project under which farmers have given land in return for developed land parcels. Gujarat and Haryana also used this tool for some projects. Ministry of Urban Development is working to develop a comprehensive VCF framework so that it can be used efficiently and optimally across the country as a method of financing infrastructure and enhancing the finances of urban local bodies.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.

1.2. Setting up of Industry Driven SRTMI

Press Information Bureau | Nov. 17, 2016

New Delhi: Ministry of Steel is facilitating an Industry driven institutional mechanism namely Steel Research & Technology Mission of India (SRTMI), to facilitate joint collaborative research projects in the iron & steel sector in India. The salient features of SRTMI are as under:

SRTMI is an industry driven initiative which has been setup as a Registered Society wherein Ministry of Steel is a facilitator.
SRTMI will be governed and administered by a Governing Body comprising the steel CEOs, Domain Experts and a representative of Ministry of Steel.
The executive functioning of SRTMI will be carried out by the Director, SRTMI, who will be assisted by a suitable/appropriate supporting structure.
Initial corpus for setting up of SRTMI is Rs. 200 crore of which 50% is to be provided by Ministry of Steel and the balance by the participating steel companies.
Thereafter, the centre will run on yearly contributions from the steel companies based on their turnover of the previous year.

The R&D investment of the leading steel companies in India in terms of percentage of their turnover ranges from 0.05 to 0.5% vis-à-vis upto 1% in leading steel companies internationally. Some of the steel companies have also formulated their R&D masterplans to increase their R&D expenditure to 1% of their turnover. SRTMI is likely to enhance the R&D investments in the industry to international levels. This information was given by the Minister of State in the Ministry of Mines Sh. Vishnu Deo Sai in reply to a question in Rajya Sabha today.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.

2.1. Cleaning up India’s air pollution problem

Livemint | 4 Nov. 2016

Anyone who ventured out at night in New Delhi in the past few days would have experienced something akin to one of Victorian London’s infamous pea soupers—the thick fogs caused by air pollution that proved lethal to more than a few of the city’s inhabitants. The onset of the haze blanketing the capital come winter has become an annual ritual. The governmental response, starting with deputy chief minister Manish Sisodia’s meeting to deal with the issue on a “war footing”, has a similar air of the routine.

The levels of particulate matter 10 and 2.5—the most dangerous components of air pollution—spiked severely after Diwali. The former was recorded at eight times the safe limit and the latter at 10 times. This is a nobrainer given the nature of the festival. But the problem, of course, extends far beyond this, and for that matter, beyond the capital. The World Economic Forum (WEF) rates Delhi as having the highest level of air pollution globally among mega-cities—but Gwalior, Allahabad and Raipur all have the dubious distinction of beating it out to rank among the 20 most polluted cities in the world.

The burning of agricultural waste in states like Punjab and Haryana, vehicular emissions, dust from construction sites and factory emissions, among other factors, combine in toxic fashion come the winter months when lower wind speeds and shallow inversion layers prevail across much of the Indo-Gangetic plains. Governments at the central and state levels have responded at various times and in various ways. The evolution of India’s road transport landscape—from the introduction of catalytic converters in cars and unleaded petrol in 1995 and 1998, respectively, to the reduction of sulphur content in diesel in 2000 and the steady progress of successive emission norms—is a case in point. So is the Punjab government’s ban on burning paddy straw and Sisodia’s purported road map that envisions everything from retrofitting crematorium chimneys to vacuum cleaning and sprinkling water on Delhi’s roads.

But these are patchwork efforts, lacking the cohesiveness that is necessary to tackle a multisectoral issue. The first and perhaps most glaring deficiency is the paucity of research to guide policy. There have been a number of studies in Delhi examining the effect of air pollution on respiratory functions and the associated morbidity, including a comprehensive one by the Central Pollution Control Board in 2008. But there has been little focus on the effects on cardiovascular health, an issue that is receiving increasing attention globally. And as Hem H. Dholakia, Dhiman Bhadra and Amit Garg point out in a 2014 IIM Ahmedabad research paper, Air Pollution in Indian Cities: Short Term Mortality Impacts and Interactions with Temperature, there is a lack of epidemiological evidence in the broader Indian context; the studies they found examined the short-term impacts of air pollution on mortality only for Delhi and Chennai.

As WEF rankings on 20 most polluted cities in the world show, the problem is far more widespread than that. From weather conditions to level of development and primary causes of pollution, the specific context of various cities and regions is unique; so too must be research-guided policy decisions. The lack of this leads to knee-jerk moves of dubious benefit such as the Delhi government’s odd-even experiment earlier this year. The second problem is a lack of political will and imagination to implement proven methods. Congestion charges and restricted parking have been successful from London to Singapore. An emphasis on convenient, easy-to-access public transport has been similarly successful. And as The Hindu pointed out in its editorial on 3 October, there is a puzzling lack of effort to find a synergy between the rising demand for fodder and the agricultural waste that contributes to air pollution via biomass burning.

Thirdly, as in many other areas, there is a lack of adequate enforcement. There are 61 major construction sites in Delhi, for instance, that can be easily monitored, but a host of smaller ones violate most of the existing rules. Industrial emission norms and pollution under control certificates are other stress points where defaulters have it far too easy. China’s example is perhaps not the easiest to follow here given its political structure and the fact that global economic conditions have kick-started a downturn in its rust belt. But even so, Indian administrations could do worse than look to the comprehensive nature of Chinese government efforts to tackle air pollution and emphasis on enforcing regulations. It took the Great Smog of 1952 bringing about the premature deaths of over 10,000 people in London for the British government to introduce the Clean Air Act 1956 and put an end to the pea soupers. India has it worse; according to the Global Burden of Disease report, outdoor air pollution was responsible for 620,000 deaths in 2010. It’s time, perhaps, for a similar clean-up effort.

2.2. New Green Urban Transport Scheme on the anvil with Central assistance of Rs.25,000 cr

Press Information Bureau | Nov. 09, 2016

New Delhi: Minister of Urban Development Shri M. Venkaiah Naidu today said that the Central Government is working on new policy initiatives to encourage private investments in climate friendly and sustainable public transport systems like Metro rail, Non-motorised Transport and other low carbon emitting systems in urban areas. He spoke on the inadequate and inefficient public transport infrastructure in urban areas after inaugurating the four day ‘Urban Mobility India Conference and Expo’ at Gandhinagar, Gujarat today. Various aspects of “Planning Mobility for City’s Sustainability” will be discussed by about 2,500 delegates from India and abroad including Mayors and Municipal Councilors, during the conference.

Shri Naidu said that the new initiatives under consideration include Green Urban Transport Scheme, new Metro Rail Policy, revision of Metro Acts and Standardisation and Indigenisation of Metro systems, aimed at increased private sector participation.

The Minister informed that the Green Urban Transport Scheme seeks to encourage growth of urban transport along low Carbon path for substantial and measurable reduction in pollution, provide a permanent and sustainable framework for funding urban mobility projects at National, State and City level with minimum recourse to budgetary support by encouraging innovative financing of projects. Under this Scheme, provision of Non-motorised Transport infrastructure, increasing access to public transport, use of clean technologies, adoption of Intelligent Transport Systems (ITS) and private sector participation in urban transport projects will be increased. He said, this scheme is being considered for for implementation in cities each with a population of five lakhs and above and all capital cities, Central assistance of about Rs.25,000 cr is estimated to be required which would in turn trigger private investments to meet the resource needs, over the next five years. Shri Naidu said that in view of the growing demand for metro rail systems in urban areas, a new Metro Policy would soon be unveiled to meet the demand through increased private sector participation.

This Policy mandates preparation of Comprehensive Mobility Plans of cities mandatory to ensure last mile connectivity with metro stations. It also seeks to bring in more innovativee models of implementation besides increased standardization and indigenization to induce competition. the Minister said new Metro policy seeks to ensure integration of metro projects with over all mobility needs in urban areas. He informed that the Central government has so far provided an assistance of over Rs.65,000 cr including sovereign debt to metro projects in different cities of the country. As of now, 325 kms. of metro rail is in operation in Delhi, Kolkata, Chennai, Bengaluru, Mumbai and Jaipur. About 517 kms of metro rail projects are under execution and another 449 kms under planning stage, the Minister informed.

The Minister said that the existing two Metro Acts made in the context of Kolkata and Delhi Metros are being integrated envisaging more delegation of powers to State Governments besides promoting PPP and private initiatives.

Stressing on the need for holistic planning to improve the city’s mobility, liveability and sustainability, Shri Naidu said “Urban transport planning shall be people centric and aim at moving people instead of moving cars. All sections of people shall be ensured access to efficient public transport through inclusive planning”.

Expressing concern over one road accident every minute and one accident death every four minutes in urban areas and half of the victims being pedestrians, cyclists and those using two wheelers, Shri Naidu called for an affordable, comfortable, reliable and safe public transport to reduce demand for private motorized vehicles. He stressed on the need for promotion of Non-motorised transport infrastructure for encouraging walking and cycling. NMT as a viable alternative mode of mobility would be effective if there is a close relationship between work and living place, he noted and called for proper land use zoning, development control and building regulations to ensure success of public transport system in cities.

The Minister stated that under new urban sector initiatives of Smart Cities Mission and Atal Mission for Rejuvenation and Urban Transformation (AMRUT), Non-Motorised Transport is being encourages on a large scale.

Gujarat Chief Minister Shri Vijaybhai Rupani, Deputy Chief Minister Shri Nitinbhai Patel, Minister of State for urban Development Shri Shankarbhai Chaudhari and Minister of State for Urban Housing Shri Vallabhbhai Vaghasiya also attended the inaugural session.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.

3.1. The Highways and Shipping Sectors Surge Ahead as the Centre Pushes for World Class Infrastructure

Press Information Bureau | Nov. 11, 2016

New Delhi: The Union Minister of Road Transport & Highways and Shipping Shri Nitin Gadkari has said that his two Ministries have together spent a total of about Rs 4 lakh crores in the past two and a half years as they work towards building world class highways and shipping infrastructure in the country. While the Road Transport & Highways Ministry has spent about Rs 3 lakh 17 thousand crores to build a total of 14,594 Km and award 21,247 Km of National Highways, the Shipping Ministry has spent about Rs 80,000 Crores for various projects aimed at modernizing and mechanizing the shipping sector and making it more efficient. The Minister was speaking at Economic Editors’Conference organized by the Press Information Bureau in New Delhi today.

Talking about the ambitious Sagarmala programme of the Shipping Ministry Shri Gadkari said that it will bring about a major reduction of logistics cost for EXIM and domestic trade. The cost savings from this are likely to be Rs 35,000 to 40,000 Crore per annum. He said that various projects amounting to about Rs 12 lakh crore have been identified under the programme. These include projects for enhancing port connectivity, modernization of existing ports and developing new ones, port linked industrialization and coastal community development.

A short film giving highlights of Sagarmala was presented before the audience. Many new and innovative projects are being taken up under this programme. These include port capacity expansion of 142 ports over 20 years, of which work on thirty will start this year; six new ports at Vadhavan, Enayam, Sagar Island, Paradip Outer Harbour, Sirkazhi, and Belekeri; 25 last mile rail connectivity projects by Indian Port Rail Corporation Limited (IPRCL) across 9 major ports; 27 rail connectivity projects to be taken up by Railways/ IPRCL ; 79 road connectivity projects to be taken up by MoRTH/NHAI/Ports, including 18 projects under Bharatmala scheme; heavy haul rail corridor between Talcher & Paradip; 14 CEZs as part of port-linked industrialization of which five pilot Coastal Economic Unit locations have been identified at Gujarat, Maharashtra, Odisha, Andhra Pradesh and near Ennore in Tamil Nadu; 29 potential industrial clusters identified based on detailed study of key commodities, across energy, materials, discrete manufacturing and maritime and also initiatives under Coastal Community Development objectives of Sagarmala, like skilling projects and infrastructure projects for development of fisheries sector.

Shri Gadkari also informed that the performance of Indian ports has been consistently good over the last two years, and all major ports are earning profits. This, he said, is the result of many initiatives taken by the Shipping ministry in the last two years like weeding out of obsolete rules, amendment of old legislations, modernization of ports, streamlining of processes, taking steps to reduce waiting time of ships at ports etc. The minister also said that his Ministry is committed to develop inland waterways transport on the 111 National Waterways in the country. While the work on developing Ganga as a waterway is already on, he said work would soon begin on rivers Krishna and Mandovi and Zuari.

Talking about the highways sector Shri Gadkari informed that once it is passed, the Motor Vehicles Act will be a game changer in the transport sector. He said that his Ministry has set a steep target of awarding 25,000 Km and constructing 15,000 km of national highways during 2016-17, and is trying to achieve the same. Problems of funding and land acquisition are being tackled through new policies wherever required and through negotiations with various stakeholders. He reiterated his commitment for not only providing the country with world class highways and access control expressways, but also for bringing down the number of road accidents and related fatalities and ensuring that pollution from the transport sector gets minimized.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.

3.2. Turning India’s power surplus into a boon

Livemint | Prabhat Kumar, 24 Oct. 2016

Investment in the power sector could be made more profitable by a slew of measures that increase the consumption of electricity.

Low consumption of power in the country, which has resulted in low plant load factor and surplus of coal at the pithead and at the power plants, has been a matter of concern for the last few months. A good monsoon has lowered agricultural consumption of electricity and cheaper hydropower has replaced thermal power in the grid as bountiful rains ensured ample waters in the reservoirs. As a result, some analysts and experts have been questioning the additional capacity that we are adding to the grid. We are adding capacity not only in the traditional thermal and hydro but also in the renewable sector, in which we have a target of 175 GW of capacity by 2022.

India’s per capita consumption remains among the lowest in the developing world. This is a pointer to the fact that power consumption is going to grow in the future and the current situation is only reflective of the low purchasing power of the consumers at present, apart from issues of connectivity and reliability that are, however, being addressed at a fast pace. The woes of distribution companies (discoms), which are not buying power because of their debts and inability to recover costs from consumers, are being overcome through the Ujwal Discom Assurance Yojana (UDAY).

A low plant load factor threatens the viability of power plants and we have to look for creative solutions to deal with the current situation. This situation is not peculiar to India. Countries have overcome this situation by having competing facilities in two-three fuels, with the grid switching over from one fuel to another depending on the price of the fuel and the market demand. Coal competes with fuels such as natural gas and nuclear and the consumer is offered different options. In a country like India, where capital has other competing demands, investment in the power sector could be made more profitable with the adoption of a slew of measures that increase the consumption of electricity. Electricity offers elasticity of use and could be utilized to replace fuels in other sectors.

Ecuador, which has invested in hydropower in the last few years, has also become power surplus. Ecuador is overcoming this situation by embarking on a programme of replacing gas stoves with electric stoves for cooking in households, thus bringing down the consumption of natural gas, which it imports. We can learn from this and encourage the use of electricity for cooking during the surplus season—for this, a special tariff may be offered, which could be lower than the comparative LPG price. This is an easy solution, as apart from the electric stove in the household, no other infrastructure will be required to implement it. Electricity could also replace imported kerosene. This will also have an impact on our overall LPG and kerosene imports, free LPG for consumption in rural areas and help faster implementation of the Pradhan Mantri Ujjwala Yojana.

The other measure we should take is a fast switchover to electric vehicles. In the city of Guilin, China, which I visited in 2012, the majority of two-wheelers being used are electric vehicles. China restricts the use of traditional two-wheelers in several cities in order to reduce pollution. As a result, China is the global leader in the electric two-wheelers market, with an estimated stock of 200 million units. We have a target of having six million electric vehicles by 2020. This should be upped and power companies could be guided to take a special interest in their promotion. Cities like Ahmedabad, Vadodara and Pune, which are known for their liking for two-wheelers, could become the hubs for the adoption of electric vehicles. Electric charging facilities for vehicles can be provided in major cities and on highways. Lower tariff could be offered for ‘off-peak’ recharge of vehicles. The use of electric buses in public transport should also be encouraged. China is again a global leader in this area, with a fleet of more than 170,000 electric buses. Smart cities and cities planned under the proposed industrial corridors should incorporate infrastructure for electric vehicles in their plans. Indian Railways could fast-track its electrification programme so that it lowers its diesel consumption.

If these measures are undertaken, they would have many beneficial effects. Adoption of electricity for cooking instead of LPG, LNG or kerosene would lower our imports of these fuels. Similarly, a jump in the use of electric vehicles will lower the rise in demand of petroleum imports. Faster electrification may even lower consumption of refined petroleum products, thereby contributing to the target of lowering imports of these products by 10% set by Prime Minister Narendra Modi. Lower demand by India, the fourth largest importer of crude oil, will have a salutary effect on the market price of crude oil and will contribute to enhancing the energy security of the country. Adoption of electric vehicles will lower the pollution level in cities, apart from helping to meet our commitments in the 2015 Paris climate change agreement.

And like Ecuador, increasing export of power will be another way to overcome the temporary excess in our grid. Last year, when Colombia faced a power shortage because of lower generation by its hydropower plants (due to El Niño), Ecuador sold power to it. We have already made good progress in this area. In 2013, we started exporting 500 MW of power to Bangladesh, which has been augmented further by commencing export of another 100 MW from Palatana, Tripura, this year. Power exports to Nepal are set to increase following the completion of the construction of the Muzaffarpur-Dhalkebar transmission line, once the transmission infrastructure on the Nepalese side is strengthened. Nepal may need more power, in the short run, which could be supplied by India. In the long run, Nepal will become a supplier of hydro-based power to India. In the case of Sri Lanka, an undersea cable will allow us to export power to them. We have made a good beginning by commencing export of 3 MW to the border towns of Myanmar, which could be scaled up by constructing a better transmission infrastructure. A pan-Asia-Pacific grid in the long run will help balance the surplus and shortages in the region.

Thus the power surplus situation can be converted into a boon. It could lower the demand for imported petroleum products and increase the consumption of domestically produced coal—a 175 GW renewable energy target by 2022 will be a welcome addition to our energy mix and help replace fossil fuel further.

Prabhat Kumar is India’s ambassador to Colombia and Ecuador. Previously, he has served as joint secretary in charge of the energy security division of MEA. These are his personal views.

4.1. India is setting up an extensive mechanism to ensure speedy, affordable and timely delivery of justice to consumers

Press Information Bureau | Oct. 20, 2016

New Delhi: India has drafted new Consumer Protection Bill through extensive stakeholder consultation and study of best practices across the world. While drafting the Bill, special emphasis has been made to ensure simplicity, speed, access, affordability and timely delivery of justice. In true sense it is a futuristic bill and a great transformative step towards strengthening consumer protection and giving a clear message by the Prime Minister Mr. Narendra Modi that ‘Consumer is the King’. This was stated by Shri C.R. Chaudhary, Minister of State for Consumer Affairs, while addressing first Session of the Intergovernmental Group of Experts on Consumer Protection Law and Policy during launch of revised UN Guidelines for Consumer Protection at Geneva yesterday.

Full text of Chaudhary’s address is as follows:

On behalf of the Indian Delegation, I extend a warm welcome to all of you to this meeting of the1ST Inter-Governmental Group on Consumer Protection Law and Policy. I feel highly honoured to address you on behalf of my country.
It is a matter of great pleasure that we have participants from across the globe. This is a forum which facilitates greater engagement, better mutual understanding and provides a good opportunity for formation of strategies for taking forward the agenda of Consumer Protection asper present day requirement.
Consumer rights contribute towards a fairer, safer and healthier society, and a more equitable and efficient economy. The realization of consumer rights will also contribute to the achievement of many of the goals included in the Sustainable Developmental Goals (SDGs), particularly those relating to equitable economic growth, improved health, water and food.
The current economic environment and rapid societal and technological changes have led to new trends in consumer habits and new challenges for consumer protection across the countries. The consumption patterns have significantly changed since the UN Guidelines for Consumer Protection (UNGCP) came into effect, more than 30 years ago, and will continue to evolve in the coming decades. In India we have identified emerging challenges not only regarding products, services and food safety, but also associated to the digital revolution, and to sustainable consumption. There are also Sector-specific challenges in key sectors, which need priority attention such as food, energy, transport, electronic communications and financial services. Mr. Chairperson,
The recent decade has seen a significant transformation of the financial landscape shaped by the forces of globalization, advances in technology, the trend towards greater market orientation and financial innovation. The most significant and outstanding trends come from the digital environment. The development of new digital products and services the use of internet for purchasing purpose, the development of new forms of payment, raise a number of issues with regards to consumer protection. Two decades earlier or even 10 years ago, no one could have imagined the impact of digital technologies on the average Indian. For starters, the numbers are mind boggling. The total number of Indians with access to a cell phone is already close to a billion. The number of people in the country today with Internet access is already 300+million-the size of the US population. Over the next decade, this number is expected to rise to 800+ million. This dramatic increase is going to be accompanied by a change in the profile of the average user. The first 100 million ‘digital Indians’ were largely men, urban, educated, earning higher incomes and typically young. The 400 to 500 millionth ‘digital Indians’ are going to be the opposite-rural, mid-income, older, with more women included. This digital democratization will have a profound impact on how Indians see, select, study, spend, save, socialize and sell. Digital technologies will save, socialize and sell. Digital technologies will fundamentally change the nature of these interactions. e-commerce therefore is one of our priority focus areas. Mr. Chairperson,
India’s rate of urbanization has been different from most other countries. We estimate that about 40% of Indian’s population will live in urban areas by 2025, accounting for more than 60% of the total consumption. India’s rural market is also huge, and it has its own set of challenges. To tap this huge market potential large number of companies are operating in various sectors. Most of these companies are successful in terms of profitability, sales revenue line and even market share and growth rates. High growth of business also brings with it more issues concerning the consumers such as unfair pricing, product safety, and quantity and quality assurance.
Our country has a long history of addressing concerns of the consumers. Mahatma Gandhiji firmly called for Consumer Focus for the businesses. He said “A customer is the most important visitor on our premises. He is not dependent on us. We are outsider of our business. He is part of it. We are not doing him a favour by serving him. He is doing us a favour by giving us the opportunity to do so”. There are some businesses which believe in this philosophy and have developed ethical codes for business practice, and have robust systems of consumer grievance redressal. However, the inherent profit motive in mass production and sales also offered various opportunities to some of the manufacturers and dealers to exploit consumers. Each day, unscrupulous market practices are finding their way into our daily lives, violating consumer rights and jeopardizing their safety. That is precisely the time when the Governments have to steps in and protect consumer interest. Effective consumer protection and competition frameworks are essential features of good governance. Policy, legal and regulatory framework reform to address the consumer plight, consumer awareness, empowerment, information and outreach remains key to address the evolving global market trends, life styles and related challenges of scams, crime and fatalities.
I am happy to share with this August gathering that India was one of the first countries to enact a comprehensive Consumer Protection Act in 1986, immediately after the UNGCP came into being in 1985. Our three tier system of Consumer Dispute Redressal through quasi-judicial bodies is a unique concept, which ensures a quicker and less costly relief to the consumers. Our Government has tabled a new Consumer Protection Bill in the Parliament, drawing from the latest and the best global practices. Through this new legislation we aim to address the consumer issues in a comprehensive manner offering executive, quasijudicial and judicial remedies.
In addition to the strengthening of legal framework, the Government of India is also laying greater emphasis to consumer education and working with the goal of reaching the next level, from Consumer Protection to consumer empowerment. To achieve this goal the Government is offering a range of services such as National and State Consumer Helplines, Publicity Campaigns through Jago Grahak Jago, which means “Wake-up Consumer, wake-up”, funding of academic institutions and voluntary consumer organisations in conducting Consumer Awareness Programmes, and involvement of Industry Associations and Chambers of Commerce in Policy Consultations and Joint campaigns. Recently, the Government has also constituted a Task Force for studying the UN Guidelines and to suggest the way forward.
India is spending about 30-50 million US dollars on consumer protection annually and has initiated a number of consumer centric schemes based on the broad fundamentals of consumer awareness, standard and conformity assessment and inexpensive and quick redressal. Some of the important recent initiatives are:
Launch of a portal ‘Grievance Against Misleading Advertisements (GAMA)’ to handle complaints of consumers relating to misleading advertisements
o Issuance of guidelines on Direct Selling
o Online case monitoring system in the Consumer For a
o E-filing of complaints by consumers in Consumer Fora is under process
Grahak Suvidha Kendras as a one stop center to provide a host of services to consumers under one roof. Such as information dissemination, consumer awareness, mediation, grievance redress, assistance in filing complaints before the relevant consumer forum and counseling.
The approach and mechanisms adopted to protect consumers in individual jurisdictions may vary from one country to another, given the unique characteristics prevailing in the different respective economies and financial systems. Consideration of country-specific circumstances and contextualization is important to evolve relevant and effective consumer protection and education infrastructures. Individual countries need to customize the consumer protection and education framework to their environment, taking into account factors such as the stage of economic and regulatory development, the structure of the financial system and the level of consumer sophistication.
Under the dynamic leadership of Prime Minister, Mr. Narendra Modi, existing India’s Consumer Protection Act-1986 is being replaced by a consumer friendly legislation, with a forward looking approach including protection of consumer’s rights while transacting through e-commerce.
This bill has been developed through extensive stakeholder consultation and study of best practices across the world. While drafting the Consumer Protection Bill-2015, special emphasis has been made to ensure simplicity, speed, access, affordability and timely delivery of justice. In true sense it is a futuristic bill and a great transformative step towards strengthening consumer protection and giving a clear message by the Prime Minister Mr. Narendra Modi that ‘Consumer is the King’.
Forums like this provide a good opportunity for countries to share information and insights, to discuss the issues and challenges at hand, explore potential areas for cooperation and lay the groundwork for future partnerships. Drawing on the experience and expertise of various countries, I hope this forum would provide a platform for participants to develop, share good practices, take stock of the States of Consumer empowerment in various jurisdictions and to plan for the future.
I look forward to the outcome of your deliberations in fostering greater consumer protection and education. Together we can make a huge difference to the life of a consumer.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.

4.2. FSSAI Strengthens the Food Testing Infrastructure in the Country

Press Information Bureau | Nov. 04, 2016

New Delhi: The Food Safety and Standards Authority of India (FSSAI) has rolled out a major scheme for strengthening of Food Testing Infrastructure in the country at an estimated cost of Rs. 482-crore, in the light of the recent observations by Hon’ble High Court, Mumbai regarding the urgent need to upgrade Food Testing Laboratories in India.

The Empowered Committee constituted for implementing this scheme held its first Meeting on November 2, 2016 in New Delhi, which was chaired by Chairperson, FSSAI. Representatives from various Ministries such as Ministry of Health and Family Welfare, Ministry of Food Processing Industries, Export Inspection Council, NABL and seven States/UTs were present. Proposals from 7 States/UTs, namely, Goa, Delhi, Karnataka, Kerala, Madhya Pradesh, Tamil Nadu and Punjab were considered for strengthening their food Testing infrastructure. Two proposals, from Chandigarh (Punjab) and Calicut (Kerala), were approved in principle. The other States were requested to revise and resubmit their proposals according to the scheme guidelines with mentorship support from FSSAI. The Committee also approved the proposal for strengthening the Referral Food Laboratory at Central Food Technology Research Institute (CFTRI) through provision of state-of-the-art equipment and facilities Introduction of these equipment facilities would significantly enhance the testing capability of CFTRI for adulteration of honey and pesticide and antibiotic residues in food samples.

Under this scheme, 45 State/UT Food Testing labs (at least one in each State/UT with a provision of two labs in larger states) and 14 Referral Food Testing labs will be upgraded to enable them to obtain NABL accreditation. 62 Mobile Testing labs will also be established across all States/UTs. There are currently 4 Mobile food Testing labs in Punjab, Gujarat, Kerala and Tamil Nadu, which will serve as a model for these Mobile Testing labs. Capacity building of the Food Testing labs is also an important component of this scheme. In addition, a School Food and Hygiene Programme has been envisaged under which basic Food Testing labs will be set up in 1500 schools/colleges across the country to promote a culture of safe and wholesome food.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.

5.1. States to get Rs 7,000 crore for skill development

Livemint | Nov. 09, 2016

New Delhi: The Union government will disburse around Rs7,000 crore to states to help align them with the centre’s skill development agenda and persuade them to create an ecosystem of entrepreneurship for youngsters.

The ministry of skill development and entrepreneurship is meeting state skills and labour ministers on Wednesday in New Delhi to draw a road map on it and discuss hand-holding measures it is ready to offer to the states.

The ministry is taking soft loan of $1 billion (nearly Rs6,660 crore) from the World Bank for skill development initiatives and most of the amount will be disbursed to states, according to an internal ministry document. Mint has reviewed a copy of it. Besides, it will disburse some Rs3,000 crore or 25% from the funds earmarked for the Pradhan Mantri Kaushal Vikas Yojana (PMKVY), a flagship skill development scheme of the Union government to train 10 million people over the next four years. The Union cabinet has already approved about Rs12,000 crore for PMKVY earlier this year.

At least two government officials with knowledge of the development said the ministry feels that the centre will not be able to achieve the target of skill development all on its own and taking states along will be the key. The above amount of funds will flow to states over the next three years. India wants to skill train some 500 million people by 2022 but has been largely behind the curve in last five years. Baring 2013-14, the skill development initiative has fallen short of target each year between 2011-12 and 2015-16 as per official data.

“Skilling India is a mammoth task which can not be achieved without whole hearted cooperation of the states...It is necessary to empower the skill development missions, so that they are able to operate as effective nodal bodies which can anchor the skill development agenda in the state,” skills minister Rajiv Pratap Rudy has written in his letter to each of the state governments. Mint has reviewed a copy of the letter as well. Rudy in the letter has written that his ministry has “comprehensive plans for continuous engagement with states” on Skill India mission.

In the meeting, the ministry will urge states for leveraging private sector spending in skills, devise common norms for skill training in states, and persuade them to create an entrepreneurship ecosystem for youngsters. It will ask states to start entrepreneurship hubs so that technical institutions can link up with these hubs for both mentoring and financial handholding.

Besides, the ministry is likely to seek the support of states for creation of some 3000 entrepreneurship centres including 2,200 at college and universities, 300 in senior secondary schools and 500 at Industrial Training Institutes over the next five years. Meanwhile, the Union government has decided to help national skill development corporation branch out to 12 states including Gujarat, Bihar, Assam, Karnataka and Tamil Nadu to oversee the skill initiative from the ground.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.

5.2. IT spending in India will reach US$ 72.4 billion in 2017: Gartner

Livemint | Nov. 17, 2016

Spending on information technology in India is expected to rise 6.9% to $72.4 billion in 2017 from an estimated $67.7 billion in the previous year, led by growth in software and IT services revenue, researcher Gartner Inc. said.

The key segments driving IT spending growth include communications, media and services, banking and securities, and manufacturing and utilities markets, analysts at Gartner said.

“Software and IT services spending is projected to have the highest growth rates as companies work towards creating digital applications on which enterprise organizations’ digital business models are being built. Some leading edge organizations are already starting to extend that journey to the beginnings of algorithmic business,” said Partha Iyengar, Gartner fellow and head of research at Gartner India.

Chief information officers will participate in building a new digital platform with intelligence at the centre, the report added.

That platform will enable ecosystems, connecting businesses and collapsing industries.

According to the report, the new digital platform consists of five domains—traditional IT systems, customer experience, Internet of Things (IoT), an ecosystem foundation and the intelligence platform that ties all the domains together.

Last month, Gartner said that the government is on track to spend $7.2 billion on IT products and services in 2016, an increase of 2.4% over 2015.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.

– AGRICULTURE, FISHING & RURAL DEVELOPMENT

6.1. India's groundnut production to increase by 70%: SEA

Economic Times | Oct. 18, 2016

Pune: The kharif groundnut crop of 2016-17 is estimated at 54.80 lakh tonnes against 32.30 lakh tonnes in 2015-16 up by 70%, according to the estimate of industry body Solvent Extractors Association (SEA).

Groundnut is one of the major crops in kharif season and Gujarat is the prominent state growing groundnut. Since last 9 years, SEA Groundnut Promotion Council conducting the Groundnut crop survey to assess the size and quality of the groundnut crop.

This year under leadership of Shri G.G. Patel, Convener, SEA Oilseed Crop Estimate Committee and Past President, a 20 members team visited the leading groundnut producing districts in Gujarat during 12th to 16th October 2016.

"Gujarat Government has reported that 16.44 lakh hectares under Groundnut crop sown during kharif season compared to 12.95 lakh ha in 2015-16" stated the SEA release.

Average yield per hectare has increased to 1790 Kg. per hectare against 1155 Kg. per hectare last year. Gujarat is expected to harvest 29.40 lakh tonnes during kharif season. We have also worked out All India Kharif Groundnut Crop data based on SEA primary survey of Gujarat, GGN Research data and secondary survey.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.

6.2. Will Pusa Arhar 16 solve India’s pulse problem?

Livemint | Sayantan Bera, 1 Nov. 2016

Pigeon Pea variant Pusa Arhar 16 could prove a game changer for inflation-wary policymakers as it has a maturity time of 120 days down from 160-270 days of current varieties

New Delhi: Anew high-yielding pulse developed by government scientists at a leading research institute could prove a game changer for inflation-wary policymakers and consumers alike.

Pusa Arhar 16, a dwarf pigeon pea created by scientists at the Indian Agricultural Research Institute (IARI), has a maturity time of 120 days, down from the 160-270 days needed by varieties now in use. It also requires less water and is suitable for mechanized harvesting with no loss in yields, at about 20 quintals/hectare.

Arhar, or pigeon pea, is among the most widely consumed pulses in India. Its prices shot up to as much as Rs200 per kg last year due to lower production, leading to a surge in imports.

On Monday, a ready-to-harvest crop of the new variety was unveiled before finance minister Arun Jaitley and agriculture minister Radha Mohan Singh at the IARI in Delhi.

“We are hoping the variety can be released for commercial cultivation by January next year, so that farmers can plant it beginning of the Kharif (monsoon or summer crop) season (June 2017),” Singh said. The variety can help “India achieve self-sufficiency in pulses in the next 2-3 years”, he added.

“Our government was worried about pulses. India is the largest producer, consumer and importer of pulses and it is a price-sensitive commodity,” Jaitley said, congratulating the scientists. Arvind Subramanian, India’s chief economic adviser, was also present.

The semi-dwarf, high-yielding variety Arhar Pusa 16 has many positives, said A.K. Singh, head of genetics, IARI. “As crop maturity is synchronous (unlike present varieties which mature unevenly over time), it can be harvested using combine harvesters. The evenness of the crop means it is (also) easily amenable to pesticide sprays,” he said.

A.K. Singh said that work on it started in 2007, and that it is suitable for both intensive cultivation areas such as Punjab and rain-fed areas of central India.

Currently, farmers consider pulses to be a risky, rain-dependent crop that takes a long time to mature. “With this variety they can easily have another crop of wheat, mustard or potato,” A.K.Singh said.

As the new variety is extra-early maturing, the farmers in rain-fed areas will have a wider window for sowing— from the expected onset of south-west monsoon on 5 June to the first week of July. Longer duration crops have a shorter window as delayed planting means sacrificing the next crop. Consecutive droughts led to a drop in domestic production of pulses to 16.5 million tonnes in 2015-16, from a high of 19.25 mt in 2013-14, causing a surge in imports.

However, farmers in major pulse-growing states increased planting area by 37% this year, boosted by ample rains and higher retail prices over the past year. The centre has set a target of producing a record 21 million tonnes of pulses in 2016-17.

6.3. Dabur goes back to basics to take on Patanjali

Livemint | Sounak Mitra, 24 Oct. 2016

Feeling the heat from Baba Ramdev’s Patanjali Ayurved, Dabur returns to its roots: Ayurveda

Dabur has a unique mix of diverse growth engines—juices, healthcare, skincare, international business and home care. Photo: Priyanka Parsahar/Mint

For the past two decades, every time the management of Dabur India Ltd met to finalize a new product, it ended up also debating whether to stick to Ayurveda or to focus on non-Ayurvedic products.

The decision to launch non-Ayurvedic products came 113 years after S.K. Burman set up Dabur in 1884 in Kolkata. In 1997, the home-grown Ayurvedic products maker launched Project STARS (Strive to Achieve Record Successes) to accelerate growth through diversification. It launched Real, a fruit-based beverage. Ayurveda cannot take Dabur far, the Burmans were convinced. So, the family that popularized Ayurveda in India moved away from its core strength.

Over the next 19 years, the company’s focus intensified so much on non-Ayurveda products that just the food business accounted for about 11% of its Rs8,436 crore revenue in the year to March 2016 and 18% of domestic sales came from foods. Not just food, it launched a number of non-Ayurvedic products in segments like personal care and home care as well. Overall, about 40% of its sales came from non-Ayurvedic products in the year to March 2016. The wheel of change was set for a spin.

But then came yoga-guru-turned-businessman Baba Ramdev. Under his company Patanjali Ayurveda Ltd, he launched a range of fast-moving consumer goods (FMCG) based on Ayurveda. In recent months, ever since Patanjali started aggressive advertising on television, it has challenged companies such as Hindustan Unilever Ltd (HUL), Colgate-Palmolive (India) Ltd, Nestlé India Ltd that compete in India’s Rs3.2 trillion-a-year consumer packaged goods market.

There’s more. Going by Ramdev’s projections, Patanjali will cross Rs10,000 crore in revenue in fiscal year 2017—from Rs5,000 crore in FY16. This is more than what brokerage firm Morgan Stanley India Co. Pvt Ltd projected as Dabur India’s revenue in FY17—Rs 9,630 crore.

Besides, Dabur started feeling the pinch as sales of its honey (a product that is estimated to have more than 65% market share) started declining earlier this year as people bought Patanjali’s cheaper variety.

The Burmans realized that Dabur needs to get back to basics and return to its core—Ayurveda.

The future, says Dabur India chief executive officer (CEO) Sunil Duggal, will be driven by Ayurvedic products. “With this validation (success of Patanjali), we are more committed to staying and growing the natural equities and not string into other domains. So it provides a lot more focus to the company’s activities and a lot more opportunities to grow within spaces that we are familiar with rather than to get into unfamiliar spaces which obviously would be much riskier,” he adds.

There were reasons why Dabur was unsure about sticking to only Ayurvedic products.

The Burmans wanted to build an empire outside India—across the Middle East, Africa, Europe, North America and South Asia, which together accounts for 32% of Dabur’s consolidated sales at present. Across all these countries, Ayurveda was never a popular or saleable concept. So the shift was only natural.

Although Dabur was probably the only Indian company that was selling products made of Ayurvedic formulations nationwide, it was unsure about how far it could take Ayurveda.

“Till recently, the ability of Ayurvedic products to go deeper was under some question. Ayurveda can go deep in certain areas, not all. Like skin care, it may not go that deep. But we are now beginning to question that paradigm. Now we are far more convinced that Ayurveda can go far deeper in many areas than what we thought earlier,” says Duggal.

Faith vs evidence

A couple of months ago, the company revamped its marketing communications with a new tagline—Sciencebased Ayurveda. So far, it was “celebrate life”. “All our advertisements and other communications are now based on one theme—Science of Ayurveda. There have been changes in packaging and marketing communications as well. We need to be relevant to the youth,” says K.K. Chutani, executive director (marketing) at Dabur India. Besides, in February this year it tied up with e-commerce marketplace Snapdeal to set up an e-store for its Ayurveda products called LiveVEDA. Chutani believes, e-commerce was an imperative for Dabur’s future.

The rationale behind Dabur’s new communication is its history. The Burmans have been marketing Ayurveda for more than 130 years. But it can’t just bank on its “history or legacy”. “The platform that we are going to leverage is the science-based Ayurveda, backed by research, validation and hard evidences. It will appeal to a lot of people who may not believe in faith-based Ayurveda (unlike Ramdev’s followers),” adds Chutani.

Emergence of Patanjali, believes CEO Duggal, is a blessing in disguise for Dabur. Patanjali products are sold primarily based on people’s faith in Ramdev. His marketing and Patanjali’s well-spread retail presence has already, and probably would, convert a lot of non-Ayurdevic product users into regular users of Ayurvedic or herbal products.

CEO Sunil Duggal believes Dabur has the advantage of being the ‘original’ marketer of Ayurveda in India. “There has been some learning from Ramdev. To my mind, he has given a big impetus to Ayurveda and his large number of followers are driving it. The desire for Ayurvedic solutions runs very deep in Indian psychology. It would be very silly of us not to take advantage of that,” says Duggal, who joined Dabur in 1995 and became CEO in 2002.

By 2020, Dabur targets Ayurvedic products to constitute more than 75% of its sales in India, from around 60% now.

To focus more on Ayurvedic formulations, the company is doubling its herb cultivation. By March 2017, Dabur will have 3,800 acres for medicinal herb farming, up from about 2,000 acres at present that it has developed during past two decades. It also has a greenhouse at Pantnagar in Uttarakhand. The company will be spending Rs600 crore in back-end supply chain. The medicinal farming will be spread across eight states in India and Nepal, and engage about 2,500 farmers, up from 1,200 at present.

“We have been marrying the age-old Ayurvedic heritage and traditions with cutting-edge scientific prowess. We have a strong in-house research wing that follows a ‘bush-to-brand’ approach. We have our in-house nursery, which grows several rare herbs that go into various products. Dabur is probably the only company which is involved in both classical or ethical as well as OTC (over-the-counter) formulation research for close to 40 years now,” says J.L.N. Sastry, head (research and development, Ayurveda) at Dabur India.

In a note on 21 September, Citi Research, a division of Citigroup Global Markets Inc., said, “Dabur claims to focus on science-based high quality Ayurveda products with an emphasis on R&D, which makes it well positioned to ride this wave.”

Countering Patanjali

In May, Dabur launched an advertisement for its honey which said it was approved by the Food Safety and Standards Authority of India (FSSAI) that ensures safety. Patanjali’s honey does not have FSSAI approval. The ad came on the back of a drop in sales of Dabur honey at the beginning of the year. The company has been selling honey since 1994 and dominates the market with close to a two-thirds share.

"There has been some learning from Ramdev. To my mind, he has given a big impetus to Ayurveda and his large number of followers are driving it. It would be very silly of us not to take advantage of that."- Sunil Duggal, CEO, Dabur India.

However, Patanjali honey directly hit Dabur primarily because of the price difference. Dabur’s honey was priced about 40% higher than Patanjali’s. “We got things corrected through offers and other things. We find people who switched are returning. But there is a section of people, financially stressed, who may not come back. But we have to deal with that. We can’t have all things for all people,” says Duggal. The company also launched brand extensions like honey fruit spreads.

After facing stiff competition from Patanjali, Dabur has narrowed the price gap for its Chyawanprash and tried establishing it as a product relevant for all seasons.

Interestingly, in an earlier Mint interview, Ramdev said his rivalry was with multinational companies (MNCs) not the home-grown ones like Dabur. But a Patanjali spokesperson said that even if Dabur is an Indian company, it has no right to “loot” people. “Products are overpriced. Be it an Indian company or MNC, it should operate ethically, and products should be economical. With Patanjali, backed by Baba Ramdev’s marketing, the market for Ayurvedic and herbal or natural products has expanded, which certainly is an opportunity for everyone,” he added.

Commenting on FSSAI certification, or the lack of it, the spokesperson said that Patanjali’s honey had passed all required tests and is “safe”. “As honey is a products that is consumed both as a medicine and a food item, FSSAI approval is not mandatory,” he added.

Besides honey, even Dabur’s toothpaste sales were impacted but Duggal dismisses concerns about it by saying the category has not been growing. In fact, Dabur Chyawanprash, the market leader with an estimated 65% share, also faced stiff competition after Patanjali started mass marketing Chyawanprash at a much lower price last year. But it’s impact was not severe, maintains Duggal. However, Dabur narrowed the price gap with Patanjali and tried establishing Chyawanprash, a predominantly winter product, as a product relevant for others seasons like monsoon through intense promotional activities. “With Patanjali coming in, the category might grow better. He (Ramdev) will convert a lot of non-users into Chyawanprash users. He could be a good ambassador for Chyawanprash,” adds Duggal.

In a note on 21 September, Citi Research said, “Dabur has been managing competitive intensity well through brand building (strong digital push), value-added variants or formats and by reducing price premiums in segments like honey with price-offs and promotions... Reducing the pricing premium with extra weight (such as 1.25 kg for the price of 1 kg) and / or price-offs, upping the ante on honey brand building and the extension to value-added variants and formats are examples of a well-rounded approach to tackle the aggressive competition from Patanjali.”

Dabur’s challenge, according to Sunita Sachdev, an analyst with UBS Securities India Pvt. Ltd, is to re-invent its brand and make itself relevant to the current crop of consumers. “Getting back to its roots—Ayurveda—is very appropriate,” said Sachdev.

Peer pressure

Dabur India isn’t under pressure from Patanjali alone.

Competition in the domestic market in the last few years has increased as almost every packaged goods company—home-grown and multinational—has rolled out products that are herbal or natural. The trend has been triggered largely by Patanjali’s success and the opportunity the category offers for premiumization of products.

In recent years, HUL and Colgate, local units of MNCs, have ramped up their portfolios with premium Ayurvedic products in key brands. Home-grown Emami Ltd and Himalaya Drug Co., which have been selling herbal or Ayurvedic products for long, have gained from their traditional herbal positioning. These companies are extending brands into new and emerging segments to improve profitability. And all of them are trying to expand. While Emami bought Ayurvedic hair oil and shampoo brand Kesh King from SBS Biotech Ltd in June 2015 for Rs1,651 crore, HUL acquired Kerala-based Indulekha hair oil brand for Rs330 crore earlier this year to boost its presence in Ayurvedic space.

Interestingly, Dabur was the first to tap the hair oil space with a herbal product Dabur Amla hair oil back in 1940 and expanded its hair care portfolio in early 1990s with Vatika brand. But it failed to leverage the advantage of an early entrant.

Admits Duggal, “We never thought products like shampoo can be marketed as an Ayurvedic product. With recent developments in the market, we are now thinking of launching Ayurvedic shampoo. Some of our bets will work, some may not. But Ayurveda can go beyond the imagination of people.”

Herbal or Ayurvedic still constitutes a very small part of personal care market in India. According to a research report (September 2015) by UBS Securities India, herbal products comprise 6-7% of the personal care products market, but the volume is growing at about “twice the segment average”. The report estimated herbal to grow to about 10% of the segment by FY20 as the trend accelerates.

Duggal, however, believes Dabur has the advantage of being a company that has been the “original” marketer of Ayurveda in India. There are differences between Ayurveda and herbal. “Herbal is a step before Ayurveda. Ayurveda is a completely different ball game,” he adds.

Distressed economy

Besides increasing competition, slow growth is a serious worry for Dabur too.

In April-June 2016 quarter, the company’s sales grew just 1.2%. In the quarter ended March 2016, it reported a 4% increase in volume in the domestic market compared to a 7% growth in the preceding quarter. Post results, the management had painted a cautious outlook for FY17. It expects things to get better only in the second half of FY17.

“The key challenge that we are facing today is that there’s a radical downward shift in the overall consumption of consumer goods because of tapering of the stimulus that was provided by the earlier government and has not been taken forward by the current government. The current government is following an investment-led growth and not consumption-led growth that has triggered a consumption stress, primarily in rural market, which was the prime driver of growth between 2008 and 2014,” says Duggal.

A double-digit growth is “very unlikely” in the next one-two years for the packaged consumer goods firms. “I am hoping for 6-8%. I never expected this sharp a decline in consumption. I knew it will come down but not from 12% to 3-4%,” says Duggal, adding that consumption will improve in a gradual manner starting 2018. Two consecutive poor monsoons also hurt consumption. A relatively good monsoon, coupled with the seventh pay commission money in the system, is likely to provide some impetus that would help consumption recover. However, the picture is not that dismal as packaged goods companies like Dabur are enjoying high margins— thanks to stability in commodity prices resulting in low input costs. “It’s a good thing. But the downside of the combination of high margin and low demand will typically lead to a lot of pricing activities. Reduction of prices in some cases and aggressive promotions are obvious. We’ll have to deal with that aspect. Some of the margins may be passed on to the consumers,” adds Duggal.

Rewriting rural

About 45% of Dabur India’s domestic revenue comes from rural markets and, as mentioned above, consumption in rural markets has not been growing for the last few years. Naturally, the company not only stopped expanding its distribution network in rural areas, in the last one year it also stepped out of certain markets to minimize its risk.

That’s not all. It also reorganized its sales force in rural markets. The company hired about 1,000 people to sell its products in villages starting this April. Earlier, village sales representatives were under the payrolls of thirdparty human resource companies. Dabur is shelling out the same amount of money but the village sales representatives are earning more as their salaries are not being shared by third-party firms. “They are the sons of the soil. They understand these markets. With them coming on our rolls, productivity and sales have improved. Rural markets will start growing again. We’ll ramp up distribution and marketing to capture the growth prospects that’s expected in the second half of the year,” adds Duggal. Dabur typically pays Rs2 lakh a year and incentives to the village sales representatives.

Tweaks in distribution and go-to-market efforts, according to the Citi Research note, will help Dabur improve productivity of the enhanced footprint, besides doctor detailing could be a key driver for healthcare offerings.

"The key challenge that we are facing today is that there’s a radical downward shift in the overall consumption of consumer goods. I never expected this sharp a decline in consumption. I knew it will come down, but not from 12% to 3-4%."- Sunil Duggal, CEO,

Dabur India For urban markets, the company, in June, divided its portfolio in four pieces— home and personal care, healthcare, OTC medicines, and food and beverages. There’s a separate sales team for each of these segments. Earlier there were three segments—OTC, FMCG and food. The change is aimed at bringing a deeper focus on individual segments.

Dabur products now reach around 5.3 million outlets. In comparison, HUL reaches about 6.3 million of the estimated 8 million retail outlets in India. Cigarette-to-shampoo maker ITC Ltd reaches to around 4.3 million retail stores.

Advantage spread

Dabur has a unique mix of diverse growth engines—juices, healthcare, skincare, international business and home care. And, it has four cash cows—hair oils, digestives, health supplements and toothpastes. The growth engines, noted Morgan Stanley in a report, can use cash cows to generate consistent, superior growth. “Dabur has the ability to launch highly differentiated product offerings across its product portfolio, catalyzed by the recent success of Patanjali, increase in disposable incomes, lifestyle changes and increasing awareness of Ayurvedic products,” it report added.

OTC products are seen as the “most exciting” growth opportunity for Dabur, backed by the company’s brand strength, knowledge of Ayurveda, doctor advocacy, and product heritage. “We expect a slew of launches over the next few quarters with a focus on daily healthcare and lifestyle ailments. This business also has one of the best gross profit margin profiles. We believe growth will inflect as consumers perceive these products as being efficacious for overall health and wellness and likely balance out the adverse impact of rapid changes in lifestyles currently under way,” said the Morgan Stanley analysis.

Eyes on buys

Acquisition was one of the routes that helped Dabur grow, mainly in markets outside India. The company, which has more than Rs2,200 crore of cash on its balance sheet, is now looking for buyouts in India to ensure faster growth. In the last few years, organic growth has been slow and Dabur has not made a pitch to acquire any firm.

The company’s deals team is already working on a few targets. Despite the fact that the management is open to spending about Rs1,000 crore on acquisitions, Dabur is only looking for small buys. “I like small brands that are scalable, primarily regional brands with national relevance. I hope to close at least one deal by end of this financial year,” says Duggal.

Dabur is looking at Ayurvedic brands and brands in the adjacent areas. It is unlikely to buy any company that is in the generic products space as that could conflict with its existing product offering. “There are a few generic products, but buying a generic product maker would be replication. That’s one of the reasons why we did not buy Zandu (which got sold to Emami in 2008),” he adds.

Likely acquisition targets could be companies that make branded proprietary products in areas such as digestion, cough and cold, fever, lifestyle disease management, among others. However, there are not many targets in the market.

“Acquisitions make sense. Despite high valuations, Emami’s acquisition of Kesh King and HUL’s Indulekha buyout were relatively successful,” says Sachdev of UBS Securities.

Its key acquisitions in India include Balsara Hygiene Products Ltd, maker of Babool toothpaste and Odonil air freshner, in 2005 and female skin care products maker Fem Care Pharma in 2008. Over the years, some of the brands it acquired from these two firms, such as Fem, Babool and Odonil, have crossed the Rs100-crore sales mark.

Even its international business has primarily grown through acquisitions post- 2010.

International woes

About 32% of Dabur’s consolidated revenue comes from international markets by selling personal care products across the Middle East, Africa, Europe, North America and South Asia.

The Middle East is the biggest market that accounts for 33% of the company’s internal sales, followed by Africa (22%), Americas (17%), Asian markets excluding India (17%) and Europe (11%). But companies, including Dabur, have been facing challenges in these markets mainly due to political uncertainties, currency fluctuations and falling oil prices.

“Low oil prices have led to a downward pressure on oil producing economies with governments adopting austerity measures, curbing spending on major projects and reducing subsidies which has eroded disposable incomes. Most of the markets have witnessed sharp depreciation in their currencies which has led to lower value realizations in our business. Geo-political turmoil in MENA (Middle East and North Africa) has, to a large extent, impacted markets such as Syria, Libya, Yemen, Iraq and others where there has been a reduction in consumption due to large scale displacement of human population,” says Mohit Malhotra, CEO of Dabur International Ltd, a wholly owned subsidiary of Dabur India.

Dabur, however, will continue to invest in these markets—in brands, distribution and building local supply chains to ensure better pricing and margin.

Our aim is to make Dabur a multinational from India: Amit Burman

In July, Dabur India acquired Discaria Trading, registered in South Africa, for just Rs4,679 (1,000 South African rand). It was a small but important acquisition. With this, the company got an entry to South Africa—a market it has been trying enter for a long time. Dabur already has two manufacturing plants—one each in Nigeria and Egypt.

Africa has been on the radar of Indian packaged goods and personal care firms for the past few years primarily because of projected consumer spending. Consulting firm McKinsey and Co., in a report in 2010, projected consumer spending in Africa to double to $1.8 trillion by 2020.

Dabur made its first foreign acquisition in 2010 by buying Hobi Kozmetik Group, a leading personal care products company in Turkey, for $69 million. It also acquired US-based Namaste Laboratories for $100 million in the same year.

“Our twin acquisitions took place almost a decade after our entry into the overseas markets and these acquisitions have helped us further consolidate our overseas business. We have emerged as the Indian-born FMCG transnational entirely through the organic route,” says Malhotra.

Prior to these acquisitions, the company primarily sold hair oil under Dabur Amla and Vatika brands in the overseas markets. Now, its international portfolio is dominated by products it got from acquisitions. According to Citi Research, hair oil accounted for about 39% of sales from international markets together, followed by shampoo (14%), hair cream (13%), oral care (11%), skin care (7%) and styling products (about 12%) in FY16, contrary to hair oil contributing about 93% to the business in FY06.

“Namaste business has been steady and we believe local manufacturing and distribution in Africa should provide a fillip to the business from 2017 onwards. Local manufacturing would enhance the price competitiveness of Namaste products that are currently imported and thus at a significant price premium. Steps to enhancing sales and distribution for Namaste products in sub-Saharan Africa should help Dabur deepen its presence. For the other overseas operations, management talks of a somewhat lower adverse forex impact vs the previous year. Geopolitical or economic issues in Saudi Arabia and parts of North Africa remain, but the company’s foray into Iran could be a new positive driver from second half of FY17,” Citi Research said in the 21 September report.

Going forward, Dabur will deepen presence in many of the countries in Africa, primarily where it already has presence, and across markets in South Asia. Two markets where it sees a better future are Myanmar and Iran. The company already has a presence in Myanmar, and it is setting up a factory in Iran—probably the last big market that’s left unexplored due to blockade—to start selling products early next year.

“We are open to exploring inorganic opportunities to fill gaps in our existing portfolio and geographic presence,” says Malhotra, adding that the company has not earmarked any amount for buys and can fund acquisitions through internal accruals and debt.

Sachdev of UBS Securities, however, says there is risk in the international business. “There’s also sub-scale which hinders their ability to generate quicker higher returns,” she adds.

Analysts’ darling

Competition may be stiff and growth may be slow but Dabur India is considered an “attractive investment proposition in consumer staples” by equity analysts.

Over FY16-18, noted Morgan Stanley in its report on 25 April, Dabur will become “the most expensive staples stock” from “one of the cheapest now”. It added, “Even as the stock has outperformed the Sensex by 6% over the past six months, it has underperformed peers like Godrej Consumer Products Ltd, HUL and Marico Ltd by 10-30% on concerns of rising competition, especially from Patanjali Ayurved.”

Brokerage firm CLSA, in a report on 29 April, noted that the Dabur stock was up 11% in the past three months and it will continue to “outperform” as growth visibility is improving.

7.1. Aviation scheme UDAN takes off, fares capped at Rs 2,500 for 1-hour flights

IBEF | Oct. 24, 2016

New Delhi: The Government of India aims to launch its first budget regional flight under the regional connectivity scheme (RCS), which has been named Ude Desh ka Aam nagrik (UDAN), by January 2017. Under the scheme, which aims to enable the common man to afford air travel, airfares will be capped at Rs 2,500 (US$ 37.37) for half of the seats in one-hour flights. UDAN will be based on market mechanism as well as bidding for a minimum of 50 per cent seats in the participating airline’s flight and the rest would be marketbased pricing. The cap on fares will be reviewed periodically based on consumer price index (CPI) for industrial workers and would also vary in tune with duration of a flight. The Government also plans to upgrade 50 more unserved and underserved airports in the country, in order to boost air connectivity across pan-India.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.

7.2. Honda strengthens its dealership network in India

Economic Times | Oct. 27, 2016

Kolkata: Honda Motorcycle & Scooter India on Wednesday inaugurated its 900th Honda Authorised Exclusive Dealership taking its total dealership network to 4,800 spread across the country. The company plans to further increase its network by adding 500 more touch points, totaling the number to 5,300 before this financial year end. The move is part of Honda’s vision to expand its footprint across the country.

Over the last five years, Honda has been aggressively expanding its network foothold in the hinterland. This fiscal witnessed an addition of more than 300 touch points, 80 per cent of which has been exclusively in the rural and semi urban locations only.

Elaborating on the expansion plans, Honda Motorcycle & Scooter India senior vice president, sales & marketing Yadvinder Singh Guleria said: "We have grown exponentially in the last 15 years of existence in India, in terms of sales, product portfolio, production capacity and network. The penetration in smaller towns is a critical part of our India strategy."

He further added, "along with rapid capacity expansion, introduction of new products across categories and strengthening our network in the metro and urban locations, we are now focusing on increasing our foothold in the semi urban and rural areas. Honda is now extending its reach to the last mile with 80 per cent of the touch points added this financial year being only in the semi urban and rural locations. We are confident that our growing network will cater to the increasing demand for Honda 2Wheelers and realise higher customer satisfaction in terms of services provided by Honda network."

Having witnessed phenomenal growth in customer demand over the years, Honda has strengthened its position in the Indian two-wheeler industry. The company continues to ramp up its dealership network, production capacity, while offering the best quality products and experience to its customers.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.

8.1. With 4,750 startups, India retains its position as 3rd largest startup base: Nasscom

Economic Times | Oct. 27, 2016

New Delhi: Despite a funding slowdown this year compared to last year's bonanza, as many as 1,400 startups have come up in the country this year, allowing India to maintain its position as the third largest startup base in the world with over 4,750 tech startups, ahead of countries such as China and Israel, the startup report released at the Nasscom Product Conclave on Wednesday revealed.

Even the number of startups that have been funded this year has increased by 8%, though the overall funding has come down by 20-30%.

“One of the reasons for the funding to have come down could be that investors are funding in tranches based on milestones. But it's a very positive sign that more startups are getting funded,“ said Ravi Gururaj, chairman, Nasscom Product Council.

Sharad Sharma, founder of software think tank iSPIRT, pointed at the strengthening startup density in Bengaluru, Pune, Chennai, NCR, Mumbai and Hyderabad over the last few years. “Since 2014, India has had 3.2 times more startups than Israel which is a shining example of the hi-tech industry,“ he said.

The Indian government's backing of the startup ecosystem was one of the talking points at the event. “The government has a really fantastic approach here. They go to the absolute bottom of the stack and have been building the core foundational infrastructure and have created a regulatory and legislative framework that is very supportive and conducive to innovation,“ said Chamath Palihapitiya, co-founder of Silicon Valley-based venture fund Social+Capital.

The report also highlighted the emergence of tier-II and tier-III cities in the startup ecosystem, with 66% of the new incubators set up in the smaller cities.

“I had gone to Udaipur for a wedding, and a local entrepreneur invited me to an incubator with 200 entrepreneurs working there. We are hearing the same stories from cities such as Bhubaneshwar, Indore and other cities,“ said CP Gurnani, Nasscom chairman.

Sectors such as fintech, healthtech, edtech were touted as the next big sectors in the report. More than 70 startups have come up in the fintech domain this year, 100+ in healthtech and 40+ in the education technology space.

Navakanta Bhat, professor at the IISc's electrical communication engineering department and co-founder of Pathshodh, a portable diagnostics devices startup, was also positive about the government's role.

“The key takeaway is that there is sensitivity from both sides -industry and academia. They were two worlds before. Now, the ecosystem, especially through right government intervention, has made it possible to have this transformation.“

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.

8.2. Karnataka inks agreements with Akshaya Patra, Akshara Foundation

Economic Times | Oct. 21, 2016

Bengaluru: The Karnataka government signed agreements Thursday with the Akshaya Patra Foundation and Akshara Foundation to tackle malnutrition and improve learning levels.

The agreement with Akshaya Patra involves serving fortified rice to 4.5 lakh children in 2,600 schools in Bengaluru, Ballari and Dharwad districts as part of the midday meal programme. One kg of fortified rice will be mixed with the 99 kgs rice supplied to these schools.

A year later, the government will review the benefits of fortified rice on the health of children.

Akshara Foundation will roll out the second phase of its Ganita Kalika Andolana (Math Learning Movement) in an effort to improve pass percentage in mathematics and science, which is low in government schools.

The 3-year partnership will have Akshara Foundation reach out to 1.29 lakh children in Classes 4 and 5 with specially-designed math kits across 4,419 schools in Bengaluru Rural, Chikkaballapura, Chamarajnagar, Chitradurga, Gadag and Dharwad districts at a cost of Rs 15.96 crore.

The Bengaluru-based nonprofit ran the first phase of the programme in 7,515 schools covering three lakh children in the backward Hyderabad-Karnataka region.

Karnataka’s Primary and Secondary Education Minister Tanveer Sait signed the agreements.

Akshaya Patra, which is run by the International Society for Krishna Consciousness (ISKCON), is known to run the world’s largest school lunch programme. The nonprofit supplies midday meals to over 5 lakh children in 2,841 schools.

“The Food Safety and Standards Authority of India (FSSAI) has asked states to go for fortified meals including rice, wheat, grain flour, oil, milk and salt. As a result, we want to start with fortified rice,” Sait said.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.

9.1. How Maharashtra is changing the way farmers sell their produce

Livemint | Oct. 18, 2016

Mumbai: These days, Lata Arun Dimble is out at 8am in her farm in Khed Shivapur. Along with husband Arun and son Ajit, she picks brinjal, tomato, chilly, cucumber, spinach, radish, bitter gourd, cabbage, cauliflower, and green peas. By 11 am, the vegetables are loaded onto a mini-truck her husband owns.

It’s the same story at neighbouring farms in Khed Shivapur affiliated to Kanifnath Shetkari Bachat Gat, a farmers’ group. Fruits including pomegranate, guava and banana are also loaded on to vehicles. Around 1pm, a small convoy of four-five mini-trucks with vegetables and fruits grown by 15 members of the group starts for Pune, Maharashtra’s second largest city which is 25km away.

Forty minutes later, the trucks empty their contents at Shetkari Grahak Athavadi Bazaar (farmer-consumer weekly market) off Pune’s Sinhagad road. The farmers spread their fresh produce at the stalls put up by farmers’ groups themselves, farm produce companies or farm produce cooperatives. In 15 minutes, Dimble gets her first customer.

From the farm to the customer, all it took was six hours.

Dimble’s group is one of the 60 such groups enrolled with Pune-based Shri Swami Samarth Shetkari Utpadak Company, registered with the Registrar of Companies. Narendra Pawar, one of its directors and a farm activist himself who has spiritedly piloted the deregulated farmer-consumer markets, says this change was long overdue. One of the 800-plus such companies operating in Maharashtra, Pawar’s Shri Swami Samarth is connected to around 2,200 farmers through 60 groups.

The Maharashtra State Agriculture Marketing Board (MSAMB) operates 31 such farmers markets in the state involving farmers’ cooperatives, farm producers’ organizations (FPOs), farmers’ self-help groups (SHGs) and farm produce companies. Out of these 31 markets, 25 are in Pune. According to Bhaskar Patil, a senior assistant manager at MSAMB, there are plans to open 100 such markets across the state.

A government agency, MSAMB also supervises the functioning of Maharashtra’s APMC (agriculture produce marketing committee) markets constituted under the APMC (Regulation) Act of 1963. “Except milk and sugar cane, APMC markets in the state are licensed to carry out transactions in all farm commodities,” Patil says. “But it is not mandatory on farmers to bring their produce to APMC markets only. The legal provision is that buyers licensed by Maharashtra’s directorate of agriculture marketing can purchase farm produce from farmers.”

Maharashtra has 305 principal and 603 secondary APMC market yards. The APMC Act mandates that these markets must have facilities like auction halls, warehouses, weigh bridges, shops for retailers, police station, post office, bore-wells, farmer amenity centres and a soil-testing laboratory.

“But most of the APMC markets offer very few of these facilities and the systems to buy produce from farmers, auction it, and sell to wholesalers and retailers through traders are very opaque and they leave enormous scope for malpractices,” says an official from the directorate of agriculture marketing requesting anonymity.

What is new?

There are three key differences between the APMC markets and farmer-consumer markets. One, at the APMC markets, farmers do not sell directly to consumers. Two, the produce is handled at multiple levels.

Three, farmers have to pay 10-20% of the value of their produce as market fees, commission, and charges for loading, unloading, and weighing. At the farmer-consumer markets, it is the farmer who is directly selling his produce to the consumer, cutting out all these steps. There are no levies either. The produce, as farmers like Dimble demonstrate, is transported fresh from the farm with least handling, which helps it retain freshness. Changdev Bhisare, a vegetable farmer at Bhiwri village near Pune, says at the APMC market, vegetables and fruits travel from farms to consumer through a multi-tier system. “The produce first reaches adtiyas (commission agents) at the APMC market yards, who auction it by negotiating the price with the buyers who are traders. This system leaves a lot of scope for farmers getting exploited because it is not transparent. We do not get to know the price of our produce immediately after auction. The final price is determined by the commission agent and we get paid the price by another transaction agent a week after the auction. The transaction agent also charges 3% of the price as service charge,” he points out.

After the farm produce is auctioned, the traders licensed by APMC take it to APMC-regulated wholesale markets, where retail buyers and hawkers buy the vegetables and fruits. At the next level, the produce is sold to the consumer. As the produce travels from farm to consumer through multiple stakeholders and handlers, its retail price goes up by 50% over the price that was negotiated by the commission agent at the auction. Also, Bhisare says, the produce suffers at least 25% damages since it is handled at multiple levels. “We don’t get the benefit of price appreciation but the consumers pay for it,” he says.

In August, Maharashtra chief minister Devendra Fadnavis opened Mumbai’s first “farmers to consumers” market on the premises of the Maharashtra legislature at Nariman Point. This followed an ordinance to exclude the sale and purchase of vegetables and fruits from Maharashtra’s APMC Act, and allow their sales outside APMC-regulated markets. MSAMB’s Patil says this intervention has provided farmers with a legal framework to operate outside APMC markets without any licence.

Patil calls farmer-consumer markets as part of “the second generation reforms in Maharashtra’s agriculture marketing sector”, after the first generation introduced a decade ago. “In 2006, Maharashtra came up with a model APMC Act which established private agriculture markets, direct marketing licence to bulk buyers and contract farming ventures. It also had a provision for farmer-consumer markets but it did not get implemented till June 2014 when we opened the first such market in Pune’s Kothrud area,” he says.

Patil also recalls resistance to these markets. “In Mumbai, for instance, the APMC traders would not allow a single truck of farm produce to move beyond the Vashi APMC market. The ordinance has effectively limited the jurisdiction of APMC Act to APMC markets only and not beyond,” he says.

Pawar of Shri Swami Samarth confirms that it has been extremely difficult for farmers to reach out to consumers, despite legal backing. “I have been named in two police first information reports filed against me for opening farmers’ markets outside APMC,” he says.

At Shirur, about 95km from Khed Shivapur, 23-year-old farmer Sagar Kolpe starts his daily grind a little earlier—at 7am, as he has to cover a longer distance than the Dimbles. “We have to transport our produce nearly 80km from Shirur to Pune,” he says. But Kolpe is happy. He points out that farmers like him could benefit from this only because they formed small SHGs, FPOs, and farm producers’ companies, and because these ventures have tied with government to create infrastructure. “I cannot do this alone. No single farmer can bear the cost of transport and paying the rentals for markets outside APMC,” says Kolpe.

Pawar concurs. “We also take produce to the Mumbai market on Sunday. Farmers start collecting vegetables late Saturday afternoon and load them on vehicles by evening. They leave around midnight for Mumbai and reach by 5am. The return journey starts around 12 noon. This is not logistically possible for one farmer,” explains Pawar.

At the other end of the chain, consumers are delighted. At the Nariman Point market, a middle-aged banker, who refused to give his name, says he has visited the market on three consecutive Sundays with his wife. “I read about it in the newspapers and wanted to see it for myself. Normally, we buy from superstores in the neighbourhood. This market is not as clean but it is not filthy also like the average sabji mandi. There are no stray cattle and dogs loitering about the place,” he says, carrying two bulky bags.

Kirti Diwan, homemaker and one of the regular consumers at Pune’s Sinhagad market, says it is a great concept as farmers bring “fresh from the farm” produce. “Before this market opened, I would buy vegetables from local sellers who rarely had fresh produce but still charged the same price. This market is much better and has a lot more variety,” says Diwan.

Madhukar Jogdand, another regular buyer says he does not mind paying more if his money is going directly to the farmers and he gets fresh vegetables. “Earlier, I was not sure if I was buying from farmers or traders. Now, I know I am buying stuff from the one who has grown it. The produce here is also least handled and so much cleaner. I don’t know why it has taken the government so long to start a thing as simple as this market,” he wonders.

Why indeed?

The answer

The answer is hidden in the labyrinth of regulations that rule agriculture markets in India. Maharashtra has tried to clear some of the regulatory roadblocks on the way from the farm to the consumer.

In 1963, when the APMC Act was enacted, the intention was not to create a monopolistic behemoth that it became. “The idea was to ensure that farmers get regulated markets close to their farms, and price for their produce. Regulations were put in place to protect farmers from getting exploited by traders and middlemen,” says MSAMB’s Patil.

To be sure, the APMC Act is not exclusive to Maharashtra and several other states have their own APMC Acts as agriculture is a state subject. Also, Maharashtra is not the first state to allow farmers to sell directly to consumers either. The Congress-ruled Karnataka is the pioneer here, concedes Maharashtra chief minister Devendra Fadnavis. In fact, Bihar got rid of the APMC Act in 2006 and Madhya Pradesh delisted fruits and vegetables from the APMC Act in 2012. In September 2014, Delhi denotified fruits and vegetables from the APMC Act, allowing producers to sell outside the APMC markets of Azadpur, Keshopur and Shahdara. (According to Economic Survey 2014-15, Azadpur is India’s second largest APMC market in terms of annual income with Rs90.9 crore in 2013-14).

A 2015 status report on APMC reforms prepared by Small Farmers’Agri-Business Consortium (SFAC), an autonomous body promoted by the Union government’s department of agriculture, cooperation and farmers welfare, said at least seven states including Maharashtra have notified rules to establish farmer-consumer markets.

What is special about Maharashtra’s APMC reforms then?

There are strong economic and political reasons why Maharashtra has become a template case of this great conflict between monopolistic and severely regulated farm produce markets and the new models of market reforms. According to the 2014-15 Economic Survey, the state is home to two of India’s biggest APMCregulated markets earning the highest annual income. The APMC market in Navi Mumbai’s Vashi—the gateway to Mumbai—is India’s top such market yard with an annual income of Rs126 crore in 2013-14, the survey said. Pune’s Gultekdi APMC market was fourth on the list of five such markets with an annual income of Rs47 crore in 2013-14. The survey said India had 2,477 principal APMC-regulated markets and 4,843 submarkets.

The state is also home to 36 private markets licensed by MSAMB under the 2006 reforms. The APMC Act specifies the jurisdiction of these principal and secondary markets. The membership of each APMC comprises farmers in that specified market area, traders and commission agents licensed by the directorate of marketing and chairman of the cooperative society which does the job of processing and marketing the produce in the specified market yard. The committee is elected every five years.

Congress leader and Maharashtra’s former cooperation and marketing minister Harshawardhan Patil, who controls some of the APMC market committees in Pune and Mumbai, outlines the scale of the APMC machine: “The entire agriculture market turnover in Maharashtra is worth more than Rs1 trillion. The APMC markets complete transactions worth Rs55,000 crore in a year. Transactions worth Rs30,000 crore per annum take place at smaller informal markets. Private contracts worth Rs20,000 crore are signed outside these two markets. There are 40,000 adtiyas in Maharashtra.”

Jaydatta Holkar, elected chairman of the APMC in Lasalgaon near Nashik, which is Asia’s biggest wholesale market for onions, says the APMC markets in Nashik district, thanks to the Lasalgaon APMC, have a daily turnover of Rs15-20 crore. “In a normal onion season, the Lasalgaon APMC sees a daily offloading of 2 lakh quintals of onions,” he says.

Maharashtra, these figures confirm, accounts for a large pie of this regulated farm produce economy. It is here that the government’s intent to carry out market reforms will be tested the most. There are multiple stakeholders and lobbies at work and the politics around reforms is severe, agree both Fadnavis and his predecessor from the Congress party Prithviraj Chavan, who did his best to push some of these reforms but was thwarted by the Nationalist Congress Party (NCP).

“I am glad Fadnavis is taking forward some of the reforms we initiated. I had also drawn up a list of reforms including deregulating fruits and vegetables from the APMC Act and the Congress party had the intent to carry them out. But I faced severe opposition from the NCP, which has a nexus with APMC traders and labour unions. Since it was an alliance government, we could not go ahead,” says Chavan.

The Congress veteran, however, cautions Fadnavis against being “brash” about these changes. “Reforms are welcome but you have to get all stakeholders on board. This government does not seem to be doing that and it is also doing things with a political intent,” says Chavan. Political claims and counterclaims apart, Chavan and Fadnavis, from ideologically rival camps but similarly committed to agriculture market reforms, have more in common: neither are farm leaders themselves, nor do they come from any of the stake-holding lobbies.

In the national context, the reforms in Maharashtra are a representative case. In July 2015, the Union cabinet approved setting up of a National Agriculture Market (NAM) between 2015-16 and 2017-18 with an estimated budget of Rs200 crore. The scheme proposes developing a common e-market platform that would be deployed in 585 regulated agriculture wholesale markets across the country. The Union government’s department of agriculture, cooperation and farmers welfare appointed SFAC as the nodal agency to implement the programme. In order to qualify for the e-NAM project and integrate select mandis with the common emarket, the Union government mandated states to carry out three reforms in their APMC Acts—a single licence to be valid across the state, single point levy of market fee and provision of electronic auction to determine price. By December 2015, only 138 APMC mandis in five states including 30 in Maharashtra qualified for this project. A project review report issued by SFAC in 2016 says 15 more states and Union territories have proposed to integrate another 400 mandis. In his 2016 budget speech, while making a strong case for reforms in the state APMC Acts, Union finance minister Arun Jaitley said 12 states had qualified for eNAM. Fadnavis says the number of qualifying APMC mandis in Maharashtra has gone up to 40.

In September 2003, the Union government came up with what is now known as the State Agriculture Produce Marketing (Development and Regulation) Act of 2003 or the Model Act 2003. The government also asked states and Union territories to enact similar laws in tune with the Centre’s legislation. Thus, in 2006, Maharashtra came up with its own model Act which put in place the first set of reforms.

A farm sector expert, who spoke on condition of anonymity, argues that farmers never had any restrictions on selling their produce to anybody. “It was only in 2006 that a legal mechanism was provided to establish private agriculture markets, contract farming, and farmer-consumer markets,” points out the expert. He, however, agrees that the NCP, which was an alliance partner in the previous Congress-led government in Maharashtra, resisted these reforms. “Wherever farmers could resist the NCP pressure, they could actually implement the reforms,” he says.

Pankaj Khandelwal, chairman and managing director of INI Farms, a Mumbai-based integrated horticulture firm focused on pomegranates and bananas, says the reforms seem to be in the right direction to put in place a legal and enabling framework. “The fundamental role of the government is to create an enabling environment which it seems to be doing with these reforms. But a lot more needs to be done to create the right infrastructure, provide farmers better access to market, and ensure competition and fair trade,” he says. Purnima Khandelwal, wife of Pankaj Khandelwal and chief executive of INI Farms, thinks the direct market between farmer and consumer is a good idea. “At INI Farms, we source pomegranates and bananas directly from farmers so that the quality of the produce meets export standards and expectations of our overseas consumers. In that sense, the farmer-consumer market is a great concept,” she says.

The farm sector expert cited earlier is sceptical. He says the government is still not creating a level-playing field between the markets outside APMC and the APMC markets. “Even though the government is claiming that markets outside APMC are not regulated, it continues to stifle the APMC market itself with regulations which prevent a level-playing field. How will a parallel system and supply chain get created when you continue to regulate the APMC,” he asks. The expert also points out that states which have carried out similar reforms much earlier have not been able to develop a marketing infrastructure and supply chain parallel to APMC. “Kerala never had APMC Act. Has it attracted private investment in agriculture marketing and developed a parallel supply and value chain? Bihar scrapped the APMC Act in 2006 but has it created better markets for farmers? In Delhi where fruits and vegetables were deregulated, there has not been any effort to create parallel infrastructure and farmers have gone back to the APMC markets. This simply means that APMC itself is not a problem. The state’s failure to reform APMC and simultaneously create competition by encouraging private investment is the problem,” says the expert. Private investors, will not come in this sector since this is a “low margin, high volume activity”, he says. “The government needs to make special efforts for private enterprise to come in and develop a supply chain.” Even efforts like farmer-consumer markets have their limitations, he says, and adds: “How many markets can the government open? In urban spaces, there are severe limitations on making places available for these markets. As it is, the turnover at these markets does not account for even 2% of the APMC trade.”

Agrees Shetkari Sanghatana’s Maharashtra unit president Raghunathdada Patil, who says 95% of the total transactions in agriculture market still take place at APMC markets only. “At most APMC markets, even these reforms are not being implemented,” he says.

At the end of the day at Sinhagad market, Dimble’s 20-year-old son Ajit counts their earnings. “Today, we carried produce worth Rs7,000 and made around Rs2,000. On an average, on each truck that we load with produce worth Rs6,000-7,000 we make Rs1,400-1,700. This is our net income after deducting transport expense and our contribution to the group to pay for the stall and other facilities,” he says. And his mother adds that this is so much better than APMC markets.

Big reforms or not, Dimble is delighted to actually see her consumers, talk to them and receive customers’ compliments about the “fresh cucumbers and spinach” that she brings to the Sinhagad market.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.

9.2. Niti Aayog ranks Maharashtra most farmer-friendly state

Business Standard | Nov. 01, 2016

New Delhi: Maharashtra has been ranked first state in the country on reforms in agricultural marketing, followed by Gujarat and Rajasthan, by the NITI Aayog.

Its first-ever index on reforms in the farm sector was issued on Monday. Uttar Pradesh, Punjab, West Bengal, Assam, Jharkhand and Tamil Nadu performed poorly, not even reaching the halfway mark of 50.

Termed the Agricultural Marketing and Farmer Friendly Reforms Index, it ranks states on three major parameters — reforms in agricultural marketing, land lease and forestry on private land. The minimum score of zero implies no reforms at all; a score of 100 would mean the opposite and the friendliest to farmers.

Maharashtra got 81.7 and Gujarat was second at 71.5, Puducherry, Delhi and Jammu & Kashmir got the lowest three grades, of 4.8, 7.3 and 7.4, respectively.

Three states and four Union Territories — including Bihar and Kerala — did not figure in the list, as these do not have any Agricultural Produce Marketing Committee Act.

“The state of Maharashtra achieves first rank in implementation of various reforms. The state has implemented most of the marketing reforms and offers the best environment for doing agribusiness among all states and UTs,” went an official statement.

Madhya Pradesh was ranked fourth, followed by Haryana, Himachal Pradesh, Andhra Pradesh, Karnataka, Telangana, Goa and Chhattisgarh.

The index is aimed at helping states identify and address problems in the farm sector, which suffers from low growth, low incomes and agrarian distress.

“Detailed study of the reforms in various states and UTs show that reforms have remained patchy, partial, sporadic and implemented in very diluted form,” the statement added.

The central government first introduced reforms in the APMCs or wholesale markets (mandis) through the model APMC law in 2003, urging states to adopt it; agri-marketing is a state subject under the Constitution. In the past decade, a majority of states have partly adopted the model law; some have ignored it. The Centre has since decided to bring another model APMC Act to address all the concerns of states,including the subject of contract, and to facilitate the setting up of private mandis.

It has also launched the electronic agriculture market (e-NaM) portal but success here has been slow in the absence of big mandi reforms.

NITI Aayog member Ramesh Chand told journalists it would take time for states to amend their APMC laws in line with the requirement of e-NAM. “While some states have demanded fruits and vegetables to not be included under the Act, others have asked for the commodities not to be taxed,” he said.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.

– INDUSTRY, MANUFACTURE

10.1. "Make in India", "Skill India" and "Digital India" Positive signals of new Transformation

Press Information Bureau | Oct. 26, 2016

New Delhi: Minister of Information and Broadcasting, Shri M. Venkaiah Naidu has said that digital and mobile tools have been leading to paradigm shifts in the M&E sector. The growth of varied platforms such as 4G, broadband, mobile technologies, digital media has enabled the M&E sector to move towards “Convergence across platforms and content”. The Government of India's “Make in India”, "Skill India" and “Digital India” campaigns were clearly positive signals of the new transformation including GST which is expected to be a game changer for the M&E sector. Shri Naidu stated this while delivering the keynote address at the inaugural function of the 5th Edition of CII Big Picture Summit at New Delhi today. The theme of this year’s Summit is 'Embracing Disruption to Stay Competitive'.

Regarding opportunities in the skill sector for the M&E industry, Shri Naidu said that the Government is fully aware of the acute shortage of professionals across different segments. He mentioned that he would like the industry to give its recommendations on the steps to be taken to match demand and supply as well as the recommendations emerging from the discussions at the summit for the different sessions focusing on skill assessment and needs.

On the issue of growth prospects for the industry, Shri Naidu said that as part of the national policy, the Government would work with the industry to develop infrastructure to get the right talent at the appropriate sectors.

The M&E sector in India had always been a very liberal media market and a number of initiatives had been taken including opening up and liberalizing FDI in the broadcast sector. For the initiatives in the film sector, Shri Naidu said there is a huge opportunity to make India lead in the world as film shooting location and digital media hub for the world. Our films, actors, content, technology were expanding footprint to new and emerging global markets, and the aim of the Government was to make this transition smooth by creating an enabling regulatory environment. The Co-production agreements with other countries has ensured the projection and branding of India’s soft power.

On the issue of the theme of the Conference “'Embracing Disruption to Stay Competitive”, the Minister said that this process had substantially altered the business models across the world. The Indian M&E industry needed to outline a firm roadmap to ensure the convergence of networks, devices and content, the core elements of the digital entertainment process. Shri Naidu referred to the Government’s Digital India and Smart City initiative that were going to have a major impact on increasing the penetration of Internet to Tier-II and Tier-III cities. He also referred to the potential of smartphones in facilitating a critical role for consumers’ professional and personal lives. The Government’s initiatives and private sector participation was necessary to ensure the optimal use of the potential of the digital ecosystem.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.

10.2. Holitech plans to invest US$ 1 billion in India by 2017

Economic Times | Oct. 24, 2016

New Delhi: Holitech Technology, a maker of LCD and touchscreen panels used in mobile phones, plans to invest $1billion in India by next year, a top company executive said. The announcement comes at a time when states like Haryana, Uttar Pradesh and Telangana are vying among themselves to woo Chinese component makers, as local smartphone companies seek suppliers to move up the value chain.

“We are looking at the supply chain here and how mature it is,” said Bingshuang Chen, chief executive of Holitech Technology, adding that the company was waiting for research and development (R&D) expertise to grow in India so it can work directly with handset brands here.

“From our point of view, next year will be best time for us to enter the country…It (investment) could be as big as $1billion considering the requirement of facilities, equipment and all other technical aspects,” he added. The Jiangxi-based component maker is among the several mobile phone manufacturers and component developers that are part of a high-level investment delegation from China on a sixday India visit till October 26. A similar event was held earlier this year as well, however, investments from component makers are yet to begin.

"If Foxconn has not got its own component makers yet, why would others take the plunge," asked Vishal Tripathi, research director at Gartner India."Indian handset makers are already purchasing components from China, so there needs be a compelling business driver for Chinese component makers to invest heavily locally."

Though Chinese component makers are taking their time to set up shop in India, states like Uttar Pradesh are offering developed land and skilled manpower in and around Greater Noida, to hasten the pace of investment. UP secretary for information technology, Sanjiv Saran said the state will soon begin giving 200% refundable VAT (value-added tax) to companies for building manufacturing units in the state.

“It should be passed in the next Cabinet meeting.” Saran added that UP, which has the largest concentration of mobile assembly units in India, is getting greater interest from Chinese phone makers Vivo and Oppo, both of which have asked for 200 acre of land to build their own campuses. On the other hand, new state Telangana, which is pitching Hyderabad to investors, is offering automatic deemed approval to an investment project within 15 days.

“We have created the most aggressive industrial policy and we have given approval to 2,500 companies in the last 18 months, half of them have started operations,” said Sujai Karampuri, director of Telangana government’s information technology department. Haryana is pitching infrastructure and its past experience to Chinese component investors, on the back of numerous automotive companies that have set up factories over the past few years. Devender Singh, principal secretary of IT and electronics in the Haryana government, is pitching proximity to Delhi airport and the industrial and freight corridors besides single roof clearance as part of ease of doing business for investors.

“We are also offering special incentives for mega projects of more than Rs 100 crore,” he added. Holitech’s Chen said the company’s ODM and handset vendor partners are in touch with state governments for future facilities. Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.

11.1. Ashok Leyland launches India's 1st electric bus

Livemint | Oct. 18, 2016

Mumbai: Ashok Leyland Ltd on Monday unveiled its Circuit series electric bus, the country’s first such indigenously made vehicle.

Designed and engineered in India, it’s in line with the company’s vision for the future of mass mobility, it said in a statement.

“We believe electric vehicles will happen sooner than later,” said T. Venkataraman, senior vice-president for the global bus platform at the firm, adding that while people have been talking about electric vehicles, Ashok Leyland wanted to be the first to unveil a production model.

Specifically developed for Indian road conditions, the zero-emission vehicle will be offered on multiple platforms and enjoys a subsidy under the government’s Faster Adoption and Manufacturing of (Hybrid) and Electric Vehicles (FAME) scheme. It can travel 150 km on a single charge, taking care of the so-called ‘range anxiety’, said Venkataraman.

The level of subsidy is governed by the charging speed, length of the bus, among other factors. Ashok Leyland will be the first bus maker to leverage the government subsidy.

Launched in April 2014, FAME is part of the government’s ambitious National Electric Mobility Mission Plan, which intends to put seven million electric and hybrid vehicles on the roads by 2020.

Ashok Leyland plans to sell close to 50 electric buses in the current fiscal and around 200 units next year. Of the Rs500 crore capital expenditure lined up for the bus business, the Chennai-based company plans to spend 10% on electric buses.

Ambuj Sharma, additional chief secretary, industries and commerce, Tamil Nadu, said the electric bus is a big leap in mass public transport. It would support the government initiative of reducing India’s Rs8 lakh crore fuel import bill. “It’s a promise for a brighter and cleaner future for all of us and for our future generations,” said Sharma.

Vinod K. Dasari, managing director, Ashok Leyland, said, “The Circuit series of buses is another testament to Ashok Leyland’s commitment to leverage India’s technological innovation to deliver relevant and best-in-class solutions for India and the world.”

The Hinduja Group flagship has delivered the bus ahead of schedule, he said, after committing in April 2015 to develop vehicles with full electric power trains.

Integrated with a fire detection and suppression system, the new range of buses are built on a simple, massmarket platform that will enable the operator to cater to customers in city centres with minimal operational and maintenance costs, said Venkataraman.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.

11.2. Comparison with Tesla is nice, but we have a different game plan: Mahindra’s Goenka

The Hindu | 23 Oct.2016

When you ask Pawan Goenka, Executive Director of Mahindra & Mahindra (M&M), if his company can be compared with Tesla, he says he is happy that the two are compared, but the Indian-grown company’s focus is quite different.

“The good thing is that we always get compared with Tesla, which is nice. But, we are playing in two different spaces — Tesla is focussing only on the high-end personal-usage electric vehicle, we are focussing on the commercial and personal use as well and also in the entry-level,” he said.

Mahindra’s approach is different, he said, adding: “Our approach is to look at making it a mass market technology. There is a strategy that they have and strategy we have.”

He said though India has not grown yet in the electric vehicle (EV) segment, but the companies cannot ask more from the government for subsidies. “It is the consumer who has to be educated,” he added.

Customers’ role

“One can always ask for more, but then, one should also be practical about it. The Central government and State governments are working together to make the subsidies available everywhere. Customers also have to see what all benefits they are getting,” he said.

On asked about the lack of infrastructure for EVs in the country, as a perfect salesman Goenka stated, “Infrastructure is overstated. You buy an electric car, use it and call me if there is any problem…I will come and charge your battery. It’s a promise.”

He said one has to see how eco-friendly an EV is and benefits of buying one and even if one thinks of aftersales issues, there should not be much.

an EV runs without an engine, one does not have to think about engine oil or oil filter to be serviced every now and then.

And, even if one thinks that battery costs a lot, with a running cost of just 70-80 paise per kilometre, one can save on fuel prices to buy a battery instead after the five-year life of a battery.

“The savings that you put from not using petrol or diesel, then you will have more than enough money collected to buy a new battery. Clearly, in five years of use, you would have saved enough money to buy the next battery. Servicing of an EV is also much lesser than a regular vehicle,” Goenka quips.

Battery technology

But, on the battery technology, he said that it is something that M&M will not work on as there is enough going on battery technology globally.

‘By doing something here, we are not going to make a difference. What we are working on is -- how to optimise the use of battery – the software and control system of the battery rather than how to design a battery,” he said.

Meanwhile, the company launched electric vehicle portfolio with the launch of e20 Plus hatchback priced at ₹5.46 lakh to ₹8.46 lakh (ex-showroom, Delhi).

11.3. Hero MotoCorp invests Rs205 crore in electric vehicle start-up Ather Energy

Livemint | Yuvraj Malik and Amrit Raj, 28 Oct.2016

New Delhi: Delhi-based scooter and motorcycle maker Hero MotoCorp Ltd on Thursday said its board had approved an investment of up to Rs205 crore for a 26-30% stake in Bengaluru-based electric vehicle (EV) start-up Ather Energy Pvt. Ltd.

“Adoption of environment-friendly fuel is a priority for Hero MotoCorp, as is propagating sustainable manufacturing through green facilities. Hero MotoCorp intends to enhance its participation in the EV (electric vehicle) space by pursuing its internal EV programme in addition to partnering with Ather,” Hero said in a statement to BSE.

It added that the payment to Ather will be made in tranches.

This is the Pawan Munjal-led company’s second investment after it separated from Honda Motor Co. in 2010, ending a 26-year partnership. Its first was in US-based Erik Buell Racing, a move that backfired after the Erik Buell-led bike company filed for bankruptcy. Hero wrote off the investment.

Hero has now taken a conscious call to foster innovation and new technologies in-house and with the help of start-ups , said Rajat Bhargava, its head of strategy and performance transformation. “So, quite naturally, we picked up (a stake in) Ather. But it will be important that Ather continues to function as a start-up,” Bhargava added.

“I think electric two-wheelers are going to be a reality faster than the four-wheelers. So, Hero is coming from that perspective,” said Abdul Majeed, partner and auto practice leader, PwC.

Hero will have a nominee on the board of Ather.

“We will clearly not be just a financial investor. There is a lot of expertise that we have, which we will bring to the table for Ather (to use),” Bhargava said.

Started in 2013 by alumni of the Indian Institute of Technology, Madras, Ather unveiled a model of its first scooter Ather S340 in February.

The scooter will go on sale in late 2017, said Tarun Mehta, co-founder and chief executive officer, Ather. Primarily an electric scooter, Ather S340 has a tablet-like console integrated with Google Maps and other applications. The scooter is also connected to Ather’s system, which will alert users to possible problems. Mehta claimed the scooter runs up to 100km on full charge and can charge 70-80% in an hour.

“Launching the product commercially is still way down the road. First, we have to build a network of charging stations and an ecosystem,” Mehta said.

The money from Hero will go towards funding research and development, product testing, building a network of charging stations and expanding the product portfolio, Ather said.

Ather will also use some of the money to build a factory in Bengaluru, where it recently purchased land for one.

India wants to put as many as six million electric vehicles on the roads by 2020, with two out of every three being either a bus or a scooter/motorcycle.

12. Ministry of Shipping sponsors safety training program for ship recycling workers under Sagarmala

Press Information Bureau | Nov. 03, 2016

New Delhi: As part of its Coastal Community Development Programme under Sagarmala, the Ministry of Shipping has sanctioned Rupees 10 Crore as part of the first instalment to the Gujarat Maritime Board for capacity building and safety training of 20,000 workers involved in the ship recycling activities at AlanagSosiya recycling yard in Bhavnagar district in Gujarat. The total project cost is estimated to be Rupees 30 Crore over a period of 3 years.

The initiative has been identified in the National Perspective Plan (NPP) of Sagarmala for the upliftment of the coastal community and aims to provide health and safety training to the skilled and semi-skilled workers which is required while performing their work at ship recycling yards. Due to the accident prone nature of the ship breaking activity, Gujarat Maritime Board has been running an indigenous Safety Training and Labour Welfare Institute at Alang and has trained about 1.10 lakh labors over the last 12 years. However, with the increased volume of ship recycling over last decade and to bring the training standards at par with the international regulations like UN Body -International Maritime Organization, it is imperative to enhance the capacity build-up and upgrade the existing training standards.

The safety training programme under Sagarmala has been specifically designed and conforms to the Common Norms for Skill Development Schemes under National Skill Qualification Framework notified by the Ministry of Skill Development & Entrepreneurship in Gazette Notification dated 8th August, 2015. A new module has been proposed which would impart comprehensive training to workers about Occupational Safety & Hazards at workplaces that are likely to cause injuries, death or chronic occupational diseases.

In India, ship recycling has emerged as an activity of sizeable volume, supplying raw material to steel industry for both re-rolling and re-melting. The Alang Sosiya Recycling yard is the largest ship-recycling yard in Asia, which employs an average 15000,-25000 labourers at a time and generates about 35 lakh LDT (Light displacement) per annum. On an average 350 numbers of ships are recycled every year in which more than 3 million MT of steel is generated through recycling route.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.

13.1. MSDE Announces Launch Of Pradhan Mantri Yuva Yojana To Scale Up An Ecosystem Of Entrepreneurship For Youngsters

Press Information Bureau | Nov. 10, 2016

New Delhi: Marking the 2nd Foundation Day of Ministry of Skill Development and Entrepreneurship, Minister of State(I/C) for Skill Development and Entrepreneurship Shri Rajiv Pratap Rudy, , today launched the Pradhan Mantri YUVA Yojana, MSDE’s flagship scheme on entrepreneurship education and training.

The scheme spans over five years (2016-17 to 2020-21) with a project cost of Rs. 499.94 crore, and will provide entrepreneurship education and training to over 7 lakh students in 5 years through 3050 Institutes. It will also include easy access to information and mentor network, credit, incubator and accelerator and advocacy to create a pathway for the youth.

Speaking on the occasion Shri Rudy said, with this the government has taken important strides to scale up entrepreneurship in the country. He said, Pradhan Mantri YUVA Yojana has national and international best practices of learning in entrepreneurship education.

He said, MSDE’s two institutions dedicated to entrepreneur education and training – NIESBUD and IIE- have trained more than 7 lakh trainees including 2,600 persons from more than 125 countries in the field of entrepreneurial skills till date. After becoming a part of this Ministry, these two institutes are now focusing on mentorship of budding entrepreneurs across the country. We have seen success so far and we are determined to create more opportunities of employment for our youth through this initiative,” he further added. The institutes under the PM’s YUVA Yojana include 2200 Institutes of Higher Learning (colleges, universities, and premier institutes), 300 schools, 500 ITIs and 50 Entrepreneurship Development Centres, through Massive Open Online Courses (MOOCs).

The announcement on scheme was made at a day-long national conference of State Ministers on “Skilling with quality” which saw more than 80% of the States making their representations. The conference emphasized on the need for strengthening institutional mechanisms for skill development at the State level and bringing in a more robust framework ensuring quality output, outcome and impact on the youth of our country.

The conference explained Ministry of Skill Development and Entrepreneurship’s (MSDE) efforts in ensuring alignment to common norms, district level committees, best practices, special projects, disadvantage groups and a robust model for monitoring and validation and emphasized the needs for States to come forward and handhold districts in making all skill initiatives a success at the local level.

MSDE communicated that it has plans to disburse around INR 7000 crore to states to help align them with the centre’s skill development agenda and work in conjunction with them to ensure a robust ecosystem. Addressing the Conference, Secretary MSDE Shri Rohit Nandan, said, Skills have to maintain a certain baseline standard and we should not get caught in the numbers. Skills cannot be compromised at any cost and States should partner with the Centre to verify and grade ITIs and Training Partners so that quality and standards can be maintained. The Sector Skill Councils (SSCs) will work closely with the local authorities and industries towards job aggregation. Those who perform well will be incentivised while those who do not perform will have to exit.

The conference also saw Shri Rajiv Pratap Rudy, unveil the guidelines for State Engagement under Pradhan Mantri Kaushal Vikas Yojana 2.0 (2016-2020) in the presence of State Ministers. The guidelines provide a framework for the State Government’s role and processes, the funding support and the scheme’s implementation and monitoring mechanism. MSDE has allocated around 3000 crore of 25% from the funds earmarked for the Pradhan Mantri Kaushal Vikas Yojana (PMKVY) to the States, to achieve its target of training 10 million people over 4 years.

MSDE also unveiled the Lab Guidelines towards standardisation of lab equipment across skill development training centres in India at the conference. These guidelines specify the number of job roles that can be done in a lab, standard lab layout, and available brands of equipment which should be used. These guidelines will pave a pathway in increasing the employability of trained candidates across States ensuring industry standards.

Emphasising on the importance of being self-sustainable, MSDE announced the institutionalisation of National Entrepreneurship awards for first generation achievers below 30 years, for the very first time. The Entrepreneurship Awards are proposed to be given on 16 January 2017. The young entrepreneur will be awarded in various sectors contributing to the economy of our country. Equal emphasis has been given to recognize the meaningful contribution of ecosystem builders in this award process. Equal focus has been given to recognize young people from socially disadvantaged groups. “We believe that this initiative will motivate first generation entrepreneurs to improve and excel in their entrepreneurial pursuits, and inspire those who are a part of the country’s entrepreneurship ecosystem to excel even further,” said Secretary Shri Rohit Nandan.

States like Madhya Pradesh, Maharashtra, Bihar, Uttar Pradesh participating in the conference lauded the Centre’s endeavour to bring about convergence across regions and also shared their best practices on Quality Assurance for others to follow. States stated that the quality has to be engrained into the system right at the planning level and also ensured that the skilled workforce will be used for infrastructure and other developments within the region. State Minister from Uttar Pradesh also shared how there skilled workforce is being given international exposure by sending them abroad for training courses in skills like perfumery. The Ministry also emphasised on increasing engagement with apprentices under the “National Apprenticeship Promotion Scheme” under which the Government of India will share 25% of prescribed stipend subject to a maximum of Rs. 1500 per month per apprentice with the employers. In addition, Government will also support basic training, which is an essential component of apprenticeship training. It was advised that States may create a State Apprenticeship Cell and encourage engagement of apprentices to the maximum of 10% of total strength of private establishments and State Public Sectors.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.

13.2. How taxi drivers are taking the road to entrepreneurship

Livemint | 4 Nov. 2016

The online taxi service revolution, courtesy Ola, Uber and Meru, has proved to be a boon not just for drivers but also for those seeking additional income Mumbai: Abhishek Sahijpal works as a systems administrator at the Mumbai office of a French multinational. His late father used to work with the Indian Railways in Mumbai where Sahijpal grew up. He has a postgraduate degree from Chennai’s Annamalai University. He has a three-year-old daughter and a cookie-cutter middle-class life.

Yet, Sahijpal moonlights as a taxi driver for Ola and Uber, shattering the stereotype of what a cab driver in the city should be like. But that’s not the only convention he is breaking: He converses with customers in English, enjoys driving on these “hellish” roads and sees his new occupation as a positive.

“Looking at the times we live in and other countries,” he says over the phone, “I thought: I am well educated, I can see a growing trend which interests me and I can drive. So, I started doing it. Today, when you go abroad, driving a cab is the most basic of jobs. So, I said, let’s try it in Mumbai and see how it works out.”

Importantly, Sahijpal is his own master—at least before noon every day when he chooses to operate his taxi— as he owns the car he drives, bought specifically for the purpose of operating it as a cab since February. It’s given him extra income to cover the EMI costs and petty household expenses, and given him a heightened sense of independence.

“I operate the cab when I feel like, whenever I have extra time,” he says.

"My mother was upset when I went into this (taxi-driving business)... My friends, everyone asks, ‘Why are you doing this?’ They ask if I have lost my job. I tell them I’m doing this out of interest"- Abhishek Sahijpal, a systems administrator who moonlights as a taxi driver

Sahijpal is one among several thousand in the industry who have discovered an entrepreneurial spirit on the back of a burgeoning taxi business. Many have bought cars so they can operate as cabs, bought multiple cars and hired drivers so they can increase revenue and pushed their own limitations in dealing with paperwork, investing in customer services and learning new technology. The social biases are blurring as white-collared workers too are looking at the driving-taxi business with a different mindset.

Ola and Uber hold a majority of the market share since their launches 3-5 years ago—Ola insists it is more than half while Uber claims to be on par. There is no independent agency that tracks these numbers, but both are battling for a share of India’s cab business that may be worth $7 billion by 2020, Mint had reported. While Ola operates about 450,000 cars in over a 100 cities, Uber has 400,000 driver-partners in 28, handling 5.5 million rides per week, and both are expanding fast.

“Long term, we believe this industry would need a million drivers. The gap is still big,” says Siddhartha Pahwa, CEO, Meru, one of India’s first such cab services.

Sound business plan

Other taxi services, like Taxi for Sure (which Ola acquired and then shut down), Easy Cabs, Priyadarshini, Mega Cabs, Tab Cab, among others, have either fallen by the wayside or struggling to compete.

Though still resisted by local cab operators—like black-and-yellow taxis in Mumbai, for example—drivers (or driver-partners as Uber calls them) and owners who spoke to Mint for this article, maintained that these services had made earnings and lifestyle better.

Pradeep Kumar Verma, 36, lives in Mumbai with a family of six—elder brother, his wife, two younger brothers and older brother’s daughter. His wife, two children and parents live in Binepur, a village near Varanasi in Uttar Pradesh.

Verma has been here for about 20 years, having started as an auto-rickshaw driver, earning Rs300-400 per day, before switching four years ago to become a private taxi driver, earning Rs16,000 per month.

14.1. Amazon will continue to invest heavily in India, says Amit Agarwal

Livemint | Nov. 01, 2016

Bengaluru: Amazon.com Inc. will continue investing heavily in India, the chief of its local operations said, dispelling concerns of slower spending by the US e-commerce company after its chief financial officer Brian Olsavsky said last week that while the India investments were starting to show results, they had hit margins, contributing to lower-than-expected results in the third quarter.

“Not at all,” Amazon’s India chief Amit Agarwal said in an interview on Monday when asked whether Amazon would slow down investments in India. Amazon, which initially said it would invest $2 billion in India, had said in June that it would invest an additional $3 billion in the country.

That investment is on track, Agarwal said, adding that the company is “excited about the momentum that we see in India”.

“India is very early in its e-commerce trajectory. Amazon is very early in its e-commerce trajectory in India. To transform how India buys is going to take a long time; it will take a lot of investment and... for many years. This is just the beginning.”

Amazon is betting big on its Prime service in India and expects the loyalty programme to dominate sales in the coming months.

“Prime continued to be the top seller in all of October, not just for wave one (of the Great Indian Festival).

Prime membership continues to be a top seller and it is going to be so going forward every month. My belief is that Prime membership will be the top seller every month based on the trends that we are seeing,” said Agarwal.

On Monday, Amazon also said that it witnessed record numbers during its month-long Diwali sale event, the Great Indian Festival, with sales jumping 2.7 times from last year.

This year’s Diwali sale has proven to be the biggest showdown in the history of Indian e-commerce, with Amazon India and rival Flipkart going all out to woo shoppers.

While Flipkart claimed to outsell Amazon India during the first leg of the sale season, Amazon claims it came back strongly during the latter half of the sale season, with bigger discounts in key categories such as smartphones and large appliances.

“October this year for us was 2.7 times of last year’s October—which is incredible because last year was 4 times the October before,” said Agarwal, adding that this growth came even as “conversations” suggested growth in India’s e-commerce business was going to be flat.

Agarwal said that October could be an inflection point for e-commerce in India. “We had categories from phones to Amazon Fashion to appliances growing three to 11 times; even newer categories such as luxury and beauty grew 46 times; grocery and everyday consumables, 7.1 times; furniture, 11.8 times; gold jewellery, eight times—so a lot of these categories are showing robust growth.”

Agarwal said that 70% of the company’s new customers in October came from tier-II and tier-III cities, adding that it was confident of carrying the momentum from its Diwali sale well into November and December. Mint couldn’t independently verify the numbers, but, in general, all e-commerce marketplaces (including Snapdeal, Amazon and Flipkart’s smaller rival) did well in October, carrying forward their momentum from their annual sales.

“When I look at the gaps between the waves, our growth rates in those gaps continued to the same extent. We’re growing at 150% year-over-year. At peacetime, the growth rate is still what I’m telling you. And as we exit out of wave three (the third sale event in October), we don’t see a slowdown,” Agarwal said.

“The broader e-commerce story is not just a Flipkart-Amazon battle. Of course, both Flipkart and Amazon are trying to get a fair share of the pie in key categories such as electronics, fashion and large appliances. And despite drags on margins, nobody is going to reduce investments in India. What you will see, however, is that they will focus on innovation. For example, during the festive season, smartphone sales shot up and a lot of the sales jumped due to things like product exchanges. Another new innovation was something like Amazon Prime. So, you’ll see a lot of that going forward,” said Sreedhar Prasad, partner-e-commerce at KPMG.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.

14.2. Ecom Express: Cashing on the e-commerce wave

Livemint | 20 Oct. 2016

E-commerce-focused logistics firm Ecom Express is currently doing 250,000 deliveries per day and expects volumes to spurt to 500,000 deliveries per day during the festive season.

New Delhi: It started with a dinner table conversation sometime in 2012 between four colleagues and friends—T.A. Krishnan, Sanjeev Saxena, K. Satyanarayana and Manju Dhawan. Besides their employer, courier services provider Blue Dart Express Ltd, they had two other things in common: all were in their late 40s and ready to leave their comfortable jobs to take a shot at building their own company.

The four were working at the northern division of Blue Dart, an almost three-decade-old company and one of the pioneers of express delivery services in India. Krishnan was heading the newly formed e-commerce division at the firm.

Entrepreneurship is a risky career choice, all the more for those on the verge of their 50s and with a family to consider, but Krishnan, Saxena, Satyanarayana and Dhawan were ready to take the plunge. The result of the conversation the four had that night was the founding of e-commerce-specific logistics firm Ecom Express Pvt. Ltd.

E-commerce was a growing phenomenon at the time in India. Venture capital and private equity (PE) firms were demonstrating their faith in the potential of e-commerce in the country. The sector received $305 million of funding in 2011, an almost sixfold jump from $55 million in 2010, according to a 2012 report by research firm EY.

The idea behind Ecom Express was to set up a dedicated logistics firm to take care of the shipping and distribution needs of the e-commerce sector. Until then, it was largely catered to by courier services providers such as Blue Dart.

To be sure, a niche market for e-commerce delivery had already begun to sprout when the four teamed up to start their own venture. Delhivery, which was concentrating on e-commerce logistics, had launched in 2011. It was delivering more than 500 shipments per day for five e-commerce clients in the National Capital Region (NCR) by December 2011, according to its website. The projected growth rates for e-commerce meant there was room for competition.

“The way the industry was shaping up and the volumes were happening, we knew it was only a matter of time before specialists emerged,” said Krishnan.

The idea behind Ecom Express was to set up a dedicated logistics firm to take care of the shipping and distribution needs of the e-commerce sector.

The decision couldn’t have been easy. Krishnan’s son was about to enter engineering college and his daughter was still in school. His wife was a homemaker. The other three were in similar personal situations. According to Krishnan, at the age of 45-48, even if one is a domain specialist, employment becomes difficult. “We had only one option—that this had to work,” said Krishnan, who is chief executive of Ecom Express. The bigger question was how to ensure that none of their families would be adversely affected by their entrepreneurial endeavours.

So they conducted a second meeting. This time, their spouses were in attendance as well. Questions were raised—how would the finances be taken care of, how long would they give the project, among others. The four did their best to address the queries of their spouses and convince them. They got the go-ahead.

The beginning

Krishnan reminisces that when Blue Dart started cash-on-delivery services and ventured into e-commerce deliveries, it would get dozens of calls every day and three or four customers would get on board. “The first year, the revenue that came from the e-commerce segment was approximately Rs80-100 crore. It was one of the fastest growing segments Blue Dart had,” he said.

Ecom Express started with 44 offices spread across 35 cities. E-commerce firm Naaptol was its first client. Everyone was convinced that the opportunity was there.

Krishnan and Saxena quit Blue Dart in October 2012. Dhawan left a month later. Satyanarayana quit in January 2013, when Ecom Express was launched with the help of funding from early-stage investor Oliphans Capital.

They started with Rs7 crore of capital, with almost Rs5.5 crore coming from Oliphans and the rest from the founders. The plan was to launch in multiple locations simultaneously, so that customers didn’t perceive Ecom Express to be a niche firm operating only out of NCR.

The company started with 44 offices spread across 35 cities. E-commerce firm Naaptol was its first client. Ecom Express started with 100-odd deliveries per day. It earned Rs8 lakh in revenue the first month. Business surged in the next two months to Rs65 lakh and Rs85-86 lakh, respectively. Post this, the firm doesn’t share its revenue numbers.

“The market accepted us pretty well. The kind of services we were able to give, differentiated from what other players were giving them, we soon became the preferred partners. Once they got confidence that we will be able to handle volumes, and were financially stable, there was no looking back,” said Krishnan.

The growth phase

By early 2014, Ecom Express was delivering packages in about 60 towns. With the kind of growth it was experiencing, the founders needed more capital to sustain the business and grow. Funds were drying up and the company had almost no money left to pay salaries.

The founders didn’t want to approach equity investors so soon. “We wanted to have traction and show our business to people first before we hit the market for our next round,” said Krishnan.

The founders decided to borrow money from the market. Krishnan realized that he had no option but to pledge his house in Mayur Vihar, Delhi, for that. The other founders also chipped in with whatever little cash they could. An angel investor too lent them some money. They managed to borrow around Rs4 crore. In 2014, Ecom Express CEO T.A. Krishnan pledged his house in Delhi to raise money for paying salaries. Later that year, the firm raised Rs80 crore from Peepul Capital.

The money helped them manage until June 2014. Ecom Express then raised around Rs80 crore from PE firm Peepul Capital.

Once the money came in, the company expanded aggressively from 60 cities to 200 cities before Diwali that year. From delivering around 45,000 packages in June, it grew to almost 120,000 pieces per day in October. “With expansion and with the season, it took us to a different position altogether,” said Krishnan. Then came a jolt for the e-commerce sector.

It was the first Big Billion Day sale organized by e-commerce firm Flipkart. Rivals Snapdeal and Amazon India were also running their own sales. Orders poured in. The e-commerce ecosystem was not prepared and it choked under the avalanche of orders.

Problem of plenty

“We were expecting some amount of growth but were not expecting this amount of volume. All of us messed up. We messed up by not being able to move the cargo by air because the airports were choked. So we had volumes floating within the system, some with airlines, at destination airports. Between October and December, it was a huge task getting shipments delivered,” said Krishnan.

During the festive season in 2014, Ecom Express chocked under the avalanche of orders, with volumes floating within the system, some with airlines, at destination airports, says CEO Krishnan.

In a statement then, Flipkart said that the order volume was so vast that it took the company just 10 hours to hit its target of $100 million in gross merchandise value, or the value of goods sold on the site.

According to Krishnan, the e-commerce companies never held discussions with logistics partners about what they expected. And, there was no coordination between the two.

“2014 was a bumper year from the volume perspective, but completely chaotic from that of operational efficiency. For logistics, it was a nightmare,” he said. “We knew that we could not build our business on aviation capacities alone. We decided that we had to set up our own network.”

In January 2015, Ecom Express put together its own network by roping in dedicated third-party fleet providers. The company said it needed to have a sustainable and reliable road transportation network given the limitations of the aviation sector. “It was an expensive experience but we had no choice. Today from Delhi to almost every city, we have our own network. Our idea was to give our customers reliable services rather than saying that we are the fastest,” added Krishnan.

"2014 was a bumper year from the volume perspective, but completely chaotic from that of operational efficiency. For logistics, it was a nightmare"- EcomExpress CEO T.A. Krishnan

Warburg Pincus takes a bet

Ecom Express announced its next round of funding—Rs850 crore from global PE firm Warburg Pincus—in June 2015. Most of the company’s existing investors, including PE firm Peepul Capital, exited during this round.

According to Krishnan, Viraj Sawhney, managing director of Warburg Pincus India Pvt. Ltd, approached Ecom Express when the firm decided to go ahead with financing from Peepul Capital in its series A round. While Ecom Express founders turned down Warburg Pincus then, Sawhney and Krishnan stayed in touch. “I told him that the way I am seeing the response to the business, though we are saying the money will last 18- 24 months, we may need to raise funds even earlier. This is exactly what happened. Between June and October 2014, we had built up a huge volume of business. The company was doing close to 1.2 lakh pieces per day around October. We knew that at that rate and the kind of expansion plans we had in mind, we will have to raise money again,” said Krishnan.

Sawhney’s response was that Warburg Pincus would be interested in investing in the company. He told the founders not to worry about valuations or money. The PE firm was ready to bet on it. “So we kind of got engaged with them. (In) June of last year, we were able to close the round as well,” said Krishnan.

Timing and sponsorship

According to Vinod Murali, managing director of InnoVen Capital India, Ecom Express’s main asset was a strong understanding of how logistics works in the country.

“The team had done this together in the past while in Blue Dart. They had a lot of real India experience which they capitalized on. The fact that the people at the top had the expertise to navigate through challenges helped them ramp up the business fast,” Murali said. “Then it was about the timing and the right sponsorship. Warburg came at a very good time, when they needed to invest in building capacity for warehousing and improving their geographical reach and capabilities overall.”

Ecom Express doesn’t use airlines during the September-October festive season for deliveries. “We go 100% surface. We tell our customers that this is what we will be doing and they also know that this is the kind of transit time that it will take. If they are OK with it, it is fine, if not they will go to somebody else. The fact is I am still saying that I am more worried about being reliable rather than being the fastest,” said Krishnan.

Ecom Express doesn’t use airlines during the September-October festive season for deliveries. They go 100% surface

Predicting demand at the city level is not possible, according to him, because different requirements come from different areas of the same city. It has to be tackled at a more micro level—at the level of pin codes. “Today we do it at a pin code level. What kind of capacity build-up will happen, what kinds of volume would flow in, what kind of buffers are being built up. We can’t go and say that this will be the volume for a city. It is too vast,” he explained.

In the last week of September, Krishnan was back from a 10-day trip during which he checked Ecom Express’s preparedness to handle festive season deliveries.

In an interview, dressed in a black Lacoste polo shirt and jeans, Krishnan said he is confident that nothing will go wrong in this year’s sale season. The company, of course, has learnt its lessons early on. Ecom Express expects volumes to spurt to 500,000 deliveries per day during October from 250,000 a day currently. This will be double the festive season peak touched last year.

The company was present in around 500 towns during October 2015 and has now expanded to 1,000 towns. It is now delivering to 12,000 pin codes compared to around 8,000 last year.

Success is not just being present in multiple pin codes, it is about the ability to service those pin codes. Companies need the entire chain to be ready, which takes a lot of investment and capacity in terms of people, processes and automation.

Ecom Express was present in around 500 towns during October 2015 and has now expanded to 1,000 towns. It is now delivering to 12,000 pin codes compared to around 8,000 last year.

Expansion plans

Ecom Express has expansion and fund-raising plans lined up. But it will turn to all that after the festive season. It plans to set up seven large warehouses with pickup, processing and fulfilment facilities over the next two years to speed up product delivery. That will allow the company to deliver at least 80% of its orders within 24- 48 hours, faster than the 24-96 hours it takes now.

Each warehouse will have around 500,000 square feet of space. Ecom Express currently has 33 small hubs for its last-mile operations, besides 30 processing centres. The size of these hubs and centres ranges between 5,000 sq. ft and 100,000 sq. ft.

It also plans to raise $200 million by April to fund its expansion plans and will actively start searching for investors in January after the festive season ends.

Ecom Express currently has 33 small hubs for its last-mile operations, besides 30 processing centres. The size of these hubs and centres ranges between 5,000 sq. ft and 100,000 sq. ft.

In a bid to expand its revenue stream, Ecom Express will also offer its 300-odd clients, including Amazon, Flipkart and Snapdeal, the option of stocking their inventory in its warehouses.

The company will also start deliveries for global e-commerce companies in India. It is in talks with multiple Chinese e-commerce companies, said Krishnan, declining to name the firms.

Sreedhar Prasad, partner (e-commerce and start-ups) at consulting firm KPMG, said dedicated e-commerce delivery companies had grown because they were more technologically savvy than courier firms and offered solutions tailored to online retailers.

“That is the reason why they were able to garner market share. Ideology and speed-wise, they were far more aligned with the start-up community than traditional courier companies. That is the reason why they clicked,” he said.

15.1. Oppo, Vivo make big call, to invest Rs 2,000 crore each in UP

Economic Times | Oct. 26, 2016

New Delhi: Chinese smartphone companies Oppo and Vivo plan to invest a combined Rs 4,000 crore in Uttar Pradesh to build separate manufacturing complexes as part of their expansion plans in India.

The two companies are keen to set up large-scale campuses, replicating their China models, which will have manufacturing plants, space for suppliers and accommodation for staff.

“Oppo is almost finalised… 200 acres... they will bring Rs 1,000 crore by themselves, while Rs 1,000 crore investment will come through their vendors,” said Sanjiv Saran, information technology secretary of Uttar Pradesh. “Vivo is also asking for 200 acres of land. They have seen the plot, but have some problems with that…we are sorting that out. Their investment will also be to the tune of Rs 2,000 crore,” he added.

Land for the two companies may be allotted by the UP government in Greater Noida.

Oppo and Vivo are already among India’s top 10 smartphone companies by volume market share, although they are relative newcomers. Manufacturing in India will help them bring products to the market faster and offer devices at lower prices.

The two companies have been among the more aggressive smartphone players in the lead up to this festive season, spending Rs 80-100 crore each, double of what they did last year, on marketing. Their plans for India include developing townships on the proposed campuses. Oppo plans to set up accommodation for 30,000 people

“We are in talks with the UP government and will confirm the details at the appropriate time,” said Sky Li, head of India operations at Oppo.

“The state government has been very accommodating to our needs and we are in touch with them for future requirements that will help us in enhancing capacity and in boosting our ability to meet the growing demand for Oppo phones in India,” Li added. Vivo declined to comment.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.

15.2. Foxconn's next India facility to be in Navi Mumbai

Economic Times | Nov. 04, 2016

New Delhi: Foxconn is planning to set up its next manufacturing factory in India — in Navi Mumbai — which will be the first plant from the contract producer in Maharashtra, but will be separate from the $5 billion investment committed under an MoU with the state signed last year.

Sources familiar with the plans of the world’s largest contract manufacturer said that Foxconn's greenfield unit in Navi Mumbai will entail an initial investment of $20-30 million, from where it will start by making mobile phones, and gradually move on to other products.

"The Navi Mumbai plant will be set up by early next year, with a target capacity of about 2 million a month," a senior industry executive said, asking not to be named.

Foxconn's next India facility to be in Navi Mumbai

"To start with, mobile phones will be made, which is the high volume category in India, followed by mechanics design," this person added. An email sent to Foxconn Technology Group did not elicit any response till press time on Thursday.

In August last year, Foxconn Group chairman Terry Gou signed an MoU with the Maharashtra government for investing $5 billion (about Rs 34,000 crore) in the state to set up multiple manufacturing facilities for products including iPhones, tablets, spread over five years.

The investment plan would have generated a minimum of 50,000 jobs in the state. However, with a year down, the first investments under the agreement are yet to come. The Navi Mumbai plant will be counted as a separate investment, another source said.

Foxconn entered India with its first manufacturing facility as a supplier to Nokia in the Sriperumbudur SEZ in Chennai several years ago, but it had to shut down the 300-acre facility due to labour issues coupled with Nokia stopping production of phones.

The Taiwanese contract manufacturer re-entered the world's fastest growing smartphone market last year with a mobile phone assembly plant in Sri City, Andhra Pradesh, which it expanded to five plants with a total capacity of about 12-13 million a year. By the end of the year, this capacity will be doubled, EThad reported earlier.

After restarting operations — which happened post the government's Make in India initiative — Foxconn has invested about $600 million so far, which includes its investments in Snapdeal and messaging app Hike. "Since last year, we have restarted operations and right now we're finalising the 2017 plan — there will be more expansion," Foxconn's head of India operations Josh Foulger said a fortnight ago.

"In semiconductors, the industry is looking at assembly, test, mark, and pack (ATMP), which includes 21 component categories that makes it attractive for companies like Foxconn and other suppliers to support this ecosystem," Foulger said.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.

15.3. Intel ready to scale up to Digital India's Big data need

Economic Times | Nov. 16, 2016

Bangalore: Intel Corporation is interested in working with the Indian government and sees great potential to scale its Data centre group’s (DCG) business in India said Prakash Mallya, Director DCG, Asia at Intel Corporation in a closed-door press briefing here in Bangalore.

"India stack, UID, GST, E-government 2.0 - all these are digital India related solutions which we would be investing on," Mallya said adding that the government's adoption, in the long run, helps Intel scale the solutions globally.

The government of India is to invest around $7 billion by the end of this year on multiple smart city projects. These connected cities will be producing petabytes of data which needs to be stored and organised to harness its full potential. "High-Performance Computing (HPC), whether national or state datacentres are being set up, new banking licences is being given, a bunch of corporate banking players are coming through. All this mean new data," said Mallya, pointing to the variety of markets DCG can cater to in the coming years. "If the tipping point customers [government] adopt our technology, it has a ripple effect in the rest of the industry," Mallya said.

The DCG business for Intel has seen double-digit growth figures for the past two years. The company recently acquired Nervana Systems, an artificial intelligence and deep learning company to bolster its DCG business globally.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.

– SERVICES (IT, R&D, Tourism, Healthcare, etc.)

16.1. Media and entertainment sector revenue to hit Rs2-2.2 trillion (US$ 29.9-32.9 billion) by 2020: study

Livemint | Oct. 26, 2016

The Indian media and entertainment (M&E) industry is projected to reach Rs2-2.2 trillion in revenue by the end of 2020 from an estimated revenue of Rs1.3 trillion in 2016.

The industry’s revenue was Rs1.17 trillion in 2015 and is currently growing at a compound annual growth rate (CAGR) of 10-12%, according to a report jointly published by consulting firm Boston Consulting Group (BCG) and lobby group Confederation of Indian Industry (CII), titled Convergence: The New Multiplier for Indian Media & Entertainment’s $100 Billion Vision.

The report said that the industry is on the cusp of a potential consumption boom, driven by digital media as well as the increasing number of digitally connected rural consumers. Industry revenue has the potential to grow five- or sixfold over the next 10 years, the report said. “The digital medium now has the wherewithal to change the game for the industry and prove itself to be pivotal to future progress. Although, the per capita consumption of traditional media continues to grow at 3%, digital consumption has expanded at a much more exponential pace clocking up to 15% annually,” the report said.

According to the report, the digitally connected population consumes approximately 50% more media on a per capita basis than consumers without any access to the Internet. Over the past five years, digital content created per year has grown at 50% annually.

Digital consumption of media indicates viewing habits and content preferences of the consumers, said Kanchan Samtani, a partner at BCG India. “Leveraging this data intelligently can help content creators customize new content to consumer tastes and preferences to create targeted hits and subsequent success,” she said, adding that digital media consumption by rural consumers is on the rise.

With smartphones and mobile data becoming affordable, the number of connected rural consumers will increase from about 120 million in 2015 to almost 315 million in 2020, according to the report. “Rural consumption in recent times has been growing at a faster pace than urban consumption patterns. This is because of pent-up demand and the willingness of rural consumers to trade up to latest technologies such as HDTV channels and 4G mobile devices,” said Chandrajit Banerjee, director general at CII.

However, TV remains the largest component of the industry by far and is estimated to grow at a CAGR of 11- 13% to Rs1.03-1.12 trillion in 2020 from Rs69,000 crore in 2016. With the increase in television households, the segment will see a rise in subscription revenue while overall ad spending will be driven by growth in the consumer goods industry.

Growth for print media (newspapers and magazines) is projected at 4-6% CAGR, reaching Rs33,000-37,000 crore by 2020. According to the report, regional publications will be drive most of this growth as English papers’ circulation and ad revenues have fallen. “In the period between 2010 and 2016, it (newspapers) lost 8% of ad market share to digital and circulation of English newspapers has declined,” the report said. Rajiv Dingra, chief executive and founder of WATConsult, the digital and social media agency of Dentsu Aegis Network, said that the shift from print to digital is happening rapidly “now more than ever. Advertisers find more engagement on social media platforms. Content consumption on mobiles also helps to profile the consumers.”

“Mobiles, video content and social media are driving the growth for digital,” he said.

Of the traditional media, radio is estimated to grow at an accelerated rate of 14-16% to touch Rs4,400-4,700 crore by 2020

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.

16.2. Indian Tourism Outlook is Certainly Very Promising with an Upswing in Growth of Foreign Tourist Arrivals in India in Recent Years - Dr. Mahesh Sharma

Press Information Bureau | Nov. 08, 2016

New Delhi: Dr. Mahesh Sharma, Minister of State (Independent Charge) for Tourism and Culture along with an Indian delegation participated in the “World Travel Market (WTM) 2016” in London, United Kingdom, which is one of the largest international events of the travel and tourism industry. India is the official Premier Partner at WTM 2016 with the theme – ‘India - The Land of Eternal Heritage’.

The Indian delegation comprises of Chief Ministers, State Tourism Ministers, dignitaries from the State Governments & Union Territories, Industry partners and officials of the Ministry of Tourism, Government of India. Around 42 co-exhibitors/ partners including State / Union Territory Tourism departments, tour operators, hoteliers, resort owners, Air India, IRCTC, ITDC, and other stakeholders are present at the India Stand, to showcase their diverse tourism products and services.

Dr. Mahesh Sharma, in his address, said that the Indian tourism outlook is certainly very promising with an upswing in the growth of Foreign Tourist Arrivals (FTAs) in India in the recent years. In 2015, India received 8.03 million Foreign Tourists as compared to 7.68 million in 2014 with a growth rate of 4.5%. In 2015, the tourist arrivals in India from the U.K alone was 867601 with a 3.4% growth over the previous year (2014). The Minister said that India has set a target to achieve 1% of international tourist arrivals through a multipronged approach, including proactive marketing strategies in partnership with the tourism stakeholders. Dr. Sharma said that the Government of India is fully aware of the contribution of tourism towards the economic growth and stands committed to make it easy for the travellers to visit India. The initiative taken by the Government of India to introduce Electronic Tourist Visa (eTV) has been a great step in this direction and has further boosted tourist arrivals. The facility of eTV is at present available for nationals of 150 countries including Visa on Arrival for Japan.

He further said that India has a rich and diverse natural, cultural, and religious heritage which provides a unique opportunity for tourism. The architecture of India’s temples, palaces, forts, the grandeur of its sculptures, and the beauty of its paintings, all offer an unparalleled experience. The desert circuit in Rajasthan, snow-bound Himalayas, back waters of Kerala, and the beaches of Goa are very popular with international tourists. India has 35 World Heritage Sites including cultural properties and bio geographical zones.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.

17.1. India pips US in smartphone connections

Times of India | Oct. 27, 2016

New Delhi: India has become the second-biggest market globally in terms of smartphone connections, overtaking the US and trailing only China. More and more Indians are logging on the internet using their mobiles, aided by availability of low-priced smartphones — a significant number of them assembled locally and sold for as low as Rs 3,000 — and rapid expansion of 3G and 4G networks.

According to figures provided by global telecom body GSMA, smartphone connections in India at the end of the first half of this year (ending June 2016) stood at 275 million, higher than 259 million connections in the US. China, however, leads by a huge margin with overall smartphone connections at 910 million.

Alasdair Grant, the head of Asia for GSMA, told TOI that the growth in smartphone connections will continue to remain strong in coming years as 3G and 4G networks spread rapidly across the country. The growth will be fuelled further with the entry of new operators such as Reliance Jio.

Grant added that 4G connection base is forecast to grow from 3 million at the end of 2015 to 280 million by 2020. "Mobile broadband (3G and 4G) will account for nearly 50% of total connections in India by then." GSMA said mobile operators are investing heavily to improve network coverage, and this should see 3G being available to 90% of the population by 2020, while 4G to 70%, the latter registering a 14-fold increase from now.

Most of the mobile manufacturers have also read the trend as the majority of new device launches by them are only 3G and 4G compatible as 2G devices — which are mainly feature phones — are being discontinued. Total mobile users in India (some may carry multiple SIM cards) stood at 616 million at the end of June, GSMA said. "Almost half of the country's population now subscribes to a mobile service, indicating the significant growth potential in the coming years, particularly from the rural and under-penetrated segments." In its 'India Mobile Economy' report, GSMA estimates that 330 million new mobile users will be added by 2020. This would push up the mobile phone penetration base across the population to 68% against 47% at the end of 2015.

The report also said that mobile phones will also become a platform to offer a variety of government schemes and other services such as financial access, information dissemination, and productivity enhancement. The report said that data traffic will register a CAGR of 63% between 2015 and 2020, registering a 12-fold increase over the present usage. This will be fuelled by social networking and online communication.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.

17.2. IBM acquires Sanovi Technologies to boost hybrid cloud

Economic Times | Oct. 28, 2016

New Delhi: American technology giant, IBM has acquired home-grown Sanovi Technologies to bolster its cloud offerings for an undisclosed sum. Bangalore based Sanovi provides hybrid cloud recovery, cloud migration and business continuity software for enterprise data centers and cloud infrastructure.

"Our clients are embracing a digitized world where applications need to be ‘always-on,’” said Martin Jetter, senior vice president, global technology services, IBM. “As a cloud-native company, Sanovi will strengthen our resiliency portfolio to manage the broad range of applications, data, and IT systems of our clients balancing digital and hybrid cloud transformation with increased regulatory compliance,” Jetter added.

After the transaction is completed, which is expected by the end of 2016, IBM plans to integrate the Sanovi’s capabilities into its Global Technology Services unit. The company also envisions leveraging Watson Analytics to expand Sanovi's disaster recovery management (DRM) capabilities.

“IBM’s technology leadership in hybrid cloud infrastructure and resiliency services makes it a clear choice to bring end-to-end services to our customers and transformational value to IBM’s existing client base,” said Chandra Sekhar Pulamarasetti, co-founder and CEO of Sanovi. “Together, we will provide next-generation resiliency solutions for robust hybrid cloud deployments across the globe.”

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.

17.3. Reliance Jio’s entry a boost for Ericsson, Truecaller and Lava Mobiles

Livemint | Upasana Jain, 16 Nov. 2016

New Delhi: Reliance Jio had a jump-start with cheap data and free calls, and there are others who have shared in the spoils.

The launch of high-speed telecom services by Reliance Jio Infocomm Ltd in September prompted Swedish telecom equipment and network services provider Ericsson AB to fast-track the roll-out of its 4G network. “Jio’s launch definitely accelerated the development of high bit-rate mobile broadband. Without Jio, we wouldn’t have seen such a quick roll-out of 4G. It would have happened a little bit more slowly,” said Paolo Colella, head for the India region at Ericsson.

“We have already seen the 4G wave happening in many of the Western countries. In the Far East, China, Korea (and) Japan have already invested heavily in building up infrastructure. Jio has contributed to the acceleration and aligning of India to the rest of the big economies,” Colella added.

The limited spread of wireline fixed infrastructure in India has led to limited usage of broadband. As the country moves to 4G, there is expected to be massive demand for smartphones. “We are anticipating by 2020 we will have at least 800 million smartphones in the market, so the Internet, for Indian people, is mobile. That is a major difference,” Colella said.

“(The other difference is) the industry was not predicting to have Android phones at $40 per unit at the end of 2016, probably expecting it to happen in at least 12 months, if not 18 months further,” he added.

True Software Scandinavia AB, which makes the Truecaller mobile app to identify incoming calls through a crowd-sourced database, is another Swedish company that has gained from the Jio launch.

The number of Truecaller users on the Jio network is already three times that of any other carrier, its cofounder Alan Mamedi said.

“We see that Reliance Jio right now is three times bigger than other carriers for us, as new users are joining every day. It is not that users from other carriers are dropping—they actually continue to grow. So, the trend we are seeing is that more people get connected for the first time because it is affordable, which is very interesting,” Mamedi said.

Mamedi added that Reliance Jio will remain a game-changer even after the expiry of free services offer since the tariffs are “10 times cheaper than the competitor”.

Truecaller, which entered India in 2009, struggled in the initial years as the data market had not developed, and found its feet only after the widespread adoption of 3G and 4G services.

Mamedi said as more people use 4G services, it will give tools to smart people to create something “magical”, driving more start-ups.

Home-grown mobile handset manufacturer Lava Mobiles is another company that has gained from the Jio launch. The company hopes widespread 4G adoption will help double its market share to 20% by 2020.

“In the operator sector, they are doing disruption, but this disruption will increase the operator business also, pushing it to double. Each company is going to gain,” Lava Mobiles chairman and managing director Hari Om Rai said.

Lava Mobiles is currently investing at least Rs2,600 crore for capacity expansion to produce 18 million devices every month by 2021.

“4G phones have witnessed a very a high demand in last six weeks. For our industry, it is very valuable. There will be disruption and explosion in the industry. Under-Rs5,000 phones (smartphones) are going to grow like anything and feature phone to smartphone transition is going to happen faster, with even 4G feature phones coming in,” Rai said.

18.1. Marriott plans 200 hotels by 2020

Business Standard | Nov. 01, 2016

Kolkata: Marriott has become the undisputed king of hotels after the acquisition of Starwood. Rajeev Menon, chief operating officer, Asia-Pacific operations (excluding China) of Marriott International, tells Avishek Rakshit about the group’s plans to speed up its hotel count and focus on the mid-market and upscale brands.

Edited excerpts:

What is the road map for the Marriott International group in India after the acquisition of Starwood?

The road map is very much what we have done so far, except that it will be accelerated growth. Earlier, we were targeting 100 hotels by 2020, but with the Starwoodacquisition, which makes us the largest player in India, we can safely say, we’ll be close to 175-200 hotels over the next four years. We’ll have 15 brands operating in India by this year.

In the mid-space and below, there is probably 50 per cent supply, and in the upper luxury there would another 45-50 per cent.

What structural changes took place in the organisation after the Starwood acquisition? Will there be a headcount reduction?

In the next 15-30 days, I will announce the India structure for the future. Currently, both leaders — Neeraj Govil (area vice-president — South Asia of Marriott International) and Dilip Puri (managing director, India, & regional vice-president, South Asia, of Starwood Hotels and Resorts) — are reporting to me.

We are going to maintain both our Delhi as well as Mumbai offices as we see these two cities as strategic markets catering to south Asia. India is also the hub for managing places like Bangladesh, Nepal, Bhutan and Sri Lanka. So we’ll keep both offices.

My focus would be to get the best talent from both the Starwood and Marriott teams and there will not be a headcount reduction. In some cases, where there are identical jobs being done by two people, we will try to relocate them into other opportunities.

After the merger, what will be the future of the ITC-Starwood hotel deal?

The master franchisee deal will continue under Marriott. I started my career with ITC as a trainee and there are some very dear friends there today and from our perspective nothing changes. It is just a shift from Starwood to Marriott.

Will there be a clash of positioning of hotels now that you have acquired the Starwoodbrand, which also has a deal with ITC?

I generally believe that there is ample opportunity for all lodging segments, given India’s long-term growth potential. It’s really about how a company positions its brands and stays true to the brand’s commitment and delivers returns.

Will you bring your entire 30 brands into India in the near future?

I don’t think so. It is easy to bring in a brand to India but the difficult part is how to grow it. There are many global luxury hotel brands that haven’t succeeded here.

Right now, many luxury brands are posting negative Ebitda (earnings before interest, tax, depreciation and amortisation). What is the case with Marriott?

There are elements like cost of land, how effectively you borrowed money from banks and at what interest rate, how quickly you build the hotel and how effectively you manage the business. In India typically, when you are getting 10-year loans at high interest rates, and its taking you 7-8 years to develop the hotel, you get only two years to pay. Hence, you hear all this negativity.

Over the past couple of years, we have seen double digit growth in our topline as well as bottomline in India.

What is your market share now?

Last year we carried a 30 per cent market share premium to our competitors on same-store sales. Any brand that can carry a 25-30 per cent market share premium is very well positioned.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.

18.2. Shri Jayant Sinha says with proper manpower skilling the civil aviation sector can create about 6 million jobs directly and indirectly in the next ten years

Press Information Bureau | Oct. 21, 2016

New Delhi: The Minister of State for Civil Aviation Shri Jayant Sinha has said that the civil aviation sector has the potential to create about 10 lakh direct jobs in the next ten years. Given a six- fold multiplier effect that jobs in this sector have, this can lead to the creation of about 60 lakh jobs – direct and indirect - in the next ten years. As jobs in the civil aviation sector tend to be of high value, this would go a long way in improving the economic condition of a large number of young people. The Minister also said that the sector can reasonably be expected to grow at an average rate of about 10-12 % over the next ten years. However, to achieve this we first need to fill the gap between the demand for skilled manpower for a huge variety of trades in the sector, and the availability of the same. Stressing upon the need for world class training and skilling, he said that this can raise the employability of our people across the world. Shri Sinha also flagged the issue of non-availability of land to build airports as another constraint for growth of the sector.

The Minister was speaking at a workshop on Building Awareness on Aligning Skill Development in the Civil Aviation Sector with the National Skill Qualification Framework ( NSQF) in New Delhi today. The event was also attended by the Minister of State for Skill Development and Entrepreneurship Shri Rajiv Pratap Rudy and senior officers of both ministries. Speaking on the occasion Shri Rudy informed that his ministry has developed about 1500 course curricula for training in various skills across ministries. The biggest challenge before his team has been to define the various kinds of skills and the ecosystem of each, define job roles and tailor the training programme accordingly. In this context he said that aligning a training programme to the National Skill Qualification Framework was very important as the framework provides for standardised, consistent, nationally acceptable outcomes of training across the country.

The event also saw the signing of an MoU between the Ministry of Civil Aviation and the Ministry of Skill Development and Entrepreneurship for training of people in the various trades associated with the civil aviation sector. Shri Jayant Sinha hailed this memorandum of understanding as a momentous one.

Also speaking on the occasion Secretary Ministry of Civil Aviation Shri Rajiv Nayan Choubey said that the aim of the Ministry’s Civil Aviation Policy is to raise domestic ticketing from the present about 80 million to about 300 million. But for this to happen, we need to fill the existing gap in availability of skilled manpower. Shri Rohit Nandan, Secretary, Ministry of Skill Development and Entrepreneurship emphasized on the need for world class training across trades and levels as the civil aviation industry is international in nature. He also stressed upon the need for training to be uniform.

Officials of the two ministries held day long discussions on issues like NSQF, setting up of skill development centres and centres of excellence, training of trainers, identifying job roles, National Occupational Standards and other training related matters.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.

19.1. Abbott to set up innovation hub in India

Economic Times | Nov. 07, 2016

Mumbai: Global drug maker Abbott is setting up an innovation and development center (I&D) in Mumbai aimed at developing new drug formulations, new indications, dosing, packaging and other differentiated offerings to feed into its global branded generics business that clocked sales of $3.7 billion last year. The centre will act as a “hub” and ship products to at least 30 countries that will further develop the products to suit local needs. Abbott officials did not divulge the amount it is planning to invest.

Speaking to ET, Mike Warmuth, Executive VP, Established Pharmaceuticals division of Abbott said the proposed investments will result in doubling of its local scientific manpower like packaging technologists, formulation development specialists and clinicians. The centre will also have a pilot scale plant, he added. “We are investing in innovation and scale and we are doing it in areas where people have needs. It is not about getting sales for the sake of getting bigger,” Warmuth, who is based in Basel, Switzerland, told ET on his second trip to India in the last two weeks.

Abbott has its existing innovation and development centres in Chile and Columbia for the regional needs in Latin America and one in Russia. The Indian I&D hub is expected to become its biggest center in the next few years.

The drugs-to-devices giant drew over a fifth or $850 million (Rs. 5673 crore) of its global branded generics business from India in 2015. Warmuth described India as a “cornerstone of success” making specific reference as a “talent exporter” and how it helped Abbott gain a scientific edge in its other countries of operations.

Warmuth said he expects the India business to outperform the market consistently as in the case of its other 15 priority markets that together contribute 75% of the total sales. “We do the heavy lifting, providing products at a rate that is affordable and not price gouging,” he noted. He said his company will explore about 20 to 30 products that are likely to come off-patent in near future. Beyond that, Warmuth said part of his “model” includes in-licensing drugs that may include biosimilars. It exists in the “realm of the possibility” but not necessarily of a big scale in India.

Abbott is uniquely positioned in the global branded generics business. It carved out the business and separated AbbVie, its innovation products business. Abbot has been among the most aggressive investors in India. Last year in one of the biggest deals in the real estate space, it acquired commercial property in Mumbai’s business district Bandra Kurla Complex at Rs 1479 crore.

The drug maker had leapfrogged to the number one position India after it snapped up Piramal Healthcare’s prescriptions business for $3.7 billion in 2010. Last year Abbott slipped to second position with Sun Pharma acquiring Ranbaxy to gain the top spot.

Asked about the overall regulatory and economic environment in India, Warmuth said the regulators are trying to do the right things but he maintained it would be good to see the environment a little more stable when making investment decisions. “Overall that does not really change our view on the market itself,” Warmuth added.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.

19.2. Max Healthcare to invest Rs 320 crore in Delhi cancer care centre

Livemint | Nov. 01, 2016

New Delhi: Max Healthcare Ltd will invest as much Rs320 crore to build a cancer hospital in Delhi. The investment, part of a larger plan to develop its hospital in Saket, New Delhi, into a master complex of verticals such as cancer, cardiac sciences, neurosciences, transplants and diabetes, will go into setting up a cancer care centre with around 350-400 beds initially, Rohit Kapoor, senior director and chief growth officer of Max Healthcare, said in an interview.

Excluding land costs, setting up a bed at an oncology centre in Delhi-NCR costs about Rs80 lakh. “We will be developing a dedicated facility for cancer care in Saket. Hopefully with that and the other hubs that we have, we want to position ourselves as one of the leading cancer players not just in India but Asia,” Kapoor said.

In a 26 September interview, Analjit Singh, founder and chairman of Max Healthcare, said that he wants to develop Saket into the single largest hospital in Asia.

The company has hired HKS Architects to design the complex, which is spread over a 13-acre plot that includes the existing Max Hospital in Saket, the Saket City Hospital (SCH) that Max acquired in July, and a piece of vacant land in the premises of SCH over which Max has operating rights. SCH and Max combined have around 800 beds, which is expected to increase to more than 1,800 in phases. Across its hospitals in north India, Max has about 5,000 operating beds. Of which, around 2,300 are currently functional.

“We really want it to go big on five or six specialities such as cancer, cardiac sciences, neurosciences, transplants, and diabetes,” Kapoor said. “We have product heads for these and they are focusing exclusively on these.”

Currently, cancer treatment accounts for about 14% of Max Healthcare’s total revenue.

“The demand for cancer treatment is going to be immense. I don’t see any reason why we should not look at volume growth of 20-25%,” Kapoor said.

There are about 1.5-2 million reported cases of cancer in India and the actual number could be double that. Oncology and cardiac sciences contribute close to 30% of the overall revenue of Max Healthcare revenue, which is estimated by to be about Rs2,200 crore. “We are looking at a 17-18% CAGR (compound annual growth rate) in our healthcare business on a five-year basis,” Kapoor said.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.

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20.1. Volvo's India R&D centre develops trucks for world

Business Standard | Oct. 20, 2016

New Delhi: Bengaluru is gaining a distinct identity on the global map of Swedish bus and truck maker Volvo. About 800 engineers, mostly Indians, are busy developing a truck the company’s Bengaluru research & development (R&D) centre that will be sold only outside India.

India is the third biggest R&D centre for Volvo after Sweden and France in headcount. “We design global trucks in India. A lot of R&D work on truck technology is done here. We are very proud that India is involved in a big way there. Volvo also has an IT wing that has 1,500 people doing global IT work for the Volvo group. There is also an accounting team of 300-400 people,” said Kamal Bali, managing director, Volvo India. The R&D centre, started with 100 engineers seven years ago, can add 200 more.

Volvo India forms only four or five per cent of the group’s global revenue of $42 billion, but Bali said India is much more important than this turnover. The Indian R&D team has a global responsibility to develop value segment trucks. For any value truck that is to be designed or improved, the responsibility lies with the Indian team and the product will be owned by the Indian side.

“Concept to design to execution is done by the Indian team. Of course, they may take some help when it comes to engines. But, they are leading the show. Some of the products this team will do will never be sold in India,” said Bali.

The Indian centre has successfully developed the Pro 8000 heavy-duty truck platform that was also launched in India (with Volvo’s JV partner Eicher) and in Indonesia and Thailand a couple of years ago. The next mandate is medium duty truck (10-15 tonnes) exclusively for the overseas market. “It will go into production next year,” said Bali.

Bali said the group finds the product gap in its portfolio and decision is taken to develop new products. A particular centre is awarded the responsibility to develop a product based on competencies and past experiences.

Volvo, which produces trucks, buses and construction equipment, is looking to grow India revenue from $1.5 billion to $2 billion in next couple of years. “We are going to be aggressive. India is looking very bullish and all categories will grow in double digits for us. We want to improve market share and need to grow faster than the industry,” said Bali. Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.

20.2. Ford to build global tech, business centre in Chennai

Livemint | Nov. 09, 2016

New Delhi: Ford Motor Co. on Tuesday said that it will invest $195 million (Rs1,300 crore) in Chennai to build a global technology and business centre that will serve as a hub for product development, mobility solutions and business services for India and other markets around the world.

The centre will also house the company’s largest information technology organization outside of the company’s global headquarters. Mint had in October 2015 first reported about Ford’s plans to set up a global technology and business centre in India.

“India is not only a vibrant market for cars and new mobility ideas, it also is rich with talent, technical expertise and ingenuity,” executive chairman Bill Ford said in a statement. “This new center will help us attract the best and brightest, and make Chennai a true hub of innovation for Ford around the world.”

Once it gets completed in 2019, the centre will become Ford’s third global product development centre in Asia Pacific and part of Ford’s global product development network.

“It also will feature a wide range of laboratories and testing facilities for both full vehicles and components, enabling Ford to conduct extensive testing of future vehicles in India,” the company said in a statement. However, Tuesday’s announcement is unlikely to help Ford’s India operations immediately and the focus will be more on feeding into the Detroit-based company’s global operations.

Ford in India continues to struggle even after being present in the country for more than 20 years, in which the Indian market has changed drastically.

In the six years between 2010-11 and 2015-16, the American car maker’s annual sales in India have grown only twice.

Sales reached the highest at 98,537 units in 2010-11 because of the success of the Figo but they declined to 92,665 units and 77,225 units in 2011-12 and 2012-13, respectively.

Sales grew in 2013-14 and fell in 2014-15 only to rise again in 2015-16, albeit on a smaller base.

During the same period, the Indian passenger vehicle market expanded from 2.52 million units to 2.78 million. In recent times, the company’s second generation Figo failed to receive the kind of response that the previous one did. Ford did create a new compact SUV segment with the EcoSport, but it failed to capitalize on the firstmover advantage. The segment is now dominated by market leader Maruti Suzuki India Ltd and Hyundai Motor India Ltd.

Ford, along with Volkswagen India Pvt. Ltd, was the last one to enter the sub-four-metre sedan category but demand in the segment has waned, which meant lukewarm response for the American car maker’s Figo Aspire.

In pursuit of making its business sustainable, the company has changed tack and shifted focus to exports, which grew 41.37% to 55,821 units between April and September.

India’s overall car exports grew 3.89% to 319,579 units.

In the new centre in Chennai, the company will hire 3,000 skilled workers over the next five years.

“Ford also will consolidate 9,000 employees from six existing facilities in Chennai on the 28-acre campus,” the company said in a statement.

Ford has invested over $2 billion in India to set up two plants, one each in Chennai and Sanand in Gujarat. Together, these plants have the capacity to make 610,000 engines and 440,000 passenger vehicles a year.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.

INDIA & THE WORLD

21. India's Foreign Trade: October, 2016

Press Information Bureau | Nov. 16, 2016

New Delhi:

I. MERCHANDISE TRADE

EXPORTS (including re-exports)

In consonance with the revival exhibited by exports last month, during October 2016 exports have shown a positive growth of 9.59% in Dollar terms (12.43% higher in Rupee term). During October,2016 exports were valued at US$ 23512.70 million (Rs.156941.86 crore) as compared to US$ 21456.11 million (Rs.139589.17 crore) during October,2015. Cumulative value of exports for the period April-October 2016-17 was US$ 154913.20 million (Rs.1036417.49 crore) as against US$ 155179.35 million (Rs.998211.69 crore) in October 2015-16, registering a negative growth of 0.17 per cent in Dollar terms and positive growth of 3.83 per cent in Rupee terms.

Non-petroleum exports in October 2016 are valued at US$ 20797.13 million against US$ 18923.83 million in October 2015, an increase of 9.9 %. Non-petroleum exports during April to October 2016 are valued at US$ 138111.18 million as compared to US$ 135691.68 million for the corresponding period in 2015, an increase of 1.8%.

The growth in exports for USA (0.20%), EU (5.78%), Japan (10.03%) but China exhibited negative growth (- 3.01%) for August 2016 over the corresponding period of previous year as per latest WTO statistics.

IMPORTS

Imports during October 2016 were valued at US$ 33673.53 million (Rs.224763.10 crore) which was 8.11 per cent higher in Dollar terms and 10.91 per cent higher in Rupee terms over the level of imports valued at US$ 31148.33 million (Rs.202644.79) in October,2015. Cumulative value of imports for the period April-October 2016-17 was US$ 208083.15 million (Rs.1392221.35 crore) as against US$ 233417.95 million (Rs.1501290.90 crore) registering a negative growth of 10.85 per cent in Dollar terms and 7.27 per cent in Rupee terms over the same period last year.

CRUDE OIL AND NON-OIL IMPORTS:

Oil imports during October, 2016 were valued at US$ 7141.48 million which was 3.98 percent higher than oil imports valued at US$ 6868.28 million in the corresponding period last year. Oil imports during April-October, 2016-17 were valued at US$ 46438.65 million which was 15.78 per cent lower than the oil imports of US$ 55139.39 million in the corresponding period last year.

Non-oil imports during October, 2016 were estimated at US$ 26532.05 million which was 9.28 per cent higher than non-oil imports of US$ 24280.05 million in October, 2015. Non-oil imports during April-October 2016-17 were valued at US$ 161644.50 million which was 9.33 per cent lower than the level of such imports valued at US$ 178278.56 million in April-October, 2015-16.

II. TRADE IN SERVICES (for September, 2016, as per the RBI Press Release dated 15thOctober 2016)

EXPORTS (Receipts)

Exports during September 2016 were valued at US$ 13773 Million (Rs.91917.83 Crore) registering a positive growth of 2.93 per cent in dollar terms as compared to positive growth of 4.74 per cent during August 2016 (as per RBI’s Press Release for the respective months).

IMPORTS (Payments)

Imports during September 2016 were valued at US$ 8,304 Million (Rs. 55418.99 Crore) registering a positive growth of 3.10 per cent in dollar terms as compared to positive growth of 8.71 per cent during August 2016 (as per RBI’s Press Release for the respective months).

III.TRADE BALANCE

MERCHANDISE: The trade deficit for April-October, 2016-17 was estimated at US$ 53169.95 million which was 32.04% lower than the deficit of US$ 78238.60 million during April-October, 2015-16.

SERVICES: As per RBI’s Press Release dated 15th November 2016, the trade balance in Services (i.e. net export of Services) for September, 2016 was estimated at US$ 5,469 million. The net export of services for April- September, 2016-17 was estimated at US$ 32358 million which is lower than net export of services of US$ 34042 million during April- September, 2015-16. (The data for April-September 2015-16 and 2016-17 has been derived by adding April-September month wise QE data of RBI Press Release).

OVERALL TRADE BALANCE: Overall the trade balance has improved. Taking merchandise and services together, overall trade deficit for April- October 2016-17 is estimated at US$ 20811.95 million which is 52.91 percent lower in Dollar terms than the level of US$ 44196.60 million during April-October 2015-16. (Services data pertains to April-September 2016 as September 2016 is the latest data available as per RBI’s Press Release dated 15th November 2016)

MERCHANDISE TRADE

EXPORTS & IMPORTS : (US $ Million)

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.

22.1. India, Brazil sign pacts to deepen cooperation in agri, cattle genomics

Business Standard | Oct. 18, 2016

New Delhi: India and Brazil on Monday finalised the text of a bilateral investment agreement, and inked pacts to deepen cooperation in fields of cattle genomics and agriculture.

At their standalone summit meeting on Monday, Prime Minister Narendra Modi and Brazilian President Michel Temer called for greater cooperation in areas of ship building, pharmaceuticals, defence production, ethanol production and oil and gas. India’s membership of the Nuclear Suppliers’ Group (NSG) also came up for discussion.

Brazil is a member of the 48-member NSG. While it didn’t explicitly oppose India’s bid to become a member of the NSG at the Seoul meeting in June, Brazil’s position is somewhat similar to that of China on the issue. It wants common criteria for countries that are not signatories to the nuclear Non-Proliferation Treaty (NPT) but seek to become NSG members.

On Monday, Ministry of External Affairs officials claimed that President Temer indicated Brazil will help India with its efforts to become an NSG member. “We thank Brazil for understanding India's aspiration for membership of the NSG,” Modi said in his statement after the meeting.

The PM said the India-Brazil bilateral investment agreement will provide much needed momentum to increased bilateral business and investment linkages. Modi said he has sought President Temer's support in facilitating greater market access and investment opportunities for Indian products and companies. “We deeply appreciate Brazil's support for India’s actions in combating terrorism,” Modi said.

Brazil also offered to help India in ethanol production, while sought India’s help with manufacture of affordable generic medicines. Six task forces are to be constituted to explore cooperation in sectors such as defence production, ship building, agriculture and food processing.

Earlier in the day, six CEOs each from India and Brazil held discussions on areas where India and Brazil can deepen economic ties. They recommended to the two leaders that India can benefit from Brazil’s huge strength in the ethanol sector.

From the Indian side, the CEOs were – United Phosphorous Limited (UPL) CEO Jai Shroff, Apollo Group Chairman Onkar Kanwar, Suzlon Energy Chairman Tulsi R Tanti, Shree Renuka Sugars Limited Vice Chairman and Managing Director Narendra Murkumbi, ONGC Videsh’s Managing Director Narendra Kumar Verma and Pidilite Industries Limited Executive Director Apurva Parekh.

UPL has presence in Argentina, Brazil, Columbia and other Latin American countries. Suzlon entered the Brazilian market in 2008 and has since created a cumulative installed capacity of 750 MW, primarily wind energy. Others also have presences in Brazil.

From the Brazilian side, companies that were represented included Vale, a Brazilian multinational mining company; WEG, which is one of the largest producers of electrical equipment in the world; bus manufacturer Marcopolo and Brazilian software, IT and consulting MNC Stefanini.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.

22.2. Brazil embraces "Make in India": Perto/Digicon opens its first ATM machine plant in India Economic Times | Oct. 20, 2016

New Delhi: Just as the the VIII BRICS Summit came to a closure, Brazil inaugurated its first “Make in India" initiative. The Brazilian Perto S. A., a Digicon Group company, a high technology and IT company and the world's leading manufacturer of Automatic Teller Machines (ATMs) and Cash Dispenser Machines (CDMs), inaugurated its first plant in India, in the Mahindra World City in Jaipur on Wednesday.

"As we launch the Perto factory in Jaipur, we undoubtedly take another significant step towards a solid commercial and investment relationship, based on high technological content and added value, setting a model to be followed", said Brazilian Ambassador Tovar da Silva Nunes at the inauguration. Rajasthan Minister of Industries Gajendra Singh Khimsar, founder of Group Perto/Digicon, Joseph Elbling; the CEO of the group, Thomas J. Elbling and the CEO of Perto India, Roberto Baur were also present on the occasion. The factory in Rajasthan, which has international regional export potential, was entirely built with green field direct investments, on a 100.000 square metre plot. According to Perto’s research, the potential for the Indian Market is estimated at over 500,000 ATMs. India today has only 195,000 ATMs, only 40 per cent of its potential. The manufacturing facility in Rajasthan required an initial investment worth $3.1 crore, that may exceed $6.5 crore. The investment is expected to generate direct employment for highly skilled and skilled labour, and generate demand for local quality services and suppliers.

"The VIII BRICS Summit and its related events in the economic area set the tone for the new trade and investment relations between Brazil and India. Without neglecting traditional sectors of Indian economy, the investment represents a new look ahead, with diversification of actions. The mutually beneficial partnership is getting out of the treaties, agreements and projects; and landing on the factory floor," according to Ambassador Nunes.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.

23. Tata Housing, Macquarie to invest Rs 2,000 crore in top residential realty projects

Livemint | Oct. 28, 2016

New Delhi: Macquarie Infrastructure and Real Assets (MIRA), a part of Australia’s Macquarie Group Ltd, and realty firm Tata Housing Development Co. Ltd have agreed to jointly invest around Rs2,000 crore to develop high-end residential projects, two people familiar with the development said.

Macquarie and Tata Housing have entered into a 70:30 partnership, where MIRA will put in Rs1,400 crore and the remaining Rs600 crore will come from Tata Housing.

The transaction will also be the Australia-based investor’s first real estate investment in India.

“This is an equity investment platform, where the capital will be deployed over the next three years in four locations—Mumbai, National Capital Region, Bengaluru and Pune,” said one of the people cited above, both of whom spoke on condition of anonymity.

MIRA is a large infrastructure asset manager globally and also has portfolios in real estate, agriculture and power across. Its growing real estate portfolio includes 290 retail, commercial, residential and industrial properties in China, Mexico and Australia.

A Macquarie spokesperson declined to comment.

Mint had reported in August that Tata and Macquarie were close to setting up a Rs2,000 crore platform. “The capital will be used to buy land parcels as well as look at joint development opportunities,” said the second of the two people cited earlier.

MIRA and Tata Housing will develop projects where residential units will cost upwards of Rs75 lakh, up to Rs3 crore, depending on the city and the location.

Over the past few years, Mumbai-based Tata Housing has continued to build affordable housing projects, but its attention has veered towards including more premium housing projects in its portfolio—the transaction with Macquarie is testimony to that strategy.

Tata Housing sells premium and luxury homes in the Rs60 lakh to Rs14 crore range and currently has 19 projects. Under its True Value Homes brand, the developer sells apartments at an entry price of Rs16 lakh across cities.

Global investors have been actively seeking opportunities to have exclusive partnerships with developers in India, both in the residential and commercial office segments.

Despite the prolonged slowdown in the sector, investors are clearly not shying away from committing capital in the country’s real estate landscape. What they are looking at, though, is good quality realty firms to partner with, those who are believed to have strong corporate governance standards and are part of a larger corporate group.

For instance, in March, Mumbai-based Godrej Properties Ltd raised $275 million for Godrej Residential Investment Program II (GRIP-II), to invest in residential projects, from a clutch of investors, with Dutch pension fund asset manager APG Asset Management as the lead investor.

“There are many global funds including pension funds who are interested in these strategic alliances, but they want the right partner with the right strategy to commit capital. From a developer’s point of view, it opens up a single source of capital which he can use to develop a portfolio of projects. Discussions are on for more such deals,” said Diwakar Rana, managing director, capital markets, India, at Cushman and Wakefield, a property advisory.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.

24.1. India, Japan plan to develop 'Pacific, Indian Ocean' corridor

Economic Times | Nov. 07, 2016

New Delhi: India and Japan hope to put in a place a network connecting the Pacific to the Indian Ocean as they eye joint development of infrastructure and capacity building projects in this vast region, with a special focus on Africa, in the backdrop of China's growing ambitions across Asia and Africa.

The mechanism aimed at contributing to Asian stability connecting two oceans is expected to be put in place when PM Narendra Modi visits Tokyo for the annual summit with PM Shinzo Abe from November 10-12. A key aim of this mechanism is also to utilise India's political network in Africa and Japanese funds to finance a variety of projects across the continent, people familiar with the development said. While top Indian leaders have made several visits crisscrossing Africa this year, Abe was in Nairobi in August where he announced a $30 billion public and private support for infrastructure development, education and healthcare expansion in the continent over the next three years beginning in 2016. This amount is in addition to $32 billion that Japan pledged to Africa over a five-year period in 2013.

India, which announced a $10 billion line of credit at last year's India-Africa mega summit in Delhi, has been involved in several development and capacity building projects across the continent, besides making investments across sectors from agriculture to telecom. It is also focusing on enhancing strategic partnership with Japan including defence ties.

In the coming months India and Japan are expected to identify projects in Africa where they can join hands, the people cited earlier said.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.

24.2. India, Japan and a new regional architecture

Livemint | 16 Nov. 2016

India’s World War II conception of Asia has finally turned on its head

Japan was the first country outside India’s immediate neighbourhood that Narendra Modi visited after taking over as prime minister. The personal bonhomie between Modi and his Japanese counterpart Shinzō Abe dovetailed with their overlapping strategic world view. But there was also the big geopolitical factor: the rise of China and its hegemonic designs.

As Modi returned from his second visit to Japan on Saturday, the China factor had become yet more overbearing. Sino-Indian relations have slumped precipitously—and this simply cannot be stated differently. China has refused to cooperate with India on terrorism emanating from Pakistan and India’s entry into the Nuclear Suppliers Group. On the other hand, Chinese coast guard vessels were spotted near the disputed islands in the East China Sea while Modi was still in Japan.

But China is not the only reason India and Japan are considering closer cooperation. The other major reason is the US. The Japanese administration, especially Abe, has had a lingering scepticism of US commitments in East Asia for some time now. The election of Donald Trump as the next US president magnifies Tokyo’s concerns. During his entire campaign, Trump maintained that allies like Japan were free-riding on American resources. In an argument to withdraw from the American role of providing security, Trump had even hinted that Japan acquiring nuclear weapons was acceptable to him. Trump’s election has also increased the uncertainties for India, as was pointed out in this newspaper.

While some expect Trump to assuage Tokyo’s fears in a forthcoming meeting with Abe this week, the latter realizes that it is high time Japan made significant strides in becoming a “normal” military power. Abe and his Liberal Democratic Party have long felt suffocated by the restrictions placed on the Japanese military by the 1947 Constitution that was imposed by the US as a military occupier in the aftermath of World War II. Defence cooperation with India, comprising sales, co-production and co-development of military hardware and joint military exercises, can help Japan outgrow some of its constitutional restrictions while Abe builds domestic opinion favouring a greater role for the Japanese military.

Modi’s visit, however, did not see the finalization of the sale of US-2 amphibious rescue aircraft but the joint statement notes India’s “appreciation for Japan’s readiness to provide its state of the art defence platforms such as US-2 amphibian aircraft”. As far as defence exercises are concerned, Japan has now become a permanent third participant in the annual Indo-US Malabar exercise. But when it comes to the security of the Indo-Pacific region, Japan is not seen as an independent entity. Both India and Japan would like to continue the Malabar exercise with the US and engage in other forums such as the India-US-Japan trilateral dialogue, but they would also be looking to build greater bilateral cooperation in securing the global commons in the Indo-Pacific region.

This is not to suggest America’s disintermediation but to prepare for the contingencies were Trump-led Washington to grow disinterested in the region. The reverse of security cooperation is true for nuclear energy. The Indo-US civil nuclear deal could not have been operationalized unless India had a civil nuclear agreement with Japan—Westinghouse, which has agreed, in principle, to supply reactors to India is owned by Japanese firm Toshiba. Modi’s visit finally saw the nuclear deal between India and Japan inked. Both sides have made some compromises: Japan has signed such a deal for the first time with a country which is not a signatory to the Treaty on the Non-Proliferation of Nuclear Weapons and India has signed an additional note which states Japan’s right to terminate the deal if India were to backtrack from its unilateral, voluntary moratorium on nuclear testing (whether this is legally binding is unclear). The nuclear deal will help India build up its clean energy reservoir and is expected to provide some relief to Japanese firms reeling under financial distress in a post-Fukushima world.

Besides, the joint statement notes progress in other areas of cooperation, including the high-speed rail project, the Delhi-Mumbai industrial corridor and skill development. It is not yet clear if New Delhi is willing to supplement Japanese resources in Tokyo’s “Expanded Partnership for Quality Infrastructure” to counter Beijing’s “One Belt One Road” initiative. Unless New Delhi takes this decision, its transition from a balancing power to a leading power will not begin.

In his address to business leaders, Modi pitched India as the most attractive investment destination in the world—Japan is among the top five sources of foreign direct investment in India. A significant part of Japanese capital invested in India is state-backed, providing patient capital on easy terms for long-term infrastructure projects. Private capital from Japan complements it by generating jobs in sectors like automobiles. The numbers on trade ($14.5 billion in 2015-16), however, do not do justice to economic relations between the third and fourth largest economies (in terms of purchasing power parity) of the world.

Abe always had an ambitious vision for India-Japan relations. In his 2006 book Towards A Beautiful Country, he wrote: “It will not be a surprise if in another decade Japan-India relations overtake Japan-US and JapanChina ties.” In the decade since, his vision has not been realized. In Modi, Abe has finally found a willing partner who is not given to Cold War nostalgia.

With Modi’s term, so far, seeing a dramatic upswing in India’s relations with Japan and a significant decline with China, it can now be said that India’s World War II conception of Asia has finally turned on its head.

25.1. Crocs to open 55 new outlets in India

HT Business | Nov. 08, 2016

New Delhi: Last year, Amazon.co.uk reported that the sales of American footwear brand Crocs jumped 1,500% in the UK after the paparazzi took a picture of Prince William and Kate Middleton’s son wearing a pair. It seems the firm now wants to build on that success.

Eyeing the Indian market, Crocs plans to set up 55 more company-owned outlets and 450 multi-brand retail points by next year. At present, the firm has about 1,000 outlets, including 35 company owned outlets and ecommerce alliances.

The brand that sells 5.5 crore pairs annually, registering a turnover of approximately â‚¹9,750 crore, expects to sell 70 lakh pairs annually against the current 15 lakh in India in the next five years.

The fun footwear brand is targeting a revenue of â‚¹670 crore by 2021 in view of the rising sales of casual footwear in the country. Crocs will launch about 400 new products, including 250 new designs and 150 colours, in India.

“We will have 100 company-owned retail outlets by the end of next year,” said Deepak Chhabra, managing director.

A study by Retailers Association of India said the per capita consumption of footwear in urban India has risen from 1.4 pairs in 2010 to 2.6 in 2015. Moreover, casual wear constitutes 70% of the total footwear sales. With an annual production of 210 crore pairs, India is the second largest footwear producer in the world, according to industry estimates.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.

25.2. Dyson eyes India entry next year with own retail stores

Livemint | Nov. 08, 2016

New Delhi: Dyson Ltd, the UK maker of innovative vacuum cleaners and air purifiers, plans to enter India with its own retail stores by the middle of 2017.

The company has already sought permission from the Department of Industrial Policy and Promotion (DIPP) to import and sell products in the country.

“If we get the permit we’ll set up middle of next year. Over the first five years, we’ll invest about £154 million in India. Our investment will be in building infrastructure (retail), taxes (to the government), marketing and promotions,” said founder James Dyson, who is known for inventing cyclonic bagless vacuum cleaner. The founder was in India to participate in the India-UK Tech Summit held in New Delhi.

For Dyson, India will be its 76th market.

“We have been dealing with other markets and China, which is the last market we entered three years ago. Now we would like to tackle India. Besides, India was not ready for vacuum cleaners. India is an interesting market but it may take time to develop, unlike China that has emerged as the third largest market for Dyson, after the US and Japan, in just three years,” said Dyson.

The company will set up a retail store in each of the top 20 cities in India, sell through other retailers and online shopping portals in India.

“Online helps our business. We sell through Amazon in some countries and may sell through Amazon in India as well,” he added.

The average price of Dyson products will be in the range of £300-£500, on par with its global pricing. “Technology has a cost, and our products come with patented technology. We don’t discount, and we’ll not get into any price game,” said Dyson.

The company will import products from Malaysia, Singapore and Philippines for the Indian market. Depending on volume, Dyson may look at making products in India after a few years.

“That’s a possibility. But we first need to enter the market,” added Dyson.

Besides vacuum cleaners, the company will also look at beauty and hygiene market with hair dryers and hand dryers. “We’ll also sell LED lighting products here,” he said.

Based in Malmesbury, UK, Dyson is a family owned technology company which employs more than 7,000 people globally—a third of whom are engineers and scientists.

“India produces 1.3 million engineers every year. That’s very exciting. We’ll look at working with Indian universities soon,” Dyson said. The company spends £5 million per week in research, design and development and has over 200 live technology projects and 50 active research programmes with 40 universities around the world.

Dyson’s revenue rose 26% to £1.7 billion in 2015 and profit increased 19% to £448 million, according to a company statement.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.

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Sunday 20 November 2016

NEWSLETTER, 20-XI-2016

– GENERAL POLICY, INFRASTRUCTURES, COUNTRY FINANCES, ETC.

– AGRICULTURE, FISHING and RURAL DEVELOPMENT

– INDUSTRY, MANUFACTURE

– SERVICES (IT, R&D, Tourism, Healthcare, etc.)

NEWSLETTER, 20-XI-2016

– GENERAL POLICY, INFRASTRUCTURES, COUNTRY FINANCES, ETC.

– AGRICULTURE, FISHING & RURAL DEVELOPMENT

– INDUSTRY, MANUFACTURE

– SERVICES (IT, R&D, Tourism, Healthcare, etc.)