NEWSLETTER, 20-VI-2015

INDEX of this NEWSLETTER

INDIA

- GENERAL POLICY, INFRASTRUCTURE, COUNTRY FINANCES, ETC.

• 1.1. Economy to grow by 7.6%-7.8% in 2015-16: ICRA
• 1.2. GST from Jan 1, 2016: Arun Jaitley
• 2.1. 22,000cr ($3,3 bn) by closing 5 sick PSUs: Geete
• 2.2. Govt. to privatise 8 "sick" ITDC hotels, will retain Ashok
• 3.1. JNPT to build Rs.10,000 crore ($1,6 bn) satellite port at Wadhwan
• 3.2. Centre pads up to raise Rs.1 lakh crore ($15,8 bn) for ports & infrastructure
• 4.1. Shell looks to expand retail network in India
• 4.2. ONGC to invest Rs.41,678 crore ($6,6 bn) on new fields
• 5.1. Adani plans 1,000-Mw solar park in Tamil Nadu
• 5.2. Government’s target to set up 100 GW of solar plants drives local, foreign companies 
• 5.3. Essel, Rajasthan ink pact for solar parks; to invest Rs.4,000 crore

- AGRICULTURE, FISHING & RURAL DEVELOPMENT

• 6.1.  India signs legal agreement with The World Bank for IBRD loan of US$ 400  million for Tamil Nadu Sustainable Urban Development Project
• 6.2.  Phase-I Smart City launch next month
• 7.1.  Centre invites global bids for Rs.2,500 crore 'train sets' project: Mahendra Singh
• 7.2.  Railways to sign MoU with states for infrastructure expansion
• 8.1.  Onion exports jump 25% in two months
• 8.2.  India to remain major sugar producer
• 9.1.  Pump maker WPIL buys Italian firm: Udit Prasanna Mukherji
• 9.2.  30 new cold chains to be set up
• 10.1. Indian retail market to reach $1.3 trillion by 2020
• 10.2. India Post inks deal to issue 1.5 crore (15 million) debit cards: Mayur Shetty
• 10.3. RIL to complete projects worth Rs.2 lakh crore ($30 bn) in next 12-18 months:  Mukesh Ambani
• 10.4. BigBasket to tie up with 1,800 stores in private-label push

- INDUSTRY, MANUFACTURE

• 11.1. 'Make in India': Ford working on plans to ship India-made EcoSport to US
• 11.2. Exports, overseas operations help auto-component makers stand out
• 11.3. Make in India: Mercedes Benz doubles India production capacity to 20k units: Pankaj Doval
• 12.1. Lupin plans cancer drug unit in Mihan
• 12.2. Guwahati could emerge as pharma hub for South East Asia: Ananth Kumar
• 13.1. Top Gear: Daimler inaugurates bus manufacturing plant near Chennai
• 13.2. Daimler Trucks to make India its export hub: Marc Llistosella
• 13.3. Volkswagen delivers 300,000th car in India, inaugurates new dealership in Coimbatore: M Allirajan
• 14.1. Increased transparency will encourage global players to do business in India: Banmali Agrawala, GE South Asia head Himangshu Watts
• 14.2. Mobile phone manufacturing hub to come up in Hyderabad
• 15.1. India, other emerging markets to drive $5 tn. aircraft demand
• 15.2. Air India MRO (maintenance, repair and overhaul) at Hyderabad airport takes off

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

• 16.1. Doctors at Mumbai's Tata Memorial Hospital find way to reduce risk of oral cancer
• 16.2. George & Thomas Kurian - identical twins, identical super-success: Sujit John & Shilpa Phadnis
• 17.1. Google to invest Rs.1,500 crore ($235 million) in new Hyderabad campus; focus on three key projects
• 17.2. Microsoft sets up 3 data centres in India
• 17.3. Cisco’s outgoing CEO Chambers asks IT companies to bet on India
• 18.1. Royal Orchid targets 50 hotels in two years
• 19.1. Make in India: Ford may invest Rs.5,000 crore in Chennai R&D centre: Ketan Thakkar
• 19.2. Exxon to set up $500m centre in Bengaluru: Sujit John & Shilpa Phadnis
• 19.3. Bengaluru GICs (Global In-House Centres) up the ante, begin a hiring spree: Sujit John & Shilpa Phadnis
• 20.1. Global diamond mines allowed to sell in India in special zones

INDIA & THE WORLD

• 21.1. India, three neighbours to ink road pact to boost trade
• 21.2. India – Bangladesh Inter Governmental Railway Meeting (IGRM) concludes in New Delhi
• 21.3. Reliance Power, Adani to invest $5.5 billion in Bangladesh power projects
• 21.4. $2 billion line of credit to Bangladesh to create 50,000 Indian jobs: Surojit Gupta
• 22.1. Modi's visit redefined India, China economic partnership: CII
• 22.2. China wants Indian IT companies' expertise in new hi-tech city
• 23.1. World's second richest man Carlos Slim (Mexico) eyes Indian telecom: Kalyan Parbat
• 23.2. TOI's top 10: World's richest Malayalis: Shenoy Karun
• 24.1. Australia lines up investments worth $10 billion for India
• 25.1. US-based SunEdison to acquire Continuum Wind Energy
• 25.2. GE bets big on India. Again

* * *

NEWSLETTER, 20-VI-2015

INDIA 

- GENERAL POLICY, INFRASTRUCTURES, COUNTRY FINANCES, etc.

1.1. Economy to grow by 7.6%-7.8% in 2015-16: ICRA

The Times of India | May 27, 2015

Mumbai: The economy would grow by 7.6% - 7.8% in 2015-16 despite the headwinds posed by muted global growth and an unfavorable monsoon outlook, ratings agency ICRA has said. 

"The improvement in macroeconomic fundamentals reflects the policy actions taken by the government and the central bank, which have been supplemented by tailwinds such as benign commodity prices," said Aditi Nayar, senior economist, ICRA.

Growth of gross value added (GVA) at basic prices is estimated to decline to 7% in the fourth quarter of 2014- 15 from 7.5% in the previous quarter due to crop damage caused by unseasonal rainfall, decline in growth of electricity, contraction in non-POL (petroleum, oil and lubricants) merchandise exports and moderation in the pace of expansion of central government spending.

ICRA expects a slowdown in growth of the services sector (10.8% in the Q4 2014-15 from 13.5% in Q3) to be partly offset by an uptick in industrial expansion (5.1% in Q4 compared to 3.9% in Q3). Agricultural output is however expected to stagnate on a year-on-year (y-o-y) basis.

"Higher government spending on infrastructure, simplification of clearances, easing of norms for foreign direct investment, continued reform momentum and further monetary easing of 50 bps (0.5%) are expected to support a revival in investment activity in 2015-16, led by sectors such as roads, urban infrastructure and freight corridors," ICRA stated.

"Moreover, moderating inflation is expected to boost urban consumer demand, while rural demand may post an improvement in the second half of 2015-16," it said. "Nevertheless, the pace of fresh investment in some sectors such as thermal power and steel is likely to remain sluggish on account of the continuing constraints posed by the lingering sector-specific issues," the agency said.

The country's current account deficit would come down to 0.9% of GDP in 2015-16 benefiting from the moderation in commodity prices, a substantial improvement from the alarming levels above 4% recorded in 2011-12 and 2012-13, ICRA stated.

While a recovery in domestic demand and investment conditions is expected to expand import volumes, lower average commodity prices would restrain growth in value terms, it said. 

Notwithstanding the long-term benefits expected from the 'Make in India' program, focus on improving ease of doing business, enhancing infrastructure and moderating inflation, export growth would remain modest in 2015-16 due to muted improvement in global growth and rupee appreciation on a REER (real effective exchange rate) basis acting as a drag on overall economic expansion, ICRA said.

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

1.2.  GST from Jan 1, 2016: Arun Jaitley

TNN | May 27, 2015

Ahmedabad: Union finance minister Arun Jaitley on Tuesday indicated that Goods and Service Tax (GST) could come into force earlier than expected. Addressing a gathering at Tagore Hall in the city on the occasion of the Modi government completing one year, Jaitley said that GST could be implemented in the country from as early as January 1, 2016.

"GST is a uniform tax system and will allow seamless transfer of goods and services. It will also help in increasing the GDP of the country by 1-1.5%," said Jaitley. The Rajya Sabha MP from Gujarat also said that the Union government is expecting an increase of 14-15% in Income Tax collections in 2015-16.

Taking a dig at Congress vice-president Rahul Gandhi and other leaders of the party, Jaitley said that the new policy of the opposition is to block development. "There is a Hollywood actor who became a governor of a state in US some time back. About him, people used to say how much does he know, when will he know?

Same is the case with Congress leaders. Rahul Gandhi did not know that his own government in 2013 had scrapped Food Park project in Amethi and his party blames Prime Minister Narendra Modi," said Jaitley.

Listing the achievements of the central government in the past one year, Jaitley said that in the past 15 days more than 7.5 crore people have been covered under the recently introduced accident and life insurance schemes by the Prime Minister. 

"More than 15.5 crore new bank accounts have been opened under the PM Jan Dhan Yojana in the country and around 12.5 crore people have already started getting cash through direct transfer," said Jaitley.

On former Prime Minister Manmohan Singh, Jaitley said that personally he was not a critic of Singh. "Singh was not allowed to do what he could do as man of economics. It was widely said that he was a PM in office but not in power," said Jaitley.

2.1. 22,000cr ($3,3 bn) by closing 5 sick PSUs: Geete

TNN | May 30, 2015

Ahmedabad: The Centre plans to sell assets of five sick central public sector enterprises (CPSEs) to raise Rs.22, 000 crore. The assets are likely to be sold in the next couple of months. This was stated by Anant Geete, minister of heavy industries and public enterprises, on the side-lines of a workshop here on Friday. 

Geete said that the units facing closure are HMT Watches, HMT Chinar, HMT Bearing, Tunga Bhadra Steels and Hindustan Cable Corporation. 

"Their assets are valued at around Rs.22,000 crore. We would get this by spending Rs.1,400 crore on their closure," said Geete.

The companies are at prime locations in different states. "We are prepared to give immovable properties and the machineries and plants to buyers on 'as it is and where it is' basis," Geete said. He said that the cabinet has given in-principle approval. 

"These companies have been shut since 2007. We have spent around Rs.4,000 crore on the salaries," pointed out Geete. 

"Around 2,800 employees of these CPSEs will be offered voluntarily retirement. While these employees were getting salaries as per 1997 pay scale, VRS would also be as per 2007 pay scale," he added. 

"No investor is ready to invest in such companies. So we took the decision to close them," said Geete.

2.2.   Govt. to privatise 8 "sick" ITDC hotels, will retain Ashok

PTI | May 24, 2015

New Delhi: Government will soon privatise eight loss-making hotels run by India Tourism Development Corporation (ITDC) as it plans to "offload" all the sick units, Tourism Minister Mahesh Sharma said. 

"We propose that all our sick units need to be offloaded. Out of 16 hotels, eight are in very bad shape and we propose to disinvest it in the very first phase. It is not wise to bear the burden of these loss-making units," Sharma said. 

"The ball has started rolling," he said, adding that the formal process should begin within two months.

However, he ruled out the possibility of selling off 'The Ashok', the flagship property of ITDC in the capital. "Ashok will not be on the block. We are trying to revamp it and this year we will make it a profitable venture," the Tourism Minister said. 

The Ashok alone incurred a loss of about Rs.13 crore in 2014-15, while other ITDC hotels together ran up losses of about Rs.15 crore.

Currently ITDC, a PSU under the Tourism Ministry, runs 16 hotels including three in Delhi and the rest in Jammu, Ranchi, Bhubaneswar, Puri, Patna, Bhopal, Bharatpur, Jaipur, Guwahati, Pondicherry, Mysore and Itanagar. The eight hotels which are likely to go under the hammer include those at Jaipur, Bhubaneswar, Puri, Jammu, Guwahati, Ranchi, Pondicherry and the Lalitha Mahal hotel in Mysore, all of which are loss-making.

The minister said whether the privatisation will be through joint venture or giving the operation and management to private players on a lease or any other modes was yet to be decided.

To a question on how much money the government expected from the disinvestment of ITDC properties, Sharma said, "It is not possible to say now. A proposal will be sent to the Cabinet and the mode of disinvestment will be decided."

During NDA's first stint in power between 1999 and 2004, the then Vajpayee government had divested 18 ITDC hotels, bringing down the number of state-run hotels from 34 to 16. 

Besides, the network of hotels, ITDC also runs 11 transport units, nine duty-free shops at airports and seaports.

3.1. JNPT to build Rs.10,000 crore ($1,6 bn) satellite port at Wadhwan

Livemint | Jun. 05, 2015

Mumbai: Maharashtra’s Jawaharlal Nehru Port Trust (JNPT), which handles more than half of India’s shipping cargo, has decided to build a satellite port at Wadhwan near Dahanu, bordering Gujarat. The new port, which will cost Rs.10,000 crore to build, will ease congestion at JNPT, which is close to Mumbai. Union shipping minister Nitin Gadkari confirmed the development on Thursday.

JNPT will hold a 74% stake in the proposed port project while the Maharashtra Maritime Board (MMB), owned by the state government, will hold the rest. Both entities are expected to sign a memorandum of understanding (MoU) in this regard on Friday.

According to a senior official in the chief minister’s office, Vijaydurg in Ratanagiri district and Wadhwan in Palghar district were shortlisted for the new port. Draught at both places was 20m each, which would allow bigger ships to dock. 

“However, the Wadhwan site was chosen because of its connectivity with the Western Railway network, which is a double-line network unlike Konkan Railway, which is a single-line network,” said the official, who requested anonymity.

JNPT loaded a record 4.46 million standard containers in 2014-15, up from 4.16 million the previous year. A person close to the development said the proposed port will have a capacity of 40-60 million tonnes. JNPT will build the port and invite private firms to operate it. Proximity to the upcoming dedicated freight corridor and Delhi-Mumbai industrial corridor will ensure captive cargo for the port, he added.

In 1998, the Maharashtra government had given a mandate to erstwhile Peninsular and Oriental Australia Ports Pvt. Ltd (now Dubai Ports World) to develop Wadhwan. The project did not take off due to protests over environment norms, fishing dynamics and possible displacement of Mumbai’s dock workers. 

“The government is aware of the past problems of Dahanu. It has tweaked the Dahanu port project in such a way that it will not hamper the environment. We are expecting to complete construction in five years, including securing necessary environmental clearances,” the person mentioned above said.

“Maharashtra needs an alternative port as JNPT is already congested. JNPT, as an organization, is just 25years old and one cannot leave this young organization without any future,” a leading port consultant said, requesting anonymity. He said the state needs ports other than JNPT to handle cargo, adding that the government has the huge task of securing environment clearances and convincing the local population.

The Dahanu port project was estimated to cost $950 million in the 1990s. Praveen Patil, president of the Anti Wadhwan Port Project Action Committee, which led the earlier agitation against the project said, “We are hearing stories about the government wanting to revive the project. We have not been officially told anything. If the government tries to push the project once again, we will oppose it; just like last time, we will block the government’s attempt to thrust the project on us.”

Another senior official from the state government, who did not want to be named, said the difference between the previous proposal and the current one is that the new one will require minimal land acquisition. 

“This time, the plan is to reclaim land from the sea. We have identified the area between the ridge and the sea shore for reclamation so there will be no opposition from locals. Secondly, this time around, the port will be used only for container traffic; so there will be no dirty cargo like coal or iron ore which causes pollution, which will help us to secure environmental clearance,” he added.

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

3.2. Centre pads up to raise Rs.1 lakh crore ($15,8 bn) for ports & infrastructure

Business Standard | Jun. 08, 2015

New Delhi: Union Ministry of Shipping has chalked out a plan to raise Rs.1lakh crore to develop ports, build ships and improve inland waterways. The amount would be raised in the dollar equivalent at an interest of three per cent.

Union Minister of Shipping Nitin Gadkari told Business Standard: “The loan will be raised by state-run Shipping Corporation of India, Mumbai Port Trust and Jawaharlal Nehru Port Trust (which has annual revenue of Rs.5,000 crore in dollar equivalent). If the loan was raised in India, the interest rate would be 12-13 per cent.” 

Also, state-run ports and shipping companies can raise loans in dollar up to Rs.1lakh crore, without hedging them. Gadkari also said his ministry is planning to set up Ports Infrastructure Development Finance Corporation to fund ports and shipping infrastructure in dollars.

“Inland waterways, ports and shipping are on the top of the agenda. The Centre is keen to modernise large ports. ”

The ministry has already taken decisions to develop six ports, including Rs.12, 000 crore deep-water Sagarport in West Bengal, Colachel in Tamil Nadu, Rs.6,000 crore Vadhavan port in Maharashtra, and Rs.1,200 crore Haldia dock 2.

Gadkari said his ministry had decided that ports would be developed with 20 meter draft.” “The handling capacity will be more and the ports do not have to annually spend money on dredging. A port with 20 meter draft will also help increase revenues. At present, JNPT has to spend Rs.400 crore annually on dredging,'' he noted.

Gadkari, who is also the Union roads minister, reiterated his ministry’s plans to launch projects worth Rs.3.5 lakh crore in the next six months. He said pension funds across the world will be invited soon to organise finances for the road projects worth Rs.1 lakh crore.

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

4.1.  Shell looks to expand retail network in India

Business Standard | Jun. 08, 2015

New Delhi: Global oil & gas giant Royal Dutch Shell Plc., a $421-billion company, is eyeing investment opportunities in the Indian downstream segment, especially with the recent deregulation of diesel prices and opening of the market.

The company is planning to expand its retail outlet network utilising its existing licence to set up 2,000 fuel stations. 

The Netherlands-based energy and petrochemical group might also look at the upstream exploration and production segment and is pinning its hopes on the indications that the government would introduce an open acreage licensing policy (OALP).

"We are looking to expand retail outlet network. The price deregulation happened not so long ago. There are many things we have to get in place. Running a retail station starts with land acquisition, and that takes time. We are doing some work to devise a realistic growth plan," Yasmine Hilton, country chairman, Shell Group of Companies in India, told Business Standard.

"We have the potential to grow. We are looking at the right opportunities," added Harry Brekelmans, member of the company's executive committee and director (projects& technology), who was also present. Brekelmans had arrived in India last week, as part of a business delegation, along with Dutch Prime Minister Mark Rutte. The visit included meetings with Prime Minister Narendra Modi.

India had deregulated diesel prices in October last year, linking the domestic rates of the transport fuel with global benchmarks. 

Since then, multiple companies, including Reliance Industries Ltd (RIL), Essar and ONGC subsidiary Mangalore Refinery and petrochemicals (MRPL), have announced plans to set up retail pumps, even as existing retailers – public sector firms Indian Oil, Bharat Petroleum and Hindustan Petroleum - brace for competition. Brekelmans also said, with the government actively reviewing its new exploration and licensing policy (NELP), the company was hoping the policy "develops to an extent where it is competitive".

Hilton added: "We are quite interested in the new policy which suggests the open acreage licensing policy (OALP) will come. We think that will give us a different opportunity to look at." OALP, which gives companies the freedom to choose which blocks they want to bid for and the time of applying for a block, is generally preferred by investors.

Commenting on the domestic debate over production-sharing versus revenue-sharing models of development of oil & gas blocks, Hilton said Shell could work in any regime as long as there was stability across that regime. "Stability means that once we enter into an agreement, it is a long-term agreement. We do not want changes over the period of the agreement. The new government is giving all the right signals," she said.

Shell has already invested close to $1 billion in India and is the only global major to have a fuel retail licence in the country. Against its licence from the Centre to set up a network of up to 2,000 outlets, it has around 75 outlets currently operational. Shell also operates the Rs.3,000 crore Hazira LNG storage and regasification terminal. Besides being a major private supplier of crude oil products, chemicals and technology to public- and private-sector oil companies; it has interests in the lubricants and bitumen segment.

Brekelmans said, as a long-term investor, Shell remained committed to business opportunities in India. These, he said, included gas, as there was significant growth likely in gas demand in India. "This is why we are currently in discussions to further expand the Hazira LNG terminal. We have also signed a memorandum of understanding (MoU) for the Kakinada floating R-LNG facility. This shows our confidence that gas in the Indian market is a sound proposition for the long term," he said.

Asked whether the Modi government had done enough in its first year in office to spur large investments, Brekelmans said: "The direction of reforms is, no doubt, positive and optimistic. We have been committed to India since 1928 and it is hard to see discontinuity. India is an attractive market. The reforms that have been set in motion will aid that attractiveness. And, with this growth additional investments will come over time."

Royal Dutch Shell was recently in the news for its $70-billion acquisition of the BG Group. The announcement, which came in April, was the first major oil-sector merger in about a decade. The deal is yet to be closed. The company had also recently announced setting up an information technology project development centre in Bengaluru, in addition to a research & development technology centre in that city.

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

4.2. ONGC to invest Rs.41,678 crore ($6,6 bn) on new fields

PTI | Jun. 7, 2015

New Delhi: State-owned Oil and Natural Gas Corp (ONGC) will invest Rs.41,678 crore for bringing to production newer oil and gas fields and redeveloping ageing fields as it looks to boost output. The company, which produced 25.94 million tonnes of crude oil and 23.52 billion cubic meters of gas in 2014-15, is boosting investment to reverse the declining trend in output at bulk of its old and ageing fields.

ONGC will invest Rs.24,188 crore in development of six projects both on the east and west coast. Another Rs.17,490 crore will be spent on redeveloping its prime Mumbai High fields as well as Heera-South Heera fields in western offshore, a top company official said.

The biggest project is the western offshore Daman field development where Rs.6, 086 crore is being invested to produce 27.67 billion cubic meters (bcm) of gas by 2034-35."Production is expected by July 2016 at the rate of 2 million standard cubic meters per day and peak output of 8.35 mmscmd of gas and 9,286 barrels of condensate per day is likely by 2018-19. There is an upside potential of 10 mmscmd," he said.

In the neighbouring South Bassein field, Rs.4,620 crore is being invested in additional development by April 2017 for an incremental gas production of 18.83 bcm by 2030-31. Also, Rs.2,477 crore additional development of Vasai East will give 1.83 million tonnes and 1.97 bcm of gas by 2029-30. The project will be completed by December 2018, he said.

The official said ONGC is investing Rs.1,881 crore in developing the Gamij oilfield near Ahmedabad. Of the east coast, ONGC is investing Rs.4,124 crore in developing the Vashista and S-1 gas fields in Krishna Godavari basin. 

The project will be completed by April 2017 and give an incremental gas production of 15.96bcm, he said. Another Rs.5,000 crore is being spent on Krishna Godavari basin field of Nagyalanka which will start production from September next year.

The official said ONGC is investing Rs.5,813 crore in redeveloping the Mumbai High North field with a view to enhance recovery factor and increase the longevity of the prime asset. 

"This project will also help to monetize untapped reserves," he said, adding that incremental production of 0.43million tonnes of oil and 0.63 mmscmd of gas has already started and this will rise to almost 1 million tonnes of oil and 1.64 mmscmd of additional gas by FY18.

Similarly, Rs.6,069 crore was being spent on Mumbai High south fields and another Rs.5,608 crore in redeveloping the Heera and South Heera oil and gas field in the western offshore, he added.

5.1. Adani plans 1,000-Mw solar park in Tamil Nadu

Business Standard | May 25, 2015

Chennai & Ahmedabad: After announcing solar parks in Gujarat and Rajasthan, Adani Power has firmed up plans to set up a 1,000-megawatt (Mw) one in Tamil Nadu. The proposed energy park is likely to attract around Rs.7,000 crore investment. 

Although an Adani spokesperson declined to comment, a state government official and sources in the company confirmed the development. The sources said a deal had been signed with the state government and the project is at an “exploratory” level. Sources at the state government said the project would be developed in four phases.

The company is planning to set up the park at Kamuthi in Ramanathapuram district, around 550 km south of Chennai, and is in the process of acquiring approximately 5,000 acres, the sources said. Going by the current market value, to set up a 1 Mw solar-based power plant, the company would need around Rs.7 crore. Sources said construction would commence in the next eight months and the company might look at replicating its Rajasthan model.

In February, Adani Enterprises, Flagship Company of the Adani Group had entered into an agreement with the Rajasthan government to develop solar parks having a capacity of 10,000 Mw in 10 years. In January, the company, along with SunEdison, announced they would build a solar photovoltaic manufacturing facility in Mundra, Gujarat. This would be an integrated solar photovoltaic manufacturing facility, with an investment of up to $4 billion (Rs.25,000 crore). 

The development comes against the backdrop of the Centre’s decision to set up 100,000 Mw of solar capacity by 2022, and guidelines have been issued for setting up of at least 25 solar parks, each with a capacity of 500Mw and above across the country.

The Tamil Nadu Electricity Board had also said it was planning to procure 3,000 Mw of solar power by the end of 2015. 

According to Tamil Nadu Generation and Distribution Corporation Chairman and Managing Director M Saikumar, more than 200 companies have shown interest in signing power-purchase agreements (PPAs) for 2,000 Mw so far. 

Estimates say the present cost of solar power, more than Rs.7 a unit, would come down to Rs.5.45 by next year.

Officials also said PPAs for 200 Mw of solar power had already been signed. These plants are likely to come up at Ramanathapuram, Virudhunagar and Tuticorin districts of Tamil Nadu, the officials added.

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

5.2. Government’s target to set up 100 GW of solar plants drives local, foreign companies

Economic Times | Jun. 01, 2015

New Delhi: Encouraged by Prime Minister Narendra Modi's call to set up 100,000 megawatt (100 giga watt) of solar plants in the country by 2022, foreign solar cell makers are setting up shop in India in partnership with local players. 

What are driving them are the government's target and the opportunity to export products from hereto other countries.

Local players are equally upbeat as they see an opportunity to upgrade their technology via a foreign partner and achieve economies of scale. Currently, domestically manufactured solar modules are not only expensive but also uneconomical, compared with cheaper imports, especially from China. "The local industry is not geared to meet the total demand and that's the immediate trigger for foreign interest.

In the next one year, 3-4 foreign players can be expected to set up solar manufacturing facilities in the Indian market," said Santosh Kamath, partner and head of renewable energy sector, KPMG. In November, 

Prime Minister Narendra Modi announced a target to set up 100 Gw of solar plants from the current small base of 3,000 Mw. Since then, solar equipment manufacturing agreements between Indian and foreign companies have become a staple in the prime minister's overseas visits.

For example, Welspun Energy signed a memorandum of understanding with China's Trina Solar to jointly setup a photovoltaic industry park to produce 500 Mw of PV cells and 500 Mw of PV modules in India during the prime minister's recent China visit during May 14-16. 

In the same visit, Essel Group entered into an agreement with China's energy firm JA Solar to launch a joint venture for manufacturing solar cell and modules in India.

At Hannover Messe, the world's biggest industrial fair held in Germany this April, Vikram Solar signed similar MoUs with German company Fraunhofer Institute for Solar Energy Systems ISE and Swiss companies Meyer Burger and Centro herm. Officials at Vikram Solar said foreign partners want to make inroads into India by validating their new technologies here, while Indian partners like them are looking to get the best processes to build updated production lines. "Within six months manufacturing configurations get out-dated and it gets difficult for local players to upgrade them in time.

None of the manufacturers is competitive and that's why we have Domestic Content Requirement (DCR) in projects. Local cells are 15 cents costlier than those available internationally," said Ivan Saha, president and chief technology officer, Vikram Solar. With such tie-ups, Saha says, he aims to make "Make in India" work in solar manufacturing space, which is currently suffering from low-confidence due to bad experiences with many local players.

In May, Azure Power commissioned a 100 Mw solar plant under the National Solar Mission Policy with 60 Mw of Made-in-India equipment; but at a "cost" to the company. "Our goal was to demonstrate that we believe the Make in India campaign would work for the solar space. But the cost differential between local and imported equipment is 7-8%. 

If you compete with such high cost structures in an open tender you can't win as every 1% cost differential counts there," said Inderpreet Wadhwa, founder and CEO at Azure Power. Wadhwa said he would encourage foreign manufacturers to enter the country if the government sticks to its plan of tendering 10,000 Mw of solar capacity this year.

Then there was the agreement in January between Adani Enterprises BSE -2.56 %, the flagship company of Adani Group, India's leading integrated infrastructure player and leading American solar technology manufacturer and provider of solar energy services SunEdison to establish a joint venture (JV) to build the largest, vertically integrated solar photovoltaic manufacturing facility at a cost of $4 billion. But not everyone is taking the plunge right away.

America's First Solar has been evaluating setting up a manufacturing facility in India but is waiting for predictability of demand before going ahead. 

According to Sujoy Ghosh, country head at First Solar (India), as of today lack of consistent and predictable demand, high cost of interest and lack of reliable power supply create headwinds to the argument on investment in local manufacturing that can be globally competitive and hence sustainable in the long run.

"The current policy of allowing imported wafers that account for 40% of the value chain for fully domestic modules will not create true import substitution or cost competitive options locally... a clear visibility on the next 5-7 years of procurement will be very helpful for deciding investment on manufacturing/supply chain activities that will be for the longer term," Ghosh said.

Solar market intelligence firm Bridge to India foresees installation of about 2.7 GW of such projects in India this year. "Even though India has about 2 Gw of module manufacturing capacity, only 400-500 Mw will be sourced locally not just because these products are expensive, but also because a large part of the capacity is not functional," said Jasmeet Khurana, senior manager (consulting) at Bridge to India.

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

 5.3. Essel, Rajasthan ink pact for solar parks; to invest Rs.4,000 crore

PTI | Jun. 5, 2015

New Delhi: Diversified conglomerate Essel Group on Friday said it has formed a 50:50 joint venture (JV) with the Rajasthan government to set up solar parks in the state. The solar parks will be set up in Bikaner and Jaisalmer regions with an investment of Rs.4,000 crore. "Essel Group has entered into a JV agreement with the government of Rajasthan to set up solar parks in the state. The project will facilitate an investment of Rs.4,000 crore in the regions of Bikaner and Jaisalmer," it said in a statement.

Essel Group and Rajasthan government will hold a 50:50 stake in the JV firm — Essel Saurya Urja Company of Rajasthan Limited (ESUCRL) — which will develop solar parks that would produce 5,000MW of clean energy, it added. "According to the JV agreement, the land for the project will be provided by the government of Rajasthan for solar park development, while Essel Group will implement the entire project which includes financing, technical support, operation and maintenance," Essel Group said.

Recently, the group has signed a MoU with a Chinese firm, JA Solar, for setting up a solar cell and module manufacturing company in India. It is also developing one of India's largest solar plants in Tamil Nadu, the firm added. "Solar Park Project in Rajasthan will be India's turnkey project in the renewable energy space which will aid the clean energy initiatives of the government of Rajasthan," Essel Infra and Utilities CEO Ashok Agarwal said.

Essel Group chairman Subhash Chandra had participated in the world's largest trade fair, Hannover Messe2015, and had forged alliances with five German firms to develop green energy projects and smart cities in India, Essel Group said.

"Essel Group has taken large strides in realising Prime Minister Narendra Modi's dream of setting up 100 smart cities in India.” It plans to invest over $2 billion over the next three years in transforming major cities across India," it said.

- AGRICULTURE, FISHING & RURAL DEVELOPMENT

6.1. India signs legal agreement with The World Bank for IBRD loan of US$ 400 million for Tamil Nadu Sustainable Urban Development Project

Press Information Bureau | Jun. 04, 2015

New Delhi: The Loan and Project Agreements for World Bank (IBRD) assistance of US$ 400 million for Tamil Nadu Sustainable Urban Development Project were signed between the Government of India/Government of Tamil Nadu and World Bank here yesterday. 

The Loan Agreement was signed by Shri Raj Kumar, Joint Secretary, Department of Economic Affairs, Ministry of Finance on behalf of Government of India and Mr. Onno Ruhl, Country Director, World Bank (India) on behalf of the World Bank.

The Project Agreements were signed by Shri Praveen P. Nair, Deputy Secretary, Municipal Administration and Water Supply Department, Govt. of Tamil Nadu on behalf of the State Government and Smt. 

Anita Praveen, Principal Secretary/ Chairperson and Managing Director, Tamil Nadu Urban Infrastructure Financing Services Ltd. (TNUIFSL) on behalf of TNUIFSL and Tamil Nadu Urban Development Fund. Mr. Onno Ruhl signed both Project Agreements on behalf of the World Bank.

The objective of the project is to improve urban services in participating Urban Local Bodies (ULBs) in a financially sustainable manner and to pilot improved urban management practices in selected cities. The total project size is US$ 600 million, out of which World Bank support is US$ 400 million.

The project consists of following three main components:

·         Investment in Urban Services: The project will support improvement in range of urban services, including water, sewerage, municipal solid waste, urban transportation, sewerage management and storm water drainage. The project also envisages creation of a reserve fund to provide credit enhancements for municipal bonds and other market based Loan instruments issued by ULBs.

·         Result Based Grants for Urban Governance: The project will provide results-based grants to eligible ULBs to implement new urban-management models that strengthen governance and financial sustainability.

·         Urban Sector Technical Assistance: The project will support strengthening the capacity of ULBs and urban sector officials.

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

6.2. Phase-I Smart City launch next month

Economic Times | Jun. 08, 2015

Kochi: The Smart City Kochi (SCK) project is all set for the Phase-I launch next month. The Phase-I roll out will bring into supply a total built-up area of 650,000 sft and a floor space of more than 100,000 sft. 

Kerala chief minister Oommen Chandy is expected to make the formal announcement on the launch, sources said. 

The promoters of SCK are finalising the details of Phase-II project, which is likely to be announced during the launch of Phase-I.

Jointly promoted by TECOM Investments, a subsidiary of Dubai Holding and Government of Kerala, SCK has set up an IT/ITeS special economic zone in an envisaged 13 million sft built-up area, which houses the offices of information and communication technology (ICT) sector, media, finance and research and innovation clusters. SCK is the third such undertaking by Dubai Holding after the launch of Smart City Dubai and Smart City Malta.

Slated to be the single largest provider of jobs in the state (around 90,000 direct jobs by 2020), Phase-I SCK would generate 6,000 direct jobs in the IT sector. "Construction works on the second building with a floor space of 630,000 sft would also start this year. It would generate another 6,000 - 7,000 jobs" sources told Business Standard.

Construction of infrastructure facilities in the SCK project, including roads, landscaping are progressing fast. SCK last year had received the environmental clearance for the full project.

The Union Commerce ministry had granted a single SEZ status for the entire 246 acres of land in December 2011.

With these, Kochi is all set to become a major IT hub in the country, as suggested in a recent Nasscom report. The city is already home to Infopark, which is housing nearly 120 IT majors, employing more than 30,000professionals.

"The entire project is envisaged as an integrated digital smart city. We have a smart city in Malta and have plans to start more such cities in various geographical locations. So, we could provide an efficient business network of companies," sources said.

A single-window clearance facility is in place for prospective developers, through which approvals would be given in 45 days. Special measures in place for attracting investment into SCK include developers not required to take separate environmental clearance, stamp duty exemption.

Companies can also avail many SEZ tax benefits, including 17 per cent reduction in the cost of construction. "What SCK aims is an integrated and autonomous township authority constituted by the Government of Kerala," a source added.

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

 7.1. Centre invites global bids for Rs.2,500 crore 'train sets' project

TNN | Jun. 3, 2015 | By Mahendra Singh

New Delhi: Delhi to Mumbai or Kolkata may just be an overnight journey with railways taking the first concrete step to bring about change in the way trains are run-from being driven by locomotives now, to train sets in the near future. The introduction of train sets will allow for quicker acceleration and deceleration cutting travel time significantly.

The state-run transporter has invited global players for the roughly Rs.2,500 crore project for procurement, manufacture and maintenance of 15 Electric Multiple Units (EMU) train sets (or 315 rail cars) under Prime Minister Narendra Modi's ambitious 'Make in India' programme.

After the project is implemented on the ground, it would make rail travel more comfortable and faster. Say, a Rajdhani will leave Delhi around 7.30-8.00 PM and reach Mumbai early in the morning. A source said Delhi, Mumbai and Kolkata are the possible routes to be taken up initially.

Train sets work on the same principle as the Delhi Metro or Mumbai suburban trains and use differentiated power, instead of the locomotive powering the entire 24 coaches. This helps in managing speed better. 

The transporter is looking at these trains as other alternatives such as bullet trains or running semi-high speed trains at 200kmph by upgrading tracks require much higher investment.

Introduction of the much-delayed train sets was announced by railway minister Suresh Prabhu in his 2015-16 rail budget. He has said that train sets will be manufactured in India based on the experience.

As per tender conditions, the successful bidder will be importing two train sets while the rest would have to be manufactured in the country, said an official. While 275 coaches will be manufactured in India, 40 would be imported. The transporter aims at sealing the final deal by awarding the contract by December 2015.

Officials said that the lower travel time from Mumbai to Delhi will also help railways improve their earnings from the same train as it will be extended up to Jammu given that train sets require lower maintenance time.

According to an internal study railways will be able to cut travel time by three hours and thirty five minutes on the 1,440km Delhi-Howrah route. Trains currently used for the elite Rajdhani and Shatabdi Express can go up to 150kmph, but the average speed continues to be 90kmph as there are several speed restrictions.

For instance, there are over 225 speed restrictions on the Delhi-Kolkata route, which means every 7 km, a train has to reduce its speed whenever it passes a station or an area where tracks are weak. Given that applying the brakes and slowing down or even accelerating takes longer using locomotives, the train sets will cut down time.

In other words, these trains, which are already being used in the metro services, would help to save travel time by around 20% as they have higher acceleration and deceleration which would increase average train speed. The reduction in journey time was calculated at maximum permissible speed of 130kmph and it could be further reduced if the permissible limit is raised to 160kmph.

"With a view to providing superior riding experience and about 20% savings in journey time, it is proposed to introduce a very modern train system called train sets. These are similar to bullet trains in design and can run on existing tracks without an engine to haul them," a senior railway official said.

He added, "For the Railways it would imply higher capacity, greater energy savings and increased through put. We hope that the first set of these trains would be running on our system within the next two years."

7.2. Railways to sign MoU with states for infrastructure expansion

PTI | May 30, 2015

New Delhi: Railways will sign MoU with state governments to ensure their participation in its efforts to provide better passenger amenities and upgrade infrastructure. 

"Talks are in progress with various state governments seeking their participation in railway projects. Participatory model with state governments is being finalized by the railway ministry," northern railway general manager A K Puthia said on Saturday.

The cash-strapped railway is encouraging states' involvement in laying new tracks and improving passenger amenities at stations. Puthia has already visited several states and Union territories to discuss the issue with them.

Northern railway covers many states including Uttar Pradesh, Himachal Pradesh, Jammu & Kashmir, Uttarakhand, Haryana, and Union territories of Delhi and Chandigarh. "I have already met chief secretaries of Haryana, Himachal Pradesh and Uttarakhand over the issue. I will be meeting the chief secretaries of Delhi, Chandigarh, Jammu & Kashmir and Uttar Pradesh soon," he said.

Asked about the response, Puthia said, "It is positive and states have shown interest in rail projects.” Railways has been celebrating passenger and customer facilitation fortnight since May 26, seeking suggestions from passengers for improving facilities at rail premises.

8.1. Onion exports jump 25% in two months

Business Standard | May 27, 2015

Mumbai: Onion exports have gone up 25 per cent over the past two months, after a four-month slump, because of less competition in destinations such as Sri Lanka and West Asia. Between December 2014 and March 2015, Indian onion exporters were facing tough competition from Pakistan, both in quality and prices.

Onions from Pakistan were sold in West Asia at $100 lower than the price offered by Indian exporters. Their quality was also superior to the India counterpart, adversely affected by unseasonal rainfall in December, February and March.

Rising exports have also helped spurt modal prices in the benchmark Lasalgaon market at Rs.1,175 a quintal on Tuesday as against Rs.1,000 a quintal on May 2. Also, arrivals have risen to 13,000 tonne from 10,000 tonnes in the same period under consideration. For exports also, prices have surged by $25-50 to $375 so far this month.

“But, Pakistan has run out of stock. So, overseas importers do not have any option but to accept onion from India. Despite being qualities inferior to global standard of the fair average quality (FAQ), the consignments are accepted,” said Ajit Shah, President of Horticulture Exporters Association.

Data compiled by the National Horticulture Research and Development Foundation (NHRDF) showed, India’s onion exports at 265,066 tonnes between April – May last year. Exports have been up by 20-25 per cent this year, said Shah.

In the preceding four months, however, onion exports from India remained lack lustre due to high domestic prices. Onion was selling at around Rs.25 a kg in domestic market due to reports of crop damage on unseasonal rainfalls and hailstorms.

In exports terms, therefore, India was uncompetitive. Consequently, India’s overall exports between April 2014 and February 2015 reported a decline of 30 per cent as Indian market was captured largely by Pakistan.

Data compiled by NHRDF, onion exports in the first 11-month of 2014-15 plunged to 0.97 million tonnes as against 1.26 million tonnes in the same period last year. Considering 0.11 million tonnes of export quantity of March 2014 to remain unchanged in March 2015, India’s overall onion export may hit seven-year low at 1.08 million tonnes in the financial year 2014-15.

Now, onion exports from India have rebounded as, according to trade sources, Indian exporters are offering the commodity at $60-70 a cheaper than any other originating countries including China and Iran. Consequently, India gets advantage over competition despite poor quality of product.

Due to political unrest, consignments from Yemen were also not coming into the Middle East markets. But now, market is slowly coming in track. Export from Yemen has started, of course, in negligible quantity. Exporters from China and Iran have also gradually initiated testing market pulse in Dubai and Doha.

Now, stockists have started sorting out good quality from rain soaked onion for future sale. While good quality onion gets exported, the rain soaked one is brought into the market resulting into a sudden spurt in arrivals into mandis. 

Quality of Indian onion is inferior and therefore, such onion cannot be dispatched for long distance for fear of rotting. Consequently, onion exports from India were low until the last few months,” said RP Gupta, Director, NHRDF.

Meanwhile, onion availability may become scarce in lean season of August – September ahead of ensuing kharif crop harvest. Various estimates suggest between 25-30 per cent of crop damage due to unseasonal rainfalls in February – March.

Gupta, however, believes that much would depend upon the ensuing monsoon rainfalls which would give a fair indication of sowing, crop development and harvesting.

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

8.2. India to remain major sugar producer

PTI | Jun. 7, 2015

Mumbai: India is expected to remain a major sugar producer globally and the industry is expected be a net exporter in 2015-16 marketing year, says a report. "India will continue to be a major sugar producer in the world and is expected to be a sugar surplus country for the sixth consecutive Sugar Season (SS), (which runs from October- September)."

Indian Sugar Industry (ISI) is expected be a net exporter in 2015-16, and sugar imports, if any, will be negligible," said the Care Ratings report. The average sugar recovery rate for cane (planted in both tropical and sub-tropical regions) is also expected to improve during the year.

On the consumption side, the report pointed out that strong domestic demand from soft drink manufacturers, confectioneries, hotels, bakeries and ice-cream manufacturers will support higher levels of consumption. 

"India's relatively strong economic growth, stable political situation, rising incomes, a young population, and changing consumer consumption patterns are envisaged to be the key drivers encouraging higher sugar consumption," it said.

However, the report said that sugar prices in the country are expected to remain weak due to surplus sugar stock in both domestic and global markets. It said the government's intervention will become necessary to revive the sugar industry, which has been reeling under the twin impacts of high sugarcane prices and low sales realisation on sugar leading to recurring losses by sugar mills and mounting cane arrears.

In order to boost the industry, Care said the government needs to take steps such as increasing ethanol blending, providing flexibility for use of sugarcane as feed-stocks for ethanol production, building buffer stocks, incentivising exports through higher subsidy, restructuring debt of sugar manufacturers and implementation of recommendation of the Rangarajan Committee for linking the prices of cane to actual realisation of sugar.

India produces around 300-350 million tonne sugarcane, 24-26 million tonne white sugar and 6-8 million tonne jaggery and khandsari annually. Moreover, the sugar industry produces about 2,700 million litres of alcohol, 2,300 megawatt power and multiple allied products

9.1. Pump maker WPIL buys Italian firm

TNN | May 30, 2015 | By Udit Prasanna Mukherji

Kolkata: WPIL Ltd (formerly Worthington Pump India), one of the leaders in water pumps, is in the process of completing second acquisition in three years. The Kolkata-based company which was once with B M Khaitan Group is acquiring Gruppo Aturia and its subsidiaries Pompes Rutschi SAS (France) and Rutschi Fluid AG (Switzerland) via its international subsidiary, WPIL International. WPIL also has subsidiaries in the UK, Thailand and Australia. 

According to experts, this kind of deal may be valued between Rs.175-250 crore.

Gruppo Aturia has two main divisions: Aturia (industrial pumps) and Rutschi (nuclear and special pumps). Milan-based Aturia has three facilities at Gessate (Milan), Turin and Rovigo which are focused on a comprehensive range of industrial and fire-fighting pumps. More than 70% of its business is exports across Europe/middle east and Africa.

When contacted, WPIL managing director P Agarwal confirmed the development. According to him, the revenues of Gruppo Aturia for 2015 are expected to be over 50 million Euros and WPIL's consolidated revenue for 2015-16 are expected to touch Rs.1,000 crore mark after the acquisition. However, Agarwal refused to disclose the acquisition figure.

Besides pumps, WPIL has presence in steel and sewerage. It has plants in Panihati in West Bengal and Ghaziabad in UP and has a foundry as well in Ghaziabad. Now the company has a turnover of over RS 500 crore.

In 2012, WPIL acquired the pump business of PSV South Africa, which gave it a footing in African market. Agarwal pointed out that Rutschi is the inventor of the canned motor pump and has presence in more than 100 nuclear installations across the world and is now aggressively targeting the chemical and API 685 markets. According to him, it has a major focus on pumps for nuclear submarines. It has operations in Brugg and Mulhouse. 

Elaborating the rationale for this acquisition, he said that it is based on the perfect synergistic fit of Gruppo Aturia and WPIL Group. "This would herald a period of accelerated growth for the combined entity. It is indeed a great day for WPIL!

WPIL considers this acquisition as a major step towards becoming a global pump company providing the company access to major developed markets across Europe and Middle east and strengthening its presence in Africa," he added. On Friday, WPIL stock was down 3.6% on BSE and closed at Rs.549 apiece.

9.2.  30 new cold chains to be set up

TNN | May 19, 2015

New Delhi: Amid mounting pressure to save farm produce from getting wasted due to absence of storage infrastructure, the government on Monday sanctioned proposals for setting up 30 new cold chains in the country with a total investment of over Rs.744 crore. The ministry of food processing industries will provide Rs.274.9 crore as grant-in-aid for these projects while remaining Rs.470 crore would be generated as additional investment. 

"These projects will help in a big way in reducing the wastage of food," said the food processing industries minister Harsimrat Kaur Badal said while highlighting how the 16% of the farm produce gets lost in absence of storage facilities.

A government report estimated that food products worth over Rs.44,000 crore gets lost every year in the country due to inadequate storage infrastructure. A total of 138 integrated cold chain projects were approved by the government, out of which 108 had been sanctioned earlier. Remaining 30 were sanctioned on Monday.

"Fifty-six cold chain projects have come up, while 52 remaining are in different stages of completion," Badal said. Once all these 138 cold chain projects become operational, it will add 4.76 lakh tonnes of storage capacity and 118 lakh litres per day of milk processing capacity.

10.1. Indian retail market to reach $1.3 trillion by 2020

PTI | Jun. 1, 2015

SINGAPORE: India's retail market is expected to expand and reach the market cap of $1.3 trillion by 2020.Also, the GDP is set to grow at 8 per cent over the next three years, making it the world's fastest-growing major developing market, a consultancy firm has forecast. 

The current retail sales in India is worth $925 billion and had grown at 5.8 per cent on compounded annual growth rate in 2010-2014, A T Kearney said in a report on the 2015 global retail development index.

"Consumer and investor sentiment have seen an uptick, as the pro-reform government under Prime Minister Narendra Modi sets out on an ambitious goal of improving its Ease of Doing Business ranking from 142nd to50th in the next two years," it said.

"India's retail market is expected to grow to $1.3 trillion by 2020, and GDP is expected to grow at 8 per cent over the next three years, making India the world's fastest-growing major developing market," the report said. India has risen five positions to rank 15th in the latest edition of the index, the London-based consultancy firm said. 

"India represents a good opportunity for international retailers in single-brand retail, cash-and carry, and ecommerce, as the country appears to be on the cusp of a strong growth phase over the next five years," it said.

The tipping point for brick-and-mortar retail continues to be the opening up of foreign direct investment (FDI) norms in multi-brand retail, a move that is not expected in the near-term. After two years of dormancy, Walmart will open a new outlet in Agra this year and plans to add 50 wholesale stores to its existing 20 in the next five years, the report said.

10.2. India Post inks deal to issue 1.5 crore (15 million) debit cards

TNN | Jun. 3, 2015 | By Mayur Shetty

Mumbai: India Post will soon issue debit cards to its 1.5 crore account holders with the Department of Post signing an Rs.30 crore deal with CMS Info System to supply Rupay enabled cards. The Department of Post (DOP) has over 10 crore account holders in India, and has already begun deploying ATMs across the country in a phased manner.

The personalized debit cards for DOP will be issued on the NPCI platform and their usage would initially be only on ATMs installed at DOP branches, as a closed loop environment. The cards can later be used on other ATMs with Rupay affiliation. These cards will initially be of the mag stripe variant, with the option of EMV being available to the account holders after a set period of time.

"This deal will power issuance of personalized cards to complement India Post's ATM deployment plans over a three-year period. We expect this to benefit people using teller facilities at the branches, as they can now begin to use these cards for more convenient cash withdrawals," said Mokam Singh Matta, Head of Card Business, and CMS Info System.

In addition to financial cards, CMS also personalizes Smart Cards which are being increasingly used in large scale government projects, including National ID, Rashtriya Swasthya Bima Yojana (RSBY), Mahatma Gandhi National Rural Employment Guarantee Act (MNREGA) and Employee's State Insurance Corporation (ESIC). Some of these form a critical backbone for financial inclusion projects in the country, he said.

India Post which is a large mobiliser of deposits is currently awaiting approval from Reserve Bank of India to set up the Postbank of India. The government department, which has the largest financial services distribution network across the country, is presently running a large deficit on postal services.

With traditional mail services on a decline due to electronic communication, the department is looking for opportunity in logistics and financial services. The department has already embarked on deploying core banking solutions which will make it easier for customers to get service outside their home branch.

10.3. RIL to complete projects worth Rs.2 lakh crore ($30 bn) in next 12-18 months: Mukesh Ambani

TNN | Jun. 12, 2015

Mumbai: Reliance Industries Limited will be completing projects worth Rs2 lakh crore in the next twelve to eighteen months, Chairman Mukesh Ambani said on Friday. Looking to reap full benefits of these investments from the financial year 2016-17 onwards, Ambani said RIL would have a unique portfolio of globally competitive petrochemical and refining business with a new age India-centric consumer business with very high growth potential.

"This will place Reliance in a select group of most valuable companies in the world," he said, addressing shareholders at the annual general meeting of Reliance Industries Ltd (RIL), which also operates the world's largest crude oil refining. 

The billionaire industrialist also unveiled a roadmap focused on adding capacity in core businesses and expanding rapidly in new ventures like retail and telecom.

Over a third of Ambani's more-than-one-hour-long speech was focussed on RIL's plans to use the 4G or fourth-generation telecom technology, also known as LTE or Long-Term Evolution, to offer wireless broadband as well as voice services. 

Ambani said Reliance is investing over Rs.2 lakh crore in building new facilities and creating new businesses that will come to fruition in the next 12 to 18 months. "These investments will build new capacities, strengthen our global positions, improve the return on capital and make our existing refinery and petrochemical businesses among the most competitive in the world," he said.

Ambani said Reliance's capital expenditure in 2014-15 was in excess of Rs.1,00,000 crore, the highest by any Indian company ever in a year. The firm paid Rs.18,746 crore of customs and excise duty during the year, almost 5 per cent of India's total revenues from this category. Also, it's the highest income tax payer in the private sector, paying Rs.6,124 crore.

Speaking on individual businesses, he said the eastern offshore KG-D6 oil and gas block has produced nearly 2.5 trillion cubic feet of natural gas and about 27 million barrels of crude oil since starting production six years ago, substituting over USD 34 billion of energy imports. 

Ambani said domestic E&P business "generated shareholder returns lower than the cost of capital", less than 12-16 per cent assured in other domestic infrastructure sectors such as roads, fertilizers and power. "It's important to highlight that there is value yet to be unlocked from 5-6 tcf of resources discovered at various stages of development, appraisal and approval," he said.

He added that RIL was "constructively engaged with the government to resolve legacy issues in a timely manner with regard to our rights to cost recovery, gas pricing and other issues to create value for the nation and our shareholders.

"In this context, it is important to follow the intent, purpose and commitment of the NELP Policy i.e. maximising E&P activities, getting the risk reward balance right and providing marketing and pricing freedom. This will provide predictability and certainty to investors," he said.

He hoped that the government will address policy issues in the larger interest of attracting investments in the critical E&P business. "Though E&P today may be very small in RIL's overall portfolio, it has a high latent value-creation potential. This is a potential that I am personally committed to unlock and create value for all of us, in line with the government's vision of reducing import dependence and increasing domestic production," he said.

Close on the heels of commissioning a fully automated polyester plant at Silvassa with a capacity of around 4,00,000 tonnes, RIL has brought on stream 1.15 million tonnes per annum of PTA capacity. "We will be ready for start-up of another 1.15 million tonnes per annum of PTA capacity at Dahej by October this year.

With this, our total PTA capacity will be 4.5 million tonnes per annum, making us the fifth-largest PTA producer in the world," he said. 

Also, PX plant capacity will be doubled to 4.2 million tonnes per annum by the end of the fiscal, making RIL the second-largest PX producer globally. In plastics business, it's building a 1.5 million tonnes ethylene cracker at Jamnagar which will start operations in the third quarter of the next fiscal.

Buoyed by deregulation of diesel prices, the company plans to re-enter auto fuel retailing business, Ambani said. Six years ago, RIL had shut its 1,400 petrol pumps after it could not compete with subsidised fuel sold by public sector companies. "We plan to re-commission the entire network of petroleum retail outlets by the end of 2015-16. Currently, close to 400 outlets are operational," he said.

At the Jamnagar refinery, RIL is putting up a coke gasification facility, which will convert low value petroleum coke into a clean energy source for the refinery complex. The project will be commissioned in phases starting from early 2016. 

Upon completion, the project is expected to save nearly USD 1.5 billion annually by substituting imported LNG with the gas produced by it, he said.(With inputs from PTI)

10.4.  BigBasket to tie up with 1,800 stores in private-label push

Livemint | Jun. 09, 2015

Bengaluru: Online grocery store Big Basket will tie up with about 1,800 grocery stores to sell its private-label products across categories such as vegetables, staples and bakery in a move aimed at increasing revenue four-fold and improving profitability this financial year.

The company sells fruits, vegetables, meat and bread under the brand name Fresho and staples under the Popular and Royal brands through 250 stores, apart from its website. It aims to close 2015-16 with revenue ofRs.800 crore as against Rs.210 the previous year. Retailers do not manufacture private-label products. These are made by a third-party manufacturer exclusively for a retailer.

BigBasket, which started operations in Bengaluru in December 2011, also plans to expand its private-label portfolio; typically private-label products have gross margins between a fifth to a third higher than other products. The company will launch its coffee brand on 15 June, and follow with flavoured tea and cookies. Private-label offerings account for about 35% of BigBasket’s revenue.

BigBasket’s CEO Hari Menon said his company will launch products in categories that see more repeat purchases and where it can “create a differentiation”. The big private-labels push will also entail expanding the company’s 40,000 sq. ft. Bengaluru warehouse to 75,000 sq. ft. by August.

According to retail advisory firm Technopak, Indians spend around $370 billion a year on food and groceries. Experts say private labels seem to be made for e-commerce. “Besides earning higher margins, online store scan also run promotions on private brands as they earn more on such products,” said Anand Ramanathan, director at KPMG Advisory Services.

Still, not every company has the scale to run a successful private-label business. An aggressive push on private labels may antagonize other suppliers and brands. “Until you stop selling all other brands and sell only private labels like a Marks & Spencer does, it does not add much value in the early stages,” said Harminder Sahni, managing director of advisory firm Wazir Advisors. “You also compete with other suppliers on your platform and antagonize them.”

BigBasket is present in six cities—Bengaluru, Hyderabad, Chennai, Delhi, Pune and Mumbai—and will expand to 50 more by the end of this financial year. The 50 new locations will be categorized into clusters, each comprising 5-6 cities around six central locations. Products will be transported to the clusters every day from the central locations. Co-promoted by serial entrepreneurs K. Ganesh and his wife Meena Ganesh, BigBasket is the best capitalized among all domestic online grocery stores.

The company has so far risen about Rs.370 crore from Helion Ventures, Zodius Capital, Ascent Capital and LionRock Capital in a sector that has attracted more thanRs.750 crore from investors in the past 18 months. Grofers, an app-based service, has risen more than Rs.270 crore in 2015 while ZopNow and PepperTap have raised Rs.62 crore each.

The space is expected to become even more competitive with taxi-hailing services Ola, which has risen more than Rs.3,700 crore since October last year, launching a pilot for its grocery business in early June.

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

- INDUSTRY, MANUFACTURE

11.1. 'Make in India': Ford working on plans to ship India-made EcoSport to US

Economic Times | Jun. 09, 2015

Mumbai: The automotive world's most coveted market may finally see some made-in-India cars on its roads. Ford India's popular compact sport utility vehicle EcoSport may be shipped to the US for sale starting October 2017, multiple people familiar with the process said. 

Ford has already begun work on developing a face-lifted version of the SUV for the North American markets. It has also kicked off a preliminary tendering process to source components. The request for quotation put out by Ford is for as many as 90,000 units a year, which is more than the number of vehicles it sells in India.

No US car maker has ever exported cars made in India back to its home market. If Ford gets the green signal, it will mark a historic first not only for the American car maker but also for India, which has built a robust manufacturing base for car exports thanks to investments by Hyundai, Maruti, Ford and other auto giants over the years.

Made-in-India cars have been exported to many markets, including those in Europe. India is already a key export base for Ford Motor — it ships India-made compact vehicles to Europe. Mahindra & Mahindra had plans to take a pickup version of the Scorpio to the US, but that hasn't happened. Motorcycles made by Royal Enfield and KTM, and Mahindra's tractors are sold in the US. A Ford India spokesperson said the company "would not like to comment on speculation around future product and manufacturing plans".

In a recent interview with ET, Ford Motor Chief Executive Mark Fields said he wouldn't rule out the possibility of exporting from India to the US. "In business, you never rule out from the beginning certain opportunities. But it all comes down to making sure first and foremost that wherever the product is manufactured, you want to make sure that it is high quality and meets the expectations of consumers," he had said.

THREAT FROM THAILAND: But the biggest threat to India's chances come from Ford Thailand, which too is competing for the order to supply the SUV for the US and Canadian markets. "The plan for exports to the US from Asia was there right from the start. As the company was globally restructuring operations, the clarity on whether India or Thailand was being studied," said one of the people. "It seemed that the project will go to Thailand in 2014, but now the company has begun discussions with Indian vendors to source additional US volumes from India."

Ford entered India two decades ago and has so far invested more than $2 billion (Rs.12,800 crore at current exchange rate), but is still struggling to turn profitable — it is currently sitting on accumulated losses of more than Rs.1,000 crore. As local demand didn't match expectations, it decided to export vehicles from India, starting with the Figo hatchback in 2010. Its plan was to ship 30-40% of total production, but in the past two years it exported more than half the local output. In the fiscal year ended March 31, 2015, Ford India exported 78,814 of the 1.53 lakh vehicles produced in India.

The EcoSport accounted for almost 70% of the shipments. 

ECOSPORT PRODUCTION BASE Higher utilisation of the manufacturing facility to cater to exports helped Ford India reduce its production cost per car and the company is operationally profitable now, people in the know said. 

Thanks to demand from some of the overseas markets, the unit operated the Chennai factory 24X7 for the first time in the second half of last year. Once the US volume kicks in, the plant is likely to transform into an EcoSport production base, with a small assembly base for the new Endeavour SUV and Fiesta sedan, the people said.

Rakesh Batra, partner and national leader for the auto sector at consultancy firm EY, said if the plan fructifies, it will be an important milestone for India's automotive industry. "Certainly, in Ford's global network, India may have attained the confidence of delivering cost, quality and desired volumes, as the logistic cost of shipping vehicles out of India are quite high. A sizeable volume also helps in improving capacity utilisation and thereby cost per unit, plus rupee depreciation also helps in improving competitiveness of vehicles manufactured in India," he said.

If Ford ships its vehicles to the US from India, it will give confidence to other manufacturers too to explore such opportunities, he said. Japanese two-wheeler maker Yamaha already exports India-made R15 150cc sports bike to its home market, selling it in the entry-level segment.

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

11.2.  Exports, overseas operations help auto-component makers stand out

Livemint | Jun. 10, 2015

In a year that saw most vehicle makers in India skid in terms of profitability, margins and return on capital employed, auto component makers raced ahead by targeting foreign markets, according to an analysis of key financial ratios of 117 publicly-listed auto-component companies (with a turnover of over Rs.100 crore) and eight vehicle manufacturers.

While high discounts and low volumes singed earnings at auto firms, low commodity prices coupled with revenue from overseas operations and exports helped auto ancillary firms buck the trend in an otherwise dull domestic auto market.

India exported components worth $10.2 billion in FY2014, according to the Auto Component Manufacturers Association. After declining for two years in a row, car sales in India rose 5% to 18,76,017 units in fiscal 2014-15.Sales of trucks and buses fell 2.83% while two-wheelers expanded 8%.

For auto component makers, help also came in the form of a recovery in the US, a key market, and an efficient management of working capital and costs.

Bhaskar Som, head, IRR Advisory Pvt. Ltd, a subsidiary of Fitch Solutions, said most of these companies embarked on an aggressive expansion plan before the financial crisis of 2008 and found themselves saddled with excess capacity and inefficient cost structures. But the crisis prompted many of them to cut flab and revisit their processes and systems. “They focused on improving their cost structures through the downturn,” said Som.

Cumulatively, net profit of auto component firms advanced at a brisk 23% to Rs.11,928 crore, the highest in five years, shows data from Capitaline. The fiscal year also saw operating margins expand 11.14%—the highest since fiscal 2010-11.In contrast to the ancillary suppliers, vehicle makers recorded muted growth.

During FY2015, the cumulative net profit of eight firms fell 4% to Rs.27, 399.04 crore. Their operating margins also dropped to 12.70% from13.14% a year ago. While increasing competitive intensity and depressed demand in rural markets dragged down earnings at two wheeler firms, low volumes and high selling costs nibbled into the profits of passenger vehicle makers.

Cumulative earnings at the auto component suppliers were primarily led by either those that draw a significant portion of their revenue from overseas operations or the ones for who exports are a big contributor.

Of the 117 companies, the top 20 firm contributed to 80% of the ancillary industry’s profits. The pack was led by Bosch Ltd, the local arm of the German auto component maker, which reported a net profit of Rs.1,337.65 crore in the year ending December, against Rs.887 crore a year ago.

Motherson Sumi Systems Ltd, which draws 85% of its revenue from overseas operations, saw its net profit rise 12% to Rs.862 crore in fiscal 2014-15 compared to the year before. “A sharp focus on costs helped to mitigate the slow off-take in the domestic market,” G.N. Guaba, chief financial officer at the firm, said. Softer commodity prices aided in better working capital management, he added.

Chandresh Ruparel, managing director at investment banking firm Rothschild (India) Pvt. Ltd, said the global diversification strategy adopted by Indian auto component firms helped them achieve parity with vehicle makers rather than being subservient to them.

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

11.3. Make in India: Mercedes Benz doubles India production capacity to 20k units

TNN | Jun. 11, 2015 | By Pankaj Doval

Pune: Mercedes Benz doubled its India assembly capacity to 20,000 units annually, also making India one of the first markets to make the GLA entry SUV outside of Germany. The company, which has seen a 40% growth in sales this year, has been expanding its local assembly capacity as volumes are on an overdrive on the back of new model launches and expansion of sales network. 

"India is one of the focus markets for Mercedes Benz globally, and with the addition of a new plant, we are getting future ready," company India MD & CEO Eberhard Kern told TOI here.

The plant was inaugurated by Maharashtra chief minister Devendra Fadnavis and Union environment minister Prakash Javadekar. With the addition of the GLA SUV to the assembly line, the company now makes six models locally which include C-, E-, S-Class sedans and the ML- and GL-Class SUVs. The CLA entry sedan will be added to the local assembly list later this year while the A- and B-Class models come in thereafter.

The market for luxury cars had been under pressure for the last two years as the Indian economy was passing through challenging times. However, a pick-up in economic activity and entry of newer models is adding buoyancy to demand. Kern said luxury car sales in India are expected to go up to nearly 40,000 units this year against the 33,000units sold last year. Around 32,000 units were sold in 2013.

Mercedes Benz has been leading the pack in the luxury market as it edged past Audi in the first quarter of this year (Jan-March'15), selling 3,566 cars against the 3,181 cars sold by its close rival. Compatriot BMW has been going through difficult times and is a distant third, followed by brands such as Jaguar and Rover (JLR) and Volvo.

Kern said that the company's SUV portfolio of GL- and ML-Class models has added to the demand as also the new-generation of cars such as A-, B-, CLA- and GLA-Class. "The new generation cars now account for nearly30% of our volumes as these are able to attract first-timers to the luxury segment." 

The local production of GLA SUV will also see the model's price come down by between Rs.1.5 lakh and Rs2.5 lakh. The model is currently available for Rs.32.75-36.9 lakh (ex-showroom Delhi). 

Luxury makers have been complaining about the high import duty on cars in India which goes up to as much as 170% for fully-built models.

Companies say that a reduction in the duty will enable them to sell more vehicles in India as the cars will come in cheaper. Mercedes is also boosting its brand presence and will take up its retail outlets to 80 stores by the end of this year, adding 15 new dealers. The company had sold 10,201 cars last year, a shade lower to 10,851 units sold by Audi.

12.1.  Lupin plans cancer drug unit in Mihan

The Times of India | May 25, 2015

Nagpur: Lupin Pharma plans to set up a facility to make cancer drugs at its Mihan plant. The company, which has taken 24 acres of land in the Mihan SEZ, hopes to start commercial production of its other range, mainly drugs for cardiac ailments, from June 2016 onwards.

 Even as commercial operations will begin with manufacture of cardiac drugs, there are plans to also develop a facility for making anti-cancer injections along with it. The cancer project will require an investment of Rs190crore. For the company, the facility will be the first of its kind as Lupin enters the cancer drugs market in a big way, said a source.

Lupin is focusing on generic version of drugs, so far being made by multinationals that have the patents. The patents of the drugs which Lupin plans to make have either expired or are nearing expiry. 

Once out of the patent regime, the generic version drugs will be available at much cheaper rates. The medicines made at the Mihan unit will be exported to the US, where the company finds a major market, the source said.

A majority of the patents are expected to be over by 2020, by that time even Lupin will be ready with the cancer drugs, the source said. Offering generic drugs in the US will not only help the company establish a market share but also bring a major change in the market, said the source. The company has already identified drugs with research and development underway for the anti-cancer injections.

In Nagpur unit, the exhibit batches will be made to be submitted for getting an approval from the USFDA. The construction of the cancer drug facility is expected to be completed by June 2016. By this time, Lupin hopes to start commercial production of other drugs also. However, the commercial production of anti-cancer drugs may take 3-4 years, said the source.

Meanwhile, Lupin has submitted a proposal before the board of approvals (BOA) for ratifying the department of commerce's decision to extend the letter of permission (LoP) for its Mihan plant. The earlier LoP, through which benefits of a SEZ are availed, expired on April 22 2015, was extended till April2016 by the department of commerce. The BoA is also a part of the ministry of commerce, which governs SEZs.

The company has cited time taken for getting approvals from regulatory authorities as the reason for delay in implementing the project. Apart from USFDA, Lupin has moved an application for 50 other products before the food and drugs authorities of various countries.

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

12.2. Guwahati could emerge as pharma hub for South East Asia

Business Standard | June 01, 2015 | By Ananth Kumar

Guwahati: Guwahati could soon emerge as the pharmaceutical hub for South East Asia, said Union minister for chemicals and fertilisers, Ananth Kumar, here today while laying the foundation stone of the permanent campus of the seventh National Institute of Pharmaceutical Education and Research (NIPER), to be set up at Changsari near Guwahati. 

To be spread across 89 acres of land, the first phase of construction, amounting to Rs.160 crore, has started from today and that the total project cost would be to the tune of Rs.550 crore.

"Guwahati can be a pharmaceutical hub for entire South East Asia, and the seed for this to happen have been sown today. It would also become a hub for integrated medicine ensuring holistic care and treatment," said Kumar.

NIPER Guwahati campus would have the second largest campus after NIPER Mohali. Kumar said Guwahati could be the first of the 10 proposed 'Pharma Parks' that are being envisaged by the Central government across India. The Indian pharmaceutical industry has an annual turnover of Rs.2 lakh crore and is estimated to grow at a rate of 15-20 per cent over the next 10 years.

The Union minister said that he had reviewed the functioning of NIPER, Brahmaputra Valley Fertiliser Corporation Limited (BVFCL) at Namrup and Assam Gas Cracker Project and that his ministry would extend all possible support towards these projects.

"If someone feels nothing is happening, we are only a phone call away," said Kumar, assuring Assam chief minister Tarun Gogoi that he would personally take up with the concerned ministries for expediting the early completion of National Institute of Design (NID) and the Rajiv Gandhi Institute of Petroleum Technology (RGIPT) in Assam. Gogoi had urged the Centre to expedite the process for permanent campuses of NID and National Institute of Fashion Technology (NIFT) in the State.

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

13.1. Top Gear: Daimler inaugurates bus manufacturing plant near Chennai

TNN | May 28, 2015

Chennai: Daimler India Commercial Vehicles (DICV), desi arm of Daimler, the world's largest commercial vehicles company, has rolled out the first of its Indian-made buses from its plant in Oragadam, near here. The Oragadam plant was set up at an investment of Rs.425 crore. Along with the roll-out of buses, DICV also rolled out high powered engine trucks and heavy duty tractor trailers.

"With the opening of bus plant, DICV is expanding its business and becomes a full-fledged commercial vehicle manufacturer in Indian market," said Daimler Trucks and Buses, member of board of management, Wolfgang Bernhard. The facility located within the existing premises of DICV will manufacture and assemble buses under both Mercedes Benz and Bharat Benz brand names.

While Mercedes Benz buses will be in the luxury segment, Bharat Benz will be made for commuter and school bus segments. DICV also entered the mining segment with its new range of "Bharat Benz 3143" trucks.

"With Wednesday's launch, we take the business to the next level where we have become a full-fledged commercial vehicle maker," Bernhard said. The company said its localization levels on products were more than 85%. 

The capacity of the plant would be 1,500 units initially which can be expanded to 4,000 units depending on market needs. Wright Bus of Ireland has been appointed as partners for the bus project. "We grew (year-on-year) 14% in the first quarter of this year (January-March 2015) and expect good growth in volume from Q3onwards (July 2015 onwards)," Bernhard said.

The company has sold more than 20,000 Bharat Benz ranges of trucks while it shipped over 2,000 units from Chennai. Daimler Trucks Asia Head, Marc Llistosella said that export of buses would begin soon. "After July, we'll export left-side driven buses manufactured in Chennai plant to Gulf countries, and after October we'll export to South America."

13.2. Daimler Trucks to make India its export hub: Marc Llistosella

Economic Times | June 04, 2015

New Delhi: Marc Llistosella, who took over as head of Daimler Trucks Asia on April 1, is planning a major emerging market push for the world's largest truck maker, with India at the centre of it. With volumes in evolved markets expected to grow in low single digits, Daimler looks to grow its Asia Pacific volumes by 50%in the next five years, with India accounting for half of that, says the flamboyant former MD of Daimler India Commercial Vehicle.

In an interview to ET's Ketan Thakkar, Llistosella, 47, also said Daimler is looking at achieving a break-even in its Indian operation in the next few years and increasing its share in the Indian truck market to 15-20%.

Edited excerpts:

What is your view on the performance of Daimler Trucks' Indian operations?

We have done a relatively good marketing job. We have sold 22,325 units till today and that is good, as nobody has ever reached this kind of sales number in such a short span of time. We are already number three in the heavy duty truck segment. So India is significant and now very well exposed in Daimler world.

So, what's the expectation that you have for India in terms of numbers?

 Our plan is clear -we want Daimler Trucks Asia, which sold 185,000 units (both Daimler India and Mitsubishi Fuso Japan) in 2014, to grow 50% in the coming five years. Half of that growth will come from India in the next five years. That incremental volume growth does not come from domestic volume alone, but it has a significant export volumes. Now we also have a Fuso network to sell bigger trucks across South East Asia, the Middle East and Africa.

Currently, we are doing light duty trucks in Asia. With Fuso, we need this new range of higher horsepower trucks from India to have a bigger say in the heavy duty truck space in Indonesia, Thailand, in Africa, Kenya as Fuso. It will be a shift from a very much light duty company to a balanced full range truck maker for Fuso.

So it is a very strategic direction for both Fuso and for Daimler India Commercial Vehicle. This higher horsepower heavy-duty truck range will be a game changer for domestic market too.

What is your expectation in terms of market share in India?

Domestic operation is doing well -the cost is under control and we are getting stabilised. In the south of India, we have a market share of roughly 16%. We are gradually expanding upwards in north to Maharashtra, Gujarat, and Rajasthan. In Kerala, we have a market share of 40% in 9 tonnes plus market, in Karnataka; we have a market share of roughly 18-20%, so when it is working in Karnataka and Tamil Nadu, why should it not work in other states?

What we are doing in the south, we have to do in the west and other parts of the country. The competition will be tough, but we are confident of increasing our footprint state by state. I expect a pan-India rollout by the second and third quarter of 2017. And I want to see a market share of 15-20% of south in the whole of India.

A German company running Asian office headquartered in Japan, with India as a key export base - how can you make it work?

The exposure of India will increase in terms of people. We have a lot of people coming to Japan, these guys are young, capable, connected, and they can live in California, London and even in Tokyo. They are very adaptable.

By having close link to Japan, we can see the Fuso brand grow. For our Japanese colleagues, it is a challenge and a chance. They can open up to this new India of today, which is on the move. The dynamism of India needs to be channelized with the structured approach of Japanese. If you bring this together, you will see this operation explode.

When do you see your plant in Oragadam near Chennai getting completely utilised?

Probably in another two to two and a half years. We had a capacity to make 36,000 trucks, and we have improved it to 44,000 units without any investment. It depends on the market, but we are hopeful of doing 50,000 units in the next few years.

What role would exports play in your India production?

We expect 25% of production going towards the exports. If the markets in the Middle East pick up, with Fuso we have a brand and a network. Our Benz is known here. I expect much more than 25-30% of buses produced in India to go for exports.

How far is Daimler Trucks Asia from profitability or breakeven point?

In this heavy asset business, it is not possible to make profits in the first few years. Even as the market has fallen, we are on the plan in terms of fixed cost coverage, breakeven and profits. We expect operational breakeven in the third or fourth quarter of 2016-17 and are hopeful of a full year profit to happen in the next few years, it will happen.

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

13.3. Volkswagen delivers 300,000th car in India, inaugurates new dealership in Coimbatore

TNN | May 30, 2015 | By M Allirajan

Coimbatore: Volkswagen, Europe's leading car manufacturer, has announced the delivery of its 300,000thcar in India. The milestone was achieved at the inauguration of Volkswagen's new 3S (Sales, Service and Spares) dealership in the city on Friday. This further strengthens the company's dealer network which now comprises 118 showrooms across 100cities in India.

The new dealership, Volkswagen Coimbatore, is a full-fledged 3S facility with a capacity to display up to eight cars at the shop floor and a 43-day workshop. The 300,000th car, a Volkswagen Polo GT TSI, was delivered by Volkswagen Coimbatore to Dr S. Krishna Kishore, head, cardiothoracic department, Royal Care Super Speciality Hospital, Coimbatore.

With a 18% increase in sales reported for the month of April 2015 (on year-on-year basis), and a series of new launches lined up for the next 24 months, Volkswagen India said it is optimistic about continuing with its growth momentum in the Indian market. "We believe this milestone marks the beginning of the next big growth chapter for Volkswagen in India," said Thierry Lespiaucq, managing director, Volkswagen Group Sales India.

"We have great appreciation for the confidence that our customers have in our cars, and we will continue to provide the safest, best-built and the most dynamically satisfying cars to customers," he said. “Volkswagen, which has a 4.7% market share in Coimbatore, is looking to further grow its presence in south India”, senior officials said.

14.1. Increased transparency will encourage global players to do business in India: Banmali Agrawala, GE South Asia head Himangshu Watts

ET Bureau | May 29, 2015

New Delhi: Foreign companies are enthused by the increased transparency and openness in the system, making them more optimistic about doing business in India, the South Asia head of GE said. GE itself is upbeat about the pace of work in the railways, oil, gas and renewable energy sectors, where it sees heightened activity led by state enterprises and progress in government orders for equipment, but it expects more progress in the power sector, Banmali Agrawala, president and CEO for GE South Asia, told ET in an interview.

"I feel better ... with transparency and openness in the system. You at least are sure you will not be short changed. This should provide encouragement for global players. The mindshare within GE, in terms of what is happening in India, is more upbeat now," he said.

GE, which has operated in India for more than a century, expects to grow two to three times the rate of GDP growth, something it hasn't achieved in the country in recent years. He said that in some countries, international companies had done well with negotiated deals with governments after thrashing out various issues with the authorities. "But in a democracy, transparency and openness is the order of the day. I'd much rather have this and compete on the basis of technology," he said.

Agrawala said GE was encouraged by the progress in the railway ministry led by Suresh Prabhu. The ministry was sorting out various issues and had moved well in a large tender for 1,000 locomotives over10 years. He said the oil and gas sector, particularly the exploration efforts of state-run Oil and Natural Gas Corporation (ONGC), has made good progress under the new government.

"I hope they will continue down this path. The government should take advantage of the fall in international prices of oil," he said, referring to the decline in costs of oilfield equipment and services, which usually follows the decline in oil prices as global companies cut capital expenditure. Among GE's areas of business, power sector has still not turned around, he said.

The sector's key issue was the poor health of the state electricity boards, which were reporting huge losses, he said. Sector experts say that the losses of state utilities are a big bottleneck because they often prefer to cut supplies to reduce losses. 

This leads to a situation where consumers face blackouts while power plants have surplus capacity because the intermediary is inefficient and financially insolvent. "I would have liked to see more movement in the power sector. The fundamental challenge is the state electricity boards. Some solution has to be found.

We may give coal, fuel and all that, but how do you address the issue of the SEBs?

Something dramatic needs to be done," he said. He said foreign firms would be willing to invest in India's power sector, but for this to happen the key problems of the sector would have to be sorted out. He said there was no dearth of investible funds in the world, and the Indian power sector could be a good destination if the key issues were addressed.

Agrawala also said that the government was responsive and communicative although it preferred meetings with industry platforms, not individual companies. He said GE had raised issues with the government, and it has always received replies to its letters from the authorities.

14.2. Mobile phone manufacturing hub to come up in Hyderabad

Business Standard | Jun. 03, 2015

Hyderabad: A group of mobile phone manufacturers have come forward to set up a manufacturing hub in the city. A delegation of senior executives from mobile phone manufacturing companies headed by Indian Cellular Association president Pankaj Mohindroo met Telangana chief minister K Chandrashekhar Rao on Tuesday after visiting a proposed site on the outskirts of the city.

According to the chief minister's office, Rao has sought a detailed project report with a list of requirements apart from land so that the government can provide infrastructure and other support. The project is expected to generate 1,50,000 -2,00,000 jobs.

Karbonn Mobiles Chairman Sudhir Hasija, Foxconn India managing director Josh Foulger and Celkon managing director Y Guru, among others, were present in the meeting. “The state government and the companies have entered into a broad understanding to set up the country's first mobile phone manufacturing hub in Hyderabad," the chief minister's office said in a statement.

Government aims to double IT exports by 2019The Telangana government is in the process of finalising a fresh information technology (IT) policy, with initiatives to tap new areas of technology while aiming to double IT exports to Rs.1.2 lakh crore by 2019.

Releasing a report on the Hyderabad IT sector performance on Tuesday, state IT minister K T Rama Rao said the government would tap investments into new areas including data analytics, cyber security, photonics, internet of things and drones among other things. The government is also working on promoting the electronic hardware clusters by attracting mobile phone manufacturers, solar panel and chip makers to set up their operations in the state, he said.

The government would develop IT clusters in several places around the city in addition to the existing hubs, according to him. The IT sector exports grew 15.7 per cent at Rs.66,276 crore from Hyderabad in 2014-15 against Rs.57,258 crore in the previous year. About 48,000 new jobs were created during the period, according to the report.

Explaining about the future initiatives, the minister said Hyderabad would be developed as a start-up hub of the country while taping the venture capital and knowledge resources of the Silicon Valley in the United States of America. The government would start the country's largest start-up incubator in the next 15-20 days in the presence of Union IT minister Ravi Shankar Prasad, he said.

Some of the major initiatives undertook by the IT department in the first one year include, creation of two electronic manufacturing clusters of 900 acres each, formation of T-Hub-an incubation facility with a total built up area of 3 million square feet and making 60,000 square feet operational this month, launching of Telangana Academy of Skills and Knowledge (TASK) with an aim to make college phase-outs employable, according to the officials.

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

15.1. India, other emerging markets to drive $5 tn. aircraft demand

PTI | Jun. 16, 2015

Paris: Growing passenger traffic in India and other emerging markets would help generate aircraft demand worth about US $ 5 trillion in 20 years and the fleet across aviation industry would more than double by 2034,Airbus said on Tuesday.

The domestic traffic flow in India alone is estimated to grow nearly 6 times in this period, making it one of the fastest growing markets globally, even as a survey by Airbus has identified Mumbai and Delhi airports among the largely congested ones across the world.

Releasing its Global Markets Forecast here at the 51st Paris International Air Show, Airbus said that "from the world's first commercial flight in 1914, to today's 32 million flights annually, aviation has become part and parcel of our everyday lives.  "With some three billion air passengers, and 50 million tonnes of freight carried every year by planes, it is estimated that aviation contributes USD 2.4 trillion annually to global GDP".

In the next 20 years, global passenger traffic will grow at an average 4.6 per cent a year, driving a need for some 32,600 new aircraft above 100 seats (31,800 passenger and 800 freighters greater than 10 tonnes) worth USD 4.9 trillion, it said. "By 2034, passenger and freighter fleets will more than double from today's 19,000 aircraft to 38,500. Some 13,100 passengers and freighter aircraft will be replaced with more fuel efficient types," Airbus said.

Emerging economies which collectively account for six billion people are the real engines of worldwide traffic growth. They will grow at 5.8 per cent a year compared to more advanced economies, like those in Western Europe or North America, which are forecast to grow collectively at 3.8 per cent.

Emerging economies also account for 31 per cent of worldwide private consumption which will rise to 43 per cent by 2034.

"Economic growth rates in emerging economies such as China, India, Middle East, Africa and Latin America will exceed the world average. A knock on effect is that middle classes will double to almost 5 billion people," Airbus said. The tendency to travel by air is increasing, it said, adding that in emerging economies, 25 per cent of the population take one trip per year, and this will increase sharply to 74 per cent by 2034.

In advanced economies, such as North America, the tendency to travel will exceed two trips per year. "Asia-Pacific will lead in world traffic by 2034 and China will be the world's biggest aviation market within 10 years, and clearly Asia and emerging markets are the catalyst for strong air traffic growth," said John Leahy, Airbus Chief Operating Officer, and Customers.

15.2. Air India MRO (maintenance, repair and overhaul) at Hyderabad airport takes off

TNN | May 30, 2015

Hyderabad: Air India Engineering Services Limited (AIESL), a wholly-owned subsidiary of Air India, on Friday launched its maintenance, repair and overhaul (MRO) facility at the Rajiv Gandhi international Airport at Hyderabad.

The MRO facility, which was inaugurated by Union civil aviation minister Ashok Gajapati Raju, has been developed at an investment of Rs.79.20 crore and will employ over 500 people. The facility, spread over 5acres, has a built-up area of 2.8 lakh sft comprises of the hanger, workshop and administrative building, among others. 

The unit will be able to accommodate two narrow bodied and one wide-bodied aircraft. Air India already operates an MRO facility at Thiruvananthapuram and is slated to open its next MRO unit at Nagpur this week.

The Nagpur MRO facility has been developed in collaboration with Boeing and the unit has been set up at an investment of over Rs.600 crore. AIESL already has 25 clients and is in talks with several other airline operators, who currently have to go abroad to avail of MRO facilities, said AIESL chief executive officer HR Jagannath.

Jagannath urged the Union civil aviation minister to rationalize taxes such as service tax and VAT as well as custom duties for helping the MRO business grow in India, to which Raju responded positively and said the finance ministry is examining the proposals made by the industry.

According to industry estimates, the size of the MRO industry in India is around $700 million and a major chunk of airlines operating in India send their planes for MRO work to places like Sri Lanka, Singapore and Dubai as the taxes there are either nil or low, resulting in lower costs.

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

16.1. Doctors at Mumbai's Tata Memorial Hospital find way to reduce risk of oral cancer

Times of India | Jun. 04, 2015

Mumbai: Tata Memorial Hospital, the cancer hub in Parel, announced a breakthrough on Tuesday that could not only reduce the risk of death for oral cancer patients by 36% but also prevent recurrence of the disease by 55%.

The innovation is an 'extra cut' - a dissection in medical parlance - along the neck to detect if the patient's cancer had spread from his/her oral cavity to the neck. The cut would be a prophylaxis - a preventive medicine - against aggressive cancer forms and prevent the need for chemotherapy or radiation.

The findings were announced by Tata Memorial Centre's Dr Anil D'Cruz at an on-going meeting of American Society of Clinical Oncology at Chicago on May 31. The findings were also published in the latest edition of New England Journal of Medicine.

The study assumes significance because India carries the highest burden of oral cancer in the world, with around 1 lakh new patients detected every year. It is the most common cancer among Indian men and third most common among Indian women. Worse, almost half of them die within 12 months of diagnosis, because of the delay in seeking treatment.

At a press conference held in the Parel hospital on Tuesday, one of the other investigators Dr Pankaj Chaturvedi said, "When a patient comes with a lesion in his oral cavity, be it his\her tongue or jaw bone, it's not possible to say whether the cancer has progressed beyond to the neck region. This is especially in the early stages of oral cancer.'' 

At present, patients may choose to not undergo neck dissection and wait until some cancerous bulge - basically, a recurrence - appears in his/her neck. It has been one of medicine's long standing ethical debate on whether or not early stage oral cancer patients should undergo a neck dissection.

On one hand, the dissection is a delicate operation because the cut is made near important nerves (for facial expression and spine), veins and arteries running along the neck. On the other hand, if patients choose to not undergo a neck dissection, they may be at the risk of not diagnosing the cancer's complete spread early enough. This could impact their quality of life and, more importantly, their survival. "

But this research has put an end to this debate. Neck detection can save more lives. All it requires is 30minutes extra on the operation table,'' added Dr Chaturvedi. Dr Richa Vaish, another researcher in the study, said that one death could be prevented for every eight patients who undergo a neck dissection.

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

16.2. George & Thomas Kurian - identical twins, identical super-success: 

TNN | Jun. 3, 2015 | By Sujit John & Shilpa Phadnis

Bengaluru: George Kurian, who grew up in Bengaluru, has just been appointed CEO of the $6-billion; US based computer storage and data management company NetApp. As remarkable as that is, the more remarkable part of this story is the near identical journeys that George and his twin brother Thomas Kurian, president of Oracle, have had.

They are said to have been identical twins. Both grew up in Bengaluru, studied together at the St Joseph's Boys High School, and both got into IIT Madras. Both left IIT within six months when they got admission into Princeton University. 

Singapore-based entrepreneur Varun Chandran, who has worked for NetApp and Oracle, writes in his blog: "Thomas graduated in BA electrical engineering with ''summa cum laude'' (highest distinction).

In the second place was his twin brother George. "Both then had highly successful corporate careers. Now, George is CEO of NetApp, just six months after Thomas was appointed president of Oracle responsible for software development, making him then the single most senior executive in the company after co-CEOs Safra Catz and Mark Hurd. 

The twins hail from a family in Pampady in Kottayam district in Kerala. Their father was the general manager of Graphite India in Bengaluru, news agency IANS had reported in January following Thomas' appointment as president in Oracle. George joined NetApp in 2011.

Prior to that, he was VP and GM of the application networking and switching technology group at Cisco. Prior to Cisco, he was with Akamai Technologies, he was a management consultant with McKinsey and Co, and he led software engineering and product management teams at Oracle. George now replaces Tom Georgens as CEO; Georgens has been CEO since 2009.

On a visit to Bengaluru last year, where NetApp has 2,000 of its 12,500 employees, George spoke exclusively to TOI where he was "most excited by the people and the innovations that we bring to market being led out of India." He noted that two of the company's most important technologies - the storage efficiency technology portfolio and the multi-tenant capabilities offered to service providers - were both developed and led out of Bangalore.

He said NetApp's India operations were the cornerstone of its APac business. On George's appointment, NetApp said: "...we have the utmost confidence in George's ability to lead the company, given his deep knowledge of NetApp and support from a strong executive team. George has deep relationships with customers and partners globally and is committed to strengthening those relationships going forward.

"When Thomas Kurian was appointed president at Oracle, Chairman Larry Ellison wrote in an email to employees: "He (Thomas Kurian) has a long track record of developing suites of software products that go to achieve pre-eminent success in the marketplace." It can't get more identical than this.

17.1. Google to invest Rs.1,500 crore ($235 million) in new Hyderabad campus; focus on three key projects

The Economic Times | May 26, 2015

Kolkata: Google, owner of the world's largest search engine, is investing Rs.1,500 crore in a new campus in Hyderabad, reckoned to be its biggest outside the US. The search giant plans to "focus on three key projects from its upcoming Hyderabad campus, including its super-fast Google Fibre broadband services, Street View and Google Education", Telengana's IT secretary Jayesh Ranjan told ET.

"Google Inc. will shortly depute internal teams for driving all three activities from Telangana where it plans to build a new campus that will house some 13,000 staff," said Ranjan, adding that Google planned to "invest Rs1,500 crore in the campus rollout over the next four years for its growing local team". 

Ranjan was a key member of a top-level Telangana government delegation that recently visited Google Inc.’s Mountain View, California, operations on May 11 and interacted with several global product teams.

The delegation was led by Telangana's IT minister KT Rama Rao, and included Sujai Karampuri, director (electronics) and Amarnath Reddy Atmakuri, Chief Relations Officer. 

A Google spokesman confirmed these discussions, saying the "company is delighted to be collaborating with the government of Telangana on growing its presence there, while also exploring ways to contribute to their efforts to become a model digital state".

Google, however, declined to reveal its Hyderabad campus rollout investment details or its upcoming activities there. "On the campus side, it is still very early days, so we don't have all the details, but will share more as our plans come together," the company spokesman said in an emailed response to ET's queries.

But contrary to the Telangana government's claims, Google said, "It has no immediate plans to expand Google Fibre to India as it is still busy growing its presence in a number of US cities". Telangana's IT secretary Ranjan, however, maintained that Google would "shortly send an internal team to examine the pros and cons of rolling out its high-speed fibre broadband services in both urban and rural homes across the state".

Another person aware of the discussions between the company and the Telangana government said Google's internal team would examine the existing fibre topography of key cities and towns in Telangana and also explore infrastructure-sharing options since leveraging existing infrastructure would cut Greenfield fibre broadband deployment costs for delivering affordable fibre-to-the-home (FTTH) services.

If implemented, Google's Fibre project could transform the home broadband scene in Telangana. Till recently, Google's ultra-fast fibre-based internet service was only available in Kansas City, but it is now being tested for rollout in other US cities such as Austin, Atlanta, Charlotte, Nashville, Provo, Raleigh-Durham, and Salt Lake City, along with 34 other cities.

On bringing 'Street View' to India, the Google spokesman said the company "hoped to continue adding places to Street View in Google Maps for people to explore and enjoy as we look forward to building the most accurate, useful and comprehensive map of the world". Over a year ago, analysts at Forrester Research had told this newspaper that Street View is an add-on service for Google Maps, which helps the search giant to differentiate in the maps marketplace and also in brand building.

They had also said Google's Street View enables the company to get a bigger share of a user's time, which in turn, presents more online advertising opportunities for Google. Google declined to comment on its plans to ring in its education initiative in Telangana. But according to the company's website, the search giant has developed a host of "easy tools, apps and solutions built for teachers and students on any device," regardless of school size or budget.

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

17.2. Microsoft sets up 3 data centres in India

Business Standard | Jun. 05, 2015

Bengaluru: Microsoft on Thursday said it had set up three data centres in this country. With these, the Redmond-headquartered software major expects to be better equipped to target sensitive sectors like government and financial services, where there is always fear on data privacy. Every year, Microsoft invests around $5 billion in setting up data centres and towards their operations. The centres have the ability to scale up further without much of physical expansion.

Microsoft intends to host its Azure (its cloud platform), Office 365 and CRM Online out of these centres. The company said starting next month, customers will be able to participate in the private preview of Microsoft Azure from its India data centres. The private preview is expected to introduce about 150 customers to run trials of their apps on Microsoft Azure, to start with, from local infrastructure. This will be followed by the private preview of Office 365 and CRM Online.

Commercial cloud services from the local data centres are expected to go live by the end of 2015. “The growing interest in the cloud space from India, coupled with the huge potential for cloud services in the country, drove us to open these data centres at two distinct locations here,” said Scott Guthrie, executive vice president, Microsoft Cloud and Enterprise Group.

“Services from local data centres will open infinite computing capacity for Indian government departments, BFSI (banking, financial services and insurance), health care and manufacturing sectors.” The availability of local data centres is expected to scale up public and hybrid cloud adoption in India, especially with more and more start-ups. Githrie said the data stored in these data centres would not be taken out of the country. The company is already working with the government in cloud space and the Digital India campaign.

According to Microsoft, its cloud services in India have doubled in revenue the past financial year. 

THE ROAD MAP:

·         Microsoft to host Azure cloud platform, Office 365 and CRM Online out of these centres

·         From July, customers will be able to participate in the private preview of Azure from the centres

·         The data stored in these data centres will not be taken out of the country

·         Preview would introduce 150 customers to run trials of their apps on Azure, from local infrastructure

·         This will be followed by the private preview of Office 365 and CRM online

·         Commercial cloud services from the centres are expected to go live by the end of 2015

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

17.3. Cisco’s outgoing CEO Chambers asks IT companies to bet on India

Livemint | Jun. 10, 2015

San Diego: Asking IT companies from across the world to bet on India, technology giant Cisco’s outgoing CEO John Chambers on Tuesday said Prime Minister Narendra Modi has got it “right” with his ‘digital India’ thrust. Digitalisation will help create millions of jobs and enhance standard of living of people, he said.

“(Prime Minister Narendra) Modi in India gets this. If you are going to bet on emerging country, bet on India,” he said while addressing a huge gathering of IT professionals and other experts during his last keynote address at Cisco Live 2015 event in San Diego.

“I mean, they (India) know this is their chance to get this inflection point and blow ahead of all their peers as well as create jobs for...millions. They can change dramatically their standard of living,” he added. Chambers said he would soon visit India. “Chuck and I will be India in a week and a half...,” he said.

Chuck Robbins is the incoming CEO. Leaders in countries such as India know how digitisation would transform their country and create a competitive environment for the future, he said. The digital world would help in creating more jobs, boost growth, improve healthcare systems, increase innovation and improve education among other benefits, he added.

Networking giant Cisco is betting big on India buoyed by strong performance in the Indian market. The company, which gets about 2% of its global revenues from India, expects the contribution to grow in the coming years. Cisco employs over 10,000 people in India across cities such as Bangalore, Delhi-NCR, Mumbai, Chennai, Kolkata, Pune and Hyderabad. Of these, 8,000 people are part of the R&D setup.

Chambers had earlier expressed optimism about Modi’s leadership in steering growth in the world’s second most populous market. The government had last year approved an umbrella programme Digital India comprising various projects worth about Rs.1 trillion (about $15.6 billion) to transform the country into a digitally empowered knowledge economy.

The programme includes projects that aim to ensure that government services are available to citizens electronically and people get benefit of the latest information and communication technology.

The vision of government under ‘digital India’ project includes creation of ICT infrastructure such as high speed Internet at gram panchayat level, on demand availability of government services like health, education etc., and digital empowerment of citizens specially through digital literacy.

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

18.1. Royal Orchid targets 50 hotels in two years

Business Standard | May 25, 2015

Bengaluru: Bengaluru-based Royal Orchid Hotels is planning to expand its network to around 50 hotels in two years. The group, which operates 28 hotels, is set to add 8-10 hotels in India and abroad in the next one year, according to a senior company executive.

“We own 10 hotels and operate another 18 through management contracts. We are looking at only the management contract option to expand,” said Chander K Baljee, Chairman and Managing Director, Royal Orchid Hotels.

Having a strong presence in the south, the company is looking at expanding its network in the north and west. The company is in talks with property developers and land owners to take up new hotels under management contract in cities like Amritsar, Dehradun, Gurgaon, Jaipur, Haridwar, Mumbai and New Delhi. It was also exploring options in African countries like Kenya, Baljee said. 

"We have recently opened an office in Delhi and appointed a vice-president for sales who will take care of our operations in the north, where we want to expand rapidly. There is a vast scope for operating smaller hotels in these cities and we want to concentrate on them," Baljee said.

In the next two years, Royal Orchid plans to almost double its room strength from the present 2,500. It is aiming at adding around 1,000 rooms each in 2015-16 and 2016-17. Royal Orchid, which has managed to trim its debt in excess of Rs.300 crore by selling off its property in Hyderabad, is now concentrating on only management contracts. Its current debt levels were in the range of Rs.39 crore, Baljee said.

He said the company was also in talks with its joint venture partner Amartara to buy out the stalled property at Powai in Mumbai. It had formed a joint venture to develop a hotel on 1.15 acres of land. But the project has stopped mid-way as the partner wanted to pull out. 

“Our partner wants to sell the land we own jointly. We are in talks to either buy out the entire land or sell it altogether. We are working out various options,” Baljee said. Royal Orchid has already sunk Rs.35 crore in this project.

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

19.1. Make in India: Ford may invest Rs.5,000 crore in Chennai R&D centre

ET Bureau | May 25, 2015 | By Ketan Thakkar

Mumbai: US automobile giant Ford Motor Company has decided to invest another Rs.4,000 to Rs.5000 crore in an R&D centre in Chennai, after investing a billion dollar in a second plant in Sanand, Gujarat, said people familiar with the development.

This development comes 10 months after its Global CEO Mark Fields promised Prime Minister Narendra Modi that he will do his bit for the government's Make in India campaign. In an exclusive interview with ET recently, Fields had expressed interest in increasing the product development capability in the country. 

"There's a tremendous engineering talent here, and we want to tap into that and grow our product development capability here methodically over a period of time," Fields had said.

When contacted, a Ford India spokesperson said, "As for future projects and investment, we have nothing to announce.” With this fresh investment, Ford India will be increasing its investment in the country by almost 50% of its cumulative investment so far. ET has learnt that the announcement on the Chennai R&D centre is likely to be made in the second half of this year, and the agreement with the Tamil Nadu government is expected to be signed in the next few months.

People close to the company said the development of new B500 project, which will spawn a new mid-size segment sedan to take on the Honda City somewhere around 2018, will be the first project on which Indian R&D base will play an important design, development and engineering role. The B500 project may eventually also spawn out an MPV in the future.

The new Indian product development centre will be one of the largest R&D bases in the Asia-Pacific region for the maker of the iconic Mustang and Lincoln cars and it is going to be linked to the Ford's Global Product Development Ecosystem, wherein engineers in India will offer key inputs for products not only meant for India but for global markets too.

Experts said the local product development will drive localisation further and help the company reduce cost by reducing the dependency of imports. With a huge talent pool of skilled engineering workforce, India can become an important development hub for Ford India. 

Its rivals such as Maruti Suzuki, Hyundai Motor India, and Renault Nissan already have sizeable development hubs, not only serving the local markets, but also contributing to the global markets as well.

Post the establishment of the local R&D base, the company's Ford Technology Services India and Ford Global Business Service operation, which has over 10,000 workforces, will merge into a common organization. Gaurav Vangaal, senior analyst, forecasting at IHS Automotive, said it isn't a surprise, as the product development cost in India is almost half, if not one-third, when compared to some of the evolved markets.

"With pressure on profitability, achieving faster break-even on projects has become critical for MNC's, the headquarters know while setting up the R&D infrastructure in the country is a capital intensive activity, but the rewards are multi-fold in the long run. With product life cycle shortening, local R&D not only helps in coming out with new products faster that too at a lower cost led by Indian frugality and the value innovation for India can be easily shared with the global markets too," says Vangaal.

With more than $2 billion investment in India, Ford currently employs over 14,000 people across its two plants in Sanand and Chennai, and some of its Global Services Business operations in Coimbatore and Gurgaon.

19.2. Exxon to set up $500m centre in Bengaluru

TNN | May 28, 2015 | By Sujit John & Shilpa Phadnis

Bengaluru: Exxon Mobil, one of the world's biggest companies, is making a massive $400-500 million (Rs.2,500 crore – Rs.3,150 crore) investment in Bengaluru to establish a technical and business support services centre, multiple sources told TOI.

The move comes at a time when international oil prices have plunged, putting enormous pressure on oil majors to cut costs. The sources told TOI that an additional investment of several hundred million dollars is being considered to establish a technology and R&D centre in India.

The oil & gas major, with a turnover of $412 billion last year, is the second biggest US Company by revenue, after Wal-Mart. It's variously estimated to be the fifth or sixth biggest company in the world. The Bengaluru centre will initially have about 1,000 employees, and one source said it was expected to grow to 5,000-6,000 employees when fully operational.

When contacted, an Exxon Mobil spokesman declined to comment on the investment figure, but confirmed that the company was "establishing a new affiliate to develop a business support centre in Bengaluru later this year to provide a range of technical and business support services for the company globally." Operations, the company said, are expected to begin in late 2015.

19.3. Bengaluru GICs (Global In-House Centres) up the ante, begin a hiring spree

TNN | May 29, 2015 | By Sujit John & Shilpa Phadnis

Bengaluru: Leading American apparel and home furnishing retailer JC Penney and French energy and transport solutions major Alstom are among the growing number of global majors that's looking to establish captive technology and business support services centres in Bengaluru. 

Karnataka is finding it difficult to attract manufacturing investments. But in its long-time area of strength -technology and IT services - there is no dearth of interest from overseas.

TOI reported on Thursday that the$412-billion oil-and-gas company Exxon Mobil was establishing a $500-million centre in Bengaluru. The city is home to 35% of the over 1,000 global in-house centres (GIC) in India.

Multiple sources told TOI that the global CIO of JC Penny, Scott Laverty, and his team were in Bengaluru in February to explore the possibility of setting up a GIC here. Laverty is keen to tap into the country's technology talent pool to create a great digital shopping experience for its customers, these sources said.

JC Penney is exploring three sites - Bengaluru, Hyderabad and Delhi. An email sent to JC Penney on the possibility of setting up a GIC remained unanswered till the time of going to the press. Alstom is said to have identified key personnel for India centre and it has begun the process of establishing a centre in Bengaluru.

US-based financial services major Great-West Financial, which serves millions of Americans through retirement savings products, life insurance and annuities, set up a captive centre recently in Bengaluru called Great West Business Services India.

It will be operational in August, and plans to hire close to 1,000employees who will work on retirement processing services. Great-West Financial, which has $441-billion assets under administration, is the No. 2 insurer by total premium in life insurance sold through US banks.

Among other entrants to the city over the past 18 months are US-based home improvement and appliance store chain Lowe's, America's largest lingerie retailer Victoria's Secret, food processing company Cargill, Denmark's largest bank Danske Bank, and a unit of Sweden-based engineering group Trelleborg AB. 

Narayan Ram, MD of Lowe's India, told TOI that the company is doubling its headcount in Bengaluru from 300currently to over 650 employees by the end of this calendar year.

"Indian talent and capability will accelerate our ability to respond to customers and create a better customer service experience," Ram said. The $54-billion company has leased 110,000 sqft of office space in the Manyata Tech Park to set up its captive centre, the largest outside its headquarters in the US. 

Ram said the India team would have a significant role to play in a new innovation, called The Lowe's Holoroom, an augmented reality home improvement store that gives homeowners an immersive experience. "It helps to visualize a home improvement project with design tools to create a virtual walkthrough of any home makeover," he said.

Cargill Business Services India, the global in-house centre of the $135-billion Cargill, will hire 1,000 people for its Bengaluru facility over the next 5 years. The company has already hired over 120 people and plans to ramp up its headcount to 650 by 2015-end. "I'm most excited about the capability and talent here.

Cargill's move towards shared services will include HR, finance, global IT, transportation & logistics, and strategic sourcing. It's a big shift in the mind set from a one-time cost game to a much better way to work because of our access to talent," Kathy Fortmann, Cargill's business services leader, told TOI.

The number of GIC’s has increased from 750 in 2010 to over 1,000 in 2015 and the number of employees in them has grown from 1.5 lakh in 2003 to 7.45 lakh this year, a recent Nasscom report said.

20.1.  Global diamond mines allowed to sell in India in special zones

Business Standard | May 29, 2015

Mumbai: The government has finally allowed international mines to sell rough diamonds in India, which otherwise Indian merchants had to earlier purchase from Antwerp.

The Special Notified Zone (SNZ) to allow import and sale of rough diamond directly by global miners like De Beers, Rio Tinto, BHP Billiton and Al Rosais set to become operational by July 1. While plans to set up the SNZ were announced at the Bharat Diamond Bourse in December 2014, the government had not issued any operational guidelines in consultation with the Central Excise and Customs.

Therefore, despite the announcement, global miners were apprehensive over setting up of India offices to bring rough diamond and conduct auctions here.

De Beers’ Chief Executive Officer Philippe Mellier on his recent India visit had said his company was ready to set up offices in India provided conducive trading regulations were put in place. “With operational guidelines in place, global miners will be able to set up offices in India which will reduce travelling time for Indian diamantaires, and also cost of rough diamond procurement,” said Sabyasachi Ray, Executive Director, GJEPC.

The decision assumes significance especially for Indian diamantaires who currently travel to major trading centres like Dubai, Johannesburg and Antwerp once for inspection of the lot of rough diamond and again for participating in auctions. India process 11 out of every 13 rough diamonds mined globally.

“This is first of its kind of revolutionary idea which the government of Israel and others want to replicate. We were pursing with the government for several years for this. The guidelines will transform India into the world class trading centre not only for rough diamond but also for other commodities, in case the same is adopted,” said Ray.

Meanwhile, the government has set up a special purpose vehicle —India Diamond Trading Centre (IDTC) —to handle import of rough diamond for auctions and sale here. The government proposed BDB to outsource the handling of rough diamond, imported for auctions or sales to ITDC to be constituted jointly by GJEPC and BDB.

Also, the government asked BDB to identify and submit floor plan including security related features. “Trading by global miners in India was not allowed in India. Global miners are allowed now to bring even run of-the-mines goods. For them, we have identified 4000 sqft with 10-12 rooms which global miners would hire and conduct trading. The unsold quantity may always be taken back,” said Anoop Mehta, President of BDB.

The government has identified BDB as a custodian of rough diamond import and export for which the Precious Cargo Customs Clearance Centre at BKC has been notified as a nodal agency. The import of rough diamonds will be permitted through air cargo mode only. No import of hand carriage or express courier service mode will be permitted.

Sanjay Kothari, an industry veteran, said, “We are in talks with global diamond miners to bring them for trading of rough diamonds in India. As of now, individual traders, sight holders or processors were importing goods on their personal capacity. With this, however, Indian diamond processors will be at an advantage.”

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

INDIA & THE WORLD

21.1.  India, three neighbours to ink road pact to boost trade

Livemint | May 27, 2015

New Delhi: Four South Asian neighbours-Bangladesh, Bhutan, India and Nepal-are set to sign an agreement next month to connect their countries by road and boost trade and economic activity. A notable exclusion is Pakistan, which has refused to sign a similar pact with other South Asian Association for Regional Cooperation (Saarc) members.

The bloc comprises Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan and Sri Lanka, who traded among themselves goods and services worth $20 billion in 2013-14, a 12.36% rise over the previous year.

Transport ministers of the four so-called BBIN countries are expected to finalize and sign the motor vehicles agreement at Thimphu, the capital of Bhutan, on 15 June to facilitate the seamless movement of vehicles within the region, said three Indian government officials.

The BBIN pact was proposed at the Saarc summit held in Kathmandu in November. The summit was to witness three key pacts being inked-the Saarc Framework Agreement for Energy Cooperation, Saarc Motor Vehicles Agreement and Saarc Regional Railways Agreement.

However, only one agreement-the regional electricity pact-was signed after Pakistan blocked the other two.

The motor vehicles pact seeks to open up vehicular traffic in order to give an impetus to trade and sub-regional cooperation - a key element of Prime Minister Narendra Modi’s neighbourhood policy. 

India is expected to be represented at the 15 June signing by Nitin Gadkari, minister for roads and highways, one of the officials cited above said.

The second official said that India was hopeful that “the ministers would approve the text and sign the pact at the meeting”. Senior transport ministry officials of BBIN countries met in February in Kolkata where the text of the agreement was agreed, he added.

“Better road connectivity, we hope, will enhance trade and economic activity besides allowing increased people-to-people contact among these countries,” the third official said. “It was decided to go ahead with the pact since India has bilateral pacts with all three countries but they do not have similar pacts between themselves. So if a truck from Nepal needs to go to Chittagong port in Bangladesh, an agreement among BBIN countries will help,” the third official added.

In his speech at the Kathmandu summit, Modi noted “a rising tide of integration” across the world. In contrast, he said, South Asia needed “urgent” efforts for regional integration, adding “it’s still harder to travel within our region than to Bangkok or Singapore; and, more expensive to speak to each other.”

Modi also noted that ties between the Saarc countries would grow “stronger when we connect the lives of the ordinary citizens of our countries. That is why connectivity and services by rail and road are so important”.

According to Biswajit Dhar, professor of economics at New Delhi-based Jawaharlal Nehru University, if the BBIN pact materializes, then it will be “an excellent development... taking an integrated view of the economics of the sub-region and then trying to harness it”. “It will be the best way of overcoming the logjam that we see at the Saarc level. It will show Pakistan it cannot hold the region to ransom,” he said.

Better connectivity would boost trade and economic activity in the region and also help India develop its North-East, which in turn could become a market for countries like Bangladesh. “This will open up economic opportunities and bring prosperity to the region,” Dhar added.

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

21.2. India – Bangladesh Inter Governmental Railway Meeting (IGRM) concludes in New Delhi

Press Information Bureau | May 28, 2015

New Delhi: India – Bangladesh Inter Governmental Railway Meeting (IGRM) was held in New Delhi on May 25^th – 27^th, 2015. Besides officials of Indian Railways and Bangladesh Railway, representatives of departments of Customs, Immigration and External Affairs from both countries also participated in the deliberations.

During the course of extensive deliberations that were held in keeping with the established environment of mutual trust and co-operation between the two Railways, satisfaction was expressed at the implementation of the decisions taken in the last meeting, which was held in Dhaka in April 2014 to augment the frequency of Maitree Express to three round trips in a week with effect from 4^th January 2015.

As regards the need / feasibilities of increasing the frequency of this train to four times, it was agreed that Bangladesh Railway would conduct a due diligence exercise and revert to Indian Railways in due course.

It was also agreed that both sides would further pursue the initiative to shift Customs and Immigration checks to Kolkata and Dhaka. To this end, IR expressed its readiness to convert Maitree Express into a fully air conditioned service.

In response to the popular demand and need for introduction of a weekly passenger service between Khulna and Kolkata, both sides agreed to expeditiously evaluate the feasibility of initially operating this once a week service via the longer Gede – Darsana route with an Indian Railways’ rake and review arrangements after issues relating to conduct of Customs and Immigration checks at Benapole/Petrapol or at Kolkata/Dhaka get settled.

The need for immediate introduction of Container train services between India and Bangladesh was reiterated by Indian Railways. It was appreciated by both sides that this would help in optimizing the level of trans-border clearance of goods and in bringing down the overall transaction cost for trade.

Both railways also agreed to start transportation by rail of Petroleum products from Numaligarh Refinery in Assam to Parbatipur in Bangladesh via the existing interchange points at Rohanpur and Singhabad.

With a view to catalyse growth in trade between the two countries, the need for undertaking rail connectivity projects like Radhikapur (India) – Birol (Bangladesh), Chilahati (Bangladesh) – Haldibari (India), Shahbazpur (Bangladesh) – Mahisasan (India), Akhoura (Bangladesh) – Agartala (India) and Feni (Bangladesh) – Belonia (India) was appreciated by both sides. 

In response to IR’s request for being allowed access to BR network for the purposes of carrying through traffic to and from its Eastern States, Bangladesh Railway agreed to have the proposal placed for due consideration at the appropriate levels of its Governments.

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

21.3. Reliance Power, Adani to invest $5.5 billion in Bangladesh power projects

Livemint | Jun. 08, 2015

Dhaka: Reliance Power Ltd. and Adani Power Ltd. signed separate deals on Saturday to potentially invest a combined $5.5 billion in Bangladesh to generate electricity. The agreements were announced as Prime Minister Narendra Modi started his two-day visit to Dhaka to “strengthen ties” with Bangladesh.

Reliance plans to spend about $3 billion to set up a 3,000- megawatt power plant based on imported liquefied natural gas, the company said in a statement. Gujarat-based Adani Group plans to invest $2.5 billion building a 1,600 megawatts coal-fired power plant, Bangladesh Power Development Board chairman Shahinul Islam Khan said at an event in Dhaka, Bloomberg.

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

21.4. $2 billion line of credit to Bangladesh to create 50,000 Indian jobs

TNN | Jun 7, 2015 | By Surojit Gupta

New Delhi: What is good for Bangladesh is good for India. The government is extending a $2 billion line of credit to its neighbour which is expected to create 50,000 jobs in India and provide a big boost to the government's Make in India drive.

A line of credit is a promise to provide loans at subsidized rates from agencies such as Exim Bank. These are normally conditional on the recipient using the loan amount to buy equipment and services from Indian entities such as BHEL, RITES, small and medium enterprises.

As it happened: PM Modi's Bangladesh visit: "We have already provided $862 million line of credit to Bangladesh and this $2 billion is going to provide a big boost to project exports from India and help Indian companies," Yaduvendra Mathur, chairman and managing director of Export Import Bank of India, told TOI.

He said the line of credit will also provide a huge boost to several sectors such as steel and cement as they will be exported to Bangladesh for the projects which will be undertaken there. "It is a big boost to manufacturing and projects but also create jobs," Mathur said. 

Since taking over Prime Minister Narendra Modi has extended nearly $6 billion line of credit under his Look East policy to Nepal, Bangladesh, Sri Lanka and Maldives.

Deal gives Delhi access to China-built port The Exim Bank has set up a special infrastructure facility in its Delhi office to route the projects from India and is working closely with the ministry of external affairs on boosting project exports from the country.

Under the line of credit (LOC) a minimum of 75% of goods and services needs to be of Indian origin and must be procured from India. According to Mathur, Exim Bank of India's LOCs are boosting the country's international trade and project exports.

Exim Bank plays an active role in supporting Indian project exporters to execute developmental projects in over 60 countries which in turn provide immense opportunities to Indian firms to demonstrate their project execution capabilities, according to Mathur. "Associated supplies through sub-contractors contribute to increase in India's global trade.

At the same time furthering the ‘Make in India’ concept while generating additional employment in India," he said. Reliance Power, Adani in $4.5bn power play in Bangladesh.

So far, the government has provided 225 LOCs to 61 countries under the Development and Economic Assistance Scheme. These LOCs have been extended to countries in Africa, Asia, Latin America, Oceania and the CIS, totalling $14.87 billion. Over 170 Indian companies have executed or are executing projects worth $7 billion under this initiative.

Export-Import Bank of India is the premier export finance institution of the country. It commenced operations in1982 under the Export-Import Bank of India Act; 1981. The government launched the institution with a mandate to not just enhance exports from India, but also to integrate the country's foreign trade and investment with the overall economic growth.

Jobs magic missing, industry needs a push "Commencing operations as a purveyor of export credit, like other Export Credit Agencies in the world, Exim Bank of India has evolved into an institution that plays a major role in partnering Indian industries, particularly the small and medium enterprises through a wide range of products and services offered at all stages of the business cycle, starting from import of technology and export product development to export production, export marketing, pre-shipment and post-shipment and overseas investment," according to the bank's website.

22.1. Modi's visit redefined India, China economic partnership: CII

IANS | May 18, 2015

New Delhi: Prime Minister Narendra Modi's visit to China has redefined the economic partnership of the two largest and fastest-growing developing economies in the world, an Indian industry lobby said on Sunday.

The statement by Sumit Mazumder, president of the Confederation of Indian Industry (CII) came in the wake of Indian and Chinese companies signing 24 cooperation agreements worth $22 billion at the India-China Business Forum in Shanghai on Saturday in the presence of Prime Minister Modi.

"CII signed an institutional agreement with the provincial government of Guizhou for promoting participation of Indian IT companies in local IT projects," the leading Indian industry chamber said. "CII also signed a tripartite agreement with Zhisland and Xifu, business institutions in China, for institutional cooperation in B2B (business-to-business) engagement," it added.

Welcoming the cooperation on pharmaceutical supervision, speedier phyto sanitary negotiations on agro products and stronger links between Indian IT companies and Chinese enterprises, Mazumder said: "CII believes that services trade can help address the trade imbalance and the industry appreciates the increase in cooperation in tourism, films, healthcare, IT and logistics."

Welcoming the economic and business outcomes of the prime minister's visit to China, he noted that the prime minister personally took up matters of concern to industry — and, as a result, sentiments on both sides are very positive and upbeat.

"We welcome the announcement of a high-powered joint task force to address the issue of trade imbalance and to expand bilateral trade and investment. The many MoUs signed by companies of both sides herald a new era in our economic relationship," said Chandrajit Banerjee, CII director general. India-China bilateral trade stood at over $70 billion in 2014. 

While India's exports in the year touched $16billion, China's exports were $54.42 billion and the trade deficit against India was nearly $38 billion.

22.2. China wants Indian IT companies' expertise in new hi-tech city

Hindustan Times | May 29, 2015

Guian (Southwest China): China wants Indian IT companies to open shop in a sprawling tech-city being built in one of its least developed regions in the southwest of the country, in a move that reflects the effort to strengthen economic cooperation between the two countries at state levels.

Cooperation between Indian states and Chinese provinces was in sharp focus during Prime Minister Narendra Modi's visit to China earlier this month. The Guizhou province in southwest China, according to Chinese officials, is emerging as a base for cloud computing and big data -- and they want Indian software giants like Infosys, TCS and Wipro to be part of it.

Representatives from more than two dozen Indian companies, their Chinese counterparts, the Confederation of Indian Industries (CII) and government officials got together on Tuesday at the Guian New Area (GNA) city to begin work on a blueprint for cooperation; the seminar was titled "China-India IT Industry Development Forum."

One Indian company has already made the move: earlier this year India's NIIT and GNA signed a MoU to offer programs in new-age IT, with a special focus on Big Data. Under the agreement, NIIT will set up a centre in GNA to train 50,000 students in five years, "...to help realise China's vision to promote Guian as the national centre for the big data industry."

"India is one of the leading countries in IT. There is lot of space to cooperate (between India and Chinese IT companies)....they complement each other. This could be the starting point for a new development," WangJianping, vice-governor of Guizhou province, said at the gathering.

Speaking at the seminar, NamgyaKhampa, economic counsellor at the Indian embassy in Beijing, said: "...IT has long been acknowledged as a particularly promising area for increasing cooperation. Both governments have been advocating stronger links between our IT companies. Certainly the presence of many of our leading IT companies here today is a positive sign on the cooperation to come".

Top officials from Indian IT majors appeared enthusiastic but cautious. The projected development of the city as an IT hub with a substantial Indian component, they said, was ambitious but more details needed to be chalked out.

"IT development in the GNA has the financial resources, governmental support and the required infrastructure. Big data prospects look bright, but we have to now look at the details," Sujit Chatterjee, Tata Consultancy Services (TCS) China-head, said.

Another company representative privately asked whether it would be a better idea for Chinese IT companies to cooperate with India – in India. India has demographic and cost advantages, more than 54 per cent of the population is under 25, and it has started to grow fast, the official pointed out.

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

23.1.  World's second richest man Carlos Slim (Mexico) eyes Indian telecom

ET Bureau | May 28, 2015 | By Kalyan Parbat

Kolkata: Carlos Slim, the world's richest man after Bill Gates, could be eyeing India as his next big business entry at a time his telecom firm faces stiff challenges in Mexico; its home market and also its biggest. Slim, the 75-year-old owner of America Movil, made a quiet trip to India about two weeks ago to test the waters and explore partnerships between Latin America's leading Telco and Indian business houses with telecom interests, three people aware of the visit told ET.

America Movil's high-profile chairman, worth $77.1 billion according to Forbes, is believed to have met Videocon Group Chairman Venugopal Dhoot as well as senior executives of some other mobile phone firms. The 'Warren Buffett of Mexico', as Slim is referred to, "expressed optimism about growth opportunities presented by the Indian telecom market", said one of the people aware of talks with top Indian executives.

Slim's business interests range across sectors such as telecommunications, education, healthcare, industrial manufacturing, food & beverages, real estate, airlines, media, mining, oil, hospitality, entertainment, technology, retail, sports and financial services.

But the bedrock of his fortune is telecom. When contacted over email, an America Movil spokeswoman said, "We do not have any comments at this time on Mr Slim's visit to India." ET had sought details about Mr Slim's visit, his meetings with heads of Indian telecom operators and American Movil's India plans.

A top Videocon group executive said, "Large international Telco’s looking to India for growth had evinced an interest to make strategic investments in Videocon Telecom and we are in discussions with some of them." He declined to elaborate on ET's query regarding Slim's meeting with the Videocon Group chairman.

Industry executives said Slim also met senior officials of a Mumbai based telecom company and Bharti Airtel. An Airtel spokesperson, however, denied the development and rejected the notion that there had been any talk of a likely investment. "We strongly deny these speculations which are completely incorrect, baseless and without an iota of truth," the spokesperson said.

VIDEOCON GOT FEELERS: In January, Dhoot had told ET that Videocon's telecom unit had received feelers from a Mexican company as well as an Indian telecom player looking to buy a 49% stake. He added that any deal would happen only after fresh rules on mergers and acquisitions (M&A) are announced. This would appear to guide the Mexican billionaire's moves as well.

"The tenor of talks suggested Slim is scouting for a suitable Indian telecom partner in anticipation of business friendly rules, including those on M&A and on spectrum-sharing and trading," said one of the persons cited above. The much-awaited spectrum sharing and trading norms are likely to be taken up by the Cabinet at the end of June. The government has also promised a review of the M&A rules and may make them more industry friendly if needed.

America Movil, which counts Brazil, the US and Austria as its biggest markets after Mexico, is facing stiff challenges at home. Margins have shrunk to their narrowest since 2013 after a change in law sought to deter a dominant market player, or one that holds more than 50% of the market, from charging competitors for calls on its network.

America Movil has about 80% of Mexico's landline market and 70% of its mobile market. The scrapping of domestic roaming charges has further hurt margins within Mexico. America Movil's wireless service revenues and subscribers both fell in the first quarter of 2015 while margins shrunk to 41.7% from 44.4% a year earlier.

STRONG CASE FOR INDIA FORAY: Sector analysts said there is a strong business case for the global telecom company to expand its footprint to India, which offers greater growth opportunities than Latin America, Europe or Africa. "America Movil has strong reasons to look to India for growth as it would be tapping into the world's second largest telecom market by subscribers where annual data growth is also over 50%", driven by surging smartphone sales, said Hemant Joshi, partner at Deloitte Haskins & Sells LLP.

He said India, with its population of 1.25 billion, offers greater growth opportunities than Mexico. Another analyst at a European brokerage said, "It would make sense for America Movil to explore an expansion into India, especially as it faces margin pressure in Mexico, where it reportedly cut prices recently to compete with aggressive rivals such as Grupo Televisa SAB and Telefonica SA."

America Movil has operations in 18 countries in the Americas and seven in Europe. It has a controlling stake in Telekom AustriaAG, which also has businesses in Bulgaria, Croatia and Belarus. The second person cited above said, "This was the third meeting between Slim and Dhoot, who had previously met him in London after they were introduced by a common friend, who is an internationally renowned steel tycoon."

Videocon, one of the smallest Telco’s in India, is known to be keen to exit the spectrum dependent mobility space and has also been approached recently by Norway's Telenor ASA for a stake sale.

23.2. TOI's top 10: World's richest Malayalis

TNN | Jun 4, 2015 | By Shenoy Karun

Kerala is not just God's own country, where tourism and tradition define its global appeal. Wealth and entrepreneurship also distinguish Malayalis on the global map.

The Times of India brings you a list of the 10 richest Malayalis on the basis of their net worth.

1)      Even as his wealth has multiplied, M A Yussuffali, the world's second-richest Malayali with headquarters in Abu Dhabi and a net worth of about Rs.16,300 crore, makes it a point to stay connected to his small-town roots. His 113 hypermarkets spread across nine countries rake in around Rs.37,000 crore annually.

"Around 24,000 out of 32,000 employees are from Kerala; 4,000 are from my own village Nattika," Yusuffali says. "Do you know that I don't have to pay for fish back in my native village? I have given jobs to the youth from all communities, some of whom are from fishermen's families. So, when I'm around, their parents always make sure that I get fresh fish."

A unique aspect is the composition of this rich list--it cuts across religions. Many in the list, including the top three, are self-made. Coming from a milieu where money-making was almost considered a sin, their small trader background was often their only capital when they started.

The list of the 10 richest Malayalis is as diverse as it is impressive. The core businesses of these magnates range from construction, retail and jewellery to education, banking and software. Billionaires rarely talk about their wealth. Almost all the businessmen on our original shortlist were happy to speak to TOI - until we started asking them about their personal wealth.

One of them deflected us by saying, "I didn't worry about riches as long as I have appam and egg curry on my breakfast table." That made our life a lot more difficult, because most of them own either private or closely held companies which are not listed on stock exchanges and therefore do not lend themselves to ready estimates of their market value.

So, our Malayali rich list is born not out of any one standardized methodology but a mix of valuation processes like street or stock market value, and peer comparison.

We also relied on company data; interviews with promoters, competitors, investors and analysts; and background checks. In cases where we could not get the exact value of wealth, we have tried to arrive at its fair value (please see accompanying report on methodology). Our calculations also do not take into account assets such as private residential properties and art collections. They are, at best, ballpark estimates. But they do convey a sense of what our rich-listers are worth.

2)      Emirs From Kerala Ravi Pillai, chairman of the Bahrain-headquartered RP Group, tops the list with a net worth of Rs.18,500 crore(see Top 10); much of the wealth of this construction tycoon comes from the profits of Nasser S Al-Hajri Corporation (NSH), a company he founded in 1978 in Saudi Arabia.

Says Pillai, "I was a contractor with public enterprises in Kerala before I came to the Middle East; a strike at one of the undertakings forced me to look for opportunity elsewhere. Of the 500 people working with me, I took 200 to Saudi Arabia. If the strike hadn't happened, I wouldn't have made my fortune."

Half of those who figure in the Top 10 made their fortunes in the Middle East in the 1970s. Partly, this has to do with the fact that despite new-found oil reserves, the region was quite backward then and lacked local initiative.

Yusuffali created a retail empire that originated in the UAE. He recalls those early days: "I landed in Dubai in a ship named Dumra on December 31, 1973. I found Abu Dhabi a town without a steady supply of electricity or a proper sewage system. Whenever temperatures rose - sometimes up to 52 degree Celsius, along with 84% humidity - we used to sleep on the roof.

"Pillai is a first-generation entrepreneur with roots in Chavara, near Kollam; his parents were farmers. Between NSH and 25 other companies he owns, they generate revenues of Rs.26,800 crore annually. Other than construction, Pillai has a strong presence in travel and tourism, healthcare and education, mainly in India and the Middle East.

Often called 'Ambani of the Gulf', Pillai shot into limelight when he acquired Leela Resorts in Kovalam from the Mumbai-based family of C P Krishnan Nair, who was for decades one of the best-known faces of Malayali entrepreneurship. (For the last few years Capt. Nair's elder son Vivek has been working hard to reduce the group's large debt burden.)

3)      P N C Menon is the third-richest Malayali in the world with a net worth of Rs.13,000 crore.

His holding company, the Dubai-headquartered PNC Investments, generated revenues of 1.2 billion dirham (Rs.2,107 crore) during 2013, with net profits of 88.4 million Dhs. (Rs.150crore).

Having lost his father when he was 10, Menon discontinued college to become an interior designer at Thrissur where his father once ran a small business.

One day in 1976 his fortunes changed when he met Brig Gen Suleiman Al-Adawi from Oman in the lobby of a Kochi hotel. The general invited him to Muscat where the duo founded an interior design firm with a bank loan of 3,000 riyals. Talk of the right connection! Small Towns, Big Dreams Yusuffali's companies generated revenues of Rs.37,000 crore in 2014.

He learnt the tricks of the trade during his four-year stay in Ahmedabad, where his paternal uncle ran a general store. In 1973, he moved to Abu Dhabi where his father and uncle ran MK Stores, a kirana shop. "In 1983 came my first foreign trip. With10 years of experience in retailing, I went to Singapore, Sydney, Brisbane, Melbourne and Perth. Australia's supermarkets impressed me the most. I decided to set up big supermarkets in Abu Dhabi instead of small grocery shops," Yusuffali says.

Running in the Family their businesses couldn't be more different but a common thread unites T S Kalyanaraman, George Muthoot and Sunny Varkey - their families gave them a foundation on which to build their futures.

4)      Varkey, who has a net worth of Rs.11,200 crore, is fourth on the list.

A second-generation entrepreneur, Varkey came to Dubai in 1959 at the age of two along with his banker father. During their free time, his parents gave English lessons to workers; their efforts culminated in a formal school - Our Own English High School.

When his father retired in 1980, Varkey took over the reins of the organisation and started expanding, spurred by the belief that there was a huge potential for quality education not only in the Middle East, or on the subcontinent, but also in developed countries.

His company Gems Education, headquartered in Dubai, operates a global network of schools and pre-schools in the Middle East, Africa, various parts of Asia, the UK and the U.S.A third-generation businessman, Kalyanaraman started helping his father right from school, in the family's textile business. In 1993, he ventured into gold jewellery retail, which pushed him into the list of billionaires.

5)      As chairman and MD of the Thrissur-headquartered Kalyan Jewellers, Kalyanaraman is sixth in the list with an estimated net worth of Rs.6, 600 crore.

His company generated revenues of Rs.7,400 crore in 2014. During that time, private equity firm Warburg Pincus invested Rs.1,200 crore in the company for a minority stake. The company now has 77 stores in India, the UAE and Kuwait, and plans to open 16 more by March 2016.

Says Kalyanaraman, “I never expected to be rich like this: While I first started a jewellery showroom in 1993, I was using an Ambassador. Then, I used a Maruti 800. Now, between me and my two sons, we own three Rolls Royce’s". And then are his private jets (but more of that later).

6)      M G George Muthoot, chairman of Muthoot Group, takes seventh position with a net worth of Rs.5,550 crore.

Between Muthoot and his 12 family members, they own 29.8 crore shares of Muthoot Finance, the largest gold loan company in the country. Muthoot is a third generation businessman with origins in Kozhencherry, a small town south-east of Kochi, where his group is headquartered.

A graduate in mechanical engineering from the Manipal Institute of Technology, he entered the business in the 1970s. The group has since spread into education, healthcare, IT, plantations, travel and tourism, and power generation. In Kerala, gold loans have become synonymous with Muthoot Finance.

7)      Class Act Senapathy 'Kris' Gopalakrishnan, co-founder and one-time CEO of Infosys, India's second-largest software firm, is the fifth richest Malayali.

Along with wife Sudha and daughter Meghana, he holds more than 3.9 crore shares of the company, with an estimated market cap of Rs.7,860 crore. A graduate in physics from the University of Kerala, Gopalakrishnan did his master's in computer science at the Indian Institute of Technology Madras.

8)      Like Gopalakrishnan, S D Shibulal, another co-founder of Infosys (and the last of the owner-CEOs), comes in ninth in the rich list with a net worth of Rs.5,250 crore.

He, too, is a product of the University of Kerala, where he did his master's in physics. In Shibulal's case, the street value of his 2.3 crore shares of Infosys and that of his wife and children have been added up to calculate his net worth, along with the value of his more than 700 apartments in the US.

9)      Azad Moopen, chairman of the Dubai-headquartered Aster DM Healthcare LLC, is in the eighth position with a net worth of Rs.5,500 crore.

An MBBS gold medallist, he started his career as a lecturer at the Calicut Medical College in 1982 before arriving in Dubai five years later. Aster Group now operates close to 260 hospitals and pharmacies in the Middle East and India. Moopen also owns a medical college in Wayanad district of Kerala. Moopen told TOI, "Everybody in my family, including my father and brothers has been in business. I was an exception; I went into academics." But clearly, business ran in his blood, too.

10)   In tenth position is Arun Kumar, founder and group CEO of Strides Arcolab, a pharma company.

With roots in Kollam district, he was brought up in Ooty, worked in Mumbai, and shifted the headquarters of the company he founded 25 years ago to Bengaluru. In 2013, his company sold Agila Specialties, one of its divisions, to US pharma giant Mylan for $1.75 billion.

According to industry sources, he has sold businesses worth $2.2 billion in the past three years. His personal net worth is estimated at Rs.4,800 crore. He still controls Strides Arcolab, along with Sequent Scientific and Alivira Animal Health.

Agnus Capital, his family's investment vehicle, has stakes in a number of high-value start-ups.

Sprawling Empires: The scale of operations of the Malayali barons from the Middle East is immense. Some of them operate in almost all continents.

It is estimated that nearly 7.1 lakh customers walk into Yusuffali's Lulu hypermarkets daily, mainly in the Middle East. His company sources from 51 countries and has set up procurement offices in36 nations around the world.

Likewise, Ravi Pillai also operates across a vast geography - from Africa to Australia, employing 90,000 people. "Within two months, we'll have 1 lakh employees as we are recruiting 10,000 workers for our projects in Kuwait," says Pillai.

LIVE LIFE KING SIZE: 
They may not be deliberately ostentatious but all these magnates live luxuriously - and peripatetically. Yusuffali's staff keeps 40 cars, including a fleet of Rolls Royce’s, BMWs and Mercedes-Benzes, and a private executive jet Embraer Legacy 650 waiting for him in Dubai or Kochi. And wherever needed, he rents helicopters locally for short trips.

Apart from residential homes in Abu Dhabi, London and Kochi, he owns commercial properties in London, Muscat, Doha, Mumbai and New Delhi. Kalyanaraman owns two jets, an Embraer Phenom 100 and an Embraer Legacy 650, as well as a Bell 427 helicopter, which allow him to hop between his stores.

HOW WE DID IT: 
For listed Indian companies, we used the direct valuation method, where the wealth was calculated using ‘street' or stock market value. In cases where multiple family members held significant number of shares of a company, we took the wealth of the family head combining the shares held by immediate relatives. MG George Muthoot, seventh on the list, is a case in point.

In some rare instances, where private companies revealed their numbers, we again employed a direct method of how the assets of these entrepreneurial companies exceeded the total liabilities. But for valuing promoter wealth of most private companies - where business numbers were not forthcoming - we used the comparable company analysis (CCA) methodology. 

We used price-to-earnings (PE) multiple or rule-of-thumb (a method of calculating wealth based on company revenues and inventory) in arriving at a fair value of the wealth these entrepreneurs made over decades.

Valuing Aster DM Healthcare of Dr Azad Moopen involved identifying peer companies, London-listed Al-Noor and NMC Healthcare, looking at their current market value and PE multiples. Like Aster DM, both Al-Noor and NMC too have significant part of their businesses flowing in from the Middle East.

Sunny Varkey's education empire Gems Education and TS Kalyanaraman's Kalyan Jewellers were valued based on recent private equity interest in their respective businesses, which is used as a benchmark in valuing private enterprises globally.

During the course of the valuation process, we trawled through annual reports, profit and loss accounts and draft prospectuses before reaching a final list of Malayali rainmakers. The most notable exceptions are the Dubai-headquartered gold retailer Joy Alukkas and the Chennai-based KM Mammen of MRF Ltd, who richly deserved to be in the list.

We did not have enough verifiable data like the shareholding pattern and revenues of holding company, Joyalukkas Jewellery, in the first case. And the Mammens were strong contenders for the Top 10 but fell below our cut-off despite being arguably the best known business house out of Kerala.

24.1. Australia lines up investments worth $10 billion for India

PTI | Jun. 5, 2015

Kolkata: Australia has lined up investments worth $10 billion for India as it is looking for greater cooperation with the country. "Investments worth $10 billion are in the pipeline in varied sectors, including resources and manufacturing," Australian high commissioner to India Patrick Suckling said at an interactive session with MCC Chamber of Commerce and Industry. Queensland govt. clears Adani, GVK projects in Australia.

He said his country is keen on collaborating with India in energy, food, education and infrastructure sectors. Suckling said one of the key elements of Indian foreign policy is ensuring its energy security and Australia can strategically help India with its requirements in coal, gas, steel and uranium, among others. Also, Australia is looking at collaborating to support India's food security mission.

Australia keen to investment in defence, mining sector in India. The government is trying to modernize the agricultural sector and opportunities for technological collaborations and investment with Australia are there, ranging from cold storages to agricultural technology, Suckling said. Offering support in the skill development mission, Australian educational institutes are planning to have tie-ups in India, he added.

25.1. US-based SunEdison to acquire Continuum Wind Energy

Livemint | Jun. 17, 2015

Mumbai: US-based SunEdison Inc. has agreed to acquire Continuum Wind Energy Ltd, a Singapore-based company with assets in India, for an undisclosed sum. Continuum owns and operates 242 megawatts (MW) of wind power plants in Maharashtra and Gujarat, besides a 170 MW wind power unit under construction in Madhya Pradesh. It has more than 1,000 MW of wind power plants in development across six states in India, said a statement from SunEdison.

The financial details of the deal were not disclosed. However, a 2 June report in Economic Times said SunEdison’s non-binding offer values Continuum Wind Energy at Rs.3,720-3,900 crore ($620-650 million),inclusive of its debt. Last year, SunEdison acquired US-based First Wind for $2.4 billion, in one of the largest mergers and acquisitions deals in the renewable space.

Continuum Wind Energy is controlled by Morgan Stanley Infrastructure (MSI), an infrastructure-focused private equity fund. In 2012, Morgan Stanley acquired majority stake in Continuum, founded by Arvind Bansal, an investment banker and Vikash Saraf, former director of Essar Group.

“India is a core market for SunEdison and offers growth opportunities in wind and solar energy,” said Ahmad Chatila, president and chief executive officer at SunEdison, adding, “With the acquisition of Continuum, a leading wind energy company in India, we have added significant assets and a skilled wind development team to drive further growth in our renewable energy development platform.”

“The rapid growth in India’s renewable energy market offers good opportunities for acquirers such as SunEdison, especially of operating and under construction projects. These can be quickly added to their Yieldco platform, a low-risk model which is actively being adopted beyond the US now.

We expect to see more such deals as early stage developers and financial investors seek to monetise in the present boom,” said Kameswara Rao, partner and leader, energy, utilities & mining at PricewaterhouseCoopers Private Limited.

In 2011, Goldman Sachs Group Inc. acquired a controlling stake in ReNew Power Pvt Ltd with an equity investment of up to Rs.1,000 crore. Last month, Mint reported ReNew Power’s plans to raise another $150million to meet expansions. ReNew Power was launched in 2011 by Sumant Sinha, chairman & chief executive officer.

M&As in the renewable energy sector in Asia Pacific has grown 22% in 2014 to $6 billion, driven by JSW Energy Ltd.’s $1.6-billion acquisition of two hydro power assets of Jaiprakash Power Ventures Ltd along with a$1.1-billion deal in China, said a report from PwC in January.

In November last year, Sajjan Jindal-controlled JSW Energy announced the acquisition of two hydroelectric projects from Jaiprakash Power Ventures for Rs.9,700 crore in cash. JSW Energy’s acquisition was the second largest renewable energy deal globally in 2014.

Globally, M&A activity in the renewable energy sector has hit a new high for the decade with the value of deals reaching$243.1 billion in 2014, a growth of 70% year-on-year.

The Indian government has taken steps to improve the generation of clean energy. In his budget speech, finance minister Arun Jaitley spoke about achieving the 175,000-megawatt target set for clean energy installations by 2022.

According to him, this would comprise 100,000 MW of solar power, 60,000MW of wind power, 10,000 MW of energy from biomass and 5,000 MW from small hydroelectric projects. Currently, India’s clean energy capacity is 33,000 MW.

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

25.2. GE bets big on India. Again

Livemint | Jun. 17, 2015

Mumbai: It is a curious place, the General Electric (GE) multi-modal plant in the Chakan industrial belt in Pune, some 150 km from the city of Mumbai. Once inside, there are golf carts to get around. Which is a good thing considering that the facility is spread over 67 acres, or roughly 51 football fields put together.

It has also taken some big bucks to build this expanse: GE spent close to Rs.1,000 crore to get it up and running, or atleast a good part of it, which the company calls Phase 1. (Phase 2 is on its way and should take a couple of years more and some more money). But it is the name of the facility which is most illuminating; multi-modal, it is called.

Now, a traditional plant is a place where a particular product is made. Raw materials enter from one end, blue collar workers get on with it on the lines, using either their hands or machines or both, and the final product lands on the opposite end. It is then packed and ready to be shipped.

Simple: A slightly advanced plant is where a few products can be made, with a few robots thrown in for automation. The process remains the same, except that the workers work in shifts, each shift assigned to a particular product. A multi-modal plant is all of the above and much more. And at the very heart of the concept is a facility that runs in real time.

For the $148.6 billion manufacturing conglomerate, the plant in Chakan is the first of its kind in the world where GE can make products for its various businesses, from oil and gas to aviation, power, renewables and transportation, for India and the rest of the world.

For years, India has been a complex market for capital-intensive, heavy-equipment manufacturers where multinational companies have often grappled with the question:

Is the market ready?

Is there enough domestic demand to justify investments in plants, to manufacture products for each of their various businesses?

GE believes a multi-modal plant is the answer. In Chakan, on the factory floor, the scale of the idea and execution shows. The long, almost rectangular shed is clearly marked for various divisions. On the left are workers toiling away on giant locomotive engine turbochargers. Close by, another set of workers are putting together a turbine for GE’s wind-energy business.

Right in the centre is a 3D printer. Eventually, GE hopes to have 3D printers that can print metal products (this one does plastic and is being tried out). Additive manufacturing is the future, GE believes. There’s another corner, on the right, where almost 300 critical parts for GE’s aviation business are being manufactured.

The key is that at any point in time, manufacturing can be changed in tune with what’s in demand. With the same set of people—every worker on the floor, 25% of them women, have been trained to work on products for at least two different business verticals. The machines which enable them to work must only be programmed for the job.

And after a while (Phase 2) that process, too, will be automated. All machines will be connected to the cloud, where concepts and specifications can be remotely fed; they can then churn out the product from the raw material.

Localizing big time: Needless to say, the man responsible for getting it all done is pleased with the effort. Banmali Agrawala, GE’s president and CEO for South East Asia, says that it is only a matter of time before it all comes together. “So everything will be interconnected,” he says. “And we will be able to do data mining from the shop floor itself; a seamless process, from concept to manufacturing to supply chain.”

It has taken GE four-plus years and many attempts to crack the Indian market to get here. It was during the time of John Flannery, Agrawala’s predecessor, who said that if GE had to win in India, it needed to localize. Big time: “John was convinced,” says Agrawala.

“And that then built up to, okay if we need to localize then what? How and where? And that’s where we soon realized that if it is going to be one product factory, then it doesn’t make sense. ”It wasn’t like the plan sailed through right away. That rarely happens.

Agrawala is quick to admit that his biggest challenge in getting the idea through was internal. “Cutting through the GE way I would say,” he says. “It was not easy considering that we were doing it for the first time. And to convince people that you will be able to do it in this fashion, it took some doing.”

And then there was another problem. A multi-modal facility is at least 20% more expensive than a single product factory. The idea was predicated on the assumption that the factory would serve both the domestic market and exports. “At least half of what is produced here will go to the domestic market,” says Agrawala.

“And I have got to make sure that there is enough domestic business that keeps coming through. And (there are days when) I feel good about it and there are days when I don’t feel good about it. I have to ensure that I am simply not dependent on the exports market. If there is no domestic market, then it demolishes the case.”

Let’s understand this: 170 nations in the GE ecosystem aren’t waiting for Agrawala. The factory in Chakan must manufacture products at a certain cost, quality and within a certain time. If it doesn’t then there’s no order coming through. Then again, if there isn’t enough demand from India, the facility runs the risk of remaining idle.

On paper, a multi-modal facility is a good strategy for nascent markets, where it can take care of short-term demand volatility and shorter product life-span; something that’s been a perennial problem for heavy equipment manufacturers in India. “

The new wave of products will need regional demand,” says S.V. Sukumar, head, manufacturing sector, KPMG. “And capital intensive industries will adopt a multi-modal strategy because of the agility and flexibility it provides. That’s because it takes extraordinary effort to sort supply in case there is volatility in demand. I see many organizations embracing this concept.” Sukumar won’t commit on how soon the trend will play out. But he is sure it will, for obvious benefits.

The idea of ‘Make in India’ as things stand today, Agrawla is hopeful. In the backdrop of Prime Minister Narendra Modi’s ‘Make in India’ campaign. But at the same time, he is a bit impatient about where India is headed.

Two of India’s large sectors, which are big markets for GE, are in a funk: power generation, and oil and gas. There’s little that’s changed in the year since Modi came to power. “Wind, we see as a fairly large component of what we are doing,” he says.

“Locomotives could be really big, with forging and casting units in this part of the country, which could be a big piece. And then, of course, the oil and gas industry: I somehow think that if logic prevails somehow and sense prevails, oil and gas, both exploration and in consequence the downstream industry, has to pick up in the country. 70% of our basins are unexplored.”

What Agrawala firmly believes in though, is the idea of ‘Make in India’. Especially in light of the fact that every nation wants firms to localize, but few have the resources to merit it. “Those products that need to adapt themselves to the market,” he says.

“I think there is no alternative but first to innovate and engineer those for the market, and then make them in the market. From that perspective India is a great place. The ability to innovate, engineer and manufacture, all these three, in one place.”

But, is the country ready to, let’s say, manufacture aircraft engines?

Not quite. “Where I kind of differ from the normal course of manufacturing, the low cost, large scale kind of manufacturing, I’m not sure if that’s the competitive advantage India has. To me the advantage is in the engineering, process and intelligent manufacturing.”

Consequently, will this result in more jobs?

I don’t have an answer to that. Maybe the supply chain down the line will. It will lead to jobs that are more meaningful than just wrench turning. Quality of the jobs is also important. That’s our view, right or wrong is debatable, but we will see.”

But is it cheaper to manufacture in India?

“There is a certain arbitrage in labour, but that’s a shifting target. We don’t question our plant heads on what’s your labour cost. My question is, is the productivity or the time it takes to produce a single unit, and is it the best in the GE universe?

We actually have benchmarks to the China, US, Vietnam facility; where do we stand? So it has got to be the most productive and most efficient place. And I think we are close. We need to also have to make a buffer for other inefficiencies in our system: Such as logistics, Cash flow being blocked. We have certain hurdles.”

Being real Now, it will be fair to say that GE has been in India for a long time. And the benefit of being around for long is that GE has had several ambitious targets, almost all of which it has missed.

When GE first came to the nation, as a business, it set a very ambitious target: $2 billion by 2K (Year 2000). It never got there, withdrawing most of its services and back-end work, citing lack of domestic demand.

Then, it set another target: $5 billion by 2010. It didn’t get there. 

Soon after, another target was set, $10 billion by 2015. Needless to say, GE is nowhere near that number. Agrawala knows that he has his task cut out.

Inside GE, he isn’t over-committing, while being cautiously optimistic. “I think my task is to keep it grounded. To be real,” he says. “At this point my task is that I don’t hype India up or be too cynical. There are clearly a bunch of opportunities here for us. Let’s make the most of those opportunities. You may almost say that it is an opportunistic approach than a broad brushed strategic approach.”

For now, GE seems to have bought into the multi-modal facility idea. And after the India experiment, the firm has committed to set up another plant in Egypt.

From the looks of it, this is just the beginning of a larger shift inside the 123-year-old giant—a realization that its main business is manufacturing things and there, it must lead the way.

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

  

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