AAPI: July 2015

LISBON, 20th May 2016

Index of this Newsletter

INDIA

INDIA & THE WORLD

21.1. Rosneft signs deal to take a 49% stake in Essar Oil
21.2. Rosneft eyes Indian solar power market
22. GMR in race for 5 airports in Philippines worth USD 2.4-bn
23. Prime Minister Narendra Modi's Jan Dhan Yojna finds an echo in Kazakhstan
24. India and USA sign agreements to strengthen cooperation in health sector
25. Videocon plans $2.5 billion Brazil oil, gas investments

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LISBON, 20th July 2015

NEWSLETTER, 20-VII-2015

INDIA

– GENERAL POLICY, INFRASTRUCTURES, COUNTRY FINANCES, etc.

1.1. ADB's India forecast: Sunny with a chance of 7.8% growth
Business Standard | Jul. 17, 2015

New Delhi: The Asian Development Bank (ADB) on Thursday reaffirmed its growth forecast for India, pegging Gross Domestic Product (GDP) to grow at 7.8 per cent in FY16 and 8.2 per cent in FY17. ADB's growth forecasts are higher than that of the International Monetary Fund's (IMF), which projects India to grow at 7.5 per cent in each of these years.

The World Bank had earlier projected India to grow at 7.5 per cent in 2015. However, it scaled down growth projections for Asia by two percentage points to 7 per cent in 2015. China would similarly face two percentage points less growth to 7 per cent in the current calendar year than estimated earlier.
While there continues to be some uncertainty on the monsoon front, ADB says that a healthy monsoon has seen summer crop sowing increase by 57.6 per cent over last year's. This is expected to boost agricultural growth.

On the revival of the investment cycle, ADB holds the position that the rise in the number of new investment projects announced, which has continued to increase for the fourth consecutive quarter during the quarter ending June 2015, indicates brighter investment sentiment. It adds that indirect tax collections in the first quarter of FY2015 do indicate a recovery in manufacturing.

Growth is expected to accelerate to 8.2 per cent in FY 2016-17 on the back of strong service sector growth and removal of the procedural bottlenecks that have hampered investment. Risks to growth prospects, it argued, stem from delays in passing crucial legislation such as the GST and the land acquisition.

While maintaining India's growth forecast, ADB cut its forecast for Developing Asia to 6.1 per cent from 6.3 per cent, largely on account of a slower than expected economic activity in United States and China. Growth projections for China have been revised downwards from 7.2 per cent previously to 7 per cent in 2015. Despite this downward revision, ADB's estimate is higher than that of IMF, which projects China to grow at 6.8 per cent in 2015 and 6.3 per cent in 2016.

"Slower growth in the PRC is likely to have a noticeable effect on the rest of Asia given its size and its close links with other countries in the region through regional and global value chains," said ADB chief economist Shang-Jin Wei. Slower Chinese growth could have a dampening impact on India's exports.

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

1.2. India launches mission to skill 400 million by 2022
Business Standard Jul. 16, 2015

New Delhi: Prime Minister Narendra Modi on Wednesday launched his government's another ambitious scheme the National Skill Development Mission to train 400 million Indians by 2022. "If China is known as world's manufacturing factory, India can be world's human resource capital," Modi told a packed audience in New Delhi. The prime minister was referring to 65 per cent of India's population which is below the age of 35 years. Modi said Indians should be ready to replace the diminishing workforce in other countries. "We have to scientifically map the world's manpower requirement and prepare accordingly," he added. ^

The government also launched the Pradhan Mantri Kaushal Vikas Yojana (PMKVY), skill loan scheme and the national policy for skill development and entrepreneurship 2015 on the World Youth Skill Day. Under the skill loan scheme, youth can avail credit between Rs 5,000 and Rs 150,000 to attend skill-related training programme. Modi stressed the need for more ITI institutes in the country.

The government estimates an incremental requirement of 110 million additional skilled personnel across 24 sectors by 2022. The demand will be highest in real estate, transport, retail and beauty and wellness sectors. But the agricultural sector will see a negative growth with 24.8 million people moving to other jobs.

The Bharatiya Janata Party (BJP)-led National Democratic Alliance (NDA) has announced nearly a dozen schemes, including Digital India, Make in India, Jan Dhan and Swachh Bharat since it took over in May last year. Speaking at the launch, Finance Minister Arun Jaitley said Indian economy was looking up and there would be a huge manpower requirement in services and manufacturing sectors.

"With economy recovering and picking up, with wages in our other competitive economies increasing hugely compared to the Indian economy, our opportunities are great. And when Make in India and Skilling India will converge, no doubt we would have a great future ahead of us," Jaitley said.

Besides Jaitley and other Cabinet ministers, chief ministers from various BJP or its alliance-run states were also present at the occasion. The industry also wasted no time to announce its support and participation. While the NIIT Limited committed to train 10 million young Indians across 16 sectors over the next five years, Tata Housing announced that it would provide vocational skill development training to 100,000 socioeconomically backward youth across the nation by 2024.

"Around 50 per cent of our population is below 27 years. We are talking about 700 million such youngsters by 2020. This is the first time in the history of humankind such a large population is actively seeking livelihood and employment opportunities. Skill India gives youngsters the most important aspect for their life, employability and respect in society. Skill India will get India the most important asset of this century manpower," Narayanan Ramaswamy, partner and head of education and skill development, KPMG in India said in a statement.

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

2.1. Competition among states to get investments will rise with new land law: India Inc
Business Standard | Jul. 17, 2015

India Inc leaders say the Centre’s move on Wednesday to lob the land acquisition ball in state governments’ courts will increase competition among the states to attract investments. States with an easier land acquisition process will see an increase in investments, as it takes time to get approvals for land acquisition and projects get delayed due to poor land laws, say chief executive officers (CEOs).

Harsh Goenka, chairman of RPG Enterprises, said: “States that want the lion’s share of investments’ inflow should be in a position to roll out the red carpet to investors and pass their own laws that take into consideration state-level factors, under broad guidelines from the Centre, to ensure fairness and to safeguard the interests of landowners. The deadlock on the land acquisition Bill should be resolved fast, failing which it could prove to be the Achilles heel for economic growth and rural development. Therefore, this is a very welcome step. And I hope that seeing the prosperity of these 10 states, others will soon follow.”

On Wednesday, 10 BJP-ruled states had proposed to bring their own land acquisition laws to boost infrastructure projects, as a logjam over amendments to the contentious land acquisition Bill, 2013, had delayed projects across the country. With the central government agreeing to this proposal, states with better land laws would attract projects and create employment while others run the risk of falling behind.

“This is good for companies as the states will now have to compete with each other for investment,” said Ajit Gulabchand, chairman of construction major HCC. “At present, it takes 58 months to only get government approvals and another period of similar duration to get a project off the ground. So by the time a project is ready, a decade is lost. Any initiative that makes land acquisition easier should be welcomed.”

Like several other large projects in India, HCC’s ambitious Lavasa hill station project near Pune has been grounded for three years due to lack of environment clearances and land acquisition issues. But work had picked up pace of late.

CEOs said pragmatic states would decide on a law as the issue was under their jurisdiction anyway. Therefore, rather than using up Parliament’s time discussing an issue which could be residing in the states’ domain, it is best left to them to decide,” said D R Dogra, MD and CEO of CARE Ratings. “This, in turn, will affect the flow of fresh investments, depending on the flexibility shown. In a way, there will be an element of competition added across states as far as investors are concerned.”

Some large infrastructure projects have been stalled due to poor clarity over land acquisition laws. These include the Navi Mumbai airport project, Posco’s new steel facility and Adani’s Dhamra port in Odisha. The government started taking several steps to nudge such companies to start work on projects and had accelerated issuing of environmental clearances in six months, after two years of a slowdown in the clearances.

But for any confirmation of a recovery in the investment cycle, the pick-up has to be broad-based rather than selective, said analysts. R V Kanoria, Chairman of FICCI Task Force on Land Reforms and Policy, said: “Passage of the Land Acquisition (Amendment) Bill with consensus of all the states is the optimal solution.... Nevertheless, in the absence of any consensus, the proposition of states to enact their own land laws aligned to their development requirements could be a useful alternative mechanism, as it would facilitate actualisation of investments....”

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

2.2. Industry hails 'Digital India' move, top CEOs commit to invest Rs 4.5 trillion ($71,42 bn)
Economic Times | Jul. 02, 2015

New Delhi: India's top industrialists including Cyrus Mistry, Mukesh Ambani, Anil Ambani, Kumar Mangalam Birla and Sunil Bharti Mittal applauded the government's Rs 1.13-lakh-crore Digital India programme, saying it had the potential to bridge the digital divide and benefit billions of people through digital solutions in education, healthcare and irrigation sectors.

At the unveiling of the Digital India Week by Prime Minister Narendra Modi, India's top billionaires pledged around Rs 4.5 lakh crore to projects related to Digital India, which could generate employments for some 18 lakh people. "Digital India will help India to create a knowledgeable society and will provide government services within a short time," said Cyrus Mistry, chairman of Tata Sons.

He said Tata Consultancy Services, which is majority owned by the Tata Group, has been an active contributor to e-governance programmes and the company will hire 60,000 IT professionals this year. Reliance IndustriesBSE 0.95 % Chairman Mukesh Ambani said his company would invest Rs 2.5 lakh crore across different Digital India heads, which have the potential to create employment for over five lakh people. "Normally, industry moves faster than government but with Digital India it is different. I have no hesitation in saying that government has moved faster," he said. He also announced setting up of the 'Jio Digital India Start Up Fund' to encourage young entrepreneurs who are setting up businesses focused around the Digital India initiative.

The Rs 1.13-lakh-crore Digital India project is aimed at broadening digital access for all Indians and making sure that government functions and services are available online to citizens. "I dream of Digital India where 1.2 billion connected Indians drive the nation," said the Prime Minister at the launch of the Digital India Week, which will take technology to the villages and block levels over the course of the next week.

Kumar Mangalam Birla, chairman of the Aditya Birla Group, which owns telecom company Idea CellularBSE 1.59 %, said it would leverage its network of 165 million subscribers across 350,000 towns and villages in India to provide mobile-based healthcare and education services as well as weather forecasting advisories and 'mandi' prices to over one million farmers.

The company will also launch a mobile wallet and payment bank as well as invest over $2 billion in the next five years in areas such as electronic manufacturing, energy storage, Internet of Things and development of smart cities. "We are launching a new initiative to partner with and mentor entrepreneurs to commercialise their digitally-enabled product or service. This will provide an opportunity over the next five years to more than 10,000 entrepreneurs, potentially creating over a million new jobs," said Birla.

Appreciating the PM's vision for a digitally empowered economy, Sunil Bharti Mittal, chairman of Bharti Enterprises, said Modi "understands the power of technology and how it can transform the nation". Mittal said his company would build on India's existing extensive telecom network and spend over Rs 1 lakh crore in the next five years. Bharti group company Bharti Airtel is India's largest mobile phone operator.

Reliance Group Chairman Anil Ambani, who helms Airtel's rival telco Reliance Communications, pledged to invest Rs 10,000 crore to fund transformational initiatives across the cloud, digital and telecom space. "The Great India Story has been powered by three long-term drivers: democracy, demographics and demand. A little over a year ago, we added a fourth 'D', which is perhaps even more important: decisiveness," he said, adding that 'Digital India' would add the fifth dimension.

He also exhorted the Reliance Group and the larger Reliance family to enroll with the Digital Locker service, which lets citizens self-certify electronic documents through an Aadhaar-linked digital signature, and was formally launched on Wednesday.

Vedanta Resources Chairman Anil Agarwal, whose speech in Hindi was met with rapturous applause, said the group company Sterlite Technologies is working in Jammu & Kashmir to connect it through a fibre network. But Agarwal spoke of a nobler cause. "We want to provide education through digital medium, or e-Shikhsha. We have set up a prototype near Delhi where children will be provided e-Shikhsha and women will be taught skill development.

If this can be expanded to entire India through the Digital India programme, it will empower women and improve health and education of children," he said. He also announced an investment of Rs 40,000 crore to set up an LCD fab which could potentially employ 50,000 people. The fab is aimed at reducing the electronics import by 20 per cent, in line with Prime Minister Modi's vision to reduce dependence on electronics imports.

Digital India will democratise access to information and there is a need to ensure that citizens have access to information transparently and it is the "first step towards empowering every single citizen", said Azim Premji, chairman of Wipro Ltd. He said Wipro, the third-largest Indian IT outsourcing company, has invested significantly in digital research and development.

Also seen at the event were Isha and Akash Ambani, the children of Mukesh Ambani. Isha, daughter of Mukesh, described the PM's speech as "super energizing, especially for youngsters like me". Brother Akash nodded in agreement, adding that teams at Reliance Jio Infocomm were working very hard for launching the company's much awaited 4G services, which would go a long way in bridging the digital divide through affordable services and handsets.

When asked if Jio's commercial launch will coincide with his grandfather Dhirubhai Ambani's birthday on December 28, he said, "All I can say is I hope so."

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

3. India's $100 billion solar push draws foreign firms
Reuters | Jul. 2, 2015

NEW DELHI/MUMBAI: India's $100 billion push into solar energy over the next decade will be driven by foreign players as uncompetitive local manufacturers fall by the wayside, no longer protected by government restrictions on the sector. The money pouring into India's solar industry is likely to be soaked up by foreign organised projects such as one run by China's Trina Solar - not the country's own solar panel manufacturers.

Last week, Softbank became the latest foreign player to enter India's solar market, leading an investment of up to $20 billion. The Japanese firm said it would consider making solar panels locally, but with Taiwan's Foxconn rather than a local manufacturer. Many Indian solar panel producers have benefited over the past six months from a surge in demand for panels not yet fulfilled by foreign companies. But their small scale and outdated technology will quickly make itself felt when the global players arrive.

"The smaller manufacturers of India, especially the cell manufacturers, will be adversely hit because they are unable to compete both on technology and even on price structures," said Jasmeet Khurana at solar consultancy Bridge To India. India's solar panel makers can no longer turn to the Indian government for help. The government is more concerned about creating jobs quickly and ensuring plentiful power supply in a country known for its many blackouts.

India, in contrast to Chinese and German efforts to protect local producers, has scrapped most restrictions on where equipment that turns sunshine into energy is bought. Last year, it dropped an anti-dumping duty on panel import. Foreign players making panels in India are expected to compete with local manufacturers to fulfil so-called domestic content requirements for government projects.

Trina has unveiled plans for a $500 million plant and US-based SunEdison is investing up to $4 billion in a manufacturing facility. Both are tying up with Indian power firms to build the plants.

SOLAR TARGETS

India has said it expects peak power demand to double over the next five years from around 140,000 megawatts today. To help meet that demand, 100,000 MW of new capacity is to come from solar panels, and of that it wants at least 8,000 MW to come from locally-made cells.

Foreign players manufacturing in India will probably win the bulk of those orders. Indian rivals like Indosolar and Moser Baer produce panels, but they cost 8 to 10 percent more than foreign producers, Khurana said.

It is not yet clear which foreign firms will emerge as the winners, with most of the facilities years away from being built and the big tenders for huge solar parks touted by the government still to be awarded. But those who can quickly build scale will be the most able to compete on cost.

"The lowest cost in manufacturing will only come from scale and integrated facilities," said Sujoy Ghosh, India Country Head at US-based First Solar. First Solar is to build 5,000 MW of solar power before 2020, but will rely on imported panels for now because it is cheaper to buy component parts internationally where they are more readily available.

As for some of India's small panel makers, they are looking to complement the efforts of foreign players instead of trying to derail them. Maharishi Solar, a small manufacturer based in Delhi, is looking to tie up with a foreign company, the company's head Ajay Prakash Shrivastava told Reuters.

It stopped producing solar panels a few years back as it could not compete with foreign manufacturers, primarily Chinese. Shrivastava said import panels are as much as 45% cheaper thanks to subsidies in their home countries and lower borrowing costs. "The Indian manufacturers do have a disadvantage," he said. "We are trying to find a partner who can bring in the latest technology."

4.1. Road sector will see investments of over Rs1 trillion (~$16 bn) this fiscal: Vijay Chhibber
Livemint | Jun. 24, 2015

New Delhi: Although reviving investments in the roads sector is a priority for the National Democratic Alliance government, private investors are still cautious. However, according to road secretary Vijay Chhibber, prospects for private participation are bright because of the proposed hybrid annuity model, which provides fiscal support from the government and takes away the traffic risk from the investor.

The ministry has set a target of awarding road projects of 1,000km per month that could lead to over Rs1 trillion in investments, Chhibber said. He also assured that any change in toll policy will take care of stakeholders’ concerns and provide for compensation in a transparent manner.

Edited excerpts from an interview:

While the ministry has been able to improve its project awards in the last fiscal year, private participation in terms of investment continues to be low. The government-funded model is not sustainable in the long run. How are you planning to change this?

The roads ministry has awarded 8,000km of national highways (NH) in the financial year 2014-15. Though only about 700km were awarded on BOT (build, operate and transfer) model last year, with the right policy interventions in this fiscal (2015-16), we believe that private investment will soon return to this sector. Already, we have received bids for eight road projects under BOT (toll) for around 885km of NH with total project cost of Rs11,600 crore.

In the new financial year, you are looking to award 10,000km of road projects. How much investment do you see in the road sector in the year?

This year, we hope to award a substantial number of roads on BOT (toll) and hybrid annuity models. We have finalized our MCA (model concession agreement) and RFP (request for proposal) document for hybrid annuity and around 20 projects would be rolled out by the end of this month for an aggregate length of around 1,260km. We have a target of awarding about 1,000km per month. The above would entail a spend of around Rs1.1 lakh crore in financial year 2015-16 to provide impetus to the infrastructure sector in general and the road construction industry in particular.

The other major worry that the sector has—and is seen as an important reason making investors unsure about investing in road projects—are statements by the road minister on the discontinuing of toll collections from certain projects. Given that toll is the main source of revenue based on which the private sector makes investment, lack of clarity and signs of tinkering with the toll policy in the future have developers and investors worried. Will the road ministry make its stand clear on the toll policy?

The toll policy shall continue as it earns substantial revenue for the ministry and the financing plan for future development of the National Highways Development Project factors toll plough-back as a source of budgetary support for highway development. The system of electronic toll collection across all operational toll plazas (around 300) of the country is in progress and has already been completed in 196 toll plazas. This will help commuters to pay toll in a hassle-free manner. However, no policy prescription is cast in stone and can be dynamic. Notwithstanding that, I can only assure that any change in the extant toll policy will be made after due consultations with all stakeholders, and any adverse impact on account of change in policy will be fully compensated in a transparent and time-bound manner.

At what stage is the proposed Bharat Mala project? Is this project your priority?

We envisage the development of the Bharat Mala project comprising an estimated 5,500km of highway length with an investment in excess of over Rs55,000 crore all along borders and coastal areas, stretching from the north-east part of India till western India. Apart from providing connectivity to the ports under the Sagar Mala project, this project will provide seamless connectivity along the borders with Nepal, Bangladesh, China, Pakistan and Bhutan, which is crucial for strategic reasons. This is a priority programme and we will shortly be seeking formal approval from the government. In anticipation, the detailed project reports are in progress.

The issue of reviving bank lending continues to be a challenge given the bad loans most banks have on their books from lending to this sector. Any measures being taken to address this?

We have built in enough clauses to increase the comfort level of the lenders in the MCA for BOT (toll), which will be amended shortly. The banks are expected to do due diligence when they lend money to developers.

What new measures or models are under consideration to improve investments in the sector? Sale of tolling rights for completed road projects and new models such as the Swiss Challenge are being spoken about.

We are in the process of finalizing the modalities to hive off completed highway projects which have been built on EPC (engineering, procurement and construction) mode with defect liability period (DLP) and without DLP. This will help to raise funds for new highway development. It will create a new business vertical for those players who are interested in operations and maintenance of the roads with tolling rights over, say, a 20-year tenor. This tolling-operations-transfer model is in advance stages of conceptualization. You will come to know of it soon.

Swiss Challenge is usually a mode of delivery for new projects. In India, it is still new. It is based on the premise that a developer who has core competence in a particular field will come and prepare a detailed project report (DPR) for a project, which will then be bid out by the government. The first right of refusal to do the project shall lie with the developer who made the DPR. This method can be tried for developing expressways, where superior technology for road-building can be showcased.

There is also a concern that somewhere in its bid to bring private investors back, the government may be bending back too much and taking most of the risk away from the private sector. How will you make sure that it remains a balanced reallocation?

The government is playing a supportive role to encourage private participation in highway development by reallocation of risk. There is no question of bending in anyone’s favour. It is always imperative to design concession agreements with the underlying objective to realign the revenue streams of the project with debt repayment stream.

The more there is a mismatch in this scheme; the brunt shall have to be borne by the authorities or financial institutions. The ministry is laying a lot of emphasis on project preparation and ensuring that LA (land acquisition) and statutory clearances are given to the private developers on time. Moreover, we would prefer to have a healthy mix of different modes of delivery of projects, depending on traffic, location and various other factors. The over-dependence on any one mode, say, BOT (toll), as in the recent past, has not been useful, particularly in times of economic stress. Learning from our past experiences, we intend to have a healthy mix of government and private-funded projects. This should be the way forward.

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

4.2. Road projects worth Rs 13,000 crore awarded under PPP mode this fiscal
PTI | Jun. 28, 2015

NEW DELHI: At a time when PPP projects in highways sector had taken a backseat, government's renewed focus on it has revived developers interest with projects worth about Rs 13,500 crore either awarded or in advanced stages of finalization this fiscal so far.

In sharp contrast, barely Rs 6,300 crore projects could be awarded in 2014-15; while the number of projects awarded was only two in 2013-14.

"Over-leveraged financials due to excessive exposure to highways and other infrastructure projects, equity crunch, constraints like banks reaching the ceiling as per sectoral exposure norms coupled with regulatory and other hurdles had resulted in developers shying away from PPP projects but continued efforts to boost the sector have revived their interest," an official said.

Further, inadequate project preparation and lack of land acquisition on the part of NHAI had also resulted in discouraging prospective bidders to participate in new project bids, the official said. To address these issues, the government is taking conscious steps including emphasis on better project preparation and land acquisition, simplified procedures for appraisal, exit policy for concessionaires, amicable settlement of disputes, operationalization of IMGs, amendments to the model concessionaires agreement and one-time infusion for languishing projects, he added.

Besides, innovative project innovation models like hybrid annuity model was introduced and multi-lateral funding agencies like World Bank, ADB were roped in. "As a result, participation of the Private Sector in PPP (public-private-partnership) highway projects has started showing signs of recovery ... In 2015-16, one BOT (Toll) project has been awarded and bids received and are under process for five. The length of these 6 projects is around 665 km and estimated cost is Rs 9,200 crore," the official said.

These include Solapur-Bijapur project in Maharashtra, Raipur-Bilaspur in Chhattisgarh, Mukarba ChowkPanipat in Haryana, Agra-Etawah bypass in Uttar Pradesh and Biaora-Dewas and Guna-Biaora in Madhaya Pradesh awarded to builders like Uniquest Infra, Essel Projects, Essel Infra, IRB Infra, Oriental Structural and Dilip Buildcon.

Besides, IL&FS Transportation Networks has emerged as the lowest bidder for two highways projects worth Rs 4,174 crore in Maharashtra, bids for which were invited by the National Highways Authority of India (NHAI). Both the projects were earlier awarded to Larsen & Toubro but NHAI's inability to acquire required land had led to the developer exiting from the project.

The official said in contrast to the current trend, in 2014-15, only five BOT (Toll) projects worth Rs 6,300 crore involving 734 km could be awarded. The projects were Aurangabad-Yedishi in Maharashtra, KaithalHaryana/Rajasthan border project in Haryana and Rajasthan, Bikaner-Phalodi in Rajasthan, Shivpuri-Guna in Madhya Pradesh and Hospet-Chitradurga in Karnataka.

5.1. J P Nadda: Government places highest priority on strengthening the health sector
Press Information Bureau | Jul. 01, 2015

New Delhi: “The government places the highest priority to strengthening the health sector in the country. There is the highest level of political commitment for this” stated Shri J P Nadda, Minister for Health and Family Welfare stated this while delivering the keynote address at the Health and Immunisation Conference organised by the CII, at New Delhi today. Shri Nadda stated that the National Health Mission (NHM), comprising of National Rural Health Mission (NRHM) and the National Urban Health Mission (NUHM), aims towards providing accessible, affordable, accountable, and effective primary healthcare facilities, especially to the rural population of the country with a particular emphasis on poor and vulnerable sections of the population. It encompasses programmes to cater to requirements of pregnant women, children and communicable as well as non-communicable diseases.

He added that reducing maternal and child mortality are the foremost goals of National Health Mission, which has significantly fostered plans for child health in decentralised manner up-to district level. Steady progress in curbing child deaths has been achieved. India’s Under 5 Mortality Rate declined from 126 per 1,000 live births in 1990 to 49 per 1,000 live births in 2013, the Minister informed.

The Health Minister said that Mission Indradhanush has been able to fill in the gap in fully immunising children who have been left unvaccinated or are partially vaccinated under the routine immunisation programme. Three rounds have been completed and the fourth round will start from 7th July, the Health Minister stated. The Minister added that of all the methods of preventing the under-5 mortality, immunization is one of the most cost-effective public health interventions for protecting children from life threatening conditions, which are preventable.

He stated that during these immunization rounds, 56.6 lakh children have been vaccinated and a total of 14.4 lakh children were fully vaccinated. Also, a total of 15.7 lakh pregnant women were vaccinated with tetanus toxoid vaccine during these three rounds. Shri Nadda also stated that cold chain network in the country has been the backbone of the Immunization Programme to ensure that right quantity/ quality of vaccines reach the target population.

The Health Minister sought the participation and partnership of the private sector in providing accessible, affordable and cost effective health care services in the country to complement the efforts of the government. He stated that with the support of the private sector, we will be able to further strengthen the Cold Chain and Supply Management system in the country.

Also present at the function were Dr. Naresh Trehan, Chairman, CII Committee on Healthcare; Shri Jamshyd Godrej, MD and Chairman, Godrej and Boyce; and Prof. Ricjard Feachem of University of California, Berkely.

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

5.2. More variants coming on social security schemes: Arun Jaitley
Business Standard | Jul. 14, 2015

New Delhi: The government will, over the coming years, launch variants of three ambitious social sector schemes to bring more people under these plans, Finance Minister Arun Jaitley said on Monday. The schemes are the Pradhan Mantri Suraksha Bima Yojana (PMSBY), Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) and Atal Pension Yojana (APY).

Jaitley, speaking at an official meeting in the Parliament Annexe, also said the government was considering bringing all social security schemes under one roof, according to an official press release. “As our economy is prospering, these schemes will be allotted more resources and there’ll be more variants with improvements,” Jaitley said, adding they were committed to the goal of universal social security.
Jaitley said so far, 78.4 million had registered under PMSBY, 27 million under PMJJBY and 46.9 million had joined APY.

At present, 11 per cent of the population is covered under pension schemes and only 20 per cent are insured. The government wishes to bring as many as possible under these, the minister said. With regard to the financial inclusion initiative of the government, Jaitley said the Pradhan Mantri Jan Dhan Yojana (PMJDY), was a success, 167.3 million accounts having been opened in a year, with total deposits of Rs 19,991 crore. He said the government was subsequently encouraged to widen the approach to social security for all sections of society, by introducing micro insurance, micro pension and micro credit schemes.

Later, Hasmukh Adhia, the financial services secretary, made a presentation on implementation of these. Under the PMJDY, he said the number of zero balance accounts had come down from an initial 75 per cent to 52 per cent. As on July 8, about 148.6 million RuPay cards had been issued under the scheme to account holders.

Under PMJJBY, 114 claims were made till July 10 and 54 settled. Under the pension scheme, 46.9 million had subscribed and of those, 34.8 million had already got their Permanent Retirement Account Number, said Adhia, adding a corpus of Rs 14.9 crore had accumulated so far under the scheme.

On the Pradhan Mantri Mudra Yojana (PMMY), the secretary said it was aimed at augmenting the flow of funds to the micro finance sector. An overall disbursement target of Rs 1.22 lakh crore was set for banks and financial institutions for 2015-16. Till end-June, Rs 6,185 crore was dispersed by public sector banks and Rs 1,592 crore by regional rural banks under PMMY.

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

– AGRICULTURE, FISHING & RURAL DEVELOPMENT

6. Centre to scale up Karnataka's e-Mandi model to national scale
Economic Times | Jul. 07, 2015

Bengaluru: An e-market for farm products in Karnataka has been so successful that the NDA government is setting aside politics and holding up the Congress-ruled state's programme as a model for all others. In fact, the Modi government is going to scale up Karnataka's e-Mandi model to the national level.

Agriculture Minister Radha Mohan Singh told ET that he is so happy with the model that he is taking a delegation from 21 states to Hubli in Karnataka to "see, learn and replicate" the Karnataka system in their states. "Karnataka ne bahut achcha kiya hai. Others states are also trying things, but I want them to see the Karnataka model and replicate it all across the country," he said.

Karnataka's Minister of State for Agriculture Krishna Byre Gowda said arrangements were being made to demonstrate to the delegation the e-Mandi system, which has generated a revenue of Rs. 8,521 crore in the last 16 months, trading commodities like copra, tur, paddy, ragi, groundnut, til, maize and so on. "The delegation, including ministers from all political parties, is coming on Thursday and Friday. We are very happy that the Union government has taken this project beyond politics and is sharing the benefits of the programme to all states," he said.

Andhra Pradesh's Chandrababu Naidu has already visited Karnataka for a live demonstration, while Odisha and Rajasthan have asked for the e-Mandi platform. The Centre also has big plans to connect farmers and traders from across the country within six months on the National Agriculture Market, an e-platform based on the Karnataka model.

Singh said there was need for uniformity in levies and licenses across the country, so that trading can happen as per a single law and a single marketing policy. "We will give money from the Agritech Infrastructure Fund to the states, they can buy computers, set up e-infrastructure, hire IT engineers and help the farmers and traders get the best prices across the country. Karnataka has done this the best," he said.

Karnataka has connected all its major 55 markets and has set up a web-enabled portal that records all the lots of products available for sale. Each of the state's 30,000 traders have been given a username and password. "A trader sitting in Bengaluru will be able to see the number of bags of tur available in Gulbarga, Raichur or Gadag. Depending on the distance the trader has to transport the product, he bids an amount on the bags available. The farmer sees the highest price he gets and decides who he wants to sell it to," Manoj Rajan, Rashtriya E-Market Services managing director and additional secretary (cooperation), who set up and implemented the e-Mandi project for Karnataka, told ET.

Copra, which was trading at Rs. 6,000 per bag last year, is trading at Rs. 13,000 now, while moong dal is trading at 30% more, due to the market, Rajan said. Besides the online auction route of selling perishable goods, which is similar to the flower auction in The Netherlands, the non-perishable products like tur and paddy go through the e-tender route, where bidders don't know what the others have quoted. The platform also allows bilateral trade and fixed price, like the minimum support price given by the government.

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

7.1. Centre proposes Rs 8.50 lakh cr ($125 bn) investment in railways in five years
Business Standard | Jun. 26, 2015

Mumbai: Indian Railways has tied up funds for the next two years for its ambitious modernisation programme. Union minister for railways Suresh Prabhu conveyed to institutional investors the government would be spending Rs 8.50 lakh crore ($125 billion) over the next five years to modernise Indian Railways. Prabhu said: “We have already received a 30-year loan from LIC with a moratorium of five years. Pension funds too are more than willing to fund us and, frankly, we are spoilt for choice. Funding is not an issue for the next two-three years time.”

He said the rail network was the backbone of the integrated market that would be created after the introduction of the goods and services tax. “A market cannot be built by one tax system alone but needs to be supported by infrastructure, and it will come from the railways. Logistics will ultimately decide how India becomes a manufacturing hub,'' Prabhu said by video conferencing at a seminar on infrastructure organised by Edelweiss and Wells Fargo.

He said the Cabinet had on Wednesday cleared the Rs 82,000 crore dedicated freight corridor, which would decongest the existing network. The project is expected to be complete in four years. Nearly 90 per cent of the land has been acquired and big contracts have been issued in the last six months.

"The railways have had no investment or very little investment during the last decade. So there was no asset creation nor there was there maintenance of existing assets. Asset failures cause delays in railway movement. in the current regime, asset creation has become the norm. The proposed investment of Rs 8.50 lakh crore will transform the railways in the next five years and they will contribute two to three per cent of the GDP,'' he said.

Prabhu said his ministry had announced an annual budget of Rs 1,10,000 crore. Besides, the ministry has entered into an agreement with Life Insurance Corporation for 30-year loans with a five-year moratorium. Funds will also be mobilised from multilateral agencies and pension funds.

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

7.2. Cabinet nod for revamping 400 railway stations
Livemint | Jul. 17, 2015

New Delhi: The Union cabinet on Thursday approved a proposal to redevelop 400 railway stations using a contract method called the “Swiss challenge”. Finance minister Arun Jaitley said such stations could become catalysts of economic activity in their surrounding areas.

“These 400 railway stations in virtually 400 centres of the country will become centres of developmental activity. The railway ministry and board will now take this process forward,” Jaitley told reporters after a cabinet meeting in New Delhi on Thursday.

Jaitley explained that under the Swiss challenge method, “any person with credentials can submit a development proposal to the government for the development of classified railway stations. That proposal will be put on the Internet and a second person can give suggestions to improve or beat that proposal”.

He added that an expert committee will accept the best proposal and the original proposer will get a chance to accept it if it is an improvement on his own proposal. Commenting on the cost of the project, Jaitley said, “The cost will be of the developers, the government and public will get its benefits. It will be revenue-sharing, cash, space-based.” After the cabinet decision, railway minister Suresh Prabhu tweeted, “Very big step in passenger service, modernization, mega investments, big job creation. Cabinet approve. Budget announcement fulfilled. Stn (Station) dev (development) with complete transparency with PPP. Top class amenities, shopping etc. Cities get icons.” PPP is short for public-private partnership.

The Swiss method, however, is already in use in states such as Karnataka, Rajasthan, Madhya Pradesh and Gujarat for road and housing projects. In 2009, the Supreme Court approved the method for award of contracts. This method can be applied to projects that are taken up on a PPP basis but can also be used to supplement PPP in sectors that are not covered under the framework.

“The Swiss challenge has its own complexes. It requires the private sector to approach the government and make the initial investment. Provided that we are able to respond to the proposals, economic activity shall follow,” said Vishwas Udgirkar, senior director at the consulting firm Deloitte.

The cabinet committee on economic affairs (CCEA) also approved setting up of of an intra-state power transmission system in Andhra Pradesh, Gujarat, Himachal Pradesh, Karnataka, Madhya Pradesh, Maharashtra and Rajasthan at an estimated cost of Rs.8,548.68 crore.

The transmission links are to help in evacuating the green power capacity being added in these states. “Creation of an intra-state transmission system will facilitate evacuation of renewable power from generation stations to load centres,” the CCEA statement said. Having set an ambitious green energy target of generating 175,000 megawatts (MW) by 2022, India has also started work on setting up transmission corridors to supply green power across the national grid.

The cabinet also approved Rs.700 crore of additional funds for recapitalization of weak regional rural banks (RRBs). These banks are unable to maintain their minimum capital to risk weighted assets ratio (CRAR) of 9%, and the cabinet decision will will help them improve this ratio, the cabinet note said.

“A strong capital structure and minimum required level of CRAR will ensure financial stability of regional rural banks which will enable them to play a greater role in financial inclusion and meeting the credit requirements of rural areas,” it added.

The cabinet also approved the second phase of the eCourts project at an estimated cost of Rs.1,670 crore. It will enable universal computerisation, use of cloud computing, digitization of case records and enhanced availability of e-services through e-filing, e-payment gateways and mobile applications, etc.

The cabinet also gave its ex-post facto approval for the Repealing and Amending (Third) Bill, 2015, which was introduced in the Lok Sabha on 13 May, for repealing 187 redundant laws. The cabinet also approved the introduction of a new bill in the Lok Sabha for the repeal of 295 Acts.

The cabinet also gave its approval for a proposal to permit utilization of India’s capital contribution to the SAARC Development Fund (SDF) that will help in “promoting projects such as cross-border infrastructure. Such projects will help improve intra-SAARC trade and growth potential of the SAARC region, and also in promoting financial inclusion and social security...” SAARC stands for the South Asian Association of Regional Cooperation.
Utpal Bhaskar and Sayantan Bera contributed to this story.

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

8.1. Muthoot group to enter dairy business
TNN | Shenoy Karun | Jun. 27, 2015

KOCHI: With its pilot project at Kozhippara, a small village near the Kerala-Tamil Nadu border, the Muthoot Pappachan Group (MPG) is entering the dairy business. Already a leading name in gold loans, the group plans to scale up the project across Kerala, if it turns successful.

"The project will start in six months at a two-acre plot at Kozhippara, near Walayar," said Thomas Muthoot, executive director, MPG. "Initially, we will process 6,000 to 8,000 litres of cow milk, sourced from within a 30- 40km radius," he added.

It first noted the business opportunity while studying the financials of marginal farmers who took loans from their microfinance division to buy cows. "If you look at farmers in Tamil Nadu, they get only Rs 20-22 per litre, whereas the selling price is Rs 40-45 at local markets. The difference is pocketed by middlemen," said Udeesh Ullas, deputy vice-president (operations), microfinance division, Muthoot Fincorp.

MPG has 50,000 small dairy farmers among its customers. "If you don't support them, these marginal farmers who depend on a couple of cows for survival will disappear five years down the line," Ullas said. Hence, the group formed the venture at an investment of Rs 1.2 crore.

Initially, the firm will source milk from 400 farmers across 30 villages in Kerala and Tamil Nadu. The firm's microfinance division currently has 5,000 dairy farmers in the catchment area of the pilot project. "But, we are open to buying milk from our non-customers too," Muthoot said.

MPG also plans to diversify later on by setting up a dairy farm and a 100-acre farm to grow cattle feed. The group is also into housing finance, two-wheeler finance, precious metals, hospitality and real estate.

8.2. Mahindra drives into edible oil business; eyes dairy segment also
PTI | Jul. 17, 2015

KOLKATA: Mahindra & Mahindra's agricultural business division on Friday entered into edible oils business and plans to get into dairy and pulses retail segments as well. The company launched the 'NuPro' brand mustard oil in the premium segment for sale in the metropolis and its vicinity.

"Our initial focus in the mustard oil segment is Kolkata and its surroundings as it is the biggest market for this type. Then the product will be launched in neighbouring Odisha and Jharkhand," Ashok Sharma, president and chief executive of agri-business of Mahindra told reporters here.

He said the company will initially have contract manufacturing of the oil at Jaipur. "Depending on the response, we will then think of setting up our own plant," he said. With the average industry margins in edible oils hovering around three per cent, Mahindra was expecting to get around five per cent after the initial period as a lot of money would have to be spent in building the brand.

Later, it would also enter other oil segments like sunflower, soya and rice bran among others, he said. Mahindra is also planning to enter the dairy business this financial year with the launch of milk, Sharma said, adding that it would gradually move towards the foods segment.

Sharma said that the company would also launch pulses for the retail segment. Presently, it was selling them through B2B channels. In the last four years, revenue from the agri-business increased from Rs 70 crore to Rs 580 crore.

"This fiscal, we intend to clock a revenue of Rs 1000 crore," he said.

8.3. Indian seafood exports at all-time-high, record a growth of 11% over previous year
Economic Times | Jul. 03, 2015

Kochi: Seafood exports from India touched an all-time- high of Rs 33,441.61 crore for the year 2014-15, recording a growth of 11 per cent over the previous year. The volumes at 10,51,243 tonnes showed a growth of 7 per cent. In dollar terms the export value stood at $5.51 billion, up by 10 per cent year-on-year.

Frozen shrimps continued to be the flagship product in the seafood exports accounting for a share of 34 per cent in quantity and 67 per cent in dollar value of the total exports. Vannamei grown in aquaculture farms was the main item under shrimps. Of the overall seafood export, shrimps comprised 3,57,505 tonnes valued around $3.7 billion.

Leena Nair, chairman of Marine Products Export Development Authority (MPEDA), the nodal agency for promotion of export of marine products from India, said the increase in exports has been achieved despite problems in the world market like depreciation of Euro, weak economic condition in China and devaluation of Yen.

The supply from South East Asian countries also improved during the year resulting in the continuous drop in the prices of shrimp, the principle commodity of Indian seafood export basket. USA was the largest buyer of seafood products with 26 per cent share followed by South East Asia with 25.7 per cent share . European Union took the third position with 20 per cent . Frozen fish was the second largest exported item accounting for a share of 29 per cent in quantity and 11 per cent in dollar value. Almost 75 per cent of the exported items came from the aquaculture farms and while the rest was contributed by the sea catch.

Encouraged by the performance of seafood sector, MPEDA has set an export target of $6.6 billion for the current fiscal. According to Leena Nair, the country would focus on diversification and value addition in the current year in marine products. Among the ports, Pipavav in Gujarat came first in seafood exports in quantity while Vizag in Andhra Pradesh bagged the top position among the ports in value.

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

9. Centre eyes to set up green energy corridors
Business Standard | Jul. 14, 2015

Chandigarh: The Ministry of Petroleum & Natural Gas is mulling to develop green energy corridors across the country. The ministry is planning to have corridors in Northern region namely Delhi-Jaipur, Delhi-Chandigarh, Delhi-Haridwar and Delhi-Agra. Similar type of green corridor is proposed for Allahabad-Kanpur-Varansi, Banglore-Mumbai-Pune and Andhra Pradesh. The union ministry is planning to extend the network of green fuels like Compressed natural gas (CNG) and Piped Natural Gas (PNG) to these cities.

“We are planning to promote green energy in an aggressive manner and planning to make green energy corridors across the country. We are planning to have one in Northern region spanning across Delhi, Chandigarh, Agra and Haridwar. Also, we have plans to extent green energy network to Allahabad-KanpurVaranasi in Eastern region besides Banglore- Mumbai- Pune. Similar kind of corridor proposed in Andhra Pradesh, as the state government has shown keen interest in setting up,” said ’ Dharmendra Pradhan, Minister of state(I/C), Ministry of Petroleum & Natural Gas on the sidelines of a seminar ‘Bio-Fuel Programme in India-The Way Forward.

He further added that the Union government is planning to extend CNG and PNG network across these corridors in near future with Bio-Fuel as also one of the composition of the corridor. Earlier addressing the conference, he said, “We have not achieved the desired result as far bio-fuel blending is concerned. As far blending of bio-diesel with diesel is concerned, it has not started. In case of blending of petrol with bio-ethanol it is only 3 per cent because of several reasons. We need to increase their consumption and production to reduce the import bill.
Our government is focused towards promoting bio-fuel blending and will do every possible steps so that their consumption of Bio-Fuel is increased and to reduce dependence on import of crude oil.” On being asked the other measures, he added that the centre is also planning to equip the smart cities with green energy. “I personally think that the smart city should have smart energy and the gas based energy like CNG and PNG is preferred choice. So, we are planning to extend green fuel to upcoming green cities proposed by the centre government, “he added. He also informed that his ministry is planning to introduce policy for Green Cooking Energy.

In addition to this for boosting the use of clean fuel, he informed that the ministry is planning to triple the number of CNG station in Delhi in next two-three years for boosting the use of clean fuel and petroleum.

At present around 300 CNG stations have been commissioned in Delhi. During the peak hours, vehicle owners have to wait in queues at the CNG stations, as the time taken to fill CNG into vehicles is comparatively more than that in case of Liquid fuels.

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

– INDUSTRY, MANUFACTURE

10.1. iPhone maker Foxconn to set up 10-12 manufacturing plants by 2020, create 1 million jobs: Chairman
ET Bureau | Jul. 11, 2015

NEW DELHI: Foxconn Technology Group, the world's largest contract manufacturer, is aiming to create at least a million jobs by setting up 10-12 manufacturing facilities across the country by 2020, its chairman said.
Terry Gou, head of the maker of iPhones and iPads for Apple and Kindles for Amazon, told reporters Friday on a short trip to India that Foxconn would look to set up the manufacturing plants, initially in five states including Andhra Pradesh, Gujarat, and Maharashtra and expand to other states across the country by 2020.

It also plans to set up including data centers and incubators in cities like Delhi, Mumbai, Bengaluru, and Hyderabad. The company is also looking to invest in Indian internet start-ups, small-medium enterprises and handset makers. "We not just aim to create basic jobs but jobs for skilled manpower in the country," Gou said. He was in Delhi and Mumbai on Friday and will be in Bangalore on Saturday on a whistle-stop visit to India.

He however pointed out that electricity supply, water, logistics, manpower and different tax regulations are some of the hurdles that the government needs to take care of for Foxconn to establish its factories in the country.

Gou though added that the current government is far more supportive of manufacturing in India than the government 10 years back when it set up a manufacturing plant in Chennai. Foxconn has had to shut the plant due to continuing labour unrest. The component-making plant was a key supplier to Nokia, which shut operations last year.

The Taiwan-based firm, also known as Hon Hai Group, has a client list that includes Apple, Cisco, Dell, Microsoft and Hewlett-Packard, plans to make mobile handsets, tablets, TVs electronic products, batteries and key electronic components, routers, set-top boxes and printers among other products in India, the top executive said.

Gou said that Foxconn would look at making India as a manufacturing hub to not just produce products for the consumption of domestic market but to cater to other markets as well. "We will help local companies and help them design, and manufacture components and devices locally, enabling them to start export," Gou said.

ET, in its June 24 edition, had reported that Foxconn will soon start assembling smartphones for Chinese brand Xiaomi in a plant located in Sri City in Chennai, and that it plans to set up 10-12 manufacturing plants with an initial investment of some $2 billion (Rs12,800 crore). It has already been in talks with a number of Indian, Chinese and multinational handset brands for the production of smartphone in India. Gionee recently confirmed its talks with Foxconn for contract manufacturing in India.

Gou is also meeting a number of internet-based start-ups, small-medium enterprise and device manufactures in India for potential tie-ups and investments under the company's broader strategy, called Internet Plus. He said that Foxconn has expertise in content, information processing, cloud, and bandwidth, besides hardware. "We will partner with Indian companies to deliver this," he said.

Gou said he met with executives of a number of Indian enterprises, including Bharti's Hike Messenger and Snapdeal. However he didn't share the details of the talks he held with these companies. Foxconn's expansion plan ties in with the India push of Japanese telecom and Internet giant Soft-Bank. Recently, it tied up with SoftBank and Bharti Enterprises to launch a joint venture with in renewable energy that will invest $20 billion over 10 years.

SoftBank Chairman and CEO Masayoshi Son recently said that his group and Foxconn are in talks to form a joint venture for electronics manufacturing in India. The Taiwanese company will lead the venture with SoftBank playing supporting role. There is speculation that Bharti Enterprises may also join them.

10.2. Make in India: After Samsung, HTC to manufacture mobile handsets in the country
Economic Times | Jun. 30, 2015

Kolkata/New Delhi: HTC has finalised its 'Make in India' plans, becoming the second major global smartphone maker to produce handsets in the country, after South Korean rival Samsung Electronics. The Taiwanese premium smartphone maker has entered into an agreement with Global Devices Network, which set up a manufacturing and assembling unit three months ago in Noida, to make the handsets on contract.

Trials have already begun and commercial production is expected to start from mid-July, initially catering to HTC's requirements in India and eventually Africa and the Middle East, three senior industry executives said. An email sent to HTC India did not elicit any response till Monday press time. Global Devices Network managing director Nitesh Gupta confirmed the company is in talks to start commercial assembling of HTC smartphones, which should be finalised by next month. "It's a contract manufacturing agreement," he said, declining to share further details.

Global Devices Network already produces smartphones for Zen and is in talks with other device sellers. It is owned by the Gupta family of New Delhi and distributes Samsung smartphones, manufactures mobile phone accessories, invests in companies that distribute HTC smartphones and runs a cellphone retail chain. HTC smartphones made in India will initially range from its entry-level to mid-segment devices, priced between Rs 10,000 and about Rs 25,000, which are sold under the 'Desire' series. It will set up its quality control unit in the contract manufacturer's plant. The company does not plan to assemble its flagship 'HTC One' series smartphones in India, the industry executives said.

"Besides the evident duty differentiation of 6% to 6.5% that companies would get after making in India, they will also get access to a big market and labour," said Jayanth Kolla, co-founder of telecom research firm Convergence Catalyst.

Global smartphone makers including Sony, LG, Xiaomi and Motorola, too, have evinced interest in manufacturing in India due to the growth potential of the country's smartphone market and to avail of tax benefits drawn by Prime Minister Narendra Modi's 'Make in India' policy. Research firm Gartner's principal analyst Anshul Gupta expects Indian smartphone sales to grow 40% in 2015, contributing to over 38% of overall mobile phone sales, up from 27% in 2014.

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

11.1. Boost to Make in India: Modi govt awards 56 defence licences to private cos like Mahindra, Tata & Pipavav
ET Bureau | Manu Pubby | Jun. 27, 2015

NEW DELHI: The Narendra Modi government has awarded a record 56 defence manufacturing permits to private sector entities in the past year, which is more than the 47 licences its predecessor UPA granted in the preceding three years combined and underlines its determination to have indigenous defence production as a cornerstone of its 'Make in India' drive.

Data released by the Department of Industrial Policy and Promotion (DIPP) shows that a slew of applications, some of which had been pending for more than four years, have been cleared since the BJP government came to power, in what is a major endorsement by it of the Indian private sector's ability to operate in an arena that has until now been the preserve of foreign vendors and state-run entities. The permits are the first step in the process to enable firms such as Mahindra, Tata and Pipavav to set up production units for major military equipment.

The Tatas will now be able to upgrade major fighting units like the T 90 and T 72 tanks of the Indian Army, while Mahindra, which has been steadily expanding its defence business in the past year, has been given permits in a number of areas, including manufacturing naval systems like torpedoes, sea mines and boats. Subsidiary companies like Mahindra Telephonics Integrated Systems and Tech Mahindra Ltd too have got defence permits.

The permits are not only for the big boys of Indian industry, many of whom have existing defence arms and will be able to diversify their portfolios.. A slew of new small firms are poised to enter the sector based on these clearances. Bullet Proof equipment manufacturer MKU for example will now be able to manufacture night vision devices.

Bangalore-based Dynamatic Technologies has been granted a permit to manufacture Unmanned Aerial Vehicles.Pipavav Defence and Offshore Engineering Company (PDOC), which is now being acquired by the Anil Ambani-run Reliance, has got four permits to manufacture items ranging from medium tanks and howitzers to missiles, sensors and torpedoes. Experts said the government had done its bit and it was now up to the corporate sector to run with the baton.

"It is now up to the private sector to leverage these enhanced flexibilities and deliver on the ground," said Ankur Gupta of Ernst & Young India.

The expedited clearances are part of a series of measures taken by the government over the past year to open up the defence sector.

Since taking charge in May last year, the government has increased the foreign investment limit for the defence sector to 49% and even up to 100% in select cases.

It has already made the process for application online and the validity of the Industrial license has been enhanced to seven years. For smaller items like components, speedy DIPP clearances are already being given.

A new defence procurement policy is expected over the next few weeks that will further clarify complex matters such as the offset policy, blacklisting process as well as a specific route for the Make in India process.

11.2. Russia wants to make India a global hub for submarine upgrade, maintenance and repair
Economic Times | Jul. 09, 2015

St. Petersburg: Russia says that it wants to make India a global hub for the upgrade, maintenance and repair of conventional submarines and its leading shipyard is in final talks to select an Indian joint venture partner for a mega project to set up facilities here.

With contracts worth several thousand crores in the offing for the upgrade of Russian origin diesel electric submarines — several from the Indian Navy itself — the joint venture has the potential of making the selected Indian shipyard a serious player in the international market.

Officials from the state-run Zvyozdochka shipyard told ET that a memorandum of understanding could be signed within a month as it is in final talks with an Indian partner for the project. Russian engineers have already visited the Indian yard and advised it on changes to be made as well as investments needed to execute the project.

"We are in the process of negotiating with an Indian shipyard and if these negotiations are successful, it could become our partner for future tasks of modernising Kilo class submarines. Not just for India but for third nations as well," Evgeny V Shustikov, Deputy Director General of Zvyozdochka told ET.

While the Russian side is reluctant to share details, it is learnt that several rounds of talks have taken place between Zvyozdochka and the Gujarat-based Pipavav Shipyard that has recently been bought over by Anil Ambani's Reliance. A final round of talks are expected to take place in August.

Explaining the project, Shustikov says that the Russian side is looking at a joint venture model with partners in India who can execute work orders from the region. India alone is looking at the imminent second life extension of at least four Kilo class submarines. This would give the fleet almost 15 more years of service life. "Our estimate is that we will be loaded with work for at least 15-20 years," Shustikov says. Other nations that operate Kilos in the region include Iran with three submarines of the same class and Nigeria with six. In addition, Russia has recently sold six upgraded Kilo class submarines to Vietnam that will require overhauling and repairs in the coming years and is pursuing several other orders in the region.

"India could become a second center in the world for Kilo class upgrade. For certain nations it is easier to send the submarine for repair to India than to any other place. It is also a good chance for India to master the repair and upgrade of this class of vessel," Andrey Baranov, deputy CEO Rubin design bureau that has designed the Kilo class, told ET.

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

12. Boeing and Tata announce strategic aerospace partnership to Make in India
Livemint | Jul. 16, 2015

Mumbai: US-based Boeing Co. and Tata Advanced Systems Ltd on Wednesday agreed to jointly develop products and platforms in aerospace and defence manufacturing, and access new markets together. The agreement was signed by Shelley Lavender, president of Boeing Military Aircraft, and Sukaran Singh, managing director and chief executive officer of Tata Advanced Systems.“This agreement with TASL (Tata Advanced Systems) is significant because it demonstrates Boeing’s commitment to expand its aerospace manufacturing footprint in India,” Lavender said.

“As we step into our 100th year in business, a new aerospace partnership with India is the perfect milestone to accelerate the momentum we have generated for making in India,” said Pratyush Kumar, president for Boeing India. To be sure, Tata Advanced Systems already manufactures aero-structures for Boeing’s CH-47 Chinook and AH-61 choppers.

On Monday, Mahindra Defence Naval Systems Ltd, a unit of the $16.9 billion Mahindra Group, said it has tied up with the UK’s Ultra Electronics to build equipment for underwater warfare. Earlier this month, Mahindra Defence Systems Ltd, the defence division of the Mahindra Group, had signed an in-principle agreement with Europe’s Airbus Helicopters to set up a joint venture to manufacture helicopters in India, in a bid to tap a market expected to be worth $41 billion in seven years.

With the government opening up defence production to foreign investment, several companies have lined up to secure licences. Among the bigger and better-known entities are Bharat Forge Ltd, Reliance Industries Ltd, Larsen and Toubro Ltd, the Godrej Group, the Mahindra Group, the Adani Group, Anil Ambani’s Reliance Group and Punj Lloyd Ltd.

Currently, 14 Tata companies are engaged in providing support to the country’s defence and aerospace sector. These are the Tata Power Strategic Electronics Division, Tata Advanced Systems, TAL Manufacturing Solutions, Tata Technologies, Tata Motors, Tata Advanced Materials, Tata Consultancy Services Ltd, Tata Steel UK, Tata Elxsi, Titan Company (Precision Engineering Division), Avana Integrated Systems Ltd, Nova Integrated Systems Ltd, CMC Ltd and Tata Industrial Services.

The current order book size of the Tata group in the sector is above Rs.10,000 crore. Other Tata group companies—Tata Advanced Materials (TAML) and TAL Manufacturing (TAL)—are also supplying important components to Boeing. TAML has delivered power and mission equipment cabinets and auxiliary power unit door fairings for the P-8I long-range maritime surveillance and anti-submarine warfare aircraft.

TAL is manufacturing complex floor beams out of composite materials for the Boeing 787-9, a modern aircraft with exceptional environmental and fuel efficient capabilities. It has also provided ground support equipment for the C-17 Globemaster III strategic airlifter.

“This framework agreement is the result of the world-class competencies of TASL as well as the vendor ecosystem it has helped establish in India. It gives us an opportunity to explore the massive potential in India for aerospace manufacturing and make the investments required to grow the industry,” said S. Ramadorai, chairman of Tata Advanced Systems.

b“Boeing’s platforms require complex manufacturing processes within a competitive cost structure and we are confident that the partnership will be able to deliver high quality aero-structures out of India,” he said. India’s defence budget allocation is estimated to touch $620 billion by 2022, of which 50% will be capital expenditure, according to a report released in February by lobby group Federation of Indian Chambers of Commerce and Industry and financial services company Centrum Capital Ltd.

The annual opportunity for Indian companies—both state-owned and private—is expected to touch $41 billion by 2022 and $168 billion cumulatively, it said. “With defence being one of the focus sectors for the Make in India campaign and an assertive India building up its military muscle, India provides both the opportunity for boosting sales and realizing frugal engineering for cost management for the global A&D (aerospace and defence) organizations,” said Amber Dubey, head of aerospace and defence, KPMG in India.

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

13.1. 1.5 cr (15 million) people to be employed in automobile sector by 2022
TNN | Namrata Singh | Jul. 7, 2015

MUMBAI: Nearly 15 million (1.5 crore) people are expected to be employed in automobile sector directly in the industry by 2022, according to a report by National Skill Development Corporation (NSDC).

The report suggests that the state of Haryana leads in the production of passenger cars, motorcycles, tractors and accounts for 50% of total passenger cars and two-wheelers production in India.

The key growth drivers, according to report, are that India and other BRIC nations would emerge as major manufacturing hubs due to the availability of cheap labour and other favourable investing environment as more companies are looking at India as a manufacturing base and shifting their operations from Europe to India, and other south-east Asian countries. As many global auto component manufacturers have manufacturing presence in India either through joint ventures or otherwise, they are focusing on exports as excise duty is very less in complete knocked down (CKD) units.
Industry growth, changing technology, growing economy, larger income at disposal and lowering first hand lifecycle of cars have triggered requirements for fresh skilling and up-skilling in the sector.

Out of 7.6 million employed in manufacturing, 72% of the employees are working in component sub-sector. Even in auto component manufacturing companies, a majority of the workforce is employed in tier-III and raw material manufacturing companies. Over 19 million people are employed in the automobile sector directly or indirectly. This includes manufacturing in OEM, Auto components, raw material factories, automobile dealers, service centres, and other enabler sectors. Dilip Chenoy, Managing Director & CEO, NSDC said, "According to industry estimates the automobile industry accounts for 22-25% of the country's manufacturing gross domestic product. FDI in the sector is allowed to 100% under the automatic route. Therefore, an addition of one manpower at the OEM would lead to generating eight jobs at the vendor's end. So much is happening in the sector due to a push by the Government initiatives. To meet the incremental human resource requirement in the sector the entire ecosystem has been scaling up its training initiatives in this sector and aligning themselves to industry recognised national occupational standards".

Chenoy, however, said there was an urgent need to update the courses with the change in technology implemented at the plants. At present, more than 70% of the auto component companies are SMEs. The automotive sector has 56% of workforce which is second highest after telecom sector.

13.2. Volvo to export buses made in India to Europe
PTI | Jul. 14, 2015

BENGALURU: Swedish commercial vehicles major Volvo on said it plans to use India for exporting its buses manufactured in the country to developed markets in Europe. "We plan to use India for exporting our buses manufactured in India to developed markets in Europe," Volvo Buses President Hakan Agnevall told reporters here.

The first bus made in the Indian facility will be unveiled later this year in Europe, he added.

Volvo rolls out luxury hatchback V40 priced upto Rs 27.7 lakh

Agnevall said that among leading players in the global bus market "the company's Asia Leverage strategy aims to utilise its manufacturing presence in India and China to cater to demands also from other global markets."

The inter-city coaches and city buses, at present, from the Indian facility are being exported to countries in South Asia and South Africa, he informed. "We are confident that going forward we will leverage the skills and strengths in India to meet the European market requirements," he added. The other aspect of the Asia Leverage programme is to ensure that by catering to exports, the India facility will be able to face the cyclical domestic market demands, he said, adding, "the company will gradually scale up exports from India to cater to more and more markets in future."

Volvo sells 4.7% stake in Eicher Motors for Rs 1,920 crore

Volvo Buses Senior Vice President (Business Region International) Akash Passey said the company is actively exploring opportunities to supply to new markets and in the long-term aims to enhance the role of India in its export plans.

Volvo Buses' plans coincide with central government's efforts to promote manufacturing through the 'Make in India' initiative, Passey said. "This is a welcome step that will encourage companies to use local competence and expertise to cater to both domestic and export markets," he added.

To strengthen various manufacturing procedures, the company has invested an additional Rs 400 crore since 2011 to strengthen various manufacturing procedures, Passey said.

Presently, Volvo's manufacturing facility in Hoskote has a production capacity of 1,500 buses, he added.

13.3. BharatBenz bus rolls off production line at Daimler’s Chennai plant
TNN | Nandini Sen Gupta | Jul. 13, 2015

CHENNAI: The first BharatBenz bus rolled off the production line at the Daimler India Commercial Vehicles (DICV) plant in Oragadam in Chennai on Monday, making it a full-fledged commercial vehicle manufacturer in the Indian market.

"The buses are designed and manufactured keeping the evolving market needs and consumer expectations in mind to establish new standards in the Indian bus segment," the company said in a statement. BharatBenz buses manufactured at the Oragadam plant will be front-engine for short distance travel targeting school, staff and tourist transportation. The premium segment will be addressed with Mercedes-Benz rear-engine buses for inter-city transportation.

The new plant will manufacture buses with gross vehicle weight of 9, 16 and above 16 tonne range. The first to roll off the line was a BharatBenz school bus equipped with the latest safety features. Next to the school buses, the BharatBenz is also rolling out staff buses for employee transit and tourist buses designed for high fuel efficiency and low maintenance cost to minimize expenses for operators.

"With the new multi-axle coach DICV is introducing the next generation of Mercedes-Benz buses and the first 15m bus in India. The light weight body and the high end styling together with the increased capacity make it the most attractive product for intercity applications," the statement said.

Speaking on the occasion, Markus Villinger, MD, Daimler Buses India, said: "It is a significant occasion for us as we start production of Made in India buses for the Indian market at our Oragadam plant. The buses are engineered to provide value to our customers and offer them suitable products with our two brand strategy. We see enormous potential for growth in the market as the volume of the Indian market for buses weighing over eight tons is set to double by the year 2020."

With the start of bus production, the DICV plant is the only Daimler Trucks plant worldwide to produce trucks, buses and engines with three brands - Mercedes-Benz, BharatBenz and FUSO - under one roof.

The bus chassis are rolled out from the same assembly line as that of BharatBenz trucks, as they are technologically similar to the medium-duty BharatBenz trucks. Before the local bus production started, DICV had already exported its bus chassis from India to Egypt in February, other markets to follow in future.

Because the chassis are technically similar to those of the medium-duty BharatBenz truck, export activities from Chennai started even before the bus plant opened.

Daimler India Commercial Vehicles (DICV) is a 100% subsidiary of Daimler AG, Stuttgart, Germany. It currently produces and sells above 9 to 49 tonne trucks for the Indian volume market, under the brand name - BharatBenz. Under its bus division, the company will produce and sell BharatBenz buses and Mercedes-Benz buses from its manufacturing plant at Orgadam.

14. Bengal pegs Rs 37,000-cr ($ 5,5 bn) investment in textiles sector
PTI | Jun. 27, 2015

KOLKATA: The West Bengal government hopes to attract around Rs 37,000 crore in the state through 10 textile clusters or parks under integrated textile development project over the next three years. State MSME secretary Rajiva Sinha, in the presence of chief minister Mamata Banerjee, said that the project, on PPP model, will provide employment to 6-10 lakh people and incur a total investment of Rs 37,000 crore.

He said the infrastructure, development and expenditure part of these projects will be about Rs 9,159 crore. These parks, involving hosiery, ready-made garments and knitting, will come up at Barasat, Bankura, Metiabruz, Uluberia, Salt Lake, among other places.

Most of the investments will be from private sector. Meanwhile, six artisans from Bengal will be able to showcase their produce in France in a project under the supervision of UNESCO.

15. IKEA buys land in Hyderabad for first India store (of 25, in the next future)
IANS | Jul. 11, 2015

HYDERABAD: IKEA Group, the leading Swedish home furnishings company, on Friday announced that it has purchased land in Hyderabad to build its first retail store in India. The strategically-located, 13 acre site is close to HITEC City, the IT hub, is within easy access to public transport and next to an upcoming metro line, the company said in a statement.

It signed land purchase agreement with Telangana government. The size of the deal and other details of the agreement were not released. The company is in parallel evaluating suitable sites in the cities of Bengaluru, Mumbai, and Delhi NCR to open 25 stores in the long term.

IKEA had last year signed an MoU with the Telangana government for opening the store. According to a statement then released by the government, IKEA retail outlets have a standard design and each location entails an investment of $100 million (Rs 500-600 crore). Headquartered in Sweden, IKEA is one of the world's largest and recognizable international furniture, household goods and textiles retail company. It has been sourcing from India for the last 28 years and it plans to double its sourcing volumes in the country by 2020

Around 45,000 people work directly for 50 IKEA suppliers in India and about 400,000 in the extended supply chain. IKEA has recently organized three "Make more in India" campaigns, including one in Telangana, to look for new suppliers, said the statement on Friday.

Telangana chief minister K Chandrashekar Rao said IKEA will bring best business practices, great employment opportunities and contribute to the overall development of the city. He assured all necessary support to IKEA for its future expansion plans in the state.

IKEA India CEO Juvencio Maeztu said India was a very promising market for IKEA as it offers them the opportunity to source, retail, conduct CSR initiatives through IKEA Foundation and empower social entrepreneurs through next generation projects.

"Our focus now is to bring all of it together in Hyderabad as we have bought our first land to build an IKEA store. We will bring a unique shopping experience through our inspiring stores offering affordable home furnishing products," he said.

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

16. Bengaluru becomes a magnet for MNCs startups again
TNN | Shilpa Phadnis & Anand J | Jun. 21, 2015

Traffic can be a nightmare at peak hours. Many roads are pot-holed. Experts warn of an inevitable water crisis. But still companies and people are moving to Bengaluru like never before. Some estimate that an investment of over $1 billion has been proposed in the past 18 months.

The availability of a young, technologically skilled population is driving not just many of the world's biggest brands but many of India's tech-based startups to move or expand into Bengaluru. The trend is accelerating as the world gets redefined by new technological phenomena such as smartphones, social media, artificial intelligence, et al.

Bengaluru accounts for more than a third of the over 1,000 global inhouse centres (GICs) - facilities that combine technology development with back-office functions - of MNCs in India. But the spate of new announcements of GICs over the past 18 months suggests a fresh urgency. Some of the proposed investments are massive.

US oil and gas major Exxon Mobil, one of the world's biggest companies, is making a $400-500 million (Rs 2,500 crore-Rs 3,150 crore) investment in Bengaluru to establish a technical and business support services centre. Derivatives marketplace CME Group, which handles 3 billion contracts worth approximately $1 quadrillion (that's 1 followed by 15 zeros) annually, is said to be setting up a GIC in Bengaluru.

JCPenny, the leading American apparel and home furnishing retailer, L Brands, makers of lingerie brand Victoria's Secret, and Lowe's, the US-based home improvement and appliance store chain, have established technology captive centres here recently. Payments technology company Visa is establishing an in house R&D centre in Bengaluru that will hire 1,000 people over the next three years. Payments solutions major Network International, wholly owned by Emirates NBD Bank, is looking to hire 300 people in the city to set up a GIC.

British Telecom is leasing out 1.2 lakh sqft of office space in the city and is expected to hire 600 engineers over the next 18 months. Wells Fargo, the largest US bank by market cap, is said to be expanding its technology back office in Bengaluru with a fresh lease deal for 1 million sqft.

It's been no different with many domestic startups. Entrepreneurs who started their ventures elsewhere in the country, are making Bengaluru their new home. Others, like Snapdeal, may not have shifted their base, but their big new R&D expansions are in Bengaluru.

As Snapdeal says, for the scale of hi-tech talent they now need, there's no option but to come to Bengaluru. Lalit Ahuja, co-founder of ANSR Consulting, a firm that's helping Fortune 500 companies establish strategic offshore captive centres in India, says Bengaluru has the right mix of talent, and contextual business expertise.

Sejal Shah Gulati's tryst with Bengaluru has turned out to be longer than she expected. The managing director of Time Inc. India - publisher of over 90 magazine titles including Time, People, Sports Illustrated, InStyle, and Real Simple - moved to Bengaluru from New York to set up a wholly owned subsidiary of Time that would do circulation, web and tablet analytics, among other things. It has 550 employees, and Gulati says the plan now is to more than double the headcount to 1,000-1,200 in the next 12-18 months. The focus is on technology and analytics talent. Despite the broken infrastructure and traffic snarls, Gulati felt welcomed in this city of immigrants. "I didn't expect to stay so long. It was a very soft-landing for me. And how can I not mention the ideal weather," she says.

Nasscom Product Council chairman Ravi Gururaj says: "E-commerce and consumer internet firms, technology back-office and R&D centres of MNCs, apart from the IT services firms and the plethora of startups, make the city very unique."

Aditya Rao of Localoye says he faced problems in hiring when he was in Mumbai, and he found it difficult to get Bengaluru folk to shift to Mumbai. So, when the startup secured funding from PE firm Tiger Global, he shifted his base to Bengaluru.

Harshvardhan Lunia, cofounder and CEO of Lendingkart, an NBFC that lends short term working capital to sellers on e-commerce platforms, says there is no good pool of big data talent outside of Bengaluru. Hence his shift from Ahmedabad, though he continues to spend time in that city too.

Bengaluru has talent gaps, in areas like product management, software architecture, and user design. And this is pushing some companies to import talent from Silicon Valley. But Sharad Sharma, cofounder of software product think-tank iSpirt, says Bengaluru will be the first city to close the demand-supply gap in these areas. "The Institute of Product Leadership and IPMA (India Product Management Association) are attacking the product management gap.

Hasgeek and Zinnov are addressing the architect gap. And a number of players, including Shristi, are addressing the user design expert gap. MNC R&D captives are rapidly building technical career tracks for these specialists," he says.

There are also signs that road infrastructure - the bane of Bengaluru - is improving. Chief minister Siddaramaiah on Saturday launched the first of the new high-quality TenderSure roads, built in collaboration with external expertise. If this governmental spirit sustains, Bengaluru could look forward to a remarkable hitech future.

17.1. Wal-Mart rolls out plan to open 500 stores in India
Livemint | Jun. 24, 2015

Mumbai: After restructuring its operations to focus exclusively on the cash-and-carry (or wholesale) business in January last year, Wal-Mart India Pvt. Ltd, a wholly owned subsidiary of Wal-Mart Stores Inc., is working on an ambitious plan to have 500 stores in the country the next 10-15 years, a top executive at the firm said. “We now have a full team in place and will be able to grow very fast,” said Krish Iyer, chief executive officer, Wal-Mart India, adding that the company is in India for the long term and will start growing aggressively in two to three years from now.

Two years ago, Wal-Mart’s Indian plans ran aground amidst charges of flouting Indian rules on foreign investment in retail that have since been proved false. That and differences in strategy led to the company breaking up with its partner Bharti Enterprises. Iyer took charge around then. “The most important thing when I came in was to have a clear strategy. It was evident then that I would focus on our cash-and-carry business,” said Iyer in a 19 June interview.

With a near exodus of employees after the crisis, Iyer had to first build a team. He also needed to focus on strengthening the company’s compliance processes and improving its relationship with various stakeholders, including the government and media. The first new store since Iyer took over will open in August in Agra.

Opening stores of the kind that Wal-Mart requires, with about four acres of space on average and with lease of over 30 years, is not easy. “The gestation period for a store launch is 2.5 years,” explains Iyer, while sharing that three years from now the company will be in a position to open a store every one or two months. “Until then, it’s about getting ready for the growth,” he said. The company is on course to opening 50 stores by 2020, said Iyer, who is now looking at a bigger business potential over a longer horizon. “We can, over a period of 10-15 years, have 500 stores. The potential in India is huge. India is five countries rolled into one,” he added. Currently, Wal-Mart India has 20 stores across eight states, largely located in so-called tier II and III cities. Its investments in India till a year-ago stood at Rs.2,000 crore. Last year, in June, the parent said it would invest Rs.623 crore in India, according to filings with the Registrar of Companies (RoC).

“We will continue to focus on tier II and III cities and build our presence in concentric circles—focusing on a few states and geographies to gain critical mass,” said Iyer. To achieve these numbers will not be easy, said experts. “The biggest challenge is getting clean land parcels without any legal discrepancy. However, compared to the larger cities, the focus on tier II and III cities is a good strategy because at least land is available there at cheaper costs,” said Vivek Kaul, head, retail services India, CBRE South Asia Pvt. Ltd, and added that the risk is that the land could be agricultural and obtaining a land use conversion to commercial could take 6-8 months.

Over the past year and a half, the company has also worked with the government at the state level to improve its relationships, said Iyer. “There is an ease of doing business we are experiencing in some of the states that we are in. It is driven by the centre, but executed at the state level,” he added, pointing to states such as Telangana that recently unfolded its industrial policy.

Telangana is proposing a single-window clearance for various kinds of proposals with clearance time ranging from 21 to 30 days. This is also happening in Andhra Pradesh and Uttar Pradesh and Punjab may follow suit, said Iyer. Setting up a wholesale store needs a little more than 45 licences. Wal-Mart rival Metro Cash and Carry India Pvt. Ltd, which has 16 stores, announced last year that it would have 50 stores in India by 2020. In March this year, Metro AG, the parent, said it would invest Rs.400 crore in the Indian subsidiary, according to a 31 March filing with the RoC.

The organized wholesale business in India is very nascent with less than 100 stores between the top companies, including 45 cash-and-carry stores of Reliance Industries Ltd’s retail arm. French firm Carrefour SA exited the businesses last year to focus on reviving flagging sales in its home market.

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

17.2. Metro to open 50 stores by 2020 in India
Livemint | Jul. 02, 2015

Bengaluru: The local arm of Germany’s Metro Cash and Carry is set to open 50 wholesale stores in India by 2020 in line with the investments planned by the retailer two years ago, said Rajiv Bakshi, managing director, on the sidelines of the company announcing its 18th store in India and its fourth in Bengaluru on Wednesday. The store was acquired from French retailer Carrefour that exited the country last year. Metro acquired three Carrefour stores, before the latter’s exit. The other two—in Delhi and Meerut—will open shortly. Metro typically spends Rs.70 crore per outlet on an average.

Metro will add 32 stores over the next four years, a pace that is much faster than when it launched in India in 2003. The company sells goods of daily use to small traders through its big box retail outlets. India only allows 100% direct foreign direct investment in the wholesale multi-brand retail business.

In an interview, Bakshi, the former head of beverage maker PepsiCo. India, talks about Metro’s growth plans and why Wal-Mart’s expansion won’t affect Metro. Edited excerpts from an interview:

Wal-Mart recently announced that it would open 500 cash and carry stores in India over the next decade. How does that alter your expansion plans in the country?

No, we don’t react to that. We’ve been sure and steady on what we want to do in India and we’ve done it along with a certain pace. Some have argued why the pace has been so slow or why it hasn’t and the reason is that it has to do with the evolution of the consumer. The consumer has to be ready for it. If consumers and our customers are not ready for it then it doesn’t make any sense to open more stores. We were ahead of the curve. We opened our first store in Bengaluru (in 2003) and it took us a few years to settle down and therefore we had to sedate pace of work and the pace is now picking up because I think the consumer is ready.

But what has changed (on the consumption side)?

As I see it, it is the proliferation of needs leading to proliferation of categories. What you consumed 10 years ago and what you consumer now is 3x and once those needs go up, traditional distribution systems start falling by the way side. While needs are going up by so much and categories are coming in—as a consequence traditional channels can’t cope with that—so new channels need to come in. If you see large FMCG companies, the mantra 10 years ago was that the growth driver will be penetration, today growth driver is not penetration, but wider range of products and multi-layered segments. You then start gravitating towards larger formats of retail...that’s where modern trade starts evolving. This trend has escalated very sharply in the last five years and if you look at the retail industry—first set of retailers in the last few years—all big retailers have shut their small format stores. It’s because smaller shops just tend to replicate traditional kirana experience.

So what growth areas will Metro focus on, considering that you will now be competing with Wal-Mart ?

The basic focus is on market creation, it is not market competitiveness. Our expansion model is very different from say that of Wal-Mart. As far as we are concerned, we are proliferating in larger cities. At Wal-Mart they are not looking at larger cities, most stores are in a million or less population towns. So we are going topdown, but they are looking at middle-lower markets and then down below, they are not gravitating upwards. We believe the growth is in larger cities with a certain population.

Where will your next set of stores come up?

Cities with million plus population and we’ve identified 43 such cities.

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

18.1. Accenture surpasses TCS in headcount; to hire 95,000 in 2015
ET Bureau | Jochelle Mendonca | Jun. 26, 2015

MUMBAI: Accenture shot past Tata Consultancy Services (TCS) in headcount in its latest quarter and the company said it expected to hire about 95,000 in FY2015, as it continues to see strong growth.

"We ended the quarter with a global headcount of about 336,000 people, and we now have approximately 237,000 people in our global delivery network. We now expect that approximately 95,000 people will join our company in fiscal 2015," David Rowland, chief financial officer at the company said on a conference call with analysts. Accenture's financial year ends in August.

TCS, India's largest IT services company, last reported that it had 319,656 employees on its rolls. The company is also expected to hire about 60,000 employees in its current financial year.

Accenture also reported utilization of 90%, down from 91% in the previous quarter. In the quarter, Accenture said it added 12 clients with bookings in excess of $100 million.

Accenture also raised its FY growth target for the third time this year, as it continues to see strong growth in digital. "In the third quarter, we delivered more than 30% growth in local currency in digital-related services which now account for more than 20% of our total revenues. Demand for digital is pervasive across the entire business," Accenture CEO Pierre Nanterme said.

18.2. Oracle plans data centre in India
TNN | Shilpa Phadnis | Jul. 17, 2015

BENGALURU: Thomas Kurian was appointed the president of Oracle responsible for product development in January, making him the senior-most executive in the company after co-CEOs Safra Catz and Mark Hurd. Kurian, who reports to executive chairman and CTO Larry Ellison, is seen as a strong contender for the corner office.

Kurian talks about the company opening its tenth product development centre in India in Gujarat International Finance Tec-City (GIFT) and how the country has emerged as the second-largest product development workforce outside the US. Close on the heels of rival Microsoft setting up data centres in India, Oracle is also firming up similar plans with its partners. In an exclusive interview, Kurian, who grew up in Bengaluru, talks about India's role in Oracle's overall product story.

Excerpts:
How has India shaped Oracle's product strategy?

We have a global products strategy and we define the markets we want to enter. We're currently focused on five primary segments — cloud, engineered systems, information management (database system), applications infrastructure (middleware business) and packaged apps. When we look at entering new markets, we start concurrently in India. Every product has a team in India, largely driven by the fact that we have amazing technical talent here.

Oracle hired 2,300 engineers in product development in 2015 fiscal of which 18% were college graduates. When we entered the market in 1994, Oracle wanted to make India a large place for product development. We didn't contract with any firm. Success in India meant three things to product development — being able to attract the best people and India is not just about maintenance of existing products, but building new products. We wanted India to be self-sufficient in terms of managing the entire lifecycle development.

Oracle competes with Amazon, Salesforce and Workday. How have you done better than the competition?

Last year, we sold substantially more cloud business than Salesforce globally and more than ten times the size of Workday in terms of customers. We have a product portfolio and go-to-market with our sales teams both catching up and in many cases surpassing Workday and Salesforce. On a full year basis, we added more new revenue to Oracle and more new customers than Salesforce by a large amount.

Oracle is increasingly focusing on the cloud, while revenue from new software licenses has seen a decline. How does this impact your business?

Our gross margins are doing well. We're investing in capital infrastructure like data centres ahead of demand. We're confident that the long-term profitability of our cloud business would be at least as valuable, if not better than our existing on-premise business.

You've seen the first wave of IT services in India. Do you think Bengaluru is morphing into a product hub?

Any industry starts with services. Bengaluru started with offshoring, then moved to higher services as skills in the technology and engineering community evolved. Now, we see many of these companies deliver products, largely because there is more value in products because of the intellectual property.

You've worked closely with Ellison. Are you in the race for the top job?

We've worked together for 17 years. Larry is a smart technologist and has a great vision of where tech is going. I work closely with him, taking ideas he has and shaping them into products. We have a very collaborative relationship. As for the top job, I don't want to comment on it or think about it.

18.3. India has second largest number of Oracle employees
IANS | Jul. 16, 2015

BENGALURU: Global software major Oracle Corporation has its second largest workforce in India, with 10 product development centres across the country, a senior official said on Thursday. "Of the 120,000 workforce we have globally, 31,000 are in India, making it the second largest after our employees' strength in the US," Oracle president Thomas Kurian told reporters at an event here.Of the total workforce, 30% (36,000) are in product development worldwide and one-third of them (12,000) work in India.

The database product firm opened its 10th product development centre in the Gujarat International Finance Tech City (GIFT) at Ahmedabad recently. "We hired 2,300 engineers during the last fiscal (FY 2015) for product development functions in India of which 18% were graduates," Kurian said on the occasion, marking the IT multinational's two decades of presence in the sub-continent.

Indian centres are part of the company's global product development organization, and teams do cutting edge engineering work across the product portfolio, including cloud. "Our teams play a crucial role in propelling product innovation and support its agenda of developing cloud-ready solutions," Kurian asserted.

Oracle opened its first product development centre in Bengaluru with four engineers in 1994 and since then grew its footprint across the country, with more such centres in Hyderabad, Mumbai, Noida, Pune, Thiruvananthapuram and Vijayawada.

"As engineering talent is in high demand, we have been recruiting aggressively to become the world's top cloud provider. Our global development centers are the lifeline of Oracle's success, and India is a major part of that," Kurian said.

The data base company spent a whopping $34 billion over a decade in innovation and research and development (R&D) to roll out best-of-breed products in the industry. "Though many Indian enterprises want to use our products, some of them are unable to do so due to lack of infrastructure. Anyone can run our software with a web-browser and even without data centre or hardware-software," Kurian claimed.

The company's cloud offers software as a service, platform as a service, data as a service and infrastructure as a service. "Our cloud platform helps organizations drive innovation and business transformation by increasing business agility, lowering costs and reducing complexity," Kurian said.

The latest version of the cloud platform enables customers to build new applications, extend present applications and move workloads to the cloud without changes. "The new platform allows developers to manage and analyze data, develop, test and deploy applications, and facilitate architects to integrate them," Kurian said.

19.1. India's aviation growth to be double of global average: Airbus
PTI | Jun. 21, 2015

PARIS: Eyeing big orders from Indian airlines, world's leading aircraft maker Airbus has said that India's aviation market will grow at over 10 per cent annually in next ten years, which would be double the average global growth rate. Bullish on India as a marketplace as well as manufacturing hub, Airbus has already committed to source products worth USD 2 billion cumulatively over the next five years and it is now looking to provide customised maintenance and other services for all its airline customers in India closer to their base. "India is very much on Airbus map for all the important work that we do globally and it is not just from the market perspective," Airbus India Managing Director Srinivasan Dwarkanath told in an interview here at the Paris International Air Show.

"In terms of market, India will be one of the top three aviation markets globally in the next 20 years. It is already one of the fastest growing markets," he said, adding that the country would need to double its aircraft fleet even if one per cent more of its population starts travelling by air.

"We are expecting an annual growth rate of over 11 per cent for the domestic market in India over the next ten years, while the combined growth rate for domestic and international routes would also be more than 10 per cent.

That would be almost double the global growth rate," he said. Dwarkanath said Airbus wants to be "very close to its customers and we want to be in India". "In our Global Market Forecast 2013, we had said that India would need 1,291 new passenger and freight aircraft by 2032. "In just two years, more than one-third of this projected requirement has been met, which means more than 800 more would be needed by 2032.

But it seems we would have to revise upward the forecast," he said. "If we compare it with other countries, the aviation penetration is very low in India, which provides huge growth opportunities. Even if one per cent more people start travelling by air, India would need to double its aircraft fleet.

"The growth prospect is huge and therefore I feel we may have to revise our growth forecast in the future," he added. Speaking about Airbus' presence in India, Dwarknath, who is also the Vice President for International Cooperation, South and South-East Asia, said that for customer service it has got its own maintenance training centre to look at the aircraft that has been sold to the customers in India.

"This centre initially catered to customers in India, then we expanded it to neighbouring countries, now to even many far-off countries such as Mexico. "We provide training to the engineers at this centre for customers across various countries through this centre," he said.

19.2. Government working on regional aviation plan
Livemint | Jul. 16, 2015

Mumbai: India’s new civil aviation policy in the works will seek to tap a potential 300 million middle-class citizens living in smaller towns and cities, by encouraging low-cost airports and regional airlines that service such airports, top government officials indicated. The dividend: a ten-fold jump in India’s air traffic.

No direct subsidies are on the cards, though, but the government may put in place incentives to improve the commercial viability of such airlines and airports. Smaller and sparsely populated towns and cities are generally unattractive for large airlines connecting metros and big cities, since such flights call for smaller aircraft and earn less revenue.

“There are around 400 airports in the country, and only 70 (of them) are actually utilized. If we can leverage these unutilized airports through regional airlines, it is a huge growth opportunity,” said R.N. Choubey, secretary, ministry of civil aviation.

Even though some countries do subsidize regional aviation, India has no such plans. “There are certain limitations for the government on offering a direct subsidy,” said Choubey, adding that his ministry is working out an alternative, without spelling out details. At present, 65% of India’s air traffic comes from six metros.

India has less than 50 runways where aircraft such as a Boeing 737 or an Airbus A320 can land. “Traffic from metros has led to a growth of 10-14%. But the time has come to tap the traffic in tier II and III cities, where there is a middle-class of 300 million.

Even if these 300 million take two trips a year, it is 600 million passengers against the current 70 million passengers, an almost ten-fold increase,” Choubey said. He hinted the government is looking at a 20-25% growth, considering the huge middle-class population. “This looks ambitious. But it is entirely and eminently possible,” Choubey added.

G. Asok Kumar, joint secretary with the civil aviation ministry, said the new aviation policy will also encourage development of smaller, no-frills airports that can handle smaller, 70-seater planes. Kumar said these planes can feed into bigger airlines in the city. “Ideally, India should have about 200-300 airports considering the middle-class population. We would like to have smaller airports with lower cost of operations,” he said. Kumar also hinted at cross-subsidizing operations at no-frill airports by allowing the airport operator to use the airport real estate for commercial purposes.

According to the state-run Airports Authority of India (AAI), about 50 no-frills airports are under development. Out of them five airports included in the first phase are Teju in Arunachal Pradesh, Jharsuguda in Odisha, Hubli and Belgaum in Karnataka and Kishangarh in Rajasthan. No-frills airports are those with basic infrastructure to handle aircraft.

In June, AAI opened the Kadapa airport in Andhra Pradesh. The new tier III airport, built at a cost of Rs.42 crore, has a compact prefabricated terminal building and can handle 100 peak-hour passengers at a time. Its apron can accommodate three 70-seater, ATR-72 aircraft. Bengaluru-based regional airline Air Pegasus is flying out of this airport.

In August 2007, the aviation ministry introduced scheduled operator permits for regional airlines. These airlines must fly to airports in one of the five designated regions: north, south, west, east and the northeast. Except those licensed to fly in the south, these airlines are not allowed to connect to more than one major city. However, the history of India’s regional aviation is littered with failed airlines.

In April 2013, seven months after it started operations, Religare Voyages Ltd shut its regional airline Air Mantra, citing poor bookings. MDLR Airlines Pvt. Ltd stopped flying on 1 October 2009. Several others, including Star Aviation Pvt. Ltd, ZAV Airways Pvt. Ltd, Jagson Airlines Ltd and King Air Pvt. Ltd, licensed to fly as regional airlines, failed to start operations because of high jet-fuel prices and the economic slowdown of 2008.

In the case of Paramount Airways Pvt. Ltd, a scheduled airline that had a substantial southern focus, operations were suspended after aviation regulator cancelled its licence when it fell short of the minimum requirement of five aircraft.

“The next wave of growth will come from regional aviation. Even if 10% of the 300 million middle-class population living outside of metro cities starts flying, it is a huge growth for Indian civil aviation,” said Ankur Bhatia, executive director, Bird Group, a travel and aviation firm.

When asked about grounded regional airlines, Bhatia said that Air Mantra and MDLR had the wrong type of aircraft for regional operations. “For successful regional airline operations, you need to have the right type of aircraft and focus. A big, scheduled airline operating larger planes cannot focus on regional operations with smaller planes. Nowhere in the world has such a model worked,” Bhatia said.

He said India’s first low-fare airline, Air Deccan, had successfully run regional operations with ATR planes. SpiceJet Ltd, India’s second largest low-fare airline, has experimented with the smaller planes for regional operations, a

“If India fulfils its promises on the regional aviation plan, the country will have a couple of 100 ATR planes,” said Patrick de Castelbajac, chief executive officer at ATR. The Toulouse, France-based turboprop aircraft manufacturer ATR is the world leader in the market for aircraft with up to 90 seats and has 30 aircraft flying in India.

Castelbajac said the current government is committed to encouraging regional aviation and said that he’s confident it will resolve all issues. He said 75% of ATR aircraft in India fly point-to-point while the remaining feed into larger airlines. Castelbajac said ATR is in talks with multiple potential Indian airlines, including regional airlines.

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

20.1. India to open drugs database to global regulators
Economic Times | Jun. 24, 2015

Hyderabad: Drug regulators and retailers across the world will soon be able to access a large database that India is building on domestic pharmaceutical manufacturers. India has decided to throw open the database to global stakeholders following concerns over spurious drugs emanating from the country. The government had earlier introduced barcoding on export consignments of medicines to help trace their point of origin.

Now it has mandated all drug exporters to adhere to labelling of prescribed manufacturing data on various levels of packaging from October 1 while temporarily exempting barcode labelling on primary packaging. A senior commerce ministry official said a pilot project will begin at the end of this month for uploading data provided by some select medicine exporters, even as an expert group will recommend technologies for the so called track and trace system within four months.

India had exported medicines worth $15.2 billion (about Rs 97,000 crore) in 2014-15, an increase of 5% over the previous year's figure. PV Appaji, director general of Indian Pharmaceuticals Export Promotion Council (Pharmexcil), said the medicine exporters will upload data pertaining to the parent-child relationship for all the three levels of packaging — primary, secondary and tertiary — along with the movement of goods in the supply chain.

Sun Pharma, Wockhardt and Unichem are among the medicine exporters that have come forward to upload their barcoding data on the central server of National Informatics Centre, Appaji said. "We are talking to a few more top exporters including Dr Reddy's Laboratories, Mylan Labs, Sandoz and Aurobindo PharmaBSE 3.30 % to take part in the pilot project," he said.

Appaji is the member secretary of the expert group on technology that comprises the commerce ministry's joint secretary Sudhanshu Pandey, pharmaceuticals department's joint secretary Sudhansh Pant and the Drug Controller General of India. He is also a member secretary of the expert committee group set up for finding the right technology for implementation of the track and trace system for export of drug formulations.

Indian Drug Manufacturers' Association president SV Veeramani said the industry players were waiting for clarity on technologies and guidelines for uploading the manufacturing data and its data security features. "India is the first country to implement the barcode system in the world. We are in principle willing to participate while incurring additional expenditure to comply with the new mandatory process, but we are not sure of its benefits."

Appaji said the commerce ministry is scheduled to organise a meeting on Friday in Mumbai to providing clarity to various stakeholders.

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

20.2. Manipal to buy diagnostic chain in Rs 1,000-crore ($180 million) deal
TNN | Rajesh Chandramouli & Boby Kurian | Jul. 16, 2015

CHENNAI/BANGALORE: Manipal Education and Medical Group (MEMG), spearheaded by billionaire Ranjan Pai, is set to acquire Medall Healthcare, a southern diagnostics chain, in a deal valued at about Rs 1,000 crore ($180 million), two people directly familiar with the matter said.

The deal marks Manipal's foray into diagnostics business. Medall will not be part of Manipal Health Enterprises, one of India's largest specialty hospital networks. It will be parked as a separate business under MEMG, a major player in education and healthcare services.

Manipal is expected to buy private equity fund Peepul Capital's 80% stake, while the management led by Raju Venkatraman is likely to keep their remaining shares. "Manipal has signed exclusivity and is working on final agreement details currently," a source mentioned earlier in the report said.

Medall claims to be among India's top five diagnostics chains and the largest in offering radiology services. Medall operates more than 60 labs across southern states of Tamil Nadu, Andhra Pradesh and Karnataka, besides operating a slew of public private healthcare partnerships. In 2009, Peepul partnered with serial entrepreneur Raju Venkatraman to acquire Medall, which was known as Precision Diagnostics previously.

When contacted, Peepul Capital and MEMG declined to comment on the report. MEMG primary consists of Manipal Global Education Services, Manipal Health Enterprises, Manipal Acunova and Manipal Servicecorp Facility Management, among others. Pai, 42, who helms the group as chief executive and managing director, is a savvy deal maker having struck partnerships with marquee investors to grow businesses.

Manipal is likely to effect the acquisition on its own, and may not rely on existing investor partnerships to clinch the deal. TPG Capital and India Value Fund Advisors are investors in Manipal's hospitals company.

Medall struck a few buyouts to expand its footprint. It had acquired Clumax Research and Diagnostics as part of an entry strategy to Bangalore. India's rapidly growing diagnostics market has seen the emergence of national chains such SRL Diagnostics (majority owned by Fortis Healthcare), Dr Lal PathLabs and Metropolis.

INDIA & THE WORLD

21.1. Rosneft signs deal to take a 49% stake in Essar Oil
Business Standard | Jul. 09, 2015

Mumbai: Russian oil major Rosneft has signed a preliminary agreement with the Essar group, controlled by the Ruias, to buy a 49 per cent stake in Essar Oil’s Vadinar refinery and supply 100 million tonnes of oil to the latter for the next 10 years. Refining accounts for over 95 per cent of Essar Oil’s overall business. The deal is subject to regulatory approvals.

According to the deal contours, Rosneft will supply five million tonnes of crude oil to Essar Oil in 2015. Rosneft and Essar Oil had last December signed a preliminary contract for supply of 10 million tonnes of oil a year for 10 years. Commenting on the signing of the agreement, Rosneft Chairman Igor Sechin said: “The performance of the terms of the signed documents will have a substantial impact on the scale of economic cooperation between Russia and India. The goods trade between the two countries will grow by more than 50 per cent.”

Rosneft and Essar also plan to boost refinery output from 20 million tonnes a year to 45 million tonnes by 2020. The deal also includes a retail chain of 1,600 stations located in India; the parties plan to increase the total quantity of retail sites to 5,000 within the next two years. Before the announcement of the agreement, the Essar Oil stock was trading 3.74 per cent higher than its previous BSE close, at Rs 188.6 a share. At Wednesday’s closing price, Essar Oil’s market capitalisation stands at Rs 27,337 crore.

Sources had earlier told Business Standard that the deal would fetch Essar Oil over Rs 10,500 crore, which might help the company reduce its debt burden. As of June this year, it had a debt of Rs 17,000 crore on its books. To complete its debt-dollarisation programme, the company is in the process of availing of long-term export advance facility of $1.6 billion, backed by export performance bank guarantee/standby letter of credit, to repay the high-cost rupee loans.

Last April, Essar Oil had received the Reserve Bank’s approval to raise external commercial borrowings to the extent of $2.27 billion, to replace its rupee debt with low-cost dollar loans. The company has already refinanced an equivalent amount of its rupee loan with a foreign-currency debt of $1 billion through use of ECBs and by swapping rupee loans with dollar ones. Essar Oil owns and operates a refinery in Gujarat’s Jamnagar. Among its other assets are a few exploration and production blocks and coalbed methane blocks. The company reported a profit of Rs 1,521 crore on a revenue of Rs 83,206 crore in 2014-15, mainly on account of higher gross refining margins of $10 a barrel.

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

21.2. Rosneft eyes Indian solar power market
Livemint | Jul. 14, 2015

New Delhi: Russia’s OAO Rosneft, the world’s largest publicly traded oil company, is exploring a huge investment in solar energy in India, in a move that is as much a sign of the company’s interest in the Indian market as it is the potential of solar energy in the country.

“Representatives from Rosneft have met the Indian government officials. They want to set up a capacity ranging between 10,000MW (megawatts) to 20,000MW,” said a government official who spoke on condition of anonymity. At an investment of around Rs.6 crore per MW, a 10,000MW capacity will entail an investment of around Rs.60,000 crore.

Russian energy companies are looking at new investment avenues in the aftermath of the collapse of international crude prices and also to work around the economic sanctions imposed on the country by the US and the European Union. At the same time, India is seeking to expand its energy mix by encouraging more investment in green power.

Rosneft’s interest also stems from India’s plans to install 100,000MW of solar power capacity by 2022. India needs as much as $200 billion to meet its target and the government aims to provide green power at less than Rs.4.50 a unit.

This initiative comes in the backdrop of news that the Essar Group plans to sell as much as 49% of Essar Oil Ltd to Russia’s OAO Rosneft, in which the largest shareholder (with a 69.5% stake) is the Russian government.

BP Plc. holds 19.75% and 10.75% is with other shareholders. Rosneft’s businesses include hydrocarbon exploration and production, upstream offshore projects, refining, and crude oil, gas and product marketing in Russia and abroad.

India on its part has been trying to secure energy resources in Russia by leveraging its historical association with the country. Indian investments in Russia, mainly in the hydrocarbon sector, total around $4.25 billion. Queries emailed to a Rosneft spokesperson remained unanswered till press time; an Essar Group spokesperson said in an email that the group is “not privy to any such plans of Rosneft”.

Rosneft’s move also reflects happenings in the oil and gas market, a former bureaucrat said.
“A petrogas giant coming to India in the renewable energy sector could well point to a certain nervousness in the petroleum sector in respect of price stability. Investment in India at this point of time also indicates that other international markets are not very attractive investment destinations,” said Anil Razdan, India’s former power secretary.

Crude oil prices in the Indian energy basket averaged at $61.75 per barrel in June, as against $84.16, $105.52, $107.97 and $111.89 in 2014-15, 2013-14, 2012-13 and 2011-12, respectively. Razdan also warned about the poor finance health of India’s state electricity boards that buy power from generators and which could derail any investment in green power generation.

“For sustaining this kind of investment in the renewable energy sector, the Indian power sector will have to ensure that the distress in the distribution segment is eliminated at the earliest,” he said. State electricity boards are laden with debt of Rs.3.04 trillion and losses of Rs.2.52 trillion.

There has been a growing interest from overseas investors in the Indian renewable energy space. SoftBank Corp., along with Bharti Enterprises Ltd and Taiwan’s Foxconn Technology, in June proposed to invest at least $20 billion in solar energy projects in India through a joint venture, SBG Cleantech Ltd. US-based First Solar Inc. and China’s Trina Solar are among firms that are considering plans to set up manufacturing facilities in India.

US-based SunEdison Inc. had also said it plans to establish a joint venture with Adani Enterprises Ltd to build a solar photovoltaic manufacturing facility in India with an investment of around $4 billion. The Narendra Modiled government has pushed renewable energy to the top of its energy security agenda, seeking to minimize India’s dependence on coal-fueled electricity. Renewable energy accounts for only 35,777MW of India’s total power generation capacity of 272,503MW.

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

22. GMR in race for 5 airports in Philippines worth USD 2.4-bn
PTI | Jul. 13, 2015

HYDERABAD: GMR-Megawide is in race to acquire operations of five airports worth USD 2.4 billion in Philippines under PPP model. As many as six companies, including GMR-Megawide, have evinced interest in the airport projects, according to a statement issued by the Philippines government.

GMR-Megawide currently runs Mactan Cebu International Airport (MCIA) in that country. "These PPP projects involve development, operations and maintenance of the five regional airports," the statement said. The private partner would provide necessary improvements to the airport to enhance passenger safety, security and access.

Besides, it would have to bring in efficiency in passenger and cargo movement, operations as well as actively market the airports in order to develop direct international passenger traffic. The other prospective bidders who bid for the five airport projects are Metro-Pacific-JG Summit Consortium, Aboitiz Equity Ventures, Miguel Corp, Philippine Skylanders Inc and Union Equities.

These airports involve an estimated total cost of Php 108.19 billion (USD 2.40 billion), the statement said. The five regional airports in Philippines currently being offered under PPP mode are Bacolod-Silay, Iloilo (Bundle 1), Davao, Laguindingan, and New Bohol (Panglao) (Bundle 2), the statement added.

MCIA was the first airport in Philippines to be privatised under the administration's ambitious PPP programme aimed at modernising key infrastructure assets. In the international competitive bidding process, GMRMegawide Consortium had emerged as the highest bidder after offering a bid premium of 14.4 billion Philippine Pesos (approximately USD 305 million) for the airport.

The formal award of the project in April, 2014 was followed by a six-month transition period to complete project formalities leading to the transfer of operations to GMR-Megawide on November 1.

23. Prime Minister Narendra Modi's Jan Dhan Yojna finds an echo in Kazakhstan
Economic Times | July 08, 2015

New Delhi: Prime Minister Narendra Modi's Jan Dhan Yojna has found an echo in Kazakhstan with its PM Karim Massimov asking for India's assistance in helping the Kazakh central bank in financial inclusion. Modi is in Kazakhstan on a two day visit to boost the trade and strategic interests of both nations.

Kazakhstan has also invited India for investments in green economy development, mining and agriculture development. In a meeting between the two prime ministers today Modi has also offered to help the Kazakh companies through an initiative like digital India, according to people in the know.

Kazakhstan national railway company is investing India's infrastructure sector starting with Mundra port in Gujarat and then looking for more opportunities for port-led investment on the west coast of India. "We connected to Iran and making investment in bandar Abbas Iran and to Mundra or Mumbai. This connectivity to India is very important for us," the Kazakh PM said.

India has also called from Kazakhstan's involvement in building the connectivity from India to Iran to Kazakhstan. India is developing the Chabahar port in Iran through a special purpose vehicle between the countries.

Modi has also called for cooperation between the two countries in areas of defence, joint training and military and technical cooperation. India has also sought Kazakhstan's help in getting oil fields. The central Asian country has also expressed its interest in building solar plants of up to 3GW in India.

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

24. India and USA sign agreements to strengthen cooperation in health sector
Press Information Bureau | Jun. 26, 2015

New Delhi: India and the United States of America (USA) signed Memorandums of Understanding (MoUs) on Cooperation on Cancer Research, Prevention, Control and Management and Collaboration in Environmental and Occupational Health and Injury Prevention and Control, and a Letter of Intent (LoI) on Antimicrobial Resistance Research, here today. The MoU on Cancer Research and LoI on Antimicrobial Resistance Research were signed by Shri B P Sharma, Secretary (Department of Health and Family Welfare and Department of Health Research), Ministry of Health and Family Welfare andProf. K Vijay Raghavan, Secretary (Department of Biotechnology), Ministry of Science & Technology and Mr. Richard Verma, Ambassador of the USA to India. While, the MoU on Collaboration in Environmental and Occupational Health and Injury Prevention and Control was signed by Shri B P Sharma and Mr. Richard Verma.

The MoU for cooperation on cancer research prevention, control and management was signed between the National Cancer Research Institute of the All India Institute of Medical Sciences, the Indian Council of Medical Research (ICMR), Department of Health Research, Ministry of Health and Family Welfare, the Department of Biotechnology, Ministry of Science and Technology and National Cancer Institute of the National Institute of Health and Department of Health and Human Services (DHHS), USA.The main areas of cooperation under this MoU are-

Increased bilateral cooperation on cancer research, prevention, control and management;
evelopment of collaborative research projects on population-based cancer control and implementation science;
Development of projects in the areas of basic and epidemiological research, pre-clinical model development, clinical research and oncology care delivery;
Collaboration for conducting research and training on development of low-cost technologies, diagnostics and combination of existing medications against common cancers and development of existing therapies for novel indications related to oncology;
Discovery and development of new anti-cancer agents;
Research on cancer screening and early detection;
E-health, M-health and telehealth approaches to cancer education, early detection and treatment;
Health systems research to strengthen cancer care delivery mechanism and build public health capacity for cancer care;
Development of Cancer Registries;
Organization of joint conferences, symposia and other scientific meetings of mutual interest;
Information and scientific exchanges, and the sharing of experiences;
Participation in professional and scientific meetings conducted in both countries; and
Any other area as mutually decided between the Participants if and to the extent consistent with applicable statutes, regulations and policies.

The MoU intends to strengthen the collaboration on the following:

Promotion and development of cooperation in the fields of clinical cancer research and patient care delivery;
Infrastructure development, training, and capacity building;
Collaboration in cancer research including basic, translational and survivorship research, epidemiology, prevention, diagnosis, screening, treatment and control;
Direction of increased collaboration between appropriate Centers of Excellence and Institutions in both countries, as recommended by the Participants; and
Assessment and application of new and cost effective cancer diagnostic technologies for public health benefits, and the translation of technologies for global health.

The second MoU was signed between the Centre for Disease Control (CDC) and Prevention, Department of Health and Human Services of the USA and the Indian Council of Medical Research (ICMR), Department of Health Research, Ministry of Health and Family Welfare on Collaboration in Environmental and Occupational Health and Injury Prevention and Control.The MoU aims to further the cooperation in the fields of environmental and occupational health and injury prevention and control research, education and training, infrastructure development, and capacity-building for their reciprocal and mutual benefit. The main areas of cooperation include, but are not limited to, the following:

The prevention of illness related to toxic chemicals and hazardous substances;
The development and use of improved tools, technologies and methods for enhancing environmental and occupational public health, and injury prevention efforts, including surveillance;
Public health effects of ambient and indoor air pollution including a focus on exposures associated with burning of solid fuels for cooking and heating;
The prevention of illness and injury related to hazards at the workplace and related research;
Planning, preparedness, and response for chemical releases and radiation events;
Research into the environmental and occupational causes of illnesses, including the assessment of exposure to, and disposal of, industrial and chemical waste materials;
Use and application of biomonitoring and biomarkers in environmental and occupational health;
Prevention efforts and research related to access to water, water quality, sanitation, and hygiene as related to their environmental health impacts;
The public health effects of urbanization and the built environment;
Impact of climate variability and climate change on health; and
Public health approaches for injury prevention and control including the areas of road safety, burn injuries and unintentional injury.

A Letter of Intent (LoI) on Antimicrobial Resistance Research was signed between the Indian Council of Medical Research (ICMR), Department of Health Research, Ministry of Health and Family Welfare, the Department of Biotechnology, Ministry of Science and Technology and the National Institute of Allergy and Infectious Diseases, National Institutes of Health, Department of Health and Human Services of USA. This aims to strengthen cooperation between the two countries in antimicrobial resistance research to include, but not limited to, the following areas:

Mechanism of antimicrobial resistance, including application of systems biology
Comparative testing and assisting the validation of new diagnostics
Development of novel interventions
Explore possible patterns of AMR in neonatal intensive care units as observed in India and the US
Explore possible collaboration in clinical studies to determine new and combinations/uses of old drugs.

The signatories welcomed signing of the agreements and hoped that these MoUs/LoI will usher in greater cooperation in the health sector which will benefit people of both the countries, in addition to further deepening and strengthening of cooperation and collaboration between the countries.

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

25. Videocon plans $2.5 billion Brazil oil, gas investments

Reuters | Jul. 4, 2015

LONDON: Videocon Industries Ltd plans to invest $2.5 billion in oil and gas ventures in Brazil over the next two to three years, the consumer electronics-to-energy group's chief said, as part of its strategy to boost the business.

"Brazil oil finding is four times higher than the largest oil field in India ... It's just (the) beginning," billionaire Venugopal Dhoot told Reuters at the sidelines of an industry event.

A consortium that includes Videocon and Brazilian state-run oil company Petroleo Brasileiro SA (Petrobras) earlier this year discovered new light crude oil in the Sergipe basin off Brazil's northeast coast. Videocon, which gets most of its revenue from its consumer durables business, has expanded its oil and gas business in recent years with investments in countries including Australia and Indonesia.

In the next three years, Videocon, which also has interests in telecoms and power, will be known as an oil and gas firm, Dhoot told India's Mint newspaper last month.

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