AAPI: July 2016

LISBON, 20th July 2016

Index of this Newsletter

INDIA

INDIA & THE WORLD

21.1. India and Kenya enter into tax, defence agreements
21.2. Suriname plans furniture design corridor in Hyderabad for exports to LatAm
22. Apollo, Chinese company to set up hospital in Hainan
23. Nirma cements US$ 1.4-bn Lafarge India buyout
24.1. ISRO successfully launches 20 satellites from Sriharikota
24.2. Even NASA wants to work with us, which it wouldn't have before
25. USFDA nods to Indian drugs up 84% in 1 year

* * *

LISBON, 20th July 2016

NEWSLETTER, 20-VII-2016

INDIA

– GENERAL POLICY, INFRASTRUCTURES, COUNTRY FINANCES, ETC.

1.1. India's best is yet to come: Narendra Modi

Livemint | Jun. 28, 2016

New Delhi: Prime Minister Narendra Modi on Monday emphasized the progress his government has made in the little over two years it has been in power, even as he struck a pragmatic note, far removed from the hyperbole that characterized his speeches in the run-up to the 2014 parliamentary elections.

Modi also outlined the contours of his government’s foreign policy, particularly with respect to regional rivals Pakistan and China. Taking China’s rebuff at the recent meeting to consider India’s membership of the Nuclear Suppliers Group (NSG) in his stride, the Prime Minister said the central pillar of this engagement is continued dialogue and progressively seeking out common ground. “Foreign policy is not about changing mindsets. Foreign policy is about finding common meeting points,” he said.

Modi also signalled his government’s resolve to push for the passage of the much delayed constitutional amendment bill for implementation of the goods and services tax (GST). He sought to politically isolate the Congress, which has blocked the passage of the bill in the Rajya Sabha, and was careful to emphasize that its passage would benefit the poorer segments in states such as Bihar, Odisha and West Bengal—all opposition ruled states.

In an 85-minute interview with Times Now, Modi said there is now no “trace” of the all-pervasive “disappointment” that summed up how people felt about the then-ruling United Progressive Alliance in 2014.

The Congress-led coalition was voted out for its mismanagement of the economy and a spate of corruption scandals. Only a comparison with the decade for which the UPA had governed India would show people “where we were and where we are now”, Modi added.

“The entire system was engulfed in disappointment,” the Prime Minister said, referring to the UPA’s legacy. “And today you can see that in every sector, the changed circumstances can be seen,” he added. Since taking charge, the Bharatiya Janata Party-led (BJP-led) National Democratic Alliance (NDA) has focused its efforts on large-scale campaigns that seek to improve sanitation and hygiene; revive manufacturing; foster entrepreneurship; train Indians in areas where jobs can be had; and bring more Indians into the banking and finance mainstream.

Setting out the defining ideology of his government, he said, “Our philosophy is to reach the last man in the line,” adding, “So my development parameter is very simple. It is about how the poorest of the poor can benefit from development. The poor is the central focus of my economic agenda.”

Modi emphasized that job creation was the key to fighting poverty and addressing growing aspirations, among the “neo” and middle class. “The young have their aspirations. So another aspect of my policies you must have seen are Start-Up India, Stand Up India, seaport activity... These changes directly appeal to the middle class. We have to create jobs. How will jobs happen? Till I invest in the development of infrastructure, there will be no job creation,” he said.

Alluding to the obstructionism of the Congress in the Upper House, the Prime Minister skilfully linked all the policy changes undertaken by the NDA to alleviate poverty, in the process giving key political cover to the reform initiatives, including GST.

Political analysts said the comments were aimed at isolating the Congress.

“PM’s comments on the Congress party were very tactical and oriented towards a disunity among he opposition. If one notices, in the initial period, the opposition unity was high but soon after the logjam got prolonged, one could see fissures in the opposition as a whole. In that way, Modi’s statement is crucial and aims to politically isolate the Congress party,’’ said Abhay Kumar Dubey, a New Delhi-based political analyst associated with the Center for the Study of Developing Societies.

The NDA has liberalized foreign direct investment rules—the country attracted $55.45 billion of FDI in 2015- 16, compared with $45.14 billion the previous year—although it has steered clear of wiping the slate clean when it came to some of the previous government’s tax policies.

The NDA has had to cope with the slowing global economy, two successive droughts and the consequent agrarian crisis, and hot-heads within the BJP who have lashed out at anything and anyone that they believe don’t have a place in their concept of a ‘Hindu nation’.

Modi, proactively eloquent ahead of the 2014 parliamentary elections, has been strangely silent at the statements and actions of these hot-heads, although in his interview with Times Now he said that people were giving them too much importance.

For the first time, he also spoke out in support of Reserve Bank of India governor Raghuram Rajan who has been at the receiving end of criticism, some of it personal and nasty, from BJP Rajya Sabha MP Subramanian Swamy. He characterized such criticism as “inappropriate” and added that his own experience with Rajan “has been good”. “I appreciate the work he has done,” Modi added.

Manisha Priyam, a Delhi-based political analyst, said, “His strongly defensive stance towards Rajan showed that Modi is in command of the party and has distanced himself from the people making remarks against Rajan’s ‘foreign roots’.”

While he defused the controversy around Rajan’s exit, the prime minister also listed out his government’s achievements, particularly on inflation. Inflation is nowhere near being the menace it was in 2013 and 2014, although it has gone up in recent months. And India’s economy expanded by 7.6% in the year ended 31 March compared with 7.2% a year ago, 6.6% in 2013-14 and 5.6% in 2012-13.

“There is no doubt that the rate of inflation has come down compared to (what it was during) the previous government, but the increasing gap between supply and demand for pulses cannot be addressed through imports or by cracking down on hoarding,” said T. Haque, director of the Delhi-based Council for Social Development and former head of Commission for Agricultural Costs and Prices.

The government’s efforts, Modi stressed, were on inclusion, to cater to the needs of the poor, and on meeting the aspirations of young people.

The easiest way to create jobs, he told Times Now, is to make it easier for small businesses to operate and do well, which, in turn, would encourage them to hire more people.

“Job creation is work in progress. Manufacturing, construction and highway development are all labour intensive sectors. It is appropriate to focus on these sectors for job creation. The textiles sector, which is labour-intensive, but is performing below potential, deserves more attention. Also, the government should keep in mind the increase in productivity while addressing the issue of employment creation,” said D.K. Joshi, chief economist at rating agency Crisil.

Although the NDA’s continuation of some of the UPA’s entitlements-led approach has not gone down well with some of its supporters who subscribe to a far more right-leaning economic philosophy, Modi said this focus on development would be his party’s preferred approach to next year’s all-important state election in Uttar Pradesh.

According to Modi, the government had acted to address the problem of rural distress—triggered in the aftermath of two consecutive droughts and a collapse in global commodity prices. While the NDA persisted with the rural employment guarantee scheme of the UPA, it has also taken steps to use market-based instruments to underwrite the growing risks of farming commercial crops. In this, he dwelt on the crop insurance scheme rolled out by the NDA.

Admitting that a constant electoral cycle (five states have gone to the polls in 2016) could affect policymaking, Modi spoke of his government’s and party’s support for a move to hold state and parliamentary elections simultaneously. That process, however, is in its preliminary stages and could take a while, if anything comes of it at all. In the meantime, the government of the day will need to build bridges with rivals, something that Modi said his party has been able to do when it comes to the critical GST, with most parties except the Congress. And even that, he seemed to suggest, wasn’t for want of trying, at least not on his part.

Indeed, the Congress, he hinted, was only focusing on the negatives—such as India’s inability to be accepted into the NSG, which he said was a process that would follow its own cycle—and not on the positives, such as his successful visit to the US and improving relations between the two countries.

Foreign policy has been big on Modi’s agenda, although he described India’s push in this area as a team effort involving several ministries apart from his office. India, he added, has had to make up for lost time in a world that is no longer bi-polar. India’s application to the NSG was opposed by China and a few others (although the government has clarified that there was 32 interventions in its favour in the 48-member body).

With China, Modi said, the only way forward was through talks, and the objective of foreign policy was to find “common meeting points”.

“Previously, Modi’s efforts were focused on friendship and economic engagement with China. Now, Modi seems to have understood that China would follow an assertive foreign policy, one that positions China as a leading power in the world which will not allow India to stand in the way,” said Lalit Mansingh, former foreign secretary.

“I think we will now see a more realistic foreign policy being crafted vis-a-vis China,” Mansingh said.

The Pakistan issue was expected to come up at the NSG meeting in Seoul last week, but it did not. India and Indians would do well not to look at everything through the Pakistan filter, Modi said.

“Pressure on terrorists has increased and their schemes are proving unsuccessful,” he said, but admitted that dealing with Pakistan was not easy because “there are different types of forces operating” in that country. India wants friendly relations with Pakistan but “without compromising on our interests”, Modi said in the interview.

Meenal Thakur, Pretika Khanna, Gireesh Chandra Prasad, Sayantan Bera and Shreeja Sen contributed to this story.

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

1.2. Modi’s ‘golden last chance’ to tax evaders: Come clean by Sept 30

Our Bureau | BusinessLine | 26 Jun. 2016

In a strong message to tax evaders, Prime Minister Narendra Modi asked them to take advantage of the latest government scheme and come clean before September 30.

During his Mann Ki Baat radio address, Modi said the government will not initiate any enquiry against those who voluntarily disclose their assets and income before the deadline.

Addressing the nation through his monthly radio programme Mann Ki Baat, he asked the evaders to see this as the “golden last chance”.

He said the government has created a window of opportunity for all those who have undisclosed income to come clean.

“I appeal to all to take advantage of this good opportunity to be part of this transparent government scheme and consider this the last chance,” he said, adding that the government wants to create an atmosphere of trust with the citizens.

Referring to his recent interaction with income-tax, Customs and excise officials, the Prime Minister said he had told them not to consider the countrymen “thieves” but repose faith in them and “handhold” them to become law-abiding citizens.

Pointing out that only 1.5 lakh people have taxable income of over ₹50 lakh, Modi said, “This cannot be digested by anybody. One can see lakhs of people with taxable income of over ₹50 lakh in big cities.”

2.1. Govt sets stage set for largest ever spectrum auction (US$ 83.78 billion)

Livemint | Jun. 23, 2016

New Delhi: The Union government on Wednesday cleared India’s largest auction of telecom spectrum. Based on the base price, the spectrum is valued at Rs.5.66 trillion (US$ 83.78 billion). The auction of the seven spectrum bands will also, for the first time, offer the highly efficient but expensive 700 megahertz (MHz) frequency.

While the receipts from the auction will boost the Union government’s exchequer, the availability of spectrum will expand the bandwidth and the ability of telecom companies to service consumers and address the problem of call drops.

In the event of aggressive bidding, the balance sheets of telcos, already overburdened by debt, will come under greater pressure.

The government is putting on sale spectrum bands of 700MHz, 800MHz, 900MHz 1,800MHz, 2,100MHz, 2,300 MHz and 2,500 MHz. The 700 MHz band, which is the most expensive and most effective, is likely to generate less interest from telecom service providers.

The auctions should help telcos improve quality of service as the ecosystem of data consumption in the telephony space is driven by content. The Telecom Regulatory Authority of India’s (Trai’s) first independent test drive on dropped calls, conducted in Delhi, showed that most telecom operators failed to meet the benchmark. Studies conducted in Hyderabad, Bhopal and Mumbai came up with similar results.

The spectrum auction plan was recommended by Trai and reviewed by the Department of telecommunications before being put before the Union cabinet for approval.

Finance minister Arun Jaitley called it the biggest spectrum auction in Indian history. He added that fresh consultations were needed on the issue of spectrum usage charges (SUC), and Trai has been asked to make new recommendations.

“For spectrum usage charges, it has been thought through that a flat rate may not be particularly appropriate for the past, present and future, so a referral limited to SUC needs to be done again and Trai has been asked to respond at the earliest,” said Ravi Shankar Prasad, minister of communications and information technology. On 7 June, the Telecom Commission announced a weighted average methodology to calculate SUC and lowered the rate to 3% for the upcoming auction from 5% in earlier auctions. The weighted average calculation was based on the time and frequency band of acquisition.

“In case of spectrum usage charges, the right thing would be to simplify it with a uniform rate instead of making it complex by charging multiple rates,” Hemant Joshi, partner, Deloitte Haskins & Sells Llp, said.

The cabinet approved Trai’s proposal on pricing of the spectrum.

“Almost 2,000 MHz of spectrum will be auctioned and the pricing remains same as recommended by Trai,” a top official in the department of telecom said on condition of anonymity.

The official added that the lock-in period for the payments made for purchase of spectrum has been reduced to one year from three years to encourage competition.

To be sure, this will also allow a company to exit the sector if it finds its business to be unviable.

The cabinet has cleared the payment terms suggested earlier—25% upfront for all bands under 1 gigahertz and 50% upfront for 1,800 MHz, 2,100MHz, 2,300MHz and 2,500MHz bands and the rest to be paid on two years moratorium and ten years instalment, the official said.

“The notice inviting applications will come out after clarification on SUC is received from Trai,” he said. Normally, it takes 60 days for the government to conduct the auction after cabinet approval.

Joshi said the government may not be able to meet its expectations of revenue generation. “There is no do-or die situation for spectrum in terms of need in the industry and the ecosystem for the 700 MHz band is yet to develop. Therefore, considering the debt size and hovering uncertainty due to enhanced competition, there is a doubt that the government will be able to meet their expectations,” he said.

To enable better operability, it makes sense to have a pan-India presence, which in the past has triggered aggressive bidding. The 2015 spectrum auction, in which the government had put up a total of 380.75MHz of spectrum for sale in the 800MHz, 900MHz, 1800 MHz and 2100 MHz bands, raised Rs.1.1 trillion.

The most expensive spectrum band is 700MHz, at Rs.11,485 crore for 1 MHz. This makes the industry liable to pay Rs.57,425 crore for 5MHz on a pan-India basis.

Speculation is rife in the industry about the participation of telcos in the auction, especially in the 700MHz band, because of the ambitious base price and the significant amount of debt on the balance sheets of telecom companies, which makes affordability a question. This band alone has the potential to fetch bids worth over Rs.4 trillion.

“The good news is we will have more spectrum available than required in the immediate future; the supply side is being catered to with this. However, an artificial price fixed by government is the constraint,” said Rajan S. Mathews, director general, Cellular Operators Association of India.

“The 1,800MHz, 2,100 MHz and 2,300 Mhz have fair amount of interest and the industry would prefer getting 700Mhz but the participation seems unlikely because the telco’s pockets don’t allow arranging funds of such magnitude and this would create a lot of burden on already debt-stressed industry. Even the sale of 2,500MHz is questionable because it is an untested band and doesn’t have the adequate ecosystem,” he added. The entry of Mukesh Ambani-controlled Reliance Jio Infocomm Ltd is likely to change the dynamics of the telecom industry significantly.

Ambani has announced an investment of $22 billion in his telecom venture, leaving him with enough cash to bid for the 700MHz band and putting existing telecom companies, hamstrung by combined debt of Rs.3.8 rillion as of December, on the back foot.

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

2.2. Govt nod to Rs 6,000-cr ($900 million) road projects in 3 states

Business Standard | Jun. 30, 2016

New Delhi: The Cabinet Committee on Economic Affairs (CCEA) approved four-laning of three national highways in Punjab, Odisha and Maharashtra, at an investment of nearly Rs 6,000 crore, mainly to ease traffic on busy routes.

CCEA approved development of four-laning of Phagwara-Rupnagar section of the national highway in Punjab. The cost is estimated to be Rs 1,444.42 crore. The total length of the road to be developed is approximately 80.820 km.

Four-laning of Angul-Sambalpur section of the national highway in Odisha was also approved on Wednesday. The cost is estimated to be Rs 2,491.53 crore. The total length of the road is approximately 151 km. Another four-laning project of Aurangabad-Telwadi section of the national highway in Maharashtra was also approved by the CCEA at an estimated cost of Rs 2,028.91 crore, totalling a length of 87 km.

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

3.1. Open sesame: FDI rules eased further

Our Bureau | BusinessLine | 20 Jun. 2016

In the second tranche of reforms of the country’s Foreign Direct Investment (FDI) rules in less than a year, the government has announced further relaxation in the norms for nine sectors, including defence, food processing, civil aviation, broadcasting and pharmaceuticals.

In single-brand retail, the government has tweaked the rules to exempt investors from the mandatory domestic sourcing of 30 per cent inputs, by extending it to all entities for three years and for a further five years for retailers selling products with ‘state-of-art’ and ‘cutting-edge’ technology. The decision was taken at a meeting chaired by Prime Minister Narendra Modi and attended by senior Ministers, including Finance Minister Arun Jaitley, on Monday.

“The twin objective is to attract more foreign investments to promote India as a manufacturing hub and to create jobs,” Commerce Minister Nirmala Sitharaman said after the meeting. The DIPP will now work on a negative list of sectors where conditions and caps will continue to exist.

Reacting to the announcements, Congress spokesperson Jairam Ramesh said, “It is a reaction to show to the world that it’s business as usual even as Raghuram Rajan has announced his exit. The BJP has always opposed FDI. It is ironical that it is today claiming FDI to be the answer to all of India’s economic problems.

Domestic investment is far more important than FDI and only by FDI we are not going to be able to solve India's problems.” In food processing, it has been decided to permit 100 per cent FDI under the government approval route for trading, including through e-commerce, in respect of food products manufactured or produced in India. “This is in line with the Budget announcement made by the Finance Minister,” said Sitharaman.

In defence, the government has dropped the condition of access to ‘state-of-the-art’ technology for allowing foreign investment beyond 49 per cent, which is permitted through the government approval route. “The thought process behind this was that we are spending too much time in defining things and understanding what exactly is state-of-the-art. So, instead of keeping it verbose and making too many things binding us down, by using this one word ‘modern’, we hope to bring in technology that we require,” Sitharaman said.

The FDI limit for the defence sector has also been extended to manufacturing of small arms and ammunitions covered under the Arms Act. Economic Affairs Secretary Shaktikanta Das said the relaxation has been made because there was not enough interest from foreign investors.

In the pharmaceutical sector, where FDI in brownfield (existing) projects was allowed only through the government approval route, the Centre has now decided to permit up to 74 per cent FDI under the automatic route. For greenfield (new) projects, 100 per cent FDI through the automatic route is already allowed.

In civil aviation, the rules now allow100 per cent FDI under the automatic route in brownfield airport projects as opposed to 74 per cent at present. In scheduled air transport service/ domestic scheduled passenger airline and regional air transport service, the FDI limit has been raised to 100 per cent, with FDI beyond 49 per cent through the government approval route.

In the broadcasting sector, a decision has been taken to allow 100 per cent FDI through the automatic route for teleports, direct to home, cable networks as well as mobile TV.

In private security agencies, the FDI limit has been enhanced from 49 per cent to 74 per cent, with 49 per cent under the automatic route and higher under government approval.

The requirement of ‘controlled conditions’ for 100 per cent FDI in animal husbandry under the automatic route has been dropped.

3.2. Most foreign investment will not need prior nod: FM Arun Jaitley

Economic Times | Jun. 21, 2016

New Delhi: The liberalisation of the foreign direct investment regime signals the NDA government's commitment to economic reforms and will help in boosting growth in the years to come and significantly reduce the role of the foreign investment promotion board, finance minister Arun Jaitley said on Monday.

"The government is committed to carry on the reforms process. Today's FDI reform is one important step in that direction," Jaitley told TOI in an interaction soon after the government unveiled the reform measures.

"After this reform, an overwhelming amount of FDI will come into the country through the automatic route. Only in a few cases which are now on the negative (list) will the FIPB be required," said the FM.

The steps were announced two days after Reserve Bank of India (RBI) governor Raghuram Rajan said he would not opt for a second term at the central bank and experts said they helped boost sentiment. The government said Monday's meeting convened by PM Narendra Modi was pre-scheduled.

The NDA government has accelerated the pace of reforms in the past few months and has secured the passage of key bills such as the Insolvency and Bankruptcy code. The objective is to make India an attractive destination and significantly improve the ease of doing business in the country.

"The criteria we have followed is that in all such sectors where a ministerial permission, or a licence from another governmental authority is required, FDI can be placed on the automatic route," the FM said.

"The government has clearly demonstrated its intention that the reform process will go on. The Indian economy will continue to be on the upward path over the next few years," Jaitely said.

Prime Minister Narendra Modi said the FDI reforms will help create jobs and benefit the overall economy. "Today's FDI reforms will give a boost to employment, job creation & benefit the economy," Modi said on micro blogging site Twitter. He said the amendments in FDI policy has been done to promote ease of doing business. "India now the most open economy in the world for FDI; most sectors under automatic approval route," Modi said.

Jaitley said the idea behind the liberalisation was to move to a simpler regime. "It has got reduced and only in very few cases which are now on the kind of a negative list is the FIPB required," he said when asked whether the FIPB will be phased out eventually or not.

"Where permission from other agencies is required, whether it is the ministry of defence or the ministry of I&B or the home affairs, in that case we can allow FDI to come in through the automatic route because it still has to go through another governmental permission," said Jaitley.

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

4.1. States agree on 24x7 power to all households by May next

Our Correspondent | BusinessLine | 17 Jun. 2016

All the States have resolved to provide 24x7 power to all households by May 2017, around a year ahead of target set by the Prime Minister, said Union Power Minister Piyush Goyal at the end of a two-day meeting of Power Ministers, which concluded in south Goa on Friday.

Addressing a press conference at the end of the meeting, Goyal said all the States, except those affected by leftwing extremism, have also resolved to electrify all remaining unelectrified villages by December, 2016 and States will award contracts in the next 30 days for this work.

Power for all

Speaking about the outcome of the meeting, the Minister said it was resolved to provide power to all households in 18,452 villages in the country in a mission mode by May 1, 2017.

The States also resolved to ensure that operational and financial milestones in the memorandum of understanding for Ujwal Discom Assurance Scheme (UDAY) would be implemented.

Smart meters

In a landmark decision, all States resolved to procure henceforth only smart meters which are tamper proof and communication-enabled.

The minister said the cost of smart meters has been brought down by 60 per cent from ₹8,000 to ₹3,223 as a result of Central procurement and the endeavour is to go for only such meters in the future for all the 25 crore consumers in the country.

The Minister also announced that a 4-digit all-India number (1921) has been fixed for consumer complaints across the country.

Goyal said it was a fruitful dialogue over two days and everyone participated in it in a cooperative and collaborative manner.

“The meeting disproved the notion that different political interests cannot bring about commonality of a purpose,” he said.

Hydro power policy

The meeting also discussed hydro power policy and sought to work out ways of reviving small (25 MW or less) stalled hydro projects with cooperation from the States to provide new thrust to the hydro sector.

He said a committee for this has been set up which will submit its recommendations by September 30, this year.

4.2. Adani plans over ₹50,000 cr ($7,5 bn) investment in Jharkhand

BusinessLine | 8 Jul. 2016

Adani Group is planning to invest over ₹50,000 crore in Jharkhand.

As a part of the investment plan, the group wants to set up a 1,600-MW thermal power plant in Godda district of the State, said Chief Minister of Jharkhand Raghubar Das on Friday.

He was addressing the media after announcing the formation of the Jharkhand Investment Promotion Board (JIPB).

It consists of industry leaders, business executives, academicians and civil servants. The first meeting of the JIPB was held in the city.

Das said that 25 per cent of electricity from the power project in Godda would be provided to the State, rest of the power would be supplied to Bangladesh.

Chief Secretary of Jharkhand Government Rajbala Verma said that the State government already has entered into an MoU with Adani Group for the power plant.

The group was considering developing coal bed methane assets in the State, she said.

Verma said during the ‘Make in India’ week (February 2016) that the State government had received 27 investment proposals.

The investment proposals are from sectors such as agriculture, health and mines and business houses such as Aditya Birla, Essar and Tata have shown interest in investing in the State.

Das said that the Jharkhand Government is also in the process of forming a land bank for industrial use, where land belonging to four State government corporations would be pooled together.

For setting up an IT park, 200 acres and 400 acres for smart city has been earmarked, he said. He informed that the State government was also keen to tap the tourism potential, and accordingly, taking steps to develop tourist circuits in the State.

The State also has a huge solar power potential and the Government is in the process of developing 1200 MW of solar power in the State.

5.1. Prime Minister launches Smart City Mission into implementation mode

Press Information Bureau | Jun. 27, 2016

New Delhi: Prime Minister Shri Narendra Modi today launched the flagship Smart City Mission into implementation mode with launch of 14 projects of Pune’s Smart City Plan, exactly a year after he set off the mission by releasing the Mission Guidelines.

Speaking on the occasion to a packed audience in the 5,000 capacity Shiv Chatrpati Sports Complex in Pune, Prime Minister said that Smart City Mission is now succeeding as a people’s movement as envisaged. He expressed satisfaction over citizen participation in preparation of smart city plans of various cities with over 25 lakh people giving serious suggestions on MyGov.in. Shri Modi clarified that the central government did not select the smart cities but it was the citizens who enabled their selection in the ‘City Challenge Competition’. He asserted that if people were empowered and involved for participatory development, country will progress fast.

Shri Narendra Modi said that an era of competition has been ushered in for improving conditions in urban areas and urged the citizens to rise to the challenge for bettering the conditions in respective cities and towns. Stating that he has recently reviewed the progress of Smart City Mission over the last one year, Prime Minister expresses satisfaction over enthusiastic and large scale participation of people in formulation of comprehensive smart city plans, the way the City Challenge Competition was held for selection of cities, formulation of projects there under and their launch today. He complimented the team led by Minister of Urban Development Shri M.Venkaiah Naidu.

During his 35 minute address, Prime Minister elaborated on the concept of smart cities and the advantages that follow from it. Shri Modi stressed that it should not be seen as a fancy concept since the mission is meant for ensuring availability of all basic services to the people though necessary infrastructure including houses forurban poor in a comprehensive manner. He referred to extensive use of digital technology in the smart city plans for improving the quality of governance and public services.

Asserting that urbanization mitigates poverty and empowers the poor, Shri Modi said that it should be seen an opportunity instead of a problem.

Prime Minister stressed that if people were empowered and involved in participatory development, the country would develop fast. Noting that an era of competition among cities and towns has come to prevail, he urged the citizens to rise to the challenge for improvement of respective urban areas.

Referring to the changing attitudes, Shri Modi said that gone were the days when the central government was looked as a giver of funds, it was now being looked at as a source of ideas. Elaborating on this, Shri Modi said that in all the recent surveys conducted, Swachh Bharat Mission was ranked the most popular of government’s initiatives since the idea of sanitation appealed to the people.

Prime Minister also launched ‘Make Your City Smart’ contest inviting people to come out with designs for street, junctions and open spaces and a ‘Smart Net Portal’ which is a net based platform for sharing of ideas and sourcing of solutions for smart city development.

Speaking on the occasion, Minister of Urban Development Shri M.Venkaiah Naidu said that the smart city projects launched today were the first shoots of urban renaissance taking place in the country as a result of paradigm shift in the approaches to urban development ushered in by the government. He further said that the journey towards the much desired urban transformation has begun in a Team India spirit with the collective effort of people, urban local bodies and State Governments. This transformation is an integral part of ‘Making of Developed India’, he said.

Chief Ministers of Rajasthan, Odisha and Andhra Pradesh Smt.Vasundhara Raje Scindia, Shri Naveen

Patnaik and Shri N.Chandrababu Naidu outlined their smart city vision through videolink.

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

5.2. One-window clearance may boost Mumbai realty

Business Standard | Jul. 05, 2016

Mumbai: Mumbai realtors expect the BrihanMumbai Municipal Corporation (BMC)'s single-window clearance for construction to be a game changer, which could lead to the much-needed correction in prices residential property. At present, obtaining construction permits accounts for 46 per cent of the total cost of construction, say experts.

BMC recently brought down the number of approvals builders need before starting construction from 119 to 58. This will also cut the time taken for getting approvals for a building project to 60 days against one-to-two years earlier.

According to Knight Frank Executive Director Gulam Zia, while regulatory uncertainties plague the entire Indian realty, it's always a make-or-break situation in Mumbai due to the high stakes involved. “Due to

exorbitant land values already spent by developers, the cost of delay is ultimately passed on to buyers. So, if BMC can actually deliver on its promise of single-window clearance, with a time-bound approach, we can

expect price correction in the overheated Mumbai market,” he told the Business Standard.

According to BMC officials, single-window clearance envisages, among other things, the use of selfcertification by developers for approvals related to debris removal, property tax, and pest control.

Besides, processing of no-objection certificates (NOCs) will be initiated even before the application for permit is submitted. There will also be simultaneous issuance of intimation of disapproval and commencement certificate within 30 days from the receipt of proposal including site visit and approval of concessions, if any, from authorities.

Ramesh Nair, chief operating officer (business) and international director at JLL India, said if the reforms succeed in bringing down the costs involved in obtaining permits, the benefits could be passed on to consumers, making housing more affordable as well as boosting the absorption of real estate in the city.

"Earlier, a building construction proposal in Mumbai required a series of approvals from 30-35 different departments of the municipal corporation, the state government and various central government agencies. Under the new system, developers will require 58 certifications against 119 earlier, a reduction of 52 per cent in the number of approvals, NOCs and BMC remarks,'' he added.

Nahar Group Vice-Chairman Manju Yagnik said the benefits are manifold as this will reduce the time taken for getting clearances from various authorities. It will also result in faster completion of projects and quicker handover to the home buyer. For the industry, it will help root out any anomaly, which also adds up to the final cost of an apartment thus making the end product much cheaper for the home buyer.

"The end users are definitely going to benefit because as now the final cost to home buyer will be much lower. This is due to the fact that developers can complete their project and pay of the debts on loans taken much sooner," she added.

According to Kumar Urban Development spokesperson Kruti Jain, the smooth, easy approval process will have a direct impact on the cost of construction reduction and it will also reduce corruption. Developers will have some amount of money, which they can pass onto home buyers provided it's implemented to full potential. "The online procedure for approvals has nearly half of the original approvals and is savvier to navigate through. All these factors will reduce the price of homes significantly as it originally used to take up approximately 36% of the cost of construction. Lower costs will boost demand and keep the real estate market vibrant,'' she opined.

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

– AGRICULTURE, FISHING & RURAL DEVELOPMENT

6.1. Centre to give farm exports an organic booster shot

BusinessLine | Amiti Sen | 30 Jun 2016

In a move that could give a boost to export of agriculture and processed food from the country, India is framing its own organic products policy with clearly prescribed safety standards, traceability norms, soil certification guidelines and good agricultural practices.

The good agricultural practices (GAP) followed by countries such as the US, Brazil, the Netherlands and France are being studied by trade experts and officials to generate adequate inputs for the policy, a government official told BusinessLine. The Commerce Ministry is framing the policy in collaboration with the Food Safety and Standards Authority of India (FSSAI).

“The idea is to have one uniform policy for the organic products sector so that domestic consumers as well as foreign buyers gain confidence that the items that are being sold to them as organic meet certain laid down standards,” the official added.

A policy is also important for farmers as it would let them know exactly what they are supposed to do when they are organically farming a certain product, pointed out Arpita Mukherjee from research body ICRIER. “Every organic product has its own set of pesticide and bio-fertiliser and farmers have to know exactly what inputs they are to use,” she said.

While the global organic food market is estimated at an annual $ 72 billion, exports from India are a miniscule $ 298 million. India exports mostly to the US, Europe, Korea, Australia, New Zealand and countries in South East Asia.

In India, organic products for exports are certified by various certifying agencies accredited by the National Programme for Organic Production (NPOP), India, under Agriculture and Processed Food Products Export Development Agency (APEDA). For organic products sold in the domestic market, the certification process is largely voluntary, but FSSAI and Agmark are taking some steps to regulate it, the official added.

Certification of organic soil in the country is a problem as there are no domestic certification agencies for that and the services of foreign certifying agents is use to certify the soil.

“When India is exporting organic products to the US or to the EU, it has to be first established that the norms being followed at identified organic farms match the existing norms in the buying countries,” the official said. With a proper policy in place, the process of cross checking guidelines by importing countries would become smoother. The same guidelines would also apply on items for exports, imports and domestic market.

Traceability of inputs, especially in case of processed food to determine if all ingredients in a certified organic product are also organic, is also expected to improve once the policy is in place, the official added.

India produced around 1.35 million tonne of certified organic products which includes all varieties of food products such as sugarcane, oil seeds, cereals & millets, cotton, pulses, medicinal plants, tea, fruits, spices, dry fruits, vegetables and coffee.

6.2. Govt aims to connect 125,000 villages with 80,000 mini-buses

Livemint | Jul. 13, 2016

New Delhi: The central government, in partnership with state governments, will purchase 80,000 mini-buses to connect 125,000 villages, two people aware of the matter said.

The move, which could mean a windfall for mini-bus makers such as Tata Motors Ltd, Mahindra and Mahindra Ltd and Ashok Leyland Ltd, will also integrate the villages with the country’s economic mainstream, providing access to markets as well as better employment and education opportunities.

The contours of the scheme, Pradhan Mantri Gramin Parivahan Yojna, are a work in progress, and it is not clear whether the ministry of road transport and highways or the rural development ministry will oversee it. “The Prime Minister’s Office wants a low-cost mobility solution for rural areas,” a top roads ministry official said, adding that the scheme is likely to be ready by next year’s Union budget.

The scheme has already been approved by a group of state transport ministers at a meeting convened by Union transport minister Nitin Gadkari. The group is headed by Rajasthan transport minister Yunus Khan. The funding pattern of the scheme is likely to be on the same lines as the Pradhan Mantri Gramin Sadak Yojana (PMGSY), where 60% comes from the centre and 40% from the states.

“Private bus operators can’t be forced to run buses in villages and state transport corporations are also unable to reach villages because of non-viable routes,” said Khan. The result: despite the existence of roads, there’s no connectivity. The states will also do their bit by issuing permits for the mini-buses, he added.

Industry lobby group Society of Indian Automobile Manufacturers (Siam) welcomed the move. “The scheme will be very useful. If you look at the buses segment, it is still not doing good. If some purchases from the government happen, that will be helpful,” Siam’s deputy director general Sugato Sen said.

Led by a recovery in medium and heavy commercial vehicles segment, the sales of trucks and buses jumped 11.51% to 685,704 units during the year ended 31 March. Siam does not provide data for buses separately.

Ravi Pisharody, president of Tata Motors’ commercial vehicle business unit, said, “While the initiative may

lead to a short- to medium-term spike in the demand for passenger commercial vehicles, we at Tata Motors

are encouraged by the government’s initiative to help provide last-mile connectivity for people in rural areas

and have a range of products and solutions, along with a network, to cater to such a demand.”

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

7.1. Amul to invest Rs 3,000 crore by 2020 to fund expansion

Livemint | Jun. 30, 2016

New Delhi: Amul, the milk and dairy products brand from Gujarat Cooperative Milk Marketing Federation Ltd (GCMMF), will invest about Rs.3,000 crore to increase its milk processing capacity and to expand presence by 2020, said R.S. Sodhi, managing director, GCMMF, in New Delhi on Wednesday. Sodhi was meeting media persons in New Delhi to announce the co-operative’s support to the Indian team for Rio 2016 Olympic Games as its official sponsor. Amul’s association with Indian Olympic Association (IOA) to promote the multi-sport event will cost the co-operative a sum of Rs.1 crore and it will launch a series of advertising campaigns to promote this association in the coming months.

Responding to questions on Amul’s future plans, Sodhi said that Amul will spend Rs.600-800 crore every year to increase its milk processing capacity. At present, the company has the capacity to process 2.8 crore litres of milk per day which will be increased to 3.2 crore litres by March 2017.

“We will also enter Bihar, Jharkhand, Kerala, Odisha and certain parts of the north-east region starting with Guwahati. We’ll try to cover these states by March 2017,” Sodhi said.

According to the MD, the co-operative plans to start operations at its two new plants in Kanpur and Lucknow in next 2-3 months. “We have invested Rs.450 crore to set up these plants” said Sodhi, adding that the cooperative will be able increase the average amount of milk procurement by 20 lakh litres per day, from 1.7 crore litres to 1.9 crore per day in 2016-17.

In August 2015, Amul had announced that it would treble its cheese production capacity by investing Rs.750 crore. Of this, Rs.150 crore was spent at Anand facility to double capacity to 80 tonnes per day. “We also spent Rs.600 crore in setting up a new plant in Gujarat’s Palanpur which will be operational from next month,” Sodhi added.

Dheeraj Sinha, chief strategy officer, South Asia at advertising agency Leo Burnett identified Amul’s initiative to support Indian team at Rio 2016 Olympics as an effort to garner visibility across different media platforms. “Rio Olympics is a high velocity event and will get the brand a lot of visibility, he said.

“Milk and nutrition is not too far away from athleticism as an idea. But all depends on how Amul connects its products to the performers. Amul has to find a human appeal and an interesting way to celebrate India’s bit at Olympics,” Sinha added.

On 2 June, Amul increased milk prices by Rs.2 per litre in Delhi and Gujarat due to increase in production cost. “There would not be any further hike in prices,” Sodhi said.

In 2015-16, GCMMF registered 11% growth in its turnover, to Rs.23,005 crore from Rs.20,733 crore in 2014-15. India’s dairy market is estimated to cross $140 billion by 2020, from about $70 billion in 2013, according to a 2013 study by Investor Relations Society (IRS), a global network of investor relations professionals.

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

7.2. Coke wants to pulp more mango for Maaza

BusinessLine | Vinay Kamath | 26 Jun. 2016

Ramesh Naidu, a 45-year-old farmer, is a happy man. His 14-acre mango farm at Samireddypalli village, 12 km from Chittoor town in Andhra Pradesh, will yield five tonnes of mango per acre this year. Taking to ultra high density plantation (UHDP) three years ago,

Naidu planted over 600 trees in an acre, compared with just 40 trees in the traditional practice, which yielded him just 1.5 tonnes of mangoes an acre.

Project Unnati

The trees in Naidu’s farm are pruned to keep them short, and intensive drip irrigation ensures they get the right amount of water, fertiliser and pesticide.

The Totapuri mangoes are, well, literally low-hanging and can be plucked standing beside the tree.

Like the 1,000 farmers across Chittoor district, Naidu is part of Project Unnati, a Coca-Cola and Jain Irrigation initiative to increase productivity of the local mango crop. Jain processes the mango pulp and is the largest supplier to Coca Cola’s Maaza brand, now in its 40th year.

Coke acquired the brand from Parle in 1993.

Maaza uses alphonso pulp as well which is sourced from farmers in Maharashtra and Gujarat.

Venkatesh Kini, President, Coca-Cola India, has set an ambitious target to make Maaza, a ₹3,000-crore brand today, a $1-billion brand (approximately ₹6,700 crore) in sales by 2023.

This target will see mango pulp procured to more than two lakh tonnes, worth ₹1,100 crore annually. Coke

now uses up one lakh tonnes of pulp worth ₹650 crore.

Benefiting farmers

“This will benefit at least a lakh farmers countrywide; we are excited what it can do for the agri sector and the food processing industry,” says Kini. In Chittoor alone, 10,000 farmers will be covered.

Anil Jain, Vice-Chairman and MD, Jain Irrigation, says the way forward for Indian agriculture is to adopt large scale the practice of UHDP. Jain says he anticipated Maaza’s growth and the demand for pulp and launched Project Unnati five years ago.

“The project over 10 years will create an ecosystem that delivers high growth and income for farmers. This

project alone is expected to deliver close to 240 tonnes of fruit by 2023,” he explains to a team of mediapersons visiting Chittoor’s mango farms.

Jain says India is the world’s largest producer of mangoes, but the average yield per hectare is one of the lowest: it’s just eight tonnes per hectare while that of Brazil is 16 tonnes.

Kini says plans are afoot for region-specific marketing campaigns and for festivals for Maaza, new packaging and lower price points, which will all boost sales. “The third prong is to make the supply chain more efficient as well,” he adds.

8.1. After textiles, NITI Aayog for reforms in other job-intensive sectors

Business Standard | Jul. 12, 2016

New Delhi: In the wake of the Cabinet clearing a Rs 6,000-crore package for the textiles sector recently, NITI Aayog is pushing for similar reforms in other labour-intensive sectors such as footwear, electrical and electronics engineering, besides light manufacturing segments such as umbrella, cutlery and furniture to generate mass employment.

A NITI Aayog official said under-employment is bigger problem for India than unemployment. Citing a survey on employment by the National Sample Survey Office (NSSO), he said India’s unemployment rate was around three per cent but under-employment could be much more. He said the problem arises because small-scale industries, which have less than 20 workers, employ 73 per cent of the working population, but contribute only 12 per cent of the total output.

While the package for the textiles sector included duty drawback for the garments sub-sector, the most notable feature was the introduction of the fixed-term employment. To encourage hiring, the government would contribute to the employees’ provident fund (EPF), 12 per cent of basic salary, on behalf of the employers. All new employees in the garments sector earning less than Rs 15,000 a month would benefit from this scheme for three years.

In a recent presentation to the Prime Minister’s Office, the Aayog said much of the demand for these labour-intensive sectors might be lying in export markets. For example, China exported footwear worth $55 billion in 2014, while India’s outbound shipment of footwear stood at merely $3 billion. The Aayog official said the $18 trillion global export market presented a huge opportunity for India to increase its share from just 1.7 per cent at present.

The official said development of coastal economic zones (CEZs) could help in attracting big players to such sectors. NITI Aayog Vice-Chairman Arvind Panagariya has been pushing for Shenzhen-style CEZs on India’s western and eastern coasts. These should be near deep-draft ports that could handle very large and heavily loaded ships, said the official. He has also been calling for tax breaks to such zones.

“Apart from conventional infrastructure, the zones should create urban spaces to house the workforce. For firms that create certain level of direct employment (50,000 jobs) tax holiday for a pre-specified period may be offered. To incentivise early investments in such zones, the tax holiday may be limited to investments made in the first three or four years of the creation of such zones,” Panagariya wrote in his blog. According to an estimate by ICRA, footwear industry holds a crucial place in Indian economy for its employment potential, especially for weaker sections. It can also support the economy through its foreign exchange earnings. India is the second-largest global producer of footwear after China, accounting for nine per cent of the global annual production of 22 billion pairs, compared with China’s share of 60 per cent.

India produces 2.1 billion pairs a year, of which 90 per cent are consumed domestically while the remaining

are exported, primarily to European countries. According to a report, the country’s footwear sector is highly

fragmented with 15,000 small and medium enterprises operating largely in the unorganised segment and the limited presence of the organised segment.

With the influx of a large number of global brands and organised footwear companies’ penetration in Tier-II

and Tier-III cities, these players’ market share has gained significantly in the recent past and it continues to be on the rise. India exported $2.1 billion worth of leather footwear in 2015-16, down six per cent from the

previous year.

According to the ministry of heavy industries and public enterprises, the size of domestic electrical equipment industry exceeded $25 billion, contributing 1.4 per cent to the country’s gross domestic product.

The industry provides direct employment to about 0.5 million people and indirect employment to about one million. The industry contributes about 1.5 per cent of India’s total exports, whereas its share of imports is 3.2 per cent of the total imports.

India’s trade deficit in this sector has been widening, which is a matter of serious concern. The Electronic Industry Association of India estimates that the demand for electronic products would grow to about $400 billion by 2020, but domestic production would be able to meet only one-fourth of it. India exported $5.7 billion worth of electronic items in 2015-16, down five per cent from the previous year.

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

8.2. IDFC Bank buys Tamil Nadu-based Grama Vidiyal Microfinance

Livemint | Jul. 13, 2016

Mumbai: IDFC Bank Ltd on Tuesday said that it will acquire a Tamil Nadu based micro-finance institution (MFI) called Grama Vidiyal for an undisclosed amount.

Grama Vidiyal has a customer base of 1.2 million customers with an asset base of Rs.1,500 crore, said Rajiv Lall, chief executive officer of IDFC Bank. The bank has received approval from the Reserve Bank of India (RBI) for the transaction.

IDFC Bank started banking operations on 1 October 2015, converting from an infrastructure focused lender

into a universal bank. IDFC was one of two entities that got a banking licence from the RBI in 2014 along with Bandhan Bank.

As of the March 2016 ended quarter, IDFC Bank’s advances stood at Rs.45,699 crore as on 31 March, higher than Rs.43,440 crore as on 31 December. About 95% of these loans were from large firms and the remaining from smaller firms and retail customers. The bank’s deposit base as on 31 March stood at Rs.8,219 crore, of which about Rs.200 crore worth of deposits came from its retail customers.

Given the saturated nature of the urban markets, IDFC Bank has said it will focus on rural banking along with corporate banking right from the start. In an interview to Mint on 1 July 2015, before the bank was launched, Lall had said that its rural banking division would operate under the tag name of “Bharat Banking” and use technology to reach a larger number of customers in a more profitable way. “Over a three-to-five-year horizon, a bulk of our customers will come from the Bharat banking division even though a bulk of the revenues and profits will come from the corporate and wholesale bank,” Lall had said then.

IDFC Bank’s acquisition of a microfinance company comes at a time when growth in the sector has spiked.

On 27 June, Mint reported that the loan portfolio of microfinance companies grew far rapidly than their client

base last fiscal.

The loan portfolio of MFIs stood at Rs.53,233 crore as of 31 March 2016, up 84% from Rs.28,940 crore a year ago, according to data from the Microfinance Institutions Network (MFIN), a self-regulatory organization for the industry. However, this 84% jump in loans came against a much more modest 44% increase in the number of clients, suggesting the average loan per customer is on the rise. The number of branches and employees also grew at a slower pace of 22% and 36% respectively last fiscal.

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

9.1. Through the Saint-Gobain glass, find an opportunity

BusinessLine | R Balaji | 10 Jul. 2016

P Kirubakaran’s future looked bleak. The poor financial situation of his family meant he could not pursue any education beyond the X standard he had managed. The family was in debt, he had a sister to be married…

Whichever way you looked at it, Kirubakaran’s glass was empty.

Till Saint-Gobain India stepped into the picture. The glass-maker four years ago launched a programme to skill underprivileged youth in association with Nettur Technical Training Foundation, an Indo-Swiss cooperation for technical education.

The first batch of this programme is ready to graduate from Saint-Gobain India Training Centre later this week and join the company’s workforce.

Training with stipend

Saint-Gobain India, a part of the €40-billion French multinational Saint-Gobain, devised the ‘Learn While Earn’ programme for 18-23 year olds with at least X standard education to train them in modern manufacturing skills.

Over the next couple of years, the company hopes the training centre will meet all of its fresh recruitment though the students are free to look at opportunities elsewhere.

Saint-Gobain makes glass for use in construction, automobile and specialised applications and recruits 100-150 diploma holders every year. But students from the conventional education system are not industry-ready and have only theoretical knowledge.

An enthusiastic B Santhanam, Managing Director, Saint-Gobain India, is convinced that the training model should be scaled up in major industrial hubs across the State to tackle the problem of shortage of skilled human resource. Companies should come together to offer such programmes and the government can support them with viability gap funding wherever needed, he says.

Hands-on experience

Under the Saint Gobain-NTTF initiative, after two years of study followed by two years of hands-on-experience at the company’s factory at Sriperumbudur, near Chennai, the candidate is equal to somebody who has a two year working experience after a conventional diploma, says a visibly proud Santhanam.

Each student is paid a stipend of ₹5,000 a month in the first year and this increases progressively to reach ₹10,000 a month in the fourth year.

But the cost to Saint-Gobain is about ₹18,000 a month for each student.

A part of the stipend is given to the students and one portion goes to their parents; convincing them to send their wards to be trained for a career rather than sending them for unskilled job for immediate income is a challenge, he says.

Rest of the stipend is saved and returned as a lumpsum to the students at the end of the course.

“Every year our route to taking in people will only be through this system,” says a beaming Santhanam.

This certainly offers much hope for youngsters like Kirubakaran, whose glass now looks certainly half-full.

9.2. Cabinet approves Pradhan Mantri Kaushal Vikas Yojana 6 million youth to be trained afresh

Press Information Bureau | Jul. 14, 2016

New Delhi: The Union Cabinet chaired by the Prime Minister Shri Narendra Modi has approved the Pradhan Mantri Kaushal Vikas Yojana (PMKVY) with an outlay of Rs.12000 crore to impart skilling to one crore people over the next four years (2016-2020). PMKVY will impart fresh training to 60 lakh youths and certify skills of 40 lakh persons acquired non-formally under the Recognition of Prior Learning (RPL). The target allocation between fresh trainings and RPL will be flexible and interchangeable depending on functional and operational requirements.

The Scheme, completely aligned to the Common Norms as notified earlier, would move to a grant based model where the training and assessment cost would be directly reimbursed to training providers and assessment bodies in accordance with the Common Norms.

Financial support to trainees will be given in the form of travel allowance, boarding and lodging costs. Post placement support would be given directly to the beneficiaries through Direct Benefit Transfer (DBT). Disbursement of training cost to training partners will be linked to Aadhaar and biometrics for better transparency and targeting. Skill training would be done based on industry led standards aligned to the National Skill Qualification Framework (NSQF).

In view of the recommendations of the sub group of Chief Ministers on Skill Development regarding the need to address the unique skill requirements of different States, State Governments would be involved through a

project based approach under the PMKVY 2016-20 with 25% of the total training targets, both financial and physical, being allocated under this stream of the Scheme. The financial amount/budget for achieving 25% of the total training targets of next phase of PMKVY would be directly allocated to the States.

Mobilisation, monitoring and post training placement of trainees will be done through Rozgar Melas (placement camps) and Kaushal Shivirs (mobilization camps). There will be special focus on placement of trainees with incentives/disincentives linked to placement as envisaged in the Common Norms. A project based approach for Non formal training for traditional jobs is also proposed. PMKVY will, in addition to catering to domestic skill needs, also focus on skill training aligned to international standards for overseas employment in Gulf countries, Europe and other overseas destinations. There will be scholarship for student undergoing training in high end job roles under the Scheme.

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

10.1. India jumps 19 places in World Bank's logistics performance index

Livemint | Jun. 29, 2016

Mumbai: India’s logistics performance at its key international gateways has improved in the last two years, according to a World Bank report released on Tuesday.

In the World Bank’s biennial measure of international supply chain efficiency, called Logistics Performance Index, India’s ranking has jumped from 54 in 2014 to 35 in 2016.

While Germany tops the 2016 rankings, India is ahead of comparatively advanced economies like Portugal and New Zealand. In 2016, India’s international supply chain efficiency was at 75% of top-ranked Germany, said the report titled Connecting to Compete: 2016 Trade Logistics in the Global Economy. This is an improvement over the 66% efficiency when compared to the leader (again Germany) in 2014.

Better performance in logistics will not only boost programmes, such as Make in India, by enabling India to become part of the global supply chain, it can also help increase trade. In 2015-16, India’s foreign trade shrank by around 15%.

The Logistics Performance Index analyses countries across six components: efficiency of customs and border management clearance, quality of trade and transport infrastructure, ease of arranging competitively priced shipments, competence and quality of logistics services, ability to track and trace consignments, and the frequency with which shipments reach consignees within scheduled or expected delivery times. It is computed from the survey responses of about 1,051 logistics industry professionals.

Programmes, such as Make in India, and improvements in infrastructure have helped India improve its logistical performance, said Arvind Mahajan, partner and national head (energy, infrastructure and government) at KPMG India, a consultancy. He also said that the emergence of skilled professionals and technological improvements that have enabled services such as track-and-tracing have helped India close the gap with leaders.

That said, Logistics Performance Index does not address how easy or difficult it is to move goods to the hinterland. For that, World Bank has another measure—a domestic LPI which analyzes a country’s performance over four factors: infrastructure, services, border procedures and supply chain reliability.

While not all yardsticks are comparable across countries, there are some which show that India still has some way to go.

For instance, only 69% of shipments from India meet the quality criteria, compared to 72% for China and 77% for Kenya. On the other hand, it takes two and three days to clear shipments, without and with inspection, respectively—numbers comparable to China but longer than what it takes in top-ranked Germany.

Similarly, India has an average of 5 forms required for import or export, compared to 4.5 for China and 2 for Germany.

In this regard, the Goods and Services Tax (GST) has the potential to revolutionize the transport industry in India, said Capt. Uday Palsule, former managing director of Spear Logistics Pvt. Ltd. “Inter-state travel time will be drastically reduced if the hurdle of checking documents at every state border is done away with,” he said. It will also help boost the returns of the trucking industry and feed into better performance of the logistics sector, added Palsule.

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

10.2. Amazon India opens largest fulfilment centre in Sonipat

Livemint | Jul. 15, 2016

New Delhi: Amazon India on Thursday opened its largest fulfilment centre in Sonipat, Haryana, a warehouse sprawled across 200,000 sq. ft with a capacity of more than 800,000 cu. ft.

This is Amazon’s 22nd warehouse in the country. It has built up the largest warehousing capacity in the consumer Internet business in the country.

The fulfilment centre in Sonipat will help sellers in north India to stock their products with Amazon. “It will enable thousands of small and medium businesses to save money by replacing their upfront capital expense with low variable cost and pay only for the storage space they use and the orders that we fulfil,” said Akhil Saxena, vice-president, India customer fulfilment, Amazon India.

This is in line with Amazon’s planned investments in six new fulfilment centres in the country it announced earlier this month. The combined storage capacity available to sellers on Amazon.in will increase 1.5 times to 7.5 million cu. ft by the end of this year, the company said at a conference in Sonepat.

Amazon did not disclose the amount invested towards setting up the fulfilment centre.

In June, Amazon India got a $3 billion booster shot from its parent Amazon Inc. The firm has already exhausted its investment of $2 billion made in July 2014.

A fulfilment centre is essentially a large warehouse, where sellers dock products to help an e-commerce platform such as Amazon or Flipkart to pack, despatch and deliver products at faster and cheaper rates.

Amazon, which has fulfilment centres in 10 states, plans to open five more centres—one each in Coimbatore, Delhi, Jaipur and two in Chennai.

The Chennai warehouses are expected to be as big as the Sonipat one, said Saxena.

About 80% of Amazon sellers opt for fulfilment services by Amazon and over 1.3 million products are available for immediate shipping through fulfilment centres, the company said.

In June 2013, Amazon launched its e-commerce marketplace—Amazon Seller Services Pvt. Ltd—and since then has quickly ramped up its product selection to become the biggest rival to homegrown Flipkart Ltd and Snapdeal (Jasper Infotech Pvt. Ltd).

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

– INDUSTRY, MANUFACTURE

11.1. Government certifies 20 companies as incubators under Startup India

Economic Times | Jul. 15, 2016

New Delhi: The government has certified 20 private organisations, including Nasscom and iSprit, as incubators under the Startup India Action Plan. The move will help in growing the reach of incubators for upcoming startups. Currently, under the Startup India initiative, only government-run 278 incubators are allowed to certify and recommend startups.

"There is a lack of right kind of incubators. We need to provide sector-specific services, which we are trying to do in our warehouses," said Rajat Tandon, vicepresident, Nasscom.

Incubators provide a set up where multiple startups are given space to operate and are mentored to scale up their business to a certain level. There is a paucity of incubators and to fill this gap, the government is trying to engage private organisations for providing mentorship facilities to entrepreneurs.

"We will make this list available to startups, so there is a wider base of incubators available for them to reach out to," a senior government official said. Last month, the Department of Industrial Policy and Promotion (DIPP) received 571 applications from startups wanting to avail the tax benefits announced in the Startup India Action Plan.

Of these, only 106 had the required documents — one of them being the incubator's certificate qualifying them as an innovative business meeting all the other requirements of the 'startup' definition. So far, only two startups have managed to get the approval of the inter-ministerial board for tax and intellectual property rights related benefits.

DIPP has formed a monitoring committee headed by DIPP Secretary Ramesh Abhishek to take stock of the action plan's implementation once a month. The government plans to create sectorspecific incubators under the Atal Innovation Mission along with 500 tinkering labs to promote entrepreneurship, provide pre-incubation training and a seed fund for high growth startups as part of the Startup India Action Plan announced by PM Narendra Modi in January.

DIPP has also started mapping incubation centres across the country with a special focus on tier-II and III cities.

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

11.2. Establishment of Fund of Funds for funding support to Start-ups

Press Information Bureau | Jun. 23, 2016

New Delhi: The Union Cabinet, chaired by the Prime Minister Shri Narendra Modi, has approved the establishment of "Fund of Funds for Startups" (FFS) at Small Industries Development Bank of India (SIDBI) for contribution to various Alternative Investment Funds (AIF), registered with Securities and Exchange Board of India (SEBI), which would extend funding support to Startups. This is in line with the Start up India Action Plan unveiled by Government in January 2016.

The corpus of FFS is Rs.10,000 crore which shall be built up over the 14th and 15th Finance Commission cycles subject to progress of the scheme and availability of funds. An amount of Rs.500 crore has already been provided to the corpus of FFS in 2015-16 and Rs.600 crore earmarked in the 2016-17. The Fund is expected to generate employment for 18 lakh persons on full deployment.

Further provisions will be made as grant assistance through Gross Budgetary Support by Department of

Industrial Policy and Promotion (DIPP) which will monitor and review performance in line with the Start up

India Action Plan.

The FFS emanates from the Start up India Action Plan, an initiative of Department of Industrial Policy & Promotion (DIPP). The expertise of SIDBI would be utilized to manage the day to day operations of the FFS. The monitoring and review of performance would be linked to the implementation of the Start Up Action Plan to enable execution as per timelines and milestones.

A corpus of Rs. 10,000 crore could potentially be the nucleus for catalyzing Rs. 60,000 crore of equity investment and twice as much debt investment. This would provide a stable and predictable source of funding for Start up enterprises and thereby facilitate large scale job creation.

Background:

Accelerating innovation driven entrepreneurship and business creation through Start-ups is crucial for largescale employment generation. An expert committee on Venture Capital (VC) has opined that "India has the potential to build about 2500 highly scalable businesses in the next 10 years, and given the probability of entrepreneurial success that means 10000 Start ups will need to be spawned to get 2500 large scale businesses".

Start-ups face several challenges - limited availability of domestic risk capital, constraints of conventional bank finance, information asymmetry and lack of hand holding support from credible agencies. A large majority of the successful Start-ups have been funded by foreign venture funds and many of them are locating outside the country to receive such funding.

A dedicated fund for carrying out Fund of Funds operations would address these issues and enable flow of assistance to innovative Start ups through their journey to becoming full fledged business entities. This would encompass support at seed stage, early stage and growth stage. Government contribution to the target corpus of the individual Fund as an investor would encourage greater participation of private capital and thus help leverage mobilization of larger resources.

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

12.1. India's pharma industry expected to grow to US$ 55 billion by 2020

Times of India | Jul. 04, 2016

New Delhi: India's rapidly growing pharmaceutical market is expected to grow to $55 billion by 2020 and emerge as the sixth largest globally by size, said Indian ambassador to the US Arun Singh.

Formally inaugurating the 34th annual convention of the American Association of Physicians of Indian Origin (AAPI) here Friday, he outlined the rapid growth of the health sector in India, particularly in pharmaceuticals. He said that the Indian sector had a competitive edge over others because its productions costs were significantly lower than that of the US and almost half that of Europe.

"Branded generics dominate the pharmaceuticals market, constituting nearly 70 to 80 per cent of the market," Singh said. "India is the largest provider of generic drugs globally with the Indian generics accounting for 20 per cent of global exports in terms of volume."

Praising the work of Indian doctors in the US who are estimated to number about 80,000, the envoy said: "You have excelled in your fields of medicine, and thus make significant contributions through hard work, commitment and dedication to your profession and the people you are committed to serve." Speaking at a business session at the convention, New York Republican congressman Lee Zeldin, said Indian doctors are known around the world for their compassion, passion for patient care, research, and leadership. "Indian-Americans constitute about one per cent of the country's population, but you account for nine per cent of the American doctors and physicians, serving one out of seven patients being treated across the nation," Zeldin said.

He called Prime Minister Narendra Modi's address to the US Congress last month inspiring and asserted that Modi's leadership was steering the world's largest democracy to new heights.

At the inauguration, Prasad Srinivasan, a Republican Connecticut state legislator, gave the 1,500 fellow doctors at the convention tips on aspiring to public offices, saying they should work with dedication on public causes and stay focused on their mission and profession.

"We have the choice to be at the table or on the table," said Prasad, who is serving his third term as a State Representative. "Given our heritage, we the Indian Americans belong at the table. Get actively involved in the affairs of the local community and that's the path to larger role in the nation."

AAPI President Seema Jain said the profession must prepare for the challenges faced by profession on the cusp of monumental changes and her organisation was helping ready them for it.

"The Future is now," she said. "Its time to step up to a new era of innovation through a new age of digital health care that transcends biological and chemical medicine into the future. As physicians we must be equipped to tackle the next generation's unique set of challenges and opportunities in health care."

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

12.2. FDI in pharma to boost M&A deals, private equity investments: experts

Livemint | Jun. 22, 2016

New Delhi: The government’s decision to increase foreign direct investment (FDI) to 74% in existing pharmaceutical companies through the automatic route is expected to boost mergers and acquisitions (M&As) and private equity investments in the sector in future, said experts.

Allowing FDI beyond 74% will continue through the government approval route. Earlier, 100% FDI was permitted through the government approval route. The government has also allowed 100% FDI under the automatic route in greenfield pharma.

“Bringing clarity over ownership as well as removing uncertainty will definitely boost private equity investments in the pharma sector,” said Pramod Kumar, managing director of Barclays Capital India. “FIPB (Foreign Investment Promotion Board) approvals normally take a lot of time as well as companies feel the uncertainty over whether the deal will be approved or not. So, changing the FDI in brownfield to 74% will bring a lot of PE investments in pharma and healthcare sector,” Kumar said.

India’s pharmaceutical market may reach $20 billion this year and about $55 billion by 2020 from about $18 billion as of 2014, clocking a compounded annual growth rate (CAGR) of over 22%, according to a joint study by the Associated Chambers of Commerce & Industry of India (ASSOCHAM)-TechSci Research released in June.

“Keeping the cost of production low in India and with high pricing in the US, the margins Indian generic firms make are very high. Even the branded generics market in India has high margins. I believe there is a lot of synergy in cross border deals and with this FDI proposal, it will increase the number and size of deals,” said Ameera Shah, managing director and chief executive officer, Metropolis Healthcare.

The pharmaceutical sector in India will register higher growth during the course of the next five years (22%) as compared to a CAGR of about 14% clocked by the sector during 2010-14, the report said.

Export of pharmaceutical products from India is likely to exceed the $14 billion mark this year and may reach about $20 billion by 2020, registering a CAGR of about 8%, according to the ASSOCHAM-TechSci Research study.

“This is a welcome change for global pharma players looking at establishing a presence in India but not looking for a 100% stake. Some foreign investors actually prefer having local partners, and this change will facilitate those deals,” said Sameer Sah, associate partner, Khaitan & Co. “The new FDI norms are steps in the right direction. They will stimulate more M&A and investment in CRAMS (Contract Research And Manufacturing Services). We need to now streamline regulations, particularly Drug Price Control Orders (DPCO),” said Kewal Handa, industry expert and former managing director of Pfizer India.

However, there was a noticeable decline in MNC pharma companies’ interest in the Indian domestic branded generics market last year, said EY annual M&A and PE report. This was visible in restrained inbound activity (10 deals worth $1.2 billion). “This can be attributed to various factors such as the strengthening of price control mechanisms, the increasing use of compulsory licensing, and the perception of an unfavorable regime for protection of intellectual property rights in India. However, foreign MNCs are still open to deals if they offer significant synergy opportunities,” said the EY report.

Last year, US drug maker Mylan Inc. agreed to pay as much as $800 million to acquire women’s healthcare businesses from Mumbai-based Famy Care Ltd, while Recipharm AB said last October that it will acquire a majority stake in Nitin Lifesciences Ltd, an Indian sterile injectable contract manufacturer, for about $100 million.

Besides the pharmaceuticals sector, the healthcare services space also witnessed a lot of activity last year. Malaysia’s IHH Healthcare Bhd, the second-largest hospital chain in the world by market value, acquired a majority stake in Hyderabad-based Ravindranath GE Medical Associates Pvt. Ltd for $200 million in August last year. In March 2015, IHH Healthcare had bought a 51% stake in another Hyderabad-based chain, Continental Hospitals Ltd, for $45.4 million. Singapore’s state-owned investment firm Temasek Holdings Pte Ltd acquired about 18% stake in Naresh Trehan-owned multi-specialty hospital Medanta for an undisclosed amount in January last year.

The year 2015 saw 18 private equity deals worth $792 million against 18 deals worth $422 million in 2014,

according to Venture Intelligence data.

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

13.1. Boeing, Tata to establish aerospace facility near Hyderabad

BusinessLine | V Rishi Kumar | 26 Jun. 2016

Boeing and Tata Advanced Systems have laid the foundation of a new facility in Hyderabad for its joint venture TATA Boeing Aerospace Ltd (TBAL).

The joint venture has been established to co-produce Boeing AH-64 Apache helicopter fuselages and other aerostructures, as well as to pursue integrated systems in aerospace.

The Hyderabad production facility will eventually be the sole producer of AH-64 fuselages globally. The Apache has been flown or selected for acquisition by the US and 15 other nations, including India.

“The joint venture between Tata and Boeing is a significant step in developing India’s capabilities for aerospace & defence manufacturing and becoming a global exporter. This is a clear example of the significant progress made towards “Make in India for defence,” Manohar Parrikar, Defence Minister, said.

“I am delighted to see Boeing and Tata step forward and make this significant investment in India,” he said.

S. Ramadorai, Chairman of Tata Advanced Systems Ltd (TASL), said, “Today’s ground-breaking ceremony is a significant milestone in furthering our commitment to the Indian aerospace sector. With the advent of the Industrial Revolution 4.0 this partnership could boost the emerging manufacturing sector, contributing to the Prime Minister's vision of Make in India. This joint venture brings together the core strengths of both companies and helps take this strategic relationship to the next level."

“This joint venture is an exciting advancement for Boeing in leveraging our capital and expertise globally,” said Pratyush Kumar, president, Boeing India, and board member of TBAL.

In November 2015, Boeing and Tata announced a joint venture for manufacturing aero-structures and collaboration on integrated systems development opportunities in India. This joint venture will create a manufacturing centre of excellence to produce aero-structures for the AH-64 Apache and provide affordable manufacturing capabilities to the global aerospace industry.

“Today’s groundbreaking is the next step in Boeing and TASL’s journey to develop key technologies and capabilities,” said Dave Koopersmith, Boeing Vice-President, Vertical Lift, and board member of TBAL. “We will be making significant investments to ensure the success of this joint venture as we bring value to our customers globally and compete for additional manufacturing work in the global market.”

“We are proud to partner with Boeing to manufacture complex aerospace aero-structure parts out of India,”

said Sukaran Singh, MD & CEO, Tata Advanced Systems, and Board Member of TBAL.

“Tata Advanced Systems has developed expertise in manufacturing as well as in large-scale systems

integration work in the aerospace and defence sector. Our capabilities are further enhanced through

collaborations and partnerships with leading global aerospace majors. We intend to grow this unique joint

venture partnership with Boeing, focusing on opportunities to collaborate on development and life-cycle

management of integrated systems.”

Boeing and Tata group companies have established partnerships in India to manufacture aero-structures for Boeing’s commercial and military aircraft. Tata Advanced Materials has delivered composite panels for the 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 Manufacturing Solutions is manufacturing complex floor beams out of composite materials for the Boeing 787-9, the most modern aircraft with exceptional environmental and fuel-efficient capabilities. TAL Manufacturing Solutions has provided ground support equipment for the C-17 Globemaster III strategic airlifter.

13.2. Tatas to tie up with Bell Helicopter for chopper deal

Economic Times | Jun. 29, 2016

New Delhi: Looking to consolidate its position as a leader in the Indian defence aviation industry, Tata Advanced Systems is tying up with Bell Helicopter of the US to compete against the Mahindra-Airbus combination for a $2-billion naval chopper manufacturing contract.

The mega contract for 100 utility helicopters to be operated from warships will be awarded as a 'Make in India' project. Tata will form a joint venture with Bell to bid for the contract under existing foreign direct investment norms, three people with direct knowledge about the developments told ET.

Follow @ETDefence Twitter handle for comprehensive coverage on other buzzing Defence stories Tata Advanced Systems tying up with Bell Helicopter to compete for $2-billion naval chopper contract Under the route being followed to get the choppers, Indian companies will lead the procurement bids with a foreign company as a technology partner. TASL will be the lead company in partnership with Bell Helicopter, based in Fort Worth, Texas.

Competition for the new choppers is expected to play out between the Bell 429 and the Airbus AS565, one of which will be selected on technical and commercial grounds.

"The TASL tie-up with Bell Helicopter is likely to be announced formally soon. It will make the competition more or less a direct fight between Mahindra and Tata," people involved in the developments told ET. The Indian Navy is looking for a modern chopper to replace its ageing Chetak helicopters.

While the initial requirement is for 100 helicopters, the number may go up as the navy inducts newer platforms and increases the size of its fleet.

TASL is the leading military aviation player in India and has tied up for or is producing major systems for global giants including Sikorsky, Airbus, Lockheed Martin and Boeing. Earlier this month, Defence Minister Manohar Parrikar inaugurated a Boeing-Tata venture for producing the fuselage of AH 64 Apache attack helicopters in India. The joint venture was described by Parrikar as the largest foreign investment project in India in the defence sector.

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

14.1. Cabinet approves Special Package for Job Creation & Export Promotion in Textile & Apparel Sector

Press Information Bureau | Jun. 23, 2016

New Delhi: Jobs for 10 million people, mostly women; US$ 30 bn in exports; and investment worth Rs. 74,000 crores – all in three years. These are the expected outcomes of a special package for textile and apparel sector, approved today by the Union Cabinet under the Chairmanship of Prime Minister Shri Narendra Modi.

The package is a strategic decision that would strengthen and empower the Indian textile and apparel sector by improving its cost competitiveness in the global market. The measures assume significance due also to its potential for social transformation through women empowerment; since 70% of the workforce in the garment industry are women, majority of the new jobs created are likely to go to women.

What’s in the Package?

The special package includes a slew of labour-friendly measures that would promote employment generation, economies of scale and boost exports.

The salient features of the package are:

A. Employee Provident Fund Scheme Reforms

Govt. of India will bear the entire employer’s contribution of 12% under the Employers Provident Fund Scheme, for new employees of garment industry earning less than Rs. 15,000 per month, for the first three years.

This marks an increase from the present Government provision of 8.33% towards employer’s contribution, being provided under Pradhan Mantri Rozgar Protsahan Yojana (PMRPY). With today’s decision, Ministry of Textiles will provide the remaining 3.67% share towards employer’s contribution, amounting to Rs. 1,170 crores over next 3 years.

EPF will be made optional for employees earning less than Rs. 15,000 per month.

This will leave more money in the hands of the workers and also promote employment in the formal sector.

B. Increasing overtime caps

Overtime hours for workers not to exceed 8 hours per week in line with ILO norms.

This shall lead to increased earnings for the workers

C. Introduction of fixed term employment

Considering the seasonal nature of the industry, fixed term employment will be introduced for the garment sector.

A fixed term workman will be considered at par with permanent workman in terms of working hours, wages,

allowance and other statutory dues.

D. Additional incentives under ATUFS

The subsidy provided to garmenting units, under Amended-TUFS, is being increased from 15% to 25%, providing a boost to employment generation.

The package breaks new ground in moving from input-based to outcome-based incentives; a unique feature of the scheme will be to disburse subsidy only after expected jobs have been created.

E. Enhanced duty drawback coverage

In a first-of-its-kind move, a new scheme will be introduced to refund the state levies which were not refunded so far.

This move will greatly boost the competitiveness of Indian exports in foreign markets and is expected to cost

Rs 5500 crores to the exchequer.

Drawback at All Industries Rate will be given for domestic duty paid inputs even when fabrics are imported

under Advance Authorization Scheme.

F. Enhancing scope of Section 80JJAA of Income Tax Act

Looking at the seasonal nature of garment industry, the provision of 240 days under Section 80JJAA of Income Tax Act would be relaxed to 150 days for garment industry.

A summary of the expected impact of today’s Cabinet decision is given below, in quantitative terms:

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

14.2. New textile policy will boost exports, create employment: R. Verma, Textile Secretary

Economic Times | Jul. 06, 2016

New Delhi: The recently announced Rs 6,000-crore textiles package that envisages significant flexibility in labour laws is part of a larger policy for the sector which will boost exports and generate employment, says textile secretary Rashmi Verma . In an interview to ET's Arpita De, she says the ministry will seek lower excise duty on man-made fibre.

Edited excerpts:

Q- India has lost a lot of business in textiles to other developing countries such as Vietnam and Bangladesh. Can this policy help recoup some ground?

A- Absolutely. We have come up with this package keeping that in mind. We thought that if some special boost is given to the garment sector then there'll be more investment and it will also boost exports. There is a lot of potential for employment generation in this sector, especially for women. On the other hand, we will make our garments more competitive in the international market by reducing cost of production.

Q- The special package is part of the larger textile policy. Can you talk more about what we can expect from the policy?

A- We have almost finalised the new textile policy. The draft is ready and we are in the process of consulting other stakeholders, other ministries. This package is an integral part of that policy wherein we are proposing to adopt a strategy which will lead to value addition within the country.

We are producing $11billion worth of fibre but garments of only $3.6 billion. We are currently exporting lots of fibre and yarn. Through this policy we want specific interventions which will encourage value addition in the country and we should in the end become an exporter of value-added products rather than just raw material. A similar kind of package is suggested through the policy for made-ups (home textiles such as bed sheets). A number of initiatives are also being proposed to promote the technical textilesBSE 3.31 % sector.

One more step which is very necessary for promoting the textile sector is having a rationalised duty structure for man-made fibre. Currently man-made fibre is subjected to 12% duty, both excise duty and import duty, whereas for cotton there is no duty at all. It is not able to compete either in the domestic market or international market. All these big sourcing companies like Zara and Uniqlo are looking more for man-made fibre products. We are suggesting it should be brought down to 6% in the first stage; later, maybe, we should have fibre neutrality.

Q- The package proposes a set of labour reforms. Do you foresee any opposition?

A- The proposed package for the garmenting sector has support from the ministry of labour and there has been a lot of discussion on it. The package is on the lines of ILO (International Labour Organization) guidelines, so we do not expect any resistance.

Q- It will also require some legislative changes. How will you get that done?

A- Some of the measures which we are proposing in the textile policy will not require legislative changes, only some revision in the policy, in the guidelines. Some new schemes will have to be formulated. Some labour laws will have to be modified for which legislation might be required, which the ministry of labour will be taking to Parliament. Given the fact that everybody understands the importance of promoting the textile sector bringing in more employment, I am sure we will get support.

Q- Are you confident of meeting your target of attracting investments of Rs 74,000 crore in textiles in three years?

A- We are expecting that with this package there will be a boost to the investment in the garmenting sector and the industry will think it attractive enough to invest. Our calculation is that with the capital subsidy and tax

incentive which we are offering, about Rs 74,000 crore worth investment will come in the garmenting sector.

Q- Given that about 70% of the people working in the garment industry are women, will the textile policy address issues such as maternity leave?

A- Yes. In fact, we are proposing schemes. We already have a scheme for supporting working women hostels, but we are going to enhance that scheme and give greater incentive to all those units which employ about 70% women. We will be giving them more support in terms of giving subsidy for construction of working women's hostel and other kinds of facilities.

Q- What steps has the ministry taken to increase exports to markets such as South America and Russia that it plans to target?

A-In our marketing plan we have given a lot of focus to these new markets and are going to participate in fairs there and run marketing campaigns in this area. We are also looking for special agreements with countries like Russia and Brazil, so that some preferential tariff pacts can be signed. These countries have lot of potential and we have taken it up with the commerce ministry to look for some kind of treaty with these countries.

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

15.1. Xiaomi India, Foxconn in talks with state govts for new plants to increase production

Economic Times | Jul. 01, 2016

New Delhi: Xiaomi is in talks with some state governments to set up handset plants in collaboration with contract manufacturer Foxconn as the Chinese smartphone company seeks to boost production to keep pace with demand.

"We are looking to expand capacity and set up more lines and plants. We are proactively looking at it and are working with our partner Foxconn. Currently, discussions are on with different governments," Manu Jain, India head at Xiaomi, told ET. "We have also been increasing the capacity at the existing plant."

The world's third-largest smartphone maker launched its largest device, Mi Max, in India on Thursday. While the first batch of Mi Max smartphones will be imported from China, domestic production of the device will start around mid-July.

Smartphone shipments in the country have declined in the past few months, although Xiaomi said its sales have grown month over month due to its online-centric approach.

Xiaomi's global vice president Hugo Barra said the company had sold over a million units of its sub-Rs 10,000 Redmi Note 3 smartphone, which helped the company to become the second-largest smartphone brand in the online space in April, behind Samsung Electronics.

"The demand for Redmi Note 3 is higher. We brought in 6 lakh units for the first two months, which is a fairly big number. Still, we are running out of stock. We have sold more than a million Redmi Note 3 units in India," Jain said.

The company has expressed its intention of expanding into the offline retail channel over the course of a year or so. However, it will continue to focus on the online channel. "In India, we have been focused on online channel, it is so substantial and grows so fast and the demand we see is huge," Barra said, adding that the online segment is more cost efficient.

"I think consumers will increasingly move their purchases online. It has been happening in markets that are

more developed than India...I don't see a slowdown in that trend," Barra added.

Xiaomi, which recently invested in Hungama.com, is scouting for more startups to differentiate its products

from the competition in the country.

"Our strategy here in India is to make investing in companies we think can make our offering more robust. In some cases, we partner with these companies, in other cases we partner and invest. In the case of Hungama, we decided to do both. We are actively assessing investment opportunities in India. We are very much talking to everyone," Barra said, adding that Xiaomi is primarily looking at partnerships around mobile internet, which includes entertainment, information, e-commerce and local.

The company has tied up with MobiKwik for one-touch recharge and bill payments.

Xiaomi, which had applied for single-brand retail in April, is still awaiting approval for its proposal.

Asked if the company needed to refile the application after policy changes, Jain said, "We don't need to refile the application because in our earlier application we had not asked for an exemption under the 30% sourcing rule. Majority of our phones are made in India. We don't want single-brand retail licence under the 30% exemption rule." He said that the Department of Industrial Policy & Promotion had asked for multiple clarifications, which the company had provided.

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

15.2. India to become part of MTCR today

Business Standard | Jun. 27, 2016

New Delhi: India is expected to become a full member of the Missile Technology Control Regime (MTCR) on Monday. China, which along with half dozen other countries stonewalled India’s bid to become a member of the Nuclear Suppliers Group (NSG), is not a member of the bloc.

Entry to MTCR will allow India to sell the BrahMos missiles, which it manufactures jointly with Russia, to countries like Vietnam that have shown an interest in purchasing these. “We applied for the membership of MTCR last year and all the procedural formalities have been completed. [On Monday] Foreign Secretary S Jaishankar will sign the document of accession into MTCR in the presence of ambassadors of France, Netherlands and Luxembourg,” External Affairs Ministry Spokesperson Vikas Swarup said.

Apart from NSG and MTCR, India has also been trying to join export control regimes like the Australia Group and Wassenaar Arrangement. These regimes regulate trade in conventional, nuclear, biological and chemicals weapons and technologies.

The US has consistently supported India’s entry into all these groups after the India-US nuclear deal. Of the MTCR members, only Italy was opposed to India’s entry to the group.

But it dropped its objections after the two Italian marines, accused of killing two fishermen off the Kerala coast in 2012, were allowed to return to Italy from India.

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

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

16.1. Ahead of 4G launch, Reliance slashes price of LYF smartphone

Our Bureau | BusinessLine | 7 Jul. 2016

Reliance Retail has dropped price of its 4G smartphones by 25 per cent to ₹2,999 in a bid to bring cheaper devices for users ahead of the commercial launch by the group’s telecom business.

“This makes LYF India’s most affordable VoLTE (Voice over LTE) smartphone and opens the doors to a digital life for millions of consumers, a move which resonates with the Prime Minister’s vision of a digitally-connected India,” said a press statement.

VoLTE technology

There are 4G phones priced under ₹4,000 from other brands, but they do not support VoLTE – technology that allows users to get high definition quality while making voice calls.

This category of calls is limited as of now to Internet-based chat applications like Skype.

With VoLTE, telecom operators will be able to offer digital quality for voice calls; a shift from the poor quality services on 2G networks. But to access the service, users need a phone that supports VoLTE, which are currently supported only in select high-end phones.

“It is perhaps for the first time in the history of the Indian smartphone industry that such advanced communication features have moved within the reach of the common feature phone user, who has been using the phone for simple voice-based communication,” the company said.

Reliance sells smartphones under the LYF brand. The price cut has been affected on four of its Flame models – Flame 3, Flame 4, Flame 5 and Flame 6. Market watchers said this will help Reliance sell more devices in a market with a plethora of brands.

A recent IDC report had stated that LYF had become the fifth largest phone brand in India, but this data relates only to phones shipped into the country; not actual sales. According to industry experts, the price cuts could help LYF push the sales numbers too.

Like all LYF devices, the Flame series too offers smartphones equipped with VoLTE, which enables the device to provide advanced features like faster call setup, high-definition (HD) voice and video calling, seamless switching between voice and video calls, and multi-party conferencing on a 4G LTE network. All four models run on a Quad core 1.5GHz processor, have dual SIM capabilities and has an interfaces have been customised to operate on 10 different Indian languages.

16.2. Indian telecom services market to touch US$ 103.90 billion by 2020: Report

Times of India | Jun. 29, 2016

New Delhi: The Indian telecom services market is estimated to touch $103.90 billion by 2020, growing 10.3% annually from 2015 to 2020, a report by Market Research Store said.

India has recorded exponential growth in the past few years, and has emerged as a second largest market in the world, according to the report.

The increasing network coverage and decreasing of tariff rates due to heavy competition were the potential

drivers in the past few years, the firm said.

4G technology service is estimated to reach a compounded annual growth rate (CAGR) of 26.6% during the period 2015-2020, the report said, adding that the wireless services market is predicted to reach $39.02 billion by 2020 with a CAGR of 9.3%.

Telecommunications is one of the prime support services needed for rapid growth and modernisation of various sectors of the economy. Market Research Store said that the policies and regulatory frame works implemented by the regulator, Telecom Regulatory Authority of India, created a potential environment for service providers.

The Indian wireless services market is led by Bharti Airtel, followed by No. 2 Vodafone, thied ranked Idea Cellular with Reliance Communications at No. 4. State-run BSNL is also a prominent operator in the market, while Mukesh Ambani-owned Reliance Jio Infocomm is preparing to commercially start operations by this year end.

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

17.1. Want regular income? Go for post-office options

BusinessLine | Eswarkrishnan Chellam | 15 Jul. 2016

For senior citizens who can’t take risks, but need regular income, the Monthly Income Scheme (MIS) and Senior Citizens Savings Scheme (SCSS) from the post office fit the bill.

Why consider?

With the RBI cutting policy rates, banks have also been trimming their deposit rates. From around 9 per cent offered two to three years ago for fixed deposit of five-year tenure, rates offered by most banks have now dipped to between 7 and 7.5 per cent.

Rates of post-office instruments have also been falling. But they still have an edge over banks.

The MIS now offers 7.8 per cent per annum with monthly interest pay-outs, while the SCSS offers 8.6 per cent with quarterly interest paid out on the first working day of April, July, October and January.

With interest rates in the economy expected to be on a downtrend in the near to medium term, this is a good time to lock into higher rates offered by the post office instruments. Remember that rates on post-office instruments too will now be reset every quarter according to market rates. Hence, the earlier you lock in, the better.

Eligibility

The MIS is open to individuals without any age restriction. It can be opened by a single individual or jointly (up to three persons).

On the other hand, investors in SCSS must be 60 years or above. However, individuals between 55 and 60 years who have retired on superannuation or under VRS can open an account too. Two conditions apply in this case — the investment must be made within a month of receipt of retirement benefits and the amount cannot exceed that received as retirement benefits.

Prospective investors can walk into post offices with their identification and address proof, PAN card and two recent photographs for KYC requirements. Those not having PAN can submit Form 60 or 61.

Both accounts can be opened in Indian rupees, have a lock-in of five years and are not open for investment by HUFs and NRIs. The lock-in period commences from each transaction date. While any number of accounts can be opened, an upper cap on total investments remains, which is calculated by adding balances in each, including minor accounts.

The minimum amount for MIS deposit is ₹1,500. Additional deposits can be made in multiples of ₹1,500. The maximum investment limit is ₹4.5 lakh for a single account and ₹9 lakh for a joint account.

On the other hand, for SCSS, the minimum investment is lower at ₹1,000. Additional investments can be made in multiples of ₹1,000, with a cap of ₹15 lakh. Deposits below ₹1 lakh can be made in cash or cheque, but those above can be made only through cheque. Investments are eligible for deduction under Section 80C of the Income Tax Act.

For both accounts, post office savings banks need to be opened to credit interest.

Similar to most banks, the SB account offers 4 per cent interest. Minimum balance is ₹50 for those who do not want a cheque book and is ₹500 for those opting for a cheque book. An ATM card is provided, but can only be used to withdraw cash sparingly. For instance, Chennai has only five service locations where the ATM card can be used.

Tax will not be deducted at source for the MIS. But depending on their total income from various sources, investors will be liable to pay tax as per slabs applicable to them. For SCSS, TDS will be deducted if the interest income exceeds ₹10,000 per annum. If your income is below the taxable limit, you can avoid TDS by submitting Form 15H.

Liquidity and rollover
Premature withdrawal is allowed for both schemes after one year, but penalties apply. If MIS is encashed

between the first and third year, a deduction of 2 per cent is made on the deposit amount. Between the third and fifth year, the rate reduces to 1 per cent.

SCSS, if withdrawn between the first and second year, a 1.5 per cent deduction against the deposit applies.

Between the second and fifth, the penalty reduces to 1 per cent. If prematurely closed, investors may also lose their 80C tax benefit claimed earlier. After the initial five-year period, the account can be extended for another three years and closed after a year.

17.2. India's analytics industry expected to grow eight-fold to US$ 16 billion by 2025: Nasscom

IBEF | Jun. 24, 2016

Hyderabad: India's analytics industry is expected to grow eight-fold to touch US$ 16 billion by 2025 from the current US$ 2 billion, as per the National Association of Software and Services Companies (Nasscom).

Currently, India is among the top ten destinations for analytics and Nasscom expects India to be among the top three in the world by 2025 having 32 per cent share in the global market. Nasscom partners with its

members to build a multi-pronged approach that encompasses skill development, thought leadership, products and platforms to realize this vision.

There are over 600 analytical firms in India, of which approximately 400 are start-ups, which are positioning

the country as an emerging hub for analytics solutions for industries across the globe, stated Mr K S

Viswanathan, Vice President, Nasscom during the fourth edition of its 'Big Data and Analytics Summit 2016'. There are currently 90,000 analytics professionals in India working across HR, marketing, risk & security, healthcare and other sectors. Indian analytics market is expected to continue growing at 26 per cent compounded annual growth rate (CAGR) which will enable India soon emerge as a big data and analytics hub of the world.

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

18.1. GoAir doubles aircraft order, signs up for extra 72 A320neos

Business Standard | Jul. 13, 2016

Mumbai: GoAir has signed for an additional 72 Airbus A320neo aircraft, doubling its order and paving the way for future expansion.

GoAir on Tuesday signed a memorandum of understanding with Airbus for the planes, valued at $7.7 billion at the current list price. The two sides are yet to sign a purchase contract.

The deal announcement comes ahead of an Initial Public Offering of equity by the Wadia group-owned airline, which has a share of eight per cent in the country’s domestic market. According to reports, the airline would be able to raise as much as Rs 1,000 crore from sale of shares.

GoAir, which had ordered 72 Airbus A320neo planes in 2011, is now one of the three airlines that operate the new-generation aircraft that would cut down on fuel consumption. GoAir has received two A320Neo planes till now and the rest of the 2011 order will be delivered till 2020.

“The new A320neo will give us the competitive edge to achieve our growth targets and help us strengthen our presence in the wider region,” said chief executive Wolfgang Prock-Schauer.

GoAir has been among the smallest airlines in India taking a cautious approach in expansion. While its peers IndiGo and SpiceJet embarked on fleet and network expansion, GoAir added only 20 planes in a decade. But, the airline has remained profitable and industry consultancy Centre for Asia Pacific Aviation estimates GoAir to have posted a profit of $20 million in FY16.

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

18.2. Berggruen to add up to 10 Keys Hotels by 2017-end

Economic Times | Jun. 17, 2016

New Delhi: Keys Hotels, a brand of Berggruen Hotels stated it will launch three new hotels in India. The new Keys Hotels will be located in Vishakhapatnam, Calicut and Jaipur. The company stated that the property in Vishakhapatnam will be owned while the other two will be franchisee hotels.

A brand of Berggruen Hotels, Keys Hotels is funded by Berggruen Holdings, a New York-headquartered

proprietary fund.

The company said it also plans to open 8-10 new management contract hotels in the next 12-18 months by

adopting an asset light strategy.

Anshu Sarin, CEO, Berggruen Hotels said: "Keys Hotels is committed to expand its footprint across smart

cities and we will adopt assest light strategy to support this growth. We are pleased to launch three new hotels as a part of this expansion plan. Calicut, Vizag and Jaipur are very important markets for us as all three cities attracting a large volume of tourists and business travelers. Apart from these cities we are looking to be present in major smart cities and we have aligned our growth plans accordingly."

While the Keys Hotel Malabar Gate, Calicut is situated about 2 kilometers away from the Calicut beach and about 52 kilometers away from Thushagiri waterfalls, the company said Keys Hotel Vishakhapatnam is located at an optimal distance from the Visakha Museum, Submarine Museum and the Kailasa Giri. Keys Lite Om Niwas in Jaipur is located near Hawa Mahal, Jantar Mantar and Amber Fort.

Currently in its 10th year, Keys Hotels was formed in September 2006. Keys Hotels currently operate in three segments - Keys Prima, Keys Hotels and Keys Lite.

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

19.1. Cisco readies plan to set up manufacturing plant in India

Livemint | Jul.14, 2016

New Delhi: Las Vegas: Technology major Cisco Systems Inc. is working on a plan to establish a manufacturing facility in India and is in talks with the government for the same, a top official of the company has said.

Terming India as one of its “best bases”, Cisco chief executive Chuck Robbins said the company is “very actively involved in India across the board” and working on a broader base from digitisation to smart cities in the country.

He was interacting with reporters at the Cisco Live 2016 annual conference.

On expansion plans in India, Robbins said, “Prime Minister Narendra Modi is very committed to manufacturing. We worked through a business case and... presented to him that... That was fantastic and we have been moving forward.”

He added that the company is moving forward on various healthcare and security initiatives, with a lot happening on the digital cities front. Cisco is engaged in over 15 smart city projects in the country. The company is also working with the Andhra Pradesh government for rolling out Bharat Net. The company

views India as one of the best bases and is focusing a lot on education as well, Robbins added.

India is home to Cisco’s second-largest site, which has about 11,000 employees. It is offering education to

24,000 students spread across 47 schools.

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

19.2. India manages one-third of Cisco's US$ 36 billion product revenue

Economic Times | Jul. 06, 2016

Bengaluru: Cisco launched its globalization centre east in Bengaluru in 2007, a centre that it calls its second headquarters and which was established to develop new IT solutions for emerging markets and the world in general. In an interaction with TOI, Amit Phadnis, president engineering and India site leader of Cisco, talks about the progress the centre has made.

Excerpts:

Give us an idea of the extent of innovation happening out of Cisco's R&D centre in Bengaluru.

We make switching products, next generation wireless products and also storage spaces that are competitive globally. One of the advantages is, we are able to develop these products at a competitive price. We have developed 10 products from India since 2010 and have another 10-15 products in the pipeline that are completely engineered out of the country. Each of these globally has at least a $100 million annual run rate.

We are roughly a third of Cisco's engineering worldwide. Out of Cisco's total product revenue of $36 billion,

$13 billion comes from products developed and managed out of India, the largest any company drives out of

the country (products managed are those that may have been developed elsewhere, but are now completely

handled, including development of upgrades, by the India team.

How is Cisco's involvement with the smart cities programme in India going?

We have done deployments in Navi Mumbai and Jaipur. The Jaipur Development Authority will set up a digital infrastructure provided by us to offer citizens amenities including connected transport, interactive kiosks, wireless broadband, safety and security services, traffic management and environmental updates. It will install an urban platform of sensors which allows for the sharing of information.

In Navi Mumbai, such an application is used to create public security and safety infrastructure. Running on a Cisco network, this solution provides live camera updates and alerts so that security breaches are not missed due to human error or oversight.

How big is the R&D team in Bengaluru now?

There are 7,000 engineers in the R&D facility, which is the biggest outside our San Jose (US) facility. San Jose has about 12,000-13,000 engineers. The way we are growing, we may cross them some day. Moreover, 10% of Cisco's patents are filed out of India. Out of the 1,000 filed, 600 have been issued. It is literally 2 patents filed per week from here now.

What is the charter ahead for the engineering team?

The charter is to take more complex responsibilities for product development. If you look at some of the products, we are pushing the envelope at what is possible in technology today. To create a larger ecosystem, we are getting the engineering team closer to the field engineers and sales teams, who really work with customers to understand their problems.

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

20.1. 6 Indian drug makers sign licensing deals for HIV, hepatitis C treatments

Livemint | Jul. 08, 2016

Hyderabad: A United Nations backed public health organisation on Thursday said it has signed a licencing agreement with six Indian drug makers to sell generic antiretrovirals (ARV) and the hepatitis C drug Daclatasvir in low and middle-income countries.

The Medicines Patent Pool (MPP) named the Indian manufacturers as: Aurobindo Pharma Ltd, Emcure Pharmaceuticals Ltd, Hetero Labs Ltd, Laurus Labs Ltd, Lupin Ltd and Zydus Cadila or Cadila Healthcare Ltd. Anti-retroviral drugs are used in the treatment of patients with human immunodeficiency virus (HIV) infection, while Daclatasvir, in combination with sofosbuvir, is an effective treatment for patients with hepatitis-C.

MPP is a UN-backed public health organisation that works towards increasing access to drugs for HIV, hepatitis C and tuberculosis by negotiating for public-health driven licences with patent holders. Patent holders are compensated by royalties, saving millions of dollars for donors and developing country governments. “These new sub-licences will secure greater volumes of low-cost medicines for people living with HIV and hepatitis C in low- and middle-income countries,” said Greg Perry, MPP’s executive director. “We look forward to working with the companies to speed delivery of these treatments to those most in need of better medical options.”

MPP’s long-time generic partner Hyderabad-based Aurobindo Pharma signed two sub-licences. The first allows the company to produce combination ARV drug lopinavir and ritonavir for Africa, following MPP’s agreement with US-based AbbVie Inc. in December 2015.

Aurobindo also joins six other companies in the development of Bristol-Myers Squibb Co.(BMS)’s Daclatasvir, the first hepatitis C medicine in MPP’s portfolio. Aurobindo sold ARV drugs worth of Rs.1200 crore or 11% of its total generic sales of Rs.11,166 crore in the year ended March, largely through participating in contracts brokered by multilateral agencies.

Pune-based Emcure said it has signed licences for lopinavir and ritonavir.

“LPV/r is a life-line for people living with HIV on the continent who have developed resistance to first-line treatments, additional, long-term supply is crucial,” said Vikas Thapar, head of corporate development and strategy of Emcure.

Hetero, an MPP generic partner since 2012, signed sub-licences for atazanavir, an important second-line antiretroviral licensed to the MPP by BMS in December 2013 and Raltegravir for paediatric use, a treatment MPP licensed from MSD (Merck & Co. in the United States and Canada) in February 2015.

Raltegravir was recently recommended by the UN World Health Organization as part of second-line treatment for children less than 10 years of age. Laurus and Lupin added to their portfolio of MPP-licensed drugs with agreements to produce Daclatasvir and paediatric Raltegravir, respectively.

Ahmedabad-based Zydus Cadila, joined MPP network for the first time to supply Daclatasvir. The MPP’s 13 generic manufacturing partners are currently working on more than 60 projects to develop crucial treatments for both children and adults in developing countries.

There are 37 million people eligible to receive HIV treatment, according to WHO. But only 15 million have access, and majority of them are living in low and middle-income countries. Moreover, of the 3.3 million children living with HIV today, only 32% receive antiretroviral therapy.

Hepatitis C is a major public health threat affecting up to 150 million people globally, with the vast majority living in low- and middle-income countries.

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

20.2. Biocon, Quark get DCGI nod for trials on new eye drug

BusinessLine | 23 Jun. 2016

Biopharmaceutical firm Biocon and its partner Quark Pharmaceuticals have received approval from the Drug Controller General of India (DCGI) to proceed with clinical trials on humans for a new drug that is aimed at treating nerve damages in the eyes.

This trial will be for the global Phase II or III study of QPI-1007, a novel siRNA (small interfering RNA) drug candidate used to treat ocular neuro protection, medical terminology for nerve damages in the eyes, which results in blindness.

siRNA-based therapy involves suppressing specific disease-related genes, an area which the scientific community considers as a breakthrough in biology in this decade.

Further, the study will determine the effect of QPI-1007 on visual function in subjects with acute Non- arteritic Ischemic Optic Neuropathy (NAION), which is a rare eye disorder that is caused due to loss of blood flow to the optic nerve. This is part of a global Phase II and III studies run by Quark with Neuro-Ophthalmology Research Disease Investigator Consortium (NORDIC).

Biocon Chairperson and Managing Director Kiran Mazumdar-Shaw said: “This is an unmet medical need and the initiation of the Phase II or III study investigating QPI-1007 in NAION in India is an important step towards this goal. Biocon and Quark Pharma had entered into an agreement, in 2013, to co-develop, manufacture and commercialise QPI-1007 in India and other key markets”.

To put it in perspective, India has a significant NAION patient population and a siRNA-based therapy can benefit thousands of patients who either have no access to treatment or cannot afford it, she added. Industry watchers pointed out that there have been many clinical trials that have been conducted to study more than a dozen therapies but none have convincingly improved the visual outcome in patients with NAION. “Some studies have investigated the use of corticosteroids which have resulted in a mild improvement, but these studies did not use rigorous scientific methods and it remains unknown if steroids are actually helpful,” said an eye doctor from a leading hospital chain.

INDIA & THE WORLD

21.1. India and Kenya enter into tax, defence agreements

Livemint | Jul. 12, 2016

New Delhi: India and Kenya on Monday signed seven agreements, including one on the avoidance of double taxation and another to boost defence cooperation, during Prime Minister Narendra Modi’s two-day visit to the African nation.

Modi also announced the extension of a concessional line of credit of $44.95 million to the east African nation to help it in developing small and medium enterprises (SMEs) and textiles.

In the area of healthcare, India said it would build a cancer hospital in Kenya to provide quality and affordable health care.

“The multifaceted development partnership is a key pillar of our bilateral relationship,” Modi said at a joint

press meet in Nairobi after talks with Kenyan president Uhuru Kenyatta.

The pact on defence cooperation entails exchange of security personnel, sharing of expertise, training, cooperation in hydrography and the supply of equipment, a Press Trust of India report said.

According to Modi, the two countries have shared interests in maritime security since they are connected by the Indian Ocean. “Closer cooperation in the field of maritime security occupies an important place in our defence and security engagement,” Modi said.

Modi, who arrived in Nairobi late Sunday on the last leg of his four-nation Africa tour, is on a five-day visit to the continent.

He had met Kenyatta during the latter’s visit to New Delhi for the third India-Africa Summit.

In his comments to reporters, Modi said he and Kenyatta had “agreed that terrorism and radicalization is a

common challenge” for India and Kenya as well as the world. “We have agreed to deepen our security

partnership, including in fields of cybersecurity, combating drugs, narcotics and human trafficking,” Modi said.

The Prime Minister also said India is ready to share its experiences and expertise in development to strengthen Kenya’s development objectives. “Our development priorities are more or less aligned. As a true and trusted partner, India is ready to share its development experiences and expertise, and concessional credit and capacities to assist in Kenya’s development objectives,” he said.

The Prime Minister said he and Kenyatta agreed both economies can benefit more “if we nurture greater

intensity of commercial links; take steps towards a more diversified trade basket; and expand our investment

ties further”.

This, he said, would also enable greater regional economic prosperity. “In this, while governments would play their part, it is businesses of the two countries that have a key role and responsibility to drive our commercial partnership,” he said.

Bilateral trade crossed $4 billion in 2014-15. Indian entities with a presence in Kenya include Tata Chemicals Ltd following the acquisition of Magadi Soda Co. Ltd in 2005, Essar Energy, Bharti Airtel Ltd, Reliance Industries Ltd, Karuturi Ltd, Kalpataru Power Transmission Ltd, Power Grid Corp. of India Ltd, Kirloskar Brothers Ltd and Mahindra and Mahindra Ltd, according to the external affairs ministry website.

Later, in a speech at the University of Kenya in Nairobi, Modi urged Kenyan youth to condemn terrorism as well as those who practice it. “Indeed, we live in a world where preachers of hate and violence are threatening the fabric of our society,” Modi said.

“As young dynamic citizens of Kenya and as members of the African society, you would need to be watchful of those who spread radical ideologies.

“And, be equally condemning of those who give shelter to terrorists and use them as political instruments,” Modi said, adding, “youth can also play an important role in building a counter narrative to extremist ideologies.”

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

21.2. Suriname plans furniture design corridor in Hyderabad for exports to LatAm

BusinessLine | 15 Jul. 2016

The Republic of Suriname will be setting up an exclusive furniture design corridor in Hyderabad to export furniture to Latin American countries.

The furniture design corridor, second in India to be set up after a similar on in Kolar, will be up and running in the next six months and the Latin American country is working along with the National Institute of Design, Government of India for collaboration, Asif lqbal, Honorary Consul of Republic of Suriname (for AP, TS and Karnataka) told newspersons here on Friday.

He was addressing a press conference to announce the opening of a honorary consulate office of Suriname in Hyderabad.

Explaining the rationale behind locating the design centre in Hyderabad, he said the South American country was home to 36 rare varieties of timber including beach timber which is collected from under the sea.

“The local teak is so expensive that it makes a business proposition to design and manufacture furniture here with Suriname timber and export it,’’ he said.

While local teak costs ₹2,800 per cubic feet, the imported Suriname teak will cost ₹700 only, he claimed. The proposed corridor will have about 170 craftsmen to begin with, he added.

The furniture corridor, which is being set up in Kolar, will be ready in the next three months. “In addition, we

are also planning a food processing corridor in Kurnool in Andhra Pradesh,’’ Iqbal added.

Suriname is also interested in forging collaboration with infrastructural companies and film-makers, among

others, he added.

22. Apollo, Chinese company to set up hospital in Hainan

Our Bureau | BusinessLine | 20 Jun. 2016

Apollo Hospitals Group and Hainan Ecological Smart City Group (HESCG), a Chinese industrial park development & operations company from the Hainan province of China have signed an MoU to jointly develop a highly integrated modern health care service facility and systems in the Hainan province.

The agreement was signed today by Sangita Reddy, Joint Managing Director, Apollo Hospitals and Yang Chunzhi, Managing Director, HESCG in the presence of KT Rama Rao, Minister for IT & Urban Development, Telangana. A ‘Smart City’ is being developed in the Hainan Province, which is one of China’s largest Special Economic Zones.

Liu Cigui, Governor of the Hainan Province, and Prathap C Reddy, founder Chairman, Apollo Hospitals Group, also participated in the event. The “Smart City” on the island of Hainan, will have residential infrastructure for community living and the proposed hospital with medical, nursing and paramedical colleges would cater to not only the people of the Hainan province but also attract medical tourists from mainland China and other nations.

The collaboration will lead to the development of advanced healthcare IT systems and telemedicine solutions. The MoU is also aimed at expanding to other parts of China and into India with suitable model of collaboration, a press release said.

HESCG will provide land, all the investments for the construction, commissioning and equipping the hospital besides all operative expenses, while Apollo Hospitals Group would provide its services for technical consulting, planning and commissioning of the hospital.

23. Nirma cements US$ 1.4-bn Lafarge India buyout

Business Standard | Jul. 12, 2016

Mumbai: Nirma, the Ahmedabad-based detergent and soap maker, on Monday announced its acquisition of Lafarge India’s 11-million-tonne (mt) cement business for $1.4 billion (about Rs 9,478 crore), including debt. The valuation is around $127 per tonne, lesser than the $151 per tonne valuation Lafarge commanded in its aborted deal with Birla Corp last year and marginally higher than what UltraTech Cement paid to acquire Jaiprakash Associates’ assets last week.

The company, set up by Karsanbhai Khodidas Patel (71), emerged the most aggressive bidder, leaving Ajay Piramal’s Piramal Enterprises and Sajjan Jindal’s JSW Cement far behind, bankers said. Nirma already has a 2.28-mt capacity cement plant in Rajasthan that it commissioned in November 2014 after investing Rs 1,300 crore.

“The Patels of Nirma were aggressive to get into a market that is set for growth over the long term,” said a banker familiar with the development.

In a statement, Nirma said it will fund the deal through equal proportion of equity and target-level financing. The proposed deal was in line with the group’s strategy to pursue organic and inorganic business expansion to develop strong operations across diversified business verticals. “The proposed transaction is effectively an extension of the ‘market and product expansion’ strategy,” Nirma said.

“This acquisition is a transformational step for the group’s cement business. With a strong platform like Lafarge’s India business, we plan to take the cement business to the next level,” said Hiren Patel, managing director, Nirma.

According to investment bankers, Nirma will sell bonds worth about Rs 4,000 crore ($596 million) to fund the acquisition. It reported a consolidated net income of Rs 760 crore for the year ended March 2016 and net sales of Rs 7,240 crore, according to ratings agency CRISIL.

“With the entry of new players in the eastern market in the last couple of years, the supply will affect pricing power in the near term. In that context, Nirma has valued the Lafarge deal a little on the higher side,” said Ravi Sodah, cement analyst at Elara Securities. Shree Cement and JK Lakshmi Cement have added around six mt in the eastern market in the past few years.

Besides its recent foray in cement, Nirma has a presence in soaps and detergents, salt, soda ash, caustic soda, linear alkyl benzene and other chemicals.

With this acquisition, Nirma said it would be among India’s top 10 cement players with a footprint in eastern, northern and western India and a combined capacity of 13 mt.

This is Lafarge’s second attempt at selling its Indian assets so that it can complete its global merger with Swiss cement giant Holcim, which was announced in April 2014. This would create the world’s largest cement company. The deal had raised eyebrows of anti-trust watchdogs in several countries, including India.

“With the proposed buyer we have found the right partner who will be able to develop the business further in

the interest of all our stakeholders,” said Eric Olsen, chief executive officer, LafargeHolcim. Arpwood Capital and Citigroup advised LafargeHolcim on the sale.

In India, Holcim units, Ambuja Cements and ACC have 60 mt of annual capacity. Lafarge, on the other hand, has 11 mt capacity in India, of which 7.8 mt (70 per cent) is in Chhattisgarh, Jharkhand and West Bengal. Holcim’s ACC and Ambuja have capacities of 6.1 mt and 4.6 mt, respectively, in the same region. Hence, the Competition Commission of India (CCI) asked Lafarge India to sell its 5.15-mt capacity in eastern India by December 31, 2015 to complete the merger.

In August 2015, the company signed an agreement with Birla Corporation to sell the asset for Rs 5,000 crore. However, the deal got into trouble as a change in regulations prohibited transfer of mining rights in case of an asset sale. Later, Lafarge submitted a revised proposal to CCI to sell its entire India business.

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

24.1. ISRO successfully launches 20 satellites from Sriharikota

Livemint | Jun. 22, 2016

New Delhi: The Indian Space Research Organisation on Wednesday successfully launched 20 satellites and injected them into the required orbit, launching the maximum number of satellites in a single mission ever. The launch took place aboard the Polar Satellite Launch Vehicle (PSLV-C32) at 9:26am at the Satish Dhawan Space Centre in Sriharikota.

The primary payload was a 727kg Cartostat-2 series satellite, which will be used for earth observation; 19

other satellites together weigh about 560kg. The Cartostat satellite, which is equipped with specialised

cameras, was injected into the nearly 505-km polar Sun Synchronous Orbit and will provide regular remote

sensing services. The images sent by the satellite could be used for urban and rural applications, coastal land use, road network monitoring, land use maps and several geographical information system applications.

The co-passenger satellites include 12 Dove satellites from the US, a small earth imaging satellite designed by Terra Bella, a Google company, two from Canada, one each from Germany and Indonesia, as well as two from Indian universities.

The two Indian nano satellites, called Swayam and Satyabamasat, were developed by students from College of Engineering, Pune, and Sathyabama University, Chennai, respectively. While Swayam has a payload mass of 1kg, Sathyabamasat has a payload mass of 1.5kg.

“Today the PSLV has accomplished yet another mission and launched 20 satellites. It is forging closer to the ultimate reliability figure, PSLV has become a success for India and we are hoping to continue providing

world-class launch services to the world,” said P. Kunhikrishnan, director of the Satish Dhawan Space Centre. This launch also marks 130 satellites launched by the PSLV. The national space agency is preparing for the developmental flight of the Geosynchronous Satellite Launch Vehicle, GSLV Mark III, a series of earth observation satellites, and the testing of an air breathing propulsion system.

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

24.2. Even NASA wants to work with us, which it wouldn't have before

Business Standard | Jun. 28, 2016

Bengaluru: Indian Space Research Organisation (Isro) has shown noteworthy results in launching rockets

and satellites to space on a shoestring budget. A S Kiran Kumar, the chairman, talks of what’s on and what lies ahead, in an interview to Alnoor Peermohamed & Raghu Krishnan.

Edited excerpts:

Where is Isro today? What are the plans in the coming decade?

We have focused on communication, navigation and earth observation capabilities in satellites. In all these areas, we’re limited by our capacity to realise and launch. Today, we have 35 satellites. If you see in terms of requirements, maybe I should have double this number operating at any given point of time, to meet our requirements. We have to build capacity and are increasing the number of launches of the Polar Satellite Launch Vehicle (PSLV). We started with once in a few years, then a couple in a year. Till recently, we were 2-2.5 per year but we’ve already tried to make it sic-seven a year in terms of PSLV.

But, then, this increase cannot happen on its own. We need a supply chain capacity and the industry is trying to build more. We have to give emphasis and make sure that industry capacity grows and our own capacity, the number of launches, grows. In the Geosynchronous Satellite Launch Vehicle (GSLV), we had issues; we have overcome that. We’ve launched two GSLV Mk-II and are planning that every two years, we will launch a Mark II. Then, Mark III this December and the next December we intend to complete that. In PSLV, while we are using it for our own capacity, whatever is left, we’re augmenting and providing solutions for others. So, it has become a vehicle that is sought after when it comes to that.

So, while we are enabling and enhancing the capacity for our own use, we also have an opportunity to make it commercial. Towards that, we are discussing with industry on how to form a consortium or a mechanism where our capacity for launching can go up to maybe 12-18 a year. One is a consolidation phase and the other is capacity building to meet the growing demand.In this, where are we compared to global agencies?

As things progress and there is more demand, you need to ensure something else. If you look at the cost of access to space, a lot of private entities are getting into this space, whether in America or Europe. When they start operating, they will be looking at how the cost can be brought down. So, these are also challenges to agencies like ours. All government agencies have to start looking at these scenarios.

A large number of smaller satellites are coming out. They require launch opportunities which others have not been able to provide and we have been able to. You need to leverage that but also ensure you continue to improve your ability to provide solutions at a contemporary and competitive price. That is where our reusable launch vehicle (RLV) comes into the picture.

We also have our own science missions. You need to make sure for the capacity you are building, that you keep challenging them to do more and more difficult activities. So that their ability to visualise and find

solutions to even our regular activities also gets continued.

In this, where are we compared to global agencies?

As things progress and there is more demand, you need to ensure — today for example if you look at the cost of access to space, there are a lot of private entities that are getting into this space, whether it is in America or Europe. When they start operating, they will be looking at how the cost can be brought down. So now, these are also challenges to agencies like ours. Now they have to look at how they can survive in this environment, if you come and tell I will do in $2 million what they’re doing in $10 million, after a couple of times, the government will ask why should I do it from your side? So all the government agencies also have to start looking at these scenarios which are happening.

A large number of smaller satellites are coming out, and they also require launch opportunities which others

have not been able to provide and we have been able to provide. So you need to leverage that. But then you

also need to make sure that you continue to improve your ability to provide solutions at a contemporary and

competitive price. So that is where the reusable launch vehicle (RLV) type of things come into the picture

where you need to ensure that the cost of access to space comes down, so that you are able to be

competitive in the coming days.

In addition to this, we also have our own science missions. You need to do these activities from another point of view as well — you need to make sure of the capacity you are building in the country, unless you keep challenging them to do more and more difficult activities, their ability to visualise and find solutions to even our regular activities also gets continued.

You must have heard that you need to keep running to remain at the same place also, which means you have challenging assignments also.

Is this helping Isro get more collaborations?

As you keep improving your capabilities, others in the play want to come and join or leverage the international relationship so that cost of doing things for the global community also comes down. See, after we did our radar imaging satellite, Mars mission, the Chandrayaan mission, even NASA (the US space agency) is ready to work with us for a mission. So, we’re doing a NISAR mission in 2021. A few years before, they would not be willing to even consider any mission discussion with us. We've shown we’re in a position to work with global agencies, for bringing in solutions that are relevant to global activities. We have to ensure we are able to continuously build capacity, in the required numbers.

Where are we compared to SpaceX and all these companies?

There still is a shortage in capacity globally. It need not continue that way. This is where if cost of access is brought down significantly, they will also end up with a situation where if they’re able to meet all the demands, scale it up accordingly, they will capture that market.

If you are able to build on top of what we’ve built, PSLV commercialisation and all that, make it more and more attractive, there is a possibility that Indian industry can also gain in this global opportunity. That’s where we’re now trying to formulate -- we’re looking at the possibility of 2020, whether that Indian industry plus Isro, whether they can launch the first (space) vehicle in 2020. Beyond that, they can not only provide satellite launches for us; they can also market outside.

This collaboration with the private sector — the consortium will be a separate entity?

Those details we are trying to work out. Should it be a private company with a joint venture, say 51:49 or

50:50, like the Brahmos model, and other things.

Finally, we want in-the-country capacity, which can also help that entity market outside. Again, these are

certain areas we still have to go through, whether there are any regulatory mechanisms because of launcher has multiple uses, what kind of protection has to be built. We have Godrej, we have L&T, we have HAL...many of the companies are already doing (work) for us. Now, they also want to know what kind of numbers are there. We're saying this is what is there; if you have the ability to market more, you can get more.

We already have Google talking about satellite-based internet services. Where are we as a country in providing such services?

Right now, OneWeb and all these guys are talking about building 900 satellites and launching it in the next

three-four years to bring such a thing. This is a global service, you can say, which they will provide and we

don’t have to compete with them.

We are still prioritising our capabilities for major requirements., whether for weather monitoring or earth

observation. We also have a large number of applications which are growing massively. We have this

programme called a space-based information system for decentralised planning, where the idea is to reach

out to individual village panchayats and enabling them to plan activities and making them aware.

For example, we’re working on how to use India’s postmen to build a database. Like, if these postmen can

monitor crops in the region and feed it into the database. Today, you have a national crop forecasting centre in Delhi and that provides a forecast before harvesting that utilises satellite imagery. We have identified 6-8,000 locations to do in situ observation. There are 150,000 post offices in India; even if one postman provides for a single location, that itself becomes a large number.

So we’re able to bring in communication, navigation, earth observation and then bring in ground-based crowd sourcing and linkages to do a huge number of applications.

You’ve spoken a lot about crowd sourcing, but there has been a lot of outrage about the Geospatial Bill.

There has been a lot of misinformation on that and we have also commented on it. What should be happening is, you should not be restricting the use of data for generating information. There are certain kinds of restrictions which you want to put. Talk about that and even there, put those data which you have to supply in a certain form, which will go through a vetting process. Otherwise what restriction you want to put, you cannot put it generally. If you take a picture and that becomes a restriction, you cannot do that.

In people’s minds, Google Maps are more well known than Bhuvan (Isro's geo-portal). Why is that?

That is going to be there. If you see the number of people Google will be employing and the kind of activities

they will be doing, it is very different from what we’re doing. Finally, it is a commercial entity; their interest is

going to be to keep you hooked, it is a business. And, the number of people they will get to use will be huge,

so the things they can do are different. But, with the information we’ve been able to collect over many years

and the number of layers we’ve been able to build with Bhuvan, its use for specific activities is much more.

Obviously, the dissemination and making it known has its own timeline but now, with the kind of emphasis the governments are putting on usage, they are also realising that if they put something on Google, what is their security?

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

25. USFDA nods to Indian drugs up 84% in 1 year

Economic Times | Jun. 28, 2016

Mumbai: Drug approvals given by the US Food and Drug Administration (USFDA) to Indian companies nearly doubled year-on-year, with littleknown firms including MSN Lab, Shasun Pharma, Granules India, Ajanta Pharma and Gland Pharma making a foray into the world's biggest and most lucrative market. Interestingly, the growth came during the period when biggies like Sun Pharma and Dr Reddy's had reduced filings from their plants due to compliance issues, dispelling the long-held view that regulatory agencies, particularly USFDA, harboured a vendetta against the domestic industry.

Over the last couple of years, companies have faced intense regulatory glare from the US, with nearly all the top pharma players having been issued warning letters over manufacturing violations at their plants. This led some to believe that they were being singled out for action -most of this was triggered after the erstwhile

Ranbaxy (now part of Sun Pharma) faced regulatory woes.

Companies which have USFDA-approved plants apply for regulatory clearance for launching generic drugs in the US market. Overall approvals increased from 109 in FY2014-15 to 201 for the period April to March 2016 -up by 84%, an analysis of USFDA approvals showed. Aurobindo, Lupin and Glenmark led with 50, 27 and 18 approvals respectively in FY 2015-16, as against Sun Pharma (14), Lupin (10) and Jubilant, Hetero Labs and Macleods at 8 each in the previous year. The list showed that certain companies were first-timers (in terms of approvals), while many were of specialised treatments.

India accounts for around 30% (by volume) and about 10% (value) in the $70-80 billion US generics market. Over the years, India has become a dominant player in the US generics space with a large number of plants and increased scale of operations, exporting key drugs and injectables from the country . Industry experts say with the growing level of exports (to US) of generic drugs in recent years, the number of USFDA inspections of manufacturing plants has also risen. The number of Indian companies supplying to the US market have jumped by nearly three times now, as against only a handful five years back.

"The increase in number of approvals is partly due to GDUFA (Generic Drug User Fee Act) under which the

FDA had agreed to expedite the processing of ANDAs, and partly due to the importance of drugs and

inadequate compe tition," D G Shah, secretary general of Indian Pharmaceutical Alliance, said. ANDAs refer to abbreviated new drug applications.

The GDUFA helped the USFDA to clear almost 90% of the approvals backlog. Some of the high-value

approvals that Indian firms received were reportedly for generic versions of Otsuka's Abilify (aripiprazole) used for treating schizophrenia; Vigamox (moxifloxacin), a conjunctivitis drug made by Novartis company Alcon; Zetia (ezetimibe), a drug prescribed for treating hypertension made by MSD; and anti-cancer drug Gleevec (imatinib) made by Novartis.

Glenmark Pharmaceuticals CMD Glenn Saldanha said, "During the financial year 2015-16, we received a

significant number of approvals from USFDA. The company received a total of 24 approvals (including

tentative nods), which is the highest ever for the company . Because of this, our US business has gained good traction in FY2015-16."

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

* * *

AAPI

Pages

Wednesday 20 July 2016

NEWSLETTER, 20-VII-2016

– GENERAL POLICY, INFRASTRUCTURES, COUNTRY FINANCES, ETC.

– AGRICULTURE, FISHING and RURAL DEVELOPMENT

– INDUSTRY, MANUFACTURE

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

NEWSLETTER, 20-VII-2016

– GENERAL POLICY, INFRASTRUCTURES, COUNTRY FINANCES, ETC.

– AGRICULTURE, FISHING & RURAL DEVELOPMENT

– INDUSTRY, MANUFACTURE

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

INDIA & THE WORLD