US updates jet-engine technology transfer policy with India

December 14, 2015

In a sign of increasing trustworthiness, the has updated its policy on gas-turbine engine technology transfer to to expand cooperation in production and design of sensitive jet engine components.

US Defence Secretary Ashton Carter informed Indian Defence Minister of the decision during the latter’s visit here.

As a result of this policy update, Carter exuded confidence that the US will be able to expand cooperation in production and design of sensitive jet engine components.

Carter and Parrikar look forward to US companies working with their Indian counterparts to submit transfer requests that will benefit from this updated policy, said a joint statement issued after a meeting between two leaders at the Pentagon yesterday.

During the meeting, the two leaders discussed ways and means to move the ambitious Defence Technology and Trade Initiative (DTTI) forward.

Expressing satisfaction with DTTI progress to date, the two committed themselves to identifying additional projects for possible co-development and co-production of high technology items that meet the transformational intent of DTTI, the joint statement said.

Parrikar and Carter commended positive discussions at the Joint Working Group on Aircraft Carrier Technology Cooperation (JWGACTC), especially in the area of Aircraft Launch and Recovery Equipment (ALRE), and look forward to continued progress to be achieved at the second meeting of the JWGACTC in February 2016 in India.

They further expressed satisfaction that the Jet Engine Technology Joint Working Group (JETJWG), which met this week in Bengaluru, had concluded its ‘Terms of Reference’ and had productive discussion on cooperation in this area.

In an interaction with the media, Carter identified DTTI as one very important step in realising the potential of the India-US defence partnership.

DTTI, he noted, fosters technology cooperation, works to build industry-to-industry ties, and identifies opportunities for the co-development and co-production of defence systems.

Carter said he and Parrikar discussed the progress that has been made towards cooperation on jet engines, and aircraft carrier design and construction, as well as opportunities to collaborate on additional projects of interest, which will also further Prime Minister Modi’s Make in India policy.

Parrikar said their desire is to further collaborate in the higher-end technologies within the framework of DTTI.

“The assurance I have, and I am confident of that India is placed at a level which would ensure that red tapism is cut. I think this is the biggest take home one can get. We have got a very clear promise and we have been experiencing it that our issues are fast tracked,” he told reporters.

Source : Business Standard



India ready to impose more curbs on steel imports

December 14, 2015

is readying to impose more curbs on imports, including introducing a safeguard duty, after a 20 % import tax failed to contain losses for producers such as Steel Authority of India.

SAIL, and Steel have complained that surging from Indonesia, China, Japan, Russia, Ukraine and South Korea were squeezing their market share and profit margins.

In October, steelmakers asked the government to impose a safeguard for four years on imports of hot rolled flat sheets and plates of alloy or non-alloy steel, and set a minimum import price, to contain cheaper steel imports.

The Directorate General of Safeguards, a branch of the finance ministry that can impose temporary import curbs, said on Tuesday that it found prima facie evidence that increases in imports “have caused or threatening to cause serious injury to the domestic producers”.

In a statement on its website, the directorate said it has asked foreign companies and other stake holders to submit their views within 30 days before taking a decision.

Indian companies, struggling to compete due to high borrowing and raw materials costs, have in recent months successfully lobbied to get duties on some products and quality checks strengthened.

In September, India imposed the 20 % import tax on some steel products as the government initiated an investigation into rising imports from China, Japan, South Korea and Russia.

Government sources said the steel ministry has also supported local manufacturers’ demand to impose a minimum floor price for steel imports to curb cheaper imports.

Imports of iron and steel declined slightly to $6.9 billion during the April-October period in the current financial year 2015/16 from $7.1 billion a year ago, Commerce and Industry Ministry data show.

The government has asked the industry to submit figures on the cost of production so that it could consider a floor price for imports, said one official, with knowledge of policy decisions.

Source: Business Standard

China, India find gem in turbulent global diamond industry

December 14, 2015

China and India were the bright spots for global diamond industry in a turbulent 2015, amidst flat global retail sales, plunging revenue of diamond producers, and margin pressure faced by diamond polishers.

According to The Global Diamond Industry 2015: Growth perspectives amid short-term challenge, an annual report by Bain & Company, and Antwerp World Diamond Centre, the global diamond industry is expected to recover its mojo within the next two years, riding on growing demand for diamond jewellery from United States, China and India. “The long-term outlook for the diamond market remains positive, with demand expected to outpace supply starting in 2019,” the report said.

Olya Linde, lead author of the global diamond industry report and a Bain partner, noted that during the economic turmoil of 2001 and 2009 prices took 18 to 24 months to recover. “This time the market has the potential to recover within just one to two years,” she added.

Analysing the current turbulence in the industry the report said the mild decline in consumer demand for diamond jewellery began in 2014 in Greater China. This led to a notable drop in demand for polished and rough diamonds in 2015. This forced retailers to trim orders for polished diamonds, creating an inventory backlog in the cutting and polishing segment, the report said. “As a result, prices for polished and rough diamonds plunged 12 per cent and 23 per cent, respectively, since May 2014 and 8 per cent and 15 per cent, respectively, for the first nine months of 2015,” the report noted.

Global retail sales of diamond jewellery grew in 2014 and in the first half of 2015 by four to eight per cent, with the US as the main growth engine. Retail sales in China grew six per cent in 2014, coupled with strong growth in diamond jewellery sales in India, the report said. However, the existing state of turbulence in the industry would continue in 2015 with diamond producers and mid-segment companies expected to experience a 10-20 per cent decrease in revenue with near flat diamond jewellery sales, the report added.

The report said that demand in Chinese market is likely stay flat in 2016 before an anticipated recovery in 2017. This is expected to lead to 4-5.5 per cent annual growth in demand through 2030. The report forecasts that demand for rough-diamond demand will grow at an annual rate of about three to four per cent over the next 15 years.


  • India and China gained market share in value terms in cutting and polishing business, accounting for around 85% of the global market
  • India cuts and polishes more than 40% of the world’s diamonds larger than one carat, with quality standards comparable to those of developed markets
  • India is transitioning from an emerging diamond market to a more mature one
  • High-end stones that were largely polished in Belgium, Israel and the US are steadily migrating to India
  • The growth of middle-class households in China and India fuels diamond jewellery market growth
  • Increasing urbanisation, middle-class expansion and engagement ring penetration are expected to boost diamond demand by eight to nine per cent per year in mid-term in India

Source: Business Standard

DHL to invest $16.3 million and introduce drones in India

December 14, 2015

Global logistics provider DHL is planning to invest about $16.3 million in all its business segments in India and introduce new technologies, including drones, for deliveries and managing logistics, a senior company executive said today.

“We are investing in all divisions in India,” said Matthias Heutger, senior vice president for strategy marketing and development.

Speaking at the launch of DHL Asia Pacific Innovation Centre here, he said the group will be introducing new technologies including drones for deliveries and managing logistics in the Indian market in the future.

“The use of drones in the delivering and managing logistics is becoming increasingly important globally, especially in the remote and disaster hit areas,” he told PTI.

DHL has already invested Euro 100 million ($109 million) for transportation, warehousing, information technology network and manpower training over the last three years.

It also plans to include a new Free Trade Warehousing Zone (FTWZ) in North India next year and participate in the rail-based transportation.

DHL is expected to invest between Euro 5 million (USD 5.4 million) and Euro 15 million (USD 16.3 million) in the zone, which will be its third in India. As part of the elaborate investment plan, state-of-the-art warehouses will be set up near high demand growth regions such as Navi Mumbai, Ahmedabad, Calcutta, Ambala and Kochi. A new airport is expected to come in Mumbai.

Long haul trucks are being used on the North-South Indian corridor for speedy delivery on long routes. Owing to such expansion, the company’s growth in India has outpaced the overall sectoral growth in the country, the company said.

The Indian logistics industry is annually growing at 10-11 per cent while DHL is growing its supply chain business between 25-30 per cent, it said.

“With our emerging markets expected to generate 30 per cent of DHL global revenue by 2020, our sustained industry leadership demands that we successfully differentiate our services in these markets through well-calculated forays into new technologies, processes and products,” said Bill Meahl, Chief Commercial Officers.

The launch of the centre in Singapore is a natural step to maintain our lead as a frontrunner in innovation, following the success of our first centre in Germany, he said.

The centre will drive DHL’s “trend research” initiative focusing on emerging trends in Asian logistics and economic activity, he added.

Source: Economic Times

Goldman Expects India’s GDP to Grow at 7.9% Next Fiscal

December 14, 2015

The country’s Gross Domestic Product (GDP) is expected to grow by 7.9 per cent next financial year on the back of rising domestic demand and higher capital spending by the government, even though global economy will remain anaemic, Goldman Sachs said today (December 09, 2015).

India is already the fastest-growing large economy and will remain so in FY17. We have positive views on the economy. The cyclical upturn will continue to be driven by the domestic demand.

The investment demand will improve gradually, driven by greater government spending on infrastructure — particularly railways and highways, lower interest rates, rising foreign direct investments (FDI) inflows and ongoing improvements in ease of doing business, including some improvement in stalled projects.

Moreover, the economic activity can be boosted by both monetary and fiscal policy being looser next year

The economy should also reap the benefits of the 125-basis point reduction in interest rates by the Reserve Bank of India and the continued weakness in commodity prices.

Higher productivity growth from improvements in technology, education and the ease of doing business (TEEs) can boost potential growth to 8 per cent from FY17 through FY20.

However, on the inflation side, headline inflation will inch up to 5.3 per cent in FY17 against the projected 4.9 per cent in FY16, driven by an uptick in both core and food inflation.

The inflation trajectory would be influenced by the effects of El Nino, which could add about 35 basis points to headline inflation and by a narrowing of the output gap.

The RBI has retained the option of cutting rates again, the bar for another rate cut is not very high and expects the RBI to remain on hold through 2016.


Here is why gold may glitter again in India

December 7, 2015
While equity markets are watching every move of the government with an electron microscope in search of reform measures, there is a lot of activity going on in the commodity space, especially the gold market.


After a series of gold schemes launched by the Prime Minister about a month ago, there are now talks of having a gold exchange in the country. The earlier schemes were meant to utilise the gold hoarded in households and trusts and at the same time encourage the use of gold in electronic form rather than physical form as a means of saving instrument.


A gold exchange will take the same idea two steps forward. First, it will ensure a fair and transparent rate between suppliers and consumer. Second, it will be the first point of sourcing rather than looking for imports as is the practice in the current scenario.


India is not the first country toying with the idea of a gold exchange; Turkey and China have done it earlier. The impact of how gold exchange has helped transform the gold market in these countries will help us understand the possible impact in India.


Turkey is the fourth largest consumer of gold in the world. Like Indians, Turks love for gold is legendary. The country imports nearly 181 tonnes of gold every year accounting for nearly 6% of global consumer demand. World Gold Council (WGC) estimates that 3,500 tonne of ‘under the pillow’ gold has been accumulated by Turks over the years.


A WGC report says that gold plays an important role in weddings and other aspects of religious life. In the jewellery fabrication industry, it is a medium of exchange and a unit of account: in the Grand Bazaar – the heart of Turkey’s gold market – rents are often priced in gold. There are even gold-dispensing ATMs on the streets of Istanbul.


Unlike India, Turkey has an active gold mining industry. Gold production has increased in almost every year since 2001, growing from 2 tonnes to nearly 33.5 tonnes presently. Turkey’s Ministry of Energy & Natural Resources estimate gold reserves to be 840 tonnes, while resources could be as high as 6,500 tonnes. In comparison, India barely produces 1.5 tonne of gold with consumption of upward of 800 tonne.


Istanbul Gold Exchange in Turkey has helped improve gold infrastructure significantly there. Gold is a thriving industry in Turkey with gold fabrication, consumption and recycling adding nearly $4 billion to Turkey’s economy. The value chain supports 5,000 gold fabricators, 35,000 retail outlets and employs about 250,000 people.


Turkey’s gold reserve stands at nearly 500 tonnes roughly at the same level as India. A large part of this goes to government’s effort in managing to put the ‘under the pillow’ to use. About 250 tonnes of gold has been put into constructive use following government schemes, which are similar to those launched in India recently.


The country’s commercial banks introduced gold-related banking products in 2012 in an attempt to draw gold stored in Turkish consumer’s hands into the banking system. Of the 250 tonne, nearly 210 are from saving instrument like gold bond which would have otherwise gone into hoarding of gold and the remaining is from personal savings that have been put to use.


As for China, which is the top consumer of gold in the world, transformation of the gold industry took place only after monopoly of People’s Bank of China (PBoC) was lifted and Shanghai Gold Exchange was set up in 2002. Since then, China’s share of global private sector demand of gold has been increasing from less than seven per cent to over 25%.


Gold exchanges have played an important part in the development in both Turkey and China. With renewed interest by the government in this sector, the same can hold true for India markets, the second largest consumer of gold in the world.
Source: Business Standard

Foreign Investment Up 13% to $16.63 Billion in the First Half of FY16

December 5, 2015

Foreign direct investment (FDI) in the country grew by 13 per cent to $16.63 billion during the April-September period of the current fiscal.

The foreign investment was $14.69 billion during April-September 2014, according to the latest figures of the Department of Industrial Policy and Promotion (DIPP).

During the first half of the financial year, India received maximum FDI of $6.69 billion from Singapore followed by Mauritius ($3.66 billion), the Netherlands ($1.09 billion) and Japan ($815 million).

Sectors which attracted highest foreign investment in the period includes computer software and hardware ($3.05 billion), trading ($2.30 billion), services and automobile ($1.46 billion each) and telecommunications ($659 million).

During financial year 2014-15, foreign fund inflows grew at 27 per cent to $30.93 billion as against $24.29 billion in 2013-14.

The government has relaxed FDI norms in as many as 15 sectors including defence, single brand retail, construction development, civil aviation and LLPs to boost FDI in the country.

Foreign investments are considered crucial for India, which needs around $1 trillion in the next five years to overhaul its infrastructure sector such as ports, airports and highways to boost growth.

Growth in foreign investments helps improve the country’s balance of payments (BoP) situation and strengthen the rupee.

Source: NDTV Profit

India plans $1bn private equity fund for solar and renewables

December 5, 2015

Government aims to raise that investment goal to around $4 billion per year within 3-4 years and will identify opportunities to source low-cost foreign investment, said energy minister Piyush Goyal.

Indian solar installation.

India’s target of 100 GW of solar PV capacity by 2022 will only be feasible with sustained, and overseas, investment into the sector.

The Indian government is planning a $1 billion private equity fund for the development of its renewable energy sector, according to a series of revealing tweets sent by Piyush Goyal, India’s Power and New and Renewable Energy Minister, on Friday.

Goyal said that the initial fund will be seeded by government-backed companies, but that it will seek to “collect $4 billion/year in 3-4 years” and hopes to secure low-cost overseas debt from foreign companies eager to invest in India’s clean energy transition.

The country’s New and Renewable Energy Secretary Upendra Tripathi had earlier this year confirmed that the Ministry for New and Renewable Energy (MNRE) is intent on securing some $2 billion in funding from the Asian Development Bank and World Bank for financing of its clean energy projects.

A deal was since signed between the World Bank’s International Finance Corporation (IFC) and IREDA for infrastructure financing for India’s renewable energy projects. The aim, according to Goyal, is to ramp up renewable energy five-fold, with a 2022 generation target of 175,000 MWh of clean energy, with solar power prominent.

The minister’s call has already been heeded by IDBI Bank, which this week became India’s first state-backed commercial lender to attract large-scale foreign investment. The bank issued $350 million in green bonds, which are certificates used in India to show that any funds raised will be steered into environmental projects, to global investors, attracting orders of around $1 billion.

India has adopted an increasingly confident stance in the fight against climate change in recent months, with Prime Minister Narendra Modi using day one of the COP21 UN Climate Change Summit in Paris to co-launch the International Solar Alliance alongside France while reiterating his country’s pledge to install 100 GW of solar PV capacity by 2022.

India is – after China and the U.S. – the third-largest emitter of greenhouse gases in the world, but as the economy grows Modi is eager to adopt greater levels of renewable energy to ensure its emissions do not rise to the levels seen in China and North America. And as solar costs continue to fall, the PM sees PV as the perfect avenue for India’s clean energy transition.

Source: PV Magazine

Singapore, US & China lead inbound traveller interest in India in 2015: TripAdvisor

December 5, 2015

Singapore, the United States and China lead inbound traveller interest in India in 2015, says a study by user review and hotel meta-search website TripAdvisor.

International traveller interest in India is on the rise, signaling good news for the country’s tourism industry.

A recent study by TripAdvisor reveals that travellers from Singapore, the United States and China show the largest increase in interest year-over-year in Indian destinations on the site. The study also highlights review trends from visiting markets on Indian hospitality businesses.

Rising interest across Asia indicates positive growth in inbound tourism to India, with Asian countries accounting for six of the top 10 markets showing an increase in the share of visitor sessions looking at Indian destinations. However, what’s significant to note is the increase in interest from long-haul markets including the United States (13%) and the Caribbean (4%), signaling healthy inbound travel trends for India.

“We’re seeing growth in interest not just from Asian countries but also from long haul inbound markets with domestic travel being as strong as ever,” Nikhil Ganju, country manager, TripAdvisor India said in a press statement.

Singapore tops the list with 24%year-on-year growth in interest for Indian destinations and hospitality businesses, highlighting a key market that Indian business owners should keep in mind in developing their marketing strategies for 2016.

With the country’s strong domestic travel market, Indians make up the largest proportion of travellers looking at Indian destinations. In fact, 76% of the total sessions from India on TripAdvisor in the past year are directed towards Indian destinations or hotels. After India, Middle Eastern markets dominate the global list for highest percentage of total search traffic directed towards India.

The study further indicated that travellers from Israel and Russia write the most positive reviews about their travel experiences in India, giving average review ratings of 4.39 and 4.34 (out of five) respectively for Indian hotels.

“Not only are more travellers interested in India, but they are also writing more reviews for the places they stay, eat and visit during their trips – and generally, the reviews are positive, which is an indication of the rising standards of the Indian hospitality industry. These findings paint a positive picture for the Indian tourism industry and provide the foundation for a strong marketing strategy for local hospitality businesses,” Ganju added.

Over the past year, Brazilians have also topped the list for the largest increase in the amount of reviews they have contributed to TripAdvisor about India, growing by 13% year over year, followed by Spaniards (8%) and Australians (2%).

Source:Economic Times

Indian middle-class is looking for premium brands

December 4, 2015
German Engineering Federation (VDMA) in India strengthens Indo-German economic relations in different engineering sectors. It promotes the activities of VDMA member companies in India. Among its various activities, it maintains close relations with the Indian industry, Indo-German companies, embassy and consulates and various Indian industry associations, particularly CII, FICCI, EEPC, ASSOCHAM, FIEO, CAPEXIL, ICC, and IGCC. Its activities has led to closer co-operation between specialised associations within VDMA and the equivalent Indian associations. The office also offers assistance to individual member companies in identifying potential partners in India. In an email interaction with Anurag More, Rajesh Nath, VDMA India, spoke about the packaged food industry in India, emerging trends and more. Excerpts:

How has the packaged food industry in India evolved over the years? How much is the market? At what rate is the industry growing?
Accounting for about 32 per cent of the country’s total food market, the food processing industry is one of the largest industries in India and is ranked fifth in terms of production, consumption, export and expected growth. The packaged food industry is the fifth-largest sector in India. Packaged foods continued to enjoy strong double-digit value and volume growth in 2014. This growth was driven by urbanisation, the increasingly hectic pace of modern life and rising annual disposable incomes – all of which led consumers to shift towards convenient and easy-to-eat packaged foods.

The Indian packaged food industry is worth US$39.7 billion and owing to the rise in income, changing urban lifestyle and modern retail trade, it is expected to reach US$65.41 billion by 2020. With a per capita consumption of 24 kg per year, the Indian packaged food market is still at an early stage.

Which are the major food products or sub-sectors in food that drive food packaging industry?
The main categories of packaged food are bakery products, canned processed food, frozen processed food, meal replacement products and condiments. Some emerging new categories in this segment are processed dairy products, frozen ready-to-eat foods, diet snacks, processed meat and probiotic drinks.

What are the technological advancements happening in food packaging industry?
Be it the production of confectionery or cookies, sandwiches, bread and other baked products, meat and meat products, beverages, dairy products, or other convenience products, the processing stages in the production and filling of food and drinks are diverse and distinct worldwide.

Rigid and flexible are the two most significant types of packaging in use today. Rigid packaging dominates with about 80 per cent market share. However, there is a shift in demand and flexible packaging demand is increasing. Key advantages of flexible packaging over rigid include lightweight, small pack size, and energy savings, ease of storage and transportation and convenient disposal.

The flexible packaging industry is estimated to be valued at US$900 million, growing at about 20 per cent annually. Plastics, paper and metals are the key materials used in flexible packaging products, which are made from foil or papersheet or laminated paper and plastic layers. Food and fast moving consumer goods (FMCG) industries are the largest consumers of flexible packaging products; food accounts for 38 per cent of flexible packaging market.

Moreover, spouted standup bag is a smart innovation for packaging liquids of all kinds. After pouring, the caps can be tightened to keep the product safe. For sauces etc. stand up pouches can be fitted with pour spouts and easy screw-on caps.

VDMA and 14 of its member companies is organising a symposium on “German Technology for Confectionery Production and Packaging” in Mumbai in December 2015. Some 14 German companies would be presenting to the Indian food packaging industry, the latest technological trends.

What are the trends you have witnessed in the industry?
The Indian middle-class is growing rapidly and they simply love to buy. They are on the lookout for premium brands, especially for confectionery products like chocolate. But the premiumisation trend is not only noticeable in chocolates but also in biscuits. These trends are expected to continue even years from now.

Rural India provides growth opportunities for packaged food and beverages. Almost 70 per cent of the Indian population lives in rural regions. The rural population benefits from investment in infrastructure and rising wages. Food processing companies are realising the potential of rural India and are trying to expand their presence in these areas. They are launching their products in smaller pack sizes and at low price points to attract consumers. As India’s soft drinks market is slowly reaching maturity in urban India, rural India is the new target for most of the manufacturers of soft drinks.

What are the various innovation you foresee for the food packaging industry?
For raw and processed foods, India needs packaging material which is suitable to the country’s climatic variations.

The country’s heat and high humidity are two problems that can reduce the shelf life of packaged goods. It would be particularly important to focus on the seals and maintaining their integrity. But more important than the climate is perhaps the lack of a good supply chain or refrigeration in retail outlets and at home. This is a big barrier to many of the packaged food formats familiar to consumers in the West. At the same time, a heavy focus on cost means that cheaper flexible packaging formats are often chosen over rigid packs that may offer greater protection for the product but that would force a higher retail price.

How is the industry coping with challenges like shortage of skilled labour and food safety concerns?
Shortage of skilled labour and food safety concerns are the key challenges for food processing industry and this is encouraging food processors to invest in automation. Many conventional processes for making Indian ethnic snacks are being converted to automated lines. Many companies, both Indian and foreign, are planning big investments in the food processing segment.

What kind of changes do you expect in the regulations by the government?
The Indian food processing industry is regulated by several laws which govern the aspects of sanitation, licensing and other necessary permits that are required to startup and run a food business. The legislation that dealt with food safety in India was the Prevention of Food Adulteration Act, 1954 (“PFA”). The PFA had been in place for over five decades and there was a need for change due to varied reasons which include the changing requirements of our food industry. The Act brought into force in place of the PFA is the Food Safety and Standards Act, 2006 (“FSSA”) that overrides all other food related laws.

FSSA initiates harmonisation of India’s food regulations as per international standards. It establishes a new national regulatory body, the Food Safety and Standards Authority of India (“FSSAI”), to develop science-based standards for food and to regulate and monitor the manufacture, processing, storage, distribution, sale and import of food so as to ensure the availability of safe and wholesome food for human consumption. All food imports is therefore subject to the provisions of the FSSA.

In the Union budget 2014-15, provision for tax incentive is provided for new units in the business of processing, preservation and packaging of fruits or vegetables, meat and meat products, poultry, marine or dairy products and is available at the rate of 100 per cent tax exemption for the first five years of operations. After five years, the rate is 25 per cent of the profits. Thus inviting investors to invest in the Indian food processing and packaging industry under the campaign “Make in India.”