Archive for May, 2015

Educate in India: Narendra Modi government to tout India as Asia’s education hub

May 29, 2015

The Narendra Modi government has dusted off its predecessor UPA’s plan to allow foreign universities to set up campuses in India, seemingly reversing the ruling BJP’s earlier stance on the Foreign Educational Institutions Bill. The government is keen to revive this bill, which allows foreign universities to set up campuses in India.

In a strategy paper shared with the ministries of external affairs and human resource development, and NITI Aayog last month, the commerce ministry argued in favour of “internationalisation” of Indian education to earn more foreign exchange and create an ‘Educated in India’ brand.

Educate in India: Narendra Modi government to tout India as Asia’s education hub

The resurrection of the bill, which lapsed with the end of the 15th Lok Sabha, is one of the four action points cited by the ministry. When the UPA had introduced it, the legislation was bitterly opposed by the Opposition parties, including the BJP, Left and Samajwadi Party.

“There is a huge opportunity for foreign institutions to set up campuses in India. Foreign universities along with good quality Indian institutions will attract students and promote India as a hub in Asia for higher education and thus increase India’s export of education services,” says the proposal, a copy of which was seen by ET.

The strategy paper was shared as a “follow-up” to a meeting held at the commerce ministry on January 12. “Global trade in higher education is a growing sector. We have a number of strengths including cost advantage and good number of English speaking professionals. Our geographical location makes India a viable destination for Asian students,” said a government official familiar with the discussions. There is at present no legal and regulatory framework to allow foreign universities to set up campuses in India.

The commerce ministry wants the department of higher education under the HRD ministry to ensure “early passage” of the bill, albeit with a few changes. “The thrust of the present bill (UPA bill) appears to be regulation of malpractices rather than encouraging foreign universities,” the proposal says.

Source: Economic Times


Nissan crosses five lakh milestone in cumulative export from India

May 29, 2015

Buoyed by crossing of five lakh cumulative car export milestone from India, Japan’s auto major Nissan is looking to enhance its status as one of the country’s top automobiles exporters.

Nissan Motor India, the company’s subsidiary here, which exported 1.2 lakh units last fiscal is looking to at least maintain the same number this year as the European and the Middle-East markets remained a concern.

“When we started operations in India eight years back we looked at the possibility of not only addressing domestic requirements but also for exports, as we needed to achieve economy of scale. Today we have justified that strategy,” Nissan India Operations President Guillaume Sicard told PTI.

Nissan began exporting from India five years ago and it at present ships to over 106 countries. Korean auto major Hyundai is the largest car exporter from India.

Commenting on the road ahead, he said: “Today we are the second-largest car exporter from India, our model Micra is the most exported model from India and we look to enhance our position. We are always looking for new customers globally.”

When asked about this year’s targets, Sicard said: “We are looking to maintain last year’s export numbers, if not more. If we are able to do more would depend on how the European and the Middle-East markets recover.”

“While exports help us in optimal utilisation of our manufacturing capacity, it also helps showcase world-class Indian production quality on the global stage and expand the scope for widening export base for India-built cars,” he added.

The Renault-Nissan Alliance has invested Rs 4,500 crore at the Chennai plant, which has a capacity to roll out 4.8 lakh vehicles annually.

“Currently, we are exporting 60 per cent of our volumes and 40 per cent is sold in the domestic market but it will soon become 50:50,” Sicard said.

Nissan has been exporting vehicles to various regions including Europe, Middle-East, Latin America, Australia, New Zealand, Asia and Africa.

According to the company, while premium hatchback Micra constitutes 73 per cent of exports from India, mid-sized Sunny and entry-level car Datsun Go are the other two export models from Nissan portfolio.

The company started exporting Datsun GO in 2014 to South Africa and Nepal.

Source: Economic Times

Vodafone seen reviving India IPO plan, $4 billion float likely

May 29, 2015

Is British telecom giant Vodafone Plc reviving its plan to list its India subsidiary in a blockbuster public float?

While the company has officially maintained that no decision has yet been taken on the long-planned initial public offer (IPO), investment banking sources have indicated that Vodafone is examining the proposal for a  $3-4 billion float by fourth quarter (January to March) of 2015-16.

At about Rs 25,000 crore, this could well turn out to be the largest ever IPO in India’s capital market history, surpassing state-owned behemoth Coal India Limited’s (CIL’s) Rs 16,000 crore float in 2010.

Responding to a query from HT, Vodafone Group Plc did not offer any comments about the developments. “No comments,” said Ben Padovan Group Head of Media External Affairs Vodafone Group Services Ltd over phone from the UK.

Padovan also did not comment on the speculation that the telecom giant has engaged investment banking major NM Rothschild to carry out pre-IPO due diligence ahead of a formal launch of the listing process.

Vodafone’s decision to invest in India despite a protracted tax dispute is likely to come as a major vote of confidence for the government, amid a brewing uncertainty over demands on foreign portfolio investors (FPIs) to pay minimum alternate tax (MAT) dues over past years.
Vodafone India operates as a 100% subsidiary of its British parent after the company last year bought out the minority stake held by Indian partners.

In 2013, India lifted the foreign direct investment (FDI) cap allowing overseas investors in the telecom sector to 100% from 74% earlier.
Vodafone entered India in May 2007, when it bought 67% of Hutchison Essar for $11.1 billion (about Rs 43,000 crore then) from Hong Kong-based Hutchison Whampoa’s Indian arm.

It is fighting a tax dispute of Rs 20,000 crore  for this transaction after the government changed laws in 2012 to imposed tax on a retrospective basis on older corporate deals such as Vodafone’s acquisition of Hutchison’s mobile assets in India.

Industry sources said Vodafone could be valued at $30 billion (about Rs 1,90,000) crore.

At Rs 1.9 lakh crore, Vodafone India would be ranked the fifth most valuable company in  the Indian market in terms of market capitalisation, behind Mukesh Ambani-led Reliance Industries Ltd  (Rs 2.89 lakh crore), ONGC (Rs 2.81 lakh crore), Sun Pharma (Rs 2.41 lakh crore) and government-owned Coal India Ltd (Rs 2.33 lakh crore).

It could also be ahead of sector leader Bharti Airtel, which currently has a market capitalisation of about Rs 1.6 lakh crore.

Source: Hindustan Times

PM’s letter to the people on Economic Issues

May 27, 2015

Reproduced below is the full text of the Hon’ble Prime Minister’s letter to the people on Economic Issues:

“My dear fellow citizens,

One year ago, you had entrusted me with the task of building a new India and putting a derailed economy back on track. We have achieved a lot. Economic growth has been revived, and is amongst the fastest in the world. Inflation is substantially down. Fiscal prudence has been restored. Confidence is up. Foreign investments have increased. This positive outlook is endorsed by major rating agencies and international institutions across the world.

Bold reforms pending for decades have been implemented. Diesel prices have been decontrolled. The Goods and Services Tax (GST) is slated to be introduced next year. By facilitating companies to Make in India through a focus on Ease of Doing Business, new jobs are being created. Cooking gas subsidies are being paid directly to beneficiary bank accounts under PAHAL – ensuring the right amount of subsidy, reaches the right people, at the right time. FDI limits in insurance, railways and defence production have been raised. Moreover, we have embraced the states as equal partners in national development, working as Team India in the spirit of cooperative and competitive federalism.

Political interference in public sector banking decisions is a thing of the past. Transparent coal auctions and allotments have mobilized potential revenues of Rs. 3.35 lakh crores to coal-bearing states over the lifespan of mines. And reform in the Mines Act has replaced a discretionary mechanism with a transparent auction process. To combat black money, a Special Investigation Team has been appointed and a new stringent law passed.

Nearly Rs. 1 lakh crores of public investment have been allocated in this year’s budget to improve physical as well as digital connectivity. A comprehensive transformation of the railways into a locomotive of growth has begun. Stalled highway projects are being restructured and revived. Power generation is at an all-time high. A new National Infrastructure Investment Fund has been set up with an annual government funding of Rs. 20,000 crores.

Economic growth benefits all Indians. Growth however, has meaning only if it empowers the poor, farmers, women, as well as middle and neo-middle classes of all communities. To enable us to continue paying remunerative prices to our farmers, we secured a permanent ‘peace clause’ at the WTO. The world’s largest financial inclusion project has brought banking to the doorsteps of the poor, opening a record 15 crore plus bank accounts with deposits of over Rs. 15,800 crores. An affordable social security system including pension, life insurance and accident insurance, has already witnessed 6.75 crore enrolments in its first week. MUDRA has been set up with a corpus of Rs. 20,000 crores to help our small businessmen, who despite being our biggest job creators have historically been starved of credit.

A lot has been achieved. However, this is just the beginning. There is much more to be done and I know your expectations are high. A year ago I gave you my word that while I might perhaps commit errors, I would always act with pure intentions and spend every available moment working for a better India. I have kept my word. I seek your continued support, suggestions and blessings in building the India of our dreams.

Always in your service.

Jai Hind!

Narendra Modi ”

Opportunities abundant for SMEs in Make in India

May 26, 2015

Small and medium-scale enterprises in the manufacturing sector have huge opportunities to tap through the “Make in India” initiative, Jagat Shah, founder and chief mentor of Cluster Pulse, said here on Friday.

He was here to speak at a meeting organised at the Indian Chamber of Commerce and Industry, Coimbatore, as part of the Mentor on Road programme.

Mr. Shah is visiting 35 cities in the country as part of the programme and Coimbatore is the 17{+t}{+h}city. Making a presentation on “International Market Access and Innovative Opportunities to Make in India”, he said that with 65 per cent of the country’s population aged below 35, job opportunities need to be created for the youth. Large companies in the manufacturing sector usually bring in automation.

It is the small and medium-scale enterprises that generate jobs. The ‘Make in India’ project involves attracting investments from foreign companies to manufacture here and also to give a boost to the local SMEs. “Make is India is about manufacturing and SMEs,” he said.

In countries such as China and Indonesia, the contribution of manufacturing sector to the GDP is high compared to India. And, in India, just eight States contribute to 70 per cent of the country’s manufacturing. There should be equitable spread of manufacturing activity. ‘Make in India’ focuses on about 180 products that are completely imported.

These include telecom, power, and defence equipment and portable digital computers.

The proposal is to start making at least 30 of these products in the country in one year.

The technology for many of these might be with overseas companies.

 Source: The Hindu

Indian Software Market Logs Highest 8.3% Growth Among BRICS: Gartner

May 26, 2015

India’s software market registered the highest growth rate of 8.3 per cent in terms of total revenues among BRICS nations in 2014, market research firm Gartner said on Friday.

The revenue of Indian software market was at $4 billion in 2014 against that of $3.7 billion in 2013.

The software market in Brazil grew by 5.4 per cent, in South Africa by 4.8 per cent and in China by 3.8 per cent.

In Russia, the market however shrunk by 6.4 per cent.

The growth in Indian market was led by Microsoft with 25 per cent market share and revenue of $1,017.9 million.

Oracle and IBM followed Microsoft with 13 per cent and 12 per cent market share.

Oracle’s revenue was at $516.7 million, while IBM’s at $475.3 million in 2014.

SAP’s market share stood at 8 per cent with revenue of $317.4 million and VMware at 3 per cent at $105.3 million.

CA Technologies, Adobe, SAS, HP accounted for 1 per cent market share each, Gartner said.

While the top five vendors registered increase in their revenue, CA Technology’s business declined by 7 per cent at revenue of $50.9 million in 2014 compared to $54.7 million in 2013. Adobe’s revenue in India dipped by 35 per cent to $27.5 million from $38.4 million, during the period under review.

Revenue of HP also declined by 14 per cent to $33 million in 2014 from $38.4 million in 2013.

“Improvement in global economic conditions has somewhat relaxed the strain on the Indian economy, thereby boosting corporate sentiments. Along with a new stable government at the centre, this has helped in alleviating concerns about economic growth,” Gartner Research director Bhavish Sood said in a statement.

Gartner observed adoption and development of Software as a service, open-source software adoption and changing buying behaviour and purchasing styles associated with the digital business as common trend between India and global market.

Source: NDTV Profit

21st-23rd May’15; Smart Cities India 2015: Matchmaking Event

May 26, 2015

IMG_20150521_160200756 IMG_20150521_160404612 21st-23rd May; Smart Cities India: Matchmaking Event

12th May’15; Rail Delegation from Czech Republic

May 26, 2015

12th May'15, Rail Delegation from Czech Republic IMG_20150512_172357564_HDR IMG_20150512_174445706_HDR IMG_20150512_175738509

The jigsaw that is India’s economy, by Kalpana Morparia

May 25, 2015

We tend to have short memories in India, often overly influenced by the immediacy of recent events. Even as there are some murmurs of reforms currently being too slow, we tend to forget the bigger picture. Just two years ago, India was the poster child of emerging market vulnerability—the current deficit had ballooned, inflation was rampant, fiscal concerns remained and ratings agencies had begun to make threatening noises. Against this backdrop, the rupee was the worst-performing currency through much of 2013.

Now, the tables have turned. India is the poster child in the emerging market universe. Foreign investors cannot get enough of the economy. We saw $50 billion of portfolio inflows through the last fiscal year. Equity inflows remain solid, and there is a strong appetite among debt investors to hold more government bonds. With these limits full, investors have flocked to the corporate bond market.

So what has changed? Almost everything. The government has worked hard to reduce the fiscal deficit. This has reduced external imbalances. Furthermore, a new monetary policy regime and critical supply side reforms—coupled with the fiscal consolidation—have meant that inflation has declined faster than expected, allowing the Reserve Bank of India (RBI) to ease monetary policy. The government and the RBI have struck a landmark agreement to ensure that inflation remains contained over the medium term. This has meant that India’s two recent challenges—high fiscal deficits and inflation—have been met with institutionalised responses, which should be positive news for long-term foreign investors.

There is also the sharp fall in crude and commodity prices, which impart a large positive terms-of-trade shock to India; the nation has become the epitome of macroeconomic stability. Put differently, India is seen as being very well prepared to withstanding global shocks, whether a Fed lift-off or a China slowing, on the back of policy credibility and an ever-growing stockpile of FX (foreign exchange) reserves to create a bulletproof balance sheet.

This is impressive, but what about the growth and reforms that equity market valuations are pricing in? Here it is important to stay focussed on the bigger picture. The debate between big-bang reforms and incremental but persistent reforms is a long-standing one. Suffice to say, in vibrant democracies like India, politically sensitive big-bang reforms only work during crises. Outside crisis periods, sustained ‘incrementalism’ has a better chance of success. This is in part because reforms involve winners and losers. Typically, losses are concentrated while benefits are dispersed. So the losers tend to be better organised. The larger the adjustment costs that losers have to incur from reforms, the more the typical resistance to lobby for the status quo. So big-bang reforms tend to be opposed vehemently, whereas incremental but sustained reforms often have the best chance of success.

Take diesel prices versus suburban rail tariffs and foreign direct investment (FDI) in multi-brand retail as examples. Diesel prices went up by 50 paisa a month for 20 consecutive months, reducing the under-recovery by Rs 10 a litre. What used to be considered a sensitive issue became business-as-usual, and allowed the government to liberalise prices when there was a correction in oil prices. By moving in imperceptibly small steps, the sting was taken out of the reform. Compare this to the big-bang announcement of increasing suburban rail fares by 100-200 percent in one go or going in for FDI in multi-brand retail. They served as a rallying point for vested interests, and forced policymakers to withdraw.


Image: Getty Images
The Pradhan Mantri Jan-Dhan Yojana has empowered the poor and brought them into the formal banking network

The prime minister’s focus on financial inclusion through the Pradhan Mantri Jan-Dhan Yojana is a game changer on both, the growth and fiscal dimensions. Apart from empowering the poor and bringing them into the formal banking network, it creates the infrastructure to deliver subsidies exclusively through cash subsidies, and thereby reduce leakages.

In addition, there has been a focus on resolving implementation bottlenecks and improving the ease of doing business.

Evidence that this is working is now beginning to show with stalled projects reducing for a second successive quarter. This has been complemented by reforms on the coal and mining front, and the landmark move towards transparent auctions for the allocation of natural resources. Furthermore, directing coal auction revenues to states was a deft move, ensuring that states now have a big stake in the game.

Finally, the budget imparted a large thrust to both institutions and public investment. A world-class bankruptcy code is imperative, and a National Infrastructure Fund is welcome, apart from the fact that there appears to be a clear thrust to increase capex (capital expenditure) spending on the budget. Finally, the FDI in Insurance Bill was lying in cold storage for many years. The fact that it got passed within a year of the new government’s formation reveals its ability to create consensus on non-controversial legislation.

However, there is still much to do. The government’s effort to reform land acquisition appears very sensible. Tax reform must also remain a key priority, both by pushing ahead with a goods and services tax and ensuring that tax administration is not arbitrary or retrospective. Financial market reform is equally critical. We need more competition in the banking sector and deeper financial markets. We also need creative ways to finance asset creation on the public sector’s balance sheet and increase banking capital, through asset and debt swaps.

While the road ahead is long and will present challenges, it will also be immensely rewarding. Let’s not lose sight of what India has accomplished or be distracted by the daily noise of the markets because few countries can boast both the macro stability and growth prospects that India now possesses.

Source: Forbes India Magazine

Narendra Modi on What India Can Learn From South Korea

May 25, 2015

Prime Minister Narendra Modi pitched India as Korea’s best business bet to an audience of politicians and entrepreneurs in Seoul on Tuesday, as he attempted to get more foreign investment flowing into Asia’s third-largest economy.

Mr. Modi pointed to the hundreds of Korean companies that are already operating in India and making on-site products for local consumers, but noted that the country ranks only 14th among the largest investors in India.

In the past 14 years, foreign direct investment into India from South Korea has totaled $1.4 billion, putting it behind the United Kingdom, Japan, the United States and Germany in terms of investment into the country.

“There is still a lot of scope for improvement,” Mr. Modi told to an audience that included CEOs of large Korean companies with wide appeal to Indian consumers, including Hyundai Motor Co., LG Electronics, and Samsung Electronics Co. “I can tell you that India was and is a land of potential.

Mr. Modi landed Monday in Korea from Mongolia, on the last leg of a three-country trip that took him around Asia starting last week. The Indian prime minister, who also made a first, much-scrutinized, visit to China, has been trying to rack up investment from richer Asian countries, in an attempt to fund plans to make India a manufacturing hub.

South Korea, which morphed from a backward agrarian country into an export-driven powerhouse in the space of just four decades, is a good example of what Mr. Modi is attempting to do at home. Like India, South Korea is highly dependent on the import of natural resources including crude oil and essential minerals. Still, despite its supply drawbacks, the country has become the world’s 13th largest economy, according to the International Monetary Funds 2014 ranking. India is 9th.

Relations between the two countries show sizeable margin for improvement, especially when considered from India’s side.

Growth in trade between the two countries has been moderate and fell in 2012 and 2013. India’s main exports to South Korea, which are low on the value chain and include raw materials, foodstuff and unrefined metals, have been falling since 2011. Korea’s trade surplus with India increased from $1.98 billion in 2007 to about $5.2 billion in 2013.

Mr. Modi said he sees scope for cooperation between South Korea’s hardware industry and India’s software houses, and added that the country’s car-making would benefit from India’s design capabilities. The Prime Minister also praised South Korea’s steel and ship-building industries, arguing Indian companies have much to learn from their South Korean peers.

Infrastructure was another point high on the prime minister’s agenda.

Mr. Modi said his country is planning to build 50 million houses over the next seven years, to develop smart cities, long industrial corridors and “mega investment regions.”

The Indian prime minister, who next week marks one year in power, stressed that timing was of the essence to get new projects under way.

“We are working day and night to create conditions for faster and inclusive growth,” Mr. Modi said. “We want a quantum jump in all this. There is no time for incremental changes.”

Source: Wall Street Journal