Archive for June, 2015

Govt. to launch Digital India week on 1 July

June 30, 2015
In order to transform the country into a digitally empowered knowledge economy, the Union government will formally launch the Digital India Week on 1 July in an event inaugurated by Prime Minister Narendra Modi that will be attended by a number of prominent industry leaders from across the world, minister of communications and information technology Ravi Shankar Prasad announced on Saturday.
“We have approached and received confirmed attendance from a number of industry leaders, including Cyrus Mistry, Mukesh Ambani, Azim Premji, Pawan Munjal, Sunil Mittal, Kumar Manglam Birla, Anil Agarwal, Anil Ambani, among others, for the mission’s launch at the Indira Gandhi Indoor Stadium. Around 10,000 people are expected to be present at the launch,” Prasad said.
“As per estimates are concerned, we expect billions of dollars investment (in Digital India week),” Prasad told reports here while announcing details of the event.
The Digital India initiative is an umbrella programme designed to integrate government departments and the services they provide to citizens across the country using the Internet. The initiative also includes a plan to connect rural India with high-speed Internet networks.
As part of the initiative, the government is not only creating products to make the delivery of government services easier but also plans to build the architecture to connect the country using optical fibre.
The products include a digital locker system for storage and sharing of important documents such as property deeds and other certificates, platform to engage with citizens and disseminate important government services related information, e-sign framework allowing for online document authentication using Aadhaar number, e-hospitals and a national scholarship portal.
On the infrastructure side, the government is building the BharatNet (formerly called the National Optical Fibre Network) that aims to connect 250,000 gram panchayats with high-speed optical fibre-based Internet access.
State run Bharat Sanchar Nigam Ltd is currently replacing the 30-year old equipment at as many as 400 exchanges across the country, with NGN (Next Generation Networks) to improve delivery of IP-based services. The telco is also building WiFi hotspots across the country.
Last year, the government had approved the programme comprising various projects worth more than Rs.1 trillion to transform the country into a digitally empowered knowledge economy.
Under the Digital India initiative, the government is implementing a number of policy changes. These include open software adoption, BPO policy (to create BPOs in smaller towns), electronic development fund to promote creation of intellectual property in india; among others.
The government has targeted the Digital India initiative to reach its full impact by 2019.
Source: Livemint

Wal-Mart rolls out plan to open 500 stores in India

June 28, 2015
After restructuring its operations to focus exclusively on the cash-and-carry (or wholesale) business in January last year, Wal-Mart India Pvt. Ltd, a wholly owned subsidiary of Wal-Mart Stores Inc., is working on an ambitious plan to have 500 stores in the country the next 10-15 years, a top executive at the firm said.
“We now have a full team in place and will be able to grow very fast,” said Krish Iyer, chief executive officer, Wal-Mart India, adding that the company is in India for the long term and will start growing aggressively in two to three years from now.
Two years ago, Wal-Mart’s Indian plans ran aground amidst charges of flouting Indian rules on foreign investment in retail that have since been proved false. That and differences in strategy led to the company breaking up with its partner Bharti Enterprises. Iyer took charge around then.
“The most important thing when I came in was to have a clear strategy. It was evident then that I would focus on our cash-and-carry business,” said Iyer in a 19 June interview.
With a near exodus of employees after the crisis, Iyer had to first build a team. He also needed to focus on strengthening the company’s compliance processes and improving its relationship with various stakeholders, including the government and media.
The first new store since Iyer took over will open in August in Agra.
Opening stores of the kind that Wal-Mart requires, with about four acres of space on average and with lease of over 30 years, is not easy. “The gestation period for a store launch is 2.5 years,” explains Iyer, while sharing that three years from now the company will be in a position to open a store every one or two months.
“Until then, it’s about getting ready for the growth,” he said.
The company is on course to opening 50 stores by 2020, said Iyer, who is now looking at a bigger business potential over a longer horizon. “We can, over a period of 10-15 years, have 500 stores.
The potential in India is huge. India is five countries rolled into one,” he added.
Currently, Wal-Mart India has 20 stores across eight states, largely located in so-called tier II and III cities. Its investments in India till a year-ago stood at Rs.2,000 crore. Last year, in June, the parent said it would invest Rs.623 crore in India, according to filings with the Registrar of Companies (RoC).
“We will continue to focus on tier II and III cities and build our presence in concentric circles—focusing on a few states and geographies to gain critical mass,” said Iyer.
To achieve these numbers will not be easy, said experts. “The biggest challenge is getting clean land parcels without any legal discrepancy. However, compared to the larger cities, the focus on tier II and III cities is a good strategy because at least land is available there at cheaper costs,” said Vivek Kaul, head, retail services India, CBRE South Asia Pvt. Ltd, and added that the risk is that the land could be agricultural and obtaining a land use conversion to commercial could take 6-8 months.
Over the past year and a half, the company has also worked with the government at the state level to improve its relationships, said Iyer. “There is an ease of doing business we are experiencing in some of the states that we are in. It is driven by the centre, but executed at the state level,” he added, pointing to states such as Telangana that recently unfolded its industrial policy.
Telangana is proposing a single-window clearance for various kinds of proposals with clearance time ranging from 21 to 30 days. This is also happening in Andhra Pradesh and Uttar Pradesh and Punjab may follow suit, said Iyer.
Setting up a wholesale store needs a little more than 45 licences.
Wal-Mart rival Metro Cash and Carry India Pvt. Ltd, which has 16 stores, announced last year that it would have 50 stores in India by 2020. In March this year, Metro AG, the parent, said it would invest Rs.400 crore in the Indian subsidiary, according to a 31 March filing with the RoC.
The organized wholesale business in India is very nascent with less than 100 stores between the top companies, including 45 cash-and-carry stores of Reliance Industries Ltd’s retail arm. French firm Carrefour SA exited the businesses last year to focus on reviving flagging sales in its home market
Source: Livemint

Australian trade minister to visit India to push services exports

June 27, 2015
Australia will seek to expand its services exports to India when its trade and investment minister Andrew Robb lands in New Delhi next week for his third visit this year.

Robb will also discuss with his Indian counterparts the progress of the Comprehensive Economic Cooperation agreement (CECA) which the two countries plan to sign by the end of 2015. PMNarendra Modi and Australian PM Tony Abbot have signalled their strong commitment to seal the CECA by the end of this year. The eighth round of negotiations are set to take place in New Delhi in July.

“The variety of new opportunities presenting themselves from our expanded economic engagement is providing exciting new pathways to further deepen bilateral ties between our two countries,” Robb said in a statement. “In addition to improving market access for goods, I’m determined to grow our services exports to this region, given it is one of the world’s most rapidly growing services markets on account of its rising middle class.”

He said the there were signs that these opportunities were taking shape. The Australia India Council has provided Victoria University a grant to work with the Indian government to establish elite sport systems, which has the potential to unlock future commercial opportunities in this growing services field, Robb said.

The Australian trade minister, who will be on a three-day visit to India will attend the Australia-India CEO Forum at the invitation of the co-chairs, Rio Tinto CEO Sam Walsh and the Chairman of the Adani Group, Gautam Adani.

“Abbott and Modi agreed to work towards concluding a CECA in 2015 to increase trade and investment, promote job growth and fuel prosperity for both our countries,” Robb said.

He said the Australian Government welcomes the opportunity to work with business leaders from India and Australia.

“With Australia and India’s top business leaders contributing to the Australia-India CEO Forum, we are committed to building and expanding our trade and investment relationship and together we will drive our future economic engagement,” he said.

Earlier this year he visited India for the inaugural Global Exhibition on Services in New Delhi, following a visit in January for the Australia Business Week in India (ABWI), which saw more than 450 Australian business leaders take part in a week-long roadshow across the country, designed to boost trade and investment.

India is Australia’s 12th largest trading partner and two-way trade between India and Australia is approximately $A15 billion. Indian foreign investment into Australia has reached almost $A11 billion, with $A9.8 billion of Australian investment in India.

    Source: Times of India

    Investments surge in India’s telecom industry

    June 27, 2015
    With the explosive growth in data consumption taking India’s telecom sector to its next stage of growth, foreign investments have seen a surge.

    After India permitted 100% foreign direct investment (FDI) in the sector in July 2013, the first 10 months of the last fiscal (till 31 January) saw the highest ever FDI inflows into telecon firms.
    Source: Livemint

    Foreign investors dump shares worth Rs 3,300 crore in June

    June 27, 2015

    Foreign investors have pulled out more than Rs 3,300 crore from Indian stock markets so far this month, mainly on account of better returns from Asian peers, concerns over a slow revival in corporate earnings and continued worries over taxation issues.

    However, in debt markets, Foreign Portfolio Investors (FPIs) invested Rs 1,500 crore in the country’s during the same period.

    FPIs made gross purchase of shares to the tune of Rs 78,914 crore during June 1-19, while they sold stocks worth Rs 82,248 crore, taking the total net inflow to Rs 3,334 crore, shows latest data from depositories.

    “FPIs have been withdrawing money from the domestic capital markets as they are finding China more attractive than India. Besides, FPIs are worried over a slow revival in corporate earnings.

    “In addition, FPIs are apprehensive that the government would impose a 20 per cent Minimum Alternate Tax (MAT) on profits earned by them,” UTI Mutual Fund EVP and Fund Manager V Srivastava said.

    Anand Shah Chief Investment Officer at BNP Paribas said, “there is nothing to worry about FPIs flight from the Indian stock markets. In medium to long-term, India is an attractive place for investment. FPIs will start investing in our markets when issues of Greece and rate hike by US Federal Reserve sort out.”

    Data showing acceleration in industrial production growth and easing of food price inflation and expectations that above-average monsoon rain will improve the odds for further monetary policy easing from Reserve Bank are expected to help FPIs to infuse money, experts noted.

    During January to April, investments by FPIs totalled Rs 94,241 crore, but month-on-month analysis shows the fund flows are witnessing declining trend.

    FPI investments in January this year stood at Rs 33,688 crore, before dropping to Rs 24,564 crore in February, Rs 20,723 crore in March and Rs 15,266 crore in April and finally an outflow of Rs 14,272 crore in May.

    Since January, overseas investors have invested a net amount of Rs 78,244 crore in the capital markets (debt and equities).

    Source: Zee News

    Russia looking at India, Asia to beat Western sanctions: CII

    June 26, 2015

    The Russian government and the industry are looking at tie-ups with Indian and other Asian companies, according to a top industry representative.

    According to Chandrajit Banerjee, director general of Confederation of Indian Industry (CII), with the US and Europe imposing sanctions on because of the conflict in Ukraine, the companies at St Petersburg International Economic Forum (SPIEF 2015) have shown keen interest in doing business in India.

    “I have had a lot of queries coming my way on the ‘Make in India’ plans, and Russian companies have indicated that they would be interested in manufacturing in India,” Banerjee told IANS after a few rounds of discussions with companies here.

    He said the major interests shown are in the areas of energy, power and infrastructure.

    Banerjee said many top business leaders told him that they are keen to set up some kind of base in some of the Indian states which have been in the forefront of inviting investments.

    A Russian company is in the final stages of negotiating an engineering manufacturing venture in Haryana, he added.

    Banerjee said that a large deal is being worked out in the energy sector between two leading companies from Russia and India, but he did not name them.

    The Indian company would possibly be Essar, which is being represented by its joint chairmen Shashi Ruia and Prashant Ruia here.

    The chief said details would be available once the companies are able to finalise the deal.

    He said the defence sector in Russia is now keen on collaborating with Indian companies as the area is now open for private sector investments in India.

    CII is leading a 30-member delegation to the SPIEF this year and it has participated in the event for the last nine years.

    Banerjee said he also saw keen interest being shown by companies from Malaysia, Indonesia, South Korea and Singapore, in the absence of any major representation from Western nations. The large Indian delegation to the forum, he said, has convinced the Russians that Indian companies are interested in doing business.

    He said the Russians have also shown interest in looking for financing from other sources, including India, as the Western lending possibilities appear to be drying up because of the sanctions. He said the Exim bank of representatives have had a round of fruitful talks with the Russian companies.

    According to Banerjee, in the last one year, India has been able to put behind its “policy of ad hocism” and a fundamental change in the economic architecture is being put in place.

    “We are on the right track and the systems are getting in place,” he said, adding that it may take some time for all the results to show. “Not everything is a quick fix.”

    He said the Indian government has taken advantage of the “benign external environment” and is putting in place the policy changes required. “One serious challenge remains though – on the interest rate front. We would have liked changes to come in bold strokes, rather than the tinkering we have seen,” Banerjee said.

    He was of the opinion that although demand was improving and the investment by companies would pick up, a lower interest rate regime would have triggered major flow of money into every sector. The Reserve Bank of India, which indirectly manages the broad interest rates, has taken steps in three tranches this year, resulting in a cut of about three-fourths of a percent in a key rate.

    Banerjee said that on the taxation front the government has taken a “pragmatic approach” and the era of administrative harassment seems to be coming to an end. Even on the retrospective taxation, the government is not taking steps it could have. Corruption at top level is absent but that needs to reflect at the lower level.

    He said that growth is not only the responsibility of the government, the industry too needs to respond by investment, adding he was sure that it would do so.

    Source: Business Standard

    India raises duties on some steel products to counter Chinese imports

    June 26, 2015

    India has raised duties on certain steel products by up to 2.5 percentage points, as domestic producers struggle to cope with surging cheap imports from China and Russia, among others.

    The government has raised import tax to 10 percent from 7.5 percent on flat steel and to 7.5 percent from 5 percent for long steel products, the government said on Wednesday.

    Almost all companies making the alloy in India have urged the government to take action against what they claim is “dumping” of cheaper steel, which has pressured prices and hit profitability over the past few quarters.

    The industry welcomed the government’s decision on Wednesday, but said the raise was not enough to significantly reduce shipments coming in from Japan and South Korea, countries with which India has free trade agreements.

    “I think at least it shows that the government has recognised that there is an issue and taken a step, though a small one, to recognise it,” said Sanak Mishra, Secretary General of industry group Indian Steel Association.

    Shares in Indian steel companies reacted positively with Tata Steel Ltd closing up 3.6 percent and JSW Steel Ltd ending Wednesday up 3.3 percent.

    In its annual budget in February, India raised the cap to which it can increase import duties to 15 percent from 10 percent, but kept the tariff unchanged.

    Earlier this month, the government imposed anti-dumping duties ranging from $180 to $316 per tonne on some industrial-grade stainless steel in a bid to stem the flood of imports.

    The tariff hike will reduce the gap between domestic steel prices and the landed cost of Chinese steel by around 2.5 percent, India Ratings analysts wrote in a note, adding that even that benefit could be hurt by an appreciating rupee.

    “Additional tariff and non tariff measures are required to ensure cheap and unfair imports do not damage the domestic steel industry which has invested significant capital,” said H Shivramkrishnan, Chief Commercial Officer, Essar Steel.

    Source: Reuters

    Government Okays 16 Foreign Investment Proposals Worth Rs 6,751 Crore

    June 26, 2015

    The government of India on Wednesday approved 16 foreign investment proposals, including those of Torrent Pharmaceuticals and Star India Private Limited, amounting to Rs 6,750.86 crore.

    “Based on the recommendations of Foreign Investment Promotion Board (FIPB)… Government has approved 16 proposals of Foreign Direct Investment (FDI) amounting to Rs 6,750.86 crore,” Finance Ministry said in a statement.

    The proposals were cleared during the FIPB meeting held on May 28, it added.

    However, a total of 21 proposals were deferred during the meeting and six others were rejected.

    The government has approved Torrent Pharmaceuticals’ proposal for increasing FII investment from 13.09 per cent to 35 per cent.

    While, Syngene International has been allowed to raise foreign investment to 44 per cent from 10 per cent by initial public offering of equity shares to FIIs, FPIs and NRIs.

    Broadcaster Star India Private Limited has been given approval for further issuance and transfer of shares to its foreign collaborator and acquisition of another Indian company engaged in broadcasting sector on a slump sale basis.

    Among others, FDI proposals of Stericat Gut Strings Pvt Ltd, BASF Chemicals India Private Ltd, Ordain Health Care Global, Mumbai-based TRIF Kochi Projects, TRIF Real Estate and Development Ltd, Berggruen Real Estates and Today Magazines Lifestyle, were also approved.

    Meanwhile, FDI proposal for increasing the aggregate foreign investment in Kotak Mahindra Bank to 55 per cent, pursuant to a merger between ING Vyasa and Kotak, has been deferred.

    Others in deferred list include Reliance Globalcom Ltd, Bermuda, Celon Laboratories for downstream investment in another brownfield pharma company, INX Music Private Limited, Eros International Media, NTT Communications India, Hathway Cable and Datacom and DEN Networks.

    Also, the government has rejected FDI proposal of Strides Arcolab for issuing shares to non-resident and resident equity shareholders of Shasun Pharmaceuticals under a merger scheme.

    Proposals of SME Capital Market Corp, IIFL Holdings, Quantam Simulators, Big India Malls and Cheekotel Venture Fund were also rejected.

    Source: NDTV Profit

    Restructuring Railways: India may have independent regulator for railways

    June 26, 2015

    India could soon have an independent regulator for railways. Bibek Debroy, the chairman of the high-level committee on restructuring of railways, told ET that there could soon be an announcement in this regard in the coming days. The panel submitted the over 300-page report to the railways ministry last week and the ministry is expected to present it to Prime Minister Narendra Modi for consideration before the ball is set rolling. The employees’ unions and the opposition parties reacted sharply to the report, interpreting it as an attempt to privatise Indian Railways in the name of liberalisation.

    “This is not a report and not a government where you should expect that all recommendations are accepted on a given day and then nothing happens over the next 20 years,” said Debroy. “Implementing the report is a series of incremental steps, so you will soon have an announcement of an independent regulator and a first step in that direction will be drafting of the bill.”

    According to Debroy, the committee has proposed setting up of a statutory regulator that will be independent, answerable to Parliament and not to the Railway Boards. “There has to be legislation for this, which will require amendment to the Railways Act and the Railway Board Act. This will take at least three years,” said Debroy.

    He said it is better to take three years to set up a statutory regulator rather than setting up a regulator with no powers in one month through the executive process. Commenting on the extent of changes that can be expected after the report is implemented, Debroy said the problems of Indian Railways were not created in two years but six decades ago. “Probably nothing will change in the next five years if you see as a customer of railways. The recommendations are building for a change that will happen 15 years down the line,” he said. It will take three years for the report to be accepted and implemented, he said. Debroy shrugged off the criticism of the unions and the opposition parties, saying that even the existing railways policy envisages participation of private players in the sector.

    “Entry of private players into Indian Railways is already part of the railway policy and a whole range of services on trains, be it catering, cleaning of toilets and stations or providing security, are already privatised,” he said.

    Besides, the public statements of the unions suggest they are not opposed to commercial accounting, unified entry of officers and decentralisation while there are mixed opinions on the independent regulator. “Yes, they are opposed to private entry, at least their public statement said that, but the other way to look at it is that the unions agree with 80% of the recommendations,” said Debroy. The report has suggested five big things to be done in the next five years to reform Indian railways.

    Besides setting up an independent regulator, these include breaking down the silos for unified entry to future entrants, introducing commercial accounting on a pilot basis in the first two years, endorsing private entry in the railways and taking up the existing practice of decentralisation to beyond the level of general managers.

    Source: The Economic Times

    WEF India summit to put spotlight on govt’s policies

    June 23, 2015

    The World Economic Forum’s (WEF) upcoming India summit, slated for November, is going to be an action-packed affair as policy makers and industry leaders are expected to deliberate strategic vision of the Modi-led government.

    “The theme of this year’s annual meeting would be strategic vision of the government and action on the ground at the same time,” WEF Managing Director Philipp Rosler told PTI.

    Besides, the summit will focus on topics like developing 100 smart cities, inclusive growth, financial inclusion, renewable energy and tax reforms.
    Some 300-350 leaders from business, the government, civil society, NGOs and academia will take part in the summit organised by Geneva-based WEF in partnership with industry body Confederation of Indian Industry (CII).

    “We are planning to invite Prime Minister and all ministers of the central government for the India summit,” he added.

    The event is likely to be attended by senior officials of Infosys, Reliance Industries, Essar, Wipro, Mahindra & Mahindra, HCL Technologies, Tata Consultancy Services and the Jubilant Group.

    Rosler said, “2015 summit, which will happen some time in November in New Delhi, would be at very high level, smaller and strategic compared with last year.”

    However, the date has not been finalised, he added.

    The last year summit saw more than 700 participants discussing ‘Redefining Public-Private Cooperation for a New Beginning’.

    Asked about the theme for global summit at Davos, Rosler said: “We have not finalised it.”

    On dignitaries who are expected to participate in the annual meeting at Davos, which will kick off in January, he said: “Generally, we invite all the heads of states and India is a very important country, and we are definitely planning to invite Prime Minister Modi for the event.

    Source: Business Standard