Archive for October, 2015

Second round of smart city challenge by December 2015

October 28, 2015

The parameters for the second stage of the competition for smart cities had been set and the round would end by December, Union Minister for Urban Development said.

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He also said the National Democratic Alliance government’s stand on the issue was that the 13th Constitutional Amendment had to be implemented in the right spirit. Speaking to reporters on the sidelines of a function under the Pradhan Mantri Mudra Yojana, Naidu said the second stage of the smart cities competition had been decided and cities were gearing up for the challenge. “By December, the second round of the competition will be over. The competition has now started,” he said. The Centre provides only Rs 500 crore to a smart city and the rest has to be arranged through public private partnership. “Private investors will invest only if they feel they can get back their money. People must be willing to pay user charges also. You need to work hard. But it is do-able,” Naidu said.

Around 24 countries have shown interest in the smart city mission. The Centre has asked them to choose their cities and they are in touch with the states. States and urban bodies had an important role to play in this, Naidu added.

Addressing queries on India’s position on the draft resolution on Sri Lanka’s alleged during the last phase of its war against the Liberation Tigers of Tamil Eelam, Naidu said the government was taking a cautious approach as the issue had national and international ramifications.

Prime Minister Narendra Modi, during the visit of Sri Lanka Premier Ranil Wickremesinghe to Delhi, had expressed concern on the Sri Lankan Tamil issue and India’s stand was that the 13th Constitutional Amendment should be implemented in true spirit, Naidu said. Devolution of power to provinces, including the Northern province, should reach all the people and every citizen of Sri Lanka should feel part of the system, he added.

“With regards to what happened during the Sri Lankan government action against the LTTE, there is a need for a credible inquiry. What is credible? That has to be decided. India being a neighbour, we need to maintain good relationship with Sri Lanka. But at the same time, Sri Lanka needs to see that the truth comes out and people get justice. That is why our stand has been for a credible inquiry. When the matter is taken up in Geneva, an appropriate response will be given by the government at an appropriate time,” Naidu added.

While Tamil Nadu had a right to pass a resolution, the central government had to take care of various other aspects, the minister said. “If tomorrow somebody demands an inquiry into one part of your country, are you going to accept it? That is an issue one has to deal with carefully.

If somebody tomorrow says they want to take up the issue of Kashmir and let there be a resolution, are we going to accept it? We have to think twice before taking any such step. We are a national party and we are concerned about the national and international ramifications,” he added.

Government of India has given a target of 25 loans per branch under Shishu category, which covers loans up to Rs 50,000 under the Mudra Yojana, during the special campaign period from September 25, 2015 to October 2, 2015, said R Koteeswaran, managing director and chief executive officer of Indian Overseas Bank, which is the convenor of State Level Bankers’ Committee (SLBC), Tamil Nadu. SLBC has drawn a schedule to conduct 33 loan distribution functions in 32 districts throughout the state. Around 2,35,682 of Shishu loans will be distributed through all the branches of all the banks operating in Tamil Nadu.

Source: Business Standard


India hosts biggest Africa summit; challenges China

October 28, 2015

India is hosting its biggest-ever Africa summit this week as Prime Minister Narendra Modi seeks to challenge China’s dominance on a continent that is blessed with vast natural resources and has the world’s fastest-growing population.

India wants to project its soft power and historical ties to Africa, in contrast to China’s focus on resource extraction and capital investment that has sparked a backlash in some countries against Beijing’s mercantilist expansion.

Of the 54 countries invited, the hosts expect more than 40 to be represented by their heads of state and government who, after a series of ministerial meetings, will hold a full summit on Thursday.

India’s trading ties with Africa date back to antiquity and both found common cause in the struggle against colonial rule. Yet India’s influence faded over the course of the Cold Waras it withdrew into non-aligned isolation.

Now Modi, self-styled chief salesman of a “Make in India” export drive, wants to capitalise on an economic slowdown in China to highlight India as an alternative partner for trade and investment.

“India is the fastest-growing major economy. Africa is experiencing rapid growth too,” Modi told African journalists on the eve of the summit.

Although India’s headline economic growth has overtaken China’s, its economy is one-fifth the size and it lacks the financial heft to challenge Beijing in a head-to-head contest for the African market.

“We can’t match the Chinese in terms of resources – but any engagement we do with the Africans at least gives them a choice,” said C. Raja Mohan, a foreign policy commentator at the Observer Research Foundation in New Delhi.

The India-Africa Forum Summit is the third of its kind and, since the first was held in 2008, two-way annual trade has more than doubled to $72 billion (Rs 4.66 lac crore) .

That lags trade between China and Africa, which has exploded to $200 billion (nearly Rs 13 lac crore) as the world’s No.2 economy sucks in oil, coal and metals to feed its industrial machine.

The world’s largest democracy has been criticised by human rights groups for inviting Omar al-Bashir, the president of oil-rich Sudan wanted by the International Criminal Court on charges of war crimes, crimes against humanity and genocide in Darfur.

Exploitation and Extraction

For India, business comes first. State-run oil company ONGC, which has fields in Sudan and South Sudan, is on the hunt to buy $12 billion (Rs 77,736 crore) in foreign assets over the next three years and has identified Africa as an investment target.

India is also in talks with South Africa to buy coal mines producing up to 90 million tonnes (9 crore mt) of coking coal each year to feed its growing steel industry. South Africa is already a major coal supplier to India.

Still, India wants its involvement in Africa to be less transactional than China’s, seeking a development partnership for two regions that account for a third of the world’s people, but seven in 10 of those living in poverty.

“Our partnership is not focused on an exploitative or extraction point of view, but is one that focuses on Africa’s needs and India’s strengths,” said Vikas Swarup, spokesman for the Indian Ministry of External Affairs.

Trade ministers from India and Africa are looking to make common cause at a World Trade Organization ministerial meeting in Nairobi next month, Commerce Minister Nirmala Sitharaman said.

Although India dropped its veto against a WTO deal to streamline customs procedures a year ago, it remains uneasy over Western pressure on food stockpiling it says is vital to ensure its 1.25 billion people don’t go hungry.

“India and Africa are on the same page,” Sitharaman told reporters.


15th October 2015: Investment Opportunities in Wales, UK, Gurgaon

October 28, 2015

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8th Oct 2015: Seminar on Smart Cities and developing Urban Infrastructure, New Delhi

October 27, 2015

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India’s gold monetisation scheme may be ready in weeks

October 27, 2015

A programme to attract gold owned by households into a bank deposit scheme to monetise the precious metal could be ready in weeks, Prime Minister Narendra Modi said on Sunday, a step aimed at cutting expensive imports.

The scheme would allow people to put their gold into banks in return for interest payments in an attempt to mobilise thousands of tonnes of the metal sitting idle in Indian households.Indians prize gold as gifts and as a way of storing wealth. The country consumes nearly 1,000 tonnes of gold every year, most of it imported, and gold is the second-biggest expense on the import bill after oil.

In his monthly radio address, Modi said the programme should be ready before Dhanteras next month, a festival when it is considered an auspicious period to buy gold.

“Please, don’t let your gold be dead money,” Modi said. “Gold is very important for the country. Gold can become an economic strength for us.”

Huge gold imports were blamed for pushing the country’s current account deficit to a record $190 billion in 2013, prompting the government to hike its duty on imports to 10 percent, an all-time high.

Source: Reuters

Centre, state to invest Rs 1,650 crore on power infrastructure in district

October 27, 2015

In a major boost to power infrastructure in the district, the state and central governments have decided to invest around Rs 1,650 crore through various schemes. This will improve the quality of power supply in urban and semi-urban areas and help MSEDCL in providing much needed agricultural pump connections to farmers.

A source in MSEDCL said that the company would invest around 93 crore while central government would provide over Rs 1,200 crore under Deen Dayal Upadhyay Gram Jyoti Yojana (DDUGJY), Integrated Power Development Scheme (IPDS) and Smart City schemes. Mahatransco will invest another Rs 340 crore. Other than this, works worth over Rs 500 crore were going on in the district under MSEDCL and Transco’s infrastructure upgrade schemes.

The source further said that other than Nagpur, 10 more urban areas in the district had been chosen under IPDS. They include Kamptee, Katol, Umred, Kalmeshwar, Saoner, Khapa, Narkhed, Mowad, Mohpa and Ramtek. “Funds will be provided to SNDL too for improving the infrastructure of franchisee area,” he said.

Under IDPS phase I four new 33 KV substations were proposed in the city. Their locations are: Khamla, Dharampeth, Kalamna and Subhan Nagar. An additional 10 MVA transformer will be installed in Congress Nagar substation. Under phase II of this scheme, seven new substations would be set up in the city. The locations are: Matakacheri, Deekshabhoomi, Somalwada, Jai Durga Nagar, Sugat Nagar, Manewada and AFO. Three more substations will be constructed under Smart City scheme. They will be situated at Gandhibagh, Koradi Road and Govind Bhavan. Mahatransco is setting up three 220 KV substations at Pardi, Mankapur and Uppalwadi and three 132 KV substations at Jattarodi, Lendra and Uppalwadi.

Other than setting up new substations, strengthening of the distribution network, metering of distribution transformers, feeders and consumers will be done under phase I of IPDS. The main aim is to reduce the technical and commercial losses. This will be done by laying new overhead as well as underground high tension (HT) and low tension (LT) cables, installing new distribution transformers and increasing the capacity of existing transformers.

These schemes have come as a boon for power franchisee SNDL. MSEDCL was not supposed to invest in the franchisee area but central government has decided not to deprive franchisees of central funding. Private licensees like Tata and Reliance too will get the benefit of these schemes.

The source further said that the biggest constraint in providing new agricultural pump connections was lack of infrastructure. “New poles, cables, transformers and substations under DDUGJY will remove this constraint and farmers will no longer complain of pendency,” he said.

What the scheme entails:

* Three 220 KV substations, three 132 KV substations, 14 33 KV substations

* Increasing capacity of some existing substations

* New underground and overhead HT and LT cables

* New distribution transformers and increase in the capacity of existing ones

* Installation of 8,500 new state-of-the-art consumer meters

* New consumer connections in rural areas

* Separating feeders supplying villages and farms

What are the advatages:

* Voltage fluctuations will be a thing of past

* Power interruptions at consumer level will reduce due to backfeeding

* New connections will not be delayed due to infrastructure constraint

* Farmers will get agricultural pump connections

* Power supply quality will improve in taluka places

Source: Times of India

Digital India sectors attracting flow of foreign funds in big way

October 27, 2015

While FDI inflows into ‘Make in India’ industries have increased, the export focus of the campaign seems to have been diluted in favour of the Digital India sectors, suggests a report by brokerage firm Emkay Global.

The report, published on Wednesday, also adds that while recent media reports have said that India has outstripped China in terms of FDI, this is a limited view. In fact, China’s gross FDI inflows are far higher than India’s.

While $5.3 billion flowed into the computer software and hardware sectors between December 2013 and June 2015, only $1.1 billion entered the construction sector in the same period, the report finds, based on data from the Department of Industrial Policy & Promotion (DIPP) and the United Nations Conference on Trade and Development (UNCTAD).

In addition, the report states that although FDI inflows into the automobile sector — a pillar of the Make in India mission — have been growing, the trends suggest that they have been focussing more on domestic demand rather than on export growth.

“While the automobile industry has been considered as an important driver of the ‘Make in India’ campaign, evidence suggests that most of the FDI flows, both historically and recent, have been aided to capture domestic demand rather than exports, diluting the essence of the campaign,” the report said. The argument made by the report is that although FDI in the automobile sector has been growing reasonably healthily, the effect of this increased investment has been felt more in boosting domestic sales rather than in bolstering exports.

The report says the same trend can be seen in the computer hardware and software sectors. While these sectors have seen a substantial rise in recent FDI, this has not translated into a commensurate increase in exports. “The profile of recent FDI flows… is indicative of investments done to tap the domestic household consumption rather than catalyse exports,” the report said.

This does not take into account the gloomy demand scenario in the global economy, which has led to Indian exports dipping across sectors. The report added that sectors that have historically generated employment such as construction, have simultaneously seen a sharp decline in their percentage contribution to FDI inflows.

Regarding the recent media reports saying India has surpassed China in terms of FDI, the Emkay Global report says that such an assertion may have been made on the basis of “truncated data”.

“Net FDI flows into China (inflows less outflows) averaged around $1 billion for the 12 months ending August 2015, much lower than $2.9 billion for India. While truncated data like these may have prompted some to conclude that India trumped China, if we consider only the inflows (gross inflows), China has consistently maintained a monthly average of around $10.5 billion, nearly 3.6 times of India’s $2.9 billion,” the report said.

The reason behind the confusion, the report says, is that China’s FDI outflows far outstrip India’s, and so a metric measuring inflows minus outflows and comparing countries on the basis of that difference is an incomplete indicator of investment activity.

Source: The Hindu

Changes in policies improved India’s investment regime: Report

October 27, 2015

India has made significant changes to some of its policies, including FDI, tariffs and customs procedures, since May, “improving” access for US trade and investment to the Indian market, a federal trade commission has said.

In a report prepared at the request of the House of Representatives Committee on Ways and Means and the Senate Committee on Finance, US International Trade Commission (USITC) said after Narendra Modi became Prime Minister, the government has made significant changes to its policies in the key areas of foreign direct investment (FDI), tariffs and customs procedures, local-content and localisation requirements, and standards and technical regulations.

In the report, which was released to the press yesterday, USITC said since May 2014 India has raised FDI equity caps in the insurance and defense industries, removed the requirement for pre-investment authorisations in several industries and permitted FDI in certain segments of the railway industry.

“These changes have helped to improve India’s overall investment regime,” USITC told the US Congress in its investigative report.

Noting that India has made a small number changes in its tariffs and customs procedures, the 258-page report said New Delhi has reduced tariffs on some information, communications, and telecommunications (ICT)-related products, but increased tariff on several telecommunications-related products.

Some changes have improved US access to the Indian market, the federal trade body felt.

India has made changes to policies and practices regarding local-content requirements and localisation measures, the report said, adding that the changes expand or propose to expand several local-content and localisation requirements affecting certain ICT, electronics, and defense and civil aerospace products.

The changes affect measures that require foreign firms to purchase Indian inputs, conduct a share of business in India, conduct certain business activities in India, or submit to India-specific testing or registration, the report said.

Further, the government has expressed a commitment to harmonise India’s standards with international standards and to increase engagement with the US.
Nevertheless, US industry and government representatives report that new India-unique mandatory standards and technical requirements that increase costs, delay time to market, and operate to exclude certain US products from the Indian market have been created, the report noted.

However, USITC said the government introduced no new IPR laws during May 2014-June 2015 to address barriers to the protection of trade secrets, regulatory test data, patents, trademarks, and copyrights.

Nevertheless, US industry and government representatives noted the willingness of Modi government officials to engage in discussions with the US on IPR issues, it said.

According to USITC the Modi government also pursued several broad policy changes to enhance India’s business climate during May 2014-July 2015.

“Changes in the following areas particularly may positively affect India’s trade and investment climate, improving India’s economic infrastructure, improving the ease of doing business, creating greater bureaucratic transparency and accountability, changing taxation policy, and encouraging state-level policy changes in India,” it said.

Source: Economic Times

India fourth fastest growing FDI source for US

October 19, 2015

Foreign direct investment (FDI) by Indian firms into the US has touched $11 billion making the Asian country the fourth fastest growing source of such investment in the North American nation, an official said here on Friday.

“India has become the fourth fastest growing source of FDI into the US with $11 billion of historical investment and counting,” executive director of Select USA Vinai Thummalapally told media persons here.

Select USA is a US government programme to promote and facilitate foreign business investment into the country which concluded the last leg of the four-city roadshow here.

According to the group, Indian FDI in the US grew from $5,995 million in 2010 to $10,706 million in 2014. However, the flow has decreased from $1,289 million in 2010 to $718 million in 2014.

On the other hand, US FDI in India grew from $24,666 million in 2010 to touch $27,963 million in 2015 while the flow decreased from $3,069 million in 2010 to $2,623 million in 2015.

Software and IT services, business services, financial services, pharmaceuticals, plastics and industrial machinery – as per Select USA – are the key interest areas for India.

“Indian firms also exported $2 billion worth of goods from US in 2012. Many such companies use the US as an export platform and benefit from free trade agreements,” Thummalapally said.

He said the US has come up with a “cluster mapping” system to help locate and promote specific regions where Indian small and medium enterprises can invest in.

He said the Select USA initiative will help Indian businessmen in navigating the regulatory system and arrive at solutions.

“Our operations are three-fold — we provide the necessary information required to make the decisions, put investors in touch with the right people at the local level and act as ombudsman,” he said.

The programme is also encouraging start-up firms to venture into the US.

“We are keen to work both with large multi-national companies as well as small-medium ones to start-up ventures,” said Seth Isenberg, senior international investment specialist at Select USA.

Asked about incentives for these ventures, he said: “Incentives are localized (state-specific). The federal government doesn’t provide any such incentives.”

Source: Times of India

India’s apparel exports to touch $18 bn in 2015

October 19, 2015

India’s apparel for 2015 are likely to increase to $18 billion and to $20 billion in 2016 as against $16.5 billion in 2014, a study said.

According to a report from investment information and credit rating agency ICRA, the growth in India’s apparel exports is supported by the expectations of increase in the global apparel trade and partly due to benefits of depreciated Indian rupee.

“However depreciated rupee is unlikely to remain as a sustainable advantage in long-term as India’s market share in world’s trade has not significantly changed despite depreciation of Indian rupee during last three years,” it said in a statement.

India’s share in the global apparel trade has remained modest with a share of just four percent last year which has increased only marginally from a share of three percent in 2004.

The report said while China, Bangladesh and Vietnam were able to realize the benefits of the new trade arrangement (WTO’s agreement on textile and clothing) thereby increasing their share in global apparel trade substantially, India’s share had remained modest.

“China is the largest apparel exporter on account of the largest global capacities across the textile value chain; however, the share of had remained modest despite India being amongst the largest producer of cotton and man-made fibre and having the second largest capacity for spinning and weaving,” it said.

It said fragmented nature of the weaving, processing and garmenting industries with low levels of modernization, higher cost of production, modest share of non-cotton apparel and reliance on imported machineries across the textile chain have been the key factors which had constrained growth in India’s apparel exports.

The benefits of the government’s flagship programme for textile sector upgradation – Technology Upgradation Fund Scheme (TUFS) – has been largely availed by the spinning sector with downstream sectors (weaving, processing and garmenting) witnessing limited participation.

“The government’s earlier policy of reserving the weaving and apparel sectors for the small scale units which had specified cap on investments in plant and machinery had been one of the reasons for the fragmented nature of the industry,” said the report.

However with revision in TUFS in October 2013 which focus on investments in downstream sectors, there have been increased investments there.

As per the findings, the domestic apparel market has grown at a mean annual growth rate of 10 percent over the last five years.

“With growth in the economy and rising income levels, and is expected to maintain the growth rate over the medium term,” it said.

Source: Business Standard