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India
most preferred business locale: AT Kearney report
For
all the falling markets, India is the most preferred location
for business in the world. The latest global services location
index by AT Kearney shows India ranks favourably in its people
assets in terms of education, experience and security of
intellectual property, reports CNBC-TV18. India continues to be
the best place to start a business. That is what the latest
global services location index by AT Kearney indicates. And the
people of India seem to have given it its prime advantage. The
report says the large, educated labour force with relevant work
experience gives India an unbeatable advantage.
For Australia, India's land of opportunities
After China, it is India that Australian businesses are looking
to head to cash in on the immense opportunities that its
phenomenal growth is expected to present over the next few
decades. Assuming the Indian government continues to set
growth-supporting policy, there is ongoing reform and no major
adverse shocks, India's economy could rival the size of the
largest European countries by 2020 and outstrip Japan by 2032,
according to an Australian government report released by Trade
Minister Warren Truss. This would make it the world's third
largest economy after the United States and China. The report -
'India's Services Sector: Unlocking Opportunity' highlights the
possibilities for Australian business in India's services-led
economic growth.
EU expects US$ 25 billion FDI from India in 2007
The
Foreign Direct Investment (FDI) outflow from India to the
European Union (EU) can cross the 25 billion dollar mark this
year, according to a joint finding by two European investment
bodies from France and Germany. The trade bodies-'Invest in
France' and 'Invest in Germany' expect the FDI inflow in EU from
India to rise over 56 per cent from an estimated USD 16 billion
in 2006. "Indian companies are investing in Europe mainly
through big acquisitions and with more number of acquisition and
investment proposals coming from the Indian companies we expect
the investment figure to well cross 25 billion dollars this
year," French Ambassador for international investment and
President of Invest in France Philippe Favre said. The 25
billion dollar figure includes over 12 billion dollar worth of
Tata-Corus deal and over 6 billion worth of Birla-Hindalco deal,
he said.
India
retains leadership in manufacturing excellence
When Japan Institute of Plant Maintenance (JIPM) confers the TPM
Excellence Award on 16 companies in a special ceremony in Japan,
it will be a celebration of India having embraced Total
Productivity Management as an integral part of business. While
India remains amongst the countries with the highest tally for
the year, the total number of TPM Excellence Awards winners now
stands at 111 – no small achievement. To drive the TPM mission
in India, Confederation of Indian Industry, in line with its
mission to promote competitiveness in the Indian industry set up
the TPM Club in association with the JIPM-S in 1998. “This is a
momentous occasion for CII, as it signifies the culmination of
our efforts to build a quality culture in India with the
valuable support from Japan Institute of Plant Maintenance”,
said Head Manufacturing Services, CII.
Mukesh Ambani to be world's richest Indian
Mukesh Ambani, Chairman and Managing Director of Reliance
Industries Limited (RIL), is on his way to becoming the richest
Indian in the world, overtaking Lakshmi Niwas Mittal, CEO and MD
of Arcelor Mittal. After the proposed preferential issue of
equity shares to promoters, Ambani will control 54.8 per cent of
the equity holding in RIL, India’s largest private sector
company.
GDP at 8.6 per cent in third quarter
Indian economy continued to grow at a rapid pace of 8.6 per cent
in the third quarter of the current financial year, led by the
manufacturing and services sector. The 8.6 per cent expansion
during October-December 2006-07 followed the growth of 8.9 per
cent and 9.2 per cent in the first and second quarters of this
fiscal, taking the average growth so far this year to just below
nine per cent.
Semiconductor policy aims at US$ 10 billion investment
In
a move that is perceived as a partial victory for the high-tech
manufacturing sector in India and expected to attract
investments of over $10 billion, besides generating employment,
the central government has announced a host of incentives in its
much-awaited semiconductor policy, to buy the semiconductor
ecosystem. The government will bear 20 per cent of the capital
expenditure in the first 10 years if a unit is located inside
Special Economic Zones (SEZs) and 25 per cent in case of other
units. The countervailing duty (CVD) on capital goods would also
be exempted in case of units outside SEZs. For semiconductor
manufacturing (wafer fabs) plants, the threshold Net Present
Value (NPV) of investments would be Rs 25,000 million and the
NPV of investments for manufacturing other products would be Rs
10,000 million. Assuming the projects have a 1:1 debt to equity
ratio, the government is likely to restrict its participation to
around 26 per cent of the equity. The remaining “will be in the
form of interest-free loans, tax subsidies, and concessions,”
according to Union Minister for IT and Communications, who
announced the semiconductor policy.
India
adds more to StanChart's kitty
India Inc’s drive for overseas mergers and acquisitions (M&As)
has had its rub-on effects on the profits of global banks in
India. A sharp rise in profit in corporate banking led by
corporate advisory and corporate finance has helped Standard
Chartered Bank's Indian operations to report a 69% rise in
profit for the calendar year 2006 to $403 million. The bank had
reported profit before tax of $238 million in 2005.
Incidentally, the profits from the Indian operations in 2006
jumped to 12.68% of the group profits as against 8.8% in the
previous year. India is the third largest generator of profits
for the British Bank after Hong Kong ($888 million) and Korea
($454 million). Standard Chartered reported a 19% growth in
profit before taxation to $3.17 billion from $2.68 billion in
2005. StanChart is the only foreign bank in India whose Indian
operations contribute substantially to the global operations.
FDI inflows increase 6-fold at US$ 2.04 billion
India witnessed a nearly six-fold increase in Foreign Direct
Investment (FDI) inflows in December 2006 at 2.04 billion
dollars as against 350 million dollars in the same month in
2005. "This is the highest ever FDI inflow into the country in
a single month," Commerce and Industry Minister said in a
statement. Total FDI inflows for April-December 2006 stood at
9.3 billion dollars, as compared to 3.5 billion dollars in the
corresponding period last fiscal. India is likely to receive
12 billion dollars of FDI during the current financial year as
compared to 5.5 billion dollars in the previous fiscal, he said.
Hyundai plans to set up LCV plant at Pune
Hyundai Motor Corporation, Korea, plans to set up a light
commercial vehicle (LCV) manufacturing plant in India. The
company is understood to have chosen Chakan in Pune as the
location for the new plant. According to sources close to the
development, Maharashtra Industrial Development Corporation has
agreed to allot about 700 acres to the Korean company for its
new plant in India. An MoU between the company and the State
Government is expected to be signed soon.
US GlobalLogic to invest US$ 50 million in India
US-based outsourced product development firm GlobalLogic will
invest $50 million in India in the next year and is looking to
acquire small and midsized companies, to expand its presence.
The company is also targeting $100 million in revenue globally
in the coming fiscal, with India contributing 15-20 per cent
from 9 per cent currently, GlobalLogic, Director Marketing, told
media. "We will also ramp our Indian headcount to about 3500 in
the next two years from currently over 1500," he added. "The
company will invest $50 million in India in the next year. Our
focus will be on inorganic growth through mergers and
acquisitions and we are already in talks with various companies
regarding this," he said.
Foreign airlines may ply Indian skies
The
government may finally allow foreign airlines to acquire up to
26% stake in domestic passenger airlines. The foreign direct
investment limit in domestic carriers might also be hiked to 74%
from 49% now. According to government functionaries, the Civil
Aviation Ministry has mooted a proposal to this effect. They
said the move had the backing of the Finance and the Commerce &
Industry Ministries. Civil aviation Minister had recently
indicated that foreign airlines might be allowed in domestic
cargo operations.
Lehman sees GDP growth at 10 per cent in '07-08
India's economic growth rate will touch nearly 10 per cent in
the next fiscal year ending in March 2008, driven by robust
investments and exports, a senior Lehman Brothers economist
said. "You have got rising incomes, very strong credit growth
still, positive wealth and confidence effects from the high
asset prices, that is countering what is happening on the
monetary policy front," Lehman's Chief Economist for Asia,
excluding Japan, said in an interview this week. The US
investment bank forecasts the Indian economy to grow at 9.9 per
cent in the fiscal year that starts on April 1.
FDI in telecom raised to 74 per cent
In
a move that could bolster investment in the fast growing telecom
sector the government decided to raise Foreign Direct
Investment up to 74 per cent, up from prevailing ceiling of 49
per cent. Along with raising the FDI limit, the Union Cabinet
also approved revised conditions for such direct investment,
Information and Broadcasting Minister said after a meeting of
the Cabinet, Chaired by Prime Minister.
Industrial production up 10.9 per cent
Production at factories, utilities and mines increased 10.9 per
cent from a year earlier, following December’s revised 12.5 per
cent gain, the Central Statistical Organisation said in New
Delhi. Analysts expected a rise of 10.1 per cent. “The
production data suggests consumer demand continues to be
strong,”’ said, an Economist at the Institute of Economic Growth
in New Delhi. “The central bank may have to raise borrowing
costs to remove excess monetary accommodation.”
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India
seventh largest steel producer in the world
International Iron and Steel Institute (IISI) has ranked India
as the seventh largest steel producer in the world with an
overall production of about 40 million tonnes in 2006, Lok Sabha
was informed. Replying to a written question, Minister of State
for Steel informed the House that India's ranking in terms of
annual steel production increased from ninth in 2004 to seventh
in 2006. He said the government is not taking any direct steps
to push India's global ranking but considering the importance of
the sector, it is aiming at achieving production level of 110
million tonnes by 2019-20.
IBM to invest US$ 6 billion in India by 2009
US
technology giant IBM said it will invest six billion dollars in
India by 2009. "We have invested two billion dollars (in the
last three years). We will spend six billion dollars by 2009,"
the IBM President of Asia Pacific, told Prime Minister Manmohan
Singh during a roundtable organised by The Economist magazine.
DP World to invest US$ 2 billion in India
Global container terminal operator DP World plans to invest
about $2 billion in Indian operations, top company officials
said. DP World operates five container terminals in India. "Port
investment is crucial for growth of industries," DP World Senior
Vice President and Managing Director told media. Pointing out
the significance of investment in ports, gives the example of
Chennai container terminal that is being maintained by DP World.
"Before we took over, the terminal was witnessing a growth rate
of 9 per cent per annum. But now it is clocking 22-23 per cent,"
he said. Besides Chennai, the company handles container
terminals at Kochi, Mundhra, JNPT and Vishakapatnam. The
terminals at Kochi and Vishakapatnam are DP World's while
Mundhra, JNPT and Chennai's container terminal came under the
company after its acquisition of P&O last year.
Made-in-India BMWs
The
India-assembled high-end BMW cars are set to formally roll out
at the company’s assembly facility near Chennai, when the
plant’s operations are officially inaugurated. It will initially
roll out the BMW 3 series from the new assembly plant in
Chennai. BMW’s plant has come up in Mahindra Global City, about
40 km south off Chennai. The company has initially invested
close to $26 million in the plant, which will be used to
assemble completely knocked down (CKD) kits, imported from
Europe. It is expected to provide direct employment to about 200
people.
Fiscal Statement 2007-08
Even as Finance Minister tabled the Union Budget for 2007-08 in
the Lok Sabha, news trickled in about the Indian economy having
grown at 8.6 per cent in the third quarter of the current
financial year. This year's Budget, which stresses on the farm
sector, announced a number of proposals to perk up agriculture.
The Government plans to bring in five million farmers into the
banking system during the present fiscal year. Prime Minister
said the prime focus of the recent budget was on education and
healthcare, as he reaffirmed his Government's commitment on
increasing spending on the social infrastructure.
Highlights:
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Manufacturing growth rate estimated at 11.3 per cent.
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9.2 per
cent GDP growth rate estimated in 2006-07. Average growth
for last three years is 8.6 per cent.
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Saving
rate of 32.4 per cent, investment rate of 33.8 per cent will
continue.
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Average
inflation in FY '07 to be 5.2-5.4 per cent; confident of
managing inflation, says Finance Minister P Chidambaram.
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Bank
credit rate grew by 29 per cent during first ten months of
2006-07.
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Inflation during 2006-07 estimated at between 5.2 and 5.4
per cent against 4.4 per cent during the previous year.
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A number
of proposals to perk up agriculture to be announced.
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Additional irrigation potential of 24,00,000 hectares to be
implemented, including 900,000 hectares under Accelerated
Irrigation Benefit Programme.
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Economy
in a stronger position than ever before.
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15,054
villages have been covered under rural telephony and efforts
to be made to complete the target of covering 20,000
villages by 2006-07.
Eco Survey: Industry logs impressive growth
The
Economic Survey 2006-07 has lauded the impressive growth of the
industrial sector propelled by robust growth in the
manufacturing sector, which has continued unabated during the
current year so far. Year-on-year industrial growth of 10.6% in
the first nine months of 2006-07 was the highest recorded since
1995-96. In seven of the eight months of the current year, the
year-on-year growth of the manufacturing sector was in double
digits. The survey feels that the lower contribution of industry
to GDP growth relative to services in recent years does not
adequately capture the signs of industrial resurgence. The
growth of industrial sector, from a low of 2.7% in 2001-02
revived to 7.1% and 7.4% in 2002-03 and 2003-04, respectively,
and after accelerating to over 9.5% in the next two years,
touched 10% in 2006-07. Since 1951-52, industry has never
consistently grown at over 7% per year for more than three years
in a row before 2004-05.
IIP grows 11.1 per cent; manufacturing up 11.9 per cent
The
Index of Industrial Production (IIP) in December 2006 went up
11.1% over the corresponding month of the previous year,
according to the latest data released by the government.
Manufacturing sector, which has an almost 80% weightage in the
Index, went up by 11.9%. With this, the overall IIP has between
April-December 2006 grown by 10.8% over the previous year, when
8% rate of growth was recorded during this period last year.
Addressing reporters, Commerce and Industry Minister said "the
government is expecting this rate of growth is further enhanced
in the last quarter of the year, so that during the entire
financial year, i.e. 2006-07, the growth rate of industry can
touch 11% and the manufacturing rate of growth go beyond 12%".
Domestic savings continue to rise
India can boast of being among the top nations in terms of
savings, which shot up to 32.4 per cent of GDP. The quantum of
savings gave the nation a much needed platform to raise the
investment level, which touched 33.8 per cent, a fact that
helped the economy to "take off from a phase of moderate growth
to a new phase of high growth", the Economic Survey presented in
Parliament said. Public sector contributed Rs 7,12,620 million
in 2005-06 due to higher savings of both non-departmental as
well as departmental enterprises, the Survey said. A dramatic
element in the savings profile of the Indian economy has been
the sharp rise in the savings rate of the private sector for
four years in a row. The private sector rate for 2005-06 has
been pegged at 8.1 per cent, the Survey pointed out.
Aircel to invest US$ 400 million for expansion
Cellular service provider Aircel will embark on an over
$400-million pan-India network expansion to double its
subscriber base of 5 million over 18-24 months. Announcing
Aircel’s successful test trials for 3G technology in Chennai,
Group Chief Executive Officer, Aircel, said the company was
hoping to invest over $400 million in rolling out its services
in other regions of the country in the next couple of years. The
company has a presence in nine telecom circles, and has obtained
licences to launch services in the remaining 14 circles of the
country. Last year, the company invested close to $300 million
in expanding its network, he added. The company’s subscriber
base has just crossed the 5 million mark, he said.
Informatica to expand India operations
Informatica, the $325-million data integration software products
company, is looking to grow its customer support services
business in India, in Bangalore. Handling around one-third of
its customer support services work from Bangalore, Informatica
will be expanding its team not only to handle such activity in
India, but for the Asia-Pacific region as well. CEO,
Informatica, said that the Bangalore centre is one of the
fastest growing and the largest centres outside its headquarters
in the US. Informatica launched its India operations in
Bangalore in 2003 and currently has around 150 people engaged in
R&D, customer support services and sales and marketing. Its
investment in India started with a few million dollars in 2003
and has been doubling every year with the cumulative figure now
standing at $20 million.
Italian companies in India: Fiat India
Fiat was amongst the first foreign automobiles companies to
enter the Indian market. It began selling its vehicles in India
in 1905 through a sales agency - Bombay Motor Cars Agency. In
1959 Fiat entered into a license agreement with the Indian
automobile company, Premier Automobiles Limited (PAL).The
agreement involved the license production of the Fiat 500 and
later the Fiat 1100.Though this agreement expired in 1972, the
model continued to be built in India under the brand name
Premier Padmini. In 1981 Fiat signed its second technology
agreement with PAL, which further strengthened the relations
between the two partners. In the 1990s, with India's market
opening up for foreign investment, Fiat identified a huge
potential in the Indian car market. In 1995 it announced its
'World Car Project' that was specifically designed for emerging
markets and included India as a production hub. Against the
background of its longstanding connection with PAL and its World
Car Project, Fiat opted for a two-pronged entry into the Indian
car market. It entered into a technical collaboration with PAL
in 1996 for the import and assembly of the Fiat Uno from
completely-knocked-down (CKD) kits.The Fiat Uno assembly was
conferred to PAL and established at PAL's manufacturing site in
Kurla in Mumbai (Maharashtra). Simultaneously, Fiat set up its
wholly owned greenfield plant for the production of its World
Car model range. To realise this project, Fiat founded a new
subsidiary, Fiat India Auto Limited (FIAL), and bought a factory
site in Ranjangaon near Pune (Maharashtra).The project entailed
manufacture of 100,000 cars beginning by end of 1999.
SonicWALL to start R&D centre in India
The
Sunnyvale-headquartered $175 million Nasdaq-listed firm with
sales and support offices in Bangalore, New Delhi and Mumbai has
announced that it will spend at least 78 per cent of its capital
expenditure earmarked for the 2007-08 in India. Unified threat
management (UTM) is a term used to describe network firewalls
that have many features in one box, including junk e-mail
filtering, anti-virus capability, intrusion detection (or
prevention) system and World Wide Web content filtering, along
with the traditional activities of a firewall. According to a
recent IDC report, SonicWALL has a 24.8 per cent market share.
Matt Medeiros, President and CEO of the company, told Business
Standard that the R&D centre, to be located in Pune, would be
operational by the end of April this year. Initially, the
company is planning to hire 150 engineers for the centre which
will also function as a technical support centre of the company
for its Indian and global customers. |