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INDIA NEWSLETTER Section

Published by the Embassy of India, Vienna Year 2 | Issue 14 | February 2012

Embassy opens its B usiness Centre & library For Upcoming Activities, see Last Page Indian Engineering Design & D evelopment Industry Page 11 India-Austria Newsletter | 1


News

News of interest Snapshot of January Highllights 

FOREIGN TRADE

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India’s exports for the month of AprilDecember 2011 have registered a growth of 25.8%, at US $ 217.6 billion. During the period April—December 2011, the imports were US $ 350.9 billion with a growth of 30.4% and a Balance of Trade stood at US $ (-)133.3 billion, during the same period. India’s exports in December 2011 were US $ 25 billion and imports stood at US $ 37.8 bn Balance of trade for the month of December 2011 stood at (-) 12.8 billion US $. 

FOREIGN INVESTMENT

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The Government has announced a new scheme under which a foreign individual, a foreign pension fund or even a foreign trust will be able to invest directly in the Indian equity market. These investors will be called ‘Qualified Foreign Investors’ (QFIs). “This has been done in order to widen the class of investors, attract more foreign funds, reduce market volatility and deepen the Indian capital market,” a Finance Ministry statement said. The investors are already allowed direct access to Indian mutual fund schemes. The latest decision is the next logical step in the direction, the statement added. At present, foreign institutional investors (FIIs) or foreigners, through sub-accounts with registered FIIs, can invest in the equity market. Unregistered foreign individuals and institutions invest through participatory notes (PNs). Now, this trend will change.

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The Chief Executive Officer of the IKEA Group, Mr Mikael Ohlsson, has met the Commerce, Industry and Textiles Minister, Mr Anand Sharma in Paris and conveyed that India is an important market and his company would like to be involved in strengthening of SMEs in India. The development comes even as some multinational companies had expressed concern about the 30 per cent local sourcing clause for 100 per cent foreign direct investment in single brand retail. However, the Government had ruled out going back on this clause. Mr Ohlsson congratulated Mr Sharma for the decision to allow 100 per cent FDI in single brand retail, the statement said.He informed that he will soon travel to India to meet concerned officials and stakeholders. 

MERGERS & ACQUISITIONS

2 | India-Austria Newsletter

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Pune-based Sudarshan Chemical Industries has bought the natural mica pearlescent business from Eckart Effect Pigments, a division of Altana AG, a €1.5 billion German speciality chemicals group. The buy comprises Eckart’s brands Prestige and Flonac - C, produced at its plant in Pori, Finland. These pigments are used in the cosmetics business.

ply constraint at our end which compels us to keep the annual plan unchanged at $2 billion,” Nag said on at an Indian Chamber of Commerce event in the city. India is a founding member of ADB and its fifth largest shareholder. MANUFACTURING

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The €110 million Sudarshan, a speciality chemicals maker with a plant at Roha, Konkan, on Maharashtra’s coastal strip, will add the new pearlescent product lines to their existing pearlescent pigment portfolio sold under the Sumicos brand name. Sudarshan has acquired only the brands and some critical assets which it will ship to India.

Manufacturing activity climbed to a sixmonth high in December as new orders rose, reinforcing signs of industrial revival. The HSBC Markit India Manufacturing Purchasing Managers’ Index rose to 54.2 from 51.0 in November, the highest level since June and the sharpest monthly rise since April 2009. A reading below 50 indicates contraction. It was 52 in October and 50.4 in September.

Mitsubishi Electric Corporation has announced its acquisition of the Messung Group, a Pune-based manufacturer of programmable logic controllers (PLCs) and human machine interfaces (HMIs), its sales and distribution partner in India, for an unspecified amount.The acquisition will allow Mitsubishi Electric to accelerate its industrial automation systems business in India and strengthen local sales and solutions.

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he Aditya Birla group intends to invest $500 million over the next five years to set up a viscose staple fibre plant in Turkey.

JOINT VENTURES

The Aditya Birla Group has over 21 per cent market share in the global VSF space.

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The world’s biggest coffee chain is finally in India. A year after Seattle-headquartered Starbucks Coffee Company entered into an agreement with Tata Coffee Ltd to source and roast coffee arabica beans in India, it has formed a joint venture (JV) with Tata Global Beverages (TGB), the parent of Tata Coffee, to roll out its cafes nationwide. As part of the agreement signed today, the two companies will form an equal JV, Tata Starbucks Ltd. 

INFRASTRUCTURE

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Asian Development Bank said it plans to investment about $2 billion every year in India’s infrastructure space between 2012 and 2014 although the country demands much more than this. ADB has kept its annual infrastructure financing for India unchanged as its faces fund constraints, its managing director general Rajat Nag said. The Manila-based institution had invested about $2 billion each in 2010 and 2011. The country will need about $1 trillion investment during the 12th Five Year Plan (2012-2017). “The size of our investment plan for India is not a reflection of the demand, neither it is a reflection of its performance. It is the sup-

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“For us in the Aditya Birla Group, VSF is a core business. Our aspiration is to significantly ramp up our global market share and our capacities by the turn of the decade. Establishing a world-class plant in Turkey is a step in this direction,” said Mr Kumar Mangalam Birla, Chairman of the group.

AUTOMOTIVE

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German luxury car maker MercedesBenz, facing competitive heat in India from compatriots BMW and Volkswagen, is looking at investing €150 million to enhance capacity and increase sales here 10-fold by the decade’s end. Debashis Mitra, director (sales & marketing), Mercedes-Benz India Ltd (MBIL), said: “We want to grow our sales over three-fold to 25,000 units by 2016 and to 90,000 units by the end of the decade. To this effect, we are looking at introducing two volume-driving models in the Indian market every year. While the B Class hatchback will come in by the end of 2012, the A Class compact car would follow next year. The GLC, a premium SUV, will hit the roads sometime in 2014.”

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Swedish truck maker Scania will be investing €23 million this year to set up a plant in Bangalore. This plant will serve as a completely-knocked down (CKD) assembly unit for truck and bus chassis during phase 1 of operations. “This investment furthers Scania’s committed to the Indian market and this is the right moment for us. With the com-


News mercial vehicles segment likely to register a higher volume growth of 8-10 per cent this year, the outlook for the industry is very promising,” Henrik Fagrenius, managing director of Scania, said. 

ENERGY

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Union Minister of Power, Shri Sushilkumar Shinde has called for strengthening research and development in power generation, transmission and distribution sectors. He was addressing the delegates of the India Energy Congress 2012 in New Delhi.

Shri Shinde said that while the country has made remarkable progress in the power sector during the 11th Plan, a lot more still has to be done. He said that during the 11th Plan period the country has added about two-and-a-half times of the capacity that was added during the 10th Plan period. He said that 80,000 MW capacity is under construction for the 12th Plan. Emphasising on the need of energy conservation through efficiency improvement, the Minister reiterated India’s commitment to cheaper, sustainable and clean power. He said that through various initiatives such as star labelling of products, the achievement in the avoided generation capacity during the 11th Plan will be over 10,000 MW.

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Diversified Adani Group announced the commissioning of India’s largest 40 mw solar power plant in Kutch district Gujarat. For India’s largest private thermal power producer, the Solar Power Plant marks Adani’s first big foray in the renewable energy sector. Going forward, Adani Group is planning to expand the capacity of this plant to 100 mw. The group is claiming to have commissioned country’s largest solar power plant in record time of 150 days starting from foundation stone laying to electricity generation.

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Mahindra Solar One, a joint venture between the Mahindra Group and Kiran Energy, plans to invest €150 million in solar power generation to build a capacity of 100 megawatts over the next two years, continuing the trend of large business houses investing heavily in the sector. “Our target is to be among the top three players in the solar industry in the next five years,” Anand Mahindra, vice-chairman and managing director, Mahindra & Mahindra, told ET.

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Siemens Ltd said it will manufacture low and medium voltage energy automation products at two greenfield facilities in Goa. The factories, set up at an investment

of €30 million, will produce a range of products for power distribution, power plants and infrastructure projects, a company statement said. 

WEALTH MANAGEMENT

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With rapid increase of high net worth individuals (HNWI), India has emerged as an attractive market for wealth management. The latest entrant is Ameriprise , the largest financial planning company of the US. The 117-year old company has a client base of over 2 million in US. At present, the company manages assets of over $600 billion through its mutual funds and life insurance companies in US and Europe. However , in India, it will start operation with financial planning for individuals having annual income of over Rs 20 lakh. 

INTERNATIONAL

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Hungary is keen on investments from India in the automobile sector, particularly auto components. Addressing the members of the Southern India Chamber of Commerce and Industry, Mr Janos Terenyi, Ambassador of Hungary in India, said there are huge capacities in his country that were supplying components to bus and truck manufacturing companies in the erstwhile Soviet bloc. The country now needs investments to revive those units, he said. Hungary is an important member of the European Common Market and the European Union, and with its strategic location in the heart of Europe it can provide an important gateway to Europe. Currently, bilateral trade between India and Hungary is estimated at $30 million.

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India and the European Union are to hold its annual summit and Ministerial meetings in New Delhi in February. Addressing a joint meet, the External Affairs Minister, Mr S.M. Krishna, and the Foreign Minister of European Union, Baroness Catherine Ashton, said India and the European Union are to hold annual meeting as well as numerous official level interactions, which provide opportunities, to discuss bilateral issues and provide a robust framework for reviewing global challenges. Mr Krishna said the “European Union is our largest trading partner and a significant source of investment and technology flows into India. We co-operate on a wide range of issues ranging from security, energy, movement of people, culture, education and human rights.” India welcomes the enhanced role of the European Union on the world stage. Both India and the EU have important

roles to play in the international arena. Keeping this in mind, we also exchanged views on various regional and global issues of common interest, he added. Baroness Catherine Ashton said the 28-member states in the EU intend to collaborate and co-operate in the area of IT, science and technology.

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India has signed an international agreement that could be an effective tool to help it combat tax avoidance and evasion. This agreement — Multilateral Convention on Mutual Administrative Assistance in Tax Matters — is being seen as the ‘gold standard’ for co-operation in tax administration. This pact was signed at the OECD headquarters in Paris by Mr Sanjay Mishra, Joint Secretary, Central Board of Direct Taxes, in the presence of the OECD Deputy Secretary-General, Mr Rintaro Tamakio. Mr Jeffrey Owens, Director of the OECD Centre for Tax policy and Administration, said India had moved very quickly since its commitment to the convention at the November G20 meet in Cannes. “I expect that India will be the first non-OECD G20 country where the updated Convention is in force,” he said in a statement. The multilateral convention covers all taxes (direct and indirect), all forms of exchange of information and provides for assistance not just in tax assessment but also in the actual collection. 

TOURISM

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With Indian tourists among the biggest spenders in Switzerland, the Swiss Tourism is pulling out all the stops to promote the land of mountains, glaciers and rivers to potential tourists. A team of 22 officials was in Chennai to promote Switzerland as a destination of choice among the travel agents, who in turn will take the message to the potential travellers. On an average, an Indian spends Swiss Franc 350, including on hotels and restaurants, while it was Swiss Franc 200 among other nationals, Ms Ritu Sharma, Deputy Director and Media Manager, India, Switzerland Tourism, which promotes Switzerland as a holiday and travel destination. Switzerland continues to be a major attraction for Indians, especially with a number of films shot in that country. Last year, nearly 450 thousand Indians stayed overnight in Switzerland, which was nearly 100 per cent growth when compared with the previous year. This year, the target is to grow the overnight stay by Indians by nearly 20 per cent. India-Austria Newsletter | 3


News

INDIA-AUSTRIA BILATERAL trade report January-October Report INDIA’S EXPORT TO AUSTRIA

INDIA’AS IMPORT FROM AUSTRIA

sitc

ITEM

2010

2011

Change

% of Total

2010

2011

Change

% of Total

5

Chemicals

57447899

55004482

-4.3%

11.39%

59568784

53236150

-10.6%

7.85%

51

Org. chemicals

18320014

8779425

-52.1%

1.82%

29135544

24128926

-17.2%

3.56%

54

Med. & pharm. prod.

31324384

37725250

20.4%

7.81%

11522956

10039979

-12.9%

1.48%

6

Manufact. goods

68370519

90629882

32.6%

18.77%

131532976

218971146

66.5%

32.29%

65

Textile yarn, fabrics

32087868

40047964

24.8%

8.29%

3328010

3803232

14.3%

0.56%

66

N-metal. minerals

14433066

17797964

23.3%

3.69%

30352012

33253214

9.6%

4.90%

67

Iron and steel

3945205

7409712

87.8%

1.53%

57866174

129435507

123.7%

19.09%

69

Manuf. of metals

10848660

15775698

45.4%

3.27%

17140730

31120286

81.6%

4.59%

7

Mach.& trans. equip.

108105838

128230386

18.6%

26.55%

250075476

313514153

25.4%

46.23%

71

Power gen machinery

7703875

12906970

67.5%

2.67%

31864836

47952331

50.5%

7.07%

74

Gen.ind. machinery

15829043

21111330

33.4%

4.37%

53980584

62087765

15.0%

9.16%

77

Elec. machinery

31043954

40081971

29.1%

8.30%

46169360

63274268

37.0%

9.33%

78

Road vehicles

43185954

45361206

5.0%

9.39%

9064476

7566525

-16.5%

1.12%

8

Misc. manuf. articles

155098544

181301805

16.9%

37.54%

46453382

65237081

40.4%

9.62%

84

Appar. & cloth. Acces.

93380243

107282253

14.9%

22.21%

149322

152823

2.3%

0.02%

85

Footwear

36124353

47958532

32.8%

9.93%

13241

58017

338.2%

0.01%

87

Sci & control. instrum.

1841073

2870028

55.9%

0.59%

23387681

36076208

54.3%

5.32%

89

Misc. man.articles,

11098822

7733680

-30.3%

1.60%

19351785

25441034

31.5%

3.75%

TOTAL

412546173

482968536

17.1%

509131553

678098256

33.2%

F

or the period January-October 2011, India’s exports to Austria increased by 17.1% to €482.96 million while imports rose by 33.2% to €678.09 million. Both marks represent a significant jump after crisis-year 2009. India’s Export to Austria. The positive export trend is being strongly pushed by increase in exports of ‘Textiles’, ‘Apparels and clothing accessories’ and ‘Footwear’, all of which account for more than 40% of India’s total exports to Austria. ‘Machinery and Equipment’ starts to see an accelerated rise in exports of ‘Power Generating Machinery’, while it still accounts for only 2.7% of total exports, though. ‘Electri-

cal Machinery’, with advance by 29% and ‘Road Vehicles’ by 5%, are the main contributors to this group. The exports of ‘Chemicals’, which now accounts for approximately 11.4% of total exports (Jan-Oct 2010:14.7%) continues to mark a decrease, this time by -4.3%, which now clearly indicates considerable changes in the market. Indian exports to Austria from January to October 2011 has statistically already met its 2010 mark. India’s Import from Austria. On the imports side, the jump has been even higher, recording 33.2% increase in comparison to last year’s same period. The results indicate considerable recovery in comparison to last

two year’s figures. ‘Machinery and Transport Equipment’ remains the most relevant group of Indian Imports from Austria as it represents about 46% of total imports. This mark is strongly supported by high development in the ‘Power Generating Equipment’(+50%) and ‘Electrical Machinery’(+37%). Worth highlighting is the jump on imports of Manufactured Goods, mainly represented by a steep increase in imports of Iron and Steel by 123%, which now accounts for a fifth of total imports. Like in exports, ‘Chemicals’ is also on decline by -10.6% on the imports side, and now accounts for only 7.8% of total imports (2010:11.5%).

INDIA-AUSTRIA BILATERAL NEWS Latest India-Austria-related Headlines Gebauer & Griller to expand production line in India

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n 2010, Gebauer & Griller, leading manufacturers of electric cables and cable harnesses established their own subsidiary in India by the name of GG Cables and Wires India Pvt. Ltd. The company was incorporated to supply flat travelling cables and cable harnesses to the Indian elevator and escalator 4 | India-Austria Newsletter

market. A 40,000 ft² plant was established and is located on Chandapura-Anekal Road in Bangalore. Several members of the team were trained in the Austrian and Czech plants for a transfer of product and process knowledge to safeguard the supply to the Indian market with products in GG quality standards and service level. By now GG India’s manpower strength is about 60 people

and the company is supplying to customers like Otis Elevator Company, KONE Elevator India and Johnson Lifts and Escalators as well as several other Indian elevator suppliers. The next step in the expansion in the Indian business is the setup of production lines for tinned ribbon wires for the production of photovoltaic modules. The lines are currently being installed at the Bangalore plant. The


News/Interview production team is now undergoing training at the plant in Linz. Start of production on these lines is planned for February 2012. Efkon India wins prestigious orders

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FKON India, part of the Austrian EFKON GROUP (STRABAG subsidiary), one of the worldwide leading companies in intelligent transportation and tolling solutions, has received four prestigious orders in the field of tolling and Intelligent Transportation Solutions (ITS) of approx. € 6.5 million (INR 430 million) in total. This is one of the largest contract until date in the Indian toll industry Austrian KTM´s co-owner Bajaj reveals new low-cost 4-wheeler

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ndia’s second-largest motorbike manufacturer Bajaj Auto Ltd and co-owner of Austrian KTM unveiled its long-awaited com-

pact passenger vehicle RE60. The company, however, insisted it was not a car and was intended as a step forward for three-wheeler. Powered by a pudgy 200cc engine that belts out around 20bhp power, the RE60 is the smallest four-wheeler ever built. Boasting of an eye-popping fuel economy of 35 kmpl, it is also environment friendly with a CO2 emission of 60 gm per kilometer, the lowest in a four wheeler anywhere in the world. Joint Venture of Global Hydroenergy and Boom Systems Pvt. Ltd.

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joint venture contract was signed by the Austrian company Global HYDROENERGY and Messrs. Boom Systems Pvt. Ltd. in the field of turnkey water-to-wire solutions for small hydro power plants. Global HYDROENERGY will provide R&D, engineering and project design, the manufacturing of

electromechanical components will be done in India and Asia. Peguform Group now 80% Indian

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ustria’s CROSS Industries AG announces that the closing of the majority stake

sale of the Peguform Group companies to the Indian Samvardhana Motherson Group was completed successfully. There were no objections by the cartel authorities. As of now the Indian Samvardhana Motherson Group holds 80% of shares in the Peguform Group. CROSS Industries AG further holds only 20% of the shares. In addition, the sale of 50% of shares in the Wethje Group to the new partner was concluded simultaneously.

Q&A: ALAN MULALLY, PRESIDENT & CHIEF EXECUTIVE AT FORD MOTOR CO. Business Interview

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ooking at the success of its small car, the Figo, and the recently launched midsegment sedan, Fiesta, Alan Mulally, president and chief executive at Ford Motor Company, is keener than ever to increase the product offering in India in the coming year. This will be complete with a series of new engines with alternative technology and even electric drivetrains. He spoke to Swaraj Baggonkar on future plans. Q: What is the product range you have lined up for India? A: We showcased the EcoSport, our compact sports utility vehicle, here today. This will be launched in the Indian market soon. Prior to this, we had launched the global Fiesta in the middle of last year. This is part of the plan to launch eight new products in the Indian market. I think the Asia-Pacific, especially India and China, will be very important markets and that’s why we are going to be here with the best products in the industry. Q: When are you going to launch the EcoSport in India and what will be the pricing? A: We are going to make an announcement about the launch in the next few months, but clearly it will be towards the end of the year. The car will be made in India and, hence ,would be cost-competitive We can comfortably speak about its pricing at the time of the launch. Q: Where does India stand in terms of Ford’s global plans?

A: India has become very important in our global plans. We have 10,000 employees and this number is only going to grow over the next few years ,when we have our new plant (at Sanand, Gujarat) on stream.

sure we have the right kind of product that people want to drive.

Q: What products are going to come out and what price points to complement your existing range?

A: We do not give area-wise break up of our performance but we look at it as the Americas, Europe and Asia-Pacific. The worldwide automobile industry is growing at five per cent and the demand is being led by Asia-Pacific, especially India and China.

A: Ford globally has a family of large cars and SUVs and, hence ,more of such vehicles will be available to Indian consumers in the time to come. We believed the Figo, Fiesta, Eco Sport and Endeavor are suited for this market and are moving forward, and we will continue to evaluate what fits best for the Indian market. Q: What engine options you will offer to India at later stages? A:  We have nothing specific to announce today but clearly, our core strategy is to provide engines that people want. So, you will get to see different petrol engines, ecoboost engines, a variety of diesel engines and also all electric engines. Over time you will see more electric cars like hybrids, plug-in hybrids. We will see a combination of all of this. Q: Could there be a product below the Figo in India in the coming period? A:  We have nothing concrete to announce now, but we continue to look at all the market segments. The good thing about the EcoSport and Fiesta is that they are absolutely at the centre of the market, not only in India but also in China. We should make

Q: What kind of significance does India hold vis-a-vis the international market?

Q: How do you look at the India-EU free trade agreement? A: Our strategy on where we operate, which was established by Henry Ford (founder), is to have a market in each country around the globe. We believe in free trade and are encouraged by the developments governments are making around the world. We believe the market should have the power to determine the currency and exchange, we are very supportive of rule-based trade and we are going to see more and more free trade agreements. Q: How are the developments in Europe impacting you and your global plans? A: The sovereign debt crisis is a concern for all of us, and I am very pleased that the governments are making attempts to resolve this crisis. Our strategy operates on the plans we have put in motion for each country, which works independently. So far, we have not made any change to our global plans because of the financial crisis. India-Austria Newsletter | 5


News

100% fdi in single-brand retail An overview

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he Department of Industrial Policy & Promotion, Ministry of Commerce & Industry, Government of India has... formally removed the restrictions on foreign investment in single-brand retail sector by allowing 100 per cent Foreign Direct Investments (FDI) in this sector. However, it has put on hold the proposal for allowing up to 51 per cent FDI in multi-brand retail. The Department of Industrial Policy & Promotion, Ministry of Commerce & Industry, Government of India has, vide its Press Note 1 (2012 Series) dated 10th January, 2012, formally removed the restrictions on foreign investment in single-brand retail sector by allowing 100 per cent Foreign Direct Investments (FDI) in this sector. However, the Government has put on hold the proposal for allowing up to 51 per cent FDI in multi-brand retail.

PRESENT SCENARIO Single-brand retailers are permitted 51 per cent FDI under government approval route. NEW SCENARIO FDI, up to 100 percent, under the government approval route, would be permitted in single brand product retail trading, subject to certain conditions. CONDITIONS Foreign investment norms for single brand retailing would be subject to certain conditions: 1. Products should be sold under the same brand internationally, i.e., products should be sold under the same brand in one or more countries other than India. 2. ‘Single Brand’ product retail trading wouldcover only products which are branded during manufacturing.

3. The foreign investor should be the owner of the brand. 4. Proposals involving FDI beyond 51 per centwould need to ensure mandatory sourcing of at least 30 per cent of the value ofproducts sold, from the domestic small andcottage industries that have an investmentin plant and machinery of maximum USD 1 million (about Rs 5 crore). 5. Any addition to the product/product categories to be sold under ‘Single Brand’ would require fresh approval of the government. COMPLIANCE OF THESE CONDITIONS The compliance of these conditions will be ensured through self-certification by the company, to be subsequently checked by statutory auditors, from the duly certified accounts, which the company will be required to maintain

QUOTE OF THE MONTH “India has a very impressive GDP, huge population, fairly educated work force, and for these reasons there is an influx of international investments into the country” (by David T Kong, Best Western International Inc)

sustainable urban development Opportunities in India for Foreign Companies and Individuals

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ith tree-lined streets, ancient buildings, a vibrant culture and clean environment, Mysore is one of the most aesthetically pleasing cities to live in India. For similar reasons, it is also one of the fastest growing, as IT companies go in search of more satisfying environments to base their operations. Having seen neighbouring Bangalore’s explosive growth, Mysore is trying to build its infrastructure sustainably as it grows. It has several sustainable initiatives, but the city got an unexpected ally to move in an unexpected direction: a British firm looking for opportunities in the low-carbon market. The UK consulting firm Atkins is among the large number of companies around the world now eyeing the $800-billion low-carbon market, which is expected to treble over the next decade. One of its recent inventions is a low-carbon master-planning tool that can be used to reduce the carbon footprint of cities as they develop over time. A lowcarbon city is still an alien concept among 6 | India-Austria Newsletter

municipal administrators in India, but Atkins wanted to catch the smaller cities here at the right time, before they started exploding like one of India’s megapolises. “We wanted to work with some progressive tier-II cities,” says Jitesh Brahmkshatriya, head of environmental planning of Atkins in India. Atkin’s tool helps city administrators see in three dimensions how their cities inch towards disaster over time. It would also show how things would improve with the right kind of early interventions. Atkins had developed the tool in the UK and had used it with cities like Birmingham. Now the company had a financial mechanism to reach out to cities in developing countries: the Prosperity Fund, managed by the UK Foreign and Commonwealth Office, aimed at improving British prosperity by helping them tap low-carbon markets around the world. Atkins reached out to Mysore and Madurai, two supposedly progressive cities in South India.

CITY LIGHTS: MYSORE, MADURAI Mysore Urban Development Corporation (MUDA) was developing neighbourhoods around the city that it wanted to be as sustainable as possible, but those living there weren’t paying enough attention to the concept. So, with the help of Atkins, the city has now adopted a 320 acre neighbourhood with 500 families to start a pilot project. Later, with enough data, the city hopes to expand lowcarbon growth to the rest of the city. “We hope to reduce our electricity consumption by about 10% over the next five years,” says city Municipal Commissioner Kishore Raykar. Madurai hadn’t grown in recent times because of poor infrastructure, and was looking to get back to growth, but in a sustainable way. Atkins has started collecting data about the city it hopes would be incorporated in 20-year master plans that they would make.


News/Interview The tool will help the city administrators to reduce the carbon emissions of their cities as they develop over the next few decades. Reducing carbon emissions of cities is among the top priority of city mayors around the world, and many developed countries have drawn up aggressive plans to make their cities carbon neutral in the next few decades (see table). Few, if at all, Indian city administrators had so far thought of a low-carbon path for their cities in this way. Until they have been prodded by overseas consultants. ECONOMIC COSTS Consider for a moment what is in store for Indian cities in the next two decades, which is the normal duration of a master plan being drawn up now. According to the McKinsey Global Institute, India’s GDP would have grown five times by then and cities would have contributed 70% of this growth. This would mean the existence of 68 cities in 2030 with a population of over one million, compared to 42 today. According to McKinsey, it would also necessitate a capital investment of $1.2 trillion that would go into creating 700-900 million square meters of office and residential space, the paving of 2.5 billion square meters of roads and the construction of 7,400 kilometers of metros and subways (20 times of what was built in the last ten years). Few expect India to achieve all of this, but construction activity even at a smaller scale is environmentally destructive if not practiced with caution. It would also mean an enormous increase of carbon emissions from India at a time when major cities around the world are trying hard to reduce their emissions. And yet the costs of rapid growth are not just environmental. If Indian cities operate at current efficiencies, the economic costs can be too high. “Cities in India perform poorly in terms of energy efficiency compared to western cities,” says Padraic Kelly, CEO of Happold Consulting, a UK-based strategic and management consultancy firm. “Indian cities have low-carbon emissions and so there is also an opportunity to follow a low-carbon approach to development by improving efficiencies.” Kelly has co-founded the Working Group on Sustainable Cities at Harvard University. Since the scope for improvements are high, the Indian low-carbon market is among the fastest growing in the world and is set to develop from $23 billion in 2009 to $135 billion in 2020 (6.1% of the global mar-

ket), according to HSBC Global Research. Energy-efficiency solutions alone will make up $77 billion of this market by then. New technology would go into improving industrial, transport and building efficiencies. India has announced - voluntarily - that it would reduce the emissions intensity of its GDP by 25% within the next decade. Since cities would contribute 70% of the country’s GDP by 2030, they are set to become focus of emission-reduction strategies. So cities are poised to drive the bulk of this growth in lowcarbon market. By this year-end, Energy Conservation Building Codes are likely to be written into the bylaws of municipalities in eight states. City administrators are also beginning to be aware of the potential of a lowcarbon approach to planning due to its economic and social benefits. It is not just Mysore and Madurai that are interested in this opportunity, and it is not just Atkins that is trying to do lowcarbon business with Indian cities. For example, researchers at the Lawrence Berkeley National Laboratory in California, US, have been trying to persuade Indian municipalities to use its city road-mapping tool. So far it has grabbed the attention of Pune and Jaipur. ROAD-MAPPING TOOL: JAIPUR The Berkeley Lab’s road-mapping tool can help forecast energy and water consumption accurately. “Indian municipalities did not know about future patterns of consumption,” says Maithili Iyer, programme manager at Berkeley Lab. “The roadmapping tool tells them about future patterns of consumption.” Both Pune and Jaipur are at the early stages of evaluating low-carbon planning tools; it is difficult to predict how they would use them in the future. But it is an approach that is certain to be adopted in many Indian cities soon. Since the tools help formulate policies, they would also help drive multi-billion dollar market opportunities. Jaipur, for example, is now struggling to manage its growth using conventional approaches. Water supply is at breaking point and growth of city transport has been chaotic. City administrators had earlier tried to use solid waste to generate energy, but the nature of the city traffic made sure that the waste could not be transported efficiently to feed the plant. “A road-mapping tool will combine historic data from the city with trend analysis from other cities,” says Jyotirmay Mathur, associate professor and coordinator, Centre for Energy and Environment at the Malaviya National Institute of Technol-

ogy at Jaipur. “The city officials will then have data to go to the funding agencies.” The theme of sustainability has been attracting IT companies around the world to develop tools and plans for cities around the world. One approach, centering on the concept of smart cities, is to use information technology (IT) to gather, analyse and respond in real time to information from around the city. IBM and Cisco have been the main proponents of this approach, which is also practiced by several other IT companies. Smart city technologies improve efficiencies significantly and are thus an important approach to sustainability, but there are other ways IT could be used to develop sustainable cities. “IT can help manage supply and demand holistically using local resources,” says Chandrakant Patel, Senior Fellow at the Sustainable Ecosystems Research Group at Hewlett Packard Laboratories in California.

LOCAL RESOURCES Using local resources as much as possible would be a recurring theme as Indian cities develop; transporting material over long distances would increase the energy costs. With good IT tools, it would be possible to combine local energy generation with central electricity generation seamlessly. IT tools will also help optimise power consumption. “ICT energy offsets can be 10-20% or even greater,” says Warren Karlenzig, co-founder of the San Francisco-based Common Current, a consulting firm that has helped plan several cities in developing countries, particularly in China. The impact of IT would be substantial when smart grids become a reality around the world. “Smart grids would revolutionise renewable energy,” adds Karlenzig. Mysore, India’s solar city, is a good example of trying to decentralise power generation, but it is still a long way from creating local microgrids and combining them with centralised power generation. This would happen only when smart grids are deployed in India over the next decade. Smart grids would also help fuel a spurt in the adoption of electric vehicles widely in Indian cities, expected to take off in the second half of this decade. HSBC estimates that the hybrid and electric car market will grow to 4 lakh units at a value of $15 billion by 2020. By then the lowcarbon practices would have become truly entrenched in Indian cities. India-Austria Newsletter | 7


Articles

DELHI AIRPORT EMERGES AS THE BEST RETAIL LOCATION FOR LUXURY BRANDS Luxury Industry in India

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an you name the retail location in India from where Swarovski, Marks & Spencer, Samsonite, Hidesign and Kimaya all reported their best sales numbers last calendar? Not Khan Market or Select City Walk Mall in Delhi, not Linking Road or the Phoenix Mall in Mumbai; it’s the Delhi airport. Indira Gandhi International Airport in the capital is the most lucrative retail location in the country, having generated sales of 5,000 per square feet per month in 2011, which is almost four times higher than the second-best location. This figure includes sales from duty-free shops, but regular shops too are buzzing here. “Our ticket size at airport is double in value compared locations elsewhere,” says Ruchita Sharma, marketing operation manager of high-end crystal products maker Swarovski’s consumer goods business. The brand store at the T3 terminal of the Delhi airport ranks among its top stores by sales globally.

Retailers are at a loss to explain why a place meant just for travelling let brands rake in more moolah than most shopping malls and high streets. Many of them are, in fact, surprised. A case in point is high-end fashion house Kimaya, which did not exactly expected hurried travellers to indulge in couture when it opened its outlet in the swanky international terminal in November last. Its promoter Pradeep Hirani says he had turned down offer to open a shop at the airport two times before saying yes the third time. “For us, it was more of exhibitional than commercial.” Not any more. Today, Kimaya’s airport store sales are much higher than its high street outlets at around 3,500 per sq ft every month. And Hirani regrets having opted for a revenue-sharing model-where the retailer pays a percentage of its sales as rental to the airport operator-instead of the high rentals the airport had quoted earlier.

So what makes Delhi airport the most profitable destination for brands? One reason is its sheer size. It is the largest and busiest airport in South Asia. More than 35 million passengers used it last year. It is the fourth largest retail hub in the country with sales of 1,200 crore in 2011 despite being ten times smaller than malls such as Ambience Mall in Gurgaon and Phoenix High Street in Mumbai. “For any retailer, salesper-sq ft is the most important parameter while deciding on setting up their store,” says Susil Dungarwal, chief mall mechanic at Beyond Squarefeet Advisory, a boutique mall consultancy firm. It reflects the profitability of an outlet as the per-square feet cost is comparable in most prime locations in metros. Premium leather accessory brand Hidesign mopped up over 10,000 per sq ft per month on an average against 1,500-6,000 elsewhere, while Samsonite generated sales of 7,200 from the Delhi airport store compared to 1,350 in other stores.

WORLD’S FIRST HYDROGEN-POWERED RICKSHAWS LAUNCHED IN INDIA Innovations from India

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he world’s first fleet of hydrogenfuelled 3-wheelers, or rickshaws, were launched in New Delhi. The 15 vehicles will be refuelled from a station at Delhi’s Pragati Maidan, where the fleet will be operating.

The USD 1 million project took three years to complete, with half of the costs co-funded by the United Nations Industrial Development Organization (UNIDO) International Centre for Hydrogen Energy Technologies (UNIDOICHET) based in Istanbul, Turkey. “The hydrogen-powered rickshaws and the refuelling station were established as part of the DELHY-3W project that aims to demonstrate hydrogen technologies developed by Indian partners for the Indian transport sector,” said UNIDO-ICHET Managing Director, Mustafa Hatipoğlu.   India’s Minister of New and Renewable Energy, Farooq Abdullah, welcomed the event, saying: “Hydrogen holds great promise for a cleaner urban environment. Hydrogen can replace polluting and diminishing fossil fuels with a fuel whose only emission is pure water. If hydrogen is produced from renewable energy sources, then it is the cleanest fuel

8 | India-Austria Newsletter

from well to wheel.” Minister Abdullah expressed hope that “since hydrogen as a fuel and hydrogen energy technologies are new and applied in small numbers their cost is presently higher than conventional fuels and established energy technologies. However, the possible inclusion of hydrogen in the portfolio of alternative transport fuels in India could create the right market conditions for mass production of hydrogen vehicles and refuelling infrastructure, leading to comparable costs and reduced urban pollution in cities like New Delhi as well as in other Asian metropolis that might implement such technologies”. Minister Abdullah also said that the developing world had the potential to play a major role in the transition to a hydrogeninclusive energy future. The Indian Institute of Technology (IITD) was the DELHY-3W project co-ordinator, carrying out exhaustive lab tests on the vehicular engine under varying operating condition and providing the technical expertise to convert the internal combustion engines to run on hydrogen.  Mahindra and Mahindra developed the ve-

hicle with all necessary changes to the engines, safety systems, fuel tanks and fuel lines. Air Products USA acted as project partner and sponsor by providing the hydrogen refueling station and management and technical services. UNIDO’s India regional Office facilitated the realization of the project.  India Trade Promotion Organization (ITPO) is hosting the project and helping disseminate the Indian know-how. The Indian Ministry of New and Renewable Energy has been closely following the project, while both the refuelling facility and hydrogen storage tanks on the vehicles have received all necessary permits and approvals from the Petroleum and Explosives Safety Organization (PESO).


Articles

INDIA’S ECONOMIC GROWTH TO REMAIN ROBUST United Nations Report

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ndia’s economic growth is expected to remain robust in 2012 and 2013, despite likely headwind of double-dip recessions in Europe and the US. This has been highlighted in the World Economic Situation and Prospects 2012, the United Nations’ annual economic report released today.

Indian economy is expected to grow by between 7.7 per cent and 7.9 per cent this year, the report said. South Asia’s economies are expected to grow by 6.7 per cent this year and 6.9 per cent next year, accelerating slightly from 6.5 per cent last year. Robust domestic demand will sustain this increase (in South Asia), but the economic slowdown in

India, where growth declined from 9 per cent in 2010 to about 7.6 per cent last year, brings down the regional average, the report said. South Asia comprises India, Pakistan, Nepal, Iran, Bangladesh and Sri Lanka.

Fiscal Deficit. On fiscal deficit, the report

On Inflation. Among the major developing countries, growth in India and China is expected to remain robust. Brazil and México are expected to suffer a more visible economic slowdown.

12 as lower growth has brought down tax

The UN report expects inflation in most developing countries to decelerate this year, along with an anticipated moderation in global commodity prices and lower global growth.

and 2013, the report noted that the world

said that the Indian Government is unlikely to achieve its fiscal deficit target of 4.7 per cent of the gross domestic product for 2011revenues and disinvestment in state-owned entities has been put on hold. On the global economic prospects for 2012 economy is on the brink of another major downturn and anaemic growth is expected during 2012 and 2013.

INDIA TO HAVE OWN SYSTEM TO RATE NATIONS Country Ratings

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he finance ministry has developed a new sovereign comparative rating method, which would be a part of this year’s Economic Survey. The index, called the “Comparative Rating Index for Sovereigns” (CRIS), is based on Moody’s ratings and data on the gross domestic product (GDPs) of different nations as given by the Interna-

tional Monetary Fund, said Chief Economic Adviser Kaushik Basu.The index has been developed keeping in mind the fact that when an investor searches across nations for a place to put money, the relative rating of nations is important. Major credit rating agencies give out sovereign credit rating of each nation as an absolute grade. How

other nations fare does not matter in a particular nation’s rating score. This is a new system for comparing the relative ratings of sovereign debt based on the historical evolution of their ratings over five years and the volume of their economic activity as measured by their GDP (not adjusted for purchasing power parity).

EUROPE OPENING UP TO INDIAN IT SERVICES Indian IT Outsourcing

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he European crisis is acting as a catalyst in driving offshoring from a region that has traditionally preferred onshore IT services. The strong Europe revenue numbers and client additions of Indian IT majors in recent times indicate that clients are viewing offshoring as a cost and efficiency lever. In calendar year 2011, top-tier IT companies grew their Europe revenues between 23% and 40%. In the just completed OctDec quarter, they posted strong sequential growth in Europe, with Infosys growing at 17%, TCS at 19% and HCL at 6.3%. Europe also saw a larger share of multi-million dollar deals being signed than the US.

Infosys added 14 new clients in Europe of which two were in the $500-million bracket and these were the largest deals the company won in the quarter. TCS won 10 large deals in the quarter that included four from Europe, three from the US, and two from Asia-Pacific. HCL won 18 large deals worth $1 billion, in which Europe led the list in value.

Europe accounts for about 20-30 % of Indian IT’s revenues, but a large portion of this comes from the UK. In Continental Europe, led by Germany ($44 billion in IT spends) and France ($37 billion), Indian IT has just a single-digit market share of IT spends. Other large but under-penetrated markets include Spain, Italy and the Nordic regions. There are other factors too that explain Indian IT’s improved performance in Europe. Anil Chanana, CFO at HCL Technologies, said Indian IT has developed capabilities both organically and inorganically to take on large and complex projects. European IT spends are skewed towards higher-margin, project based services such as system integration. Indian vendors have also made huge investments in Europe in the past couple of years and have appointed country heads recruited locally. Sanjay Vishwanathan, CEO of Sonata Software, said the growing success of the global delivery model, as well as service lines like remote infrastructure and cloud,

are helping the cause of offshorers. Indian IT companies also have near shore centres in Europe in countries like Hungary, Poland, Portugal and Romania. A Deutsche Bank study with 55 major IT decision makers in Europe found that TCS and Wipro were the most favoured vendors. TCS has a greater revenue exposure to Germany and France, which gives it an advantage in this market. Wipro offers the best near shore delivery alternatives and has recently made some key strategic acquisitions. Infosys is said to offer high-end services on par with European and American counterparts, but is not very flexible when negotiating commercial terms. HCL’s acquisition of Axon and strong infrastructure management capabilities has enabled it to win key deals in Europe but is still not viewed as a tier-1 player. India-Austria Newsletter | 9


India in Austria | Past Events

Flag Hoisting Ceremony in commemmoration of the 62nd Anniversary of India‘s Republic Day January 26th, 2012 | India House (Vienna) Compiled by the Indian Brand Equity Foundation (IBEF), this report has the intention of providing busy executives a short overview of the Indian Engineering Design and Development Industry and the opportunities within. Download this report here!

DOWNLOAD THE

REPORT

NOW!

10 | India-Austria Newsletter


Industry

ENGINEERING DESIGN AND DEVELOPMENT Indian Industry Sector Close-Up

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ndia’s engineering design and development industry is growing rapidly as the country makes deeper inroads into the global engineering space. The advent of computers changed the task of engineering into modules that can be outsourced by a firm while it concentrates on its core activities. At the same time, vendors to whom the work is outsourced are usually better equipped to perform these tasks as it forms their core competency. The outsourcing initially limited to onshoring within developed markets, later extended to offshoring from developed markets to low-cost countries. Engineering services evolved into an outsourcing model that enhanced efficiency of a firm, improved processes, led to cost advantage and lowered time-to-market for the product. Indian Engineering Services Outsourcing (ESO) became a new segment of the Indian outsourcing industry, which also includes business process outsourcing (BPO) and information technology outsourcing (ITO). ESO differentiates itself from the other two in terms of the high level of domain expertise required. The fledgling ESO outpaced growth in the more robust BPO and ITO segments during FY04 -FY11 and presently accounts for 16% of the total outsourcing market in the country. ESO’s primary focus is the export market as domestic engineering expenditure is generally done in-house. While hi-tech and automotive industries are the major markets contributing 75% to total revenues, aerospace is set to be the sunrise industry over the next decade. The industry is transforming from volumebased to value-based as clients’ confidence in the Indian ESO is increasing. India is placed at a unique position of advantage with the largest talent pool of low cost, English speaking and experienced engineers. Having recognized the potential in the engineering space India has provided the required policy support for its further growth. Large foreign firms that are keen on entering the market to cater to the significant local demand, also tend to forge local subcontracting relationships to benefit from vendors’ knowledge about the local needs. Local players, simultaneously, are expanding outside India through acquisitions to enhance their domain expertise. Global engineering expenditure is projected to increase to USD1100 billion by 2020; also,

the share of offshore work within the same is estimated to grow from about 4.5% presently to about 15 -20% during this period. Considering India’s unique position of advantage, and India’s successful track record in other outsourcing formats of ITO and BPO, the country’s market share in global engineering services space is set to rise from 20% in 2009 to 25 -30% by 2020. This potentially means the industry revenues for India to be poised to reach USD40 -50 billion during this period. EXPORTS Engineering exports include transport equipment, capital goods, other machinery/equipment and light engineering products like castings, forgings and fasteners. Going by the data compiled by the Engineering Export Promotion Council (EEPC), the apex body of engineering exporters, engineering consignments for the month of September 2011 stood at US$ 7.1 billion. By far in 2010-11, engineering goods have been the largest contributor (with US$ 60 billion worth of consignments) to the total Indian exports of US$ 245.9 billion. Engineering exports for the period April-August 2011 had increased by 125 per cent, aggregating to US$ 40 billion. KEY DEVELOPMENTS Bearings maker SKF India is planning for a capacity expansion at its manufacturing unit in Ahmedabad. The unit would majorly cater to sectors like renewable energy, construction and railways.

Pune nurtures over 12, 000 engineering graduates every year and the number is further expected to swell as more colleges are coming up. Automotive engineering and enterprise software product engineering are key areas of strength within the entire industry ecosystem for Pune. The Indian unit of Germany’s Siemens AG - Siemens Ltd, will venture into engineering, procurement and construction (EPC) solutions business for solar photovoltaic plants in India. The company recognises India as one of the fastest growing renewable energy markets globally and hence, aims to tap the opportunity. MAJOR INVESTMENTS The miscellaneous mechanical and engineering industries’ sector-wise foreign direct investments (FDI) inflows from April 2000 to September 2011 was calculated at US$ 2, 134.21 million, as per the Department of Industrial Policy and Promotion (DIPP). The hydraulics business of Wipro and Kawasaki Heavy Industries - Wipro Infrastructure Engineering – will entail an outlay of Rs 50 crore (US$ 9.52 million) to set up a facility in Bengaluru that would manufacture hydraulic pumps for excavators. The joint venture (JV), namely Wipro Kawasaki Precision Machinery, will have a start-up capacity of 4, 000 pumps which would be expanded to 15, 000 pumps by 2015. THE INDIAN FORGING INDUSTRY

Also the company, with 27 per cent market share in organised bearings manufacturing sector in India, has recently inaugurated its global technical centre in Bengaluru. The facility plans to hire 400 engineers by 2015 and entail an investment of Rs 50 crore (US$ 9.52 million) for its development.

The Indian Forging industry is mushrooming as a major contributor to the manufacturing sector of the Indian economy. Forging industry is a basic industry and involves the process by which metal is heated and is given a particular shape through plastic deformation by applying a compressive force. Usually the compressive force is in the form of hammer blows using a power hammer or a press.

Pune is increasingly emerging as Asia’s innovation hub. The city boasts of 124 software product start-up companies, 112 top global research and development (R&D) centres, 24, 000 talented people dealing with various projects, 17 special economic zones (SEZs) and information technology (IT) parks, 18 IT-business process outsourcing (BPO) SEZs and over 40 engineering colleges.

Growth of such basic industries is directly proportional to a country’s GDP growth. And since India’s GDP is fairly estimated to grow in the coming years, forging industry is also anticipated to grow accordingly. In the light of this fact, the Association of Indian Forging Industry (AIFI) has projected that the Indian forging industry is set to enhance by over 20 per cent per annum and attract in-

India-Austria Newsletter | 11


Industry vestments of about US$ 3 billion by 2015 for capacity expansion. As of now, the Rs 15, 000 crore (US$ 2.85 billion)-industry gets 70 per cent of its business from automotive sector. Moreover, Deven Joshi, President, AIFI, has revealed that the overall production of forgings increased from 1.8 million tonnes in 2009-2010 to 2.3 million tonnes during the year ended March 31, 2011, registering a growth rate of more than 28 per cent. This is predicted to grow further to 4 million tonnes by 2014.

GOVERNMENT POLICY SUPPORT The policies of central and state governments in India are geared toward the needs of the ESO industry. A few of them are mentioned below.

Several Special Economic Zones (SEZs) dedicated to the aerospace industry are expected to come up in Bengaluru and Hyderabad during 2011 -13 with investments of over USD1.5 billion. Respective state governments are offering attractive tax and financial incentives to investors. India’s Defence Offset Policy is likely to generate business worth USD10 billion during the 11th Five-Year Plan (2007 -11) as it mandates a minimum of 30% offset across all acquisitions where the purchase cost exceeds USD67 million (INR300 crore). The offset can be in civil aerospace, internal security or defence sectors. Under the 11th Five-Year Plan, the government announced a project to further strengthen the patent offices at an estimated cost of USD67 million; while, USD30 million has already been incurred under the 9th

and 10th Five-Year Plans. The government aims to improve physical infrastructure, modernize IT infrastructure and create awareness among stakeholders and users through sensitization programmes and publicity material. ROAD AHEAD Indian ER&D service industry has been quite instrumental in establishing India as a design and innovation hub by speeding-up innovation and application. Experts believe that this kind of exponential growth will make India one of the major global players with better domain capabilities and establish the country as a pioneer in the ER&D space. On the similar lines, NASSCOM anticipates that the market for ER&D services would increase by over four times to touch US$ 40US$ 45 billion by 2020.

Big Player: Engineers India Limited Leading Indian Company in the Engineering Design and Development Segment India in the Oil & Gas Sector in the last four decades and has also successfully executed several assignments in the middle‐east and

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ngineers India Limited (EIL) was set up in 1965 to provide engineering and related technical services for petroleum refineries and other industrial projects. EIL is working under the administrative control of Ministry of Petroleum and Natural Gas (MoP&NG), Government of India. In addition to Petroleum Refineries, with which EIL started initially, over the years it has diversified and excelled in various other fields. EIL today has emerged as Asia’s leading design, engineering and turnkey contracting company providing a complete range 12 | India-Austria Newsletter

south‐east Asia. EIL has to its credit more of project services needed to conceptualize, plan, design, engineer and construct projects to meet the specific requirements of its clients in the following fields:

than 400 major projects successfully completed and operating smoothly at the rated capacity, creating an array of satisfied clients.

Petroleum Refining

Petrochemicals

Pipelines

Offshore Oil & Gas

Terminals/Storages

Onshore Oil & Gas

process licensors and engineering/construc-

Mining/Metallurgy

Infrastructure

tion/contracting companies worldwide and

EIL has been involved in setting up of almost all the large projects that have come up in

In the course of setting up various projects, EIL has worked with a large number of

is well versed with the latest engineering codes and practices followed internationally.


Trade Shows

India-Austria Newsletter | 13


Overseas Indians

PERSONS OF INDIAN ORIGIN EXPLORE INDIA WITH “KNOW INDIA PROGRAMME” 18th Know India Programme (KIP) of the Ministry of Overseas Indian Affairs

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wenty-eight people of Indian origin (PIOs) from six countries participated in the 18th Know India Programme (KIP) of the Ministry of Overseas Indian Affairs, held from September 21 to October 11. Welcoming the participants, Union Minister for Overseas Indian Affairs and Civil Aviation Vayalar Ravi said, “The purpose of organising KIP is to provide a unique forum for students and young professionals of Indian origin to visit India, share their views and to bond closely with contemporary India.” He also highlighted the role of the ministry in linking “youth diaspora” with their country of origin. During the three-week unique study programme, all the participants, aged between 18-26 years, visited rural Rajasthan to see places of historical importance and get firsthand experience of the ongoing social development programmes in the state.

Key Features of the “Know India Programme” The scheme as envisaged is implemented in partnership with select Indian universities/institutions of repute. The academic credit line and professional excellence of the university/ deemed university/institutions is one of the criteria for selection under the programme Academic content: To facilitate understanding of contemporary India and its development, political and financial systems, economic, social and administrative structures Cultural content: To help the participants to understand the Indian experience with exposure to Indian mythology, history, arts, handicrafts, dance, music, cuisine, languages and by interaction with Indian students Visits: Organised to different institutions and industries of importance as also rural visit to allow the participants to gain first hand exposure to India

The content of the programme includes: •

Taking part in cultural programmes

Exposure to yoga

Presentations on the country, the constitution, political process, etc

Interaction with faculty and students at a prestigious university/college/ institution

Presentation on the industrial development and industrial visits

Visit to a village to develop understanding of the typical Indian village life

Exposure to Indian media and film industry

Interaction with NGOs and organisations dealing with women-related issues

Visit to places of historical importance

The participants attended lectures in subjects like Indian history, economy and planning in Delhi and also visited the All India Radio and Doordarshan to attend various interactive programmes. Of the 28 participants, 10 were from South Africa, six from Trinidad and Tobago, four from Malaysia, five from Fiji, two from Surinam and one from Australia. According to the Ministry, objective of the scheme is to enable overseas Indian youth — foreign citizens of Indian origin and NRIs in the age group of 18-26 years — to undergo short-term courses in the nature of “summer school” to familiarise them with the art & culture, heritage, history, social and economic development of India.

PRAVASI BHARATIYA DIVAS 2012 Key Takeaways for Overseas Indians

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he Pravasi Bharatiya Divas, which is celebrated every year between January 7 & 9, by the Indian government in an effort to reach out to the 28 million Indians overseas, entered its 10th year last week in Jaipur. January 7 was chosen for PBD to commemorate the day that Mahatma Gandhi arrived back in India from South Africa to join India’s freedom movement. This year, the event was held in Jaipur and had participation of 1800 delegates - the highest ever - from 50 countries.  In what is seen as the end of a long wait,

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non-resident Indians will now be allowed to vote in the Indian elections. The Prime Minister Dr Manmohan Singh announced at PBD 2012 that the government has issued notifications for registration of overseas voters under the Representation of People Act and non-resident Indians can now vote in the Indian elections. Those  NRIs  who have registered with the embassies of their respective countries of stay, will be eligible to vote from the upcoming assembly elections in five states including Uttar Pradesh, Uttarakhand, Punjab, Goa

and Manipur. Postal ballot or online voting, however, has not been granted and the NRIs who want to vote will have to be present in their home constituencies to cast their ballot in person during the elections. The government has also initiated an effort to spruce up its existing People of Indian Origin and Overseas Citizen of India schemes. The two schemes will now be merged, thus rectifying some problems and overlaps between the two. Foreign spouses of overseas Indian cardholders will now become eligible for the overseas citizen of India cards - which


Overseas Indians

have proved very popular among people of Indian origin who have acquired citizenship of other countries. Lately there has been a surge in workers going to work in the Gulf and other areas from the north Indian states including Rajasthan and Uttar Pradesh. In an effort to reach out to these workers, an office of the Protector of Emigrants has been set up in Jaipur. Earlier, they would have to travel to Delhi for their immigration formalities. The city will also have a migrant resource centre to provide support to overseas Indians and emigrating workers.  The government has also unveiled a new emigrate scheme to provide end-to-end online solutions for the emigration system. This will link semi-skillled and unskilled workers who go for jobs overseas, offices of the protector of emigrants, recruiting agencies, immigration officials, employers and Indian missions abroad.  In the past few years, the Indian government has entered into social security agreements with various European nations which ben-

efit the Indian professionals who work there. These agreements are now being expanded into labour mobility partnership agreements which are being expanded to cover students, academics and professionals, besides skilled workers. Such pacts are being negotiated with the Netherlands, France, Australia and EU. One of the highlights of the Pravasi Bharatiya Divas this year was the launch of a new pension and life insurance fund for overseas Indian workers by the government. The scheme will encourage, enable and assist overseas workers to voluntarily save for their return and resettlement in their old age. It will also provide a low cost insurance cover against natural death.  The ministry of overseas Indian affairs has announced that it will undertake an ethnographic study of the vast and diverse body of people of Indian origin across the world, through its think tank the Indian Council of Overseas Employment. Such a database has never been undertaken before and the

mapping will benefit both the Indian government and the communities of people of Indian origin around the world. In a clear message that the government is serious about reaping the demographic dividend and in an effort to position India as a global supplier of skilled and trained workforce in the coming decades, the ministry of overseas Indian affairs has drafted a scheme for skills development. It is aimed to train over 10 million youth over the next two five-year plans and enable workers to move up the value chain and access better jobs overseas.  The ministry of health made a strong pitch to Indians overseas during the PBD and urged them to help in the development of healthcare facilities in the country, especially in providing training, knowhow and advanced technologies. Many Indians in the Gulf and western countries have shown interest in setting up hospitals and medical colleges in India. Training of medical professionals is another area where they can help the Indian government.

5 SECTORS IN INDIA THAT ARE HIRING NRIs AND EXPATS RIGHT NOW Work Opportunities for NRIs and Expats

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very few months, headhunting firms and recruitment consultants release surveys about hiring trends in the country and in the recent past, every survey has something for the Non Resident Indian. India today, offers better employment opportunities as compared to some of its global peers. But while landing a job in itself might not be difficult, there are some sectors that are keenly looking out to hire those with global experience. “Some sectors require a certain level of skill and experience that are not available within India.

Companies in these sectors look at hiring from outside India. And if you are an NRI, with these sought after skills, you might just be the right person the company is looking for,” says Aseem Juneja, a cross border talent expert and founder of Indbound.com. And while the salaries in India tend to be around 40-70% of dollar salaries, because these skills are much in demand, salaries can be much higher. Kris Lakshmikanth Founder CEO of The Head Hunters India Pvt Ltd. Says, “Salaries could go up to 100% of dollar salaries in a lot of these cases.” So which are these sectors? Let’s take a look.

1) HEALTHCARE Healthcare here mainly includes biotechnology, contract research and manufacturing, clinical research and pharmaceutics. According to this E&Y Report , the Indian biotechnology sector was valued at USD 4 billion in 2010-11, growing at nearly 21% in value over 2000-2010. It is estimated that as of 2012, the Indian CRAMS sector (Contract Research and Manufacturing) will be valued at USD 7.6 billion growing at a CAGR of 47.2% from 2007 till 2012. Express Pharma envisaged that by 2011 India would be conducting 15% of all global clinical trials. India-Austria Newsletter | 15


Overseas Indians “India is fast becoming a hub for outsourcing in the healthcare sector,” says Kris Lakshmikanth Founder CEO of The Head Hunters India Pvt Ltd, adding, “Multinational companies like Pfizer, Novartis, Eli Lilly etc look at India as a skilled and cost effective hub to outsource certain functions. This includes research in areas like stem cell and vaccinations, contract research and clinical research. While the employees of these outfits are largely from within India, the leadership team of these units is typically those with global experience.” “Typically, those with a post doctoral qualification with research experience in the US would fit the bill,” he says. 2) Telecom “The telecom sector in India has seen an explosive growth in subscriber base and volumes. However, margins in voice based service are thin and companies are looking beyond voice. They are looking at value added services (VAS) and the availability of high bandwidth, upgrades and rollouts of technologies (3G etc) is making that possible,” Juneja explains. This report from PriceWaterhouse Coopers states: The mobile tariffs in India are one of the lowest in the world and due to hyper -competition in telecom it is not expected to rise in near future. VAS remains only effective tool to increase the ARPU/share of wallet of subscribers. Multilingual content, application support around languages, killer applications and readiness of handsets could drive over Rs 55,000 crore of VAS revenue by 2015. With the launch of 3G services and expected launch of high bandwidth BWA services, VAS currently has reached its inflexion point. The constituents of VAS ecosystem such as mobile operators, content creator, handset manufacturer will need to show greater col-

laboration to achieve full potential of VAS. “Companies need people to build applications and bring innovative services to the table. And currently, much of these skill sets are only available in the developed markets like the US,” Juneja says. 3) INFRASTRUCTURE According to this McKinsey Report India’s Eleventh 5-year plan envisages infrastructure investments of close to USD 500 billion with USD 430 billion of this in the core transport and utility sectors. About one fourth of this is expected to be met through Public Private Partnerships. As the Government in India slowly opens up the infrastructure sector to private companies, the need for experts in this area is increasing. “Be it building ports, roads, even nuclear plants, private companies are looking to hire individuals who have the experience in infrastructure development,” Juneja says. Having said that, Lakshmikanth adds, “In this sector, companies are looking at experts from countries like Australia and not so much the US. The infrastructure development in the US happened a long time back. The more modern developments have happened in countries like Australia.” 4) E-COMMERCE The entry of Amazon.com in India has cast away any doubts about the future of Ecommerce in India. This report says that some USD 3 billion worth of e-commerce was transacted in 2011. And, according to Helion Venture Partners, USD 20 billion worth of ecommerce will be done in five to seven years, with 12-15% of shopping going online in this period.

“As Indian Ecommerce and deal companies like Flipkart, Snapdeal etc become popular there is an increasing need for people who have worked in Ecommerce environments those who can create infrastructure to handle large traffic, build applications, enhance user experience etc,” says Lakshmikanth. Companies in the US are far ahead in terms of Ecommerce, so as an NRI who has worked in that sector in the US, you will be much sought after in India. 5) INFORMATION TECHNOLOGY While India continues to remain a hub for cost effective technology operations, certain niche technology operations still require global expertise. “Technology companies in India for instance might be building a DNA sequencing program for multinational healthcare companies. The functional support for this program will most likely come from someone who has that kind of research background which is available in developed markets” Lakshmikanth says. Juneja too cites the example of pharma analytics as an area that needs expertise from developed markets. Another area - large logistics and supply chain companies that use Indian technology companies to build their modules. “These companies typically need global experts to offer functional support,” Juneja says. In addition to the above 5, smaller sectors in areas like wine making, gaming etc which are starting to become popular in India are hiring those with global expertise. According to some estimates, wine consumption in India is expected to grow by 25-30% annually between 2009 and 2012 and the Indian Gaming Industry is expected to grow at a compounded annual growth rate of 32% to Rs. 3,100 crore by 2014.

DIASPORA QUIZ 1) He is a former professional French football midfielder, poker player and actor who served as the chairman of the football vlub L‘Entente SSG and represented his country at the 2006 FIFA World Cup in Germany. Name this player 2) An award-winning author, poet, and teacher of creative writing, her work has been published in over 50 magazines and included in over 50 anthologies. Name this author of The Mistress of Spices and Sister of my Heart ANSWER: 1) Vikash Dhorasoo 2) Chitra Bannerjee Divakaruni

16 | India-Austria Newsletter


Tourism

NAGALAND Indian State Profile

N

agaland, the land of the hospitable and warm Nagas, lies in the corner of India’s North-East-bordering Myanmar. It has always evoked a sense of awe and wonder in the minds of people including the visitors. Although most of the Nagas have now become Christians, they still preserve the remnants of their early animist culture and ancient traditions.

Historically, the Nagas have always been brave warriors. They consider the safety and security of their guests as an honour and prestige and will never allow any harm to be done to any of their guests/visitors.

KOHIMA CITY, CAPITAL OF NAGALAND

Topographically, Nagaland is mostly a hilly region with a pleasant and salubrious climate throughout the year, except for a small region in the foothills. Nagas are by race of the Mongoloid stock and speak Tibeto-Burman group of languages. But English and Hindi are widely spoken and language is no problem in Nagaland. Colourful life and culture are an integral part of the 16 officially recognized Naga tribes of Nagaland. These 16 tribes are different and unique in their customs and traditions. These customs and traditions are further translated into festivals which revolve around their agricultural cycle. Songs and dances form the soul of these festivals through which their oral history has been passed down the generations. Nature has been kind to the Nagas and their land. Though by virtue of her natural beauty, the whole of Nagaland is a tourist hotspot, yet certain exceptionally charming places have been identified and developed by the Government to promote tourism in the state, some of which are highlighted in the website. This focused approach helps in providing easy access to travelers of all categoriestourists, researchers, backpackers, ecologists etc. Since this little explored state is still developing and many more places remain ‘unmarked’-making them even more exclusive and fascinating to explore… FOR MORE INFORMATION, CONTACT

India Tourism Frankfurt Baseler Str. 48 / D-60329 Frankfurt Tel: +49 (69) 242949-0 Fax: +49 (69) 242949-77 www.india-tourism.com info@india-tourism.com

NAGA TRIBESMEN

DZUKOU VALLEY TREKKING WITH NATIVES IN NAGALAND

Exhibition

NAGA PEOPLE JEWELRY AND ASHES

February 1st - June 11th 10am-6pm Museum of Ethnology Neue Burg, Heldenplatz 1010 Vienna

India-Austria Newsletter | 17


Embassy Past Events

FLAG HOISTING CEREMONY ON THE 62ND ANNIVERSARY OF INDIA‘S REPUBLIC DAY January 26th, 2012 | India House (Vienna)

18 | India-Austria Newsletter


Embassy Past Events

RECEPTION IN COMMEMORATION OF THE 62ND ANNIVERSARY OF INDIA‘S REPUBLIC DAY February 1st, 2012 | Museum of Ethnology (Vienna)

India-Austria Newsletter | 19


Embassy Upcoming Events

INDIAN MOVIE EVENING: AJAB PREM KI GHAZAB KAHANI (UNIQUE LOVE’S AMAZING STORY) February 9th, 18:00 | Indian Embassy Business Centre (1st Floor, Kärntner Ring 2, 1010 Vienna) Synopsis: Prem’s (Ranbir Kapoor), fundas in life Due to limited capacity, seats will be given on a first come, first served basis. Therefore, you are highly encouraged to reserve your seats online at www.indianembassy.at or via phone at +43 1 505 866633 (Ms. Lily John). Genre: Comedy Directed by: Rajkumar Santoshi Starring: Ranbir Kapoor/Katrina Kaif Released: November 2009 Duration: 161 Minutes Language: Hindi Subtitles: English

were very simple - be happy... make others happy... keep the town happy. It may have been a case of mistaken identity that led Prem to kidnap Jenny (Katrina Kaif). And it was sheer greed that made Prem try to pull a fast one over her father. As for sweet and simple Jenny, brought up by indifferent and uncaring foster parents, all she longed was to love and be loved in return. And it was love and only love for Jenny that made Prem turn over a new leaf. From hardly working vagabond he began working hard to make money… From a besotted Romeo he became a mature and thoughtful Majnu who put Jenny’s happiness above everything else. As for Jenny, she was so much in love with the idea of being in love that she was blinded by the reality that was staring in her face... That’s when she realises that she had made a mistake with her love.

SEMINAR: PRESERVING RICH CULTURAL HERITAGE OF WESTERN HIMALAYAN NAKO VILLAGE BY INSTITUTE OF CONSERVATION OF THE UNIVERSITY OF APPLIED ARTS VIENNA February 23th, 17:30-19:00 | Indian Embassy Business Centre (1st Floor, Kärntner Ring 2, 1010 Wien) Programme: PART 1. Screening of the documentary “Close To Heaven. Preserving Living Culture in Nako” on the Institute’s Conservation Nako-Project under Prof. Gabriela Krist. The film of ORF director Gundi Lamprecht shows the long-term project activities to preserve the rich cultural heritage of Western Himalayan Nako village.

PART 2. Short lectures by university lecturers Dr. Martina Griesser-Stermscheg, DI Tatjana Bayerova, and Dr. Maria Gruber, as well as the intern at the Institute of Conservation from the National Museum Institute New Delhi (NMI), Tanushree Gupta. Lectures will present the fruitful cooperation between the NMI and several Indian institutions and highlight their joint activitities: The conservation and research on the Nako wallpaintings with the NRLC, the ongoing work-

shops and seminars for Indian conservation and museum professionals at the NMI, and the very recent field work campaign for the SAVE DANGKHAR initiative in cooperation with the Technical University of Graz. This seminar opens a series of such events, which will focus on India-Austria cooperation in the field of academics, culture and business..

INDIAN MOVIE EVENING: UDAAN (FLIGHT) March 8th, 18:00 | Indian Embassy Business Centre (1st Floor, Kärntner Ring 2, 1010 Wien) Synopsis: After being abandoned for eight Due to limited capacity, seats will be given on a first come, first served basis. Therefore, you are highly encouraged to reserve your seats online at www.indianembassy.at or via phone at +43 1 505 866633 (Ms. Lily John).

20 | India-Austria Newsletter

straight years in boarding school, Rohan returns to the small industrial town of Jamshedpur and finds himself closeted with an authoritarian father and a younger half brother who he didn’t even know existed. Forced to work in his father’s

Genre: Drama

steel factory and study engineering against his

Directed by: V. Motwane

wishes, he tries to forge his own life out of his

Starring: Rajat Barmecha/Ronit Roy

given circumstances and pursue his dream of be-

Released: July 2010

ing a writer. Udaan was India’s first official selec-

Duration: 138 Minutes

tion at Cannes in 7 years. Additionally, the movie

Language: Hindi

won the “Best Audience” and “Best Music Score”

Subtitles: English

Awards at the Giggoni Film Festival Italy, 2010.

India Newsletter 02.2012  

India Newsletter published by the commercial section at the Indian Embassy in Vienna

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