INDIA NEWSLETTER Indian Embassy, Vienna
Published by the Embassy of India, Vienna Year 7 • Issue 76 • April 2017
MAKE IN INDIA ■■DELHI-MUMBAI INDUSTRIAL CORRIDOR
India Newsletter • 1
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Digital Infrastructure as a Core Utility to Every Citizen
Governance and Services on Demand
Digital Empowerment of Citizens
The Digital India programme is a flagship programme of the Government of India with a vision to transform India into a digitally empowered society and knowledge economy. Find out more under:
www.digitalindia.gov.in
Infrastructure Development
Accelarate Manufacturing Growth
Focus on Skill Development
Sustainable Energy Sufficiency
Improved Business Environment
The government of India has prepared a five-pillar strategy to drive India’s growth, which offers multiple avenues of collaboration and investments. Find out more under:
www.makeinindia.com 2 • India Newsletter
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POSITIVE NEWS FLASHES
01
The total length of roads constructed under the
05
India is likely to become more influential in
08
India has become an associate member
Pradhan Mantri Gram Sadak
Asia-Pacific in next five years,
Yojana (PMGSY) has reached
of the International Energy
as a result of the Government’s
Agency (IEA), which makes
47,350 kms in the year 2016-17, thereby making a record of the highest annual construction of PMGSY roads in 7 years.
02
Wind power capacity addition in India stood
implementation
of
various
pro-business policies, and the expansion of the economy, according
to
a
survey
the Paris-based body more significant, indicating India’s growing prominence in playing
conducted by Baker McKenzie,
an important role in the global
a global law firm.
energy dialogue, according to
MW, according to the Ministry
06
the IEA.
fastest growing markets for
of New and Renewable Energy,
Twitter, stated Mrs Maya Hari,
World Bank’s Doing Business
at a record 5,400 megawatts (MW) in 2016-17, thereby exceeding its target of 4,000
Government of India.
03
According to IBEF, India’s Gross Domestic
Product (GDP) is projected to grow at 7.7 per cent in the financial year 2018-19,
India is one of the top five as well as the
Managing Director of Twitter’s Southeast Asia and India, while launching the Twitter Lite application in India that will save data costs by at least 70
09
India aims to reach the 90th rank in in the
survey in 2017-18, and 30th rank by 2020, thereby targeting an ambitious jump from its 130th rank in 2016-17, as per
supported by major reforms
per cent and will work 30 per
an output-outcome framework
introduced by the Government
cent faster even in areas with
document prepared by the
of India like the rollout of
poor connectivity.
Government.
Goods and Services Tax (GST)
07
10
and the demonetisation drive.
04
India has become a net exporter of electricity
for the first time with an export of 5,798 million units to Nepal, Bangladesh and Myanmar, as compared to 5,585 Million units
India has replaced Japan to become the
third largest domestic aviation market globally, recording a total of 100 million domestic flyers in 2016, as compared to 97 million flyers in Japan during
India is expected to be the third largest
consumer
economy
as
its
consumption may triple to US$ 4 trillion by 2025, owing to shift in consumer behaviour and
imported from Bhutan during
the same period, according to
spending pattern, according
the current year 2016-17 (April
Centre for Asia Pacific Aviation
to a Boston Consulting Group
to February 2017).
(CAPA).
(BCG) report. India Newsletter • 3
Indian Embassy, Vienna
ANNOUNCEMENT FOR AUSTRIAN CITIZENS e-Tourist Visa (e-TV) for Austrian citizens
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he Government of India has extended e-Tourist Visa (eTV) scheme to the citizens of Austria w.e.f. 26th February 2016. Under e-Tourist Visa scheme, citizens of Austria may now apply online (https://indianvisaonline. gov.in/visa/tvoa.html) four days in advance to obtain the Electronic Travel Authorisation for travelling to India.This facility is in addition to the existing Visa services. This facility is also available to the citizens of Montenegro as well. Queries related to e-TV; for any assistance call 24x7 Visa support centre at +91-11-24300666 or send email to indiatvoa@gov.in.
NEWS ARTICLES Austria’s Railway Technology Showcase in New Delhi
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ustria’s railway technology is ranked among the most innovative in the world. Due to the tremendous opportunities between Austria and India in the railway sector, the Commercial Section of the Austrian Embassy in New Delhi organizes an Austria Showcase in the field of Railway Technology in New Delhi between 8th and 9th May 2017. Within the framework of this event, the Austrian companies have the possibility to present their technology, know-how and products to decision-makers (e.g.: the Delhi Metro and the 4 • India Newsletter
Railway Board). The program also includes a networking reception on the evening of the 8th of May in New Delhi. For more information, contact the Austrian Embassy in New Delhi under newdelhi@ advantageaustria.org. The preliminary list of visiting companies from Austria is: ■■ D2 Consult International GmbH ■■ Doppelmayr Seilbahnen GmbH ■■ Frauscher Sensortechnik GmbH ■■ GEOCONSULT ZT GmbH ■■ Getzner Werkstoffe GmbH ■■ Linsinger Maschinenbau GmbH ■■ Palfinger Europe GmbH ■■ Plasser & Theurer GmbH ■■ voestalpine VAE GmbH
Government makes compliance of Labour Laws and Rules easy
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he Government has undertaken an exercise to promote ease of compliance of LabourLaws and Rules byvarious establishments. The “Rationalisation of Forms and Reports under Certain Labour Laws Rules, 2017” has reduced the number of forms and reportsprescribed under 3 Acts and the Rules made thereunder from 36 to 12. The overall aim of the exercise is to make the forms and reports easy to understand for the users. This will save efforts, costs and lessen the compliance burden of various establishments.As per the sixth Economic Census of Central
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Statistical Office, conducted during 2013-2014,there are about 58.5 million establishments in agriculture and non- agriculture sectors of the country. While reviewing the requirement of filing forms under various Labour Lawsit was observed that 36 forms prescribed under 3 Acts and the Rules made thereunder had several overlapping/ redundant fields. Therefore, an exercise was undertaken by the Ministry of Labour and Employment to do away with overlapping fields and reduce the number of forms. An intention notification for reducing the number of forms and reports was placed in the public domain on 9th February, 2017 and objections and suggestions thereon were sought from all stake-holders.
India nears second spot as world steel producer on record output
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ndia is expected to surpass Japan to become the second largest producer of steel in the world by the year 2019. The country’s steel output rose 11 per cent to 101.3 million metric tons during the year 2016-17, and the nation was a net exporter for the first time in three years. The total number of steel shipments doubled to 8.2 million tons in 2016-17. The country’s output is expected to rise from 103 million tons in 2017 to 110 million in 2018, and 118 million by 2019, according to projections from Australia’s Department of Industry, Innovation and Science.
India climbs to fourth spot in 2016 global air traffic rankings
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ndia jumped four spots in as many years in global air traffic rankings, data from International Air Transport Association (IATA) shows. “India has jumped...to #4 ranking with 131 million departures in 2016 and with stellar growth of 20.0% yoy (year on year), continues to close in fast on Japan,” IATA said in reply to a query. India was at the eighth spot in 2013 with 86 million departing passengers. It moved to number seven with 94 million passengers in 2014 and number six in 2015 with 109 million. The 2016 growth was among the strongest in recent years on the back of lower fares, economic growth and expansion by local airlines that have a fleet of 450 planes and over 800 planes on order. Domestic traffic grew at about 23% while international passenger traffic was at 10%, according to Directorate General of Civil Aviation (DGCA). There were an estimated 3.8 billion air passenger departures globally in 2016, IATA noted, and over 3.5 billion departures in 2015. US led the ranking with 815 million passengers, of which under 500 million were domestic, about 100 million international and the rest were connecting passengers. China was next with nearly 490 million passengers, of which about 400 were domestic—four times the size of India’s domestic traffic. Japan had 141 million passengers, of which about 100 million were domestic. India had 131 million passengers,
of which nearly 100 million were domestic. Besides India, Indonesia was the other “big mover on this year’s rankings,” IATA said. Indonesia moved up two positions this year, to No. 6, with 116 million passenger departures, a growth rate of 12.9%. The government expects the domestic airlines’ fleet size to double over the next decade. A new scheme introduced by the government this year called Udan is likely to boost regional connectivity. The first flight under this regional scheme is expected to be launched this month. Air India, IndiGo, GoAir, SpiceJet, Vistara and AirAsia India have said they plan to expand their fleet size this year as well. Air India and SpiceJet are also participating in the Udan scheme. “Growth is helped by additional capacity offered on the market, additional frequencies- some of which are attributed to new entrants, lower fares offered due to sparring carriers trying to gain market share at the expense of others, and finally to a healthy economy, thriving, helped by a more dynamic government than those in the past,” said former Jet Airways chief executive officer Steve Forte, “It all translates to a recipe for success, hoping it will continue in the near future.”.
India seeks to jump 40 places in World Bank’s Doing Business rankings
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ndia is targeting an ambitious 40-notch jump in the World Bank’s Doing Business survey this year. Last year, its rank rose by just one place to 130 in the survey that measures the ease of doing business in various countries. India Newsletter • 5
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According to an output-outcome framework document prepared by the government, India wants to reach the 90th rank in 2017-18 and 30th by 2020. “Better rank in ease of doing business and greater awareness about opportunities in India in manufacturing sector would lead to growth in the manufacturing sector,” the document said. Department of industrial policy and promotion (DIPP) secretary Ramesh Abhishek said the targets are feasible. “We are hoping to do extremely well in five categories: starting a business, construction permits, paying taxes, trading across borders, and resolving insolvency. We are already in the top 50 in three parameters out of 10. We are facing challenges in two criteria: enforcing contracts and registering property because of the complexity involved,” he said. India was ranked within the top 50 countries in parameters such as protecting minority investors (13th), getting electricity (26th) and getting credit (44th), among the 190 countries surveyed. India’s worst rank was in dealing with construction permits, where it was placed 185th. It ranked 136th in resolving insolvency, 138th in registering property, 143rd in trading across borders and 172nd in both paying taxes and enforcing contracts. Arindam Guha, partner at Deloitte Touche Tohmatsu, said it will be an uphill task to achieve the targets since it involves many stakeholders other than the central government. “Government has to proactively pursue with the state governments and local bodies as well as the Supreme Court and high courts 6 • India Newsletter
for necessary reforms. Between Delhi and Mumbai, the former has been an underperformer though the latter has picked up in recent times, especially in dealing with construction permits. This may prove to be a drag on India’s overall ranking,” he added. This year’s budget allocated Rs272.48 crore under the scheme of investment promotion that will be spent on launching a 360 degree awareness campaign for better ease of doing business ranking and to attract investment in 25 sectors selected under Make in India. DIPP has also involved the National Productivity Council and the United Nations Development Programme to conduct user feedback to evaluate the effectiveness of its reform measures. To break into the top 50 in the World Bank ranking, India needs to set up fast-track commercial courts, dispose of cases quickly with minimum adjournments and establish e-courts for electronic filing of complaints, summons and payments, a government official said on condition of anonymity. Aiming to make it easier to do business in India, finance minister Arun Jaitley in his 2017-18 budget presented on 1 February promised to simplify labour laws and abolish the foreign investment and promotion board (FIPB). Jaitley announced legislative reforms to simplify, rationalize and amalgamate existing labour laws into four codes—wages, social security and welfare, industrial relations, and safety and working conditions. The finance minister said a road map for scrapping the FIPB that
scrutinizes foreign investment proposals will be announced soon as part of the government’s financial sector reforms. The National Democratic Alliance (NDA) government at the centre plotted an eight-point strategy to make it easier to do business in India. Departments will now hold stakeholder consultations for feedback on reforms undertaken, and also engage with respondents to ensure the reforms are implemented at the ground level. Each department will review progress every week in carrying out the necessary reforms.
India to become thirdlargest consumer economy by 2025: BCG
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ven as the world economy struggles and many developed countries are trying to alter their consumption through austerity drive, India could end up as the third largest consumer economy by 2025 according to a report by the Boston Consulting Group (BCG). Consumption in India is set to triple to $4 trillion by 2025 as rising affluence drives changes in consumer behaviors and spending patterns that have big implications for companies, the BCG report --Center for Customer Insight (CCI), The New Indian: The Many Facets of a Changing Consumer—said. “Nominal yearover-year expenditure growth of 12% is more than double the anticipated global rate of 5% and will make India the third-largest consumer market by 2025,” it added. “India’s consumer market is poised for fundamental change,” said Nimisha Jain, a BCG partner and report coauthor. “As the consumer market continues to
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grow and evolve, companies will need to shed conventional wisdom, try multiple business models simultaneously, and be prepared for rapid change internally to adapt to changing consumer needs and behaviors.” “A set of emerging social trends could reshape consumption patterns significantly,” said Abheek Singhi, a BCG senior partner and report coauthor. “These include more—and better educated—women taking their rightful place in society, greater pride in being Indian, and increasing time compression, each of which will drive exponential growth in various categories differently.” According to the report in addition, the internet is an increasingly pervasive factor in India’s commerce, and its influence will only expand. Online spending is taking off: in the past three years, the number of online buyers has increased sevenfold to 80 million to 90 million. Digital’s influence on broader consumer spending is significant and growing rapidly. Digitally influenced spending is currently about $45 billion to $50 billion a year, and that figure is projected to increase more than tenfold to $500 billion to $550 billion—and to account for 30% to 35% of all retail sales—by 2025. As a result, omnichannel interaction is more and more important, but its significance varies by category. Consumers’ purchase pathways also are increasingly complicated.
1st Time India becomes Net Exporter of Electricity
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s per Central Electricity Authority, the Designated Authority of Government of India for Cross Border Trade of Electricity, 1st time India has turned around from a net importer of electricity to Net Exporter of electricity. During the current year 2016-17 (April to February 2017), India has exported around 5,798 Million Units to Nepal, Bangladesh and Myanmar which is 213 Million units more than the import of around 5,585 Million units from Bhutan. Export to Nepal and Bangladesh increased 2.5 and 2.8 times respectively in last three years. Ever since the cross border trade of electricity started in mid-Eighties, India has been importing power from Bhutan and marginally exporting to Nepal in radial mode at 33 kV and 132 kV from Bihar and Uttar Pradesh. On an average Bhutan has been supplying around 5,000- 5500 Million units to India. India had also been exporting around 190 MW power to Nepal over 12 cross border interconnections at 11kV, 33kV and 132 kV level. The export of power to Nepal further increased by around 145 MW with commissioning of Muzaffarpur (India)– Dhalkhebar(Nepal) 400kV line (being operated at 132 kV) in 2016. Export of power to Bangladesh from India got further boost with commissioning of 1st cross border Interconnection between Baharampur in India and Bheramara in Bangladesh at 400kV in September 2013. It was further augmented by commissioning of 2nd cross
border Interconnection between Surjyamaninagar (Tripura) in India and South Comilla in Bangladesh. At present around 600 MW power is being exported to Bangladesh. Export of power to Nepal is expected to increase by around 145 MW shortly over 132 kV Katiya (Bihar)– Kusaha (Nepal) and 132 kV Raxaul (Bihar)– Parwanipur (Nepal). A few more cross border links with neighbouring countries are in pipe line which would further increase export of Power.
India becomes associate member of International Energy Agency
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ndia has joined the International Energy Agency as an associate member, a development that the IEA said makes the prestigious Paris-based body more relevant and reflects the country’s move to the centre stage of the global energy dialogue. Power, coal, renewable energy and mines minister Piyush Goyal, oil minister Dharmendra Pradhan and IEA executive director Fatih Birol announced India’s entry into the elite group which the developed countries had set up in 1974 after the OPEC cartel shocked the world with a steep increase in oil prices. Goyal said India and its citizens had not made any additional obligations, but the country will now be involved in the key committees and dialogues of the IEA, and will be able to represent the interests of the emerging markets. Pradhan, who has held meaningful dialogues with OPEC members and negotiated more equitable terms of trade with Gulf suppliers, welcomed the move. India Newsletter • 7
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IEA’s Birol said the inclusion of India, the world’s third-largest oil consumer, is an important achievement for the body that has acted as the energy watchdog for the developed world and has also promoted clean energy and environment protection. He said India has had significant success stories in the field of energy efficiency, renewable power generation and its drive to provide uninterrupted power supply to all its citizens. With India as a member, International Energy Agency now formally covers 70% of the world’s energy consumption. This increases the relevance of the IEA, Birol said. Goyal said India will now have a greater say in global energy issues. It has given an opportunity to India to be the voice of the developing world, he said. India is already a partner of the International Energy Agency, but the upgradation of the status will enhance its status and weight in its dialogue with major oil suppliers and consumers. In discussions with top oil exporters, Pradhan has already taken the lead in asserting India’s importance as a key buyer of the commodity. Early in his tenure, Pradhan had effectively challenged the imposition of the ‘Asian premium’, or the practice of oil exporters charging a higher price to developing countries compared with what the developed world pays for the same grade of oil. 8 • India Newsletter
Renewables to be over 60% of India’s generation capacity: Piyush Goyal
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reen energy is expected to constitute 60-65 per cent of India’s total installed power generation capacity, supported by reduced capital expenditure and cheaper credit leading to a drop in renewable energy tariff, as per Mr Piyush Goyal, Minister of State with Independent Charge for Power, Coal, New and Renewable Energy and Mines, Government of India. The solar tariff dropped to a new low of Rs 2.97 (US$ 0.045) per unit and the wind power tariff dropped to Rs 3.46 (US$ 0.053) per unit in auctions conducted by the Solar Energy Corporation of India (SECI). In 2016, 4 gigawatts (GW) of solar capacity was installed and 8.8 GW of capacity is expected to be installed in 2017, as per the Ministry of Power. Out of the total installed power generation capacity of 315 GW currently, 50 GW is from renewable energy sources and the government is targeting 175 GW of renewable energy capacity by 2022.
India’s longest highway tunnel inaugurated on April 2
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ndia’s longest highway tunnel at Chenani Nashri, between Udhampur and Ramban in Jammu & Kashmir was inaugurated by prime minister Narendra Modi on April 2. The 10.89 km tunnel that has absorbed a sum of Rs 2519 crore in its construction, forms part of the proposed widening of National Highway 44 (old NH-1A) from Jammu to Srinagar. The tunnel is the longest highway tunnel in India boasting of features like Integrated Traffic
Control System (ITCS), Video Surveillance System and FM Rebroadcast System, among others and will reduce travel time by approximately two hours, apart from promising fuel savings to the tune of 27 lakh per day. “The tunnel has multiple economic gains as connectivity in the remote area can help transform the life of this neglected region in the hills. The credit goes to previous planners for having mooted this tunnel,” S P Singh, senior fellow at the Indian Foundation of Transport Research and Training (IFTRT) told ET. The project has been dubbed as a “state of the art engineering marvel in the most difficult terrain of Himalayas”..
18 new Greenfield Airports approved
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overnment of India has granted “in principle” approval for setting up of the 18 Greenfield airports in the country. The list of these airport is as under: Mopa in Goa, Navi Mumbai, Shirdi and Sindhudurg in Maharashtra, Bijapur, Gulbarga, Hasan and Shimoga in Karnataka, Kannur in Kerala, Durgapur in West Bengal, Dabra in Madhya Pradesh, Pakyong in Sikkim, Karaikal in Puducherry, Kushinagar in Uttar Pradesh, Dholera in Gujarat and Dagadarthi Mendal, Nellore Dist., Bhogapuram in Vizianagaram District near Visakhapatnam and Oravakallu in Kurnool District, Andhra Pradesh. Government of India has granted “site clearance” approval for setting up of the 5 Greenfield airports in the country. The list of these airports is as under: Machiwara, Ludhiana Airport, Itanagar in Arunachal Pradesh, Jamshedpur
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in Jharkhand, Alwar in Rajasthan and Kothagudem in Telangana. Mopa Airport in Goa, Navi Mumbai and Shirdi Airport in Maharashtra, Kannur Airport in Kerala, Kushinagar Airport in Uttar Pradesh, Dholera Airport in Gujarat, Bhogapuram Airport in Andhra Pradesh, Machiwara Airport in Ludhiana and Alwar Airport in Rajasthan are International Greenfield Airports. As regards construction of new Greenfield airports, execution of project including finalization of project cost and financing arrangement is the sole responsibility of the respective airport promoters. However, as per the information provided by the respective airport developer, the total estimated cost for setting up of above mentioned 18 Greenfield Airports in the country comes out to Rs. 30,000 crore (approx.). This information was given by Minister of State for Civil Aviation, Shri Jayant Sinha in a written reply in Rajya Sabha.
India replaces Japan for 3rd spot in domestic air travel
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ropelled by the tail wind generated by increasing domestic air travel demand, the Indian aviation industry continues to soar to new heights. The world’s fastest growing air travel market for several months in a row has added another feather on its cap by being the thirdlargest domestic aviation market globally with more people flying within the country last year than Japan, which has been pushed to number four spot. Calendar year 2016 saw 100 million domestic flyers in India,
more than the 97 million in Japan, according to the Centre for Asia Pacific Aviation (CAPA). “In 2015, India was at number four in domestic air travel and now it is at number three. Japan was number three in 2015,” said Kapil Kaul, India head of CAPA. “On the international-cum-domestic air travel front, India saw a combined traffic similar to the UK in 2016 and they are both at number four spot now. UK was ahead of India on this front in 2015. Given the way our air traffic is growing, India is all set to overtake UK this year,” said Kaul. This data emerges from a report CAPA has prepared for the aviation ministry. According to the International Air Transport Association (IATA), India has overtaken Japan on domestic air travel front as the country has been the world’s fastest growing in-country market for 22 months in a row . This growth, however, has left Indian airports - at least the big ones - choking. While slots for new flights at metro airports like Delhi and Mumbai are very hard to get, hovering of flights is a regular occurance again due to air traffic congestion. Given the massive growth, Indian carriers have ordered hundreds of planes but no one knows where they will even be parked. The government has said it will add aviation infrastructure. Navi Mumbai may get the hugely-delayed airport in a few years and Delhi could also expect another airport in NCR soon with a BJP government both at the Centre and in Lucknow. “Our expectation is that we would have at least two to three greenfield (new) airports in UP. We are already working with the state government to determine
where they would come. There is tremendous interest in a new greenfield airport in western UP and we will like to expedite it with the state government. The greenfield airport in western UP will definitely serve two purposes - enable world class air connectivity in the area and add more flight connectivity options for the NCR,” aviation minister Jayant Sinha said.
India needs Rs43 trillion of investment in infrastructure over next 5 years
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ndia has a huge unmet need for investment in infrastructure, estimated to the tune of Rs43 trillion or about $646 billion over the next five years. 70% of which will be required in the power, roads and urban infrastructure sectors, finance minister Arun Jaitley said. Speaking at the inauguration of the 2nd annual meeting of New Development Bank by the five member BRICS (BrazilRussia-India-China-South Africa) countries, Jaitley said in emerging markets and developing economies (EMDEs), the overall growth is picking up, although growth prospects diverge across countries. “But there are newer challenges, most notably a possible shift towards inwardlooking policy platforms and protectionism, a sharper than expected tightening in global financial conditions that could interact with balance sheet weaknesses in parts of the euro area and increased geopolitical tensions, including unpredictable economic policy of USA,” he saids. Amidst the challenges, Jaitley said lie the opportunities with India Newsletter • 9
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the estimated unmet demand for infrastructure investment in emerging market and developing economies (EMDEs) is gargantuan, estimated at above $1 trillion a year by the World Bank. “Most importantly, the EMDEs need to carry out this huge investment in a sustainable manner. The established MDBs are now capital constrained, and with their over emphasis on processes, are unable to meet this financing challenge. A Bank like the NDB is well poised to step into the void,” he added. Chinese finance minister Xiao Jie speaking at the event said BRICS countries should work towards reforming the global economic system since voice of the emerging economies that contribute 80% of global growth remains “gravely inadequate” in multilateral institutions. Jaitley said India has proposed projects worth about $2 billion for NDB funding, which he hopes will be taken up by the Board expeditiously. “We shall work with the NDB to develop a strong shelf of projects in specific areas such as Smart Cities, renewable energy, urban transport, including Metro Railways, clean coal technology, solid waste management and urban water supply,” he added. In the annual meeting, the five member board of governors will deliberate on Bank’s strategy for the next 5 years, including issues such as the Bank’s capital, loan portfolio and expansion of Membership. “The uniqueness of NDB should lie in faster loan appraisal, a lean organizational structure resulting in lower cost of loans, a variety of financing instruments, including local currency financing, adoption of country system whenever possible 10 • India Newsletter
and flexibility in responding to the needs of the clients. These are the elements which would make NDB truly a “new” institution, and make it distinct from older MDBs (multilateral development banks),” Jailey said.
India’s economic influence in Asia Pacific to increase in next five years
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ndia’s influence in the AsiaPacific region will increase in the next five years as its economy expands and the government pursues pro-business policies, according to a survey released. Ninety-five percent of respondents in the survey by global law firm Baker McKenzie predicted that Indian economic influence in the region would grow in the coming five years, compared with 77% who saw China’s influence is continuing to expand. The US’ influence is on the decline with 16% seeing an increase in US’ sway over the region over the next five years, compared with 48% predicting a decline. “Growth rates aside, India’s influence will also stem from its attractiveness as an investment destination and a jurisdiction where domestic businesses can grow and expand beyond their borders. The steps taken by Prime Minister Narendra Modi’s pro-business government, among many other factors, have contributed to respondent sentiment that the Indian government is the most active in the region in terms of improving the ease of doing business in the country,” according to the survey. The survey got responses from 150 business leaders based in the Asia Pacific who identified the key complexities facing companies
across the region. Technology, through either disruption or the need for innovation, was picked as the biggest complexity, followed by cost pressures/shrinking margins, and technological disruption from competitors, the survey said Eighty-four percent of respondents predicted that the disruptors would likely challenge their businesses within just two years. A total of 94% of respondents see an increase in mergers and acquisitions (M&A) activity across the region, while litigation was also seen as being on the increase by two thirds of businesses. Identifying where companies and industries see complexities emerging can help both governments and businesses themselves better prepare for this rapidly changing environment, said Gary Seib, chair, Asia Pacific, Baker McKenzie. “That technology is at the top of the list is probably not a surprise to many, but the number of companies that expect disruption by competitive technology in just the next two years should give pause to any corporates who see themselves as immune to these forces,” Seib said. Ashok Lalwani, head of the India practice at Baker McKenzie, said that amid global uncertainty, the Asia-Pacific will play an increasingly significant role to fuel both international trade and investments. “This, combined with the government of India’s progressive outlook, is accelerating India’s favourable position to do business in and with, as well as strengthening the country’s influence in the region, overall.”
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Indian economy to grow at 7.4% in FY18: ADB India’s economy is set to grow at 7.4% in the current fiscal year 2017-18 against 7.1% in the previous year, on the back of pickup in consumption demand and higher public investment, the Asian Development Bank (ADB) said. In its latest Asian Development Outlook (ADO) 2017 report, ADB said while the recent gross domestic product (GDP) data for 2016-17 did not fully capture the effects of demonetisation, the slowdown did reflect a continued slump in investment. “Dragging on growth were excess production capacity, problems that past overinvestment left on corporate balance sheets, and new bank lending inhibited by too many stressed assets. Moderately higher growth is projected as consumption picks up and government initiatives boost private investment,” it said. “An array of important economic reforms has propelled India’s economic success in recent years. A continued commitment to reform—especially in the banking sector—will help India maintain its status as the world’s fastest growing major economy,” Yasuyuki Sawada, ADB’s chief economist, said.
constrained by high levels of stressed assets. Exports are forecast to grow by 6% in the coming year,” it said. Among potential risks for the Indian economy, the assessment notes risks from higher oil prices as Indian imports nearly 80% of it fossil fuel needs. “A rapid increase in the price of oil could undermine the country’s fiscal position, stoke inflation and swell the current account deficit,” it warned. ADB projected inflation to accelerate to 5.2% in 201718 and 5.4% in 2018-19 as the global economy recovers and commodity prices rebound. The report estimates of a $1 increase in oil prices raises the import bill by nearly $2 billion. In 2016-17, rising oil prices resulted in a 37.6% increase in India’s import bill. To mitigate India’s vulnerability to oil price swings, the government has proposed reducing dependence on imported oil by 10% over the next five years through more efficient domestic production and increased private investment into the sector, the report noted.
Business confidence hits record high with firms upbeat on economy The Confederation of Indian Industry (CII) business confidence index (BCI) reached an all-time high of 64.1 during the quarter of January-March 2017 as against 56.5 in the previous quarter, backed by companies being optimistic about the future economic activities and the hope that government reforms will open up various investment opportunities for companies going forward, as per CII. The rise in this index could also be due to a major improvement in the expectations index due to strong business sentiment. The BCI survey included a sample of 200 large, medium, small and micro firms, out of which 63 per cent expect increased sales, 60 per cent expect a rise in new orders, 61.8 per cent expect export orders status quo to be maintained and 65 per cent expect capacity utilisation levels to remain over 75 per cent during January-March 2017.
The ADO expects consumption to pick up as more new bank notes are put in circulation after the shock withdrawal of high-value currencies on 8 November and as planned salary and pension hike for state employees are implemented. “The public sector will remain the main driver of investment as banks continue to wind down balance sheets India Newsletter • 11
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MAKE IN INDIA Fueling Growth: DelhiMumbai Industrial Corridor
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hrough its ‘Make in India’ campaign, the Government of India aims to invigorate the country’s manufacturing sector, enhance the country’s global competitiveness, facilitate investment, foster innovation and ramp up the ease of doing business in the country. With this, the plan is to increase the share of manufacturing in the Gross Domestic Product (GDP) to 25% by 2025. This ambitious goal requires creation of a worldclass infrastructure, building a healthy business ecosystem and developing state-of-the art transport facilities. The government has been making steady progress in pursuit of this goal and its plan to build Industrial Corridors and develop Smart Cities is a noteworthy step in this direction. With a total of five planned industrial corridor projects, India is trying to bring a paradigm shift in its industrial development. Approved in 2011, Delhi Mumbai Industrial Corridor (DMIC) is touted as the world’s largest infrastructure project with a total estimated investment of USD 100 billion. The aim is to develop the corridor as a “Global Manufacturing and Trading Hub” with infrastructure linkages like power plants, high capacity transportation, assured water supply and other things that would further the objective of building a world-class infrastructure to aid manufacturing – the very essence of Make in India! 12 • India Newsletter
24 investment regions are proposed to be completed in 4 phases with 8 under Phase-I and a 1504 km long Western Dedicated Freight Corridor is planned spanning six states making it the largest infrastructure project in the world. Upon its completion, the DMIC will create 25 million job predominantly in the manufacturing sector. The government plans to build 8 smart cities, 5 power projects, 2 airports, 2 Mass Rapid Transportation Systems (MRTS) and 2 logistics hubs in the corridor
with a Project Development Fund of USD 2.6 billion and additional USD 153 million over a period of five years. The Government of Japan is investing USD 4.5 billion in Phase I of DMIC and is also providing technical assistance for the project. What makes the project both relevant and unique is its ability to contribute towards creating a strong economic base and to help keep up with the pace of urbanization. It is always being looked forward to as it promises to stimulate India’s employment
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potential. No wonder, the project featured in KPMG’s ‘100 Most Innovative Global Projects’ as one of the world’s most innovative and inspiring infrastructure projects DMIC expects Phase I to be completed by 2019. A brief description of the key projects underway is as follows: ■■ Dholera, Special Investment Region (DSIR): The region will have a total area of 920 sq.km with a developable area of 567.39 sq.km once all six Town Planning Schemes (TPS) are completed. In Phase I, a total area of 153 sq.km will be developed under TPS 1 and 2. Apart from proximity to industrial cities of Vadodara, Rajkot, Surat, Bhavnagar and Ahmedabad, DSIR will have world-class infrastructure, a Mass Rapid Transit System connecting it to Ahmedabad, a dedicated international airport and an expressway. The city of Dholera is planned to be India’s first smart city having world class infrastructure. It will offer provisions such as storm water drainage, water supply, sewerage, power, telecommunications and gas through an underground network. The state government has transferred 1178.95 hectares of land to Dholera Industrial City Development Limited (DICDL), a Special Purpose Vehicle (SPV) for the project. The construction of roads and underground utilities has already started. Total investment into the region is USD 18,086 million. ■■ Shendra-Bidkin Area (SBIA)
Industrial Development Corporation’s (MIDC) Shendra Industrial Park to Bidkin town. Upon its completion, the industrial area would be ideal for export-oriented business due to its proximity to Aurangabad city, an airport and a railway line. The industrial area is just 8 km away from the Aurangabad Airport and 15 km away from the Aurangabad City. In part I of the project, an area of 41.42 sq.km will be developed in two phases. ■■ Integrated Township (IIT) Greater Noida
Industrial Project in
The IIT project will be built by 2018 as a part of the greater Dadri Noida Ghaziabad Investment Region (DNGIR). The region is planned to include manufacturing units of cars, two-wheelers, consumer electronics, and steel. The IIT, with an overall area of 747.5 acres will further drive sustainable development of industrial activity, research & development (R&D) and manufacturing activities in DNGIR.The smart city is being developed with Information and Communication technologies, real-time governance and an MRTS, providing high-quality life to its residents.14 ■■ Integrated Industrial Township ‘Vikram Udyogpuri’ Project in Ujjain Vikram Udyogpuri project will be built as a part of the Pithampur –
Dhar - Mhow Region in Madhya Pradesh. The smart city will leverage its proximity to the temple town of Ujjain (10km) and the airport (61 km). Singlewindow clearance system will be set up in the town to attract industries from focus sectors like food processing, electronic systems, biotechnology and renewable energy. The state government has transferred1,100 acres of land to the SPV and an environmental clearance has also been obtained ■■ Global City Project in Gurgaon The Global City project is a part of the larger Manesar-Bawal Investment Region (MBIR), at Garhi-Harsaru in Gurgaon District in Haryana. The city will have integrated IT services, power, water supply and other utilities on the lines of a smart city. Upon its completion, the city will have world-class financial and business centre connected to important national highways in the region – thus acting as a growth driver. With these megaprojects at its disposal, the target is to boost employment potential two-fold, multiply industrial output by three times and increase exports by four times from the region, in the coming seven to nine years. The project is expected to fuel India’s economic growth for next 20-30 years.
Industrial
SBIA is a large-scale industrial cluster which will further extend the present Maharashtra India Newsletter • 13
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INDIAN STATE ECONOMIC PROFILE GOA Goa is located in the western region of India. The state shares its borders with the Arabian Sea to the west, Maharashtra to the north and Karnataka to the south and the east. It is traditionally known as a tourist paradise for its natural scenery, unique beaches and cultural diversity. Goa is one of the fastest growing states in the country. The state’s Gross State Domestic Product (GSDP) growth rate was at about 11.39 per cent between 2004-05 and 2015-16. The state’s per capita Net State Domestic Product (NSDP) was US$ 4,765.7, one of the highest in India, in 2015-16. Goa’s economic growth is driven by the strong performance of industrial sectors such as mining, tourism and pharmaceuticals. Goa is the second state in India to achieve a 100 per cent automatic telephone system with a solid
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network of telephone exchanges. As of June 2016, Goa had a total installed power generation capacity of 412.45 MW. Goa is also one of the few states in India to achieve 100 per cent rural electrification.
■■ The Government of India has granted the approval to the state government for constructing the Electronics Manufacturing Cluster in Tuem by providing a central assistance of US$ 7.63 million.
Goa has a well-developed social, physical and industrial infrastructure and virtual connectivity. It has an international airport that is in line with its importance as a globally-recognised leisure destination. It also has significant port infrastructure. The state has an established base for the pharmaceuticals industry and an emerging destination for knowledge-based industries such as biotechnology and IT.
■■ As of 2015-16, the number of passengers who arrived in the state on the basis of e-tourist visas was recorded to be 80,928. Moreover, the state recorded a total of 541,480 foreign tourists from over 141 countries across the globe.
According to the Department of Industrial Policy & Promotion (DIPP), FDI inflows into the state of Goa, during April 2000 to March 2016, totaled to US$ 841 million. ■■ Key Sectors:
■■ During 2015-16, the state government created a separate District Mineral Foundation under the MMDR Act, 1957, as per which the state’s mining firms need to deposit an additional amount of 30 per cent of the royalty paid to this fund. ■■ Export of pharmaceuticals products from Goa was recorded to be 5,076 metric tonnes during 2015-16.
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INDIAN TRADE FAIRS INTERESTED IN VISITING A TRADE SHOW IN INDIA? In case your company is interested in visiting a tradeshow/B2B event in India, be it one listed here or another one that came to your attention, get in contact with us via maoffice.vienna@mea.gov.in to get more information about possible assistance/subsidies.
I NTER NATI O NAL RAI LWAY EQU I PM ENT EXH I B ITI O N
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16 • India Newsletter
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9-12 August 2017
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Mumbai (July 17) • Hyderabad (July 19) Chennai (July 22) • Bangalore (July 24) Kolkata (July 26) • New Delhi (July 28).
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INVEST INDIA The Investors Desk of the Make in India Campaign The national investment promotion agency, provides handholding and facilitation services for attracting investments, including: Following up on approvals from Government departments/ agencies on behalf of the investor and the investing community. Providing handholding facilitation services from the point of arrival to the point of departure, including land/site identification and entry procedure advisory. Interacting with all States in a Hub & Spoke Model and providing investors with State policies relating to land/labour/capital and investment.Fixing meetings/ appointments between investors and different Government departments/agencies.
Contact Information
Mr. Anmol Bansal +91 9821 897 017 (Direct) anmol.bansal@investindia.org.in +91 11 2419 0300 makeinindia@nic.in
www.investindia.gov.in
The team of domain and functional experts provide sector- and statespecific inputs, and handholding support to investors through the entire investment cycle, from preinvestment decision-making to aftercare. Invest India assist with: ■■ Market strategy ■■ Business plan advisory ■■ Location identification ■■ Expediting approvals
regulatory
■■ Facilitating meetings relevant government corporate officials
with and
■■ Initiating remedial action on problems faced by investors India Newsletter • 19
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TOURISM
Bihar’s Islamic Mysticism
Maner Sharif Text: Hugh & Colleen Gantzer
T
»»»»»»»»
he dargah-shrines stand as impressive as ascetics wrapped in simple, rough, garments of wool. That homespun cloth was called suf and so those who wore it were termed Sufis. They, however, were more than ascetics. In the 8th century AD, a woman from Basra named Rabiah al-Adawiyah enunciated the Sufi ideal that the love of God was an end in itself. It was not motivated by either a hope of Paradise or a fear of Hell, thereby raising asceticism to the level of mysticism. From then on the prime quest of Sufis was to seek epiphanic experiences: ecstatic, personal, encounters with divinity. Such practices are called Tantra in Hinduism and the Charismatic Movement in Christianity. Islam terms this mystic discipline tasawwuf. The rest of the world calls it Sufism. In Bihar, that little recognised cradle of experiential faiths, we went in search of the origins of Indian Sufism. The streets of Patna were festive with Chhath
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Puja pandals. Friendly devotees clustered around when we stopped to photograph a roadside shrine. They informed us that even the Bihari diaspora celebrated Chhath wherever they were “All around the world, at this time, we worship Lord Vishnu as the Sun God.” No other land has as many coruscating variations of faith as we have. We drove 25 kms out of the capital, through rural Bihar, and turned into the grounds of an old and rather ramshackle Raj-era dak bungalow. Across a wide reservoir rose the monastery, the khanquah, of Maner Sharif established in 1180. There, in the monastery, we were welcomed by the courteous Javed Iqbal. Over sweet, black tea, biscuits, barfi and chavda, he spoke to us with quiet authority while the others held back in respect and women sat patiently on the floor in the corridor outside, waiting for his spiritual advice. In the 12th century, the great sufi savant Hazrat Imam Mohammad Taj Faquih had ‘migrated from Quad Sul Khaleel in Jerusalem’, and arrived in
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this place. Though we don’t know why he had chosen Maner, he did succeed in attracting many followers to his inspirational creed and established a monastery here. These khanquah, true to the selfactualizing conviction of Sufis, are apparently free to clone off other sub-monasteries to accommodate those who have slightly divergent views. The Maner Sharif monastery is a good example of this harmony: it has been the centre of fourteen sufi orders. The fact that they all live in amity says much for the resilient inclusiveness of their faith. In fact, though the seer returned to Jerusalem, leaving his monastery in the hands of his three sons, there was no schism! That must be unique in the annals of religious movements worldwide. We drove across to the Choti Dargah built in 1616. Its architecture, according to the official brochure, reflected a combination of the Mughal and Afghan styles. The heavy central dome with four smaller domes in the corners did hint vaguely at the architecture of the Afghan fortress of Mandu in Madhya Pradesh. We trudged up to the high plinth and the pillared verandah that encircled the hall enshrining the commemorative grave of Hazrat Makhdum Shaikh Bayazid Dewan Shah Daulat Maneri, to give him his full name and title. We walked around the cool verandah, noticed the carvings of verses from the Holy Koran on the ceiling and the graves, dotted around the grounds, covered in bright chaddars. In the central hall
was a symbolic tomb under a spangled canopy with another tomb outside the canopy. We were privileged to spread a green chaddar on the main monument which represented the tomb of the seer. By Islamic tradition, the actual grave is in a basement on a level below that of the symbolic tomb. The older Bari Dargah holds the tomb of Sultanul-Makhdom Shaikh Kamaluddin Ahmed Yahiya Maneri, the grandson of the founder. He died in 1291. No one was quite sure when the dargah was built though we were told that the mosque within its walled garden was erected in the late 13th century and the pillared court in the 14th. While its grounds and environs are more impressive than the Choti Dargah, it is, in effect, just a walled enclosure around a central pavilion holding the tomb beneath a ceremonial canopy. Outside, there is an intriguing statue of a mythical horse-lion, which some local people identified as a Shadul. A young man informed us, solemnly, that it is the protector of the dargah and it comes alive and attacks anyone who threatens the sanctity of the tomb. Such thoughts might be dismissed as heretical by those who hew to the letter of the written word. But then, while the Sufis adhere strictly to the tenets and obligations of the Holy Koran, they prefer a more intuitive path in quest of their epiphany.
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