INDIA NEWSLETTER Published by the Embassy of India,Vienna Year 2 | Issue 19 | July 2012
science & technology
India Newsletter | 1
News of interest Snapshot of June Highlights
Below are the highlights of the supplementary annual Foreign Trade Policy:
• Government aiming at 20 per cent export growth in 2012-13 • Two per cent interest subsidy scheme extended till March 2013 • Zero per cent duty EPCG scheme for technology upgradation extended till March 2013 • Incentives for exports from northeastern states • Shipments from Delhi, Mumbai through post, courier or e-commerce to get export benefits • Single revolving bank guarantee for different export deals • Seven new markets added to Focus Market Scheme • Market linked focus product schemeextended till March 2013 for apparel exports to US and EU • Ahmedabad, Kolhapur and Shaharanpur new towns of export excellence • Government to come out with new guidelines to promote SEZs • Focus on market diversification to continue • Steps announced to reduce transaction cost of exports • Foreign Trade Policy document made more user-friendly • 13 shows abroad to promote Brand India.
Bilateral trade between India and Germany would touch 20 billon euros ($25 billion) during this calendar year despite debt crisis in Europe and the global economic slowdown, External Affairs Minister SM Krishna said. “As our largest trading partner in the Europe Union, bilateral trade with Germany is going strong. We are optimistic of the trade between the countries achieving 20 billion euros in 2012 as against 18 billion euros ($22.5 billion) in 2011 despite the banking crisis in Europe and slowdown globally,” Krishna told reporters at a joint press conference with visiting German Foreign Minister Guido Westerwelle.
India has overtaken the US to become Nigeria’s largest market for exports, according to the first quarter Trade Statistics released by the oil-rich African country’s National Bureau of Statistics. The moving of the US to the second po2 | India Newsletter
sition is seen as a major development for Nigerian and Indian trade relations, given that the US had remained the country’s largest export market since 1964.
At a time when domestic growth sentiments have weakened dramatically while global uncertainty has increased with talk of Greece exiting the euro zone, the government announced several fiscal measures for exporters and manufacturers that were cheered by the industry. As a part of the supplement to the Foreign Trade Policy (FTP) 2009-14, Commerce, Industry and Textiles Minister Anand Sharma extended the interest subsidy scheme and the export promotion capital goods (EPCG) scheme by another year till 31 March 2013.
India will see a turnaround in its economic fortunes in the July-September period, said Mr Montek Singh Ahluwalia, Deputy Chairman, Planning Commission. Emphasising that the growth of 6.5 per cent last year was a good performance, going by global standards, Mr Ahluwalia said he was optimistic about the growth prospects in FY12-13. “We expect a turnaround. The economy is expected to grow at about 6.5-7 per cent in the current financial year,” he said. The fundamentals of the economy have not changed much from the time when the growth was at 9 per cent, Mr Ahluwalia said at the sidelines of the Skoch summit.
India’s foreign exchange reserves rose by $2 billion to 289.396 billion in the week to June 15 amid intense pressure on rupee vis-a-vis dollar on strong import demand for the greenback. Forex reserves however dipped by $5 billion since April as Reserve Bank of India had to sell dollars to curb volatility in the forex market.
Describing India as dynamic, young, and emerging, Coca-Cola Chief Executive Officer, Muhtar Kent, on Tuesday, announced that his company would invest $5 billion in the country between 2012 and 2020.
M&A / JV / MoU
The Karnataka government signed memoranda of understanding (MoUs) for a total investment of about Rs 5 lakh crore (€70 billion) at the inaugural day of the two-day Global Investors’ Meet (GIM 2012). The second edition of the event saw GVK Group, Tata Group, Suzlon, Embassy Group,Welspun, Chettinad Cement, Future Group, Ascendas, JSW Steel, Bosch and Rajesh Exports among other major investors. “We had set a target of attracting Rs 5 lakh crore worth of investments in this edition of global investors’ meet. However, we have exceeded our own target and have signed MoUs for over Rs 5 lakh crore worth of investments,” Murugesh R Nirani, Minister for Large and Medium Industries told reporters. He said the MoUs were signed in the areas of infrastructure, energy, mining, education, tourism, hospitality and automobile, among others.
IT services company Infosys has announced that it has signed a memorandum of understanding (MoU) with the State of Israel. According to a release, this MoU is a part of the ‘Global Enterprise Collaboration Program’ developed by the Office of the Chief Scientist of Israel to accelerate innovation through a global ecosystem. Speaking on the occasion, Mr Subu Goparaju, Senior Vice-President and Head of Infosys Labs, said: “This collaboration aligns with our vision to bring together different innovation networks from around the world and make them relevant to our clients.” The MoU creates a framework for industrial cooperation between Infosys and Israeli corporations in cloud computing, information security, analytics and other areas.
German in-car entertainment brand, Blaupunkt has finally set up shop in India, through a joint venture (55:45) with its current India partner AutoSonics India. Though the brand has been present in India for almost 15 years now, it was through multi-channeled distribution networks. The JV is being fashioned as a re-entry of the brand in the Indian market. Lars Placke, CEO, Blaupunkt, says the JV does not change much on one level. And yet, he says, “On a second level, it has brought us closer to the customer. He will now be dealing directly with Blaupunkt, meaning a higher commitment on
News the brand’s part to customer as well as a wider product portfolio.”
Oil and Natural Gas Corporation (ONGC) and China National Petroleum Corporation (CNPC) have signed a memorandum of understanding (MoU) for co-operation in the hydrocarbon sector. The MoU was signed by Sudhir Vasudeva, Chairman and Managing Director of ONGC, and Jiang Jiemin, Chairman of CNPC. This MoU will be a crucial signpost for the economic powerhouses of India and China as both countries look to establish and consolidate their energy portfolios globally. The companies already set up a robust co-operative relationship through their respective affiliates, mainly in the areas of upstream exploration and production business.
DFG, the German Research Foundation, has expanded its India presence with the formal launch of a Centre in Hyderabad. Dr Torsten Fischer, Director, DFG India said it is collaborating with the Department of Science and Technology on about 40 bilateral research projects in science and engineering currently .Two international research groups have also been started at the University of Hyderabad. DFG is funding projects to the tune of $8-9 million in India.
The Japanese are learnt to have zeroed in on a place near the proposed Maruti-Suzuki plant site - which is spread on about 700 hectares (ha) at Hansalpur, in North Gujarat - to set up a new auto component-cum-engineering park. Well-placed Sachivalaya sources said, a high-level delegation consisting of senior officials of the Japanese External Trade Organisation (JETRO) was here in Gandhinagar after visiting the site and told Gujarat government officials that the location would be “ideal” for Japanese units to come and invest in the nearby region for manufacturing auto components and other engineering products.
Toyota Kirloskar Auto Parts is setting up its third manufacturing plant for automotive components at Bidadi, about 32 km from Bangalore. The company is investing Rs 500 crore to set up the plant. Toyota Kirloskar Auto Parts is a joint venture between Toyota Motor Corporation, Japan, Toyota Industries Corporation, Japan, and Kirloskar Systems, Bangalore. The Toyota group holds
90 per cent stake in the company, which already operates two manufacturing plants at Bidadi — for exports, as well as the domestic market. At these plants, the company manufactures manual transmissions for ‘Fortuner’ units manufactured in India, Thailand and Argentina. It also produces front and rear axles and propeller shafts for the ‘Innova’ units made in India.
The US-based GE Energy is focusing on localising products for the Indian wind energy sector. The company will be launching products of larger capacities to capture low wind speeds as prevalent in India, Mr Banmali Agrawala, President & CEO, GE Energy, told Business Line. “The products will be coming out in a year’s time and have been developed here,” he said. Also, the company is seeing interest in these localised products from other emerging markets as well, Mr Agrawala added. GE at present makes wind turbines of 1.5 MW and 1.6 MW capacities.
The European Business and Technology Centre (EBTC) plans to initiate a pilot project to demonstrate “smart city concept” at the industrial town of Haldia in West Bengal. The project would focus on lowering carbon footprint. EBTC is an European Union initiative to assist business units in India and Europe on clean technology transfer. EBTC has roped in the Bengal Chamber of Commerce and Industry for the pilot project. According to Mr Poul V. Jensen, Director, EBTC, the pilot project would focus on bringing down environment related hurdles that the industrial units in Haldia face while expanding their operations. “We are planning to implement a pilot project to showcase smart city concepts in lowering carbon footprint. We have decided to carry out a feasibility study in Haldia,” Mr Jensen told.
GE India said it would invest $200 million (around Rs.1,100 crore) in a new facility that would come up at Chakan, near Pune, to develop localised products and solutions for the energy sector. In a statement, the company said that the plant, spread over 68 acres and GE’s first such in India, would commence operations of its first phase in 2013. The facility will initially focus on energy products and technologies to cater to the industry needs for power generation, transmission and distribution, measurement and control. In addition, the
company said, it would package its environment-friendly technologies such as hybrid batteries for energy storage and biogas power generation technologies at the plant.
The Commerce and Industry Minister, Mr Anand Sharma has called for better understanding between the pharmaceutical regulatory regimes in India and Brazil and for harmonization of the standards of the two countries in the sector. He said both the countries must ensure that regulatory barriers do not inhibit joint research initiatives. “We would also encourage an active collaboration between our patent offices to develop a greater understanding of the procedural requirements for patent application for both sides to enable a joint development of patents,” he said speaking at the India-Brazil Round Table on Pharmaceutical sector at Sao Paulo. India was concerned over the barriers faced by Indian pharmaceutical companies in Brazil, including procedural delays, and the consequent increase in costs of exports. The procedural delays happen during inspections, clearances and registration by the Brazilian authorities. Mr Sharma said, “Over the years, multinational drug cartels have come to dominate this industry on the strength of an exclusivist intellectual property regime. In this context, India-Brazil health and pharmaceutical collaboration holds the potential of being key contributor for assuring affordable healthcare for our people.”
India and Finland signed a comprehensive social security agreement that will relieve their workers from double taxation while working in each other’s country. Under the agreement, India workers on short term contracts of up to five years will not be required to make any social security contribution in Finland provided they continue to make social security payments India. The relief will be available to Indian workers even if an Indian company sends its employees to Finland from a third country. Officials said similar relaxation will be provided to Finnish citizens working in India. Currently about 5,000 Indians are living in Finland most of whom are working as professionals and self-employed.
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India in talks with Germany, UK Investments in DMIC Projects
ndia is seeking investments from Germany and the UK to develop National Manufacturing and Investment Zones, proposed under the Delhi-Mumbai Industrial Corridor (DMIC) project. “Major countries are coming forward to be partners for establishment of NMIZs. Japan has already come and has made major commitments.We are in active discussion with Germany and the UK and you will see things changing,” Commerce and Industry Minister Anand Sharma said. Sharma said that Germany can help in developing green technologies. Seven National Manufacturing and Invest-
ment Zones (NMIZs) have been notified along the DMIC and the project envisages development of world-class industrial townships on a public private partnership
approved an expenditure of Rs 18,500 crore (US$3.3 billion) on development of infrastructure for the project, which will get a boost from the new NMP.
The National Manufacturing Policy (NMP) would be a key enabler for setting of NMIZs. These planned big enclaves could even subsume special economic zones.
The mega-infrastructure project will cover 1,483 km between Delhi and Mumbai. The NMP seeks to raise share of the manufacturing sector in the Gross Domestic Product (GDP) to 25% from the present 15-16% in the next decade.
The $90 billion DMIC project is being developed in collaboration with Japan as a manufacturing and trading hub. Japan has committed to invest $4.5 billion in this project. The Union Cabinet had
It envisages facilitation by the government in infrastructure development and improvement of the business environment through rationalisation and simplification of the regulatory framework.
single window clearance for exporters Developments in export policy
he Finance Ministry is set to unveil a new ‘single window’ clearance system for exporters. The system will allow electronic filing of shipment details by exporters and will facilitate clearance of shipments for exports by various government departments. Similarly, importers will no longer have to seek the services of ‘consultants’ to find out the effective tariff on their import consignments. These are some of the measures which the Central Board of Excise and Customs (CBEC) plans to introduce for trade facilitation. The measures were discussed during the twoday annual meeting of Chief Com-
missioners and Directors General of Customs, Central Excise and Service Tax.
some other departments to get ‘No objection’ certificates.
A highly-placed official source told, “Under the new system, the exporter will have to file a single application electronically.This will have all the parameters and will be accessed by all the ministries. All of them will give their replies on the same server. As soon as the custom authorities get all the ‘No Objections’ online, the shipment will be cleared for export.”
The single window system will remove all these hassles and cut transaction costs, the source claimed. However, he refused to give any time frame for the implementation of this scheme.
At present, the exporter has to file different applications with various authorities for clearance. For example, if somebody is exporting a food item, he needs to knock on the doors of the Food ministry, followed by Food Processing, Health and
Online tariff is another trade facilitation measure in the offing. Under this system, any exporter or importer just needs to fill in specifications and quantity online to get the effective rate of duty and the amount he has to pay. “However, this will be just a guidance and it will not have legal binding,” the source clarified.
India has institutional capacity to become world power By Robert Blake, Obama Administration’s point man for South and Central Asia
obert Blake, Obama Administration’s point man for South and Central Asia, said the rapid strides made by the two sides in their ties over the last 10 years indicates that “sky is the limit” for the relationship between the two countries to grow. “It (India) does have the institutional capacity... that’s why we invested so much of our time and energy to this relationship. “The President has said this is going to be one of our defining partnerships of
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the 21st century and we believe that,” the Assistant Secretary of State for South and Central Asia, said. Following his remarks on India-US relationship at an event organised jointly by the Asia Society, East West Center and India-US World Affairs Institute, Blake was responding to a question if the US believes that India has the institutional capacity to become a global power. “We believe it because there is growing strategic convergence between our two countries.We are two great democracies.
We are two great market economies... and perhaps most of all we have capacity for innovation,” Blake said. Earlier in his remarks on ‘The United States and India: Continued Strategic Engagement’, Blake said: “There is perhaps no country in the world, with whom we have travelled faster and further than India over the last 10 years”. The Indian American community, he noted, has played a crucial role in this.
Indian Economy expects revival in FY13 GDP growth expected at 7.3%
ven after the Government data showed a sharp fall in FY12 growth numbers and the April factory output data at a poor 0.1 per cent, a leading economic think tank said it expects a revival in fortune and pegged GDP growth for the current fiscal at 7.3 per cent. “This expectation (of revival) assumes that the supply bottlenecks that caused the sharp fall in the growth during 201112 will be eased during 2012-13,” the Centre for Monitoring Indian Economy (CMIE) said in its monthly report. Official data released late last month had pointed out to quarterly growth falling to a nine-year low of 5.3 per cent in the three months ended March 31, while the same for fiscal 2011-12 stood at 6.5 per cent, lower than the 6.7 per cent clocked
during the peak of the credit crisis in 2008-09. This has led to a rash of downward revisions of GDP growth forecasts by rating agencies, investment banks and development finance institutions, with some estimates going below the psychological 6 per cent mark. The sharp fall in growth is being blamed on weak global conditions, especially eurozone’s sovereign credit crisis, drastic fall in the rupee value and a host of domestic factors like ‘policy paralysis’, scams, fiscal imprudence and elevated interest rates due to high inflation. In support of its estimate, CMIE said it expects improvements on all worrying issues on the supply side, which have dented growth, like an 8.3 per cent rise in coal
production versus 1.2 per cent in FY12 and a 5.3 per cent jump in natural gas output compared to 9 per cent drop last fiscal. “The improved supply of coal, gas and crude oil would help higher growth in manufacturing and electricity sectors.” Despite the Index of Industrial Production (IIP) growth rate falling to 0.1 per cent in April, CMIE said it expects manufacturing to grow at 5 per cent in FY13. “Following the acceleration in mining, manufacturing and electricity sectors, the industrial sector growth is expected to accelerate to 6.3 per cent in 2012-13 compared to 3.4 per cent in 2011-12,” the Mumbai-based agency said. CMIE said it expects agriculture to grow by a modest 2.4 per cent during the current fiscal.
India climbs into top 10 wealth markets list Datamonitor’s 2012 global wealth market report
ndia is poised to occupy the sixth position in the top 10 wealth markets this year after edging out Spain for 10th slot in 2011, says a report. “Uncertainty about the future of the euro and the worsening of the sovereign crisis in Europe are predicted to cause continuing problems, but many emerging markets are expected to continue marching ahead,” according to Datamonitor’s 2012 global wealth market report. The report further said the world order of wealth markets is witnessing a tilt towards emerging economies which are
expected to overtake their Western European counterparts going forward. The top 10 wealth markets, in terms of dollar millionaire holdings at the end of 2011, in descending order, were the US, Japan, China, the UK, Germany, Italy, Canada, France, Brazil, and India, it said. Moreover, the cumulative value of the liquid assets held by millionaires in the emerging economies of Brazil, China, and India are likely to triple to USD 4.6 trillion from USD 1.5 trillion between 2006 and 2015. India, in particular, will experience explo-
sive growth, and is anticipated to jump sixth place by the end of 2012, the report said. Top 10 wealth markets in 2015 will be the US at number one, with China in second place, followed by Japan, the UK, Germany, India, Brazil, Italy, Canada, and France, it added. Some of the mature markets have, however, proven more resilient, with the UK and the US, in particular, expected to perform strongly. The US will remain the largest high net worth market in the world till 2015, the report said.
QUOTE OF THE MONTH This year, we are planning to invest about US$ 1 billion in India alone.This will be the largest investment in a single country by IFC in a year. Also, IFC’s largest country exposure is in India at US$ 3,766 million worth of committed portfolio, which is about 9 per cent of IFC’s global portfolio.” Karin Finkelston,Vice President Asia Pacific, International Finance Corporation (IFC)
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India is an incredible investment destination From the Finance Ministry’s Office
mid a barrage of criticism from various global agencies on economy, and rating outlook downgrades, the government has come out with a ‘fact book’ listing the strengths of India such as political stability and sound financial system.
growth prospects fuelled by ongoing economic liberalisation and strong domestic demand. India has stable financial system, strong external liquidity position, high degree of political stability, low susceptibility to event risk and strong financial regulatory framework, it noted.
Emphasising the strong economic fundamentals, the Finance Ministry’s fact book titled ‘India: The Incredible Investment Destination’ has said the country’s real GDP is 60 per cent higher than what it was five years ago, while FDI soared by whopping 414 per cent to USD 46.8 billion in 2011-12.
The latest fact book, with detailed factual descriptions, comes against the backdrop of rating agencies -- Standard and Poor’s and Fitch -- downgrading India’s credit outlook to negative from stable. In recent weeks, many global financial services firms such as Morgan Stanley also lowered the country’s growth forecast.
The report highlights the country’s good
India’s exports have increased by nearly
200 per cent to over USD 300 billion and investments by Indian firms abroad have jumped by about 325 per cent in the past five years through 2011-12, as per the report. Further, the report pointed out that India’s strong growth fundamentals are evident as the long term industrial output continues to strengthen with robust consumption, positive business sentiment and strong export growth. Citing IMF reports, it also noted that among emerging markets, India is next only to China with respect to share in world GDP.
India 5th most attractive emerging market Report on Retail Investment
ndia has been ranked the fifth most attractive destination for retail investment among 30 emerging markets because of rising disposable incomes and rapid urbanisation. Even though its ranking slipped from the fourth spot in 2011, India has been placed ahead of the UAE, Saudi Arabia, Indonesia and Russia. India (5th) remains a high-potential market with accelerated retail market growth of 15 to 20 per cent expected over the next five years, supported by GDP growth of 6 to 7 percent, rising disposable income, and rapid urbanisation,” US-based global management consulting firm A T Kearney said. Changes in FDI regulations were a ma-
jor story in India last year. The changing FDI climate has provided an interesting dynamic to several international retailers’ entry and expansion plans for India, it added. According to the entity’s Global Retail Development Index (GRDI) 2012, Brazil is the most alluring market for investment in the retail sector, followed by Chile (second), China (third), Uruguay (fourth) and India (fifth). Noting that Europe faced another year of economic turmoil in 2011, developing countries forged full speed ahead. “With consumer confidence improving and spending increasing, global retailers continued their expansion in to these
markets. In the past five years, US-based WalMart, Francebased Carrefour, UKbased Tesco and Germany based Metro Group saw revenues in developing countries grow 2.5 times faster than revenues in their home markets,” the report said. It added that technology is transforming the way retailers operate in developing markets. Shopper’s expectation and behaviours are evolving, driven by both economic climate and increased access to information through technology.
India to become 8th largest shareholder in IMF From the Finance Ministry’s Office India is set to become the eighth largest shareholder in the IMF after quota reforms which are likely to be finalised at the multilateral agency’s Annual Meeting at Tokyo in October. Once the quota reforms are carried out, India’s share at IMF is set to rise to 2.75 per cent from 2.44 per cent, making it the eighth largest shareholder in the multilateral agency from its present 11th position. 6 | India Newsletter
“The quota reforms at the IMF are likely in October at the Annual Meetings of IMF and World bank in Tokyo,” a Finance Ministry official told. During G-20 meeting summt, Prime Minister Manmohan Singh had announced that India would contribute USD 10 billion to the IMF’s USD 430 billion bailout fund for the euro-zone. India’s contribution was part of a pledge by the G20 nations made in April to sup-
ply the IMF with extra firepower. The implementation of the quota reforms has been delayed as countries such as the US have not yet ratified the proposal. The issue of quota reforms came up for discussion at the recent G20 summit at Los Cabos and the world leaders had underlined the need for expeditious completion of the quota reforms to give more say to emerging economies.
India engaged in joint research with 6 countries From the Department of Science and Technology (DST) India has inked pacts with six countries, including the US and Australia, for collaborative research in the field of science and technology to be undertaken at a joint investment of $180 million over the next five years, a senior Department of Science and Technology (DST) official said. “We have plenty of them. We have about 83 agreements on research collaboration with various countries. We have committed $180 million on a five-year budget with six countries..”, DST Secretary, Mr T. Ramasami, told. Of the total, he said the US and Australia
have jointly put $125 million with India. “It is several instruments of collaboration which have been built on a common front,” Mr Ramasami said, adding the agreements were aimed at promoting “research collaboration” between the countries.
Earlier, delivering his address on ‘Successful Indo-French Science and Technology Cooperation’, he said there is a proposal to set up a common institute for undertaking research studies on water.
Noting that 10 years ago India had signed similar research agreements with the US, he said last year it was signed between Russia and Germany.
“It is coming up at the Indian Institute of Science, Bangalore. It is not a separate entity. It is a virtual institution where scientists from France and India will work together,” he said.
From researchers’ point of view, he said, “India is not looked upon as a donor or a giver (in a collaboration), but as a partner.”
Stating that scientists at the Centre would work on “advanced research technologies” he said “today’s science becomes tomorrow’s technology.
India HAS POTENTIAL TO BECOME R&D HUB Research: Global R&D Benchmarking: FY2011 A study says India has become a key contributor in global research and of growth in the Asia-Pacific region, playing host to one-third of top 1000 R&D spenders in the world. The study done by market advisory firm Zinnov, ‘Global R&D Benchmarking Study: FY2011’ analyzed trends in R&D investments globally. After witnessing a decline in global R&D spending in FY2010, the study says the FY2011 has seen an increase in spending and the potential for India to be among the top nations for R&D has only gotten stronger. Commenting on the study, Sidhant Rastogi, Director - Globalization Advisory, Zinnov, said: “The sentiment on the role of R&D in driving the future continues to remain positive across geographies, sup-
ported by the significant increase in R&D spending in FY2011. Global R&D investments have grown by 8.2% as compared to previous year FY2010.This growth has been primarily driven by organizations in the semiconductor, industrial and consumer hardware and electrical & electronic sectors”. “India definitely has the right potential to become a key R&D hub, not only in software for which it has gained recognition globally, but also in other verticals such as aerospace, automotive and defense”, he added. One of the key highlights of the report is that there is a talent pool of 220,000 in MNC subsidiaries in the country, and these MNCs have spent $77.5 billion on the headcount in India in FY2011 alone. The study also found that the opportunity areas for India to attract R&D investment span over 13 sectors,
with software being the most invested-in sector. Global net sales and global R&D spending have grown at 13.55% and 8.2% respectively with the contribution of spend divided across North America, European Union and APAC regions. The total R&D investment globally is on the rise, and the North America and EU region continue to dominate. The contribution of R&D investment from across geographies is 36% for North American companies, 34% for European Union headquartered companies and 7% for APAC companies. Though the APAC regions contribution (as a percentage of global R&D spend) is seemingly small, what is noteworthy is that within the region R&D investments have increased a significant 28% as against the previous year.
THE MONTHLY ECONOMIC AND COMMERCIAL REPORT (ECR) The Indian Embassy, Vienna, issues, on a monthly basis, the “Economic and Financial Report (ECR)”. Different from this “India Newsletter”, which focuses on India-related information to the Austrian community, the ECR focuses on Austria and India-Austria-related trade and business matters. The reports are available for download from the Embassy’s Online Business Centre at http://www.indianembassy. at/?page_id=1215. If you wish to receive the ECR by email as it is issued monthly, please email a request to email@example.com
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Fy’13 to be a turnaround year for indian economy By Union Finance Minister Pranab Mukherjee
Fall in tax-GDP ratio Expressing concern over the fall in taxGDP ratio, Mr. Mukherjee asked the taxmen to work ‘relentlessly’ and take up the challenge in their stride and pointing to the direct tax collection target of Rs.5.70 lakh crore for 2012-13 — even as the total collection during 2011-12 at Rs.4.95 lakh crore was a tad lower than the revised target of Rs.5.05 lakh crore. “I do feel this target is moderate and can be achieved … At a general level, there is an urgent need to reverse declining trend in tax-GDP ratio by augmenting collections,” he said, while noting that the ratio which was near 12 per cent in 200708, dropped to around 10.5 per cent in 2011-12.
With no headroom left for yet another fiscal stimulus package to spur economic growth, which tapered down to 6.5 per cent in 2011-12, Finance Minister Pranab Mukherjee, sought to pin hopes on declining global crude oil prices and a normal monsoon for a turnaround during the current fiscal. Addressing top officials at an annual conference of the Income Tax Department, Mr. Mukherjee said: “We are taking all necessary steps to ensure that we come back to the path of the targeted GDP [gross domestic product] growth. Of course, it will take some time ... but from this year we expect to make a turnaround.’’ Even as a GDP growth at 6.5 per cent during 2011-12 is one of the highest globally in the current uncertain economic environment, it marks a slump to a nineyear low from a robust 8.4 per cent expansion posted for the two previous fiscal years. Alongside, in the absence of any fresh reforms and headroom for fiscal manoeuvring in the wake of high inflation and widening fiscal and current account deficit, global financial services firms have also been lowering the country’s growth forecast for 2012-13 further to sub-six per cent. Global uncertainty The Finance Minister conceded that chances of offering fresh fiscal incentives 8 | India Newsletter
to catalyse economic growth were remote. “The second round of global uncertainty and the slowdown has come rather quickly on the heels of the previous one, with practically no headroom for running a pro-active fiscal policy,” he said. It may be recalled that while the impact of the global meltdown of 2008 on industry was largely softened by extending stimulus packages worth Rs.1.86 lakh crore (€28 billion) in phases, such a cushion is not available to the government this time round as the fiscal deficit is already at a high and adhering to the target of 5.1 per cent of the GDP during the current fiscal may turn out to be difficult. Besides, with the launch of second generation reforms — barring the Direct Taxes Code (DTC) proposed to be rolled out from April 1, 2013 — facing a number of hurdles, the options before the government are limited. Not surprising, therefore, that the Finance Minister sought to highlight some of the positives in the current gloomy scenario. Mr. Mukerjee pointed out that apart from the fall in crude prices, the interest rate cycle had been reversed, there was growth in the mining sector, turnaround in investment growth rate and there were predictions of a normal monsoon. “All these factors should help in recovery of domestic growth momentum,” he said.
As for roll-out of the DTC, the Finance Minister asked the I-T Department to prepare itself for the switch from the Income Tax Act, 1961, to the new direct tax regime. “I have indicated that the amended Bill will be introduced in Parliament in the monsoon session. I am hoping that the DTC will be effective from April 1, 2013 … All this [the transition] has to be completed in a manner so as to avoid inconvenience to tax payers and also to sustain the revenue buoyancy,” he said. Black money menace On the steps taken to curb the black money menace and deal with the unaccounted money stashed abroad by Indians, Mr. Mukherjee said the government was in the process of expanding the network of Income Tax Overseas Units (ITOUs) to collect information on such illicit funds on real time basis. While the government had commissioned a study on unaccounted income and wealth within and outside the country which is expected to be completed in September, Mr. Mukherjee said it was also examining the report of a committee on ways to strengthen the existing laws against black money. “I hope that these two studies will help in identifying the gaps in the present legislative and administrative framework and shall help us in checking the menace of black money through an effective policy response,” he said.
Affordable power is cornerstone of growth An Interview with John Rice,Vice Chairman, GE
his should be music to the ears of the government, which has been pilloried by domestic investors and global rating agencies for policy paralysis, tardy reforms and slowing growth. John Rice, vice-chairman of GE and the second most important voice (after Jeff Immelt) at the infrastructure-to-financial services multinational is still prepared to back the India growth story even with a slight blip. Rice, who recently took over the responsibility to lead the company’s global growth operations based in Hong Kong, was in Pune at the groundbreaking ceremony of its newest investment in India-a Rs 1,100 crore multi-modal facility—feels that even a 6 % growth in India is much better than what other markets offer. Why is the $147-billion conglomerate so bullish about India? TOI caught up with Rice for an interview on a slew of issues—growth slowdown, the Eurozone crisis—and the way the company was reorienting its strategy to deal with them. Excerpts: Q: India has been facing a lot of criticism on the pace of reforms, slowing growth and the absence of a roadmap to deal with it. Global rating agencies have sought to downgrade the country below investment grade. How does GE react to those concerns while investing in India? A: The whole world is slowing down. So, we see a slower GDP forecast everywhere. That doesn’t change our longterm view on where we need to invest. We see our opportunities in new markets. If India grows at 6-7% compared to 8-9%, it’s still a good growth when you look around the neighbourhood. India, along with China and the US, will be among the top 5 economies in the world. Besides, India and China will be able to contribute to shareholder value that is equivalent to the rest of the world. As for policy paralysis, a lot of countries need to take tough decisions on reforms. Q: What would you want the government in India to do? A: The cornerstone of economic growth is availability of affordable power. If you don’t have electricity, it’s really hard to sustain high growth rate and also to cre-
ate the ability to improve lives of people at the bottom end of society. Healthcare is another important area to focus on.
innovation. What is the new buzzword or management thinking at GE?
Q: How is GE preparing to deal with the turmoil in Europe... Is there a strategic shift?
A: I am not qualified to give the next buzzword, there are lots of smart people to do that. I combine globalization and localization. We look at how to leverage our global strength to be a truly great local company. It’s a balance between global and local, that great companies will figure it out. It’s a journey probably that has no end.
A: It doesn’t necessitate a different strategy at macro level. If you look at our industrial businesses, they are focused on infrastructure development and those are part of the country’s renaissance to get things going again. Europe is not as homogeneous as we make. There is big difference in growth prospects of North Europe and South Europe, East and West Europe. Q: What’s your progress into nuclear power in India? A:Well, I am encouraged by what we hear is the progress, but many companies that are involved want important liability protection before we get our projects here and that’s not the current environment in India.We are in dialogue about that, we will not enter into production facilities without that. Q: GE has gone through various stages of thinking right from globalization to localization to reverse
Q: How has management thinking changed between the times of Jack Welch and Jeff Immelt, both very inspirational leaders? A: I don’t know if I would say that. Jack was operating for a period of time and Jeff was operating for another period of time. I won’t necessarily conclude that it’s different. In 1990 things required GE to be organized the way it was. As we moved into the next decade, it was clear that it was less important for us to be in the engineering plastics and media segments and more important to focus on infrastructure.
If India grows at 6-7% compared to 8-9%, it’s still a good growth when you look around the neighbourhood. India, along with China and the US, will be among the top 5 economies in the world. India Newsletter | 9
SCIENCE & TECHNOLOGY Indian Industry Sector Close-Up
ndia is among the top-ranking countries in the field of basic research. Indian Science is one of the most powerful segments for growth and development, especially in the emerging scenario and competitive economy. With an annual growth of over 12 per cent in the number of scientific publications in Science Citation Indexed (SCI) journals during the last three years, India posted a significant improvement in its global ranking. Scientific knowledge and expertise, innovation, high technology, industrial infrastructure and skilled workforce are the key factors that have driven the progress of the country to a major extent. The Indian space technology has come a long way in terms of infrastructure as well as investments. India is the fifth largest consumer of energy globally and expected to become the world’s third biggest energy consumer by 2030, leaving Japan and Russia behind. India has been ranked as the third best investment destination in renewable energy sector, next only to China and the US, as per a recent report by Ernst & Young (E&Y). Research and development (R&D) is an inseparable part of science and technology, with India fast emerging as the global R&D hub. Presence of world class institutions, a robust intellectual property regime and a rich talent pool of technical manpower available at a very competitive cost are major factors that are making India a viable destination for global researchers. The Department of Science & Technology, Ministry of Science & Technology, plays a key role in promotion of science & technology in the country. The department has wide ranging activities ranging from promoting high-end basic R&D of cutting edge technologies on one hand to service the technological requirements of the common man through development of appropriate skills and technologies on the other. The year 2011-12 is a land mark year for the Department of Science & Technology. It earmarked the completion of 40 years of service by the Department to the Science & Technology sector since its establishment. 10 | India Newsletter
nology-Lockheed Martin India Inno-
“We need a new wave of investment from the private sector so that young people will be encouraged to seek a career in science,” according to Dr Manmohan Singh, Prime Minister of India.
vation Growth Programme (IIGP)
R&D services excluding basic research and setting of R&D/academic institutions which would award degrees/diplomas/ certificates would be allowed 100 per cent foreign direct investments (FDI) under the automatic route.
to energy and environmental initia-
Some of the major investments in the sector are as follows:
• Deutsche Forschungsgemeinschaft (DFG), the German Research Foundation, has expanded its India presence with the formal launch of a Centre in Hyderabad. It is collaborating with the Department of Science & Technology on about 40 bilateral research projects in science and engineering currently, said Dr Torsten Fischer, Director, DFG India
• The Union Ministry of Science &
Technology has selected three consortia that will receive a grant of Rs 125 crore (US$ 22.3 million) from the Centre. The funding will be over five years, under the Indo-US Joint Clean Energy R&D Centre
• The Department of Science & Tech-
signed a record of 50 commercialisation agreements. A large number of deals involved technologies related tives
• Bosch Group will set up an independent research centre at the Indian Institute of Science (IISc) with an investment of Rs 140 crore (US$ 25 million). The proposed investment will be from the German major’s global Bosch Inter Campus Programme
• Intel Future Scientist Programme developed in India, aims to sustain the innovative streak in students, has been launched by the global chip maker. The programme empowers teachers to transform science and math education in their classrooms and aims to reach about 50,000 girls to help them develop scientific skills and expertise
of the most powerful segments for growth and development, especially in the emerging scenario and competitive economy.
Industry Government Initiatives The Government of India has taken some initiatives to further promote science & technology in the country.
plications, including 20 million solar lights, also planned to be installed during the same period
• The Government of India is contem-
plating to increase expenditure on R&D from current 1 per cent to 2 per cent of gross domestic product (GDP) by the end of Twelfth Five Year Plan
• India and the US pledged to step
up their bilateral collaboration in the field of science and technology to boost innovation in key areas of clean energy, environment and high technology to spur economic growth
• India has drawn a nuclear power
program wherein it aims to have 20,000 MW nuclear capacity (from the current 5,000 MW) on line by 2020 which would eventually boost up to 63,000 MW by 2032, getting considerable support from foreign technology and fuel.The plan intends to supply 25 per cent of electricity from nuclear power by 2050
• The African Union Commission will
continue to engage with the Department of Science & Technology, to identify areas of common research interest which have regional and continental relevance
• The Government targets to set up
1,100 megawatt (MW) grid-connected solar plants including 100 MW capacity plants as rooftop and smaller solar power plants for the first phase of the National Solar Mission till March 2013.The Government has approved US$ 974.65 million for the mission, according to Dr Farooq Abdullah, Union Minister of New and Renewable Energy
• The Government of India plans to
• India’s first indigenous all-weather
Radar Imaging Satellite (Risat-1) was launched successfully on board the Polar Satellite Launch Vehicle (PSLV)C19 from Sriharikota in Andhra Pradesh, on April 26, 2012. Its images will facilitate agriculture and disaster management
• The Union Budget proposal to ex-
tend the weighted tax exemption for in house R&D by another 5 years to the year 2017 is expected to encourage pharmaceutical companies to invest more in the field of R&D
generate 20,000 MW solar power by 2022 under the three-phase National Solar Mission, with 2000 MW capacity equivalent off-grid solar ap-
• In the Union Budget 2012-2013, the three Departments of Science & Technology, Scientific and Industrial Research and Biotechnology under the Ministry of Science & Technology have each got a hike of about 10 per cent over the revised estimates or the actual expenditures during the current financial year ROAD AHEAD The future of scientific research in India is very promising. Advances in scientific and technological research are having a significant impact in India’s present and therefore, future, with the country being the primary source for many outsourcing companies. In addition, India has a large pool of professionals who are highly skilled and a valuable asset to the country. India is also witnessing R&D growth in areas such as genetic modification, bioenergy sources, biochemistry, atomic energy, organ donation and biomedical science. India is emerging in industrial research and development, space, defense, oceanography, and atomic energy. However, India is strong in Software technology and computer science.
Leading Indian Company in the Industry petencies and executes effectively. The centre is supported by state-of-the-art equipment set in a one-of-a-kind brand new technology-led environment. ABSTC seeks advances in products, processes and applications in several areas including: The Aditya Birla Science and Technology Company (ABSTC) is the corporate research and development centre for the Aditya Birla Group. Located in Taloja, just outside of Mumbai in India, ABSTC supports the broad diversity of the Group’s businesses through multi-disciplinary teams of expert scientists and engineers who lead fundamental and applied research projects.
• Non-ferrous metals (from extrac-
he company aims to be a world-class organisation that delivers innovative solutions, continuously improves core com-
tion and smelting to downstream operation)
• Carbon black technology (from feedstock to finished product)
• Cement (mineralogy, clinkerisation and concrete)
• Fibre technology (spinning processes, materials and new applications)
(chlor-alkali product stream development, fluorine derivatives, phosphates, sulphites and
specialty thermoset resins) ABSTC has generated extensive intellectual property for the Group, with the filing of more than 30 patent applications that cover novel processes, products and applications. Built on a 20-acre plot, the 30,000 sq. mt. facility comprises modern laboratories, multi-purpose scale-up facilities, modelling and simulation areas. It also hosts the Knowledge Centre for the Group, which has access to databases on areas of interest and information on patents, periodicals and other publications. India Newsletter | 11
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 firstname.lastname@example.org to get more information about possible assistance that we may provide.
12 | India Newsletter
Hall No 5, Mumbai Exhibition Centre
9th INDIA INTERNATIONAL TEXTILE MACHINERY EXHIBITION 2 - 7 DECEMBER, 2012, MUMBAI
India Newsletter | 13
Scholarship Programmes for Diaspora Children A programme from the Ministry of Overseas Indian Affairs
cholarship Programme for Diaspora Children (SPDC) was introduced in the academic year 2006-2007 with the objective to make higher education in India accessible to the children of overseas Indians and promote India as a centre for higher studies. Under the scheme, 100 PIO/NRI students are awarded scholarship of up to
US$ 4,000 per annum for undergraduate courses in Engineering, Technology, Humanities, Liberal Arts, Commerce, Management, Journalism, Hotel Management, Agriculture, Animal Husbandry and some other courses. The scheme is open to NRIs/PIOs from over 40 countries having substantial Indian Diaspora population. The applications
from the students who meet the prescribed eligibility criteria may be sent to the Indian Missions / Posts abroad. These applications are evaluated and shortlisted by selection committee consisting of officers from Ministry of HRD, Ministry of Overseas Indian Affairs and Ed.CIL (India) an autonomous body under Ministry of HRD.
Expanding the economic engagement of the Indian diaspora with India
For details contact: Ms. Sujata Sudarshan, CEO, OIFC, and Director â€“ CII 249-F, sector 18, Udyog Vihar, Phase IV, Gurgaon â€”122015, Haryana, INDIA Tel: +91-124-4014055/6 | Fax: +91-124-4309446 Website: www.oifc.in
14 | India Newsletter
north INDIAN CUISINE
typical North Indian meal would consist of chappatis, paranta or pooris (unleavened flat breads), pilafs, dals, and mild curries. Hot, sweet cardamom milk is very common before going to bed. North Indian desserts and sweets are made of milk, paneer, lentil flour and wheat flour combined with dried nuts and garnished with a thin sheet of pure silver. Nimbu Pani (lemon
drink), Lassi (iced buttermilk) are popular drinks of the North.
dian Cuisine. Indian restaurant cuisine has
Tandoori cooking is a north Indian specialty and famous the world over. Tandoori chicken, naan, tandoori roti, tandoori kebabs are a hit in most Indian restaurants.
migrated from North of India Specially
Many Indian restaurants around the globe till late 90”s are influenced by North In-
by adopting cream sauces in their Indian
been influenced by Indian chefs who have Punjabi style restaurants. They created a fusion of the two great cuisines-the local and the Home bought Indian Cuisine recipes.
Punjabi Chole RECIPE
Indian Cuisine Recipe - Punjabi Cuisine Ingredients
INGREDIENTS FOR MASALA
• • • • • • •
• • • • • •
250 gm: Kabuli channa 50 gm: Rajma 2 tsp: Tea powder 2 pieces: Clove 1 piece: Cinnamon 1/2 tsp: Black pepper 2-3: Green chillies (or ac-
1-2: Bay leaf (tej patta) 2 tsp: Mustard seed 2 tsp: Zeera 1 tsp: Fenugreek seed (methi dana) 2-3: Clove 1-2: Red chilli
cording to taste)
• • • •
1 piece: Ginger 1/2 tsp: Eating soda 3 tsp: Annardana paste 1/4 tsp: Mango powder (aamchur)
• 1 tsp: Garam Masala • 3 no: Potato (boiled medium sized)
• 1/2 cup: Tomato (chopped • 2 tsp: Ghee • Salt to taste Preparation
• In a pan, dry fry all masala ingredients. Put it in mixer, • • • • • •
make dry masala. In a big vessel pour water, add eating soda and salt. Now add kabuli channa and rajma. Soak this over night. Next morning in that same water drop a small pouch (potali) containing tea leaves. Cook this chana, rajma mix along with tea leaves pouch till channa and rajma becomes soft.When cooked discard the tea leaves pouch. Prepare a another dry-wet paste out of cloves, cinnamon (dalchini), black pepper, two green chillies and ginger. Mix this dry-wet fine paste with cooked channa and rajma. Take care that this masala is just mixed not kept in flame. Take an iron kadhai (iron kadhai will give a special flavour)
• • • • • •
or a deep pan. Pour left- out water from cooked channa and rajma, now keep the pan to flame. Now add that dry Masala, garam masala, annardana paste, aamchur powder, black pepper powder to that left-out water. Sim down the flame to in between low and warm. Cook all ingredients till water evaporates and masala stick to the channa and rajma.This is very very important for next step. In the pan itself spread the cooked chhole to corners, make a space in center of pan. In a separate regular pan heat ghee till you see smoke and your smoke alarms you. Pour this ghee in the (made) center space in iron deep pan, and cover it with chhole. Warm it with closed lid for a while. Decorate with slices of potato, tomatoes and long cut green chilli. India Newsletter | 15
Indian State Profile India’s capital city, Delhi is the second most widely used entry point into the country, being on the route of most major airlines. It is well linked by rail, air and road to all parts of the country. The remains of seven distinctive capital cities – among them Shahjahanabad and Qutab Minar – can be seen. Here, museums, art galleries and cultural centers attract the finest exhibitions and performances from India and abroad. Shopping encompasses virtually everything that can be bought in the country; hotels range from the deluxe to the more modest. Most fascinating of all is the character of Delhi which varies from the 13th century mausoleum of the Lodi kings set in a sprawling park to ultra modern chrome and glass skyscrapers; and from imperial India’s Parliament House and the President’s Palace to the never ending bustle of the walled city surrounding Jama Masjid. Delhi also makes the ideal base for a series of short excursions to neighbouring places, all connected by road. Delhi is a city that bridges two different worlds. Old Delhi, once the capital of Islamic India, is a labyrinth of narrow lanes lined with crumbling havelis and formidable mosques. In contrast, the imperial city of New Delhi created by the British Raj is composed of spacious, tree-lined avenues and imposing government buildings. Delhi has been the seat of power for several rulers and many empires for about a millennium. Many a times the city was built, destroyed and then rebuilt here. Interestingly, a number of Delhi’s rulers played a dual role, first as destroyers and then as creators. The city’s importance lies not just in its past glory as the seat of empires and magnificent monuments, but also in the rich and diverse cultures. No wonder chroniclers of Delhi culture - from Chand Bardai and Amir Khusro to present days writers - have never been at a loss for topics. In Delhi, you will discover that the city is sprinkled with dazzling gems: captivating ancient monuments, fascinating museums and art galleries, architectural wonders, a vivacious performing-arts scene, fabulous eating places and bustling markets.
www.india-tourism.com email@example.com 16 | India Newsletter
dilli haat, food plaza and bazaar
INDIAN MOVIE EVENING: DO DOONI CHAAR
Friday, July 27th, 18:00 | Indian Embassy Business Centre (1st Floor, Kärntner Ring 2, 1010 Vienna) 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 / Teen Directed by: Habib Faisal Starring: Rishi Kapoor / Neetu Singh Released: October 2010 Duration: 106 Minutes Language: Hindi / Subtitles: English Synopsis: Delhi-based math teacher Santosh Duggal drives a scooter and lives in a small apartment along with his
wife, Kusum; a collegian daughter, Payal; and a school-going son, Sandeep. He also moonlights with a tutoring center called Chatwal Coaching Class in order to make ends meet. Hoping to pacify his family with his income-tax refund, he will instead be compelled to give up its entire amount after his Meerut-based sister Urmi invites them over to a wedding. He borrows a car from a neighbor, Farooqui, and, after a rather dramatic trip, is forced to compensate him as the car gets damaged. Unable to bear taunts that he cannot afford a car, he decides to buy one. It is this decision that will force Payal to seek employment in a call center. Sandeep will confess that he has been gambling, which leaves Santosh with no alternative but to consider accepting bribes from students and risk being exposed on live TV
The library is opened mondays and wednesdays from 11am to 1pm
For visits outside the opening hours, please contact the information assistant under Information Assistant: firstname.lastname@example.org or 01 505 8666 33
EMBASSY’S BUSINESS CENTRE The website of the Embassy of India, Vienna, and its ‘Business Centre’ section offer a wide variety of business related information, carefully selected and updated to meet IndiaAustria’s business demands. In our Business Centre, companies do not only have the opportunity to find relevant information on India-related trade matters, but they can also interact with the commercial wing of the Embassy by submitting online trade inquiries. Additionally, the Embassy compiles a monthy economic and commercial report for Austria, which is targeted at Indian business readers and trade corporates. The same can be
downloaded directly from our Website or if you wish to receive it via email, you can register your email by sending a request to email@example.com. Besides its online presence, the Embassy also has a Business Centre Facility, located on the first floor of the Main Chancery building on Kärntner Ring 2, 1010 Vienna. The space is ready to welcome businesspeople and parties interested in requesting, exchanging or providing information on Indiarelated business matters.You can either schedule an appointment with a representative of our commercial wing under the contacts given below or simply visit us during our opening hours Tuesdays and Thursdays from 11AM to 1PM.
The Business Centre is opened tuesdays and thurdays from 11am to 1pm without appointment. For scheduling an appointment outside the opening hours, please contact the commercial wing under the contacts given below. Marketing Officer: firstname.lastname@example.org or 01 505 8666 30 Marketing Assistant: email@example.com or 01 505 8666 31
India Newsletter | 17