INDIA NEWSLETTER Published by the Embassy of India,Vienna Year 3 | Issue 32 | August 2013
CEMENT India Newsletter | 1
Snapshot of last month’s Highlights
eal time risk and procurement analytics sector in India is projected to reach US$ 3 billion in 6-7 years.
ndia overtook Japan to become the world’s third largest smartphone market in terms of volume with 10 million smartphones shipped in India during the first quarter.
he eight core industries have a combined weight of 37.90 per cent in the Index of Industrial Production (IIP).The core industries grew by 2.3 per cent during May 2013.
eather exports from India are expected to touch US$ 14 billion and may double jobs in the sector to five million by 2017.
he telecom subscriber base in India stood at 897 million users at the end of April 2013.
ndians bought real estate worth US$ 3.5 billion in the United States during 2012-13. 2 | India Newsletter
ndia and Europe have signed around 875 crossborder deals, with an aggregate value of € 90 billion (US$ 117.85 billion), between 2006 and 2012.
ndia has become the top buyer of Nigerian crude oil, buying more of Nigeria’s crude than the US, over the last three months. omestic mutual funds invested Rs 2.92 trillion (US$ 48.55 billion) into the debt market in India during the first half of 2013.
ndia has emerged as the second largest investor in the city of London with investments from 28 Indian companies in the last year.
ndia’s steel production recorded 6.45 million tonne (MT) in June
2013 as compared to 6.39 MT in June
crease of 19.87 per cent during 2012
in 2012. ndian Railways reported a y-o-y increase of 8.41 per cent in commodity-wise freight revenues during April-June 2013 quarter. ut of the total digital media market in India worth Rs 27,000 crore (US$ 4.52 billion) in 2012, more than 80 per cent accounted for the entertainment products online.
he number of domestic tourist visits in India registered an in-
rivate equity at 1,036 million as compared to 865 (PE) deals in million in 2011. ndia is expected India stood at US$ to become the 4.72 billion during the first half of this third largest autoyear, registering a motive market in growth of 15 per the world by 2016 cent y-o-y. ffice space absorption in India is ahead of Japan, Gerexpected to touch 30 million sq O ft (msf) in 2013, up from 27-28 msf many and Brazil.
he Indian logistics sector is expected to almost double its turn-
over to US$ 200 billion in the next seven years, from US$ 110 billion currently.
T & ITeS industry in India is expected to generate 120,000 jobs this
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India pledges US 200,000 to UNODC’s Paris Pact Initiative Multilateral
he Government of India has decided to make a financial contribution of US Dollar 200,000 to Phase IV of the Paris Pact Initiative. This was announced by Ambassador Swaminathan at the special event of the 56th Session of the Commission of Narcotics Drugs organized by the United Nations Office on Drugs and Crime (UNODC) on 26th June, 2013 at the Vienna International Centre to commemorate the International Day against Drug Abuse and Illicit Trafficking. The
event was attended by UN Deputy Secretary General Jan Eliasson and UNODC Executive Director Yury Fedotov among others. The decision has now been formally conveyed to the UNODC. A partnership of 70 countries and international organizations, the Paris Pact Initiative of the UNODC is one of the most important international frameworks in the fight against opiates. Founded at the Ministerial Conference on Drug Routes from Central Asia to Europe held in Paris
in May 2003, the Initiative aims at the reduction of illicit traffic in opiates, including opium poppy cultivation, production and global consumption of heroin and other opiates. Being a victim of opiate trafficking, India has been a strong supporter of the Paris Pact Initiative since its inception and has also made a financial contribution of US Dollar 200,000 to its Phase III.
FDI rules in multi-brand retail eased Foreign Direct Investment in India
n its latest bid to woo global chains such as Wal-Mart and Carrefour, the government on Thursday sweetened the deal for foreign investment in multi-brand retail stores besides liberalizing rules for overseas companies looking to invest in manufacturing defence goods or running telecom companies. Foreign retailers will now be allowed to open stores in cities that have a population of less than one million. Earlier, supermarkets could only come up in 53 cities. A relaxation was permitted only in case of states that did not have a single city with a population of one million. The move will allow stores to come up in cities such as Gurgaon and Aurangabad. The cabinet also approved a plan to tighten norms for ‘control’ of firms to ensure foreign players do not overwhelm any joint venture. The cabinet decision to open doors for FDI was an official endorsement of a decision taken at a meeting chaired by Prime Minister Manmohan Singh to ease the rules in nearly a dozen sectors. In most sectors, the simplification will allow companies to only inform the government after investment instead of having to get the
proposal approved by the Foreign Investment Promotion Board. With no investor setting shop after the government allowed FDI in multi-brand retail 10 months ago, the government has decided to water down some of the provisions which were seen as obstacles to investment. On June 28, commerce & industry minister Anand Sharma met retailers to get a feedback on the policy. Sharma told reporters that retailers can now source goods from medium, small and micro enterprises, where the investment cap will be $2 million (around Rs 12 crore), instead of the earlier ceiling of $1 million to comply with the requirement of sourcing at least 30% goods from small vendors. Further, sourcing can continue even after the $2 million investment cap is breached. “You can’t penalize a small company for being competitive, Sharma reasoned. As a further relaxation in the rules, the government has said that retailers can buy from farmers’ and agriculture cooperatives, which will be counted in the sourcing requirement.The sourcing norms have to be met over a five-year period.
To address another concern, the government has said that at least 50% of total FDI brought in the first tranche of $ 100 million will be invested in creating backend infrastructure within three years. “Subsequent investment in the back-end infrastructure would be made by the retailer as needed, depending upon his business requirements, Sharma said. While Sharma ruled out the possibility of dilution of the policy by another political party, retailers were guarded in their response. “We are studying the government’s recent revisions to the FDI policy and remain optimistic about the opportunity in front of us, a Wal-Mart India spokesperson said in a statement. But consultants appeared more upbeat. “These changes would address the concerns of the foreign investor who have till date tried to understand the nuances of the FDI policy related to multi brand retail, said Dev Raj Singh, executive director at consulting firm EY. India Newsletter | 3
FDI in India registered 24% growth Foreign Direct Investment in India
oreign direct investment (FDI) into India registered a growth of 24.2 per cent year-on-year to touch US$ 3.95 billion in April-May 2013 as compared to US$ 3.18 billion during the same period last year, according to data released by the Department of Industrial Policy and Promotion (DIPP). FDI inflows impact positively by supple-
menting domestic capital, technology and skills to the existing companies as well as through establishment of new companies, said Mr Anand Sharma, Union Minister for Commerce and Industry, Government of India. During 2012-13, India attracted FDI worth US$ 22.42 billion. Hotels and tourism, pharmaceuticals, services, chemicals
and construction received the highest amount of FDI. The major contributors to the Indian FDI were Singapore, Mauritius, the Netherlands and the US. The Government of India has liberalised the FDI regime in about a dozen sectors, including telecom, power etc and have also relaxed investment norms in multibrand retailing.
Govt allows 100% FDI in telecom Foreign Direct Investment in India
mid concerns over a weakening rupee, dwindling capital inflows and a widening current account deficit, the country moved a step closer to overhauling its foreign direct investment (FDI) policy as it lifted caps for the telecom sector and asset reconstruction firms, besides tweaking norms for 13 sectors. The limit for defence production companies was also virtually raised to 100 per cent, subject to approval from the Cabinet Committee on Security (CCS). The decision was taken at a cabinet meeting. Also decided at the meeting was that FDI cap for private insurers would be raised to 49 per cent but that would need Parliament’s approval. The FDI limit for credit information firms was raised from 49 per cent to 74 per cent — all of it may come through the automatic route, against the requirement for clearance from the Foreign Investment Promotion Board (FIPB) at present. (EASING FDI INFLOWS) Besides these, the cabinet eased FDI procedures for seven other sectors. But they stopped a little short of accepting all recommendations of the Arvind Mayaram Committee, including those to raise FDI cap for news & media (current affairs) to
49 per cent from 26 per cent. After the meeting, Commerce Minister Anand Sharma said a Cabinet note on Tuesday’s recommendations would soon be prepared. He, however, clarified that these proposals would not be taken up at the next Cabinet meeting. He also assured investors that their concerns over multi-brand retail would be allayed and clarifications would soon be issued. He added that his ministry’s concern over acquisition of Indian pharma companies by foreign ones would be discussed separately. Though FDI in telecom services will be raised to 100 per cent, only up to 49 per cent could come via the automatic route. Beyond that, permission of FIPB will have to be sought. So far as FDI in defence is concerned, it has been left to CSS to decide which FDI proposals will bring in state-of-the-art technology into the country. That way, even the proposals for foreign investment beyond 26 per cent could be considered on a case-by-case basis. In single-brand retail, though there is no FDI limit at present, the investment has
come only after FIPB clearance. This has been eased to allow up to 49 per cent investment through the automatic route. Similarly, up to 49 per cent FDI is currently allowed in petroleum and natural gas refinery, but with FIPB approval. This, too, has been changed to automatic route, without any modification in cap. The caps on FDI in commodity exchanges, power exchanges, stock exchanges, depositories and clearing houses have been retained at 49 per cent (26 per cent FDI and 23 per cent foreign institutional investments). But procedures of approval have been eased and investments can now come through the automatic route. The meeting also decided to remove a clause that tea and other plantation companies — in which 100 per cent FDI is allowed — have to divest 26 per cent equity in favour of Indians within five years. For this sector, up to 49 per cent FDI could come via automatic route, while that below this threshold will have to be vetted by FIPB. Courier services already enjoy 100 per cent FDI but now full investment could come via automatic route.
Opportunities for foreign players in power exchanges Foreign Direct Investment in India
he Government’s decision to allow foreign direct investment through automatic route in power exchanges while retaining the cap at 49 per cent will open up opportunities for overseas players to participate in the growth and development of the sector, especially the exchanges. “Introduction of global best practices, especially in the areas of technology, prod4 | India Newsletter
ucts, modern management skills etc, as a result of foreign collaboration are expected to lead to higher service standards at power exchanges,” said Pawan Kumar Agarwal, CFO and Company Secretary of Power Exchange India Ltd. The share of power exchanges in the total short-term market has more than doubled over the last five years.
India has €2-b market potential for high-voltage transmission lines Power Industry
ndia has a market potential of €2 billion for setting up high-voltage transmission lines by 2018, France-based Alstom believes. “The HVDC (high-voltage direct current) market is estimated at €50 billion in the next 10 years, and Alstom targets a 20 per cent market share,” the company said. The multinational conglomerate, which is into power generation and transport, said the Americas, China, India and Europe had the greatest potential in this area. The biggest challenge for India is to ensure efficient transfer of power over long distances, while maintaining the national electricity grid without any disturbance. As of now, most of the electricity in India is generated in alternating current (AC) form. However, there are technical and commercial problems in ferrying AC over long distances. This is why AC is converted to direct current (DC) in converter stations and transmitted through the high-voltage network). The power is
again converted to AC before supplying to consumers. “It (HVDC) has a cost, but it stabilises the network and helps in preventing black-outs like India suffered last year,” Patrick Plas, Senior Vice-President (Power Electronics and Automation) at Alstom, told Business Line. At present, the French company is engaged in setting up HVDC projects for the 800 KV-3,000 MW transmission lines between Champa and Kurukshetra. “We have started discussions for phase-II of this project,” said Plas. India is the second country after China to develop and implement 800 KV DC projects. Alstom said it provides innovative HVDC technologies to meet the needs of mature and emerging markets. It has set up HVDC projects of nearly 30,000 MW across Sweden, India, Brazil and Germany, among others. HVDC has emerged as the key technology for inter-connecting regions and
countries for electricity transfer, as it helps transmit more power with less infrastructure. The network also helps synchronise electricity generated from different sources. For example, renewable sources, such as wind or solar, generate power at a voltage different from conventional sources. It is this varying voltage that creates disturbances in transmission networks. HVDC also helps connect power plants to distant load dispatch centres and facilitates development of energy highways to transfer large amounts of power over long distances. “HVDC improves quality, stability and reliability of electricity,” said Claes Scheibe, Vice-President (Power Electronics Applications) at Alstom. The global energy demand is estimated to grow over 30 per cent between now and 2035. As a result, grids need to adapt and integrate renewable energy sources in a sustainable way.
Govt to fund start-ups in electronics space Electronics Industry
he Government will soon unveil guidelines for financially supporting start-ups in the field of electronics. It may chip in with 15-25 per cent of the total investment for such projects through fund managers including banks or any large IT company.
This will be part of the National Electronics Mission under the National Policy on Electronics 2012, and the investments will be routed through the Government’s ‘Electronic Development Fund’ scheme, which aims to invest $2 billion (around Rs 12,000 crore) by 2020, the official said.
ing their bit, it may not be sufficient.
“This will be the first time in the country when we will have a system by which the Government can effectively stimulate the private sector in R&D work, because we have one of the lowest intensities of R&D relative to the GDP (less than 1 per cent),” a senior official at the Department of Electronics and Information Technology (DeitY) said.
“We expect additional mobilisation of around Rs 30,000 crore — to be raised from the industry by 2020. The industry is nascent right now, so we expect it to start slowly and invest around Rs 50 crore or Rs 100 crore to start with,” he said.
capitalists do,” he said.
There are many small companies in India which are on the verge of shutting down. The proposed initiative will help such companies survive , he said.
billion. It will also help employ around 28
The official said the Government is also open to working with Nasscom to support the start-ups.
of $55 billion for the chip design and em-
Mission mode Once the guidelines are finalised, the Government will also fix its return on investment (at around 5 per cent). A highlevel committee under the chairmanship of R. Chidambaram, Principal Scientific Adviser to the Government, is working on preparing the guidelines.
He said even though institutions such as the Centre for Development of Advanced Computing , and the IITs are do-
“We need to plant thousands of trees; out of which only a few may survive, but one or two that do survive will give sufficient returns; and that is what venture
Under the NPE, the Government is hoping the electronics sector will achieve a turnover of around $400 billion by 2020. This involves investment of around $100 million people by 2020. The policy includes achieving a turnover bedded software industry, and $80 billion of exports in the sector. Over 200 electronic manufacturing clusters are also proposed to be set up. India Newsletter | 5
Indian auto components industry to invest Rs 70 billion Auto Components Industry
he Indian auto components industry may invest around Rs 70 billion over the next three years on new projects, according to a study by ICRA.
total investments of Rs 7,000 crore to be incurred by auto component manufacturers over the next three years,” highlighted ICRA.
operational and financial flexibility,” as
Automobile manufacturers such as Hero MotoCorp, Maruti Suzuki and Ford, plans to establish greenfield facilities in Gujarat, encouraging auto component makers to invest around these facilities. “The above greenfield investments may entail
“Over the near term, the trepidation of auto part makers arising from dull automobile demand is likely to remain...the profitability of auto component manufacturers may be hit harder due to their smaller scale of operations and limited
such as growing thrust on localisation
per the study. However, over the medium term factors and expanding business in new geographies should allow the industry to grow at a relatively faster pace than the auto OEM segment, the study added.
Govt to hike R&D spend to 2% of GDP, Research and Development
nion Minister for Science and Technology S. Jaipal Reddy said that the Government plans to increase the research and development budget up to two per cent of the gross domestic product during the 12th Plan. Speaking at CSIR-IICT@70 celebrations, he said, “It is gratifying to note that Indian industry is coming forward to contribute about 50 per cent of the increase in R&D spending.” The Government has introduced several new schemes with public private partnerships to increase spending on R&D. These schemes will help translate the basic and academic research into prod-
ucts of direct relevance to the industry in quick time. To encourage entrepreneurship and innovation in new scientific concepts and technologies, the Government has lined up several programmes ranging from venture-capital funding to the development of incubation centres. The CSIRIICT have taken lead role to establish a biotechnology incubation centre in Hyderabad in association with the Andhra Pradesh Government. He assured the research community that the Government will ensure necessary resources to support good research and technology proposals. He said some of
the important innovations of IICT such as the rice bran oil tech and hydro fluoro carbons had helped save foreign exchange. The Union Minister laid the foundation stone for Centre of Flurochemicals. This is aimed at working on basic and applied research to develop eco-friendly processes for refrigeration. He also inaugurated a Cancer Therapeutic Research Laboratory and a Meteorological Tower of Climate Change on Ventor Control Programme. The cancer lab will work on development of affordable cancer therapeutics.
govt calls upon R&D investment in agrochemicals sector Agrochemicals Industry
he Government has called upon agrochemicals industry to invest in Research & Development and innovations in agrochemicals sector. Delivering the inaugural address at a two-day Third National Conference, the Secretary, Department of Chemicals & Petrochemicals, Ministry of Chemicals & Fertilizers, Shri Indrajit Pal said that in order to remain globally competitive, the industry needs to innovate in products, for which innovative stateof-the-art R&D laboratories and financial resources would be required. Shri Indrajit Pal said that the Indian chemical sector spends 1-2% of their total turnover on R&D as compared to around 5-10% by the chemical industry in the developed countries. One of the emerging areas for R & D is green agrochemicals and the Indian industry is the development of eco-friendly green agrochemicals, he added.
quality of agrochemicals, the Government has set up 71 pesticides testing laboratories across the country that include 68 state laboratories, 2 regional laboratories and 1 central laboratory. Manufacturing units should adopt GMP (good manufacturing practices) and take all such measures that are necessary to ensure delivery of quality products to the farmers. Shri Indrajit Pal also informed that the Institute of Agrochemicals Formulation Technology (IPFT), an autonomous body of the Department of Chemicals and Petrochemicals, has been developing state-of-the-art user and environment friendly formulations for the agrochemicals industry. During the last 5-6 years, IPFT has developed many formulations and transferred them to the industries. He urged the industry to take full advantage of the facilities offered by the institute.
The Secretary informed that for ensuring
The Conference was organised jointly by
6 | India Newsletter
Federation of Indian Chambers of Commerce and Industry (FICCI), Departments of Chemicals & Petrochemicals, Department of Fertilizers and the Department of Agriculture & cooperation, Government of India. Tata Strategic Management Services (TSMG) are Knowledge and Strategy Partners and a Knowledge Paper on the sector was also released. With nearly a 1.2 billion population, India requires a robust, modernized agriculture sector to ensure the food security for its population. Scope for further increasing cultivable land is limited. In order to meet the food grain requirements of the country, the agricultural productivity and its growth needs to be sustained and further improved. Pesticides or Agrochemicals are recognized as an essential input for increasing agricultural production and preventing crop loss before and after harvesting.Their judicious usage is very important for the
Articles sustained growth of Indian agriculture and economy. India has low crop productivity as compared to other countries. Average productivity in India stands at 2 MT/ha as compared to 6 MT/ha in USA and world average of 3 MT/ha. At the same time, India’s pesticide
consumption is also low at 0.60 kg/ha as compared to the world average of 3 kg/ha and for Japan 10.80 kgm. Hence, increased usage of pesticides could help the farmers to improve crop productivity. This also portrays the huge growth potential as the Indian economy moves forward.
The two-day conference covered topics of relevance to the sector, incl. new developments, innovations, export potential as also issues such as spurious pesticides, regulatory regime etc. A large number of Captains of the chemical industry, academia, policy makers as also the end-users viz: the farmers were present.
President calls for technological solutions to agricultural challenges Agriculture Industry
ndia’s president Pranab Mukherjee called upon the Indian agricultural research system to find technological solutions to challenges being faced by Indian agricultural research and to reach out to the millions of small and marginal farmers. Among the areas that need special focus, the president drew attention to quality seed production, agro-processing and post-harvest handling of farm produce, the development and introduction of genetically-modified crops, and preparing agriculture for climate change.
Mukherjee launched an SMS portal exclusively for farmers. Through this new imitative, farmers can get agriculturerelated information and advisories as per their needs and location and in their own language.
increase in productivity and improved post-harvest handling and processing, India would become one of the leading food suppliers to the world, while at the same time serving the vast growing domestic market of over a billion people.”
Agriculture and food processing minister Sharad Pawar called for advancing propoor agricultural research and development (R&D). He also called for pooling in the resources of the private and public sector R&D organisations to develop next-generation technologies.
The president and the agriculture expressed these views at a function held to commemorate the 85th Foundation Day of the Indian Council Agricultural Research, which was also attended by Charan Das Mahant and Tariq Anwar, ministers of state for agriculture and food processing industries.
He expressed the hope that with the
India still second fastest growing economy By Finance Minister P. Chidambaram
oting that India continued to be the second fastest growing economy in the world after China, Finance Minister P. Chidambaram said people should not be worried about the current slow down and expressed hope of achieving six per cent growth this fiscal. “People should remember India continues to be the second fastest growing economy after China. Even China’s growth which was at 10 per cent has come down to seven per cent now, while our growth has slid to five per cent from nine per cent,” he said at a bank function in Manamadurai. “Economic slowdown is there in all the countries. When there is slow growth rate in the world, India cannot remain unaffected,” he said inaugurating the 2110th branch of the Indian Bank in this small town in his Sivaganga Lok Sabha constituency. Mr. Chidambaram said even European countries had been affected by the economic slow down. Many countries including Mexico Brazil were behind India, he said. Expressing hope that the country’s growth would touch six per cent this year, he said, “People should be confident and take bank
loan to invest in farm sector, small industries, housing etc.You should hope for bright tomorrow, and not worry about the slow down.” On the petroleum products prices, he said it had gone up due to the price of crude oil touching 108 US Dollars per barrel, adding the price of petrol and diesel would show a declining trend only if crude came below USD 100 per barrel. India imports over 70 per cent of its oil demand and efforts are on to explore crude and gas in the country. “Sometimes they succeed in hitting crude and sometimes they do not, and it requires a lot investments thousands of crores. We have to reduce the import of crude to fifty per cent for reducing the petrol and diesel prices,” he said. Mr. Chidambaram also said plans were on to open 8,000 new bank branches this year. This would create 50,000 jobs and would also help the economy to grow. He suggested women should form more Self—help groups and obtain loans boldly to start new ventures. Earlier, Indian Bank Chairman and Managing Director T.M. Bhasin welcomed the Minister and other participants. India Newsletter | 7
Manmohan Singh calls for inclusive growth Word from the Prime Minister
rime Minister Dr. Manmohan Singh said our strategy must not only aim at faster growth but must also ensure that the growth processes are more inclusive. “There are many policies that can help achieve this objective. This also calls for special programmes to meet the needs of excluded sections, especially the Scheduled Castes and Scheduled Tribes, the OBCs and the Minorities. We have many such programmes. These need to be expanded and made more effective,” said Singh in his address at the release of Book: An Agenda for India’s Growth: Essays in Honour of P Chidambaram Singh said an important achievement of the past five years is that growth has been much more inclusive. “Agricultural growth has accelerated from 2.4 percent in the Tenth Plan to 3.6 percent in the Eleventh Plan. Poverty is falling faster. Per capita consumption in real terms in rural areas has increased four times faster from 2004-05 than it did earlier. The erstwhile BIMARU states are doing much better,” said Singh. “All this suggests that India has all ingredients required to achieve rapid and inclusive growth,” he added. Singh said there is no reason to be disheartened over the decline in growth rate. “Over the past decade, when the economy had absorbed the full benefit of the reforms that began in 1991, our economy has grown at close to 7.5 per cent. Our growth rate has slowed down to 5 percent in 2012-13. But this should not make us feel disheartened and imagine that we have slipped back to our old growth rate,” said Singh. “The last couple of years have been challenging not only for us but for the whole world.We must view this as a short term deceleration. Our Government is determined to once again accelerate the pace of change. Once again, we will prove the naysayers and Cassandras of doom wrong,” he added.
different articles in the volume. We have to deal with macro economic imbalances that have developed. We also have major challenges in key sectors such as energy, water, and land,” he added. The Prime Minister said infrastructure is today a key constraint with many large projects held up. “The Cabinet Committee on Investment which we have set up gives us a mechanism to overcome bureaucratic delays. Urbanisation is a new challenge which deserves greater attention,” he added. The Prime Minister said he is enthused by the good work that his cabinet colleagues are doing to step up the rate of investment, to generate new employment, to re-energise the forces of competition and, above all, to make the growth process socially inclusive.
Singh said the policy agenda for bringing back India’s growth momentum has been outlined in detail in the Twelfth Plan.
“I find many of my young colleagues handling key infrastructure ministries are working hard and with dedication. They seek inspiration from their senior colleagues like Mr Chidambaram. He has shown that hard work can deliver results. I have no doubt that we will deliver results and once again place India on the path of high and socially inclusive growth,” said Singh.
“Most of the important points are also fairly comprehensively described in the
“The people of India expect this. The world expects and awaits this. Let me
8 | India Newsletter
assure you, we will not disappoint,” he added. Singh said that as a Prime Minister he feels greatly strengthened by the fact that he has a Finance Minister who fully understands and is capable of taking risks and asserting political leadership. “He is not only intellectually brilliant and dedicated to end results: he is also politically savvy. It is these attributes that have made him a leader with an enviable reputation both nationally and internationally,” he added. Singh further said the book, edited by Sameer Kochhar of the Skoch Foundation, contains a number of excellent essays by distinguished experts. “I noticed that all the authors date their association with Chidambaram from 1991, when he was our Minister of Commerce, and a key ‘reformer’, initiating trade policy reform. I have known him as a ‘reformer’ from even earlier,” Singh said “In 1986, Prime Minister Rajiv Gandhi appointed him as the minister of state for personnel, and later for internal security. In both these capacities, he pioneered key reforms in our governance processes. Under Rajivji’s guidance he launched a mid-career programme for civil servants, sending officers to IIMs and other teaching and research institutions. Many civil
Articles servants told me they appreciated the opportunity to return briefly to academic pursuits, and benefitted greatly from the experience,” he added. Singh recalled that he and Chidambaram were Cabinet colleagues in the Narasimha Rao Government. “We were Cabinet colleagues in Shri Narasimha Raoji’s government when I was Finance Minister and the reforms of the 1990s were initiated. I recall that Chidambaramji was one of the strongest advocates of economic reforms whenever the programme came under attack, both in the Union Cabinet, and also in the wider political arena,” he said. The Prime Minister said academic economists who have written about economic reforms in India tend to see the process as an acceptance of technical recommendations which have long been advocated by economists.
“However, reforms don’t happen just because there is a professional consensus. They happen when the political leadership of the time decides to back these initiatives,” he added. Singh said ‘in a democracy, reform – be it of economic policy or of institutions – is essentially a political process’. “We have to build a sufficiently wide political consensus in favour of the policies we wish to adopt. Having a parliamentary majority alone is not enough, because there are differences within parties. For reforms to be credible it is necessary that a wide cross section of society should understand the need for and accept, the policy changes that a government wishes to make,” he added. Asserting that the 1991 reforms did not happen suddenly, Singh said: “They were preceded by a push in that direction in the second half of the 1980s, by the Con-
gress government under Shri Rajiv Gandhi. The Congress Manifesto in the 1990 election also gave a strong reform message. When the Congress government was formed in 1991, under Prime Minister Shri Narasimha Raoji, his leadership and support for reforms was crucial. “After 1996, we had a non-Congress government with Left Front support, under the leadership of Shri Deve Gowda and later Shri I K Gujral. The policies we had implemented in 1991-96 were not only not reversed, they were in many respects even taken forward. This must have been helped by the fact that Chidambaramji as Union Finance Minister in the United Front Government, contributed to a continuity of policy. But I also like to think that it reflects the fact that beneath the loud disagreement and debate that is characteristic of democracies, there is also a growing consensus,” he added.
Govt likely to review trade pacts, FTAs to reassess gains International
he government may review India’s bilateral trade pacts including free trade agreements (FTAs) amid increasing clamour from the industry against conceding foreign trading partners more access to the country’s market without extracting significant gains in return. The finance ministry wants a review of the FTAs to ensure an optimum deal for the country, a senior official told ET, adding that India cannot run a high current account deficit for long. Even as the ministry has started reviewing the bilateral investment treaties, it is likely to soon ask the department of commerce to examine whether the country has got what it expected from the FTAs, most importantly with Thailand and the ten-member ASEAN. “We are at the moment looking at bilateral investment promotion agreements.
But FTAs need to be looked at,” said the official, who did not wish to be named. The domestic industry has been mounting pressure on the government, saying it has not gained much from the FTAs.
period. The country’s trade deficit with ASEAN, with which it signed a trade agreement in August 2009, has widened to $18 billion from $14.9 billion in 200910.
“India needs to have a fresh look at its FTA strategy in view of the continued slowdown in exports and not much gains being realised from services exports either,” a spokesperson of the industry body CII told ET.
India has had a bitter experience with imports of gold from Thailand at a concessional duty under the trade early harvest scheme. Imports of gold items from Thailand shot up after India increased duty on the yellow metal to discourage its import and consumption.
Indian industry’s biggest concern is the India-Thailand agreement, which has kicked off in a limited way with an early harvest scheme that has eliminated tariffs on 82 items.
Heavy bullion imports were one of the main reasons for the rise in the country’s trade deficit to an all-time high of 4.8% of GDP in 2012-13.
India’s imports from Thailand rose to $5.6 billion in 2012-13 from $2.7 billion in 2008-09 while exports grew to $3.7 billion from $1.94 billion over the same
Gold jewellery imports from Thailand have been suspended since and the finance ministry has sought removal of gold jewellery from tradeable item under the trade agreement with Thailand.
Connectivity between ASEAN, India can transform region International
landscape between the two sides was greater physical connectivity.
and enhance business opportunities both ways,” Shanmugam said.
Pitching for closer economic ties between ASEAN and India, K Shanmugam said the missing link in the economic
“The missing link in our economic landscape is really the need for linkages for grater land and sea connectivity between ASEAN and India that will completely transform and facilitate the interaction
“If we can physically connect ASEAN with India through Assam .... that physical connectivity will transform the landscape,” he said while delivering the inaugural lecture of the newly-established
hysical connectivity between ASEAN and India through Assam can transform the economic landscape of the region, Singapore Foreign Minister said.
India Newsletter | 9
Articles ASEAN-India Centre. “We encourage India to step up engagement of ASEAN in fulfilment of Prime Minister Manmohan Singh’s look-east policy,” the minister said. “India and ASEAN had a commemorative summit in December 2012, the outcomes were good, emphasised the importance of the relationship and agreed on the elevation of the relationship to a strategic partnership and the leaders
endorsed the ASEAN-India vision statement,” Shanmugam said.
panded to something under USD 20 billion last year.
The Foreign Minister also spoke of robust economic partnership that Singapore shares with India.
India’s trade with rest of ASEAN has progressed well.
India-Singapore trade grew from about USD 9 billion from 2004 before they signed the FTA (free trade agreement) to USD 24 billion last year, he pointed out. Indian investment in Singapore which was something under 500 million in 2004 ex-
Trade has increased by 40 per cent to USD 75 billion surpassing the 2012 trade target of 2012. The minister also welcomed the conclusion of ASEAN-India Free Trade Agreement (AIFTA) services and investment negotiations which is to be signed soon.
India looking at benefits of currency swaps with trade partners International
ndia is exploring possibilities of entering into currency swap agreements with trade partners aiming to shore up exports and bring down trade deficit, which is putting pressure on the rupee. “A need arises to examine the issue of currency swap agreement and its impact on the Indian trade policy ... the matter is of particular interest to Ministry of Commerce,” a senior government official said. Senior officials of Commerce and Finance ministries will discuss the issue later this month. The meeting, scheduled for August 20, will also be attended Reserve Bank officials. India has signed currency swap agreements with Japan ($ 15 billion) and Bhutan ($ 100 million). China has shown active interest in entering into such an agreement with India but it is yet to be signed. The meeting is taking take place at a time when several countries are “actively en-
gaged” in entering into currency swap agreements with their counterparts. Currency swap agreements involve exchange of one currency for another currency and are generally motivated by the comparative advantage. The Commerce Ministry has already sought views of the Centre for WTO Studies, a Delhi-based institute, on the impact of currency swap agreements on trade policy. The institute, in its concept paper submitted to the Commerce Ministry, said such agreements help in fund management and currency risk management, among other things. It further said such agreements with those countries with which India has trade deficit, may have both positive and negative effects. “Therefore, India may opt for signing currency swap agreements in local currencies on an experimental basis with a
few selected countries and based on the experience may decide to continue these further,” the concept paper said. A dollar swap arrangement, it further said, would help India in supporting the rupee, which has depreciated significantly against the US currency over the past few months due to various global and domestic factors. Currency swaps have emerged as an important derivative tool after the global financial crisis of 2008 to hedge the exchange rate risks. Swap agreements in US dollar, the concept paper said, provide confidence to the market and prevent excess volatility in financial and foreign exchange markets. The rupee tumbled by 63 paise to 61.40 against the dollar in late morning trade on fresh buying of US currency by banks and importers in view of fall in the equity market. The currency has lost over 16 per cent since April.
India, US to negotiate Bilateral Investment Treaty International
he Government of India has communicated its willingness to negotiate a Bilateral Investment Treaty (BIT) with the Obama Administration. The Indian Government has signaled its acceptance and positive response towards a BIT, India’s Commerce and Industry Minister Anand Sharma said at a press conference after meeting US Trade Representative Mr. Michael Froman in Washington. The move of the Indian Government comes a few days after the US and China 10 | India Newsletter
agreed to restart discussions on a bilateral investment treaty. In a BIT, governments commit to protect investments made in their territory by nationals of the other country. A BIT between India and the US would provide protection to US investors from arbitrary, discriminatory or confiscatory Indian Government measures, enforceable by recourse to independent international arbitration, according to the USIndia Business Council (USIBC). Such a treaty could help bring additional
investment in India, and also provide protection to Indian companies as they expand investments in the US. The treaty for investment protection could also serve as a building block for a more comprehensive free trade relationship. The process could build confidence among various U.S. interests, including the Congress, of a more liberalized environment in India and a greater readiness by India to proceed with trade liberalization, within a framework of legally binding international commitments.
Interview So far, the US has negotiated BITs with 47 countries, 40 of which are currently in force. In addition, the US also has nine free trade agreements (FTAs) in force with a total of 14 partner countries. Most of these FTAs contain investment protection provisions similar to those provided for in a BIT.
On the other hand India has signed Bilateral Investment Protection Agreements (BIPAs), which are similar to BITs, with 82 countries, of which 72 are already in force.
yet to be fixed.
The date for the first round of talks on the treaty between the US and India is
two-way trade in goods and services to
At present, India-US annual bilateral trade is around US$ 106 billion. The USIBC has set a target of boosting the US$ 500 billion annually by 2020.
India, Belarus Sign Protocol to Boost Trade Ties International
he 6th Session of the India-Belarus Inter-Governmental Commission on Trade, Economic, Scientific, Technological and Cultural Cooperation was held today here. The session was co-chaired from the Indian Side by Dr. E.M. Sudarsana Natchiappan, Minister of State for Commerce and Industry and Mr. Dmitry S. Katerinich, Minister of Industry of the Republic of Belarus. Highlighting that the meeting is yet another step in the direction of strengthening trade and economic relations between the two countries, Dr. Natchiappan said that “sectors like pharmaceutical, fertilizers, information technology and research & development offer tremendous potential for cooperation between India and Belarus.” Elaborating on the fertilizer sector, the Indian Minister conveyed that “India is looking for long-term contracts for supply of potash to meet its growing requirements.” He also added that Indian companies can also look for “opportunities for setting up joint ventures in Belarus for production of potash-based fertilizers.” The Belarusian side recommended India to determine an Indian counterpart deputed to negotiate on the long-term cooperation agreement, take decisions and signing of the agreement
for the full volume of the deliveries. The JSC “Belaruain Potash Company” and an Indian counterpart to be nominated by the Government of India should finalise the volumes, terms and conditions of the long-term cooperation agreement for MOP deliveries to India within specified time period. The two Ministers also signed a Protocol after the Meeting. It was decided by both the sides that necessary steps will be taken to sign the Memorandum of Understanding between the Ministry of Textiles, India and the Belarusian State Concern for Manufacturing and Marketing of Light Industry Goods (concern “Bellegprom”) on Cooperation in the Field of Textiles, Clothing and Fashion Industries. The Republic of Belarus also asked India to recognise Belarus as a market economy country. The Indian side responded that the matter is under active correspondence between the sides. India is considering the issue of grant of market economy status to Belarus within the framework of India’s Antidumping Rules. The Indian side stated that the matter is being examined positively and the official decision would be taken before the next session of the Commission.
The Belarusian side flagged the issue related to the introduction and long duration of action of antidumping duties on a number of products of the petrochemical complex: tire cord fabric manufactured by JSC “Grodno Azot” and acrylics fibers manufactured by the plant “Polymir” of the OJSC “Naftan”. Belarus advocated for revocation of the antidumping duties on these goods and expressed the intension to maintain the export of the products to India, mostly of interest to Indian consumers. Both the sides also agreed to create a Certification Centre of Belarusian companies and professionals in the field of software at the earliest possible time. The Belarusian Side will provide a draft concept of the Certification Centre of Belarusian companies and professionals in the field of software to initiate negotiations with the Indian Side. The Belarusian delegation proposed to hold the 9th meeting of the Business Council “India-Belarus” in 2013 to promote the collaboration of business representatives, as well as agreed to define the dates of the National Exhibition (exposition) of the Republic of India during 2013-2014 in Minsk.
Kumarakom to be world-class Model for Tourism Tourism
umarakom, the famed backwater tourism hotspot in Kerala, is fast moving forward to become an international Model Responsible Tourism (MRT) destination. The Kerala Institute of Tourism and Travel Studies (KITTS) is providing equal importance to social, economic and environmental aspects at the four centres selected in the State for conversion into MRT destinations. Various local agencies such as panchayats, local community, tourism industry, NGOs will be actively involved in formulating strategies to promote RT initiatives in select areas.
S. Harikishore, Director of Kerala Tourism, said that the main strategy is to create a sustainable tourism destination with the support of tourism stakeholders. Each stakeholder will be given the responsibility in making tourism sustainable on the economic, sociocultural and environmental fronts, he said. Four destinations in the State were identified for implementing the RT initiative. Wayanad, Thekkady and Kovalam are the other three. It was decided to elevate at least one destination into the level of international model and Kumarakom was chosen. The approval from the State Tourism Department has been re-
ceived in this regard, he said. The project has so far succeeded in creating visible benefit to the local community on economic and environmental fronts. However, efforts will be needed to promote local production, micro enterprises and valueadded products that could be linked with the tourism industry so that the community can derive economic benefit out of it. A production system was designed and implemented at Kumarakom, which will ensure regular supply of products needed by the hotels. India Newsletter | 11
Indian Industry Sector Close-Up
he cement sector notably plays a critical role in the economic growth of the country and its journey towards conclusive growth. Cement is vital to the construction sector and all infrastructural projects. The construction sector alone constitutes 7 per cent of the country’s gross domestic product (GDP). The industry occupies an important place in the Indian economy because of its strong linkages to other sectors such as construction, transportation, coal and power. India is the second largest producer of quality cement in the world. The cement industry in India comprises 183 large cement plants and over 365 mini cement plants. Currently there are 40 players in the industry across the country. The cement industry in India is experiencing a boom on account of overall growth in the economy. The demand for cement, being a derived one, depends mainly on the industrial activities, real estate business, construction activities and investment in the infrastructure sector. The Indian cement industry is involved in production of several types of cement such as Ordinary Portland Cement (OPC), Portland Pozzolana Cement (PPC), Portland Blast Furnace Slag Cement (PBFS), Oil Well Cement, Rapid Hardening Portland Cement, Sulphate Resisting Portland Cement, White Cement, etc. They are produced strictly as per the Bureau of Indian Standards (BIS) specifications and their quality is comparable with the best in the world. Indian cement majors—ACC Ltd, Shree Cement Ltd and Ultratech—have signed a cooperation pact to support low-carbon investments in India. The pact was signed in Geneva with member companies of the World Business Council (WBC) for Sustainable Development’s Cement Sustainability Initiative and International Finance Corporation (IFC). Under the pact, a Low Carbon Technology Roadmap for the Indian cement industry is to be launched this year-end. The roadmap will outline a possible transition path for the cement industry to reduce its direct emissions by 18 per cent by 2050. 12 | India Newsletter
Market Size The cement industry of India is expected to add 30-40 million tonnes per annum (MTPA) of capacity in 2013. The industry has a current capacity of 324 MTPA and operates at 75-80 per cent utilisation. “It is anticipated that the cement industry players will continue to increase their annual cement output in coming years and the country’s cement production will grow at a compound annual growth rate (CAGR) of around 12 per cent during 2011-12 - 2013-14 to reach 303 million metric tonne (MMT),” according to a report titled ‘Indian Cement Industry Forecast to 2012’, by research firm RNCOS. Investments The cement and gypsum products sector has attracted foreign direct investments (FDI) worth Rs 11,779.04 crore (US$ 2.12 billion) between April 2000 to February 2013, according to the data published by the Department of Industrial Policy and Promotion (DIPP). Some of the major investments in the sector are as follows:
• Barings Private Equity Asia has
picked up a 14 per cent minority stake in the Indian unit of cement major Lafarge, for Rs 1,427 crore (US$ 257.11 million)
• Sinoma International Engineer-
ing (Hong Kong) Ltd, a part of the Chinese state-run National Materials Group Corp, has entered the Indian cement equipment industry by acquiring a majority stake in Chennai-based equipment manufacturer LNV Technology Ltd
• Dalmia Cement plans to invest Rs
1,800 crore (US$ 324.32 million) to increase the company’s cement manufacturing capacity over the next two years. The company also plans to set up a 2.5 million tonne (MT) greenfield unit in Karnataka
• Ambuja Cements Ltd plans to
invest Rs 2,000 crore (US$ 360.33 million) to enhance its cement capacities in Rajasthan and northern region.The proposed project at Rajasthan would add five MT capacity
to the total cement production of India
• Reliance Cement Company Pvt
Ltd (RCC), a subsidiary of Reliance Infrastructure Ltd, has commenced production of cement from its first manufacturing unit at Butibori, Nagpur in Maharashtra
Government Initiatives India would require overall cement capacity of around 480 MT. The industry will have to add another 150 MT of capacity during the period, according to the latest report from the working group on the industry for the 12th Five Year Plan (2012-17). The major policy and fiscal initiatives are expected to catalyze infrastructure and industrial development in the region, spurring the demand for cement. Some of initiatives taken by the Government to further promote the sector are as under: Excise duty rationalised for packaged cement, whether manufactured by mini cement plants or others Packaged cement, whether manufactured by mini-cement plants or others, attracts differential excise duty depending on the Retail Sale Price per bag. It is proposed to prescribe a unified rate of 12 per cent + Rs 120 (US$ 2.16) PMT for non-mini cement plants and 6 per cent + Rs 120 (US$ 2.16) PMT for mini-cement plants. It is proposed to charge this duty on the Retail Sale Price less abatement of 30 per cent The Indian construction industry has shown significant development over the years with eminent and efficient engineers at the helm and is among the best in the world, said Anand Sundaresan, Managing Director, Schwing Stetter (India) Pvt Ltd, while inaugurating a conference on ‘Latest Trends in Construction Industry’ The private sector is expected to contribute 44 per cent of the total projected spend of US$ 100 billion on roads and highways over the Twelfth Five Year Plan (2012-17) period
Road Ahead The demand for cement, depends primarily on the pace of activities in the business, financial, real estate and infrastructure sectors of the economy. Cement is considered the most preferred building material and is used worldwide for all construction works such as housing and industrial construction, as well as for creation of infrastructures like ports, roads, power plants, etc. Indian cement industry is globally competitive as the industry has witnessed healthy trends such as cost control and continuous technology upgradation. India is experiencing growth in all these
areas and hence the cement market is
Cement Manufacturersâ€™ Association
moving ahead in spite of the world-wide
CMA Tower, A - 2E, Sector 24 NOIDA -
economic recession. The initiatives pro-
201 301 - Uttar Pradesh, India
vided by the Government of India to various infrastructure projects, road network and housing activities will provide
Phone: 91-120-2411955, 2411957, 2411958
required stimulus for the growth of ce-
ment industry in India.
Website: www.cmaindia.org/index.html India Newsletter | 13
India contributed about 25% of our global sales Interview with Bo Shin Seo, Hyundai Motor India’s MD and CEO
yundai Motor India Ltd, which entered the Indian market in the late 1990s, is the country’s largest car exporter today. The company changed the dynamics of the small car market, challenging the dominance of Maruti Suzuki. In an interview, Bo Shin Seo, Managing Director and Chief Executive Officer of HMIL, shared some insights on the company’s history and future plans. Edited excerpts: Q: How has been the experience in India been so far? A: Hyundai Motor India Ltd. has had a strong run in India with a strong portfolio from compact to premium cars with a wide dealership network across the country. Our success story began way back in 1998, with the immensely popular ‘Santro’. Even after 15 years, the Santro continues to be extremely popular. Since then HMIL has launched the Eon, i10, i20,Accent,Verna, Elantra, Sonata and the Santa Fe.We plan to launching new cars every year for the next five years. Our current passenger car market share is 20.3 per cent and we are confident of steadily increasing that share. HMIL is the country’s largest exporter and the second largest car manufacturer in India. India is an extremely important market for Hyundai. The Indian automobile sector is poised for steady and strong growth in the future and has a robust young population with a strong aspiration to own a car. This provides a growth opportunity for the passenger vehicle industry.The Indian automobile industry holds good growth potential for the mid-term and long term horizon.
Q: Do you think the Indian Government is doing enough for the industry? What demands do you have? A: The Indian government has always extended its support to the automobile industry to create future growth. India is at the core of Hyundai Motor Company’s overall business plan and is an extremely important market for the parent company. The Government has supported us through the duration of our operations due to which we were able to set up a plant in a record 17 months! We believe that the Indian automobile industry holds good growth potential, the current economic scenario notwithstanding. With measures to improve infrastructure, such as better connectivity to ports, improved port infrastructure, improved rail and road 14 | India Newsletter
connectivity, stability in fuel prices and lower interest rates, the market should see a turnaround.
Q: How often do you check if workers are happy in terms of wages and workload?
Q: Are there any expansion plans in terms of the facilities?
A:While exports are an integral part of our business strategy, we are always focussed on the domestic market. But, I am confident that we will continue to maintain leadership in exports without compromising our focus on the domestic market. The depreciating rupee will have an adverse impact on the input costs and fuel prices.This may lead to a further drop in already stagnating demand and margins will be squeezed further. However, exports help us get much better realisations and ring-fence the risk a depreciating rupee presents.
A: Hyundai Motor India ranks among one of the best paying companies in the car manufacturing sector and our welfare measures are one of the best in the Industry. However, these are reviewed once in three years when we hold discussions with the recognised union. Apart from that, we engage in constant dialogue with workers to resolve their issues, if any, amicably. We also have the “My Voice Box” policy wherein employees can directly get in touch with the management and expect redressal within seven working days. My Voice Box is an employee feedback forum that helps in understanding employees’ concerns, grievances and suggestions. The confidentiality of the process has made it extremely successful. Boxes are placed on all shop floors, work areas and other areas frequented by employees along with a hard copy of the forms. The suggestions received are collected daily and forwarded to the concerned department for redressal. The whole process is monitored by an Apex Committee comprising the top management and is reviewed every week. Employees have also given various suggestions for improvisation over the years.
Q: How much have you invested in India until now? And do you have new investment plans?
Q: How much royalty goes from the Indian subsidiary to Hyundai Motor Company?
A: To date, HMIL has invested $2 billion in two state-of-the-art passenger car manufacturing facilities. Recently, we announced a further investment of $300 million for a world-class flexible engine plant that will come up in the existing factory premises at Sriperumbudur in Chennai. The new flexible engine plant is expected to be operational in the latter half of this year.Through this investment we will be able service Indian customer requirements much faster.
A: We do not divulge standalone financials, but as a company, we contributed approximately 25 per cent to our parent’s global sales.
A:The new investments in a flexible engine plant and a new press shop will help create a direct employment opportunity for 500 persons apart from significant indirect employment opportunities. Q: As the largest car exporter, how confident are you about retaining this position in the future, especially with the rupee dollar fluctuation and high import cost of critical components?
Q: Is India a worker-friendly country? There were many issues regarding labour perks and salaries… A: The Indian workforce is highly skilled, disciplined, committed and well educated. They are familiar with modern technology and work practices and are as good as their counterparts in other parts of the world. Auto industry workers are among the highest paid in the country and enjoy best-in-class benefits compared to other industries.
Q: How many new models are you launching this year? What are your expectations of the new SUV and compact car? A: We already have plans to launch new cars every year for the next five years. We are now a full line-up company, offering compact to premium cars and SUVs. Currently, we have more than 60 variants for eight models. The large number of variants ensures that customer needs are met in all the segments. We are the only manufacturer that has continuously grown in the last 15 years. Our strategy to maintain market share would be to launch new products in volume segments and continuously improve the price value equations by refreshing existing models.This year, we will introduce a
Interview/Business new product, code named BA, a premium hatchback positioned between i10 and i20 to cater to a wide base of customers. We understand customer aspirations and needs in different segments and we study the same through market research. In future we will be launching cars in emerging segments, including compact SUVs and MPVs, to meet customer aspirations. Q: There is strong competition in each segment. How does Hyundai plan to maintain its position as the second-largest car manufacturer in India? A: HMIL’s focus will continue to be on the domestic market and to maintain our dominant position. We will periodically introduce new products that will meet the requirements of our customers and provide them with the very best of technology and design.
In India, our sales numbers are growing every year. In passenger cars, our market share is 20.3 per cent but in passenger vehicles it is 15.3 per cent. The high level of localisation, our dealership network, logistical advantages in having vendors situated around the plant, coupled with valued engineering, has helped us grow in India. The quality, customer satisfaction and investment in the brand are the main focus areas for us. Q: Rural markets are growing very fast. Being a mass brand, what is your rural sales strategy? A: Rural is the key part of our car sales strategy. We have increased the focus on setting up rural sales outlets. Hyundai is focusing on the rural market (beyond the top 110 cities) to increase sales. In the last two years there has been a noticeable upward sales trend. The rural
markets are growing on account of growing income and changes in lifestyle. In 2011, around 15 per cent of sales came from the rural and semi-urban markets. In 2012, it grew to 16.9 per cent and we expect it will increase to over 20 per cent by 2014. Our compact cars, especially Santro, Eon and i10, are highly accepted and appreciated in the rural and semi-urban markets. We are continuously working to penetrate the rural markets.Various activities are being conducted for brand building and sales. Special customised schemes for farmers, traders and Panchayat members are offered.We have tied up with grameen banks to facilitate easier finance options. We are increasing our sales network in the rural markets from 250 to 350 outlets by end of 2013, supported by a strong service network.
Board and General Meetings for Indian Companies By Dezan Shira
imited Liability Companies (LLCs) duly incorporated in India with the Company Registrar are governed by provisions of The Companies Act, 1956. The corporate scenario in India is more or less stringent when it comes to the governance of companies. Company management must comprise of a minimum two directors for a private limited company; they are responsible for carrying out business of the company in an efficient, profitable and legal manner.
ceive a prior notice of at least seven days defining the meeting agenda.
held at a shorter notice at the approval of shareholders.
The minutes of the previous meeting are approved and signed by the chairman in the next board meeting.The minutes of the meeting should be maintained in minute book leaves which are binded and available at the business premises of the company for inspection.
The general meetings of the shareholders of the company can be categorized into the annual general meeting (AGM) and extra-ordinary general meeting (EGM).The quorum shall consist of a minimum two members in person, or authorized representatives of the artificial person must be present within 30 minutes of the commencement of the meeting, for a validly held meeting of shareholders of the company. A general meeting is said to be validly conducted when the shareholders receive a notice of the meeting sent out by the board of directors defining the agenda at least 21 days prior to the meeting. A provision exists where general meetings can be
The AGM is mandatory to be conducted once every year and covers the adopting of financials, appointing auditors, declaration of dividends, appointing a director in place of a retiring director and any other special business which is to be considered and approved by the shareholders in their meeting. The AGM has to be held at the registered office of the company or within the city in which the registered office of the company is situated, unless otherwise specified by the articles of the company.
To facilitate this objective, there are various provisions in The Companies Act which make it mandatory for companies to hold meetings of the board of directors in each quarter. There must be at least four board meetings duly held with a quorum of two directors present in person in a financial year starting from April, and one in each quarter. The board meetings can be held at any place in India or even abroad, and at any day (including a public holiday), and even after the business working hours, as per the convenience and availability of the directors, of which the directors should re-
The EGM is conducted to discuss any extra-ordinary business which arises between two AGMs.The EGM is held primarily for the businesses which are beyond the authority of the board of directors to disperse and which cannot be delayed until the next AGM for shareholder approval. Shareholders who are unable to physically attend any AGM or EGM may appoint any natural person as their proxy to vote at the meeting, this is for both natural and artificial persons.
This article was extracted from Dezan Shira & Associates’s publication entitled “India Briefing”. For further corporate assistance, consider contating Dezan Shira & Associates, a specialist in foreign direct investment practice, providing corporate establishment, business advisory, tax advisory and compliance, accounting, payroll, due diligence and financial review services to multinationals investing in emerging Asia. For further details or to contact the firm, please email Mr. Olaf Griease under firstname.lastname@example.org or visit www.dezshira.com
India Newsletter | 15
INVEST INDIA Federation House,Tansen Marg New Delhiâ€”110 001 Tele: 0091-11-23765085, 23487278, 23487236, Email: email@example.com Website: www.investindia.gov.in
nvest India is the countryâ€™s official agency dedicated to investment promotion and facilitation. Set up as a joint venture between FICCI (51% equity), DIPP (35% equity held by the Department of Industrial
16 | India Newsletter
policy and Promotion, Ministry of Commerce & Industry) and State Governments of India (0.5% each), its mandate is to become the first reference point for the global investment community. It provides granulated, sector-specific and state-specific information to a foreign investor, assists in expediting regulatory approvals, and offers hand-holding services. Its mandate also includes assisting Indian investors make informed choices about investment opportunities overseas.
Trade Shows & Events
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/subsidies. India Newsletter | 17
STUDENTS WELFARE OFFICER Mr. Pawan T. Badhe, Third Secretary in this Embassy has been designated as Officer to look after welfare of Indian Students in Austria and Montenegro. His contact details are: Tel: +43-1-505866614 Email: email@example.com
LIBRARY The EMBASSYâ€™S library is opened mondays and wednesdays from 11am to 1pm
without appointment. For scheduling an appointment outside the opening hours, please contact the information assistant under firstname.lastname@example.org or 01 505 8666 33
BUSINESS CENTRE The EMBASSYâ€™S Business Centre is opened DAILY 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: email@example.com or 01 505 8666 30 Marketing Assistant: firstname.lastname@example.org or 01 505 8666 31
18 | India Newsletter
Important Notice concerning Overseas Citizens of India As per Ministry of Overseas Indian Affairs Notification No 585(E) dated 23rd March 2012 , OCI Registration Booklets of OCIs will be treated as identification for any services rendered to them in India. Further, in case proof of residence is required, the OCIs may give an affidavit attested by a notary public stating that a particular/specified address may be treated as their place of residence in India. OCIs may also give in their affidavit overseas residential address as well as email address.
Ministry of External Affairs goes Mobile NOW YOU CAN... Avail services : passport, visa, consular assistance Ask your Minister : on the go, anytime, anywhere Follow your PM : on his visits abroad Find the nearest Indian Mission/Post : for emergency consular assistance Be informed : about India’s Foreign Relations on the move and form your own opinions Know more : about how to undertake Kailash Manasarovar Yatra and Haj Pilgrimage Download and watch : pictures & documentaries on India Play and Personalize : what you need, when you need Share and contribute : your views, pics & suggestions All this & much more on your smartphone Ministry of External Affairs proudly presents “MEAIndia” – an integrated smart app for mobile and other hand held devices ‘MEAIndia’ is now available for download on App Store and Google Play Store..
India Newsletter | 19
Experience India Series
he unforgettable aroma of India is not just the heavy scent of jasmine and roses on the warm air. It is also the fragrance of spices so important to Indian cooking - especially to preparing curry. The world “curry” is an English derivative of “kari”, meaning soice sauce, but curry does not, in India, come as a powder. It is the subtle and delicate blending of spices such as turmeric, cardamom, ginger, coriander, nutmeg and poppy seed. Like an artist’s palette of oil paints, the Indian cook has some twenty-five spices (freshly ground as required) with which to mix the recognized combinations or “masalas”. Many of these spices are also noted for their medicinal properties. They, like the basic ingredient, vary from region to region. Although not all Hindus are vegetarians, you will probably eat more vegetable dishes than is common in Europe, particularly in South India. Indian vegetables are cheap, varied and plentiful and superbly cooked. Broadly speaking, meat dishes are more common in the north, notably Rogan Josh (curried lamb), Gushtaba (picture below) (spicey meat balls in yoghurt), and the delicious Biriyani (chicken or lamb in orange flavoured rice, sprinkled with sugar and rose water).
Mughlai cuisine is rich, creamy, deliciously spiced and liberally sprinkled with nuts and saffron. The ever popular Tandoori cooking (picture below) (chicken, meat or fish marinated in herbs and baked in a clay oven) and kebabs are also northern cuisine.
20 | India Newsletter
In the south, curries are mainly vegetable and inclined to be more hot. Specialities to look out for are Bhujia (vegetable curry), Dosa, Idli and Sambar (rice pancakes, dumplings with pickles and vegetable and lentil curry), and Raitas (yoghurt with grated cucumber and mint). Coconut is a major ingredient of South Indian cooking. On the West coast there is a wide choice of fish and shellfish; Bombay duck (curried or fried bomnloe fish) and pomfret (Indian salmon) are just two. Another specialty is the Parsi Dhan Sak (picture below) (lamb or chicken cooked with curried lentils) and Vindaloo vinegar marinade. Fish is also a feature of Bengali cooking as in Dahi Maach (curried fish in yoghurt flavoured with turmeric and ginger) and Malai (curried prawn with coconut).
One regional distinction is that whereas in the south rice is the staple food, in the north this is supplemented and sometimes substituted by a wide range of flat breads, such as Pooris, Chappatis and Nan. Common throughout India is Dhal (crushed lentil soup with various additional vegetables), and Dhai, the curd or yoghurt which accompanies the curry. Besides being tasty, it is a good “cooler”; more effective than liquids when things get too hot. Sweets are principally milk based puddings, pastries and pancakes. Available throughout India is Kulfi, the Indian ice cream, Rasgullas (picture right/ down) (cream cheese balls flavoured with rose water), Gulab Jamuns (flour, yoghurt and ground almonds), and Jalebi (pancakes in syrup). Besides a splendid choice of sweets and sweetmeats, there is an abundance of fruit, both tropical – mangoes, pomegranates and melons – and temperate apricots, apples and strawberries.Western confectionery is available in major centres. It is common to finish the meal by chewing Pan as a digestive. Pan is a betel leaf in which are wrapped spices such as aniseed and cardamon.
Another custom is to eat with your fingers but remember only of the right hand . Besides the main dishes, there are also countless irresistible snacks available on every street corner, such as samosa, fritters, dosa and vada. For the more conservative visitor, western cooking can always be found. Indeed, the best styles of cooking from throughout the world can be experienced in the major centres in India. Tea is India’s favourite drink,and. many of the varieties are famous the world over. It will often come ready brewed with milk and sugar unless “tray tea”,is specified. Coffee is increasingly popular..Nimbu Pani (lemon drink), Lassi (picture below) (iced buttermilk) and coconut milk straight from the nut are cool and refreshing. Soft drinks (usually sweet) and bottled water are widely available, as, are ’Western alcoholic drinks. Indian beer and gin are comparable with the world’s best, and are not expensive. Note that Liquor Permits are required in Tamil Nadu and Gujarat.
The variety of Indian cooking is immense, it is colourful and aromatic, it can be fiery or not as desired and it is inexpensive even at the top class hotels. No wonder, then that it is now the third most popular cuisine in the world nor will it be any more surprising when it becomes the first.
India Newsletter | 21
India in Austria
INDIAN MOVIE EVENING: Jab Tak Hai Jaan – Solange ich lebe
Friday, August 30th, 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).
Synopsis: Samar Anand is an army man working with the bomb disposal squad, also known as “the man who cannot die”. A young discovery channel reporter, Akira is interested in making a documentary
on his life and gets a chance encounter
Directed by: Yash Chopra
upon the reason of Samar’s daredevilry
Starring: Shah Rukh Khan, Katrina Kaif and Anushka Sharma
and his love Meera. Samar’s relationship
with Meera and Akira, Both encountered
Duration: 176 Minutes
10 years apart forms the crux of this
Language: Hindi Subtitles: German Image Quality: HD
romantic saga directed by late Mr. Yash Chopra in his last movie.
BOLLYWOOD MOVIES IN AUSTRIA
At the UCI KINOWELT Millennium City (Wehlistr. 66,1200 Vienna)
For more information, showtimes, reservations and tickets:
www.uci-kinowelt.at/ Millennium_City CURRENTLY SHOWING111 22 | India Newsletter
India in Austria
Conference: Yoga in Transformation: Historical and Contemporary Perspectives on a Global Phenomenon September 19â€“21, 2013 | University of Vienna, Austria
India Newsletter | 23