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INDIA NEWSLETTER Indian Embassy, Vienna

Published by the Embassy of India, Vienna Year 5 • Issue 57 • September 2015


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The Digital India programme is a flagship programme of the Government of India with a vision to transform India into a digitally empowered society and knowledge economy Digital Infrastructure as a Core Utility to Every Citizen

Governance and Services on Demand

Digital Empowerment of Citizens 2 • India Newsletter

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The new Government has prepared a five pillar strategy to drive India’s growth, which offer multiple avenues of collaboration and investments

■■ Infrastructure Development

■■ Manufacturing Growth

■■ Skill Development

■■ Energy Sufficiency

■■ Improved Business Environment India Newsletter • 3

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The Eight Core Industries comprise nearly 38 % of the weight of items included in the Index of Industrial Production (IIP). The combined Index of Eight Core Industries stands at 168.0 in July, 2015, which was 1.1 % higher compared to the index of July, 2014. Its cumulative growth during April to July, 2015-16 was 2.1 %.


The Ministry of Urban Development has sanctioned Rs 194 crore (US$ 22.9 million) to prepare city plans for the 96 cities selected under the SmartCity Mission..


The Indian Ports Association (IPA) is planning to set up an investment promotion and facilitation cell in association with Federation of Indian Chambers of Commerce and Industry (FICCI) and Ministry of Shipping in order to attract investments in the maritime sector.


The Indian automotive sector has the potential to generate up to US$ 300 billion in annual revenue by 2026, create 65 million additional jobs and contribute over 12 per cent to the India’s gross domestic product, as per the Automotive Mission Plan 2016-26, prepared jointly by government and Society of Indian Automotive Manufacturerss. 4 • India Newsletter


At 16%, India has the Highest proportion of ultra high net worth (UHNW) women in the world. India has over 1,250 UHNW women with a combined fortune of US$ 95 billion.


Swedish telecom equipment maker Ericsson has announced the introduction of a new radio system in the Indian market, which will provide the necessary infrastructure required by mobile companies in order to provide fifthgeneration (5G) services in future.


Government of India aims to make automobiles manufacturing the main driver of ‘Make in India’ initiative, as it expects passenger vehicles market to triple to 9.4 million units by 2026, as highlighted in the Auto Mission Plan (AMP) 2016-26.


Government of India has accepted the recommendation of A.P. Shah committee to not impose minimum alternate tax (MAT) on overseas portfolio investors retrospectively for the years prior to April 01, 2015, thereby providing significant relief to foreign institutional investors (FIIs).


The Indian food and grocery market is the world’s sixth largest, with retail contributing 70 per cent of the sales. It is projected to

grow at the rate of 104 per cent, touching US$ 482 billion by 2020.


The Ministry of Skill Development and Entrepreneurship (MSDE) has scheduled an online event, Google+ Hangout on September 02, 2015, in association with the World Bank, for greater engagement of the Indian corporate sector towards India’s skill development initiatives. SkillIndia.


Mr Piyush Goyal, Minister for Power, Coal and Renewable Energy has outlined huge investment opportunity of US$ 250 billion in the renewable energy space in India, which includes peripheral transmission and generation segments.


Airbus SAS, one of the top two aircraft manufacturers in the world, plans to open an aircraft maintenance and repair overhaul facility in India as a result of it receiving its biggest order (of 250 passenger jets) from IndiGo airlines.


India’s wind energy market is expected to attract investments totalling Rs 1,00,000 crore (US$ 15.7 billion) by 2020, and wind power capacity is estimated to almost double by 2020 from over 23,000 MW in June 2015, with an addition of about 4,000 MW per annum in the next five year.

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INDIA-AUSTRIA NEWS Mission releases 6th volume of the Business Series “India Reader” entitled “Make in India” The Embassy of India, Vienna, has officially released the sixth volume of the “India Reader” business magazine. The series is targeted at the India-Austria Business Community and aims to provide information on the most commonly discussed topics of doing business in India. This volume entitled “Make in India” was compiled in-house by our commercial wing and features a comprehensive overview of the Make in India campaign and its explicit opportunities for Austrian companies in the Indian market. The series has already another four volumes published on 1) Indovation – How to innovate for India, 2) PAN – Permanent Account Number, 3) Legal and Tax aspects of doing business in India, 4) Transport and Logistics within and from India, and 5) Export Promotion Councils and Organisations in India To read and download the publication, please see its webpaper version under

Visit of U.P. Government delegation to Austria U.P. Government delegation led by Chief Secretary Shri Alok Ranjan and comprising of Sh. Deepak Singhal, Principal Secretary Irrigation, GoU.P. and Shri Shambu Singh Yadav, Secretary to Hon’ble Chief Minister of U.P. visited Austria for a bilateral meeting with Kontroll Bank to discuss possible financing of projects related to Ganga Rejuvenation Plan, Waste Water Control and Flood Control.

and Steel, Tourism, SME Promotion, and Skill Development. The bilateral economic trade between the two countries were reviewed and agreed to create linkages between business associations and trade bodies on either side to promote bilateral trade. To enhance bilateral trade and investment, both sides agreed for ‘participation in Fairs and Exhibitions’ and ‘B-2-B Engagements. It may also be indicated that the recently concluded 14th JCM meeting has kept a target of Euro 3 billion of bilateral trade in next 5 years.

14th session of the IndiaAustria Joint Economic Commission (JEC) The 14th session of the IndiaAustria Joint Economic Commission (JEC) was held in Vienna on 31st August-1st September 2015. The Indian delegation was led by Ms. Anita Praveen, Joint Secretary, Department of Commerce, Ministry of Commerce and Industry. The Austrian side was led by Ms. Bernadette Marianne Gierlinger, Vice Minister for Foreign Economic Policy and European Integration. In the last 14th JEC, both sides agreed upon the huge potential for cooperation in the Development of Smart cities in India, Renewable Energy and Energy Efficiency, Environmental Technolgy including water and waste water Treatment and Waste Management, Infrastructure, Information Technology sector, Automotive, Iron

Tarini International to acquire 51% stake in Ms HPWE GmbH, Austria Tarini International announced that the Company has entered into SHARE ACQUISITION AGREEMENT with Ms HPWE GmbH, Austria on 13 August 2015 for acquiring 51% Share Capital of Ms HPWE GmbH, Austria subject to the approval of shareholders in the ensuing Annual General Meeting of the Company and all Statutory Clearances as applicable. India Newsletter • 5

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NEWS ARTICLES India among few bright spots in global economy as per International Monetary Fund (IMF) India was declared as one of the few bright spots in the global economy by the International Monetary Fund (IMF) Chief Ms Christine Lagarde at the meeting of G20 Finance Ministers and Central Bank Governors. While discussing monetary policy uncertainties, Ms Lagarde noted that most places in the advanced world are facing problems while among the emerging economies, there are problems in China. However, among emerging economies, India seems to be the only country with any growth. India had earlier noted that the recent devaluation of major currencies followed by currency depreciation in a large number of emerging markets as having raised the risk of competitive devaluations. Such currency devaluations at a time when the global demand is sluggish may threaten the stability of global economy. India’s central bank governor Mr Raghuram Rajan commented that global economies, witnessing sustainable growth, need to hike rates but not in a “one go, big bang” manner.

GE to invest in India’s rail, power, healthcare sectors General Electric Co. is looking to make further investments in India’s rail, power and healthcare sectors, the company said in a statement. The announcement comes ahead of company chairman and chief executive officer (CEO) Jeff Immelt’s visit to India later this month. Investments in the country have doubled in the past five years to $3 billion, the company said. “India is a growth engine for Asia, and we see huge potential for the country in the manufacturing space. Infrastructure is a key driver of India’s growth. We are keen to invest much 6 • India Newsletter

more in India and in projects to boost its infrastructure in sectors such as rail, power and healthcare. These efforts will have a ripple effect on the overall economic growth in India and beyond,” Immelt said in a statement. The company said as part of its Make in India initiative, it has increased the levels of local sourcing by 20% for locomotives, 30% for power equipment and 15% for aviation. “India may soon become a global centre of excellence for certain components,” the company said. GE is also looking to form a publicprivate partnership in Bihar, in line with the existing partnerships it has with seven states for healthcare. Earlier this year, the company announced a $200 million investment in its multi-modal manufacturing facility in Pune, Maharashtra.

Value of India’s top 30 software product start-ups crosses US$ 10 bn mark The top 30 software product startups in India are now valued at $10.25 billion, a 20% increase from October 2014, says the updated version of the India Software Products Industry Index–B2B, compiled by software products think tank iSPIRT. In the updated version of the report, which doesn’t disclose the amount each company is valued at, there are six new entrants—Accelya Kale, BrowserStack, CRMnext, Indix, InMobi and Knowlarity. The list also features public companies such as Accelya Kale and Ramco. The report aims to highlight that there is a software products industry that is growing in parallel, if not at the same pace, with the consumer Internet side. Venture capital (VC) funding for enterprise start-ups has also picked up; so has merger and acquisition (M&A) activity. iSPIRT looked at more than 300 software product start-ups while compiling the index and spoke to

more than 100 start-ups, investors and others for verifying valuations, which were estimated as of 30 June. Some large recent funding deals in enterprise start-ups include $45 million raised by customer relationship management software products company Capillary Technologies; $60 million raised by analytics services company Manthan Software Services Pvt. Ltd; and $15 million raised by ad tech firm Vserv. Capillary said on Wednesday it bought multi-channel comme-rce solutions provider MartJack. The report released by iSPIRT said that the top 30 start-ups employ about 21,200 people. As many as 43% of the companies are bootstrapped, even though these were started earlier in the 1990s. The report, however, features 16 companies that were started after 2005—10 between 2005 and 2009—pointing to an increase in the creation of B2B companies. Enterprise software companies are much more cash-efficient than their consumer Internet peers, so they require fewer VC funds. Within the next year, some of the start-ups in the index are likely to opt for an IPO, a move that will give a significant boost to the development of the software products ecosystem, according to Dev Khare, managing director of Lightspeed India Partners Advisors, and a fellow at iSPIRT, who helped in putting together the index. “IPOs and M&A will happen perhaps in India or in the US stock markets. We are going to see a lot of smaller acquisitions, and the larger acquisitions will depend on companies successfully transitioning to global consumer bases,” Khare said. Around 80% of customers of the top 30 product start-ups are based abroad, but there has been a growing local customer base for these software product companies, coming from very high-growth companies like

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retail chains, healthcare chains, and e-commerce companies that need logistics and workforce management software. Because of a shift in the buying pattern of B2B products—sales teams no longer need to go door to door, customers are signing up for products they find online—companies like Freshdesk, BrowserStack and Zoho are able to sell to customers from around the world even though they are based in India. Khare also pointed out that India is seeing two new types of entrepreneurs who venture into enterprise start-ups: employees from high-growth start-ups who identify gaps in those companies and employees from MNCs with product mindsets. “We are seeing a lot of people coming into the entrepreneurial ecosystem, perhaps energized by what they are seeing on the consumer side. There’s a little bit more VC available for them. They can sell globally sitting in India if they want to; they don’t need to raise a lot of capital to start selling globally,” Khare said. Manthan Software CEO Atul Jalan said he had seen a change in the mindset of people about software product companies over the past five years, and more people were expressing an interest in joining such firms

Internet user base in India at 302 mn, set for exponential growth It took more than a decade for the internet user base to grow from 10 million to 100 million in India, while the jump to 200 million took three years. From there, the growth was even faster, it took only an year to touch the 300-million mark. According to the Internet and Mobile Association of India (IAMAI), the number of internet users reached 302 million by December 2014, with growth of 32 per cent in 2013. By June this year, it had already touched 354 million, primarily driven by mobile internet users, which have reached

213 million. “We believe 2014 was the year of internet and are of the firm view that the internet has reached an inflection point,” IAMAI said, in a report. “The consolidated numbers taken out by IAMAI for FY14 affirms the fact that internet in India had now becoming inclusive, which augurs well for the industry and society at large,” it added. Interestingly, the report said the number of mobile internet users is growing the fastest, with it witnessing a growth of 45 per cent in 2014 over the previous year. As on October 2014, India had 159 million mobile internet users, of which close to 75 per cent users were urbanites, while the rest were from rural India. The number of mobile internet users is now estimated to have reached 213 million as of June 2015, according to IAMAI-IMRB estimates. The rise in the number of Internet users in rural India has also helped in rising use of the local language user base (127 million as of June 2015) and local language content. Since many of the users in rural India are getting exposed to the Internet for the first time, they are also aiding the usage of social media. In 2015, usage of social media in rural India has shown growth of 100 per cent with around 25 million users while urban India registered a relatively lower growth of 35 per cent. According to the report, the growing internet penetration is having huge impact on digital commerce, the market for which was valued at Rs 81,525 crore by the end of December 2014, a growth of 53 per cent over 2013. This is estimated to grow further by 33 per cent so as to cross Rs 1,00,000 crore by 2015-end. Besides, this has aided the digital payment industry, which grew 40 per cent to reach Rs 1,20,120 crore by December 2014, with the metros of Delhi, Mumbai, Kolkata and Chennai contributing around 60 per cent of the total digital payment gateway market size.

UK leads G20 nations in FDI flow to India The latest data to confirm Britain’s increasing interest in investing in India will make PM Narendra Modi happy a couple of months before he embarks on his maiden visit to the United Kingdom. The UK has become the largest investor in India among all G20 countries with a combined revenue of more than $54 billion in India. Between the year 2000 and 2015, UK’s FDI into India amounts to $22 billion - 9 per cent of all FDI in the country. In total, G20 nations invested $ 73.9 billion in India between 2000-2015 with the UK being the single largest G20 investor into India followed by Japan ($ 18.3 bn), the US ($13.7bn), Germany ($ 7.6 bn) and France ($ 4.5 billion). As India’s largest employer, UK firms employ around 691,000 people across the country - 5.5 per cent of total organized private sector jobs in the country. Between 2000 and 2015, UK FDI generated around 138,000 direct jobs, 7 per cent of the total 1.96 million jobs generated by FDI in India. India’s massive talent pool was the main reason for 63 per cent of the British companies to believe in India’s potential while India’s recent growth story made 86 per cent of them turn to interest towards the Asian giant. English being an official language has helped, too, with 53 per cent of the companies relying on it while 40 per cent said it was the country’s stable government. Confederation for British Industry’s first Sterling Assets India report sponsored by PwC UK and brought out in association with the UK India Business Council says that Maharashtra and Delhi have attracted the bulk of Britain’s FDI into India - 26 per cent and 20 per cent respectively. The chemicals sector attracts the lion’s share of British investment in India, at $5.78 billion (26 per cent of UK FDI), followed by the pharmaceutical sector at $3.76 billion India Newsletter • 7

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(17 per cent of UK FDI) and the food processing sector at $3.05 billion (14 per cent of UK FDI). Katja Hall, the confederation’s deputy DG, said, “The economic relationship between India and the UK is in fine fettle. The UK has played a significant role in India’s growth journey, investing more and creating more jobs than any other G20 nation. PM Modi’s steps to improve the ease of doing business in India are a great boost and we look forward to the EUIndia FTA talks resuming.” British prime minister David Cameron recently asked Modi to help “the EUIndia free-trade agreement get going again” and “for structural reform in India to help open up her economy and lead to higher growth rates”. Cameron met the Indian PM on the sidelines of the G-20 Summit in Brisbane recently. Modi met an EU delegation who conveyed that the 28-nation bloc is keen to “re-engage” with India on trade”. Cameron had said “I had a very good meeting with PM Modi. We discussed the need for the EU-India free-trade agreement to get going. I am clear that PM Modi is a man with a clear vision for doing economically for his country what he succeeded in doing for Gujarat”. Mukesh Rajani, India Business Group Leader at PwC UK said “The UK has been one of India’s largest investor for decades. But with Japan and other territories rapidly increasing levels of direct investment in the last few years, this advantage is by no means guaranteed”. According to the findings, UK is a close second (after the USA) in generating service sector jobs in India, with an estimated 43,000 positions created. CBI says “India remains a hugely attractive investment destination for British companies and several of them are now household names in India. It is easy to guess why. India is Asia’s third-largest economy. The sheer size of the domestic market - fuelled by growing purchasing power and size of the Indian middle class, successive democratically elected governments, a vast pool of talented workforce, a 8 • India Newsletter

legal and educational system rooted in British tradition and English as an official language - are some of the many factors that have attracted and retained British investments in India”. According to United Nations Conference on Trade and Development (UNCTAD) World Investment Report 2015, India acquired ninth slot in the top 10 countries attracting highest FDI in 2014, moving up six places compared to last year. The report to be made public on Wednesday says India has historically attracted FDI directly and indirectly through a number of international business centres. FDI from UK-headquartered companies constituted $4.4bn of the top 25 investments from these centres.

India’s manufacturing PMI: best in Asia India’s Nikkei Purchasing Managers’ Index (PMI) for the manufacturing sector for August came in at 52.3, lower than July’s 52.7. But among emerging market Asian economies, apart from Vietnam, India’s manufacturing PMI was the only one that showed expansion from the previous month. All the other economies had readings below 50, which indicate a contraction in the manufacturing sector from the previous month. Indian manufacturing growth may be sluggish, but at least it’s growing. Vietnam’s manufacturing PMI was 51.3, lower than India’s. Japan, which is a developed economy, had a manufacturing PMI of 51.7 for August, below India’s rate of expansion. Here is a compilation of comments in the Markit press releases about the Asian PMIs for August: ■■ China: The quickest deterioration in operating conditions for over six years. ■■ Indonesia: Eleventh consecutive monthly deterioration in business conditions. ■■ Vietnam: Output growth slows to 10-month low. ■■ South Korea: A solid deterioration in operating conditions at

manufacturers. ■■ Taiwan: The fastest deterioration in overall operating conditions faced by manufacturers for 35 months. ■■ Malaysia: The strongest deterioration in operating conditions at manufacturers in nearly three years. ■■ India: At 52.3 in August, down from July’s six-month high of 52.7, the seasonally adjusted Nikkei India Manufacturing Purchasing Managers’ Index (PMI) pointed to a further, although weaker, improvement in the health of the sector. The key takeaways from the data are: ■■ The Asian region is seeing a huge slowdown, partly the result of the spluttering of their export-led growth model and partly the effect of the slowdown in China. ■■ India stands out as a beacon of growth in Asia. ■■ As Pollyanna de Lima, economist at Markit, points out about India: ‘As inflation concerns fade and demand growth loses momentum, further accommodative policy should not be discounted.’ In other words, a rate cut could further boost Indian growth.

India to remain fastest growing major economy for second straight quarter India’s gross domestic product (GDP) data for April-June quarter is estimated to be 7.4 per cent, as per median estimate from a Reuters poll of economists, thus making India the fastest growing major economy for a second quarter in a row. The expectations for faster growth is led by favourable demographics, a huge cost-effective workforce and a large domestic market and. As a result, many companies like Foxconn, Sony Corp. and General Motors have announced huge investments in India in coming years. Foreign direct investments (FDI) are up 30 per cent from a year earlier. There has been a robust growth in indirect tax receipts which indicates revival in manufacturing sector. According

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to analysts, key structural reforms remain crucial for a sustained pickup in economic growth of India.

$250 billion opportunity to invest in renewables: Piyush Goyal India has a $250 billion investment opportunity in the renewable energy space, said Piyush Goyal, minister of power, coal and renewable energy, at Mint’s fifth energy conclave in New Delhi. This includes the peripheral transmission and generation segments as well. India plans to have 100,000 megawatts (MW) of solar energy capacity by 2022. The government has also set a target of generating 60,000MW from wind power by then. Renewable energy currently accounts for 13%, or 35,777MW, of the total installed capacity of 274,818MW. India’s push to boost wind and solar power production provides opportunities for global companies that have been hit by the plunge in international crude oil prices. Lower oil prices can potentially derail, or at least delay, the world’s shift to wind and solar energy, as it makes less economic sense to tap costlier renewable energy sources. Speaking at the event, Goyal said that in the next two to three years, India will not be dependent on coal imports except for coking coal. The Indian coal sector, with one of the five highest reserves in the world, today imports coal worth $20 billion a year, as domestic production lags demand—partly a function of the inefficiencies built up in the decades since nationalization. “I would say not only for fuel but for equipment, technology, maintenance, servicing, innovation in the power sector, the coal sector and the renewable energy sector, except for coking coal, which is yet not explored adequately, I am confident that in the given three-four years, India will not have any import dependence at all,” he added. He added that India has done

exceedingly well in terms of equipment and on the solar energy side. “I don’t think we’ll have any more import dependence in terms of LEDs, energy efficiencies, in terms of equipment for the cells and modules that is raw material. I’m quite sure given the huge impetus the industry is focusing on or the government is trying, we shall soon have more manufacturing companies coming to India,” he said. Goyal said India will not have a single incandescent bulb in the country, and hopefully no CFLs (compact fluorescent lamps) either, in three years. “I am talking about three years replacing seven years, 770 million LED bulbs in people’s homes and just the programme we are looking at will save 100 million units of energy consumption—that is 10,000 crore units of electricity, and the benefit goes straight into your pocket,” he added. For India, the world’s biggest greenhouse gas emitter after the US and China, the emphasis on solar and wind power is also expected to strengthen its standing at global climate change negotiations that will culminate in a summit in Paris in December. Goyal also reiterated that India has around 18,500 villages that are still to be electrified. “In 1,000 days, we will have a situation where all 597,000 villages will have energy access. We have allocated central funds for it,” he added. He added that the government has taken a pledge to provide 24x7 power, which is the right of every citizen and will be taken up as a mission. “I assure that every household will get energy. Especially the eastern part of India has been deprived of their rights. It has to be a shared responsibility that people staying in forests, tribals, villages in Uttar Pradesh and Bihar have access to these basic amenities. For any development, I believe it is important to have electricity. You can’t have

huge investments and say wait, you’ll have to wait until electricity is made available to you,” Goyal said.

Bosch opens fifth manufacturing plant in Karnataka German auto components maker Bosch Ltd on Thursday opened its new factory at Bidadi, an industrial area about 35 km from Bengaluru. The plant’s first phase, built at a cost of Rs340 crore, will employ about 3,000 people. It has started producing common-rail fuel injection (diesel) systems at the site. Considerable delays in essential services like power connections had earlier prompted Stephan Berns, president and country head for Bosch India and managing director of Bosch Ltd to consider moving out of Karnataka. The Bengaluru-headquartered company earmarked close to Rs1,500 crore in September 2013 to expand manufacturing capabilities at its two plants in the state - Adugodi and Bidadi - over seven years. This is Bosch’s fifth manufacturing facility in Karnataka and the 14th in the country. About 17,000 of the 29,000 employees of the Bosch Group are based in Karnataka. Berns did not specify investments for the second phase of the Bidadi plant but said it would be completed by 2018. Karnataka has lost out on big-ticket projects in the past due to delays in land acquisition and government approvals. Two-wheeler maker Hero MotorCorp decided against investing in Karnataka, choosing instead to invest Rs2200 crore in neighbouring Andhra Pradesh for a factory. In 2013, Korean steelmaker Posco had scrapped its plans to build a $5.3 billion, six million tonnes per annum steel plant in the state due to delays in land acquisition and protests by farmers. E-commerce firm set up its warehouse in Telengana as it was unable to resolve tax disputes with the Karnataka government. India Newsletter • 9

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Since then, the Karnataka government has started to reach out to corporations to address their concerns. “We have got a lot of support from the government and also from the bureaucrats. Nevertheless, there have been some delays in the past which I addressed and the government has taken the message in a very positive way and this is helping us further and we appreciate this additional support,” Berns said. The existing facility in Adugodi will be converted into a technology centre, Berns said. The company also said it would be looking to invest in start-ups. “Bangalore being the startup capital of India, we are in touch with many startups here and we are looking into this opportunity. We don’t have any fund size but are handling it flexibly. We do not say how much money we want to spend but we look at opportunities,” said Peter Tyroller, member, board of management of Robert Bosch GmbH. The company said it was looking at start-ups focusing on Internet of Things (IOT) which can be applied to mobility, energy and smart homes. Bosch has nearly 12,000 employees in R&D. On its car and two-wheeler automation plans, Berns said the firm was working on a global level on the three trends of automated, connected and electrified. “The question is when is this going to come in India. In case of the automated in India, we do not see full automatic driving very soon because of traffic conditions here but we do see partial automatic driving such as emergency braking, automatic cruise control or automatic parking, which has a good market potential in India.” Tyroller said that automatic driving in two wheelers was not yet planned but said that technology such as electronic engine management systems can be connected to smartphones and utilised to adapt to different driving conditions and control functions. 10 • India Newsletter

India still best-performing EM in USD terms in last 3 months; top six bets: CLSA India’s economic fundamentals aren’t improving materially, but given that the growth outlook is worsening elsewhere in emerging markets (EMs), India’s relative position has strengthened, CLSA said in a report. The Asia-focussed broker is of the view that India is still among the bestperforming emerging markets in USD terms over the last three months, and its correlation with other emerging markets has come off significantly over the last few years. India’s PE premium over EMs is now 45 per cent, near its long-term average, said the CLSA report. Since the 4QCY11 lows, the MSCI EM index has come off by 8 per cent, while India is up 36 per cent in USD terms - well supported by fundamental factors of the reduction in twin deficits, lower inflation and a development oriented government. Commenting on the economy, CLSA is of the view that high-frequency monthly economic indicators suggest that the economic situation is slowly improving at the margin. An analysis of 42 high-frequency economic indicators highlights that the slow process of economic recovery has probably started. Most of the indicators are stable but not worsening anymore at the moment. CLSA continue to believe that economic recovery will be slow as the collateral damage of ‘inflation control’ i.e., property slowdown and rural slowdown, will take longer to offset. CLSA’s top ideas with earnings visibility include names like Infosys, Bharti Airtel, HDFC Bank, Maruti Suzuki, Sun Pharma and Zee Entertainment Ltd. Key events to watch till 2015 end ■■ GST: Important reforms have been delayed by political opposition; any progress on this would be a longterm positive. ■■ Rate cut: Sharp INR depreciation has raised some doubts on potential

rate cuts in India but CLSA’s economist Rajeev Malik, believes that a 25bp rate cut is likely in September 2015. ■■ Bihar state polls: If Mr. Modi’s BJP wins here, it will be a market sentiment booster. CLSA’s micro strategy team has highlighted Tata Motors as a key buy idea here. The fundamental research view on Tata Motors also remains that the stock factors in the worstcase scenario and upside is likely.

India gets a new bank After little more than a decade, a new private bank is born in India— Bandhan Bank Ltd. This is the first bank to come up in eastern India after Independence. A new bank is always welcome as a large slice of India’s 1.2 billion population does not have access to formal banking services. Theoretically, the scenario changed after the launch of the Pradhan Mantri Jan-Dhan Yogana in August 2014, which has enrolled 175.7 million depositors and collected deposits of Rs.22,394 crore, but the project is more about opening bank accounts than giving loans. After India embraced economic liberalization following a severe balance of payment crisis, the Reserve Bank of India (RBI) opened the doors for a set of new banks in January 1993. It received 113 applications, many from large industrial houses. Noted economistbureaucrat Sharad Marathe, the first chairman of the erstwhile Industrial Development Bank of India, reviewed the applications and nine new banks were set up and one cooperative bank was allowed to convert itself into a commercial bank. Not everyone has survived. For instance, Times Bank Ltd was merged with HDFC Bank Ltd; Global Trust Bank Ltd was forced to merge with Oriental Bank of Commerce; and Bank of Punjab Ltd was acquired by Centurion Bank Ltd to form Centurion Bank of Punjab Ltd, which in turn was taken over by HDFC Bank. In January 2001, RBI issued guidelines for the second set of new banks. A committee headed by former RBI

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governor I.G. Patel scrutinized the applications. Two licences were issued, including the conversion of a non-banking financial company into a bank—Kotak Mahindra Bank Ltd. In the past, RBI’s stated objective behind giving licences had been to introduce competition in the banking sector, largely dominated by state-owned banks. This time, its objective is to bring about greater financial inclusion in a nation where only 35% of adults have access to formal banking services, according to a 2012 World Bank working paper. Three years after former finance minister Pranab Mukherjee announced in 2010 that a new set of banks would be set up, RBI released the final guidelines on licensing norms in February 2013 and applications were received till 1 July 2013. A panel, headed by former RBI governor Bimal Jalan, sifted through the applications. The candidates eligible to apply for a banking licence needed to have a 10-year track record and they should never have been under the scanner of any regulator, enforcement or investigative agencies. Twenty-six companies had applied, but the Tata group later opted out. The list of serious applicants included corporate houses such as Aditya Birla Nuvo Ltd and Reliance Capital Ltd and financial intermediaries such as LIC Housing Finance Ltd and L&T Finance Ltd. In the past, when RBI opened doors for new banks, they were set up in the north, the south and the west, but not in the east. Incidentally, RBI was set up in Kolkata, but its headquarters were shifted to Mumbai in 1937. Among the first banks in India was Bank of Hindustan, established in 1770 in Kolkata, then Calcutta, under European management. It was liquidated in the early 1830s. State Bank of India, the nation’s largest lender, originated as the Bank of Calcutta in June 1806. Calcutta was also the first port of call for major foreign banks in India. Currently, Kolkata houses three banks. Allahabad Bank, the oldest of

the three, was set up in Allahabad in April 1865 by a group of Europeans. United Bank of India has its origin in United Bank of India Ltd, formed in 1950 with the amalgamation of four banks. Uco Bank was set up after the historic Quit India movement in 1942. Their combined branch network was 7,735 in fiscal 2014, less than 9% of the 39 listed banks’ nationwide branch network; they have a little over a 6% share of deposits and less than 6% of loan assets. The east and the northeast are the most under-banked regions in India. Out of around 126,000 bank branches, the east accounts for 16%, and the northeast only 2.6%. West Bengal, the fourth largest state in India by population, where Bandhan Bank has its largest branch network, accounts for 5.62% of bank branches, 6.22% of deposits, 4.67% of credit and for every Rs.100 the banks mobilize in this state, Rs.58 is given as loans. Bandhan Bank will also have many branches in Bihar—the third largest Indian state by population, which accounts for 4.78% of the branch network, 2.44% of deposits and 1.05% of credit, and where the credit-deposit ratio is 33.26%. Barring Odisha, Assam and Uttarakhand, all other states in the east account for less than 1% of branches, deposits and credit, and these branches offer loans to the extent of one-fourth to one-third of the deposits they mop up. It looks like Bandhan will strive to change how banking is done in India. It is starting with a 6.7 million borrower base, catered to through 2,022 doorstep service centres across 35,000 villages in 22 states, and will continue to give small loans. Many of its 500 bank branches will raise deposits to support the credit portfolio, but more importantly, it will also collect deposits from small savers who are often being taken for a ride by the so-called shadow banks. West Bengal has more companies raising money illegally from the public than any other state. Going by a recent report of the Securities and Exchange Board of India, 104 of 194 companies against whom the market

watchdog has taken action for raising money by issuing debentures and equity are from this eastern state. Indeed, there are challenges as many more banks—of different kinds and sizes—will come up in next few years and state-run banks are likely to change their approach to business. The Bandhan model may encourage other banks to extend their turf and embrace financial inclusion in a meaningful way.

Three Indian companies ranked among world’s top 100 innovative firms by Forbes Three Indian companies – Hindustan Unilever, Tata Consultancy Services (TCS) and Sun Pharmaceuticals – have been named by Forbes magazine among the top 100 most innovative companies in the world, in its ‘The World’s Most Innovative Companies’ list. Among the three, Hindustan Unilever was ranked highest at 41st, TCS was ranked 64th and Sun Pharma was ranked 71st in the list. The title of the world’s most innovative company has been awarded to electric car company Tesla Motors. The criteria for ranking was the ‘innovation premium’, calculated as the difference between the company’s market capitalisation and net present value of cashflows from existing businesses. The qualifying criteria to be considered for ranking was availability of seven years of financial data in public and minimum US$ 10 billion in market capitalisation. Besides Forbes considered only those companies for ranking who were known to invest in innovation.

India’s urbanisation growth to continue in coming years: Report Urban consumption growth is showing signs of improvement and this trend is likely to continue in future as a result of India’s favourable demographics and rising disposable income, according to a Morgan Stanley report. Morgan Stanley’s India Newsletter • 11

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proprietary AlphaWise City Vibrancy Index (ACVI), which measures key drivers of urbanisation across 200 Indian cities, has recorded a 66 per cent rise since 2011, with the financial infrastructure sector growing the fastest. ACVI is a measure of the drivers of urbanisation like infrastructure, job creation, modern consumer services and a city’s ability to mobilise savings. Overall ACVI has increased 5 per cent for the sixmonth period ending March 2015 while consumption index rose 8 per cent, job opportunities index rose 5 per cent and the financial infrastructure index rose 2 per cent in the same period. Bank ATMs have been the key driver of growth as the annual growth in ATMs has been 25 per cent for the top 200 cities. The fastest growing consumption segments include multiplexes, retail apparel and restaurants. The cities of Chandigarh and Raipur are ranked at the top in the consumption index, Bengaluru and Pune are at the top in terms of job opportunities, while Nashik and Varanasi lead the financial infrastructure index. Among the top 200 cities by population, Noida, Gurgaon and Chandigarh rank the highest in the Consumption Index while Noida, Gurgaon and Bengaluru lead in job opportunities and Belgaum, Faizabad, and Mahbubanagar are the top three for financial penetration, according to the report.

World’s first solar-run airport in Kochi

at a cost of Rs.62 crore in about six months. Once in operation, the project is estimated to generate about 50,000 units of electricity daily. This, coupled with an an existing 1 MW solar plant commissioned in 2013, which was upgraded from a 100 KW plant set up in the same year, will be enough to meet all power requirements of CIAL, said an airport spokesperson. In fact, CIAL expects the plant to generate more power than what is required for the airport. It has entered into a pact with the Kerala State Electricity Board (KSEB), the state-run utility, for feeding power produced from the station to the power grids of the board. The power would be brought back from the board as per the requirements of the airport and any additional power would be sold to KSEB. Based on installed capacity, CIAL is the largest project which has been executed by the Bosch Energy and Building Solutions team in India till date, said Steffen Berns, president of Bosch Group India and managing director Bosch Ltd in a press statement. CIAL director A.C.K. Nair said switching to green energy is almost equivalent to planting 3 million trees or not driving 750 million miles, as the airport would be able to cut carbondioxide emission from coal-powered power plants by 3 lakh tonnes over the next 25 years.

Kerala’s Cochin International Airport Ltd (CIAL) has become the first airport in the world that would be running fully on solar power. The airport officially commissioned a 12 MW solar project.

Sixteen years into operation, CIAL was the first airport to be constructed in public-private-partnership model in the country. It is also the only airport company that has handled more than five million passengers in a year in Kerala, as per its annual results reported in 2015.

The state’s chief minister Oomman Chandy commissioned the project constructed on 45 acres near the cargo complex of the airport. The project was executed by Bosch Ltd

The airport also plans to tap more into the green energy sector in Kerala, a state that has no lack of vast natural resources and has suitable weather conditions to harness renewable

12 • India Newsletter

energy. CIAL has already floated a proposal before the government to construct floating solar power plants on the water bodies of the state.

Lenovo becomes biggest China smartphone brand to ‘Make in India’ Lenovo Group Ltd has commenced making smartphones in India through contract manufacturer Flex, becoming the largest Chinese company to have its mobile devices made there after the local government raised import tariffs. Dedicated lines at Flex’s Sriperumbudur factory near Chennai will be the first time Lenovo and Motorola brands are made at the same facility, Amar Babu, chairman of Lenovo India, said in a phone interview. The brands will have separate lines with a combined annual capacity of 6 million units, Lenovo said in a statement. Foxconn Technology Group this year began production in India of smartphones for Chinese brands including Xiaomi and OnePlus after the local government raised import tariffs to attract investment in manufacturing. Lenovo’s announcement marks the largest Chinese name yet to be lured by Prime Minister Narendra Modi’s Make in India campaign, as the competitors vie to increase their share of the world’s third-largest smartphone market. “Output from the plants is focused mainly on serving the Indian market,” Babu said. Lenovo has no immediate plans to design and develop phones specifically for India, he said. Lenovo had considered adding smartphone manufacturing to its own PC factory in Puducherry on the nation’s southeast coast before deciding to outsource to Flex’s existing factory, Babu said. Indian production of its Moto E smartphone has already started.

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MAKE IN INDIA Summary ■■ 1st in global jute production. ■■ 7 Million Tonnes of FBP in 201314. ■■ 63% of the world’s market share in textiles and garments. ■■ 2nd largest textile manufacturer in the world. ■■ 2nd largest producer of silk and cotton. ■■ 24% of the world’s spindles. ■■ 8% of the world’s rotors..

Reasons to Invest ■■ India has the second largest manufacturing capacity globally. ■■ The Indian textile industry accounts for about 24% of the world’s spindle capacity and 8% of global rotor capacity. ■■ India has the highest loom capacity (including hand looms) with 63% of the world’s market  share. ■■ India accounts for about 14% of the world’s production of textile fibre and yarn and is the largest producer of jute and the second largest producer of silk and cotton. ■■ A strong production base of a wide range of fibre/yarn from natural fibres like cotton/jute, silk and wool to synthetic/man-made fibres like polyester, viscose, nylon and acrylic. ■■ Increased penetration of organised retail, favourable demographics and rising income levels to drive textile demand. ■■ India enjoys a comparative advantage in terms of skilled manpower and cost of production over major textile producers. ■■ Abundant raw material and increasing demand for exports to boost fibre production. ■■ Abundant availability of raw materials such as cotton, wool, s ilk and jute.


Growth Drivers

■■ The sector contributes 14% to industrial production, 4% to India’s GDP and constitutes 13% of the country’s export earnings.

■■ Rising per capita income, favourable demographics and a shift in preference for branded products is expected to boost demand. ■■ Favourable trade policies and superior quality will drive textile exports. ■■ Increase in domestic demand is set to boost cloth production. ■■ Pointed and favourable policies instituted by the government will give the industry a fillip. ■■ With consumerism and disposable income on the rise, the retail sector has experienced rapid growth in the past decade, with many global players entering the Indian market. ■■ The centers of excellence focused on testing and evaluation as well as resource centres and training facilities have been set up. ■■ As per the plan for 2012-17, the Integrated Skill Development Scheme aims to train over 2,675,000 people up to 2017, covering  all sub-sectors of the textile sector – textiles and apparel, handicrafts, handlooms, jute and sericulture.

■■ With over 45 Million people, employed directly, the industry is one of the largest sources of employment generation in the country. ■■ The domestic textile and apparel industry in India is estimated to reach USD 100 Billion by 2016-17 from USD 67 Billion in 2013-14. ■■ Exports in textiles and apparel from India are expected to increase to USD 65 Billion by 2016-17 from USD 40 Billion in 2013-14. ■■ The total fabric production in India is expected to grow to 112 Billion square metres by 2016-17 from 64 Billion square metres in 2013-14. ■■ India’s fibre production in 2013-14 is 7 Million Tonnes and is expected to reach 10 Million Tonnes in 2016-17.

India Newsletter • 13

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■■ Changing lifestyles and increasing demand for quality products are set to fuel the need for apparel.

FDI Policy ■■ 100% FDI is allowed under the automatic route in the textile sector; investment is subject to all applicable regulations and laws

Sector Policy ■■ Technology Upgradation Fund Scheme has infused investment of more than INR 2500 Billion in the industry. Support has been provided for modernisation and upgradation by providing credit a t reduced rates and capital subsidies. ■■ Scheme for Integrated Textile Parks provides world class infrastructure to new textile units. To date, 57 Textile Parks have been sanctioned with an investment of INR 60 Billion. By 2017, 25 more Textile Parks are to be sanctioned. ■■ Integrated Processing Development Scheme for sanctioning processing parks has been initiated. INR 5 Billion has been earmarked for this scheme. ■■ Integrated Skill Development Scheme has provided training to 1.5 Million people to cover all subsectors of textiles such as Textile and Apparel, Handicrafts, Handlooms, Jute and Sericulture.

Financial Support ■■ PROVISIONS OF THE 2O142O15 UNION BUDGET : ■■ Allocation of INR 500 Million towards the setting up of a trade facilitation centre and a crafts museum to develop and promote handloom products and carry forward the rich tradition of the handlooms of Varanasi. ■■ Allocation of INR 2000 Million towards the proposed setting up of mega textile clusters at Bareilly, Lucknow, Surat, Kuttch, Bhagalpur and Mysore and one in Tamil Nadu. ■■ Allocation of INR 300 Million towards the setting up of Hastkala 14 • India Newsletter

Academy for the preservation, revival and documentation of the handloom/handicraft sector in PPP mode in Delhi. ■■ Allocation of INR 500 Million towards the setting up of Pashmina Promotion Programme (P-3) and a programme for the development of other crafts of Jammu & Kashmir. ■■ The duty-free entitlement for import of trimmings and embellishments used by the readymade textile garment sector for manufacture of garments for exports is being increased from 3% to 5%. ■■ Non-fusible embroidery motifs or prints are being included in the list of items eligible to be imported duty-free for manufacture of garments for exports. ■■ The list of specified goods required by handicraft manufacturer-exporters is being expanded by including wire rolls so as to provide customs duty exemption on import by handicrafts manufacturer-exporters. ■■ Fusible embroidery motifs or prints, anti-theft devices, pin bullets for packing, plastic tag bullets, metal tabs, bows, ring and slider hand rings a re being included in the list of items eligible to be imported dutyfree for manufacture of handloom made ups or cotton made ups or manmade m  ade ups for export. ■■ Specified goods imported for use in the manufacture of textile garments for export are fully exempt from Basic Customs Duty (BCD) and Countervailing Duty (CVD) subject to conditions that the manufacturer produces an entitlement certificate from the Apparel Export Promotion Council or from the Indian Silk Export Promotion Council. ■■ Basic Customs Duty (BCD) on raw materials for manufacture of spandex yarn viz. polytetramethylene ether glycol and diphenylmethane 4,4 diisocyanate is being reduced from 5% to NIL. ■■ Any of the following two deductions can be availed:

■■ 1. Investment allowance (additional depreciation) at the rate of 15% to manufacturing companies that invest more than INR 1 Billion in plant and machinery acquired and installed between 01.04.2013 and 31.03.2015, provided the aggregate amount of investment in new plant and machinery during the said period exceeds INR 1 Billion. ■■ 2. In order to provide a fillip to companies engaged in manufacturing, the said benefit of additional deduction of 15% of the cost of new plant and machinery, exceeding INR 250 Million, acquired and installed during any previous year, until 31.03.2017. ■■ TAX INCENTIVES : ■■ R&D Incentives: Industry/ private-sponsored research programmes: ■■ A weighted tax deduction is given under Section 35 (2AA) of the I ncome Tax Act. ■■ A weighted deduction of 200% is granted to assesses for any sums paid to a national laboratory, university or institute of technology, or specified persons with a specific direction that the said sum would be used for scientific research within a program approved by the prescribed authority ■■ COMPANIES ENGAGED IN MANUFACTURE HAVING AN INHOUSE R&D CENTRE: ■■ A weighted tax deduction of 200% under Section 35 (2AB) of the Income Tax Act for both capital and revenue expenditure incurred on scientific research and development. Expenditure on land and buildings are not eligible for deductions. ■■ STATE INCENTIVES: ■■ Apart from the above, each state in India offers additional incentives for industrial projects. Some of the states also have separate policies for the textiles sector.

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■■ Incentives are in areas like subsidised land cost, relaxation in stamp duty exemption on sale/ lease of land, power tariff incentives, concessional rates of interest on loans, investment subsidies/tax incentives, backward areas subsidies and special incentive packages for mega projects. ■■ EXPORT INCENTIVES : ■■ Export Promotion Capital Goods Scheme (PCGS). ■■ Duty Remission Scheme. ■■ Focus Product Scheme, Special Focus Product Scheme, Focus Market Scheme. ■■ AREA-BASED INCENTIVES: ■■ Incentives for units in SEZ/NIMZ as specified in respective acts or the setting up of projects in special areas such as the North-east, Jammu & Kashmir, Himachal Pradesh &  Uttarakhand.

Investment Opportunities ■■ Entire value chain of synthetics. ■■ Value fabrics.




■■ Fabric processing set-ups for all kind of natural and synthetic textiles. ■■ Technical textiles. ■■ Garments. ■■ Retail brands..

Foreign Investors

Commissioner for Handicrafts

■■ Rieter (Switzerland) ■■ Trutzschler (Germany) ■■ Soktas (Turkey) ■■ Zambiati (Italy) ■■ Bilsar (Turkey) ■■ Monti (Italy) ■■ CMT (Mauritius) ■■ E-land (S. Korea) ■■ Nissinbo (Japan) ■■ Marubeni (Japan) ■■ Skaps (USA) ■■ Ahlstorm (USA) ■■ Terram (UK) ■■ Strata Geosystems (USA) ■■ Marks & Spencer (UK) ■■ Zara (Spain) ■■ Mango (Spain) ■■ Promod (France) ■■ Benetton (Italy) ■■ Esprit (USA) ■■ Levi’s (USA) ■■ Forever 21 (USA)

■■ Jute Commissioner

Agencies ■■ Ministry of Textiles, Government of India ■■ Office of Textile Commissioner ■■ Office of Development Commissioner for Handlooms ■■ Office of Development



■■ Apparel Export Promotion Council ■■ The Cotton Textile Export Promotion Council ■■ The Synthetic and Rayon Textile EPC ■■ Indian Silk Export Promotion Council ■■ Wool and Woollen Exports Promotion Council ■■ Carpet Export Promotion Council ■■ Export Promotion Council for Handicrafts ■■ Powerloom Development & Export Promotion Council ■■ Wool Industry Promotion Council


■■ Handloom Promotion Council


■■ The Handicraft and Handlooms Exports Corporation of India ■■ Central Cottage Industries Corporation of India ■■ Cotton Corporation of India Ltd. ■■ National Institute of Fashion Technology

India Newsletter • 15

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PERSPECTIVES ON INDIA An entrepreneurial revolution in India by Ravi Capoor, IAS, CEO, IBEF India. The Prime Minister of India, Mr Narendra Modi laid a special emphasis on start-ups in his speech from the ramparts of the Red Fort at India’s 69th Independence Day while mentioning other important issues like Swachh Bharat, Jan Dhan Yojana, corruption and black money. The Prime Minister announced a new campaign ‘Start-up India; Stand up India’ to promote bank financing for start-ups and offer incentives to boost entrepreneurship and job creation. Under this initiative, each of the 1.25 lakh bank branches in the country are expected to encourage at least one Dalit or Adivasi entrepreneur and at least one woman entrepreneur. “We are looking at systems for enabling start-ups. We must be number one in start-ups... Start-up India; Stand up India,” the Prime Minister said. In addition, a package of incentives will be given to manufacturing units for generating jobs, as part of the Skill India and Digital India initiative. This latest initiative is expected to give a new dimension to entrepreneurship and help in setting up a network of start-ups in the country. As outlined by many recently released reports and some of my earlier blogs, there is already an entrepreneurial revolution underway in India and with the government now backing it with the latest initiative, it is expected to further increase the number of first generation entrepreneurs in India. As shared in my previous blog, Bengaluru has the youngest startup ecosystem in the world, with the average founder’s age at 28.5 years, according to a survey of the top 20 global start-up ecosystems by The Startup Ecosystem report. We at IBEF have been covering the trend of rising first generation 16 • India Newsletter

entrepreneurs in India over the past few years. In fact, first edition of the IBEF book titled ‘Ordinary Indians, Extraordinary Enterprise’, released in 2013, included stories of around 25 successful first generation entrepreneurs. We are currently working on the second edition and are confident that the entrepreneurial revolution in India can be expected to further increase the number of first generation startups in the country.

Changing entrepreneurial ecosystem in India; Startups betting high by Umang Srivastava, Joint Managing Director, Bonita. For a long time when Indian economy was modeled on the Soviet model, capitalism was a bad word in India. Things, however, changed in the last decade of the 20th century when liberalisation unleashed a latent force of untapped entrepreneurial potential in the country. With the license raj easing and doing business becoming easier, India set about on a new direction, and there was no looking back. Not only did new business emerged, they created jobs, attracted foreign investment, spawned a new middle class and modeled a new generation of confident Indians for whom entrepreneurship was a popular choice. Today entrepreneurship has gained a lot of respect, with people from diverse backgrounds breaking into the big picture. What has changed in the last 25 years is the belief that anybody can do business, provided he/she has the right idea. Till two decades back, school education was followed by a university degree and then a job with which the person stayed for the rest of his productive life. Businesses were meant only for people belonging to business families who would take forward the merchandise

of their forefathers, and diversify it a bit. Today, boosted by the success stories of their peers, more and more people have developed the gut to explore their ideas and take the risk of venturing into a business avenue. According to NASSCOM India is the 3rd largest base for start-ups in the world at present with over 3,000 startups present in India and over 800 setting up annually. By 2020, India is expected to be a home of 11,500 start-ups employing over 250,000 people. Start-ups also push business activity on the levels of mergers and acquisitions, with smart companies attracting formidable international attention. Over 20 M&A’s worth US$ 1 billion have been completed in India in last three years. Driven by a young and diverse entrepreneurial eco-system that is all inclusive of talent, remarkably innovative ventures are making a mark in India. What has changed is the economic and social fabric of the country revolutionising the entrepreneurial ecosystem in India. ■■ Role of New Age Technology In recent time modern versions of entrepreneurship have emerged aided by the transformative power of technology. A bulk of India’s startups have been in the domain of new age technology, be it e-commerce, IT-enabled healthcare services, or on-call services in a variety of areas. The rapid progress in the field science and technology has significantly expanded the scope of innovation in production, helping entrepreneurs explore new grounds and launch new ideas. We have spent years acting as the back offices for many international brand and companies. However, with growth in confidence of Indian youth towards taking the risk of establishing their own companies, powered by the IT revolution of the age, Indians are today standing on their entrepreneurial feet. Take

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that, some of India’s most successful start-ups that went on to become huge businesses have been in the IT domain, be it Flipkart, Just dial, Bookmyshow, Makemytrip or even ■■ Policy Help Liberalisation of the economy sent forth the first generation of entrepreneurs who established such brand names as Infosys, Bharti, Kotak, ICICI, among many others. These ventures opened a whole new scale of job opportunities for India’s educated young. Realising the potential of businesses in creating jobs, successive governments have lent policy support to entrepreneurs as well. New policies towards encouraging micro or small businesses such as making loans easier for them has changed the face of entrepreneurship in India. However, the slowing down of reform in recent years means we still need to cover a lot of distance when it comes to making India absolutely business friendly by offering right tax incentives, participation in government contracts, availability of risk capital etc. ■■ Financial crisis as a reality check The global financial crisis of the last decade which saw many old institutions and markets crumble also saw the rise of new ideas and

newer ways of doing things. It also in a way forced companies to do more with less, with reduced access to capital, innovation became the key. The realisation that too much investment in real estate or equity markets is not a good idea enabled newer ideas to emerge in many countries including India. With Indian middle class becoming a voracious consumer of digital products, India has become the fourth largest base of technology start-ups in the world. The growth of start-ups could be mainly accounted to the factors like large domestic market, increased M&A activity and access to capital through investor funding. Indian start-ups are also growing following their unique solutions and business model. With young entrepreneurs dominating the market, most of the start-ups have gained foothold following a strong consumer-centric approach and with B2C business model. ■■ Inflow of investors With vibrancy in the entrepreneurial ecosystem, start-ups today have access to multiple sources of funding from venture capitalists (VC), private equities (PE), angel investors, banks and financial institutions as well as incubators. With start-ups betting high on the ecosystem, there is a significant maturity observed in terms of funding. Unlike, a few

years ago when financing was debt-oriented, the participation of venture capitalists has grown in India. Today, segments such as travel, matrimonial services, jobs, games, mobile payments, etc., are getting substantial capital infusion. The relaxed norms and introduction of new reforms by the Indian government has further encouraged the investors to park their money in India. Filling the big lacuna in the entrepreneurial ecosystem in India, which earlier discouraged many budding start-ups, the investors have now gained confidence on Indian caliber and are ready to take the risk. While IT-related ventures continue to rule, start-ups in sectors like cleantech and renewable energy, retail, healthcare and education have seen increased funding activity Gone are the days when Indian businesses flourished under the shadow of international brands and names. With more mature ecosystem and ample opportunities, Indians today are not only launching their own brands but also marketing them in the international market under own brand names. With owning patents of many products, Indian entrepreneurship set sail to conquer not just the domestic but international market as well.


India Newsletter • 17

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INDIAN TRADE FAIRS INTERESTED IN VISITING A TRADE SHOW IN INDIA? In case your company is interested in visiting a tradeshow/B2B event in India, be it one listed here or another one that came to your attention, get in contact with us via to get more information about possible assistance/subsidies.

18 • India Newsletter

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India Newsletter • 19

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20 • India Newsletter

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India Newsletter • 21

Indian Embassy, Vienna

2nd India-Central Europe Business Forum


he first edition of ICEBF attracted over 100 official and business delegates from 14 Central European countries. Over 200 Indian industry representatives had detailed business engagements with their CE counterparts. The forum established itself as an institutionalized platform to promote multifaceted engagements with promising Central European economies. Technological excellence, new innovations across sectors coupled with highly skilled workforce in CE countries is optimally matched by a fast transforming and resurgent Indian economy. The second edition of the Forum is a continued endeavour for accelerating economic ties between India & CE countries for mutual gains in the years to come.


Ministry of External Affairs Government of India



India-Central Europe Business Forum 5-6 October 2015

The Lalit Ashok I Kumara Krupa High Grounds, Bangalore-560001 Defining new paradigms of cooperation

Identify, expedite and conceptualize partnerships in new areas

Rediscovering Economic Complementarities


Monday, 5 October 2015

There is a felt need for institutionalizing the proposed engagement(s) by extending a platform to provide:

Inaugural n

n Strategic collaborations between Indian and Central European economies;

Partner n


Country Session

Sectoral n


Networking n


n Hands on understanding of business opportunities existing in both regions n Building new partnerships and strengthening existing ones

The forum will focus on India's multifaceted engagements with Central European economies in a calibrated and structured format. Under the over-arching effort, entrepreneurs of large, small and medium enterprises would delve deep into the ways and means for enhancing collaborations in the field of technology transfer, research & innovation and skill development.

Tuesday, 6 October 2015

Focus sectors

Partner n

IT & ITES; Services; Urban Infrastructure; Clean & Green technologies; Life Sciences; Pharmaceutical; Environmental technologies; R&D; Agri & Food Processing; Auto & Auto Components and Tourism, to mention a few.

State Session

Sectoral n


B2B Meetings n

Highlights of 2nd India-CE Business Forum 2 days business forum

Sectoral sessions

B2B meetings

Partner country session

Networking evening

The Forum invites participation from CE and India of: n Business

n Senior


n Key policy


n Representatives

of the state and regional Governments

n CEOs


n Senior

representatives of investment promotion agencies

n Senior

representatives of Chambers of Commerce and Industry

n Representatives

of Think-Tanks, thought leaders and entrepreneurs from SMEs sector

n Representatives

of sectoral organizations (Govt & private)

Rohit Sharma

Contact: 22 • India Newsletter

Additional Director Email: Tel: +91-11-23487447

Gaurav Vats

Joint Director Email:; Tel: +91-11-23487288

Indian Embassy, Vienna

INVEST INDIA Federation House, Tansen Marg New Delhi—110 001 0091-11-23765085, 23487278


nvest India is the country’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

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, sectorspecific 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.

India Newsletter • 23

Indian Embassy, Vienna

TOURISM Dholavira - Safe Bet by Hugh & Colleen Gantzer. It was an island of green in a sea of white. “Tha’s a bet” said our guide Girish Gupta. We were in western Gujarat and had been driving on a die-straight causeway between crystalline stretches of salt-flats. Once, many centuries ago, this had been a bay of the Arabian Sea and then environmental changes had produced these amazing saline wastes. We passed two boys digging out salt, filling it into pans and emptying it into a truck. Then, as we were about to ask if there was any fresh water in this legendary White Rann, we saw a large brown patch in the shimmering white expanse. It trembled with an uncertain liquidity much like a bowl of aspic in grated ice. Here water had welled up through the thick crust of salt and created a patch of viscous „quick-salt”, the saline version of quicksand. In every way this was a bizarre environment. At the end of our journey we reached what was, reputedly, the highest, and certainly the most famous, bet of all: Dholavira. Here, 4,600 years ago, many millennia before the equestrian IndoIranians had filtered into our land, the oldest civilization in India had been established. No one is quite sure who these people were, or why they built this three-tiered city of stone and brick, or what caused their downfall: they vanished as abruptly as they had arrived. We navigated our way past fascinating theories as we walked slowly through the Archaeological Museum. There we met the grandson of a perceptive postmaster. The old man had suspected that there were things of great significance buried in the huge scrub-covered mound on the outskirts of his village. This, after a while, had brought in the Archaeological Survey of India and wonderful discoveries had begun to emerge. Jewellery, toys, figurines, stone jars, terracotta 24 • India Newsletter

bricks and seals used by exporters to identify their products, precursors of trade-marks. Also a meticulously standardized system of weights and measures many of them similar to those in contemporary West Asian civilizations. Enthused with their discovery, the archaeologists began excavations in right earnest and their amazement increased. The Dholaviran people knew how to conserve water: tapping rain and perennial streams in great reservoirs, laying an underground sewerage system. Their society was stratified into three distinct classes of rulers, overseers and workers with their separate living and working areas. And yet, curiously, there was was no evidence of an organized religion. Class-conscious societies usually have the sanction of religious doctrine. We trudged out of the museum, our minds resonating with ideas, trod across a dusty plain where a thorn tree framed the rising mass of Dholavira; past chittering jerbils popping our of their burrows, up flights of stone steps and ramps, across great old reservoirs and an enormous stadium, to the dominating heights of the fortified Citadel. Here, where a gentle breeze rustled the thorn-scrub and cooled us, we let our minds stretch and our imaginations flit over the many theories that re-created a past that might have been. This had then been a humped betisland. It thrust into the edge of the densely-wooded wetlands which had evolved out of a silted bay. Tangled rainforests had grown and a sinuous estuary had run through them offering a navigable link to the sea. Down this estuary had come ships from the

kingdoms of West Asia seeking timber and other raw materials. Here, on our west coast, they had found a new land rich with resources and, happily, a scattered native population of the same Dravidian lineage as theirs. And so Dholavira had sprung full-fledged with their imported technology similar to the trading factories of the later European civilizations along the coasts of our land. It also established a highly stratified society with the expatriates demanding a superior lifestyle. We interpret their surviving street sign, the world’s first, as excluding peddlers’ barrows from their Citadel. Many of Dholavira’s export-oriented industries were furnace based and their citizens had to be fed. The dense forests were cleared for their timber and for fields and pasture-land. Over the years salinity set in, the land became unproductive. At this time, too, upheavals in the Middle East hit the Dholaviran’s principal trading partners. Then the final blow came when equestrian hordes from the steppes, pastoralists who detested urban life-styles, stormed the walled cities of Dholavirans including their satellite towns. Squatters moved in and built their circular bunga huts in the ruins. All that was left of Dholavira was a scrub-covered mound and the memory that this lime-washed city had once been a great source of water. Girish Gupta told us that, in this area of Gujarat, water sources are so highly regarded that they are referred to as „brothers” because they help women as lovingly as their brothers do. „Dhola” is „white”, „vira” is „brother”.

Indian Embassy, Vienna

India Newsletter • 25

Indian Embassy, Vienna

INDIAN MOVIE EVENING AT THE EMBASSY 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, via email under maoffice.vienna@

Saheb Biwi Aur Gangster ■■ Synopsis: After the death of his first wife, wealthy Raja Aditya Pratap Singh, re-marries another woman, simply known as Chhoti Rani, who subsequently becomes mentally unstable. His father’s former mistress, Badi Rani, controls the wealth, while he himself has a mistress. Unable to procure contracts through Mantri Prabhu Tiwari, he decides to stand for elections, while his rival, Ghenda Singh, recruits an assassin, Babalu, who is also the nephew of Sunder, Chhoti Rani’s chauffeur, to kill Aditya. After Sunder is unable to drive due to an injury, he recommends Babalu, and Aditya hires him. Babalu settles down in his new JOB, attempts to get accepted by everyone, including Chhoti Rani, who he finds attractive. He soon finds out that she, too, has feelings for him, and then starts making plans of not only carrying out his assigned task but also becoming the next Saheb. ■■ Genre: Action/Crime/Drama ■■ Directed by: Tigmanshu Dhulia ■■ Starring: Randeep Hooda, Mahie Gill, Jimmy Shergill ■■ Released: 2011 ■■ Duration: 118 Minutes ■■ Language: Hindi ■■ Subtitles: ENGLISH ■■ Image Quality: STANDARD

Showtime October 30th, 17:30 Indian Embassy Business Centre (1st Floor, Kärntner Ring 2, 1010 Vienna) 26 • India Newsletter

Indian Embassy, Vienna

NOTICE BOARD EMBASSY’S LIBRARY ■■ The EMBASSY’S library is opened DAILY from 10am to 1pm without appointment. ■■ For a complete list of books available in our library, visit our website ■■ For scheduling an appointment outside the opening hours, please contact the information assistant under or 01 505 8666 33

BUSINESS CENTRE ■■ The EMBASSY’S Business Centre is opened DAILY from 10am to 1pm. ■■ For scheduling an appointment outside the opening hours, please contact the commercial wing under the contacts given below. ■■ Marketing Officer: or 01 505 8666 30 ■■ Marketing Assistant: or 01 505 8666 31

STUDENTS WELFARE OFFICER ■■ Mr. Pawan T. Badhe, Second Secretary in this Embassy has been designated as Officer to look after welfare of Indian Students in Austria and Montenegro. ■■ His contact details are: 0043 1 505 866 15 and

MINISTRY OF EXTERNAL AFFAIRS GOES MOBILE ■■ 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

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..

FACEBOOK & TWITTER ■■ Our Facebook and Twitter pages target the India-Austria community and covers subjects such as Business, Culture, Embassy News, India-related events and programmes in Austria, and much more. ■■ We have reached the 9000 followers mark on Facebook! ■■ ‘Like’ our facebook page and be the first to know! India Newsletter • 27

India Newsletter 09 2015  
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