INDIA NEWSLETTER Indian Embassy, Vienna
Published by the Embassy of India, Vienna Year 6 • Issue 69 • September 2016
MAKE IN INDIA ■■OIL AND GAS
India Newsletter • 1
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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
www.digitalindia.gov.in 2 â€˘ India Newsletter
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The Government of India 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
www.makeinindia.com India Newsletter • 3
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Prime Minister Narendra Modi had announced the ‘Startup India, Standup India’ initiative in his Independence Day address last year. Last January 16th, PM Modi unveiled the action plan for startups in the country. He announced a self-certification scheme in respect of nine labour and environment laws and said there will be no inspection during the first three years of launch of the venture. Addressing the first conference of start-up entrepreneurs, Modi announced an action plan to boost such ventures which are seen as key to employment generation and wealth creation. Around 40 top CEOs and startup founders and investors from Silicon Valley attended the event. Here are the top takeaways from the prime minister’s speech.
■■ 1. Compliance regime based on self certification The objective of compliance regime based on self certification is to reduce the regulatory burden on startups. This self-certification will apply to laws like payment of gratuity, contract labour, employees provident fund, water and air pollution acts. ■■ 2. Startup India hub A startup India hub will be created as a single point of contact for the entire startup ecosystem to enable knowledge exchange and access to funding. ■■ 3. Simplifying the startup process A startup will be to able to set up by just filling up a short form through a mobile app and online portal. A mobile app will be launched on April 1 through which startups can be registered in a day. There will also be 4 • India Newsletter
a portal for clearances, approvals and registrations
■■ 4. Patent protection The government is also working on a legal support for fast-tracking patent examination at lower costs. It will promote awareness and adoption of Intellectual Property Rights (IPRs) by startups and help them protect and commercialise IPRs. ■■ 5. Funds of funds with a corpus of Rs 10,000 crore In order to provide funding support to startups, the government will set up a fund with an initial corpus of Rs 2,500 crore and a total corpus of Rs 10,000 crore over four years. The fund would be managed by private professionals drawn from the industry while LIC will be a co-investor in the fund. The credit guarantee fund for start-ups would help flow of venture debt from the banking system to start-ups by standing guarantee against risks. ■■ 6. Credit Guarantee Fund A National Credit Guarantee Trust Company is being envisaged with a budgetary allocation of Rs 500 crore per year for the next four years. ■■ 7. Exemption from Capital Gains Tax Currently, investments by venture capital funds in startups are exempt from this law. Now, the same is being extended to investments made by incubators in startups. ■■ 8. Tax exemption for startups Income tax exemption to startups announced for three years ■■ 9. Tax exemption on investments above Fair Market Value
■■ 10. Startup fests Innovation core programs for students in 5 lakh schools. There will also be an annual incubator grand challenge to create world class incubators ■■ 11. Launch of Atal Innovation Mission Atal Innovation Mission started to give an impetus to innovation and encourage the talent among the people ■■ 12. Setting up of 35 new incubators in institutions PPP model being considered for 35 new incubators, 31 innovation centres at national institutes ■■ 13. Setting up of 7 new research parks Government shall set up seven new research parks - six in IITs, one in IISc with an initial investment of Rs 100 crore each. ■■ 14. Promote entrepreneurship in biotechnology Five new bio clusters, 50 new bio incubators, 150 technology transfer offices and 20 bio connect offices will be established. ■■ 15. Innovation focused programmes for students There will be innovation core programs for students in 5 lakh schools. ■■ 16. Panel of facilitators to provide legal support and assist in filing of patent application ■■ 17. 80 per cent rebate on filing patent applications by startups ■■ 18. Relaxed norms of public procurement for startups ■■ 19. Faster exits for startups
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INDIAN DIASPORA & INDIAN STUDENTS ABROAD MADAD (‘MEA’ in Aid of Diaspora in Distress) - a new Consular Services Management System from the Government of India to the Indian Diaspora The Government of India has launched an online portal: MADAD (‘MEA’ in Aid of Diaspora in Distress), a Consular Grievances Monitoring System. Consular grievances regarding compensation, court
cases, domestic helps, imprisonment abroad, transportation of mortal remains, repatriation, salary dues, tracing the whereabouts can be lodged under this portal. Grievances relating to visa and passport, travel documents, attestation of documents will not be entertained in this portal. To register and to monitor the status of your grievances please visit the MADAD portal under madad.gov.in Please register as MADAD user if
you have any grievance related to consular s e r v i c e s o f f e r e d by Indian Missions/Posts abroad or are an Indian student studying/planning to study abroad. MADAD enables online logging and tracking of grievances, and submission of course/contact details of students.
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President Mr Pranab Mukherjee has approved the constitution amendment bill on the goods and services tax . The Indian construction equipment industry is reviving after a gap of four years and is expected to grow to US$ 5 billion by FY2019-20 from current size of US$ 2.8 billion. The Government of India plans to set up a US$ 400 million fund, sourced from The World Bank, which would be used to protect renewable energy producers from payment delays by power distribution firms. India has signed an open sky air services agreement with Greece, which will allow airlines from India to operate unlimited number of flights to Greece, while Greek carriers will have unlimited traffic rights to six Indian metro cities. India is expected to have seven mega cities by 2030, from the current five, led by growth in urban population: World Cities Report 2016, by UN. Overall India-based R&D Globalization and R&D Services market reached US$ 20 billion in 2015, up by 9.9 per cent over 2014. Value of mobile phones manufactured in India grew
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by 186 per cent year-on-year to Rs 540 billion (US$ 8.08 billion) in FY 2015-16. India’s per capita GDP has grown at a Compound Annual Growth Rate (CAGR) of 12.3 per cent between 2009-10 to 201516, contributed by growth in rural sector. The Fast Moving Consumer Goods (FMCG) sector in rural and semiurban India is expected to cross US$ 20 billion mark by 2018 and reach US$ 100 billion by 2025. The Indian health and wellness foods products market has crossed over Rs 10,000 crore (US$ 1.5 billion) in revenue in 2015. Consumer spending in India is expected to touch US$ 3.6 trillion by 2020, while the retail sector is expected to double to US$ 1.1-1.2 trillion, led by robust economic growth and rising household income. The Indian Railways is among the world’s largest. Spread across 7,146 stations, the 64,600km network enables the running of 19,000 trains on a daily basis. India’s railway network is recognised as one of the largest railway systems in the world under single management. India’s first integrated textiles city, which will largely cater to the export market and build a brand for Indian
textiles abroad, is likely to be set up in the state of Andhra Pradesh. India and Germany have signed an agreement on vocational education and skill development with a budget of US$ 3.37 million, which will help create and improve cooperative workplacebased vocational training in India’s industrial clusters. The Government of India has adopted an inflation target of 4 per cent under its monetary policy framework for the next five years, which is expected to help in maintaining inflation at moderate levels and contribute to macroeconomic stability. India’s top 200 companies by market capitalisation are set to outperform their Chinese counterparts primarily driven by increased spending by the Indian government through its ‘Make in India’ initiative, according to a report by S&P Global Ratings, a US based credit ratings and research company. The Internet of Things (#IoT) market in India is expected to provide a US$ 15 billion market opportunity for Indian businesses by 2020.
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IMPORTANT ANNOUNCEMENT FOR AUSTRIAN CITIZENS e-Tourist Visa (e-TV) for Austrian citizens The Government of India has extended e-Tourist Visa (e-TV) scheme to the citizens of Austria w.e.f. 26th February 2016. Under e-Tourist Visa scheme, citizens of Austria may now apply online (https:// indianvisaonline.gov.in/visa/tvoa. html) four days in advance to obtain the Electronic Travel Authorisation for travelling to India.This facility is in addition to the existing Visa services. This facility is also available to the citizens of Montenegro as well.Queries related to e-TV; for any assistance call 24x7 Visa support centre at +91-11-24300666 or send email to firstname.lastname@example.org.
INDIA-AUSTRIA NEWS ARTICLES India-originated Abacus Skill Development Courses now available in Austria Based on the Abakus method of teaching, the Brainobrain Programme helps children to achieve whole brain development i.e., to be able to use both sides of their brain. Originated from India and spread across the globe rapidly due to its simple way of learning and noticeable effects, the Brainobrain Abacus Skills Development method enables children to enhance their rational capabilities and develop
their true potential. The methods aims at developing some of the foundation skills for learning such as: ■■ Multitasking; ■■ Concentration and focus; ■■ Improved memory skills; ■■ Listening skills and learning ability; ■■ Imagination and creativity in every-day challenges; ■■ Above average numerical skills; ■■ Leadership, decision-making, problem solving, confidence, etc. The Brainobrain Kids Academy, with Corporate Office in Chennai, India
was established in the year 2003 and now operates in 28 countries, and has more than 900 successful franchise centers worldwide. From September 2016, the company Brainobrain Genius Kids GmbH will offer Abacus Skills Development courses in Austria and is now enrolling students ages 4-14. For more information, contact details and enrolment information visit their website: http://www.brainobrain.com (Headquarter in India) http://www.brainobrain.at (Office in Austria)
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PAST EMBASSY EVENTS Celebrations of the 70th Independence Day The celebrations of the 70th Independence Day took place in Vienna on 15th August. Ambassador
Rajiva Misra hoisted the tricolour at the Embassy residence at 1000 hrs. Indians living in Austria, Indian Associations, Students, and Friends of India were present for the
celebrations. A video film on the occasion of the 70th Independence day was also shown before the flag hoisting. Some impressions of the event:
Reception on the occasion of 69th Anniversary of India’s Independence Day
Ambassador Rajiva Misra hosted a reception on the occasion of the 69th anniversary of India’s independence. On the occasion, the Austro-Indian
Friendship society “Raga Verein” put up an Indian Classical Music and Dance performance.. Some impressions of the event:
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NEWS ARTICLES India will have seven mega cities by 2030: UN At present, India is home to five mega ci ties, with over 10 million population, but by 2030 this number will go up to seven. Delhi will continue to be the second most populous city in the world till 2030, adding a staggering 9.6 million people to its population --the most in any mega city . The facts have been revealed in the 2016 World Cities Report issued by the UN’s department of economic and social affairs. The report has not relied on the administrative boundaries of cities but has, instead, preferred to use the concept of “urban agglomeration” which is the “the contiguous urban area, or builtup area”. For example, in the case of Delhi urban agglomeration, the satellite cities of Ghaziabad, Noida, Faridabad and Gurgaon are included. Such inclusion makes sense as people in these contiguous areas are economically and socially integrated with the main city . Around the world, about 500 million people live in 31 such mega cities. That’s about 6.8% of the world’s population or 12% of the world’s urban population.The report calculates that by 2030, the number of mega cities will increase to 41 and their population to about 730 million or 8.7% of the world’s population. Other Indian cities figure in 2016’s mega cities listing in 2016’s mega cities list are Mumbai, Kolkata, Bengaluru and Chennai. By 2030, Hyderabad and Ahmedabad will join them, as their respective populations would cross 10 million. The UN report shows that only a minority of urban dwellers actually live in mega cities. Nearly 21% of the world’s population stays in cities of population between 500,000 to 10 million, while an even bigger share of 26.8% resides in smaller cities and towns with a population of less than
500,000. By 2030, the world’s population will decisively shift to urban living with 60% of the estimated population living in cities, big or small. Currently, about 54% of the world’s population is urban. Most of the urban growth is happening in developing countries in Asia and Africa. By 2030, as many as 33 of the 41 mega cities will be from the third world. Of the 47 cities that grew by over 6% every year be tween 2000 and 2016, six were in Africa, 40 in Asia (including 20 in China) and just one in North America. Interestingly , not all cities are growing. Out of the 1,063 cities with a population over 500,000, as many as 55 have shown a decline since 2000. Most of these cities are located in Europe and some in Japan. Their decline is mostly due to falling fertility levels, although some have shown a dip in population due to natural calamities like New Orleans (due to hurricane Katrina) and Sendai in Japan (tsunami).
India’s growth potential best in the world: Deepak Parekh India’s growth potential is the best among the fastest growing major economies and the country should grab the opportunity to corner as much global capital as possible at a time when one third of the world’s government bonds worth $13 trillion is having a negative yield, said Deepak Parekh, chairman of Housing Development Finance Corporation (HDFC). The largest mortgage finance company of the country, which on completed its second tranche of Masala bond offering of Rs 500 crore by selling it to Province of British Columbia, said the the world is increasingly looking at India as an investment destination. “Against a backdrop of tepid global growth, no other large
economy is showing the growth potential that India has,” Parekh said at an event organised by Indian Merchants Chamber (IMC) on Indian Railways. However, India is still starved of capital, especially to fund projects that require large capital expenditure. At a time of negative global yields, it is an “opportune time for India to reach out and ensure it receives a larger share of long-term foreign direct investment”. Parekh also praised the present government for improving India’s investment climate. “No doubt, improving the investment climate is not an easy task. No other government in India has made such a concerted effort to garner foreign investments than our present government,” he said, adding, “efforts towards improving the ease of doing business have been done with the key objective of raising more resources to fund India’s infrastructure and growth.” India’s low rank in ease of doing index, which is currently at 130 out of 189 nations, can improve with recent measures such as making it easier to start a business, increased number of on-line approvals, transparent bidding norms through e-auctions for all government tendering, introduction of the Bankruptcy Code and several other micro reforms. “... the underlying message is that India means business and the government is working hard to dispel apprehensions with regards to bottlenecks and red tape,” he said. To compensate for the lack of private sector capex, the government has stepped in “aggressively to buildup infrastructure across a range of sectors,” Parekh said. “While many of these projects are still a work-in-progress, there is a flurry of activity across ports, water ways, airports and smart cities. Increased instalment capacities in renewable energy have been put India Newsletter • 9
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in place and of course, a number of initiatives in the railways to improve services are underway.” According to Parekh, Indian Railways should monetise some of its huge landbank. “The time has come for a careful evaluation of the railway’s assets. If resources are scarce, there needs to be greater focus on creating core assets while hiving off other assets,” he said, adding, “the railways should monetise some of its land holdings. This land may well be used for affordable housing and in turn it could bring in large resources for the railways.”
India jumps 19 places in World Bank’s Logistics Performance Index; improves its ranking from 54 (in 2014) to 35 (in 2016) The World Bank has recently released a Logistics Performance Index (LPI) 2016 report titled “Connecting to Complete 2016”. The Logistics Performance Index Report is published by World Bank every two years. India has now been ranked 35 amongst 160 countries compared to rank of 54 in LPI 2014. This is a jump of 19 places. Further, in terms of the six-components of the LPI i.e. Customs, Infrastructure, International Shipments, Logistics Quality and Competence, Tracking and Tracing, and Timeliness, India’s ranking is 38, 36, 39, 32, 33 and 42 respectively. The LPI is an interactive benchmarking tool created to help countries identify the challenges and opportunities they face in their performance on trade logistics and what they can do to improve their performance. The LPI is based on a worldwide survey of stakeholders on the ground providing feedback on the logistics “friendliness” of the countries in which they operate and those with which they trade. They combine indepth knowledge of the countries in which they operate with informed qualitative assessments of other 10 • India Newsletter
countries where they trade and have experience of global logistics environment. Feedback from such stakeholders is supplemented with quantitative data on the performance of key components of the logistics chain in the country of work. Improvement in India’s rank in Logistics Performance Index adequately establishes steady performance in our competitiveness in manufacturing and trade that also acts as one of the growth driver of Make in India Programme.
Govt plans US$ 400 million fund for renewable energy firms The government is shifting up gears for renewable energy promotion with a clutch of policy measures to be rolled out soon. These are meant to protect clean energy producers from payment delays by distribution firms, and the latter from the eroding market for conventional grid-connected power due to wider adoption of roof-top solar power generation, a government official said. New and renewable energy secretary Upendra Tripathy told reporters on the sidelines of the Renewable Energy India Expo in Greater Noida that the government is in the process of instituting a $400 million (over Rs.2,600 crore) fund sourced from World Bank that will be used to protect clean energy producers from payment delays by distribution firms. Tripathy said the government was also exploring the possibility of setting up a scheme that will compensate power distribution companies (discoms) that lose a part of their market for conventional power from the grid due to the increased adoption of rooftop solar power projects by institutions and households. This will address the reluctance of discoms to actively promote rooftop solar power generation projects. “We have to find a mechanism for compensating distribution firms for
loss of market share. We are now studying which entities are losing revenue and the extent of their loss in different cities arising from rooftop power projects,” Tripathi said. The government has set a target of achieving 40 gigawatts (GW) of rooftop solar power capacity by 2022, as part of an overall solar power target of 100 GW. Distribution companies that have signed longterm power purchase deals with power producers will anyway have to pay a fixed component of the power cost even if they do not buy the committed level of power, which acts as a disincentive for promoting rooftop solar power projects. According to Munehiko Tsuchiya, executive director of New Energy and Industrial Technology Development Organization of Japan, who was present on the occasion, the AsiaPacific region is set to witness more investments in renewable energy than the rest of the world. “Within Asia, while China is slowing down, India will emerge as the bastion of growth for renewable energy,” Tsuchiya said. India’s proposed payment guarantee fund will cushion power produces from payment delays of up to 12 months by making available the amounts due to them from distribution firms for the period. Tripathy said the fund will be administered either by the Indian Renewable Energy Development Agency or the Solar Energy Corp. of India. According to Ashok Haldia, managing director and chief executive of PTC India Financial Services, a lender to the energy sector, some power generation companies earlier used to delay interest payments by five to six months to the lender. They have now improved their repayment record by narrowing the delays to two to three months because their customers—distribution companies, or discoms—have improved their payment record. “This is an indirect way of gauging the improvement in the financial
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health of distribution companies,” said Haldia. State governments are implementing a debt takeover scheme for discoms to turn them around. Tripathy said the government will auction solar projects with a combined capacity of about 20,000 megawatts (MW) this fiscal year. It had auctioned 21,000 MW in 201516. In such auctions, companies that offer to sell solar power at the lowest rate get the projects. Auctions have led to a reduction in solar power tariff to below Rs.5 a unit now, from about Rs.15 a unit a few years ago.
India tops global survey for best value flights Online travel agency Kiwi.com has produced a ranking detailing countries of the world which offer the least and most expensive flights. The research, which took into account over 1 million international and domestic journeys, found that India offered the least expensive flight prices per 100km of travel, while the United Arab Emirates (UAE) clocked in with the most expensive tickets. India is ranked number 1, making it the best value location for international and domestic flights worldwide. India offered the least expensive domestic flights on both low-cost and legacy airlines, at $2.27 and $2.67, respectively, per 100km of travel. India is calculated to have an average flight cost of $3.25 per 100km of travel, factoring in both domestic and international journeys. China offered the least expensive international flights on both lowcost and legacy airlines, at $1.22 and $2.84, respectively, per 100km of travel. The UAE offered the most expensive domestic flights on both low-cost and legacy airlines, at $181.38 and $202.36, respectively, per 100km of travel. Canada offered the most expensive
international flights on both lowcost and legacy airlines, at $43.70 and $94.66, respectively, per 100km of travel. To calculate the rankings, Kiwi.com analysed over a million flights to find an average price of domestic and international flights on a lowcost and a legacy airline from each of the countries. Domestic flights were calculated by finding an average of flight costs from the country’s capital to up to five major cities within the country (where available), or a major city in a neighbouring country where no domestic flights were available, while international costs were calculated from the capital of each country to up to five international hubs within the same continent. All flights were checked for the same dates of travel (or neighbouring dates where necessary) on- and offseason, taking into account the same destinations and travel scheduling. “The Aviation Price Index is a fascinating guide to the costs of air travel around the globe,” said Kiwi. com’s chief executive officer Oliver Dlouhý. “We always aim to offer travellers the best possible deals, and hope this ranking informs customers on the countries from which they can expect the most cost effective airfare, and assist them in booking the best value journey.”
Reliance Industries now 8th largest energy company globally Reliance Industries entered the Global Top 10 club with a ranking of 8 in the 2016 Platts Top 250 Global Energy Company Rankings. As many as 15 Indian energy companies made the ranks against 14 last year and Adani Power emerged the fastest growing energy company in Asia-Pacific region. Among big movers are Indian Oil Corp which jumped to 14th from 66th and HPCL to 48th from 133rd “It was India and Asia-Pacific companies that maintained and built on momentum, while other regions, such as North America,
showed the distress of the oil price collapse,” said Robert Perkins, S&P Global Platts senior writer of oil news for Europe, Middle East and Africa (EMEA) and co-author of the analysis “S&P Global Platts Top 250: Price Shakeout Sparks Industry Upheaval.” The refining sector strengthened its standings in the 2016 roster, buoyed by improved margins. This propelled India’s Reliance Industries to make it global Top 10 debut. Among the world’s biggest movers - those rising by more than 50 positions from a year ago - Indian companies, here again got a share of the limelight. Refiners Indian Oil Corporation and Hindustan Petroleum Corp Ltd moved to 14th from 66th and to 48thfrom 133rd respectively, lifted by access to cheaper crude. The Platts Top 250 rankings reflect the financial performance of publicly traded energy companies with assets greater than U.S.$5 billion, and are based on a combination of asset value, revenue, profit and return on invested capital (ROIC) for the latest fiscal year (2015). The biggest winners in the 2016 rankings, were independent power producers (IPPs) and the power and natural gas utility sector. Adani Power Ltd and IPP ranked at 250th not only made its debut but with a 3-year compound growth rate of 54.9% but was also the fastest growing energy company in AsiaPacific and the second fastest in the world. The outright number IPPs in the roster jumped nearly 50% to the highest level since the Rankings began in 2002. India was also the only prominent country for coal demand. Consumption rose nearly 5%, regaining its hare as the dominant fuel in the energy mix at 56%. Strong performance of the coal industry enabled the largest pure coal mining company in the world, Coal India, to hold its place at 38th in the Top 250 ranks. Not only were Asia-Pacific companies’ headliners, snagging 19 of those top spots among fastest India Newsletter • 11
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growing companies, dominated by power companies, but they were winners on several other fronts this year. The region contributed 13 more players in the overall global ranks this year than last, 17% more than in 2015 and taking the region to its highest representation since the Rankings began. South Korea’s Korea Electric Power Corp (KEPCO) was the surprise in the global Top 250 leader board. At 2nd place, not only was it in the Top 10, but the Top 5 and the only electric utility in the cherished upper ranks. A rise from 41st place in 2015, KEPCO now stands just behind Exxon, which held at #1 for the 12th consecutive year. Exploration and production (E&P) companies took a hit in the rankings, taking only 16 positions, down from 42 a year ago. North American producers, which dominated in the shale and oil sands boom years, took the brunt of the damage. Some 24 U.S. and Canadian firms have dropped out of the rankings, the biggest sectoral correction since the rankings began. But it was U.S.based E&P Antero Resources Corp. that topped the fastest growers with a 3-year compound growth rate of 81.1%. Wins for the gas, nuclear and renewable sector largely came at the detriment of the global coal industry, which continued to witness significant structural and fundamental shifts over 2015 as suppliers, particularly in China and the U.S., worked to redress the overhang in supply.
Cisco targets India with strategic digital solutions across sectors Global networking heavyweight Cisco Ltd. is making several strategic moves in India to strengthen its market in India. The company has announced a tieup with Bengaluru-based Narayana Health (NH), a multi-speciality tertiary level healthcare service provider to deliver affordable specialty healthcare services 12 • India Newsletter
remotely using Cisco’s Virtual Expertise Digital Solution. According to Dinesh Malkani, president, Cisco India and Saarc, the association will enable NH to offer diagnostic services for various specialties at a cost that’s affordable with a high-quality experience in the areas of neurology, nephrology, oncology and cardiology to patients remotely in various parts of the country. Cisco will also implement modifications to hospital infrastructure enabling healthcare delivery at district centers and multi-specialty hospitals of the NH group across the country, creating a truly mobile and digital hospital experience. Together both companies will set up advanced telemedicine solutions across three centres in India— Sirsi and Bellary in Karnataka and Rajarhat in Bengal via the main centre in Bangalore. “Our association with Cisco will help Narayana Health to move closer to realize its vision of becoming a digital hospital and deliver advanced specialized healthcare to both rural as well as urban populations,” said Dr. Devi Shetty, chairman, Narayana Health. With this initiative, Cisco is trying to join the rush for remote specialized healthcare, as its digital solutions help connect patients virtually with NH specialists, regardless of the distance. Cisco’s solution brings together voice, video and data to wherever patients are located and also enables a detailed clinical examination and review of all investigations in a seamless manner with the option of recording the entire interaction. For Cisco, digitization is not only confined to the area of healthcare. The company is also promoting digital learning using virtual digital rooms through Cisco’s Connected Learning solutions. Earlier this week, the company announced a partnership with the government of Rajasthan to enable digital learning for teachers in the state. This initiative aims to enhance the
quality of education through digital learning for academia to connect, collaborate, create, and share content across the 12 centres of state institute for education management and training (SIEMAT) in Rajasthan. Under this association, Cisco and SIEMAT have committed to 50,000 man-hours of training annually through its virtual digital classrooms. Additionally, Cisco has also been investing in setting up network academies to train students on networking skills, security skills, internet of things (IoT) skills—all the skills required to participate in a digital economy. “If you want digital India to become a reality, then skills is going to be very important. So far we have trained 80,000-100,000 students in India and 95% of these have got very good jobs. But our goal is to train 250,000 students over the next 3-5 years,” said Malkani. Malkani and team are working not only with governments to digitize India but are offering digital solutions to other industries like banking, telecom and manufacturing. For instance, they have been aggressively working with the Bandhan bank and IDFC providing digital end-to-end solutions and they have partnered with Mahindra & Mahindra to create a worldclass, IoT-based, fully digital factory for them. “Digitization is across the board, it’s not only about government, that is one part of it. It’s really a combination of what is happening in banking, education, e-commerce, manufacturing, telcos. So a lot of our focus is also on software solutions and that is the work we have been doing. So digitization is touching everybody and it will touch more and more.” As the drive towards digitization remains a strong pillar for Cisco, the company also plans to ramp up investment in IoT which Malkani believes is a game-changer and in the area of cybersecurity. The company plans to launch a state-ofthe-art centre of excellence in Delhi where they will train enterprises and government on how to handle
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cyber security issues. The centre will be launched later this year.
Value of mobiles made in India increases 186%
Railways to link North East with Nepal, Bhutan and Bangladesh
According to the data by Indian Cellular Association (ICA), the overall value of handsets manufactured in India increased by 186% in FY16 to Rs 540 billion. ICA has projected mobile phone production to grow by 74% and reach Rs 940 billion in FY17. Even in volume terms, India witnessed significant improvement. India produced 60 million mobile phones in FY 15 which grew by 83% 110 millions in FY16 which is 50% of the total 220 million mobile phones estimated to have been sold in India last fiscal. In last one year 38 electronics manufacturing plants were set up in India and 25 mobile phone manufacturers have already started production in India. It is estimated that India’s mobile manufacturing units would produce around 220 million phones by FY 17. But still a long way to go for India, as most of these manufacturing units only act as assembly lines since a major part of the components that go into making a handset are not available in India.
Railways are working to link Northeastern India with Nepal, Bhutan and Bangladesh. According to Railways, to provide rail connectivity to the neighbouring countries like Nepal, Bhutan and Bangladesh, the Construction Organization of Railways has undertaken many survey works for new railway lines to these countries. “Northeast Frontier Railway (NFR) has already connected Bangladesh at Singhabad. Works to connect Radhikapur and Haldibari are in progress. The proposed AgartalaAkhaura International rail link project will boost socio-economic development of not only Tripura state but entire Northeast Region and the nation as a whole”, the NFR in a statement added. The link will be a part of the Trans Asian Railway network and will provide a much shorter connectivity from Tripura to Kolkata. On completion, this India -Bangladesh rail line project will be Gateway to entire North Eastern region. It will connect Northeast India with Ashuganj and Chittagong Port of Bangladesh. It will also connect Agartala to Kolkata via Dhaka shortly. The existing distance between Agartala and Kolkata on Indian Railway network is 1613 Km which will get reduced by around 900 KM. NFR added that at present there is no rail line in Bhutan. Feasibility studies have been carried out for extending Rail head (India) to Bhutan at five locations. In Nepal, one Broad gauge connectivity work between Jogbani (India) and Biratnagar(Nepal) (18.60 Km) is in progress.
India becomes Honda’s biggest 2-wheeler market Riding on a sustained doubledigit growth in scooter volumes, Japanese automobile major Honda has seen India emerge as its biggest two-wheeler market this financial year. Honda Motorcycle and Scooter India (HMSI) recently overtook the company’s volumes from the Indonesian market. Into the sixth year of the split with its Indian partner Hero, HMSI sold 1.23 million units during the April-June quarter, 16 per cent more than the 1.06 million units sold in Indonesia. The corresponding volumes for India and Indonesia last year was 1.01 million and 1.03 million units, respectively. With this increased volume, India now brings 29 per cent of Honda’s global two
wheeler sales, compared to 25 per cent a year ago. Many of the top two-wheeler markets in Southeast Asia, such as Vietnam, Indonesia and Thailand have already matured. Honda is a market leader in many of these. In Indonesia, for instance, it commands 80 per cent share; the share in Vietnam is 70 per cent. “Considering the low two-wheeler penetration in India, we believe it will continue to lead the global twowheeler market, as new demand will continue to come from rural and semi-urban areas in the future. The road infrastructure is increasing rapidly while public transport is not able to meet daily commuting needs of millions,” said Y S Guleria, senior vice-president, sales and marketing, HMSI. Honda is the second-biggest twowheeler player in the Indian market. It is also present in the passenger vehicle market, where it is the sixthlargest player and has a five per cent share. In the two-wheeler market, however, Honda enjoys a 28-per cent market share though Hero MotoCorp is the leader with a 37-per cent share. In the scooter segment, Honda sits on a strong 59-per cent share. It is this segment that is driving the company’s India volumes. Scooters account for two-thirds of HMSI’s India sales, up significantly from 54 per cent a year ago. The scooter market has grown 24 per cent this year so far on a rising base, helped by double-digit growth for last two consecutive years. Motorcycles, as a segment, did not do well for last two years due to weakness in rural markets on sub normal monsoon. That is set to change this year. Improved sentiments in rural markets due to good rainfall and higher wages of the government employees will be positive growth triggers for the industry. Guleria said the Indian market has been showing constant growth in recent years while other big markets such India Newsletter • 13
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as Indonesia and Brazil have been showing downtrend due to their economic slowdown. HMSI saw a capacity addition in June this year with the opening of its dedicated scooter plant in Gujarat that added 1.2 million unit annual production capacity. HSMI aims to end this year with total sales of 5.4 million units, up 26 per cent from last year’s 4.28 million units.
India’s retail market expected to double to US$ 3.6 trillion by 2020 Backed by robust economic growth and rising household incomes, consumer spending in India is expected to touch $3.6 trillion (about Rs.240 trillion) by 2020, increasing India’s share in global consumption to 5.8%—more than twice its current levels. Not just that. By 2020, India’s retail sector is expected to double to $1.1-1.2 trillion from $630 billion in 2015 at a compound annual growth rate (CAGR) of 12%, said a joint report released by lobby group Ficci (Federation of Indian Chambers of Commerce and Industry) and consultancy PricewaterhouseCoopers. Titled Shaping Consumer Trends, the report was released at Massmerize 2016— an annual convention on retail, packaged consumer goods and e-commerce. The report’s projections indicate that the average household income in India will triple to $18,500 in 2020, from $6,400 in 2010—acting as a major driver in retail growth and leading to evolution of new consumer segments. Customers are getting more sophisticated, driving firms to focus on premium products, the report said. “Increasing disposable income levels and a rising number of sophisticated consumers have given rise to consumers seeking ‘premium’ products,” it added. According to IMRB’s Kantar World panel report published in 2013, nearly 50% of the total number of new launches in the personal care 14 • India Newsletter
category has been in the premium segment. The report highlights that the growth in the retail sector will be fuelled by both organized brickand-mortar stores and e-commerce. “India’s overall retail opportunity is substantial and a strong growth in e-commerce is expected due to a demographic dividend (young population, rising standards of living and upwardly mobile middle-class) and rising internet penetration,” stated the report, adding about 32.18 crore people, accounting for about 25.4% of total population, are using Internet in India, according to digital information and research company eMarketer. The report also noted a shift in the focus of e-commerce players, towards their own private labels. The report said that private labels account for 10-30% of the total revenues of the e-commerce companies. In 2015, online grocery platform BigBasket (Supermarket Grocery Supplies Pvt Ltd), which sells fruit, vegetables, meat, pulses and spices under its own brand, generated 35% of its revenues from private labels. According to the report, the e-commerce market is expected to reach $125 billion in terms of gross merchandise value (GMV) by 2020, growing at the rate of 31%. GMV is the total value of goods sold over a period of time, without accounting for discounts or sales returns. The report said that the packaged consumer goods sector will cross the $100-billion mark by 2020, growing at a rate of 18%. “Rapid macroeconomic, demographic and lifestyle shifts in the country clearly point towards exponential growth in the packaged goods industry. These shifts, bolstered by policy and regulatory changes have a strong potential of taking India towards its goal of becoming largest consumer market over the next decade,” it said. According to the report, the maximum consumer spending is
likely to occur in food, household, transport and communication segments. Sanjiv Puri, chief operating officer at consumer goods company ITC Ltd and chairman of Ficci FMCG committee, agreed. “With a lot of investment initiatives and GST (goods and services tax) coming in, there is a great opportunity in food processing,” he said. FMCG is short for fast moving consumer goods. Led by opportunities in the sector, ITC has invested nearly Rs.25,000 crore in about 65 projects—“a lot of which is in food processing,” Puri added. The report said that consumer goods firms will now be focusing on online and social media channels to get into consumer’s mindshare due to the growing mobile internet revolution in India. It said that about 650 million people are expected to be online by 2020, out of which 250 million will be shopping online —spending more than $50 billion. Interestingly, at least $5 billion of this expenditure is expected to be on packaged consumer goods. “India will be domestic consumption-driven growth story, and, on our part, at Walmart India, we are growing our cash and carry business in the country and plan to take our store count to 70 stores with a full omni-channel strategy. This is an exciting market for us,” said Krish Iyer, president and chief executive at Walmart India. The report also offers insights on the recent changes in policies (100% FDI in trading of food products produced and/or manufactured in India, clarity on FDI in e-commerce, GST among others) that have led to an increase in investment opportunities. Vasanth Kumar, executive director at apparel retail brand Max Retail, said there are opportunities in both FMCG and retail sectors. “With the GST coming in, productivity will go up, along with manufacturing and retailing. With that we can
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participate in the consumption and growth story in India,” Kumar said.
Isro plans to launch record 68 satellites in one mission by early 2017 Mr Rakesh Sasibhushan, Chairman and Managing Director of Antrix Corporation, has stated that the Indian Space Research Organisation (ISRO) is planning to send into orbit a record 68 small satellites from countries across the world, in one mission, by early 2017. The launch is expected to take place in the next six to seven months. In June 2016, ISRO had launched 20 satellites in a single mission, including its earth observation Cartosat-2 series, from the spaceport in Sriharkota, Andhra Pradesh. The space agency had earlier sent 10 satellites into orbit in a single mission in 2008. Mr Sasibhushan further added that these launches are subsidised by the Government of India.
The CIMA study covered more than 3,000 select experts from leading financial companies across the world also pursuing a CIMA professional qualification. “A majority of finance professionals who are also our students believe that artificial intelligence, robots and other technologies will alter, but not destroy, the jobs of accountants and other professionals,” said Bhaskar Ranjan Das, Head of South Asia, Chartered Institute of Management Accountants (CIMA). CIMA study also states that in India more than 50% of financial experts feel that better automation and data analysis enable companies to become more efficient and bring a better work-life balance. However, as per global ranking, China becomes the top country with (66%) of a positive feedback.
Invest Rs 10 cr, be a permanent resident of India
India ranks third in implementing robotic automation
The Cabinet approved a scheme allowing foreigners to settle in the country if they bring significant investment.
India ranks third in the world in implementing robotic automation in their core business processes. A majority of financial leaders are of the opinion that artificial intelligence helps enhance efficiency and accuracy of the business, according to Chartered Institute of Management Accountants, (CIMA). CIMA is an UK based organisation that conducted the global survey across European, African and Asian countries.
High net worth foreigners will get Permanent Residency Status (PRS) if they invest a minimum of Rs 10 crore within 18 months or Rs 25 crore within 36 months.
At a global level, Zimbabwe tops the chart with (75%) professionals supporting automation, followed by China with a 67% of acceptance compared to 64% professionals support automation in India.
Granted first for 10 years, with multiple entry, the PRS can be extended for another 10 years. “The scheme will be applicable only to foreign investors fulfiling the prescribed eligibility conditions, his/her spouse and dependents,” went a Cabinet statement. Also, PRS holders will be allowed to purchase one residential property for dwelling purposes. There is a rider — the recipient investor must hire a minimum of 20 people. Also, it will not apply to
nationals of Pakistan or China. The scheme is aimed to draw foreign investment and facilitate the Make in India Programme. The government credits the latter, launched in September 2014, as well as friendlier investor policies to have boosted foreign direct investment by 25 per cent and 23 per cent, respectively, in the past two financial years. Total foreign direct investment inflow was $36 billion in 2013-14, rose to $44.2 billion in 2014-15 and $55.4 bn in 2015-16, the highest so far in a year. Finance Minister Arun Jaitley had revealed the proposal for longterm residency in February, without providing details. Currently investors may get business visas for up to five years. According to existing rules, all foreigners (including those of Indian origin) visiting on a long term (more than 180 days) student visa, medical visa, research visa or employment visa are required to book with the Foreigners Registration Office concerned, having jurisdiction over the place the person intends to stay, within 14 days of arrival. Pakistani nationals have to register within 24 hours of arrival. Various places — Singapore, Hong Kong, America, Canada, others — offer residency status for foreign entrepreneurs in return for investment. More visa rule changes are possible. The commerce ministry has proposed an easier regime, to promote trade in services. “We have been recommending (an easy visa regime) to improve tourism and certain service sectors, including medical tourism. We from the the ministry wanted e-visas and visa on arrival, Commerce Minister Nirmala Sitharaman had said. India Newsletter • 15
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MAKE IN INDIA Summary ■■ 635 MMT of proven oil reserves (2P). ■■ 54 Trillion Cubic Feet of proven natural gas reserves. ■■ 96 Trillion Cubic Feet of estimated shale gas reserves. ■■ Third largest consumer of crude oil and petroleum products in the world. ■■ Second largest refiner in Asia after China.
OIL AND GAS
Reasons to Invest ■■ Growing economy and population growth are the main drivers for oil & gas demand, increasing every year. ■■ Import content in oil & gas sector is in the range of 15% for refinery to 67% for upstream. ■■ The oil and gas sector is highly liberalized to attract private investment and to increase domestic production. ■■ A number of policy reforms have been taken by the Government to remove obstacles to investment and incentivize oil and gas sector on the lines of ease of doing business, minimum government maximum governance and promote MakeinIndia initiative. ■■ Completion of national gas grid by construction of another 15,000 km of gas pipeline network, which is currently under various stages of implementation. Several industries are increasing consumption of natural gas in operations. ■■ Several domestic companies such as the Oil and Natural Gas Corporation, Reliance Industries Limited and Gujarat State Petroleum have found natural gas in deep waters. ■■ Several private companies have emerged as important players in the past decade. Cairn India, produces more than 23% of India’s crude oil production through its operation of major stakes in the Rajasthan 16 • India Newsletter
and Gujarat regions and KrishnaGodavari basin. Reliance Industries Limited and Essar Oil have become major refiners ■■ It is a transparent and level playing field for Indian private/ foreign investors and national oil companies — both enjoy the same fiscal and contract terms. ■■ 60% of the prognosticated reserves of 28,000 MMT are yet to be harnessed ■■ Supportive Government Regime — ease of doing business moved to sector specific policy(HELP). ■■ Gas Initial is in place for CBM established at 9.8 TCF with the possibility of an upside ■■ 96 TCF of technically recoverable shale gas resources ■■ Despite being a net importer of crude oil, India has become a net exporter of petroleum products by investing in refineries designed for export, particularly in Gujarat. ■■ RLNG regasification facility is likely increase to 47.5 MMTPA by 2022 from a current level of 22 MMTPA. ■■ Investment opportunities are in upstream, gas pipeline, CGD network, LNG Terminal, Petrochemical and Refinery.
■■ Plans afloat to set up India’s largest grass-root refinery of 60 MMTPA capacity at west coast to be set-up by oil & gas CPSEs. ■■ Thrust on developing gas based economy by connecting major cities with green highways, which will have vehicles running on CNG and LNG with adequate refuelling stations ■■ Two world class gas hydrate reservoirs have been discovered in ultra-deep waters of KG basin under national gas hydrate progamme-2, which has opened up new avenues for alternative resources. ■■ Ample opportunities for development of underground coal gasification, coal to liquids, etc. ■■ To encourage private players and global oil companies, Income generated from storage and selling of Crude Oil in Strategic crude oil reserves has been exempted from Income Tax.
Statistics ■■ The oil and gas industry ranks amongst India’s eight core industries. ■■ Oil and Gas sector one of 25 key areas under “Make in India” initiative. ■■ India was the third largest consumer of oil in the world in 2015, after the United States & China.
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■■ Oil imports constitute about 81% of India’s total domestic oil consumption in 2015-16. ■■ Oil and gas contributes about 34.4% to primary energy consumption. ■■ During 2015, natural gas constituted about 6.5% of the energy mix ■■ India had 54 Trillion cubic feet of proven natural gas reserves at the beginning of 2015. Approximately 34% of total reserves are located onshore, while 66% are offshore. ■■ India has 230.066 MMTPA of refining capacity with a surplus refining capacity of about 15%, making it the second largest refiner in Asia after China. Private & joint venture companies own about 41% of total capacity. ■■ India is the fourth-largest LNG importer in 2015 and accounted for 6.4% of global imports. ■■ India held nearly 635 MMT of proven oil reserves at the beginning of 2015, mostly in the western part of the country. About 49% of reserves are onshore resources, while 51% are offshore.
Growth Drivers ■■ As part of International Energy Outlook 2016, EIA projects India and China will account for about half of global energy demand growth through 2040, with India’s energy demand growing at 3.2% per year. As per BP Energy Outlook 2016, India’s energy consumption is projected to grow at 4.2% per annum upto 2035, faster than all major economies in the world. ■■ Oil and gas sector plays a predominant role as over one third of the energy required is met by the hydrocarbons. ■■ The country’s natural gas pipeline network is spread over 14760.6 km in 2016. Another 15000 km is envisaged to complete national gas grid and move towards a gas based economy, which is under various stages of implementation ■■ In order to promote use of natural gas, priority for allocation
of domestic gas was accorded to PNG/CNG segments for meeting 100% demand and faster roll out of PNG connections and CNG stations. There are plans to connect 326 cities with city gas distribution network (CGD) by 2022. ■■ In a bid to enhance oil security and protect supply disruptions, crude oil strategic storage of 5.33 MMT capacity was build at three locations viz. Visakhapatnam (1.33 MMT), Mangalore (1.5 MMT) and Padur (2.5 MMT). The project at Visakhapatnam is already commissioned and Mangalore and Padur are under advanced stage of commissioning. A detailed project report has been prepared for additional strategic storage of crude oil for 12.5 MMT at 4 locations viz. Chandikol (3.75MMT) in Odisha, Padur (2.5 MMT) in Karnataka, Rajkot (2.5 MMT) in Gujarat & Bikaner (3.75MMT) in Rajasthan, which would be completed in Phase II. ■■ New Domestic Gas Pricing guidelines, reforms in existing contracts, calibrated marketing freedom for difficult areas, clarity on testing requirements and addressing other concerns in the existing areas under exploration and production have resulted into unlocking of reserves valued at Rs. 3.5 Lakh crore. ■■ India’s Refining capacity is estimated to reach 256.55 MMTPA by 2019-20 after completion of projects undertaken by a number of refineries which are currently under various stages of implementation. ■■ E&P sector has undergone complete re-engineering to reinvigorate exploration and production of India’s hydrocarbon reserves. A number of path breaking policies have been formulated to revolutionalize E&P sector including Hydrocarbon Exploration and Licensing Policy, Discovered Small Field Policy and Gas Pricing Reforms. ■■ The price of diesel has been made market determined effective October 19, 2014, resulting into better service delivery due to
increased competition in the auto fuel sector. The saving in subsidy is available for funding anti-poverty and social sector schemes. ■■ The Government is focused on providing access to affordable, reliable, sustainable and modern energy to every citizen. In a bid to promote clean cooking fuel, the Government has planned to increase LPG coverage by providing 10 crore new LPG connections in next 3 years till 2019, of which 5 crore are for BPL households. ■■ Under Pradhan Mantri Ujjwala Scheme (PMUY), 5 crore deposit free LPG connections are planned to be provided in next 3 years till 2019 to empower women of BPL families. ■■ LPG consumers are being encouraged to voluntarily give up their LPG subsidy under ‘GiveltUp’ campaign. Against each `GiveltUp’ consumer, one security deposit free connection is given to a BPL family under ‘GiveBack’ scheme. More than 1.03 crore LPG consumers have given-up LPG subsidy as of June 30, 2016. ■■ PAHAL launched for direct transfer of LPG subsidy to the bank accounts of LPG consumers which has resulted in right targeting of subsidy by elimination of 3.34 crore duplicate/inactive/ghost connections and saving of more than Rs. 21,000 crore of subsidy. ■■ Direct benefit transfer of Kerosene (DBTK) Scheme planned for better targeting of kerosene subsidy. The scheme would be launched initially in 40 selected cities across 9 States during 2016-17. ■■ The government has planned to roll out BS-IV auto-fuels throughout the country progressively by April 1, 2017 and leapfrog into BS-VI auto-fuels all over the country w.e.f. April 1, 2020, which would facilitate major investment in refinery upgradation, auto industry, related manufacturing and services sector. ■■ There is a renewed focus on bio-fuels by promoting ethanol blending programme and bio-diesel programme. India Newsletter • 17
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FDI Policy ■■ Exploration activities of oil and natural gas fields, infrastructure related to marketing of petroleum products and natural gas, marketing of natural gas and petroleum products, petroleum products’ pipelines, natural gas pipelines, LNG regasification infrastructure, market study, formulation and petroleum refining in private sector, subject to the existing sectoral policy and regulatory framework in the oil marketing sector and the policy of the government or private participation in exploration of oil and the discovered fields of natural oil companies - 100% FDI, automatic route. ■■ Petroleum refining by PSU, without disinvestment of dilution of domestic equity in existing PSUs - 49% automatic route.
Sector Policy ■■ Government has approved HELP and same has been notified on March 30, 2016. This policy provides a uniform licensing system to explore and produce all hydrocarbons such as oil, gas, coal bed methane, shale oil/gas, etc. under a single licensing framework, option to select the exploration blocks without waiting for formal bid round and also provides many incentives such as reduced royalty rates for offshore blocks, marketing & pricing freedom and easy to administer revenue sharing model. ■■ Discovered Small Fields Policy announced in March, 2016 for monetization of 67 discoveries thorough international competitive bidding. ■■ Under the New Domestic Gas Pricing Policy, a transparent new gas pricing formula linked to global market made effective w.e.f. November 1, 2014. ■■ Marketing and pricing freedom for gas produced from geologically difficult, high risk / high cost areas with a provision of ceiling price based on landed cost of alternate fuels announced on March 10, 2016. ■■ Policy Framework for relaxation, 18 • India Newsletter
extensions and clarifications at the development and production stage under PSC regime for early monetization of hydrocarbon discoveries was approved on November 10, 2014. ■■ Policy for grant of extension to the Production Sharing Contracts of 28 Small and medium sized discovered blocks was approved on March 10, 2016. ■■ Policy on Testing Requirements for discoveries in NELP blocks was approved on April 29, 2015. ■■ Hydrocarbon vision 2030 for North East India has been released in February, 2016 ■■ Pooling of gas in Fertilizer (Urea) sector was approved on March 31, 2015 for supply of gas at uniform delivered price to all fertilizer plants on the gas grid for production of urea through a pooling mechanism of domestic gas with R-LNG ■■ The Petroleum and Natural Gas Regulatory Board Act, 2006 regulates refining, processing, storage, transportation, distribution, marketing and the sale of petroleum, petroleum products and natural gas. ■■ The National Biofuel Policy, 2009 promotes bio-fuel usage, the Government of India has provided a 12.36% concession on excise duty on bio-ethanol and exempted biodiesel from excise duty. ■■ Government is implementing Ethanol Blending Petrol programme under which oIL marketing companies are mandated to sell Ethanol blended petrol with upto 10 % Ethanol. ■■ Mechanism for procurement of ethanol by OMCs to carry out Ethanol Blended Petrol programme was approved on December 10, 2014. In order to give a stimulus to the above programme, the Government has enhanced the Ethanol Procurement Price and opened alternate route like cellulosic and ligno cellulosic materials, including Petrochemical route. ■■ Direct sale of bio-diesel by private manufacturers/suppliers to bulk consumers like Railways and
State Transport Corporations was allowed on August 10th, 2015. ■■ The milestones set in Auto Fuel Policy 2003 have already been achieved. Ministry of Petroleum and Natural Gas has issued a communication to all the concerned stake holders including Oil Marketing Companies for implementation and expansion of Supply of BS-IV auto fuels in phases covering the entire country by April 1, 2017 as per the road map given in Auto Fuel Vision & Policy -2025 ■■ The Government has decided to leapfrog from BS-VI to BS — VI fuels w.e.f. April 1, 2020. ■■ The Integrated Energy Policy, 2006 outlines goals for dealing with challenges faced by India’s energy sector. ■■ The Coal Bed Methane Policy, 1997 encourages exploration and production of Coal Bed Methane as a new eco-friendly source of energy. ■■ The Policy on Shale Gas & Oil, 2013 allows companies to apply for shale gas and oil rights in their petroleum exploration licenses and petroleum mining leases. ■■ The Petroleum Rules, 1976 contains provisions for regulations governing pollution, safety and other operating standards. ■■ The Oilfields (Regulation and Development) Act, 1948 provides for regulation and development of hydrocarbon resources. ■■ Petroleum and Natural Gas Rules, 1959 governs the issuance of petroleum exploration licenses and lease and other details relating to exploration and production.
Projects ■■ Monetization of 67 discovered small fields thorough international competitive bidding. ■■ Additional strategic storage of crude oil for 12.5 MMT at 4 locations viz. Chandikol (3.75MMT) in Odisha, Padur (2.5 MMT) in Karnataka, Rajkot (2.5 MMT) in Gujarat & Bikaner (3.75MMT) in Rajasthan. ■■ Plan to connect 326 cities with city gas distribution network (CGD)
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by 2022. In order to promote use of natural gas, priority for allocation of domestic gas was accorded to PNG/ CNG segments for meeting 100% demand and faster roll out of PNG connections and CNG stations. ■■ Construction of another 15,000 km of gas pipeline network for completion of national gas grid, which is currently under various stages of implementation.. ■■ Providing 10 crore new LPG connections in next 3 years till 2019, of which 5 crore are for BPL households The Government is focused on providing access to affordable, reliable, sustainable and modern energy to every citizen. ■■ Increase in India’s refining capacity to reach 256.55 MMTPA by 2019-20 after completion of projects under taken by a number of refineries which are currently under various stages of implementation
Financial Support ■■ FISCAL INCENTIVES: The rate of cess on crude oil production has been revised to 20% advalorem basis from Rs.4500 per metric tonne Various exemptions from customs duty on goods imported for petroleum exploration licenses and movement of goods from one block to another under various types of licenses/mining leases etc., have been merged into a single exemption, with unified list of goods and conditions To facilitate smooth trade of natural gas across India thereby helping to build a gas-based economy, the central sales tax rules regarding inter-state transport of natural gas through common carrier pipeline have been amended. Keeping in view the bulky nature of oil & gas investments, an enhanced window has been made available to avail the benefit of additional depreciation of 15% on installation of capital equipment acquired in the previous year to be made before 31.03.17. To increase investment in exploration sector, No Basic Customs Duty &
CVD on imports of goods required for exploration & production of hydrocarbon activities is also extended to operations undertaken to Exploration Licenses & Mining Leases issued or renewed before 1st April 1999. ■■ STATE INCENTIVES: Apart from the above, each state in India offers additional incentives for industrial projects. Incentives are provided in areas such as subsidised land cost, the relaxation of stamp duty on sale/lease of land, power tariff incentives, concessional rates of interest on loans, investment subsidies and/or tax incentives, backward areas subsidies, special incentive packages for mega projects. ■■ AREA-BASED INCENTIVES: Hydrocarbon Vision 2030 for North East India has been released. It envisages an investment of Rs 1.3 Lakh crore in upstream, downstream and midstream sector in Hydrocarbon Sector in North East India till 2030. To incentivize E & P in the North East, 40 % subsidy on gas operation has been extended to private companies operating in the region.
Investment Opportunities ■■ SHALE: India has technically recoverable shale gas resources of nearly 96 Trillion cubic feet. ■■ UNDERGROUND COAL GASIFICATION: Coal gasification has been identified as one of the end uses under the government’s captive mining policy. ■■ OPPORTUNITIES FOR PIPELINE TRANSPORTATIONS: Compared to advanced economies like the US, where more than 60% of petroleum product movement happens by pipeline, in India, currently, only 35% of product movement happens over pipelines. The city gas and distribution sector offers opportunities for both incumbents and new companies. The Petroleum and Natural Gas Regulatory Board allows the
following incentives to authorised entities: the infrastructure exclusivity is available to the authorised entity for a period of 25 years. Exclusivity for the activity of marketing of natural gas is allowed to the authorised entity for a period of five years. For incumbents, the marketing exclusivity extends to a period of three years. Government has ensured CGD companies for availability of domestic gas for CNG (Transport) and PNG (Domestic) consumption. ■■ THE REFINING SECTOR: India is already a refining hub with 23 refineries and expansions planned for tapping foreign investment in export-oriented infrastructure, including product pipelines and export terminals. ■■ OPPORTUNITIES FOR E&P SERVICES AND EQUIPMENT COMPANIES: 48% of the country’s sedimentary area is yet to be explored. Appraisal of 1.5 million sq. km. of un-appraised areas by capturing 2D seismic survey data for 48243 LKM for onland areas of 22 sedimentary basins, to be acquired by ONGC (40835 LKM) and OIL (7408 LKM). Appraisal of un-appraised areas by encouraging survey agencies to acquire data through Multi Client Geo-Scientific survey, which would facilitate E&P companies to participate in bidding blocks/areas of their choice. Re-assessment of hydrocarbon reserves in all 26 sedimentary basins in India to be carried out by ONGC in 2017-18. ■■ OFFERING OF EXPLORATION BLOCKS Offering of un-monetized discoveries through international competitive bidding under Small Discovered Field Policy for early monetization of reserves worth Rs. 70000 crore. In accordance with Minimum Government — Maximum Governance, policy is packed with all possible reforms like uniform licensing, pricing and marketing freedom, easy to administer revenue India Newsletter • 19
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sharing mechanism. Bids were launched on May 25, 2016 with bid closing date of October 31, 2016. Road shows are being organized at various parts of country and across the globe to attract investors. These fields are likely to be awarded by the end of this year. Marketing and pricing freedom would incentivize gas production from difficult areas, such as deep/ ultra deep water and high pressure/ high temperature thereby facilitating in monetization of 6.75 Trillion Cubic Feet of gas reserves valued at Rs. 1.5 Lakh crore. National Data Repository (NDR) would be operational in 2016 which would pave the way for implementation of Open Acreage Licensing Policy to give contractors flexibility of identifying acreages of interest round the year, without waiting for the bidding round. To ease out rigidities in the functioning of PSC regime, the Government approved policy framework for relaxation, extension and clarifications for early monetization of hydrocarbon
discoveries, which has helped in resolution of around 40 pending issues and move ahead with discoveries valued at Rs. 30,000 crore. Policy on Grant of extension to the production sharing contracts for small and medium sized discovered fields would help in monetization of resources of the order of Rs. 50,000 crore in the extended period. Policy on testing requirement in NELP blocks would resolve existing disputes; facilitate monetization of resources of the order of Rs. 75,000 crore ■■ OPPORTUNITIES FOR FOREIGN INVESTMENTS AND TECHNOLOGY PARTNERSHIPS IN THE UPSTREAM SECTOR: Securing supplies is expected to remain on top of India’s energy agenda for the foreseeable future. While exploration activity has taken place onland and in shallow basins across the country, it is believed by many that deep water and ultra-deep water oil and gas resources hold the key to substantially increasing domestic production. This creates
a plethora of opportunities for strategic investors having relevant technical expertise and financial muscle.
Foreign Investors ■■ British Petroleum (UK) ■■ Cairn Energy (India) ■■ Shell (UK) ■■ BG Group (Scotland) ■■ Niko Resources (Canada) ■■ OILEX Limited (Australia) ■■ Hardy Oil & Gas Plc. (UK)
Agencies ■■ Ministry of Petroleum & Natural Gas ■■ Oil Industry Development Board ■■ Petroleum Conservation Research Association ■■ Directorate General of Hydrocarbons ■■ Petroleum Planning & Analysis Cell ■■ Petroleum & Natural Gas Regulatory Board ■■ Centre For High Technology ■■ Oil Industry Safety Directorate
INDIA PERSPECTIVES MAGAZINE ONLINE
20 • India Newsletter
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India Paves the Way to Goods and Services Tax Rollout On 3 August 2016, the Indian Parliament approved the introduction of the long awaited Goods and Services Tax, GST. It is perhaps the biggest tax reform in the modern history of India. Until today, the country’s indirect tax system is split into a great number of tax regimes, covering Central Sales Tax, state based Value Added Taxes, municipal Octroi taxes, taxes on the manufacture of goods (Excise Duty) and on rendering of services (Service Tax). Plus many more. The GST is bound to replace most of these regimes and to create a uniform country-wide indirect tax system. The rollout of GST will ease the business in India to a great extent. It is expected to boost India’s GDP growth rate by upto 2% according to recent comments and a study published by India’s National Council of Applied Economic Research. ■■ GST Bill being Passed The Indian political system witnessed a historical moment on 3rd August 2016, when the Constitutional (122nd Amendment) Bill 2014 (“Constitutional Amendment Bill”), which is the enabling law for implementation of Goods and Services Tax (“GST”) was unanimous passed by the Upper House of the Indian Parliament. With the passage of the Constitutional Amendment Bill, the stage is now set for rolling out of GST in India with a challenging deadline of 1 April 2017. After discussions with all stakeholders, the Government dropped the provision proposing the contentious 1% additional noncreditable GST on inter-state supply of goods and services. Yet, other proposals on capping of GST rate in the Constitution and modalities of dispute resolution between the Central and State Governments
have been left to the proposed GST Council. ■■ Taxes to be Replaced by GST Central level Taxes Central Excise Duty on manufacturing in India Additional Customs Duty (“CVD”) on imports Special Additional Customs Duty (“SAD”) on imports Various Cesses such as Swachh Bharat Cess, Education Cess etc. on goods and services Additional Excise Duty on specified goods
State level Taxes Entry Tax on specified goods
Octroi/ Local Body Tax
Luxury Tax on hotels
Entertainment Tax on events etc.
Purchase Tax on goods
Customs duty in the form of Basic Customs Duty (“BCD”) on import of goods into India and Research & Development Cess on import of technology into India will continue to apply. Also Stamp Duty on immovable property and legal instruments will stand unchanged. GST will further not replace taxes on electricity, petroleum, alcoholic liquor for human consumption and tobacco products. ■■ Structure of the GST The final structure of GST is not yet set. However, a model Goods and Services Tax Act (“Draft GST law”) was released on 14 June 2016 for public comments. The Draft GST law prescribes that both the Central and State Governments would levy GST in parallel on supply of goods and/ or services where such supply is made within the state. - The tax to be levied by the Central Government would be referred to as Central Goods and Services Tax
(“CGST”). The tax to be levied by Sate Government would be known as State Goods and Services Tax (“SGST”). In case of Inter-State supply, an Integrated Goods and Services Tax (“IGST”) will be levied, which would be collected and administered by the Central Government. Imports into India would be subject to IGST and Basic Customs Duty. The rate of GST is not fully settled, yet. It may range between 16-20% of the value of supply, which is still being debated by the political parties. ■■ Threshold Limit and Registration It is proposed that every person engaged in supply of goods/ services with an aggregate turnover exceeding INR 0.9 million per Financial Year (INR 0.4 million for north-eastern states) shall be required to obtain registration in the respective State. However, GST would apply on the supplies once the turnover crosses INR 1 million (INR 0.5 million for northeastern states). Exemptions exist. The turnover limits would not be applicable for persons undertaking inter-state supply, persons liable to pay tax under reverse charge mechanism, casual dealers (persons undertaking business in states where they do not have any place of business), E-Commerce operators/ aggregators and non-resident taxable person (foreign companies not having a fixed establishment in India), in whose case, registration would be mandatory. ■■ Input Tax Credit The credit of input CGST can be taken against output CGST and IGST. Vice versa, credit of input SGST can be taken against output SGST and IGST. Cross-utilization of credit between CGST and SGST is not allowed. However, credit of input IGST can be taken against all three types of GST, India Newsletter • 21
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i.e. CGST, SGST and IGST. ■■ Transitional Provisions for Existing Companies It is proposed that existing taxpayers would be automatically migrated to the new GST regime without having to make a separate application for registration. The Draft GST law however provides for transition provisions connected with pending litigations and other matters. Further, it is also proposed to allow the existing taxpayers to carry forward the unutilized Input Tax Credits under the CENVAT and VAT schemes to the new GST regime. ■■ Road Ahead The Government is looking at a challenging deadline of 1 April 2017 for implementation of GST. In order to achieve this, the Constitution Amendment Bill needs to be again approved by the Lower House, ratified by a minimum of 51% of the State assemblies and assented by the President. Thereafter, the GST Council would be notified which shall be entrusted to recommend on various key matters such as approving of GST Bills, rate of GST, list of exemptions, dispute resolution mechanism, etc. The CGST Bill and IGST Bill would then have to be passed by the Central Government while the SGST Bill would have to be passed by all the State Governments to make GST a reality. While the Government seems to be ready with the IT infrastructure which is expected to be tested in October 2016 and subsequently launched in February 2017, it has to
finalize the most contentious issues such as the GST rate as well as dual administration/ control. The industry now needs to get “GST ready” with the essential infrastructural and strategical arrangements beforehand such as IT infrastructure, pricing strategy, supply chain structure and effective transitioning to avoid any last minute issues. ----■■ Expert Comment by Rödl & Partner The new GST will simplify Indian indirect taxes to a great extent. Unclear and heavily debated qualifications such as “manufacture”, “sale” and “provision of service” will lose their relevance. This will also reduce the issues of double taxation under sectors like Information Technology Software and Construction Services. The highly complicated customs duty structure with several duties such as BCD, CVD and SAD being levied and calculated on each other would get cleared out. Under the GST regime, import of goods would attract BCD and IGST making the structure simpler. The availability of Input Tax Credit of IGST to importing resellers would significantly improve the tax cost in the supply chain. On the downside, the GST regime would require companies to maintain separate input tax records for each state they are operating in (selling from) in order to correctly utilize the tax credit. The draft GST law also provides for electronic
cross verification of input tax credit between information submitted by the supplier and recipient for entitlement. This will significantly increase the compliance burden due to the requirement of maintenance of item-wise details for supplies along with costs associated with robust IT infrastructure. Further, apart from certain exclusions, GST would be applicable on all commodities and articles. With a broad definition of the term “Service” which includes anything other than goods, the coverage of GST will be very vide. This would enable the Government to tax items such as the transfer of actionable claims which were outside the present tax structure. GST will further not replace taxes on electricity, petroleum, alcoholic liquor for human consumption and tobacco products. Exclusion of electricity and petroleum from the GST regime would continue to impair implementation of a unified tax regime and the said sectors may face inflationary situations on account of blockage of input tax credits. ----This article has been compiled by the India Desk at Rödl & Partner ( Rödl Rechtsanwaltsgesellschaft Steuerberatungsgesellschaft) and is for general information purposes. Taking actions will in all cases require a review of the individual case. For further inquiries, you may contact Rödl & Partner’s India Desk: Seema Bhardwaj (seema.bhardwaj@roedl. pro) or Tillmann Ruppert (Tillmann. email@example.com)
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PERSPECTIVES ON INDIA India: Unlocking our skies By DR. Shobhit Jain, IRS, Deputy CEO, IBEF In a major boost to regional air connectivity, the Government of India has recently announced that it plans to set up 50 new airports in the country over the next three years. Of these, at least 10 are expected to become operational over the next one year. It is noteworthy that India is already the fastest growing aviation market in the world and the move to improve regional air connectivity is expected to further boost the industry. As part of the plan, the government is expected to take up some of the non-operational airports through a viability gap funding plan. This move is expected to give wings to the ambitious regional connectivity plan. The cost of the project is expected to be around INR 5,000 crore (US$ 744 million) or INR 100 crore (US$ 14,833) for each airport. The plan involves both state and Union governments, with 80 per cent of the cost of setting up an airport being borne by the state government and the rest by the latter. The Government of India also plans to issue subsidies for a period of three years. The government expects to raise INR 500 crore (US$ 74.4 million) per year by levying a tax on airlines flying to these routes while offering them concessions to offset the cost. The Ministry of Aviation has recently signed its first memorandum of agreement for regional connectivity with the Maharashtra government. Some of the existing non-functional airports owned by the Airports Authority of
India Ltd in Maharashtra, including Solapur, Jalgaon, Akola, Nanded and Shirdi, will be developed into no-frills airports. Industry expert agree that move to develop the non-operational airports is more cost-effective than developing new airports from the scratch and is expected to offer a far better catchment area. It is expected to provide new set of growth opportunities to both domestic and international airlines alike.
India: A domestic consumption led growth story By Ravi Capoor, IAS, CEO, IBEF The absolute size of India’s youth combined with improved education is expected to make way for sustained growth in domestic purchasing power. In fact, the recent report from Goldman Sachs further goes on to say that the domestic demand from India’s millennials will make India’s consumer story one of the world’s most compelling for the next 20 years. “We believe most of the new generation of India’s youth will first fall into urban mass, a cohort that is 129 million people today, earning $3,200 on average. The expansion of urban mass, both in size and income level, will be the key driver of India’s consumption story,” the report titled ‘India Consumer Close-Up’ said. The report mentioned that India’s consumer story is expected to be shaped by its 440 million millennials (those reached adulthood around 2000) and 390 million Gen-Z (born after 2000). “We estimate that the
workforce that falls into the urban middle ($11,000 annual income) stands at 27 million, or 2 per cent of population. It will expand, but investors need to be careful in calibrating the potential addressable market for companies targeting this cohort. Brand investing will be a big theme in everything. But we note: India’s urban mass will trade up into brands that offer the most incremental value and quality, but may not readily jump to aspirational brands,” it said. Mobile connectivity and E-commerce are expected to be the areas where India will leapfrog the most and improved mobile connectivity is expected to challenge the domination of TV as a primary source of household entertainment over time, creating a bigger profit pool for content providers and mobile gaming. The report further focused on key product areas that are expected to see strong growth in coming years like packaged snacks, baby products, premium personal care, scooters, SUVs and jewellery. But one profit pool that may grow faster than them all is restaurants, it added. It is important to note here that India’s strong consumer growth story in intact and consumer behaviour and preferences of the Indian consumer are very different, as compared to say China. However, the aspirational behaviour, backed by the sheer size of the demography, is expected to offer numerous opportunities for global and domestic companies to find their right niche and capitalise on that. India Newsletter • 23
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INDIAN STATE ECONOMIC PROFILE HARYANA Haryana is a leading state in the country on both the industrial and agricultural front. Haryana is one of the leading states in terms of industrial production, especially passenger cars, two-wheelers, mobile cranes and tractors. Haryana is the second-largest contributor of food grains to India’s central pool and accounts for more than 60 per cent of the export of Basmati rice in the country, third-largest exporter of software and one of the preferred destinations for IT/ITeS facilities. Between 2004-05 and 2014-15, the state’s gross state domestic product (GSDP) expanded at a compound annual growth rate (CAGR) of 12.93 per cent to US$ 72.2 billion and net state domestic product (NSDP) expanded at a CAGR of 12.87 per cent to US$ 70.8 billion. Haryana is a preferred destination for auto majors and auto-component manufacturers. The state is host to many large automotive players. The state produces two-thirds of passenger cars, 50 per cent of tractors, 60 per cent of motorcycles and 50 per cent of the refrigerators manufactured in the country. The state has invested in the development of world class infrastructure facilities such as special economic zones (SEZs), Kundli-Manesar-Palwal (KMP) global corridor and Delhi- Mumbai Industrial Corridor (DMIC). Haryana enjoys a locational advantage, with nearly one-third of the state’s area under the National Capital Region (NCR), a prominent trade and consumption centre. The state offers a wide range of fiscal 24 • India Newsletter
and policy incentives for businesses under the Industrial and Investment Policy, 2011. Moreover, it has sector-specific policies, particularly for IT and tourism. The Haryana State Industrial and Infrastructure Development Corporation Ltd (HSIIDC) is the state’s premier industrial promotion and investment facilitation agency, responsible for providing reliable and efficient facilities for entrepreneurs investing in the state. The state has taken a number of steps for developing industrial infrastructure to achieve consistent economic growth. The following are some of the initiatives: ■■ HSIIDC has developed a number of industrial estates, industrial model townships (IMT) and specialised parks for cluster development. ■■ An industrial model township is under-construction at Manesar, near Gurgaon. The region is being developed as an automotive and engineering hub. ■■ The government is developing sector specific theme parks and subcities along the KMP Expressway. ■■ Single-window clearance mechanism was established under the Haryana Industrial Promotion Act, 2005. It has a three-tier structure to grant exemption/relaxation from any of the provisions/rules of the Act. ■■ The state government has planned to acquire 1,000 acres of land for a dedicated pharma park in the KMP express global economic corridor. ■■ The state development
invested in the of world class
infrastructure facilities such as special economic zones (SEZs), Kundli-Manesar-Palwal (KMP) global corridor and Delhi-Mumbai Industrial Corridor (DMIC). ■■ The International Centre for Automotive Technology (ICAT) has been set up at Manesar as a part of the National Automotive Testing and R&D Infrastructure Project (NATRiP). It provides testing and R&D services to the industry. ■■ As of March 2015, 28 SEZ proposals were recommended by the state government in IT/ ITeS sector, of which, 6 SEZs are functioning and the rest are under construction. ■■ The state government has proposed a sliding railway and logistic centre in IMT Manesar for smoother transportation and more effective inventory management. ■■ The state government has extended various incentives to companies within the sector, including relaxation in floor area ratio, rebate on registration, transfer of property charges and exemption under the Haryana Shop & Commercial Act. ■■ Haryana is the first state to have implemented its State Wide Area Network (SWAN) for voice, data and video transmission. ■■ The government has granted licenses to 50 proposals for establishment of IT/cyber projects as of August 2015. ■■ The state government has established a Regional Centre for Biotechnology (RCB), Gurgaon under the guidance of UNESCO as a Category II Centre.
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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 email@example.com to get more information about possible assistance/subsidies.
Asia’s largest Gifts & Handicrafts Fair
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INVEST INDIA Federation House, Tansen Marg New Delhi—110 001 0091-11-23765085, 23487278 firstname.lastname@example.org www.investindia.gov.in
policy and Promotion, Ministry INVESTMENT of Commerce & Industry) and State Governments of India (0.5% The National Investment and Infrastructure Fund(NIIF)
■■ Objective: ■■ To maximize economic impact mainly through infrastructure development in commercially viable projects, both Greenfield and Brownfield, including stalled projects. ■■ Other nationally important projects in manufacturing, if viable commercially ■■ Structure: ■■ The NIIF will be established as one or more Alternate Investment Funds (AIF). It refers to any fund established or incorporated in Indian in the form of a Trust or a Company or a LLP or a body corporate. AIF shall raise funds only through private placement
nvest India is the country’s official agency dedicated to investment promotion and facilitation. Set up as a joint venture between FICCI (51% and cannot accept from any equity), DIPP (35%funds equity held investor (Indian or Foreign) whose by the Department of Industrial value is less than 1 crore Indian Rupees and is prohibited from making application to public for subscription to its securities. AIF can be of three categories; ■■ Category I: Investment in Start-ups, SMEs, infrastructure or social ventures ■■ Category II: Investment in private equity and debt funds
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.
■■ Category III: Primarily for hedge funds, which use complex strategies or leverage to invest in unlisted derivaties and trade with a view to make short-term returns India Newsletter • 37
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port from which the mega-city of
After that our perceptions grew
by Hugh & Colleen Gantzer.
Muziris had grown? Bombay had
rapidly. Pepper had been prized in
It was both a place and a promise.
of Kolaba. Archaeologists with their
The Ramayana had mentioned it; so had Kalidasa, A first century guide for mariners had described it as “a city at the height of prosperity, frequented as it is by ships”. In Sanskrit this entrepot was known as Mucharipattanam, The Pepper City. The colony of resident Roman traders and soldiers had probably shortened it to Muziris.
picks, shovels and brushes moved
Artija and her 15-year old brother,
Cranganore-Kodungallur: It is the
In AD 410 Rome collapsed. Muziris recovered from this economic blow but, nine hundred years later, a great flood silted up the port and opened up Cochin, further south. Muziris was abandoned and became a phantom city hovering between speculation and fantasy.
Anand, showed us a collection of
preferred offering to the Devi.
Then, unexpectedly, not so long ago, a deluge of evidence began to pour out of the village of Pattanam. Could it have been the original
held wine, olive-oil and wheat.
38 • India Newsletter
burgeoned out of the fishing village
Europe as a preservative, retarding the rotting of meat slaughtered in
Autumn to conserve fodder. There
We drove to the digs just after a
were no silos. But pepper was a
drenching monsoon had soaked
homestead crop and the only place
where it was available in bulk was in
Excavations had revealed a brick platform, probably an old wharf. A bright, 12-year old schoolgirl named
beads that had welled up out of the flooded earth: rejects from ancient lapidaries’ tables? There
Kodungallur, further up the coast, from the Temple of the Goddess in
The boundaries of our megalopolis of Muziris were expanding.
was a storeroom filled with bulging
The Romans came here for pepper,
sacks of neatly labeled shards of
followed by canny Jewish traders:
amphorae: ceramic casks that had These pointed to a large population
both people were wine, olive-oil and wheat consumers. From the
of expatriates with Mediterranean
on to the former Jewish area.
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Here, according to Jewish and Christian traditions, Thomas Didymus, an apostle of Jesus, had sailed in on a trading ship in AD 52 and was invited to a royal wedding. There he sang a song in a strange language which a Jewish flautist recognised as a Hebrew bridal song. He was welcomed by his fellow Jews into the Jewish quarter. We visited St. Thomas’ Church in Kottekkavu, not far away. This little old church, standing back-to-back with a much larger one, has been renovated many times and now has an ornate altar. It, reputedly, stands on the site of the church established by St. Thomas as the first Christian Church in India. In front of the church, at the far end of a tank, is a diorama depicting a group of people accepting the precepts preached by the Apostle. Clearly, the citizens of the prosperous metro of Muziris did not feel beleaguered by new creeds or faiths. In fact, according to one belief, the last king of the Chera Empire had a vision that led him to Mecca. There he met Prophet Mohammed, was converted to Islam, and gave a letter to one of the followers of the Prophet. Carrying this letter, Malik Ibn Dinar sailed to Muziris where he was welcomed and assisted in establishing the Cheraman Masjid in AD 629. That makes it the first mosque in India. The Muslims’ predecessors, the Jews, must also have had their Synagogue in Cranganore, the religious hub of Muziris. According to Jewish tradition, however, with the silting of the port, the community moved to Chennamangalam, also in the Muziris area. When they migrated to Israel, their neglected synagogue was restored by the state
government and work has begun on the Parur Synagogue, about two kilometers away. This is all part of the ambitious Muziris Heritage Project covering an area of three hundred square
the first Jews in India. Here, there once thrived a civilization known for its tolerance and its harmonious blending of new ways with the old; a civilization whose contented citizens had found no time for bigotry.
of themed museums, a visitors’
This, really, is the true promise of the resurrected Muziris.
centre, and all the other attractions
■■ More Information
that people like Benny Kuriakose,
kilometers. It will have a number
Conservation Consultant to the Project, can create. But in their earnestness to capture the tangible
■■ Quick Facts Getting There:
heritage of Muziris, we hope that
By Air : Cochin International Airport
the intangible will not be ignored.
By Rail: Ernakulam Junction
For here, there are still sarpa kavus
By Road : 35 kms. North of CochinErnakulam on NH 17
dedicated to the old snake deities; temples for the devotees of Shakti, Siva, Vishnu; the first Church, the first mosque and the synagogue of
Accommodation: Large range of accommodation in Ernakulam and Fort Cochin India Newsletter • 39
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INDIA-AUSTRIA BY AIR
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Revamped Scholarship For Children Of NRIs, Persons of Indian Origin A revamped scholarship programme for children of NRIs and Persons of Indian Origin to pursue under graduate courses in Indian universities and institutions was on announced by Ministry of External Affairs (MEA). Under the new scheme, the Scholarship Programme for Diaspora Children (SPDC) has been extended from 40 to 66 countries including 17 ECR (Emigration Check Required) countries, the MEA said. The number of scholarships has also been increased from 100 to 150 with 50 slots earmarked for the Children of Indian Workers in ECR counties. Of these 50 slots, one-third of slots
are reserved for children of Indian workers in ECR countries studying in India. Income criteria would be applicable to all categories of students. According to the Emigration Act, 1983, Emigration Check Required (ECR) categories of Indian passport holders need to obtain ‘Emigration Clearance’ from the office of Protector of Emigrants (POE) for going to 18 countries which are mostly in Gulf region. Under SPDC, children of PIOs and NRIs can pursue under graduate courses in Indian universities and institutes in a range of fields except medical and related courses. The scholarship amount is given for payment of tuition fee, admission fee and post admission services
including hostel fee but excluding payment of food charges. “The revamped SPDC is now in place from academic year 2016-17,” the MEA said. It said scholarship will be offered for pursuing courses in central universities, institutions accredited “A” Grade by NAAC (National Assessment and Accreditation Council) and in number of other institutions including National Institutes of Technology (NITs), Schools of Planning and Architecture (SPAs), Indian Institutes of Information Technology (IIITs). A portal SPDCINDIA.GOV.IN has been developed to process applications for the scholarship. Applications can be submitted online till September 23.
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INDIAN MOVIE EVENING AT THE EMBASSY 30. September, 17:30 HINDI OV mdUT
28. October, 17:30
25. November, 17:30 HINDI OV mdUT
HINDI OV mdUT
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