Indian Economy - News & Updates - Archive

[Neo]

India inflation hits 42-month high ​

Saturday, May 03, 2008

NEW DELHI: India’s inflation rate accelerated to a 42-month peak of 7.57 per cent, driven by higher food costs, according to official data on Friday, dealing a fresh blow to the government.

Annual inflation quickened more than two-tenths of a percentage point to touch 7.57 per cent for the week ended April 19, up from 7.33 per cent a week earlier.

The prices of rice, milk, tea, and vegetables all rose as did some manufactured goods such as steel sheets used in construction.

High inflation has become a top political issue in India with taming prices the key goal of the Congress-led government, which faces general elections within a year and a clutch of state polls before then.

India’s hundreds of millions of poor whose support is vital at voting time have been hit hardest by the inflation surge.

The latest rise was reported after India tightened monetary policy for the second time in two weeks on Tuesday and announced a slew of fiscal steps to boost food and metal supplies as it struggles to ease runaway costs.

Inflation in Asia’s third-largest economy last hovered around these levels in late 2004 when the central bank embarked on an aggressive monetary tightening cycle.

The latest jump, measured by the Wholesale Price Index, India’s most closely watched cost monitor, comes amid escalating global commodity prices.

The government has banned export of certain basic staples like rice and lentils and cut customs duties on other items to try to rein in inflation.

On Tuesday, the central bank hiked the percentage of funds banks must set aside, upping the cash reserve ratio by 25 basis points to 8.25 per cent, to reduce money for loans and try to check inflation.

India inflation hits 42-month high

 

[Neo]

India says close to clinching ASEAN free trade deal ​

Sunday, May 04, 2008

NUSA DUA, Indonesia: India is close to clinching a free trade deal with Southeast Asian nations, spurred on by a bleak global economic outlook and rising food prices, the country’s trade minister said on Saturday.

“We are on the last mile and in the final stage of conclusion,” Kamal Nath told Reuters after meeting his counterparts from the 10-member Association of Southeast Asian Nations (ASEAN) on the resort island of Bali.

“We hope it could be concluded in the next three months there is no major obstacle,” he said, adding that a dispute with Indonesia over palm oil would be resolved.

Indonesia, the world’s top palm oil producer, has been insisting on having wider access to India’s palm oil market as a condition of removing its opposition to a free trade agreement with India, according to media reports.

“We are going to resolve that, because with the world food situation and the global economic outlook in the United States and Europe which is bleak, it’s therefore even more important for regional integration,” Nath said.

The issue of rocketing rice prices and food security has overshadowed the meeting of ASEAN economic ministers, which aims to deepen regional economic integration and spur long-delayed world trade talks.

Nath said India’s bumper rice harvest this year would boost supply and he sought to defend the country’s move to curb rice exports, which has been blamed for contributing to soaring global rice prices.

“We have a very large domestic population we have banned exports of the certain type of rice but we have allowed exports of other types,” he said.

“The region’s rice-growing countries must look at increasing productivity and having better storage and less wastage.”

Turning to the domestic economy, he conceded it would be a tough battle to tame inflation as food and energy costs soar.

“We hope that we will be able to contain inflation, but inflation is a major challenge,” he said, adding that the authorities have to curb money supply while treading carefully not to put a brake on economic growth.

India says close to clinching ASEAN free trade deal

 

[Flintlock]

India plans electricity network in South Asia

Aims to widen energy security; domestic firms cash in on opportunity

On the drive

3 new hydro projects identified in Bhutan

2 firms setting up hydroelectric stations in Nepal

Work on to put up undersea link with Sri Lanka

Anil Sasi

New Delhi, May 5 India is actively working on plans to build a pan-South Asia electricity ring.

Aimed at broad-basing India’s energy security by wheeling back the bulk of the power generated through the inter-country power projects on the anvil, the renewed “electricity diplomacy” plans also envisage a greater play for Indian firms in harnessing energy resources across the region.

While a transmission link with Bhutan is already in place, there are plans to develop two more projects in the Himalayan kingdom, besides sprucing up the existing power line, to enable up to 5,000 MW of electricity imports into India by 2020.

Plans are already underway for setting up an undersea link with Sri Lanka. In Nepal, two Indian firms — GMR Group and State-owned Satluj Jal Vidyut Nigam — are setting up hydroelectric stations, while power trading major PTC India Ltd has signed pacts to wheel power from two other projects. In Myanmar, joint development of a 1,200-MW hydro project, along with a power link, is being envisaged.

“We would like to use power as a tool to ensure greater regional engagements. It is going to be a very important element of our policy going forward… Besides, Indian firms stand to gain from these efforts,” the Minister of State for Power and Commerce, Mr Jairam Ramesh, told Business Line.
Nepal base

Among the neighbouring nations, Nepal, with a hydro-electric potential 83,000 MW, of which generating 45,000 MW has been estimated as techno-economically feasible, is the biggest draw. Indian firms have started making inroads, with the GMR Group having bagged the 300-MW Upper Karnali project and Sutlej Jal Vidyut Nigam the 402-MW Arun III project.

Separately, PTC India has committed to buy 750 MW from the West Seti project being developed by an Australian company and another 300 MW from the Lower Arun project being developed by a German firm. Meanwhile, over 10 Indian firms — including Tata Power, KSK Ventures, JSW Energy — are in the fray for developing the 600-MW Budi Gandaki project, for which tendering is underway.

Besides power developers, a host of Indian civil engineering firms, including Nagarjuna Construction Ltd, Continental Construction Ltd and Maytas Infra Ltd, are now in the running for contracts in Nepal.
More in line

In Bhutan, after the success of the 1,020-MW Tala project, from which power is already being wheeled into India, three new major hydro projects — the 1,080-MW Punatsangchhu-I, the 1,000-MW Punatsangchhu-II and the 600-MW Mengdechu hydro electric projects — have been identified for joint development, and the survey and investigation work has been initiated.

With Sri Lanka, India is already working on putting in place a $450-million mega undersea power transmission link.

The 200-km submarine cable is likely to be set up with a capacity to wheel around 1,000 MW of electricity and State-owned Power Grid Corporation is set to bag the mandate to execute the project.

NTPC, meanwhile, is already working on a 500-MW coal fired plant in Trincomalee. In the case of Burma, the Tamanthi hydroelectric project (1,200 MW) has been identified for joint development and a transmission link could be decided upon based on the progress on the project. An Indian delegation to Myanmar is expected to leave in the first week of June to discuss further action on the proposal.

The Hindu Business Line : India plans electricity network in South Asia

 

[Flintlock]

Special effects of outsourcing: Hollywood heads to India


The Golden Compass

The Oscar-winning effects for The Golden Compass were put together at the Indian headquarters of Los Angeles studio Rhythm & Hues
Rhys Blakely

As outsourcing projects go it is rather fantastic: the Oscar-winning special effects for The Golden Compass, the Hollywood blockbuster that took $370 million (£187.7 million) at the box office last Christmas were put together in a thatched village hut in India.

Well, almost.

The huts in question are replicas — stylised office cubicles made to look like rural Indian dwellings. Situated in Mind Space, a vast, grey commercial complex on the outskirts of Bombay, they form the Indian headquarters of Rhythm & Hues (R&H), the leading Los Angeles-based special effects studio.

The Times visits on a national holiday, but several of R&H's 250 India-based staff are hunched over their computers, working overtime on the visual pyrotechnics that will feature on the next outings of the Spider Man, Mummy and Incredible Hulk film franchises. The labour is painstaking. Each employee will struggle to produce the equivalent of five seconds of screen time in a month.
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The results are usually worth the wait. Babe, the talking pig who won an Academy Award and earned more than $250 million at the box office in 1995, was an R&H creation. Alvin and the Chipmunks, the recent surprise hit for which R&H created the eponymous rodents, has now grossed nearly $360 million — not bad for a film with a $60 million production budget.

For the past six years, part of the work on such projects has been completed in these Bombay offices, the design of which Prashant Babu Buyyala, the facility's managing director, seems especially proud. "We wanted something creative yet functional," he says of the faux village look. "Importantly, we didn't want to spend a lot of money."

The same maxims, it could be said, are directing Hollywood's passage to India.

Post-production movie work — everything from complex digital effects (such as the talking armoured polar bears that appeared in The Golden Compass, one of which sported a fur coat with seven million individually rendered hairs) to basic colour grading (making sure shades stay consistent throughout a film) — is steadily migrating from traditional centres such as LA to low-cost locations on the sub-continent.

Prime Focus, another post-production house, has grown its Indian visual effects group to 165 people, from 40, in the past year. Pixion Studios, a rival, is aiming to increase its workforce in India fourfold, to 1,000 people, by 2009.

Nasscom, the Indian IT industry lobby group, estimates that the global animation market will be worth about $80 billion by 2010, and is targeting it as a prime source of future outsourcing revenues as more film work is shifted to India from the US and Europe.

With emotions already running high over the loss of US jobs amid an economic downturn, Mr Buyyala is adamant that Rhythm & Hues is not running a cost-cutting operation in India. The Bombay office handles work as complex as that done in the US, he says. Moreover, despite India's size, a lack of art schools has translated into a relative dearth of talent. "I keep on having to tell people: 'this country just isn't that cheap any more'," he adds.

But it is hard to believe cost has no bearing. Starting salaries in R&H's Bombay offices are as low as 40,000 rupees (£410) a month. Pay packets rise quickly and the highest earners in Bombay pull in similar sums to their US-based counterparts, Mr Buyyala says, but still the early discounts offered by young Indian animators are upsetting their American peers.

"My students will now have even a lesser chance of working in the industry," one animation teacher in the United States recently wrote on an industry website. "I understand why Rhythm & Hues must do what is necessary for the bottom line. It is just sad."

That comment may not be entirely correct — R&H has sharply expanded its US workforce while growing its Indian operations — but cost pressures are playing an ever greater role in Hollywood.

"Cost and speed" are paramount in the world of post production, says Simon Huhtala, of Prime Focus. "Scale and rationalization are the major driving forces."

In response, Mr Buyyala argues that there is a compelling reason to enter India beyond the opportunity to shave costs: the country's potential as a market. In particular R&H is waiting for the expected explosion in the use of special effects in Bollywood. The possibilities, of course, are massive: the world's biggest film industry is yet to fall for the charms of talking animals.

Special effects of outsourcing: Hollywood heads to India - Times Online

 

[Flintlock]

UPDATE 2-India's economy to grow about 8 pct - official
Tue May 6, 2008 1:02pm BST

(Adds latest think-tank GDP estimate in paragraph 6)

By Rajkumar Ray

NEW DELHI, May 6 (Reuters) - India's economy is expected to grow around 8 percent in the current fiscal year, and annual inflation, now at its highest in more than three years, may moderate in a few weeks, a top official said on Tuesday.

The country's central bank and most other forecasts have pegged growth in Asia's third-largest economy at 8.0-8.5 percent in the 2008/09 financial year as the global economic slowdown and monetary tightening takes its toll.

The Indian economy is estimated to have grown at 8.7 percent in 2007/08, slower than the previous year as higher interest rates hurt consumer demand.

"My projection was 8.0-8.5 percent," Montek Singh Ahluwalia, deputy chairman of India's Planning Commission, which charts the country's five-year economic plans, told reporters.

"I will be happy at the lower end. A growth of around 8.0 percent is quite acceptable."

An independent New Delhi-based economic think-tank said the economy is expected to grow by 8.5-8.8 percent in 2008/09, if interest rates remains stable, while average annual inflation may be higher than last year.

The National Council for Applied Economic Research (NCAER) said an expansionary fiscal policy would help India weather the adverse effects of a global slowdown during 2008/09.

While still strong the economy has lost altitude from scorching 9.6 percent expansion in 2006/07, which was the highest in 18 years.

Finance Minister Palaniappan Chidambaram expects the economy to grow more than 8.0 percent in the current fiscal year. The government wants growth of 9 percent or above to reduce widespread poverty and create jobs.

The finance minister says 9-plus percent growth -- with 4 percent inflation -- is the ideal rate although a ministry report has said just sustaining 9 percent growth would be a challenge due to inflation pressures and infrastructure constraints.

Ahluwalia said he expects the inflation rate to moderate.

"I do hope that in the next few weeks inflation will moderate. The government can take more measures if prices are not contained," he said.

The government and the central bank have taken fiscal and monetary steps to calm price pressures ahead of key state elections later this year and federal polls next year. (Writing by Surojit Gupta, Editing by Mark Williams)

UPDATE 2-India's economy to grow about 8 pct - official | Markets | Reuters

 

[Neo]

India has 114,000 BlackBerry users, says minister ​

NEW DELHI: India has about 114,000 mobile subscribers using Research In Motion’s (RIM) BlackBerry services, much lower than expected, the junior minister for telecommunications said on Monday. Media reports have said there were around 400,000 BlackBerry users in India, while an analyst had estimated the number to be more than half a million. “As per the information received from service providers, there are around 114,000 subscribers as on date who are being provided BlackBerry services by various telecom companies,” Jyotiraditya Scindia told the lower house of parliament in a written reply to a question.

Four firms, Bharti Airtel, Reliance Communications, Vodafone-controlled Vodafone Essar and BPL Mobile provide BlackBerry services in India. RIM does not give country specific user numbers. A spokesman for India said the company had 14 million subscribers globally as of the quarter ended March 1. India had asked telecom firms not to provide certain BlackBerry services until monitoring systems are in place. It had also written to RIM asking it to install servers in India. The move came after security agencies raised concerns the service posed a risk as emails sent using it could not be traced or intercepted.

Daily Times - Leading News Resource of Pakistan

 

[Flintlock]

GMR takes over Istanbul airport for modernisation and operations news
05 May 2008


Turkey: The Government of Turkey has handed given a second airport in Istanbul for modernisation and operations for a 20-year period, to a consortium of led by Hyderabad-based GMR Infrastructure Limited. Turkey's state-owned Limak Holdings, and Malaysia Airports Holdings Berhad Ltd are GMR's consortium partners in the project.

The license to operate the Sabiha Gokcen International Airport was handed over to the consortium on Saturday. The consortium will now commence work for upgrading the airport, with an investment of Rs1,575 crore (€250 million).

The consortium won the bid in July 2007, having committed the highest operating rental of Rs11,978 crore (€1.93 billion) for 15 years. The project's revenues will come from duty free shops, ground handling and cargo handling, and a passenger fee that would be levied to the tune of €12 for an international passenger, and €3 for a domestic passenger. Aeronautical revenues, however, which accrue from charging airlines for landing and parking, will go to the Turkish government.

The consortium expects duty-free shopping to account for almost 25 per cent of the airport's revenues.

Turkish Prime Minister Recep Tayyip Erdogan on Saturday, asked the consortium to expedite their development and complete the upgrade of the airport in 18 months, against the original deadline of 30 months. This includes the construction of new terminal buildings, shopping complexes, car parking facilities and other additional infrastructure such as a 60-room hotel. The terminal and facilities will cover a total area of 320,000 square metres, and will have 96 check-in points, 30 online check-in points, a total of 32 x-ray units, and a 13,700 square metre, two-storey VIP terminal.

Once the upgrade is complete, the airport will be able to handle 15 million passengers by 2010. Currently, it handles half that number. Traffic in Turkey is estimated to grow by 500 per cent by year 2028, when the concession period comes to an end. Over the 20 year period, traffic is estimated to grow to 45 million.

The consortium plans to raise funds from Turkish banks and the ABN Amro Bank through a combination of debt and equity in the ratio of 75:25, and plans to achieve financial closure after one year in operation.

GMR Infrastructure Ltd holds 40 per cent in the consortium, while partners Limak Holdings and Malaysia Airports Holdings Berhad hold 40 per cent and 20 per cent, respectively.

domain-b.com : GMR takes over Istanbul airport for modernisation and operations

 

[Neo]

India’s economy to grow about 8 percent​

NEW DELHI: India's economy is expected to grow around 8 percent in the current fiscal year, and annual inflation, now at its highest in more than three years, may moderate in a few weeks, a top official said on Tuesday.

The country's central bank and most other forecasts have pegged growth in Asia's third-largest economy at 8.0-8.5 percent in the 2008/09 financial year as the global economic slowdown and monetary tightening takes its toll. The Indian economy is estimated to have grown at 8.7 percent in 2007/08, slower than the previous year as higher interest rates hurt consumer demand.

"My projection was 8.0-8.5 percent," Montek Singh Ahluwalia, deputy chairman of India's Planning Commission, which charts the country's five-year economic plans, told reporters. "I will be happy at the lower end. A growth of around 8.0 percent is quite acceptable."

An independent New Delhi-based economic think-tank said the economy is expected to grow by 8.5-8.8 percent in 2008/09, if interest rates remains stable, while average annual inflation may be higher than last year. The National Council for Applied Economic Research (NCAER) said an expansionary fiscal policy would help India weather the adverse effects of a global slowdown during 2008/09.

While still strong the economy has lost altitude from scorching 9.6 percent expansion in 2006/07, which was the highest in 18 years. ap

Daily Times - Leading News Resource of Pakistan

 

[Flintlock]

India's Bharti joins 700-million-dollar cable project linking Britain

18 hours ago

BANGALORE, India (AFP) — Bharti Airtel, India's top mobile-phone operator, said Wednesday it had joined a consortium to build a 700-million-dollar submarine cable system.

Bharti signed a construction and maintenance agreement in London for the Europe India Gateway (EIG), the first high-bandwidth, optical-fibre cable system from India to Britain, the company said.

Fifteen other firms are taking part in the 15,000-kilometre (9,000-mile) project linking 13 countries across three continents that will start carrying commercial traffic by the second quarter of 2010, it said in a statement.

Among the firms are AT&T, BT, C&W, Djibouti Telecom, Gibtelecom, Libyan Telecom, MTN Group, Omantel, Saudi Telecom Company, Telecom Egypt, Telkom SA and Verizon Business.

The EIG consortium has signed construction and supply agreements with Alcatel-Lucent and Tyco Telecommunications, the statement said.

Bharti will be operating the Mumbai landing station for the cable system that will support Internet, e-commerce, video, data and voice transmission.

The project will help meet a "tremendous rise in use of data and broadband applications among enterprises and consumers" in India, said David Nishball, head of enterprise services at Bharti Airtel.

"Whether it is large enterprises leveraging communications technologies to compete in a truly global environment or consumers seeking real-time entertainment over the Internet, international connectivity has become a vital part of our lives," he said in the statement.

The EIG cable system will also provide interconnection with other major cable systems connecting Europe, Africa, Asia and North America.

Bharti, which controls 23.8 percent of the Indian phone market, has 64 million clients, 62 million of them mobile subscribers, and a market capitalisation of around 42 billion dollars.

The announcement came after the company said on Monday it had begun exploratory talks with South Africa's MTN on a possible takeover.

AFP: India's Bharti joins 700-million-dollar cable project linking Britain

 

[Neo]

Toshiba to form India power venture with JSW ​

Thursday, May 08, 2008

TOKYO: Japan’s Toshiba Corp said on Wednesday that it had agreed to tie up with India’s JSW Group to manufacture and market steam turbines and generators for thermal power plants in India.

Toshiba and JSW, which is part of O P Jindal Group, plan to invest about $250 million in plant and manufacturing equipment for the joint venture, which will be owned 75 per cent by Toshiba and 25 per cent by JSW. Manufacturing operations are expected to start in September 2009, the Japanese company said in a statement.

The deal will give Toshiba “a firm foothold in the rapidly growing Indian market for thermal power generation,” executive vice president Atsuhiko Izumi said in a statement.

“We want to rapidly build up our presence in a fast growing market,” he added.

Toshiba last year won a large contract to supply five large super-critical steam turbines and generators to India’s Tata Power.

The Japanese group has positioned energy as one of its core businesses. It bought US nuclear plant maker Westinghouse Electric from British Nuclear Fuels in 2006 in one of the largest Japanese overseas acquisitions in years.

Toshiba to form India power venture with JSW

 

[Flintlock]

India bans futures trading in four more commodities


India suspends trading in soybean oil, potatoes, rubber and chickpeas
By Polya Lesova, MarketWatch
Last update: 11:50 a.m. EDT May 8, 2008


NEW YORK (MarketWatch) -- India suspended futures trading in soybean oil, potatoes, rubber and chickpeas Thursday, as its government struggles to stem soaring inflation at a time when global food and energy prices are skyrocketing.
India's Forward Markets Commission, a regulatory authority, has banned trading in the four commodities for at least four months, according to media reports on Thursday.
Last year, India banned trading in rice and wheat futures.
The ban on futures trading comes as India confronts growing pressure at home to curb rising inflation. On Friday, official data showed that India's inflation hit a 42-month high of 7.57% in the week ending April 19.
The ban also follows comments from India's finance minister Palaniappan Chidambaram Monday, who said that he was considering a blanket ban on trading in food futures, because of worries speculation in the commodity markets as well as the food crisis India is facing.

Banning trading in food futures is unlikely to reduce inflation, according to Seema Desai, an analyst at the Eurasia Group.
"The key policy move that could genuinely reduce imported inflation would be to allow the currency to appreciate but there is little political appetite for that (as yet)," Desai said in a research note this week.
Last week, an expert committee appointed by the government to look into whether commodities futures trading fans inflation concluded that there was no evidence suggesting such a link.
Banning food futures trading is unlikely to reduce inflation, according to Seema Desai, an analyst at the Eurasia Group.
"The key policy move that could genuinely reduce imported inflation would be to allow the currency to appreciate but there is little political appetite for that (as yet)," Desai said in a research note this week.
The four commodities, which were suspended from trading Thursday, account for a daily turnover of about $288 million on the Multi Commodity Exchange of India (MCX) and the National Commodities and Derivatives Exchange (NCDEX), the International Herald Tribune reported Thursday.
Soaring prices for agricultural commodities, including rice, wheat, corn, and soybeans, have stirred popular discontent and demonstrations around the world. The United Nations World Food Program has said that high food prices are creating "a silent tsunami" threatening to plunge more than 100 million people on every continent into hunger.
India, which will hold parliamentary elections next year, has taken a number of measures in response to soaring food prices. Prime Minister Manmohan Singh's government has eliminated import tariffs on several commodities, including wheat, wheat flour and palm oil. It has also raised the minimum rice export tax in phases after initially banning all rice exports in October 2007. India has also tried to crack down on hoarding food.

India bans futures trading in four more commodities: reports - MarketWatch

 

[Bushroda]

Indian economy to grow by 8.5-8.8 pct in FY09 - NCAER
Tue May 6, 2008 5:31pm IST
NEW DELHI (Reuters) - The Indian economy is expected to grow by 8.5-8.8 percent in the 2008/09 fiscal year with stable interest rates but inflation may be higher than last year, an economic think-tank said on Tuesday.

The National Council for Applied Economic Research (NCAER) said an expansionary fiscal policy would help India weather the adverse effects of a global slowdown during 2008/09.

India's statistics office estimated gross domestic product growth at 8.7 percent growth in 2007/08 and the central bank forecast a 8-8.5 percent growth in 2008/09.

In February, the government cut tax rates on manufactured products and raised the income tax exemption limit to pump-prime Asia's third largest economy.

"The slowdown in growth on account of adverse global factors may be offset by the expansionary fiscal policy," NCAER said in a report.

NCAER expects farm output to grow by 2.5 percent on the back of a normal monsoon during 2008/09, slightly lower than 2.6 percent last year.

Industrial output is expected to expand by 8.9-9.4 percent, while services sector is likely to grow by 10.2-10.5 percent in the current fiscal year, it said.

Inflation is seen between 4.9 percent and 5.2 percent, NCAER said, higher than an average 4.5 percent last year.

Exports growth is expected to moderate to 16.6-17.9 percent during 2008/09 from 23 percent last year while imports growth is seen at 18.2-19.5 percent compared with 30.2 percent of last year, it said.

NCAER expects the fiscal deficit to be higher at 2.6-3.0 percent of GDP during 2008/09 on higher government spendings. The federal government is aiming at cutting the deficit to 2.5 percent this year from 3.1 percent in last year.

 

[Bushroda]

Vrooom!! Ducati bikes set to scorch Indian roads
By Surojit Chatterjee
International Business Times
08 May 2008 @ 11:30 pm GMT

Even as Harley Davidson continues to mull whether it should set its foot in India, Italian motorcycle maker Ducati Motor Holding SpA has taken the plunge, announcing, Wednesday, that it would be launching its entire range of premium bikes in multiple variants to satisfy the needs of the Indian racing enthusiasts.

"We will be launching different models in multiple variants. These bikes will be available starting at Rs.15 lakh ($37,500) and would go upto Rs.50 lakh ($1,25,000) in the Indian market," said Ashish Chordia, chairman and CEO, Precision Motor India Pvt Ltd, the sole importer and distributor of Ducati bikes in India.

The company aims to import around sixty completely built units (CBUs) this year from the Italian manufacturer, he said. Initially, the bikes will be sold through two exclusive showrooms in Mumbai and Delhi and subsequently, early next year, three more showrooms will be added in Hyderabad, Bangalore and Chennai.

"The passion that I have for this glorious marquee is both a source of pride and a stimulation to promote and develop Ducati's entry into the Indian market. I am honoured by this partnership and I am sure that Ducati will also have a great future in this country," Chordia said, on the sidelines of the launch of five Ducati models - Monster S4R S Testastreeta, the Superbike 1098, 1098R, Hypermotard 1100S, and the Superbike 848.

Precision Motor India Private Limited is a Mumbai-based distributor of luxury brands that includes Porsche, Audi, NetJets, Fendi and Dolce&&Gabbana.

Coinciding with the launch of the premium bikes, Gabriele Del Torchio , CEO, Ducati Motor Holding SpA, announced the 2007 Moto GP World Champion manufacturer's entry into the young and exponentially growing Indian market.

"We strongly believe that the fast growing Indian market is of a strategic importance to Ducati and we will do our best to consolidate our presence and to capitalize on the huge opportunities this country has to offer," Torchio said, adding, "India is no longer an emerging market. It is a reality worldwide. We feel it is the right time to enter the Indian market. The economy is booming and there is a huge number of rich Indians who aspire to buy premium bikes. With the technology to produce the world's fastest bikes, we see a great potential for superbikes in India." Ducati is a name synonymous with racing success, delivering cutting-edge motorbike technology and highest safety and emission standards.

Torchio also noted that a long-term strategy was needed for it to succeed in India. "A lot will depend on our ability to create a strong platform for our future revolution. The choice that we made to work with distributors that we have identified in India is very important because it will create this platform. They have a lot of experience in dealing with luxury products," he said.

Ducati is expected to compete with Yamaha and KTM which are also offering a premium range of bikes. In future, Suzuki and Honda are also expected to foray into India's motorbike market and heat up the competition.

According to Torchio, India has a great future with "vast improvements in infrastructure and the F1 circuit plans firming up."

"If all goes well, we shall have a full-fledged motorcycle racing season in India soon," he said, adding that he has asked MotoGP CEO Carmelo Ezpeleta to bring the Grand Prix event to India.

"If this event can happen in Qatar, China, Malaysia and Australia, I think India also has a great chance," he added.

Ducati is a small company compared to Honda, Yamaha and KTM but has won 14 of the last 17 World Superbike Championship titles and has picked up the maximum number of trophies in all global competitions. It won both the top Constructors' and Riders' world titles in MotoGP 2007.

The Italian bike company is also one of the biggest sponsors of motor racing championships.

"We want to promote motorsports in India and cultivate the sporting culture. To organize the MotoGP championship in India, we just need an F1 track. We have sought the help of all auto makers and Society of Indian Automobile Manufacturers (SIAM) to move the matter faster and get the infrastructure in place," Chordia said.

Jaiprakash Associates, a Delhi-based infrastructure firm has already announced its plans of developing a permanent F1 racing track in Greater Noida at a cost of Rs.1500 crore ($375 million).

The same track could be used for bike racing as well, Chordia said.

 

[vish]

Thought I’ll add my two bits here… one reason why the Indian economy is the toast of the world is that our, unlike other Tigers and PRC, is based on consumption…

For example, the IT Services in which India is considered a superpower currently account for less than a percentage of our GDP… but these highly-paid IT professionals have masses of disposable income that percolates down to the economically not-so-well-off… I work in a KPO… but I’m dying to work in a company that caters to the domestic market… plus our rise isn’t just based on export-manufacturing or export-services… but rather on domestic consumption, which is healthy in the long run… and India has genuinely succeeded in creating vibrant multinationals (Tata, Reliance, Bharti, etc.)… moreover, the Indian banking system is world-class…

Also... I think I biggest advantage that India has a large media industry… movies, televisions, print, radio…

The thing that worries me the most is the stagnation in agriculture and the lack/absence of infrastructure… but still we have managed so much… surprises me… there’s a joke in India… we have done all this “without” a government… imagine what we would do with “one”…

 

[Flintlock]

India honing edge in auto design, R&D software
Danny Goodman & Kirtika Suneja / New Delhi May 11, 2008

The increasing use of high-end software in automobile design and R&D has made Indian auto majors leverage the country's software prowess and gain an edge over their European and American competitors.

Most are expanding their research and design services either organically or by acquisitions, which will enable them to launch newer models in the market quickly and efficiently in the coming years.

By June 2009, the $6 billion Mahindra & Mahindra group (M&M) will open its new $116 million automobile design and development facility called the Mahindra Research Valley (MRV) spread over 150 acres in Mahindra World City in Chennai. Primarily, this R&D facility will cater to M&M's design needs, and later may consider doing similar high-end work for other OEMs.

Tata Motors has six R&D centres that span India, South Korea, Spain and the UK. In 2006, the Tatas acquired INCAT – now an arm of Tata Technologies – that conducts specialised R&D work for the Tata Group and others. Recently, Tata Motors bought a minority stake in Italian car design firm, Pininfarina, which has designed some landmark Ferraris.

In April this year, French major Dassault Systemes tied up with Argentum Engineering Design's (AED) Centre for Excellence to train automobile engineers who would design, test, validate and manufacture new vehicle models for domestic and international OEMs.

According to a Nasscom report, the automobile and aerospace design industry is currently estimated at $ 144 billion, in which India's current share is valued between $3 billion and $5 billion annually.

This amount is estimated to increase to around $16 billion over the next two to three years. Global spending on engineering services is expected to touch $1.1 trillion by 2020.

Outsourcing to India will touch over $ 50 billion by then.

High-end software like 3D, PLM, and V5 provided by software majors like Dassault Systemes, Siemens and IBM have revolutionised the way new models of vehicles are designed, tested, and manufactured. The advantages of using Indian software talent are obviously in costs. Indian engineering talent is 45 per cent cheaper than an American counterpart.

The savings in time and money gained by using high-end software are also obvious. "We are aware of anything between 25 and 40 per cent savings in time achieved by auto majors when launching a ‘concept to manufacture' programme," said Vivek Marwah, country marketing head, Siemens PLM.

In high performance motorsport, where turnaround time is essential, applications like PLM have reduced design time. Toyota Motorsport uses Dassault Systemes' PLM solutions to reduce aerodynamics design time by 80 per cent and achieve the first-physical assembly of the car in only two days, compared to three weeks previously. For an F1 racing team, time saved off the track is crucial.

Costs saved in building and testing models are equally substantial. "Earlier, we used to build 50 vehicles for crash tests. Now after using virtual crash tests, we use only about 40 units," explains Dr Arun Jaura, chief technology officer, Mahindra & Mahindra.

The costs saved in tests like these vary depending upon the skill sets of engineers and the country's regulatory agency requirements. Another testing expert said most new car models launched in Europe now undergo only one physical crash test, while the rest are simulated. The costs of constructing test prototypes can be enormous.

Despite a significant amount of contribution from Indian engineers in the development of models like the Swift, Dzire and SX4, Maruti Suzuki still relies on Suzuki, Japan for training its engineers, though the automaker plans to increase its R&D strength to 1,000 by 2010.

And players like Argentum hope to offer the same in India through its tie-up with France's Dassault Systemes. "Through this tie-up, we hope to train engineers who will produce engineering solutions, and not software people to do the same," said S D Pradhan, CEO, Argentum Engineering Design.

Currently, India enjoys a reputation as a provider of low-end research work that revolve around small cars. The current challenge is to change that perception. "The country has had a reputation for low-end design work. In setting up the Mahindra Research Valley, we would demonstrate to become the epicentre of engineering design and development for high-end work. We have the potential," said Dr Jaura.

India's journey to becoming the world's hub for automobile design and development may not be easy. "Opportunities are plenty, but competition abounds. China, Latin America, East Europe... each one with certain natural advantages," said R Srinivasan, executive vice-president, Avtec, a Hindustan Motors subsidiary.

India honing edge in auto design, R&D software