Indian Economy - News & Updates - Archive

[Bushroda]

India’s growth rate can jump to 10 percent: Kamath
By Dipankar De Sarkar
June 19th, 2008

London, June 19 (IANS) The Indian economy is on course to achieving a 10 percent growth rate “over a sustained period”, India’s most powerful private sector banker said here Thursday. The remarks by ICICI Bank CEO K.V. Kamath came after Commerce and Industry Minister Kamal Nath told a gathering Wednesday night that recent inflationary pressures had caused growth to dip by one percent to 8.5 percent.

Kamal Nath, who was supposed to have addressed Thursday’s meeting, cut short his visit to London to attend to urgent business back home.

Another absentee at the event was Planning Commission Deputy Chairman Montek Singh Ahluwalia, who was awarded an Oxford doctorate Wednesday and is scheduled to leave for India Friday.

Kamath told a meeting of prominent Indian and British businesspeople and entrepreneurs here that the biggest driver of the Indian economy was the service sector, which accounted for 60 percent of India’s gross domestic product (GDP) and was growing at the rate of 10 percent.

Neither the proportion of the service sector in the economy nor its rate of growth had shown any signs of dipping and were expected to remain roughly at the same levels in the future, said Kamath.

The CEO of India’s largest private sector bank was speaking as president of the Confederation of Indian Industry (CII) at an event where other speakers included Liam Byrne, Britain’s minister for the Midlands - home to 90 percent of the country’s Indian-origin population, Indian High Commissioner Shiv Shankar Mukherjee, economist Lord Kumar Bhattacharya, and several business leaders such as Karan Bilimoria, Analjit Singh, Malvinder Singh and Phiroze Vandrevala.

Kamath said another reason for basing his 10 percent projection was that the Indian manufacturing sector was poised to spring back “very strongly” after a period of “deep pain” from 1996 to 2002.

“It is now an entity that is lean, financially well-structured and with a global mindset,” he said.

However, he said some inflationary pressures and, what he called, “environmental issues” could slow down growth in the short term.

Mukherjee said a trajectory of 10 percent or more was not only achievable but could be sustained over a long period because India’s democratic process ensured that all the diverse sections of the country were part of a consensus on economic reforms.

“Let’s not stop at 10 percent. But I’d rather have a 10 percent growth rate that everybody agreed with,” Mukherjee added.

 

[Neo]

India’s inflation rate shoots to 13-year peak of 11.05pc ​

Saturday, June 21, 2008

NEW DELHI: Indian inflation raced to its highest level in 13 years, accelerating to over 11 percent after a fuel price hike, according to data Friday that piled pressure on the government as general elections loom.

Annual inflation in the world’s second fastest-growing economy jumped to 11.05 percent for the week ended June 7 from 8.75 percent a week earlier, stunning economists who forecast it would be around 9.8 percent.

It also pushed Indian shares down more than 500 points to their lowest close of the year on fears of more interest rate hikes.

The “double-digit shocker,” as one Indian TV news channel dubbed it, was driven by a sharp increase in state-set fuel and cooking gas prices and rises in such basic foods as cooking oil.

“Nobody had expected an 11 percent out-turn,” said HSBC economist Robert Prior-Wandesforde, adding “we very much doubt inflation has peaked.”

“With the general elections fast approaching... the government’s worst inflationary nightmares are coming true,” he said.

The ruling Congress-led coalition desperately wants to tame prices, fearing a voter backlash in national elections due by May 2009. Indian political wisdom holds that when the prices go up, “politicians weep.”

The opposition Hindu nationalist Bharatiya Janata Party (BJP) signalled it would make rising prices, which have hit India’s teeming poor the hardest, a key poll issue and demanded Prime Minister Manmohan Singh’s resignation “on behalf of the nation.”

Finance Minister Palaniappan Chidambaram blamed surging global fuel and other commodity prices, saying “these are difficult times” and promised “to look at stronger measures.”

But analysts said the government had little left in its fiscal arsenal, it has already banned exports of staple foods to boost supplies and check inflation.

The new numbers came as governments around the world battle rising prices. Malaysia Premier Abdullah Ahmad Badawi this week warned of a “real disaster” unless bold steps are taken to tackle the inflation crisis, forecasting a global recession as prices of food and fuel soar.

China is groaning under the worst inflation in a dozen years at 7.7 percent and a hefty fuel price hike Friday could push it higher.

The Indian data incorporated for the first time its fuel price rise announced earlier in June aimed at stemming huge oil company losses.

Inflation is the highest since May 6, 1995, when it stood at 11.11 percent.

“We’re getting into very dangerous territory,” said HDFC economist Abheek Barua. Wandesforde said inflation could “remain in double-digits for at least nine months.” Some economists saw it rising to at least 12 or 13 percent.

“There needs to be significant further tightening,” said Goldman Sachs economist Tushar Poddar.

India’s inflation rate shoots to 13-year peak of 11.05pc

 

[Bushroda]

India’s Growth Outstrips Crops
The Food Chain

By SOMINI SENGUPTA
New York Times
Published: June 22, 2008

Ruth Fremson/The New York Times
Migrant workers thresh wheat in the Indian state of Punjab.
The government raised the regulated price for wheat to reduce imports.

JALANDHAR, India — With the right technology and policies, India could help feed the world. Instead, it can barely feed itself.

Ruth Fremson/The New York Times
Wheat is harvested in Punjab, where water has become a top concern.

India’s supply of arable land is second only to that of the United States, its economy is one of the fastest growing in the world, and its industrial innovation is legendary. But when it comes to agriculture, its output lags far behind potential. For some staples, India must turn to already stretched international markets, exacerbating a global food crisis.

It was not supposed to be this way.

Forty years ago, a giant development effort known as the Green Revolution drove hunger from an India synonymous with famine and want. Now, after a decade of neglect, this country is growing faster than its ability to produce more rice and wheat.

The problem has grown so dire that Prime Minister Manmohan Singh has called for a Second Green Revolution “so that the specter of food shortages is banished from the horizon once again.”

And while Mr. Singh worries about feeding the poor, India’s growing affluent population demands not only more food but also a greater variety.

Today Indian agriculture is a double tragedy. “Both in rice and wheat, India has a large untapped reservoir. It can make a major contribution to the world food crisis,” said M. S. Swaminathan, a plant geneticist who helped bring the Green Revolution to India.

India’s own people are paying as well. Farmers, most subsisting on small, rain-fed plots, are disproportionately poor, and inflation has soared past 11 percent, the highest in 13 years.

Experts blame the agriculture slowdown on a variety of factors.

The Green Revolution introduced high-yielding varieties of rice and wheat, expanded the use of irrigation, pesticides and fertilizers, and transformed the northwestern plains into India’s breadbasket. Between 1968 and 1998, the production of cereals in India more than doubled.

But since the 1980s, the government has not expanded irrigation and access to loans for farmers, or to advance agricultural research. Groundwater has been depleted at alarming rates.

The Peterson Institute for International Economics in Washington says changes in temperature and rain patterns could diminish India’s agricultural output by 30 percent by the 2080s.

Family farms have shrunk in size and quantity, and a few years ago mounting debt began to drive some farmers to suicide. Now many find it more profitable to sell their land to developers of industrial buildings.

Among farmers who stay on their land, many are experimenting with growing high-value fruits and vegetables that prosperous Indians are craving, but there are few refrigerated trucks to transport their produce to modern supermarkets.

A long and inefficient supply chain means that the average farmer receives less than a fifth of the price the consumer pays, a World Bank study found, far less than farmers in, say, Thailand or the United States.

Surinder Singh Chawla knows the system is broken. Mr. Chawla, 62, bore witness to the Green Revolution — and its demise.

Once, his family grew wheat and potatoes on 20 acres. They looked to the sky for rains. They used cow manure for fertilizer. Then came the Mexican semi-dwarf wheat seedlings that the revolution helped introduce to India. Mr. Chawla’s wheat yields soared. A few years later, the same happened with new high-yield rice seeds.

Increasingly prosperous, Mr. Chawla finally bought his first tractor in 1980.

But he has since witnessed with horror the ills the revolution wrought: in a common occurrence here, the water table under his land has sunk by 100 feet over three decades as he and other farmers irrigated their fields.

By the 1980s, government investment in canals fed by rivers had tapered off, and wells became the principal source of irrigation, helped by a shortsighted government policy of free electricity to pump water.

Here in Punjab, more than three-fourths of the districts extract more groundwater than is replenished by nature.

Between 1980 and 2002, the government continued to heavily subsidize fertilizers and food grains for the poor, but reduced its total investment in agriculture. Public spending on farming shrank by roughly a third, according to an analysis of government data by the Center for Policy Alternatives in New Delhi.

Today only 40 percent of Indian farms are irrigated. “When there is no water, there is nothing,” Mr. Chawla said.

And he sees more trouble on the way. The summers are hotter than he remembers. The rains are more fickle. Last summer, he wanted to ease out of growing rice, a water-intensive crop.

The gains of the Green Revolution have begun to ebb in other countries, too, like Indonesia and the Philippines, agriculture experts say. But the implications in India are greater because of its sheer size.

India raised a red flag two years ago about how heavily the appetites of its 1.1 billion people would weigh on world food prices. For the first time in many years, India had to import wheat for its grain stockpile. In two years it bought about 7 million tons.

Today, two staples of the Indian diet are imported in ever-increasing quantities because farmers cannot keep up with growing demand — pulses, like lentils and peas, and vegetable oils, the main sources of protein and calories, respectively, for most Indians.

“India could be a big actor in supplying food to the rest of the world if the existing agricultural productivity gap could be closed,” said Adolfo Brizzi, manager of the South Asia agriculture program at the World Bank in Washington. “When it goes to the market to import, it typically puts pressure on international market prices, and every time India goes for export, it increases the supply and therefore mitigates the price levels.”

Recently, in a village called Udhopur, not far from here, Harmail Singh, 60, wondered aloud how farmers could possibly be expected to grow more grain.

“The cultivable land is shrinking and government policies are not farmer friendly,” he said as he supervised his wheat harvest. “Our next generation is not willing to work in agriculture. They say it is a losing proposition.”

The luckiest farmers make more money selling out to land-hungry mall developers.

Gurmeet Singh Bassi, 33, blessed with a farm on the edges of a booming Punjabi city called Ludhiana, sold off most of his ancestral land. Its value had grown more than fivefold in two years. He made enough to buy land in a more remote part of the state and hire laborers to till it.

Meanwhile, Mr. Chawla’s neighbors migrated to North America. They were happy to lease their land to him, if he was foolish enough to stay and work it, he said. Today, he cultivates more than 100 acres.

Last year, on a small patch of that land, he planted what no one in his village could imagine putting on their plate: baby corn, which he learned was being lapped up by upscale urban Indian restaurants and even sold abroad.

At the time, baby corn brought a better profit than the government’s price for his wheat crop.

This had been the Green Revolution’s other pillar — a fixed government price for grain. A farmer could sell his crop to a private trader, but for many small tillers, it was far easier to approach the nearest government granary, and accept their rate.

For years, those prices remained miserably low, farmers and their advocates complained, and there was little incentive for farmers to invest in their crop. “For farmers,” said Mr. Swaminathan, the plant geneticist, “a remunerative price is the best fertilizer.”

Mr. Swaminathan’s adage proved true this year. After two years of having to import wheat, the government offered farmers a substantially higher price for their grain: farmers not only planted slightly more wheat but also sold much more of their harvest to the state. As a result, by May, the country’s buffer stocks were at record levels.

Nanda Kumar, India’s most senior bureaucrat for food, said the country would not need to buy wheat on the world market this year. That is good news, for India and the world, but how long it will remain the case is unclear.

Will greater demand for food and higher market prices enrich farmers, eventually, encouraging them to stay on their land? There is potential, but other conditions, like India’s inefficient transportation and supply chains, would have to improve too.

How to address these challenges is a matter of debate.

From one quarter comes pressure to introduce genetically modified crops with greater yields; from another come lawsuits to stop it. And from yet another come pleas to mount a greener Green Revolution.

Alexander Evans, author of a recent paper on food prices published by Chatham House, a British research institution, said: “This time around, it needs to be more efficient in its use of water, in its use of energy, in its use of fertilizer and land.”

Mr. Swaminathan wants to dedicate villages to sowing lentils and oilseeds, to meet demand. The World Bank, meanwhile, favors high-value crops, like Mr. Chawla’s baby corn, because they allow farmers to maximize their income from small holdings.

The market may yet help India. Mr. Chawla, for instance, has replaced baby corn with sunflowers, prompted by the high price of sunflower oil. For the same reason, he is also considering planting more wheat.

 

[Bushroda]

INDIA: rising boat sales means a need for marinas
by Jeni Bone
Sail World, Australia
Sat 21 Jun 2008 GMT


'Cochin Harbour' .

India has 7,600km of coastline, warm weather, a booming economy and projections of a 50 per cent below-25 population by 2020. In the next five years, the leisure boating industry will be worth at least US$1 billion, but so far, demand outstrips supply as far as marinas go.

New Delhi: There’s a parking problem looming—on India’s seafront.

In yet another sign of the rich getting richer, an increasing number of people are buying pleasure boats, and according to a yachting association official, have spent Rs400 crore (AUD$10 million) since Mumbai hosted India’s first international boat exhibition last year.

The second boat exhibition was held 28 February to 2 March, and a slew of new boats hit Indian waters. If the trend continues, there likely wouldn’t be adequate space to berth the new acquisitions at the docks of Mumbai, or for that matter, Goa, Kochi (Cochin) or Chennai.

The quayside off Mumbai’s Gateway of India is already clogged with boats of all sizes, uses and types, and people frequently jump from one vessel to another to reach their own. Prior to the boat show, there were around 20-30 pleasure boats here; post-event, there are more than 100.

'It’s the typical Indian mentality…first they buy Porsches, then they think of roads,' says Malav Shroff, publisher of India’s first trade magazine India Boating, and chief executive of Mumbai-based Ocean Blue Marinas and Boat Haven Pvt. Ltd, which also organizes the boat show.

'Now people are buying boats, they will think of building marinas later,' he adds.

There are around 25 dealers today who are engaged in the pleasure-boat and water-sports trade, and companies such as Aquasail Distribution Co. Pvt. Ltd have begun gearing up for the boat show.

'We have a strategy meeting soon, we’ll look at what boats to showcase, and what kind of projects we can handle,' says Aquasail founder-director Shakeel Kudrolli, who sold four yachts, costing between Rs25 lakh and Rs1.5 crore, and 50 dinghies at the inaugural boat show last year, and expects a repeat this year.

Yachting association secretary general Ajay Narang says what was bound to pique further interest in sailing is the Volvo Ocean Race—the premier round-the-globe yachting event held every three years— that has now added India on its route for the next edition in 2009.

'Pleasure sailing is on a growth path,' he says.

Shroff senses a huge business opportunity in the anticipated shortage in docking facilities, and others agree; Kudrolli, for instance, has added building marinas to his service portfolio. To them, Goa, Chennai and Kochi provide the maximum ­opportunity.

Marinas in Goa, with proper infrastructure, can take the load off Mumbai’s shores, says Kudrolli. Mumbai doesn’t have 'good water quality,' he says: the sea is choppy and the tide strong, and dredging can prove prohibitively expensive. Owners of yachts and smaller pleasure boats can dock their vessels in Goa, and plan their vacations around sailing.

Feroze Contractor, managing director of Mumbai-based Ava Marine Services Pvt. Ltd, a 25-year-old company that maintains 35 yachts for clients, says there’s no space at the Gateway of India’s yacht area for the influx of new vessels.

'All of a sudden, all these boats are being imported, we are overflowing, we have run out of space,' says Contractor, who also owns three boats. A proper marina will save space, more vessels can be accommodated, and docking made easier, reducing damage.

He lists other advantages: owners will not have to invest in dinghies to reach their yachts moored in deeper waters, supplies of fuel and water for cleaning boats will be easier, and spillage of oil—now carried in jerry cans—will be history.

Entering Cochin Harbour by Yacht Aragorn - . ..

Aquasail has completed a feasibility study for about six marina projects. The company, which has targeted Kochi, Chennai and Goa, is now waiting for official permission to build its first marina by the year end at any of the three centres.

Ocean Blue Marinas, which has set up a modern marina for the Mumbai boat show, has 15 projects in Goa, Kochi, Chennai and along the coasts of Maharashtra and Gujarat. It’s already in the process of building one in Goa, where Shroff says permission is the easiest to acquire.

Shroff is also looking at new business avenues through marinas; taking a cue from gated communities coming up around golf courses, he has signed a deal with a developer to build a marina in a real estate project in Goa. He declined to name the developer, saying a formal announcement would be made soon.

Shroff says marinas will mushroom all along India’s shoreline, stretching across 7,000km, provided the government relaxes rules on marine environment protection. 'Permissions are the most difficult to get.'

What could probably help is the global attention India is likely to attract during the Volvo Ocean Race.

Kochi has been added as a stopover this year, and the Kerala government will build a 'racing village' across more than 2.5 acres, complete with accommodation for sailors, officials and more than 700 back-up personnel for the seven teams, a food court, theatre for cultural shows, and a nearby guest house complex for an expected 20,000 domestic and international tourists.

About 2,500 diehard fans follow the racing yachts across the world, says yachting association’s Narang and local interest will be significant.

The west coast of India is a traditional seafaring region, and will soon welcome
a modern marina. - . .

Goa is GO!

Another shot in the arm for boating in the region is the interest of business people, including one tycoon from Goa and keen water sports lover, Umaji V Chowgule, MD at Goa Yacht Haven Pvt Ltd.

Chowgule, whose family business interests range from mining to brewing the popular Arlem beer in Goa, is planning to build a 300-boat marina in Sancoale village, in Mormugao Taluka, at the mouth of the Zuari river in Goa with an investment of Rs 100 crore.

Dredging can be prohibitively expensive affair and a controversial issue just like Hotel Leela discovered when the government planned to dredge the river Sal in south Goa.

A sustained agitation by the surrounding villagers of Assolna, Cavelossim, Velim, Betul and Ambelim saw the casino ship, which was to operate on river Sal after the dredging of the river bed was finally towed away to the state capital, Panjim, and the government was forced to drop the controversial plan to dredge the river.

Constructing a marina will involve dredging. And in the absence of marinas, parking can be a nightmare for yacht owners getting environmental and other related permission headaches.

The construction of the marina is set to give Goa’s aim to get high-spending foreign tourists a shot in the arm, which the tourism authorities and ministers have trying to push albeit unsuccessfully over the last few years.

Goa, as of now, as a tourist destination, has been a favourite haunt for back packers and low and middle budget foreign tourists.

The berthing facility for marinas is also likely to create around 1,000 to 2,000 jobs directly or indirectly related to industry.

A marina is a berth’s facility where boats are anchored and are safe from mischief mongers and from the uncertainties of the weather. The marina can also provide facilities like fuel stations, boat servicing, restaurants, bars and other recreational activities.

'If you need to protect the leisure boat in the sea along Mumbai’s coast, you need to construct a marina. We need to construct amenities like marinas so that people can sail and even stay away from the coast for a weekend,' says Robin Walters, chairman of Walcon Marine Ltd, a worldwide expert in marina building, in a report in the Times of India.

And he also allays the fears of environmental degradation due to the dredging operations. 'The concrete piles erected for a marina have adequate gaps for the water to flow beneath.'

 

[Flintlock]

Indians fear repeat of 1990s as inflation soars

4 hours ago

NEW DELHI (AFP) — With inflation shooting to a dizzying 13-year high, Indians are wondering whether they're watching a rerun of an old horror movie they'd rather not see again.

On Friday, inflation raced to 11.05 percent from 8.75 percent a week earlier, sending shares to a 2008 low as investors raced for cover fearing more interest rate hikes that would hit company profits and slow the economy.

The annual rate -- the highest since May 1995 when it stood at 11.11 percent -- also stunned economists as it was more than a full percentage point above market forecasts and spawned headlines like "Price quake hits Indian economy."

"We're getting into very dangerous territory," India's HDFC bank chief economist Abheek Barua told AFP.

The country's leading daily the Times of India noted the situation bore an eerie resemblance to 13 years ago when the current prime minister Manmohan Singh was finance minister in a previous Congress party-led government.

"Will history repeat itself?" the paper asked on the weekend, calling it "Unlucky 13 for Manmohan."

Back in 1995, foreign exchange coffers were brimming, the stock market was barrelling along and economic growth was strong. Companies had embarked on huge investment programmes to expand production capacity.

But the good times stopped when the government was faced with double-digit inflation and elections -- like now -- were less than a year away.

To contain inflation, the central bank jacked up interest rates. Stocks dived and economic growth fell as firms struggled to fund ambitious expansion plans with interest rates at 18 percent -- and Congress lost power.

The current Congress-led government has been desperate to tame inflation with elections due by May 2009, fearing a voter backlash from India's poor masses who have been hardest hit by price rises.

The latest inflation jump, which came after a sharp rise in state-set oil prices, has come on top of a slew of other indicators showing the trading deficit widening to record peaks, the fiscal deficit among the world's highest and economic growth slowing.

Is India headed for "the perfect storm" after five boom years? asked T.N. Ninan, editor of Business Standard in a weekend column.

The phrase comes from the title of a true story about three weather systems colliding, creating a furious storm, and is now used by economists to describe a situation where circumstances combine to produce a financial wipeout.

HSBC economist Robert Prior-Wandesforde said inflation could "remain in double-digits for at least nine months." Some economists, like Ashok Desai, former chief consultant to the finance ministry, see it rising to 15 percent.

"This horse -- inflation -- has bolted. However hard the government slams the door now, the damage is done," said veteran Indian columnist M.J. Akbar.

Several economists forecast a half-point rise in India's leading short-term lending rate, the repo, along with other aggressive credit-tightening measures -- possibly within a few days.

But industry has been warning against over-zealous tightening, especially since much of the inflation comes from forces beyond the government's control -- like global crude prices which have doubled in the past year.

"When we had a long period of economic recession beginning in 1996-97, the trigger was the preoccupation with inflation," noted T.K. Bhaumik, economic advisor to business lobby Assocham

For the moment, the government said it is sticking to its forecast of 8.5 percent growth for this financial year ending in March, down slightly from last year's red-hot 9.0 percent.

But economists have been coming up with forecasts as low as seven percent, still strong by Western standards, but not the double-digit growth economists say is needed to lift hundreds of millions from poverty.

"India's remarkable economic success of the last few years is fading somewhat," Prior-Wandesforde said in a recent client note.

Growth has softened at the same time as inflation has shot up, he said.

"This in turn has left policymakers scratching their heads and markets wondering what happened to India's supposed immunity to failure. Has miracle really turned to myth quite so quickly?" he asked.

AFP: Indians fear repeat of 1990s as inflation soars

 

[Flintlock]

India gets its share of the Lions at Cannes
22 Jun, 2008, 0000 hrs IST,N Shatrujeet, ET Bureau

CANNES: Cannes Lions 2008 is one show that the Indian ad fraternity isn't likely to forget in a hurry. The festival started with a near-cosmic bang for the country when the Lead India campaign for The Times of India won the Direct Grand Prix on the first day itself.

And after having been fed on a hearty diet of Lions all through the week, the Indian delegation awoke on Saturday to the news that the country had claimed its first Integrated Lion in the Titanium & Integrated category — also for JWT’s Lead India campaign. And a silver Lion in the hugely competitive Film category — for O&M’s ‘Gas’ entry for Neo Sports — brought the curtains down on what was a superb streak for India. With the two Lions won on Saturday, the country’s going tally this year is 23, a full 11 Lions more than India managed in the last two editions of the festival.

The Integrated Lion won by Lead India is clearly a crowning moment for JWT. "The Grand Prix and the Integrated Lion evoke a sense of national pride; a historic milestone for the Indian ad industry. India has come of age on the global advertising stage," said JWT India’s chief Colvyn Harris. He also singled out the agency’s creative head Agnello Dias for praise: "For the very talented team at JWT that saw the campaign through, my heartfelt thanks. And especially to Aggie, the architect of the idea. He’s been relentlessly pursuing our dream and vision to improve our creative standards."

This particular Cannes outing has been a good one for the agency — it’s won seven Lions, including a Grand Prix, an Integrated Lion and a gold Lion. “For the last couple of years we have been focused on improving our work and this is endorsement to that intent,” said Harris. What makes JWT’s Lead India achievement all the more admirable is the fact that it was one of the three campaigns from all over the world that ended up winning Integrated Lions — while the Integrated Grand Prix was won McCann San Francisco for its stunning ‘Believe’ campaign for Xbox Halo 3, the other Integrated Lion winner is the redoubtable Crispin Porter + Bogusky (for Burger King’s ‘Whopper Freakout’).

The Titanium Grand Prix was awarded to Projector of Tokyo for its online entry ‘Uniqlock’. The Xbox Halo 3 campaign was also awarded the Film Grand Prix, with Fallon London’s ‘Gorilla’ commercial for Cadbury Dairy Milk also winning the Grand Prix in the category — something unprecedented at Cannes.

The country has won in each and every award category — a feat India has never achieved before.


India gets its share of the Lions at Cannes- Advertising-Services-News By Industry-News-The Economic Times

 

[Mohammed Azizuddin]

^^^^Thats great.!!!.

 

[Flintlock]

^^^^Thats great.!!!.

Yeah. Indian media and advertising can be called world class without any exaggeration.

 

[Flintlock]

Consultants blaze trail through India's red tape maze

20 hours ago

NEW DELHI (AFP) — Consultancies say they are doing big business helping foreigners who want to set up shop in India find their way through its infamous bureaucratic maze.

India's economy has been growing at a strong average nine percent over the past few years. Although that pace is slowing, it drew a record 20 billion dollars in foreign direct investment in the last fiscal year to March 2008, according to official figures.

But it's still a huge headache doing transactions in India and some consultants have spied a big opportunity here -- selling their expertise on how to wheedle and work their way around India's infamous red tape and infrastructure hurdles.

"Companies don't have the time or money for this. They need people like us to help them come to India," Cyrille Lepicier, a consultant who has lived in India for two years, said.

In fact, India's consulting sector has grown into a 2.4-billion-dollar business whose revenues have been rising by 25 percent annually, according to the Consultancy Development Centre, a research group promoted by the Indian government.

His New Delhi-based company LIS Enterprise offers a network of trusted lawyers, real estate brokers and software consultants to French businesses who want a piece of the action in India.

His own experience served as a whirlwind lesson on operating in India. It took him months get through a licensing process that should have just taken weeks.

"In India, anything can happen -- for good or bad," Lepicier said, laughing.

Despite his gruelling troubles getting started, he recommends India to his clients.

"I try not to go into great detail because then the company will say, 'India is not for us.' But I help them understand that there are drawbacks and benefits to India's growth," he said.

In recent years, foreign ownership laws have been sharply relaxed in this once protectionist market. Public-private partnerships are being encouraged to rapidly meet the new economy's transport and infrastructure needs.

And investors interested in certain sectors, including the attractive information technology field, are no longer burdened with cumbersome registration requirements.

Despite such strides, the government still offers a maze of paperwork that can leave investors wondering whether they will get in.

"There is no set procedure that says if you do a, b, and c, you'll get to d," said Rajiv Kumar, director of the Indian Council for Research on International Economic Relations.

"You still need 17 clearances to set up shop in India. This may be well known to Indian entrepreneurs, but it's very difficult for a foreigner to decide that they would still like to come to India," he said.

Paperwork aside, finer details like uninterrupted electricity also continue to dog investors.

"We've seen a lot of clients who get frustrated and go away before things happen. If you understand the environment, you can turn the challenges into advantages," said Atul Dhawan, a partner at consulting firm Deloitte Haskins & Sells.

Dhawan said investors have found innovative solutions to India's problems, such as generating their own electricity to get round frequent power outages and increasing inventories to address transportation hiccups.

Local businesses and the government, too, are joining the consultancy bandwagon to offer services to foreign investors interested in India, particularly smaller enterprises that lack deep pockets to weather India's challenges.

"We'll help steer them to the right place and help them grow faster," said Harsh Pati Singhania, senior vice president of the Federation of Indian Chambers of Commerce and Industry.

AFP: Consultants blaze trail through India's red tape maze

 

[Bushroda]

A passage back to India
Assetz, UK
23rd June 2008

That India's economy has been booming is no longer news. The last few years have seen a country once thought of by some for its colonial past, temples and culture becoming a modern, thriving economy driven by high technology and a relentless enthusiasm for growth.

In the midst of this, as the retail sector has mushroomed and a middle class has emerged, the property market has boomed as well, particularly in the areas of greatest economic development in and around the huge cities.

These are all closely linked, according to the Associated Chambers of Commerce and Industry of India, which predicted in January this year that the 2007 statistics for these two sectors would show 40 to 45 per cent growth through 2007 for each. The body also said this would carry on in 2008.

With this kind of growth, it is small wonder that India is attracting substantial overseas investments. Discussing this, Jaideep Singh, head of the India Desk at Knight Frank stated: "Bombay and Delhi are doing very well here. The places investors from the UK usually go for are Delhi, Bombay, Chandigarh, Bangalore … there are lots of places."

Mr Singh added that this is particularly true of Britain's Indian population. Where once India was a place people left to come to Britain looking for a better life, now those ex-pats and their children are looking back to the subcontinent and its many opportunities.

He stated: "Non-residents who are originally from India buy properties there. A lot of them are now buying in India because of the appreciation there. A lot of them have invested in places like Delhi, Bombay, Chandigarh, Jaipur … all the big cities."

Of course, there may be good - and obvious - reasons why this sector makes up a large part of Britain's investors in India. Shared culture, language, an understanding of ways of doing business and family links are all reasons which may pass by other Britons looking to India, although none of these are necessarily a reason for others to avoid the country. Good research may be needed, however, to close any gaps in knowledge.

In addition to the places mentioned by Mr Singh at Knight Frank, other locations have also been noted as popular with the Anglo-Indian buyers. The Press Trust of India has named other locations such as Gujarat, Gurgaon, Pune and Jaipur as also being centres of attention.

Reporting from its London base, the Press Trust of India said the UK capital was poised to host the "India Homes Fair", run by the Housing Development Finance Corporation, which will run for two days from June 28th and feature 18 major developers. Not only is the investment pouring into India from ex-pats, but the developers, it appears, are making every effort to bring in more.

 

[Neo]

Top Indian airline posts $55m loss​

MUMBAI, June 24: India’s largest private sector airline, Jet Airways, on Tuesday posted a fourth-quarter net loss of 2.21bn rupees ($55m) after being hit by high fuel costs, the company said.

The loss for the quarter ended March 31 was against a net profit of 880 million rupees the previous year. Total income for the quarter rose 37.1 per cent to 27.2 billion rupees.

For the full year ending March, the carrier announced a net loss of 2.53 billion rupees from a net profit of 279.4 million the previous year. Full-year revenues rose 28.1 per cent to 94.81 billion rupees.—AFP

Top Indian airline posts $55m loss -DAWN - Business; June 25, 2008

 

[Neo]

Tata Steel FY2007-8 net profit $2.9bn ​

Friday, June 27, 2008

MUMBAI: Tata Steel, the world’s sixth-largest steelmaker, on Thursday reported a tripling in consolidated net profit for the 2007/08 financial year largely due to its purchase of Corus Group.

Tata Steel, which completed a $13 billion deal to buy Corus in April 2007 in India’s biggest foreign takeover, said consolidated net profit rose to 123.22 billion rupees ($2.9 billion) for the year to March 31 from 41.66 billion in 2006/07, which did not include Corus.

Corus, which contributes the bulk of Tata Steel’s 28 million tonne annual capacity, is expected to drive earnings in coming quarters as it is able to raise prices to compensate for higher raw material costs of iron ore and coal, while the Indian government has pressed steelmakers to hold domestic prices.

Global steel prices have risen by almost a half this year and are expected to extend gains in the second half on 2008, boosting profits of steelmakers, as raw material costs continue to climb and demand shows little sign of abating, with China’s focus to curb exports keeping supply tight.

Tata Steel’s consolidated net sales for the fiscal year rose more than five times to 1,315.4 billion rupees.

Tata Steel has just 5 million tonnes of its total capacity in India, and the consolidated results include Corus and its other operations in Southeast Asia.

On a standalone basis, net profit for the year rose to 46.87 billion rupees, from 42.22 billion in the year to March 2007.

Tata Steel said it produced 4.9 million tonnes of steel from its India plant during 2007/08 and sold 4.8 million tonnes.

Tata Steel FY2007-8 net profit $2.9bn

 

[Flintlock]

India, Japan to sign currency swap deal on June 29

29 Jun, 2008, 0127 hrs IST, ET Bureau
NEW DELHI: India and Japan will ink a blockbuster currency swap deal on Sunday. The bilateral swap arrangement (BSA), scheduled to be signed at Basel in Switzerland on June 29, would be effective immediately, sources told SundayET.

The BSA will be signed by Bank of Japan’s governor Masaaki Shirakawa and Reserve Bank of India governor Y V Reddy.

SundayET was the first to report on June 17, 2007, that India was eyeing its first-ever currency swap deal with Japan. Japan, however, has swap agreements with countries such as China, South Korea and Thailand.

The swap arrangement will enable both the countries to swap yen and rupees against US dollar up to $3 billion. That means, Japan will accept rupees and give US dollars to India if the need arises and India too will accept yen against dollars. However, drawing beyond 20% of the stipulated amount ($3 billion) would require India to have an IMF (International Monetary Fund)-support programme.

It was learnt that negotiations ran into rough weather once Japan insisted that such a swap arrangement could be possible only if both countries had IMF-support programmes. Significantly, IMF has no presence in India for several years now.

Finally, India prevailed upon Japan to agree on a relaxation on the matter and it was decided that up to 20% of the maximum amount of drawing could be disbursed even without having an IMF-support programme.

"As the arrangement is just for $3 billion and India has over $300 billion foreign exchange reserves, it is more a milestone in mutual co-operation between the two countries than a tool to address liquidity difficulties. However, such an arrangement will help concerned nations to have stability in financial market," sources said.

In fact, Japan’s then prime minister Shinzo Abe, during his visit to India in August 2007, announced that India and Japan would strike a currency swap agreement to address the short-term liquidity crunch.

India, Japan to sign currency swap deal on June 29- Economy-The Sunday ET-Features-The Economic Times

 

[nitesh]

The real reason why stock markets are crashing
The real reason why stock markets are crashing

 

[Neo]

India's Exports Increase at Slowest Pace in 14 Months ​

By Kartik Goyal

July 1 (Bloomberg) -- India's exports grew at the slowest pace in 14 months in May as weakening global expansion hurt shipments of clothes, steel and electronic goods.

Overseas sales rose 13 percent from a year earlier to $13.8 billion, slower than April's 31.5 percent gain, the government said in a statement in New Delhi today. Imports increased 27 percent to $24.5 billion, widening the trade deficit to a record $10.76 billion.

Shipments are likely to slow this year as the fastest price gains in more than 13 years prompted Prime Minister Manmohan Singh to ban shipments of some food products and other commodities to contain inflation. A slowdown in the U.S. and other developed countries is hurting exports across the region.

``The biggest challenge to the external sector this year is slowing global demand and rising oil prices,'' said Sonal Varma, a Mumbai-based economist at Lehman Brothers Inc. ``We expect export growth to moderate.''

Global trade growth is likely to drop in 2008 after slowing to 5.5 percent in 2007 due to weaker demand in Europe and Japan, expectations of a recession in the U.S. and faster inflation, according to the World Trade Organization.

South Korea's export growth cooled in June to 17 percent from a year earlier, less than the 26.7 percent gain in the previous month, according to figures released today. Hong Kong's overseas sales expanded at a slower pace of 10.3 percent in May.

U.S. Slowdown

The share of the U.S. in India's total exports declined to 13.3 percent in the ten months to January, compared with 15.1 percent in the year-ago period, according to the latest breakdown of overseas sales released by the central bank. India gives a more detailed analysis of exports five months after releasing initial data.

Shipments to European Union and Asian developing countries accelerated while exports to OPEC and Latin American nations moderated, the central bank said.

India has over the past three months banned the export of pulses, wheat, rice, cement and some steel products to contain inflation, that accelerated to 11.42 percent in the week ended June 14.

Exports of steel items declined 2.1 percent in the ten months to January, compared with a 51.4 percent gain in the year-ago period, the central bank said in a report. Overseas sales of electronic goods grew at a slower pace of 6.4 percent, compared with 34.9 percent a year-ago.

Cost Competitiveness

Trade Minister Kamal Nath last week said he's confident of meeting the $200 billion exports target for the current fiscal year that started April 1. Better cost competitiveness and the rupee's depreciation are expected to help exporters, he said.

India's rupee declined for a third day today on concern that rising oil prices will increase demand for dollars and losses in the benchmark stock index will keep global funds away from local shares. The rupee fell 9.2 percent this year to 43.405 a dollar as of 12:50 p.m. in Mumbai today, the third- worst performance among the 10 most-traded Asian currencies.

``The rupee will remain under pressure in the near-term,'' said Shubhada M. Rao, chief economist at YES Bank Ltd. in Mumbai. ``The Reserve Bank may not like a depreciating trend and we expect the currency to start appreciating in the later part of the year.''

India plans to withdraw tax incentives it had announced last year to help exporters tide over the impact of a more than 10 percent gain in the rupee, the Financial Express reported today, citing India's Commerce Secretary G. K. Pillai.

Export Promotion

To help boost overseas sales, the government plans to focus on promoting exports to 10 countries including Mongolia, Bosnia- Herzegovina, Albania, Macedonia, Croatia, Honduras, Djibouti, Sudan, Ghana and Colombia, Nath said on April 11.

Trade Minister Nath has set a target of more than tripling India's share of world trade to 5 percent by the year 2020 from the current 1.5 percent.

India's oil imports in May rose 50.8 percent to $8.46 billion as Indian refiners paid more for import of crude oil imports. India relies on imports of overseas crude oil to meet its three-quarters of its energy needs. Non-oil imports gained 17.4 percent to $16.08 billion.

To contact the reporter on this story: Kartik Goyal in New Delhi at kgoyal@bloomberg.net.

Bloomberg.com: India & Pakistan