Indian Economy - News & Updates - Archive

[Bushroda]

Industrial output index echoes growth story
Sangeeta Singh and Sanjiv Shankaran
LiveMint.com, Wall Street Journal

Powered by a surge in manufacturing, production rose 13.6% in April, exceeding expectations

New Delhi: Powered by manufacturing, industrial production in the country rose by 13.6% in the first month of the current fiscal year.

While manufacturing grew at 15.1%, the mining and electricity sectors grew by 3.4% and 8.7%, respectively, says a release issued by the Central Statistical Organization of the ministry of statistics and programme implementation. The revised annual industrial growth for 2006-07 has been pegged at 11.5%, while for manufacturing it is 12.5%.

On the face of it, the data suggests that the credit squeeze imposed by the Reserve Bank of India (RBI) is yet to impact the growth momentum in the economy.

However, as economists point out, the current surge is being led by sectors, financing their investments either through domestic offerings of equity and debt together with external commercial borrowings (ECBs), rather than taking recourse to bank credit.

“Consumption and investment demand are independent. Most of the liquidity is getting absorbed in the retail sector. Investment demand is being satiated by going outside the system (through equity or ECBs),” says Jammu and Kashmir Bank Ltd‘s chairman and chief executive officer Haseeb Drabu.

The use-based classification data released along with the industrial production data reveals a double-digit surge in production of capital goods by 17.7%, intermediates such as steel by 12.6% and consumer non-durables such as cosmetics and services by 21.9%.

However, growth in production of consumer durables such as automobiles and television sets, which are directly affected by the rising cost of credit, rose by 5.3% after averaging 9.1% in 2006-07.

Some believe that the data also reflects growing consumer confidence.

“The growth in consumer non-durables is an indicator of how the average household feels about the future; it’s not a bad measure of consumer confidence. Non-durables reflect a change in lifestyles, when it comes to capital expenditure,” said Pronab Sen, India’s chief statistician.

Further, he suggests that the surge in production capacities, reflected in the double-digit growth in capital goods and intermediates, is beginning to catch up on demand in the economy. “Capacities started a couple of years earlier may have started coming on stream; therefore, overheating may not become a concern,” he reasons.

The continued surge in industrial production has triggered fears in some quarters that the central bank would effect another round of interest rate hikes. So far, it has raised its rates nine times since October 2004 and hiked the cash reserve ratio three times since December 2006, as a measure to curb excess liquidity. Consequently, commercial banks have increased their lending rates at 250 basis points since December 2006.

Currently, credit growth has slowed to 26%, compared with 30% at the end of May last year. The inflation rate as measured by the wholesale price index, too, moderated to 4.85% for the week ended 26 May.

According to Shashank Bhide, senior research counsellor, National Council for Applied Economic Research, the data is largely a reflection of more than 10% industrial growth in the last quarter of 2006-07.

“I believe this momentum can be sustained,” said Bhide. “While the high growth in capital goods sector is a reflection of increased investments, in the consumer goods sector it is due to increased domestic demand as also increased export activities.”

Sen, who says he believes bank credit has never been a major source of term finance, maintains that the hike in interest rates would not trigger a significant slowdown in capital goods. RBI data shows that ECBs in 2006-07 were largely on account of investment demand.
In the April-December 2006 period, ECB inflows were $9.1 billion (Rs37,310 crore), higher than inflows of $2.72 billion for all of 2005-06.

Again, according to Prime Database, a New Delhi-based independent research outfit on primary markets, aggregate borrowing (including banks and PSUs) through private placement in 2006-07 rose by 13% to Rs92,355 crore. In the same period, equity offerings mopped up Rs24,993 crore, the highest ever in the Indian capital market.

 

[Bushroda]

One PC for every 50 Indians
CORPORATE BUREAU
Posted online: Wednesday, June 13, 2007 at 0051 hours IST

NEW DELHI, JUN 12: The personal computer (PC) market in India witnessed 20% growth in unit shipments in fiscal 2006-07, according to IDC. With this, the total installed base of PCs in India grew to more than 22 million, which means a PC for every 50 Indians.

At the year-end, HP retained the top spot with a market share of 21.2%, followed by HCL at 13.5% and Lenovo at 9.5%, in terms of unit shipments of both desktops and notebooks. In commercial desktop PC shipments, HCL led the market, followed by HP and Lenovo, whereas in consumer desktop PC shipments, HP was the leader, followed by HCL and Zenith.

In terms of total desktop PC shipments also HP led the market, with HCL and Lenovo coming at second and third spots, respectively. In the notebook PC market, HP retained the top spot with a market share of 39.6%. Lenovo came in at the second spot with 17.6% market share and Toshiba climbed up to take the third spot replacing Dell.

Overall client the installed base of PCs registered a CAGR of 32.3% up from 9.5 million in 2003 to cross 22 million in 2006, thereby more than doubling in a three-year time frame.

“Post liberalisation blues have given way to a robust economy that is fuelling increasing spends on IT infrastructure by corporates and government, and on PCs by the home and education segments. PCs form the backbone of IT adoption,” said Kapil Dev Singh, country manager, IDC India.

“However, we still have miles to go as a country to evolve an ecosystem that would help to take this trend to the next level, so that the benefits of computerisation reach to the masses,” he added.

 

[Bushroda]

Designing Dharavi: Improving Life in Mumbai's Largest Slum
WorldChanging Team
June 12, 2007 9:53 AM
Contributed by guest writer, Augusta Dwyer

It is difficult not to be daunted by Dharavi. Mumbai’s largest slum – indeed the largest slum in all of Asia – many taxi drivers outside the train station at Mahim junction don’t even want to go there. Finally one agrees, negotiating the narrow streets around the station then onto a highway crossing the noisome mangrove swamp lining the Mithi River, its name, sweet, an insult to its present state.

When he was a boy, Santosh Sabat could see the train station from his family’s shanty house, and there was open space all around. People would put down stones or lengths of lumber to cross its streams and wetlands.

By now, however, 600,000 people live in Dharavi. It is packed with all kinds of shops and small businesses, 62 pongal houses, where legions of young men pay a few rupees a month to sleep, Mumbai’s largest recycling industry, which employs 5000 workers, leatherworks, potteries, and the infernal little place I see when I first emerge at T Junction, a murky room filled with a huge mound of discarded shoes and sandals, where three women toil in the suffocating heat, franticly rubbing and cleaning them for resale. In the dual-front attack of sun and desolation on this mean little lane, their ill-paid work -- and the life that must call for this -- seems as bleak as any could possibly be.

Santosh, 37, has lived here all his life; he brought his wife here from Orissa, and his two sons, Sagar, 11, and Samir, 7, were born here. Four years ago, after losing his job at a textile factory, he purchased a cable installation business. He earns good money by Mumbai standards, between 10,000 and 12,000 rupees a month, but not enough to find better lodging than what he has now, a two-storey structure typical of many Dharavi slum houses, plastered brick on the first floor and corrugated metal sheeting forming the walls and roof of the second.

But he has always had an interest in social work, he says, “ever since I was a child, so that’s how, when people were talking about National Slum Dwellers Federation, I joined. This was in 1991,” he adds.

By now Santosh is on the committee of a local Federation society representing160 families, and part of a movement of the poor with two million members across India. “I saw the work being done by the NSDF and that’s why I thought that, by joining, our lives would improve,” he says simply.

Improvement is also on the mind of the state government these days. India’s economy is growing at a pace rivalling that of China, and Mumbai, India’s largest city, is at its forefront, seeing rapid growth in its financial, banking and IT sectors. As the entire metropolis expands ever further north, Dharavi, a district once on the city outskirts, now lies at its very heart.

Originally a village of Kolis, or fisher folk, living along the banks of Mahim Creek, decades of migration and forced relocations of slum dwellers from other parts of the city have filled in the swampy land and carpeted it with a map of contiguous settlements, called nagars. Dharavi, as journalist Kalpana Sharma wrote, “is today an amazing mosaic of villages and townships from all over India.”

Santosh’s home now sits within a dense maze of lanes and alleys, down a corridor no more than two feet wide, a small flag-stoned space with lime-green walls, lit with a fluorescent light and filled with women and children. His wife Geetangeli wastes no time in switching on a large, square fan and sending Sagar, just back from school and still in his uniform, out for cold bottles of Coke.

The fan seems to take up an absurd amount of space, as does the large plastic barrel of water. A bunk runs across one wall, wedged beneath a staircase and a shelf loaded with electronics: a television, a sound system and a shrine lit with multi-colored fairy lights. While it has an upstairs loft, this has been lent to friends, another family of four, which means eight people make do in these two little rooms.

With spaces the size of a phone booth for cooking and for bathing, I can picture how Geetanjeli’s life in here is one of continually manoeuvring herself around bulky objects, children and visitors. Extending an arm through the doorway, she can easily touch the wall of the next building. The tap outside works for two hours a day, and the public toilet, while not far, is noxious and ******. Garbage is simply thrown into any available open space outside, mixing its ******* odours with that of the running sewers. But worst were last year’s monsoon floods, and she points to Samir. “The sewage water came in higher than his head,” she says.

Yet for all its chaotic tangle of urban poverty, Dharavi is a slum with major real estate value. Thanks to Mumbai’s financial vibrancy, it now lies next to one of its most sought-after commercial districts, the Bhandra-Kurla Complex, and there are big plans to “rehabilitate” it.

The state government wants private developers to do that, the carrot being the so-called sales options: for every square metre of housing built and given to slum dwellers like the Sabat family, they can construct 1.33 square metres of luxury apartments to sell on Mumbai’s booming open market.

The city’s Slum Rehabilitation Authority has stipulated that apartments for slum dwellers need only be 225 square feet in size, with walls ten feet high. And these may be slotted like rabbit cages into multi-story blocks, like those that dot the entire city, usually surrounded by the shacks of slum dwellers who provide an array of cheap services to their more affluent neighbours.

But while these kinds of buildings are fine for the wealthy, says Sundar Burra, “they are a disaster for the poor. They cannot afford to maintain elevators, or the cleaning, or the electricity needed to pump the water so high.” Because of the expense and distance from work, it is not unusual for some to sell out and move back to the street.

Sundar works at the Society for the Promotion of Area Resource Centres, better known as SPARC, the NGO that supports the efforts of the NSDF and its sister movement, Mahila Milan, to obtain better housing for their many members. Along with their struggle for tenure rights, members of both organizations have learned to formulate their own strategies for achieving housing that meets their various needs. It was the women pavement dwellers of Mahila Milan who first started designing their own flats and buildings, as the city threatened to demolish their pavement huts.

Laxmi Naidu, who lived with her family on a sidewalk in Nagpada for 22 years, recalls how she and other women in her community first came up with the design, actually measuring it out with their saris. “In each house on the pavement, there are two or three generations living,” she says, “so when we knew we were going to be shifted, we asked, ‘how can we stay together?’ We didn’t have enough space for all the people in 225 square feet, so we decided to have another floor.”

Mahila Milan even held a street exhibit of this design, inviting members of government, local press and slum dwellers from all over the city to attend. Soon, the NSDF was holding such exhibitions in cities all over India.

Because of their 14-foot height and single tall window, the Mahila Milan flats recently constructed in the district of Mankhurd are well ventilated, bright, and less dependent on electric fans for cooling. Their loft spaces add extra room without seeming crowded, and include small spaces for bathing. But toilets are placed at the end of each of the building’s four floors, and kept clean by the two or three families who use each one.

The NSDF has put up three buildings in Dharavi as well. These also include the loft idea, as well as wide outer corridors, but no running water or toilets inside the apartments, decisions made by the slum dwellers themselves. They are wearily used to both electricity and water shortages, and wanted to avoid having to climb several sets of stairs with heavy cans of water. And the corridors allow families to sit outside their flats and socialize with neighbours. In a country where inter-religious strife has been deadly, maintaining good relations between Muslim and Hindu neighbours is crucial.

Recently, students at the Komla Rajevi Vidananaya Institute for Architecture have also become interested in Dharavi. They began their project by doing something developers never do: talking to the people who are going to be re-housed. The result is a slew of innovative ideas, combining living and work spaces, and even including environmental benefits like water harvesting, that challenge the Goliath of high-density housing.

One student has created a multi-storey building with wide outer corridors connected by ramps, what KRVIA professor Ninad Pandit calls “spaceways in the sky,” to replicate the street. “There are certain parts of Dharavi where various sorts of related economic activity goes on in several houses,” he goes on, “rather than just one house.” So the apartments can be modified, allowing neighbours sharing a particular manufacturing process to open joining walls on one floor, while maintaining a secluded living space on another. Communal open space on various levels allows women to preserve an afternoon tradition, getting together to do embroidering.

Another design lifts the building right up over an open plaza, high enough so that, as Ninad puts it, “you don’t feel you are under a stilted building.” Along with space for socializing and children’s games – cricket being a bit of an obsession in Mumbai -- the plaza could also be used for another prevalent Dharavi trade, drying poppadums.

In an area called Social Nagar, scores of khumbars, or potters, ply their craft, and one of the KRVIA’s most interesting designs focuses on them. This student looked at the existing houses, with their living space at one end and a place to make the pots at the other. The designer “took the psychology of the long house,” says Ninad, “and put these long strips throughout the building.” These are then staggered, so that each has an additional open terrace on which to make pots, which are fired in a community kiln. Situated near a busy rail station, commercial premises would take up ground floors, but an inner ramp departs from the sidewalk to weave through the complex itself to more micro-business units. “So it leads you somewhere,” said Ninad, “it’s not a dead end. People will actually use it.”

In an area called Social Nagar, scores of khumbars, or potters, ply their craft, and one of the KRVIA’s most interesting designs focuses on them. This student looked at the existing houses, with their living space at one end and a place to make the pots at the other. The designer “took the psychology of the long house,” says Ninad, “and put these long strips throughout the building.” These are then staggered, so that each has an additional open terrace on which to make pots, which are fired in a community kiln. Situated near a busy rail station, commercial premises would take up ground floors, but an inner ramp departs from the sidewalk to weave through the complex itself to more micro-business units. “So it leads you somewhere,” said Ninad, “it’s not a dead end. People will actually use it.”

But it is difficult to keep him off the politics of the development. So far, he says, there is no indication of how increased traffic, the need for more schools and clinics, flooding problems and other complications will be dealt with. Ostensibly, they are to be left on the shoulders of developers. Tenders will be decided based on how much “bonus” – the percentage of floor-space sales profit -- the developer will hand back to the government. The question for the government, he remonstrates, “is why are you looking at it as a tool to earn money? You’ve got 60 per cent of the population living on six to eight percent of your land and you still want to make money off them?”

While the KRVIA exhibited the student designs to the public last month, authorities have yet to decide on whether their smart ideas will be incorporated into Dharavi’s future.
Yet the template is there, and it works. As the National Slum Dwellers Federation has repeatedly proven, housing the poor works best, costs less and is better for the environment, when the poor themselves have a say in what is being built.

 

[Bushroda]

Hydrologist to develop drinking water sources in rural India

A University of Rhode Island researcher has been awarded a $190,000 grant from the World Bank to develop a system to provide villagers in rural India with safe, affordable and reliable drinking water.

Thomas Boving, associate professor of geosciences, is one of just 22 grant winners from 13 countries selected from a record pool of 2,900 applicants for a total of $4 million in funding. The World Bank’s Global Development Marketplace and the Bill and Melinda Gates Foundation are the funding agencies.

The URI scientist’s project will use a low-cost, easy to replicate approach of treating polluted surface water with riverbank filtration wells. A pilot site will be established in Karnataka, India, where small private sector providers will be shown how to build a business around the design, installation and operation of the filtration systems. The project expects to provide access to safe drinking water to more than 5,000 people.

“The Kali River in southern India is very polluted, so if the locals rely on water from the river to drink, they get sick,” said Boving, who lives in Hope Valley, R.I. “If they rely on existing wells for their water, they typically must carry the water long distances and the wells often go dry. Riverbank filtration wells, however, make use of the natural filtration capacity of the sediments underlaying the river and produce water without contaminants.”

In India, water-borne disease accounts for 21 percent of all communicable diseases and results in 1,600 de aths each day. To sustain its rapidly expanding economy, India will need to improve its drinking water treatment and distribution infrastructure.

Beginning next fall, Boving will survey local residents about water needs and related issues, as well as track infection rates from water-borne diseases. He will then identify several potential sites at which to install riverbank filtration wells.

“We’ll drill the wells near the river, and the pump will force the water to flow into the well through natural sediments that will clean it of pathogens,” Boving explained. “To ensure that the water is cleaned thoroughly, it should take about 20 days for the water to travel from the river to the well. The exact location of the wells – how far away from the river to put them -- will be determined by the geology.”

According to Boving, riverbank filtration wells are proven systems that are more reliable and user friendly than other available treatment options because of their simplicity and because they do not rely on chemicals. They also can be used adjacent to almost any river.

The two-year project is designed to create jobs and self-sustaining businesses. Boving and a local collaborator will train local residents to operate the wells and monitor them for pathogens. The challenge, he said, will be to impose a Western business model on an Indian culture.

The World Bank project builds on a related effort Boving and his partners are currently undertaking in western Jordan, which is funded by a NATO grant. There they are using a similar approach, though the water issues in the dry Middle East are quite different from that of monsoon-dominated southern India.

“What is really needed in both of these locations -- and in many, many other places in the developing world in coming decades -- is new sources of clean drinking water,” Boving said. “Clean water has to be cheap, and it has to be easy for the people to access, or it won’t work. There also must be local control, and the water supply must be sustainable. With the World Bank funding, we aim to provide the people in our study area with exactly that.”

 

[Neo]

June 13, 2007
India eyes 4.4m tons rice export in 2007

MUMBAI, June 12: India is likely to export 4.4 million tons of rice in 2007, almost the same as a year ago, the United Nation's Food and Agricultural Organisation (FAO) said in its latest outlook.

The report said Indian rice export prices were expected to increase with the state-run grain procurement agency Food Corp. of India (FCI) setting a higher rate for purchases from farmers and a supply squeeze in aromatic basmati rice.

The rise of the rupee against the dollar will also make Indian exports dearer, the report said.

The Indian rupee has strengthened against the dollar to reach a nine-year peak of 40.28 on May 28. The rupee was 40.702-712 per dollar on Tuesday. India's Commission for Agricultural Costs & Prices has recommended a minimum support price of Rs675 for 100 kg of grade 'A' paddy (un-milled rice) and Rs645 for 100 kg of common varieties during the 2007-08 (July-June) season.

This is an increase of Rs65 per 100 kg over the price offered in the 2006-07 procurement season.

The report said global basmati rice prices are likely to rise, reflecting supply shortages of the aromatic variety in India and Pakistan.

“There's more demand this time as many buyers from the Middle East are opting for Indian basmati instead of basmati from Pakistan, hence we are facing a shortage,” said a senior executive with Amritsar-based Lal Qilla Rice.

“The prices of traditional Indian basmati rice are ruling at $1,400 per ton compared with $700 a year-ago,” he added.

India produced 91.05m tons of rice during the 2006-07 crop year compared with 91.79 million tons in the previous year, as per the latest government estimates.

The report said strong import demand is expected to drive international trade in rice to a new high of 30.2 million tons in 2007, largely spurred by a return of Indonesia as a major rice importer. FAO has revised India's wheat imports in 2007-08 to 3 million tons, up one million tons over its May forecast, but much lower than 6.5 million tons of imports a year ago.

But FAO said the forecast for India's wheat purchases were tentative as much would depend on the final outcome of this year's harvest and price developments in the domestic market.

India's state-run State Trading Corp. this month scrapped a tender for one million tons of wheat imports on high prices.

FCI has procured 10.79 million tons of wheat as on June 11, compared with a total procurement of 9.23 million tons last year.

India's wheat production for 2006-07 is seen at 73.70m tons compared with 69.35 million tons, as per latest government data.—Reuters

http://www.dawn.com/2007/06/13/ebr18.htm

 

[Bushroda]

Organised food retailing can increase rural income, cut inflation: CRISIL
13 June 2007

At an estimated Rs12.8 trillion in 2006, India's retailing sector makes up close to 40 per cent of the country's GDP. Of this, food and grocery (F&G) items account for a significant 74 per cent of total retail sales across both, the organised and unorganised sectors.

Only 1 per cent of the food items retailed in India flow through the organised retail channel.

An analysis done by CRISIL Research reveals that a robust, widespread and deeply penetrated organised food retailing network in India would address some key concerns facing the Indian economy today viz. limited rural prosperity and high food prices. Reduced supply chain costs arising out of lower wastage and storage costs can be shared between producers and consumers of food items as higher farm incomes and lower food prices.

The organised retail sector makes investments to reduce inefficiencies of the traditional multi-level F&G supply chain. These inefficiencies often arise out of restrictive procurement practices, and multi level storage and commissions. This pushes up the final retail prices paid by the Indian consumer to 2.6 times the prices paid to the Indian farmer. Better supply chain management implies disintermediation, an associated reduction in commissions and a far lower wastage of goods by enhancing transportation and storage facilities.

CRISIL Research has estimated the total avoidable supply chain costs in the F&G vertical in India at about Rs.1 trillion.

About 57 per cent of this is due to avoidable wastage and

About 43 per cent is due to avoidable costs of storage and commissions.
Consequently, the average realisation of the farmer is only 35-40 per cent of the retail price. This is very low as compared with farm realisations of 60-65 per cent of the retail price in countries like the US, which have an organised retail penetration of about 80 per cent.

Sudhir Nair, head, CRISIL Research, says "If one-third of the above-mentioned savings (around Rs 335 billion) are passed on to the consumer in the form of lower costs, it amounts to more than 3.5 per cent of the country's spend on food items (Rs9,510 billion); this can play a significant role in lowering food inflation."

Strengthening the case for organised food retailing in the country, Nair further emphasises, "Realisations earned by farmers on food grains and fresh grocery, at current levels, are estimated at around Rs1.8 trillion. Assuming this segment shifts entirely to organised retailing, and two thirds of the savings from reduced supply chain inefficiencies are passed on to the farmer, farm incomes could grow by more than 37 per cent to Rs2.47 trillion. With 60 per cent of India's population employed in agriculture, this is very significant."

Further if farmers spend around 80 per cent of this incremental income, an incremental spending of upto Rs536 billion would get added to the Indian economy. This is equivalent to nearly 1.7 per cent of India's GDP.

 

[Bushroda]

Indian worker's Polish love intensifies
IANS[ WEDNESDAY, JUNE 13, 2007 06:30:56 PM]

NEW DELHI: Poland could soon witness a large influx of Indian workers, particularly in the construction sector, after the two countries sign a memorandum of understanding (MoU) to streamline labour migration to the East European country.

This was decided at a meeting held here Wednesday between Minister for Overseas Indian Affairs Vayalar Ravi and Poland's Minister for Lbaour and Social Policy Anna Kalata.

Addressing a press conference after the meeting, Ravi said, "We proposed to sign an MoU with Poland and a note is being circulated in this regard... The MoU will streamline migration of labour from India to Poland to work in the construction, agriculture and service sectors in that country."

As of now, there are only around 3,000 Indians employed across various sectors in Poland but this number is expected to get significant boost once the MoU is signed. The Polish minister has taken the initiative to promote recruitment of Indian workers in her country.

Stating that her country is facing an acute labour shortage, Kalata said, "We have noticed severe discrepancies in our labour market. Around 800,000 Polish workers have left to work in other countries in the EU (European Union)."

"The need for labour is more so in the construction sector as we are going to build a number of stadiums for the Euro 2012 football championship," the visiting minister added.

Poland, along with Ukraine, will play joint hosts to football's second biggest event in 2012.

She also said that Poland is on a quick growth path and hence there is an urgent need for skilled manpower. "In the first quarter of this year, our economy grew by 7.4 percent."

The proposed MoU will also facilitate Indian companies to invest or get into partnership with companies in Poland in various sectors.

To a question as to whether Poland was seeking investment especially from Indian IT companies, an official from the Polish minister's delegation said, "IT is one of the fastest growing sectors in Poland. We don't have to especially invite them (Indian IT companies). They very well know where the green is."

To a question as to whether India will be signing a social security agreement with Poland similar to the one that was signed with Belgium last year, Ravi said, "This will be an MoU for streamlining labour migration, but yes, we can go on and sign a social security agreement later."

 

[Bushroda]

Faces Cosmetics sets sights on Indian market
Charlotte Eyre
Cosmetics Design, France

6/12/2007 - Aiming to tap into India's booming cosmetics and personal products market, Canadian firm Faces Cosmetics plans to set up a series of stores across the country.

The company has signed a memorandum of understanding with an Indian personal care products manufacturer, and it expects to conclude the terms of investment by the end of the month, a company report states.

Faces Cosmetics did not reveal the name of the partner. Initially, Faces Cosmetics expects to open company-owned stores, soon followed by an aggressive rollout of franchised stores. These will sell a range of cosmetic, skin care and anti-aging products, the report stated.

A recent statement from the company's chairman and chief executive, Ramesh Jolly, said that as India is the fourth largest and second fastest growing major economy in the world, it is therefore "a key market for Faces Cosmetics future expansions plans".

Faces Cosmetics produces color cosmetics and anti-aging products that are targeted at women of varying skin tones and ethnicity, as well as at a range of age groups, from teenagers to more mature women.

The company's product portfolio also includes aesthetic treatments such as facials, manicures and waxing.

It mainly operates a franchise model, where their different product categories are sold through 56 retail outlets in the US, Ireland, Canada and Mexico.

In January 2007, the group announced the sale of a master franchise in the Middle East, covering the United Arab Emirates, Saudi Arabia, Kuwait, Oman, Qatar, Bahrain, and Yemen. It also plans to open franchises in Eastern Europe, starting with a store in Prishtina, Kosovo.

India, along with China, is one of Asia's largest cosmetics markets, and has had growth of about 60 percent since the late 1990s, a recent Euromonitor report states.

Euromonitor experts believe that the country's current low per capita spending on personal products offers impressive growth opportunities, as Indian men and women become more interested in personal care and grooming products.

Several cosmetic and personal product companies have recently harnessed this growing consumer-spending power, and multi-national companies such as Estee Lauder, Unilever and Colgate-Palmolive have all invested in the country.

 

[Bushroda]

Indian trade looks for new sources for diamonds
DailyTimes, Pakistan

NEW DELHI: India, the world’s largest diamond importer, has started buying diamonds directly from Russia and wants to source from other producing nations as well to secure long-term supplies and save on purchase costs.

Following a relaxation in Russian export rules earlier this year, Indian importers have been ordering about $10 to $12 million of diamonds each month directly from Russia.

India buys around $8 billion worth of diamonds annually, almost all of which are exported after polishing and cutting. Most of the diamonds are bought directly from companies such as De Beers and Rio Tinto.

“Imports of diamond have started from Russia. There are two to three importers who are buying,” Praveen Shankar Pandya, convenor for rough sourcing at the Gems and Jewellery Export Promotion Council (GJEPC), told Reuters.

“We are ready to buy up to $1 billion worth of diamonds annually from Russia,” he said, adding the purchases were being made from state-owned Russian firms such as Alrosa and Gokhran.

Russia accounts for more than 20 percent of global diamond production, most of which is mined in Siberia.

Developing direct sales from Russia was important to the industry as De Beers, the main supplier of diamonds to India, has agreed that it will phase out purchases from Alrosa by 2009.

In January, Russia allowed unlimited exports of platinum group metals, uncut diamonds and other precious metals and ores, subject to a licence from the economy ministry, replacing a system of long-term export quotas that had made trade difficult.

India also abolished a 5 percent duty on imports of rough and polished diamonds in the government budget in February.

“The contracts with Russia are our first. We are also trying with African countries like Botswana, Angola and South Africa,” Sanjay Kothari, chairman of GJEPC, said.

He said that the Indian industry had formed a company called Diamonds India Limited a year ago with the aim of buying directly from producing countries. Industry officials said buying directly was cheaper by 4 to 5 percent than buying from a trading house.

Bakul R Mehta, a convenor of the GJEPC, said buying from producers would also help secure long-term supplies.

An Indian government decision to allow advance payment for buying of diamonds had helped the purchases from Russia.

“That is how it has taken off. We have to now make it grow.” One hurdle confronting the Indian industry is that South Africa is considering a tax on diamond exports to encourage the local processing industry, although the GJEPC thought that would not be too disruptive.

“It is not only the cost, but the marketing ability is also important. It has taken us 30 to 40 years to develop the market,” Kothari said.

Mehta said the move to direct sourcing and the scrapping of the import duty would help India realise its goal of becoming a global trading centre for jewellery and gems.

“It will start happening in a year or so. I am hopeful that India will become a gem and jewellery hub,” he said. reuters

 

[Bushroda]

Apple finally offers complete iPod, Mac lineups to India
By Aidan Malley
Published: 06:35 PM EST

Apple Inc. has struck a deal that will for the first time put every one of its computers and portable media players on the shelves of Indian stores, closing a years-long gap in the company's international business.

PC business Wipro Infotech confirmed on Wednesday that it has negotiated with Apple to bring all of the latter's internationally available products to the Asian country, including rarer items such as the Xserve and Xserve RAID.

A specialized team is simultaneously being formed to help market Apple's devices to small, medium, and enterprise businesses, Wipro said. At least some support for the devices would also be handled by the large IT company.

The deal between the two firms brings India's range up to par with most other countries for the first time in several years. The Indian distributor had previously agreed to sever its links with Apple during the Mac maker's rapid decline in 1997, when Wipro's profits from Apple products were less and less beneficial to its bottom line.

Apple's resurgence in recent years has seen a similar return to health for its Indian business. In March of last year, the company announced that it would begin selling some key iPod and Mac models through local resellers in the country, but until now had refrained from opening up its entire catalog to the country's booming economy.

No direct Apple sales are planned for the country, however. The company's official online store for the nation remains browse-only and lists products as well as pricing, but won't let customers order from the website.

Wipro itself says it welcomes the return to its role as a preferred partner.

"We are extremely pleased to partner with Apple, which is well known for its innovative products and solutions," says Wipro PC division VP Ashutosh Vaidya. "Coupled with Wipro’s proven marketing and support infrastructure, this will offer the customers significantly higher value for their investments."

 

[Bushroda]

Can Romania become Europe's India?
Alina Pahoncia | Data: 14 Iun 2007
Ziarul Financiar, Romania

The representatives of some of the biggest players in the business process outsourcing (BPO) industry have launched operations in Bucharest in the last three years, turning Romania into a Southeast European leading light in this field.

Taking into consideration the fact that India continues to be the world's most attractive location for companies seeking to open service centres, does Romania stand any chance of becoming Europe's India in terms of outsourcing? This was the most important question that was requested to be answered by consultants, experts in this field and representatives of the authorities, who were attending the first BPO conference in Romania organised by ZIARUL FINANCIAR, in partnership with Genpact.

Economy and Finance Minister Varujan Vosganian, who attended the seminar, said that investments in outsourcing could reach 200-250 million euros by 2010.

However, Patrick Cogny, CEO of Genpact for Europe, says that it is quite difficult to relate any SE European country to the Indian model. "India has been the worldwide success story of outsourcing over the last few years. The outsourcing industry has existed in India for well over 10 years, which demonstrates outsourcing is an industry that redefines the way companies do business," Cogny specified. India is the location of choice for service providers, especially because of the low costs and the availability of language skills.

Whereas in India, BPO industry players operate on a market that turns out approximately 400,000 graduates a year and where experienced employees and managers are highly available, in SE Europe and implicitly in Romania, the workforce market is much more fragmented.

According to a survey conducted by the US consulting company A.T. Kearney that was revealed during the event, Romania's attractiveness, as far as BPO investors are concerned, has lessened compared with last year. Romania therefore ranks 33rd out of an index of 50 countries, unlike last year, when it ranked 24th in the same index (although the index only accounted for 40 countries).

"Some time ago, Romania's disadvantage to other countries was its economic stability. Now, it's HR that's the problem," Bogdan Belciu, manager with A.T. Kearney, pointed out, explaining that the main reason why Romania dropped in the ranking was due to human resources.

"We have to maximise the size of the HR market we operate on as outsourcing players. Endlessly fighting over the same people who work in the industry is not a solution. The moment five or six players in the field realise this, we will all stand to gain," stated Manish Sinha, HR Leader, Genpact Europe.

The BPO industry players particularly require individuals with foreign language and various technical skills (accounting, IT etc.).

"The war over talent is the only thing that makes a difference among countries and the companies that operate on the BPO market," stated David Jensen, Senior Vice President, Communications, at Genpact.

 

[Bushroda]

China, India, South Korea, Philippines: Asia Local Bond Preview
By Kevin Lim

June 13 (Bloomberg) -- The following events and economic reports may influence trading in Asian local-currency bonds today. Yields are from the previous session.

China: The government will sell 30 billion yuan ($3.9 billion) of one-year notes today. China yesterday said the consumer price index rose 3.4 percent in May from a year earlier, breaching the central bank's 3 percent ceiling for this year for the third straight month.

The yield on the 4.3 percent bond maturing in October 2009 was little changed at 2.93 percent, according to the China Interbank bond market.

India: Output at factories, utilities and mines grew 13.6 percent in April from a year earlier, a government report showed yesterday, beating the median 11.3 percent forecast of economists in a Bloomberg survey. The government revised growth in March to 14.5 percent from an earlier reported 12.9 percent. India today will sell a total of 60 billion rupees ($1.47 billion) in treasury bills maturing in 91 and 182 days.

The yield on the 8.07 percent bond due January 2017 rose 3 basis points to 8.26 percent, according to the central bank's trading system. A basis point is 0.01 percentage point.

Indonesia: The rupiah's gain against the dollar will be helped by investments into the stock market and treasury bonds, central bank Governor Hartadi Sarwono said yesterday. ``If people are still interested in entering the stock market, or buying treasury bonds, that will strengthen the rupiah,'' Sarwono told reporters in Jakarta.

The yield on the 10 percent bond due July 2017 fell 5 basis points to 8.95 percent, according to the Inter Dealer Market Association.

Malaysia: The government will tomorrow sell 3 billion ringgit ($871 million) of 10-year bonds that comply with Islamic laws. Malaysia wants to ensure interest rates are at levels conducive to sustain economic growth, state news agency Bernama reported yesterday, citing Deputy Finance Minister Ng Yen-Yen.

The yield on the 3.814 percent bond due February 2017 rose 6 basis points to 3.86 percent, according to the central bank.

Philippines: The government yesterday rejected all bids received at an auction of 6 billion pesos ($130 million) of four-year treasury bonds. Finance Undersecretary Roberto Tan, the interim treasurer, said the government may increase borrowings from official development lenders to offset any shortfall in domestic debt. The yield would have risen to 6.749 percent at the auction if the government sold all the securities on offer, compared with 6.419 percent at an April auction.

The yield on the 14 3/8 percent bond due April 2017 rose 5 basis points to 7.38 percent, according to the Philippine Dealing & Exchange Corp.

Singapore: The economy will probably expand 6 percent this year, according to a central bank survey of 16 economists released yesterday. A similar survey carried out in March had forecast 2007 growth at 5.4 percent, slower than last year's 7.9 percent expansion.

The yield on the 3 3/4 percent bond due September 2016 fell 7 basis points to 2.93 percent, according to data compiled by Bloomberg.

South Korea: Higher competition for loans among banks is fueling an increase in money supply and risks fanning inflation, in Asia's third-largest economy, Bank of Korea Governor Lee Seong Tae said yesterday. Prime Minister Han Duck Soo told Parliament yesterday the won's appreciation has created ``difficulties'' for businesses and the government will ``stabilize'' the currency market when needed.

The yield on the 4 3/4 percent bond due March 2012 rose 7 basis points to 5.42 percent, according to Korea Exchange.

Sri Lanka: The government plans to sell up to 14.9 billion rupees ($134 million) of 91-, 182- and 364-day treasury bills today. Sri Lanka sold the securities at weighted average yields of 16.94 percent, 16.69 percent and 16.6 percent, respectively, on June 6.

The yield on the 6.85 percent bond due April 2012 rose 5 basis points to 14.95 percent, according to People's Bank.

Taiwan: Central bank board members will meet on June 21 to discuss monetary policy. The monetary authority has raised borrowing costs at its last 11 quarterly meetings, increasing the discount rate on 10-day loans to banks by an eighth of a percentage point each time to 2.875 percent on March 29.

The yield on the 1 7/8 percent bond maturing in March 2017 fell 7 basis points to 2.46 percent, according to Gretai Securities Market.

Thailand: Former Prime Minister Thaksin Shinawatra will go to court to contest the seizure of his assets, his lawyer said yesterday after his family had more than $1.53 billion frozen by investigators. Thaksin was deposed in a military coup in September.

The yield on the 5 percent bond due May 2017 fell 4 basis points to 4.30 percent, according to the Thai Bond Market Association.

 

[Bushroda]

After doctors, other Indians get ready to exit Britain
Prasun Sonwalkar, Indo-Asian News Service
London, February 12, 2007
Published: 17:2 IST (12/2/2007)

After doctors, other highly skilled professionals from India in Britain also face the prospect of returning home with the Home Office deciding to challenge a judicial review of recent changes in immigration rules.

Thousands of those affected by changes to the Highly Skilled Migrants Programme (HSMP) in November 2006 filed a judicial review application on Feb 6. Its admissibility is likely to be decided later this week.

Lawyers representing the Indians say there could be no greater unfairness than enticing people to come to the UK, only to change the rules under which they entered."In a letter to the Home Office, lawyers representing the HSMP Forum said: "There could be no greater unfairness than enticing people to come to the UK and to commit their future lives here for the benefit of the UK, only to change the rules under which they entered."

The Home Office responded to the notice by saying that the secretary of state would contest the judicial review, adding: "It is important that those who pass the test at the extension stage are those who will make 'the greatest contribution to the UK economy'."

The letter added that those in Britain under the HSMP would be entitled to a permanent settlement after completing the qualifying period, but that there was "no guarantee of this".

The November 2006 changes affected thousands of highly skilled professionals from India and other non-European Union countries. Other skilled professionals under the work permit category were also affected by changes made in April 2006 that raised the qualifying period of settlement from four to five years. Those affected under the work permit are also preparing to file a judicial review petition.

Amit Kapadia, a coordinator of the HSMP Forum, said: "The UK Home Office in order to make HSMP immigrants lives miserable in the country have been coming up with stringent new rules and expectations. It clearly shows their attitude to drive immigrants out of the country by making things very difficult.

"It is preposterous that a programme that was initially promised to be for settlement is being converted into just a moneymaking spree for the Home Office and immigrants are solely treated as cash machines and not human beings."

Kapadia added that the new points-based system (PBS) for the HSMP category stipulated the capacity to earn high salary and younger age. Many employers do not consider HSMP holders for permanent employment because their visa is for a limited period.

"People below 32 years don't get any points for age. This is contradictory to the fact that 80 percent of the HSMP holders in the UK have been above 28 years old at the time of entry into the programme and can't grow younger everyday. Also, the new PBS ignores any points for experience when most of the HSMP holders initially qualified for the programme because of their experience," Kapadia added.

In discussion boards and chat-rooms, those affected have been lamenting the changes and animatedly discussing the possibility of any relief from the judicial review. Several have already initiated plans to return home or to other countries.

Kapadia cited the instance of Prabhakar Rao from Mumbai who was employed with the UTI Bank and completed his post-graduation from a reputed British university and opted for the HSMP visa. But his extension was refused recently under the new rules. He is in Britain with his wife and a four-year-old daughter.

According to Rao: "We are in middle of a crisis. I could have continued my career in India but for the false promises made by the UK Home Office. Due to the new changes, all my plans got jeopardised."

Inayat Saiyed, an IT professional from Ahmedabad, said: "Due to the new rule changes, I was not able to call my wife and kids to join me in Britain. My family members back home are paranoid. I don't know what will happen to us. We are undergoing the worst phase of our lives."

 

[Neo]

Thursday, June 14, 2007

Strike delays India’s state-run airline flights

NEW DELHI: Thousands of striking airline employees must call off a work stoppage that has left hundreds of domestic passengers stranded or face “stern action,” India’s aviation minister warned Wednesday.

Flights across India were seriously delayed with thousands of baggage handlers, check-in staff and other employees of India’s struggling state-run domestic carrier Indian on an indefinite strike.

“If they don’t call off the strike by this evening the government will be forced to take stern steps,” Civil Aviation Minister Praful Patel told reporters Wednesday, warning employees to “think about their futures.”

As many as 23 employees of the airline were suspended Wednesday, a Press Trust of India news agency report said.

“If passengers coming to the airport keep facing this kind of inconvenience we will have to think of some other steps,” said Patel, calling the strike “illegal.” afp

http://www.dailytimes.com.pk/default.asp?page=2007\06\14\story_14-6-2007_pg5_19

 

[Neo]

Thursday, June 14, 2007

India to float 2m tonnes wheat import tender

NEW DELHI: India, the world’s second-largest wheat producer, will float a tender to import 2 million tonnes of the grain by the end of June, a senior government official said on Wednesday.

“The idea is to build buffer stocks,” the official, who did not wish to be identified, told reporters. Farm Minister Sharad Pawar said last week the government would import 5 million tonnes of wheat between August and December to supplement government bins that was running short of procurement from local farmers.

Last month, the government scrapped a one million tonne import tender saying the prices quoted by firms were high. In 2006, India had imported 5.5 million tonnes of wheat to replenish depleted stocks, after the government could buy only about 9 million tonnes from farmers against a target of 16 million tonnes.

In the current season, the government hopes to procure about 11 million tonnes of wheat from farmers. reuters

http://www.dailytimes.com.pk/default.asp?page=2007\06\14\story_14-6-2007_pg5_18