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India may face food shortage in 2009
NEW DELHI: Indian Union Agriculture Minister Sharad Pawar has told Indian Prime Minister Dr Manmohan Singh that the country could face a food shortage in 2009 as its reserves were low.
According to government sources, Pawar met the prime minister on Friday and briefed him on food security for more than two hours. They said he had told Singh that his ministry was monitoring the situation closely.
Pawar had made a five-minute power-point presentation before the prime minister, they said, depicting food scarcity in 85 to 100 countries and the measures they had taken to control food riots. Pawar had said the situation in India was comparatively safer, they added.
They also discussed a status paper on food security made by Dr C Rangaranjan, chairman of the economic advisory council. Food Secretary T Nandakumar briefed the prime minister on the measures the Agriculture Ministry was taking to deal with the situation. The prime minister has already formed a group of ministers to study food security issues India might face 2010 onwards. iftikhar gilani
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Bushroda
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Indian firms put in a hot performance
By Nick Clark
The Independent, UK
Monday, 25 February 2008
Indian companies have outperformed on the Alternative Investment Market in the past year, with more set to arrive in London in 2008 as they look for international investment and recognition.
Seymour Pierce, the brokerage house, released a report last week into whether Indian stocks on Aim deliver value. Nicholas Linington, an analyst at the group, wrote: "There has been a steady addition of Indian companies listing on Aim in the last two years. We expect a greater number of small and medium-sized Indian companies to seek international investors as the economy opens up."
Stand-out companies on the growth market include KSK Power Venture, the largestIndian group on AIM by market capitalisation, and the media and entertainment group ErosInternational.
KSK listed in November 2006 at 107p, raising £30.9m in the process. The group has enjoyed life on the growth market, quadrupling by the end of last year to 463.5p. KSK, which now has a market cap of £597.4m, has developed power plants in India for the past eight years. Its growth has, in part, been boosted by several prestigious strategic alliances, including an Indian power sector investment venture with Lehman Brothers. It also announced a strategic relationship with General Electric three months ago.
Eros has also performed strongly since it listed in July 2006. The group, which releases up to 40 films a year and has a distribution network in the UK and US, has seen its shares more than double to 377.5p since floating. The last bit of good news emerged in November:it announced a strong set ofinterim results, with pre-tax profits jumping 75.9 per centto $13.6m.
Seymour Pierce found that Indian companies on AIM had delivered 21 per cent absolute performance over the past year, compared with flat results for the rest of the market. Over the same period, the FTSE Small Cap index fell 21 per cent.
Seymour Pierce tracks the Indian companies on AIM with its own index and said these companies have grown from a market value of £250m to £3.3bn since January 2006. The Seymour Pierce India Index comprises 22 Indian companies and funds. They are predominantly financial almost half followed by media and utility companies, which each account for a fifth. The index concentrates solely on AIM, as there are a further 27 Indian companies listed on the main market or onPlus markets.
The rise of Indian groups in London has not been halted by the credit crunch. In a market that has seen the brakes slam on for new listings, three Indian companies have floated on AIM in the past three months, and all are trading at a premium to their listing price.
These comprise the clean energy group Greenko, which raised £30m when it listed in November and has risen 17 per cent higher since. This was followed by DQ Entertainment and Origo Sino-India the following month, which were also welcomed by the market.
That said, the investment-related groups have not faredso well. Out of the broker's index nine companies are trading ata discount, with seven of those either fund or investmentcompanies.
Despite the huge increase, Indian companies fail to match AIM listings from another emerging dominant player in the world economy, China, which has about 50 companies on AIM.
Mr Linington said Seymour Pierce expects Indian companies to increase as the economy opens up to match the representation by China in the medium term. "In our view, India's growth drivers are, arguably, more favourable than China."
He added: "This stems principally from the ability of companies to raise funds in their domestic markets, and the desire of those companies to bring on board international investors and gain an international stock market presence."
By Nick Clark
The Independent, UK
Monday, 25 February 2008
Indian companies have outperformed on the Alternative Investment Market in the past year, with more set to arrive in London in 2008 as they look for international investment and recognition.
Seymour Pierce, the brokerage house, released a report last week into whether Indian stocks on Aim deliver value. Nicholas Linington, an analyst at the group, wrote: "There has been a steady addition of Indian companies listing on Aim in the last two years. We expect a greater number of small and medium-sized Indian companies to seek international investors as the economy opens up."
Stand-out companies on the growth market include KSK Power Venture, the largestIndian group on AIM by market capitalisation, and the media and entertainment group ErosInternational.
KSK listed in November 2006 at 107p, raising £30.9m in the process. The group has enjoyed life on the growth market, quadrupling by the end of last year to 463.5p. KSK, which now has a market cap of £597.4m, has developed power plants in India for the past eight years. Its growth has, in part, been boosted by several prestigious strategic alliances, including an Indian power sector investment venture with Lehman Brothers. It also announced a strategic relationship with General Electric three months ago.
Eros has also performed strongly since it listed in July 2006. The group, which releases up to 40 films a year and has a distribution network in the UK and US, has seen its shares more than double to 377.5p since floating. The last bit of good news emerged in November:it announced a strong set ofinterim results, with pre-tax profits jumping 75.9 per centto $13.6m.
Seymour Pierce found that Indian companies on AIM had delivered 21 per cent absolute performance over the past year, compared with flat results for the rest of the market. Over the same period, the FTSE Small Cap index fell 21 per cent.
Seymour Pierce tracks the Indian companies on AIM with its own index and said these companies have grown from a market value of £250m to £3.3bn since January 2006. The Seymour Pierce India Index comprises 22 Indian companies and funds. They are predominantly financial almost half followed by media and utility companies, which each account for a fifth. The index concentrates solely on AIM, as there are a further 27 Indian companies listed on the main market or onPlus markets.
The rise of Indian groups in London has not been halted by the credit crunch. In a market that has seen the brakes slam on for new listings, three Indian companies have floated on AIM in the past three months, and all are trading at a premium to their listing price.
These comprise the clean energy group Greenko, which raised £30m when it listed in November and has risen 17 per cent higher since. This was followed by DQ Entertainment and Origo Sino-India the following month, which were also welcomed by the market.
That said, the investment-related groups have not faredso well. Out of the broker's index nine companies are trading ata discount, with seven of those either fund or investmentcompanies.
Despite the huge increase, Indian companies fail to match AIM listings from another emerging dominant player in the world economy, China, which has about 50 companies on AIM.
Mr Linington said Seymour Pierce expects Indian companies to increase as the economy opens up to match the representation by China in the medium term. "In our view, India's growth drivers are, arguably, more favourable than China."
He added: "This stems principally from the ability of companies to raise funds in their domestic markets, and the desire of those companies to bring on board international investors and gain an international stock market presence."
Bushroda
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Japan open for India's lessons
Martin Fackler
The Age, Australia
February 25, 2008
JAPAN is suffering a crisis of confidence these days about its ability to compete with its emerging Asian rivals, China and India. But even in this fad-obsessed nation, one result was never expected: a growing craze for Indian education.
Despite an improved economy, many Japanese are feeling insecure about the nation's schools, which once turned out students who consistently ranked at the top of international tests. That is no longer true, which is why many Japanese are looking for lessons from India, the country they see as the world's ascendant education superpower.
Bookstores are filled with titles such as Extreme Indian Arithmetic Drills and The Unknown Secrets of the Indians. Newspapers carry reports of Indian children memorising multiplication tables far beyond nine times nine, the standard for young elementary students in Japan.
Japan's few Indian international schools are reporting a surge in applications from Japanese families.
At the Little Angels English Academy & International Kindergarten, the textbooks are from India, most of the teachers are South Asian, and classroom posters depict animals out of Indian tales. The pupils even colour maps of India in the green and saffron of its flag. Little Angels is in the Tokyo suburb of Mitaka, where only one of its 45 students is Indian. Most are Japanese.
Viewing another Asian country as a model in education, or almost anything else, would have been unheard-of just a few years ago, say education experts and historians. Much of Japan has long looked down on the rest of Asia, priding itself on being the region's most advanced nation. Indeed, Japan has dominated the continent for more than a century, first as an imperial power and more recently as the first Asian economy to achieve Western levels of economic development.
But in the past few years Japan has grown increasingly insecure, gripped by fear that it is being overshadowed by India and China, which are rapidly gaining in economic weight and sophistication. The government has tried to preserve Japan's technological lead and strengthen its military. But the Japanese have been forced to shed their traditional indifference to the region.
Grudgingly, Japan is starting to respect its neighbours. "Until now, Japanese saw China and India as backwards and poor," says Yoshinori Murai, a professor of Asian cultures at Sophia University in Tokyo. "As Japan loses confidence in itself, its attitudes towards Asia are changing. It has started seeing India and China as nations with something to offer."
Last month a national cry of alarm greeted the announcement by the Organisation for Economic Co-operation and Development that in a survey of maths skills, Japan had fallen from first place in 2000 to 10th place, behind Taiwan, Hong Kong and South Korea. From second in science in 2000, Japan dropped to sixth place.
China has stirred more concern in Japan as a political and economic challenger but India has emerged as the country to beat in a more benign rivalry over education. In part, this reflects China's image in Japan as a cheap manufacturer and technological imitator. But India's success in software development, internet businesses and knowledge-intensive industries in which Japan has failed to make inroads has set off more than a tinge of envy.
Most annoying for many Japanese is that the aspects of Indian education they now praise are similar to those that once made Japan famous for its work ethic and discipline: learning more at an earlier age, an emphasis on memorisation and cramming, and a focus on the basics, particularly in maths and science.
India's more demanding education standards are apparent at the Little Angels Kindergarten and are its main selling point. Its two-year-old pupils are taught to count to 20, three-year-olds are introduced to computers, and five-year-olds learn to multiply, solve maths word problems and write one-page essays in English, tasks most Japanese schools do not teach until at least year 2.
Japan's anxieties about its declining competitiveness echo the the angst of the US decades ago, when Japan was the economic upstart.
As with many new things in Japan, the interest in Indian-style education quickly became a fad. Indian education is a frequent topic in forums such as talk shows. Popular books claim to reveal the Indian secrets for multiplying and dividing multiple-digit numbers. Even Japan's conservative education ministry has begun discussing Indian methods, says Jun Takai of the ministry's international affairs division.
Eager parents try to send their children to Japan's roughly half-dozen Indian schools, hoping for an edge on the competitive college entrance exams. In Tokyo, the two largest Indian schools, which teach kindergarten through to year 8, mainly to Indian expatriates, received a sudden increase in inquiries from Japanese parents starting last year.
The Global Indian International School says 20 of its about 200 students are now Japanese, with demand so high from Indian and Japanese parents that it is building a second campus in the neighbouring city of Yokohama.
The other, the India International School in Japan, just expanded to 170 students last year, including 10 Japanese. It already has plans to expand again.
Japanese parents have expressed very high interest in Indian schools, says Nirmal Jain, principal of the India International School.
The boom has had the side effect of making many Japanese a little more tolerant towards other Asians. The founder of the Little Angels school, Jeevarani Angelina says she initially had difficulty persuading landlords to rent space to an Indian woman to start a school. But now, it's a selling point that she and three of her four full-time teachers are non-Japanese Asians.
"When I started, it was a first to have an English-language school taught by Asians, not Caucasians," she says, referring to the long presence here of American and European international schools.
Unlike other Indian schools, Ms Angelina says, Little Angels was intended primarily for Japanese children, to meet the need she had found when she sent her sons to Japanese kindergarten.
"I was lucky because I started when the Indian-education boom started," Ms Angelina says.
She has adapted the curriculum to Japan with more group activities, less memorisation and no Indian history. She plans to open an Indian-style primary school this year. Parents are enthusiastic about the school's rigorous standards.
"My son's level is higher than those of other Japanese children the same age," says Eiko Kikutake, whose son Hayato, 5, attends Little Angels. "Indian education is really amazing! This wouldn't have been possible at a Japanese kindergarten."
-- NEW YORK TIMES
Martin Fackler
The Age, Australia
February 25, 2008
JAPAN is suffering a crisis of confidence these days about its ability to compete with its emerging Asian rivals, China and India. But even in this fad-obsessed nation, one result was never expected: a growing craze for Indian education.
Despite an improved economy, many Japanese are feeling insecure about the nation's schools, which once turned out students who consistently ranked at the top of international tests. That is no longer true, which is why many Japanese are looking for lessons from India, the country they see as the world's ascendant education superpower.
Bookstores are filled with titles such as Extreme Indian Arithmetic Drills and The Unknown Secrets of the Indians. Newspapers carry reports of Indian children memorising multiplication tables far beyond nine times nine, the standard for young elementary students in Japan.
Japan's few Indian international schools are reporting a surge in applications from Japanese families.
At the Little Angels English Academy & International Kindergarten, the textbooks are from India, most of the teachers are South Asian, and classroom posters depict animals out of Indian tales. The pupils even colour maps of India in the green and saffron of its flag. Little Angels is in the Tokyo suburb of Mitaka, where only one of its 45 students is Indian. Most are Japanese.
Viewing another Asian country as a model in education, or almost anything else, would have been unheard-of just a few years ago, say education experts and historians. Much of Japan has long looked down on the rest of Asia, priding itself on being the region's most advanced nation. Indeed, Japan has dominated the continent for more than a century, first as an imperial power and more recently as the first Asian economy to achieve Western levels of economic development.
But in the past few years Japan has grown increasingly insecure, gripped by fear that it is being overshadowed by India and China, which are rapidly gaining in economic weight and sophistication. The government has tried to preserve Japan's technological lead and strengthen its military. But the Japanese have been forced to shed their traditional indifference to the region.
Grudgingly, Japan is starting to respect its neighbours. "Until now, Japanese saw China and India as backwards and poor," says Yoshinori Murai, a professor of Asian cultures at Sophia University in Tokyo. "As Japan loses confidence in itself, its attitudes towards Asia are changing. It has started seeing India and China as nations with something to offer."
Last month a national cry of alarm greeted the announcement by the Organisation for Economic Co-operation and Development that in a survey of maths skills, Japan had fallen from first place in 2000 to 10th place, behind Taiwan, Hong Kong and South Korea. From second in science in 2000, Japan dropped to sixth place.
China has stirred more concern in Japan as a political and economic challenger but India has emerged as the country to beat in a more benign rivalry over education. In part, this reflects China's image in Japan as a cheap manufacturer and technological imitator. But India's success in software development, internet businesses and knowledge-intensive industries in which Japan has failed to make inroads has set off more than a tinge of envy.
Most annoying for many Japanese is that the aspects of Indian education they now praise are similar to those that once made Japan famous for its work ethic and discipline: learning more at an earlier age, an emphasis on memorisation and cramming, and a focus on the basics, particularly in maths and science.
India's more demanding education standards are apparent at the Little Angels Kindergarten and are its main selling point. Its two-year-old pupils are taught to count to 20, three-year-olds are introduced to computers, and five-year-olds learn to multiply, solve maths word problems and write one-page essays in English, tasks most Japanese schools do not teach until at least year 2.
Japan's anxieties about its declining competitiveness echo the the angst of the US decades ago, when Japan was the economic upstart.
As with many new things in Japan, the interest in Indian-style education quickly became a fad. Indian education is a frequent topic in forums such as talk shows. Popular books claim to reveal the Indian secrets for multiplying and dividing multiple-digit numbers. Even Japan's conservative education ministry has begun discussing Indian methods, says Jun Takai of the ministry's international affairs division.
Eager parents try to send their children to Japan's roughly half-dozen Indian schools, hoping for an edge on the competitive college entrance exams. In Tokyo, the two largest Indian schools, which teach kindergarten through to year 8, mainly to Indian expatriates, received a sudden increase in inquiries from Japanese parents starting last year.
The Global Indian International School says 20 of its about 200 students are now Japanese, with demand so high from Indian and Japanese parents that it is building a second campus in the neighbouring city of Yokohama.
The other, the India International School in Japan, just expanded to 170 students last year, including 10 Japanese. It already has plans to expand again.
Japanese parents have expressed very high interest in Indian schools, says Nirmal Jain, principal of the India International School.
The boom has had the side effect of making many Japanese a little more tolerant towards other Asians. The founder of the Little Angels school, Jeevarani Angelina says she initially had difficulty persuading landlords to rent space to an Indian woman to start a school. But now, it's a selling point that she and three of her four full-time teachers are non-Japanese Asians.
"When I started, it was a first to have an English-language school taught by Asians, not Caucasians," she says, referring to the long presence here of American and European international schools.
Unlike other Indian schools, Ms Angelina says, Little Angels was intended primarily for Japanese children, to meet the need she had found when she sent her sons to Japanese kindergarten.
"I was lucky because I started when the Indian-education boom started," Ms Angelina says.
She has adapted the curriculum to Japan with more group activities, less memorisation and no Indian history. She plans to open an Indian-style primary school this year. Parents are enthusiastic about the school's rigorous standards.
"My son's level is higher than those of other Japanese children the same age," says Eiko Kikutake, whose son Hayato, 5, attends Little Angels. "Indian education is really amazing! This wouldn't have been possible at a Japanese kindergarten."
-- NEW YORK TIMES
Bushroda
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India's billion-dollar baby causes worldwide frenzy
20 hours ago
NEW DELHI (AFP) Cricket is poised for a revolution like never before as the lucrative Indian Premier League takes shape, but there are fears it could change what was once a leisurely afternoon sport for ever.
It is not about nations playing traditional Test cricket, the soul of the game for more than a century, or even one-day internationals or World Cups. The IPL is essentially an Indian Twenty20 domestic competition between eight city teams owned by corporate giants and movie stars who have hired the world's best cricketers at mind-boggling prices.
It is the nearest thing to Fantasy Cricket and cricketers are rubbing their eyes -- and wallets -- in disbelief at the huge paypackets offered to them to take part in the inaugural 44-day, 59-match extravaganza starting across cricket-mad India from April 18.
In a sport where only a handful of top stars net more than a million dollars a year in fees and endorsements for their respective countries, the IPL has showered riches like never before.
In an unprecedented auction of players in Mumbai last week, bids ranged from a whopping 1.5 million dollars for India's Twenty20 captain Mahendra Singh Dhoni to the lowest of 100,000 dollars for Sri Lankan youngster Chamara Silva.
Young batsman Manoj Tewari, who has played a solitary one-dayer for India, was picked up by Delhi for 675,000 dollars even as world-beating Australian captain Ricky Ponting went for a surprisingly low 400,000 dollars to Kolkata.
"The market is determining the players' price. That is how a free economy market flows," said Inderjit Bindra, a former Indian cricket board president and an influential member of the IPL's governing council.
Pundits regard the IPL as a revolution that will change the way cricket is played and governed, similar to Australian tycoon Kerry Packer's rebel World Series Cricket 33 years ago.
Packer, denied TV rights to Australian cricket, bought the world's best players in 1975 for a private series, introducing colour clothing and day-night matches for maximum television exposure.
The players were banned from official cricket before a compromise with the Australian Cricket Board three years later saw Packer's Channel Nine win the home rights for all Tests and one-day internationals.
There is no threat of a ban on IPL players because it is run by the official Indian body and has the blessings of the International Cricket Council (ICC) and boards around the world.
"The IPL will make the Packer years look like a storm in a teacup," said noted cricket writer Peter Roebuck. "Now, for a second time, authority totters under assault from players aware of their market value."
With dollars jingling in their pockets, cricketers will put aside fears of burnout from the already overcrowded international schedule to strut their stuff in the unbearable heat of the Indian summer.
But Ponting fears the IPL could lure cricketers away from the traditional Test and one-day games.
"With the amount of money being freely paid... there is a real danger that some guys will find the IPL more attractive than playing for their countries," Ponting wrote in The Australian newspaper.
"And if there are potential stars of Test or one-day cricket who might have any sort of thoughts like that, I think it is really dangerous for the game."
A consortium of Singapore-based World Sports Group and India's Sony Television Network paid 1.026 billion dollars for media rights of the IPL over the next 10 years.
The amount matches what Pan-Asian ESPN-Star Sports bid last year to win the rights for all ICC events till 2015, which includes two World Cups, three Champions Trophy events and the first two world Twenty20 tournaments.
IPL chairman Lalit Modi is confident franchise owners, who include top Indian businessmen Mukesh Ambani and Vijay Mallya and movie stars Shahrukh Khan and Preity Zinta, will get handsome returns for their combined investments of around 800 million dollars.
"When you go out to set up a business, it takes you a few years to plan the same," said Modi. "The franchisees have bought a team, which is an asset for life. If they build it correctly, the sky's the limit."
But critics remain sceptical.
"If the IPL is about money first, it will fail," wrote Simon Barnes in The Times. "We watch sport for the passion, for the real thing, for the love.
"Whoring simply doesn't make the Earth move."
20 hours ago
NEW DELHI (AFP) Cricket is poised for a revolution like never before as the lucrative Indian Premier League takes shape, but there are fears it could change what was once a leisurely afternoon sport for ever.
It is not about nations playing traditional Test cricket, the soul of the game for more than a century, or even one-day internationals or World Cups. The IPL is essentially an Indian Twenty20 domestic competition between eight city teams owned by corporate giants and movie stars who have hired the world's best cricketers at mind-boggling prices.
It is the nearest thing to Fantasy Cricket and cricketers are rubbing their eyes -- and wallets -- in disbelief at the huge paypackets offered to them to take part in the inaugural 44-day, 59-match extravaganza starting across cricket-mad India from April 18.
In a sport where only a handful of top stars net more than a million dollars a year in fees and endorsements for their respective countries, the IPL has showered riches like never before.
In an unprecedented auction of players in Mumbai last week, bids ranged from a whopping 1.5 million dollars for India's Twenty20 captain Mahendra Singh Dhoni to the lowest of 100,000 dollars for Sri Lankan youngster Chamara Silva.
Young batsman Manoj Tewari, who has played a solitary one-dayer for India, was picked up by Delhi for 675,000 dollars even as world-beating Australian captain Ricky Ponting went for a surprisingly low 400,000 dollars to Kolkata.
"The market is determining the players' price. That is how a free economy market flows," said Inderjit Bindra, a former Indian cricket board president and an influential member of the IPL's governing council.
Pundits regard the IPL as a revolution that will change the way cricket is played and governed, similar to Australian tycoon Kerry Packer's rebel World Series Cricket 33 years ago.
Packer, denied TV rights to Australian cricket, bought the world's best players in 1975 for a private series, introducing colour clothing and day-night matches for maximum television exposure.
The players were banned from official cricket before a compromise with the Australian Cricket Board three years later saw Packer's Channel Nine win the home rights for all Tests and one-day internationals.
There is no threat of a ban on IPL players because it is run by the official Indian body and has the blessings of the International Cricket Council (ICC) and boards around the world.
"The IPL will make the Packer years look like a storm in a teacup," said noted cricket writer Peter Roebuck. "Now, for a second time, authority totters under assault from players aware of their market value."
With dollars jingling in their pockets, cricketers will put aside fears of burnout from the already overcrowded international schedule to strut their stuff in the unbearable heat of the Indian summer.
But Ponting fears the IPL could lure cricketers away from the traditional Test and one-day games.
"With the amount of money being freely paid... there is a real danger that some guys will find the IPL more attractive than playing for their countries," Ponting wrote in The Australian newspaper.
"And if there are potential stars of Test or one-day cricket who might have any sort of thoughts like that, I think it is really dangerous for the game."
A consortium of Singapore-based World Sports Group and India's Sony Television Network paid 1.026 billion dollars for media rights of the IPL over the next 10 years.
The amount matches what Pan-Asian ESPN-Star Sports bid last year to win the rights for all ICC events till 2015, which includes two World Cups, three Champions Trophy events and the first two world Twenty20 tournaments.
IPL chairman Lalit Modi is confident franchise owners, who include top Indian businessmen Mukesh Ambani and Vijay Mallya and movie stars Shahrukh Khan and Preity Zinta, will get handsome returns for their combined investments of around 800 million dollars.
"When you go out to set up a business, it takes you a few years to plan the same," said Modi. "The franchisees have bought a team, which is an asset for life. If they build it correctly, the sky's the limit."
But critics remain sceptical.
"If the IPL is about money first, it will fail," wrote Simon Barnes in The Times. "We watch sport for the passion, for the real thing, for the love.
"Whoring simply doesn't make the Earth move."
India sidelines Brazil in Gulf sugar market
GLOBAL sugar prices are likely to drop as Brazil and India, the worlds two largest producers, expand land under cane cultivation, jack up production, and also flood the international markets with the sweetener.
Sugar prices touched an 18-month high in mid-January, climbing by nearly 15 per cent over the past few weeks raw sugar prices have flared by 30 per cent this year but are likely to witness declines over the coming months, as exports from India are expected to surge.
Prices fell sharply by 20 per cent in 2006 and nearly eight per cent last year. With both Brazil and India reporting good production, prices are likely to decline sharply in 2008.
According to analysts, global sugar production will top demand by over 10 million tons in the sugar year ending September 30. Attracted by the recent high in sugar prices, Indian producers are looking at aggressive forays in the international markets.
While the Indian government estimates that sugar production might fall to 26 million tons for sugar year October 2007 to September 2008, the industry is bullish on the production and exports front. Sharad Pawar, the federal agriculture minister, had portrayed a gloomy scenario last month, scaling down industry forecasts of 31 million tons of production to 26 million tons.
According to Pawar, low yields in some states will adversely affect production during the year. Likewise, many farmers in states like Maharashtra were disenchanted with low sugar prices last year, and had shifted to other crops.
The sugar industry is confident that sugar production will not fall so low, though it is unlikely to touch the 2006-07 level this year. The Indian Sugar Mills Association (ISMA) has scaled down earlier projections of 31 million tons, bringing it down to between 27 and 27.5 million tons. According to Shanti Lal Jain, director-general, ISMA, production is likely to touch 27.5 million for the year ending September 2008.
Production in the October-December quarter saw a sharp fall to six million tons, as against 7.3 million tons in the same quarter in the previous sugar year.
Last year, the industry had seen a record production of 28.4 million, leading to a virtual glut, and a sharp fall in prices, in the domestic market. But this discouraged farmers, many of who have switched over to wheat and oilseeds.
Jain, however, does not buy the story of farmers moving over to other crops. He points out that with the commodity fetching a good price, farmers are unlikely to cut planting cane this year.
Other analysts though worry that while production might cross 27 million this year, in 2009 there could be a fall of nearly five million tons, leading once again to a spurt in prices.
SUGAR is one of the most politically sensitive crops in India along with onions and potatoes and the central government is leery of allowing any sharp fluctuation in prices. If production dips dramatically in 2009, a crucial election year, the United Progressive Alliance (UPA) government may be in deep trouble.
It is also a highly controlled commodity, with the government having a major say in matters relating to production, exports, pricing and other crucial aspects. When sugar production is low, the government imposes a ban on exports, as happened last year. The ban was revoked only in January 2007, but it impacted exports.
As against 1.7 million tons of exports last year, the industry has already contracted to export about three million tons. This may rise to 3.5 million tons by the end of the season, but only if there is a narrowing down in the difference in the domestic and international price of the commodity.
The International Sugar Organization estimates that India will continue exporting three million tons of sugar every year for the next two to three years.
Sugar mills are keen on selling in the domestic market, where prices are at about $350 a ton, as against $300 to $320 internationally. Exporters have already shipped over a million tons of sugar in the current crop year mainly to the Gulf and with the crushing season on in full swing, expect to wrap up another two to 2.5 million tons of exports before the onset of the monsoon.
Indias annual domestic consumption is around 20 million tons. Last years record production saw inventories climb to 14 million tons in October last year; and could touch 17 million tons over the next six months, despite a spurt in exports.
Production and supply of sugar both to the domestic and international markets is highly regulated by the government, which decides on the quantity of sugar that a mill can sell in the market. About 100,000 tons are released every month for sale through the public distribution system.
With the end of winter and the onset of the festive season, the Food and Civil Supplies ministry has raised the supply quota by a hundred thousand tons in February to 1.4 million tons. This has brought down prices significantly.
In March, about 1.6 million tons will be available for sale in the open market, but an additional 200,000 tons carried over from the previous months will add to the glut in the market, resulting in another sharp fall in prices.
THE two biggest producers of sugar in India are Maharashtra and Uttar Pradesh, which together account for 60 per cent of the production. In Maharashtra, where politicians from the ruling Congress and the Nationalist Congress Party (NCP) whose chief, Sharad Pawar, is the federal agriculture minister control the industry.
Maharashtra is expecting a fall in sugar production this year from 9.2 million tons last year to around 8.5 million tons because of delay in the onset of the crushing season. But worse is in store for the ailing industry next year. According to Rajagopal Devara, the states sugar commissioner, next year production is likely to dip drastically to six million tons.
Devara attributes the likely fall to the reduction in the area under cane cultivation and diversion of cane to ethanol production. The Indian government last year made it mandatory for oil companies to go in for five per cent blending of ethanol with petrol, primarily to encourage cane consumption and help farmers, and incidentally also to encourage green fuel.
State governments have also been given the freedom to raise this to 10 per cent. With ethanol prices fixed for three years, irrespective of the fluctuation in production and demand, sugar mills are expected to expand ethanol production.
The government now allows sugar factories to produce ethanol from sugarcane directly, instead of just from molasses. Thanks to the fixed returns on ethanol, many of the factories in Maharashtra controlled by politicians are planning to shift in a big way to ethanol production.
This, combined with the expected decline in sugar production, could lead to a sharp spurt in the price of the sweetener in the run-up to election year 2009.
The likely shortfall in sugar production has already led to a spurt in sugar prices in Maharashtra. They shot up by about 10 per cent last month, and export contracts are also dwindling, as mills are more interested in the lucrative domestic market.
The Indian government has also been subsidising sugar exports, which has come in for sharp criticism from Brazilians. Top Brazilian industry officials confronted counterparts from India at a sugar conference in Dubai this month, accusing the government of providing subsidies worth $170 million to exporters.
The Indian government claims that subsidies are a temporary measure and will be discontinued over the long run. Exporters from India have captured a large chunk of the Gulf market, pushing Brazilian sugar exporters to the sidelines in recent years.
India sidelines Brazil in Gulf sugar market -DAWN - Business; February 25, 2008
Bushroda
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Geothermal energy gains momentum in India
WEBWIRE Monday, February 25, 2008
With its expertise in renewable energy, Nordic bank Glitnir has teamed up with Bhilwara Group to develop geothermal energy projects in India and Nepal.
Drawing on its experience in financing and advising on geothermal energy projects around the world, Glitnir has secured a 60:40 partnership with Indian energy development company LNJ Bhilwara Group.
Glitnir will be responsible for raising capital and supplying specialist consultants for projects to build geothermal power plants in India and Nepal. LNJ Bhilwara will bring its large-scale infrastructure and local experience to its 60 per cent share of the partnership.
Geothermal energy harnesses heat generated by the earth and is considered virtually inexhaustible, making it a sustainable and clean energy source. Unlike wind and solar installations, geothermal energy can run 24 hours a day, providing a higher and more reliable power yield.
India has planned for $475 billion of energy investments in the next five years in anticipation of the large energy demands created by Indias fast-growing economy.
"India is a very exciting market for Glitnir, particularly in the seafood and energy field, says Bala Kamallakharan, Executive Director of Strategic Growth at Glitnir. Given the projected growth of energy demand in India, the country needs to utilise all sources of energy possible, particularly renewable and green sources of energy like geothermal.
By establishing an office in India, Glitnir bank will also be playing a key role in supporting the seafood and offshore service vessels industry and utilising the vast service industry in India to further improve the efficiency of Glitnir operations worldwide" he added.
Glitnir focuses on geothermal energy as one of three global market niches (the other two are the seafood and offshore supply industries). The investment and corporate bank has formed teams of specialist bankers which operate in 11 countries around the world including China, Scandinavia, the US and the UK.
WEBWIRE Monday, February 25, 2008
With its expertise in renewable energy, Nordic bank Glitnir has teamed up with Bhilwara Group to develop geothermal energy projects in India and Nepal.
Drawing on its experience in financing and advising on geothermal energy projects around the world, Glitnir has secured a 60:40 partnership with Indian energy development company LNJ Bhilwara Group.
Glitnir will be responsible for raising capital and supplying specialist consultants for projects to build geothermal power plants in India and Nepal. LNJ Bhilwara will bring its large-scale infrastructure and local experience to its 60 per cent share of the partnership.
Geothermal energy harnesses heat generated by the earth and is considered virtually inexhaustible, making it a sustainable and clean energy source. Unlike wind and solar installations, geothermal energy can run 24 hours a day, providing a higher and more reliable power yield.
India has planned for $475 billion of energy investments in the next five years in anticipation of the large energy demands created by Indias fast-growing economy.
"India is a very exciting market for Glitnir, particularly in the seafood and energy field, says Bala Kamallakharan, Executive Director of Strategic Growth at Glitnir. Given the projected growth of energy demand in India, the country needs to utilise all sources of energy possible, particularly renewable and green sources of energy like geothermal.
By establishing an office in India, Glitnir bank will also be playing a key role in supporting the seafood and offshore service vessels industry and utilising the vast service industry in India to further improve the efficiency of Glitnir operations worldwide" he added.
Glitnir focuses on geothermal energy as one of three global market niches (the other two are the seafood and offshore supply industries). The investment and corporate bank has formed teams of specialist bankers which operate in 11 countries around the world including China, Scandinavia, the US and the UK.
Bushroda
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India shows cricket the money
MARCUS GEE
Globe and Mail, Canada
February 25, 2008 at 12:43 PM EST
MUMBAI Teams with names like the Delhi Daredevils. Tycoons and Bollywood stars bidding against each other for "icon" players. Teenaged bowlers turned into millionaires overnight. Television contracts worth hundreds of millions.
Suddenly awash in new money, Corporate India is shaking up the tradition-bound gentleman's game of cricket.
The new Indian Premier League has raised more than $1.7-billion (U.S.) before a single googly has been bowled. And the new league - its first season opens April 18 - bears all the corporate hallmarks of professional sports in the West.
For television rights, the Sony Entertainment Television-World Sports Group spent $918-million on a 10-year deal for league games, lured by a cricket-watching TV audience that has sometimes equalled the combined populations of North America and Western Europe. Bidding for the eight franchises brought in another $723-million.
"It's the biggest reality show," said Lalit Modi, the boyish American-educated millionaire who is the league's chairman and driving force, in an interview on Indian television. "It has the power of Bollywood and cricket combined."
With the country's economy booming, Indian tycoons have been snapping up steel, car and mining companies around the world, putting the country on the map of international business.
Now, many are spending their newfound wealth on that favourite tycoon's bauble: a sport team.
Industrialist Mukesh Ambani, India's richest man, paid $111-million for the Mumbai franchise.
"What's happening in cricket is reflecting the sweeping change that is coming over India," said Ayaz Memon, sports editor of the business daily DNA.
"India is a powerhouse. It really shows our growing economic clout."
Traditionally, cricket has been dominated by nation-to-nation competitions featuring five-day test matches or one-day bouts.
The brash new league plans to add a little Indian spice, shortening the games to about three hours for busy modern Indians and persuading them to root for local as well as national teams in the same way Canadians back the Canucks or Canadiens.
Players will take part in a six-week season of Twenty20 cricket, a compressed version of the game started in Britain in 2003 that restricts teams to 20 overs, or series of legal deliveries by the bowler.
Promoters of the new league promise "high-octane" play in an "adrenalin packed LIVE family entertainment format."
That includes new or improved stadiums featuring corporate boxes, big-screen entertainment and even cheerleaders.
It's a far cry from the days of languid youths in white trousers and sleeveless sweaters playing on a simple oval of green grass.
The league hopes to create a uniquely Indian fusion of first-class cricket and Bollywood glamour, capitalizing on the blanket coverage that cricket gets from the scores of newspaper, TV stations and websites in India's thriving media.
That pairing was on view at the league's first player auction last week.
Players, tycoons and movie actors crowded into a five-star hotel for nine hours of frenzied haggling over some of the world's top players.
When they emerged, they had spent about $40-million on 77 Indian and international players.
India national team captain Mahendra Dhoni will get $1.5-million for a 44-day season. Ishant Sharma, the long-haired 19-year-old fast bowler who is the emerging star of the Indian team, fetched $950,000, not including product endorsements. Australia's Brett Lee got $900,000.
The bidders were a who's who of the new Indian plutocracy, from flamboyant airline magnate Vijay Mallay to ubiquitous Bollywood star Shah Rukh Khan.
"This is an incredible opportunity," Mr. Khan said.
"The economics of this country has changed. India is no longer on the threshold, it has walked through the door," he said.
The Indian economy has been growing at 8 per cent to 9 per cent a year, creating scores of new billionaires and a thriving middle class.
Government economic reforms have opened up once-closed industries to investment and competition, creating a host of new airlines, cellphone providers, banks and insurance companies that battle fiercely for business in a potential market of 1.1 billion people.
"You've privatized airlines and look where that's gone; you've privatized telecoms and look where that's gone," bubbled actress Preity Zinta, who showed up at the player auction in a blaze of TV lights to help bid on players for her Mohali franchise.
Purists are appalled.
Opposition politician Sharad Yadav denounced the player auction as a "vulgar display of wealth," and Bal Thackeray, chief of the nationalist Shiv Sena, said that "the game of cricket is being corrupted by industrialists who are going berserk."
Just as discomfited is the international cricket brass.
The Dubai-based International Cricket Council sat meekly by as the new league grabbed some of the leading players in international competition at last week's auction.
"The International Cricket Council has become a poor cousin," commented the Business Standard, a Chennai daily.
"Something extraordinary has just happened in and to the world of cricket: The game's centre of gravity has shifted, unequivocally, to India."
MARCUS GEE
Globe and Mail, Canada
February 25, 2008 at 12:43 PM EST
MUMBAI Teams with names like the Delhi Daredevils. Tycoons and Bollywood stars bidding against each other for "icon" players. Teenaged bowlers turned into millionaires overnight. Television contracts worth hundreds of millions.
Suddenly awash in new money, Corporate India is shaking up the tradition-bound gentleman's game of cricket.
The new Indian Premier League has raised more than $1.7-billion (U.S.) before a single googly has been bowled. And the new league - its first season opens April 18 - bears all the corporate hallmarks of professional sports in the West.
For television rights, the Sony Entertainment Television-World Sports Group spent $918-million on a 10-year deal for league games, lured by a cricket-watching TV audience that has sometimes equalled the combined populations of North America and Western Europe. Bidding for the eight franchises brought in another $723-million.
"It's the biggest reality show," said Lalit Modi, the boyish American-educated millionaire who is the league's chairman and driving force, in an interview on Indian television. "It has the power of Bollywood and cricket combined."
With the country's economy booming, Indian tycoons have been snapping up steel, car and mining companies around the world, putting the country on the map of international business.
Now, many are spending their newfound wealth on that favourite tycoon's bauble: a sport team.
Industrialist Mukesh Ambani, India's richest man, paid $111-million for the Mumbai franchise.
"What's happening in cricket is reflecting the sweeping change that is coming over India," said Ayaz Memon, sports editor of the business daily DNA.
"India is a powerhouse. It really shows our growing economic clout."
Traditionally, cricket has been dominated by nation-to-nation competitions featuring five-day test matches or one-day bouts.
The brash new league plans to add a little Indian spice, shortening the games to about three hours for busy modern Indians and persuading them to root for local as well as national teams in the same way Canadians back the Canucks or Canadiens.
Players will take part in a six-week season of Twenty20 cricket, a compressed version of the game started in Britain in 2003 that restricts teams to 20 overs, or series of legal deliveries by the bowler.
Promoters of the new league promise "high-octane" play in an "adrenalin packed LIVE family entertainment format."
That includes new or improved stadiums featuring corporate boxes, big-screen entertainment and even cheerleaders.
It's a far cry from the days of languid youths in white trousers and sleeveless sweaters playing on a simple oval of green grass.
The league hopes to create a uniquely Indian fusion of first-class cricket and Bollywood glamour, capitalizing on the blanket coverage that cricket gets from the scores of newspaper, TV stations and websites in India's thriving media.
That pairing was on view at the league's first player auction last week.
Players, tycoons and movie actors crowded into a five-star hotel for nine hours of frenzied haggling over some of the world's top players.
When they emerged, they had spent about $40-million on 77 Indian and international players.
India national team captain Mahendra Dhoni will get $1.5-million for a 44-day season. Ishant Sharma, the long-haired 19-year-old fast bowler who is the emerging star of the Indian team, fetched $950,000, not including product endorsements. Australia's Brett Lee got $900,000.
The bidders were a who's who of the new Indian plutocracy, from flamboyant airline magnate Vijay Mallay to ubiquitous Bollywood star Shah Rukh Khan.
"This is an incredible opportunity," Mr. Khan said.
"The economics of this country has changed. India is no longer on the threshold, it has walked through the door," he said.
The Indian economy has been growing at 8 per cent to 9 per cent a year, creating scores of new billionaires and a thriving middle class.
Government economic reforms have opened up once-closed industries to investment and competition, creating a host of new airlines, cellphone providers, banks and insurance companies that battle fiercely for business in a potential market of 1.1 billion people.
"You've privatized airlines and look where that's gone; you've privatized telecoms and look where that's gone," bubbled actress Preity Zinta, who showed up at the player auction in a blaze of TV lights to help bid on players for her Mohali franchise.
Purists are appalled.
Opposition politician Sharad Yadav denounced the player auction as a "vulgar display of wealth," and Bal Thackeray, chief of the nationalist Shiv Sena, said that "the game of cricket is being corrupted by industrialists who are going berserk."
Just as discomfited is the international cricket brass.
The Dubai-based International Cricket Council sat meekly by as the new league grabbed some of the leading players in international competition at last week's auction.
"The International Cricket Council has become a poor cousin," commented the Business Standard, a Chennai daily.
"Something extraordinary has just happened in and to the world of cricket: The game's centre of gravity has shifted, unequivocally, to India."
Bushroda
SENIOR MEMBER
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- Apr 13, 2007
- Messages
- 1,880
- Reaction score
- 0
India gold futures seen conquering new highs
By Ruchira Singh
Mon Feb 25, 2008
MUMBAI (Reuters) - The bullish wave in gold will create new highs on the Indian futures market this week as funds pour into the metal seen as a bulwark against inflation and uncertain equity markets, analysts said on Monday.
"There are both profit takers and buyers in the market at present, but the overall sentiment is bullish," said Amar Singh, head of commodity research at Angel Commodities Broking Pvt Ltd.
Singh said the record high prices could dip on profit taking, upon which, a fresh surge of investors could push it higher.
The benchmark April gold futures on the Multi Commodity Exchange of India touched its highest level at 12,186 rupees per 10 grams on Monday, as the rupee weakened against the dollar, making the metal more expensive in the local market.
In the overseas market, gold had made its record high at $953.60 an ounce on Thursday.
Expectations of the U.S. economy slipping into a recession and the current rally in crude oil on geopolitical tensions were supporting gold, said analyst Sugandha Sachdeva of Religare Commodities.
"The market will focus on the positive factors," Sachdeva said, referring to the slew of economic indicators in the U.S. expected this week.
Analysts said the market will watch housing data and the testimony by Federal Reserve Chairman Ben Bernanke for clues on the future direction of the economy.
Another analyst warned of a downside risks in the metal.
"There would be a fear of heights for everybody," said Kishore Narne, vice president -- commodities, at Anand Rathi Commodities. "The markets will remain volatile with a bullish bias."
Narne advised taking intraday positions to minimize risks from large falls until prices stabilised.
By Ruchira Singh
Mon Feb 25, 2008
MUMBAI (Reuters) - The bullish wave in gold will create new highs on the Indian futures market this week as funds pour into the metal seen as a bulwark against inflation and uncertain equity markets, analysts said on Monday.
"There are both profit takers and buyers in the market at present, but the overall sentiment is bullish," said Amar Singh, head of commodity research at Angel Commodities Broking Pvt Ltd.
Singh said the record high prices could dip on profit taking, upon which, a fresh surge of investors could push it higher.
The benchmark April gold futures on the Multi Commodity Exchange of India touched its highest level at 12,186 rupees per 10 grams on Monday, as the rupee weakened against the dollar, making the metal more expensive in the local market.
In the overseas market, gold had made its record high at $953.60 an ounce on Thursday.
Expectations of the U.S. economy slipping into a recession and the current rally in crude oil on geopolitical tensions were supporting gold, said analyst Sugandha Sachdeva of Religare Commodities.
"The market will focus on the positive factors," Sachdeva said, referring to the slew of economic indicators in the U.S. expected this week.
Analysts said the market will watch housing data and the testimony by Federal Reserve Chairman Ben Bernanke for clues on the future direction of the economy.
Another analyst warned of a downside risks in the metal.
"There would be a fear of heights for everybody," said Kishore Narne, vice president -- commodities, at Anand Rathi Commodities. "The markets will remain volatile with a bullish bias."
Narne advised taking intraday positions to minimize risks from large falls until prices stabilised.
Bushroda
SENIOR MEMBER
- Joined
- Apr 13, 2007
- Messages
- 1,880
- Reaction score
- 0
The New Face of the Silicon Age
How India became the world's computer capital.
By: Daniel H Pink
Meet the pissed-off programmer. If you've picked up a newspaper in the last six months, watched CNN, or even glanced at Slashdot, you've already heard his anguished cry.
He's the guy - and, yeah, he's usually a guy - launching Web sites like yourjobisgoingtoindia.com and programmers nojobsforindia.com. He's the guy telling tales - many of them true, a few of them urban legends - about American being forced to train their Indian replacements.
Because of him, India's commerce and industry minister flew to Washington in June to assure the Bush administration that Indian coders were not bent on destroying American livelihoods.
And for the past year, he's the guy who's been picketing corporate outsourcing conferences, holding placards that read WILL CODE FOR FOOD will code for food and chanting, "Shame, shame, shame!"
Now meet the cause of all this fear and loathing: Aparna Jairam of Mumbai. She's 33 years old. Her long black hair is clasped with a barrette. Her dark eyes are deep-set and unusually calm.
She has the air of the smartest girl in class - not the one always raising her hand and shouting out answers, but the one who sits in back, taking it all in and responding only when called upon, yet delivering answers that make the whole class turn around and listen.
In 1992, Jairam graduated from India's University of Pune with a degree in engineering. She has since worked in a variety of jobs in the software industry and is now a project manager at Hexaware Technologies in Mumbai, the city formerly known as Bombay. Jairam specializes in embedded systems software for handheld devices. She leaves her two children with a babysitter each morning, commutes an hour to the office, and spends her days attending meetings, perfecting her team's code, and emailing her main client, a utility company in the western US. Jairam's annual salary is about $11,000 - more than 22 times the per capita annual income in India.
Aparna Jairam isn't trying to steal your job. That's what she tells me, and I believe her. But if Jairam does end up taking it - and, let's face facts, she could do your $70,000-a-year job for the wages of a Taco Bell counter jockey - she won't lose any sleep over your plight. When I ask what her advice is for a beleaguered American programmer afraid of being pulled under by the global tide that she represents, Jairam takes the high road, neither dismissing the concern nor offering soothing happy talk. Instead, she recites a portion of the 2,000-year-old epic poem and Hindu holy book the Bhagavad Gita: "Do what you're supposed to do. And don't worry about the fruits. They'll come on their own."
This is a story about the global economy. It's about two countries and one profession - and how weirdly upside down the future has begun to look from opposite sides of the globe. It's about code and the people who write it. But it's also about free markets, new politics, and ancient wisdom - which means it's ultimately about faith.
Our story begins beside the murky waters of the Arabian Sea. I've come to Mumbai to see what software programmers in India make of the anti-outsourcing hubbub in the US.
Mumbai may not have as many coders per square foot as glossier tech havens like Bangalore and Hyderabad, but there's a lot more real life here.
Mumbai is India's largest city - with an official population of 18 million and an actual population incalculably higher.
It's a sweltering, magnificent, teeming megalopolis in which every human triumph and affliction shouts at the top of its lungs 24 hours a day.
Jairam's firm, Hexaware, is located in the exurbs of Mumbai in a district fittingly called Navi Mumbai, or New Mumbai. To get there, you fight traffic thicker and more chaotic than rush hour in hell as you pass a staggering stretch of shantytowns. But once inside the Millennium Business Park, which houses Hexaware and several other high tech companies, you've tumbled through a wormhole and landed in northern Virginia or Silicon Valley. The streets are immaculate. The buildings fairly gleam. The lawns are fit for putting. And in the center is an outdoor café bustling with twentysomethings so picture-perfect I look around to see if a film crew is shooting a commercial.
Hexaware's headquarters, the workplace of some 500 programmers (another 800 work at a development center in the southern city of Chennai, and 200 more are in Bangalore), is a silvery four-story glass building chock-full of blond-wood cubicles and black Dell computers. In one area, 30 new recruits sit through programming boot camp; down the hall, 25 even newer hires are filling out HR forms. Meanwhile, other young people - the average age here is 27 - tap keyboards and skitter in and out of conference rooms outfitted with whiteboards and enclosed in frosted glass. If you pulled the shades and ignored the accents, you could be in Santa Clara. But it's the talent - coupled with the ridiculously low salaries, of course - that's luring big clients from Europe and North America. The coders here work for the likes of Citibank, Deutsche Leasing, Alliance Capital, Air Canada, HSBC, BP, Princeton University, and several other institutions that won't permit Hexaware to reveal their names.
Jairam works in a first-floor cubicle that's unadorned except for a company policy statement, a charcoal sketch, and a small statue of Ganesh, the elephant-headed Hindu god of knowledge and obstacle removal. Like most employees, Jairam rides to work aboard a private bus, one in a fleet the company dispatches throughout Mumbai to shuttle its workers to the office. Many days she eats lunch in the firm's colorful fourth-floor canteen. While Hexaware's culinary offerings don't measure up to Google's celebrity chef and gourmet fare, the food's not bad - chana saag, aloo gobi, rice, chapatis - and the price is right. A meal costs 22 rupees, about 50 cents.
After lunch one Tuesday, I meet in a conference room with Jairam and five colleagues to hear their reactions to the complaints of the Pissed-Off Programmer. I cite the usual statistics: 1 in 10 US technology jobs will go overseas by the end of 2004, according to the research firm Gartner. In the next 15 years, more than 3 million US white-collar jobs, representing $136 billion in wages, will depart to places like India, with the IT industry leading the migration, according to Forrester Research. I relate stories of American programmers collecting unemployment, declaring bankruptcy, even contemplating suicide - because they can't compete with people willing to work for one-sixth of their wages.
The six Hexawarians are sympathetic but unmoved. They disagree with the very premise that cheap labor is hurting the US. And they think it's somewhat laughable that, because things aren't going exactly our way, ordinarily change-infatuated Americans are suddenly decrying change. "Back in the US, it's all about cheap, cheap, cheap. It's not only about India being cheap. It's quality services," says Jairam's colleague Kavita Samudra, who works on applications for the airline industry. "The fact that they're getting a quality product is why people are coming to us."
Ritesh Maniar reminds me that Hexaware has scored a Level 5 rating from Carnegie Mellon's Software Engineering Institute, the highest international standard a software company can achieve. The others are quick to note that, of the 70 or so companies in the world that have earned this designation, half are from India. Over several days, here and at other companies, I hear this factoid repeated like a campaign talking point.
Translation: We're not just cheaper, we're better.
And that, they say, is good for everyone. Maniar, a senior technical architect, describes one American client: "We helped them become process-oriented, which they were not before. They were spending again and again on the same thing. We explained the process that we follow, because we would like to bring them up to our standards."
"Don't you think we're helping the US economy by doing the work here?" asks an exasperated Lalit Suryawanshi. It frees up Americans to do other things so the economy can grow, adds Jairam.
What begins to seep through their well-tiled arguments about quality, efficiency, and optimization is a view that Americans, who have long celebrated the sweetness of dynamic capitalism, must get used to the concept that it works for non-Americans, too. Programming jobs have delivered a nice upper-middle-class lifestyle to the people in this room. They own apartments. They drive new cars. They surf the Internet and watch American television and sip cappuccinos. Isn't the emergence of a vibrant middle class in an otherwise poor country a spectacular achievement, the very confirmation of the wonders of globalization - not to mention a new market for American goods and services? And if this transition pinches a little, aren't Americans being a tad hypocritical by whining about it? After all, where is it written that IT jobs somehow belong to Americans - and that any non-American who does such work is stealing the job from its rightful owner?
Maybe these US programmers should simply adjust. That's what Indian textile workers did when their country's government opened its quasi-socialistic economy in 1991, says Jairam. Some people lost jobs. They complained, but they found something else to do. Maniar uncorks an aphorism that he doesn't realize I've heard 8,000 times before (in part because American white-collar workers have long said it to their blue-collar compadres) - and that I don't realize I'll hear several times again during my stay: "There's nothing permanent except change."
Back in the US, you can feel the rage. Application developer Mike Emmons of Longwood, Florida, for example, is running for Congress on a platform that calls for the end of outsourcing. Emmons also wants to curtail temporary work visas for immigrant programmers, such as the always controversial H1-B and its stealthier counterpart, the L-1, which he says have cost him and other American programmers their jobs. "These cats will lie through their teeth," Emmons says, hreferring to incumbent members of Congress like the one he's trying to oust. "They're using immigration to reduce the wages of Americans." Other programmers, once resolutely go-it-alone apolitical types, have formed advocacy groups with righteous names like the Rescue American Jobs Foundation, the Coalition for National Sovereignty and Economic Patriotism, and the Organization for the Rights of American Workers.
One such group has adopted a friendlier title, the Information Technology Professional Association of America. But its founder, 37-year-old Scott Kirwin, voices the same indignation. "I'm very pissed off," he tells me over lunch in Wilmington, Delaware, where he lives. "I want to make people aware of what's going on with outsourcing."
Kirwin was a latecomer to the IT world. After college, he lived in Japan for five years, then returned to the States hoping to join the US Foreign Service.
He didn't get in. In 1997, he and his wife moved to Wilmington, her hometown, and he took a job at a tech support company outside Philadelphia, where he learned Visual Basic.
Kirwin discovered that he loved programming and did it well. By 2000, he was working at J.P. Morgan in Newark, Delaware, providing back-office database services for the firm's bankers around the world. But after Morgan merged with Chase, and the bloom left the boom, the combined firm decided to outsource the responsibilities of Kirwin's department to an Indian company. For nine months, he worked alongside three Indian programmers, all on temporary visas, teaching them his job but expecting to stick around as a manager when the work moved to India. Last March, Kirwin got his pink slip.
The experience did more than capsize his work life. It battered his belief system. He's long espoused the virtues of free trade. He says that he supported Nafta and that for 12 years he's subscribed to The Economist, a hymnal in the free trade church. But now he's questioning core beliefs. "These are theories that have really not been tested and proven," he says. "We're using people's lives to do this experiment - to find out what happens."
"I'm not religious," he tells me. "But I believe that everyone has to have faith in one thing. And my faith has been in the American system." That conviction is weakening. "Politicians are not aware of the problem that information workers are facing here. And it's not just the IT people. It's going to be anybody. That really worries me. Where does it stop?"
Seventy miles up the Northeast Corridor is a politician who is asking that very question - and who, in the process, has become something of a folk hero to programmers like Kirwin. Shirley Turner represents the 15th District in the New Jersey State Senate. In 2002, Turner learned that eFunds, the company that administers electronic benefits cards for the state's welfare recipients, had moved its customer service jobs from the US to a call center in Mumbai. She was stunned that the jobs were going overseas - and that taxpayer dollars were funding the migration. So Turner introduced legislation to ban the outsourcing of any state contracts to foreign countries.
Word of Turner's actions rippled across the Internet. Over the last year, she says, she's received more than 2,000 letters and emails from around the country - mostly from programmers. "I had no idea what these people were going through with outsourcing in the private sector," Turner told me at her district office in Ewing, New Jersey, just outside Trenton.
Turner's bill passed the state senate by a 40-to-0 vote. But it got bottled up in the assembly, thanks to the efforts of Indian IT firms and their powerhouse Washington, DC, lobbying firm, Hill & Knowlton. However, eFunds, chastened by the bad publicity and eager for more state contracts, moved its call center from Mumbai to Camden, New Jersey. And this former small-time civil servant found herself articulating what might be the political philosophy of the Pissed-Off Programmer.
Turner's office is decorated in early politico. Framed pieces of legislation hang on the wall. Large New Jersey and US flags stand behind her imposing desk. Her credenzas are crammed with photos of herself rubbing shoulders with various dignitaries, including three shots of her clasping hands with Bill Clinton. She's good at what she does - so smart and likable that she can make what many would consider retrograde views sound eminently reasonable. After talking to her for 10 minutes, I think, if Ross Perot had picked her as his running mate, he might have had a shot.
"We can't stop globalization," Turner says. But outsourcing, especially now, amounts to "contributing to our own demise." When jobs go overseas, governments lose income tax revenue - and that makes it even harder to assist those who need a hand. Losing IT jobs has particularly frightful consequences. In a jittery world, "it's really foolish for us to become so dependent on any foreign country for those kinds of jobs," she says. What's more, she continues, it imperils the US middle class. "If we keep going in this direction, we'll have just two classes in our society - the very, very rich and the very, very poor. We're going to look like some of the countries we're outsourcing to."
Her solution is simple: America first. Support American firms. Put Americans back to work. And only then, after we reach full employment, will outsourcing be an acceptable option. "If we can't take care of our own first, we shouldn't be looking to take care of other people around the world," she says. "If you're a parent, you don't take care of everybody on the block before you make sure your own children have their basic needs met."
It all sounds so 20 years ago - when the threat to economic prosperity and national sovereignty was not Indian coders but Japanese autoworkers. Back then, the predictions were equally alarmist - the "hollowing out" of America, people called it. And the prescriptions were equally blunt - trade sanctions and "Buy America" campaigns.
So I toss a slur across her desk. I call her a protectionist.
"Oh, and I'm proud of it," she responds. "I wear that badge with honor. I am a protectionist. I want to protect America. I want to protect jobs for Americans."
"But isn't part of this country's vitality its ability to make these kinds of changes?" I counter. "We've done it before - going from farm to factory, from factory to knowledge work, and from knowledge work to whatever's next."
She looks at me. Then she says, "I'd like to know where you go from knowledge."
Another day, another global menace. Today I'm at Patni, the software company where Aparna Jairam worked for two years in the late '90s. Patni's headquarters sits in another section of Mumbai - and as at Hexaware, the contrast between inside and outside is stark. Its interior is Silicon Valley circa 1999 - curvy door handles, funky chairs, a rooftop patio, and a pool table. But when I glance out an office window, just beyond the sidewalk I see a family living in a makeshift dwelling of plywood and tattered plastic.
Patni differs from Hexaware in a few important ways. For starters, it's bigger. Patni is India's sixth-largest software and services exporter; Hexaware ranks 18th. Patni employs about 6,500 people in offices all over the world and has a long-standing relationship with GE and a $100 million investment from the venture capital firm General Atlantic Partners. It also has a more secretive atmosphere. I'm not allowed to ask certain questions (including how much money the workers earn). When I set up my tape recorder for interviews, my ever present Patni minder pulls out his own tape recorder. Although security cameras abound, I'm not allowed on certain floors unless Patni's director of security accompanies me.
Yet for all this muscle-flexing, Patni remains a relative pipsqueak. Its 2002 revenue was about $188 million. That same year, the American IT firm EDS hauled in revenue of $21.5 billion. There's something adolescent about Patni - indeed, about many Indian IT firms. They're growing quickly, but they still don't quite seem like full-fledged adults. From an Indian perspective, though, this moment is understandably invigorating. The country now has the second-fastest-growing economy in the world. Within four years, IT outsourcing will be a $57 billion annual industry - responsible for 7 percent of India's GDP and employing some 4 million people.
But from an American perspective, the threat this poses seems pretty meager. A $57 billion market represents about 0.5 percent of US GDP. And for added perspective, it's important to continue looking out those windows. India has a long way to go. Nearly a quarter of the country lives in poverty.
The telecommunications infrastructure is subpar. And modernity stands just steps away from ancient animosities.
The week I was in Mumbai, global business guru and former MIT dean Lester Thurow was in town trumpeting the possibilities of "Brand India" - as militants planted bombs in taxis and killed 53 people.
Nonetheless, as with all adolescents, through the gangliness and overconfidence you can glimpse the contours of the future. Patni's hallways are filled with the air of inevitability. Project manager Aditya Deshmukh worked in Baltimore and New Jersey for three years but has no desire to return to the States; India's where the action is.
More than half of the Fortune 500 companies are already outsourcing work to India.One reason: Nearly every educated person here speaks English. For India - especially in its competition with China, where few have mastered Western languages - English is the killer app. This company and this industry will undoubtedly grow bigger, stronger, and smarter. That represents a threat to the status quo in the US. But such threats are an established pattern in our history. As Deshmukh reminds me before I have a chance to cover my ears and flee, "Change is the only constant."
A century ago, 40 percent of Americans worked on farms. Today, the farm sector employs about 3 percent of our workforce. But our agriculture economy still outproduces all but two countries. Fifty years ago, most of the US labor force worked in factories. Today, only about 14 percent is in manufacturing. But we've still got the largest manufacturing economy in the world - worth about $1.9 trillion in 2002. We've seen this movie before - and it's always had a happy ending. The only difference this time is that the protagonists are forging pixels instead of steel. And accountants, financial analysts, and other number crunchers, prepare for your close-up. Your jobs are next. After all, to export sneakers or sweatshirts, companies need an intercontinental supply chain. To export software or spreadsheets, somebody just needs to hit Return.
What makes this latest upheaval so disorienting for Americans is its speed. Agriculture jobs provided decent livelihoods for at least 80 years before the rules changed and working in the factory became the norm. Those industrial jobs endured for some 40 years before the twin pressures of cheap competition overseas and labor-saving automation at home rewrote the rules again. IT jobs - the kind of high-skill knowledge work that was supposed to be our future - are facing the same sort of realignment after only 20 years or so. The upheaval is occurring not across generations, but within individual careers. The rules are being rewritten while people are still playing the game. And that seems unjust.
Couple those changed rules with the ham-fisted public relations of the American companies doing the outsourcing and it's understandable why programmers are so pissed. It makes sense that they're lashing out at the H1-B and L-1 visas. US immigration policies are a proxy for forces that are harder to identify and combat. It's easier to attack visible laws than it is to restrain the invisible hand. To be sure, many of these policies, especially the L-1, have been abused. American programmers have done an effective job of highlighting these abuses - and during an election year, Congress will likely enact some hreforms. But even if these visa programs were eliminated altogether, not much would change in the long run.
Patni's head of human resources, Miland Jadhav, compares the Pissed-Off Programmers' efforts to the protests that greeted Pizza Hut's arrival in India. When the chain opened, some people "went around smashing windows and doing all kinds of things," but their cause ultimately did not prevail. Why? Demand. "You cannot tell Indian people to stop eating at Pizza Hut," he says. "It won't happen." Likewise, if some kinds of work can be done just as well for a lot cheaper somewhere other than the US, that's where US companies will send the work. The reason: demand. And if we don't like it, then it's time to return our iPods (assembled in Taiwan), our cell phones (manufactured in Korea), and our J. Crew shirts (sewn in Indonesia). We can't have it both ways.
Still, if you're 61 years old, it makes sense to borrow a page from Charlie Chaplin and try to throw a wrench into the machine. John Bauman is 61 years old. More than a year ago, Northeast Utilities fired Bauman and 200 other IT consultants. From his home in Meriden, Connecticut, he created the Organization for the Rights of American Workers. The mission: to protest H1-B and L-1 visas. He feels that if he can slow things down, he stands a chance. When I speak to him by phone one afternoon, I offer the standard defense of globalization and free trade - that they disrupt in the short term but enrich over time. But it's hard to make this argument with much gusto to a man who, faced with his unemployment benefits running out, had to take a temporary job delivering boxes for FedEx. The invisible hand is giving him the finger. A compassionate society must somehow help its John Baumans.
But the rest of us, like it or not, will have to adjust. The hints about how to make this adjustment are evident at Patni. As I meet programmers and executives, I hear lots of talk about quality and focus and ISO and CMM certifications and getting the details right. But never - not once - does anybody mention innovation, creativity, or changing the world. Again, it reminds me of Japan in the '80s - dedicated to continuous improvement but often at the expense of bolder leaps of possibility.
And therein lies the opportunity for Americans. It's inevitable that certain things - fabrication, maintenance, testing, upgrades, and other routine knowledge work - will be done overseas. But that leaves plenty for us to do.
After all, before these Indian programmers have something to fabricate, maintain, test, or upgrade, that something first must be imagined and invented.
And these creations must be explained to customers and marketed to suppliers and entered into the swirl of commerce in a fashion that people notice, all of which require aptitudes that are more difficult to outsource - imagination, empathy, and the ability to forge relationships.
After a week in India, it seems clear that the white-collar jobs with any lasting potential in the US won't be classically high tech. Instead, they'll be high concept and high touch.
Indeed, Kirwin, the programmer in Delaware, partly confirms my suspicion. After he lost his job at J.P. Morgan, he collected unemployment for three months before he found a new job at a financial services company he prefers not to name. He's now an IT designer, not a programmer. The job is more complex than merely cranking code. He must understand the broader imperatives of the business and relate to a range of people. "It's more of a synthesis of skills," he says, rather than a commodity that can be replicated in India.
Kirwin still believes the job is "offshorable," though I'm less certain. And he's earning less than he did at J.P. Morgan, though the downturn is much to blame for that, as it is for at least part of the broader anxiety that programmers are feeling.
But Kirwin does begin to address Senator Turner's question. Back in New Jersey, she introduced what appeared to be an unanswerable riddle: What comes after knowledge? The answer, perhaps, is an update of the slogan that appears in giant steel-and-neon letters on the Trenton Bridge, just a few miles from Turner's office. That slogan, affixed to the bridge in 1935 to proclaim the region's manufacturing strength, reads TRENTON MAKES - THE WORLD TAKES. Now that the rest of the world is acquiring knowledge, and we're moving to work that is high concept and high touch, where innovation is essential but the path from breakthrough to commodity is swift, the more appropriate slogan - of both admonition and possibility - might be this: AMERICA DISCOVERS. THE WORLD DELIVERS.
It's a soggy, breezy Saturday afternoon - and I'm hanging out with Aparna Jairam and her husband, Janish, in their comfortable sixth-floor flat in suburban Mumbai. Janish, who also works in the IT industry, is a genial fellow whose laid-back friendliness nicely complements his wife's quiet intensity. We're drinking tea, eating vadas, and discussing the future.
"Someday," Janish says, "another nation will take business from India." Perhaps China or the Philippines, which are already competing for IT work.
"When that happens, how will you respond?" I ask.
"I think you must have read Who Moved My Cheese?" Aparna says to my surprise.
Janish gets up from the couch, and to my still greater surprise, pulls a copy from the bookshelf. Who Moved My Cheese? is, of course, one of the best-selling books of the past decade. It's a simpleminded - and, yes, cheesy - parable about the inevitability of change. The book (booklet is more like it - the $20 hardcover is roughly the length of this article) is a fable about two mouselike critters, Hem and Haw, who live in a maze and love cheese. After years of finding their cheese in the same place every day, they arrive one morning to discover that it's gone. Hem, feeling victimized, wants to wait until somebody puts the cheese back. Haw, anxious but realistic, wants to find new cheese. The moral: Be like Haw.
Janish gave Aparna a copy of the book for their wedding anniversary last year. (He inscribed it, "I am one cheese which won't move.") She read it on a Hexaware commuter bus one morning and calls it "superb."
The lesson for Aparna was clear: The good times for Indian IT workers won't last forever. And when those darker days arrive, "We should just keep moving with the times and not be cocooned in our little world. That's the way life is." Or as Haw more chirpily explains to his partner, "Sometimes, Hem, things change and they are never the same. This looks like one of those times. That's life! Life moves on. And so should we."
If you're among the pissed off, such advice - especially coming from talking rodents chasing cheddar around a maze - may sound annoying. But it's not entirely wrong. So if Hem and Haw make you hurl, return to where Aparna began when I met her that first day - the sacred text of Hinduism, the Bhagavad Gita, whose 700 verses many Indians know by heart.
The Gita opens with two armies facing each other across a field of battle. One of the warriors is Prince Arjuna, who discovers that his charioteer is the Hindu god Krishna. The book relates the dialog between the god and the warrior - about how to survive and, more important, how to live. One stanza seems apt in this moment of fear and discontent. "Your very nature will drive you to fight," Lord Krishna tells Arjuna. "The only choice is what to fight against."
How India became the world's computer capital.
By: Daniel H Pink
Meet the pissed-off programmer. If you've picked up a newspaper in the last six months, watched CNN, or even glanced at Slashdot, you've already heard his anguished cry.
He's the guy - and, yeah, he's usually a guy - launching Web sites like yourjobisgoingtoindia.com and programmers nojobsforindia.com. He's the guy telling tales - many of them true, a few of them urban legends - about American being forced to train their Indian replacements.
Because of him, India's commerce and industry minister flew to Washington in June to assure the Bush administration that Indian coders were not bent on destroying American livelihoods.
And for the past year, he's the guy who's been picketing corporate outsourcing conferences, holding placards that read WILL CODE FOR FOOD will code for food and chanting, "Shame, shame, shame!"
Now meet the cause of all this fear and loathing: Aparna Jairam of Mumbai. She's 33 years old. Her long black hair is clasped with a barrette. Her dark eyes are deep-set and unusually calm.
She has the air of the smartest girl in class - not the one always raising her hand and shouting out answers, but the one who sits in back, taking it all in and responding only when called upon, yet delivering answers that make the whole class turn around and listen.
In 1992, Jairam graduated from India's University of Pune with a degree in engineering. She has since worked in a variety of jobs in the software industry and is now a project manager at Hexaware Technologies in Mumbai, the city formerly known as Bombay. Jairam specializes in embedded systems software for handheld devices. She leaves her two children with a babysitter each morning, commutes an hour to the office, and spends her days attending meetings, perfecting her team's code, and emailing her main client, a utility company in the western US. Jairam's annual salary is about $11,000 - more than 22 times the per capita annual income in India.
Aparna Jairam isn't trying to steal your job. That's what she tells me, and I believe her. But if Jairam does end up taking it - and, let's face facts, she could do your $70,000-a-year job for the wages of a Taco Bell counter jockey - she won't lose any sleep over your plight. When I ask what her advice is for a beleaguered American programmer afraid of being pulled under by the global tide that she represents, Jairam takes the high road, neither dismissing the concern nor offering soothing happy talk. Instead, she recites a portion of the 2,000-year-old epic poem and Hindu holy book the Bhagavad Gita: "Do what you're supposed to do. And don't worry about the fruits. They'll come on their own."
This is a story about the global economy. It's about two countries and one profession - and how weirdly upside down the future has begun to look from opposite sides of the globe. It's about code and the people who write it. But it's also about free markets, new politics, and ancient wisdom - which means it's ultimately about faith.
Our story begins beside the murky waters of the Arabian Sea. I've come to Mumbai to see what software programmers in India make of the anti-outsourcing hubbub in the US.
Mumbai may not have as many coders per square foot as glossier tech havens like Bangalore and Hyderabad, but there's a lot more real life here.
Mumbai is India's largest city - with an official population of 18 million and an actual population incalculably higher.
It's a sweltering, magnificent, teeming megalopolis in which every human triumph and affliction shouts at the top of its lungs 24 hours a day.
Jairam's firm, Hexaware, is located in the exurbs of Mumbai in a district fittingly called Navi Mumbai, or New Mumbai. To get there, you fight traffic thicker and more chaotic than rush hour in hell as you pass a staggering stretch of shantytowns. But once inside the Millennium Business Park, which houses Hexaware and several other high tech companies, you've tumbled through a wormhole and landed in northern Virginia or Silicon Valley. The streets are immaculate. The buildings fairly gleam. The lawns are fit for putting. And in the center is an outdoor café bustling with twentysomethings so picture-perfect I look around to see if a film crew is shooting a commercial.
Hexaware's headquarters, the workplace of some 500 programmers (another 800 work at a development center in the southern city of Chennai, and 200 more are in Bangalore), is a silvery four-story glass building chock-full of blond-wood cubicles and black Dell computers. In one area, 30 new recruits sit through programming boot camp; down the hall, 25 even newer hires are filling out HR forms. Meanwhile, other young people - the average age here is 27 - tap keyboards and skitter in and out of conference rooms outfitted with whiteboards and enclosed in frosted glass. If you pulled the shades and ignored the accents, you could be in Santa Clara. But it's the talent - coupled with the ridiculously low salaries, of course - that's luring big clients from Europe and North America. The coders here work for the likes of Citibank, Deutsche Leasing, Alliance Capital, Air Canada, HSBC, BP, Princeton University, and several other institutions that won't permit Hexaware to reveal their names.
Jairam works in a first-floor cubicle that's unadorned except for a company policy statement, a charcoal sketch, and a small statue of Ganesh, the elephant-headed Hindu god of knowledge and obstacle removal. Like most employees, Jairam rides to work aboard a private bus, one in a fleet the company dispatches throughout Mumbai to shuttle its workers to the office. Many days she eats lunch in the firm's colorful fourth-floor canteen. While Hexaware's culinary offerings don't measure up to Google's celebrity chef and gourmet fare, the food's not bad - chana saag, aloo gobi, rice, chapatis - and the price is right. A meal costs 22 rupees, about 50 cents.
After lunch one Tuesday, I meet in a conference room with Jairam and five colleagues to hear their reactions to the complaints of the Pissed-Off Programmer. I cite the usual statistics: 1 in 10 US technology jobs will go overseas by the end of 2004, according to the research firm Gartner. In the next 15 years, more than 3 million US white-collar jobs, representing $136 billion in wages, will depart to places like India, with the IT industry leading the migration, according to Forrester Research. I relate stories of American programmers collecting unemployment, declaring bankruptcy, even contemplating suicide - because they can't compete with people willing to work for one-sixth of their wages.
The six Hexawarians are sympathetic but unmoved. They disagree with the very premise that cheap labor is hurting the US. And they think it's somewhat laughable that, because things aren't going exactly our way, ordinarily change-infatuated Americans are suddenly decrying change. "Back in the US, it's all about cheap, cheap, cheap. It's not only about India being cheap. It's quality services," says Jairam's colleague Kavita Samudra, who works on applications for the airline industry. "The fact that they're getting a quality product is why people are coming to us."
Ritesh Maniar reminds me that Hexaware has scored a Level 5 rating from Carnegie Mellon's Software Engineering Institute, the highest international standard a software company can achieve. The others are quick to note that, of the 70 or so companies in the world that have earned this designation, half are from India. Over several days, here and at other companies, I hear this factoid repeated like a campaign talking point.
Translation: We're not just cheaper, we're better.
And that, they say, is good for everyone. Maniar, a senior technical architect, describes one American client: "We helped them become process-oriented, which they were not before. They were spending again and again on the same thing. We explained the process that we follow, because we would like to bring them up to our standards."
"Don't you think we're helping the US economy by doing the work here?" asks an exasperated Lalit Suryawanshi. It frees up Americans to do other things so the economy can grow, adds Jairam.
What begins to seep through their well-tiled arguments about quality, efficiency, and optimization is a view that Americans, who have long celebrated the sweetness of dynamic capitalism, must get used to the concept that it works for non-Americans, too. Programming jobs have delivered a nice upper-middle-class lifestyle to the people in this room. They own apartments. They drive new cars. They surf the Internet and watch American television and sip cappuccinos. Isn't the emergence of a vibrant middle class in an otherwise poor country a spectacular achievement, the very confirmation of the wonders of globalization - not to mention a new market for American goods and services? And if this transition pinches a little, aren't Americans being a tad hypocritical by whining about it? After all, where is it written that IT jobs somehow belong to Americans - and that any non-American who does such work is stealing the job from its rightful owner?
Maybe these US programmers should simply adjust. That's what Indian textile workers did when their country's government opened its quasi-socialistic economy in 1991, says Jairam. Some people lost jobs. They complained, but they found something else to do. Maniar uncorks an aphorism that he doesn't realize I've heard 8,000 times before (in part because American white-collar workers have long said it to their blue-collar compadres) - and that I don't realize I'll hear several times again during my stay: "There's nothing permanent except change."
Back in the US, you can feel the rage. Application developer Mike Emmons of Longwood, Florida, for example, is running for Congress on a platform that calls for the end of outsourcing. Emmons also wants to curtail temporary work visas for immigrant programmers, such as the always controversial H1-B and its stealthier counterpart, the L-1, which he says have cost him and other American programmers their jobs. "These cats will lie through their teeth," Emmons says, hreferring to incumbent members of Congress like the one he's trying to oust. "They're using immigration to reduce the wages of Americans." Other programmers, once resolutely go-it-alone apolitical types, have formed advocacy groups with righteous names like the Rescue American Jobs Foundation, the Coalition for National Sovereignty and Economic Patriotism, and the Organization for the Rights of American Workers.
One such group has adopted a friendlier title, the Information Technology Professional Association of America. But its founder, 37-year-old Scott Kirwin, voices the same indignation. "I'm very pissed off," he tells me over lunch in Wilmington, Delaware, where he lives. "I want to make people aware of what's going on with outsourcing."
Kirwin was a latecomer to the IT world. After college, he lived in Japan for five years, then returned to the States hoping to join the US Foreign Service.
He didn't get in. In 1997, he and his wife moved to Wilmington, her hometown, and he took a job at a tech support company outside Philadelphia, where he learned Visual Basic.
Kirwin discovered that he loved programming and did it well. By 2000, he was working at J.P. Morgan in Newark, Delaware, providing back-office database services for the firm's bankers around the world. But after Morgan merged with Chase, and the bloom left the boom, the combined firm decided to outsource the responsibilities of Kirwin's department to an Indian company. For nine months, he worked alongside three Indian programmers, all on temporary visas, teaching them his job but expecting to stick around as a manager when the work moved to India. Last March, Kirwin got his pink slip.
The experience did more than capsize his work life. It battered his belief system. He's long espoused the virtues of free trade. He says that he supported Nafta and that for 12 years he's subscribed to The Economist, a hymnal in the free trade church. But now he's questioning core beliefs. "These are theories that have really not been tested and proven," he says. "We're using people's lives to do this experiment - to find out what happens."
"I'm not religious," he tells me. "But I believe that everyone has to have faith in one thing. And my faith has been in the American system." That conviction is weakening. "Politicians are not aware of the problem that information workers are facing here. And it's not just the IT people. It's going to be anybody. That really worries me. Where does it stop?"
Seventy miles up the Northeast Corridor is a politician who is asking that very question - and who, in the process, has become something of a folk hero to programmers like Kirwin. Shirley Turner represents the 15th District in the New Jersey State Senate. In 2002, Turner learned that eFunds, the company that administers electronic benefits cards for the state's welfare recipients, had moved its customer service jobs from the US to a call center in Mumbai. She was stunned that the jobs were going overseas - and that taxpayer dollars were funding the migration. So Turner introduced legislation to ban the outsourcing of any state contracts to foreign countries.
Word of Turner's actions rippled across the Internet. Over the last year, she says, she's received more than 2,000 letters and emails from around the country - mostly from programmers. "I had no idea what these people were going through with outsourcing in the private sector," Turner told me at her district office in Ewing, New Jersey, just outside Trenton.
Turner's bill passed the state senate by a 40-to-0 vote. But it got bottled up in the assembly, thanks to the efforts of Indian IT firms and their powerhouse Washington, DC, lobbying firm, Hill & Knowlton. However, eFunds, chastened by the bad publicity and eager for more state contracts, moved its call center from Mumbai to Camden, New Jersey. And this former small-time civil servant found herself articulating what might be the political philosophy of the Pissed-Off Programmer.
Turner's office is decorated in early politico. Framed pieces of legislation hang on the wall. Large New Jersey and US flags stand behind her imposing desk. Her credenzas are crammed with photos of herself rubbing shoulders with various dignitaries, including three shots of her clasping hands with Bill Clinton. She's good at what she does - so smart and likable that she can make what many would consider retrograde views sound eminently reasonable. After talking to her for 10 minutes, I think, if Ross Perot had picked her as his running mate, he might have had a shot.
"We can't stop globalization," Turner says. But outsourcing, especially now, amounts to "contributing to our own demise." When jobs go overseas, governments lose income tax revenue - and that makes it even harder to assist those who need a hand. Losing IT jobs has particularly frightful consequences. In a jittery world, "it's really foolish for us to become so dependent on any foreign country for those kinds of jobs," she says. What's more, she continues, it imperils the US middle class. "If we keep going in this direction, we'll have just two classes in our society - the very, very rich and the very, very poor. We're going to look like some of the countries we're outsourcing to."
Her solution is simple: America first. Support American firms. Put Americans back to work. And only then, after we reach full employment, will outsourcing be an acceptable option. "If we can't take care of our own first, we shouldn't be looking to take care of other people around the world," she says. "If you're a parent, you don't take care of everybody on the block before you make sure your own children have their basic needs met."
It all sounds so 20 years ago - when the threat to economic prosperity and national sovereignty was not Indian coders but Japanese autoworkers. Back then, the predictions were equally alarmist - the "hollowing out" of America, people called it. And the prescriptions were equally blunt - trade sanctions and "Buy America" campaigns.
So I toss a slur across her desk. I call her a protectionist.
"Oh, and I'm proud of it," she responds. "I wear that badge with honor. I am a protectionist. I want to protect America. I want to protect jobs for Americans."
"But isn't part of this country's vitality its ability to make these kinds of changes?" I counter. "We've done it before - going from farm to factory, from factory to knowledge work, and from knowledge work to whatever's next."
She looks at me. Then she says, "I'd like to know where you go from knowledge."
Another day, another global menace. Today I'm at Patni, the software company where Aparna Jairam worked for two years in the late '90s. Patni's headquarters sits in another section of Mumbai - and as at Hexaware, the contrast between inside and outside is stark. Its interior is Silicon Valley circa 1999 - curvy door handles, funky chairs, a rooftop patio, and a pool table. But when I glance out an office window, just beyond the sidewalk I see a family living in a makeshift dwelling of plywood and tattered plastic.
Patni differs from Hexaware in a few important ways. For starters, it's bigger. Patni is India's sixth-largest software and services exporter; Hexaware ranks 18th. Patni employs about 6,500 people in offices all over the world and has a long-standing relationship with GE and a $100 million investment from the venture capital firm General Atlantic Partners. It also has a more secretive atmosphere. I'm not allowed to ask certain questions (including how much money the workers earn). When I set up my tape recorder for interviews, my ever present Patni minder pulls out his own tape recorder. Although security cameras abound, I'm not allowed on certain floors unless Patni's director of security accompanies me.
Yet for all this muscle-flexing, Patni remains a relative pipsqueak. Its 2002 revenue was about $188 million. That same year, the American IT firm EDS hauled in revenue of $21.5 billion. There's something adolescent about Patni - indeed, about many Indian IT firms. They're growing quickly, but they still don't quite seem like full-fledged adults. From an Indian perspective, though, this moment is understandably invigorating. The country now has the second-fastest-growing economy in the world. Within four years, IT outsourcing will be a $57 billion annual industry - responsible for 7 percent of India's GDP and employing some 4 million people.
But from an American perspective, the threat this poses seems pretty meager. A $57 billion market represents about 0.5 percent of US GDP. And for added perspective, it's important to continue looking out those windows. India has a long way to go. Nearly a quarter of the country lives in poverty.
The telecommunications infrastructure is subpar. And modernity stands just steps away from ancient animosities.
The week I was in Mumbai, global business guru and former MIT dean Lester Thurow was in town trumpeting the possibilities of "Brand India" - as militants planted bombs in taxis and killed 53 people.
Nonetheless, as with all adolescents, through the gangliness and overconfidence you can glimpse the contours of the future. Patni's hallways are filled with the air of inevitability. Project manager Aditya Deshmukh worked in Baltimore and New Jersey for three years but has no desire to return to the States; India's where the action is.
More than half of the Fortune 500 companies are already outsourcing work to India.One reason: Nearly every educated person here speaks English. For India - especially in its competition with China, where few have mastered Western languages - English is the killer app. This company and this industry will undoubtedly grow bigger, stronger, and smarter. That represents a threat to the status quo in the US. But such threats are an established pattern in our history. As Deshmukh reminds me before I have a chance to cover my ears and flee, "Change is the only constant."
A century ago, 40 percent of Americans worked on farms. Today, the farm sector employs about 3 percent of our workforce. But our agriculture economy still outproduces all but two countries. Fifty years ago, most of the US labor force worked in factories. Today, only about 14 percent is in manufacturing. But we've still got the largest manufacturing economy in the world - worth about $1.9 trillion in 2002. We've seen this movie before - and it's always had a happy ending. The only difference this time is that the protagonists are forging pixels instead of steel. And accountants, financial analysts, and other number crunchers, prepare for your close-up. Your jobs are next. After all, to export sneakers or sweatshirts, companies need an intercontinental supply chain. To export software or spreadsheets, somebody just needs to hit Return.
What makes this latest upheaval so disorienting for Americans is its speed. Agriculture jobs provided decent livelihoods for at least 80 years before the rules changed and working in the factory became the norm. Those industrial jobs endured for some 40 years before the twin pressures of cheap competition overseas and labor-saving automation at home rewrote the rules again. IT jobs - the kind of high-skill knowledge work that was supposed to be our future - are facing the same sort of realignment after only 20 years or so. The upheaval is occurring not across generations, but within individual careers. The rules are being rewritten while people are still playing the game. And that seems unjust.
Couple those changed rules with the ham-fisted public relations of the American companies doing the outsourcing and it's understandable why programmers are so pissed. It makes sense that they're lashing out at the H1-B and L-1 visas. US immigration policies are a proxy for forces that are harder to identify and combat. It's easier to attack visible laws than it is to restrain the invisible hand. To be sure, many of these policies, especially the L-1, have been abused. American programmers have done an effective job of highlighting these abuses - and during an election year, Congress will likely enact some hreforms. But even if these visa programs were eliminated altogether, not much would change in the long run.
Patni's head of human resources, Miland Jadhav, compares the Pissed-Off Programmers' efforts to the protests that greeted Pizza Hut's arrival in India. When the chain opened, some people "went around smashing windows and doing all kinds of things," but their cause ultimately did not prevail. Why? Demand. "You cannot tell Indian people to stop eating at Pizza Hut," he says. "It won't happen." Likewise, if some kinds of work can be done just as well for a lot cheaper somewhere other than the US, that's where US companies will send the work. The reason: demand. And if we don't like it, then it's time to return our iPods (assembled in Taiwan), our cell phones (manufactured in Korea), and our J. Crew shirts (sewn in Indonesia). We can't have it both ways.
Still, if you're 61 years old, it makes sense to borrow a page from Charlie Chaplin and try to throw a wrench into the machine. John Bauman is 61 years old. More than a year ago, Northeast Utilities fired Bauman and 200 other IT consultants. From his home in Meriden, Connecticut, he created the Organization for the Rights of American Workers. The mission: to protest H1-B and L-1 visas. He feels that if he can slow things down, he stands a chance. When I speak to him by phone one afternoon, I offer the standard defense of globalization and free trade - that they disrupt in the short term but enrich over time. But it's hard to make this argument with much gusto to a man who, faced with his unemployment benefits running out, had to take a temporary job delivering boxes for FedEx. The invisible hand is giving him the finger. A compassionate society must somehow help its John Baumans.
But the rest of us, like it or not, will have to adjust. The hints about how to make this adjustment are evident at Patni. As I meet programmers and executives, I hear lots of talk about quality and focus and ISO and CMM certifications and getting the details right. But never - not once - does anybody mention innovation, creativity, or changing the world. Again, it reminds me of Japan in the '80s - dedicated to continuous improvement but often at the expense of bolder leaps of possibility.
And therein lies the opportunity for Americans. It's inevitable that certain things - fabrication, maintenance, testing, upgrades, and other routine knowledge work - will be done overseas. But that leaves plenty for us to do.
After all, before these Indian programmers have something to fabricate, maintain, test, or upgrade, that something first must be imagined and invented.
And these creations must be explained to customers and marketed to suppliers and entered into the swirl of commerce in a fashion that people notice, all of which require aptitudes that are more difficult to outsource - imagination, empathy, and the ability to forge relationships.
After a week in India, it seems clear that the white-collar jobs with any lasting potential in the US won't be classically high tech. Instead, they'll be high concept and high touch.
Indeed, Kirwin, the programmer in Delaware, partly confirms my suspicion. After he lost his job at J.P. Morgan, he collected unemployment for three months before he found a new job at a financial services company he prefers not to name. He's now an IT designer, not a programmer. The job is more complex than merely cranking code. He must understand the broader imperatives of the business and relate to a range of people. "It's more of a synthesis of skills," he says, rather than a commodity that can be replicated in India.
Kirwin still believes the job is "offshorable," though I'm less certain. And he's earning less than he did at J.P. Morgan, though the downturn is much to blame for that, as it is for at least part of the broader anxiety that programmers are feeling.
But Kirwin does begin to address Senator Turner's question. Back in New Jersey, she introduced what appeared to be an unanswerable riddle: What comes after knowledge? The answer, perhaps, is an update of the slogan that appears in giant steel-and-neon letters on the Trenton Bridge, just a few miles from Turner's office. That slogan, affixed to the bridge in 1935 to proclaim the region's manufacturing strength, reads TRENTON MAKES - THE WORLD TAKES. Now that the rest of the world is acquiring knowledge, and we're moving to work that is high concept and high touch, where innovation is essential but the path from breakthrough to commodity is swift, the more appropriate slogan - of both admonition and possibility - might be this: AMERICA DISCOVERS. THE WORLD DELIVERS.
It's a soggy, breezy Saturday afternoon - and I'm hanging out with Aparna Jairam and her husband, Janish, in their comfortable sixth-floor flat in suburban Mumbai. Janish, who also works in the IT industry, is a genial fellow whose laid-back friendliness nicely complements his wife's quiet intensity. We're drinking tea, eating vadas, and discussing the future.
"Someday," Janish says, "another nation will take business from India." Perhaps China or the Philippines, which are already competing for IT work.
"When that happens, how will you respond?" I ask.
"I think you must have read Who Moved My Cheese?" Aparna says to my surprise.
Janish gets up from the couch, and to my still greater surprise, pulls a copy from the bookshelf. Who Moved My Cheese? is, of course, one of the best-selling books of the past decade. It's a simpleminded - and, yes, cheesy - parable about the inevitability of change. The book (booklet is more like it - the $20 hardcover is roughly the length of this article) is a fable about two mouselike critters, Hem and Haw, who live in a maze and love cheese. After years of finding their cheese in the same place every day, they arrive one morning to discover that it's gone. Hem, feeling victimized, wants to wait until somebody puts the cheese back. Haw, anxious but realistic, wants to find new cheese. The moral: Be like Haw.
Janish gave Aparna a copy of the book for their wedding anniversary last year. (He inscribed it, "I am one cheese which won't move.") She read it on a Hexaware commuter bus one morning and calls it "superb."
The lesson for Aparna was clear: The good times for Indian IT workers won't last forever. And when those darker days arrive, "We should just keep moving with the times and not be cocooned in our little world. That's the way life is." Or as Haw more chirpily explains to his partner, "Sometimes, Hem, things change and they are never the same. This looks like one of those times. That's life! Life moves on. And so should we."
If you're among the pissed off, such advice - especially coming from talking rodents chasing cheddar around a maze - may sound annoying. But it's not entirely wrong. So if Hem and Haw make you hurl, return to where Aparna began when I met her that first day - the sacred text of Hinduism, the Bhagavad Gita, whose 700 verses many Indians know by heart.
The Gita opens with two armies facing each other across a field of battle. One of the warriors is Prince Arjuna, who discovers that his charioteer is the Hindu god Krishna. The book relates the dialog between the god and the warrior - about how to survive and, more important, how to live. One stanza seems apt in this moment of fear and discontent. "Your very nature will drive you to fight," Lord Krishna tells Arjuna. "The only choice is what to fight against."
Bushroda
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Tata's On A Tear
Mira Kamdar
FORBES, NY
02.25.08, 6:00 AM ET
Tata is on a tear to transform itself from an Indian corporate giant into a global business powerhouse.
Founded 140 years ago, as a family-run business dedicated to the nationalist cause of building up the industrial and knowledge base of an independent India, the $29 billion Tata Group now comprises 27 publicly listed enterprises with operations in 80 different countries employing 289,500 people.
Leading a pack of Indian companies eager to take their business overseas, Tata has dug into its deep pockets over the last couple of years to acquire companies and brands needed to fuel global expansion. It's an eclectic list, ranging from the beverage business with Tetley Tea, to the steel business with Corus, to emerging as the likely high bidder for Ford's prestigious Jaguar and Range Rover automobile brands. Now Tata is looking to connect the dots.
As the Romans well knew, a good highway system is essential to the maintenance of empire. Having acquired outposts flung across the globe, Tata Group's latest project is building a digital highway designed to work synergistically with the group's information technology services company, Tata Consultancy Services.
It comes as no surprise, given the series of submarine cable cuts that disrupted Internet service to the Middle East and India recently, that a core part of Tata Communications' expansion in 2008 will be building new Eurasia and Intra-Asia cable systems. Clearly, connectivity to these regions is increasingly important to the global economy.
Using a page taken from sister company Tata Motors' (nyse: TTM - news - people ) playbook, the parent company is looking to derive competitive advantage from its deep knowledge of the broad emerging market environment.
The unveiling in January of the Nano--at $2,500 the world's cheapest car; designed by Indian engineers, financed with Indian capital and destined for an Indian market of less affluent buyers ignored by other established automobile manufacturers--demonstrated Tata's stature as the emerging-market king of the automobile industry.
Similarly, the Tata Communications announcement trumpets the company's ability to broker traffic into, out of and within emerging markets across Asia, the Middle East and Africa. As Tata Communications' North America CEO Dave Ryan put it: "India, south China, South Africa--there's a view that these emerging markets are going to be the explosive growth areas for us and our clients."
Tata's strategy is as much a revolution as it is a bid for empire, and that's of paramount significance. It is one more sign of the shift of global business' center of gravity away from the developed world to the emerging markets of the developing world. Tata is turning the old imperial paradigm on its head, effectively setting itself up to move the seat of commercial empire from Europe and North America by doing what companies in developed markets are ill- prepared to do--leverage hard-won experience and established networks in emerging markets.
Advancing globalization means, among other things, that traffic--and profits--no longer flow one way out of emerging markets toward developed markets. Tata is positioning itself as much to serve prospering Indian and other emerging-market clients seeking to expand their reach into Europe and North America as it is wooing clients in developed markets who need connectivity into emerging markets. Tata Communications is looking at an "entire vision of creating a new world of communications" anchored in "our strength in emerging markets," says the firm's senior vice president for corporate strategy Srinivasa Addepalli.
Tata's ambition appears boundless. "It's always been our objective to circle the globe in terms of our assets," Ryan says. He's talking about Tata Communications' submarine cable system, but he might as well be talking about the Tata Group's overall global strategy.
It remains to be seen, however, how successful Tata will be in a global business environment teetering on the fragile fulcrum of a U.S. economy headed for recession. There was a fleeting moment when emerging markets looked like they were robust enough and self-sufficient enough to replace at least some significant portion of the great American consumption machine that drives global economic growth. It is now clear, however, that in an increasingly interconnected world, emerging markets are no more immune to a U.S. recession touched off by the subprime lending debacle than are the world's advanced economies. As a direct result, growth in China, India and elsewhere across the developing world will be lower in 2008 than it was in 2007.
Moreover, the limits of high growth are beginning to be reached in emerging markets; where critical investment in education, health and infrastructure have lagged; where an over-stretched environment is reaching the breaking point; and where the gap between the rich and poor is growing rather than shrinking. These factors are contributing as much to pushing Indian and other emerging-market companies to seek new opportunities beyond their borders as are the profits they've piled up during the recent boom years. These companies simply cannot find enough qualified workers or enough market growth at home to continue to fuel the spectacular growth that has put them on the global map.
Still, Tata is banking on the fact that companies around the world will continue to seek new markets, even if those new markets are someone else's old ones. And in a world where the easy times may be as much behind us as in front of us, Tata's argument that the hard lessons it learned figuring out how to prosper in a tough emerging-market environment give it skills other companies simply cant match may yet prove convincing.
If so, Tata will need to guard against the menace all successful empire builders in history have faced sooner or later--going soft and growing overly confident after the empire has been won.
Mira Kamdar is a Bernard Schwartz fellow at the Asia Society and the author of Planet India: The Turbulent Rise of the Largest Democracy and the Future of Our World (Scribner 2008).
Mira Kamdar
FORBES, NY
02.25.08, 6:00 AM ET
Tata is on a tear to transform itself from an Indian corporate giant into a global business powerhouse.
Founded 140 years ago, as a family-run business dedicated to the nationalist cause of building up the industrial and knowledge base of an independent India, the $29 billion Tata Group now comprises 27 publicly listed enterprises with operations in 80 different countries employing 289,500 people.
Leading a pack of Indian companies eager to take their business overseas, Tata has dug into its deep pockets over the last couple of years to acquire companies and brands needed to fuel global expansion. It's an eclectic list, ranging from the beverage business with Tetley Tea, to the steel business with Corus, to emerging as the likely high bidder for Ford's prestigious Jaguar and Range Rover automobile brands. Now Tata is looking to connect the dots.
As the Romans well knew, a good highway system is essential to the maintenance of empire. Having acquired outposts flung across the globe, Tata Group's latest project is building a digital highway designed to work synergistically with the group's information technology services company, Tata Consultancy Services.
It comes as no surprise, given the series of submarine cable cuts that disrupted Internet service to the Middle East and India recently, that a core part of Tata Communications' expansion in 2008 will be building new Eurasia and Intra-Asia cable systems. Clearly, connectivity to these regions is increasingly important to the global economy.
Using a page taken from sister company Tata Motors' (nyse: TTM - news - people ) playbook, the parent company is looking to derive competitive advantage from its deep knowledge of the broad emerging market environment.
The unveiling in January of the Nano--at $2,500 the world's cheapest car; designed by Indian engineers, financed with Indian capital and destined for an Indian market of less affluent buyers ignored by other established automobile manufacturers--demonstrated Tata's stature as the emerging-market king of the automobile industry.
Similarly, the Tata Communications announcement trumpets the company's ability to broker traffic into, out of and within emerging markets across Asia, the Middle East and Africa. As Tata Communications' North America CEO Dave Ryan put it: "India, south China, South Africa--there's a view that these emerging markets are going to be the explosive growth areas for us and our clients."
Tata's strategy is as much a revolution as it is a bid for empire, and that's of paramount significance. It is one more sign of the shift of global business' center of gravity away from the developed world to the emerging markets of the developing world. Tata is turning the old imperial paradigm on its head, effectively setting itself up to move the seat of commercial empire from Europe and North America by doing what companies in developed markets are ill- prepared to do--leverage hard-won experience and established networks in emerging markets.
Advancing globalization means, among other things, that traffic--and profits--no longer flow one way out of emerging markets toward developed markets. Tata is positioning itself as much to serve prospering Indian and other emerging-market clients seeking to expand their reach into Europe and North America as it is wooing clients in developed markets who need connectivity into emerging markets. Tata Communications is looking at an "entire vision of creating a new world of communications" anchored in "our strength in emerging markets," says the firm's senior vice president for corporate strategy Srinivasa Addepalli.
Tata's ambition appears boundless. "It's always been our objective to circle the globe in terms of our assets," Ryan says. He's talking about Tata Communications' submarine cable system, but he might as well be talking about the Tata Group's overall global strategy.
It remains to be seen, however, how successful Tata will be in a global business environment teetering on the fragile fulcrum of a U.S. economy headed for recession. There was a fleeting moment when emerging markets looked like they were robust enough and self-sufficient enough to replace at least some significant portion of the great American consumption machine that drives global economic growth. It is now clear, however, that in an increasingly interconnected world, emerging markets are no more immune to a U.S. recession touched off by the subprime lending debacle than are the world's advanced economies. As a direct result, growth in China, India and elsewhere across the developing world will be lower in 2008 than it was in 2007.
Moreover, the limits of high growth are beginning to be reached in emerging markets; where critical investment in education, health and infrastructure have lagged; where an over-stretched environment is reaching the breaking point; and where the gap between the rich and poor is growing rather than shrinking. These factors are contributing as much to pushing Indian and other emerging-market companies to seek new opportunities beyond their borders as are the profits they've piled up during the recent boom years. These companies simply cannot find enough qualified workers or enough market growth at home to continue to fuel the spectacular growth that has put them on the global map.
Still, Tata is banking on the fact that companies around the world will continue to seek new markets, even if those new markets are someone else's old ones. And in a world where the easy times may be as much behind us as in front of us, Tata's argument that the hard lessons it learned figuring out how to prosper in a tough emerging-market environment give it skills other companies simply cant match may yet prove convincing.
If so, Tata will need to guard against the menace all successful empire builders in history have faced sooner or later--going soft and growing overly confident after the empire has been won.
Mira Kamdar is a Bernard Schwartz fellow at the Asia Society and the author of Planet India: The Turbulent Rise of the Largest Democracy and the Future of Our World (Scribner 2008).
Honda sees India sales at 90,000 cars by 2008-09
NEW DELHI: Japans Honda Motor Co aims to raise sales in India by a third to 90,000 cars in the year beginning in April, and raise output to 160,000 by 2010 as it focuses on the fast-growing market, senior officials said.
Honda, which makes premium sedans Honda City, Civic and Accord in India, on Monday opened a new facility at its existing factory near Delhi that would double the capacity to 100,000 units a year.
India is the most exciting auto market in Asia. It has great potential for growth, Tatsuhiro Oyama, chief executive of Bangkok-based Asian Honda Motor Co, said at the new plant in Greater Noida.
It is building a new plant in the western state of Rajasthan that will add 60,000 units by the last quarter of 2009, officials said.
Honda expects to sell 68,000 cars in India during the current fiscal year ending in March.
The Society of Indian Automobile Manufacturers (SIAM) expects a 14 percent growth in sales of passenger vehicles in 2007/08, from about 1.4 million sold in the previous year, Ranojoy Mukherji, deputy director at the industry body, said.
Passenger vehicles comprise cars, utility vehicles and multi-purpose vehicles. SIAM does not have projections for car sales, but Mukherji said nearly 1.1 million were sold last year.
We forecast the passenger car market to grow 16 percent in 2008/09, with the premium car segment to grow more or less at the same pace, said Jnaneswar Sen, senior general manager, marketing at Hondas Indian unit.
In January, Honda had said it would bring to India a hybrid version of the Civic in 2008, and launch the compact Jazz car by end-2009.
Honda has invested 16.2 billion rupees ($405 million) in the Greater Noida plant since it was launched in 1997. It will initially invest 10 billion rupees in the Rajasthan plant, Masahiro Takedagawa, chief executive of Honda Siel Cars India, said.
The Rajasthan plant will ultimately produce 240,000 cars a year, but the ramp-up in capacity will depend upon the demand and a further investment of 20 billion rupees, he said. reuters
Daily Times - Leading News Resource of Pakistan
India aims to sustain growth, control prices
NEW DELHI: Indias Congress-party led government will work to sustain high rates of economic growth while keeping prices under control, the countrys president told lawmakers ahead of Fridays federal budget.
Asias third-largest economy is forecast to expand 8.7 percent in the fiscal year to end-March, near a four-year average but moderating from blistering growth of 9.6 percent the year before.
Firm interest rates designed to stem price pressures and trim credit growth have curbed domestic demand, which largely drives the trillion-dollar economy.
This performance is all the more creditable against the background of high international oil prices and rising commodity prices including food, Pratibha Patil said as she flagged off the budget session of parliament. It will continue to be the endeavour of my government to sustain growth while keeping prices under check.
Much to the central banks discomfort, inflation has been inching up in recent weeks, led higher by rising food and commodity prices at home and in global markets.
Data released on Friday showed wholesale price inflation running at a six-month high of 4.35 percent in early February. A marginal increase in prices of widely consumed fuels earlier this month is yet to feed through to the inflation reading, and analysts expect it to tick up to near 5 percent in the weeks ahead.
The budget on Feb. 29 will be the centre-left governments last full one with general elections due by May next year and is expected to extend tax breaks on personal income and cut duties on consumer goods to boost spending and revive growth ahead of the polls.
Patil said historically high investment rates of over 35 percent of gross domestic product and savings rates of over 34 percent symbolised a new dynamism in the economy. I am confident that the creativity, enterprise and hard work of our young people will be able to sustain these high rates in the years to come, she said.
Some analysts say they see a possible US recession and comparatively high Indian interest rates creating headwinds for the economy, particularly if the rupee , which gained more than 12 percent against the dollar in 2007, continued to rise.
The central bank raised interest rates five times in 10 months from June 2006 and tightened banks reserve requirements repeatedly last year. Patil, who outlined the achievements of the communist-backed coalition, said the National Rural Employment Guarantee Act, which offers 100 days of paid work a year to rural households, would be expanded to all rural districts from April. Critics say much of the work carried out under the act, Indias most ambitious effort to tackle rural poverty, is pointless, much of the money stolen and the entire scheme misguided in a country plagued by fractious, weak and often corrupt governance.
Daily Times - Leading News Resource of Pakistan
Bushroda
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Tata near deal with Ford on Jaguar/Land Rover
By Joe Leahy in Mumbai
Financial Times, UK
February 26 2008
Indias Tata Motors could sign a deal with Ford to buy the US carmakers Jaguar and Land Rover marques as early as next Wednesday or Thursday, people familiar with the deal said on Tuesday.
They said the negotiations on the deal, which would be the first major acquisition of globally renowned brand names by an Indian automotive manufacturer, are ongoing and have been complicated by long-term supply contracts covering areas such as engines.
It might still slip but everyones working towards that [March 5 or 6], said a person familiar with the talks.
Progress was made after a meeting between Tata last Friday and Unite, the main union representing employees at Jaguar and Land Rover.
Valued at about $2bn, the deal would be Tatas first big foray into the international luxury automotive manufacturing industry, and a further step by Ford towards restructuring to focus on its North American businesses.
Ford, the worlds third-largest automaker, lost $2.67bn last year and a record $12.6bn in 2006. Mumbai-based Tata is Indias largest truck maker and second largest passenger vehicle manufacturer by sales, specialising in lower-cost small cars.
Ford declined to comment on the timing of any deal on Tuesday, saying only: The discussions are ongoing and made good progress.
Tata Motors also declined to comment. We are in negotiations and are happy with the progress, the Indian automotive manufacturer said.
But people familiar with the deal said Ford and Tata Motors were working hard towards signing a preliminary agreement next week as part of pledges to conclude arrangements by the first quarter of this year.
Everyone is aiming for next week but whether or not that will be achieved, there is still a bit of an issue there, another person familiar with the negotiations said on Tuesday night.
The deal centres on thousands of pages of agreements on intricate vendor and supplier agreements between the Ford group and the two marques.
These cover areas ranging from engine supply, information technology, intellectual property and the two brands financial services.
One person familiar with the talks on Tuesday said Tata is expected to agree to engine supply agreements that could span the next five to 10 years.
But even if it clinches the deal, Tata is expected to face significant challenges with Jaguar and Land Rover.
Land Rover is profitable, with worldwide sales rising 18 per cent last year to 226,395 units but Jaguar is loss-making, with its sales falling 19 per cent to 60,485.
Jaguar is planning to launch new models that may resurrect its fortunes but the deal comes at a difficult time for luxury vehicle sales, with a slowdown in the US economy expected to hit sales.
By Joe Leahy in Mumbai
Financial Times, UK
February 26 2008
Indias Tata Motors could sign a deal with Ford to buy the US carmakers Jaguar and Land Rover marques as early as next Wednesday or Thursday, people familiar with the deal said on Tuesday.
They said the negotiations on the deal, which would be the first major acquisition of globally renowned brand names by an Indian automotive manufacturer, are ongoing and have been complicated by long-term supply contracts covering areas such as engines.
It might still slip but everyones working towards that [March 5 or 6], said a person familiar with the talks.
Progress was made after a meeting between Tata last Friday and Unite, the main union representing employees at Jaguar and Land Rover.
Valued at about $2bn, the deal would be Tatas first big foray into the international luxury automotive manufacturing industry, and a further step by Ford towards restructuring to focus on its North American businesses.
Ford, the worlds third-largest automaker, lost $2.67bn last year and a record $12.6bn in 2006. Mumbai-based Tata is Indias largest truck maker and second largest passenger vehicle manufacturer by sales, specialising in lower-cost small cars.
Ford declined to comment on the timing of any deal on Tuesday, saying only: The discussions are ongoing and made good progress.
Tata Motors also declined to comment. We are in negotiations and are happy with the progress, the Indian automotive manufacturer said.
But people familiar with the deal said Ford and Tata Motors were working hard towards signing a preliminary agreement next week as part of pledges to conclude arrangements by the first quarter of this year.
Everyone is aiming for next week but whether or not that will be achieved, there is still a bit of an issue there, another person familiar with the negotiations said on Tuesday night.
The deal centres on thousands of pages of agreements on intricate vendor and supplier agreements between the Ford group and the two marques.
These cover areas ranging from engine supply, information technology, intellectual property and the two brands financial services.
One person familiar with the talks on Tuesday said Tata is expected to agree to engine supply agreements that could span the next five to 10 years.
But even if it clinches the deal, Tata is expected to face significant challenges with Jaguar and Land Rover.
Land Rover is profitable, with worldwide sales rising 18 per cent last year to 226,395 units but Jaguar is loss-making, with its sales falling 19 per cent to 60,485.
Jaguar is planning to launch new models that may resurrect its fortunes but the deal comes at a difficult time for luxury vehicle sales, with a slowdown in the US economy expected to hit sales.
Bushroda
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Indian Railways as a global player
Rajiv Kumar
Financial Express
Tuesday , February 26, 2008
Indian Railways is on a roll. The minister justifiably started his budget speech with the announcement of a cash surplus before dividends of Rs 25,000 crore in 2007-08, compared to Rs 20,000 crore in 2006-07. Over the last five years, a total surplus of more than Rs 65,000 crore has been generated. This is quite a turnaround from a situation not long ago where it was unable to even declare a dividend. Not surprisingly, the railways and its minister have become case study in international management schools. Without wishing to take anything away from this splendid achievement, I do wish to point out that the growth in earnings in 2007-08 of both goods and passenger segments were 14%, just in line with the Economys nominal growth rate. This is not, then, an exceptional performance. Merely that it is started keeping up with the rest of the Economy at last. Good, but hardly anything to be complacent about. This implies that despite its good showing, the Railways has perhaps been unable to increase its share in total goods and passenger traffic. It would have, therefore, been better if the railway minister had given us an indication of performance vis-à-vis other means of transport (like road and civil aviation). It is important both from an economic and ecological standpoint to ensure that rail traffic increases its share of overall traffic in India.
Given that passenger traffic continues to be cross-subsidised from revenue generated by goods traffic, there seems to be little justification for the reduction in passenger fares that has been undertaken annually. We cannot quarrel very much with a reduction of Re 1 per passenger for fares upto Rs 50. However, the reduction in AC First Class and AC Second Class fares and a 5% discount across-the-board for Second Class passenger fares above Rs 50 can hardly be justified. The objective of attracting more passengers from low-cost airlines could have been achieved by speeding up trains further, as time is the crucial element for weaning passengers away from air travel. This has become amply clear from the European experience, where the French TGV and the Franco-British/Eurostar have eaten into the airline traffic primarily by reducing travel time.
The reduction in freight charges, nominally by 5% in case of petrol and diesel and higher for fly ash and incremental traffic booked from good sheds and private sidings, is welcome, however. This will reduce industry costs and make Indian producers more competitive. The 6% concession on traffic booked for stations in northeast India is a symbolic gesture that nonetheless is welcome.
This is indeed a popular (populist?) budget, but even here, the tenfold increase in the per capita contribution to the railways staff benefit fund is a real surprise. A number of concessions were announced perhaps to enhance the ministers electoral appeal. These include free monthly season tickets for girl students upto graduation and boy students upto 12th standard; 50% concession for lady senior citizens, increased from 30%; concession to Ashok Chakra awardees along with the existing winners of military valour awards; 50% concession to Aids-affected persons; and the running of a Mother-Child Health Express in collaboration with Rajiv Gandhi Foundation!
While one cannot question the ministers right to award these handouts, in light of the surpluses being generated, it may have surely been better to allocate greater funds to capital investment for modernising and upgrading railway infrastructure. This is necessary because the Indian Railways, though a matter of pride, lags badly behind its counterparts in several parts of the world.
In this context, it is reassuring to hear that construction work on both the western and eastern dedicated freight corridors will commence in 2008-09. It is my hope that similar high-speed corridors both for passenger and freight traffic will be considered for other regions as well. The investment of about Rs 75,000 crore over the next seven years to augment line capacity on high-density traffic lanes is commendable. However, I am a bit disappointed at the inclusion of both the eastern and western corridors within this allocation. This would actually imply that only an additional Rs 15,000 crore will be spent on other projects over seven years. This is not going to be enough to upgrade and modernise capacities on these high-density routes.
Indian Railways represents one of the countrys greatest competitive strengths. The combined network of goods and passenger services, production facilities for locomotives and rolling stock, and all the other related services constitute a system which is perhaps unique in the world. Given its present size and its expected double-digit growth for the foreseeable future, Indian Railways and its allied sectors can emerge as a globally leading sector for India.
It is, therefore, important that the government focuses more attention on technological development and modernisation so that the benefits can be fully exploited It is time now to set our sights on the global railway market!
The author is director & chief executive of Icrier, a Delhi-based thinktank, and member of Indias National Security Advisory Board
Rajiv Kumar
Financial Express
Tuesday , February 26, 2008
Indian Railways is on a roll. The minister justifiably started his budget speech with the announcement of a cash surplus before dividends of Rs 25,000 crore in 2007-08, compared to Rs 20,000 crore in 2006-07. Over the last five years, a total surplus of more than Rs 65,000 crore has been generated. This is quite a turnaround from a situation not long ago where it was unable to even declare a dividend. Not surprisingly, the railways and its minister have become case study in international management schools. Without wishing to take anything away from this splendid achievement, I do wish to point out that the growth in earnings in 2007-08 of both goods and passenger segments were 14%, just in line with the Economys nominal growth rate. This is not, then, an exceptional performance. Merely that it is started keeping up with the rest of the Economy at last. Good, but hardly anything to be complacent about. This implies that despite its good showing, the Railways has perhaps been unable to increase its share in total goods and passenger traffic. It would have, therefore, been better if the railway minister had given us an indication of performance vis-à-vis other means of transport (like road and civil aviation). It is important both from an economic and ecological standpoint to ensure that rail traffic increases its share of overall traffic in India.
Given that passenger traffic continues to be cross-subsidised from revenue generated by goods traffic, there seems to be little justification for the reduction in passenger fares that has been undertaken annually. We cannot quarrel very much with a reduction of Re 1 per passenger for fares upto Rs 50. However, the reduction in AC First Class and AC Second Class fares and a 5% discount across-the-board for Second Class passenger fares above Rs 50 can hardly be justified. The objective of attracting more passengers from low-cost airlines could have been achieved by speeding up trains further, as time is the crucial element for weaning passengers away from air travel. This has become amply clear from the European experience, where the French TGV and the Franco-British/Eurostar have eaten into the airline traffic primarily by reducing travel time.
The reduction in freight charges, nominally by 5% in case of petrol and diesel and higher for fly ash and incremental traffic booked from good sheds and private sidings, is welcome, however. This will reduce industry costs and make Indian producers more competitive. The 6% concession on traffic booked for stations in northeast India is a symbolic gesture that nonetheless is welcome.
This is indeed a popular (populist?) budget, but even here, the tenfold increase in the per capita contribution to the railways staff benefit fund is a real surprise. A number of concessions were announced perhaps to enhance the ministers electoral appeal. These include free monthly season tickets for girl students upto graduation and boy students upto 12th standard; 50% concession for lady senior citizens, increased from 30%; concession to Ashok Chakra awardees along with the existing winners of military valour awards; 50% concession to Aids-affected persons; and the running of a Mother-Child Health Express in collaboration with Rajiv Gandhi Foundation!
While one cannot question the ministers right to award these handouts, in light of the surpluses being generated, it may have surely been better to allocate greater funds to capital investment for modernising and upgrading railway infrastructure. This is necessary because the Indian Railways, though a matter of pride, lags badly behind its counterparts in several parts of the world.
In this context, it is reassuring to hear that construction work on both the western and eastern dedicated freight corridors will commence in 2008-09. It is my hope that similar high-speed corridors both for passenger and freight traffic will be considered for other regions as well. The investment of about Rs 75,000 crore over the next seven years to augment line capacity on high-density traffic lanes is commendable. However, I am a bit disappointed at the inclusion of both the eastern and western corridors within this allocation. This would actually imply that only an additional Rs 15,000 crore will be spent on other projects over seven years. This is not going to be enough to upgrade and modernise capacities on these high-density routes.
Indian Railways represents one of the countrys greatest competitive strengths. The combined network of goods and passenger services, production facilities for locomotives and rolling stock, and all the other related services constitute a system which is perhaps unique in the world. Given its present size and its expected double-digit growth for the foreseeable future, Indian Railways and its allied sectors can emerge as a globally leading sector for India.
It is, therefore, important that the government focuses more attention on technological development and modernisation so that the benefits can be fully exploited It is time now to set our sights on the global railway market!
The author is director & chief executive of Icrier, a Delhi-based thinktank, and member of Indias National Security Advisory Board
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