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Biz News
March 2009 |
Consulate General of |
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A Monthly News Digest on |
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| India likely to grow 7% next fiscal: Montek | ||||||
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The Indian economy is expected to grow at least 7 per cent in the next financial year on the back of stimulus measures taken by the Government, Planning Commission Deputy Chairman Montek Singh Ahluwalia said. "The world economy expects a recovery in the second half of the next fiscal. In the coming year, India's growth will be at least seven per cent," Ahluwalia told.
"Compared to other countries, we are doing reasonably well we are growing below our potential many sectors are feeling the pain. Right now, the foremost challenge is to restore the growth momentum of the economy," he said. In the second-half of the current fiscal, the economy would have grown at around 6.5 per cent and the growth is likely to be better next year, he added. Courtesy: http://economictimes.indiatimes.com |
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| India records 45 per cent growth in FDI | ||||||
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India received a total of US$ 23.3 billion in Foreign Direct Investment (FDI) between April-December 2008, recording a growth of 45 per cent, said Union Finance Minister Mr Pranab Mukherjee while presenting the interim budget in the Lok Sabha on February 16, 2009. Despite the global meltdown that impacted most emerging market economies, Mukherjee said that India’s GDP growth of 7.1 per cent for the current year would make the country the second-fastest growing economy of the world. "The fallout of global slowdown on Indian economy was countered with fiscal stimulus packages announced in December 2008 and January 2009 providing tax relief to boost demand and increasing expenditure on public projects," he said. The Finance Minister further said that in order to maintain the momentum, the government had approved 37 infrastructure projects worth US$ 14.04 billion from August 2008 to January 2009 and gave in-principle or final approval to 54 central sector infrastructure projects with a project cost of US$ 13.58 billion. Further, the government also approved 23 projects amounting to US$ 5.59 billion for viability gap funding in 2008-09. Courtesy: IBEF |
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India less affected by financial crisis: UBS |
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UBS has upgraded India from moderate underweight to overweight as it feels that valuations have improved substantially and that the Indian economy is less affected by the global financial crisis than most other markets. The foreign financial major, however, does expect further weakness in the coming quarters. Among Asia’s leading economies, China remains UBS’ largest overweight, followed by India, Hong Kong, and Singapore. It advises caution on Korea, Malaysia and the Philippines. Incidentally, it expects growth to contract in Singapore, Hong Kong, South Korea, Taiwan, and Malaysia. The relative strength of the economy, together with the improved valuation, makes us confident that India is one of the more attractive places in Asia, in the current environment, explains UBS. UBS is also more positive on the Indian economy than on those of most other Asian countries because India, with an export-to-GDP ratio of 13%, remains an overwhelmingly domestic-oriented economy. The larger economies, China and India, should fare better in a global downturn as they are more domestic-oriented and, in the case of China, have substantial room for fiscal stimulus, it explains. Nonetheless, it expects growth to decelerate further in China and India in 2009. “Overall, we expect the region to grow by 4% in 2009, rebounding only moderately to 6.0% in 2010,” it adds. On a different note, UBS expects the Asian economic environment to be difficult in 2009 and a recovery in the second half of the year or 2010 is likely to be more muted than previous recoveries. It, however, adds that while economic data continued to disappoint, the size of the disappointments have become smaller as market participants have adjusted to the new reality. Asian equities remain attractively valued in absolute terms and trade close to the long-term average discount of 30% versus global equities. All in all, this makes us more comfortable with exposure in Asia and we have upgraded Asia ex-Japan from moderate underweight to neutral versus global equities. Courtesy: The Economic Times |
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| India surpasses China on engineering goods | ||||||
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The African and Asean countries are shifting their focus from China to India for meeting major supply requirements of engineering goods and equipment. Speaking on the sidelines of the concluding day of the Reverse Buyer Seller Meet (RBSM) organised by EEPC India, R P Sehgal, chairman of EEPC India, eastern region (ER) said, "Though these countries predominantly buy engineering goods from China, but last year they faced some difficulties, so now they want India to be developed as a major second supplier. India is not a small player in the global market." Sehgal claimed that China could not deliver goods on time and prices had shot up radically, thus dissatisfying the countries. India could use its potential in engineering goods, in the areas of valves, water distribution, forging, food processing, power distribution and chemical industry, as highlighted in the previous RBSMs in the other cities, claimed Sehgal. Another key advantage for India was that almost 80 per cent of its units engaged in engineering goods were small and medium enterprises (SMEs), so small quantity orders were not a problem, as opposed to China, which handled only bulk orders, informed Sehgal. "This downturn is actually an opportunity for India, which we should encash upon," he further asserted. Globally India does 1.4 per cent trade of major engineering goods. In 2007-08, India's total engineering exports was $33.3 billion. During the first five months of the current fiscal (2008-09) exports stood at $22 billion. India's engineering exports to the Asean region rose from $12.6 billion in 2006-07 to $15.7 billion in 2007-08, whereas to Africa it has grown from $3 billion in 2006-07 to $3.9 billion in 2007-08. The reverse buyer seller meet, a five day event, had been organised in six major cities starting with Delhi, Chennai, Bangalore and Ahmedabad including Kolkata, with the aim of promoting overall trade and investment of the country. Courtesy: Business Standard |
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Organic tea from Assam set to enter Hong Kong |
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Organic tea produced by traditional communities in
Assam is fast gaining market, globally. After making its presence felt in
Canada, the tea is now ready to enter Hong Kong. The Singpho community,
credited for being pioneers in the discovery of tea, has developed a tea
coin.
The product is sold under the brand name Phalap (tea is called phalap in Singpho language). Two grams of tea are packed in coin shape and can be consumed by dissolving it in hot water. They produce a blend of oolong and green tea. The Singpho tea has already entered the US, Thailand and the UK markets. Nearly 400 kg has been exported to Canada, followed by US with 150 kg, Thailand with 120 kg, UK with 90 kg. A tea trader from Hong Kong has placed an order for nearly 2,000 kg. The product is marketed by Small Tea Co-operative, a Canada-based company. Rajesh Singpho, managing partner of an Assam-based firm, Singpho Agro Products told ET: "We are readying the consignment of 2000 kg for Hong Kong. The value of 1 kg tea will be around Rs 1,000." "Demand for organic tea in European countries is growing very fast. We are planning to increase production this year from present 2,000 kg to 5,000 kg. Since our tea is hand-processed, the labour cost is slightly more. Labourers involved are from the Singpho community," Mr Singpho added. Tea manufactured in Margherita in Upper Assam, the heartland of this community, is based on the traditional method. It is completely organic. Even tea containers are made of bamboo which helps in retaining the aroma. Courtesy: The Economic Times |
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| Spices exports rise 17% in April-Jan 2008-09 period | ||||||
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Indian spices have managed to increase their presence in the global trade during the first ten months of the current fiscal (2008-09) despite a general slowdown in the global economy. Compared to the same period of last fiscal (2007-08), exports have shown an increase of 17% in value and 5% in volume. In dollar terms, the increase is 6%. Exports of pepper and garlic have declined in terms of both volume and value during the period, while chilli, ginger and mint products have declined in volume. During April-January 2008-09, India exported 3,72,125 tonne of spices and products valued at Rs 4,275.11 crore ($956.75 million ) as against 3,54,875 tonne valued at Rs 3,645.32 crore ($904.11 million) in the corresponding period of 2007-08. The export of pepper was at 21,600 tonne valued at Rs 356.10 crore as against 29,700 tonne valued at Rs 433.76 crore exported last year. Volume and value have fallen by 27% and 18% respectively for the period. The unit value of pepper exported has gone up from Rs 146.05 per kg in 2007-08 to Rs 164.86 per kg in 2008-09 due to a global shortage of the commodity. Low inventories in the major international markets due to the economic recession is reported to be a major reason for the decline in exports. During the same period, chilli exports fell in volume by 3%, while managing a value increase of 3%. India exported 1,56,500 tonne of chilli and chilli products valued at Rs 891.54 crore as against 1,60,930 tonne valued at Rs 864.40 crore last year. Traditional buyers of Indian chilli like Malaysia, Indonesia and Sri Lanka are active in the market. It is expected that exports will pick up in the coming months as the new crop comes to the market. Seed spices like coriander and cumin have recorded a considerable jump in exports due to the failure of crop in other regions. Export of value-added products like curry powder, oleoresins and oils have also increased during the period. Curry powder and pastes managed an increase in export volume by 21% and gained a value increase of 52%. Courtesy: The Financial Express |
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Temsa Global to enter Indian bus market |
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Turkish commercial vehicle maker, Temsa Global is looking to enter the Indian bus market, said a person working with the company on its India plans. The firm has undertaken a feasibility study on the commercial potential to set-up an integrated bus making facility in India. The firm may also consider forming a joint-venture with a local group to kick-start its India operations. Temsa is looking to introduce its long-distance inter-city coaches under the Safari brand for the urban markets. Such coaches dominate the 50,000 units-a-year Indian bus market. Currently Tata Motors and Ashok Leyland are the top players in the product segment. The Turkish firm is looking at high local content in its buses and its officials have met more than 30 Indian component suppliers to develop a vendor base in the country. It is scouting local vendors for major components like gears, engines, seats, glass, axles and metal parts. Besides Turkey, Temsa has manufacturing operations in Egypt. The bus plant in Egypt which was established recently, takes care of North Africa, Middle East and Gulf markets. Temsa is looking to develop India for the local market besides the neighbouring countries and the South East Asian markets. Globally, Tesma has a turnover of $900 million and sold over 1,400 buses in 2008 with major sales coming from Germany, France, Italy, Spain and Belgium. The bus market in India is likely to get major boost as the government has proposed to modernise the existing public transport system and is looking to purchase 15,000 new buses under the Jawaharlal Nehru National Urban Renewal Mission. In the interim budget the central government provided Rs 4,500 crore to procure 4,175 buses to modernise public transport system in various states. Courtesy: The Economic Times |
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After Ford & Hyundai, GM to make India export hub |
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Taking a cue from Ford India, Hyundai and Maruti Suzuki, General Motors is planning to make India its hub for exporting engines, powertrains as well as cars to neighbouring countries, the US and Europe. Despite the slowdown and funds crunch, GM India hopes to match last year’s growth of 10% even though the industry is expected to remain flat. The company, in addition to the launch of the new sedan (above Optra) Chevrolet Cruze and a premium mini car (on the same lines of Spark), will launch a number of different fuel models of the existing platform in India during 2009, said Karl Slym, president and managing director, GM India. Disclosing this in Chennai on Thursday on the sidelines of the launch of its new Captiva and Spark Music cars, he said, “Given the cost advantage and other positive options, GM will look at exporting engines as well as cars out of India to global markets. We have been exporting cars to Sri Lanka, Nepal and Bangladesh in a small way. Once the market sentiment improves, the company will think of exporting in a big way.” According to Slym, the company has already invested in producing 2,25,000 cars per annum across its two plants in Halol of Gujarat and Talegaon, Pune. The company has also invested in manufacturing engines/power trains with various options (diesel, petrol and other alternate fuels) keeping in mind the long-term perspective. P Balendran, VP, GM India, said, “We are looking at exporting engines as well as cars to the global markets. We will wait for the market to improve and accordingly start tapping the overseas markets. Exports is considered to be one of the key growth area for GM India over a period of time.” Courtesy: The Financial Express |
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India still a good bet for foreign investors |
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Even in the midst of a global downturn India is attracting one billion dollar foreign direct investment in a month, which is "encouraging", Secretary in the Department of Industrial Policy and Promotion Ajay Shankar said. Though the overseas inflows have sharply dropped after September this fiscal, the trend has to be seen in the context the credit freeze in major economies of the world, he said.
"We are still one billion dollar plus every month... that is when there is huge financial difficulties in the world.
That is very encouraging," the DIPP Secretary told.
FDI inflows till September averaged between USD 2.5 and USD 3 billion a month. "This (drop in FDI) has to be seen in the context of 2003-04," he said. The country received USD 3.13 billion in 2003-04 while in 2008-09, the monthly inflows averaged above USD 2 billion. Courtesy: http://www.financialexpress.com |
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Now, IT cos move from offshoring to advising strategy |
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From doing bits and pieces of design and testing on the electronics inside, a few Indian software firms are now partnering with their overseas clients to help them launch medical equipment and other devices for the Indian market. Firms, HCL Technologies, for instance, have moved on from being offshore providers to becoming advisors on emerging market strategies for clients and even designing and manufacturing the final product. Others like Tata Consultancy Services (TCS) and MindTree, which were earlier doing verification and support for semiconductor vendors, are now partnering with them for end-to-end chip and product design. “There are 4-5 firms here that are currently working on this model. What we are seeing, especially in industries like medical equipment and automotive, is that the manufacturer washes his hands of completely. The Indian IT firm handles everything from where to buy the chip to where to manufacture. This is more of an exploratory model, but if it works, we could see more such instances,” said Gartner Research principal research analyst Ganesh Ramamoorthy. HCL’s life sciences division has partnered with IIT Kharagpur; MIT, Apollo Hospitals and Doctor Kares Hospital. It is now taking this ‘cradle to grave’ model to other BRIC countries. “A US company wanting to launch a portable sugar monitoring equipment in India may outsource the entire design to the Indian firm,” said Mr Ramamoorthy. “Semiconductor vendors looking to develop new products in niche segments such as automotive and medical devices for emerging markets, should either consider end-to-end outsourcing and product design or negotiate an equal risk/ reward partnership with Indian design services vendors,” he added. Courtesy: Economic Times |
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Indian pharma sector to remain stable, says Fitch |
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:At a time when the international rating agency Fitch has downgraded its outlook for European and US pharma sectors, it expects the Indian pharma sector to remain stable during the current year 2009. Partially, this stability has been attributed to the very factors that have led the rating agency to forecast a negative outlook for the matured sectors in regulated markets of developed countries. Fitch has pointed out that the pressures arising out of weak global economic environment coupled with a weaker rupee and a wave of mindset change in governments across the world which are now migrating to pro-generic attitude to reduce healthcare spend will translate in higher export orders for the low-cost Indian generic drug makers and an increased demand for low cost contract research and manufacturing activities (CRAMS).
“The inherent stability of demand for core pharmaceutical products and the likely support from global demand for low-cost Indian generics compared to their branded counterparts will keep the Indian pharma companies afloat,” said Priyamvada Balaji, director, Fitch Ratings.
Courtesy: http://www.financialexpress.com |
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Pharma retail market grows 15% |
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The domestic pharma retail market has started the year with a bang, recording nearly 15% growth in January. The market had grown by nearly 10% during January-December 2008, and over 13% in December alone. There was no major change in rankings of pharma companies in January in terms of market share, with Cipla garnering the largest, followed by Ranbaxy and GlaxoSmithKline at third position, according to consulting company, ORG-IMS. Piramal Healthcare was ranked fourth, followed by Zydus Cadila at the fifth slot in terms of market share. During January, Pfizer moved up two ranks to the 10th position among companies with the largest retail sales in the market. Abbott (rank 12), Dr Reddy's Labs (rank 14), Intas Pharma (rank 18) and Micro Labs (rank 20) gained one rank each, as against December last year. The domestic retail market valued at Rs 2,908 crore in January, has been recording a growth for the last three consecutive months since November 2008, after a slight blip in October. The value growth for 12-month period ended January (moving annual total basis) was 9.9%, which is almost the same as December's growth of 9.8% (as per December MAT). Industry experts pointed out that pharmaceuticals and healthcare are recession-proof sectors, and will keep growing at a steady pace over the next few months. In January, pain killer drug, Spasmo-Proxyvon was the highest gainer in ranks, amongst the largest selling drugs, moving up from the 24th slot in December to the 18th. The other major gainers are vitamin supplement Revital, having moved up from the 11th slot in December to seventh position in January, and iron supplement Dexorange, gaining four ranks (rank 11 as per January '09). Zinetac used to treat peptic ulcer moved up three slots to the 14th position, up from rank 17 in December. Among the therapeutic areas, cardiovascular segment recorded a 14% growth, while anti-infective medicines grew 10% during the month. Courtesy: The Times of India |
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Some Important Websites |
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Directory
of Official Websites of Government of India: www.goidirectory.nic.in ; National
Portal of India: www.india.gov.in ;
Ministry of External Affairs: www.meaindia.nic.in
; Ministry of Finance: www.finmin.nic.in
; Ministry of Commerce & Industry: www.commin.nic.in ; Ministry of
Tourism: www.incredibleindia.org ;
India Brand Equity Foundation: www.ibef.org ; Confederation of Indian Industry
(CII): www.ciionline.org ; Federation
of Indian Chambers of Commence & Industry (FICCI): www.ficci.com ; Associated Chambers of Commerce & Industry: www.assocham.org ; Federation of Indian Exporters Organization: www.fieo.com ; India Trade
Promotion Organisation (ITPO): www.indiatradepromotion.org
; Indo-Arab Chamber of Commerce &
Industry: www.iacci.org ; Trade-India.com: www.trade-india.com ; Indian Exporters: www.indianexporters.com ; Exporters
India: www.indiamarkets.com
; India Mart: www.indiamart.com
; Financial Express: www.financialexpress.com
; Economic Times: www.economictimes.com
; Business Standard: www.business-standard.com |
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Edited by:- Mr. Cyril Tigga, Consul (Commercial) & HOC
Prepared by:- D.P. Pramod Kumar & Amjad Shareef Consulate General of India, Jeddah |
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