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Vibrant Gujarat Summit: 21,000 letters of intent worth Rs 25 lakh crore signed
A whopping 21,000 Letters of Intent (LoI) worth an astronomical Rs 25 lakh crore were signed during Vibrant Gujarat Global Investors’ Summit. Along with this, 1,225 strategic partnership agreements were signed during the summit, which saw participation of over 25,000 delegates from 110 countries, said Gujarat CM Anandi Patel at the valedictory address held in Gandhinagar on January 12. “The Gujarat government has signed an agreement with the UN for sustainable energy and a tripartite agreement with the Government of India and World Bank, which will also contribute to the Clean India campaign. While the world is under economic instability, Vibrant Gujarat provides a platform to bring the global economy out of depression. Vibrant Gujarat has taken Gujarat to newer heights and now it is time to take the same platform nationally. The government of India is trying to bring ease of business by bringing in reforms and stable policies,” said Patel. Union home minister Rajnath Singh too congratulated Gujarat on being a business friendly state. “Gujarat is a land of opportunities. There is something in the soil and water of Gujarat that brings miracles,” he said. He lauded the efforts of the state government towards the successful conclusion of the seventh edition of the summit. Ahmedabad-based Adani Group’s chairman said: “This summit is more than an investment summit. It has morphed into a platform to raise, discuss and find solutions to global problems. Adani Group is looking at investing Rs 20,000 crore in Gujarat over the next five years to add 100 million tonne capacity at the ports.” Others who waxed eloquent on the Gujarat model of development included Cyrus Mistry, chairman Tata Group, and Rana Kapoor of Yes Bank, who pledged an infusion of Rs 7,500 crore into Gujarat and over 100 branches over the next two years. The summit also got thumping mandates from partner countries like Canada and the US.
A President, politicians, businesspersons among 15 diaspora members honoured
The list of 15 diaspora members honoured with the Pravasi Bharatiya Samman here Friday includes a president, politicians, prominent businesspersons and scientists who have all worked for the Indian diaspora community in their respective countries. Vice President Hamid Ansari gave away the Samman, the highest honour conferred on overseas Indians, A during the valedictory function of the 13th PravasiBharatiya Divas on January 9 evening at the Mahatma Mandir convention centre. Mala Mehta from Australia was given the Samman for her contribution to Hindi language. She established an 'Indo-Australian Bal Bharatiya Vidyalaya' in Thornleigh suburb in Sydney and since then has been pursuing the growth of Hindi in Australia. Donald Rabindernauth Ramaotar, the President of Guyana, has been awarded for his work for the Indian diaspora in Guyana. Rajaram Sanjaya, an India-born Mexico scientist, is winner of the '2014 World Food Prize' for developing 480 wheat varieties
that have been released in 51 countries. Kanwaljit Singh Bakhshi, an MP from New Zealand, is also known for his work for the Indian diaspora. Essop Goolam Pahad, a South African politician, was minister in the Presidency from 1999 to September 2008 in South Africa. Mahendra Nanji Mehta, a Uganda-based businessman of Indian roots, and Nathuram Puri of Purico Group of Britain were chosen for their contribution to Indian diaspora. Lord Raj Loomba, a philanthropist and founder of clothing company, Rinku Group and a Liberal Democrat member of the House of Lords was also named for the honour. Kamlesh Lulla, chief scientist for Earth observation in the Human Exploration Science Office at the Johnson Space Centre at NASA, was named for the award for his exceptional service to space science.
Nandini Tandon was given the award for her work in life sciences and healthcare and IT in USA and India. Satyanarayana Nadella, CEO of Microsoft, was also named for the honour. Bharatkumar Jayantilal Shah is a Dubai-based businessman and philanthropist; Rajmal M. Parakh is from Oman while Justice Doraikannu Karunakaran from Seychelles and AAshraf Palarakunnummal from UAE.
Sigma, AZ Electronic acquisitions to help Merck consolidate in India
German drugs and chemicals group Merck KgaA, which made a couple of acquisitions in speciality chemicals and pharma solutions space in 2014, expects these deals will help strengthen its position in its newly identified priority markets, including India. The group’s life sciences solutions division Merck Millipore, which has been a leading provider of technology solutions and services to drug makers, will significantly benefit from the $17 billion global acquisition of Sigma-Aldrich Co. Llc to consolidate its position in India, where it has a large customer base. Sigma offers a whole range of products used in the development
and manufacture of drug formulations and ingredients. Merck Millipore has a large customer base including almost all top pharmaceutical companies in India. In early 2014, Merck also purchased AZ Electronic Materials SA, which makes high-purity speciality chemicals for the electronics market, in a $2.48 billion deal to expand its speciality chemicals business. AZ Electronic Materials also had a sizable business and manufacturing facility in India. “The products available in Sigma’s portfolio is completely complimentary to the technology solutions and services currently provided by Merck in India, a priority market for us,” Udit Batra, the new global president and chief executive officer of Merck Millipore, said in an interview on Wednesday. With the Sigma-Aldrich acquisition, Merck expects to achieve annual cost savings of approximately $340 million within three years because of synergies. With the Sigma deal, Merck Millipore will be able to offer its customers a complementary range of products across laboratory chemicals, biologics and reagents in the laboratory and academic business. Sigma has manufacturing and distribution facilities in the US, Australia, Brazil, Canada, Germany, India, Ireland, Israel, Japan, Singapore, Switzerland, Taiwan and the UK. The company also expanded its distribution centre and opened a new packaging facility at Bengaluru in India in 2012. Merck Millipore had in June launched its new process solutions formulation laboratory in India, its first outside Europe. This lab, which is part of a larger laboratory complex, is located at Navi Mumbai, with easy accessibility from the major pharmaceutical manufacturing centres at Ahmedabad, Goa and Hyderabad. The objective of setting up this lab was primarily to assist local clients, using advanced excipients (additives used in pharma formulations) from Merck’s portfolio, with pre-formulation studies. It will also offer the possibility of inviting clients for hands-on training sessions and demonstrations of new technologies in solid dose formulation. “India, as an important pharma-sourcing country, will benefit the most from the availability of services and product capabilities that is accepted globally. The new synergies that Merck could offer in this market will also help the company to tap the maximum potential of the market,” said an industry consultant with a foreign advisory firm, who didn’t want to be identified. Merck’s new growth model that is being enabled through acquisitions and organic options is also part of its recently introduced “Fit for 2018” transformation programme. “With this, we’re also addressing significant market shifts, increasing competition in key product areas among others, and as part of this we will also continue to invest in each of these priority markets that will best suit the local market requirements,” said Batra.
Over 1,200 Japanese firms in India, grow 13 percent in year
The number of Japanese companies registered in India increased 13 percent by 137 and totalled 1,209 as in October last year as compared to 1,072 in October 2013, the Japanese embassy said on January 11. "The total number of Japanese business establishments in India is 3,961 with an increase of 1,419 establishments (56 percent growth) as compared to 2,542 in October 2013," the Japan embassy said in a statement. "The increase in the number of Japanese business establishments during the one year under survey is very large," it added. However, it said that "there were also quite a number of Japanese business establishments which have not been captured in our previous surveys". During Prime Minister Narendra Modi's visit to Japan in September last year, India and Japan agreed to expand their bilateral cooperation in various sectors with Tokyo committing to double its direct investment in India in the next five years from $2 billion in 2013. A delegation of representatives of key economic organizations like Japan External Trade Organisation (JETRO), Japan Bank for International Cooperation (JBIC), New Energy and Industrial Technology Development (NEDO) and Japan International Cooperation Agency (JICA) that visited India in November discussed their interest in the Delhi-Mumbai dedicated freight corridor and Bangalore-Chennai Industrial Corridor with Indian officials.
India-Asean FTA on investment, services starts July 1
India's free trade agreement (FTA) in services and investments with the 10-member Association of Southeast Asian Nations (Asean) will come into effect July 1 following the necessary ratification by bloc members, Malaysia's Minister of Trade and Industry Dato' Seri Mustapa Mohamed said on January 15. Malaysia is the current chair of Asean in 2015 and the Malaysian minister hoped the grouping would get community status by the year-end, which would help deepen and broaden India's relations with Asean. "Malaysia's role in 2015 is to ensure that Asean can be declared a community of nations," Mohamed, who is here on an official visit, told reporters. "By being declared a community Asean will be more attractive as a single market concept. Indian companies can then choose Malaysia as a base to launch into the Asean market with its 620 million people and $2.5 trillion economy," he added. Trade between India and the 10-member bloc was at $76 billion in 2012-13, while both sides have aimed to increase it to $100 billion by 2015 and envisage lifting import tariffs on over 80 percent of traded products by 2016. On the bilateral front, there is much scope to improve on the current level of around $1.2 billion combined investment by Indian companies in Malaysia, which is in a ratio of one to five compared to the $6 billion invested by Malaysian companies in India, Mohamed said. He said though the implementation of the Malaysia-India Comprehensive Economic Cooperation Agreement since 2011 has further boosted bilateral trade, the target of $15 billion turnover appears challenging in the face of the steep fall in global crude oil prices. Crude oil and palm oil comprise 40 percent of Malyasia's exports to India. Mohamed is scheduled to participate in the Confederation of Indian Industry (CII) partnership summit beginning Thursday in the Rajasthan capital Jaipur, where he will meet Commerce Minister Nirmala Sitharaman, potential investors from India as well as Malaysian businesses that already have an establishment here.
Wipro wins $400 million contract from Swiss engineering giant ABB
Wipro has won a $400 million, multi-year IT infrastructure management contract from Swiss engineering giant ABB, making it the largest deal for the technology company since the $1.2-billion contract it received from Canadian utility ATCO last July. The deal win underlines the nation's third-largest IT company's prowess in strengthening its cloud offerings, because it will move a lot of business applications to cloud in addition to maintaining the backend technology of ABB. One executive familiar with the matter said Wipro will maintain the back-end technology operations for Zurich-based ABB for five years although ET independently couldn't confirm the duration of the contract. "Wipro does not comment on market speculation," said a company spokesman. ABB didn't respond to an email seeking comment. Over the past several years, homegrown IT companies have relied on infrastructure
management services for faster growth as the business is perceived to be resilient to economic slowdown, compared with other lines of services. In the same period, Wipro and HCL Technologies, the country's fourth-largest IT firm, have also automated a lot of services, thereby doing away with engineers needed for doing repetitive IT maintenance work. "We are winning large deals and our deal pipeline remains robust," GK Prasanna, Wipro's chief executive for infrastructure management services, told ET last month. "We are winning a large number of contracts against legacy players across geographies as we have made significant investments in strengthening our cloud offerings." Wipro, over the past few years, has strengthened its sales and marketing team even as it has expanded its offerings, including
building intellectual property, to help bring cost savings for customers across industries, according to Prasanna. It had in last May won a multi-year $400-million IT infrastructure deal from Japanese pharma company Takeda.
World Bank: India to be world's fastest growing big economy by 2017
Fuelled by economic reforms, India is projected to become the world's fastest growing large economy by 2017 with a growth rate of seven percent, overtaking China along the way, a World Bank report said on January 13. According to the Washington-based World Bank's Global Economic Prospects (GEP) report, India's gross domestic product (GDP) that grew by 5.6 percent last year, is expected to zoom to 6.4 percent this year before reaching the seven percent mark next year and keep that level in 2017 when China decelerates to 6.9 percent. However, the World Bank warned that for India, "Any slackening in the reform momentum could result in a more modest or slower pace of recovery." The Bangkok-based UN Economic and Social Commission for Asia and the Pacific (ESCAP) in a separate report also projected the Indian economy's growth this year at 6.4 percent. China's economy, which has been growing at a fast clip for several years, is expected to slow down to 7.1 percent this year from last year's 7.4 percent, and decelerate to seven percent next year and 6.9 percent in 2017. The bank characterised China's deceleration as "a carefully managed slowdown". ESCAP's report, Year-end Update of the Economic and Social Survey of Asia and the Pacific 2014, forecast China's growth at seven percent this year. But the international investment bank, Goldman Sachs, expects India's growth rate to nudge past China's a year earlier than the World Bank forecast. Last month Goldman Sachs projected India's growth rate at a slightly lower 6.3 percent this year and at 6.8 percent next year, but ahead of China's 6.7 percent.Behind the growth numbers, though, is the hard fact of the relative sizes of the two economies. China's economy, which in 2013 was $9.2 trillion, is far larger than India's $1.87 trillion and that means India has a long way to go before it can catch up with it. The global economy in contrast to the Asian giants is projected to grow by three percent this year, 3.3 percent in 2016 and 3.2 percent in 2017, according to the World Bank. Last year, it grew by only a dismal 2.6 percent. Growth in developed countries as a group is expected to rise modestly to 2.2 percent this year, up from 1.8 percent last year, and by 2.3 percent in 2016-17. In contrast, the US growth rate is expected to accelerate from 2.4 percent last year to 3.2 percent this year, and slowdown to three percent next year and 2.4 percent in 2017, the World Bank said. The forecast for Euro Area is 1.1 percent growth this year, up from 0.8 percent, and a mere 1.6 percent in 2016-17. Japan's growth is expected to hit 1.2 percent this year, up from 0.2 percent in 2014, and go up to 1.6 percent in 2016. ESCAP projects a 5.8 percent growth rate for the region's economy as a whole, up from last year's 5.6 percent. India's economic growth will be helped along by falling oil prices and by lower interest rates in developed countries and these two factors can be a game-changer for the nation. World Bank Chief Economist Kaushik Basu said, "The lower oil price, which is expected to persist through 2015 is lowering inflation worldwide and is likely to delay interest rate hikes in rich countries. This creates a window of opportunity for oil importing countries, such as China and India; we expect India's growth to rise to seven percent by 2016." "What is critical is for nations to use this window to usher in fiscal and structural reforms, which can boost long-run growth and inclusive development," he added. Both ESCAP and the World Bank saw the low oil prices as an opportunity for cutting fuel subsidies and diverting funds for financing sustainable development while reforming the economy. "This is a particularly critical and opportune time to decrease subsidies," ESCAP Executive Secretary Shamshad Akhtar said. "Reducing subsidies can raise significant public financial resources for productive investment in the region and could make needed funds available for financing sustainable development." World Bank Director of Development Prospects Ayhan Kose said, "For both exporters and importers, low oil prices present an opportunity to undertake reforms that can increase fiscal resources and help broader environmental objectives." The ESCAP report mentioned the "Make in India" campaign as a step to promote structural change that favours manufacturing by making it easier to establish and operate a business in India. The report also took note of the initiatives in India to open bank accounts for 75 million poor households by next month and to boost youth employment by introducing more community colleges and vocational courses, and promoting entrepreneurship. Although India has identified infrastructure development as a key element for its growth plans, ESCAP said it faces a shortage of government resources. Therefore, ESCAP recommended giving the private sector importance in developing infrastructure in collaboration with government. The World Bank report said that reforms and deregulation in India should boost foreign direct investment. It noted that increases in investments, which account for about 30 percent of the GDP, should help raise the nation's growth rate to seven percent by 2016.
Industrial output rebounds in November
Industrial output growth rebounded in November while retail inflation inched up on the back of higher food prices in December but both data sets still held out hopes of an interest rate cut by the Reserve Bank of India (RBI) to boost growth. Data released by the Central Statistics Office (CSO) on January 12 showed industrial output rose 3.8% in November compared to a decline of 1.3% in the previous year ago period and a contraction of 4.2% in October. The rebound was led by an upturn in the manufacturing, capital goods, electricity and mining sectors. Separate data showed retail inflation accelerating to 5% in December, up from the previous month’s 4.4%, largely led by firmness in some food items. But it still remained within the central bank’s comfort zone, raising prospects of a cut in interest rates. “Based on these two data pieces, it does look likely that the RBI will start the process of lowering interest rates by at least 25 basis points in February, “ said Madan Sabnavis, chief economist at Care Ratings. Policymakers have said that growth is poised for acceleration in the months ahead as measures taken to boost growth take effect. The government has launched a serious bid to court investment and the recent investors meet in Guja rat saw large investment commitments in several sectors. Overall growth is expected to be in the 5 to 5.5% range in the current fiscal year and then accelerate to 6-6.5% next year. The industrial output data showed the capital sector, a key gauge of industrial activity , rose an annual 6.5% compared to a 0.1% expansion in the previous year ago period. Consumer durables and consumer goods continued to display weakness with both segments contracting sharply. The consumer nondurables sector showed some firmness, rising 6% in November compared to a 2.2% growth in the year ago period. The retail inflation data showed some items sustained their pressure. Pulses rose an annual 7.2% in December while fruits shot up 14.8% year-on-year during the month. Eggs, meat and fish prices also remained firm. Economists said the timing of an interest rate cut remained open. “On rates, while the fiscal remains a challenge, given the growth-inflation dynamics, we maintain our view of the first rate cut in first quarter of calendar year 2015 and a cumulative 100 basis points cut till FY16, taking the repo rate to 7%, “said Rohini Malkani, economist at Citigroup India. “However, given latest inflation trends outlook and RBI's December policy statement of the possibility of acting `outside the policy review cycle', we wouldn't be surprised if it does cut before the February Budget,“ she said in a note. “There is a sense of optimism in the industry with the steps taken by the government in the last few months and we are hoping that government will continue to push reforms so as to revive manufacturing sector's growth on a sustainable basis, “ said Jyotsna Suri, president of industry lobby group FICCI.
DISCLAIMER
This newsletter is compilation of news articles from various business-e-newspapers and in no way is an endorsement or reflection of Embassy of India, Berne views.
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