Manish namdev

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VDMA-Newsletter “Indien”, Ausgabe 01/2013

Kontakt: Oliver Wack, Telefon: +49 69 6603-1444

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INDIA Contact: Rajesh Nath, Managing Director

Jamly John, Regional Manager - West

Telephone: +91 33 2321 7391

Fax: +91 33 2321 7073

E-mail: [email protected]

The Economic Scenario

Economic Growth The economy is likely to witness a growth rate of 6.8% in 2013 driven by the reform push of the government. India's GDP is likely to register 5.5% growth during 2012, much below the expansion level achieved in the previous year. However, growth is expected to revive in the next year. GDP is likely to clock a growth rate of 6.8% during 2013 as policy environment improves, investment conditions revive and inflationary pressures abate. India's growth rate had fallen to nine-year low of 6.5% in 2011-12 fiscal. The economy grew by 5.3% in the July-September period this year, while in quarter ended June 30; the economy grew by 5.5%. The year 2013 is likely to see resurgence in the industrial activity and modest upturn in the services sector which would support revival in growth levels. The pace of reforms that has been started must continue uninhibited and needs to be effectively implemented so that it translates into tangible investment decisions. In order to boost investment activity and overall growth momentum, the government initiated a slew of reforms like -- allowing FDI in multi-brand retail, aviation and broadcasting, hiking diesel price, capping the number of subsidised LPG cylinders, opening up pension sector to foreign investment and raising the FDI cap in insurance to 49%. The Foreign Investment Promotion Board (FIPB) has cleared foreign direct investment (FDI) proposals worth € 43.08 million (Rs 280 crore). Among the key proposals that got a nod for allowing FDI investments is Ivy Cap Ventures proposal to allow NRI investments through the normal banking channel.

01/2013

Please Note:

1 crore = 10 000 000

1 lakh = 100 000

1 Euro = Rs.65

Indian Economic and Industrial Scenario, Jan 2013 VDMA INDIA Office


Kontakt: Oliver Wack, Telefon: +49 69 66031444

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The FIPB also approved downstream investments of Spanco Power Distribution. While IT major Wipro got approval for transfer of shares by way of swap. This was consequent to demerger of non-IT activities. GPX India got clearance to issue equity shares to foreign collaborators against import of capital goods. FIPB deferred the proposal of Yalamanchili Software Exports for share swap. RBI is expected to start easing policy rates from January 2013 in cognisance of the moderation in demand side pressures to inflation and greater than anticipated slowdown in growth. Easing of policy rates will be conducive for the investment of the domestic economy. Though inflation levels are much above the Reserve Bank's comfort zone of 5 - 5.5%, it is showing some signs of easing in recent months. Expressing India’s commitment to fiscal prudence, the Government will contain deficit at 5.3% of GDP in the current year, and bring it down to 4.8% in 2013—14. The Government is committed to lowering the fiscal deficit by 0.6% every year for the next five years. Rising expenditure on subsidies has put pressure on Government finances. This has prompted the Government to raise the fiscal deficit target for the current fiscal to 5.3%, from 5.1% announced in Budget. Already, the spate of reform initiatives launched since August last year has brought some comfort to the foreign investors. There is some investor confidence returning after policymakers took some big missteps in last budget, leading to negative business sentiments. The proposed introduction of GAAR and retrospective amendments to bring indirect share transfers to tax had irked foreign investors. Clearly, India's policy momentum has been significant since August and the market has also responded with 22% jump in dollar terms. Fuelled by strong growth prospects and easy liquidity conditions, private sector investors are expected to pump in € 0.82 trillion ($1.11 trillion) into the emerging markets including India in 2013. An international lobbying group for financial firms, private capital flows to emerging economies would rise to € 0.82 trillion ($1.11 trillion) in 2013, a 3.5% growth from an estimated $1.10 trillion last year. The flows are expected to rise further to € 0.85 trillion ($1.15 trillion) next year. The private capital flows to emerging Asia including India, China and Indonesia should remain close to their 2011 high of € 404.78 billion ($547 billion). The share of emerging Asia in total private capital flows should average 46% in 2013 and 2014, just short of the 50% in the previous two years. FDI inflows to India will be lifted by the opening up of previously closed sectors and the withdrawal of controversial tax plans, although infrastructural deficiencies and administrative hurdles will remain dampening factors. The improvement in global sentiment from the third quarter of last year is reflected in revived foreign interest in the region’s stock markets. In India, the resumption of the reform programme is on course to lift foreign purchases of domestic stocks to € 15.54 billion ($21 billion) in the fiscal year ending March 2013 from € 5.62 billion ($7.6 billion) in 2011-12. After investing € 17.76 billion ($24 billion) in Indian equities in 2012, foreign investors have so far infused € 2.07 million ($2.8 billion) in 2012. There had been a strong revival in flows into the emerging economies since mid-2012, even though overall investment dipped slightly to € 0.81 trillion ($1.10 trillion) last year from the 2011 level of € 0.79 trillion ($1.08 trillion). The overall inflows in 2012 were slightly lower than in 2011, despite a strong pick-up in momentum in 2012 H2, partly driven by the unfolding dramas in the Euro Area (where stresses peaked in late July). However, the capital flows to Latin America and emerging Asian economies are now 30% above the level in 2007, before the global financial turmoil. India’s economic situation is expected to change for better in the coming months, although the fiscal deficit target set by the Government seems to be unachievable in the current scenario. The economic situation has somewhat turned better in the last six months. Further, there is an expectation of situation to be much better in the short- to medium-term horizon at both industry as well as firm level.




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Industry Scenario

Steel

India retains 4th spot in steel output with 76.7 mi llion tonnes India’s rank in the world order of steel production remained unchanged at fourth slot with an output of 76.7 million tonnes, despite logging the highest growth of 4.2% among major producing nations in 2012. There was no change in the top three steel producing nations with China, Japan and the US retaining their slots in the respective order in 2012. India was world’s fourth largest steel maker in 2011 and 2010 as well with a total production of 73.6 million tonnes steel and 69 million tonnes respectively. It had clinched the third spot in 2009, but the US grabbed the slot since 2010. India’s growth in steel output was, however, the highest at 4.3% in 2012 among top five major steel producing nations.

20% safeguard duty on stainless steel import from C hina The Indian government has imposed safeguard duty at a rate of 20% on imports of a certain variety of stainless steel from China to protect domestic players. The duty has been imposed on hot rolled flat products of stainless steel-304 grade (up to a maximum width of 1605 mm). The safeguard duty will be effective for a period of 200 days from the date of the notification, unless revoked, superseded or amended earlier. Safeguard duty is a WTO-compatible temporary measure that is brought in for a certain time-frame to avert any damage to domestic industry from cheap imports. The government currently levies 5% import duty on imports of stainless steel. India has a surplus stainless steel production capacity at about 3.5 million tonnes per annum. Of this, about 0.8 million tonnes per annum gets exported. Despite this, the industry estimates that imports from China, amounting to about 2.5-3 lakh tonnes in a year, are taking place largely due to cheaper rates offered by the Chinese manufacturers. China currently produces about 12-13 million tonnes per annum, which is much more than their consumption at about 9 million tonnes per annum. The Chinese production is expected to rise to 20-25 million tonnes per annum in two-three years. Among the domestic producers, Jindal Stainless, with a capacity of 1.8 million tonnes per annum, accounts for about 50 % of total domestic production. Other major players include Salem Plant of SAIL, Viraj Steel and Mukand Ltd.

Jindal Steel bags € 76.92 million (Rs 500 crore) or der from Power Grid Jindal Steel and Power (JSPL) has received € 76.92 million (Rs 500 crore) order from Power Grid Corporation of India (PGCIL) for supply of 80,000 tonnes of steel. The PGCIL will use this steel in setting up two transmission towers in Southern India. The company will supply rolled back angle sections for tower packages associated with 765 KV d/c current Vamgiri—Khammam—Hyderabad transmission line and 765 KV d/c Nagapattinam—Salem—Madhugiri transmission line. Jindal Steel was emerged as the lowest




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bidder for the order. Also, JSPL further reinforces the strength, credibility and tenacity of the company’s products.

Bhilai Steel inaugurates new - end foraging plant f or hi tech rails Bhilai Steel Plant has inaugurated a new end-forging plant at its Rail & Structural Mill for forging of thick web assymetric rails. The new unit was inaugurated in January. The new end-forged ZU - 1- 60 profile of rails would be used to manufacture track switches for the Indian Railways. This new unit is slated to be an important milestone in the field of import substitution. SAIL's Bhilai Steel Plant, the sole supplier of rails to Indian Railways including long rails in lengths of 130 and 260 metre, has begun commercial production of this new profile of rails. At present, this profile is being imported by Indian Railways. The new end-forging plant has been installed at a cost of € 7.01 million (Rs 45.54) crore successful development of the thick web assymetric rails and installation of end forging facilities has bolstered SAIL's strength in meeting the requirements of Indian Railways.

Automobile

Indsur to set up an engine block facility of € 19.2 3 million (Rs 125 crore) in Gujarat Indsur group would set up a facility for auto engine block making in Vadodara at an investment of € 19.23 million (Rs 125 crore). It will be the first fully automated plant for manufacturing engine blocks in Gujarat, which is fast developing into an auto hub. The facility will produce 4-cylinder blocks, tractor blocks compressor housing and similar products, and will have an annual production capacity of 30,000 tonnes.Gujarat is a paradise to create these facilities given the presence of large automobile companies. Indsur's global presence will help create and develop world-class infrastructure in this fast-growing space. The company has entered into a tie-up with a US-based engineering firm to lead the design and engineering of these facilities. Indsur Group also has established a product engineering cell at Houston, Texas ( USA) to develop existing as well as future products. The group already has facilities for manufacturing gear and gear components for automobiles in Aurangabad, Mumbai and for insulator castings in Vadodara and China.

Indian auto components industry could outpace China in the coming years The Indian auto and auto components industry can be expected to surpass China's growth path by 2021. India is pegged annual growth for the industry at the rate of 12% from 2012 to 2021. The industry is in a comfortable position to beat this estimated growth rate driven by robust demand from OEMs or original equipment manufactures coupled with growth in the replacement market as vehicles age and exports improve with scale, as was seen in China. An analysis of per capita income and auto sales from 1991 to 2011 suggests that automobile sales growth is highly dependent on per capita income and can be predicted with a high level of confidence by using that measure as an independent variable. India is seven years behind China and possesses similar economic traits to those seen in China in 2003-04, when per capita income stood at € 2590 ($3500) on a PPP basis, where India currently stands




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today. After this point consistent growth of not less than 30% in car sales was seen. Based on this premise, companies with a technological edge, global scale advantage or dominance of a niche such as Bosch, Motherson Sumi and Balkrishna Industries are set for tremendous growth.

Cheaper spares to benefit Toyota, Honda, Nissan, Fo rd as import tariffs from Asean to fall by 50% The new year is expected to give automobile industry some respite, as import tariffs for critical components imported from the Asean block, India's largest trading partner, are slated to halve from January, thus cushioning the impact of incessantly rising costs of auto components. Automakers were reeling under a hike in prices on five occasions in 2012. Carmakers such as Toyota, Honda, Suzuki, Ford and Nissan are likely to be the key beneficiaries when the lower tariffs kick-in. The lower tariffs will cover major components such as brakes, gears, airbags, fuel tanks, suspension system, steering systems and seat belts. The tax will be halved to 5% from January onwards, from the existing 10%. The tax would finally be eliminated when total exemptions under the Indo-Asean free trade agreement (FTA) for these critical parts take effect in December 2013. Indian automakers have been increasing imports from Asean and China to drive benefits of cheaper priced components. The imported auto components form over 30% of the total Indian domestic market. Imports from Asean countries have also shown rising trend with Thailand leading the pack and emerging as the largest exporter of engines. Around 32% of engines imported by India, especially in the diesel segment, come from Thailand with major importers being companies like Toyota Kirloskar Motors and Ford India.

Indians to lookup to Lamborghini soon Lamborghini, the maker of super sports luxury cars from the Volkswagen Group, has launched its Aventador Roadster model in India at € 0.73 million (Rs 4.77 crore). The car has been selling well the world over, and the company hopes it do well in India too. They are focusing on getting the right products and creating the right network with proper penetration. They expect the market to grow steadily and consistently and the Indian market has been growing for Lamborghini. They grew 21% in 2012 selling 17 cars and hope to grow faster in 2013. They expect the market which is 100 units-strong currently, likely to grow five-fold to 500 units. As per the trend in the past, the customers have been moving up to premium brands like Mercedes Benz, BMW and Audi. The next step is Porsche and then super sports luxury cars like Lamborghini and Ferrari. They are already present in the Mumbai and Delhi markets with their exclusive showrooms and planning to set up showrooms in Chennai or Bangalore this year. The company forsees India to be among the top 20 countries for Lamborghini in the next five years, from the top 50 currently. From 1% of our total sales it could grow to at least 3-4 % in the next five years.

Tata starts making Jaguars in Pune To make its cars more affordable for Indian buyers, Mumbai-based Tata Motors has started assembling the Jaguar XF at its new facility in Chakan near Pune. This has allowed the company to offer the luxury saloon at € 6.85 lakh (Rs 44.5 lakh) (ex-showroom, Mumbai), pitting it directly against the BMW 5 series and the Mercedes Benz E Class. So far, the Jaguar XF was imported from the UK as a fully-built unit. The car was launched in the country in 2010 for € 7.44 lakh (Rs 48.37 lakh). However, subsequent increases in import charges led to a rise in its prices. The Jaguar XF is Jaguar Land Rover’s second model to be assembled in India. In May 2011, the company started manufacturing the Land Rover Freelander 2 at the Chakan assembly plant. Jaguar XF models manufactured at Chakan would have the 2.2-litre diesel engine; this is the first time such engines would be available in the Indian market.




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Power

HHV Solar to double capacity to 60 megawatt Armed with € 3.38 million (Rs 22 crore) that it will get from Swelect Energy Systems (formerly, Numeric Power Systems), Bangalore-based HHV Solar plans to double its solar module manufacturing capacity to over 60 megawatt. HHV has sold 49% stake to the Chennai-based Swelect Energy. HHV Solar manufactures solar modules of crystalline silicon technology. Swelect is a leading solar power systems integrator, which has built over a 1,000 rooftop solar projects across the country, and has put up two 1 megawatt ground-mounted plants. In February 2012, the company divested its core UPS business to Legrand of France for € 128.77 million (Rs 837 crore). Last year, the company spoke of plans to enter into storage solutions also, riding over the rich experience as UPS manufacturers. Therefore, in Swelect, HHV Solar has a captive customer. HHV Solar achieved a turnover of € 14.62 million (Rs 95 crore) last year. HHV Solar also has another business — it manufactures equipment to produce solar modules based on amorphous silicon technology. It also produces some amorphous silicon modules.

Welspun Energy commissions 15 megawatt solar plant in Rajasthan Welspun Energy Ltd has commissioned a 15 megawatt solar photovoltaic power project in Rajasthan, well ahead of time. The € 2.22 billion ($3 billion) Welspun Group has been developing and operating power projects across India. In Maharashtra and Gujarat, it is operating 64 megawatt power plants. The company won three projects worth 50 megawatt capacity at the auction under the Jawaharlal Nehru National Solar Mission, and has completed the first. The remaining two projects of 15 megawatt and 20 megawatt are close to completion and adding that the entire 50 megawatt capacity would be commissioned in the coming weeks, much ahead of their contractual schedule due in February. The 50 megawatt solar projects would reduce carbon emissions to the extent of 78,000 tonnes annually. The projects are situated in Phalodi Tehsil of Jodhpur district in Rajasthan. The three solar projects are expected to generate total electricity of 90 million kWh in a year. Welspun had quoted a tariff of € 0.12 (Rs 8.14) unit for the first 15 megawatt unit. The 50 megawatt projects are set to produce energy enough to light up 2.5 lakh homes. The company has also won a 130 megawatt solar PV project in Madhya Pradesh, which will be the largest solar project to be developed by any company in India. The project would be commissioned by end of 2013. The company is also developing 2,000 MW thermal plant in Madhya Pradesh; 660 MW plant in Maharashtra; 200 MW solar plant in Rajasthan; 100 MW solar power plant in Gujarat and 100 MW solar power plant in Madhya Pradesh. Over the next three years, the company expects to generate 6,000 MW of thermal power, 500 MW of solar power and 500 MW of hydro power.

Tata Power looking for more hydro projects Tata Power is actively looking at opportunities to develop hydro projects as part of efforts to boost its renewable energy portfolio which is expected to make up about one-fourth of its overall generation capacity by 2020. The country's largest private power producer is already developing hydro projects in India, Nepal and Bhutan. At present, Tata Power has a hydro power generation capacity of 447 megawatt in Maharashtra.




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Tata Power and Norway-based SN Power's joint venture is developing an 880 megawatt hydro project in Tamakoshy, Nepal. The entity has also bagged the 240 megawatt Dugar hydro electric project in Himachal Pradesh. Further, Tata Power is implementing the 114 megawatt Dagachhu hydro project in Bhutan. Tata Power has aggressive plans of generating 26,000 megawatt by 2020 and intends to have a 20-25% contribution from 'clean power sources' which will include a mix of hydro, solar, wind, geothermal and waste gas generation. Currently, the company has an installed generation capacity of 7,700 megawatt. In the renewable energy segment, besides hydro, Tata Power is working on various solar, wind, geothermal and waste gases-based power projects. It has an operational capacity of 375 megawatt in wind energy and 28 megawatt in solar power.

Suzlon wins order for 22 megawatt of turbines Wind turbine maker Suzlon Energy has signed a contract for a 21.75 megawatt project with Sri Kumarswamy Mineral Exports Private Limited (SKMEPL), Bellary. The project comprises nine units of Suzlon’s S66 – 1.25 megawatt and five units of Suzlon’s S88 – 2.1 megawatt wind turbines. The project is set to be commissioned in the Dindigul and Tirunelveli district of Tamil Nadu by the end of March 2013. SKMEPL has an existing installed capacity of 29.25 megawatt from wind energy projects developed by Suzlon, operating in sites across Karnataka, Tamil Nadu and Maharashtra. This new order will augment the existing renewable energy portfolio.

Paper & Printing

Dependence on paper imports set to rise With 8% annual consumption growth amid almost no fresh capacity additions, the country’s supply deficit in paper is likely to widen in the coming years. Of the € 5385 million (Rs 35,000-crore) paper industry’s annual operating capacity of 12.75 million tonnes, output in 2011-12 was 11 million tonnes against the consumption (including newsprint) of 11.23 million tonnes, a deficit of 0.23 million tonnes. The deficit would widen to hit 1.25 million tonnes in 2013-14 and around 2 million tonnes by 2015-16. India’s paper consumption to hit 14 million tonnes by 2015-16 and 20 million tonnes by 2020. The estimated yearly rise is a million tonnes. However, manufacturers have failed to announce any significant capacity additions. A major reason is rising cost of production due to the lack of a captive plantation policy, unlike in North and Latin America, Scandinavia, Australia, Japan, Indonesia and China. Mills in India have to depend on small and scattered plantations or government-controlled forests for pulpwood. In the process, at times the cost of collection and transportation works out to be greater than that of the pulpwood. The total input cost has made the industry most uncompetitive in comparison to the major producers of the world. The subdued global economic scenario, particularly in the US and Euro zone is currently impacting the world paper market. In this backdrop, India presents an exciting destination. The paper consumption is poised for a big leap forward, in sync with economic growth, and would overtake the gross domestic product growth rate as had happened in other economies at a similar point. Consequently, paper import is set to increase. India imports only certain speciality papers and paper board, mainly coated varieties and art paper. From 0.3 million tonnes of paper and paper board imports in 2005-06, inward supply rose to 0.5 million tonnes in 2010-11, around 5% of the total consumption of paper and paper board. Almost similar quantities of paper/paper board are exported.




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In newsprint, the country imports more than half its demand; it also exports a very small quantity. During 2010-11, nearly 1.22 million tonnes was imported against total consumption of around 2 million tonnes. About 9,000 tonnes was exported. Companies here fear that major competitors from Indonesia and China are set to push large quantities into the lucrative Indian market. The developed economies, traditional importers, face renewed signs of economic recession. And, while the US and European Union have punitive import duties, India does not. The paper industry is both energy-intensive and resource-intensive. Innovation to overcome these challenges will drive the future of the industry.

HP strategizes for digitizing the folding carton ma rket in India HP has been working on its strategy to capitalise on the trend of digitisation in packaging and labels. Folding cartons is a segment, which according to HP has tremendous growth opportunity. The packaging in the coming few years will play a very critical role in the off-shelf shopping. HP (Asia Pacific and Japan) has towed the same line and stated that HP will be concentrating not only on the press but also the post-press segment catering to the packaging segment.

Flint Group to inaugurate new manufacturing plant i n Vadodara Flint Group India, the ink manufacturing giant has shifted its manufacturing plant from Bengaluru to Vadodara. The new Vadodara plant will be inaugurated at the end of January 2013. With a rapidly growing packaging industry in India, Flint Group is keen to cater to customers in this market. They already have an ISO 9001-2000 certified mother plant for packaging inks in Bangalore and blending units in Baroda, Noida and Savli, supported by depots at Pondicherry, Kolkata, Hyderabad and Navi Mumbai and are proud about the fact that they are in a position to support the market even further with their new plant in Savli. The Vadodara plant meets European standards in terms of processes and safety. It consists of separate areas for the manufacturing of water-based, toluene-based and toluene-free solvent-based inks. Next to the expansion of its packaging inks manufacturing operations in Poland and the acquisition of Torda, this is another important investment in a growth region for Flint Group’s Packaging and Narrow Web division this year demonstrating its strong commitment for continuous growth in the packaging segment.

Ports & Shipping

ABG Shipyard plans to spend € 769.23 million (5000 crore) for Gujarat Coastline In an endeavor to improve the coastline of the state of Gujarat, largest Indian ship-building giant, ABG Shipyard Ltd., is all set to endow a sum of € 769.23 million (Rs. 5000 crore). This initiative, the third of its kind in Gujarat from ABG, is likely to generate jobs for 4500 people approximately. Apart from this, Dahej and Magdalla are other spots in line where ABG plans to put in an expected sum of € 307.69 million (Rs. 2000) crore to develop its amenities there. The




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shipyards at both these sites are quite large already, the Magdalla yard at Surat being quite more refined with a wde variety of facilities at the same time.

L&T bags additional order from Defence Ministry for 18 interceptor boats L&T has received an order valued at € 68.77 million (Rs 447 crore) from the Defence Ministry for the construction of 18 high-speed interceptor boats for the Coast Guard. This follows the earlier contract worth € 150.31 million (Rs 977 crore) for 36 similar vessels. With this order, L&T is positioned as the foremost Indian shipyard in terms of capability to indigenously design and construct the largest number of Interceptor Boats for the India’s Ministry of Defence. Designed and constructed by L&T entirely in-house capability, the first of these boats has already been delivered to the Indian Coast Guard. The interceptor boat is a ‘planing craft’, capable of achieving speeds exceeding 40 knots. Built with a full aluminium-alloy light-weight hull, it is powered by a twin water-jet propulsion system to enable quick response — crucial for coastal surveillance. The boats are expected to significantly enhance the country’s coastal security.

JNPT box terminal project to get € 67.69 million (Rs 440) crore FDI DP World, the Dubai Government-owned port company, will make an equity investment of Rs € 67.69 million (440 crore) in the recently awarded container terminal project at Jawaharlal Nehru Port. The Foreign Investment Promotion Board has cleared the investment proposal of Hindustan Ports Pvt Ltd, a company newly constituted in India by DP World, to implement the project. The cost of the project — a 330-metre berth — originally estimated at Rs 600 crore, is expected to exceed € 138.46 million (Rs 900 crore). The berth will have the capacity to handle eight lakh TEUs per annum, which could be augmented to one million TEUs, with better equipment and deeper draught. DP World, the lone bidder, was awarded the project after agreeing to share 29.09% revenue with the landlord port. The concession agreement is expected to be signed by end of this month. The bidder hopes to complete the project in less than two years. This will be the second project of DP World at JN port . The company already owns and operates a container terminal — Nhava Sheva International Container Terminal at the port. DP World, reportedly looking at restructuring its operations in India, may bring all its local assets under one company — Hindustan Ports. The company owns four container terminals in India — NSICT at JN port, Mundra in Gujarat, Chennai terminal and Vallarpadam Transhipment Terminal at Kochi.

Garment and Leather

Textile majors Vardhman, Oswal to foray into state The spinning industry in Gujarat is set to witness foray of major North and South Indian players like Vardhman, Oswal Spinning and Cosmo Group as part of the summit in Gujarat. At an anticipated investment of over € 1076.92 million (Rs 7,000 crore), the summit will see commitments for close to 3 million spindles, exceeding the state government's target of 2.5




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million spindles. It is not only players from outside the state like Vardhman and Oswal Spinning that have evinced interest for setting up spinning units but also within Gujarat. For the next five years, the state government has set a target of installing 2.5 million spindles, commitments for which it believes will exceed during the summit. They are anticipating MoUs for over 3 million spindles worth over € 1076.92 million (Rs 7,000 crore). Major players from North India like Vardhman, Oswal Spinning and a consortium of 50 spinners from South India under the Cosmo Group have also evinced interest among these. The state government has also come up with a textile policy with a five 'F' focus including 'Farm to Fibre to Fabric to Fashion to Foreign'. Earlier in September 2012, Gujarat had announced Gujarat Textile Policy 2012. Titled as 'Navi Gujarat Vastraniti', the policy looks to attract investment of over € 3076.92 million (Rs 20,000 crore) as well as creating new employment opportunities for over 2.5 million people in next five years. Gujarat is keen to see at least one lakh spindles being develop every year. With the given resources, it will take, on an average, around € 3.08-3.85 million (Rs 20-25 crore) of investment in Gujarat for setting up a spinning unit of minimum 12,000 spindles.

Mafatlal Industries enters joint venture with Al Fa him Group to market textiles Mafatlal Industries has forged a 51:49 joint venture (JV) with Dubai-based Al Fahim Group for marketing and distribution of its textile brand in the GCC (Gulf Cooperation Council) and African countries. Through the JV, Mafatlal (with a minority stake of 49%) would be selling school uniforms, corporate wear, bed sheets and towels under the co-brand Al Fahim Mafatlal in the region. Mafatlal wants to enhance its presence through MBOs (multi brand outlets) rather than investing behind more standalone stores. They would like to have a presence in malls through MBOs rather than single brand stores with value added products such as bed, bath and gifting items as well. Mafatlal is already supplying its bed and bath collections to cash-and-carry formats such as Carrefour and Bharti Walmart, along with a host of other retailers such as Shoppers Stop and Lifestyle. E-commerce is another avenue which the textile company intends to tap into in the future.

Centre to help leather industry grow in state While the Union government is keen to lend a helping hand to the leather goods industry in West Bengal, unless there is state co-operation, they will not be able to achieve Central's schemes, which will not reach the people. The Indian Leather Products Association which developed West Bengal's 60-acre leather goods park at Bantalla hopes to double leather exports by 2014-15. Eastern India's current share in India's total exports of leather goods is well above other areas of the country. The region provided 52% of India's total leather goods exports in 2011-12. India's leather industry is fast growing, with leather exports going up by 33% between 2010-11 and 2011-12. General

Slowdown in US, Europe may hit engineering exports India is unlikely to meet even the lowered engineering exports target of $60 billion for the current fiscal due to slowdown in the key western markets such as the US and Europe. Overall it is deficient but more than 90% of the last year’s achievement will be done. We are trying about thinking in terms of € 40.7- 42.18 billion ($55-57 billion) (in 2012-13). The engineering export promotion council has set a target of € 53.28 billion ($72 billion) at the start of the current financial year but later revised it downwards to $60 billion keeping in view of the decline in demand from the traditional markets.

With the present trend going with key destinations like USA and European Union, its apprehensive on how the developments will take place. Both these places are suffering and inturn the exports are suffering too. The US and Europe together account for over 60 per cent of India’s total engineering exports.




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During April-November 2012, engineering exports dropped 7.5% to € 26.64 million ($36 billion) compared to the same period last year. The decline in engineering exports is in sync with the country’s overall exports that fell 5.95% year-on-year to € 140.008 billion ($189.2 billion) in the first eight months of the current fiscal.

Engineering exports include transport equipment, capital goods, other machinery/equipment and light engineering products like castings, forgings and fasteners. During 2011-12, engineering exports grew 17% to € 43.07 billion ($58.2 billion) compared with € 36.78 billion ($49.7 billion) in the previous fiscal. Om Metals bags orders from BHEL, Moser Baer Hydro-mechanical engineering company Om Metals Infraprojects has bagged orders worth € 6.23 million (Rs 40.5 crore) from BHEL and Moser Baer. The first order is from BHEL to execute the hydro-mechanical works for a 28 millionwatts hydro-electric power project in Nyaborongo district at Republic of Rwanda, Africa. The scope of activity includes design, fabrication, manufacturing, transportation, erection, testing, commissioning etc. The project is expected to be completed by December 2013. Om Metals has also received order from Moser Baer Power Madhya Pradesh Limited (MBPIL) to execute the hydro-mechanical works. This 2,520 millionwatts project is one of the biggest thermal power projects where in Om Metals will be installing 7 radial gates. The company is engaged in the supply of hydro-mechanical equipment including general and mandatory spares for hydro-mechanical works which is expected to be completed by March 2014. This power project is situated in the district of Anuppur, Madhya Pradesh.

Infotech eyes bigger overseas buyout targets Mid-sized engineering services firm Infotech Enterprises has altered its overseas acquisitions strategy and nearly doubled the investment outlay for a foreign buy. As against its earlier strategy of buying foreign firms for around € 7.69-9.23 million (Rs 50-60 crore), the Indian outsourcer is now looking at spending € 15.38 million (Rs 100 crore) or more for each foreign target. The Hyderabad-based firm, which counts global aerospace giants Airbus, Boeing and Pratt & Whitney among its key clients, would spend at least € 15.38 million (Rs 100 crore) on global acquisition this time. In 2010, Infotech bought two USbased defence and telecom engineering services firms — Daxcon Engineering and Wellsco — each for around € 7.69 million (Rs 50 crore). The company, which had a revenue of Rs 1,550 crore last fiscal, has cash reserves of over € 76.92 million (Rs 500 crore) with no debt on books to help go aggressive on inorganic growth. They have already shortlisted half-a-dozen companies in the European market and a deal with one of them will be sealed during this quarter.

The company is looking at acquiring a foreign firm engaged in electronics and embedded software to help strengthen Infotech's presence in the area. Of the two US acquisitions made in 2010, Daxcon Engineering provides engineering and manufacturing consultancy services to the aerospace, defence and mining sectors while Wellsco is a telecom engineering services provider. While companies like HCL Technologies with which they compete are earning more than € 444 – 518 million ($600-700 million) from the electronics division, they earn only around € 22.2 million ($30 million) from this category. This is the main reason why Infotech wants to increase its focus on electronics and embedded software.




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Focus State – Delhi Governor: Shri Tejindra Khanna Chief Minister: Smt Sheila Dikshit

General Facts

Area (sq km) 1483 sq kms

Total Population 16.7 million

Literacy Rate 86.3%

Airports

Terminal 1 (Domestic), & Terminal 3 (Domestic and

International) in New Delhi

Infrastructure

Roads Delhi has total road length of around 31,432 km. About 80 km of National Highways run through the state. It is maintained by National Highways Authority of India (NHAI). The Finance Bills of the last few years have laid increased emphasis on the transport sector. Considering the need for improvement of the facilities, the sector has been receiving significant financial allocation. Action has been taken to implement the Delhi Integrated Multi Modal Transport System (DIMTS). The existing road network is being upgraded and express highways and freeways are being constructed along key routes in Delhi and the NCR. The “Golden Quadrilateral” project of the National Highway Authority of India (NHAI) directly connects Delhi to other major markets and cities of the country. By Air The Indira Gandhi International Airport (IGIL), one of the busiest in the world is located about 16 km from the New Delhi city centre. In July 2010, the terminal 3 of the airport was inaugurated which will enhance the passenger handling capacity of the airport to 60 million passenger annually. The newly operationalised terminal 3 is spread over 500,000 square metre area and is equipped with 95 immigration counters, 168 check in counters and 78 passenger boarding bridges to handle 34 Million Passengers Per Annum (MPPA) and 12,800 bags per hour. The planned ultimate design capacity of the airport is 100 MPPA. A ‘Cargo Village’ is also being developed to make the airport a focus point of cargo movement.

Railways

Delhi is well connected by rail network to other parts of India. A significant part of trade is supported by the strong railway link. State capitals of India and a few other important cities are connected with Delhi by high-speed, air-conditioned and comfortable ‘Rajdhani Express’ trains. There are three main railway stations at: New Delhi, Old Delhi and Hazrat Nizamuddin. The Delhi Metro Rail Corporation (DMRC) was registered in 1995 under the Companies Act, 1956, for development of Delhi Mass Rapid Transit System (MRTS). DMRC has equal equity participation from the Government of India and Government of National Capital Territory of Delhi (GNCTD). The objectives of the Delhi Metro Rail are as follows: To cover the whole of Delhi with a metro rail network by the year 2021. Delhi Metro to be of world-class standards in




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terms of safety, reliability, punctuality, comfort and customer satisfaction. Delhi Metro to operate on commercial lines, obviating the need for government support. As of August 2011, more than 2 million commuters travel every day in metro rail operating on six lines, covering 166.93 km (excluding 22.7 km of airport express line). With operationalisation of all the routes planned in Phase-III, total route length of metro rail will be over 306 km by 2016. The airport metro express, route connecting the Central Business District and Delhi International Airport, is covering a distance 22.7 km in 20 minutes.

Economy Delhi is the capital of the Republic of India and also a state for administrative purposes. It is one of the largest metropolis in the country. Delhi shares its border with the states of Uttar Pradesh and Haryana. Delhi has a cosmopolitan culture with a mix of languages in use. English and Hindi are commonly spoken for everyday transactions. Punjabi, Bihari and Haryanvi, etc., are the other languages used. It is home to the Union Government of the country and the State Government offices. Delhi is the epicentre of international politics, trade, culture and literature in India. The Delhi state is divided into 165 administrative villages under nine districts. The Union Government’s area is managed by the New Delhi Municipal Council (NDMC). Being the seat of the Central Government, Delhi has an important position in the country in terms of formulation of policies. It has also become an important centre for trade and commerce with a number of key industry associations being present. The state also hosts several trade conventions and fairs throughout the year. Delhi has emerged as a key state with immense scope for development of the services industry such as Banks and Financial Services Institutions (BFSI), IT and ITeS, Consulting, etc. It is a prominent agri-trade centre of the country as well as a preferred tourist destination. Many of the global corporations have offices in the state. The state proposes a wide range of fiscal and policy incentives for businesses under the Industrial Policy for Delhi, 2010-2021. Additionally, the state has well drafted sector-specific policies. Delhi has well developed social, physical and industrial infrastructure and virtual connectivity. It has an international airport and well developed rail and road infrastructure. There has been significant infrastructure and environmental development in Delhi over the last 20 years. Delhi has a stable political environment with a single-party government. The State Government has been committed towards creating a progressive business environment.Delhi attracts skilled and semi-skilled labourers from across the country. It has a large pool of skilled and semi-skilled labourers, who serve the requirements of various industries. At current prices, the Gross State Domestic Product (GSDP) of Delhi was € 48.39 billion (US$ 65.4 billion) in 2011-12. Between 2004-05 and 2011-12, the average annual GSDP growth rate was 16.6%. The growth was driven by the expansion of the services sector. Banking and insurance, real estate, trade, tourism and communications were driving the progress in the sector. At current prices, the Net State Domestic Product (NSDP) of Delhi was about € 45.95 billion (US$ 62.1 billion) in 2011-12. The average NSDP growth rate between 2004-05 and 2011-12 was about 16.7%. The state’s per capita GSDP in 2011-12 was € 2860.39 (US$ 3,865.4) as compared to € 113.84 (US$ 1,505.2) in 2004-05. Per capita GSDP recorded CAGR (Compound Annual Growth Rate) of 14.4% between 2004-05 and 2011-12. The state’s per capita NSDP in 2011-12 was € 2713.80 million (US$ 3,667.3) as compared to € 1051.54 (US$ 1,421.0) in 2004-05. The per capita NSDP increased at an average rate of 14.5% between 2004-05 and 2011-12. Commerce and trade has a greater contribution in Delhi’s economy as compare to manufacturing and agriculture. In 2011-12, at € 39.59 billion (US$ 53.5 billion), the tertiary sector contributed 81.8% to the GSDP of Delhi at current prices, followed by secondary sector which contributed € 8.36 billion (US$ 11.3 billion) (17.3%). At a CAGR of 17.9%, the tertiary sector has been the fastest growing among the three sectors from 2004-05 to 2011-12. The growth has been driven by trade, hotels, real estate, banking, insurance, transport, communications and other services. Delhi’s economy is primarily dominated by knowledge based service industry such as information technology, consulting etc. Also, the state has small scale industries which are mostly non-polluting. Commonly grown crops in the state are wheat, rice, jowar, maize, millet and vegetables. In 2010-11, 18,400 tonnes of potato and 27,300 tonnes of onion were produced in the state. In 2010-11, the total production of wheat in the state was around 111,033 tonnes. The total food grain production in the state was around 210,354 tonnes in 2010-11.




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The Food Corporation of India (FCI) was set up under the Food Corporations Act, 1964, of the Union Government to meet the objectives of the Food Policy. Over the years FCI has played an important role in controlling supply, prices and disaster management in times of droughts, etc. The corporation is headquartered in Delhi. The Indian Agricultural Research Institute (IARI), the country's premier national institute for agricultural research, education and expansion, has a centre in New Delhi. The Indian Council of Agricultural Research (ICAR), an autonomous organisation under Ministry of Agriculture, Government of India is also headquartered in New Delhi. The institute is the apex body for coordinating, guiding and managing research and education in agriculture including horticulture, fisheries and animal sciences in the country. According to the Department of Industrial Policy & Promotion, the cumulative FDI inflows from April 2000 to January 2012 amounted to € 23.83 billion (US$ 32.2 billion*). Of the total outstanding investments of € 76.29 million (US$ 103.1 billion) in 2011-12, the services sector had the highest share of investments at 69.5%. Investments were also made in real estate (18.3%) and electricity (10.7%) sectors in 2011-12.

Urban Infrastructure Under the Jawaharlal Nehru National Urban Renewal Mission (JNNURM), a total of 23 projects costing € 1087.21 million (US$1,469.2 million) have been sanctioned for Delhi during 2008-09 and 2010-11. The key projects focus on traffic management plan for designated areas, sewerage system improvement, drainage, storm water drains, roads, flyovers, roads over bridge and urban renewal plans along with heritage conservation. According to the Delhi 2021 Master Plan, special emphasis has been laid on improved solid-waste management policies. The short-term goals are: capacity building with respect to financial services and performance management, effecting trial runs of collection and waste-reduction schemes, developing transport, land-fill sites and transfer stations for waste and focussing on bio-medical and hazardous waste management programme. With respect to traffic management, the focus in the master plan is on developing integrated multi-modal transport system, creating infrastructure for alternate transport, e.g., bicycles, creating an environment for public transport prioritisation by customers and improving suburban railway with technology upgrade. On the industrial infrastructure front, the state has taken a number of development initiatives such as re-development of industrial clusters, maintenance of industrial areas under PPP (Public Private Partnership) model. The State Government has initiated a set of prestigious projects including those in industrial infrastructure for the specific sectors, through the Delhi State Industrial and Infrastructure Development Corporation Limited (DSIIDC). The Delhi Metro Rail Corporation Limited (DMRC) has conceptualised and developed a world-class IT park complex comprising IT Park Block-1 (operational), IT Park Block-2, which is ready for occupancy and IT Park Block-3 (yet to be constructed). The complex is situated very close to Shastri Park metro station. Social Infrastructure Delhi has a literacy rate of 86.3% according to the provisional data of Census 2011; the male literacy rate is 91% and the female literacy rate is 80.9 per cent. As of 2009-10, there were 50 pre-primary schools, 2,586 primary schools, 583 middle level schools and 1,824 senior secondary/secondary schools in Delhi. The State Government has proposed to spend € 293.41 million (US$ 396.5 million) on education sector in 2012-13 accounting for 12.67% of total plan outlay. At the intermediate college level, courses in the science, arts and commerce streams are offered. Vocational courses are offered in the fields of agriculture, engineering and technology, home science, paramedical, business and commerce, and humanities.

Cultural Infrastructure Delhi’s rich history is reflected in its forts, monuments, palaces, gardens and bazaars that were created by its rulers during the different periods of their occupation. The remains of a large number of such historical places and monuments are the sites of attraction for visitors and tourists in Delhi. In addition to these historical places, a large number of gardens, buildings, playgrounds, institutional buildings, markets and event places were constructed by the British till 1947 and thereafter by the Government of India and Government of Delhi. In addition, Delhi and the NCR have number of convention centres, golf courses, hotels, restaurants, and recreational centres offering international standard of services.




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Delhi was the host city for Commonwealth Games 2010. For its successful organisation, the State Government had taken up 59 projects/schemes directly related to games. Some of the major projects/schemes were as follows:

�Construction of Thyagraja stadium. �Renovation and expansion of the Talkatora, Shivaji and Chhattrasal stadiums. �Construction of a training indoor stadium at Ludlo Castle. �Construction of water treatment plant and sewerage-water treatment plant at the games village. �IT system for commissioning a dedicated communication network system.

Major Industrial Projects being implemented Name of the project Promoter Cost € million Industry

Modernisation of Delhi International Airport

Lease-Develop-Operate-Transfer

€ 1383.50 Airports

Badarpur Elevated Highways

Build- Operate- Transfer - Toll

€ 54.69 Roads

Integrated Municipal Waste Processing Complex at NDMC Compost Plant Site, Okhla

Build- Owner - Operate- Transfer

€ 10.43 Urban Development

Key Industries in the State The location advantage, policy incentives and infrastructure in the state support investments in sectors such as IT/ITeS, Banking and Financial Services Industry (BFSI) and tourism activities. According to the Delhi 2021 Master Plan, sophisticated hi-tech industries will be promoted with special emphasis on high value-added products. The plan emphasises on industrial development without effluents, smoke and noise pollution. According to the Industrial Policy for Delhi 2010-2021, the Delhi Government will develop world-class infrastructure within planned industrial estates to promote industrial growth. The government is also encouraging activities allied to industries, such as consultancy, information technology, training of skilled manpower through vocational training programmes and entrepreneurial development programmes. Banking The city is home to a number of private and public banks and financial services institutions. These business houses deal in banking transactions, documentations, negotiations, loan agreements, etc. The city also has commercial banks, industrial banks and some of the leading foreign banks. The service points are spread across the city while Connaught Place, Chandni Chowk, Barakhamba Road are the key points in the city where the key offices of a large number of organisations are located. Agri & Food Processing The city has a number of agriculture trading markets and food processing industries. It acts as a nodal location for exchange of goods with Northern parts of the country because of good connectivity and supporting infrastructure. There are nine principal markets and 12 different submarkets for trade of agricultural produce in Delhi. The main food trade markets are located in Narela, Azadpur, Tikri Kalan, Shahdara, Bagh Diwar, Keshopur, Gazipur, Najafgarh and Mehrauli.

Contruction & Real Estate There are several infrastructure development companies located in the state. These companies are involved in construction of residential and commercial complexes, townships, power projects, hospitals, hotels, schools, roads and public utility infrastructure.

IT and ITes There are a number of software companies in Delhi. These organisations are involved in the businesses of Enterprise Resource Planning (ERP), Structured Query Language (SQL) server, Document Management System, Customer Relationship Management (CRM), software development, Active Server Pages (ASP), web developer, online office automation, etc. E-commerce companies in Delhi offer services such as registrations of domain names, tele-billing, electronic signatures, web hosting, etc. The units are spread across the state. With Government focussing on the sector, the prospects are very bright for IT related businesses and other knowledge-based industries such as consulting. NASSCOM, the premier trade body and the chamber of commerce of the IT and BPO industry in India




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is headquartered in New Delhi. The members of the association account for over 95 per cent of the industry revenue and employ over 2.24 million professionals. Enabling institutions such as Software Technology Parks of India (STPI), a society set up by the Ministry of Information Technology, Government of India for encouraging, promoting and boosting software exports from India is also located in New Delhi.

Key Projects under planning Name of the project Promoter Cost € million Industry

Delhi-Gurgaon Highway

Build-Own-Operate-Transfer - Toll

€ 114.18 Roads

Delhi-Noida Toll Bridge


€ 65.64 Roads

Construction of 197 Bus-Q-Shelters in NDMC area


€ 2.44 Urban Development




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Seminars & Exhibitions

SMM India 2013

Date Venue Organizer Profile Products/ Participants

0

4 A

pri

l – 0

6 A

pri

l 20

13

Bombay Exhibition Centre Mumbai

Retrospect: 2011

Exhibitors: 100

Visitors: NA

Countries :NA

Hamburg Messe und Congress GmbH Messeplatz 1, 20357 Hamburg Hamburg, Germany Tel: +(49)-(40)-3569-0 Fax: +(49)-(40)-35692203 E-mail: [email protected]

Website: www.smm-india.com

SMM India is the world's leading shipbuilding trade fair, which means experience, quality, competence, networking and service.

. Shipbuilding . Shipyard industry, Maritime services, Ship sections, Ports . Port technology, Shipyard installations and equipment, Offshore technology, Prime movers . Propulsion systems, Cargo handling & logistics, Dredging, . Maritime and training institutes, Ship operation equipment, Information technology . Software, Electronics . . Communications, . Research organizations, Marine technology, Marine equipment, Navigational equipment & aids.

INMEX India 2013

Date Venue Organizer Profile Products/ Participants

8 O

ct –

10

Oct

201

3

Bombay Exhibition Centre Mumbai Retrospect 2011: Net Area: 5970 sq. mts Total Visitors: 6672 Total No. of Exhibitors: 542 Countries Participated: NA

IIR Exhibitions Ltd 4th Floor, Maple House 149 Tottenham Court Road London Tel :+ 44 (0)20 7017 7019 Email : [email protected], [email protected] Website: www.inmexindia.com

INMEX India is the premier international maritime expo and forum. The event has grown substantially since its inception in 1999 and now offers even more value to both Indian and International exhibitors.

. Navy . Coastguard, Port authorities . Government & private ports, Shipping companies Owners . Managers, Ship building/ . Ship design . Shipyards, Dredging companies, Offshore & . Oil rig companies, Cargo handling . Logistic service providers, Equipment manufacturers . Distributors, Maritime institutions & services




18

Special Rates at Hotels in India We have negotiated special rates for VDMA member companies with Taj Group, Oberoi Group & ITC Group of Hotels covering not only the major cities like New Delhi, Mumbai, Kolkata, Chennai, Bangalore, Hyderabad but also other destinations in India like Goa, Agra, Rajasthan, Kerala and many others. The discounts range from 25% up to 45% depending on the city and the hotel. However these discounted rates would be valid only when the booking is done through VDMA India Office in Kolkata. For further details or reservations feel free to contact us.

Activities & services of the VDMA India Office Promote sales of members in participating divisions within VDMA especially exports, including participation in exhibitions. Organize symposia and similar presentations of German companies in India. Participate and service bilateral programs such as those in existence, with governmental participation between Germany and India. Furnish information about the complete product program of the German industry to assist Indian companies to identify right partners for mutual business relationship. Provide information on market trends, prospects, future development, new projects and tenders. Offer job opportunities by uploading your resume on the Indian website under careers.

Contact:

VDMA INDIA SERVICES PRIVATE LIMITED

Rajesh Nath, Managing Director

Jamly John, Regional Manager – West

GC 34, Sector III, Salt Lake

Kolkata– 700106, India

Telephone: +91 33 2321 7391

Fax: +91 33 2321 7073

E-mail: [email protected]

VDMA India Quarterly Newsletter-German Machinery In dustry

The VDMA India office publishes a Quarterly Newsletter-German Machinery Industry . This Newsletter informs the Indian industry about the development in the German Machinery industry in various industrial sectors. This Newsletter has a circulation of around 8000 copies in different industrial divisions. The VDMA member companies have the possibility of giving an advertisement in this Newsletter at a discounted rate. For further details, please contact: Ms Jamly John at: [email protected]

Career

Manish namdev