August 26-September 01, 2014 WEEKLY ECONOMIC BULLETINindiainbusiness.nic.in/newdesign/upload/Publications/Weekly/Aug... · 3 WEEKLY ECONOMIC BULLETIN >> NEWS FEATURE Issue no 586IAugust

NEWS FEATURESpecial team in PMO will fast-track Japanese investment: ModiAssuring the same quick reaction and proactive response a Japanese investor accorded when he was CM ofGujarat, PM Narendra Modi announced a special team in his office to fast-track investments from Japan.

Modi invites Britain for energy efficiency co-operationPrime Minister Narendra Modi on August 25 said clean energy and preservation of environment were pri-ority areas for his government and invited Britain to partner in these efforts.

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FDI policies in India with minimal conditionalities: ModiPrime Minister Narendra Modi spoke to the Japanese media on August 29 in New Delhi and stated thatFDI (foreign direct investment) influx will happen on its own.

Inward foreign investment $30 bn for 2014, cumulative over $200 bnInvestments by overseas investors in India this year reached $30 billion, while cumulative total inflows intothe country crossed the $200-billion mark.


OVERSEAS INVESTMENTS

ITP Division Ministry of

External Affairs Government of India

Issue no 586 I August 26-September 01, 2014

p. 02/05

TRADE NEWSSouth Korea looking to correct trade imbalance with India: EnvoyWith an ever increasing trade, investments and people-to-people contact between them, India and South Korealook forward to correct their trade imbalance, says Seoul’s ambassador Joongyu Lee.


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SECTORAL NEWSGovt begins work on four new ultra mega power projectsGovernment has started the process for setting up four new ultra mega power projects in Bihar, Jharkhand andOdisha, which will together add 16,000 MW capacity to the country’s power generation.


NEWS ROUND-UPIn signs of revival, Indian economy expands 5.7 percentBeating expectations and showing another sign of revival, the Indian economy expanded by 5.7 percent duringthe first quarter of the current financial year to log the highest growth yet in nine quarters or over two years, of-ficial data showed.


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>> NEWS FEATURE

Special team in PMO will fast-trackJapanese investment: ModiAssuring the same quick reaction and proactive response a Japanese investor accorded when he was chief minister ofGujarat, Prime Minister Narendra Modi announced a special team in his office to fast-track investments from Japan.

“In the coming days you’ll get the same speed and response that you have experienced in Gujarat in the past,” Moditold a luncheon hosted by Nippon Kiedanren -- the Japanese Chamber of Commerce and Industry, and the Japan-IndiaBusiness Cooperation Committee in Tokyo

He, accordingly, announced a dedicated specialmanagement team directly under the Prime Minis-ter’s Office and said: “Two nominees selected byJapan will also be part of this decision-makingteam, which will evaluate the business proposals.”

Modi told the luncheon, which included Who’sWho of the business fraternity of Japan and India,that he had the greatest connect, perhaps, withJapanese businesses, adding the two countriesmust partner not just for bilateral gains, but forAsia and the world.

He said his association with the Japanese indus-try had made him recognise the importance ofgood governance, ease of doing business and sim-plification of policies and assured them a policy-driven decision environment at the federal level toeliminate delays.

Exhorting Japanese businesses to continue in-vesting in India, the prime minister said the two countries must also show the way of the Buddha to the world, and act asa force for development.

He noted that the 21st century will be Asia’s century, but wondered how it would look like? He said that for meetingthe aspirations of people in this century, India and Japan had a big role to play.

Modi, who completes 100 days in office on September 2, also said he had already initiated moves to introduce theJapanese principles of management in the Prime Miniser’s Office, adding India must follow the Japanese model for skilldevelopment.

Stating that 65 percent of India’s population was young, he also sought Japan’s help for skill development in India andsaid: “In 2020, when the world needs a workforce, we are preparing for it from now itself, so that we can match theglobal workforce.”

India being a youthful nation, his government, he said, was giving importance to skill development to the millions of youthaspiring to enter the job market -- be it in terms of quality and the ability to make zero-defect products, or discipline.

“You can really help us with this.”Overall, he also highlighted the initiatives taken by his government during the first 100 days in office and said moves to

ease foreign direct investment rules were widely appreciated. Modi also said the Indian economy’s growth of 5.7 percent in the first quarter of 2014-15 had a huge positive sentiment. Going ahead, he said, the clear electoral mandates received by the governments of the two countries, led by him and

his host and Japanese premier Shinzo Abe, had given the much political stability that would also deliver a strong push tobilateral ties.

Source: Indo-Asian News Service

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Prime Minister Narendra Modi on August 25 said clean energyand preservation of environment were priority areas for hisgovernment and invited Britain to partner in these efforts.

Modi met British Deputy Prime Minister Nick Clegg in NewDelhi and called for greater cooperation between the twocountries in areas such as education, skill development, cleanenergy, infrastructure development, and cleaning of rivers.

Clegg conveyed Britain’s strong desire to strengthen anddeepen relations with India.

According to a PMO release, Clegg expressed deep appreci-ation “for the ambitious goal of Indian’s economic and socialtransformation that the new government under the leadershipof Prime Minister Modi had set”.

Clegg, who was accompanied by British Secretary of Statefor Energy and Climate Change Ed Davey, conveyed Britain’s desire to work together with India in realising the govern-ment’s goal of economic and social transformation.

The release said Modi expressed appreciation for British Prime Minister David Cameron’s personal interest and com-mitment to the relationship between the two countries.

Both sides also discussed international issues relating to the World Trade Organisation (WTO) and climate change.The release said that Clegg conveyed appreciation for the work done in Gujarat in the area of clean energy and preser-

vation of environment.“The prime minister said this was a priority area for the government. The government plans to develop 500 model

towns in India with facilities for solid waste management and waste water treatment. Further, the government wants todevelop all Himalayan states as “Organic States”. He also articulated his vision of creating mass participation in energyefficiency. The prime minister invited Britain to partner in these efforts,” the release said.

Modi also called upon the international community to take steps to provide clean technology to developing and under-developed countries at affordable prices, the release said.

Responding to the invitation to him to visit Britain, Modi said he looked forward to visiting the country at the earliest.Source: Indo-Asian News Service

Modi invites Britain for energy efficiencyco-operation

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Prime Minister Narendra Modi on August 28 launched the pan-India financial inclusion scheme called “Jan Dhan Yojana”, aflagship project of his government, under which bank accountsand RuPay debit cards with an insurance cover of Rs.100,000will be provided to millions still without access to formal bank-ing facilities.

In the manner the scheme was launched, records have beenbroken for the banking and insurance sectors, the prime minis-ter said in his inaugural address.

“One-and-a-half crore (15 million) insurance policies on a sin-gle day, and 1.5 crore bank accounts opened in a day wouldnever have happened before. This is a big record in banking andinsurance history,” Modi said. The figure is close to the popula-tion of the Netherlands.

Over 77,000 camps were set up for simultaneously openingaccounts, the prime minister said.

“On 15th August, we declared the scheme, it has been imple-mented in 15 days and 1.5 crore people have been enrolled in asingle day,” he added.

The objective is to provide each of the estimated 75 millionhouseholds in the country with a bank account and insurancepolicy.

A film on ‘Financial Inclusion’ was screened, the prime minis-ter unveiled a logo and a Mission Document on financial inclusion. He also dedicated a mobile banking facility on basicmobile phones to the nation.

In fact, the overwhelming first-day success led Finance Minister Arun Jaitley, present on the occasion, to revise theearlier time-table for the Pradhan Mantri Jan Dhan Yojana.

Phase-I, wherein 75 million account holders were to be enrolled by Aug 14, 2015, has been brought forward to Jan 26,2015, Jaitley announced.

The second phase, wherein an overdraft of Rs.5,000 will be provided to each account holder will now commence fromRepublic Day, Jan 26, 2015.

“This whole exercise is aimed at lifting the poor out of the poverty line. After today’s breakthrough momentum, I don’tthink it (Jan Dhan Yojana) will stop,” Modi said.

Indian industry welcomed the launch of the financial inclusion scheme to empower India’s poor.“It is an innovative and much needed step in the right direction which will address the biggest national challenge, that

is, eradication of poverty, through financial inclusion,” said CII director general Chandrajit Banerjee in a statement.“This will also allow the government to transfer the subsidy benefits directly to the end consumer which will help in

plugging the leakages occurring in the current system,” he addedSource: Indo-Asian News Service

Modi launches financial inclusionscheme, 15 million accounts opened


>> NEWS FEATURE

Finance Minister Arun Jaitley said that the economy is expected to grow much faster in the coming quarters than thegrowth of 5.7 percent in gross domestic product (GDP) achieved during the first quarter of the current fiscal.

“Growth rate of 5.7 percent in first quarter is encouraging. The recent GDP figures show that the economy is on a re-covery path. We expect the economy to grow much faster in the coming quarters,” Jaitley said in New Delhi on the occa-sion of the new government completing 100 days in office.

The Indian economy expanded by 5.7 percent during the first quarter of the current financial year to log the highestgrowth yet in nine quarters or over two years.

GDP which is the aggregate market value of all the goods and services produced in the country, had expanded by just4.6 percent in the previous quarter, that is January-March, and by 4.7 percent in the like quarter of last fiscal.

The 5.7 percent growth in April-June quarter is also the highest since the 6 percent increase logged during October-December quarter of 2011-12, as per data compiled by the Central Statistics Office (CSO).

On foreign investment climate, Jaitley said there has been a sea change in investor sentiment as they have shown in-terest in investment opportunities in India.

“In terms of investment mood, there is a sea change. We created a special mechanism for resolution of tax disputes.We have allayed investor fears on retrospective tax,” Jaitley said.

In recent times the overall expectation of a further reform push by the new government and the quick notifications forthe hike in foreign direct investment (FDI) limits in defence and railways have led to positive investor sentiments.

Jaitley added the central government was working towards the administration of the new land acquisition law, but thechallenges need to be dealt across the political spectrum.

“I am optimistic that as more and more decisions in this direction come, we will be able to help the economy growfaster,” Jaitley said.

“As we started working in the administration of the new land acquisition law, the states and the centre are realising thechallenges. I will discuss this with major political parties,” he added.

He said he would discuss with the rural development minister if there could be “more flexibility”.“When I say more flexibility, I mean slight enlargement of the exemption,” he said.He added that the government is very clear whether social sector schemes are moving in the right direction.


Economy to grow much faster in comingquarter: Jaitley

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Prime Minister Narendra Modi spoke to the Japan-ese media on August 29 in New Delhi and statedthat FDI (foreign direct investment) influx will hap-pen on its own, as the foreign capital investmentpolicies are with minimal conditionalities.

“I feel that with the right signal of policy sta-bility and genuineness of intent by the govern-ment, FDI influx will happen on its own, as Indiais an excellent investment destination,” Modireplied to a question put to him regarding his ef-forts at attracting FDI in India.

“We are open to dialogue and will strive to re-move all roadblocks to inviting FDI. There are not many sectors left where FDI has restrictions. Review of FDI policy is acontinuous exercise. We have recently opened up the railway sector to 100 percent FDI and 49 percent in defence.”

On the proposed goods and services tax (GST), the Prime Minister said that its introduction is likely to reduce costs forindustry, trade and consumers.

“Further, it would lead to widening of tax base and a significant improvement in tax compliance. We are discussing withstates and holding dialogues for assuaging their apprehensions about possible revenue loss, and I am confident thatsooner rather than later the states will come on board,” Modi added.


Investments by overseas investors in India this year reached $30 billion, while cumulative total inflows into the countrycrossed the $200-billion mark.

Data from November 1992 since foreign institutional investors (FIIs) began investing in Indian markets shows the cumu-lative figure is made up of about $159 billion investments into equities and about $42 billion in debt markets.

The net investments by foreign investors in Indian debt markets since the beginning of this calendar year have reached$17 billion, or Rs.120,000 crore, while the same for equities stand at $13 billion, or Rs.78,000 crore, taking the total to $30billion, or Rs.180,000 crore.

Foreign Portfolio Investors (FPIs) continued to invest in the Indian equities market as they bought shares worth $3.87billion in August, with the trade for the week ended Aug 28 at yet another record high.

The foreign institutional investors (FIIs) along with sub-accounts and qualified foreign investors have been clubbed to-gether by market regulator Securities and Exchange Board of India (SEBI) to create a new investor category called FPIs,who invested $3.87 billion or Rs.23,539.61 crore in the Indian equities market in August.

The FPIs had poured in Rs.13,110.42 crore or $2.18 billion in Indian equities markets in July.Expectations of stable GDP growth figures coupled with an overall expectation of further reform push by the new gov-

ernment and the quick notifications for the hike in foreign direct investment (FDI) limits in defence and railways have allled to positive investor sentiments.


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WEEKLYECONOMIC BULLETIN >> OVERSEAS INVESTMENTS


FDI policies in India with minimal conditionalities: Modi

Inward foreign investment $30 bn for2014, cumulative over $200 bn

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WEEKLYECONOMIC BULLETIN >> OVERSEAS INVESTMENTS

FPIs invested $3.87 billion in Indian markets in AugustForeign Portfolio Investors (FPIs) continued to invest in the Indian equities market as they bought shares worth $3.87 bil-lion in August, with the trade for the week ended Aug 28 at yet another record high.

The foreign institutional investors (FIIs) along with sub-accounts and qualified foreign investors have been clubbed to-gether by market regulator Securities and Exchange Board of India (SEBI)to create a new investor category called FPIs,who invested $3.87 billion or Rs.23,539.61 crore in the Indian equities market in August.

The FPIs had poured in Rs.13,110.42 crore or $2.18 billion in to the Indian equities market in July.The Indian markets, which remained closed for trading on August 29 on account of Ganesh Chaturthi, saw healthy

buying from foreign institutional investors on August 28.Data with the National Securities Depository Limited (NSDL) showed that the FPIs had turned net buyers on August

28 to the tune of $87.97 million, or Rs.531.90 crore.“FIIs were net buyers but buying was subdued over the week. Easing of geo-political tensions in Israel-Palestine also

helped,” Dipen Shah, head - private client group research, Kotak Securities said.Domestic institutional investors (DIIs), including banks, development finance institutions (DFIs), insurance and mutual

funds, bought net stocks worth Rs.730.43 crore on August 28.The 30-scrip Sensitive Index (Sensex) of the S&P Bombay Stock Exchange (BSE), which opened at 26,620.18 points,

closed the day’s trade at 26,638.11 points, up 77.96 points or 0.29 percent from the previous day’s close at 26,560.15points.

It surpassed the previous high of 26,630.74 points it touched Aug 25. This was the seventh consecutive monthly gainof the benchmark index.

The wider 50-scrip Nifty of the National Stock Exchange (NSE) closed the day’s trade 18.30 points or 0.23 percent upat 7,954.35 points.

Expectations of stable GDP growth figures coupled with an overall expectation of further reform push by the new gov-ernment and the quick notifications for the hike in foreign direct investment (FDI) limits in defence and railways also ledto positive investor sentiments.



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WEEKLYECONOMIC BULLETIN >> TRADE NEWS


With an ever increasing trade, investments and people-to-people contact between them, India and South Korea, thetwo Asian economic power houses, look forward to correcttheir trade imbalance, says Seoul’s ambassador JoongyuLee.

“We are looking at the trade imbalance and a committeeis going to meet soon to discuss the issue. There is a need toidentify products and services from India that can be im-ported,” Lee told IANS.

The ambassador described the strong economic relationsbetween the two countries as “Korea kahani ghar ghar ki(Korean products can be found in every Indian household)”.

In the recent times, India has asked South Korea forgreater market access for its products for correcting thetrade imbalance, especially in information technology (IT), generic medicine and textiles.

According to official data, the trade and economic relations between India and Korea have gathered momentum in re-cent years with bilateral trade reaching a substantial figure of $17.57 billion in 2013.

India’s bilateral trade deficit with South Korea was about $4.57 billion during January-June 2013. During the period,India imported $6.34 billion and exported only $1.77 billion worth of goods.

India is the 15th largest trade partner of Korea. Investments both ways are on the upswing. Korean majors such as Hyundai Motors, Samsung Electronics, LG have invested around $3.25 billion till December

2013 in India. Indian FDI is by Mahindra & Mahindra (Ssangyong Motors), Aditya Birla Group (Novelis Ltd.) & TATA (Tata Daewoo com-

mercial vehicles), close to $3 billion.The Korean envoy said that his country has great expectations from the new Indian government led by Prime Minister

Narendra Modi in reinventing ties.“We have great expectations from the Modi governmnet to reinvet the India-Korea trade and cooperation ties. The po-

tential of the cooperation between the two sides is endless and the Korean companies exporting from India are trying tohelp the indian economy grow,” Lee said.

For India, South Korea is looked upon as a partner to modernise its infrastructure - from roads to railways. The Indiangovernment is scouting for more investments For development of infrastructure and industrialisation.

South Korean automobile parts and electronic components manufacturers have shown eagerness to set up their pro-duction units in Rajasthan’s upcoming special economic zone.

Modi has also frequently mentioned South Korea in his speeches when stressing the importance of infrastructure foreconomic growth. Recently, Modi stated that his government will encourage foreign investment in shipbuilding and citedthe strides that South Korea has taken in that field.

The South Korea Trade Promotion Agency (Kotra), which is the umbrella agency of the country’s ministry of commerce,industry and energy, had earlier entered into a memorandum of understanding (MoU) with the Rajasthan State IndustrialDevelopment and Investment Corporation.


South Korea looking to correct trade imbalance with India: Envoy

Indian exports to the 10-nation ASEAN bloc is expected to reach $280 billion in the next 10 years, says a Standard Char-tered research report.

According to the global financial services major, the India-ASEAN trade corridor, currently worth around $80 billion,has been growing fast at a compound annual growth rate of 23% over the past decade.

In FY 2013-14, India’s exports to the bloc stood at $33.13 billion.In addition, the new Indian government has prioritised strengthening ties with the Association of South East Asian Na-

tions.“We expect exports to ASEAN to reach $280 billion in 10 years, at which point it would hold a 15% share in Indian ex-

ports,” Standard Chartered said in a research report.The report added that this projection is based on the assumption that India’s export/GDP ratio will continue to rise as

the economy liberalises and integrates further with the global economy.Several complementaries in India-ASEAN exports suggest room for both parties to gain from trade.India has an advantage in pharmaceuticals, gems and jewellery, and iron and steel, while the ASEAN bloc has an ad-

vantage in natural resources and electronics.According to the report, there are six areas with export potential -- include Petroleum products, organic chemicals,

vehicles (including auto components), pharmaceuticals, gems and jewellery and apparel and clothing accessories.These categories rank among India’s top 10 export items by value.“The first three are categories where ASEAN already accounts for a sizeable chunk of total Indian exports, and where

export growth is high. The last three are areas where we feel there is potential for India to increase export growth rates,”the report said.

Standard Chartered further noted that greater physical connectivity within the region via the trilateral highway andthe Mekong corridor is likely to enhance trade in the India-ASEAN corridor, and should also be a priority for India’s newgovernment.

In a bid to enhance trade ties, India and ASEAN have already implemented Free Trade Agreements in goods. For serv-ices and investments, both sides have concluded negotiations.

ASEAN comprises Indonesia, Malaysia, the Philippines, Singapore, Thailand, Myanmar, Cambodia, Laos, Vietnam andBrunei.

Source: Press Trust of India

Indian exports to ASEAN to touch $280 bnin 10 yrs: StanChart

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Government has started the process for setting up four newultra mega power projects in Bihar, Jharkhand and Odisha,which will together add 16,000 MW capacity to the coun-try’s power generation.

UMPP is a thermal power project of at least 4,000 MW ca-pacity, with an approximate investment of Rs 25,000 crore.

Power Finance Corporation, the nodal agency for ultramega power projects (UMPPs), in consultation with thestate government has commenced work on these projects.

According to an official, two UMPPs have been proposedin Odisha, one in Bihar and Jharkhand each.

“Land for the proposed project in Jharkhand has beenacquired. In the case of two UMPPs in Odisha and one inBihar, the respective state government has identified sites,” the official said.

These UMPPs are being planned even as the bidding process for two such projects -- Bedabahal (Odisha) and Cheyyur(Tamil Nadu) is yet to conclude. The price bids for these proposed plants is yet to be submitted after which the UMPPswill be awarded.

NTPC, Tata Power, NHPC, Adani Power, JSW Energy, Jindal Power (an arm of Jindal Steel and Power), Sterlite In-fraventures, CLP India and Larsen & Toubro had submitted applications for the Odisha project.

NTPC, Adani Power, CLP India, GMR Energy, Jindal Power, JSW Energy, L&T and Sterlite Infraventures had submit-ted bids for the Cheyyur UMPP in Tamil Nadu.

The final price bids for these two UMPPs may open next month.So far, four UMPPs have been awarded. Of this, Sasan (Madhya Pradesh), Krishnapatnam (Andhra Pradesh) and

Tilaiya (Jharkhand) have been bagged by Reliance Power. Tata Power is operating the Mundra UMPP in Gujarat.Source: Press Trust of India

Private equity investment in real estate sector jumped over two-fold to Rs 4,100 crore in the first six months of 2014 andis likely to cross Rs 12,000 crore by end of the year.

According to a report by property consultant Cushman & Wakefield, the PE investment in the sector was Rs 6,450crore in 2013.The consultant noted that there is an increase in interest globally in committing funds for Indian real estatethrough private equity. The funds are being raised mainly for housing projects and leased office purchases.

“Private Equity (PE) investment in real estate in India is likely to exceed Rs 12,000 crore (about USD 2 billion) by theend of 2014,” C&W said.

The first six months witnessed PE investments in realty sector of about Rs 4,100 crore, and the consultant expects itto be about Rs 7,900 crore in the second half.

“The total investment in first half of 2014 was more than double the investment in the first half of 2013 at Rs 1,650crore. This is also the highest levels of investments in the first half of the year since H1 2009,” C&W said.

WEEKLYECONOMIC BULLETIN >> SECTORAL NEWS


Govt begins work on four new ultra megapower projects

PE investment in real estate to cross Rs12,000 cr

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Of the total PE inflows in the first half, housing segment accounted for nearly 60 per cent at Rs 2,357 crore. Office as-sets contributed Rs 1,435 crore and retail Rs 300 crore.

“In the residential asset class, private equity funds are now being viewed favourably by developers as PE money is beingused for de-risking projects and as strategic long term partnerships for further expansion and development,” C&W said.

Total number of deals in the first half of 2014 increased to 28 compared to 13 in the year-ago period. Average dealsize increased by 16 per cent to Rs 146 crore.

Bengaluru witnessed the highest levels of transaction activity in the first half with investments of Rs 2,005 crore, asharp increase from Rs 103 crore in the year-ago period.

Mumbai received a PE investment of Rs 1,140 crore, while transaction volumes in NCR and Pune were recorded at Rs580 crore and Rs 167 crore, respectively, during H1 2014.

C&W Executive Managing Director South Asia Sanjay Dutt said: “Clarity in the governance process and the advent of astable government with BJP winning elections with a thumping majority at the centre will be critical to the stability ofthe investment market.”

Stating that PE investment is largely towards commercial office space with high occupancies or for residential proj-ects as construction capital, Dutt said this trend is expected to continue for the rest of the year.

“There is high liquidity being committed from both domestic and offshore investors,” C&W said.Many sovereign and pension funds are also committing funds to Indian real estate, like All Pensions Group, Abu Dhabi

Investment Authority, Qatar Investment Authority, Canada Pension Plan Investment Board, State General Reserve Fundof Oman and GIC of Singapore, through fund managers.

Source: Press Trust of India

Hyundai is “closely” looking at setting up a second factory inIndia as the Korean car major lines up heavy investmentsand at least two to three new cars every year, beginningwith a compact SUV and a multi-purpose vehicle.

The second-biggest car maker in India is facing intensecompetition from players like Honda, Ford and MarutiSuzuki and has decided to go aggressive on new products,while entering unrepresented segments.

“Our existing factory in Chennai still has capacity to keepus going for some time. Currently, it produces 6.8 lakh unitsannually, and can be stretched to a little over 7 lakh vehi-cles,” Hyundai India MD & CEO B S Seo told TOI.

However, the scope for expansion in the present factoryis limited, which has prompted the company to cut down onits export commitments to make place for domestic requirements. This includes doing away with shipments from Indiato Europe altogether as the Korean company now serves the key region from factories in Czech Republic and Turkey.

Asked about a second factory for India, Seo said, “We are looking at it very closely. We are watching very closely.” The company is understood to be looking at various states for the new plant and this includes Gujarat, which is in-

creasingly turning out to be the next destination for many auto makers that include Tata Motors, Ford and Maruti. Seo, however, declined to confirm any such move. However, he indicated that the company has the capacity to con-

struct a factory at a fast pace once a decision is arrived at. “We are very strong in construction of a new plant.” Speaking about new launches, he said the company has plans to drive in at least two to three new cars every year,


Hyundai looking at a second factory in India


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The Indian pharmaceutical industry can benefit significantly from the huge emerging export opportunity. For long ac-knowledged as the generic drug manufacturing capital of the world, India with its several low cost generic manufactur-ers, can exploit the fact that over the next few years, a large number of drugs will be going off-patent.

Ratings agency Crisil said drugs worth $130-150 billion will be going off patent between 2012 and 2017. To capitaliseon this, it expects that India’s top 20 pharmaceutical companies will crank up capital expenditure by around 40 per centto over Rs. 50,000 crore by 2017-18.

While the domestic industry was at about Rs. 77,000 crore in 2013, exports ranged around Rs. 90,000 crore, accord-ing to S. V. Veeramani, President, Indian Drug Manufacturers’ Association (IDMA).

Pharmaceutical patent filings numbered around 2,500 in 2013, growing at around 11 per cent.“We require robust patent laws in place as there are apprehensions about patent protection in India.’’

Source: The Hindu

State-owned power major NTPC is looking at Prime Minis-ter Narendra Modi’s proposed visit to the United States toharness its plan for the country’s first eco-thermal project.

“We may need to send a team to the US to identify agen-cies for collaboration. But this will be taken at the govern-ment level after the Prime Minister’s visit to the US. Atpresent the geo-thermal project is at an exploratory stageand the DPR 9 detailed project report is being prepared,”Roy Choudhury said on the sidelines The Bengal Chamberof Commerce organised environment and energy conclavein Kolkata.

NTPC had earlier signed a MoU with the Chhattisgarh Renewable Energy Development Agency to set up the project atTattapani. This was followed by an MoU with the Geological Survey of India for preparation of a detailed project report.

“We hope there will be discussion on this during PM’s visit to US. This may pave the way for any possible tie-up fortechnolgical assistance with any US firm in this field,” he added.

On the renewable energy front, NTPC is also giving a thrust to its solar portfolio.


that may include variants or upgrades. The company has launched the ‘Xcent’ entry sedan, and the next-generation ver-sions of ‘Santa Fe’ SUV and the ‘i20’ compact.

“We have plans to enter segments where we are not present and these include the compact SUV and the MPV cate-gories,” Seo said. The company’s R&D centre in Hyderabad will also play a part in the development of the models. Seosaid it takes almost Rs 1,000 crore to develop a new model and company officials said annual investments for new prod-ucts will be to the tune of Rs 1,600 crore.

Source: The Times of India

Pharma players gear up to cash in onoverseas opportunities

NTPC looks ahead to PM’s US visit for itsgeo-thermal project


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Soon Chinese electric vehicle (EV) makers may call Sanand their home. A group of around 15 companies from China areplanning to set up an industrial park near Sanand with an investment of around $ 100 million.

A delegation comprising seven electric vehicle manufacturing companies today visited Sanand. Jagat Shah, chief execu-tive officer of Ahmedabad based international trade consulting firm Global Network, informed that the companies in thedelegation are Green Field Motor Co. Ltd, VOCH Group Ltd, YueHua Control Group Ltd, Zhuji Yongcheng Auto Co. Ltd, Wen-zhou Jinpi Machinery Manufacturing Co. Ltd & JBON Control Industry.

He added, “Earlier in June, a delegation of around four companies had visited Gujarat and had also held a meeting withstate government representatives. Another delegation is expected to visit around September 20. In all, around 15 compa-nies are expected to invest close to $100 million over the next two years to set up an industrial park near Sanand.”

The Chinese vehicle makers are looking for a land parcel of around 200 acres in and around Sanand. However, a plot isyet to be finalised. “The companies are open to getting land allotted by the government or can also go for private buying,”Shah explained.

China India Trade and Investment Centre ( CITIC ), Ahmedabad is hosting the delegation.The delegation members are manufacturers of electrical cars, two-wheelers,three- wheelers and four-wheelers for road

cleaning, city sanitary car, ambulance car, police cars etc.Shah further informed that the Chinese EV makers are also looking for joint venture partners in Gujarat. The chairman of

the China Electrical Car Association & Wenzhou Electrical Car Association are also with the delegation. “They also visitedthe Tata Motors Nano plant today during their visit to Sanand,” he added.

Source: Business Standard


“We have already invited tender for 1,000 MW. We are talking to states like Madhya Pradesh, Andhra Pradesh and Ra-jasthan, who are keen on developing solar energy parks,” Roy Choudhury said. NTPC plans to set up 3,000 MW of solarpower project over the next three to four years.


Chinese e-vehicle makers plan industrialpark near Sanand


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WEEKLYECONOMIC BULLETIN >> NEWS ROUND-UP


Beating expectations and showing another sign of re-vival, the Indian economy expanded by 5.7 percentduring the first quarter of the current financial year tolog the highest growth yet in nine quarters or over twoyears, official data showed on August 29.

The gross domestic product (GDP), which is the ag-gregate market value of all the goods and servicesproduced in the country, had expanded by just 4.6percent in the previous quarter, that is January-March, and by 4.7 percent in the like quarter of lastfiscal.

The 5.7 percent growth in April-June quarter isalso the highest since the 6 percent increase loggedduring October-December quarter of 2011-12, as perdata compiled by the Central Statistics Office (CSO).

The first quarter GDP growth has been boosted by a sharp turnaround in manufacturing as well as a good perform-ance by mining and construction sector.

Agriculture sector output grew at 3.8 percent in April-June this year, slightly lower than 4 percent growth in samequarter last year.

Electricity output grew at a much improved 10.2 percent as compared to 3.8 percent in same quarter of the previousfiscal.

The construction sector grew at 4.8 percent, against 1.1 percent in the same period a year ago. Private final consumption spending stood at Rs.930,000 crore versus Rs.880,000 crore year-on-year, while the gov-

ernment’s final consumption spend logged at Rs.180,000 crore against 170,000 crore.While the release of the first quarter’s GDP numbers coincides with nearly a hundred days in office of the NDA regime,

one cannot lose sight of the fact that almost two-thirds of the quarter passed under a lame-duck administration whoseearlier policies would have provided the thrust to this change of gear in economic growth.

Indian industry was effusive in its praise of the numbers indicating economic recovery. “The sharp rise in GDP growth to 5.7 percent, after remaining in the sub 5 percent range for the last two years, is note-

worthy and reinforces faith in the India growth story,” Chandrajit Banerjee, director general, Confederation of Indian In-dustry (CII) said in a statement, commenting on GDP growth for the first quarter of the current year.

“In order to convert the first signs of revival into a full-fledged recovery, it is necessary that the government continuesimplementing the reforms agenda,” he added.

“GDP growth of 5.7 percent in Q1 is certainly above our expectations. It is a great news given the fact the numbers arethe best in two years,” said Assocham president Rana Kapoor.

“The GDP data released today indicating a growth of 5.7 percent in Q1 FY15, vis- -vis 4.6 percent increase in Q4 FY14,comes as a welcome breather and clearly points towards a pickup in economic activity. This momentum has to be carriedforward with greater fervor,” said Sidharth Birla, president, Federation of Indian Chambers of Commerce and Industry(FICCI).


In signs of revival, Indian economy expands5.7 percent

WEEKLYECONOMIC BULLETIN >> NEWS ROUND-UP15


The government is actively considering a proposal tohave a separate policy for allowing 100 per cent foreigndirect investment (FDI) in the manufacture of medicaldevices, through the automatic route. Consultations be-tween ministries, led by the ministry of commerce, areon. A policy and rules could be framed soon, a senior of-ficial said.

The aim is to encourage greater investment fromabroad in the sector. The health care and diagnostic seg-ment is growing rapidly, creating a major potential mar-ket for manufacturing of medical equipment and medicaldevices in India.

According to a recent report from The Boston Con-sulting Group and Confederation of Indian Industry, themedical technology sector in India was estimated at $6.3 billion in 2013, growing annually at 10-12 per cent. The reportsays the sector is highly under-penetrated, contributing merely seven to eight per cent of the spending on health care,compared to 18 per cent on pharmaceuticals.

It says the medical technology sector has the potential to touch $50 billion by 2025, if it gets ample government sup-port and clarity, in terms of policy and regulation.

Currently, medical devices come under the purview of the Drugs and Cosmetics Act, and the rules framed under it.FDI in the sector is governed by the same rules as for pharmaceuticals. However, the industry of manufacturing medicaldevices says this does not make sense. “It is unfair to club medical devices with drugs. Misclassification of devices asdrugs leads to operational challenges and delays,” says Himanshu Baid, managing director of Poly Medicure.

Also, in the case of drugs, the FDI norms are stricter and also seen to lack clarity. Though the government allows 100FDI in pharma, it differentiates between that for setting up a new facility and expansion of an existing one. FDI for the for-mer is allowed through the automatic route; that for the latter has to be approved by the Foreign Investment PromotionBoard and Competition Commission of India.

“Unlike pharma, FDI in medical devices will be essentially in greenfield (new) projects because there is no question ofbrownfield (expansion),” the official said, adding there was complete understanding on the issue within the governmentand, therefore, a resolution was on course.

Currently, India imports around 70 per cent of the medical devices used here. On the other hand, domestic pharmacompanies are major exporters of essential medicines to the world. The official says the government realises that themedical devices industry has suffered due to lack of specific norms and policy. “Investments in greenfield medical de-vices projects have been impacted because of clubbing of the industry with drugs. A separate policy will certainly boostinvestment and generate interest in the sector,” he added.

Says the report mentioned earlier: “Attracting large global companies will create a base, which will then build up thecomponents ecosystem. This, in turn, will enhance local capabilities and help local companies build their access to com-ponents, and greatly enhance the manufacturing capability.”


FDI policy for medical devices on thecards

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