WEEKLY ECONOMIC BULLETIN - indiainbusiness.nic.inindiainbusiness.nic.in/newdesign/upload/Publications/Weekly/July... · WEEKLY ECONOMIC BULLETIN 2 Issue no I633 July 21-July 27, 2015

NEWS FEATUREAlarmed by rising road accidents, Modi wants cashless treatment Shocked over one fatality every four minutes in road accidents in India, Prime Minister Narendra Modion July 26 said his government will soon implement a road safety policy and cashless treatment for ac-cident victims.

Make in India to reduce defence imports: OfficialA paradigm shift is required in policies and procedures to 'Make in India' and enable the country reduce im-ports and increase indigenisation for self-reliance in aerospace and defence, a senior official said on July 24.

More in this section

Foreign investment caps remain in bank, defence: SitharamanAfter India clubbed categories of foreign capital flowing into domestic companies, Commerce MinisterNirmala Sitharaman on Monday said foreign institutional investment (FII) limits in the banking and de-fence sector have been retained at existing levels to prevent disruptions in sensitive sectors.


Mashable to launch in India by AugustNew York-based news and blogging portal Mashable, which announced its entry into India in Februarythis year, will officially launch in the country by August.

OVERSEAS INVESTMENTS

ITP Division Ministry of

External Affairs Government of India

Issue No 633 I July 21-July 27, 2015

p. 02/05

TRADE NEWSAirtel in talks with Orange over Africa unit saleBharti Airtel International (Netherlands) announced on July 20 that it has entered into exclusive talks withOrange for possible acquisition of its four subsidiaries in Africa.


p. 08/10

p. 06/07

p. 11/14

p. 15/20

SECTORAL NEWSCoal India to set up football academyThe world's biggest coal miner, Coal India Limited (CIL), is keen on collaborating with the Sports Authority ofIndia (SAI) to set up a football academy, its chairman Sutirtha Bhattacharya said in Kolkata on July 25.


NEWS ROUND-UPJan Dhan gives fillip to government's mission of financial inclusionThe government's mission to provide a bank account for every household and social security schemes for thepoor is slowly taking root, with more people signing up for them, improving the prospects of achieving financialinclusion for all.


WEEKLYECONOMIC BULLETIN

WEEKLYECONOMIC BULLETIN 2

Issue no 633 I July 21-July 27, 2015

>> NEWS FEATURE

Alarmed by rising road accidents, Modiwants cashless treatment Shocked over one fatality every four minutes in road accidents in India, Prime Minister Narendra Modi on July 26 said hisgovernment will soon implement a road safety policy and cashless treatment for accident victims.

In his monthly 'Maan Ki Baat' radio programme, Modi said:"The statistics on road accidents in our country are shocking.There is an accident every minute. And... there is a deathevery four minutes."

In view of this, the government would soon introduce aRoad Transport and Safety Bill in parliament and work to im-plement the National Road Safety Policy and a Road SafetyAction Plan, he said.

The prime minister said there would soon be a nationwidetoll free number 1033 to provide information on accidentsacross the country.

Official statistics show 15 to 16 people in road accidents inthe country every hour or nearly 380 every day. The daily tollincludes 16 children.

A total of 137,000 people became road accident victims in2013.

The prime minister also said that development of the country's northeast was not possible with officials sitting inDelhi. He vowed to depute officials to the region to find solutions to problems faced by the people.

"Is it possible to develop the northeast while sitting in Delhi? No. Officials will visit and see how it is to be done."The DoNER (Development of Northeastern Region) ministry has taken a significant decision to send teams of central

government officials to the northeast and hold week-long camps there," he said.The ministry is responsible for planning, executing and monitoring the central government's development schemes in

Assam, Nagaland, Manipur, Arunachal Pradesh, Tripura, Mizoram, Sikkim and Meghalaya."These teams will hold camps in districts and villages, meet local officials, people's representatives and citizens. They

will listen to their problems and help the government to find their solutions."In his talk, Modi praised efforts made towards keeping India clean. He congratulated government officials from Harda

district in Madhya Pradesh for their 'Malyudh' (a sanitation programme). "They have given a new meaning to 'SwacchBharat Abhiyaan'. A brother gifting his sister a toilet on 'Raksha Bandhan', and the one who does so becoming 'brothernumber one' has given a new direction to the (cleanliness) mission," he said.

Speaking on issues like electricity, Modi said his government was committed to providing power to all villages."Whatever facilities are provided in cities, similar facilities are required for people in villages too if we have to develop

our nation," he said.Modi also expressed concern that fewer students were taking up science at the higher education level."Out of 100 only one or two students take up science. It's a cause of concern," the prime minister said, adding that stu-

dents must be encouraged to study the subject.To mark Kargil Day on July 26, Modi paid tributes to soldiers killed in the 1999 Kargil war with Pakistan."Each and every Indian soldier fought bravely. I pay my respects to the soldiers who ... fought for the country," he said

Baat" radio programme."The Kargil battle was not just fought on the borders... Every village, city and town made a contribution."

Source: Indo-Asian News Service

WEEKLYECONOMIC BULLETIN >> NEWS FEATURE3


A paradigm shift is required in policies and procedures to 'Make in India' and enable the country reduce imports and increaseindigenisation for self-reliance in aerospace and defence, a senior official said on July 24.

"We need a paradigm shift in manufacturing of defence equipment to reverse imports from 70 percent and increase pro-duction from 30 percent by making more in India," Bharat Dynamics Ltd (BDL) chairman and managing director V. Udayb-haskar said at an aerospace and defence manufacturing summit here.

Lauding the 'Make in India' initiative as timely and encouraging, he said increasing public-private partnership would notonly reduce defence imports, but also scale uplocal manufacturing capacity for exports aftermeeting the needs of the Indian armed forces.

"Though only nine state-run enterprises andordnance units manufacture defence equipmentwith the help of the private sector, we need to in-crease outsourcing to the latter for make in Indiato be a reality," Udaybhaskar told the delegates inthe two-day summit.

Noting that increasing PPP would help bothsectors to leverage the country's resources andhuman capital, he said the Hyderabad-based BDLwas outsourcing 80 percent of its missile produc-tion requirements to the private sector by transferring technology and providing skilling.

"In case of Akash surface-to-air missile system, which is totally indigenous, 80 percent of its production was outsourced toprivate firms, while assembling and integrating was done by us and Bharat Electronic Ltd (BEL) with technology transferfrom DRDO," Udaybhaskar said.

As the first indigenously built missile air defence system, Akash was designed and developed by the Defence Researchand Development Organization (DRDO) and BEL integrated it for induction in the Indian Air Force on July 10.

"To make in India programme a success, the public and private sectors have to scale up production capacity and skilledmanpower, invest more in research and development in new technologies and materials to compete with the best in theglobal aerospace and defence equipment markets," Udaybhaskar said.

Admitting that the private sector was hesitant to invest in defence manufacturing as it was capital-intensive and lackedvolume, he said under Make in India initiative, it could set up joint ventures with overseas manufactures or suppliers and havetheir latest technology transferred to make sub-systems, components and spare parts to increase local content and benefitfrom the offset policy.


Make in India to reduce defence imports: Official

WEEKLYECONOMIC BULLETIN >> NEWS FEATURE4


The launch of 'Make in India' initiative has seen an increase in FDI equity inflows by 48 percent, parliament was told on July24.

"After the launch of 'Make in India' initiative in September 2014, there has been a 48 percent increase in FDI equity inflowsduring October 2014 to April 2015 over the corresponding period last year," Commerce and Industry Minister NirmalaSitharaman told the Lok Sabha in a written reply.

"The Investor Facilitation cell in Invest India has received more than 12,000 queries on its portal since the campaign began.Several countries such as Japan, China, France and South Korea have announced their intention to make huge investments inIndia in various industrial and infrastructure projects," she added.

The minister also informed that an expert committee has been constituted to examine the possibility of replacing multipleprior permissions and pre-existing regulatory mechanism.

Meanwhile, the government also informed that it had received 170 fresh proposals of FDI in 2015 (till date) which is a di-rect 11.7 percent increase from 2014 when it had received 150 proposals.

While 85 proposals have been approved and 31 rejected, rest of the proposals have been deferred.Sitharaman also noted that the entire range of rail infrastructure was opened to 100 percent FDI under the automatic

route, and in defence, sectoral cap was raised to 49 percent."To boost infrastructure creation and to bring pragmatism in the policy, the government reviewed the FDI policy in the con-

struction development sector also by creating easy exit norms, rationalising area restrictions and providing due emphasis toaffordable housing," she added.

Interestingly, the data showed there were higher FDI inflows during the year 2012 and 2013 when the United ProgressiveAlliance government was in power.


'Make in India' launch sees 48 percent increase in FDI equity inflows

WEEKLYECONOMIC BULLETIN >> NEWS FEATURE

Nasscom President R Chandrashekhar on July 23 said that hiring in the IT sector will rise around 6% this year.Currently, the industry employs around 3.5 million people.Saying that India is a leading nation in the field of digital technology in terms of talent availability, Chandrashekhar said it is

important to recognise that people run an enterprise and not technology and gadgets.“How to manage the workforce in the midst of

this sea of technology and gadgets is really signifi-cant. People are the real assets and ultimately itis the human resources that make the differencefor a company," he said.

He was talking at the two-day Nasscom HRSummit on the theme of the Digital Highway –HR’s journey in to the future.

He said with technology pervading every as-pect of our life, HR would have to change too. Themajor challenge for HR is building the leadershipfor tomorrow as well as dealing with employeeswho have over 15 years of experience and are fac-ing a risk of redundancy.

Social media, analytics and cloud each have a profound impact on HR functions, he added.Social media can play a role for recruitment, building loyalty and branding; analytics for workforce planning, skill set gap

mapping and sentiment analysis; mobile in learning and development, hiring and attendance management and cloud for pay-roll, timesheet and, reward, he said.

A Nasscom study showed that ten years from now, globally 75% of the workforce would be constituted by the millennials– those who came in to the workforce post 2000 or were born post 1980, he said.

Source: Business Standard

Hiring in IT sector to grow 6% in 2015: Nasscom President

5


WEEKLYECONOMIC BULLETIN 6


>> OVERSEAS INVESTMENT

New York-based news and blogging portal Mashable, which announced its entry into India in February this year, will offi-cially launch in the country by August.

The Pete-Cashmore-founded portal joined hands with Zee Entertainment Enterprises-promoted India.com and it isthrough this tie up that the Indian version of Mashable will be launched.

The tie-up, among other things, will seeIndia.com provide editiorial and advertising support.Mashable will have a local editiorial team that willgenerate content for the Indian market.

Mashable is also expected to leverage the ex-pertise and reach of india.com that runs severalwebsites specialising in consumer technology,cricket, Bollywood and health respectively.

The 10-year-old Mashable focuses on chroniclinghow technology and digital media are impacting theworld. It ranks among the top tech websites in theworld with a claimed unique visitor base of 42 mil-lion a month.

Mashable will compete with the likes of Quartz,Huffington Post, Gizmodo and Business Insider,which have all made their way into India in the last one year.

Gizmodo, Huffington Post and Business Insider, incidentally, were launched by Times Internet, the digital company be-longing to Bennett Coleman & Company (BCCL) .

Some of the other global digital properties launched by Times Internet in India recently include Advertising Age and LifeHacker, both popular websites in their genres of advertising and technology respectively.

Technology, say digital experts, is a top theme with online publishers in India. Times Internet alone has atleast four digi-tal properties in its portfolio specialising in technology-based content.

Like Times Internet, Zee Enterprises' India.com also appears to be building a tech-specific content portfolio with moretie-ups and acquisitions in the pipeline. It currently has two in its portfolio - the soon-to-be launched Mashable and in-house BGR.in.

"Consumer technology is a subject that has a lot of scope and already enjoys a lot of readership. We shall be are lookingat more acquisitions in the tech space in India and from abroad. This we believe will help us consolidate readers and helpus build a strong tech portal portfolio. We are in talks with some portals, but cannot reveal anything yet," Sandeep Amar,CEO, India.com, said.

The tech-specific content platform is also expected to lend itself well to native advertising, Amar added.In other genres, India.com has beefed up its cricket coverage by getting on board cricketer VVS Laxman as a consulting

editor. Laxman will be actively involved in mentoring the writers on the portal and giving insights on analysis during amatch.


Mashable to launch in India by August

WEEKLYECONOMIC BULLETIN >> OVERSEAS INVESTMENT7


After India clubbed categories of foreign capital flowing into domestic companies, Commerce Minister Nirmala Sitharamanon Monday said foreign institutional investment (FII) limits in the banking and defence sector have been retained at existinglevels to prevent disruptions in sensitive sectors.

"In defence as regards the cap which prevailedfor FII and in banking, particularly the private sectorbanking, on FIIs... in those two specific areas, spe-cific sub-caps will prevail," she told reporters at anevent here on trademarks, jointly organised by herministry, the World Intellectual Property Organisa-tion and industry chamber Ficci.

"We do not want fly-by-night operators or quickmoney coming in or going out," the minister said.

In a move to attract more foreign investment andsimplify norms, foreign institutional investment, for-eign portfolio investment, qualified foreign invest-ment, and non-resident Indian investments havebeen clubbed into a single composite category.

Under the existing policy, there are different caps for separate investment categories like foreign direct investment (FDI),FII and NRIs.

"The cabinet approved the introduction of composite caps for the simplification of foreign direct investment," FinanceMinister Arun Jaitley told reporters here after the decisions.

Among the decisions, a single entity under any of these categories can invest up to 10 percent of the capital of a com-pany, while collectively it can go up to 24 percent.

But the cabinet has allowed companies to raise the limit of such investments beyond 24 percent as long as these fallwithin the sectoral cap in which these operate. This apart, no changes were made in the existing limits on foreign equity invarious sectors.

The introduction of composite caps has led to confusion among bankers who say overseas portfolio investments cannow go up to 74 percent as against the current ceiling of 49 percent.

Opposition parties, including the Congress and the Left, have opposed the proposal on the ground that portfolio invest-ment is by nature very short-term "hot money" that can leave the country any time, creating crises of capital outflow.


Foreign investment caps remain in bank,defence: Sitharaman

8

WEEKLYECONOMIC BULLETIN >> TRADE NEWS


Airtel in talks with Orange over Africa unit saleBharti Airtel International (Netherlands) announced on July 20 that it hasentered into exclusive talks with Orange for possible acquisition of its foursubsidiaries in Africa.

"Orange and Bharti Airtel International (Netherlands) enter an exclusiveagreement concerning four Airtel subsidiaries in Africa," it said in a state-ment.

"Orange and Airtel have entered into an exclusive agreement to explorethe possible acquisition by Orange of Airtel's subsidiaries in Burkina Faso,Chad, Congo Brazzaville and Sierra Leone. There is no certainty of any bind-ing agreement as a result of these discussions," it added.



India, Australia CECA talks likely next monthIndia and Australia are soon likely to sit for the next round of negotiations on the proposed Comprehensive Economic Coopera-tion Agreement (CECA), even as talks between the both gain momentum in an attempt to reach the December-end deadline.This is going to be the ninth round of talks, which will take place in Australia.

The talks gathered momentum since the visit of Aus-tralian Prime Minister Tony Abbott in India in 2014. Both PMAbbott and Prime Minister Narendra Modi have given theirweight behind the CECA and set the 2015 deadline.

However, talks continue to remain stuck on the sensitiveissue of agriculture, as Australia is demanding greater accessinto the Indian markets by way of lower tariffs and duty-freeaccess for some of its dairy products.

But for India, this translated into allowing cheaper importsof Australian diary goods that might impact the millions em-ployed in the sector.

India-Australia CECA could well be the first such broad-based free trade deal that the new government would enterinto after coming to power last year in May. Ever since thetalks started in 2011, both sides have had eight rounds of negotiations.

According to sources, Australia is willing to give India similar concessions in terms of slashing of tariffs in a wide range ofgoods, as it did with China and New Zealand under a bilateral arrangement.

But in the bargain, Australia is also insisting on “same or greater concessions” that India has offered to Japan and SouthKorea in the respective bilateral trade pacts with them.

For India, the main concern is how the Regional Comprehensive Economic Partnership (RCEP) agreement pans out, in whichAustralia is also a member.

Besides, India and Australia have both locked horns over services. Both sides want a liberal visa regime and greater move-ment of its professionals into each other’s countries.

Bilateral trade between India and Australia presently stands at $15 billion compared to $160 billion worth of trade that Aus-tralia has with China.

Recently, Australian Trade Minister Andrew Robb stated that signing the CECA with India is their “number one priority”. He also said during the India-Australia CEOs forum, the services sector is a crucial area for both the countries and Australia

can contribute significantly in areas such as engineering, education, healthcare, contracting, construction, design and architec-ture.


9



Pipavav Defence and Offshore Engineering Co. Ltd and Russia’s JSC Ship Repairing Centre Zvyozdochka have agreed to jointlyrefit and certify submarines of the 877EKM category at an estimated Rs.11,000 crore.

The Anil Ambani-controlled Reliance Group is in the process of acquiring a majority stake in Pipavav Defence through anopen offer, subject to necessary approvals.

In a statement, Pipavav Defence said the company pro-poses to execute the programme in a joint venture with theRussian firm, in which it will hold 51% stake.

“This will also mark the first time the work for refit ofsubmarines is being considered for the private sector inIndia,” Pipavav Defence said. “The skills and experience de-veloped by the joint venture will position Pipavav Defencefavourably for undertaking similar work for large subma-rine forces of similar class deployed by countries such asAlgeira, Vietnam and Iran, with potential additional rev-enues of approximately Rs.20,000 crore,” the companysaid.

Prime Minister Narendra Modi’s emphasis on defenceequipment manufacturing in his Make in India campaignhas led several companies to scramble for licences.

India currently has a fleet of nine EKM submarines, an export version of Russia’s kilo-class vessels. Of these, eight werebought during 1986-1990 and have completed 25 years of designated service life.

Refit and life extension will provide an additional 10-15 years of operational life, bringing great relief to the Indian Navy, facingserious depletion of its underwater assets due to delay in new inductions. According to the Indian Navy website, Sindhughosh-class submarines or EKM-class submarines, designated 877EKM, were built under a contract between the Indian governmentand Rosvooruzhenie, Russia’s intermediary agency for exports/imports of defence-related and dual-use products.

The submarines have a displacement of 3,000 tonnes, a maximum diving depth of 300m, top speed of 18 knots, and are ableto operate solo for 45 days with a crew of 53. On 12 June, Hindustan Times reported that five Indian shipyards, including Pi-pavav Defence, have been shortlisted by a top government committee to compete for a Rs.64,000-crore project to build high-tech submarines for the navy, citing unnamed government officials. Six advanced submarines will be built under project P-75I.One of the costliest projects under the Make in India programme, it is expected to scale up the navy’s undersea warfare capabili-ties and is critical to counter the rapid expansion of China’s submarine fleet.

The shipyards shortlisted by the high-powered panel are Mazagon Dock Ltd, Hindustan Shipyard Ltd, Cochin Shipyard Ltdand private sector yards Pipavav Defence and Larsen and Toubro Ltd, Hindustan Times reported.

“The refit for Indian Navy will open up more opportunities in the world. There are similar submarine programmes across theworld,” said a senior Reliance Group executive.

On 16 July, Press Trust of India reported that Anil Ambani will invest an “additional Rs.5,000 crore” over the next few yearsin Pipavav Defence, pitching it as a one-stop shop for all requirements of the Indian Navy. India will see a defence budget alloca-tion of $620 billion between FY14 and FY22, of which 50% will be capital expenditure, according to a February report releasedby Federation of Indian Chambers of Commerce and Industry (Ficci) and financial services firm Centrum Capital Ltd.

The annual opportunity for Indian firms—both state-owned and private—is expected to be $41 billion by FY22 and $168 billioncumulatively, the report said.

Source: Mint

10


Pipavav Defence, Russian firm in joint venture to revamp Navy submarines

WEEKLYECONOMIC BULLETIN >> SECTORAL NEWS11


The world's biggest coal miner, Coal India Limited (CIL), is keen on collaborating with the Sports Authority of India (SAI) to setup a football academy, its chairman Sutirtha Bhattacharya said in Kolkata on July 25.

"We would be eager to set up an academy withSAI. We are in talks with them. It is possible thatthe football academy will be like a centre of excel-lence and it will be in the eastern region," Bhat-tacharya said at the Mohun Bagan club.

Bhattacharya said the Maharatna company willsoon come out with a sports policy.

"We have already framed a policy and are nowlooking at the ones in place by the Railways andServices. We will roll this out as soon as possible.We are looking at recruiting sportspersons againand create promotional opportunities for them. Wewill have sports development officers to start withand they will be former sportspersons," he said.

Bhattacharya along with CIL director personnelR. Mohan Das, were interacting with mediapersons ahead of a friendly with the Calcutta Sports Journalists' Club.

Besides setting up a registered society exclusively for sports, the CIL has asked all its eight subsidiaries to adopt two disci-plines, one outdoor and another indoor.

"It will be the responsibility of those subsidiaries to create infrastructure, form Coal India teams which will take part in na-tional competitions and develop coaches and players.

"We have also earmarked a constant source of income for this. From every ton of coal we sell, 25 paise will be allocated tothis fund. That would mean we will have a starting budget of Rs.11 crore approximately. And every year the allocation will in-crease," said Das.

In the friendly, Coal India's Chairman's XI defeated Calcutta Sports Journalists' Club 2-0 with Subroto Roy and Sukhen Sen-gupta scoring once in each half.


Coal India to set up football academy



Pharma major Lupin to acquire 2 US firmsin $880 million dealPharma major Lupin on July 23 said it has agreed to acquire US-based, privately-held Gavis Pharmaceuticals LLC andNovel Laboratories Inc, in a transaction valued at$880 million.

The cash-free and debt-free transaction hasbeen unanimously approved by the boards ofLupin and GAVIS and will enhance Lupin’s scalein the US generic market while widening theMumbai-based company’s pipeline in dermatol-ogy, controlled substance products and otherhigh-value and niche generics.

The acquisition creates the 5th largest portfo-lio of ANDA filings with the US FDA, addressinga $63.8 billion market.

Commenting on the acquisition, Lupin chiefexecutive Vinita Gupta said, "This is a pivotal ac-quisition for Lupin as it aligns with our goal toexpand and deepen our US presence. GAVIS has a strong track record of delivering highly differentiated products in ashort time and is poised for continued growth as it delivers on its existing pipeline. GAVIS’s capabilities and pipeline arean excellent complement to Lupin.”

Among the immediate benefits from the Gavis acquisition is a highly-skilled US based R and D organization comple-menting Lupin’s Coral Springs, Florida, inhalation R and D center.

Gavis recorded sales of $96 million in FY 2014 and has over 250 New Jersey based employees. Gavis currently has 66ANDA filings pending approval with the US FDA and a pipeline of over 65+ products under development. 72% of these fil-ings pending approvals represent niche dosage forms.

Under the transaction, Gavis’s New Jersey manufacturing facility will become Lupin’s first manufacturing site in theUS. GAVIS specializes in formulation development, manufacturing, packaging, sales, marketing, and distribution of phar-maceuticals products.

The US company’s pending filings address a market value of about $9 billion and the combined company will have aportfolio of 101 in-market products, 164 cumulative filings pending approval and a deep pipeline of products under de-velopment for the US.

The acquisition will also accelerate Lupin’s entry into niche areas like controlled substances and dermatology. “Theacquisition is expected to be accretive to the earnings from the first full year of operations. In addition to the compellingstrategic fit, there is a strong cultural fit between Gavis and Lupin’s entrepreneurial spirit and values,” said Gupta.

Gavis founder and CEO Veerappan Subramanian said: “This is a time of globalization for the specialty pharmaceuticalindustry and GAVIS is well positioned to capitalize on this exciting opportunity. Joining forces with Lupin will help realizeour vision of building a broader, research-based high value, specialty business through organic growth. I am confidentthe combined entity will be a powerhouse in the US specialty space and will significantly enhance Lupin’s US platform.”

Source: Hindustan Times



Foundation for TCS intelligence systemscentre laidTata Sons Group chairman Cyrus P. Mistry on July 23 laid the foundation stone for F.C. Kohli Centre on Intelligent Sys-tems (KCIS).

It is being built by Tata Consultancy Services(TCS) with an investment of Rs.20 crore at Inter-national Institute of Information Technology, Hy-derabad.

The centre will carry out high impact re-search in natural language processing, roboticsand cognitive sciences.

The KCIS, coming up with 60,000 square feetbuilt up area, will act as an umbrella organisa-tion at the institute to both strengthen the exist-ing groups and facilitate new activities in relatedareas.

The new centre will try to attract projects andfunding from other entities in the governmentand industry sectors, coordinate research in related domains across different centres of IIIT Hyderabad, as well as in theinstitute's research collaboration with other academic institutions in the country.

Telangana Information Technology Minister K. Tarakarama Rao, TCS CEO and MD N. Chandrasekharan, former CEO ofTCS F.C. Kohli, and IIIT director P.J. Narayanan attended the ceremony.




Indian pharma companies need strongdigital dose: StudyA majority of Indian pharma companies, both multinational and domestic, are yet to exploit the huge opportunities of-fered on various digital platforms to connect with their stakeholders effectively, a new study said on July 22.

Titled 'Indian Pharma Digital Health Report 2015', the study by D Yellow Elephant analysed 40 pharmaceutical com-panies in the country across 10 key digital parametersranging across websites, applications and 10 major socialmedia platforms.

The study revealed that only nine out of 40 -- less than25 percent -- managed above 50 out of 100 on thesecounts.

While LinkedIn is the most popular social media plat-form, only 14 companies, barely 35 percent, were activeon it.

Google+ notched a high presence of 87 percent butonly one out of 40 companies was found active on it.

As far as India-specific Facebook is concerned, onlyeight out of 40, or 20 percent fell in this category, 12 hada Blogger presence, and other platforms like Slideshare,Instagram and Vine are used by less than 20 percent.

D Yellow Elephant managing director Aman Gupta saidthat in view of this data, Indian pharma sector -- whetherIndian companies or global players, lag behind their international counterparts by at least 5-7 years.

If compared to other sectors, the time lag could be around 10 years or so, he said."Ironically, some of these same companies abroad are seen to be proactively using digital platforms to engage with

health care professionals (HCPs) and patients," Gupta said.The firm's digital strategy lead Chandni Dalal said that the findings show the reluctance of the pharma companies to

effectively engage with their stakeholders on the digi-platforms.The duo explained that the report is an attempt "to help the pharmaceutical sector entities in India catch up on the

time gap, identify the loopholes and help them incorporate digital medium in the decision making process."It also help underline opportunities that exist and outline a roadmap for these pharma companies to engage better

with the HCPs and the patient communities, given the advent of smartphones across geographical locations."It is high time that this potential is realized. What better way than effectively use these platforms to bridge the gap to

healthcare access in a country like ours," Dalal said.On the positive side, Indian pharma companies are venturing onto the digital highway but only 30 percent have an

India-specific website."In the age of quantified self, Indian patients and HCPs are exhibiting an expectations market, with the advent of digital

health, big data and dialogue exchange; Indian pharma has long stayed behind the curve on social media," said Gupta.Source: Indo-Asian News Service

WEEKLYECONOMIC BULLETIN >> NEWS ROUND UP15


Jan Dhan gives fillip to government's missionof financial inclusionThe government's mission to provide a bank account for every household and social security schemes for the poor isslowly taking root, with more people signing up for them, improving the prospects of achieving financial inclusion for all.

In addition, the share of bank accounts with a zero balance has fallen to about half of the total under this initiativecompared with as much as 76% in October last year.

According to data from the Pradhan Mantri Jan-Dhan Yojana website, 16.9 crore accounts wereopened as of July 15 across public, private and ruralregional banks with a combined balance of Rs20,288 crore.

The share of zero-balance accounts has comedown to 50.6%, suggesting that account usage is in-creasing.

"The implications are — one, a big push for thegovernment's financial inclusion drive; two, advancethe initiative to move towards a cashless economy,"said Saugata Bhattacharya, chief economist at AxisBank.

"This will enable the government to implement di-rect transfers of subvention outlays, thereby reduc-ing the extent of leakages. All of this should increasesystemic efficiency adding to the country's growth prospects." There is a two-fold increase in the number of accountsopened from 6.87 crore accounts with a balance of Rs 5,180 crore at the end of October.

"The Jan-Dhan initiative will slowly encourage the habit of saving," said Ashish Das, a professor at the Indian Instituteof Technology Bombay, who steered financial education initiatives by the finance ministry.

"The share of zero balance would go down further as the government moves towards complete transfer of subsidyfunds into bank accounts, minimising leakages."

Subsidy for liquefied petroleum gas (LPG), used for cooking, is now credited to the conconsumers' bank accounts. Previously, LPG cylinders were be sold at subsidised rates. Three social security schemes — Pradhan Mantri Suraksha

Bima Yojana (PMSBJ), Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) and the Atal Pension Yojana (APY) — havealso got subscribers.

As of July 14, about 2.7 crore people have registered for the Pradhan Mantri Jeevan Jyoti Bima Yojana, which pro-vides life cover of Rs 2 lakh at an annual premium of Rs 330.

The general insurance policy, or Pradhan Mantri Suraksha Bima Yojana, which insures accidental death and disabilityat Rs 12 a year for a cover of Rs 2 lakh, has attracted 7.8 crore people, according to government estimates. About 4.7lakh subscribers have joined the pension scheme.

"Out of the three schemes, the general insurance policy is doing well under the Jan-Dhan programme because of lowpremium," said a senior executive of New India Assurance Co. The life insurance policy can be bought by people up to theage of 50 and the accident cover by anyone between 18 and 70 years.

Source: The Economic Times



Mobile Internet users in India to double by2017, says studyThe number of mobile Internet users in India is projected to double and cross the 300 million mark by 2017 from 159million users at present, a new report by Internet and Mobile Association of India (IAMAI) and consultancy firm KPMGsaid on July 20.

Though India has low Internet penetration at 19%compared with other developed and developingeconomies that have up to 90% penetration, thecountry has the third-largest Internet user base inthe world, with more than 300 million users, ofwhich more than 50% are mobile-only Internetusers.

“The number of mobile Internet users in India isexpected to grow to 314 million by the end of 2017with a CAGR (compounded annual growth rate) ofaround 28% for the period 2013- 2017,” according tothe report authored by Akhilesh Tuteja, partner andhead of the technology vertical, and Ashvin Vellody,partner, management consulting, at KPMG.

“This impressive growth would drive India to be-come one of the leading Internet markets in the world with more than 50% of Internet user base being mobile-only Inter-net users.”

The growth will be led by the government’s Digital India initiative, collaboration among mobile Internet ecosystemstakeholders and innovative content and service offerings from mobile-based services players.

Digital India is an umbrella programme that encompasses providing Internet access to all by creating infrastructure,delivering government services on the Web and mobile phone, promoting digital literacy and increasing electronic manu-facturing capability.

In the 2014-15 Union budget, the government committed Rs.500 crore for building infrastructure, as per the NationalRural Internet and Technology Mission, with an additional Rs.100 crore for improving e-governance with the aim to in-crease tele-density in rural areas.

The content as well as service providers have emerged as important stakeholders for the growth of mobile Internet.“Meaningful and compelling content can be an important driver for enabling adoption of mobile Internet. Traditional

services like voice, SMS are gradually being replaced by mobile data services,” said the report.“Indian mobile content usage is dominated by email, social networking, chat, games and news. While these categories

gained popularity because they fulfil multiple needs of consumers, the positive social and economic impact of the Inter-net is probably manifold,” said the report.

The report said mobile phones were being touted as one of the greatest mediums of change—like giving people with-out a bank account access to financial services and providing health services in rural areas.

“The mobile data services would help to tackle key issues plaguing education, health, finance, agriculture and gover-nance in India,” it said.

On the consumer side, increase in smartphone penetration and increasing demand for Internet-based services such aschat, social media, video and music through the mobile medium will accelerate growth in mobile Internet usage.



India has become the third-largest smartphone market in the world. The number of smartphone users is expected toreach 369 million by 2018.

With the growing number of mobile device connections, India is likely to become one of the largest Internet markets inthe world.

While rural India is still catching up with 2G, telecom operators are investing heavily on high speed technologies suchas 3G and 4G to tap growing demand in urban India.

The number of 3G subscribers in India is expected to grow to 284 million by the end of 2017 from 42 million at the endof 2013. Meanwhile, 4G user base is projected to grow at an annual growth rate of 344% and a CAGR of 103% from 2013to 2018.

However, there are challenges in the mobile Internet ecosystem that could impede growth substantially.Telecom operators are finding themselves cash-strapped in making heavy investment for network infrastructure up-

grade due to high licence fees, charges and levies which total up to 28-29% of the total revenue, the report stated.This is in addition to uncertainties around regulation and policy primarily concerning merger and acquisition guide-

lines, spectrum management and tax regulations that is adding to the telcos’ woes.The content and service providers, despite being a source for cutting-edge innovation, also face significant challenges

including slower and overloaded telecom networks, experimentation with monetization models and underdevelopedbilling and customer care systems.

What perhaps worsens the situation is “limited collaboration between the different pillars of the ecosystem; eachcomponent is trying to take the challenges of demand, supply and customer satisfaction head-on by itself”, the reportsaid.

To overcome various challenges, the business models of various companies in the ecosystem would need to be rede-fined, it added.

Source: Mint



Reverse innovation 2.0: More MNCs takeIndia’s frugal engineering globalA new top-loading washing machine developed - based on feedback from Indian consumers - by Samsung India’s researchand development lab in Chennai for the Indian market is now a bestseller in South Korea. What’s more, it’s altering the cul-ture of washing clothes in the distant Asian market, where front-load machines was a distinct trend.

South Korean chaebol Samsung is not the only global company which is taking advantage of frugal engineering andcheaper development costs in India to make products here which are both cost-effective and relevant for the global market.

By the festive season, French car maker Renault is introducing a new car in the Indian market, which was conceived andbuilt from scratch by its Indian R&D as part of another frugal engineering strategy championed by Carlos Ghosn, chairmanand CEO of the Renault-Nissan Alliance. Part of Ghosn’s pet project, the car - Kwid, priced around Rs 3-4 lakh - would belaunched in other markets globally over time.

Started by the likes of GE and Philips in the healthcare space, reverse innovation is witnessing a new wave of ideas in sec-tors like consumer durables, automobiles and foods as well.

It’s a process by which MNCs manufacture cost-effective products through local R&D, designed for the local markets andwhich are ultimately launched globally.

Samsung’s ActivWash brought the top-loading machines back in vogue in South Korea, cornering over 40% of the top-loader segment.

“ActivWash is an example of a product that we made for India, but soon got recognized for its utility across our shores,”Ranjivjit Singh, senior VP, corporate marketing,

Samsung India Electronics, said. Project “Dhobighat’, as it was called, was conceptualized, developed and launched inIndia last year and now, an ActivWash sells every 2 minutes in South Korea. Samsung showcased the product at CES LasVegas - the world’s top consumer electronics show - earlier this year where it grabbed both eyeballs and reviews.

Arch rival LG too has developed a few products in India, which it now plans to sell in South East Asia and Middle-East andAfrica region. Innovations from India such as mosquito Away Technology ACs, smart refrigerator 2.0 and a top-load washingmachine are all included in its list of exports by the year-end.

BSH Household Appliances (BSH), which sells domestic appliances under the Bosch and Siemens brand, too has workedon some India-specific innovations on its washing machines.

An Indian washing machine to give shortest wash cycles was introduced in other ASEAN countries subsequently. Another product, designed to give up to 10% better drying efficiency, is now being explored for other ASEAN countries as

consumers there have a similar requirement. “BSH is continuously working on innovations and reverse innovation to impro-vise and offer the best experience to its discerning consumers,” Gunjan Srivastava, MD & CEO, BSH said.

Customization is rampant in the food industry as well. Burger King, which has opened around 17 restaurants so far inIndia, has developed products that are unique to the Indian market.

“This is the only experience in the world where we have started from zero. In most other markets where we have launchedin the last 4-5 years, we have come in with our core menu. In India, we have a mutton whopper, a chicken whopper, a vegcrispy product that are unique to India,” Jose E Cil, global president, Burger King, said.

Burger King is open to the idea of exporting the concept to other parts of the world, such as the UK.On the other hand, Mondelez India (erstwhile Cadbury), which pioneered the development of visi-coolers, about 10 years

ago, has recently deployed a new technology in these low-cost refrigeration systems to Malaysia. Visi-coolers help in the storage of products like chocolate. Several countries are now conducting in-store trials for this

technology.

WEEKLYECONOMIC BULLETIN >> NEWS ROUND UP

Coca-Cola India, too, developed a visi-cooler for the Indian market, which was later introduced in other parts of the world. Similarly, Hindustan Unilever’s Pureit water purifier, an Indian innovation that was launched to tackle the problem of safe

drinking water, was later made available in several markets like Indonesia, China, Africa and Brazil.Historically, companies innovated in a rich country like the US and sold those products in a poor country like India. Reverse innovation is doing just the opposite. Vijay Govindarajan, Coxe Distinguished Professor at Tuck at Dartmouth &

Marvin Bower Fellow at Harvard Business School, said innovation is being adopted first in a poor country now as customershere are fundamentally different from customers in rich countries.

Rich countries, on the other hand, have the money to spend on innovation as those countries have customers with pur-chasing power to buy expensive products.

Take, for instance, healthcare. India has 1.2 billion people who need healthcare but majority of them do not have much tospend.

“We have, relatively speaking, fewer hospitals to take care of this huge population as compared to the US. The only wayIndia can solve its problem is through breakthrough innovations in healthcare that can deliver world-class quality at highlyaffordable prices,” said Govindarajan, who believes India can lead the world in breakthrough innovations in education and re-newable energy.

“When India can innovate world-class quality products at ultra-low costs, those products will appeal to customers all overthe world,” he said.

India’s space programme may not have sent a spacecraft to explore the outer rings of the solar system yet, but India hashelped global companies supply small, but significant products and process ideas initially designed exclusively for the Indianmarket to be later used by consumers across the world.

Source: Times of India

19


WEEKLYECONOMIC BULLETIN >> NEWS ROUND UP

Darjeeling's iconic Makaibari tea set toenter Dubai marketDarjeeling's Makaibari tea, which fetched a price ofRs 1.11 lakh per kg last year, is poised to enter the Dubai market.

The tea company is in talks with Dubai's upmarket luxury food chain Bateel to sell its teas where demand for premiumquality tea is rising.

While coffee is considered the most favoured hotbeverage in Dubai, tea sales are fast rising in the Gulfnation, helped by an influx of Arabic expatriates whoare escaping countries like Syria, Lebanon and Egyptdue to geopolitical tensions in those regions, said indus-try officials.

"We are hopeful to clinch a deal with Bateel in amonth's time," said Rudra Chatterjee, director,Makaibari Tea Company. Makabiari has also launchedits new portal through which buyers can directly sourceits finest teas from the garden itself.

"We have received a good response for this initia-tive," said Chatterjee. Makaibari is also being sold in du-tyfree shops in Mumbai's international airport.

Makaibari also re-launched its packet tea under thebrand name Apoorva for the connoisseurs of premium Darjeeling tea. Makaibari Tea had created a record by booking ordersat a record price of $1,850 per kg (Rs 1.11 lakh) last year. The orders had come from tea importers in Japan, the UK and US."We are hoping for a similar price in the current year as well.

Last time, the offer came around September, so there's still some time left," Chatterjee said. Makaibari tea estate inKurseong area produces one lakh kg of tea and is one of the oldest tea estates in the district.

Its factory, set up in 1859, is the oldest tea manufacturing unit in the hills. Makaibari Tea was owned by the Banerjee fam-ily for four generations.

Its present owner, Rajah Banerjee, sold 90% of his stake last year to city-based Luxmi Tea Company. Meanwhile, Darjeeling tea exporters are going through a rough patch as foreign buyers are refusing to compensate them

for exchange rate losses.About a year ago, the euro was at 80-84 to a rupee, but has slipped to about 69 at present. Though the pricing continues

to be same in euro terms, in rupee terms, it means less income for sellers.Source: The Economic Times

20


DISCLAIMER

This newsletter is compilationof news articles from variousbusiness-e-newspapers and in

no way is an endorsement or reflection of

Ministry of External Affairs views.

Designed & Developed by IANS Publishing

WEEKLYECONOMIC BULLETIN


Documents

WEEKLY ECONOMIC BULLETIN - indiainbusiness.nic.inindiainbusiness.nic.in/newdesign/upload/Publications/Weekly/July... · WEEKLY ECONOMIC BULLETIN 2 Issue no I633 July 21-July 27, 2015