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INDIAGLBALBUSINESSOnlinePrintEventsPublishedbyNovember2014IndiasoutbondinvestmentmagazineHOTSPOTOPINIONIsChinawinningthestudentraceinUKSmallstepspavethewayforIndiaKumarBirlaeyescementassetsinSouthAmericaSECTORFOCUSPage6Page12Page17Page14BritaincelebratesCometoIndiaspirit CuratedNewsViews.ExclusiveIn-DepthAnalysis.ContributionsfromIndianGlobalInuencers.TheIndiaUSPartnershipHubOnlinePrintEventsProducedbyInAssociationwithMediapartnerwww.usa.indiaincorporated.com www.indiaincorporated.comPUTTINGITINCONTEXTTwoIndianladiesLeadingthecountrysglobalisationchargeThecurrentcatch-phraseisMakeinIndia.Butitisimportantthatitbecomessynonymouswithquality.NolongershouldtheMadeinIndiabrandbeviewedwithscepticismthatdubiousdistinctionshouldbeathingconsignedtotheforgottencorridorsofhistory.ThisnewinitiativebytheModiGov-ernmentshouldbebothaquantitativedriveMakeinIndiaaswellasaqual-itativeonewithMadeinIndiaimplyingabadgeofworldclassqualityandanuncompromisingpromiseoftrust.OnlythenareglobalmanufacturerstrulygoingtohavecondencetofollowtheclarioncallofComeMakeinIndia.ItisencouragingtoseethewarmreceptiontothiscallintheUK.Othercountriesappeartobelaggingbehindpreferringitseemstohunkerdownthanembracetheopportunity.OurinterviewwithbusinesssecretaryVinceCablePages48-50reiteratestheUKgovernmentsstrongcommitmenttotheIndia-UKbond.HoweverthequestionremainswhethertheUKishighonstyleandlowonactualdelivery.UKforeignsecretaryPhilipHammondusedtheRegionalPravasiBharatiyaDivasRPBDinLondonlastmonthPages14-15tostressonhowthedeliveryprocesscanbeimprovedwiththehelpoftheIndiandiasporaactingasacrucialbridge.Iechoedthisinmyremarksonthesec-onddayofRPBD.TheModigovernmentisgoingallouttobuildrelationshipsandbridgesofinuencethroughthe20-millionstrongglobalIndiancommunity.Itsmegapar-entversiontheannualPravasiBhara-tiyaDivasisscheduledforJanuary2015andwillbeheldinGandhinagarthistimetotakethediasporaintotheall-importantTierIIzone.TheIndiangovernmentseemskeenandrightlysotoalignitsdiasporaassetstosomeofitskeythemesDigitalIndiaMakeinIndiaCleanIndiaSkillIndia.AndthetwowomenleadingIndiasglobalisationchargearetherobustSushmaSwarajwhoisemergingasoneofthemostrecognisablefacesontheglobalstageandthehighlyimpres-siveNirmalaSitharamantheIndiancommerceandnanceministerPages8-11.BoththeseladiesarenotforturningasformerBritishPMMargaretThatcheroncedescribedherself.SomeoftheotherhighlightsinthiseditionincludeexclusiveinterviewsPages19-22andPages58-60theusualin-depthanalysisonhigh-proledecisionsoflastmonthPages30-31aswellasGuestColumnsfromexpertsacrosstheboard.ManojLadwaPublisherCEOIndiaInc.manojladwa INFRASTRUCTURE17KumarBirlaeyescementassetsinSouthAmericaIndiaIncsIGBisamonthlye-magazinedocumentingIndianinvestmentfowsacrosstheglobe.Itcollatesthebigheadlinesothepastmonthtopresentabroadpictureoacountryswitchinggearstomoveintotheastlaneodevelopment.CONTENTSBritaincelebratesCometoIndiaspiritPage14Redtaperoll-backredcarpetroll-outbeginsGovtshouldnotappealagainsttheVodafonejudgmentIsChinawinningthestudentraceinUKPage30Page42Page6SECTORFOCUSHOTSPOTANALYSISITMINING26UKplansintra-companyvisareview51EssarSteellinesupfundsforUSplantAVIATIONGUESTCOLUMN36CoalgasanddieselIndiafnallyshowspolicyenergybyAshokMalik38ModisUSvisitsignalsdeepersecuritytiesbyDrGarethPrice45ModisforeignpolicybyRajivKumar52RenewedUS-IndiaEconomicRelationsWhattoWatchbyPersisKhambattaINDIAGLOBALBUSINESS55BharatForgestrikesFrenchaerospacedeal56Indigotobuy250Airbusplanesfor25billion ChiefExecutiveManojLadwaSeniorEditorAditiKhannaChiefOperatingOfcerShamitGhoshEventsManagerDinaLadwaSalesAdvertisingJenniferFrancisOperationsDesignRajviSinghiProjectCoordinationNomitaShahDigitalMarketingExecutiveDarshanKhantGraphicDesignerAnkurSaxenaIndiaIncLimitedallrightsreserved.Reproductioninwholeorinpartwithoutourwrittenpermissionisprohibited.ViewsexpressedbyourcontributorsaretheirownanddonotnecessarilyrepresenttheviewspoliciesofIndiaInc.WhileeveryeffortismadetoachievetotalaccuracyIndiaInccannotbeheldresponsibleforanyerrorsoromissions.www.indiaincorporated.comOnlinePrintEventsSPECIALREPORTACTIONREACTIONINTERVIEWINDIAPOLICY32Indialaunchesbigbanglabourreforms40GettingsmartaboutSmartCities44DronestoaidinmakingDigitalIndiaareality19TheMakeinIndiainvestmentIndiaInc.InterviewwithDrArbindPrasad48SignalsfromIndiaarepositiveIndiaInc.InterviewwithVinceCable58IndiahasturnedacornerIndiaInc.InterviewwithSanjivmehta14BritaincelebratesCometoIndiaspirit8IndianIPregimeunderUSscannerINOTHERNEWS27IndianAngelNetworkinvestsinUKfrm62Softbanktoinvest10billioninIndia24IstheASEANFTAtoIndiasadvantage10MinistertoUSIndiastandsitsIPRgroundwww.indiaincorporated.com34MakeinIndiawillbeevenmoreincredibleOPINION12SmallstepspavethewayforIndiabyManojLadwa HOTSPOTIsChinawinningthestudentraceinUKTheUKismissingoutonpost-grad-uatestudentsfromIndiaandNigeriansaresettotaketheirplacenewresearchbyBritishCouncilhasfound.Indiansformthesecond-largestsourceofinternationalpost-graduatesinBritainsofaraftertheChinesebuttheUKisfailingtosteermoreIndiansawayfromtheUSwhichremainsthemostpopulardestinationforhigherstudies.ForecastingbytheBritishCouncilsuggeststhattheUKwillhost241000post-graduateinternationalstudentsby2024allowingittoremainoneofthetoptwodestinationsforstudyingapost-gradabroadaftertheUS.ButresearcherswarntheUKistoodependentonChinaforitsinternationalnumbersandthatitislosingoutonIndianstudents.Nigeriawhichiscurrentlythethird-highestsegmentofforeignpost-gradsinBritainwillsoonmoveuptosecondplace.DemographicchangesmeanIndiasappetiteforhighereducationisexpandingquicklyandprovidingasourceofinternationalpost-graduateMostrecentOfceofNationalStatisticsONSgureshadrevealedthatthenumberofoverseasstudentscomingtostudyinBritainfromCommonwealthcountriessuchasIndiaandPakistanhadfallenfrom100000to35000inthepastthreeyears.November20146INDIAGLOBALBUSINESS HOTSPOTstudentsthattheUSisexploitingtheresearchwarns.ThestudyforecaststhattheannualgrowthrateoftheUKsinternationalpost-graduatenumberswilldipoverthenext10yearsfalling4.1percentduringtheperiod2007-12to3.5percentbetween2013-24.ThismeanstheUKsinternationalpost-graduatemarketwillgrowmoreslowlythantheUSCanadaandAustralia.MostrecentOfceofNationalStatisticsONSgureshadrevealedthatthenumberofoverseasstudentscomingtostudyinBritainfromCommonwealthcountriessuchasIndiaandPakistanhadfallenfrom100000to35000inthepastthreeyears.ThenumberofIndianstudentsfellfrom18535in2010-11to13250in2011-12andfurtherto10235in201213.Althoughalargeproportionofinterna-tionalstudentsisstillexpectedtocomefromChinathenumberofpostgraduatestudentselsewherewhoarelookingtostudyoverseasisincreasingrapidly.Thegrowthrateofinternationallymobilepost-graduatestudentsisespeciallyhighinNigeria8.3percentIndia7.5percentIndonesia7.2percentPakistan6.4percentandSaudiAra-bia5.2percentandthesewillbethemarketstowatchinthecomingdecade.Thepredictionsforthenextdecadeweregeneratedbyresearcherswhoexaminedthedemographicandeco-nomicdatafor23origincountriesandsixdestinationcountriesaswellasexamininghistoricaltrends.Thestudydidnotlookattheimpactofspecicpoliticalfactorssuchasvisaarrangements.November20147www.indiaincorporated.com ACTIONInApriltheUSgovernmentinits2014301specialreportplacedIndiaontheprioritywatchlistIndianIPregimeunderUSscannerTheUnitedStatesTradeRepresen-tativeUSTRrecentlylaunchedareviewofIndianIntellectualPropertyRightsIPRregimewiththeaimtoexaminewhetherIndiashouldbeplacedonthe2014NotoriousMarketsListforviolatinginternationalIPRrights.HoweverNewDelhihascategoricallyrefusedtobesubjecttoanyunilateralactionbytheUSandhaspointedoutthatshouldtheUShaveanissuewithIndianIPRlawsitshouldtakeittotheWorldTradeOrganisationWTOdisputesettlementprocess.EarlierthisyearinApriltheUSgov-ernmentinits2014301specialreportplacedIndiaontheprioritywatchlistfollowingcomplaintsbyUSindustryonsection3DoftheIndianPatentsActwhichmakesitimpossibleforforeigncompaniestogainintellectualprotectionfromlittlealterationstoaproduct.Theactsaysthemerediscoveryofanewformofaknownsubstancewhichdoesnotresultintheenhancementoftheknownefcacyofthatsubstanceorthemerediscoveryofanynewpropertyornewuseforaknownsubstanceorofthemereuseofaknownprocessma-chineorapparatusunlesssuchknownprocessresultsinanewproductoremploysatleastonenewreactant.USindustryespeciallythepharmaceu-ticalsectorhavebeenupinarmsabouttheIndianIPregime.TheyhavemadenumerousrepresentationstotheUSCongressurgingtheUSgovernmenttotakestepstoprotecttheirrightsanddemandedthat8INDIAGLOBALBUSINESSNovember2014 ACTIONIndiabeplacedinthePriorityForeignCountry.AsaresulttheUSTRhaslaunchedanoutofcyclereviewOCRtoexaminewhetherprogresshasbeenmadeintheengagementonIPRbetweentheUSandIndiangovernments.TheUSTRhasgoneonrecordsayingitunderstandsthatIndiaisembarkingondevelopingnewIPpolicy.TheIndiangovernmenthasmadeitclearthateveninthenewIPregimethereislittlechanceofNewDelhidilutingsection3DoftheIndianPatentsAct.ThisisinlinewithPrimeMinisterModisstatementthatIndianeedsaffordablemedicinesforitspopulation.HoweverduringhisvisitthePrimeMinisterinhisdiscussionswithUSPresidentObamahadagreedtosetupabilateralhigh-levelIntellectualPropertyWorkingGrouptodiscussoutstandingissuesbetweenthetwocountries.Obamahadagreedtosetupabilateralhigh-levelIntellectualPropertyWorkingGroupTheIndiangovernmenthasmadeitclearthateveninthenewIPregimethereislittlechanceofNewDelhidilutingsection3DoftheIndianPatentsAct.9www.indiaincorporated.comNovember2014 INDIAGLOBALBUSINESS10November2014REACTIONIndiasministerNirmalaSitharamanhasdismissedtheUSTRcontroversialdecisiontoinitiateareviewofIndiasIntellectualPropertyRightsIPRMinistertoUSIndiastandsitsIPRgroundIndiasministerofstateforcommerceandindustryNirmalaSitharamanhasdismissedtheUSTradeRepresen-tativesUSTRcontroversialdecisiontoinitiateareviewofIndiasIntellectualPropertyRightsIPRasapedagogicexercise.Duringatwo-dayvisittotheUKthisweektheministerexpressedIndiasrmstanceontheissueIwouldonlylookatitasanexercisetounderstandpoliciesofothercountries.Indiaanditscourtsareconsciousofourintellectualprop-ertyrightsandweholdontodefendingeverythingthatisduetousandweshallworkandengagewiththeUnitedStatestoexplainourpositiontothembutclear-lywestandourground.TheIndiangovernmentclearlyunder-standsitsintellectualpropertyrights.ThelawsthatprevailinIndiaareverybouyantvibrantup-to-dateandrobustandthathasbeenestablishedbythevariousjudgementsthathavecomefromIndiancourts.TheUSTRhadinitiatedanout-of-cyclereviewofits301paperSection301oftheUSTradeActof1974whichhasIndiaonaPriorityWatchListonissuesconcerningprotectionofUSIntellectualPropertyRightsIPRinIndia.SitharamanwhoisalsoministerofstatefornanceandcorporateaffairsstressedthatthegovernmenthopestoannounceanewmoredenitiveIPRpolicyframeworkbyearlynextyear.ShewasalsocategoricalontheNaren-draModiledgovernmentsviewonnotallowinge-commercetobecomean www.indiaincorporated.com11November2014REACTIONavenueforforeigndirectinvestmentFDIinmulti-brandretail.SheexplainedTherehasbeenalotoftalkone-commerce.Weareconsciousthate-commerceshouldnotbecomeabackdoorentryformulti-brandretail.ButatthesametimeIamnotpronouncinganypolicyone-commerce.TheseniorBJPleaderwasintheUKonatwo-dayvisittoholddiscussionswithinvestorsmembersoftheConfederationofBritishIndustryCBIandUKbusi-nesssecretaryVinceCablearoundthegovernmentsMakeinIndiacampaign.SheadmittedthatvarioussectionsoftheUKindustryandgovernmenthadmadereferencestotheretrospectivetaxissue.Ourpositionhasbeenveryclearandwereinforcetheviewthatwewillnotresorttoretrospectivetaxation.Atthesametimethisgovernmentisworkingonsimplifyingtheentiretaxationframe-workcompletelyandthiswillbeanim-portanttoolwithregardtoeaseofdoingbusinessinIndiashesaid.TheministeralsoclarifedthattheballwasnowinthecourtoftheEuropeanUnionEUwithregardstoafreetradeagreementFTAwithIndiaonwhichithadexpressedalotenthusiasmandeagerness.SincethegovernmenttookoverwehavebeenreviewingtheFTAsandSEZsandourassessmentwasthattheEuro-peancommunitywasfarmorefocussedonthetrans-AtlantictreatyandmaybetheywerenotaskeenonabilateralwithIndia...ButevenduringthisvisitithasbeenstressedthattheUKandEUwilllookatanFTAwithIndiasoitisnowfortheEUtocomebacktousandsaytheywouldliketoproceedonthisshesaid. INDIAGLOBALBUSINESS12November2014OPINIONManojLadwa-PublisherCEOIndiaInc.SmallstepspavethewayforIndiaWhenThatsthequestiononeverybodyslips.WhenwillPrimeMinisterNarendraModiunveilhisbigpicturefortransformingtheIndianeconomyTheshortanswertothatislookatthesmallinitiativesthathisgovernmenthasannouncedsincecomingtopowerjointhedotsandtheoutlinesofthebigpicturewillbegintoemerge.InhisrstfourmonthsinofcetheModigovernmenthasannouncedseveralsmallmeasurestweakingtheexistingsystemtomakeitmoreresponsivetotheneedsofadynamicandgrowingeconomy.HehastakenseveralstepstoimprovetheeaseofdoingbusinessinIndia.Amongthemaremeasurestoendoratleastsubstantiallyreducetheinu-enceofIndiasnotoriousInspectorRaj.Hehasalsofasttrackedenvironmentclearancestosmoothenthewrinklescausedbytheministrythathascausedthemaximumdamagetotheeconomyoverthelastveyears.Hehasalsointroducedself-certicationforanumberofissuesbothforindividualsandcom-paniesthatearlierneededthesignatureofagazettedofcerthusremovingamajorirritant.Thenhisgovernmenthasinitiatedamajorexercisetoscrapobsoleteorobstructionistlawsthatclutterupthestatutebooksandcontributetotheredtapeandbureaucraticdelaysthatdriveinvestorsaway.HisschemetobuildmillionsoftoiletsacrossbothurbanandruralIndiaisactuallyadisguisedstimuluspackage.Overthenextveyearsthegovernmentandtheprivatesectorwillspendabout23billiononthisschemethussettinginmotionaconstructionboomthatwillreverberateacrossscoresofindustriesthatwillsupplybrickscementsteelsanitarywareplumbingandotherrawmaterials.ThenhisMakeinIndiainitiativecanpotentiallytransformtheIndianmanufacturingindustrythewaytheGreenRevolutionchangedthefaceofIndianagricultureandOperationFloodwhichtransformedIndiafromamilkInhisrstfourmonthsinofcetheModigovernmenthasannouncedseveralsmallmeasurestweakingtheexistingsystemtomakeitmoreresponsivetotheneedsofadynamicandgrowingeconomy. www.indiaincorporated.com13November2014decientnationtoacountrythatwasselfsufcientinthiscriticalfoodproduct.Butindustryiswaitingforthegovern-menttowalkthetalk.Thepolicyparaly-sisofthelastfewyearsandtheresultingslowdownhasresultedinabout250billionworthofprojectsincriticalsectorssuchaspowerminingironsteelandcementamongmanyothersgettingstuckatvariousstagesofimplementa-tion.Industryisunlikelytocomeforwardwithfreshinvestmentstillthismassivein-vestmentgetsofftheground.Andthatiswhatthegovernmentseffortsatremov-ingvariousroadblockswilldeliverresults.Theywillnotmakeheadlines.Butawayfromthepubliceyetheseso-calledlittlemeasureswillgreasethestalledwheelsofIndianindustry.Thereareearlyindicationsthatthismightalreadybehappening.GDPgrowthintherstquarterofthecurrentnancialyearhasalreadypickedupto5.7percentandtheconsensusisthatthistrendwillsustain.Butitmaytakeanotheryeartogetallthestalledprojectsbackontrack.Theresultingincreaseingrowthratesandthereturnofthefeelgoodfactorwillgivethegovernmentthepoliticalspacetoembarkonmoreambitiousbigpicturereforms.Butbeforethatthegovernmentwillhavetoxthesystemandputinplacerobustmechanismsthatcansustainfastgrowthinthefuture.JapanandChinahavecommittedlargeinvestmentsinthiscountry.TheUSmayalsofollowsuit.Theproofofthepuddingisintheeating.Ifthegovernmentcansustaintheup-wardcurveintheGDPgrowthratethepuddingwilltasteparticularlysweet.AnalystsandexpertsareoptimisticaboutIndiaseconomicfuture.Ifasex-pectedIndiangrowthratesreturntothe7percent-plustrajectoryintwoyearsthebigpicturewhichmaybenothingmorethanthesumofthemanysmallmeasuresbeinginitiatedbythegovern-mentwillbecomeevidentforalltosee.OPINION INDIAGLOBALBUSINESS14November2014IndianexternalaffairsministerSushmaSwarajurgedtheIndianDiasporatoactivelyparticipateinIndiasgrowthstoryBritaincelebratesCometoIndiaspiritTremendousopportunitiesandexcitingprojectsacrossvarioussectorswereamongtheattrac-tionsofferedupaspartofalatestCometoIndiadrive.IndianexternalaffairsministerSushmaSwarajaddedanemotionalangletoPrimeMinisterNarendraModisMakeinIndiacallassheurgedtheIndianDiasporatoactivelyparticipateinIndiasgrowthstoryattherecently-concludedRegionalPravasiBharatiyaDivasinLondon.SwarajsaidIhavecomeherenotjusttoaddressyoubuttoinviteyounowisthetimetocometoIndia.Thereareimmenseopportunitieswaitingthereforyou.IpromiseIwilllistentoallyourproblemsandsolveeachoneofthem.AswerejoiceinthesuccessoftheIndianDiasporawealsoinviteyoutoactivelyparticipateinIndiasgrowthstory.Ourgovernmentisfullycommittedtogoodgovernanceclearpoliciesef-ciencyaccountabilityspeedydecisionmakingtransparencyandfavourablebusinessenvironment.TherearetremendousopportunitiestodayforyoutojoinusespeciallyintheeldsofmanufacturinginfrastructuredevelopmenteducationhealthskillsdevelopmentscienceandtechnologyresearchandinnovationknowledgeeconomyandyouthdevelopmentaspartofourefforttorealiseIndiasfullpotential.TheministerwhoisalsoinchargeofoverseasIndianaffairsstressedthatthenewly-electedIndiangovernmentwasSPECIALREPORT www.indiaincorporated.com15November2014mindfulofcertainconcernsinthecom-munityandtheirdesireforgreatereaseforsustaininglinkswithIndia.SheaddedWedeeplyvaluetheroleandcontributionoftheIndiancommu-nitiesabroad-inbuildingbridgesoffriendshipandgoodwillbetweenIndiaandtheiradoptedcountries.TheIndianDiasporatrulyrepresentstheunityofIndiawithallitsdiversityandpromotesunderstandingofIndianvaluesandculture.Weareproudofthegreataccomplish-mentsoftheIndiancommunityintheUKandotherEuropeancountriesinallareasofhumanendeavourandthegreatreputationtheyhaveearnedasindustriouslawabidingandpeacelovingcitizenswhileretainingtheirIndianroots.TheministeralsoheldbilateraltalkswithhercounterpartinBritainforeignsecre-taryPhilipHammondaswellasDeputyPrimeMinisterNickCleggoverissuesaffectingtheIndia-UKrelationshipduringherbriefvisittotheUK.WedeeplyvaluetheroleandcontributionoftheIndiancommunitiesabroadSushmaSwarajIndianExternalAffairsMinisterSPECIALREPORT INDIAGLOBALBUSINESS16November2014NEWSINBRIEFLupineyesUSmarketSBItoexpandUKoperationsIndiandrugmajorLupinisonthelookoutforacquisitionopportunitiesintheUSmarketespeciallyintheinhalersandinjectablessegment.TheMumbai-basedpharmaceuticalmajorfeelsacquisitionsintheUSwouldhelpcreateameaningfulspecialitybusinessbolsterexistingbrandsbusinessandacquiretechnologicalcapabilities.Thecompanyisopentobuyingbrandsortechnologycompaniesininhalationcom-plexinjectablesandskindiseasessegmentsaccordingtoitsCFOS.Ramesh.Lupinstargetistogrowataround25percentintheworldslargestdrugmarket.AsperIMSHealthdatathecompanycurrentlyhascloseto5.4percentmarketshareoftheoverallUSgenericsmarket.AsofJune2014thecompanyscumulativeabbreviatednewdrugapplicationANDAflingwiththeUSFoodandDrugAdministrationUSFDAstoodat200with103approvals.OneofIndiasbiggestbanksStateBankofIndiaisdeterminedtocarryonretailbankingoperationsintheUKdespitearecentcrack-downbytheBankofEngland.SBIsaiditispreparedtosetaside100millioninring-fencedcapitalandrestructureitsoperationsifthatprovesnecessarytokeepoperatingonthehighstreets.ThePrudentialRegulationAuthorityPRAoftheBankofEnglandhadrecentlyissuedanultimatumtotheBritishoperationsofforeign-ownedbankstakingdepositsofmorethan100milliontorestructurewiththeirownring-fencedcapitalorendretailopera-tions.SBIwhichhasover900millionofdepositsinBritainisamongthoseaffected.BankofBarodawhichhas10branchesinBritainandBankofIndiawithsevencouldalsobehit.AconsultationlaunchedinFebruarybythePRAresponsibleforsupervisingindividualbanksconcludedinSeptember. www.indiaincorporated.com17November2014SECTORFOCUS-InfrastructureKumarMangalamBirlathe47-year-oldbillionairechairmanoftheAdityaBirlaGroupisbelievedtobeintheracetobuysomeoftheassetsthatEuropeancementgiantsLafargeandHolcimwillhavetoselltosatisfyanti-trustregulatorsintherun-uptotheirproposed40billionmerger.BirlasUltratechCementswhichisIndiassec-ond-largestcementcompanywithanannualcapacityof58milliontonnesisputtingthefnaltouchesonabidfortheLafargeHol-cimassetsinLatinAmerica.Aspokespersonforthe40billionAdityaBirlaGroupwhichhassetitselfatargetofachiev-ing65billioninrevenuesbytheendofnextyeardeclinedtocom-mentsayingthegroupdoesnotreacttomarketspeculation.Birlaiscurrentlyabroadwhereheisgiv-ingthefnaltouchestothebuyoutplan.Theproposedbidwillbeintheregionof6billionto8billionandifsuccessfulwillmarkBirlasmaidenentryintotheLatinAmericancementmarket.Itwillalsobethelargestoverseasacquisi-tionbyanIndiancompanysinceIndiancompanieshaveachequeredrecordofacquiringandassimilatinglargeforeignbuys.TheTataGroupwhichledthewaywithhighprofleacquisitionssuchasTetleyCorusandJaguarLandRoverJLRallintheUKhasstrug-gledtoturnCorusnowTataSteelEuropearound.Howeveritspur-chasesofTetleyandJLRhavebeentextbooksuccessstories.KumarBirlatoohadboughtloss-makingUSaluminiumcompa-nyNovelisin2007.Despitetheglobalslowdownhehasturnedthecompanyaroundwhichnowcontributeshand-somelytohismainaluminiumcompanyHindalcosprofts.KumarBirlaeyescementassetsinSouthAmericaBirlasUltratechCementsisputtingthefnaltouchesonabidfortheLafargeHolcimassetsinLatinAmerica. INDIAGLOBALBUSINESS18November2014HerotodoublesalesgloballyWelspuneyespipeplantinCanadaIndiasleadingtwo-wheelermanufacturerHeroMotoCorpisplanningtomakebiginvestmentsinabidtoincreaseitscapacityinIndiaandabroad.Herohasannouncedinvestmentsofaround816millioninvemanufacturingfacili-tiesacrossIndiaColombiaandBangladeshandistargetingdoublingitssalesto12millionunitsby2020.ApartfromIndiathecompanyislookingatexpandinginmarketslikeSouthAmericaandAfrica.ItisalsoeyeinganentryintodevelopedmarketsofWesternEuropeby2015andtheUSby2016.Herohasinvested163.27millioninitsmanufacturingfacilityandglobalpartscentreinNeemranaRajasthan.TheworkonitsBangladeshplantwillbeginsoonandbyNovemberwillstartworkontheHalolplantinGujaratwhichwillbefollowedbyAndhraPradesh.WelspunCorpamongtheworldslargestmanufacturersoflargediameterpipesisplanningtosetupamanufacturingfacilityinCanada.TheIndiancompanyplanstoinvest100millionforsettingupaplantinBritishColumbiaoneofthelargestandrichestprovincesofCanada.Thepipeplantwillbesupportedbycoatinganddoublejointingfacilityprimarilytargetingoilgastranspor-tationintheCanadianregion.BritishColumbiapremierChristyClarkpaidavisittotheWelspunheadquartersincentralMumbairecentlyindicatingapossibilityofanofcialannouncementsoon.CanadaislookingtobuildalargepipelinenetworkfromitsoilgasbasinstotheeasternandwesternportstoserviceAsianandEuropeanenergyneeds.NEWSINBRIEF www.indiaincorporated.com19November2014TeMakeinIndiainvestmentIndiaInc.InterviewDrArbindPrasadisthemanagingdirectorofInvestIndiaandDi-rector-GeneraloftheFederationofIndianChambersofCommerceandIndustryFICCIandthemanchargedwithmakingtheroadtoMakeinIndiasmooth.IndiaInc.caughtupwithDrPrasadtodigintothemissionstatementofInvestIndiatheroadblocksinthepathofattractingforeigndirectinvestmentFDIintothecountryandwhatstepsarebeingtakentomakeIndiaaprimeFDIdestination.QPleasegiveusanoverviewofInvestIndiaanditsremit.InvestIndiaisanot-for-protjointven-turebetweentheGovernmentofIndiaDepartmentOfIndustrialPolicyandPromotionDIPPMinistryofCommerceandIndustrystategovernmentsandFICCI.Operationalisedinearly2010thecom-panyhasbeensetupasthededicatedinvestmentpromotionagencyIPAforattractinginvestmentsintothecountryinastructuredfocusedandcompre-hensivemanner.Itistherstpointofreferenceforbothdomesticandforeigninvestorsandinvestmentpromotionandfacilitationconstitutethecoremandateofthecompany.Itsservicesincludeprovidingqualityinputandsupportservicesthroughgran-ulatedsector-specicandstate-specicINTERVIEW INDIAGLOBALBUSINESS20November2014informationassistancewithlocationidenticationexpeditionofregulatoryapprovalsfacilitationofmeetingswithrelevantgovernmentofcialsorganizationofinvestmentroadshowsandroundtablesandaftercareservicesthatincludeinitiatingremedialactiononproblemsfacedbyinvestorsbyinvolvingthegovernmentdepartmentconcerned.QWhataresomeofthekeygovern-mentpoliciesthatmakeIndiaanattractiveFDIdestinationTheGovernmentofIndiasGoIstatedvisionistomakeIndiathemanufacturinghuboftheworld.TherecentlaunchoftheMakeinIndiacam-paignhasarenewedfocusonresolvingon-the-groundissuesthatareholdingupinvestmentsinthemanufacturingsectorinIndia.Thereforeakeycomponentofthiscampaignistheunprecedentedattentionandmonitoringofinvestmentinterestrightfromthequerystagetotheimplementationstage.TheMakeinIndiacampaignisofcoursesupportedbyanoverallliberalFDIpolicythathasbeenpursuedbyGoIfromtheearly90s.InadditionseveralotherkeypoliciespromulgatedbyGoItoattractFDIincludetheNationalManufacturingPolicyNMPwhichaimstoincreasetheshareofmanufacturinginIndiasGDPfrom16percentto25percentby2022SpecialEconomicZoneSEZPolicyandsector-specicpoliciessuchasMSIPSfortheelectron-icssectorandNationalMissiononFoodProcessingNMFPforprovidingalliptothefoodprocessingindustry.Similarlystategovernmentshavealsoincentiv-isedinvestmentsinselectsectorsbasedontheirregionaleconomicdevelopmentrequirements.AlongsidetherearealsoconcertedeffortstoimproveoverallinfrastructureacrossthecountryakeycomponentofinfrastructuredevelopmentisthebuildingofindustrialcorridorsthatwillINTERVIEW www.indiaincorporated.com21November2014encompassvariedconceptssuchassmartcitiessustainabledevelopmentandclusterandskilldevelopmentaswellasensuringworld-classinfrastruc-turefacilitiesinpowerandtransportationformanufacturingunits.WhileworkontheDelhi-MumbaiIndustrialCorridorDMIChascommencedthesettingupoftheBengaluru-MumbaiEconomicCorridorBMECChennai-BengaluruIndustrialCorridorCBICandtheAm-ritsar-Delhi-KolkataIndustrialCorridorADKIChasalsobeenannouncedbythegovernment.Alloftheseareexpect-edtoboostinfrastructureandthereforemanufacturinginthecountry.QWhataresomeinstanceswhereInvestIndiahashelpedforeigncom-paniesentertheIndianmarketAJapanesecompanymanufacturingelectricvehiclesrequiredassistanceinestablishingoperationsinIndiasupportwasprovidedinfollowingwaysa.Providinginformationonstategovernmentsb.Providinginputsandguidanceonstrategiestomarkettheproductc.Connectwithindustryassociationsd.MeetingsarrangedwithCentralrailwaysUrbandevelopmentdepartmentsofstategovernmentsTransportdepartmentsofstategovernmentsCentralgovernmentministriesCustomsAgenciesoatingtendersfortheirproductsAUScompanyanditsIndianpartnerweresettingupaunitforthemanufac-tureoftechnologically-advancedcreditcardreadingmachinessupportwasprovidedinthefollowingwaysa.Guidanceonidealformofbusinessstructureb.ProvidinginformationontaxesrepatriationrulesFDIregulationsetc.c.Claricationsonrouteofinvestmentsothatsharescouldbeissuedd.ConnectwithHRagenciesforhiringworkforcewithrelevantskillsAUScompanyintheworkforcemanagementsolutionsareawaslookingatsettingupoperationseitherinMa-harashtraorTamilNadusupportwasprovidedinthefollowingwaysa.Providedinformationonbothstatesb.ArrangedmeetingswithstateagencyinChennaiandempanelledconsultantinPunefordetailedinformationoninfra-structureavailableandtaxesapplicableQPleasenamesomeopportunitiesandchallengesforforeigncompa-nieslookingtoinvestinIndia.Indiaisamarketthatrequirescapitalandtechnologytransferacrossthespectrum.SowhileopportunitiesexistacrosssectorsthegovernmenthasaspartoftheMakeinIndiacampaignshortlisted25keysectorsforinitialINTERVIEW INDIAGLOBALBUSINESS22November2014focus.Thesesectorsarelistedonwww.makeinindia.com.Thechallengesforforeigncompanieshavebeenenunciatedatseveralforumsandcanbroadlybecategorisedasinfra-structurered-tapismpolicytaxandlabour-relatedissues.Howeverthatbe-ingthecaseitmustalsobepointedoutthatstepsarebeingtakentoaddresseachoftheaboveandasteadyprog-ressisexpectedsoon.Asanexamplesomestategovern-mentssuchasRajasthanhavealreadytakenactionwithregardtomakingtheirlabourlawsmorebusinessfriendly.SimilarlyeffortsareunderwaytorollouttheGoodsandServicesTaxGSTattheearliesttoaddresssomeofthetaxationworriesofinvestorsandtocutdownonred-tapismbylaunchingthee-BizMissionModeProjectthataimstodigitiseandmakeavailableonlinealllicensesandclearancesneededtostartabusinessunitinIndia.QWhatisyouradviceforcompaniesconsideringIndiaasapotentialinvestmentdestinationCompanieslookingtoinvestinIndiashouldunderstandthemarketintermsofsectoropportunitieswagecostarbi-tragedistributionchannelsfornishedproductsavailabilityofrawmaterialetcalongwithaclearandpreciseunder-standingoftheFDIpolicygoverningthesectorthattheyarelookingtoinvestin.FurtheritisadvisabletounderstandtheformsofcompanyincorporationinIndiaaswellasthebroadtaxstructureandannualreportingrequirements.Finallycompaniesshouldactivelyliaisonwithstateindustrialdevelopmentcorpora-tionsforallocationoflandandcompli-ancesassociatedwithlicensesandclearances.INTERVIEWInvestIndiaisthecountrysofcialagencydedicatedtoinvestmentpromotionandfacilitation.SetupasajointventurebetweenFICCI51equityDIPP35equityheldbytheDepartmentofIndustrialpolicyandPromotionMinistryofCommerceIndustryandStateGovernmentsofIndia0.5eachitsmandateistobecometherstreferencepointfortheglobalinvestmentcommunity.Itprovidesgranulatedsector-specicandstate-specicinformationtoafor-eigninvestorassistsinexpeditingregulatoryapprovalsandoffershand-holdingservices.ItsmandatealsoincludesassistingIndianinvestorsmakeinformedchoicesaboutinvestmentopportunitiesoverseas.ABOUTINVESTINDIA www.indiaincorporated.com23November2014TataJLRtoopenUSfactoryAshokLeylandbagsSriLankanorderTataMotorsownedJaguarLandRoverJLRisintalkstosetupamanufacturingunitintheUSasitplanstotaptheworldssecond-big-gestcarmarket.ThecompanyisintalkswithanumberofsouthernstatesofAmericaincludingSouthCarolinaaboutbuildingaplant.ItwasalsoexploringthepossibilityofopeningafactoryinMexico.AtpresentJLRimportsintotheUSwhichresultsinhighimporttariffsandisconsider-ingabasetheretosmoothentheimpactofuctuatingcurrencyrates.LastyearJLRsoldabout55000carsinNorthAmericawhichmakesupaneighthofitsglobalsalesof425000.Thecompanyplanstobuildaplantwhichcaneventuallymanufacture200000carsayear.TataMotorshadacquiredthestrugglingJLRbrandin2008andisallsettoopenfacto-ryinChinawiththecapacitytomanufacture130000vehiclesayear.IndiancommercialautomobilemanufacturerAshokLeylandhasbaggedanorderfromprivatebusoperatorsinSriLankatosupply630buses.TheHindujagroupcompanythroughitsjointventureinSriLankaLankaAshokLeylandLALhasreceivedanorderworth17millionfromprivatebusoperators.ThedealisbackedbytheSriLankangovernment.Thecompanyhadrecentlyreceivedanorderof2200busesfromtheSriLankangov-ernment.ThecurrentordershowsthecountryscondenceinthecapabilityofAshokLeylandtoofferthemostappropriateproductsandtransportsolutions.LALwasformedin1982andstarteditsoperationsin1983asaJVbetweenLankaLeylandLtdawhollyownedcompanyofGovernmentofSriLankaandAshokLey-landLtdIndia.Ithassofarsupplied45000busestotheLankanmarket.NEWSINBRIEF INDIAGLOBALBUSINESS24November2014TheagreementwastoenableIndiatoleverageitscompetitiveedgeinareasofnanceeducationhealthITtelecommunicationsandtransportIstheASEANFTAtoIndiasadvantageIndiahasformallysignedafreetradeagreementFTAforservicesandinvest-mentswiththeAssociationofSoutheastAsianNationsASEAN.Thecommerceministryhadissuedanofcialstatementlastmonthsayingthepactwillopenupopportunitiesofmove-mentofbothmanpowerandinvestmentsfromeithersidebetweenIndiaandASEAN.TheagreementwastoenableIndiatoleverageitscompetitiveedgeinareasofnanceeducationhealthITtele-communicationsandtransport.AlthoughIndiahassignedthedealanalcallisexpectedtobetakenduringtheIndia-ASEANsummitscheduledforNovemberinMyanmartobeattendedbyPrimeMinisterNarendraModiandotherheadsofgovernment.OncetheFTAinservicesandinvest-mentgetsratiedtheentiresetofpactswillbecomeaComprehensiveEconomicPartnershipAgreement.ASEANSmembersincludeSingaporeMalaysiaThailandMyanmarVietnamIndonesiathePhilippinesBruneiCam-bodiaandLaos.Nineofthe10countrieshavesignedthedealexceptthePhilippines.Fortheagreementtobecomeoperation-alall10mustsignitandtheirrespectivelegislaturesmustratifyit.TheagreementongoodshasnotbeenratiedbyallASEANmembers.UnderthegoodsFTAASEANcountriesandIndiahaddecidedtoliftimporttariffsonSPECIALREPORT www.indiaincorporated.com25November2014SPECIALREPORTalittlemorethan80percentoftradedproductsby2016.TheFTAcollectivelycoversamarketofnearly1.8billionpeopleandproposestograduallyslashtariffsforover4000productlines.InclusionofmovementofnaturalpersonsorMode4inthepactpro-videsacommerciallymeaningfulmarketacrossASEANforprofessionalsinclud-ingthosefromtheITITeSsector.ThereissomespeculationoverwhetherIndiahasgotthebestdealinthispartic-ularaspect.TheNovembersummitwillmakethepicturecleareronthiscrucialregionalFTA.ASEANSmembersincludeSingaporeMalaysiaThailandMyanmarVietnamIndonesiathePhilippinesBruneiCambodiaandLaos.Nineofthe10countrieshavesignedthedealexceptthePhilippines. INDIAGLOBALBUSINESS26November2014SECTORFOCUS-ITUKplansintra-companyvisareviewNickCleggassuredIndianexternalaffairsministerSushmaSwarajofamorepragmaticvisaregimeduringtheirveryproductivemeeting.BritainsDeputyPrimeMinisterNickCleggassuredIndianexternalaffairsministerSushmaSwarajofamorepragmaticvisaregimeduringtheirveryproductivemeeting.TheseniorLiberalDemocratleaderindicatedareviewofrulesaroundIn-tra-CompanyTransferICTvisasusedlargelybyIndianITprofessionals.CleggsaidWeconstantlyneedtoaskourselveswhetherwehavegotthevisarulesrightandwhetherwecanimprovethemfurther.Ithinksomeoftherulesaroundinter-com-panytransfervisaswhichaffectsforinstanceIndianITspecialistsneedtobemademoresubtle.Thereareareaswhereweneedtobesensibleandpragmaticandalsoneedtospelloutloudandclearthatsomeoftherhetoricaroundthedebateonimmigra-tionintheUKgivingrisetothefearthatwearesomehowclosingourdoortoIndianstudentsinvestorsandhhvvcom-paniesthatisemphaticallynottrue.Thetwoleaderscoveredacross-sectionofissuesduringtheirbilateraltalkslastweekincludingthethreatsofterrorismandworkingtogetherinthecomingmonthsintherunuptotheParissummitonclimatechange.IwasverystruckwhenIwasinIndiabyPrimeMinisterModispersonalcommit-menttosustainabilityandgreendevel-opment.IurgetheIndiangovernmenttoassumeanaturalleadershiproleatthosecrucialtalksCleggsaid.TheissueofIndiasstanceintheWorldTradeAgreementtalksalsofeaturedheavilywiththeUKleaderexpressingcondenceatsomemovementontheissue.Weattachgreatimportancetond-inganamicableandsensiblesolutiontoIndiassupportandraticationoftheInternationalTradeFacilitationAgreementwhichiscrucialforthelong-termbenetfortheworldtradesystemandIthinkwearemak-ingprogressinclarifyingsomeofthecrossedwiresandlegitimateconcernsoftheIndiangovernmenthesaid. IndianAngelNetworkinvestsinUKfrmIndianAngelNetworkIANhasmadeitsrstmajorinvestmentinaLondon-basedmobileapplicationrm.IndianAngelNetworkIANhasmadeitsrstmajorinvestmentinaLon-don-basedmobileapplicationrm.ThermwhichlauncheditsoperationsintheUKearlierthisyearhasinvestedanundisclosedamountinLowdownappLimitedmarkingthermsrstinvest-mentintheUKwhereitlaunchedopera-tionsthisFebruary.Theapphelpsprofessionalsprepareformeetingsandaimstosaveaboutanhourofpreparationtimebyfeedinguserswiththerelevantinformationsuchaswhotheyaregoingtomeettheirbackgroundthemeetingsvenueandupdatesonemailexchanges.Itbringstogetherreal-timedatafromavarietyofsocialnetworkingwebsitesanddeliversittousersthroughasingu-larview.SaurabhSrivastavaCo-FounderofIndianAngelNetworksaidTheUKisnotonlyahotbedoftechnologybutalsoINOTHERNEWSprovidesanexcellentgatewaytothecontinent.IANlookstothereforepartnerwithUKentrepreneursandprovidethemwithinitialfundingbutmoreimportant-lywithmentoringandmarketaccessacrosstheglobe.LowdownappChiefExecutiveDavidSe-nioraddedItaddressesamarketneedandweretherstonesontheground.TheappiscurrentlyavailableontheiOSplatformandwillsoonbelaunchedinAndroidversionaswell.Theappcanbeusedfreeofcostfor30daysafterwhichthedevelopercharges5permonth.IANisIndiasoldestandlargestangelinvestornetworkhaspreviouslymadeinvestmentsincountriessuchasSriLankaCanadaFranceandHongKong.InSriLankaithasinvestedmorethan2.5millionin10startups.Thenancialdetailsofitslatestinvest-mentintheUKhavenotbeenreleased. INDIAPOLICYEXCHANGE INDIAPOLICYTheIndiaPolicyExchangeiswhereleadingpublicaffairsandpolicyexpertsprovideincisivecommentaryandinsightsintothethinkingandimpactofIndiangov-ernmentpolicy.Ourcontributorsareavailabletoprovidespecifcadviceuponrequest.Pleasecontactexpertsindiaincorporated.comforfurtherdetailsofthisservice. INDIAGLOBALBUSINESS30November2014ANALYSISRedtaperoll-backredcarpetroll-outbeginsOverthelastweektheNarendraModigovernmenthasannouncedorinitiatedaslewofmajorreformmeasuresthatcanchangethewaybusi-nessisconductedinIndiaandalsothewayinvestorsbothIndianandforeignperceivethecountry.EarlylastweektheUnionCabinetclearedanordinancetoauctioncoalminesfollowingtheSupremeCourtordercancellingtheallo-cationof214coalmineallocations.ThisisexpectedtoclearthewayforprivatepowersteelandcementcompaniestobidforcoalmineseasethesupplyofbottleneckscausedbytheSupremeCourtorderandleadtoatransparentandhonestnaturalresourceallocationpolicy.ImportantlytheordinancewhichhasbeensignedintolawbyPresidentPranabMukherjeehasanenablingprovisiontopermitprivatecommercialOverthelastweektheNarendraModigovernmenthasannouncedorinitiatedaslewofmajorreformmeasuresthatcanchangethewaybusinessisconductedinIndiacoalmining.UnderIndianlawprivatecompaniescanminecoalonlyforcap-tiveconsumption.Saletothirdpartiesisexpresslydisallowed.Thisisamassivestep.Ifthegovern-mentfollowsthroughthisenablingprovisionandactuallyallowstheprivatesectortobreakthemonopolyofthepub-licsectorCoalIndiaLtditcouldchangethedynamicsoftheenergysectorinthiscountry.TheimmediateimpactIndiascurrentaccountdecitwouldfallbyanestimated30billiontherupeewouldasaresultappreciateslightly.Thentheincreasedavailabilityofcoalwouldpro-videalliptothethermalpowersectorwhichaccountsfor70percentofIndiaspowerproduction.AndnallyitwouldmarkadecisivebreakfromtheCongressssocialistlegacythathasdeliveredamixedbagof www.indiaincorporated.com31November2014ANALYSISbenets.Thetradeunionshavethreat-enedastrikeifthegovernmentdoesdilutetheprovisionsoftheCoalNation-alizationActthatdisallowscommercialcoalminingbytheprivatesector.CanModidoaMargaretThatcherGivenhisreputationfordecisiveactionthereisreasontohopethathecan.ThenthegovernmenthasbegunworkondeliveringonModispromisetogreetinvestorswitharedcarpetnotredtape.CurrentlyIndiaranks134thamong182countriesontheWorldBanksEaseofDoingBusinessIndex.IndiaslargenorthernneighbourChinaranks96th.EvenPakistan110thandBangladesh130thrankhigherthanIndia.WhileannouncingtheMakeinIndiainitiativeModihadsetatargetofleap-froggingintothetop50ranksbyeasingproceduresandcuttingoutredtape.TheDepartmentofIndustrialPolicyandPromotionDIPPhasbeenmandatedtocutthetimetakentoregisterabusinessfrom27daysatpresenttoonlyoneday.Taxpaymentnormswillbesimpliedandcompanieswillneedonlyasingleregistrationforlabourlaws.Theinspec-torrajwillbecuttosize.Noinspectionswillbeallowedforlowriskbusinessesandcomputer-basedselectionproce-duresputinplaceforhighriskones.TheDIPPhaswrittentostategovern-mentstoaligntheirprocedurestothenewcentralsystemsothatinvestorsfacethesamesetofnormsthroughoutthecountry.Ithasalsosetstricttime-linesofthreetosixmonthsfornalisingnorms.ThegoalleapfrogtherankingsintimefortheWorldBanks2016EaseofDoingBusinessindex.Thisinitiativecanprovideamassiveboosttoinvestorsentiment.RightnowbureaucracyredtapeandcorruptioncontributemassivelytoIndiasimageasaninvestment-unfriendlydestina-tion.Changingtheunderlyinglawsthatencouragethisobstructionismwillshowtheworldthatthegovernmentisseriousaboutwalkingthetalk.AndnallytheCabinetalsodecontrolleddieselpricingallowingittouctuateinlinewithitsinternationalpriceandclearedanewgaspricingformularaisingthepriceofnaturalgasfrom4.2permmbtuto5.61permmbtu.Thisislowerthanthe8.4permmbtuthattheRangarajanCommitteeappointedbythepreviousManmohanSinghgovern-menthadrecommendedbuta30percentimprovementoverthecurrentprice.Thiscanprovidealeguptodomesticexplorationefforts.Furtherthegovernmenthaspromisedthatthesearejusttherststepsandthatmanymorereformmeasureswillfollow. INDIAGLOBALBUSINESS32November2014INDIAPOLICYIndialaunchesbigbanglabourreformsIndianPMNarendraModiannouncedhisfrstbigbangpolicymeasuretosimplifyIndiascumbersomearchaicandobstructionistlabourlaws.IndianPrimeMinisterNarendraModionannouncedhisfrstbigbangpolicymeasuretosimplifyIndiascumbersomearchaicandobstructionistlabourlawsreducingpaperworkdoingawaywithanyscopeforarbitrarinessinthecountrysnotoriousfactoryinspectionsystemwhileatthesametimemakingthemmoreemployee-friendly.WehaveheardaboutInspectorRajsincechildhoodandwethoughtitwasforpolicemenonlytillwerealiseditsmeaningwhichisalotmorethanthatheannouncedonThursday.TisiswhatIcallmaximumgovernanceminimumgovernmentNarendraModiPrimeMinisterofIndia www.indiaincorporated.com33November2014INDIAPOLICYInordertomakefactoryinspectionproceduresmoretransparentandlessdraconianthenewrulesprescribeacomputerisedlotterysystemtoselectthefactoriesthatwillbeinspected.Ofcialswhoconducttheinspectionwillhavetouploadtheirreportonapubliclyaccessiblewebsitewithin72hours.Thenhehasalsocutthroughtheredtapebylaunchingawebportalreplac-ing16formsrelatedtocompliancewithonlyone.ThisiswhatIcallmaximumgover-nanceminimumgovernmenthesaidTheschemehasbeennamedPanditDeendayalUpadhyayShramevJayateafteraSanghParivariconandwillim-provetheeaseofdoinginIndiaandhelpdeliveronthepromiseofthePrimeMin-istersMakeinIndiainitiativetoturnIndiaintoaglobalmanufacturinghub.Indiaranks134thoutof182countriesontheWorldBanksEaseofDoingBusinessIndex.Modihassaidinthepastthatthegovernmentcouldbysimplytinkeringwiththeruleshelpim-provethisrankingbyasmanyas50places.ButsuccessivegovernmentsinthepasthaveshiedawayfromtryingtoreformIndiasexcessivelyprotectionistlabourlawsblamedbybothforeignanddomesticinvestorsasoneofthemainreasonsholdingbackinvestmentsinthemanufacturingsectorforfearofinvitingastrongbacklashfromthecountryshighlyunionisedandpoliticallyinuentiallabourlobby.Theninanemployee-friendlymea-sureeligibleworkerswillbegivenoneprovidentfundaccountnumberforlife.Thismeansthesameaccountwillserveastheirprovidentfunddepositoryeveniftheyswitchjobs.Currentlyemployeesneedanewprovidentfundaccount.Transferringtheiroldprovidentfundduesorwithdrawingmoneyincaseofemergenciesiscurrentlyalaboriousprocess.Asaresultmanyworkersareunabletoclaimtheirduesresultinginanunclaimedcorpusof4.5billionlyingdormantwiththestatutoryauthorities.ThePrimeMinisteralsoannouncedeas-iernormsfortheApprenticeshipSchemetotrainorreskillthe12-15millionyoungworkerswhoentertheworkforceeveryyear. INDIAGLOBALBUSINESS34November2014ThemanbehindthesuccessfulIncredibleIndiacampaigniscon-dentPrimeMinisterNarendrasModisMakeinIndiainitiativewillmakeanevenbiggerimpact.AmitabhKantSecretaryintheDepart-mentofIndustrialPolicyPromotionDIPPdescribeditasamovementwhichreectsanewIndiangrowthmindset.HesaidIthinkMakeinIndiawilldenitelymakeanevenbiggerimpactbecauseitcutsacrosssectorsandhaspoliticalandadministrativewillatthehighestlevelbehindit.IfeelMakeinIndiaislikeamovementreectinganewmindsetofgrowthinIndiawhichinthecomingyearswilldriveIndiasgrowthstoryinanewway...Indiahasbeenareluctanturbaniserbutthiscanworktoouradvantagetodaybecausewecanleapfrogtechnologyinourvisionforsmartcities.Thereisanewenthusiasmvibrancyanddyna-misminIndiawhichwearetranslatingintoreality.HewasspeakingattheOverseasIndianFacilitationCentresOIFCDiasporaEngagementMeetheldinLondonthisweek.Theeventorganisedinassocia-tionwiththeConfederationofIndianIn-dustryCIIispartoftheBritishcapitalsrst-everRegionalPravasiBharatiyaDivasRPBDtoengagewiththeIndianDiasporainBritain.KantalsoexpressedIndiaswillingnesstopartnerwiththeUKontheBanga-lore-MumbaiEconomicCorridorBMECbutreferredtosomechallengesthatremain.ThemanbehindthesuccessfulIncredibleIndiacampaigniscondentPMModisMakeinIndiainitiativewillmakeanevenbiggerimpact.MakeinIndiawillbeevenmoreincredibleSPECIALREPORT www.indiaincorporated.com35November2014HesaidIndustrialcorridorsarestruc-turedonthebackofgoodperspectiveplanningandthatplanningfortheBMECisinitsnalstages.Whenwepart-neredwithJapanonsimilarcorridorsofDelhi-MumbaiandChennai-Bangaloreitbroughtinalotoflong-termlendingover40yearsat0.1percent...infrastructurerequireslong-termfundingatlowrates.WhetherEnglandwouldbeabletoprovidethatandwhatkindofnancingitwouldbeabletoprovidetobuildupapartnershipwithIndiaisthechallengewhichtheUKgovernmentwillhavetondasolutionto.TheeventmarkedthesigningoftwomemorandaofunderstandingMoUsbytheOIFCwiththeUKIndiaBusinessCouncilUKIBCandGatewayAsiaforcooperationacrossvarioussectors.TheRegionalPravasiBharatiyaDivasandtheNRIactivityinthiscountryhashelpedgalvanisetheentireGovernmentofIndia.TheDiasporahasremainedlinkedtoIndiaandcontributedtothegrowthofIndiathroughremittancestheglobalisationprocessandbuildingnetworkswhichIndiacouldbankon.TheremittanceshavenotonlybeennancialtransfersbutofideasandattitudessaidRanjanMathaiIndianHighCommissionertotheUK.ThesummitwhichbroughttogetherbusinessleadersfromacrosstheUKtointeractwiththeministryofoverseasIndianaffairsdelegationfromIndiacov-eredthepotentialforgreaterIndia-UKcooperationacrossenergyinfrastructureandskillsdevelopment.IthinkMakeinIndiawilldefnitelymakeanevenbiggerimpactbecauseitcutsacrosssectorsandhaspoliticalandadministrativewillatthehighestlevelbehinditAmitabhKantSecretaryintheDepartmentofIndustrialPolicyPromotionDIPPSPECIALREPORTIndianPrimeMinisterlaunchestheMakeInIndiainitiativeon25thseptember2014.IndianPrimeMinisterlaunchestheMakeInIndiainitiativeon25thSeptember2014. INDIAGLOBALBUSINESS36November2014CoalgasanddieselIndiafnallyshowspolicyenergyAshokMalikisaprominentnewscolum-nistinIndia.HewritesontheincreasingintersectionofIndiasdomes-ticpoliticsandforeignandtradepolicies.InterruptedbystateelectionsinMaharashtraandHaryanatheIndiangovernmentseconomicreformpro-grammenallygotgoingwithaseriesofdecisionsthispastweek.Thepriceofdieselwasde-con-trolledandfellsharp-lygiveninternationaloilpricesareattheirlowestinsomefouryears.Thismeansdieselpriceswillnowbelinkedtomarketratesandcouldgoupanddownasthemarketchanges.Whilethisopensuppotentialpoliticalriskforthegovernmentifandwhenpricesrisesharplyorshowvolatilitythegovern-mentisobviouslybettingonaperiodofsoftpricesaswellasmakingadeningmovetowardsendingadieselsubsidypolicythatendedupcreatingdistortionsandofferingindirectincentivesforamongotherthingsbuy-ingSUVsratherthansmallerpetrol-runcars.ThepreviousUPAgovernmentafteryearsofdelayhadbeguntoraisethepriceofdieselby50paiseamonthfromJanuary2013tobridgethegapbetweencostandretailprices.ThatgaphasnowbeenlledandtheNDAgovernmentiscondentenoughtofreedieselprices.Thiswillbeabonustobothoil-marketingcompaniesOMCsaswellasthegovernmentwhichwillnotneedtosubsidisegovernmentownedOMCs.ItwillalsoallowprivatecorporationssuchasRelianceIndustriesandEssartore-opendieselstationsthathadshutdownbeingunabletocompetewithsubsidisedgovernmentownedcompetitors.WhiletheNarendraModigovernmenthastakenthedieseldecisionofitspredecessortoalogicalconclusionondomesticgaspricingithasdiffered.InJune2013thethengovernmenthadannouncedanincreaseinthepriceofdomestically-producednaturalgastoUS8.4permmBtufromtheexistingUS4.2.Ithadusedacomplexmech-anismtoarriveatthepriceincludingpricesatinternationalhubsandthepriceofimportedLNG.Thenewpricewastocomeintoeffectthissummer.GUESTCOLUMN www.indiaincorporated.com37November2014Revisingtheearlierdecisionthegovern-mentofPrimeMinisterModihasraisedthepriceofnaturalgastoUS5.61perunit.Whilethismayseemdisappoint-ingforIndiasdomesticgasproducersprimarilygovernment-ownedOilandNaturalGasCorporationandtheprivateRelianceIndustriesitdoesensurewhatFinanceMinisterArunJaitleycalledagoodprotbutnotawindfallprot.GiventheloweringofinternationalcrudeandenergypricesoverthepastyearindustryinsiderssaythenewpriceisnotasfarremovedfromthepricesuggestedbytheUPAgovernmentasabaldreadingofthenumberswouldsuggest.TheclarityongaspriceswillalsohelpPetroleumMinisterDharmendraPradhanwhoiswork-ingonanewoilandgasexplorationpolicytoattractinternationalandprivateinvestment.Theoldpolicywithaproductionsharingtemplatethatgoesback15yearsisclearlynotworking.Onlythreeofthe252blocksallocatedforexplorationhavereachedproductionstage.Anenergy-hungryIndianeedstoredressthis.Thethirdmajordecisiontakenbythegovernmentrelatedtocoalmining.InSeptemberIndiasSupremeCourthadcancelledallocationof200oddcoalblocksthemajorityofthemgivenoutbythepreviousgovernmentbetween2004and2014andtermedtheseallocationsillegal.ThecurrentgovernmenthasissuedanordinancewhichwillbevalidatedbyParliamentinNovemberandbecomealawtoe-auctiontheseblockstobothstate-ownedenergycompaniesaswellasprivatecompaniesthatarelegitimateendusersofcoalsuchasthoseinthesteelcementandpowerindustries.Inachangefromthepasttheproceedsfromthee-auctionwillgotostategovernmentsthathousethoseminesandnottothefederalgovern-ment.Thiswillgivestategovernmentsanincentiveinof-feringspeedylocalclearancesformining.FinallytheModigovernmenthasembeddedintotheordinancetheauthoritytoallowprivatemerchantminerstocompetewithCoalIndiathegovernmentmonopolyandpermitthemtoexcavatecoalandsellitinthemarketeveniftheythemselvesarenotendusers.Thoughnodatehasbeenannouncedforthisopeninguptomerchantminingitispartofthegovernmentsplanstoener-gisetheminingeconomyandtoupturnCoalIndias40-yearmonopoly.ThatcoalmonopolywasacornerstoneofIndiassocialistera.ThepreviousUPAgovernmentafteryearsofdelayhadbeguntoraisethepriceofdieselby50paiseamonthfromJanuary2013tobridgethegapbetweencostandretailprices.ThatgaphasnowbeenlledandtheNDAgovernmentiscondentenoughtofreedieselprices.GUESTCOLUMN INDIAGLOBALBUSINESS38November2014ModisUSvisitsignalsdeepersecuritytiesDrGarethPriceisaSe-niorResearchFellowatCha-thamHousefocussingonSouthAsia.Hisresearchspanseconomicspoliticsandinternationalrelations.Hisrecentre-searchexam-inedattitudestowaterinvecountriesinSouthAsia.HepreviouslyworkedfortheEconomistIn-telligenceUnitandControlRisksGroup.ViewsontherecentvisittotheUSbyIndianPrimeMinisterNarendraModihavevaried.SomehavearguedthatUS-Indiatieshavebeenresetothersthatthevisitwasshortonpracti-calities.Onepracticalmeasureonwhichsubstantiveprogresswouldappeartohavebeenmadeisintelligence-sharingandthiscouldbodewellforgreaterall-roundsecuritycooperation.TheWesterndraw-downoftroopsfromAfghanistanmaywellhaveincreasedthescopeforengage-mentbetweentheWestandIndia.OneofIndiascommondemandsindiscussionswiththeWesthasbeenforgreaterintelli-gence-sharing.SomeprogresshasbeenmadebetweenIndiaandtheEUforinstancebutIndiahaswantedmorecooperation.OneofthefactorshinderingtheWestsabilitytoengagewithIndiaonthisissuehasbeenPakistanwiththeWestencouragingthelattertoplayamoreconstructiveroleinAfghanistan.WhenIndiatalksaboutintelligencesharingitisreferringprimarilytothevariousIsla-mistgroupsresponsiblefortheMumbaiattacksandotherattacksonIndiaoverthepastfewdecades.AmoreconcreteagreementonworkingtogetheragainstmilitantandcriminalnetworksinPaksitanwouldseemlikethepositiveoutcomeofMrModisUSvisit.MaadonDawoodIbrahimheldresponsibleforthe1993attacksinMumbaiislikelytobeoneoftheinitialtargetsforjointcooperationbetweenIndiaandtheUSandotherPaki-stan-basednetworkscouldsoonfollow.Indiaisclearlyreluctanttoenterintoafull-blownalliancewiththeUS.WhileitisdeepeningitsengagementwithJapanitisdoingthesamewithChina.Butstrengtheningengagementonspecicissuesofsharedbenetsuchastacklingterrorismprovidesclear-cutbenetstoboththeUSandIndiaandislikelytoencouragedeeperengagementthanrhetoricalstatementsaboutpartnerships.GUESTCOLUMN www.indiaincorporated.com39November2014IndiasetforfastgrowthReutersSynisetiesupwithUKscloudBuyIndiaseconomywilllikelygrowatitsfastestpaceintwoyearsinthecurrentscalyearasPrimeMinisterNarendraModiimplementsreformstoattractinvestmentalatestReuterspollofeconomistshasrevealed.Theeconomyhasstruggledthroughthelongestspellofbelow-5percentgrowthinaquarterofacenturybutlatestforecastindicatesthattheslumpmaybeover.Thepollof20economiststakenoverthepastweekshowsIndiawilllikelygrow5.5percentthisscalyearand6.4percentthenextslightlybetterthan5.3percentand6.3percentexpectedintheJulypoll.HopesofreformsforeconomicrevivalfromModihaveattractedforeigncapitalinowsbeforetheelectioninMayuntilnowtriggeringamassiverallyinthestockmarketmakingitoneofthebestperformersinAsiasofarthisyearReuterssaidinitsassessment.HoweverastheglobaleconomyisshowingsignsofweakeningandisexpectedtoweighonoverseasdemandforIndianmerchandise.Pune-basedSyniseTechnologieswhichhasinterestsacrossmanufacturingandinformationtechnologyIThasenteredintoanagreementwithUK-basedcloudBuytooperateaB2BmarketplaceandsourcingfromIndia.TheB2BmarketplacewillcatertoprocurementofindirectmaterialbyvariousindustrieslikeAutoAutoAncillariesFMCGTextilesCapitalGoodsetc.Theagreementwillhelpmakethenalofferingstoclientsmoreefcientduetotheuseoftechnologybyaddingfeatureslikespendanalysiscontractmanagementpaymentfacilitiesetc.ThegovernmentsMakeinIndiacampaignhasprovidednewpotentialfore-procure-mentservicesinthecountryandtheKalyaniGroupcompanyplanstocapturethe2-billionmarketinIndiaforindirectmaterials.NEWSINBRIEF INDIAGLOBALBUSINESS40November2014INDIAPOLICYGettingsmartaboutSmartCitiesModigovernmentsplantobuild100smartcitiesacrossIndiaTheNarendraModigovernmentsplantobuild100smartcitiesacrossIndiacantbefaultedinprinciple.Butthegovernmenthasyettocomeoutwithspecicssoanycom-mentsabouttheproposalhavetobeperforcegeneralinnature.Butafewpointersalreadyexistonthewayforward.Butrstletusputthecaveatsonthetable.Thereisnoprecisedenitionofwhatmakesacitysmart.Thegenerallyaccepteddescriptionisofacitythatiswellplannedenergyefcientefuent-neutralecologicallysustainableandbackedbyatechnologicalinforma-tiontechnologybackbonethatfeedsthecityauthoritieswithrealtimeinforma-tiononsayelectricityconsumptioninvariouspocketssothatpowercanbeevacuatedfromenergysurplusareastoonesfacingadeciencyforoptimalutilisationofresources. www.indiaincorporated.com41November2014INDIAPOLICYThesamecanbereplicatedforgasconsumptiongarbagedisposaltrafcmanagementandothercivicamenities.ThenextquestionthatarisesiswhydoweneedsmartcitiesIndiascitiesareincreasinglybecom-ingandinsomecasesarealreadyunlivable.Studiessuggestthatby2030thenumberofIndianslivingincitieswilldoublefrom290millionaccordingtothe2001censustoabout600millionby2030.Obviouslythismassiveinuxofpop-ulationwillneednewlivingandworkplaces.McKinseyGlobalInstitutehasestimatedthatbythenurbanIndiawouldaccountfor70percentofallnewjobsandaccountfor70percentofIndiasGDP.ModisSmartCitiesplanseekstoaddressthischallenge.Indiasexistingcitiesarentenough.Newonesneedtobebuilt.Theresnoquestionofthat.Butarchaicrulesandabureaucracystillstuckinthesocialist-eracommandandcontroleconomyarethebiggesthurdlesapartfromnancesthatthegovern-mentwillhavetotackle.HereitwillbeinformativetolookatthetravailsfacedbytheGujaratIn-ternationalFinanceTecGIFTaRs78000-croresmartcityplannedin2007byModiwhilehewasstillchiefministerofGujarat.AjointventurebetweenthestategovernmentandInfrastructureLeasingandFinancialServicesLtdILFStheprojectwasenvisagedasIndiasanswertoShanghaiLondonandTokyobutthankstoalethargicbureau-cracyatinNewDelhiunderthepreviousUnitedProgressiveAlliancegovernmentthehalfcompletedprojectislanguishingforwantofclearnorms.ThenancecommerceurbandevelopmentandaviationministriesnowallunderBJPministersareexpectedtosmoothentheroadblocksandfasttracktheprojectbutthedelaysunderthepreviousgovern-mentshouldserveasapointertowhatanobstructionistbureaucracycandotoeventhewell-conceivedprojects.WhenthegovernmentcomesoutwithrulesforthesesmartcitiesitwoulddowelltofactorintheunnecessarydelaysfacedbyGIFTtoensurethatothersarespareditsfate.Otherwiseprivatenancierssinequanonforthesuccessofthesmartcityplanwillnotcomeforwardtoinvestthebillionsofdollarsrequiredtoturnthisconceptintoareality.InhismaidenBudgetonJuly10thisyearFinanceMinisterArunJaitleyhadallocatedRs7060croreabout117millionforthisinitiative.Theallocationheexplainedwastoserveasseedmoneyfortheprojectmorefundswouldbeprovidedasandwhenitbecamenecessary.Thegovernmentcaninvestonlysomuch.Privateespeciallyforeigncapitalwillbenecessarytomakethisprojectasuccess.Butcapitalwillpourinonlyifpoliciesareclearandcastinstone.TheModigovernmentwillhavetomovefastandcomeoutwithapolicydocumentonsmartcitiestocapitaliseontherenewedfeelgoodfactoraboutIndiaandgetthisprojectwhichcanbeagamechangerofftheground. INDIAGLOBALBUSINESS42November2014ANALYSISGovtshouldnotappealagainsttheVodafonejudgmentTheBombayHighCourthasruledthatVodafoneIndiaisnotliabletopayRs3200crore533millionintaxesonsharesithadissuedtoitsparentin2009-10.ThiscouldbringcheertobothforeignandIndianinves-torsbyclarifyingopaquetaxrulesandcurbingthecoerciveIncomeTaxadmin-istrationregimeinthiscountry.ThefactsofthecasearesimpleIn2009-10VodafoneIndiahadissuedsharestoitsparent.TheIncomeTaxDepartmentcontendedthatthesewereundervaluedandsoconferredadisguisedgaintotheforeignprincipalandthereforecameunderthepurviewoflawsgoverningtransferpricingandleviedtaxontheamount.TransferpricingisthemechanismbywhichadivisionBombayHighCourthasruledthatVodafoneIndiaisnotliabletopayRs3200crore533millionintaxesonsharesithadissuedtoitsparentin2009-10.ofacompanysellsgoodsinternallytoanotherdivision.Thelawsaysthepricechargedforsuchinternalsaleofgoodsshouldbethesameasthatchargedfromoutsidersorthirdparties.Disputesarisewhenthebuyingdivisionischargedlessthanthemarketpriceorwhenthepriceofgoodssoldisunclear.Salesofsharesdonotcomeunderthepurviewoftransferpricing.Thisispre-ciselytheargumentVodafonemade.ItsaidthattheissueofsharesconstitutesacapitaltransferandsocannotcomeundertheIncomeTaxnet.AdivisionbenchoftheBombayHighCourtcom-prisingChiefJusticeMohitShahandJusticeMSSanklechaacceptedthisargumentinitsentirety. www.indiaincorporated.com43November2014ANALYSISWefeelthatthereisnotaxableincomeonsharepremiumreceivedontheissueofsharestheysaid.Thereare25similarcasespendingad-judicationinvariouscourtsacrossIndia.AmongthemthemosthighproleonesinvolvecompaniessuchasIBMIndiaShellNokiaEssargroupandSano.InfacttheverdictontheShellcaseisexpectedonMonday.ThesetaxdemandswereinitiatedunderthepreviousCongress-ledUnitedProgressiveFrontgovernmentwhichwasdesperatelylookingtoshoreuprevenuesinastagnanteconomyandcontributedheavilytoIndiasimageasabusiness-unfriendlyinvestmentdestination.FromDay1thenewNarendraModi-ledNationalDemocraticAlliancegovern-menthasdeclareditsintentionsofchangingthisimageandturningIndiaonceagainintoanattractiveinvestmentdestination.ThecountrystoplawofcerAttorneyGeneralMukulRohatgihasgoneonre-cordtosaythatheisnotinfavourofthegovernmentblindlylingappealsandthusholdingupdisputeresolutionsandalsocloggingupthelegalsystemineverycaseitloses.TheNokiaverdictandthepossibilityofsimilarsuchverdictsoffersthegov-ernmenttheperfectopportunitytosetthingsright.Itshouldaccepttheverdictadmitthattaxofcialshadexceededtheirjurisdictionandclosethecase.Itshouldalsoproactivelyexamineallothersuchcasespendinginvariouscourtsandseekclosurewherethemer-itsofthecasejustifythismeasure.Itmayresultinsomenotionallossofrevenuenotionalbecausethelikeli-hoodofrealizingtaxesarelowbutwillassuagethefrayednervesofinvestorsacrosstheworld.ThiswillalsoshowtheworldthatthegovernmentisseriousaboutwalkingthetalkoneasingthepainofdoingbusinessinIndiaandencourageforeigninves-torswhomModihasinvitedtoMakeinIndiatoplanlargerinvestmentsinIndia.ModihadtoldUSinvestorsduringhisrecentvisittothatcountrythathewouldusetheSupremeCourtverdictcancel-lingtheallocationofcoalminestocleanupthesystemandputinplacetrans-parentproceduresfortheallocationofnaturalresources.TheNokiajudgmenttoooffershimanopportunitytocorrectawrongprecedentsetbyhispredecessorgovernment. INDIAGLOBALBUSINESS44November2014DronestoaidinmakingDigitalIndiaarealityZuckerberghasexpressedhisreadinesstojoinIndiasambitious3.5billionNationalOpticalFibreNetworkTheIndiangovernmentsambitiousplanstoconnect250000ofIndias600000villageswithhighspeedInternetbandwidthhavereceivedamas-siveboostfromFacebookfounderandCEOMarkZuckerberg.ZuckerbergduringhisrsttriptoIndiametwiththePrimeMinisterNaren-draModiaswellasICTministerRaviShankarPrasadwhereheexpressedhisreadinesstojoinIndiasambitious3.5billionNationalOpticalFibreNetworkasapartneranddeployoutoftheboxalter-nativetechnologiestorollouttheproject.FacebookislookingtolaunchapilotprojectinSeemandhraamongotherstatesasthestateisseentobeaheadofothersinitsadoptionoftechnology.ThesocialmediagiantisdevelopingsolardronesthesizeofaJumboJetweighingonlyasmuchasfourcartyres.Thesearecapableofyingformanyyearsandfacilitatebroadbandconnectiv-ityoverlargeswathesoftheworld.PrimeMinisterNarendraModiakeentechnologyenthusiastplanstousetheNationalFibreOpticNetworktodeliverservicessuchashealtheducationandotherservicestothepoorestofthepoorwhomtheregulargovernmentmachineryhasbeenunabletoreach.DuringhismeetingwithPrimeMinis-terModiZuckerbergalsoexpressedhisinterestincontributingFacebookstechnologymuscletothePrimeMinis-tersSwacchBharatAbiyanCleanIndiaCampaignandreafrmedhiscommit-menttotheDigitalIndiainitiativethatseekstousetechnologytoreachthefruitsofgovernancetothepoorestofthepoor.PreviousgovernmentshavehadschemesforthisandothersectionsofthepeoplebutpoorimplementationandcorruptionhavedeniedIndiansthebenetofthehumungousamountsthegovernmentspendsonwelfarehealthandeducationeveryyear.Modihasproposedanalternativeblueprintusetechnologytocutoutorminimisethehumaninterfaceandthusthepossibilityofgrafttodelivertothepeoplewhatistheirright.AndthatiswherethepeopleofIndiawillbehopingFacebookwillbeabletodeliver.INDIAPOLICY www.indiaincorporated.com45November2014GUESTCOLUMNModisforeignpolicyDrRajivKumarisaSeniorFellowattheCentreforPolicyRe-searchDelhiandDirectorPahleIndiaFoundationatwww.pahlein-dia.org.Heisawell-knownIndianecono-mistwhohasauthoredofseveralbooksontheIndianeconomyandIndiasnationalsecurity.TherstroundofMrModisinteractionswithworldleadersisbehindus.ThisroundstartedwithhisvisittoIndiasneigh-boursthatdemon-stratedMrModisprioritytoSouthAsiawhichIhopewillbenotonlymaintainedbutreinforcedaswegoforward.Inthisroundhehasalsometwiththeheadsofgovernmentofthethreelargestecono-miesintheworldandaddressedawell-at-tendedsessionoftheUNGeneralAssembly.Andhehadfourbilat-eralmeetingswhileinNewYorkthatincludedtheheadsofgovernmentofthreeneighbouringcoun-triesandremarkablyMrNetanyahu.IsupposethemeetingwithPrimeMinisterNawazSharifcouldnottakeplaceinlightoftheforthcomingelectionsinMaharashtraandHaryana.ItwouldhavebeenverydifcultforMrModitofendoffchargesofappeasingPakistanthatwouldhaveinevitablybeenhurledathimfromtherightwingShivSenaandotherpartiesaswell.LetushopethatwithstrongresultsfromthesetwoprovincialelectionsaswellMrModiwillfeelmorethansufcientlyempoweredtobreaknewgroundwithPakistanandengagewithitfromaposi-tionofstrengthnotenjoyedbyanyofhispredecessorssinceMrsIndiraGandhi.ThefeedbackfromMrModisinterac-tionshavebeenhugelypositive.AsaseniorforeigndiplomatbasedinDelhiputitsuccinctlyMrModihasalreadyarrivedontheworldstageintheseshortfourmonthsofthistakingofceandoth-erleadersarekeentoengagewithhim.Hewillgetanotherchancetofurtherre-furbishhisappealandcredentialsduringtheG-20SummitinAustralianextmonth.ThatengagementwillaffordMrModian-othersplendidopportunitytoshowcasehisgovernmentseffortstofacilitateFDIintoIndiaandtheefforthehasalreadyimplementedorputinthepipelineforimplementinghisoftrepeatedpledgeofconvertingredtapetoredcarpet.IamsureMrModirecognisesthatin INDIAGLOBALBUSINESS46November2014GUESTCOLUMNglobalRealpoliticssizematters.IndiawitharelativelysmallshareoftheglobaleconomythatisonefthofChinasandoneseventhoftheUScannothopetohaveameaningfulorinuentialroleinG-20oranyotherinternationalforumwithoutrstattaininggreatereconomicandstrategicheftofitsown.Ithastoen-surethatitseconomyisrmlyontrackforsustainingrapidandsustainablegrowthforthenextfewdecades.There-foreitiscriticalthatIndiaisseenbyothercountriesasrelentlesslypursuingitseconomicdevelopmentagendaifitdesirestobetakenseriouslyonthehightableofglobalgovernance.SobeforeheembarksonhisnextroundofinternationalengagementsPrimeMinsterModiwillburnishhisinternation-alcredentialshugelyifhecouldattendtoissuesinthedomesticeconomy.Hisreputationonovercomingthegovernancedecitwhichhehadinher-itedhastravelledfarandwide.Henowhastofollowuphisdeclaredintentiontoimprovetheinvestmentclimatebytakingsomeconcretestepsinthatdirection.PerhapstheGSTprocesscanbespeededuporthegaspricingdecisionbetakenandmakethesectorattractiveforinvestmentorthecoalconundrumcanbeaddressedbyamendingthecoalnationalisationactandpermittingprivatesectorminingcompaniestoenterthesector.Manymoresuggestionscanbegivenbuttheimportantthingistomakeastartwithsomeconcretepolicymeasures.IamcondentthathispresenceintheG-20Summitwillattractalotmorepositiveattentionifhereachedtherewiththesepolicydecisionsalreadytakencareof. www.indiaincorporated.com47November2014IOCtoinvestinCanadaToonztoacquireSpanishfrmIndiasstate-ownedoilandgascorporationIndianOilCorporationLimitedIOCwillmakeitsbiggestinvestmentinCanadatosecurenaturalgas.TheIndiancompanyisexpectedtoinvest4billionintheBritishColumbiaprovincetosourceliqueednaturalgasLNGfromtheregion.InMaythisyearithadsignedadealtobuy10percentstakeinshalegasassetsandalinkedLNGprojectinBritishColumbia.TheCanadianassetwillproduceasmuchas19.68milliontonnesofLNGayearfor25yearsstartingin2018.TheBritishColumbiaprovinceisbecominganattractivedestinationforinvestmentsintheLNGspaceonaccountoftheshorttransportationtimetoAsiatosavecostloweroperatingcostsvastgasreservesstableandreliablejurisdictionandastrongregulatoryregime.HeadquarteredinNewDelhiIOCanditssubsidiariesaccountfora49percentshareinthepetroleumproductsmarket31percentshareinreningcapacityand67percentdownstreamsectorpipelinescapacityinIndia.IndiananimationcompanyToonzEntertain-menthasannouncedplanstoacquireSpainsleadingproductionanddistributioncompanyImiraEntertainment.ToonzEntertainmenthasreportedlystruckanagreementtoacquire100percentstakeintheSpanishcompanyandthetransactionwillbenalisedonceduediligenceiscompleted.AccordingtothedealImirawillcontinuetooperateasaseparateproductionanddistributionentitywithitsexistingmanagementstructure.ItwillhandletelevisionandlicensingrightsforToonzAnimationproducedcontentinregionswhereithasanes-tablishedfootholdincludingEuropetheUSLatinAmericaandAfrica.Establishedin1999andbasedinKeralaToonzhasworkedwithvariouspartnerssuchasDisneyTurnerBroadcastingSonytheBBCMarvelandNicktoons.NEWSINBRIEF INDIAGLOBALBUSINESS48November2014SignalsfromIndiaarepositiveIndiaInc.InterviewVinceCablehasbeenthemostoutspokencriticoftheUKgov-ernmentsimmigrationpoliciesthathaveresultedinasharpdropinIndianstudentscomingtostudyatUKuniversities.Thesecretaryofstateforbusinessin-novationandskillslandsinIndiaonFri-dayforaweek-longvisitwithhundredsofnewscholarshipsonofferandanewschemetoinvitebackIndianundergrad-uateswhostudiedatUKuniversitiesinthepast.TheseniorLiberalDemocractMPalsohasmeetingsscheduledwithnanceministerArunJaitleyinNewDelhiandwillthenmoveontoPuneChennaiandGoa.IndiaInc.spoketotheministerjustbeforeheleftforDelhiabouthisvisionforthetwo-wayinvestmentowswithanewgovernmentatthehelminIndiaandwhathehopestoachievefromthisvisit.QWhatareyourspecicplansforthisparticularvisitThisismyfourthvisittoIndiaassecre-taryofstatebutprobablymy20thvisittoIndiasinceIrstwentinthe1960s.SoIhavebeengoingforalongtimeandIhavealotofconnectionsandIlovegoingthere.ThisisabusinesstriptobuildupourrelationshipwithIndia.Itstryingtomaintaintheundoubtedlypositivemomentumthathasbeengenerated.INTERVIEW www.indiaincorporated.com49November2014Thereareissuesbutforthemostparttherelationshipisexcellent.TheresbeenalotofBritishinvestmentinIndiainthelastfewyearsandwearenowcomfortablythelargesttheresbeengrowthintradeinbothdirectionsandwearewellontracknowtomeetthetargetthatwassetofdoublingofIndia-UKtradeby2015.QWhataresomeofthespecicproj-ectsyouwouldbehighlightingThereisalotofIndianinvestmentintheUKandoneoftheprojectsIamgoingtobeannouncingwhenImthereisAmtekAutowhichisanIndiancompanywhichisgoingtoestablishafactoryinKidder-minsterintheWestMidlands.TheywillbesupplierstoJaguarLandRoverwhichisaTatacompany.ItsgoodonbothsidesbecausetheresquiteabigIndiancomponentinthepro-ductionandwearebuildinguptheautosupplychainhereanditsanindicationofthetwo-wayows.TobalancethatImgoingtovisitJohn-sonMattheywhobuildcatalyticconvert-ersforIndiancompaniesandtheywillbeproducingtheir25millionthwhileIamthere.Thebasicthemesarebuildingupinvestmentowsinbothdirectionsandbuildinguptradeinbothdirections.QWhatmessagewillyouhaveforIndianstudentsplanningtostudyabroadIwanttosendaverystrongmessagethatwereallyvalueIndianstudentsintheUK.TheresbeenquiteabigdropoffforamixtureofreasonsbutprobablybecauseofafalseperceptioninIndiathattheyarenotwelcome.TheyarewelcomeandIwanttomakethecaseforthemcomingherejustasatthesametimeIammakingthecasetomycolleaguesintheBritishgovernmentforadaptingourimmigrationrulestobesomewhatfriendlier.INTERVIEW INDIAGLOBALBUSINESS50November2014SoIwillbemakingthecaseforencouragingIndianstudentsintheUKandtocementitwevegotabignewscholarshipprogrammewewillbegivingout396scholarshipstoIndianstudents.Thisisfor2015intakeandispartoftheoverallGreatScholarshipprogrammeacross57UKuniversities.ThereisalsoaprogrammeaimedatquarterofamillionstudentswhodidtheirundergraduatedegreeintheUKsotheycanbackhereforreturnvis-itsre-acquaintthemselveswiththeirolduniversities.AndsomethingIamquitekeentopromotebasedonmymeetingwithWiprochiefAzimPremjiearlier.HesuggestedwebringsomeofourBritishyoungpeopleandtheycantraintheminIndia.Sowegetatwo-wayow.WehavenowgotabigprogrammecalledGenerationIndiawhichisaboutencouraging25000BritishstudentsoverveyearstogotoIndiatostudytodotemporarysecondments.QAreyouwinningtheargumentoverimmigrationtoattractoverseasstu-dentstotheUKWehavewontheargumenttokeepoverseasstudentsoutoftheoverallimmigrationcap.Butthevisaregimehasbeentightened.Therewasgenuineabuseandasaresultalotofperfect-lygoodstudentsgetcaughtupintheimmigrationcontrolsandIwouldliketoseesomeofthatrelaxedforexampleforpost-studyworkhavingtogobacktoIndiatoapply.IammakingthecaseintheBritishgovernmentforadaptingtherulesbutasyouhaveheardtherhetoricaboutimmigrationitisquitedifculttochangepolicyinaliberaldirection.TheresatensionanddisagreementonhowweshoulddealwiththisandIshallcontinuetoarguethecasestronglyforhavingaexibleregimewhileotherswillprobablypushback.Therearetwoseparateproblemstheactualmeasuresthemselveswhicharecreatingsomeobstaclesnottocomingherebuttopost-studywork.Secondlytherestheper-ceptionproblem.WecandealwiththeperceptionproblemandthatswhatIamessentiallyconcernedwithandthePMsDavidCameronbeentryingaswell.Thatcanbeturnedaround.QDoaquicksuccessionofministerialvisitsfromtheUKhelpThepointthatisoftenmadeinIndiaisthatitsnicetohavetoplevelpeoplecomingbutwhereisthefollowup.WejustwanttomakesurethatwehaveacontinuingowofgoodbusinesseswithministerialsupportcontributingtoourcommitmenttotheIndianrelationship.SomeofthesignalsthathavecomeoutfromthenewIndiangovernmenthavebeenveryencouragingandwehavenotedthereisaverypositiveapproachtobusinessingeneralandworkingwithourcompanies.TheresbeenalotofBritishinvest-mentinIndiainthelastfewyearsandwearenowcom-fortablythelargesttheresbeengrowthintradeinbothdi-rectionsandwearewellontracknowtomeetthetargetthatwasset.INTERVIEW www.indiaincorporated.com51November2014SECTORFOCUS-MiningEssarSteellinesupfundsforUSplantTheprojectisthelargesteconomicdevelopmentprojectontheIronRangeinmorethanfourdecadesIndiansteelgiantEssarSteelhassecuredthenancesitneedstocom-pleteconstructionofitsopen-pitironoremineandpelletplantinNashwaukMinnesota.Theannouncementcomesweeksafteritwentinadifferentdirectionfromapo-tential450-millionbonddealtonanceaportionoftheproject.Accordingtothecompanytheproj-ectisthelargesteconomicdevel-opmentprojectontheIronRangeinmorethanfourdecadesandwillberampedupforpossibleproductionbythesecondhalfof2015.EssarspresidentandCEOMadhuVuppulurisaidThistrulyisamo-mentousoccasionforourcompanyandfortheIronRangeaswenowhaveinplacethenecessarynancingtocompletethishistoricprojectwhichwillbeatremendouseconomicenginetothebenetoftheIronRangeanditsresidentsforthenextseveraldecades.Byhavingcompletedthenecessary-nancingforthisprojectwelookforwardtomovingaggressivelytowardprojectcompletionandcommencementofproduction.Essarhasinvestedaround900millionintotheprojectbutneededtoraisemorefundstonishconstructionwhichisabouthalfcomplete.Oncecompletedthetaconiteplantwillmineandcrushironoreandproduce7milliontonsofironorepelletsayear.Thetaconitepel-letsareexpectedtobeshippedfromNashwauktotheEssarSteelAlgo-maplantinCan-adawhereitwillbeprocessedwithspecialtyfurnacesuntilitisconvertedintopuresteel.EssarexpectstheNashwaukprojecttogeneratehundredsofjobsand180millioninnewtaxreve-nueforthestateoncefullyoperational.Theminehasa70yearlifeexpectancy. INDIAGLOBALBUSINESS52November2014GUESTCOLUMNRenewedUS-IndiaEconomicRelationsWhattoWatchPersisKhambattaisaseniordirectorwithbusinessconsultancyBowerGroupA-siaandisalsoanadjunctfellowwiththeWadhwaniChairinUS-In-diaPolicyattheCenterforStrategicandInternationalStudies.PrimeMinisterModissuccess-fulSeptembertriptoWashingtonDCwrappedupaverybusymonthofbilateralengagementincludingwithJa-panChinaandAus-tralia.EachroundofmeetingsresultedinlargeinvestmentstoIndiaincludingareported35billionbyJapan20billionbyChinaandaland-markciviliannucleardealwithAustralia.HisUSvisitreport-edlyresultedinpledgesofover40billionofinvestment.Thetripwasseenasanopportunitytoreinvigoratetherelationshipwhichhadrecentlybeenovershadowedbyanincreasinglynegativenarrativeoverthepasttwoyearscast-ingacloudoverthemyriadroutineofcialmeetingsthattakeplacethroughoutthecourseofeachyear.Thegoodnewsisthatgovernment-to-governmentrelationsarebackontrackandthemeetingsbetweenPresidentObamaandPrimeMinisterModiwentbetterthanexpected.ThepresidentsdecisiontopersonallyescortMrModitotheMartinLutherKingmemorialinWashingtonwasapleas-antsurpriseandaugurswellforofcialrelationsmovingforward.Howeveronekeyaspectoftherelationshipresponsi-bleformuchoftherecentrancorcannotbebrushedasidewhatareAmericaninvestorslookingforinIndiaWherearetheopportunitiesforimprovedeconom-icrelationsForthistherearecluesinboththestyleandsubstanceofthePrimeMinisterinrecentweeks.BeginningwiththestyleitwashardnottonoticethatthoughthetripwasplannedmeticulouslybybothsidesneitherwasquitereadyforthecharmoffensivethatModilaunchedonboththeIndian-Americanandcorporatecommunities.HewasgreetedwarmlybymassivecrowdsatbothMadisonSquareGardenandCentralParkinNewYorkbothappearancesdepartedfromtheroutinevisitsbyanyheadofstateanddenitelybrokefromtraditionwithpastIndianheadsofstate.ModialsodepartedfrompreviousprimeministerialvisitsbymeetingdirectlywithCEOsfromAmericasleadingcorpora-tionsinabidtocurbagginginterest www.indiaincorporated.com53November2014inacountrythathasbecomeabywordforthemostdifcultplacesintheworldtodobusiness.Inthesemeetingshisvisionforthecountryanddirectstylemanagedtoconvincesomethatheisseriousaboutimprovingthebusinessclimate.Buttheproofaseverwillbeintheimplementationofpro-consumerandpro-marketpolicies.AmericancompaniesarefamiliarwithPMModihavingmetwithhiminhisroleaschiefministerofGujaratandpouredinvestmentsintothatstateoverthepastdecadebecauseofthepriorityhisgovernmentplacedontheeaseofdoingbusiness.NowthequestionsareCanhereplicateGujaratsbusinessclimateinNewDelhiWillredtapeandag-gressivetaxpoliciescontinuetoburdenthesystemWillnewlegislationandregulationsofferalevelplayingeldIfsowillAmericancompaniesrespondExpectationsareskyhigh.Fortheseimportantquestionsthean-swersarelessclear.Whatwedoknowiswherethenear-termopportunitieslie.Forexamplethereisrenewedvigorinthedefenserelationshipincludingsalesofhardwareandtheco-productionandco-developmentoffutureequipment.Thecountryspushformodernmilitaryequipmentmoderninfrastructuresmartcitiesliqueednaturalgasandsanita-tionsystemsallsignalopportunitiesforAmericanrms.Inadditiontotheimmediateopportuni-tiestheprimeministerhasamandateforchangeamajorityinthelowerhouseofparliamentandistransformingthewaythebureaucracyworks.HispartywonamajorityintwomajorstateelectionslastweekMaharashtraandHaryanahometotwomajornancialcentersMumbaiandGurgaon.Thewinswillhelpthepartygainmoreseatsintheupperhouseofparliamentcriticaltopassingthetougherstructuralreformsthatwillresultinamorefriendlybusi-nessclimate.HeisworkingdirectlywithlineministriestoeasetheprocessofinvestinginIndiawithInvestIndia3PIndiaanonlineenvironmentalpermittingprocessandotherinitiativeseaselaborrestrictionsviaasinglewindowclear-anceandwelcomeforeigninvestorstoSpecialEconomicZonesandindustrialparks.SomeofthesmallerchangesbeingmadeinNewDelhihavebeencalledtinkeringbyanalystswhoexpectIn-diaseconomicreforms2.0tobeasbigandboldasthosein1991.Thoseexpec-tationsmisstheunderlyingandimport-antfactthatModiispushingtotransformthebureaucraticcultureinNewDelhiwhichcontributesgreatlytothedifcultyofdoingbusinessandclearingawaytheoldlegislativecobwebsthathavehamperedfastergrowth.Themessagetopotentialinvestorsisthatwhatseemslikepainfullyincrementalreformtodayisinfactaimedatpavingthewayforfast-ermoresignicanteconomicreformsinthemedium-tolong-term.IftheModigovernmentcanseizethemomentinUS-Indiarelationscommu-nicateeffectivelyaboutthemanysmallreformsunderwayandhowtheywilldirectlyandpositivelyaffectthebusi-nessclimateinvestorswillcontinuetoseeIndiaasahighprioritymarket.Clearcommunicationandeffectiveimplemen-tationarekeytoraisingIndiasplaceinglobalcompetitivenessandbusinessrankingsandarekeytoattractingthedirectinvestmentthatthegovernmentseeks.GUESTCOLUMN INDIAGLOBALBUSINESS54November2014NEWSINBRIEFVoltechGroupinksoverseasJVJindalGroupeyesLondonMiningChennai-basedVoltechGroupwhichpro-videsservicesinthetestingandcommission-ingofelectricalplantshasenteredintotwooverseasjointventuresinKuwaitandZambiaaspartofitsexpansionstrategy.ThegrouphassignedoneagreementwithKuwait-basedRankGeneralTradingContractingCompanyRGTCCaleadingelectricalandtelecomcontractor.Itwillinvest19.6millionintheJVwithRGTCCinIndia.TheJVwillhelpVoltechGroupprovideoperationandmaintenanceserviceselectricalmechanicalandinstrumentationservicestopowerplantsandoilandgasplantsinKuwait.AnotheragreementiswithGoldbergAssociatesLimitedGALofZambiatobuildandoperatesolar-basedpowergenerationplantsinZambiaandotherAfricancountries.Theyhavealreadywonanordertosetupa10megawattMWsolarpowerprojectforGovernmentofZambiaatthecostof9.8million.IndianconglomerateJindalGroupislookingatacquiringthedebtriddenUKfrmLondonMininginwhatisseenasalastminutemove.LondonMininghasbeenbattlingdebtscrashingiron-orepricesandtheEbolaoutbreakinAfrica.ItoperatesasmallmineinSierraLeoneoneoftheworstaffectedAfricannationbyEbolaThemineeventhoughproducedhighgradeiron-oreisexpensivetorun.EspeciallyaftertheEbolaoutbreakcargoshipschargeanextra2atonnefordockinginFreetownSierraLeonescapi-tal.Foundedin1952theJindalGroupisengagedindiverseportfolioofbusinesseswhichhaveachievedrapidgrowthovertheyears.Thegroupisnowforayingintoalliedaswellasdiverseareasthatwillfurtherstrengthenitspositionasleaderofthefuture. www.indiaincorporated.com55November2014SECTORFOCUS-AviationBharatForgestrikesFrenchaerospacedealThisinvolvesthesupplyofhighintegrityforgedandmachinedcomponentsforcommercialaircraftapplicationsofSafransglobalafliates.Indiashightechcomponentsman-ufacturerhasclinchedadealwithFrenchaerospacegiantSafran.Thelong-termagreementinvolvesthesupplyofhighintegrityforgedandmachinedcomponentsforcommercialaircraftapplicationsofSafransglobalafliates.Thecompanieshavebeenworkingtogetherforthepast18monthsonademonstra-torphaseforthetrialproductionofcriticalforgingsinseveralmaterialsforaerospace.Thesematerialsincludetitaniumnickel-basedandsteelalloys.Thelatestagree-mentwillfacilitateSafrantoexploreopportunitiesandexpanditsreachinIndianaerospaceacrosscivilandmilitarysectors.B.N.KalyanichairmanandmanagingdirectorofBharatForgesaidThepartnershiphighlightsourunwaveringcommitmenttoaddtangiblevaluetothevastopportunitiesofferedbytheIndianaerospacesectorandconrmsourresolvetostrengtheningourpartner-shipforsupplyingforgedcomponentstoSafransglobalafliatenetwork.Therststepofthepartnershipin-volvesaPurchaseOrderissuedbySafran.StephaneLauretCEOofSafranIndiaPrivateLim-itedaddedThislatestdevelop-mentreectsourtwocompaniescommitmenttoexpandingourcollaborationforthebenetofourcustomersinIndiaandabroad.Pune-headquar-teredBharatForgeistheagshipcompanyofthe2.5-billionKalyaniGroup. INDIAGLOBALBUSINESS56November2014SECTORFOCUS-AviationIndigotobuy250Airbusplanesfor25billionIndiaslargestairlineIndiGowillbuy250newAirbusA320neoplanestoexpanditsoperationsinIndiaandabroad.Thisisthesinglelargestorderintermsofnumberofplanesintheworldandat25billionamongthevelargestbyvalue.Therstoftheseaircraftwillbedeliv-eredin2018.TheorderisexpectedtoaddorhelpsaveseveralhundredjobsinFranceandotherpartsofEurope.TheadditionalaircraftwillenableustocontinuetobringourlowfaresandcourteoushasslefreeservicetomorecustomersandmarketsandwillcreatemorejobopportunitiesandgrowthAdi-tyaGhoshIndiGochiefwasquotedassaying.Indigohassince2006whenitbeganoperationsplacedorderfor280planesofwhichithasalreadytakendeliveryofmorethan80.ThecompanytheonlyprotableairlineinIndiaisbelievedtobepreparingforaninitialpublicofferIPOsometimeinthenearfuture.Theseplaneswillhelpustoplanalong-termandsustainablefutureforourcompany.Primarilytheywillbeusedforourownoperations.Ofcoursesomewillbeusedforreplacementbutlargelytheseplaneswillhelpuspenetratefurtherintotheun-der-utilisedIndiancivilaviationmar-ketGhoshtoldanancialdaily.Indigowhichhasamarketshareof31percentinthedomesticIndianaviationmarketwilluseamixofdebtandsale-and-lease-backtonancethedeal.Undersaleandleasebackacompanybuysanassetthensellsittoaleasingrmthusfreeinguptheinvestedcapitalandthenleasesbacktheassetinthiscasetheplanesforcommercialuse.IndigosaimistoexpanditsoperationsinIndiaandabroad www.indiaincorporated.com57November2014CiplatosetupplantinIranLupincompletesMexicobuyMumbai-basedpharmaceuticalmajorCiplawillbeopeningamanufacturingplantinIran.CiplahassignedadenitiveagreementwithitsexistingdistributorinIrantosetupthemanufacturingfacilitytowhichitwillcontribute36.52millionoverthenextthreeyears.Thecontributionwillincludemachineryequipmentandtechnicalknow-howandCiplawillholda75percentstakeinthejointventure.Theproposedinvestmentissubjecttoapplicableregulatoryapprovals.Foundedin1935Ciplahas34manufacturingunitsineightlocationsacrossIndiaandhasapresencein170countries.Itprimarilydevelopstherapeuticstotreatcardio-vasculardiseasearthritisdiabetesweightcontrolanddepressionothermedicalconditions.Almost48percentofitsrevenuesarefromexportsforthenancialyear2013-14.CiplaisintheprocessofexpandingitsbusinessintootherAsiancountries.RecentlythepharmacompanyhadacquireddistributionrmsinSriLankaandYemen.IndiandrugmajorLupinhascompletedtheacquisitionofMexicosLaboratoriesGrinaleadingplayerinophthalmicproducts.UndertheagreementLabGrinisnowawholly-ownedsubsidiaryoftheMumbai-basedpharmacompany.TheacquisitionmarksLupinsforayintothehighgrowthMexicanandthelargerLatinAmericanLATAMpharmaceuticalsmarketLupinsaidinastatementannouncingtheacquisitionearlierthisyear.Thenancialdetailsofthesaleremainundisclosed.Incorporatedin1955Grinisaspecialitypharmaceuticalcompanyengagedinthedevelopmentmanufacturingandcommercialisationofbrandedophthalmicproducts.NEWSINBRIEF INDIAGLOBALBUSINESS58November2014IndiahasturnedacornerIndiaInc.InterviewIndianentrepreneurSanjivMehtahadboughtovertheEastIndiaCompanybrandbackin2005toreclaimitfromitsrootsintheBritishEmpire.TherenewedluxurybrandlauncheditsrstagshipstoreintheheartofLondonin2010andhassincebeenonapathtowardsestablishingitsglobalpresence.TheEastIndiaCompanydatesbacktothedaysofaroyalcharterin1600whichgaveitamonopolyonEnglishtradetoAsiaandinitsnewavatarthermclaimstocapitaliseonthatsamespiritofadventurecuriosityanddiscovery.Adealvaluedataround82millionsignedthisweekwithAbuDhabibasedLuluGroupisbeingpeggedasitsnextphaseofaccel-eratedgrowthacrossEuropetheFarEastandeventuallytheUS.IndiaalsofeaturesheavilyintheLondon-basedbusinessmansschemeofthingswithanannouncementsetfor2015.IndiaInc.caughtupwiththechairmanandCEOofEastIndiaCompanytondoutmoreaboutthisUK-basedIndianbrandsglobalight.QWhatdoesthedealwiththeLuluGroupmeanfortheEastIndiaCompanyItmarksaninterestingmilestoneinourjourney.WedecidedthatournextstrategicstepshouldbetoinviteabigoperatingbusinesshouseoutoftheMiddleEast.INTERVIEW www.indiaincorporated.com59November2014Weprefertoinvitestrategicsharehold-ersfromdifferentpartsoftheworldwhobringtherespectiveconnectivitybankwiththem.Alsotheyarenotthosepeoplewhoarelookingtoenteronlyfornancialreturnandseekanexitwhichtraditionalprivateequityfundswilldo.WewantwhatwedescribeasjourneypartnersthepeoplewiththesameenthusiasmanddesiretomakeabrandlikeEastIndiaCompanybigwhichisalong-terminvestment.Butalsotheyhavethepassionandthevisiontoalignwithourpassionandourvisionanditsnoteasytogetthemasthekindofresourcesweseekarenotsmall.WearefortunatethatYusuffAlithechairmanofLuluInternationalsignedadealwithustoinvestsubstantialmoneyinournefoodbusinessaswellastheparentcompany.Ourinterestsarecom-pletelyalignedandtheyhavetaken10percentstakeintheholdingcompanyand40percentstakeinournefoodcompany.QHowdidthisjourneybeginWehadstartedthecompanyin2005andlaunchedourstorein2010.On15thAugustIndiasIndependenceDayweopenedthedoorsofEastIndiaCompa-nyintheheartofLondon.ThecompanyonceruledIndiaandnowwewantedtoownthiscompany.SincethenweinvitedAnandMahindratotakeanequitystakeinthebusiness.InJanuary2011MahindratookasmallstakeinthebusinessthatallowedusagreatrelationshipbackintheIndiansub-continent.Alsothecorporategover-nancetheconnectivitythetrackrecordandofcoursethemoneyallofthatwereveryuseful.Mahindracamewithaverysolidsupportforus.Theyhadanoptiontoacquiresomemoresharesandshowedtheircondenceinusandourmanagementandtheyexercisedtheiroptionafterthreeyears.QHowhasthegrowthtrajectoryofthefrmdevelopedsinceitslaunchOvertheperiodwegrewveryveryfastwithintheUKandwentglobal.WenowhavestoresintheMiddleEastandmostofthemajorcapitalsacrosstheGCC.WeareinJapanAustraliaSingaporeMalaysiaKoreaHongKongChinaourproductsareallovertheplacewearealsoinGermanytheNetherlandsandFrance.MostkeymarketplacesintheEastofEnglandwehaveestablishedourpres-enceandhopefullyinthenexttwo-threeyearswewillgoacrosstheAtlantic.Therearestillhugeopportunitiestogrowintheexistingmarkets.Wearestillintheveryearlystagesofourbusiness.QHowdoyouseethefuturemappingoutApartfromnefoodtheholdingcompa-nyalsoownslargenumberofbusiness-esrestaurantsgoldandsilverjewel-leryrealestateandwearelaunchingabusinessoffashionaccessories.Sowebelieveinalloftheseproductverticalswewillneedcapitalandwewillneedchannelstothemarketwewillneedmanagementbandwidthandconnectivity.SometimeswhenyouwanttoreachINTERVIEW INDIAGLOBALBUSINESS60November2014higherplacesitsbettertositonanothermansshoulderthantrytoclimb.Wewishtogrowfastandtopunchbeyondourweightwedenitelyneedstrongpartnershipswithcompaniesandindivid-ualswhohavedeeppocketscommon-alityofvisionandcomefromdifferentpartsoftheworldsobringcomplementa-rystrengthstoourbalancesheetwhichisnotjustmoneybutintellectualcapitalorcollectivewisdomwhichiswhatreallymakesabusinessstrong.WebelievethatwithMahindrainIndiaandLulluintheMiddleEastwehaveachievedourrstphaseofthatengage-ment.EastIndiaCompanywasalwaysonewhichbuiltthefootprintsoftheEmpireandlateronbecametheCommonwealthsowebelievethatweshouldinviteappropriatestakeholderstojoinourjourney.AstimegoesbywewillinviteinvestorswhoarebusinessleadersfromtheFarEastandUnitedStatesaswegoalongforthenext10years.QWheredoesIndiaftintotheseglobalplansOurplansasfarasbusinessinIndiaisconcernedistostartlookingatvariousaspects.Wearealreadyworkingonafewprojectsweareopeningarestau-rantandaluxurydevelopmentproject.Wewillhopefullyannouncein2015itsallbeingnegotiatedjustnow.WithModiatitshelmIdenitelyhaveaverystrongpositiveviewonthegrowthofIndiaandIdofeelthatIndiahasturneditscorner.IhavehugerespectforhimbothinthesimplicityofhisgovernanceaswellasthespeedofhisgovernancenotonlydoeshehaveagreattrackrecordinGujaratbutalsoasahumanbeing.Havingsaidthatitisafunctionoftime.Itsalargecountrywithdeep-rootedissuesanddeep-rootedopinion.There-forewhileitisontherightpathitwilltaketimeforIndiatoachieveitstrulyjustiedglory.INTERVIEW www.indiaincorporated.com61November2014NEWSINBRIEFWorldBankpositiveonIndiaGDPIndiacoalventureinAfricainvestIndiasgrossdomesticproductGDPislikelytoexpandby5.6percentthisnancialyearasreformsgainmomentumaccordingtotheWorldBank.ThegrowthisexpectedtoaccelerateasproposedmeasuressuchasthegoodsandservicestaxGSTgiveaboosttomanufacturingandinthefollowingyearsGDPgrowthislikelytorisefurtherto6.4percentand7percentinFY16andFY17respec-tivelyitslatestreportadded.DenisMedvedevSeniorCountryEconomistWorldBankIndiasaidImplementingtheGSTwilltransformIndiaintoacommonmarketeliminateinefcienttaxcascadingandgoalongwayinboostingthemanufacturingsector.Thetransformationalimpactofreformparticularlyifenhancedbyasystematicdis-mantlingofinter-statecheckpostscandramaticallyboostcompetitivenessandhelpoffsetbothdomesticandexternalriskstotheoutlook.Growthhasalreadyshownsignsofsignicantimprovementduetostrongindustrialrecovery.Indiasstate-ownedSpecialPurposeVehicleInternationalCoalVenturesPrivateLimit-edICVLplansbiginvestmentstocreatelogisticsandotherinfrastructuresupportafteracquiringcoalminesinMozambique.Thecompanyproposestoinvestaround500millioninthenexttwo-threeyearsatthefacilitytotacklelogisticsissues.Theminesneedcreationofabout500-kmrailwaylinesandportsandlackofproperinfrastructureisresultingincashlossesforthecom-pany.ICVLisalsolookingtoappointafull-timeofcialwithexperienceincoalminingtoheadtheoperationoftheMozambiqueminesandturnthemintoaprotableventure.InvestorsofICVLSteelAuthorityofIndiaLimitedCoalIndiaLimitedRashtriyaIspatNigamLimitedNTPCLimitedandNMDCLimitedwillbefundingtheproposedinvestment. Softbanktoinvest10billioninIndiaPrimeMinisterNarendraModisinitiativetoattractforeigninvestmentintoIndiareceivedhugethumbsupfromSoftbankchairmanMayaoshiSonwhocommitted10billionoverthenextfewyears.PrimeMinisterNarendraModisini-tiativetoattractforeigninvestmentintoIndiareceivedhugethumbsupfromSoftbankchairmanMayaoshiSonwhocommitted10billionoverthenextfewyears.Thisispartofthe35billioninvestmentthatJapanesecompanieshaveagreedtoinvestinIndiafollowingModisvisittoTokyoinAugustandisthelargestsingleinvestmentcommitmentafterSouthKo-reansteelgiantPoscosmuchdelayed12-billionsteelprojectintheeasternIndianstateofOdisha.TheinvestmentswillowintoIndiasITe-commerceandtelecomsectors.OnMondaySoftbankwalkedpartofthetalkbyagreeingtoinvestinSnapdeal.comIndiassecond-largeste-commercecom-pany.Anannouncementtothiseffectislikelyshortly.Sonwhoisworth19.7billionandisJapansrichestmaniscurrentlyinIndiaandmetModiandtelecomministerRaviShankarPrasadonMonday.MrSontodayassuredtheministerINOTHERNEWSPrasadthatSoftbankwouldliketoinvest10billioninIndiainthecomingyears.HeplaceditonrecordthatIndiaisthetopmostpriorityforSoftbankanofcialstatementsaid.CEOofSoftbankMrMayaoshiSonmetmetodayMonday.HeexpressedgreatoptimisminIndiaschangedinvestmentclimateandintheleadershipofPrimeMinisterShriNarendraModiPrasadlaterpostedonFacebook.SoftbankwhichwasanearlyinvestorinChinasAlibabaisconsideredoneoftheworldssavviestinvestorsandhispublicvoteofcondenceinIndiasinvestmentclimateisexpectedtoboostIndiasimageasanattractiveinvestmentdestinationandconvincefencesittersthatthiscountrynowunderanewandbusiness-friendlygovernmentisonceagainopenforbusiness.ItisalsoexpectedtopavethewayforgreatervolumesofJapaneseinvestmentsinIndiasinfrastructureandmanufacturingsectorsandboostModisMakeinIndiainitiative. 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