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www.indiaincorporated.comINDIAGLBALBUSINESSOnlinePrintEventsPublishedbyOctober2014IndiasoutboundinvestmentmagazineHOTSPOTModilaunchesMakeinIndiaInitiativeMarsmissionprovesIndianjugaadSECTORFOCUSPage6Page8India-USSaathSaathModiObamawrapupreneweddealPage14OPINIONCNNinterview-Modiseven-handedforeignpolicyPage10 CuratedNewsViews.ExclusiveIn-DepthAnalysis.ContributionsromIndianGlobalInfuencers.TheIndiaUSPartnershipHubOnlinePrintEventsProducedbyInAssociationwithMediapartnerwww.usa.indiaincorporated.com www.indiaincorporated.comPUTTINGITINCONTEXTModicomfortableonthebigstageSoonaftertheIndiangeneralelectionsinMayIwasinvitedtoWashingtonbytheUSIndiaBusinessCounciltospeakaboutthepost-electionscenarioandwhattheModigovernmentwouldmeanforUS-Indiarelations.ThespeakerbeforemydiscussionwasaseniorofcialfromtheUSTradeDepartment.Theofcialwasspeakingoff-therecordbutnonethelessreeledoffalonglistofcomplaintstheUShadaboutIndia-fromIPRrightstothearchaiclegalsystemtoforeigndirectinvestmentFDIinretail.Iobjected.IdidsonotonthebasisthattheUSshouldnotberaisingsuchissues.Ithaseveryrighttodoso.ButbecauseIfeltthetimingwaswrong.Andindiplomacytimingiseverything.IndiaandtheUShadinthepastveyearsplummetedtothelowestebbintheirrelationsinaverylongtime.ThefactthatManmohanSinghwasnottalkingwasnothingnew.Thefactthatthetwogovernmentswerepracticallydisengagedoneveryissuewaswhollyunhelpful.Ithereforecautionedtheofcialthatthiswasnotthetimetotalkupdifferencesitwasthetimetobetalkingaboutallthatunitedthetwogreatdemocracies.Itwasatimetobuildrelationstolearntounderstandandtoappreciate.TheUShadseenModiastheproblembefore16May2014.IposedthequestionCouldtheUSnowdigdeeperandviewhimasthesolutionThoughtheUSisIndiaslargesttradingpartneritisstillafthofthesizeoftheUS-Chinatraderelationship.Minusculeincomparisontothepotential.ModisquickacceptanceoftheObamainvitationwascriticisedbymanyespeciallyinIndia.GiventhevisaissuethehawksarguedthatModishouldhavelettheUSsweatwhilsthebuiltbridgesintheEast.Thatwouldhaveinmyviewbeenimmature.AndModiiscertainlynotimmature.InfactthestatesmanshipwithofcourseabitofshowmanshipthrowninfromthemomentModilandedonUSsoildemonstratedthathewascomfortableonthebigstagehewasincontrolandwouldgetdowntobusiness.TheUSadministrationrightlyreciprocated.Inthisissuewebringtogetherallthevariousstrandsintheleaduptothevisitaswellasthehighlightsduringit.ThekeythemethatresonatesisModisMakeinIndiainitiative.TheObama-ModiChaleinSaathSaathisanalysedasalsoisthemegaperformanceatMadisonSquareGarden.ItwashopedthisvisitwouldmakehistoryandthiseditionofIndiaGlobalBusinessbringsyouthathistoryinanutshell.ManojLadwaPublisherCEOIndiaInc. IndiaIncsIGBisamonthlye-magazinedocumentingIndianinvestmentfowsacrosstheglobe.Itcollatesthebigheadlinesothepastmonthtopresentabroadpictureoacountryswitchinggearstomoveintotheastlaneodevelopment.CONTENTSModiObamawrapupreneweddealPage14ManofactionsetsrmdeadlinesfornewIndiaModilaunchesMakeinIndiainitiativePage16Page6SPECIALREPORTSECTORFOCUSHOTSPOTANALYSISTECHINNOVATIONPHARMA11ModilandsinAmericawithastableoutlook21Anindia-USSummitonlevelfooting34NewregulatoryregimeforIndianPharmasectorcouldboostcompetitivenessENERGYAUTO41NosurpriseenergyistakingcentrestageinModiGovernment56TataJLRdrivesinnewbabyJaguarINDIAGLOBALBUSINESS26ModigunsfornukecoalitioninUS38Indiasizeabledefencespending-anopportunityforforeignandIndianrm8MarsmissionprovesIndianjugaadFINANCE60IndianbankbranchesunderUKscanner www.indiaincorporated.comChiefExecutiveManojLadwaSeniorEditorAditiKhannaChiefOperatingOfcerShamitGhoshEventsManagerDinaLadwaSalesAdvertisingJenniferFrancisOperationsDesignRajviSinghiProjectCoordinationNomitaShahDigitalMarketingExecutiveDarshanKhantGraphicDesignerAnkurSaxenaIndiaIncLimitedallrightsreserved.Reproductioninwholeorinpartwithoutourwrittenpermissionisprohibited.ViewsexpressedbyourcontributorsaretheirownanddonotnecessarilyrepresenttheviewspoliciesofIndiaInc.WhileeveryeffortismadetoachievetotalaccuracyIndiaInccannotbeheldresponsibleforanyerrorsoromissions.www.indiaincorporated.comOnlinePrintEventsINTERVIEWCHINAFOCUSINDIAPOLICY52Indiagetstoughonstrandedforeigngoods54Indiacutsbackrelianceonforeigndebt47MinistervisitproveclosetiesIndiaIncInterview49ChinatocomeknockingwithbilliontoinvestINOTHERNEWS19LesshypemoreactionshoulddeneUSVisit51Indiasdisinvestmentplansontheroll62Cognizantbuystrizettofor2.7billion25TatatobuilddefencenavigatorinIndia58BadGovernancereasonforIndiasslidedownCompetitiveIndexGloballyGUESTCOLUMN31MarketingtimeinplaceWhyUSimmigrationreformhasstalledwhatIndiacandotohelpgetitmovingagainbyWilliamPCook43Enablingnuclearco-operationwithJapanUSAbyRakeshSood45BuildingtrustbetweenIndiaandUSbyRajivKumarOPINION10CNNinterview-Modiseven-handedforeignpolicy October20146INDIAGLOBALBUSINESSHOTSPOTModilaunchesMakeinIndiainitiativeIndianPrimeMinisterNarendraModion25thSeptember2014launchedhismuchanticipatedMakeinIndiainitiativeinNewDelhiwhichcouldturnIndiaintoaglobalmanufacturinghub.Theplaninvolvescuttingredtapeallowingcompaniesandindividualstoselfcertifydocumentsandstatementseasinglabourlawstomakeiteasierforcompaniestohireandfreworkershirecontractlabourandopeningasinglewindowfortimeboundclearancesofinvestmentproposals.Rigidlabourlawsanadversarialtaxregimetimeconsumingclearanceproceduresandotherbottlenecksdiscourageallbutthemostintrepidinvestors.Thegovernmenthassetupadedicatedwebsitewww.makeinindia.comwhichlists25thrustindustriessuchasautomobilesautocomponentstextilesconstructionchemicalsdefencemanufacturingleathertourismaviationandbiotechamongotherstoguidepotentialinvestors.Thewebsiteprovidesbasicinformationofalltheseindustries.Ifpotentialinvestorswantfurthercustomisedinformationitwillbeprovidedwithin72hours.WetrusteachandeveryIndianandeveryinvestor.CreatingsuchanenvironmentcanchangealotofthingsModitoldagatheringintheCapitalsVigyanBhavanauditoriuminthepresenceofleadingindustrialistsMukeshAmbanichairmanofRelianceWetrusteachandeveryIndianandeveryinvestorNarendraModiPrimeMinisterofIndia www.indiaincorporated.comOctober20147HOTSPOTIndustrieswhowasrankedbyForbesasIndiasrichestmanwithanetworthof23billionCyrusMistrychairmanofthe133-billionTataGroupAzimPremjichairmanofIndiasthird-largestsoftwareexporterAzimPremjiKenichiAyukawamanagingdirectorofMarutiSuzukiandmanyhundredothers.Thespeechwasalsobeamedlivetogatheringsofbusinessleadersinmanycountries.ThethinkingbehindtheinitiativeistoremovethebottlenecksandpainpointsthatdeterinvestorsandpositionIndiaasanalternativeinvestmentdestinationforWesternandJapaneseMNCsthatarelookingtodiversifytheirrisksawayfromChina.ThoughthewesternmediaoftenclubsIndiaandChinatogetherwhentalkingoftheeconomicchallengeposedbylargeemergingmarketeconomiesIndiahasfordecadeslivedintheshadowofChinassteroid-chargedgrowthratesandthehundredsofbilliondollarsofforeigninvestmentthatowsintothatcountry.ModirodetopowerinMaywinninganoverwhelmingmandateonthebackofapromisetoxIndiaslong-stagnanteconomyandprovidejobstothearmyof12-15millionyouthwhoentertheworkforceeveryyear.Themanufacturingsectorwhichaccountsforapoor15percentofIndiaseconomyhastoplayamajorroleifsomanynewjobshavetobecreated.Thegovernmenthassetatargetofincreasingtheshareofmanufacturingto25percentoftheeconomy.Aboosttomanufacturingwillcreatejobsandgivepoorpeoplegreaterpurchasingpowerleadingtohigherlevelsofconsumptionandcreatealargermarketwhichmanufacturerswillservice.ThiswillcreatevirtuouscycleofgrowthandjobsModisaid. 8INDIAGLOBALBUSINESSSPECIALREPORTOctober2014Indiacreatedhistorybysuccessullyplacingitslow-costMarsspacecrafintoorbit.MarsmissionprovesIndianjugaadItispossiblythemosthigh-proleexampleofIndianjugaadatworkasthecountrycreatedhistorybysuccessfullyplacingitslow-costMarsspacecraftintoorbit.NotonlydidtheMangalayaansatelliteaccomplishthefeatatitsrstattemptbutalsoatafractionofthecostat74millionnearlyone-tenthofNASAsMavenbudget.InthewordsofIndianSpaceResearchOrganisationISROchiefK.RadhakrishnantheMarsOrbiterMissionbecamethecheapestinterplanetarymissionevertobeundertakenbytheworld.JugaadaveryquintessentialIndiantraitreferstotheabilitytoinnovatewithinextremelyfrugalandexiblescenarios.IthasalreadycaughttheattentionoftheWestandtheMarsmissionwillprovetobeoneoftheclassicexamplesoftheconceptatworkinaglobalcontext.Theoddswerestackedagainstus.Of51missionsattemptedintheworldonly21havesucceeded.WehaveprevailedsaidIndianPrimeMinisterNarendraModifromthemissioncontrolcentreinBangalore.HeaddedWehavegonebeyondtheboundariesofhumanenterpriseandinnovation.Wehavenavigatedourcraftthrougharouteknowntoveryfew. www.indiaincorporated.comSPECIALREPORT9October2014OnlytheUSEuropeandRussiahavepreviouslysentmissionstoMarsandmorethanhalftheworldspreviousattempts23outof41missionshavefailedincludingonebyJapanin1999.TheMangalyaanroboticprobewillnowbeginworkstudyingtheRedPlanetsatmosphere.A24-minuteengineburnslowedtheprobedownenoughtoallowittobecapturedbyMarsgravity.TheIndiancraftwillcircleMarsforuptosixmonths.Itiscarryingvesolar-poweredinstrumentstogatherdataaboutMarsitsweathersystemsandchemistry.OfparticularinterestwillbeteststotryandcheckforthepresenceofmethaneasignthatMarsmayoncehavebornelife.ButbeyondthescienticrealmthemissioncomesasaboldsignofwhatmodernIndiahastooffertheworldasitestablishesabiggerpresenceinthe200-billionspacetechnologymarket.TeMarsOrbiterMissionbecamethecheapestinterplanetarymissionevertobeundertakenbytheworld.KRadhakrishnanIndianSpaceResearchOrganisationISROchiefItispossiblythemosthigh-proleexampleofIndianjugaadatworkasthecountrycreatedhistorybysuccessfullyplacingitslow-costMarsspacecraftintoorbit. INDIAGLOBALBUSINESSOPINION10ManojLadwaisthefounderofIndiaIncandchiefexecutiveofMLSChaseGroupCNNinterview-Modiseven-handedforeignpolicyWearenotlivingintheeighteenthcenturyIndianPrimeMinisterNarendraModitoldFaridZakariainhisrstinterviewsinceassumingofce.HesaiditinthecontextofChinasaggressivebehaviourwithitsneighboursbutitencapsulatedhisvisionasitemergedintheinterview.ModiwantstolookaheadoneconomicdevelopmentonempoweringwomenonrelationswithChinaandonastrategicalliancewiththeUnitedStatesofAmerica.Thishasbeentherunningthemeofhisstillyoungbuthyperactivegovernment.Thepasthesuggestedcanprovidepointerstothefuturebutcannotholdithostage.MuchtotheconsternationofhiscriticsModisspeecheshavebeenstatesman-likeandforwardlooking.LookathisanswersonChinaHedidnotoncementionthedistrustthatamajorityofIndiansharbourforournorthernneighbour.InsteadhespokeofwhyhethinksIndiawillriseagainnotasacloneofChinabutasanentityinitsownrightonthebackoftheentrepreneurialtalentofits1.25billionpeople.OntheUStoohedisplayednorancouratbeingdeniedavisaforalltheseyears.InsteadhesaidanemphaticyestoZakariasquestiononwhetherIndiaandtheUScandevelopagenuinestrategicalliance.Indiaisacountrywithathousandpotentialfaultlines.Everyoneofthemcanpotentiallytearthecountryasunder.Butdespitecalamitouspredictionsofimminentdoomthecountryhasstayedtogetherandprospered.Thereasonforthathasbeenasharedoptimismaboutthefuture.ItisthisspiritofoptimismthatModisforwardlookingvisionrepresents.TheminutiaeofeachresponsetoZakariasquestionsarenotimportant.Whatcountsisthatinlookingaheadwithoutrancourorbaggageheisonthesamepageasthepeoplewhoelectedhim.AnditisthisconnectararityintodayspoliticswhichaugurswellforIndia.Thishasbeentherunningthemeofhisstillyoungbuthyperactivegovernment.Thepasthesuggestedcanprovidepointerstothefuturebutcannotholdithostage.October2014 www.indiaincorporated.comSPECIALREPORT11ModilandsinAmericawithastableoutlookOctober2014SPsaidithadrevisedtheoutlookasitexpectsGDPgrowthtopickupfurther.TherewasgoodnewsforPrimeMinisterNarendraModiashelandedinNewYork.RatingagencyStandardPoorsSPon26thSeptember2014upgradedIndiasoutlooktostablefromnegativemarkingtherstinternationalendorsementofthefour-month-oldNationalDemocraticAlliancegovernmentsmovestoputthesputteringIndianeconomybackontrack.ExplainingitsdecisionSPsaidithadrevisedtheoutlookasitexpectsGDPgrowthtopickupfurther.Afterslowingtoamorethantwo-decadelowofsub-5percentin2012-13and2013-14growthpickeduptoanencouraging5.7percentintherstquarterApril-June2014.SPalsosaiditwillconsiderrevisingIndiassovereignratingwhichatBBB-remainsjustonenotchabovejunkgradeifgrowthpicksupabove5.5percentwhichseemsverylikelyandthescaldecitremainsincheck.TheSPmoveislikelytoreassurebusinessmenintheUSEUandJapanwhohadalmostwrittenoffIndiathatthiscountryisonceagainopenforbusinessandwillstrengthenModishandswhenhepitchesIndiaasaviablealternativetoChinaasaninvestmentdestination.ThisisadramaticchangefromthesituationprevailingafewmonthsagowheninternationalratingagenciesworriedbytheageneraldriftintheadministrationandthepreviousUPAgovernmentsapparentlackofcommitmenttotheeconomyandrepeatedlywarnedaboutapossibleratingsdowngradetojunklevels.ButsincethenaseriesofproactivemeasuresbythegovernmentsuchascurbsongoldimportsthatbroughtthecurrentaccountdecitundercontrolandfortuitouseventslikefallingcrudepriceshaveraisedhopesthatIndiasmacro-economicsituationwillremainundercontrol. www.indiaincorporated.comINDIA-USRECAPLikeeverypartnershiptheridehasbeenanythingbutsmoothfortheIndia-USrelationship.DisputesoverprotectionismandintellectualpropertyrightsIPRhaveoftenmuddiedthewatersforbusinessengagementanddiplomaticspatshaveovershadowedanyprogress.Herewetakealook-backattherockyrelationshipthatisnowgraduallyfndingitswaytowardsamorelevelfooting.WestartatthehistoricsummitbetweenIndianPMModiandUSPresidentObamaandtracebacktoallthepreparationsthatwentintoensuringthesuccessofthisvisit. INDIAGLOBALBUSINESS14October2014INDIA-USRECAPWealreadyhavethefoundationofastrongpartnership.Wenowhavetorevivethemomentumandensurethatwegetthebestoutofitforourpeopleandfortheworld.ModiObamawrapupreneweddealNarendraModisrstofcialvisittotheUSasIndianPrimeMinisterhadalotridingonitintermsofsettingthetoneforthefuture.Theoutcomehasbeenhailedasanall-roundsuccessstorywiththetwocountriesstrikingareneweddealacrossallsectorsofpotentialcollaboration.ThenewmantrafortheIndia-USrelationshipemergedasChaleinSaathSaathForwardTogetherWeGo.AsUSPresidentBarackObamaandModiwroteintheirjointarticleforTheWashingtonPostThetruepotentialofourrelationshiphasyettobefullyrealised.TheirmeetingattheOvalOfcewaswide-rangingwherethetwoleaderstouchedupontradepolicycounter-terrorismenergydevelopmenthealthpolicyandspaceexploration.ModisaidWealreadyhavethefoundationofastrongpartnership.Wenowhavetorevivethemomentumandensurethatwegetthebestoutofitforourpeopleandfortheworld.AccordingtoastatementreleasedbythetwoleadersthetwogovernmentscommittedtomeasuresaddressingawiderangeofproblemsrelatedtoclimatechangeandenergysecuritywhileencouragingIndiasembraceofalternativeenergyasittriestomoderniseitseconomyandbringmillionsofitscitizensoutofpoverty.InoneofthemostsignicantinitiativestheObamaadministrationclearedthewayfor1billioninnancingfromthe www.indiaincorporated.com15October2014INDIA-USRECAPUSExport-ImportBanktohelpIndiapurchaseAmericantechnologyforclean-energyprojects.OthermeasureswouldexpandUS-Indiancooperationonimprovingairqualityandenergyefciencyandonhelpingcoastalcitiesprepareforoodingandotherweather-relateddisasters.IndiaUSalsostruckapactonmaritimesecuritytoensurefreedomofnavigationseenasaneffectivecounter-balancetoChina.Therewasalsoanagreementtonegotiatea10-yearextensionofamilitarycooperationframeworkduetoexpireatyear-end.Whilesomemayquestionthelackofmanybig-ticketannouncementsthemessagethatIndiameansbusinessseemstohavegoneoutloudandclear.ModiInAmericaFACTFILEDEALSPLANSMESSAGESHikeIndia-UStrade5-foldPublic-privatedialoguein2015PartnershipforClimateResilienceReformedUNSecurityCouncilUpgradebilateralmaritimeexerciseLifetimevisasforpersonsofIndianoriginPIOsMergerofPIOwithOverseasCitizenofIndiaOCIcardsVisaonarrivalforUStouristsElectronicarrivalauthorisationforUStouristsStabletaxpolicyIndo-USInvestmentInitiativeInfrastructureCollaborationPlatformHigherEducationDialogueIndia-USCEOsForumCivilNuclearCooperationAgreementPartnershiptoAdvanceCleanEnergyPACEEnergySmartCitiesPartnership INDIAGLOBALBUSINESS16October2014ANALYSISManoactionsetsfrmdeadlinesornewIndiaLongyearsagowemadeatrystwithdestinyandnowthetimecomeswhenweshallredeemourpledgenotwhollyorinfullmeasurebutverysubstantially.AtthestrokeofthemidnighthourwhentheworldsleepsIndiawillawaketolifeandfreedom.AmomentcomeswhichcomesbutrarelyinhistorywhenwestepoutfromtheoldtothenewthenanageendsandwhenthesoulofanationlongsuppressedndsutterancePanditJawaharlalNehrussoulstirringspeechasIndiawonfreedomatmidnightreduptheimaginationofapeoplelongusedtoservitudeandsecondclasstreatment.ThatpromiseandenthusiasmoftheearlyyearsofIndependencesoondissipatedintothedrearysandsofdeadhabit.PrimeMinisterNarendraModisspeechatNewYorksMadisonSquareGardenonSundaypromisestorevivethatspiritofpioneeringresurgencethatcantakeIndiafromtheperipheriesoftheglobalpowerequationtoitshightable.Thetwomencouldntbemorefarapart.IndiasrstPrimeMinisterwasanaristocratapatricianwithaprivilegedupbringingwhowasequallyathomediscussingthenuancesofphilosophyLongyearsagowemadeatrystwithdestinyandnowthetimecomeswhenweshallredeemourpledge... www.indiaincorporated.com17October2014ANALYSISandliteraturewiththeworldsleadingintellectualsashewaswipingthetearsofmillionsofhisstrugglingstrivingfellowIndians.ModiontheotherhandisthesonofateasellerwhocameupthehardwayinapoliticalpartywhosephilosophycouldntbemoredifferentfromthatofNehrusCongress.Butpeelawaythesuperciallayersandyoullnduncannysimilarities.Botharemenofaction.Bothwereelectedtohighofcewiththepromisetodeliverthecommonmanfromdailydoseofdrudgery.AndbothhaveheartsthatbeatforIndia.Asin1947ModisascensiontotheofceofthePrimeMinisterhasonceagaingivenordinarypeoplethehopethatIndiacanriseabovethesumofitsmanydysfunctionalpartstoaleadershippositionintheworld.Sentimentandcondencebothintangibleareoftennotaccordedtheimportancetheydeserveperhapsbecausetheycantbequantiedonaspreadsheet.ButgoingbyearlyreactionsbothonsocialmediaandintherealworldModisaddresstotheworldbystressingonthecandospiritoftheordinaryIndianrecallsthespiritaspirationandachievementthatdroveIndiasearlyyearsofindustrializationspaceexplorationnuclearresearch.JustreadthefollowingextractfromNehrusspeechallthosedecadesagoThatfutureisnotoneofeaseorrestingbutofincessantstrivingsothatwemightfulllthepledgeswehavesooftentakenandtheoneweshalltaketoday.TheserviceofIndiameanstheserviceofthemillionswhosuffer.Itmeanstheendingofpovertyandignoranceanddiseaseandinequalityofopportunity.ParaphrasethatsentenceintoearthyHindiandyoulldistiltheessenceofwhatModitoldthecrowdof18000inNewYork.SinceassumingofceModihasprovedhimselftobeamanofvisionamanofactionandgivenhopethatheisalsothemanwhocanbyconcertedactiontranslatehisvisionforaprosperousandpowerfulIndiaintorealitywithinareasonablyshorttimeframe.Heannouncedtwodeadlines2019foracleanIndiainwhicheveryIndianhas INDIAGLOBALBUSINESS18October2014accesstoatoiletand2022bywheneveryIndianwillhavearoofoverhisherhead.ThesearedauntinggoalsbutitisameasureofthecondenceModihasinstilledinIndiansthatthesetargetsarebeingmetnotwiththecynicismoftherecentpastbutwithhopeofabetterfuture.NehruhadsaidonAugust151947Wehavehardworkahead.ThereisnorestingforanyoneofustillweredeemourpledgeinfulltillwemakeallthepeopleofIndiawhatdestinyintendedthemtobe.ReadbetweenthelinesofhisspeechatMadisonSquareGardenandthatispreciselythemessageModisentout.PMModiSpeaksAtMadisonSquareGardenANALYSIS www.indiaincorporated.comINOTHERNEWSLesshypemoreactionshoulddefneUSvisitModiwillinviteUSrmstoinvestuptotrillioninIndiasinfrastructurePrimeMinisterNarendraModiwillinviteUSrmslikeBlackRockGoldmanSachsIBMKKRandotherstoinvestuptotrillioninIndiascreakyinfrastructuresector.ItwasntentirelycoincidentalthathelaunchedhisMakeinIndiainitiativetopermanentlyburytheredtapeandusherinquickerdecisionmakingtomakeIndiacompetitivevis--visrivalinvestmentdestinationssuchasChinaBrazilandSouthEastAsiabeforeleavingfortheUS.ItwillserveasconcreteevidencethathisgovernmentisdeterminedtoimprovethebusinessclimatethatUSandbusinessmenfromothercountriesbitterlycomplainabout.Butforeignpolicyanalystscautionagainsthypingthisvisitandraisingexpectationsbeyondreasonablelimits.Theworldviewsofthetwocountrieshavelessincommonthanwell-wishersoneithersidewant.Geopoliticsisthebigstickingpoint.IndiaisrightfullyconcernedaboutthesituationinAfghanistanandwantsagovernmentthatisatleastnotinimicaltoitsinterests.TheBarrackObamaadministrationhoweverseemsreadytolookattheAfghanproblemthroughPakistanseyes.ThisleadstoaseriousdisconnectbetweenNewDelhiandWashingtonthatalltheplatitudesaboutshareddemocraticandculturalvaluesandpeople-to-peoplecontactscannothide.ThisisafarcryfromthebonhomiethatwasevidentbetweentheworldsoldestandlargestdemocraciesduringthelatterhalfofGeorgeWBushsadministration.InhisblinkeredbutforIndiabenecial INOTHERNEWSworldviewNewDelhiwasruledbythegoodguysandsodeservedAmericanbacking.Sooneshouldntexpecttheso-calledstrategicalliancebetweenthetwocountriestotakeanyconcreteshape.AlsobeingacompletelyfreesocietyandopeneconomytheObamaadministrationdoesnthavethekindofinstitutionalpowerthatsaythegovernmentsofJapanorSouthKoreadotochannelprivateinvestmenttowardsIndia.ForthisModiwillhavetowintheheartsandmindsofthemanyheavyweightAmericanCEOshewillmeetduringhisweeklongvisit.ButthereareissuestheUSgovernmentcanbutisunlikelytoaddress.ForemostamongthemistheissueofvisasforIndiassoftwareprofessionals.ThentherestheissueofretirementbenetsthatIndianprofessionalsonshorttermassignmentstotheUSforegosomeestimatesputthegureatcloseto10billionayearwhentheyreturnhome.IndiawantstheUStoallowIndianstobringthismoneyback.TheUShassatonthisproposalforyears.ThenModiwillalsohavetorevivetieswithIndiasfriendsintheUSCongressandSenate.AdecadeagoIndiaenjoyedtremendouscapitalonCapitolHill.Thislobbywithsomeunofcialhelpfromthepro-IsraelJewishlobbyhadplayedabigroleinadvancingIndo-USrelations.ButaseriesofundeliveredpromisesbythepreviousManmohanSinghgovernmentmostnotablyonareasonablenuclearliabilitylawtoencourageAmericaninvestmentsaswellasgrosslypartisanlobbyingbythepowerfulUSpharmacompaniesagainstIndiasintellectualpropertyrightsregimeandgeneraldisinterestonbothsideshaveemasculatedbothitsmembershipandinuence.SoinsumIndiashouldntexpectanymajorbreakthroughsingovernment-to-governmentbilateraltiesbutifModisucceedsinsellinghisvisionforIndiatoUSInchewillhavelaidthefoundationfortakingtherelationshipbacktotheheadyhighsithadscaledduringtheshort-livedGeorgeWBush-ManmohanSinghbonhomie. www.indiaincorporated.com21SPECIALREPORTModisvisittoWashingtoncouldprovethedefningmomentoranewIndia-USexchangeonanequalooting.AnIndia-USsummitonlevelfootingNarendraModisrstvisittoWashingtonasIndianPrimeMinisterlaterthismonthwillsetthetoneforthefutureofwhathasoftenbeendescribedasanaturalpartnership.Butlikeineverypartnershiptheridehasbeenanythingbutsmooth.DisputesoverprotectionismandintellectualpropertyrightsIPRhavemuddiedthewatersforIndia-USbusinessengagementandthisvisitcouldprovethedeningmomentforanewIndia-USexchangeonanequalfooting.Whilethescheduleforthethree-daytourcoveringNewYorkandWashingtonfromSeptember27isstillbeingnaliseditisexpectedtobepackedwithasmanyas26differentmeetingsinadditiontoaworkinglunchwithUSPresidentBarackObamaattheWhiteHouseandanaddresstotheUnitedNations.TheimportanceplacedbytheUSonthenewengagementhasbeenmadeamplyclearwithasteadystreamofhigh-proleministersyingtoIndiaformeetingswiththeModiadministration.USSecretaryofStateJohnKerrycametostrikeuphisrapportwiththenewteaminplaceinDelhiinJuly.HismessagewasclearTheUnitedStatesandIndiacanandshouldbeindispensablepartnersforthe21stCenturyandthatisIassureyouthewayweapproachtheModigovernment.IndiasnewgovernmenthaswonahistoricmandatetodeliverchangeandreformandtogetherwehaveasingularopportunitytohelpIndiatobeabletomeetthatchallenge.October2014 INDIAGLOBALBUSINESS22SPECIALREPORTOnapersonalnotehewasallpraiseforthenewIndianPMsvisionforIndiaThenewIndiangovernmentplansSabkaSaathSabkaVikastogetherwealldevelopmentforallisavisionthatwewanttosupport.Webelievethistobeagreatvision.InnovationandentrepreneurshipisbothinourDNAWearetwocondentnationsconnectedbycorevaluesoptimisticnationsThiscanbeamomentwhereourdestiniesdoconverge.Buthyperboleasidethetradeguresleavealottobedesired.TheUS-IndiaBusinessCouncilUSIBCfeelsbilateraltradebetweenthecountrieswhichstandsataround100billioncouldquadrupleto500billionmarkoverthenextdecade.DefencecooperationremainsattheheartofthiswithIndiasimportofweaponsfromtheUSsince2007-8addinguptoover10billion.USdefencesecretaryChuckHagelsettheballrollingwithavisitinAugustwhenhepressedforbroadercoordinationinnewweaponsproductionincludingapilotplanforthetwonationstojointlydevelopanext-generationcheaperandlighterJavelinanti-tankmissile.TheUSseemskeentopartnerwithIndiaasitmodernisesitsmilitaryandhasgraspedthechangingtideofexpectationsfromanIndiamoreinterestedinco-developmentopportunitiesthaninsimplybuyingAmerican-madeweapons.HagelspeltoutAmericaswillingnesstomovewiththetimesForbothournationsthechallengeistoseizetheopportunitiesthoseopportunitiesthatarebeforeustoday.Bureaucraticredtapewithineitherofourgovernmentsmustnotboundthelimitsofourpartnershipandinitiatives.HealsowarnedthatthenewIndianregimemayhavetomakeachoicebetweenacloserpartnershipwithAmericaandimprovedtieswithChina.AndifearlyindicationsareanythingtogobytheremayyetbescopeforIndiamovingclosertotheUSalongsideJapantocreateanewIndo-US-Japaneseaxis.ThereforetheballinmanywaysisintheUScourttoprovetothenewIndianadministrationthatwhatisonthecardsisatruepartnership.Abilateralcivilnuclearagreementisalsokeytoanyfutureengagementbetweenthetwonations.USPresidentBarackObamahasalreadyconveyedhisplansforsettinganambitiousnewagendatochartanewcourseintherelationship.ModiinturnhasoutlinedhisownvisionforthepartnershipbetweentheworldstwolargestdemocraciesinaddressingglobalchallengespromotingpeaceandstabilityintheworldandsupportingIndiasowneconomictransformation.Besidestradeandinvestmentcleanenergyinnovationeducationskilldevelopmentagro-processingandDefencecooperationremainsattheheartofthiswithIndiasimportofweaponsfromtheUSsince2007-8addinguptoover10billion.October2014 www.indiaincorporated.com23youthempowermentaresomeofthekeysectorsnarroweddownfortheagendaofthepowersummitbetweenObamaandModi.TheIndianPMhasgoneonrecordwithhisemphasisontheneedfordevelopedcountriestounderstandthechallengesofpovertyindevelopingcountriesandtheirgovernmentsresponsibilitiesinaddressingthemduringdiscussionsininternationalforums.Indiascommitmenttoconfrontterrorismontheprinciplesofzerotolerancewillalsodenetheagenda.Theover-archingmessagecomingoutofIndiaisofadynamiceconomykeenonglobaltradeandinvestmentamessagethattheUSwillndheartening.ModistrackrecordofturningGujaratintooneofIndiasmostinvestor-friendlystatesliesattheheartofexpectationsinthecorridorsofpowerinWashington.Thereisquiteunderstandablythehopethatthesamepro-reformandpre-developmentvisionisnowbeingtransferredontoanationalstage.TheIndianAmericancommunitywithapopulationofmorethan3millionandmakingupapproximately1percentofthetotalUSpopulationhasacrucialroletoplay.IndianAmericansincludealargenumberofprofessionalsbusinessentrepreneursandacademicswithincreasingsphereofinuenceinthesocietyandactasacatalysttoforgecloserandstrongertiesbetweenIndiaandtheUS.The21stcenturyhasseenthedawnofacondentIndiaedgingtowardsadominantpositionontheglobalstageandrelationswiththeUShavemirroredthisgrowingself-condence.TheModi-Obamameetwillundoubtedlygodowninhistorybutwhatwillsetitapartfrompastsummitswillbethefactthatthistimeitwillbetwoequalsmeetingonalevelfooting.SPECIALREPORTOctober2014 INDIAGLOBALBUSINESS24NEWSINBRIEFOctober2014AmazontiesupwithPatelLogisticsUMMotorcyclesinLohiaAutoJVTheworldslargeste-commercecompanyAmazonhastied-upwithPatelIntegratedLogisticsfordeliveriesinIndia.Aspartofitsplantoensurenext-daydeliverytocustomersacrossIndiaAmazonhasenteredintoanaircargoalliancewiththeIndianrmwhichwillberesponsibleformovinggoodsfromoneairporttoanother.OncetheproductsreachtherespectiveairportsAmazonsothervendorssuchasGatiBlueDartandFedExwilldealwiththelast-miledelivery.PatelLogisticswillbesettingupadedicatedteamtoserviceAmazonandhasbegunsecuringexclusivebookingsfromairlinessuchasIndiGoJetAirwaysandSpiceJettoshipAmazonsproductsaheadofthefestiveseason.Indiahasseenamassiveriseinitse-commercebusinessandthedemandfornext-daydeliveriesprovidesamajoropportunityforinternationalretailers.Establishedin1982PatelLogisticsspecialisesinsurfacetransportdoor-to-doorexpresscargoserviceon-boardcouriersandfreightforwarding.ThecompanyalsocoversmarketssuchastheUKKenyaandUgandaaswellastheotherAfricancountries.PopularAmericanbikemanufacturerUMMotorcycleshasenteredintoajointventurewithIndiastwo-wheelermakerLohiaAutotostartafacilitytorolloutnewbikesfortheIndianmarket.AccordingtotheagreementboththepartnerswillhaveanequalstakeinthenewJVrmtobecalledUMLohia.ThemanufacturingunitwillbelocatedatKashipurUttarakhandandproductionisexpectedtostartbythesecondquarterof2015.ItwouldutiliseLohiaAutosfacilitytheretomanufacturenewproducts.Thenewrmwillinitiallytargetthe200-500cccruisersegmentbymanufacturingcruiserbikesandwilllaterfollowitupwithotherproductscateringtosportsandtouringsegments.ThefacilitywillalsobeusedasanexporthubtoservemarketsintheMiddleEastAfricaandAsiaPacicregion.Registeredin2000UMMotorcyclesisknownforitswideproductrangewhichincludessportsbikescruisersandevenscooters. www.indiaincorporated.comTatatobuilddefencenavigatorinIndiaTheTataGrouphassignedanagreementwithUS-basedHoneywellInternationaltoproduceitsTacticalAdvancedInertialNavigatorTALINnavigatorinIndia.INDIA-USRECAPTheTataGrouphassignedanagreementwithUS-basedHoneywellInternationaltoproduceitsTacticalAdvancedInertialNavigatorTALINnavigatorinIndia.HoneywellwilllicensethedesignandhardwaretoassembletestandeventuallybuildtheproductionkitsforthenavigationsysteminIndia.TataPowerCompanyLimitedsdefenceengineeringunitTataPowerSEDclinchedthedealwiththeAmericanmajorduringPrimeMinisterNarendraModisvisit.ItmarksthersttimeIndiahasproducedinertiallandnavigationtechnologyHoneywellsaidinastatement.Indiaastheworldslargestarmsimporteriskeentomoderniseitsarmedforcesbypromotingdomesticindustry.TALINenablesprecisionnavigationforvehiclesandartillerymovementevenwhereGPSsatelliteguidanceislimitedinfar-unganddifcultterrains.Itallowstroop-carryingvehiclesortowedartillerytonavigatethroughremoteregionsandwouldsupportoperationsacrossIndiasmountainsdesertsandforestswheresignalscanbeweak.RahulChaudhrychiefexecutiveatTataPowerSEDsaidinastatementthatthetechnologysharingarrangementwilloffertheIndianArmedForcesastate-of-the-artinertialnavigationtechnologymadeinIndiaandwithlocalproductsupport.ArijitGhoshpresidentforIndiaatHoneywellAerospaceaddedBypartneringwithTataPowerSEDontheproductionofTALINwearealigningwiththegovernmentsaimofincreasinglocally-manufacturedtechnologiesforIndiasdefenseindustryandgivingtheIndianarmedforcesaneasy-to-justifyoptionfornavigationonthe21stcenturybattleeld.ThetwocompaniesplantostartassemblingTALIN2000systeminIndiain2016.TheagreementwouldalsobeextendedtocoverotherversionsoftheTALINrangeofnavigators. INDIAGLOBALBUSINESS26INDIA-USRECAPModigunsfornukecoalitioninUSModiwilltrytorevivethecoalitionofpro-IndianlobbiesPrimeMinisterNarendraModiwilltrytorevivethecoalitionofpro-IndianlobbiesthathelpedconvincetheGeorgeWBushadministrationtosignthenucleardealwithIndiain2008.ThenaconstellationofheavyweightsintheUSfromtheleadersofthePentagontheCongressthepowerfulJewishlobbyCorporateAmericanandprominentnon-residentIndianshadcometogethertopushIndiascasewiththeUSadministration.Sincethenthatcoalitionhasfallenapartforanumberofreasons.TheprimaryreasonisthatIndiastillthenredhoteconomyhasloststeam.Thenanadversarialtaxregimeandthegovernmentgettingintoactivistmodeontheeconomyhavescaredawayforeigninvestors.TheCongresspartysexcessivesensitivitytowardsperceivedMuslimanimositytowardsIsraelmeantthegovernmentstoppedengagingtheJewishlobbyintheUS.TheUSModiwillhaveplantedtheseedsofwarmlong-termtieswiththeUSwithoutthehiccupsandtherollercoastertrajectoryofthelastdecade.October2014 www.indiaincorporated.com27INDIA-USRECAPCongresstooturneditsbackonIndiaaftertheUPAgovernmentenactedanuclearliabilitylawthatwassodraconianthatevenIndiancompanieshavefoughtshyofit.FromtheUSsidethetransactionalquidproquostyleoftheBarrackObamaadministrationmeantthatthebigpicturestrategicelementthatbroughtIndiaandtheUScloseinGeorgeWBushsblinkeredbutforIndiabenecialworldviewwewereamongthegoodguysandthereforedeservingofUSsupportismissingcompletely.Ideologyandgeneraldisinteresthavecombinedtoexilethehenthatlaidgoldeneggs.TheModigovernmentbeingmorepragmaticandpro-businessandcompletelybereftofanyleft-of-centreideologicalleaningsrealisesthatitneedsUSsupporttorepairtheIndianeconomytoweantheUSawayfromitsverypro-PakistanviewofdevelopmentsinAfghanistanandonbalancingouttheAsianpowerequationvisavisChina.Thereforetheoutreachtopreciselythoseconstituenciesthatlobbiedhardforthenucleardeal.Modiwillmeet17topCEOsofUScompaniesinanefforttoconvincethemthatIndiaisonceagainopenforbusiness.TheneffortsareontoarrangeameetingbetweenModiandIsraeliPrimeMinisterBenjaminNetanyahu.ThiswillbetherstevermeetingbetweentheIndianandIsraeliheadsofgovernmentsonthesidelinesofanymultilateraleventandwilltelltheworldthatNewDelhiisnolongershyofpubliclyembracingTelAvivasafriendandally.ModiwillreachouttoCongressionalleadersandtheNRIcommunityaswell.WiththerightincentivesandStanderdPoorsSPsupgradeofIndiasoutlooktwodaysagoisjusttherightsignalthecoalitionofthesespecialinterestgroupsandpowerfullobbiescanberevived.IfhecandothatModiwillhaveplantedtheseedsofwarmlong-termtieswiththeUSwithoutthehiccupsandtherollercoastertrajectoryofthelastdecade.October2014 INDIAGLOBALBUSINESS28SECTORFOCUS-TechandInnovationUSfrmplansIndiaITcentresTechMahindraacquiresUSbigdatastart-upNewYork-basedITrmSynechronplanstosetuptwonewcentresinBangaloreandHyderabadinvestingabout30-35millioninthenextthreeyearsinthecountry.ThetwonewcentresinsouthernIndiawillfocusondeliveringdomainintensiveanddifferentiatedtechnologycapabilitiestoclientsinthebankingandnancialservicesSynechronsaidinastatement.Synechronplanstoaggressivelydrivebusinessbyinvesting30-35milliononIndiaexpansionoverthenextthreeyearsthestatementreads.ThecompanywhichalreadyhasacentreinPuneplanstorampupexpansionto225employeesinBangaloreandto150inHyderabadinthecurrentscal.ThiswilltakethecompanystotalheadcountinIndiatoover5000professionalsofwhich3800arebasedinPune.SynechronaNewYorkbasedITrmhasannounceditsintenttoexpanditsoperationsinIndiawithtwonewcentresinBangaloreandHyderabad.Thecompanyplanstoinvest3035millionoverthenextthreeyearsasitbuildsthesetwonewcentresandisexpectedtocreate375newjobsinIndia.ThiswilltakethecompanystotalheadcountinIndiatoover5000professionalsofwhich3800arebasedinPune.TechMahindraacquires75percentstakeinUSbasedanalyticsstart-upFixStreamNetworksIncFSNIreportedlyfor10million.FixStreamisadatastorageandcloudcomputingsoftwarermfoundedinMayoflastyear.Thecompanyusesdeep-diveanalyticsinthedatacenterandcloudenvironmentstohelporganiseandstoremassiveamountsofdataforlargecompanies.Mumbai-headquarteredinformationtechnologyservicesproviderTechMahindrahasdecidedtoacquireaUS-basedanalyticsstart-upfor10million.Thecompanyplanstotakeovera75percentstakeinFixStreamNetworksIncFSNIitsaidinanofcialstockexchangeannouncement.FSNIisgoingtodevelopemergingtechnologywhichOctober2014 www.indiaincorporated.com29SECTORFOCUS-TechandInnovationBangalorebasedSonataSoftwarehasacquiredacontrollingstakeinUSbasedcloudservicesrmRezopiathathaspioneeredthedevelopmentofacloud-basedSAAStravelITsolutionsplatformforanundisclosedsum.SonataisalsoacquiringthebusinessesofXykaSoftwarePvtLtdwhichistheprimaryserviceprovidertoRezopiasplatform.October2014willbenetTechMahindrascustomerbasethestatementsaid.FixStreamisadatastorageandcloudcomputingsoftwarermfoundedinMayoflastyear.Thecompanyusesdeep-diveanalyticsinthedatacenterandcloudenvironmentstohelporganiseandstoremassiveamountsofdataforlargecompanies.ExpertssaidtheacquisitionwhichissubjecttoregulatoryapprovalswillhelpTechMahindraleapfrogintermsofinnovationtalentandtimetomarket.EarlierthisyearTechMahindraalsopartneredwithchip-designrmTexasInstrumentstosetupalabinBangalorethatwillfocusondevelopingsolutionsbasedontheInternetofThings.TechMahindraisaleadingproviderofsolutionsandservicestothetelecommunicationsindustrywithamajoritystakeownedbytheMahindraGroup.Thecompanyservestelecomserviceprovidersequipmentmanufacturerssoftwarevendorsandsystemsintegratorsaroundtheworld.SonataSowareacquiresUSfrmBangalore-basedITconsultingandsoftwareservicescompanySonataSoftwarehasacquiredastakeinUS-basedcloudservicesrmRezopiaInc.ThenancialdetailsofthedealarenotavailablehoweveritisreportedthatthedealinvolvescontrollingstakeinRezopia.InaseparatetransactionSonataisalsoacquiringthebusinessesofXykaSoftwarePvtLtdwhichistheprimaryserviceprovidertoRezopiasplatform.TheacquisitionisaimedatstrengtheningoneofitsfocusverticalsoftravelandtourismcombinedwithIPandplatform-ledservices.RezopiawillbenetfromSonatasabilitytosupportcontinuedinvestmentinitsplatformdevelopmentroadmapandengineeringsoftwareproductsandgaintravelcustomersinmultiplegeographiesglobally.Foundedin1986SonataSoftwareisfocusedonsolutionsfortravelretailandCPGverticalsdriventhroughintegratingtechnologiessuchasomni-channelcommercemobilityanalyticsandcloud.California-basedRezopiahaspioneeredthedevelopmentofacloud-basedSAAStravelITsolutionsplatform. INDIAGLOBALBUSINESS30INDIA-USRECAPModiinUSOcialsfnetuneWTOdealOctober2014PrimeMinisterNarendraModisUSvisitislikelytoleadtoabreakthroughintheimpasseovertheWorldTradeOrganizationsTradeFacilitationAgreementTFAwhichseekstomakeinternationaltradeeasierbycuttingredtapeandsimplifyingprocedures.TheannouncementofthebreakthroughisexpectedtobeoneofthehighlightsofModismeetingwithUSPresidentBarrackObamainWashingtonattheendofthismonth.InJulyIndiahadblockedaconsensusonTFAwhichcouldaddupto1trilliontotheglobaleconomyandgenerate21millionjobsacrosstheworldasitwantedaparallelagreementoncontinuingitshumungousfoodsubsidyprogramme.Itsfear800millionpoorIndianswouldbeleftatthemercyofmarketforcesandwesternfoodexportersunlessithadabindingagreementonstockingandsubsidisingfoodatlevelsfarinexcessofthosepermittedunderWTOrules.IndianandUSofcialsareworkingontheneprintofaplantoindenitelyextendtheso-calledpeaceclausethatwouldprotectIndiasfoodsecurityprogrammefrombeingchallengedbeforetheWTO.Westernnationswantedthepeaceclausetorunforfouryearsduringwhichtheysaidabindingagreementontheissuewouldbeworkedout.ButIndiahadstooditsgroundevenattheriskofbeinglabeledadealbreakerasitwantedwatertightguaranteesthatitspoorwouldnotbedeniedtherighttocheapfoodattheendoffouryears.NowNewDelhiandWashingtonareworkingoutadealtoallayIndiasfears.IndiahasreiteratedseveraltimesthatitisnotagainsttheTFApersebutwantstosecurethelivesandlivelihoodsofitspeople.IndianofcialsmadethispointforcefullytoUSSecretaryofStateJohnKerrywhenhevisitedIndialastmonth.WiththeUSnowclosetoacceptingIndiaspointofviewthepossibilityoftheblockeddealatWTOgoingthroughhavebrightenedconsiderably.ModisUSvisitislikelytoleadtoabreakthroughintheimpasseovertheWorldTradeOrganizationsTradeFacilitationAgreementTFA www.indiaincorporated.com31MarkingtimeinplaceWhyUSimmigrationreformhasstalledandwhatIndiacandotohelpgetitmovingagainWilliamP.CookistheformerGeneralCounseloftheU.S.ImmigrationNaturalizationServiceINSduringtheadministrationofPresidentGeorgeH.W.BushandiscurrentlytheManagingMemberoftheGlobalMigrationLawGroupwww.gmlgvisas.comlocatedinitsWashingtonD.C.ofce.IntheUSreformofthebrokennationalimmigrationsystemhasbeenattheforefrontofthepoliticallandscapeoverthepastfewyears.MadeallthemoreurgentbythecurrentcrisisattheSouthernborderexpectationsthatCongresswouldexpeditiouslyacttoproduceso-calledimmigrationreformhaverepeatedlybeendashedduetopartisanbickeringincludingaboutwhatthetermreformevenmeans.Thetoneofthisdiscussioncanbeatbestdescribedasnastywithprogressandthuspertinentlegislationrenderednon-existentduetoseveralfactors.PrimaryamongthemareiSignicantinternaldisagreementonhowbesttodealwiththe11millionplusillegalimmigrantsalreadyresidentintheU.S.coupledwiththeinuxofapproximately60000accompaniedandunaccompaniedchildrenandteenagersfromCentralAmericaandiiTheupcomingCongressionalmid-termelectionsinNovemberofthisyearinwhichbothpartieswilluseunfullledimmigrationreformasanelectionyearwedgeissue.IndiaisthelargestconsumerofUSemploymentvisasandthusasteadysourceofneededimmigrantstotheUS.IthasbeenandshouldcontinuetoremainalegitimatestakeholderinthisprocesshowevergivenitslackofsuccessinadvancingitspointofviewbeforetheU.S.Congressregardingbusinessandfamilyvisasitmaywanttoconsiderexpressingitspositionsandprioritiesinamorecohesiveandpoliticallysavvymannerifitwantstobesuccessfulwhenimmigrationlegislationisnallytakenupin2015.ThenewModigovernmentIndiaIncandindividualIndiansseekingUStemporaryworkvisasandpermanentresidencyintheUSmustspeakinunisonandtheyhavetodosoinamannerthatconveysthesenseofmutualitythatmustalwaysbeatthecoreofbilateralrelationsbetweennations.GUESTCOLUMNOctober2014 INDIAGLOBALBUSINESS32GUESTCOLUMNFurtherthatmutualitymustnotonlyaddressnationalpolicyissuesbetweenthetwocountriesitmustalsoevinceanalignmentwithkeyUSbusinessstakeholdersandinthecaseofimmigrationpolicythatmeanstheUSITindustry.ThedomesticinterestsandconcernsofthoseUSindustryplayersholdmuchmoreswaywithalreadyhard-pressedU.S.legislatorsthandotheargumentsofIndiaanditswell-paidlobbyists.Indiasgo-it-alonestrategyinlobbyingtheUSCongresslastyearonlyresultedinthebipartisanimpositionofrestrictiveH-1BprovisionsthatspecicallytargetedandpunishedIndianBPOcompanies.ByadoptingalobbyingstrategythatfailedtoalignitselfwiththeU.S.ITindustryIndialeftitselfexposedandaloneleavingitspositionthatitwassomehowbeingdiscriminatedandvictimizedbyaprotectionistCongresstofallondeafears.BesidesndingmorecommongroundwiththeUSITindustrythereisanotherreasonthatIndiamissedanopportunitytoexertanyrealinuenceonUSimmigrationpolicyinrecentyears.ThemainfocusoftheUS-IndiarelationshipfromtheAmericanperspectivehasbeenthelackofprogressinbilateraltradenegotiationsbetweenthetwocountriessuchastheperceivedlackofWTOconformitybyIndiaanditsrefusaltoliberaliseitseconomicsectorasevidencedbystalledprogressontheFDIfrontparticularlywithregardtomulti-brandretail.IndiamayhaveerroneouslybeenadvisedthattheimmigrationissueasitpertainedtoIndiawasoccurringinverticalisolationbutthefactisthatabsentamarkeddeparturefromthecurrentdivergenttradepoliciesbetweenthetwocountriesitisdifculttoseehowtheU.S.GovernmentbeittheObamaAdministrationortheUSCongressisgoingtofeelcompelledtosupportimmigrationreformlegislationthatcontainsthetypeofH-1BandothervisaprogramreliefIndiaanditsBPOsectorareseekingmuchlesspercountrylimitreliefforcategoriessuchastheEB-2visaandregardingfamilyreunicationwhichwouldsignicantlyreducebacklogsinbothforIndiannationalswithoutequalconcessionsontheIndiansidewithrespecttotrade.AtarecentconferenceinMumbaiwewerespeakingabouttheprospectsofimmigrationreforminthewaningdaysofthecurrentCongress.AfterthespeechayoungwomanintheIndianBPOindustrycameupandaskedWhydoesAmericahateussomuchAbitstunnedshewasaskedwhatshemeanttowhichsherepliedYouknowtheUSdiscriminatesagainstussimplybecausewewanttogothereandworkclearlyspeakingtotheperceiveddisadvantagesIndiabelievesitsufferswiththeH-1Bprogram.PausingforamomenttoconsiderhercommentstheresponsewasbutmightnotAmericaclaimthesamewhenitcomestoFDIinmulti-brandretailinIndiaTowhichsherespondedwithoutamomentshesitationohbutthatsdifferentOnlyitsnotdifferent.ItsexactlythesameinthesensethateachofourcountriesandtheirrespectivebusinesscommunitieshavetheabsoluterighttopairoffissuestheyregardascompetingevenifthesubjectmatterisnotexactlyOctober2014 www.indiaincorporated.com33GUESTCOLUMNthesame.IndiawantsimmigrationreformbuttheU.S.wantstradereformandsotheU.S.hastheabsoluterighttolinkonetotheotherregardlessofIndiasviewthattheonlyissueitwantstodiscussisimmigration.ConsequentlyperhapsIndiaanditsbusinessconstituentswouldfarebetterontheUSlegislativefrontiftheyacceptedthattheconcernsoftheUSgovernmentanditsbusinesscommunityconstituentsabouttheneedforgreatermutualityonthepartofIndiaasregardstradeissuesplaysanequallyimportantpartinanydiscussionsaboutIndiasconcernsoverUSimmigrationpolicy.MumbaiHyderabadKolkataNewDelhiChennaiImmigrationVisas8817120831Non-ImmigrationVisasImmigrationVisas027339Non-ImmigrationVisasImmigrationVisas094731Non-ImmigrationVisasImmigrationVisas190930Non-ImmigrationVisasImmigrationVisas15154164524Non-ImmigrationVisasImmigrationVisasNon-ImmigrationVisasTotalVisasIssued473115IndiaTotal23971ofTotal5.07TotalVisasIssued9164349IndiaTotal598355ofTotal6.53SourceStudentandExchangeVisitorsInformationSystems0SummaryofVisasIssuedbyUSinFY2013October2014 INDIAGLOBALBUSINESS34SECTORFOCUS-PharmaNewregulatoryregimeforIndianPharmasectorcouldboostcompetitivenessBarelyafortnightbeforeNarendraModismaidenvisittotheUSasPrimeMinistertheIndianGovernmenthasrampeduptheregulatoryregimeaimedattheIndianPharmaceuticalsector.CentralDrugsStandardControlOrganisationCDSCOissuednewguidelinesforstateinspectorsonhowtoprepareforandhandleinspectionsofdrugmanufacturingfacilities.Druginspectionsarenowexpectedtolasttwotovedaysdependingonthenumberandcomplexityoftheproductsmanufacturedwithaminimumofveinspectionsperyearatstatelevel.ThereisgoodreasonforMrModisgovernmenttointroducethismeasureespeciallysincethetrailblazingexportgrowthstoryoftheIndianPharmaceuticalsectorhassuddenlylostitsmagicandfallenfrom10percentayearin2012-13to1.2percentin2013-14.TheindustryhasbeengrapplingwithTheIndianGovernmenthasrampeduptheregulatoryregimeaimedattheIndianPharmaceuticalsectorOctober2014 www.indiaincorporated.com35SECTORFOCUS-PharmaIndiasGlobalExportsofPharmaceuticalproductsduringthelast12years600050004000300020001000YearsllvaluesinUSDMillion780.5729.77855.92945.111055.761400.781620.082061.682444.183184.034159.455078.781997-19981998-19991999-20002000-20012001-20022002-20032003-20042004-20052005-20062006-20072007-20082008-20090Sourcefocusafrica.govreportOctober2014regulatoryactionbytheUSFDAinrecentmonthsbasedonhealthandsafetyconcernsalongwithcomplaintsofIntellectualPropertyRightsfromtheUSPharmasector.CompaniesaffectedincludedIndiangiantssuchasRanbaxyaswellasotherssuchasWockhardtandStridesAcrolab.Howeversmallercompanieswerenotsparedeither.TheUSwith26percentofimportsfromtheIndianPharmaceuticalsectorhasalotofcloutwhenitcomestotheindustry.ThereforeobserversbelievethismovebytheModigovernmenttoimprovehealthandsafetystandardswouldenablethePrimeMinistertogetconcessionsfromtheUSFDA.Themoveisalsoexpectedtoboostthesectorsglobalcompetitivenessasitslowlymovesupthevaluechainfrommakingbulkdrugstodevelopingnewsolutionsasitwouldinspireconfdenceintheglobalmarketplace.InhisIndependenceDayspeechPrimeMinisterModicalledontheworldtomakeinIndiaaclarioncalltomakeIndiathemanufacturinghuboftheworld.ConcernsabouthealthandsafetyandqualityofproductswouldputaseriousdenttothatambitionandthenewBJPgovernmentcannotaffordthat.SOitsnosurprisethemovebyCDSCOcamesosoonafterthespeechfromtheRedFort. INDIAGLOBALBUSINESS36CiplastrikesHIVdealwithUSpharmagiantIndianpharmaceuticalmajorCiplahasstruckupanIndia-specicstrategicpartnershipwithUS-basedMSDforanHIVdrug.UndertheagreementCiplawillhaveanon-exclusivelicensetomarketpromoteanddistributeMSDsraltegravir400mgtabletunderadifferentbrandnameinIndia.Accesstotreatmentandpatientcentricapproacharethecornerstonetothispartnership.WiththismodelbothrmsexpecttobroadenthereachofraltegravirinprivateandpublicmarketsinIndiathetwocompaniessaidinajointstatementthisweek.CiplachiefmedicalofcerJaideepGogtaysaidthepartnershipreinforcesthecompanysongoingcommitmenttoHIVAIDStreatmentmakinglife-savingdrugsaccessible.GogtaySECTORFOCUS-PharmaOctober2014IndianpharmaceuticalmajorCiplahasstruckupanIndia-specicstrategicpartnershipwithUS-basedMSDforanHIVdrug.UndertheagreementCiplawillhaveanon-exclusivelicensetomarketpromoteanddistributeMSDsraltegravir400mgtabletunderadifferentbrandnameinIndia.Accesstotreatmentandpatientcentricapproacharethecornerstonetothispartnership.CiplatopurchasestakeinUSfrmIndiasfth-largestpharmaceuticalcompanyCiplaislookingatacquiringastakeinUS-basedChasePharmaceuticalswhichisinengagedindevelopingnovelapproachestoimprovetreatmentforAlzheimersdiseases.TheMumbai-basedcompanyhassignedadenitiveagreementtoacquirea14.6percentstakeforaninvestmentof1.5million.TheinvestmentdonethroughCiplaswholly-ownedsubsidiaryCiplaEULimitedUKwillbepartofa21-millionsyndicatetonancePhase2aandPhase2bclinicaltrialsforChasesleaddrugCPC201fortreatingthedisease.CiplawillcollaboratewithChasetodevelopthisdrug.Ifthedrugissuccessfulthecompanywillprovidelow-costaccesstoChasesleaddruginIndiaandSouthAfrica.Foundedin2007ChasePharmacurrentlylooksatimprovingefcacysafetyandtolerabilityofexistingAlzheimermedications. www.indiaincorporated.comsaidRaltegravirathirdlinetherapytreatmentwillbeavalueadditiontoCiplasportfolioofHIVAIDStreatmentespeciallyforthosepatientswhoareresistanttotherstandsecondlinetherapytreatments.CiplaMDandGlobalCEOSubhanuSaxenaaddedWewanttoensurethatallpatientsparticularlyindevelopingcountriesgetaccesstothemostinnovativebreakthroughmedicinesavailable.Wideraccesstoanti-retroviraltherapiesAIDSdrugshasledtoa29percentreductioninestimatedannualAIDS-relateddeathsaccordingtoIndiangovernmentdatafromtheNationalAidsControlProgramme.K.G.AnanthakrishnanMSDsmanagingdirectorinIndiasaidthattheirIndia-alliancewithCiplawouldseektoaddresstreatmentchallengesforhighriskpatientsbyprovidingbroaderaccesstoinnovativemedicinesandvaccines.ItisacomplementarypartnershipasMSDbringstheresearchandscienticexcellenceforraltegravirandCiplabringstheirmarketingexcellencesignicantreachamongkeycliniciancategoriestodriveproductaccess.MSDandCiplabothsharethesamecommitmentofprovidingbroaderaccesstoHIVtreatmenthesaid.LupinplansUSRDcentresMumbai-basedpharmarmLupinLimitedisplanningtosetuptworesearchanddevelopmentRDcentresintheUS.AfterincreasingtheRDspendinFY2014thecompanyhasannouncedthatitisintheprocessofsettinguptwodedicatedCentresofExcellenceforresearchininhalationandcomplexinjectablesinFloridaandMarylandintheUS.Thecompanysglobalstrategyisofbuildingahighlydifferentiatedgenericandspecialitybusinessforwhichresearchisthebackbone.InFY2014thecompanybenetedfromRDintheformof45approvalsinkeyadvancedmarketsincludingtheUSEUAustraliaCanadaandJapan.Foundedin1968Lupinisthesecond-largestIndianpharmacompanybymarketcapitalisation.ItclaimsthedistinctionofbeingthefastestgrowinggenericpharmaceuticalplayerinthetwolargestpharmaceuticalmarketsoftheworldtheUSandJapan.Mumbai-basedpharmarmLupinLimitedisplanningtosetuptworesearchanddevelopmentRDcentresintheUS.AfterincreasingtheRDspendinFY2014thecompanyhasannouncedthatitisintheprocessofsettinguptwodedicatedCentresofExcellenceforresearchininhalationandcomplexinjectablesinFloridaandMarylandintheUS.SECTORFOCUS-PharmaOctober201437 INDIAGLOBALBUSINESS38SPECIALREPORTIndiassizeabledeencespendinganopportunityororeignIndianfrmsIndiasspendingindefenceisexpectedtoreach56billionannuallybytheendofthedecadeIndianspendingindefencewouldsignicantlyriseoverthenextfewyearsandisexpectedtoreach56billionannuallybytheendofthedecadeaccordingtotherespectedU.K.IHSJanesDefence.AnotherrecentreportthisonefromEdleweissSecuritiesclaimedby2024thecumulativespendwillbeover248billionforthedecade.DefenceprocurementhasbeenaperennialproblemforIndia.Aimstoreducecorruptionhascreatedalabyrinthofcomplexbureaucraticregimethathasnotonlyfailedspectacularlyineliminatingcorruptionindefencedealsbutalsoaccordingtodefenceexpertshasreducednationaldeterrence.AtatimewhenChinahasbeenrapidlymodernisingandexpandingtheirdefencecapabilitiesIndianArmedOctober2014 www.indiaincorporated.com39SPECIALREPORTForcesarehavingtotackle21stcenturychallengeswithtwodecadeoldweaponrytheyargue.ThenewBJPgovernmentinNewDelhihoweverhasmadeitsintentclearevenbeforeittookofce.ItsmanifestoclearlystatedthataBJPgovernmentwouldliketomakeIndiaafull-edgeddefenceexporterinadecadeandthatitwouldunlockthelogjamindefenceprocurement.Truetoitswordthegovernmentsbudgetincreaseddefencespendingto38.3billionfromtheallocated34.6billionbythepreviousUPAregimefor2014-15.TheModiGovernmenthasbeenpragmaticinitslongtermdefenceprocurementpolicies.LikemostseniordefenceandnationalsecurityexpertstheBJPgovernmentbelievesIndianeedstoreduceitsdependenceonforeignweapons.HoweveritalsorealisesthatIndiasindigenousknowledgeandexpertisewouldnotbeadequateintransformingtheworldslargestimporterofweaponstoanexporter.Henceraisingtheforeigndirectinvestmentcapto49percentwhileatthesametimemakingsureavastmajorityofdefenceprocurementorderswouldbegiventoIndianrms.ThuscreatinganidealopportunityforforeigndefencermstoworkcloselywithIndianrmstobepartofthislucrativemodernisationprojectoftheIndianArmedForces.Furthertheoffsetrulerequiresforeignrmswhowindefencedealsover15milliontosourcecomponentsandothermaterialworthatleast30percentofthetotalvalueofthecontractfromIndia.Thetotalvalueoftheoffsetaloneissettoreacharound75billioninadecadestime.ThemajorIndianconglomeratessuchasRelianceTataGroupMahindraMahindraLarsenToubroarealleyeingthedefencespace.ManyofthemhavebeeninvolvedinrecenttieupswithmajorglobaldefencermstoboosttheircapabilitiesinthesectorandtakeadvantageofthegovernmentspragmaticIndianisationapproach.Someanalystsarguethatforeignrmswouldnotbewillingtosharetheirtechnologyandknowledgewithouta51percentcontrolbutconsideringthatglobaldefencespendingisslowingandthesizeofthegrowingIndiandefencespenditishardtoseethatforeignrmswouldbereticentinjointlyworkingwithIndiancompanies.October2014 INDIAGLOBALBUSINESS40SPECIALREPORTCurrentspendindefenceofUSChinaandIndia301.722.1914.29503.3546.2923.07698.18123.3446.09640.22188.4647.39Spend2000InUSbillion200520102013USChinaIndiaIndiasdefenceexpenditureisexpectedtoaccelerateoverthenext30yearstorivalthatoftheUSandChinaaccordingtoGlobalStrategicTrends-Outto2045apublicationbyBritainsDefenceMinistrysDevelopmentConceptsandDoctrineCentre.ChinaIndiaandtheUSarelikelytoleadindefence-relatedresearchanddevelopment.2000200520102013ofGDPIndiaUSChina344.83.81.92.12.123.12.82.72.5SourceStockholmInternationalPeaceResearchInstituteSIPRIOctober2014 www.indiaincorporated.com41SECTORFOCUS-EnergyNosurpriseenergyistakingcentrestageinModiGovernmentIndiasquesttoachieveenergysecurityhasreceivedunprecedentedattentionfromthenewBJPgovernmentIndiasquesttoachieveenergysecurityhasreceivedunprecedentedattentionfromthenewBJPgovernmentinDelhiledbythePrimeMinisterNarendraModi.InallhisforeignvisitssincetakingofceMrModihasputenergyaspartofthekeybi-lateralagendabeitwithBhutanNepalJapanorAustralia.ThesummitwithPresidentObamawouldbenodifferent.DomesticallywhileagreeingwiththecountrysSupremeCourtontherecentdecisiononcoalblockallocationsandirregularitiestheBJPGovernmentstillpleadedwiththeapexcourtnottohinderoperationsofthoseplantscurrentlyproducingcoal.TheyargueddoingsowouldsignicantlyhurtIndiasenergyproductionandthereforethewidereconomy.ThisconcernandemphasisonenergyisunderstandableaswithoutadequateenergyModisvisiontotakedevelopmenttoeachvillageintheOctober2014 INDIAGLOBALBUSINESS42countrywouldsimplybeimpossible.AndMrModihashisworkcutoutinthisarea.DespitebeingtheworldsfthbiggestproducerofenergyIndiaisstrugglingtokeepupwiththerisingdemandwhichaccordingtosomereportsforelectricityalonewouldbearound300GWby2017.Thecurrentcapacityisbarely250GWandwithlossesintransmissionitisestimatedthatIndiawouldneedtohaveatleast400GWcapacitytomeetdemandfor300GW.Currentlyover300millionpeopledonothavebasicaccesstoelectricitywhile400millionothersloseaccesstoelectricityoftenduetoblackouts.Furthertheproblemsofsubsidiespowertheftandinefcientdistributionalongwithinadequateinfrastructureaddtothechallengesfacedbythisgovernment.WithoutenergytherecannotbeanydevelopmentnowonderenergyishighontheprioritylistforMrModi.SECTORFOCUS-EnergyOctober2014TotalPrimaryProductionTotalEnergyConsumptionCOUNTRYUNITMtoeRANKCOUNTRYUNITMtoeRANKChinaUSARussiaSaudiArabiaIndiaCanadaIndonesiaIranAustraliaBrazilChinaUSAIndiaRussiaJapanGermanyBrazilSouthKoreaCanadaFrance259318731338631552441416352332253123456789103013218781973045532329326725425312345678910IndiaRankinginWorldTotalPrimaryEnergyProductionandTotalEnergyConsumption2013MtoeMillionTonsofOilEquivalentSourceGlobalEnergyStatisticalYearbook2014 www.indiaincorporated.com43EnablingNuclearCooperationwithJapanUSARakeshSoodwasaseniorIndiandiplomatwhohasservedasAmbassadortoFranceNepalAfghanistanandtotheConferenceonDisarmamentinGeneva.HewasformerPMsSpecialEnvoyforDisarmamentandNon-Proliferationissues.AsPrimeMinisterModisforeignpolicychangesgearsbyshiftingfocusfromtheneighbourhoodtotheongoingvisittoJapanandforthcomingvisittotheUSandincomingvisitsfromChinaAustraliaandRussiaengagementwithmajorpowerswillnowoccupycentrestage.WithJapanUSandAustraliaIndiasnuclearpolicywillonceagainattractattentionandcomment.ConsiderableexpectationhasbeengeneratedabouttheJapanvisitbecausebothModiandAbeareseenasstrongleaderswhoshareaclosepersonalrelationshipandwouldliketoimpartgreatercontenttothestrategicdimensionofthebilateralrelationship.Thisimpliesforwardmovementintwosectors-defenceandcivilnuclearcooperation.CooperationintheciviliannuclearsectorisparticularlyimportantbecauseJapanesecompaniesHitachiToshibaMitsubishiJapanSteelWorksetcproducekeycomponentsforArevaGEandWestinghousetheFrenchandUScompanieswithwhichNuclearPowerCorporationofIndiaLtdNPCILhasbeeninnegotiations.PresentlyJapanesecompaniescannotexportnuclearrelatedequipmentandtechnologytoIndiabecauseofJapansexportcontrollawsanditsmembershipoftheNuclearSuppliersGroupNSG.Tochangethisrequiresthreesteps.FirstthetwogovernmentsneedtosignanenablingbilateralagreementsomewhatsimilartotheIndia-USCivilNuclearCooperationAgreementsignedin2008.ThishasbeenundernegotiationforovertwoyearswithJapanseekinggreaterassuranceslikesigningoftheCTBTrefrainingfromreprocessingspentfuelandmoreintrusiveinspectionsthanalreadyagreeduponwiththeIAEA.IndiawillbeunabletoacceptmorethanwhathasbeenalreadycommittedundertheagreementwiththeUSbutsomelanguagecanbedraftedtotakeintoaccountJapansconcerns.HereIndiasexemplaryrecordonnon-proliferationcoupledwithitstraditionofnucleardisarmamentinitiativesGUESTCOLUMNOctober2014 INDIAGLOBALBUSINESS44shouldbeabletoresolvedifferences.HoweverjustthiswillnotbeenoughandthesecondsteprelatestoIndianlaw.DespitesigningbilateralagreementswithUSandFranceactualcooperationhasbeenheldupbecauseofIndiasNuclearLiabilitylaw2010whichisopen-endedandambiguouswithregardtosupplierliability.Lackofclarityhasimpactednegotiationswithallforeignanddomesticsuppliers.TheModigovernmentneedstoamendadjustdomesticlegislationifcurrentandfuturenuclearcooperationagreementsaretobetranslatedintoreality.ThethirdstepisgaininginternationalacceptanceofIndiaspositionsothatfuturenuclearcooperationwithothercountriesissimplied.ThisrequirespushingthecaseforIndiasmembershipintheNuclearSuppliersGroupUSFranceandRussiahavebeensupportiveandnowJapancanbeaddedandraticationoftheIAEAConventiononSupplementaryCompensationCSC.IndiahassignedtheCSCbuttheraticationwasheldupbecauseofquestionsaboutitsconsistencywithIndianliabilitylaw.AcoordinatedthreesteppolicyapproachwhichenablesprogressisnecessaryfortheModigovernmenttoensureIndiasplaceatthenuclearhightableandensureIndiasenergysecurityincomingyears.WithJapanUSandAustraliaIndiasnuclearpolicywillonceagainattractattentionandcomment.GUESTCOLUMNOctober2014 www.indiaincorporated.com45BuildingtrustbetweenIndiaandtheUSDrRajivKumarisaSeniorFellowattheCentreforPolicyResearchDelhiandDirectorPahleIndiaFoundationatwww.pahleindia.org.Heisawell-knownIndianeconomistwhohasauthoredofseveralbooksontheIndianeconomyandIndiasnationalsecurity.GUESTCOLUMNIndo-USrelationscontinuetobecharacterisedbyarelativelackoftrustwithbothsidesdisplayingvariousdegreeofwarinesstowardstheother.Thisissurprisinggiventhecommonfeaturesofdemocracydiversityanddominanceofprivatebusinessandindividualsinourtwosocieties.FortunatelythisisnottrueofthepeopletopeopleP2Prelationshipsthataremarkedbyplentifultrustandamity.BilateralbusinesstobusinessB2Binteractionsarealsobasedonamodicumoftrustwhichadmittedlycouldbeimproved.ButtrustisclearlymissinginofcialG2Grelationswhichinthepasthaveoftenbeenmarredevenbydeepsuspicionandevenhostility.ThismustchangeiftheIndo-USrelationshiphastobecomethedeningpartnershipofthe21stcenturyasconceivedbyPresidentObama.ArealbeginningcouldbemadeinthisregardduringtheforthcomingvisitofPrimeMinisterModitotheUS.FocusedasheisonpromotingIndiasnationalinterestsModiwilldowelltogobeyondhisbriengnotesandfocusonraisingthelevelofmutualtrustinG2Grelations.Thisalonewillgivemeaningandsustenancetothestrategicpartnershipbetweenthetwocountries.ForbuildingG2GtrustMrModiwillhavetosuccessfullywooandengagewithUSbigbusiness.ThiswillsurelynotsurprisethosewhowellknowthattheUSforeignpolicyanditsgeo-strategyistoaverylargeextentdeterminedanddrivenbytheinterestsofprivatebusinessintheUS.ThisimpliesthatModiwillhavetofocusonandaddresstheeconomiccommercialandnancialproblemsbetweenthetwocountries.ToIndiandiplomatstrainedinthetraditionsofhighpoliticsthesecouldappeartobemeretransactionalissuesnotworthyofasummitmeetingbetweenleadersofthetwolargestdemocracies.Thismindsetneedstoberadicallychanged.IamsureModiwithhisGujaratibusinessantecedentsandintuitionthatheowneduptoinOctober2014 INDIAGLOBALBUSINESS46Tokyofullyrecognisesthatresolvingtransactionalissuesisthenecessaryconditionfortryingtobuildstrategicties.ThereforeMrModiwillserveIndiaskeynationalinterestsbyfocusinghisvisitonrestoringandreinforcingthecondenceofUSInc.indoingbusinessinIndia.HecanstarttheprocessinhisaddresstotheIndiandiasporaattheMadisonGardens.GivenhismasterfuloratoryandthefanfollowingamongtheUSbasedNRIsMrModicanasktheIndianNRIbusinessmentohelpinclearingthemisunderstandingsaboutIndianpoliciesreassuretheUSbusinessaboutIndiansrespectforthosewhorisefromtheirownbootstrapsthroughsheerhardworkandforprivateenterprise.HeshouldalsoemphasisetheinsatiableappetiteofIndiansmallandmediumenterprisesfortechnologymanagerialskillsandmarketingnetworksoftheUSprivatesector.ThatwillsettherighttoneforhisvisittoDCandtheWhiteHouse.AnditwillmarkaboldnewbeginningifMrModievenagainstadvicefromhisprotocolconsciousmandarinswillwalkacrossthestreetfromtheWhiteHousetotheUSChamberofCommerceandaddressthosecollectedthere.HeshoulddothisinthefullknowledgethattherealpowerintheUSwouldbegatheredunderthatroof.UnorthodoxyesbutfullofrealpotentialtomakeaboldnewstartinIndo-USrelations.ThatextrastepIwanttoassureMrModiwillbehugelyappreciatedbytheAmericanpeople.GUESTCOLUMNOctober2014 www.indiaincorporated.comINTERVIEW47October2014MinistervisitsproveclosetiesIndiaIncInterviewBritainslawministerShaileshVaraisthelatestinalonglineofseniorUKofcialsyingtoIndiatostriketheirownrapportwiththenewIndiangovernment.Asparliamentaryunder-secretaryofstateandministerforthecourtsandlegalaidintheministryofjusticeVarascleartargetwastheopeningupoftheIndianlegalsector.Attheendofhisthree-dayvisitthisweektheConservativepartyMPforNorthWestCambridgeshiresharessomeofthehighlightsofhisvisitwithIndiaInc.QWhatwerethekeyreasonsbehindyourIndiavisitIhavehadanumberofmeetingsinbothDelhiandAhmedabadwhichincludedseeingministersmembersofthelegalfraternitybusinessesaswellasvisitstotwouniversitiesandtheMahatmaGandhiAshraminAhmedabad.IwanttobuildonthecloselinksthatalreadyexistbetweenourtwocountriesbutalsoconsiderpossibilitiestoallowUKlawyerstopracticeinIndiainthesamewaythatIndianlawyershavebeendoingintheUKformanyyears.IalsowantedtousemyvisittopromotetheGlobalLawSummittobeheldinLondoninFebruary.Thiswillbeauniqueopportunityforthegloballegalcommunitytogettogetheranddiscussthelegalissuesofthedayaswellascelebratethe800thanniversaryofthesigningofMagnaCarta. QIsitanover-drivewithaUKministervisitingIndiavirtuallyeveryweekThenumberofvisitsshowhowseriouslywetakeourrelationshipwithIndiaandtheclosetiesbetweenourtwocountries.AsaministerofIndian-originthisissomethingIamacutelyawareof.QWhyshouldIndiaopenupitslegalsectorTherearemorethan200foreignrmsoperatinginLondonandtheUKincludingIndianones.WebelievethatopeningupthelegalsectortoforeignlawyerswouldcontributesignicantlytoPrimeMinisterModisgoalofincreasinginternationalbusinessandinvestmentinIndia.ItwouldalsobeofbenettotheinternationalbusinesscommunityincludingIndiancompaniesbyensuringthattheyhavedirectaccesstothebroadestrangeoflegaladvicetomeettheirneeds.ItisimportanttoappreciatethespecicchangesthatIamaskingforconsideration.IamnotaskingthatinternationallawyersshouldhaveadvocacyrightsinIndiancourtsorbeabletoadviseonIndianlaw.IamhoweversayingthattheselawyersshouldbeabletoprovideinternationaladviceinIndiathesameadvicethattheyalreadyprovidefromtheUK.QShouldtheUKnotofferreciprocitytoIndianlawyersTheUKalreadyallowsIndianrmstopracticeintheUKandtheyhavebeendoingsoformanyyears.QIsIndiaaviabledestinationforInternationalArbitrationYes.QYouweretherstConservativeMPtoinviteMrModitotheUKandreceivedalotofcriticism.HasthemoodchangedIamverypleasedtohaveinvitedMrModitoLondonwhenhewasstillchiefministerofGujarat.IhopeitwillnotbelongbeforehevisitstheUK.ThedecisivevoteforPrimeMinisterModiintherecentgeneralelectiongivinghimmajoritycontrolnotseenbyanypartyforthelast30yearsspeaksforitself.QWhatmessagedidyoutaketoIndianbusinessabouttheUKanditslegalservicesVerysimplythattheUKisopenforbusinessandourlegalservicescanprovidethemwiththebroadinternationaladviceandsupportthattheyneedtoeffectivelycompeteinaglobalmarket.QTherealityisthattheUKisconsideredoverpricedforlegalservicesbyIndianbusinesses.HowdoyourespondUKlawyersprovidetheservicespeoplewantandhavetheskillsandexpertisethatmanyIndiancompaniesarewillingtopayfor.OfcourseifUKlawyerswereallowedtopracticeinIndiathepricewouldbesetbytheIndianmarketwhichislikelytobecheaperthantheamountcurrentlybeingpaidintheUK.INTERVIEW www.indiaincorporated.comCHINAFOCUS49ChinatocomeknockingwithbillionstoinvestChinaisreadytoinvestupto100billioninIndiasinfrastructuresectoroverthenextveyearsChinaisreadytoinvestupto100billioninIndiasinfrastructuresectoroverthenextveyearsaseniorChineseofcialsaid.TherstoftheseinvestmentsmaybeannouncedduringChinesePresidentXiJinpingstwo-dayvisittoIndiabeginningthisweek.Theseinvestmentswillbeinsectorslikeindustrialparksrailwaymodernisationportshighwaysandpowergeneration.Thetotalinvestmentenvisagedisalmostthreetimesthe35billionthatJapanesecompaniescommittedtoinvestinginthiscountryduringIndianPrimeMinisterNarendraModisrecentvisittoTokyo.Ofthistotalhalfor50billionislikelytobeinvestedinrailwaysandshowsChinasintenttocompeteaggressivelywithJapanforinuenceinNewDelhi.ThoughIndiaandJapanhavenotopenlysaidittherecentwarmingupoftiesbetweenthetwonationsisbelievedtostempartiallyatleastfromadesiretobuildupademocraticalternatepoletotheeconomicpoliticalandmilitaryinuenceofanincreasinglyassertiveChina.Another35billioncouldbeinvestedinIndiasroadshighwaysandportssectors.Thegovernmenthasambitiousplansforthesecriticalsectorsbutinvestmentshavenotbeenforthcomingforavarietyofpolicy-relatedroadblocks.Indiadesperatelyneedsforeigninvestmentofasmuchas5trillionoverthenextdecadetobringitsinfrastructuresectoratparwiththebestintheworld.October2014 INDIAGLOBALBUSINESSCHINAFOCUS50ButithasinthepastfoughtshyofinvitinglargeChineseinvestmentsbecauseofsecurity-relatedconcerns.Thetwosideshaveafesteringborderdisputethathasremainedunresolvedformorethanhalfacenturyandevenfoughtawaroveritin1962thatendedinhumiliationforIndia.Chinawouldinvest7billioninbuildingindustrialparksinIndiaNirmalaSitharamanMinisterofStateforMinistryofCommerceIndustryButrecentpronouncementsbyIndiancommerceministerNirmalaSitharamanwhosaidChinawouldinvest7billioninbuildingindustrialparksinIndiaseemtoindicatethatNewDelhimaybewillingtoplaceitseconomicimperativesaheadofitssecurityconcerns.October2014 www.indiaincorporated.comINTERVIEWIndiasdisinvestmentplansontherollFinanceministerArunJaitleyhassetatargetofRs43500crore7.2billionfromthedisinvestmentofsharesinpublicsectorcompanies.TheIndianCabinethasclearedadecisiontosellsharesinthreelargepublicsectorcompanies10percentinCoalIndiaLtd11.36percentinNHPCand5percentinONGCthatwillgenerateRs44000crore7.3billionforthepublicexchequer.FinanceministerArunJaitleyhassetatargetofRs43500crore7.2billionfromthedisinvestmentofsharesinpublicsectorcompanies.Asuccessfuldisinvestmentiscriticalforthegovernmentthathassetaredlineof4.1percentforitsscaldecitagurethatmanyforeignanalystsfeelisambitiousandmaybedifculttomeet.ApartfromthatthedecisionthisweekwillalsoallowthesecompaniestobeincompliancewithstockmarketwatchdogSecuritiesandExchangeBoardofIndiaSebirulesthatstipulatethatpromotersinthiscasethegovernmentshouldnotholdmorethan75percentinanylistedcompany.Thedeadlineforthisruletotakeeffectisthreeyears.Thegovernmentowns68.94percentinONGC89.65percentinCoalIndiaand85.96percentinNHPC.Whatisworkinginfavourofthegovernmentisthebullruninthestockmarketsthatmostanalystssayisthebeginningofamulti-yearrunup.The30-sharebenchmarkBSESensexhasrisen37.12percentfrom19732.76to27057.41intheoneyearsinceNarendraModiwasanointedtheBJPsprimeministerialcandidateonSeptember132013.InterestinglytheIndiangovernmenthasnotbeenabletomeetitsdisinvestmenttargetforeachofthevepreviousyears.FortheyearendedMarch312014thegovernmentgeneratedRs16000crore2.67billionfromdisinvestmentagainstthetargetofRs40000crore6.67billion.INOTHERNEWS INDIAGLOBALBUSINESSINDIAPOLICY52IndiagetstoughonstrandedforeigngoodsTheministryofhealthistoresolveproblemsbeingfacedbyforeignfoodproducers.ThePrimeMinistersOfcePMOhascalledameetingoftheministryoffoodprocessingandtheministryofhealthtoresolveproblemsbeingfacedbyforeignfoodproducers.Scotchwhiskiespackagedfoodproductsapplesoliveoilsjuicesandotherfooditemsworthmorethan4billionarelyingforuptoeightmonthsatvariousIndianportsforwantofclearancesfromtheFoodSafetyStandardsAuthorityofIndiaFSSAIwhichhastocertifythattheseitemsarelabelledcorrectlyandconformtoIndianstandards.ThisiscontributinginnosmallmeasuretoIndiasimageasacountrythatisOctober2014 www.indiaincorporated.comINDIAPOLICY53difculttodobusinessin.AseniorfoodministryofcialpointedoutthatthiswasyetanotherinstanceoftheinspectorrajanIndiantermandashorthandforthehavoccausedtotheIndianeconomybypettyofcialsencouragedbythepreviousCongress-ledUnitedProgressiveAlliancegovernment.Scotchwhiskiespackagedfoodproductsapplesoliveoilsjuicesandotherfooditemsworthmorethan4billionarelyingforuptoeightmonthsatvariousIndianportsforwantofclearancesfromtheFoodSafetyStandardsAuthorityofIndiaFSSAIOctober2014BothdomesticcompaniesaswellasimporterssaidthestrandedfooditemsarecompliantwithCodexthegloballyacceptedstandardforfoodproducts.TradesourcessaidseveralmultinationalsincludingalargeJapanesebreweryandalargechocolatemakerfromtheEuropeanUnionhadgottiredoftheredtapeandtheresultantdelaysandrecalledtheirproductsfromIndianports.TheamountsinvolvedintheindividualconsignmentsweresmallastheycompaniesaretryingtobuildtheirbrandsinIndia.DoyouthinktheywillwanttocomebackinahurryaseniorexecutiveinamultinationalpresentinIndiasaid.Therealworryisthemessagethissendstotheworldatlarge.Executivesatthesecompanieswilltalktotheircolleaguesinothercompanies.TheseChinesewhisperscandomoredamagetoIndiasimagethananyarticleinthemedia.TheofcialsaidthePMOsinterventionisexpectedtocutthroughtheredtapeandclearthewayforeasierentryofsuchgoodsintoIndiaandisinlinewiththeNarendraModigovernmentsstatedgoalofmakingIndiaaninternationalbusinesshub. INDIAGLOBALBUSINESS54IndiacutsbackrelianceonforeigndebtRBIhadraisedtheForeignInstitutionalInvestorsFIIdebtlimitby5billionto25billionThechiefofIndiascentralbankRaghuramRajanhasannouncedthecountrysreducingrelianceonforeigndebt.ThegovernoroftheReserveBankofIndiaRBIsaidinaspeechWearelimitingourrelianceonforeigndebt.Itsimportantwekeepitthiswayandmanagetheeconomyinwaythatiscarefulandthatiscircumspect.RBIhadraisedtheForeignInstitutionalInvestorsFIIdebtlimitby5billionto25billionaftertheinvestmentsstartednearingthe20billionthreshold.AccordingtoreportstheadditionalheadroomisalmostexhaustedandFIIsdebtinvestmentsinthecountryarealreadynearingthe25billionleadingtoexpectationsthattheremightbeanincreaseinthecapagain.WhileRajanbelievethecountryhasbenetedfromsuchforeignowsintothecountryheremainscautious.HeaddedWehavetobecarefulaboutthismoneybecauseifwesaythisiswonderfultheyalllikeuswefollowtremendouspoliciesandthatswhywegotthismoneyandwegoandspendwerunlargecurrentaccountdecitsbasedontheseforeignborrowings.Butthisforeignborrowingcannotbetakenforgranted.Atsomepointtheseinvestorswillndgreaterusageoftheirmoneybackhomeandtheywanttogooutonceagain.IndiascurrentaccountdecitforApril-Junestoodat7.8billionsharplyhigherthan1.3billioninJanuary-Marchbutnarrowingfrom21.8billionayearago.INDIAPOLICYOctober2014 www.indiaincorporated.com55NEWSINBRIEFJSWclosesinonLucchiniJSWSteelisedgingclosertoacquiringItaliansteelmakerLucchiniSpAwhichwillmarkthecompanysrstforayintotheEuropeansteelmarket.JSWownedbyIndianentrepreneurSajjanJindalhasofferedlessthan100millionforthethreemillsoftheinsolventItaliansteel-maker.IthasalsoapproachedtheItaliangovernmentforapprovalsandhopetostartoperationsbyendofthiscalendaryear.Thedealinvolvesrollingmillstherailbarandwirerodmillswhichhasacapacityofabouta1.2milliontonnes.JSWwillberestructuringtheItaliancompanyandwillshutdowntheblastfurnaceandsteelmakingfacilities.Italsoplanstoproducesteelthroughanewertechnologyatalaterstage.ApartfromthisthecompanyisintherunningtobuyItalyslargeststeelplantIlvawhichhasacapacityof10milliontonnesperannumandisalsoopentoacquisitionsinIndia.Foundedin1946Lucchinispecialisesinhighqualitylongandspecialcarbonsteelproducts.BirlaGroupinSouthAfricaforayIndianmultinationalconglomerateAdityaBirlaGroupisintalkswithSouthAfricasMomentumGroupforaforayintothehealthinsurancesector.Mumbai-headquarteredBirlaGroupispresentinthelifeinsurancesegmentthroughajointventurewithCanadasSunLifeunderBirlaSunLife.ItnowplanstoenterIndiasfastgrowinghealthinsurancesegment.TheMomentumGroupisthethird-largestlifeinsurerinSouthAfrica.Bothcompanieshavebeeninadvancetalksforoverthreemonths.ItisreportedthattheBirlaGroupledbybillionaireKumarMangalamBirlawillshortlyleforanR1licencewiththeInsuranceRegulatoryandDevelopmentAuthorityIRDAwhichistherstofthreestepsintheregistrationprocess.UndercurrentlawMomentumcanholdamaximumof26percentandtheremainingwillbeheldbytheIndiangroup.October2014 INDIAGLOBALBUSINESS56SECTORFOCUS-AutoTataJLRdrivesinnewbabyJaguarTataannouncedtheofciallaunchofitssmallerJaguarTataMotorsownersofJaguarLandRoverJLRannouncedtheofciallaunchofitsnewsmallerJaguaraspartofmegacelebrationsinLondon.TheJaguarXEisavehicleattheveryheartoftheUKsmanufacturingrenaissance.Itcombinespre-eminentBritishdesignwithBritishengineeringinaspecialcarforcustomersaroundtheworldDrRalfSpethJLRCEOsaidatabriengonthenewmodelwhichisbeingpeggedasamoreaffordableluxurydrive.Thispremiummid-sizedsportssedanistheoutstandingrealisationoftwonewfactories2300newjobsandaround2billionofinvestmentintheUKheadded.ThenewcompactexecutivesaloonisallsettohittheEuropeanmarketinearly2015withtheUSlaterintheyear.ItwilleventuallybeavailableinIndiaandotheremergingmarketswithaninitialpricetagofaround27000.PhilPophamJLRGroupMarketingDirectorsaidTheJaguarXEisareallyexcitingcar.Itwillbeatruedriverscarthatlooksgreatandthe27000entrypricemakesitaveryattainableJaguar.SuchasignicantcarforJaguardeservedasuitablyttingworldpremiereinBritainwherethecarisdesignedengineeredandmanufactured.Thealuminium-intensivemid-sizepremiumsportssedanistherstmodeldevelopedfromJLRsnewmodularvehiclearchitecture.TheXEwillbetherstmodeltogetthehightechIngeniumengineafamilyofultra-low-emissionfour-cylinderpetrolanddieselenginesfromthecompanysEngineManufacturingCentre.ThecompanysaidthatthefacilityinWolverhamptonbringsJLRenginesupplybacktoitsproductionheartlandwithatotalinvestmentof500millionandthecreationof1400skilledjobsofwhich600havealreadybeenrecruited.ThisnewadvancedenginefamilyhasbeendescribedashighlyexiblescalableandmodularandwillbeusedinfutureJaguarandLandRoverproducts.JLRwastakenoverbyIndianconglomerateTatain2008asastrugglingrmandtheJaguarXEisbeingheraldedasthehighlightofthemajorturnaroundinthecompanysprotsovertheyears.October2014 www.indiaincorporated.com57October2014India-VietnaminkpactsIndiaandVietnamhasinkedsevenpactsaspartofthefour-dayvisitofPresidentPranabMukherjeetoVietnamthisweek.Boththecountrieshavedecidedtostrengthenbilateralcooperationonthebasisofthestrategicpartnershipwithafocusonpoliticaldefenceandsecuritycooperationeconomiccooperationscienceandtechnologycultureandpeople-to-peoplelinkstechnicalcooperationandmultilateralandregionalcooperation.AletterofintentwassignedbetweenONGCVideshLimitedOVLIndiaandVietnamOilandGasGroupinwhichPetroVietnamofferednewblockstoOVLforoilandgasexplorationandproduction.BothcountriesalsosignedMoUsontheextensionof100millionLineofCredittoHanoifordefencedealscooperationandmutualassistanceincustomsmatterscooperationintheeldofanimalhealthcooperationintheeldofsettingupofpangasiusbreedingandfarminginIndiaandoncooperationinyouthaffairs.AnMoUwasalsosignedbetweenJetAirwaysIndiaandVietnamAirlinesCompanyLimitedtoenhancetheirpresenceineachothersmarkets.BioconbuysGECapitalstakeIndiasleadingbiotechrmBioconhasacquiredGECapitalsstakeinitsresearcharmSyngene.TheBangalore-headquarteredrmswholly-ownedsubsidiaryBioconResearchLimitedhadannouncedplanstoacquirethe7.69percentstakefromGEEquityInternationalMauritius.SyngeneaccountsforaroundafourthofBioconsrevenuesandisinvolvedinpharmaceuticalcontractresearchandmanufacturing.BioconhasindicatedthatitplanstotakeSyngenepublicbutthereisnotimelineforthatyet.Syngeneoffersintegrateddrugdiscoveryanddevelopmentserviceswithcapabilitiesinmedicinalchemistrybiologyinvivopharmacologyandtoxicology.NEWSINBRIEF INDIAGLOBALBUSINESSSPECIALREPORT58TerecentWorldEconomicForumglobalcompetitiveindexmakesforbleakreadingforanykeenIndiasupporter.BadgovernancereasonforIndiasslidedowncompetitiveindexgloballyherecentWorldEconomicForumglobalcompetitiveindexmakesforbleakreadingforanykeenIndiasupporter.Frombeing48thinrankingsinoverallcompetitivenessduring2007-8to71stamong144countriesinthelatestreport.Thedrophasnotbeensuddenitwasagradualprocessoferosionofcondenceasshowninthegraphbelow.AndlargepartoftheblamehastobeshoulderedbythepreviousUPAregimethatpresidedoverthisdecline.InterestinglyinthebusinesssophisticationandinnovationindexIndiafaresfarbetteratrank52.Acloserlookatthosetwoindexesshowthecountryisdenitelywithinthetopthirdofglobalrankingswhenitcomestocapacitytoinnovate48companyspendinginRD30valuechainbreadth43ornatureofcompetitiveadvantage44.TheindicesthatcouldbesaidtobeundercorporatecontrolincludingethicsofbusinessrmsIndiadoesratherwell.SadlythesamecannotbesaidaboutthoseparametersinthereportthatwereunderthecontrolofnowremovedUPAgovernment.Whetheritiscorruption93orthebusinesscostsofterrorismandcrimeareat125and93respectivelythecountrydoesratherpoorlybutnotaspoorlywhenitcomestohighlightinggovernancefailuresininationcontrol133taxation130andstartingabusiness131.AndthisperceptionhighlightedintheWEFsglobalcompetitiveindexisreectedinthegrowingdisparityineconomicperformancebetweenIndiaandrestofdevelopingAsiaasthegureOctober2014 www.indiaincorporated.comSPECIALREPORT59belowshowsespeciallywhenitcomestoimprovingthequalityoflifeforitscitizens.ThenewPrimeMinisterNarendraModiandhisgovernmenthaveamonumentaltaskaheadinreversingIndiasdeclineandbuildupIndiaasaplaceopenforbusiness.October201401020304050565971605357564853282929266070802011-122012-132013-142014-15OverallRankingYearGlobalcompetitiverankingchartSourceWorldEconomicForumglobalcompetitiveindexrankings.IndiaRussiaChinaBrazil2014-15Rankoutof1442013-14Rankoutof1482012-13Rankoutof1442011-12Rankoutof142666764 SECTORFOCUS-FinanceIndianbankbranchesunderUKscannerForeign-ownedretailbankbranchescouldbeforcedtoclosedownAtleastsevenforeign-ownedretailbankbranchesintheUKincludingsomeIndianonescouldbeforcedtoclosedownunderanewcrackdown.AconsultationlaunchedinFebruarybyBankofEnglandsPrudentialRegulatoryAuthorityPRAresponsibleforsupervisingindividualbanksconcludedlastweek.ThenewrulesinforcerequirebanksfromoutsidetheEuropeanEconomicAreaEEAtoofferonlyminimalretailservices.WhileBankofEnglanddeclinedtonamethebanksaffectedanalystssuggestedthatBankofIndiaStateBankofIndiaINDIAGLOBALBUSINESS60October2014 www.indiaincorporated.comSECTORFOCUS-Finance61October2014IsbankofTurkeyandOverseasChineseBankingCorporationofSingaporearelikelytobeaffected.TheywouldeitherhavetoshutdowntheirretailbankingoperationsinBritainorconvertfrombranchstatustofullUKsubsidiaryaexpensiveandcumbersomeprocess.SomeAmericanbanksincludingJPMorganandCitigroupalsohaveUKbranchesbutwerelesslikelytobeseriouslyhitbecausetheyalsooperateUKsubsidiariesaccordingtoUKmediareports.ThePRAsaidinastatementthatdeposit-takingforeignbanksthatwanttoremainabranchmusthavelessthan100millioninaccountbalancesandfewerthan5000customers.ThePRAconsultationhadsuggestedthatthebranchesmightbeabletotradeiftherewereaveryhighlevelofassurancefromtheregulatorintheparentbankshomecountry.Thenewrulesmeanitwillbeeasierforwholesaleforeignbankswhichcatertoothernancialinstitutionsandlargecorporationsratherthanretailcustomerstoopennon-deposittakingbrancheswhichwouldnotfacesizelimitsbutarelikelytomakeitverydifcultforsomeretailbankbranchestooperate.SubsidiariesaresubjecttomorecomplexclearancesandbranchesontheotherhandarepartofahomeofcelegalentityanddontrequiretheirowncapitalbaseintheUKoraseparateboard.Thereforemostlyforeignbanksprefertooperateasbranchesbecausesubsidiariesaremoreexpensivetorunrequiringtheirownpoolsofcapitalandliquidityaswellastheirownboardsandlegalentityandhavetheroutineextracostofreportingtohostcountrysupervisors.ThenewproposalsareanattempttostrikeabalancebetweenwelcomingforeignnanceandprotectingtheUKfromimportedbankingcrises.BritainalsowantstoavoidhavingtocompensatesaverswithdepositsatafailingforeignbankasithadtowithIcesaveaccountsrunbyabranchofIcelandicbankLandsbankiwhichcollapsedin2008duringtheglobalnancialcrisis. CognizantbuysTriZettofor2.7billionCognizantTechnologySolutionshasannouncedthatitwouldacquireUS-basedhealthcare-focusedITcompanyTriZettoIncfor2.7billionInthebiggesteveracquisitionbyanIndia-centricITservicescompanyCognizantTechnologySolutionsannouncedthatitwouldacquireUS-basedhealthcare-focusedITcompanyTriZettoIncfor2.7billion.CognizantistechnicallynotanIndiancompany.ItisheadquarteredinNewJerseyandlistedintheUSbutitspromotersandtwo-thirdsofits187000-strongworkforceareofIndianoriginandhalfofits70-plusdeliverycentresarelocatedinthiscountry.ThisacquisitionwilltakeCongizants46-year-oldCEOFranciscoDSouzathesonofanIndiandiplomatclearofotherIndianITindustrypeerssuchasVishalSikkaofInfosysAzimPremjiofWiproandShivNadarofHCLTechnologiesandtakehiscompanyclosertoTCSthelargestIndianITservicescompanywhichpostedrevenuesof13.4billionin2013-14.AftertheacquisitiontheCognizant-TriZettocombinewillhaverevenuesofabout10billion.Healthcarecurrentlyaccountsforabout20percentofCognizantsannualsalesof8.84billion.Thetakeoverwilltakethisgureupto3billion.CognizantwillnowbebetterplacedtocapturenewbusinessintheUShealthcaremarketwhichgeneratesrevenuesofcloseto2.8trillionayear.Healthcareisundergoingstructuralshiftsduetoreformcostpressureandshiftingresponsibilitiesbetweenpayersandproviders.ThiscreatesagrowthopportunitythatTriZettowillhelpuscaptureDSouzasaid.TCSs2008purchaseofCitigroupGlobalServicesBPOfor660millionisitslargestdealtodatewhileInfosysstakeoverofLodestoneHoldingsfor320millionwasitsbiggesteveracquisition.INOTHERNEWS www.indiaincorporated.comNewsviewsandexclusiveinterviewsonIndiasglobalisationOnlinePrintEventsIndiaIncorpindiaincorporatedcompanyindia-incwww.indiaincorporated.comForbusinessdevelopmentopportunitiesPleaseemailinfoindiaincorporated.comUK4402078732386India9107940063339 IndiaIncorpindiaincorporatedcompanyindia-incindiaincorporatedwww.indiaincorporated.comUK78PallMallLondonSW1Y5ESINDIAC210TitaniumCityCentreSatelliteAhmedabad-380015GETINTOUCHinfoindiaincorporated.comUK9107940063339INDIA4402078732386INDIAGLBALBUSINESS