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PublishedbySeptember2014INDIAGLBALBUSINESSManchestermakesaplayforIndianinvestmentHOTSPOTOPINIONSECTORFOCUSPage6Page44Page43ModibatsforIndiaBuildingtoiletsandmuchmoreDrivingaroundtheworldIndiasoutboundinvestmentmagazineJapanvisit2014ModiplansspecialteamPage15 FromsidelinetofastlaneBusinessdiplomacylikeneverbeforeThatthereissomethingspecialhappeninginIndiaisoflittledoubt.On16MaythisyeartheIndianpublicvotedforchange.Andtheyaregettingchange.AdiscerniblechangeintheworkingsoftheIndiangovernmentmovingfromperen-nialditheringtodecisivedecisionmaking.Achangeinattitudetothemostfunda-mentalissueofpovertyalleviationwiththeannouncementofaradicalfinancialinclusionschemewhichwantstoensurethateveryIndiancitizenhasabankaccount.Fortheglobalaudiencemostsignificant-lythereisastepchangeinthemannerinwhichIndiaisdemonstratingitsdetermi-nationtopresentitselfgloballyandtofullyengagewiththeworld.Andintheprocessclaimitsrightfulplaceatthetoptableofinternationaldiplomacyandbusiness.IndoingsohowevertheglobalcommunitywillhavetocometoacceptthatinforumssuchastheWTOitisclearthatModisgovernmentwillnolongerbehavelikealsoranshisministerswillstandupforwhattheybelieveisinIndiasparamountnationalinterestrightlyorwronglyintheeyesofothers.HoweverIndiasnewphaseofglobalisationtowhichthismagazineisdedicatedwasmosteffectivelydemonstratedduringtherecentlyconcludedvisitbyPrimeMinisterModitoJapan.Thefive-dayvisitwasunprec-edentedinthevigourandwarmthwithwhichbothModiandhisJapanesecounterpartAbeinteracted.Yesasstrongandself-assuredleadersbutmoreimportantlyasflag-bearersofapossiblenewworldorder.ThebilateralcooperationdealswereaplentybutwhatslippedtheattentionofmostwastheModi-AbeConcordonAfrica.TheUShasfailedtounderstandAfricatheUKstradition-alleadershipinAfricaisregrettablyflounder-ingandChinasexpansionismisviewedwithimmenseapprehensiononthecontinentexceptbyacorruptfew.PUBLISHERSNOTE Modiistheincessantcampaigner.AmanwhohascomeupfromthegrassrootsandhenceknowsonlytoowelltheimpatiencewithwhichtheIndianelectoratecantreatitspoliticians.YethisapproachtoshakingupIndiasbureau-cracyusingtechnologytodrivetransparencyandcertaintyindecision-makingandgearingupIndiasforeignpolicytoberightlyfocussedonbothinboundandoutboundtradeandinvestmenthaswonapplauseacrossthecountrywithhispartysapprovalratinghigherthanwhatitwaswhenwinningthegeneralelectionsocomprehensively.IronicallyiftheinternationalmediaisabarometerforworldopinionthereseemstobemuchmoreimpatienceamongforeignerstowitnessIndiasAccheDinModisGoodDayscampaignslogan.InthisinauguralissueoftheIndiaGlobalBusinessmonth-lyIndiaIncbringsyouacomprehensivereviewofthenewIndianPMsfirstmajorforeignvisittoJapanthedealsstruckandaFactfileofhighlights.ThereisaselectionofpasttieupsandagreementsintheRecapsectiontotracehowthebusinessrelationbetweenthetwocountrieshasdevelopedoverthepreviousyear.ThefocusofthisnewmagazineessentiallybeingonoutboundinvestmentfromIndiatheHotSpotsectionhighlightseffortsbeingmadebyManchestertolureinvest-mentsfromIndiaincompetitionwiththefavouredUKhubofLondon.Therearetheusualsector-specificupdatesintheSectorFocussectionandalotmoreforanykeenIndiawatcher.ModihassetsightshighontheinternationalstagebothinrelationtoIndiasdiplomaticengagementandforitsbusinesscommunity.ManojLadwaChiefExecutiveofIndiaInc.www.indiaincorporated.comNewsviewsandexclusiveinterviewsonIndiasglobalisationEmailinfoindiaincorporated.comcompanyindia-incindiaincorporatedIndiaIncorp CONTENTSSPECIALREPORTSECTORFOCUS0609ManchestermakesaplayforIndianinvestmentHOTSPOTFEATURETataSteelEuropecreatesnewautosteelMahindratractorseyeglobalspreadTatarampsupBritishsteelactivityTataSteelclinchesmegaunderseacontractINFRASTRUCTURETELECOMAUTOMOTIVEPROPERTYBhartiAirtelpreparestosellAfricatowersIndiansaretopbuyersofLondonpropertyCOVERSTORYJapanvisit2014Modiplansspecialteam5reasonswhytherupeemayslipto63perdollarTheIndiangovernmenthasmadeaclearplayforJapanasakeyinvestmentdestinationbothinboundandoutboundPg.15IndiaIncsIndiaGlobalBusinessisamonthlye-magazinedocumentingIndianinvestmentflowsacrosstheglobe.Itcollatesthebigheadlinesofthepastmonthtopresentabroadpictureofacountryswitchinggearstomoveintothefastlaneofdevelopment.Indiashowingearlysignsofrecovery59365556583543085lessonsfromModis3-monthmilestone12ModiAppealMakeinIndiasellanywhere www.indiaincorporated.comChiefExecutiveManojLadwaEventsManagerDinaLadwaSalesAdvertisingJenniferFrancisProjectCoordinationNomitaShahDigitalMarketingExecutiveDarshanKhantGraphicDesignerAnkurSaxenaSeniorEditorAditiKhannaOperationsDesignRajviSinghiIndiaIncLimitedallrightsreserved.Reproductioninwholeorinpartwithoutourwrittenpermissionisprohibited.ViewsexpressedbyourcontributorsaretheirownanddonotnecessarilyrepresenttheviewspoliciesofIndiaInc.Whileeveryeffortismadetoachievetotalaccura-cyIndiaInccannotbeheldresponsi-bleforanyerrorsoromissions.44ModibatsforIndiaBuildingtoiletsandmuchmorebyManojLadwabyShaiVyakarnam42CustomerserviceinIndiaIndiaisrighttoblockWTOdealRECAP-JAPANOPINIONGUESTCOLUMNANALYSISINOTHERNEWSAlook-backattheIndia-Japantrajectoryofbusinessbonding1550MakinginvestmentsworkbyMichaelShimmin39RBIleavesinterestratesuntouchedITCbeatsTATAasIndiasmostadmiredIndianfirmsmaketheinnovationcutForbes546252ChiefOperatingOfcerShamitGhosh September201406IndiaGlobalBusinessHOTSPOTThecityofManchesterusedcricketasatooltoattractIndianbusinessinvestmentagainstthebackdropoftheIndiavsEnglandTestmatchatOldTraffordStadiumthisAugust.IndiahasbeennarroweddownasoneofthekeymarketsaspartoftheinternationalisationfocusofalargerGreaterManchesterStrategyandthegameofcricketservedasaplatformtoshowcasethecitybeyonditssportingpotentialaswellasenableManchestershome-growncompaniestoforgepartnershipswithIndiancompanies.InIndiatheUKandLondonareoftenusedinter-changeably.Wewanttochangethatperception.ThereismoretotheUKandManchesterofferstheperfectenvironmentforIndianinvestmentsaidDanielStorerdirectorofbusinessdevelopmentatMidas-Manchestersinvestmentagencybehindthebusinesssummitthatbroughttogetherover40Indiancompaniesonthesidelinesofthecricketmatch.IndiahasbeenpinpointedasapromisinggrowthareaforGreaterManchesterandassuchiscriticaltoGreaterManchesterswiderinternationalstrategy.WiththeelectionofPrimeMinisterModiinIndiathereisanewopennesstobilateraltradethatManchestermusttakeadvantageofto.InIndiatheUKandLondonareoftenusedinterchange-ably.Wewanttochangethatperception-DanielStorerDirectorMIDASManchestermakesapl supportgrowthaddedTimNewnschiefexecutiveofMidasDesignatedasEuropesmostcost-effectivebusinesslocationbyprofessionalservicesgiantKPMGManches-terishighlightinganinvestmentofaround25millionbyAegistheoutsourcingarmofIndiasEssarGroupwhichledtothecreationofaround600jobslocallyasamajorsuccessstoryofIndia-Manchesterties.TheTataGroupandsmallerfirmslikeonlinerestaurantguideZomatoareintheprocessofexpand-ingintheregion.ThecityisalsointalkswithAirIndiaforopen-ingupadirectroutebetweenIndiancitiesandManchesterexpectedtotake-offinaround18monthstime.GreaterManchesterisoneoftheUKsmostdynamicandinnovativeurbanareaswithexceptionalstrengthsinthelifescienceseducationdigitalinnovationandmanufactur-ingsectors.ThesearenotonlykeyareasofgrowthandopportunityfortheIndianeconomybutareareaswhereIndiaholdsrealexpertiseandapartnershipwithfoundationsinthesesectorsholdsimmensepromisefornotonlyManchesterbutIndiaaswellsaidPatriciaHewittchairoftheUKIndiaBusinessCouncilUKIBCwhichisworkingwithMidasonitsIndiastrategy.Thecrick-et-cum-businessinitiativewasbackedupformerIndiancricketinglegendFarokhEngineerwhodescribeshimselfasaproudMancunianbeingbasedinManchesterforyears.IamahugelyproudMancunianandaproudIndianandwantIndiatoknowmoreaboutManchesterbeyondManchesterUnitedfootballclub.CollectivelywecangetManchesteronthemapsaidEngineerwhowasjoinedatOldTraffordbyIndiasdeputyhighcommissionertotheUKDrViranderPaulpictured.ThecityisalsoshowcasingitsrelativelynewMediaCityUKcomplexonthewaterfrontwhichhousestheBBCoperationsasagreatalternativetoLondonssky-rocketingrealestateprices.September201407www.indiaincorporated.comyforIndianinvestment September201408IndiaGlobalBusinessSECTORFOCUSIndiansaccountedforoverhalftheinvestmentflowfromoverseasintothecentralLondonpropertymarketaccordingtolatestfigures.marketsincethefinancialcrisisandstrongdemandforresidential-ledlandsaleshascauseddemandtospilloutintomarketssuchasSouthbankandwestLondonheadded.TheCentralLondonPropertyMarketReviewCautiousOptimismreportreleasedbyCBRESouthAsiapointsoutthatIndianinvestorshavebeenacquiringlargelotsmainlyforresidentialconversions.IndiaBullspurchaseof22HanoverSquarerepresentingfor155millionwasthelargestdealinthesecondquarterof2014.ThisfollowedtheacquisitionbytheLodhaGroupofNewCourtinCareyStreetinearly2014for90millionand13GrosvenorSquarefor306millionlastyear.BothschemesareduetobeconvertedintoresidentialdevelopmentswiththeCareyStreetschemeissettodeliver148newflats.Theyear2014hasseengeneralheight-enedactivityinlandacquisitionsfromoverseaspurchasersincentralLondonaccountingfor53percentoftake-upinthesecondquarterwithalargepropor-tion42percentflowingfromAsia.IndiansaretopbuyersofLondonpropertyIndiansaccountedforoverhalftheinvest-mentflowfromoverseasintothecentralLondonpropertymarketaccordingtolatestfigures.ApropertyanalysisreportbyoneoftheworldslargestcommercialrealestateservicesandinvestmentfirmsCBREfoundthatIndianinvestmentaccountedfor55percentor241millionofoverseasinvestmentinthesecondquarterof2014incontrastto2013wherenolandwaspurchasedbyIndianinvestorsOver-seasinvestorshaveshownstronginterestindevelopmentopportunitiesintheCentralLondonduringQ22014supportedbystrongmarketfundamentalsandtherecoveringecon-omysaidPeterBurnsexecutivedirectorofCentralLondonDevelopmentatCBRE.Asaresultofthisgrowthinvestorappetitefordevel-opmentopportunitiesincludingresidentialisexpectedtoremainstrong.TherehasbeencontinuedgrowthintheLondonresidentialPROPERTY September201409www.indiaincorporated.comSPECIALREPORTIndiashowingearlysignsofrecoveryTheresgoodnewstricklinginontheIndianeconomy.Inflationisshowingsignsofeasingindustryseemstobeshakingoffitslethargyandbusinessconfidenceisimproving.Itmaybeprematuretocallthesegreenshootsofarecoverybutthereisdefinitelyplaceforcautiousoptimism.HowcantheNarendraModigovernmentensurethatthesescatteredanddisparatesignsofaneconomicrevivaltrans-formintotheheadwindsofafull-fledgedrecov-eryInotherwordshowcanitrevivethestalledinvestmentcycleThesearchforanswerstothatquestionshouldthenlogicallytakeustotherootcausesofthisslowdown.LetusrecapTheIndianeconomywasjoggingalongatcloseto9Percentgrowthratesandeveryoneandhisunclewerepredictingevenfastergrowth.Thenthe2Gscambroke.Specifi-callytheComptrollerandAuditorGeneralofIndiareleasedafigureRs1.76lakhcrorefortheestimatedlosstotheexchequer.Themedialatchedontothisfigureitcaughtthepublicimaginationandallhellbrokeloose.CAUSE1Chargesofcorruptionsomewellfoundedotherswithoutbasisflewthickandfast.TheoppositionBJPandseveralsmallerpartiesalsolatchedontothisgod-givenhandletoscorebrowniepointswiththeelectorate.TheUPAgovernmentseemedtohavebeencaughtunawares.Itsreactionandrebut-tallackedcredibilityandenergy.Ascorruptionbecameathemethatresonat. SPECIALREPORTSeptember201410IndiaGlobalBusinessedwiththepublicthebureaucracystoppedusingitsdiscretioneffectivelythatmeantbureaucratsstoppedtakingdecisionssinceeverydecisiononeconomicandfinancialissueswouldresultinbenefitsaccruingtooneormoreinterestedparties.Thiswasthebeginningofthepolicyparaly-sisthathasshatteredtheIndianeconomyandplayedhavocwithbusinessconfi-dence.CAUSE2The2GscaminanutshellwasabouttelecomministerARajaalleged-lyfarmingoutspectruminanarbitrarymannerinreturnformonetaryconsider-ation.Thematterreachedthecourts.OnFebruary222012theSupremeCourtstruckdownthegrantoftelecomlicensestoeightoperatorsacross122circles.Resultiteffectivelywroteoffinvestmentworthmorethan8billionbyIndianandforeigntelcos.Thissentalarmbellsringingacrosstheglobe.GlobalinvestorsbegantoquestionthesafetyoftheirinvestmentsinIndia.CAUSE3JairamRameshasenviron-mentministersuddenlydecidedtobecomeanecologicalactivist.Hundredsofthousandsofcroresworthofinvestmentswereheldupostensiblytoprotecttheenvironment.Miningactivitycametoahaltinseveralstates.Powerplantsnearingcompletioncouldntgetcoallinkagesandhadtobemothballedatbirth.Coupledwithbureaucraticparaly-sisthiscontributedsignificantlytotheslowdown.CAUSE4Thenthefinanceministrysuddenlydecidedtoslapa2billiontaxdemandonVodafone.ThecasedatedbacktoitspurchaseoftheerstwhileHutchi-sonEssar.VodafonewenttocourtandwonintheSupremeCourt.ThegovernmentforreasonsthathaveneverbeenproperlyexplaineddecidedtoamendthelawretrospectivelyinordertoforceVodafonetocoughupthetaxdemandalongwithpenaltiesandinterest.ThemessagethatwentoutwasIndianpolicieswerebasedonthewhimsofpoliticiansandcouldbechangedarbitrarily.GlobalandIndianinvestorconfidenceaboutIndiaalreadyatalowebbforthereasonsmentionedabovecrashedcompletely. SPECIALREPORTwww.indiaincorporated.comSeptember201411CAUSE5Coalgatetheallegedscaminwhichpoliticiansallegedlyfloutednormsandallocatedcoalblocksforcaptiveminingbysteelandpowercompaniescontributeditsbittothecountryseconomicwoes.ItmeantthatIndiawhichhastheworldsfourthlargestcoalreserveshadtoimportcoalworth20billiontomeetitsdomesticrequirements.Thiscontributedinnomeanmeasuretothecurrentaccountdeficitlastyearthatledtoanearrunontherupee.CAUSE6Theall-pervadingchargesofcorruptionledtoamassivecivilsocietyuprisingagainsttherulingpartyofthedayandledtoanearbreakdownofrelationsbetweentheUPAandtheopposition.Predictionsofgloomanddoomabouttheeconomythenbecameaself-fulfillingforecast.Noneoftheabovereasonsarepurelyeconomicorpolitical.Rathereachofthemfallsintheno-manslandattheintersectionbetweentheeconomicandpoliticalplainsandmanyofthemflowfromthelackofdecisiveleadership.NowtocomebacktothequestionweaskedearlierhowcanthisgovernmentputtheeconomybackontrackIthasbegunwell.Criticsmaycarpabouttheabsenceofanybigbangannounce-mentsorbigticketreformsbutlookcloserandapatternbeginstoemergeIthassoughttosoothethefrayednervesofglobalinvestorsbyannouncingthatitwillnotresorttoretrospectivetaxestocreatefreshliabilities.ithasrefurbisheditsreformistcredentialsandsignaleditswillingnesstotakepolitical-lytoughdecisionsbyclearingthedecisiontohikeFDIlimitsininsuranceanddefenceandbybringinginamend-mentstoreformIndiasarchaiclabourlaws.ithasmovedurgentlytoeaseroad-blocksintheenvironmentministrybyintroducinge-clearancesandasystemoftime-boundclearances.IthasmadeapositivestarttomakingIndiaaneasierplacetodobusinessinbyclampingdownonthenotoriousinspectorraj.HenceforthinspectorswillnotbeabletoconductinspectionsunlesstheyhavespecificinformationabouttransgressionsandthattoonlywiththeconsentofseniorofficialsPrimeMinisterNarendraModihasmetbureaucratsandassuredthemofpoliticalbackingfordecisionsmadeingoodfaith.Resulttheywillgettheconfidencetomoveaheadwithdecisionsthatcouldprovetobecontroversiallater.Thisisalreadyleadingtoamorepro-activeandenergeticbureaucracy.AretheselittlemeasuresandtheincipientrecoveryintheeconomylinkedIsthereacauseandeffectrelationshipbetweenthemItsstilltooearlytoanswerthisquestionwithanydegreeofcertitudebutonlyacynicwoulddismissthemascoincidence. September201412IndiaGlobalBusinessFEATURE5lessonsfromModis3-monthmilestoneModirecordasthenationsCEOthatwillmakeormarthedreamsofthesemillionsonAugust262014NarendraModicompletedthreemonthsasIndiasPrimeMinis-ter.Doubtlessmanynewspaperswillbringoutspecialsupplementscelebratingorruingdependingontheirpoliticalworldviewhisfirst100daysinpower.Bothpointsofviewwillhavemuchtosaysomeofitwithbasisbutalotofitbasedontheideologicalbaggageofthewriters.ForthelimitedpurposeofthiscolumnletusfocusonModitheadministratorforthatiswhatmatters.Thatiswhymillionsofaspiration-alIndiansvotedforhimanditishisrecordasthenationsCEOthatwillmakeormarthedreamsofthesemillions.Theseareearlydaysyetbutafewtrendsarealreadyvisible.1Modihasacquiredanimageofbeingomniscient.ConsiderthesestoriesthataredoingtheroundsofDelhiscorridorsofpowerAministerwhorecentlyacquiredanSUVwasdiscreetlytoldbyPMOofficialstoreturnthevehicletohisbene-factor. www.indiaincorporated.comSeptember201413FEATUREThenaseniorministerandhissonwerecalledtothePrimeMinistersOfficeandtoldtopulloutofanallegedlyquestionabledealtheywerepushing.Anotherministerwastickedoffformeetingaleadingindustrialistinafive-starhotel.Amid-rankingministerabouttoboardaflightreceivedacallfromthePMtellinghimthathisattirejeansandT-shirtwasinappropriateforaminister.Onedoesntknowwhetherthesestoriesaretrueornot.Butthatdoesntmatter.Whatisimportantisthatevenseniorpoliticiansandbureaucratswhoweretillrecentlyaccountabletonoonearesuddenlywatchingtheirstep.Decisionsarebeingtakenmostlyonmerit.Thefourstoriesnarratedabovecouldwellbemyths.Buttheyhavemadethepowersthatbeawareoftheirdeliverables.Ifmythscanbeusedtoimprovethequalityofgovernancemorepowertothegristmills.Ascitizensthatsallthatshouldmattertous.Moral1Modiwontallowanyonetostepoutofline.2Modireportedlycallsupministersanddepartmentalsecretariesontheirofficelandlinesbetween9.00and9.30amandagainafter7.00pm.Itcouldbeonesecretaryonedayandanotherministerthenext.Nooneknowswhohewillcallnext.ResultMinistersandtheirbabusreporttoofficesharpat9.00amandworklateeveryday.AndyestherowsofwhiteAmbassadorswithredbeaconsthatcouldbefoundtillrecentlyparkedatDelhiGolfClubandtheDelhiGym-khanaClubeveryafternoonassecretariesenjoyedlongleisurelyluncheshavebecomehistory.Modiiscashinginonfeartodelivergovernance.Morepowertohim.Moral2InModisgovernmenteveryoneisaccountable.3TheresanothermythdoingtheroundsinIndiascapitalModireportedlyscansthenewspapersandnewschannelsverycarefullyandpullsupministersandbureaucratsforinappropriateoroutofturncomments.Resultagovernmentthatusedtoleaklikeasievetillthreemonthsagohasbecomedifficulttopenetrate.Journalistsarecomplainingbuttonoavail.Leaksarethelifebloodofdemocracymanybleedingheartsarescreeching.Moral3Itsnotgoingtobebusinessasusualanymore.4ModireachedouttoeveryoneofIndiasneighboursbyinvitingthemtohisswearinginbutpulledtheplugontalkswithPakistanwhenhethoughtIslamabadwascrossingtheredline.AnalystswhohadthoughtModiwouldlikeIKGujaralABVajpayeeandManmohanSinghbeforehimturnablindeyetoPakistaniprovocationsandwalktheextramileinpursuitofpeacegotarudewakeupcall.Modihasacquiredanimageofbeingomniscient.ConsiderthesestoriesthataredoingtheroundsofDelhiscorri-dorsofpower September201414IndiaGlobalBusinessMoral4ExpecttheunexpectedfromModi.5TheModigovernmentriskedtheopprobri-umoftheworldatlargebyblockingthetradefacilitationagreementbecauseofitslegiti-matefearsthatthefoodandlivelihoodsecuri-tyofmillionsofpoorIndians.ThiswasinstarkcontrasttoIndiasinternationalrecordofstayingwiththeconsensusanditseffortsinthepasttoavoidrockingtheboat.ThisisnottosaythatIndiahasntgoneagainstglobalopinioninthepast.ButithasalwaysbeenaspartofabroaderThirdWorldcoalition.ByriskingisolationattheWorldTradeOrganisa-tionModiwassignalingtotheworldthathewasntinterestedinwinningbrowniepointswiththeWest.Moral5UnderModiitwillalwaysbeIndiafirst.AcaveatwillbeinorderhereDuringhisverysuccessfulstintasChiefMinisterofGujaratheputhisstateaheadofeverythingelse.Itwasnotapolicybasedonsplendidisolationbutratheronenlightenedselfinterestwherehereachedouttotheworldatlargetoattractinvestmentsandensureotherbenefitsforhisstate.ThissamepragmatismsomewouldcallitastuteGujaratimercantilismislikelytobethehallmarkofhisprimeministershipandthecornerstoneofhisgovernmentsengage-mentwiththeworldatlargeandtheWestinparticular.AsthemonthspassModiwilldoubtlessfinetunemanyofthesepositionsabandonsomeandembracenewones.Butthreemonthsintohisterminofficethebroadcontoursofhisworldviewarealreadyquiteapparent.FEATURE www.indiaincorporated.comSeptember201415Japanvisit2014ModiplansspecialteamTheIndiangovernmenthasmadeaclearplayforJapanasakeyinvestmentdestinationbothinboundandoutboundIhavedecidedtocreateaspecialJapanplusmanagementteaminthePMOwhichwillbeabsolutelydedicatedtofacilitateJapan.-NarendraModiPrimeMinisterofIndiaRECAP-Japan RECAP-JapanSeptember201416IndiaGlobalBusinessTheIndiangovernmenthasmadeaclearplayforJapanasakeyinvestmentdestinationbothinboundandoutboundwithNarendraModisettingupaspecialJapanteaminthePrimeMinistersOfficetoenhancebusinesstiesbetweenthetwocountries.TheIndianPMkickedoffhisfirstmajorforeignvisitwithKyotoovertheweekendandsetthingsrollingwithanaddresstoajointsessionofIndia-JapanbusinessleadersinTokyoon1stSeptember2014.HesaidIhavedecidedtocreateaspecialJapanplusmanagementteaminthePMOwhichwillbeabsolutelydedicatedtofacilitateJapan.Asaresultfacilitieswillincrease.Webelieveinenvironment-friendlydevelop-ment.ItisveryimportantforusthatwegetmaximumcooperationfromJapaninthefieldofcleanenergy.Wecanserveglobalneeds.IndiahopestowinJapanesebackingforanuclearenergypactduringthehigh-profilevisitandJapanesePrimeMinisterShinzoAbeplanstoannounceadoublingofitsdirectinvestmentintoIndiaoverfiveyearsfromsome2billionlastyear.ThetwoPMshaveenjoyedagoodrapportsinceModisdaysastheGujaratChiefMinister.ThistimetheygreetedeachotherwithabearhugataninformalwelcomedinnerinKyoto.ModiisoneofthreepeoplethatAbefollowsonTwitterwhiletheIndianPMisaself-confessedadmirerofAbe.Modihaslistedmanufacturinginfrastruc-tureandenergyaskeyareasforcoopera-tionduringhisvisit.Besidesnuclearcooperationandbullettrainsalsounderdiscussionwillbeaproposaltoformaliseatwo-plus-twoformatfortalksbringingtogethertheforeignanddefenceministersofbothcountriesandthepossiblesaleofanamphibiousaircrafttotheIndiaNavy. ReliancestrikesJapanesebankdealRelianceCapitalhasmadeamajorplayfortie-upswiththejapanesebankingsectorRECAP-Japanwww.indiaincorporated.comSeptember201417RelianceCapitalthefinancialarmoftheAnilAmbaniledRelianceGrouphasmadeamajorplayfortie-upswiththeJapa-nesebankingsector.AgainstthebackdropofIndianPrimeMinis-terNarendraModisongoingvisittothecoun-trythegroupsaiditwouldparticipateinthefinancialinclusionmissionoftheModigovernmentbysettingupRelianceBankalongsideJapansNipponLifeInsuranceNLI.ItalsoannouncedtwofundsforJapaneseinvestorsintheIndianequityandbondmarkets.ThefundswilldirectlyinvestintheIndiansharemarketstocapturelong-termgrowthprospectsoftheIndianeconomy.NLIpresidentYoshinobuTsutsuisaidRelianceCapitalisplanningtosetupitsownbankwhichwillcatertoindividualcustomersandsmallandmediumenter-prisesalloverIndia. RECAP-JapanNLIisalsoparticipatinginthebankprojectaspartofstrategicbusinessalliancewithaviewtoimprovethefinancialinfrastructureandcontrib-utetowardseconomicgrowthofIndia.NLIhasalreadypickedup26percentstakeinRelianceslifeinsuranceandassetmanage-mentbusinesses.RelianceGroupmanagingdirectorAmitabhJhunjhunwalasaidTheprimeministersvisitreinforcesthestrategicfocusofglobalpartner-shipbetweenIndiaandJapan.AsagoodrolemodelofbusinesspartnershipbetweenIndianandJapanesecorporationsRelianceGroupandNipponLifeInsuranceGroupwillfurtherexpandtheircollaborationwhichwillcontributetowardsstrengtheningtherelationsbetweenIndiaandJapan.ThebondfundwilllargelyinvestdirectlyinpermittedIndiangovernmentsecuritiesandlocalcurrencyIndianCorporatebonds.Itwillalsohavethecapabilitytoinvestuptoalimitof20percentinoffshoreforeigncurrencybondsoflargeIndianissuers.BothnewfundswillbemanagedbyNissayAssetManagementCorpJapanwhileRelianceCapitalAssetManage-mentwillbetheinvestmentadvisor.ThelaunchofthetwonewfundscomescloseafterRelianceCapitallaunchedthefirstJapaneseequityfundintheIndianmutualfundssegmentenablingIndianinvestorstoinvestintheglobalJapanesecompanies.September201418IndiaGlobalBusinessJapantoimportearthfromIndia28August2014JapanplanstostartimportsforthejointproductionofmixedrareearthwithIndiafromnextyear.Theagree-mentisexpectedamonganumberofothersduringIndianPrimeMinis-terNarendraModissummitwithhisJapanesecounterpartShinzoAbeinTokyonextweek.IndianRareEarthsawholly-ownedsubsidiaryoftheDepartmentofAtomicEnergyandJapanesetradinghouseToyotaTsushowillsignacontractonjointproductionasearlyasSeptemberaccordingtoreportsintheJapanesemedia.TheIndiancompanywillmakemixedrareearthmaterialsfromuraniumandthoriumoreswhichToyotaTsushowillusetoproduceneodymiumforelectricandhybridcarsaswellaslanthanumceriumandpraseodymium.IndiaisalsohopingtowinJapanesebackingforanuclearenergypactduringthevisit. FACTFILE-Japanwww.indiaincorporated.comSeptember201419AgreementtoacceleratetalksonanuclearenergypactSecuritytiesstrengthenedwitheasingofJapansrestrictionsonexportsofdefenceequipmentandtechnologyDelhiandTokyosetatargettodoubleJapansdirectinvestmentintoIndiainfiveyearsfromsome2billionCooperationonconstructionofhigh-speedrailwaysandothertransportsystemsclean-upoftheGangesandotherriversandruraldevelopmentanddevelopmentofsmartcitiesAgreementtoallowimportofrareearthsfromIndiaAgreementtoholdregularjointtrainingexercisesinmaritimedefencesomeofwhichwillinvolvetheUS.-MrNarendraModiPrimeMinisterofIndiaIfAsiaistobecometheleaderinthe21stcenturyJapanandIndiashouldlead.Theworldknowsthe21stcenturyisAsiascentury.Butitsshapeandqualityarenotyetclear.ThiswillbedecidedbyhowJapanandIndiaworktogether.Webelieveinenviron-ment-friendlydevelopment.ItisveryimportantforusthatwegetmaximumcooperationfromJapanintheeldofcleanenergy.Wecanserveglobalneeds.ModisgroundworkasGujaratCMSOMEHIGHLIGHTSASPMHondatosetupmanufacturingplantinVithalapurGujaratwithaninvestmentof661.75millionGujaratVentureFinanceLimitedislookingatfloatingafundexclusivelyforJapaneseventuresinGujaratArkrayHealthcarehasacquiredthein-vitrodiagnosticsIVDbusinessofGujarat-basedSpanDiagnosticsLimitedMitsubishiAluminumCotoupindustrialunitinexclusiveJapaneseclusterinnorthGujaratHitachisplantinKadiGujaratinauguratedJanuary2013ToyoInkIndiasetupitssecondplantinIndiainDahejGujaratandsignedaJVwithGujarat-basedHeubachColourPvtLtd RECAP-JapanJapanpreparesforIndianteapartyWhenJapanesePrimeMinisterShinzoAbewelcomeshisIndiancounterpartandgoodfriendNarendraModiatatraditionalJapaneseceremonialteapartyintheformerimperialcapitalofKyotoofficialsofthetwocountrieswillbework-ingfuriouslyawayfromthearclightsontryingtofinaliseacivilnucleardealandotheragreementsthatwilldeepenthestrategicanddefencerelation-shipbetweenAsiasoldestandrichestdemocracyandtheworldslargestdemocracy.Chinawillbetheinvisible800poundgorillaintheroomwhenthetwoprimeministerssitdownfortea.BothcountrieshavefesteringborderdisputeswiththeAsiangiantbuttheIndiansidetookpainstoplaydownanysuggestionofNewDelhiwarm-inguptoTokyoinabidtocounterChineseinfluenceinAsia.HighontheagendaoftheIndiangovernmentisthenucleardealthatwillgiveIndiaaccesstothelatesttechnolo-gytorampuppowerproduction.ThissectorisstrugglingtofinditsfeetinIndiabecauseofproblemsovercoalmininggaslinkageslandacquisitionissuesandfinancingtroublesandthusholdingupthecountryseffortstoencouragefasterindustrialization.Butseveralsignificantroadblocksremain.Japanwhichhaspainfulmem-oriesofHiroshimaandNagasakiaswellasthemorerecentdisasterattheFukushimanuclearreactorwantsironcladguaranteesthatIndiawillnotcarryoutfurthernucleartestseitherwithSeptember201420IndiaGlobalBusiness RECAP-Japanwww.indiaincorporated.comSeptember201421InamovetostrengthentieswithIndiaJapanhaspledgedtoinvest33.8billioninIndiaoverthenextveyears.TheannouncementwasmadeaspartofajointstatementissuedaftermeetingbetweenvisitingIndianPrimeMinisterNarendraModiandhisJapanesecounterpartShinzoAbe.TheinvestmentsfromJapantoIndiaincludingOcialDevelopmentAssistanceODAduringave-yearperiodwillbeforpublicprivatepartnershipPPPprojectsinIndiangovernmentsinitiativesininfrastructurebuild-ingofsmartcitiesintroductionofbullettrainsmanufacturingcleanenergyskilldevelopmentwatersecurityfoodprocessingandagroindustryagriculturalcoldchainandruraldevelopment.BothcountriesplantodoublethenumberofJapanesecompaniesinvestinginIndiaandhaveagreedtolaunchIndia-JapanInvestmentPromotionPartnershiptosupporttheseinvest-ments.Japaneseorindigenoustechnology.IndiahaspointedoutthatithasimposedavoluntarymoratoriumonsuchtestsadecisionthattheUSandmuchoftherestoftheworldhasacceptedbuttheJapa-nesesideapparentlywantssomethingmorebinding.TheIndiansideishopingthatModipersonalequationwithAbewillbeenoughtoovercomeJapanesewarinessbutapotentialdealremainsuncertainevenadaybeforetheIndianPMisscheduledtoleaveforJapan.ThedealifitmaterialiseswillintheoryenableIndiatoaccessthelatestN-technology.Butthiscountrysliabilitylawswhichimposestiffpenaltiesonequipmentsuppliersintheeventofanaccidentremainsamajorstickingpoint.YetanotherhighprofileitemonModisagendaisadealtobuytheUS2amphibi-ousaircraftforIndiasdefenceforces.TheIndiansideiskeenontransfertechnologytomaketheplaneinIndiabutthatwilldependonthenumbers.JapanwillbewillingtotransfertechnologyonlyifIndiaordersasufficientlylargenumberofplanes.NeithersidehasdisclosedhowmanyaircraftIndiawants.Japanmakesinfrastructurepledge02Sept2014 RECAP-JapanIndianPMtogetdowntobusinessinJapanOnedoesnthavetolookbeyondthebusinessdelegationthatwillaccompanyIndianPrimeMinisterNarendraModionhistriptoJapantorealisethisgovernmentmeansbusiness.WhenheboardshisflighttoKyotohewillvisitthatcityfirstbeforeheadingforTokyoonAugust302014hewilltravelwithwhatisarguablythemosthighpoweredteamofbusinessleadersevertobepartofanIndianPrimeMinistersentourage.FinanceministerArunJaitleyhadsaidinParlia-mentrecentlythatthisgovernmentwaspro-busi-ness.Helatertweetedthesame.ThiswasinstarkcontrasttoearliergovernmentsespeciallythoseledbytheCongressthatflauntedtheirsocialistpro-poorleaningstotryandwinbrowniepointswithvoters.Thereisnocontradictionbetweenbeingpro-poorandpro-businessJaitleyhadsaid.Onlywhenbusinessesgrowandprospercanthecountrygeneratejobsandthegovernmentgetrevenuesfortheupliftofthepoor.Thecompositionofthedelegationsuggeststhegovernmentintendstowalkthetalk.ThelistreadslikeawhoswhoofIndianindustry.TheresMukeshAmbanichairmanofRelianceIndustriesLtdRIL.HeisIndiasrichestmanandRILisIndiaslargestprivatesectorcompa-ny.ThentheresGautamAdanichair-manofthemassivebutcontroversialAdaniGroupwhoisperceivedtobeclosetoModi.KumarMangalamBirlachairmanoftheAdityaVikramBirlaGrouprepresentsthevenerableBirlaclanwhichhasapresenceinalmosteveryindustryfromaluminiumtosugartoshippingtofinancetocementandtextilesandreadymadeapparel.ThereinthedelegationincludeSunilMittalchairmanBhartiEnterprisePawanMunjalvicechairmanandMDOHeroMotocorpAzimPremjichair-manWiproHariBhartiaco-chairmanSeptember201422IndiaGlobalBusiness RECAP-Japanwww.indiaincorporated.comSeptember201423JapanslargestclothingchainUiqloisexplor-ingoptionstosourcegarmentsfromIndiaforexportingtoothercountries.DuringarecentvisitofUniqloschairmanTadashiYanaitomeetIndianPrimeMinisterNarendraModiithademergedthatthewhol-ly-ownedsubsidiaryofFastRetailingCo.Limit-edhadexpresseditsinterestindevelopingitsbusinessinIndiaandmayapplyunderthesinglebrandsectorroute.UniqlohasbeeneyeingtheIndianmarketforsometimebuthadpostponeditsIndiaplansbecauseofuncertaintyinthemarket.ItisbelievedthatthecompanycouldintherstphasesourcefromIndianmarketandopenstoresinthenextphase.FastRetailinghasmanufacturingpartnersinChinaVietnamBangladeshandIndonesia.Indiaexportsaround15billionworthofgarmentseachyearandleadingbrandslikeZaraGAPandMarksSpencerhavesomeoftheirapparelmadeinIndia.Foundedin1949Uniqloisacasualweardesignermanufacturerandretailer.Thecompanyhasmorethan2000storesspreadacrosstheglobe.UniqlomaysourcefromIndia12August2014managingdirectorJubilantGroupandEssarGroupchairmanShashiRuia.ThenthereisBabaKalyanichairmanKalyaniGroupDilipShanghvivicechair-manSunPharmaceuticalsKiranMazum-darShawCMDBioconSRamadoraivicechairmanTCSAMNaikchairmanMDLarsenToubroHarshNeotiachair-manAmbujaNeotiaGroupRCBhargavachairmanMarutiSuzukiChandaKoch-harMDCEOICICIBankRajivModichairmanMDCadilaPharmaceuticalsDKSarrafCMDONGCSunilSrivastavaCMDIndianOilCorporationTalleenKumarMDCEODelhiMumbaiIndustri-alDevelopmentCorporationandAjayShiramchairmanDCMShriram.ThreenotableabsenteesfromthelistareCyrusMistrychairmanofthesalttoautotosteeltosoftwareandmuchelseinbetweenTataGroupAnandMahindrachairmanofcartwo-wheelerandtractormakerMahin-draMahindraandAnilAmbaniyoungerbrotherofMukeshandchairmanoftheReli-anceAnilAmbaniGroup.IndiaInclearnsthatthePMOhadcontactedthembuttheyrecusedthemselvesbecauseofpriorcommitments.TheModigovernmentisdependingheavi-lyonJapaneseinvestmentstoturnIndiaintoamanufacturinghubandanalterna-tiveinvestmentdestinationtoChina.Japanistheprimaryfinancieroftheambi-tious90-billionDelhiMumbaiIndustrialCorridoradedicatedhighspeedraillinkconnectingIndiascommercialandpoliticalcapitals.EnrouteareplannedseveralsmartcitiesandindustrialclusterthatcanbecomeablueprintforturningIndiasmanufacturingdreamsintoreality.TheteamofIndianindustrialistswillpartici-pateintheIndia-JapanCEOForum.Detailsoftheagendaforthemeetingarestillbeingfinalised. RECAP-JapanSeptember201424IndiaGlobalBusinessAnalysisModisbuildingplanakintopost-warJapanTwodivergenttrendsarevisibleintheIndianeconomy.FactoryoutputasmeasuredbytheIndexofIndustrialProductionIIPdroppedsharplyto3.4percentinJunefrom5percentinMay.ButareportinEconomicTimessaidnetprofitsofasampleof2000companiesrose43percentinthefirstquarterof2014-15quarterendedJune2014.Thesamplethereportsaidexcludesbanksfinancecompaniesandoilandgasfirms.HowdoesonreconcilethesetwosetsofdatathatlookonthefaceofitmutuallyexclusiveTheanswercouldpossiblybehiddeninyetanothersetofdatatheHSBCPurchasingManagersIndex.InJuly2014theindexjumpedto53afterhoveringbetween49and51-levelsformorethanayear.Ascoreoflessthan50indicatescontractionwhileascoreofabove50pointstoanexpansion.SoistheeconomyturningaroundorisitnotAveryseniorindustrialistexplainedThereisalotofslackinthesystem.Manycompaniesarestrugglingwithexcessinventoryandsevereovercapaci-ty.Itwilltaketimetoreachequilibrium.ExpertsandanalystshaveexplainedthegrowthinPMIasinventorymanagementcompaniessellinggoodsthatithadproducedearlierbutwasunabletosell.Netsalesofthe2000companiesreviewedbythenewspaperregisteredagrowthof12.7percentduringthequar-terunderreview.Intheyear-agoquarterrevenueshadgrown5.2percentandnetprofithaddeclined16.5percent.AndtellinglyITandpharmawhichdependprimarilyonexportsandFMCGcontrib-uted60percentoftheprofits.Takingallthesethreesetsoffigurestogetherthebigpicturethatemergesshowsthatsalesarepickingup. RECAP-JapanSeptember201425www.indiaincorporated.comAutosalesareridinghighbutrealestateandconsumerdurablesarestillsluggish.Thismeansconsumersareslowlyopeningtheirpursestringsbutonlyveryhesitating-lyprovidinganopportunitytocompaniestoclearoutexcessinventoryaftertwoyearsofstagnatingsales.Idontexpectmuchinvestmentincapacityexpansionintheneartomediumtermtheseniorindustrialistsaid.Whathemeansisthatoverthenext6to18monthscompanieswillclearoutstocksthathavebuiltupinthegodownsandasdemandpicksuprampupproductiontofullcapacity.CapitalexpenditureonfreshcapacitywhichwillcreatefreshjobsandprovideafreshimpetustoGDPgrowthwillfollowonlyafterthat.FourinitiativesannouncedbytheNarendraModigovern-mentcanhastentheprocess.Theplantobuild100newsmartcitiestheschemetoprovidehousingtoeveryfamilyby2019theDiamondQuadrilateralconnectingthefourcornersofIndiawithhighspeedraillinksandtheproposaltobuildabout75milliontoiletsforthepoorestofthepoorcanpotentiallyunleashabout100billionworthofinvestments.Alargepartofthiswillhavetocomefromforeignandprivatesectorsourcesbutunliketheinvestmenttheindustrialistreferredtoabovespokeaboutthisinitiativewillhavetobegovernment-led.Sincealltheseprojectshavemassiveforwardandbackwardlinkagestheprevi-ousNationalDemocraticAlliancesGoldenQuadrilateralprojectsparkedarevivalandboomin237differentsectorsahostofindustriesacrosstheboardwillbenefit.SomethatimmediatelycometomindaresteelcementcableselectricalsandEPC.TheconstructionsectorisalsoamongthelargestemployersinIndia.Suchahumungousbuildingprojectcanprovidejusttherightamountofpushtokickstartthestutteringeconomymuchlikethereconstruction-fuelledboominpost-WorldWarIIJapan.Sotheglassiscurrentlyhalffull.Thatsanimprovementfromthesituationprevailingafewmonthsago.Butitmaytakeaboutsixtoeightquartersbeforeitstartsoverflowingitsbrim. RECAP-JapanSeptember201426IndiaGlobalBusinessJapanandSouthKoreahaveapproachedthenewIndiangovernmenttosetupanindus-trialzoneinthetownofNeemranainRajas-than.TheNeemranasegmentwhichispartoftheDelhiMumbaiIndustrialCorridorDMICisfastemergingasanindustrialhub.SouthKoreahasurgedthestategovern-mentofRajasthanforanindustrialzoneinNeemrana.JapanwhichalreadyhasanindustrialzoneinNeemranahassoughtasecondunitinthesamearea.ManyJapanesegroupshavealreadysetupbasethereandithastriggeredarealestateboominthesmalltown.Thesenewdevelopmentsaresettotriggerafreshroundofinvest-mentsintheregion.Delhi-MumbaiIndustrialCorridorDevelop-mentCorporationhasidentiedtheKhush-khera-Bhiwadi-NeemranaKBNasthepriorityinvestmentregion.EventheRajasthangovernmentinordertoattractinvestmentsiskeentorevisitthelandacquisitionlawsandhasalreadytakenstepstorevamplabourlaws.JapanKoreaseekindustrialzone22July2014JapansMeijiGrouphasacquiredBanga-lore-basedpharmaceuticalcompanyMedre-ichLimitedwhichisinvolvedinthemanu-factureandmarketingofarangeofpharma-ceuticalpreparations.TheJapanesegrouphasacquiredthecompletestakeintheIndiancompanythroughitspharmaceuticalarmMeijiSeikaPharma.Meijiboughtthecompanyfor290millionaspartofadealwhichincludespurchasingthe25percentstakeofSinga-poregovernmentsinvestmentarmTemasekHoldingsPteLimited.ThedealmarkstheentryoftherstJapanesecompanyintheIndianpharmasectorafterDaiichiSankyosill-fatedacquisi-tionofRanbaxybackin2008.TheacquisitionwillhelptheJapanesecompanyexpanditsgenericportfolioandgainaccesstotheIndianmarket.MeijiplanstoentertheglobalgenericsmarketparticularlyinAsiaandtheemergingmarkets.Medreichmanufacturesandmarketsarangeofpharmaceuticalpreparationsacrosscategoriessuchascardiovasculardiabetesanti-fungalpenicillinsandrespiratoryamongothers.ItsellsitsproductstoEuropeAsiaandAfricaanditsmainbusinesspartnersincludeGSKAdcockIngramPzerSanoNovartisActavisandMylan.MeijibuysIndianpharmarm12June2014 RECAP-Japanwww.indiaincorporated.comSeptember201427BullettrainshighonModisJapanagendaBullettrainsarelikelytofeaturehighonNarendraModisagendaonhisvisittoJapan.Intherun-uptohisdepartureforKyotoonAugust30thegovernmentnotifiedtheCabinetdecisiontoallow100percentforeigndirectinvestmentFDIinrailwayswhichwillallowJapaneseandotherforeignfirmstoinvestinhighspeedtrainsandotherrailwayinfrastruc-tureprojects.InIndiadecisionsbytheCabinetcomeintoeffectonlyaftertheyarenotifiedintheOfficialGazette.Thegovernmenthasalreadyannouncedplanstodevelopa525kmhighspeedraillinecosting10billionbetweenIndiasfinancialcapitalMumbaiinthewesternstateofMaharashtraandAhmedabadinneighbouringGujarat.ModiwasChiefMinisterofGujaratbeforebeingelectedPrimeMinisterofIndiainMaythisyear.IndiawillaskJapantotransferthetechnologyforbullettrains.Theideaistoupgradeitsexistingrailinfrastructureindustryandmanufacturethesetrainsandalliedsystemswithinthecountry.UnofficiallygovernmentsourcessaidtheyarentverykeenonrivalChinesetechnologybecauseofsecurity-relatedconcerns.TheIndianRailwaysandJapanInterna-tionalCooperationAgencyJICAareatpresentpreparingareportontheproposedrailcorridor.Theprocessofshortlistingconsultantsandotherpreliminaryactivitiesontheprojectwillbeginshortly.JapanisalsohelpingIndiabuildtheDelhi-MumbaiFreightCorridoradedicatedhighspeedraillinktocarry September201428IndiaGlobalBusinessRECAP-JapanMumbai-headquarteredIndianmultination-alconglomerateLarsenandToubroLThasthroughitssubsidiarysignedadealwithJapanesesteelforgingscompanyJapanSteelWorksLimited.ThedealsignedbyLTSpecialSteelsandHeavyForgingsLTSSHFinvolvesatechnol-ogytransferagreementforaperiodofveyears.Theagreementcoverstransferofcriticaltechnologyformeltingsteelandheavyforgingsmadefromingotsweighingupto200MTforthehydrocarbonthermalpowersteelandcementsectors.Foundedin1907JapanSteelWorksisamanufacturerofheavyforgingsforpowerplantssteelandothersectors.ThenewtechnologycollaborationsupportsLTscommitmenttoremainattheforefrontofmanufacturingtechnologyacrosskeysectors.LTSSHFsuppliescriticalheavystainlesssteelandalloysteelforgingsforhighpressurereactorsandheatexchangersaswellasspecialsteels.ParentcompanyLTisa14-billiontechnol-ogyengineeringconstructionmanufactur-ingandnancialservicesconglomeratewithglobaloperations.LTstrikesJapanrmdeal28May2014freightbetweenIndiaspoliticalandfinan-cialcapitals.TheprojectincludesplanstobuildseveralsmartcitiesandindustrialmanufacturingclustersenroutetoprovideafilliptoIndiasindustrialsectorencourageJapaneseandotherforeignfirmstosetupmanufacturingbasesinIndiaanddecongestthecountrysovercrowdedcities.InhisfirsttermasPrimeMinisterofJapanShinzoAbehadspokenofanArcofDemocracybetweenJapanandIndiaemergingasanewpoleintheglobalpowermatrix.ItwasinterpretedasathinlyveiledsuggestiontobuildanAsiandemocraticallianceagainstanincreasinglyassertivecommunistChina.AbewholikeModiisaliberalisersharesagoodpersonalchemis-trywiththeIndianPrimeMinister.InhisfirsttermasPrimeMinisterofJapanShinzoAbehadspokenofanArcofDemocracybetweenJapanandIndiaemergingasanewpoleintheglobalpowermatrix. www.indiaincorporated.comSeptember201429RECAP-JapanRelianceIndustriesraises550mnfromJapanIndianconglomerateRelianceIndustriesLimitedRILhasraisedaround550millionfromJapanesebankstopart-financetheproposedexpansionofitspetrochemicalplant.Theloanwillalsogotowardssettingupanewgasificationplantandrefineryoff-gascrackerunitoverthenexttwotothreeyearsacompa-nystatementsaid.Thedebthasbeenco-financedbyJapanBankforInternationalCooperationJBICandJapa-nesebanksbackedbyNipponExportandInvestmentInsuranceNEXI.Thismarkstheeighthoccasionforthecompanytoraisealargedebtusinganexportcreditagency.JBICwillprovidedirectfinancingofupto330millionandtheJapanesebankssupportedbya95percentNEXIinsurancecoverwillfinanceupto220million.Thisdebtfacilitywillhaveadoor-to-doortenorof12yearsandwillbeusedtofinancecontractsfortheimportofgoodsandservicessignedwithmorethan20Japanesesuppliers.TheparticipatingbanksareBankofTokyo-MitsubishiUFJSumitomoMitsuiBankingCorporationMizuhoBankandthreeregionalJapanesebanksnamelyGunmaBankHachijuniBankandChibaBank.WiththisfacilityNEXIhasestablishedanewinsuranceprogramthatextendssupporttoJapaneseregionalbanksforfinancingsuchoverseasprojectsthestatementadded.ThecreditlinewillfinanceRILsprocure-mentofgoodsandservicesrelatedtotheoilrefiningandpetrochemicalplantsinJamnagarandhelpexpandcapacity. RECAP-JapanSeptember201430IndiaGlobalBusinessTokyo-basedelectroniccommercecompanyRakutenislikelytomakeanentryintotheIndianmarketinthecomingfewmonthswithatravelandhospitalityportal.TheJapanesecompanyisseekingastrategicalliancetotapthefastgrowinge-commercesectorofIndia.Itisalsoactivelyexploringgettingintoback-endsolutionssuchaslogisticsthroughanacquisition.Rakutenwhichisthelargeste-commercewebsiteinJapanhasvariousbusinessessuchase-retailtravelnancialservicesthroughitsvariousportalsliketheRakutenGlobalMarketRakutenCouponsTicketStaretc.Its100percentsubsidiaryRakutenTraveloperatesanonlinehotelreservationwebsitewithover1.8millionroomnightsbookedpermonth.Thermhasaccesstomorethan20000domesticand15000internationalhotelsandhasapresenceinSouthKoreaandChina.ItbelievesthatthehotelspaceispresentlyfragmentedandthereisscopefornewentrantsastheexistinghospitalityandtravelportalssuchasMakeMyTripYatraCleartripGoibiboandUS-basedExpediamostlyfocusonticketbooking.IndiaslargestmultinationalsoftwareservicesproviderTataConsultancyServicesLtdTCShasenteredintoanagreementwithJapanslargestintegratedbusinessenterpriseMitsubi-shiCorptocreateaJapanesesoftwareservicesprovider.AccordingtothedenitiveagreementsignedTataConsultancyServicesJapanLtdNipponTCSSolutionCenterLtdandITFrontierCorpora-tion-awhollyownedunitofMitsubishi-willbemergedtogethertoformasingleentity.ThemergednewentitywillbeoperationalfromJulyandTCSwillhold51percentstakewhereasMitsubishiwillhold49percentstake.TCShasbeenpresentinJapansince1987andhascontinuedtoinvestinthecountrybysettingupnewfacilities.ThetransactionshowsthecompanyscommitmenttotheJapanesemarket.TheJapaneseITservicesmarketisestimatedtobealittleover125billionbutJapanaccountsforlessthan2percentofIndiassoftwareexportsbecauseoflanguageandculturalbarriers.Japanesee-retailerplansIndiaentryTCSentersintoaJVwithMitsubishi25April201421April2014 RECAP-Japanwww.indiaincorporated.comSeptember201431JapanesermengagedinmanufacturingcapitalgoodsMeidenshaCorporationhasmadeitsIndiaforayintotheelectricaltransformersbusinessthroughajointventurewithpowerequipmentmanufacturerPrimeElectricLtd.AccordingtotheagreementMeidenshaacquired23percentstakeintheIndiancompanyforanundisclosedamount.ThedealwillhelpMeidenshaexpanditspowertransmissionanddistributionbusinessinIndiaandemergingcountries.ThisistherstmajoracquisitionbytheJapanesecompanyinthepowertransmissionanddistribu-tionbusinessinIndia.PrimeElectricispartofPCIgroupwithheadquar-tersinGurgaon.Primegrouphasinterestsinhi-techinstrumentationcapitalgoodsgeo-tech-nologypowerengineeringaviationleasenanceimportsexportsaswellasinformationtechnolo-gy.IthasitstransformersproductionfacilityintheNaidupetaspecialeconomiczoneSEZinAndhraPradeshwithconnectivitytoChennaiEnnoreandKrishnapatnamports.MeidenshaCorpmanufac-turesandsellscapitalgoodsincludinggeneratorssubstationequipmentelectronicequipmentandinformationequipmentinJapanandglobally.IndianpharmaceuticalcompanyDrReddysLaboratoriesiskeentomakeafreshforayintothegrowingJapanesemarket.Thecompanyisprioritisinggettingtherightpartnertoenterthegenericspaceinthecountry.Itbelievesthatthermalreadyhasaproductprolereadyandexperiencefromlessonslearntthroughatermi-natedjointventurewithFujilm.TheHyderabad-baseddrugsmajorrstsignedamemorandumofunderstandingMoUwithFujilminJuly2011toenterintoanexclusivepartnershipinthegenericdrugsbusiness.HowevertheydecidedtoterminatethisJVlastJune.ThefocusoftheJapanesegovernmenttoincreasethegenericvolumeasapercentageofgenericandlisteddrugsto60percentin2018isthedrivingforceintheregion.Weareexploringalloptionsinthesensewehaveproductprole.WehavealreadygonethroughwithFujilmwhichdidnotwork.Wehavetobesurethatwedontmakethosemistakesagain.ThepriorityistogetintotherightplantoenterintotheJapanesemarketsaidKSatishReddyvice-chairmanandmanag-ingdirectorDRL.JapanesermbuysstakeinPrimeEletricDrReddyseyesJapanesemarket07April201422July2014 RECAP-JapanSeptember201432IndiaGlobalBusiness26March2014GVFLLimitedformerlyknownasGujaratVentureFinanceLimitedandregardedasapioneerofventurecapitalinIndiaislookingatoatingafundexclusivelyforJapaneseventuresinGujarat.GVFLproposestoraisecloseto1billionandwillbethelargestfundeveroatedbythecompany.Theticketsizeofthefundwillbe33-82millionperventureandithopestoachievenancialclosureforthefundby2016.RecentlyJapanhasagainshowedinterestininvestinginIndiaandspeciallyGujaratandthefundplanstotapthisopportunity.ThermisonanexpansiondriveandisintalkswithseveralJapaneseandotherSouthEastAsianinvestorstoinvestthroughthefund.GVFLhassinceitsinceptionmanagedsevenfundsandinvestedin81technologyandgrowthstagecompanies.ItisalsoplanninganotherSMEsdedicatedfundValueMultiplierFundsoon.Itsportfoliocompa-niesincludeE-CubeIndiaWindfarmProjectAlfaCorpusclesUshdevPowerHubtowniNurtureEducationandRatnakarEstate.Stateownednaturalgasprocessinganddistri-butioncompanyGAILLtdhassignedaMemo-randumofUnderstandingMoUwithJapanesecompanyChubuElectricPowerCo.InctoexplorepossibilitiesforcollaborationintheareaofjointliqueednaturalgasLNGprocure-ment.RecentlytheincreasingdemandforLNGhasledtosoaringprices.IndiaistheseventhlargestLNGbuyerandJapanistheworldsbiggestimporterofLNGandsofarbothhavebeenbuyingthegasseparately.BothChubuandGAILhaveconsiderablesyner-gybetweentheirLNGbusinessprolesandthecollaborationbetweenthetwocompaniesforjointlypursuingLNGprocurementandotheralliedbusinessopportunitieswouldhelpthemsourceLNGvolumesoncompetitiveterms.GAILsmoveisinsyncwithitsrecenteortsinestablishingandpromotingAsiaLNGForumasortofAsianLNGbuyersclub.GAILisalsoactivelyworkingtowardsestablishingaregion-algastradinghubforAsiaaswellasanAsiangasindex.GVFLtooatfundsforJapaneseventuresGAILsignsMoUwithJapaneseCo.25March2014 RECAP-Japanwww.indiaincorporated.comSeptember20143307March2014IndiasbiggestdrugmakerbyvalueSunPharma-ceuticalsIndustriesLimitedisexploringopportu-nitiestoenterthelucrativegenericsmarketinJapanthroughapartnershiporacquisition.Japanisattractinggenericmanufacturerstomakelowcostdrugstobringdownthecostofhealth-careforanageingpopulation.Politiciansarealsolobbyingformoregenericdrugstogoonsaleinthecountry.Indiaishometomanybiggenericdrugmanufac-turersbutofthemonlyLupinhasmadeanysigni-cantinroadsintotheJapanesemarkets.SunPharmawhichgetsmorethanhalfofitssalesfromtheUSisstillexploringthebeststrategytofollowtoentertheJapanesemarketandhasnotyetmadeanydecision.Thecompanyhasexpandedinthelastfewyearsprimarilythroughacquisitionsandhasalwaysbeenopentomoreacquisitions.Mumbai-headquarteredSunPharmamanufac-turesandsellspharmaceuticalformulationsandactivepharmaceuticalingredientsAPIs.Thecompanyhasmanufacturingacross23locationsincludingtheUSCanadaBrazilMexicoandIsrael.OneofIndiaslargestedibleoilcompaniesRuchiSoyahasformedajointventurewithJapanesermKMDIInternationalwhichisatraderandmarketerofhighqualitysoyaandCanadiansoyabeanresearchrmDJHendrickInternationalIncDJHII.AccordingtotheagreementtheIndianrmwillholda55percentstakeintheJVcompanyDJHIIwillhold35percentstakeandtheremaining10percentwillbeheldbyKMDIInternational.Thejointventureisaimedatundertakingresearchproducingmarketinganddistribut-inghigh-yieldingnon-genetically-modiednon-GMsoybeanseedswithahigheroilpercentageandnutritionalvalue.Italsoaimstowidenbestcropmanagementpracticesforsoybeanvarietiestailoredfordierentagroclimaticzonesofthecountryandadaptvarietiestoincreasetheyieldandsupplyofsoyafoodproducts.RuchiSoyawasfoundedin1986andisaleadingmanufacturerofedibleoilsvanaspatibakeryfatsandsoyfoods.RuchiisalsooneofthebiggestexportersofsoymeallecithinandotherfoodingredientsfromIndia.SunPharmaeyesJapangenericsRuchiSoyainJapanese-CanadianJV25Feb2014 RECAP-JapanSeptember201434IndiaGlobalBusiness19March2014OneofIndiaslargestedibleoilcompaniesRuchiSoyahasformedajointventurewithJapanesermKMDIInternationalwhichisatraderandmarketerofhighqualitysoyaandCanadiansoyabeanresearchrmDJHendrickInternationalIncDJHII.AccordingtotheagreementtheIndianrmwillholda55percentstakeintheJVcompanyDJHIIwillhold35percentstakeandtheremaining10percentwillbeheldbyKMDIInternational.Thejointventureisaimedatundertakingresearchproducingmarketinganddistributinghigh-yieldingnon-genetically-modiednon-GMsoybeanseedswithahigheroilpercentageandnutritionalvalue.Italsoaimstowidenbestcropmanagementpracticesforsoybeanvarietiestailoredfordierentagroclimaticzonesofthecountryandadaptvarietiestoincreasetheyieldandsupplyofsoyafoodproducts.RuchiSoyawasfoundedin1986andisaleadingmanufacturerofedibleoilsvanaspatibakeryfatsandsoyfoods.RuchiisalsooneofthebiggestexportersofsoymeallecithinandotherfoodingredientsfromIndia.PanasonicplansIndiahub17Feb2014JapanesestangrmOutsourcingInchasenteredintoapartnershipwithBangalore-basedAlpConsultingwhichisintostangandHRoutsourcingservicestomarkitsentryintheIndianmarkets.AccordingtothepartnershiptheJapanesermhasacquireda51percentstakeinAlpConsultingforavalueofabout5million.ThedealwillhelpOutsourcingIncservethehiringneedsofitshomecompanieswhichhavebeenshowingakeeninterestintheIndianrms.ItislookingatexpansionbyleveragingthesynergiesofmanufacturingandITengineeringoutsourcingservicesprovid-edbytheAlpGroupandprovidingthemtoJapanesecompanies.Foundedin1996AlphassixocesinMumbaiHyderabadDelhiChennaiNoidaandPuneandhasprovidedemploymenttoabout4000individuals.JapantoinvestinIndianhiringrm SECTORFOCUSTELECOMwww.indiaincorporated.comSeptember201435BhartiAirtelispreparingtooff-loaditsAfricatowerassetstoAmericanTowerCorporationATCandAfricasEatonTowers.BhartiAirtelpreparestosellAfricatowersIndiantelecommajorBhartiAirtelispreparingtooff-loaditsAfricatowerassetstoAmericanTowerCorporationATCandAfricasEatonTowers.Accordingtoreportsthesalepricerangesbetween1.5and2billionandinvolvesitsassetsacrossvariousAfricancountriesincludingNigeriaGhanaandUganda.BackinJuly2014Airtelsold3100telecomtowersinfourAfricancountriestoHeliosTowersAfrica.Airtelnowhasaround14500towersleftinAfrica.Airtelisexpectedtousetheproceedsfromthedealtoreduceitsexistingdebtestimatedat9.5billion.EatonTowersofferstowersharingonmorethan1500towersinGhanaUgandaandSouthAfricawhereasATCtoohasservicesintheseAfricancountries.AirtelhadenteredtheAfricanmarketin2010afteracquiringZainTelecomforabout10.7billion.Thecompanynowoffersservicesin17Africancountriesandhasbeenstrugglingtoturnaprofitintheregion.RecentlyBhartiAfricahadenteredintoapartnershipwithBGFIBanktoexpandmobilemoneyaccesstothebankscustomersinAfrica.AspartofthepartnershipAirtelMoneycustomersthatareBGFIBankaccountholderswillbeabletotransfermoneybetweentheirbankaccountsandAirtelMoneychecktheirBGIFaccountbalanceconfirmtransactionsontheirBGIFaccountsorderchequebooksaswellasATMcards. FEATUREIndiaGlobalBusiness5reasonswhytherupeemayslipto63perdollarTherupeefelltoafive-monthlowof61.74againsttheUSdollaronFriday8thAugust2014butrecoveredtocloseat61.15Therupeefelltoafive-monthlowof61.74againsttheUSdollarbutrecoveredtocloseat61.15bytheendoftheday.Analystsaredivid-edonwhichwaytheIndiancurrencyisheaded.Somefeelitwillbottomoutat62perdollarwhileotherssayitwillbreachthe63dollarmark.Crystalballgazinginascenariowithsomanyeconomicpoliticalandgeo-politicalvariablesisfraughtwithriskbutitwillbefairlysafetosaythereisastronglikelihoodoftherupeetobreachingthe62dollarmarkandflirtingwith63levels.WhyReason1Foreigninstitutionalinves-torsFIIshavepumpedinover25billionintotheIndianequitymarketsofarthiscalendaryear.TheseinflowshavebeenthemaindriveroftheBSESensexthebenchmark30-shareindexoftheBombayStockExchangewhichzoomedfromanopeningof21140.48onJanu-ary20141thisyeartoahighof26272onJuly201424beforecorrectingslight-lyto25300levels.Alongthewaytheyhavemademassivenotionalprofits.September201436 FEATUREwww.indiaincorporated.comSeptember201437Manyofthemwillwanttobookthemontheirbooks.LittlewonderthenthatFIIshavesoldsharesworthalmost400millionsinceJuly242014.Thisispartoftheirnormaltradingactivitiesbutmanyanalystssaythistrendmayholdintheshorttomediumterm.Ifthisturnsouttobecorrectthentherupeewillremainunderpressureatleasttilltheendoftheyear.Reason2RaghuramRajangovernorofReserveBankofIndiaRBIIndiascentralbankhaswarnedofapossibleglobalmarketcrashbecauseofcompetitiveeasymoneypoliciesbeingfollowedbytherichnations.RightnowhestheonlyoneexpressingsuchfearsbutbeforeyoudismisshimasyetanotherThirdWorldvoicerantingattheWestpleaseconsiderhiscredentials.In2005atagather-ingtohonourAlanGreenspanwhowasretiringaschiefoftheUSFederalReserveRajanthenaprofessorattheUniversityofChicagosBoothSchoolofBusinesshadpredictedtheglobalmeltdownof2008afullthreeyearsbeforetheevent.Notmanyhadtakenhimseriouslythen.ThethenUStreasurysecretaryLawrenceSummersandahostofothercelebratedeconomistsandcentralbankgovernorshaddismissedRajanasanunreformedLudditewhowistfullylongedfortheolddaysofregulation.Lookatwhathappened.AllofusinIndiaaswellasintheUStheEUandtherestoftheworldarestillpayingforthefollyofnothavingtakenhimseriously.Withoutgettingintothenittygrittyofhowandwhenthismeltdownmighthappensufficeistosaythatifitdoesandgivenhistrackrecordonlyaverybraveoraveryfoolishmanwouldsayitcanthappenthentheemerg-ingmarketwillonceagainseeanoutflowofdollarsashadhappenedlastyear.Resultarunonemergingmarketcurren-ciesincludingtherupeeasFIIsseeksaferhavensinthedevelopedworld.Reason3RajanisonrecordsayingthathebelievesthatIndiaoughttobuildupitsforeignexchangereserves.WhyLetusreadwhathehadtosayaboutitatapressconferencelastweekReserveswillnotbuyusimmunityontheirown.Theywillpreventthesecondroundaftertherunontherupeelastyear.Whatwillbuyusimmu-nityarestrongcrediblepolicies.IfwehavealowfiscaldeficitmoderatecurrentaccountdeficitandlowinflationpeoplewanttobehereButreservesensurethatvolatilitydoesnotgetconvertedintoasortofdeeperminicrisis.ItisfairlysafetoassumethatRBIwillbuydollarstobuildupIndiasforexreservescurrentlyatapproxi-mately315billion.Thiswillpreventthecurrencyfromappreciatingandwill FEATURESeptember201438IndiaGlobalBusinessinfactexertdownwardpressure.AnaddedbenefititwillmakeIndianexportscheaperReason4Theworldseemstohavegonemad.JustlookatWestAsia.JihadistsareplayinghavocinIraqandSyriaandthreateningtodrawmuchoftherestoftheregionintotheconflicttheUShasalreadycommitteditsmilitarytothewarandtheresnosayingwhenitmayend.TheIsrael-Palestinedisputehasexplodedintoafull-scalewar.RussianPresidentVladimirPutinsambi-tionsinCrimeaandUkrainehavetriggeredthebiggestWestversusRussiadisputesincetheColdWar.Investorsandecono-mistsarenervous.Ifanyofthesecrisesescalatefurtherthefragileworldeconomicrecoverymaybegintofalter.Oilpricesmaystartclimbingupagain.ThemainloserstheemergingmarketsincludingIndia.Arisingoilimportbillanddesertingforeigninvestorscanbearecipefordisasterandtaketherupeepast63dollar.Reason5TheUSisrecovering.TheFedhashintedthatitmayincreaseinterestrates.IfthathappensmoneywillflowintoUSbondsandUSequities.WherewillitcomefromEmergingmarketslikeIndia.ResultFIIswillsellrupeestobuydollars.BeforeyouthinktheaboveisadoomsdayscenarioletusclarifytheIndianeconomyismuchstrongertodaythanitwasayearago.Soitsunlikelythatarunontherupeewillsinkitto70dollarorbelow.Alsothelikelihoodofallthesefiveeventshappeningtogetherisveryremote.Butevenifoneofthemcomestruetherupeewillalmostdefinitelyflirtwith63dollarlevels.Reserveswillnotbuyusimmunityontheirown.Theywillpreventthesecondround-RaghuramRajanGovernorofRBI INOTHERNEWSSeptember201439www.indiaincorporated.comRBIleavesinterestratesuntouchedIndiascentralbankleftkeyinterestratesunchangedinlinewithanalystsexpecta-tions.ReserveBankofIndiaRBIgovernorRaghuramRajanmaintainedthereporateatwhichRBIlendsmoneytocommercialbanksandwhicheffectivelysetsthebench-markforindividualbankstosettheirlendingratesat8percent.HealsoleftthecashreserveratioCRRtheproportionofdepositsthatbankshavetokeepwithRBIat4percent.HoweverhecutthestatutoryliquidityratioSLRtheproportionofdepositsthatbankshavetoinvestingovernmentsecuritiesbyhalfapercentagepointto22percentfreeingupanadditionalRs35000croreforbankstolend.Thiscanincreasethesupplyofcredittoindustryandcreatejobs.Indianindustryandinvestorswillbedisap-pointedastheyhavebeencryingoutforaratecuttospurconsumption-ledgrowth.InIndiaanoverwhelmingmajorityofhousescarsandconsumerdurablesareboughtwithbank-suppliedcreditandhighcostofcreditactsasadeterrenttospending.Ex-plainingitsreluctancetocutratesdespitebothconsumerandwholesaleinationshowingsignsofeasingRBIinastatementsaidWithsomecontinu-inguncertaintyaboutthepathofthemonsoonitwouldbeprematuretoconcludethatfuturefoodinationanditsspill-overtobroaderinationcanbediscounted.ItaddedthatitwouldmaintaintheCPIatbelow8percentbyearly2015and6percentbyearlythefollowingyear.FinanceministerArunJaitleyindicatedthatthegovernmentandRBIwereonthesamepage.RBIhaschosentomaintainabalancebetweengrowthandinationwhilekeepingthepolicyratesunchanged.ItisapriorityforthegovernmenttomaintainabalancebetweengrowthandinationhesaidonhisFacebookpage. NEWSINBRIEFSeptember201440IndiaGlobalBusinessHSBCIndiaindexonahighTheHSBCPurchasingManagersIndexPMIhita17-monthhighinJulyasaclearsignofeconomicoptimismunderanewgovernment.Theindextouched53inJulyagainst51.5inJune.Itshowedbusinesscondi-tionsimprovedforaninthconsecutivemonthinJulyascompaniesscaledupproductioninresponsetorobustlevelsofdemand.Thisindexisameasureoffactoryproductionandbasedondatacompiledfrommonthlyrepliestoquestionnairessenttopurchasingexecutivesinaround500manufacturingcompanies.Anindexabove50showsexpansionwhilebelow50indicatesdecline.Thespeedoftherecoveryhasalsoliftedpricepressureswithinputpricesrisingsteeply.ThismeansthattheRBImaynotcheerasloudlyastherestofussaidFredericNeumannco-headofAsianEconomicResearchatHSBC.Thesurveystruckanoteofcautionoverinationininputpriceshavingpickedupsharplyalongwithimprovementingrowth.Firmsnotedhigherpricesforfuelandrawmaterials.Thisisanindicationofstillfragilepositionoftheeconomywherethesupplyresponseisconstrainedbystructuralfactors.PaktoholdIndiatradetalksA25-memberPakistanidelegationwillleavebeinIndiathisweektoattendthefourthmeetingofIndia-PakistanJointForumIPJFandtodiscusstradebetweenthetwocountries.Co-chairmanoftheIPJFfromPakistanSyedYawarAliShahwillleadthedelegationaccordingtoPakistanimediareports.IPJFco-chairmanSunilKantMunjalandofcialsfromtheminis-triesofcommerceandexternalaffairswillrepresentIndiaatthemeeting.Theforumwilldiscussmethodsofimprovingtradebetweenthetwocountriesincludingremovalofnon-tariffbarriersandvisa-re-latedissuesbesidesothers.TheIPJFwasconstitutedbyPakistanandIndiain2013byinclud-ingmembersfromtheprivateandpublicsectorsfrombothsidestotakestepstowardsadvancingtraderelations.TherstmeetingoftheforumwasheldinIslamabadinJunelastyearthesecondinOctoberinNewDelhiandthethirdinFebruarythisyearinLahore. NEWSINBRIEFwww.indiaincorporated.comSeptember201441TheAmtekGroupwhichisoneofIndiaslargestintegratedcomponentmanu-facturershasenteredintoajointventureagreementwithJapanesermRikenCorporationtomanufactureandsellautomobileparts.AspartoftheagreementthenewJVcompanywillbenamedAmtekRikenCastingPrivateLimitedandtheinitialcapitalof4millionwillbeprovidedbyAmtekthroughitscashreserves.ThefoundrywillbelocatedinatBhiwadiinRajasthanandisscheduledtostartoperationsbythefourthquarterof2015.Thenewcompanywillinitiallyproduce15lakhironcamshaftsayearfortheautomobileindustry.TheJVwillgiveAmtekaccesstoRikensnewandefcientshellmouldingtechnologywhichwouldstrengthenitspositionintheenginecamshaftsbusiness.Foundedin1927Tokyo-basedRikenCorporationisengagedinthemanufac-tureandsaleofautomotivecomponentsindustrialmachinerypartsandotherproducts.IthasmanufacturingplantsacrossJapanChinaTaiwanIndonesiaThailandIndiatheUSandMexico.LupininkspactwithSKoreanrmMumbaibasedLupinLimitedhasenteredintoastrategicdistributionpactupwithSKoreanrmLGLifeSciencestolaunchitsanti-diabetesdruginIndia.AccordingtotheagreementLupinwillberesponsibleformarketingandsalesofInsulinGlargineanovelinsulinanalogueunderthebrandnameBasugi-neTMinIndia.TheagreementhasbeenworkedoutonatransferpricethatisLupinwouldbuytheproductfromLGLifeSciencesandwouldthensellitatdecidedprice.ThelaunchwillmarktheentryofLupinintotheinsulinanaloguemarketandwillhelpthecompanyfurtherstrengthenitsdiabetesportfolioenablingittogrowdeeperintothesegmentandfuelgrowthintheyearstocome.InsulinGlargineisindicatedforthetreatmentofadultpatientswithtype1diabetesmellitusorintype2diabetesmellitus.TheoveralldiabetesmarketsizewithintheIndianpharmaceuticalmarketisgrowingat18percentandtotalinsulinanaloguemarketat3yearcompound-edannualgrowthrateCAGRof25percent.AmtekinJapaneseJV September201442IndiaGlobalBusinessCustomerserviceinIndiabyShaiVyakarnamRecentarticleshavepointedtoahugedesiretoskilluptheIndianworkforce.Appar-entlylessthan2percentoftheworkforceissuitablytrainedtocarryouttheworktheyaredoing.Andwith12millionadditionaljobseekersbeingaddedtotheeconomyeachyeartheskillgapwillonlygrow.Isuspectwhatwillhappenisthatemployerswillsimplychurnthroughtheexcesssupplyoflabourbecausetheycangetthemcheaperandburytheirheadsinthesandwhenclientscomplainaboutpoorservicebyblamingtheuntrainedandtheunderpaid.IfthereisaskillgapistheresourcebasedviewofthelabourforcegoingtocreateawillgapaswellThisgapisonewheretheprospectiveemployeehasnowilltodoagoodjobbecauseheorsheisnotpaidfairlywellnorthewilltosucceedbecauseheorshecannotseeoppor-tunitiesoffindingfarsightedemployerswillingtotraintheirstaff.Thecatch22situationariseswhenanemployerdoesprovidetrainingonlytofindthattheemployeeisnowbetterabletogoworkforsomeoneelseNaturallythisisfrustrat-ingbutsurelyemployerscanturnthisintoanopportunityOnecompanyImetmanyyearsagowashemorrhagingstafftoshinymultina-tionalsastheyenteredthecountrywithpropersalariesandworkingconditions.Hehadtrainedthestaffandkeptlosingthembecausehissalarieswerepeggedbygovernmentcontracts.Whathedidwasturntheperiodwithhimintoatrainingprogrammebasedonintern-shipsthattherawgraduateswouldpayforSotheystayedandherecoupedhistimeandeffort.Thiskindofoutoftheboxthink-ingisgoingtobeneededifwearetobreakthedeadlock.WhyhaveItalkedaboutskillandwillinthecontextofcustomerserviceBecauseyouonlyhavetobeinIndiaashortspelltoexperiencetheshockinglypoorcustomerserviceevenfrombigbrands.IwillnotnameandshamethemherebecauseIamsuretheyemploygoodlawyersButtobefacedbyliespoorservicelackofresponsefromseniormanagementandageneralsenseofwedonotreallycareattitudeisamuchmorepotentinhibitortoIndiasglobalsuccessthanlackofskilledstaff.Thereisasimplemathissueaswell.Almostallservicesareadvertisedas5starbutallpromotionisalsoabouthowaffordablethingsarelowpricedealbasedetc.IntheendthemathdoesntworkbuddyYoucannotprovide5starserviceat3starpricesKingfisherAirlinesufferedfromthisstrate-gy.Therearegoingtobeatleasttwointer-relatedissuestoresolveifwearetoimprovecustomerserviceinIndia.Makeskillacquisitionhighlyaffordableubiquitousandpartofamindsetononesideandpromotepositivebehavioursbyemployersontheother.ItisabigprojectbecauseithastosupportmillionsofpeopleandbusinessesOPINION www.indiaincorporated.comSeptember201443IndianautomotivemajorMahindraMahindraMMwantstocapturemoreglobalgroundwithitstractors.MahindratractorseyeglobalspreadIndianautomotivemajorMahindraMahindraMMwantstocapturemoreglobalgroundwithitstractors.Indiasbiggestutilityvehicleandtractormanufactur-erwasforcedtoreviseitsdomesticsalesforecastfortractorsto5percentfromaninitial8percentduetoadelayintheMonsoonrains.CropdamageduetounseasonalrainsinsomepartsofIndiainMarchcoupledwithadeficientMonsooninJuneledtomarginalde-growthof1.2percentinthedomestictractorindustryinthefirstquarterofthisfiscalyear.HoweverthecompanyremainsbuoyantonglobalsaleswithasharpfocusonmarketslikeBrazilandTurkey.PawanGoenkaMMexecutivedirectorandpresidentofautomotivefarmequipmentsectorspointedoutthatthecompanystractorshadalreadymadeamarkintheUSwithover10000salesinthelastfiscalyear.MostofourvolumesarecomingfromIndiaandthekeyistohaveastrongerpresenceoverseas.ThisyearwillbeagoodtestforusinBrazilandwewillalsolookatTurkeyhesaid.PotentialacquisitionsoftractorcompaniesoutsideIndiaisalsopartofthecompanysglobalisa-tionstrategy.IthadrecentlyalsorevealedplanstosetupanewtractorunitatZaheerabadinMedakdistrictofTelanganainSouthIndiaforthemanufacturetheirDhruvrangeoftractors.MMplanstosetuptheunitadjacenttotheexistingmanufacturingunitinthestate.SECTORFOCUSAUTOMOTIVE September201444IndiaGlobalBusinessAspointerstothedirectionhisgovern-mentproposestotakeIndiainPrimeMinisterNarendraModisIndependenceDayspeechcantbefaulted.Hisfocusonsanitationsafetyofthegirlchildvillagedevelopmentmutuallybeneficialtieswithneighbouringcountriesskilldevelop-mentfortheyouthmanufacturingandexportshassetthetoneforgovernanceinthemonthsahead.Criticscancarpaboutthethingshedidnttalkaboutpricerisecorrup-tionterrorismpovertyandeconomicreformsbutthatwouldbenitpicking.Letusleavethattothepoliticiansandsundryotheroppo-sitiongroups.Forthelimitedpurposeofthisarticleletusfocusinsteadontheissuesthatheraisedmanyofwhichhaveimportantandwiderangingeconomicspinoffs.ModiexhortedforeigninvestorstosetupfactoriesinIndiaandturnIndiaintoamanu-facturinghub.Addressingthenationfromtherampartsofthehistoric17thcenturyRedFortbuiltbyEmperorShahJahanwhoalsobuilttheTajMahalontheoccasionofIndias68thIndependenceDayhesaidIwouldliketocallpeopleoftheworldtocomemakeinIndia.ComehereandmanufactureinIndia.Selltheproductsanywhereintheworldbutmanufacturehere...wehavethepowercomeIaminvitingyou.IneffectModiisbackingIndianinnovationandtalentinabigwaytomakeithappenandthattootoworldclassstandards.PossibleModiswepttopowerinMaythisyearprom-isingamongotherthingstoturnIndiaintoaglobalmanufacturinghub.Amassivesurgeinmanufacturingistheonlywaythegovernmentcangenerateenoughjobstoabsorbthearmyof12-15millionyouthwhojoinIndiasworkforceeveryyear.Butthatwillbeeasiersaidthandone.PolicyandadministrativeparalysisproblemsoverlandacquisitionrampantcorruptiondelaysingrantingenvironmentalclearancesandredtapehavehamstrungthesectorfordecadesandlimiteditsshareinIndiasGDPtoamere17percent.Indiaranksapoor133rdoutof182coun-triesintheWorldBanksEaseofDoingBusinessIndex.ExamplesaboundmostlynotablyofArcelorMittalandPoscoofprojectsthathavenottakenoffevenafteradecade.HoweversinceModiselectiontwoandahalfmonthsagoinvestmentpropos-alsworthabout80billionhavepouredinfromforeignanddomesticcompaniessignallyarenewalofinvestorinterest.ModibatsforIndiaBuildingtoiletsandmuchmorebyManojLadwaOPINION www.indiaincorporated.comSeptember201445Inabidtostreamlineproceduresthegovern-menthastakenseveralsmallstepstowardsmakingIndiaanattractiveinvestmentdesti-nation.1.Ithasamendedtherulesseverelycurtail-ingthepoweroflocalpettyofficialstoholdupprojectsononepretextortheotherwiththecovertintentionofextractingbribes.2.Ithashastenedthepaceofenvironmentclearances.UnderJairamRameshandJayantiNatarajaninthepreviousCongress-ledregimetheabsenceofclear-ancesfromtheenvironmentministryandnewunambiguouslyanti-industrylegislationsbecamethesinglebiggestroadblocktogrowth.Therelackedasensiblebalancebetweentheviewsofactivistsandofindustry.Thisministrywassinglehandedlyresponsi-bleforadisproportionatelylargenumberofthe120-billionprojectsthatstalledinvariousstagesofimplementationoverthelastfourtofiveyears.Thisdiscouragedotherinvestorsfromcommittinganyfreshinvestments.Resulttheinvestmentcyclestalledeconom-icgrowthplummetedforsub-5percentlevelsin2012-13and2013-14from9percentlevelsintheyearsbeforethatandjoboppor-tunitiesshrank.3.Ithasintroducedself-certificationandonlineapplicationsinmanyspherestocutoutcorruptionmakingtheprocesstransparentanduncloggingthestalleddecision-makingsystem.4.MostimportantlythePrimeMinisterhaspersonallymeteverysecretaryineveryministryandassuredthemoffullsupportforanybonafidedecisionstheytakeinthecourseoftheirwork.ThisisalreadyshowingresultsdecisionsarebeingtakenonceagainandthepolicyparalysisthathadmarkedthelastyearsoftheCongress-ledregimeisfastbecomingathingofthepast.5.AndfinallythegovernmenthastakenbabystepstowardsreformingIndiasarcha-iclabourlawsthatdiscouragecompaniesfromhiringpermanentstaffandfreeingupthejobsmarkettocreatemoremeaningfuljobsatalivingwage.Hereagainasensiblebalancebetweentherightsofworkersandtheneedsofbusinesshadbeenlostinthedogmaofthepast.ThenModisaidhewantedtheyouthtoturnentrepreneursandurgedindustrytoadoptazerodefectzeroeffectapproach.Theseandvariousotherstepsthatthegovernmentiscontemplatingareexpectedtohelpthegovernmentreachitsgoalofincreasingthecontributionofthemanufacturingsectorto25percentofGDPin10years.Youreffortsshouldcausenoharmtotheenvironmenthesaidexplainingwhathemeantbyzeroeffect.ThegoalheaddedwastomaketheMadeinIndiabrandsynonymouswithhighqualityproducts.SkilldevelopmentanotherfocusareainModisspeechisahugenecessityinacountrywheremorethan70percentoffreshgraduatesevenfromTier3andTier4engineeringcollegesdonthaveskillsthatcanbedeployedinindustry.ModiswepttopowerinMaythisyearpromis-ingamongotherthingstoturnIndiaintoaglobalmanufacturinghub.OPINION September201446IndiaGlobalBusinessIthasreceivedlipserviceinthepastbutifthecurrentBJP-ledgovernmentcanmakeadifferenceonthegrounditwillgoalongwaytowardsensuringabrighterfutureforthemillionsofyouthwhovotedModiinthehopeofusheringinachcchedinbetterdays.Oneissuethathasntattractedanyattentionistheeconomicspinoffoftheplantobuildtoiletsineveryschoolandineveryhome.Letusassumeintheabsenceofanyotherdatathatatoiletwillhavetobebuiltforeachofthe75millionpoorhouseholdsthatwillbegivenaccesstobankaccountsundertheJanDhanpeoplesmoneyschemeannouncedbythePrimeMinisteronAugust15.LetusalsoassumeveryconservativelythateachtoiletmasonryworksanitarywareandplumbingcostsRs10000tobuild.Wearethenlookingatacapitalexpenditureof12.5billion.Thatsa12.5billionopportunityforIndianandforeignconstructioncompaniescontractorssuppliersconsultantsandjobseekersWithamultipliereffectofthreewearethenlookingata35-billioneconomicimpetustotheIndianeconomyoverthenextfiveyears.Thisinitiativealonecanthereforeprovidea0.25to0.50percentagepointimpetustoGDPgrowth.Modihasoutlinedhisvision.Theoutcomeswilldependonimplementation.Wewillkeepourfingerscrossed.OPINION www.indiaincorporated.comSeptember201447SunPharmainUSdrugrecallCaracoPharmaceuticalLaboratoriesaunitofIndianrmSunPharmahasinitiatedtherecallofmultiplelotsofCephalexincapsulesfromtheUSmarket.AccordingtoaUSFoodandDrugAdministrationFDAnoticationtherecallof340553unitsof500mgand113677unitsof250mgbottleswasvoluntarilyinitiatedbythecompanythroughalettertotheregulatorinJuneunderClass-IIclassication.Cephalexinisanantibioticthatbelongstothefamilyofmedicationsknownascephalosporinsandisusedtotreatcertaintypesofbacterialinfections.TheseproductsarebeingrecalledbecausetheyweremanufacturedwithactivepharmaceuticalingredientsAPIsthatwerenotmanufacturedwithgoodmanufacturingpracticesUSFDAswebsitesaidinreferencetotherecall.TherecalleddrugbottlesweredistributedbyCaracoPharmaceuticalLaboratoriesintheUSandmanufacturedinIndiabySunPharmaceuticalIndustriesLimited.ZensarTechbuysUSrmPune-headquarteredsoftwarermZensarTechnologiespartoftheRPGGrouphasacquiredUS-basedProfessionalAccessPAfrom3iInfotech.Theall-cashtransactionwhichalsoincludessaleofPAssoftwaredevel-opmentcentresinIndiawillpushuptheretailsectorcontributionto14percentofZensarsrevenuefrom10percent.SubbaRaoAmarthalurugroupchiefnancialofcerofRPGEnterprisessaidtheacquisitionisinlinewithZensarsstrategyofgrowingexistinglinesofbusinessthroughorganicandinorganicmeans.Witharevenueofover38millionPAisoneofthelargestpartnersforOraclesATGwebandEndecasearchplatforms.ThecompanyhasapresenceintheUStheUKLatinAmericaWestAsiaAfricaandIndia.ItcountsVodafoneLiverpoolBestBuyNintendoandJohnLewisamongitscustomers.Inaregulatorylingdebt-ridden3iInfotechsaidThesesalesareinlinewiththegroupstrategytosellitsnon-coreassetsinvestmentsandusetheadditionalcashgeneratedfromsuchsaletode-leverageitsbalancesheetandforbusinesspurpose.NEWSINBRIEF September201448IndiaGlobalBusinessNEWSINBRIEFSultaneyesSaharasLondonhotelHassanalBolkiahtheSultanofBruneiandoneoftheworldsrichestmenisamongthefrontrunnerstobuyLondonsiconicGrosvenorHousehotelfromIndiasSaharaGroup.AninvestmentrmlinkedtotheBruneiroyalfamilyhasbid2.2billionfortheLondonhotelandtwootherequallyiconicpropertiesownedbytheSaharaGroupinNewYorkPlazaHotelandDreamHotel.ReclusiveIndianbillionaireCyrusPoonawalawhoownsoneoftheworldslargestserumcompanieshasalsoplacedacompetingbid.SomewealthyfamiliesfromtheMiddleEastarealsointhefraybuttheSultanisbelievedtoaheadintherace.BillionaireSaharabossSubrataRoyisnegotiatingthesaleofhisthreehotelsfromTiharJailinNewDelhiwhichisIndiaslargestprison.HewassenttherevemonthsagoforreportedlynotbeingabletorepayRs20000crore3.3billiontomillionsofsmallandpoordeposi-tors.IndiasSupremeCourtthehighestcourtinthecountryhasorderedhimtodeposithalfthatamountincashandprovidebankguaranteesforthebalanceamountasapre-conditionforreleasinghim.EarlierinanunprecedentedordertheSupremeCourtallowedRoytonegotiatewithpotentialforeignandIndianbuyersfromaspecialroominTiharjailequippedwithinternetandinternationalcallfacilities.HDFCBankopensbranchinDubaiIndiaslargestbankintermsofmarketcapitalisationHDFCBankhasexpandeditsglobalfootprintbyopeningabranchinDubai.ThebankhassetupitsbranchattheDubaiInternationalFinan-cialCentreDIFCtoprovidewealthmanagementservicestothenon-residentIndiansNRIsbasedintheUnitedArabEmiratesUAE.TheDubaibranchisHDFCBanksthirdbranchoutsideIndia.TheothertwobranchesarelocatedatBahrainandHongKong.ItalreadyhasrepresentativeofcesintheUAElocatedatDubaiandAbuDhabiandplanstocontinuerunningbothofthem.BoththeUAEandDIFChaveemergedasamajornancialcentreandthesettingupofthisnewbranchwilleasethedistribu-tionofitsproductstoGulfclientsthebankfeels.HDFCBankisalsopartneringwithexchangehousesacrossGulfCo-operationCouncilGCCcountriesforNRIremittances. September201449IndiaGlobalBusinessNEWSINBRIEFUKsolarrmbuysIndiastakeUK-basedsolarpowerrmSolargisehasacquiredamajoritystakeinIndianrenewableenergycompanyGRAPPEnergiesPrivateLimitedanditssubsidiaryGreenRipples.TheUKcompanyhasacquiredthestakeinboththecompaniesataninvestmentof200millionwhichcomesasanequitycommitment.Post-acquisitionthenewentitywillbeknownasSolargiseGrappEnergiesPrivateLimitedandSolargisefounderRajBasuwillbetheexec-utivechairmanofthenewentityandGRAPPEnergiesDirectorPrathmeshMairalwillbethemanagingdirector.ThepurchasewillhelpSolargiseestablishsolarpowerprojectsinIndia.TheorderbookofGRAPPEnergiesandprojectpipelineisinexcessof250MWaltogether.InadditionSolargiseisdevelopinga200MWprojectinGujarat.GRAPPhasrecentlysecuredover200MWprojectwithinnorthernandwesternIndiaandEPCordersforover145MW.Bothcompanieshavealmostfouryearsofpresenceinthedomesticmarketandhaveexecuted80off-gridsolarpowerprojectsduringthisperiod.Zomatobuys2EuropeansitesIndiasleadingonlinediscoveryguideZomatohasacquiredtwosimilarrestaurantguidewebsitesinEuropetoexpanditsreachglobally.ZomatohasacquiredLunchtimeintheCzechRepublicandObedovatinSlovakiaforacombinedamountof3.25million.TheseacquisitionswillhelpthecompanyestablishapresenceincentralandEasternEurope.Zomatofurtherplanstoinvest2.5millioninboththeseoperationsoverthenextcoupleofyearstostrengthenitspositionintheonlinesegment.Zomatoplanstoentertenmoremarketsinthecomingmonthsthroughbothorganicandinorganicexpansion.ItiseyeingtheCanadianmarketfollowingwhichitplanstofocusonNorthAmericaVietnamJordanKuwaitSaudiArabiaandIreland.RecentlyitacquiredMenuManiaaleadingrestaurantdiscoveryserviceinNewZealand.Foundedin2008Zomatocurrentlyemploysaround800peopleworldwideandisknowntobeIndiasrsttrulyglobalapplicationforrestaurantdiscoveryandlistings.GloballyitfacescompetitionfromrmslikeYelpandTimeOut. September201450www.indiaincorporated.comANALYSISIndiaisrighttoblockWTOdealThechoicewasstarkbeforetheIndiangovernmentitcouldratifytheTradeFacilitationAgreementTFAattheWTOmeetinginGenevaandleave800millionofitspoorpeopleatthemercyofmarketforcesoritcouldstandupforthemandrisktheopprobriumoftheUSandEU.Intensepressurewasbroughttobearonthenewly-electedNarendraModigovernmenttofallinlinebutNewDelhiwasveryclearthatitwouldnotsignonthedottedlineunlesstherewasaparallelagreementthatguaranteedIndiasrighttostockandsubsidisefoodatlevelsfarinexcessofthosepermittedunderWTOruleswhichstipulatethatsuchsubsidiesshouldnotexceed10PerCentofthevalueoffoodproduction.SincetheformulausespricesfromtwodecadesagoIndiasfoodsubsidybillandpublicstockholdingoffoodgrainswillalmostcertainlyexceedthelimitandexposethecountrytostiffpenalties.IndiantradenegotiatorshavereiteratedthattheyarenotopposedtotheTFAwhichisexpectedtoadd1trilliontotheglobaleconomyandcreate21millionjobsworld-wide.TheyareonlywarythatiftheTFAisimple-mentedwithoutabindingagreementthatguaranteesfoodsecurityforIndiaspoortheywillloseallleverageoverthenegotiat-ingprocess.HowwillwemaketheUSandEUlistentousAndwhatrecoursewillwehaveiftheydontbyManojLadwa ANALYSISSeptember201451IndiaGlobalBusinessaskedaseniorgovernmentofficialonconditionofanonymity.USandEUhesaidmaythenuseextantWTOrulestoforcetheirwayintotheIndianfoodgrainsmarketwithdisastrousconse-quencesforthepoor.TheonlywaytopreventthisandensurefoodsecurityfortheneedyandlivelihoodsforIndiasfarm-erswastodelaytheratificationoftheTFA.WhatdoesIndianowwantApeaceclauseonitsfoodsecurityconcernswhichwillprotectitfrombeingchallengedforallegedunfairtradepracticestoruntilltheWTOworksouttheparallelagreementontheissue.SincethebroadparametersofthisagreementhadbeenworkedoutinBalilastyearIndiannegotiatorsfeelabindingpactcanbehammeredoutsoonaftertheWTOcomesoutofamonth-longrecessinSeptember.BoththeseagreementscanthenberatifiedandimplementedbyDecember312014.Thatsnotanunreasonabledemand.PleasenoteheretheEUhasntshowntheleastbitofurgencyoncuttingdownitshumungoussubsidybillondairyandfarmproducts.ToexpecttheIndiangovernmenttodosoisnave.SomewesterndiplomatshaveheldoutthethreatofgoingaheadwiththeTFAwithoutIndiabutthatwouldbeshortsightedandsignaltotheotheremerginganddevelopingeconomiesthatWTOforumdiscriminatesagainstthem.TheargumentofTFAsproponentsthatthedeadlineagreedinBaliforthedealonfoodsecurityis2017andthatIndiashouldtakethenon-bindingunderstandingguaranteeingfoodsecurityforitscitizensatfacevalueisdisingenuous.WouldtheEUhaveacceptedsuchademandif60PerCentofitscitizensfacedtheprospectoftheirlivelihoodsgettingwipedoutOfcourseitwouldnt.SowhyshouldtheModigovernmentThereisapoliticalreasonforIndiasstandaswell.TheIndianelectoratetheworldslargestitcomparestotheelectorateoftheUSandEUcombinedhasvotedinasinglepartywithanabsolutemajorityafteragapof30years.WhyItwastiredofcorruptionmal-governanceandofbeingsolddowntheriverbyasuccessionofgreedydisconnectedleaders.Modipromisedchangeandthehopeofabettertomorrow.Theburdenofexpectationshecarriesismassive.Hisgovernmentobviouslycannotbankonthegoodwilloftheworldatlargetoensureaminimumlevelofsustenanceforthecountryscitizens.Itdidwhat800millionpeoplehadgivenitamandatetodosecuretheirfuture.WhydidtheworldexpectanythingelseFailuretosigntheTradeFacilitationAgreementsentaconfusingsignalandunderminedtheveryimagePMModiistryingtosendaboutIndia-JohnKerryUnitedStatesSecretaryofState www.indiaincorporated.comGUESTCOLUMNSeptember201452MakinginvestmentsworkMichaelShim-minischairmanoftheFedeltaGroup.HewasalsochairmanoftheTrustandCorporateIndustryrepre-sentativebodyintheIsleofManforanumberofyears.AspartofthelegacyoftheBritishEmpireandbeingthefirstindustrialisednationtheUKhasenjoyedandtosomeextentstillenjoyssubstantialincomegeneratedfromexternalinvest-ments.InthedayswhenmilitarymightandindustrialcapacitywenthandinhanditshouldcomeasnosurprisethatinordertoallowtheRoyalNavytomovefromshipspoweredbycoalofwhichtheUKhaslotstomoreefficientshipspoweredbyoilofwhichtheUKthenhadnoneWinstonChurchillthenFirstLordoftheAdmiraltysecuredthesupplybythesimpleexpedientofbuyingtheAnglo-PersianOilCompany.Externalinvestmentsbyacoun-trynowacquiredbycommercialinvestmentwithouttheassis-tanceofmilitarymightareagoodthingforallsortsofreasonstheysecureaccesstoadvancedtechnologiestheyprovideacurrencyhedgetheyprovideexternalearningsandtheyareusuallythesignofamatureandsuccessfuleconomy.JudgedbythesestandardshowistheIndianeconomyfaringIndiaandtheUKhaveanaffinitybasedonlanguageandhistorybutitmaysurprisemanytoknowthatIndiaisthethirdlargestinvestorintheUKaftertheUSandJapanwith111directinvestmentsbetween2005and2012.SignificantlythisinvestmentisnothoweverjustlimitedtotheUKduringthesameperiodIndiancompaniesmade233directinvestmentsintotheUSA43inGermany27inFrance20inItalyand16intotheNether-lands.ItisthesecondlargestinvestorinboomingLondonwhereChinacomesinasthesixth.Makingtheseinvestmentsisonethingbutmakingthemworkisevenmoreimportantandnotalwaysachieved.BMWcouldnotmakeasuccessofLandRoverandsoldittoFordFordcouldntmakeJaguarLandRoverworkandsoldittoTatafor1.4billionin2008.Thatcompa-nyisexpectedtomakeprofitsof2.5billionthisyearalonewhiletheprofitsofTatahavebeensqueezedbyafallinvehiclesalesinIndiaof33percentintheyear. IndiaGlobalBusinessNEWSINBRIEFSeptember201453AltruistacquiresSingaporermIndiabasedMobileSocialNetworkingsolutionsproviderAltruistTech-nologieshasacquiredSingaporebasedsocialvoicemessagingrmBubbly.Thevalueandtermsofthedealhavenotbeendisclosedyet.Bubblyhadlastyearraisedatotalof39millionfrominvestorswhichincludeSequoiaCapitalComcastVenturesPalomarVenturesJAFCOAsiaNGPInfocommInvestmentsandSingTelInnov8.Postacquisi-tiontheseinvestorswillbeminorityshareholdersinthecombinedcompany.BubblyearlierknownasBubbleMotionhadbeganasavoicemessag-ingappandlaterturnedtoasocialnetworkfeaturingcelebritiesandotherexclusivecontentowners.Ithas40millionusersinAsiaandtheMiddleEastonitsvoice-basedsocialmediaplatformaswellas140millionusersonBubbleTalkavoiceSMSservice.HerobuysGermanbikermIndiasleadingbicyclemanufacturerHeroCycleshasacquiredGermanrmMitteldeutscheFahrradwerkeAGMIFA.TheOPMunjalGroupownedcompanyhasacquireda60percentstakeinMIFAforaninvestmentofapproximately25million.Partofthesefundswouldbeusedtomeetworkingcapitalrequirementsandthecompanyhasanoptionofincreasingitsstakeinthefuture.ThedealwillhelptheIndianbicyclemakergetaccesstoMIFAshigh-endtechnologyespeciallyinthee-bikesspaceaswellasaccesstocriticalmarketssuchasEuropewhereithasarobustpresence.Itwillalsoallowbothcompaniestosynergisetheiroperationsandrespectivestrengths.MIFAmanufacturesfoldablebicyclessportsvehiclesandelectricbikesandmarketsitsproductsunderbrandslikeMifaGermatecSteppenwolfandGraceaswellasthird-partybrands.Herohasamanufacturingcapacityof7.5millionbicyclesperyearwithunitsinLudhianaBiharandGhaziabadandcommandsaround5percentoftheglobalshareofcycles www.indiaincorporated.comINOTHERNEWSSeptember201454ITCbeatsTATAasIndiasmostadmiredCigarettestohotelstofoodsgiantITCisIndiasmostadmiredcompanyaccordingtoalistingbyFortuneIndiaandinternationalconsultancyHayGroup.ConstructiongiantLarsenToubroLTwasrankedsecondonthelistfollowedbyHindustanUnileverHULtheIndiansubsidiaryofUnilever.MarutiSuzukiMSLStateBankofIndiaSBITataConsultancyServicesTCSCocaColaIndiaSamsungIndiaTataMotorsandONGCaretheothercompa-niesinthetop10.ThisyeartherearesixIndiancompaniesITCLTSBITCSTataMotorsandONGCinthetop10.Ofthese.SBIandONGCarepublicsectorcompa-niesandtwoTCSandTataMotorsarepartoftheTataGroup.HULMSLCocaColaIndiaandSamsungIndiaaretheIndianarmsofforeign-ownedMNCs.ITCinwhichmultinationaltobaccomajorBATholdsa31PerCentstaketoppedthechartsonparameterssuchassocialimpactproductqualitycorporategovernanceandemployeeempowerment.LTwasrankedontoponleadershipwhileHULgotthehighestnumberofvotesontalentdevelopmentinnovativenessandglobalfootprint.ThemethodologyisthesameastheoneusedbyFortuneandHayGrouptocompiletheFortuneWorldsMostAdmiredCompanieslist.TheIndianrankingisbasedonapeerreviewof523companiesacross15sectors.Inthepreliminaryphaseoftherankingsalmost450respondentsrankedthesecompa-niesonparameterslikecorporategover-nanceimpactonsocietyemployeeempow-ermentqualityofproductsinnovationleadershipqualityenduranceandbusinessfootprint.Thereafteraselectgroupof84respondentsrankedthetop45companiestoarrivethefinallist.Theparametersusedinthefinalphasearethesameastheonesusedintheprelimi-narystage.ThisyeartwocriteriainparticularcorporategovernanceandsocialimpactseparatedtheTop10fromtherestofthewinners.ITChastoppedthelistbydisplacinggroupcompanyTCSin2014saidHayGroupIndiacountryheadSridharGanesan September201455SECTORFOCUSINFRASTRUCTURETataSteelEuropecreatesnewautosteelIndiansteelgiantTataSteelannouncedthelaunchofaninnovativenewproductforautomotivemanufacturersinresponsetomarketrequirementsforstrongerandlightersteels.ThenewproductDP1000HY-GIisahigh-yieldultrahigh-strengthsteelwhichcombinesstrengthandformabilityandallowsmanufacturerstomakelightercomponentswithoutalteringtheirproductionfacilities.ProductionofDP1000HYstartedlastmonthandTataSteelEuropewillprocessordersfornewandexistingcustomersfromitsproductionfacilityatIJmuidenintheNetherlands.Thematerialisideallysuitedforthecrash-protectionstructureofavehicle.TataSteelisoneofaverysmallnumberofsteelmakerstobeabletoofferthisinnovativeproductwhichcanreduceacompo-nentsweightbyupto15percentthefirmsaidinastatement.TataSteelworkedcloselywithautomo-tivemanufacturerstodevelopthishigh-strengthsteelwhichcanbeprocessedbymanufacturersexistingmachineryacriticalconsiderationinitsdevelopment.Itssuperiorformabilitymakesitsuitableforcreatingrelativelycomplexshapeswhileitsoptimalenergyabsorptioncapabilityisidealformakingcrash-relevantcomponents.IndiaGlobalBusiness www.indiaincorporated.comSeptember201456SECTORFOCUSINFRASTRUCTURETatarampsupBritishsteelactivityIndiansteelmajorTataSteelisrampingupactivityatitsUKstructuralsteeldistribu-tionsiteinthenorth-eastofEngland.TeessideServiceCentreatRedcarnexttothecompanysTeessideBeamMillistheonlysteelsectionsprocessingfacilityinBritainwhichisbackedupbyanadjacentproductioncapabilityIanBeveridgeTataSteelsdirectorofconstructionstructuressaidWehaveestablishedTeessideServiceCentretobeabletooffercustomersauniquelyflexibleservice.Thelocationattheendofamillproductionlinegivescustomerstheoptionofbuyingex-rollingorex-stock.Furthermoretheinvestmentswevemadeinlogisticsnewhandlingandprocessingequipmentmeanwereabletoofferaproductanddeliveryservicewithunrivalledspeedandefficiency.ThatalladdsuptoTeessideServiceCentrebeingtheleadingdistributionfacilityintheUKandthebenchmarkinourindustry.TataSteelhasinvestedatotalof8.5millioninTeessideServiceCentre.Followinginstallationofthelastofthenewprocessingequipmentdueonsitethenewfacilityislookingtosurpassitsnominal170000tonnesperyearcapacityinordertosupportincreasingcustomerdemandthecompanysaid.Thecentresproductrangeofsectionsincludingstructuralhollowsectionsservesawidevarietyofconstructionandinfrastruc-tureprojectsfromnewschoolshospitalssportscomplexesandlarge-scaledistribu-tiondepotstotheiconicbuildingsinLondon.ThespeciallydesignedsiteforTataSanderHeinhuisTataSteelsEuropeanmarketingmanagerforautomotivesaidThesafetyofoccupantsisthemostimportantconsiderationwhendesigningavehiclebutwiththeever-increasingpressuretoreducecarbonemissionsitisvitalmanufacturersusematerialswhichareaslightaspossible.Throughthedevelop-mentofDP1000HYTataSteelhascombinedhighyieldultrahighstrengthandformabilityallowingautomotivemanu-facturerstoreducethethicknessofthesteeltheyuse.Theycanconsequentlyachieveimpressivecrash-protectionandatthesametimehavetheoptionofreducingweight.Wearework-ingcloselywithourcustomerstodemon-stratethebenefitstheycanachievefromusingthisproduct.DP1000HYsteelincorporatescarbonandmanganesetoincreaseitsstrengthandhardenability.Itisavailableinarangeofdimensionsinthicknessesofupto2mmandwidthsofupto1400mm.Itisfinishedwithahot-dippedgalvanisedcoatingoffer-inggoodcorrosionprotectionandmakingitacost-effectivebodystructuresolution. SECTORFOCUSINFRASTRUCTURESeptember201457IndiaGlobalBusinessSteelsUKsectionsdistributionactivitieswasestablishedin2012.BasedaroundanexistingwarehouseontheRedcarplantsiteamodernstockingfacilitywascreatedwithnewhandlingandprocessingequipment.Outsidestockingareaswerereorganisedandnewaccessroadsbuilt.ThecentreisresponsibleformanaginganddistributingsteelfromtheTeessideBeamMillaswellasTataSteelssection.Thelatestdevelopmentshaveinvolvedopen-ingupanotherwarehouseandinstallingahigh-specificationshot-blasterandnewheavysectionssawingcapacitythathasbeenlocatedinordertoreducehandlingtimeandcosts.TeessideServiceCentreofferscutting-to-lengthshot-blastingandprimingcolour-coatingandthecentresentireoper-ationisalsofullycompliantwithallthenewconstructionproductsregulationsincludingCEmarkings.Thecentreemploys94peoplewhichincludesabout40newjobscreatedsincethecentrewasestablishedin2012.TCSbagsUKFriendsLifedealIndiasleadingsoftwareservicesproviderTataConsultancyServicesTCShasannouncedthatitssubsidiaryDiligentahasbaggedamulti-millionpounddealtosupporttheinternationaloperationsofLondon-basedFriendsLifeManagementServices.Aspartofthismulti-yearengagementDiligentawouldimplementtheTCSBaNCScoreplatformatFriendsLifeinAsiaPacicandWestAsia.JohnVanDerWielenCEO-InternationalofFriendsLifesaidThisnewdealwillenableustostreamlineoursystemsimproveservicestoourcustomersandputusinastrongpositiontocontinuegrowingnewbusiness.Specicnancialdetailsofthedealwerenotdisclosed.UK-headquarteredDiligentawasestablishedin2005toprovideback-ofceservicesforthecountrysLifeandPensionsindustry.Itcurrentlyadministersabout6.5millionlivepoliciesonbehalfofitsclientsaccordingtoastatement. www.indiaincorporated.comSECTORFOCUSINFRASTRUCTURESeptember201458TataSteelclinchesmegaunderseacontractIndiansteelgiantTataSteelhassignedaseriesofcontractswithSubsea7oneoftheworldsleadingcontractorsinengineeringconstructionandsubseaservicestotheoffshoreindustrytosupplyunderseapipestofourseparateNorthSeaprojects.Thefourcontractssignedoverthepastyearandworthanestimated10millionintotalwillseetheIndiansteelgiantsupplyinexcessof55kmofpipeweighingmorethan9000tonnes.ThepipeswillbemanufacturedatthecompanysHartlepoolpipemillsintheUKbeforebeingweldedandcoatedatitsoffshoreprocessingcentrealsoinHartle-pool.ThislatestseriesofcontractsfurtherdemonstratesthebreadthofourofferingtotheEnergyPowersector.Overthelast25yearswehaveprovidedmorethan83000tonnesofpipetoSubsea7for37projectsworldwidesaidRichardBroughtonTataSteelscommercialmanagerexplorationandproductionenergypower.Thecompanyalsoannouncedaglobalframeworkagreementtofurthercementthe25-yearpartnershipwithSubsea7.OurworkwithSubsea7overtheyearshasbeenextensiveparticularlyintheNorthSeaoilandgasindustrywhichhasbecomeanincreasinglyimportantmarketforus.ThenewframeworkagreementwillextendtheworkourcompaniesalreadydotogetheronaglobalscaledemonstratingthevalueofTataSteelintodaysoilandgasindustryBroughtonadded.Accordingtoindustryforecaststhesubseaumbilicalsrisersandflowlinesmarketsaresetforhighgrowthinthecomingyears.TataNanomakesBangladeshentryTheworldsmostaffordablelow-budgetcarTataNanohasbeenlaunchedinBangla-desh.ManufacturedbyIndianautomobilegiantTataMotorsthecarhasbeenlaunchedintheneighbouringcountrytwoyearsaftermakingtheannouncementtocapturethemarket.NitolMotorswhichhasbeenthedistributorforTataMotorsinBangladeshfor25yearswillbethesoledistributorfortheNano.Thedelayintheofciallaunchwasoverapricingissue.Accordingtolocallawsupplementarydutyofabout45percenthastobepaidtothegovernmenttoimportcarsunderthe700ccsegment.BothTataMotorsandNitolMotorshadbeenaskingthelocalgovernmenttowithdrawthesupplementaryduty.ThepricingoftheNanowillgodownifthegovernmentreviewsthesupplementaryduty.TataMotorsintroducedthe624ccNanoasalow-costcarinIndiain2008toattracttheburgeoningmiddle-class. IndiaGlobalBusinessSPECIALREPORTSeptember201459shouldbethatallovertheworldwecansayMadeinIndiahesaidinhismaidenIndependenceDayspeechonAugust152014.LetuscometogetherandthinkofwaysIndiadoesnothavetoimportbutweexporttotheworldButdonotcompro-miseonzerodefectandzeroeffectNarendraModimadeanappealforatruerebrandingofMadeinIndiaModiAppealMakeinIndiasellanywhereInhisfirstaddresstoIndiansaroundtheworldasPrimeMinisterNarendraModimadeanappealforatruerebrandingofMadeinIndia.ComemakeinIndiaIappealtotheworldsellanywherebutmanufacturehere.OurdreamWeareayouthfulnation.Ouryouthareourstrength.TheworldandIndianeedsaskilledworkforce.LetouryouthgetskillsthoseskillsthatcontributetowardsastrongIndia.Wewantyoungsterswhoarejobcreators.-NarendraModiPrimeministerofIndia www.indiaincorporated.comSPECIALREPORTSeptember201460stressingonqualityaskeySkillsandskilldevelopmentwereagainacentralplankashehighlightedtheimportanceofthemanu-facturingsectorforthecountrysgrowth.Weareayouthfulnation.Ouryouthareourstrength.TheworldandIndianeedsaskilledworkforce.LetouryouthgetskillsthoseskillsthatcontributetowardsastrongIndia.Wewantyoungsterswhoarejobcreators.Theworldhaschanged.Wecantthinkaboutourdevelopmentjourneyisolatedfromtheworldhesaid.ThenewPMusedthetraditionaladdressfromRedFortinDelhitocoverawidespec-trumofissuesfrombankingtheun-bankedintheruralareasofIndiaande-governancetocreateadigitalIndiatowomenssafety.Hisextemporespeechandthedecisiontodoawaywiththeusualbulletproofenclo-surewereaclearmessageofanewkindofregimeThestrengthofthesaviourismuchmorethanthestrengthofthepersonwhokills.Letsunitetofightpoverty.Theworldwasclearlywatchingasinterna-tionalmediaoutletsgavearesoundingthumbs-uptohisover-archingmessage.TheWallStreetJournalhailedhistoughtalkonbickeringbureaucratswhileotherswereimpressedwithhisvowtofixbrokengovernance.SocialmediawasalsoabuzzwithactivityasModiswordsbeganbeingquotedandre-quoted. IndiaGlobalBusinessNEWSINBRIEFSeptember201461VenusRemediesinIsraeltieupIndianpharmaceuticalcompanyVenusRemedieshastiedupwithIsrael-basedgenericdrugmakerTevaforthesaleofananti-cancerdrugintheCanadianmarket.BothcompanieshaveenteredintoacollaborativeagreementunderwhichVenusRemedieswillinitiallymanufacturethedrugatitsresearchunitVenusMedicineResearchCentretoassistTevainregistrations.ItwillalsouseitsmanufacturingcapabilitiestosupportTevainenhancingthebusinessfromthisdrugintheCanadianmarket.Thedrugiswidelyusedforthetreatmentofmalignantpleuralmesotheli-omaandnon-squamousnon-smallcelllungcancer.Theanti-cancerdrugisunderpatentprotectionuntil2016.Thecurrentglobalanti-cancermarketsizeis130billionandtheshareofthisdrugis2.8billion.Theanti-cancermarketsizeofCanadaaloneis75-100million.ThecollaborationwillhelpVenusgainasizeablemarketshareforthedrugintherstyear.ThearrangementstrengthensitstieswithTevawithwhichitalreadyhasanagreementfortwoCephalosporinsintheEuropeanUnionmarket.EvalueservebuysGermanrmIndianresearchandanalyticsrmEvalueservehasacquiredaGerma-ny-basedcompanywhichspecialisesinthedevelopmentofbusinessintelligencesolutionsandoperationalwebapplications.FollowingtheacquisitionthecompanywillremainheadquarteredinRheinbachGermanyanditscurrentmanagementstructurewillalsoremainunchanged.TheacquisitionwillhelpEvalueserveincreaseitsofferingsandtechno-logicalskillsintheareasofdatascienceanalyticsandbusinessintelli-genceforvariousindustrysegments.Bothcompaniesplantojointlydevelopcloud-basedbusinessintelli-genceplatformsinthemarketingintelligenceprocurementpharma-ceuticalandotherdomains.Foundedin2000Evalueserveisaspecialistinknowledgeprocessingandhasmorethan3000employ-ees.OtherthanIndiathermhascentresinChileChinaRomaniaDubaiandtheUSwhichprovidemultipletimezoneandmultilingualservices. www.indiaincorporated.comINOTHERNEWSSeptember201462IndianfirmsmaketheinnovationcutForbesFromfastmovingconsumergoodsFMCGandsoftwaretoinfrastructureandpharmaceuticalsarangeofIndiancompanieshavemadetheglobal100mostinnovativecut.AccordingtoForbesannualWorldsMostInnovativeCompanieslistFMCGgiantHindu-stanUnilevercomesinatanimpressive14thrankfollowedbyTataConsultancyServicesTCSat57thLarsenToubroat58SunPharmaIndustriesat65andfinallyBajajAutoat96.Thelistisbasedoninvestorperceptionoffirmsmostlikelytogen-eratebignewgrowthideas.IthasbeentoppedbyCalifornia-basedglobalcloudcomputingcompanySalesforceforthefourthyearinarow.HindustanUnileverrecordedaninnovationpremiumof54.7percentwhichisdescribedbytheAmericanmagazineasameasureofhowmuchinvestorsbidupthestockpriceofacompanyabovethevalueofitsexistingbusinessbasedonexpectationsoffutureinnovativeresultssuchasnewproductsservicesandmarkets.IncomparisontheinnovationpremiumofTCSwas39.58percentLT39.4percentSunPharmaat38.34percentandBajajAutorecordedaninnovationpremiumof31.73percent.TheNo.1firmSalesforcewithamarketcapof35.87billionhadaninnovationpremiumof75.9percent.AkeytoSalesforcessuccesshasbeenitsabilitytomoveintobiggercompaniessellingtoenterprise-classlargecustomerswhorequiremoremodificationsandattentionthanasmallormediumbusinessForbessaid.TheothercompaniesmakingupthetopfiveonthelistareConnecticut-basedbiotechfirmAlexionPharmaceuticals2Britishsemi-conduc-torcompanyARMHoldings3UnileverIndonesia4andNewYork-basedbiopharmaceuticalcompanyRegeneronPharmaceuticals5.TheUSwashometoamajorityofthecompaniesonthelistwith41firmsheadquarteredinthecountryfollowedbyEuropewith29companies.ArangeofIndiancompanieshavemadetheglobal100mostinnovativecut.ForbesAnnualWorldsMostInnovatveCompaniesIndiaRankingsCompanyRankingHindustanUnilever14TataConsultancyServicesTCS57LarsenToubroLT58SunPharmaIndustries65BajajAuto96 OnlineIPrintsIEventsIndiaIncorpindiaincorporatedcompanyindia-inc..IndiaInvestmentJournalTheIndiaInvestmentJournalisahighqualitypublicationforthoughtleadersandbusinessdecisionmakers.TheIIJshavecoincidedwithConclavesfocus-ingonEducationWealthManagementandUK-Indiatradeandinvestmentdeals.OurrecenteditionoftheIndiaInvestmentJournallaunchedatIndiaIncsmegapost-electionanalysissummitoffersarangeofin-depthanalysesonthefutureofIndia-UKties.Fore-editionsofIndiaInvestmentJournalpleaseclickherehttpwww.indiaincorporated.comprint-edition.htmlWhatisthePublishedby INDIAGLBALBUSINESS78PallMallLondonSW1Y5ESUKC210TitaniumCityCentreSatelliteAhmedabad-380015infoindiaincorporated.comINDIA4402078732386UK9107940063339INDIAGETINTOUCHwww.indiaincorporated.comIndiaIncorpindiaincorporatedcompanyindia-incindiaincorporated