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INDIA GL BAL BUSINESS Online Print Events Published by April 2015 Indias outbound investment magazine Page 18 HOT SPOT INDIA INC. INTERVIEW Tier 2 cities take a qualitative leap in India Indian Finance Minister Arun Jaitley offers India Inc. some insights Page 6 Page 12 Modi on way to find middle ground in Europe Indias move from compulsion economics to conviction economics OPINION Page 10 Manoj Ladwa Publisher CEO India Inc. manojladwa PUTTING IT IN CONTEXT Europe firmly on Indias enlightened foreign policy agenda signal not least to Indian investors because gone are the days when Britain could take for granted its predominance as the preferred landing bay and launch-pad for Indian companies looking to expand in Europe. This is a matter of concern to me and many others who have dedicated many years to promoting the UK as an integral part of the EU-India dialogue. Beyond the photo-ops and general headlines some solid deals were struck which will continue to shape our policy in the region for the coming years. The broad spectrum of cooperation can hinge comfortably around the Modi governments ambitious Digital India strategy.I believe that there are huge opportunities for Europe- based companies to invest and partner with Indian companies in India and as global partners. India Inc. took its own initiative against the backdrop of the Indian PMs tour of the region with its third Strategic Dialogues Series on Digital India at Brussels. The high profile European leg which included Indian IT Minister Ravi Shankar Prasad and Secretary R.S. Sharma picked up on the issues thrown up at the first conclave in New Delhi in December 2014 followed by one in Washington DC in January this year. In Belgium at the India Inc. conclave there were two major outcomes. Firstly an invitation from the European Commissions Smart Cities team for India to partner with the programme and from the Commissions Digital Connect chief Robert Madelin the mooting of an India-EU Innovation Start-Ups Forum. I am pleased to say that India Inc. will be partnering in both these initiatives. I am certain that these are just two of many synergies that will continue to define the India-EU partnership of the future. I ndian Prime Minister Narendra Modi prioritised a visit to Europe in his travel schedule within his first year in government and in doing so is paving the way for a new India-EU partnership. The back-and-forth over the India-EU Free Trade Agreement FTA must not be allowed to overshadow the huge potential that remains untapped between these two great economic blocs. There is a tendency to use the FTA like a political football in a doomed match neither side is destined to win. The success of Mr Modis recent tour of France and Germany will most certainly be measured by how the two sides are able to zero in on the sticking points of this agreement and find a fair middle ground. Petty political posturing often hampers the path to all-round economic prosperity. A refreshed approach and framework for continued dialogue is therefore a pre-requisite. One of the fastest growing Indian Diaspora population is to be found in Italy today. The EUs posturing over Italian marines part of the Indian legal system on murder charges casts a shadow over what is in every sense a historic visit from the Indian side. A proposed India-EU summit should not have been held to ransom in this unfortunate saga. The choice of France and Germany reveals a very clear pattern of Indias foreign policy of enlightened self-interest. But at the same time the Indian PM deftly recognises the need to meaningfully engage in world issues such as climate change and the Islamic State and other terror-related threat that knows no geographical boundaries. The UK in all its election campaign stupor has been playing hide-and-seek over its place within the European Union. It is sending out the wrong IT 8 TCS ranked top employer in Europe 9 TCS launches app to track UK elections India to launch internal ease of business ranking Tier 2 cities take a qualitative leap in India Page 22 Page 6 INDIA INC. PICKS SECTOR FOCUSHOT SPOT ANALYSIS PHARMA 32 India moves on ease of investment flow 33 Tata backs 1.5mn innovation centre in Europe ENERGY INSURANCE 27 UKs Green Bank backs clean energy in India 35 India to open up insurance to foreign Investors 26 Indias Solar vision makes Green Oscar cut 36 Cipla scores major win in German patent case INDIA GLOBAL BUSINESS Indian Prime Minister Narendra Modi took his Make In India mantra along with him on a three- nation tour of France Germany and Canada. India Global Business tracks the visit as well as all the other developments in the post-Budget arena. Modi on way to find middle ground in Europe Page 16 CONTENTS Chief Executive Manoj Ladwa Senior Editor Aditi Khanna Chief Operating Officer Shamit Ghosh Events Manager Dina Ladwa Operations Rajvi Singhi Sales Advertising Jennifer Francis Project Coordination Nomita Shah Digital Marketing Executive Darshan Khant Graphic Designer Ankur Saxena Operation Support Saurabh Brahmbhatt Research Associate Purva Gosai Accounts Admin Bhavin Thakor India Inc. Limited all rights reserved. Reproduction in whole or in part without our written permission is prohibited. Views expressed by our contributors are their own and do not necessarily represent the views policies of India Inc. While every effort is made to achieve total accuracy India Inc cannot be held responsible for any errors or omissions. www.indiaincorporated.com Online Print Events SPECIAL REPORT MODI ON EUROPE TOUR OPINION MAKE IN INDIA GUEST COLUMN 19 Bangalore worlds cheapest city to live 31 Indias Lords Hotels Group eyes Africa expansion 10 Indias move from compulsion economics to conviction economics - Modi scores high by Manoj Ladwa 17 Modi takes Make in India to Europe Canada 18 Modi woos German firms to Make In India 28 Smart wearable tech is the next wave for mobile industry by Nitin Dahad 20 New bank to fund Make in India vision 24 Make in India boost with Reliance deal 24 Whither a true National Sector by Siddharth Birla www.indiaincorporated.com INTERVIEW 12 India back on investor radar India Inc. Interview with Indias Finance Minister Arun Jaitley 37 India has got a new spirit India Inc. Exclusive Interview with Ratan Tata INDIA GLOBAL BUSINESS6 Tier 2 cities take a qualitative leap in India I n a major boost to Indias Smart Cities programme the so-called Tier 2 cities of Hyderabad and Pune have been ranked higher in terms of quality of life than even Mumbai and New Delhi. The Mercer 2015 Quality of Living rankings which evaluates local living conditions in more than 440 cities across the globe pointed to rapid population rise for the decline in standards for Indias financial and political capitals. The report will undoubtedly go a long way in attracting more global business investment towards Indias smaller yet rapidly growing cities. Hyderabad 138 and Pune 145 rank higher for quality of living than the countrys more traditional business centres Mumbai 152 and New Delhi 154. Considerable population increases in Mumbai and New Delhi in recent decades have increased existing problems including access to clean water air pollution and traffic congestion the report said in its assessment for India. HOT SPOT April 2015 As with last years survey we continue to recognise emerging cities that are increasingly becoming competitors to traditional business and finance centres. Slagin Parakatil Principal at Mercer www.indiaincorporated.com 7 HOT SPOT Slagin Parakatil principal at Mercer said As with last years survey we continue to recognise emerging cities that are increasingly becoming competitors to traditional business and finance centres. These so called second-tier emerging cites are investing particularly in infrastructure to improve their quality-of-living standards and ultimately attract more foreign companies. Vienna topped the charts as the worlds best in terms of quality of living followed by Zurich Auckland Munich and Vancouver in the top five. Overall European cities dominate the top of the ranking with Singapore 26 the highest-ranking Asian city whereas Dubai 74 ranks first across the Middle East and Africa. Montevideo in Uruguay 78 takes the top spot for South America. The Mercer rankings are based on assessment across 10 categories including political economic and social environment as well as housing and medical provisions. Cultures societies and comparatively different climates as well as political instability high crime rates and poor infrastructure can be difficult to navigate and settle down in for employees and their families. Employers need to assess whether their staff and families will encounter any drop in quality of living when relocating and ensure they are fairly compensated for it explained Parakatil. In the UK London 40 is the highest ranked followed by Birmingham 52 and Glasgow 55. April 2015 SECTOR FOCUS - IT I ndias largest software services provider Tata Consultancy Services TCS has been named the top employer in Europe for the third consecutive year. The Top Employers Institute certification agency described the Mumbai-headquartered information technology giant as an exceptional performer and classified it as top employer in eight European countries the UK Belgium the Netherlands Germany Switzerland Sweden Denmark and Norway. The company has been recognised across nine core human resources areas talent strategy workforce planning onboarding learning and development performance management leadership development career and succession management compensation and benefits and organisational culture. TCS was ranked as the overall number one in a process that assessed 688 organisations across Europe. Only companies that have been certified as a top employer in at least five individual countries in Europe are eligible for the award. In the UK the company secured the certification for the fifth year in a row while it was certified for the third consecutive year in Belgium the Netherlands Germany and Switzerland and for the second time in Sweden and Denmark. Norway marked a first for the company. TCS executive vice-president and global head of human resources Ajoy Mukherjee said in a statement We are honoured and delighted to have been rated as the leading employer for the third consecutive year. TCS is the IT services market leader in customer satisfaction in Europe. We believe that the main driver of satisfaction is our extremely talented workforce of 318000 global professionals and our relentless focus on hiring and retaining the best talent across Europe will continue. The Top Employers Institute is an independent organisation that identifies top performers in the field of Human Resources worldwide. David Plink CEO of Top Employers Institute said TCS has been able to prove that they focus on the employee work experience and have a highly consistent application of HR policy practice and alignment across all countries. Apart from Europe TCS is also a recognised as a Top Employer in North and South America. The annual international research undertaken by the Top Employers Institute recognises leading employers around the world those that provide excellent employee conditions nurture and develop talent throughout all levels of the organisation and which strive to continuously optimise employment practices. TCS ranked top employer in Europe We believe that the main driver of satisfaction is our extremely talented workforce of 318000 global professionals and our relentless focus on hiring and retaining the best talent across Europe. INDIA GLOBAL BUSINESS8 April 2015 I ndias leading software services major Tata Consultancy Services TCS launched a smart- phone application that allows users to track analyse and visualise Twitter conversations about the 2015 UK General Election. ElectUK has been created to engage voters their representatives and political commentators with the polls on May 7 by turning their smartphone into a Big Data social media analytics tool. The app is free to download and is available on both iOS and Android devices. Shankar Narayanan TCS country head for the UK Ireland said ElectUK has been created to showcase the potential uses of TCS Digital and Big Data technologies going beyond business. The app is a great example of how TCS can combine Big Data analytics social mobile and cloud to deliver valuable insight on matters of relevance to the society at large. Weve even included a button to help people register to vote because we believe that digital technology can and should help bring about a more informed and engaged voter. ElectUK uses data taken directly from Twitter and analyses millions of tweets about and from the political parties candidates and the electorate in the 2015 UK General Election. This data is run through TCS PeriVistaTM Big Data analytics software and delivered to the application as a range of share-able graphics. The app is based on a database of more than 2000 parliamentary candidates allowing users to compare sentiment and trends including the issues of highest importance in the debate. Satya Ramaswamy global head of TCS Digital Enterprise said Digital is indeed a formidable force which can benefit the community. ElectUK demonstrates how Digital technologies can be used to deliver real insights directly into the hands of users. This has huge potential for everything from product design and marketing to customer service and sales. ElectUK is the latest social analytics application from TCS with the company having previously created similar apps to analyse social data around the 2014 Indian election and the FIFA 2014 World Cup. TCS launches app to track UK elections The app is a great example of how TCS can combine Big Data analytics social mobile and cloud to deliver valuable insight on matters of relevance to the society at large. Weve even included a button to help people register to vote because we believe that digital technology can and should help bring about a more informed and engaged voter. SECTOR FOCUS - IT www.indiaincorporated.com 9April 2015 April 2015 INDIA GLOBAL BUSINESS10 OPINION Manoj LadwaFounder CEO India Inc. Indias move from compulsion economics to conviction economics - Modi scores high W hat a transformation a quarter century of economic reforms has wrought Yester- days basket case is now cited as a role model for the world. International Monetary Fund IMF managing director Christine Lagarde on a high profile visit to India has said the country is among the only bright spots in the gloomy global economy. In meetings with Prime Minister Narendra Modi Finance Minister Arun Jaitley and Reserve Bank of India governor Raghuram Rajan she complimented them on the direction of Indias economy. Addressing students at a leading Delhi college Lagarde said Today all elements are aligned to make India a global powerhouse. This is Indias moment. Seize it. Chak de India. While many countries in the world are grappling with low growth India is marching in the opposite direction she said at the function at Lady Shriram College. Lauding the government on the measures it has initiated to revive the economy she said subsidy labour reforms and a stable and predictable regulatory regime will boost private investments and help the economic revival in India. In this context she added that the Union budget is a step in the right direction. The IMF estimates that India will grow at 7.5 per cent in 2015-16. This is slightly lower than the governments own estimate of 8 per cent growth. The IMF the World Bank and the Organisation for Economic Cooperation Development have all predicted that India is set to outpace global economic powerhouse China in GDP growth in 2015. Thats a 360-degree turnaround from the situation prevailing in 1991 when decades of bad economics and poor politics had wreaked havoc with Indias economy and reduced its foreign exchange reserves to the equivalent of just two weeks of imports. India was almost bankrupt and on the brink of an embarrassing and debilitating default. Then Prime Minister P. V. Narasimha Rao handpicked economist-bureaucrat-central banker Dr Manmohan Singh to be his finance minister. Singh went with a begging bowl to the same IMF that is now lauding India to seek a bailout. This was provided but with several strings attached prompting anguished cries about a sellout to the West. The economic reforms that followed as a result of those conditions slowly brought Indias economy back on track. But large sections of the political class including the old guard in the Congress remained unconvinced. Their unstated argument went something like this Economic reforms was distributing fishing rods to the population and teaching them how to fish. Once trained they would no longer have to approach politicians for the little slices of fish they doled out in return for votes. Therefore Indian reforms over the last 24 years have come about more by stealth or compulsion rather than from conviction. Most mainstream politicians routinely mouthed homilies about being pro-poor. In effect this was a shorthand for economically unviable programmes that handed April 2015www.indiaincorporated.com 11 OPINION out crumbs to various special interest groups to buy their political loyalty. But what this did was that it prevented the people from learning how to fish. But reforms even by stealth unleashed forces that valued aspiration ambition and achievement that its early and somewhat reluctant proponents could not control. India with more than 800 million under-35 aspirants was slowly gearing up for a radical change. They say that no force on earth can stop an idea whose time has come. Likewise it is also impossible to succeed with an idea whose time is up. Riding this yearning for change the BJP led by Narendra Modi swept for power last May. Completely turning conventional Indian political wisdom on its head the new government categorically rejected the artificial distinction between policies that are pro-poor and pro-rich. Like Clinton and Blair did so successfully in the USA and UK respectively Modi sought to take the centre ground and make it his own. Not on the extreme right or the extreme left but its the aspirational centre which ultimately helps a party win elections and win big. Jaitley declared on the floor of Indian Parliament several times the last time as recently as on Tuesday in his reply to the debate on the Budget that the only way to help the unemployed get jobs was to encourage businesses to invest more the only way to ensure inclusive growth for the poor was to ensure that subsidies and other state handouts meant for the underprivileged reached them on time and without any pilferage on the way. Thus for the first time we have a government in New Delhi that is pursuing economic reforms out of conviction and not out of compulsion. The equation is simple encouraging businesses to invest more leads to capacity additions. This creates jobs and pulls people out of poverty. This in turn creates a virtuous cycle of economic activity that ensures prosperity for all. But in Modis context this approach should not be mistaken for trickle down economics as the recent Union budget has demonstrated the conviction in the role of an efficient though over time much leaner public sector which acts as both a stimulus where the private sector lags and as a safety net where the private sector wont go. Even the IMF is sitting up and taking notice. Speaking on the new GDP series which has resulted in GDP growth rates for the past two years as well as the projection for this and the next year being bumped up significantly Lagarde said We at IMF are fairly confident of Indias new revised GDP data. Growth cant be your only goal welfare of people specially those have traditionally not been included your objective should be inclusiveness. That way you wont have these cycles of ups and downs she pointed out. The Jan Dhan Yojana does precisely this. By ensuring that every Indian family has a bank account the Modi government is embarking on a model of financial inclusion whose effects will be felt for decades to come. So much so that it has become a model the World Bank is considering for other developing and emerging economies. So from a pariah with a begging bowl India is now an economic thought leader and outlier whose schemes are sought to be emulated around the world. Touching on the topic of gender equality and diversity IMF chief added that these issues need to be addressed. Female participation in Indias labour force is at about 33 per cent. This is considerably lower than the global average of 50 per cent and almost half the East Asian rate of 63 per cent. At her meeting with Jaitley that lasted for over an hour the two sides agreed to jointly host a conference on Advancing Asia Investing for the Future in March 2016 in India underlining the fact that Indias time to take ownership and leadership of its regions development has arrived. Addressing students at a leading Delhi college Lagarde said Today all elements are aligned to make India a global powerhouse. This is Indias moment. Seize it. Chak de India. -IMF managing director Christine Lagarde April 2015 INDIA GLOBAL BUSINESS12 INTERVIEW India back on investor radar Interview with Indian Finance Minister Arun Jaitley I ndian finance minister Arun Jaitley wrapped up his first official visit to the UK recently on a high note. Besides a flurry of meetings with politicians including UK Prime Minister David Cameron and Chancellor George Osborne he held detailed talks with Britains investor community to reiterate the Narendra Modi led governments resolve to ensure ease of doing business in India. India Inc. spoke to the senior Cabinet minister and probed him on key issues like retrospective taxation in reference to the recent 1.6-billion tax dispute involving UK-based oil major Cairn Energy and the contributions of global Indians towards Indias growth story. QHow would you describe the investor sentiment in Britain Theres a huge amount of enthusiasm about India. People are looking for areas to invest in India. India is back on the radar of investors we had fallen off from there earlier. I held a series of conferences with investors including one organised by the UK India Business Council UKIBC one at the London Stock Exchange and a conference of institutional investors organised by JP Morgan. The investors also closely scrutinise every step taken by the government on two grounds whether you are able to incrementally move in the direction you have promised or are you taking any movements in the contrarian direction. And I think we are moving in one consistent direction. The second fact is whether obstructionism able to halt you or are you able to overcome it. So far weve surely been able to overcome it. April 2015www.indiaincorporated.com 13 QHas the Cairn Energy tax dispute overshadowed this enthusiasm When the new government had come in I had stated the policy of the new government that it would not move in the direction of any retrospective legislation on tax issues. Two any fresh notices or new action will ordinarily not be done and if any assessing officer wants to take any such action hell require the clearance of the Central Board of Direct Taxes CBDT. As far as earlier notices and legacy issues are concerned theyll have to be sorted out through a due judicial process. Weve stuck to that word. And wherever in the earlier issue the judicial process has decided some issue as recently in some cases they have we have accepted that. For instance we accepted whatever the courts decided in the case of Vodafone and Shell. That remains the declared position of the Government of India. Any assesse if he has any grievance against what I call the legacy issues of the previous government they have the due process to resort to. QWill the tax regime be further reformed We are trying to rationalise taxes lower taxes and introduce a non-adversarial and fair system of taxation. There is a raging ideological battle between reform and obstruction. The government is fairly determined. The roadmap for us is very clear. We need a lot of investment in India and we need to ease the process of doing business in India and therefore slowly we are introducing changes in that direction. QIs the India-UK relationship on a firm footing Indias investment here and the UKs investment in India are quite strong and improving. Of course trade ties are becoming stronger. There are not too many outstanding issues. The UK is the biggest major investor in India in the G20 with India investing more in the UK than it does in the rest of the European Union combined. There is a huge amount of interest that all British leaders have with regard to what is happening in the Indian economy as far as the reform process is concerned. The passage of the Insurance Bill in the Rajya Sabha on the eve of my visit here couldnt have come at a better time. QWhat role does the global Indian Diaspora play The India-UK partnership is furthered by a very strong 1.5 million British Indian community which has come into this land adopted it as its own and probably will go down as one of the most extrovert communities anywhere in the world. The Diaspora is in a unique position. It has become a very powerful and dominant force in this country with the proud privilege of being both British and being India. INTERVIEW I ndian Prime Minister Narendra Modi took his Make in India mantra to France Germany and Canada. The three-nation tour is being touted as a wide-angle mission with security and energy issues expected to top the agenda between April 9 and 16. It comes a month after Modi took a similar charm offensive closer home with his three-nation Indian Ocean tour covering Seychelles Mauritius and Sri Lanka and is expected to be as comprehensive as the wide-ranging deals struck in the countrys Indian PM takes charm offensive to Europe Canada April 2015 INDIA GLOBAL BUSINESS16 Modi on way to find middle ground in Europe P rime Minister Narendra Modis visit to France part of his ongoing efforts to recalibrate Indias ties with the so called middle powers that lie between countries such as China and Paki- stan that Indias foreign policy establishment con- siders a problem and the two big powers the US and Russia may lead to a small breakthrough on defence ties and in the field of nuclear cooperation. The 12-billion deal for the acquisition of 126 Rafale fighter planes is stuck over the fineprint of the pricing agreement. The sticking point Dassault the planes builder now wants a higher price than the one that enabled it to win the race against the US F-18 and F-16 the Russian Mig 35 and the Eurofighter Typhoon in which British and German contractors have a major stake. Meanwhile the delay in acquiring new planes is hurting India. The Indian Air Force is down to 34 squadrons against the requirement of at least 42. Compounding matters is the fact that 14 of these operational squadrons are flying the more than four decades old Mig 21s and Mig 27s which have in recent times proved very crash-prone. Theres a proposal now to buy 40 Rafales off the shelf from France at a price of about 4 billion pending the finalisation of the stuck deal. Modi is also expected to push for deepening nuclear cooperation. French firm Areva which is building the 9900 MW Jaitapur Nuclear Power Plant in collaboration with the state-owned Nuclear Power Corporation of India is expected to sign a deal with Indian engineering giant Larsen Toubro for manufacturing components and other critical parts in India under the Prime Ministers pet Make in India initiative. Intense backroom negotiations are on over the pricing of power produced at Jaitapur. India has reservations about the high price of power being projected by Areva and efforts are on to announce a breakthrough on this tangle during the Prime Ministers visit. Modi will fly to Germany after the French leg of his tour where he will inaugurate along with his host Angela Merket the Hannover fair before proceeding to Canada on the last leg of his tour which unlike previous visits by Indian Prime Ministers is laser focused on the economic benefits India can derive from ties with these countries. MODI ON EUROPE TOUR April 2015www.indiaincorporated.com 17 MODI ON EUROPE TOUR Modi takes Make in India to Europe Canada I ndian Prime Minister Narendra Modi will take his Make in India mantra to France Germany and Canada this week. The three-nation tour is being touted as a wide- angle mission with security and energy issues expected to top the agenda between April 9 and 16. It comes a month after Modi took a similar charm offensive closer home with his three-nation Indian Ocean tour covering Seychelles Mauritius and Sri Lanka and is expected to be as comprehensive as the wide-ranging deals struck in the countrys neighbourhood. According to Bharatiya Janata Party spokesperson G.V.L. Narasimha Rao The visit will give impetus to PM Modis Make in India campaign. It will be an opportunity for corporates in these three countries to have a one on one or a group meeting with the PM and discuss their investments plans for India. The first stop is Paris where some the agreements that are expected to be signed after bilateral meetings between Modi and French President Francois Hollande are memoranda of understanding on space cooperation tourism anti-terror training between the National Security Guard and Frances GIGN special ops forces National Gendarmerie Intervention Group at the forefront during the Charlie Hebdo anti-terror operations earlier this year. In Germany Modi is expected to inaugurate the Hannover Messe 2015 fair along with German Chancellor Angela Merkel on April 12. Germany is the eighth-largest foreign direct investor in India while German FDI in India during the period 1991-2014 was valued at 7.57 billion. The Indian PM will then head to Canada making stops in Toronto Ottawa and Vancouver. Canadian Prime Minister Stephen Harper said Canada and India enjoy a close friendship based on shared values of democracy pluralism and a mutual interest in expanding trade. Indias growing economy presents enormous opportunities for Canada and I look forward to meeting with Prime Minister Modi to further strengthen bilateral relations and expand our trade and investment ties. India is Canadas largest trading partner in South Asia and continues to be a priority market under Canadas Global Markets Action Plan. April 2015 INDIA GLOBAL BUSINESS18 Modi woos German firms to Make In India I ndian Prime Minister Narendra Modi moved on from France to Germany taking his Make In India mantra with him. India is now a changed country we have removed lot of regressive taxation regimes. Our regulatory regime is much more transparent responsive and stable he said in his inaugural address alongside German Chancellor Angela Merkel at the India Pavilion at Hannover Messe the worlds largest industrial fair. He added Not only Germany the whole world is looking at India. Low-cost manufacturing efficient governance and no-defect manufacturing makes India a global engine in the manufacturing centre. All kinds of rating agencies of the world are saying India is the fastest growing economy. Merkel reciprocated by saying that Germany was keen to forge a very close partnership with India. I think Hannover fair would allow us to turn a new chapter in our relationship. Let me assure you that Germany stands ready to develop this partnership she said. From Hannover the Indian PM heads to Berlin where he will meet members of the Indian community based in Germany before embarking on the Canadian leg of his three-nation tour. The highlight of his tour so far has been an end to the protracted discussions to conclude a deal with France on the Rafale jets. While in Paris Modi announced that India would buy 36 of the fighter planes in flyaway condition. Keeping in mind the critical operational necessity of fighter jets in India I have talked to him French President Francois Hollande and requested for 36 Rafale jets in flyaway condition as quickly as possible under a government-to-government deal he said. An agreement on the stalled nuclear project in Jaitapur Maharashtra was among 17 pacts signed after the talks between Modi and Hollande. The Jaitapur project where French company Areva is to set up six nuclear reactors with a total power generation capacity of about 10000 MW had been stuck on differences over the cost of the power generated. The agreement between Indias Larsen and Toubro LT and Frances Areva is aimed at cost reduction by increasing localisation and to improve the financial viability of the Jaitapur project. France has also announced an investment of 2 billion in India. MODI ON EUROPE TOUR April 2015www.indiaincorporated.com 19 SPECIAL REPORT B angalore has emerged as the worlds cheapest city to live in according to findings of a new global survey. The sub-continent as a whole offers the best value for money with Mumbai Chennai and New Delhi also being ranked on the lower end of the Worldwide Cost of Living Report 2015 compiled by the Economic Intelligence Unit EIU. Indian cities make up four of the six cheapest. Structurally low wages and price subsidies on some staples have made for a highly price sensitive market. Falling oil prices will add further weight to this the report said in a statement. The annual report is a relocation tool which compares the cost living between 133 cities using New York as a base city. Bangalore shares the lowest rank on the list with Karachi in neighbouring Pakistan followed by Mumbai at 130 Chennai at 129 and New Delhi at 128 on a list topped by Singapore for the second consecutive year. It heads an unchanged top five compared to last year joined by Paris Oslo Zurich and Sydney. Geneva Copenhagen Frankfurt and Helsinki complete the top 10. London in 11th place is now as pricy as Tokyo which was replaced by Singapore as the most expensive city last year. Relative stability at the top of the raking is in contrast to significant fluctuations lower down the ranking especially relating to exchange rate weakness. Caracas in Venezuela falls 124 places from 6th last year to 4th from bottom now. Conversely Seoul in South Korea is rising quickly up the rankings. Ranked 50th five years ago it is now in the top 10. The situation of an unchanged top five is very rare for the worldwide cost of living survey and disguises some significant global drivers that are impacting on the cost of living everywhere. In fact a look at the data six months ago would have shown a different top five and things are changing quickly. Rebasing the survey to todays exchange rates would put Zurich top highlighting how fluid the global cost of living has become explained Jon Copestake editor of the report. In Western Europe a gap is developing between top-ranked locations and those in struggling euro zone economies. Paris which is ranked second overall has a cost of living that is 26 per cent higher than in New York but in Lisbon and Athens the cost of living is 26 per cent lower than New Yorks. Indian cities make up four of the six cheapest. Structurally low wages and price subsidies on some staples have made for a highly price sensitive market. Bangalore worlds cheapest city to live in April 2015 INDIA GLOBAL BUSINESS20 A new bank announced by Indian finance minister Arun Jaitley as part of a series of proposals to realise the governments Make in India vision in this years Budget is being seen as a game-changer for small industries in the country. The Micro Units Development and Refinance Agency MUDRA is aimed at generating inclusive growth and will be set up with 3.2 billion of capital to help microfinancing firms to lend more. Indias small businesses employ more than 106 million workers according to official statistics in a country that brings a million new workers into the workforce every month. The approximately 57.7 million micro manufacturing trading and service businesses operated by hard-working entrepreneurs generate the maximum jobs in the country. And this is where the MUDRA bank steps in with its unique characteristics. It is structured as an apex refinancer to enable over 50 million unfunded entrepreneurs to access formal credit from and through layers of credit institutions registered under it. The Economic Census 2014 found that while the 57.7 million micro units provide 128 million jobs banks fund only 4 per cent of their needs. In July 2013 the Credit Suisse Asia Pacific Equity Division released a study on this non-formal sector in India titled Indias better half the informal economy. It noted that nine out of 10 jobs in India and half of its GDP originated in the non-formal sector including the 57.7 million micro businesses. The study estimated the corporate contribution to Indias GDP at just 15 per cent and that of the listed ones at 5 per cent. The MUDRA architecture fills in the glaring gap to fund the uniquely Indian non-formal sector which has remained officially unfunded for too long. The Micro Units Development and Refinance Agency MUDRA is aimed at generating inclusive growth and will be set up with 3.2 billion of capital New bank to fund Make in India vision The study estimated the corporate contribution to Indias GDP at just 15 per cent and that of the listed ones at 5 per cent. MAKE IN INDIA Make in India boost with Reliance deal This is a unique opportunity for Reliance Group to participate in Prime Minister Narendra Modis Make in India programme for the high growth defence sector. Anil Ambani Chairman - Reliance Group T he action is hotting up in Indias recently opened up defence sector. In the biggest acquisition in Indias defence sector Reliance Infrastructure Ltd part of the Anil Ambanis Reliance Group has acquired an 18 per cent stake in Pipavav Defence and Offshore Engineering Company Ltd for about Rs 820 crore 135 million. Reliance will get management control of the company along with the stake. It will now have to make a mandatory 26 per cent open offer to minority shareholders. This is expected to cost an additional R1300-1400 crore 220-240 million. The Munjals of Hero Group and the Mahindra Mahindra Group were also in the race to buy Pipavav but Ambani has beaten them to the prize. This is a unique opportunity for Reliance Group to participate in Prime Minister Narendra Modis Make in India programme for the high growth defence sector. We are confident that our strategic investment will create long term value for all stakeholders said Anil D. Ambani Chairman Reliance Group in a statement released to the media. Pipavav Defence is an integrated ship building and offshore infrastructure company and the first in the private sector to procure a license and contracts to build frontline warships for the Indian Navy. According to the open offer Reliance will acquire an additional 26 per cent stake in Pipavav at Rs 63 10 per share the same price at which it acquired its 18 per cent stake. The Gandhi family who promoted Pipavav will retain a minority stake in the company and have the right to nominate two non-executive directors to the board. We share a philosophy of long-term value creation for all stakeholders. I look forward to supporting Reliance to realize the goal of creating Indias foremost defence company said Nikhil Gandhi founder promoter and chairman of Pipavav Defence. MAKE IN INDIA April 2015 INDIA GLOBAL BUSINESS22 India to launch internal ease of business ranking T he Narendra Modi government will rank states according to the ease of doing business. Several departments of the central government are working with their counterparts in the state capitals finalising the parameters for this elaborate exercise. The Prime Minister has told global and domestic investors on more than one occasion that his government will ensure that they get the red carpet treatment when they come to India instead of the red tape that they have come to expect. In line with this he has set a target of taking Indias ranking currently at 142 out of 189 countries to the top 50. To do this it is critical for him to take the states along. Already many progressive states such as Maharashtra Gujarat Punjab Haryana and some of the southern states have policies in place that welcome investors. But many more states lag behind on this count. It is here that the ranking of the states will help by pointing out which parameters they need to improve upon. And its not only the laggards that will benefit. Even the higher ranked states will get to know what ANALYSIS A set of clearly defined and transparent parameters will help investors choose which states they want to invest in and which they want to avoid. April 2015www.indiaincorporated.com 23 ANALYSIS if any pain points investors are facing and take steps to correct them. Over the last few years several traditional laggards have been trying hard to play catch up with the more industrialised states. Three Madhya Pradesh Orissa and Bihar fall into this category. They are ruled by the BJP Biju Janata Dal and Janata Dal United respectively. This is a good indication that barring a few stray cases there is broad bipartisan support for improving the ease of doing business to attract investments. A set of clearly defined and transparent parameters will help investors choose which states they want to invest in and which they want to avoid. Over time as investments pour into the higher ranked states creating prosperity and jobs the lower ranked states even those that are ruled by parties ideologically opposed to opening themselves up to private investments will have to fall in line. Since these ruling parties do not operate in a vacuum their rivals will use the rankings and the resultant creation of jobs and rise in prosperity levels to beat them with. Since young India which accounts for two-thirds of the countrys population is highly aspirational intransigence on improving the ease of doing business for ideological reasons could prove politically counter-productive. So the ranking of the states will serve two purposes. First they will force states to compete against one another to improve their own standings. And secondly they will compel others to fall in line or face irrelevance. And overall if at least 10 states begin to compete against each other in right earnest it will just be a matter of time before Indias overall ranking on the ease of doing business improves. April 2015 INDIA GLOBAL BUSINESS24 Whither a true National Sector Aged 57 years Mr. Sidharth K. Birla is a Company Director and Entrepreneur Chairman of Xpro India Limited and Digjam Limited. He holds an MBA Degree from IMD Switzerland and is an Alumnus of the Harvard Business School. He is Immediate Past President of FICCI Indias largest apex business chamber. T he fundamentals of value creation are refreshingly simple - businesses must earn return on capital greater than its cost. Evidence is convincing that companies with long-term horizons and keeping broader stakeholder interests on their radar create more value and are therefore considered success- ful. In simple terms responsible people recognise that creation of value does not harmonise with exploited or short-term gains or greed. Its a dichotomy that confidence is the cheapest form of motivation yet confidence in business has tumbled globally. Politicians com- mentators and rising inequality - all push for more intensive regu- lation or governance impositions while academics and responsible business leaders support a broad- based yet nonintrusive focus on stakeholders which includes society at large. In this contextual background we must focus on efficient uses of capital stimulating investment skilling workers and strengthening social institutions. Even as virtues and vices of capitalism are breathlessly debated all - ultimately even if grudgingly - agree that capital enterprise and job creators are central to development for which a combination of investment from both public and private sources is crucial. For such a combination to flourish I believe we must break down the class-dividing mindsets of public and private sectors and think in terms of a National Sector which can have both public and private sources of capital but which yields economic benefit to the nation irrespective of ownership. Week after week there is a churn of issues where decisions are evaluated or re-evaluated on the basis of whether they yield benefit to the private or public sector. One shows little care about whether or not - or how - it adds to the national economy. In our ability to live with social divides we readily tolerate divisions beginning with the Nehruvian idea of public sector at commanding heights of the economy. This found its way into laws regulations thinking and practices. It is not uncommon for governmental or legislative or judicial thinking to hold bias that public is somehow noble and deserving while private could equate to a negative notion - be it greed or another ulterior purpose. Such divides dont bode well for our required future. A paradigm shift delivering more openness without oppression is the need of the day. We spend time articulating how many laws are redundant and can be GUEST COLUMN April 2015www.indiaincorporated.com 25 GUEST COLUMN repealed but should we not overhaul laws which may not need repealing yet significantly affect daily lives of citizens administration or commerce I doubt we have had meaningful realignment or junking of laws since 1991. Yet we show alacrity for creating more laws when implementation of existing ones can do better. The ingrained belief could be that legislation delivers integrity or there is expediency in harshness but nothing is further from the truth as history shows. Government has made admirable progress in building transparency supported by technological intervention and reduction of individual discretion or interface. These can overcome decades of narrow thinking and inherent distrust of enterprise and bureaucracy. Patience from both citizens and leadership is necessary to build the healthy concept of a National Sector over the narrower interpretations we carry from the past. April 2015 INDIA GLOBAL BUSINESS26 SECTOR FOCUS - Energy A n Indian company that has popularised solar lamps around the globe and a group that promotes use of solar energy in business processes has been shortlisted for the annual Green Oscars this year. The Ashden Awards 2015 hand-picked Greenlight Planet for pushing up the quality of solar lighting around the world with its durable and affordable Sun King range of solar lamps. The awards jury said Emanating a more powerful light and lasting longer than previous models the lamps are also very versatile you can put them on a stand carry them around or hang them on the wall. Aside from having great products the company also prides itself on its army of village agents who help make sure the lamps reach the people who need them most. And having light after dark doesnt just help people work study and play it also means they feel safer walking outside. Originating in Orissa Greenlight Planet has expanded to sell more than 3 million lamps across 33 countries. SunBest is another solar success story for its work with tea and spice makers to save money and reduce their carbon footprints by using solar energy in their production processes. Typically fresh tea and spices are dried using air thats heated by burning large amounts of fossil fuels or wood. Tamil Nadu based SunBest sells solar heaters to large agricultural businesses that do the exactly the same job but with much less damage to the environment. Solar drying on a large scale is not yet widely used but its a relatively cost-effective and straightforward process with the large heaters easily accommodated on the roofs of processing factories. As such theres huge potential for this renewable technology to be used across the tea spices and pulses industries. The final nominee from India this year is Mahindra Lifespaces for its work in creating sustainable urban communities by developing attractive low-carbon homes in Mumbai and other urban areas in India. Simple techniques like making sure the building faces the right direction and using insulation efficient lighting and natural light all help new home- owners save energy and cut carbon emissions with the costs of energy-saving measures paid back within seven years through savings on fuel bills. After selling more than 3000 good-quality homes in the last three years Mahindra Lifespaces is now turning its attention to social housing.Now in their 15th year the Ashden Awards celebrate pioneering businesses and organisations from around the world that are working towards tackling climate change and improving peoples lives. Indias solar vision makes Green Oscar cut Greenlight Planet has expanded to sell more than 3 million lamps across 33 countriesSunBest is another solar success story for its work with tea and spice makers to save money and reduce their carbon footprint. April 2015www.indiaincorporated.com 27 B ritains Green Investment Bank GIB has received a 200 million boost to back clean energy projects in India and Africa. UK energy and climate change minister Ed Davey revealed the bank will set up a dedicated team to work on projects using public and private sector funding and that the bank would initially target renewable and energy efficiency initiatives in India South and East Africa. He said It has been successful domestically and we think it can be successful globally. Its a pilot a joint venture with the GIB. Theyll bring in private players the 200 million isnt just public but more private money. The GIB was set up in 2012 with 3.8 billion of public funds to leverage clean energy investment within the UK. In 2014 the UK government announced plans for the bank help drive private sector renewables investment overseas using part of its international climate fund. Davey said It GIB will focus on renewable energy and energy efficiency projects in developing countries delivering significant emissions reductions and poverty reduction by supporting economic growth job creation and the development of reliable energy infrastructure. And by working with the Green Investment Bank we can maximise the commercial viability impact and effectiveness of UK climate finance. And this work has to go hand in hand with reducing incentives for high-carbon energy. European Union state aid rules prevent the GIB from investing in solar power and large-scale onshore wind in the UK. But the international arm of the GIB will not be restricted by state aid regulations so is likely to focus on these technologies among others. The GIB has already set up a small dedicated team to identify a potential pipeline of projects however the spokesman said the project was still at early stages. Shaun Kingsbury chief executive of GIB said the move would allow the bank to invest outside the UK for the first time. I am confident that our unique business model tried and tested in the UK will have a very positive effect in developing countries helping them to build vital new green energy infrastructure he said in a statement. The GIB team is set to work closely with the UNs new Green Climate Fund which received 10 billion of pledges from donor countries at the end of 2014. UKs Green Bank backs clean energy in India UK energy and climate change minister Ed Davey revealed the bank will set up a dedicated team to work on projects using public and private sector funding and that the bank would initially target renewable and energy efficiency initiatives in India South and East Africa. SECTOR FOCUS - Energy April 2015 INDIA GLOBAL BUSINESS28 OPINION Nitin Dahad is a consultant and advisor to the technology industrial and media sector and to government agencies and trade organisations to develop global market strategies and programs based on nearly 30 years experience across Europe US Asia and Latin America. Smart wearable tech is the next wave for mobile industry I ts now clichd to say that mobile technology is becoming a fundamental part of almost every aspect of life. This was certainly evident at this years Mobile World Congress in Barcelona last month which was attended by over 93000 people. The key trend this year was around connected devices watches fitness bands fashion health monitoring devices and so on. It was also clear that wearable technologies are now going mainstream and growth in this market will continue with the subsequent hype around the launch of the Apple Watch. India will itself be a key part of this ecosystem as chip manufacturers like Qualcomm Broadcom and Intel are developing devices for the wearable and Internet of Things IoT products for local markets too. Speaking in the Economic Times recently Intels South Asia director of marketing and market development Sandeep Aurora said the company is building system-on-chips for wearables and IoT at its Bengaluru RD centre A lot of action is happening on this front and we have a robust roadmap for these market segments. India will be adding value to the whole wearable market in a significant way. Wearables are now an integral part of any original equipment manufacturers product portfolio. At the conference I saw numerous smart bracelets and smartwatches. In India sales of wearable devices such as smartwatches and fitness bands was around 100000 units in 2014 and this will grow to slightly over half a million in 2015 according to Counterpoint Research. Recent global forecast data from International Data Corporation IDC on wearable devices says vendors will ship a total of 45.7 million units in 2015 up 133.4 percent from the 19.6 million units shipped in 2014. By 2019 total shipment volumes are forecast to reach 126.1 million units. A key driver for this growth in 2015 is an increased focus on smart wearables or those devices capable of running third-party applications. These include devices like the Apple Watch Motorolas Moto 360 and Samsungs Gear watches. The total volume of smart wearables will reach 25.7 million units in 2015 up from the 4.2 million units shipped in 2014. Basic wearables or those devices that do not run third party applications will grow from 15.4 million units in 2014 to 20.0 million units in 2015. Wrist-worn wearables including bands bracelets and watches will account for more than 80 percent of all wearable device shipments. Behind wrist-worn products are modular wearable devices or those devices that can be worn on any part of the body with a clip or a strap. Clothing is the third category and is expected to grow the fastest as companies embed computing power into items like shirts socks hats and other products with computing power. I saw many prototypes of such products at Mobile World Congress in Barcelona and the Wearable Technology Show in London last month. This is just the beginning of the wearable industry One graphic I saw at Mobile World Congress summed up the concept of wearable technology it showed an image of an ecosystem connecting Human to Cloud. Wearable technology involves collecting data from something being worn by a person and delivering that to the cloud for some April 2015www.indiaincorporated.com 29 kind of action or feedback. According to the organisers of the Wearable Technology Show the market is young but its already estimated to be worth 14bn and analysts believe this will rise to over 70bn by 2024. Wearables are here to stay and we are about to see them become more intrinsic to our lives our health wellbeing and entertainment. We are also about to see them move from mainly consumer applications to having a much bigger impact on industry said a statement from the organisers. In fact Sara Kami Shirazi product marketing manager for companion products at Sony Mobile Communications said to The Next Silicon Valley magazine in Barcelona This is just the beginning of the wearable industry. Todays wearable is just the embryo of whats to come. She spoke about Sonys philosophy to wearables which is about modularised thinking providing core products which can be customised by the customer to their own taste or preference. That is why Sony she says has developed a product portfolio in which each product is customisable. The market is moving towards customised wearables she added. She also said that no matter how good the product is technologically the key to a successful product is finding the right balance between technology and design. She added that wearables are just a small part of the ecosystem that the products are also an entry point into the connected home and its future would involve use with smart eyeglasses. The companys president Hiroki Totoki also talked about the value of wearables in industry. He commented The biggest benefit of wearable technologies is that they free up both hands. So we will be looking at what kind of workers want information on a real-time basis in what kind of circumstances and what information they need. Testament to this Virgin Atlantic announced an innovative trial with Sony Mobile Communications to test how new wearable technology can help improve the airlines maintenance and engineering processes. Engineers working on Virgin Atlantic aircraft at the airport and in the hangar will test Sonys SmartEyeglass Developer Edition SED-E1 tablet mobile phone and SmartWatch 3 in an eight- week trial at London Heathrow to test how the technology can be used for real time communication between the engineering team on the aircraft and in the engineering support areas. Using Sonys SmartWear alongside a smart phone or tablet will remove paper from some engineering processes and reduce the journey times between an aircraft and technical control. This will enable the engineers and technicians to remain on the aircraft during turnarounds helping to save valuable time as well as make a significant contribution to Virgin Atlantics targets to reduce paper waste. Engineers will be able to take pictures or video of the tasks they are working on. This will be linked to an app running on a smartphone which will allow the engineers to efficiently complete and submit a form requesting further technical assistance. Real-time video streaming will also allow office- based engineering staff to see a problem from the engineers point of view in order to provide more rapid technical assistance. Its clear that wearable technology has many different applications and with the growth in connected devices is going to be much more part of our lives. While some of us will see it today as just fitness bands trackers and smart watches theres a lot more to come that we may not even have imagined. According to the organisers of the Wearable Technology Show the market is young but its already estimated to be worth 14bn and analysts believe this will rise to over 70bn by 2024 OPINION April 2015 INDIA GLOBAL BUSINESS30 NEWS IN BRIEF Tefal plans Indian range Amazon India plans Hyderabad unit Indian appliances major Groupe SEB is planning to make tawa and kadai typical Indian cooking pots and pans under its French brand Tefal. The Lyon-based company plans to cater to Indian cooking needs rather than bring in products from its international portfolio. The Tefal brand is likely to be launched in India in 2016 across a host of small appliances ranging from pressure cookers to dry irons. Groupe SEB acquired Maharaja WhiteLine in 2011. It also owns a host of other brands such as Moulinex and Rowenta. Sunil Wadhwa CEO of Groupe SEB said Tefal will be made in India with products which are relevant for Indian consumers. It will bring in the RD but the pots and pans will be specifically made for India at our 18-acre plant in Baddi Himachal Pradesh. Global e-commerce major Amazon India plans a Fulfilment Centre FC spread over 280000 square feet near Hyderabad operational from next month. The FC helps Amazon to offer its Fulfilment by Amazon FBA service to thousands of small and medium businesses in the state. With this Amazon will have 11 FCs operational across nine states in the country with a storage capacity of over 2.5 million cubic feet. Amazon officials signed an agreement with the Telangana government as part of which the firm will train thousands of sellers across the state in e-commerce and take advantage of the digital economy. Since its launch in June 2013 Amazons marketplace www.amazon.in has grown to be Indias largest store with over 21 million products from a continually growing base of thousands of small and medium-sized businesses serving millions of customers across India. April 2015www.indiaincorporated.com 31 N ew Delhi based hospitality chain Lords Ho- tels and Resorts is eyeing global expansion opportunities in the Africa market. The move is part of its plans to have 49 hotels up and running in India and overseas by 2017. Lords currently has 24 operating properties out of which it owns nine. P.R. Bansal Lords companys managing director said We see Africa as the next big market. The company will soon sign a franchise-management agreement for a hotel in Nairobi in Kenya. The company is also in advanced stage of negotiations for a property in Kampala in Uganda. Apart from Africa the chain is set to add three hotels in Nepal where it already has two properties. A lot of new owners are approaching us since we opened our first hotel Mirage Lords Inn in Kathmandu Bansal said. Lords Hotels had recently signed up their second property Hilltake Lords Resort in Bhaktapur and the resort will be launched this year after refurbishments. In the domestic market the company plans to open hotels in Jodhpur Bangalore Agra and Jammu in the next nine months. Lords also has plans to plug into the Narendra Modi led governments Smart Cities programme and explore opportunities in Ajmer and Vishakhapatnam. The company operates across four brands Plaza Inn Eco Inn and Resorts. Indias Lords Hotels Group eyes Africa expansion SPECIAL REPORT Apart from Africa the chain is set to add three hotels in Nepal where it already has two properties. April 2015 INDIA GLOBAL BUSINESS32 T he big bang is missing but investors will still get a substantial bang for their buck. In keeping with its stated goal of improving the ease of doing business in India the Narendra Modi government has proposed that foreign investments of up to 500 million need not go to the Union Cab- inet for approval. If accepted this will cut out one layer of approvals and make it considerably easier for foreigners to bring in money into India. Currently proposals entailing investments of more than 200 million require Cabinet sanction. Since the Cabinet also has to decide on economic and other policies and take stock of the political situation in the country this often results in delayed clearances frustrating investors and holding up the creation of infrastructure and jobs. The limit was last raised from 100 million to 200 million in 2010. With ticket sizes rising especially given the focus on infrastructure defence and railways this will go a long way in addressing investor concerns regarding the glacial pace of bureaucratic decision making in New Delhi. The government recently raised the limit of foreign investment in defence manufacturing to 49 per cent from 26 per cent and also announced an initiative to encourage investments in railways. This is in keeping with the Modi governments strategy of tweaking the existing system to make it more responsive to the needs of a growing economy. The roadmap for us is very clear. We need a lot of investment in India and we need to ease the process of doing business in India and therefore we are slowly introducing changes in that direction Finance Minister Arun Jaitley told investors in London last week. India currently ranks a lowly 142nd out of 189 countries in the World Banks Ease of Doing Business Index. Since coming to power the Modi government has been focusing on streamlining processes and doing away with unnecessary procedure to speed up clearances and improve Indias ranking. The goal leapfrog the rankings and get into the top 50 countries on that index. It has also proposed introduction of a domestic ease of doing business ranking to encourage competition among states. Government sources expressed confidence that Indias ranking would improve substantially following these changes in next years rankings. A senior bureaucrat told India Inc that the big picture will become clear once the changes being made in procedures begin to translate into actual clearances and investments. That he added may take another year. India moves on ease of investment flow INDIA INC. PICKS We need a lot of investment in India and we need to ease the process of doing business in India. - Indian FM Arun Jaitley April 2015www.indiaincorporated.com 33 T he Tata Group has joined hands with the Uni- versity of Warwick in Britain to create a new 150-million innovation hub on its campus as the largest automotive research centre of its kind in Europe. Construction work on the National Automotive Innovation Centre NAIC at Coventry kicked off with a launch ceremony by the groups Emeritus Chairman Ratan Tata for it to be operational by 2017. Tata said This foundation today is an investment in the future which will bring academia and industry together revive the skills and capability of various industries to rebuild the prominence of the UK in the area of manufacturing. It will bring tens of thousands of jobs and as we look into the future I would say that today will be a memorable moment. The NAIC is planned as the largest automotive research centre of its kind in Europe. It is funded by Tata Motors and its UK firm Jaguar Land Rover the University of Warwick and the UK Governments Higher Education Funding Council for England HEFCE. The 33000 square meter complex will provide space for 1000 engineers designers and academics to work together from apprentices to senior managers. The new high tech research facilities at the NAIC will include a design and simulation space creating innovative automotive solutions as well as the worlds most adaptable and advanced fully immersive drive-in car simulator. JLR and Tata Motors will also use the centre to take forward autonomous driverless vehicles research through a 19-million Autodrive UK project. Tata Chairman Mistry explained This unique resource will provide state-of-the-art engineering and technology labs that will greatly enhance the ability of academia and industry to work side by side on leading edge research to deliver exciting new innovative products and meet the widely held ambition to deliver automotive technology and products that will be smarter lighter and greener. The Tata group shares these objectives to achieve greater sustainability and is delighted to support their realisation. Warwick Manufacturing Group WMG chairman Lord Kumar Bhattacharyya said The automotive industry in the UK has seen a recent resurgence but for the UK to remain internationally competitive we must create urgently a critical mass in research excellence. The National Automotive Innovation Centre NAIC is planned as the largest automotive research centre of its kind in Europe. Tata backs 1.5mn innovation centre in Europe INDIA INC. PICKS April 2015 INDIA GLOBAL BUSINESS34 NEWS IN BRIEF Cairn goes to court over India tax bill Dr Reddys in Belgian buyout plans Indias largest private-sector oil producer Cairn India Limited has moved the Delhi High Court against a 3.3-billion tax demand from Indian tax authorities related to its listing in 2007. The company a unit of London-listed Vedanta Resources Plc said it had filed a writ petition seeking quashingsetting aside of the order passed by the tax authorities. Last month Cairn India received the tax demand from Indian tax authorities for an alleged failure to deduct withholding tax on capital gains made by its former parent Cairn Energy Plc during a reorganisation ahead of its market listing. Vedanta had said it would file a notice of claim against the Indian government under the UK-India bilateral investment treaty. Indias second-largest pharmaceutical major Dr Reddys Laboratories Ltd plans to buy some established brands of Belgian drugmaker UCB in South Asia for an estimated 128.38 million. Dr Reddys said the acquisition of brands in India Nepal Sri Lanka and the Maldives would help it win a bigger foothold in the areas of respiratory dermatology and pediatrics drugs. The acquired business which generated revenues of about Rs 1.5 billion in 2014 is being sold on a slump sale basis.UCB Chief Operating Officer Mark McDade said in a statement the deal would allow the Belgian company to sharpen its focus on its neurology portfolio in India. Alok Sonig senior vice-president and India business head at Dr Reddys said The acquired UCB portfolio will accelerate Dr Reddys presence in the high-growth areas of dermatology respiratory and pediatrics with market-leading brands like Atarax Nootropil Zyrtec Xyzal and Xyzal M. We welcome UCBs employees to our growing global team. April 2015www.indiaincorporated.com 35 T he Rajya Sabha recently passed the Insurance Laws Amendment Bill 2015 into law paving the way for foreign insurers and other foreign investors to buy up to 49 stakes in Indian insurance companies. The law stipulates that majority ownership and control has to remain in Indian hands. This is the first major success for the Narendra Modi governments reformist legislative agenda. India Inc had reported earlier that with the Congress and some other opposition parties coming on board the bill was set to be passed on Thursday. It took seven years. The original bill was introduced by the Congress-led UPA government in 2008. Since then there have been several twists and turns several amendments a change of government and last minute political negotiations before the law could see the light of day. There was some drama in the House before the bill could be passed. The bloc of four communist parties which are implacably opposed to economic reforms for ideological reasons brought in some last minute amendments but these were easily defeated. Then the Trinamool Congress whose economic philosophy is not very different from that of its arch rivals the communist bloc the Samajwadi Party and the Bahujan Samaj Party walked out of the House just before the voting. With the Congress and most other smaller regional parties on board this made it easier to pass the bill. Experts said Indian insurance companies could expect inflows of about 5 billion within a year and another 5 billion over the next two to three years. This will help improve Indias insurance penetration which is abysmally low at about 3.5 per cent of GDP compared to 6 per cent in Australia and 10 per cent in Japan. Some of this money may have to come from PE funds and other investors as Indian insurance companies have made it clear that they will part with stake only at market prices which their foreign partners may not be willing to do. Government sources said norms on regulating companies with 49 per cent foreign stake would be notified shortly. Next on the governments legislative agenda are the two bills on coal mines and mines mineral development. According to a deal arrived at between the government and the Congress on Wednesday these two legislations would be vetted by a committee comprising MPs from various parties and passed by Parliament in the third week of March. But following the naming of former Prime Minister Manmohan Singh as an accused in the multi-billion dollar coal scam by a special court the Congress has told the government that it needs more time to study the two bills. India to open up insurance to foreign investors Experts said Indian insurance companies could expect inflows of about 5 billion within a year and another 5 billion over the next two to three years. SECTOR FOCUS - Insurance April 2015 INDIA GLOBAL BUSINESS36 I ndian pharmaceutical major Cipla has won a major victory against a German firm over a lung drug patent case. The Indian patent office revoked a patent granted to Boehringer Ingelheim for pulmonary disease treatment drug Spiriva following Ciplas opposition. Based on a Post Grant opposition filed by Cipla the Indian Patent Office recently revoked a patent granted to Boehringer Ingelheim for Tiotropium Bromide Monohydrate crystalline salt Cipla said in a statement. Boehringer Ingelheim BI sells Tiotropium Bromide Monohydrate under the Spiriva brand. Cipla has been marketing the generic version of Tiotropium Bromide Monohydrate under the brand name Tiova since 2003. The product is available in inhalers and rotocaps. Although Tiotropium Bromide Monohydrate is a molecule which was patented prior to January 1995 BI filed for a patent for the crystalline salt of Tiotropium Bromide Monohydrate on the grounds that it is more stable it added. Initially the Patent Office granted the patent but on our filing a post grant opposition the decision to grant the patent was reversed Cipla clarified. The move is another major development in the generics arena a market coveted by Western firms. India has a 15-billion worth pharmaceuticals market and is working on revamping its intellectual property rights IPR policy. The Indian Patents Act clearly excludes grant of patents to molecules invented before January 1995. Also under Section 3d of the Patents Act the law bars grant of patents to salts esters etc of substances invented before January 1995 unless efficacy is significantly enhanced. The order of the patent office to revoke the patent follows the judgement of the Supreme Court of India in Cipla versus Novartis case in 2013 in which the court dismissed the plea of Novartis AG for patent of its cancer drug Glivec. The Supreme Court had held that efficacy has to be proved in the context of therapeutic efficacy. Cipla scores major win in German patent case The move is another major development in the generics arena a market coveted by Western firms. India has a 15-billion worth pharmaceuticals market and is working on revamping its intellectual. SECTOR FOCUS - Pharma Initially the Patent Office granted the patent but on our filing a post grant opposition the decision to grant the patent was reversed Cipla clarified. April 2015www.indiaincorporated.com 37 INTERVIEW India has got a new spirit India Inc. Excl. Interview with Ratan Tata R atan Tata is one of Indias best known indus- trialists who during his tenure as Chairman of the Tata Group conglomerate has been the architect of some of its most high-profile acqui- sitions. His biggest bet was on British luxury car brands Jaguar Land Rover JLR which he acquired from Ford in 2008 as a loss-making enterprise to help it race ahead under the Tata banner. The Emeritus Chairman of the group may have handed over the reins of the 103-billion global giant to Cyrus Mistry pictured but his entrepreneurial fervour is far from retired. In recent months he has invested in at least five e-commerce start-ups in India CarDekho Urban Ladder Bluestone and most recently Paytm. India Inc. caught up with the doyen of Indian industry to probe into his interest in this sector his views on the Narendra Modi led governments Make In India drive and the success of JLR during his visit to the UK to lay the foundations for a new 1.5-million innovation centre in Europe. QWhat are your views on the Make In India campaign It is still very early days the sentiment is very high which is good. India has got a new spirit. I think its been a long time since the leadership in India has made such a bold statement. QWhat is the strategy behind your series of e-commerce investments India is a big country with a tremendous appetite for computer-based or Internet-based services. It is a nascent industry and I have chosen to support. April 2015 INDIA GLOBAL BUSINESS38 INTERVIEW QWhat are the key reasons behind the Tata Groups support for a new innovation hub in Europe The National Automotive Innovation Centre NAIC on the Warwick University campus was something Prof. Bhattacharya chairman of the Warwick Manufacturing Group - pictured had authored as it were. I share with him the great aspiration for the technological front in the UK. I thought there was no talent or capability in the UK until he forced me on a visit. I was wide-eyed with the talent that exists here. Ever since I have been a great supporter of bringing manufacturing back to the UK. If that had not happened I probably would not have been attracted to Jaguar Land Rover. Making an investment in the UK would have been a much more arduous decision. QHow would you rate the progress of JLR under the Tata Group I am very proud and very appreciative of all the people at JLR the leadership that Dr Ralf Speth JLR CEO - pictured has provided and the spirit of the work force who worked shoulder to shoulder to bring the two venerable brands back to their original glory. That spirit is key and there is a great sense of pride in what the company is doing. All we did was provided funds because Europe and the UK were in the throes of a recession and a downturn we had the faith to say that we could work together to rebuild the glory of the brands that we had acquired. The people who did it were the people of JLR. It proves that the capability is here to be used and to be developed. The future is quite bright. We shouldnt run before we can walk. We should grow with moderation but at the same time we shouldnt let markets go without addressing them. QWhat are the expansion plans for JLR in India We are assembling Jaguars and Range Rovers in India and as the Indian market grows JLR will do more in India. Any company will make investments where that investment is viable and the marketplace is right. Future plants will be based on the viability of the market. There are states in the US and countries in Eastern Europe providing incentives to attract investments. 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