Indian tourism sector is on a roll, after registering a 23% jump in foreign exchange earnings for calendar year 2003. The new year also started with a bang as January-March 2004 forex earnings have gone up by 21%, compared to corresponding period last year. According to the department of tourism figures, in the first three months of 2003, the forex earning was $86,800 while this year the figure touched $1,16,847. The in-bound tourist arrivals have also increased in 2004 to 22.7% as compared to 12.4% last year. In 2003 tourist arrivals were 7,71,294 while this year till March, 94,6447 arrivals were registered. The travel and tourism sector is India's third largest foreign exchange earner. According to sources this is a substantial jump as forex earnings were stagnant in the region of Rs 14,000 crore (1999 to 2002) for the last three years. This spurt in the arrivals and forex earnings is a clear sign of boom time. And despite global recessionary trends, the industry feels that the next few months will see a healthy increase in travel. The ministry of tourism recently won five awards at PATA conference in Korea. The industry in India is increasingly being seen as having great potential and a recent industry report said within 10 years, India could become a leading destination of the world.

Courtesy: www.economictimes.com, April 30, 2004

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Riding the wave of growth fundamentals such as demographic transition, improved incentive structures, diffusion of new technologies and an improved security environment, India will be growing at the rate of above 10 per cent per annum, Finance Ministry Advisor Vijay L Kelkar said here. Observing that India is at the threshold of a golden age of growth, he said India's democratic framework is a key growth fundamental. "India has paid the 'fixed costs' of democracy in terms of the creation of institutional infrastructure, traditions and conventions. Further, India's democratic system has also internalised {what Prime Minister Atal Bihari Vajpayee calls - 'Coalition Dharma') showing that coalitions can provide stable government and push economic reforms," he said while delivering the 2004 KR Naryanan lecture at the Australian National University in Canberra on Tuesday night. "India - riding the wave of growth fundamentals such as demographic transition, human capital accumulation, improved incentives structures, diffusion of new technologies such as IT, total factor productivity accelerators through for 'network industries', and an improved security environment - will be growing at growth rates which can be above 10 per cent per annum i.e. double digit growth rates". Referring to the growth as "India: On the growth turnpike", Dr Kelkar expressed confidence that economic growth in India will considerably accelerate further in the coming decade. He said it is likely that by 2004, India will reach third place, displacing Japan giving us a global ranking of US, China, and India in that order. Observing that a remarkable feature of India's growth experience is its resilience to shocks and globalisation, he said India is widely seen as having an extremely strong position on the external sector which has been achieved through several elements like currency depreciation, export buoyancy, and policies of avoiding foreign currency debt.

Courtesy: www.economictimes.com, April 29, 2004

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Buoyed by good harvest of oilseeds crop in the '03-04 season and the forecast of a normal monsoon in the current year, domestic edible oil industry is all set to explore the Chinese market. India does not have surplus of edible oil for exports but industry reckons that if opportunity can be properly tapped the country could export substantial amount of soyameal to China. The industry is optimistic because India has sufficient quantity of soyameal after last season's crop at seven million tonnes, which has created an exportable surplus of soyameal of about 3.5m tonnes. The surplus may pile up further if the country has yet another favourable monsoon this year. In addition, the industry is also keen to export some amount of ricebran oil to that country. As there is huge information gap between India and China on trade-related matters, the SEA delegation in the first place did its bit to beef up the communication network, Mr Khandelia said. Unlike India, China, which is also deficient in edible oil production, imports oilseeds. It imports soybean from the US, Brazil and Argentina to produce soya oil and rapeseed mainly from Canada to produce rapeseed oil. Though the industry is not certain about how much soyameal had been exported from India to China in FY04, it estimates that at least 50,000 tonnes had been shipped to China in the year.

Courtesy: The Economic Times, April 29, 2004

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Credit Suisse First Boston plans to shift over 100 financial analyst and research jobs from the US East Coast to India. Nokia's setting up a CDMA research and development unit. Fortune 500 vendor, Unisys plans to invest $180-m in a software & BPO subsidiary. Logica is scouting for engineers - 400 this year and 500 next year. HSBC is set to double headcount to 1,000 at its Pune software centre. Another MNC, the $5.9-bn Unisys has chosen Bangalore for its first global development centre. By end-'04, the centre will have 300 people and 700 more will be added in '05. The initial focus will be on hiring software engineers and later, BPO agents. The centre will provide software development, maintenance, besides BPO and a technical help desk. Logica CMG's Bangalore software development centre has pleased its customers no end. The company is adding 400 engineers. A portion of a telecom product rolled out from the Bangalore centre to T-Mobile was found to be better than the previous version. This is just the beginning, with India set to become the third-largest economy in the world by '30, the queue is going to get longer with or without the Kerries.

Courtesy: The Economic Times, April 29, 2004

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Riding the wave of growth fundamentals such as demographic transition, improved incentive structures, diffusion of new technologies and an improved security environment, India will be growing at the rate of above 10 per cent per annum, finance ministry advisor Vijay L Kelkar said here. Observing that India is at the threshold of a golden age of growth, he said India's democratic framework is a key growth fundamental. "India has paid the 'fixed costs' of democracy in terms of the creation of institutional infrastructure, traditions and conventions. "Further, India's democratic system has also internalised {what Prime Minister Atal Bihari Vajpayee calls - 'Coalition Dharma ') showing that coalitions can provide stable government and push economic reforms," he said while delivering the 2004 K R Naryanan lecture at the Australian National University in Canberra on Tuesday night. "India - riding the wave of growth fundamentals such as demographic transition, human capital accumulation, improved incentives structures, diffusion of new technologies such as IT, total factor productivity accelerators through for 'network industries', and an improved security environment - will be growing at growth rates which can be above 10 per cent per annum i.e. double digit growth rates". Referring to the growth as "India: On the growth turnpike", Dr Kelkar expressed confidence that economic growth in India will considerably accelerate further in the coming decade.

Courtesy: The Times of India, April 29, 2004

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ONGC, India 's exploration and production major, is now planning to get into power generation by setting up merchant power plants close to its gas fields. The oil and gas company is planning to explore the 'gas-to-wire' or 'gas-to-power' strategy while developing its future gas fields. ONGC will be setting up power plants close to its gas fields to take advantage of the availability of fuel. However, the decision to set up a gas pipeline or a power plant will depend on the economic feasibility of the project. ONGC may even consider the possibility of allowing other power companies to develop the project or operate the plant. As of now, ONGC already has developed captive power capacity of over 1,000 MW of which only about 100 MW is fed into the grid. ONGC today awarded six of its small oil fields in Assam and Gujarat for development and production. ONGC will, however, retain full ownership of the fields and the produce and will pay the private firm a fee for putting them into production. Three fields in Gujarat - Hirapur, Khambel and West Bechraji - were awarded to Hindustan Petroleum's subsidiary Prize Petroleum and three fields in Assam - Bihubar, Laxmijan and Barsila - to Assam Company. Two fields - Kamboi and South Pathan - were awarded to GSPC and the contract for this will be signed later.

Courtesy: The Economic Times, April 29, 2004

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India is expected to maintain its strong growth in the medium term even as serious challenges face the economy, the Asian Development Bank (ADB) said on Wednesday. The Manila-based ADB, in its annual forecast of Asian economic trends, noted that the Indian economy was estimated to grow 7.4 per cent in 2003-04 and 7.6 per cent in 2004-05, propelled by the services and industry sectors and normal monsoon rains. The key farm sector was expected to grow by 3.0 per cent, services 8.0 per cent and industry 10.2 per cent in the fiscal year 2003-04, the report added. "With help from the booming service sector, the country's current high growth momentum is likely to be maintained through fiscal year 2004-2005," the ADB said in its outlook. The government had forecast the deficit would fall to 4.8 per cent of gross domestic product (GDP) in the fiscal year to March 2004 and 4.4 per cent next year, from between five to six per cent in each of the past five years.

Courtesy: The Economic Times, April 28, 2004

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The global merchant banking firm Goldman Sachs today said India has the potential to raise growth rates over the next five years from an average of 6.1 per cent to 8.1 per cent, it can match China in the quality of its infrastructure and education. Describing India as a potentially a "bigger growth story than China over the long run," it says fundamental changes in the economy and its governance support the country's ability to meet these projections. Releasing its latest report on India, Goldman Sachs says India's service led growth strategy is benefiting from domestic and global demand. Besides, globally competitive firms are emerging from the country's "historically protected private sector" while broad based reform is fostering infrastructure development and greater openness. Making a comparison of the four fast growing economies of Brazil, Russia, India and China (BRICs), it says of these four, China and India are likely to become the world's first and third largest economies respectively by roughly 2040. "One highlight of our findings was the remarkable and largely under appreciated growth potential for India," it observes while remarking that investors and corporations have focused intensively on China. Noting that economic growth in China is slated to taper off from 8 per cent annually during 2000-05 to 2.9 per cent in 2050, Goldman Sachs projects that India will sustain an over 5.2 per cent growth over the same period. The report says India's gross domestic product was slated to grow by 6.1 per cent during 2005-10, and then come down to 5.9 per cent in 2010-15. As for China, the growth is expected to decline from 7.2 per cent in 2005-10 to India's level at 5.9 per cent in 2010-15. After 2015, India will surpass China with GDP growth at 5.7 per cent during 2015-25 and then accelerating to 5.9 per cent during 2025-30 and further rising to 6.1 per cent in 2030-35. Highlighting the importance of education, Goldman Sachs says India has witnessed well-known success in tertiary education on the back of public investment in higher education. But at the broader level, encompassing primary and secondary education, the country is said to lag behind the rest of the BRICs.

Courtesy: The Hindu, April 28, 2004

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India has signed a historic international agreement for completing a 140,000 km-long Asian Highway Network which will significantly promote regional integration and cooperation. Apart from India, countries like Pakistan, China, Iran, Indonesia, Japan, Mongolia, Kazakhstan, South Korea, Turkey and Vietnam have inked the inter-governmental agreement at the ministerial segment of the 60th session of the United Nations Economic and Social Commission for Asia and the Pacific (ESCAP), which is currently meeting in Shanghai. The highway will connect capitals, major ports, commercial centres and tourist sites of Asian nations. After its completion by 2010, vehicles from Tokyo can travel directly to Istanbul and even island countries like Japan, Philippines and Sri Lanka, will be linked through ferries to mainland countries. "The signing of agreement on Asian highways is a landmark event," Commerce Secretary, Dipak Chatterjee, leading the Indian delegation to the ESCAP session, said.

Courtesy: The Economic Times, April 28, 2004

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Dabur International Limited, the 100 per cent subsidiary of India's healthcare MNC Dabur India Limited, will start its manufacturing unit and a joint venture in Pakistan during the current financial year. The Pakistan market was about 12-15 per cent of the Indian market in a very broad sense. About meeting fund requirements, CEO Arvind Kumar said: "since we are going with a joint venture it will be through Dabur India and to the local partner. It (funding) will be basically through internal accruals and any requirement of fund will be met through parent company Dabur India Limited," he said. Asked whether the company would employ local people to maintain secrecy of its formulations in Pakistan, Kumar said, "It is not that we are going to appoint only local people. We would have some people from our existing locations and some would be appointed locally." "We would like to protect our proprietary knowledge... There are ways and means to protect these knowledge and we will do everything possible," he said.

Courtesy: The Pioneer, April 27, 2004

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This should sound music to the ears of India 's top IT companies like TCS, Infosys and Wipro. India 's highly rated IT labour force, the envy of the entire world, will grow into a formidable army of two million in the next 10 years. The strength of India 's IT workforce now stands at 650,000 as compared to 6,800 in 1986. The threefold increase in availability of IT professionals will ensure that wage inflation pressures are curbed, according to a recent report from Goldman Sachs. In fact, the supply of IT professionals will outstrip demand within four years. Published earlier this month, the report estimates that there will be 48,000 surplus IT professionals in India in 2008. As of now, nearly one-third of the world's software engineers are from India. While the projected growth in the availability of skilled professionals will help the Indian IT industry maintain its edge over rivals, the English factor is also working to the advantage of India. The Sachs report says that 7% of India 's population can speak English, making it the second largest pool of English speakers after the US. On the flip side, the report has said that India 's software and services exports account for only 2% of worldwide IT spending. That makes the outcry in the US against outsourcing a good example of much ado about nothing.

Courtesy: The Economic Times, April 27, 2004

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Research and Development outsourcing market for IT in India is estimated to grow to $9.1 billion by 2010 from $1.3 billion in 2003, according to research agency Frost & Sullivan. The R&D outsourcing market for IT in India is forecasted to grow from the present size of $1.3 billion in 2003 to $9.1 billion in 2010 at a compounded annual growth rate (CAGR) of 32.05 per cent, Frost & Sullivan, which undertook the study for Department of IT, said in its report. The R&D outsourcing market for telecom in India is slated to grow from $0.7 billion in 2003 to $4.1 billion in 2010 at a CAGR of 28.73 per cent, it said. Listing out opportunity areas in IT, the report said computing architecture, encryption and network security, human computer interface, programming language and software engineering were the focus segments. It said telecom would see areas like business support system, new version of IP (IPv6), video servers and wireless sensors as growing opportunities. With regard to key technologies and forecasts, it said semiconductors and nano-technologies were to be watched out for.

Courtesy: The Economic Times, April 27, 2004

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Aventis SA and Sanofi-Synthelabo SA have decided to combine, creating the world's third-largest drugmaker after Sanofi raised its bid 15 per cent to 53.5 billion euros ($63 billion). Sanofi would gain research expertise and a US sales force of 4,400 by acquiring its bigger French competitor. The agreement, outlined at a Paris press conference, came after Switzerland's Novartis AG withdrew from talks with Aventis, dissuaded by French Prime Minister Jean-Pierre Raffarin's opposition to a foreign buyer. Sanofi will exchange five of its own shares plus 120 euros in cash for every six Aventis shares, 51 euros in cash more than its original hostile offer made on January 26. The new company will rank behind Pfizer Inc. of the US, and GlaxoSmithKline Plc of the UK in global pharmaceutical sales. Aventis, which at first shied away from Sanofi because of the Plavix patent risk, faces patent challenges for two of its own top sellers, the Allegra allergy pill and the Lovenox anti-clot treatment. Sanofi itself was about to become vulnerable to a take-over, with the expiration of an agreement between its two biggest shareholders, Total SA and L'Oreal SA, in December, that required each to maintain a stake of at least 20 per cent in the drug company. Following Aventis' decision to engage in discussions with Sanofi on the strong intervention of the French Government, Novartis decided not to proceed, the Basel, Switzerland-based company said in an e-mail statement.

Courtesy: The Asian Age, April 27, 2004

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A Confederation of Indian Industry (CII) survey has shown that auto component SMEs (small and medium enterprises) have come of age and become globally competitive. The report reveals that Indian SMEs manufacturing auto components are now well equipped to produce components as per international standards. The survey was done by the CII in association with the Indian Institute of Foreign Trade, Department of Industrial and Scientific Research, and Fortune Institute of International Business, to understand the financing patters and requirements, including the financing of technology for SMEs. The survey found that SMEs have now started taking strategic positions in the international markets, at the original equipment manufacturers (OEMs) level and the replacement supply area. Exports were mostly to the Middle-East, Europe and the U.S. It indicated that R&D activities in most cases were driven by OEMs. Of the 196 SMEs surveyed more than 75 per cent of respondents represented business scale of less than Rs. 10 crore turnover.

Courtesy: The Hindu, April 27, 2004

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After the morale boosting bonus issues, the pharmaceutical sector has more doses of good news to offer. In the last two months the industry has been consistently topping 10% in terms of value growth, after a gap of 14 months. According to a retail audit by AC Nielson ORG, during March '04, the pharma sector grew 12.2% year-on-year. The industry had grown 12.8% in the previous month as well, the report said. With two consecutive months of 12%-plus growth, it appears that the industry has achieved some kind of a stability, and the blues of the last year is a thing of the past. Industry analysts prescribe a positive outlook for the near future. The annual growth has been continuously rising due to better performance over the last two months. The growth should top the 10% mark in next 2-3 months also, say analysts. All large Indian companies performed exceptionally well in March '04, starting with Aristo Pharma, which recorded a growth of 21.9%. The other companies in the top ten, which recorded growth of 10% or more were Sun Pharma, Cipla and Zydus Cadila - Sun Pharma recorded 17.9% growth, Cipla grew by 11.9% and Zydus Cadila posted a 10.8% growth.

Courtesy: The Economic Times, April 26, 2004

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India has taken up cudgels on behalf of the Third World to make the rich nations cry a halt to protectionism that has now escalated to business process outsourcing, an area in which developing countries hold a clear advantage. At the IMF-World Bank spring meetings, which began here on Saturday, India is also waging a battle for a major step-up in aid flows to enable the poorer countries make meaningful progress on their millennium development goals. Setting out the Indian position, Reserve Bank of India Governor Y.V. Reddy criticised the rich nations for vigorously pursuing protectionism at a time when developing countries have begun to get out of their protectionist mindsets and view trade as a win-win proposition for all. The Indian line against protectionism found endorsement in the World Bank's Global Monitoring Report, presented to delegates from the 184 member-countries. It makes a strong pitch for liberalisation of trade in services as part of moves for greater market access to the exports of developing countries.

Courtesy: The Hindustan Times, April 26, 2004

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The Rs 24,000 crore domestic auto component industry has become globally competitive but the SSI and FDI policies for the sector should be reviewed to maintain its competitive edge, CII has said. Many companies were directly or indirectly exporting components worth Rs 50-100 million to countries in west Asia, Europe and the US, CII said, quoting a survey. Besides supplying to the Indian market, small and medium enterprises in the sector had started taking strategic positions in the international market as both original equipment manufacturers (OEMs) and replacement suppliers, it said. "Indian small and medium enterprises (SMEs) manufacturing auto-components are well-equipped to produce components as per the international standards... However, more serious efforts are needed to innovate and develop new strategies including products and technologies," CII said. The R&D activities in this sector are driven by OEMs, which is between Rs 5-30 million.

Courtesy: The Hindustan Times, April 26, 2004

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India's largest dairy brand Amul would soon be seen on the shelves of leading international stores like Wal-Mart and Mustafa in Singapore after its successful foray into the United Arab Emirates (UAE). "We are expanding outside to test our quality and face competition, while going ahead with plans to spread across the country to pre-empt any foreign competition," said managing director of Gujarat Cooperative Milk Marketing Federation (GCMMF), India's largest dairy cooperative, BM Vyas. GCMMF's Amul has been recording 20 per cent annual growth in overseas markets largely through supermarkets and chain store sales. Amul is also being marketed in Hong Kong. As growth through bulk exports is variable, GCMMF has opted for sustained growth through retail sales that ensure brand recall and customer loyalty. Of the Rs 29 billion turnover in 2003-04, up from Rs 24.75 billion in the previous fiscal, GCMMF's overseas sales contributed Rs 500 million. The figures could have been much higher but for shortage of milk supplies early last year leading to GCMMF dropping an export order to Iraq. Through tie-ups with similar dairy cooperatives in other states, GCMMF is now trying to not only increase its milk procurement but also enhance its production and market reach to new towns. Amul milk is currently being supplied in 10 cities and towns outside Gujarat, including in Rajasthan and Maharashtra.

Courtesy: The Hindustan Times, April 26, 2004

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Unprecedented growth in India and China has made the developed world bullish about Asia. So how is Asia looking at its new-found glory? Asian leaders met at Boao in Hainan , China , to chalk out a strategy that will provide a win-win solution to Asian countries. On day one of the third meeting of the Boao Forum in Hainan , the Federation of Indian Chamber of Commerce and Industry (Ficci) showcased India as the "land of opportunity". Addressing the official opening session of the conference, Ficci president YK Modi said, "Today India is going through an intensely exciting phase of change, innovation, rediscovery of its potential and remaking of its future. The old landscape is vanishing; new landmarks are emerging which are visible at a distance." The forum and India 's pre-eminent role in it seems to have further fuelled the feel-good factor among the corporate representatives. Amit Khanna of Reliance Entertainment said, "There is a palpable upsurge in the interest that India has generated. India 's presence at the conference though numerically small, is significant."

Courtesy: The Economic Times, April 26, 2004

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Exports of Special Economic Zones (SEZs) on Friday reported a growth of 46% to $3,038 million in 2003-04 as against $2,079 million in the previous fiscal. In rupee terms, exports grew by 39% to Rs 14,003.89 crore in the year under review as compared to Rs 10,056,62 crore in 2002-03, an official release said here. The statement attributed the growth to a series of initiatives taken by Department of Commerce including setting up of offshore banking units, operation and maintenance of SEZs and SEZs units, sales from domestic tariff area to SEZs and SEZ units to be treated as physical exports among others.

Courtesy: The Economic Times, April 24, 2004

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Petro major IOC is taking an unusual route to vertical integration: acquiring a foreign exploration & production (E&P) major. IOC plans to buy majority stake in a company with a market cap of $0.5-2bn. Possible targets include Cairn Energy, Premier Oil, Tulow Oil and Nikko Resources. This proposal will be taken up at the company's next board meeting, slated for the last week of April. The idea is to look at medium-size exploration companies operating in and around India. "There are other companies in Australia and Africa as well," sources said. The acquisition of an E&P company will help IOC tap oil from other regions as well. Given that IOC commands around 60% of the retail market and owns almost 50% of the country's total refining capacity of 115m tonnes, it is imperative for IOC to have some equity in oil.

Courtesy: The Economic Times, April 24, 2004

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India, cashing in on high global prices and a bumper domestic crop, has sold 50,000 tonne of corn to Malaysia at $182 a tonne for May shipment, a leading trader said on Friday. It is the first time in recent years that India has turned to corn exports following a firming of international prices and a lack of sales from China, which has fed the Southeast Asian market until now. India has already sold 300,000 tonne of corn and exports are likely to cross 500,000 tonne by June. The country mainly sells the grain to Malaysia, Indonesia, South Korea, Vietnam and and the Philippines. Some sales in smaller quantities have been reported to the Middle East. The Asian feed market has been scouting for alternatives as export offers of Chinese corn have dwindled due to a drop in local stocks. "This year many Asian buyers are keen on us because freight rates have really shot up and it is expensive to buy from Argentina and United States," he said. Dealers said freight rates of bulk cargo from India to destinations in Southeast Asia have surged to $35-40 a tonne, up from $20-25 a tonne a year ago. But freight rates from the United States to Southeast Asia were touching $80-100 a tonne, making Indian corn purchases economical.

Courtesy: Hindustan Times, April 24, 2004

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Interest in India among US investors is rising as reflected in the significant inflows over the past few weeks. US-based agency Emerging Portfolio Fund Research (EPFR) estimates that open-ended India country fund inflows topped $1bn in '04 so far. This is believed to be the best quarterly inflow into these funds. There is a rise in allocation from global funds, Global Emerging Market, and Asia funds. For example, the $1bn Fidelity Worldwide Fund has a 1.2% weightage for India. "Among funds that we track, managers have been net buyers of just over $2bn of Indian equities over the past 12 months, the third strongest among emerging markets after Taiwan ($4bn) and China/Hong Kong ($3.6bn)," he added. Going forward, it is believed that a slowdown in China may also add to inflows into India. "A decline in demand from China will of course have a negative impact on Asian markets. The flows into emerging markets may become more selective. Much of the inflows into Asia ex-Japan have gone into China and India funds this year," Mr Durham said. "India could be a bigger growth story than China over the long run. Fundamental changes in the economy support India's ability to meet our BRICs projections. India's services-led growth strategy, a departure from Asia's traditional manufacturing-led model for growth, is benefiting from both domestic and global demand. Globally competitive firms are emerging from the country's historically protected private sector and broad-based reform is fostering infrastructure development and greater openness," Ms Purushothaman says in the latest report.

Courtesy: The Economic Times, April 23, 2004

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For Singapore restaurateur Surya Jhunjhnuwala, investing in India makes sound business sense, a view sharply at odds with those of his uncles who ran the family business in 1980s. Jhunjhnuwala and his younger brother run a hotels-and-real-estate empire that spans Singapore, Hong Kong and Australia, with assets of more than $100 million. Overseas Indians generate about $100 billion annually and pump back about $30 billion each year. The boom in the country is creating the need for a range of advisory services, says Dutch group ABN AMRO. "India is not only an emotional cord now, it's a compelling economic cord for NRIs," said Raj Sriram, head of South Asian business for British private bank Coutts in the Asia-Pacific region. Citigroup says there are 150,000 Indian millionaires overseas with total investible surplus of $360 billion. The 15 million NRIs form the third largest expatriate segment worldwide, after the Chinese and the Irish, it says. Last month in Singapore, ABN AMRO launched single-window wealth management services for Indians who have $100,000 in investible assets.

Courtesy: The Times of India, April 22, 2004

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India has emerged as the world's largest producer of mangoes and bananas in 2002-03. "India produced 12,000,000 tonnes of mangoes as against the world's total production of 23,455,000 tonnes -- 51.1 per cent," S Dave, director of agricultural and processed food products export development authority said here last evening. Making a presentation on "India's export of table grapes to European Union" to leading British importers at the India House, Dave said the country also topped in the production of bananas with 10,200,000 tonnes as against world production of 58,618,000 tonnes, constituting 17.4 per cent of the whole. India had taken adequate measures to ensure prescribed pesticide residual limits in grapes produced by it, following an alert issued by the European Community last year, he said. India came second as regards production of all fruits, next only to Brazil. In the category of major vegetables, India topped in the production of cauliflower in the world with 4,800,000 tonnes as against world's production of 12,725,000 tonnes in 2002-03, he said.

Courtesy: The Economic Times, April 22, 2004

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Indian manufacturers are becoming more competitive and confident. For the first time, incremental capital output ratio has declined below the level of China. This indicates that Indian manufacturing has become more productive. A large number of manufacturers are now expanding capacities. A recent CII survey showed that 65% of SMEs found their exports going up and close to 50% said they are substantially expanding capacity. Similarly, a CII-McKinsey study revealed that incremental capital output ratio which was 4 earlier has come down to less than 3, whereas for China, it has touched 4.2 from 3 earlier. Mr Santhanam said St Gobain India was the third lowest-cost manufacturer among the 29 plants it has across the world and it was achieved despite the fact that glass manufacturing was infrastructure and capital-intensive.

Courtesy: The Economic Times, April 22, 2004

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A special study has busted the theory of huge job losses in the US due to outsourcing to countries like India. Here are the facts presented by the Chamber of Commerce of the United States: The American telemarketing industry employs 6 million people while the Indian industry employs barely 65,000; US employs 10.2 million Americans in technology jobs while India employs 650,000, 6 per cent of the US industry. A recent report from McKinsey Global Institute estimated every dollar of costs the US moves offshore brings America a net benefit of $1.12 to $1.14 and projects net savings of $390 billion by 2010 to the American economy due to sourcing. McKinsey reasons that as low value-added jobs go abroad, labour and investment can switch jobs that generate more economic value. US companies make abroad go to the 'high wage' economies of the EU and Japan, indicating that wage differentials are not the primary consideration in most investment decisions," states the study. Foreign companies have created millions of jobs in the US. Nearly 60,000 American jobs have been created by 170 Indian information technology companies.

Courtesy: The Indian Express, April 22, 2004

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Who cares if some low-end jobs are getting outsourced to India? It is infinitely more serious when entrepreneurs and experienced workers from India who create companies (and the wealth) in America return to their own countries, says Greg Gretsch, managing director of Sigma Partners On a recent visit to India, Gretsch was floored by the sheer extent of Indian talent. And he was impressed not only by the Indian workers -- smart, well educated, and compared to engineers in Silicon Valley, ready to work for peanuts. He was talking about the best brains that India had exported to America who had gone on to add value to that nation. Silicon Valley, the hub that was created by brain drain from different parts of the world, is now suffering a reverse brain drain that is going to get worse. So long, talented people used to come to America, first to study and then to work. Often they started their own company, building up on critical experience.

Courtesy: The Economic Times, April 22, 2004

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Tax collections grew by 18% to Rs 2,52,162 crore, crossing the Budget target and pushing up the tax-GDP ratio to 9.1%, during '03-04. While direct tax collections surged by 27% and for the first time crossed Rs 1,00,000 crore, indirect tax mop up was higher by 12.3% at Rs 1,47,48 crore in '03-04, according to provisional figures till April 17. The revenue collection has crossed the Budget target after a gap of four years. The Centre had, earlier, collected more revenue than it targeted in 1994-95, 1995-96 and 1999-'00. This is also for the first time in recent years that the Centre is slated to attain the estimated figure, which was revised upwards.

Courtesy: The Economic Times, April 21, 2004

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UK-based Cairn Energy has announced its third major oil strike in Rajasthan from the same block. The latest discovery could potentially contain 400 million barrels of crude. The total quantity of crude oil in Cairn's three discoveries in the past four months could be as high as 2 billion barrels. The crude from the latest strike is of higher density than that of earlier finds. The three discoveries are in the block that Cairn purchased from Shell two years ago.

Courtesy: The Economic Times, April 21, 2004

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For Singapore restaurateur Surya Jhunjhnuwala, investing in India makes sound business sense, a view sharply at odds with those of his uncles who ran the family business in the 1980s. Jhunjhnuwala and his younger brother run a hotels and real estate empire that spans Singapore, Hong Kong and Australia with assets of more than $100 million. Bankers say that's a route affluent people of Indian origin are increasingly taking as they tap into one of the fastest growing economies in the world. Overseas Indians generate about $100 billion annually and pump back about $30 billion each year into India, where the boom is creating a need for a range of advisory services, says Dutch group ABN AMRO. "India is not only an emotional chord now, it's a compelling economic chord for non-residents," said Raj Sriram, head of South Asian business for British private bank Coutts in the Asia-Pacific region. The Indian economy is on a high, estimated to have grown by 8.1 percent in the year to March 2004, boosted by a rebound in the farm sector and solid growth in manufacturing and services. "There's definite improvement in the general sentiments of everybody in India," he said. "For the foreseeable future, we see India to be continuing on the same path of expansion."

Courtesy: The Economic Times, April 21, 2004

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ICICI Bank is to make the kingdom of Bahrain the hub of its operations in the six-nation Gulf Cooperation Council Grouping. The bank has been granted a licence by the Bahrain Monetary Agency (BMA) to open an offshore banking unit (OBU) as well as to provide non-resident Indian (NRI) banking services. ICICI has just started operations in the Bahrain capital of Manama with treasury-related activities, The Gulf Daily News quoted the bank's chief Bahrain representative Ajay Sharma as saying. Besides securitisation activities, the bank would provide its expertise to banks in the GCC countries. "Some leading banks in Bahrain, Kuwait and Saudi Arabia have already shown interest," the chief Bahrain representative said.

Courtesy: The Pioneer, April 20, 2004

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India 's robust economic growth was expected to push up growth in South Asia to 7.2 per cent in 2004, but high fiscal deficit and infrastructure bottleneck was coming in the way of sustaining such high growth, a World Bank report said on Monday. "Sustaining such high level of growth in future is possible. World Bank, however, said "continued reforms in India - including tax cuts early in 2004 and capital account liberalisation - will contribute to future growth." Considering the high GDP growth of India in 2004, the report forecast that economic growth in South Asia was expected to be 7.2 per cent in 2004, boosted by IT exports from India and the growing practice of outsourcing from OECD economies. The South Asia GDP rise in 2003 was 6.5 per cent, a sharp pick-up from the 4.3 per cent registered in 2002, and is expected to touch 7.2 per cent in 2004, it said. India joined the top five developing country recipients of foreign direct investment at $4.1 billion in 2003. In India, stocks surged and reached record highs towards the end of the year. India has continued to modernise its stock exchanges and introduced new instruments for stock trading. It is, for example, one of the few emerging markets that have exchange-traded funds.

Courtesy: The Times of India, April 20, 2004

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India has been emerging as a potential outsourcing hub for multinational pharmaceutical companies. The country's highly skilled chemists, microbiologists and medical professionals have now started to make a mark globally. According to industry sources, multinational pharma firms are scouting India for suppliers of quality ingredients, clinical development service providers and entities who undertake complicated chemical synthesis work for early drug development. They are also looking for new treatments that may emerge from India's own drug discovery efforts. Many big Indian companies have entered the contract manufacturing field. Ranbaxy-Eli Lilly and Lupin-Cynamid were the first major contract manufacturing agreements entered. Nicholas Piramal, too, has taken aggressive steps for becoming an outsourcing base. Wockhardt and Dr Reddy's have also set up plants, which could be used as contract-manufacturing facilities. Dr V.V.L.N. Sastry, country head, Firstcall India Equity Advisors, said, "With product patents due to be introduced in India from 2005, Indian contract manufacturing companies are likely to bag contracts for the production of patented drugs."

Courtesy: The Asian Age, April 20, 2004

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India is making efforts to identify storage facilities for tea in Dubai, which could be a regional hub for re-export of the commodity to the CIS states and Europe. "We are trying to identify storage facilities for tea in Dubai which could be a regional hub for re-export to the CIS states and to Europe," chairman of the Tea Board, NK Das has said. Indian tea production was looking up and global branding and marketing was necessary to boost exports and to reduce dependence on the domestic market, he said. India would also conclude a Preferential Trade Agreement with Egypt after which it would be easier to boost tea exports. Tea exports in January-February rose more than 22% to 24.9m kg year-on-year on the back of rising sales to Pakistan and a greater focus on West Asia. Prospects were bright for export of tea to Pakistan, the world's third largest buyer of tea, as exports to that country in the first three months of this year doubled to two million kg over the same period last year, he claimed.

Courtesy: The Economic Times, April 19, 2004

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Major manufacturers in heavy engineering, auto and aero industries are reconciled to redoing many existing designs, for up to six weeks in a year, only because current indexing and retrieval systems depend on textual descriptions of drawings and do a poor job of recognising shapes. Looking for the proverbial needle in a digital haystack just became easier: A project at Purdue University, Indiana (U.S.) led by Indian mechanical and computer engineers, has created the world's first shape-based 3-dimensional parts search engine. A paper detailing the "3-D Engineering Shape Search System" ( 3D-ESSS) was presented earlier this month, at the 20th International Conference on Data Engineering at Boston, Massachusetts, jointly by project head Karthik Ramani, Professor in Mechanical Engineering and Director of the Purdue Research and Education Centre for Information Systems in Engineering (PRECISE), his doctoral student, Kuiyang Lou, and Sunil Prabhakar, who is Assistant Professor of Computer Science at the same university. The computational work was headed by Dr. Prabhakar, a B .Tech ( 1990) from IIT Delhi and Ph.D from the University of California at Santa Barbara. Other members of Dr. Ramani's mechanical engineering team include Nataraj Iyer, Subramaniam Jayanti, Yagnanarayanan Kalyanaraaman, Noel Titus and Min Liu.

Courtesy: The Hindu, April 19, 2004

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Autoville is in overdrive and its profitability is boosting the tax kitty of the government. The total auto kitty grew nearly 56% from Rs 751.4 crore in '02-03 to Rs 1,169.69 crore in 03-04 with as many as seven automobile companies figuring among the top 100 advance tax payers in fiscal 03-04. According to figures culled from the revenue department, the auto list includes Hero Honda, Bajaj Auto, Maruti, Hyundai, Mahindra & Mahindra, TVS and Ashok Leyland. Top tax payer Hero Honda retained its position in the auto pecking order with a Rs 332.15 crore payout in 03-04, up 12% over 02-03's Rs 297.14 crore. Arch rival and fellow bike biggie Bajaj Auto too retained its second rank with a Rs 273.5 crore payout, up 6% over 02-03's Rs 258 crore in advance taxes. Truck and bus maker Ashok Leyland, whose Rs 47.25 crore made it the fifth highest advance tax payer in the auto industry in 02-03, has slipped to the bottom of the list in 03-04 despite a 6% increase in payout to Rs 50.26 crore. Most companies like Hyundai, which saw its tax payout jump 119% from Rs 86 crore in 02-03 to Rs 188.11 crore in 03-04, reaped the benefit of increased sales all through 03-04.

Courtesy: The Economic Times, April 19, 2004

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Northern Coalfields Ltd, Singrauli, has created a new record by exceeding the targets set for the year 2003-04. The company produced 47,033 million tonnes of coal during the year 2003-04 against the target of 46.50 million tonnes.

Courtesy: The Pioneer, April 19, 2004

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US telecom giant AT&T is looking at acquiring Indian call centres in a bid to reduce cost. The US company has been outsourcing to Indian business process outsourcing (BPO) and call centre companies for some time, but is now looking at a captive unit in India. AT&T is looking at transferring its customer support, collections and help desk functions to India. The company is looking at controlling its costs in order to improve its financial performance. AT&T outsources some of its collections and recovery business to Delhi based call centre company Global Vantedge. The firm also outsources work to e-Funds' Indian unit. The big call centre companies in the world are aggressively recruiting in India, putting pressure on salary and trained manpower for the Indian call centres. Another factor for Indian call centres looking to sell out is the acquisition by majors like Wipro and IBM of large Indian call centre firms like Spectramind and Daksh. Recently, IBM signed a definitive agreement to acquire venture funded Indian call centre company Daksh. This was followed by Citigroup moving to acquire control of its publicly listed call centre company e-Serve International. The decision by Daksh's founders to sell their stake to IBM has prompted several other entrepreneurs to look at the same option. The valuation by IBM has also enthused entrepreneurs and venture funds to look at a quick cash out.

Courtesy: The Economic Times, April 19, 2004

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Tata Steel is mulling to establish a multi-locational global presence with a capacity of 4-5 million tonne and focus on the auto and construction sectors. The company officials have already visited China, Ukraine and Singapore to evaluate possibilities of establishing a global presence there.

Courtesy: The Pioneer, April 19, 2004

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Aiming to achieve $20bn exports by '10 from export oriented units and special economic zones, the apex Export Promotion Council has asked the government to discontinue the sunset clause of '10, make available pre-shipment credit in forex, and control the rupee's appreciation against the dollar. "No new EOUs will come up because of the sunset clause of '10, as the period of six years is very short for setting up units, starting operations and then recovering your investments," Sharad Jaipuria, the newly-elected chairman of EPC for EOUs and SEZ units told reporters. Mr Jaipuria also sought income tax exemption for domestic tariff area units converting to EOUs, as also for trading activity in SEZs.

Courtesy: The Economic Times, April 18, 2004

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Powered by a 66% increase in electronics hardware exports, which touched Rs 904 crore in December '03 alone, India 's exports in that segment are poised to hit a record figure of Rs 6,800 crore in '03-04. Electronics hardware during April-December '03 touched Rs 5,642 crore, exceeding the total exports recorded in '02-03 of Rs 5,600 crore. Assuming the same pattern of growth this year also, it is expected that the total annualised exports of electronics hardware will be somewhere to the tune of Rs 6,800 crore, DK Sareen, ED, ESC, said. The growth in electronics hardware exports during April-December '03 was up 26% at Rs 5,642 crore against Rs 4,455 crore in the same period of the previous year. In December '02, India 's exports of electronics hardware was worth Rs 542 crore. For the whole of '02-03, electronics exports were Rs 5,600 crore, which indicates that electronics exports to the extent of Rs 1,186 crore took place in the January-March '03 quarter. It also gives rise to the hope that electronics hardware can become a major exporting item.

Courtesy: The Economic Times, April 18, 2004

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Indian exports shrugged off the impact of a rising rupee and crossed the 12 per cent annual growth target to rise to $61.84 billion in the fiscal year ended March 2004. Government data released on Saturday showed exports in 2003-04 were 17.26 per cent higher at $61.84 billion from $52.74 billion logged in the previous year, thanks to a global economic recovery and large orders from its key market, the United States. The Government had set a modest 12 per cent growth target for 2003-04 keeping in view a sluggish global economy and the rising rupee against the US dollar. The rupee has gained about four per cent against the dollar since January on robust foreign investments in one of the world's fastest growing economies. Analysts say it is overvalued by nearly four per cent on a real effective exchange rate.

Rupee Rise

The rupee ended Friday at 43.8850/8950 a dollar, bouncing up from a session low of 43.9950 and Thursday's close of 43.9800/9900. Reflecting strong economic growth, the trade deficit in 2003-04 nearly doubled to $13.37 billion from $7.45 billion in the year-ago period. The Indian economy, Asia's third-largest, is expected to grow more than eight per cent in the year ended March 2004 on the back of the best monsoon rains in a decade, placing it in the ranks of the world's fastest growing economies.

Courtesy: Hindustan Times, April 17, 2004

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India is definitely shining as far as the passenger car industry is concerned. Car sales have crossed the one million sales mark in the 2003-04 fiscal. And the outlook for the current fiscal is even brighter. "Higher all round economy growth, excise duty reductions, brisk infrastructural development and other reforms have energised the auto industry with the passenger vehicle sales in India and overseas crossing the 1 million mark in 2003-04. The auto manufacturers now target at achieving 1 million domestic sales alone in this fiscal year," said Jagdish Khattar, President, Society of Indian Automobile Manufacturers (SIAM). And this momentum will keep up in the next few years. SIAM estimates that passenger vehicle, two-wheelers, three-wheelers and commercial vehicle sales would grow at nearly 10-15 per cent in 2004-05 (including exports). According to data released by SIAM, passenger vehicle sales grew 32.23 per cent at 10.3 lakh (including exports) in FY-04 against 7.79 lakh in 2002-03. Domestic sales grew 27.37 per cent at 9 lakh units last year against 7.07 lakh in the previous year. Commercial vehicle sales (domestic and exports) rose 36.78 per cent at 2.77 lakh against 2.02 lakh in FY-03. Domestic CV sales surged 36.53 per cent at 2.6 lakh units against 1.90 lakh units in the previous year. While overall three wheeler sales grew 22.53 per cent at 3.36 lakh units, two wheeler sales rose 12.78 per cent at 5.62 lakh units.

Courtesy: The Pioneer, April 17, 2004

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NRI steel tycoon Lakshmi N. Mittal continued his buying spree with a new acquisition in Bosnia-Herzegovina. The LNM Group, the world's second largest steel producer, clinched a joint venture agreement with RZR Ljubija for its participation in the mining and development of the Ljubija iron ore mines in the region. The deal marks an important step in the group's strategy to vertically integrate in the face of rising cost of raw materials under pressure from the Chinese market. The mines, which have an annual capacity of approximately 1.5 million tonnes and reserves estimated to last 35 years, have been idle since the Yugoslavian civil war and the subsequent collapse of the region's steel industry. As part of the agreement, the LNM Group will make significant investments in order to re-start the mines and to develop them into a stable and competitive supplier of iron ore to customers in the region, including the group's own plants.

Courtesy: The Asian Age, April 17, 2004

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It rained milestones at Wipro on Friday. At the corporation level, it crossed the billion-dollar mark comfortably with total revenues of Rs 5,881-crore ($1.35 billion). Importantly, Wipro Technologies, its global IT services arm, touched the billion-dollar mark too. And, the crowning glory was that Wipro's combined IT services and products business (global, domestic and Apac) with revenues of $1.2 billion, wrested back from Infosys Technologies ($1.06 billion), the 'largest listed Indian IT company' tag, which it had lost a couple of years ago. Wipro has celebrated these landmarks with a 2:1 bonus issue of shares and a special one time dividend of Rs 25 per share in addition to the regular dividend of Rs 4 per share. By introducing a restricted stock award scheme for employees, which is tax friendly, it, on Friday, pioneered an alternative for the employee stock option plan (esop) which have gone out of favour. At Friday's closing prices, Wipro's market capitalisation at Rs 37,812 crore is higher than Infosys' Rs 35,936 crore. Wipro's good results have come mainly on the back of a great year for its all important Wipro Technologies business. Wipro Technologies had revenues of Rs 1,018 crore in the second quarter (Q2) ended on September 30, 2003. This rose to Rs 1,147 crore in Q3, finally touching Rs 1,255 crore in the fourth quarter (Q4) ended March 31, 2004. Wipro Technologies revenue guidance for the first quarter (Q1) ending June 30, 2004 is pegged at $292 million against $276 million in Q4, a rise of six per cent.

Courtesy: The Economic Times, April 17, 2004

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Close on the heels of its billion-dollar achievement, Infosys is now aiming to go the multinational way - using its global delivery model in high-value services like consulting and systems integration and step up hiring from other countries. Currently the company has only 650 employees of non-Indian origin. Infosys also plans to ramp up its recently-launched US consulting subsidiary to hire 500 people in three years. Infosys plans to invest $20 million in its consulting arm in the US over a period of time. Nilekani said the consulting subsidiary would start with a workforce of 75, which would then increase to 500 professionals in the next three years. The company also plans to invest $5 million in its Chinese subsidiary, which has till now incurred a loss of $1.3 million. A big chunk of its investments this year will go into enhancing banking product. Infosys has recently hired four experts in consulting business from rival firms like Deloitte Consulting, EDS and Cap Gemini Ernst & Young to head the business and compete with the top IT consulting firms like EDS, Accenture and Deloitte Consulting.

Courtesy: The Economic Times, April 16, 2004

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Riding on the back of diamonds, India's gems and Jewellery exports have risen 31% (in dollar terms) in the last year. Diamonds alone have risen almost 22% in 2003-04, according to the Gems and Jewellery Export Promotion Council. But coloured gemstones are not doing so well, with a 7% decline (in dollar terms) in exports. To hit the magic $16-billion mark, the industry has now appointed consultants KPMG to chart out the way forward. "Major revamping, formation of various sector specific divisions and extensive marketing plans are on the anvil and will soon take shape. All the initiatives will be time-bound and the strategy for it will be ready by the middle of next quarter,'' said Sanjay Kothari, Chairman of the GJEPC at a press conference here today.

Courtesy: The Economic Times, April 16, 2004

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