• 'Desi BPO Guys Better than Brits'
• Rural India Spends it Big, and How
• Maruti Procurement goes Global
• Infy's Creating More Jobs in Australia
• Born in the USA, Made in India
• Reliance, Wipro in Forbes List
• 8 Indian Firms in Forbes A-List

• India Corners 16% of Global Software Pie
• Indian Jewellery goes to Bangkok
• Tata Tea Looking for Acquisitions Abroad
• Mukesh Ambani Telecom Man of the Year
• Incredible Indian Takes Off
• Tele-Density Touches 7.67% as Pvt Mobile Sector Grows
• LIC 12th Lagest Life Insurer in Asian Region

Multinationals have trimmed the fat for years by shifting low-value work to India. Now, slim Silicon Valley start-ups are leading a new outsourcing wave, moving cutting-edge product development to Bangalore and beyond. The start-ups have their top managers and sales teams in the United States, but design products in India, where high-tech engineers earn a third of their US counterparts. While the 1,800 firms in India's technology capital have focused on lower-value services such as call centres and software coding, companies are now tapping low-cost expertise in a corporate global village where location is not important. The new hybrid firms have, inevitably, spawned new consultant jargon, such as 'right-shoring', 'any-shoring' and 'smart-sourcing' - all signs that they now care more about what they do than where they do it. B V Naidu, Bangalore Director of Software Technology Parks of India, says 50 start-ups have registered in the past year, employing at least 500 people, and with plans to grow. The numbers are small for an Indian outsourcing industry that already exports $12.5 billion worth of software and back-office services, and employs 8,00,000 low-cost, English-speaking workers. But the start-up numbers are for Bangalore alone, and other cities like Hyderabad, Madras and Pune are not far behind.

Courtesy: The Times of India, September 16, 2004

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Eight Indian companies, including Reliance Industries, Bharti Tele ventures and software giants Infosys and Wipro have made it to the Forbes A-List featuring 400 most attractive public companies for investors. The others figuring in the magazine's list are Bharat Petroleum and Oil and Natual Gas Corporation (ONGC) in the energy sector while State Bank of India gets the honour in the banking sector, and ITC in consumer goods. These companies, Forbes said, "offer sustainability and prospect for growth investment". Three of the selected Indian companies have achieved a sales turnover in the region of USD 12 billion-- SBI (USD 12.1 billion) Bharat Petroleum (USD 12 billion) and Reliance (USD 11.8 billion). ONGC leads the table with USD 21.3 billion followed by Reliance (USD 14.4 billion) and Infosys (USD 8.6 billion) in terms of market capitalisation. Three big Indian companies--Indian Oil, Hindustan Petroleum and Hindustan Lever-- which featured last year have failed to find a place this time.

Courtesy: The Pioneer, September 15, 2004

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The head of Britain's National Rail Enquiries, which has shifted a sizeable chunk of its operations to India, is full of praise for Indian call centre workers and the service provided to British rail customers. National Rail Enquiries is Britain's busiest telephone number, handling 170,000 calls a day. The service is paid for by train operators at an annual cost of 40 million pounds, with each company footing the bill for its share of enquiries. Chris Scoggins, 40, a Cambridge archaeology graduate, took charge two years ago with a mission to improve a patchy service that had been fined by the rail regulator for poor performance. The move was forecast to save 25 million pounds over five years. Scoggins insisted at the time that money was not the primary motivation, and continues to hold his ground on this. He told British MPs Indian workers were often better than their British counterparts, infuriating call centre unions. "In some aspects they are better in India," Scoggins said. Are Indian call centre staff brighter than their British counterparts? "Well they have more practice at learning. I don't think they're brighter necessarily. They have more practice at studying complex information and absorbing it and remembering it and recalling it." Scoggins said he believed that staff in Bangalore were likely to cope better than their counterparts in Cardiff: "In India, they are less likely to assume they've heard you correctly and more likely just to ask again and to repeat it back to you to ensure that it's correct. UK agents tend to be more confident and more likely to think they've got the right answer when in fact, maybe they haven't all the time."

Courtesy: www.timesofindia.com, September 14, 2004

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Eight Indian firms figure in this year's Forbes A-List, featuring 400 of "the world's best big companies". Forbes says the list includes the most attractive public companies for investors. Bharti Televentures and ITC have made it to the list this year along with Reliance Industries, Infosys Technologies, Wipro, Bharat Petroleum, the Oil and Natural Gas Corporation (ONGC) and the State Bank of India (SBI) - all of which had been listed last year as well.Three big Indian companies which were featured last year have failed to find a place this time. These are: Indian Oil, Hindustan Petroleum and Hindustan Lever. The unusual methodology employed by Forbes for the selection meant that some well-known corporate giants like Wal-Mart, Microsoft, ABB and Vodafone were left out from this year's list. Several great names had to be zapped in the last stages as their scores fell just short, says Forbes' executive editor Tim W. Ferguson. Three of the chosen Indian companies have achieved a sales turnover in the region of $12 billion - the SBI ($12.1 billion), Bharat Petroleum ($12 billion) and Reliance ($11.8 billion).In terms of market capitalisation, the ONGC leads the table with $21.3 billion, followed by Reliance ($14.4 billion) and Infosys ($8.6 billion).

Courtesy: Hindustan Times, September 14, 2004

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India's share in the world market for software application development, one of the largest businesses for IT companies, stood at 16.4% in '03. However, onsite activities such as IT consulting and systems integration, which Indian firms had been trying to enter, were insignificant contributors to the business services spending and had market shares of 0.4% and 0.2% respectively, according to global research firm International Data Corporation and Smith Barney. Exposure to tech-consulting, network consulting and integration, lucrative high-margin businesses for Indian software firms, have been limited so far since they require resources with specialised skills and a high level of customer interaction. Firms have been working towards increasing this piece of business by offshoring application-related work. Infosys Technologies saw revenues from its consulting business decline to 3.4% for the quarter ended June '04 from 4.4% during the June '03 quarter. Software development and maintenance were high revenue contributors at 26% and 28.8% respectively of total revenues as of June '04. Package implementation stood next, accounting for 15% of revenues, while re-engineering and other services contributed 5.8% and 9.2% of revenues, respectively.

Courtesy: The Economic Times, September 11, 2004

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The Gem & Jewellery Export Promotion Council would represent India at a five-day gem and jewellery fair to be held in Bangkok from September 12. The main focus of the five-day show would be to create awareness about Indian gem and jewellery sector and expolore trade opportunities with Thailand in areas such as precious and semi-precious gemstones, the council said in a statement here today. The Indian gem and jewellery exports grew by 31% in the FY04 and reached the $12bn mark. "Our aim is to touch exports of $14bn this fiscal, and our participation at Bangkok show is a step in this direction," Sanjay Kothari, chairman, GJEPC, said. Apart from India, other countries that would take part in the fair are Hong Kong, Singapore, Italy, Sri Lanka, China, Switzerland and Australia.

Courtesy: The Economic Times, September 11, 2004

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Tata Tea Limited (TTL) on Wednesday said it was open to acquiring tea brands and estates jointly with its UK subsidiary Tetley to emerge as the number one tea company in the world. The company also announced a three-pronged strategy for loss-making tea estates in India. "We are number two in the world today as a tea company. We will always endeavour to seek a higher ranking," TTL chairman Ratan Tata told the 41st AGM of the company. The company, he said, was looking at launching more branded products in India and value added products for other countries to increase its market share. "We are looking at both organic and inorganic growth." To a query, he said, "We will look for acquisition of estates and gardens in India as well, but the priority will be global." Tata said the Tata Group will look at increasing stake in the company. "Already the group's holding in the company is much higher than in other companies, but we will look at increasing it further." Later, talking to newsmen TTL's vice-chairman RK Krishna Kumar said a three-pronged strategy had been evolved for loss-making tea estates. "But, if it fails, we will look at changing the model of ownership to bring in the owner-employee model that can bring down cost," he said. Krishna Kumar said if both measures failed, coming out of these estates would be examined. Asked how many loss-making gardens the company had at present, the vice-chairman said, "We have not gone into the details." Asked about the prospect of Tetley, he said the company had last year launched Tetley products in Pakistan, Russia and Bangladesh. "They will need some time to stabilise and after that we will look at other markets."

Courtesy: Hindustan Times, September 09, 2004

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Rural India's consumption patterns seem to be undergoing a rapid shift. Consumer expenditure has risen by more than 9%, or Rs 544 on a per capita basis, in two-and-a-half years. Per capita consumption expenditure for a year has increased to Rs 6,378 from its value of Rs 5,834 two years ago. Not only has the absolute level of consumption risen, the composition also seems to be changing. At the broadest level, there is an increasing move towards non-food articles, as seen from its increasing share in consumer expenditure. Non-food expenditure's share in the rural consumer's expenditure has risen from 40.6% to 45%, according to the latest (58th) NSS round data, compared to the 55th round data. On the other hand, the expenditure on food has declined from 59.4% to 55% over the same period. Thus, of the Rs 544 per capita rise in consumption expenditure, non-food articles contributed Rs 502, while the food segment contributed Rs 42. Under the non-food segment, the heads of 'fuel and light', and 'consumer durables' have shown a particular rise. 'Fuel and light' has shown an increase of 31%, while 'consumer durables' have grown by 35%. For consumer durables, this could be attributed to the low base, since it accounts for just about 3.2% share in overall consumption expenditure. But it's a significant increase for fuel and light, which had a 7.5% share in overall expenditure even earlier. At present it accounts for 9% of total expenditure. However, the head of 'miscellaneous goods and services', which includes rent and taxes paid, has shown a drastic drop in both absolute as well as percentage terms. In absolute terms, it has shown a decline of Rs 352, which amounts to a 31% decline in spend on the segment. Under the food category, there seems to be a move away from traditional consumption goods like pulses and cereals in favour of vegetables, eggs etc. This is evident from the fact that only four items in total have shown a rise in share in consumption expenditure. These are edible oil, eggs, meat and fish, vegetables and beverages. On the other hand, cereals, the biggest item of consumption in rural consumption expenditure has shown a decline in percentage share to 18% from 22% as well as absolute decline of Rs 132.

Courtesy: The Economic Times, September 08, 2004

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Mukesh Ambani, chairman and MD of Reliance Infocomm has been chosen the 'telecom man of the year 2004' by Voice and Data magazine while state-owned BSNL the top telecom service provider. Bharti Tele ventures bagged the award for best cellular service provider and BSNL for fixed line, NLD and ISP services. Ambani was chosen for his "vision and efforts which helped transform the telecom sector and the lives of million Indians by making the masses a part of India's telecom revolution," V&D said in a press release here. "The wishes from the people and industry make us strive harder in making telecom services more affordable for the masses of the country and leapfrog our country on the international IT super highway", Ambani said on being named the 'Telecom Man of the Year'. Ratan Tata was last years' Telecom Man of the Year. VSNL was number one ILD operator and HCL Comnet was numero uno VSAT and network management service provider. Top network storage company was HP India and TCS was the leading telecom software company. Other awardees include Nokia as top telecom equipment company, Ericsson top infrastructure provider, Cisco - WLAN an Enterprise Equipment company, Hughes Network -- top VSAT equipment company, LG India -- top mobile phone vendor, Tata Telecom-- top voice solutions company.

Courtesy: www.ibef.org, September 08, 2004

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The 'get-set-go' approach to travel this year, especially leisure movement, has kicked off the very best spells for Indian outbound and inbound tourism. The growth during the summer and winter holidays is estimated to be 18-20% compared to the corresponding months last year. Based on actual air ticket sales until August and booking trends for the rest of the year, outbound travel from India may touch a whopping 5.5-5.8 million in 2004 while inbound numbers may rise to 3.2-3.4 million. The charter market, monopolised by the winter season in India, is contributing significant numbers to the arrival pool, while 60-65% of the outbound movement is Australasia-bound from October up to Feb-March, say experts. Demand is also steadily picking up for relatively off-beat locations such as Egypt, Turkey, South Africa, Mauritius, Seychelles, Italy, Greece, Spain. This niche free individual traveller segment is dominated by high-end travellers who choose foreign destinations frequently if not annually. Meanwhile, the 'Incredible India' campaign has graduated to its next level reaching out to newer markets, says Anil Bhandari, managing director of Travel House and chairman, Tourism and Civil Aviation Committee, PHDCCI. Besides, the improved economic climate and the general aura of peace surrounding, helping build the India brand is what's making the country a more exciting destination than some other Asian and European ones which are being rated less attractive in the backdrop of extremist threats. Says Ankur Bhatia, head of Amadeus India, domestic air travel market grew by 25% and international movement by 32% in the first half of the year. August, otherwise perceived as a dull month, grew 12% over last year.

Courtesy: www.ibef.org, September 06, 2004

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The country's largest automaker Maruti Udyog is embarking upon a procurement programme to source components globally from the most competitive suppliers. "We are going in for world-wide procurement or WWP, which means sourcing components from the best and cheapest supplier globally," Mr Jagdish Khattar, Managing Director, Maruti Udyog Ltd, said on Thursday. He added that as tariff walls come down and automakers look to source components from the best in the world, the difference between supplying to a manufacturer in India and to a manufacturer abroad will narrow. Though not revealing which countries Maruti would look to source components from, Mr Khattar said that apart from Japan, the company already sources dyes and certain raw materials from countries such as Taiwan and Korea.

Courtesy: www.ibef.org, September 03, 2004

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Boosted by a major contribution from the private mobile telephony sector, India's tele-density touched 7.67 per cent with the addition of over 64 lakh telephones during April-July 2004 taking the total number of phones to 8.29 crore. Over 19 lakh phones were added alone during July, an official statement said on Thursday. More than 90 per cent of the additional phones during the current year are accounted for by the mobile phones. The number of mobile phones including WLL(M) as on July-end is about 3.95 crore. Private sector has played a major role by providing almost 85 per cent of the expansion during these four months. The private sector has so far provided 3.54 crore phones as on July-end contributing 43 per cent in the total phones in the country. However, in the rural areas, only Bharat Sanchar Nigam Limited has provided additional direct exchange lines and Village Public Telephonys (VPTs). As against 54,015 additional telephones provided in rural areas during April-July 2003, BSNL has provided 1.75 lakh telephones during the current year and 972 VPTs. Private Sector reportedly has not gone to the rural areas this year.

Courtesy: Hindustan Times, September 03, 2004

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The Life Insurance Corporation of India (LIC) has been ranked the 12th largest life insurance company in the Asian region outside Japan, by FinanceAsia. According to FinanceAsia, Asian life insurance companies have been able to attract immense business and are generating most revenues. Despite the competition in India, LIC has fared well, it stated. After a seven-year period of sector-wide fluctuation, 2003 has been marked by life insurers as one of the more stable years in recent times. Insolvencies leveled out and the larger insurance businesses witnessed dramatic premium growth for both domestic and foreign life insurers. "In China, life insurance penetration went from strength to strength. For the world's most populated nation, total written premiums edged close to Rmb 400 billion for the year and the sector enjoyed some much needed recapitalisation through the China Life and Ping An listings," stated FinanceAsia in a release. Overall, 2003 was a robust year for premium income across the region. The amount of money generated through gross premiums reflected the breadth and size of any organisation in the respective Asian countries.

Courtesy: www.ibef.org, September 02, 2004

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When Infosys started its Australian centre, it had decided to have an Indian majority in the staff. But the Indian IT bellwether had to rethink their strategy as the decision attracted a lot of adverse publicity. At a time when the advanced economies were crying loud against outsourcing it was a huge challenge for Infosys to set up its software development centre in Melbourne in 2002. But now the Australian arm has transformed into a key arm in the global operations of Infosys. Infy made its grand Australian debut when it bought Melbourne-based software services business Expert Information Systems (EIS) and its 330 staff for $31 million last December. Infosys appointed Gary Ebeyan, the head of EIS, as local CEO of the Australian operations. The Australian operations involve a much greater level of involvement from Australian IT workers. It has 500 permanent Australian staff plus a floating expatriate Indian workforce of 150 to 200 workers, who usually visit the Australian office as consultants for about six weeks. Ebeyan says that the merger with EIS changed the business outlook of Infosys Australia. "I had always held the view that a better view to do offshoring was to use local knowledge. If we use local employees the costs would be lower, we would be more responsive to customers and more flexible. Now it is a strategic initiative within Infosys to use this model globally. No other Indian outsourcer has employed this model yet."

Courtesy: The Economic Times, September 01, 2004

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