• For FIIs, India's the Most Favoured Emerging Nation in Asia after Korea
• When it Comes to IT, India Rules
• Diamands are Forever
• Export of Spices, Herbs may Touch $1,500 Million
• No More of China, Invest in India
• India Emerges as Biggest Hub for Almond Trade

• Indian Product in Great Demand in Trinidad
• GDP to Grow at 6-6.5 pc, says RBI
• India Emerging Hub for Product Development
• Inorganic Growth is India Inc.'s New Passion
• Retail-Vision & Execution: Making of a Homegrown Retail Giant

The much-awaited pecking order is finally out. Comparison of net FII inflows into emerging Asian markets puts India at second place, just behind Korea. In '04 (till December 10), overseas investors have pumped in about $10.5bn into Korea. India received $7.8bn during the same period. Since December 10, an additional $540m has flown into Indian stock markets, taking net inflows to over $8.34bn. India beat Taiwan which bagged the third position with net inflows of $5.7bn. Last year, it was the first choice with inflows of just under $30bn. India ($6.6bn) stood third, just behind Korea ($12.5bn) last year. Inflows into India this year have beaten the benchmark MSCI index weightages for emerging Asian markets. Right now, India has a weightage of 5.8%. Korea has been assigned a weight of 17.7%, while Taiwan constitutes 14.2% of the index. Brazil's weight is 9.1%, Mexico's is 6.4% and China has a share of 8.2%. India's weightage, however, is expected to rise. While forex can keep pouring in, other than payments for imports, there are not many outflows. Cumulating forex reserves have their own costs that the RBI needs to bear.

Courtesy: The Economic Times, December 27, 2004

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Port-Of-Spain: On Christmas eve, Indian-made jewellery, clothing and other products are a huge hit as hundreds of shoppers throng an ongoing Indian trade fair. Christmas in Trinidad and Tobago is big business when the country gets on a shopping spree. The presence of Indian products has added an additional flavour to Christmas shopping. The Indian trade fair jointly promoted by Linkers India, New Delhi and the International Business Promotion, Trinidad and Tobago, has captured the national imagination of shoppers with massive purchases of specially-made Indian items. Some 70 booths reflecting Indian creativity in all aspects of human existence offer such items more than what meets the eye. Indian goods continue to fascinate shoppers around the world for its competitive price, high quality workmanship, both of which can stand the wrought of products made in other countries, Mr G K Arora of Linkers India said. This trade fair is another demonstration of the strong relationships that exist between Trinidad and Tobago, and India, he said. Trade, economic, cultural and political relationships are significant indicators for the continuation of this relationship, he said.

Courtesy: The Hindu Business Line, December 25, 2004

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Growth prospects of the Indian economy remain strong and the overall GDP growth for 2004-05 is expected to remain in the 6-6.5 per cent range, according to the Reserve Bank of India's (RBI) report on Currency and Finance 2003-04, released on Thursday. The report said that the economy would get a further boost from the expected consolidation under the Fiscal Responsibility and Budget Management Act, 2003 and that adherence to the envisaged targets under the Act will release additional resources for private sector investment. This is also expected to create more jobs. The report observed sustained growth in production and also imports of capital goods and increase in bank credit as signs of revival of investment demand. The report said that the economy has exhibited "remarkable stability" in 2004-05 despite being pounded by external shocks emanating from monsoon conditions and international oil prices. "The further entrenchment of the growth momentum in the 90s, the opening up of the economy, and corporate restructuring have increased the competitiveness of the Indian industry, as is reflected in the robust merchandise export growth during the year so far." The report added that despite the sharp rise in oil imports, the BoP position remained comfortable. The strong growth in merchandise exports was supplemented by exports of services and buoyant remittances. The current account is expected to post a marginal surplus in 2004-05. Foreign direct investment inflows have recorded a significant increase during the current year so far, responding to improved growth prospects as well as the ongoing liberalisation measures to attract higher FDI in critical areas such as infrastructure.

Courtesy: www.thehindubusinessline.com, December 24, 2004

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As Americans fret about cheap labour abroad, the real issue has become not one of lower price but quality and scale - India is on the move to outmaneuver its US competitors on a stunning array of fronts, says a new book. "As more and more US firms turn to India, outsourcing has begun to shake the foundations of the American upper middle class. In a twist that highlights the new era, Americans are now even beginning to select India as the place for quality medical care, at a much lower price," says the book Rising Elephant by Ashutosh Sheshabalaya. Starting out as service providers for American customers some 15 years back, domestic Indian software firms paid great attention to the quality of their work. By 1996, there were more software firms in India certified to ISO-9000 quality norms of the International Standard Organisation than there were in the US, says Sheshabalaya, a Europe-based technology consultant. However, the best indicator of India's quality lead is the massive lead they obtained in acquiring Capability Maturity Model (CMM) certifications from the US Defence department backed Software engineering Institute at Carnegie-Mellon University, billed as the 'global standard' for defect-free software, he says.

Courtesy: The Economic Times, December 23, 2004

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The Indian product development market, though still in its nascent stage (a mere 0.2% share of the worldwide $180 billion market in 2002 and 0.3% in 2003), is undergoing a quiet change. From being a cost reduction destination, India is slowly but steadily emerging as a thriving centre for innovative ideas and new product development, A National Association of Software and Service Companies (Nasscom) report said. According to the report titled 'Offshore Product Development,' the Indian product development market is estimated to grow to $8-11 billion by 2008. Global sourcing of product development will no longer be an optional strategy by 2007-08. With offshore outsourcing being accepted as a key strategy to stay competitive in the globalised economy, the production cycle for technology-centred products will require global resources and global delivery, the report said. The main driver for the emergence of the offshore product development segment has been the enormous pressure on product companies for faster-time-to-market, coupled with the need to introduce new products and new technologies in newer markets, the study said. "Thereby, companies are realising that the best option is to outsource it to the specialists. The economies of open source software will force companies to pare down development costs further, and in the process, increase the offshore component," it said. India's lower costs (it generally costs around $2 million to develop a modest software product in India, as against $5 million in the US), means that venture capitalists are not risking as much money on a given start-up.

Courtesy: www.financialexpress.com, December 23, 2004

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After more than a decade of opening up of the Indian economy, Indian companies are finally embarking on the mergers and acquisitions bandwagon to make a global footprint. Indian firms acquired 120 foreign companies in 2001-03 at a cost of $1.2 billion. The new economy and IT companies are not the only ones behind the M&A drive. A host of traditional firms representing sectors such as consumer goods, hospitality, engineering goods, automobiles and petrochemicals are fast shedding their local focus to go global through buyouts. The acquisitions are not restricted to traditional markets such as the US and the UK alone. Companies are going to markets as diverse as Australia, Romania, Germany, South Korea and the Philippines.

Global Footprints

There are various reasons why the decision to expand globally are being taken by Indian companies.

• Expand market share
• Enter new product lines
• Expand value chain
• Reduce cost and achieve economies of scale
• Enter new geography for derisking business mix
• Gain front end presence and create brand value

Road Reality

Challenges like managing people, different cultures, integrating technology, people and infrastructure exist. Considering this, in the quest to go global, what is more important for Indian companies: Getting competitive in the domestic market or globalising? Though the domestic market provides a lot of scope for the companies to grow, competition can be tough if companies do not explore the global markets once they have grown to a threshold level in the domestic market.

Courtesy: The Asian Age, December 21, 2004

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While Mumbai is the heart of the diamond trade, the soul is provided by the neighbouring state of Gujarat in west India, where most of India's diamond processing takes place. Enterprising dealers from Palanpur in Gujarat have steadily risen to such prominence that they constitute arguably the most influential group in the world diamond trade today.

Courtesy: www.ibef.org, December 20, 2004

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Tiny manufacturing units, supported by Khadi and Village Industries Commission - KVIC, form part of a large army of home grown enterprises which are giving India's leading consumer products marketers, a run for their money. Last year, KVIC became India's largest consumer goods marketer by recording a turnover of over US$ 2.2 billion, in the process overtaking India's largest multinational and consumer goods marketer - Hindustan Lever 9Unilever's India arm). While Lever's topline has stayed static, KVIC's revenues grew by 14 per cent. KVIC recently got into the more serious business of branding to extract more value and mileage for its supply chain, by introducing organic food brand desi ahaar (Hindi term for ethnic food) which has 20 odd items like basmati rice, natural sugar and tea. At another level, top Indian fashion designers like Rohit Bal, Malini Ramani and Jattin Kochhar have been roped in to produce chic khadi garments. Today KVIC is a quasi-commercial organisation whose business practices hold many important lessons for other developing countries looking to promote enterprise and create jobs. Its simplistic model offers entrepreneurs a subsidy of up to 30 per cent of the project cost, besides technical support, help in sourcing raw materials, and marketing to the end-consumer through its 7000 outlets.

Courtesy: www.ibef.org, December 20, 2004

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Indian rules regarding foreign direct investments (FDI) are more favourable to investors than China's but where New Delhi falters is in marketing the country, according to a US don of Indian origin. " Indian FDIs rules are more favourable compared to China but India falls short on the last mile commitments in making effective sales pitch," Tarun Khanna, a professor at Harvard Business School said. He was addressing the National Council meeting of the Confederation of Indian Industry (CII) here on Saturday. The subject of his address was 'The Dragon and the Elephant - Understanding business in modern China and India.' The fundamental difference between India and China in their growth strategy is that while China has placed an extremely strong focus on foreign investments, the Indian economy is largely driven by a robust private sector, Khanna said. While China led in sectors like consumer electronics and automobiles, India's strength was in sectors like software, pharmaceuticals, films and advertising, he noted.

Courtesy: The Economic Times, December 20, 2004

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Though prices of all luxury tree nuts, or dry fruits as we call them, have doubled over last year, that is no longer a reason to banish them from the table. India is together spending more than $150m buying them from overseas. Top favourite almond alone is costing the nation over $100m this year. India is the world's biggest market for imported in-shell almonds. "The market is not focused on the north at all. In fact, the demand is more in the west, may be because that region has a predominantly vegetarian population," say industry watchers. The price increase is already scary, and expected to become scarier still by January, when the wedding season begins again. What's more, the higher prices next year are likely to stay put for at least eight-nine months Take almonds. From Rs 31/100 gm last year, Californian almonds are now selling locally at Rs 38.5/100 gm. And by January, they are likely to hit Rs 42/100 gm. Pistachios have zoomed from Rs 22/100 gm last year to Rs 33/100 gm now. Cashew prices are at record highs as well. Traders say the prices are a reflection of a poor crop of tree nuts globally. "The almond crop is down substantially in Afghanistan, Iran and the US. That has pushed prices from $1.4/lb last year to $2.3/lb now," say Delhi traders. The pistachio crop is also estimated to be less than half of last year. But despite these steep prices, the demand has seen virtually no drop. "There has been no drop in volumes, and it has actually gone up for almonds. In that regard, India is now no longer a price sensitive market,'' they point out. Indian own almond production in '04-05 is expected to be 1,200 tonnes due to the upswing of the production cycle. The forecast for '05-06 is a decrease to 1,100 tonnes, providing for normal weather. Most domestically produced almonds are consumed locally, in the Kashmir Valley. Meanwhile, spiralling demand for dry fruits is excellent news for biggest supplier US. Importing over 94% of its consumption, India is the largest global market for in-shell almonds. In '03, the US exported nearly $80m to India, of this, 88% ($70m) was in-shell. In '04-05, India is expected to import 23,5000 tonnes, rising to 25,000 tonnes in '05-06.

Courtesy: The Economic Times, December 20, 2004

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The annual global trade in spices and herbs is estimated at about 500,000 tonne valued at $1,500 million. India has emerged as a major exporter of spices and herbs with a global market share of 46%. Addressing the seminar on spcies and herbs organised by the National News Service here on Sunday, horticulture commissioner Dr ML Choudhary said: "There is a growing market for spices both in the country and abroad. In the changing scenario of competitiveness, quality is becoming central to trade. Hence both the producers and the exporters should give more attention to this aspect." Director of Central Council for Research in Ayurveda & Siddha Dr GS Lavekar said that India contributes 20-25% to the world trade in spices. Ayurveda classifies spices as wonder foods which are in many synergistic herbal formulations.

Courtesy: www.financialexpress.com, December 20, 2004

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