India is now on the radar of every venture capital company worth its salt. Trips to India by Silicon Valley-based venture capitalists is no longer a rarity. But Indian companies being provided with a forum to show-case their talents in Silicon Valley is a new development. For the first time ever, Ernst & Young's (E&Y) Capital Advisory group is seeking nominations from Indian companies, to participate in the "cross-border showcase" to be held in November in California. This plan was unveiled at the TiE (The Indus Entrepreneurs) Networking event here. In similar events organised by E&Y earlier, companies from Israel were selected. This time, the programme has been extended to cover technology companies based in India and China.

Courtesy: The Economic Times, June 30, 2004

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A 36-member agri-business delegation from India will visit the three-day Royal Agriculture Show in Warwickshire from July 4. The delegation will explore opportunities for collaboration in the agricultural sector. The team includes representatives from the Government, private sector and service providers. It will specifically look at potential partnerships with UK industry in technologies and products in post-harvest, crop management, logistics, dairy, poultry, animal husbandry, packaging, import of food and drink products and organic farming. The British High Commissioner to India Sir Michael Arthur said: "Agriculture contributes 25 per cent to India's GDP, and engages roughly three-fourths of the population. The sector is a top priority for the Indian Government." The mission, organised by UK Trade and Investment (UKTI), aims to provide the delegation not only a deeper understanding of UK expertise in the sector but also an opportunity to explore business in their own areas of strength. UKTI is the British government organisation that supports companies in the UK trading internationally and overseas enterprises seeking to locate in the UK. This year over 100 British organisations will exhibit at the GPP, providing a significant opportunity for interested overseas firms. The show is the world's premier outdoors-agricultural exhibition representing the best of British agriculture and the countryside.

Courtesy: Hindustan Times, June 30, 2004

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The French energy and transport major, Alstom, is planning to make India a major hub for the Indian market and for global operations. A high-level ten-member delegation is thus being sent to India on a week-long visit to scout for new business activities. In addition, a technology mission is studying the potential in India. In India, Alstom companies have a combined turnover of about Rs. 1,600 crores. Alstom is the majority shareholder in Alstom Projects India Limited. The company has been involved in setting the country's first independent power project in Andhra Pradesh, the GVK Industries 235 MW combined cycle power project at Jegurupadu, and numerous other thermal projects.

Courtesy: The Hindu, June 29, 2004

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Indian economy is forecast to expand 9 pc in the year through the January-March quarter, aided by strong farm and service sector growth. Analysts said the best monsoon in a decade boosted crops harvested in the quarter and record low interest rates fuelled expansion in financial services as consumers bought cars and homes, attracted by interest rates at three-decade lows. The growth forecast from 10 economists surveyed for the January-March quarter ranged between 7.8 pc and 10.5 pc and produced a median forecast of 9 pc. The economy expanded 10.4 pc in the year through the October-December quarter. Analysts said the farm sector would log double-digit growth.

Courtesy: The Indian Express, June 29, 2004

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If the once much-hyped medical transcription is looking down, outsourcing in imaging, disease management and claim processing are the new areas to look up to, as experts say a great opportunity awaits Indian BPO industry in the healthcare sector. While estimates show that the revenue of medical transcription industry in India is expected to drop from $38 million in 2002 to $26 million in 2006, a nine per cent loss per annum, according to National Association of Software and Services Companies (NASSCOM), by year 2005, Indian BPO companies will be able to grab business worth $800 million from US healthcare companies alone. "During the early days of the Indian ITES-BPO revolution major moves were made towards providing transcription services to hospitals and healthcare centres especially in US. However, easy availability of high-end services through healthcare outsourcing is now eating into the share of medical transcription", says chief operating officer, Wipro Spectramind, Devashish Ghosh. With the global healthcare industry increasingly under pressure due to regulations and the need for cutting cost, there is a huge potential for Indian IT companies to tap this market, particularly in the more advanced areas of healthcare such as imaging, disease management and claims processing. While at present there are customers mainly from the United States and UK, industry players say, of late, demand for healthcare outsourcing has also been seen in European countries like Germany and France. "Also, Indian companies have an edge as they can offer a large number of value added services like diagnostic analysis by highly qualified medical professionals at a much cheaper cost", Ghosh adds. Several Indian companies are presently providing solutions such as customer management systems, maintenance of electronic medical record services, etc. to healthcare service providers, health insurance companies and medical equipment firms.

Courtesy: Hindustan Times, June 29, 2004

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Indian steel promoters better watch out. Arcelor SA, the world's largest steel manufacturer, is hunting for an acquisition in the country. Arcelor CEO Guy Dolle today said his company would seek further acquisitions in India and Russia once it has completed a deal to gain sole control of Companhia Siderurgica de Tubarao (CST), Brazil's second-largest crude steel producer. Arcelor, which has a capacity of 47 million tonnes, was formed after the merger of USINOR, Arbed and Aceralia. India, Asia's third-biggest economy, is currently a very attractive destination for steel producers due to strong growth prospects. The country's per capita consumption of steel is currently very low at 29 kg compared to 400 kg in developed countries such as the US and the world average of 140 kg. Steel demand grew 5-6% in the year ended March 31, 2004, much higher than the 2% growth rate in the year-ago period. With the economy slated to grow 6.5-7.0% in 2004-05, demand for steel is also expected to be strong, analysts said. Steel shares gained sharply on the bourses, partly on hopes that Arcelor's move would spur consolidation in the fragmented Indian industry. Steel Authority Of India Ltd (SAIL) climbed 4.02% to Rs 27.20 while Ispat Industries rose 4.87% to Rs 7.81, Jindal Iron & Steel was up 3.47% to Rs 182 while Essar Steel gained 5.46% to Rs 15.40.

Courtesy: The Economic Times, June 29, 2004

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To put the country on a 12 per cent growth trajectory and increase the share of small industries beyond seven per cent of the national economy, CII on Sunday demanded speedy formulation of Small Enterprises Development Bill and undertaking tax reforms along with fixing a deadline for value added tax implementation. "To meet the international competition in a planned, phased and a time-bound manner, the small industry outlook has to be more global. It was essential to attain the growth rate of 12 per cent and increase the GDP contribution of small industry to the national economy beyond seven per cent," the Chamber said in a pre-budget memorandum to the government. The Confederation of Indian Industry also strongly advocated enactment and implementation of the enterprises development bill, saying it would simplify the day-to-day operations of a small enterprise.

Courtesy: The Economic Times, June 28, 2004

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India has the right framework to emerge as a top destination for foreign investment, a survey by the Federation of Indian Chambers of Commerce and Industry (Ficci) has said. What is needed are global and regional trade initiatives to give a boost to FDI inflows into India. The survey, conducted in March-April, when the election process was underway, reflects India's economic growth, particularly in the manufacturing and service sectors, which enabled the foreign investors to scale up their capacity utilisation. The FDI Attractive Index indicates India as a favoured destination, registering a gain of almost eight per cent, up from 3.6 last year to 3.9 at present, the FICCI survey titled 'The Experience of Foreign Direct Investors in India' said. A majority of the around 138 companies surveyed said they had entered India in the post liberalisation era. While almost 80 responding companies entered the country in the last decade, another 33 companies have operated here for 15 years or more. Three factors have motivated foreign companies to enter India: market size, highly skilled manpower, and low cost of infrastructure and operation, FICCI survey said. Political stability has been accorded the 'highest' importance for future FDI flows into the country, followed by stability in policy guidelines and reduction in ground level obstacles.

Courtesy: The Statesman, June 28, 2004

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It will take another couple of years before the gigantic US banking market opens up for core banking software products, but Infosys isn't waiting till then to make its first moves. Finnacle, the banking product from this software services giant, has already been sent to the experts for a thorough check-up to see if it's fit for the multi-billion dollar US market. "In India and other developing countries, banking jobs are prized jobs and even tellers are pretty well educated. In the US, however, such jobs are taken up by low-skilled workers: housewives, school dropouts and those who want to work only part-time. The US market has not yet opened up to core banking solutions from India because most banks have already invested huge amounts on technology and are running on legacy systems. "There are about 10,000 banks in the US and most of them are simply getting new services built around the old solutions. By 2006, around the time the US market may be ready, Finnacle will also have other changes incorporated in its architecture. Currently the business rules are tied in only with the data residing at the bank branch while other channels - such as the ATM or the Internet - are linked to the rules separately. Finnacle revenues, a mere Rs 13.5 crore in March 1999, touched Rs 135 crore by March 2004.

Courtesy: The Economic Times, June 28, 2004

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India is to become a major production and profit centre for Swedish cosmetic giant Oriflame. As part of a new global marketing strategy, Oriflame is repositioning and redefining its brand. One crucial point of the strategy would be to use its factory in Noida, on the outskirts of the Capital, as a production hub for Asia. "The factory will serve Asian markets like Indonesia, Thailand and Sri Lanka," said Borjesson, who would soon be based in Delhi. At present the Rs 330-million ($7.3 million) factory makes India-specific products for national consumption but after the reworking, which will take about six months to a year, it would be designated a regional production hub. From the time it entered India, Oriflame, which pitches itself as a "natural" cosmetics company, has invested around Rs 550 million ($12.2 million) in the country. It has 11 service centres in India. In 2003, Oriflame exported products worth Rs 210 million ($4.6 million) - a figure based on the actual cost of products, excluding any taxes applicable in different countries. The company has branches in 58 countries. Borjesson said India is the second biggest Oriflame market in Asia after China.

Courtesy: Hindustan Times, June 28, 2004

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Medical tourism may make India a major player in $3-trillion global healthcare industry, concludes an analysis by PHDCCI. It has been estimated that due to the facilities and services India offers, and by leveraging the brand equity of Indian healthcare professionals across the world, the nation is poised to pocket a major chunk of global healthcare industry in the coming years. Presently, the healthcare industry in India is worth Rs 1,00,000 crore and employing four million people. The country has immense potential for promoting medical tourism in the country and is expected to grow to Rs 2,70,000 crore by 2012. The sector in the country is growing at a rate of 15% for the past five years. By 2012, if, according to PHDCCI analysis, medical tourism were to touch 25% of revenues of private up-market players, then up to Rs 10,000 crore would be added to the revenues of the major players involved. About 10,000-12,000 foreign patients are coming to India just for healthcare services annually. PHDCCI has identified that over 30% of big-time tour operators in the country have prioritised the sector as a lucrative business. They are not only taking care of all the travel and stay related aspects of the patients and their families.

Courtesy: The Economic Times, June 27, 2004

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US-based outsourced business service provider Zenta Group has opened a new site in suburban Mumbai to service its American customers and is planning to double its workforce to 5,000 by March 2005. The centre was opened in response to a growing demand from US customers for outsourced business solutions, a Zenta release said here on Friday. The facility, situated at Hiranandani Business Park, would house 1,200 new service employees, apart from housing the company's training facilities, it said. The company is also exploring additional locations, both internationally and India, to accomodate its growing businesses.

Courtesy: The Economic Times, June 27, 2004

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The Asian Development Bank today pegged India's economic growth at 7.4 per cent for this year and said high growth is likely to be sustained in medium term. The Manila-based bank, however, warned that fiscal situation remains a `cause for concern' and said if the new UPA Government failed to come to grips with the fiscal challenge, macro-economic stability and growth buoyancy would be jeopardised. "The near-term economic outlook is promising. The economy is on the upswing of a business cycle and the underlying long-term growth rate is accelerating. Based on the positive assumptions, the GDP is forecast to grow at 7.4 per cent in 2004," ADB said in its Economic Bulletin. The high GDP growth is forecast on the assumption that agriculture is slated to grow by 3 per cent, industry by 9.3 per cent and services by 8.5 per cent this year. Projecting a downturn of industry next year, ADB said the GDP was expected to grow by 7.6 per cent in 2005, mainly on the back of a robust 9 per cent growth in services sector.

Courtesy: The Hindu, June 25, 2004

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Reliance Industries Ltd has acquired the German polyester firm Trevira GmbH - an erstwhile division of the chemicals and pharmaceuticals giant Hoechst AG - for 80 million euros, or over Rs 440 crores. This will make it the largest polyester producer in the world. The acquisition would give Reliance a well-timed entry into Europe and an opportunity to take advantage of the growth potential emerging in Eastern Europe, Mukesh Ambani said. The buy, along with a planned capacity addition at Hazira and Patalganga, would take Reliance's polyester and yarn manufacturing capacity to 1.8 million tonnes per year and help it emerge as a leading player in the sector, Mr Ambani said. The plans include addition of 2.40 lakh tonnes of polyester staple fibre and 2.16 lakh tonnes per year of polyester filament yarn at Hazira and 94,000 tonnes per year at its Patalganga polyester filament yarn plant, he said. Besides entering the East European market via Trevira, Reliance will also bring the German company's speciality, polyester products to Asia. It is also looking to acquire oil companies in Africa, West Asia, Australia, and Latin America., Mr Ambani said. Meanwhile, Reliance said it has commissioned 75 retail fuel outlets and has identified customers for 80 million cubic metres of gas per day. According to the company, there is great potential in coal bed methane, and it is involved in developing two such projects. With coal reserves of 400 billion tonnes in India, the resource potential is estimated to be of the order of 35 to 40 trillion cubic feet.

Courtesy: The Asian Age, June 25, 2004

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Reliance's announcement of finding 4-5 tcf (triilion cubic feet) of gas off the Orissa coast, together with its 14 tcf reserve struck in Andhra waters two years ago, will change the country's energy map and force promoters of future oil and power projects back to their drawing boards. Reliance's latest gas find is half of state-owned explorer ONGC's Vasai gas find of 9 tcf and will turn the eastern coast into the country's gas bowl. Both ONGC and UK's Cairn have already found gas and oil reserves, though much smaller than Reliance, off the Andhra coast. These finds will go a long way in meeting the country's growing demand, expected to rise four-times by 2025. Total gas demand now stands at over 150 mmscmd (million cubic metres/day). Against this only 65 mmscmd of gas is available. While east coast is spewing gas, western region is pumping oil. Cairn had struck two major oil finds in Rajasthan's Barmer district. Add to this ONGC's Mumbai High, Panna-Mukta and other oilfields in Gujarat, energy scale balances out between the eastern and western regions. Reliance can take its gas right up to West Bengal to TN through Gail's network.

Courtesy: The Times of India, June 25, 2004

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GAIL (India) Ltd has been ranked No. 1 by Platts, the global leader in energy information, with 19.6 per cent "return on invested capital." The 2004 survey on the top 250 global energy companies has been published in Platts Energy Business and Technology magazine (EB&T). GAIL also happens to be the only Indian company appearing in the Top Ten list on any of the financial parameters in the overall list. Each company's rank was determined taking into account the firm's assets, revenues, profits, earnings per share and return on invested capital. Such recognitions establish India as a potential global player". All companies on the list have assets greater than $2 billion.

Courtesy: The Pioneer, June 24, 2004

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Favouring corporatisation of ports, liberalised FDI in air services and creation of a Railway Development Fund, CII on Wednesday said a growth of 7-8% in the next 10 years will double the country's GDP. In a pre-Budget memorandum submitted to the government, CII said, "India can achieve a 7-8% growth in GDP over the next 10 years to double GDP." The apex chamber also stressed that the government should overcome the challenges of setting up world class infrastructure, improved agricultural growth, creating more jobs and enhancing competitiveness. CII also recommended establishing an independent regulatory authority for ports and hastening the implementation of corporatisation of ports.

Courtesy: The Economic Times, June 24, 2004

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Cashing in on the stock market boom, mutual fund industry posted a robust 28 per cent growth with assets under management (AUM) going up to Rs 1,40,000 crore in the last fiscal, ICRA said on Wednesday. UTI continued to be the dominant player with a market share of 14.76 per cent, while private players like Templeton, HDFC Standard Life and Prudential ICICI commanded over 10 per cent each. The other major players include Birla Sunlife, Reliance, Standard Chartered, Kotak Mahindra, SBI Mutual and DSP Merrill Lynch with 3-7 per cent market share, the ICRA report on mutual fund said. "The Indian mutual fund industry's total AUM stood at around Rs 1,40,000 crore, which works out to around 10 per cent of aggregate deposits of banks and 13 per cent of equity market capitalisation," it said, adding corporate investors accounted for 57 per cent of the mutual fund assets.

Courtesy: The Economic Times, June 24, 2004

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The country's telecom subscriber base grew by 8.5 per cent to touch 7.67 crore for the quarter ended March 2004 compared to the previous quarter, primarily driven by a whopping surge in mobile phone users. While subscribers of fixed services, both fixed line and WLL-F, increased marginally to 4.28 crore in the quarter from 4.2 crore in the previous quarter ended December 2003, that of mobile service users base (cellular and WLL-M) jumped to 3.36 crore from 2.84 crore, according to the quarterly performance indicators of Telecom Regulatory Authority of India. The number of mobile users in the country has exceeded the fixed subscribers in circles like Mumbai, Delhi, Chandigarh, Punjab and Chennai. With the growth in the number of mobile subscribers continuing, the country will have more mobile subscribers than fixed users in 2004 itself. Mobile subscribers (WLL-M) and cellular companies also showed a growth of 18.46 per cent in the quarter.

Courtesy: The Pioneer, June 24, 2004

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The new trends in retailing gain significance in that the jewellery market in India is worth Rs 50,000 cr and diamond jewellery is one hot segment which is witnessing rapid growth. While on the one hand, retailers like Oyzterbay and Trendsmith are following the multi-brand outlet route to retailing diamonds, others like Orra are striking out on their own. In fact, Oyzterbay and Trendsmith seem to be following in the footsteps of international stores like Talisman Gallery in London and Suarez Joyera of Spain which are MBOs and offer several brands. Mumbai-based Trendsmith, another MBO which offers as many as 25 brands is leveraging on its experience as a retailer, says Mr Samrat Zaveri, MD of Trendsmith. Zaveri says that his chain is positioned to meet the customer requirements of a discerning and upwardly mobile market and has brands like Ego, Nirvana, Shaze and Shagun. Trendsmith is present in both the metros as well as non-metros like Chandigarh and is on an expansion route with more stores coming up in centres like Hyderabad and even Dubai.

Courtesy: The Economic Times, June 23, 2004

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India ranked second among the most desirable investment destinations for mass merchants and food retailers worldwide in 2004 despite the restriction of foreign direct investments, global consultants AT Kearney said on Tuesday. "In 2004, the 10 countries mass merchant and food retailers should look to enter immediately are Russia, India, China, Slovenia, Croatia, Latvia, Vietnam, Turkey, Slovakia and Thailand," AT Kearney said in its study on Global Retail Development Index (GDRI). Despite the restrictive FDI rules and regulations preventing foreign ownership of retailers, India rose to second place on AT Kearney's GRDI for 2004. Advising the retailers to enter the Indian market, AT Kearney manager Fadi Farra said, "India is at a stage where China was about 15 years ago." China had similar rules prior to joining WTO and global retailers who developed joint ventures and franchise operations with local entities and gained a significant first-mover advantage and a better understanding of the market.

Courtesy: Hindustan Times, June 23, 2004

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Gems and jewellery sector has targeted an 11% rise in exports in the year to March '05 from a year ago by promoting domestic designs and products, a leading trade body said on Tuesday. The sector aims to export gems and jewellery worth $13.3bn in '04-05 from $12bn in the previous year, Sanjay Kothari, chairman of the Gem and Jewellery Export Promotion Council, told reporters at a press conference. Gems and jewellery exports from India, the world's largest diamond cutting and polishing centre, surged 51% to $1.8bn in April-May from $1.2bn in the same period a year ago. "The jewellery sector will play an important role in achieving the target," Mr Kothari said, adding that exports of gold jewellery would double in the coming years. India accounts for about 60% of the global diamond market and six per cent of the jewellery market in value terms. Gold jewellery exports from India, the world's largest consumer and importer of the yellow metal, jumped 68% from a year earlier to $2.6bn in the year to March '04. Nearly 40% of Indian gold jewellery exports go to the US, which buys half the world's jewellery. Other major markets for jewellery and diamonds are Hong Kong and Belgium. With about three million people employed in the precious metals sector, India accounts for more than six per cent of the global jewellery market in value terms.

Courtesy: The Economic Times, June 23, 2004

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The Rs 1.5-lakh crore processed food sector in the country is expected to provide 72.72 lakh jobs during 2004-05 as a result of high production of milk, fruits and vegetables, according to a study. India, which produces about 146 million tonnes of fruits and vegetables, the second largest after China, has high potential for employment in the processed food sector, said the McKinsey FAIDA report. The processed food industry is estimated at Rs 1.5-lakh crore and has attracted an investment of Rs 38,531 crore during the Ninth Plan, Ministry for Food Processing Industries said quoting the study. Direct employment of one person in the sector also provides additional indirect employment to 3.64 persons, it said. Despite India ranking first in many an areas like milk production at 84.5 million tonne per annum, livestock population at 47 crore animals (which is 53 per cent of world's buffalo and 23 per cent of sheep), the study says the country's level of processing is a mere seven per cent as compared to 45 per cent in Philippines and 23 per cent in China. According to the Ministry, agro-industries have been accorded high priority under its Plan schemes by providing financial assistance in the form of grant-in-aid to industry and NGOs among other cooperative and government agencies.

Courtesy: The Economic Times, June 22, 2004

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India's exports surged 29.4 per cent in May as manufacturers catered to rising demand from the key markets of the United States and European Union which account for almost half the country's annual shipments. The Commerce and Industry Ministry said on Monday merchandise exports in May rose to $5.81 billion from $4.49 billion in the same month a year earlier. Exports were up 20 per cent year-on-year in April, 2004. Exports between April and May, the first two months of the fiscal year 2004-05, rose 24.9 per cent to $10.82 billion from $8.66 billion in the year-ago period. Analysts said they expected exports to grow at a steady pace over the next few months on the back of a global economic recovery and encouraging data from Japan which is India's other key export market. Indian exports shrugged off the impact of a rising rupee last year and exceeded the 12 per cent annual growth target, rising to $61.84 billion in the fiscal year ended March 2004. The country has a paltry 0.7 per cent share at present. Imports in May leapt 28.2 per cent to $7.72 billion year-on-year, the statement said. Non-oil imports, which signify increased industrial activity, surged 17.9 per cent to $10 billion from $8.48 billion in the year-ago period. April-May oil imports jumped 47.4 per cent to $4.6 billion from $3.12 billion in the year earlier.

Courtesy: Hindustan Times, June 22, 2004

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