India newsletter 10 2013 by Indian Embassy Vienna

INDIA NEWSLETTER www.indianembassy.at

Published by the Embassy of India, Vienna Year 3 • Issue 34 • October 2013

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India Newsletter • 1

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NEWS FLASHES

Smartphone sales in India registered a growth of 166 per cent during the second quarter of 2013. n

The core sectors growth comprising coal, crude oil, natural gas, petroleum refinery products, fertilisers, steel, cement and electricity touched a fourmonth high at 3.1 per cent in July 2013.n

Indian corporate and government entities raised Rs 87,840 crore (US$ 13.28 billion) in Q1 of 2013-14 through private placement of bonds, a growth of 11% y-o-y.n

Soyameal exports from India stood at 183,000 tonnes in August 2013 as compared to 107,000 tonnes in July 2013.n

Foreign direct investment (FDI) into India registered 6 per cent y-o-y growth to touch US$ 10.87 billion during the first half of 2013.n

Media and entertainment industry in India is expected to grow at a compounded annual growth rate (CAGR) of 18 per cent until 2017.n

Odisha emerged as the top investment destination for new projects in India with investments worth Rs 53,000 crore (US$ 8.33 billion).n 2 â&#x20AC;˘ India Newsletter

Male grooming market in India is currently valued at US$ 595.09 million and is expected to touch US$ 825.73 million in the next three yearsn

Outbound shipment of goods from India is expected to grow nearly 24 per cent in the four months to December 2013, and by 16 per cent during FY14.n

The audio visual (AV) market in India is expected to register a compounded annual growth rate (CAGR) of 25 per cent to touch US$ 5.1 billion by 2015.n

GSM operators in India added 1.78 million users in August 2013 taking the total GSM subscriber base in the country to 674.4 million.n

The frozen snack food market in india is currently valued at Rs 800 crore (US$ 129.24 million) and is growing at 15-20 per cent.n

in India since 2012 taking the total number of MNC R&D centres in India to 1,031.n

Investments into Indian shares through participatory notes (P-Notes) recorded a threemonth high of Rs 1.65 trillion (US$ 26.35 billion) in August 2013.n

Water purifier market in India is expected to reach Rs 6,100 crore (US$ 972.72 million) in the next four years from Rs 1,864 crore (US$ 297.22 million) in 2012.

Indirect tax collections reached Rs 1,67,000 crore (US$ 26.83 billion) during the first five months of the current fiscal, growing by 4.1 per cent yearon-year.n

The per capita gross domestic product (GDP) of India is expected to grow by US$ 51 a year between 2010 and 2020 due to rising mobile phone subscriptions.n

Indian apparel exports are expected to touch US$ 17 billion in the next two years from US$ 13 billion last year.n Around 25 global c o m p a n i e s established research and development (R&D) centres

Mobile games and applications market in India is expected to touch Rs 2,700 crore (US$ 430.06 million) by 2016.n The Indian tablet PC market is expected to cross US$ 2 billion in revenues by the end of 2013.n

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NEWS ARTICLES Economy to expand over 5%, average 8% growth rate to be revisited

he Planning Commission said it will revisit annual average GDP growth target of 8 per cent for the 12th Plan (2012-17) in view of dismal performance in first two years of policy period, while saying the economy is likely to expand by over 5 per cent this fiscal. “We have not made a short term estimate. We are relying on whatever Finance Ministry is saying. At the moment I don’t see any reason to disagree with what Finance Ministry is saying,” Commission’s Deputy Chairman Montek Singh Ahluwalia said on the growth projection for this fiscal. Earlier this month, Finance Ministry had said that Indian economy will grow by over 5 per cent in the current fiscal on back of high farm productivity and investments. “It (GDP) will be more than 5 per cent, it cannot be less than 5 per cent,” Economic Affairs Secretary Arvind Mayaram had said. When asked whether economy would growth at a rate over 5 per cent this fiscal as projected by the Finance Ministry, Ahluwalia replied, “It is not ruled out. That is what I hope.” Reeling under the impact of slowdown, Indian economy grew by 5 per cent in 2012-13, the first year of the 12th Plan. The first quarter (April-June) economic growth in this fiscal has slipped to 4.4 per cent from 4.8 per cent in the previous January-March quarter. When asked about possible tinkering with the annual average economic growth target of 8 per cent in the 12th Plan, Ahluwalia said, “The Planning Commission will certainly revisit the growth prospects.” “I remain of the view that the medium term 8 per cent average economic growth remains valid

but it will take longer to get there because (the growth in) first two years have been disappointingly low,” he added. As per the practice, the Commission comes out with a mid-term review of Plans during the third financial year of the policy period. In its last mid-term review, the Commission had cut the annual average growth rate target of 9 per cent to 8.2 per cent for the 11th Five Year Plan period (2007-12). But only 8 per cent average annual economic growth was achieved during the Plan period. The 12th Plan document itself talks about the different growth scenarios. It said that in absence of sufficient action to promote economy, the average growth would range from 6 to 6.5 per cent.n

India to build world’s largest solar power plant in Rajasthan

he Indian government will set up the world’s largest solar power plant in its northwestern state of Rajasthan, an official statement said, and the venture is expected to significantly reduce solar power taxes in the country. The project, known as the “UltraMega Green Solar Power Project,” will have a total power generation capacity of 4,000 megawatts, which is more than double the total solar power generation capacity in India. “This will be the largest solarbased power project in the world. Being the first project of this scale … this project is expected to set a trend for large-scale solar power development in the world,” a government statement said. The project will be spread across 23,000 acres of land belonging to the state-run Sambhar Salts Ltd, near the Sambhar Lake, which is about 47 miles away from Jaipur, Rajasthan’s capital city. The first phase of the

project, which will be for 1,000 megawatt capacity, is expected to be completed in three years and will be run by a joint venture of five state-run utilities, including BHEL, Power Grid Corporation of India and Solar Energy Corporation of India. “Based on the experience gained during implementation of the first phase of the project, the remaining capacity would be implemented through a variety of models,” the statement said. The plant, when fully operational, will generate 6,000 million units of electricity a year, and it is expected to bring down the solar power tariffs in the country. The government is hoping to sell solar power from the proposed plant at 5.50 rupees (about 9 cents) a unit, which would be the lowest tariff for solar power in the country.n

Indian Railways’ DLW produces world’s first ever 5500 HP locomotive as a pilot project

n continuing with its technological upgradation programme, Indian Railways has produced the prototype 5500 HP diesel locomotives (WDG5) which are already running as a pilot project in North Central Railway. This Loco is developed by Diesel Locomotive Works (DLW), Varanasi, a production unit of Indian Railways. This is so because no locomotive manufacturer in the entire world has attempted more than 4000 HP on 22 tonne axle load and also because of the smaller moving dimension of locomotive as compared to USA and Canada. The 5500 HP WDG5 is primarily aimed at improving the throughput with higher balancing speeds. The locomotive will be able to achieve 100 Kmph speed on level track with higher axle load. WDG5 brings to Indian Railways advanced technologies such India Newsletter • 3

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as Electronic Fuel Injection (for higher fuel efficiency and emission control). DLW’s locomotive designs implement collision protection, provision for heating, ventilation and air conditioning, task lighting, improved visibility, ergonomic seating and a soothing and aesthetic visual TFT based display (similar to that used in aircrafts), thereby setting up new standards for crew comport and safety. Today DLW is able to manufacture locomotives with a wide horsepower range, from 1400 HP to 5500 HP for multiple track gauges. Thus, besides meeting the needs of non-railway customers in India, DLW is exporting locomotives to Bangladesh, Sri Lanka, Vietnam, Malaysia, Tanzania, Sudan, Senegal, Mozambique and Myanmar. in addition, DLW has also diversified into manufacture of Diesel Generator (DG) sets and is the proud supplier of the extremely critical back up DG sets to Nuclear Power Corporation India Limited’s nuclear power plants at Kota, Narora, Kaiga and Kalpakkam. DLW’s which is the only manufacture of mainline diesel electric locomotives not only in India but in the whole South and Southeast Asia has grown and transformed over the years to meet the nation’s changing transportation needs. Having manufactured over 6700 locomotives till date, DLW is now one of the biggest locomotive manufacturers in the world. In the year 2012-13, DLW manufactured an unprecedented 294 locomotives, thereby increasing its production nearly three times from 112 locomotives manufactured in the year 2002-03. Diesel Locomotive Works (DLW), Varanasi will be shining in the glory of ‘Golden Jubilee’ year when it will be completing 50 years of its production service next year i.e 2014 since its inception in 1964.n 4 • India Newsletter

‘Authorising Nation’ status: India may emerge as a lowcost testing hub for IT & telecom products

ndia could emerge as a low-cost hub for testing security-sensitive IT products used in telephone and other critical infrastructure networks with the country being recently given the ‘authorising member nation’ status in the Common Criteria Recognition Arrangement (CCRA), said top officials in the telecom and IT sector. CCRA, which counts the US, Canada, UK, Germany, France and Japan as among its 26 members, is the top international agency that defines common processes to certify IT products used in infrastructure networks in telecom, power, aviation and defence sectors. Its governing consortium cleared India’s application for “authorising nation” status, which means the country can now issue clearances to companies to set up CCRAaccredited private test labs in the country. Laboratories in India could offer testing services at much lower costs compared to other CCRA labs in western markets, said Rajan Mathews, director general of the Cellular Operators Association of India (COAI), the industry body representing GSM operators. He said that the lower cost structures would stem from “lower operating costs, reduced labour charges arising from the surfeit of trained and qualified engineers required for such testing”. “Since this is also a manual intensive process, Indian labs will have distinct cost advantages,” he added. Till date, India was a “consuming member” and depended on CCRA approved test labs overseas for certification of IT products used in critical infrastructure networks. But from now on, labs set up in India and authorised by India’s Standardisation Testing & Quality Certification directorate, which is under the Department of Electronics

& IT, will be equipped to certify IT systems supplied by local and global vendors as safe to connect to the country’s core infrastructure networks. Software companies Tech MahindraBSE -1.43 % and WiproBSE -1.17 % have already evinced an interest to set up test labs in India. Pune-based Tech Mahindra said it is closely studying feasibility, business and financial aspects of setting such large infrastructure in the coming months. “Authorising member status opens up the fast-growing Indian market to implement stringent test norms in the said infrastructure. And telecom amongst all is very susceptible to vulnerabilities,” said Sirisha Voruganti, head (device testing practice), at Tech Mahindra. Voruganti, however, added that quality, apart from the low cost, was very important in deciding market shifts. Bangalore-based Wipro declined to comment. A top executive of a leading European telecom gear maker said that while there are “clear cost advantages” for IT products to be tested in India, those testing labs would need to have reciprocal arrangements with other CCRA labs so that certificates are mutually recognisable. “Equipment certified by an overseas CCRA lab for deployment in Indian networks must not be subjected to fresh tests in a sister lab in India,” this official said. COAI’s Mathews believes challenges for Indian lab developers would be formidable. “Given the sheer volume of new equipment expected to be developed and tested for things such as 3G, 4G LTE or cognitive radios being developed by Indian scientists, private CC-testing labs will have serious challenges in ensuring equipment is available to telecom operators on time for implementation,” said Mathews. DoT had deferred its plans to locally test IT and telecom gears to April 2014 from the earlier October, 2013, deadline in the absence of global standards.n

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India analysing global market to boost exports

ndia is looking to tap certain sectors in the global market where China is fast losing its export competitiveness due to rising wages, and have commissioned a study for a detailed understanding of the issue. The move is aimed at boosting the country’s exports and containing the ballooning current account deficit (CAD). “We have commissioned a rapid analysis of the sectors which China has been vacating...,” Commerce Secretary S R Rao said at a function. China, whose economy is mainly driven by exports, is expected to lose price competitiveness in the international market because of rising wages in that country. Rao said that India can “certainly” take advantage of the situation. India’s exports rose for the second straight month by 12.97 per cent to USD 26.14 billion in August, while the trade deficit narrowed as gold imports fell. During the 2012-13, the CAD was at all time high of 4.8 per cent of GDP or USD 88.2 billion. Government proposes to bring it down to USD 70 billion or 3.8 per cent of the GDP. India’s has a huge trade deficit to about USD 40 billion with China in 2012-13. India’s exports to its neighbouring country stood at USD 13.53 billion while imports were USD 52.24 billion. Rao also said despite the fact that India’s produces one of the best yarns in the world, its apparel exports are not increasing whereas small countries like Vietnam has aggressively increasing their share in the world market. “Vietnam’s textiles exports increased from USD 2 billion to USD 18 billion in the last 5-6 years and India is still

stagnating at about USD 20 billion,” he said. He added that India has move up in the global value chain to increase its share in the global market. The Secretary said that the country is facing problems in areas like labour laws, environment and land acquisition. Further he said that the commerce ministry has also commissioned a study to economic think tank ICRIER to look into the matters acting as hindrance to boost exports from special economic zones. He said that local state taxes are also issues in front of enhancing the country’s shipments. “There is a serious supply side constraint due to lack of proper infrastructure,” he added. On the forthcoming WTO Ministerial Meeting at Bali in December, he said that agreement on trade facilitation would help in reducing transactions cost of exporters. Speaking at the occasion EU Ambassador to India, Joao Cravinho said in the coming years, Europe will face problems of labour force due to increasing ageing of its population. “We may have to import people from countries like India” to deal with the situation, Cravinho said.n

India’s market diversification strategy showing results: Anand Sharma

ndia’s market diversification strategy of reaching out to newer vistas in Asia, Africa and Latin America is beginning to show positive results, Commerce and Industry Minister Anand Sharma said. Inaugurating the first overseas office of the Export Credit Guarantee Corporation (ECGC) India Limited, the Minister said: “India’s market

diversification strategy focussed on outreach to newer markets in Asia, Africa and Latin America, is beginning to show positive results.” The event was attended by senior officials of ECGC and the High Commission of India in London. The event was also attended by a large number of high-level representatives from the economic and financial sector of the UK. The Minister welcomed the opening of the ECGC office in London, hoping that ECGC would continue to play a significant promotional role in increasing exports from India. It was noted that given the difficult global economic situation, exacerbated by the economic and financial crises, ECGC was providing an valuable service through assuring the much needed security and stability to an exporter while dealing with the uncertainties. In his remarks, the Minister referred to the strong fundamentals of the Indian economy, which remained resilient and continued to grow despite the global financial situation and the Euro zone crisis. Underlining the Indian economy’s strength in terms of purchasing power parity, Sharma highlighted the benefits accruing on account of the implementation of India’s Foreign Trade Policy 2009-14, at a time when the Indian economy was faced with the challenges of unprecedented volatility in commodity prices and sharply rising crude oil prices. Sharma congratulated ECGC for the establishment of its London office, which would play an important and crucial role in providing credit insurance to Indian exports, especially at the time of a volatile global economic situation, thereby ensuring growth and stability of Indian exports and further strengthening of the Indian economy.n India Newsletter • 5

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NHPC to invest Rs 20,000 crore in private hydropower projects in next five years

n an attempt to revive the struggling hydropower sector in the country, state-run NHPC has decided to take over private hydropower projects and is ready to invest equity worth Rs 20,000 crore in the next five years. The country’s largest hydropower producer with an installed capacity of 5,702 mw, NHPC is eyeing to add another 4,000 mw through equity investments. “We want more projects on nomination basis. We aren’t getting projects compatible to our capabilities,” said ABL Srivastava, director ( finance), NHPC. Company officials said that NHPC currently has enough cash reserves for the proposed equity investments. “State governments have lately preferred private players for harnessing hydro power. But most of them have not taken off. Given the amount of equity with us, we are in a good position to form joint venture with private power companies and may even take over the project in many cases,” said Srivastava. NHPC officials also said that several private companies, especially with projects in the north and northeastern parts of the country, have approached the company to form a joint venture involving the state government as well. “We are still planning our partnership model with state governments and private players for future projects,” Srivastava told reporters. NHPC has projects totalling 12,240 mw in the pipeline, out of which around 8,000 mw worth of projects are awaiting clearances from the central government. Some of its key projects such as Subahsiri (2,000 mw) and Dibang (3,000 mw) in Arunanchal Pradesh are awaiting clearances from the ministry of environment and forests. The PSU recently commissioned 160 mw Teesta Lower Dam Power project, phase 3 (TLDP 3) project in Sikkim after a hiatus of six years due to geological challenges. It is

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building six hydropower projects in Sikkim totalling 4,000 mw. The phase four of TLDP, with capacity of 132 mw, is slated for commissioning in October 2014. Phase five of TLDP (512 mw) was commissioned in March 2008. The upstream Teesta-3 power project in the state is being constructed by a private entity and is supposed to be commissioned by the end of this year in December but NHPC officials in the Teesta region said that no major work has progressed in it.n

Foreign portfolio investors to get tax benefits similar to FIIs

oreign Portfolio Investors (FPIs) will get all the tax benefits available to foreign institutional investors (FIIs). They will also not have to fulfil the Know Your Customer norms separately for opening bank accounts, the Finance Ministry said. On October 5, the Securities and Exchange Board of India had announced a new category of investors, called the FPI, by merging the existing FIIs, sub-accounts and qualified foreign investors. The decision was taken on the basis of recommendations by the K.M. Chandrasekhar Committee, which suggested that the Government could consider bringing more clarity and certainty while prescribing tax provisions for FPIs. “Taxation benefits available to FIIs would be transferred to FPIs,” a senior Finance Ministry official told Business Line, outlining the Ministry’s effort to bring clarity in the new tax regime. Withholding tax Earlier on May 21, the Finance Ministry had said that foreign investors would have to pay only 5 per cent withholding tax (against 20 per cent earlier) on interest earned through investment made in rupee-denominated long-term infrastructure bonds issued by Indian companies and Government securities.

Withholding tax is similar to tax deducted at source, but is meant for non-resident investors. Foreign investors are also not required to have permanent account numbers to claim lower withholding tax. Similarly, foreigners investing in the equity market get tax benefits on long-term (investments of more than a year) profit earned, as prescribed by the Double Taxation Avoidance Agreements with various countries. For example, like India, Mauritius, too, prescribes zero duty on profit earned on selling equities after one year. FIIs using the Mauritius route will not have to pay any tax on longterm profits here. Vasudha Sundararaman, MD and CEO of SBISG Custodial Services, feel that the Revenue Department needs to give a go-ahead to legislative changes proposed by the Chandrasekhar Committee to give FPIs at par treatment with FIIs. She said, for the successful execution of the regime, it would be vital that KYC requirements of SEBI and the RBI to be on the same page. According to the Finance Ministry official, RBI’s KYC norms were for opening bank accounts and were, therefore, simpler. “If the two are aligned, it would cause inconvenience to millions of new bank account holders, but not vice versa. In other words, KYC done by SEBI should be adequate for opening bank accounts,” he added. On the overall structure of FPIs, Sundararaman said, the guidelines by SEBI were clear and had covered all the aspects of FII entry into India. “Approval in flat 10 days is a remarkable step for the success of the FPI regime,” she said. The SBI SG was a member of the committee.n

RBI relaxes norms to raise funds from abroad

he Reserve Bank of India (RBI) has relaxed norms to raise funds from abroad. All types of companies are now allowed to avail trade credit

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facility from overseas for import of capital goods. “On a review, it has been decided to allow companies in all sectors to avail of trade credit not exceeding US$ 20 million up to a maximum period of five years for import of capital goods as classified by Director General of Foreign Trade (DGFT),” according to RBI. The amended policy has come into force with immediate effect. Earlier, only companies in the infrastructure sector were allowed to raise such trade credits. The ab initio contract period of 15 months for all trade credits has also been relaxed to 6 months by the RBI. All other aspects of trade credit policy will remain unchanged and should be complied with, as per RBI. Luxury retail space in India to rise to 1.44% by 2015: Cushman & Wakefield Global real estate consultants, Cushman & Wakefield has estimated that the share of luxury retail space in India will be a modest 1.44% by 2015 as against the current 1% even as total retail malls stock is set to increase by 27% by 2015. The report released on Thursday highlights the changing luxury retail scenario in India. It said that of the total current operational mall space in the organized retail sector across the top seven cities of India is estimated at 66 million sq. ft. of which luxury retail space is only 770,000 sq. ft. The relative reach of luxury brands present in the malls of top seven cities in India is the highest in NCR at 38%, followed by 21% in Mumbai and 17% in Bengaluru. “NCR and Mumbai have been favoured destinations for luxury retailers as they have marked the evolution of mall culture in the country. However, lately luxury retailers have started focusing on Bengaluru as the next upcoming destination with its development as an IT Hub and higher disposable income,” it said. Meanwhile, cities like Pune, Chennai

and Hyderabad are yet to gain traction from luxury retailers in malls as they have relatively low luxury brand reach and are yet to catch up with the mall culture to the extent witnessed in NCR, Mumbai and Bengaluru. A similar trend was observed while analyzing penetration of luxury retailers in each of these cities. On the other hand, the reach of luxury brands in the prominent main streets of the top seven cities in the country was led by Mumbai and NCR each having 30% reach, followed by Hyderabad with 16% reach. Hyderabad emerged as an exception in wake of low vacancy and limited mall supply in the city, thus resulting in increased presence of luxury retailers on its main street.n

India to top global remittances list, again

ndia is expected to top the list of countries receiving remittances this year too. According to World Bank estimates, the country is expected to receive $71 billion by way of remittances in 2013 against $70 billion last year. In India, remittances are larger than the earnings from IT exports, according to the latest issue of the World Bank’s Migration and Development Brief. With the weakening of the Indian rupee, a surge in remittances is expected as non-resident Indians take advantage of the cheaper goods, services and assets back home. Terming the foreign exchange inflows on account of remittances as buoyant, Soumya Kanti Ghosh, Chief Economic Adviser, State Bank of India, said the remittances will have a sobering effect on the current account deficit and support the domestic currency. Promoth Manghat, Vice PresidentGlobal Operations, UAE Exchange said, “Fall in the rupee exchange rate and attractive interest rates on non-resident deposits have helped

drive remittances to India, thereby supporting the balance of payments situation and contributing 3.7 per cent to India’s GDP.” The report said the high cost of sending money through official channels continues to be an obstacle to the utiliaation of remittances for development purposes, as people seek out informal channels as their preferred means for sending money home. The global average cost for sending remittances is 9 per cent, broadly unchanged from 2012. Additional fee While remittance costs seem to have stabilised, banks in many countries have begun imposing additional ‘lifting’ fees on incoming transfers, including remittances. Such fees can be as high as 5 per cent of the transaction value, the World Bank said. Some international banks are also closing down the accounts of money transfer operators because of money laundering and terrorism financing concerns. According to the report , growth of remittances has been robust in all regions of the world, except for Latin America and the Caribbean, where growth decelerated due to economic weakness in the US. In South Asia, remittances are noticeably supporting the balance of payments. In Bangladesh, Nepal, Pakistan and Sri Lanka, remittances are larger than the national foreign exchange reserves. All these countries (most notably, Pakistan) have instituted various incentives for attracting remittances. Globally, the world’s 232 million international migrants are expected to remit earnings worth $550 billion this year ($534 billion last year), and over $700 billion by 2016.n

Austrian Frauscher Launches India Office

n the beginning of July, the Frauscher Group from Austria launches the company Frauscher Sensor Technology India Private India Newsletter • 7

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Limited in Bangalore. In addition to the project-office in Mumbai, there is now an all facility office in Bangalore and a production unit in Mysore being established. The Indian office is responsible not only for supply and project management, but also for installation, commissioning and after sales services. Moreover, production is carried out in collaboration with our own test centre, where the necessary market-specific modifications to the product portfolio can be carried out and tested. Mr. Alok Sinha is the Indian branch Managing Director, a highly experienced manager with an incredible knowledge of the market. “It was Frauscher’s working methods, flexibility and expertise in entering the Indian market that impressed me. New challenges and task definitions are analysed rapidly and resolved without any red tape. I look forward to this new assignment and I’m convinced that, with the measures introduced, we will be a highly attractive and competitive manufacturer of axle counting systems in the Indian market. Frauscher wants to and will undertake a vital role in this line of business”, Alok Sinha explains.n

Germany to finance India’s green energy corridors

ermany has committed financial and technical assistance to India for the Green Energy Corridors. This includes Financial Assistance of Euro 250 Million as Reduced Interest Loan. Technical Assistance includes: ■■ (i) Euro 2 million for IndoGerman Energy Programme – New component on Green Energy Corridors; and ■■ (ii) Euro 2 million for Integration of Renewable Energies into the Indian Electricity System (I-RE). This was disclosed during the Indo-German Annual Negotiation meeting held in New Delhi in July, 2013. Germany has also expressed its willingness regarding concessional loans from KFW of up to one billion 8 • India Newsletter

euro for financing the Green Energy Corridors project under IndoGerman Bilateral Development Cooperation Programme over the next six years. This was discussed during the Indo-German Government Consultations held in Berlin in April, 2013 The Green Energy Corridors project will help in integrating renewable energy into the National grid. It comprises of both inter-state and intra-state schemes for evacuation of power from wind and solar projects.n

India to help Cuba develop Renewable Energy resources

ndia has offered to help Cuba develop its renewable energy resources. This was conveyed by Dr. Farooq Abdullah, Minister of New and Renewable Energy to Mr. Marino Murillo, Vice president of the Republic of Cuba at Havana. Dr. Farooq Abdullah is visiting Cuba along with a high level delegation of experts to explore greater opportunities for cooperation and collaboration between the two countries. Dr. Abdullah also held detailed discussions with Mr. Alfredo Lopez Valdes, the Cuban Minister of Energy and Mines. Dr. Abdullah briefed his counterpart on the energy situation in India and India’s ambitious plans in renewable energy. He explained that India currently has over 29 GW of gridconnected installed capacity using renewable sources of energy and that it has plans over to add over 30 GW more capacity by 2017. He also dwelt on the success of India’s wind programme as well as the significant cost reductions in solar energy through the Jawahar Lal Nehru National Solar Mission (JNNSM). Both Mr. Murillo and Mr. Valdez informed the Indian Minister of Cuba’s strong desire to diversify its energy mix by exploiting its renewable energy resources, especially in wind and bagassebased cogeneration projects. They sought India’s support and expertise in helping Cuba achieve

this objective. Dr. Abdullah recalled India’s long standing and traditionally warm relations with Cuba and said that India has always supported the Cuban nation and its people. He offered India’s support and expertise in setting up renewable projects as well as in capacity building and project preparation. He also urged the Cuban side to take advantage of the Lines of Credit offered by India in setting up renewable energy projects. Earlier Dr. Abdullah was given a brief on the achievements of Cuba in universalizing health care resulting in significant reductions in infant mortality and increase in life expectancy. He also visited the local polyclinic to understand first-hand the health systems and had detailed discussions there.n

Cognizant buys France’s Equinox

ognizant Technology Solutions Corp said it had acquired France-based Equinox Consulting, a financial services consultancy, for an undiclosed sum. The acquisition will strengthen the company’s global consulting capabilities and presence in Europe, it said. The company expects around $40 million annualised revenue from the acquisition but declines to share financial details of the deal. Under the terms of the agreement, around 160 consulting professionals will join Cognizant, which is known for making small-ticket tuck-under acquisitions to bridge the gaps in its offerings. The company has made seven such buyouts in the last three years of which three have been in consulting related. Francisco D’Souza, chief executive of Cognizant, said with the deal, Cognizant is better positioned to help European clients challenge the status quo and unleash new potential across their organisations by creating new business and information technology models. Equinox Consulting provides

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business consulting services across investment banking, asset management, retail banking, insurance, and specialised financial services. Founded in 2004, the company is known for its regulatory consulting expertise. Cognizant Business Consulting (CBC) contributes approximately sixseven per cent to Cognizant’s total revenue and the company has been trying to further expand its presence in the service area as it is considered to be a high-margin business. India’s second largest IT firm, Infosys Ltd, which already gets over 30 per cent of its revenues from Consulting, also acquired Switzerland-based management consultancy firm Lodestone Holding AG last year in $350 million deal. France, Europe reach Experts also believe that the acquisition of Equinox Consulting will also help Cognizant strengthen its presence in France, a non-English speaking geography, and aid in cracking the European market. While the European market offers huge potential, the penetration into the geography is currently much lower. In an interview with Business Standard after the announcement today, Cognizant’s Senior Vice President and Head of Continental Europe and Asia-Pacific Santosh Thomas said, European clients are looking to buy a broader range of services — consulting, applications, infrastructure, and business process services. They are seeking partners who can drive cost-savings and innovation on one integrated platform. The acquisition will also add to the company’s existing presence in the financial services and insurance sector — the largest industry segment for Cognizant — which contributed around 42 per cent to its top line.n

Swedish hygiene products company SCA to set up Rs 145-crore manufacturing facility in India

lobal hygiene and forest products company SCA will set up a manufacturing facility for hygiene products with an investment of about Rs 145 crore in India. The facility is expected to commence production in 2015, a statement from the company said. The brands that SCA intends to launch in India over the coming months are TENA - for incontinence care, Libero baby care, Tempo - for hand and face hygiene and Tork, a range of away-from-home tissues. “SCA aims to grow organically and has extensive experience in the hygiene business, which should help to provide better hygiene for the Indian consumer. The large population and the low penetration of hygiene products provide the potential for SCA’s future growth,” adds Cecilia Edebo - Vice President Consumer Goods SCA India, said in a statement. “In order to achieve this goal we have done thorough research of the Indian market and developed a solid plan that takes into account regional specifics as well as preferences of our target audiences,” Milind Pingle managing director of SCA said. The Swedish company will now compete with Procter & Gamble’s Pampers, Kimberly Clarke’s Huggies and Unicharm’s Mamy Poko Pants in the Rs 4,000-crore baby diaper market in India. “The investment is in line with our strategy of strengthening SCA’s presence in emerging markets”, Jan Johansson, president and CEO of SCA said.n

Bosch to invest Rs 1,500 crore in Karnataka

osch, a leading supplier of technology and services in the areas of automotive, industrial technology, and consumer goods, will invest Rs 1,500 crore ($240

million) over the next seven years in Bangalore, in expanding its manufacturing and research and development capabilities. The 53-billion euro German auto component manufacturer is relocating its six-decade-old manufacturing facility from Adugodi, located in the heart of the city, to Bidadi, which is approximately 32 km from Bangalore city. The existing Bosch premises at Adugodi would continue to house the company’s India head office and the space available on account of relocation will be used for expansion of Bosch R&D Centre, and Robert Bosch Engineering & Business Solutions. “This move to relocate underlines our commitment to India and especially to the state of Karnataka. The developing industrial area in Bidadi will offer larger space and better infrastructure support for our future expansion,” said Steffen Berns, MD, Bosch Ltd. He added that though the current economic situation was tough, the relocation would cater to the growing business needs of the Indian market in the long term. The company has started work on its new facility, part of which will become operational in the next two years. “In spite of the economic downturn we continue our projects in Bidadi and Adugodi and Bosch will invest Rs 1,500 crore in the next seven years in these two projects,” said Soumitra Bhattacharya, joint MD, Bosch Ltd. The relocation will happen in a phased manner with the company investing Rs 250 crore in setting up phase I of the Bidadi plant, which will be operational in the third quarter of fiscal 2015. Around 850 employees from the Adugodi plant will be relocated to the new facility. In all around 4,000 employees will be part of the relocation exercise, which will be completed post 2017. The new facility will initially manufacture several components of diesel fuel injection systems such India Newsletter • 9

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as common rail pumps, common rail and glow plugs. The Bosch Group operates in India through six companies, has a turnover of Rs 12,900 crore and employs 26,000 people. Of that 16,000 people are based in Karnataka.n

Tech Mahindra inks pact with Volvo Cars

ech Mahindra has signed an agreement with Volvo Car Corporation (Volvo Cars). The IT company will provide the automobile company with a service to maintain and develop a range of applications that can increase efficiency and reduce costs. Beginning this month, Tech Mahindra will take care of its application maintenance and development across multiple domains, including manufacturing, product development, marketing, sales and reporting, Vikram Nair, Head (Europe) of Tech Mahindra, said here in a press release. n

eBay launches 2nd data centre in Bangalore

S-based e-commerce major eBay Inc on Thursday inaugurated a new global development centre in India. The development centre, the company’s 16th such centre globally, is spread across 1,50,000 sq ft. “We have continued to expand our footprint across strategic areas,” said Ken Moss, vice-president (technology and science), eBay Marketplaces. “We are looking to tap into the large pool of software engineering talent in Bangalore… We are committed to India as a technology hub and see India’s software engineering talent as a critical driver for our long-term success.” In 2007, the company had set up a 2,50,000-sq-ft development centre in Chennai. That centre currently employs around 2,000 people. As is the case with the Chennai

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centre, the Bangalore facility would house eBay employees, as well as those of its wholly-owned subsidiary PayPal. Through the next three years, the company plans to hire 700 employees for its Bangalore facility. This would raise the company’s Bangalore staff strength to 1,000. Ram Narayanan, general manager, eBay Product Development Centre, said both fresh graduates and experienced professionals would be hired for the new date centre, which would undertake jobs across functions, including product management and analytics. eBay said it had invested “significantly” into the development centre. It however, did not disclose the exact investment. “We invest heavily in the career development of our people. We are hiring technologists with strong product development experience across functions, including platform and application development, architecture, quality engineering, product management, marketing and product analytics, user experience and design and information security,” Moss said. Meanwhile, Karnataka Information Technology and Biotechnology Minister S R Patil said the government expected the first phase of the Bangalore information technology investment region to be commissioned by 2020. The Karnataka government is setting up a 10,500-acre ITIR near the Bangalore international airport, with an estimated investment of about Rs 1 lakh crore. The ITIR is expected to generate direct employment for 12,00,000 and indirect jobs for 28,00,000 people. “It (the ITIR) would be commissioned in two phases. The first phase would be commissioned in 2020 and the second by 2032,” Patil said. n

TCS is now second among world’s most valuable IT firms

fter the recent rally in its stock price, Tata Consultancy Services

(TCS) is now the world’s secondmost-valuable IT services company — ahead of Accenture and HewlettPackard but behind IBM. The Indian firm is currently valued at around $60 billion, compared with Accenture’s $50.5 billion and HP’s $43 billion. IBM remains the leader, with a market capitalisation of $202.6 billion as at the end of Monday’s trading (see table). TCS, which accounted for nearly 47 per cent of the IT industry’s combined market cap and nearly four-fifths of the total net profit of listed IT companies on the BSE-500 index last financial year, is miles ahead of its Indian peers. Five years ago, the company accounted for 28 per cent of the total market capitalisation of the IT industry. Analysts attribute this to TCS’superior valuation on the bourses. “Investors are willing to pay a premium for TCS, as it has consistently been among the fastest-growing firms in the sector. Besides, it has been able to maintain its profitability ratios despite macroeconomic challenges,” says Shashi Bhushan, senior research analyst (institutional equities), Prabhudas Lilladher. These factors seem to have made TCS one of the most expensive technology companies in the world at present, with its market valuation much higher than its revenue and profitability. The company has traded at around 27 times its net profits over the past 12 months. In comparison, Accenture, TCS’ closest global rival, trades at around 17 times its latest earnings per share, while IBM trades at 12.4 times (see table). Analysts expect TCS to maintain the growth momentum and close the gap with its bigger global rivals. “TCS is one of the fastest-growing IT services companies globally and we expect it to maintain the current growth momentum,” says Angel Broking Research Analyst Ankita Somani, who has a buy rating on the stock. She attributes TCS’ success to its execution capability and its wide

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presence in key geographies. “The company was one the first to recognise the importance of having a global footprint and it scaled up its geographical presence quite rapidly. It is now reaping the benefits,” she says. It allowed TCS to diversify its revenue streams and grow faster when key markets in North America and Europe slipped into recession after the 2008 global financial crisis. North America, the traditional big market for India’s IT exporters accounted for 52 per cent of TCS’ revenues in 2012-13 — and a fifth of the revenues came from fastgrowing emerging markets in Latin America, Asia-Pacific (including India and West Asia) and Africa. The rest was accounted for by the UK — its second-largest market — and continental Europe. Its wide spread makes it one of the most diversified technology companies in India in terms of geographical footprint. TCS is already one of the world’s largest employers in its segment, with nearly 280,000 employees as at the end of June this year. In comparison, Accenture has an employee strength of 266,000. TCS, however, trails IBM, which remains the largest IT company with a staff of 430,000 at the end of last calendar year. In terms of revenue earned per employee, however, TCS’ global peers are ahead. With similar headcount, Accenture’s revenues last year were nearly twice that of TCS, while IBM’s was nearly nine times more.n

Tech Mahindra sets up engineering college with French university tie-up The Mahindras have diversified into the higher education. Its group company, Tech Mahindra, has

established an engineering college in association with the 200-year-old French university, Ecole Centrale and Jawaharlal Nehru Technological University. The institute, which has come up at Tech Mahindra’s Bahadurpally property here, will offer a dual degree. Students will get a B.Tech. degree from JNTU and after completing the fifth year, they would get M.Tech from the French university. Vineet Nayyar, Executive ViceChairman of Tech Mahindra, said though the country had scores of engineering colleges, there is vacuum when it comes to quality. Though the country has some good colleges, they have failed to meet global benchmarks. After consolidating the activities of college, Tech Mahindra would set up satellite centres in cities such as Jaipur, Pune, Chennai and Goa. Mahindra Ecole Centrale, which will begin courses from the next summer, will take students based on their performance in the common IIT entrance examination, C. P. Gurnani, Chief Executive officer and Managing Director of Tech Mahindra, said. The fee structure for the courses, however, has not been decided yet. The curriculum would conform to the norms the AICTE (All-India Council for Technical Education). The college, however, is not to be restricted to technological studies only. There would be several other streams such as energy, infrastructure and humanities. “The college will have a modern and international academic programme that blends basic scientific and technical education with contemporary industry practices,” Nayyar said. “Our integrated curriculum will develop students with the unique

ability to adapt to global engineering challenges and new technologies that will shape our future and also to master the complexity of multinational organisations,” he said.n

Banks free to open branches in Tier-1 cities: RBI

anks have been given conditional freedom to open branches in tier-I cities without seeking the Reserve Bank of India’s prior approval in each case. The RBI, however, linked the measure to the number of branches a bank would open in an un-banked or under-banked centre. The central bank has clarified that the number of branches opened in tier-I centres cannot exceed the total number of branches opened in centres that do not have any at present. If a bank is unable to open all the tier-I branches it is eligible to in a particular year, then it can open these branches in the subsequent year, the central bank added. Earlier Norms Similarly, banks that are unable to open branches in Tier II to Tier VI centres during the financial year must necessarily rectify the shortfall in the next financial year, the RBI said. As per the earlier guidelines, all scheduled commercial banks were allowed to open branches in Tier-II to Tier-VI centreswithout taking RBI’s permission in each case. Based on data given by banks to the RBI in the Basic Statistical Returns, which provides data on a number of key parameters of banks, it is estimated that rural India had only 7 branches per 100,000 adults in 2011. In sharp contrast, most of the developed economies have over 40 branches. n India Newsletter • 11

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NOTICE FOR INDIAN STUDENTS IN AUSTRIA New Step by Step Guide makes international student life in Vienna easier By Oliver Rosenauer International students encounter a great deal of challenges when they decide to study abroad. Aside from the usual language barriers there are a series of questions related to jobs, university registration concerns and how to settle into life abroad. In Vienna a group of former Webster University students decided to dramatically change this situation. Alexander Karakas, Richard Ludmer and Martin Mössmer launched the Vienna Start-Up „Feels Like Home” http://feelslikehome.at/. The company offers student related services, which shares information about various aspects of a student’s life and provides personal support. What started as giving personal advice to friends has become one of the first spin-offs of Webster University Vienna http://www. webster.ac.at/ The founders aim to offer their ideas and services to the large pool of almost the 55.000 international students in Vienna. In order to

achieve their goal, they had to design a tool, which could handle the expected number of requests without any concessions to the quality of the services. Step by Step http://stepbystepguide. eu/ a new free platform, whose roll out was launched this month was born. Students now can create and customize their own account for free - according to their personal needs. Designed as a “virtual guide to Vienna,” students can plan and organize their studies even before leaving their home countries. Once in the country a variety of events provide opportunities for socializing and deepening contacts. An idea like this doesn’t just need personal commitment and effort, but also calls for promotion by powerful partners. Soon other contributors like the MODUL University Vienna http://www. modul.ac.at/ were spotted. The software tool offers four different steps from Planning Phase

to Living Phase, either must-dos or can dos, which are defined and explained in an easy to use selfexplanatory way. The young entrepreneurs are part of the extensive network of partners such as Margaret Furuta founder of Vienna Home Furnishing, www. viennahomefurnishing.at which offers different relocation services from furniture help to redesign or the coordination of the whole moving process. Private institutions and firms like “Erste Bank” http://www.sparkasse. at/erstebank/ or the insurance company “UNIQA” http://www. uniqa.at/uniqaat/ are also interested in this new target group and offer special services to incoming students. This broad variety of services and partners is both a creative and innovative approach to helping internationals make their study abroad experience much easier.

INTERVIEW

urich-based ABB's group executive committee member Brice Koch, who heads its $8billion power systems business, is 12 • India Newsletter

upbeat about business prospects in India. For ABB India, the business accounted for 30% of its Rs 7,470-crore revenues in 2012. In an interview, he said the company is optimistic despite uncertainty and hurdles, particularly in the power sector. Edited Excerpts: Q: What are your interests in India amid changing scenario in power sector? A: We see increasing complexities of grid systems in India since you neither know the power consumption nor the generation as share of unpredictable renewable energy is on rise. So you need to put intelligence in the grid. In India, experienced engineers put their ear or coin on grid components

to assess their working conditions based on level of noise. But it is not the solution.

The point here is: can ABB go further and faster in India? And the answer is yes, I am sure we can. By Brice Koch, Head of Power Systems division, ABB

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In past couple of years, ABB acquired two companies in the US and Australia and we are ready to launch their software that will identify component-wise need for maintenance. Q: How attractive is Indian market for ABB for procurement when rupee is depreciating? A: Out of 20,000 people of power systems division worldwide, as many as 2,500 are working in India that barely figures in our top-five markets. We are increasing engineering capacity in India because combined with opportunities in the local market, it produces half a million

English-speaking engineers every year. Favourable exchange rate gives you an advantage, but it is dangerous to bet whole strategy on it. So the point here is can ABB go further and faster in India? And the answer is yes, I am sure we can. This is the question we need to address during our soon-tobe-held annual budget exercise as ABB controls 75% in ABB India. Q: Does the situation in India worry you? A: It does not. There is uncertainty of one kind or the other in every part of the world. It is a matter of being prudent and not panicking.

Q: How do you look at India as an investment destination? It is not relevant what we spent where. We have an engineering centre with 500 engineers in Chennai that manages projects for worldwide. It is about giving much more responsibility to a country. We see India as high-quality place. So the impact on our business is huge, irrespective the size of our investments. We want India to develop more products. We strongly believe in India in terms of its market and competencies. n

INDUSTRY The Indian Ports Industry

ndia has a coastline which is more than 7,517 km long, interspersed with more than 200 ports. Most cargo ships that sail between East Asia and America, Europe and Africa pass through Indian territorial waters. There are 13 major and about 200 non-major ports in the country. The total cargo traffic in India stood at 911.5 million metric tonnes (MMT) during FY12 and is expected to touch 1,758 MMT by FY17. Port traffic at major and non-major ports in India is set to rise at a compound annual growth rate (CAGR) of 22 per cent and 5.5 per cent respectively over FY12-14. The rising demand for port infrastructure, strong growth potential, favourable investment climate, and sops provided by state governments provide private players with an opportunity to enter the Indian ports sector to serve the spill-off demand from major ports. During FY13, 29 projects are scheduled to be executed adding capacity of 208 million tonnes per annum (MTPA) at the cost of US$ 8.8 billion. Non-major ports are also expected to benefit from strong growth in India’s external trade. The Government of India (GOI)

has initiated National Maritime Development Programme (NMDP), an initiative to develop the maritime sector with an planned outlay of US$ 11.8 billion. The government has also allowed foreign direct investment (FDI) of up to 100 per cent under the automatic route for projects related to the construction and maintenance of ports and harbours and a 10-year tax holiday for enterprises engaged in ports. Ships are one of the oldest and most efficient modes of transportation for bulky goods and long distances. With 13 major ports and more than 180 minor ports, India’s 7, 517 km long coastline plays a vital role in maritime transport along with offering huge international trade capabilities. The sector is on a high-priority list for the Government as it is one of the components of national infrastructure. Being a focus area for development and refurbishment, Indian ports are increasingly becoming an attractive investment option for investors scouting for opportunities in Indian market. The current port scenario in the country offers a huge scope for expansion of international maritime transport; both for passengers and cargo handling. n

Key Statistics ■■ India’s 12 big ports, which account for about 58 per cent of the total cargo shipped through the country’s ports, handled 137 million tonnes (MT) of goods in the first quarter of FY14. ■■ Container cargo volumes at these 12 ports stood at 1.87 million standard containers during the reported quarter, according to data by the Indian Ports Association. n

Recent Developments ■■ Shipping Corporation of India (SCI) has signed a memorandum of understanding (MoU) with GAIL India to co-operate for transportation of LNG sourced by the latter from the US. The two entities shall align their efforts for the transportation of 5.8 MT per annum (MTPA) of LNG being sourced by Gail from Sabine Pass and Cove Point terminals in the US. ■■ Dubai-based DP World has been awarded a contract to develop the Jawaharlal Nehru Port Trust (JNPT)’s Rs 600-crore (US$ 101.11 million) container terminal in Navi Mumbai. DP World is a leading marine terminal operator and its Indian subsidiary Nhava Sheva would be building this standalone container handling facility under this 17-year concession agreement. The new India Newsletter • 13

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development, to be executed on design, build, finance, operate and transfer (DBFOT) basis, is expected to ease congestion at JNPT. ■■ India’s first indigenous aircraft carrier (IAC), being developed at the Cochin Shipyard, will be launched by August 2013. The 40, 000 tonnewarship machinery is expected to be operational by 2018. It is done with major fittings and underwater work. Now the superstructure, the upper decks and out-fittings are to be worked upon. n

Government Initiatives The Cabinet Committee on Economic Affairs (CCEA) has recently given its nod for setting up of new major ports in the states of West Bengal and Andhra Pradesh. The proposal envisaged the following highlights■■ The new major port at Sagar Island in West Bengal would be under Public Private Partnership (PPP) model. ■■ Transaction advisers and legal consultants would be appointed to commence the bidding process for award of the project and to finalise the project structure in consultation with the State Government of West Bengal and the Planning

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Commission ■■ Techno-economic feasibility reports for the new major port at Dugarajapatnam locations would be commissioned, and ■■ An Empowered Committee of Secretaries (ECS) would be formed to take appropriate decisions in regard to the project structuring, as well as other implementation related issues. The CCEA has also given its nod for the project for upgradation of existing facility and creation of a new facility at Visakhapatnam Port Trust for iron ore handling in two phases on DBFOT basis at an estimated cost of Rs. 845.41 crore (US$ 142.46 million). The project, to be executed through PPP mode, will create additional employment opportunities and lead to the socio-economic development of the region. Phase I is expected to be completed by June 2015 while Phase II will be done within two years of its commencement. Meanwhile, Shipping Minister GK Vasan has indicated that the Government will soon decide upon the new tariff guidelines for major ports in India, which is expected to provide autonomy to the port

terminals to fix market linked tariffs. The draft tariff guideline is awaiting feedback from stakeholders. The ministry has also set itself a target for FY14 to award 30 port projects involving an outlay of about Rs 25,000 crore (US$ 4.21 billion). These projects, 19 of which will come under PPP mechanism, will build an additional capacity of 288 MTPA. The Government had awarded 32 projects worth Rs 6,765 crore (US$ 1.14 billion) in FY13 which will add a capacity of about 137 MTPA. The trade between Bangladesh and India is largely dependent on land ports and hence the countries have recently decided to develop their land ports for a cost-efficient and expeditious trading between the two of them. n

Road Ahead Indian port sector is poised to mark great progress in the years to come. It is forecasted that by the end of 2017 port traffic will amount to 943.06 MT for India’s major ports and 815.20 MT for its minor ports. Moreover, India plans to triple cargohandling capacity at its ports to 3.2 billion tonnes by 2020 by investing private funds worth Rs.3 trillion (US$ 50.56 billion). n

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EXPERT BUSINESS ADVICE The article below was extracted from Dezan Shira & Associates’s publication entitled “India Briefing”. For further corporate assistance, consider contating Dezan Shira & Associates, a specialist in foreign direct investment practice, providing corporate establishment, business advisory, tax advisory and compliance, accounting, payroll, due diligence and financial review services to multinationals investing in emerging Asia. For further details or to contact the firm, please email Mr. Olaf Griease under olaf.griese@dezshira.com or visit www.dezshira.com

Sourcing from and Selling to India

s India’s total merchandise trade tripled from US$252 billion in 2006 to US$794 billion last year, the business of import/export with Indian firms has become much more popular. However, the rising monetary numbers have brought with them an increasing number of legal and administrative reforms and considerations for import/ export-related businesses. To introduce this issue of India Briefing, we will highlight supplier due diligence issues, import/export regulatory updates, the importance of tax residency certificates when selling to Indian companies and other relevant points to consider when setting up an offshore trading company for the India market. n

Supplier Due Diligence When conducting DD, it is wise to create a checklist of necessary information that will allow you to make a judgment call on the status of your supplier and their ability to deliver as promised. These documents may include public and private documents such as financial statements, account information, credit checks and checks on legal status, ownership, directors and scope of business. Unlike China, India maintains an impressive public records system that you can use to ascertain the facts about your potential supplier.

As such, it is crucial that you obtain any and all information necessary to establish that your supplier is both creditworthy and in good financial standing. A typical DD report contains information pertaining to the following, at the very least: ■■ Company and personnel information (including share capital and taxation issues); ■■ Corporate structure; ■■ Directors and shareholders, their interests and conflicts (if any); ■■ Financial information and status; ■■ Licenses, permits, approvals and specific statutory compliance; ■■ Any previous court orders or litigation issues against the company in question; ■■ Insurance – quality of insurance coverage; and ■■ Examples of previous clients, such as references. An India-based professional services firm will be able to help you with these due diligence issues. n

India’s Regulatory Environment - How This Affects International Sourcing Companies Paying attention to the most updated laws and policies in India is extremely important as Indian laws are subject to changes on an annual basis. For example, India’s export/import (EXIM) Policy is updated annually each March 31st,

and the subsequent modifications, improvements and new schemes become effective starting the following day on April 1st (India’s financial year is April-March). Also, since Indian exports and imports are regulated by Foreign Trade Act, 1992, the Indian government has close control over such activities and transactions – which also makes it doubly important to conduct a thorough DD investigation and to be completely aware of the specific issues pertinent to your business activities. For instance, when conducting an import/export business in India, it is important that you take note of all of the import/export related issues associated with your business. At the very least, you’ll need to know whether the goods to be imported are classified as either restricted, canalized or prohibited; or if the goods to be exported are classified as restricted, prohibited or only for state trading enterprises (STEs) (i.e., items that can only be exported by designated STEs as subject to India’s EXIM policy). You’ll also need to obtain the following documents to conduct import/export activities in India: ■■ Import/export license; ■■ Customs declaration form; ■■ Dispatch note; ■■ Invoice; ■■ Certificate of origin; and ■■ Any other relevant documents. India Newsletter • 15

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The above documents are required to import/export items to and from India, and such activities are prohibited without them. You should also be aware of the relevant duties imposed on the items to be imported/exported as specified by Customs Act, 1962 and Customs Tariff Act, 1975. The basic customs duties vary from 5-40 percent depending on item. Please also be aware that the duty rates are periodically amended under the Finance Act. India’s HS Codes system with all applicable tariff rates can be viewed at www.eximguru.com/hscodes/. n

country outside India or specified territory outside India, as the case may be, is obtained by him from the Government of that country or specified territory.”

Selling To India

■■ (iii) Nationality individual);

International businesses looking to sell products to Indian companies should be aware that the Indian buyer has the right to request a Tax Residency Certificate from the overseas vendor in order to process the related payment (s). Understanding this concept is important as it may allow the vendor to claim additional benefits under India’s various treaties and agreements. Specifically, Section 90(4) of India’s Income Tax Act states: “An assessee, not being a resident, to whom an agreement referred to in subsection (1) applies, shall not be entitled to claim any relief under such agreement unless [a certificate of his being a resident] in any

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Tax residency certificates are issued by various national tax bureaus as per their own specific format. However, the Indian government’s guidelines require that the following information be mentioned on the certificate: ■■ (i) Name of the assessee; ■■ (ii) Status (individual, company, firm etc.); (in

case

■■ (iv) Country or specified territory of incorporation or registration (in case of others); ■■ (v) Assessee’s tax identification number in the country or specified territory of residence ■■ (vi) Residential status for the purposes of tax; ■■ (vii) Period for which certificate is applicable; and

the

■■ (viii) Address of the applicant for the period for which the certificate is applicable. Tax Residency Certificates can be obtained from the relevant tax departments in the country of origin. n

Using Offshore Incorporations for India Trade Many international businesses, even small ones, use so-called “offshore” company jurisdictions for trade purposes to take advantage of a certain country’s regulations (e.g., lower taxes, etc.). For example, utilizing a Hong Kong-based company for the purposes of trading with China is advantageous due to Hong Kong’s excellent business and financial services environment and its status as a free port – which entitles traders to lower tax rates. The same type of structure can also be used with regard to Indian trade, and it should be noted that India has numerous free trade and double tax treaties in place with countries throughout the world that can all be used to a trader’s advantage. See below a quick visual of India’s DTAs: In addition to India’s above-listed DTAs, it should also be noted that the country maintains a significant free trade agreement with the Association of Southeast Asian Nations (ASEAN) that reduces tariffs on thousands of imported/ exported products. This 10-member trade bloc – which is made up of Indonesia, Singapore, Malaysia, Laos, Cambodia, the Philippines, Vietnam, Thailand, Myanmar and Brunei – is geographically close to India and includes some of India’s largest trading partners in Asia. n

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TRADE FAIRS INTERESTED IN VISITING A TRADE SHOW IN INDIA? In case your company is interested in visiting a tradeshow/B2B event in India, be it one listed here or another one that came to your attention, get in contact with us via marketingofficer@indianembassy.at to get more information about possible assistance/subsidies.

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To open the calendar of events, scan the QR-code with your smartphone or access

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INVEST INDIA Federation House, Tansen Marg New Delhi—110 001 0091-11-23765085, 23487278 investindia@ficci.com www.investindia.gov.in

nvest India is the country’s official agency dedicated to investment promotion and facilitation. Set up as a joint venture between FICCI (51% equity), DIPP (35% equity held by the Department of Industrial

policy and Promotion, Ministry of Commerce & Industry) and State Governments of India (0.5% each), its mandate is to become the first reference point for the global investment community. It provides granulated, sectorspecific and state-specific information to a foreign investor, assists in expediting regulatory approvals, and offers hand-holding services. Its mandate also includes assisting Indian investors make informed choices about investment opportunities overseas.

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TOURISM Adventure and Activities India offers you unlimited choices. For here, action and tranquility are two sides of the same coin.While imposing peaks defy you to conquer them; gentle mountains invite you for a leisurely trek. The rivers beckon you to taste the thrill of river running or try your hand at catching some trout. The clear blue waters of India’s island beaches are ideal for scuba diving and snorkelling, or for a languorous soak in the sun.India’s landscape is blessed with terrains that make it a perfect destination for the adventurous traveller. With the snow-laden Himalayas in the north and the sea on all three sides of the Indian peninsula, the diversity in the landscape makes for exciting adventures in all parts of the country. ■■ Rock climbing rocky cliffs and mountain sides of Manali Valley and Dharamshala find many enthusiasts. Lado Sarai in Delhi, Dhauj and Damdama Lake near the Capital are the best known climbing destinations in the country. Bangalore is the centre of many rock-climbing destinations like Ramanagaram, Badami and Raogudhu. Hampi in Karnataka has some of the best granite rocks in India providing the climbers opportunities to test their skills. ■■ Mountaineering Take your pick from the Himalayas, the Aravallis, the Sahyadris Satpura range (Gujarat), Manali (Himachal Pradesh) and the Garhwal and Kumaon regions in Uttaranchal. Trained climbers will find many unsealed peaks above 10,000 feet waiting to be conquered. ■■ Trekking Fruit laden orchards, profusion of flowers, pine and cedar forests, gurgling streams, rare birds. Some popular treks are in the Kullu Manali valley and the Kumaon-Garhwal regions of Uttaranchal. In the east, treks in Sikkim and Darjeeling are a must while the Sahyadris with its old 22 • India Newsletter

forts reward the trekker in the west. ■■ Hang Gliding Excellent hang gliding locations at Kasauli, Dharamshala, Satara, Sinhagarh, Shimla, Pune, Kamshet, Udhagamandalam, Mhow, Indore, Mysore and Shillong. Yumthang in north Sikkim and Jorethang in south Sikkim also offer an opportunity to try this adrenaline-pumping adventure sport. Paragliding a combination of hang gliding and parachuting, India has immense paragliding opportunities in the Himalayas and the Sahyadris. In fact, distance world records have been set in international competitions held in India. ■■ Mountain Biking Himachal Pradesh has splendid biking opportunities, including the highest road pass in the world. Biking to the wild and barren ‘moonscape’ of Ladakh is also an unforgettable experience. Good camps are found along routes, enabling the traveller to interact with local cultures. ■■ Angling Himachal Pradesh with its rivers and their numerous tributaries are an angler’s paradise with katla, rohu, trout and mahseer as the prized catch. Bhimeshwari, near Mysore, is also a treasure trove of mahseer if you are travelling in South India ■■ Camel Safaris Transport yourself into a by gone

royal era by indulging in a camel safari in the rustic desertland of Jaisalmer in Rajasthan. Rajasthan Tourism Development Corporation (RTDC) and many other companies offer these safaris which offer stay at camps in the Thar desert and an opportunity to traverse its golden sands. Often, fortified cities of Jodhpur, Bikaner, Shekhawati and Pushkar combine an entire trail. Also try the tiger, elephant, horse, yak and jeep versions of the Safari. ■■ Ballooning New Delhi’s Safdarjung Airport provides some great opportunities float past monuments and one can also view the Taj Mahal from a balloon flight. ■■ Water Sports The coral reefs and blue Lagoons of lakshadweep and Andaman islands are the best locations for Scuba Diving and Snorkelling. Head for Goa where many beaches offer sports like jet-skiing, parasailing, scuba diving and boating. Cruise on calm waters in a shikara in Kashmir or its southern equivalent, the Kettuvallom, in Kerala. This is one of the best ways to view scenic beauty and make your holiday magical. India offers adventurous souls rivers,mountains,forests deserts and beaches to find theirthrills. And if that isn’t enough, there is always the sky n

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Embassy of India, Vienna

INDIAN MOVIE EVENING AT THE EMBASSY Due to limited capacity, seats will be given on a first come, first served basis. Therefore, you are highly encouraged to reserve your seats online at www.indianembassy.at, via email under infoasstt@indianembassy. at or via phone at +43 1 505 866633 (Ms. Lily John).

Raavanan

ev Prakash Subramaniam is assigned the task of apprehending a bandit, Veeraiya, and accordingly relocates with his wife, Ragini. Shortly thereafter, while investigating another matter, he will be notified that his wife has been abducted by Veeraiya. He, in the company of several wellarmed policemen, and guided by a forest guard, will relentlessly pursue this elusive bandit who is both revered and feared by the local residents; while Ragini will find out the real reason behind her abduction. ■■ Director: Mani Ratnam ■■ Stars: Vikram, Prithviraj

Aishwarya

Rai,

■■ Genre: Action / Adventure ■■ Duration: 134 min ■■ Release Year: 2010 ■■ Language: Tamil ■■ Subtites: German

Showtime October 25th, 18:00 Indian Embassy Business Centre (1st Floor, Kärntner Ring 2, 1010 Vienna)

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INDIA IN AUSTRIA Exhibition “Moderns” Works from the Lalit Kala Akademi Collection, New Delhi

he University of Applied Arts Vienna showcases the Indian modern period in the exhibition titled “Moderns, Works from the Lalit Kala Akademi Collection, New Delhi.” It is the first exhibition of its kind in Austria, comprising of more than 50 works of the Modern period in India. Located in a foremost public institution in New Delhi, this onsite collection was launched in the fervour of the postindependence era, incorporating the key representatives of the Indian modernist movement. More than 50 artefacts from the collection plus documentary films from the State Archives of India highlight the subject in the renowned exhibition spaces of Heiligenkreuzerhof, Vienna. The exhibition “Moderns” mainly presents works from roughly three decades (1950s - 1970s), the emphasis lying on painting and sculpture. Among the artists selected by the curator of the show, Uma Nair, are internationally renowned names like M.F. Hussain (1915 - 2011), Tyeb Mehta (1925 - 2009), F.N. Souza (1924 - 2002) or Documenta IX and XII participants Nasreen Mohamedi (1937 - 1990)

and Bhupen Khakkar (1934 - 2003). Not less significant are the works of Ram Kinkar Baij, N.S. Bendre, Bikash Bhattacharjee, Rameshwar Broota, Jayasri Burman, Dilip Kumar Das, Bimal Dasgupta, Biren De, Ambadas Gade, V.S. Gaitonde, Balakrishna Guru, Ganesh Haloi, Zarina Hashmi, K.K. Hebbar, Somnath Hore, P.V. Janakiram, Sanat Kar, Latika Katt, Devjani Krishna, Kanwal Krishna, K.S. Kulkarni, Ram Kumar, T.R.P. Mookiah, Sailoz Mukherjee, M. Reddapa Naidu, Badri Narayan, K.S. Radhakrishnan, Krishna Reddy, G.R. Santosh, Paritosh Sen, Gulam Mohammed Sheikh, Arpita Singh, S.G. Vdiyasagar Sthapathy, K.G. Subramanyan, J. Swaminathan or S.G. Vasudev. These artists / professors who have had immense sociopolitical impact in their times, have been eminently influential for artist generations to follow. The exhibition is based on an agreement of cultural exchange between the University of Applied Arts Vienna and the Lalit Kala Akademi, New Delhi. ■■ Opening Tuesday, 15th of October, 2013 at 6:30 pm ■■ Duration 16 October - 8 November, 2013 ■■ Venue Refektorium & Sala Terena, Heiligenkreuzerhof, Schönlaterngasse 5, University of Applied Arts Vienna, 1010 Vienna ■■ Further Information www.dieangewandte.at

Symposium in the framework of the exhibition “Moderns” - Works from the Lalit Kala Akademi Collection, New Delhi

space. It will cover international contributions and perspectives on the subject of Modernism, emphasising exchange and reflection both on artistic and theoretical levels. In terms of a contemporary inventory, art historical aspects of Indian art will be given the same attention as positions of theoreticians, collectors and curators on the subject of modernism. The speakers at the symposium are Peter Weibel, Director of the Center of Art and Media, Karlsruhe, artist, media theoretician, Vienna; Parul Dave Mukherji, art historian, Dean of the Department of Arts and Aesthetics, Jawaharlal Nehru University, New Delhi; Girish Shahane, art critic, curator, writer, Mumbai; Sabine Vogel, art critic, curator, Vienna and Eleonore Chowdhury Haberl, art collector, journalist, Vienna. The symposium will be be held in English, moderated by Angelika Fitz, author and curator, Vienna. ■■ When Monday, 28 October, 2013 - 2PM Duration: 2 pm – 7 pm ■■ Where Refektorium & Sala Terena, Heiligenkreuzerhof, Schönlaterngasse 5, University of Applied Arts Vienna, 1010 Vienna ■■ Further Information www.dieangewandte.at Both the Exhibition “MODERNS” - and SYMPOSIUM in the framework of the same are organized by the University of Applied Arts (Die Angewandte) in collaboration with the Lalit Kala Academy.

n an initiative taken by the University of Applied Arts Vienna, a symposium accompanying the exhibition will be held in the exhibition India Newsletter • 25

Embassy of India, Vienna

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India Newsletter â&#x20AC;˘ 27

Embassy of India, Vienna

SONGS FROM THE SILK ROAD – Living Legend Shujaat Hussain Khan live in Vienna

■■ When Monday, 14th Oct, 20:00 ■■ Where Sargfabrik, Goldschlagstrasse 169, 1140 Wien ■■ Further Info Seat ticket: 25eur | Standing: 18eur

rammy-nominated Virtuoso Shujaat

SitarHussain

Khan, son of Ustad Vilayat Khan, is today considered the world’s finest Sitar player. His family invented the Gayaki-style of Indian music in which the instrumentalist recreates

this energy that the two musicians still transport with the classics of the fusion, even decades after their first joint tour in the various concert halls

the human voice with his instrument with all nuances and colors. Apart from that Shujaat Khan is the only Sitar master worldwide who plays Sitar and sings simultaneously. His vocal renderings of the Sufi songs of Amir Chosrau (1253-1325), Kabir

of the world. ■■ Artists John McLaughlin | Guitar Zakir Hussain Tabla | Percussion

(1440 - 1518) und Bulleh Shah (1680– 1757) are legendary. Shujaat Khan has released more than 60 albums and received all major Indian music awards. He will be accompanied by the New Delhi-based tabla masters Amit Choubey and Sapan Anjaria. The SONGS FROM THE SILK ROAD is organized by the Austrian-Indian Institute (www. oeii.co.at) in Collaboration with Indian Embassy Vienna and Indian Council of Cultural Relations.

Shankar Mahadevan | Singer V. Selvaganesh | Kanjira, Ghatam, Mridangam U. Shrinivas | Mandoline ■■ When Sunday, 17 November, 2013 - 7.30PM ■■ Where Wiener Konzerthaus - Großer Saal Lothringerstraße 20 1030 Vienna ■■ Further Information www.konzerthaus.at

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Remember Shakti «Celebrating 40th Anniversary of Shakti»

which the two selected for their project and it isthis energy that the two musicians still transport with the classics of the fusion, even decades after their first joint tour in the various concert halls of the world. ■■ Artists John McLaughlin | Guitar Zakir Hussain | Tabla, Percussion Shankar Mahadevan | Singer V. Selvaganesh | Kanjira, Ghatam, Mridangam U. Shrinivas | Mandoline ■■ When Sunday, 17 November, 2013 - 7.30PM ■■ Where Wiener Konzerthaus - Großer Saal Lothringerstraße 20 1030 Vienna ■■ Further Information www.konzerthaus.at

THE SOUL OF SUFI – Abhay Rustum Sopori & Group The Mystic Music of Kashmir

estern guitar music with roots in jazz and rock meets classic Indian tabla player - that was a sensation in 1975 and today it is still, “Remember Shakti” with John McLaughlin and Zakir Hussain. In a worldwide tour, the two celebrate with singer Shankar Mahadavan, Selvaganesh Vinayakram, Kanjira and Uppalapu Shrinivas on mandolin their decades-long friendship. Since the 1970s, there is a special connection between McLaughlin and Hussain. “We are like two souls, two thoughts, a story,” Hussain told the special magic of “Shakti”. “Goddess of Power” is the translation of the Sanskrit word,

BHAY SOPORI is the youngest recipient of the Jammu & Kashmir State Award as there is no other Indian musician who works so consequently for the preservation of the ancient cultural heritage of Kashmir. On Saturday, 7th September 2013, Abhay Sopori and his ensemble of 15 musicians from Kashmir shared the stage with Zubin Mehta, celebrated violonist Julian

Rachlin and the Bavarian State Orchestra in the Royal Gardens in Shrinagar, Kaschmir. The historical peace concert, the first concert of a Western orchestra in Kashmir and a life-long dream of Zubin Mehta, commenced with a composition of Abhay Sopori and was then followed by works of Beethoven, Haydn and Tschaikowsky. The Austrian-Indian Institute is now bringing Santoor maestro and composer Abhay Sopori and his group to Austria! Together with the Sufi vocalist RAGINI RAINU, a student of Abhay’s father PANDIT BHAJAN SOPORI, founder of the SUFIANA GHARANA of Indian Music, and four accompanying musicians they are considered to be today’s most innovative and outstanding musical formation from Kashmir. Their ecstatic Sufi music never fails to fully enthrall the audience. ■■ Musicians Abhay Sopori | Santoor Ragini Rainu | Sufi Vocals Mithilesh Jha & Pradip Sarkar | Tabla Parveen Sethi | Percussions Shubham Sarkar | Tanpura ■■ When Monday, 28. Oct. 2013, 20:00 ■■ Where Sargfabrik, Goldschlagstrasse 169, 1140 Vienna ■■ Further Information Entrance: Seat Ticket – EUR 25,- / Standing Ticket – EUR 18,The THE SOUL OF SUFI is organized by the AustrianIndian Institute (www.oeii.co.at) in Collaboration with Indian Embassy Vienna and Indian Council of Cultural Relations.

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Embassy of India, Vienna

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NOTICE BOARD EMBASSY’S LIBRARY ■■ The EMBASSY’S library is opened mondays and wednesdays from 11am to 1pm without appointment. ■■ For scheduling an appointment outside the opening hours, please contact the information assistant under infoasstt@indianembassy.at or 01 505 8666 33

BUSINESS CENTRE ■■ The EMBASSY’S Business Centre is opened DAILY from 11am to 1pm without appointment. ■■ For scheduling an appointment outside the opening hours, please contact the commercial wing under the contacts given below. ■■ Marketing Officer: marketingofficer@indianembassy.at or 01 505 8666 30 ■■ Marketing Assistant: marketingassistant@indianembassy.at or 01 505 8666 31

STUDENTS WELFARE OFFICER ■■ Mr. Pawan T. Badhe, Third Secretary in this Embassy has been designated as Officer to look after welfare of Indian Students in Austria and Montenegro. ■■ His contact details are: +43-1-505866614 and cpolitical@indianembassy.at

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