India newsletter 10 2014 by Indian Embassy Vienna

INDIA NEWSLETTER www.indianembassy.at

Published by the Embassy of India, Vienna Year 4 • Issue 46 • October 2014

The new Government has prepared a five pillar strategy to drive India’s growth, which offer multiple avenues of collaboration and investments

■■ Infrastructure Development

■■ Manufacturing Growth

■■ Skill Development

■■ Energy Sufficiency

■■ Improved Business Environment India Newsletter • 1

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NEWS FLASHES

The present area under cotton cultivation in India has reached a record high of 12.25 million hectares (MHa) and is expected to reach 12.5 MHa.

Exports of fish and fish products from India reached a volume of 983,756 tonnes during 2013-14 and were valued at Rs 30,213.26 crores (US$ 5 billion).

The Indian tablet market grew by 9 per cent year on year during the second quarter of 2014 with shipments reaching 0.86 million units.

Foreign Portfolio Investors (FPIs) have invested US$ 3.87 billion into the Indian equities market during August 2014.

India's share in world trade (merchandise and services) has increased from 1.77 per cent in 2008 to 2.27 per cent in 2013.

India's drugs and pharmaceuticals industry is expected to grow at a CAGR of 14 per cent to reach a turnover of Rs 2.91 trillion (US$ 47.88 billion) by 2018. 2 â&#x20AC;˘ India Newsletter

Exports from India stood at US$ 26.95 billion during August 2014 registering a growth of 2.35 per cent.

PE players have closed 389 transactions in India for the first eight months of 2014, with aggregate deal value reaching US$ 7.7 billion (INR 470.12 billion)

Media and entertainment industry in India is expected to grow at a CAGR of 15 per cent to touch Rs 227,000 crore (US$ 37.21 billion) by 2018.

India's index of mineral production of mining and quarrying sector for July 2014 stood at 118.5, 2.1 per cent higher as compared to July 2013.

Research and Development (R&D) centres in India accounted for US$ 18.3 billion as of FY 2014, which is around onethird of the addressed R&D globalisation and services market.

The data centre infrastructure market of India is estimated to reach US$ 2.03 billion in 2015, a 5.4 per cent increase, from US$ 1.92 billion in 2014.

Export of pharmaceutical products from India are expected to cross Rs 1 trillion (US$ 16.37 billion) mark during FY 15.

Indian farmers have harvested a record 106.54 million tonnes (MT) of rice in the 2013-14 crop year.

The Indian retail sector is expected to grow at a CAGR of 16 per cent to reach Rs 61.56 trillion (US$ 1.01 trillion) by 2017.

The total sown area for Kharif crops as on September 19, 2014, stands at 101.51 million hectares.

S o f t w a r e technology export from India is growing at 8-10 per cent annually. India's installed generation capacity, from all sources of energy, is close to 250,000 megawatt (MW) currently. The aggregate value of announced mergers & acquisitions (M&A) deals involving Indian companies has reached US$ 26.1 billion in the first nine months of 2014, an increase by 16.5 per cent year-onyear.

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NEWS ARTICLES PM launches “Make in India” global initiative

he Prime Minister, Shri Narendra Modi, launched the Make in India initiative with an aim to give the Indian economy global recognition. Addressing a gathering consisting of top global CEOs at the event in Vigyan Bhawan in the capital, the Prime Minister said “FDI” should be understood as “First Develop India” along with “Foreign Direct Investment.” He urged investors not to look at India merely as a market, but instead see it as an opportunity. The Prime Minister said it is important for the purchasing power of the common man to increase, as this would further boost demand, and hence spur development, in addition to benefiting investors. The faster people are pulled out of poverty and brought into the middle class, the more opportunity will there be for global business, the Prime Minister said. Therefore, he said, investors from abroad need to create jobs. Cost effective manufacturing and a handsome buyer - one who has purchasing power - are both required, the Prime Minister said. More employment means more purchasing power, he added. The Prime Minister said that India is the only country in the world which offers the unique combination of democracy, demography, and demand. He said the new Government was taking initiatives for skill development to ensure that skilled manpower was available for manufacturing. He also referred to the Digital India mission, saying this would ensure that Government processes remained in tune with corporate processes. The Prime Minister said he had felt a mood of gloom among India’s business community in the last few years, due to lack of clarity on policy issues. He said he had heard even Indian businessmen say that they

would leave India and set up business elsewhere. The Prime Minister said this hurt him, and added that no Indian business should feel a compulsion to leave the country under any circumstances. He said on the basis of the experience of the last few months, he could say that the gloom has lifted. The Prime Minister gave the example of the new Government’s initiative on self-certification of documents, and said this was illustrative of how the new Government trusted the citizens. The Prime Minister said trust is essential for investors to feel secure. Let us begin with trust; if there is an issue, Government can intervene, he said. The Prime Minister said trust too can be a transformative force. Shri Narendra Modi said

development and growth-oriented employment is the government’s responsibility. The Prime Minister noted that India ranks low on the “ease of doing business” and added that he has sensitized Government officials in this regard. He also emphasized the need for “effective” governance. To the expression “Look East,” the Prime Minister added “Link West”, and said a global vision was essential. He said Mission Swachh Bharat and “waste to wealth” could lead to good revenue models for business as well. He referred to his vision of waste water management and solid waste management in 500 towns across India through public private partnership. The Prime Minister also spoke of infrastructure of the future - including India Newsletter • 3

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i-ways besides highways - and mentioned port led development, optical fibre networks, gas grids and water grids. The Prime Minister also unveiled the Make in India logo, and launched the website makeinindia.com n

DIPP on an overdrive to boost manufacturing

iving a big boost to “Make In India”, the Licensing Committee chaired by Secretary, Department of Industrial Policy & Promotion has last week cleared 19 proposals for grant of Industrial License. These included applications for defence production from major players like, M/s Reliance Aerospace Technologies Limited, M/s Bharat Forge Limited, M/s Mahindra Telephonic Integrated Systems Limited, M/s Punj Lloyd Industries Limited, M/s Mahindra Aero Structure Pvt Limited, M/s Tata Advanced Materials Limited. Many of these proposals were pending in Government for last several years. It has been possible to approve these cases as consequence of the simplification of FDI policy vide Press Note 7 which has raised the FDI cap in defence from 26% to 49% and permitted portfolio investments upto 24% of the total equity of the investee / joint venture company under automatic route and doing away with requirement of 51% equity ownership by a single Indian investor/company. In case of another additional 14 pending defence applications, applicants were informed that licenses were not required anymore as a vast number of defence items have been delicensed. Vide Press Note 3(2014), Defence Products list for industrial licensing have been issued, wherein large number of parts/components, castings/ forgings etc. have been excluded from preview of industrial licensing. Similarly dual use item, having military as well as civilian application (unless classified as defence items) do not now require Industrial License from defence angle. This has enabled domestic 4 • India Newsletter

and international companies to undertake manufacturing without going through a lengthy process. The applicant company now only needs to file an Industrial Entrepreneur Memorandum (IEM) for these items and implement his project through the automatic route. It is expected that clearance of these 33 applications and the deregulation of Defence product List excluding a large number of components from purview of industrial licensing will provide a major impetus to advanced manufacturing in Defence sector. The Committee also discussed the possibility of removal of stipulation of annual capacity in the Industrial License as also to permit of sale of licensed items to other entities under the control of MHA, State Governments, PSUs and other valid defence licensed companies without requiring approval of DoDP. It was agreed that the above stipulation would be relaxed subject to submission of bi-annual returns by the unit. The DIPP would be shortly notifying the above decision by issue of a Press Note. Government has taken a series of measures to improve the Ease of Doing Business in India. The emphasis has been on simplification and rationalization of the existing rules and introduction of information technology to make governance more efficient, effective, simple and user friendly. The measures include 24X7 availability of online filing of Industrial License(IL) and Industrial Entrepreneur Memorandum(IEM) applications, increasing initial validity period of Industrial License to three years, streamlining the processing of applications for grant of extension of validity of Industrial License, treating partial commencement of production as commencement of production for all the items included in the license, adoption of highly contemporary industrial classification code NIC 2008 in place of NIC 1987 and doing away with the requirement of affidavit from the applicants of Defence Industrial License, with

the issue of the Defence Security Manual. n

India-Japan Relationship at a new height

uring Indian Prime Minister Narenda Modi’s five-day Japan visit earlier in September 2014, India and Japan have announced various measures to take the bilateral relationship to a new height. They have identified areas of cooperation, especially in the economic realm, where they can complement each other. While Japan has announced investment of US$ 35 billion in India over the next five years, India has promised rolling of “red carpet” for Japanese investors. Japan wants to produce high-tech products to sustain its export-oriented economic growth; India has offered rare earth minerals to Japan that are vital in manufacturing these products. India needs world-class infrastructure, including highspeed railway network, ports and dedicated freight corridors to accelerate its economic growth; Japan has agreed to offer high-speed train technology and capital to India to realise these goals. In addition to these commitments, Japan has agreed to remove some of India’s defence and space enterprises from its “End Users List.” As per the list select Indian enterprises are barred from having any technologies or business interactions with the Japanese companies. This issue brief, analysing the joint communiqué issued at the end of prime ministerial level summit talks, and selected speeches made by Prime Minister Modi in Japan, highlights some of the key commitments the leadership of the two countries have made to further deepen India–Japan bilateral ties. ■■ India–Japan Strategic Partnership: From Past to Present Indian Prime Minister Narendra Modi’s visit to Japan and his interactions with Japanese counterpart Shinzo Abe was the continuation of a prime ministerial level engagement institutionalised

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in 2006. While signing the strategic partnership in 2006, India and Japan agreed to hold summit-level talks annually, alternating between New Delhi and Tokyo. It may be noted that, India– Japan relations have witnessed various intermittent phases in their bilateral relations, including after the Pokhran nuclear test of 1998, during which political interactions between the two countries remained dormant. The institutionalisation of a summit-level engagement has reversed the trend. Undoubtedly, the prime ministerial level interaction, that has taken place almost without interruption since 2006, has transformed the bilateral relationship into a strategic partnership. As part of the strategic partnership, both the countries have identified a number of areas of bilateral interests in which they are cooperating mutually. These include trade, economics, infrastructure, security and defense and energy security. Japan was eager to continue and intensify this complementary relationship with India and it lost no time in extending an invitation to the new Indian Prime Minister Narendra Modi. It was keen to become his first foreign host soon after his assumption of office. Nonetheless, India Prime Minster chose neighbouring countries, including Bhutan and Nepal for his foreign visits. After rescheduling his Japan visit twice because of domestic engagements, Indian Prime Minister visited Japan on a five-day official visit starting from August 30. Japanese Prime Minister “expressed his deep appreciation”1 for choosing Japan as his “first destination for a bilateral visit outside India’s immediate neighbourhood.”2 The statement is reflection of Japan’s sense of satisfaction towards deepening India–Japan relations. During the visit, the old agenda in India–Japan bilateral relations: expansion of trade and economic ties; foreign direct investment,

cooperation in infrastructure sector; development of rail, road and port facilities as well as civil nuclear cooperation etc., dominated the agenda. Since some of the issues identified previously have not reached to fruition, it was a wise strategy of the present political dispensation to carry forward the consultations on these issues and take it to a logical conclusion. However, the new agenda, especially some of the dream projects of Prime Minister Modi, also surfaced during the visit and became the part of bilateral cooperation. Some of these agenda have been discussed below. ■■ Giving New Dimension to Bilateral Strategic Partnership One of the important outcomes of Prime Minister Narendra Modi’s Japan visit is elevation of existing strategic partnership to a “special” strategic and global partnership.3 As of now India has signed strategic partnerships with 29 countries and regional groups. However, the terminologies used are slightly different. Before this summit meeting India had accorded this “special” status only to Russia4, with which it has traditional and time-tested ties. Granting Japan a similar status at par with that of Russia is an indication that India attaches utmost importance to its ties with the East Asian Country and in the coming decades Tokyo will remain on the top of New Delhi’s foreign policy priorities. Japan was also eager to upgrade the existing 2+2 dialogue between Japanese foreign and defense ministries and their Indian counterparts to the defense and foreign ministers’ level. The 2+2 dialogue between India and Japan at present takes place at the levels of top bureaucrats of the two governments. The joint statement issued at the end of the summit meeting between Indian and Japanese Prime Ministers notes the two leaders “underlined the importance of the 2 plus 2 dialogue, involving Foreign and Defence Secretaries, for their growing strategic partnership, and decided to seek ways to

intensify this dialogue.”5 However, the statement stopped short of announcing the up-gradation of this dialogue. The Japanese media has given different interpretations to India’s unwillingness to upgrade this dialogue during the recent visit of Indian Prime Minister. “Concerns about China were apparently the major stumbling block,”6 noted the Asahi Shimbun. Similarly, the Mainichi Daily observed that the visit “ended with no high-level security talks that had been sought by Japan, in what may have been a move by India to avoid provoking China.”7 However, Jeff Kingston, Director of Asian Studies at Temple University, has a different take: “it seems more likely that India is withholding the two-plus-two deal as a bargaining chip in the broader negotiations.”8 Irrespective of the fact that whether it was India’s bargaining chip or China factor that hampered the idea of strategic dialogue’s upgradation, the two countries still need to do some ground work before institutionalising the new framework. ■■ A Renewed Push to Economic Engagement While India and Japan were envisioning a long-term strategic partnership they identified that it would be the “economy” which should be the cornerstone of the relationship. In 2006, in a joint statement, India and Japan had affirmed that “a strong and prosperous India is in the interest of Japan and a strong prosperous Japan is in the interest of India.” Both identified ways to improve their bilateral trade which at that time was abysmally low, around six billion US dollars. They decided to create a favourable environment for each others’ investors and concluded a Comprehensive Economic Partnership Agreement (CEPA) after long negotiations in 2011. As part of the economic partnership, both decided to gradually lower the tariffs imposed on some 90,000 goods traded between the two countries and accorded “national treatment” to each other’s investors. India Newsletter • 5

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The strategy to lower tariff increased the flow of bilateral trade and within a year of implementation of CEPA, the bilateral trade jumped to 18 billion US dollars by the end of fiscal 2012, which was hovering around 12 billion US dollars at the end of fiscal 2011. However, bilateral trade volume did not touch the expected US$ 25 billion marks during the next fiscal rather it has come down to US$ 16 billion. Similarly, following CEPA Japanese investment was expected to grow exponentially. But it is growing at a slow pace. So far some 1100 Japanese companies have set up their production base in India whereas the number is around 8000 in China. Despite the easing of business norms following adoption of CEPA in 2011, Japanese investors are shying away from Indian market and have been pouring their capitals in Indonesian, Vietnamese and Philippines markets. Sensing the problem faced by the Japanese investors, Indian Prime Minister Narendra Modi during the recently concluded visit has assured them that India is replacing “red tape” with “red carpet” for Japanese businessmen. Addressing a gathering of Japanese entrepreneurs in Tokyo, Indian Prime Minister informed them that India has adopted an “ease of business” policy.9 He explained his “make in India” mantra to them and assured the Japanese business that India has vast opportunity for investors. Explaining his “three D Mantra”, he said that India is not only the biggest Democracy in the world but also has large Demography and Demand. Since, India has a young population; demand for goods will remain high domestically for a longer time and thus India can be a place where the Japanese investors can make their fortune. Elaborating on India’s geostrategic location on the world map, he informed them that if they make India their manufacturing hub not only can they sell their finished products to Indian market but also export it to different Asian and 6 • India Newsletter

African countries through its ports situated alongside India’s Eastern and Western coasts. 10 During this visit Japan has agreed to earmark 35 billion US dollars in loans and investment to India during the next five years. Undoubtedly, this will help India improve its infrastructure, which observers believe, has been one of the impediments in attracting foreign direct investment within the country. Additionally, India has agreed to introduce bullet train technology between Mumbai and Ahmadabad and the Japanese side has expressed its “readiness to provide financial, technical and operational support to introduce Shinkansen system.”11 However, it will take a little more time to introduce this technology as joint feasibility study consisting of Indian and Japanese experts started last year is yet to be completed. The success of the bullet train between Mumbai and Ahmadabad will certainly pave the way for introducing this technology between different major cities of India. Both the countries have also signed an agreement to make Varanasi a “smart city” on the lines of Japanese ancient capital Kyoto. Hopefully, the success story of Varanasi and skills learnt during the process will also be experimented on different ancient cities of India. Some breakthrough was also achieved for joint collaboration in the field of defence technology. Most importantly, Japan has also delisted some of the Indian defense enterprises from its “End Users List”12 which will pave the way for joint defense production among Japanese and Indian companies and thus will help decrease defense spending. India has been willing to partner with Japan in the field of defense technology. However, Japan owing to its decade-long selfimposed ban on exporting defense and defense related technology, had been showing reluctance. Shinzo Abe’s cabinet, a few months back, eased these restrictions. Stalemate, however, continues over India’s

procurement of US-2 amphibious aircraft, the only of its kind available in the world for advanced air–sea search and rescue operations, which can land on rough sea surface as well as land. Tokyo wants to sell US-2 aircraft to New Delhi, but New Delhi wants to produce them jointly since the cost of a single US-2 aircraft is roughly $109 million. There were speculations that Japan will give green signal to its companies to go for a joint production of the US-2 given the changes in domestic laws that allow them for joint collaboration but the two counties could not reach an agreement. The joint statement, however, “welcomed progress made in discussions in the Joint Working Group on cooperation in US-2 amphibian aircraft and its technology, and directed their officials to accelerate their discussions.”13 To attract Japanese investment in India, the new political dispensation has announced some new measures during this visit including a plan to establish a new unit under the Prime Minister’s Office that will facilitate Japanese investment in India.14 But the political commitment can only be realised when it is backed by its entrepreneurs and investors. It is yet to be seen how the Japanese entrepreneurs respond to Prime Minister Modi’s call. During the visit Indian Prime Minister also exhorted Japanese leadership to adopt a new political vision to deepen the ties between the two countries. He impressed upon Japanese leadership to establish a “Look at India” policy on the similar lines of India’s “Look East Policy”15 to further deepen economic and political relationship between the two countries. He also observed that “India is incomplete without Japan and Japan is incomplete without India.”16 This statement is akin to the 2006 commitment in which they identified that a strong and prosperous India and Japan are in each other’s interests.

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■■ Civil Nuclear Cooperation:The Stalemate Continues Despite some of the success stories of India–Japan relations, signing a nuclear cooperation agreement with Japan remains as an unfinished agenda. The inconclusive agreement is vital for India’s energy security. However, Japan, owing to concerns of its people who remain opposed to selling nuclear technology to nonNPT signatories, has been treading cautiously in signing nuclear cooperation deal with India. It was expected that Prime Minister Abe who considers selling of technology, including nuclear technology abroad as one of the main pillars of Japan’s economic revival will clinch the pending civilian nuclear cooperation agreement. They noted in their joint statement that the two prime ministers “directed their officials to further accelerate the negotiations with a view to concluding the Agreement at an early date.”17 Similar observations have been made about the nuclear cooperation in the joint statement signed between Prime Minister Manmohan Singh and his Japanese counterparts during the last few years. The persisting stalemate between the two countries over the nuclear cooperation agreement suggests that they need to do more to bridge their perception. ■■ Conclusion Undoubtedly, Japan’s cooperation with India in improving its infrastructure by providing loans and technology including the metro rail system has transformed India’s urban landscape. It is hoped that he commitment made during Indian Prime Minister’s recent visit to Japan will be implemented in letter and spirit. The complementary nature of the relationship between India and Japan would guide the Asian region into a prosperous and peaceful region. Also, it is hoped that both the countries would reach a consensus accommodating each other’s stance over the deadlocked civil nuclear cooperation agreement that will give a new fillip to India– Japan economic ties.

FIPB clears five retail proposals worth Rs420 crore

he Foreign Investment Promotion Board (FIPB) cleared five retail proposals worth Rs.420 crore from companies such as Puma SA, Bestseller and Flemingo, lifting investor sentiment in retail trading in Asia’s third largest economy. The proposals given the go ahead included two for multibrand retail trading in duty free goods. Dubai-based Flemingo International’s R.s190 crore proposal to set up a fully owned subsidiary as well as a 49% investment in an Indian duty free company was approved by FIPB. The company is a global duty free and travel retail operator that first opened shop in the country in 2003. Also cleared was US based Miami Perfume Junction’s Rs.10 crore proposal for incorporation of a wholly owned subsidiary in India to sell duty free goods in airlines and run duty free shops at airports. To be sure, most of these brands have been present in India either through franchises or through local joint ventures. The current proposals are designed to give the firms further control of their India operations. Additionally, the board cleared three 100% single brand retail proposals worth Rs.222.5 crore, suggesting renewed interest in India’s growing retail market. German sportswear retailer Puma; Danish fashion wear company Bestseller and American soap retailer Lush received clearances to operate 100% companyowned retail operations in the country. Bestseller Retail, which operates 3,000 stores in Europe, West Asia and India across various fashion brands, said it will invest Rs.210 crore into its three brands in the country. Bestseller has sought approval for establishing a wholly owned subsidiary for each of its three brands—Jack and Jones, Vero Moda and Only. Part of the application has also sought approval to acquire

100% equity in Best United India Comforts Pvt. Ltd, one of the company’s franchise partners. The applicant currently proposes to make an investment of $5 million for acquisition of equity shares from existing shareholders as well as for setting up singlebrand retail stores in the initial stages. It operates a total of 500 points of sales in India through a franchise model with the Mumbai based Aggarwal family, promoters of textile company Bombay Rayon Fashion Ltd. The firm will use the capital to add more retail stores in the country, where large foreign fashion brands such as Hennes and Mauritz (H&M) and GAP Inc are in the running to open stores by 2015. The apparel market accounts for 6% of India’s consumption expenditure and is expected to touch $225 billion (around Rs.14 trillion today) by 2020, according to a 2012 report by consultancy Boston Consulting Group. Bestseller’s India head declined to comment on the firm’s future retail plans for the market. Additionally, sportswear brand Puma India, that has been operating in the country since 2005, received approval to convert its 51% stake in Puma India Retail, a JV it formed in 2006,to a 100% fullyowned venture through an equity infusion of Rs.10 crore. The firm has sought approval for trading of additional products under the Puma brand. In September, Puma’s close competitor Nike, too, sought the government’s approval to open companyowned stores in India. Puma’s India head declined to comment on the firm’s plans. These investments come nearly two years after the government eased norms for retailers to open stores. In September 2012, India allowed 100% entry in singlebrand retail trading, with some conditions. Following this, top retailers such as IKEA and H&M announced sizeable investments to tap into India’s growing consumerism. India Newsletter • 7

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Industry experts suggest there has been a revival in retailers’ longterm plans. “There has been some kind of revival in investor sentiment over the past 34 months. Companies are willing to reexamine India plans for the long haul. Regulatory hurdles aside, the overall sentiment in the consumer space has seen a revival,” said Joydeep Bhattacharya, head of consumer products and retail practice at consultancy Bain and Co. India Pvt Ltd. American soap maker Lush has received approval to convert its existing business to a wholly owned unit in India to undertake single brand retail trading of Lush products, worth Rs.2.5 crore. The company has been selling soaps in the country since 2004.

PM’s address to Indian Community at Madison Square Garden, New York

M announces sweeping changes in procedures to facilitate travel between America and India The Prime Minister, Shri Narendra Modi, today exhorted Indians to join in the development effort as a mass movement. “I am going to make an India of your dreams,” the Prime Minister said as he exhorted the Indian American community to join in the development effort for India. He was addressing the Indian diaspora at a historic event at Madison Square Garden in New York. The event was attended by over 18,000 people. The Prime Minister said that following the election results, there has been a renewed sense of hope and expectation about India. He said all Indian Americans today wanted to renew their links with India. The Prime Minister highlighted the unique combination of three great strengths that India has: democracy, demography and demand. He said that for India, democracy is not just a system of governance, but an article of faith. Shri Narendra Modi said winning 8 • India Newsletter

the election is a huge responsibility and he will leave no stone unturned to make India a developed country. He said that with the blessings of 125 crore Indians, he was confident that the common man’s hopes and aspirations will be fulfilled. “I will do nothing to make you feel ashamed,” the Prime Minister said. He said that the country now had the capability, the possibility and the opportunity to make the 21st century India’s century. He said India is both the youngest nation and oldest civilization on earth. Saying that development is ultimately achieved through public participation, the Prime Minister said he wants to make development a mass movement, just like Mahatma Gandhi had made the freedom movement a mass movement. He highlighted various initiatives that have been initiated by the new Government including Pradhan Mantri Jan Dhan Yojana, Make in India, Swachh Bharat and Clean Ganga. The Prime Minister referred to the talent of Indian youth, as exemplified by the success of Mars Orbiter Mission. The Prime Minister also highlighted his stress on skill development and said India could soon emerge as a global supplier of skilled workforce like nurses and teachers. The Prime Minister invited the Indian diaspora to share their suggestions through the platform MyGov.in He said one of his key initiatives was to remove redundant laws, and he would be happy if he could do so at a pace of one a day. He said governance should be for aspirations of common man. People didn’t make me PM to do easy things, he remarked. He said 2015 marked a century since the return of Mahatma Gandhi to India. He invited all Pravasi Bharatiyas to join in the celebration, and contribute towards developing India. He said Indians must present Swachh Bharat as a tribute to Mahatma Gandhi on his 150th anniversary in 2019. Referring to his effort for a Clean Ganga, he said the Indian diaspora across the

world revered the River Ganga. He said a clean Ganga would improve economic prospects for upto 40 percent of India’s population, for which the river was like a lifeline. He also referred to his vision of “Housing for All” on the 75th anniversary of Independence. The Prime Minister unveiled a series of facilitation initiatives aimed at making travel from America to India easier: Noting that there are certain differences between the PIO (Person of Indian Origin) and OCI (Overseas Citizens of India) schemes, the Prime Minister said PIO cardholders will be granted visa for life, and a new scheme will be announced soon, merging the two schemes. He said there would be no need for long-stay visitors to India to visit police stations. He also announced long term tourist visas for American citizens and said visa on arrival for American tourists will be announced soon.n

India second-highest contributor to rise in global m-cap

ndia is the second-highest contributor to the rise in global market capitalisation (market cap) this year, accounting for 10.25 per cent of the overall rise of 3.9 per cent, says a recent study by brokerage firm Motilal Oswal. The US tops the list, accounting for 41 per cent of the rise in global market cap. That country saw its market cap increase from $22.3 trillion in December 2013 to $23.9 trillion in August this year. During the same period, India’s market cap rose from $1.1 trillion to $1.5 trillion, said the report, ‘Bulls & Bears-India Valuation Handbook’. It added in the January-August period this year, global market cap rose to $66 trillion. With a contribution of $1.5 trillion, India’s contribution to global market cap stands at 2.3 per cent, above its long-term average of 2.1 per cent. The run-up saw the Sensex

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outperform its emerging market peers, both in rupee and dollar terms. Currently, it is being traded at 17.4 times the FY15 earnings, a premium to all other emerging markets. The valuation of Indian equities remains attractive, with a market cap-togross domestic product long-period average of 72 per cent, the report says. The rally so far notwithstanding, analysts believe there is headroom for emerging markets. “For equities, while we are still positive on developed markets, emerging markets appear to have more upside. Therefore, we favour emerging markets more. Though these markets have uncertainties and geopolitical risks, these are stabilising and benefiting from a revival in developed markets. Asia, in particular, can expect a better performance, given the combined effect of a global recovery and structural reforms. For the broader emerging market universe, differentiation remains vital to identifying positive opportunities,” said a recent report by JPMorgan Asset Management. In terms of regions, Goldman Sachs, in a recent report, maintained its overweight stance on China and Taiwan, while keeping an underweight rating on Malaysia, Hong Kong, Australia and Thailand, among other global markets. Most analysts say the next leg of the current rally in India will be driven by an improvement in corporate earnings. “Through the past 15 years, returns of Indian equities have largely been driven by earnings growth. By contrast, this year has seen 27 per cent returns, of which 19 per cent is due to multiples expansion. While this could be due to raised expectations on the back of a change in India’s political leadership, we believe positive earnings momentum is required to sustain these returns,” Bhuvnesh Singh of Barclays Research said in an August 28 report, co-authored with Vijit Jain and Rachna Biyani. Saurabh Mukherjea, chief executive

(institutional equities), Ambit Capital, says he sticks to the FY15 year-end target of 30,000 for the Sensex. As investors gain faith in the ability of the Indian economy to grow at a reasonable rate, risk aversion related to India will fade, he says, adding there is more steam left in the rally here.n

Indian markets outperform global peers in H1 of FY15

ndian markets rose 19 per cent in the first half of this financial year, the best performance by any market during this period, globally. The rise was primarily due to strong flows from foreign institutional investors (FIIs), amid hopes the new government at the Centre would announce key policy reforms to help kick-start economic growth. As of September 26, FIIs had invested Rs 61,024 crore this financial year, while mutual funds had put in Rs 15,298 crore during the same period, according to Securities and Exchange Board of India data. The market rally saw the BSE Sensex and the National Stock Exchange Nifty hit their record highs of 27,355 and 8,180, respectively, after the results of the general election. “Since the formation of the government, the NDA (National Democratic Alliance) has made all the right noises, through the Union Budget and a series of announcements. These have had a positive impact on the sentiment and the investment climate. The equity market has also given a thumbs-up to most initiatives,” said a recent note by ICICI Securities. The rally in the mid- and smallcap stocks outpaced the rise in the benchmarks, with the CNX midcap and the CNX small-cap indices gaining 32 per cent and 34 per cent, respectively, during this period. The road ahead While most analysts agree the rally has more steam left, they expect the markets to consolidate before resuming their rally. Amid this backdrop, they suggest investors should brace for volatility. On the

domestic front, analysts are also keeping a tab on the government’s reform agenda, which is expected to play out after the outcome of the state Assembly polls. Vaibhav Sanghavi, director (equities), Ambit Investment Advisors, feels in the immediate term, the markets will react to corporate results, to be announced in October. He adds through the next six months, the Union Budget will also be a key determinant of how the markets fare. “At the same time, there are a lot of events stacked up at the global level, including tapering of the US Fed Reserve’s bond-buying programme, economic data from Europe and China and geopolitical events. Beyond October, investors should brace for volatility, which is likely on account of global factors, rather than domestic,” he says. On FII flows, analysts suggest longonly funds will continue to pour in. However, hot money flows are likely to be impacted due to realignment of carry trades. A stronger dollar could see some flight of capital to the US, they add. Lalit Nambiar, fund manager, UTI Mutual Fund, says: “The strengthening of the dollar will impact global markets, including India. Besides state election results, US news flow is the most critical thing to influence market direction for India. One must realise an improvement in domestic earnings is yet to show; the markets have moved up largely on hope…The next few months might not be as easy as the recent past, in terms of FII flows to Indian markets.” “One needs to be selective and patient while investing at current levels, as there could be some correction before the markets start to rise again. This will probably be relatively healthy for Indian markets, compared to a continuous run-up, which suddenly loses steam,” he added Sanghavi of Ambit feels India is the best bet among emerging markets. Though he doesn’t expect India Newsletter • 9

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the markets to correct more than 5-10 per cent through the next six months, he doesn’t feel the markets will gain more than 10-15 per cent from current levels. On the domestic front, analysts are also keeping a tab on the government’s reform agenda, which is expected to play out post the outcome of the State polls. Though they believe that the groundwork for certain essential reforms (GST, fuel price rationalisation, direct benefit schemes, government approvals) has largely been done, it is a question of implementation now.n

India can become major export hub by 2030: HSBC

ndia has the potential to become the world’s fifth-largest exporter of goods by 2030 with the textile industry set to regain its place as the global garment hub, an HSBC report said. “Despite struggling with a number of structural impediments to growth, prospects for medium-term growth in trade remain strong,” the HSBC report said. “The economic potential for India remains strong, with the growing population and rapidly expanding middle class - it presents opportunities for business. India is forecast to emerge as the world’s largest middle-class market, surpassing both China and US,” said Sandeep Uppal, MD and head, commercial banking, HSBC India. The report comes barely a fortnight before the government’s planned unveiling of a new five-year Foreign Trade Policy that will likely include sops to spur export and incentives for domestic value-added products - the proportion of exports truly produced in India, which will be dovetailed with the “Make in India” programme that Prime Minister Narendra Modi will unveil later this month. A higher DVA component in exports is important for creatting jobs and boosting domestic manufacturing. “The DVA component in Indian

10 • India Newsletter

exports has been declining alternatively the foreign valueadded (FVA) portion of exports has been on the rise,” Crisil said in a recent research report. The HSBC report said that the UAE is likely to remain India’s top export destination by 2030, and China is forecast to emerge as the secondlargest export market, displacing the US.n

India remains top offshoring destination for IT firms: report India remains the top offshoring destination for information technology (IT) companies, followed by China and Malaysia, said a study by A.T. Kearney. The study, Global Services Location Index, assessed 51 countries based on metrics under three categories including financial attractiveness, people skills and availability, and business environment. “Despite expectations regarding #2 ranked China, India maintains and even increases its lead over China,” the study said. “The country (India) is unrivaled in both scale and people skills.” “Leading IT services firms are expanding their traditional offerings (in India) to include R&D (research and development), product development, and other niche services,” it said. “The line between IT and BPO (business process outsourcing) is blurring as players offer bundles and specialized services to their clients and develop skills in niche domains.” Although China offers an alternative to Eastern Europe for high-end IT and analytics, rising wages are limiting its cost competitiveness in lower-end functions compared with India and other Asian destinations. Asia continued to dominate the global market, with six of its countries among the index’s top 10 offshore destinations. However, there are some challenges for the region.

Global IT firms aggressively started outsourced back office operations in the mid-2000s, but today multinationals are reassessing their outsourcing strategies. There is a course correction where some functions are being repatriated from vendors back to the companies’ own service centres and employees, the study found. “What was once a decision based primarily on cost-effectiveness, has now started to incorporate other considerations, for example, whether the function is core to the business, and therefore needs to be brought back in-house, as well as external regulatory factors impacting business relationships, accountability and the ability to protect intellectual property and customer privacy,” said Erik Peterson, study co-author and partner, and managing director of A.T. Kearney’s Global Business Policy Council thinktank. These regions also face challenges from increasing digitization and automation, which could negate cost competitiveness. Greater automation and freelance-based outsourcers are eventually making physical location less relevant. “Automation, wherein robots are programmed to perform for even less than low-cost labour, is becoming increasingly accessible and could dent the region’s low-cost advantage,” the study said. “Over the past several decades, we’ve gone from a world where organizations that once had just one location now have dozens. In the future, however, as quick and easy deployment makes automation feasible for whole new categories of jobs, we may move to a world of ‘no location’,” said Peterson. Johan Gott, co-author and senior manager at A.T. Kearney’s Global Business Policy Council, said: “With the rise of ‘no location’, countries in the low-value-add niche may see their opportunities erode, so they’ll need a strategy to aggressively move up the value chain to stay relevant.”n

* RED Text indicates INDIA-AUSTRIA News.

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India to emerge KTM production hub by year end

ndia is on the cusp of emerging as the lead production hub of Austrian motorcycle brand KTM with the four motorcycles manufactured at the Chakan plant poised to outsell super-sports and off-road bikes rolling out of the Mattighofen facility in Austria. “For KTM, this will be a record year with sales projected to touch an alltime high of 150,000. Of this, 80,00085,000 bikes will be made in India and sold in the domestic market as well as exported to Europe, US, Latin America and all of Asia, including Japan,” KTM India head and Bajaj Auto senior vice-president Amit Nandi told TOI. Bajaj Auto has 48% stake in KTM. The biggest export markets for the made-in-India KTM bikes are Western and southern Europe comprising Germany, France, Spain and Italy. With EU countries consicous about fuel conservation and its positive impact on the environment, these relatively frugal bikes are becoming extremely popular. The four bikes manufactured in Chakan - Duke 200 and Duke 390 in the naked bike category and RC 200 and RC 390 in super-sports bikes are co-developed by KTM and Bajaj for the global market. “Prior to these bikes, KTM made street motorcycles upwards of 690 cc and 50-500 cc offroaders,” Nandi pointed out. While Bajaj Auto sold 11,000 KTM bikes in India last fiscal, it may sell twice as many bikes this year, having already clocked sales of 10,000 bikes till August. “We have registered 120% growth in the first five months of this fiscal,” the official said. “What has led to the phenomaenal growth is that we have broadened our portfolio to introduce bikes that are relevant to the market and priced just perfect and also improved the network to 150 showrooms. Now that we four products, we are also marketing them aggressively through events like Orange Days and Track Days where we are hiring

a venue where riders can turn on the throttle and enjoy the thrill of riding a KTM,” said Nandi. The market for bikes priced above Rs 80,000 is around 500,000 units per annum in India. Of this, Bajaj Pulsar corners nearly 60% sales, leaving others to fight over the remaining pie.n

India to negotiate FTAs with emerging market nations

ndia will negotiate free-trade agreements (FTAs) with emerging market nations in Latin America, Africa and some other regions to increase market access for Indian exports, a departure from the earlier policy of signing such accords with developed nations that has, among other reasons, led to a widening of India’s trade deficit. While the previous United Progressive Alliance (UPA) government had mostly signed FTAs with developed countries, including Japan, South Korea and the Asean region, and was in talks for similar agreements with the European Union, Canada, Australia and New Zealand, the trade ministry on Wednesday said that the focus under the new government is shifting towards countries in Latin America, West Asia, Commonwealth of Independent States (CIS) and Africa, regions where India may have an upper hand in finding market access for its exports. “Free-trade agreements is an instrument of improving our export capacities. We will negotiate FTAs with countries with which we feel India has a strong exporting interest. For us those regions are Latin America, Africa, West Asia, CIS where we will look for partners. We are already doing that,” commerce secretary Rajeev Kher said while addressing reporters along with trade minister Nirmala Sitharaman on the achievements of his department in the first 100 days of the Narendra Modi government. In his Independence Day speech, Prime Minister Modi had focused on making India an exporting

powerhouse by reviving the manufacturing sector and import substitution wherever possible. Kher said the mandate that the department has got from the Prime Minister is to create an institutional mechanism to promote exports, and that FTAs should be negotiated keeping in mind India’s dignity, position and ability to leverage its market potential. “Exports are not merely as a function of marketable surplus but exports are a means of pulling up the economy,” the commerce secretary said. FTAs should be negotiated with a lot of strategic understanding, said a commerce ministry official, declining to be named. “Suppose, we go to Latin America, we should find a country which is at a level of development whose industrial character will be such that with India it will be complementary,” he added. An institutional mechanism has been put in place in the department of commerce for a periodic, regular import appraisal and in consultation with relevant departments to take policy measures to try keep the trade deficit within manageable limits, Kher said. On the proposed EU-India FTA which has been negotiated since 2007, Kher said the EU has to reconsider its current position and once it does that, India is willing to negotiate. “You are asking for the moon, we cannot give you the moon,” he added. Sitharaman said EU needs to show real interest in the proposed deal. “When plurilateral agreements are being signed such as TPP (TransPacific Partnership) and TTIP (Transatlantic Trade and Investment Partnership), then you find interests of countries being more focused towards these. So it’s not like we are holding back with a sense of reservation. It’s more a question of starting all over again,” she added. On the other FTAs being negotiated such as those with Australia and New Zealand, Kher said the two countries are asking India to open up its dairy sector. “I am not in a position to do India Newsletter • 11

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‘German companies excited Kher said the upcoming foreign about investing in India’ that,” he said.

trade policy to be announced within a month’s time will provide a long-term, stable, sustainable environment and will facilitate improving the manufacturing and services capacities.

The commerce secretary also said that the government is considering allowing dual use of infrastructure in the processing and non-processing area. Sitharaman added that the move is intended for optimum utilization of special economic zones (SEZs) and to help SEZ developers recover costs quickly. On the stalemate at the World Trade Organization over India’s insistence on finding a permanent solution on the food subsidies issue, Sitharaman said India is in favour of the trade facilitation agreement (TFA), “but we shall not wait for an interminable period to get an agreement on public stockholding of foodgrains, which we think is important for India”. Sitharaman said today countries better understand why India took the position of delaying the TFA in July. “There is a greater sense of understanding and appreciation. During my recent visit to China, China’s trade minister very clearly said that he is able to see where we are coming from and what arguments we have placed,” she added. Manoj Pant, professor at the Jawaharlal University, said the stand of the NDA government on FTAs is logical as it comes from the realization that India’s trade is moving more towards the emerging markets in the developing world. “Developing countries should first try finish trade agreements with developing countries to bring down their tariff levels to the WTO level. Since the tariff levels of developed world are already low, there is not much that countries like India can gain through tariff negotiations with them,” he added.n 12 • India Newsletter

India to become Capgemini’s default offshoring location nion minister for telecom and soon

information technology, Ravi Shankar Prasad, who recently visited Germany to make a pitch to investors about ‘Make in India’, said that German firms were very excited about the investment proposition in India. “German firms are interested in highend electronic manufacturing in India,” said Prasad while speaking to a few reporters from his office in the ministry of law, another portfolio he holds. Opportunities in electronics manufacturing are spread across mobile phones, smart cards, medical electronics, smart cities, etc, he added. “Almost 60 per cent of defence manufacturing consists of electronics,” he said. India recently increased the cap on foreign direct investment in defence manufacturing to 49 per cent. Among the companies that Prasad met included nano-technology firm Infineon Technology, Osram Lights which deals with LED products, wireless communication company Rhode & Schwarz, Von Ardenne which manufactures solar photo voltaic equipment and automotive firm Bosch Ltd. The later has been one of the first companies to come forward with its investment proposal when the government started offering sops for electronics manufacturing under the Modified Special Incentives Scheme (MSIPS) policy. Prasad said that the company is looking at increasing its investment in the country. Bosch Automotive Electronics India had proposed an investment of Rs. 550 crore for setting up a manufacturing facility in Bangalore. The government is currently also revising its MSIPS policy to extend its mandate apart from making it more investor friendly. The revised policy will require Cabinet’s approval. Prasad said that the policy is being examined. Germany is the first nation to have a bilateral visit by the minister of communication and IT.n

ap Gemini SA, the Paris-based consulting and software services firm, is trying to save costs by farming out more work to its centres in India and hiring freshers from colleges. Capgemini, which has software development centres in more than 10locations outside France, including smaller ones in Poland, Morocco and Vietnam, wants to make India the default offshore location, said Aruna Jayanthi, chief executive of Capgemini India Pvt. Ltd, in an interview last week. Most of Capgemini’s key clients, who operate out of France, Germany, New Zealand and the Nordic regions, have begun offshoring more work to low-cost countries as technology budgets remain little changed and companies seek to cut costs, adding pressure on the French company to accelerate its plans to boost its operation in India. Capgemini’s bigger rivals International Business Machines Corp. (IBM) and Accenture Plc. already have a massive presence in India. Capgemini has “a very low-margin business compared to its global peers like IBM and Accenture” which could be the reason for increasing its India offshoring, coupled with the fact that most of Capgemini’s clients are also going in for more offshoring today, said Sudin Apte, founder and research director with tech research firm, Offshore Insights. In the last six-seven years, Capgemini’s offshore presence in India has grown from 10-12% to 45% today, and it has a very strong consulting practice, which is what will help it compete with peers such as Cognizant Technology Solutions Corp. and Infosys Ltd for the India business. Capgemini, however, cannot be compared with IBM or Accenture, according to Apte. “Firstly, Accenture, which is considerably smaller than IBM, is still three times larger in terms of revenue compared to Capgemini.

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Secondly, both IBM and Accenture have 72-75% of their total resources in global delivery markets, while for Capgemini this number is about 5455%.” The 139,000 strong Capgemini had more than 50,000 employees in India. In comparison, IBM is estimated to employ about 150,000 people in India and Accenture, 100,000. Accenture entered India in 1987, IBM re-entered the country in 1992 while Capgemini started operations here in 2000. By 2016, Capgemini, however, expects the number to account for half of its global workforce. Moreover, the company that has traditionally hired experienced professionals will also add freshers, said Jayanthi. The company posted an 18% revenue growth in India on a total revenue of €5.1 billion in the June quarter, said Jayanthi. About 85% of the work done out of India is divided between infrastructure management, application development and management, and consulting services while the remaining 15% comes from business process outsourcing (BPO). “Our engineering services delivery that is being driven out of India will offer ‘digital engineering’ solutions to clients globally, with two-thirds of the business opportunity expected to come from the US in the next 1218 months,” said Girish Wardadkar, global leader-engineering services, Capgemini. Investing in the engineering space also allows Capgemini to offer a suite of services in addition to its traditional IT services, infrastructure managed services, BPO and consulting. Capgemini, she added, with its six innovation labs in India will help drive 50% of the digital transformation required by clients out of India in areas like the Internet of Things, cloud, virtualization of the traditional application, development and management services. Sanchit Vir Gogia, chief analyst

and chief executive of Greyhound Research, acknowledged that Capgemini is building its capability in the engineering vertical but added that the company may face “tough competition from established Indian software services companies such as HCL Technologies Ltd, Infosys and Tech Mahindra Ltd, that already have a strong engineering practice”. “The company may also need to reduce its pricing by 25-30% to compete with Indian peers going forward,” said Gogia.n

Google on its way to surpass $1 billion in revenue from India in FY15

n the great Indian ecommerce race, the real winner is a company which isn’t even on the race track — Google, the US-based search giant. The California-based company, sources said, is on its way to clocking over $1 billion (Rs 6,000 crore) in revenue from India in the year to March 2015, helped along by heavy spending by ecommerce firms. According to company filings, Google crossed Rs 3,000 crore in revenue for the year ending March 2014, up 47% from the year before. Globally, the Google’s revenue in 2013 was $58 billion. “Marketing budgets have gone through the roof. It’s highly competitive these days and whoever pays the most for a keyword wins the race,” said Vasudevan T, a former head of digital marketing at Myntra who is now the CEO of online coaching company Coatom. For companies like Google, Facebook and Twitter, India has been a paradox. While their largest user base outside of the United States lives in India, making money in the market has been tough. However, with cashrich ecommerce companies like Flipkart and Amazon looking to acquire more customers, online advertising has seen a significant increase. “There will be a surge in the digital ad spends by these companies, and we are already seeing this,” said Nilotpal Chakravarti, who heads

media and research at the Internet and Mobile Association of India. Ecommerce companies are already one of the top spenders in the digital advertising market. Of the total digital advertising spend, nearly 18% came from ecommerce, according to IAMAI. “When I saw our online spends the first time, I almost fell off my chair,” said Ruksh Chatterji, who ran the apparel business for Jabong until February 2014. “Google is a large player in display and search engine marketing that are the key pillars of ecommerce advertising,” said Chatterji, who is now vice president of India Operations at digital media network Komli Media. For ecommerce companies, search is the biggest marketing channel along with social media. Typically, online businesses spend close to 25% of their topline on marketing. However, in the case of ecommerce, it could go up to 50%, said Vasudevan. Google, which considers India as one of its fastest-growing markets, is also making large investments to the country. Recently, under an ambitious Android One initiative, Google brought local manufacturers together to bring down cost of mobile phones. Google declined to comment on its revenue from India. While revenue is growing, Google is also entangled in tax disputes. The company booked at total of Rs 311 crore as “income tax paid under protest” for assessment years 200713 as it continues to litigate tax claims made by Indian authorities.

Microsoft to set up 3 data centres in India by 2015

icrosoft plans to offer its commercial and cloud services - Azure and Office 365 - from three local data centres by the end of 2015, making it the first technology company to set up cloud data centres in India, a move that experts say will help the US-based software giant compete better in the domestic market. “When we think about the cloud India Newsletter • 13

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opportunity in India itself, it is going to be a $2 trillion opportunity,” chief executive Satya Nadella said in Delhi on Tuesday, adding that the move will help Indian companies, government and entrepreneurs. Without disclosing the investment involved in setting up the data centres, Nadella said they will have “sizeable” capacity. The announcement is significant given that the ruling Bharatiya Janata Party has been vocal about bringing local data centres to India to maintain data sovereignty. Besides, a large number of Indian

enterprises have increasingly voiced concerns about hosting their data on the public cloud because none of the major players such as Amazon Web Services, Microsoft or Google have cloud data centres in India. “I think in two or three years, when the servers come to India, the public cloud market will become more interesting because now there are some territorial issues in holding the data in the country,” Jagdish Belwal, CIO at Tata Motors, which currently uses Amazon Web Services, told ET in a recent interview.

Competition in the cloud market is increasing, with players such as IBM spending millions of rupees advertising its Softlayer cloud and Oracle making a push in the Indian market with the announcement of several new cloud offerings for different industries. Microsoft’s move to set up a local data centre will give the company “more muscle” to compete in the cloud services market and “Office 365 could see higher adoption”, according to Vishal Tripathi, principal research analyst at Gartner.

INDIA PERSPECTIVES MAGAZINE

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14 • India Newsletter

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INDUSTRY The Indian Manufacturing Sector

s per global management consulting firm McKinsey and Company, India’s manufacturing sector could touch US$ 1 trillion by 2025. The burgeoning demand in the country and the multinational corporations’ desire to establish lowcost plants in India can contribute to this. There is potential for the sector to account for 25-30 per cent of the country’s GDP and create up to 90 million domestic jobs, by 2025. India’s growing economy offers domestic entrepreneurs and international players many opportunities to invest. The country’s government, realising the significance of the manufacturing industry to India’s industrial development, has taken necessary steps to increase investment in the sector. India’s growth in the manufacturing sector over the last decade has been good. It was ranked the fourth most competitive manufacturing nation in Deloitte’s global index for 38 nations, in 2013. Its economy also experienced significant expansion during the period 2006-2011, achieving a fiveyear compound annual growth rate (CAGR) of 7.8 per cent. ■■ Market size Manufacturing activities in India rose the most in 17 months in July 2014, on increased orders, as per the HSBC Purchasing Managers’ Index (PMI). PMI was at 53 points in July from 51.5 in June. With investors gaining more confidence in India’s economy, the country’s manufacturing sector could grow by up to 14 per cent, according to the government. India witnessed 15 per cent growth in the manufacturing sector in FY07. “Therefore, achieving 14 per cent growth is not impossible,” as per Mr Ajay Shankar, National Manufacturing Competitiveness Council’s member secretary. The Indian chemical industry is the

12th largest producer in the world and third largest in Asia, in terms of volume production. Electronics goods production in India is expected to touch US$ 104 billion by 2020. The production grew at a CAGR of 14.4 per cent during the period FY07-13. The country’s electronics market is anticipated to grow to US$ 400 billion by 2020 and expand at a CAGR of 24.4 per cent during the period 2012-2020. ■■ Latest Investments ■■ Pidilite Industries Ltd has approved the acquisition of adhesive business of Blue Coat Pvt Ltd for a cash consideration of Rs 263.57 crore (US$ 43.08 million). ■■ Toshiba Group plans to make India the design, manufacturing and export hub for its lighting business, and multiply the local headcount to design lights for planned smart cities airports, stadiums, highways, warehouses and factories, said Mr Yoichi Lbi, President & CEO, Toshiba Lighting & Technology Corporation. ■■ Chemical manufacturer Deepak Nitrite Ltd plans to invest Rs1,200 crore (US$ 196.18 million) to establish a plant for manufacturing phenol and acetone in Dahej, Gujarat. The capacity of the phenol plant will be 200,000 tonnes per annum (MTPA) and that of acetone will be 120,000 MTPA. ■■ Sesa Sterlite will spend up to Rs 8,000 crore (US$ 1.31 billion) over the next three to four years to expand its Lanjigarh refinery in Odisha, following consent from villagers. The company will now produce 6 MT of alumina from the present capacity of 1 MT, as per the Odisha government. ■■ Lanco Industries has lined up a Rs 325 crore (US$ 53.13 million) expansion plan to produce ductile iron pipes of smaller diameter. The company will add a capacity of 100,000 tonnes of pipes in the size range of 100 mm-300 mm. The

new project will take Lanco’s total capacity to 325,000 tonnes p.a. ■■ Tide Water Oil Co (India), a lubricant manufacturer, has signed an agreement with Japan’s JX Nippon Oil & Energy Corp to form a joint venture (JV) company in India - JX Nippon TWO Lubricants India. The companies will enjoy equal stake in the new entity, as per a statement by Tide Water Oil. The JV will manufacture, sell, market, and distribute the ‘Eneos’ brand of lubricants in India, Nepal, Bangladesh and Bhutan. ■■ Glenmark Pharmaceuticals plans to establish a plant in North Carolina, US, which will be its first manufacturing facility in North America. The company will start work on an oral solid unit before building manufacturing units for injectables and topicals. “Our plan to set up a new manufacturing facility in the US underlines the fast-paced growth the company has witnessed in a short span of eight years in the US, and our long-term commitment to the country,” as per Mr Glenn Saldanha, Chairman, Glenmark Pharmaceuticals. ■■ Siemens has announced the launch of operations at the Technology & Application Center (TAC) at Peenya, the industrial area of Bengaluru. This facility, the first in the country by Siemens, will facilitate machine tool manufacturers and end users to enhance productivity by testing machining techniques in real-world conditions. ■■ Kinfra’s proposal to develop an electronics manufacturing centre in Kochi has received in-principle approval from the Department of Electronics & IT Industry. The detailed project report will still have to be submitted for getting the final approval to establish the electronic cluster (EMC) with quality infrastructure at par with international standards, in the 75 acres owned by Kinfra in Kakkanad. India Newsletter • 15

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■■ Government Initiatives India and China have formalised an agreement to take forward the establishment of the China-dedicated industrial clusters in India, with the objective to enhance Chinese investment in infrastructure and manufacturing. The agreement was signed during Indian VicePresident, Mr Hamid Ansari’s visit to Beijing. Officials have described the Memorandum of Understanding (MoU) as more‘an enabling framework’ than a concrete agreement, as of now. The Indian government has given in-principle approval to five National Investment and Manufacturing Zones (NIMZs) outside the Delhi-Mumbai Industrial Corridor (DMIC) region. The zones include Nagpur in Maharashtra; Tumkur in Karnataka; and Chittoor, Medak and Prakasam in Andhra Pradesh. The state governments have to first acquire the land prior to any investments being made in the approved zones. In accordance with the vision of ‘Make in India’, the Cabinet Committee on Economic Affairs (CCEA) has cleared a scheme of Rs 931 crore (US$ 152.2 million) in the capital goods sector. ■■ Road Ahead India’s manufacturing sector is vital for its economic progress. Presently, the sector is an attractive hub for foreign investments. Several mobile phone, luxury and automobile brands, among others, have set up or are looking to establish their manufacturing bases in the country. Hi-tech exports are also predicted to enhance India’s manufacturing sector; they witnessed a CAGR of 26 per cent during the period 2007-2011, with exports reaching US$ 20.9 billion from US$ 8.1 billion in 2007. Pharmaceuticals and electronic goods dominate exports of hi-tech products, with the share of electronics growing nearly twofold in the period 2007-2011, according to an industry study. 16 • India Newsletter

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OPPORTUNITIES India has the potential to offer myriad of opportunities for foreign investors across a wide gamut of manufacturing sectors. See below an overview of the current Investment Opportunities and FDI policies for each sector. OVERVIEW AUTOMOTIVES

■■ Likely to become 3rd largest auto market in the world by 2016, accounting for more than 5% of the global vehicle sales ■■ India’s is 2nd largest two wheeler manufacturer, largest motor cycle manufacturer and 5th largest commercial vehicle manufacturer ■■ Expected size by 2016 is USD 145 billion. AUTO COMPONENTS ■■ Worth USD 39.7 billion in FY2012–13 ■■ India’s exports of auto components increased at a CAGR of 17% during 200813; Exports have risen to USD 9.7 billion in 2012-13 DEFENCE ■■ 3rd largest armed forces in the world. ■■ Largest importer of conventional defence equipment ■■ 70% of defence requirements are met through imports ■■ Defence budget in 2014-15 is USD 38 billion, expected to reach USD 50 billion by 2018 ELECTRICAL EQUIPMENT ■■ Estimated output by 2022 approx. USD 100 billion ■■ The market expanded at a CAGR of 10.5 per cent over (FY07–12). ESDM

■■ Worth USD 68.31 billion in 2012; anticipated to be USD 94.2 billion by 2015; CAGR of 9.88% between 2011 and 2015

INVESTMENT FDI POLICY OPPORTUNITIES ■■ Passenger Vehicles ■■ 100% FDI is allowed under the automatic route ■■ Two Wheelers ■■ Three Wheelers ■■ Commercial Vehicles ■■ low cost electric vehicles

■■ Engine & Engine Parts ■■ 100% FDI is allowed ■■ Transmission & Steering under the automatic route Parts ■■ Suspension & Breaking Parts ■■ Electrical parts ■■ Manufacturing of defence equipment ■■ Maintenance, repair and overhaul segment ■■ Engineering services outsourcing

■■ Up to 49% under the government route and beyond 49% through CCS (in case of transfer of technology)

■■ Generation Machinery: Boilers, Turbines, Generators ■■ T r a n s m i s s i o n Machinery

■■ 100% FDI is allowed under the automatic route subject to all the applicable regulations and laws

■■ Consumer electronics ■■ Strategic electronics ■■ Medical electronics ■■ Avionics ■■ Fabless manufacturing ■■ Automotive electronics ■■ E l e c t r o n i c Manufacturing Services

■■ 100% FDI through automatic route for ESDM except for defence electronics

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OVERVIEW

INVESTMENT OPPORTUNITIES ■■ Active pharmaceutical ingredients (APIs) ■■ Contract research and manufacturing services (CRAMS) ■■ Formulations

FDI POLICY

PHARMACEUTICALS

■■ Accounts for about 2.4 % of the global pharma industry in value terms and 10% in volume terms ■■ Expected to grow at 12.1% during 2012–20 ■■ Expected to reach USD250 billion by 2020 from the current USD65 billion

CONSTRUCTION

■■ Second largest employer and contributor to economic activity, after agriculture sector. ■■ Accounts for 2nd highest FDI inflow after the services sector ■■ Worth USD 78.5 billion in FY13; expected to grow to USD 140 billion in FY17.

■■ Residential, retail, ■■ 100% FDI is allowed commercial and hospitality under the automatic route sectors subject to conditions. ■■ Technologies and solutions for sustainable cities, low cost and affordable housing, Green building solutions, environment friendly building materials ■■ Training and skill development of construction sector workers ■■ Smart cities ■■ Urban water supply; urban sewerage & sewage treatment

FOOD PROCESSING

■■ Industry size is Rs 845 billion in 2012-13, growing at 8.4% for the last five years ending 2012-13 ■■ Value addition of sector as share of GDP manufacturing was 9.8% in 2012-13

■■ Fruits and Vegetables ■■ Fermentation products ■■ Beverages ■■ Dairy ■■ Food additives, nutraceuticals ■■ Confectionary and bakery ■■ Meat & poultry ■■ Fish and sea foods processing ■■ Grain Processing ■■ Food packaging ■■ Food processing equipment ■■ Consumer food

18 • India Newsletter

■■ 100% FDI is allowed under the automatic route for Greenfield projects. ■■ For brownfield project investment up to 100% is under the government route.

■■ 100% FDI automatic route of the food except for items for MSME.

through for most products reserved

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OVERVIEW

INVESTMENT OPPORTUNITIES ■■ Tanning and finishing of leather products ■■ Manufacturing of leather garments ■■ Manufacturing of leather footwear and footwear parts ■■ Manufacturing of leather goods, such as harness and saddlery.

FDI POLICY

■■ FDI is subject to the existing sectoral policy and regulatory framework and varies across the value chain

LEATHER

■■ Industry size approx. USD 11 billion (exports - USD 6 billion and domestic market - USD 5 billion) ■■ Exports projected to grow at 24% pa in next five years. Domestic market expected to double in next five years.

OIL AND GAS

■■ 4th largest consumer of crude oil and petroleum products in the world (2013) ■■ Oil imports constitute 80% of India’s total domestic oil consumption (May 2014). ■■ At the end of 2013, India had 215.066 MMTPA of refining capacity, making it the second-largest refiner of crude oil in Asia.

■■ Underground coal gassification ■■ E&P services and equipments ■■ City gas distribution ■■ Refinery ■■ T e c h n o l o g y partnerships in upstream sector

TEXTILE

■■ 2nd largest textile manufacturing capacity globally ■■ Sector contributes 14% to industrial production and 4% to GDP and 13% of country’s export earnings ■■ Domestic textile and apparel industry is estimated to reach USD 100 bn by 2017 from USD67 bn in 2014. ■■ Exports are expected to increase to USD 65 bn by 2017 from USD 40 bn in 2014

■■ Entire value chain of ■■ 100% FDI is allowed Synthetics under the automatic route ■■ Values added and in textile sector speciality fabrics ■■ Technical Textiles ■■ Garment ■■ Retail Brands

CHEMICALS AND ■■ Size of the industry PETROCHEMICALS (2012-13) is around USD 144 billion ■■ India accounts for approximately 16% of the world production of dyestuff.

■■ Petrochemicals ■■ Specialty chemicals ■■ Agrochemicals ■■ Colorants ■■ Technical training

■■ 100% FDI is allowed under the automatic route subject to all the applicable regulations and laws.

India Newsletter • 19

Embassy of India, Vienna

EXPERT BUSINESS ADVICE This article has been authored by Sumit Shashi & Co. (SSC) (India), a professional service firm which specializes in providing tax advisory and compliance services to domestic as well as overseas clients, and Roth Consulting GmbH, SSC’s network firm in Austria. For further details or to contact the firm, please email Mr. Heinrich Roth under h.roth@roth-consulting.at or visit www. roth-consulting.at

Requirement to file tax return in India ■■ Legal Position As per Indian tax laws, every company is required to file a return of income with revenue authorities, in respect of income earned during the previous financial year (period of 12 months ending on March 31 of every year). This requirement is applicable to all domestic companies, irrespective of level of business activities carried out in the financial year. In case of foreign companies, the requirement to file return of income has been explained by judicial authorities for the following category of taxpayers: Category I: Where income is liable to tax under domestic tax law and DTAA Category II: Where income is liable to tax under domestic tax law and not liable to tax under DTAA Category III: Where income is not liable to tax under domestic tax law and DTAA Based on current jurisprudence, the emerging position is that taxpayers falling in Category I and II are mandatorily required to file a return of income in India, whereas taxpayers falling under Category III may, at their option, choose to not file the tax return. Generally, in case of provision of technical services by foreign companies where the payer deducts Indian withholding tax (WHT), the subject income is liable to tax in India and therefore, the foreign company is liable to file a tax return in India. The due date to file a tax return is 20 • India Newsletter

September 30 following the close of financial year (November 30 in case Indian Transfer Pricing provisions are applicable). The tax return can be filed, even after expiry of due date within a period of 2 years from the close of financial year. (Subject to interest on unpaid taxes and nominal penalty of INR 5,000 for delay beyond 1 year from close of financial year (penalty applicable only in case imposed by revenue authorities) In other words, foreign companies can still file tax returns for the following periods: For FY 2011/12: Until March 31, 2014 For FY 2012-13: Until March 31, 2015 ■■ Procedure to file tax return The tax return is required to be filed in electronic format in Form ITR – 6 and uploaded using digital signatures of the authorized signatory. The preparation of tax return requires basic corporate information such as contact details, date of incorporation, details of directors, shareholders and subsidiary companies (if any) etc. It is mandatory to have a Permanent Account Number (PAN) to file a tax return. In addition to corporate information, details of income earned, applicable tax rate and payment of tax liability (WHT, self-assessment tax etc.) are required to be included. For a foreign company earning income from provision of technical services, without constituting a permanent establishment (As defined in relevant Double Taxation Avoidance Agreement) in India, the process of tax return preparation is expected to be fairly simple.

■■ Method of collating information In the process of collating required information for preparation of tax return, the most critical piece of information is identification of transactions where payers have deducted Indian WHT, the amount of WHT deducted and Tax Deduction Account Number (TAN) of the payer. This information is readily available on the website of revenue authorities (in Form 26AS) and can be downloaded by registering on the portal https:// incometaxindiaefiling.gov.in/. Kindly note that information in Form 26AS is based on WHT returns filed by the payer. Therefore, it is advisable to verify the data for its completeness and accuracy with internal records maintained by the company. ■■ Why file a tax return The revenue authorities have recently focused on identifying defaulters in filing of tax return and issued notices instructing non-filers to comply. Such notices can be issued any time before expiry of 7 years from the close of financial year. Thus, it is advisable to file income tax return for the following reasons: ■■ Compliance requirements

with

statutory

■■ Avoid being identified as a defaulter by Indian revenue authorities ■■ Claim refund of extra WHT (if any) deducted by payer in India ■■ Assistance in claiming credit of India tax against tax liability in home country

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PERSPECTIVES ON INDIA India: A global solution provider by Aparna Dutt Sharma, CEO, IBEF India is fast emerging as a solution provider in the global engineering and design industry. Engineering and research and development (ER&D) export revenue from India is expected to touch US$ 37-45 billion by 2020, up from an estimated US$ 12.4 billion in 2013-14. Presently the country has over 600 local and 400 global ER&D centres employing over 200,000 engineers from service providers and engineering firms. It is interesting to note that the scalable talent pool across diverse areas of science, technology and management along with robust academic and research infrastructure is spurring the industrial R&D activity in the country. At a time when increasing cost pressures and demand saturation in developed economies is encouraging firms to increase ER&D spends on efficiency improvements and product localisation, the presence of a large pool of engineers and data scientists makes India an attractive destination for global corporations for offshoring their ER&D needs. Given the countryâ&#x20AC;&#x2122;s inherent strengths in the ER&D industry, both local and international companies are expected to continue to invest in this space with a long term vision in mind.

Automotive R&D in India headed for a shift by Aparna Dutt Sharma, CEO, IBEF The R&D ecosystem in India is undergoing fundamental transformation. Indian automotive manufacturers are investing heavily in the race to stay ahead on the innovation curve in the global

automotive industry. In this drive, they are attracting some of the best global talent to their R&D divisions. On the other hand, foreign companies are successfully leveraging the talent pool in India and endeavouring for higher degrees of localisation. Indian firms that are frontrunners in this regard include Hero, Mahindra & Mahindra (M&M) and Tata Motors. Over the past three years, R&D investments by the top three Indian two wheeler and four wheeler companies have grown at a compound annual growth rate (CAGR) of 19 per cent. M&M has around 2,500 R&D engineers in its team today as compared to just 90 in 1993. Hero is investing Rs 500 crore to build an R&D centre at Kukas near Jaipur, Rajasthan. It has roped in BMW veteran Markus Braunsperger, who will lead a 500 people team that will align with Heroâ&#x20AC;&#x2122;s global technology partners. Tata Motors has its R&D operations in Pune, Coventry (UK) along with the Trilix workforce (Italy). Its R&D team now comprises 4,500 people growing by 5-10 per cent over the past year. Its operations are headed by Tim Leverton (formerly part of JCB and BMW). On the other hand, foreign firms including BMW, Mercedes, Renault-Nissan, Volvo, GM and Honda have also set up R&D centres in India over the past few years. These developments are attracting a huge influx of quality global R&D talent into India thereby accelerating the maturing of the R&D ecosystem in the country across the three fundamental areas of R&D fundamental research, designing and engineering of new vehicle models, and development. India is steadily gaining in strategic importance for both Indian and foreign multinational companies as a global R&D hub.

Indian handicrafts command a premium in the global market by Rahul Garg, Co-Founder and CEO, Artisangilt We realised in the early stage of our start-up journey that Indian handicrafts are very popular and there is a strong market for these products both in India and abroad. Our focus in this segment was not to focus on generic products. We started with around 14-15 art forms and there were some segments that were brought by us online for the first time. At a time when most of our competitors were selling generic products, our strategy to create a unique online collection gave us instant access to a niche market. However, from a business standpoint, we realised early on that handicrafts is a slow moving item as compared to ethnic wear and textiles. As a result, out of the 45,000 products listed on our website around 10 per cent of the products are handicrafts. While we continue to get international orders for the handicrafts and other products listed on our website, we do not aggressively market as these products are fragile and attract a high shipping cost. Our current focus is to establish our brand and reach a scale where we can start aggressively marketing Indian handicrafts across the globe. On a sectoral level, there is no doubt over the fact that India is known for producing high quality handicrafts and as a result, Indian handicrafts command a premium in the global market. The varied art forms available in the Indian market are very popular is different parts of the world. India Newsletter â&#x20AC;˘ 21

Embassy of India, Vienna

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.

India International Leather Fair is a 3 day event being held from 1st February to 3rd February 2015 at the Chennai Trade & Convention Centre in Chennai, India. This event showcases products like Leather, leather products, fashion accessories, machinery and equipment, chemicals etc. in the Leather & Leather Products industry. BioAsia seeks to enhance, enrich and encourage newer innovations, path-breaking discoveries and effective solutions in the industry by offering a vibrant global platform for convergence of the key stakeholders - Biotech & Biopharma Companies, research institutions, investors, service providers, policy makers, regulators and analysts. 22 â&#x20AC;˘ India Newsletter

2-4 February Hyderabad

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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.

India Newsletter • 23

Embassy of India, Vienna

TOURISM

Puri’s Incredible Rath Yatra by Hugh & Colleen Gantzer Even the gods need a break. On a cloud-scudding, east-coast day in Odisha .. a state called „Orissa by the British ...we joined three great deities on their festive holiday. With us were a million other people. They streamed down side streets and lanes and little winding alleys, flowed into the broad Grand Road filling it, packing in tighter and tighter till all we could see from our grandstand in the terrace of the palace was a seething river of heads streaked with snaking currents of saffron, red, white, blue and khaki as more drumming, chanting, sects and cults flowed into the flood of devotees. This day was Puri’s yearly outdoor encounter with The Lord of the Universe, Jagganath, his brother Balabhadra and their sister Subhadra. Every so often, in an auspicious year and time, these three implacable deities have themselves renewed. Priests go out into the forests and identify a sacred, medicinal, neem-margosa tree. They fell it in the prescribed manner, have it carved into three icons painted in the traditional way. The three statues have bright faces and 24 • India Newsletter

bodies but no hands because, according to legend, a sacerdotal carver had been interrupted before he could complete his task and so, traditionally, the sculptures have remained that way ever since. Then, in the dark of night, a blindfolded priest, his hands wrapped in cloth, transfers the life substance from the old idols into the new statues. The statues then become idols, worthy of worship, and the old icons become statues again and are buried. Every year, the sacred idols are bathed, rested, refreshed, installed in their newly carved and painted wooden chariots outside the huge temple and, with great ceremony, towed to their vacation shrine. There they will rest and recuperate for a while, before being hauled back and re-installed in the imposing temple. We, and an incredible million devotees, had come to see the stupendous holiday procession of the Lords. On that hot day, the frisson of festivity was electric. The huge rathe-chariots where zestful crowds clanged cymbals, thudded drums, danced and sang. A streetside eatery got ready to serve steaming poori-bhaji to eager

pilgrims. After breakfast, the police cleared a path for hurrying heralds lofting standards and banners. They stopped at the gate of the palace. The Gajapati Maharaja, linear descendant of the great Ganga dynasty whose ancestor had brought the Lords from their forest home to Puri, stepped out. Dressed in ceremonial white robes with a plumed and jeweled turban, and the sash and cummerbund of office, he was accompanied by the head priest. He got into a silver palanquin. Fluttering flags and standards tracked his passage through the jubilant crowd. Then, using a golden broom, he carefully swept the forecourt of the huge ratha-chariots. The hours clicked by, un-noticed. Lunch was served: Oriya cuisine is delicately flavoured and delicious.. A palpable hush descended and we heard crows cawing in the still air. Then, suddenly, there was a reverberating roar from a million throats. Hundreds of men bent their backs, picked up the thick ropes of the chariots, strained. Another roar filled the air along with the echoing call of conches, a ringing of bells, a clashing of gongs, a thudding of

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drums. Slowly, almost reluctantly, Balabhadra’s chariot began to move. A bare-chested panda-priest was perched confidently on the mudguard of an enormous wheel as it turned slowly. Joyous crowds closed in behind like shimmering water in a ferry’s wake. We looked at our watches. Time had flipped. We had been buoyed up for eight hours and the yatra had only just begun. A red fire tanker sprayed a plume of water over the crowd as pilgrims

danced in ecstatic devotion. A mummer dressed like Shiva struck poses with a brass trident then merged with the crowd as the police cleared a broad path for the first rath. Slowly, ponderously, the black and red chariot of Subhadra rolled into view. It was crammed with saffronclad servitors clanging gongs, waving cheerily. The chariot moved on, the crowd flowed in behind it. Cameras clicked and flared around us. A diamond merchant sat crosslegged on the floor of our terrace, entranced in worship. “He is a great

devotee of Lord Krishna” his friend told us. The diamond merchant threw up his hands in veneration, prostrated himself as the revered chariot of Jagannath, Lord of the Universe, rolled into view. Two young pandas sat astride the white, wooden, horses. Worshippers on our terrace joined their hands and bowed deeply in obeisance till this, the last and most powerful ratha, had passed. The three chariots began to shrink with distance as they drew closer to Gundicha temple where the Lords would rest for some days before making the return journey to the main temple. The great cacophony of celebration began to subside as the crowds dispersed in the soft light of sunset, laughing and clapping, charged by their twelve-hour close encounter with their gods. We had been up here, streaming sweat, all through a long day but, strangely, we still felt unusually vitalized by it all. That evening, in the lobby of an upscale hotel, we saw replicas of the three deities. Their images, totemic, basic and extremely powerful, have generated a burgeoning efflorescence of religious art and the neat village of Raghurajpur depends on it. It came into being, originally, to reassure devotees when the great idols were sequestered after their ritual bath. They needed the presence of their images, From there, these bright icons spread across the globe as pilgrims carried them into their homes and installed them in their family altars. As we were leaving Puri it struck us that the name of the Lord of the Universe has also spread over the world: perhaps unwittingly. When the British first saw the great Rath Yatra they were so impressed by its implacable power that they cloned a word to describe it. According to our dictionary, the English word for a massive inexorable force that crushes whatever is in its path is juggernaut. It should really be Jagganath – Lord of the Universe. India Newsletter • 25

Embassy of India, Vienna

26 â&#x20AC;˘ India Newsletter

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EMBASSY EVENTS REPORT On October 9th, 2014, the Indian Embassy, Vienna, in cooperation with the Austrian Chamber of Commerce, organized the “Make in India” launch event at the WKO in Vienna. The main focus of the event was the recently announced “Make in India” campaign. The morning was opened by the Regional Director of Foreign Trade (South/South-East Asia) at the WKO, Mag. Hans-Jörg Hörtnagl and was followed by a “Make in India” presentation by H.E. Ambassador Misra, which counted with the showing of a “Make in India” video. Following the presentations, the 35+ guests were invited to ask questions and raise their comments, which led to a very interactive discussion. All guests expressed a positive impression about the prospects for India-Austria business as well as the “Make in India” campaign. Some of the attending companies have already established business in India and some others are interested to invest in India. The event also counted with the participation of guests from India-desks abroad.

India Newsletter • 27

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 marketingofficer@ indianembassy.at

Jodhaa Akbar ■■ Synopsis: Jodhaa Akbar is the story of the greatest Mughal emperor that ruled Hindustan (now India), Jalaluddin Mohammad Akbar, and the fiery young Rajput princess, Jodhaa. Set in the sixteenth century, this epic romance begins as a marriage of alliance between two cultures and religions, for political gain, with the Hindu King Bharmal of Amer giving his daughter’s hand to a Muslim Emperor, Akbar. When Akbar accepts the marriage proposal, little does he know that in his efforts to strengthen his relations with the Rajputs, he would in turn be embarking on a new journey - the journey of true love. From the battlefield where the young Jalaluddin was crowned, through the conquests that won him the title of Akbar the Great (‘Akbar’ in Arabic means great), to winning the love of the beautiful Jodhaa, Jodhaa Akbar traces the impressive graph of the mighty emperor and his romance with the defiant princess. ■■ Genre: Action / Adventure ■■ Directed by: Ashutosh Gowariker ■■ Starring: Hrithik Roshan, Aishwarya Rai Bachchan, Sonu Sood ■■ Released: 2008 ■■ Duration: 213 Minutes ■■ Language: Hindi ■■ Subtitles: German ■■ Image Quality: HD

Showtime October 31st, 17:30 Indian Embassy Business Centre (1st Floor, Kärntner Ring 2, 1010 Vienna) 28 • India Newsletter

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NOTICE BOARD EMBASSY’S LIBRARY ■■ The EMBASSY’S library is opened DAILY from 10am to 1pm without appointment. NEW OPENING HOURS! ■■ 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 10am to 1pm. NEW OPENING HOURS! ■■ 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: 0043 1 505 866 15 and cpolitical@indianembassy.at

MINISTRY OF EXTERNAL AFFAIRS GOES MOBILE Now you can... ■■ Avail services : passport, visa, consular assistance ■■ Ask your Minister : on the go, anytime, anywhere ■■ Follow your PM : on his visits abroad ■■ Find the nearest Indian Mission/Post : for emergency consular assistance ■■ Be informed : about India’s Foreign Relations on the move and form your own opinions ■■ Know more : about how to undertake Kailash Manasarovar Yatra and Haj Pilgrimage ■■ Download and watch : pictures & documentaries on India ■■ Play and Personalize : what you need, when you need ■■ Share and contribute : your views, pics & suggestions All this & much more on your smartphone Ministry of External Affairs proudly presents “MEAIndia” – an integrated smart app for mobile and other hand held devices ‘MEAIndia’ is now available for download on App Store and Google Play Store..

FACEBOOK ■■ Our Facebook page targets the India-Austria community and covers subjects such as Business, Culture, Embassy News, India-related events and programmes in Austria, and much more. ■■ We have reached the 1700 followers mark! ■■ ‘Like’ our facebook page and be the first to know!