Indian Economy - News & Updates - Archive

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RIL plans to invest Rs 56,000 cr in oil biz
BS Reporter / Mumbai August 05, 2007

Reliance Industries, the country’s most valued company, plans to invest up to nearly $14 billion (Rs 56,000 crore) in oil exploration and production business and laying transportation pipelines in next two to three years.

President (development and production) S C Varma said this today at a meeting organized by the Confederation of Indian Industries. He said the company would investment Rs 12,000 crore for laying 1,400 km pipelines.

Company observers said Reliance was expected to spend a large chunk of this investment for exploration of new blocks at Mahanadi, Cauveri and Saurashtra. The 1,400 km pipeline will pass through the breadth of the country, connecting eastern part to the western end.

The company has earmarked an investment of Rs 20,000 crore for exploration at Krishna Godavari. Production of gas from the K-G basin will begin by June 2008.

The company is especially bullish on city gas networks, where its advantage over competitors would be a captive supply of gas. The company intends to set up gas networks in hundreds of towns across the country.

The three key pipelines being planned by the Mukesh Ambani-controlled company are from Kakinada in Andhra Pradesh to Bharuch in Gujarat and two coastal pipelines to West Bengal and Chennai. Reliance had already signed contracts worth Rs 18,000 crore with suppliers of pipes, machinery and pumping equipment, for production of gas.

Gas consumption may rise to 400 million cubic metres a day by 2025 if the economy grows at the projected rate of 8 per cent a year. At present, there is a demand of 170 million cubic metres a day, while supply stands at 93 million cubic metres a day.

 

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This is an excellent article. Very insightful.

Call it a deviation from the normal. Good to see atleast some venture on a new path rather than flocking in the same direction.

 

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Kolkata 3rd major IT destination by 2010: Buddhadeb

Kolkata, Aug 4 (UNI) West Bengal Chief Minister Buddhadeb Bhattacharjee has asserted that Kolkata is poised to be the third most sought after BPO destination in the world by 2010.

While inaugurating an IT park, 'Millenium City', here yesterday, the chief minister claimed that the state's growth rate in IT industry was much higher than the national average.

''The extremely talented human resource and labour cost advantage provided by Bengal was instrumental in ensuring the unprecedented growth of this industry in the past few years,'' Mr Bhattacharjee elaborated.

He further claimed that about 15,000 youths in the state had availed of employment opportunities in the state's IT sector this year.

''Bengal as a whole is benefitting enormously from this boom in the economy. Durgapur now has more than 1,000, Siliguri more than 200 and Kalyani has more than 100 IT professionals,'' Mr Bhattacharjee said.

He stated that while Indian economy was growing at as high as 8-9 per cent, the new employment opportunities created had decreased by almost four per cent in the last fiscal.

Therefore, it was imperative to create more jobs so that the benefits of economic growth could be realised in all quarters of the society.

''While Hyderabad and Bangalore had been very successful in laying the foundation of IT way back in the 1980s, Bengal was lagging behind so far. However, the scenario has changed, with IT majors, including IBM, Siemens, Alstom and Lufthansa choosing Kolkata as their favoured destination,'' the chief minister said.

State IT Minister Debesh Das also informed the mediapersons that while the IT market across the world is estimated at USD 100 billion, India has managed to attract investment of a mere USD 0.2 billion. However, India has set a target of attracting investment of upto USD seven billion by 2010, he added.

 

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US to harness business prospects in East India

Kolkata, Aug 4 : In view of the enourmous business prospects in Eastern India, the US government has decided to create a conducive environment for trade and commerce.

Talking to mediapersons here today, US Minister Counselor for Commercial Affairs Carmine D'Aloisio said east India, especially West Bengal, had a huge potential in Biotechnology, Pharmaceutical, Research & Development and Food Processing sector.

Mr Carmine said the American Consulate would conduct various training programmes for entrepreneurs to realise the loopholes in various sectors while trading and make them aware of the ever growing opportunities.

He also said that the consulate would help American companies to develop in West Bengal for promoting US goods in the Indian market and vice versa in their country.

The Indo-US trade had doubled in the past few years and the ongoing talks between the US President George Bush and Indian Prime Minister Manmohan Singh would help increase its manifolds.

He informed that India's nuclear sector should be included in the global supply chain and cater to the needs of the third world countries.

''The low import duties in India have allowed several foreign companies to enter the market here,'' he said adding that business environment and policies should be improved to make India a major global player.

Citing examples of countrywide protests on land acquisition for Industrialisation, Mr Jardine said no economy can sustain without industries and hence the farmers have to spare some land for the economic growth of the country.

He also stressed on pro-growth, pro-consumer strategies along with more partnerships between the two countries so as to create decent job opportunities in the country.

 

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UK wants more access to Indian market for its financiers
4 Aug, 2007, 2053 hrs IST, PTI

CHENNAI: The United Kingdom on Saturday asked for more access to the Indian market for its financial institutions, saying it would strengthen the domestic sector.

British Deputy High Commissioner in South India Mike Connor said India has caps in insurance, banking and software development sectors, which are Britain's strengths.

He said the UK is predominantly a service economy and this is reflected in the UK investments in India: HSBC, Standard Chartered Bank and a few insurance and software companies.

"But it is these very sectors that India has blocks or caps on FDI," he said while speaking at a public lecture on "India and the UK: Opportunities for Economic Partnership".

The bilateral trade between India and the UK was over eight billion pounds, but "there is still a limitation on the access of major British financial organisations to the Indian market," Connor said.

"In banking there are still several regulatory barriers, although some banking reforms have been adopted. Higher ceilings on foreign shareholding in banks would encourage transfer of expertise, strengthen India's financial sector and benefit consumers with wide access to financial services."

British law firms are also prevented from practicing in India, he said.

"British law firms be allowed to be practice in India. They will bring with them expertise, business and major employment opportunities".

"They do not want to deprive Indian lawyers of work. UK firms probably have a strong tradition of employing Indian people to run their companies here in India right to the highest management levels," Connor said.

 

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Egypt wants a bite of Indian BPO mkt
5 Aug, 2007, 0924 hrs IST, AGENCIES

CAIRO: Egypt has set its sights on grabbing a share of the multi-billion dollar Indian-dominated call centre market and is looking to an unexpected corner for a helping hand, India.

As it makes its pitch to the world, touting a multilingual workforce over India's English-speakers, a time zone shared with Europe and proximity to the US, Egypt is marketing its edge over India to India itself.

The government has sent a high-level delegation to India to convince the IT behemoth to sub-outsource its outsourcing to Egypt.

Several cooperation agreements and memoranda of understanding were signed between the two countries, and Indian industry giants such as Wipro and Satyam have signed agreements to set up support centres in Egypt.

According to the Yankee Group, a US-based technology research and consulting firm in IT outsourcing, Egypt is 15 to 20 years behind India, which has boomed to dominate 60 per cent of the overall offshore market.

But the south Asian giant struggles to maintain an adequate supply of skilled workers, and handing some of the pie to Egypt could be mutually beneficial, Egypt says.

The Information Technology Industry Development Agency (ITIDA) was set up by the government of technocrat Prime Minister Ahmed Nazif in 2004 to guide Egypt's burgeoning IT industry and propel it onto the world stage.

The government hopes to entice major IT players to set up their call centres, accounting and payroll management, known as business process outsourcing (BPO), in Egypt, pumping resources into an industry it hopes will elevate the national economy.

"This sector will lead to a renaissance in Egypt," ITIDA CEO Mohamed Omran told media. So will Egypt become the new India? "Absolutely not," said Omran. "We cannot compete with India, we don't want to compete with India, we want to cooperate with India."

"It's what makes the most sense," said Mai Farouk, an independent IT analyst, currently researching Egypt's outsourcing industry.

"It would help the industry grow and elevate its standard," said Farouk, but she fears that the lack of a formal analysis of Egypt's IT experience so far could send the country down the wrong path.

"There has been no thorough analysis of the Egyptian experience," she told media. "In Egypt, if a type of business is successful, everyone jumps into it. It is an individual and business trend here.

"We need to study and learn from other's mistakes," she said. One problem facing India is the country's poorly planned roads making it difficult for staff to reach some of the outsourcing centres, something Egypt has picked up on.

Far from the clutter of Cairo, the government has allocated a vast expanse of desert to the highly marketed "Smart Village," a gated compound built with state of the art technological services.

The lush techno park already houses industry giants Microsoft, Vodafone, Ericsson and Alcatel among others. At the high-tech Vodafone Egypt offices, employees have already tasted some of that renaissance mentioned by Omran.

Staff have access to their own restaurant, cafe and gym. Sherif Bakir, head of retail at Vodafone Egypt, says the Smart Village has been very enticing for investors as well as new recruits.

"Young graduates in Egypt are attracted by so many factors in the IT industry: the prospects of a career, the salaries (which are four times that of an average starting salary) and the opportunity to work somewhere like Smart Village with all its benefits," he said.

"And in Egypt, being a call centre agent is not seen like being a telephone operator. It's not a dead end job, it's seen as a stepping stone to a career in the IT industry."

But critics say Egypt's outsourcing "boom" won't develop into more than a boutique industry, with the much-touted multilingual and skilled human resource pool amounting to a tiny percentage of Egypt's 76 million population.

A high level of illiteracy, dire poverty and a very large rural population mean that most won't touch the benefits of a booming IT industry.

Omran, of ITIDA, says the figures speak for themselves. "A tiny percentage of a huge population is a lot of people," he said. "We're talking millions. And IT is like blood, it gets into the veins of all industries and sectors."

He is eager to showcase his agency's pride and joy: Xceed, one of the largest contact centres in North Africa and the IT arm of the government-owned Telecom Egypt.

At the 16,000-square-metre (170,000-square-foot) space equipped with "cutting edge fault tolerant IT infrastructure," 1,200 agents offer customer and technical support to General Motors, Microsoft and Oracle among others, in eight languages including English, French, German and Hebrew.

According to Xceed, in 2005, nearly 70 percent of total outsourced Egyptian workstations were supporting local customers. "However, by 2010 this will be nearly completely reversed with 65 percent of Egyptian outsourced workstations servicing foreign end-users."

The ministry of communication and information technology is trying to attract foreign companies with a special focus on call centres, by offering five to 10 year tax exemptions, branding Egypt as a safe oasis in a troubled region.

But there is enormous political uncertainty in the country as to who will succeed 79-year-old President Hosni Mubarak, who has ruled Egypt for over a quarter of a century.

 

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Mumbai or Bust -- In the Lap of Luxury
Airline Now Offers High-End Service Between the U.S. and India

By BOB JAMIESON
ABC News
Aug. 5, 2007

A new era in air travel between the United States and India began this weekend with the inauguration Saturday of Jet Airways service between Newark Airport just outside New York City and Mumbai.

Jet Airways? Is that a cheap seat carrier?

Few are familiar with the home-grown Indian airline, but its founder Naresh Goyal says it won't take long for travelers to become familiar with what he believes will be an airline with luxury service that rivals trend-setters Singapore, Cathay, British Airways and Emirates.

"My goal," said Goyal at a recent lunch in New York, "is to be better than those airlines in terms of service, and we are already remaking the image of Indian air carriers."

Until recent deregulation, Air India was the only carrier permitted to offer international travel from Bombay, Mumbai and other gateways in India. Jet Airways, founded 14 years ago as a domestic carrier, has become the first to fly to the United States as part of an aggressive expansion plan that Goyal believes will be driven by the booming Indian economy.

"There are about 30 million people in India who are very rich," says Goyal, "and another 300 million middle class."

With India's increasing connections to the global market, Goyal says there is great demand for premium air travel and quality service like that branded on board Singapore, Cathay and British Airways.

"Because of the stunning growth of the Indian economy," says a Jet Airways spokeswoman, "particularly the emergency of Indian companies in the global market, there are more and more travelers who want premium service" which is not offered by other Indian carriers.

India's economy has already attracted Continental to begin flights between Newark and Mumbai, but Jet Airways has a strategy to capture travel to and from India's vast country.

Jet Airways now flies between 40 cities in India and has quickly added routes to London, Sri Lanka, Nepal and Southeast Asia. It has established a hub at Brussels' airport, underused since the demise of that country's state carrier.

Jet Airways will fly from Newark to Mumbai through Brussels and soon from Toronto, and then from cities other than New York in the United States, coordinating schedules so that flights from many cities in India can connect to various European and North American destinations.

It will fly new Boeing 777-300 ER aircraft with newly designed three-class cabins and service that emphasizes India's roots but with a heavy helping of modern grace.

But at the New York lunch, Goyal emphasized Jet Airways' high level of service and plush, roomy seats in first and business class.

"We aim to be one of the top five airlines in the world in very short order," he said.

In first class, Jet Airways offers a mini suite with sliding double doors, an 83-inch-long lie-flat bed, a 23-inch video monitor to show films and videos from the extensive entertainment system, and a "buddy" seat that permits two travelers to dine together.

In business class, Goyal says there are wide, lie-flat beds and high-level food and wine.

In all three classes of service, including coach, toilets in the lavatories will include a bidet function, a European touch that is now beginning to appear on some Asian airlines.

His spokeswoman says service aboard the flights will dramatically change American perceptions of Indian air carriers.

"There is no other word but graciousness," she says, "it offers a level of service that will destroy many stereotypes about India and its airlines."

It will also offer competition and the prospect of lower premium class fares, which now range from upwards of $4,000 to $11,000 depending on class of travel.

Jet Airways is betting it has the right formula -- in fact, betting $3.7 billion on its international fleet expansion, including orders for 10 of the new Boeing 787 Dreamliners.

 

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Reliance to invest $14 bn over 2-3 years
5 Aug, 2007, 1616 hrs IST, REUTERS

MUMBAI: Reliance Industries Ltd, plans to invest up to Rs 60 billion ($14 billion) in oil exploration and production and in laying transport pipelines, a national paper reported on Sunday.

Of this amount, the company would spend about Rs 120 billion in laying 1,400 km of pipelines over two to three years, the paper quoted S C Varma, President, development and production of Reliance Industries, as saying.

India's gas consumption may rise to 400 million cubic metres a day by 2025 from 170 million cubic metres now, if the economy grows at a projected rate of 8 percent a year, the paper said.

Reliance, which discovered India's largest gas field in 2002, in July made a new discovery in a deepwater block in the Cauvery basin, off India's east coast.

The company has said it is spending about $5.2 billion to develop and $3.5 billion to maintain production from deep-sea gas fields off the east coast. A global shortage of rigs was affecting its exploration and development plans, Reliance Industries has said.

 

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Working together
India should not regard Africa as simply a source of natural resources. Instead, it needs to invest in the region's human capital and share Indian know-how.

Alex Vines and Gareth Price
Guardian, UK
August 5, 2007

China's increasing influence in Africa has attracted great attention in recent years. But Asia's other rising power, India, is also becoming more active on this front, as its economic links are moving beyond its traditional partners in the British Commonwealth. Indeed, India's non-oil trade with West Africa currently stands at more than $3bn and is rising fast, accounting for 1.2% of the country's total foreign trade.

India's economic activity in Africa goes far beyond its ever popular Bollywood movies. Indian investment in Côte d'Ivoire is expected to grow to $1bn by 2011, which represents 10% of total Indian foreign investment in the last decade. India's state-run Oil and Natural Gas Corporation (ONGC Videsh) produces Sudanese oil, and over the next two years Indian diplomatic missions will open in Mali, Gabon, Niger, and Burkina Faso. Until 2003, the Indian Foreign Ministry had a single Africa division; it now has three: West and central Africa, East and Southern Africa, and west Asia and North Africa.

A study by the Federation of Indian Chambers of Commerce and Industry identified (pdf) five main sectors that can act as "engines of growth" to boost Indo-Africa trade: pharmaceuticals and the health sector, information technology, water management, food processing, and education.

Nigeria is India's largest trading partner in Africa. Bilateral annual trade turnover exceeds $3bn, with oil constituting more than 96% of Indian imports from Nigeria. India maintains a three-pronged strategy: term contract for crude purchase, participation in the upstream sector, and refineries.

This puts India in direct competition with the west and other Asian countries to secure West African resources. But India's quest for energy in West Africa is not a core component of the government's energy policy; rather, it is part of its effort to diversify energy sources by offering infrastructure investments, in addition to cash bonus payments when contracts are signed.

Of the 45 blocks 17 are being reserved for unknown companies that will be given a first right of refusal on acreage in exchange for promises to invest heavily in projects not directly related to oil production, such as new power plants and refineries. These negotiations have been ongoing, and India's ONGC, in alliance with Mittal Energy, part of the Mittal companies run by Indian billionaire Lakshmi Mittal, is tipped to get the right of first refusal for a number of blocks.

During a Nigerian mini-bid round in 2006, ONGC-Mittal was offered the right of first refusal for three blocks. ONGC-Mittal Energy is keen to secure blocks with proven reserves, but also is less concerned about the fine detail of the infrastructure packages than their Asian competitors. The creation of ONGC-Mittal in late 2005 seems to have been intended to cut through bureaucratic processes, learn from the private sector, and strengthen bids as an infrastructure provider.

In 2005, the Indian Cabinet's Committee on Economic Affairs prevented, on due diligence grounds and at the last moment, the overseas arm of ONGC Videsh from entering into a $2bn deal for a stake in a Nigerian oil block. But the 2007 licensing round appears to have been rushed through to raise cash during the dying days of the Obasanjo administration, and it would serve India's government well to watch this process closely, too.

Other parts of the Mittal dynasty have also raised eyebrows in West Africa. In late 2005, Mittal Steel, the world's largest steel company, signed a $900 million deal with Liberia's transitional government to mine iron ore, which many claim allowed Mittal to opt out of human rights and environmental law. The elected government of President Ellen Johnson-Sirleaf in 2006 reviewed the deal, and the Liberian senate is currently scrutinising it.

India's business engagement in Africa attracts mixed opinion. Mahatma Gandhi once said that "commerce between India and Africa will be of ideas and services, not of manufactured goods against raw materials after the fashion of western exploiters." However, according to Zambian opposition MP Guy Scott, "People are saying, 'The Whites were bad, the Indians were worse, but the Chinese are worst of all.'"

India should not regard Africa as simply a source of natural resources. Instead, it needs to invest in the region's human capital and share Indian know-how. Many Indian goods have much greater suitability for African than western markets. Sales of Tata cars, for instance, are booming in many African countries.

But shared know-how should move beyond economic links. India's democracy in a post-colonial setting has relevant lessons for Africa. India also offers important experience in agricultural expansion, clean water management, and confronting the growing threat of climate change.

Whatever role India ultimately plays in Africa, perhaps its most important contribution could be to introduce competition. India's government needs to carefully watch how its companies and others rise to this challenge.

 

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Tatas to manufacture aircraft components for export market
Written by Arjun
Sunday, 05 August 2007

MUMBAI: Tata Group seems to be planning a foray into manufacture of aircraft components for exports, according to reports published by the Economic Times.

The group is is understood to be acquiring land at the Nagpur Special Economic Zone (SEZ) for setting up the component manufacturing plant. The Maharashtra Airport Development Company is in charge of putting up the Nagpur SEZ project. R C Sinha, Vice Chairman and Managing Director of Maharashtra Airport Development Company, said that a Tata company is taking up the land for aircraft component business. He said that the infrastructure work on the Nagpur SEZ was progressing satisactorily and major work would be completed by December next year.

Meanwhile, Boeing is setting up a Maintenance, Repair and Overhaul (MRO) facility at the Nagpur SEZ.

Praveen Kadle, Executive Director (Finance) - Tata Motors, has told PTI that the company has plans for the aerospace sector though nothing had been finalised as yet.

Tata Airlines, India's first airline, started in 1932 by the Tata Group was taken over by the government and turned into Air India.

 

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India to outdo US, Japan in economic growth
5 Aug, 2007, 1130 hrs IST, PTI

NEW DELHI: Emerging economies, including India, will overtake the developed countries in economic growth by 2050, with the popularity of India and China as investment destination is rising while the attractiveness Europe and North America is slipping, says a study.

"The seven new global powers by 2050 will comprise the so-called BRIC economies (Brazil, Russia, India and China) together with Indonesia, Mexico and Turkey," says the Ernst and Young European Attractiveness Survey 2007.

These seven emerging countries would overtake the economies of the G7 countries, Britain, Canada, France, Germany, Italy, Japan, United States, in terms of gross domestic product (GDP) but whether India can develop its infrastructure at pace with that of global investment remains to be seen, the survey added.

The developing economies will outdo the G7 if it manages to mend the loopholes regarding transparency, fairness and infrastructure development. India's popularity is rising as 26 per cent respondents said the country is amongst their top three preferences in 2007 whereas the figure was just 11 per cent in 2004.

The survey highlights that with intensifying competitive cost pressure, companies across the world would resort to offshore services and manufacturing to lower cost and higher growth economies such as China and India.

One company in five intends to relocate all or part of its European activities outside the region and for this they look forward to the Asian countries. "China attracts the interest of 50 per cent of respondents currently undergoing a relocation search, while India is considered by 30 per cent of voters," the survey said.

Europe's attractiveness for foreign investors declined significantly in 2007, though it has managed to maintain its lead as the most attractive global investment region, the survey says.

However, the survey cautions that the mature economic markets in Europe are losing their hold on investors as the emerging economies of Asia gain further momentum. This change in foreign investor interest towards Asian countries is because of high skilled labour power cost effectiveness and good ground for Research and Development (R&D) activities.

Asia has shown a significant gain and narrowed the gap with Europe and in the list of preferred regions China has moved up to the second position this year, while India has attained fifth position in the league.

Western Europe tops the chart with 55 per cent respondents naming it as one of their most preferred business locations followed by China which received the vote of 48 per cent respondents, while India managed to hold on to the fifth position with 26 per cent decision makers voting in its favour, the survey said.

Central and Eastern Europe grabbed the third position (39 per cent vote) whilst the United States and Canada shared the fourth slot with 38 per cent respondents voting in their favour for the preferred location for investments.

The global business world has become increasingly multipolar, the survey said adding that "the attractiveness of the traditional top ranked regions of Europe and North America is giving way to a rise in popularity of India and China".

 

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Infosys Tech to invest Rs 30 cr on expansion
5 Aug, 2007, 1127 hrs IST, PTI

CHANDIGARH: Software solutions developer Infosys Technologies Limited has said it will invest Rs 30 crore on expansion of its Chandigarh operations during the current fiscal.

"We will invest Rs 30 crore on infrastructure development of our operations in Chandigarh during this year," Infosys Technologies Limited's Development Centre Head Sameer Goel said here.

The company, which is India's second biggest software exporter, has so far invested Rs 160 crore on its facility in Chandigarh.

With the new investment, it proposes to set up blocks for software developers at its IT centre in Rajiv Gandhi Chandigarh Technology Park. The 30-acre Software Development Centre of Infosys employs about 2,000 people in Chandigarh, which is extendable to 3,000.

The company has been exporting softwares to countries like the United States, Europe and Middle East. It has also been awarded the STPI software export award for earning export revenue of Rs 17,423 lakh from the Union Territory.

 

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‘Smart City project will boost economic growth’
K. Venkiteswaran

Kerala to become choice destination for IT companies, says study
--------------------------------------------------------------------------------
‘State offers talent pool of engineering graduates’
50% rise in software exports from State
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KOCHI: The high cost of operation and congestion in tier-I cities have made potential investors take a second look at green field areas like Kochi. The decision of the Dubai-based Tecom Investment FZ-LLC to set up Smart City here has paved the way for others to fall in line. Kerala also offers an excellent talent pool of science and engineering graduates.

The high and low

The State has the highest density of science and technology personnel in the country, with about 25,000 engineering graduates a year from eight universities in the State. The lowest employee attrition rate of less than five per cent, centres of excellence such as the Indian Institute of Management (Kozhikode), Indian Institute of Information Technology & Management – Kerala, etc., are the other reasons for IT companies to set up shop here, it is pointed out.

A KSIDC publication exudes optimism that Kerala would soon become a choice destination for IT companies. Software exports from Kerala crossed Rs.700 crore in 2006-07, up by 50 per cent compared to 33 per cent at the national level. With infrastructure developers such as L&T, the Leela Group, Sobha Developers, Cochin International Airport Ltd. and the Muthoot Group launching ventures in the State, Kerala is poised for ‘big ticket’ development, say experts.

Smart City is a joint outcome of the State Government and the Dubai-based Tecom Investments, builders of industrial infrastructure. The project envisages building an 8.8 million sq. ft. facility here. It has given an impetus to IT majors to set shop here. Infosys Technologies, the major in Indian IT services industry, has broken ground to set up its development centre on a 50-acre campus at Technopark in Thiruvananthapuram. Wipro has almost completed the first phase of its one-million sq. ft. development centre at Infopark in Kochi. NeST, Kerala’s own multinational, has started work on a one-million sq. ft. facility at Kinfra Park in Kochi for its hardware manufacturing business. Cognizant Technologies, one of the fastest growing Indian IT majors, has opened its development centre in Kochi.

Smart City, one of the biggest FDIs in the IT infrastructure sector in the country with a total investment of Rs. 1,700 crore, will come up on a 246-acre plot. It will have at least 6.21 million sq. ft. dedicated to IT-related units.

Similar cases

The Smart City is expected to do what the TIDEL Park did for the IT industry in Tamil Nadu and HitTec City in Andhra Pradesh. The 1.3-million sq. ft. TIDEL, India’s second largest IT facility, was set up in 2000. IT exports from the State rose dramatically since then: from Rs. 1,246 crore in 1999, it more than doubled to Rs. 3,116 crore in 2001 and then to Rs. 14,115 crore in 2005-06. Hi-Tec City, a one-million sq. ft. facility, was launched in 1998. Today, Hyderabad has the presence of all the IT majors across the globe. Though late to come up, Smart City is a behemoth in size compared to the other two. With ‘Technocity,’ another project on IT infrastructure coming up in Thiruvananthapuram, Kerala, is certain to become an investment destination for IT companies, says the KSIDC publication.

 

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New ICER laboratory to train young scientists
Special Correspondent

CHENNAI: An International Centre for Excellence in Research laboratory (ICER) was inaugurated on the premises of the Tuberculosis Research Centre here on Saturday. Set up in collaboration with the National Institutes of Health, U.S., the Centre will foster research in immunology and infectious diseases and focus on training young professionals in frontier areas of bio-technology.

Inaugurating the centre, Kathryn Zoon, director, Division of Intramural Research, National Institute of Allergy and Infectious Diseases (NIAID), National Institutes of Health (NIH), U.S., said the new labs were a demonstration of the firm commitment of the NIH towards building sustainable infrastructure for research in infectious diseases and immunology. Young scientists from both nations would be trained and it was hoped that the work carried on in these labs would lead to new vaccines and other therapeutic measures that would be of benefit to the public.

N.K.Ganguly, director general, Indian Council for Medical Research, said the collaboration between TRC and NIAID began several years ago and has since matured well. ICER nurtures research in basic sciences and in developing new vaccine strategies. The lab would work primarily in areas such as tuberculosis and co-infections, including HIV/AIDS. The aim would be to create a large pool of scientists to handle these areas, he said. Altaf Lal, health attaché and U.S. Department of Health and Human Services Representative for South Asia, said the collaborationss between India and the U.S. in biomedical research has produced significant results, leading to a better quality of life. The U.S. has bilateral agreements to work in areas such as vaccine development, maternal and child health, reproductive health and environmental and occupational health, he said. The model has been so successful that many other countries have followed suit, he said. P.R.Narayanan, director, TRC, and Thomas Nutman of the Laboratory of Parasitic Diseases, NIAID, spoke.

 

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India on African safari, hunting oil
Mahatma Gandhi once said that "commerce between India and Africa will be of ideas and services, not of manufactured goods against raw materials after the fashion of western exploiters." However, according to Zambian opposition MP Guy Scott, "People are saying, 'The Whites were bad, the Indians were worse, but the Chinese are worst of all.' "

By Alex Vines and Gareth Price

China's increasing influence in Africa has attracted great attention in recent years. But Asia's other rising power, India, is also becoming more active on this front, as its economic links are moving beyond its traditional partners in the British Commonwealth. Indeed, India's non-oil trade with West Africa currently stands at more than $3 billion and is rising fast, accounting for 1.2% of the country's total foreign trade.

India's economic activity in Africa goes far beyond its ever popular Bollywood movies. Indian investment in Côte d'Ivoire is expected to grow to $1 billion by 2011, which represents 10% of total Indian foreign investment in the last decade. India's state-run Oil and Natural Gas Corporation (ONGC Videsh) produces Sudanese oil, and over the next two years Indian diplomatic missions will open in Mali, Gabon, Niger, and Burkina Faso. Until 2003, the Indian Foreign Ministry had a single Africa division; it now has three: West and Central Africa, East and Southern Africa, and West Asia and North Africa.

A study by the Federation of Indian Chambers of Commerce and Industry identified five main sectors that can act as "engines of growth" to boost Indo-Africa trade: pharmaceuticals and the health sector, information technology, water management, food processing, and education.

Nigeria is India's largest trading partner in Africa. Bilateral annual trade turnover exceeds $3 billion, with oil constituting more than 96% of Indian imports from Nigeria. India maintains a three-pronged strategy: term contract for crude purchase, participation in the upstream sector, and refineries.

This puts India in direct competition with the West and other Asian countries to secure West African resources. But India's quest for energy in West Africa is not a core component of the government's energy policy; rather, it is part of its effort to diversify energy sources by offering infrastructure investments, in addition to cash bonus payments when contracts are signed.

Seventeen of the 45 blocks are being reserved for unknown companies that will be given a first right of refusal on acreage in exchange for promises to invest heavily in projects not directly related to oil production, such as new power plants and refineries. These negotiations have been ongoing, and India's ONGC, in alliance with Mittal Energy, part of the Mittal companies run by Indian billionaire Lakshmi Mittal, is tipped to get the right of first refusal for a number of blocks.

During a Nigerian mini-bid round in 2006, ONGC-Mittal was offered the right of first refusal for three blocks. ONGC-Mittal Energy is keen to secure blocks with proven reserves, but also is less concerned about the fine detail of the infrastructure packages than their Asian competitors. The creation of ONGC-Mittal in late 2005 seems to have been intended to cut through bureaucratic processes, learn from the private sector, and strengthen bids as an infrastructure provider.

In 2005, the Indian Cabinet's Committee on Economic Affairs prevented, on due diligence grounds and at the last moment, the overseas arm of ONGC Videsh from entering into a $2 billion deal for a stake in a Nigerian oil block. But the 2007 licensing round appears to have been rushed through to raise cash during the dying days of the Obasanjo administration, and it would serve India's government well to watch this process closely, too.

Other parts of the Mittal dynasty have also raised eyebrows in West Africa. In late 2005, Mittal Steel, the world's largest steel company, signed a $900 million deal with Liberia's Transitional Government to mine iron ore, which many claim allowed Mittal to opt out of human rights and environmental law. The elected government of President Ellen Johnson-Sirleaf in 2006 reviewed the deal, and the Liberian Senate is currently scrutinizing it.

India's business engagement in Africa attracts mixed opinion. Mahatma Gandhi once said that "commerce between India and Africa will be of ideas and services, not of manufactured goods against raw materials after the fashion of western exploiters." However, according to Zambian opposition MP Guy Scott, "People are saying, 'The Whites were bad, the Indians were worse, but the Chinese are worst of all.'"

India should not regard Africa as simply a source of natural resources. Instead, it needs to invest in the region's human capital and share Indian know-how. Many Indian goods have much greater suitability for African than Western markets. Sales of Tata cars, for instance, are booming in many African countries.

But shared know-how should move beyond economic links. India's democracy in a post-colonial setting has relevant lessons for Africa. India also offers important experience in agricultural expansion, clean water management, and confronting the growing threat of climate change.

Whatever role India ultimately plays in Africa, perhaps its most important contribution could be to introduce competition. India's government needs to carefully watch how its companies and others rise to this challenge.

(Alex Vines and Gareth Price are, respectively, head of the Africa and Asia programs at Chatham House, the Royal Institute of International Affairs, in London.)