Indian Economy - News & Updates - Archive

[Neo]

Office rent in Mumbai 2nd highest in world ​

Sunday, November 25, 2007

MUMBAI: India’s financial capital Mumbai ranks second only to global commercial hub London in terms of office rentals, while the national capital is not far behind at eighth spot, an Indian financial Web site reported.

The cost of a square feet at Mumbai’s Nariman Point has risen 55 per cent over last year to $189.51 (occupation cost in US $/sq ft/annum).

However, it is a distant second to London’s West End, which topped the list with $328.91, according to a recent survey by global realty consultant CB Richard Ellis.

According to CBRE Research’s semi-annual Global Market Rents survey, which tracks the world’s most expensive markets as well as markets with the fastest growing rents over the past 12 months, Delhi ranks eighth in the most expensive office markets of the world (with rental of $126.73).

“London’s West End, Mumbai, the City of London and Moscow are the top four most expensive office markets in the world,” CBRE said in a statement.

In the category of fastest growing office rents, Mumbai ranked third with 55 per cent jump in last 12 months, as Singapore led the list with occupancy cost rising by 83 per cent during the past year.

Bangalore stood at sixth place with 49 per cent jump, while New Delhi is at 12th position with 34.3 per cent rise in office rental in the last one year.

Office rent in Mumbai 2nd highest in world

 

[aryan2007]

Office rent in Mumbai 2nd highest in world ​

Sunday, November 25, 2007

MUMBAI: India’s financial capital Mumbai ranks second only to global commercial hub London in terms of office rentals, while the national capital is not far behind at eighth spot, an Indian financial Web site reported.

The cost of a square feet at Mumbai’s Nariman Point has risen 55 per cent over last year to $189.51 (occupation cost in US $/sq ft/annum).

However, it is a distant second to London’s West End, which topped the list with $328.91, according to a recent survey by global realty consultant CB Richard Ellis.

According to CBRE Research’s semi-annual Global Market Rents survey, which tracks the world’s most expensive markets as well as markets with the fastest growing rents over the past 12 months, Delhi ranks eighth in the most expensive office markets of the world (with rental of $126.73).

“London’s West End, Mumbai, the City of London and Moscow are the top four most expensive office markets in the world,” CBRE said in a statement.

In the category of fastest growing office rents, Mumbai ranked third with 55 per cent jump in last 12 months, as Singapore led the list with occupancy cost rising by 83 per cent during the past year.

Bangalore stood at sixth place with 49 per cent jump, while New Delhi is at 12th position with 34.3 per cent rise in office rental in the last one year.

Office rent in Mumbai 2nd highest in world

Indian property market is at an all time boom.. the land rates even in teh $hitties localities in proper Delhi is touching 1000$ per sq yard.. and in industrial areas on teh outskirts are touching 300$ per sq yard..
I think the prices and rents are much higher if you add the paghri system and black money changing hands in addition to the prices which are filled in the stamp papers and registeries(taxable income)...

 

[aryan2007]

Trillion-dollar effect on India's stock markets
25 Nov, 2007, 0052 hrs IST,Apurv Gupta, TNN

A growth propelled largely by the services and manufacturing sector, coupled with an appreciating rupee, has catapulted India into an elite league — that of a trillion-dollar economy club, thereby making it only the 12th nation to reach this milestone. Even better, post-April 2007, the Indian market cap has crossed $1.5 trillion.

What’s interesting is that membership to the club comes with certain benefits for the nation as a whole. Data by research houses suggest that stockmarkets in eight out of 10 countries had risen in one year after their economies first crossed this mark. SundayET finds out its implications and what’s required to keep the momentum going.

Says Ajay Bagga, CEO, Lotus India AMC: “The expectations of a sustained economic growth, risk premium and interest rates decide the direction of the markets. In India, the trillion-dollar effect has added a ‘halo’ to the markets, encouraging a record breaking $17 billion of inflows into the markets in this calendar year. The trillion-dollar twin statistics have lent a size and respectability to both the economy and the market, attracting both FDI and FII flows.”
He feels that the economy as the “source of wealth” has contributed to and has, in turn, been catalysed by the stockmarkets that serve as the “measure of wealth”. The interplay of real and nominal GDP, inflation, earning per share (EPS) and price to earning ratio has meant that at first the markets rose due to an EPS expansion.

In a report, Credit Suisse, adding some history trivia, says that eight out of the 10 economies had their stockmarkets rise in the one-year period after they first crossed the $1trillion-mark in GDP. The United Kingdom is the only economy to stop being a trillion-dollar economy for a while after attaining the status the first time. In China and Germany, this led to the markets reversing directions from negative returns in the year of the $1 trillion-mark to positive returns in the following year. Experts though argue that these numbers are irrelevant for any fundamental analyst.

Says Sachchidanand Shukla, economist at Enam Securities: “We must remember that markets discount these factors much in advance and expressing economic size in dollar terms may actually understate India’s economic size. As for economy (size and structure) driving the markets, empirical evidence has been mixed globally, and the opposite can also be argued — that markets drive economic growth. One has seen that in countries like China, despite higher economic growth and large size of economy, the markets remained moribund for a long period of time and have moved only lately.”

He adds that the markets discount a myriad of factors and economic growth is one of them. For markets to go up, it is a necessary but not sufficient condition. Valuations, corporate fundamentals, conducive policies, polity and liquidity, etc, too are equally important conditions. Bagga adds that big deserves better pricing. This will attract investors of size and commitment. The Brazilian case is very comparable. “We remain bullish on both the Indian economy and the fundamental re-rating story of the Indian markets which will lengthen this secular bull run, a la the US from 1982 to 1998. India as a nation of economic and capital markets magnitude has arrived.”

He says that post-April 2007, the PE segment has witnessed a substantial expansion. Over the last 15 years, the 6% average real GDP growth has translated into a three times, 18%-plus EPS growth in India. The trillion-dollar effect will build on this EPS effect by adding the PE effect as well.

India joins trillion-dollar economy club- Special Report-The Sunday ET-ET Features-The Economic Times

 

[Flintlock]

India 2.0: From service provider to innovator
Adrian Bridgwater,
ZDNet.co.uk, UK
20 Nov 2007



In October, Yahoo ran an Open Hack Day event in Bangalore, hosted by one of the company's co-founders, David Filo. Two hundred local developers were invited to a 24-hour code-a-thon to combine their own ideas with mashed-up services from Yahoo's own library of APIs. The winning entry brought together Yahoo's mapping tool with a handwriting function to allow users to give travel directions to each other.

This kind of innovation-focused event is symptomatic of what some commentators are claiming is a fundamental shift in the focus of India's tech industry. "Innovation was always there, but the right conditions, ecosystem and critical mass did not exist from 1947 until the early 1990s. Now, venture capitalists are more willing to venture forth in emerging markets and back entrepreneurs — and India's universities have helped create critical mass in terms of skilled workers. So, as these factors start to coalesce, innovation and entrepreneurship are now much more evident in many different parts of India," said Kamla Bhatt, acclaimed Indian podcaster and presenter of The Kamla Bhatt Show.

To some observers it might appear that India came from nowhere to attain its current position as the dominant hub for technical skills and outsourcing. But the development of the country's technical skills base actually has its roots in the end of World War II. From 1947 until 1992, India followed a socialist path to development, with heavy emphasis on the public sector, in a somewhat misguided attempt to fuel growth. In 1992, when the country was on the brink of running out of hard currency (ie dollars), the prime minister at the time, Narasimha Rao, assisted by his finance minister, Dr Manmohan Singh, unshackled the Indian economy and freed it from its sluggish growth rate, which for years had hovered around the four to five percent mark.

PricewaterhouseCoopers estimates that India has roughly two thirds of the global business-process outsourcing (BPO) market, with a value in excess of $7bn (£3.4bn) last year. However, it appears the country has ambitions beyond outsourcing; the Indian technology sector seems to be changing as it develops a new self-belief. Google's labs in Bangalore conceived the initial engineering for the company's Google Finance offering in less than 18 months. This type of development has created the momentum for venture capitalists to propel further developments and invest in an increasingly skilled workforce.

The Indian Institute of Technology is widely regarded as the sub-continent's premier technology school; its seven locations churn out many of the ultra-keen software engineers that are starting to make headlines. Commentators claim there are visible signs that a shift towards higher-value work is occurring.

As the foundations of a wider and more diverse Indian technology market continue to spread, both local and international firms are conscientiously taking a step back to look at the enterprise infrastructure they have in place, to gauge its suitability for supporting an expanding business base. Given this fact, Bangalore is just one of the locations in which global infrastructure layer, systems-integration (SI) and networking companies are setting up office.

"BEA has seen its training volumes in India rise from hundreds to thousands of students a year. Big systems-integration firms in many of India's industrialised cities now demand tailored courses and even train over the web, live linked to instructors in the US. The latest trend is for these SIs to become authorised trainers in their own right, so they can train in BEA's technologies to their own timetable in-house," said David Toso, senior vice president of BEA EMEA services.


If they are smart, Bangalore and other technology-rich regions of India — including Chennai, Mumbai and Delhi — can take advantage of the IT foundation laid down to service overseas BPO demands and use it to jump-start indigenous projects. Sunnyvale in California will always be a convenient 12 hours behind India's west coast, so BPO is highly unlikely to disappear, but what India does next may prove extremely interesting.

"Where India has suffered in the past was [in its] reliance upon our services heritage that was anchored in cost arbitrage," said Sharad Sharma, chief executive of Yahoo India Research and Development. "But things are changing; capital intensity for entrepreneurs is reducing and this will make a big difference here in India. You can now be a YouTube without owning your own data centre. Our Bangalore development centre is responsible for a large chunk of the global research that drives 500 million users to Yahoo each month, and we have a string of Indian-originated services that are being localised for other markets and rolled out globally."

Among the Indian team's development highlights is the internet portal Yahoo Our City. Conceived, designed, built and launched from Bangalore within six months, this dynamically updated service provides a perspective of a city as seen and experienced by its natives. Content is generated by users for users — and the site incorporates other Yahoo services, such as Answers, Groups and Maps. Also hailing from the Bangalore team is the Yahoo Kids learning and entertainment portal. Made in India in the English language, it has already been localised for both Japan and Korea. Yahoo India has also produced underlying technology developments such as Vertex, a cross-vertical information-extraction platform that scrapes websites and pulls in information from them so that the information is extracted according to a pre-specified schema and stored in a database. In short, it's a quantum leap forward from call-centre work.

How these innovations manifest themselves in reality is a different and harder question to answer. "There are signs of emerging niche technologies emanating from India, such as developments to provide persistent security and network access control, or design work on the next generation of microcontroller chips. However, this is at a relatively early stage and the scale of such exports is still small, but the growth is accelerating much faster than more mature services exports," said Brian Stones, executive vice president of Mumbai-headquartered Patni.

"We are starting to see the creation of technology as a direct revenue generator — not merely as an enabler for making some service delivery faster, better or cheaper. Much of this is still driven by global organisations that originally set up captives to exploit the cost advantages of the Indian skills market, but [which] have graduated to becoming a strategic part of the global technology-development capability of these organisations — truly contributing to the creation of their products and technologies, including product management. For example General Motors R&D in India is developing next-generation electronics and materials for cars of the future," added Stones.

Of course, growth creates growth and a virtuous circle of proliferating expansion for complementary and supporting technologies is emerging. With an explosive growth of mobile-phone users in India and other parts of Asia, Symbian — which has over 70 percent market share of the smartphone operating-systems market — is working to ensure new units are supported with foundation-level technology. The company's own Bangalore office was opened in 2006 with an initial remit to provide core Symbian OS application technologies and product development to meet customer and product requirements.

Now, with a more fully evolved role within the organisation, Symbian India fits into the company's international operating-system engineering base to provide a research and development unit with specific responsibility for multimedia, networking, messaging, user interfaces and graphics, including significant technical contributions to the company's Posix layer.

"India is certainly witnessing a secondary stage in the economic growth it derives from its technology sector, as it channels its workforce towards home-grown projects targeted at a global market," said Bruce Carney, head of developer programmes and services for Symbian. "In the past month, two leading Indian universities have joined our Academy programme and this type of knowledge-base expansion has created the momentum for venture capitalists to propel further developments and invest in an increasingly skilled workforce."

However, despite this optimistic attitude, the jury is still out on whether there really is a new dawn for Indian IT entrepreneurialism coming. Critics of the Indian technology sector's ability to be inventive and entrepreneurial have accused it of being an "instruction-led" society — that is, workers don't "do" until they're told to "do". Similar negativity has been voiced over the country's big but seemingly shallow labour pool. There are also still enormous divides within Indian society; according to estimates, more than a third of India's population of more than one billion people lives on less than $1 a day.

India wants to be seen as the perfect test bed for technologies suitable for emerging markets, as it is now a "veteran" emerging market itself. With this pedigree and the new streams of investment being channelled into the country's technology sector, it would appear that the rapidly expanding skilled labour pool will be scooped up and put to full use in the India 2.0 world. As to when the country will reach India 3.0, when Western workers migrate to the sub-continent as their location of choice for work, it is hard to say, but it will surely happen.

India 2.0: From service provider to innovator - ZDNet UK

 

[bhangra12345]

Annual inflation at 3.21 pc on November 17- Indicators-Economy-News-The Economic Times

Annual inflation at 3.21 pc on November 17
30 Nov, 2007, 1247 hrs IST, REUTERS

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NEW DELHI: India's wholesale price index rose 3.21 per cent in the 12 months to Nov. 17, above the previous week's rise of 3.01 per cent, government data showed on Friday.

The rate was above a median forecast of 3.11 percent in a poll of analysts. The annual inflation rate was 5.56 per cent during the corresponding week of the previous year.

The wholesale price index is more closely watched than the consumer price index, which is published monthly, because it covers a higher number of products and is published weekly

 

[bhangra12345]

Economy slows down to 8.9 pc in second quarter- Indicators-Economy-News-The Economic Times

Economy slows down to 8.9 pc in second quarter
30 Nov, 2007, 1137 hrs IST, AGENCIES

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NEW DELHI: The economy slowed down to register 8.9 per cent growth during the second quarter of current financial year, down from 10.2 per cent in the comparable period of last year.

The sluggish performance of the manufacturing sector accounted for the slow down, according to the data released by the government here on Friday.

Indian economy, which is Asia's third-largest economy, grew 9.4 per cent in the fiscal year that ended March 2007, its fastest rate in 18 years, and the Reserve Bank of India expects expansion to slow to 8.5 per cent this fiscal year.

But India is still among the fastest growing major economy after China with gross domestic product (GDP) growth underpinned by strong spending to improve the country's creaky infrastructure, they say.

Analysts expected that the growth for the three months ended September 30 would be around 8.7 per cent, down from the previous quarter's 9.3 per cent, according to a survey of seven leading economists, whose forecasts ranged from 8.3 to 9.0 per cent.

"The cumulative impact of monetary tightening in the last few quarters, along with the likely impact of rupee appreciation on exports, is expected to moderate the pace of economic growth over the rest of this fiscal year," said Rajeev Malik of JP Morgan Chase Bank in Singapore.

"The slowdown will be pronounced for consumer spending," said Malik, who expects second-quarter growth of 8.7 per cent.

But he said investment "should continue to be powered by higher spending on both private capital expenditure and infrastructure spending."

India's economy expanded by 9.4 per cent in the financial year to March 31, 2007. The economy has grown at an average annual rate of 8.6 per cent in the last four years.

But industrial production grew at its slowest pace in almost a year in September, expanding by an annual 6.4 per cent, dragged down by tighter monetary policy and a rising rupee.

"A softening in GDP growth is expected to have occurred primarily due to a decline in industry GDP growth," said Manika Premsingh, an economist at Mumbai's Edelweiss Capital, who estimates second-quarter growth at 8.3 per cent.

The central bank began tightening monetary policy in 2004 and has raised interest rates five times between mid-2006 and March to tame prices.

Inflation, now at 3.01 per cent, is well below the bank's 5.0 per cent annual target and down sharply from a two-year peak of nearly seven per cent early this year, spurring speculation that the interest rate hikes could be over.

 

[Neo]

EU, India hope for FTA in 2008​

NEW DELHI, Nov 29: The European Union and India hope to conclude a free trade agreement next year, officials of both sides said on Thursday.

The EU is India’s largest trading partner, accounting for a fifth of India’s total trade, and is also one of its most important sources of foreign investment.

“We hope to conclude (the free trade talks) by the end of 2008,” EU Trade Commissioner Peter Mandelson told reporters on the sidelines of an India-EU business meeting in New Delhi.

“Business on both sides should throw its weight behind a deal that does justice to the ambition we brought to the table a year ago,” Mandelson said.

“The free trade pact would provide a big boost to both economies and shore up global demand if the world economy begins to cool,” he added.

India’s Commerce and Industry Minister Kamal Nath also said that the free trade agreement “should be concluded by next year.” But Mandelson warned that the European bloc was looking for an agreement with “content” rather than a political accord.

While looking for “speedy progress” to conclude the deal, “I... don’t want to sacrifice... content,” he said. Indian and EU leaders will meet on Friday in an attempt to push forward the proposed free trade deal.—AFP

EU, India hope for FTA in 2008 -DAWN - Business; November 30, 2007

 

[aryan2007]

Reliance places India's biggest Telco order at 5.6bn$


New Delhi: Reliance Communications Ltd (RCom) is getting ready to place what will be, at 70 million lines and an estimated value of $5.6 billion (Rs22,288 crore), the biggest order ever by an Indian telco as the firm gets ready to offer services on the GSM technology platform and take on competitors such as Vodafone Essar Ltd and Bharti Airtel Ltd.
Although the firm hasn’t put a date to the launch, analysts say it could be sometime next year. The full-fledged entry of RCom into the GSM arena—one of the company’s units already offers mobile telephony services using the technology in parts of East and North-East India—will likely result in another price war similar to the one the firm set off when it launched its CDMA-based service in July 2002.
That could mean lower tariffs for customers in a market where the average rate for local calls is less than Re1 a minute, or 2.5 cents, among the lowest in the world. It could also mean lower profits for phone companies.
RCom has begun talks with telecom vendors such as LM Ericsson AB, Alcatel-Lucent SA and Motorola Inc. RCom’s discussions with suppliers comes in the wake of the permission granted by the government last month to telcos to use multiple technologies to deliver mobile services. RCom, already India’s second largest mobile telephony firm by customers including its GSM unit, has 38 million of them, the majority (33 million) on the CDMA technology platform.
GSM is a more popular technology in India and telcos using it serve around 75% of the country’s 210 million cellular subscribers. The GSM subscriber base is expanding by almost seven million a month compared with two-three million for CDMA.
“We are already in discussions with equipment vendors for the GSM roll-out, and in addition, we are also expanding our passive infrastructure of telecom towers that could be used for GSM services across the country,” a senior RCom executive, who preferred anonymity, said. “The roll-out will be quick, especially since we have our own tower network.”
Vendors are gearing up for the contract and indicated that the pricing would be very competitive. State-run Bharat Sanchar Nigam Ltd, or BSNL, had, earlier this year, placed an order for around 12 million phone lines with Ericsson at a price of $107 per line. “RCom is talking about a contract that could be for as many as 70 million lines and it is a tough customer,” said a senior executive at a European vendor, who did not wish either himself or his firm to be identified.
At around $80 a line, the RCom GSM contract will be worth $5.6 billion. “Setting up a nationwide network could take anywhere from 6-12 months,” the executive added. An analyst said RCom is pushing hard to keep the per line cost at around $50. “They (RCom officials) have said the first investment they would be making would be Rs5,000 crore in a pan-India GSM network and would not like to exceed $50 per line,” said Naveen Kulkarni, an analyst with Religare Securities Ltd.
RCom will also be looking to leverage its existing CDMA network to reduce expenses on network roll-out costs. “They could minimize passive infrastructure costs of setting telecom towers (and enclosures housing radio control equipment), which account for 60% of the total roll-out cost,” Amrish Kacker, Singapore-based Asia head at telecom consultant Analysys Consulting, said in a telephone interview.
Other analysts tracking RCom said the company could also look at a Bharti Airtel-like model where the network grows in tandem with the business. “If RCom starts only with the four metros, or even looks at rolling out GSM services in phases across the country, the contract may start with, say, 10 million lines and hit 50 million in two to three years,” said Yogesh Kirve, a telecom analyst at Mumbai-based Anand Rathi Securities Ltd.
RCom officials declined to comment on any projections regarding growth of the company’s GSM business. According to Mumbai-based Macquarie Research, the company will launch GSM services across the country next year. “We expect RCom to have a GSM subscriber base of 12.8 million by March 2009, 21.6 million by March 2010 and 28.6 million by March 2011,” Shubham Majumder, an equity analyst at Macquarie, wrote in a note last month. RCom adds about 1.5 million CDMA customers a month currently.
The RCom executive said that the company plans to grow its existing GSM business (in states such as Orissa, Bihar, and West Bengal), which is managed by subsidiary Reliance Telecom Ltd, to “15 million lines this year”.
Apart from setting up a core GSM network, RCom will also need to set up at least three to four times more telecom towers than it currently has. This is because radios used in GSM-based networks have a shorter range and more towers are required to cover the same area.
RCom aims to have 40,000 telecom towers by March 2008. These towers are managed by Reliance Telecom Infrastructure Ltd, which RCom spun off into a separate company earlier this year and has since sold a 5% equity stake in it for $337.5 million to seven unnamed private equity companies in July.

RCom set for $5.6 bn order - livemint

 

[aryan2007]

India's GDP growth slows down to 8.9% in Q2


The growth of financial, real estate and business services slowed down to 10.6% in second quarter as against 11.1% a year ago partially due to RBI measures

New Delhi: India’s blistering economic growth slowed to 8.9% in the second quarter ended September 2007, hit by a downturn in manufacturing, data released on 30 November showed.
But the growth figures in Asia’s third-largest economy was still slightly ahead of analysts’ expectations of around 8.7%, thanks to a buoyant services and healthy agriculture performance, the data showed.
The growth of financial, real estate and business services slowed down to 10.6% in second quarter as against 11.1% a year ago partially due to RBI measures.
Analysts, however, said India will still be the fastest expanding major economy after China with GDP growth underpinned by strong spending to improve the country’s creaky infrastructure.
The construction sector, on which government had earlier imposed various restrictions, has shown a marginal improvement by posting a growth of 10.9% in the first half this year as against 10.8% during the corresponding period last fiscal.
Meanwhile, the growth in transport, communication, trade and hotel sector slowed down to 11.4% in the second quarter from 14.2% a year ago.
The power sector, whose slow growth has impacted the GDP growth by 1.5 to 2% a year, also failed to show any signs of improvement. It posted a growth of 7.3% in Q2 in 2007-08 as against 8.1% a year ago. The sector had grown by 6.9% in the first quarter this fiscal.
Despite a rise in government spending on social sector through some of UPA’s flagship programmes, it grew by 7.8% in the first quarter this fiscal as against 8.3% in the same period last year.

GDP growth slows down to 8.9% in Q2 - livemint


Slowing down to 8.9% is also phenomenal IMO

 

[Bushroda]

India's GDP growth slows down to 8.9% in Q2

GDP growth slows down to 8.9% in Q2 - livemint


Slowing down to 8.9% is also phenomenal IMO

8.9% is still good but what worries is the loss of momentum. It doesn't help in achieving the ambitious 10% growth rate.

 

[aryan2007]

8.9% is still good but what worries is the loss of momentum. It doesn't help in achieving the ambitious 10% growth rate.

8.9% is just for a quarter.. and it was predicted that we will achieve 8.7%.. we performed better than expectations..

We are losing ~2% pa because of our infrastructure
and the report mentions RBI meausres also curbed the growth in certain sectors... I really don't see our govt playing any role in this boom...

See if we remove our farm sector our GDP growth rate is going to be double digit..

 

[bhangra12345]

8.9% is just for a quarter.. and it was predicted that we will achieve 8.7%.. we performed better than expectations..

We are losing ~2% pa because of our infrastructure
and the report mentions RBI meausres also curbed the growth in certain sectors... I really don't see our govt playing any role in this boom...

See if we remove our farm sector our GDP growth rate is going to be double digit..

One major worry is the impending loss of export momentum due to slowdown in US. The software sector will not be the scorchers as they were but only good. I am worried mostly about the textile sector investments which have gone in the previous years and are supposed to come to fruitition around this time. Where will the increased capacity be absorbed? I hope that these textile exporters have seen non-US regions too.

 

[aryan2007]

One major worry is the impending loss of export momentum due to slowdown in US. The software sector will not be the scorchers as they were but only good. I am worried mostly about the textile sector investments which have gone in the previous years and are supposed to come to fruitition around this time. Where will the increased capacity be absorbed? I hope that these textile exporters have seen non-US regions too.

Absolutely spot on..

Software is under pressure because of strong Rupee and low demand... though big companies already have good amounts of hedge against Rise... but it will catch up...

Textile sector is under pressure from Asean..though it is a very murky sector...

 

[Neo]

India most attractive for Japanese firms​

TOKYO, Nov 30: India has surpassed China for the first time as most attractive long-term manufacturing base for Japanese companies, which are particularly keen on the auto sector, a survey said on Friday.

Asia’s largest economy has warming political and commercial ties with India, although its operations in South Asia are only a fraction of its investment in China, Japan’s largest commercial partner.

But a survey by the Japan Bank for International Cooperation said 70 per cent of companies believed India would be a desirable manufacturing base in 10 years, up from 67 per cent in the annual survey last year.

“In particular, firms in the auto sector appear positive,” the survey said.

“Great attention has been paid to India, which has taken over from China as most desirable destination for long-term investment for the first time.” The government-backed bank carried out the survey of 970 Japanese manufacturing firms.

China came a notch down, with 67 per cent, saying it would be a good place for investment in 10 years. The communist giant held the top spot last year at 74 per cent.

Russia ranked third this year at 37 per cent followed by 28 per cent for Vietnam and 21 per cent for Brazil.

However, when asked which countries were desirable in the short term, China remained at the top with 68 per cent followed by India at 50 per cent.

Japanese automakers have recently launched a series of new investments in India, mostly around the southern city of Chennai, earlier known as Madras.

But Japan’s investment in China was nearly 40 times as much as that in India in 2005, according to Tokyo’s official figures.

Many Japanese businesses have spoken of feeling more comfortable in China with its communist government and cultural linkages to Japan.

Japanese leaders have tried to move closer to India in recent years amid frequent diplomatic spats with China.

Last week the Japanese and Indian premiers agreed in a meeting in Singapore to try to conclude a free trade pact by mid-2008.—AFP

India most attractive for Japanese firms -DAWN - Business; December 01, 2007

 

[Neo]

India eyes role as ‘wind superpower’​

As oil reaches $100 a barrel, and with India suffering shortages that see factories often relying on diesel generators, firms are increasingly looking at wind

INDIA might be painted as a pollution-spewing, global-warming economy of 1 billion people but it is also one of the world’s biggest wind power users, part of a focus on renewable energy mostly unnoticed in the West.

Years of tax incentives have helped make India one of the fastest-growing markets for wind power, a major component of renewable energy that will be high on the agenda of the Dec 3-14 UN climate change meeting in Bali, Indonesia. The Bali conference comes as international pressure mounts on India to ensure its growth gets cleaner. The International Energy Agency (IEA) warned this month of the climatic dangers of “unfettered” energy demand growth in India.

“When it comes to renewable energy and wind power, India can look the West in the eye and say - look at our years of progressive policies,” said Santosh Kamath, a wind power specialist and associate director at KPMG consultants. Wind power in India is still a minority sector compared with the Asian giant’s overall energy needs that are dependent on coal and oil.

With its reliance on dirty fuels, India will become the world’s number three carbon emitter by 2015, the IEA says. But renewable energy, of which the vast majority is wind power, accounts for more than 7 percent of India’s installed generation capacity - a rate that compares favourably with much of the rest of the world. India is the world’s fourth largest wind-power market.

“Wind power is growing tremendously. If you want a wind plant you’ll have to book a year in advance,” said Chandra Bhushan, associate director at the New Delhi-based Centre for Science and Environment. “There’s been years of progressive policies and recognition for a long time that India will face a shortage of fossil fuels.” India, with its thousands of miles of coastline, is suited to wind power. Its wind power potential is estimated at 45,000 megawatts (MW) - about a third of total energy consumption.

There is also little of the concern in India seen in the West over wind turbines ruining scenic vistas - scores can be seen, for example, outside Jaisalmer’s ancient fort in Rajasthan, one of India’s most popular tourist sites.

A wind superpower?

The boom brings in profits, the kind of virtuous circle experts say is needed for renewable energy to really work. At Vestas RBB India Ltd, one of India’s largest wind-power firms, sales rose 30 percent in 2006 and the company forecasts growth of about 40 percent this year, company officials say. India’s rise to what supporters call a “wind superpower” is due to tax breaks in the 1990s and to Tulsi Tanti, chairman of Suzlon Energy, India’s biggest wind energy company.

Troubled by power shortages in the 1990s for his textile business in western India, he bought some wind turbines and soon realised it could be a good business. His company quickly became the pioneer in the sector. Wind power has also been helped by some states setting targets that 10 percent of their power should come from renewable energy.

High capital costs and the fact wind is intermittent - plants often run at a quarter of their capacity compared with 80 percent capacity for nuclear power - mean that it is expensive and the sector has needed tax incentives to survive. Rakesh Bakshi, managing director of Vestas RBB, said provisions were still needed until economies of scale mean “we can give conventional energy a run for its money”.

But as oil reaches $100 a barrel, and with India suffering shortages that see factories often relying on diesel generators, firms are increasingly looking at wind. Sarvesh Kumar, deputy managing director of Vestas RBB, said many clients were large manufacturers, such as cement or textile firms, concerned about the long-term energy costs. KPMG estimates that wind power costs around 3.5 rupees a kilowatt hour, compared with 2.5-3 rupees for imported coal.

“Wind energy is almost price competitive in many places,” T.L. Sankar, senior energy adviser at the Administrative Staff College of India, told a renewable energy conference. And global warming might only add to its attraction. “It can only gain in importance because of concerns about climate change,” added Kamath. reuters

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