Indian Economy - News & Updates - Archive

[Logic note]

Indian Hotels demands apology from Orient Express
2007-12-20 09:19:10 Source : CNBC-TV18


Indian Hotels wants an apology from Orient Express. The search for a global alliance has been reduced to a war of words between the two companies and their managements. CNBC-TV18’s Menaka Doshi reports on the latest round of fighting!

A few months ago Indian hotels bought a 10% stake in Orient Express and asked for an alliance, they were turned down by the Orient Express management. The Tata company bought another 1.5% and asked for an alliance again - this time they were rejected rudely.

Orient Hotels in an open letter said many things, but this one line may have hurt the most. Menaka Doshi quotes the letter sent by Orient Hotels - "We believe any association of our luxury brands and properties with your brands and properties would result in a reduction in the value of our brands and business."

According to Menaka, Indian Hotels found the letter to be pejorative, inaccurate and libelous.

Now Indian Hotels is asking for an apology for what it considers a 'pejorative, inaccurate and libelous' letter that Orient Hotels also issued as a press release, though it was meant to be confidential.

Here's the point-by-point rebuttal by the Taj chain to the issues raised by Orient Express -

* Taj Hotels insists it never suggested a merger. It does not need Orient's help to improve the performance of its non-Indian properties.
* That in fact, Orient has gaps in its network in New York and London that could have been filled by Taj.
* That, the association would not reduce the value of Orient's properties, because Taj enjoys a higher room occupancy rate compared to Orient and that it's trailing EBIDTA margin is 15% more than that of Orient's.
* That, contrary to Orient's allegation Taj does not re-brand all acquired hotels as 'Taj'.

Taj believes Orient Hotels has not met it's shareholders needs, nor does it respect the basic tenets of corporate governance as it has refused to enter into any meaningful dialogue on an alliance with Taj.

Indian Hotels says many Orient shareholders have made advances to meet, but the company has honourably declined them. Now Taj wants an apology from Orient Express.

But here's the killer line at the end of the letter, she says - and it goes - "We believe that those with a fossilized frame of mind risk being marginalised"!

 

[Logic note]

Tata set to drive away in Jaguar, Land Rover

http://www.hindustantimes.com/Story...set+to+drive+away+in+Jaguar%2c+Land+Rover

India Inc is shopping in style. Car makers Ford is set to announce the Tata Group as the preferred bidder for its iconic Jaguar and Land Rover within a fortnight, according to insiders in the deal. The deal is likely to be inked for £1 billion.

The Sunday Times, UK, reported on December 16 that the Tatas are likely to be declared the winners within a fortnight.

Ford’s picking Tata would be historic because it would be the first time a major Western car group is bought by an Indian company.
Last week, three bidders — the Tatas, Mahindras and American buyout group One Equity — were left in the race. It was reported that the trade unions had favoured the Tatas with 46 per cent backing and that strengthened their chances of emerging as the most favoured. Jaguar and Land Rover operations in Britain are based in Wales, and so are some factories of steel giant Corus, which Tata recently bought.

A Welsh government spokesperson told HT that the news was most welcome. “We are very happy with the group here. We hope that more business will come as the Tatas are expected to set up more units for components of the cars. It will boost employment here.” She said the Corus trade unions were satisfied with the management.

The deal is said to be for about £1 billion but the exact amount could change once Tata is declared the preferred bidder. Tata sources refused to comment. But Tatas may have to negotiate a settlement with the pension trustees and also ensure that Ford continues to maintain regular supply of components and engines.

 

[Energon]

As per this analysis I read recently, the British labor unions were in favor of Tata.

It also says that Land Rover may be a profit making venture while Jaguar may prove to be a white elephant. Given that Tata has promised not to lay off a large number of British workers, I don't know how they can radically reduce costs.

It'll be very interesting to see what Tata manages to do with these companies.

 

[Logic note]

Given that Tata has promised not to lay off a large number of British workers, I don't know how they can radically reduce costs.

Given the Fact that these are Luxury brands there is no need to cut cost . price is never a factor when it comes to luxury brand .
its the fall in economy in USA which can effect the sales of these brands .
the biggest chalange that TATA wil face is the racist perception of west about Asian nations and its ppl .
I was reading some where that few dealers in US have objected to this take over by TATA because according to them , ppl in west can accpet a luxury brand made in India or China ..

 

[con]

As per this analysis I read recently, the British labor unions were in favor of Tata.

It also says that Land Rover may be a profit making venture while Jaguar may prove to be a white elephant. Given that Tata has promised not to lay off a large number of British workers, I don't know how they can radically reduce costs.

It'll be very interesting to see what Tata manages to do with these companies.

By expanding Jag's market. Currently it is too concentrated in US & UK market. With almost the same price as high end Mercs/BMW lot if business men in India would prefer Jags over merc,given than Jag is now Indian.

Tata doesn't need to depend on UK/US market alone.

 

[Neo]

Boeing signs 10-year deal with Indian firm ​

Friday, December 21, 2007

NEW DELHI: Boeing Co signed a 10-year agreement with India’s state-run Hindustan Aeronautics Ltd (HAL) for aerospace manufacturing in India worth more than $1 billion, a senior official said on Thursday.

“Under the agreement, Boeing and HAL will explore business opportunities aimed at transferring work packages to India with an initial value of $10-$20 million annually,” Jim Albaugh, president and CEO of Boeing’s Integrated Defence Systems said in a statement.

“Boeing would also support Hindustan Aeronautics Ltd in developing manufacturing processes and capabilities needed for the production of hardware for Boeing and/or its subcontractors,” he said.

Boeing signs 10-year deal with Indian firm

 

[Neo]

Indian inflation cools to 3.45pc​

NEW DELHI, Dec 28: India’s inflation rate fell two-tenths of a percentage point to 3.45 per cent, official data showed on Friday, but analysts held out little hope of an early interest rate cut.

Annual inflation slowed to 3.45 per cent for the week ended Dec 15 from 3.65 per cent the previous week, according to the wholesale price index, India’s most watched cost-of-living monitor.

The fall was driven by lower prices of fruits, vegetables and textile products. However, poultry, spices and prices of some other goods rose.

Annual inflation stood at 5.73 per cent a year ago.

Inflation has fluctuated in recent weeks but is still well below the central bank’s target of close to five per cent for the fiscal year to March 31, 2008.

Analysts say they expect no swift cut in interest rates as the central bank fears high global oil prices could trigger a rise in state-set domestic fuel prices and is concerned about strong world commodity prices.

The central bank “would prefer to see a meaningful correction in international oil and food prices before officially signing off on a loosening of monetary policy,” said economist Chetan Ahya at Morgan Stanley in a research note.

India’s crude costs have shot up by nearly 150 per cent since April 2004 but retail petrol prices have risen by just 29 per cent. The price caps are costing state-run oil retailers around $50m a day.

“There is little chance of interest rates coming down due to high inflationary expectations,” HDFC Bank’s chief economist Abheek Barua said.

Growth for the first half of the fiscal year to March 31 was 9.1 per cent. But economists expect the economy to lose pace in coming months as effects of aggressive monetary tightening to curb prices take hold.

HONG KONG: Hong Kong exports growth rose 6.6 per cent in November, slowing from a 9.8 per cent increase in October, on declines in exports to the United States, official figures showed Friday.

A government spokesman said the Chinese market was vibrant although it expanded at a less rapid pace than in previous months.

Most major Asian markets performed well, off-setting the 3.4 per cent fall in exports to the US.In November, total exports stood at 244 billion Hong Kong dollars (31.30 billion US) with re-exports, or goods mostly produced in neighbouring China and exported from Hong Kong, up 6.9 percent to 234 billion dollars.

Domestic exports increased 0.8 per cent to 10 billion dollars in November, while imports grew 9.3 per cent to 260 billion dollars.

For the first 11 months of 2007, total exports rose 9.30pc with re-exports up 11.10pc, imports up 10.30 per cent but domestic exports down 20.60 per cent.—AFP

Indian inflation cools to 3.45pc -DAWN - Business; December 29, 2007

 

[Neo]

The surge in foreign portfolio investment​

By Anand Kumar

FOR India’s capital markets, 2007 was indeed a remarkable year. The Sensex, the benchmark index on the Bombay Stock Exchange, saw record gains, with both international and domestic investors pouring billions of dollars into the stock markets.

The Sensex gained by nearly 50 per cent during the year, skyrocketing from levels of around 14,000 to 20,000 and above. India’s market capitalisation for the first time exceeded the country’s gross domestic product (GDP) – it touched a record $1.5 trillion, as against a GDP (in actual terms, not purchasing power parity) of nearly a trillion dollars.

Foreign institutional investors (FIIs) injected over $16 billion into the stock markets in 2007, as against $9 billion in the previous year. This was despite attempts by the government to cool down the inflows, by fiddling with laws relating to participatory notes (PN), an offshore derivative instrument, popular among several international investors keen on participating in the booming stock markets.

In October, the Securities and Exchange Board of India (Sebi), the capital market regulator, stunned investors by imposing curbs on FII investments through the PN route. While the markets crashed in the initial stage, they recovered as sentiments improved. Most foreign investors, who had opted for the PN route in the past, will be ploughing in their funds as FIIs over the next few months, so the curbs are unlikely to impact inflows.

Hefty returns from the Indian stock markets are luring international investors, many of who have been scarred by the sub-prime mortgage crisis in the US. They hope to recover the billions of dollars written-off in the crisis by investing in emerging markets like India.

The Indian economy, growing at a breezy nine-plus per cent, is expected to continue expanding at a brisk pace. Foreign direct investment (FDI) inflows are also growing. Last week, federal commerce minister Kamal Nath revealed that FDI in the first-half of the fiscal (April to October) added up to $7.2 billion, making India the second most attractive destination for foreign investments, after China. This was a 65 per cent jump over the figures for the corresponding period last year.

In financial year 2006-07, India received FDI of $15.7 billion. Nath wants to double this in the current fiscal. Analysts expect India to attract FDI of over $100 billion over the next five years.

The United Progressive Alliance (UPA) government, which has shelved several other key features of the economic reforms process – including privatisation, labour reforms and banking and pension funds reforms – under pressure from its leftist allies, has, however, been opening up several sectors to FDI.

The opening up of the real estate sector to 100 per cent FDI has triggered off a huge flow of investments from abroad in recent months.

While the secondary markets were buoyant during the year, the primary market too remained hyper-active. About $8.7 billion were raised by Indian corporates through initial public offers (IPOs) of shares in 2007, while another nearly $300 million were raised through follow-on public offers (FPOs).

There were over 100 IPOs that brought in a record $8.7 billion, a huge, 72 per cent jump over the figures for 2006. The two biggest IPOs were by ICICI Bank, the largest private sector bank in India (which raised $2.55 billion), and the largest real estate developer, DLF (about $2.35 billion).

India’s IPO market has ballooned phenomenally in recent years. In 1990, Indian companies raised a mere $250 million from the primary markets; even as recently as 2001, they could raise hardly $100 million through IPOs.

According to analysts, Indian companies are expected to raise about $7 billion over the next few months, with nearly 30 IPOs being planned.

But India’s IPO market pales when compared with those of China, where companies raised a whopping $90-plus billion dollars through public issues. Globally, firms raised over $255 billion through IPOs in 2007, according to international consultancy Ernst and Young. The four BRIC (Brazil, Russia, India, China) nations accounted for over $105 billion of IPO funds. With the $8.7 billion raised through IPOs, India was the seventh largest market in the world.

According to Prithvi Haldea, chairman and managing director, Prime Database – which tracks public issues in India – the real estate sector accounted for a third of funds raised through IPOs in 2007.

Improved regulation and transparency has transformed India’s primary markets. Over 99 per cent of the funds that were raised through IPOs were through the book-building route.

Of the 101 IPOs, 50 were over-subscribed by more than 10 times. Consequently, of the 93 IPOs that have been listed, 85 saw a premium on listing; in 38 issues, investors could exit on day one with a hefty profit of 50 per cent, whereas in 16 instances, their wealth doubled on listing. Not surprisingly, public issues have had an overwhelming response in India in recent months.

While foreign investors have been bringing in billions of dollars into India in 2007, it was also the year when domestic businesses began acquiring international companies on an aggressive note.

For the first time, there were more out-bound merger and acquisition deals than in-bound ones. M&A deals (both out-bound and in-bound) involving Indian firms added up to nearly $70 billion, according to Grant Thornton, a consultancy. This was nearly 150 per cent higher than in the previous year.

The most significant and high-profile acquisition was by the Tatas, which paid an eye-popping $13.65 billion for Anglo-Dutch steelmaker Corus. Encouraged by the deal, the Tatas went about eyeing many other firms.

The group, one of India’s largest private sector industrial houses, is currently in the race to acquire British luxury car brands Jaguar and Land Rover from Ford Motors of the US for a price of over $2 billion. Trade unions at the British factories are backing the Tata’s bid, and even Ford Motors is eager to sell the two brands to the Indian group. Mahindra & Mahindra, the other Indian auto major, which also evinced serious interest in acquiring the two brands, is almost out of the race now.

But things have not been smooth sailing for the Tatas in their overseas acquisitions. Racist comments have been made in the west about the growing ambition of Indian groups like the Tatas for luxury brands. Some Jaguar dealers in the US felt it would be inappropriate for the luxury car-maker to be controlled by a group that plans to roll out the world’s cheapest car – the Rs1 lakh ‘people’s car’ promised by Ratan Tata – this year.

The Tatas have also acquired a nearly 12 per cent stake in the Orient Express Hotels – which owns several luxury brands, including the eponymous and legendary train running in Europe. However, Orient Express Hotels has spurned the offer by the Tatas for a strategic tie-up, claiming that its brands would be diluted by associating with the Indian group.

The Tatas have threatened to launch legal action against, Orient Express Hotels, while Indian business bodies have lambasted the company’s ‘arrogance.’ R.K. Krishna Kumar, top executive at Indian Hotels Co – which runs the Taj brand of hotels – a Tata group company, demanded a formal apology from Paul White, the Orient Express Hotels’ chief, for his ‘pejorative and libelous’ note regarding the Tata proposal.

Other Indian businessmen have also not allowed allegedly racist and discriminatory policies from affecting their overseas acquisitions. Despite stiff opposition from Scottish brewers, Vijay Mallya acquired the Whyte & Mackay brand of Scotch whisky for $1.2 billion.

For Indian billionaire-businessmen, 2007 was a year when they unveiled their global ambitions and gave warning that they were ready to put up a determined – even nasty – fight in pursuit of their goals.

The surge in foreign portfolio investment -DAWN - Business; December 31, 2007

 

[Flintlock]

Jamshedpur plant to be world's largest
1 Jan 2008, 1320 hrs IST,PTI

SMS NEWS to 58888 for latest updates
Jamshedpur plant will become world's single largest unit'
JAMSHEDPUR: When the 10-mtpa capacity expansion of Tata Steel completes in 2010, Jamshedpur plant will become the single largest unit and one of the most modern plants in the world, according to Tata Steel managing director B Muthuraman.

"With the completion of the 10-mtpa expansion project, we will be able to fulfil the promises made to our customers even better," B Muthuraman said in a company press release.

The following facilities will be developed as a part of the 10-mtpa expansion project - augmentation of mines, pellet plant of 6 mtpa, expansion of Hooghly Metcoke from 1.2 to 1.6 mtpa, raw material handling facilities, upgradation of existing A-E furnaces, new LD3 BOF shop with 2 x 160 t converters, two single strand thin slab caster of 1.2 mtpa capacity each with 2.4 mtpa hot rolling facilities.

It will also help augmentation of LD2 to 4.0 mtpa, new lime calcining plant, augmentation of utilities and water system, augmentation of power generation & power system, logistics and improvement of town roads, the release said.

H M Nerukar, chief operating officer (Steel) - Tata Steel, Raghunth Pandey, President - Tata Workers Union, were among other dignitaries present on the occasion.
About

Jamshedpur plant to be world's largest-India Business-Business-The Times of India

 

[Neo]

Indian IT market revenue set to grow 24pc: report ​

Wednesday, January 02, 2008

BANGALORE: India’s information technology market is poised to expand 24 percent in 2008 as it enters a new “growth trajectory,” an industry report said Tuesday.

Revenue from the domestic IT and outsourcing market will touch 1.1 trillion rupees (27.9 billion dollars) this year, offsetting a slowdown in IT spending worldwide, according to the report by market research firm IDC.

“The industry is now onto a new growth trajectory,” IDC India country manager Kapil Dev Singh said in a statement. But the firm warned that global IT spending would drop, with the US market of particular concern.

IDC forecast that worldwide IT market growth will slow to between 5.5 percent and six percent from 2007’s estimated 6.9 percent. India’s booming economy, growing annually by nine percent, is spurring domestic IT spending as companies upgrade computer systems to stay competitive and consumers log onto the Internet.

India’s software and services exports grew by 33 percent to 31.4 billion in the financial year to March 2007 while total revenue climbed by 31 percent to 40 billion dollars. The domestic market has largely been ignored by an industry that has boomed on work from Western firms trying to cut costs by taking advantage of India’s English-speaking, computer-savvy graduates who work for lower salaries.

As the rupee strengthened 12 percent last year against the dollar, eroding revenue from the US market that accounts for two-thirds of software exports, IT companies such as Tata Consultancy, Infosys and Wipro are looking at other countries and the home market to diversify risks. “The India domestic IT market will transform significantly,” propelled by a greater need for more sophisticated services, the report said.

Indian IT market revenue set to grow 24pc: report

 

[Neo]

Indian November imports faster than exports ​

Wednesday, January 02, 2008

NEW DELHI: Indian imports grew faster than exports in November, data showed on Tuesday, and analysts expect the trade deficit could widen further on a mix of record oil prices, a fast-growing economy and a strong rupee.

Exports in November rose 26.8 per cent from a year earlier to $12.4 billion in November, while imports rose an annual 29.3 per cent to $19.8 billion, government data showed on Tuesday.That left a trade deficit of $7.4 billion for November, larger than $5.5 billion a year earlier.

The rupee rose 12.3 per cent against the dollar last year, denting exporters’ competitiveness in foreign markets but offering some cushion against high oil prices. “There could be some moderation in export growth in the coming months. The annual export target is difficult to meet,” said D K Joshi, principal economist at rating agency Crisil.

Last April, the government set an export target of $160 billion for the fiscal year ending in March 2008. In Dec, Commerce Secretary G K Pillai said exports were likely to be $140 billion.

Indian November imports faster than exports

 

[Bushroda]

Losing an Edge, Japanese Envy India’s Schools
By MARTIN FACKLER
New York Times
January 2, 2008

MITAKA, Japan — Japan is suffering a crisis of confidence these days about its ability to compete with its emerging Asian rivals, China and India. But even in this fad-obsessed nation, one result was never expected: a growing craze for Indian education.

Despite an improved economy, many Japanese are feeling a sense of insecurity about the nation’s schools, which once turned out students who consistently ranked at the top of international tests. That is no longer true, which is why many people here are looking for lessons from India, the country the Japanese see as the world’s ascendant education superpower.

Bookstores are filled with titles like “Extreme Indian Arithmetic Drills” and “The Unknown Secrets of the Indians.” Newspapers carry reports of Indian children memorizing multiplication tables far beyond nine times nine, the standard for young elementary students in Japan.

And Japan’s few Indian international schools are reporting a surge in applications from Japanese families.

At the Little Angels English Academy & International Kindergarten, the textbooks are from India, most of the teachers are South Asian, and classroom posters depict animals out of Indian tales. The kindergarten students even color maps of India in the green and saffron of its flag.

Little Angels is located in this Tokyo suburb, where only one of its 45 students is Indian. Most are Japanese.

Viewing another Asian country as a model in education, or almost anything else, would have been unheard-of just a few years ago, say education experts and historians.

Much of Japan has long looked down on the rest of Asia, priding itself on being the region’s most advanced nation. Indeed, Japan has dominated the continent for more than a century, first as an imperial power and more recently as the first Asian economy to achieve Western levels of economic development.

But in the last few years, Japan has grown increasingly insecure, gripped by fear that it is being overshadowed by India and China, which are rapidly gaining in economic weight and sophistication. The government here has tried to preserve Japan’s technological lead and strengthen its military. But the Japanese have been forced to shed their traditional indifference to the region.

Grudgingly, Japan is starting to respect its neighbors.

“Until now, Japanese saw China and India as backwards and poor,” said Yoshinori Murai, a professor of Asian cultures at Sophia University in Tokyo. “As Japan loses confidence in itself, its attitudes toward Asia are changing. It has started seeing India and China as nations with something to offer.”

Last month, a national cry of alarm greeted the announcement by the Organization for Economic Cooperation and Development that in a survey of math skills, Japan had fallen from first place in 2000 to 10th place, behind Taiwan, Hong Kong and South Korea. From second in science in 2000, Japan dropped to sixth place.

While China has stirred more concern here as a political and economic challenger, India has emerged as the country to beat in a more benign rivalry over education. In part, this reflects China’s image in Japan as a cheap manufacturer and technological imitator. But India’s success in software development, Internet businesses and knowledge-intensive industries in which Japan has failed to make inroads has set off more than a tinge of envy.

Most annoying for many Japanese is that the aspects of Indian education they now praise are similar to those that once made Japan famous for its work ethic and discipline: learning more at an earlier age, an emphasis on memorization and cramming, and a focus on the basics, particularly in math and science.

India’s more demanding education standards are apparent at the Little Angels Kindergarten, and are its main selling point. Its 2-year-old pupils are taught to count to 20, 3-year-olds are introduced to computers, and 5-year-olds learn to multiply, solve math word problems and write one-page essays in English, tasks most Japanese schools do not teach until at least second grade.

Indeed, Japan’s anxieties about its declining competitiveness echo the angst of another nation two decades ago, when Japan was the economic upstart.

“Japan’s interest in learning from Indian education is a lot like America’s interest in learning from Japanese education,” said Kaoru Okamoto, a professor specializing in education policy at the National Graduate Institute for Policy Studies in Tokyo.

As with many new things here, the interest in Indian-style education quickly became a fad.

Indian education is a frequent topic in forums like talk shows. Popular books claim to reveal the Indian secrets for multiplying and dividing multiple-digit numbers. Even Japan’s conservative education ministry has begun discussing Indian methods, said Jun Takai of the ministry’s international affairs division.

Eager parents try to send their children to Japan’s roughly half dozen Indian schools, hoping for an edge on the competitive college entrance exams.

In Tokyo, the two largest Indian schools, which teach kindergarten through junior high, mainly to Indian expatriates, received a sudden increase in inquiries from Japanese parents starting last year.

The Global Indian International School says that 20 of its some 200 students are now Japanese, with demand so high from Indian and Japanese parents that it is building a second campus in the neighboring city of Yokohama.

The other, the India International School in Japan, just expanded to 170 students last year, including 10 Japanese. It already has plans to expand again.

Japanese parents have expressed “very, very high interest” in Indian schools, said Nirmal Jain, principal of the India International School.

The boom has had the side effect of making many Japanese a little more tolerant toward other Asians.

The founder of the Little Angels school, Jeevarani Angelina — a former oil company executive from Chennai, India, who accompanied her husband, Saraph Chandar Rao Sanku, to Japan in 1990 — said she initially had difficulty persuading landlords to rent space to an Indian woman to start a school. But now, the fact that she and three of her four full-time teachers are non-Japanese Asians is a selling point.

“When I started, it was a first to have an English-language school taught by Asians, not Caucasians,” she said, referring to the long presence here of American and European international schools.

Unlike other Indian schools, Ms. Angelina said, Little Angels was intended primarily for Japanese children, to meet the need she had found when she sent her sons to Japanese kindergarten.

“I was lucky because I started when the Indian-education boom started,” said Ms. Angelina, 50, who goes by the name Rani Sanku here because it is easier for Japanese to pronounce. (Sanku is her husband’s family name.)

Ms. Angelina has adapted the curriculum to Japan with more group activities, less memorization and no Indian history. Encouraged by the kindergarten’s success, she said, she plans to open an Indian-style elementary school this year.

Parents are enthusiastic about the school’s rigorous standards.

“My son’s level is higher than those of other Japanese children the same age,” said Eiko Kikutake, whose son Hayato, 5, attends Little Angels. “Indian education is really amazing! This wouldn’t have been possible at a Japanese kindergarten.”

 

[Bushroda]

India produces big companies, top executives
Nation has largest steelmaker. Emigrants at helm of U.S. firms

By Ellen Simon
Associated Press
Published by: Ohio.com
Wednesday, Jan 02, 2008

NEW YORK: The ascension of Indian-born leaders like Vikram Pandit, the new CEO of Citigroup Inc., tracks the economic rise of their home country, once seen by U.S. business as a large market and a source of low-cost technology workers, now viewed as a business power that rivals the U.S. in some industries.

The change is visible on the board of the U.S.-India Business Council, once comprised only of executives from U.S. companies doing business in India. Now, the board includes executives from global companies with business in India, Indian-Americans heading global
businesses and Indian companies with interest in the U.S.

Board members include Arun Kumar, head partner at KPMG International, Indra Nooyi, CEO of PepsiCo Inc. and Lakshmi Narayanan, vice chairman of Cognizant Technology Solutions, an outsourcing company that bills itself as ''the best of both worlds.''

ArcelorMittal has grown into the world's largest steelmaker, recently offering $1.65 billion for the remaining shares of Chinese steelmaker China Oriental Group Co. it doesn't already own. The company is based in the Netherlands, but its Indian CEO and founder, Lakshmi Mittal, controls nearly half its shares.

India's outsourcing companies have grown to take on more valuable contracts, pitting them against U.S.-based giants such as IBM Corp. and Accenture Ltd.

For instance, India's Tata Consultancy Services Ltd. in October announced a $1.2 billion contract from American market research firm Nielsen, the largest outsourcing order ever won by an Indian company and one that includes services from information technology infrastructure management to payroll processing.

And India's Tata Group has expressed its interest in buying troubled Ford Motor Co.'s Jaguar and Land Rover units.

''It's harder to see the borders now,'' said Gregory Kalbaugh, director and counsel of the U.S.-India Business Council.

As the Indian economy has been on a tear, clocking 6 percent to 8 percent annual growth, Indian and U.S. political leaders have viewed business ties as a way to bring the countries closer. President George Bush and Prime Minister Manmohan Singh handpicked members of the US-India CEO Forum, launched in 2005, to plan increased partnership and cooperation.

Meanwhile, U.S. businesses, increasingly dependent on foreign trade, have intensified their interest in promoting an international group of executives. Nearly half of sales for 238 of the largest U.S. companies was from outside the U.S. for fiscal year 2006, up from one-third of sales in fiscal 2001, according to Standard & Poor's.

At the same time, Indians who came to the U.S. to study 30 years ago have worked their way up the ranks of American companies. The latest round of promotions includes Shantanu Narayen, who joined Adobe Systems Inc. in 1998 and was appointed CEO this month.

Others have been in their jobs far longer, such as Ramani Ayer, chairman and CEO of Hartford Financial Services Group Inc., who has led the company since 1997.

Some of the rising stars:

• K.S. ''Sonny'' Kalsi, managing director and global head of Morgan Stanley's real estate investing business, which has $88.3 billion in assets under management;

• Meena Mutyala, vice president of engineering and product management for Westinghouse Electric Corp.'s nuclear fuel business worldwide;

• Sheila Hooda, senior managing director, strategy at $437 billion investment company TIAA-CREF, who was previously a managing director in the investment banking division at Credit Suisse.

The rise of Indian-born executives such as Pandit, recently named CEO of Citigroup, the world's largest bank, follows by more than a decade the advances of Indian business consultants.

A handful of Indian-born academics, especially Ram Charan and C.K. Prahalad, long ago established themselves at the upper echelons of business consulting; consultant and author Charan was reportedly the first outsider Jeffrey Immelt turned to for advice when he became CEO of General Electric Co.

Rajat Gupta, who joined McKinsey & Co. in 1973, was elected managing director of the management consulting firm in 1994, then re-elected to two more three-year terms in 1997 and 2000. Gupta is leaving McKinsey at the end of this year to concentrate on his board positions.

One of Gupta's latest gigs: special adviser on management reform to the secretary-general of the United Nations.

NEW YORK: The ascension of Indian-born leaders like Vikram Pandit, the new CEO of Citigroup Inc., tracks the economic rise of their home country, once seen by U.S. business as a large market and a source of low-cost technology workers, now viewed as a business power that rivals the U.S. in some industries.

The change is visible on the board of the U.S.-India Business Council, once comprised only of executives from U.S. companies doing business in India. Now, the board includes executives from global companies with business in India, Indian-Americans heading global
businesses and Indian companies with interest in the U.S.

Board members include Arun Kumar, head partner at KPMG International, Indra Nooyi, CEO of PepsiCo Inc. and Lakshmi Narayanan, vice chairman of Cognizant Technology Solutions, an outsourcing company that bills itself as ''the best of both worlds.''

ArcelorMittal has grown into the world's largest steelmaker, recently offering $1.65 billion for the remaining shares of Chinese steelmaker China Oriental Group Co. it doesn't already own. The company is based in the Netherlands, but its Indian CEO and founder, Lakshmi Mittal, controls nearly half its shares.

India's outsourcing companies have grown to take on more valuable contracts, pitting them against U.S.-based giants such as IBM Corp. and Accenture Ltd.

For instance, India's Tata Consultancy Services Ltd. in October announced a $1.2 billion contract from American market research firm Nielsen, the largest outsourcing order ever won by an Indian company and one that includes services from information technology infrastructure management to payroll processing.

And India's Tata Group has expressed its interest in buying troubled Ford Motor Co.'s Jaguar and Land Rover units.

''It's harder to see the borders now,'' said Gregory Kalbaugh, director and counsel of the U.S.-India Business Council.

As the Indian economy has been on a tear, clocking 6 percent to 8 percent annual growth, Indian and U.S. political leaders have viewed business ties as a way to bring the countries closer. President George Bush and Prime Minister Manmohan Singh handpicked members of the US-India CEO Forum, launched in 2005, to plan increased partnership and cooperation.

Meanwhile, U.S. businesses, increasingly dependent on foreign trade, have intensified their interest in promoting an international group of executives. Nearly half of sales for 238 of the largest U.S. companies was from outside the U.S. for fiscal year 2006, up from one-third of sales in fiscal 2001, according to Standard & Poor's.

At the same time, Indians who came to the U.S. to study 30 years ago have worked their way up the ranks of American companies. The latest round of promotions includes Shantanu Narayen, who joined Adobe Systems Inc. in 1998 and was appointed CEO this month.

Others have been in their jobs far longer, such as Ramani Ayer, chairman and CEO of Hartford Financial Services Group Inc., who has led the company since 1997.

Some of the rising stars:

• K.S. ''Sonny'' Kalsi, managing director and global head of Morgan Stanley's real estate investing business, which has $88.3 billion in assets under management;

• Meena Mutyala, vice president of engineering and product management for Westinghouse Electric Corp.'s nuclear fuel business worldwide;

• Sheila Hooda, senior managing director, strategy at $437 billion investment company TIAA-CREF, who was previously a managing director in the investment banking division at Credit Suisse.

The rise of Indian-born executives such as Pandit, recently named CEO of Citigroup, the world's largest bank, follows by more than a decade the advances of Indian business consultants.

A handful of Indian-born academics, especially Ram Charan and C.K. Prahalad, long ago established themselves at the upper echelons of business consulting; consultant and author Charan was reportedly the first outsider Jeffrey Immelt turned to for advice when he became CEO of General Electric Co.

Rajat Gupta, who joined McKinsey & Co. in 1973, was elected managing director of the management consulting firm in 1994, then re-elected to two more three-year terms in 1997 and 2000. Gupta is leaving McKinsey at the end of this year to concentrate on his board positions.

One of Gupta's latest gigs: special adviser on management reform to the secretary-general of the United Nations.

 

[Bushroda]

India mulls investing $10b in Iran
Press TV, Iran
Thu, 03 Jan 2008 04:03:16

Indian and Iranian officials are to meet on Thursday in New Delhi to discuss development of one of the world's largest gas fields in Iran.

India's biggest explorers, Oil and Natural Gas Corp (ONGC) and the Hinduja Group have teamed up to secure a possible $10 billion contract on development of Phase 12 of South Pars, one of the world's largest gas fields, and Azadegan, Iran's largest oil find in the past three decades, ONGC's Chairman R.S. Sharma said ahead of meeting with Iranian officials.

Sharma termed as positive the first round of talks, saying, "We are proceeding cautiously but steadily. The areas have huge potential."

"They (Iranians) are very interested. They are very satisfied with ONGC's competence, technical and financial capabilities and project execution," he stated.

ONGC Videsh Ltd, the overseas arm of ONGC, and Ashok Leyland Project Services Ltd, a subsidiary of Hinduja Group, will sign an agreement with Iran.

Energy-hungry India is keen on investing in Iran oil and gas sectors in a bid to fuel its booming economy. Iran holds the world's second-largest oil and gas reserves.

 

[Bushroda]

India manufacturing PMI reaches 33-month high, at 61.9
Reliable Plant, UK

The seasonally adjusted ABN AMRO India Purchasing Managers’ Index (PMI) posted 61.9 in December, rising from 60.9 in the previous month, to signal a marked improvement in the health of the Indian manufacturing sector. Moreover, the index reading was the highest in the 33-month survey history.

Indian manufacturers signaled a sharp rise in production at their plants in December, which anecdotal evidence linked to favorable market conditions and a sharp rise in volumes of new work received.

The level of new business placed with Indian manufacturers rose further in December, bolstered by strong demand, especially in domestic markets. Total new order growth was the fastest in the survey history in December, while new business from abroad rose markedly.

Firms continued to add to their workforces in December, with the rate of employment growth accelerating to a 17-month high. Nevertheless, staffing levels rose only moderately. Backlogs of work rose for the ninth consecutive month in December, albeit only weakly.

Firms reported a further solid rise in their average costs in December, which they attributed to higher prices for a number of inputs (including metals and oil). Input price inflation was broadly unchanged from the previous month.

Average charge inflation slowed further from October’s high in December, although firms retained a solid degree of pricing power. The increase in factory gate prices was linked to rising average costs and strong market demand.

Commenting on the latest survey findings, Gaurav Kapur, senior economist, ABN AMRO Bank N.V, said: “The rapid improvement witnessed in the manufacturing sector activity since October continues and is gaining traction. With the PMI printing at 61.9 for December, the index has reached a new peak in its 33-month history and betters the previous high of 61.7, seen just two months ago. For the quarter ended December, the PMI averaged at 61.5, making this the best quarter in the history of the survey. The most encouraging sign from survey results is the rising levels of new incoming business. The manufacturing sector has seen robust demand growth from both local, as well as external sources, in this quarter. In fact, in December the new orders index printed at its highest level since April 2005. It was, however, local demand which pushed up the new orders index and the PMI to record levels. That is a reflection of a pick-up in domestic consumption, after witnessing some moderation due to higher interest rates in the previous quarter and also corresponds with higher bank credit off-take since October.

“Export orders index, on the other hand, after registering its highest reading in October has subsequently declined in November and December. Thus, while manufacturers continue to get new export orders, the pace of growth is falling. This could be due to a slowdown in the key export markets. In the quarter ended December, on the whole, external demand improved significantly over the previous quarters this year. And this came about in spite of rupee appreciation.

Higher levels of new business have also pushed up the pace of overall output growth. The Output Index rose to 65.3 in December from 64.9 in November. Robust activity levels in the manufacturing sector also signal that overall momentum in the other parts of the economy is quite strong.”