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[Bushroda]

A world in which the US is no longer No. 1
Journalist Fareed Zakaria writes of the rise of new global powers.

By Jonathan Rosenberg
Christian Science Monitor, MA
June 13, 2008 edition


The Post-American World By Fareed Zakaria
W.W. Norton, 292 pp., $25.95

While the United States remains the world’s most powerful country – militarily and economically – its place on the international stage is changing. The wealthiest person on earth is Mexican, the tallest building is in Taipei (soon to be surpassed by one in Dubai), and the biggest factories are in China. India’s film industry, Bollywood, is now the world’s largest, producing more movies and selling more tickets than Hollywood. And when experts identify the multinational companies that will become leaders in the future, they point to firms in Latin America, India, South Korea, Taiwan, and Malaysia.

The US has even surrendered its supremacy in shopping malls. Only one of the world’s Top 10 malls is in the United States. And who’d have guessed that an American shopaholic with an urge to visit the biggest mall on earth would have to fly to Beijing?

These developments illustrate the central point of Fareed Zakaria’s illuminating and timely new book The Post-American World. Over the past couple of decades, a global transformation has seen countless countries experience remarkable economic growth. While the US will remain an economic power, the days of American economic preeminence, which characterized the 20th century, are over. According to Zakaria, this points not to the decline of the US, but to “the rise of the rest.”

Zakaria writes that the global economic explosion is a consequence of political change (the fall of the Soviet state discredited central planning); the free movement of capital around the world (the daily flow of trillions of dollars lubricates the global economy); and the communications revolution (the Internet and cellphones have transformed business by driving down costs and increasing efficiency).

The rise of India and China

In presenting this story, Zakaria, editor of Newsweek International and an astute analyst of US foreign policy, looks closely at economic developments in China and India, and assesses how the spread of global wealth will affect the US.

With annual economic growth averaging 9 percent for the past 30 years, China has emerged as a global economic powerhouse. In 1978, the country made 200 air conditioners; in 2005, it made 48 million. It produces two-thirds of the world’s photocopiers, microwave ovens, and shoes, and now exports as much each day as it did in all of 1978.

The average income for a Chinese person has increased sevenfold during that time, allowing 400 million people to escape poverty. While the country faces enormous challenges (how, for example, will the government reconcile its policy of economic liberalization with its refusal to democratize the political system?), China will prove a formidable competitor for the United States and a key concern for US policymakers.

Zakaria’s discussion of India is particularly incisive. Born and raised there (he left to attend Yale University and later Harvard University), he details the changes washing over the country, which, like China, is developing at warp speed. While there are key differences between them (India is a democracy), India’s remarkable growth, like China’s, has drastically reduced poverty. More Indians have risen from poverty in the past 10 years than in the previous 50.

Though the Indian economy is far smaller than China’s, experts predict that by 2020, its gross domestic product will equal Britain’s. Driven by a high rate of personal consumption, India’s economy, based mainly on services and industry, is unlike any in the developing world. To be sure, hundreds of millions of Indians remain unspeakably poor, but Zakaria claims that the economic expansion can be felt everywhere, “even in the slums.” And US policymakers and business leaders will be glad to know that the Indians are overwhelmingly pro-American.

What role will America play?

Zakaria concludes with an assessment of America’s place in this new era. The US should not be alarmed, he writes, for it will not be an anti-American age. Indeed, the American political and economic model is admired across the globe.

America can maintain its considerable economic power, Zakaria argues. Immigration and American higher education will help the economy remain vibrant and innovative. And America’s existing strength in nanotechnology and biotechnology, two cutting-edge industries, will catalyze American economic growth well into the 21st century.

Nevertheless, the US confronts real challenges. Zakaria sees the American political system – captured by “money, special interests, a sensationalist media, and ideological attack groups” – as the country’s “core weakness.” It serves partisan battles, he writes, but solves no real problems.

Zakaria is also concerned that in recent years American leaders have seemed “clueless about the world.” While the Middle East is important, it is time to stop worrying mainly about the ancient conflict between Sunnis and Shiites in Iraq. Instead, US policymakers should start thinking seriously about the 21st century. Forging constructive relationships with China, India, Russia, and Brazil will be essential, for it is there that the “future is being made.”

Jonathan Rosenberg teaches US history at Hunter College and the CUNY Graduate Center.

 

[Bushroda]

Investing in India's growth
Written by: Malar Velaigam
Investors Chronicle, UK
Created: 13 June 2008

No one would have predicted that the largest float on the Alternative Investment Market (Aim) this year would be an Indian investment fund, but this week history was made and KSK Emerging India Energy Fund floated on Aim raising $200m (£101.2m) showing the rest of the world that India's growth remains very much on track. In fact, officials have recently announced growth forecasts of 8-8.5 per cent for India's economy in the 2008-09 financial year – which, although less than last year's astronomical 9.4 per cent growth, is still pretty spectacular considering that the rest of the world has gone into economic slowdown.

The Bombay Stock Exchange's Sensitive Index (BSE Sensex) – a value-weighted index consisting of India's 30 most actively traded stocks – has been increasing at an almost equally rapid pace. The Sensex has risen steadily over the past two years, hitting 14652.09 points last summer and powering on to hit 20873.33 points by January 2008.However, reverberations from the global financial crisis sent the Sensex down to 16748.2 points by the end of January 2008. The index has since fallen to lows of 14808 points, but has been showing encouraging signs of recovery.

The Alternative Investment Market (Aim) All-Share Index has also suffered significantly, falling to a year low of 939.5 points on 20 March 2008. But one index has bucked the trend and remained resilient in spite of the performance of both Sensex and the Aim All-Share: the ic Aim India Index. In March 2007, following a steady inflow of Indian companies on to Aim, we created the ic Aim India Index. Since then, the index has grown to include another five companies, taking the total to 26 companies that have Indian-operations, or are based in India. So why have Indian companies on Aim had a stronger run than both their India-listed counterparts and UK companies on Aim?

First, it's because India's growth story is still being written. And young, high-growth businesses offer defensive qualities as they are not in tandem with the global economy at large.

India's common law system is based on UK common law, making it easy to understand. Corporate governance is advanced and accounting standards do not vary across the country as they do in China.

Sam Tully, corporate banking director at Seymour Pierce – which has also established an India Index – says that there is also a growing understanding by Indian companies of the kind of reporting expected of companies on Aim. So while the Sensex undergoes its period of correction, and Aim shares go through a period of consolidation, investors have an opportunity to ride the high-growth company and India waves by investing in companies on the ic Aim India index.

 

[nitesh]

On India, Emmott credits the momentum that has built up thanks to consistent public policy, regardless of which political party is in power. All Indian governments of the past 15 years have continued economic reforms, moved closer to the United States and deepened engagement in East and Southeast Asia. As India attains global standards of economic growth, it can no longer be overlooked or treated with contempt, as China did in the past. Emmott sees promise in the sharp rise in India's levels of savings (32% of GDP), investment (34% of GDP) and manufacturing sector performance.

But this will continue for how much time. The bloody commies heave already been successful (till now) in holding the nuke deal. The Indian progress is very much dependent on commies getting out of power whether direct or indirect. these are real traitors.

 

[Bushroda]

The Next Frontier for India's Outsourcing Industry? The Domestic Market
Published: June 12, 2008 in India
Knowledge@Wharton

Earlier this year, Genpact, the largest business process outsourcing (BPO) player in India, gave Harpreet Duggal a new role: responsibility for developing and executing the company's domestic BPO strategy. Duggal is already well into discussions with potential customers, and is finalizing operating locations. He's moving fast because Genpact isn't the only Indian company interested in this space. For many reasons, the domestic BPO market is one that no one can afford to ignore anymore.

Duggal primarily is targeting two sets of potential customers: existing global customers who are looking to increase their presence in India and require the same systems and processes they have elsewhere; and Indian companies with global aspirations, both by way of moving beyond Indian boundaries and by providing a global experience in the Indian market. These require world-class processes and systems. Says an upbeat Duggal: "We believe that India is a very exciting market to be in."

Having been on the periphery, the domestic BPO business is steadily moving onto everyone's radar. Companies including IBM Daksh, Firstsource Solutions, MphasiS BPO and Intelenet Global Services are looking to significantly increase their presence. Others, such as Wipro BPO and Infosys BPO, are waiting for the right time to enter the space as part of a total outsourcing solution along with their IT arms. And, firms such as 24/7 Customer have no immediate plans to enter but are watching the space keenly.

What has brought about this growing interest in India's BPO market? Industry players and analysts cite multiple factors. These include reduced costs of connectivity, the scorching pace of the Indian economy, the phenomenal growth of companies in sectors including telecommunications and financial services, rising customer expectations, Indian firms' global aspirations, and global firms entering the Indian market. The changing rupee-dollar equation and the slowdown in the U.S. economy, which is forcing players to look at other markets, have added to the momentum.

Wharton management professor Saikat Chaudhuri says the factors driving that trend are the "tremendous growth" of India's domestic markets, the slowdown in Western markets, and the dollar's weakness against the rupee. He notes that a whole new class of medium-sized companies outside of the well-established and large industrial houses like those of Tata, Birla, Ambani or Goenka is looking at farming out noncore activities to increase efficiencies and focus on core competencies. "These companies are becoming customers of Oracle, Cisco, SAP and so forth," says Chaudhuri.

According to Ravi Bapna, assistant professor at the Indian School of Business, "It's now become profitable to address this market and the industry is set to take off."

A glance at the Indian BPO industry's growth helps put the dynamics of the domestic market in perspective. At a compound annual growth rate of around 37% over the last few years, BPO exports have been the fastest-growing segment of the Indian IT-BPO sector. They have grown from $3.1 billion in fiscal 2004 to $11 billion in 2008 and currently account for 37% of the global business process offshoring pie. They sustain an employee pool of more than 700,000.

Players have tried over the years to add quality and efficiency to their original labor arbitrage sales pitch. They have been moving from low-end, non-core activities to more complex processes. Now, in a move further up the value chain, they are looking at becoming transformational partners to their clients, making an impact on business metrics.

A recent study by the National Association of Software and Services Companies of India (Nasscom) and the Everest Group estimates that in a "business as usual" mode, India's BPO exports will grow to $28 billion to $30 billion over the next four to five years. With proactive measures, the report says, they have the potential to reach $50 billion by 2012, with a maximum addressable opportunity of $220 billion to $280 billion.

Traditionally, Indian BPO vendors have relied largely on English-speaking geographies as their markets. North America and the United Kingdom together account for about 87% of their export revenues. North America, primarily the United States, accounts for roughly two-thirds of the market alone. While this dependence on the U.S. market is expected to continue, players have been expanding their footprints in other markets, notably continental Europe and the Asia-Pacific region. With the slowdown in the U.S. economy, rupee-dollar fluctuations, and growth in other markets, this move to tap other geographies not only acts as a natural hedge against currency fluctuations, it's simply a good business strategy.

India's Growth Beckons

That's where the Indian market comes into play. India's economy is growing too fast for any industry not to want to share in its growth. From less than $100 million in 2002, BPO demand in the domestic market grew to $1.1 billion in 2007. In the last year, it is estimated to have grown to between $1.6 billion and $1.8 billion. The Nasscom-Everest study estimates the potential addressable market at around $15 billion to $20 billion over the next five years. Realizing even half of this potential would be significant.

In many ways it would change the nature of the industry. As it stands, close to 80% of the industry comprises captive shared service centers. The rest of the industry is highly fragmented. Estimates suggest that 400 to 500 firms constitute the unorganized sector. As the industry gains in size and stature, a fair bit of consolidation is expected. Third-party service providers, many whose revenues are growing around 100% a year, are expected to increase their market share significantly.

Telecommunications and financial services have been key verticals spurring domestic demand, followed by consumer goods and airlines. Going forward, government, travel and hospitality, retail, and media and entertainment are expected to attract significant demand for BPO services in India.

Ravi Aron, senior fellow at Wharton's Mack Center for Technological Innovation and an expert on outsourcing trends, points out how BPO firms in India will find the domestic market more challenging than those in developed countries. For starters, he says Indian companies in several services industries including those in the BFSI (banking and financial services industry) segments are wholly owned by the government. BFSI companies have tended to be the biggest opportunity for outsourcing services providers in Western markets, he adds.

"Although these companies present the right opportunity for BPO firms, state-owned banks and insurance companies like the State Bank of India and General Insurance Corp. of India are going to be very slow to start outsourcing on a large scale," says Aron. "That is because of the extraordinary pressure they will face from their unions, who don't want their jobs to go to the private sector."

The second challenge BPO firms will face in India stems from the fact that any company's decision to outsource its needs is "heavily embedded in its technological architecture," says Aron. "Indian services companies in either the public or the private sector are heavily underinvested in technology on a per-capita and per-sale basis compared to those in the U.S. and Europe. Indian services companies are far more labor intensive, and don't have the technology platforms that will facilitate outsourcing, excluding [financial services companies like] an ICICI or HDFC."

Aron talks of the "3 Ps" of information architecture -- platforms, processes and people -- "where Indian companies are not streamlined." He says internal processes at most Indian services companies are "idiosyncratic" and not standardized as in large retail companies like Wal-Mart or U.S. health care companies.

Gaurav Gupta, country head of the Everest Group, points out that with the phenomenal growth in these industries, the name of the game for most companies is to gain market share and grow the top line. The competitive landscape is straining companies' operational models. So companies in these industries are turning to vendors who can help them overcome some of the challenges associated with fast growth, like managing huge volumes and providing a large network that can reach out to different corners of the country rapidly. Says Gupta: "The present systems and processes are nowhere near adequate, either by way of scale or expertise, to sustain the kind of growth that companies are seeing in India. These require tremendous ramping up. Otherwise they will become severe bottlenecks." Adds Susir Kumar, chief executive officer of Intelenet Global: "At this stage of growth, companies would rather use their capital in building their brands, acquiring customers, and focusing on their core competencies and outsource whatever is possible."

'Productivity Arbitrage'

Aron agrees that big opportunities lurk behind those shortcomings at Indian services companies. BPO firms could help standardize and automate processes at Indian companies and achieve "extraordinary productivity gains of up to 35% over 18 to 24 months," he adds. "That is why doing BPO in India for Indian companies makes a lot of sense. Instead of wage arbitrage, start thinking about productivity arbitrage."

Even as companies busily increase their customer base they realize that, with the Indian economy becoming more globally integrated, customers are ever more demanding. The "new" Indian customer is not satisfied with anything less than world-class levels of product and service quality. Take the Indian telecom industry. It is among the most complex in the world, with new products being introduced practically every day. It is becoming imperative for companies to get it right the first time. Customer service is seen as a key differentiator in the crowded marketplace. Customer service, in fact, accounts for two-thirds of revenue in the domestic BPO market, followed by finance and accounting and human resource outsourcing. As Nasscom vice president Rajdeep Sahrawat says: "There is very little to differentiate companies from the product point of view and therefore offering very high quality, personalized, 24/7 customer service is critical. This requires scale, flexibility and expertise."

Bharti Airtel, India's largest mobile services provider, is an often-cited example. Bharti was one of the first and biggest Indian companies to outsource on a large scale. In August 2005, the company signed a mega deal with four global BPO companies -- IBM Daksh, MphasiS, TeleTech and Hinduja TMT -- to outsource its call centers. Bharti had already outsourced its IT and cellular networking requirements to IBM and Ericsson, respectively. These strategic moves allowed Bharti to focus on its core areas of product innovation, marketing and brand building. Bharti has a mobile subscriber base of around 60 million and is adding around 2 million subscribers a month. It is a beacon for others targeting high growth. Says Ramesh Gudalur, president of MphasiS BPO: "Companies like Bharti who look at outsourcing as an integral part of their business strategy are completely changing the way Indian companies have traditionally run their businesses. This is putting pressure on others, both in their own industries and in other sectors, to follow suit."

Opportunities await BPO firms also in providing specialized services to newly emerging industries like retail, fashion apparel or automobile components, such as customer relationship management (CRM), market research, accounting, and inventory and supply chain management, says Aron. "Many of these specialized services companies have the money, but not the managerial capacity or bandwidth to automate their processes and extract efficiencies," he adds. He sees a new trend emerging in the next two to three years of "platform-based BPO" that provide niche services in areas like credit card fulfillment, mortgage loan processing and loan refinancing, and property & casualty insurance.

Delivering Value

Increased capability in the supplier community is also encouraging Indian companies to move toward outsourcing. Having grown via the export market, many large suppliers have developed end-to-end capabilities that are large enough to attract the domestic players looking at huge volume growth. More important, the suppliers now have the capability to deliver value by way of technology platforms or process expertise that goes well beyond just cost.

This doesn't mean that the cost advantage that Indian companies enjoy by outsourcing their business processes is insignificant. Cost, as Sandeep Soni, chief executive officer of Spanco BPO, points out, remains an important driver by sheer virtue of the economies of scale that a vendor brings in. However, it is unlike the export market, where labor arbitrage was the key factor in the industry's early days and continues even today to play a dominant role.

Chaudhuri argues that BPO services companies could still play the wage arbitrage card to a significant extent in India's domestic markets, but differently. "That is because there are many inefficiently run companies in India, and the BPO companies have not just the expertise but also the scale to perform functions across the board at a much lower price," he says. "While the wage arbitrage in India's domestic markets may not be as attractive as it is in the west, certainly the volume of activity can make up for it."

Sabyasachi Satyaprasad, senior director at advisory firm NeoIT, says the absence of a strong labor arbitrage in the domestic market will in fact compel vendors to offer a higher-value proposition, such as solving business problems for their domestic clients. This, he says, could well result in the domestic BPO industry leapfrogging some of the growth stages that vendors had to go through in the global market. Industry players agree. Says Pavan Vaish, chief executive officer of IBM Daksh: "When one is operating in a market where there is no arbitrage benefit, you have to innovate and add value to the customer. When we started out in 2005 we had thought that our international business would give us a lot of insights into our India business. But what we are finding is that it is our India business where a number of amazing innovations are happening."

BPO companies that have concentrated on serving Western markets may not feel the need to reorient themselves as they look to serve domestic Indian companies, says Chaudhuri. While these BPO companies developed their "global delivery model" for Fortune 500 companies, he notes, many of them were "born and bred" in India, including Wipro Spectramind and Genpact's predecessor company. "The outsourcing model has been designed keeping Indian constraints in mind from the very beginning, which allows for very healthy margins when they deal with foreign clients."

The only significant difference BPO companies will encounter In India's domestic market is the need to offer simplified services, according to Chaudhuri. "The BPO companies targeting the Indian market are not going to sell $300 million or $1 billion contracts for five years," he says. "They will have a lot more projects that are in the $1 million, $5 million and $10 million range. They are well-positioned for that because they started small themselves." He says these BPO companies could also replicate the dedicated units they set up with some clients.

This presents its own challenges. While their global education is valuable, vendors must create a proposition that is relevant to their domestic clients' immediate needs. According to Sanjeev Sinha, senior vice president of operations at Firstsource Solutions: "In many cases the India market has requirements that are rather different from the global markets, so vendors need to adapt and customize the solutions to the local situation. A cut and paste of the global solution will not work."

Vendors also need to think ahead of the curve regarding their very business models. With India, an extremely price-sensitive market, pricing models need to be innovative. Vendors must build capabilities that allow them to adapt to the changing expectations of a fast-growing and competitive marketplace. As Anirudha Prabhakaran, chief operating officer of 3i Infotech, points out: "This is a market which not only negotiates very hard on the efficiency front but also constantly raises new demands."

One potential obstacle Aron sees is a "huge divide" that exists between managerial personnel and the clerical staff at Indian companies in the ability to efficiently use technology in processes. While Indian managers are able to use technology to access data, analyze it and create reports, for instance, clerical workers tend not to use computing capabilities to their fullest extent, he notes. "You don't see that sharp divide in the U.S.," says Aron.

Variation in Margins

There are other challenges, too. India, as it is well-known, is not a homogenous market. It has myriad regional languages, varied cultures and remote corners. For players who are looking at scale and who have national ambitions in the domestic BPO market, this means managing a range of complexities. Also, for the economics to be viable, players will have to move from larger cities and set up operations in Tier 2 and Tier 3 locations. It is true that the domestic market does not require that BPO agents be trained by way of voice, accent and culture; therefore it is less expensive and easier for service providers to move into the smaller cities. But the challenges posed by infrastructure and the availability of senior management must still be dealt with.

The biggest challenge, however, could be around profitability. Although the costs by way of infrastructure, wages and training are lower for the domestic market, so is the pricing. Pricing in the India BPO market is estimated to be anywhere between 30% and 60% less than in its global counterpart, though more experienced players insist that their domestic BPO margins are comparable to their global business or only marginally lower. With the outsourcing market in India still not mature, the readiness to pay for world-class services remains a challenge. But as Duggal of Genpact points out: "Even in the global markets the variation in margins is phenomenal." It all depends on how effectively vendors are able to deliver by way of cost structure, people management and value creation.

Chaudhuri says BPO companies focused on India's domestic market could continue to enjoy cost advantages because many of them are extending operations outside of the big cities to cheaper, second-tier cities. They could also use their Indian base to supply markets in other developing countries, he adds. "It's like the Tata Nano [the Tata group's newly launched small car], where the first foreign markets are in Africa, Southeast Asia and European countries that have road density problems, and some parts of Latin America," he says.

Chaudhuri sees other, longer term gains for BPO companies in all this. As service providers to India's new class of business houses that are expanding globally, they "could follow their clients to foreign markets," says Chaudhuri. "The Japanese banks followed the Japanese conglomerates, and U.S. telecommunications companies like Verizon did the same thing, following their financial services clients overseas."

 

[Bushroda]

But this will continue for how much time. The bloody commies heave already been successful (till now) in holding the nuke deal. The Indian progress is very much dependent on commies getting out of power whether direct or indirect. these are real traitors.

I share your sentiments but, more than commies you need to worry about rising cost of oil. Commies cannot impede India's growth. Neither is nuke deal undone. The agreement has been signed & it is merely the question of making it operational. In the meanwhile we can continue our negotiations with IAEA. Commies themselves are divided over several issues. The only man holding the fort against the nuke deal is Prakash Karat & most likely he would be sidelined in the future politics. Already Buddhadeb has come out against him.

 

[Bushroda]

Is India 'banking' for a green future?
Loughborough News, UK
Posted on June 13, 2008, 2:30 pm

Research in the Department of Geography at the University of Leicester is investigating the reasons why Indian banks have yet to commit to the Equator Principles; a set of environmental and social guidelines to which 62 banks and financial institutions worldwide have become signatories.

As part of her doctoral studies, Sophie Hadfield-Hill conducted forty interviews with CEOs and senior management of Indian banks and leading companies to explore the extent to which India’s corporate sector is following the ‘green’ agenda.

Sophie said: ‘There is certainly a lack of awareness of the Equator Principles in India. Leading banks are vaguely conscious of the guidelines, however, the public sector is waiting to be led by the Reserve Bank of India and the private sector banks seem to only want to commit if there is regulation or financial incentive.’ Current signatories such as Barclays and HSBC committed to the guidelines on a voluntary basis..

Sophie said: Indian banks are yet to declare their commitment to environmentally and socially responsible business, due to lack of interest from the Indian consumer.

Work needs to be done to make the guidelines more relevant to emerging economies. Firstly, however, Indian banks need to be made fully aware of the environmental and social guidelines to which banks worldwide are agreeing to.

‘As a researcher who has now interviewed the senior management of the majority of India’s leading banks, I feel I have helped to raise awareness of environmental and social issues among the Indian banking sector.’

If Indian banks do not become signatories, this will result in huge financial burden for banks committing to environmental and social guidelines. However, as Sophie added: ‘If Indian banks are to penetrate western markets and participate more in the global economy, it is important that they recognise their responsibilities as global corporate citizens.’

Sophie concluded: ‘Banks in India have significant influence over the safeguarding of fragile social groups and environments in Asia. At this time they must seriously consider their attitudes towards responsible lending both nationally and globally.’

Sophie Hadfield-Hill is currently a PhD student at the University of Leicester, conducting research into the ‘greening’ of leading companies and financial institutions in India. Her research stems from an interest into issues of environmental and social justice and the role that corporates can play in sustainable development.

The research is being presented to the public at the University of Leicester on Thursday 26th June. The Festival of Postgraduate Research introduces employers and the public to the next generation of innovators and cutting-edge researchers, and gives postgraduate researchers the opportunity to explain the real world implications of their research to a wide ranging audience.

 

[Mohammed Azizuddin]

'India created more jobs in US than US did here'

Taking on critics of outsourcing to India and the alleged loss of American jobs in the process, India's Minister of Commerce and Industry Kamal Nath asserted that Indian investments in the United States in the last two years had created more jobs in the US that American investment in India has.

In an interactive session with PBS television's talk show host Charlie Rose at the 33rd anniversary summit of the US-India Business Council, Nath said, "Indian investment in the United States in the last two years is more than the US investment in India in the last two years, and India has created more jobs in the US than the US has created in India."

"Now, the Democrats must hear this," he said, to which Rose quipped and asked if it were a campaign statement.

Nath said that "trade and investment is now a two-way street," and pointed out that American exports to India "went up by over 70 per cent last year. That's not a small thing."

"Why are they going up? Because India is a healthy economy and that's what I keep saying not only to the US, but to all developed countries," he said. "That you must ensure that there are healthy economies in developing countries and it's a great market for developed countries."

Nath said that the US needs to understand this "because healthy economies in developing countries mean greater markets. It's no use being a country of one billion people if you have no ability to buy anything."

Asked if India's remarkable growth rate would continue, Nath said there was no doubt about it and added, "We projected that we would be getting close to 10 per cent growth, but global economic outlook being what it is, we revised it downward to 8.5 per cent. Now, that itself is good."

Nath said this confidence and optimism were borne out of a notion that because of the "strong fundamentals," the Indian economy has "built up a momentum of its own and we are confident this momentum will continue whatever be the global economic outlook."

However, he acknowledged that the 3 F's -- fuel, food and finance -- were certainly cause for concern not just for India but for the whole world, and recalled that "they weren't there when I came to the USIBC last year."

Nath also said the sub-prime loan crisis that has devastated the US housing market and led to unprecedented foreclosures in the country and plunged the country into what many economists say is indeed a recession with worldwide implications, would not impact on India.

"We are quite decoupled from it," he said. "There has been no exposure by the Indian financial system to the sub-prime crisis, but of course if there is slowdown in the US, it does affect us."

But Nath said that "more important is the sentiment and that's what we need to guard against -- this sentiment of gloom. The sentiment of gloom is worse than the gloom itself, and that's what drives markets -- this sentiment and this frenzy that goes around. (But) It's not there in India."

He argued that the impact of this crisis is minimal "because our growth is not export-market driven -- it's domestic market driven. So, that keeps us in a little bit of a less vulnerable position," unlike other Asian countries whose economies are largely export-driven.

Nath also took exception to the allegations that India was responsible with its export ban for the worldwide shortage of rice, saying that "we banned the exports of only the cheap quality rice. If you want to buy rice from India, buy the good quality one. Why do you want to buy the cheap quality one."

He said, "Keep the cheap quality one for our 300 million people who earn less than $1 a day."

Nath also said the criticism that India was attempting to kill the Doha Round of global trade negotiations was "unfair and inaccurate."

He said that "India needs as much as the US, a rule-based multilateral trading system. So, for us, the Doha Round is as important as it is for the US."

But Nath asserted that "this round really needs to respect sensitivities. The United States has sensitivities on subsidies. Some countries have sensitivities on bananas. There is huge issue on coconuts. There are whole issues on tropical fruits. There are whole issues on subsistence. This round will close with each other respecting sensitivities. We need to harmonize these sensitivities."

"We are not going to get everything," he acknowledged. "No country is going to get everything, but no country is going to give away everything."

Nath said, "I don't criticize the US, I enlighten them. But we have moved forward since we were two years ago, where we were two months ago, and we continue to move forward."

The final question by Rose to the articulate and humorous Nath was that it used to be said that "every Senator in Washington used to look in the mirror in the morning and see a future president. When you look in the mirror in the morning do you see a future prime minister?"

The 600 plus audience cracked up and engaged in sustained applause, when Nath replied: "Well, I see myself. And, there's nothing better than seeing yourself."

Source:'India created more jobs in US than US did here'

 

[Bushroda]

Cause and effects of film-making in India
Rhys Blakely in Bombay
The Times, UK
May 24, 2008

It is perhaps the ultimate special effects trick. Arrive at the Indian headquarters of Rhythm & Hues (R&H), the Los Angeles-based effects studio, and you could be mistaken for thinking that you were visiting a village in rural India.

The thatched huts, however, are stylised cubicles that house the computer workstations at which R&H's staff weave their visual magic. Many of the Oscar-winning special effects for The Golden Compass, the Hollywood blockbuster that took $370 million (£187 million) at the box office last year, were put together in this thatched village.

As in other effects studios around the world, the labour is painstaking. Each employee will produce the equivalent of five seconds of screen time in a month. The results, though, are usually worth the wait. Babe, the film about a talking pig that won an Academy Award and earned more than $250 million at the box office in 1995, was an R&H creation. Alvin and the Chipmunks, the recent surprise hit for which R&H created the eponymous rodents, has grossed $360 million - not bad for a film with a $60 million production budget.

For the past six years, part of R&H's work on such projects has been completed in these Bombay offices, the design of which Prashant Babu Buyyala, the facility's managing director, seems especially proud. “We wanted something creative yet functional,” he says of the faux village look. “Importantly, we didn't want to spend a lot of money.”

The same principles are directing Hollywood's passage to India. Post-production movie work - everything from complex digital effects (such as the shape-shifting animal daemons of The Golden Compass) to basic colour grading (making sure that shades stay consistent throughout a film) - is migrating from traditional centres such as LA to low-cost locations on the sub-continent.

Nasscom, the Indian IT lobby group, estimates that the global animation market will be worth about $80 billion by 2010, and it is targeting it as a prime source of future outsourcing revenues as more film work is shifted to India.

With emotions already running high over the loss of American jobs in an economic downturn, Mr Buyyala is adamant that Rhythm & Hues is not running a cost-cutting operation in India. The Bombay office handles work as complex as that done in the United States, he says. Moreover, despite India's size, a lack of art schools has translated into a relative dearth of talent. “I keep on having to tell people: This country just isn't that cheap any more.'”

Yet it is hard to believe that cost has no bearing. Starting salaries in R&H's Bombay offices are as low as 40,000 rupees (£480) a month. Pay packets rise quickly and the highest earners in Bombay pull in similar sums to their American counterparts, Mr Buyyala says, but still the early discounts offered by young Indian animators are upsetting their peers in the US.

Merzin Tavaria, of Prime Focus, an Indian post-production company that recently has acquired businesses in Los Angeles and London, is more upfront: “You can't get away from the fact that we are cheaper than the West.”

The comments echo a recent report by Ernst & Young, which said that “the global animation industry is offering a major chunk of business in animation to India to cut costs and increase profits”.

Simon Huhtala, who runs Prime Focus's operations in London, confirms that movie producers are looking to squeeze the pips out of post-production players. Cost and speed are paramount; scale and rationalisation are the industry's driving forces.

There is another compelling reason to enter India: the country's potential as a market. Mr Tavaria is working on Love Story 2050. The film's producers are billing it as Bollywood's first true special effects-driven science fiction film.

The biggest film released in 2007 was the mythological sequel Hanuman Returns. For R&H, already a specialist in making millions from anthropomorphisation, the possibilities are similarly mind-boggling if the world's biggest film industry does succumb to the charms of talking animals.

 

[Bushroda]

Don't run away from the Indian tiger
By Mark Dampier
Independent, UK
Saturday, 14 June 2008

India is the second-largest country in the world in terms of population (behind only China) and the seventh-largest in terms of land mass. It has 36 cities with populations of more than a million people in each, and is forecast to be the most populous country in the world by 2050.

It is becoming increasingly wealthy and has the largest English-speaking population in the world with a huge educated middle class. It is clearly a massive investment opportunity, so you might wonder why there are hardly any Indian funds available.

But this is gradually being addressed, and one new launch is the New Star Indian Equity Fund. New Star has taken a slightly unusual route by in effect sub-contracting the management of the fund to Tata Asset Management. Tata is a huge Indian conglomerate – many of you will know it from its purchases of Corus (formerly British Steel) and more recently Jaguar and Land Rover. It has operations in 54 countries across six continents, and accounts for an amazing 3 per cent of the entire Indian economy and 5 per cent of its exports. As you might imagine from these statistics, Tata is the largest private employer in India.

The investment division, Tata Asset Management, is one of the fastest-growing investment houses in India, currently running approximately $7bn (£3.6bn) for more than two million investors. The division already manages a number of funds for Indian nationals with, I must say, very impressive track records.

The managers believe they have an investment edge through the sheer depth of research they do within the Indian market. They look to exploit opportunities created by a fast-growing economy without losing sight of stock valuations. This discipline is important, because it is easy to get carried away in such situations, to overpay drastically and then suffer a big disappointment.

Tata's 18-strong investment team sift through some 4,000 stocks on the Indian market and bring this list down to a manageable universe of about 400 companies. From this, a focused portfolio of 35 to 40 shares will be selected. They tend to invest in larger companies (that is, those valued above $1bn). The New Star fund will be about 75 per cent-invested in this area.

When I visited Tata's offices in Mumbai, I was struck by the team's extremely high standards of professionalism and ethics. In my opinion, they would put most Western companies to shame. Risk management is high on the agenda, but this will not be a closet indexer of the Indian stock market; Tata will take calculated risks in an effort to outperform the market.

Without doubt, India has huge potential. It has a superb demographic profile – a large part of the population are young people – which over the long term means that it could be even more successful than China. However, there are problems – and infrastructure and power supplies are two very obvious ones.

Remarkably for such a large country, India should be self-sufficient in food. However, poor infrastructure means that 25 per cent of foodstuffs rot before they get to their final destination. A massive road-building programme is under way across the nation, with about 7,300 kilometres under construction and due for completion in the next year. Furthermore, power generation capacity needs to be increased – India is producing 9 per cent less electricity than current demand, and 78 million homes don't have electricity.

Finally, inflation is rearing its ugly head. Fortunately, the Reserve Bank of India has been far more proactive than most emerging-market banks and has raised interest rates in response. However, inflation could still present a significant risk in future.

It is vital that investors remember that India is neither a one-way bet, nor a short-term one. Volatility should be expected, and at times it will be extreme, but true long-term investors with cash to spare should probably view sharp falls as an opportunity to top up their investment. India also makes a good area for regular savings as, during periods when the market is low, you can gradually pick up units at a lower price.

In my opinion, New Star has scored an impressive coup by getting Tata to manage this fund. Not many people in the world have much experience of investing in the Indian stock market, but Tata are the kind of group you'd back to succeed. It is imperative that an Indian investment be held with at least a 10-year time horizon – short-term traders should beware.

The New Star Indian Equity Fund is currently in an offer period; you can buy it for a fixed price of 500p per unit until 27 June.

Mark Dampier is the head of research at Hargreaves Lansdown, the asset manager, financial adviser and stockbroker. For more information about the funds included in this column, visit Mark Dampier | Get Mark's latest fund and sector analysis.

 

[Bushroda]

Country at a crossroads
Heather Connon
Money Observer, UK
13.06.08

Ved Chaturvedi, managing director of India's Tata Asset Management, likes to take visitors to Mumbai before showing them other areas of the country. That way, they can see the contrast between what he describes as a "decaying city" and the vibrant development occurring elsewhere.

Mumbai certainly has plenty of the hallmarks of old India: roads so congested it can take more than three hours to get from the airport to the city centre 30km away and endless shanty towns lining the route or propped up against the grand office buildings.

Travel 170km west to the business centre of Pune and you see a different India. The new expressway, which joined the two cities in 2002, continues through a rash of housing developments, business parks and shopping centres that have sprung up around the historic town. The contrast neatly encapsulates what has been happening across India in the past decade or so. The country is gradually shaking off a long history of heavy state control and emerging as one of the most vibrant economies in the region. It has been one of the fastest-growing Asian economies - of these economies last year's near 9% growth was beaten only by China, while in all but three years in the past decade it has exceeded 4%.

India's stockmarket, too, has been booming. In 2007, it topped the regional tables and was close to the top globally. Over the past five years, the Bombay Stock Exchange's Sensex index has risen more than five-fold.

Global fallout

Some of that euphoria has evaporated recently, with the index plunging 23% in the first three months of 2008. There has been a small recovery in the meantime, but the index remains well below its peak. This reflects a growing concern that Asian countries will not be able to escape the fallout from the global credit crisis or the US recession that seems destined to follow it.

Last year, 'decoupling' was the buzzword, as investors hoped that the lack of debt among the region's banks and consumers - together with its decreasing reliance on trade with the US and Europe and increasing trade within the region - would allow growth to continue. Now the consensus is that growth will be hit, although few expect the impact to be severe.

"We Indians are far more thrifty than the Americans," says Ishaat Hussain, finance director of Tata Sons, part of one of India's largest conglomerates, whose interests stretch from ownership of our own Tetley tea and Corus Steel to Indian department stores and technology services companies. He thinks the ripples from any global economic downturn may cut 0.5% from India's growth rate, but with most experts still predicting at least 8% growth over the next few years, that hardly amounts to a slowdown.

This resilience reflects the fact that, as with China and other Asian economies, India's growth story is a domestic one. Its population of more than 1.1 billion is second only to China, but unlike the Chinese, Indians are relatively well educated - although more than a quarter of the population is still illiterate.

India also produces almost 500,000 engineering graduates a year and has far more fluent English speakers than China. That has made it the outsourcing capital of the world, but it is now attracting foreign investment in other industries. Most of the big motor manufacturers, for example, have plants in the country.

That, in turn, is increasing the wealth of the population generally, particularly among the middle classes, who are so vital to driving up consumption. While there are still more than 110 million households that survive on less than 90,000 rupees (£1,100) a year, the number of what Bhupinder Sethi, a senior fund manager at Tata Asset Management, calls the "consuming class" (with an income of between 500,000 and one million rupees a year) will have risen from 3.9 million in 1998 to an estimated 22.2 million in 2009-10.

Class action

"Never before across the world have so many people joined the middle class," says Sethi, remarking on the contrast with the ageing, shrinking populations in the West. "Ten years ago, the US was the world's growth engine and had its strongest currency. Now, it is the emerging economies and their currencies are strengthening against the dollar."

This increasingly affluent army is splashing out on phones, televisions, cars and all the other trappings of consumerism, helping to keep India's economy growing as the rest of the world declines. Exports account for only 13% of the Indian economy, so even a dramatic fall in external demand should not have that big an impact.

That low level of exports may reflect one of the country's biggest problems: its infrastructure. While the Mumbai to Pune expressway may be as good as any British motorway, there are too few roads like it in India. Analysts at CLSA estimate the country has just 200km of expressways compared with China's 40,000km, while its power systems are also overloaded - power cuts are a common occurrence in New Delhi - and water systems are inadequate.

The government is committed to remedying that: its latest spending plan envisages almost $500 billion (£256 billion) of investment, including $150 billion on power and $76 billion on roads. Previous plans have not been fully carried out because of lack of government funds, although Sherene Ban, Asia client portfolio manager at JPMorgan, says it is now seeking private sector investment to help fund major schemes.

Tata's infrastructure companies are involved in power and road building projects, for example, while other private sector companies are helping finance the airport modernisation programme taking place at Mumbai and in the recently upgraded Hyderabad. India is also setting up special economic zones in conjunction with private sector companies such as Reliance, one of the country's largest conglomerates.

Key driver

Improving the infrastructure is key to driving India's economy, says Ban. She points out that more than 200 million people in China are employed in manufacturing; the support services industry in India employs just five million. That partly reflects the fact that it takes an estimated three days to get goods from factory to port in China; in India, it takes 15. China's investment in infrastructure is one of the key factors in accelerating its growth and Sethi thinks India's infrastructure programme may help it emulate its bigger neighbour.

But, as the stockmarket's wobbles illustrate, there are also short-term concerns. Already the global credit crisis is affecting information technology services businesses, while food price inflation is causing unrest among India's population, as it is around the world. The government is doing what it can to counteract the effects by, for example, banning exports of non-basmati rice and cooking oil. It is hampered by the fact that, like China, it is a net importer of commodities and therefore has little choice but to pay the higher prices. That has pushed inflation up to 7.3%, the highest level in three years, forcing the Reserve Bank of India to introduce some fiscal tightening to counteract that.

"That is significant as the India story is driven by increasing consumption," says Ban. "If that decreases consumption, it could have a significant impact on the economy and the market."

The Indian stockmarket is unusually diverse. Brazil and Russia are dominated by commodities and have fewer than 500 companies, and just 150 between them worth more than $1 billion. India has almost 5,000 companies, including 129 worth more than $1 billion. That diversity, coupled with their reliance on the domestic market, should make the economy more resilient to a downturn.

 

[Bushroda]

The joint rise of China and India could benefit everyone
By Joseph S. Nye
Daily Star - Lebanon, Lebanon
Saturday, June 14, 2008

George W. Bush is approaching the end of his presidency mired in low popularity ratings, which partly reflects his policies in the Middle East. But Bush leaves behind a better legacy in Asia. American relations with Japan and China remain strong, and he has greatly enhanced the United States' ties with India, the world's second most populous country.

In 2005, Secretary of State Condoleezza Rice prepared a visit to New Delhi by Bush the following year in which he announced a major agreement on US-Indian civilian nuclear cooperation, as well as a variety of measures for commercial and defense cooperation.

The nuclear cooperation agreement was criticized in the US Congress for not being strict enough on non-proliferation issues, but it looked likely to pass. In India, the Communist Party, a small (but important) member of Prime Minister Manmohan Singh's ruling coalition, has blocked the agreement. But, as one Indian friend explained to me, this is mainly symbolic politics for India's left.

Even if the nuclear agreement fails, the improvement in US-India relations is likely to continue. Some attribute this to the fact that India and the US are the world's two largest democracies. But that was true for much of the Cold War, when they frequently talked past each other.

More importantly, with the end of the Cold War, the Soviet Union was no longer available as an Indian ally, and the US began to assess India and Pakistan in terms of separate interests, rather than as a pair linked in a South Asia balance of power. As Evan Feigenbaum, the top State Department official for South Asia recently said: "[T]he world of 2008 is not the world of 1948. And so India really has the capacity, and, we think, the interest, to work with the United States and other partners on a variety of issues of global and regional scope." This change began under the Clinton administration and is likely to continue regardless of who is elected president in 2008.

Personal contacts between Indians and Americans have increased greatly. There are more than 80,000 Indian students studying in the US. The Indian diaspora in the US constitutes roughly 3 million people, many of whom actively participate in politics. In addition, India's economy has begun to grow by 8 percent annually, making it more attractive for foreign investment. Trade between India and America reached $26 billion in 2006.

In addition to these practical reasons for the improvement in bilateral relations, the rise of China poses a strategic consideration. As Bill Emmott, the former editor of The Economist, argues in "The Rivals", his new book: "[W]here [former US President Richard] Nixon had used China to balance the Soviet Union, Bush was using India to balance China. Like Nixon's move, with hindsight Bush's approach to India made perfect sense." And the concern is reciprocated on the Indian side. As a senior Foreign Ministry official told Emmott in 2007, "the thing you have to understand is that both of us [India and China] think that the future belongs to us. We can't both be right."

Official pronouncements stress friendly relations between India and China, and some trade analysts argue that, given their rapid growth, the two giant markets will become an economic "Chindia." When Chinese Premier Wen Jiabao visited India in 2005, he signed 11 agreements, including a comprehensive five-year strategic cooperation pact. In addition, Wen announced that China would support India's inclusion as a permanent member of an expanded United Nations Security Council, and oppose Japan's inclusion, which the US supports. As Singh put it during Wen's visit, "India and China can together reshape the world order."

The two countries' recent rapprochement marks a considerable change from the hostility that bedeviled their relations following their 1962 war over a disputed border in the Himalayas. Nevertheless, strategic anxiety lurks below the surface, particularly in India. China's GDP is three times that of India, its growth rate is higher, and its defense budget increased by nearly 18 percent last year. The border dispute remains unsettled, and both countries vie for influence in neighboring states such as Myanmar.

China's rise has also created anxiety in Japan, again despite professions of good relations during Chinese President Hu Jintao's recent visit to Tokyo. Thus, Japan has increased its aid and trade with India. Last year, the US suggested quadrilateral defense exercises including American, Japanese, Indian, and Australian naval units, but the newly elected Australian Prime Minister Kevin Rudd has pulled his country out of such arrangements.

Rudd wisely believes that the right response to China's rise is to incorporate it into international institutional arrangements. Or, as Robert Zoellick, currently the president of the World Bank, put it when he was a State Department official, the US should invite China to become a "responsible stakeholder" in the international system.

Improved relations between India and the US can structure the international situation in a manner that encourages such an evolution in Chinese policy, whereas trying to isolate China would be a mistake. Handled properly, the simultaneous rise of China and India could be good for all countries.

Joseph S. Nye is a professor at Harvard and author, most recently, of "The Powers to Lead." THE DAILY STAR publishes this commentary in collaboration with Project Syndicate

 

[Bushroda]

Who Will Ride India's Next Wave?
Media and entertainment, private education, infrastructure, and renewable energy companies are poised to prosper as India's middle class expands
by William Nobrega
Businessweek
June 13, 2008

Welcome to the "Next Wave." We are living in an unprecedented point in human history when the new consumer, technology, infrastructure, and environments begin to converge and create one of the world's greatest eras of economic growth and technological innovation.

During the next 20 years, the Next Wave will create more new consumers than the previous millennium did. Investments in infrastructure will exceed the total investments in the reconstruction of post-war Europe. Technology and the Internet will be the great enabler, facilitating the development of multiple centers of innovation across a wide range of geographies. And the environment will be a critical thread within this new tapestry, as climate change and the need for resources push humankind to find new approaches to economic development and sustainable growth. Although China, Brazil, Russia, and other emerging markets will drive much of this, India stands at the forefront with its rapidly growing middle class, massive investments in infrastructure, a technology-based culture, and growing need for energy and other natural resources.

Many companies will benefit from the Next Wave, but some verticals will capture the lion's share of the growth and profits. Among the most significant of these "Next-Wave Verticals" are media and entertainment groups. They are gaining importance in India because of the country's growing middle class, improving literacy rates and increasingly organized retail sector driving demand for print, radio, and TV content. Improvements in infrastructure and advances in technology are also rapidly increasing media penetration in rural areas of the country where more than two-thirds of the population resides.

Tapping into the "Teenager Effect"

Advertising spending in India is roughly one-third of that in the U.S. and Europe, but that's rapidly changing as retailers find competition growing and consumers become more sophisticated and discerning in their buying decisions. There are now more Indian homes with television sets than homes with telephones. India's 119 million television households comprise about 60% of the total households in the country. About 50 million receive cable-television services, leading to a penetration of about 42%. The television-distribution market consists of revenues generated by companies that distribute television programming to viewers. This includes spending by consumers on subscriptions to basic and premium channels delivered by cable operators, satellite providers, or Internet protocol television (IPTV) services, as well as on video-on-demand (VOD).

The Indian DVD market now exceeds 1.5 billion units per year. This figure is expected to grow to 4.5 billion units per year by 2010. The explosive growth in DVD sales also is attributed to the predominance of single-TV households. However, this is expected to change as rising incomes and a large pool of teenagers fuel mushrooming growth of multiple-TV households, commonly known as the "Teenager Effect." These factors will continue to drive high revenue growth and profitability for such media and entertainment companies as TV18, ENIL, and D.B. Corp., which are leaders in this space.

Private education will also ride India's Next Wave as an aspiring population seeks to give its children and itself the greatest opportunity to succeed and prosper in the new economy. With the exception of the world-renowned Indian Institutes of Management & Technology, the Indian public school system has proved to be a dismal failure. As a result, Indian citizens of all socio-economic brackets have looked increasingly to the private sector for their education needs.

All Eyes on Manipal Education

As with other Next Wave Verticals, technology and infrastructure have fostered the rapid expansion of private education as Internet-based learning programs create opportunities for distance-learning, and improvements in communications and roads have created new education institutions in rural areas of the country.

Private education in India is growing more than 30% per year, and the profitability of this sector exceeds that of most North American institutions. Companies like Manipal Education are at the forefront of this growth as they continue to develop innovative solutions to meet the increased demand.

Environmental services is becoming one India's the fastest-growing Next Wave Verticals, as an increasingly industrialized economy and wealthy population elevates the need for clean air and water and the recycling of scarce natural resources. The Indian government is looking to the private sector to build and manage numerous aspects of environmental services to include waste-water treatment, hazardous waste disposal and air-quality control systems. Considering that approximately 70% of India's cities do not have adequate waste-water treatment, the financial opportunities in this area alone are significant. India's carbon-credit market is currently valued at $5 billion and is expected to double to $10 billion by 2009. This will create a significant opportunity for carbon-capture equipment and for environmental consulting services that focus on reducing greenhouse gases.

Renewable energy is a global issue that could define India's long-term economic success. India has very little in the way of crude oil reserves and finding new fields will become a costly proposition. As India's economy continues to grow, so will its energy needs. Developing renewable sources of energy is a national priority. Renewable energy only accounts for about 5% of India's total energy consumption. The Indian government has set a goal of generating 50% of the country's energy needs by 2050. This will require massive investments in a wide range of renewable energy sources.

Moser Baer Photovoltaic Planning an IPO

India is already developing technical and manufacturing leadership in several areas including wind, solar, and biomass. Suzlon Energy, a publicly traded Indian company, is now the world's fifth-largest wind energy provider, and its ranking is expected to climb in the near future. Moser Baer Photovoltaic, which is planning an initial public offering in 2009, is becoming a global leader in the development and manufacture of thin-film solar technology. And Bhoruka Power has become a leading player in the small hydro segment for power generation in India.

But the largest manufacturer of agricultural vehicles in India, Mahindra & Mahindra, is taking the lead in biodiesel. In February, 2007, the company introduced versions of its two most successful sport-utility vehicles, Scorpio and Bolero, which run on biodiesel. Scorpio is the first Asian vehicle in its class running on 100% biodiesel.

Mahindra also unveiled a biodiesel tractor for the first time in India. The company had set up its own biodiesel plant in 2001. It completed extensive studies and worked with IIT Kanpur, a leading Indian technology institute recognized globally, and the R&D center of Indian Oil Corp. Mahindra is also simultaneously working on its vehicles' fuel adaptability and trying to position itself for when India matures to the point of requiring better fuel sources.

Second Largest Producer of Sugar Cane

That day may not be far off, as India is the world's second-largest producer of sugar cane, which is a preferred source for ethanol. Renewable energy will provide investors and joint venture partners with significant returns during the coming years. And with opportunities in solar, wind, ethanol, and biodiesel, numerous global synergies are emerging exist between homebuilders, power companies, and automotive firms. Savvy investors and corporations already recognize the significant potential of the Next Wave. They know another wave like this won't crest for another 20 years or 30 years, and they're eyeing opportunities to capitalize on this unique opportunity.

William Nobrega is president and founder of The Conrad Group, a global professional-services firm that focuses on emerging markets and technologies. It provides a complete spectrum of strategic planning and mergers-and-acquisitions facilitation services to Fortune 500 and leading regional companies worldwide. The firm is dedicated to maximizing the success of market leaders in international markets. Mr. Nobrega is the author of Riding the Indian Tiger: Understanding India the Worlds Fastest Growing Market, published by John Wiley & Sons. Mr. Nobrega is currently working on his next book, entitled The Next Wave: How Investors Can Ride an Era of Unprecedented Economic Growth and Innovation; it will be released in 2009. For more information, visit The Conrad Group.

 

[nitesh]

'India created more jobs in US than US did here'
"We are not going to get everything," he acknowledged. "No country is going to get everything, but no country is going to give away everything."
Source:'India created more jobs in US than US did here'

Hmm that's quite smart and assertive statement. mr. kamalnath has put a very good statement

 

[Neo]

India’s inflation hits seven-year high​

NEW DELHI, June 13: India’s inflation hit its highest level in over seven years on Friday, stoking expectations of more interest rate hikes that could slow growth and piling pressure on the government as elections loom.

Annual inflation rose to 8.75 per cent for the week ended May 31 the highest since February 2001 from 8.24 per cent a week earlier, according to the Wholesale Price Index, India’s most watched cost-of-living measure.

The increase, driven by higher prices for food, vegetables and manufactured goods like textiles, fed expectations of further monetary tightening that could dampen economic growth in the world’s second fastest-expanding economy.

The central bank “will try to anchor, reduce inflationary expectations,” said Dharma Kriti Joshi, economist at Crisil credit rating agency.

The data came two days after the central bank hiked its leading lending rate, known as the repo rate, by a quarter percentage point to 8.00 per cent, a six-year high.

The latest inflation jump exceeded analysts’ forecasts of 8.28 per cent and was a blow to the government, which desperately wants to tame prices, fearing a voter backlash in national elections due by May 2009.

Inflation could reach double-digits as soon as next week when a sharp hike last week in state-set fuel prices starts being included in the data, analysts said.

The government dithered for weeks about hiking fuel prices, worried about losing voter support, but finally said state oil firms could no longer sustain huge losses caused by record global crude costs.—AFP

India’s inflation hits seven-year high -DAWN - Business; June 14, 2008

 

[Flintlock]

India to build 43 new IT cities in 10 yrs
16 Jun 2008, 0004 hrs IST, Mahendra Kumar Singh,TNN


NEW DELHI: The IT industry's footprint looks set to expand beyond its existing homes.

Faced with a challenge from upstarts threatening to erode India's low-cost appeal, the government is planning to build 43 new information technology cities across the country to retain its top dog status in the business and to be in a position to tap the huge surge in demand for IT-enabled services over the next 10 years.

The move comes at a time when the rising infrastructure and employee costs in big cities is threatening to blunt India's crucial cost advantage.

While India has held on to its pre-eminent position, its IT and BPO companies are losing their global cost advantage with the emergence of countries like Vietnam and the Philippines, which offer similar services at cheaper rates and are threatening India's status as the world's back office.

As the allure of BPO jobs goes down and attrition rates go up, companies are increasingly finding it difficult to recruit quality employees in the big cities. Also of concern is infrastructure constraints in Bangalore, Gurgaon and elsewhere.

The plan to build brand new towns is designed to address some of these issues. It is felt that these new towns will provide a steady supply of workers besides being specifically geared towards the needs of the IT and BPO sectors.

The proposal, suggested by a high-level group on service sector, has been cleared by the Planning Commission. "The modalities for the ambitious plan will be finalized very soon," a source said.

According to the plan, each IT city will be set up in an area of more than 500 hectare. The cities will altogether generate employment for around 3.5 million people by 2018.

The proposal is to create self-contained satellite townships with commercial space for renting and a commensurate increase in residential accommodation, education, healthcare, retail and recreational facilities.

"Improvement in infrastructure is very important to ensure the continued competitiveness of IT and BPO industries," an official said while explaining the rationale behind the move.

At present, the major volume of IT-enabled services is concentrated in seven cities — Bangalore, Chennai, Mumbai, Hyderabad, Kolkata, Gurgaon and Noida. Government estimates point out that 95% of the IT and BPO service industry is in these cities, with around 36% of services concentrated in Bangalore alone.

According to officials, the IT and BPO business in the country is likely to grow by 2.5 times in the next 10 years. The growth cannot be absorbed in major cities.

As infrastructure in major cities is already under tremendous strain, the IT sector has started migrating to smaller cities. However, the volume of business in the IT sector likely to come to India is huge which even tier II & III towns are unlikely to handle, considering poor infrastructure.

Under the ambitious proposal, the government plans to shift 40% of the business to the upcoming 43 cities by 2018.

The new towns will be properly planned and laid out and endowed with modern infrastructure and good connectivity to the big cities and airports.

These townships will have residential and work areas with all essential services - water supply, power, civic amenities, health, education, transport and entertainment - to meet the civic and commercial needs of the workforce.

The Centre has sought the support of state governments in facilitating creation of these new towns. The proposal suggests that the towns will be developed by private players and state governments will ensure trunk services like electricity, water supply, sewage and drainage.

India to build 43 new IT cities in 10 yrs-India-The Times of India