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Transforming India
24 Jul 2007, 0008 hrs IST

The United States Agency for International Development (USAID) now describes India as a “transforming” rather than a “developing” country. This change in nomenclature may have been motivated by the need to cut an already minuscule amount of aid that India receives from the US. But it indicates a new way of looking at countries like India and China and the unique position they occupy in the world.

American aid has always been strategically leveraged, with the bulk of it directed to a chosen few like Israel, Egypt, Pakistan and increasingly Iraq. It's not worth ruing the fact that USAID flows to India next year will be $81 million, down 35 per cent from this year's.

Even at the higher rate it amounts to only 11 cents, or less than five rupees, for every Indian. In any case, India is looking for trade access rather than aid from the US as a way of lifting its economy and improving the living standards of its people. To label India as “developing” is to place it in the same bracket as the “underdeveloped”, the latter term having fallen into disuse lately. But both generate their own sets of cliches and vested interests.

To be “developing” is to make ritual invocations to the wretched of the earth, wallow in poverty while blaming others for one's plight, know where to plead while making occasional prickly assertions of independence, and generally set low expectations for oneself. It's an identity that India needs to grow out of. “Transforming” would be a better description for the country to internalise.

Influential recent studies, such as the ones carried out by Goldman Sachs and McKinsey Global Institute, suggest that the India story in the 21st century doesn't have to be a repeat of the latter half of the 20th. Both studies see it as a giant in the making, a crucial pole of the future world economic order.

India has enormous problems and enormous prospects. It may have the makings of a superpower, but its infant mortality rate is a shocking 57 per 1,000 births; higher than Bangladesh or Namibia and about double that of Egypt. It's been left far behind by China in power, ports, roads, health and education. In the circumstances, “transforming” is an appropriate category. We have a lot of way to make up for the lost years of chronic, self-pitying underdevelopment. And we are not there yet.
 
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india infrastructure - require huge investment
Al-Bawaba, Jordan
Posted: 23-07-2007 , 16:45 GMT

Global Investment House – Economic & Strategic Outlook- India – Infrastructure - Improvements in infrastructure facilities will be critical to sustain and accelerate the current economic growth. It is noteworthy that in the recent years improvements have taken place in infrastructure facilities in areas such as telecommunications, roads, ports and railways. These developments are having a positive impact on the productivity and competitiveness of Indian economy. At the same time, infrastructural constraints in most critical areas such as power and urban infrastructure continue to impinge on the competitiveness of manufacturing activity. Apart from higher levels of investment, issues of governance and management including policies relating to appropriate pricing and user charges would need to be addressed to achieve satisfactory results.

The government projects a total fund flow of US$456bn in 11th five year plan (2007-12). The resources will be mobilised from public sector funding and private investment. Of the total projected investment, it is estimated that power could get 28%, roads 19.7%, railways 14.5% and telecom about 12.3%. Power sector can see investment of Rs5,257.2bn in the 11th plan. Public spending would continue to dominate this investment with private sector expected to contribute Rs200bn with a projected growth rate of 15%. Road sector can see investment of Rs3,686.5bn in the same period with private sector playing important role in the sector. It is expected that overall spending on national highways would grow by 5% per annum for next five years. Investment in rural roads is also projected to grow at 8% per annum.

Government has identified growth in agriculture sector as the key to realizing 9% growth rate during 11th plan. For this to happen, the irrigation network has to be improved substantially. It is projected that investment of Rs1,831.4bn would come to the sector for creating the target 14.5mn hectares of irrigation potential. In the water supply and sanitation sectors, Rs1,063.5bn worth of investment is expected to come. This would mean that central and state plan spending would grow at 10% and 5% respectively.

Index of six core infrastructure industries comprising of crude petroleum, petroleum refinery products, coal, electricity, cement and finished steel witnessed a robust increase of 10% in March 2007. A year ago, the index had increased by 7%. Except for cement, all the remaining five sectors witnessed higher growth in production in March 2007 as compared to the previous year. Electricity generation recorded a healthy increase of 8% in March 2007 as compared to the modest rise of 3.4% a year ago. Finished steel production witnessed the fastest increase of 15% in addition to the 10.9% increase a year back. Crude petroleum production recorded a turnaround, growing by 3.2% in March 2007. A year ago, production had declined by 2.5% in March 2006. Production of petroleum refinery products witnessed an impressive increase of 13.4%. Growth in cement production decelerated sharply to 5.5% in March 2007 as compared to the strong increase of 17% a year ago.

During 2006-07, index of six core infrastructure industries recorded a satisfactory rise of 8.6% as compared to 6.2% increase in the previous year. Electricity generation, with the largest weight in core infrastructure industries, grew by 7.3% during 2006-07. Growth in crude petroleum production grew by 5.6% during 2006-07 as compared to a decline of 5.3% during the previous year. Petroleum refinery production also witnessed a robust increase of 13.4% during 2006-07. Production of cement witnessed a lower increase of 9.1% during 2006-07 after expanding by 12.1% in the previous year. Growth in coal production also slowed to 5.9% from 6.6% during 2005-06.

Improvements in infrastructure assume critical importance for maintaining and improving India’s competitiveness as also encouraging investment in export production and sustaining the pace of export growth in the longer term. Given the kind of investment requirement for the infrastructure development with rapid progress with private participation, sector is expected to grow at good pace for the next few years.

Coal production was affected severely in the first half of 2005-06 owing to disruption in mining activities in various coal fields caused by heavy downpour in some regions during the monsoon. However, mining activities improved in the second half of the fiscal which facilitated a recovery in coal production. The finished steel sector witnessed some deceleration during the year, which could be partly attributed to higher imports and slowdown in exports. Growth in the production of petroleum refinery products recorded a slowdown due to unscheduled shutdown of certain refineries and some moderation in off-take of petroleum products. The subdued growth in electricity sector is attributed to inadequate availability of coal and gas. Reflecting these trends, production of many infrastructure industries fell short of their targets for 2005-06. The fertiliser sector also remained below target due to lackluster performance both by public and private sector plants on the back of shortage of raw materials and natural gas in a few plants and equipment problems. Natural gas production exceeded the target, even as electricity generation was held down by inadequate supply of gas.
 
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Satyam targets 75 percent growth in South Africa

Mumbai, July 25 (IANS) Satyam Computer Services Ltd., one of India's leading software services providers, Tuesday announced its plans for more than 75 percent growth of its South Africa operations.

"Given the potential, both in terms of business and human capital (in South Africa), we have set an aggressive target of 75 percent year-on-year revenue growth and we will invest heavily in further developing the local human capital through various skill enablement initiatives," said Virender Aggarwal, director and senior vice president, Satyam's Asia Pacific region.

The company will hire about 200 South Africans for its offices there.

"In the next two to three years, we plan to achieve a leadership position in South Africa amongst our Indian peers," Aggarwal added.

The company is also bullish on several contracts that would be coming up in South Africa in the next few years and sees huge growth potential in providing IT solutions to the banking and finance, energy and utilities and government sectors.

"I am glad that a global IT giant like Satyam has partnered with us to associate with the country's inclusive strategy of growth and development and serve the economy in a meaningful way," said Sehloho Francis Moloi, South Africa's high commissioner to India.

"Partnering with Satyam and other companies will also contribute to the development of the kind of skills that South Africa needs in order to sustain the current economic growth that we are enjoying, especially the six percent growth we have envisaged in our economic outlook," Moloi added.

Currently, Satyam serves six of the largest firms in the country, employs over 120 technical resources at customer locations and has offices in Johannesburg and Cape Town.
 
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Indian economy growing below potential: Chidambaram
Ahmedabad, April 01, 2007

India's economy was growing below its potential as a large number of poor people were not participating in the growth process, Finance Minister P Chidambaram said on Sunday.

"I am proud that we have achieved an average growth rate of 8.6 per cent during the past three years. At the same time, I am acutely aware that our economy is growing at a rate below its true potential," Chidambaram said at the convocation ceremony of the Indian Institute of Management.

"There are many reasons, but the most important appears to be that nearly one-half of the people of the country do not fully participate in the growth process due to lack of education, skills, jobs, capital or opportunity," he said.

"They are poor, not only in terms of income poverty but also in terms of many human development indicators." Chidambaram noted that India could emulate some smaller and poorer countries in its neighbourhood that have surged forward.

"Some of them have wiped out abject poverty, for instance Malaysia and Thailand," he said.

Some have become middle-income countries like South Korea while others like Sri Lanka have achieved remarkable progress in literacy, life expectancy and other human development indicators, he said.

Chidambaram said India, after independence, failed to encourage the creation of wealth. "Wealth creation, especially through private enterprise, was viewed with suspicion and sometimes even contempt," he remarked.
 
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Indiabulls 1st-Quarter Profit Doubles on Loans, Fees
By Gautam Chakravorthy

July 24 (Bloomberg) -- Indiabulls Financial Services Ltd., a securities firm part-owned by Citigroup Inc., said its first- quarter profit more than doubled on higher lending to individuals and fees from selling insurance policies.

Net income, including that of units, rose to 1.66 billion rupees ($41 million) in the three months ended June 30 from 766 million rupees a year earlier, Mumbai-based Indiabulls Financial Services said in a statement today. Total income doubled to 4.43 billion rupees.

Indian banks and non-banking finance companies are expanding loans and fee income, aided by a consumer boom, as the fastest pace of growth in the Indian economy boosts incomes. Industrial production, a quarter of India's economy, expanded 11.7 percent in the two months ended May, faster than the 10.8 percent pace a year earlier.

Indiabulls Financial Services' income from loan advances almost tripled to 3.1 billion rupees in the quarter as lending also tripled to 41.4 billion rupees, Indiabulls Financial Services said in the statement. Loans to individuals surged more than ninefold to 27.4 billion rupees in the period. The company plans to lend as much as 60 billion rupees this fiscal year.

``We are on course to meet our target,'' Gagan Banga, executive director at Indiabulls Financial Services, said in a phone interview. ``We don't want to exceed the target.''

Indiabulls Financial Services, whose shares rose more than sevenfold in the past 12 months, fell 14.35 rupees, or 2.2 percent, to 649.8 rupees at 11 a.m. local time on the Bombay Stock Exchange today. The benchmark Sensitive index rose 0.7 percent to 15,847.35.

Higher Fees

Indiabulls Financial Services offers brokerage services in equities, debt and derivatives, gives loans against shares and lends to consumers. Fee income from selling insurance and processing applications for loans grew to 316 million rupees from 73 million rupees.

The pace of growth of income from stock broking and other capital market-related activities at Indiabulls Financial Services slowed to 4 percent, rising to 1 billion rupees, after almost doubling a year earlier to 986 million rupees, as the company focused on expanding its finance business. The broking business accounted for 23 percent of revenue in the quarter, compared with 45 percent a year earlier.
 
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Perfect launch pad for move into Europe

A benign regulatory environment gives London the edge over New York as India’s giants go global, our correspondent says in our series on new Anglo-Indian links

Ashling O' Connor
The TIMES

Ronnie Screwvala, the Bollywood producer, could easily have floated his company in the US. The Indian entrepreneur has close ties to some of the major Hollywood studios, which bankroll many of his creative projects, including Disney, with which he has struck an animation deal.

After some consideration, though, he chose London’s Alternative Investment Market (AIM) as the place to list UTV Motion Pictures. “It was a fine call between AIM and Nasdaq, but in the end we needed to be on the London Stock Exchange,” Mr Screwvala said. “The Government is more supportive in the UK, the talent base in London is good, it’s central for time zones and as a commercial capital it is very strong.”

His geographical inclination is echoed across other Indian industries. “London is the perfect launch pad to get into other European regions,” Ramesh Phillips, the European operations co-ordinator for Wipro, the software group, said. “Everything you need for a successful business is here.”

As Indian companies become global players, one of their first ports of call is the UK. This is because of the historic ties between Britain and India, but also because London is becoming a vital capital-raising centre for their international ambitions.

London is also benefiting from a “not New York” effect, according to John Ross, the director of economic policy in the Mayor of London’s office. “There are only three places where you can get unlimited access to capital and that’s New York, Tokyo or London,” he said. “Tokyo hasn’t really globalised and when it comes to international finance, London is doing better than New York. London is a one-stop shop for going global and India needs to raise lots of capital.”

Indian companies, mostly property funds, last year raised a record $2.7 billion (£1.3 billion) on AIM and $200 million on the main market. Twenty-four Indian companies are now traded in London; 19 are on AIM.

The journey to London’s capital markets began in 1991 when India liberalised its economy, prompting widespread corporate restructuring, as Alan Rosling, the Tata director in charge of the Indian group’s international strategy, recounts. He said: “For the first time in a generation, Indian companies were free of government restrictions on their overseas investments, they had the competitiveness arising from lower costs of high quality people and they saw the strategic need to scale up to face growing international competition.”

The easing of capital constraints led many, instinctively, to seek a presence in London. “They are coming for a range of strategic motivations – an international profile, acquisitions in Europe or diversifying their portfolio of investments,” Ibukun Adebayo, India specialist at the London Stock Exchange, said. “The fear [in India] that a foreign listing would be a premium capital outflow is being refuted. India realises that the investments flow back in one shape or form.”

As India’s companies look to London, so too do their trusted advisers and financiers. In the throes of independence, the State Bank of India, the country’s largest bank with its origins in the 19th century imperialist Bank of Bengal, ventured abroad on the coat-tails of the diplomatic corps.

Today its private-sector rivals are expanding with the confident strides taken by India’s new ambassadors: the top 2,500 companies collectively sitting on free cashflow of $150 billion and underleveraged balance sheets. “Our customers are going global and we have to follow them,” Chanda Kochhar, the deputy managing director of ICICI Bank, India’s largest commercial bank, said.

In the past five years, the bank has amassed a $6 billion balance sheet in the UK, its most profitable international subsidiary. “I expect to see the operation grow 100 per cent this year and for years to come,” Ms Kochhar said. “Opportunities are arising in India but financial structuring is possible globally. We are bringing the opportunity from India and making it happen in the UK.”

Although it is tiny by global standards, even after a $5 billion secondary issue, ICICI is gradually building an international reputation. It was one of the lead arrangers on Tata’s £271 million acquisition of Tetley Tea in 2000 and a second-tier syndicate lender for the Corus takeover and it structured the finance for the acquisition of Whyte & Mackay by the tycoon Vijay Mallya.

“We have global aspirations – this is an important platform for us,” Sonjoy Chatterjee, the bank’s UK chief executive, said. “Significant growth is to come from international markets and London is the hub. The regulatory environment is extremely benign and it is easy to do business here.”

In the heart of the City sits Punjab National Bank, the third-largest bank in India with 37 million customers and 2,700 branches. Established in 1895, it this year had the confidence to open its first UK branch. Now licensed by the regulator, PNB has ambitions beyond the Indian diaspora to win UK customers by using its cheaper administrative base in India to beat high street banks on their home turf.

PNB illustrates how Indian groups are moving beyond simple cost advantage to rival UK companies at their own game. “India is globalising and our customers are too,” Madanjit Singh, the managing director of PNB’s international arm, said. “Unless we bring in global exposures and best practices, the past is no guarantee of the future.”

In modern times, Britain has ceded its once-dominant trading position in colonial India to more adventurous investors from the US, France and Italy. It would do well to heed the same advice. History offers no guarantee.
 
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Trends emerge from India’s LCC market revolution
Wednesday, 25 July 2007
e-Travel Blackboard

The Centre For Asia Pacific Aviation (CAPA) has released results after a recent survey was conducted finding new trends in passenger behaviour following India’s Low Cost Carrier revolution and the country’s emerging economy.

The survey found India’s travelling population was increasingly using LCC as their preferred means of transport, price dependent, and a significant number of those purchasing tickets were using the internet to do so.

43 per cent of the 2000 LCC passengers surveyed throughout airports in India said they bought their tickets over the internet, while 48 per cent said they used a credit card to purchase their tickets.

Figures relating to full service carriers in India were significantly lower, with just 21 per cent buying tickets over the internet, and 31 per cent using a credit card for the purchase. 61 per cent was found to have used a travel agent to buy air tickets.

CAPA noted that three years ago when the rise of India’s LCC market was beginning, industry analysts argued it would fail due to the low internet and credit card penetration in the marketplace.

“The spread of middle class affluence, in the wake of enormous economic growth, has challenged this point of view, and our survey results prove what we have in fact been hearing from India’s LCCs over the past year. The figures are startlingly clear, and still surprising to some – India is in line with global experience,” as noted in CAPA’s report.
 
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HP plans expansion to 500 cities by 2008,launches new products
PTI
Tuesday, July 24, 2007 22:02 IST

MUMBAI: World's largest personal computer maker Hewlett- Packard on Tuesday said it plans to expand its market to 500 Indian cities by 2008.

"Currently, we are present in 380 cities and are targeting to expand to 500 cities by 2008," Hewlett-Packard India Sales Pvt Ltd's Director (Consumer Products-PSG) Rajiev Grover told here.

By 2008, HP will also increase its retail outlets to 2,800, from the current 2,000.

"We already have presence in Tier I and II cities. This year our focus will be mainly on Tier III cities as there is a large scope there," he said.

HP Senior Vice President Global Marketing Satjiv S Chahil said: "We are mainly targeting the SMEs... as in any economy, small and medium business is the backbone (here)."

"We intend to maintain a leadership position here," he added.

HP also launched its new Compaq portfolio, a new range of desktops and notebooks. It includes Compaq Presario V6425TU and V6406TU notebooks and Compaq Presario SG3053IL and SG3043IL desktops.

Launching the range, Bollywood superstar and Compaq brand ambassador Shahrukh Khan said that the company's vision is to empower people to make their dreams come true.
 
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Sabinsa Corporation Unveils Manufacturing Facility in India
2007-07-24 - Sabinsa Corporation
NPI Center, Canada

Facility allows Sabinsa to better serve global nutrition market while growing local economy

PISCATAWAY, N.J., July 23, 2007 - Sabinsa Corporation today announced that it has completed construction of a $6 million manufacturing facility in Hyderabad, India. The state-of-the-art building and its 100 estimated employees will manufacture herbal extracts and phytochemicals for world markets including the U.S., Europe and Japan.

Located in India's Genome Valley, the new plant covers an area of 200,000-square-feet with a dedicated 60,000-square-foot area which houses a series of testing labs and manufacturing equipment to ensure optimum quality control, in addition to providing headquarters for Sabinsa's research and development operations. Sabinsa currently operates five additional manufacturing facilities throughout India. This plant, like the others, uses effluent water treatment systems and is environmentally conscious and friendly.

"Increased demand for our scientifically backed ingredients coupled with tremendous business opportunity in the Genome Valley presented an ideal opportunity to grow our business and establish a new manufacturing plant in India," said Dr. Muhammed Majeed, founder of Sabinsa Corporation. "We are pleased to have the tools to better serve our customers while providing a range of employment opportunities that will allow both Sabinsa and the local economy to flourish."

Sabinsa Corporation, founded in 1988, is a manufacturer and supplier of herbal extracts, cosmeceuticals, minerals and specialty fine chemicals. Sabinsa's mission is to provide alternative and complementary natural products for human nutrition and well-being. Over the past nine years, Sabinsa has brought to market more than 50 standardized botanical extracts and privately funded several clinical studies in conjunction with prestigious institutions in support of these products. With more than 100 scientists working full time conducting ongoing research both in India and the United States, Sabinsa continues to develop and patent phytonutrients for the world market. All products intended for human consumption are certified Kosher.
 
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GE Equip enters India, plans $8bn investment
BS Reporter / New Delhi July 23, 2007

GE Equipment Services (GEES) today announced its entry in India by acquiring 15% stake in Titagarh Wagons. The company also plans to invest $8 billion in the country by twenty ten.

Terming it a strategic investment, considering the Indian Railways has been opening up to private players, GEES feels that it would be able to fulfill the railway ministry's demands for wagons. In fact, with the partnership with Titagarh Wagons, GEES would foray not only in wagon manufacturing, but would also set up facilities for maintenance of wagons.

The partnership comes at a time when the railways ministry is in the final stages of starting work on the dedicated rail freight corridor project.

GEES India President Dhananjay Nalawade said currently Indian Railways has around 2,30,000 wagons, while it would require 3,30,000 wagons by 2010. "This is where our partnership with Titagarh Wagons would come in handy," he said. GEES is also in talks with the ministry for providing signalling equipment.

"GE is looking at investing around $8 billion in India by 2010, a majority of which would be pumped in infrastructure," Nalawade said. GE is also keen on taking part in the ministry's other PPP initiatives like land development.

Titagarh Wagons, which is one the leading railway wagon manufacturers in India, is primarily engaged in the production of wagons, bailey bridges and heavy earth moving equipment.
 
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Indian households lapping up laptops real fast
Posted July 19th, 2007 by Tarique

New Delhi, July 19 (IANS) With the Indian IT industry witnessing a robust growth, the country's household segment, apart from the business sector, is fast lapping up notebooks inducing the market to grow fivefold, said an industry report.

Notebook sales account for over 13 percent of the total PC (personal computer) market of which the household segment constitutes 37 percent and businesses 63 percent, said an annual IT industry performance report released by the Manufacturers' Association of Information Technology (MAIT), a leading IT hardware and training body.

"Notebooks are becoming increasingly affordable, hence their consumption in the households grew fivefold accounting for more than one-fifth of the total notebooks market," Vinnie Mehta, executive director, MAIT, told a press conference here Thursday.

Annual sales of notebooks grew by a whopping 97 percent, with 850,860 units sold in 2006-07 compared to 431,834 in 2005-06.

The total PC sales rose to 6.34 million units in 2006-07 compared to over 5 million in 2005-06.

The bi-annual review also reported the growth of desktop market that grew at a rate of 19 percent with the business sector accounting for 74 percent of sales and households 23 percent, which has remained constant for the past 2-3 years.

"The household segment has the potential to grow at more than 20-25 percent. Having said that we do understand that the strengthening of the rupee and hike in interest rates have created a pressure on their disposable income," stated Mehta.

Contrary to popular belief, the report highlighted the fact that the sale of desktops was more in northern India than in the southern and western India.

"This I believe is more because of increased consumption (of desktops) by private companies and the several e-governance measures adopted by the government," Mehta explained, adding that a considerable growth in consumption was also noticed in the eastern region that is becoming more hi-tech by the day.

However, the sale of servers registered a negative growth, declining by five percent in the four metros of Delhi, Mumbai, Chennai and Kolkata and by 53 percent in Bangalore, Hyderabad, Ahmedabad and Pune.

The sale of UPS (uninterruptible power supply) grew by 80 percent in 2006-07 with 2.17 million units sold, of which households accounted for 42 percent and businesses 58 percent.
 
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Could Jaguar Or Land Rover Go Indian?
Ruth David, 07.24.07, 8:15 PM ET
FORBES, NY

MUMBAI - India’s Tata Motors and Mahindra & Mahindra have reportedly been shortlisted as bidders for Ford Motor’s British luxury brands Jaguar and Land Rover.

Tata Motors (nyse: TTM - news - people ) and Mahindra & Mahindra declined to comment on an article in The Economic Times that said Ford (nyse: F - news - people ) had cleared the companies to start due diligence and organize visits to Ford’s factories.

An acquisition of either of the brands would vault Mumbai-based Tata Motors into the luxury market and strengthen it internationally. Though it exports cars and trucks to places like Africa and the Middle East, Tata is still mainly seen as an Indian outfit, said Mohit Arora, senior director at the consultancy group J.D. Power Asia Pacific.

“Since Tata Motors now has a fairly strong bottom line, they wouldn’t have an issue with using internal accruals or raising more money from the markets,” Arora told Forbes.com from Singapore.

However, for a company that has made its name in India with cars that are cheap to run and operate, rather than the highest in quality, a move into the luxury segment would be a sharp departure, said Arora. Tata currently is working to realize ambitious plans to release an ultra-low-priced $2,500 car for the Indian market. (See: “ The Next People’s Car”)

Tata Motors controls 65% of the Indian commercial vehicle market and 19% of the passenger car market.

In response to an e-mail, Ford Europe spokesperson John Gardiner said: “Ford has been assessing a number of strategic options for all our operations. … The review is continuing and Ford is now actively investigating its options in terms of other possible actions: we are not ruling anything in or out.” He refused to disclose who has expressed an interest in buying the brands.

A Jaguar acquisition would be good for Tata Motors since the Ford brand, despite its troubled past, currently ranks high in quality, said Arora. Land Rover, on the other hand, is at the bottom of J.D. Power’s quality rankings. Media reports said the brands should fetch Ford about $1.5 billion.

As for Mahindra & Mahindra, the world’s fourth-largest tractor maker has more of a global presence. It also has more of an up-market focus and is likely to attempt expanding along those lines, Arora said.

Mahindra already has a manufacturing base in the U.S., where it assembles 14 products, and it exports to Russia and several countries in Africa. In India, Renault (other-otc: RNSDF - news - people ) and Nissan (nasdaq: NSANY - news - people ) are in an alliance with the company, and the alliance is a “key strength,” he said.

It is possible that an acquisition of one of the Ford brands could come in the context of an expansion of the Nissan-Renault-Mahindra alliance internationally.
 
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Railways planning heavy investment in infrastructure
GULF TIMES
Published: Wednesday, 25 July, 2007, 02:26 AM Doha Time

KOLKATA: The Indian Railways is planning to invest Rs2.51tn($62 billion) in the 11th Five Year Plan for developing infrastructure to strengthen its domestic supply chain.

“The railways will chip in with this amount for five years down the line, of which Rs900bn will come from internal generation. At least 29% of the total amount will be from market borrowing and the rest will come from the government,” V Mathur, member, traffic, Railway Board, told reporters yesterday.

He was speaking at a seminar on “Logistic Colloquium” organised by the Confederation of Indian Industry (CII) here.

He said the draft of the investment proposal had already been submitted to the Planning Commission. The Indian Railways is looking into several development aspects like electrification and gauge conversion.

“We are looking at Public Private Partnership (PPP) models in some areas and are also keen to explore opportunities with multilateral funding agencies,” Mathur said on the sidelines of the seminar.

Speaking on the Delhi-Mumbai industrial corridor, he said the Japan International Corp Agency (Jaica) was involved in a survey on the project. The survey will be ready by October.

Mathur said that Rs280bn would be invested in the Delhi-Mumbai freight corridor. He also said there was plenty of opportunity in the field of logistical development as the total import in India since 1995 increased by 19% and exports increased by almost 17%.

“The railways will also develop about 20 warehouses in different parts of the country through the Railway Warehouses Corp. Earlier all the warehouses were developed but they were lying neglected,” he said, adding the railways will also develop logistic parks along the Delhi-Mumbai freight corridor to enhance the domestic supply chain in India.

Indian Railways is also looking at multilateral funding agencies like Japan Bank for International Cooperation (JBIC) to participate in some of its logistics development ventures, Mathur said.
Meanwhile, the railways is discarding the computerised system for enquiry regarding train timings and reservation and reverting to the manual service.

Railway Minister Lalu Prasad has inaugurated the new railway enquiry phone number 139 by asking the operator about the timing and first class air-conditioned rail fare of the Patna Rajdhani Express.

The phone number 139, to be available in four metros of Delhi, Mumbai, Chennai and Kolkata, is part of the integrated train enquiry system (ITES) called Rail Sampark consisting of interactive voice response system and regional call centres, Railway Board Chairman Jai Prakash Batra told reporters.

Asked what will happen to the existing computerised service, Batra said: “It will coexist for some time but once this is fully functional, we may decide to close that down.”
Batra replied in negative when asked if the new system was not like going back to the old days.

He said that the new system was developed through public-private partnership (PPP) between Indian Railways Catering and Tourism Corporation (IRTC) and CRIS on the one hand and on the other hand Bharat BPO and Bharat Sanchar Nigam Limited as well as Spanco Telesystems and Solutions and Stratcon Backoffice Solutions with a call centre operator.

The add-ons in this service include hotel and taxi bookings and restaurant table reservations, apart from rail reservations.

“In the first phase zonal hub for the north region at Delhi and its call centre at Noida has been commissioned. This will provide the basic enquiry services for NCR Delhi, Punjab, Haryana, Himachal Pradesh, Jammu and Kashmir, Uttar Pradesh, Rajasthan, Uttarakhand and Chandigarh,” Batra said.

“The subscriber will be accessing this service by making a local call and not STD dialling. For the northern centre 497 skilled executives have been deployed for the purpose,” he said.
The caller will have the option to seek information zone-specific regional languages.
 
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SEZ investment to cross Rs 1,00,000 cr
Chennai, UNI:

Union Commerce Secretary G K Pillai, on Monday, said the investment in Special Economic Zones (SEZs) across the country is likely to cross the Rs 1,00,000 crore mark by 2008..

Union Commerce Secretary G K Pillai, on Monday, said the investment in Special Economic Zones (SEZs) across the country is likely to cross the Rs 1,00,000 crore mark by 2008.

Addressing a one-day national seminar on SEZ here, he said apart from the benefits of investment, the SEZs would generate about one lakh jobs in various fields by this year.

“The Commerce Ministry is expecting another three lakh crore investment in Special Economic Zones by the end of 2009, which would generate three lakh more jobs,” he said.

Centre’s vision

On SEZ Act, which brought enormous FDI, Mr Pillai said the government’s vision on Special Economic Zones had tremendous potential to succeed.

“Nokia, Flextronics, Ascendas, Foxconn Tech and Apache Software have already invested in India because of the Special Economic Zones,” he said.

Mr Pillai, who is also the Chairman of the Board of Approval (BoA) for Special Economic Zone, said the SEZs were fairly distributed across the country, except for some places in Bihar and North Eastern states.

“Private investment in Special Economic Zones, before the enactment of the Act, was merely Rs 3,600 crore,” he said adding “after the Act, many companies have so far invested over Rs 40,000 crore besides generating 50,000 jobs”.

Instructions

On the land acquisition issue especially for the SEZ, Mr Pillai said the Centre had issued certain instructions with regard to approval of Special Economic Zones and the land acquisition for SEZs.

“Chief Secretaries of all the state governments have been informed that the state governments should acquire land for SEZs only with 100 per cent consent from the land owners,” he said. According to the statistics given by the officials on the latest state-wise Special Economic Zones position in India, Maharastra leads the table with 60 SEZs, formally approved by the Centre, followed by Tamil Nadu with 36, Harayana (22), Karnataka (20), Gujarat and Andhra Pradesh (19), West Bengal (10), Orissa (8) and Uttar Pradesh (6).

Freight corridor

Meanwhile, Mr Pillai said, India and Japan will next month sign an agreement for a dedicated rail freight corridor connecting Delhi, Mumbai and Kolkata, which will significantly reduce the time taken for transporting goods from one metro to another.

“We are likely to sign it (MoU) next month when the Japanese Prime Minister visits India,” Mr Pillai told reporters on the sidelines of the seminar here.

He said about 200 freight trains would ply on the corridor and help Indian Railways wean away goods traffic from the roads.
 
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The 10 countenances of the elephant
Stephen Manallack
The Age, Australia
July 26, 2007

WITH India doing a nuclear deal with the US and taking a front seat in global forums, it is important that Australia understand this emerging superpower — especially as pressure mounts for India to join the 21-member APEC group and as India becomes one of our major trading partners.

Many of our business leaders have already been surprised and challenged by the negotiating skills and management performance of their Indian counterparts, most of whom learnt their craft in tight-capital and low-margin markets, a combination few in the West have experienced. Whether in business or politics (or international cricket), India is no pushover. To relate and negotiate, we need to factor in 10 realities about modern India, areas chock full of myth.

First, Indian entrepreneurs are now recognised around the world and there is a national expectation that the next Bill Gates will be Indian. Global successes are celebrated, as Lakshmi Mittal and Ratan Tata have found as their conglomerates become global steel leaders. There is much more to come on this front, with growing reserves of corporate capital finding a home overseas and more Western business icons falling to Indian ownership.

This entrepreneurial spirit permeates the nation and sits comfortably with the contradiction of socialist leanings. Nowhere is the spirit of small enterprise so active as in the communist-run state of Kerala — but the locals point out this contradiction is just "India".

Second, Indian leaders may live urban and increasingly Western lifestyles, but they do not forget the small towns and villages at the centre of rural life — and it's not just the politicians with an eye for votes, with major corporates such as Infosys pouring resources and funding into village developments. Somewhere at the back of the mind of most Indian delegations will be the nagging question: "What does this mean for rural communities?"

Third, India is a land of great cultural and linguistic diversity and countless opinions, but two things unite the nation — cricket and the World Trade Organisation. Indians become instantly passionate when challenged on their high tariffs, pointing to European and US agricultural subsidies as well as restrictions on the flow of capital and people out of India. This passion was seen at the WTO in Germany last month, when Indian delegates walked out, and will be seen again at countless forums around the globe. The message is, point the finger at India and you can expect a robust response.

Fourth, Indians have oceans of patience, which can drive Westerners crazy, but it gives them a special strength in negotiations. This patience is derived from deeply held spiritual views such as impermanence — Indians are constantly reminded of the impermanence of this life, everything changes, and they can wait when often we cannot.

Fifth, do not believe that the Indian economic miracle is just driven by call centres and IT. Important as these are, look also at energy, retail, manufacturing, pharmaceuticals and even agriculture (did you know India is the second-largest wheat producer?).

This economy is more driven by domestic demand than, for example, is China's, so deriving its long-term strength. Already the IT industry is changing in India, as much of the "grunt" work is actually outsourced to South-East Asia while Indian companies take a firmer grip on high-value knowledge work.

Sixth, the dragon (China) and the elephant (India) have discovered that they can dance, and soon China will become India's major trading partner. Competitors are becoming collaborators and politicians are pushing this hard, as decades of acrimony and mistrust begin to diminish.

So, Western business and political leaders need to be aware that the Indians coming to global negotiating tables and forums like the nuclear club and APEC will be leaders who confidently see that this century belongs to the East.

Seventh, while India feels great about the success of "Asia", in many ways it does not feel particularly "Asian". Indians feel Indian. To them, that is more relevant than being geographically part of Asia.

Eighth, whether dealing with the young or the old, in India never forget the "Father of the Nation", Mahatma Gandhi. So when Gandhi said there was enough in the world for everyone's need but not everyone's greed, your Indian counterpart will have this in mind.

When he scorned Western civilisation (on being asked what he thought of Western civilisation he said it would be "a good idea") this might account for the smile on the other side of the table, for Indians do not necessarily see Western leaders as representing a wonderful society.

Ninth, partly because of Gandhi, while the importance of "freedom" justifies actions in the US and other parts of the West, your Indian counterparts will be preoccupied with "freedom and equity", seeing little value in giving people the vote but no fair share of the food, and so on. Indian leadership needs more than the rallying cry of "democracy" to make it enthused.

Tenth, while many in the West see India as a "developing" country and may underestimate its desire to make an impact, the position it has taken at the WTO and other global forums is a sign that India has no intention of being a bit player in the world. Invite India in and you can expect them to want to be at the head of the table, making the running.

India will be a great power. Inviting India into APEC makes a lot of sense, so long as the members, including Australia, realise that this truly means an elephant will be in the room.

Stephen Manallack is a former chief executive of the Australia India Business Council.
 
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