INDIA ECONOMIC NEWS

Published by Embassy of India Bangkok August 2015

Skill India

The Prime Minister, Shri Narendra Modi, today outlined his vision for "Skill India" as he launched the "National Skill Development Mission" in New Delhi. Asserting that his Government has declared a war on poverty and is determined to win it, the Prime Minister said that each poor, underprivileged youth is a soldier in this war.

Noting that India will have a surplus manpower of 4 to 5 crore over the next decade, the Prime Minister emphasized the need to provide this youthful manpower with skills and ability to tackle global challenges, and warned that the demographic dividend would otherwise become a challenge in itself. He said that if the 20th century saw India's foremost technical institutes – the IITs – make a name for themselves globally, the 21st century required that India's ITIs (Industrial Training Institutes), acquire global recognition for producing quality skilled manpower.

The Prime Minister said India can become the world's largest provider of skilled workforce for the world. In order to prepare for this, Shri Narendra Modi said there is a need for mapping of manpower requirements, not just in India, but globally as well.

The Prime Minister called for constant updating of training programmes and syllabi to ensure that the youth is exposed to latest technology and industry environment. He said the Government would work to promote both apprenticeship and entrepreneurs. He said it is important to predict the possibilities of the future, and prepare for them today itself.

The Prime Minister unveiled the Skill logo, launched the National Skill Development Mission, and Released the National Policy for Skill Development and Entrepreneurship, 2015. He also launched the Pradhan Mantri Kaushal Vikas Yojana and Skill Loan Scheme. The Prime Minister felicitated the six Indian medal winners of the World Skill Oceania competition.

Union Ministers Shri Arun Jaitley, Shri Manohar Parrikar, Shri Rajiv Pratap Rudy, Shri Suresh Prabhu, Shri Ananth Kumar, Shri JP Nadda, Shri Narendra Singh Tomar, Shri Anant Geete, Shri Piyush Goyal, and Shri Thaawar Chand Gehlot were present on the occasion.

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Bharatmala project: Government to develop 7,000 kms of National Highways for Rs 80,000 crore

Source: The Economic Times, 3 Aug, 2015

The government plans to develop 7,000 kms of National Highways under Bharatmala project at an estimated cost of Rs 80,000 crore to improve connectivity in border and coastal areas.

"The Ministry of Road Transport and Highways has undertaken detailed review of National Highways network with a view to improve connectivity in border areas, including coastal boundary, covering development of about 7,000 kms of NHs under Bharatmala Pariyojana," Minister of State for Road Transport and Highways Pon Radhakrishnan told Rajya Sabha in a written reply.

Radhakrishnan said the project is to be launched at an estimated cost of Rs 80,000 crore in consultation with state governments.

"However, the project is yet to be formally launched," the Minister said, adding, "bids for

project preparation have been called in anticipation of investment approval."

He said the preparation of detailed project report is likely to take about one year.

Setting up of Industrial Townships

Source: Press Information Bureau, 5 August, 2015.

Government of India is developing Industrial Townships under the Delhi Mumbai Industrial Corridor Projects. The following four Industrial Townships are moving towards implementation and are expected to be set up by the end of 2019. An amount of Rs. 2572.99 crore has been allocated for implementation of these townships as on 30.06.2015.

1. Ahmedabad-Dholera Special Investment Region, Gujarat

2. Shendra-Bidkin Industrial Park, Maharashtra

3. Integrated Industrial Township ‘Vikram Udyogpuri’ near Ujjain, Madhya Pradesh

4. Integrated Industrial Township Greater Noida Limited

To give a boost to the industrial growth resulting into industrial production as well as generation of more employment, Government has taken various measures which include launch of ‘Make in India’ programme, implementation of National Manufacturing Policy(NMP), simplification and rationalization of the Foreign Direct Investment (FDI)Policy, development of industrial/economic Corridors.

Other measures include launch of the e-Biz Mission Mode Project under the National e-Governance Plan, incentives for helping industries in difficult areas through Plan Schemes of Transport Subsidy, special package of incentives for Special Category States, North-East Industrial & Investment Promotion Policy, and specific programmes like Modified Industrial Infrastructure Upgradation Scheme, Indian Leather Development Programme etc.

This information was given by the Minister of State (Independent Charge) in the Ministry of Commerce & Industry Smt. Nirmala Sitharaman in a written reply in Rajya Sabha.

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Government has approved proposal to divest stake in NTPC, NHPC: Piyush Goyal

Source: The Economic Times, 6 Aug, 2015

The government has approved proposals for divesting 11.36 per cent stake in NTPC and 5 per cent stake in NHPC Ltd, a move that it likely to fetch Rs 8,247 crore to the exchequer.

"The government has approved proposals for disinvestment in two power sector Central Power Sector Undertakings (CPSUs)...NHPC (11.36 per cent)...NTPC (5 per cent)," Minister of State for Coal and Power Piyush Goyal said in a written reply in the Lok Sabha.

At the current market price, government will fetch Rs 5,592 crore by selling its 11.36% stake in NTPC and Rs 2,655 crore by selling 5% stake in NHPC.

The minister further said that none of the CPSUs of the Power Ministry has made any loss during the last three financial years.

Replying to another question, he said, the present policy of the government is to divest

stake in CPSUs which are profit making in the last three financial years.

Riding on strong demand from retail and institutional buyers, the government's 5 per cent stake sale in power sector lender PFC in July was lapped up by investors, fetching about Rs 1,600 crore to the exchequer.

The Department of Disinvestment has a Rs 69,500-crore target from PSU disinvestment in the current fiscal, of which Rs 41,000 crore would come from minority stake sale and Rs 28,500 crore from strategic stake sale.

Government notifies changes in I-T rules to comply with FATCA pact

Source: The Economic Times, 9 Aug, 2015

The Revenue Department has amended income tax rules to provide for reporting of information with regards to financial assets and accounts, a month after India signed a tax information sharing agreement with the US.

On July 9, India and the US signed tax agreement under the Foreign Account Tax Compliance Act (FATCA) that will enable automatic exchange of

financial information between the two nations about tax evaders from September 30.

The rules define various terms such as financial asset, financial account, excluded accounts, participating and non-participating financial institutions, among others.

The norms prescribe information to be maintained by the reporting financial institution such as name, address, taxpayer identification number (assigned to the account holder by the country or territory of his residence for tax purposes) and date and place of birth (in the case of an individual) of each reportable person.

The rules prescribe reporting requirements on a staggered basis starting from earlier year 2014 and reporting of all details prescribed from calendar year 2017 onwards.

They also specify due diligence procedure for identifying reportable account and various forms.

"Though FATCA reporting has presented short-term challenges for the industry, the rules will provide much needed guidance to the industry to upgrade their

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internal information systems for FATCA reporting and help them be compliant," said Amit Maheshwari, Partner Ashok Maheshwary and Associates.

Bahroze Kamdin, Partner, Deloitte Haskins and Sells LLP said the FATCA rules "luciently" provide for the definitions of various terminology, the information to be maintained and reported and the due diligence process to be followed for identifying preexisting and new accounts.

"India is the first country to have come out with joint rules for FATCA and the OECD CRS," Kamdin said and added, the methodical approach will help financial institutions meet the strict timelines.

After signing of FATCA, beginning September 30, banks, mutual funds, insurance, pension and stock-broking firms will report their Indian client details to the United States which will be shared with New Delhi.

Indian entities will do a reciprocal information sharing about Americans.

The FATCA agreement would "enhance tax transparency and

accountability in matters of financial reporting and payment of taxes which are legitimately due to various governments," Revenue Secretary Shaktikanta Das had said.

Foxconn could make India its next manufacturing base after China, investments suggest

Source: Forbes, 10 August, 2015.

Foxconn, the world’s largest contract electronics manufacturer, has signed a $5 billion deal to set up R&D and hi-tech manufacturing facilities in western India within the next five years. The $5 billion pledge is the largest foreign investment into India’s tech manufacturing sector and a boost for the government’s “Make in India” program designed to spur domestic manufacturing. The Taiwan-based firm, which manufactures for a host of global device brands like Apple, BlackBerry, Amazon, Motorola, Xiaomi and Sony, has the bulk of its factories in China.

Separately on Monday, leading Chinese smartphone maker Xiaomi announced that it will now manufacture its devices in India in partnership with

Foxconn. The factory will be based in the southern state of Andhra Pradesh.

Going by the recent spate of announcements, Foxconn is becoming one of the most aggressive foreign investors into India. Last month, the company announced that it would inject $20 billion into India’s solar sector along with Japan’s SoftBank and India’s own telecom firm, Bharti. Reports suggested that another Foxconn joint venture with billionaire Gautam Adani’s Adani Group could focus on making iPhones and iPads.

Also, Foxconn has rumoredly allocated billions of dollars for India’s e-commerce and technology startups, and is said to be close to finalizing a $500 million investment into online retailer, Snapdeal.

Foxconn has plants in Asia, Europe, Brazil and Mexico which together assemble about 40% of all consumer electronics products sold globally. It has 12 factories in nine Chinese cities, the most in any country.

Setting up manufacturing centers in India could be Foxconn’s attempt to build an alternative to its

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manufacturing base in China where a slowing domestic market and rising wages total up to a tough environment. Foxconn said it intends to set up 10-12 plants and employ a million workers in India by 2020.

Ford targets emerging markets with frugal India engineering Source: Reuters, 11 August 2015.

Ford Motor Co plans to use the low-cost techniques it learned in India to develop compact models for other emerging markets, executives said, copying a strategy used by the Asian rivals that outsell it in the world's fifth largest auto market.

The U.S. automaker has struggled to compete in India, a market where small, inexpensive yet powerful cars are popular and which is dominated by carmakers such as Maruti Suzuki India Ltd and Hyundai Motor Co.

Last fiscal year, Ford sold just 75,000 cars - a figure dwarfed by top selling brand Maruti Suzuki - and its 3 percent share of the overall passenger vehicle market is one of the smallest among foreign automakers.

Ford aims to expand its market share by launching its first India-specific small car, the Figo Aspire, on Wednesday. The car's powerful and fuel-efficient engine will also be fitted into other vehicles Ford plans to export to Africa and Southeast Asia, executives say.

"We are being challenged to find engineering solutions at lower costs than we have traditionally been able to do," John Lonsdale, head of Ford's B-car program in Asia Pacific, told Reuters in a recent interview in the western city of Udaipur.

"This market, probably even more than Brazil, is demanding cost strategies and cost structures that are lower than anywhere else," he said.

B-cars, loosely defined as compact cars, are key to the growth of automakers like Ford in India and beyond: global sales of such cars are expected to rise by more than a third to 11.4 million by 2020, according to analysts at IHS Automotive.

India is expected to become the world's third largest market by 2020, when sales of B-cars are expected to double to

around 1.73 million, IHS Automotive added.

Ford did not say how much the Aspire would cost ahead of its launch, but executives said that 80 percent of the car had been made locally to keep the price low.

Analysts, however, said that despite selling cars in India for more than two decades, Ford was likely to face an uphill battle against its more established Asian rivals in the compact car segment.

"Ford is following a tried and tested approach... but it is late in implementing it," said Puneet Gupta, senior associate at IHS.

Pharma MNCs like Johnson & Johnson, Novartis, step up India play with star drug launches

Source: The Economic Times, 14 August, 2015

Far from drawing a gloomy picture of India, global drug makers seem to have turned gung ho on the country.

Most of them are introducing new patented medicines. While some of the biggest multinational firms like Johnson & Johnson, Novartis, Boehringer

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Ingelheim, Gilead andAstraZeneca launched their most promising brands across therapy areas in India, others such as Bristol-Myers Squibb (BMS) and Amgen are setting themselves up for a bigger role in the Rs 90,000 crore India market that is growing in mid-teens, outshining other emerging markets.

In fact, pharma MNCs in India are growing faster than their local counterparts: according to AIOCD data, they expanded 13.8 per cent in July, compared with 12.6 per cent by Indian companies.

The newfound optimism runs counter to the wide scepticism revolving around the much debated intellectual property laws and a looming uncertainty over clinical trial regulations and drug pricing policies in India. VK Subburaj, secretary to the Department of Pharmaceuticals, last week told reporters that a committee was still deliberating on a framework for pricing of patented drugs. A change in prioritising a commercial revamp is in the air. Swiss drug maker Novartis that witnessed drawn-out

patent related litigations in India — first oncancer drug Gleevec and more recently on respiratory treatment Onbrez has launched Sequadra, an advanced treatment for patients with chronic respiratory issues.

"India is both a challenging and an exciting market," said Jawed Zia, country president at Novartis India. "Novartis has a rich pipeline in respiratory, dermatology, cardiovascular and retina. India participates in the extensive clinical trials associated with this pipeline ... Novartis is committed to bringing the latest therapies to India soon after their global launch to the long term benefit of the patient," he said.

Kevin Ali, the emerging markets head of Merck & Co, recently highlighted the increasing importance of India in the US company's plans. "We would like to see a day when we would like to involve more scientists in clinical trial, get more products registered and bring more medicines from our pipeline to India," Ali said in an interview to ET.

Cochin International Airport becomes

world's first to operate on solar power

Source: The Economic Times, 18 Aug, 2015

The Cochin International Airport became the first in the world to operate completely on solar power. With this, the airport will have 50000 to 60000 units of electricity per day to be consumed for all its operational functions, which technically makes the airport 'absolutely power neutral,' Cochin International Airport Limited (CIAL) said in a release, adding, it is the first airport in the world to operate completely on solar power. CIAL had ventured into the Solar PV sector during March 2013, by installing a 100 kWp solar PV Plant on the roof top of the Arrival Terminal Block. This was a trendsetter in the field of grid-connected solar PV in Kerala.

The plant was installed by the Kolkata-based Vikram Solar Pvt. Ltd.

A total of 400 polycrystalline modules of 250Wp with five numbers of 20kW capacity 'Refu-sol make string inverters' were used in this plant. It is a grid connected system without any battery storage.

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After the successful commissioning of this plant, CIAL installed a 1 MWp solar PV power plant partly on the roof top and partly on the ground in the Aircraft Maintenance Hangar facility within the airport premises.

This plant was installed by Emvee Photovoltaic Power Pvt. Ltd. 4000 monocrystalline modules of 250Wp with 33 numbers of 30kW capacity Delta make string inverters were used in this plant, which is the first Megawatt scale installation of solar PV system in Kerala, the release said.

Both these plants are equipped with a SCADA system, through which remote monitoring is carried out.

After commissioning, these plants have so far saved more than 550MT of CO2 emission contributing to the efforts of CIAL towards minimising environmental degradation, CIAL said.

Over the next 25 years, this green power project will avoid carbon dioxide emissions from coal fired power plants by more than three lakh tons, which is equivalent to planting 30 lakh trees or not driving 750 million miles.

This installation is expected to generate around 48,000 units per day, which along with the electricity generated from the existing 1.10 MWp plants, would be sufficient to meet the power requirement of the Airport. Kerala Chief Minister Oommen Chandy inaugurated the 12 MWp solar power plant, comprising 46,150 solar panels laid across 45 acres near the cargo complex, at a function at the airport this morning.

Arun Jaitley launches India Aspiration Fund to boost startups in India

Source: The Economic Times, 19 Aug, 2015

Finance Minister Arun Jaitley on Tuesday launched the India Aspiration Fund (IAF) to be set up as a fund of funds under the Small Industries Development Bank of India (SIDBI) in order to boost the startup ecosystem in the country. An initial corpus of Rs 400 crore has been already allocated to various venture funds under it, official sources close to the development told ET. The fund has committed up to Rs 60 crore in IvyCap Ventures, up to Rs 30 crore for Blume Ventures and up to Rs 20 crore for

Carpediem Capital Partners, sources told ET.

In February, this year, ET had reported about the government's intention to launch a Rs 2,000-crore fund of funds to be managed by SIDBI. India's largest insurance company LIC will be a coinvestor in the IAF. "India is witnessing a startup revolution and to harness the potential of India's innovators and entrepreneurs a vibrant financial ecosystem is essential. IAF will play a vital role in this financial ecosystem," said Arun Jaitley while addressing a function in Mumbai.

The IAF will be managed by an investment committee with veterans such as Harkesh Mittal, Secretary, Technology Development Board, Manipal Global Education Chairman TV Mohandas Pai, Info Edge founder Sanjeev Bhikchandani, former Nasscom chairmanKiran Karnik and Indian Angel Network cofounder Saurabh Srivastava. "This is a very well structured fund and since it's built on sectoral allocation, it will provide investment to startups in sectors which are not hot today for venture funds but will become hot in future,"

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said Sharad Sharma, cofounder of iSPIRT. Finance Minister Jaitley also launched a new scheme called SIDBI Make in India Loan for Small Enterprises (SMILE) with an allocation of Rs 10,000 crore.

"The Fund is expected to catalyse tens of thousands of crore of equity investment in startups and MSMEs, creating employment for lakhs of people over the next 4-5 years," Jaitley added.

The objective of SMILE scheme will be to provide soft loans in the nature of quasi-equity and term loans on relatively soft terms to MSMEs. The loan scheme's focus will be on 25 sectors under government's 'Make in India' programme with emphasis on financing smaller enterprises within the MSME sector.

"India is expected to surpass the UK in terms of number of startups launched and would be behind only to the US. There is need for more funds that focus on startups and growth stage MSMEs," said Minister of State for Finance Jayant Sinha.

Government seeks comments on reframing National Biofuel Policy

Source: The Economic Times, 19 August, 2015.

The government has sought public comments on proposed changes in the National Policy on Biofuels that seeks allowing producers directly sell fuel to consumers especially bulk customers like railways.

"Ministry of New and Renewable Energy invites Feedback/Views/Comments on National Policy on Biofuels in respect of the changed overall outlook of the biofuel programme," a public notice of the m According to the notice, the feedback may be sent by September 20 at biofuels.mnre@gov.in.

The national policy on biofuels stipulates that the responsibility of storage, distribution and marketing of biofuels would rest with oil marketing companies. Besides, the policy states that the export of biofuels would only be permitted after meeting the domestic requirements.

The Motor spirit and High Speed Diesel Control Order also stipulates that no person other than dealer or the oil company shall engage in the business of selling these products.

Thus, the change in government policy on biofuel is required in the present context to allow manufactures to sell the fuel directly to consumers in a free market economy.

Last year, Power, Coal, New & Renewable Energy Minister Piyush Goyal had told Lok Sabha in written reply,"a proposal is under consideration to amend the provisions of National Policy on Biofuels and the Motor spirit and High Speed Diesel Control Order to facilitate sale of biodiesel by its manufacturers to the bulk consumers like railways."

He had also said that "a bulk of biodiesel produced in the country is exported". Ministry said.

RBI gives in-principle nod to 11 applicants including RIL, Aditya Birla Nuvo & Airtel for payments bank licence

Source: The Economic Times of India, 20 August 2015.

Reliance Industries, India Post, Bharti Airtel, Vodafone and Paytm are among 11 applicants that have got 'in principle' approval for setting up payments banks that will provide barebones facilities aimed at covering the vast swathe of population that has no access to financial services.

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They will take deposits, convey remittances and dispense payments to recipients, making them ideal for migrant workers who need to send money home, for instance. They will not engage in lending. Apart from India's top phone companies and the post office, others that have got initial Reserve Bank of India approval out of 42 applicants include Sun Pharma founder Dilip Shanghvi, Aditya Birla Nuvo, Fino PayTech, Tech Mahindra, National Securities Depository and Cholamandalam Finance.

Applicants that sought licences have tied up with a range of partners. "The applications were screened for financial soundness, i.e., five-year track record of the promoter and the key entities of the promoter group," RBI said in a statement. "The assessment also included governance issues with a focus on 'fit and proper' criteria for promoters based on due diligence reports and/or any other information indicating deliberate and repeated violations of law/regulations."

Those that didn't make the cut include Muthoot Finance, Future Retail's Kishore Biyani and Videocon. The central bank chose the applicants

based on their assessed ability to reach customers with technology along with the financial strength to roll out services in areas that remain uncovered, RBI said.

The central bank kept the hopes of many applicants alive by promising to move to a process of "on-tap" licensing. This means applicants can seek licences whenever they want to do so. "We will do every justice to this opportunity," said Paytm founder Vijay Shekhar Sharma. "Led by technology and a lean structure at Paytm, we will bring half-a-billion Indians to the mainstream economy by 2020.

IndiGo, Tata Motors locked in court battle over trademark

Source: The Times of India, 22 August 2015.

Even as the owner of India's biggest and most profitable carrier IndiGo readies to launch its initial public offering (IPO) on Dalal Street, the Gurgaon-based airline is embroiled in a trademark dispute over its name with Tata Motors, which sells its flagship sedans under the same brand. The airline's parent Interglobe Aviation faces an ownership title risk as

Tata Motors has claimed that the carrier's use of the IndiGo name is an infringement of its trademark. India's biggest automaker by revenue forayed into sedans under the Indigo brand in 2002 while Interglobe commenced operations in August 2006. Tata Motors issued notices on the Indigo name infringement in 2005 but Interglobe subsequently registered the trademark. The matter is currently pending in the court with Tata Motors opposing Interglobe's four trade names — IndiGo, IndiGo Airways, IndiGo Airlines, and IndiGo Air. An Interglobe spokesperson refused to comment citing Sebi's pre-IPO publicity guidelines. The company in its IPO prospectus states that in the event of a failure to register the trademarks, its business may be adversely impacted. Interestingly, IndiGo is a rival to Tata Motors' sister companies — Tata Singapore Airlines (operator of Vistara) and AirAsia India — which are trying to make a mark in the highly competitive skies. From a single aircraft, Interglobe, founded by travel entrepreneur Rahul Bhatia and former US

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Airways chief executive Rakesh Gangwal, had a fleet of 96 aircraft as of April 30, 2015. Its upcoming IPO, expected to value IndiGo airline at $4 billion, is more than five times the current market capitalization of its closest rival, Jet Airways. Tata Motors' sales of Indigo, which is derived from 'India on the go', have been on a decline with the latest figures showing a 28% dip on a month-on-month basis. In the past too, different companies have used similar names to sell their wares. For instance, Gujarat Cooperative Milk Marketing Federation sells its dairy under the Amul brand while JG Hosiery markets Amul innerwear, which is among the top three brands in its category. "The legal loophole available to most imitators is that a trademark ownership is only valid per category. So if a new firm wants to lift your name in a totally unrelated category in which you are not registered, it does not constitute infringement," said Ramesh Jude Thomas, president, Equitor, a brand consultancy firm.

FDI reporting module to promote ease of doing business: RBI

Source: The Economic Times, 24 August, 2015

Reserve Bank said the launch of a module for reporting Foreign Currency Transfer of Shares (FCTRS) is a step forward in the direction of promoting ease of doing business in India.

RBI, last week had launched a module for reporting Foreign Currency Transfer of Shares (FCTRS) on eBiz portal of the Ministry of Commerce & Industry.

"This initiative is a step forward in the direction of promoting the ease of doing business in India," it said in a statement.

The FCTRS service on eBiz portal will facilitate reporting of transactions relating to transfer of shares and other instruments of foreign direct investments ( FDI) between a resident and a non-resident, currently being done in FCTRS form.

The online reporting facility on eBiz portal of the Ministry will be available in parallel with the physical filing of returns.

Physical filing of returns will be discontinued in

next three months, RBI said.

'Rs 400 crore project to boost waterways; 7 major ports to be set up'

Source: The Economic Times, 24 August, 2015.

To boost waterways, the government has prepared a Rs 400 crore project under which the centre will provide subsidy of 50 per cent to states to build floating jetties, Road Transport and Highways Minister Nitin Gadkari said.

Also, the government has decided to open up seven new major ports in the country, Gadkari said after chairing the sixteenth meeting of Maritime State Development Council (MSDC) at Dona Paula near Panaji in Goa.

"The government has prepared a new scheme worth Rs 400 crore to boost inland waterways. Under the scheme the Government of India will give 50 per cent subsidy to states to erect floating jetties while 50 per cent of the cost will have to be borne by the states," an official statement issued here said quoting the Minister.

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The scheme has been sent to the cabinet for its approval, the statement added.

For passenger jetties this subsidy will be Rs 10 crores while for container/goods jetties, it will be restricted to Rs 25 crore, he said.

The government will open a sub centre of Maritime University at Ratnagiri in Maharashtra to cater to Goa, Gujarat and Maharashtra, for which JSW has already allotted 200 acres of land.

"In view of the world's requirement of manpower in Maritime Industry by 2020 Maritime Industry will provide jobs to over 6.5 crore skilled labourers all over the world," the Minister said as per the statement.

He said the government will provide a financial assistance of Rs 50 crore for all types of training in Maritime Industry.

The Minister also added that the government contemplates to increase the source of cargo to 15.8 per cent per annum by 2020 in the coastal states.

"The Union Government has decided to open up 7 new major ports in addition to 12 existing major ports, out of which

one will be based in West Bengal namely Sagar port and the other will be in Dahanu in Maharashtra to be opened up jointly for Maharashtra and Kerala.... The work on these two projects have already begun," he said.

Gadkari also released a vision document after the meeting.

Releasing the vision document the Minister said in order to increase the share of coastal shipping in modal cargo mix to 10 per cent by 2019-20 and to promote cruise tourism leading to development of coastal regions, the Ministry has prepared a vision for coastal shipping, tourism and regional development in consultation with stakeholders along with an action plan to achieve the objectives.

The Minister expressed confidence that in the next five years the share of coastal shipping in transportation of domestic trade will increase.

Rs 90k crore investment proposals for electronics manufacturing

Source: The Economic Times, 24 August, 2015.

The government has received investment proposals totalling Rs 90,000 crore in the last two months for electronics manufacturing in the country, with significant interest in making mobile phones by local and foreign firms.

"About Rs 90,000 crore worth of proposals were received in the last two months. There is hardly any company which has not shown interest to manufacture in India," said Ajay Kumar, Additional Secretary in Ministry of Communications and IT. India is already the fastest-growing smartphone market and is now becoming the fastest growing manufacturing destination of phones, Kumar said.

Proposals worth about Rs 1.10 lakh crore have been received in the last 12 months from various companies for electronics manufacturing in the country under the Modified Special Incentive Package Scheme (MSIPS). Of this, over 80% have materialised in the last two months itself.

"There is a significant interest in mobile phones. Now we are seeing a lot of players are coming in from Indian companies, which

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were till now importing, as well as foreign firms. We are seeing that they are increasing their presence and starting to manufacture here," Kumar said.

He named global players like Airbus, Phillips, Thomson, Samsung, LG and Flextronics among those having shown interest to start manufacturing.

According to CyberMedia Research, 24.8% of smartphones shipped in the country during April-June quarter of 2015 were made locally, up from 19.9% in the preceding quarter. The government has been pushing to promote manufacturing in the country, especially electronics.

While players like Samsung, Micromax and Spice have been assembling handsets in India, firms like HTC, Asus and Gionee have also evinced interest in setting up their manufacturing base here. In the past few weeks, Xiaomi and Motorola, along with Lenovo, have commenced assembling smartphones in the country through contract manufacturing by Foxconn and Flextronics, respectively.

According to the Department of Elec-tronics and IT, demand for electronics in India is expected to reach $400 billion by 2020, while the sector has potential to attract $100 billion investment and provide jobs to 28 million people.

The government last month extended the MSIPS policy by five years to boost electronics manufacturing.

Indian nutraceuticals industry to touch $6.1 bn by 2020

Source: Business Standard, 25 August, 2015.

Rising awareness about health & fitness and changing lifestyle are driving the Indian nutraceuticals market, which is likely to cross $ 6.1 billion by 2020 from the current level of $ 2.8 billion growing at compound annual growth rate (CAGR) of about 17 percent, according to a new study jointly conducted by Assocham and RNCOS, a market research firm.

While penetration of nutraceuticals in urban India is around 22 percent, in rural it is as low as 6 percent due to lack of awareness. “For faster growth of the domestic market, both private

players and government should create awareness about the health benefits of nutraceuticals among masses through campaigns, social media and television. All products, before reaching the market should go through rigorous testing and it should not be compromised at any cost. An exponential growth has been noticed the number of food testing labs in India,” said the report.

At present, India does not have any kind of regulatory guidelines for the approval or monitoring of the products under this segment. In the absence of regulations, the products take much longer to reach the market. For industry growth, it is utmost necessary to give faster approvals for eligible nutraceuticals, noted D S Rawat, secretary general, ASSOCHAM.

“FSSAI should come up with properly framed guidelines related to manufacturing, storage, packaging & labelling, distribution, sales, claims and imports. This will bring clarity to the industry stakeholders and they can invest into the industry with no fear of counterfeiting,” said Rawat.

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The study has also suggested that the government should provide special incentives and subsidies to emerging companies for the growth of the industry. The funding will help companies to use improved process technology and come up with quality nutraceuticals.

“Financial support will also help Indian talent to innovate cost effective nutraceuticals. The products available in the market are majorly targeted to upper-middle class leaving a vast potential. To catch the masses, nutraceuticals for all should be the target concept,” added the report.

Although the Indian nutraceuticals market is growing is at rapid pace, it only accounts for around 1.5 percent of the global market, which is expected to cross $ 262.9 billion by 2020 from the current level of $ 182.6 billion growing at compound annual growth rate (CAGR) of about 8 percent, noted the ASSOCHAM-RNCOS study.

US has the largest market for nutraceuticals, followed by Asia-Pacific and European Union. Functional food is the fastest growing segment in

the US nutraceuticals market. Germany, France, UK and Italy are the major markets in the European Union for nutraceuticals. Japan (14 percent) is the major consumer of nutraceuticals in Asia-Pacific, followed by China (10 percent).

Investment Board Clears 16 FDI Proposals Worth Rs 1,153 Cr

Source: NDTV Profit, 25 August, 2015.

The Foreign Investment Promotion Board (FIPB) on Tuesday cleared 16 FDI proposals amounting to Rs 1,152.53 crore, including those of Edelweiss Tokio Life Insurance, Encore Asset Reconstruction Company and News Laundry Media Pvt Ltd.

"Based on the recommendations of Foreign Investment Promotion Board (FIPB)... government has approved 16 proposals of foreign direct investment amounting to Rs 1,152.53 crore approximately," an official release said.

Meanwhile, FDI proposal of Cadila Healthcare of Rs 5,000 crore has been recommended for consideration of the Cabinet Committee on

Economic Affairs (CCEA), it said.

Cadila Healthcare is seeking approval for fresh equity infusion of up to Rs 5,000 crore under foreign direct investment route by QIBs (qualified institutional buyers) through QIP on a private placement basis for expansion of business.

Among others, the FIPB approved proposal of Edelweiss Tokio Life Insurance Co Ltd to increase foreign equity from 26 per cent to 49 per cent of its paid-up capital.

"It is proposed that Tokio Marine & Nichido Fire Insurance Co Ltd, Japan will invest a sum of not exceeding Rs 5,400 million," it said.

The FDI proposal of Tata Global Beverages Ltd was also cleared for issuing shares to foreign collaborators of Mount Everest Mineral Water Ltd, a subsidiary of TGBL, pursuant to merger of the two companies.

Among others, government gave nod to News Laundry Media Pvt Ltd for raising its foreign equity from 6.25 per cent to 18.64 per cent.

Besides, proposals of Arkadin ConferIndia Pvt

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Ltd, Zone Startup (India) Advisory Pvt Ltd, HSS BIM Solutions, Cogniphi Technologies, Move.in Pvt Ltd ( Singapore), Logbase Inc, and Celon Laboratories, were also cleared.

The investment board also cleared the FDI proposals of Elanco India Pvt Ltd, Kinedex Healthcare Pvt Ltd, Windlas Biotech, Cairnhill CIPEF Ltd and Cairnhill CGPE and that of Akumentis Healthcare Ltd.

Other 11 proposals, including those of Apollo Hospitals Enterprise, Aegon Religare Life Insurance, Almondz Insurance Brokers, Indian Herbs Specialties, IIFL Holdings and BTI Payments, were recommended for deferment.

Also, a similar number of proposals was rejected.

Among the rejected proposals were Bloomberg Data Services India Pvt Ltd, Taurus Ventures Ltd, Architects 49 Ltd, Afro Asia Equipments Pvt Ltd and Dhanvantari Technologies.

Xenia Healing Centre LLP, however, withdrew its proposal that sought to accept $1.5 million from Alpha Healing Center LLC for a 96 per cent share.

The proposal of INNO Instrument India Pvt Ltd does not lie before the FIPB, the release added.

Make in India: IFFCO launches joint venture with Mitsubishi Corp for manufacturing agrochemicals

Source: The Times of India, 26 August 2015.

Fertilizer cooperative IFFCO on Wednesday formally launched a joint venture with Japanese firm Mitsubishi Corp for manufacturing agrochemicals in India that will start operation in this rabi season starting October. IFFCO holds 51% stake and the rest is held by Mitsubishi in the joint venture IFFCO-MC Crop Science Private Ltd. The shareholding pact was signed last month. "The company was formally launched today...The operations of this new JV will start from this rabi season. IFFCO-MC will come up with 20 different products across various product range of agrochemicals," IFFCO said. IFFCO said it is looking forward to have its own production units in India as a long term goal. In a statement, the

cooperative said that the logo of the JV firm was exchanged between IFFCO chairman Balvinder Singh Nakai and Mitsubishi Corporation India chairman and managing director Masakazu Sakakida. Speaking on the development, IFFCO chairman said, "We were getting continuous demand from farmers across the country to make available good quality insecticides, fungicides and weedicides apart from quality fertilisers, which IFFCO is supplying through cooperative societies." IFFCO managing director and CEO US Awasthi said, "With this foray into agrochemical business, IFFCO wishes to fulfil its commitment towards farming community and will enlarge its services specially to them and agricultural sector."

Developers allowed to divest 100% equity in road projects

Source: The Economic Times, 26 August, 2015.

The government allowed developers to divest 100 per cent equity in projects two years after the completion of such schemes, a move that can

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unlock investments worth about Rs 4,500 crore in the sector.

The decision is aimed at fast-tracking contracts and implementation of highway projects in the country by making additional funds available for investment in projects.

"The Cabinet Committee on Economic Affairs, chaired by Prime Minister Narendra Modi, has amended its earlier approval dated May 13 for permitting 100 per cent equity divestment after two years of construction/completion for all BOT projects, irrespective of year of award," an official statement said after the meeting.

The approval would allow the highway developers to use proceeds from the sale of divested equity in incomplete projects of NHAI or any other road projects besides any power sector projects or to retire their debt to financial institutions in any other infrastructure works, the statement said.

"This will result in physical completion of languishing infrastructure projects. This in turn will bring relief to citizens /travellers in the concerned area," it said.

It added that consequently, it will facilitate uplifting socio-economic condition of the entire nation due to increased connectivity across the length and breadth of the country. This will also lead to enhanced economic activity.

There are 80 such Build, Operate and Transfer (BOT) projects awarded prior to 2009 that have been completed and the locked in equity in these projects works out to approximately Rs 4,500 crore, an official said.

Once this amount is unlocked and re-invested in new projects, it could support 1500 kms of new highways on PPP mode reviving the response to BOT projects.

In May, the CCEA had approved this comprehensive "exit policy" and as per information the PMO had asked the Road Transport and Highways Ministry to work out a modality in which developers are encouraged to plough back the funds through divestment of equity in projects.

During the last few years, public-private partnership (PPP) projects have not been able to attract bids; one of the primary reasons

being lack of availability of equity in the market among qualified bidders.

This move will help unlock equity from completed projects making it potentially available for investment into new projects, said the statement.

The CCEA in May had approved the proposal "to make applicable...the provision of Model Concession Agreement (MCA) pertaining to the exit option for selected bidder/consortium members together with its/their associates...to all BOT (Toll) and BOT (Annuity) projects awarded till September 30, 2009, with the modification that the equity so divested, be invested by the promoter(s), in their incomplete NHAI projects," the statement said.

Govt shortlists 98 smart city aspirants for second stage

Source: Business Line, 27 August, 2015.

The Centre on Thursday released the list of 98 cities that will now compete for the second stage of the smart cities challenge to secure funding from the Centre. Uttar Pradesh and

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Tamil Nadu have bagged the lion’s share with 12 cities each, followed by Maharashtra with 10.

Of the 98, 24 are capital cities, 24 business and industrial centres, 18 of cultural and tourism importance, five port cities, and three are education and healthcare hubs, Minister for Urban Development M Venkaiah Naidu said at a press conference here. “Capital cities Itanagar, Patna, Shimla, Bengaluru, Daman, Thiruvananthapuram, Puducherry, Gangtok, and Kolkata could not be nominated,” Naidu added.

The Centre had allotted each State a specific number of city slots. These 98 aspirants have been chosen by States/Union Territories through an intra-State competition based on existing service levels, financial and institutional capacities and past track record and reforms.

Among the 98 cities, 90 have also already been selected for another flagship scheme — Atal Mission for Rejuvenation and Urban Transformation.

In the next few days, the government will release ₹2 crore for each of these 98

cities for preparation of smart city proposals to compete in the second stage.

“Proposals will be judged by the Centre on credibility of implementation, city vision and strategy, economic and environmental impacts, cost effectiveness, innovation and scalability and processes followed, including citizen implementation,” Naidu said.

Top 20 scoring cities in the first round of the second stage will be chosen by December and ₹200 crore per city will be provided by Centre in the first year, followed by ₹100 crore each year for the next three years. “The remaining cities will be asked to address deficiencies before participating in second and third rounds of the challenge,” the Minister said.

The Centre had in April approved an outlay of ₹48,000 crore for the mission.

States undertake reforms to score high on business index

Source: The Economic Times, 28 August, 2015.

An electricity connection within days of applying, online submission of luxury tax, a similar process to renew boiler licences, mobile apps for paying bills— those are just some of the ways in which states are trying to outdo each other as they woo investors. And Maharashtra seems to be clearly in the lead.

States have been trying to ring in reforms rapidly after the Union government decided to rank them in ease of doing business.

An early list compiled by the Department of Industrial Policy and Promotion (DIPP) shows substantial progress, led by Maharashtra.

The government plans to launch the index next week based on 98 parameters and extensive cross-checking of steps taken by states on the ground. This also fits in with the objective of the Narendra Modi administration to improve India's overall ranking in this respect from 142 to the top 30 as it seeks to attract investors, create jobs and lift growth.

States are competing with each other in showering

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attention on big foreign companies such as Foxconn, the world's biggest contract manufacturer of phones and other devices, which have shown interest in setting up plants in India. This chimes with Prime Minister Modi's Make in India programme, which looks to turn the country into a manufacturing hub similar to China.

To be sure, that country's export-led model is currently under a shadow. Maharashtra has undertaken the most reform measures. It has started geographic information system (GIS) mapping of land banks, slashed the time taken to get an electricity connection to 15 days from 67 and reduced the number of total procedures to three from seven, according to the list reviewed by ET. The state is also launching mobile apps services for paying water bills and property tax, renewal of licences under the Shops and Establishments Act and complaint management.

Maharashtra leads other states by a big margin in terms of total foreign investment drawn, accounting for 29% of flows since April 2000. While Maharashtra and Kerala have allowed self-

certification for a number of labour laws, Uttar Pradesh has hastened the submission of reports under various labour acts to within 72 hours of inspections. Andhra Pradesh has set up a system for the random allocation of inspectors and computerized risk assessment based inspections under various labour laws.

"States are trying to welcome as much investment as they can, which will happen only when conditions are easy," said Madan Sabnavis, chief economist, CARE Ratings. "While steps have been taken on the administrative side state governments have to provide for physical infrastructure like land, connectivity to attract business."

Most states are going digital to reduce paperwork involved in various procedures. Andhra Pradesh has started a single-window system using an IT-enabled platform to provide all clearances for setting up an industrial operation within 21 days.

Gujarat has an online system for environment and pollution-related approval besides luxury and entertainment tax.

Rajasthan and Tamil Nadu have also put in place an online consent management system. Karnataka has also sought to achieve this--no need for any physical touch point--through its eKarmika portal for all services under the Shops and Establishments Act.

Kerala has implemented an online consent management system for various pollution and environment-related clearances and certificates. Madhya Pradesh has put in place an automated building plan approval system.

CCI promises easy M&A approval process for companies

Source: The Economic Times, 30 August, 2015.

Promising an easy and fast-track approval process for merger and acquisitions, fair trade regulator CCI has said the new application forms for such clearances ensure valid and complete filings by the companies.

With concerns having been raised in some quarters that the new forms could make the filings cumbersome for the companies, the Competition Commission of India (CCI) Chairman

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Ashok Chawla said the regulator will not be looking at invalidating "every filing".

Mergers and Acquisitions (M&As) beyond a certain threshold require approval from the Commission, which keeps a tab on anti-competitive practices at the market place. The regulator recently made changes to the Form I that needs to be submitted by the entities seeking nod for M&As.

When asked whether the regulator would have a relook at the revised form, Chawla said he does not think it is necessary as of now.

"Let us see how it operates and how many cases are actually invalidated, which really cause concerns for those who are filing with us. Then, we will see whether we need to change our approach or they need to change the way in which the filings are made.

"At the moment, we don't see there is need for any change. We are always open to making necessary changes as and when the need arises," Chawla told PTI in an interview.

While there is now a provision to reject an incomplete application, Chawla said there are also

a number of simplifications that have been done.

"Our objective is not to invalidate every filing. The end objective is to inculcate in them the spirit of filing something which is both valid and complete... I don't think the industry really needs to have exaggerated fears on this count," the CCI Chairman said.

Stating that the Form I has been made little more comprehensive, he said now companies are required to give sufficient information in the first instance itself.

Earlier, the form was very bare and very simple and almost containing no material details, he added.

"Now, Form I has been made little more comprehensive so that in the first instance (itself) the necessary and perhaps sufficient information (is given) for us to make a decision so that we don't really waste anybody's time and we don't stretch the process of examination needlessly long," he noted.

In recent times, there has also been a rise in the number of applications received by CCI seeking approval for M&As.

Citing an example of simplified requirement, he said that persons who can sign on the form on behalf of foreign companies have been left to the entities' discretion.

"It is a mixture of ease from their point of view and also ease from the point of view from the regulator and its staff who have to look at the application," he noted.

India to remain fastest growing major economy for second straight quarter

Source: The Economic Times, 31 August, 2015.

For investors worried about the health of emerging economies, India's gross domestic product data for April-June should supply some cheer on Monday - the country is expected to remain the fastest growing major economy for a second straight quarter.

The median estimate from a Reuters poll of economists put GDP annual growth at 7.4 percent in the quarter, just below 7.5 percent in January-March.

But doubts persist over India's new way of calculating GDP, introduced early this year, even though the method

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gained an endorsement from the World Bank's chief economist. With the change method, India's growth topped that of China in the first quarter this year.

Still, India's robust headline growth does not square with the not-so-rosy ground reality.

"Growth momentum has improved in the last two years," said Kaushik Das, an economist with Deutsche Bank. "But the pace of recovery has been frustratingly slow."

Monday's data is expected to fuel hopes in New Delhi of taking the baton of global growth as China's economic slowdown deepens.

However, with an economy only one-fifth the size of China's, India is in no position to support the global economy as its northern neighbour has.

Blessed with a huge domestic market and a large cheap workforce, Asia's third-largest economy has an opportunity to get more investment.

Lured by its prospects, iPhone maker Foxconn this month announced a $5 billion investment in India.

The announcement came days after Sony Corp. shipped its first made-in-India television sets, and General Motorsunveiled a plan to spend $1 billion to expand its main plant.

"It is India's moment," Jayant Sinha said.

But very few believe it can seize the moment without making land, labour, bank and tax reforms.

Modi swept to power in last year's general election on a promise of speedier growth creating millions of manufacturing jobs.

But just 15 months after that electoral triumph, disenchantment has set in. Businesses are getting restless with slow progress in removing the hurdles that have stymied growth.

Political acrimony, meanwhile, has left parliament paralysed. The last session ended without passage of a single reform legislation.

Shilan Shah, India economist at Capital Economics, described the washout session as a "missed opportunity".

Yet India is on mend. Robust growth in indirect tax receipts points to a nascent revival in manufacturing sector.

Foreign direct investments are up 30 percent from a year earlier.

However, the improvement in the economy is in large measure due to a crash in global commodity prices, which has cooled inflation and helped narrow the fiscal and current account deficits.

Sure, urban consumption demand is picking up, but rural consumers remain glum. With capacity utilisation rates showing no signs of improvement, firms are not in a hurry to invest in new plants and machinery.

Festering problem of bad loans, meanwhile, has impeded credit flow and delayed full transmission of interest rate cuts. The Reserve Bank of India has cut the policy repo rate by 75 basis points since January, but banks, in response, have lowered lending rates by just 30 basis points.