wi vdma indienreport0114

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VDMA-Newsletter ―Indien‖, Ausgabe 01/2014

Kontakt: Oliver Wack, Telefon: +49 69 6603-1444

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INDIA

Contact:

Rajesh Nath, Managing Director

Jamly John, Regional Manager - West

Telephone: +91 33 2321 7391

Fax: +91 33 2321 7073

E-mail: [email protected]

The Economic Scenario

Economic Growth Corporate decision-makers are responding to signs of economic improvement across Europe, shifting the focus away from pure cost management to future growth opportunities, with an increased appetite for global expansion into Indian markets. When asked to identify where they intended to expand their operations, about 48% named India, compared to 24% in 2012-13 and 42% preferred China, down from 60% in the same year as per a recent survey. Rapid population and economic growth, coupled with increasing transparency and improving infrastructure, is removing many of the traditional barriers to entry into the India market.

As the economic outlook improves, multinational companies are demonstrating an appetite for international expansion into new markets. This broad appetite for expansion sees India emerge as a destination of choice. The opportunities presented by rapid growth in India may now help overcome some of the longstanding barriers - governance, infrastructure, bureaucracy, and lack of transparency — that have inhibited inward investment.

India has already attracted a large number of occupiers from a range of sectors, including financial and business services, media, technology and telecommunications, and pharmaceuticals. This has been supported by a general process of deregulation and a range of specific Government initiatives designed to attract foreign investment, such as relaxation of rules on foreign ownership, streamlining of the development process, and promotion of high-tech growth industries.

Improved international and domestic infrastructure connections have supported growth in many cities, including Mumbai‘s financial cluster and the economic hub o f the Delhi National Capital Region. Growth in the technology sector has particularly contributed to this phenomenon.

1/2014

Please Note:

1 crore = 10 000 000

1 lakh = 100 000

1 Euro = Rs.75

Indian Economic and Industrial Scenario, January 2014 VDMA INDIA Office


Kontakt: Oliver Wack, Telefon: +49 69 66031444

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The European Union is confident of inking the long-pending free trade pact with India later this year as talks on most issues are "closed" except duty-related matters including on wine, automobiles and services sector. As per the EU Ambassador, the pact is likely to be signed after elections in India and for the European Parliament. Launched in June, 2007, the negotiations for the proposed Broad-based Trade and Investment Agreement (BTIA) between India and the 27-nation European bloc have witnessed many hurdles with both sides having major differences on crucial issues. Besides demanding significant duty cuts in automobiles, EU is also demanding tax reduction in wines and spirits and dairy products and a strong intellectual property regime. On the other hand, India is asking for granting data secure nation status to it by EU. The matter is crucial as it will have a bearing on Indian IT companies wanting market access. The EU was planning to wrap up negotiations for FTA with the US by this year which will have positive impact on its trade with India as well.

The Reserve Bank has doubled the sub-limit for investment in government securities to € 7.3 billion ($ 10 billion) by long-term investors like sovereign wealth funds and foreign central banks, with a view to attract more funds. However, the total limit of € 21.9 billion ($ 30 billion) available for foreign investments in government securities has not been tinkered with. Foreign institutional investors-- qualified foreign investors (QFIs) and long-term investors -- registered with SEBI are allowed to purchase government securities and non-convertible debentures (NCDs) or bonds issued by an Indian company within the limit of € 21.9 billion ($ 30 billion). The operational guidelines in this regard will be issued by SEBI. Half a year after India's worst economic crisis since 1991 reduced the rupee to record lows, a government in the last months of its life faces a new moment of truth as emerging markets again show signs of buckling. This time around countries such as Argentina, Brazil, South Africa and Turkey have been in the firing line. Investors are less downbeat over India, thanks to actions taken since its mauling by the markets last summer. From the financial perspective, a lot of adjustments that had to happen have been made, particularly the adjustments in the rupee and balance of payments making it feel a lot more comfortable with exposure in Indian bonds. The Indian bonds are now considered as one of having one of the biggest overweight positions in Asia.

Uncertainty still abounds over India on several scores, however, notably the outcome of a looming election and questions over whether monetary policy will give more priority to stifling inflation rather than bolstering economic growth. To batten down for the gathering storm in emerging markets and counter inflationary pressures, the Reserve Bank of India raised interest rates by a quarter percentage point, its third such move in five months. The calibrated response showed a steady hand, and stood in contrast to the dramatic increases in key interest rates announced overnight by Turkey to protect its crumbling lira currency. India, unlike Turkey, has slashed its current account deficit and built up currency reserves over recent months to protect itself from a repeat of last year's crisis, when the rupee was battered by a global sell-off, as investors fled economies with weak external balances. Then, as now, the markets turned on expectations of how fast the U.S. Federal Reserve will wind down easy money policies that had helped drag the U.S. economy out of recession and provided money to invest in high-yield emerging markets. Policymakers are confident that India can ride out the latest bout of global volatility, though foreign investors have sold heavily in the last few days. Other countries have suffered far more in the latest shake-out.

Since July, exports have risen substantially after two years of stagnation. The current account deficit was a whopping 4.9% in the first half of 2013-14, but rising exports and import compression (mainly through gold controls) slashed this to 1.2% of GDP in the third quarter. This may not be sustainable, but the annual deficit is now projected at around 2.5% of GDP, which is sustainable. Exports did not grow when the rupee fell from Rs 45 to Rs 55 to the dollar. But after the rupee fell further to Rs 62 per dollar, exports grew. This is an argument for the RBI to let the rupee to fall further, to maybe Rs 65 per dollar by the end of 2014. This would reflect the continuing inflation differential between India and other countries.




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Industry Scenario

Steel

Mahindra Auto Steel to set up a € 17.52 million ($24million) facility near Pune Mahindra Auto Steel, a joint venture between Mahindra Intertrade, China Steel Global Trading Corporation, Taiwan and Mitsui & Co. (Asia Pacific) Pte,Singapore, held the ceremony at its steel service centre at MIDC's Chakan Industrial Area, Phase II, near Pune. To be set up at a cost of at € 17.52 billion ($24 million) (Rs 150 crore) over 10 acres of land, the facility will have an annual processing capacity of 1,30,000 tonnes. It is expected to be functional by the fourth quarter of FY15. While Mahindra Intertrade holds a 51% share in the joint venture, the other two partners hold 24.5% each. This marks the next step in the journey of Mahindra Auto Steel which will offer the full range of services from sourcing to customised JIT delivery solutions as one of the few merchant producers of steel blanks and profiles in the country. The expertise of their partners, China Steel Global and Mitsui, will help the JV redefine the supply chain model in the region. This is Mahindra's seventh steel processing facility and the third in the Pune region. The raw stock for the facility would be imported from China Steel Global, Taiwan as well as sourced locally. The steel service centre will offer automotive customers in the Pune region an entire bouquet of end-to-end services such as sourcing, warehousing, yield optimisation, forex risk management and SKU-wise delivery and products

SAIL plans € 8000 million (Rs 60,000) crore expansion in Bokaro in second phase Months ahead of completing Bokaro plant's capacity addition to 5.7 million tonnes (MT), Steel Authority of India Ltd (SAIL) plans to raise it further by another 10 MTPA with an investment of € 8000 million (Rs 60,000 crore) in the second phase. The investment, which is excluding the ongoing Rs 6,000- crore outlay for the Bokaro plant, would be the highest among five integrated steel mills where the company plans expansions in order to take overall capacity to 50 MTPA by 2025.

SAIL has around 14 MTPA hot metal capacity now. With the current phase of ongoing expansion at a cost of € 9600 million (Rs 72,000 crore), this would go up to 24 MTPA. The additional 26 MTPA capacity creation to meet the target of 50 MTPA by 2025 needs Rs 1.7 lakh crore investment in the second phase. SAIL's plan to ramp up capacity to 50 MTPA is in line with the Government's vision to augment domestic crude steel production capacity from 90 MTPA to 300 MTPA by 2025. The planned € 0.73 trillion ($ 1 trillion) investment in infrastructure sector during the 12th Plan Period was expected to be a big catalyst for growth in the steel sector.

Posco steel plant in Odisha to be operational in few weeks The much-delayed € 8.76 billion ($12 billion) Posco steel project in Odisha is set to be operational in the next few weeks and granting of mining concession to the South Korean firm was in an advanced stage of processing as per the Indian Prime Minister. The announcement was made after holding extensive talks with President of South Korea. The large-scale POSCO steel project in Odisha is set to be operational in the coming weeks, following the revalidation of its environmental clearance. Grant of mining concession for the project is also at an advanced stage of processing.




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The Posco project, the biggest foreign direct investment ( FDI) to India, was marred in

controversies and issues like land acquisition and delay in clearances since its announcement

in 2005. The government recently granted the steel project the much awaited environment

clearance with conditions, ending eight years of wait. The conditions include Posco spending

5% of its investments € 438 million ($600 million) on "enterprise social commitments" and

delinking the steel project from the plans to have a captive port. The company had originally

announced to construct a mega steel plant of 12 million tonnes per annum capacity, has now

divided it into 3 equal phases of 4 MTPA each due to land acquisition issues and delays in

approvals.

SAIL gets forest clearance to start € 627 million (Rs 4,700 crore) Gua mine project The Forest Advisory Committee of Environment Ministry has accorded final approval for diversion of about 636 hectares of Saranda forest land for mining to steel maker SAIL, a development that will help the PSU to start its € 627 million (Rs 4,700-crore) Gua iron ore mine project. SAIL had approached the Ministry of Environment and Forest (MoEF) to secure forest clearance.It had received preliminary forest clearance for 274.691 hectares of Durgaiburu iron ore lease in August, 2012. The mine has remained closed since June 2011 in absence of environment and forest clearance, hitting the iron ore production of the state-run company. Mining at the Gua mines had stopped in June 2011 due to expiry of approvals. Later, in April 2013, it resumed after a temporary work permit was granted by MoEF. The Gua mine's expansion has been struck for quite some time for want of forest clearances though the mining and its expansion are crucial for SAIL's ongoing € 9467 million (Rs 71,000 crore) capacity expansion that would take its hot metal capacity to 23 million tonnes per annum (MTPA) from 14 MTPA now. Following the expansion of the current phase, SAIL's iron ore requirement will almost double to 39 MTPA and Gua mines alone are estimated to provide around 25 per cent of that need. SAIL plans to augment the capacity of the mine to 10 MTPA from existing 2.4 MTPA and set up a 12.5 MTPA beneficiation plant and 4 MTPA pellet plant with an investment of around € 627 million (Rs 4,700 crore). The mines, which supply ore to SAIL's steel plants in Burnpur and Durgapur (both in West Bengal), among others, were commissioned in 1958 and have estimated reserves of 142 million tonnes.

India remains world's 4th largest steel producer in 2013 India's position in world's steel production remained unchanged at the fourth slot in 2013 with an output of 81.2 million tonnes. This is despite India logging the second highest growth of 5.1% among the top five producers. There was no change in the order of top three steel producing nations with China, Japan and the US retaining their slots in the respective order in 2013, the World Steel Association (WSA) data revealed on Thursday. India was the fourth largest steel maker in the previous three years as well with a total output of 77.3 MT 2012, 73.6 MT in 2011 and 69 MT in 2010. It had clinched the third spot in 2009. World crude steel production reached 1,607 MT for 2013, up by 3.5% compared to 2012. The growth came mainly from Asia and the Middle East while crude steel production in all other regions decreased in 2013 compared to 2012. Recording a growth of 6%, Asia produced 1,081 MT steel in 2013. The region's share of world steel production increased slightly from 65.7% in 2012 to 67.3% in 2013. Country-wise, China produced 779 MT, an increase of 7.5 per cent over 2012. Its share in world crude steel production increased from 46.7% in 2012 to 48.5% in 2013. Japan produced 110.57 MT and South Korea 66 MT in 2013. The Middle East produced 26.3 MT steel, up by 6.8 per cent, over 24.7 MT production a year ago. The EU recorded a decrease of 1.8% compared to 2012, producing 165.6 MT of crude steel in 2013. The production in North America was 119.3 MT, a dip of 1.9%t. The US produced 87 MT, down by two per cent over 2012. CIS countries produced 109 MT steel during the year, down 1.8%. Russian production was at 69.4 MT, a decrease of 1.5% over 2012. South America's production was at 46 MT, down 0.8%.




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Automobile

Tata Opportunities Fund to invest € 43.8 million ($60 million) in Varroc group

Local private equity fund Tata Opportunities Fund will purchase a significant minority stake in Aurangabad-based auto component maker Varroc group for € 43.8 million ($60 million), or Rs 272 crore. India's third-largest auto components maker will use the money to build new products and to expand its presence in Europe and emerging markets. The company with sales of more than € 107 million (Rs 800 crore) is also looking at widening its customer base to Europe and other emerging markets.

Varroc had grown through acquisitions in the global market. In 2012, it acquired US-based Visteon Lighting for € 73 million ($100 million), helping it to ramp up its presence in Mexico and Chezch Republic. Private equity and strategic investors have started investing in auto component makers as slowing economy offer them cheaper assets. Low labour costs, availability of skilled labour and high quality products among Indian vendors have spurred the growth of auto component exports from India.

Dana sets up new India Technical Center in Pune Dana Holding Corporation has set up a new technical center in Pune which is the company's 13th facility in India. The Ohio, USA headquarted company supplies driveline, sealing, and thermal-management technologies to the auto sector. The Dana India Technical Center is a 90,000 sq ft facility which will be home to over 240 engineers and focus on providing world-class engineering capabilities to original-equipment manufacturers in the light-vehicle, commercial-vehicle, and off-highway markets in India and throughout the region. They consider India is a vital market that propels economic growth throughout the Asia Pacific region, and their investment in the country over the past half century demonstrates commitment to and confidence in the region. The Dana India Technical Center will offer customers unmatched local technical expertise and a direct connection to our industry-leading global engineering resources. The company's customers include Ashok Leyland, Force Motors, General Motors and Mahindra & Mahindra, among others. The India Center is fully integrated into Dana's global research and development system to support new products from concept development through launch, as well as to adapt technologies developed elsewhere in the world for the specific needs of the Indian market. This is one of three brand new research and development facilities for Dana. Last year the company opened a comprehensive technical center in Wuxi, China, and in May it plans to dedicate a technology center to develop continuously variable planetary (CVP) technology for use in light-vehicle and certain off-highway transmissions. In all, Dana will have 16 global technical centers operational by mid-year.

Auto makers like Ford, Renault turn to India for sourcing engines India, a major base for exporting small cars, is turning out to be a preferred hub for some global automakers to develop and source compact engines. Ford Motor, which exports its Figo small car and EcoSport compact sport-utility vehicle from India, plans to source a new generation of small-capacity petrol engines, called Dragon, from its local unit. Ford's Dragon range of engines is likely to be ready by 2016-17 and plans to produce 1.5 million units of the 1.2- and 1.5-litre engines a year globally. India would be the main supplier with 4 lakh engines a year, and Fords proposed plant in Gujarat (Sanand) would be the lead producer. Ford has an engine-production capacity of 3.4 lakh units in Chennai and it exports 40% of this output. Renault's research unit in Chennai is developing a 986 cc petrol engine, codenamed B4D, in




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collaboration with the French automakers facilities in Brazil and Europe. The B4D will be an enhanced version of a 0.8-litre engine that Renault would use in a car it plans to launch in 2015-16. While Ford plans to use India as a base for manufacturing the engines, its French rival is relying on the capability of its Indian research and development base. Both are trying to gain from India's low-budget capabilities. Automakers are looking at frugal technologies because of changing customer preference towards lower-priced vehicles. For these companies, leveraging the manufacturing capacity in India to meet export demand helps keep costs low. The cost advantage of India over other markets remains strong, and manufacturing in India is a good 30% more cost-effective than the matured base of Europe. There are competent suppliers in India. With volumes getting larger, it is natural for companies to source key modules of cars like engines and transmission.

Comstar Auto owners in talks with Mitsubishi to sell company The owners of Chennai-based component maker Comstar Automobile Technologies are in advanced talks with Japanese conglomerate Mitsubishi Group to sell the company which is valued at € 53 - 60 million (Rs. 400-450 crore). Hong Kong-based hedge funds Comcraft Group and Argyle Street Management are looking to exit their equal stakes in Comstar. Mitsubishi Group is leading the race and talks are currently on over valuations.

The owners have mandated local investment bank Kotak Mahindra Capital Company to scout for buyers for Comstar, which was owned by American carmaker Ford Motors until 2007, when Ford sold its entire global auto component business under Visteon Powertrain to these Hong Kong-based funds. Comstar makes starter motors and alternators for cars, and has been increasing its client base since it was taken over by these two funds. Its new clients include Tata Motors to which it has been supplying components for Indica, Safari and Nano automobiles. The company exports 80-85% of the components it produces and has about 650 employees. In 2012-13, it clocked revenues of nearly € 47 million (Rs. 350 crore). Mitsubishi Group, which makes passenger car Cedia and sports utility vehicle Pajero in India, has diversified interests in shipping, construction and automobiles.

Power

EU partners with India for offshore wind development The Global Wind Energy Council wants to partner with India for offshore wind development and has identified two states —Gujarat and Tamil Nadu — for special focus. The Council, a global trade body comprising over 1,500 members from 70 countries, is providing a grant of € 4 million from European Union‘s Indo-European Cooperation on Renewable Energy Programme. The Council announced a 4-year project supported by the grant to ―look at the challenges and opportunities presented by offshore wind''.

The project is being launched when the Ministry of New & Renewable Energy is also working towards the introduction of National Offshore Wind Energy Policy in India. As with all new technologies, the capital costs are high, and there is still a great deal of technical and management learning required to bring the costs down to competitive levels. One of the goals of the project will be to learn as much as possible from the European experience to ensure that when India ventures offshore, it does so in the most effective way possible. The partners bring a wealth of experience to the project: The World Institute for Sustainable Energy, based in Pune, will host the project management unit, and focus on Gujarat; The Center for Study of Science, Technology and Policy, based in Bangalore will focus on the State of Tamil Nadu; DNV-GL, the world‘s largest renewable energy consultancy, will, through its Bangalore-based subsidiary, provide its long expertise in the offshore industry.




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Norwegian Government keen to invest in power plants in HP The Norwegian government has expressed its keenness to step up investment in Himachal Pradesh, particularly in the field of hydro-power considering its vast potential in the state. Norway has a good track record in the field of hydro-power technologies, and that Norwegian company SN Power was already executing two power plant - Allain Duhangan and Malana - in Kullu district. India has assured of all possible assistance to the Norwegian government to give boost to the bilateral relations, besides giving fillip to investment and trade in hydro-power and tourism sectors. The government had initiated various measures to attract investors to the state, and had announced various sops for entrepreneurs. The government was providing them necessary facilities like eco-friendly environment and power supply on economically viable rates for setting up projects and was also ensuring timely clearance of various projects. Due to difficult topography and geographical conditions, Himachal has its own challenges but the government was committed to make the state a favourite industrial hub. Efforts were being made to boost infrastructural facilities in the state.

India's Energy Demand to Outpace China & Russia By 2035 India's energy consumption will rise by 132% by 2035, outpacing demand growth in Russia, China and Brazil. Global energy demand continues to grow but that growth is slowing and mainly driven by emerging economies - led by China and India. India's energy production is estimated to rise by 112% (from 344 million tonnes oil equivalent in 2012 to 729.4 million tonnes in 2035) while consumption grows by 132%.

The nation, which will in seven years become the world's third largest energy consumer, will see energy demand rise from 563.5 million tonnes oil equivalent to 786.1 million tonnes by 2020. It will soar to 938.6 million tonnes by 2025 and to 1307.5 million tonnes by 2035. India's demand growth of 132% outpaces each of the BRIC countries as Russia (20%), China (71%), and Brazil (71%) all expand slower. India's growth is almost double the non-OECD aggregate of 69%. Its share of global demand rises to 7% in 2035, accounting for the second largest share of the BRIC countries after China's 27%. Russia at 5% and Brazil at 3% follow in that order. The country's oil imports will rise by 169% and account for over 60% of the net increase in imports, followed by increasing imports of gas (573%) and coal (85%). Demand for all fossil fuels expands led by gas (183%), oil (121%) and coal (108%) while renewables in power expand by 539% as does nuclear (366%) and hydro (127%).

India's energy mix evolves very slowly over the next 20 years with fossil fuels accounting for 87% of demand in 2035, compared to a global average of 81%. This is down from 92% presently.Its energy production as a share of consumption drops from 61% to just 56% by 2035 as imports rise by 163%. Declines in oil production (by 25%) is made up by increases in gas (44%) and coal (116%). Coal remains the dominant fuel produced in India with a 66% market share in 2035. Renewables in power overtakes oil as the second largest, increasing from 3% to 10% in 2035 as oil drops from 12% to 4%. India's energy intensity is 32% lower than today's level compared to a BRIC average decline of 46%. Despite slower intensity improvement, per capita demand is 60% below the BRIC average.

Reliance Industries to invest in Algae Tec and fund its first India Plant Continuing in its rapid expansion in diverse fields, Reliance Industries Limited (RIL) hasannounced an investment in Australian algae fuel developer Algae.Tec‘s first Indian biofuel plant. The Indian Market represents a possible huge market for the Perth-based company and many companies are eyeing setting up shop here. RIL will initially invest € 1.09 million ($1.5 million) in the Australian company followed by € 0.88 million ($1.2 million) at a later date. Using the initial capital, Algae.Tec plans to build a pilot biofuels plants using its algae fuel technology. Reliance Industrial Investments and Holdings Limited (RIIHL) will fund the small pilot plant – which will capture Co2 emissions and turn this into algae for use as biofuels.

This pilot plant is designed with a view to modify the present technology to suit the local conditions. This will most probably lead to a larger demonstration plant. In the future though, we anticipate that RIL and Algae.Tec will join forces to establish commercial plants in India. In that respect, Reliance has the edge as it has exclusivity over the technology in the India market. It is forseen that it will be amidst the huge petroleum refineries in Jamnagar, Gujarat. In December last year, Algae.Tec was focussing on the ‗nutraceuticals‘ market. With this move, the revenue that the company expects to generate in the next three years is




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significantly more than its present as the nutraceuticals market is touted to be worth € 150 billion ($205 billion) globally by 2017.

Lanco Infra to sell Budhil Hydro Power to Greenko

Lanco Infratech is close to selling it's Budhil Hydro Power Project to Greenko. Deal size is expected to be around € 87 - 93 million (Rs 650-700 cr) for the 70 MW hyro power project in Himachal Pradesh and the deal is expected to be announced soon. Macquarie is the advisor to Lanco for sale of Budhil Hydro Project. Lanco needs to sell assets and infuse cash into the company to fulfill the terms of CDR (Corporate Debt Restructuring). A consortium of lenders has given a nod to a € 1027 million (Rs 7,700 cr) CDR package. Greenko is an AIM-listed Indian company with a large operation in the renewable energy space. Recently, Singapore-based GIC invested € 110 million ($150 mn) in Greenko to fund their expansion plans.

Greenko Group commissions 50-MW wind farm in AP Renewable energy company Greenko Group has commissioned a 50-MW wind farm at Balavenkatapuram in Anantapur district of Andhra Pradesh, taking its installed generating portfolio to 476 MW. This reflects an increase of 54% in generation capacity since April 2014.The Hyderabad-based company, listed on the AIM of London Stock Exchange, is steadily building its portfolio of renewable energy assets, both setting them on its own and also making a series of acquisitions in the hydel generation sector.

The Balavenkatapuram Phase-2 is the fifth wind farm Greenko has commissioned this financial year and brings the total wind generation capacity of the company to 233 MW. They expect to more than double their generation capacity this financial year to 600 MW and are firmly on track to meet our 2015 target of 1,000 MW. This project was built with an outlay of €43 million using Gamesa‘s G97 turbines. This project has a 25-year power purchase agreement with Andhra Pradesh and has access to generation-based incentives. The Grid connection for the site‘s full capacity of 200 MW was completed in October 2013, ahead of Phase 1 commissioning.The Phase 3 of Balavenkatapuram of another 50 MW is under construction and is expected to be ready for operation before the monsoon season in July.

Paper & Printing

JK paper to grow market share

JK Paper, among the leaders in the branded copier paper market in India has expanded its production capacity at Rayagada, Odisha by an additional 1.65 lakh tonnes of copier papers and pulping capacity of 2.15 lakh tonnes. For this facility, company has invested € 220 million (Rs 1650 crore) to meet growing demand, customers‘ needs and aspirations especially from digital printing industry. This takes the company's total capacity to 4.55 lakh tonnes. The total size of the branded copier paper market in India is estimated at 5.5 lakh tonnes of which the company has a 28% market share. The company has been growing at 7-8 % per annum. The company recently launched two new brands in the segment, JK C MAX and JK MAX to tap into higher price points. They target to capture 45% of the Western market (which is around 35% now) through this expanded capacity. In Pune alone, they aim to reach around 35% from 20% presently. In line with their customer base in India, these two brands will match the expectations of the discerning customers looking at run-ability, less jamming and smooth flowing paper with good printability yet providing value for money. The Indian Paper Industry accounts for about 1.8% of the world's production of paper and paperboard and is the fastest growing market for paper globally. The consumption is increasing and is estimated to go to 17.5 million tons by 2016-17 from present 13 million tons including newsprint. J K Paper has




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tied up with Hewlett Packard (HP) to avail of its ‗ColorLok‘ techno logy in producing copier paper.

Paper sector may see a turnaround India‘s paper sector is likely to see a turnround this quarter following estimates of increasing profitability on capital expenditure made over the last several years and incremental demand to absorb surplus output. In five years, the sector has invested € 2667 million (Rs 20,000 crore) towards capacity enhancement, technology upgradation and various acquisitions. As a result, it has added manufacturing capacity of a compounded annual growth rate (CAGR) of 11%. The sector has added 1 million tonnes (mt) of capacity in the current financial year. Weaker rupee, which prevailed for some time in 2013, has helped, as a tariff barrier against imports. However, the sector has been impacted in the case of wood imports. To ensure sustainable competitiveness, government support is required at the policy level. First is to ensure the supply of wood. At the sectoral level, 2.5-million hectares is required to be covered under pulpwood plantations. Paper makers are seeking import protection for key raw materials even as the duty-free paper import regime from ASEAN has become operational from January. The sector also wants zero import duty on wood logs/wood chips. Given the annual growth rate of 5 – 6%, the incremental demand each year is estimated at 0.5-0.6 mt. Since the capex intensity is expected to slow, with no new large capex being announced, the demand-supply mismatch would gradually reduce, as incremental demand absorbs excess supply. On the input cost front, there are expectations on some moderation to kick in, as availability of raw materials improves. JK Paper, West Coast Paper, TNPL, and AP Paper have planted 50,920 hectares with saplings (an increase of 17% in FY13) in continuation of the earlier initiatives undertaken.

TNPL sets up paper pulp machinery in Karur district In the first initiative of its kind, Tamil Nadu Newsprint and Papers Ltd (TNPL) has set up a paper pulp machinery to reduce the use of paper-dye with an investment of € 22 million (Rs 164 crore) at its plant in Karur district. The machinery would produce 300 metric tonnes of paper pulp on a day and usage of 100 tonnes wood paper pulp would be reduced. Similarly, TNPL as part of meeting up its power requirements has set up boilers at an investment of Rs 167 crore which would increase the power generation to 103.62 MW from 81.12 MW. With the establishment of the boilers, the surplus five MW of power would be sold to the State Electricity Board.

Boettcher to strengthen India presence with new manufacturing plant for rubber rollers Boettcher made inroads to Indian printing consumables market by inaugurating its first

chemical blending plant in India in the industrial town of Faridabad (Haryana) in December

2012. The chemical blending plant is in continuation with Boettcher‘s worldwide policy of

expansion. In coming years, they have plans to strengthen presence in the market by

expanding chemical blending plant and opening new rubber roller manufacturing unit. The

process to setup the rubber roller plant, which started in 2013 and is now completed. The

decision to setup a plant in India forms only a part of the expansion plans of the company for

the region.

The Faridabad plant is utilised for only blending chemicals rather than manufacturing them.

The chemical concentrations (raw materials) are sourced from Boettcher‘s German

manufacturing unit. These concentrations are blended in the Faridabad plant. Indian market is

highly price conscious and importing the final products puts higher pressure on the buyer. The

date of inauguration of its rubber roller manufacturing unit is now in the final leg of completion.

The launch will be in different phases, starting February, 2014. The phases will also comprise

several seminars. The first will be organised in Mumbai, followed by other major cities in India.

http://www.business-standard.com/search?type=news&q=Cagr

http://www.business-standard.com/search?type=news&q=Tnpl




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Ports & Shipping

Larsen & Toubro, Marg Group among many look to exit port business due to slowdown

Traditional infrastructure and construction companies such as Larsen & Toubro and Marg Group, which ventured into the unknown waters of building and running ports in the past decade, are now looking for an opportunity to exit. These engineering, procurement and construction (EPC) companies bid aggressively for port projects hoping to benefit from a booming economy and fast-growing world trade. However, the story did not unfold as expected with a slowdown hitting both global and local economies. All that remain are unmet revenue targets, anemic cargo growth, clearances stuck in government offices and balance sheets weighed by debt. Some ports haven't even started operations yet and policy paralysis, billion-dollar scams and crackdowns on illegal mining have made things worse. The pattern is similar across all EPC companies. EPC companies such as Marg, L&T, Navayuga Engineering Co and Gammon Infrastructure created unneeded port capacity to give their parent companies business at higher margins.

India awarded 20 projects worth € 800million (Rs. 6000 crore); 100 mn MMT of port capacity in 9-mth

India awarded 20 projects (as against the target 30 projects) worth € 800 million (Rs. 6000 crore), creating 100 million metric tonnes (MMT) of port capacity in the first 9 months of this financial year. Another 150 million metric tonnes of capacity will be created in the next 3 months of this financial year. Jawaharlal Nehru Port Trust's (JNPT) upcoming fourth container terminal will contribute 64 million metric tonnes to this. This much delayed container terminal is expected to be awarded in the next one month. The cash-strapped Dredging Corp of India will borrow € 133 million (Rs. 1000 crore) from cash surplus ports such as JNPT in Mumbai, Kandla in Gujarat and Paradip in Odisha.

Goa Shipyard Ltd delivers offshore patrol vessel to Navy The state-owned Goa Shipyard Limited joined the elite club of ship manufacturers to have built 200 warships with the delivery of INS Sumedha offshore patrol vessel to the Navy. The delivery of the 200th vessel for the nation, synchronises with the handing over of the third of the Offshore Patrol Vessel (NOPV) 'INS SUMEDHA' - built and designed indigenously. The vessel is the largest Offshore Patrol Vessel of the Navy and the largest constructed by Goa Shipyard Limited. It is expected to help the force to meet its requirements for undertaking surveillance and prevent infiltration and transgression of maritime sovereignty. This vessel is suitable for monitoring sea lines of communication, defence of offshore oil installations and other critical offshore national assets and can be deployed for escorting high value ships and fleet support operations.

GSL is also building Torpedo Recovery Vessels, Fast Patrol Vessels, Extra Fast Attack Crafts, Offshore Patrol Vessels, Advanced Offshore Patrol Vessels and Naval Offshore Patrol Vessels and 126 GRP interceptor boats. GSL is one of the few Indian shipyards equipped with an in-house design capability and most of its new shipbuilding projects are based on our own in-house design. It is implementing a major expansion plan that is expected to significantly boost its capacity of shipbuilding facilities.




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Ennore Port inks pact with Ford Aimed at making Chennai a major automobile export hub in the country, Ennore Port Ltd (EPL) today inked an agreement with US-based carmaker Ford for export of its cars through the port. Ford India has a manufacturing facility at nearby Maraimalai Nagar that rolls out models like hatchback Figo, sedan Fiesta Classic, global Fiesta, SUV Ecosport and premium SUV Endeavour. Recently, the Port signed a similar agreement with (Japanese automaker) Nissan Motor for exports of its cars using Ennore Port.

This is one of the important initiatives of Ford for its export plans. The Port has developed a general cargo-cum-car terminal at a cost of € 19 million (Rs 140 crore), which includes a car parking yard spread across 35 acres and is the biggest car parking yard among major ports in the country. At a time, 10,000 cars can be parked and up to December, 2013 about 4.49 lakh automobile units have been shipped out of Ennore Port since September 2010. Besides Ford and Nissan, other automakers like Ashok Leyland, Toyota and Honda Cars India are also using Ennore Port for exports. The agreement is valid for a 10-year period. Ennore Port offers various discounts in the range of 5-30% to encourage exports.

Shipping ministry to soon meet port capacity target of FY14 The Ministry of Shipping, which is looking to increase the capacity of major ports by 250 million tonnes in this financial year, has already awarded 102 million tonnes capacity in April-December and will be awarding the balance in the next three months. Of the total 30 projects that were to be awarded in this financial year, 20 projects worth Rs 6,000 crore have already been awarded until December and the balance will be awarded in these three months. The fourth terminal of Jawaharlal Nehru Port Trust (JNPT), which is a part of the 10 projects to be awarded, alone will bring in 64 million tonnes. Bids for JNPT‘s fourth container terminal will be opened in February and award will happen before March. JNPT is setting up a € 933 million (Rs 7,000-crore) fourth container terminal. Pertaining to Dredging Corp which is looking to meet its fund shortfall, the company is looking to borrow over € 133 million (Rs 1,000 crore) from banks or cash surplus ports like JNPT and Kandla.

Garment and Leather

Bangladesh looking for greater access for readymade garments Bangladesh will press for greater access to the Indian market for readymade garments and will urge the government to ease barriers including stringent testing norms. Bangladesh is also expected to chart out detailed plans for improving border infrastructure to boost trade between the two neighbours. The United States and European Union, Canada are very big markets for their readymade garments but though India is a big market too, they are still not able to utilise it. Their products are cheaper than India's as the cost of production is less than India.

India and Bangladesh compete in the textile export segment in some markets but New Delhi has set up barriers such as imposing tough testing norms to keep readymade garments from Bangladesh out as India is not accepting the tests of BSTI ( Bangladesh Standards and Testing Institution) as the testing process and methods are not up to the expectations. Efforts are on to set up trade offices in Siliguri and Guwahati to expand trade in the seven northeastern states of India. As per the minister, the new government in Bangladesh plans to expand its export procession zones and invited Indian companies to take advantage of the opportunities. Indian entrepreneurs, Indian industrialists can set up their industries in Bangladesh. As an LDC (least developed countries), Bangladesh is getting GSP (generalised scheme of preferences) and lot of other facilities from European markets.

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Silkworms fed dyed mulberry leaves to produce coloured silk Indian researchers have successfully developed an eco-friendly method to help silkworms spin naturally fluorescent, coloured silk - by feeding them dyed mulberry leaves. For some 5,000 years, cultivated silkworms have been spinning luxurious white silk fibres destined for use in the finest clothing. However, current dyeing practices produce wastewater that contains potentially harmful toxins, so scientists are now turning to a new, "greener" dyeing method in which they coat already-coloured fibres from the caterpillars by feeding them dyed leaves. Dyeing textile fabrics is one of today's most polluting industries. The process requires huge quantities of water for bleaching, washing and rinsing, and it results in a stream of harmful wastewater that needs to be treated effectively before release into the environment. To make the industry greener and more environmentally friendly, researchers have been developing less toxic methods, including feeding dyed leaves to silkworms so they spin coloured - rather than white - cocoons. However, so far, this technique has only been tested with one type of dye, which is too pricey for large-scale production. Thus, the team turned to azo dyes, which are inexpensive and account for more than half of the textile dyes used today. They dipped or sprayed mulberry leaves, the silkworm's food of choice, with azo dyes to see which ones, when consumed, would transfer to the silk. Of the seven dyes they tested, three were incorporated into the caterpillars' silk, and none seemed to affect the worms' growth. Scientists noticed that certain dye traits, such as the ability to dissolve in water, affected how well the dye worked. These insights are extremely important in development of novel dye molecules that can be successfully used in this green method of producing coloured silk fabrics.

€ 4.7 million (Rs 35 crore) handloom institute to be set up in Machilipatnam The state government has decided to set up a handloom in Krishna district headquarters of Machilipatnam. The All India Handloom Technology Institute would be set up with a project cost of € 4.7 million (Rs 35 crore). At present, only four handloom technology institutions are functioning in the country. The central government has decided to abolish the outstandings of handloom weavers' loans, including interest. The Minstry has sanctioned € 6 million (Rs 45 crore) subsidy for Siricilla constituency handloom weavers and the amount under Rajiv Arogya Yojna has also been increased. The foundation stone was also laid for of a Common Production Centre costing € 0.4 million (Rs 3 crore).

Leather exports likely to rise by 20% to $6 billion in FY14 Exports of leather goods is expected to grow by 20% to reach € 4.38 billion ($6 billion) by this fiscal end. The export of leather and leather products increased manifold and touched € 3.6 billion ($4.99 billion) in 2012-13. In the first nine months of the current fiscal,exports grew by 17%. Last financial year was a very tough year (for the industry). In $ terms, the industry grew by about 2.3%. But in the first nine months of this financial year it grew by 17.83%. The industry is hopeful of achieving 20% growth to € 4.38 billion ($6 billion) this financial year. If this growth continues in the coming years, then they would reach € 7.3 billion ($10 billion) by end of 12th Five Year Plan. Footwear contributed the majority of business which was followed by leather goods, saddlery, finished leather and garments. Twelve countries account for nearly 76.53% of the total exports from leather sector, of which the European Union accounts for 60%. Noting that the domestic leather market is valued at € 3333 million (Rs 25,000 crore), is a first step mapping of the industry will be done by appointing an agency. For mapping, they are going to give it to a professional agency and have called for RFPs (Request For Proposals). The agency will exactly map the industry -- both the capital outlay and their (industry's) contribution to the revenue of economy. Of the € 3333 million (Rs 25,000 crore) domestic market, € 1467 million (Rs 11,000 crore) was contributed by the organised sector and the balance was contributed by the unorganised sector. The four southern states contribute 36% of total exports in India

Benetton pips Levi’s to emerge top international fashion brand in India Italian brand Benetton has overtaken Levi's to emerge the largest international fashion brand in the country for the first time last fiscal due to a sharp decline in the American brand's revenues. Benetton reported more than 20% year-on-year increase in its revenues for FY2013 at € 70 million (Rs 523 crore) while Levi's posted its steepest revenue decline of 35% at € 65 million (Rs 484 crore) after phasing out its mass brand Denizen. Benetton is already a € 133




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million (Rs 1,000-crore) plus brand. Till the previous year, Levi's was almost double the size of its nearest rival. In FY12 it had reported sales of € 99 million (Rs 741 crore) against Benetton's € 57.3 million (Rs 430 crore). But the American brand's strategy of exiting few brands and shutting down dozens of stores at a time when most global rivals expanded their portfolio and store count in India has backfired in terms of revenues. Two years ago, Levi's started cutting down labels such as Dockers, Sykes, Signature and, more recently, mass brand Denizen, which had been adding substantially to the company's top line. As per Levis India, the financials reflect significant revenue and costs impact associated with the phase out of the Denizen brand, however, the move has helped the firm put greater focus and increased investment level on the Levi's brand. But when Levi's shrunk its portfolio, its competitors became aggressive in India. Benetton added a host of new products including shoes, accessories and undergarments to its portfolio, while Marks & Spencer tweaked its premium positioning to expand its customer base and Zara brought in all its latest global offerings at relatively affordable prices. The Benetton India stores expansion done in the smaller tier-II and tier-III towns in the last 4-5 years are now bearing fruit and driving like-for-like growth. Department stores and ecommerce have been the fastest growing channels and have allowed us to reach a new set of young consumers. Consumption expenditure on apparel in the country is expected to increase 3.8 times to € 164 billion ($225 billion) over the next seven-eight years.

Leather complex coming up in AP beset with glitches Beset with problems of protests by locals, a 360-acre leather complex coming up in Andhra Pradesh has received another jolt. The Department of Industrial Policy and Promotion under the Commerce Ministry has asked Krishnapatnam International Leather Complex Private Ltd, the special purpose vehicle set up jointly by the Andhra Pradesh Industrial Infrastructure Corporation and Leather Industries Development Corporation of Andhra Pradesh, to return the € 3.87 million (Rs. 29 crore) it had disbursed for the project. Following protests due to concerns of environmental impact by the tanneries, the developers had decided in December last year to shift it closer to the coast at Kothapatnam, about 40 km from Krishnapatnam, the original location.

The project has now been brought under the Mega Leather Cluster Scheme notified in March last year. This will help it gets funds upto € 17 million (Rs 125 crore). The DIPP has asked a new detailed project report needs to be filed and the disbursed fund returned since the location has been changed. This will delay the project further. It was conceptualised under the 11{+t}{+h}Five-Year Plan, and a lot of time has elapsed. Expected to come up at a cost of $200 million, the leather complex will go operational by fiscal year 2016-17.

General

MoU inked for Kolarrail coach factory The Ministry of Railways and Government of Karnataka have signed a memorandum of understanding for setting up of rail coach factory in Kolar. The project is planned on 1,100 acres of land to be provided by State government free of cost. The cost of setting up of the new rail coach factory is estimated to be about € 195 million (Rs 1,460 crore). Both Railways and the State government have committed to share the cost of the project. Project implementation will be taken up by the Railway‘s Rail Coach Factory or an entity nominated. The new rail coach factory, on its inception, is expected to serve and meet the increasing demand of passenger coaches on Indian Railways and also will foster the economic development of the State.

Moog plans to expand operations in India Moog Inc, which makes high precision motion control equipment for aerospace, defence and industrial applications, aims to expand its servo motor R&D and manufacturing in India. Moog already makes motors in Bangalore that it exports to the toughest, most demanding markets and customers around the world. The company, which has a staff of some 600 engineers, including a core R&D team of about 40 people designing motors, and about 200 staff on the "development" part of precision motion equipment for aerospace, also expects greater demand for its products and services in India. With specific products, such as servo motors, the R&D team in India is responsible for everything from concept to design-for manufacturing. One of the latest motors that Moog has




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made in India goes on wind turbines. The "motor solution" is capable of moving the blades to face the best wind direction. It is also capable of moving the blades out of the wind direction in the event of a damaged or faulty blade, ensuring that the whole turbine setup doesn't accelerate and come crashing down. They have started to manufacture it in the last six months here and we're exporting it to Germany, Spain, Brazil, China and Korea. In the near future, Moog wants to ramp up its presence here to make more products for the Indian market.

German company Triplan comes to India German-based engineering consulting company Triplan, will set up an Engineering Center in Pune to cater to chemical, refining, life sciences and food & beverages industry through its India subsidiary Triplan India Pvt Ltd. The company is also introducing its patented Closed Coke Slurry System (CCSS) technology, which it will offer to Indian refineries. This is in line with their strategy to offer technology, increase footprints globally and extend work model of 'Follow the Customer'. After successful delivery of projects in India in the past, this is now the strategic move towards more business in the country. Initially, the company will recruit 40 to 50 engineering professionals and will have substantial additions in next 2 years. Triplan also intends to remain a multicenter organisation and intends to set up offices in other parts of India. The company will cater to the local projects in India and also its customers in Europe, who intend to invest in India. The company has so far executed three projects in India. TRIPLANs international projects particularly the Middle East & South East Asia shall be supported by the Indian subsidiary. The company is also developing intelligent plant design software TRICAD MS for automobiles, which is being used by major automotive companies such as Mercedes, Volkswagen, BMW, AUDI and Skoda.

Praj Industries to set up first commercial agricultural waste-based ethanol plant As the food versus fuel debate has slowed down the corn-based biof-fuels industry in the US

and Europe, Pune-based Praj Industries will set up the first commercial demonstration plant of

ethanol production using agricultural waste by the end of 2014. To be set up in Western

Maharashtra with the help of government, the demonstration plant will have a capacity of

manufacturing 50 lakh litres of ethanol a year. The company plans to set up total two

commercial demonstration plants in Maharashtra while one site will come up overseas.

After the recession of 2008-09, the traditional business of ethanol solutions of the company did

not show significant growth. They have identified new growth sectors like water, pharma and

bio-technology led businesses, which will not be affected by economic conditions. The

company has started focussing on of second generation bio-fuels which are derived from

agricultural waste. The process of converting agricultural waste into ethanol is a challenging.

They have been running a pilot plant from last four years and now want to demonstrate its

commercial viability with the commercial demonstration plant. Praj has developed a 'bolt-on'

model for the second generation technology of bio-fuels.

Engineering exports to exceed € 45.26 billion ($62 billion) The government will exceed the engineering exports target of € 45.26 billion( $62 billion) in

the current fiscal. India's engineering exports in 2012-13 aggregated to € 41.39 million ($56.7

billion). Engineering exports include transport equipment, capital goods, other machinery/

equipment and light engineering products like castings, forgings and fasteners. The overall

engineering shipments between April and November rose to € 28.36 billion ($38.85 billion)

from € 27 billion ($36.53 billion) during the same period last year.The US and Europe account

for over 60% of India's total engineering exports. These two markets have shown improvement

of late. The government has earmarked an annual outlay of € 40 million (Rs 300 crore) for

promoting Brand India through different schemes like the Market Access Initiative.

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Focus State – Delhi Governor: Shri Najeeb Jung Chief Minister: Shri Arvind Kejriwal

General Facts

Area (sq km) 1483 sq kms

Total Population 16.7 million

Literacy Rate 86.3%

Airports

Terminal 1 (Domestic), & Terminal 3 (Domestic and

International) in New Delhi

Infrastructure

Roads

Delhi has total road length of around 31,969 km. About 80 km of National Highways

run through the state. It is maintained by National Highways Authority of India (NHAI). The Finance Bills of the last few years have laid increased emphasis on the transport sector. Considering the need for improvement of the facilities, the sector has been

receiving significant financial allocation. Action has been taken to implement the

Delhi Integrated Multi Modal Transport System (DIMTS). The existing road network is

being upgraded and express highways and freeways are being constructed along key

routes in Delhi and the NCR. The ―Golden Quadrilateral‖ project of the National

Highway Authority of India (NHAI) directly connects Delhi to other major markets and

cities of the country. The state government has planned an investment of € 242

million (US$ 331.4)million to strengthen 673 roads across the city.

By Air

The Indira Gandhi International Airport (IGIL), one of the busiest in the world is

located about 16 km from the New Delhi city centre. In July 2010, the terminal 3 of

the airport was inaugurated which will enhance the passenger handling capacity of

the airport to 60 million passenger annually. The newly operationalised terminal 3 is

spread over 500,000 square metre area and is equipped with 95 immigration

counters, 168 check in counters and 78 passenger boarding bridges to handle 34

Million Passengers Per Annum (MPPA) and 12,800 bags per hour. The planned

ultimate design capacity of the airport is 100 MPPA. A ‗Cargo Village‘ is also being

developed to make the airport a focus point of cargo movement.

Railways

Delhi is well connected by rail network to other parts of India. A significant part of trade is

supported by the strong railway link. State capitals of India and a few other important cities are

connected with Delhi by high-speed, air-conditioned and comfortable ‗Rajdhani Express‘ trains.

There are three main railway stations at: New Delhi, Old Delhi and Hazrat Nizamuddin. The

Delhi Metro Rail Corporation (DMRC) was registered in 1995 under the Companies Act, 1956,

for development of Delhi Mass Rapid Transit System (MRTS). DMRC has equal equity

participation from the Government of India and Government of National Capital Territory of

Delhi (GNCTD). The objectives of the Delhi Metro Rail are as follows: To cover the whole of

http://en.wikipedia.org/wiki/Najeeb_Jung

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Delhi with a metro rail network by the year 2021. Delhi Metro to be of world-class standards in

terms of safety, reliability, punctuality, comfort and customer satisfaction. Delhi Metro to

operate on commercial lines, obviating the need for government support. As of August 2011,

more than 2 million commuters travel every day in metro rail operating on six lines, covering

166.93 km (excluding 22.7 km of airport express line). With operationalisation of all the routes

planned in Phase-III, total route length of metro rail will be over 306 km by 2016. The airport

metro express, route connecting the Central Business District and Delhi International Airport, is

covering a distance 22.7 km in 20 sminutes. The DMRC has been certified by the United

Nations as the first metro rail and rail-based system in the world, which get carbon credits for

reducing green house gas emissions. The central government has further allocated US$ 954

millions for Phase-III projects. It has granted a pass through assistance of € 235 million (US$

322.2 million) and further plans to infuse € 87.38 million (US$ 119.7 million) as equity in the

Delhi Metro.

Economy Delhi is the capital of the Republic of India and also a state for administrative purposes. It is one of the largest metropolis in the country. Delhi shares its border with the states of Uttar Pradesh and Haryana. Delhi has a cosmopolitan culture with a mix of languages in use. English and Hindi are commonly spoken for everyday transactions. Punjabi, Bihari and Haryanvi, etc., are the other languages used. It is home to the Union Government of the country and the State Government offices. Delhi is the epicentre of international politics, trade, culture and literature in India. The Delhi state is divided into 165 administrative villages under nine districts. The Union Government‘s area is managed by the New Delhi Municipal Council (NDMC). Being the seat of the Central Government, Delhi has an important position in the country in terms of formulation of policies. It has also become an important centre for trade and commerce with a number of key industry associations being present. The state also hosts several trade conventions and fairs throughout the year.

Delhi has emerged as a key state with immense scope for development of the services industry such as Banks and Financial Services Institutions (BFSI), IT and ITeS, Consulting, etc. It is a prominent agri-trade centre of the country as well as a preferred tourist destination. Many of the global corporations have offices in the state. The state proposes a wide range of fiscal and policy incentives for businesses under the Industrial Policy for Delhi, 2010-2021. Additionally, the state has well drafted sector-specific policies. Delhi has well developed social, physical and industrial infrastructure and virtual connectivity. It has an international airport and well developed rail and road infrastructure. There has been significant infrastructure and environmental development in Delhi over the last 20 years. Delhi has a stable political environment with a single-party government. The State Government has been committed towards creating a progressive business environment.Delhi attracts skilled and semi-skilled labourers from across the country. It has a large pool of skilled and semi-skilled labourers, who serve the requirements of various industries.

At current prices, the gross state domestic product (GSDP) of Delhi was € 49.1 billion (US$ 67.3 billion) in 2012-13. Between 2004-05 and 2012-13, the average annual GSDP growth rate was 17.5%. Growth was driven by the expansion of the services sector. Banking and insurance, real estate, trade, tourism and communications were driving the progress in the sector. At current prices, the net state domestic product (NSDP) of Delhi was about € 47 billion (US$ 63.93 billion) in 2012-13. The average NSDP growth rate between 2004-05 and 2012-13 was about 17.6%. The state‘s per capita GSDP in 2012-13 was € 2847 (US$ 3,900.2) as compared with € 1099 (US$ 1,505.2) in 2004-05. The per capita GSDP increased at a compound annual growth rate (CAGR) of 15.3% between 2004-05 and 2012-13. The state‘s per capita NSDP in 2012-13 was € 2703 (US$ 3,702.5) as compared with € 1037 (US$ 1,421) in 2004-05. The per capita NSDP increased at an average rate of 15.4% between 2004-05 and 2012-13.

Delhi‘s economy is primarily dominated by knowledge based service industry such as information technology, consulting etc. Also, the state has small scale industries which are mostly non-polluting. Commonly grown crops in the state are wheat, rice, jowar, maize, millet and vegetables. In 2010-11, 18,400 tonnes of potato and 27,300 tonnes of onion were produced in the state. In 2010-11, the total production of wheat in the state was around 111,033 tonnes. The total food grain production in the state was around 210,354 tonnes in 2010-11.

The Food Corporation of India (FCI) was set up under the Food Corporations Act, 1964, of the Union Government to meet the objectives of the Food Policy. Over the years FCI has played an important role in controlling supply, prices and disaster management in times of droughts, etc. The corporation is headquartered in Delhi. The Indian Agricultural Research Institute (IARI), the country's premier national institute for agricultural research, education and expansion, has a centre in New Delhi. The Indian Council of Agricultural Research (ICAR), an autonomous organisation under Ministry of Agriculture,




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Government of India is also headquartered in New Delhi. The institute is the apex body for coordinating, guiding and managing research and education in agriculture including horticulture, fisheries and animal sciences in the country. According to the Department of Industrial Policy & Promotion (DIPP), the cumulative FDI inflows from April 2000 to March 2013 amounted to US$ 36.3 billion. Of the total outstanding investments of € 77 billion (US$ 105.2 billion) in 2012-13, the services sector had the highest share of investments at 68.5%. A significant proportion of investments also went into the real estate (18.5%) and electricity (9.8%) sectors in 2012-13.

Urban Infrastructure Under the Jawaharlal Nehru National Urban Renewal Mission (JNNURM), a total of 23 projects costing € 1087.21 million (US$1,469.2 million) have been sanctioned for Delhi during 2008-09 and 2010-11. The key projects focus on traffic management plan for designated areas, sewerage system improvement, drainage, storm water drains, roads, flyovers, roads over bridge and urban renewal plans along with heritage conservation. According to the Delhi 2021 Master Plan, special emphasis has been laid on improved solid-waste management policies. The short-term goals are: capacity building with respect to financial services and performance management, effecting trial runs of collection and waste-reduction schemes, developing transport, land-fill sites and transfer stations for waste and focussing on bio-medical and hazardous waste management programme. With respect to traffic management, the focus in the master plan is on developing integrated multi-modal transport system, creating infrastructure for alternate transport, e.g., bicycles, creating an environment for public transport prioritisation by customers and improving suburban railway with technology upgrade.

On the industrial infrastructure front, the state has taken a number of development initiatives such as re-development of industrial clusters, maintenance of industrial areas under PPP (Public Private Partnership) model. The State Government has initiated a set of prestigious projects including those in industrial infrastructure for the specific sectors, through the Delhi State Industrial and Infrastructure Development Corporation Limited (DSIIDC). The Delhi Metro Rail Corporation Limited (DMRC) has conceptualised and developed a world-class IT park complex comprising IT Park Block-1 (operational), IT Park Block-2, which is ready for occupancy and IT Park Block-3 (yet to be constructed). The complex is situated very close to Shastri Park metro station.

Social Infrastructure Delhi has a literacy rate of 86.3% according to the provisional data of Census 2011; the male literacy rate is 91% and the female literacy rate is 80.9 per cent. As of 2009-10, there were 50 pre-primary schools, 2,586 primary schools, 583 middle level schools and 1,824 senior secondary/secondary schools in Delhi. The State Government has proposed to spend € 293.41 million (US$ 396.5 million) on education sector in 2012-13 accounting for 12.67% of total plan outlay. At the intermediate college level, courses in the science, arts and commerce streams are offered. Vocational courses are offered in the fields of agriculture, engineering and technology, home science, paramedical, business and commerce, and humanities.

Major Industrial Projects being implemented Name of the project Promoter Cost € million Industry

Modernisation of Delhi International Airport

Lease-Develop-Operate-Transfer

€ 1364.80 Airports

Badarpur Elevated Highways Build- Operate- Transfer - Toll

€ 53.95 Roads

Integrated Municipal Waste Processing Complex at NDMC Compost Plant Site, Okhla

Build- Owner - Operate- Transfer

€ 10.29 Urban Development

Cultural Infrastructure Delhi‘s rich history is reflected in its forts, monuments, palaces, gardens and bazaars that were created by its rulers during the different periods of their occupation. The remains of a large number of such historical places and monuments are the sites of attraction for visitors and tourists in Delhi. In addition to these historical places, a large number of gardens, buildings, playgrounds, institutional buildings, markets and event places were constructed by the British till 1947 and thereafter by the Government of India and Government of Delhi. In addition, Delhi and the NCR have number of convention centres, golf courses, hotels, restaurants, and recreational centres offering international standard of services.

Delhi was the host city for Commonwealth Games 2010. For its successful organisation, the State Government had taken up 59 projects/schemes directly related to games. Some of the major projects/schemes were as follows:




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Construction of Thyagraja stadium.

Renovation and expansion of the Talkatora, Shivaji and Chhattrasal stadiums.

Construction of a training indoor stadium at Ludlo Castle.

Construction of water treatment plant and sewerage-water treatment plant at the games village.

IT system for commissioning a dedicated communication network system.

Key Industries in the State The location advantage, policy incentives and infrastructure in the state support investments in sectors such as IT/ITeS, Banking and Financial Services Industry (BFSI) and tourism activities. According to the Delhi 2021 Master Plan, sophisticated hi-tech industries will be promoted with special emphasis on high value-added products. The plan emphasises on industrial development without effluents, smoke and noise pollution. According to the Industrial Policy for Delhi 2010-2021, the Delhi Government will develop world-class infrastructure within planned industrial estates to promote industrial growth. The government is also encouraging activities allied to industries, such as consultancy, information technology, training of skilled manpower through vocational training programmes and entrepreneurial development programmes.

Banking

The city is home to a number of private and public banks and financial services institutions. These business houses deal in banking transactions, documentations, negotiations, loan agreements, etc. The city also has commercial banks, industrial banks and some of the leading foreign banks. The service points are spread across the city while Connaught Place, Chandni Chowk, Barakhamba Road are the key points in the city where the key offices of a large number of organisations are located.

Agri & Food Processing

The city has a number of agriculture trading markets and food processing industries. It acts as a nodal location for exchange of goods with Northern parts of the country because of good connectivity and supporting infrastructure. There are nine principal markets and 12 different submarkets for trade of agricultural produce in Delhi. The main food trade markets are located in Narela, Azadpur, Tikri Kalan, Shahdara, Bagh Diwar, Keshopur, Gazipur, Najafgarh and Mehrauli.

Contruction & Real Estate

There are several infrastructure development companies located in the state. These companies are involved in construction of residential and commercial complexes, townships, power projects, hospitals, hotels, schools, roads and public utility infrastructure.

IT and ITes

There are a number of software companies in Delhi. These organisations are involved in the businesses of Enterprise Resource Planning (ERP), Structured Query Language (SQL) server, Document Management System, Customer Relationship Management (CRM), software development, Active Server Pages (ASP), web developer, online office automation, etc. E-commerce companies in Delhi offer services such as registrations of domain names, tele-billing, electronic signatures, web hosting, etc. With Government focussing on the sector, the prospects are very bright for IT related businesses and other knowledge-based industries such as consulting. NASSCOM, the premier trade body and the chamber of commerce of the IT and BPO industry in India is headquartered in New Delhi. The members of the association account for over 95 per cent of the industry revenue and employ over 2.24 million professionals. Enabling institutions such as Software Technology Parks of India (STPI), a society set up by the Ministry of Information Technology, Government of India for encouraging, promoting and boosting software exports from India is also located in New Delhi.

Key Projects under planning Name of the project Promoter Cost € million Industry

Delhi-Gurgaon Highway

Build-Own-Operate-Transfer - Toll

€ 112.64 Roads

Delhi-Noida Toll Bridge


€ 64.75 Roads

Construction of 197 Bus-Q-Shelters in NDMC area


€ 2.41 Urban Development




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Seminars & Exhibitions

Renewable Energy India Expo 2014

Date Venue Organizer Profile Products/ Participants

0

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ep

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4

India Expo Centre, Greater Noida Noida

Retrospect: 2013

Exhibitors: 500

Visitors: 12,000

Countries :NA

UBM India Pvt. Ltd. TIMES SQUARE Unit No. 1 & 2, B Wing, 5th Floor Andheri-Kurla Road, Andheri (E) Mumbai – 400 072| India Mob.: +91 98717 26762 E-mail: [email protected]

Website: www.renewableenergyindiaexpo.com

The 8th Renewable Energy India 2014 Expo is recognised as Asia‘s largest event on renewable.

. Solar Energy

. Wind Energy

. Bio-mass/fuel Energy

. Small Hydro Energy

. Geothermal and Energy Efficiency

Intersolar India 2014

Date Venue Organizer Profile Products/ Participants

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Bombay Exhibition Centre

Mumbai

Retrospect: 2013

Exhibitors: 170

Countries :NA

Visitors: 8000

MMI India Pvt. Ltd.

5th Floor, Lalani Aura,

34th Road, Khar West,

Mumbai. 400 052

Tel: +91-22 -4255 4707

Fax: +91-11-4255 4718

Email: [email protected]

Website: www.intersolar.in

Intersolar India will provide great insight into the Indian solar market by bringing companies from around the world together so they may prosper and gain the knowledge needed to expedite the implementation of solar as a significant source of energy

. Photovoltaics . Solar thermal technologies . PV cell . Module and inverter manufacturers . Components and mounting systems suppliers . Manufacturing system suppliers . Service companies . Manufacturers of solar thermal applications

http://www.biztradeshows.com/organizers/hamburg-messe.html

mailto:[email protected]

http://www.renewableenergyindiaexpo.com/

http://www.renewableenergyindiaexpo.com/




20

Special Rates at Hotels in India We have negotiated special rates for VDMA member companies with Taj Group, Oberoi Group & ITC Group of Hotels covering not only the major cities like New Delhi, Mumbai, Kolkata, Chennai, Bangalore, Hyderabad but also other destinations in India like Goa, Agra, Rajasthan, Kerala and many others.

The discounts range from 25% up to 45% depending on the city and the hotel. However these discounted rates would be valid only when the booking is done through VDMA India Office in Kolkata.

For further details or reservations feel free to contact us.

Activities & services of the VDMA India Office Promote sales of members in participating divisions within VDMA especially exports, including participation in exhibitions.

Organize symposia and similar presentations of German companies in India.

Participate and service bilateral programs such as those in existence, with governmental participation between Germany and India.

Furnish information about the complete product program of the German industry to assist Indian companies to identify right partners for mutual business relationship.

Provide information on market trends, prospects, future development, new projects and tenders.

Offer job opportunities by uploading your resume on the Indian website under careers.

Contact:

VDMA INDIA SERVICES PRIVATE LIMITED

Rajesh Nath, Managing Director

Jamly John, Regional Manager – West

GC 34, Sector III, Salt Lake

Kolkata– 700106, India

Telephone: +91 33 2321 7391

Fax: +91 33 2321 7073

E-mail: [email protected]

VDMA India Quarterly Newsletter-German Machinery Industry

The VDMA India office publishes a Quarterly Newsletter-German Machinery Industry. This Newsletter informs the Indian industry about the development in the German Machinery industry in various industrial sectors. This Newsletter has a circulation of around 8000 copies in different industrial divisions. The VDMA member companies have the possibility of giving an advertisement in this Newsletter at a discounted rate. For further details, please contact: Ms Jamly John at: [email protected]



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