2009-Dec-29 - India Growing In Information Technology,Healthcare And Real Estate Sector.
Leading information technology companies in India are meanwhile increasing their presence in North America, in step with the improving business climate in the region. Top-tier information technology companies which are increasing their delivery capabilities in North America, includeHCL Technologies which concluded acquisition and expansion of its Parsippany, New Jersey data centre. The North America region currently accounts for 60 per cent of India's information technology export basket. Information technology company, Cognizant, has similarly announced the expansion of its US delivery centres in Toronto and Phoenix (Arizona).
India’s top-ranking status in the field of basic research came in for mention at the India Eco Summit held recently, where the panelists discussed whether, and how, India could become an innovation hub in the near future, given India’s strengths in science and tech and research and development. The country made a significant stride in science and technology with Indian researchers succeeding in sequencing the entire genome of a human being. The genome sequencing was undertaken by the Institute of Genomics and Integrative Biology, part of the Council of Scientific and Industrial Research (CSIR). In another development that would have a bearing on innovative science and technology prospects for Indian companies—on the sidelines of the climate change conference at Copenhagen, India’s proposal for a global network of innovation centres for climate-friendly technologies received wide consensus.
Leading manufacturers of automobiles in India, posted record monthly sales for the month of November 2009, even as car makers and two-wheeler companies improved on their sales posted in earlier months. Two of the leading manufacturers of automobiles in India, Maruti Suzuki and Hyundai Motor India reported record monthly sales of 87,807 units and 55,265 units respectively for the month of November 2009. Major manufacturers of automobiles are seeing their India operations contribute significantly to the company’s global operations. For example, Hyundai’s India subsidiary contributes between 15 per cent and 20 per cent to the company’s global turnover.
India’s infrastructure segment has received a boost with representatives from the Power Grid Corporation, the India Infrastructure Finance Co Ltd (IIFCL), the World Bank and the Government of India, signing loan agreements for projects of a total value of US$ 4.2 billion in the month of October 2009. In another fillip to the country’s infrastructure that is certain to speed up infrastructure projects through the route of public-private partnership, the Asian Development Bank (ADB) has decided to provide close to US$ 700 million in loans as part of the second India infrastructure project financing facility.
According to a study by PricewaterhouseCoopers (PwC) and Urban Land Institute, India heads the top real estate investment markets for the year 2010. The report, which is based on the views of over 270 international real estate professionals, revealed that India, particularly the Indian cities of Mumbai and Delhi were viewed as good destinations with residential properties seen as more attractive sectors. ICICI Bank, a leading private bank, has stated that it was focussing on the home loans segment on the back of a recovery in the real estate segment. HDFC, a top lender of home loans, has said that it expects loan disbursals in the housing sector to remain strong in the current fiscal (FY 2010). HDFC Vice-Chairman and Managing Director, Keki Mistry, said, “Loan disbursals (in the housing sector) remain very strong. We expect credit growth in excess of 20 per cent.”HDFC Bank, has for its own part, made news in the banking system. HDFC Bank has been named the strongest bank in the Asia-Pacific region, in a survey conducted by Asian Banker, which provides information for the financial services industry. Other Indian banks that featured in the ranking include Punjab National Bank (PNB) and Union Bank of India.
The healthcare sector in India is projected to grow to US$ 77 billion mark by 2012, up 23 per cent from the current size, according to a recently released study. The growth in the healthcare sector in India would come on the back of growth in healthcare facilities in the public and private sector as well as growth in medical diagnostic and path labs, as well as growth in the medical insurance sector. The Indian life insurance industry is on a high growth trajectory, posting a double-digit growth figure of 35.7 per cent year-on-year in October 2009, on the back of high inflows in premiums of the first year.
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2009-Dec-2 - Fast Moving Consumer Goods
Driven by the fast moving consumer goods (FMCG) and apparel segments, the Indian retail market which is currently estimated to be around US$ 350 billion is expected to witness growth by nine per cent annually touching US$ 521 billion by 2012. Bharti Retail President and Chief Operating Officer (COO), Vinod Sawhny, speaking during an industry event, said, "FMCG and apparel sectors contribute the maximum to the growth of the retail market in India." He added, "FMCG in particular has a huge potential to grow... and this will ensure a growth rate of nine per cent year-on-year for the retail sector, which is likely to touch US$ 521 billion by 2012."
Meanwhile, retail companies in India are seeing their margins from FMCG companies go up from 14-15 per cent to 17-19 per cent as they compete for shelf space with retailers’ private labels. Some FMCG companies say that as retailers acquire scale, they also deliver supply chain efficiency and organized scale. The Indian food market, which at US$ 182 billion accounts for about two thirds of the total Indian retail market, has seen the entry of Yum! Restaurants which announced it will invest up to US$ 150 million (about Rs 700 crore) in India where it will compete with companies in India such as Nirulas and Haldiram in the country's organized food and beverage retail sector.
In a recent development that is seen as the global emergence of the Indian FMCG sector, the consumer care and lighting division of Wipro announced its acquisition of the Yardley business in Asia, Middle East, Australasia and certain African markets for US$ 45.5 million from the United Kingdom-based Lornamead Group. Meanwhile the IT division of Wipro, Wipro Technologies, joined some large IT companies in India, including Tata Consulting Services (TCS) and Infosys, in beating estimates for the second quarter of the year 2009. IT companies in India are also seeing the return of big deals with HCL Technologies, Wipro, and Infosys bagging significant deals so far in 2009.
The company’s information technology arm, Wipro Technologies, meanwhile saw its second quarter profits rise 19 per cent to Rs1,162 crore, beating analysts’ estimates. This increase in profits for the company come on the back of significant overseas deal wins and improved demand for services in the United States. Indian information technology companies, Infosys and TCS also posted strong second quarter results and forecast higher growth. In the sphere of (informational technology enabled services) ITeS, Infosys BPO has acquired the US company McCamish for an upfront consideration of US$38 million.
India’s top-ranking status in the field of basic research came in for mention at the India Eco Summit held recently, where the panelists discussed whether, and how, India could become an innovation hub in the near future, given India’s strengths in science and technology and research and development. The governments of Australia and India have launched a US$ 100 million collaboration project on science and technology including green technology to combat the challenges in water, energy, health and environment as a result of climate change.
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2009-Aug-21 - Indian retail to see better days with revival in economy
The retail business in India is witnessing resurgence with novel ideas like revenue-sharing with realtors coming into prominence. The India advantage still holds in terms of lowered real estate prices helping retailers to consolidate their businesses. Several government policies released in the recent past is helping companies to push growth into positive territory.
Spencer’s, the retail arm of the Rs 15,000-crore RPG Enterprises, is pumping in Rs 100 crore to open 10 to 12 large format stores across the country during 2009-10. “These stores would be hypermarts and supermarts of the size of 10,000 sq ft to 30,000 sq ft and would be located in Chennai, Bangalore, Andhra Pradesh, Kolkata and NCR," said Sanjiv Goenka, vice-chairman of RPG Enterprises. For Spencer's too, Goenka is exploring the option of revenue-sharing model with realty owners for its new stores.
Future Group subsidiary Pantaloon Retail is planning a special purpose vehicle (SPV) to raise up to Rs 500 crore by offloading its non-core assets and is hoping to ensure that its restructuring plans are compliant with foreign direct investment (FDI) policy guidelines. At present, FDI is prohibited in multi-brand retailing, and only 51 per cent FDI is allowed in single-brand stores.
Watch and jewellery retailer, Titan Industries, is scaling up its retail operations to step up its retail presence. It plans to add 40 World of Titan stores across India by the end of 2009-10. It has lined up a slew of marketing initiatives to boost sales, which include 'Titan Exchange Offer 2009'.
AVG Technologies, global anti-virus maker, too is making its various anti-virus suites in several large format retail stores in India. Operating in India through its master distributor, Milestone Interactive, AVG products will now be available at retail outlets such as Croma, HyperCITY, Reliance Digital, jay Sales, Landmark and P3.
Industrial and manufacturing output improving the economic climate in June 2009 has helped overcome the effects of drought, according to the Finance Minister. This has resulted in improved retail sales and performance of several majors.
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2009-Jul-9 - Consumer spending in India on the rise
The Indian fast-moving consumer goods industry, consumer durables and automobiles have responded positively to the sops offered by the Finance Minister, Mr Pranab Mukherjee in the budget for 2009-10. The very nature of the measures taken such as implementation of goods and services tax (GST), removal of excise duty cuts etc. is proving to be favourable for these industries and the indices too shot up indicating improved sentiment. Overall, these sectors reflect the socio-economic conditions in the country the most. With rural spending increasing both by the government and individuals, these sectors are likely to experience growth in the range of 10-18 per cent in the coming years and increase four times over in the next 10 years according to a recent industry research report. Bullish rural growth plans of major fast moving consumer goods ( FMCG) players are helping increase growth. Amit Burman, Vice Chairman, Dabur India, agrees: "Rural India accounts for almost 40 per cent of the industry’s sales. The government’s decision to extend the loan waiver scheme in view of the delay in monsoons and offer subsidised loans (at 6 per cent) for farmers who have paid their dues in time would put more money in their pockets. This move would go a long way in giving the rural economy and consumerism a big boost." Pinakiranjan Mishra, Partner & Industry Leader, Retail & Consumer Products Practice, Ernst & Young, concurs: "This means that a lot of the income in the hands of rural consumers and this will go towards buying consumer products." According to M. S. Banga, president (Foods, HPC) of consumer products giant Unilever, the government's focus on stimulating rural demand and all the measures to put money in the hands of consumers will go a long way. "We are doing well as a nation and from here on, we can only look upwards. Consumption-led focus is a great way to get going. We must remember not many geographies are seeing the kind of growth which we are seeing," said Mr Banga. Consumer electronic majors, such as LG, Samsung, Godrej and Philips, also expect their businesses to strengthen. These companies are working out strategies and products specifically addressing the market, apart from focussing on adding strength to their distribution network there. Samsung plans to expand its sales channel by 25-30 per cent in rural India. Meanwhile, LG has outlined plans to invest around US$ 40 million towards development of entry-level products targeted at rural markets. Presently, the urban markets account for around 50 per cent of sales in the Rs 25,000-crore consumer electronics industry, tier-II and -III towns for 30 per cent from and rural India for the balance 20 per cent. No wonder, the consumers are all out to buy and buy more, and enjoy spending for a change. |
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2009-Jul-2 - Indians looking forward to improving economic performances
Current events and happenings in the country are leading us to believe that a recovery of sorts is occurring, boosting the economic morale in India. Amongst the various Indian industries that have been successful in bucking the global contagion and are showing good numbers are the Indian telecom, banking and biotechnology sectors. The country added over 8 million subscribers during May 2009, taking the total GSM subscriber base to over 30 million, registering a growth of 2.78 per cent. The country’s largest telecom operator, Bharti Airtel that reached the 100 million subscriber mark (fixed line and wireless) achieved a 2.91 per cent growth in its wireless subscriber’s base taking its total wireless subscribers’ count to 99.5 million. Vodafone-Essar, the second largest GSM operator in the country registered a 3.55 per cent growth in its subscriber market share, adding further 2.5 million subscribers. The banking sector especially public sector banks did well enough to garner ample credit and deposits on the back of increased economic and robust market activity. In 2008-09, total advances grew at 17.3 per cent while total deposits grew by 19.8 per cent. Spending on infrastructure and the new fiscal reforms are likely to propel further growth. Mr. Philip Kendall, Senior Sector Manager (International Biotech and Pharma) with the United Kingdom Trade and Investment arm recently observed, “India has a relatively young biotech sector and all the ingredients for growth, such as quality services and businesses”. This is indicative of the milestones that the biotech industry has begun to achieve, what with US-based and European biotech companies wanting a pie in the sector to not only grow but to also buck globally difficult times. The textile industry has in the meanwhile found a savior in form of the newly inducted textiles Minister, Mr. Dayanidhi Maran, who stated that “considering the current developments and technological advancement, it is crucial to evolve a National Fiber Policy. My priority is to get some relief for the industry in the short term. Once the industry picks up, the rest will fall in place.” The perfume industry is witnessing an upheaval with the entry of Giorgio Armani, one of the top luxury apparel and accessories brands, which recently launched its first ever ‘super-luxury’ range of Prive perfumes in India in collaboration with L’Oreal International. It is scheduled to open 10 outlets offering perfumes in the luxury segment across Delhi, Mumbai and Bangalore out of which six will come up by May end. The company will be selling a wide range of eighty fragrances except for its super premium Prive range in Lifestyle and Shopper’s Stop stores. |
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2009-Jun-16 - Indian Economy and Auto Industry
The Indian auto industry has lately had some things to cheer about, while awaiting the economy’s revival. While a part of the Indian populace is debating if there would be sufficient space in the country to park Nanos touted as the world’s lowest-priced car, on the other side of the hedge, a variety of global auto manufacturers are making their presence felt already with jazzy variants in all—lower, middle and upper—segments. These majors are bent upon contributing to improvement in economic climate . Market trends in April 2009 are indicative of the tilt of the consumers towards newer products, thanks to the government’s stimulus efforts and policies. The segment has, in fact, witnessed sales of almost 100,000 cars in April 2009, according to research information provided by industry body, Society of Indian Automobile Manufacturers (Siam). Incidentally, the variety now available due to the deluge of foreign direct investments into the sector by global majors such as Honda, Volkswagen, Mercedes, Ford, establishing businesses in India, is offering a lot of attraction to the buyers. No wonder, Jnaneswar Sen, marketing V-P for Honda Siel Cars India (HSCI), is upbeat about the demand for Rs 700,000-Jazz. "The car will give a brand as well as a value proposition to customers. The idea is to create an all-new category." With more than 70 per cent localisation of the cars currently, it is expected that these cars shall be produced indigenously in hubs located across the country. We may also see Nanos helping Tata Motors to attain the second largest auto manufacturer position in the country edging out Hyundai. Industry experts feel that prospective two-wheelers buyers may end up leaning towards the Nano. The luxury market players, Mercedes, Rolls-Royce, Volkswagen with its Polo and Jetta models and Honda—which sells its Civic model in the upper end—are all tapping many Indian millionaires, whose number has also risen parallely.
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2009-Apr-8 - Satisfactory outcome at G-20 summit.
Prime Minister Dr Manmohan Singh was back from the G-20 summit held at London recently with a smile. The outcome has been satisfactory, he said. President Obama, in his meeting with the PM, had credited Dr Singh with India’s growing financial stature in the world economy. Obama described the PM as a "wise and marvellous" man at an individual conference. President Obama even hailed India's "high stature" because it had "unleashed economic forces" and said a lot of it had to do with "the wisdom of Dr Singh".
Dr Singh’s efforts along with the other leaders at improving the economic climate seem to be paying off. According to Dr Singh, India too had provided a fiscal stimulus of about four percent of its GDP ie., approx. Rs 1,20,000 crore in 2008-09. This will help the country's growth rate to reach a little less than seven per cent, comparatively higher than most other economies. "We hope to be able to achieve a similar growth rate in 2009-10, with continuing reliance on monetary and fiscal policy. Active contra-cyclical policy must be a priority item on our agenda and global markets are looking to see if we are united on this issue," he said.
The agenda at the summit concluded with pumping of US$ 1.1 trillion into International Monetary Fund for providing stimulus for the revival of world business, removal of protectionist measures raids on tax havens and strengthening the global financial system through supervision.
Dr Singh reaffirmed India’s commitment to the said agenda and promised that more free trade agreements would be arrived at with countries. This would facilitate setting up of businesses in India and thereby improve the foreign direct investment flows. Recent industry research by IDC too reveals the growing optimism of Indian Chief Information Officers (CIOs) on bucking the economic slowdown and rejuvenating the economy earlier than anticipated.
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2009-Mar-29 - Indian Economy after the third stimulus package: key sectors and their performance.
After the announcement of the fiscal stimulus packages, the first of which was unveiled in December 2008, the Indian economy has started recovering. Changes in government policy with regard to foreign direct investment, among others, have changed the economic climate. Cabinet secretary K M Chandrashekhar said "I think we are seeing the first clear signs of a turnaround. The spending on flagship and infrastructure programmes and steady hikes in MSPs for wheat and rice seem to have kept the economy afloat, driving demand," he said.
Industry research reveals the following sector trends:
Cement: According to industry resources, the cement sector has grown 9.97 per cent in December 2008 as compared to November and the year on year increase is 11 per cent. Cement and steel are seen as key drivers and with the construction sector, and have a significant impact on the growth sentiment.
Automobiles: According to industry research, in January 2009, the passenger vehicles sector showed a 32 per cent rise over December 2008 whereas the increase for commercial vehicles is 23 per cent over a similar time frame. The sector has been attracting investments, especially foreign direct investment from companies such as Mercedes Benz.
FMCGs: The trends in this sector reveal that the sector has been recording growth. There is a record growth in year on year terms at 26.4 per cent for the quarter ended December 31, 2008, according to a top bureaucrat.
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2008-Dec-31 - Indian business and economy after the Mumbai attacks.
The terror attacks in Mumbai on November 26, 2008 may have unsettled corporate India, but only temporarily. In the face of adversity, corporate India stood united to overcome this crisis, and emerge stronger, determined to ensure that the attacks did not vitiate the economic climate, and that the economy does not unduly suffer because of the attacks. As information about the attacks in India spread, there were concerns regarding investment, especially foreign direct investment into India which could be adversely affected. As more people sought information on India from various industry resources and bodies, corporate India spoke in one voice to say that they would do everything within their capacity to ensure that the economic climate remained stable, and positive. India Brand Equity Foundation, a public-private partnership between the Ministry of Commerce and Industry, Government of India, and the Confederation of Indian Industry, has been showcasing the commitment of corporate leaders through news articles that captured their sentiment and belief.
Their belief in the economy was echoed by foreign investors too. On November 26, 2008, the Finance Ministry stated that the government has approved 32 foreign direct investment proposals, while Indo-Arab trade (excluding oil trade), which stood at $30 billion in 2006-07, is expected to touch the US$ 100 billion mark in the next two-four years. According to industry resources, India witnessed a 36 per cent rise in investments during the July-September 2008 period and the investments continue to rise. Industry research revealed that the industry was confident of sustained growth in the Indian economy, especially with regard to foreign direct investment. The Confederation of Indian Industry said, “The GDP figures reaffirm our belief that the Indian economy remains resilient in the face of headwinds.”
Given the measures undertaken by the government to boost the economy, the firm resolve displayed by corporate India to ensure the economic climate remained positive, India is poised to attract greater investments, especially foreign direct investment in the coming years.
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2008-Jun-13 - Business Opportunities in India: 5 Key Sectors.
It’s official ! India is happening. With an economy growing at the rate of 9 per cent, business opportunities in India are increasing more than ever before. So much, so that Investors around the world are making a beeline for doing business in India. The FDI Confidence Index 2007 by A T Kearney shows India as second most attractive destinations for foreign direct investment.
Obviously, opening up of the market in the beginning of the nineties is paying dividends. Higher income generated at the bottom of the pyramid has fuelled the high octane growth of business opportunities in India across all sectors.
Lion’s share of the business opportunities in India exists in the knowledge intensive industries like, Information Technology. Its enormous talent pool available at a reasonably low cost helps India to edge out the competition. According to a NASSCOM-Deloitte study, this sector has contributed 5.2 per cent of India’s GDP in 2007.
Some other sectors that offer maximum business opportunities in India are:
Telecom: Five leading telecom companies in the world have already invested large amounts to cash in the business opportunities in India’s telecom market. The sheer population of India reflects the growth potential of the segment.
Oil and Gas: With a 25-50 per cent lower capital cost alongside the strategic location on the route of Middle East crude for East Asian and Pacific-rim markets India is fast emerging as the global hub for oil refining.
Infrastructure: Growing at a rate of 8.6 per cent (2006-7), this segment offers tremendous business opportunities in India.
Retail: India tops the AT Kearney's annual Global Retail Development Index (GRDI) for the third consecutive year, maintaining its position as the most attractive market for retail investment.
Apart from the above, huge business opportunities in India lie the sectors like, financial services, healthcare and real estate.
In the post reforms period, setting up a business in India, is not a worry at all. The elimination of license raj has been able to cut off bureaucratic red tape to much extent. The liberal regime has shaped up an investor friendly economic climate over the years.
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India offers business opportunities in an ideal investment climate. While its foreign direct investment policies are conducive to setting up business in India, driving the unprecedented growth are resources such as talent, market, and the Indian industry.
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