Virgin Atlantic eyes growth in India, US

Source: Business Standard

CEO rules out investment in India, feels UK travel bond will not jeopardize travel.

After concluding a joint venture deal with Delta Airlines, Virgin Atlantic Airways was eyeing a bigger pie of the lucrative India-US market, Virgin Atlantic’s chief executive Craig Kreeger said on Monday. He ruled out investment in an Indian carrier, saying Virgin Atlantic was in talks with global airlines for code sharing on its routes within the UK.

Known for its flamboyant and trendy image, Virgin Atlantic is a minnow among airlines due to a small fleet and limited network. Though it flies to Delhi and Mumbai daily, as well as to nine cities in the US, it has a smaller network compared to British Airways, which flies to five cities in India and twenty destinations in the US. Along with its code-sharing partner American Airlines, British Airways could offer 200 additional destinations.

“We are seeing growth in the India-US market. The combination of our excellent timing and our products and services is working well for us,” Kreeger told Business Standard. The tie-up with Delta, which acquired Singapore Airline’s 49 per cent stake in Virgin Atlantic earlier this year, offers the airline an opportunity to expand the US network.

The two airlines have already announced code-shares, reciprocal frequent flyer programmes and lounge access and are awaiting the US government’s approval to cooperate on creating joint schedules, fares, etc. Kreeger said the joint venture was likely to be kick-started in January 2014. The deal allows Virgin Atlantic to sell on Delta’s flights beyond London to points in the US, as well as on Delta’s domestic routes in the US, increasing its revenue possibilities.

Virgin Atlantic also plans to scale up its corporate business in India. “Last year, we entered the Mumbai market with a different approach. We took a valuable asset, a peak time landing slot in London. We felt this market needed connectivity to the US, Manchester and Scotland. From both directions, we are able to offer greater connections. We are actively involved in expanding corporate sales,” Kreeger said.

He refused to specify on expanding code-share with Jet Airways. The airline was in talks with various carriers that didn’t partner British Airways, he said, adding Virgin Atlantic was keen to connect on domestic routes in the UK. The airline was evaluating plans to join Air France-KLM-Delta-led SkyTeam, a global grouping of airlines, he said.

“Security of borders and immigration is in the purview of the government but I have expressed concern to the British High Commission in India over the proposed bond for Indian travellers,” he said, adding any possible restriction would only have a modest impact on travel to the UK. According to information made available by the High Commission, if applicable on Indians, the move would impact less than one per cent of UK visa applicants, Kreeger said. “The visa acceptance rate is 90 per cent. So, this will not impact any of the 90 per cent who are currently getting a visa. More impediments in the way of transportation are not good, but I am optimistic its impact would be modest,” he said.

India on the brink of its own financial crisis

India on the brink of its own financial crisis

Source: The Guardian

In a reprise of the 1997-98 Asian crisis, India’s stock market is plunging, bond yields are nudging 10% and capital is flooding out of the country.

India’s financial woes are rapidly approaching the critical stage. The rupee has depreciated by 44% in the past two years and hit a record low against the US dollar on Monday. The stock market is plunging, bond yields are nudging 10% and capital is flooding out of the country.

In a sense, this is a classic case of deja vu, a revisiting of the Asian crisis of 1997-98 that acted as an unheeded warning sign of what was in store for the global economy a decade later. An emerging economy exhibiting strong growth attracts the attention of foreign investors. Inward investment comes in together with hot money flows that circumvent capital controls. Capital inflows push up the exchange rate, making imports cheaper and exports dearer. The trade deficit balloons, growth slows, deep-seated structural flaws become more prominent and the hot money leaves.

The trigger for the run on the rupee has been the news from Washington that the Federal Reserve is considering scaling back – “tapering” – its bond-buying stimulus programme from next month. This has consequences for all emerging market economies: firstly, there is the fear that a reduced stimulus will mean weaker growth in the US, with a knock-on impact on exports from the developing world. Secondly, high-yielding currencies such as the rupee have benefited from a search for yield on the part of global investors. If policy is going to be tightened in the US, then the dollar becomes more attractive and the rupee less so.

But while the Indonesian rupee and the South African rand are also feeling the heat, it is India – with its large trade and budget deficits – that looks like the accident most likely to happen. On past form, emerging market crises go through three stages: in stage one, policymakers do nothing in the hope that the problem goes away. In stage two, they cobble together some panic measures, normally involving half-baked capital controls and selling of dollars in an attempt to underpin their currencies. In stage three, they either come up with a workable plan themselves or call in the IMF. India is on the cusp of stage three.

India Inc presses panic button on sagging rupee, economy

Source: Business Standard

Indian companies gearing up for new ‘normal’ for rupee.

With rupee ending at an all-time low of 63.13 a dollar, chief executive officers (CEOs) of top Indian companies are redrawing their currency risk strategies as a “new normal” for the rupee is fast emerging.

Some of the top companies such as Reliance Industries, Birlas, Essar, Adani group, and the Tatas have huge exposure in foreign currency and any change in the rupee’s value increases their costs of operations in a big way.

“I am disappointed, not surprised, with the way the rupee is falling,” says Rahul Bajaj, chairman of Bajaj Auto and one of corporate India’s vocal voices. “We are paying for the last four years of inaction and absence of reforms. The government has spent a lot of money in loan waivers, NREGA (employment guarantee scheme) and Food Security Bill and all these populist measures have now added to the deficit. We are not opposing pro-poor moves. We are against populist measures. We should be treating the disease and not the symptom. Now is the time to change policies.”

Mahindra & Mahindra chairman Anand Mahindra recently said the rupee is falling without a parachute and capital controls announced by the Reserve Bank of India (RBI) is just taking India back to the 1980s. The mood in the corporate camp is sombre. This is in spite of leading CEOs’ many suggestions to the Prime Minister during their meeting on July 29 on how to ring-fence the rupee. However, since then, the rupee has been continuing its downward journey.

Other CEOs say the economic slowdown and lack of initiatives by the United Progressive Alliance (UPA) government is unprecedented which is taking the country on the road to a complete shutdown. “There are no takers for infrastructure projects, and no growth in order book due to land acquisition problems, environmental clearance and corruption. This is perhaps one of the worst times for Indian companies to do business in India,” said the CEO of an infrastructure company asking not to be named.

RBI has already acted aggressively, tightening liquidity and raising interest rates, banning companies and individuals from spending money abroad in an attempt to stem the ongoing rupee weakening. RBI’s surprise tightening has been stark, but similar to that in early-1998, soon after the Asian crisis. This time, however, CEOs say that none of these measures is helping the rupee stop its slide against the dollar.

Bajaj says the government should change its policies instead of trying to manage the Indian currency. CEOs such as S Gopalakrishnan, executive vice-chairman of Infosys, say it would have been more appropriate to initiate policies that prevent an influx of non-essential imports such as coal and iron ore, and augment forex inflows by encouraging foreign direct investments. For this, a conducive and stable policy regime is needed, they add. Foreign institutional investments should also be liberalised by removing short-term capital gains tax.

According to the CEOs, another worrying factor is that oil prices are going up while the rupee is falling. With Brent crude at around $110 a barrel, its impact on inflation and Indian economy is still not being taking into account.

Under the World Trade Organisation rules, India can always impose a higher import duty on expensive, foreign-made cars and this is the right time to take action. “This was something the Prime Minister was made aware of on June 29. Importing coal into India when Coal India is sitting on massive reserves is a shame, they say. The government should immediately take action to part privatise Coal India so that all those power plants, which have shut down due to lack of coal can be revived,” said a CEO.

For many companies including the Adanis, Lanco and Reliance Power, the falling currency has been a double whammy. Many companies had taken massive loans from abroad without taking a forward cover.

They are also importing raw materials from overseas. With the surprise fall in the rupee, many companies are staring at the prospect of a default. “This is like the replay of the 2008-09 crisis. The only difference is that this time the government is groping in the dark and has no clue how to stop the slide,” said the CEO quoted above.

Analysts say sectors such as chemicals, paper, auto ancillaries, power and steel are the most affected from rupee depreciation. Among these sectors, mid-sized companies with exposure to forex risk but limited expertise or intention to hedge might be the most adversely affected.

CEOs say in the coming days, the government could look at the option of increasing import duty on select commodities, such as electronic goods, to reduce the import bill. The electronic goods import bill was $31.5 billion in FY13 (ended March 2013).

A similar 150 per cent import duty on expensive cars may also be considered. A sharper hike in diesel prices, although politically difficult, would also curb the oil import bill, which stood at $169 billion in FY13.

BJP launches Canada unit to connect with Indian diaspora

BJP launches Canada unit to connect with Indian diaspora

Source: One India News

TORONTO: Overseas Friends of Bharatiya Janata Party (OFBJP) has launched a Canada unit with chapters in four major cities – Toronto, Vancouver, Montreal and Ottawa – to connect with the Indian diaspora.

The Canada chapter of India’s main opposition party was formally launched Monday by OFBJP global convener Vijay Jolly at a one day forum organized in Mississauga, Ontario, Canada under its “global community overreach programme”.

OFBJP Canada shall focus on improving cultural and heritage links between the people of Canada and India, Jolly said.

OFBJP delegates from Vancouver, Montreal, Ottawa and Toronto attended the day long meeting at Hilton Garden Inn at Mississauga, according to a media release.

Jolly nominated the following as conveners of the four chapters: Azad K. Kaushik (Toronto), Shivendra Dwivedi (Montreal), Aditya Tawatia (Vancouver) and Shiv Bhaskar (Ottawa.)

Addressing the gathering, Jolly noted that people of Indian origin have played a significant role in development of Canada and for close Indo-Canadian friendship and understanding.

With a population of around 1.2 million in a total Canadian population of 33 million, people of Indian origin have made immense contributions in medicine, IT, commerce, sports, politics, media, social and cultural spheres.

A book titled “Social Harmony” by Narendra Modi, Gujarat Chief Minister and convenor of BJP’s central election campaign committee was presented to the newly appointed OF BJP Canada convenors.

Our medical schools must not become shills for big pharma

Source: The Globe and Mail

Most Canadians might be surprised to learn that medical students in Canada are routinely taught by faculty who have financial ties, and work in partnership, with drug companies. Conflict of interest (COI) policies at medical schools are important to ensure that students get an unbiased education based on the best available clinical evidence, free of industry-sponsored, commercially-driven information. After all, these students go on to become our doctors and we want the best doctors education can provide.

So, do medical schools in Canada lack appropriate conflict of interest policies or are they simply not following them?

In a study published in PloS One, we examined the COI policies at all 17 medical schools across the country. Our findings reveal a glaring problem, and something that should concern all of us. The majority of medical schools (12 of 17) have generally weak or non-existent COI policies, and four schools had policies that were moderately restrictive. Only one medical school – Western University – had stringent COI rules.

In other words, the bulk of our doctors-in-training in Canada are receiving health information that is potentially biased and misleading.

Here’s a telling example: Between 2002 and 2006, the University of Toronto held a pain-management course for medical and other health science professional students that was partly funded by grants from Purdue Pharma LP, the maker of OxyContin. As part of the course, a chronic pain-management book – funded and copyrighted by Purdue Pharma – was distributed to the students free of charge by a lecturer who worked in partnership with Purdue Pharma and was external to University of Toronto. The wording in the book exaggerated both the benefits and the approved uses for these medications, based on the current evidence at that time. Despite recognition of these concerns by the university after a student complained, those who attended the sessions were never informed of the bias or the problematic content of the lectures and book (which was used in a related course up to 2010).

The most poorly regulated areas noted in our study include curriculum selection, receiving free drug samples, visits from pharmaceutical sales representatives and taking part in speaking engagements on behalf of pharmaceutical companies.

Bottom line: Unrestrictive policies allow industry to influence medical residents’ education about appropriate, effective and safe medicines, as well as prescribing choices.

Free drug samples have been found to increase the likelihood that medical residents will choose to provide medications to patients that cost more than equally effective prescription treatments, or other non-pharmaceutical options. Frequent visits by drug sales representatives are associated with influencing prescribing practices, resulting in more frequent prescribing and poorer prescribing quality.

The biggest concern, however, is the lack of education provided to medical students about the pervasiveness and effects of COI relationships with drug companies. Without such guidance, medical students, who will become prescribing physicians, graduate without being fully equipped to deal with either potential conflicts of interest in medical practice, or the influence of industry promotion on clinical judgement.

Our findings mean that industry has the ability to influence the resources provided and information that is taught to medical students. Without effective, stringent policies to regulate industry’s interactions with medical students and faculty, drug companies are granted the ability to be present in medical schools and play notably influential roles in the clinical training of medical students.

If we want the best doctors in Canada, our medical schools need to revise and improve their policies to regulate conflicts of interest between medical faculty, residents and the pharmaceutical industry. These policies should address the medical curriculum and the ways in which relationships with pharmaceutical firms may affect the attitudes and information that is taught to medical students.

Medical students should be educated by medical faculty using the best available clinical evidence that is unbiased by industry so that when medical students graduate, they are able to provide their patients with the best, most effective, and safest treatments possible.

Indian innovators receive global attention

Indian innovators receive global attention

Source: Connect – Canada in India

Three Indian innovators were among the 20 finalists who got a chance to participate in the C2-MTL conference in Montreal, Canada. This conference, which explored the relation between commerce and creativity, provided the participants with a platform to explain their innovations to top industry leaders from around the world and a chance to meet leaders like Richard Branson and Steve Brown. Read more about these enterprising young innovators.

‘Bilateral trade with Canada may touch $15 billion by 2015’

Source: Press Trust of India via Indian Economic Business News

India’s bilateral trade with Canada is expected to grow to USD 15 billion by 2015 from the present USD 5.8 billion, Canadian Consul General Richard Bale said recently. “Currently the bi-lateral trade stands at 5.8 billion dollars and is expected to grow to USD 15 billion by 2015. Currently there are 700 Canadian companies in India,” Bale said at a conference on Renewable Energy. During the India visit of Canadian Prime Minister last November, both the Prime Ministers set an ambitious target to conclude a Comprehensive Economic Partnership Agreement (CEPA) by the end of the year that would boost the Indian and Canadian economics by USD 6 billion and result in a significant increase in bilateral trade, Bale said. We believe that by combining Canadian technology and expertise with Indian talent, Canadian and Indian manufacturers can develop and deliver advanced and competitive products and services for India, Canada and third country markets, he said. The government of Canada has committed USD 13.8 million over five years to establish Canada-India Research Centre of Excellence. The Centre will fund greater collaboration between Indian and Canadian researchers and is expected to be operational by year-end, Bale added. Canadian investments in science and technology currently amount to USD 12 billion per year and have created one of the strongest science and technology bases in the world, he said.

Harper Government continues to deepen Canada-India Partnership

Source: Department of Foreign Affairs and International Trade via Indian Economic Business News

On May 17th, The Honourable Ed Fast, Minister of International Trade and Minister for the Asia-Pacific Gateway, and the Honourable Bal Gosal, Minister of State (Sport), met with members of the Indo-Canadian business community in Brampton, Ontario, to highlight the benefits for small and medium-sized enterprises (SMEs) of an ambitious Canada-India comprehensive economic partnership agreement (CEPA). The event’s hosts were the Indo- Canada Chamber of Commerce and the Brampton Board of Trade. “With SMEs accounting for more than 99 percent of companies in Canada, our government understands the crucial role that these businesses play in generating jobs, growth and prosperity in every region of our country,” said Minister Fast. “That’s why we continue to work hard to open new markets for our exporters in the largest, most dynamic and fastest-growing economies in the world, including India.” Further fuelling Canada’s growing trade with India are our strong people- to-people ties,” said Minister Gosal. “Nearly one million Canadians of Indian descent enrich our communities in cities and towns across Canada, and our government is committed to utilizing these strong links to build a partnership that will lead to new opportunities and new sources of prosperity in both countries.”

Canada lures Indian Entrepreneurs with New ‘Startup Visa’

Source: Silicon India via Indian Economic Business News

The Canadian government has launched attractive schemes and provisions, to lure potential Indian entrepreneurs who are struggling to get their green cards or trying to extend their H- 1B visas in the United States, as per a report by Business Insider. Mr. Jason Kenney, Canada’s Minister of Citizenship, Immigration and Multiculturalism, has been aggressively campaigning to promote their governments move on offering startup entrepreneurs a new visa. The new “startup visa” was launched by the government in April. It will grant immediate permanent residency and a subsequent path to citizenship to those qualifying entrepreneurs, who can start a business in Canada and have attracted investments for their start-up ventures, and raise enough capital funds and angel investors.

In a first for India, Gujarat plans 5-yr export policy

Source: Economic Times via Indian Economic Business News

Gujarat, which accounts for about a quarter of India’s total exports, is mulling a five-year export policy to focus on value-added exports in sectors such as textiles, agriculture and dairy. The move by the top exporting state in the country comes on the back of sagging efforts by the centre to boost dwindling exports. The first state in the country to have an export policy, Gujarat plans to increase the share of exports from the state from 25% to 30% in five years. As a precursor to the policy, the Federation of Indian Exports Organization undertook a study for Gujarat on the state’s export competitiveness and identified sectors with export potential. “We are working on improving exports from the state and will take steps to increase the share to 35% of total India’s exports by 2020,” said a state government official. The government may announce incentives ranging from exemption from value-added tax (VAT) in some sectors to focus market scheme and focus product scheme to offset high freight cost and other externalities to select international markets and promote products with high-export intensity. Given that over 90% of Gujarat cotton goes to other states for value addition, emphasis would be laid on readymade garments. The state already has potential in the textile sector, as nearly 23% of the state gross domestic product comes from textile and related industries.

Goods and services tax to be in place by 2014: Prime Minister

Source: Times of India via Indian Economic Business News

Prime Minister Manmohan Singh said recently that the much-awaited goods and services tax (GST) will become a reality by 2014 regardless of who forms the government after the next Lok Sabha elections, even as he counseled the foreign investors to come to terms with problems that India poses as an investment destination. Mr. Singh was responding to Hiromasa Yonekura, Chairman of Japan India Business Leadership Form, who told the PM that differences in tax regimes of each state and the complicated tax structure were big obstacles for investments in India. While saying that it was India’s objective to move towards a goods and services tax, the PM said: “But India is a federation and in federation there are difficulties of getting all the states to agree and surrender their tax power in favour of the GST. But I am confident that we will overcome that hurdle.” He also suggested that the opposition to GST was for political reasons which will melt once the 2014 elections are out of the way. However, Singh tempered his pitch for Japanese investments by advising potential business partners to adjust to Indian reality. He sympathized with the demand of Japanese and other foreign bankers that they be allowed to open more branches in metropolitan centres.

Soybean Crop in India Seen at Record as Rally Spurs Planting

Source: Bloomberg

Soybean farmers in India, Asia’s biggest shipper of the animal feed extracted from the oilseed, may boost planting this year as prices head for a fifth straight year of gains, potentially lifting output to a record.

Area under the oilseed may climb 5 percent to 7 percent from 10.7 million hectares (26.4 million acres) in 2012, Rajesh Agrawal, a spokesman for the Soybean Processors Association of India, said by phone from Indore. The harvest was an all-time high 12.6 million metric tons last year, he said.

Soybean futures in India have rallied every year since 2009, almost doubling in the period, as demand for the animal feedincreased from buyers in Iran, Japan and Southeast Asia. A bigger harvest may boost shipments and accelerate a decline in Chicago soybean-meal futures, which have fallen 20 percent since climbing to an all-time high in September. It may also cut cooking-oil imports by the world’s second-largest buyer.

“Area may increase in Maharashtra and Madhya Pradesh,” said Agrawal, referring to the country’s biggest growing states. “Planting should be encouraging this year because farmers have got good returns in soybeans compared with cotton.”

Soybeans have climbed 19 percent in Mumbai this year, more than the 6.1 percent gain for cotton. The area under cotton may drop this year after the weakest monsoon rains in three years deepened a water shortage in the main growing regions, showed a Bloomberg survey published April 8. Sowing begins with the onset of the monsoon in June and the crops are harvested from October.

Normal Rains

The monsoon, which brings more than 70 percent of India’s rain, was 8 percent below average last year, according to the India Meteorological Department. That’s reduced water available to irrigate crops in Maharashtra, Gujarat and Karnataka states.

Drought in some parts of Maharashtra, the second-biggest grower of soybeans and sugar cane, may not hurt planting and yields this year, Agrawal said. Madhya Pradesh accounts for almost 60 percent of India’s soybean harvest.

“Soybean needs three to four inches of rain for planting to take place and subsequently doesn’t require as much water as probably sugar cane,” he said. “If rains are normal, then we need not worry about soybean output.”

Rains will be normal this year at 98 percent of a 50-year average of 89 centimeters (35 inches) in the four months through September, the weather bureau said on April 26.

Soybean meal exports from India fell 11 percent to 3.4 million tons in 2012-2013 as farmers held back their produce in the early part of the harvesting season, the Solvent Extractors’ Association of India said. Shipments may cross 4 million tons in the year ending Sept. 30, Agrawal said.

Cutting Imports

The meal for delivery in July gained 0.9 percent to $432.10 per 2,000 pounds on the ChicagoBoard of Trade at 3:35 p.m. Mumbai time. Futures reached an all-time high of $541.80 Sept. 4. Soybean futures rose 0.7 percent to $14.8675 a bushel in Chicago today, while they advanced 0.3 percent to 3,811 rupees ($68) per 100 kilograms in Mumbai.

“A good soybean harvest will also reduce imports of vegetable oil in the country,” Agrawal said. “Output of other edible oils such as peanut and rapeseed will need to grow as well to have a bigger impact on imports.”

Cooking oil imports by the South Asian nation, the biggest consumer after China, jumped 12 percent to 5.3 million tons in the six months through April, according to the extractors’ association. India buys palm oil from Indonesia and Malaysia, and soybean oil from Brazil andArgentina.

“We are importing a huge amount of edible oil,” said Vijay Data, president of the extractors’ association. “There is good demand in the market and prices are very good, so farmers will definitely plant more.”

Government appoints five experts to Air India’s board

Source: ZeeNews

New Delhi: The Central Government has appointed five experts from different fields as part-time Directors on the Air India Board, including IIM-Ahmedabad professor Ravindra H Dholakia, to suggest cost-cutting measures for the national carrier.

Civil Aviation Minister Ajit Singh appointed them to utilise their specialised skills to help Air India achieve the targets set by the government through its Turnaround and Financial Restructuring Plans.

Besides Dholakia, other non-official part-time Directors are Gurucharan Das, Dr. Prem Vrat, Air Marshal (Retd.) K.K. Nohwar, PVSM VM, and Renuka Ramnath.

These persons not only have expertise in their specific fields, but also have served in various reputed organisations at highest levels.

Gurucharan Das is a Graduate with Hon. from Harvard University in Philosophy and has worked as CEO of Procter & Gamble India, besides holding high posts in other organisation. Dr. Prem Vrat is M.Tech. and Ph.D. and is presently working as Vice Chancellor and Professor of eminence, ITM University Gurgaon.

Air Marshal (Retired), K.K. Nohwar, PVSM VM, is a military aviator with more than 40 years of experience in the field of aviation. Dr. Dholakia is Ph.D. in Economics and M.A. with distinction, Gold Medallist in Economics and Eco-Metrics.

He is Professor in Economics and Public System of IIM, Ahmedabad. Renuka Ramnath holds a Bachelor Degree of Engineering and MBA with AMP from Harvard Business School.

She is a founder, Managing Director and CEO of Multiples Alternate Asset Management which manages 400 million dollars of Indian and international capital.

3 Petroleum Minister announces launch of Direct Benefit Transfer for LPG scheme in 20 districts

Source: Press Information Bureau via Indian Economic Business News

The Government of India is launching Direct Benefit Transfer for LPG (DBTL) scheme in 20 high Aadhaar coverage districts from 1.6.13. The scheme aims to curb leakages and prevent black-marketing and provide subsidy to consumers in their bank accounts. For the benefit of LPG consumers, OMCs have provided the facility on their web-sites to check whether the Aadhaar number has been attached to LPG consumer number/bank account. For the benefit of LPG consumers, who cannot complete formalities by 1.6.13, a grace period of three months is being given to complete the formalities. After this period, all consumers who have not completed the formality will get LPG cylinders at market price, without any subsidy, till they complete the same.

World Bank sees India growing at 6.1% this fiscal

Source: Hindu Business Line via Indian Economic Business News

The World Bank sees India regaining economic momentum and recording 6.1 per cent GDP growth in the current fiscal. Growth is expected to increase further to 6.7 per cent in 2014-15, the World Bank said in its latest India Development Update, a bi-annual report on the Indian economy. The 6.1 per cent growth forecast for 2013-14 is much higher than the five per cent growth estimated for 2012-13. The World Bank’s optimism stems from positive data points in the recent months in the areas of manufacturing, inflation and better export numbers, said Denis Medvedev, Senior Country Economist, World Bank, India. Despite the current downturn, long-term prospects remain bright for India, said Martin Rama, World Bank’s Chief Economist for the South Asia Region.

Government plans a comprehensive system to extend oilfield contracts

Source: Economic Times via Indian Economic Business News

The government is putting in place a comprehensive system to extend oilfield contracts with private and public companies to help field operators such as Cairn India know well in advance if lease for the oilfield they operate will be extended for another term. Oilfields are leased to companies for 15-25 years, but before the lease expires the company needs to know if it will retain the field so that it can decide whether or not it should invest thousands of crores of rupees to produce oil and gas. To facilitate this, the government has constituted an inter-departmental committee to extend petroleum leases in producing blocks such as BG- operated Panna-Mukta and Tapti oilfields, JTI’s Dholka oilfield and Cairn India’s Rajasthan block. The committee will also decide terms and conditions for such extensions, officials said. “The scope of this committee can be extended to include several other exploration- related issues that may include recent proposal of DGH disallowing eight discoveries in the D6 block because of some timeline issues,” one official said. Last year, the government granted 20.5 sq km additional area in the prolific KG basin to Gujarat State Petroleum Corp, as the company’s fields extend beyond its block located near gas discoveries of Reliance Industries and ONGC.

Setting up of new major ports in the states of West Bengal and Andhra Pradesh

Source: Press Information Bureau via Indian Economic Business News

The Cabinet Committee on Economic Affairs (CCEA) on May 9th approved the proposal of the Ministry of Shipping for:

(i) setting up a new major port at Sagar Island in West Bengal through the Public Private Partnership (PPP) mode by following the extant procedures for project appraisal/approval, including obtaining environmental clearances, etc.

(ii) appointing the transaction advisers and legal consultants and initiate the bidding process for award of the project and to finalize the project structure in consultation with the State Government of West Bengal and the Planning Commission,

(iii) commissioning the techno-economic feasibility reports for the new major port at Dugarajapatnam locations, and
(iv) constituting of an Empowered Committee of Secretaries (ECS), to be chaired by Secretary (Shipping) and comprising Secretary, Department of Economic Affairs, Secretary, Planning Commission, Chairman, Railway Board, Secretary, Road Transport and Highways and Secretary, Department of Legal Affairs, to take appropriate decisions in regard to the project structuring, as well as other implementation related issues.

India’s ‘Mr. Incredible’ tries to bring the country up to speed

Source: Economic Times via Indian Economic Business News

India has long been cited as one of the fastest growing economies in the world, but it hasn’t always been the most hospitable place for business travelers. Ranked 132 out of 185 on the World Bank’s Ease of Doing Business Index, the country is often viewed as a hassle by executives. Part of the problem is that India has grown faster than its infrastructure. “Infrastructure that we created for 2020 are already getting filled up by 2012,” says Amitabh Kant, the man who is planning to bring India up to speed by 2017. Kant already revolutionized his country once. The instigator of the “Incredible India” campaign, he polished India’s flagging tourism image and turned it into a must-visit destination for the discerning traveler. Marketing aside, the campaign made sure journeying through the subcontinent was met with relative ease. Roads were repaved, landmarks rebuffed and the sector as a whole was trained to work with foreign guests. Today, the country sees 6.8 million overseas tourists annually. Now he is tackling what may be India’s most ambitious infrastructure project to date. The Delhi-Mumbai Industrial Corridor, a $90 billion state-run enterprise, will involve connecting the 932 mile stretch between Delhi and Mumbai with new ports, airports, highways and rail links. For Kant, though, the real achievement will be the undertaking’s economic knock-on effect.

India one of the top tourism destinations in Asia

Source: Times of India via Indian Economic Business News

India is one of the top tourism destinations in Asia, according to findings from a CNN global travel survey released recently. The results also position the country as the region’s fourth fastest growing tourism destination and the third most attractive business for investment opportunities, right after China and Hong Kong. One-fifth of CNN’s audience of global travelers considering a visit to Asia Pacific, would consider visiting India in the 12 months and experts say its celebrated culture could be a prime reason. The destination fended off competition from Japan and Thailand to rank as the no. 1 destination in the region with the second richest culture and heritage, with only China scoring more in this category. The study, entitled ‘CNN Consumer Connect – Travel and Tourism 2013’, looks at consumer travel trends, perceptions and behavior, and was hosted on all CNN websites worldwide. It polled more than 3,000 readers based in over 70 countries around the world and included 25 Asia Pacific destinations. Duncan Morris, vice-president of Research at Turner International Asia Pacific, said, “These results are great news for India and the Asia Pacific region as a whole. CNN consumers are discerning, affluent global travelers and they clearly indicate a desire to visit this part of the world to enjoy a particular brand of hospitality, food, culture – everything that makes a travel experience distinctive. At a time where money in the household is perceived to be tighter, spending on travel is still obviously a priority for many.”

Canadian exporters need to find India’s sweet spots

Source: Globe and Mail via Indian Economic Business News

India accounts for less than 1 per cent of Canada’s trade and investment, according to official estimates. Yet, India accounts for 7 per cent of the world economy today. It is expected to rise to 11 per cent by 2030 and to 18 per cent-almost one-fifth-of the world economy by 2060, according to OECD estimates. So how do more Canadian companies actually start taking advantage of opportunities in fast-growth markets such as India? A good starting point is to identify sectors of the Indian economy that land in the “sweet spot” – they are sizable, dynamic, fast-growing, and present relatively few barriers to Canadian businesses. A new Conference Board study, “The Hottest Markets for Canadian Companies in India,” finds many fast-growing, sizable, profitable, dynamic sectors. So the study’s final list of hottest markets includes only those fast-growth sectors that are relatively open to Canadian business. The final list includes eight Indian service sectors, 10 manufacturing sectors, and eight resources or agricultural sectors. In many of these hot markets, Canada has demonstrated international commercial strengths. These industries include: infrastructure and related activities, the auto sector and supply chain, services. The challenges in India are tremendous, but so are the long-term opportunities. India’s growth prospects are far above the meagre rates seen in Canada’s traditional trade partners. With a free-trade deal in the works, and an investor protection agreement negotiated (though on hold on India’s side), Canada has started toward removing barriers for its companies in India.