INDIA NEWSLETTER: FEBRUARY 2006

Economic News

1. FDI inflow to cross US$ 7 billion by March 2006
The Foreign Direct Investment into India is expected to cross US$ 7 billion by 2006, with auto and mining sectors attracting huge amount. FDI may reach a target of US $ 10 billion in the next financial year April 2006-2007.

2. India Everywhere campaign in Davos
During the World Economic Forum's Annual Meet-2006, India mounted a campaign, India everywhere, which created a new awareness of India and of the global Indian entrepreneur. At the breakfast meeting with the Indian Finance Minister P. Chidambaram, Commerce and Industry Minister Mr. Kamal Nath, Planning Commission Deputy Chairman Montek Singh Ahluwalia and the Confederation of Indian Industry President Yogi Deveshwar confidently fielded questions comprising more than 50 CEOs and Senior members of the International Press on the fast but steady pace of Indian economic growth and fiscal policies, infrastructure reforms etc.

3. India can clock 10 percent growth
According to Finance Minister P. Chidambaram, India could easily clock 10 percent growth with greater efficiency and productivity. Speaking at a session on 'New Energy for Indian Reforms', Chidambaram said that the goal of double digit growth rate could be achieved by meeting the pre-requisites of augmenting investment in technology and agriculture, improving competitiveness of the manufacturing sector so that India becomes a manufacturing hub; and by focusing on the expansion of infrastructure.

4. Ericsson to invest US$ 100 million every year in India
Swedish telecom equipment giant Ericsson committed US $ 100 million annually in India for years to come as the country was an important market for them with potential. The telecom services include mobile and wire line broadband.

5. 30 Indian firms in Forbes Top 2000 list
Oil and Natural Gas Corporation, the State Bank of India Group, Indian Oil and Reliance Industries have been listed at the 265th, 269th, 279th and 309th positions respectively in the list of Forbes Global 2000 "Corporate Titans". The companies were evaluated according to four criteria-sales, profits, assets and market value. Indian Energy, Banking and Insurance sectors proved to be the corporate leaders.

6. Mittal is Europe's richest billionaire
London based global steel baron, Lakshmi Mittal, whose Mittal Steel Company is the world's largest steel producer, is the richest billionaire not only in Britain but also in Europe, according to latest research on the super rich by the Luxury Institute. Mittal's personal wealth is estimated at Euros 24 billion. Mittal's recent acquisition in Ukraine has helped him to retain the top spot. He has won this year's 'Asian Achiever's Award' for entrepreneurship and outstanding achievement in the global steel industry.

7. India's software industry looking beyond 2008
India's booming in the IT industry is already looking beyond 2008, according to a NASSCOM position paper outlining the strategy for developing the country's software industry. India's software export is expected to reach USD 50 billion and domestic market size to reach USD 37 billion by 2008.

8. Amul-world's biggest vegetarian cheese brand
India's top dairy cooperative Amul is now the biggest brand for vegetarian cheese with exports hitting a record 600 ton this year and growth of more than 20%. Vegetarian cheeses are manufactured using rennet from either fungal or bacterial sources, which makes them pure vegetarian. Amul exports cheese to the Middle East, USA, Singapore, Hong Kong, Bhutan, Nepal and Sri Lanka. India is the world's top milk producer, with a growth rate 4.5% compared with the rest of the world.

9. BMW announces investments in India
The German car major BMW group announced an initial investment of USD 24 million for its assembly plant to be set up near Chennai and the sales subsidiary coming up at Delhi as part of its action plan in Asia. The BMW 3 series and 5 series are expected to roll out of the plant in early 2007 and are intended for the local market.

10. IFC spots pharma, energy, port for investment in India
The Washington based International Finance Corporation has identified three sectors in India - biotechnology and pharmaceuticals, ports and energy for IFC's participation through equity or aid.

11. New patent laws lure pharma MNCs to India
Multinational pharmaceutical companies are competing with each other to set up operations in India due to the change in India's patent laws. Eisai, Japan's fourth largest pharmaceutical company has rolled out two products into the domestic market. Two of the top ten global pharma companies - Bristol - Myers Squibb and Merck and German pharmaceutical companies plan to start their operations in India. The pharmaceutical sectors have seen the maximum foreign direct investment (FDI) inflow amounting to USD 340 million in 2004.

12. Dr.Reddy's in $564 mn bid for Betapharm
The Indian company, Dr. Reddy's Laboratories Ltd has bid US $ 564 million to acquire German generic drug maker Betapharm, according to Reuters New Agency. In November 2005, Dr. Reddy's acquired Roche's active pharmaceutical ingredients business in Mexico for US $ 59 million.

13. Credibility in Incredible India
At a meeting organized by the Commonwealth Business Council at the Marlborough House in London on the topic "India: The New Paradigm", the Indian Commerce Minister Kamal Nath stated that India "is rapidly ascending the knowledge chain. We are no longer a base only for low-end processes and operations. The unique combination of IT, biotech and a strong pharma and bulk chemical manufacturing base means that high-end R&D in sectors like pharmaceutical research, avionics can put India on the global knowledge map as a vibrant source of intellectual capital for the world".
"The new paradigm was that of a 'credible India' with a six-decade old credible democracy, rule of law, an independent judiciary and free press and an economy witnessing a sustained growth of 7 to 8 percent year after year. India also has foreign exchange reserves of 150 billion dollars and whose merchandise exports will touch 100 billion dollars this year", he stated.

14. Economic Indicators
The nominal GDP has seen a consistent growth from around US$ 300 billion in 1994 to over US $ 600 billion in 2005. The real GDP reached 8.1 % in 2005. The GDP of India is expected to be around US $ 900 billion in 2010, around US $ 5000 billion in 2030 and over US $ 25000 billion in 2050 which would make it the third largest economy in the world, after US and China.

15. Manufacturing sector in India
India is the largest three wheeler market and second largest two wheeler market in the world.
India is second largest jewellery market and largest diamond cutting and polishing center in the world.
India's Textile Industry is the second largest in the world in cotton trade.
The Indian Chemical Industry ranks twelfth by volume in the world for production of chemicals.
India is the third biggest leather producer in the world after China and Italy.
India is world's largest producer of milk, tea and pulses with world's largest livestock population to support food processing sector.
India ranks fifth in the world bauxite reserves next to Australia, Guinea, Brazil and Jamaica.

India is New World Animation Hub

Where do studios from Italy, Germany, Canada, Britain, the US, even Walt Disney and George Lucas go hunting for latest animation talent? India. Using its prowess in cutting-edge information technology (IT) and pool of talented low cost manpower, at par with the best and brightest around the globe, India is the youngest animation hub in the world. Not only does the country have an edge in innovative techniques but animators here are also drawing from its endless pool of myths and legends for good stories to tell. All this is making India hugely competitive in the world of animation that gave some of the biggest hits in Hollywood

Outsourcing of animation productions is the latest to travel to India following its less exciting, though highly profitable parallels like back office work and call centres. In fact, Maya Entertainment, based in India's finance and film capital Mumbai and promoted by the director and actress duo Ketan and Deepa Mehta, even worked for the special effects of Hollywood blockbusters like Star Wars, The Phantom Menace, The Mummy and Stuart Little.

And Toonz Animation, one of the pioneers in the business in India and set up with an investment of $7 million in 1999, now caters to clients from across the globe - from the US, France and Belgium to South Korea. Based in the southern state of Kerala, the company has also produced many acclaimed television series like "Katya and Nutcracker", "Prezzy", "Tommy and Oscar", "Turtle Island" and "The Land of Gnoo" for global clients.

Toonz also made India's first animated television series "The Adventures of Tenali Raman", based on the age-old myth about a clever court jester who solves every problem in a jiffy in ancient India. Broadcast on Cartoon Network, it turned out to be a massive hit and is now being re-telecast on Nickelodeon's Asia feed.

"The future offers boundless opportunities," P. Jayakumar, chief executive officer of Toonz told IANS. "We have positioned ourselves as a top player by collaborating with industry leaders and creating world-class original content," said Jayakumar, whose studio has recently closed a deal with a major US distributor for a series of 39 episodes. It is also working on a full-fledged animated feature film for an Italian client and on the "Brady's Beast" series, a 52-epsiode co-production with French, Canadian and British partners. So great is the demand that Maya Entertainment also runs 17 animation training centres around the country. By 2005 end, it plans to have 50 and next year, Maya hopes to open centres in Thailand and Dubai.

According to the National Association of Software and Service Companies (Nasscom), India's apex IT body, global animation production is poised to grow to $51.7 billion by 2005. By the same year, India's animation industry, currently growing at a rate of 30 percent, is estimated to reach $1.5 billion. And, with local animation design studios gradually establishing their credentials overseas and building their skill sets in this high potential global market, animation production outsourcing to India in poised to boom, believe experts.

According to an animation industry study report, Indian animation production costs are the lowest, as compared to production rates in the US, Canada, South Korea and the Philippines - the major global centres for animation production. While the rates for production of a half-hour television animation programme would be around $250,000-$400,000 in the US and Canada, it is in the region of $60,000 in India, the report says.

India is, however, up against substantial competition from countries within the Asia-Pacific region such as the Philippines, Taiwan and South Korea that have been active in the animation production market for a longer period.

(Courtesy: Indo-Asian News Service)

Tourism - India calls
Rajasthan

The State of Rajasthan is one of the most favored tourist destinations in the world. More that half a million foreign tourists and 12.5 million domestic tourists visited the State in 2003. The magic of Rajasthan is unique in its heritage, culture, sand dunes, forts, safaris, and lush green forests full of wildlife. Rajasthan is often expressed as huge open-air museum with relic so well preserved for the travelers and the curious of the day. It is action-packed with outdoors too; take a safari on horses, camels, elephants or even jeeps with the Aravalis - India's oldest mountain range - in the backdrop, or caress your eyes on the sloppy sand dunes, or trail a tiger or just watch birds on wetland. Or you can choose to pamper yourself in theelavish heritage properties. Rajasthan has something for everyone.

Rajasthan, a northwesterly state of India, is a vibrant state where tradition and history blend with contemporary life styles. People are proud of their heritage and yet open to western values. Modern Rajasthan is bringing in amenities like elsewhere in the world. It has remarkable roads and transport systems. Its roads are trafficked by some of the latest cars and buses, which jostle together with rickshaws, camel carts and horse drawn carriages (tongas). The markets are lined with a shopping extravaganza with some of its store being very posh. Modern Rajasthan has some of the best banking service and is well serviced by ATMs honoring all international credit and debit cards. The main language written and spoken is Hindi. English is also commonly understood, except at the grass root levels. However, tourist guides and translators are also available in French, Spanish, German and Japanese.

Rajasthan offers wide ranging accommodations that can match constraint from single bed dormitories costing $ 1 per night to some of the most elite and luxurious 5 star deluxe hotels in the world. Most of these five-star deluxe hotels are properties converted from former palaces and forts and they offer a superlative and fulsome life style experience. The state owned Rajasthan Tourism Development Corporation (RTDC) runs a chain of hotels invariably available at every destination, which are also known as Tourist Bungalows. The chain provides reasonably priced accommodations from dormitories to air-conditioned rooms. International food chains like Mc Donald, Pizza Hut, Dominos etc. exist along with authentic local cuisine.

Rajasthan is famous for its marble and red stone. Its intriguing art of stone carving, woodcraft and paintings are spellbinding to the visitors. The Rajasthani art of cloth printing - Bandhani - is internationally well known and has contributed to the State being so colorful. The beautiful sands of Jaisalmer; the capturing landscapes of serene waters and green hills of the City of Lakes, Udaipur, the charm of the hill station of Mount Abu and the ancient sculptures of Dilwara Temples; the bird and wild life sanctuaries of Sariska, Bharatpur and Ranthambor; the grandeur of impregnable forts and the stories of Rajput valor in the cities of Jodhpur, Chittorgarh, Kota and Bundi; the small city of world's only Brahama Temple - Pushkar (famous for its Pushkar Festival)and the city of Ajmer which houses the revered shrine of Muslim saint Khwaja Moinuddin Chisti, are the main attractions of the State.

Rajasthan is one of the safest states in India in terms of law & order. It is easily accessible by air, road and train. Jaipur is 260 km from Delhi and 240 km from Agra (where the world famous Taj Mahal is located) and forms the most chosen tourism golden triangle of Delhi, Agra and Jaipur. The best time to visit the State is from October to March when the weather varies from being pleasant (Oct-Nov, Feb-March) to cold (Dec-Jan).

(Source: Rajasthan Tourism)

(Our next issue will carry detailed write-ups on the places of interest in Rajasthan)