India Newsletter: April 2006

Economic News

1.Foreign Exchange Reserves touch US$ 150 billion mark
India is the fifth largest holder of foreign exchange among emerging markets after China, South Korea, Taiwan and Russia with US $ 151 billion as of March 31st 2006.

2.FDI hits US $ 8 billion in the Financial Year 2006
FDI inflows into India in the financial year April 05- March 06 are estimated to have touched US $ 8 bn and is expected to increase to $12 bn in the next financial year April 2006- March 2007. Most of the FDI inflows have been in the manufacturing sector, which will further drive GDP growth.

3. India's Electronic Industry
India's electronic industry has been growing at approximately 11 percent CAGR over the past 5 years and was worth US $ 11 bn in 2004-2005 consisting of Consumer electronics, Industrial electronics, Computers, Strategic electronics, Communication and Broadcasting equipment and Electronic components. The main destinations for India's exports are the European Union, ASEAN countries and the United States.

4. India's industrial output up 8.8 percent
India's industrial production rose 8.8 percent in February from a year earlier. Manufacturing production, which represents more than 75 percent of industrial output rose 9.5 percent in February from a year earlier, higher than a revised 8.8 percent in January. Consumer durables output was up 18.2 percent from a year earlier while production of consumer goods, like vehicles and televisions rose 12.4 percent.

5. Gems and jewellery sector may grow at 20-25 percent
India's export of gems and jewellery in 2005-06 rose to US $ 16.67 billion, a growth of more than 6 percent and is likely to grow at 20-25 % in 2006-07 aided by new opportunities in the diamond segment. According to Gems and Jewellery Export Promotion Council, the country has the potential to become the next global trading hub of gems and jewellery.

6. Textile sector is on an upswing
The overall textile output has grown nearly 20% to reach an estimated value of US$ 40 bn. India's textile exports can be broadly categorized into two large segments-apparel, which contributes nearly half of the revenues and non-apparel exports like, yearn, fabrics, both natural and man made.

7. Indian IT mart seen at US$ 4.3 bn in 2006
The adoption of Information Technology by the companies in India is expanding rapidly with domestic market expected to grow to US$ 4.3 bn in 2005-06.

8. India enters global club of US$ 1 bn IPOs
According to Ernst & Young, India is among the 29 countries, which floated more than US$ 1 bn worth of Initial Public Offerings (IPOs) in 2005, a trend, which is expected to continue in 2006. India has evoked lively investor interest with transaction of issues surging from 21 to 53 amounting to US$ 2.3 bn in 2005 placing India in the fourth position in Asia.

9. India Inc raises US$ 39.43 bn
India Inc raised an unprecedented US $ 39.43 bn in equity and debt in the fiscal year 2005 -06 from domestic and overseas market, which is nearly 80% higher than the US$ 21.92 bn raised in 2004 -05.

10. Overseas Investment
McAfee Inc, the second largest anti-virus software maker plans to invest more than US$ 80 mn in India over the next four years. Express service provider TNT plans to invest Euro 100 mn over 5 years in its India road network programme for offering services using an integrated air and road network. Goldman Sachs, the US based Global Investment Bank announced that it would invest US$ 1 bn in private equity, real estate, private wealth management and other businesses in India in the next couple of years.

11. Ranbaxy acquires Romanian generics company for US$ 324 mn
Ranbaxy announced its largest ever-overseas acquisition so far by signing an agreement to buy a Romanian generics company, Terapia for US $324 mn. With Romania slated to become a EU member next year, the acquisition would help Ranbaxy to further strengthen its presence across the European and CIS markets.

12. Wockhardt to raise US $800 million for overseas buys
Mumbai based Pharmaceutical and Biotechnology Company Wockhardt Limited plans to raise up to US800 mn in one or more tranches to fund overseas acquisitions through an issue of equity - related securities.

13. Chemical Industry
India's Chemical Industry contributes about 3% to the nation's Gross Domestic Produce (GDP). The Industry has a turnover of about US $ 30 bn and accounts for about 14% in the general Index of Industrial Production (IIP) and 17.6% in the manufacturing sector. It also accounts for about 13-14% of total exports and 8-9% of total imports of the country.

After IT, India sees Biotech as next driver of growth

From cutting costs on life-saving drugs to growing better vegetables, the Indian economy has a new sunshine industry - biotechnology which, as the next growth engine after information technology, is surging the country on to the global map.

Acknowledged as one of the world's fastest surging economies, India has been clubbed with Singapore, Taiwan, Japan and South Korea as potential biotech leaders in the 21st century. In a recent global report, management consultancy Ernst and Young estimates that India's biotechnology industry is expected to generate $5 billion in revenues in the next five years and create more than one million jobs.

India's position as a biotech player is assuming greater eminence as it continues to build critical mass in terms of skills and capabilities. Some 15,000 scientists are employed in biotech in India, nearly a third of whom are involved in research. Industry analysts say another 50,000 researchers would enter the field in half a decade.

With 96 companies in the sector, India is ranked third in the region in terms of number of biotech companies, following Australia with 228 and China with 136.

This growth is expected to come on the back of increased partnering activity, transition to a product driven model, growth in the bio-generics market and government initiatives to encourage investment and expansion.

Led by the government's Department of Biotechnology, new models of public-private partnership have been formulated for accelerating research and development, technology perfection, absorption and commercialization.

One major area of focus is stem cell research. Advancement in field has brought confidence among Indian doctors to take up its clinical application in heart, eye, pancreas, liver, neural, kidney diseases and spinal injury.

As it delves deeper into more critical biotech research, India is also becoming a pioneer in using its R&D to lower costs of life-saving drugs. The Central Drug Research Institute in Lucknow has produced a medicine to treat cerebral malaria which is sold under a brand name to many countries including those in the sub-Saharan Africa, and at prices far below those of the Western companies. Another Indian Biotech company has come out with a recombinant DNA vaccine on Hepatitis B, which is supplied, to UNICEF. Based on its technological skills and low manufacturing costs, India is also supplying AIDS diagnostic kits at 1/100th the cost of products of similar products by top global manufacturers. Indian companies have zeroed in on the pharmaceutical sector, especially clinical trials, contract research and drug discovery, to tap tremendous growth opportunities offered by increasing demand for biotech-based healthcare products. This has resulted in the emergence of a large number of research and development initiatives in the country like Wockhardt, Reliance Life Sciences, Ranbaxy, Dr. Reddy's Laboratories, Astra Zeneca, Zydus Cadila, Eli Lilly, Pfizer and Nicholas Piramal.

Biotech is also pitching in the area of food and nutrition security. So far, India has only approved commercial cultivation of insect-resistant cotton, though researchers have conducted field trials on drought-tolerant canola, insect-resistant cotton and tobacco. Further experiments are being conducted on cabbage, potatoes, rice and tomatoes.

Biotechnology has opened a new window of opportunity which spans across agriculture, health and to some extended industrial applications.

(Courtesy: Indo-Asian News Service)

Excerpts from Dr. Manmohan Singh, Prime Minister of India's Address at the Confederation of Indian Industry(CII) - National Conference-2006

In the past two decades, Indian enterprise has responded handsomely to the challenge of global competition.

This has been a good year for Indian manufacturing enterprise. As I look ahead, I feel that we cannot only sustain the current rate of economic growth of around 8.0% but can realistically hope to target a rate of 10%. However, we face the challenge of making our growth process more socially and economically broad-based.

Our Government recognizes that for balanced and all round development, and also to sustain higher growth, both agriculture and manufacturing need to grow in tandem. Indeed, our strategy for higher growth in agricultural production and productivity, and our strategy for industrial growth and development, have to be inter-linked. We need a credible macroeconomic environment, better infrastructure, and a supportive political and social environment, to sustain higher rates of industrial growth.

I am happy to note that the National Manufacturing Competitiveness Council set up by our Government has in fact adopted such a holistic perspective. I share the Council's view that manufacturing is a force multiplier. We seek an acceleration of employment generation and of income and output growth. This must come from an increase in the share of the manufacturing sector in national income. This must happen not just through expansion of large-scale industry, but also of small and medium enterprises and rural enterprises. Our industrial strategy must focus on all tiers of modern manufacturing.

I have constituted a High Level Committee on Manufacturing under my chairmanship and including my senior colleagues dealing with various aspects of industrial policy. This committee will make recommendations and review the implementation of policies formulated under the National Manufacturing Initiative. Our endeavour will be to create a policy framework that can deliver an annual rate of growth of manufacturing output of at least 12%. The High Level Committee on Manufacturing should become a single window for generating, coordinating and monitoring policy initiatives in this area.

Our information technology and telecom sectors have developed impressively in recent years. We must now facilitate the growth of an electronics, IT and telecom hardware industry. I have constituted a Task Force to focus on the growth of electronics and IT hardware manufacture.

We have paid special attention to infrastructure development. The national highway programme has not only gained speed but the movement towards greater private participation through the BOT route has begun showing exciting results. I assure you that by 2009, Indian infrastructure will have a new look and a new sense of dynamism.

Indian industry must pay closer attention to the environmental consequences of industrial development. You must pay more attention to the rehabilitation of people displaced by the spread of industrial activity and by urbanization. I think the time has come to squarely address the issue of development, displacement and environment. Expanding the pie through rapid economic development is essential if we have to meet the challenge of eliminating chronic poverty, ignorance and disease. At the same time, we are frequently faced with situations where developmental activities displace people from their traditional habitat, vocations and lifestyles; where industrial growth can have adverse environmental implications. We need to quickly evolve credible mechanisms whereby these issues do not degenerate into confrontations between sections of our society; whereby development is not perceived as a threat to people's lives and habitats; whereby development is done in the most cost-effective, environment friendly and least disruptive manner; whereby all stakeholders benefit to some degree from development.

Indian industry must also think big about rural development and agrarian change. To sustain double-digit industrial growth and national income growth of 8-10%, we must make the growth process more broad-based.

A supportive macroeconomic policy framework, modern infrastructure and investment in skills and capabilities are important supply-side initiatives. These must be matched by a focus on the demand-side as well. Our government has taken many steps that will generate new demand for manufactured goods. We have effected a massive increase in development expenditure. We have taken initiatives to generate new employment opportunities. We have eased the flow of credit to farmers. These are some of the easier interventions that can stimulate rural demand. The redistribution of land and tenancy reform can improve the income and asset base of the rural poor. It can generate demand for rural housing and other infrastructure.

I do sincerely believe that industry can play a leading social role in the empowerment of less privileged, marginalized groups. We all need to ensure that no group feels excluded from enjoying the fruits of rapid economic growth. I urge industry to seriously consider enhancing educational and employment opportunities for weaker sections, investing in their skill enhancement and promoting their employment in an affirmative manner.

Tourism - India Calls
Kullu-Manali

Located deep in the heart of the Himalayan State of Himachal Pradesh are the twin hill stations of Kullu-Manali that encapsulate the unique charms of the Kullu valley whose splendid natural beauty is accentuated by the distinct lifestyle, culture and religion of its inhabitants.

Abounding in ancient temples and age old myths and legends, Kullu, about 230km from Shimla, is also referred to as theValley of the Gods. Situated 40 km apart, the scenic Kullu town (1219m) on the banks of RiverBeas serves as a steppingstone to Manali(2050m), which offers a range ofopportunities for adventure sports enthusiasts, from skiing and paragliding to mountaineering and trekking.

Kullu, which serves as the headquarters of the Kullu district, also offers opportunities for angling in the Beas river, trekking and nature walks, besides being the transit point for treks across Chanderkhani Pass to Malana; the Jalori Pass and Bashleo Pass to Shimla; and the Pin Parvati Pass to Sarahan..

Attractions
• Raghunath Temple: This historic temple dedicated to Lord Raghunath - Lord Rama- the chief deity of Kullu, is the venue for the famous Kullu Dussehra festival. The temple is patronized by the royal family of Kullu and their residence, the Rupi Palace, isalso situated near the temple.
• Basheshwar Mahadev Temple: This temple at Bajura, about 15 km from Kullu, is renowned for its intricate stone carvings. Other important shrines near Kullu are the Vaishno Devi temple(4km), Devi Jagannathi Temple at Bekhli (5 km) and the Vishnu temple at Dayar(12 km).
• Manu Rishi Temple: Located near Manali, this five-storey pagoda style temple is dedicated to sage Manu from whom the human race is believed to have started. This land was known as 'Land of Manu' and was later renamed Manali after him.
• Rohtang Pass: Rohtang Pass (3980m) or the house of the dead, as it is known, is located 51 km to the north of Manali on the national highway, and offers a spectacular view of the Kullu valley and the high mountains of Lahaul Valley.
• Solang Valley: Situated 13 km to the northwest of Manali, the slopes of Solangare considered one of the best in the world for skiing. The annual state and national level winter sports are organised here.
• Beas Rishi Lake: Very deep and transparent, this lake is most of the time half covered by glaciers. The weather here is unpredictable and the best period to visit is June to October.
• Naggar: Situated on a wooded slope on the left bank of River Beas, scenic Naggar was the ancient capital of erstwhile Kulu state and boasts of many famous temples. Roerich Art Gallery that houses the paintings and sculptures of Nicholas Roerich is located near here.
• Vashishtha Bath: Famous for its hot springs and Turkish baths, this village about 3 km from Manali is associated with Rishi Vashishtha and has a 400-year old temple dedicated to the famous sage.

How to reach
• By Air: Nearest airport is at Chandigarh. Kullu has an all-weather small airport.
• By Rail: Main railhead is at Chandigarh. Pathankot also links Kullu by train.
• By Road: Well-connected by road from Delhi and Chandigarh.

Climate
• Winter: Temperature ranges from 2degrees Celsius to 16 degrees Celsius.
• Summer: Maximum temperature is in the range of 14-33 degrees Celsius.
• Best time to visit: March-June and September-November.

Where to stay:
HPTDC, Dhalpur, Kullu; The Mall, Manali; Hotel Chelsea; Ambassador Resorts

For more on India tourism, visit:
www.hptdc.nic.in
www.tourindia.com
www.tourismofindia.com

Popular Indian Recipes: Aloo Paratha (Potato Stuffed Roti)

Ingredients for making dough
• 250 gm whole wheat flour
• salt
• water
• 50 ml oil

Filling
• 500 gm potatoes
• 20 gm coriander leaves (optional)
• 20 gm ginger garlic paste
• 75 gm onions
• 05 gm green chillies (optional)
• 05 gm chilli powder (optional)
• salt to taste
• 10 ml lime juice
• oil for frying

Method
• Make a soft dough with the specified ingredients. Divide the dough into balls, as per the required size.
• Chop the onions, green chillies and the coriander leaves.
• Boil the potatoes; remove the skin and mash. Add the rest of the ingredients and mix well.
• Take each portion of the dough, flatten it on palm.
• Stuff the filling in the dough and roll into balls.
• With a rolling pin, flatten the balls into 1/2" thick round parathas.
• Grease a pan with a little oil and heat on a medium flame.
• Place the parathas in the pan and cook until both sides are golden and cooked through. ( oil should be applied evenly on both sides while cooking)