India Newsletter: June 2006

Economic News

1.Biotechnology sector:
The Indian biotech industry comprises of 280 companies with six of them generating revenues of over US$ 22.7 million. With the new product patent regime in place and a national biotech policy set to be formalized soon by the Government of India, the Indian biotech industry is expected to reach a target of US$ 5 billion in revenues by 2010. The industry reached a major milestone by crossing the US$ 1 billion mark in 2004-2005.

2. Russia's steel major MMK invests in India:
With a total investments of US$10 billion, Russian steel major MMK is also set to enter the Indian market by setting up a 10 million ton steel plant in Orissa, eastern India.

3. Japanese pharmaceutical group invests in India:
Eisai Pharmaceuticals, the Japanese pharmaceutical group plans to open a production and research unit in India next year with an investment of US$ 44 million so that pharmaceutical sales can tripled to reach US$ 522.9 million by the year 2011. The facility caters to production, new drug research and development and data management that analyses and processes clinical trial data to confirm the effectiveness and safety of drugs. Japan has identified India as a potential sourcing base for its global market requirement and feasibility studies.

4. Multinational companies invest in clinical R&D in India:
In 2005-2006, investments for clinical research projects in India by global drug companies on an annual basis have crossed US $ 120 million. The foreign direct investment for clinical research in India reached US$ 119.6 million as compared to US$ 65 million in 2004-2005, showing a robust growth of 84%. These global drug companies include Pfizer, Eli Lilly, Merck, Novartis, Aventis, Bayer, Atlanta, Astra Zeneca and GSK.

5. Manufacturing sector:
A survey carried out by the Associations Council of the Confederation of Indian Industry for April 2005-March 2006 indicates that the Indian manufacturing sector has reported rapid growth as compared to the previous year. Out of the total 143 sectors reporting production, 36 sectors recorded an excellent growth rate of more than 20%, 36 sectors recorded a high growth rate of 10-20%, 56 sectors registered moderate growth rate of 0-10% while 15 sectors reported negative growth.

6. India's performance best in the world:
According to Asian Development Bank (ADB), India is very much "an unfolding story of development success. Its continued economic and social progress would give a tremendous boost to the achievement of the millennium goals in Asia and Pacific region- and for the world as a whole." However, the greatest development challenge for India would be to meet the demand for infrastructure to support the rapid growth and to extend basic services to the poor. ADB's operations in India for 2006-2008 would focus primarily on infrastructure in the three core areas of transportation, urban development and energy.

7. NASA, ISRO sign Pact for Moon Mission:
US Space Agency, NASA entered into an agreement with the Indian Space Research Organization (ISRO) to send two scientific instruments on board Chandrayaan -I, the country's first unmanned moon mission scheduled for 2008. The two instruments are a mini synthetic aperture radar (mini SAR) and a moon mineralogy mapper. The American instruments will be part of the Chandrayaan payload, which will have 15-20 instruments, including 11 from India and 3 from the European Space Agency. The Lunar Mission is to be launched in 2007-2008.

8. IT sector:
The global corporations have pledged investments of US$ 8.6 billion in the Telecom and IT sector in 2005-2006. While Microsoft has announced investments of US$ 1.7 billion on research and development, education, productivity and governance, a consortium of non-resident Indians has proposed investment of US$ 3 billion for silicon chip manufacturing facility. Other companies include Intel, Cisco, Ericsson, Nokia and Samsung and Siemens etc.

9. Textile sector:
India has set up a Sub-Committee on textile industry to increase its exports to US$ 40 billion by the year 2010. The Committee would examine issues on labour loss and eliminate hurdles to facilitate increased trade in this sector. Textile exports are expected to reach US$ 19.6 billion in the year 2006-2007 as compared to US$ 17 billion in 2005-2006 and US$ 13.56 billion in 2004-2005.

10.Foreign Direct Investment in India:
India expects an inflow of US$ 12 billion foreign direct investment during the current financial year April 2006 - March 2007 as compared to US$ 8.4 billion in the last financial year. Out of US$ 12 billion, US$ 8 billion is expected to come in the form of equity and the balance from re-invested earnings and other capital inflows.

11. Agriculture:
Agricultural sector in India contributes 25% to the GDP and is a key sector of the Indian economy, providing food security to the population, major employment opportunities to the rural population and consequently, a large domestic market for manufactured goods. This sector also accounts for 13% of India's exports. India is the second largest producer of rice and wheat in the world; first in pulses and fourth in the coarse grains. India is also one of the largest producers of cotton, sugar, sugarcane, peanuts, jute, tea and assortment of spices. In terms of the real value added, the Indian agriculture sector ranks third, after China and United States. In recent years, there has been a considerable emphasis on crop diversification towards horticulture (fruits, vegetables, ornamental crops, medicinal and aromatic plants, spices), plantation crops (coconut, cashew nuts and cocoa) and allied activities.

12. Metro AG to expand India operations:
German trading major Metro AG - which has two metro cash and carry wholesale outlets in Karnataka - has lined up Euro 300 million investment in India with plans to open new outlets in Hyderabad, Chennai and Kolkata.

13. India-China trade:
Trade between India and China could reach US$ 100 billion by 2015 as the two fast growing Asian neighbours expand bilateral ties. The trade target of US$ 20 billion set by the two nations would be reached this year, two years ahead of schedule. To boost trade, both nations need to lift trade barriers, open markets further and improve cooperation between government and private entrepreneurs. Indian and Chinese companies could forge ties in several areas including organic chemicals, plastics, pharmaceuticals, paper, precious stones, electrical machinery and medical equipment as well as precision engineering products.

14. Telecom sector:
India will become the world's second largest mobile phone market by 2008 by adding five million subscribers per month. India will surpass US and Russia in mobile phone user base, thanks to the accelerating growth of the wireless communication network in the country. By June 2006, India will break through the 100 million-subscriber barrier.

15. Indian Company wins Bolivian project involving largest deposit of iron ore in the world:
The Government of Bolivia has awarded the Mutun Iron Ore & Steel Project worth US$ 2.3 billion to the Indian company Jindal Steel & Power Ltd. This is the biggest project ever awarded to an Indian company in Latin America and is located in the eastern Bolivian town of Puerto Suarez, next to the border with Brazil. The area contains the largest deposit of iron ore in the world - stretching 150 kilometres in length and 900 metres in height. Competitors for the project had included companies from Brazil, Argentina, China and Mittal Steel, Netherlands.

Indian Stock Market Sizzles as Investors Pour Money

From being despised for its casino like trading practices and lack of good investment options not long ago to becoming one of the fastest growing bourses globally, India's stock market today counts among the more mature and professional equity exchanges globally. The stock market has become the darling for scores of middle-class investors and over 800 overseas funds that are pouring money into the domestic trading ring like never before to join the gold rush that has been continuing without any major interruptions for over a year now.

Massive stock investments inflows in Asia's second fastest growing economy after neighboring China on hopes of sustained higher economic growth and corporate earnings is helping the benchmark share market index to scale new peaks almost on a regular basis. The domestic stock market barometer 30-share Bombay Stock Exchange sensitive index or Sensex breached the 11,000-mark for the first time in the history of the capital market on March 21. The historical level was reached in less than six weeks after shares went past the 10,000-barrier on Feb 6.

The key share market index on March 29 overtook the famed Dow Jones Industrial Average of the US for the first time in the history of the capital market on massive institutional buying interest.

"The rally in the market is mainly being fuelled by increased liquidity with foreign investors as well as domestic funds pouring money to take part in the bull-run" said Deepak Shah, a senior equity market analyst with Mumbai-based brokerage firm Pranav Securities. "The rally is based on strong fundamentals and, therefore, every other week new overseas investors are coming to invest in the market. India is firmly on the radar of all big overseas investors," Shah told IANS.

Adoption of stringent corporate governance norms by companies and easier investment guidelines are also helping foreign institutional investors to loosen their purse strings in India.

The number of registered foreign institutional investors in the country has swelled to a staggering 882, of which over 100 were registered in the last six months, according to the market regulator Securities and Exchange Board of India (SEBI). The Indian stock market boasted of just 18 registered foreign institutional investors in 1993.

Foreign institutional funds, the backbone of India's liquidity starved capital market, pumped in a record $10.7 billion in the stock market in 2005 and have already bought shares worth over $3.63 billion in the current calendar year. Taiwan, with over $12 billion of foreign institutional investments, is the only other emerging Asian stock market that outstrips India's$10.7 billion worth of equity purchases by overseas bodies in 2005.

Foreign institutional funds from a host of nations like Japan, Germany, Australia, Singapore, Luxembourg, Denmark and the US are queuing up for shopping in Asia's third largest economy.

"India is the most happening place now in terms of equity investments and foreign investors are just cashing in on the boom," said K.K. Mittal, vice president of New Delhi-headquartered fund management company Escorts Mutual Fund. "A robust economy, impressive corporate earnings growth, stable interest rate and rising profile of domestic companies overseas have mainly contributed to India becoming a hotspot for overseas fund managers," he added.

Some of the major foreign funds, which have entered the Indian market in the past few months, include New York-based Hercules Capital Advisors, Germany's Hauck Aufhauser Privatbankiers Kgaa and Nordea Bank of Denmark. It was not long ago that overseas institutional funds, which were allowed entry in 1992, were blamed for rocking the stock market by taking their hands out of the trading at slightest hint of a plunge in the equity valuations. Overseas fund investors like the over $170-billion pension fund California Public Employees' Retirement System (CalPERS) are exploring opportunities for enhancing private equity investments in India's booming stock market.

Analysts say the long-term prospects of the Indian stock market continue to be buoyant with almost all the industrial sectors benefiting from the country's robust economic growth. The market mood has also been boosted by the Indian government's plans to make the local currency fully convertible on the capital account with a view to integrating domestic economy with the global economy. Prime Minister Manmohan Singh has said the country was moving towards making the rupee making fully convertible on capital account on the back of robust economic expansion. The rupee is currently convertible only on current account, allowing free inflows and outflows for all purposes other than for capital purposes such as investments and loans.

(Source-Indo-Asian News Service)

G8 Summit - Excerpts from Foreign Secretary's interview by Mr. Vladimir Skosynrev of "Nezavisimaya Gazeta", Moscow

Question: What results does India expect to get from the Summit?

Foreign Secretary: The Russian Federation has identified three major themes for the St. Petersburg Summit viz energy security, education and the fight against infectious diseases. All three subjects are of great interest to India.

With regard to energy security, we expect a balanced outcome that would reflect the interests of both producers and consumers. There is a need to think of ways to enhance stability and predictability of the energy market. From the Indian perspective, diversification of the energy mix and moving away from dependence on fossil fuel is important. This will involve a greater share for hydro energy, nuclear energy and renewables. Cooperation between the G-8 and major developing countries could also be useful for the development of newer and cleaner sources of energy.

There is a need for a global effort to bring about complete literacy in developing countries, as also an upgradation of skills. There was also a need to find resources to achieve the goals of Education for All.

In health, the major challenges are HIV/AIDS, tuberculosis and malaria, besides new and emerging diseases such as avian flu. These challenges could be dealt effectively only through close cooperation among the major countries, including large developing countries. There is also a need to develop effective early warning systems for infectious diseases.

We also expect that St. Petersburg Summit would result in a strong statement against international terrorism that would reaffirm the commitment of countries to work together to eliminate this major threat to international peace and security.

Question: Does India intend to become a 'regular' member of this group of industrialized countries?

Foreign Secretary: At the moment India is a special invitee. It is difficult to speak of the future, but India would wait and see how things evolved.

Question: The US Vice-President says that Russia is moving away from democracy and using energy to pressurize other countries?

Foreign Secretary: India does not comment on bilateral relationships of other countries or their internal affairs. With Russia particularly, India has a long-standing relationship based on mutual respect. The basis of our relations with Russia is not its political system. However, we welcomed the establishment of democracy in Russia and the two countries have a shared respect for democratic values and institutions.

Question: What would the Indian Prime Minister discuss in his bilateral meeting with president Putin?

Foreign Secretary: It would really be for the two Leaders to decide. The relationship covers a broad range and is expanding further. The relations include cooperation in economic, commercial, defence and scientific fields. One could expect that the leaders would discuss ways to further strengthen bilateral cooperation. Relations between the two countries are also characterized by mutual trust and confidence. Both countries value the perspectives of the other, with regard to regional and international developments. Prime Minister would welcome the opportunity to discuss recent developments with President Putin.

Question: There are reports that the ratification of the India - US Agreement on Nuclear Energy is stalled in the Congress. When can ratification be expected?

Foreign Secretary: No ratification is being contemplated. The Administration has put forward proposals for legislative changes. This is presently being debated in Congress. The expectation is it would be passed at an early date. This would allow civilian nuclear cooperation with India to be operationalized. We expect that this would be sooner rather than later. We are not aware of any reason for the legislation to be stalled. It would, however, be natural that there is debate in a democracy.

Question: If the legislation is passed, how would it affect cooperation between India and Russia in the nuclear field?

Foreign Secretary: After legislation is passed in the US Congress and NSG guidelines are amended, the nuclear energy market would be open to all partners, including Russia.

Question: What is India's position on Iran's nuclear programme?

Foreign Secretary: India has, throughout, said that Iran has the right to develop civilian nuclear energy consistent with the international commitments and obligations that it has undertaken. Certain questions have been raised about Iran's nuclear programme. These questions should be clarified through Iran's cooperation with the IAEA. We have also advocated that all issues should be settled through dialogue. Confrontation should be avoided. India would like to see maximum diplomatic effort being exerted for an amicable resolution. We welcome, in this context, the positive role being played by Russia.

Tourism - India Calls
Chamba - Florence Of Himalayas

Situated in the northwest corner of Himachal Pradesh state and jutting into Jammu and Kashmir is the scenic tourist destination of Chamba, an ancient temple town perched on a small plateau overlooking the river Ravi and surrounded by breathtaking views of the Himalayas.

Chamba is often referred to as the Florence of the Himalayas, for like the Italian city, it abounds in street and curbside art treasures as well as a host of magnificent temples and idols.

Located just 56 km from the famous hill resort of Dalhousie, Chamba - the headquarters of Chamba district - is well known for its splendid architecture and is the base for numerous treks.

The capital of an ancient kingdom, Chamba was founded in 920 AD by Raja Sahil Varma who named it after his favorite daughter Champavati. Sandwiched between the Dhauladhar and Pir Panjal ranges, Chamba developed its own style of architecture and art, in the isolation provided by the lofty mountains. Much of this heritage has been preserved.

Above Chamba is one of the world's great reserve forests - the Sara-Kiri reserve, home to the nomadic Gujjars. The town is the starting point for the trek across the Sach Pass to Pangi, one of the most inaccessible areas in the country.

Tourist attractions
• Lakshminarayanan Temple: This is a cluster of six ancient temples carved in stone, with tall vimanas. Dedicated to both Shiva and Vishnu, these temples were built around the 8th century AD. The Lakshminarayan Temple, the oldest in this group, is richly ornamented.
• Bhuri Singh Museum: A collection of fine miniatures from the Kangra, Basholiand Chamba schools of painting is foundin this museum. There are also murals and paintings from the Rang Mahal Palace, which was damaged by fire.
• Chaugan: It is a large grassy meadow that forms the heart of the Chamba town and the centre of all its cultural activities. Each year, the colourful Minjar Mela celebrating the harvest is held here.
• Chamunda Devi Temple: Barely 1 km from Chaugan, this temple overlooks the river Ravi. Dedicated to the goddess Chamunda Devi, the temple is embellished with fine woodcarvings.
• Katasan Devi Temple: Located 30 km from Chamba is this popular place of pilgrimage. The temple has a beautiful view of the Chamba Valley.
• Sarol: Lovely landscaped gardens, a sheep breeding centre and apiary make Sarol, about 11 km from Chamba, an interesting place for picnics.
• Jhamwar: Located amid dense forests, Jhamwar, located 10 from Chamba, is noted for its apple orchards.
• Salooni: Located 56 km from Chamba, Salooni is another place with breathtaking views of the snow-capped ranges.

How to reach
• By Air: The nearest airport is at Chandigarh.
• By Rail: The nearest railhead is at Pathankot, 122 km from Chamba town.
• By Road: Well-connected by road from Dalhousie.

Climate
• Winter: Temperature ranges from 8degrees Celsius to 15 degrees Celsius.
• Summer: Maximum temperature is inthe range of 15-38 degrees Celsius.
• Best time to visit: April-November.

Where to stay: Hotel Akhand Chandi; Hotel Iravati ;Mount View; Hotel Chamunda.

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

Popular Indian Recipes: Potato and Kidney Bean Salad

Serves: 4
Cooking time (approx.): 5 minutes
Style: North Indian Vegetarian

Ingredients:
• 4 potatoes boiled, peeled and cubed
• 2 cup(s) kidney beans boiled
• 2 onion(s) finely chopped
• 1 green chilli(es) crushed with salt
• 1 teaspoon(s) oil
• salt, pepper and lemon juice to taste
• fresh coriander or parsley to garnish

Method:
• Heat oil in a pan on medium heat for a few seconds. Add the onions and green chillies. Fry on medium/high heat for about 2 minute(s) or till the onions are transparent.
• Add the pre-boiled potatoes cubes, kidney beans, salt, pepper and lemon juice. Keep on low heat for about 3 minutes.
• Garnish with finely chopped fresh coriander.

Serve chilled or at room temperature.

Summer Drinks: Lassi

Serves: 2-3

Ingredients:
• 750 gm yoghurt
• Ice cubes
• salt or sugar to taste
• 200 ml water (only if the yoghurt is very thick)

Method:
• Crush the ice cubes in a blender. Add the yoghurt, water, salt or sugar.
• Blend for about 1 minute.

Serve chilled.