India Newsletter: July 2006

Economic News

1. Eurocopter plans USD 1 bn investments in India: Eurocopter, the world's largest civil and military helicopter manufacturer, reports about planned investments of USD 1 bn in India over the next two years. The company has put in bids for over 500 helicopter manufacturing contracts for Indian defence. Eurocopter is planning to set up an Indian subsidiary, a helicopter training school, and a maintenance, repair and overhaul (MRO) centre for helicopters, which would be a hub for Asia. "This MRO will take care of all requirements of flights engineering and repair", said Eurocopter India Manger (Administration) David Martin.

2. Mittal Steel acquires Arcelor: The world's steel major is one step closer to being created by Laxmi Mittal, who finally acquired Arcelor SA for USD 33.7 bn after its merger with Russian Severstal has failed to come true.

3. Indian pharma companies on global shopping spree: Indian pharmaceutical companies have been aggressively making acquisitions overseas in the last couple of years, most of them being in generic space. This resulted in access to manufacturing facilities in common trade areas like the EU, from where products could be supplied to potential markets. In February 2006, Dr.Reddy's Laboratories made the biggest overseas acquisition by an Indian pharma company, when it acquired the fourth-largest German generic drug maker Betapharm Arzneimittel GmbH for euro 480 mn. The latest announcement was from Nicholas Piramal, when it acquired Pfizer Inc's integrated pharmaceutical manufacturing facility at Morpeth, UK, making the company's third acquisition in the UK since December 2004. In the year 2005, Indian pharma companies made nearly 15 acquisitions.

4. India most preferred banking destination: Global consultancy firm KPMG in its report 'Hungry for more - Acquisition appetite and strategy in the global private banking and wealth management industry', said with robust and liquid financial markets enabling exits on a timely basis to realize gains, India is a good resource deployment avenue. The growth of personal wealth in Asian economies is providing the greatest impetus to the M&A activity. About 45% of all deals in 2005 took place in the Asia Pacific region with a majority of respondents naming China and India, as countries they sought expansion in, the report said.

5. Reliance to become global leader in chemical compounds: Reliance Industries Ltd, India's largest petrochemical company, in April 2006 expanded the capacity of polypropylene plant at Jamnagar by 280,000 tonnes a year and will commission a new 900,000 t.p.a unit at the new export-oriented refinery by 2008. Reliance would then emerge as the fourth largest producer of polypropylene, chemical compound used in manufacture of plastics in the world.

6. China-India trade to reach USD 20 bn by 2008: Bilateral trade between India and China was less than USD 2 bn in 1999 and hike up to USD 18 bn by 2005. If this trend continues, both countries can reach trade turnover of USD 20 bn well before 2008, reports Counselor, Chinese Embassy Zheng Quingdian at a session organized by FICCI.

7. EDS picks majority stake in Mphasis: EDS, the US-based $20-billion global technology services firm, formally acquired majority stake (51.4 percent) in Mphasis BFL Ltd. for $380 million in cash. "The price of acquiring 83 million shares has been fixed at $4.50 (Rs.204.50) per share. The Bangalore-based Mphasis, listed on the Bombay stock exchange and NSE, is a leading applications and business process outsourcing (BPO) services firm, with 12,000 employees. Post-acquisition, EDS plans to ramp up the headcount to about 20,000 by this year-end. Mphasis serves clients in multiple industries, including financial services, transportation, technology and healthcare. "The acquisition will bolster our offshore delivery capabilities in priority growth areas and allow us to deliver a stronger value proposition to better align with clients' changing needs," Mr. Jordan said.

8. GE to invest $250 million in India: Global leader in diversified technology, media and financial services, General Electric (GE) has announced a $250 million investment in infrastructure and healthcare projects in India. The company has also set a goal of $8 billion in revenues and $8 billion in assets in India by 2010. GE Chairman and CEO Jeff Immelt said in Mumbai that the company intends to dramatically expand its industrial and financial presence in the country. "India is a market set to realise its potential. The next ten years are critically important for India in terms of infrastructure and economic development as the country progresses towards becoming one of the largest economies in the world," Mr. Immelt said. Addressing the Bombay Chamber of Commerce, Mr. Immelt announced that GE is adding another $100 million to the GE India Development Fund to help India address its pressing needs in the fields of healthcare, energy, water, aviation and financial services.

9. Wipro buys out European firm: Wipro Technologies, the global services of Wipro Ltd., has acquired Europe-based retail solutions provider Enabler for $53 million (euro 41 million) in an all-cash deal. The transaction, however, includes earn-outs of Enabler over the next two years. For the calendar and fiscal year 2005, Enabler posted revenue of $39 million (euro 30 million). Being a privately held firm, its net margins were not made public, despite a track record of profitability and being in line with the industry leaders in the IT services space. The 10-year-old Enabler, with delivery centres in Portugal and Brazil, was spun out of Modelo Continente, a leading Portugal retailer and a division of Sonae group. As a preferred integrator of Oracle Retail (Retek) solutions, Enabler provides consulting services to global retailers in Europe, Middle East and Latin America

India Set to become Knowledge Hub

With the fourth largest reservoir of scientific manpower in the world and numerous institutions engaged in frontier areas of research and development (R&D), India is emerging as the preferred hub for knowledge-based industries. Its skills in the knowledge economy are not restricted to information and communication technology alone, but spans agriculture, defence, novel drug discovery, biotech , nano-technology, missile technology and space. India's efforts to become a superpower in knowledge economy are spearheaded at the highest level by President A.P.J. Abdul Kalam, who is a noted scientist himself, and Prime Minister Manmohan Singh, an Oxford and Cambridge-educated economist. "It is often said that the 21st Century will be the knowledge century. We in India are proud of our inheritance in this regard," Dr. Manmohan Singh told India's 4th annual conclave to connect with its vast diaspora in the southern city of Hyderabad on January 7 this year.

Already, Microsoft, General Electric, Intel, IBM, Boeing and Google are some of the 100-odd global firms that have set up R&D centres in India, and many more are actively considering similar facilities. In fact, a study by the Confederation of Indian Industry (CII) estimates that India would emerge as a $17-billion hub for knowledge process outsourcing by 2010, growing at a staggering 46 percent annually. Pharmaceuticals, biotechnology, information and communication technology, legal support, intellectual property research, and design and development for auto and aerospace are some of the areas where India's strength lies, says the apex business lobby. "I have immense faith in the intellectual capital of India and the amount it can contribute to GE's success," says Scott R. Bayman, president of GE India, which has a John F. Welch Technology Centre in India, the largest outside the US. "India is rich with bright, young talent. Indian engineers are quick to grasp Six Sigma and make it their way of working," Mr. Bayman said during a recent visit, referring to the strict quality standards of GE that is being mirrored at its Indian centre. GE's state-of-the-art lab in Bangalore does R&D in areas such as engineering, electronic systems, ceramics, metallurgy, catalysis, advanced chemistry, new synthetic materials, polymers, process modelling, simulation and IT.

In a recent study, global consultancy Frost and Sullivan said India had taken a lead over China in the global movement to outsource R&D, while a McKinsey survey said large corporations find India amore attractive hub for R&D than China. "All this is happening because of the rich and vast talent pool of technical manpower in India," says S.R. Rao, scientific advisor in the Ministry of Science and Technology. "It is estimated that the headcount of our scientific manpower is arguably among the top five in the world and second-largest in terms of knowing English," says Dr. Rao. To sharpen India's knowledge edge in the 21st century Dr. Manmohan Singh has established a unique body, the Knowledge Commission, under Sam Pitroda, who led India's telecom revolution in the mid-1980s.The commission's mandate is to advise the Prime Minister on how India can meet the knowledge challenges in areas like education, scientific institutions, intellectual property and agriculture.

In fact, state-run research institutions and private sector companies in India have already started grabbing global attention with success in some leading edge areas of science and technology. According to the Department of Biotechnology, 165institutions in the country are engaged in genetic engineering research- 55 in transgenic work, 25 in therapeutics and 85 in basic research. India has started commercial cultivation of genetically-modified cotton in the western state of Gujarat and some southern states, with several other crops in various stages of getting approvals for commercial plantation. It is the only country from the developing world and sixth globally to fabricate and launch its own satellites in geo-stationary orbit, with even plans for a moon mission in 2010. In stem cell research, the US Department of Health wants to fund two Indian institutions - Reliance Life Sciences, backed by the country's largest private sector group, and the Bangalore-based National Centre for Biological Sciences. Even in the field of collaborative research, some new trends are emerging. India's largest software company, Tata Consultancy Services, for example, has collaboration with the Carnegie Mellon University to investigate emerging trends in economics, management and technology for the software industry. The Bangalore-based biotech company Biocon, like other home grown pharma majors Ranbaxy and Dr. Reddy's, is attracting interest from companies in the US and Europe, which are seeking a strong platform for development skills. "India needs to break away from imitative to more inventive R&D to realise the potential of its innovative skill base. This is where Silicon Valley scored," says Biocon founder Kiran Mazumdar-Shaw.

India today has more than 250 universities and many more R&D units, professional colleges and institutions. On an average, more than 350,000 engineers and 5,000 PhD scholars graduate from Indian universities and colleges every year. "With such a pool of qualified, English-speaking scientific and technological manpower, India must have the ambition to become a large base of research and development activity," Dr. Manmohan Singh told the Knowledge Commission recently. "The time has come for us to create a second wave of institution building and of excellence in the field of education, research and capability building in India so that we are better prepared for the 21st century."

(Source: Indo-Asian News Service)

Tourism - India Calls
Leh

Amidst the snow-capped hills of the Himalayas lies the lovely holiday destination of Leh. Situated at a height of over 3,500metres, Leh is the principal town of the Ladakh region on the eastern side of the Jammu and Kashmir state to which it belongs.

Leh is watered by the Zanskar River, which flows into the Indus River just below. A major centre of Tibeto-Buddhist culture, Leh, with its colourful gompas(monasteries), has for long attracted devout Buddhists from all over the globe. Besides, Leh's rugged mountainous terrain makes it an ideal hiking destination and attracts hikers and nature lovers from far and wide. This hill resort town is dotted with tourist attractions. An important land mark is the nine-storeyed Namgyal Palace, popularly known as the Leh Palace, which served as the royal residence during the 17th century but now lies in ruins. Close to the Leh Palace atop the Namgyal hill stands the Namgyal Tsemoor the Victory Tower, which was built by King Tashi Namgyal to commemorate Ladakh's victory over the Balti Kashmir armies in the early 16th century that led to the reunification of the Upper and Lower Ladakh.

Leh became the regional capital during the reign of King Sengge Namgyal, who ruled Ladakh during the 17th century. Sengge Namgyal's reign coincided with the golden period of Ladakh that saw Leh blossom into one of the busiest markets on the Silk Route.

Other attractions in and around the town include colourful gompas, like the Namgyal Tsemo Gomapa, Soma gompa and the Sankar gompa. One can pick up souvenirs of local handicrafts and traditional clothes from the Ladakh Festival or from the bustling bazaar.

Leh has doubled in size and is a far cry from the sleepy Himalayan town of the early 1970s. Nonetheless, the town has retained a more tranquil side, and is a pleasant place to unwind. One can meditate at the Mahabodhi Meditation centre. Adventure buffs can indulge in activities like hiking, trekking, river rafting at River Zanskar, polo and archery. Atop the Shanti Stupa one can get a better view of the neighbouring exotic locales. Leh is also a good base for day trips out into the Indus Valley. Among the string of picturesque villages and gompas within reach by bus are Shey and the spectacular Tikse Gompa.

How to reach
• By Air: Leh is well connected with important places in India. Regular flights link Leh with Delhi, Jammu and Srinagar. There are direct flights once a week from Leh to Srinagar and twice a week to Jammu.
• By Road: Land routes connect Leh with Srinagar and Manali. The Leh-Srinagar road is usually open from June to October, while the Leh-Manali route is open from July to September.

Climate
• Winter: Freezing cold with temperatures touching as low as minus 30 degrees Celsius.
• Summer: Maximum temperature can range from 20 degrees Celsius to 38 degrees Celsius in July and August. The relative humidity is low and ranges from 31 to 64 percent.
• Best time to visit: June to September.

Where to stay: Hotel De-Wa-Chan Continental, Hotel Khangri, Hotel Shambha-La, Hotel Rafica.

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

Popular Indian Recipes: Palak - Paneer

Serves: 4
Cooking time (approx.): 7 minutes
Style: North Indian Vegetarian

Ingredients:
• 600 grams (about 24 oz.) tender spinach washed
• 2 green chillies chopped
• 2 cup(s) cottage cheese cubes
• 2 tablespoon(s) butter / oil for main dish
• 1/2 teaspoon(s) cumin seeds
• 1 tablespoon(s) finely chopped garlic
• 1 tablespoon(s) finely chopped ginger
• salt to taste
• 1 tablespoon(s) lemon juice
• 2 tablespoon(s) cream
• lots of finely chopped fresh coriander to garnish

Method:
1. Blanch the spinach in lots of boiling salted water for about 3 minutes. Refresh in chilled water. Squeeze out excess water gently and blend to a fine paste with the green chillies.
2. Deep fry the cottage cheese cubes in moderately hot oil till light golden in color. Drain on absorbent paper.
3. Heat the clarified butter / oil in a heavy-based pan. Add the cumin seeds and let them crackle. Add the garlic and ginger. Fry briefly till the raw smell goes away.
4. Add the chopped spinach puree, salt and mix well. Add water if required to get a gravy of desired consistency and bring to a boil. Add the deep fried cottage cheese cubes and stir to mix gently. Mix in the lemon juice. Simmer for about 4 minutes. Put off the heat and mix in the cream.
5. Garnish with chopped fresh coriander.

Tips:
• Deep fried cottage cheese cubes can be soaked in some warm water to which lemon juice and salt are added. This will keep them extra soft and prevent them from hardening.
• The cottage cheese cubes can be added without frying. However, avoid stirring often as they crumble.
• Do not overcook spinach so as to get a bright green colored gravy.

Serve hot with: white rice or Indian bread (Chapati, Nan, Pooris).