India Newsletter: June 2007

Economic News

India's slice of global trade gets thicker
India's share in total world trade, including trade in merchandise and services sectors, has gone up from 1.1% in 2004 (the initial year of the Foreign Trade Policy from 2004-09), to 1.5% in 2006, according to statistics released by the WTO. India's total merchandise trade was valued at $294 billion in 2006 and trade in the services sector inclusive of export and import was $143 billion. Thus, India's global economic engagement in 2006, covering both merchandise and services trade, was worth $437 billion, up by a record 72% from a level of $253 billion in 2004.

Economy on a roll
The Indian economy is on a roll. Fuelled by a robust growth in manufacturing and services, the gross domestic product (GDP) grew by 9.4% in 2006-07 beating the government's previous estimate of 9.2%, highest ever in 19 years. Agriculture bucked the trend with a slowdown, registering a growth of 2.7% as compared to 6% in 2005-06. The economy was valued at a whopping $569,631 million last fiscal, up by 9.3% as compared with 2005-06. Finance Minister P.Chidambaram said that the results confirm the belief that the "Indian economy has shifted to a higher growth trajectory." The minister emphasized the criticality of growth saying that "high growth generates its own momentum. With high growth comes high investment which, in turn, reinforce growth itself."

Incredible India makes it to global Top 10 brands
Brand India is a shining metaphor of authenticity, history, art and culture, business, shopping and value. It is natural to gauge the gung-ho halo around India as a brand these days. But when leading global brand consultant Future Brands' Country Brand Index 2006 ranked India along with the top country brand tag, all previous parameters started falling into place. Incredible India figured 7 times across 20 parameters and 45 countries considered in the index. What's more? India stands tall as the numero uno brand in terms of authenticity, and has improved its position six ranks over the previous year where history is concerned. It has also up-scaled nine notches over the 2005 index insofar as art and culture goes. The index also suggests how Brand India reflects business opportunity as well as value shopping. India fares reasonably well in the index and enjoys the 10th rank in terms of a country brand.

8 Indian companies in S&P's Global Challengers List
Rating agency Standard and Poors has included 8 Indian companies in its annual 'Global Challengers List' of 300 firms. The list identifies mid-size publicly traded firms that exhibit the strongest growth characteristics. The 2007 list includes companies from 37 countries. It includes cement maker ACC, Hotel Leela Venture, Jain Irrigation, Lakshmi Machine Works, Marico, Siemens India, besides Tata Group's Titan Industries and Indian Hotels. "In the Darwinian sense, mid-caps are truly positioned in an evolutionary sweet spot, having survived beyond their start-up phases and offering stability as well as rapid growth opportunities in the future," S&P index strategist Srikant Dash said in a statement.

Trade with UK to touch Pounds 1.5 bn in 2010 : report
Trade between India and the United Kingdom is poised to reach 1.5 billion pounds by 2010 from the current level of 900 million bounds, led by sectors like healthcare, pharma, automotive, infrastructure and financial services, the Federation of Indian Chambers of Commerce and Industry (FICCI) and Yes Bank said in a report. The study outlines huge opportunities for British pharmaceutical companies to invest in India in areas such as research and development alliances, contract research and manufacturing.

Sasol, Tatas set riders for mega coal-to-oil investment
In what could lessen India's reliance on oil imports and help lower fuel prices, the Tata Group is planning to set up a plant to convert coal into diesel or crude oil in partnership with South Africa's Sasol. The South African company is the world's largest producer of motor fuel from coal. The proposed coal-to-liquids (CTL) plant - the first of its kind in India - was likely to result in annual import substitution benefits of about $25 billion for the country, said an executive involved with the project. The proposal, if it goes through, will help India, with the fourth largest coal reserves in the world, move closer to its quest for energy security.

Telecom user base touches 212 million
The telecom sector continues to grow with an addition of 5.15 million wireless subscribers in April, taking the total telephone users to 212.02 million and teledensity to 18.74 per cent. In March, the total subscriber base was 206.83 million while the teledensity was 18.31. The industry added 3.53 million wireless subscribers during the month, a Telecom Regulatory Authority of India statement said.

Coffee Industry brews a heady success story

Seaming cappuccinos, foaming lattes, no-frill espresso shots and home filtered brews... as coffee becomes a lifestyle statement and evolves from the instant to the carefully percolated, the Indian coffee industry is also charting a growth spike. India has always been known for its teas. But Indian coffee too is making its presence felt globally and in the domestic retail arena as more and more Indians sip the brew - cold, hot, steamed and whichever way they can. After stagnant growth for over a decade, domestic consumption began increasing during the last three years to touch 80,000 tonnes annually from about 55,000 tonnes till 2002-03. This was mainly thanks to the beverage moving out of kitchens to caf? lounges and the mushrooming of chains like Caf? Coffee Day and Barista. And you know coffee has arrived when the young consider it as trendy to have a cuppa as a drink in a pub.

According to Coffee Board chairperson Krishna Rau, the international coffee community has recognized the potential of the Indian coffee market and the opportunity to capitalise on the growing consumption. With increasing disposable incomes, changing lifestyles and demand for a variety of coffees, the domestic market is set for exponential growth. "With the Indian economy growing at 8-9 percent annually and consumer spending gathering momentum, the domestic market is set to grow rapidly for coffee roasting, grinding, commercial and domestic espresso machines, liquid coffee extraction plants and cutting-edge technology products," Rau says.

The aroma of Indian coffee drew global connoisseurs to silicon city Bangalore earlier this year for a first-hand look at the sector. The second edition of the India International Coffee Festival in February, attended by over 100 foreign delegates from countries like Britain, France, the U.S., Spain and Costa Rica, put in focus the challenges and opportunities faced by the sector at a time when prices are ruling high in the export markets and domestic consumption is gathering steam.

Though 70-75 percent of the coffee produced, mostly in south India, is exported as beans, the Indian industry has to prepare for competition from aggressive rivals such as Kenya and Vietnam. To recapture traditional markets and foray into emerging markets such as Japan and Eastern Europe, Union Minister of State for Commerce Jairam Ramesh lays out the roadmap for the future. He has exhorted stakeholders to brace for competition, as the stakes were no longer between producers and traders but between consumers and promoters. "With the dynamics of the international coffee market undergoing a sea-change due to globalisation and entry of low-cost countries like Vietnam, the industry has to focus on productivity, quality and variety to retain its hold and expand in new markets," Ramesh says. In this context, the Minister has also called for a strategic plan to increase the share of value-added products to 25 percent from 5 percent currently in view of the growing demand for new flavours in emerging markets like Slovenia, France and the Gulf region.

Taking a cue from Ramesh, International Coffee Organisation (ICO) executive director Nestor Osorio has advised Indian producers to concentrate more on quality and variety than mere production to increase its share of exports in the global market and boost domestic consumption. "The Indian coffee sector across the chain will have to enhance the quality from plantation to final processing to remain competitive and grow new varieties for value-addition to increase its export share," Osorio points out. Though India continues to export three fourths of its total production, it has the resources and potential to increase its share in the global market by producing more value-added products such as specialty coffee, which has great demand in the developed countries. Giving tips to the Indian industry, he says: "With the consumer becoming more demanding and variety being the flavour of the season, Indian growers, processors and roasters will have to move up the value chain -- from beans to specialty coffees - to enter emerging markets and recapture its share of the growing pie in traditional markets."At the same time, the industry will have to leverage the expertise and technology of global players to introduce a slew of new varieties in the domestic market dominated by the traditional filter coffee."

India must take advantage of the current global situation. With value and not volume becoming critical, prices are projected to remain high in the event of a deficit production in Brazil due to climactic changes and erratic weather conditions. "Production in Brazil is projected to fall by eight-nine million bags (of 60 kg) this year, as against 41 million bags in 2006. It may result in the prices going up from the present level of 80-90 cents per pound. "Indian growers and exporters should increase the share of value-added products to cash in on the emerging opportunity and sustain competition," Osorio affirms. The stock deficit could also remain higher due to increase in world consumption (118 million bags) as against the world production of 110 million bags. Brazil is in a tight situation as it has reduced exports to concentrate on the domestic market. Though the situation in Columbia is stable, Vietnam is losing its competitive edge in cost due to industrialization and rising labour arbitrage. According to Coffee Board member Anil Kumari Bhandari, festivals like the one in Bangalore in February are held to unlock the potential of the Indian coffee retail industry, to get a closer look at trends in the domestic market and showcase opportunities available. Clearly, for the drinker and the producer in India, this is the time to wake up and smell the coffee.

Do You Know?

Indian IT Industry set to surpass $ 100 bn by 2011
The burgeoning Indian information technology (IT) industry will cross the $100 billion mark in revenues within the next four years with a growth rate of 18 percent, according to a new report. The report was released by the U.S.-based IDC Ltd.'s Indian subsidiary IDC India, a global research and market intelligence irm for IT, telecom and consumer technology. "This (Indian IT industry surpassing $100billion by 2011) will be a significant milestone for the industry and will surely mean a lot in terms of contribution to the country's GDP, employment generation and a whole host of gains, which ICT (information and communication technology) usage brings along with it," Kapil Dev Singh, country manager, IDC India Ltd., said in a statement. Spending on the Indian IT and ITES (IT enabled services) grew by 26 percent in fiscal2006-07 over the previous fiscal's figure to reach Rs. 684.11 billion. "The domestic IT/ITES market has attained a significant size now, but continuing with the same growth momentum for the next five years is not going to be an easy task," said Singh. "It will require the industry to create new user segments, identify new usage and define new relevance of ICT in the consumers' life, and help develop the ecosystem required for that by designing innovative products and services," he added.

Indian economy to surpass Japan
India's economy will overtake the Japanese economy by 2025 to rank third in the world after the U.S. and China in terms of purchasing power parity, Japan's central bank chief predicted on May 28. Bank of Japan governor Toshihiko Fukui also urged India to loosen restrictions on capital flows and develop domestic bond markets so as to further integrate itself into the global economy. "Everyone recognises the large and varied influence India is having on the world," he said in Tokyo. "If we extend the current (growth) rate, India's purchasing power parity will exceed that of Japan by around 2025 and will rank third after the United States and China," he added.

Tourism - India Calls
Bhagwan Mahavir Wildlife Sanctuary – Goa

Goa conjures up images of sun, sand, surf and song - and a happy-go-lucky people who love their food and feni. That, however, is only a small part of Goa. Few know that about a third of this western Indian state -- famous the world over for its magnificent beaches-- is covered in rich tropical forests that are great reservoirs of biodiversity. The hot and humid tropical climate of the region, coupled with the presence of more than 40 estuarine, eight marine and about 90 riverine islands, supports a lush vegetation which, in turn, is the reason for such biodiversity. And the best place to get a glimpse of this biodiversity is the Bhagwan Mahavir Wildlife Sanctuary, sprawled over an impressive 240 sq km and situated at the foothills of the lush Western Ghats near thestate's eastern borders -- some 55 kmsfrom the capital Panaji.

At the centre of the sanctuary lies the Molem National Park and a wildlife enthusiast would do well to spend at least a couple of days here to fully experience all that the place has to offer. The Forest Department's jeep safaris (best taken early mornings or close to dusk) are the best way to explore the jungles, and on any given day you will most certainly come across herds of deer and gaurs (the Indian bison), Malayan giant squirrels, monkeys, cobras, pythons, as well as a large variety of birds. The lucky few may well spot a more menacing black panther, a tiger or an elephant herd. Locals, however, will tell you that the most dangerous animals in the sanctuary are the doles -- the wild dogs. They hunt in huge packs which break up into teams that station themselves in strategic positions. They then run short distances and, in a magnificent if macabre display of team effort, outrun much larger, and faster, prey like gaurs.

While out on a jeep safari, make sure you head for Devil's Canyon, a splendid geographical formation. The appropriately named View Point here is the best place from where to take in the grand sweep of the sanctuary and view its wildlife. The place will especially satisfy bird watchers who will be able to see some of the over 200 beautiful and exotic bird species that populate the sanctuary. These include the Indian black woodpecker, the Malabar pied hornbill, paradise flycatcher, fairy bluebird, the drongo, wagtails, barbets, the great Indian hornbill, kingfishers, shrikes, the emerald dove and the grey jungle fowl, among many others.

Other attractions
Just 12 km from the Mahavir Sanctuary is the 13th century Mahadev Temple that is well worth a visit. Take a day off also to visit the well-known Dudhsagar waterfalls. The waters here plunge a deep 200 metres, making it Goa's highest waterfall. The waterfall would be familiar to those travelling by the Konkan railway that runs along the coast from Goa to Kerala in the deep south. The beauty of the cascades of the Dudhsagar is visible from the trains and, in fact, the spary can be felt by travelers as they chug past.

How to reach
• By Air: Goa has an international airport at Dabolim, which is also well served by flights from across India.
• By Rail: Margaon is the main railway station near the capital Panaji. It is well connected to all major metros.
• By Road: Goa is well connected by road to Mumbai and Bangalore.

Best time to visit: Best time to visit the sanctuary is from October to March.

Accommodation: From luxury to economy hotels plus government accommodation- all are available in the state. Forest Department accommodation is also available at the sanctuary.

For more, visit:
www.goatourism.com
www.indiatourism.com

Popular Indian Recipes: Potatoes in Yoghurt (Aloo Raita)

Serves: 4
Cooking time (approx.): 15 minutes

Ingredients:

• 4 medium potatoes
• 4 teacup(s) yoghurt lightly beaten
• 1/4 teaspoon(s) Red chilli powder
• 1/2 tea spoon cumin seeds roasted and powdered
• salt, pepper and sugar to taste
• fresh coriander or parsley to garnish

Method:
1. Boil the potatoes with water on medium heat for about 15 minutes or till done. Cool. Peel and cut into cubes.
2. Now add the potatoes, half of the red chilli and cumin seed powders, salt, sugar, and pepper to the lightly beaten yoghurt. Mix well.
3. Decorate on top with the remaining red chilli and cumin seed powders.
   Garnish with finely chopped fresh coriander / parsley.

Serve chilled.

NRI/PIO Corner

Going abroad to study, work? No need for Dilli Chalo to get certificates attested

Some red tape has been cut. Come July 1 and there's good news for those wishing to go abroad for education or employment. They don't have to come all the way to New Delhi to get their academic certificates "authenticated" at the Human Resource Development (HRD) Ministry. They can go to their respective state capitals and get it done.
The HRD ministry - on the directions of the Prime Minister's Office - has delegated the power to authenticate educational certificates to all state governments. This comes after several complaints from students and job-seekers across the country of unnecessary harassment travelling all the way to Delhi. An estimated 8.5 lakh individuals went overseas last year for either education or jobs.
Now Chief Secretaries of all states have been asked to appoint "authentication officers" and publicise their name and contact details.

Welfare fund for NRI workers

The Ministry of Overseas Indian Affairs is proposing a welfare fund with a sizeable contribution from the country's insurance companies for Indian workers abroad. The fund will be utilised for training workers for overseas jobs, for providing humanitarian aid when they are in trouble at their work places and for helping them to resettle on their return.
According to official sources, a note has been prepared for the Cabinet's consideration on creating a corpus for the NRI workers welfare fund, "which may be funded initially by the Government".
The Ministry has proposed that an initial amount of Rs 1.50 billion could be allocated in 2007-08 and this could be reviewed "as per requirement".