India Newsletter: July 2007

Economic News

Capital inflows
Total foreign investments in 2006-07 stood at USD 24.7 billion, exceeding the inflows received in the previous year. Foreign direct investment has more than doubled during the year scaling up to USD 17.7 billion against USD 7.7 billion a year ago. Portfolio investments, however, remained much lower in 2006-07 compared to what was received in the previous year, with more than half of the portfolio investments coming through ADR/GDR route. Investments from the ADR/GDR route saw an increase from USD 2.5 billion 2005-06 to USD 3.7 billion in 2006-07.

Foreign trade
Indian exports were able to achieve the set target of USD 125 billion for the fiscal 2006-07 growing at 21% for the year. The government has set a new target for the current fiscal, an ambitious USD 160 billion with major thrust on exports from rural and semi-urban areas.
The year 2007-08 opened with a growth of 23% in exports in April as against 27% growth in the same month a year ago. Imports registered an impressive 40% growth during the month of April of current fiscal as compared to a low 20.5% increase in the previous year. Growth in non-oil imports picked up and clocked a growth of 54.2% against 14.5% growth in the corresponding month of previous year. Growth in the oil imports was found to slow down to 11.4% as compared to 34.6% in the corresponding period of previous year.

US company announces plan to invest in India
California-headquartered Signet Solar, which designs, develops and manufactures thin film silicon solar photovoltaic modules, had disclosed its plans to invest $2 billion to manufacture solar photovoltaic modules in India. The company proposes to set up three photovoltaic manufacturing facilities (or fabs as they are called in the semiconductor parlance) for production of thin film solar modules for clean renewable energy. This comes just months after the Government announced a semiconductor policy entailing capital subsidy to the investors setting up fabs in India.
Already Moser Baer, a leading manufacturer of optical discs, has announced its plans to establish a thin film solar fab in Noida SEZ at an investment of $250 million, becoming the first company in the photovoltaic space to seek benefits under the policy.

Israeli firm to invest in Indian real estate
Israel's Elbit Medical Imaging Ltd has signed a Memorandum of Understanding with an Indian real estate developer to build luxury apartments and commercial centers in Bangalore. The two companies will acquire the rights to develop approximately 190 acres of land situated in a luxury neighbourhood of Bangalore, business daily 'Globes' reported.
The Nasdaq-listed company will invest USD 180 million for purchase of land for the venture. The companies will build villas and luxury apartments, a hotel and 300-400 room apartment hotel, a shopping center, golf course, and various amenities including country club, swimming pool, sports facilities, and recreation areas in two million sqm of space, it said.

ONGC to acquire Shell's 33% stake in Egypt
ONGC Videsh Ltd, the overseas arm of the state-run Oil and Natural Gas Corporation, plans to acquire Royal Dutch/Shell's 33% stake in a deep-sea gas field off Egypt for USD 160 million and bring the fuel in liquefied form (LNG) to India.
Code-named 'Project Wonder' the North East Mediterranean Deepwater Concession in the Egypt Mediterranean Sea, has Shell as operator with 100% stake and is estimated to hold close to 10 trillion cubic feet of gas reserves.

Infrastructure – Investing in nation's future

For India's growth story to continue unfolding over the next few years, one of the crucial sectors is infrastructure. The Government of India has estimated that at least $350 billion is needed by the infrastructure sector- including power, surface transport, aviation and ports -over the next five years. When huge sums are invested in these core sectors, there will be a spillover effect, benefitting the entire economy. Economic growth will be catapulted to the 10 percent-plus category - from the current 8 to 9 percent levels - once the investments begin.

Prime Minister Manmohan Singh recently emphasised the importance of investing in the infrastructure sector. "The institutional architecture for sustaining high levels of investment in infrastructure has been indeed put in place - public-private partnerships(PPP), systematic bidding systems, viability gap funding and other financing mechanisms and standardized approval procedures. These are already fetching results and to some extent, the increased investment in infrastructure has been a driver of growth as well as demand." The growth of infrastructure, among others, would involve a large inflow of foreign direct investment (FDI), added the Prime Minister.

For a country that achieved 8 percent-plus gross domestic product (GDP) growth consecutively for the last three years, inadequate infrastructure is a blemish. After many years of decelerated growth in various segments of infrastructure, there is now a widespread consensus that efficient and effective infrastructure services is essential to realise the full potential of the growth impulses of the economy. While stepping up public investment, India is actively scouting for private sector participation in infrastructure to provide the adequate scale of investment, technical efficiency, proper enforcement of user charges, and competitive market structure. "The $350 billion investment during the11th Five-Year Plan, beginning 2007, is a Herculean task," notes a Mumbai-based analyst with Infrastructure Leasing and Financial Services (IL&FS). "These investments are expected to be achieved through a combination of public investment, PPPs and exclusive private investments, wherever it's feasible. Investment requirements by 2012 estimated by the Committee on Infrastructure include $50 billion for modernisation and upgradation of highways, an equal amount for power sector, $9billion for civil aviation, $11.4 billion for ports, and $68 billion for the railways."

While funding long-gestation infrastructure projects remains a major concern, efforts are currently on to build an investor friendly atmosphere in the country. The government has recently established an infrastructure fund by a special purpose vehicle (SPV), India Infrastructure Finance Company Ltd. (IIFCL), in a consortium with Citigroup, IDFC and Blackstone. IIFCL recently sought the Reserve Bank of India's(RBI) approval to enhance its limit for raising overseas funds by $1 billion. The plan is to launch a $5-billion fund soon for financing infrastructure projects in the country. Of this, $2 billion will be deployed as equity capital while the remaining will be raised through long-term debt with maturities exceeding 10 years Opportunities will be explored domestically apart from tapping the overseas market for raising long-term debt. Another source of funds, according to many, is the burgeoning foreign exchange reserves, now topping the $200-billion mark. "The idea that has been germinating for the last two years is that foreign exchange reserves must be put into use in order to promote investments, especially in infrastructure," says Finance Minister P Chidambaram.

According to the Economic Survey, there were 837 projects at the end of June 2006 (each costing $4.65 million and above) with an estimated investment of about $84 billion spread over16 sectors, including atomic energy, civil aviation, power, railways, road transport and highways, shipping and ports, urban development and water resources.

Infrastructure development has emerged as the buzzword in India, as the government realises the importance of this key sector. Pouring money into the infrastructure sector boosts employment, transforms the economy, and generates millions of dollars in tax revenue, needed to improve social sector spending.

Do You Know?

TCS among top 10 firms
Tata Consultancy Services has been ranked among the leading global IT companies by global magazine BusinessWeek. It has also been named as the only Indian entity to be listed among the world's top 10 most profitable firms. With a return on equity of 46 percent, TCS was the only Indian company to be ranked among the top 10 most profitable companies in the world. BusinessWeek, in its '2007 Information Technology 100' listing has placed TCS on the 23rd position among the world's leading infotech companies. According to the magazine, ever since TCS went public in 2004, the Mumbai-based company is growing rapidly, with a 41 per cent rise in revenues to $4.3 billion for the fiscal year ended March 31.

Rig Veda in UNESCO list
Manuscripts of the ancient Hindu text Rig Veda, dating from 1800 to 1500 BC, are among 38 new items on a UNESCO cultural heritage list. India has welcomed the inclusion of the 3,000-year-old manuscripts of the Rig Veda by UNESCO in its cultural list for posterity. "We welcome the development. Whenever items related to the cultural heritage of India get recognition by the world, it bring happiness to all countrymen," Union Tourism and Culture Minister Ambika Soni told reporters.

Mumbai, a top financial hub
Mumbai has grabbed a place in the world's top 10 financial flow hubs list, thanks to its high trading volumes for equities and good presence of global banking and financial services firms. The city has been ranked 10th among the world's biggest centres of commerce in terms of the financial flow volumes by a survey compiled by Mastercard Worldwide, which takes into consideration size of financial services network besides equity, bond, derivatives and commodity contract transactions.

Tourism - India Calls
Kalimpong

Nestled in the lower Himalayas at an altitude of 1,250 m in the eastern Indian state of Bengal is Kalimpong, a hill town that was developed by the Britis has an alternative summer getaway to Darjeeling. Kalimpong, which falls under the Darjeeling district, has evolved into a major tourist destination thanks mainly to its temperate climate. Besides, there is plenty to see in and around Kalimpong for the aesthetically inclined as well as those looking for adventure. The snow-clad Himalayan ranges serve as an enchanting backdrop to the town that holds a number of important Buddhist monasteries with rare Tibetan Buddhist manuscripts besides many edifices from the colonial era. World's third tallest peak Mount Kanchenjunga (8,591 m) is clearly visible from Kalimpong, which is also famous for its large variety of rare orchids. The town is also the starting point for several 4-7 day treks.

Attractions
• Kalimpong Arts and Craft Centre: Located within a walking distance from middle of the town is the Kalimpong Arts and Craft Centre, which is famous for its handicrafts such as tapestry bags, purses, pictorial wall panels, screens, embroidered bags and scrolls, and much more. The centre was founded by the Scottish missionaries in 1897.
• Tibetan monasteries: En route to Dr.Graham's Home are two Tibetan monasteries: Tharpa Choling Monastery at Tirpai, which belongs to the Yellow-Hat-Sect of lamas or Gelugpa Sect of the Dalai Lama; new Buddhist Monastery or Zang-dog PalrifoBrang, completed in 1975, which is onDurpin Dara Hill. In 1956 during a visit to Kalimpong, the Dalai Lama presented a set of rare manuscripts or "Kangyur" of 108volumes to Durpin Dara Monastery. Gouripur House: Situated about 2 km from Kalimpong is Gouripur House, which has been made famous by the fact that the great Indian poet, Rabindranath Tagore, used to stay here during his visits to Kalimpong and wrote many of his poems.
• Durpin Dara: Durpin, meaning "binoculars", is a popular view point of Kalimpong and is located at an altitude of 1,402 metres. From here can be seen the entire Chola Range of Sikkim, the Jelep La Pass, the Kanchenjunga Range and the Tiger Hill.
• Darmodaya Vihar: This is a temple as well as the abode of the Nepalese Buddhists. The idol of Buddha in the temple was presented by the Buddhists of Burma. The temple is run and maintained by the members of Kalimpong Dharmodaya Sabha.
• Lava: Located on a pass on the old trade route to Bhutan, at an altitude of 2,000 m above sea level and about 35 km from Kalimpong is Lava, a small hamlet surrounded by virgin forests and ideal for nature exploration, bird watching and for viewing orchids in their natural habitat. It is also the base for exploring the Neora Valley up to the 3,152 m high Rachela Pass that divides Sikkim and Bhutan. Treks to Samthar plateau also start from here. Gitdabling-Budhabare: Famous for its weekly bazaar, Gitadabling in the Git Rivervalley, is endowed with scenic countryside, forests and streams. Here one can see terrace cultivation and old style homesteads.
• Samco Ropeway: Located 20 km from Kalimpong on the highway to Siliguri, this ropeway was constructed by Christian missionaries to open up the remote Samthar Suruk region with its predominent Lepchapopulation. The ropeway spans 1.5 km over both the Teesta and Relli rivers.
• Samthar Plateau: Located 80 km south of Kalimpong at an altitude of 1,400 m, Samthar Plateau is a great place for a quiet holiday. It offers panoramic views of the snow ranges stretching from Kanchenjungain the west to Gymochen in the east. Besides, one can glimpse the unique lifestyle and culture of its Nepalese, Bhutias and Lepchas population.

How to reach
• By Air: Nearest airport is at Bagdogra, about 80 km away.
• By Rail: Main railhead is at New Jalpaiguri, about 77 km away.
• By Road: Well-connected by road from Siliguri and other important cities.

Climate
• Winter: Maximum temperature is 15 degrees Celsius; minimum is 7 degree Celsius.
• Summer: Maximum temperature is 25 degrees Celsius; minimum is 15 degrees.

Best time to visit: March-June and September-December.

Where to stay: Morgan House Tourist; Tashiding Tourist Lodge; Himalayan Hotel;Hotel Silver Oaks; Hotel Kalimpong Park; Delo Tourist Logde JP Lodge.

For more on India tourism, visit:
www.wbtourism.com
www.tourindia.com
www.indiatourism.com

Popular Indian Recipes: Aloo Gobhi (Cauliflower and Potato mix)

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

Ingredients:

• 500 grams cauliflower florets
• 4 big potatoes peeled and cubed
• 1/2 teaspoon(s) cumin seeds
• 1 tablespoon(s) ginger finely chopped
• 2 green chillies finely chopped
• 1/4 teaspoon(s) turmeric powder
• 1/2 teaspoon(s) red chilli powder
• 2 tablespoons butter / oil
• 2 tablespoon(s) finely chopped fresh coriander
• salt to taste

Method:
1. Heat the butter / oil in a heavy-bottomed pan on medium level and crackle the cumin seeds. Add the ginger and saute for about a minute.
2. Add the potato cubes and cauliflower. Mix well. Add the rest of the spices and salt to taste. Mix well and cook covered on low level for about 15 minutes or till the potatoes and cauliflower are cooked. Mix in the chopped fresh coriander leaves.

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

Note: Even if some spices are locally not available, still go ahead with cooking and you will enjoy the dish.

NRI/PIO Corner

India plans a city

A year ago, this relatively small, forgettable city in the heart of India did not have an air-conditioned cinema. In the sweltering heat of May, the rich here were known to fly one hour to Mumbai, the financial hub of India, to see a movie. There they stocked up on Levi's jeans and Domino's pizza and other big-city treats that Nagpur failed to provide. But in a social experiment highly unusual for this most unplanned of countries, the Indian government has handpicked Nagpur to be fattened and primped into an international metropolis. Lush parks and smooth roads have been lain, and malls and multiplex cinemas have sprouted. A drastically renovated airport is to become the cargo hub of India, with a terminal that is 100 times larger than the existing one and is to handle at least 100 jets at a time instead of the current five. An eco friendly mass transit system is being planned to absorb an expected surge in road traffic, years before the average Nagpurian owns a car. The government is building a special economic zone with tax breaks and ready-to use water, electricity and fiber optic cable, in the hope of attracting 100,000 technology jobs to a city long dominated by coal mining. Borrowing a chapter from China's play book, the Indian government has begun working to make metropolises out of smaller, isolated cities, from Jaipur in the north to Vijayawada in the east to Mysore in the south, garnishing them with fresh infrastructure like international airports and financial grants linked to improvements in governance.