IndUS Business Journal

Small cities, e-commerce will reshape Indian FMCG sector: Report

Dec 21, 2015 0

NEW DELHI– India’s smaller towns and cities are expected to contribute more in shaping future demand for the fast moving consumer goods sector, while e-commerce companies will contribute increasingly larger share of sales for such companies, a report said on Monday.

Abheek Singhi

Abheek Singhi

“Re-Imagining FMCG in India”, a joint report by industry chamber CII and Boston Consulting Group (BCG), said growth in disposable income, increased urbanisation, and the increase in the number of nuclear households are driving growth of the Indian branded FMCG sector estimated to be currently worth around $65 billion.

“The growth opportunity is massive, yet, the shape of this opportunity would be very different in the future. We expect greater premiumization, tier 2-4 towns to be the drivers of growth,” BCG director Abheek Singhi said at the release of the report.

The report said that households with more than Rs.10 lakh annual income would account for 50 percent of the spending in the category.

“This would lead to premiumization across categories – from unbranded to branded – and ‘luxuriating’ of products,” the Confederation of Indian Industry (CII) said in a release here.

The report said companies will need to focus on tier 2 and 3 cities and rural regions, as their contribution will be an important source of demand for the sector as more and more consumers move from the non-branded to the branded segment.

It estimates that by 2020, more that 150 million consumers would be digitally influenced in FMCG.

“Their decision making process would be influenced by digital. These consumes would spend more than $45 billion on FMCG categories,” CII said.

“Companies would need to build capabilities in digital marketing and would also need to push for greater clarity on the role of new emerging channels like e-commerce would play for them and how should they engage with these new channels without conflicting their brick and mortar partners,” it added.

On this trend, Singhi said: “The combined effects of these demographic shifts with the emergence of new channels like e-commerce, proliferation of the internet connectivity and consumption of digital media, will reshape the FMCG sector.”

Read More

US visa fee hike not to have adverse impact: Narayana Murthy

Dec 18, 2015 0

NEW DELHI– The recent hike in US visa fees will not have an adverse impact on the Indian IT industry growth, Infosys founder N.R.Narayana Murthy said here on Friday.

Narayan Murthy

Narayan Murthy

“I don’t think it is an issue at all… $2,000 or $4,000 that doesn’t matter. The important thing is that you have to provide excellent value to customers,” he told reporters after holding a meeting with the Communications Minister Ravi Shankar Prasad.

The US Congress has slapped a special fee of up to $4,500 on the H-1B and L-1 visas, used mostly by Indian tech employees going to the US for work.

Narayana Murthy said the value of Indian IT services industry is so high to the US corporations that these issues will not come in the way of the Indian It industry growth.

Read More

NRI deposits in Kerala banks surge

Dec 18, 2015 0

THIRUVANANTHAPURAM-There has been a surge in non-resident Indian (NRI) deposits in Kerala banks which have touched Rs.121,619 crore in September 2015, up from Rs.80,809 crore as on September 2013, according to banking stattistics.

These figures were revealed at the 117th meeting of the State Level Bankers Committee held here on Friday.

The total deposits of the commercial banks in Kerala as of September touched Rs.338,902 crore, up from Rs.252,338 crore in September 2013, while total advances during the same period went up to Rs.222,791 crore, up from Rs.181,166 crore in September 2013.

The statistics also pointed out that in the first six months of the current fiscal, commercial banks in the state have disbursed Rs.38,816 crore in the priority sector, which is 37 percent of the total disbursement target of Rs.104,937 crore for priority sector for 2015-2016.

Read More

India sees ‘minimal’ impact of US rate hike, markets upbeat

Dec 17, 2015 0

NEW DELHI– India on Thursday said the economy was resilient and well insulated to cope with any impact of the hike in US interest rates even as the key equity market indices in the country reacted positively to log the sharpest rally in over a month.

“We’ve to consider how the Fed (US Federal Reserve) is going to raise its rates, going forward,” Minister of State for Finance Jayant Sinha, himself a former investment banker, said. “We’re very well-equipped to deal with any turmoil or volatility that may ensue as the Fed raises rates.”

Bombay Stock Exchange

Bombay Stock Exchange

Earlier, it was widely feared that any rise in the US interest rates — the first since 2006 — could trigger a flight away of investments into the global financial market to America, as it potentially makes investments there a bit more attractive.

But the Indian equity markets have taken the development positively, at least for now — a line taken by the Chief Economic Adviser Arvind Subramanian, who saw “quite minimal” volatility in the Indian markets.

Even in the currency markets, not much impact was seen and some even felt the rupee could firm up.

“The rupee is likely to emerge as a gainer in near term,” said Bansi Madhavani of India Ratings and Research, adding that the Indian currency could consolidate in the 66.3-66.6 to a US dollar range as it was better placed due to its macro-fundamentals.

“As far as India is concerned, we are really well-cushioned. Inflation is coming down, fiscal deficit situation is very good, external situation is also robust. So, I think for all these reasons, impact on India would be very minimal,” Madhvani added.

The sensitive index (Sensex) of the Bombay Stock Exchange closed the day’s trade up 309.41 points or 1.21 percent, and the broader Nifty of the National Stock Exchange also rallied sharply to end with a gain of 93.45 points or 1.21 percent up.

From the government, among the first to react on the US Fed decision led by chair Janet Yellen, was Economic Affairs Secretary Shaktikanta Das.

“The US Fed rate hike and reference to gradualism are on expected lines,” he said, referring to a marginal hike of 25 basis points in the rates from near zero levels. “India (is) well prepared. US Fed confidence on recovery is good news for our exports, especially from IT sector.”

The US Fed move was widely expected. The rate hike, though a small one, is being seen as a sign of how much the US economy has healed since the 2007-08 financial crisis — a reason, perhaps, for the Indian equity indices to log gains for the fourth straight session.

Stakeholders and ratings agencies also echoed similar views.

“The Fed’s decision to raise the US interest rate by 0.25 points is as anticipated. We do not expect any major impact on India. Our economic fundamentals remain strong with improved growth and twin deficits largely under control,” A. Didar Singh, Ficci secretary general, said.

“The rate hike also signals a stronger US economy, which bodes well for the pick-up of demand globally and hence for Indian exports of goods and services,” Singh added.

Even credit rating agency Fitch said India was well insulated. “India is not immune to potential general emerging market jitters related to the Fed lift-off, but it is better placed than many of its peers for a number of reasons,” said Thomas Rookmaaker, director of Sovereign Ratings.

According to him, firstly India’s external balances have significantly improved since mid-2013, with foreign exchange reserves rising by some $65 billion to $353 billion as of November 2015, and the current account deficit narrowing.

Secondly, India is less dependent than several of its peers on commodity exports, and has thus not been negatively affected by the global rout in commodity prices, he added.

Read More

Novartis opens new office complex in Hyderabad

Dec 17, 2015 0
Novartis Global Headquarters

Novartis Global Headquarters

HYDERABAD– Novartis Group on Thursday opened its new office complex Novartis Knowledge City, the largest of its five global service centres.

Telangana’s Information Technology Minister K. Tarakarama Rao inaugurated the new complex of Novartis Global Service Centers (NGSC), a nine-storied structure with a gross area of 800,000 square feet, or sufficient space to enable Novartis to absorb future growth.

The other global NGSCs are in Mexico City, Dublin, Prague, Kuala Lumpur.

With about 3,500 employees, Novartis Business Services (NBS) in Hyderabad provides services in IT, financial reporting and accounting, human resources services, procurement and product lifecycle services. Pharma development focuses on data management, statistics, regulatory affairs, pharmacovigilence and clinical trial operations.

Novartis, which started operations here in 2007, had two offices at Mindspace in the Hitec City, which have now moved to the new complex, the company said in a statement.

The company’s third location in the city – the lab facility at Genome Valley, will continue its operations at the same site.

The company expects to drive collaboration, efficiency and productivity gains by providing centralized services.

Read More

India 97th on Forbes best countries for business list

Dec 17, 2015 0

By Arun Kumar

WASHINGTON–India has been ranked 97th, three notches below China, in Forbes annual ranking of the best countries for business with Denmark topping the list for the sixth time in ten years.

European countries represent two-thirds of the top 25 with the US sliding four spots to No. 22, continuing a six-year descent since 2009 when the US ranked second overall.

Denmark ranked in the top 20 in all but one of the 11 metrics used by Forbes to gauge the Best Countries for Business. It finished 28th for red tape.

New Zealand moved up one spot to No. 2 (it ranked first in 2012). Rounding out the top five are Norway, Ireland and Sweden.

While the US fell in Forbes ranking, the world’s next four biggest economies all improved their overall standing. Britain and Japan both moved up three spots to No. 10 and No. 23 respectively.

Germany improved two places to No. 18. China rose from No. 97 to No. 94.

India is developing into an open-market economy, yet traces of its past autarkic policies remain, Forbes said.

India’s rankings on the 11 metrics were: Trade Freedom 125, Monetary Freedom 139, Property Rights 61, Innovation 41, Technology 120, Red Tape 123, Investor Protection 8, Corruption 77, Personal Freedom 57, Tax Burden 121 and Market Performance 65.

India’s growth in 2014 fell to a decade low, as India’s economic leaders struggled to improve the country’s wide fiscal and current account deficits, the business magazine noted.

Rising macroeconomic imbalances in India, and improving economic conditions in Western countries led investors to shift capital away from India, prompting a sharp depreciation of the rupee, Forbes noted.

However, investors’ perceptions of India improved in early 2014, due to a reduction of the current account deficit and expectations of post-election economic reform, resulting in a surge of inbound capital flows and stabilization of the rupee.

The outlook for India’s long-term growth is moderately positive due to a young population and corresponding low dependency ratio, healthy savings and investment rates, and increasing integration into the global economy, Forbes said.

However, India has many challenges that it has yet to fully address, including poverty, corruption, violence and discrimination against women and girls, an inefficient power generation and distribution system and ineffective enforcement of intellectual property rights, it said.

Read More

Indian Business Briefs

Dec 17, 2015 0

U.N.: At 7.3%, India Will Remain World’s Fastest-Growing Economy
India is projected to grow by 7.3 percent next year and will continue to be the fastest-growing economy in the world in 2016 and 2017, according to a U.N. report. The United Nations World Economic Situation and Prospects 2016 report said India’s growth should rise to 7.5 percent in 2017.

Defence Minister Parrikar Visits U.S. To Further Cooperation

Defence Minister Parrikar Visits U.S. To Further Cooperation

PM Modi: Paris Agreement a Victory of ‘Climate Justice’
Prime Minister Modi has described the landmark climate change deal reached in Paris as the victory of “climate justice” and said there are no winners or losers in the outcome. “#ClimateChange remains a challenge but #ParisAgreement demonstrates how every nation rose to the challenge, working towards a solution,” Modi tweeted.

Govt. Cuts Time Needed to Register a Company by Half
Steps taken by the Ministry of Corporate Affairs over the past year have cut in half the number of days required to register a company, from an average of 9.57 days to 4.51 days. This is in line with Govt.’s efforts to improve the ease of doing business in India.

Govt. OKs Model Text for the Indian Bilateral Investment Treaty
The Cabinet has given its approval for the revised Model Text for the Indian Bilateral Investment Treaty (BIT). The revised BIT will be used for re-negotiation of existing BITs and negotiation of future BITs and investment chapters in Comprehensive Economic/Partnership Cooperation Agreements and Free Trade Agreements, and will provide appropriate protection to foreign investors in India and Indian investors in the foreign country.

Govt. OKs 7 Foreign Investment Proposals Worth $782 Million
The Government’s Foreign Investment Promotion Board has approved seven foreign direct Investment proposals worth $782 million including that of India Advantage S4 I, L&T Finance Holdings and Strugence Debt Fund.

Cabinet Designates 106 More Inland Waterways as National Waterways
The Cabinet approved legislation to declare 106 additional inland waterways as national waterways, bringing the total number of national waterways to 111. The expeditious declaration of National Waterways and its subsequent development will enhance the industrial growth and tourism potential of the hinterland along the waterway.

Defence Minister Parrikar Visits U.S. To Further Cooperation
At the invitation of U.S. Defense Secretary Ash Carter, Indian Defense Minister Manohar Parrikar visited U.S. from Dec. 7-10, touring multiple U.S. facilities, including U.S. Pacific Command. The two met at the Pentagon and discussed the India-U.S. defense relationship and the broader India-U.S. strategic partnership. The two leaders also observed flight operations aboard USS Dwight D. Eisenhower. Secretary Carter said the defense partnership between India and the U.S. will become an ‘anchor of global security’.

India’s Annual Industrial Output Growth Hits 5-Year High of 9.8%
Industrial growth rocketed to a five-year high in October, riding a festive season-led boom in purchases of consumer goods, providing evidence that the economy may finally be picking up pace. The surge in industrial output was the fastest since October 2010 and much higher than the upwardly revised 3.8 percent in September and the expectation of about 7.5 percent.

IBM: The 21st Century Can Be the ‘Indian Century’
Improved governance, strong social and physical infrastructure and a growing entrepreneurial spirit are the top drivers that can help make the 21st century the “Indian century,” technology giant IBM said in a report. According to the survey, 51 percent of executives said improved governance and removal of excessive regulation will be a crucial driver of sustained economic growth in the country.

Microsoft to Incubate 500 Start-Ups in 5 Years
Microsoft Ventures plans to incubate 500 start-ups in India in the next five years. Most of them are either start-ups working on the Internet of Things or independent software vendors that would aid the “Digital India” and “Smart City” initiatives. According to Microsoft, there are about 4,500 tech-based start-ups in India.

Read More

Google to train two million Android developers: Pichai

Dec 17, 2015 0

NEW DELHI–Global internet search engine giant Google will train two million new Android developers in the next three years, its chief executive Sundar Pichai said here on Thursday.

“As per the new plan (by Google), we will train two million Android developers in partnership with 30 universities. This will be done over the time period of next three years.

Sundar Pichai

Sundar Pichai

“For me, getting many developers in the workforce are going to solve many new things,” the Indian-origin CEO, who is on a three-day visit to India – his first after becoming the CEO of the restructured Google, said at the Shri Ram College of Commerce (SRCC).

He later called on Prime Minister Narendra Modi, who said he had “a very good meeting” with Pichai.

“Had a very good meeting with Google CEO,” Modi tweeted.

In the evening, Pichai attended a roundtable discussion on “Technology, Innovation and Education” hosted at the Rashtrapati Bhavan by President Pranab Mukherjee.

At his SRCC interaction, Pichaio, asked how Google evolves to stay relevant, said: “In the technology world, everything changes in such a fast pace. In 1980s the personal computers were just getting underway and then in 1990s the internet came into existence in US and 10 years after that the smart phones started getting popular.A

“This shows you how things change. So lot of what we do is to figure out what the next phase is. You have to reinvent yourself.”

Speaking his mind, the 43-year old CEO said: “If I wouldn’t have become the CEO of Google, I would still be building software products.”

Talking about the recent startup wave in the country, an upbeat Pichai said: “I have always been waiting for this change in India. Last year when I visited India, I really felt that startup culture had really taken hold here.

“Its incredible to see for the scale of India overtime, you do need enterprenuers to tackle and build things for India and globally and I think its a unique opportunity that India has. All the elements you need (for startups) are already here (in India).”

On Wednesday, Pichai met Communications Minister Ravi Shankar Prasad, who said the global search engine company has reached in-principle agreement with the Indian government for its research and development project, Loon, which is aimed at providing internet connectivity in rural India.

“I have proposed Google to partner with the state-owned telecommunications company Bharat Sanchar Nigam Limited for the pilot project,” Prasad said.

Talking about the public Wi-Fi project which he announced on Wednesday, Pichai said he was very excited about it as it is the largest such project in the world wherein 400 railway stations will get Wi-Fi internet.

“The reason we are doing it is that in India when you bring access to internet it changes lives of people,” he said.

On a lighter note, he also told the students at SRCC that he dreamt of becoming a cricketer! He said he is a big fan of Barcelona and Argentine footballer Lionel Messi.

He also mentioned that he is a fan of legendary cricketer Sunil Gavaskar. “I did dream of being a cricketer. I used to be a fan of Gavaskar and later on Sachin (Tendulkar). I always loved technology. So I used to read about Silicon Valley.”

Read More

India’s retail, wholesale inflation both move up in November

Dec 15, 2015 0

NEW DELHI–India’s annual retail and wholesale inflation rates rose considerably in November to 5.41 percent and (-)1.9 percent respectively, due largely to an increase in the prices of food items like pulses, official data showed on Monday.

The inflation rates for October stood at 5.0 percent at retail and (-)3.81 percent at wholesale levels.

Data on consumer price index (CPI) released by the Central Statistics Office here, showed that the retail inflation for rural areas was much higher at 5.95 as against 4.71 percent in urban India. For pulses, the combined inflation rate was a whopping 46.08 percent.

In fact, the food inflation based on retail prices was 6.07 percent at an all-India level, and 5.83 percent and 6.53, respectively at the rural and urban levels. This has inched up from 5.25 percent, 5.18 percent and 5.47 percent.

The Reserve Bank of India (RBI) had set a target of 6 percent annual retail inflation rate for January 2006, saying this was within reach, despite the ill-effects of scanty monsoon an the persistent inflationary pressures.

“Taking all this into consideration, inflation is expected to broadly follow the path set out in the September review with risks slightly to the downside,” the central bank had said in a review earlier this month.

Earlier in the day, data on wholesale price index showed that there was no respite yet from rising food prices, notably pulses, which pushed up the inflation rate based on this set of statistics to (-)1.99 percent for November, against (-)3.81 percent for the month before.

These numbers, released by the Ministry of Commerce and Industry, showed that prices of food articles rose sharply by 2.3 percent in just a month in November, as prices of fish, meat, eggs, lentils, condiments and spices, and fruits and vegetables all registered a rise.

Food inflation for the first eight months moved up above the zero percent level to 3.12 percent from (-)1.2 percent during the month under review. The annual index numbers for petrol, diesel and cooking fuels also rose, while still in the negative.

Pointing towards the continuing rise in the wholesale prices of the food segment, particularly in vegetables and pulses, the Federation of Indian Chambers of Commerce and Industry (Ficci) pushed for agriculture sector reforms.

“It also remains imperative that the supply side bottlenecks are removed and leakages are plugged,” the chamber’s secretary general A. Didar Singh said. He also maintained that the weakness in prices of manufactured items pointed towards depressed demand.

The Associated Chambers of Commerce and Industry of India (Assocham) said that the negative WPI, was in line with the industry expectation and was mainly contributed by softening of potato, minerals, high speed diesel, sugar and iron prices.

“The continuous downtrend in WPI seen over the past few months is a positive signal towards stabilisation of prices but the policy makers need to check continued price pressure in pulses and onions,” said D.S. Rawat, secretary general of Assocham.

The business chamber elaborated that RBI has met the conditions of budgeted WPI and CPI, which provides the central bank room for further rate cut to substitute for weakening global demand.

Fitch Group company — India Ratings and Research — pointed out that pulses inflation can flare up inflation further, as it was mainly instrumental in pushing retail prices in November.

“Going forward, while sufficient food stock will play its role in managing cereals inflation, pulses inflation would continue to exert pressure on headline inflation,” said Devendra Kumar Pant, chief economist at India Ratings and Research.

Read More

Sun Pharma sells one of its plants in the US

Dec 15, 2015 0

CHENNAI– Drug maker Sun Pharmaceutical Industries Ltd on Monday said it is selling off one of its plants in the US for an undisclosed sum.

In a statement, Sun Pharma said as a part of its manufacturing consolidation in the US, one of its wholly-owned subsidiaries has entered into an agreement with Nostrum Laboratories Inc. (Nostrum) for the divestment of the Bryan (Ohio) unit.

“As a part of the agreement, the Sun Pharma subsidiary has divested this unit as a going concern along with the employees and related products to Nostrum,” the statement said.

Read More