IndUS Business Journal

Amazon will invest another $3 bn in India: Jeff Bezos

Jun 8, 2016 0

Washington– The US-based global e-commerce major had pledged another $3 billion investment in India as it bets big on the $14 billion e-retail space in the country that’s projected to grow to $55 billion by 2018.

“We have already created some 45,000 jobs in India and continue to see huge potential in the Indian economy,” said Jeff Bezos, Founder and CEO of at an gala hosted by the US-India Business council for visiting Indian Prime Minister Narendra Modi here.

“Our team is surpassing even our most ambitious planned milestones, and I’m pleased to announce today that we’ll invest an additional $3 billion on top of the $2 billion that we announced in 2014, bringing our total investment in India to over $5 billion.”

Bezos was also presented with the Global Leadership Awards by Prime Minister Modi, along with Dilip Shanghvi, Founder and Managing Director of Sun Pharmaceuticals. Both were honoured for their contributions and commitment to integrating India into the global economy.

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US companies to invest $45 billion more in India

Jun 8, 2016 0

Washington– Members of the US-India Business Council have already invested $28 billion in India since September 2014 and investment of another $45 billion is in the pipeline, council Chairman John Chambers told Prime Minister Narendra Modi here.

“In September 2014, the USIBC members indicated an investment figure of $41 billion that was likely to be invested over a 2-3 year period. Today, I’m happy to announce that in less than two years, about 20 percent of the USIBC members have already invested $28 billion,” Chambers said.

John Chambers

John Chambers

“In the next 2-3 years, we will see this pace accelerating — with indications that USIBC members are on track to invest an additional $45 billion, which is a conservative estimate,” he added.

Chambers met Modi just after his roundtable with the USIBC members, which included the top brass of companies like PepsiCo, Master Card, Warburg Pincus, Lockheeed Martin, Boeing, Westinghouse, Intelsat, Emerson and 8Minute Energy.

The prime minister also presented the USIBC Global Leadership Awards to Dilip Shangvhi of Sun Pharmaceuticals and Jeff Bezos of Amazon.

Speaking after receiving the award, Shangvhi said the US is the largest market for his company, and that almost 50 per cent of Sun Pharma turnover is in the US.

“We have invested close to $4 billion in the US and we continue to invest both in manufacturing, infrastructure as well in R&D. Out of $450 million we will spend on R&D, $200 million will be spend in the US,” he said.

Bezos said had pledged another investment of $3 billion in India.

“We have already created some 45,000 jobs in India and continue to see huge potential in the Indian economy,” Bezos said.

According to Vikas Swarup, spokesperson of India’s Ministry of External Affairs, the prime minister outlined the strengths of the Indian economy and its talented workforce to the chief executives of the American companies and discussed with them the prospects vis-a-vis solar energy and digital connectivity.

At a gala in his honour later, Modi lauded the contribution of the Indian diaspora in the US and said a partnership between the American capital and innovation and Indian human resource and entrepreneurship can prove a powerful combination.

He also emphasised that emerging economies also have a legitimate wish list for the rich nations.

“It is very important for us that developed countries also open their markets, not only to goods from countries like India but also to services,” said Modi.

“India is much more than a market. India is a reliable partner. It is a source of high quality scientific, engineering and managerial talent,” he said. “We are encouraging foreign and domestic investors to set up high-quality and efficient manufacturing facilities.”

On his part, Modi also promised disciplined macroeconomic policies, gender justice and empowerment, social security net and inclusive growth, while assuring that major steps have been taken to curb corruption, which was one of the main concerns and constraints in India.

“This brings me to an achievement that I think even our worst critics do not dispute,” he said at the event, where a host of top US political figures joined the business leaders to toast Modi. (IANS)

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Modi, Obama hit one for the road, partners in defence

Jun 8, 2016 0

By Arun Kumar

Washington– Call it President Barack Obama’s desire to seal his legacy or the Trump effect, as some pundits would have it, he and Prime Minister Narendra Modi celebrated his fourth visit to the US in two years with a flurry of agreements, including one in which the US commits itself to sharing defence technology with India “to a level commensurate with that of its closest allies and partners”.

Modi-Obama-DC-latestThese ranged from climate change to the vexed civil nuclear deal to US recognition of India as a major defence partner to a call on Pakistan to bring the perpetrators of the 2008 Mumbai and 2016 Pathankot terrorist attacks to justice.

Marking a big upswing in India-US relations in the last two years, the upshot of Modi’s tête-à-tête with “my friend Barack” at the White House Tuesday was that the “good story continues” in the words of Foreign Secretary S. Jaishankar.

Some icing on the cake came ahead of the third major Modi-Obama summit with reports that none of the 34 current members of the Missile Technology Control Regime (MTCR) had objected to India’s entry to the exclusive club by Monday’s deadline.

Jaishankar would not go beyond saying that India had indeed applied for entry into MTCR, but the joint statement noted “the leaders looked forward to India’s imminent entry” into the club.

Beijing is not a member of MTCR, but it is standing in the way of India’s entry into another exclusive club, the Nuclear Suppliers Group (NSG), at the behest of Pakistan.

And though the membership of the two clubs is not directly linked, if India was found good for entry into one non-proliferation regime, it should be good for the other too, Jaishankar suggested.

Prime Minister Modi with US Secretary of Defense

Prime Minister Modi with US Secretary of Defense

Fresh from garnering support for India’s membership of NSG from Switzerland ahead of a meeting of the Group later this month, Modi thanked Obama for backing New Delhi’s bid for both the MTCR and NSG clubs.

On climate change, the joint statement said “both countries are committed to working together and with others” for the ratification and full implementation of the Paris Agreement “as early as possible.”

US officials suggested that like the US, India had agreed to join the Paris agreement “this year.” But the Indian side stuck to the formulation in the joint statement saying, “India similarly has begun its processes to work toward this shared objective.”

The New York Times suggested that would-be Republican nominee “Donald J. Trump can claim at least some of the credit” for the Modi-Obama understanding on the Paris climate agreement.

Since Trump has vowed to “cancel” the Paris agreement if elected, Obama is working hard to ensure that it becomes binding before he leaves office next January.

Once the accord enters into legal force with at least 55 countries representing 55 percent of global emissions formally joining, no nation can legally withdraw for four years, it said.

On his part, “Modi wants to get as much as he can out of Obama’s last months in office,” the Times cited Ashley J. Tellis, a senior associate at the Carnegie Endowment for International Peace, as saying.

The announcement that India will buy six nuclear reactors from Westinghouse by June 2017 under the stalled India-US civil nuclear deal signed in 2005 also removes another irritant in India-US relations.

And US recognition of India as a Major Defence Partner to facilitate “technology sharing with India to a level commensurate with that of its closest allies and partners” marked another milestone in the growing US-India defence relationship.

The understanding would give India “license-free access to a wide range of dual-use technologies in conjunction with steps that India has committed to take to advance its export control objectives.

But another important dimension of Modi’s June 6-8 visit would unfold Wednesday with an address to a joint meeting of the US Congress eleven years after Washington revoked his visa under a law passed by that very body. (IANS)

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Banker Naina Lal Kidwai: Stress in Indian banking will be short-lived

Jun 8, 2016 0

By Meghna Mittal

Naina Lal Kidwai

Naina Lal Kidwai

New Delhi– The stress in the Indian banking system is short-lived and this key industry will only emerge stronger, says veteran banker Naina Lal Kidwai.

With more than 35 years of banking experience behind her, Kidwai spoke to IANS here on a host of issues — from the stressed banking scenario in India, consolidation, fears over bad loans, the bad exposures to Kingfisher and HSBC India’s own strategy shift.

She said the decision by HSBC Bank’s India unit, which she chaired till last December, to close 24 branches was not linked to the overall stress factor.

Excerpts from the interview:

Q. Was HSBC’s recent announcement to shut 24 retail branches in India an outcome of its stressed state?

A. It is a strategic move on the part of HSBC India. In fact globally, the trend in banking is to move away from multiple branches and to reach more people online, and invest in internet banking propositions. Cutting costs is only one of the factors. In the full scheme of things, it is not material. The strategy varies from bank to bank. We should not relate it to cutting costs or foreign banks feeling apprehensive, due to the stressed assets in the banking sector.

Foreign banks have always done well in India even with limited branches, as RBI (Reserve Bank of India) licenses for retail branches were hardly given. So foreign banks will in future too have limited retail branches in India, focusing on wholesale banking as they have traditionally done.

Q. But are foreign banks untouched by non-performing assets (NPAs) and bad loans in India?

A. Standard Chartered Bank has reported high NPAs. It is not that foreign banks are untouched by stressed assets — but the problem is far more manageable for them as most have not funded large projects in power and steel sectors, where a large part of the problem lies.

Q. Given the state of bad loans, should the bank chiefs be brought under a code of conduct for their lending decisions?

Naina Lal Kidwai

Naina Lal Kidwai

A. They should not be held responsible — loans can go bad any time because of various reasons. One person can’t be held responsible. If they are, then once a person becomes chief executive, loans will be held back fearing that five years down too he/she will be held reaponsible for a bad loan.

But, before giving out any loan, banks should evaluate the sector and the risks involved. The decision is taken by an entire team in a bank. The system needs to be robust with checks and evaluations. But if there is malfeasance or corruption, it must be duly dealt with. In certain cases like Kingfisher Airlines, the banks should have evaluated the sector. When did a company last make money in the airline business?

Q. How will consolidation of banks help?

A. It will not help in reducing bad loans. But yes, that’s the way forward. Then, only the strong banks will remain. Weaker ones will be merged into strong banks and it can, therefore, help with capitalisation of banks and bring down overhead costs.

Q. Do you think the bankruptcy law will be enough to check NPAs?

A: We need mechanisms on bad loans to be put into place. The new bankruptcy law is a huge step in the right direction. Implementation of the tribunals envisaged by this law will take time. It is critical that we implement this bill with urgency.

Banks also need to be more cautious as over exposure to sectors that depend on commodities or regulatory interface, was responsible for NPAs in this last downturn. It was bad luck as well that the global downturn and China slowing coincided with our domestic problems in power and commodities. But now the situation is improving.

When the Bankruptcy Bill comes into effect, it will be very helpful for the banks. We are also seeing many specialist organisations, ARCs (asset reconstruction companies) etc. who will help to work out the bad loans.

Q. By March 2017, banks have to fully disclose their NPAs. What scenario do you see emerging?

A. It’s difficult to say as to by when banks will be able to fully erase their NPAs. But yes, NPAs will be at their highest in March 2017, and post that, the NPAs will start tapering in every quarter.

Q. While still at HSBC, could you sense the NPA scenario getting worse?

A. The issue was emerging 3-5 years ago and it is only now that banks are fully providing for bad loans. But the banks will come out it. It is good that the transparency of our banks has improved and this is reflected in share prices of our public sector banks. It is beginning to move up as investors believe there are no hidden surprises. Also the finance ministry and RBI are looking to improve the governance standards of these banks.

Q. What’s keeping you busy post-HSBC?

A. I retired from HSBC India on December 31, 2015 after a 13-year stint with the bank. But I do not miss banking and divide my time between various things. I am non-executive chairman of Max Financial Services and also an independent director on the boards of Cipla, Larsen and Toubro, Altico Capital and Nestle global.

I also spend half my time in areas to do with water and the environment and women empowerment. I founded and chair ‘The India Sanitation Coalition’ — a platform where all players in sanitation convene to learn, share and collaborate with a view to enhance the overall impact and support the government’s Swaach Bharat Mission. The objective is to ensure the entire cycle in sanitation is covered — build, use, maintain and treat.  (IANS)

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A trillion dollar extra GDP by 2020 – If all Indians get online

May 30, 2016 0

By Tanay Sukumar

Four of five Indians could afford the internet if data costs fell by 66 percent, according to a Facebook-commissioned report on Internet access. But Indian telecom operators already run data services at a 11 percent loss, making cost-cutting difficult.

The statistics mean that a data plan currently priced at Rs.100 should not cost more than Rs.34 if India has to make the internet affordable for 80 percent of its population.

But the adverse economics imply this cannot happen without intervention from the government – whose Rs.20,000 crore ($2.9 billion) plan to connect each of India’s 250,000 panchayats with broadband by 2018 is three years behind schedule.

The internet reached 29 percent of Indians – 354 million users – in September 2015, IndiaSpend reported. It could rise to 39 percent, or 462 million users, by June 2016.

But if it were to reach 100 percent, India’s GDP could be increased by an extra $1 trillion by 2020, according to the Facebook-commissioned report, published this month. To put this in perspective, India’s GDP crossed the $2 trillion mark for the first time in 2014, according to World Bank data.

To optimise data costs, the report considered 500 MB data plans, classifying them “affordable” if each cost less than five percent of a person’s monthly income.

The report, titled “Connecting the world: Ten mechanisms for global inclusion”, is based on a study done by PricewaterhouseCoopers for Facebook.

Internet access drives up GDP

The Facebook report said that global GDP could grow by an additional $6.7 trillion from 2015 to 2020, if the Internet reaches every human being. This means an average growth of $1.12 trillion annually in the world GDP, which was $77.96 trillion in 2014 according to World Bank data. Of the $6.7 trillion, China and India would account for $2.089 trillion – nearly a third of what 100 percent internet access would add to the world output in the six-year period.

Also, universal internet access can bring half a billion people worldwide out of poverty, according to the report.

High data costs in developing countries

However, data costs in India, as in several other developing countries, are a major barrier.

While 92 percent people in South Asia live in range of a 2G network, no more than 17 percent can afford a 500 MB monthly data plan. Two other regions – sub-Saharan Africa (11 percent) and Middle East and North Africa (17 percent) – are comparable to South Asia. In contrast, 94 percent of North Americans can afford such a data plan.

“Prices need to drop by close to 70 percent of today’s average retail price for 80 percent of the world’s population,” said the report. In Ethiopia, a 500 MB data plan currently costs 50 times what it should for “widespread” internet affordability. (“Widespread” is defined as reaching 80 percent of citizens.)

As it stands currently, only two percent Indians can afford to watch a five-minute standard definition video daily. If you add a two-minute HD video as well, less than one percent can afford it.

The report said that in India, “internet usage is growing but many are disengaged and many more remain unconnected”. According to a February survey by the Pew Research Centre, 22 percent respondents in India said they use the internet “at least occasionally” or have a smartphone.

But are lower costs possible?

The report cited a JP Morgan analysis to show that Indian data operators make a negative margin of 11 percent from data sales. Giving examples of other developing countries with negative margins, the report said: “Operators in most of these markets already charge very low prices and have negative margins on data, which makes it difficult for them to cut prices further.”

Indonesia’s negative margin is 197 percent; in comparison, profit margins in Japan are 46 percent.

In India, nearly 70 percent of connections are on 2G networks, but these data services are no longer profitable for telecom operators. Bharti Airtel, for instance, needs more than 1,000 rural users per site per month to ensure its 2G data services break even. Providing voice services over 2G is more profitable – the company would need no more than 480 subscribers per site per month to break even.

Drawing connections with Zuckerberg’s agenda?

Mark Zuckerberg

Facebook’s Mark Zuckerberg

The study done for Facebook advocates internet access in developing countries, which may be seen as connected to the social media giant’s controversial project. The Guardian observed: “The focus on cost reductions (in the report) marries with Facebook’s own project, which is aimed at partnering carriers in developing nations to give low-cost internet access.” had come under criticism from net neutrality advocates around the world. In India, its platform Free Basics was blocked by the Telecom Regulatory Authority of India (TRAI) in February this year. Founder Mark Zuckerberg had then written: “Connecting India is an important goal we won’t give up on, because more than a billion people in India don’t have access to the internet.”

According to the study, which echoed Zuckerberg’s thoughts, 56 percent of the world is still not online. Bringing them online would “create millions of new jobs, develop vast new markets, and lift millions out of poverty”.

(In arrangement with, a data-driven, non-profit, public interest journalism platform. Tanay Sukumar is a freelance journalist. The views expressed are those of IndiaSpend.)

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Indian couple launches lawsuit against Australian bank

May 30, 2016 0

Melbourne–An Indian businessman and his wife on Monday launched the largest legal action in the state of Victoria, seeking more than $1 billion in compensation from an Australian bank.

Pankaj and Radhika Oswal accused the Australia and New Zealand Banking Group (ANZ) of underselling shares in their West Australian fertiliser company after it was seized by receivers, Xinhua news agency reported.

Opening the case in Victoria’s Supreme Court on Monday, senior counsel for the Oswals, Tony Bannon, said his clients’ 65 percent stake in Burrup Fertilisers was sold for $400 million in 2010.

Bannon said he will demonstrate to the court that the true value of the couple’s shares was in fact $990 million.

“Our evidence will demonstrate the current value is in the order of 2.36 billion Australian dollars ($1.68 billion),” he said.

Oswal claims he was bullied by ANZ executives during the sale six years ago, alleging that one executive put him in a headlock and threatened to “destroy” him before Burrup went into receivership.

The Oswals found themselves in significant debt last month when the Australian Taxation Office (ATO) issued a departure prohibition on the couple over an unpaid $136 million tax bill.

A $50 million house dubbed the “Taj Mahal on the Swan River” was left half-completed by the couple when they were forced to sell their share in Burrup as well as a luxury jet worth tens of millions of dollars and a fleet of luxury cars.

The trial has already cost tens of millions of dollars with 25 barristers appearing in court on both sides on Monday.

It is expected that the complex trial will run for between three and six months.(IANS)

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Setting up of data centers should not be mandatory: Amitabh Kant

May 24, 2016 0

New Delhi–A decision to set up data centres in the country cannot be mandatory and it will be not be conducive for the eco-system, Niti Aayog CEO Amitabh Kant said on Tuesday.

“Decision to set up data centre in the country cannot be mandatory and it will be not be conducive for the eco-system. I will initiate a dialogue with departments like IT, Telecom and Energy to create the best possible infrastructure for data centres,” Kant said.

Niti Aayog Chief Executive Amitabh Kant

Niti Aayog Chief Executive Amitabh Kant

He was speaking at the launch here of a report “Make in India – Conducive Policy & Regulatory Environment to Incentivise Data Centre Infrastructure” by Internet and Mobile Association of India (IAMAI).

According to the report, India’s data centre infrastructure market will be around $7 billion by 2020.

The Indian data centre infrastructure market is valued at $2.2 billion and is poised to be the second largest market for data centre infrastructure within the Asia Pacific region by 2020.

The IAMAI report highlights the opportunities for India to become a leading player in the global data centre market if conducive policy and regulatory frameworks are adopted.

The paper highlights key measures to increase innovation and stimulate innovation in what is widely considered to be one of the fastest growing technology segments at present.

The paper urged the government to facilitate data centre operations in India through clear policies to facilitate trans-border flow of data and tax incentives to woo foreign players.

At the same time, the paper warns against the dangers of forced localisation of data, adding that the same would reduce competitiveness, affect gross domestic product and harm India’s fledgling reputation as an emerging data centre hub.

“India has the potential to capture a big share in the Global Data Centre market,” said IAMAI president Subho Ray.

To fully realise this potential, India needs to “address some of the risks and barriers to data centre operations in the country today and create the right incentives for businesses to build effective data centre infrastructure,” said Ray.

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Tata’s e-commerce portal ties up with Genesis for exclusive luxury brands

May 23, 2016 0

Mumbai–, the Tata group’s multi-brand e-commerce platform, on Monday said it has formalised a strategic partnership with Genesis Luxury Fashion to offer a wide range of international luxury brands exclusively.

“The partnership is a testament to providing the Indian consumer authentic brand experiences directly through authorized sellers and not unknown resellers. Currently, all the international luxury brands online on are through our exclusive tie-up,” said ecommerce portal’s CEO Ashutosh Pandey.

“They are also targeting a number of luxury brands that are not present in India …. These will be launched over a period of time on,” he said.

“The partnership enable us to expand our presence to cater to our growing affluent consumer market,” said Genesis CEO Nikhil Mehra.

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Ratan Tata invests in chatbot

May 22, 2016 0

Kolkata–Ratan Tata, chairman emeritus of Tata Sons, has invested an undisclosed amount in, an artificial intelligence-based chatbot, a company founded by four IIT-Kharagpur alumni.

It was founded in April 2015 by IIT Kharagpur alumni Sachin Jaiswal, Keshav Prawasi, Nitin Babel and Shishir Modi and has now grown to a 21-member team.

Ratan Tata

Ratan Tata

“, an artificial intelligence (AI) based chatbot, announced that Ratan N. Tata, chairman emeritus of Tata Sons, has invested in the company along with Ronnie Screwvala’s Unilazer that did a follow-up round to their first seed investment,” IIT-Kgp said in a statement on Saturday. leverages the technology of natural language processing and machine learning to converse with the customers over a simple chat interface, and places their orders within seconds with the partner businesses, the statement said.

Currently, Niki chatbot offers bill payments, cab booking, recharge, food ordering, home services, cricket scores, with many more applications in the pipeline, the statement said. (IANS)

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Economy recovering but some sectors under stress: RBI governor

May 22, 2016 0

Bhubaneswar– Even though the economy is in the midst of recovery, there is still work to be done as some sectors are experiencing stress, said Reserve Bank of India (RBI) Governor Raghuram Rajan on Saturday.

“Some sectors are doing quite well while some are experiencing stress and they still need some pick up — most obviously the agriculture sector which faced two successive droughts,”, Rajan said, making his address on ‘India: Prospects and Challenges’ at the ‘Odisha Knowledge Hub’ lecture series here.

Raghuram Rajan

Raghuram Rajan

He batted for lighter regulation for small scale industries and easier business environment for startups in order to foster job creation.

“Having lighter regulation is very important for small industries. While in UK, there are lighter regulations, Italy has very hard regulations. As a result, the small firms grow much faster and bigger in UK compared to Italy,” said Rajan.

Advocating easier entry and exit rules, especially for smaller companies, he said the ‘inspector raj’ has to be further relaxed.

The central bank has brought the medium enterprises in the ambit of priority sector lending, Rajan said, adding that micro-lending by both private and public sector banks has increased in the past few years.

He said infrastructure boost including connectivity will be very helpful to small industries while market linkage is another measure that is required.(IANS)

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