IndUS Business Journal

Group studying transition to 100 percent electrical vehicles in India

Mar 25, 2016 0

New Delhi– The government has formed a working group under union minister Nitin Gadkari to study the possibility of the country transitioning to 100 percent electrical vehicles by 2030, union Minister Piyush Goyal said on Friday.

Power Minister Piyush Goyal

Power Minister Piyush Goyal

Speaking at the session “Making India a Global Economic Superpower” during the Conference on Young Indians, Minister of state (Independent charge) for Power, Coal and New and Renewable Energy Goyal said that the working group under Minister for Highways and Road Rransport Nitin Gadkari “is evaluating the possibility of India making the transition to 100 percent electric vehicles by 2030”.

“This programme is going to be on a self financing model and will look at monetising savings that consumers have on petroleum products,” he added.

Read More

Gold down on positive US data

Mar 25, 2016 0

Chicago– Gold futures on the COMEX division of the New York Mercantile Exchange fell slightly on Thursday as better-than-expected US economic data put pressure on the precious metal.

The most active gold contract for April delivery fell $2.4, or 0.20 percent, to settle at $1,221.60 per ounce.

Analysts say that comments this week from Fed officials hinting at an interest-rate increase as early as April would continue to support the dollar Friday and extend pressure on dollar-priced gold.

Gold was also put under pressure as a report released by the US Department of Labor showed jobless claims coming in 6,000 higher at the 265,000 level during the week of March 19. Analysts noted that this is the 55th report in a row under the 300,000 level, which is the longest streak since 1973. This data is also slightly lower than Bloomberg’s consensus of 268,000.

However, the precious metal was prevented from falling further as a report from the US Department of Commerce showed durable goods orders falling by a worse-than-expected 2.8 percent in February, and the ex-transportation reading falling by 1.0 percent. Analysts believe this will likely diminish expectations for the gross domestic product report due out on Friday, and is a bearish signal for US equities.

Silver for May delivery shed 7.3 cents, or 0.48 percent, to close at $15.199 per ounce. Platinum for April delivery dropped $8.4, or 0.87 percent, to close at $952.40 per ounce.

Read More

US contractor to pay $3.1 million penalty for illegal outsourcing to India

Mar 25, 2016 0

New York–An American contractor has agreed to pay New York State a penalty of $3.1 million for illegally outsourcing confidential work to India, state officials have announced.

The officials, however, cleared the Mumbai company, which was not identified, of any wrongdoing. The Indian company, which cooperated with the investigation, did not know that it obtained the work illegally and there was no evidence that it shared with anyone else or misused the personal information of 16 million people that was sent to it, officials said Thursday.

New York State Attorney General Eric Schneiderman announced on Thursday, March 24, 2016, a settlement with a state contractor that illegally outsourced confidential work to a Mumbai company.

New York State Attorney General Eric Schneiderman announced on Thursday, March 24, 2016, a settlement with a state contractor that illegally outsourced confidential work to a Mumbai company.

The action announced Tuesday on the case that goes back to 2008 hits two current areas of heightened concern in the US-outsourcing and cybersecurity. There is growing scrutiny of outsourcing, which has become a contentious issue across in the political spectrum in the presidential election campaigns. And there are serious concerns about the security of personal data because of cybercrimes.

“The agreement announced today sends a clear message: if you are a government contractor and you illegally ship jobs overseas, you will be held accountable,” New York Attorney Gneral Eric T. Schneiderman said.

Focused Technologies Imaging Services (FTIS) admitted to sending the personal information it received from the New York State Division of Criminal Justice Services to the Indian company, which was not authorized to receive the data, Schneiderman and Inspector General Leahy Scott said in a statement. It also admitted to violating a contract requirement to hire disabled people in the US to do half the work, they said.

The overall contract that FTIS had was for $3.4 million, but it paid the Indian company only $82,000 for 37.5 percent of the work, officials said.

The contract was for digitsing and indexing about 22 million fingerprint cards and creating a searchable database. The cards were of all state law enforcement officials, prisoners, parolees, and personnel undergoing background checks and included their dates of birth, identifying numbers and physical characteristics.

Because of sensitive nature of the information the contract required FTIS to do the digitisation in a warehouse in the state capital, Albany, using only employees who passed a criminal background check.

FTIS’s current sole owner Charles Tobin, is responsible for $3.05 million of the penalty and former co-owner Julie Benware for $50,000. FTIS has also agreed to perform 69 percent of the work of certain contracts it gets within two years using disabled people.

Read More

Cashew industry cries foul over customs levies

Mar 24, 2016 0

By Fakir Balaji

Bengaluru– The labour-intensive cashew industry is crying foul over the budget for fiscal 2016-17 imposing five percent customs duty, four percent special additional duty (SAD) and three percent cess on import of raw cashewnuts without consulting stakeholders, especially farmers, processors and exporters.

“We were shocked to know that the budget has imposed a cumulative burden of 9.36 percent duties on import of raw cashew nuts in shell for domestic consumption and exports without consulting stakeholders,” Karnataka Cashew Manufacturers’ Association ex-president Prakash Kalbavi told IANS in an interview.

Cashew (Photo courtesy: Wikipedia)

Cashew (Photo courtesy: Wikipedia)

Though import duty is generally levied on a commodity to protect growers and those affected in the supply chain, the burden on cashew will force its processors to shut their units and lay off labour, mostly women, and growers will be denied the benefit of export price.

“We are more dependent on imports to meet the rising demand in the country and for exports, as the cashew crop is limited and seasonal, meeting around one-third of the processing capacity and consumption,” Kalbavi said at a trade event here.

As against the two-million tonne processing capacity, only 600,000 tonnes of raw cashew nut is grown and processed, mostly in the southern and western states of Karnataka, Kerala, Goa and Maharashtra, although Andhra Pradesh, Odisha Tamil Nadu and West Bengal have started contributing of late to bridge the demand-supply gap.

“The processing industry imports around 1.5 million tonnes of raw cashew as the crop is not only far less than the demand but the yield is also lower than in other countries like Vietnam and those in west and east Africa,” Kalbavi noted.

The association has urged Finance Minister Arun Jaitley to roll back the duty, which affects manufacturers more than traders, as the latter get SAD refunded.

“As processors and manufacturers, we are at a disadvantage vis-a-vis traders, for whom SAD is refundable if imported cashews are sold raw or without processing. A trader also levies VAT (value added tax) when the shells are sold to a manufacturer for processing them into nuts,” Kalbavi pointed out.

Asserting that the duty would adversely affect the industry’s competitiveness in the domestic and export markets, Kalbavi said the imposition would negate the Modi government’s Make in India campaign, as selling imported nuts would be more viable than growing or processing them in the country.

“With about 4,000 units, the industry directly employs about 400,000 skilled workers through the year for processing the shells imported from Vietnam and Africa, which grow the crop in October-December, and make up for the shortfall in domestic production. If the duty is not withdrawn, many will shut as they cannot absorb the burden,” association secretary M. Tukaram Prabhu told IANS.

Raw cashewnuts are grown by small and marginal farmers and processed by micro, small and medium enterprises (MSME) in rural areas, employing mostly women (90 percent) and generating indirect jobs for about 400,000 people.

The association has appealed to Union Commerce Minister Nirmala Sitharaman to get the duty withdrawn before the budget is passed in parliament, as Jaitley did not respond to the industry’s plea despite the intervention of lawmakers from states where cashew is grown and processed.

“India is not only the world’s largest producer, processer and exporter of cashews but has also a huge domestic market for its kernels, especially their broken nuts, used in making sweets, biscuits, bakery items, confectionery and snacks throughout the year,” Prabhu said.

With the prices of other dry fruits like almonds, walnuts and pistachios declining the world over by 30-40 percent, the industry fears that if the duty burden is passed on to consumers, consumption of cashew nuts would slump as its buyers may switch over to other nuts that are cheaper.

“As cashew prices are at an all-time high when prices of other dry fruits have declined worldwide, we cannot absorb the additional duty,” Kalbavi concluded.

Read More

Philanthropist Desh Deshpande Writes His First Book: On Entrepreneurship and Impact

Mar 23, 2016 0

WALTHAM, MA—Philanthropist, serial high tech entrepreneur and venture and angel investor Desh Dehspande has published his first book:  On Entrepreneurship & Impact; and probably he is the best person to talk about entrepreneurship and its impact on society.

His first three questions are:  (1) Are you ready to be an entrepreneur? (2) Is entrepreneurship worth It? (3) Is entrepreneurship an art or a science?

Deshpande-Book CoverThe book is published by Deshpande Foundation and its foreword is written by N. R Narayana Murthy, founder of Indian tech giant Infosys. Even the foreword by Murthy makes you think right away.

“In business, you might be able to gain some kind of advantages using shortcuts. These advantages are short-lived. If you want to gain long-term advantage, you need the right foundation of values and principles at play,” Murthy says.  “On Entrepreneurship and Impact” is a refreshing take on the themes of entrepreneurship and impact. Every article highlights a value, principle, mindset or an approach at the foundational level rather than providing a popular tip or a technique. The focus is on the long-term win rather than gaining a fleeting advantage.”

And then again who know entrepreneurship better than Murthy himself and who knows Deshpande better than Murthy, his brother-in-law.

Gururaj “Desh” Deshpande

Gururaj “Desh” Deshpande

“I have been a witness from close quarters to watch Desh build multiple successful technology companies in the first phase of his career and now repeating his success via thoughtful philanthropy and innovative ecosystem building initiatives like the Sandbox at Hubli and other locations,” Murthy says in the foreword. “In this book, Desh generously shares his practical insights that will create a lasting impact on the thinking of those that are aiming to create a lasting impact.”

The book has only 105 pages, but each page contains powerful, practical and inspiring message. The book is divided into six sections: (1) Start, (2) Manage, (3) Grow, (4) Develop, (5) Impact, and (6) Engage.

In acknowledgement of the book, Deshpande says that it is collection of some of his reflections on entrepreneurship and social impact.

“Building a company is very much like a childbirth in many ways. It is an unique experience for every parent and they have to go through the experience to understand the pain and the joy,” says Deshpande. “ However, over time the process of childbirth has improved dramatically with better understanding.  Similarly, a better understanding of the entrepreneurial  path is improving the entrepreneurial success rate attracting more people to entrepreneurship as a career.”

In the introduction of the book, Deshpande says that the world has changed dramatically in the last six decades that he has witnessed.

“Most of the changes have been brought about by technological innovations and entrepreneurs who have put them to good use.  Millions of people have been lifted out of poverty.  The power of innovation and entrepreneurship continues to multiply in the connected world we live in,” says Deshpande.  “However, the difference between those who benefit from this new economy and those who get left behind continues to widen.  While there is a lot of conversation about a ‘shared economy’ there is no obvious solution in sight.  In some ways entrepreneurship is what is creating this divide.  However, I think entrepreneurship can also fix this problem.”

Read More

Smartphones sales in India to see 60 percent growth

Mar 23, 2016 0

New Delhi–Sales of affordable smartphones with in-built camera and internet-enabled features are set to shoot up to 160 million in 2016-17 from 100 million in 2015-16, an Assocham study said on Wednesday.

Consequent to smartphones serving the needs of amateur photographers and enthusiasts, the rise of such phones is eating into the demand for digital cameras which witnessed a drop in sales by more than 35 percent in the last one year, the study said.

“Technology is changing at such a fast pace that product developers have to think ahead of times, or else the top selling products of the present times can become outdated, without the manufacturers and those dominating the market today realising it,” said Assocham secretary D.S. Rawat.

“There has been a subsequent rise in the demand of smartphones in the country in the last one year and one of the reasons behind this growing importance is largely due to the increase in social networking site.

“Most of the youth in the country share photographs online and upload photographs which has become a new trend in the metros thus giving rise to the need for smartphones,” Rawat added.

Smartphone sales more than doubled from 44 million units in 2013 to 100 million units in 2016. The volume of smartphone sales is expected to touch 160 million units by 2017, the study added.

“Another feature of the smart devices market in India is that the country has a huge telephone subscribers base of about a billion users who are becoming aspirational even at the bottom of pyramid,” said Rawat.

According to the Assocham survey, most of the respondents said the biggest advantage of clicking pictures with smartphones is that they can be shared instantly with friends and family– a feature which is absent with most of the point and short cameras.

Almost 75 percent of the sales of mobiles and tablets came from consumers residing in tier-I and tier-II cities.

As per the study, sales of personal computers and MP3 players have already started declining due to the impact of smartphone and tablet adoption.

Read More

Around 59 percent people working in micro and small sectors are skilled

Mar 22, 2016 0

New Delhi– Around 59 percent of employees working in micro medium and small enterprises (MSMEs) are skilled, 21 percent are on job training and 20 percent are unskilled, says a collaborative research report by PHD Chamber and Avian Media.

“About 42 percent of the respondent MSMEs conduct skill development training programmes for their employees, of them 69 percent believe that these structured programmes benefit their organisations in terms of improving know-how, reducing knowledge gaps among employees and enhancing their capabilities to handle responsibilities,” the report stated.

Corporate Social Responsibility (CSR) has emerged as a tool for addressing various long standing problems of the MSMEs in the country in the wake of the changing dynamics under the Make in India initiative, it said.

The report titled “Bolstering MSMEs for Make in India – with special focus on Corporate Social Responsibility” was released by R.K. Panigrahi, director, MSME Development Institute, Ministry of MSME.

The survey was conducted for MSMEs situated across Faridabad and Okhla regions of northern central region.

According to the survey report, CSR funding to the MSMEs will give the sector exposure to new methods, processes, technology, excellence and other key parameters of large enterprises, which would enable the SMEs to enhance their capacities and overall productivity.

“MSME sector has immense potential to play a significant role to push India’s growth in strong and sustainable growth trajectory. The sector must be facilitated in terms of their credit demand, enhanced scope for capital requirements, availability of land and labour and ease of doing business,” said Mahesh Gupta, president, PHD Chamber.

To pursue the targets of Make in India, the government has identified various sectors which are to be focused, including automobiles and auto components, food processing, leather and textiles among others.

Since, almost all these identified sectors are majorly operating under the MSMEs segment of the country, this sector will play a critical role in making the Make in India initiative a success, the report further said.

Read More

Virtusa’s open offer to purchase 26 percent Polaris stake

Mar 22, 2016 0

WESTBOROUGH, MA –Virtusa Corp, Westborough, MA-based technology outsourcing company, has floated an open offer to purchase 26 percent stake in Polaris Consulting & Services at Rs.220.73 per share and amounting to a total outlay of Rs.590 crore, a release said on Tuesday.

The offer which started on March 11, closes on March 28.

Kris A. Canekeratne

Kris A. Canekeratne

The open offer price of Rs.220.73 for the shares of Polaris reflects a premium of about 31 percent over the price of 6 months ago and about 40 percent over the price one year ago, the statement said.

“The earning numbers of Polaris have been average to below average over the last few quarters. Overall the small-cap and mid-cap IT companies have been laggards over the last six to nine months.

“The good performance of Polaris on the bourses is mainly on account of the ongoing open offer, After March 28, we expect the stock of Polaris to retreat,” said Dinkar Shanbhag, head- Institutional Equity, at Mumbai-based broking firm Lotus Global.

On March 3, Virtusa announced that its India subsidiary, Virtusa Consulting Services Private Limited (“Virtusa India”), has acquired all of the outstanding shares of Polaris Consulting & Services, Ltd. (“Polaris”) (BSE: POLARIS NSE: POLARIS MSEI: POLARIS) held by Mr. Arun Jain, founder and chairman of Polaris, Orbitech Private Limited, and certain other minority stockholders, representing an aggregate of approximately 51.7% of the fully diluted outstanding shares of Polaris for an average of $3.12 per share (INR 213.883 per share), for an aggregate purchase consideration of $165.89 million (INR 11,364 million).

Jitin Goyal will remain CEO of Polaris, and was appointed President, BFS, to lead Virtusa’s and Polaris’ business operations serving the banking and financial services verticals. Raj Rajgopal, President of Virtusa, was appointed President, ETS, and will lead Virtusa’s and Polaris’ operations serving the insurance, communications & technology, and media, information & other verticals. In their respective roles, Mr. Goyal and Mr. Rajgopal will be responsible for executing Virtusa’s and Polaris’ growth strategies, which will include driving over $100 million of cumulative revenue synergies over the next three fiscal years from the business combination.

Kris Canekeratne, Virtusa’s Chairman and CEO, stated, “We are extremely pleased to close phase one of the Polaris transaction and we look forward to completing the mandatory open offer to Polaris’ public shareholders. Combined, Virtusa and Polaris create a robust platform and a unique and compelling value proposition. We are enthusiastic about providing end-to-end solutions and services in banking and financial services, greatly expanding our addressable market and positioning us well to pursue larger consulting and outsourcing opportunities.”

Mr. Canekeratne continued, “I would also like to congratulate Jitin and Raj on their respective appointments. Their unparalleled industry expertise, leadership skills, and proven track record of driving business growth will be invaluable as we embark on our next phase of expansion.”

Read More

Abraaj Group leads BigBasket’s $150 million fundraising

Mar 22, 2016 0

Bengaluru– Global private equity investment firm Abraaj Group on Tuesday led a $150 million fundraising drive by Indian E-commerce grocery startup BigBasket.

“We are excited about the investment opportunities in India, a key geography for us, where we continue to identify and partner with market leading companies,” Abraaj Group Asia head Omar Lodhi in a statement.

“Abraaj will leverage its strong experience in the consumer sector to enable BigBasket to further enhance its strong domestic position,” he added.

In addition to the participation of existing investors Bessemer Venture Partners, Helion Advisors, Zodius Capital and Ascent Capital in the BigBasket’s latest fundraising, new investors, World Bank subsidiary International Finance Corporation (IFC) and Sands Capital also marked their entry.

“We intend to increase the reach of our just-launched one-hour express delivery service and also launch our marketplace for specialty stores in the coming months,” said BigBasker co-founder V.S. Sudhakar about the utilisation of the raised funds.

“The proceeds of this round of fundraising will be used to finance BigBasket’s growth through further penetration into existing markets, expansion into Tier II cities across India, scaling-up of its recently launched express delivery and specialty store business that caters to top-up and emergency purchases, and increasing the product range offered to customers,” he added.

Founded in 2011, the online grocery startup currently operates in eight metro and 10 tier two cities retailing over 19,000 products from a range of 1,000 brands which include fruits, vegetables, meat, beverages and personalAcare products.

For Abraaj Group, this is the third investment in E-commerce, after acquiring stakes in Turkish online retailer Hepsiburada and Dubai-based cab hailing app Careem.

After entering India in 2006, this is its latest move is the here, following investment in Hyderabad based Care Hospitals and a gigawatt scale renewable energy platform partnership with Aditya Birla Group.

Read More

Edelweiss to acquire JP Morgan’s Indian assets

Mar 22, 2016 0

Mumbai– Edelweiss Asset Management Limited (EAML) on Tuesday announced an agreement to acquire JP Morgan Asset Management (JPMAM) managed Indian onshore fund schemes, onshore mutual fund business and international fund of funds.

“Given the complementary business advantages and the significant business that JPMAM has built, this acquisition is a natural win for both Edelweiss and JP Morgan,” said Edelweiss Group chief executive Rashesh Shah in a statement about the deal which is subject to regulatory approvals.

JPMAM’s assets under management (AUM) stand at Rs.7,081 crore while the combined valued of JP MorganA and Edelweiss AUM amount to Rs.8,757 crore.

According to the statement, the acquisition will further bolster Edelweiss Group’s Rs.31,000 crore global asset management businesses.

To ensure business continuity and further growth, EAML has expressed its commitment to absorb majority of JPMAM’s employees.

Read More