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.”

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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.

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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.

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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.

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Fitch retains India’s rating at lowest investment grade

Dec 15, 2015 0

MUMBAI– American rating agency Fitch on Monday retained India’s sovereign rating at the lowest investment grade of “BBB-/stable”, saying the country will continue to post good growth despite subdued prospect for the Asia Pacific region in a situation of “dollar strength in the context of an expected rise in US (Federal Reserve) rates and lower commodity prices.

“India and Vietnam have favourable macroeconomic prospects, partly reflecting lower exposure to some of the negative pressures affecting the region; however, weaknesses in their public finances have deterred us from taking positive ratings action,” Fitch said in a report titled “Emerging Asia Sovereign Outlook 2016”.

“Dollar strength in the context of an expected rise in US rates, still-sluggish global trade growth and lower commodity prices pose a challenging set of circumstances for Emerging Asia in 2016 – which partly explains why the high growth rates of the mid-2000s look out of reach,” it said.

The report said the US Federal Reserve is largely expected to make its first rate hike in almost a decade during its upcoming two-day meeting beginning on Tuesday, which would act as headwinds for emerging Asian economies.

Emerging Asia’s growth in 2016 is expected to slow to 6.3 percent, from 6.5 percent, mostly due to the projected slowdown in China.

Fitch said that excluding China and India, the region is projected to expand 5.2 percent in 2016, from 5 percent, which it said would be the fastest for any emerging region.

Moreover, emerging Asian external balance sheets are generally stronger than in 1996, the year before the onset of the Asian financial crisis.

“Sovereigns are generally much less reliant on foreign currency financing, and many countries now have more flexible exchange-rate regimes in place of the more prevalent use of explicit pegs before 1997,” the report said.

Fitch said in a report last week that India’s economy will grow by 7.5 percent in the current fiscal that will stand out globally, but warned that its business environment would remain weak despite improvements.

The agency said a “BBB-” rating, the lowest in the investment grade, along with a stable outlook and a strong medium-term growth prospect and favourable external finances, will balance out with high government debt, weak structurals and a difficult, but improving, business environment.

It said while India’s sovereign ratings continued to be constrained by the limited fiscal space of the government, the 23.6-percent salary hike recommended by the 7th Pay Commission has raised doubts about the feasibility of the medium-term consolidation path.

On inflation, it said, India’s 7.9-percent average in annual price rise over the past five years was much higher than the 3.3-percent level among the peers with the same rating. But the changes in the retail inflation profile strengthened India’s sovereign credit profile.

Meanwhile, 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.

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India ranks 130th in Human Development Index: UNDP

Dec 15, 2015 0

NEW DELHI– The United Nations Development Programme (UNDP) in its latest report has placed India’s Human Development Index (HDI) value for 2014 at 0.609, as the country climbed five spots to 130 in a list of 188 countries and territories.

Between 1980 and 2014, India’s HDI value increased from 0.326 to 0.609 — an increase of 68.1 percent or an average annual increase of about 1.54 percent.

UNDPThe HDI is a summary measure of assessing long-term progress in three basic dimensions of human development — long and healthy life, access to knowledge and decent standard of living.

“India loses 28.6 percent HDI due to inequalities, largely due to inequalities in education (42.1 percent). Among BRICS, South Africa has the highest loss due to inequalities at 35 percent and lowest is for Russia at 10.5 percent,” said a note circulated with the report.

On the Gender Inequality Index (GII), India ranks 130 out of 155 countries with a value of 0.563.

The GII reflects gender-based inequalities in three dimensions — reproductive health, empowerment and economic activity.

The 2015 Global Human Development report by UNDP, named “Work for Human Development”, was released on Monday in Ethiopia.

The report encourages governments to look beyond jobs to consider the many kinds of work such as unpaid care, voluntary or creative work that are important for human development.

As per the report, 2 billion people have moved out of low human development levels in the last 25 years.

The report shows that providing universal social protection in India could cost an estimate 4 percent of GDP.

Between 2000 and 2010, the number of direct jobs in information and communications technology in India jumped from 284,000 to more than 2 million.

As per the data provided in the report, only 39 percent of women in India were internet users compared to 61 percent of men in 2013.

The report cites that off-grid solar photovoltaic technologies will generate 90 direct and indirect jobs per megawatt in India.

For India, unpaid work, predominantly performed by women, is estimated at 39 percent of GDP.

It further stated that India’s workforce participation of women is declining — from 35 percent in 1990 to 27 percent in 2013.

In 38 countries, including India, Pakistan, Mexico and Uganda, 80 percent women were unbanked.

Globally, 74 million youth were unemployed. In India, over 10 percent of youth were unemployed, the report says.

Haoliang Xu, assistant administrator and director of UNDP’s Regional Bureau for Asia and the Pacific, said: “The availability and quality of work are key for human development in Asia and the Pacific, a region that is home to two-thirds of the world’s working-age population.

“In order to ensure that the work-force is capable of adapting to rapidly changing demands, the governments need to make strategic investments into education and health care.”

Commending the Indian government for its leadership role in the design and adoption of the Sustain Development Goals, Yuri Afansasiev, UN resident coordinator and UN resident representative in India, said: “With national development programmes like the National Rural Employment Guarantee Act, Skill India, Digital India, and Make in India in place, the government of India is on a strong footing for the SDGs.

“A greater focus on work, especially for women and youth will undoubtedly ensure success in the achievement of Agenda 2030.”

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India’s packaged food market to be worth $50 billion by 2017

Dec 13, 2015 0

NEW DELHI– India’s packaged food business has grown manifold, and it is estimated to grow to $50 billion by 2017 from $32 billion at present, a survey said on Sunday.

“There has been a major shift in food habits in metropolitan cities. About 79 percent of households prefer to have instant food due to steep rise in double incomes, standard of living and convenience,” said an Associated Chamber of Commerce and Industry of India (Assocham) survey.

packagedIt found that 76 percent of parents in big cities, mostly both working and with children under the age of five, are serving easy-to-make meals at least 10-12 times every month in some form or the other.

“The consumption of packaged food is much higher in the urban areas, especially metros, where life is fastpaced, attracting a lot more companies to launch new types of products and variants,” Assocham secretary general D.S. Rawat said in a statement.

India’s packaged food market is characterised by a large divide between urban, semi-urban and rural consumers.

Urban areas account for 80 percent of the demand for all packaged food, the report said.

The main packaged food include bakery and dairy products, canned and frozen processed food, ready-to-eat meals, diet snacks, processed meat, health products and drinks.

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India imposes anti-dumping duty on steel to curb imports

Dec 12, 2015 0

NEW DELHI–The Indian government on Thursday imposed anti-dumping duty, ranging from five percent to a whopping 57 percent, on cold rolled steel from China, South Africa, Taiwan, Thailand and the US to curb its imports.

According to an official notification, anti-dumping duty of 9.47 percent has been levied on stainless steel from the US, 29.41 to 52.56 percent from European Union (EU) and 5.39 percent from Thailand. Import from China will attract highest levy — 57.39 percent.

“Though the volume of imports has declined after anti-dumping duties were imposed five years ago in 2010, dumping of cold rolled flat products has been continuing from many producing countries,” the notification said.

The dumping of imported steel also affected the domestic industry’s production and sales and diversion of their products to end-users.

The latest attempt comes in wake of the 20 percent import tax failed to check cheaper imports, resulting in losses to domestic producers such as the state-run Steel Authority of India Ltd.

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Indian PM Modi on top of charts on Facebook

Dec 9, 2015 0

NEW DELHI–Social media enthusiast Prime Minister Narendra Modi topped the charts of Facebook under the most-viewed topic in India this year, while at the global level, he is among the top 10, where US President Barack Obama leads the pack.

Indian Prime Minister Narendra Modi

Indian Prime Minister Narendra Modi

Modi, who earlier this week figured as the sole non-Bollywood celebrity who made the cut to the top 10 slots of most-followed Indians on Twitter, was ranked No.9 on Facebook globally, under the category of topics.

Only three other people are on the top 10 list for India — late former president A.P.J. Abdul Kalam, actors Salman Khan and Deepika Padukone — which is otherwise dominated by events.

The No.2 topic from India is e-commerce boom, followed by Kalam, “Baahubali: The Beginning” and Nepal Earthquake.

Apart from Twiter and Facebook, Modi not only has a Youtube channel but also has a mobile app that helps people get his messages directly on their phones.

He also has own websites — personal and under the Prime Minister’s Office — to connect with the people.

Under the topic ‘places’, the Taj Mahal occupies the second place and India Gate in the national capital ranks first. It was followed by Marine Drive in Mumbai, Nandi Hills in Bengaluru and Gateway of India in Mumbai.

The most used new sticker packs in India were Biscuit in Love, Bigli Migli, Love, Bigli Migli, Dance Party and Minions.

In the global topics category in 2015, US Presidential Election was the most discussed one followed by the November 13 attacks in Paris.

The other topics which figured out in the top five category were Syrian Civil War and Refugee Crisis, Nepal Earthquakes and Greek Debt Crisis.

Year in Review top 10 lists were measured by how frequently a topic was mentioned in Facebook posts made between January and December 2015.

To put this list together, Facebook posts were analysed in an aggregated, anonymised way, and then ranked to create a snapshot of the year on Facebook.

In the global category of politicians who were most talked about were US President Barack Obama, Republican presidential front-runner Donald Trump, Brazilian President Dilma Rousseff, American politician Hillary Clinton and Democratic presidential candidate in the US Bernie Sanders.

The most talked about global entertainers in Facebook in 2015 were Ed Sheeran, Taylor Swift, Kanye West, Nicky Jam and Wiz Khalifa.

Among the most discussed global TV shows were “Game of Thrones”, “The Walking Dead”, “The Daily Show”, “Saturday Night Live” and “WWE Raw”.

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