India to showcase small oil, gas finds at US energy meet in Houston

Feb 20, 2016 0

New Delhi–Petroleum Minister Dharmendra Pradhan and senior officials from the sector will showcase India’s small and marginal oil and gas field discoveries at a global energy conference in the US beginning on Monday in order to seek investors for their proposed auction.

Dharmendra Pradhan

Dharmendra Pradhan

An official source here said that Pradhan and senior officials and executives will travel to the IHS CERAWeek Conference in Houston being held from February 22-26, which is expected to be attended by several oil ministers and oil company chief executives.

According to an IHS release, Saudi Arabian Petroleum and Mineral Resources Minister Ali bin Ibrahim Al-Naimi will deliver a special address during the 35th IHS CERAWeek.

The Indian government announced last September that it will auction 69 small and marginal oil and gas fields on a new revenue sharing model, where bidders will quote the revenue they will share with the government at both low and high ends of the price and production band.

The new revenue sharing model will replace the controversial production sharing contracts (PSCs) – by which oil and gas blocks are awarded to those firms which show they will do maximum work on a block – that has governed the bidding under the earlier nine New Exploration Licensing Policy (NELP) rounds.

The change in model is designed to help keep the government share in cases of windfall from both steep rise in prices as well as quantum jump in production.

The PSC regime, which allows operators to recover all investments made from sale of oil and gas before profits are shared with the government, was criticised by India’s official auditor, who said it encouraged companies to keep inflating costs – “gold plating” – so as to postpone giving higher share of profits.

Of the 69 fields of state-run explorers of Oil and Natural Gas Corporation (ONGC) and Oil India Ltd (OIL) which are to be auctioned, 27 are in Mumbai offshore while another 15 are in the Krishna Godavari (KG) basin. On offer are also 10 discoveries in the Assam Shelf.

ONGC and Oil India surrendered 63 and six oil and gas fields, respectively, which they found uneconomical to develop in view of small reserve size and high economic cost.

Cumulatively the surrendered fields hold about 50.8 million tons of oil and 53.45 billion cubic meters of gas. The biggest discovery is D-18 in the Mumbai offshore that holds 14.78 million tons of oil reserves.

Among the gas discoveries, the largest is ONGC’s B-9 find in the offshore Kutch basin that has in-place reserves of 14.67 billion cubic metres.

Pradhan has said that companies offering the maximum revenue share or percentage of oil and gas to the government, and committing to do more work, will win.

He has said that with this move, producers will be spared day-to-day government interference and the government would unlock 89 million tonnes of untapped hydrocarbon reserves worth Rs.70,000 crore.

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How India will protect nuclear liabilities of US firms

Feb 19, 2016 0

By Amit Bhandari

A $48-billion (Rs 3.26 lakh crore) penalty claimed by the US government from Volkswagen for cheating on diesel-car emissions is about 200 times as large as the $225 million (Rs 1,500 crore) insurance pool set up by Indian insurance companies to compensate US nuclear companies for mishaps in India.

If a US nuclear company were to build a reactor in India that suffered a catastrophe, and people were to die in India, the US government’s position seems to be that American suppliers shouldn’t face civil or criminal liability. The US believes the Indian civil nuclear liability law, which calls for both penalties, is unduly harsh. Rather than say so directly, US officials keep repeating that the “Indian law is inconsistent with the international liability regime”.

The Indian civil nuclear liability law holds the equipment supplier responsible for any incident caused by the supplier or its employees. The Indian liability law differs from those of other countries because it was drafted keeping in mind the 1984 Bhopal tragedy – where, despite 5,000 deaths and effects across generations, no one was held criminally liable.

The penalty demanded in the Volkswagen case is about 100 times the compensation of $470 million – ($907 million in 2014 dollars) – paid by US firm Union Carbide after the Bhopal Gas tragedy, which also left 70,000 people maimed or injured. Volkswagen’s cover-up caused no injuries or deaths.

Although the Indian government wants to protect US nuclear companies against the Indian liability law, critics argued that these companies are using India’s eagerness to avoid any liability, if something goes wrong.

India wants to build more nuclear power plants in an attempt to reduce the share of coal in electricity generation. Increasing the use of nuclear power is also a part of the country’s strategy to tackle climate change.

India currently has 5,780 MW of nuclear power in operation and plans to add another 17,400 MW, making it possibly the largest market for nuclear power after China, and a financially lucrative prospect for Western firms faced with limited domestic sales.

However, the 2011 Fukushima nuclear disaster has heightened concerns of nuclear safety and accident costs. The fallout of that disaster will also make it hard to change India’s liability laws.

The US’ large settlements extend to corporate wrong-doing beyond its borders

Large settlements in the US are a regular feature. In October 2015, the Justice Department arrived at a settlement with oil major BP, which will pay a penalty of $20.8 billion to cover the economic and environmental damage arising from a 2010 oil spill in the Gulf of Mexico.

Volkswagen could, in theory, face fines of as much as $37,500 per vehicle for each of two violations of the law; up to $3,750 per “defeat device”; and another $37,500 for each day of violation, a Reuters report said.

In April 2010, a deepwater oil-drilling rig operated by BP, the Deepwater Horizon, suffered an explosion which killed 11 men, and the well it was drilling leaked over five million barrels of oil in the Gulf of Mexico.

This was the largest-ever settlement in the history of the Department; the Volkswagen penalty could be larger.

A number of companies have paid tens of billions of dollars in fines over the past decade for breaking US law.

Top US banks, such as Bank of America, JP Morgan, Citigroup and Morgan Stanley, have paid multi-billion dollar fines for their roles in the 2008 global financial crisis, caused by reckless business practices of large Western banks.

The remit of the US Justice Department extends beyond its borders and to foreign firms as well. In May 2015, five global banks–Citicorp, JP Morgan, Barclays, UBS and the Royal Bank of Scotland–agreed to pay fines adding up to $2.5 billion, for manipulating a widely-used financial benchmark set in London. This brings the total penalty paid by these banks for their role in this manipulation to $9 billion.

UK-based HSBC was fined for “illegally conducting transactions on behalf of customers in Cuba, Iran, Libya, Sudan and Burma”–countries under US economic sanctions.

During the financial year 2015, the US justice department collected $23 billion in penalties in various civil and criminal cases, slightly lower than the collection for 2013, when it had a record haul.

Indian firms also fined in the US

While the US nuclear industry wants to avoid any liability in India for acts of omission or commission, Indian companies have often been slapped with large fines for violations of US law.

Drug manufacturer Ranbaxy paid penalties of $500 million (Rs 3,400 crore) in 2013 for falsifying data about its drugs and for not following proper manufacturing practices–more than twice the value of the nuclear liability insurance pool to be created in India.

In 2013, tech firm Infosys paid a $35 million penalty in a civil settlement on allegations of visa misuse; the firm maintained that the “claims are untrue and remain unproven”.

India has started levying penalties too

India, too, has started levying big fines. For instance, in 2013, a group of Indian cement companies was fined Rs 6,698 crore by the Competition Commission of India for working as a cartel and over-charging consumers. This amount, levied for unfair business practices rather than causing deaths and injuries, is 4.4 times the proposed liability cap for nuclear incidents.

Similarly, Delhi-based real estate firm DLF has been recently ordered to pay a penalty of Rs 630 crore for unfair business practices.

(In arrangement with IndiaSpend.org, a data-driven, non-profit, public interest journalism platform. Amit Bhandari is a media, research and finance professional. The views expressed are those of IndiaSpend.)

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US firms to invest $27 billion in India

Feb 17, 2016 0
Mukesh Aghi

Mukesh Aghi

New Delhi– Over 50 American firms are expected to invest $27 billion (Rs.1.85 trillion) in India by 2017 as against $15 billion invested since May 2014, US-India Business Council president Mukesh Aghi said on Wednesday.

“We expect 52 US companies to invest $27 billion in India this year and next year, in addition to $15 billion by 20 percent of our member firms since Prime Minister Narendra Modi assumed office,” Aghi said, citing a council survey.

Noting that reforms under Modi’s leadership were resonating well with US firms, he commended the country’s rise in the ease of doing business index.

“Our members are buoyed by the direction of reforms, including fast-tracking approvals, transparent auction of natural resources and facilitating a level-playing field for investors,” he said.

Reorganising its policy groups to address Modi’s priorities, focusing on manufacturing ties, the council told the prime minister at a meeting with him that a robust IP (intellectual property) policy was essential to boost investor confidence.

“We also stressed on greater clarity on certain FDI regulations and implementation of the Goods and Services Tax (GST),” Aghi added.

A delegation led by council chairman and global networking major Cisco head John Chambers met Modi and key ministers to explore new opportunities for the India-US relationship.

Council’s ex-chairman, MasterCard chief executive Ajay Banga, vice-chairman Ed Monser and Aghi were also present.

“Both countries have a huge opportunity to scale bilateral trade exponentially in the coming years. The council has built a strong foundation in engaging US business in India to take the relationship to the next level,” Chambers said later.

Asserting that Indo-US ties and India’s business climate were getting stronger, Banga said the opportunity for the council to act as a catalyst for greater investment in India was greater than ever before.

Formed in 1975 at the behest of both the governments, the council is the premier business advocacy organization, comprising 350 top-tier US and Indian firms advancing Indo-US commercial ties.

The council is also the largest bilateral trade association in the US, and has offices in New York, Silicon Valley and New Delhi.

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US Agency and Andhra Pradesh to develop Visakhapatnam as smart city

Feb 12, 2016 0

VISHAKHAPATNAM–The US Trade and Development Agency (USTDA) and Andhra Pradesh government on Friday signed an MoU for developing Visakhapatnam as a smart city.

The USTDA signed the MoU with the department of municipal administration on funding for drawing up master plan for Visakhapatnam smart city.

Leaders in the smart grid arena AECOM, IBM and KPMG will provide Vizag with a planning framework and development strategy for several high-priority investment projects for smarter urban development.

The agreement was signed by Principal Secretary, Municipal Administration, Karikal Velavan and USTDA country manager Heather K. Lanigan in the presence of Chief Minister N. Chandrababu Naidu, USTDA director Leocadia I Zak and US Ambassador to India Richard Verma.

The MoU will advance Visakhapatnam’s efforts to make it more efficient and sustainable through the development of interconnected infrastructure, communications and data systems.

Vizag was one of the 20 cities named by the central government last month under the first phase of smart cities programme.

Speaking on the occasion, Naidu said Vizag would be developed into one of the finest smart cities in the country with the assistance of the US. He said the project offer great opportunities for the US companies.

“We are proud of our cooperation with the state government of Andhra Pradesh and the important role our partnership will play in advancing one of India’s highest economic development priorities.A By bringing together the right private sector expertise and a committed partner, the opportunities for growth are limitless,” said Zak.

This cooperation is one component of a multi-faceted effort by USTDA to support the development of smart cities in Andhra Pradesh, Uttar Pradesh and Rajasthan.

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Wipro to Acquire US Firm HealthPlan Services for $460 Million

Feb 11, 2016 0

SOMERSET, N.J.—Wipro Limited, a leading global information technology, consulting and business process services company, announced that it has signed a definitive agreement to acquire HealthPlan Services from Water Street Healthcare Partners, a strategic investor focused exclusively on the health care industry.

Since partnering with Water Street in 2008, HealthPlan has grown to become the leading independent technology and Business Process as a Service (BPaaS) provider in the U.S. Health Insurance market. As part of the agreement, Wipro will acquire 100% of HealthPlan Services’ shares for a purchase consideration of USD 460 million.

Jeff Bak

Jeff Bak

Headquartered in Tampa, Florida, HealthPlan Services employs over 2,000 associates. HealthPlan Services offers market-leading technology platforms and a fully integrated Business Process as a Service (BPaaS) solution to Health Insurance companies (Payers) in the individual, group and ancillary markets. HealthPlan Services BPaaS solutions are ideal for payers who want to operate in the private and public exchanges and the off-exchange individual market in the U.S.

HealthPlan Services connects its payer clients to over 40 public exchanges and over 150 private exchanges in the U.S. HealthPlan Services has powered many of these payers to achieve desired membership growth, while keeping their administrative costs predictable.

The Patient Protection and Affordable Care Act has dramatically altered the health insurance landscape in the U.S. The post-reform individual market is growing at a fast pace and is expected to continue to grow in coming years. By partnering with HealthPlan Services, Wipro gains the competitive, first-mover advantage in the high growth public and private exchange space for individual, group and ancillary markets. This partnership also strengthens Wipro’s payer portfolio, with access to HealthPlan Services’ payer clientele.

Wipro Logo

Wipro Logo

This transaction is closely aligned with Wipro’s key levers for growth, which are to dominate the services market through industry utilities that multiple customers can use. This acquisition adds another platform-led Business Process as a Service (BPaaS) offerings, delivered on cloud to Wipro’s services portfolio. Wipro’s clients currently include over 100 U.S. payers, leading healthcare providers, and public health agencies.

“The partnership with HealthPlan Services positions Wipro to participate in the shift of the US health insurance industry towards a consumer-centric business model. HealthPlan Services strengthens Wipro’s position in the health insurance exchange market while offering synergies with Wipro’s presence in the Managed Medicare and Commercial Group Insurance markets. The addition of HealthPlan Services’ capabilities complements Wipro’s strengths in claims processing and back office services. This is a strategic move for us, as it advances Wipro’s vision of leveraging unique insights into customer buying behavior and applying this across the healthcare value chain. This will help us lower the cost of healthcare and transform the quality of the member experience,” said Jeffrey Heenan Jalil, Senior Vice President & Head – Healthcare Life Sciences and Services, Wipro Limited.

“We welcome the HealthPlan Services team to the Wipro family. Over the past eighteen months we have transformed our BPS business into a platform-led BPaaS business with a strong focus on the healthcare services market. This transaction will help us become the leader in administrative service in the U.S. health insurance industry. The partnership with HealthPlan Services also reinforces our commitment to the US market by creating jobs and value within the US economy,” said Nagendra Bandaru, Senior Vice President and Head – Business Process Services, Wipro Limited.

“We are excited about what Wipro and HealthPlan Services can accomplish together for our customers and employees,” said Jeff Bak, CEO and President of HealthPlan Services. “The combination creates the first true end-to-end solution in the individual under 65 commercial market and the governmental over 65 and Medicaid markets. Together, Wipro and HealthPlan Services will give payers the power to accelerate growth strategies while providing both Business Platform as a Service (BPaaS) and competitive administrative service solutions. We are delighted that Wipro believes in our talented people, strategic vision, corporate culture and business fit to help insurers succeed in a consumer-centric world.”

This transaction is subject to customary closing conditions and regulatory approvals and is likely to be completed in next 60 to 90 days.

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Oracle CEO discusses smart city solutions for Maharashtra

Feb 10, 2016 0

MUMBAI– Oracle CEO Safra Catz on Wednesday met Maharashtra Chief Minister Devendra Fadnavis and discussed how Oracle can provide assistance with smart city apps to improve citizen experiences.

Safra discussed three mobile solutions — myOneCity, mHelp and mTourist — to help authorities provide multiple channels to address public grievances, be better prepared for natural disasters and improve tourism in the state.

Safra Catz

Safra Catz

“I am thrilled to have this opportunity to meet with the chief minister of Maharashtra to discuss his vision and priorities for the state and to discuss our nearly three decade’s commitment to India. We have 38,000 employees and 700 partners in India and we are still growing strong,” Catz said in a statement.

myOneCity will help citizens interact with government agencies through multiple means of communication with particular focus on mobile and enable authorities to address these concerns through monitoring process.

The complaint gets registered and intelligent backend engines will route it to the right department.

Citizens can take pictures, which will be automatically geo-tagged, and embed them within the complaint.

mHelp will provide citizens and city administration a comprehensive mobile solution for disaster management. The app will ensure timely alerts and response from government for much needed co-ordination between officers on the field and affected citizens.

mTourist will help tourists access information about places to visit, events to attend, maps, road traffic, weather and pollution levels and make bookings.

Catz was conferred with the Global CEO award by apex IT body Nasscom for her role in driving business transformation at Oracle Corporation.

She received the award at the 24th Nasscom India Leadership Forum in Mumbai.

The award recognises individuals for business excellence and technology leadership within their organisations in areas such as vision, excellence in IT usage, business leadership and contribution to India.

Past recipients include luminaries such as Ratan Tata, Nobel laureate Amartya Sen, Intel chairman Craig Barrett, and HSBC Group CEO Stephen Green, among others.

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Mukesh Ambani, Sam Pitroda in US engineering academy

Feb 9, 2016 0

MUMBAI– Reliance Industries chairman Mukesh Ambani and tech evangelist Sam Pitroda are to be inducted as members of the prestigious National Academy of Engineering of the US, taking the Indians in it to 10, among 2,275 eminent people.

Founded in 1964, the US-based National Academy of Engineering (NAE) is a private, independent, non-profit institution, providing global engineering leadership.

Mukesh Ambani“Individuals in the newly elected class will be formally inducted during a ceremony at the NAE’s annual meeting in Washington, D.C. on October 9, 2016,” a statement from the institution said.

The other Indian members include P.C. Kapur of IIT-Delhi, scientist R.A. Mashelkar, Narayana Murthy of Infosys, scientist Roddam Narasimha, Pradip P. of TCS, scientist P. Ramarao, chemical engineer M.M. Sharma and industrialist Ratan Tata.

Founded in 1964, the academy is a private, independent, non-profit that provides engineering leadership with a mission to promote a vibrant engineering profession and giving insights to the US government on related matters.

As per an announcement of the non-profit, Pitroda is a member for developing rural telecom infrastructure for India, while Ambani has made the cut for engineering a business leadership in oil refineries, petrochem and related industries.

The institution has more than 2,000 peer-elected members and foreign members, who are considered among the world’s most accomplished engineers — people who provide leadership for numerous projects to link their domain with better quality of life.

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Liability pact makes India-US N-deal a big deal

Feb 7, 2016 0

By Arun Kumar

WASHINGTON–India’s ratification of an international convention on nuclear energy accident liability has removed a major irritant in India-US relations and would help them unleash the full potential of the landmark India-US nuclear deal.

The US was quick to welcome the development removing the last hurdle in the way of US firms to build nuclear plants in India and generate an estimated $100 billion in business seven years after the deal was signed with much fanfare.

Indian Prime Minister Mody

Indian Prime Minister Mody

A deal between Toshiba Corp’s Westinghouse Electric to build six nuclear reactors in Gujarat may well be signed in time for a possible visit by Prime

Minister Narendra Modi to Washington to attend the March 31- April 1 nuclear security summit.

Westinghouse is reported to be negotiating with the state-run operator Nuclear Power Corp of India Ltd (NPCIL) with the hope of making a “commercially significant announcement” during Modi’s expected US visit and sign a final contract later in the year.

Another US company GE Hitachi is said to be in talks about the techno-commercial viability of its reactors at sites in Andhra Pradesh.

American firms had been allocated sites in the two states under the nuclear deal signed in October 2008 after the then Indian Prime Minister Manmohan Singh staked his government over it.

However, the two US companies were reluctant to go ahead in the face of India’s tough 2010 nuclear liability law that made the suppliers of nuclear plants liable for damage in the event of an accident.

Though the deal otherwise transformed India-US relations, Washington was sore that while it had done the heavy lifting to get India a waiver from the

48-nation Nuclear Supplier Group to do nuclear business with other countries, it had been left high and dry.

Finally, it was during President Barack Obama’s historic visit to New Delhi last year as chief guest at India’s Republic Day that he and Modi reached what was described as a “breakthrough understanding” to allay US concerns about industry liability.

The understanding sought to resolve India’s concerns about inspections and US concerns about liability for a nuclear accident with Washington saying India’s laws and regulations do not meet international standards.

On the first, with India agreeing on ‘administrative arrangements’ providing

for tighter checks by the International Atomic Energy Agency, Washington dropped its insistence on ‘flagging’, or tracking, fuel consignments.

On the issue of liability, the understanding endorsed the principle of strict liability, which ‘channels’ costs arising from a nuclear accident to the plant operator and requires it to pay no-fault compensation.

To address another issue posed by India’s 2010 nuclear liability law that allows a plant operator to seek secondary recourse against a supplier, an India Nuclear Insurance Pool (INIP) with a liability cap of 15 billion rupees ($222 million) was launched in June 2015.

Now with India agreeing to ratify the IAEA Convention on Supplementary Compensation for Nuclear Damage (CSC), it would also gain access to international funds with risk shared according to how many nuclear plants a country has.

The Feb 4 submission of the instrument of ratification to IAEA in Vienna, according to Indian officials “is the conclusive step in the addressing of issues related to civil nuclear liability in India.”

State Department spokesman John Kirby Friday acknowledged that Indian membership in the CSC will “facilitate participation by companies from the United States in the construction of nuclear reactors in India.”

And as he noted it will also reduce “India’s reliance on carbon-intensive sources, that will benefit the environment, and will offer India greater energy security for its large and growing economy.” And that makes it a big deal.

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US Places Food Products Made by India’s Laljee Godhoo & Co. on Import Alert List

Feb 6, 2016 0

BOSTON—U.S. Food and Drug Administration has banned food products made by Mumbai-based Laljee Godhoo & Co. On Feb. 1, FDA added food products from Laljee on the FDA website’s import alert list.

FDA logoImport alert means detention without physical examination of food products due to the presence of Salmonella, according to the agency’s website. This alert provides for manufacturers and shippers, from multiple countries, to be placed on detention without physical examination for food products found to contain Salmonella. Food products from other countries are also put on import alert.

FDA said that its Northeast Regional Laboratory found a sample of dried fruit, namely dried lychee from the Peoples Republic of China, to contain Salmonella. In the past, other imported food such as spices, chocolate candy, sesame products, including halawa and tahini, and food products containing dried egg or nonfat dry milk, such as pasta and egg noodles, have also been found to be contaminated with Salmonella.

The food products on the import alert list from Laljee Godhoo & Co. include LG Hing powder spice, and its use in other bakery products, macaroni/noodle, dried milk products, cheese prooducts, ice cream, egg products, meat and poultry, coffee, tea and dressing condiment, among others. For more information and complete listing, please visit FDA website.

The FDA, an agency within the U.S. Department of Health and Human Services, protects the public health by assuring the safety, effectiveness, and security of human and veterinary drugs, vaccines and other biological products for human use, and medical devices. The agency also is responsible for the safety and security of food supply, cosmetics, dietary supplements, products that give off electronic radiation, and for regulating tobacco products.

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IT Minister Prasad: Take advantage of Digital India initiative

Feb 6, 2016 0

By Wire Services

CAMBRIDGE, MA– India’s future as a technology powerhouse and its plans to connect India’s 600,000 villages to the Internet through the Digital India programme were the focus of a roundtable of top American and Indian companies.

Prime Minister Narendra Modi’s Startup India initiative also came up at the roundtable with Indian Minister for Communications & IT Ravi Shankar Prasad hosted by the US-India Business Council (USIBC) at Cambridge, Massachusetts, on Friday.

The roundtable was attended by USIBC President Mukesh Aghi and senior executives of American and Indian companies that included Google, AT&T, MasterCard, Facebook, American Tower Corporation, UST Global and iTech.

USIBC comprises 350 top-tier US and Indian companies advancing US-India commercial ties.

“Digital India provides an enormous investment opportunity for both global technology companies and startups from tech hubs like Boston and Silicon Valley,” Prasad said.

“India is sitting on the cusp of a digital revolution,” he said. “Whether it is big metropolitan cities or small towns, a well-connected India has the potential to not only usher in economic and welfare opportunities for its citizens, but also the global economic order.”

The Indian “government is taking every policy decision in a transparent, predictable and reasonable manner,” Prasad said encouraging “American businesses to take advantage of the Digital India programme, and the growth opportunities in India.”

Prasad also outlined the progress that has already been made to implement Digital India programme and his priorities for the future.

Aghi said, “Prime Minister Modi’s directive to connect Indians across the country is a tremendous opportunity for both Indian and US companies alike.”

Noting that 85 percent of Indians still do not have access to the Internet, he said “the government could make it easier to obtain clearances to install cell phone towers.”

“IT infrastructure can be further expanded by lifting the ban on foreign satellite operators so they can provide spectrum in hard-to-reach areas.”

Dan Gupta of UST Global commented on the economic growth that can be spurred by the Digital India initiative and adoption of key technologies across sectors.

“By some estimations, the Digital India initiative could help boost India’s gross domestic product (GDP) by around $550 billion – upping its GDP by $1 trillion by 2025,” he said.

Sonny Khurana, CEO of iTech, praised the rapid strides in connectivity and the startup ecosystem under the current government.

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