China surely knows how to make its presence felt in Indian markets, and Diwali is no exception. Cashing in on Indians’ attraction to anything that is cheap, Chinese products as Diwali gifts have seen a surge in demand by 45%, according to a survey undertaken by the Associated Chamber of Commerce and Industry (ASSOCHAM). Consumers are making a beeline to buy Chinese fancy lights, lampshades, Ganesha and Laxmi idols, crackers and other such various items. Seventy-eight per cent of those surveyed said Chinese lights are almost 50% cheaper as compared with Indian lights and have more variety to offer.
As a result, the worst-hit are local artisans and traders. According to DS Rawat, secretary general, ASSOCHAM, about 72% traders said demand for earthen diyas has been dipping year after year as consumers prefer Chinese-made fancy lights. “A Chinese string of 100 tiny bulbs can be bought in the range of Rs40-60. Lights in the shape of pineapples, pomegranates, rice and net stars among others are seen to be popular among buyers,” rued traders. Riding on the same features of variety and affordability, Chinese crackers are also finding more and more takers this Deepavali season. About 82% of wholesalers said Chinese crackers are more colourful, produce more sound and have a lot of variety and they are cheap too and score over their Indian counterparts.
However, Rawat pointed out that these products are entering the domestic market illegally, through Nepal. “Indian traders lose about Rs1,800 crore. Chinese fireworks worth around Rs250 crore are circulating in the Indian market and volume could increase if necessary steps are not taken,” he said. The Indian fireworks industry employs about 2.5 lakh people.
Hyundai Motor India Limited, a wholly owned subsidiary of South Korean carmaker, Hyundai Motor Company announced an fresh investment of $300 million (Rs 1600 crore) for a new engine plant and a press shop at its existing location at Sriperumbudur in Chennai. Hyundai Motor’s India already has two car plants with a total capacity to produce around 630,000 units per annum. The company is all set to sign a memorandum of understanding (MoU) with the Tamil Nadu government on November 5 and share details plans of the future projects for the Indian market, it said in a statement.
Hyundai Motor India MD Bo Shin Seo said “The investment will help us meet the growing demand of diesel vehicles in India and reduce the waiting period on our popular models.” The company said the new investment would create direct employment opportunity for 500 persons and help Hyundai to offer its customers more diesel options across segments.
The company had been eyeing several locations for a new facility to make diesel engines for the domestic market and recently decided to stay put at the current factory. It may go for at least 3-lakh diesel engines capacity for the Indian market, which are expected to come in its popular hatchback and sedans like i20 and the Verna.
The “muhurat” trading session will be conducted for 75 minutes on the Diwali day, November 13, on leading bourses NSE and BSE. The special trading session would be conducted to pay obeisance to Lakshmi, the Hindu goddess of wealth and prosperity. It would also mark the New Year for traders as per the Hindu calendar, or Samwat 2069.
The tradition of muhurat trading dates back over a century. Trading would be conducted between 1545 hrs and 1700 hrs on the day, as per information available with the exchanges. Earlier, the exchanges had announced that muhurat trading session would be for 45-minutes. The tradings would be done in segments like capital market, future and options and stock lending and borrowing (SLB). Last year, bourses had held the trade between 1645 hrs and 1800 hrs.
India is set to cross a major hump in its nuclear power programme with the Kudankulam plant expected to begin generating power within a month after it goes critical in the next 10 days, marking an end to prolonged delays due to local protests and anti-nuclear activism. The first unit of the Russian-built nuclear plant is close to a landmark moment after post-Fukushima public unease over atomic power and a powerful alliance of church groups and activists threatened to thwart India’s ambitious plans to build 20 plants in the 12th Plan.
With Tamil Nadu CM J Jayalalithaa backing the project that will ease the state’s power deficit and having faced a Supreme Court scrutiny of the $3 billion plant’s safety features, the government is anticipating a Kodak moment when turbines begin to turn at Kudankulam. Successful commissioning of the Kudankulam unit will help translate the promise of power into tangible benefits that the government hopes will help sway public opinion, particularly in the plant’s neighbourhood. It will also pave the way for faster work on nuclear plants planned at Maharashtra’s Jaitapur and Haryana’s Fatehabad.
India hopes to generate 63,000 MW through nuclear power by 2032 with Prime Minister Manmohan Singh giving a big fillip to the atomic component in electricity generation in the wake of the Indo-US nuclear deal and lifting of trade sanctions by the Nuclear Suppliers Group in 2008. Apprehensions of the plant’s environmental impact among local fishing communities will need to be further assuaged but the plant is inching towards completion after activists, opposed to nuclear energy in totality, held the project hostage for months. Official sources said protests delayed operations by around six months but criticality is likely in around 10 days as reviews are almost complete.
The reactor will now be closed and pressure tests conducted. Loading of enriched uranium fuel was completed earlier in the month and once criticality is achieved, the controlled fission will begin heating water to produce the steam that will drive the turbines. The project has cleared several hurdles after the initial agreement was signed in 1988 with the blockade of the plant after the March, 2011, Fukishima disaster in the wake of the Japanese tsunami being the most serious.
Paradoxically, the Fukushima events also convinced several nuclear skeptics about the reliability of nuclear plants as there was no large radio-active leakage despite primary and back-up power being knocked out.
India and the United Kingdom (UK) have made amendments to the convention on avoidance of double taxation, by signing a protocol. The pact will streamline the provisions on partnerships and dividends, besides enhancing the information flow between tax authorities of the two countries. The pact was signed by Mr Jaimini Bhagwati, High Commissioner of India to the UK, and Mr David Gauke, Exchequer Secretary to the Treasury. The pact relates to the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income and capital gains.
Firms partnering with UK would benefit from the amendment. Further, the withholding taxes on the dividends would be 10 per cent or 15 per cent and would be equally applicable in the UK and India. Post the amendment, the convention will provide tax stability to the residents of India and the UK and will facilitate economic cooperation between the two nations. It will also encourage the flow of investment, technology and services.
The pact incorporates the provisions for effective exchange of information between the tax authorities of the two countries in line with latest international standards, including exchange of banking information and supplying of information irrespective of domestic interest. It also provides for sharing of information to other agencies with the consent of the supplying state. The pact further includes the anti-abuse (limitation of benefits) provisions to ensure that the benefits of the convention are not misused.
Further, both the countries would enter into memorandums of understanding (MoUs) to expedite exchange of information and assistance in collection of taxes.
The Australian Council for Private Education and Training (ACPET) signed a Memorandum of Understanding (MoU) with the National Skill Development Corporation (NSDC) in New Delhi today to meet India’s skilling needs across 21 industries. The MoU, signed by ACPET CEO Claire Field and NSDC CEO & MD Dilip Chenoy, includes a commitment to foster partnerships between Australian and Indian education and training providers, as well as exchanging information and perspectives on education, training and skills development. The partnership also aims at working towards skilling 500 million people in India by 2022.
“The National Skill Development Corporation is confident that the MoU between the NSDC and the Australian Council for Private Education and Training would strengthen the growing partnership between Australia and India in the skills training arena,” said NSDC CEO and MD Dilip Chenoy in a statement. ACPET CEO Claire Field added: “ACPET members have had a long and mutually beneficial relationship with India, with more than 90% of Indian students choosing to enroll with a private institution in Australia. Today’s agreement focuses on supporting ACPET members to work with NSDC partners in meeting India’s skill needs.”
The promoters of the brand new FIA Formula E series, in which the cars will be powered by electric energy, are targeting India as a destination for a race in their inaugural series in 2014. India is being viewed differently by the motorsport world after it successfully hosted Formula One Grand Prix last year. Within the next six months, the World Superbike championship will make its debut in India and talks were also on to bring the GT1 series as well. FIA President Jean Todt has signed an agreement with a group of investors — Formula E Holdings Ltd (FEH)– to stage the Formula E series, which will have 10 teams and 20 drivers. Alejandro Agag, the CEO of Formula E, said they want India to be part of the series.
“We would like to have a race in India, but we are open about the city. We will see what the best options are and then decide,” Agag said in an interview. “Formula E are certainly focussing on emerging markets to develop the championship. Establishing a base in India would reflect that strategy. We might look for a local partner in India to work with us to set up the race,” Agag, who already supports teams in the GP2 and GP3 series, said. The organisers have not yet decided on the city although initially Mumbai was mentioned as one of the venues.
JPSI, the owners of Buddh International Circuit (BIC) — the venue of the F1 Indian Grand Prix, said they are open to the idea of hosting such a race. “We have that in mind but nothing has happened officially on that front. If we are approached, we can discuss the idea with them,” Askari Zaidi, Head, Corporate Communications, JPSI said. Explaining the rationale behind launching such a series, Agag said it was a future-centric championship, keeping in mind the environmental needs. “The global demand for electric vehicles is growing all the time and we are reflecting that in the sport. This is history in the making and a chance to inspire future generations to curb carbon emissions.
“The automotive industry is currently going through a process of significant transformation that will become increasingly visible. In this transformation, the electric car will play a key role as the most practical way to achieve the goal of more efficient and environmentally friendly vehicles,” he said. The Electric Prix will be different from F1 races. The first feature is that it will happen in one day. Second, pole position will be the result of playoffs, with cars racing one against another, in a format similar to tennis or the Champions League. Third, in the pit-stop, the driver will not change tyres or batteries, they will change car.
A Formula E car based on the French company Formulec’s F 01 prototype, still in development, will be made available to teams should they choose to use it. “Teams can choose to have their own cars, provided they are FIA homologated. Therefore the championship is open to any constructor wishing to build a Formula E car,” Agag said. The races will last about an hour in total and each driver will have two cars. The cars will have a charge lasting around 25 minutes, so there will be a change whilst the first car is re-charged and then another change to the original car for the last part of the race. Formula E cars will be single seaters, able to reach speeds of over 200km per hour.
Soon after the news spread about the new series, 2005 and 2006 F1 world champion Fernando Alonso came up a with a negative remark, saying that this series actually is a step backward. However, Agag said they do not want a comparison with F1. “Fernando Alonso is a great driver, and we respect his opinion. But we don’t compare ourselves to F1. We are not the electric F1, as Luca Montezzemolo said recently, we are Formula E, which is a completely different concept.
“We think F1 is great, and I myself have been part of that world, through my GP2 Team (feeder series to F1) for many years. You cannot compare Skiing and Snowboard. I can guarantee you something, we will be the fastest and most exciting Electric Car Championship in the world,” he concluded.
After opening 100 stores over the past four years under the ‘Mom & Me’ brand, Mahindra Retail, the low-profile retailing arm of $15.5-billion Mahindra Group, wants to go full steam. The company, which retails maternity and baby products under ‘Mom & Me’, wants to open 50 stores under that brand. It also plans to open 15 stores of its toy store, Beanstalk, over the next five and a half months, besides integrating e-commerce venture with physical stores and expanding its kidswear category by signing agreements with global brands. The company has recently set up ‘Destination Maternity’ store as a master franchisee of the latter, which is based in the US.
Besides, the company will also consider setting up franchisee stores in the Middle East and Africa, for which it has got requests, said managing director K Venkataraman. Also on the cards are integrating online and physical formats, as part of its ‘hub and spoke model’. This model envisages larger stores of 3,000 to 4,000 sq. ft in cities and smaller stores on the peripheries. The idea is to increase customer comfort and to save on real estate costs. “You can either click at home and collect products at the store after seeing it yourself or click at the store and get the products delivered at home,” said Venkataraman. The e-commerce sites will also help stores that are smaller in size, say around 2,500 sq ft, which do not have the full range, he added.
When asked about the potential of e-commerce venture, Venkataraman said: “There is a certain potential of e-commerce venture. We are developing the market first.” Consultants such as Devangshu Dutta, chief executive of Third Eyesight, believe that integrating both channels augurs well for the business. “An offline retailer, who has built that relationship with customer, has better chance in online venture. You can encourage customers to cross shop across channels,” said Dutta. The company is also looking to expand its stores via the franchisee model. Currently, the chain has two franchisees out of 100 stores, said Venkataraman. “Cities such as Mumbai and Delhi can take 40 to 50 stores each, but due to expensive real estate costs, we need to go slowly,” he said. Mahindra Retail has 25 stores in Bangalore.
“Out of 700 cities, top 100 are important for us but we have not decided how many stores we will open in the next three years,” Venkataraman added. The company, which has got Rs 300 crore from its parent company Mahindra Group till now, is looking at revenues of Rs 200 crore for this financial year. Although Venkataraman declined to comment on whether the company has broken even, he said retail is a long gestation business.
Expansion in Kidswear
Mahindra Retail is looking at concluding licensing pacts with UK apparel brands in kidswear in the next couple of months. The company is also adding brands such as Benetton and Jiny & Jony to expand its kidswear segment. It already has exclusive agreement with US-based Disney and Fisher Price of Mattel. “Till July last year, we had only private lables, but we realised that older kids need more products and brands. We would like to add more brands,” said Venkataraman.
Third Eyesight’s Dutta believes that there is enough headroom, given that there are not many brands in the mother an infant segment and consumers want more choice. Although a number of both online and offline stores selling maternity and baby products have come up, Venkataraman says there is still a huge demand for such products. “In every city, there are not enough stores catering to this segment. We are trying to create a market for products catering to mother and infant, while the demand is huge,” he said.
According to Venkataraman, the segment is recession proof because people spend disproportionate share of money on child irrespective of income levels. “Knowledge and education is required to promote such products. We are trying that with our website and customer initiatives,” he said.
Vikram Pandit’s rather sudden stepping down as the Citibank chief may have taken the corporate world by surprise, but the number of Indians in the world’s C-Suite cupboard is far from being bare. There are a still a large number of Indians in C-Suite positions – a widely-used term used to collectively describe a company’s most important senior executives. C-Suite gets its name because top senior executives’ titles tend to start with the letter C, for chief, as in chief executive officer, chief operating officer and chief information officer.
According to Egon Zehnder, one of the world’s largest privately held executive search firms, the BRIC (Brazil, Russia, India, and China) economies are increasingly being targeted for directorships in European countries, although there are additional hurdles in recruiting executives from these countries: it is not easy to identify prospective directors who have both the quality of relevant experience and can devote the time that serving on a board requires. Egon Zehnder found that there were more Indian CEOs in S&P 500 companies than those from any other country, excepting USA
The recent prostate cancer diagnosis of Warren Buffett, chairman and CEO of Berkshire Hathaway, more famous as investment guru and the world’s third richest man, has once again fuelled speculation of his succession, with India-born Ajit Jain seen as front-runner for the position. Jain heads the $1,43.7 billion (Rs 747,240 crore) investment conglomerate’s reinsurance division – a vertical that he has helped develop from scratch. Experts said that with an educated and hard-working workforce, and an entrepreneurial spirit, India is an exciting and thriving place to do business. This is driving the talent pool for global giants to tap into for driving their businesses.
“In our research together with Bharat Petroleum, we found that there are four specific competencies common to the most outstanding Indian leaders – socially responsible business acumen, team leadership, inner strength and the ability to manage a complex web of external stakeholders,” said Gaurav Lahiri, Managing Director, Hay Group India. Both India’s private and public sectors constantly deal with a complex web of external stakeholders, so the ability to effectively manage outside relationships is crucial to success in Indian business and is a key strength of Indian leaders.
“India teaches to survive the low purchasing power and high volume economics which turns out to be a very useful tool box while operating larger roles globally,” said Manish Sabharwal, Chairman, TeamLease. “Indians are good at handling uncertainties and public policies which are absolute requirement for doing business anywhere in the world,” Sabharwal added. Experts, however, sounded a caveat. All those who have broken through the glass ceiling has got to do with merit and individual competence. Emerging countries, such as India and China, however, ingrains the ability to adjust new markets and culture. “Though Ajit Jain has relatively little experience of big-ticket acquisitions, his discipline and ability to take risks without looking foolish has earned him an enviable reputation,” said a Mumbai-based analyst who did not wish to be identified.
“Coming into play primarily when dealing with the government and the media, Indian leaders turn to their skills in networking and stakeholder influence to protect the enterprise from the time-consuming concerns of stakeholder groups,” said Lahiri.
Ahead of Russian President Valdimir Putin’s visit next month, Moscow declared that it would not sell arms to Pakistan. “We are always cooperating with India to ensure safety of the region. We never created trouble for India in the region as compared to other countries. If someone says otherwise, spit in his face,” Russian Deputy Prime Minister Dmitry Rogozin replied on being asked whether Russia was planning to sell arms to Pakistan. “We don’t do military business with your enemies. We don’t transfer any arms to them,” he told journalists after arriving here to co-chair the India-Russia Inter-governmental Commission on Trade, Economic, Scientific, Technological and Cultural Cooperation (IRIGC-TEC) with External Affairs Minister S.M. Krishna in the run-up to Mr. Putin’s first visit to south Asia in his third term as Russian President.
Mr. Rogozin was clearing the air on several high-level engagements with Pakistan in recent times, which has led to talk about a reset in Russia-Pakistan ties. While Mr. Putin cancelled his Islamabad visit last month, his Foreign Minister Sergei Lavrov held consultations with the Pakistani leadership. Around the same time, Pakistan Army chief Gen. Ashfaq Parvez Kayani visited Moscow. Russian Defence Minister Anatoly Serdyukov, who was here a few days ago to hold talks with his Indian counterpart, A.K. Antony, on putting defence trade into a higher trajectory, besides sealing some pending deals, also became part of the story when he cancelled his visit when Gen. Kayani was in Moscow. Indian officials hotly denied that Mr. Serdyukov had postponed his India visit to be at hand to meet Mr. Kayani in Moscow but they gave no reasons for the Russian Defence Minister putting back his engagements in India by a week.
Mr. Rogozin, in-charge of Russia’s recently announced defence research organisation, will be taking up issues unresolved since his July visit — chiefly nuclear liability and investment by telecom company Sistema — besides touching on future areas of cooperation in the defence sector that were discussed by Mr. Serdyukov.
Mr. Rogozin indicated that tough negotiations lay ahead on the next two reactors at Kudankulam. Russia does not want the civil nuclear liability law to apply to the proposed units 3 and 4. India has not applied the law to units 1 and 2 (being challenged in the Supreme Court) because they were constructed under an agreement that predated the 2010 civil liability law. But it is against exempting units 3 and 4 because this will be seen as discriminating against companies from the U.S. and France. While warning that the reactors would become more expensive if they were brought under the liability law, Mr. Rogozin also addressed safety issues about units 1 and 2. Post-Fukushima, protests delayed their operationalisation and even Sri Lanka was concerned enough to begin talks with India on a civil nuclear agreement whose important components will be nuclear safety and response to nuclear accidents.
On this, Mr. Rogozin said Russia had imbibed the lessons of the Chernobyl accident and had since then worked to make the safety aspect on a par with world standards. “As for the nuclear project under construction in India, it will be the most reliable in the world,” he said. At the same time, he was not dismissive of the safety fears expressed by locals around the Kudankulam plant but felt “our emotions should not stop the project and stop progress in cooperation.”
The two sides will also be discussing some joint projects, none of which has taken off. These include Indian interest in Russian gas fields and Moscow’s bid to enter the steel segment. But officials have noted the signing of the mega gas deal contract between Gas Authority of India Limited and Gazprom despite attempts to derail the deal, which led to a three-year delay in supplies to begin.