Archive for ‘India alert’

28/10/2014

Banyan: The enablers | The Economist

NOT since Indira Gandhi has a prime minister of India been as dominant as Narendra Modi. His clout comes from the big electoral victory in May of his Bharatiya Janata Party (BJP) after a remarkably personalised campaign; from a hyperactive prime minister’s office that makes Mr Modi look presidential; and from an opposition Congress party in tatters. But even the mightiest cannot rule alone, and Mr Modi relies on two old allies, both crucial. One, Amit Shah, engineers the electoral victories that give Mr Modi his authority. The other, Arun Jaitley, must take that authority and out of it craft policies and decisions that will launch the economic recovery which Mr Modi has promised and by which he will be judged. These two men are Mr Modi’s enablers.

Now the BJP’s president, Mr Shah is a master of the dark political arts—indeed, his hooded eyes give him the air of a pantomime villain. He has served Mr Modi for nearly three decades. The pair collaborated in the state of Gujarat, where Mr Modi won three elections and ruled for a dozen years. Mr Shah had charge of ten state ministries, including home affairs.

Long an outsider in the urbane circles of Delhi’s national-level politics, Mr Shah is uncomfortable in English and rarely gives interviews. When he makes an exception, as he did after state-assembly elections this month in which the BJP seized control of Maharashtra and Haryana, he mostly uses the time to extol his boss. Of himself, he says merely: “Sometimes you get more credit than you deserve.” Mr Shah is too modest. He ran both state campaigns, just as he crafted the BJP general-election success in India’s most populous state, Uttar Pradesh (UP). That victory was at the heart of Mr Modi’s national triumph in May.

Mr Modi stirs voters, but the alchemy of Mr Shah, who turned 50 this week, is to convert popularity into power. In UP the BJP’s share of the vote was 42%, compared with Congress’s 7.5%. That translated into 71 out of 80 of the national seats from the vast state, a golden return. Imbalances between vote share and seats are normal in first-past-the-post electoral systems, but achieving victory in India takes more skill and stamina than elsewhere. Mr Shah makes minute analyses of millions-strong constituencies, imposing candidates and recruiting volunteers early, often from the Hindu-nationalist RSS organisation, where he and Mr Modi were once leaders. He tailors messages according to the audience. He has, variously, presented Mr Modi as a bringer of good economic times, a Hindu strongman and a figure of humble caste. Mr Shah has turned Hindus against Muslims (notoriously, he told Hindu Jats in UP to take electoral “revenge” following communal riots in late 2013). But he has also taken advantage of Shia Muslim antipathy towards Sunnis (in Lucknow, UP’s capital). Mr Modi’s campaigning certainly helps. He led 38 rallies in the recent state elections. Congress’s Rahul Gandhi showed up for only ten.

via Banyan: The enablers | The Economist.

28/10/2014

Softbank invests $840M in India tech companies – Businessweek

Japanese telecommunications company Softbank Corp. is investing nearly $840 million in two technology companies in India, eyeing what it sees as a lucrative market for growth.
Embed from Getty Images

Softbank said Tuesday it is investing $627 million and becoming the biggest shareholder in Snapdeal, the largest digital marketplace in India with 25 million users and 50,000 businesses. It brings together products from thousands of big and small brands.

The Tokyo-based company, which recently acquired Sprint in the U.S., is also investing $210 million in Ola Cabs, which runs the technology to connect consumers with cab drivers in India.

Softbank executives said they were banking on India because it has a large number of Internet users, the online market is not yet saturated and connection speeds are likely to get faster.

via Softbank invests $840M in India tech companies – Businessweek.

28/10/2014

Britain’s PM David Cameron Unveils Encyclopedia of Hinduism – India Real Time – WSJ

British Prime Minister David Cameron held a Diwali party in London to launch the new Encyclopedia of Hinduism, as his Conservative Party attempts to strengthen relations with the country’s large Indian community ahead of national elections next year.

The encyclopedia, which took 25 years to compile, contains 11 volumes and is published by the India Heritage Research Foundation, a nonprofit founded by Pujya Swami Chidanand Saraswati, head of the largest ashram in Rishikesh, a town in northern India.

More than 1,000 guests attended the unveiling of book in Westminster, near the Houses of Parliament. The event was organized by the United Kingdom’s ruling Conservative Party and the Conservative Party Friends of India among others.

Mr. Cameron and his wife Samantha lit a diya, or lamp, at the Diwali party that coincided with the book launch.

Andrew Feldman, chairman of the Conservative Party, said that the book, a product of research by 1,000 scholars, was a “phenomenal achievement.”

“The party wants to deepen and broaden our links with the British Indian community and with India and this event is one important step on our journey,” Lord Feldman said, according to a statement released after the event.

via Britain’s PM David Cameron Unveils Encyclopedia of Hinduism – India Real Time – WSJ.

28/10/2014

Talks gather pace on sale of Indian patrol vessels to Vietnam | Reuters

Talks are gathering pace on the sale of Indian naval patrol vessels to Vietnam, an Indian official said, the first significant military transfer to Hanoi as it improves its defences in the South China Sea where it is embroiled in a territorial dispute with China.

Vietnam's Prime Minister Nguyen Tan Dung (C) shakes hands with his Indian counterpart Narendra Modi (R) as Dung's wife Tran Thanh Kien looks on during Dung's ceremonial reception at the forecourt of Rashtrapati Bhavan in New Delhi October 28, 2014.  REUTERS/Adnan Abidi

The four patrol ships will be provided to Vietnam under a $100 million defence credit line and represent a push by the nationalist government in New Delhi to counter Beijing’s influence in South Asia by deepening ties with old ally Vietnam.

Vietnamese Prime Minister Nguyen Tan Dung held talks with counterpart Narendra Modi on Tuesday, the first meeting since the Indian leader took office in May, promising to turn the country into an economic and military power.

An Indian government official said negotiations for the patrol craft had gathered pace since the credit line was announced last month during the visit of India’s president to Vietnam.

“We expect to see progress on this fairly early as negotiations are continuing between the Vietnamese and our defence suppliers,” the government official involved in discussions said.

Vietnam wants the craft for surveillance off its coast and around its military bases in the Spratly island chain in the South China Sea where it is building a credible naval deterrent to China with Kilo-class submarines from Russia.

Claims by an increasingly assertive China over most of the energy-rich sea have set it directly against U.S. allies Vietnam and the Philippines. Brunei, Taiwan and Malaysia also claim parts of the waters.

Beijing’s placement of an oil rig in disputed waters earlier this year infuriated Vietnam but the coastguard vessels it dispatched to the platform were each time chased off by larger Chinese boats.

Since then, the two sides have sought to repair ties and on Monday, top officials agreed to use an existing border dispute mechanism to find a solution to the territorial dispute.

Dung said Vietnamese defence cooperation with India was the pillar of their strategic partnership.

via Talks gather pace on sale of Indian patrol vessels to Vietnam | Reuters.

26/10/2014

Wal-Mart Struggles to Crack Retail Market in India – Businessweek

As Indians celebrate the Hindu festival of Diwali, executives at Wal-Mart India don’t have much reason to cheer. The company is still waiting for its big breakthrough in India, a market it has been trying to crack at least since 2007. That’s when the American retailer teamed up with one of the top businessmen in the country, Sunil Mittal, to open wholesale stores in India. If all had gone well, that partnership with Bharti Enterprises was supposed to have led to consumer-facing stores, too.

A Wal-Mart store on the outskirts of Chandigarh, Punjab, India, on June 10

When then-Prime Minister Manmohan Singh in 2012 eased restrictions on foreign ownership in retail, Wal-Mart Stores (WMT) executives saw an opportunity in the world’s second-largest country. In September 2012, a Wal-Mart executive told Bloomberg News the two sides were in talks and retail stores were less than two years away.

Those discussions didn’t end well. Wal-Mart and Bharti Enterprises went their separate ways last year, dissolving the joint venture in October 2013. Wal-Mart bought out Bharti and took full control of the 20 members-only, cash-and-carry stores in India. After that, the company largely kept its India plans on hold: It’s been two years since Wal-Mart added new wholesale stores in India.

via Wal-Mart Struggles to Crack Retail Market in India – Businessweek.

22/10/2014

Google’s Big Plans for Low-Cost Android One Phones in India – Businessweek

With the Indian smartphone market booming, Xiaomi has made a splash with its weekly flash sales on Flipkart, an Indian rival to Amazon.com (AMZN). When the Chinese smartphone brand conducted another of its sales on Tuesday, over 300,000 people registered to buy some 90,000 of its Redmi 1S phones priced at 5,999 rupees (or $98). In last week’s sale, the Xiaomi phones sold out in four seconds.

The Spice Android One Dream Uno smartphone

Xiaomi isn’t the only foreign company looking to take advantage of consumer demand for inexpensive alternatives to the iPhone (AAPL). The company with perhaps the most ambitious plan is Google (GOOG), which last month made India the first market for its new Android One smartphone operating system. Google teamed up with local brands Micromax, Karbonn, and Spice, all of which have recently introduced smartphones priced around 6,000 rupees.

India particularly needs better low-cost phones, argues Caesar Sengupta, Google’s vice president of product development in Singapore and head of the Android One project. India’s mobile operators don’t offer the sort of generous subsidies that consumers in the U.S. and other markets take for granted. ”In the U.S., when you buy an iPhone, it costs $600 to $700 but you get a subsidy, so to a consumer it feels you are buying a $200 phone,” Sengupta says. In India, the cost to the consumer is much closer to the actual cost of the hardware.

via Google’s Big Plans for Low-Cost Android One Phones in India – Businessweek.

22/10/2014

India’s Modi Ends Fuel Subsidies, Showing He Is a Reformer – Businessweek

Narendra Modi has proven once again how important it is to be lucky in politics. In the spring, he was India’s opposition leader, running for prime minister by focusing on the government’s mismanagement of the economy. He had plenty of ammunition: The coalition led by the Congress Party had presided over years of corruption scandals and stalled reforms—and also had to contend with a growing budget deficit fueled by soaring prices for oil and other imported commodities.

In India, Falling Oil Prices Make Modi's Job Much Easier

During the campaign, Modi said he wanted to cut back on the costly subsidies the government offered millions of Indians to cushion the blow of those soaring prices. Petroleum subsidies account for one-quarter of India’s 2.6 trillion rupee ($42.4 billion) subsidies bill. But after he won in a landslide, Modi’s first budget (which his finance minister announced in July), was a modest plan that left the subsidies untouched.

That left observers unsure as to whether Modi was backing away from the politically difficult task of making the cuts. “We can either trust that the government will deliver price hikes as the year progresses,” Mirza Baig, head of foreign exchange and interest rate strategy at BNP Paribas in Singapore, wrote in a report after the budget announcement in July. “Or we can be more cynical and suggest that the Modi administration intends to continue the practice of rolling forward subsidy expenditure to next year.”

via India’s Modi Ends Fuel Subsidies, Showing He Is a Reformer – Businessweek.

22/10/2014

Diesel Deregulation Frees Up Billions for India to Spend More Wisely – India Real Time – WSJ

India’s decision to end government control of diesel fuel prices will save the government billions of dollars which can be better spent on more pressing needs such as building schools, roads and ports, analysts say.

India announced over the weekend that it would end a decades-old policy of controlling the retail price of diesel fuel. Providing diesel at below-market rates cost the government about $10 billion last year, hampering India’s ability to spend on other things.

The government had given up control over the prices of gasoline back in 2010 but had continued to regulate prices of diesel – the primary fuel used in trucks and tractors as well as for running generators used to power irrigation pumps.

“It shields the government’s finances from volatility in global oil prices, because of which the subsidy bill often went up,” said Radhika Rao, an economist at DBS Bank.

HSBC estimates that the diesel deregulation will drop fuel subsidy bill to around 0.4% of gross domestic product, half of the 0.8% of GDP it paid last year.

“Our estimate is that over the next few years, fuel subsidies should remain contained,” said Prithviraj Srinivas, an economist at HSBC.

Diesel subsidies cost India close to $50 billion over the last five years, economists say. If India sticks to its guns and lets fuel prices meander with global markets, it will no longer have to foot that kind of unproductive expense. Instead, it can now choose to lower its fiscal deficit or spend more on infrastructure development or social development programs.

Analysts say the government’s fiscal deficit target of 4.1% of GDP this fiscal year – a level that many analysts had thought optimistic – now looks within reach.

via Diesel Deregulation Frees Up Billions for India to Spend More Wisely – India Real Time – WSJ.

21/10/2014

Schindler Raises Profit Forecast as China, India Grow Faster – Businessweek

Schindler Holding AG (SCHP) raised its full-year profit forecast after the Swiss elevator maker’s nine-month earnings were boosted by rapidly expanding sales in China and India.

Schindler increased its net profit forecast by 15 million francs ($16 million) to as much as 865 million francs, supported also by the consolidation of Chinese subsidiary XJ-Schindler and the sale of land in Switzerland. Ebikon-based Schindler stuck to a prediction of 6 percent to 8 percent sales growth in local currencies.

Silvio Napoli, who became chief executive officer in January after almost six years as head of Schindler’s Asia-Pacific business, was promoted as the Swiss company expands operations in Chinese and Indian markets, where it predicts sales of elevators will grow fastest over the next decades. Schindler is far exceeding market growth in each of these countries, the company said today.

Nine-month net income gained 91 percent to 703 million francs, while sales rose 3.2 percent to 6.7 billion francs.

Earnings at Schindler, a company with a market capitalization of $15 billion, bucked a more subdued outlook among European industrials. Royal Philips NV Chief Executive Officer Frans Van Houten said yesterday that the maker of health-care equipment and light bulbs is facing sustained softness in a number of markets such as China and Russia, after reporting quarterly earnings that missed estimates.

The Schindler and Bonnard families, along with related parties, hold 67.3 percent of the voting rights in the company which dates back to 1874.

via Schindler Raises Profit Forecast as China, India Grow Faster – Businessweek.

21/10/2014

India Steps Closer to Ending 40-Year-Old Monopoly on Coal – Businessweek

India stepped closer to ending a four-decade-old government monopoly on mining and selling coal as Prime Minister Narendra Modi seeks to tackle fuel shortages.

India Coal Mine

The government approved a decree enabling it to permit commercial mining in future, Finance Minister Arun Jaitley said at a briefing in New Delhi yesterday, without giving a timeline. The ordinance also allows auctions of coal mines to private companies for their own use, he said.

Modi made curbing blackouts a priority after sweeping to office in May on a pledge to revive growth in Asia’s third-largest economy from near the slowest pace in a decade. State-owned Coal India Ltd. (COAL) has missed output targets in at least the past four years, and easing its grip may allow companies such as Sesa Sterlite Ltd. (SSTL) and NMDC Ltd. (NMDC) to profit from the world’s fifth-biggest reserves.

Enabling private companies to mine and sell coal would be “one of the key game-changing reforms,” said Sonal Varma, an economist at Nomura Holdings Inc. in Mumbai. “Fuel availability has been a big concern for the economy.”

Opening up the coal industry risks stoking protests by some of Coal India’s about 325,000 workers and executives, at the same time as the government prepares to sell a 10 percent stake in the company that would fetch about 228 billion rupees ($3.7 billion).

Coal India accounts for more than 80 percent of the country’s production. The government wants to spur competition in the industry, Jaitley told the NDTV 24×7 television channel today.

via India Steps Closer to Ending 40-Year-Old Monopoly on Coal – Businessweek.

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