Posts tagged ‘India’

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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.

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26/10/2014

Samsung’s China Smartphone Problems Come to India – Businessweek

And you thought iPhones were popular. At 2 p.m. on Oct. 14, Xiaomi put 100,000 of its Redmi 1S smartphones up for sale in India, using local e-commerce site Flipkart to sell them, unsubsidized, for 5,999 rupees ($98) apiece. Within four seconds the phones sold out. Such Flipkart flash sales have become weekly events since China’s Xiaomi entered India in July. “It’s the most important market for us after China,” says Hugo Barra, the Google (GOOG) alumnus now in charge of Xiaomi’s international expansion. Indians “are without a doubt the most demanding users that we have encountered.”

Xiaomi CEO Lei Jun

Consumers in India bought 44 million smartphones last year, close to 200 percent more than they did the year before. Four-year-old Xiaomi, which sells the most popular smartphones in China, has made 2014’s splashiest entrance into India’s phone market. Other companies have also sought to gain market share, especially in the peak holiday shopping season leading up to the nationwide Diwali festival on Oct. 23. Huawei (002502:CH) began selling its Honor Holly smartphone on Flipkart for $115 on Oct. 16. Motorola, which Lenovo (992:HK) has agreed to buy from Google, had 5 percent of the market in the second quarter, up from almost nothing a year ago, thanks to sales of its Moto G ($164 on Flipkart). Models from Chinese phone makers Gionee and Oppo start at $86 and $130, respectively.

via Samsung’s China Smartphone Problems Come to India – Businessweek.

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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.

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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.

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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.

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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.

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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.

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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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21/10/2014

India’s Narendra Modi to Star at Sydney’s Allphones Arena – India Real Time – WSJ

Since becoming prime minister, Narendra Modi has performed in New York’s storied Madison Square Garden  and played drums on stage in Japan.

His next big-ticket venue: Sydney’s Allphones Arena this November.

Mr. Modi will address what is expected to be a sell-out crowd at the 21,000-seat venue in Australia’s financial and commercial capital on Nov. 17 during his four-day trip to the country for the G20 summit in Brisbane.

Organizers say it will eclipse the prime minister’s biggest gig so far, when he spoke to a crowd of 18,000 people, mostly Indian-Americans, at Madison Square Garden on Sept. 28.

“This will be bigger and better,” said Balesh Singh Dhankhar one of the organizers of the reception for Mr. Modi. The Allphones Arena, built for the 2000 Olympics,  “has more grandeur” than Madison Square Garden, he added.

The stadium in Manhattan is famous for hosting some of the biggest names in entertainment, like the Beatles, Bruce Springsteen and “The Fight of the Century” between Muhammad Ali and Joe Frazier.

The Allphone Arena also hosts musical acts and boxing matches. In the same month as Mr. Modi’s visit, The Rolling Stones and Katy Perry will play the arena and an Ultimate Fighting Championship event will take place there.

Australia is home to around 350,000 people who were born in India, according to the latest census data from 2011. That was a 90% increase on the number recorded in the census in 2006, but a tenth the size of the Indian-American community in the United States.

After Mr. Modi’s speech in New York, people in Australia began asking when he would come here, said Mr. Dhankhar, a spokesman for the Indian Australian Community Foundation that is helping put on the event that was conceived only three weeks ago.

Some 14,000 people have registered in the first two and a half days of registration, according to the organizers. It will be broadcast live on Indian television channels.

“We invited Mr. Modi and said the Indian diaspora in Australia is very eager to see him,” Mr. Dhankhar added.

Tickets for the Sydney event are free and the show will start around 5.30p.m., but further details of the spectacle are under wraps right now, Mr. Dhankhar said. “There are a number of cultural and exciting events before the speech that would be a surprise for the audience in India and Australia. These will be wider and more surprising that at Madison Square Gardens.”

via India’s Narendra Modi to Star at Sydney’s Allphones Arena – India Real Time – WSJ.

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20/10/2014

Grocery retailing in India: A long way from the supermarket | The Economist

ON THE morning of Dussehra, a Hindu festival, Amar Singh is explaining why he stocks “exotic” produce, such as broccoli and iceberg lettuce, at his vegetable stall in Thane, a commuter city north of Mumbai. “I have to keep the customer in my grasp,” he says. Mr Singh has traded hereabouts for 20 years, and seems unperturbed by the supermarket chains whose branches have recently sprouted nearby. They are cheaper, he says, but they cannot match him on quality. As he speaks he sorts a tray of beans, discarding stringier ones. His assistant, Dabloo, has spent the early hours going through sacks of produce at a wholesale market to pick the best stuff.

The 10m-12m small traders like Mr Singh are a protected species. Complex and changeable rules governing foreign direct investment have made it tricky for rich-world chains to set up shop in India. They might count themselves lucky. India’s home-grown supermarkets account for only 2% of food and grocery sales and are struggling to make a profit. Revenues have not kept pace with rising rents. The Thane branch of Reliance Fresh, one of India’s big chains (see table), shut up shop recently. More closures seem likely. The bet made by the chains was that as India became richer, its consumers would abandon kerbside stalls and kiranas (small family-owned shops) for air-conditioned stores with wide aisles and broad ranges. Why has it not paid off?

In large part it is because supermarkets are not a compelling draw in terms of price and service. Most shoppers in India buy dairy products, vegetables and fruit either daily or every two to three days, and the traditional trade has a lock on these frequent purchases, according to research by the Boston Consulting Group (BCG). Its hold weakens a bit (and the appeal of supermarkets correspondingly tightens) on rich consumers and for less regular purchases: packaged foods; soaps, detergents and other groceries; and staples, such as rice and grains (see chart). But in general even affluent consumers prefer traditional stores, because they are closer to home, are usually open longer and offer credit to familiar customers. Many will deliver free of charge.

Traditional traders are also seen as cheaper. In fact, says Abheek Singhi of BCG, a full basket of goods is 3-4% cheaper at the supermarket, in part because it will sell a few vegetables and some staples as loss-leaders. Mr Singh’s stall sells tomatoes at 50 rupees a kilogram. In the local D-Mart, a low-frills supermarket, they sell for just 42 rupees. Yet Mr Singh has a fair claim to having the reddest variety. The chains ought to be able to offer keener prices on branded goods by squeezing their suppliers. But none of the supermarkets has enough muscle to push around Unilever or Procter & Gamble in negotiations. And India has a law that mandates a maximum retail price for packaged goods, which allows manufacturers a degree of control over retailers’ margins.

The supermarkets can offer a greater variety of groceries than the neighbourhood mom-and-pop store or stall-trader. But that is not as big a competitive edge as it may seem, says BCG’s Mr Singhi. Supermarkets compete with clusters of kiranas, which together can offer most of the same products. Next door to Mr Singh’s stall in Thane kiranas sell confectionary, fresh eggs and poultry.

via Grocery retailing in India: A long way from the supermarket | The Economist.

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