Mumbai/ Ahmedabad: Chinese TBEA Shenyang Transformers group today expressed its willingness to set up a high-voltage power transformers and solar energy equipment manufacturing facility near Vadodara.
A high-level Chinese delegation led by TBEA transformer industrial group chairman Zhang Xin and TBEA Shenyang transformer group chairman Ye Jun presented the papers to the state government with a desire to start the construction for the projects in September 2011 and commission the plant in a year by September 2012.
Narendra Modi, chief minister of Gujarat hinted at developing the Central Gujarat region as an energy equipment manufacturing hub in the country's power sector.
Success in my Habit
Tuesday, May 31, 2011
Renault launches its premium sedan Fluence at Rs 12.99 lakh
New Delhi: French carmaker Renault has re-entered the Indian market with the launch of its premium sedan Fluence at 12.99 lakh (ex-showroom, Delhi) for the diesel variant and 14.40 lakh for the fully-loaded petrol version.
The company had partnered with Indian utility vehicle maker Mahindra & Mahindra to introduce Logan sedan in 2007, but had failed to impress Indian customers due to its dated design that led to dwindling sales of the car.
Eventually it pulled out of the joint venture and started its own 4 lakh cars a year greenfield plant in Chennai with its global partner Nissan Motors of Japan, where the Fluence is being currently manufactured.
"We are making a new beginning in India. Logan has given us a good learning about the Indian market and customers," Renault India MD Marc Nassif said. We know what the customer want and have worked hard to customise the new Fluence sedan for the local market," he added.
The twin-variant Fluence comes with advanced features like anti-lock brake system and multiple airbags but is competitively priced against other cars like Skoda Laura, Honda Civic and Toyota Corolla .
The company had partnered with Indian utility vehicle maker Mahindra & Mahindra to introduce Logan sedan in 2007, but had failed to impress Indian customers due to its dated design that led to dwindling sales of the car.
Eventually it pulled out of the joint venture and started its own 4 lakh cars a year greenfield plant in Chennai with its global partner Nissan Motors of Japan, where the Fluence is being currently manufactured.
"We are making a new beginning in India. Logan has given us a good learning about the Indian market and customers," Renault India MD Marc Nassif said. We know what the customer want and have worked hard to customise the new Fluence sedan for the local market," he added.
The twin-variant Fluence comes with advanced features like anti-lock brake system and multiple airbags but is competitively priced against other cars like Skoda Laura, Honda Civic and Toyota Corolla .
PE, M&A activities in logistics, transport sectors to get further momentum
Mumbai: Merger and acquisition (M&A ) and Private equity (PE) activities in the transport and logistics sector in the country during the first five months of 2011 have seen a significant increase as compared to that for the same months last year. Last month alone witnessed five deals, including Warburg Pincus putting $100million in Continental Warehousing Corporation, Fidelity Growth Partners investing $13.5 million in Transpole Logistics and Aqua Logistics taking over Nikkos Logistics. Given the hectic activities, sources familiar with the development are expecting to see at least one deal every month on transport infrastructure and logistics sectors of the country .
On the PE side, scores of India-focused funds managing over $20 billion are now eager to deploy capital given the recent slowdown. On the M&A side, the country presents itself as an ideal ground where industry consolidation has only just begun . PE firms that have successfully exited last year after amassing a cool $5.4 billion are also giving investors the necessary confidence about the accelerating growth of the economy , fast approaching $2 trillion in size, and its ability to give healthy returns.
There have been over 160 deals in the infrastructure sector in the last five years alone making it one of the most active M&A sectors in India today.
If there is any particular segment that is enjoying good attention of fund managers as well as strategic buyers, it is the freight forwarding industry.
According to Wikipedia, a freight forwarder, forwarder, or forwarding agent is a person or company that organises shipments for individuals or other companies and may also act as a carrier. A forwarder is often not active as a carrier and acts only as an agent, in other words as a third-party (non-assetbased ) logistics provider that dispatches shipments via assetbased carriers and that books or otherwise arranges space for these shipments.
According to Chetan Dikshit, director – Rothschild India, freight forwarding continues to receive a premium as compared to 3PL businesses in the global strategic M&A landscape .
"Unlike the west and the other developed world, India's freight market is dominated by forwarders ," said Gautami Seksaria , founder and partner, Supply Chain Leadership Council, an organization seeking to create an active community of industry stakeholders in the wider transport and logistics sector. "They control customer relationships and play the crucial role of consolidating cargo volumes for carriers ."
With few entry barriers, the freight forwarding sector has traditionally seen an influx of a number of unorganized players . However, freight forwarders are gaining scale, some more than others, and are wanting to offer other value added services, often asset heavy like CFS/ICD, warehousing, etc. This, together with their need for working capital and create self-owned set-ups abroad, requires them to raise funds creating opportunities for a PE play. It is no wonder that in India the maximum number of M&A activities are centred around freight forwarding companies as overseas logistics companies seek to have greater control of their India corridor and vice versa.
According to Manish Saigal, executive director, KPMG, some of the new trends that are shaping investment opportunities in the sector include the emergence of strong intra-Asia trade in turn strengthening the east coast shipping and ports infrastructure , the need for integrated , multi-modal transport networks with a rail focus and specialization in high-end cargo types such as project logistics focused on power or metro coaches or sports logistics.
"With the government making way for guiding tariff instead of fixing tariff for ports, it will give confidence to the investor community to invest in port projects," opines Ms Seksaria. India, the world's second fastest growing major economy after China, will need $1 trillion (Rs 45.1 trillion) worth of investments in infrastructure over the next five years, according to a recent report by research agency Prequin.
India government's maritime development agenda has geared to bring in sizable private money into sector, which is projected to see developments to the tune of Rs 1 lakh crore during the ongoing National Maritime Development Programme. "The government will, however , have to firm up the policy framework governing private investment in infrastructure," said Ms Seksaria, "if it has to continue to attract private capital both domestic and overseas" .
When asked whether the rising interest regime could spoil the sport, she said, "Project debt financing will become further expensive and while, given the imperative nature of developments , it will not be a major setback to our infrastructure development programme, it gives an additional reason to the policymakers to be sensitive to the cause of the private investor" .
According to Prequin, currently there are 38 overseas infrastructure investors, all of them PE funds, with a preference for assets in India. "Of these, 25 have raised an aggragate $9.5 billion, while the rest are scouting for another $7.3 billion," it had pointed out in its report.
On the PE side, scores of India-focused funds managing over $20 billion are now eager to deploy capital given the recent slowdown. On the M&A side, the country presents itself as an ideal ground where industry consolidation has only just begun . PE firms that have successfully exited last year after amassing a cool $5.4 billion are also giving investors the necessary confidence about the accelerating growth of the economy , fast approaching $2 trillion in size, and its ability to give healthy returns.
There have been over 160 deals in the infrastructure sector in the last five years alone making it one of the most active M&A sectors in India today.
If there is any particular segment that is enjoying good attention of fund managers as well as strategic buyers, it is the freight forwarding industry.
According to Wikipedia, a freight forwarder, forwarder, or forwarding agent is a person or company that organises shipments for individuals or other companies and may also act as a carrier. A forwarder is often not active as a carrier and acts only as an agent, in other words as a third-party (non-assetbased ) logistics provider that dispatches shipments via assetbased carriers and that books or otherwise arranges space for these shipments.
According to Chetan Dikshit, director – Rothschild India, freight forwarding continues to receive a premium as compared to 3PL businesses in the global strategic M&A landscape .
"Unlike the west and the other developed world, India's freight market is dominated by forwarders ," said Gautami Seksaria , founder and partner, Supply Chain Leadership Council, an organization seeking to create an active community of industry stakeholders in the wider transport and logistics sector. "They control customer relationships and play the crucial role of consolidating cargo volumes for carriers ."
With few entry barriers, the freight forwarding sector has traditionally seen an influx of a number of unorganized players . However, freight forwarders are gaining scale, some more than others, and are wanting to offer other value added services, often asset heavy like CFS/ICD, warehousing, etc. This, together with their need for working capital and create self-owned set-ups abroad, requires them to raise funds creating opportunities for a PE play. It is no wonder that in India the maximum number of M&A activities are centred around freight forwarding companies as overseas logistics companies seek to have greater control of their India corridor and vice versa.
According to Manish Saigal, executive director, KPMG, some of the new trends that are shaping investment opportunities in the sector include the emergence of strong intra-Asia trade in turn strengthening the east coast shipping and ports infrastructure , the need for integrated , multi-modal transport networks with a rail focus and specialization in high-end cargo types such as project logistics focused on power or metro coaches or sports logistics.
"With the government making way for guiding tariff instead of fixing tariff for ports, it will give confidence to the investor community to invest in port projects," opines Ms Seksaria. India, the world's second fastest growing major economy after China, will need $1 trillion (Rs 45.1 trillion) worth of investments in infrastructure over the next five years, according to a recent report by research agency Prequin.
India government's maritime development agenda has geared to bring in sizable private money into sector, which is projected to see developments to the tune of Rs 1 lakh crore during the ongoing National Maritime Development Programme. "The government will, however , have to firm up the policy framework governing private investment in infrastructure," said Ms Seksaria, "if it has to continue to attract private capital both domestic and overseas" .
When asked whether the rising interest regime could spoil the sport, she said, "Project debt financing will become further expensive and while, given the imperative nature of developments , it will not be a major setback to our infrastructure development programme, it gives an additional reason to the policymakers to be sensitive to the cause of the private investor" .
According to Prequin, currently there are 38 overseas infrastructure investors, all of them PE funds, with a preference for assets in India. "Of these, 25 have raised an aggragate $9.5 billion, while the rest are scouting for another $7.3 billion," it had pointed out in its report.
Morgan Stanley, Isolux Corsan to invest $400 mn in India JV
Mumbai: Morgan Stanley Infrastructure Partners (MSIP), a $4-billion global infrastructure fund, has committed to invest up to $200 million in a joint venture (JV) with Isolux Corsán Concesiones in India.
Isolux Corsán Concesiones is an infrastructure concessions subsidiary of the $4-billion Grupo Isolux Corsán, specialising in large projects across construction, engineering and concessions.
Grupo Isolux Corsán will bring in an equal amount in the JV, bringing the total commitment to $400 million.
The JV is constructing three highway projects under long-term concession agreements awarded through the build-operate-transfer programme of the National Highways Authority of India (NHAI). The three projects, which totalled over 400 kilometres of road, were estimated to cost over $1.6 billion, said a Morgan Stanley statement. These projects had already received debt financing from leading financial institutions and substantial equity investment from Isolux Corsán, it added.
These projects are expansions of existing roads, and will link major cities, industrial hubs, as well as ports and tourist attractions.
“The JV with Isolux Corsán Concesiones adds to our successful presence in India’s transportation sector, providing us with an excellent road concession platform in a market that is experiencing rapid urbanisation and dramatic growth in vehicles,” said Gautam Bhandari, head of MSI Asia.
The road development programme undertaken by the NHAI under a public-private-partnership (PPP) model is among the largest PPP programmes in the world on Tuesday. NHAI’s National Highway Development Programme, initiated in 1999, is estimated to total $50 billion when completed. India has witnessed double-digit growth in vehicle registrations over the past 10 years, according to Euromonitor, and Morgan Stanley Research identifies it as the second-fastest growing auto market in the world.
Isolux Corsán Concesiones is an infrastructure concessions subsidiary of the $4-billion Grupo Isolux Corsán, specialising in large projects across construction, engineering and concessions.
Grupo Isolux Corsán will bring in an equal amount in the JV, bringing the total commitment to $400 million.
The JV is constructing three highway projects under long-term concession agreements awarded through the build-operate-transfer programme of the National Highways Authority of India (NHAI). The three projects, which totalled over 400 kilometres of road, were estimated to cost over $1.6 billion, said a Morgan Stanley statement. These projects had already received debt financing from leading financial institutions and substantial equity investment from Isolux Corsán, it added.
These projects are expansions of existing roads, and will link major cities, industrial hubs, as well as ports and tourist attractions.
“The JV with Isolux Corsán Concesiones adds to our successful presence in India’s transportation sector, providing us with an excellent road concession platform in a market that is experiencing rapid urbanisation and dramatic growth in vehicles,” said Gautam Bhandari, head of MSI Asia.
The road development programme undertaken by the NHAI under a public-private-partnership (PPP) model is among the largest PPP programmes in the world on Tuesday. NHAI’s National Highway Development Programme, initiated in 1999, is estimated to total $50 billion when completed. India has witnessed double-digit growth in vehicle registrations over the past 10 years, according to Euromonitor, and Morgan Stanley Research identifies it as the second-fastest growing auto market in the world.
Spice Exports Treble in Five Years
Kochi: Spice exports have seen risen three-fold in value terms in the last five years. In quantity terms, the increase would be close to 60% in the period. Exports of spices and spice products stood at 6,030.74 crore during the April-February period of 2010-11.
They were at around 2,100 crore during the April-February period of 2005-06.
Though almost all items in the spice basket have registered a growth during the past five years, the phenomenal rise in chilli, turmeric and cumin and value-added items like curry powder, mint products and spice oils have led to the boom in exports.
"The increase in the value of spice exports is the combined effect of an increase in the prices of major items, a moderate increase in the quantity of exports and higher exports of value-added items," said Philip Kuruvila, former chairman of the All India Spice Exporters Forum.
The dramatic increase was seen in chilli, the exports of which stood at 1,379.51 crore during April-February of 2010-11. In 2005-06, it stood at 362 crore.
They were at around 2,100 crore during the April-February period of 2005-06.
Though almost all items in the spice basket have registered a growth during the past five years, the phenomenal rise in chilli, turmeric and cumin and value-added items like curry powder, mint products and spice oils have led to the boom in exports.
"The increase in the value of spice exports is the combined effect of an increase in the prices of major items, a moderate increase in the quantity of exports and higher exports of value-added items," said Philip Kuruvila, former chairman of the All India Spice Exporters Forum.
The dramatic increase was seen in chilli, the exports of which stood at 1,379.51 crore during April-February of 2010-11. In 2005-06, it stood at 362 crore.
India is at the heart of Accenture operations: CEO Pierre Nanterme
Bangalore: Consulting and technology giant Accenture houses around a third of its employees in India. Speaking exclusively to TOI on a visit to Bangalore on Tuesday, Accenture CEO Pierre Nanterme described India as the heart of Accenture and said the company's employee base in India would be 70,000 by August this year, the highest in any one country. The US has the second largest employee number at around 30,000. Accenture globally has 215,000 people.
The $22-billion Accenture's strength in India shows yet again how critical the country has become to the world's technology giants. IBM does not reveal country figures, but is said to be the second biggest IT employer in India, after TCS. Capgemini has a third of its employee base in India, higher than in its home country France.
"The quality of engineers in India is spectacular. In the West, with an ageing population, there is a significant shortage of people with skills in maths, science and engineering," Nanterme said.
He said India is now at the heart of Accenture's global operations in technology, innovation and industry expertise. India is at the forefront of the company's R&D and innovation in several key industry drivers including cloud computing, analytics and mobility. "We are making huge investments in India to develop our expertise around the new waves of technology that will drive future business," he said.
Nanterme said that the company now focuses on hiring engineers who have deep domain expertise in specific sectors. This enables engineers to understand how a certain technology or application can support functions in specific sectors. It also enables engineers to develop industry specific solutions on top of the existing platforms.
For instance, Accenture has built a banking centre of excellence in India where the company is developing pre-configured solutions for banking customers. Similarly the company has established centres of excellence in around ten key industry verticals.
Asked what he thought of Indian IT companies like Infosys and Wipro, he said they were good companies and Accenture had learned much from them. "One of the things we learnt (from them) was to have 70,000 people in India; and to stay close to them to understand them better," he said. He said it with a laugh, but it did not look like he said it tongue-in-cheek.
The $22-billion Accenture's strength in India shows yet again how critical the country has become to the world's technology giants. IBM does not reveal country figures, but is said to be the second biggest IT employer in India, after TCS. Capgemini has a third of its employee base in India, higher than in its home country France.
"The quality of engineers in India is spectacular. In the West, with an ageing population, there is a significant shortage of people with skills in maths, science and engineering," Nanterme said.
He said India is now at the heart of Accenture's global operations in technology, innovation and industry expertise. India is at the forefront of the company's R&D and innovation in several key industry drivers including cloud computing, analytics and mobility. "We are making huge investments in India to develop our expertise around the new waves of technology that will drive future business," he said.
Nanterme said that the company now focuses on hiring engineers who have deep domain expertise in specific sectors. This enables engineers to understand how a certain technology or application can support functions in specific sectors. It also enables engineers to develop industry specific solutions on top of the existing platforms.
For instance, Accenture has built a banking centre of excellence in India where the company is developing pre-configured solutions for banking customers. Similarly the company has established centres of excellence in around ten key industry verticals.
Asked what he thought of Indian IT companies like Infosys and Wipro, he said they were good companies and Accenture had learned much from them. "One of the things we learnt (from them) was to have 70,000 people in India; and to stay close to them to understand them better," he said. He said it with a laugh, but it did not look like he said it tongue-in-cheek.
India beats China in internet contribution to GDP
New Delhi: Internet is changing our lives, the way we work, shop, search for information, communicate, and meet people. Two billion people are now connected to the internet, and this number is growing by 200 million a year. But the magnitude of the economic impact of internet-related activities is not obvious.
A new McKinsey study finds that the internet has delivered significant economic growth, created swathes of jobs and created wealth.
Using an approach based on internet-enabled consumption patterns by individuals, businesses, and governments, the study finds that the internet contributes more to GDP than agriculture, energy, and several other traditional sectors do in many countries.
In India , the internet contributed 5% to GDP growth in the past 5 years compared with the average 3% for Bric economies, says the study.
Here is how internet contributes to growth:
Companies are able to keep costs down, target customers better and bring goods and services to markets around the world much more easily.
Individuals are able to compare prices, search hard-to-find items or information, communicate and learn in new, improved ways.
Governments can serve citizens much more quickly and at a much lower cost through e-governance.
A new McKinsey study finds that the internet has delivered significant economic growth, created swathes of jobs and created wealth.
Using an approach based on internet-enabled consumption patterns by individuals, businesses, and governments, the study finds that the internet contributes more to GDP than agriculture, energy, and several other traditional sectors do in many countries.
In India , the internet contributed 5% to GDP growth in the past 5 years compared with the average 3% for Bric economies, says the study.
Here is how internet contributes to growth:
Companies are able to keep costs down, target customers better and bring goods and services to markets around the world much more easily.
Individuals are able to compare prices, search hard-to-find items or information, communicate and learn in new, improved ways.
Governments can serve citizens much more quickly and at a much lower cost through e-governance.
India-Africa ties get stronger
New Delhi: The Ethiopian Government has offered a substantial share of its 3 million-hectare farm land to Indian entrepreneurs. This was declared by Meles Zenawi, Prime Minister of Ethiopia, at a press conference in Addis Ababa.
The Prime Minister of Ethiopia said that this will bring capital, technology, infrastructure and jobs to the rural areas of the country. This offer is expected to increase the quantum of trade between the two countries and the Indian presence would add value to Ethiopian products. "India has promised to invest in the textile sector and this would hugely help our local industry," said the Ethiopian Prime Minister. Indian investors have already committed US$ 4.7 billion investment in the farm sector of Ethiopia.
Moreover, the Prime Minister of India, Dr Manmohan Singh, has said at the 2nd Africa-India Forum Summit that, “We should encourage trade and investment flows as well as transfer of technology. Private sector should be fully involved in the efforts to integrate our economies.”
The Indian Government is also looking to unveil a new policy to promote Indian companies in the International markets.
The Prime Minister of Ethiopia said that this will bring capital, technology, infrastructure and jobs to the rural areas of the country. This offer is expected to increase the quantum of trade between the two countries and the Indian presence would add value to Ethiopian products. "India has promised to invest in the textile sector and this would hugely help our local industry," said the Ethiopian Prime Minister. Indian investors have already committed US$ 4.7 billion investment in the farm sector of Ethiopia.
Moreover, the Prime Minister of India, Dr Manmohan Singh, has said at the 2nd Africa-India Forum Summit that, “We should encourage trade and investment flows as well as transfer of technology. Private sector should be fully involved in the efforts to integrate our economies.”
The Indian Government is also looking to unveil a new policy to promote Indian companies in the International markets.
Advanced GSAT-8 satellite launched successfully
Bengaluru: India's advanced communication satellite, GSAT-8, was successfully launched at 2:08 am (IST) today by the Ariane-V launch vehicle of Arianespace from Kourou, French Guiana, in South America. Ariane V placed the GSAT-8 into the intended Geosynchronous Transfer Orbit (GTO) of 35,861 km apogee and 258 km perigee.
Isro’s Master Control Facility (MCF) at Hassan in Karnataka acquired the signals from GSAT-8 satellite immediately after the injection, according to a statement from Isro. Initial checks on the satellite have indicated normal health of the satellite.
“Preparations are underway for the firing of 440 Newton Liquid Apogee Motor (LAM) during the third orbit of the satellite on May 22, at 3:58 am (IST) as a first step towards taking the satellite to its geostationary orbital home,” the statement added.
The GSAT-8 will improve direct to home TV broadcast services. Weighing about 3100 Kg at lift-off, GSAT-8 is configured to carry 24 high power transponders in Ku-band and a two-channel GPS Aided Geo Augmented Navigation (GAGAN) payload operating in L1 and L5 bands.
The 24 Ku band transponders will augment the capacity in the Insat system. The GAGAN payload provides the Satellite Based Augmentation System (SBAS), through which the accuracy of the positioning information obtained from the GPS Satellite is improved by a network of ground based receivers and made available to the users in the country through the geostationary satellites.
Prime Minister Manmohan Singh has applauded the efforts of the Department of Space for the successful launch of advanced communication satellite GSAT-8 for improving in an elliptical geo-synchronous transfer orbit early Saturday by the Ariane-VA-202 rocket.
Within minutes, the space agency’s master control facility (MCF) at Hassan, about 180 km from Bangalore, identified the presence of GSAT-8 in the geo-synchronous transfer orbit (GTO).
Responding to the news, the official Isro spokesperson claimed MCF will conduct a test to track the health parameters of the payloads by June 1 so that it will be accessed by DTH services from July 1
Isro’s Master Control Facility (MCF) at Hassan in Karnataka acquired the signals from GSAT-8 satellite immediately after the injection, according to a statement from Isro. Initial checks on the satellite have indicated normal health of the satellite.
“Preparations are underway for the firing of 440 Newton Liquid Apogee Motor (LAM) during the third orbit of the satellite on May 22, at 3:58 am (IST) as a first step towards taking the satellite to its geostationary orbital home,” the statement added.
The GSAT-8 will improve direct to home TV broadcast services. Weighing about 3100 Kg at lift-off, GSAT-8 is configured to carry 24 high power transponders in Ku-band and a two-channel GPS Aided Geo Augmented Navigation (GAGAN) payload operating in L1 and L5 bands.
The 24 Ku band transponders will augment the capacity in the Insat system. The GAGAN payload provides the Satellite Based Augmentation System (SBAS), through which the accuracy of the positioning information obtained from the GPS Satellite is improved by a network of ground based receivers and made available to the users in the country through the geostationary satellites.
Prime Minister Manmohan Singh has applauded the efforts of the Department of Space for the successful launch of advanced communication satellite GSAT-8 for improving in an elliptical geo-synchronous transfer orbit early Saturday by the Ariane-VA-202 rocket.
Within minutes, the space agency’s master control facility (MCF) at Hassan, about 180 km from Bangalore, identified the presence of GSAT-8 in the geo-synchronous transfer orbit (GTO).
Responding to the news, the official Isro spokesperson claimed MCF will conduct a test to track the health parameters of the payloads by June 1 so that it will be accessed by DTH services from July 1
IandB ministry okay with 74% FDI ceiling for DTH, IPTV
New Delhi: The information and broadcasting ministry endorsed the recommendation by the Telecom Regulatory Authority of India (Trai) to enhance foreign direct investment (FDI) ceiling for direct to home TV, Internet protocol TV and teleport from 49% to 74%.
However, it rejected recommendation to reduce the FDI ceiling for local cable operators from 49% to 26%, arguing that the limit had been 49% since 1995. "The nature of control as per the provisions of the Company Law would also not undergo any change since the power to initiate a special resolution remains the same at 26% or at 49%. The ministry is of the view that not much purpose would be served by reducing the FDI limit and, therefore, 49% FDI may be retained for the LCOs," the ministry said in its draft note, which has now been sent back to Trai for consideration.
On the recommendations on FDI cap for uplinking of non-news and current affairs TV channels and downlinking of TV channels uplinked from abroad and in news channels and FM, radio, the I&B ministry agreed with views of Trai under those heads.
There is no restriction on foreign ownership of non-news and current affairs TV channels and downlinking TV channels uplinked from foreign countries. The Trai had favoured status-quo. There is a cap of 26% on FDI flow in news and current affairs TV channels and FM radio, and Trai wanted the limit to remain untouched.
The major change that could be in the offing is in the services offered by the various carriage services. While platforms such as HITS and mobile TV are allowed to invite FDI up to 74%, a parity is now being sought to be restored by allowing DTH , Teleport and IPTV operators also to attract the same level of foreign investment.
"The ministry may broadly agree with the recommendations that a limit of 74% for foreign investment for the broadcast carriage services such as DTH, IPTV, Mobile TV, HITS and Teleport may be set. This will bring uniformity in the FDI ceiling in carriage services. The rationale brought out by Trai for reaching the 74% limit is justified in view of the burgeoning growth of the sector, which requires huge investment and also in view of the convergences of technologies," the note said.
However, it rejected recommendation to reduce the FDI ceiling for local cable operators from 49% to 26%, arguing that the limit had been 49% since 1995. "The nature of control as per the provisions of the Company Law would also not undergo any change since the power to initiate a special resolution remains the same at 26% or at 49%. The ministry is of the view that not much purpose would be served by reducing the FDI limit and, therefore, 49% FDI may be retained for the LCOs," the ministry said in its draft note, which has now been sent back to Trai for consideration.
On the recommendations on FDI cap for uplinking of non-news and current affairs TV channels and downlinking of TV channels uplinked from abroad and in news channels and FM, radio, the I&B ministry agreed with views of Trai under those heads.
There is no restriction on foreign ownership of non-news and current affairs TV channels and downlinking TV channels uplinked from foreign countries. The Trai had favoured status-quo. There is a cap of 26% on FDI flow in news and current affairs TV channels and FM radio, and Trai wanted the limit to remain untouched.
The major change that could be in the offing is in the services offered by the various carriage services. While platforms such as HITS and mobile TV are allowed to invite FDI up to 74%, a parity is now being sought to be restored by allowing DTH , Teleport and IPTV operators also to attract the same level of foreign investment.
"The ministry may broadly agree with the recommendations that a limit of 74% for foreign investment for the broadcast carriage services such as DTH, IPTV, Mobile TV, HITS and Teleport may be set. This will bring uniformity in the FDI ceiling in carriage services. The rationale brought out by Trai for reaching the 74% limit is justified in view of the burgeoning growth of the sector, which requires huge investment and also in view of the convergences of technologies," the note said.
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