Govt eases norms to attract foreign investors

New Delhi: The government on Saturday announced simplification of removal of norms for foreign institutional investors (FIIs) to invest in government and corporate bonds, in its latest attempt to woo overseas investors to finance the widening current account deficit.

The move, which will be applicable from April 1, was among the major demands made by FIIs during their recent interaction with finance minister P Chidambaram and his team. From next month, the government, Sebi and the Reserve Bank of India (RBI) have decided to remove sub-limits for FIIs within the overall cap for bonds.

From now on, there will only be two ceilings — a $25-billion limit for investment in government securities that has been formed by merging g-secs (old) and g-secs (long term). In addition, there will be a $51-billion sub-limit for corporate bonds that will include the existing one for FIIs ($25 billion), qualified foreign investors ($1 billion) and $25 billion for FIIs in long term infrastructure bonds.

Chidambaram told the National Editors' Conference here that Sebi's current mechanism for allocating debt limits for corporate bonds will be replaced by the 'on tap system' that is used for infrastructure bonds. To make the regime more predictable, the government said that the corporate bond ceiling when 80% of the limit was exhausted.

In case of g-secs, however, the government appeared more cautious and decided to limit the annual enhancement within 5% of Centre's gross borrowings during a fiscal. The government has budgeted for borrowings of Rs 5.79 lakh crore, which means that the government can at best enhance the ceiling for the current fiscal by around $5 billion.

"The current account deficit (CAD) can be financed only through foreign inflows and that is why I am happy to announce a major rationalization of foreign investment in government securities and corporate bonds," the minister said. FII flows and foreign direct investment are crucial for India to fund its current account deficit that is expected to hit 4.5% of GDP during the current financial year. Large inflows would check against a steep depreciation of the rupee and ensure that there are sufficient foreign exchange reserves to cover for imports.

Government approves 12 proposals of foreign direct investment amounting to Rs 2609.27 crore approximately

New Delhi: Based on the recommendations of Foreign Investment Promotion Board (FIPB) in its meeting held on February 13, 2013, the Government has approved 12 Proposals of Foreign Direct Investment amounting to Rs.2609.27 crore approximately.

Details of Proposals considered in the Foreign Investment Promotion Board (FIPB) Meeting held on 13.02.2013 are as follows:

1. Following twelve (12) proposals have been approved:
Sl. No. Name of the applicant Particulars of the proposal FDI/NRI inflows (` in crore)
COMMERCE
1 M/s Promod S.A.S France Induction of foreign equity in the equity share capital of an Indian JV company proposed to be engaged in single brand retail trading. 29.69
2 M/s Le Creuset India Trading Pvt. Ltd. WOS of a foreign company to undertake the business of single brand retail trading. No fresh inflow
3 M/s Fossil India Pvt. Ltd. WOS of a foreign company to undertake the business of single brand retail trading. 22.53
4 M/s Decathlon Sports India Pvt. Ltd. Induction of foreign equity in the equity share capital of its WOS to undertake the business of single brand retail trading. 700.00
PHARMACEUTICALS
5 M/s Claris Otsuka Limited, Ahmedabad An existing Indian pharma company is hiving off its Infusions Business in to a new JV with FDI. 1050.00
INDUSTRIAL POLICY & PROMOTION
6 M/s Menarini Raunaq Pharma Ltd. Induction of foreign equity in an existing pharma sector company by its existing foreign promoter. 2.00
7 M/s Al Shukur Company for Engineering & Construction Ltd. Induction of further foreign capital contribution in an LLP engaged in engineering services. 0.90
ELECTRONICS & INFORMATION TECHNOLOGY
8 M/s Yalamanchili Software Export Ltd., Chennai Conversion of non-repatriable equity held by majority shareholder to repatriable equity and share swap of this holding to shares of a foreign company. Nil
FINANCIAL SERVICES
9 M/s Aon Holdings B.V., Netherlands Post facto approval for induction of foreign equity to carry out the business of Insurance broking, and risk advisory services. 0.65 (already brought)
COMMERCE
10 M/s ToCheungLee Stationery Mfg. Co. Pvt. Ltd., Delhi A foreign owned company engaging in manufacturing metal components for stationery item is collaborating with another company to set up an LLP to be engaged in the same business. 3.5
INDUSTRIAL POLICY & PROMOTION
11 M/s Glynwed Pipe Systems India Private Limited, Mumbai Foreign Owned Indian company to receive foreign investment for making downstream investments. 800.00
ECONOMIC AFFARIS (CM DIVISION)
12 M/s Gagil FDI Limited, Cyprus Transfer of shares of an Indian stock exchange from its present foreign holder, which is an FII, to another foreign company which is wholly owned subsidiary of the present foreign holder and which will be an FDI holding. No fresh inflow
2. The following nine (9) proposals have been deferred:
Sl. No Name of the applicant Particulars of the proposal
1 M/s GeoPost S.A. France Acquisition of shares of an Indian company engaged in the business of commercial express and parcel delivery business segment.
2 Md. Rabiul Alam, Bangladesh To set up a new company in India with 100 percent FDI to carry out the business of production of engineering products.
3 M/s Sunil Hitech Engineers Limited, Nagpur To issue warrants to FIIs to carry out the business of execution of projects in the power and infrastructure sector.
4 M/s Vijay Television Pvt. Ltd. The existing domestic shareholding in the non-news channel business is being acquired by the foreign promoters.
5 M/s Sutures (I) Pvt. Ltd. Induction of foreign equity in an existing pharma sector company.
6 M/s DPD Continental Ltd. Increase in foreign equity participation from 60% to 100% to carry out the business of Courier services other than post.
7 M/s Selex Galileo Ltd., England To set up a JV to undertake the business of marketing, development, final assembly and test, system integration, in country support and other services to those products, primarily in defence electronics sector.
8 M/s Alliance Insurance Brokers Private Limited, Mumbai Induction of foreign equity by way of issue and transfer of equity shares to carry out the business of insurance broking.
9 M/s Shaastra Securities Trading Pvt. Ltd., Gurgaon To make downstream investment in the proposed Wholly Owned Subsidiary to undertake the activity of Commodity broking & trading in the commodity exchanges.
3. The following one (1) proposal has been rejected:
Sl. No Name of the applicant Particulars of the proposal
1 M/s Erica Healthcare Pvt. Ltd., Mumbai Increase in foreign equity engaged in the pharmaceutical sector.

Mumbai among world’s 10 most pocket-friendly tourist destinations

New Delhi: Mumbai is among the 10 most affordable destinations, according to a cost comparison study on common incidental items and services that travellers purchase while staying at a hotel. The study was done by travel review Web site TripAdvisor.

The study, which covered four-star hotels in 46 destinations, found Africa as the most pocket-friendly for Indian travellers.

TripAdvisor’s TripIndex Room Service tracked against the rupee the combined cost of a club sandwich ordered on room service, a bottle of water, peanuts from mini bar, a mini bottle of vodka, a can of coke from the mini bar, and the dry cleaning of one shirt.

Nikhil Ganju, Country Manager, TripAdvisor (India), said, “While we bear in mind the cost of a room night when planning our travel, we often forget to account for incidentals such as in-room dining and laundry. Mumbai has emerged as the third-most affordable destination on the TripIndex Room Service. As the focus on in-bound tourism grows, this works in our favour since affordability has been an important factor in drawing leisure travellers to India.”

Ordering a club sandwich in Zurich can cost you as much as Rs 1,551.69 while in Sofia (Bulgaria) about Rs 294. A bottle of water can cost you Rs 435.15 in Oslo while Hong Kong and Kuala Lumpur offer free bottled water at the hotels. Peanuts from mini bar in Moscow could burn a hole in your pocket of about Rs 662.56 while you can get it for just about Rs 85.21 in Puerto Vallarta (Mexico). A can of coke from the hotel mini-bar will cost you a bomb in Oslo at Rs 421.61, while it is available nearly four times cheaper in Cape Town (Africa). A mini-bottle of vodka will cost you a little less than Rs 1,000 in Stockholm, while it is the cheapest at Rs 165.15 in Cape Town.

Just based on the price of the incidental costs, African cities such as Cape Town, Sharm el-Sheikh in Egypt and Marrakech (Morocco) emerged as the most affordable destination for Indian travellers.

In Asia, Jakarata and Taiwan are among the least expensive for Indian travellers. Meanwhile, European cities such as Paris, Stockholm, Oslo, Zurich and Helsinki emerged as the key expensive cities, while Istanbul, Budapest and Sofia (Bulgaria) emerged as relatively more affordable.

Amway to foray into consumer durables business in India

Kolkata: In what it sees as a natural progression to growth in India, US-based Amway Corp, one of the world's largest direct selling companies, is planning to enter the consumer durables business by rolling out cookware, water purifiers and air purifiers, global president Douglas L. DeVos said.

The durables business of Amway globally contributes around 20% of its turnover, with brands like Amway Queen for cookware, Atmosphere for air purifiers and eSpring range of water purifiers. The largest sales contributor is the nutrition business led by the Nutrilite brand that accounts for 45% of revenue.

"The durable business is complicated since it requires capable manufacturing and service back-up. But it will be a natural progression for us to grow Amway in India," said DeVos, the youngest son of co-founder Rich DeVos.

The company's plans to enter the Rs 4,000 crore water purifier space is going to stir up excitement in a category that has seen recent expansion by leading companies such as Unilever, Tata Group, LG and Panasonic. Amway would even consider acquiring brands in the cookware or water purifier segment if it saw a strategic fit, DeVos said.

"India is currently the seventh largest market for Amway. It can potentially become the second largest after China due to sheer size of the population and with rapid expansion into newer categories driving the growth," said DeVos.

At present, India contributes 7% to Amway's global revenue. It is the 11th largest FMCG company in the country with revenue of Rs 2,288 crore in 2012. Its top brands include Nutrilite Protein, Nutrilite Daily and Glister and SA8.

DeVos makes an annual India visit. This year, he first flew into Chennai to oversee Amway's first proposed FMCG plant in the country built and then came to Kolkata on Tuesday evening. "The Chennai plant will primarily cater to the Indian market but we expect it will eventually become a global sourcing hub," said DeVos.

Amway wants to use India to expand into the SAARC region and enter markets like Pakistan, Bangladesh and Sri Lanka. "Hence, we want to rapidly expand the Indian operations so that it can become the hub," he said.

Amway is the largest direct selling company in the country and has been championing the cause of regulation. "We are presenting laws on direct selling in the US, Malaysia and Singapore to the Indian government. A regulation for the industry will help in legitimate growth and will remove the misconception with which our competitors misrepresent us," says DeVos.

Groupon opens R&D centre in Chennai

Chennai: Groupon’s R&D centre in Chennai builds tools and software for customer service, supply chain management and managing deals offered by merchants.

Started six months ago, the 25,000 sq ft facility, at an IT park in Chennai, employs 200 people. This is the company’s fifth R&D centre worldwide, after Chicago, Palo Alto, Santiago and Berlin, and was inaugurated formally today.

Groupon is an online commerce site that promotes deals and discounts from small merchants. Globally, the company has over 200 million subscribers. In India, Groupon has sold five lakh vouchers; 15,000 merchants are registered on the site.

Global online retailers eBay and Amazon also have development centres in Chennai.

Software exports to LatAm nations to double in 2 years

Kolkata: India’s computer software and services export to Latin American countries would double in the next two years, D.K. Sareen, Executive Director, Electronics and Computer Software Export Promotion Council (ESC), said on Thursday.

In 2011-12, the export value stood at $563 million (approximately Rs 2,700 crore).

According to Sareen, the small-scale software and ITeS firms in India are looking forward to a substantial spending on information technology for developing the infrastructure for the upcoming Football World Cup and Olympics in Brazil.

“We have a lot of opportunities coming up in the Latin American countries. And, India has the potential to double its exports to these countries over the next two years,” Sareen told reporters here after inaugurating the 13th edition of IndiaSoft 2013 — an international IT exhibition and conference.

Switzerland keen to strike ventures with Indian firms

Visakhapatnam: Visakhapatnam as a fast-developing city can look to Switzerland and the local companies can form joint ventures with Swiss companies in many sectors to mutual advantage, Bangalore-based Consulate-General of Switzerland Rolf Frei said.

He was interacting with the local industrialists and investors at a session organised here by the Vizagapatam Chamber of Commerce and Industry.

On his maiden visit to the city, he said he was very impressed with the facilities and the beauty of the city. “The way I am being received is quite amazing. The city and its people are very warm and beautiful,” he added.

Frei said the Switzerland Government was looking at strengthening the bilateral ties in trade and commerce.

The Consulate office was opened in Bangalore two years ago recognising the investment potential in and from South India.

Frei said they were looking at investment opportunities in tourism, infrastructure, information and communication technology, retail, life sciences, clean technologies, research and development and education.

“Many from South India are investing in Switzerland because it’s the gateway to the Europe and has excellent infrastructure and tax incentives,” he stated.

Biotech and IT offices have been opened with an investment of $1 billion by Indians in Switzerland. The Swiss investment in India is of the order of $4 billion.

Thirty Indian companies with interest in Europe have so far opened their offices in Switzerland.

“We have stable political environment, skilled manpower and excellent infrastructure. Low taxes are the main attraction,” he said.

Chamber president K. Ramabrahmam, Symbiosys CEO O. Naresh Kumar and others spoke on the advantages of investing in Visakhapatnam and urged the Consul-General to bring in a delegation of Swiss industrialists and others the next time with him to showcase Vizag.

Nasscom launches programme to incubate 10,000 start-ups

Bangalore: To give a boost to the entrepreneurial ecosystem in the country, Nasscom has announced the launch of ‘10,000 start-ups’ programme.

This programme aims to incubate, fund and mentor start-ups in the next 10 years.

While Nasscom has been running such entrepreneurial activities in the past, this time it has sought to involve all the stakeholders – from venture capitalists to product companies that can help foster the start-up ecosystem. They will be provided with tools consisting of hosting credits and other technology and business tools valued at $25000.

As a part of this, Nasscom has partnered by Indian Angel Network, Google, Microsoft and Verisign.

Further, the industry body has ambitious plans of creating $15 billion firms in the next 10 years, which eventually would be a part of the $300-billion Indian IT industry.

Som Mittal, President, Nasscom, said this will create a significant national impact on employment, GDP, innovation, entrepreneurship and will be vital to realise the industry vision.

Tech events
“Start-ups need handholding in the initial stages in areas like monetising of business, especially in technology and mentorship helps,” said M.K. Sridhar, Member-Secretary and executive director, Karnataka Knowledge Commission.

In line with this, the programme will facilitate 7,000 start-up-related events such as hackathons, investor roadshows and best practices workshops across 30 cities. Tech talks and white space discussions will help young entrepreneurs identify global technology trends and needs, according to Mittal.

While these are noteworthy objectives, some start-ups still are sceptical and concerned that this does not turn into a lobby for start-ups affiliating with the key technology partners.

“We are concerned that we might get sidelined if we are not working in areas that Microsoft and Google have interests,” said an educational start-up which works on open source technologies.

Further, Nasscom plans to create awareness about technology entrepreneurship as a career option. India has 3 million professionals working in the IT sector.

Luxury market to reach $15 bn by 2015 in India, marketers try new ways to woo buyers in non-metros

New Delhi: If you were to name the country's most fashionable cities, Indore is unlikely to make the list. But luxury handbag brand Judith Leiber, which sells just about 300 of its pricey bags in the whole of India in a year, recently sold 30 pieces priced anywhere from 25,000 to over 3 lakh in this central Indian city through a special sale event held in partnership with an existing client.

"It was a unique experience for the people of Indore, which worked well for the brand," says HarshvardhanBhatia, founder of HI Diamonds, who partnered the trunk show. Buoyed, the American brand will return to the city next month with a similar event with the same partner.

Judith Leiber is part of a growing club of luxury goods and service providers that finds innovative ways to reach small towns and cities where there is no luxury infrastructure but people have as much money and taste for luxury as those in the metros.

If Judith Leiber uses local influence groups to cosy up to buyers in the hinterland, BMW dealer Bird Automotive interacts with school and college students to popularise the German luxury car brand in cities such as Agra, Meerut, Karnal and Faridabad, where demand for luxury cars is on the rise. "We organise brand connect programmes for students with an aim to motivate them to become a customer at a later stage. It is a long-term approach," says Gaurav Bhatia, director at Bird Automotive.

Bird Automotive sells BMW luxury cars in Delhi and the NCR region. "Educating the consumer is the key to success in these (hinterland) markets," he says, adding that his firm sells up to 70 cars in a year in smaller cities around the Capital. India's luxury market is expected to reach $14.73 billion by 2015 from an estimated $8.21 billion this year, with about 30% of the customers coming from smaller cities.

According to a recent survey by YES Bank, new pockets of regional growth have led to a rise in the number of first-time luxury consumers from smaller cities and towns. This made 36% of the 300 responding CEOs of luxury brands see themselves increasingly using social media platforms as a brand connect and 38% saying they were trying to reach out to these markets through e-commerce.

So the potential is big. And so is the challenge of wooing these new luxury lovers.

Abraham Koshy, professor of marketing at IIM-Ahmedabad, says small-town consumers need to be treated differently. "There is no point explaining what it means to buy a Louis Vuitton bag to a well-heeled shopper in Delhi or Mumbai. But in smaller locations, it is important to stimulate demand by informing a consumer about the badge value of an expensive brand and how it adds to the image," he says. To communicate well, brands need to talk consumers' language.

Rajeev Wadhwa, chairman of Mumbai-based luxury charter services provider Baron Aviation, says that recently a client had called in at two in the night with a demand to fly out to London in a private charter the next morning. "We knew it was not possible and it took one hour for the relationship manager to finally make him understand how numerous permissions were required to be taken," he says.

SIDBI signs tripartite MoU with Egyptian body, World Bank

New Dehi: Small Industries Development Bank of India (SIDBI) has signed a tripartite Memorandum of Understanding (MOU) with Social Fund for Development (SFD) Egypt and the World Bank.

The MOU was signed in the presence of visiting Egyptian President Mohamed Morsi and Commerce and Industry Minister Anand Sharma here today.

Under the MOU, SIDBI and its associates will provide consultancy for three year period to SFD and establish credit guarantee system for micro, small and medium enterprises in Egypt, Sushil Muhnot, Chairman & Managing Director, SIDBI told Businessline.

SIDBI will also help SFD in cluster development, introduction of venture capital and risk capital products in Egypt besides developing responsible micro-finance in that country, Muhnot said.

World Bank is carrying out a SME development project in Egypt and will fund the technical assistance/consultancy to be provided by SIDBI, it is learnt.