A ton of energy going into India: Tim Cook

New Delhi: Within weeks of the Narendra Modi government rejecting Apple Inc’s demand for Customs duty concessions for its suppliers who could look at manufacturing in the country, Cupertino-based tech major has pinned its hope on India even as global sale of iPhones dipped.
At the analyst call after the second quarter earnings early Wednesday (India time), Chief Executive Tim Cook said, “We’re very optimistic about our future in this remarkable country with its very large, young, and tech-savvy population, fast-growing economy, and improving 4G network infrastructure.” Cook said in his opening address that revenue in India grew by strong double digits during the quarter ended April 1, setting a record.
Chief Financial Officer Luca Maestri quantified the “strong double-digit” growth for India — over 20 per cent. The company achieved double-digit growth in the US, Canada, Australia, Germany, the Netherlands, Turkey, Russia and Mexico, Maestri said. “Our growth rates were even higher, over 20 per cent in many other markets, including Brazil, Scandinavia, the Middle East, Central and Eastern Europe, India, Korea and Thailand.”
Globally, Apple sold 50.76 million iPhones in its second quarter financial year, down from 51.19 million a year earlier during the corresponding period. In India, around 2.5 million iPhones are estimated to have been sold between October 2015 and September 2016.
While the talk on India revolved around high growth (mainly of iPhones) and 4G network access, top executives remained tight-lipped on the regulatory hurdles Apple faces in the country as well as on the company plans in this geography.
For instance, when Simona K Jankowski of Goldman Sachs asked Cook if it was reasonable to assume that Apple would sell 10 million to 20 million iPhones in India next year, keeping in mind the growth and 4G roll-out, the chief executive officer spoke of having “a ton of energy going into the country on a number of fronts”. According to the transcript of the analyst call available at Seeking Alpha website, Cook said, “We’ve been investing quite a bit… it is the third-largest smartphone market in the world today behind China and the US… So, we believe, particularly now that the 4G infrastructure is going in the country and is continuing to be expanded, there’s a huge opportunity for Apple there. So that and the demographics of the country is why we’re putting so much energy there.”
To another question from Jim Suva of Citigroup Global Markets on Apple’s road map for India and whether it needed to work more with the government to set up stores and production units as well as to improve sales further, Cook agreed that the company was “underpenetrated there”. The company is “bringing all the things that we brought to bear in other markets that we’ve eventually done well in, and that’s from channel to stores to our ecosystem and so forth,” Cook added. He referred to India’s growth rates in relation to iPhone sales as “really good by most people’s expectations”, but said, “maybe not mine as much”. Cook’s meeting with Prime Minister Narendra Modi last year in New Delhi had centred on the promise that India market held, and the country has delivered in terms of consumer response.
The company is bringing all the things to the India market, Cook said. But when and how are among the questions that have kept industry watchers glued to the scene. Business Standard spoke to people close to the company and analysts to piece things together on Apple’s likely India road map for setting up fully-owned stores, starting manufacturing in the country, stepping up assembly lines, selling Apple-certified pre-owned phones and opting for the e-commerce route.
Store plan can wait
Even as Apple had proposed early in 2016 to set up fully-owned stores in India, 30 per cent local sourcing norm as part of the single brand retail foreign direct investment policy (FDI) policy has kept the plan on hold. A senior official at the Department of Industrial Policy and Promotion (DIPP) told this newspaper recently, “There’s been no retail proposal from Apple for a long time.”
Sources in the know said that the company was clear that compliance with the sourcing clause was not feasible. Case-to-case approval for niche cutting-edge companies was among the solutions devised by bureaucrats so that a company such as Apple could be spared from mandatory local sourcing. But definition of cutting-edge has been in the making for at least a year. Even as the government subsequently decided that a company manufacturing substantially in India would not have to comply with sourcing norms for owning retail outlets, the mathematics is still not working out for Apple, a source said.
There’s no show-stopper time frame for opening stores in India, a person familiar with the workings of the tech major said. Currently, there are franchisee stores in the country. “Apple could wait for long, till it has the right environment to set up stores as these are iconic destinations the world over. Typically, the company would not look at more than two to three stores in five to 10 years.” He cited global numbers to explain that Apple has no flagship store in many countries, including in Singapore. Dubai recently opened one. There are 495 stores in 18 countries, with maximum in the US, followed by Canada. China is high in the pecking order, too, with 40 stores, but Belgium, Mexico, Macau have only one each; the UAE, Netherlands and Sweden have three each; Turkey and Brazil have two each.

ADB sees India growing 7.4% in 2017-18, says GST, bankruptcy law big positives

Yokohama: The Indian economy will grow by 7.4 per cent in FY 2017-18 and by 7.6 per cent in FY 2018-19 on the back of an improving business environment created by reforms like the Goods and Services Tax (GST) and the new bankruptcy law, stated Mr Yasuyuki Sawada, Chief Economist, Asian Development Bank (ADB). A growth of more than 7 per cent is high compared to other emerging economies, including China. He further stated that the impact of demonetisation was short-term, and the Indian economy's growth will accelerate over the medium-term. He was also of the opinion that the appreciation of rupee against the dollar will not have a negative impact on exports and that India's overall export performance is positive.

World's highest railway bridge is coming up over the Chenab in J&K

New Delhi: The Ministry of Railways is working on building the world’s highest railway bridge over the Chenab river in Jammu and Kashmir at a cost of around Rs 1,100 crore (US$ 171.5 million), which is expected to be 359 meters (m) above the river bed, 35 m taller than the Eiffel Tower. The construction of 1.3-kilometer(km)-long bridge is expected to use over 24,000 tonnes of steel, and is expected to be completed by 2019. The bridge is designed to withstand wind speeds of up to 260 km per hour, and explosion as it will be made of thick special blast-proof steel. The bridge would connect the 111 km stretch between Katra and Banihal, which is part of the Udhampur- Srinagar-Baramulla rail link project, and would likely become a tourist attraction in the region.

Cabinet approves National Steel Policy 2017

New Delhi: The Union Cabinet chaired by the Prime Minister Shri Narendra Modi has given its approval for National Steel Policy (NSP) 2017.
The new Steel Policy enshrines the long term vision of the Government to give impetus to the steel sector. It seeks to enhance domestic steel consumption and ensure high quality steel production and create a technologically advanced and globally competitive steel industry.
Key features of the NSP 2017:
1. Create self-sufficiency in steel production by providing policy support & guidance to private manufacturers, MSME steel producers, CPSEs
2. Encourage adequate capacity additions,
3. Development of globally competitive steel manufacturing capabilities,
4. Cost-efficient production
5. Domestic availability of iron ore, coking coal & natural gas,
6. Facilitating foreign investment
7. Asset acquisitions of raw materials &
8. Enhancing the domestic steel demand.
The policy projects crude steel capacity of 300 million tonnes (MT), production of 255 MT and a robust finished steel per capita consumption of 158 Kgs by 2030 - 31, as against the current consumption of 61 Kgs. The policy also envisages to domestically meet the entire demand of high grade automotive steel, electrical steel, special steels and alloys for strategic applications and increase domestic availability of washed coking coal so as to reduce import dependence on coking coal from about 85% to around 65% by 2030-31.
Some highlights of New Steel Policy
The Indian steel sector has grown rapidly over the past few years and presently it is the third largest steel producer globally, contributing to about 2% of the country's GDP. India has also crossed 100 MT mark for production for sale in 2016-17.
The New Steel Policy, 2017 aspires to achieve 300MT of steel-making capacity by 2030. This would translate into additional investment of Rs. 10 lakh Crore by 2030-31.
The Policy seeks to increase consumption of steel and major segments are infrastructure, automobiles and housing. New Steel Policy seeks to increase per capita steel consumption to the level of 160 Kgs by 2030 from existing level of around 60 Kg.
Potential of MSME steel sector has been recognised. Policy stipulates that adoption of energy efficient technologies in the MSME steel sector will be encouraged to improve the overall productivity & reduce energy intensity.
Steel Ministry will facilitate R&D in the sector through the establishment of Steel Research and Technology Mission of India (SRTMI). The initiative is aimed to spearhead R&D of national importance in iron & steel sector utilizing tripartite synergy amongst industry, national R&D laboratories and academic institutes.
Ministry through policy measures will ensure availability of raw materials like Iron ore, Coking coal and non-coking coal, Natural gas etc. at competitive rates.
With the roll out of the National Steel Policy-2017, it is envisaged that the industry will be steered in creating an environment for promoting domestic steel and thereby ensuring a scenario where production meets the anticipated pace of growth in consumption, through a technologically advanced and globally competitive steel industry. This will be facilitated by Ministry of Steel, in coordination with relevant Ministries, as may be required.
Background:
Steel is one of the most important products in the modern world and forms the backbone to any industrial economy. India being one of the fastest growing economies in the world, and steel finding its extensive application right from construction, infrastructure, power, aerospace and industrial machinery to consumer products, the sector is of strategic importance to the country. The Indian steel sector has grown exponentially over the past few years to be the third largest producer of steel globally, contributing to about 2% of the country's GDP and employing about 5 lakh people directly and about 20 lakh people indirectly.
Untapped potential with a strong policy support becomes the ideal platform for growth. Owing to the strategic importance of the sector along with the need to have a robust and restructured policy in present scenario, the new NSP, 2017 became imminent. Though, National Steel Policy 2005 (NSP 2005) sought to indicate ways and means of consolidating the gains flowing out of the then economic order and charted out a road map for sustained and efficient growth of the Indian steel industry, it required adaptation in view of the recent developments unfolding in India and also worldwide, both on the demand and supply sides of the steel market.

Airtel plans ~19,000-cr capex this year

New Delhi: Despite a 72 per cent decline in net profit for the March quarter, telecom major Bharti Airtel said it was committing a capital expenditure of $3 billion (Rs 19,300 crore) this financial year, of which $500 million would be spent in Africa.
Nilanjan Roy, its global chief financial officer, said so in a conference call after announcing its quarterly results. The share price closed on Wednesday at Rs 372.70, about eight per cent higher, despite the 72 per cent fall in the quarterly net profit to Rs 373.4 crore. During the day, the stock had soared 10 per cent to Rs 380.05.
Analysts feel the rally was mainly on account of the belief that the Africa region would do well in the future. In constant currency terms, revenues in its African operations grew by 2.6 per cent over a year. Data revenue at $157 million grew by 14.5 per cent on a year before, with a rise in the data customer base by 19.3 per cent and traffic by 77 per cent.
Consolidated revenue was down 8.8 per cent over a year during the quarter, at Rs 21,935 crore. The company bore the brunt of of Reliance Jio’s aggressive pricing strategy. The latter had launched its free voice and data plan in September last year, and then extended it till end-March. It currently still offers free voice services, while its data rates are lower than those of the incumbents.
The others in the sector allege Jio's predatory pricing has hit the sector's financial health. The telecom industry owes about Rs 4.6 lakh crore to financial institutions.
Bharti Airtel’s average revenue per user (Arpu) declined 18 per cent to Rs 158 in the period, against Rs 194 in the same period of the previous financial year. Data continued to cannibalise voice, as seen in the decline of the voice Arpu to Rs 114 from Rs 138 in the earlier March quarter. The data Arpu at Rs 162 was higher but 17 per cent less than the Rs 196 in January-March 2016.
The company made two key strategic announcements in the quarter, the acquisition of Telenor India and agreement with Tikona Digital Networks to acquire its fourth-generation technology (4G) business.
The firm stands to gain on the spectrum front from both deals. Acquisition of Telenor India would provide 43.4 MHz of additional airwaves in seven telecom circles — Andhra Pradesh, Bihar, Maharashtra, Gujarat, UP (East), UP (West) and Assam. The agreement with Tikona means 100 MHz spectrum in the 2,300 MHz band and 350 sites in five circles.

Cars, 2-wheelers drive automobile growth to 7%

New Delhi: Domestic passenger vehicle sales surged 14.68 per cent last month helped by strong growth of market leader Maruti Suzuki and others like Toyota, Honda and Tata Motors.
According to data released by the Society of Indian Automobile Manufacturers (SIAM), Vehicle sales across categories registered an increase of 6.82 per cent to 20,30,476 from 19,00,848 units in April 2016.
Domestic passenger vehicles sales rose to 2,77,602 in April from 2,42,060 in the same month last year.
In a reversal, cars posted higher sales growth than utility vehicles. Domestic car sales posted their biggest monthly growth in one-and-a-half years at 17.36 per cent to 1,90,788. Utility vehicles grew by nearly 14 per cent last month.
"Factors like commissioning of new manufacturing plants and new model launches led to strong growth in the passenger vehicle segment during the month," said Sugato Sen, deputy director-general, SIAM.
He said the segment received a push with the commencement of operations at Suzuki’s Gujarat plant, which helped Maruti increase its sales by over 23 per cent last month. The Gujarat plant of Suzuki will contribute 150,000 vehicles to Maruti in 2017-18. Maruti sold 144,081 vehicles last month in the domestic market.
Sales of two-wheelers rose by more than 7 per cent in the domestic market last month to 16,74,796 from 15,60,308 in April 2016. Motorcycle sales were flat at 10,29,972 against 10,24,895 a year earlier. Scooters surged by 25 per cent to 586,886.
"Scooters are doing pretty well. Even in rural areas, people are increasingly going in for scooters," Sen said.
Growth in passenger vehicles and two-wheelers offset the declines in other segments. Sales of commercial vehicles were down 22.93 per cent to 41,490 in April, SIAM said. This was the steepest decline since January 2009, when volumes had contracted by 67 per cent.
Sales of medium and heavy commercial vehicles were most affected by the Supreme Court order on emission norms and their April volumes declined 55 per cent. Light commercial vehicle sales grew close to 2 per cent.
"After-effects of demonetisation still remain in the segment. Besides, there was pre-buying in February and March due to the coming into force of BS IV emission norms from April," Sen said.
Abdul Majeed, partner at Price Waterhouse, said April was a good start for the Indian automotive industry. “The pent-up demand is driving vehicle sales and the impact of demonetisation is wearing off. However, there are a few challenges ahead such as a smooth implementation of the GST and the monsoon,” he said.

India set for record foodgrain output

New Delhi: India is set to see the highest foodgrain production this crop year, according to the government’s third advanced estimate released on Tuesday.
Boosted by normal southwest monsoon — a first in two years — foodgrain production in the 2016-17 crop year, which ends in June, would be 273.4 million tonnes, almost nine per cent more than that of the previous year.
For many farmers, though, a bumper harvest isn’t good news, as they have been forced to sell their produce, particularly pulses, dirt cheap. Production of grains, according to the second estimate released in February, would be around 272 million tonnes.
Wheat production was projected at 96.6 million tonnes. Bumper rabi and kharif harvests in 2016-17 should help ease inflation worries for the government. Benign food inflation would also give the Reserve Bank of India (RBI) headroom to hold on to interest rates, unless monsoon projections for 2017 are not favourable.
“Largest-ever foodgrain production this year will keep food prices subdued till the next harvest,” Madan Sabnavis, chief economist CARE Ratings, told Business Standard.
“Prices of wheat, rice and pulses are expected to remain weak due to surplus crop, unless, of course, the 2017 southwest monsoon does not match projections.” After Tuesday’s estimate, he said, it looked all the more likely that the RBI would hold interest rates in the next review, in June, unless monsoon shocks. The India Meteorological Department has projected normal monsoon for 2017. But with chances of the dreaded El Niño rearing its head, many global weather forecasting models have been confusing signals. The agriculture ministry has in its estimate projected pulses output at a record 22.40 million tonnes, around 37 per cent more than last year’s.
Oilseeds output was projected at 32.52 million tonnes, around 7 million tonnes more than that of the previous year. Cotton production was projected at 32.57 million bales, around 8.5 per cent more, while sugarcane production was projected at 306 million tonnes, around 12 per cent less.
The 2016 southwest monsoon was the first normal monsoon after two back-to-back droughts in 2014 and 2015. The rains were good in almost 80 per cent of the country’s land mass.

Modi proposes model solar cities, bio-ethanol refineries

New Delhi: Prime Minister Narendra Modi asked the Union ministries on Tuesday to speed up infrastructure projects, including those in the renewable energy sector, to attain faster economic growth and generate jobs.
The focus assumes significance as fuel prices have shot up and Asia’s third-largest economy has recorded a slowdown with layoffs in various sectors after the government scrapped two high-value banknotes last November in a demonetisation drive to check illegal cash and corruption.
The government’s stats office, CSO, estimated economic growth to slide from 7.9% in 2015-16 to 7.1% in 2016-17. Analysts, however, predict a rebound as new cash inflow will revive demand and spur economic activity.
At his periodic review meeting, Modi proposed setting up of model cities, where power requirements are fulfilled solely by solar energy. He stressed the need to manufacture solar equipment to generate employment and derive maximum benefit from renewable energy.
Solar and wind tariffs have achieved grid parity, with rates well below Rs 4.0 per kilowatt-hour.
“A similar effort can be made to make certain localities kerosene-free,” the PMO quoted Modi as saying at the meeting with top officials from NITI Aayog, the government’s think-tank, and all infrastructure ministries.
The Prime Minister called for more emphasis to farm-based ethanol blending to check the country’s dependency on fossil fuel, and evolve mechanisms to help farmers benefit from the process that uses agricultural residues.
He said projects to build second-generation, bio-ethanol refineries should be expedited.
During a presentation, NITI Aayog CEO Amitabh Kant highlighted the progress in several sectors, including generation of renewable energy, affordable and rural housing.
The Pradhan Mantri Ujjwala Yojana has benefited almost 11 million households below the poverty line (BPL). The contribution of natural gas to the primary energy mix has risen and 81 urban centres are covered under the gas distribution network.
The rural electrification programme is proceeding swiftly, with more than 13,000 of 18,452 targeted villages getting electricity. The project is expected to be completed within its 1,000-day deadline.
Over 2.2 million BPL households got electricity in 2016-17, and more than 40 million LED bulbs were distributed during that period.
The inter-regional transmission capacity has significantly enhanced, with 41 gigawatts transmission capacity being added from May 2014 to April 2017.
The total renewable generation capacity has crossed 57 gigawatts, with an increase of 24.5% being registered in the past fiscal. The capacity addition in solar energy was the highest ever at 81% in the 2016-2017 financial year.
Under the Pradhan Mantri Awaas Yojana, progress has been achieved in rural areas. IT and space-based applications are being extensively used to monitor progress of the scheme. More than 3.2 million houses have been built during the 2016-17 fiscal.
The Prime Minister enquired about training imparted to masons, who were involved in the rural household scheme.
Seeking a consolidated approach to various schemes, such as electrification, IT networks and housing, he called for a focused approach on the 100 worst performing districts in each case.
He said future reviews should focus on problems at the district-level, so that the progress of poorly performing districts can be monitored in a better way.

US companies continue to bet big on India: USIBC

Washington: Companies in the USA continue to show high confidence on India, as both the countries have tremendous opportunities to work towards the digital transformation of the Indian economy, stated Mr John Chambers, Chairman, USIBC and Executive Chairman, CISCO. This will help to create employment, increase citizen engagement and change the lives of people both in the US and India. He further stated that US has partners in the Indian government who realise the need for digitisation in India. Mr Mukesh Aghi, President, USIBC, stated that American companies can help India in becoming a digital economy with India moving towards a cashless economy, creating smart cities and high growth of e-commerce. Mr Punit Renjen, Deloitte Global CEO and USIBC Board Member, stated that it is important to maintain strong bilateral ties between India and USA as it creates first-hand opportunities while both the countries are working towards digitalisation, economic growth and social progress.

India among top five markets: Twitter

New Delhi: From working on tools to take on trolls to making their product more appealing to the mass market, Twitter on Thursday said it was planning to attract a much larger user base in India even in areas where bandwidth was an issue.
Twitter also plans to go big on providing video content that, according to the company, works well with Indian consumers. The micro-blogging site has around 24 million active users in India.
For Twitter, last year was filled with issues ranging from high-profile exits to job cuts. Parminder Singh, managing director of West Asia and North Africa, and India head Rishi Jaitley were among the big names that left Twitter after differences with the management.
The company also cut down its global manpower by almost nine per cent. There have been reports of curbed growth, a shrinking user base and complaints of cyber-bullying and “trolling”. However, the company claimed it had come out strong and the India business was one of the biggest in its portfolio.
“India, which is one of the top five markets, is also one of the fastest growing markets for Twitter and we believe that it is the best time for growth in the country as more people join the platform, including celebrities,” said Twitter’s Southeast Asia and India Managing Director Maya Hari. Keeping India’s problems with Internet connectivity in mind, Twitter on Thursday launched a lighter version of its app that would work faster in entry level smartphones and in areas where connectivity was poor.
According to the company, the Twitter Lite app will save at least 70 per cent of data costs and will be 30 per cent faster. All this has been conceptualised keeping India in mind and will be taken to other countries where there are similar bandwidth issues. Twitter Lite will be available in six languages: Marathi, Gujarati, Kannada, Bengali, Tamil and Hindi.
Hari said Twitter Lite, increased usage in Indian languages, and enhanced video content would help the platform expand its user base in Tier-II and Tier-III towns.
With live streaming of sports, events, news and entertainment, Twitter plans to go big on providing video content.
The company has also launched a slew of tools to take on “trolls”. “Safety is of the utmost priority and we have launched tools to protect users,” Hari added.