Economy
- Foreign equity -FDI
outflow -Banking - IT
industry- Telecom- Manufacturing-
Biotechnology -Made
in India
Economy
The Indian
economy grew 9.4% in 2006-07, the fastest in 18 years,
on the back of an impressive performance by services and
the manufacturing sector. Rival China grew higher at 10.7%
in 2006.
Services posted a healthy 11% clip, up from 9.8% the previous
year. The manufacturing sector grew 12.3% against 9.1%
in 2005-06, data released by the Central Statistical Organisation
(CSO) on Thursday showed. The agricultural sector, however,
grew only 2.7% in 2006-07, from over 6% in the previous
fiscal. Rising interest rates pulled down the construction
sector growth rate to 10.7% from 14.2% in 2005-06.
The scorching pace of GDP growth has catapulted India
into the elite trillion-dollar club of a dozen economies.
The GDP value at market prices stood at Rs 41,25,724 crore,
equivalent to nearly $101 trillion at the current exchange
rate. The market capitalisation of Indian stocks also
crossed the trillion-dollar mark three days ago. Reacting
to the strong GDP numbers, the benchmark Sensex jumped
133 points to close at 14,544 on Thursday. -
ibef -Financial Times
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Foreign equity
Huge share
offerings may lead to record inflow in 2007. Foreign inflows
into the Indian equity markets are expected to reach a
record high of over $15 billion in the 2007 calendar year
owing to a line-up of multi-billion-dollar share offerings.
The list includes the mega initial public offer by real-estate
major DLF Ltd (Rs 9,625 crore) and big follow-on public
issues by two of India’s largest banks, State Bank
of India and ICICI Bank. ibef- Business
Standard
Indian companies raised $7.23 billion from the domestic
capital markets in 2006, making the country the eighth
largest issuer of equity capital in the world. According
to the latest Ernst & Young report. Of the total funds
raised in India, energy companies accounted for half the
funds. Reliance Petroleum’s $1.8-billion issue ranked
number 17 in the top 20 IPOs in the world, the report
said. Even in the current year, Indian IPOs continue to
surge in numbers, with mega issues like DLF and ICICI
Bank hitting the market. - ibef- The Economic
Times
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FDI
outflow
Creating perhaps a record of sorts, the country’s
total outbound foreign direct investment (FDI) in 2007
may exceed the target of $30 billion for inbound FDI in
fiscal 2007-08, a study said. “For Indian corporate
sector, 2006 was a watershed year in terms of mergers
and acquisitions as Indian companies went shopping across
the globe. The total outbound deals, which were valued
at $4.3 billion in 2005, crossed $15 billion-mark in the
following year and it could well breach the $35-billion
level this year,” the report by Ficci and Ernst
& Young said. The report on ‘Direct investments
in the US by Indian enterprises’ also revealed that
Indian companies invested over $2 billion in 2006-07 in
48 deals with the US counterparts.
“IT and ITeS have emerged as the front-runners in
outbound investment from India to the US, accounting for
48% of the total 48 deals worth over $2 billion in 2006-07,”
the report said. - ibef -Financial Times
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Banking
The booming
consumer finance space and the growing opportunities in
corporate finance is forcing foreign banks to set shop
in India. The Australian banks have a particular interest
in India on the back of the growing trade relations between
the two countries and corporate flows. After Macquarie,
the newest entrant is the Australian-based Westpac Institutional
Bank. Westpac has opened a representative office in Mumbai
after getting a license within three months. The bank
has an alliance with Standard Chartered Bank (SCB), India.
The UK-based bank, Barclays PLC, launched its Indian retail
operations. The various products the bank offers in the
initial period include card services, personal loans,
business loans and premier investment services. -
ibef
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IT
industry
The Indian
information technology (IT) industry crossed the $50 billion
mark in 2006-07. Dataquest’s annual “DQ Top
20” survey of the Indian IT industry revealed that
the IT industry recorded a growth of 32 per cent in rupee
terms and was a little shy of 30 per cent growth in dollar
terms during the year. With a growth of 35 per cent, IT
exports continued to hold the majority of the revenue
share by contributing Rs 1,53,744 crore to the total revenue
of Rs 2,26,879 crore. The domestic market continued its
three-year average growth rate of 27.2 per cent by contributing
Rs 73,135 crore, accounting for the rest of the revenue
pie. Catalysed by the emerging domestic BPO market, IT
enabled services (ITES) reported a growth of 48 per cent
to touch Rs 5,400 crore. The domestic IT services market
reached Rs 20,948 crore by reporting a 30 per cent growth.
Packaged software industry witnessed a 19 per cent growth
to touch Rs 8,053 crore.
The top 20
IT players recorded the highest growth rate in the millennium
by recording a 44.3 per cent growth rate. With the top
three players, Tata Consultancy Services (TCS), Infosys
and Wipro, bagging several large deals and expanding their
consultancy business, the top 20 companies accounted for
almost 77 per cent of the total software services exports.
- ibef- Business Standard
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Telecom
A Telecom
Regulatory Authority of India statement said that the
Telecom sector continues to grow with an addition of 5.15
million wireless subscribers in April 2007, taking the
total telephone users to 212.02 million and teledensity
to 18.74 per cent. In March, the total subscriber base
was 206.83 million while the teledensity was 18.31. The
industry added 3.53 million wireless subscribers during
the month.- ibef- Business Standard
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Manufacturing
The manufacturing
sector, with 80% weightage in the country’s industrial
production, grew a record 14.1% in March this year against
10.1% in March 2006. This is manufacturing’s highest
growth in over a decade. Growth has also doubled in 5
years —from 6% in 2002-03 to a record 12.3% in 2006-07.
The Commerce and Industry Minister Kamal Nath said that
it augurs well for the 11th Plan, which envisages growth
of 12% for the manufacturing sector. Quick estimates released
by the Central Statistical Organisation show that industrial
production grew 12.9% in March 2007 compared with 8.9%
in March 2006. The industrial growth during 2006-07 stood
at 11.3% compared with 8.2% registered in the previous
year – the highest since 1995-96.
The industries that performed excellently in March 2007
included wood-wood products and furniture and fixtures
(113.9% growth), metal products and parts, except machinery
and equipment (47.5%), food products (23.7%), basic metal
and alloy industries (23.3%) and cotton textiles (21.2%
growth). - ibef -Financial Times
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Biotechnology
The biotechnology
industry touched 2 billion dollar mark in revenue for
2006-07 from the 1 billion dollars in 2004-05. The industry
is on track to meet its target of five billion dollars
by 2010. According to the ABLE-Biospectrum survey the
biopharma sector touched 1.4 billion dollar mark while
the bio-services sector reached 250 million dollars. The
industry grew by 30 per cent, with bio-agri scoring the
highest growth rate at 50 per cent and largest acreage
of 9 million. Investments in the Indian biotechnology
sector crossed 580 million dollars in 2006-2007 with Bangalore
alone witnessing more than Rs 1000 crore outlay from companies
like Jubilant, AstraZeneca, GE Healthcare and Biocon.
The biotechnology companies spend 3 per cent of sales
on an average on R&D. The scenario in India is changing
rapidly with improving regulatory infrastructure, improving
standards of bio-manufacturing, increasing capabilities
in clinical development, increasing R&D collaborations
with US and European companies and increasing acceptance
of Indian clinical data by international bodies like USFDA/EMEA.
India was ranked number 3 (following Japan and Korea)in
the Asia Pacific region in Biotechnology by E&Y. -
ibef
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'Made
In India'
Global MNCs
like LG, Haier, Electrolux and Whirlpool are finalising
plans to sell ‘Made in India’ labels in mature
markets like Europe and the US. At present, sourcing from
India is largely limited to Saarc, the Middle East and
African nations. MNCs have already done their groundwork
to develop India as one their prime global production
hub, either by expanding capacity or through third-party
arrangements. The export product basket is also being
expanded in segments which have a developed domestic vendor
base.
Korean major
LG already sources optical disc drives and refrigerators
for Europe. The company intends to invest an additional
Rs 33 crore this year to develop its Pune facility as
an export hub. LG India is eyeing an export growth of
19% in 2007, which will contribute some Rs 950 crore to
its turnover. LG Electronics India’s exports to
Europe would be driven through high-end home appliances.
LG’s global rival, Samsung, too is developing a
new unit in Chennai to export all categories of home appliances
by 2009 pushing up exports to eastern Europe, Russia and
Saarc.
Chinese major
Haier wants to kick off its India sourcing this year.
While the company will initially source from a third-party
production arrangement, it has plans to build a greenfield
“export-oriented ” facility in India. It is
currently identifying the location for this unit.
Swedish firm
AB Electrolux has plans to source products from India
under an arrangement with Videocon. Whirlpool Corporation
of the US has recently set up a global design and development
centre in Pondicherry for its small appliances brand,
Kitchenaid. The company has also started sourcing of the
brand for Europe from its domestic unit, with plans to
make India its global production hub.
Global
consumer durable majors currently source products from
India across categories like CTV, refrigerators, washing
machines, mobile phones and computer peripherals. However,
sourcing is largely limited to the Middle East, CIS, the
Saarc nations and Africa.- ibef- The Economic
Times
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