Indian Economic Status Newsletter June 2013 - Find Indian Economic News, IIP Growth % (Index of Industrial Production) Graph, WPI % Growth (Wholesale Price Index) Graph, Corporate Headlines and Who’s Expanding in India

1. India Newsletter
June, 2013
FROM THE EDITORS DESK
Is growth cycle turning for India?
Rohit Chaturvedi
Founder and MD
Expand in India
India has seen a spate of challenges over the last few years- scams everywhere from
Commonwealth games to Coalgate to Telecom, stalling of ports, townships, mines,
Central Government’s retrospective tax amendments to policy paralysis, declining
exports, rising trade deficit, falling currency, decelerating economy, downgrade threat
from rating agencies and so on.
It’s difficult to say that these challenges are behind us .A few things however look to be
improving - dropping global commodity prices like oil & crude oil products, coal , rubber
& others like gold specifically would do well to assist India (which is predominantly an
importer of these products) , falling domestic inflation and thereby expectation of easing
of interest rates going ahead will give some philip to consumer demand, Cabinet
Committee on Investment (CCI) fast tracking some major infrastructure projects which
could boost investment sentiment as well as industrial demand, thrust on exports (though
the global growth situation is weak), and some policy actions to reduce oil subsidy ,
reduction in fiscal deficit and other efforts to woo foreign investments. The big hangover
for the next one year remains the Central elections in 2014. It’s anybody’s guess as to
what will happen at a specific level, but at a broad level coalition is here to say and the
coalition politics will continue to play its part in India’s future story. What remains to be
seen is that, are there signs that we are becoming better at running a coalition
government.
Despite the above challenges, most experts are of the view that the worst seems to be
behind for India for this economic cycle and going forward situation should improve.
2013-14 may be marked with an uptick in growth trend as the macro data seems to be
falling in place to enable around 6% GDP growth for the year.
Some small movement continue to happen on the ground in terms of divestments and
consolidation (highly leveraged corporate) , capacity expansion plans (Consumer goods
companies specifically) and Global firms entering/expanding in India (in sectors like
Healthcare, Leisure, , Security, Renewable Energy specifically) For other companies eying
India (who are convinced about its long term story) this could be a good time to bring
India back on their radar screen , before the economy again gathers momentum leading
to crowding out of great partners, right priced assets, relatively weaker competition and
settling down time .
ECONOMIC AND POLITICAL NEWS
Index of Industrial Production- IIP
As per Quick Estimates on the Index of Industrial
Production (IIP), industrial growth in March 2013
improved to 2.5% yoy. It compares positively to a
marginal 0.6% yoy growth in February 2013 and 2.8% yoy
de-growth in March 2012 owing to growth in consumer
non-durables and capital goods segments. Overall during
FY2013, the index decelerated and reported a shallow
1.0% yoy growth as compared to 2.9% yoy growth in
FY2012 and a more robust 8.2% yoy growth in FY2011.
Wholesale Price Index- WPI
Wholesale Price Index (WPI) inflation for April 2013
moderated for the third straight month to 4.89%, a 41-
month low as compared to 5.96% in the previous month
and 7.50% in April 2012. The deceleration is broad-based
since inflation across primary articles, fuel and
manufactured articles has moderated.
Indian economy to grow at 6.1% in FY2014: World
Bank
S&P warns India of rating downgrade, retains
negative outlook
Govt sets $325bn exports target for 2013-14
Trade deficit widens to USD17.8bn in April 2013
GST rollout only after next govt. comes to power
Commerce and Industry Minister Anand Sharma has
sought from Japan more market access for Indian
exporters in sectors such as agriculture, marine and
pharmaceutical products. India invites investment
from Japan in infra, electronics
India, China agree to take steps to address trade
imbalance
Ministry of External Affairs (MEA) to draw roadmap
for Missions to push exports
The Centre has embarked on the ambitious e-India
project with an outlay of Rs 20,000 crore (USD 3.6 Bln)
and created SPV Bharat Broadband to connect of
250,000 gram panchayats through broadband.
India's GDP reduced 4.8% in the fourth quarter from
4.7% in the third quarter of 2012-13. The Indian
economy touched a decade-low GDP growth rate of 5%
in 2012-13, which is in line with the advanced estimates.

2. CORPORATE NEWS
RIL-BP submit plan to enhance KG-D6 gas
output
Novartis appoints Citigroup as broker for
Indian co share sale
BHEL to set up a power equipment
fabrication plant in Maharashtra
International Finance Corporation (IFC) is
investing $25 million (Rs 134 crore) in
Chennai-headquartered Ravindranath GE
Medical Associates Pvt. Ltd (RGE), which
operates a chain of hospitals in Chennai,
Hyderabad, Bangalore and Mumbai under
the Global Hospitals brand.
Cairn India to spend $3bn on oil exploration
in 3 yrs
JSW Steel eyeing coal mines in Africa, US
and Canada
GSPC to spend `2,000cr (nearly 350 mln
USD) on gas terminal at KG-Basin
The Asian Development Bank announced its
first equity investment in India’s private
sector renewable power generation. It has
decided to invest $30 million in Hyderabad-
based NSL Renewable Power Private.
WHO’S EXPANDING IN INDIA
Automotive lubricant maker Valvoline
Cummins is setting up new
manufacturing and packaging facility the
facility, which has come up at an
investment of $30 million, will produce
Valvoline automotive lubricants for the
consumer, industrial and heavy duty
markets. The plant has an initial
production capacity of 120 million litres
per year and it can be expanded up to
150 million litres.
Renault SA and Nissan Motor Co. are
expanding the production capacity at
their joint-venture factory in India by a
third this year as part of their strategy to
utilize the South Asian country as a global
manufacturing hub and also to tap
potential demand in the local market
WHO’S EXPANDING IN INDIA
Top German luxury car maker BMW India is quite keen on expanding its
operations across a wide variety of cities in the country. For this purpose the
company has created a ‘mobile showroom’ for the city of Kottayam in Kerala,
which has been identified as a strong emerging market among Tier II cities in this
State. The mobile showroom is a weather-proof and air-conditioned structure,
appearing as a replica of BMW’s luxurious dealerships in different metro cities.
Triumph Motorcycles have been eying the Indian market since they presented
their bikes at the 2012 Auto Expo. Triumph Motorcycles have replied that the
Indian entry would happen at the end of the third quarter of 2013.
Electrical goods company Havells is planning to increase its presence across Tier
II and Tier III locations in Tamil Nadu. Havells is looking to enhance its presence
to all the 110 towns by appointing 60 more dealers in addition to the 400 odd
dealer/distributors in the state.
The Indian subsidiary of Swedish industrial machining tools maker Seco Tools AB
is setting up an additional manufacturing facility adjoining its existing plant in
Pune to double its present production capacity. It has also shifted its Asia-Pacific
headquarters to India.
Honda Motorcycle opens third plant in India
5.3
6.2
9.5
3.7 3.4
2.5
-5
6
2.7
1.1
4.1
-3.5
-1.3
2.5
-2
0.2
2.3
-0.4
8.3
-0.6 -0.5
2.4
0.5
2.5
-6
-4
-2
0
2
4
6
8
10
12
IIP GROWTH % (INDEX OF INDUSTRIAL PRODUCTION)
6.9
7.4
6.9 7.2
7.6 7.6 7.5
8 8.1
7.3 7.3 7.2
6.6 6.8
6
4.9
JAN'12 FEB'12 MAR'12 APR'12 MAY'12 JUNE'12 JULY'12 AUG'12 SEP'12 OCT'12 NOV'12 DEC'12 JAN'13 FEB'13 March, 13 April, 13
WPI % GROWTH (WHOLESALE PRICE INDEX)

3. WHO’S EXPANDING IN INDIA
Sandvik AB’s subsidiary Sandvik Asia is making
investments in India-specific manufacturing and R&D. In
manufacturing (at Chakan near Pune), fresh investments
are being made for new products meant for the domestic
market. For the R&D Bangalore centre, they have
planned major expansion. Some 250 more engineers
would be added in the next three years for development
of locally applicable products.
Reliance Industries Limited (RIL) is gearing up to enter
the defense space of India by investing and signing new
deals with global market players to procure offset
management of defense equipments. In order to come
up with new strategies in the defense play, RIL is
planning to invest about $1 billion in the aerospace field
over the next three years.
Cement makers are expanding capacity despite a glut
because they anticipate an increase in demand from
construction and infrastructure projects ahead of
national election, to be held next year. Expansion plans
worth Rs. 8,522 crore (nearly USD 1.5bln) have been
announced since the beginning of 2013, with France’s
Lafarge being the latest.
ATLAS ELEKTRONIK has founded its subsidiary ATLAS
ELEKTRONIK INDIA Pvt Ltd with headquarters in New
Delhi. ATLAS ELEKTRONIK INDIA Pvt Ltd will deal with
market research, analysis, supply chain management and
provide technical and logistical support to customers and
to the German parent company.
Qatar National Bank (QNB) will start operations in India
in the third quarter of this year, expanding its reach to
Asia's third-largest economy.
Satellite navigation provider Garmin Corporation is
betting big on the Indian PND (personal navigation
device) market and plans expansion in terms of
manpower.
NTL Lemnis India Private Limited, a joint venture
company of NTL Electronics India and Netherlands based
Lemnis Lighting is keen to invest in Gujarat in future. The
company has recently started its sales office in the state.
The Indian division of German organizer Messe Frankfurt
has further extended its event portfolio in the Indian
market with the acquisition of wastewater and recycling
expo, Watertech in Gujarat. The organizer has also taken
over Pollutech, Wastetech and Cleantech from
Exhiference Media, which are held concurrently with
Watertech.
WHO’S EXPANDING IN INDIA
The newly formed AirAsia India, the Indian arm of
Malaysia's low cost carrier AirAsia will buy 50 more
planes as part of its aggressive expansion strategy in
India
Nominum, a provider of network-based service delivery
platform for mobile operators, is set to expand in India.
UK-based healthcare services firm Bourn Hall
International is investing $100 million (around Rs 540
crore) in its Indian subsidiary to finance an expansion
plan to set up 18 new fertility clinics in India by the end
of FY16. Gems and jewellery exports fall 9% in FY2013
Life Healthcare, South Africa’s second-largest private-
hospital owner by market value will seek expansion
opportunities in India and Africa to respond to slower
profit growth.
Over a year after its joint venture with DLF ended, Hilton
has firmed up its expansion plans for India, with 21 new
hotels planned in the next five years across five brands.
The hospitality chain is also planning to bring its luxury
brand Waldorf Astoria to India.
Worldhotels continues its expansion in India with The
Galaxy Hotel & Spa joining its First Class Collection.
Dubai-based Rotana Hotels may announce its first
project in a few months as part of its expansion plans in
India and likely to invest USD 3-5 million over the next
few years.
Amid a rising number of international legal disputes
involving entities and businesses in India coming to fore,
a number of 'litigation funds' from abroad are sensing a
niche business opportunity for them in India.
Several foreign companies, including Taiwanese firm
Tung Ling Industries and German multi brand retailer
Prowl, are planning to enter the Indian kidswear market
due to the increasing demand for children’s clothing in
the country.
With money flowing in from Etihad Airways, which
bought a 24 percent stake at 32 percent premium to the
market price, Jet Airways seems all set for a massive
fleet expansion.

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