India Economic News

India Economic News No. 5/09 Contents New Ambassador Of India To The Netherlands ......................................1 India Now Member Of Two Key Bodies: PM........................................1 ISRO Successfully Launches Earth Observation Satellite........................2 Industry Output To Expand 6.1% In 2008-09 ..............................................2 India Among Top 12 Manufacturers, Finds UNIDO .....................................3 Indian Banks Are Sound & Healthy 3 Indian Scientists Sequence Fish Genome .............................................4 Mandatory Registration Of Human Clinical Trials From June.................4 Pharma Companies Adhere To Ehs To Attract Global Business .............5 Contract Jobs To Keep Pharma Companies Healthy ..........................5 Pharma Exporters To Buck Trend, To Grow 16% In 2009-10 ..................6 India To Be J&J's Hub For LatePhase Drug Development ................6 Telecom Industry Marked The Highest Subscriber Addition ...........7 New Telecom Companies To Invest $2 Bn .................................................7 Auto Sector To Grow Further ..........8 Volkswagen Looking To Export From India .........................................9 Carrefour Plans India Operations Next Year...........................................9 Marks & Spencer And Reliance Retail JV To Open 35 More Stores ..9 Sikorsky Enters India; Delivers First Commercial Helicopter To Corporate India .........................10 Boeing Sets Up Research Centre In Bangalore........................................10 Eaton Plans To Make India Its Global R&D Hub .............................11 Qiagen To Expand Distribution Base In India ...................................11 Philips To Make India Hub For Medical Equipment Manufacturing .........................................................12 May, 2009 NEW AMBASSADOR OF INDIA TO THE NETHERLANDS H.E. Mr Manbir Singh, presented his credentials as the Ambassador of India to the Kingdom of the Netherlands to Her Majesty the Queen of the Netherlands on the 6th May, 2009. He is also concurrently accredited as the Permanent Representative of the Republic of India to the Organisation for the Prohibition of Chemical Weapons. A senior career diplomat, Mr. Singh has served in various Indian Missions abroad which include Toronto, Moscow, Geneva and Abu Dhabi. He has also held different senior positions at the Ministry of External Affairs in India including that of Chief of Protocol. Prior to his present appointment as Ambassador of India to the Netherlands he was the Ambassador of India to the Islamic Republic of Iran (20052009) and Ambassador of India to Hungary (2002-2005) with concurrent accreditation to Bosnia & Herzegovina and Slovenia. During his diplomatic career of over 33 years, he has handled a wide range of bilateral and multilateral assignments covering political, economic and cultural fields. INDIA NOW MEMBER OF TWO KEY BODIES: PM India is happy with the outcome of the G20 meet, Prime Minister, Dr. Manmohan Singh, said while briefing the media at the conclusion of the summit. In particular, the Prime Minister said, he was pleased about the fact that India will now be a member of the Financial Stability Forum as well as the Basle Committee on banking supervision, two key standard setting bodies. The Prime Minister said his bilateral meetings with US President Barack Obama and British Prime Minister Gordon Brown as well as interactions with leaders like Chinese President Mr. Hu Jintao, Russian President Mr. Medvedev and the Japanese Premier had been very useful. During talks, President Obama reportedly hailed India's "high stature" because it had "unleashed economic forces" and said a lot of it had to do with "the wisdom of Dr Singh". Asked at his press conference whether G20 was likely to replace G8 as the foremost group, Dr. Singh said if G20 could come up with credible answers to the world's problems, it could certainly emerge as a group that would count. (The Times of India: April 3, 2009) 2 ISRO SUCCESSFULLY LAUNCHES EARTH OBSERVATION SATELLITE The Indian Space Research Organization (ISRO) successfully launched its 14th rocket Polar Satellite Launch Vehicle (PSLV), an earth observation surveillance satellite, and the micro education satellite ANUSAT. The two satellites were successfully injected in orbit by an Indian rocket, which took off from the spaceport of Sriharikota, 190 kms from Chennai, on 20th April. This satellite will enhance ISRO’s capability for earth observation, especially during floods, cyclones, landslides and disaster management, said Mr. G Madhavan Nair, Chairman, ISRO. He described the launch as “a fantastic New Year gift for the country and that it is a good asset for the nation. Performance of the vehicle is precise and there is no deviation to the planned flight path or the spacecraft being delivered into the orbit.” He added that this was the 14th continuous successful launch of PSLV by Isro since 1994. There was only one failure out of the total 15, on its first developmental flight on September 20, 1993. Mr. Nair said the specialty of the rocket was that microwave India News imaging configuration had been installed for the first time. This would allow us to see through clouds, ground, water, vegetation and forest in day and night times. India has joined countries like Japan, Canada and Germany, which have similar radars. Immediately after their ejections, the Spacecraft Control Centre at Bangalore, with the help of ISTRAC network of stations at Bangalore, Lucknow, Mauritius and in other places, monitored the satellite’s health, he added. (Business Standard: April 21, 2009) INDUSTRY OUTPUT TO EXPAND 6.1% IN 2008-09 India’s industrial sector, which was affected the most due to the global economic crisis, is likely to grow at a faster rate in the current financial year because of strong domestic demand, the Centre for Monitoring Indian Economy (CMIE) said. The economic think tank predicts industrial output to expand by 6.1 per cent in 200910, compared with the expected 4.3 per cent growth in FY 08-09. “We expect the current recovery seen in cement, steel, automobile and in the core industries index to gather further momentum in the coming months,” CMIE said in its April edition of Economic Intelligence Services (EIS). Higher industrial output would help India’s Gross Domestic Production (GDP) to grow by 6.6 per cent, compared with estimated 6.5 per cent in just ended fiscal, it said. CMIE based its optimism on better industry performance on the fact that two issues — high inventory levels and liquidity problem — that plagued the industrial sector in three months ending December 2008 have eased. The industrial sector, which makes up nearly 28 per cent of India’s output, is the most affected from the global crisis because of falling global demand and also because of liquidity crunch that adversely affected their operations. Exports are expected to shrink for the sixth consecutive month in March 2009. CMIE said recovery in automobile and steel sectors indicate strong domestic demand. “Low inflation and low interest rates are expected to further strengthen this demand impetus,” said CMIE. (Business Standard: April 14, 2009) India News INDIA AMONG TOP 12 MANUFACTURERS, FINDS UNIDO United Nations Industrial Development Organization (UNIDO) found that the share of developing countries in the world’s manufacturing valueadded output has almost doubled in the last 18 years due to the shift of production units and outsourcing of services from developed nations. In the International Yearbook of Industrial Statistics 2009, UNIDO stated that developing countries produced almost 30% of world manufacturing value added (MVA) at the end of 2008 as compared to 16% in 1990. The per capita MVA doubled as early as 2006, while the industrialized world achieved merely 30% increase, it added. Among developing countries, those in Asia account for nearly ¾ of the total MVA. China alone produces 42% of MVA among all developing countries. For India, the growth rate of MVA output rose from 6.9% in 2000-2005 to 12.3% in 20052007. The MVA per capita grew 10.6 % in 2005-2007 compared to 5.2% in 2000-2005. The share of MVA in India’s gross domestic product (GDP) stood at 14.8% in 2006 compared to 13.8% in 2001, UNIDO stated in the yearbook. Manufacturing still contributes around 15% of GDP of the country. According to UNIDO analysis based on 2007 figures, India ranks among the top 12 producers of MVA. In textiles, the country is ranked fourth, after China, USA and Italy; 3 while in electrical machinery and apparatus it is ranked fifth. It holds sixth position in the basic metals category; seventh in chemicals and chemical products; 10th in leather, leather products, refined petroleum products and nuclear fuel; twelfth in machinery and equipment and motor vehicles. Among industrialized countries, Japan accounts for most MVA per capita, followed by Switzerland, Singapore, Ireland, Finland, Sweden, USA, Germany and Austria. Luxemburg, Republic of Korea, Denmark, Iceland, Canada, Belgium, United Kingdom, Norway, Netherlands, Italy and France come lower down the list. (The Financial Express: April 8, 2009) 'INDIAN BANKS ARE SOUND & HEALTHY' The capital adequacy ratio of Indian banks would continue to remain higher than the minimum regulatory requirement of 9% even if sticky loans, or NPAs, were to more than double. Addressing a seminar at the London Business School, RBI Deputy Governor Mr. Rakesh Mohan said that Indian banks were sound and healthy unlike their counterparts in the West. This was established by the stress test of Indian banks conducted by a governmentappointed committee on financial sector assessment in view of the ongoing economic crisis. The committee studied data of the end-September’ 08 period, when the financial crisis shot into the limelight. Even a recent study by ratings agency Crisil noted that while bank NPAs would rise in light of the slowdown, yet, given their healthy capitalization and cleaner balance sheets, the impact of rising delinquencies was likely to be within the stress tolerance levels. In India, according to Mr Mohan, the main fallout of the crisis was a sell-off by foreign institutional investors in domestic equity markets, leading to a sharp reduction in net capital inflows, which were also affected by slowing external demand. As a result of this, there were pressures in the foreign exchange market because of which the central bank had to sell dollars. (The Economic Times: April 27, 2009) 4 INDIAN SCIENTISTS SEQUENCE FISH GENOME Scientists at the Institute of Genomics and Integrative Biology (IGIB), a Council of Scientific and Industrial Research (CSIR) laboratory, have sequenced the genome of a fish, which, because of its similarity to the human genome, holds several clues to identifying genes that cause diseases in human beings. Mr. Vinod Scaria, IGIB scientist, said that the wild zebra fish strain analysis, was a first of its kind genome analysis in India. “To my knowledge, it’s the first time that a vertebrate’s whole genome has been analyzed in an Indian lab,” said Scaria. Globally, scientists have studied zebra fish genomes before, but Scaria said these India News were mostly hybrids cloned in labs. “Studying a wild type strain is vital to understand the complete genetic variation within a species. Without that it’s not possible to determine which genes are responsible for certain diseases,” he added. (livemint.com: April 14, 2009) MANDATORY REGISTRATION OF HUMAN CLINICAL TRIALS FROM JUNE In a move that will allow greater transparency in human clinical trials conducted in India, the registration of all such trials will be made mandatory starting in June. The trials will be registered on the Clinical Trials Registry-India (CTRI) website. Through the registry, information on all clinical trials taking place across the country in all areas pertaining to health—new drugs, treatments, therapies, surgical procedures and new medical devices—will become publicly available for the first time. ICMR’s National Institute of Medical Statistics set up the CTRI website. “Until now, clinical trials were being registered on the website of the Indian Council of Medical Research (ICMR) voluntarily. From January, it was made advisory. But by June, we will make it mandatory,” said Mr. Surinder Singh, Drugs Controller General of India (DCGI), whose office functions under the Health Ministry. After DCGI hands out preregistration approvals, the trial sponsor will have to provide on CTRI key information, including the nature of the clinical testing and the funding source, and name an ethics committee that will oversee the process before enrolling the first patient. The move has also been approved by the Drugs Technical Advisory Board (DTAB), the highest drug advisory body in India, and will be notified once the minutes of the DTAB meeting are approved, he said. An increasing number of clinical trials are being outsourced to India by drug companies based overseas. A March 2008 report by the Planning Commission estimated the value of clinical trials outsourced to India at around $300 million having increased by 65% from 2006. According to a December 2008 report by the task force of the Ministry of Commerce and Industry, India is emerging as a highly attractive location for multinational drug companies to conduct research and development (R&D), particularly clinical trials. “The consumption potential offered by more than one billion inhabitants, rising affluent customers and the changing lifestyles offer huge potential domestically for the sector,” the report said. As part of the move to regulate the manner in which clinical trials are conducted in India, several changes have also been proposed in the Drugs and Cosmetics Act, 1940. The regulatory changes include the introduction of a new schedule—Schedule Y1— in the Act along with a new set of rules. The new schedule will call for the registration of all contract CROs so that they follow a uniform, harmonized law throughout the country. (continued on next page) India News The draft guidelines for the registration of CROs have been framed and gone through DTAB. The minutes of the DTAB meeting are yet to be approved. “Once they get approved, these draft guidelines will be put up on the Web and we will invite comments and observations from other stakeholders. Then we will take it through another round of DTAB and get it notified,” said Mr. Singh. He explained that the proposal was taken up “because more and 5 more clinical trials are being undertaken and a number of CROs are involved in it”. India currently has 150 investigators—the personnel who conduct and oversee the trials—registered with the US Food and Drug Administration. PHARMA COMPANIES ADHERE TO EHS TO ATTRACT GLOBAL BUSINESS Globalization seems to be driving the Indian pharma industry towards better environmental, health and safety (EHS) performances. In order to elevate their global image, several Indian companies are complying with EHS standards to widen their horizons and attract international players. EHS auditing is becoming a global practice as organizations around the world develop audit standards. Big players across diverse industrial sectors especially from US and European countries are opting for EHS compliance as one of the key mandate in the process of manufacturing outsourcing. Most pharma companies like Ranbaxy Laboratories, Alembic, Dr Reddy's Laboratories, Cadila Pharmaceuticals, Zydus Cadila, Arch Pharmalabs and USV, among others have ensured a proper EHS management system and other environmental initiatives to attract additional business opportunities in the global arena. Companies with orientation of exports to the Western world are faced with no choice but to adhere to EHS. Besides customer audits, many Indian companies have been proactively seeking out ISO14000 and ISO18000 standards to signal EHS compliance. To be in sync with the green policy of the western world, Indian companies seem to be proactive in adopting a number of green initiatives, including a proper system. EHS management The EHS guidelines were created by the International Finance Corporation in 1998. The objective of EHS is to safeguard life, property and the environment. It enables industries to manage risk better, reduce cost and improve health & safety of people in general. Most global pharma companies use environmental, health and safety performance criteria to assess and select contract manufacturers, key API suppliers, contract research and development labs and even logistics centers. This is primarily done to protect the reputation of the global pharma companies while they outsource to India. (Business Standard: April 23, 2009) CONTRACT JOBS TO KEEP PHARMA COMPANIES HEALTHY Till last year, auto components were the fastest growing segment of the manufacturing universe. But the slowdown and the liquidity crisis have taken the sheen off auto components, with the focus now shifting to another segment: contract research and manufacturing services, popularly known as Crams. Most Indian pharmaceutical and life sciences companies have entered this sector which typically implies outsourcing of manufacturing by global pharma majors to Indian companies, and is expected to become a $2.46 billion industry by 2010, from its current size of $869 million, according to a KPMG-CII study. (continued on next page) 6 Ms. Swati Piramal, Vice Chairperson of Piramal Lifesciences, the R&D arm of Piramal Healthcare, says Crams would account for 3035% of Piramal Healthcare’s revenue in the next fiscal year. “Large pharma companies create value from R&D and marketing and not manufacturing. Manufacturing is not core to them, and considering that historically the sector has been conservative in outsourcing, the sector will have good growth in the medium to long term,” says Ms Piramal. Within the US, approximately 33% of the $40-45 billion that is spent annually on R&D has been outsourced, and is projected to increase to 41% or to $24 billion this year, a recent Yes Bank report said. “Over the next 20 years the Crams market will go on increasing year-on-year,” said Mr. Janmejay Vyas, founder & MD of Dishman Pharma. Mr Vyas’s study for industry association CII, also finds India ahead of China in the manufacturing, both in terms of the number of US FDA-approved plants, as well as the number of drug master file filings. The global Crams sector is projected to touch $64 billion by 2010, with India, already a leading manufacturer of active pharmaceutical ingredients (API) and intermediates. Indian companies can aim for a larger India News chunk of the market, prompting countries like China to join the bandwagon, say persons familiar with the trend. Lupin, another major player, also sees growth in the Crams space. The company’s Crams business, Novodigm, exports over 90% of its products to global pharmaceuticals and speciality chemical companies in European Union, North America and Japan. This core focus on custom synthesis and process research capabilities has helped Lupin double its sales in the past nine months. (The Economic Times: April 13, 2009) PHARMA EXPORTERS TO BUCK TREND, TO GROW 16% IN 2009-10 While most industrial sectors expect a negligible growth or contraction in exports during 2009-10, pharmaceutical exporters forecast a 16% increase, a survey by the Federation of Indian Chambers of Commerce and Industry (FICCI) revealed. While five of the 11 sectors surveyed expect no expansion in exports, three expect modest growth of up to 5%. In fact, 61% of the respondents felt that overseas sale of Indian goods would either contract or remain flat in the year. Apart from a dip in orders from the US and the EU, exporters say demand from others like West Asia, the Association of Southeast Asian Nations (Asean) and Japan is declining at a faster pace. Pharmaceutical exports from the country are expected to buck this trend and post a 13% increase in overseas sale, the survey said. However, the expected growth will be lower than the 23 per cent export growth in 2008-09. Sectors which are expected to witness an expansion in exports of more than 10 per cent include engineering goods, pharmaceuticals, rubber manufactured goods as well as glass and ceramics. (Business Standard: April 6, 2009) INDIA TO BE J&J'S HUB FOR LATE-PHASE DRUG DEVELOPMENT The $63.7 billion Johnson & Johnson (J&J) is planning to turn India into a global hub for late-phase development of its new drugs. In the late-phase, scientists decide on the form in which medicines can be best produced and packaged. This is the most tightly controlled part of drug development. “All the future new drugs and compounds from J&J will undergo the final preproduction testing in India,” said Mr. Paul Stoffels, global head, pharmaceutical R&D, J&J. The company is currently working on a number of drug molecules including a new compound for HIV, one for Hepatitis C, and (continued on next page) India News and two biologics for psoriasis, the later stage development for which will be done in India. With their drug pipelines drying up, global pharma companies are looking at offshoring drug discovery and development to developing countries like India and China and forming partnerships with firms, research organizations and academic institutes to improve innovation in the R&D process. J&J, for instance, opened its Asia R&D headquarters in Shanghai last week, which, along with the Mumbai centre, will “allow an end-to-end approach to drug development in Asia,” said Mr. Stoffels. J&J will also enter into partnerships with Indian pharma and biotech firms as well as academic institutions for discovery and co-development of new drugs. “J&J has a decentralized approach towards R&D, which results in faster time to market and greater information sharing. 7 India is a rich source of collaboration,” Mr. Stoffels added. The company will leverage the availability of the young and educated workforce in India, and its costeffectiveness in developing drugs, and will invest further in its new chemical entity analytical & pharmaceutical development centre in Mumbai. (The Financial Express: April 22, 2009) TELECOM INDUSTRY MARKED THE HIGHEST SUBSCRIBER ADDITION Buoyed by the entry of new telecom players in the GSM space, the Indian telecom industry clocked the highest subscriber addition in a month by adding 15.87 million subscribers in March, 2009. According to the latest data released by the Telecom Regulatory Authority of India, (Trai) while the wireless (GSM, CDMA and WLL (Fixed)) segment witnessed addition of 15.64 million users, the wireline segment saw an increase for the first time in two years by adding 230,000 to its subscriber base. At the end of March the wireless subscriber base stood at 391.76 million as compared to 376.12 million in the previous month of the year. The wireline subscriber base grew to 37.96 million as compared to 37.73 million in February 2009. On a year-on-year basis however the wireline segment witnessed a decline of 3.7 per cent from 39.42 million in March, 2008. This growth has lead to a further increase in the total telecom teledensity (number of people having a telephone connection per 100) to 36.98 per cent at the end of March 2009 from 35.65 per cent in February this year. The broadband penetration in the country is also witnessing a steady increase as the total broadband subscriber base crossed the 6 million mark to reach 6.22 million by the end of March, 2009 as compared to 5.85 million by the end of February 2009. (Business Standard: April 22, 2009) NEW TELECOM COMPANIES TO INVEST $2 BN Firming up their rollout plans, the new telecom licensees will invest around $2 billion in the next four months for the rollout of their services. The investment, necessitated by regulations, is significant as it comes at a time when other sectors are shying away from fresh investments due to the ongoing economic slowdown. “The new players will have to commence operations soon, as the conditions of spectrum allocation require a company to fulfill certain rollout obligations (depending on the circle of operations), including launching of services within a stipulated period. Now that the companies were awarded spectrum last year, the government is putting pressure on them to start operations,” Gartner Principal Research Analyst Mr. Naresh Singh said. (continued on next page) 8 The Department of Telecommunications (DoT) mandates that a company has to commence the rollout within six months of getting spectrum. It also states that phone firms have to cover 10 per cent of all district headquarters in the licensed area within one year and 50 per cent of the district headquarters in the licensed area within five years. Companies like Shyam Sistema (which has got spectrum for 22 circles), Unitech Wireless (21 circles), Datacom Solutions and Loop Telecom (both received spectrum for 20 circles), and Swan Telecom (14 circles) are gearing up to commence 2G operations in the next six months. STel (5 circles) and Tata Teleservices (which already has CDMA operations) are also getting ready for GSM operations. The telecom companies are also in talks for infrastructure sharing with tower companies. For example, Quipo Telecom Infrastructure will lease out towers for the rollout of Unitech Wireless’ entire circles and 40 per cent of Swan Telecom’s tower requirement. The infrastructure provider is also in advanced stages of discussions with STel and a couple of new players. “The requirement of towers is huge, as the companies are looking at commencing operations at the earliest. And due to the difficulties in raising funds, companies are increasingly opting for sharing of towers rather than setting up India News their own. There is an increased demand for leasing of towers,” said Quipo Telecom CEO Mr. Probal Ghosal said. “Absolutely true”, agreed Mr. Vikas Arora, Vice President (marketing) of GTL, another passive telecom infrastructure provider. The company, which already provides infrastructure to existing operators, is also in talks with new licensees. “It is always our belief that passive and ultimately active infrastructure will have to be shared to reduce composition of capex in the operators’ business plan. Furthermore, the ready availability of infrastructure will lead to quick market penetration,” Arora said. (Business Standard: April 13, 2009) AUTO SECTOR TO GROW FURTHER The domestic auto industry is expected to drive on positive track in the financial 2009-10, with moderate growth across the segments. According to industry body Society of Indian Automobile Manufacturers (Siam), while the passenger car segment is expected to grow at 3-5%, two wheeler sales can rise up to 5% in the current financial year, mainly on account of stimulus packages announced by the government. Commercial vehicle segment can witness 710% growth, Siam added. In 2008-09 also, the industry notched up a marginal 0.7% growth in sales, despite a global recession and tighter retail finance depressed demand at home. In 2007-08, auto industry grew at a negative 4.7%. Siam Director General Mr. Dilip Chenoy sought increased availability of finance and rationalization of state-level taxes to spur demand. "Interest rates need to be further lowered to ensure adequate finance availability," he said. Despite tough times, car sales managed to finish 2008-09 on a positive note with an increase of 1.3%, though it was the slowest growth rate since 200304. Mr. Chenoy said sales in 2009-10 will be fuelled by compact cars with demand coming from small towns. Two-wheeler sales were also in the positive territory, rising 2.6%. However, the slow rate of growth was due to a near-flat performance in the volumeheavy motorcycle category that rose just 1.1%, which was pulled down by poor retail financing as private banks withdrew from major markets fearing high delinquency. Double digit growth rates achieved by Hero Honda and Honda Motorcycle and Scooter India (HMSI) helped the twowheeler segment stay afloat. The commercial vehicle segment was badly hit in 200809 with sales dipping 21.6%. (continued on next page) India News While lauding the government's stimulus packages for reviving growth, including enhanced depreciation rates, Chenoy sought higher investments in infrastructure. "This is vital to bring the industry back to the positive," he said. And like commercial vehicles, three-wheeler numbers were also down as sales dipped 4% in the last financial year due to a major downturn in the goods carrier segment. Siam said numbers were likely to grow by 5-8% in 2009-10, aided by demand in semi-urban and rural areas. 9 Sales in the overseas markets brought cheers for the auto industry. Export of cars grew 57% in 2008-09 on higher offtake of small cars. Twowheeler exports also grew and crossed the million-mark on a growth of 22.5%. (The Times of India: April 9, 2009) VOLKSWAGEN LOOKING TO EXPORT FROM INDIA In line with other international automobile manufacturers such as Fiat and General Motors, Germany-based Volkswagen is looking at serving small markets in the Indian subcontinent from its manufacturing facility in the country. Currently, Fiat and General Motors export cars to countries such as Sri Lanka, Nepal and Bangladesh, from India. Although volumes are very low, the companies see potential market opening in the neighborhood. “If there are some opportunities why shouldn’t we go there?” Mr Joerg Mueller, President and Managing Director, Volkswagen Group India said. Volkswagen’s newly inaugurated plant in Chakan, which has a capacity of 110,000, is meant for producing high volume cars, including Skoda Fabia, Volkswagen Polo, and upcoming small car models from the VW group companies. Mr Mueller said that the immediate focus would be to serve the domestic market. The company will explore export opportunities from India at the later stage. Mr Ulrich Hackenberg, Member of the Board of Management of Volkswagen Brand, said the company would start production at the Chakan plant with 50 per cent localization and will increase it to 80 per cent by 2010. The company is in the process of identifying key suppliers in its effort to increase local content in its products. (The Hindu Business Line: March 31, 2009) CARREFOUR PLANS INDIA OPERATIONS NEXT YEAR Carrefour SA, Europe’s largest retailer, has said it may start wholesale operations in India by 2010 and has initiated discussions with more than 600 suppliers as part of the plan. Carrefour plans to set up its first wholesale cash & carry outlet in the National Capital Region, the retailer has said in a statement. Carrefour said the discussions with suppliers of food and nonfood items were intended to help tie-up the back-end part of the business. The retailer organized a partners’ meet to introduce the Carrefour Group and its project in India and to present the working specifications and mode of collaboration with suppliers. Business Standard: (April 16, 2009) MARKS & SPENCER AND RELIANCE RETAIL JV TO OPEN 35 MORE STORES years. It already has 15 stores in India. The 51:49 joint-venture between UK’s Marks and Spencer and Reliance Retail Ltd was formed in April 2008. (continued on next page) Marks & Spencer Reliance India is planning to open 35 more stores over the next five 10 Mr. Mark Ashman, CEO, Marks & Spencer Reliance India said, “We will open stores in tier 1 cities in the first two years and will extend to smaller cities beginning in the third year. The investment of £29 million which we announced last year will help us for our activities in the first two years.” In UK, Marks & Spencer operates in three categories namely apparel, home and food. In India, the company has not yet entered the food category. Explaining the way the joint venture operates between the two parties, Mr. Ashman said, “Marks & Spencer owns the brand and looks after products, store India News design and brand-related functions. Reliance Retail provides support in terms of helping to find out retail properties and other back end functions.” He added that personnel from both parties were equally involved in the day-to-day operations. (Hindustan Times: April 17, 2009) SIKORSKY ENTERS INDIA; DELIVERS FIRST COMMERCIAL HELICOPTER TO CORPORATE INDIA US-based Sikorsky Aircraft Corporation delivered its first commercial helicopter last week to a Mumbai based corporate signifying their formal entry in India. Sikorsky is a world leader in the design, manufacture and service of helicopters. It is a subsidiary of United Technologies Corp. The company is looking at making India the hub to cater to the requirements of the South Asian market after forming a joint venture with the Tata Group to manufacture helicopter cabins in India. “India is an important market for the company. We have orders from large corporate houses based in Delhi and Mumbai. We have already delivered one S-76C++ and another two will be delivered in April to Indian corporates,” Mr. A.J.S. Walia, Managing Director (India & South Asia), Sikorsky Aircraft Corporation said. Sirkorsky has been aggressively pursuing the Indian corporate sector for S76D machines and is hopeful of negotiating some deals in the near future. “Given the kind of queries we have received, we are hopeful of adding a good number of potential clients to our list of Indian patrons,” Mr Walia said. “Our choppers are well equipped to meet the requirements of homeland security which has been a cause of grave concern post the Mumbai attack. Even, the Black Hawk helicopters are currently being used by various countries to support law enforcement agents on the ground,” Mr Walia added. (The Economic Times: April 1, 2009) BOEING SETS UP RESEARCH CENTRE IN BANGALORE Boeing said that it has set up its research and technology centre in Bangalore which will work in the areas such as aero structures and aerodynamics to sustain the company’s competitive technological edge. The centre will initially have 30 engineers and will collaborate with Indian R&D organizations, including government agencies and private sector R&D providers, universities, and other companies. “Boeing is partnering with the best researchers around the world to find the best technology solutions for our customers, and we look forward to working with our partners here in India on some promising new technologies,” said Mr John Tracy, Boeing Chief Technology Officer and Senior Vice-President, Engineering, Operations & Technology. The centre has been set up with an investment of a “few million dollars,” he said. Boeing’s research in India will work in the areas of aero structures, aerodynamics and electronic networks with a team of senior researchers, scientists and engineers. This is Boeing’s third advanced research centre outside the US after those in Europe and Australia. (continued on next page) India News The centre will also coordinate the work of more than 1,500 technologists, including 100 advanced technology researchers, from across India on projects that will help define the future of aerospace. “Working with India’s technology leaders helps Boeing assimilate new ideas and innovative processes into our products and programmes. This also is good for India because it helps grow the capabilities of the Indian R&D community to meet the emerging needs in country. “The Boeing Research & Technology India centre will build upon the collaborative research projects in India. For example, since 2007, Boeing has been working together with the Indian Institute of Science 11 and two Indian information technology companies, Wipro and HCL, as part of the Aerospace Network Research Consortium. This is India’s first public-private aerospace research consortium and it is devoted to emerging network technologies and concepts. (The Hindu Business Line: April 1, 2009) EATON PLANS TO MAKE INDIA ITS GLOBAL R&D HUB The $15-billion engineering and industrial product company of the US, Eaton Corporation, plans major expansion of its India operations. The move is aimed at making the country a hub for its global research and development activities. It has decided to appoint over 600 engineers over the next two years and double the headcount at its Professional Services Centre, Pune. The exercise is part of the company’s strategy to beat the slowdown by outsourcing a large portion of R&D to overseas markets. “We are very upbeat about the growth prospect here. India offers a huge market opportunity in itself; it also serves as a strategic location to enhance Eaton’s global competitiveness. As part of this, we are expanding the Pune centre to help it design products for use in the global market,” Eaton India MD Mr. Shyam Kambeyanda said. (The Economic Times: April 1, 2009) QIAGEN TO EXPAND DISTRIBUTION BASE IN INDIA The Netherlands based firm, Qiagen, a leading sample and assays technology provider with $ 893.0 million sales is looking at expanding its distribution base in India through more collaboration with government and private medical institutions. Speaking at the launch of Qiagen cares Kolkata Project, a joint project with Chittaranjan National Cancer Institute on cervical cancer, Mr. Victor Shi, President, Asia said “Asia being a high disease burden area is one of the fastest growing healthcare markets, growing at approximately 10% in 2008. It had contributed roughly 10% of Qiagen’s total global business in 2008. The Asian market is key to our growth strategy. We hope to maintain double digit growth that we had over the last few years with increased focus on Asia specific diseases like avian flu, cervical cancer, SARS, TB etc.” “We are also looking at expanding our commercial network in India this year. Qiagen in India is only limited to Delhi, Mumbai and Chennai. We will be increasing our Indian team this year. There are many underserved areas in India like West Bengal, Orissa. We will be looking at more such programmes in collaboration with government or private agencies,” said Mr. Shi. The company at present has three major distribution bases, one each in Mumbai, Delhi and Chennai. “We are in talks with various partners and government agencies in various states to implement more programmes and bring in more of our products and offerings from our stable,” he added. (Business Standard: April 22, 2009) 12 India News PHILIPS TO MAKE INDIA HUB FOR MEDICAL EQUIPMENT MANUFACTURING After acquiring two healthcare companies in India, Philips is working on a strategy roadmap to make India one of its global production hubs for medical equipment. The company plans to invest substantially on upgrading the acquired manufacturing facilities and increasing their capacity, with plans to start shipping them globally in another 18-24 months. As per the plans, Philips is evaluating options to manufacture both new equipment and undertake refurbishment of old machines in India. However, the initial focus will be on value-segment medical equipment which has large market potential in Asia, Africa, CIS and parts of Europe. Philips Electronics India Senior Director and Head (Healthcare Business) Mr. Anjan Bose said the company is currently firming up plans to make India a global production hub. "The investment details are currently being worked out to expand capacities and upgrade the plants to meet global quality and regulatory standards," he said. Philips last year made two healthcare acquisitions in India — Meditronics and Alpha XRay Techlonogies. By virtue of this, Philips acquired a footprint in manufacturing of medical equipment, with five plants that specialize in imaging devices and X-Ray machines. The acquisitions also enabled Philips access critical technology to develop valuesegment products. The company is planning to undertake more such acquisitions in India to further strengthen its value-segment portfolio. "We are exploring such options in ultrasound and imaging devices. The current time could be favorable for such acquisitions since valuations are low and several companies have cash flow issues. The acquisitions will help us to tap rural hospitals and needs of emerging markets," Philips India CFO Mr. Coen Reuvers said. (The Economic Times: April 8, 2009) Edited by Mr. Ashok C. Kaushik, Marketing Officer, Embassy of India, Buitenrustweg 2, 2517 KD The Hague. Tel: 070-3469771; Fax: 070-3462594; E-mail: markoff@bart.nl; Web: http://www.indianembassy.nl