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| 04. TRADE & ECONOMY |
India relaxes offshore vessel hiring rules for oil explorers |
April order reversed; firms can again hire foreign-registered ships older than 25 years, subject to conditions India has relaxed tight hiring rules announced in April for ships registered outside the country that are used for exploring and drilling for oil and gas off its coast, on the back of lobbying by oil firms and foreign shipowners. Companies can now hire offshore vessels that are more than 25 years old, subject to certain conditions, the country's maritime regulator, the Directorate General of Shipping, said on 22 July. Offshore vessels such as jack-up rigs, anchor-handling tugs, accommodation barges and supply vessels play a key role in the hunt for oil and gas.
The presence of older foreign ships had helped India's biggest oil explorer, the state-run Oil and Natural Gas Corp. Ltd, or ONGC, to hire 30 offshore vessels in a five-year contract beginning March 2007 at 30-40% below market rates, according to industry body Indian National Shipowners Association, or Insa. Currently, there are 165 ships operating off India's coasts, mainly servicing the country's oil and gas exploration and production firms.
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A majority-more than 90%-of these will reach 25 years in one-two years, Insa estimates. Local laws give preference to India-registered ships, and foreign-registered ships can only be hired if Indian vessels are in short supply. Local shipowners are unable to meet rising demand for vessels from oil explorers, including Reliance Petroleum Ltd, Gujarat State Petroleum Corp. Ltd, Hardy Oil and Gas Plc., Cairn India Ltd, British Gas India Pvt. Ltd and ONGC.
"Offshore vessels are not available because of increased activity globally due to high oil prices. The relaxation will make available more offshore vessels for hire," said Sunil Arora, a deputy general manager looking after offshore logistics at ONGC. The state-run firm needs around 300 offshore vessels of various kinds for its oil exploration and drilling activities.
Only about 30% of India's offshore vessel needs are supplied by Indian shipowners such as Shipping Corp. of India Ltd, Great Offshore Ltd, Greatship (India) Ltd, Garware Offshore Services Ltd, Tag Sealogistics Ltd and ABG group. The shortage will rise further as India drills more wells, estimated at 498 by 2012 by the director general of hydrocarbons.
The maritime regulator had ruled on 25 April that foreign-registered ships working within India's territorial waters have to be less than 25 years old. Ships that fulfilled this condition also needed to undergo inspection and rectification of deficiencies of hull, machinery, safety appliances and operational requirements such as staffing, before they were permitted |
entry into Indian waters, its order said.The directorate had, however, exempted India-registered ships as they were already licensed to ply in Indian waters by the regulator. The April order also made it mandatory for foreign-registered ships seeking employment in India to be classed with the country's classification society, the Indian Register of Shipping, or IRS.
Classification societies set rules on safety and protection of ships, confirm that designs meet these rules, survey ships during construction and commissioning, and inspect vessels at regular intervals to ensure they continue to meet International Maritime Organization requirements.
The 22 July order says the offshore oil industry can now hire vessels regardless of age on the condition that they are classified either by IRS or any of the 10 full-time members of the International Association of Classification Societies, the global body of ship classification societies. In case a vessel above 25 years is not classified by IRS, it must undergo inspection equivalent to an annual statutory survey and an intermediate audit by IRS.
Foreign shipowners had dubbed the earlier April order "discriminatory" and said the decision to ban older ships from operating along the country's coast would add to the operational costs of oil exploration and production firms. The earlier rule would have meant that oil explorers had to spent more on logistics because hiring younger ships is costlier.
Source: livemint.com |
Indian banks set to increase foreign operations |
Indian banks are going to increase their foreign operations, with an eye on the rapidly expanding NRI and corporate financing business in foreign markets. Some of India's leading banks are preparing to augment their foreign operations in the present fiscal. The State Bank of India (SBI) is in the concluding stages of introducing its overseas offices.
SBI had been given the consent by the Singapore monetary authority to begin 25 branches in the country. According to SBI's chief general manager T C A Ranganathan, SBI would set up three branches in the preliminary phase and would be focussing mostly on NRI remittance and corporate lending business among other services. "We are presently engaged in the site-selection process to set up the new offices and the branches are expected to get operational in the coming |
few months," Ranganathan added.India's biggest private sector lender ICICI Bank will start four new offices in US, in New Jersey, Texas, California and Illinois. HDFC Bank also plans to increase its foreign operations. As per PTI sources, HDFC has already procured the required regulatory approvals to set up an office in Bahrain. Presently, it has representative offices in Dubai and Toronto.
An HDFC official said, "The Bahrain branch is ready to function and we expect it to be operational by August. We are planning many new offices this fiscal." HDFC is planning to set up a branch in Hong Kong and also a representative office in Kenya, he further added.
Source : IBEF |
Airbus, Boeing see sharp growth in Indian demand |
Despite a slowdown in the economy and the aviation sector, Airbus and Boeing have projected a sharp growth in the demand for aircraft in India. Close on the heels of Boeing predicting that India will need 1,001 aircraft in the next 20 years, Airbus has forecast that the sector will require 1,100 aircraft in the next 25 years.
Says Justin Dubon, regional press manager for Airbus, "India is a promising market for us. Our forecast takes into account the industry's near-term challenges, including surging fuel prices and slowing air traffic growth. |
Yet, we foresee a strong demand for aircraft because India is the third largest in terms of purchasing power parity. It is also projected to be the seventh largest economy by 2017." It has predicted that the Indian market will need 1,100 passenger and freighter aircraft valued at $105 billion over the next 25 years. Since 2005, Airbus has bagged over 295 orders from Indian carriers valued roughly at $22 billion. The aircraft manufacturer, popular for its A 300s family of aircraft, has many clients in India, including Kingfisher, which has placed an order for 64 aircraft, Air Deccan (72), Jet Airways (10), Indigo (100), Indian (43) and GoAir (10). Boeing, on the other hand, has orders worth $25 billion from Indian carriers.
That include 68 aircraft orders from national carrier Air India, 63 from Jet Airways, 30 from SpiceJet and three from the Indian Air Force. Dinesh Keskar, senior vice-president, sales, Boeing, told FE , “Amongst the Asian countries, |
India tops the chart in the requirement of commercial planes. India will need 1,001 new aircraft (passenger and freight) worth more than $105 billion at current list prices, over the next two decades,” Keskar adds that the company's growth projection considers today’s market environment.
But he, however, sees a correction happening in the next 12-15 months in terms of a slow growth in the sector. “Second, there will be more bilateral air agreements between India and other countries for international travel. The sector will see further liberalisation,” he adds.
Source: The Financial Express |
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India Inc upbeat about production: CII survey
Majority of CEOs of India's top notch companies are optimistic about their top line growth, assures a survey undertaken by CII. The survey suggests these companies expect a smooth run in terms of production at their companies for this fiscal, despite rising input and interest costs affecting the net profit margins. Some of the big league companies in the snap poll included ICICI Bank, Bajaj Auto, TVS Motor GE India, and HUL, with heavyweights like CII President and ICICI MD and CEO KV Kamath, TVS Motor Chairman and MD Venu Srinivasan, Bajaj Auto Chairman Rahul Bajaj, Ashok Leyland MD R Seshasayee, participating in a big way.
About 50 per cent of CEOs surveyed said they were unruffled by the impact of increasing cost of production, while 18 per cent were not. About 39 per cent of respondents said they were coping with an increase of 10 per cent in, while 32 per cent said they were experiencing an increase of 10-20 per cent in the cost of production.
Despite the not-so-steady economic outlook owing to the inflationary climate reflected in the rise in global commodity prices, the economic scene may not be so bleak, the survey said. Resisting the tentative streak in overall industrial and GDP growth, the manufacturing sector is expected to maintain a positive focus on the medium to long-term goals. Large capacity addition plans as part of the larger investment plans in the pipeline, could be worth as much as US $ 700 billion in the next three years, CII said. The services sector, though experiencing reduced profitability in most segments continues to be in good health, CII pointed out.
Source : IBEF |
Exports in June : An update |
India’s exports during June, 2008 were valued at US $ 14664 million which was 23.5 per cent higher than the level of US $ 11870 million during June, 2007. In rupee terms, exports touched Rs.62790 crore, which was 29.7 per cent higher than the value of exports during June, 2007. Cumulative value of exports for the period April- June, 2008 was US $ 42846 million (Rs.178480 crore) as against US $ 35033 million (Rs.144358 crore) registering a growth of 22.3 per cent in Dollar terms and 23.6 per cent in Rupee terms over the same
period last year.
India’s imports during June, 2008 were valued at US $ 24452 million registering a growth of 25.9 per cent over the level of imports valued at US $ 19424 million in June, 2007. In Rupee terms, imports increased by 32.2 per cent. Cumulative value of imports for the period April- June, 2008 was US $ 73275 million (Rs.305265 crore) as against US $ 56506 million (Rs.232855 crore) registering a growth of 29.7 per cent in Dollar terms and
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31.1 per cent in Rupee terms over the same period last year.Oil imports during June, 2008 were valued at US $ 9033 million which was 53.4 per cent higher than oil imports valued at US $ 5890 million in the corresponding period last year. Oil imports during April- June, 2008 were valued at US $ 25526 million which was 50.2 per cent higher than the oil imports of US$ 16996 million in the corresponding period last year.
Non-oil imports during June, 2008 were estimated at US $ 15420 million which was 13.9 per cent higher than non-oil imports of US $ 13534 million in June, 2007. Non-oil imports during April- June, 2008 were valued at US $ 47748 million which was 20.9 per cent higher than the level of such imports valued at US $ 39510 million in April- June, 2007. The trade deficit for April- June, 2008 was estimated at US $ 30429 million which was higher than the deficit at US $ 21473 million during April- June, 2007. |
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