Melbourne: India and Australia have wrapped up the feasibility study on the proposed Free Trade Agreement (FTA) between the two countries. This sets the stage for commencement of negotiations for the bilateral trade pact.

“The (feasibility) study has been completed on the FTA,” Australia's Trade Minister, Mr Simon Crean, told visiting journalists here. In fiscal 2008-09, India was Australia's fastest growing trade partner, with two-way trade up 55 per cent at $21.7 billion. This is expected to see a jump once the FTA is in place, with increased market access for products and services from both countries.

“Australia and India are natural economic partners and have a strong and growing trade and investment relationship... The Australian Government is committed to taking Australia's relationship with India to a higher level,” Mr Crean said. He said that India has consolidated its position as one of Australia's most significant economic partners. Australia's exports of gold, coal, copper, wool, education services, and construction and industrial services form key inputs for Indian export, business and infrastructure requirements.

Expanding operations
“While energy and mineral resources will be the building blocks of the trading relationship, emerging areas for engagements include biotechnology and communications. Trade in services is an increasingly critical part of the bilateral relationship... Tourism links between Australia and India are also growing rapidly,” he added.
In line with the increasing importance to Australia's engagements with India, underscored by nearly a dozen high-profile visits by leaders from both sides during the last one year, the former has already announced the opening of five new Austrade offices in India. It has also announced the expansion of three existing operations, bringing the network in India to 11 offices. Austrade's expansion will mean Australia will have the largest trade promotion network in India of any foreign country: more than Canada, which has eight offices, and the US with five.

Mumbai/kolkota: Tie-ups with international retailers and brands, emphasis on profitable growth and increased focus on private labels are set to be key trends in the Indian retail sector in 2010, say retailers and consultants Business Standard spoke to.

Though foreign direct investment in single-brand retailing and cash-and-carry ventures are allowed along with franchising and licensing pacts as of now, 2009 saw most of the foreign retailers focusing on manage the business in their home countries, where they were seeing declining sales.

“In 2010, a lot of international retailers and brands are most likely to look at India as global markets have stabilised and the Indian economy has proved to be better than most other countries. These factors give a lot of confidence for them to invest in India,” said Arvind Singhal, chairman of Technopak Advisors, a business consultancy.
Wal-Mart has set up its first unit in the country and Tesco, the UK’s largest retailer, is providing back-end support to Tata’s hypermarket Star Bazaar, Carrefour is said to be talking Kishore Biyani’s Future Group for a possible tie-up. Industry sources said a number of international brands are also holding talks with Future Group, Reliance Retail and Spencer’s Retail for tie-ups. Devangshu Dutta, chief executive of business consultancy Third Eyesight, believes franchising and licensing agreements could be a major avenue used by overseas brands to enter the country. “Our research shows that 45 per cent of fashion and lifestyle brands, which have entered India in the recent past, have used this route because it gives a quick entry and allows tie-ups with partners who have good real estate capabilities,” Dutta says.

A profitable growth: Though retailers such as Reliance Retail, Aditya Birla Retail and Spencer’s Retail closed hundreds of stores or shifted stores to economical locations in 2008 and 2009 and took various steps to cut costs, they are likely to continue to focus on profits and boosting margins in 2010. Shoppers Stop’s top management took 15 per cent salary cuts, while 300 floor-level staff were not replaced. The company shrank its office space 20 per cent and corporate office expenses by 40 per cent to cut losses. Delhi-based Vishal Retail, which has been battling cash woes and mounting debt, relocated 25 stores in the financial year 2009 and 10 stores since April 2009. It is now planning to close 20 more and go only through the franchisee route.

“In 2010, our strategy is to increase margins, reduce costs and boost revenues. In 2009, we mostly focused on controlling costs,” says Thomas Varghese, chief executive officer of Aditya Birla Retail, part of the Aditya Birla group. “We will watch the situation and open stores,” Thomas adds. “Retailers will not book properties at ridiculous rentals and look at private labels to boost margins. Growth with profitability is the main mantra in 2010,” says Singhal.

Private labels to rise: Most retailers like Future Group, Spencer’s Retail and Aditya Birla Retail, among others, are stepping up their private label plans to boost margins. The reason: Private labels in food and groceries carry margins of 25-35, while private labels in apparel and accessories offer more than 40 per cent margins.
Future Brands, which manages the private labels of Future Group, is expecting a turnover of Rs 750 crore in 2010 (the group’s flagship Pantaloon’s financial year ends on June 30), 14 per cent growth.

Private labels contribute 30 per cent of its sales in FMCG and 25 per cent in personal care products. The group is expanding its private label portfolio further. It is planning to launch its own brands in lingerie and a toothpaste brand ‘Sach’, according to Future Group CEO Kishore Biyani. Aditya Birla Retail, which has more than 400 products in its private labels, plans to take its share of private labels in overall revenues from 19 per cent to 25 per cent next year. RPG’s Spencer’s Retail is also planning to double the contribution of private labels and fashion to its overall revenues in the next couple of years.

New Delhi: India and Italy on Monday signed a memorandum of intent to enhance bilateral economic and commercial relations. The Commerce and Industry Minister, Mr Anand Sharma, expressed the hope that foreign direct investment flow would gather momentum as the agreement would provide a single point of contact for existing and potential foreign investors.

The Minister, who co-chaired the Indo-Italian Joint Commission for Economic Partnership with Mr Claudio Scajola, Italian Minister for Economic Development, said the bilateral trade between India and Italy touched $8.1 billion during 2008-09 compared with $7.8 billion in the previous year, despite the global economic slowdown.
“With economy recovery clearly in sight in India, this forum could provide an impetus to take the partnership to the next higher level,” he added.

The Commerce Minister told his counterpart that infrastructure development is an attractive investment opportunity and a priority area for the Indian government. India has invited investment and joint ventures in Ultra Mega Power Projects, textile machinery, agricultural food processing, automotive components and wine technology.

ndia has offered expertise in railways, IT and textiles sector. The MoI was signed in trade and investment promotion, Indian trade missions to Italian fairs, training courses and protection of Intellectual Property Rights; FICCI Arbitration and Conciliation Tribunal (FACT) – Chamber of Arbitration of Milan (CAM) in arbitration and dispute resolution; and INVESTINDIA-SIMEST and INVITALIA in bilateral investments.

Italian offer
The Italian side offered partnership in e-identity cards and creation of a design centre at Ahmedabad. Cooperation in shipping and developments of ports infrastructure was also high on the agenda of the Italian side. In the renewable energy sector solar energy, waste-to-energy, second generation bio-fuels and green buildings were identified for cooperation.

The Prime Minister of Japan, Mr. Yukio Hatoyama meeting the Prime Minister, Dr. Manmohan Singh, in New Delhi on December 29, 2009.

New Delhi: India and Japan have agreed to relax visa rules in a year’s time in order to facilitate improved trade and widen cooperation between the two nations. Prime Minister Manmohan Singh said, “I requested (Japanese) Prime Minister Hatoyama to ensure that Japanese visa system becomes more liberal to enable faster growth of trade, investment and people to people contact.”

The two countries have set a target of US$ 20 billion in trade for the coming year, up from US$ 12 billion in the period 2008-09. During the Japanese Prime Minister Yukio Hatoyama’s three-day visit to India, the prime ministers also discussed cooperation in infrastructure projects and renewable energy, climate change and security. The two countries also agreed to work out funding and logistical issues relating to the Dedicated Rail Freight Corridor, the first phase of which is targeted for implementation next year.

New Delhi: Indian industry registered a growth rate of 10.3 per cent in October, providing further evidence of a sustained recovery under way since the second quarter of the current fiscal. The 10.3 per cent year-on-year increase in the official Index of Industrial Production (IIP) comes on a lower base; the same month in 2008 saw a growth of just 0.1 per cent. But even after the base effect is factored in, the pick-up trend is perceptible since around June, following almost three successive quarters of virtual stagnation in the wake of the global economic crisis. The cumulative industrial growth for April-October, at 7.1 per cent, is higher than the 4.3 per cent for the corresponding seven months of 2008-09. With the base effect likely to be pronounced in the coming months (because of the low growth rates during the same period of 2008-09), the current fiscal may well end with an overall eight per cent-plus figure.

Among the major constituents of the IIP, the index for ‘manufacturing' recorded a growth of 11.1 per cent in October (against minus 0.6 per cent in the same month of last year), with the rates correspondingly being 8.2 per cent (3.2 per cent) for ‘mining' and 4.7 per cent (4.4 per cent) for ‘electricity'. During the seven months of the current fiscal, ‘manufacturing' grew 7.1 per cent year-on-year (compared to 4.5 per cent in April-October 2008-09), ‘mining' 7.9 per cent (3.8 per cent) and ‘electricity' 6.5 per cent (2.8 per cent).

Capital goods up
The use-based classification of the IIP presents an equally sanguine picture. Production of capital goods – which is a proxy for investment demand in the economy – was up 12.2 per cent in October (against 4.2 per cent in the same month last year) and 6.3 per cent for the seven months of the current fiscal (against 9.7 per cent during April-October 2008-09). Likewise, the growth rates in October amounted to 14.3 per cent for intermediate goods (minus 4.4 per cent in October 2008), 5 per cent (3.2 per cent) for basic goods, 21 per cent (minus 1.6 per cent) for consumer durables and 8.1 per cent (minus 0.6 per cent) for consumer non-durables. Consumer goods, in particular, have clearly benefited from the base effect.

For the April-October period, production of intermediate goods rose by 10.2 per cent (against a decline of 0.3 per cent in the corresponding seven months of 2008-09), while these stood at 6.4 per cent (3.8 per cent) for basic goods, 19.4 per cent (5.8 per cent) for consumer durables and 0.8 per cent (6.6 per cent) for consumer non-durables.