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India
offers 51 per cent FDI in insurance auxiliaries
India has offered to allow up to 51 per cent foreign investment in
insurance auxiliary services as part of its revised offers for services
negotiations at the World Trade Organisation. This it has done while
binding its commitment in insurance underwriting to 26 per cent.
Also, India has said foreign banks will not be denied a licence if
the share of their total banking assets (on and off balance sheet)
in India exceeds 25 per cent. This was 15 per cent in India’s
initial offer.
While FDI in the banking sector has been capped at 49 per cent, the
government has offered to bind asset management services at 51 per
cent. The FDI limit for banks providing services related to participation
in issues of all securities, underwriting and placements has also
been increased from 51 per cent to 74 per cent.
For foreign financial services companies, including banks, the FDI
limit in “factoring, venture capital, financial leasing, provision
and transfer of information, financial data processing and related
software by suppliers of other financial services and financial consultancy
services, has also been enhanced from 51 per cent to 100 per cent,”
the government has said.
Wholly owned subsidiaries of foreign banks in India will now be allowed
to set up 20 branches in a year against the earlier limit of 15.
Computer and related services is another area where improvements have
been made by relaxing the earlier requirement of obtaining a no-objection
clearance from the Foreign Investment Promotion Board for existing
ventures in India. Further, a new sub-sector on data preparation services
has been included.
Centre clears 47 more SEZs According
to the Commerce and Industry Minister, Mr Kamal Nath, the Centre has
given approval on setting up of 47 new SEZs based on proposals received
from State governments and private promoters. Of the 47 SEZs approved
for establishment, three SEZs - at Salt Lake (West Bengal), Indore
(Madhya Pradesh) and Jaipur (Rajasthan) have already commenced operation,
while others at Jodhpur (Rajasthan), Mahindra City (near Chennai)
and Moradabad (Uttar Pradesh) are ready for operation, the Minister
said.
The other zones are in various stages of implementation. Exports from
special economic zones (SEZs) have "almost doubled" in the
last two years registering a 36 per cent growth in 2004-05 at $4.075
billion against $2.079 billion in 2002-03, Mr Kamal Nath said.
All the eight Export Processing Zones (EPZs) located at Kandla and
Surat (Gujarat), Santa Cruz (Maharashtra), Cochin (Kerala), Chennai
(Tamil Nadu), Visakhapatnam (Andhra Pradesh), Falta (West Bengal)
and Noida (Uttar Pradesh) have been converted into SEZs. At present,
811 units are in operation providing direct employment to about one-lakh
persons, 40 per cent of whom are women, an official release said.
Gems and Jewellery sector favourite with FIIs:
Study
The gems and jewellery sector has emerged as a favourite for foreign
institutional investors (FII) who have increased their exposure to
the Indian stock market, followed by the media sector.
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According to an Associated Chamber of Commerce and Industry of
India (Assocham) Eco Pulse Study, the average FII exposure in the
top 10 gems and jewellery firms increased by 13.41 per cent during
the first six months of the current fiscal. The average increase
in the FII exposure amongst the top 10 media firms was at 6.68 per
cent during the same period.
According to the study, the average increase of the FII participation
in the textile sector was 5.05 per cent, while the average FII exposure
in the top 10 hotel and hospitality firms went up by 5.01 per cent
in the first six months of the current fiscal.
As far as IT companies are concerned, the average increase was 4.69
per cent. The study further finds that FII inflows stood at $6.36
billion in the first seven months of the year, while it was only
$3.72 billion during the corresponding period in the previous year.
Strong economic growth, industrial pick-up; focus on core sectors
such as infrastructure, power and telecom; and the good performance
by corporates houses have resulted in FIIs continuing to remain
bullish about the Indian market, the study says.
US health body to set up lab in Hyderabad
United States Pharmacopeia (USP) will set up its first laboratory
outside the US in Hyderabad. The centre will come up at the ICICI
Knowledge Park in the city. USP is an independent public health
organisation that sets standards for drugs and dietary products
and guides the producers in achieving those standards. Its standards
are used in about 130 countries. Involving experienced Indian scientists,
the Hyderabad centre would offer a range of pharmacopeial services
to the pharmaceutical manufacturers in India and neighbouring countries.
The centre would support and interact with the institutes, industry,
and regulatory bodies in the pharma sector to promote quality therapeutic
products. The State Government hopes that USP's arrival would boost
the credibility and image of the State with respect to expertise
in pharmaceutical and infrastructural areas.
Global footwear brands step into Indian market
Global retail brands in the US$ 136 million niche premium and casual
footwear segment are following the Indian retail boom by making
a beeline for setting up shops here.
According to industry sources, Moreschi of Italy has already set
up shops through the franchisee route while Bali and Rosetti of
Switzerland and Italy respectively are on the verge of entering
the country.
Tata International has also entered the fray by bringing in Europe's
premium luxury brand `Lloyd' to Mumbai, to start with. Officials
from the Franchising Association of India
informed that while a number of global brands including Reebok,
Adidas and Nike are already in the casuals footwear segment, yet
another brand Sketchers is waiting in the wings to enter India.
Incidentally, many global brands have preferred to enter India through
the franchisee route following restrictions on foreign direct investment.
Unlike the casual footwear market, super premium brands in this
segment also carry premium price tag.
For instance, the price range of Lloyd's shoes for men vary from
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Rs9,000 to Rs 24,000. Unfortunately, the
pricing of these global brands will be in parity with global prices
of these products.
Hyundai Electronics
to set up retail outlets
Hyundai Electronics India Limited
(HEIL), part of the $ 27 billion Hyundai Corporation (Korea), is
to invest US$ 34,309 to US$ 45,733 to open a retail outlet
in Chennai. In a bid to strengthen its brand value, HEIL has planned
opening of nine outlets across the country by the end of this fiscal.
Eventually, the company will scale up its operations by opening
lounges in cities like Coimbatore, Kochi, Baroda and Visakhapatnam.
The setting up of outlets will be done through franchisees.
To provide a fresh retailing experience to customers, HEIL has tied
up with Sify, Georgia and Music World (which will set up two kiosks
in the lounge).
India’s Mobile Market Booming
The world's fastest growing major mobile market, added 2.5 million
new users in July, taking the total number of customers to 60.4
million. The Cellular Operators' Association, representing nine
carriers offering mobile services based on the GSM standard, said
1.954 million customers signed up for services. Overall, GSM carriers
had 46.874 million customers at the end of July, up 4.35 percent
over June. Local mobile call tariffs of as low as 1 rupee (3c) a
minute are driving cellular usage in India, where less than six
people in 100 in the more than a billion-strong population use mobile
services. India's top mobile services firm, Bharti Tele-Ventures,
added 533,218 GSM users, taking its customer base to 12.789 million
subscribers. State-run Bharat Sanchar Nigam, the second-ranked GSM
player, had a mobile user base of 10.724 million customers. It added
494,469 subscribers in July. Hutchison Essar Telecom, the Indian
wireless operation of Hong Kong's Hutchison Telecommunications International
Ltd., added 494,469 mobile users last month. The firm's user base
stood at 8.844 million customers. GSM companies compete with carriers
such as Reliance Infocomm who offer similar services based on CDMA
technology. The association representing CDMA operators said these
firms signed up 535,330 new users in the past month, taking their
combined user base to 12.341 million customers. Bombay-based Reliance
Infocomm accounted for the bulk of the new CDMA additions. The firm
attracted 360,110 customers and raised its mobile user base to 10.647
million.
Posco project Moving On
South Korea’s Pohang Steel Company (Posco) has sought the government’s
nod for setting up an Indian subsidiary with an equity of $50m.
“The company has already applied to the RoC for creating Posco
India Corporation to put in place an Indian organisation, which
can apply for the prospecting licence to start mining,” an
official said. The South Korean steel giant is keen to commence
mining activities early so that when it actually begins its productions,
it has ample supply of iron ore. The development of a mine in the
country normally takes around seven years, but by starting the process
early the company would also try to compress this timeframe so that
when its first plant went onstream in the next five years it could
carry on its production unhindered.
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