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The growth of e-commerce in India is driving growth of small and medium enterprises (SMEs), which in turn is contributing to new job opportunities and GDP contribution, says a study, jointly conducted by domestic e-commerce player Snapdeal and consultancy firm KPMG. It claimed that e-commerce sector in India is projected to cross $80 billion by 2020, examined the macro-impact of the sector on the growth of SMEs and identified remaining gaps in the ecosystem that needed to be plugged."At Snapdeal, we are working towards building the most impactful digital commerce ecosystem in the country and SMEs form the foundation of this ecosystem in many ways," said co-founder and chief executive Kunal Bahl."With over 200,000 sellers operating on our platform, we felt the need to conduct a systematic unbiased study to identify opportunities and challenges to further accelerate the growth of the sector. We have taken a number of initiatives like seller training programmes, seller financing programmes - Capital Assist and Snapdeal Seller Advisor Programme, with an aim of creating life changing experiences for over one million sellers in the next three years. This study has given us deeper insights into what more we can do to enable small businesses become more successful online," he added. The study also highlighted the importance of SMEs in the country which accounted for over 17 percent of the gross domestic product (GDP) in 2014 and contributed to 45 percent of the nation's industrial output and 40 percent of the total exports. "The fast-paced growth of the e-commerce industry in India represents an unprecedented opportunity for SMEs. We hope that the findings of this report will assist policymakers, industry bodies and e-commerce companies to strengthen he support ecosystem, which enables SMEs to ride the e-commerce growth wave successfully," said KPMG India chief executive Richard Rekhy.
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Getting India and the European Union (EU) back to the talking table was an important element of German Chancellor Angela Merkel's visit. Talks led by Prime Minister Narendra Modi and Merkel failed to break the ice on a lingering spat between New Delhi and the EU. Modi asked Merkel to help overturn EU bans on 700 GVK Biosciences generic drugs. Most of these drugs are available and have been used for several years without any complaint in several EU states. A few of these drugs are, however, disallowed in some markets. Experts describe the EU move as a part of an offensive against India's $15 billion generic drugs industry. The two leaders, however, also indicated a desire to revive India-EU free-trade-area negotiations — a market-opening pact to boost bilateral commerce on which talks began in 2007. The stalled talks, not held since 2012, directly hurt India's efforts to increase exports to the EU because the grouping, through the European Commission, negotiates on trade and tariffs only collectively: the individual members can't strike bilateral deals. Merkel's visit comes as India is looking for foreign technology and aid to boost economic growth and provide jobs for the approximately 12 million people who enter the labour force every year. While Germany is looking to expand its presence in India to compensate for the global slowdown. The Prime Minister's Office (PMO) wrote to the EU Trade Commissioner to intervene when the ban on around 700 pharmaceutical products was formalised in May. There was no response, so the government cancelled an August 28 meeting to discuss restarting talks. As of now, both sides have missed at least four deadlines to clinch a free trade accord, called Broad-based Trade and Investment Agreement, even after 15 rounds of talks. Given the current economic scenario, Europe has been desperately seeking greater access to India's market. In April, during his Germany trip, Modi had told the German chancellor that he was willing to try and clinch a Trade and Investment Agreement between India and the EU by the end of the year. Trade between India and the EU has remained at around $82 billion for the past two years. In 2013, the EU as a bloc was India's largest trade partner, a position since captured by the Gulf Cooperation Council, which consists of Saudi Arabia, the United Arab Emirates, Qatar, Kuwait, Bahrain and Oman. Trade with the GCC now stands at $132 billion, according to the foreign office. So far, Modi is leaving no stone unturned to put pressure on the EU leadership into accepting some of India's concerns. Modi had asked French President Francois Hollande and recently Irish Prime Minister Enda Kenny for help. Modi is also expected to articulate India's concerns when he meets British Prime Minister David Cameron during a visit to London in November. "Individual European nations can't decide what the EU should do, but heavy lifters like Germany, France and the UK can and do influence the politics of the grouping," Yogendra Kumar, a former Indian diplomat who has served in Brussels, told The Telegraph. Germany, Europe's largest economy, has seen its imports to India dip by 18 per cent — from $15.6 billion in 2011-12 to $12.7 billion in 2014-15 — since the last India-EU leaders' summit in 2012. Merkel's personal interest in bridging differences between India and the EU is not new. In 2013, the EU was demanding duty-free import of automobiles by India. But ahead of then Prime Minister Manmohan Singh's visit to Germany that year, Merkel leant on the EU to drop its demand. Germany was the biggest car exporter to India from within the EU. "It's an issue close to her heart. I think it is high time that the suspended talks should be resumed," said Martin Ney, German Ambassador to India.
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Star India CEO Uday Shankar has been honoured as the year's best leader among chief executives of multinational companies at the Forbes India Leadership Awards (FILA) 2015. The award marks a break from convention at FILA, with Shankar becoming the first MNC head of a media and entertainment company to receive the honour. Shankar was awarded the Best CEO of a Multinational Company, after a thorough and exhaustive vetting process by an illustrious jury of his peers. The jury comprised the likes of industry captains Harsh Mariwala, Chairman, Marico Ltd, Naina Lal Kidwai, Chairman, HSBC India and Director, HSBC Asia Pacific, Noshir Kaka, Managing Director, Mckinsey India and Sanjay Nayar, CEO, KKR India. He was selected from amongst a shortlist of nominees that included leaders of Hindustan Unilever, Samsung, ABB India and Maruti Suzuki India Ltd. Accepting the award, Uday Shankar said, “I feel enormously humbled to be receiving this honour on behalf of Star India. We are a multinational company albeit with an Indian heart. Our endeavour has been to harness the transformational power of media to foster social change and thereby inspire a billion imaginations.'' He further added, "I would not be here receiving this award, if I was not a journalist - that introduced me to the value of being socially relevant and to see the nuances that the untrained eye could easily miss. It also showed me that the value in life comes from doing big things - the headlines. And finally, it taught me to do the right thing, not be intimidated by competition because everybody makes as many mistakes."
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India Ratings and Research (Ind-Ra) expects the benefit from reduced gas price to be partly offset by the near 6 per cent rupee depreciation over April-September 2015. The government has reduced the domestic gas prices by 18 per cent to $3.82/mmbtu applicable for 1 October 2015 to 31 March 2016. Thus, the net impact of the reduced domestic gas prices in rupee terms would be nearly 11 per cent-16 per cent. Ind-Ra expects the compressed natural gas (CNG) and piped natural gas (PNG domestic) end-consumers of city gas distribution entities to benefit from the downward price revision. Over April-September 2015, the price of alternate fuel - diesel - declined by 8 per cent while that of CNG remained unchanged, thus lowering the fuel competitiveness of CNG. Ind-Ra expects the benefits of lower gas prices to continue to be passed on to the consumers. It further expects an Rs2.1/scm-Rs2.3/scm cut in PNG prices and an Rs 2.8/kg-Rs3.0/kg cut in CNG prices. This would make CNG 44 per cent-45 per cent more competitive than diesel, compared with 39 per cent currently. Similarly, PNG would be 1 per cent-2 per cent more competitive than subsidised LPG, compared with negative 8 per cent currently. This is the second domestic gas price reduction and is driven by the decline in average gas prices prevalent at the reference hubs over the period July 2014-June 2015. The first downward price revision was to $4.66/mmbtu (million British thermal unit) from $5.05/mmbtu on 1 April 2015. The average Henry Hub gas prices declined to $3.33/mmbtu from $4.35/mmbtu over January-December 2014. Ind-Ra expects the two major domestic gas producers – Oil India Limited and Oil and Natural Gas Corporation Limited - to face a revenue decline of Rs120 crore-Rs 130 crore and Rs 1080 crore-Rs 1150 crore, respectively, on gas sales during 2HFY16 as the prices have been reduced by 18 per cent. In the mid-stream segment, Gail (India) Limited (‘IND AAA’/Stable) would see Rs 1790 crore-Rs 1900 crore lower trading revenue from the sale of domestic gases during 2HFY16.
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Standard & Poor’s (S&P) lowered its outlook on Tata Motors following a slowdown in Chinese economy and resulting likely dip in demand for its Jaguar Land Rover vehicles. Also the continued expenditure by JLR will likely result in negative free operating cash flow for Tata Motors. Both the factors will result in Tata Motors’ ratio of funds from operations to debt to decline to about 20 per cent compared with its earlier expectation of more than 30 per cent. "The slowdown in Chinese demand-- the key driver for growth for JLR and other luxury carmakers in the past few years -- will result in weaker operating performance and lower margins for Tata Motors than we had previously anticipated,’’ said S&P credit analyst Abhishek Dangra. While global new model launches can support growth in fiscal 2017, Dangra said he expects fiscal 2016 ebitda to be weaker. S&P said it may raise Tata Motors rating if an uptick in JLR’s operating performance partly offsets the increase in capital expenditure, and helps the company increase ratio of its funds from operations to debt to more than 30 per cent. It may however lower the rating if S&P believes that weaker operating performance could result in ratio of funds from operations to debt of lower than 20 percent on a sustained basis. This may happen due to a sharper slowdown in China or new product launches that are less successful than current expectations, while capital expenditures remain elevated, S&P today said.
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Infosys, a global leader in consulting, technology, outsourcing and next-generation services, on Wednesday (30 September) announced that it will create new Internet of Things (IoT) solutions, which will help derive practical benefits from massive amounts of data generated through connected devices in the industrial enterprise. Infosys has collaborated with GE, a digital industrial company, and others to develop these solutions, designed to help manufacturers and other industrial enterprises improve asset efficiency and build more intelligent linkages between design, production and field testing. The Industrial Internet Consortium (IIC), an international body of industries, governments and academics focused on developing best practices for the Industrial Internet, recently approved two Infosys-led testbeds: ·Asset Efficiency Testbed: This enables holistic monitoring, analysis and optimization of critical infrastructure assets. The first use case focuses on predictive maintenance for an industrial asset such as aircraft landing gear. A demonstration will be showcased at the GE's Minds & Machines conference today. The Asset Efficiency Testbed team included Infosys, GE and other industry partners.· Industrial Digital Thread Testbed: This creates more intelligent linkages between the three phases of manufacturing – design, production and field testing/service. By capturing, analyzing and relaying real-time sensory and historical data at each of these phases, the Industrial Digital Thread (IDT) will generate insights that can help field engineers and service teams identify the root cause of component failure easily, and provide faster corrections to flaws in design engineering and manufacturing operations. IDT leverages two open-standard big data analytics engines - the Infosys Information Platform (IIP), which provides in-memory data analytics and big data management, and GE’s Predix platform that delivers data acquisition, processing and user interface and application development. IDT has been co-developed by Infosys and GE, and will be implemented first as a pilot project at GE Aviation.
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“ The Confederation of Indian Industry (CII) has suggested to the government that eventually a model should be evolved, where the corporate tax rate comes close to 20 per cent as exemptions are proposed to be done away with,” said CII director-general Chandrajit Banerjee. CII has noted that the current corporate tax rate is around 34 per cent (including surcharge and education cess). The proposed corporate tax rate as stated by the Finance Minister is 25 per cent which will effectively mean around 29 per cent (inclusive of surcharge and education cess). The intent of the Finance Minister in the Budget Speech clearly highlighted (a) to bring down the corporate tax rate to a level which is not more than the current effective tax burden (b) which promotes manufacturing, investments and growth. Given that for most sectors the effective rate is around 22 per cent if the effective tax rate after withdrawal of exemptions lands up being in the range of 29 per cent, it will negatively impact industry. “In this connection, CII has suggested that the revenue department does detailed consultation before finalising the reduction road map,” Banerjee said. “With exemptions being proposed to be done away with, this would also obviate the need of MAT, eventually, there should be a very simple Income Tax Act, which would be the biggest reform that can be brought about by the Government,” the CII director-general added.CII has also recommended that the government move swiftly on the implementation of TARC (Tax Administration Reforms Commission) recommendations. CII has suggested that the government appoints an implementation group consisting of professionals to oversee and monitor implementation in a time bound manner. Whatever is recommended need not be implemented in entirety if the Ministry feels otherwise. However, a clear indication of what all are being accepted would help with the process, CII has said. On the subject of black money, CII has suggested promotion of banking channels including use of credit and debit cards, since they leave adequate audit trails and hence dis-incentivise black money generation. CII has said that the government should also consider providing tax incentives for use of credit/debit cards. On the subject of GST, CII has pointed out that there are some aspects that need attention. Clause 18 in the Constitutional Amendment Bill, imposing an additional 1 per cent origin based tax, should be removed. If at all additional 1 per cent has to be levied, its application should be limited to inter-state sale of goods only for a period of two years. Every effort should be made to include petroleum products, alcohol, tobacco, real property in GST to have a comprehensive base of all goods and services.According to CII, if constructed appropriately, GST makes the tax administration transparent and is revenue productive. Presuming that GST will occur sometime in 2016, industry feels that there are lack of clarity regarding the intricacies in its proposed structure, transitional arrangements, administration and procedures, and framework to contain inflationary ramifications. In other countries, consultation on the actual proposals would have taken place in an open manner during this phase and there is no reason why this cannot be done in India, according to CII.
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RedDoorz, South East Asia’s first platform to offer budget accommodations across key business and tourist destinations in South East Asia, on Wednesday (30 September) announced that it has received an undisclosed amount of pre Series A funding led by Jungle Ventures. It further announced that Philip Wolf, Founder PhoCusWright and Ajay Bakaya, Executive Director at Sarovar Hotels & Resorts, both travel and hospitality industry veterans have joined the company’s Strategic Advisory Board to help accelerate it's growth and product success in its segment. RedDoorz is South East Asia’s first asset light budget accommodation brand and service offering for hotels, resorts, inns, service apartments, B&Bs and guesthouses. It provides budget accommodation owners access to expert advice and assistance to standardize their offering and directly distribute online via RedDoorz technology platform. Under the RedDoorz brand and service umbrella, these properties will also receive continued guidance to build repeat business and see higher online occupancies of up to 50 percent. To the consumer, a RedDoorz branded accommodation will mean receiving a consistent experience and great prices, complimented by the brand’s trust and security. “The Asia Pacific region is expected to receive 27 per cent of global tourist arrivals by 20201. Travelers are increasingly expecting a personalized stay and hotel owners have to adapt using technology, social media and other innovations to deliver a more customized experience. Today budget accommodations have fragmented and non-uniform experiences that affects the consumer satisfaction which can lead to negative reviews on social media and declining footfalls said Amit Saberwal, CEO & Founder, who previously was Chief Business Office of MakeMyTrip, India’s largest OTA which has been listed on NASDAQ since August 2010. Jungle Venture is a Singapore based venture firm that invests and helps build tech category leaders in Asia.
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VW has sold close to 200,000 vehicles in India, if you include Skoda then it would have sold close to 300,000. Has the VW engine cleared Indian tests? Volkswagen exported close to 65,000 vehicles last year, mostly the Vento and the Polo, from India, in the last financial year. But things are not going to be rosy even in India very soon. Ever since the Environment Protection Agency in the USA, discovered that the Volkswagen Group used a cheat software to help the 1.5 litre diesel engine, type EA189, to comply with emission norms, authorities across the world are now asking questions about the Group's integrity. US authorities have asked the company to recall half a million cars. Most of the diesel engines sold in India are the type EA189. Shouldn't the Indian government investigate these engines too? The global repercussions will have an impact on most of Indian large scale auto parts manufacturers. There are at least 20 Indian suppliers that are aligned to VW's global supply chain and over 140 suppliers that support local manufacturing. Sources in VW added that there would be no affect on the vendor ecosystem, in India, because most of the suppliers were focused in producing parts for VW Europe. The total value of the exports of auto parts is worth more than €200 million. Most of these 20 global suppliers have 70 per cent exposure to the European market. The UK has already launched an investigation on Volkswagen. India should investigate the engine in the interest of its citizens, and only if there are discrepancies in the engine, vehicles can be recalled. VW has sold close to 200,000 vehicles in India, if you include Skoda then it would have sold close to 300,000. The question is has the EA189 engine cleared Indian tests?
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In a big surprise for the markets, the Reserve Bank of India (RBI) cut its key repo rate by a bigger-than-expected 50 basis points to 6.75 per cent on Tuesday (29 September), with inflation running at record lows and the economy in danger of slowing down.Home and corporate loans will cost less as the central lowered the key interest rate by 0.50 per cent — the biggest cut in over three years — to bolster the economy A Reuters poll last week showed only one out of 51 economists had expected a 50 basis points rate cut, while 45 had expected a 25 bps cut. The central bank has also cut the FY16 gross domestic product (GDP) growth target to 7.4 per cent from 7.6 per cent earlier. The equity market which was in the red till the announcement was back in the black. The market was widely expecting the RBI to go only for a token 25 basis points cut in view of the deficit monsoon and expectation that the US Fed will raise interest rates by December. It has kept the cash reserve ratio (CRR) of scheduled banks unchanged at 4.0 per cent of net demand and time liability (NDTL). The RBI justified the bigger reduction, saying consumer inflation was likely be running at 5.8 per cent, below the 6 per cent target for January, thanks partly to the government's efforts to contain food prices. The RBI also drew comfort from US Federal Reserve delaying the first hike in US interest rates in nearly a decade, according to a statement written by Governor Raghuram Rajan. Once US rates rise, analysts expect some emerging market currencies to come under pressure. "Monetary policy action has to be accommodative to the extent possible, given its inflation goals, while recognising that continuing policy implementation, structural reforms and corporate actions leading to higher productivity will be the primary impetus for sustainable growth" the RBI said. The benchmark 10-year bond fell 9 basis points to 7.64 per cent after the news. An interest rate cut had been widely expected after India reported consumer inflation had fallen to a record low of 3.66 per cent in August, and there have been calls from within government and industry for the RBI to lower borrowing costs. Still, it is unusual for the RBI to lower interest rates in September, as it has tended to be on the defensive against food price pressures during the monsoon season running from mid-June through September, after enduring several years of weak rains. Since adopting the repo rate as its main policy tool in 2004, the central bank had never cut rates during this period. This is also the biggest single monetary policy move taken by Rajan and it takes the repo to its lowest since March 2011. Since taking the helm of the central bank in September 2013, Rajan has raised the repo rate three times and lowered it three times, all by a magnitude of 25 bps. Calls for lower rates first began to grow louder after the release of data showing the economy grew by a slower-than-expected annualised rate of 7 per cent in the April-June quarter — faster than China, but well below the government's target of 8 to 8.5 per cent for the year ending in March. A rate cut is being seen as a key trigger to boost investment demand in an economy where credit growth has dipped to a multi-year low.(Reuters also contributed to this story)
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