The Apple-Samsung patents battle rages on, and now the Barack Obama government seems to have been roped in. Recently, the US International Trade Commission (ITC) banned the sale of some older iPhones and iPads in a ruling that favoured Samsung Electronics over Apple. But soon after, the American government overturned the ITC ruling, saying the decision was in part based on its “effect on competitive conditions in the US economy and the effect on US consumers”. Ironically, a few days after the ban was reversed, ITC announced another ruling that Samsung had violated two of Apple’s iPhone patents and must end US import of some of its products. Now, one needs to wait and see if the American government will step in again, this time in Samsung’s favour. Industry trackers hope it will, since such strict intellectual property laws have a huge negative impact on the masses.GroundedThe US government recently sued to block American Airlines and US Airways’s proposed merger to create the world’s biggest airline, saying consumers would end up paying higher fares and fees. The surprise move may delay, or even derail, a merger set to close in September and could stall a broad industry restructuring that investors were counting on to support airline profits. It also could hinder American’s parent AMR Corp’s efforts to emerge from its nearly two-year-old bankruptcy. The justice department, which has in recent years allowed two major airline mergers to go ahead, said it is out to block the $11-billion deal entirely rather than seek concessions. Tim ArmstrongFirefightEmployees getting fired for innocuous deeds is not news, but a CEO apologising for the manner of firing definitely is. AOL Inc chief executive Tim Armstrong said in a staff memo recently that he made a mistake in publicly firing Abel Lenz in front of a 1,000 workers. Armstrong fired Lenz after he told the creative director at AOL’s Patch unit to put down his camera. “I am accountable for the way I handled the situation, and at a human level it was unfair to Abel,” Armstrong said in the memo. He added that he apologised directly to Lenz as well. The CEO said he had asked Lenz not to record meetings earlier as well.Out Of The BottleHJ Heinz, the world’s largest ketchup maker, said it plans to eliminate 600 jobs across North America. The move follows the $28-billion sale of the firm to Warren Buffett’s Berkshire Hathaway and private equity firm 3G Capital earlier this year. “Our new organisational structure will simplify, strengthen and leverage the company’s global scale, while enabling faster decision-making, increased accountability and accelerated growth,” said Michael Mullen, a Heinz senior vice-president. The eliminated positions are all white-collar jobs, with 350 layoffs at the firm’s Pittsburgh headquarters. The cuts follow a June shakeup that saw 11 top executives leave. After the cuts are complete, the firm will still employ around 6,000 people across North America.Orient Calling Whirlpool Corp said it will buy a majority stake in China’s Hefei Rongshida Sanyo Electric for $552 million as the world’s largest maker of home appliances seeks to expand its sales in Asia. Hefei Sanyo, which makes washing machines, microwaves and refrigerators sold under the Sanyo, Rongshida/Royal Star and Diqua brand names, competes with big Chinese firms such as Haier Electronics and GD Midea. It reported a net profit of $48 million on sales of $636 million last year.Cutting The CordFoxconn Technology, known for assembling Apple’s iPhones, will decide by year-end whether to branch off into unconventional new territory: making solar panels in China. It’s an industry plagued by overcapacity, and panel prices have tumbled by over two-thirds in two years. Yet, some say Foxconn — which has been testing the market for two years — may end up timing it right, moving in just as the sector shows some signs of stability. It intends to cut its reliance on Apple, which accounted for around 60 per cent of its parent firm Hon Hai’s $100-billion-plus revenue last year.A Speed Bump The pace of economic growth has slowed in Japan, casting doubt over its ambitious stimulus plan and a planned tax hike. Its economy grew at an annual rate of 2.6 per cent in the second quarter of 2013, as ooposed to an expected 3.6 per cent increase. Markets hope this will cause policymakers to delay or suspend an unpopular tax increase — doubling consumption tax to 10 per cent by 2015 — that can take a bite out of growth just when the bold economic stimulus plan appears to be bearing fruit.The Penny DropsSeven people who ran a more than $140-million scheme that preyed on investors in 35 countries by fraudulently inflating the price of penny stocks were recently arrested in the US. Two other people, including the alleged mastermind, were charged but remain at large. The scheme led to one of the largest international penny stock investigations ever conducted by the US. The defendants used US securities markets as a platform to run elaborate fraudulent schemes, including wire fraud and false personification of Internal Revenue Service employees, an attorney said, adding, “where others saw citizens of the world, the defendants saw a pool of potential marks”. Telling NumbersBanks cut 5,500 branches across the European Union (EU) last year, 2.5 per cent of the total, leaving the region with 20,000 fewer outlets than it had when the financial industry was plunged into a crisis in 2008. Last year’s cuts come after 7,200 branches were axed in 2011, according to data from the European Central Bank. EU banks have been closing branches to trim operating costs and improve their battered earnings. Consumer take-up of online and telephone banking services has accelerated the trend. The data shows EU banks cut 8 per cent of branches in aggregate in the four years to the end of 2012. Greece saw one of the biggest cuts, shedding 5.7 per cent of its outlets.The Power Of TwoThe German and French economies grew faster than expected in the second quarter, bettering a widely heralded expansion in the US and pulling the euro zone out of a year-and-a-half-long recession. The increased pace was primarily driven by renewed business and consumer spending in the 17-country bloc’s two largest economies. The euro zone economy was fragile overall, however, with some countries, notably Spain and Italy, still struggling. The 0.3 per cent euro zone growth for the three months to June meant a nascent recovery was on a more solid footing. The EU has been in a debt crisis for more than three years. France grew by 0.5 per cent, and Germany by 0.7 per cent.(This story was published in BW | Businessworld Issue Dated 09-09-2013)
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Gold prices took another jump of Rs 515 to scale an eight-month high of Rs 31,525 per ten gram in Delhi on Saturday, 17 August, sustained buying by stockists and investors.After its biggest single day rise in two years yesterday, the precious metal advanced to a level last seen on December 18, 2012 due to tumbling rupee and stocks.The rally in precious metals sparked after rupee plunged to all-time low of 61.65 against American currency, raising fears the dollar-denominated metal would become costlier and restrict supply into the market after the RBI prohibited inward shipment of gold coins.Investors rushing to bullion as a safe haven following free fall in equities and forex further influenced the market sentiment. Firming global trend was another positive factor for the precious metals."Melting equities and depreciating rupee have left no other option for the investor fraternity but to park their funds in bullion," said Surender Jain, Vice President of All India Sarafa Bazar.Restricted supply after government increased import duty on the metal to 10 per cent on August 13 and firm global cues supported the upsurge in the metal, he added.The latest measures by RBI and the government are part of a series of steps taken to curb gold import, a major contributor to the widening current account deficit.Silver followed suit and shot up further by Rs 1,365 to Rs 50,685 per kg on increased demand from industrial units and coin makers.In the national capital, gold of 99.9 and 99.5 per cent purity advanced by Rs 515 each to Rs 31,525 and Rs 31,325 per ten grams, respectively.Sovereign followed suit and climbed by Rs 200 to Rs 24,900 per piece of eight gram.Similarly, silver ready added Rs 1,365 to Rs 50,685 per kg and weekly-based delivery by Rs 1,315 to Rs 50,535 per kg, after steep rise of Rs 3,270 in the previous session.Silver coins spurted by Rs 1,000 to Rs 87,000 for buying and Rs 88,000 for selling of 100 pieces.(PTI)
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The country's foreign exchange reserves rose by $1.434 billion in the week ended 9 August, after dropping by $2.99 billion previous week, the Reserve Bank of India said. Total reserves rose to $278.601 billion as against $277.167 billion in the week ended 2 August. Foreign currency assets (FCA), a major component of the forex reserves, also increased by $1.453 billion to $251.349 billion in the week, according to the RBI. In the week ended 2 August, FCA dropped $2.155 billion to $249.895 billion. Foreign currency assets expressed in US dollar terms include the effect of appreciation or depreciation of the non-US currencies, such as the Euro, Pound and Yen, held in the reserves. During the week, the gold reserves remained unchanged at $20.747 billion, the central bank said. For the week under review, the special drawing rights (SDRs) were up by $45.4 million to $4.398.2 billion, while the country's reserve position with the International Monetary Fund (IMF) fell by $64.7 million to $2.107 billion, the RBI data showed. (PTI)
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Education solutions provider Educomp Solutions said on Friday, 16 August, it has cut 3,500 jobs in the last three months and has also initiated measures to spur growth."Educomp has announced a slew of measures aimed at putting the company back on a growth trajectory at a time when market sentiment is adversely impacting bottom lines across industry and has pushed the education sector into negative growth territory," it said in a release.The plan entails modifications in structure, systems and sales strategies to return the firm to profitability in the current and following fiscal. Within this transformational plan, a series of tactical steps have been identified to fast-track the correction, it added.Redundancies are being calibrated in a progressive manner and employee strength is being rationalised. Contracts of unproductive staff are being terminated, while enhancing responsibilities among existing staff to control costs without impacting performance, it said."Over the last 3 months, the company has let go over 3,500 employees. This alone has the potential of significant savings for the company," Educomp added.Collections are being prioritised and a zero-tolerance regime for recoveries has been initiated and around 750 schools which have delayed payments have been sent notices, it said."While Smartclass has always enjoyed a loyal customer base, 750 non-compliant schools which represent less than 5 per cent of the installed base have been asked to show cause for their repeated delays," Educomp Smartclass COO Divya Lal said.Recently, the Gurgaon-based firm outsourced its service and maintenance logistics to HCL Infosystems in a bid to exploit efficiencies of scale as well as provide specialist services to existing and new customers.The company is targeting a reduction in operational costs of close to 20 per cent over the last fiscal due to these measures.(PTI)
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Seeking to calm rattled investors, the government and RBI on 16 August' 2013 said there was no reverting to capital control regime -- the fear of which spooked stock market, sent rupee to its lowest level and pushed gold prices up by a record Rs 1,300 per 10 gm. On a day when Sensex fell nearly 770 points or 4 per cent and rupee breached 62 to a dollar on concerns among large investor of capital curbs, the government and RBI went into fire-fighting mode assuring there was no move to check repatriation of funds by FIIs. "They are saying that a capital control is coming in... There is no question of us putting any restriction on outflows which are commercial in nature, which means whether it is FII sell...," Economic Affairs Secretary Arvind Mayaram told reporters here. He further said: "there is no control of outflows of dividends, profits, royalties, or on any kind of commercial outflows which happen in the normal course". Top sources in Reserve Bank blamed "unwarranted rumours" about controls on FII money to the nearly 770 point drop in the benchmark Sensex and rupee dipping to record low of 62.03 intra-day. India, RBI sources said, had no record of keeping controls on FII money and the capital outflow measures announced on Wednesday were no way bringing back the control regime. To restrict the outflow of foreign currency, the RBI had on August 14 announced stern measures, including curbs on Indian firms investing abroad and on outward remittances by resident Indians. The central bank reduced the limit for overseas direct investment (ODI) by domestic companies, other than oil PSUs, under the automatic route from 400 per cent of net worth to 100 per cent. Higher levels of ODI would now need prior approval from RBI. The measures taken by the RBI cannot be called capital control measures and they had more to do with reducing stress on the balance sheets of corporates, a finance ministry official said. A Finance Ministry official said if the government is taking measures to increase capital inflows, it is part of the package to take measures to discourage outflows. "With rising NPAs, corporates are getting more and more into difficulties... So looking into their balance sheet before they are allowed to invest abroad is all that has been proposed. Hence, it is not capital control," he added. Steps by RBI and government since July to tighten cash supply, restrict currency derivatives and curb gold imports have failed to arrest the rupee's slump to record lows. The situation has been compounded as the nation struggles to attract capital to fund a record high current account deficit. The rupee has weakened 28 per cent in the past two years, the biggest tumble since the government pledged gold reserves in exchange for loans from the International Monetary Fund in 1991. Mayaram said the stock markets in India seem to be operating on sentiments and government is fully cognizant of the situation. "Whenever required, policy initiatives will be taken with a view only to create stable environment for rupee. We will see when it is required, we will take appropriate measures." He said: "We will take all measures to create stable environment for the rupee. We will try and prevent volatility in the rupee. It does not mean we have any intention of defending the rupee at any particular point," he said. Sources said throughout the history of Indian reforms, not once was it contemplated to control or restrict FIIs taking out their principal or dividend. Under FEMA Act, it will be illegal to stop any such repatriation, they said.(PTI)
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Fearing spurt in attempts to smuggle gold into the country, financial intelligence agencies and customs department are keeping extra vigil and minutely scanning suspected passengers and commercial consignments. Officials of the Directorate General of Revenue Intelligence (DRI), mandated to check smuggling and evasion of customs duty, are coordinating with other agencies' staff posted at major transit points, including airports and international borders, to check gold smuggling and have alerted their field formations to remain more vigilant. Sources said the customs department is scanning credentials of suspected cargo coming from Gulf countries and other nations like Malaysia to foil any bid to smuggle precious metal inside the country. Officers of the Customs Overseas Intelligence Network posted abroad have also been asked to keep a hawk eye on any suspected consignment originating from there, they said. "There have been some frequent incidents of gold smuggling this year. All officials posted at airports, cargo stations and land borders are keeping extra vigil to check any such incidents," a DRI official said. Officials said the recent hike of 10 per cent in customs duty for gold by Finance Ministry may see increased attempts of smuggling of the yellow metal. The duty ongoldand platinum was raised from 8 per cent to 10 per cent, while the levy onsilverwas hiked by 4 per cent this week, according to a Finance Ministry notification. Ten gram gold is being sold at about Rs 29,825 in Delhi's bullion market. Owing to huge domestic demands, the import ofgoldhad gone up by a huge 87 per cent from 205 tonnes in April-July 2012 to 383 tonnes during the corresponding period this year. In value terms, the increase was 68 per cent - from Rs 56,488 crore to Rs 95,092 crore. Gold Consumption At 310 Tonnes In Q2, Highest In 10 YrsIndia's consumption of gold rose to 310 tonnes in the second quarter ended June, highest in the last 10 years, despite government curbs to restrict imports to rein in burgeoning current account deficit, a World Gold Council (WGC) report said Thursday. Much of the demand was met by stocks that had been built up to healthy levels following the April price drop. Imports more than doubled to 338 tonnes in April-June of this calendar year, it said. Gold consumption stood at 181.1 tonnes in the same quarter last year. "Consumers in India showed continued strong appetite for gold, with recent government measures to curb demand having had little impact on the quarters figures. Consumer demand was 310 tonnes, up 71 per cent on last year," the WGC said in its latest report. According to WGC India Managing Director Somasundaram PR, "Gold demand in Q2 was best in the last ten years." The fall in the gold price last April resulted in an increase in jewellery demand by more than 50 per cent to 188 tonnes in Q2 this year from 124 tonnes in the year-ago period, while bar and coin consumption reached a record high at 122 tonnes from 56.5 tonnes in the review period, he said. The introduction of restrictions on payment terms for gold imports in May and an increased import duty in early June to 8 per cent created uncertainty in the market but had a "limited impact on end-user demand," he added. India, the world's biggest buyer of gold, has been trying to curb imports of the yellow metal, which is the second biggest imported item after crude oil. On 13 August, the government raised import duty on gold for a third time in eight months to 10 per cent from 8 per cent. (PTI)
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Potash buyers India and China are seeking aggressive price cuts of 25 per cent or more as they press their advantage over producers after the collapse of a major cartel. Russia's Uralkali rocked the global potash market late last month when it quit one of the world's two big cartels and forecast prices of the crop nutrient could fall to $300 a tonne. India is aiming for an 11 per cent discount off already agreed deals for the rest of 2013 -- saving $90 million-plus -- citing a weaker rupee and a trade-off between price and future sales growth. China wants to pay less than $300 a tonne for new contracts for the second half of 2103 and 2014, down sharply from $400 a tonne in the first half and $470 last year, pointing to its high stocks of the fertiliser and rising domestic output. "Prices above $300 will not be accepted by Chinese buyers, who are now facing high inventories at home and sluggish sales," Wei Chengguang, chairman of China Potassium Salts Industrial Association, told Reuters. "Chinese importers have been losing money in the first half and last year from high import prices," he added. China and India are two of the world's biggest users of the crop nutrient. China imports about half of the 10-11 million tonnes it uses each year. Potash use in India, which relies on imports, has slumped from about 6 million tonnes to 3.5 million tonnes due to rising prices. Cartel CollapseUralkali's decision to abandon Belarussian partner Belaruskali in the BPC cartel and boost its sales has encouraged buyers to expect increased production and greater competition. "Uralkali will ignore pricing parameters and will try to maximize production and sales volumes, trying to raise its share in the markets where the company has competitive pricing advantage - India, China, Brazil," chief executive Vladislav Baumgertner said at the time. The BPC and North American Canpotex cartels accounted for nearly 70 percent of global potash sales. Spot prices have slipped up to $50 in Brazil to $390 a tonne, while Uralkali has cut its potash price to China by $20 a tonne, Scotiabank analyst Ben Isaacson said in a research note. India, which agreed in February to buy nearly 4 million tonnes of potash in 2013 at $427 per tonne on a cost and freight (CFR) basis, is seeking a discount for the more than half of the contracted nutrient which has yet to be landed at ports. "We had asked for reduction to compensate 11 percent weakening of rupee," P.S. Gahlaut, managing director at top potash importer Indian Potash Ltd (IPL), told Reuters in a text message. "So far no confirmation (from sellers), but we are hopeful," said Gahlaut, who has been leading negotiations with potash suppliers on behalf of Indian buyers. The Indian rupee has fallen more than 10 percent against the U.S. dollar since companies signed potash imports deals in February and is trading around record lows. An official with a leading Indian co-operative fertiliser company said he expected most sellers would offer a discount to India in order to win new contracts. "There is competition among sellers. India is asking to dispatch at $380 per tonne, but the way inventory is building up at the seller's end, I don't think they will have any problem in accepting this price," the official said. Volume Trade-off?Uralkali and Potash Corp of Saskatchewan <POT.TO> declined to comment on possible negotiations with India, but an industry source at a producer outside Canpotex and the former BPC cartel discounted talk of price cuts. "I can't see India getting any reduction in prices on existing contracts," the source said. There had been a lot of "noise" from India on re-negotiating prices and, in one case, a buyer contacted the firm to seek lower prices but did not send in an official request, he said. A Russian industry source said the pricing of a signed potash contract had never been changed in the past. But the source pointed to a possible precedent in the phosphate market, when Phosagro agreed in 2011 to a discount on its contract with India in return for a pledge to purchase higher volumes. India has said its potash consumption, which has been squeezed by higher prices, could return to levels around 6 million tonnes a year last seen in 2008/09 if suppliers made big price cuts. However, Chinese officials said its push for lower prices would not be linked to increased purchases. China's domestic potash output would exceed 6 million tonnes in 2013, up from about 5.4 million tonnes in 2011, while domestic stocks would rise above 5 million tonnes. "Even with the price fall, I don't expect China to increase imports because of large inventories, while domestic production has been expanding. Imports should decrease gradually on a year basis," said the industry association's Wei. (Reuters)
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The Reserve Bank of India said on Wednesday banks can exempt some foreign currency non-resident bank (FCNRB) deposits and non-resident external (NRE) rupee deposits when calculating their cash reserve and statutory liquidity ratios. The RBI said in a statement that starting from the bi-weekly cycle starting on 24 August, incremental three-year foreign FCNRB and NRE deposits with reference base dates of 26 July and above will be exempted from the cash reserve and statutory liquidity ratios. The cash reserve ratio is the proportion of cash deposits banks have to keep with the central bank in cash and the statutory liquidity ratio is the proportion that lenders must buy into government securities. The RBI also said it raised interest rates on longer-term deposits accounts held by non-residents. On foreign currency non-resident bank (FCNRB) accounts with maturities of 3-5 years, the central bank said it raised the interest rate ceiling to LIBOR plus 400 basis points from LIBOR plus 300. The RBI removed the ceiling on interest rates on non-resident external rupee deposits with maturities of three years and above. (Reuters)
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India imposed restrictions on foreign exchange outflows and gold imports on Wednesday, 14 August, in a new attempt to prop up the rupee, as a spike in inflation added pressure on policymakers to curb a crippling external deficit. Finance Minister P. Chidambaram also reiterated his pledge to narrow the current account deficit - the main source of the rupee's weakness - to 3.8 per cent of gross domestic product this fiscal year and said the currency would not be allowed to slide into "free fall". The Reserve Bank of India's latest steps to support the currency, which has plumbed record lows against the dollar, included cutting the amount of overseas direct investments allowed by Indians. Those investments reached $3.2 billion in July, according to central bank data. Separately, the central bank banned imports of gold coins and bars, which constituted about 36 per cent of total billion demand in India last year, and will require domestic buyers to pay cash for the yellow metal, among other measures. "This is obviously an extreme action, but these are extraordinary times and require extraordinary measures," said Sujan Hajra, chief economist of brokerage Anand Rathi in Mumbai. The steps came as data showed the headline inflation rate jumped above the central bank's target range of 4 to 5 per cent in July for the first time since March, making it even harder for the bank to refocus on supporting India's slowing economy. The Indian authorities fear continued falls in the rupee will exacerbate the current account deficit in the short term, deter investment and further curb growth in Asia's third-largest economy. Central bank action to tighten rupee liquidity in mid-July and other steps have failed to halt the slide in the currency, which set new record lows on 6 August. Chidambaram sought to address scepticism in financial markets since he first announced on Monday his target to cut the current account deficit to $70 billion, or 3.8 per cent of GDP, from a record high 4.8 per cent in the year ended in March. Proposals announced on Tuesday to raise duties on gold and silver imports in a bid to curb demand have also failed to convince investors, who believe stronger measures are needed. "I make a commitment on the current account deficit on behalf of the government. We will leave no stone unturned to contain the current account deficit at about $70 billion," Chidambaram told lawmakers on Wednesday. "We cannot allow the rupee to go into a free fall." The partially convertible rupee slipped to 61.45 per dollar on Wednesday. It is down 2.5 per cent since the RBI launched its major support effort on July 15, which included raising short-term interest rates. However, the RBI on Wednesday also sought to ease some of the liquidity constraints at banks by exempting some requirements on the types of cash and government securities lenders must keep with the central bank. Chidambaram also said that the central bank's mandate must include growth and employment, while Arvind Mayaram, economic affairs secretary, told reporters that any measures put in place would not be permanent. "As and when we believe that the speculative pressure on the rupee is easing and the rupee is finding its stable environment, then the Reserve Bank of India and the government of India will revisit these restrictions and take an appropriate decision," Mayaram said. Traders had previously criticised mixed signals from government and central bank officials, saying it raised doubt about their resolve and contributed to the rupee's weakness. Ugly InflationIndia's headline inflation rate, measured by the wholesale price index, accelerated to 5.79 per cent annually in July from 4.86 per cent in June, data showed on Wednesday. With fears growing that India is headed into a phase of slowing growth and high inflation, 10-year bond yields surged to as high as 8.55 per cent, their highest in more than a year. Analysts said the bad news on inflation, particularly on prices for imported oil prices, was due in part to the rupee losing 12 per cent against the dollar since the start of May and higher food prices. "The July print for headline inflation is very ugly," said Rupa Rege Nitsure, chief economist at Bank of Baroda in Mumbai. "Despite an acute slowdown in domestic demand, the manufacturing prices have remained elevated due to rising input costs on account of massive depreciation of rupee." The need to bolster confidence has become more pressing. Foreign investors have sold a net $11.6 billion in debt and equities since late May, a bad omen given markets could weaken more when the US Federal Reserve rolls back its monetary stimulus. Ultimately, analysts say Prime Minister Manmohan Singh's minority government will need to implement bolder reforms to restore the economy, notably by improving the investment climate and expediting infrastructure projects. Whether they can do so remains in doubt, given the government faces political gridlock ahead of general elections due to be held by May 2014. (Reuters)
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State utility NTPC will seek another 4 million tonnes of thermal coal shipments in this financial year, following its current tender to import 5 million tonnes of the dry fuel to bridge an expected shortfall in local supplies.NTPC, India's top power producer with an installed capacity of 41,184 megawatts, has an annual import need of 16 million tonnes of coal in the year to March 2014, up 65 per cent from a year ago, when delays in awarding contracts trimmed shipments.NTPC could not import its estimated 16 million tonnes of coal last fiscal year "because of some procedural problem," said an NTPC official, who did not wish to be identified.It is, however, open to importing more if there is a compelling opportunity in this fiscal year, the official said."If we are able to get a good price, if everything is fine, if it goes our way, may be we will import more. Why not?"Coal fuels more than half of India's power generation, but domestic production has not kept up with demand from the power sector, leading to power cuts that crimp growth and result in costlier imports.The power producer is seeking a total of 5 million tonnes of thermal coal through seven tenders for supplying its various power stations spanning the country, for which last date for submission of bids is 6 September, the official said.These are on top of the 7 million tonnes of the fuel that is being delivered to the power producer since April.Shortfall"We plan to import 16 million tonnes of coal in 2013-14, which works out to around 28 million tonnes equivalent after adjusting for the higher energy value of imported coal," said the official.India produces mostly low-grade thermal coal with high ash content. About 70 per cent of the fuel Coal India produces has an energy value of 4,300 Kcal/kg or lower.NTPC requires 178 million tonnes of coal this fiscal year to fuel its generators, said the official. Of this, it expects to source 145 million tonnes locally, signing agreements with Coal India, which produces around 80 per cent of the country's coal.This along with the 16 million tonnes of imported fuel - equivalent to 28 million tonnes of local coal - leaves a fuel shortfall of 5 million tonnes for the power producer."We plan to get the balance 5 million tonnes from e-auction and from our own mine in Pakri Barwadih in this financial year," the official said, referring to Coal India's spot sales and NTPC's captive coal block in the North Karanpura Coalfields in the northeastern Jharkhand state.For the current tender, only shipments with below 32 per cent moisture, 20 per cent ash and 0.90 per cent sulphur, with gross calorific value in the range of 5,300-5,800 Kcal/kg would be considered, the tender document on its website showed.Successful bidders will need to deliver the coal from port to several NTPC power stations across India, the official said.NTPC said it expected the successful bidders to supply the coal within four months of it issuing the delivery schedule.India's coal imports in this fiscal year could hit 165 million tonnes to meet the local supply shortfall, another record after total imports crossed 135 million tonnes in 2012-13.(Reuters)
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