INDIA FOLIO

Vol.3 No.5

Embassy of India ~ Copenhagen  

 May 15, 2002

 

INDIA-DENMARK


Denmark’s Foreign Minister Meets Mr Jaswant Singh

The visiting Danish FM Per Stig Moeller called on EAM, Mr Jaswant Singh on April 30.  The discussions between the two FMs revolved around bilateral relations, EU expansion, Danish Presidency of the EU, international terrorism and regional security. 

 

CII Official Visits Denmark

Ms Neerja Bhatia, Deputy Director of CII visited Copenhagen on April 19 to participate in a preliminary meeting organised by the Confederation of Danish Industries (DI) to discuss preparations for the India-EU Business Summit scheduled for October 2002. 

Mr Ajay Khanna Deputy Director-General CII would also be visiting Copenhagen on June 4 to hold meetings with senior officials of the Confederation of the Danish Industries (DI), preparatory to the India-EU business summit in October 2002.
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POLICY

National Health Policy Cleared

The Union Cabinet chaired by the Prime Minister of India, Mr. Atal Bihari Vajpayee, has cleared the National Health Policy for 2002, envisaging a hike in health sector expenditure, mandatory two-year postings in villages for new doctors, revival of primary healthcare system, and enhancement in spending for public-funded research.  The Policy seeks to increase health sector expenditure to 6% of India’s GDP, with 2% of GDP being contributed as public health investment by the year 2010.

SEZs Get their Tax Holiday

The Government of India has offered full income-tax exemption to SEZ (Special Economic Zone) units for five years. Still, trade and industries were expecting full tax exemption for 10 years. However, the Finance Minister of India, Mr. Yashwant Sinha has also offered SEZ units 50% income-tax exemption for a further 2 years, thus extending to waiver to seven years.  The concession is available to SEZs commencing operations after April 1st 2002.n  

ECONOMY


India and China Cushioned Global Recession!

 According to a report prepared by Morgan Stanley Dean Witter, India came next to China in cushioning the recent global slump. The report concludes that “were it not for the resilience of India and China, the world economy would have been in deep recession in 2002”, and adds that “it is hard to believe that two otherwise poor countries have finally reached the point in their development cycles, where they can exert such influence on the world at large”.  Referring to data, the report further states that “collectively, these two countries accounted for 1.1%, or 44% of the 2.5% growth in world gross domestic product in 2001” (Together, India and China account for a 16.8% share of the global GDP).  Without India and China, there would consequently have been little doubt about the global recession call, and world GDP growth would have been closer to 1.5% in 2001, matching the second-worst performance by the global economy during the past 30 years. 

 

IMF Pegs India’s Growth Rate at 5.5% in 2002

The International Monetary Fund has declared that economic growth should remain buoyant in India this year and next. In its semi-annual publication World Economic Outlook, the IMF thus reports that India’s economy is anticipated to grow by a pace of 5.5% in 2002 and 5.8% in 2003.  n  

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FOREIGN INVESTMENTS


January-March 2002 FDI Inflows Surge by 43%

 Foreign direct investment (FDI) inflows into India during the first quarter of the current calendar year have recorded a 43% growth, in actual figures increasing to the amount of US$ 1.35 Billion as against total FDI inflows amounting to US$ 0.94 Billion received during the corresponding period of 2001.

According to an Accenture study, India can furthermore expect FDI inflows over the next 5 years to the tune of a stunning US$ 75 Billion into its manufacturing sectors, growth rate of which also possesses the potential to nearly double from 6% to 11% per annum.

 

Indian Telecom Sector Records Soaring FDI in 2001

India has become a favoured destination for foreign direct investment in telecom, FDI worth approx. US$ 800 Million having been recorded in this sector alone in 2001. – Value of approved FDI in India’s telecom sector ever since August 1991 till January 2002 moreover adds up to no less than US$ 1.7 Billion, thereby exceeding 20% of all FDI approved during this decade.

 

‘Best Investment Target Outside the US’

India’s largest equity investor Warburg Pincus LLC has termed the country “the best place in the world outside the US to invest”, its managing director declaring that “while we hate to reveal our secrets, we believe that India’s extraordinary dynamism has created an environment which makes India, arguably, the best place outside the US to invest in the world”. He added that India’s steady move towards a market-based economy and successful efforts to deregulate key industrial sectors continue to make the country attractive to US private equity firms. Warburg Pincus itself has invested more than US$ 670 Million in Indian companies, its biggest exposure in the Asia-Pacific region.

 

Government Examining Preferential Treatment in Infrastructure

 The Government of India is examining the option of allowing companies in the infrastructure sector, especially telecom, to defer depreciation or dip into their reserves to pay dividends on preference shares held by foreign investors.

It is perceived that such a facility would help the Government to overcome the catch-22 situation presented by cases involving breach of sectoral caps on account of the exercise of voting rights emanating from non-payment of dividends on such preference capital.

 

INFORMATION TECHNOLOGY


29% Growth in Indian Software Exports

In the fiscal year April 2001-March 2002, Indian software exports registered an impressive growth of 29%, their value touching US$ 7.3 Billion as compared to US$ 5.7 Billion in the fiscal year April 2000-March 2001, the Natonal Association of Software & Service Companies in India (NASSCOM) has reported. NASSCOM has also forecast a 30% growth rate in India’s software exports to result from the fiscal year 2002/2003.

Despite the extremely challenging environment, India’s IT services industry also clocked a 22% growth rate, while its IT enabled services industry grew by no less than 71% in the fiscal year 2001/2002.

IT to Contribute 7.7% of GDP by 2008

The Planning Commission of India has stated that IT products and services are projected to contribute 7.7% of the country’s GDP by the year 2008, rising from the present level of 1.7%. – The Commission’s Deputy Chairman commented that IT products and services should be made available in major Indian languages in order to expand their reach, that India’s IT spending constituted about 0.7% of the country’s GDP as compared to, for instance, 2.5% in Singapore – and that the ICT (information, communication, & telecom) sector was a high employment growth sector, expected to provide jobs to 7 million people by the year 2008.

India & South Korea Sign Agreements for Promoting Bilateral IT-Cooperation

 India and South Korea have signed two agreements for further strategizing co-operation between the two countries within the IT sector. Both countries signed a Memorandum of Understanding on establishing “The Joint Korea-India E-Governance Task Force” between the National Computerization Agency of the Republic of Korea and the National Informatics Centre under the Department of Information Technology in the Ministry of Communications & IT in New Delhi.

The focus of this task force is to collaborate on identifying best practices in the use of IT in Government. It will also identify possible applications that would facilitate the e-governance agenda in the respective countries.

 

India Proposes Global Cyber Pact to UN

India wants the United Nations to be a peacekeeper – also in Cyberspace. In this respect the Indian IT & Communications Minister, Mr. Pramod Mahajan recent met the UN Secretary General, Mr.Kofi Annan, who agreed to work with this aim.

 India has also proposed the creation of a cyber-crime protocol that should receive the ratification of all nations. It is believed that the UN has also been requested to set up a high level expert group with the purpose of drafting an international agreement meant to define cyber-crime and identify ways to counter its various forms.


SAP to Invest 23 Million Euro in Indian Lab

SAP AG, leading German provider of inter-enterprise software solutions, has earmarked 23 Million Euro with the purpose of investing in expanding the operations of SAP Lab India during the current calendar year. SAP Labs India is also planning to increase its headcount from the present 500 to 750 by the end of the year, being among SAP AG’s 8 global research labs and playing a major role localizing SAP’s products and technology for India and the Asia-Pacific region. Meanwhile, SAP Labs India has also announced ‘mySAP’ technology for India and the Asia-Pacific; mySAP technology further opens SAP’s Web services architecture with native support for open technical and business standards.


Xansa in Joint Venture with Tamil Nadu Government for IT Park

British company Xansa is to partner the Government of the constituent state of Tamil Nadu in setting up an IT park at the Siruseri village near Chennai (Madras). The Tamil Nadu Industrial Development Corporation and the state government-run Science & Information Technology Parks will partner in Xansa’s venture.

Xansa already has a presence in Chennai, Mumbai/Pune, and in Noida near New Delhi.  

 

Snecma Sets up Indian Branch

Leading French aerospace company Snecma announced on May 8th 2002 the setting up of its Indian subsidiary/design & research centre at Bangalore. The subsidiary, called Snecma Aerospace India (SAI), comes with an initial investment of US$ 4 Million and will perform studies and develop engine components, aircraft equipment, and onboard software at its Bangalore centre at a later stage in co-operation with the Indian aerospace industry.  

 

Virtusa to Invest US$ 1.5 Million in Hyderabad Center

US-based company Virtusa Corporation (formerly eRUNWAY Inc.) providing technology innovation services and having offices in Hyderabad and Sri Lanka – has launched its global corporate identify and intends to invest US$ 1.5 Million in its Hyderabad centre on infrastructure development.

 

New Horizons in Indian Joint Venture

The world’s largest independent IT training company, US-based New Horizons has entered India in order to set up operations through a joint venture with Shriram Global Technologies & Education Ltd, a Shriram Group Company. According to New Horizons’ Senior Vice President – International Operations, Mr. Robert Shaw, the company plans to establish 100 centres in India over the next 3 years by means of an investment of US$ 5 Million.

TCS Opens Uruguay Centre

Tata Consultancy Services, Asia’s largest software solutions and consulting services company, has kicked off operations in Uruguay by opening a global development centre in the free trade zone of the Uruguay capital Montevideo, planning to invest US$ 30 Million in the GDC over the next 5 years and recruit about 500 personnel for its Uruguay operations.  n

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MISCELLANEOUS

Auto Sector to Double Contribution to Indian Economy by 2010

The Government of India has liberalized the auto sector entirely and has allowed 100% FDI without any minimum capitalization norms, hence paving the way for further foreign investments.

With the announcement of the new auto policy, India’s auto sector is now poised to take a major leap and is expected to have doubled its contribution to the economy by the year 2010. At present, the auto sector employs 15 Million Indians and contributes 17% of total taxes. Cumulative car sales in the fiscal year April 2001-March 2002 stood at 570,000 units, while exports of cars from India jumped from just 23,000 units in the fiscal year 2000/2001 to 50,100 units during fiscal year 2001/2002 primarily due to the car exports performed by Ford India.

Indian Cement Standard to be Benchmarked with Europe

 The Commerce Ministry of India has decided to align the Indian standard of cement with the European standard. Till now, the two standards have had different grades and specifications in terms of chemical analysis and physical requirements like strength and test methods. The alignment would lead to uniformity in standards.

The Indian cement industries possess state-of-the-art plants, that produce high-grade cement. The new initiative would lead to a new branding system in the industry; most existing cement brands would cease to exist, and the branding will be more in line with the international system.   n

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FORTHCOMING EVENTS

8th Delhi Book Fair & Stationery Fair

                                August 24th – September 1st 2002

 

      Venue: Hall No. 12A, Pragati Maidan Fair Ground, New Delhi

 

                For further details, please contact :
 
                  
Mr. Tanvir Ahmad, Senior Manager
                   Domestic Fairs Division
                   India Trade Promotion Organization
                   Tel : 00 91 11 33 79 038
                   Fax   : 00 91 11 33 71 869
                   E-Mail: itpo@giasdl01.vsnl.net.in

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Published by Economic & Commercial Section, Embassy of India, 15, Vangehusvej, DK-2100 Copenhagen, Tel: 39290854, Fax: 00 45 39270218 E-Mail: india@email.dk    
Website: https://www.indian-embassy.dk/

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