Friday, August 29, 2014

Modi Government Drops Rs. 6000-Crore Foreign Chopper Plan, Wants 'Made in India'

In a move to boost the fledgling defence manufacturing industry, the Narendra Modi government has decided not to buy Light Utility Helicopters from foreign manufacturers and instead, get them made in India.

Sources told NDTV the government has decided to cancel the global tender to procure the helicopters and has asked the Indian industry to step in.

The move, which could result in business worth Rs. 40,000 crore for the Indian industry, is in line with the Prime Minister's "Make in India" mantra. It also marks a shift in the country's defence equipment procurement policy - the new focus being "Buy from India".

Currently the Army and the Air Force use the vintage Cheeta and Chetak helicopters for reconnaissance, rescue and casualty evacuation. At least 197 helicopters will be required to replace the aging fleet.

At least three Indian business giants - Tata, Reliance and Mahindra - have taken the initial steps to open military hardware production facilities in India. The Union Home Ministry is understood to have cleared a proposal from the Tata Group to produce helicopters in India.

India is one of the biggest arms importers in the world and spends as much as 2 per cent of its GDP to purchase weapons from foreign companies. The decision to make the LUH here will give Indian firms assured orders and provide incentive for investing in research and development.

The flipside is that the military will have to wait at least five years for the choppers.

The government has also cleared the purchase of integrated anti-submarine suits for 11 frontline warships.

Although the Navy has been steadily adding warships to its fleet, these are vulnerable to submarine attacks since they do not have the Active Towed Array Sonar, or ATAS. Attached to the rear of ships, the ATAS is the key weapon to detect submarines.

The instrument, which is now being developed by the Defence Research Development Organisation, is likely to cost the exchequer Rs.1,770 crore.

Besides, in a carefully calibrated move to send a signal to the United States prior to the Prime Minister's scheduled visit in September, the Centre also cleared the purchase of 15 Chinook and 22 Apache attack helicopters from the US at an estimated cost of $2.5 billion.

The Centre also cleared the long-awaited mid-life upgrade of the six submarines, which would be carried out in Indian shipyards and is likely to cost a whopping Rs. 4,800 crore.

Saturday, August 23, 2014

How a Solar Crisis was Averted by Three Ministers at Midnight

Close to midnight on Thursday, there was unusual bustle at the North Block on Raisina Hill, which houses the Finance Ministry.

Outside, drivers of government vehicles and security yawned openly as a long work day stretched on. Inside, three ministers burned the proverbial midnight oil. They had to take a quick decision on a recommendation made three months earlier that would increase the cost of solar power from the midnight of August 21.

On May 22, the Congress-led UPA government had been defeated and a victorious Narendra Modi-led NDA was yet to take oath. In that "twilight period," a recommendation was made by the Directorate General of Anti-Dumping and Allied Duties, under the Ministry of Commerce and Industry, that anti-dumping duties ranging from $ 0.11 per watt to $ 0.81 per watt be imposed on solar cells, modules or panels and thin films imported to India from China, Malaysia, Taiwan and the US at below their normal value.

The recommendation would come into play at midnight of August 21. With the sector sitting on the edge of a precipice, Finance Minister Arun Jaitley stepped in to mediate between Nirmala Sitharaman, minister of state for commerce and power minister Piyush Goel. After 40 minutes of discussions, the government had a decision - it put off the anti dumping levy.

Many in the business heaved a sigh of relief; they had held their breath for three months.

Sources in the solar energy sector say the anti-dumping duty would have made solar power expensive. "If input cost rises, the cost of power generation is bound to go up. Who wants to buy costly electricity, " said an insider.

India has installed close to 2,750 MW of solar power. The power ministry, facing rising power demand and low installed capacity and acute coal shortage, has been eyeing the deployment of additional solar power capacity of about 20,000 MW by 2022. The NDA government, which took office in May, had promised to promote renewable energy and is expected to raise this target.

The spectre of the new levy had promoters threatening to abandon their projects. The worst affected would have been projects in Madhya Pradesh, Karnataka, Andhra Pradesh, Punjab, Uttar Pradesh and Chhattisgarh.

Wednesday, August 20, 2014

Indian Firms Tool up For Defence Orders on PM Modi's 'Buy India' Pledge

Some of India's biggest companies are pouring billions of dollars into manufacturing guns, ships and tanks for the country's military, buoyed by the new government's commitment to upgrade its armed forces using domestic factories.

India, the world's largest arms importer, will spend $250 billion in the next decade on kit, analysts estimate, to upgrade its Soviet-era military and narrow the gap with China, which spends $120 billion a year on defence.

Under the last government, procurement delays and a spate of operational accidents - especially dogging the navy - raised uncomfortable questions over whether India's armed forces are capable of defending its sea lanes and borders.

Even before his landslide election victory in May, Prime Minister Narendra Modi promised to assert India's military prowess and meet the security challenge posed by a rising China and long-running tensions with Pakistan.

Within weeks of becoming prime minister, he boosted defence spending by 12 per cent to around $37 billion for the current fiscal year and approved plans to allow more foreign investment into local industry to jump-start production.

Launching a new, Indian-built naval destroyer last week, PM Modi said: "My government has taken important steps in improving indigenous defence technology ... We can guarantee peace if our military is modernised."

This build-up comes as Southeast Asian nations expand their own defence industries, spurred by tensions with China. India, reliant on a state defence industry that often delivers late and over budget, risks being caught flat-footed.

"The opportunity is huge," said MV Kotwal, president (Heavy Engineering) at Larsen and Toubro Ltd, one of India's biggest industrial houses.

"We really expect quicker implementation. There are signs that this government is very keen to grow indigenisation," added Mr Kotwal, referring to increasing domestic production.

Tata Sons, a $100 billion conglomerate, said last month it will invest $35 billion in the next three years to expand into new areas with a focus on a handful of sectors including defence.

Larsen is putting $400 million into a yard to build ships for the navy, while Mumbai-based Mahindra Group is expanding a facility that makes parts for planes, including for the air force, and investing in armoured vehicle and radar production.

The companies are being lured by the prospect of lucrative returns on their investments as the Modi government has pledged to make "buy Indian" the default option for future orders.

Larsen is targeting a fourfold increase in annual defence revenue to $1 billion within the next five years.

Critics of indigenisation argue that producing gear - especially in the lumbering state sector - is more costly than buying from abroad. Such deals can add layers of bureaucracy, increasing risks of corrupt dealings.

Indian industry is renowned for its ability to adapt, yet questions remain whether the private sector can come up with the solutions needed to bring armed forces into the 21st century without sufficient access to world-class foreign technology.


Some companies are also sceptical of the government's commitment to grow the private market given New Delhi's history of delays and order cancellations, and the traditionally strong ties between the military and state-run manufacturers.

They cite the case of a $10 billion Future Infantry Combat Vehicle (FICV) programme. Conceived in 2009, the defence ministry invited three private players and the Ordnance Factory Board, a state entity, to bid for the 2,600-vehicle contract but suddenly withdrew the letter of intent in 2012.

Bidders included Mahindra and Tata, which is developing a vehicle along with Lockheed Martin Corp and General Dynamics Corp that could compete for a future contract, said Rahul Gajare, an analyst at Edelweiss Securities.

A quick decision to relaunch the programme would demonstrate Mr Modi's resolve, said SP Shukla, who heads Mahindra's defence business. Past tenders have stalled amid wrangling over whether or not to allow state manufacturers to bid and under what terms.

Larsen's Kotwal said its Kattupalli shipyard in south India has yet to receive any orders for warships or submarines despite being designed to do just that and despite past government pledges to build at least two submarines in private yards.

In the meantime, the yard has switched to constructing and repairing commercial vessels.

"The policy in India has been right since 2006. The problem has been implementation," said Rahul Chaudhry, CEO at Tata Power SED, which makes rocket launchers, sensors and radars.

Local firms have captured a fraction of the Indian defence market since it first opened to private participation in 2001. Consecutive governments have handed orders to state factories or to foreign giants like Boeing, Lockheed and BAE Systems.

Gajare at Edelweiss estimates total India private sector revenues from defence, including overseas orders, at below $2 billion last year, less than 6 per cent of the country's defence spending.

New record for Apple stock crosses $100

Apple's mojo isn't just back, it's on fire.

The tech behemoth's stock hit the highest price in the company's history -- $101.09 -- on Wednesday.

Investors are salivating over demand for the next iPhone and cheering Apple's (AAPL, Tech30)newfound willingness to spend its cash horde.

Those who follow Apple closely might be wondering how this can be the all-time high price. After all, Apple stock traded over $700 a share in September 2012.

The catch is Apple executed a stock split in Junewhere investors received seven new shares for each share they used to own. Stock splits are a somewhat common move for large companies. It didn't change the value of Apple, but it does make it easier for people to buy the stockat the lower price tag.

Uncharted territory: Taking the stock split into account, Apple closed at a record highs on Tuesday and then did it again on Wednesday. The prior closing high of $100.30 was set on September 19, 2012.

Apple also set a new record for the highest price ever paid for its stock on Wednesday. It traded as high as $101.09, knocking down the prior all-time high of $100.72 from September 21, 2012.

Investors who have stuck with Apple in recent months have been rewarded. Apple's shares have nearly doubled since tumbling as low as $55 in April 2013, crushing rivals likeGoogle (GOOGL, Tech30).

"It probably should have never gone as low as it did in the first place. Investors started worrying Apple had lost all momentum," said Rob Cihra, an analyst at Evercore Partners who covers Apple.

It's all about the iPhone: Apple is the world's largest company by market cap, and itslatest quarterly report from July offers a lot to be happy about.

IPhone sales jumped 13% from the year before to 35.2 million, driven by strong growth in emerging markets like China, Brazil and India.

Investors soured on Apple and CEO Time Cook for awhile, partly due to concerns about the company's ability to innovate without visionary founder Steve Jobs.

The need to churn out new products is highlighted by Apple's iPad sales, which shrank in recent quarters.

'Mother load' of upgrades: But the new iPhone 6, which is expected to hit the shelves later this year and feature a larger screen, has the potential to be another game changer.

ISI Group estimates there are a whopping 200 million iPhone users worldwide who want to upgrade to the new model.

"We call it the mother load of all Apple upgrade cycles," said ISI Group analyst Brian Marshall. "There's so much wood behind the arrow that we think it will be a multi-quarter upgrade cycle."

At the same time, there are rumblings that Apple will enter the smartwatch game with an "iWatch." But there's little reason to believe the iWatch will be a mega blockbuster like the iPhone or iPad.

"Unless they are able to tie it in from a health-care perspective in a very unique fashion, this is going to be a niche product. I don't think it's going to move the needle very much," said Marshall.

Shareholder friendly: Apple has also pleased investors (especially hedge fund billionaire Carl Icahn) by finally opening up its treasure chest of cash to do stock buybacks and give shareholders dividends.

"They continue to buy back a ton of stock, have a nice dividend yield and the company's valuation is not rich," said Marshall.

Apple has even shown a willingness to spend on acquisitions. In May, Apple inked a $3 billion deal to buy streaming music service Beats and recently announced a string of smaller deals.

Those who took a bite of Apple stock must be feeling good.

This is INS Arihant, First Made-in-India Nuclear Submarine

The INS Arihant, country's first made-at-home nuclear submarine is being built in top secret conditions at Visakhapatnam in Andhra Pradesh.

NDTV's Science Editor Pallava Bagla has accessed the first images of the 6,000-tonne vessel, the first of a class of three nuclear-powered ballistic missile submarines with a displacement of 6,000 tonnes. She is designed to carry four nuclear-tipped submarine-launched ballistic missiles called the K-4 which have a range of 3,500 kilometres or a dozen Bo 5 missiles which can strike targets about 700 kilometres away.

The heart of the Arihant is its nuclear reactor, an Indian designed-and-built 83MW pressurized water reactor. The Arihant still faces its biggest trial - the test launch of a ballistic missile while submerged. It is only once that happens that the Arihant will be battle-worthy.

When the submarine is declared fighting-fit, India will become one of only six countries in the world with the knowledge of designing, engineering and operating a nuclear submarine.

Nuclear submarines are the ultimate stealth weapon. Highly mobile and technically capable of remaining underwater for months if required, a ballistic missile submarine effectively gives a nuclear power like India the ability to keep shifting a mobile nuclear base which needs to be prepared to strike after authorized launch codes are transmitted from the country's nuclear command. Detecting nuclear submarines underwater has become a finely calibrated art practiced by the superpowers through decades of the Cold War. The more quiet a nuclear submarine, the more stealthy it is.

India presently operates another nuclear submarine, the INS Chakra, a nuclear attack submarine of the Akula-2 class from Russia. The Chakra does not carry nuclear weapons but would likely be deployed with the Arihant during its pre-commissioning trials to protect this key nuclear asset.

Like other key strategic weapons systems, the INS Arihant is being developed under the aegis of the Defence Research and Development Organization (DRDO), which is accountable to the Defence Ministry. Prime Minister Narendra Modi visited the agency in Delhi today and said, "At least five DRDO labs should be identified exclusively for innovation with young scientists up to the age of 35 years. They should be managed by leaders also in the same age group".(Also read: PM Modi at DRDO Flays 'Chalta Hai' Attitude)

"DRDO is becoming hollow at the bottom," says Dr Avinash Chander, the agency's chief. He said he can induct only about 70 fresh scientists every year instead of the nearly 300 recruits it used to add annually till recently.

Thursday, August 14, 2014

Top 5 Richest Indians Have Half of Nation's Billionaire Wealth

The top five Indian billionaires, led by Reliance Industries chairman Mukesh Ambani, collectively control $85.5 billion (Rs.5,21,550 crore at 1 dollar = 61 rupees) in personal wealth, accounting for nearly half (47.5 per cent) of the country's total billionaire wealth, according to a report by Wealth-X.
Of India's richest individuals, Mukesh Ambani remains at the top with an estimated net worth of $24.4 billion (Rs. 1,48,840 crore), the report by the wealth research firm said.
He was followed by steel tycoon Lakshmi Mittal, drug maker Sun Pharma's Dilip Shanghvi, IT giant Wipro's Azim Premji and Tata Sons' shareholder Pallonji Shapoorji Mistry among the top-five wealthiest individuals from India.
"The five billionaires collectively control $85.5 billion in personal wealth, accounting for 47.5 per cent of India's total billionaire wealth," Wealth-X said.
Observing that "entrepreneurialism is the key to attaining financial success in the world's largest democracy", the report further said that these five entrepreneurs have made their fortunes through their businesses in sectors such as oil and gas, steel and pharmaceuticals.
In comparison, India's wealthiest actor Shah Rukh Khan is worth $600 million (Rs. 3,660 crore), while Indian cricket legend Sachin Tendulkar retired in November 2013 with a personal fortune of at least $160 million (Rs. 976 crore), it added.
Through Reliance Industries group, Mr Ambani owns the Mumbai Indians Indian Premier League (IPL) cricket team, reportedly the most valuable team at around $112 million (Rs. 683.2 crore), it noted.
Steel tycoon Lakshmi Mittal takes the second position on the list with a personal net worth of $17.2 billion (Rs. 1,04,920 crore). He is the chairman and CEO of Arcelor Mittal, the world's largest steel making company.
Mr Mittal, 64, owns a 38 per cent stake in ArcelorMittal and 33 per cent of the Queens Park Rangers Football Club.
Sun Pharmacuetical's Dilip Sanghvi is the third wealthiest Indian on the list with an estimated net worth of $15.63 billion, or Rs. 95,343 crore, followed by Wipro chairman Azim Premji ($14.9 billion, or Rs.90,890 crore) and Tata Sons Shareholder Pallonji Shapoorji Mistry ($12.7 billion, or Rs. 77,470 crore).
All five entrepreneurs have also established philanthropic foundations in support of causes ranging from education, health, environment, social welfare and community development,  the Wealth-X report added.

Tuesday, August 12, 2014

Donald Trump Launches Trump Tower in Mumbai

American real estate mogul Donald Trump is planning "substantial investments" in the Indian property and hotel sectors, betting on Prime Minister Narendra Modi's efforts to revive the economic growth and boost infrastructure

"I do see India as a great place to invest, and I think the election made that even better," said Mr Trump, who was in India to launch Trump Tower in Mumbai, his first project in the country's financial capital, in collaboration with India's Lodha Group.

Mr Trump has entered into a licensing pact with Lodha for Trump Tower in Mumbai, a luxury residential tower that will offer its residents indoor jacuzzi tubs and world-class concierge services. He is yet to make an equity investment in the country.

"People are coming into India now that maybe would not have prior to the election," Mr Trump said. "We will make investments in India, substantial investments in India. It's a great place to invest."

"I don't know that I would have made that statement three, four, five years ago. It was different."

High inflation and interest rates have deterred home buyers in the past couple of years in Asia's third-largest economy, slowing home sales and lowering profits for the country's developers.

Home sales across big Indian cities rose by 5 percent in the June quarter from a year ago, compared with an 11 percent rise in the same quarter two years ago, according to local property research firm Liases Foras.

In a move to boost foreign investment in the sector, India this month paved the way for the market listing of real estate investment trusts, which will help debt-laden developers access cheaper sources of funding.

Mr Trump, whose property portfolio includes projects in South Korea, Turkey and Dubai, in addition to hotels and skyscrapers in the United States, said his Trump Organisation was also in talks to invest in the hotel sector in India.

The billionaire entrepreneur and television personality did not give details of his investment plans in India. He has another project under development in Pune, which is also a licensing pact.

Bangalore's Looking For 500 Bright Young IT Things.

Mayank C and his friend from his engineering college had an idea last year. Today, that idea  - an app which creates a virtual wallet - has translated into into a billion dollar company.
Mayank is 28, the sort of heady Bangalore success story that inspires the launch of nearly 10 start-ups every month in the city. He says the idea was the easy part. What came after wasn't. "We did not know how exactly to go about starting a company. We learnt from our mistakes, the first six months was about learning and not value-generation at all."
To ensure a smoother ride for thousands of aspiring CEOs like Mayank, the Karnataka government has announced the launch of a "Hack-Cellerator" - 50,000 square feet meant to serve as a laboratory of ideas, grooming school and stomping ground for 500 candidates identified as potential CEOs.

Located in Diamond District in the city centre, the 50,000-square feet warehouse can house over 100 start-ups with a dozen employees in each of them. Kick-off is November.
The government and NASSCOM, the trade association for software and outsourcing companies, will together select the inductees. "Women entrepreneurs will be encouraged. Anyone with an idea to create a social impact will also be encouraged. The more the chance the idea has to be successful, the more the merit. Applications with such ideas will have to be submitted and a committee from NASSCOM will choose the candidates. " said Srivatsa Krishna, IT Secretary, Govt of Karnataka..
More than five crores will be spent on world-class infrastructure, the government vows.  Some entrepreneurs can rent a small office space for a reasonable price. Over a period of four to six weeks, mentors from NASSCOM along with young, successful CEOs will hold master classes explaining how to raise funds and be cost-effective.   
A report released this year says that 41% of India's start-ups are based in Bangalore; nearly a third of them focus on e-commerce.
The "start-up factory" is meant to minimise inception problems and drastically reduce the time it takes for a company to hit the market.

Thursday, August 7, 2014

'India Will Help Shape a New World Order in 21st Century': Chuck Hagel

Describing India as one of the most significant countries in the world, United States Defense Secretary Chuck Hagel has said the world's largest democracy will help shape a "new world order" that is emerging in this century. (Defence Secretary Chuck Hagel's Visit to Boost India-US Strategic Ties)

"When you look at the world today, and you're all quite familiar with this, that India not only represents one of the most significant countries by any measurement in the world today, but will help shape a new world order that is emerging in this young century," Mr Hagel told reporters travelling with him to India.

Mr Hagel, who landed in India on his maiden trip yesterday as Defense Secretary, is scheduled to meet his Indian counterpart Arun Jaitley and other leaders of the new Indian Government. (Chuck Hagel's India Visit Aimed at Nurturing Defence Ties: Pentagon)

His visit comes in less than a week after Secretary of State John Kerry and Commerce Secretary Penny Pritzeker visited New Delhi for India-US Strategic Dialogue.

"The relationship between the United States and India certainly for our interests, for US interests, and I think for India's interests, as well as the Asia Pacific, but also global interests, is important," he said.

"Where we can find common interests, where we can share areas that help promote our own countries', our own economies' stability, security, peace, trade, technology," he said, adding that the point of his trip here is to take advantage of the opportunity to meet with a new Indian government.

Recalling his last trip to India in 2008 as an American Senator, Mr Hagel said, "In those meetings in 2008, it was pretty clear then that the potential for India and what they were evolving toward was going to be very important for our future".

"When you look at the region itself, South Asia, the instability that lies to the west of India, and a different kind of a world that lies to their east, and their south, and their north, they all represent different kinds of challenges for India," he said.

"The sooner we can find ways, the United States and India, to participate in these areas of mutual benefit and also concern, I think the better as we see this world that is uncertain and complicated and dangerous and unpredictable continue to evolve," he said.

He said big power stability and big power security have always been important in the world and their importance is not going to be diminished over the next few years.

Mr Hagel said his current India trip is to acquaint himself with the ground realities and that he would be more in listening mode.

"This is an opportune time to spend a couple of days here listening, learning, and getting acquainted," Mr Hagel said.

"Are there interests in other areas? We are doing more than we've ever done military-to-military with India with joint exercises. We want to continue to build on those exercises. We'll talk about where we can expand the potential for joint exercises," he said.

A supporter of India US civilian nuclear deal, Mr Hagel said power and energy are going to be a specifically important driving force for oil-developing economies, emerging economies and growing economies.

"That opportunity that I thought that was important for many reasons that the Bush administration opened up was about one example of where I think different kinds of initiatives can be explored with these two large democracies, one being the largest democracy in the world and the other being the oldest democracy in the world," he said.

"So India and the United States begin with a pretty solid framework of general understanding, especially of democratic values and principles, and that's not an insignificant starting point in foreign policy or foreign relations," he said.

Monday, August 4, 2014

Indian Citizen ID Card: What You May Need To Get It

India is poised to create a massive database that will result in an identity card being issued to all individuals accepted as citizens.  
Top sources confirmed to NDTV that the Union Cabinet is likely to approve the initiative to build the National Register for Indian Citizens  which will be carried out by the Home Ministry.  
Last month, Home Minister Rajnath Singh told parliament, "We have to identify who is an  Indian citizen and who is not."
One of 20 documents including birth certificates and land records will have to be furnished by citizens. In rural areas, for those who do not have these records, a separate process of verification has been devised by village-level bodies.
In the pilot study conducted in 2009 with a sample size of a few lakhs, only 85 per cent of the residents surveyed qualified as citizens. Nearly 2% cent were found to be illegal migrants.
The fate of those who do not qualify as Indian citizens and are categorized as "illegal migrants" will have to be decided. Broadly there are two options -  they can be asked to leave the country or alternatively the government can  issue them work permits and allow them to be in India. Sources say the cabinet has not yet begun discussing this aspect. 
The database, when complete, will render obsolete the National Population Register, which lists all residents of an area who have lived there for six months or longer, and the much-discussed Aadhar scheme, which ascribes an 12-digit unique number to a person based on their biometrics, introduced by the previous government to make direct cash transfers to the poor for welfare schemes.  
Unlike the Aadhar scheme, it will be mandatory for citizens to enlist with the database of citizens.
"As of now we do not have fix of the exact cost but it should be about RS 4000 crore. The Register General of India which will issue the citizenship cards will be conducting another pilot to work out the cost," a senior official told NDTV. 
The entire process including the issuing of identity cards is likely to be over by 2018, said sources.