Friday, May 30, 2014

Government Initiates Exercise to Raise FDI in Defence to 100 Per Cent: Report

In a major policy initiative, the government is proposing to raise foreign direct investment (FDI) in defence sector to 100 per cent through the approval route, according to sources.

"The Commerce and Industry ministry has circulated a Cabinet note for inter-ministerial consultation," they told PTI.

The proposal to raise FDI cap in defence from 26 per cent to 100 per cent is aimed at giving a boost to manufacturing activities.

As per the 15-page Cabinet note circulated on Thursday, portfolio investors, including foreign institutional investors (FIIs), would be permitted to invest only up to 49 per cent.

Further, the note said that a foreign company can even take over a domestic entity provided it brings in state-of-the-art technology.

This is the first major initiative of the ministry after new Commerce and Industry Minister Nirmala Sitharaman took charge this week.

Sources said that permitting FDI in the sector "will hugely help in reducing import bill for defence equipment" and "will help in boosting manufacturing and creating jobs".

The UPA government had pegged FDI in the defence sector at 26 per cent but allowed the Cabinet Committee on Security (CCS) to approve proposals entailing higher investments.

In May 2010, the Department of Industrial Policy & Promotion (DIPP) had rolled out a discussion paper suggesting increase in FDI cap for the defence sector.

India opened up the defence equipment industry to private sector in May 2001, but restricted foreign participation to 26 per cent in this capital-intensive and sensitive sector.

India is one of the largest defence importers in the world with a minuscule component of exports.

India ranks among the top ten countries in the world in terms of military expenditure. At present, it imports over $8 billion worth of defence equipment and its defence budget is growing at an average of 13.4 per cent annually since 2006-07.

"The bulk of the domestic production is met either through the Ordnance Factories or the Defence PSUs. Even when defence products are manufactured domestically, there is a large component of imported sub-systems," the DIPP had said.

India Harvests Sun and Wind to Save Water and Power a Slowing Economy

 Hawa Mahal, the Palace of Winds, was constructed in 1799, here in the largest city in India’s largest state. Made of red and pink sandstone, and facing the street with an ornate honeycomb of open windows, the five-story building could have been named the Hawa Suraja Mahal, the Palace of Sun and Wind.

Though the palace’s distinctive grill work ensured the privacy of royal women, its architect also sized the openings, and determined the building’s precise axis to the sun, to provide moderate winter heating, and produce the air flow and shading demanded by Maharashtra’s desperately hot summers. In a central-west Indian state as large the Republic of Congo, where six of every 10 square kilometers is desert, such understanding of the heating and cooling energy of the sun and the wind is generations old.
“People in this place have been working with nature’s energy, what we now call renewable energy, for a very long time,” said S.K. Mather, a wind and solar energy project officer with the Rajasthan Renewable Energy Corporation. “It’s one of the reasons we’re making good progress with our projects.”
Indeed, the brightest outlook in India’s deeply troubled energy sector, arguably the only truly encouraging prospect India holds for actually achieving its ambitious energy production goals, come with renewable energy, particularly the wind and solar industries. Since 2003, renewable energy technologies have added an average of 2,600 megawatts of electrical generating capacity annually, according to the Central Electric Authority. That represents 22 percent of the 11,805 megawatts of generating capacity that India added annually in the same time period.
Still, India’s total national electrical generating capacity was 237,000 megawatts (237 gigawatts) at the end of March 2014. The country’s leaders and energy development agencies, the Ministry of Power and the Central Electric Authority, assert that in order for India to attain 21st standards of family incomes and economic development the country must generate at least 1,000 gigawatts of power — levels of electrical generating capacity comparable to the United States, China, and western Europe.
That means building 800 more gigawatts of generating capacity. At the current rate of increase — less than 12 gigawatts annually — India will not reach that level until the end of the century, if ever.
Despite the long odds, India isn’t giving up.
Four years ago, India established the Jawaharlal Nehru National Solar Mission to connect 22,000 megawatts of solar-powered energy to India’s transmission grid by 2022. That’s about 19,800 megawatts more solar generating capacity than was linked to the grid in January 2014. India also developed a solar city project —identifying 60 cities that could improve energy efficiency, reduce demand from coal-fired electricity, and offer subsides and incentives to increase production of solar energy.
Similarly, India is counting on its wind energy industry to diversify its sources of electricity. The Center for Wind Energy Technology, a government research agency, estimates that India’s wind generating potential is 103,000 megawatts of generating capacity. The country has 16 wind manufacturing companies, which it asserts is second in the world behind China.
As of January 2014, India’s wind generating capacity reached 20,298 megawatts, and was the world’s fifth largest producer behind China, the United States, Germany and Spain, according to the International Wind Energy Council, a trade group based in Amsterdam.
“We have a lot of support from the state and the Central Government,” said B.K. Mahija, an electrical engineer and technical director of the Rajasthan Renewable Energy Corporation, which is charged with overseeing the state’s clean energy development. “Our total investment to date, in American currency, is $1.3 billion. More is coming.”
How much more? A lot. And Rajasthan is among the select group of states that India is counting on to drive the nation’s renewable power industry.

Betting on solar power

On January 29, three Central Government ministries and six utilities announced they had reached agreement to build a 4,400-megawatt solar photovoltaic plant on 19,000 acres near Sambhara, a desert city 75 kilometers (46 miles) west of here. The $4.4 billion project, which could be the world’s largest solar plant if built as planned, would generate 6.4 billion kilowatt hours of electricity. That’s roughly the same amount of power produced annually by two 1,000-megawatt coal fired power plants.
Though such a massive solar plant consumes vastly more space than a fossil-fueled power plant, it prevents 4 million metric tons of carbon emissions to the atmosphere, according to the Ministry of New and Renewable Energy.
Further south and west of Jaipur, much smaller wind and energy plants have been built in the desert outside Jodhpur, a city of 1 million residents 330 kilometers (205 miles) from Jaipur. Alongside dry pastures where goats and sheep graze, and near tiny settlements of two-room stone and brick huts, the AES Corporation’s five-megawatt solar farm directs its blue photovoltaic panels to the fierce sun. Within easy eyesight, two other five-megawatt solar farms are in view. Distant mountain ridges support a long string of large wind turbines, their blades turning steadily in a strong breeze.
This stretch of desert, lightly populated and ripe with solar and wind energy potential, represents almost precisely what Rajasthan and Delhi envision for a 21st century renewable energy sector. Winds are steady much of the year and the sun shines 325 days a year.
Jai Shanker Verma, the AES operations manager, said India’s Nehru National Solar Mission provided the financial incentives, and political security, for AES to build the $20 million plant in 2011. AES, an American energy supplier based in Arlington, Va., chose First Solar, also a U.S.-based manufacturer, to supply the 65,000 photovoltaic panels that cover almost 30 hectares (74 aces) of ground. A handful of men, ranging from unskilled watchmen to highly skilled technicians, manage the plant.
So far, said Verma, AES is satisfied with what it’s found in India. It built a 15-megawatt solar facility in neighboring Gujarat in 2012. The Jodhpur plant produces 9.1 million kilowatt hours of electricity annually, and power output is rising.
On cloudy days the Jodhpur facility generates 5,000 to 6,000 kilowatt hours. On sunny days, the photovoltaic cells generate 25,000 to 30,000 kilowatt hours. Verma believes power generation at the facility will reach 10 million kilowatt hours this year.
As efficiency increases, the costs of generating electricity from photovoltaic panels are going down. If the same facility were built in 2014, said Verma, it would have cost 70 million rupees, or $11.5 million.
“It makes a lot of sense,” Verma said. “Land is available here. Look around. The land can be used for this. Otherwise it’s just dust. What do you call it? A wasteland. It’s a good use of land. In five years we’ll have 3,000 to 5,000 more megawatts of solar generating capacity in Rajasthan. The market is there. India needs the power.”

A state of renewable energy

Rajasthan is a big part of India’s renewable energy campaign. The state developed and approved policies a decade ago to provide financial incentives, accelerated permitting programs, and regulatory oversight for wind, solar, and biomass fueled power-generating stations. Many of those responsibilities are housed in B.K. Mahija’s office at the Rajasthan Renewable Energy Corporation, a public agency staffed with young engineers, and ruled by endless paperwork. Mr. Mahija’s typical day is spending hours behind a large desk on the agency’s second floor, flanked by aides, and signing a continuous stream of documents that flow through the door.
“All day this goes on,” he said. “The phone rings and I sign memos.”
The state’s interest in renewable energy has enabled it to build or commission 10 solar plants and 669 megawatts of solar generating capacity, second only to Gujurat. Rajasthan also built or commissioned 2,729 megawatts of wind energy generating capacity, though interest in wind has slowed considerably.
From 2010 to 2013 wind energy generating capacity grew an average of 540 megawatts annually. This year just 31 new megawatts of wind generating capacity are scheduled to be built in Rajasthan, according to state records.
“The transmission grid has trouble handling it,” Mahija said. “It’s intermittent and our grid needs steadier voltage.”
Like all of India’s electricity generating sectors, renewable energy developers are encountering significant impediments even as some mark achievements. In 2003, according to the Central Electric Authority, renewable fuels and technology accounted for 1,628 megawatts of generating capacity, or 1.5 percent of India’s total generating capacity of 108,000 megwatts.
On January 1, 2014, all renewable generating capacity reached 30,178 megawatts, according to figures from the Ministry of New and Renewable Energy. That represented almost 13 percent of India’s total electrical generating capacity.
Renewable technologies produced about 70 billion kilowatt hours of power, or about 8 percent of the country’s total electricity, enough to provide for 10 million average rural Indian households.
India’s 12th and latest Five-Year Plan (2012-2017) asserts that the nation wants to drive down the amount of power it produces from coal, currently about 70 percent of generation, and steadily increase power generation from renewables, hydropower, and nuclear energy.
The elegant heating and cooling designs incorporated into the Hawa Mahal could be a place for India to recognize that the low-cost and efficient techniques of the past are a place to start for building the pragmatic and prosperous Indian nation of this century.
By 2030, according to planners, coal-fired generation could fall to 59 percent, renewables could increase to 16 percent, and hydro and nuclear could grow to 23 percent of India’s electricity mix. It’s unclear if India is capable of achieving those objectives.
What’s not in doubt is the amount of energy potential from India’s wind and sun.
The Center for Wind Energy Technology, a government research agency, estimates that India’s wind generating capacity is 103,000 megawatts. Indian scientists project that the solar energy potential from its sunny and dry southern states amounts to 20 to 30 megawatts of generating capacity per square kilometer. The Ministry of New and Renewable Energy estimates that India’s solar potential is at least 100,000 megawatts of generating capacity in the next several decades.
The Hawa Mahal, the Palace of Winds, clearly shows that this region of India has understood the usefulness of joining the power of the sun and the wind for a very long time. The question in modern India is whether the country’s ambitious economic program can be supported by an equally expansive energy development campaign, some of which relies on renewable energy.
The links between development and energy have been at the top of India’s national priorities since the country’s founding in 1947. In the decades since, India has wrapped itself in the steady rise of its energy development industries. But huge population growth, impractical economic development goals, the warming climate, rampant inefficiency, and a host of other ills are enfolding a nation that is soon to be the world’s largest.

Wednesday, May 28, 2014

Alternative Energy Biz Mega-Bullish On India's Narendra Modi


Wind and solar power firms in India are counting on the new government of Narendra Modi to be friendly to alternative energy when it takes up shop later next month. While most of India’s wind turbine manufacturers are private, one large volume company has become the go-to choice to play mean and green in Modi’s India. Suzlon Energy has been trading like a triple levered exchange traded fund, and making every investor happy.
Modi is the main reason for the mega–bullish sentiment on alternative energy.

On Thursday, the Press Trust of India called Modi the country’s “first energy literate Prime Minister” and said industry groups are hoping the BJP party, which won a landslide victory against the incumbent Indian National Congress, will design polices allowing for the faster expansion of clean power generation.

Smaller power stations attached to wind and solar might be easier to set up in rural parts of India that remain unconnected to the national grid. About 400 million people in India lack access to electricity, more than the combined population of the U.S. and Canada.

BJP's victory was so complete, that India analysts believe it will not need to rely on political coalitions to get things done. For starters, industry insiders apparently think that one of the first orders of business in Indian energy policy will be reinstating an accelerated depreciation for investments into wind energy projects, which is great for tax purposes, and give the sector priority lending from the State Bank of India.

Tulsi Tanti, Chairman of the Pune India based wind power company The Suzlon Group, told the newswire today that, “the BJP-led government will provide an environment conducive for growth and investments, with major reforms in the infrastructure and renewable energy sector. This is important as India’s economic environment will act as a catalyst in reviving the global economy.”

Suzlon has announced plans to enter offshore wind power generation in India this year. It’s known primarily as a turbine manufacturer for windmills and recently signed an agreement with Chicago based PowerWorks to supply 98.7 megawatts of wind turbines in 29 units that will be set up in California and Illinois. The company is hoping India will be another important market.

As of 31 December 2013, the installed capacity of wind power in India was 20,140 megawatts and generates 1.6% of India’s electricity, while solar power has an installed capacity of around 2,200 megawatts, according to the government’s Ministry of Renewable Energy.

Suzlon Energy shares have faced some favorable tailwinds since Narendra Modi’s BJP party swept into victory this week. Shares of the turbine maker rose 52% in the last five trading sessions on the Bombay Stock Exchange, with share volume of more than 14.7 million. Year to date, the stock is up 93% in anticipation for a cleaner and greener India post-election.

Solar to enable India's new PM to bring power to the poor

India’s new government led by Prime Minister-elect Narendra Modi has said that it sees solar as a critical part of a plan to electrify every home in India within the next five years.
The country currently has several hundred million people without access to electricity.
Bloomberg quotes Narenda Taneja, convener of the energy division at Modi’s Bharatiya Janata Party, as saying: “We look upon solar as having the potential to completely transform the way we look at the energy space.”  
India has encountered considerable problems in rolling out a series of mega-coal power plant complexes intended to meet India’s rapidly growing demand for power. Regulations that have capped power prices below levels required to generate a financial return, in conjunction with corruption, resistance to expansion of domestic coalmines and rises in international coal prices have all acted to hinder such plans.
However, solar PV technology offers the potential to circumvent some of the problems that have beset these government-led mega power projects. Because solar PV comes in small modular units that can be placed directly on people’s homes without grid infrastructure it offers the potential for local-scale power supply which communities themselves could manage without central government interference.
Therefore, Taneja noted that solar could readily supply millions of highly dispersed households not currently connected to the grid. Such systems could allow every home to have enough power to run two bulbs, a solar cooker and a television, he said.
This seems incredibly modest relative to western standards, but is likely to represent a major improvement for millions of Indians who lack access to any electricity at all

Monday, May 26, 2014

Narendra Modi India’s strongman



THE most important change in the world over the past 30 years has been the rise of China. The increase in its average annual GDP per head from around $300 to $6,750 over the period has not just brought previously unimagined prosperity to hundreds of millions of people, but has also remade the world economy and geopolitics.

India’s GDP per head was the same as China’s three decades ago. It is now less than a quarter of the size. Despite a couple of bouts of reform and spurts of growth, India’s economy has never achieved the momentum that has dragged much of East Asia out of poverty. The human cost, in terms of frustrated, underemployed, ill-educated, unhealthy, hungry people, has been immense.

Now, for the first time ever, India has a strong government whose priority is growth. Narendra Modi, who leads the Bharatiya Janata Party (BJP), has won a tremendous victory on the strength of promising to make India’s economy work. Although we did not endorse him, because we believe that he has not atoned sufficiently for the massacre of Muslims that took place in Gujarat while he was chief minister, we wish him every success: an Indian growth miracle would be a great thing not just for Indians, but also for the world.

From lackey to leader

Government is at the heart of India’s failure. The few strong governments India has had—always dominated by the Congress party, a Nehru-Gandhi family fief—have had rotten economic agendas. Reformist politicians—like the outgoing prime minister, Manmohan Singh—have lacked the clout to implement their policies.

That is partly because India is an extraordinarily hard place to govern. Much power is devolved to the states; the fissiparous nature of its polity means that deals have constantly to be done with a vast array of regional and caste-based parties; and a colonial and socialist past has bequeathed India a bureaucracy whose direction is hard to change.

Mr Singh, who was not much more than a Gandhi family retainer, had little chance of doing so. Mr Modi, by contrast, has huge authority, both within his party and in the country. The BJP’s victory owes something to good organisation but most to its leader’s appeal. Not since Indira Gandhi was assassinated in 1984 has India had such a powerful personality in charge.

Mr Modi has an outright majority—282 of the 543 elected seats in Parliament’s lower house. Only Congress has ever won a majority by itself before, and it has not had one for 30 years. The combination of parliamentary clout and personal power means that Mr Modi has a better chance of getting state governments to go along with him than Mr Singh did. Congress, meanwhile, has been routed, retaining just 44 seats. The joke goes that until last week India had no government; now it has no opposition.

Mr Modi has a mandate for economic reform. Although his core supporters are religious nationalists, steeped in the glories of a Hindu past, it was the votes of the young, urban and educated that won him the election. They were turned off by Congress’s drift and venality, and its preference for welfare handouts over fostering opportunity. They want the chance of self-advancement that Mr Modi, a tea-seller’s son, both represents and promises.


His first task is to stabilise a fragile economy. He must clean out the banks (bad loans are preventing a recovery), sort out the government’s own finances (chronic deficits are at the root of India’s inflation), cut subsidies, widen the tax base and allow the central bank to pursue a tougher anti-inflation policy.

His second task is to create jobs. Labour laws are rigid, land for factories often impossible to acquire at any price, and electricity patchy. Mr Modi must launch sweeping land reforms, crack heads in the misfiring coal and electricity industries and make India more of a single market not just by improving roads, ports and the like, but also by cutting the red tape that Balkanises the economy. A national sales tax would help here, replacing myriad local levies. Such relatively straightforward steps could make a powerful difference, raising the Indian growth rate by two or even three percentage points from its current 4-5%.

Reaching out to Pakistan would bring economic as well as security benefits. Trade between Pakistan and India is currently negligible, and there is huge scope for growth. As a leader from the nationalist right, Mr Modi is well placed to bring about a rapprochement, rather as Menachem Begin could make peace between Israel and Egypt. The initial signs are good: Mr Modi has invited Pakistan’s prime minister, Nawaz Sharif, to his inauguration.

One rule for all

There are three main dangers. One is that Mr Modi turns out to be more of a Hindu nationalist than an economic reformer. He has spoken of “bringing everyone along”. But while he has already worshipped at the Ganges since his victory, promising to clean up the river sacred to Hindus, he has not brought himself to mention Muslims, who make up 15% of the population.

A second danger is that he is defeated by the country’s complexity. His efforts at reform, like all previous reformers’ efforts, may be overwhelmed by a combination of politics, bureaucracy and corruption. If that happens, India will be condemned to another generation or two of underachievement.

A third is that Mr Modi’s strength will go to his head, and he will rule as an autocrat, not a democrat—as Indira Gandhi did for a while. There are grounds for concern. After years of drift under Congress, some of the country’s institutions have rotted. The main police investigator is politically directed, the media can be bought, the central bank, which does not have statutory independence, has been bullied before, and Mr Modi has authoritarian tendencies.

The risks are there, but this is a time for optimism. With a strong government committed to growth and a population hungry for it, India has its best chance of making a break for prosperity since independence.

Tuesday, May 20, 2014

Clearing Projects Worth 20 Lakh Crores Could Be Narendra Modi's First Task

As Narendra Modi gets ready to take charge, a top bureaucrat in the Cabinet Secretariat has told NDTV that the new Prime Minister's priority could be to fast-track more than 430 projects worth a staggering Rs. 20 lakh crore, a legacy of the policy paralysis of the last days of the UPA government.

Anil Swarup, Additional Secretary in the Cabinet Secretariat, heads the Project Monitoring Group, a mechanism created last year to coordinate between warring ministries. He says the main reasons for the massive backlogs during the UPA's tenure were delays in green clearances, as well as the cabinet's lack of urgency in clearing coal supplies to power projects.

Mr Swarup says in the past nine months they have cleared over 150 projects worth roughly Rs. 5 lakh crore, mostly in power, cement, steel and infrastructure, an achievement which the UPA failed to leverage during the election campaign.
 
Mr Modi has already started meeting with the Cabinet Secretary, as well as with individual secretearies of key economic ministries to gauge the extent of the backlog. Given this early start, Mr Swarup is confident that the new government will continue the group that he heads. "I think any government would want to fast-track these projects as they do impact the economy."

Friday, May 9, 2014

Beijing to San Francisco by train: China outlines plans to connect world by high speed rail network

China has outlined its plan to connect the world by high-speed rail, including an underwater link to the US running 13,000km.

The 'China to Russia plus the United States' line proposed by the Chinese Academy of Engineering would start in the north east of China, travel up through Siberia, across the Bering Strait to Alaska and down through Canada before reaching the contiguous US, The Beijing Times reports.

Other planned lines - construction of which has already reportedly began in China - are a link to London via Paris, Berlin and Moscow, along with a second route to Europe following the silk road to reach as far as Germany via Iran and Turkey. The international legs of the lines are currently under negotiation, the state ran paper said.

A fourth Pan-Asian line, connecting China with Singapore via Vietnam, Cambodia, Thailand and Malaysia, is reportedly already under construction. Proposals for lines running from China to Africa are currently being drawn up, the paper added.

The most structurally ambitious of the proposals is the US-China link, which would require around 200km of tunnels to cross the gap between Russia and Alaska - four times the length of the Channel Tunnel. If completed it would become the world's longest underwater tunnel and take an unprecedented feat of engineering.

"Right now we're already in discussions. Russia has already been thinking about this for many years," Wang Meng-shu, a railway expert from the Chinese Academy of Engineering said. The train would travel at 220mph with the entire trip taking two days.

Reporting on the plans, the state owned English language paper China Daily claimed that China already has the technology in place as it will be used to connect the country to Taiwan by underwater high-speed train requiring a 150km long tunnel. Details of this project are also yet to be finalised however.

Wednesday, May 7, 2014

New Delhi Has Worst Air Quality in the World: World Health Organisation

An effort by the World Health Organisation (WHO) to measure pollution in cities around the world has found New Delhi admits to having the dirtiest air, while Beijing's measurements, like its skies, are far from clear.

The study of 1,600 cities found air pollution had worsened since a smaller survey in 2011, especially in poorer countries, putting city-dwellers at higher risk of cancer, stroke and heart disease.

Air pollution killed about 7 million people in 2012, making it the world's single biggest environmental health risk, the WHO, a United Nations agency, said last month.

Thirteen of the dirtiest 20 cities were Indian, with New Delhi, Patna, Gwalior and Raipur in the top four spots. New Delhi had an annual average of 153 micrograms of small particulates, known as PM2.5, per cubic metre.

Beijing, notorious for the smog that has prompted some Anglophone residents to dub it "Greyjing", was in 77th place with a PM2.5 reading of 56, little over one-third of Delhi's pollution level.

WHO experts said the Chinese data was from 2010, the most recent year made available to them by China. But Beijing's city government began publishing hourly PM2.5 data in January 2012.

A year after it started publishing data, Beijing's air quality hit the "worst on record" according to Greenpeace, with a PM2.5 reading as high as 900 on one occasion.

Beijing's government said last month that PM2.5 concentrations stood at a daily average of 89.5 micrograms per cubic metre in 2013, 156 percent higher than national standards. Such a reading would put Beijing 17th in the WHO database. The WHO says there is no safe level for PM2.5 pollution.

At the cleaner end of the table, 32 cities reported a PM2.5 reading of less than 5. Three-quarters of those were Canadian, including Vancouver, one was Hafnarfjordur in Iceland and the other seven were American.

WHO experts insisted the survey was not intended to name and shame the dirtiest cities, since the cities involved were volunteering the information to try to help themselves clean up.

Maria Neira, WHO Director for Public Health, Environmental and Social Determinants of Health, said the aim was to "challenge" cities and thought the survey would help them to become more open about their dirty air, which is often caused by burning coal, smokestack industries and heavy traffic.

She rejected any suggestion that China might be cheating and said it was becoming much more sophisticated about collecting air pollution data, with a new push to clean up the big cities.

"We are very much discussing with China putting on the table the issue of air pollution. Our director general (Margaret Chan) was recently there and she declared that China was one of the countries with major problems with air pollution. We will continue discussions on that to make sure that relevant measures are in place to reduce air pollution." 

Tuesday, May 6, 2014

Apple hands Angela Ahrendts $68m in shares

Apple has welcomed its powerful new retail boss Angela Ahrendts with a bumper share award worth $68m (£40m).
The Indiana-born executive, who joined Apple last week from her previous role as head of British fashion label Burberry, has been granted a maximum of 113,334 restricted stock options which will transfer to her in a series of payments starting over the next four years.
Apple's share price has hit a new high, surpassing $600 for the first time since October 2012, making Ahrendt's settlement worth $68m at today's prices.
Ahrendts will be Apple's most powerful retail boss ever, with control not only of its 423 stores but the company's online shopfront.
She is the second Apple retail boss to be recruited from a British business. Her predecessor John Browett, formerly chief executive of Dixons and now boss of Monsoon Accessorize, lasted just six months in the post but would have been entitled to shares worth $55m had he lasted a full term.
After a false start with Browett, Apple's chief executive, Tim Cook, is hoping for second time lucky with Ahrendts, whom he described as "wicked smart" in a letter to staff after her appointment.
Ahrendts took Burberry into emerging markets, with a growing business in China, and also dragged what was a conservative fashion label into the digital age with a flair for new media marketing. Last year, Burberry was given early access to the then unreleased iPhone 5S to film a catwalk show.
The first instalment of her Apple shares will vest on 1 June and is worth nearly $9.8m. The bulk of her shares – around 96,000 stock options – will be granted simply for remaining in post. A further 17,300 are performance based, and the number she actually receives will depend on Apple's share price measured against other similar companies between now and 2017.
She left Burberry last week, handing the reins to creative boss Christopher Bailey, after being granted early access to share bonuses worth £6.2m and a cash bonus worth £2.1m, which together with her basic salary took her pay for her final year at the fashion group to over £9m.

Sunday, May 4, 2014

Global Citizenship Catching Fancy of Super-Rich in India, China

Global citizenship is becoming popular among the world's ultra-wealthy and an increasing number of super-rich from Asia's two giants China and India are likely to trend this path in the coming years, according to a report by Wealth-X, which tracks the world's richest persons.
 
China and India both already have some of the largest populations based abroad.
Moreover, coupled with current residents of China and India, the two countries have a total ultra-high net worth (UHNW) population of 26,925, accounting for one in every seven UHNW individuals in the world.
 
"It is highly likely that we will see an increasing number of UHNW individuals from Asia's two giants, China and India, seeking global citizenship in the coming years," Wealth-X, a UHNW prospecting and intelligence firm, said in its research report.
 
With each country already having large non-resident populations, the precedent of moving abroad has already been made, and so as those countries' ultra-high net worth populations grow, there is likely to be an increase in non-resident population as well, the report added.
 
Some of the noted Indian billionaires who have a second citizenship include Lakshmi Niwas Mittal, who is based in United Kingdom and Pallonji Mistry who holds an Irish citizenship.
 
Measured solely in investment terms, the majority of investor immigration programmes are very attractive to UHNW individuals, costing as little as 0.5 per cent of their liquid assets, or 0.1 per cent of their net worth, and providing a host of positive benefits.
 
Some of the reasons for seeking a second citizenship include, greater stability and security, tax efficiency, ease of travel, higher standard of living, increased options for children's education, and investment opportunities that may not otherwise be available.
 
As education and awareness of global citizenship programmes continue to increase, so too will the number of applications being made by UHNW individuals, Wealth-X said.
 
With more and more wealth being created in Asia, yet demand for residence in European territories being so high, this trend of UHNW individuals seeking global citizenship will undoubtedly continue to grow, it added.