`
`
11/2013
INDIA
Contact:
Rajesh Nath, Managing Director
Jamly John, Regional Manager - West
Please Note:
Telephone: +91 33 2321 7391
1 crore = 10 000 000
Fax: +91 33 2321 7073
1 lakh
E-mail: [email protected]
1 Euro = Rs.75
= 100 000
The Economic Scenario
Economic Growth
The money supply rose an annualised 13.8% in the two weeks in November slower than
13.4% a year earlier as per the Reserve Bank of India. Money supply was € 1.20 trillion (90.74
trillion rupees) ($1.45 trillion) in mid of November compared with € 1.21 trillion (90.82 trillion
rupees) at the beginning of November. The central bank reserve money rose 9.1% year-onyear, faster than 4.6% a year earlier. Currency in circulation grew 10.9% year-on-year
compared with 12.9% a year earlier.
India has initiated talks to join Euroclear, the world's largest securities settlement system, as it
seeks to attract the much-needed foreign capital into the country. The senior officials from the
finance ministry, the Reserve Bank of India (RBI) and the Securities & Exchange Board of
India (Sebi) are expected to meet soon to discuss the issue. The discussions are part of
India's plans to create international presence for its debt issuances and draw new class of
investors into the country, which have hitherto remained away from the country's capital
markets.
Euroclear, a global settlement platform, holds assets valued at 23 trillion and settles securities
transactions worth over 540 trillion per annum. Successful rupee-denominated and
Eurocleared bond issuance by the International Finance Corporation has bolstered the
government's plan to internationalise the rupee and deepen its capital markets to attract
foreign capital needed to fund India's large current account deficit. The rupee suffered a sharp
depreciation vis-a-vis the dollar recently on apprehensions that the US Federal Reserve was
planning to withdraw its fiscal stimulus programme.
India is already discussing inclusion of government debt in global indices, and joining
VDMA-Newsletter ―Indien ‖, Ausgabe 11/2013
Kontakt: Oliver Wack, Telefon: +49 69 6603-1444
Indian Economic and Industrial Scenario, November 2013
VDMA INDIA Office
Euroclear could take it a step closer. Thus joining Euroclear could help the country attract a
new set of investors. The sovereign issuances from India would receive favourable response
and access to an altogether different set of investors sitting on the largest liquidity if such
issuances are Euroclearable. Euroclear has a widespread reach and robust infrastructure and
there is a large chunk of investors who would only invest if the product is Euroclearable. India
will be able to reach the largest pool of liquidity, which our markets never had access to
hitherto only if it tied up this end.
However, India will be required to make changes in regulations under the Foreign Exchange
Management Act to join the settlement system. Indian regulators have been in touch with
Euroclear, and based on the feedback received on the eligibility, the finance ministry will be
involved in the next round of talks. A decision on the timing to join the system would be taken
after considering all factors, including the market conditions.
Committed to contain fiscal deficit within the redline drawn by Finance Ministry, the
government may trim planned expenditure by over Rs 80,000 crore or about 15% of the
budgeted amount in the current fiscal. The cuts in allocation to various ministries are being
effected due to lower utilisation of allocated funds so far this fiscal.
The government has budgeted total plan expenditure at € 0.74 lakh mrillion (Rs 5.55 lakh
crore) in the current fiscal. The total expenditure, including non-plan, is budgeted at € 2.22
lakh million (Rs 16.65 lakh crore). In 2012-13 fiscal, the plan expenditure was reduced by over
€ 12,000 million (Rs 90,000 crore) to € 0.57 lakh million (Rs 4.29 lakh crore), from € 0.69 lakh
million (Rs 5.21 lakh crore) estimated in budget. This helped to contain fiscal deficit at 4.9% of
GDP. It is estimated that there has been about 18% cut in the budget allocation to the Rural
Development Ministry for 2013-14.
In the revised estimates for 2013-14 fiscal, the Finance Ministry has cut the allocation to the
Ministry of Rural Development and Ministry of Human Resource Development by about €
2000 million (Rs 15,000 crore) and € 667 million (Rs 5,000 crore) respectively.
The 2013-14 budget had allocated € 10,693 million (Rs 80,194 crore) to the rural development
ministry, which runs many of the UPA government's flagship programmes like rural job
guarantee and road construction schemes. The cuts in the allocation of funds to various
ministries come as the Finance Ministry is striving hard to contain the fiscal deficit at 4.8% of
GDP in the current fiscal. The fiscal deficit in 2012-13 was 4.9%. In the first six months of
2013-14, fiscal deficit has touched 76% of budget estimates.
The country has already taken several steps to deepen its debt market and to attract foreign
investment. It earlier removed sub-caps on foreign investment in government debt and
discontinued the auction of available limits.
Government's € 292 billion (400 billion rupees), € 4.69 billion ($6.43 billion) programme for the
current fiscal year ending in March 2014 will be fully met as per the Economic Affairs
Department. India has so far managed to raise only around € 168 million ($230 million) by
selling stakes in state-owned oil companies, as ministries squabble over the timing of the
issues and as the rupee fell against the dollar.
Private equity (PE) investments in the third quarter of this year stood at € 0.93 billion ($1.28
billion), registering a drop of 50% over the previous quarter. After an impressive second
quarter, the PE investments in the July-September quarter dropped by more than 50% in
value and 31% in volume as against April-June 2013. In April-June period of 2013, PE firms
had invested € 1.70 billion ($2.33 billion) across 82 deals.
On a year-on-year basis as well, PE investments declined 67% in terms of value and 40% in
terms of volume respectively. In Q3 2012, the value of investments were at € 2.85 billion
($3.91) billion from 126 deals.
The manufacturing sector ranked second in terms of value as it witnessed investments worth €
1.35 million ($185 million), while the healthcare and life sciences sector investments were
worth € 115 million ($157 million) across 15 deals. By region, Mumbai retained its rank at the
top, recording highest level of funding at € 313 million ($429 million), followed by Bangalore
with an investment of € 236 million ($323 million). Meanwhile, private equity investments in
NCR, Hyderabad and Chennai, too, have shown a dip in the value of investments this quarter,
as against the previous quarter.
VDMA-Newsletter ―Indien ‖, Ausgabe 11/2013
Kontakt: Oliver Wack, Telefon: +49 69 66031444
2
Indian Economic and Industrial Scenario, November 2013
VDMA INDIA Office
Industry Scenario
Steel
Iran nuclear deal may unleash new market for Indian steel exports
Iran's nuclear deal in exchange for lifting of economic sanctions slapped on it may have a
positive impact on Indian steel companies by opening up a potentially new export market. The
country has been one of the fastest growing consumers of steel globally. Iran imports most of
its steel since it has a small domestic steel manufacturing capacity. Indian steel companies,
which are increasingly relying on exports to counter a weak demand at home, are expected to
gain from Iran's rising steel imports.
It is expected that it could open up a window of opportunity for Indian companies. Iran's steel
consumption went up to 23 million tonnes (mt) in 2011. That year, the country imported nearly
10 mt of steel but imports went down to less than 6 mt in 2012. Incidentally, Iran's steel output
was estimated to have grown at 2% to a little over 8 mt in the half year between March and
September 2013. This could bode well for Indian steel companies, including state-owned SAIL
and RINL and their private peers like JSW Steel, Essar Steel and JSPL, which have taken a
strategic decision to focus more on exports. With the past experience with Libya and Iraq had
shown that the Indian companies have not benefitted much from reconstruction efforts in the
two countries, mainly due to internal turmoil in these economies. Iran is comparatively better
placed when it comes to governance.
Steel Ministry to scale up energy efficiency project for small units
Enthused by the success of a project aimed at reducing energy consumption by small-scale
steel units, the Steel Ministry has now decided to take it up on a bigger scale. The new project
- Upscaling Energy Efficient Production in Small-Scale Steel Industry in India - will lead to
cleaner production in 300 units, including the induction furnace units. The Steel Ministry had
earlier proposed a project on the same lines in its 12th Five-Year Plan document for energy
efficiency improvement projects in the secondary steel sector by providing interest subsidy.
However, this did not happen.
Under the existing project, which started in April 2004 and will end next month, the ministry
and UNDP had taken up 34 small-scale steel rolling units. The success of the project resulted
in improved energy efficiency leading to higher profits and fuel savings of Rs 40 crore. The
new phase of partnership with UNDP and Australian Agency for International Development
(AusAID) will represent an important step in this direction by demonstrating energy efficient
production processes in 300 units across the country. India has about 1,800 steel-rolling mills.
They supply about 65% of India's long product demand.
Steel output growth slows to 2.8% in Jan-Oct at 66 MT
Hit hard by the slowdown in economy, India's steel production growth eased to just 2.8% in
January-October this year but the country faces no immediate threat of being dislodged from
its position as the fourth largest%eel producer globally. India produced 66.387 million tonnes
(MT) steel during the first ten months of the current year compared to 64.556 MT in the same
period last year. The growth in production during January-October period of 2012 at 64.556
MT was 5.6% higher than 61.077 MT output recorded during the corresponding period of
2011. Economic growth of a country has a direct bearing on steel production. The usage of
steel often mirrors the health of an economy and usually rises by 1.5 times of the country's
GDP growth rate. The economic growth rate slipped to decade's low of 5% in 2012-13 and
VDMA-Newsletter ―Indien ‖, Ausgabe 11/2013
Kontakt: Oliver Wack, Telefon: +49 69 66031444
3
Indian Economic and Industrial Scenario, November 2013
VDMA INDIA Office
during the first quarter of current fiscal it stood at 4.4%. The growth figures for the second
quarter are scheduled to be announced soon. The feeble economic growth appears to have
impacted steel-consuming segments like real estate and consumer durables, which are the
major consumers of the alloy. India's steel output growth at 2.8% in the first 10 months of the
current year compares with 3.2% average growth recorded worldwide. China's steel
industry saw its output grow by 8.3% in the same period. World's steel production stood at
1,321 MT and China's 884 MT during the same period.
India is unlikely to be dislodged from its fourth largest global producer tag, which it has been
holding for some years now. Its immediate competitor for the position, Russia, is close to 10
MT away. No change in the top four of the global order is also likely soon. China, which is
miles ahead from the second best, Japan, is expected to retain its numero uno position. Japan
so far has produced 90 MT. US is also expected to retain the third position. It has produced 73
MT steel during the January-October period of the current year.
SAIL plans to raise iron ore output capacity to 43 million tonne by
full year 2016
In sync with the expansion of its steel-making capacity, state-owned SAIL plans to raise
the iron ore production capacity to 43 million tonne per annum by 2015-16 from the existing 28
mtpa. The country's largest steel maker, which is also the second-largest iron ore producer
after NMDC, also believes that with the ongoing and proposed expansion at the mines, it
would be able to achieve 58 mtpa iron ore production by 2020. SAIL plans to raise production
capacity of its Kiriburu mines to 5.5 mtpa from 4.25 mtpa now. Plans are also there to jack up
production capacity at Meghataburu and Bolani mines to 6.5 mtpa and 10 mtpa, from 4.3 mtpa
and 4.1 mtpa respectively.
The Steel Authority of India Ltd also plans to raise its Gua mine's production capacity to 10
mtpa from 2.4 mtpa now. It also proposes to raise capacity of its Barsua, Kalta and
Taldihmines to 6.5 mtpa from 3.3 mtpa. The major boost in iron ore production might come
from the Rowghat mine, where the company plans to produce 12 mtpa iron ore. SAIL has
already received all statutory clearances for the mine to develop. SAIL also plans to raise the
iron ore production capacity at its Chiria mine to 7.45 mtpa from 1.5 mtpa now. The company
does get all its iron ore needs from captive sources. It generally takes 1.6 tonne iron ore to
produce one tonne of steel. SAIL is in the process of investing € 9333 million (Rs 70,000
crore) on its mines and steel plants.
Mahindra Intertrade to set up steel service center near Pune
Mahindra Intertrade has announced a new joint venture with China Steel Global Trading
Corporation, Taiwan and Mitsui & Co. (Asia Pacific) Pte. Ltd., Singapore to set up an
automotive steel service centre in India at Chakan near Pune. The facility is be set up at a cost
of € 20 million (Rs 150 crore) ($24 million) over 10 acres of land and will have an annual
processing capacity of 130,000 tonnes. The company would begin operations in the fourth
quarter of F-2015. This state-of-the-art facility will be one of the few merchant producers of
steel blanks and profiles offering the full range of services from sourcing to customised JIT
delivery solutions. Once operational, it will redefine the supply chain model in the region
backed by two global leaders in this field, China Steel and Mitsui. While Mahindra Intertrade
will hold a share of 51% in the joint venture, the other two partners will hold 24.5% each.
China Steel Corporation Group (CSC Group) has lately been developing high-end steel
products such as automotive steel. India is one of the key markets for CSC Group. By
establishing this steel processing centre with Mahindra Intertrade Limited and Mitsui & Co.
(Asia Pacific) Pte Ltd., China Steel Global Trading Corporation (CSGT, a 100% subsidiary of
CSC Group) wishes to extend its services to India and build a beach head in the Indian
automotive market. CSGT wishes not only to achieve synergy with its alliance partners, but
also to progress with local customers. The raw stock for the facility would be imported from
China Steel Global, Taiwan as well as sourced locally. This will be Mahindra's seventh steel
processing facility and the third in the Pune region.
Coal-to-gas plant at Angul to be commissioned next month: JSPL
Jindal Steel and Power (JSPL) will commission its coal-to-gas project, the first such project in
the country, at Angul in Odisha next month. The coal-to-gas project is a part of the € 2800
million (Rs 21,000 crore) investment that the company has made at Angul for setting up a 1.5
million tonnes per annum (mtpa) steel mill and a 810-MW power plant. Once commissioned,
this would mark the completion of 1.5 mtpa integrated steel plant o f the company in the first
phase.
VDMA-Newsletter ―Indien ‖, Ausgabe 11/2013
Kontakt: Oliver Wack, Telefon: +49 69 66031444
4
Indian Economic and Industrial Scenario, November 2013
VDMA INDIA Office
The company has also proposed to expand its steel-making capacity at the facility to 12.5
mtpa and generate 2,600 MW of power in phases. JSPL has signed an agreement with Lurgi
Technology Company, South Africa, for providing the technology for coal gasification. The
technology to be used in this plant offers practical means of utilising indigenous coal for
meeting stringent environmental control requirements. The plant would produce 225,000
Nm3/hr synthetic gas.
SAIL to set up hot strip mill at Rourkela plant for € 581 million
Rs 4360 crore
Steel Authority of India (SAIL) plans to set up a three million tonne per annum (mtpa) hot strip
mill at Rourkela Steel Plant (RSP) at an estimated cost of € 581 million (Rs 4,360 crore) to
cater to auto and white goods sectors. The Hot Strip Mill, where steel slabs are reheated and
rolled to hot rolled coil (HRC), will produce high-quality products that would cater to the highend automobile and white goods segment. SP is located in the north-western tip of Odisha
and at the heart of a rich mineral belt. The mill which is envisaged to be installed in 35 months
from the date of contract will enable SAIL to produce high-quality HRCs especially for the
high-end automobile and the white goods segment.
The domestic steel major has also plans to set up a 1.2 mtpa cold rolling mill at RSP, which
may entail an investment of around € 667 million (Rs 5,000 crore), through a joint
venture. SAIL believes that there is a huge potential for such sheets in India and the demand
is only going to go northward in the coming days. However, it does not have the necessary
technology and the plan is thus to rope in a partner who has the necessary technology for
producing such sheets. SAIL, which is ramping up its steel making capacity to 24 mtpa from
14 mtpa at present, has already floated a global tender, inviting bids from potential partners for
the proposed cold rolling mill complex. The plant at RSP currently has two mtpa hot metal
producing capacity and this would go up to 4.5 mtpa once the ongoing expansion is over.
Automobile
BMW to drive in iconic compact car Mini Cooper into India soon
BMW India will soon start assembling the new generation of its iconic compact car Mini at its
Chennai plant, a move which will help it offer its latest products to Indian customers and
garner some incremental numbers in the fiercely competitive luxury car market. The new Mini
Cooper will be slightly larger than the current outgoing model, and also lighter and more
economical on the fuel front with 27% lower consumption compared with current models sold
in the domestic market. The new Mini -- third generation since BMW acquired the British brand
- has been improvised over the previous generations with more refinement on design and
technology.
The Mini Cooper is the first model carrying the new UKL front-wheel-drive system, which will
also be shared with entry-level BMW-brand models like BMW 1Series, also assembled at the
Chennai plant. Besides the subtle modifications to its outer design, the new MINI will have a
new range of engine lines, both in the diesel and petrol variants. Currently, there are seven
Mini variants including a 4x4 option and a convertible available across the global market.
According to company executives, around eight to 10 variants are expected for the new MINI
that also includes a plug-in hybrid. The Indian market is likely to see the diesel variant first
which will roll out from the Chennai plant later this year.
VDMA-Newsletter ―Indien ‖, Ausgabe 11/2013
Kontakt: Oliver Wack, Telefon: +49 69 66031444
5
Indian Economic and Industrial Scenario, November 2013
VDMA INDIA Office
Hirotec mulls investing € 29.2 million ($40 million) in India
Auto ancillary maker Hirotech would foray into door manufacturing in India if orders for a
minimum of two lakh such units came from any major auto companies in the country.
Negotiations in this regard were on with two leading car manufacturers in Maharashtra and
Gujarat, and the decision to start door manufacturing would be taken once the company got
orders for manufacture at least two lakh doors.
The company could invest around € 22 - 29 million ($30-40 million), if the negotiations bore
fruit and decision to set up the unit, nearer to the vehicle manufacturing factory, would be
taken after working out modalities. Hirotech India has started its new facility in Keeranatham
on the outskirts of the city with an investment of € 5.3 million (Rs 40 crore), considering the
good demand for quality tooling solution, increased localisation, shorter lead time and
optimising cost. The facility, which is expected to become operational by October 2014, will
have state-of-the-art design office, assembly integration and try-out facility; and it can employ
about 350 people.
Slowdown forces auto parts makers to diversify
Hit by a double whammy of falling sales and rising input costs, auto component makers are
venturing into new territories that are promising growth opportunities despite the slowdown
Over the past few months, several auto component makers have entered businesses as
diverse as healthcare, real estate, sports infrastructure, aerospace and even robotics.
Fiem Auto has developed all new LED lighting systems at half the cost than any global
company. With orders from automobile makers drying up, the company decided to stretch its
research into a relatively new area of LED luminaries business. The € 133 million (1,000crore) company, which counts Suzuki, Honda, and Mahindra and Mahindra among its clients,
is now making LED lights for domestic and commercial uses. It has also developed solar LED
lamps. Fresh investments into the auto component industry fell to € 1200 - 1467 million ($1.51.8 billion) (Rs 9,000-11,000 crore) in 2012-13 from $2-2.05 billion in the previous year. The
industry is estimated to be worth about € 299 billion ($40 billion). Subros, the country's biggest
maker of automotive air conditioning systems has set up a facility to manufacture insulated
containers, or refrigerated trucks, with staggered chilling units to cater to the needs of retail
chains across the country.
Slowdown has hit hard the auto component industry with demand in all segments, except
motorcycles and scooters, plunging into the negative territory. The once lucrative bus and
truck segment has suffered the most with sales falling 32% year-on-year in October to 14,261
units. The segment has been seeing negative sales for the past 20 months. Sansera
Engineering, a Bangalore-based company that supplies forged and precision-machined power
train components to the likes of Maruti Suzuki, Honda, Fiat and General Motors, has ventured
into the aerospace business. The company is also eyeing the critical medical healthcare areas
in the second stage of its diversification. They have targeted the generic components like light,
seating and safety equipments for partners — the € 47 billion ($65-billion) UTC Aerospace.
Other components makers such Amtek Auto plans to increase its sales contribution from
defence and railways to 30% over the next three-four years from the current 6-7%, Sona
Koyo, India's biggest automotive steering maker, is venturing into farm equipment as part of its
diversification programme.
Government targets to roll out subsidies for electric cars by April
2014
The ministry of heavy industries is targeting to roll out subsidies for electric vehicles - under
the National Electric Mobility Mission Plan by April of 2014. The heavy industry ministry is
planning to get all the cabinet approvals before April so that the incentives start flowing to
electric vehicle makers beginning April 2014. The level of incentives by the government is to
the tune of € 1600 million (Rs 12,000 crore) over the next seven years, till 2020. On an
average about Rs 2,000 crore will be provided as incentive. Post the Booz Allen study
commissioned by the government to study the future potential for electric vehicles, two years
back, the ministry had over 100 interactions with the automotive industry to devise a suitable
incentive policy to create a thriving electric vehicle market in India. Till 2020, the government
foresees a penetration of 1.5 million four wheelers, 4.5 million two wheelers, which will have a
share of about 17% of the total sales.
If the electric vehicle market takes off, € 5333 million (Rs 40,000 crore) worth of fuel will be
saved. The government is looking at the total cost of ownership model to offer the incentive to
the vehicle maker. For instance, if the cost of internal combustion engine car is € 6667 (Rs 5
VDMA-Newsletter ―Indien ‖, Ausgabe 11/2013
Kontakt: Oliver Wack, Telefon: +49 69 66031444
6
Indian Economic and Industrial Scenario, November 2013
VDMA INDIA Office
lakh) and that of electric vehicle is € 8667 (Rs 6.5 lakh), the government intends to offer 35%
of the differential cost. In case of two wheelers it could be higher.
On the possible interest and investment from the industry, Mahindra Reva has already set up
a capacity of 40,000 units per year and similarly even Tata Motors and Maruti Suzuki are
working on both hybrid and pure electric models for India and are hence likely to bring in
electric vehicles in the next two to three years. Mahindra is already working on a four seater
and a seven seater electric vehicle. Kinetic is working on a three wheeler. TVS and Bajaj Auto
are working on hybrid motorcycles, which are at a homologation stage. 5-6 leading domestic
manufacturers are already in the fray and we hope that foreign OEMs will also bring in their
smaller cars at least.
Power
Bharat Light Partners IBM to Boost India Wind Farm Output
Bharat Light & Power Pvt. and International Business Machines Corp. (IBM) are combining
efforts to boost the electricity output of wind farms in India, seeking to expand capacity
fivefold. Under a 10-year agreement, IBM‘s technology will raise the profitability of Bharat Light
projects by better managing wind-farm data. Clean-energy utilities such as Bharat Light and
Morgan Stanley-backed Continuum Wind Energy Pte are sparking a shift in India‘s wind
industry by focusing on maximizing generation as they compete against fossil-fuel plants to
deliver power. India, fighting blackouts that restrain its growth, is trying to cut dependence on
imported fossil fuels and double clean energy capacity to about 59 gigawatts by 2017.
These projects are usually located in very remote parts of India and the level of intelligence
dispatched from the field is low. The collaboration with IBM will allow Bharat Light to generate
power at levels ―way beyond‖ what wind farms, often managed by turbine suppliers in India.
Wind farms are already able to supply power at the same cost or cheaper than new coal-fired
plants in some Indian states. That trend was helped by falling turbine prices, down a quarter
from their 2009 peak amid global oversupply, as well as newer machines that produce more
power at lower wind speeds. Bharat Light owns about 200 megawatts of operating wind farms,
including 150 megawatts of capacity acquired from DLF in July. It plans to diversify into solar,
biomass and hydropower to reach 1,000 megawatts in five years through acquisitions and by
building projects.
Greenko commissions first phase of wind farm in Andhra
Pradesh
Founded in 2006, Greenko aims to reach 1,000 MW of operational power generation capacity
by 2015. London‘s AIM-listed clean energy producer Greenko Group plc has commissioned
phase 1 of its 51.2 MW Balavenkatpuram wind farm located in Andhra Pradesh in India. The
total cost of the first phase was approximately € 40 million ($53.5 million) and uses a GE
turbine, which has the potential to deliver close to a 30% capacity in a year.
The project is completed a month ahead of schedule and takes Greenko's total generating
portfolio to 411 MW, a 38% increase since April 2013. The project has secured a 25-year
power purchase agreement with the state of Andhra Pradesh and benefits from the recently
increased tariff. The first two wind farms refined a modular approach to wind farm
construction, which is now delivering substantial and predictable growth. As a result, they
should double our generating capacity this financial year to 600 MW and remain in line to hit
our 2015 target of 1,000 MW. Hyderabad-based Greenko Group is a renewable energy
generation company involved in biomass, hydro and wind energy. The company aims to reach
VDMA-Newsletter ―Indien ‖, Ausgabe 11/2013
Kontakt: Oliver Wack, Telefon: +49 69 66031444
7
Indian Economic and Industrial Scenario, November 2013
VDMA INDIA Office
2,000 MW of operational capacity by 2018. It had recently signed up an agreement with
Spanish wind turbine company Gamesa for the supply of 300 MW of wind turbines.
India's Welspun Energy to invest € 1.17 billion ($1.6 billion) in
solar, wind projects by 2017
India's Welspun Energy, which will commission the world's second-largest solar power plant
and two other projects by December, will invest an additional € 1.17 million $1.6 billion in new
projects over three years. The 151 MW plant in the central Indian state of Madhya Pradesh is
a part of Welspun's push to capture a slice of the renewable energy market that the
government hopes will nearly double in the five years to 2017. Renewable energy companies
are free of some of the stumbling blocks plaguing their peers in India's thermal power industry,
such as coal and gas shortages and fuel transport hassles.
But the sector still faces problems including in acquiring land for projects, a creaky
transmission network and state distribution companies that are often too broke to buy power.
Banks should create a separate sector lending cap for renewable energy to avoid it being
lumped together with lending to thermal power projects. Banks have become increasingly
unwilling to lend to Indian infrastructure builders saddled with heavy debt and stalled projects.
The risk-reward here is totally separate than a conventional power plant, so it has to be looked
at differently. Welspun Energy, a part of the textiles-to-steel Welspun Group, aims to have an
installed capacity of 1,700 MW of solar and wind power by 2017, an eight-fold increase from
its current size.
Tata plans wind acquisition push
Tata Power is planning to add about 150 to 200MW of wind capacity to its portfolio every year
through the acquisition of already established wind farms. Recently, the company bought a
39.5MW plant in Gujarat. After the announcement of the Gujarat acquisition, it has received a
lot of interest from other wind farm operators, wanting to sell their assets. Difficulties with
securing land for projects and poorly enforced government policies have made it harder to
develop new projects, leading it to look to already developed wind farms as a means to extend
its portfolio.
The push into renewables will cost around € 1.89 million ($260 million), the company estimates.
Tata currently operates about 400MW of wind projects in India. Growth in the Indian wind
market slowed in 2012 with the removal of two major incentives for wind. And while the
country's expected colossal growth in energy demand means the long term looks good, there
is considerable uncertainty in the short term. The country's total installed capacity topped
18GW by the end of 2012, but installations for the start of this year are severely down on the
past few years.
India raises € 1 billion loan for green power grid
The plan to create a € 6667 million (Rs 50,000 crore) green grid to evacuate solar and wind
power has got a leg-up with the government receiving the first tranche of a 1 billion soft loan
from Germany. In the € 2400 million (Rs 18,000 crore) first phase, the grid will be set up in
Rajasthan and Tamil Nadu, both of which have substantial wind and solar power capacity.
Work has begun in these two states. Subsequently, work will begin in Maharashtra, Gujarat,
Karnataka and Andhra Pradesh. The first tranche € 333 million (of Rs 2,500 crore) of the euro 1
billion € 947 million (Rs 7,100 crore) loan has been received for the first phase. The Euro loan
agreement was signed during renewable Energy Ministry‘s visit to Germany along with the
Prime Minsiter earlier this year.
It is basically a huge grid upgrade project to catalyse higher wind and solar power generation.
Gradually, it will be extended to the entire country. An additional 30,000 mw solar and wind
energy capacity is to be added in five to seven years. India has a potential to generate
100,000 mw of wind and 200,000 mw solar power. The country now has 25,000 mw wind
power and 1,000 mw of solar power capacity. The state-run Power Grid Corporation will use
the loan to create the new transmission system and strengthen the existing one. The soft loan
guaranteed by the government will carry an interest rate of 2-3%. Renewable energy capacity
is growing rapidly with the cost per unit of generation of wind power coming down to just Rs 44.50 and solar power to Rs 6 -6.50 per kwh. The cost difference between thermal power and
renewable energy has narrowed substantially. About 16% of global final energy consumption
comes from renewable resources, with 10% of all energy from traditional biomass, mainly
used for heating, and 3.4% from hydroelectricity.
VDMA-Newsletter ―Indien ‖, Ausgabe 11/2013
Kontakt: Oliver Wack, Telefon: +49 69 66031444
8
Indian Economic and Industrial Scenario, November 2013
VDMA INDIA Office
Paper & Printing
Indian printing industry at a glance
In India,there are 2,35,000 printing companies which address a national market with 1.2 billion
people. In fact, forecasts indicate an above-average growth rate in the print market of India. By
2016, it will have risen from the tenth to the fifth place in global comparison. The driving forces
of this development are increasing literacy along with growing prosperity and more and more
consumption. This upward trend boosts the demand for books, newspapers and magazines as
well as the demand for packaging, labels, catalogues and other business stationery. The
quality of many print products, however, still leaves something to be desired – which obstructs
the export ambitions of the printing industry of India.
A recent survey of Indian printing houses showed that while their machines are on average
only 5 to 10 years old, the majority of the interviewees are dissatisfied with the quality level of
service and maintenance. The reason was that quite often, used machines are bought from
intermediaries. During their operation, the printing houses pay for the allegedly favourable
purchase in the form of poor supply of spare parts and long downtimes due to a lack of
maintenance and service. In addition, the interviewees were of the opinion that there is a lack
of training opportunities at the machines. These problems are even aggravated by insufficient
vocational training. In the last few months, export to India has been affected by the lower
exchange rate of the Rupee.
Rising paper prices challenge printer’s profitability
Tougher times ahead for printers as leading paper manufacturers have decided to increase
the prices of all uncoated High-Bright and Cream Wove papers by € 27 (Rs 2,000) per gross
metric tonne. The paper mills are being impacted severely by the domestic fibre deficit
scenario and its impact on wood prices. Wood is being transported across the length and
breadth of the country and is defying the generally accepted practice of procurement from the
catchment area. Also, for the first time in the history of Indian paper industry, import of wood
has become a reality. This cost push has further been compounded by increase in prices of
speciality chemicals, energy, transport and logistics, making it increasingly difficult for them to
operate profitably. For Copiers, Poster Paper, Sunlit Cartridge, Ledger and BCB, an increase
of € 20 (Rs.1500) PMT is expected. These increases will be effective beginning December,
2013.
Paper mills already increased the prices by 12% in the month of September due to higher
Dollar price, and now with this increase of about 15% in the current prices, the paper products,
like note books, corrugated and duplex boxes, labels and other stationer y items are bound to
increase. If the current trend of increase in paper prices keeps on moving like this it‘ll be very
difficult to survive for the printing and packaging industry. It will be a severe blow to the total
industry as each industrial unit will have to now pay more for every printed product they are
using. This in turn will increase the overall pricing and is going to very seriously affecting the
end user. It is advised to all the printers to keep the track of the paper prices, as the fluctuating
paper pricing can hamper the profitability of the printing units too. It is being suggested to
printers to have a 15% increase in the prices to absorb the rise cost of inputs.
India’s top print firms deploy PUR for books
PUR has gained traction in India with big ticket installations of the Welbound-Henkel PUR
solutions. This includes the award-winning book printer, Jak Printers in Mumbai, and Pragati
Offset. Some of the key names with PUR in their armoury include Pragati Offset, Parksons
Graphics, Jak Printers, Repro India, Replika Press, Akruti, Avantika Printers, and Art Printing
House. Akruti has installed Pune‘s first PUR perfect binder manufactured by Welbound
Worldwide earlier this year. Kolkata-based Art Printing House has also recently invested in
VDMA-Newsletter ―Indien ‖, Ausgabe 11/2013
Kontakt: Oliver Wack, Telefon: +49 69 66031444
9
Indian Economic and Industrial Scenario, November 2013
VDMA INDIA Office
PUR binder. In September 2011, Pragati Offset installed the RobaPur 4 MOD system on its
Kolbus.
Ports & Shipping
Port operators may be allowed to exit projects after 10 years
Like their counterparts in the highways sector, port operators may soon ha ve more flexibility to
exit public-private partnership projects by divesting full equity in them. The shipping ministry is
working on a proposal that would allow private players to sell off their entire stake after an
initial 10-year lock-in period, instead of having to hold at least 26% equity as per the current
model concession agreement structure.
The ministry is working on a Cabinet note that would propose amendments to the model
concession agreement (MCA) to offer more leeway in diluting the shareholding pattern by
members of a consortium executing a port project. The proposal suggests that companies
hold 51% for five years after COD, 26% for the next five years, after which they would be free
to dilute up to 100% equity. Essentially, this translates to a 10-year lock-in period after which
the private player can sell full equity in the project.
Adani Ports signs MoU with Belgian Port of Zeebrugge
Adani Ports & SEZ Ltd (APSEZ), India's largest private port developer, signed a memorandum
of understanding (MoU) with the Belgian Port of Zeebrugge to get access to European
markets. The MoU over a period of time will help in an enhanced movement of traffic to and
from APSEZ into Europe and beyond. Adani Ports will explore joint business opportunities
between the two ports along with other forms of trade, shipping, railway infrastructure across
India and Europe. Adani Ports was keen to jointly explore marketing initiatives and strategies
to promote Indo-European trade relations across both the ports via shipping lines.
MSTC plans to set up ship recycling yard at Gujarat
State-owned trading firm MSTC has proposed to set up an integrated ship recycling yard
under the Public Private Partnership route at Alang in Gujarat. The project can bring in
substantial revenue for the government in the form of taxes and levies on the real value of
goods as recorded in the e-commerce transactions. It will also ensure that steel and allied
products from the ship-breaking are sold through transparent and fair transactions. MSTC
suggested that ship recyclers could avail the services of MSTC for disposal of various scrap
material and e-waste through e-auction for safe handling and better price discovery, evincing
interest in setting up the project at Alang.
Alang houses are one of Asia's largest ship breaking yards. It produces 3.5 million tonne of rerollable steel per year and employs around 50,000 people. Alang yard has 167 plots
developed on 10 km long coast. It has a breaking capacity of 4 million tonne per annum. The
Gujarat Maritime Board regulates the ship breaking activities there. As many as 1,514 ships
were received for breaking up at the Alang yard between 2009-10 and 2012-13, compared to
less than 200 ships at Mumbai and Kerala yards.
Aims to increase capacity of ports to 3,200 MTPA by 2020
The Shipping Ministry aims to increase the capacity of Indian ports to 3,200 million tonnes
(MT) by 2020. The capacity of Indian ports including major and non-major ports has now
crossed 1,300 million tonnes per annum (MTPA). The ministry's vision and their maritime
VDMA-Newsletter ―Indien ‖, Ausgabe 11/2013
Kontakt: Oliver Wack, Telefon: +49 69 66031444
10
Indian Economic and Industrial Scenario, November 2013
VDMA INDIA Office
agenda is to increase the capacity to 3,200 million tonnes by 2020. Government of India has
taken various initiatives to enhance capacity of Indian ports and also to modernise their
operations. During the last year major ports awarded 32 projects to add a capacity of 137
MTPA and has been the best performance in many decades in the shipping ministry. In the
current year major ports are aiming to award 30 projects for a capacity addition of 284 million
tonnes per annum. As on date, they have crossed over 12 projects; Total investment for this €
3467 million (Rs 26,000 crore), till now € 507 million (3,800 crore) has been spent.
Time frame for ports at Sagar Island in West Bangal and Dugarajapatnam in Andhra Pradesh
is 2017-18 for first phase, ports generally take five years. The newly inagurated multipurpose
cargo berth No 15 and IFFCO barge jetty at Kandla port has added 4 million tonnes per
annum capacity at an investment of € 29 million (Rs 216 crore). These projects are aimed to
result in reduced waiting and turnaround time at the port.
India and Japan to strengthen ties in shipping sector
India and Japan have proposed to strengthen ties in the shipping sector and enable Japanese
companies to utilise facilities at Indian ports especially for importing automobile components.
The move comes at the backdrop of Minister of Shipping visit to Japan to meet Japan's
Minister of Land, Infrastructure, Transport and Tourism. The visiting delegation will have
discussions with the Japanese government for better coordination between two countries and
to further enable various Japanese companies to utilize facilities at Indian Ports, more
particular of Ennore and Chennai Ports.
India also lead discussions for obtaining funding from the Japan International Cooperation
Agency (JICA) for the Outer Harbour project of VOC Port, Thuthikoodi. The Indian delegation
will also visit the Port of Yokohama and Port of Nagoya in Japan to see the port operations
and the latest technologies being utilized in these two ports. The Japan government had
earlier evinced interest in developing the proposed Chennai Bengaluru Industrial Corridor as
part of the Peninsular Region Industrial Development corridor (PRIDe) of India. Ennore Port
has been identified as one of the main logistics hub in this industrial corridor developmen t.
JICA has already commenced a study for the purpose.
Garment and Leather
Garment exports target of € 12.41 billion ($17 billion) achievable
India's apparel exports target of € 12.41 billion ($17 billion) for the current fiscal is likely to be
met as shipments have registered a robust growth of about 31% in October. Garment exports
witnessed the highest growth last month in the current fiscal to $1.19 billion, compared to €
664 million ($909 million) in October of last fiscal. There is a good demand not only in
traditional markets like the US and Europe but also in emerging markets like Latin America.
The US and Europe together account for about 66% of the country's total apparel shipments.
Garment exports have picked up really fast in the first seven months of 2013-14, compared to
last fiscal. During April-October, shipments have increased by 15.5% year-on-year to about €
6.02 million ($8.25 billion). Last fiscal, garment exports had declined by 6% to € 9.43 billion
($12.92 billion). The apparel exports accounted for almost 39% of the country's total textiles
exports worth about € 23.36 million ($32 billion) in the last fiscal. The sector consists of a large
number of small and medium exporters who have been facing the credit crunch. The garment
exports industry employs about 11 million workers in the country
VDMA-Newsletter ―Indien ‖, Ausgabe 11/2013
Kontakt: Oliver Wack, Telefon: +49 69 66031444
11
Indian Economic and Industrial Scenario, November 2013
VDMA INDIA Office
Leather industry bounces back, expects 15% growth in 2013-14
After reporting zero or marginal growth over the past two years, the leather industry comprising thousands of small and medium enterprises (SMEs) - expects to close the current
fiscal year with 15% export growth. It attributes the recovery to discovery of new markets
following the adoption of a de-risking strategy, and the diversion of orders from China to India
as a result of China's ballooning manufacturing costs. It is expected that the exports of leather
and leather products to reach € 4.19 billion ($5.75 billion) in 2013-14.
The industry, which is among India's top 10 foreign exchange earners, reported 21% export
growth in 2010-11. The year 2011-12 saw no growth, while 2012-13 saw 3% growth, to some
€ 3.65 billion ($5 billion). As the situation is looking positive, the closures for this fiscal would
be around 15%. Though traditional markets such as Germany, Italy, Spain and Russia have
declined by more than 10%, the US and Denmark have reported an increase of around 20%,
with UK coming next with 10%. The industry is looking at the Far East and African and South
American countries for a big export push, as those countries have great potential. Indian
exporters have also benefitted from rising production costs in China, owing to wage increases.
The depreciation of the rupee against the US dollar and the British pound (UK and the US are
key markets) may have benefited a few exporters for a short period, but it is an ominous sign,
because it will make imported raw materials - on which the Indian leather industry is heavily
dependent - more expensive.
Indian garment exporters eat into share of China and Bangladesh
India‘s apparel exports are rising, primarily because the country is eating into the shares of
neighbouring China and Bangladesh. Exports from India are being driven by demand from
major textile importing regions such as the US and Euro zone. Currently, China is facing high
labour costs, and this is working in India's favor. Also, the yuan has risen against the dollar,
and this has reduced its competitive edge. In September, Bangladesh saw a protest by
labourers, who demanded higher wages. Also, the collapse of Rana Plaza, a huge garment
factory in Bangladesh in April, has caused concern on safety and working conditions in that
country.
Exports from India, on the other hand, have been aided by the falling rupee. India's garment
exports to the European Union increased 5.9% year-on-year in January-May 2013, while
those of China and Bangladesh declined 9.7% and 1.8% year-on-year, respectively.
In September, apparel exports from India rose 14.95% to € 0.81 billion ($1.11 billion). In the
first half of this financial year, India exported apparel worth € 5.77 million ($7.9 billion), a rise
of 13% over the year-ago period. For this financial year the apparel export stands at € 14.6
billion ($20billion). Last year, apparel and garment exports stood at € 10.22 billion ($14 billion).
Orders from the Euro zone have risen 15% compared to last year. Orders from the US, too,
have increased. Exporters are also seeing good demand from West Asia and Japan. India has
also started exporting apparel to Latin America, Russia and Australia. Most exporters are
running on full capacity and outsourcing manufacturing, as order books are increasing ahead
of the peak festive season (December).
General
Alfa Laval starts work on fourth unit; looks at acquisition
Betting big on India's potential, Swedish industrial group Alfa Laval has started work on its
fourth manufacturing plant here and is looking for acquisitions. India is a very important market
for them and will keep on expanding their presence and strength in India. They feel that Indian
market is slightly subdued now due to slower economic growth, but has the potential at a far
rapid pace. The company offers products and solutions based on its key technologies of heat
exchangers, separators and fluid handling which find application in sectors such as pharma,
bio-fuels, chemicals crude oil food and beverages.
It has three manufacturing plants in Maharashtra. The fourth plant is also set to be
commissioned in the Western state by 2015. The company, however, did not disclose the
investment it was making towards setting up of the plant. Alfa Laval, which has been present
in India since 1937, was earlier listed in the domestic bourses but it delisted last year. During
2011, it had clocked $ 200 million revenue in the country, and employs around 1,300 people.
Apart from the organic growth, it is eyeing inorganic expansion in India in areas that
complement its existing areas of business. Alfa Laval (India) has three service centres located
at Maharashtra, Andhra Pradesh and Haryana.
VDMA-Newsletter ―Indien ‖, Ausgabe 11/2013
Kontakt: Oliver Wack, Telefon: +49 69 66031444
12
Indian Economic and Industrial Scenario, November 2013
VDMA INDIA Office
India to make all out efforts to recoup engineering exports to
Germany, other key markets
In a bid to recoup the markets for engineering exports in Germany and other key European
nations , the EEPC India 's advanced action plan for next year includes hard-selling the
country's image as a reliable source for high-technology items at world renowned technology
fairs held in Hannover. While engineering exports in general have staged a smart pick-up in
the second quarter of the current fiscal , shipments to Germany and other western markets
like the US remain subdued. The engineering exports to Germany have shown a drop of over
8% in the April-September period of fiscal 2013-14 , while the overall consignments have
moved to the positive territory.
The European Union is among the top markets for the Indian engineering exports, which are
the second largest contributors to the country's export basket. Top global companies in the
fields of industrial automation, energy, industrial supply as well as research and technology
present their products, solutions and services participate in the exhibition, giving opportunity
for Indian firms to build and cement their international linkages.
Knorr-Bremse expands presence in India, opens new plant
Leading manufacturer of braking systems for rail and commercial vehicles, Knorr-Bremse
opened a new production facility in Palwal, Haryana and has invested € 26 million in India, as
part of its expansion programme. Knorr-Bremse is expanding its production capacity in India
for the rail vehicle sectors and the expansion is part of a global € 250 expansion plan. To
safeguard the Group's future and expand its capacity, in a four-year period between 2011 and
2014, Knorr-Bremse is investing over € 250 million in leading-edge plant & equipment and
buildings in growth markets around the world.
Along with state-of-the-art production technologies, optimised plant logistics and an improved
working environment for the employees, the new facility also presents an ecological focus and
the design of the building conforms to green building standards, with energy-efficient air
conditioning and high levels of insulation helping reduce its carbon footprint. The KnorrBremse Group is leading global manufacturer of braking systems for rail and commercial
vehicles. For more than 100 years now the company has pioneered the development,
production, marketing and servicing of state-of-the-art braking systems.
ABUS to invest € 40 million (Rs 300 crore) to set up
manufacturing unit in India
German lock manufacturer ABUS will invest over € 40 million (Rs 300 crore) in setting up a
manufacturing facility in India and is in talks with various state governments to fix a
location. They would also invest in establishing training centres in about 28 cities and in
imparting skills to employees. The firm would employ over 1,500 people by December next
year comprising of about 50% workers as women.
Indian security market is the fastest growing in the world at 36%. They will be setting up our
operations in 28 cities by December 2014. They will also set up a research and development
facility in the country and India will be the third country outside of Germany to have an ABUS
test lab. The company started its India operations in 2011 and has presence in Bihar,
Jharkhand, Orissa, West bengal and Assam.
JCB India enters hand and power tools segment
Leading construction equipment manufacturer, JCB India Ltd has now forayed into hand and
power tools segment. JCB has entered into an agreement with leading hand and power tools
manufacturers - Groz Pvt Ltd and Master Alloys Ltd respectively to manufacture, source and
distribute JCB branded tools. The entry into this segment was a part of brand extension.
The range of power tools of the company include angle grinder, circular saw, planer, marble
cutter, electrical drill and rotary hammer. The hand tools range includes storage solutions,
speciality tool sets, cutting and pipe tools, measuring and layout tools, striking & finishing and
general tools for Automotive and Industrial applications. JCB India's manufacturing facilities
are there in Ballabgarh and Pune.
VDMA-Newsletter ―Indien ‖, Ausgabe 11/2013
Kontakt: Oliver Wack, Telefon: +49 69 66031444
13
Indian Economic and Industrial Scenario, November 2013
VDMA INDIA Office
Focus State – Kerala
Governor: Shri Nikhil Kumar
Chief Minister: Shri Oommen Chandy
General Facts
Area (sq km)
38,863 sq kms
Total Population
33.38 million
Literacy Rate
93.9 %
Airports
Thiruvananthapuram, Kochi and Kozhikode
Infrastructure
Roads
Kerala has 151,652 km of road length with nearly 1,457 km of National Highways. The state is
well-connected to its neighboring states and other parts of India through nine National
Highways. Agencies maintaining roads in the state include the Public Works Department
(PWD), panchayats, municipalities, corporations, the departments of forests, irrigation,
railways and the Kerala State Electricity Board (KSEB). PWD roads constitute 15.3% of the
total road network. The Kerala State Transport Project (KSTP) was established in June 2002
to improve the 1,600 km of state roads and 77 km of inland-canals with the use of geographic
information system. As of May 2012, The Kerala State Road Transport Corporation (KSRTC)
provides road transport services in Kerala and operates 6,092 buses.
By Air
The state has three airports, handling both domestic and international flights. They are located
at Thiruvananthapuram, Kochi and Kozhikode. Together, the airports handled 47,285
international flights, carrying 6.4 million passengers and 36,285 domestic flights, carrying 3.3
million passengers, in 2011-12. The Cochin International Airport Limited (CIAL) is the first
green field airport in India, set up in the Public Private Partnership (PPP) mode. CIAL is
developing 450 acres of area around the airport as an aerotropolis to support the IT/ITeS
Technopark with residential and commercial space. A new terminal at Thiruvananthapuram
airport has been inaugurated in July 2010. Construction of the proposed International airport at
Kannur, spread over 2,000 acres, is started.
Railways
Kerala is well-connected to the other parts of the country via the railways. As of March 2011, it
had a railway network of 1,257 km with around 200 railway stations. The State Government
has appointed Kerala State Industrial Development Corporation Ltd (KSIDC) as nodal agency
for developing a project to establish a North-South High Speed Rail Corridor (HSRC) to
facilitate smooth and speedy passenger movement between various cities and towns in the
state. Railway divisions at Thiruvananthapuram, Palakkad and Madurai jointly carry out railway
operations in Kerala.
Ports
There are 18 ports in Kerala, of which Cochin is the major port and besides that, there are
three intermediate and 14 minor ports. In 2011-12, the total trade volume handled at the
Cochin port was 20.09 million tonnes, registering an increase of 12.4% compared to the
VDMA-Newsletter ―Indien ‖, Ausgabe 11/2013
Kontakt: Oliver Wack, Telefon: +49 69 66031444
14
Indian Economic and Industrial Scenario, November 2013
VDMA INDIA Office
previous year. The Cochin port handled 4.7 million tonnes per annum of containers during
2011-12. Kerala is constructing the Vizhinjam deep-water international container transshipment terminal at Vizhinjam, 17 km south of Thiruvananthapuram, under the Public Private
Partnership (PPP) mode.
Economy
Kerala is located along the coastline, to the extreme South-West of the Indian peninsula, flanked by the
Arabian Sea on the West and the mountains of the Western Ghats on the East. The state has a
coastline of 580 km. Kerala has the highest literacy rate among all the states in the country. Malayalam
is the most commonly spoken language. Hindi, English and Tamil are the other languages used. Kochi,
Kozhikode, Kollam, Thrissur, Alappuzha, Palakkad, Thalassery, Ponnani and Manjeri are some of the
key cities in the state. There are 44 rivers flowing through Kerala, the major ones being the Periyar (244
km), the Bharathapuzha (209 km), and the Pamba (176 km).
The state offers a wide range of policy and fiscal incentives for businesses under the Industrial &
Commercial Policy. Additionally, the state has well drafted sector-specific policies. At current prices,
Kerala‘s GSDP was about € 48 billion (US$ 65.8 billion) over 2011-12. The state‘s GSDP rose at a
CAGR* of 14.9% between 2004-05 and 2011-12. Growth was mainly driven by services and tertiary
sectors. At current prices, Kerala‘s NSDP was about € 43 billion (US$ 58.6 billion) during 2011-12.
NSDP expanded at a CAGR* of 15.1% between 2004-05 and 2011-12. The state‘s per capita GSDP
was € 1382 billion (US$ 1,894.4) over 2011-12 compared to US$ 807.1 during 2004-05. Per capita
GSDP increased at a CAGR of 14% cent between 2004-05 and 2011-12. Kerala‘s per capita NSDP was
€ 1232 (US$ 1,688) over 2011-12 compared to US$ 709.0 during 2004-05. Per capita NSDP increased
at a CAGR* of 14.2% between 2004-05 and 2011-12. Over 2011-12, the tertiary sector contributed
64.5% to the state‘s GSDP at current prices, followed by the secondary sector (20.4%). The tertiary
sector grew at an average rate of 16.7% between 2004-05 and 2011-12. Growth was driven by trade,
hotels, real estate, finance, insurance, transport, communications and other services. The secondary
sector rose at an average rate of 13.6% between 2004-05 and 2011-12. Growth was led by
manufacturing, construction and electricity, gas & water supply. The primary sector expanded at an
average rate of 12.7% between 2004-05 and 2011-12.
Agriculture and allied sectors contributed 9.1% to Kerala‘s GSDP over 2011-12. Kerala is the leader in
pepper production in the country. The state accounted for around 94.3% of total pepper production
during 2010-11. India is the fourth largest producer of natural rubber, and Kerala accounts for around
87.3% of total rubber production in India. Total area under crops was around 2,661,757 hectares during
2011-12. In 2010-11, the agriculture income of the state was estimated to € 2581 million (US$ 3,535.3
million). Exports of coastal and foreign cargo from the Kochi port increased by 23.4% and 28.4%,
respectively, during 2011-12. While coastal cargo exports stood at 1.5 million tonnes in 2011-12, foreign
cargo exports were at 2.8 million tonnes. Exports from CSEZs stood at US$ 6,249.8 million over 201112 compared to € 8438 million (US$ 1,155.9 million) during 2007-08, implying a CAGR* of 59.3 %.
According to DIPP, FDI inflows to the state (including Lakshadweep) totalled € 665 million (US$ 911
million) from April 2000 to March 2013. Over 2012-13, outstanding investments in Kerala totalled € 124
billion (US$ 169.7 billion). The services sector accounted for around 61 % of total outstanding
investments, followed by the manufacturing sector (17.4%). Some of the recent investments in the state
have been the KINFRA International Apparel Parks Ltd (KIAP), KINFRA Film and Video Park,
International Convention Centre Complex (ICCC) and Technocity (Phase-IV expansion programme of
Technopark) in Thiruvananthapuram; and Technopark Phase-III and a deep water port at Vizhinjam,
near Thiruvananthapuram. Projects worth US$ 2.4 billion are scheduled for completion in the next 12
months. Recent investments in the state include the Puthuvypeen LNG Terminal Phase-I € 437 million
(US$ 598.4 million), Lulu Shopping Mall in Kochi € 215 million (US$ 294.6 million) and Cruise Terminal
in Kochi € 37 million (US$ 50.2 million).
Urban Infrastructure
Under the Jawaharlal Nehru National Urban Renewal Mission (JNNURM), 15 projects worth € 173
million (US$ 238 million) have been approved over 2006-2012 for the development of urban
infrastructure in Thiruvananthapuram and Kochi. The Kerala Sustainable Urban Development Project
(KSUDP) is an Asian Development Bank-assisted project covering the five municipalities of
Thiruvananthapuram, Kochi, Kozhikode, Kollam and Thrissur. With an investment of € 161 million (US$
221.2 million), the project focuses on urban infrastructure improvements, community upgrading, local
government infrastructure development and capacity building, and implementation assistance. The
Kerala Water Authority (KWA) is responsible for the design, construction, execution, operation and
maintenance of most of the water supply schemes, and the collection and disposal of waste water in
Kerala. Construction of the first phase of SmartCity Kochi, a self-sustained industry township project
that is a conglomerate promoted by Dubai Holding member TECOM Investments for knowledge-based
VDMA-Newsletter ―Indien ‖, Ausgabe 11/2013
Kontakt: Oliver Wack, Telefon: +49 69 66031444
15
Indian Economic and Industrial Scenario, November 2013
VDMA INDIA Office
companies, would be completed within 18 months from the launch of the construction in June 2013.
JNNURM projects have been sanctioned for the improvement of water supply, sewerage, solid-waste
management and drainage, etc. ―Kudumbashree‖, the State Poverty Eradication Mission, is involved in
―Clean Kerala Business‘‘ to collect door-to-door household waste and process it for economic benefits.
Social Infrastructure
Kerala has the highest literacy rate among all states in the country. The state has a literacy rate of
93.9% according to the provisional data of Census 2011; the male literacy rate is 96% and the female
literacy rate is 92%. About 30% of total students are enrolled in government schools, 61% in
government-aided private schools and 9% in unaided private schools. Girl students constitute around
49.2% of total student enrolment in schools in the state. Kerala is home to several premier institutions
such as:
→Indian Institute of Management, Kozhikode
→Indian Institute of Space Science and Technology, Thiruvananthapuram
→National Institute of Technology, Calicut
→National University of Advanced Legal Studies, Kaloor
→Central Institute of Fisheries Nautical and Engineering Training, Kochi
→Central Institute of Fisheries Technology, Cochin
→Central Marine Fisheries Research Institute, Ernakulam
→Institute of Human Resource Development, Thiruvananthapuram
Major Industrial Projects being implemented
Name of the project
Promoter
Vizhinjam Seaport
International
BOTAnnuity
Cost €
million
€ 823
million
Kochi Metro-Rail
Project
BOTAnnuity
€ 485
million
Vallarpadam
Container
Transhipment
Terminal
Four-Laning of
Karnataka and Kerala
border to Kannur
section
BuildOperateTransfer
€ 323
million
BuildOperateTransfer –
Toll
€ 185
million
Industry
Project ownership
Ports
Cochin Port Trust
Urban
Development
Kerala Industrial
Infrastructure
Development
Corporation
Ports
Roads
Kochi Port Trust
NHAI
Key Industries in the State
KINFRA, KITCO Limited (formerly, Kerala Industrial and Technical Consultancy Organisation Limited),
the Directorate of Industries and Commerce, and the Small Industries Development Corporation are
jointly responsible for the development of industrial infrastructure in the state. Kerala‘s traditional
industries include handloom, cashew, coir and handicrafts. In terms of industrial growth, the state‘s
average growth from 2005-06 to 2010-11 was 15.66% at current prices. The total number of functional
micro, small and medium enterprises registered in Kerala was 194,908 as of March 2011. With a total
investment of € 1.41 billion (US$ 1.9 billion), these units employed 941,981 people and produced
goods and services worth € %26.63 billion (US$ 35.98 billion).
Coir
Kerala accounts for 95% of the total coir and coir products produced in India. The coir industry provides
employment to 350,000 persons. Almost 80% of the coir factories in the state are in the Alappuzha
district. The state has three coir parks, two at Alappuzha and one at Perumon, in Kollam. The Coir Cooperative Marketing Federation (COIRFED) is the apex federation of 841 primary coir co-operatives
societies. The US is the largest importer of coir products from India followed by the Netherlands, the
U.K, Germany, Italy, Spain etc.
VDMA-Newsletter ―Indien ‖, Ausgabe 11/2013
Kontakt: Oliver Wack, Telefon: +49 69 66031444
16
Indian Economic and Industrial Scenario, November 2013
VDMA INDIA Office
Handloom & Powerloom
Handloom industry employs about 100,000 people and ranks second among the traditional industries of
the state in terms of providing employment. The handloom industry in the state is mainly concentrated
in the districts of Thiruvananthapuram and Kannur and in some parts of Kozhikode, Palakkad, Thrissur,
Ernakulam, Kollam and Kasaragod. Around 94% of the total number of looms are under the cooperative
sector, the rest being under industrial entrepreneurs. At the end of March 2011, there were 648
registered Primary Handloom Weaver‘s Co-operative Societies (PHWCS), consisting of 167 factorytype societies and 481 cottage-type societies. The overall production of handloom cloth by handloom
industry of Kerala was 25.55 million metres in 2010-11, valued at € 29.6 million (US$ 40 million). The
four integrated powerloom co-operative societies in the state at Calicut, Wayanad, Neyyattinkara and
Kottayam have been accelerated by providing budgetary support. The Calicut Integrated Powerloom
Co-operative Society Ltd, has been converted as a textile park comprising all the segments of a
composite mill i.e., weaving, processing and garment making. Here semi automatic powerlooms,
automatic looms and highly sophisticated machines are operational.
IT and ITes
Kochi is connected by two submarine cables and satellite gateways that directly support cities including
Bengaluru, has emerged as an unique IT destination. The state has Technopark at
Thiruvananthapuram and Infopark at Kochi. A cyberpark at Kozhikode is under construction. The state
also has many private IT parks such as Smart City-Kochi, L&T Park-Kochi, Leela Info Park- Trivandrum,
Brigade Park-Kochi and Muthoot Pappachan Technopolis-Kochi.
Electronics
The self-contained Electronics Technology Park at Technopark, Trivandrum, has been instrumental in
attracting global electronics manufacturers. The state has the availability of skilled and semi-skilled
workers for the electronics industry.
Tourism
Tourism is a primary economic activity in Kerala. The sector contributes about 9% to the GDP of the
state. In 2010-11, total number of foreign and domestic tourists visiting the state were 659,265 and
8,595,075, respectively. Kerala Tourism has won many national and international awards. The state has
been voted the ‗Best Asian Holiday Destination 2010‘ by SmartTravelAsia.com ahead of other
destinations such as Bali, Phuket and Maldives. Some of the popular tourist destinations in Kerala
include beaches of Kovalam, Varkala, Marari, Bekal and Kannur; backwaters of Kumarakom,
Alappuzha, Kollam, Kochi and Kozhikode; and hill stations of Ponmudi, Munnar, Wayanad and
Wagamon. Kerala also has a number of well known wildlife reserves, including the Periyar Wildlife
Sanctuary, the Eravikulam National Park, the Thattekkad Bird Sanctuary and the Parambikulam Wildlife
Sanctuary.
VDMA-Newsletter ―Indien ‖, Ausgabe 11/2013
Kontakt: Oliver Wack, Telefon: +49 69 66031444
17
Indian Economic and Industrial Scenario, November 2013
VDMA INDIA Office
Seminars & Exhibitions
Plastivision India 2013
Date
Venue
Organizer
th
Bombay
Exhibition
Centre
12 December – 16 December 2013
Profile
The All India Plastics
Manufacturers
Association
Mumbai
Retrospect:
2011
A/52, AIPMA House,
Road No.1, M.I.D.C.,
Marol, Andheri (East),
Mumbai - 400093, India.
Exhibitors:
1000
Tel: +91-22 -4255 4707
Fax: +91-11-4255 4718
Countries :NA
Email:
[email protected]
Visitors:
70,000
Website:
www.plastivision.org
The 9 edition of
Plastivision India is
one of the largest
plastic exhibition in
India organized
by The All India
Plastics
Manufacturers'
Association support
ed by Government
of India, Ministry of
Chemicals &
Fertilizers, Export
Promotion Council
of India, Plastindia
Foundation, Indian
Institute of
Packaging and
Various State
Governments.
Products/ Participants
- Raw Materials &
Chemicals
- Plastic Packaging –
Machinery & Equipment
- Machinery & Equipment
for Processing Recycling
- Pre & Post Processing
Machines
- Plastic Extrusions
- Thermoforming, Films, Thermoplastics
- Moulds & Dies
- Testing & Measuring
Equipment
- Lamination & Coating
Machines
- Screen Printing Machine
- Finished & Semi finished
Products
- Additives, Colorants,
Masterbatches
- Fine Chemicals,
Petrochemicals
India Engineering Sourcing Show (IESS) 2014
22 January – 24 January 2014
Date
Venue
Organizer
Profile
Products/ Participants
Bombay
Exhibition
Centre
EEPC India
The 3rd edition of
India Engineering
Sourcing Show
(IESS) is India‘s
largest display of
Engineering
Products and
Services and
focuses on building
global partnerships
with India
-
Mumbai
'Vandhna', 4th Floor,
11, Tolstoy Marg, New
Delhi 110001,
Retrospect:
2013
Tel: (+91 11)
23711124 / 1125
Exhibitors: 500
Email:
[email protected]
Visitors:
10,000
Website:
www.eepcindia.org
Countries :NA
VDMA-Newsletter ―Indien ‖, Ausgabe 11/2013
Kontakt: Oliver Wack, Telefon: +49 69 66031444
-
-
Automotive
Components
Subcontracting &
Industrial Supplies
Research in
Technology &
Development
Industrial & Electrical
Machinery
18
Indian Economic and Industrial Scenario, November 2013
VDMA INDIA Office
Special Rates at Hotels in India
We have negotiated special rates for VDMA member companies with Taj Group, Oberoi Group & ITC
Group of Hotels covering not only the major cities like New Delhi, Mumbai, Kolkata, Chennai,
Bangalore, Hyderabad but also other destinations in India like Goa, Agra, Rajasthan, Kerala and many
others.
The discounts range from 25% up to 45% depending on the city and the hotel. However these
discounted rates would be valid only when the booking is done through VDMA India Office in Kolkata.
For further details or reservations feel free to contact us.
Activities & services of the VDMA India Office
Promote sales of members in participating divisions within VDMA especially exports, including
participation in exhibitions.
Organize symposia and similar presentations of German companies in India.
Participate and service bilateral programs such as those in existence, with governmental participation
between Germany and India.
Furnish information about the complete product program of the German industry to assist Indian
companies to identify right partners for mutual business relationship.
Provide information on market trends, prospects, future development, new projects and tenders.
Offer job opportunities by uploading your resume on the Indian website under careers.
Contact:
VDMA INDIA SERVICES PRIVATE LIMITED
Rajesh Nath, Managing Director
Jamly John, Regional Manager – West
GC 34, Sector III, Salt Lake
Kolkata– 700106, India
Telephone: +91 33 2321 7391
Fax: +91 33 2321 7073
E-mail: [email protected]
VDMA India Quarterly Newsletter-German Machinery Industry
The VDMA India office publishes a Quarterly Newsletter-German Machinery Industry. This Newsletter
informs the Indian industry about the development in the German Machinery industry in various
industrial sectors. This Newsletter has a circulation of around 8000 copies in different industrial
divisions. The VDMA member companies have the possibility of giving an advertisement in this
Newsletter at a discounted rate.
For further details, please contact:
Ms Jamly John at: [email protected]
VDMA-Newsletter ―Indien ‖, Ausgabe 11/2013
Kontakt: Oliver Wack, Telefon: +49 69 66031444
19