Top CEOs from India and the U.K. on Friday pitched for a
more transparent and consistent deci-sion-making regime as also a uni-form
treatment of corporates across the world, as Prime Minister Narendra Modi
vowed to work “ceaselessly” towards Indian economy’s integration with the
rest of the world.
A reconstituted India-UK CE-Os Forum, during its first
meet-ing, identified six overarching themes as important areas of
collaboration to take forward — smart cities and the digital economy,
healthcare, education and skills, engineering, defence and security, and
financial and professional services.
The meeting took place in the presence of Mr. Modi as
well as his British counterpart David Cameron. “We are confidently,
consistently and ceaselessly working to integrate our economy with the
world,” Mr. Modi told the gather-ing at 11 Downing Street, next door to Mr.
Cameron’s offIce in London. Mr. Cameron encouraged the company chairs and
chief executives to identify the “best ways to build new trade partnerships
and investment opportunities and use the strength of existing commercial
relationships to identify and build more partnerships between innovative
Indian and U.K. companies.”
The forum was co-chaired by Tata Group chairman Cyrus Mis-try
on the Indian side and Standard Life chairman Sir Gerry Grimstone on the
U.K. side. “The common ask of the industry in both countries is a business
environment characterised by simplicity in structures and processes, clarity
and transparency in decision-making and uniformity and consistency in the
treatment of corporates and people across borders,” Mr. Mistry said.
“The new UK-India CEOs Fo-rum provides a powerful
foundation with which to implement initiatives that will bring our two
countries closer together, based on mutual respect and shared values,” said
Mr. Mistry, who was joined by the likes of Bharti Enter-prises chairman
Sunil Bharti Mittal, Tata Consultancy Services CEO & MD N. Chandrasekaran
and Bharat Forge Chairman Baba Kalyani.
“Today’s meeting was a great opportunity to celebrate the
success of the UK-India commercial relationship. India is the third largest
investor in the U.K., and the U.K. is the largest G20 investor in India,”
Mr. Gerry Grim-stone said. “This forum will forge deeper collaboration in
areas where there is scope to take relationship to the next levels,” said
Mr. Grim-stone, whose U.K. team included leading British company
representatives like Vodafone chief executive Vitorio Calao, BAE CEO Ian
King and Rolls-Royce CEO Warren East.
The U.K. is the largest G20 investor in India, with 535
U.K. businesses employing 6,91,000 people across the country in sectors as
diverse as retail, infrastructure, construction, information and
communications technology, creative industries and health-care. In the U.K.,
around 800 In-dian businesses employ 110,000 people.
The ambitious Rs.15,000 crore North East connectivity
project is struggling to take of one year after India and Japan jointly
agreed to work on the project to quickly transform the region into a
manufacturing hub with the help of bet-ter road infrastructure.
There were differences between JICA (Japan International
Cooperation Agency) and the National Highways and Infrastructure Development
Corporation (NHIDCL) on issues such as the various costs involved in the
project, and the technology that is to be used in building roads.
There are also differences between the two on the manner
in which environment and social impact assessments are to be carried out.
NHIDCL is a wholly owned company of the Ministry of Road Transport &
Highways (MORTH) and is the project implementing agency.
Also, it is learnt that local stakeholders such as the
Khasi Hills Autonomous District Council in Meghalaya are yet to give their
‘no objection certificates’.
With the Japanese Prime Minister Shinzo Abe slated to
visit India later next month, the Prime Minister’s office (PMO) has sought a
status report of the project and will shortly hold an inter-ministerial
meeting on it to expeditiously resolve all the outstanding issues.
Growth in industrial production, as measured by the Index
of Industri-al Production, slowed down in September to 3.6 per cent from the
break-neck 6.3 per cent achieved in August. Retail inflation for October,
also released on Thursday, accelerated to 5 per cent from 4.4 per cent in
September, marking the fourth consecutive month of consumer price inflation
“The General Index (of Industrial Production) for the
month of September 2015 stands at 178.0, which is 3.6 per cent higher as
com-pared to the level in the month of September 2014. The cumulative growth
for the period April-September 2015-16 over the corresponding period of the
previous year stands at 4 per cent,” the government said in a release.
The 3.6 per cent growth rate in industrial production
seems more the norm than the high 6.3 achieved the previous month. In fact,
the growth rate achieved in September is exactly the median growth rate over
the period January-September. August seems to have been an aberration,
registering a growth rate 2.6 percentage points higher than the median.
That said, some elements of the index certainly have
fallen more drastically than others. Growth in the manufacturing sector, for
ex-ample, plummeted to 2.6 per cent in September from a heady 6.6 per cent
the previous month. However, this 2.6 per cent is low even com-pared to more
‘normal’ months, falling well below the 3.9 per cent median growth rate
An exception The electricity sector, on the other hand,
grew very strongly in September, coming in at 11.4 per cent, up from 5.6 per
cent in Au-gust. This is the fastest growth the sector has seen since August
2014. Notably, by usage, the capital goods sector slowed down considerably,
coming in at 10.5 per cent in September compared to 21.4 per cent in August.
However, this could be more of a correction since the
sector grew at 10.6 per cent in July. Consumer goods, a measure of demand in
the economy, also slowed to 0.6 per cent in September compared to 6 per cent
in Au-gust. Growth in the Consumer Price Index, at 5 per cent in October,
was the highest it has been since June, when it was 5.4 per cent. The
greatest increase can be seen in the food and beverages segment, which
accelerated from 4.3 per cent in September to 5.3 per cent in October. Here,
urban Indians felt the pinch more than rural Indians, although the rate of
inflation quicken considerably for the latter as well. Food inflation in
urban India went from 3.8 per cent in September to 5.4 per cent in October.
The same numbers are 4.5 per cent and 5.4 per cent for
rural India. Significantly, growth in the fuel and light segment of the CPI
slowed for the third consecutive month to 5.3 per cent from 5.8 per cent two
months ago. Inflation in clothing and footwear, at 5.6 per cent was at a
multi-year low, lower than it has been for at least three and a half years.
Although CPI inflation has been accelerating lately, it
is still within the Reserve Bank of India’s com-fort zone of 6 per cent that
it want-ed to achieve by January 2016.
The Centre on Tuesday announced ‘Big Bang’ Foreign Direct
Investment (FDI) reforms, easing norms across 15 sectors including defence,
banking, construction, single brand retail, broadcasting and civil aviation.
The move is aimed at boosting the investment environment and attracting more
foreign capital to the country.
The announcement was made two days after the Bharatiya
Janata Party-led National Democratic Alliance suffered a resounding defeat
in the Bihar Assembly elections. It also came on the eve of Prime Minister
Narendra Modi’s visit to the U.K., where he could have otherwise faced tough
questions on his government’s major initiatives to spur foreign investment.
For facilitating faster approvals on most of the
proposals, the government also raised the threshold limit of approval by
Foreign Investment Promotion Board from the earlier Rs.3,000 crore to
Rs.5,000 crore. As per the existing policy, FIPB considers foreign
investment proposals of in-flow up to Rs.3,000 crore and those above that
limit are placed for consideration of the Cabinet Committee on Economic
According to an official release, the crux of these
reforms is to further ease, rationalise and simplify the process of foreign
investments in the country and to put more and more FDI proposals on
automatic route in-stead of Government route where time and energy of the
investors is wasted.
For the sake of ease of doing business, the Industry
Ministry will soon consolidate all FDI related instructions contained in
various notifications & press notes and prepare a booklet so that the
investors do not have to refer to several documents of different
The official release said refining of foreign investment
norms in construction is to facilitate the construction of 50 million houses
for poor. It added that opening up of the manufacturing sector for
wholesale, retail and e-commerce is aimed at motivating industries to Make
In India and sell it to the customers here instead of importing from other
The struggling construction sector will be a major
beneficiary as radical changes in FDI norms have been brought in to boost
demand for steel, cement and spur economic activity, ultimately with an aim
to help build 50 million affordable houses for the poor.
Foreign investment up to 49 per cent has been allowed
under automatic route from the earlier government approved route. Proposals
for foreign investment in excess of 49 per cent will be considered by FIPB.
Portfolio investment and foreign venture capital investment, which were
restricted to 24 per cent, have now been hiked to 49 per cent and that too
through the automatic route.
To ensure that ownership and control remain in Indian
hands, Government approval, of course, will be required in case of infusion
of fresh foreign in-vestment within the permitted automatic route level,
resulting in change in the ownership pattern or transfer of stake by
existing investor to new foreign investor.
The government also decided to plantation activities
namely; coffee, rubber, cardamom , palm oil tree and olive oil tree
plantations also for 100 per cent foreign investment under automatic route.
As of now, only tea plantation was open to foreign investment.
The Government’s decision to allow 100 per cent Foreign
Direct Investment (FDI) in general aviation and ground handling services is
likely to benefit these segments as foreign air charter operators and ground
handlers with deep pockets and expertise will set up base here or buy out
Still, the policy decision must be backed by
infrastructure on the ground, say ex-perts and industry executives.
The general aviation sector, comprising 120 non-scheduled
operators with a fleet of close to 200 jet and turbo-prop aircraft in India,
is suffering from heavy losses amidst high operating cost, under-utilised
capacity and tough regulatory environment that is considered stringent for
movement of aircraft carrying HNIs, corporate honchos and foreigners.
“In India 35 per cent of general aviation aircraft
capacity is under-utilised. Here the maximum utilisation per air-craft is
400 hours per year compared to 800 to 900 hours internationally. Unless we
improve the flying hours here, viability will remain a distant dream and no
one will be keen to invest,” Mr. Wadhwa said.