Marine box demand boost for Indian makers

An acute shortage of marine containers since October 2020 due to a global equipment imbalance has severely affected Indian trade. However, it has also come as a blessing in disguise for it has led to an awakening — both in the government and in the trade — on the need for India to aggressively restart container manufacturing locally and be less dependent on China, which has a monopoly with over 90 per cent market share globally.

Local container manufacturing is also critical for the success of Centre’s AatmaNirbhar Bharat (self-reliant India) programme.

Container manufacturing is not new to India. As containerisation started to flourish two decades ago, Indian companies manufactured them locally. However, the momentum fizzled out as Chinese companies gained dominance due to cheap labour, availability of abundant raw material and the ability to scale quickly — all of which were largely missing in India.

But action is now being taken — albeit a bit late — to revive local container manufacturing. Earlier this month, Container Corporation of India (Concor) placed orders for 1,000 containers each from Braithwaite & Company Ltd and Public Sector undertaking BHEL.

Concor, which earlier always sourced containers from China, discovered that locally made containers were cheaper by about 25 per cent. Each container costs about ₹2.5 lakh. It is looking to source more from within India.

There are reports that Gujarat government is exploring a plan to make Bhavnagar a hub for container manufacturing.

Bijoy Paulose, Managing Director of the Chennai-based VS&B Containers, said the company annually procures around 4,000 boxes, and all from China. India once had container manufacturers such as Balmer Lawrie (Chennai and Kochi); DCM Hyundai (Chennai); Nathaniel and Transfreight (Mumbai) and HIM Containers (Kolkata). However, these companies all shut down 10-20 years ago. Only DCM is doing local containers in Delhi, he added.

China has a monopoly and can quickly undercut the prices and squeeze the Indian initiative unless the government looks at serious intervention to prevent dumping. There is an annual demand for nearly 4,000 boxes in India. India now has raw materials such as Corten steel needed for the manufacture of these containers. However, 25 years ago even screws were imported, he added.

In the backdrop of the Covid-19 pandemic, local production will benefit the domestic trade during any future disruption, said Sai Krishna, Assistant Vice President, ICRA Ltd, an investment information and credit rating agency. However, matching China on the costs will be a challenge for Indian container manufacturers, he added.

The government can help by providing exemptions for manufacturers on key inputs such as steel or steel scrap. The key to success will be to build scale, else on the cost front the initiative might not take off, he said.

According to Sunil Vaswani, Executive Director, Container Shipping Lines Association (India), the limited access to available containers is driving up the buying price of new containers since manufacturers charge a premium due to the high demand. A relaxation of 40.8 per cent import duty after 18 per cent GST on Corten steel and/or suspension of iron ore exports will help Indian container manufacturers. Favourable policy framework, cost/price competitiveness and quality will boost the business. This would not only help India become self-reliant in the sector but also give the world another option — which would help during the peak demand months of the year — for sourcing of containers, so far largely restricted to China.

MPEDA, NCDC join hands to boost marine exports

Source: Financial Express, Feb 24, 2021

In a bid to improve exports of marine products, the state-run Marine Products Export Development Authority (MPEDA) has signed an MoU with the National Cooperative Development Corporation (NCDC). Under this arrangement, MPEDA-related entities and NCDC will jointly formulate programmes to boost infrastructure created for primary production and post-harvest management of marine products for exports.

MPEDA and its societies will share a list of all clusters in various states with NCDC, which may help them achieve scale and aggregation. It would also facilitate exports by the cooperatives assisted or identified by NCDC. The MoU comes at a time when marine exports have come under pressure in the aftermath of the Covid-19 outbreak. Marine exports dropped almost 17% on year between April and December to $4.5 billion, at a slightly faster pace than the fall in overall merchandise exports in the wake of the pandemic, showed the commerce ministry data.

Having recorded an impressive jump of 25% in FY18, marine exports started declining over the past two years in both FY19 and FY20, before the pandemic wrought havoc. MPEDA chairman KS Srinivas said: “We have identified ample scope for working jointly in the interest of export promotion of marine products for bringing better value to the stakeholders through a variety of activities, including export focus, in line with the policies of the government.”

Govt eases curbs on steel for highway construction to reduce cost

Source: Business Standard, Feb 14, 2021

New Delhi: Doing away with restrictive conditions for use of steel in highways construction, the government on Sunday announced that all kinds of steel will be allowed for highways provided these meet the quality parameters.

Earlier, the contract provisions required use of steel produced by primary/integrated steel producers only. The move is aimed at ensuring cost reduction in highways construction using steel.

“The Ministry of Road Transport and Highways has issued orders that all steel whether produced from ore, billets, pellets or melting of scrap – would be allowed to be used for National Highway construction, as long as it meets the standards required for specific grades of steel,” the Ministry said in a statement.

The steel proposed to be used would be tested in NABL-accredited laboratories as a third party check before approval. The move is based on the analysis and discussions with stakeholders and also technical opinion.

In view of the increase in steel prices, which can impact the cost of building national highways, Road Transport & Highways Minister Nitin Gadkari had suggested the need to re-look at all conditions which could be restrictive, without impacting the quality of material used for highway construction.

With this step, the supplier base for steel used in the construction of national highways would increase, leading to more competition and better price discovery by the markets, the statement said. This is also part of the continuous effort by the Minister to reduce costs through use of new technology, reducing restrictions on suppliers and making the procurement system transparent, it added.

India invites global defence, aerospace firms to set up manufacturing units

Source: Business Standard, Feb 03, 2021

Bengaluru: India on Wednesday invited global defence and aerospace companies to set up manufacturing units in the country taking advantage of various initiatives taken by the government in the field.

Prime Minister Narendra Modi said India offers unlimited potential in defence and aerospace.

“Aero India is a wonderful platform for collaborations in these areas. The Government of India has brought futuristic reforms in these sectors, which will add impetus to our quest to become Aatmanirbhar,” Modi wrote on Twitter.

Speaking at the inaugural ceremony of Aero India-2021, the country’s premier defence and aerospace show, at Air Force Station at Yelahanka here, Defence Minister Rajnath Singh invited global companies in the field to set up manufacturing units in the country by taking advantage of various initiatives taken by the government. Read the rest of this entry »

Govt eases 5G path by reducing notice period to 6 months for rolling out new tech by telcos

Source:, Jan 28, 2021

New Delhi: The government on Thursday eased the path for 5G rollout in the country by reducing to six months the notice period for offering any new technology using the spectrum being put up for auction in March.

Earlier, the Department of Telecom (DoT) has asked telecom operators to give one year notice before starting any technology using spectrum across the seven frequency bands that will be offered in auction on March 1.

“In case of switching over to different technology while rolling out the networks for compliance of roll out obligations, information regarding the new technology should be given at least six months before any new technology base station is offered for testing,” the amendment in the spectrum auction clause released by the DoT said.

The government has announced plan to auction 2,251.25 Megahertz (MHz) of spectrum worth ₹3.92 lakh crore in seven frequency bands — 700 Mhz, 800 Mhz, 900 Mhz, 1800 Mhz, 2100 Mhz, 2300 Mhz and 2500 Mhz. Bharti Airtel has demonstrated 5G services in the 1800 Mhz band. Reliance Jio has claimed it is ready for rollout of the next generation technology provided it gets spectrum for the same.

Tamil Nadu signs 14 MoUs worth Rs 10,000 cr, to create 7,000 new jobs

Source: Business Standard, Oct 12, 2020

Chennai: In a move that would help create 7,000 additional direct jobs in the state, the Tamil Nadu government on Monday signed 14 memorandums of understanding (MoUs), for investments worth over Rs 10,000 crore, with companies including JSW Renew, Britannia, Apollo Tyres, Li-Energy for EV battery packs, Britannia and Hyundai Wia.

The largest of these investments has been committed by JSW Renew Energy Ltd, for Rs 6,300 crore to set up 810 Mw of hybrid renewable project in Tuticorin, Tenkasi, Tirunelveli and Tiruppur, and 50 Mw of captive wind energy project in Rameswaram district. The next biggest is Spain-based Mantra Data Center’s MoU for setting up of a data centre with an investment of Rs 750 crore.

The state also signed an MoU with US-based TPI Composites for a Rs 300-crore expansion of wind blade manufacturing.

In the auto space, Apollo Tyres signed an MoU to invest Rs 505 crore in an expansion project at its Orgadam facility. Li-Energy, meanwhile, will invest Rs 300 crore for EV battery packs, and South Korea-based LS Automotive PVt Ltd will put in Rs 250 crore to manufacture auto switches. Hyundai Wia will invest Rs 109 crore in a brownfield expansion for auto components. And Green Tech Motors & Services will invest Rs 90 crore for battery and BMS.

While FMCG major Britannia has signed an MoU to invest Rs 250 crore in an expansion project, real estate player Greenbase Industrial Parks will invest Rs 750 crore in developing an industrial logistics park. The rest of the MoUs are from other sectors.

Tamil Nadu is ahead of other Indian states in post-Covid investments. According to Projecx data, the state attracted Rs 23,331.85 crore across 132 new projects between July and September. According to Guidance Tamil Nadu, a nodal agency to promote investments in the state, Rs 15,128 crore worth of new investments across various sectors were signed in May, deals for another Rs 15,536 crore worth of investments were signed in July.

Big booster: Govt panel clears $100-billion mobile export proposals from global manufacturers

Source: The Economic Times, Sept 07, 2020

New Delhi: Applications by iPhone contract makers FoxconnPegatron and Wistron as well as Samsung, Karbonn, Lava and Dixon to export mobile phones worth around $100 billion from India have been cleared by the empowered group, said people with knowledge of the matter.

“The empowered committee has approved all applications estimated to export around $100 billion (Rs 7.3 lakh crore) worth mobile phones under the production linked incentive scheme (PLI) and all the applications will be placed before the cabinet probably this week,” a senior government official told ET.

Members of the empowered committee include the Niti Aayog CEO along with the secretaries of economic affairs, expenditure, revenue, the Ministry of Electronics and Information Technology (MeitY), Department for Promotion of Industry and Internal Trade (DPIIT) and Directorate General of Foreign Trade (DGFT). Five of the applicants are overseas ones, seven are Indian and another six are in the components manufacturing scheme, officials said.

Apple’s contract manufacturers and Samsung have submitted production estimates of phones worth $50 billion each in the next five years, according to the applications, said people with knowledge of the matter. Exports will be slightly lower in each case.

Scheme was Notified in April
“The extraordinary response to the PLI shows enormous trust of the global community in India’s manufacturing capability and leadership of Prime Minister Narendra Modi,” Communications & IT minister Ravi Shankar Prasad told ET.
The PLI scheme, which aims to make India a manufacturing hub for smartphones, was notified in April. Apple’s contract manufacturers started producing its latest handset models, the iPhone 11 and iPhone SE, shortly after that in India. The scheme is aimed at attracting manufacturers looking to move out of China amid Sino-US trade tensions, and even looks to draw companies from manufacturing hubs such as Vietnam. While Foxconn and Wistron already have plants running in India, Pegatron — Apple’s second-largest contract manufacturer — is looking to set up its factory and is talking to states such as Uttar Pradesh, Tamil Nadu, Karnataka and Andhra Pradesh.

Meanwhile, Samsung, which now exports phones worth about $2.5 billion from India, is all set to ramp up its production to handsets worth $50 billion in the next five years. Of this, $40 billion will comprise devices with a factory price of more than $200.

“Samsung exporting $2.5 billion out of India — of this, 97% was in the below $200 segment. By putting this floor price of $200 for eligibility in the PLI scheme, we have incentivised them to make high-value phones in the country and now they will be vacating this space of less than Rs 15,000 factory price for Indian players to occupy,” said the first official cited above. “This is an important stage as it will ensure that Indian players are able to climb up the learning curve and start making world-class smartphones to compete globally.”

The five global applicants are Samsung, two units of Foxconn, Wistron and Pegatron. The domestic ones are Lava, Dixon, Micromax, Padget Electronics, Sojo, Karbonn and Optiemus. According to government data, 22 companies had applied for the Rs 41,000-crore PLI scheme.

Govt plans mega sops to attract local, global cos to coal mining

Source: The Economic Times, May 18, 2020

New Delhi: The government is likely to offer major rebates on revenue share to winners of commercial coal block auctions in order to attract investments from local and global miners. This follows the announcement on Saturday by finance minister Nirmala Sitharaman on liberalising commercial coal mining as part of the Rs 20-lakh crore Atmanirbhar Bharat stimulus. Companies that start early production from the blocks will be offered 50% rebate on revenue share payable to the government. The rebate will start from the day of production till the scheduled commencement date of mining agreed at the time of awarding of the block, sources said.

Similarly, a rebate of 50% of revenue share is proposed to be given on coal produced in excess of the scheduled target in a financial year. A further rebate of 20% is proposed on coal used for gasification or liquefaction, they said. “The rebate rates have been increased substantially considering the need for investments in the country as being sought under the Atmanirbhar Bharat stimulus,” aperson in know of the development told ETon condition of anonymity. Earlier the government’s revenue share was proposed to be reduced by 10% if the winning bidder starts the mine a year earlier than the agreed timeline and by 20% if production starts two years ahead of plan. The Union Cabinet this week is likely to consider the revenue-sharing model of auction for coal and lignite mines. The coal ministry expects to start auction of about 50 coal blocks, including some large mines, within 10 days of Cabinet approval.

Given the easy entry and exit norms, the government expects participation from Indian companies such as Hindalco, Jindal Steel & Power, JSW Energy, Adani Group and Vedanta, and global miners like Peabody, BHP Billiton and Rio Tinto. The government also proposes to increase the tenure of Coal India contracts for raw coking coal to up to 30 years as an import substitution measure.
The revenue-sharing model is based on recommendations of an expert committee headed by former chief vigilance commissioner Pratyush Sinha that was formed after the fourth and fifth rounds of auctions received atepid response from the industry. Ramanuj Kumar, partner, Cyril Amarchand Mangaldas said doing away with eligibilty criteria and introducing revenue share is expected to attract more players in coal mining. “However, getting investors for partially explored blocks may prove challenging,” he said.

India’s ultra mega solar parks offer $500-700 billion investment potential

Source: Business Standard, May 14, 2020

Bhubaneswar: The country’s ultra mega solar parks have offered potential investors an opportunity to join $500-700 billion renewable energy and grid infrastructure investment boom in the coming decade, a study noted.

“The ultra-mega solar parks have attracted foreign capital as well as top global developers to India and in return have provided investors with an opportunity to join a $500-700 billion renewable energy and grid infrastructure investment boom in the coming decade”, said Kashish Shah, research analyst at IEEFA.

India now has a capacity of 1 Gw across multiple ultra-mega solar parks, two of which are the largest commissioned in the world.

The Bhadla solar park in Rajasthan is the world’s largest such installation to date, covering more than 14,000 acres with total capacity of 2245 Mw.

The ultra-mega power plant (UMPP) concept involves a state government or local distribution company providing a single central grid connection and acquiring land on which the project can be built, shielding developers from procurement and time-delay risks.

“This approach has driven economies of scale and attracted global capital into India’s renewable energy sector over the last five years, with an immediate boon in mid-2017 of halving solar tariffs to a record low of Rs 2.44 per kWh ($39/MWh) at the prevailing exchange rate,” said Shah.

India pioneered the concept of the ultra mega power plant (UMPP) in a single solar industrial park. In 2016, the Ministry of New and Renewable Energy (MNRE) initially set a target for 40 industrial solar parks with a combined capacity of 20 GW, and in 2017 doubled this target to 40 GW by 2022.

According to the report, utility-sale solar parks in India have successfully overcome the three major risks associated with renewable energy development in India, namely project execution risk, off-taker risk and operation and maintenance risk.

The country’s land acquisition process is one of the most critical roadblocks to infrastructure projects. But, the state government renewable development energy agencies have helped in acquiring large-scale government and privately-owned land for the solar parks. The solar parks also have cushioned developers from the hassles of arranging the connection of generation units to the nearest sub-station.

Besides, the introduction of reverse bidding auctions has helped curtail prices. In reverse bidding auctions, developers bid for the lowest attainable tariff at which to supply power. The auction mechanism drives prices down by promoting competition, but also has introduced transparency and efficiency in the process of contracting new renewable energy capacity.

Maharashtra woos industry with ‘maha permits’, names ‘sherpa’ to facilitate FDI

Source: The Economic Times, May 14, 2020

Mumbai: Maharashtra is seeking to attract investment from companies by enhancing ease of doing business in the state while deciding against relaxing labour laws, unlike Uttar Pradesh and Madhya Pradesh, in the wake of the restrictions forced by Covid-19. State industry minister Subhash Desai said on Wednesday that companies investing in Maharashtra will not have to run around to get permissions but will get a single ‘mega permission’ to invest in the state, adding that the government is also looking to unveil a financial package for industries in the state. The move means industries would no longer have to seek separate clearances for power, water and other requirements.

A state government official said that once given the nod industries can start work while the rest of the clearances would be done in due course. He said this scheme was only for non-polluting industries. Desai said the state would also create a labour bureau which woould compile a list of workers and grade them as per their skills. The graded list would have skilled, semi-skilled and unskilled workers. Maharashtra has decided to appoint senior IAS officer Bhushan Gagrani as a ‘sherpa’, as private banks do, to interact with companies and help facilitate their investment and address their issues.

Gagrani’s task would be to prepare a blue print for government in order to attract more FDI from Japan, US, Korea and Germany. However, unlike Uttar Pradesh and Madhya Pradesh, which have relaxed labour laws, Maharashtra is not considering this option. “We need to have a balance between industrial growth and labour reforms,” said an official on condition of anonymity.