“India presents a great investment destination to any international business”

Source: Economic Times, 19 January 2022

India and UK formally launched talks last week for concluding FTA by early 2023. Richard Heald – Executive Chair, UK India Business Council in a wide ranging interview to ET said by making more investments, businesses in both countries stand to gain a lot. The UK is one of the world’s largest economies, home to many of the world’s greatest universities and research centers, and world class legal and regulatory institutions, Heald said, adding, FTA will enormously help to maximize that opportunity and make it easier for UK businesses to trade and invest there. 

How do you see India as an investment destination?
India today presents a great investment destination to any international business, thanks to its large economy, huge consumer market, and abundant skills and talent. What is even more exciting though is the potential. Economists predict it will be the world’s 3rd largest economy and 3rd largest consumer market by 2030. Strengths in manufacturing, digital and IT, and across the economy are increasingly evident and as such it is an extremely exciting place to be. 

UK businesses are already deeply rooted in India, with 500-strong UK businesses operating in India, employing more than 400,000 people. Many of these businesses are looking to expand in India, and many UK businesses not yet invested are keen to do so when the time is right. That time is now as an FTA will enormously help to maximize that opportunity and make it easier for UK businesses to trade and invest there.

What are the top areas that UKIBC wants India and the UK to focus on? 􀀀hat are some of the key recommendations from UK business? 
From extensive UKIBC consultations carried out last year across 20 roundtables and involving around 200 companies, it is clear that businesses in both countries, across all sectors, have high hopes for the FTA negotiations.

In particular, there are three mains recommendations that businesses would like: 

1. Business want to see a reduction in tari􀀀s, for example in food and drink and healthcare.
2. They want to see a greater alignment of standards and simplified customs procedures.
3. And businesses want to see alignment of data protection rules and IP practices, so as to realize the full potential of the India-UK partnership, particularly in the innovative, R&D-intensive sectors that will drive the partnership in the years and decades to come. 

It was very welcoming to hear from Minister Shri Piyush Goyal at the launch on the importance that both Governments and businesses hold for data free 􀀂ow, and use of data as a tool to expand digital space. That is absolutely right.

International supply chains are increasingly digital and, as such, the facilitation of digital trade, which can be achieved through alignment of data protection rules and an India-UK data adequacy agreement, is thus critical. 

This is a trading agreement being negotiated in a completely different world to two years prior, with hundreds of millions of people around the world working from home in that time. Services like education, healthcare, shopping, and banking are increasingly done on digital platforms. So, it is more important than ever to create the frameworks that allow digital services to flourish.

A final point I would like to make here is that businesses are also interested in an interim, or early harvest deal. But they want this to be a building block to a comprehensive deal that will really transform the bilateral partnership, enabling the governments to hit their target of doubling trade to £50 billion by 2030.

This approach of reaching an “early harvest agreement” would: capitalize on the excellent momentum already created by the Governments; it would lock-in wins and deliver economic benefits on an ongoing basis; and it would build the trust, confidence and momentum that may be needed to overcome more difficult issues in the medium- and long-term. 

It is notable that “Ease of Doing Business” has been featured as a prominent discussion area among the UK businesses. How do you see that improving in the future basis your discussions with DIT & GoI?
Ease of doing business goes hand in hand with FTA type issues and remains a vital enabler of greater cooperation. As well as an attractive market as discussed in your previous question, business also needs regulatory certainty and a sound operating environment, namely “ease of doing business”. There are still challenges to overcome, as indeed there are in every country, but huge progress has been made in recent years, and I applaud the Government of India on the great work it has done to improve the ease of doing business to date. These reforms have received a positive reception from businesses and is key to attracting investors. 

Moving forwards, in all our discussions with various Ministries and Departments in both Governments, officials reiterated their continued commitment to upholding the ease of doing business and have been willing to engage with businesses, listen to their feedback and take that forward for a win-win. The better the operating environment, the greater the level of investment, put simply. 

Most recently, the UKIBC launched our 7th Annual Doing Business in India Report in December 2021 and presented it to both Governments. There, we describe the key challenges that businesses are facing and their reform priorities. It has been most welcome that DPIIT and others across the GoI have engaged so heartedly with us on this so the signs are positive, and we will continue to engage with both Governments in the future. 

The rationale of having India-UK FTA. How does it help India in having FTA with the UK?

By making more investments, businesses in both countries stand to gain a lot. The UK is one of the world’s largest economies, home to many of the world’s greatest universities and research centers, and world-class legal and regulatory institutions. An Indian business interested in the UK could thus gain access to the UK’s world-class workforce, regulatory and legislative environment, and large market if it were to act upon its interest. 

In particular, the UK remains a leading financial center. Expertise in the STEM areas is also a great opportunity for collaboration and partnerships in engineering, manufacturing, and infrastructure, both for industry and academia and research. Not only for economic development, but these areas will also be crucial for overcoming the great issues of our time such as climate change. 

For consumers, a closer trading relationship will help to make more high-quality products available. There are many mutual benefits that both our countries will gain by working together.

JFL launches US fried chicken brand Popeyes in India, opens first restaurant in Bengaluru

Source: Economic Times, 20 January 2022

New Delhi: Jubilant Foodworks Ltd, the country’s leading quick service restaurant (QSR) operator, on Wednesday announced to launch the iconic US Fried Chicken brand Popeyes in India by opening its first store in Bengaluru on Wednesday. Louisiana-born Popeyes was founded in 1972 and has been one of America’s most popular and fastest-growing chicken brands. 

Jubilant Foodworks Ltd (JFL), which is also a master franchise of brands such as Dominos and Dunkin’ Donuts, will open two more Popeyes restaurants in Bengaluru soon thereafter, according to a statement.

JFL, part of the Jubilant Bhartia Group, had last year announced to sign a Master Franchise and Development Agreement, with Popeyes for markets such as India, Bangladesh, Nepal and Bhutan. 

Jubilant Foodworks Chairman Shyam S Bhartia and its co-Chairman Hari S Bhartia said, “We are confident that Popeyes will not only delight guests but also strategically complement our portfolio and fortify JFL’s leadership in the QSR domain.” 

“The unique, delicious and wholesome Cajun flavours of Popeyes are certain to appeal to the Indian audience. 

“Over the years, Popeyes has emerged as one of the most loved brands across the globe, and we aspire to recreate that same excitement and loyalty for Popeyes and its signature dishes in India as well,” JFL Chief Executive Officer Pratik Pota said. 

David Shear, president of RBI International, the parent company of Popeyes, said: “This new country entry illustrates our commitment to serving more guests around the world with our signature blend of spices and flavours. We are confident that our India guests will love their Fried Chicken from Popeyes, and we look forward to this launch.” 

Popeyes is best known for its spicy New Orleans style fried chicken and chicken sandwich. 

Its India menu will feature the signature Cajun-flavoured, world-famous chicken sandwich, which took the internet by storm in August 2019 in the United States.

Moreover, the Indian menu will also feature an array of vegetarian options, it added. 

Popeyes will have its app and a website allowing customers to experience the food at home as well. JFL has built its own in-house delivery fleet of e-bikes.

India’s economy recovery on ‘solid path’ amid rapid vaccination progress, forecast to grow 6.5 per cent in FY 2022: UN

Source: Economic Times, 13 January 2022

India is forecast to grow at 6.5 per cent in fiscal year 2022, a decline from the 8.4 per cent GDP estimate in previous financial year, and while the country’s economic recovery is on a “solid path” amid rapid vaccination progress, coal shortages and high oil prices could put the brakes on economic activity in the near term, the UN said on Thursday.

The flagship United Nations World Economic Situation and Prospects (WESP) 2022 report, launched here, said that India’s GDP is forecast to grow at 6.5 per cent in fiscal year 2022, a contraction from the estimated growth of 8.4 per cent in fiscal year 2021.

Growth is projected to further slow down to 5.9 per cent in the financial year 2023, the report said.

On a calendar year basis, the report says that India’s GDP is projected to expand by 6.7 per cent in 2022 after a 9 per cent expansion in calendar year 2021, as base effects wane.

GDP growth for the country is forecast to slow down to 6.1 per cent in calendar year 2023, the report said.

“India’s economic recovery is on a solid path, amid rapid vaccination progress, less stringent social restrictions and still supportive fiscal and monetary stances,” the report said.

The report noted that for India, robust export growth and public investments underpin economic activity, but high oil prices and coal shortages could put the brakes on economic activity in the near term.

“It will remain crucial to encourage private investment to support inclusive growth beyond the recovery,” it added.

It added that while still vulnerable, India is in a better position to navigate financial turbulence compared to its situation during the “taper tantrum” episode after the 2008-2009 global financial crisis.

This is due to a stronger external position and measures to minimise risks to bank balance sheets. In the medium-term, scarring effects from higher public and private debt or permanent impacts on labour markets could reduce potential growth and prospects for poverty reduction.

In India, inflation is expected to decelerate throughout 2022, continuing a trend observed since the second half of 2021 when relatively restrained food prices compensated for higher oil prices.

A sudden and renewed rise in food inflation, however, due to unpredictable weather, broader supply disruptions and higher agricultural prices, could undermine food security, reduce real incomes and increase hunger across the region.

The report said that the global economic recovery is facing significant headwinds amid new waves of COVID-19 infections, persistent labour market challenges, lingering supply-chain challenges and rising inflationary pressures.

After expanding by 5.5 per cent in 2021, the global output is projected to grow by only 4.0 per cent in 2022 and 3.5 per cent in 2023.

“In this fragile and uneven period of global recovery, the World Economic Situation and Prospects 2022 calls for better targeted and coordinated policy and financial measures at the national and international levels,” UN Secretary-General Antonio Guterres said.

“The time is now to close the inequality gaps within and among countries. If we work in solidarity – as one human family – we can make 2022 a true year of recovery for people and economies alike,” he said.

With the highly transmissible Omicron variant of COVID-19 unleashing new waves of infections, the human and economic toll of the pandemic are projected to increase again.

“Without a coordinated and sustained global approach to contain COVID-19 that includes universal access to vaccines, the pandemic will continue to pose the greatest risk to an inclusive and sustainable recovery of the world economy,” Under-Secretary-General of the United Nations Department of Economic and Social Affairs Liu Zhenmin said.

In India, a deadly wave of infection with the Delta variant stole 240,000 lives between April and June 2021 and disrupted economic recovery.

“Similar episodes could take place in the near term,” the report said.

It also noted the “important step” taken by India to commit to 50 per cent of its energy mix coming from renewable sources by 2030 and to reaching net-zero emissions by 2070.

Leading French firm set to develop engine for military platform in India

Source: Economic Times, 18 January 2022

A leading French defence major is set to produce an engine for a military platform in India as part of a joint venture with an Indian company under the strategic partnership model, a move aimed at further ramping up defence cooperation between the two countries. In an address at an industry chamber on Saturday, Defence Minister Rajnath Singh referred to the move that was agreed to in his wide-ranging talks with his French counterpart, Florence Parly.

Though the defence minister did not specify about the engine and its use, people familiar with the development said the project will be focussed on the requirement for military helicopters that India plans to roll out in the next few years.Source: The Portugal News

Singh held talks with Parly on Friday with a focus on further boosting co-development and co-production of various platforms.

“It was a matter of manufacturing of an engine. I am happy to say that the French government has agreed that a major French company will come to India and produce the engine here under the strategic partnership with an Indian company,” he said, referring to his talks with Parly.

The defence minister made the remarks to emphasise that India has clearly been sending out a message to the United States, Russia, France and many of its partner countries that military platforms and equipment required by the Indian armed forces will have to be manufactured in India.

The people cited above said India and France have been in talks for the engine project.

In 2017, India unveiled the ambitious strategic partnership (SP) model to facilitate joint ventures between select private Indian firms and foreign defence majors to build military platforms like submarines and fighter jets in the country.

The model aims to create a vibrant defence manufacturing ecosystem in the country through joint ventures between Indian corporates and global defence majors.

India has already spent Rs 2,035 crore for the development of a fighter jet engine to power indigenously-built aircraft. However, the Kaveri engine project is yet to be completed.

The engine project was approved by the Cabinet Committee on Security in 1989 and was primarily rolled out for India’s Light Combat Aircraft (LCA) programme.

After the talks between Singh and Parly, the defence ministry said they discussed defence industrial cooperation with a focus on future collaborations and co-production of equipment.

“The ministers acknowledged their convergences on a number of strategic and defence issues. They expressed commitment to work together to enhance cooperation in bilateral, regional and multilateral forums,” it said in a statement.

Ashok Leyland’s electric vehicle unit Switch sets up manufacturing site in Spain

Source: Economic Times, 15 January 2022

Ashok Leyland’s electric vehicle arm Switch Mobility will be setting up a new manufacturing and technology centre in Castilla y León, Spain, and invest about €100 million in the region over the next decade, the company said Wednesday.

The hub will have two production manufacturing electric buses and vans and is expected to see the first buses produced in the fourth quarter of 2022, as per a press statement. The manufacturing site will also have the capacity to serve markets outside of Europe including South America.

With a strong automotive supply chain within the region, excellent transport links and a high level of skilled automotive engineers and operatives, Switch has identified Castilla y León as the ideal location for their facility, the press statement further read.

“Supporting our well-established sites in the UK and India, our Spanish facility will provide us with crucial access to the European market,” said Andy Palmer, Executive Vice Chairman and CEO of Switch Mobility.
In a recent interview to ET, Palmer said that the company is looking to invest $150-200 million in the coming three to five years and is raising funds for the same.

Researcher Constantino Xavier considers, in an interview with Lusa, that Portugal’s “greatest challenge” is to think of “a long-term strategy for India”.

Source: The Portugal News, 17 January 2022

The Council of EU Chambers of Commerce in India

“I think the biggest challenge for Portugal will be to think of a long-term strategy for India, India is a giant country that will never take the initiative in deepening relations with Portugal as a priority”, said the researcher at the Center for the New Delhi’s Social and Economic Progress.

Despite the visit of Prime Minister Narenda Modi, in 2017, the various agreements and political visits, Constantino Xavier believes that “while Portugal does not think deeply about India and how India can really boost development, the economy, political, strategic, diplomatic interests, it will be very difficult for Portugal to play a role” in that country.

And to carry out this strategy, “it is necessary to think first about what the priorities are” and then direct economic diplomacy, guiding and preparing companies and the new generations of Portuguese entrepreneurs in this regard.

“To do this, it is necessary to get to know India, it is not about going to India just because India is gigantic and is a great economy or because it offers an alternative to China”, he says, defending that “it is necessary to find doors”.

However, for a small country like Portugal -, alongside India’s other strategic partners, which include Japan, the United States, the European Union, Germany, Italy, Singapore or Spain, it is “particularly important to focus on priority sectors and focus energies on specific areas”.

Constantino Xavier also defends the need for “experts” from India in Portugal, who work in the Indian economy, who understand the various Indian industries, from infrastructure, through telecommunications, to the education sector.

“All of this has to be studied and deepened and, for that, we have to think of a strategy, we have to think of the instruments, the necessary investments to encourage this study of India in Portugal”, concluded Constantino Xavier.

Exports rise 38.91 pc to $37.81 bn in December; trade deficit widens to $21.68 bn: Govt data

Source: Financial Express, 14 January 2022

The country’s exports in December 2021 surged 38.91 per cent on an annual basis to USD 37.81 billion due to healthy performance by sectors such as engineering, textiles and chemicals, even as the trade deficit widened to USD 21.68 billion during the month, government data showed on Friday. Imports in December 2021 too increased 38.55 per cent to USD 59.48 billion. During April-December 2021-22, exports rose 49.66 per cent to USD 301.38 billion.

Imports during the period surged 68.91 per cent to USD 443.82 billion, leaving a trade deficit of USD 142.44 billion, the data showed. “Merchandise exports in December 2021 were USD 37.81 billion, as compared to USD 27.22 billion in December 2020, exhibiting a positive growth of 38.91 per cent. As compared to December 2019, exports in December 2021 exhibited a positive growth of 39.47 per cent,” the commerce ministry said in a statement.

KEC International bags Rs 1,025-crore new orders

Source: Economic Times, 14 January 2022

Engineering, procurement and construction major KEC International on Friday said it has bagged new orders worth Rs 1,025 crore across its various businesses. The company’s transmission and distribution business has secured orders for projects in India and the Middle East, the RPG Group firm said in a filing to the BSE.

Its civil business has also secured an order for infrastructure works in the metals and mining segment in India, it said.

The other businesses from which the company has bagged orders include oil and gas pipelines and smart infrastructure.

KEC International MD and CEO Vimal Kejriwal said, “Our order book continues to grow against the backdrop of orders secured across all our business verticals.”

Mercedes Benz India sales grew 43% in 2021 to over 11,000 units despite semiconductor shortage

Source: Economic Times, 12 January 2022

Mercedes Benz India reported a 43% growth in sales in 2021 as demand recovered after a particularly bad year in sales in 2020 due to the pandemic. Sales could’ve been higher if not for the semiconductor shortage, the company said.

The German carmaker sold 11,242 cars in India last year compared to 7,893 units sold a year prior. Sales, however, are significantly lower than the peak sales of 15,538 cars sold in 2018. With this, the Stuttgart-based company firmly remains the largest-selling luxury car maker in India for the seventh consecutive year.

The company is sitting on an estimated order book worth Rs 1,500 crore as more than 3,000 customers are waiting for their new Mercedes. A global shortage of semiconductors meant that automakers across the board are struggling to make enough cars to meet the demand in the market.

Last week, German rivals BMW and Audi reported 34% and 101% growth in their India sales in 2021. The former sold 8,876 cars in the country, including 640 units under its Mini brand. Audi doubled its sales to 3,293 units in 2021 after a particularly bad year in sales in 2020.

In a year of sport utility vehicles (SUVs), where more customers across price points preferred the high-seating body style, Mercedes Benz reported the long wheelbase E-Class limousine to be its best-selling car. To build on the success of the limousine, the company will be bringing the S-Class Maybach as well as the electric EQS to India in 2022.

“2022 will be another milestone year as we aim to lead the luxury EV segment by expanding our EV portfolio with the debut of the first-ever all-electric luxury sedan from Mercedes-Benz, the EQS,” Martin Schwenk, Managing Director & CEO, Mercedes-Benz India said in a press statement.

In an interview to ET on Wednesday, Schwenk said that he was confident to better the sales performance of 2021 this year with 10 new product launches, the situation remained uncertain due to the parts shortage and the fear of a resurgent Covid-19 pandemic.

The supply chain challenges will continue to prevail for at least the next six months, he said, adding that if not for these challenges, the market demand was good to deliver pre-Covid level of sales.

Azure Power commissions 600 MW solar project in Rajasthan

Source: Economic Times, 03 January 2022

Azure Power on Monday said it has commissioned a 600 MW solar power project in Bikaner. According to a statement, the power generated from the project, located in Rajasthan, will be supplied to SECI at a tariff of Rs 2.53 per kWh for 25 years.

This is the largest solar power project in India, owned and operated at a single location by any developer, it claimed.

“Azure Power announced the successful commissioning of its largest project- 600 MWs Interstate Transmission System (ISTS) connected solar project, allocated by Solar Energy Corporation of India (SECI),” the statement said.

The company has commissioned the project in phases and now, it has 2,510 MW of high-performing operational solar assets across the country.

“It is an incredible way to start the new year. Since this project was initiated around the onset of COVID-19 in India, we faced several challenges amid lockdowns and safety concerns,” Ranjit Gupta, MD and CEO of Azure Power, said.

Despite the challenges and while prioritising the health and safety of all employees and communities, the company managed to deliver high performing assets, Gupta added.