Issue No 193, 30 June 2016

BILATERAL

Minister KT Rama Rao of Telangana State visits Singa- pore

2nd International Day of Yoga in Singapore

TOP NEWS

Big reforms: Government introduces 100% FDI in defence, civil A delegation led by Mr KT aviation Rama Rao, Hon’ble Minister TNN | Jun 20, 2016, 02.47 PM IST for Industries, Commerce, Mining, NRI affairs, IT and The government on Monday announced fresh liberalisation of FDI rules throwing open food Urban Development, Gov- retail, airlines and private security firms to higher overseas investment. ernment of Telangana () Other sectors in which FDI norms have been relaxed include e-commerce in food products, and Mr Arvind Kumar, Prin- broadcasting carriage services, private security agencies and animal husbandry. cipal Secretary, Industries It also tweaked rules to allow companies such as Apple to open their own stores in the country visited Singapore on 29th by exempting them from local sourcing requirements for three years under the single brand June, 2016. retail segment for entities with cutting edge technology. The delegation visited Surba- "Now most of the sectors would be under automatic approval route, except a small negative na Jurong office and had dis- list. With these changes, India is now the most open economy in the world for FDI," said an cussions with CEO of Surba- official statement. na Jurong Mr Teo Eng The decision to further liberalise FDI regime with the objective of "providing major impetus Cheong. The delegation also to employment and job creation in India" was taken at a meeting chaired by Prime Minister visited Agency for Science, today. Although the finance ministry had kicked off .. Cont on P. 2 Technology and Research (A -Star) company. Indian economy stands out among emerging market, says FSR A CEO’s meet was organised at the High Commission. Wed, 29 Jun 2016-08:05am , Mumbai , dna During the meeting Hon’ble Minister briefed the audience Despite global recovery being fragile, the Indian economy stands out among the about steps taken by the Tel- emerging markets as a destination of growth and for investment, indicates the Reserve angana Government to attract Bank of India's (RBI) financial stability report. The report also says that the govern- the investors and welcomed ment's commitment to continue on the path of fiscal discipline, the efforts on contain- the companies to invest in ing the revenue deficit and rationalising subsidies need to be reinforced. It also cau- Telangana. tions that the risk of commodity price reversals should be monitored like the recent climbing of oil prices from $30 a barrel to $50, though the external sector indicates a strong position with forex reserves at a record high of $363.83 billion and a lower trade deficit, helped in part by the lower crude oil prices. With the increasing impact of prevailing uncertainties and dynamics in the rest of the world on India, continuing on the path of sound domestic policies and structural reforms becomes even more im- portant. .. Cont on P. 7

HIGH COMMISSION OF INDIA, SINGAPORE 1 INDIA FOCUS Issue No 193, 30 June 2016

ECONOMY ing its infrastructure sector such as ports, airports and highways to boost growth. A strong inflow of foreign investments will help improve the coun- discussions on easing FDI rules a few weeks ago, try's balance of payments situation and strengthen the decision was rushed through. the rupee value against other global currencies, This is the second major reform in the FDI space. especially the US dollar. The Centre in last November had significantly relaxed the foreign investment regime. India jumps 19 places in global logistics Key changes include allowing 100% FDI under performance ranking government approval route for trading, including through e-commerce, in respect of food products PTI | Washington June 28, 2016 Last Updated at 18:57 IST manufactured or produced in India and permitting up to 100 per cent FDI in defence sector. The oth- India has jumped 19 places in the latest World er sectors that have benefitted include the broad- Bank ranking in the global logistics performance, casting, pharmaceuticals, civil aviation, single reflecting the improvement in movement of brand retail among others. goods inside the country thus facilitating better The PM chose to ignore protests from food pro- trade. cessing ministry on mandating sourcing norms The World Bank in its latest once-in-two-year for food retailers in a segment where 100% FDI Logistics Performance Index (LPI) said India is has been permitted without riders. now ranked 35th as against the 54th spot it occu- pied in the previous 2014 report. The message was quite clear that India is open for business and the government will soon put in Logistics organises the movement of goods place a small negative list of sectors that require through a network of activities and services oper- approval before investment by foreign players, ating at global, regional, and local scale. DIPP secretary Ramesh Abhishek said. In the 2014 report, India had a LPI score of 3.08, In case of airlines, however, the government has which increased to 3.42 in 2016. For the third chosen to restrict overseas carriers from holding time, Germany with 4.23 points tops the ranking, beyond 49% while allowing 100% FDI. followed by Luxembourg (4.22), Sweden (4.20), In case of private security agencies the govern- Netherlands (4.19) and Singapore(4.14). ment has increased the cap to 74% from 49% but Other countries in top 10 are Belgium, Austria, companies need to approval and follow the pre- United Kingdom, Hong Kong and the United scribed norms for the sector. States.Japan is ranked 11. In a statement, DIPP also said that 74% FDI un- der automatic route would be allowed in brown- China has jumped one spot to be ranked 27th field pharma ventures instead of 49% earlier. while Pakistan is at 68th. Syria ranked lowest. "Logistics performance both in international trade Here's a look at the changes in FDI: and domestically is central to countries' economic growth and competitiveness," said Anabel Gon- * Upto 100% FDI in defence sector zalez, Senior Director for the World Bank * Upto 74% FDI in brownfield pharmaceuticals Group's Trade & Competitiveness Global Prac- under automatic route tice. * 100% FDI in brownfield airport projects under "Efficient logistics connects people and firms to automatic route markets and opportunities, and helps achieve * 100% FDI in civil aviation higher levels of productivity and welfare. Unfor- * FDI upto 49% in civil aviation under automatic tunately, the logistics performance gap between route, beyond 49% through govt approval rich and poor countries continues and the conver- * Local sourcing norms for FDI in single brand gence trend experienced between 2007 and 2014 has reversed for the least performing countries," retail for products having "state of art" and "cutting edge" technologies Gonzalez said. * 100% FDI under automatic route for cable net- The bi-annual report, 'Connecting to Compete works, DTH and mobile tv 2016: Trade Logistics in the Global Economy', which ranks 160 countries on their trade logistics Foreign investment is considered crucial for In- performance, is based on survey data from more dia, which needs around $1 trillion for overhaul- than 1,200 logistics professionals.

HIGH COMMISSION OF INDIA, SINGAPORE 2 INDIA FOCUS Issue No 193, 30 June 2016 India's March quarter CAD narrows to ing, defence, retail and newsbroadcasting, and 0.1% of GDP eased the process for approvals. It had also raised Foreign Investment Promotion Board (FIPB)'s Abhijit Lele & PTI | Mumbai June 17, 2016 , 00:32 IST power to clear FDI proposals to up to Rs 5,000 crore, from Rs 3,000 crore earlier. India's current account deficit (CAD) declined sharply to $0.3 billion or 0.1 per cent of its gross domestic product (GDP) in the fourth quarter ended March for financial year 2015-16, against $7.1 billion (1.3 per cent of GDP), in the third quarter ended December 2015, on account of a lower trade gap. The CAD was $0.7 billion (0.1 per cent of the GDP) in the quarter ended March 2015 for FY15. For the entire FY16, CAD stood at $22.1 billion (1.1 per cent of the GDP) against $26.8 billion (1.8 per cent of GDP) for FY15, according to Re- serve Bank of India data. Stating that CAD at 1.1 per cent of GDP was a "robust macro economic indicator", Economic Affairs Secretary Shakti- kanta Das said efforts would continue on reforms. Aditi Nayar, senior economist, ICRA, said the CAD for FY16 was broadly in line with expecta- tions. A fall in the services trade surplus and low- er remittances eroded a significant portion of the savings arising from the narrowing of the mer- chandise trade deficit. The trade deficit in the fourth quarter of FY16 stood at $24.8 billion, compared with $31.6 bil- lion in Q4 of FY15. The deficit was $130.1 bil- lion for FY16, while for FY15 it stood at $144.9 billion. The balance of payments (BoP) stayed in positive territory with accretion of $3.3 billion to India's foreign exchange reserves in Q4 of FY16. The Currently, 98 per cent of FDI comes into India overall BoP during FY16 moderated to $17.9 bil- through the automatic route, and the rest lion from $61.06 billion in 2014-15. During the throughFIPB approval. ICRA said the CAD wid- financial year, there was a decline in net invisible en modestly from $22 billion in FY16 to $25-30 receipts, reflecting moderation in both net ser- billion in FY17, nevertheless remaining contained vices earnings and private transfer receipts. at 1.2-1.3 per cent of GDP. A sustained rise in Net foreign direct investment (FDI) inflows dur- commodity prices, particularly crude oil would ing the FY16 stood at $36 billion, by 15.3 per boost the import bill while simultaneously coun- cent over in FY15, RBI said. Portfolio invest- teracting the risk posed by lower remittances, ment, however, recorded a net outflow of $4.5 particularly from West Asia, the rating agency billion during FY16, against a net inflow of $40.9 said. billion in FY15. FDI inflows in the current financial year would India to contribute 4.9% of world GDP top the 15.3 per cent rise in FY16, on the back of by middle of next decade: HSBC reforms and liberalisation of FDI norms, Das said. "Net FDI inflow rose by 15.3 per cent in Source: The Economic Times 2015-16 over the previous year. Should be more this year due to full-year impact of FDI liberalisa- India may struggle to achieve the pace of tion in November 2015," he tweeted. economic growth rates that China achieved In November, the government had relaxed FDI during the peak of its past boom, but that rules in 15 sectors, including civil aviation, bank-

HIGH COMMISSION OF INDIA, SINGAPORE 3 INDIA FOCUS Issue No 193, 30 June 2016 doesn't mean investors ignore India. Given the Gajapathi Raju said. fact that the demography is in its favour, and will Until now, they were required to complete five account for the same world share as China did in years of domestic service and have at least 20 2005, the year when the Mainland really started planes in operation before being permitted to fly to make itself felt globally, says HSBC. India is overseas. The government scrapped the time re- expected to equal China's 4.9% share of world quirement but carriers must still reach the same GDP in 2005 by the middle of next decade and if criterion for planes or deploy 20% of their fleet the country grows faster, the date can be ad- on domestic routes. vanced. For example, if India continues to grow Newer carriers such AirAsia India Pvt.—the local at around 7%, it would have the same global joint venture of Malaysia-based AirAsia Bhd.— punch as China about a decade ago only in 2029. and Vistara—the Indian airline venture of Singa- Faster growth, of course, would bring the date pore Airlines Ltd., have been pushing for a relax- forward. India's economy grew a stronger-than- ation of the rules. expected 7.9% in the March quarter, making it The new National Civil Aviation Policy was wel- the fastest growing major economy. HSBC said comed by Amar Abrol, CEO of AirAsia India, that if India grows at 8% rate, it would achieve which started operating in India in June 2014. the 4.9% share by 2027. A pulling back factor “The NCAP gives us clear direction to ramp up may be the country's slower investment, which our operations in India and grow our business in has always been lower than that of China's. the domestic segment before we scale our opera- HSBC said that India would have to boost its in- tions to fly international,” he said in a statement. vestment rate by 10% or so of GDP, to achieve Both AirAsia and Vistara will need to increase China's growth rate of the last decade. "A tall or- their fleets significantly to qualify for starting der - though, mind you, not impossible," SBC international flights. AirAsia now has six planes Economist Frederic Neumann said in the report. and Vistara has 11. He added that it looked tough for India to pick up India—the world’s fastest-growing major econo- steam and match China's boom-time growth rates my—has been forecast by the International Air in the coming years. He ranks India as the obvi- Transport Association, or IATA, to become the ous candidate for pushing global growth since third-largest aviation market in the world by West is not bouncing back to its lost glory any- 2026. time soon. "After all, it's the only other country The policy will provide competition to existing with over a billion people and its economy, ac- international players such as Jet Airways (India) cording to official data, has increased a tad faster Ltd., Air India Ltd., InterGlobe Aviation Ltd. and than China's of late," ," the economist said. How- SpiceJet Ltd. It will also allow India to better use ever, India's economy isn't currently large enough aircraft-seat quotas available to carriers through to make up for China's slowdown. "Still, don't bilateral air-services agreements count the country out just yet: assuming things with countries in the Middle East, Germany, the keep ticking as long as they have, by the middle U.K. and Thailand. of the next decade India's economy will account New airlines will start operations in India as a for the same world share as China did in 2005, result of the policy change, said Dhiraj Mathur, the year when the mainland really started to make an aerospace and defense analyst at Pricewater- itself felt globally," he said. houseCoopers India. “This will not only augment supply and increase India Makes It Easier for Domestic Air- investment in the sector in India but will also cre- lines to Fly Overseas ate more choice for our consumers,” said Mr. Ma- thur. http://www.wsj.com/articles/india-makes-it-easier-for- Prime Minister Narendra Modi’s government is domestic-airlines-to-fly-overseas-1466001838 trying to boost air travel by encouraging airlines to offer affordable fares and launch air services to India’s federal government on Wednesday re- smaller towns and cities. “Welcome to the world laxed the criteria for domestic airlines to fly over- of cheap, affordable flying,” said Civil Aviation seas as part of a new civil-aviation policy aimed Secretary Rajiv Nayan Choubey as he also an- at driving growth in the sector. nounced a proposal to cap fares on flights con- Local carriers will no longer be restricted by the necting to smaller airports at about 2,500 rupees number of years they have operated domestically ($37).Mr. Choubey said Indian carriers to fly abroad, Civil Aviation Minister Ashok

HIGH COMMISSION OF INDIA, SINGAPORE 4 INDIA FOCUS Issue No 193, 30 June 2016 ferried 80 million passengers on domestic routes lands and Luxembourg, it said. in the fiscal year ended March 31, a growth of India’s entry into MTCR comes days after it 22%. The figure is expected to jump almost four failed to get NSG membership due to stiff opposi- times to 300 million domestic passengers in five tion from China and a few other countries. years, he said. Significantly, China, which stonewalled India’s Flights connecting to smaller airports will be entry into the 48-nation Nuclear Suppliers Group capped for one hour of flight travel, Mr. Choubey (NSG) at the just-concluded Seoul plenary, is not said. Airlines operating such flights will be of- a member of MTCR. fered incentives such as lower taxes on jet fuel Since its civil nuclear deal with the US, India has and negligible airport charges to make the flights been trying to get into export control regimes like financially viable, he added. NSG, MTCR, the Australia Group and the Was- The government also plans to develop some of senaar Arrangement that regulate the convention- India’s 350 unused airstrips and airports to ex- al, nuclear, biological and chemicals weapons and pand regional air connectivity, Mr. Choubey said. technologies. He said centers for aircraft maintenance, repair MTCR membership will now enable India to buy and overhaul will receive incentives to support high-end missile technology and also enhance its their expansion and help Indian carriers that now joint ventures with Russia. send their planes overseas for maintenance. The aim of the MTCR is to restrict the prolifera- The government also announced plans to make it tion of missiles, complete rocket systems, un- easier to operate helicopters to expand the “very manned air vehicles and related technology for low” fleet in the country. those systems capable of carrying a 500 kilo- gramme payload for at least 300 kilometres, as India joins Missile Technology Control well as systems intended for the delivery of Regime as a full member weapons of mass destruction (WMD).

PTI, New Delhi Interlinking of highways on anvil Source: Business Standard India on Monday joined the Missile Technology Control Regime (MTCR) as a full member and In an ambitious plan, the government has pre- said its entry would be mutually beneficial to en- pared a roadmap to connect some of the major hance global non-proliferation norms. national highways in the country. The proposal Marking India’s first entry into any multilateral aims at inter-linking the highways from North to export control regime, foreign secretary S South and East to West in the pattern of a grid, Jaishankar signed the instrument of accession to allowing smooth and uninterrupted access from MTCR in the presence of France’s Ambassador- one region to another. According to an official, designate Alexandre Ziegler, The Netherlands’ grid formation or connecting the national high- Ambassador Alphonsus Stoelinga and Luxem- ways in the form of a grid is one of the basic bourg’s Chargé d’Affaires Laure Huberty. practices of highway planning. As per the current “India has joined the MTCR this morn- proposal the distance connecting the two high- ing...India’s entry into the regime as its thirty- ways would be reduced from 70-80 km earlier. fifth member would be mutually beneficial in the Jaideep Ghosh, partner, KPMG India, said when- furtherance of international non-proliferation ob- ever the proposal fructifies it would give a fillip jectives,” external affairs ministry said in a state- to the overall economy by providing better con- ment. nectivity. Even today about 65% of the cargo “India would like to thank each of the thirty-four moves by roads. The National Highways Authori- MTCR Partners for their support for India’s ty of India has prepared a grid of 27 vertical and membership. We would also like to thank Am- horizontal highways for connection. Currently, bassador Pieter de Klerk of The Netherlands and India’s total road network is about 33 lakh km, of Mr Robert Steinmetz of Luxembourg, co-Chairs which national highways constitute over 96,000 of the MTCR,” the statement said. km and state highways about 1.32 lakh km. The The MTCR Point of Contact in Paris has con- government plans to construct 70,000 km of new veyed the decision regarding India’s accession to highways connecting the coastal and border areas the regime through the French Embassy in New under its ambitious project. Initially, Delhi as well as the Embassies of The Nether- about Rs 50,000 crore would be spent on the con- struction of highways under this project.

HIGH COMMISSION OF INDIA, SINGAPORE 5 INDIA FOCUS Issue No 193, 30 June 2016 Contracts for construction of highways under route," the FM said. Bharatmala have been awarded in the states of "The government has clearly demonstrated its Gujarat, Rajasthan, Punjab and Bihar. Minister of intention that the reform process will go on. The Road Transport and Highways Nitin Gadkari at Indian economy will continue to be on the up- the time of taking charge in May 2014 had said ward path over the next few years," Jaitely said. that ironing out hurdles in the road sector would Prime Minister Narendra Modi said the FDI re- top his agenda. In January this year, Gadkari had forms will help create jobs and benefit the overall said the government was hopeful of completing economy. road projects worth Rs 7 lakh crore by the year "Today's FDI reforms will give a boost to em- 2019. The minister is aiming to increase the pace ployment, job creation & benefit the economy," of road construction in the country to 100-km per Modi said on micro blogging site Twitter. He said day over the next two years from the current 30- the amendments in FDI policy has been done to km per day. promote ease of doing business. "India now the most open economy in the world for FDI; most Most foreign investment will not need sectors under automatic approval route," Modi prior nod: FM Arun Jaitley said. Jaitley said the idea behind the liberalisation was Economic Times: June 21, 2016 to move to a simpler regime. "It has got reduced and only in very few cases which are now on the

New Delhi: The liberalisation of the foreign di- kind of a negative list is the FIPB required," he rect investment regime signals the NDA govern- said when asked whether the FIPB will be phased ment's commitment to economic reforms and will out eventually or not. help in boosting growth in the years to come and "Where permission from other agencies is re- significantly reduce the role of the foreign invest- quired, whether it is the ministry of defence or the ment promotion board, finance minister Arun ministry of I&B or the home affairs, in that case Jaitley said on Monday. we can allow FDI to come in through the auto- "The government is committed to carry on the matic route because it still has to go through an- reforms process. Today's FDI reform is one im- other governmental permission," said Jaitley. portant step in that direction," Jaitley told TOI in an interaction soon after the government unveiled ‘India’s FDI inflows may cross $60 bil- the reform measures. lion this year’

"After this reform, an overwhelming amount of PTI | New Delhi | Published:June 21, 2016 7:19 pm FDI will come into the country through the auto- matic route. Only in a few cases which are now India’s foreign direct investment is likely to cross on the negative (list) will the FIPB be required," USD 60 billion this year on favourable policy said the FM. environment even as the FDI flows globally are The steps were announced two days after Reserve set to witness a decline, says a UN economist. Bank of India (RBI) governor Raghuram Rajan “India witnessed a rise of about 28 per cent in said he would not opt for a second term at the FDI to USD 44.20 billion in 2015. We expect central bank and experts said they helped boost FDI to cross USD 60 billion in 2016,” said sentiment. The government said Monday's meet- Nagesh Kumar, Economist & Head, UNESCAP’s ing convened by PM Narendra Modi was pre- South and South-West Asia Office, at the release scheduled. of an UNCTAD report. The NDA government has accelerated the pace of In India, the report said, the large increase of an- reforms in the past few months and has secured nounced greenfield investments in manufacturing the passage of key bills such as the Insolvency industries may provide further impetus to FDI and Bankruptcy code. The objective is to make this year. India an attractive destination and significantly New liberalisation steps by the government con- improve the ease of doing business in the coun- tributed to attracting FDI in all quarters last year, try. which made India the fourth largest recipient in "The criteria we have followed is that in all such developing Asia and the 10th in the world, it said. sectors where a ministerial permission, or a li- Top sources of equity investment in India were cence from another governmental authority is Singapore, Mauritius, the US, the Netherlands, required, FDI can be placed on the automatic Japan, Germany, the UK, China, Hong Kong

HIGH COMMISSION OF INDIA, SINGAPORE 6 INDIA FOCUS Issue No 193, 30 June 2016 and the . dies, there is a need to increase the tax revenues Singapore and Mauritius alone accounted for by increasing the tax base. nearly 60 per cent of total FDI last year, it said, Regarding the expectations of monsoon-driven adding that India is also maintaining FDI inflows recovery, its says that the prediction of a normal from developed country sources, especially Eu- monsoon augurs well for 2016-17. The agricul- rope and the US. ture sector needs radical reforms to address food The outward FDI from India – the dominant in- prices and while stress in the corporate sector vestor in the sub-region – dropped by more than showed some signs of moderation in 2015-16, the one-third to USD 7.5 billion, which resulted in an risks of lower demand and weaker debt servicing overall 36 per cent decline of outflows from capacity continue. South Asia. On the global front, the FSR says, "The global “The decline in commodity prices and problems recovery remains fragile amidst weak and uneven of over capacity in industries such as steel have growth, a slowdown in world trade and prevailing negatively affected some of the largest Indian uncertainties in financial and commodities mar- conglomerates’ motivation and ability to invest kets. At the same time, unintended side effects of abroad,” the report said. current ultra-easy monetary policies being pur- For the Asian region, the United Nations Confer- sued in many advanced economies are becoming ence on Trade and Development (UNCTAD) re- evident, even as their effectiveness in stimulating port forecast a decline in FDI flows by about 15 growth is yet to be firmly established." per cent in 2016. It adds that the easy monetary policies without an “Hindered by the current global and regional eco- exit strategy and how long these policies would nomic slowdown, FDI inflows to developing Asia be prolonged is causing concerns, referring to the are expected to decline in 2016 by about 15 per quantitative easing by the Federal Reserve of US cent, reverting to their 2014 level,” it said. and also the European Central Bank. “However, FDI flows to some Asian economies such as China, India, Myanmar and Vietnam are BANKS likely to see a moderate increase in 2016,” said the report.

The overall global FDI in 2016 is also expected to decline by 10-15 per cent due to weak econom- RBI releases framework on pay- ic prospects. ments systems

The report said: “The expected decline of FDI Press Trust of India | Mumbai June 23, 2016 flows in 2016 reflects the fragility of the global economy, persistent, weakness of aggregate de- Reserve Bank of India (RBI) on Thursday re- mand, effective policy measures to curb tax in- leased its framework for Payment and Settlement version deals and slump in multi national enter- Systems in India, with a view to moving towards prises.” It sees world economy continuing to face a cashless society and ensuring access of mo- major headwinds. However, FDI flows may re- bile banking services to even basic phone users. sume in 2017. “Over the medium term, FDI flows "The Vision-2018 reiterates commitment are projected to resume growth at 5-10 per cent in of RBI to encourage greater use of electronic pay- 2017 and surpass USD 1.8 trillion in 2018, re- ments by all sections of society to achieve a less- flecting the projected increase in global growth.” cash society," RBI said. Global GDP is expected to expand by only 2.4 "The policy efforts will also focus on ensuring per cent, the same relatively low rate as in 2015, that access to mobile banking services is seam- it added. lessly provided to large number of users of non- smartphone handsets in multiple languages," it Indian economy stands out among said. emerging market, says FSR .. Cont from Leveraging on 5Cs — Coverage, Convenience, P. 1 Confidence, Convergence, Cost — Vision-2018 focuses on responsive regulation, robust infra- FSR also warns that "there may not be any room structure, effective supervision and customer cen- for complacency in the current global scenario." tricity, it said. It also says that despite the efforts being made to "Building a robust payments infrastructure in the contain the revenue deficit and rationalise subsi- country to increase the accessibility, availability,

HIGH COMMISSION OF INDIA, SINGAPORE 7 INDIA FOCUS Issue No 193, 30 June 2016 interoperability and security of the payment sys- Therefore, there is enough reasons to believe that tems will continue to remain a key objective", we can grow our bank between 27% and 30% per RBI said in a release. annum in the next four years," Kapoor said. RBI said proposed new policies to be framed un- The $1 billion additional capital "will give us a der the Vision with focus on electronic payments fantastic momentum and it will allow us to grow will influence trends in payment systems in the 30-plus percent for the next three to four years country. comfortably," he said. "The high mobile density in the country is being Kapoor is "very confident" of business prospects increasingly leveraged to offer payment services in India, by a wide range of payment service providers so saying the economy was in good shape with im- as to enable an on the-go, faster payment experi- provements in "ease of doing business" and the ence to the customers," it said. growing investors' confidence. Service providers will be encouraged to use tech- "Our model is substantially domestic. We are a nology to provide innovative easy to use mobile classic home country bank. The demographics of based payment solutions in an interoperable envi- India and the outlay of India allow us to build a ronment without compromising on security, RBI very comprehensive Indian model," he said. said. YES Bank aspires to expand into growing Asian RBI expects the Vision to result in a continued economies. decrease in the share of paper-based clearing in- Once RBI approves its application, YES Bank struments and growth in individual segments of aims to get a full banking licence in Singapore. retail electronic payment systems — NEFT, Kapoor described Singapore as YES Bank's IMPS, card transactions, mobile banking. springboard for expansion into the Asian markets, As well as increase in registered customer base especially focusing on Indian and global Indian for mobile banking, significant growth in ac- businesses. ceptance infrastructure, and accelerated use of YES Bank can also benefit from the Comprehen- in payment systems. sive Economic Cooperation Agreement's banking business exchange between India and Singapore. YES Bank plans to raise $1 billion Meanwhile, expansion within India could also from international markets include acquisition of some local banks. "In case there are attractive opportunities to buy Tue, 21 Jun 2016-03:44pm , Singapore , PTI portfolios, naturally we will be receptive," said Kapoor. With plans to raise $1 billion (nearly Rs 6,652.75 There are a wide range of new opportunities de- crore) from international markets, private sector veloping in India such as the approval of Real lender YES Bank is looking to setup an interna- Estate Investment Trust for the infrastructure and tional branch here as a springboard to tap the real estate sectors. Asian markets, its founder has said. "India is going through a process of product evo- YES Bank has become the first Indian bank to lution driven by improving reform processes," receive government approval for a fully fungible Kapoor added. composite foreign investment limit of 74%. Its Board of Directors have approved to raise an ad- MARKETS ditional $1 billion of Equity Capital following the

$500 million raised in May 2014. "We are quite hopeful that in the $1 billion (being raised), at least 75% to 80% of the funds will be Sebi proposes easier norms for from offshore," YES Bank founder and Chief REITs, relocation of foreign fund Executive Officer Rana Kapoor told PTI. managers India's cash-rich insurance companies, mutual funds, pension funds, gratuity funds, provident Livemint: June 20, 2016 funds among others are expected to account for 20-25% of the rest equity capital being raised, he Mumbai: The Securities and Exchange Board of said. India (Sebi) on Friday proposed easier norms for 70% of the $500 million raised in two years came real estate investment trusts (REITs) to attract the from local investors and 30% from overseas. interest of developers, and relaxed the rules for "We are seeing growth across all our business. foreign fund managers to relocate to India.

HIGH COMMISSION OF INDIA, SINGAPORE 8 INDIA FOCUS Issue No 193, 30 June 2016 Sebi will allow REITs to invest a larger corpus in investment in power projects, but has seen very under-construction assets. The current regulations few foreign players setting up projects here but cap investment of REITs’ assets in under- CLP, through its arm CLP India, has been an ear- construction projects at 10%, which will be raised ly entrant and the largest foreign investor in pow- to 20%. er sector. Sebi also proposed to raise the number of REIT The sector has been plagued with several issues sponsors, which is now capped at three. Addition- and CLP had changed its strategy and is now go- al relaxation is also proposed on clearing related- ing slow on conventional energy projects. But the party transactions and the number of shareholders company says that things are changing and so is needed to pass a resolution. its strategy for the country. “By and large, Sebi’s decision will have a posi- "Given the global commitment to cleaner energy, tive impact in making REIT a viable product for it is obvious that at some point in future a compa- investors and a fund-raising instrument for real ny like CLP will be making only clean invest- estate players. However, the intent to allow REIT ments. That's the direction, but for now, we to invest more in under-construction assets may thought we'd probably invest 50:50 in conven- dilute the idea of a REIT. Globally, REIT is com- tional and renewables. For this, our strategy was posed of only stable assets. Allowing more in- identification of the primary growth market and vestments in incomplete projects may improve the choice was China and India," said Rajiv return on investment but on the flip-side it will Mishra, managing director, CLP India. also increase risks,” said Bhairav Dalal, a partner Mishra said that the global commitment towards at PricewaterhouseCoopers. reducing the carbon emission makes for a case for In a note, the market watchdog said fund manag- renewable energy, but for a country like India, ers based overseas who are willing to relocate to given the affordability and availability of coal, India can register under Sebi portfolio manage- conventional energy would continue to play an ment regulations, 1993, as eligible fund manag- important role. ers. "We have the door open for some conventional The regulatory requirements for eligible fund investments in India. We haven't yet written it off managers will be diluted and such fund managers because of the needs of the country but a greater would not need to comply with the minimum proportion of investments in generation will be in ticket size requirement, which is set at clean energy than what we envisaged earlier," Rs.25,00,000 for domestic portfolio managers. Mishra said. The overseas fund managers would not be re- "Anyway, there is not much happening in con- quired to act in a fiduciary capacity and audit the ventional energy in terms of new projects given overseas fund. the fact that there are over 20,000 mw of coal Sebi will come out with a discussion paper before fired generation which is built but does not have a finalizing the proposed norms. PPA. It is not likely to happen for the next two years." BUSINESS The company aims to add 250-300 MW of re- newable energy capacity every year, through or- ganic as well as inorganic route, to benefit from

the government's push for the sector. India a key growth market with fo- CLP entered the Indian power sector in 2002 with cus on renewables: Rajiv Mishra, the acquisition of a 655 MW gas fired power MD, CLP India plant in Gujarat, and grew its wind energy busi- ness in the country to be the largest independent Economic Times: June 23, 2016 producer. However, it has stayed on the sidelines when bid- Mumbai: Hong Kong-headquartered utility CLP ding for government's flagship solar power pro- has identified India as a primary growth market grammes as tariff slipped below Rs 5 a unit. besides the home country and is on the lookout But the company made its debut in solar power in for organic as well as inorganic growth opportu- the country by acquiring a stake in Suzlon Ener- nities in the country, Rajiv Mishra, managing di- gy's 100 MW project in Telangana and is scout- rector, CLP India, told ET in an exclusive inter- ing for more opportunities. view. India allows 100 per cent foreign direct "We have got a gigawatt of wind assets in India

HIGH COMMISSION OF INDIA, SINGAPORE 9 INDIA FOCUS Issue No 193, 30 June 2016 and it will be very nice to have a balanced portfo- innovation hub, working in tandem with the yet- lio where we have a gigawatt of solar," Mishra to-to-open lab in Singapore. said. In April this year, the bank had announced to set It plans to beef up its solar power portfolio up a technology centre out of Hyderabad, while through greenfield projects, acquisitions and tie- launching India's first mobile-only bank with its ups with big corporate houses to help them fulfill offering Digibank. their renewable power purchase obligation. In addition to the technology centre, the company India has an ambitious target of 100,000 MW of now plans to set up an innovation lab, also in Hy- grid connected solar power by the year 2022, derabad, to explore new applications based on which has generated a lot of interest in Indian as emerging technologies such as augmented reality, well as foreign players. big data analytics, Internet of Things, artificial intelligence (AI) and machine learning among India's analytics industry expected others, the «Business Standard» reports. to grow eight-fold to US$ 16 billion According to Paul Cobban, chief operating of- by 2025: Nasscom ficer, group technology and operations at DBS Bank, the bank is looking to hire about 2,000 en- gineers over the next 18 months who would be IBEF: June 24, 2016 located in India and work in tandem with a yet-to

-open innovation lab in Singapore. Hyderabad: India's analytics industry is ex-

pected to grow eight-fold to touch US$ 16 billion AP chooses Ascendas-Singbridge, by 2025 from the current US$ 2 billion, as per the Sembcorp as capital's developers National Association of Software and Services Companies (Nasscom). Currently, India is among TNN | Jun 25, 2016, 10.49 AM IST the top ten destinations for analytics and Nasscom expects India to be among the top three Vijayawada: As expected, two Singapore-based in the world by 2025 having 32 per cent share in construction companies namely Ascendas- the global market. Nasscom partners with its Singbridge Private Limited and Sembcorp Design members to build a multi-pronged approach that and Construction have emerged as master devel- encompasses skill development, thought leader- opers of the new capital of Andhra Pradesh. The ship , products and platforms to realize this vi- cabinet meeting here on Friday decided to invite sion. There are over 600 analytical firms in India, bidders from across the globe to challenge the of which approximately 400 are start-ups, which Singapore consortium through the Swiss Chal- are positioning the country as an emerging hub lenge method in a span of 45 days after the rele- vant notification is issued. for analytics solutions for industries across the "If we will find no one to compete with the Sin- globe, stated Mr K S Viswanathan, Vice Presi- gapore firms within the specified deadline, a joint dent, Nasscom during the fourth edition of its venture will be floated with the state-owned Am- 'Big Data and Analytics Summit 2016'. There are aravati Development Partner (ADP) and the Sin- currently 90,000 analytics professionals in India gapore companies which could be named as Con- working across HR, marketing, risk & security, sortium of Amaravati Development Partners to healthcare and other sectors. Indian analytics oversee the capital construction," chief minister N market is expected to continue growing at 26 per Chandrababu Naidu said at a media briefing on cent compounded annual growth rate (CAGR) Friday. The ADP would hold 42 per cent equity which will enable India soon emerge as a big data in the joint venture, he added. and analytics hub of the world. Singapore Airlines’ India unit to DBS to Start Innovation Lab in In- challenge Gulf Carriers’ dominance dia TODAY ONLINE, PUBLISHED: 8:55 AM, JUNE 28, 2016

http://www.finews.asia/finance/22508-dbs-bank-to-start

-innovation-lab-in-india Within weeks of India easing aviation rules, Sin-

gapore Airlines’ local venture is charting a course DBS Bank is looking to use India as a technology to take on carriers Cont on P. 12

HIGH COMMISSION OF INDIA, SINGAPORE 10 INDIA FOCUS Issue No 193, 30 June 2016 Indian pharmaceutical exports to cross $20 billion by 2020: Study

IANS | Jun 16, 2016, 08.42 PM IST

New Delhi, June 16 (IANS) Indian pharmaceutical exports are likely to cross $20 billion by 2020 from $14 billion in 2016, by registering a compounded annual growth rate (CAGR) of eight per cent, said an Assocham- TechSci research joint study on Thursday. However, delay in regulatory approvals in US, Russia, Africa and others may cut down export growth to almost half - from a 15 per cent CAGR growth level clocked in 2010-2014 to eight per cent during 2015-2020, said the study "IPR in pharmaceuticals: Balancing, innovation and access".

"Consolidation of pharmacy players is leading to an increase in pricing pressures for generic compa- nies existing in the US market which is expected to result in decline in year-on-year growth of phar- maceutical exports from India over next five years," it said. In the US, Indian pharmaceutical exports rose from $3.4 billion in 2013 to $3.7 billion in 2014 on account of increasing demand for high quality generic drugs in the market.

However, growth rate for exports of pharmaceutical products from India to the US is declining, due to increasing US Food and Drug Administration (USFDA) scrutiny on the quality of pharma prod- ucts coming from drug manufacturing plants located in India," said the study. Complying with USFDA regulations is the only way out for Indian companies to bolster pharma ex- ports to US, it noted. Steep currency decline in emerging markets like Africa, Russia, Ukraine andVenezuela are also ex- pected to add woes to drug manufacturers as low-priced currency will hit margins. About Russia, the study said the prevailing exchange rate crisis in the country is affecting Indian ex- ports while many Indian companies supply drugs to Russia through Pharmaceutical Benefits Program (PBP) and hospital tenders where prices are regulated by the state. Meanwhile port delays and prolonged customs valuation are proving detrimental to India's exports to Africa, the study said. Assocham Secretary General D. S. Rawat said: "Pharmaceuticals' exports are a major factor contrib- uting to growth of this industry in India with the US and few fast growing markets like Brazil, Mexi- co, Russia, South Africa and in South-East Asia emerging as the main export markets for generic drugs." According to the study, India's pharmaceutical market may reach $20 billion in 2016 and $55 billion by 2020 marking a CAGR of 22 per cent. "Pharmaceutical market in India is being driven by rapid socio-economic changes, rising sedentary lifestyle amid people and expected growth in number of people suffering from obesity, diabetes, car- diac problems and other related ailments," Rawat added.

HIGH COMMISSION OF INDIA, SINGAPORE 11 INDIA FOCUS Issue No 193, 30 June 2016

Cont from P. 10. from the Middle East. It’s fashion brand and were looking for synergies. counting on a surge in international traffic from Longchamp already has a loyal clientele in India the world’s fastest growing major air-travel mar- and was scouting for an Indian partner. Its prod- ket. ucts are universal, simple and sophisticated and Vistara, in which Singapore’s flag carrier owns cater to a wide audience. The brand has main- 49 per cent, is considering buying or leasing wide tained its luxury values of craftsmanship, creativ- -bodied aircraft for long-haul routes and will seek ity and quality. We are delighted to bring the funds from its owners to finance the purchase, brand to India," said Radha Kapoor, founder and Chief Executive Phee Teik Yeoh said in an inter- director of DOIT Retail Brands. Longchamp view on June 24. Vistara, which has 11 planes in owns more than 300 exclusive stores globally and its fleet and is co-owned by India’s Tata Sons, retails from another 1500 points of sales. It is fa- needs at least nine more to fly abroad under the mous for its iconic leather handbags, luggage, relaxed policy. shoes, and other fashion accessories sold at retail The number of international travellers from India stores like Selfridges and Bloomingdale's besides is poised to grow 10-fold to 500 million by 2050, its own stores. Kapoor said the company is scout- according to a CAPA Centre of Aviation study ing for a second location in Mumbai and is keen that was commissioned by Vistara. on Palladium. "Real estate costs are high and The carrier’s plans may be the start of a fresh there is a dearth of quality real estate. We would challenge for Emirates Airline and Etihad Air- like to take it slow with Delhi and Mumbai and ways PJSC that have long been the biggest for- we may look at other locations like Chennai and eign carriers in India and have, along with Air Bengaluru going forward. The brand is in the af- India and Jet Airways India, dominated the mar- fordable luxury space and considering the foot- ket for offshore travel. falls, malls make more sense than high street," “We believe Vistara may pull out all stops to get she said. Kapoor said the brand could be posi- to the 20 number and fly overseas,” said Amber tioned somewhere between Louis Vuitton and Dubey, the New Delhi-based India head for aero- Michael Kors. The 1,000 square feet store at The space at KPMG. “Being an Indian carrier, they Emporio mall in New Delhi will retail Long- will have the advantage of providing non-stop champ's bestselling products like Le Pliage Herit- flights from India to the European Union and US, age, Penelope, Roaseau and Le Pliage Cuir bags something that Gulf carriers can’t do.” along with other accessories. Longchamp an- Prime Minister Narendra Modi’s Cabinet ratified nounced annual sales of 566 million in 2015. It its policy changes in aviation on June 15, permit- stated its revenue grew 15% in Asia, and the ting domestic airlines to fly overseas, provided Asian market contributed 25% to overall sales. they deploy 20 planes or 20 per cent of capacity, whichever is higher, on local routes. Earlier, car- riers needed to have a minimum of 20 aircraft in their fleet and five years of domestic services. “The world is our oyster now, we are spoiled for choice,” Mr Yeoh of Vistara said. “We can be East-bound, West-bound, we can be short-haul or long-haul from New Delhi.”

French luxury label Longchamp to debut in India Source: The Economic Times French luxury leather goods brand Longchamp has announced its India entry and will open its first store in New Delhi this week. DOIT Retail Brands has bagged the master franchise rights for Longchamp in India. Leather goods major Long- champ was founded in Paris in 1948 by Jean Cas- segrain and is still owned and run by the Casse- grain family. "We wanted to partner with a global

HIGH COMMISSION OF INDIA, SINGAPORE 12 INDIA FOCUS Issue No 193, 30 June 2016

2nd International Day of Yoga celebrations at the Promenade of the National Stadium of Singapore

HIGH COMMISSION OF INDIA, SINGAPORE 13 INDIA FOCUS Issue No 193, 30 June 2016

FORTHCOMING EVENTS >>>> INDIA

I. 57th India International Garment Fair

Date: 18-20 July, 2016

Venue: New Delhi, India

Organizer: The Apparel Export Promotion Council of India (AEPC) ; www.indiaapparelfair.com

Details: The show will feature around 350 exhibitors from across India with the entire range of wom- en’s wear, men’s wear, children’s wear and fashion accessories. Further, under Buyers Promotion Scheme of Ministry of Commerce & Industry, the Council is providing complimentary airfare and 3 night’s hotel stay, upto specified ceiling, as per certain qualifying criteria subject to the approval of the Buyers Screening Committee.

II. India Chem 2016

Date: 1-3 September, 2016

Venue: Mumbai, India Organizer: The Department of Chemicals and Petrochemicals, in association with the Federa- tion of Indian Chambers of Commerce & Industry (FICCI)

Details: It is one of the largest composite events of Chemicals, Petrochemicals and Pharmaceutical industry of the Asia-Pacific region. This spectacular event comprises an international exhibition and a conference of representatives of participating global giants from various associated fields. II. Global Investors Summit 2016

Date: 22-23 October, 2016

Venue: Brilliant Convention Centre, ,

Organizer: The Government of Madhya Pradesh

Contact : Ms. Neelam Bhagat , email [email protected] , tel + 91 11 2461 7251

Details: Global Investors Summit (GIS) is a flagship investment promotion event of the Government of Madhya Pradesh. This biennial event provides multiple business opportunities for private sector investment in the state. Key Aractions:  One stop shop for interacting with Investors, Policy Makers, Industry Experts and Subject Matter Experts  Presence of Global Leaders and Head of States  Presence of Chairman and CEOs of Fortune 500 companies, Heads of International Institu- tions, GOI and State Government Senior Officials, Diplomats, Economists, Thought Leaders and International Delegates  Opportunity for Investment Promotion, Strategic Partnerships and Direct Investment  Focused Sector and Country Seminars – better JV/ partnership opportunities for participants  CEO Conclave – networking opportunities with the key decision makers  Start-up Session

HIGH COMMISSION OF INDIA, SINGAPORE 14 INDIA FOCUS Issue No 193, 30 June 2016

Notifications

Securities and Exchange Board of India

Introduction of system-driven disclosures in Securities Market http://www.sebi.gov.in/cms/sebi_data/attachdocs/1448970446882.pdf Schemes of Arrangement by Listed Entities and (ii) Relaxation under Sub-rule (7) of rule 19 of the Securi- ties Contracts (Regulation) Rules, 1957 http://www.sebi.gov.in/cms/sebi_data/attachdocs/1449125028827.pdf

Ministry of Corporate Affairs

The Companies (Central Government’s) General Rules and Forms Amendment Rules, 2014. http://www.mca.gov.in/Ministry/notification/pdf/CCINotificationGSR815.pdf

Reserve Bank of India

Guidelines on trading of Currency Futures and Exchange Traded Currency Options in Recognized Stock Exchanges – Introduction of Cross-Currency Futures and Exchange Traded Option Contracts https://rbi.org.in/Scripts/NotificationUser.aspx?Id=10172&Mode=0

Foreign Exchange Management (Manner of Receipt and Payment) (Amendment) Regulations, 2015 https://rbi.org.in/Scripts/NotificationUser.aspx?Id=10173&Mode=0

Foreign Exchange Management (Borrowing or Lending in Foreign Exchange) (Amendment) Regulations, 2015 https://rbi.org.in/Scripts/NotificationUser.aspx?Id=10157&Mode=0

Investment by Foreign Portfolio Investors (FPI) in Corporate Bonds https://rbi.org.in/Scripts/NotificationUser.aspx?Id=10147&Mode=0

Ministry of Finance

Clarification regarding Acquisition & Transfer of Immovable Property in India by Foreign Nationals

http://finmin.nic.in/press_room/2014/clarification_Acquist_Transfer_Property_foreignnationals.pdf

HIGH COMMISSION OF INDIA, SINGAPORE 15 INDIA FOCUS Isro successfully launches 20 satel- lites from Sri- Issue No 193, 30 June 2016 harikota

Livemint: June 22, 2016 FAQs on Foreign Investments In India

The fortnightly FAQs will broadly cover the following areas

I. Foreign Direct Investment

II. Foreign Technology Collaboration Agreement

III. Foreign Portfolio Investment

IV. Investment in Government Securities and Corporate debt

V. Foreign Venture Capital Investment

VI. Investment by QFIs

The Indian Space Research IV. Investment by QFIs Organisation on Wednes- Q. What are the investments QFIs can undertake and what are the applica- day successfully launched 20 satellites and injected ble caps for such investment? them into the required or- bit, launching the maxi- Ans: QFIs are now being treated as deemed RFPI and rules as applicable to mum number of satellites RFPIs shall be applicable. in a single mission ever. The launch took place Source: RBI aboard the Polar Satellite Launch Vehicle (PSLV- C32) at 9:26am at the Sat- ish Dhawan Space Centre in Sriharikota. The primary payload was a 727kg Cartostat-2 series satellite, which will be used for earth observation; 19 other satellites together weigh about 560kg. The Cartostat satellite, which is equipped with specialised cameras, was injected into the nearly 505-km polar Sun Synchronous Orbit and will provide regular remote sensing services. The imag- es sent by the satellite could be used for urban and rural applications, coastal land use, road network monitoring, land use maps and several geographical information system appli- cations.

HIGH COMMISSION OF INDIA, SINGAPORE 16 INDIA FOCUS