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2/2018

INDIA Contact: Rajesh Nath, Managing Director Please Note: Jamly John, General Manager Telephone: +91 33 40602364 1 crore = 10 000 000 Fax: +91 33 2321 7073 1 lakh = 100 000 E-mail: [email protected] 1 Euro = Rs.78

The Economic Scenario

Economic Growth Despite moderation in factory output growth in March, 's GDP is expected to grow by 7.7% in January-March, up from 7.2% in the preceding quarter. Despite the moderation in March, industrial production growth averaged 6.2% in the January-March period, up from 5.9% in Q4 (October- December).

The uptick in average industrial production growth, implies that the overall industrial activity strengthened in Q1 (January-March), supporting the view of a pick-up in GDP growth to 7.7% year-on- year in Q1 from 7.2% in Q4.

India is expected to witness cyclical recovery led by both investment and consumption. However, factors like rising oil prices as well as tighter financial conditions are expected to drag down growth rates. According to official data, industrial output growth fell to a five-month low of 4.4% in March due to decline in capital goods production and deceleration in mining activity and power generation.

Industrial growth as measured by the Index of Industrial Production (IIP) in 2017-18 too decelerated to 4.3% from 4.6% in the previous fiscal.

The country's foreign exchange reserves hit a life-time high of € 348 ($424.361) billion after rising by € 1.50 ($1.828) billion in the week to end of March, helped by rise in foreign currency assets. In the previous week, the reserves had increased by € 0.98 ($1.197) billion to € 346 ($422.532) billion.

Previously, the reserves had touched a record high of € 346 ($421.914) billion in February. It had crossed the € 328 ($400) billion mark for the first time in the week to September, 2017, but has since been fluctuating.

In the reporting week, the foreign currency assets, a major component of the overall reserves, rose by € 1.49 ($1.823) billion to € 327 ($399.118) billion.

VDMA-Newsletter “India”, Edition 2/2018 Contact: Oliver Wack, Telephone: +49 69 6603-1444 2 Indian Economic and Industrial Scenario, 2/2018 VDMA INDIA Office

Expressed in the US dollar terms, the foreign currency assets include the effect of appreciation or depreciation of the non-US currencies such as the euro, the pound and the yen held in the reserves.

Gold reserves remained unchanged at € 18 ($21.614) billion. The special drawing rights with the International Monetary Fund rose by € 1.7 ($2.1) million to $1.544 billion. The country's reserve position with the IMF also increased by € 2.29 ($2.8) million to € 1.7 ($2.083) billion.

Revival in rural demand, increased infrastructure spending is likely to drive India's growth in current year, even as increasing debt and trade protectionism could pose a challenge. As per forecasts, a faster than expected growth for Indian economy against the backdrop of increasing crude oil prices and volatile market conditions.

The improvement in domestic conditions is a positive sign that growth is picking up and will continue to maintain strong momentum in 2018, retaining India's position as the 'fastest growing large economy' in the world.

Showing signs of recovery, the Indian economy recorded a five-quarter high growth of 7.2% in the October-December period on good showing by key sectors like agriculture, construction and manufacturing.

The economy is expected to grow at 6.6% in the current fiscal ending March, as per official estimates, compared to 7.1% in 2016-17.

After a year of disruptions and growth slowdown, Indian economy is consolidating the gains from the recent reforms and is moving in the right direction. With a steady increase in FDI inflows and pick-up in growth in the Q3 of 2017, 2018 will expectedly remain a period of strong growth for India with a growth rate of around 6.8 - 6.9%.

The negative effect of major reforms like GST and demonetisation is wearing off now as there is high optimism in domestic demand in the form of consumption and revival in small scale business activities, resulting in an increase in FDI flows into the country.

Moreover, the government has made huge strides towards financial inclusion and pushing the expansion of digital India. India is steadily moving towards greater formalisation of the informal economy.

With eye on infrastructure development, the government has given green light to an Rs 7 trillion infrastructure program in late 2017, with the aim to pave more than 80,000 km of road by March 2022.

The global economic growth is likely to move up further as more than 75% of the world economy is now enjoying an upswing, with forecasts anticipating global growth to rise to 3.6% in 2017 and 3.7% in 2018, from 3.2% in 2016.

As the global economy is in its heights after recovering from the shocks of 2008 crisis, India should take the benefit of this opportunity. India's ability to stave off the economic gales was helped by the fact that it is much less dependent than most countries on global flows of trade and capital. And therefore, the recovery in global economic conditions should help India boost its domestic growth.

With regard to challenges facing the Asian region, there is a build-up of debt from the post-2008 financial crisis period of excess global liquidity. Besides, the spread of global protectionist sentiment is a concern for the Asian economies.

The Reserve Bank switched back to the gross domestic product (GDP)-based measure to offer its growth estimates from the gross value added (GVA) methodology, citing global best practices. Government had started analysing growth estimates using GVA methodology from January 2015 and had also changed the base year to 2018 from January.

While GVA gives a picture of the state of economic activity from the producers' side or supply side, the GDP model gives the picture from the consumers' side or demand perspective.

In the first bi-monthly policy of the new fiscal year 2018-19 wherein it left the key rates unchanged at 6% citing rising inflation worries in the first half, as per RBI GDP is projected to strengthen from 6.6% in FY18 to 7.4% in FY19-- with the economy clipping at 7.3-7.4% in H1 and at 7.3-7.6% in H2 with risks evenly balanced.

VDMA-Newsletter “India”, Edition 2/2018 Contact: Oliver Wack, Telephone: +49 69 6603-1444

3 Indian Economic and Industrial Scenario, 2/2018 VDMA INDIA Office

Industry Scenario

Infrastructure

Ahmedabad to Mumbai in 2 hours, 70 bullet trips every day The National High Speed Railway Corporation Limited has decided to initiate the procedure to acquire railway land between the old and new Sabarmati stations, for the bullet train station. The bullet train station will be elevated and situated between the current old and new Sabarmati stations. Officials said the bullet train will originate and terminate at the Sabarmati station with Kalupur being the second station in . NHSRC officials said the journey time between Mumbai (Bandra-Kurla Complex) and Sabarmati will be 2.07 hours for a fast train and 2.58 hours for a train stopping at all twelve stations en route. During peak hours — 7am to 10am and 5pm to 9pm — there will be three trains every hour, or a train every 20 minutes. Two trains will depart at off-peak hours. Passenger capacity will initially be 750 per train and it will be increased to 1,250 later.

Railways plans to lower cost of goods transport Transporting goods by train may get cheaper, with the railways planning to offer special rates for bulk consumers who will give the national transporter assured freight traffic on advance payment. In return, the railways will offer a 5-10% reduction in base charges, fixed prices over the financial year and preferential allotment of rakes. Power plants that use coal, among other bulk users, can benefit from this scheme. The planned incentives will effectively lower transportation costs for commodities such as coal, steel, cement, fertilisers, food grain and automobiles. NTPC, the country’s biggest power generator, is set to be the first customer of this special offering. The state-owned corporation will pay € 641 million (Rs 5,000 crore) to the railways as advance freight charges for the next financial year. In return, NTPC will get a 10% reduction in freight charges, fixed rates and availability of rakes throughout the year.

Airbus looks to increase composite sourcing from India Airbus is actively looking at increasing its sourcing of composites—the most critical material that goes into making aircraft lighter and more fuel efficient—from India.The suppliers being looked at include the Adani Group which is actively setting up capabilities in this segment. Airbus has a total of 46 suppliers in India. It’s sourcing from India last year totalled over $550 million. Sourcing of composites will significantly increase this number. The Adani Group has formed a joint venture with an Israeli company called Elbit Systems on unmanned aerial systems (UAS) or drones called the Hermes 900. Adani Defemce & Aerospace is now setting up a facility in Mundra, to make carbon composite aerostructures. Making of composites will also be Adani's latest initative as part of its planned foray into aviation. The conglomerate's private airport in Mundra is one of the first to see a commencement of commercial flights under the government's regional connectivity scheme called UDAN (Ude Desh ka Aam Nagrik), which loosely translates to "Let the common man fly".

Tata Steel selected as successful applicant to buy Bhushan Steel Tata Steel has accepted the Letter of Intent for Bhushan Steel Limited under the Corporate Insolvency Resolution Process of the Insolvency and Bankruptcy Code 2016. The development follows on heels of Tata Steel being declared as the successful resolution applicant by the Committee of Creditors (‘CoC’) of Bhushan Steel Limited in March 2018. The decision is subject to obtaining necessary regulatory approvals, including approval from the NCLT and the Competition Commission of India. Tata Steel which has recently commnlissioned a grenfield steel plant at Kalinganagar, Odisha, had earlier emerged as the highest bidder for Bhushan Steel with a € 4487 million (Rs 35,000 crore) offer. For all practical purposes, this announcement paves the way for Tata Steel's acquisition of Bhushan Steel, a relatively new five million tonne steel plant in Odisha with a product basket that caters to high value customers like, auto and consumer durable makers.

VDMA-Newsletter “India”, Edition 2/2018 Contact: Oliver Wack, Telephone: +49 69 6603-1444

4 Indian Economic and Industrial Scenario, 2/2018 VDMA INDIA Office

Automobile

16 Korean companies sign MoU with Andhra government to set up ancillary units Nearly 16 companies signed memoranda of understanding with the Andhra Pradesh government for setting up auto ancillary units to cater to Korean auto maker Kia car's manufacturing facility coming up in Anantapuramu district. The companies will invest € 614 million [$737 million (Rs 4,790 crore)] and provide 6,583 jobs. The auto giant Kia Motors is setting up its first car manufacturing plant in India at Erramanchi in Anantapuramu district with an investment of 1.1 billion USD. Kia expects to roll out its first India-specific car from the Anantapuramu plant by mid-2019. The state government is developing a Korean City in the region to promote various industrial units that will cater to the facility.

Adient, Arvind ltd form JV for automotive fabrics in India Adient, the global leader in automotive seating, and Arvind Limited, India's leading textile-to-retail conglomerates announced the formation of Adient Arvind Automotive Fabrics, a joint venture that will develop, manufacture and sell automotive fabrics in India. Adient Arvind Automotive Fabrics will be based out of Ahmedabad, India, where it will manufacture high-end performance fabrics for automotive seating systems. The joint venture will bring in synergies from Adient and Arvind, each bringing industry-leading technology and design capabilities in their respective fields.

Precision Camshafts buys majority stake in German firm Auto component maker Precision Camshafts has acquired 76% stake in Germany-based MFT Motoren und Fahrzeugtechnik GmbH (MFT). Precision Camshafts acquired the company through its wholly- owned subsidiary PCL (International) Holding BV. MFT has long term relationships with global brands such as Volkswagen, Audi, Opel, Westfalia, Hatz and Suzuki. It manufactures products like balancer shafts, camshafts, bearing caps and engine brackets among others. Precision Camshafts on the other side caters to clients like Ford Motors, General Motors, Toyota, Maruti Suzuk, Hyundai, Daimler and Porsche.

Infrastructure a pre-requisite for Mercedes-Benz to enter EV segment in India India's push for electric mobility by 2030 is something that has to be considered to decide the right Mercedes-Benz products for the market in future but infrastructure is a key pre-requisite to enter the EV space. For the future journey in India, the company is closely observing changing customer needs and is also constantly evaluating various options, including different drivetrains or different body styles. Mercedes-Benz is a part of the Daimler Group, which is among the leading manufacturers of premium cars globally and the world's biggest commercial vehicles maker. India has set eyes on 100% electric vehicles for public mobility and 40% of personal mobility by 2030. Citing company's experience they are aware of customers that range anxiety is the biggest topic in the decision process for buying an electrified vehicle. They would like to go into zero emission vehicles, but consider the pre-requisite to have the infrastructure. The company is also investing 'heavily' in fully electric vehicles, and have a strong lineup until 2022 with more than 10 purely electric passenger cars in their portfolio.

BlackBerry, Jaguar Land Rover ink pact for next-generation vehicles Canadian firm BlackBerry and Jaguar Land Rover (JLR) announced a multi-year agreement to collaborate and develop technology for the automotive manufacturer's next-generation vehicles. As part of the agreement, BlackBerry will license its QNX and Certicom technology to JLR, as well as assign a team of engineers to support in the development of new Electronic Control Unit (ECU) modules. The first ECU project will be a next-generation infotainment system. UK-based JLR was bought by Tata Group in 2008. BlackBerry provides OEMs with technology to protect and mitigate hardware, software, applications and end-to-end systems from cyberattacks. It has recently seen automotive design wins from Baidu, Delphi, Denso, NVIDIA, Qualcomm, Visteon, and others.

VDMA-Newsletter “India”, Edition 2/2018 Contact: Oliver Wack, Telephone: +49 69 6603-1444

5 Indian Economic and Industrial Scenario, 2/2018 VDMA INDIA Office

Power

ReNew power buys Ostro in biggest renewables sector deal Sumant Sinha-led Re-New Power Ventures has finalised the takeover of Ostro Energy for an enterprise value of € 1.4 billion ($1.66 billion), the biggest M&A deal in the renewables sector. The deal, part of the wave of consolidation in the rapidly-expanding sector, makes ReNew Power the largest renewable energy company in the country with total commissioned and under-construction assets of about 4,300 MW. Ostro Energy, set up in June 2014, has commissioned wind assets of 648 MW and another 350 MW are in the pipeline. It is also building around 110 MW of solar projects, making it a total of 1,108 MW across the states of Andhra Pradesh, Telangana, Karnataka, Rajasthan, Gujarat and Madhya Pradesh.

KKR in talks to invest in clean energy company Leap Green US private equity giant KKR is in talks to invest as much as € 64 million (Rs 500 crore) to fund clean energy company Leap Green, founded by members of the family of Formula One racer Narain Karthikeyan. The global buyout giant, which has turned to credit investing in a big way in India, has furnished a term sheet to provide short-term mezzanine funding that would help the Coimbatore-based Leap Green to meet capital requirements for execution of its existing pipeline of 750 megawatts of wind farms. Leap Green is also separately in discussions to raise equity funding of € 128 million (Rs 1,000 crore) to finance capacity additions of 500 megawatts. JP Morgan is one of the largest shareholders of Leap Green. The clean energy company has power purchase agreements with state-run electricity distribution utilities in Tamil Nadu, Rajasthan, Madhya Pradesh and Maharashtra.

BHEL wins 75 MW solar photovoltaic plant in Gujarat State-owned BHEL has won its largest solar photovoltaic project till date for setting up a 75 MW power plant in Gujarat. The order has been placed by Gujarat Industries Power Company Ltd (GIPCL). The order for setting up the 75 MW SPV power plant at Gujarat solar park, Charanka, has been placed on BHEL by GIPCL. With this order, BHEL’s solar portfolio has risen to 545 MW. The company is presently executing over 150 MW of ground-mounted and rooftop Solar PV projects across the country. The company has enhanced its state-of-the-art manufacturing lines of solar cells to 105 MW and solar modules to 226 MW per annum. In addition, space-grade solar panels using high efficiency cells and space-grade battery panels are being manufactured at its electronic systems division in Bengaluru.

Sterlite Power acquires € 192 million (Rs 1,500 cr) Goa-Tamnar Sterlite Power has acquired the € 192 million (Rs 1,500 crore) Goa-Tamnar Transmission Project. The project will deliver an incremental 400kV feed to Goa and scale up the transmission network for power evacuation from generation projects pooled at Raigarh (Chhattisgarh). With 15 power transmission projects including three in Brazil, Sterlite is poised to increase its current market share of 30% of the PPP (public private partnership) market. The project will help address the quality of power transfer from generating stations connected to the Raigarh pool. With this acquisition, they have increased their footprint of inter-state transmission projects to 21 states. Sterlite Power is a global developer of power transmission infrastructure with projects of over 10,000 circuit km and 15,000 MVA in India and Brazil.

RB commissions first solar powered facility Reckitt Benckiser commissioned its first solar powered factory in Mysore as part of project Greenathon. The factory, running on 'green power' forms, the factory meets 75% of the energy needs with solar energy and aims to be the first factory running on 100% green power in India within couple of years. This marks RB's first power purchase agreement (PPA) in India, which forms a landmark in its sustainability journey. This initiative will enable reductions in carbon emissions by 80% for the Mysore site over the next 10 years. The company has signed a 10-year 2.4MW power purchase agreement (PPA) with Amplus Energy solutions. Amplus has developed 42 MW solar park called as Nayaka in Chitradurga, Karnataka that supplies energy to the Mysore plant.

VDMA-Newsletter “India”, Edition 2/2018 Contact: Oliver Wack, Telephone: +49 69 6603-1444

6 Indian Economic and Industrial Scenario, 2/2018 VDMA INDIA Office

Paper & Printing

Japan-based Komori eyes Rs 200 crore business in India Tokyo-based Komori Corporation the second largest manufacturer of printing presses in the world -- is aiming for over Rs 200 crore business and would also establish 50 presses in India this year. Komori, which is involved with currency printing for several countries, including India, also announced the establishment of its India subsidiary that will introduce customised printing presses suitable for the domestic market. A leader in offset presses, digital presses, Print Engineering Service Provider (PESP) products and banknote/security presses, Komori was till date operating in India via its sole distributor Insight Group.

The expected growth rate for their marketing and commercial printing business in India is over 6% for 2017-21 while for the publishing printing verticle, we aim for over 8% revenue in the period 2016-20. Komori India will be a joint venture between Komori Corporation and Insight Group, with Komori holding the majority stake. With the acquisition of Insight's Komori division, the company will retain the employees of Insight Group in its new team. With the Insight Group, Komori already has a market share of over 40% in the country and now aims to strengthen and scale its operations even further, not only in India but Bangladesh as well as in East Africa. Founded in 1923, the first Komori press for the Indian market was delivered in 1954. The machine exported was a full-size (37 inch/640 mm) single-colour press equipped with a stream feeder.

JK Papers may take over Sirpur Paper Mills at € 81 million (Rs 628-cr) Telangana-based Sirpur Paper Mills’s (SPM) revival might be around the corner. The Government of Telangana may accept JK Paper’s € 81 million (Rs 628-crore) offer. Started by the Nizam rulers of Hyderabad, SPM located at Kaghaznagar, is one of the oldest paper mills in India and was considered to be the country’s largest manufacturers of pulp, paperboard and a variety of other papers. It shut down operations in October 2014 due to rising input costs, mainly raw materials. A few weeks earlier, the state government issued a Government Order (GO) with a slew of tailor-made concessions which usually applies to mega projects. This includes 100% gross State GST reimbursement for 10 years and 100% exemption on stamp duty. The government has also offered the exemption of electricity duty for 10 years in addition to reimbursement of power cost at Rs three per unit for three years.

The concessions continue with capital subsidy at 20% of investment subject to a maximum of € 6.41 million (Rs 50-crore), the supply of coal at a concession of Rs 1,000 for 10 years, interest subvention of 2% per annum on the amount of new investments for five years. Importantly, the company will be a preferred supplier of copier/maplitho to Telangana government at market rates. The GO is also said to mention that JK Paper has assured of protecting direct jobs of 1,200 staff and workers plus contract workers who are numerically equal. The industry has also promised in its proposal to provide livelihoods to about 10,000 families by use of its expertise in the plantation of trees. Earlier in January, the company which is under the Corporate Insolvency Resolution Process, received ‘expression of interest’ from ITC Group, JK Paper, West Coast Paper Mills and Kolkata-based Kohinoor Group.

Toyo inaugurates plastic colourant factory in Dahej Toyo Ink India (TIID), a member of the Toyo Ink Group, celebrated the opening of its new manufacturing facility for plastic colourants in a traditional Rajasthani ceremony held on the factory premises in Dahej in Gujarat. This factory has a production capacity of 1200 MT per annum. The factory will also produce masterbatches under Lioplex brand of the Toyo Group. With this plastic colourant factory, TIID has become one amongst many of the Toyo Ink Group companies to have all three central operating Companies viz. Toyo Ink, Toyo Chem and Toyo Color at one single location i.e. Dahej, Gujarat.

VDMA-Newsletter “India”, Edition 2/2018 Contact: Oliver Wack, Telephone: +49 69 6603-1444

7 Indian Economic and Industrial Scenario, 2/2018 VDMA INDIA Office

Ports & Shipping

Adani Ports inaugurates phase II of Dhamra Port Adani Ports and Special Economic Zone Ltd, (APSEZ), India's largest port developer inaugurated the phase II expansion of Dhamra Port in Odisha. The expansion will help the company achieve its vision 2020 of 200 MMT, well ahead of time and we now aim to touch 500 MMT by the year 2025. The Port is a model of modern maritime trade in Odisha and a successful example of the PPP model. The expansion of Phase II will make Dhamra India's largest port. The company has deployed more than 3,000 manpower with around 88% locals employed for the phase II expansion. The port is located at 215 kms from Bhubaneswar and is situated between Haldia in West Bengal and Paradip in Odisha. The port serves as a gateway to Nepal, Bangladesh, Myanmar and the entire geopolitical region, including the ASEAN region. APSEZ is the country's largest port company with footprints across the Indian coastline with presence across ten locations. ABI ABI BAL BAL

14 ports gets time till October for installation of radiation monitors, container scanner Fourteen sea ports, including JNPT, Kandla, Mumbai, Tuticorin and Vishakhapatnam, get seven more months till October this year for installation of radiation monitors and container scanner for imports of un-shredded metallic scrap. Earlier, these ports were asked by the government to install and operationalise these equipment by the end of this month. These ports are allowed to import un- shredded metallic scrap till October end. Such sea ports which fail to meet the deadline will be derecognised for the purpose of import of un-shredded metallic scrap, with effect from November 1, 2018.

Apeejay Shipping to acquire Japanese build ship Gearless Panamax Apeejay Shipping Limited, an Apeejay Surrendra Group company, announced the acquisition of a 76,602 MT DWT (deadweight tonnage) Gearless Panamax, Japanese build ship. The ship has been renamed ‘APJ Kabir Anand’. The expansion schedule of Apeejay Shipping has seen the company acquire three Gearless Panamax vessels since September of last year and increase its fleet capacity by 2,27,311 MT DWT. This takes the fleet size to 9 with a DWT of 5, 94, 558. Apeejay Shipping, one of the leading players in the country today, is constantly augmenting and upgrading its fleet to meet the requirements of global trade. Specializing in dry bulk cargo the fleet comprises a mix of panamax and supramax vessels. Even while expanding fleet, attention has been on maintaining its robustness and trading capacity with average age of vessels within 13.5 years The newly acquired panamax, APJ Uma Kismat, has traded internationally for 16 years; APJ Angad 2 has traded internationally for 13 years and the latest acquisition APJ Kabir Anand has traded internationally for a similar over 13 years and all of these are strategic buys for the group in the current scenario.

Mahindra Logistics keen on shipping segment; in talks with 2 European cos Mahindra Logistics is preparing to enter the sea transport segment through partnerships and is in talks with two European liners for a tie-up. The move is aimed at preparing for a liberalised coastal shipping regime, where foreign-flagged vessels will be allowed to operate in the domestic waters. Under the present Cabotage laws, foreign flagged vessels are not allowed to operate in the domestic sector. But having understood the importance of sea transport in bringing down cost of logistics, government is serious on liberalizing these norms. Mahindra Logistics will be entering container movement through the sea either through the West or East Coast after circumventing the peninsula, or also the North-South connectivity on the same coast.

On the e-commerce segment, which accounts for over 10% of its revenue of nearly € 308 million (Rs 2,400 crore) in the first nine months of the current fiscal, the revenue is still rising due to greater demand. However, e-commerce companies demand price revisions every six months leading to process innovations. Mahindra Logistics is also looking at acquiring majority stake in logistics technology-focused startups, he said without offering more details like the budget and timeline.

VDMA-Newsletter “India”, Edition 2/2018 Contact: Oliver Wack, Telephone: +49 69 6603-1444

8 Indian Economic and Industrial Scenario, 2/2018 VDMA INDIA Office

Garment and Leather

Telangana to set up Apparel Super Hub at textile park in Sricilla The Telangana government is setting up an apparel value chain system at the upcoming apparel park in Sircilla district at an estimated investment of € 13 million (Rs 100 crore) in collaboration with apparel manufacturer Kay ventures. Coming up in an area of 20 acres, the Apparel Super Hub (ASP) will house 5,000 state of the art sewing units with its corresponding embroidery, printing, washing and value addition/support facilities and is proposed to be developed in three phases and will be fully operational in three years. In a similar effort, to create an impetus for the existing textile and apparel ecosystem in Sircilla, (the) government of Telangana is gearing up with many projects such as Sircilla Apparel park, Sircilla group weaving shed, common facility center etc. The first phase of the project will come up at an investment of € 3.84 (Rs 30 crore) and will be operational in 9-12 months. While 90% of the investments in the first phase will be borne by the government, remaining will be funded by Kay ventures and their associates.

Arvind Ltd aims € 1282 million (Rs 10,000cr)business from textiles in 4-5 years Ahmedabad-based Arvind Ltd expects € 1282 million (Rs 10,000 crore) business from its textiles business in the next four to five years. Besides, in the next three to five years, the company intends to invest € 192 million (Rs 1,500 crore) in the textiles business to expand capacity of its existing units as well as set up new facilities. The company is exploring newer areas such as athleisure, where it is sensing a significant opportunity. Overall the textiles business for them is around Rs 6,000 crore and they would like to scale it to € 1282 million (Rs 10,000 crore) over the next 4 to 5 years. The company expects to continue its CAGR growth of 16% and above in the coming years. Arvind Ltd is in the process of demerging its branded apparel and engineering businesses. It has plans to list its branded apparel business, Arvind Fashions, into a separate entity. Arvind Ltd is in denim, knits & wovens and voiles textiles segments. Besides design, Arvind would co-create and supply them the finished product after manufacturing. Leading brands such as GAP, Levi Strauss & Co, H&M and Patagonia are its key customers.

Govt plans 'super premium' Khadi to tap luxury customer base The government plans to create a "super premium" segment for Khadi in a bid to increase sales of products made using the hand-woven fabric by tapping the luxury customer base. The government would first make a list of the actual super premium Khadi products which are already being manufactured in many parts of the country and check if any are missed and not listed and have a directory of that and should try to showcase it and create awareness amongst the style conscious youth. The MSME Ministry also plans to rope in top designers for the super premium segment products with the help of Textiles Ministry. To start with, the super premium products will be sold in lounges in select Khadi outlets. However, going forward, the Khadi and Village Industries Commission (KVIC) may also tie up with top global luxury brands to enhance the reach of the products, the proposal was also discussed in the board meeting of the KVIC held recently.

US-based Aeropostale eyes € 64 million (Rs 500 cr) from India in next 3 years US youth brand Aeropostale plans to be a € 64 million (Rs 500 cr) business in India in next 3 years. The Heritage Brands Division is a brand under Arvind Fashions Limited, as the brand sets to open its 33rd store in the country in Surat. Aeropostale did € 13 million (Rs 100 cr) business in 2017-18 and going forward, they foresee doing Rs 500 cr in next 3 years. Aeropostale claims to be one of the fastest growing brands in Arvind Fashions’ bouquet since it entered India in 2015. The brand will add 12-15 new stores pan-India. The brand will focus on "athleisure" and kids apparel too soon. While apparel and accessories have been going phenomenally well, they are now looking at new categories to ramp business in India. Arvind Limited is a € 1.39 (US$ 1.7) billion conglomerate that started off as Arvind Mills with the aim of manufacturing high-end superfine fabrics. Today, the company is a fashion powerhouse with an unmatched portfolio of global brands operating in segments ranging from bridge to luxury, premium and premium value.

VDMA-Newsletter “India”, Edition 2/2018 Contact: Oliver Wack, Telephone: +49 69 6603-1444

9 Indian Economic and Industrial Scenario, 2/2018 VDMA INDIA Office

General

Blue Star to begin production at Sri City plant by 2021 Air-conditioner manufacturer Blue Star will start commercial production from its plant at Sri City, Andhra Pradesh, by the end of 2021. The new plant will have an installed capacity of 500,000 units per annum. The company currently has five plants and the sixth one coming up at Andhra Pradesh will see an investment of € 0.29 billion (Rs 2.3 billion) spreading over 25 acres of land. In the first phase, € 23 million (Rs 180 million) will be spent and the balance in the second phase. By December, 2021, we will start production from the plant and the 2022 season demand will be met from this plant. The room air conditioner market in India, claims the company, grew by 10% in the period between January and December 2017 and Blue Star registered a growth of around 15%. Blue star targets a market share of 12.5% in FY19.

BHEL to make space grade cells for ISRO State-run Bharat Heavy Electricals Ltd would make space grade lithium-ion (Li-Ion) cells for the Indian Space Research Organisation (ISRO) under technology transfer. The Li-Ion batteries are used as power sources for the satellite and launch vehicle applications due to their high energy density, reliability and long cycle life. The ISRO's Vikram Sarabhai Space Centre at Thiruvananthapuram in Kerala has developed the technology to produce space grade Li-Ion cells, demonstrated its performance under testing conditions and established its cycle life characteristics in accelerated mode. The cells are being used for various satellite and launch vehicle applications. The technology transfer will enable BHEL to produce space grade Li-Ion cells to meet the country's space programme requirements.

Heavy Engineering Corporation to spend over 3 years to revamp equipment In a bid to compete with world players as well as to mark a foray into defence and nuclear applications, state-owned capital goods maker Heavy Engineering Corporation will be spending close to € 295 million (Rs 2,300 crore) over the next three years to replace its equipment and refurbish some existing facilities. HEC is one of the companies among other public sector undertakings like Bharat Earth Movers Limited (BEML), Hindustan Aeronautics Limited (HAL) etc that are on an expansion drive to cater to "strategic applications" opening up in the country. Out of the total planned spend, Rs 1300 will be spent on the rehabilitation drive while the rest of the € 128 million (Rs 1,000 crore) will be spent on other liabilities. The plan includes doubling its capacity for some products like tank casting, ship shafts and refurbishing equipment to make defence products like bombshells. The company has also tied up with Russian nuclear engineering company OKBM Afrikantov and will be manufacturing for nuclear power plant equipment also.

Sterling & Wilson integrates MEP biz Sterling & Wilson, a part of the Shapoorji Pallonji Group has integrated its entire mechanical, electrical and plumbing business and eyes € 385 million (Rs 3,000 crore) revenue from this business by 2020. As a part of its strategy, the company has decided to integrate all services, including electrical, firefighting, plumbing, integrated building management systems, HVAC (heating, ventilation, and air conditioning) industrial fire and safety, flue-gas desulfurization, process control and instrumentation and industrial clean room EPC under MEP. The integration of electrical, firefighting, plumbing, IBMS and HVAC will prove to be a major growth driver for the company, resulting in close to 30% growth for the business in the coming two to three years. The company, which currently enjoys a 15% share in the domestic MEP market, plans to enter international geographies like Bangladesh, Bhutan and Nepal and beyond. Sterling & Wilson, which has a strong presence in turnkey MEP services, data centres, renewables, diesel generators, cogeneration, storage and hybrid solutions and transmission and distribution verticals expects to close the fiscal year 2018 with revenues of € 1282 million (Rs 10,000 crore).

Dhoot Transmission set to buy UK’s Parkinson Harness Dhoot Transmission, an Indian wiring harness manufacturer, acquired UK-based Parkinson Harness Technology. The deal is said to be in the range of € 19 – 26 million (Rs 150 crore to Rs 200 crore). Parkinson Harness makes electrical solutions including wiring harnesses, control panels, battery and power leads and control systems for manufacturers of construction equipment, municipal vehicle and industrial products. This would be the third strategic venture by Aurangabad-based Dhoot Transmission in the past year. The company acquired TFC Cable Assemblies in Scotland and Slovakia and forged a joint venture with Carling Tech in the US for automotive electronics in 2017. A fourth acquisition in Europe is likely to be finalised in the upcoming financial year. Dhoot Transmission has earmarked € 42 ($50) million (Rs 325 crore) to expand production capacity across Europe and to acquire a third company in the region in the next financial year. The acquisition of Parkinson Harness will enable Dhoot Transmission to expand its portfolio in offroad vehicles, agricultural and construction equipment.

VDMA-Newsletter “India”, Edition 2/2018 Contact: Oliver Wack, Telephone: +49 69 6603-1444

10 Indian Economic and Industrial Scenario, 2/2018 VDMA INDIA Office

Focus State – Gujarat

Governor : Shri Om Prakash Kohli

Chief Minister : Shri. Vijay Rupani

General Facts

Area (sq km) 196,063 sq kms Total Population 60.4 million

Literacy Rate 78.03% 18 domestic airports and 1 international airport at Airports Ahmedabad

Infrastructure

Roads As of October 2015, Gujarat had a road network of around 77,030 km comprising around 19,761 km of state highways,5,016 km of national highways and 20,641 km of major district roads. As of October 2015, Gujarat had 1,348 major bridges, 4,277 minor bridges and 88,141 causeways. Under Kisanpath Yojana, state government has announced plans to invest € 7.9 million ($ 8.40 million) for the improvement of rural road in the state as per the budget 2016-17. The Gujarat State Road Transport Corporation delivers transportation facility to about 24 lakh people every day. Under the plan and non-plan head for Ports and Transport Department, the state government has allocated € 189.13($ 201.2) million during 2016-17. As per Budget 2016-17, 1,600 new buses and 1,100 daily new trips will be provided by Gujarat State Road Transport Corporation at a total cost of € 51.83 ($ 55.14) million during 2016-17. Allocation of €30.43($ 32.38) million and € 34.6($ 36.81) million for the conversion of state highways of 677 km into two-lane roads and widening of main and other district roads by up to 7 metres respectively. For the construction of Taluka Seva Sadan at Waghodia, Shahera, Gariyadhar, Kheda and Shinor, a provision of € 2.15($ 2.29) million has been done. Further, an allocation of € 25.84($ 27.49) million has been made for ROB (rail over bridges) and annuity works of the roads

By Air The state has 18 domestic airports (the highest in any state) and one international airport. Out of these, 9 are under Airports Authority of India (AAI), 2 in Daman & Diu, 3 under state government, 3 under Indian Air Force (IAF), while 2 are private airports. There are domestic airports at Bhavnagar, Bhuj, , Kandla, Keshod, Deesa, Porbandar, Rajkot, Surat, , Mundra, Mandvi and Palanpur.

Railways The rail traffic in Gujarat mainly falls under the following divisions of Western Railway: Vadodara, Rajkot, Bhavnagar, Ratlam, Mumbai and Ahmedabad. Ahmedabad, Anand, Bhavnagar, Bhuj, Godhra, Porbandar, Rajkot, Vadodara (Baroda) and Valsad are some of the important railway stations in the state.

The government is developing a High Speed Rail passenger corridor from Ahmedabad to Mumbai with the cooperation of the Government of Japan. The length of the corridor is 508 km and total journey time for the train is estimated at 2.07 hrs. The total estimated cost of the project is € 14.05 ($ 14.92) billion. About 81 % of the funding for the project will come by way of a loan from Japan. The joint feasibility

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11 Indian Economic and Industrial Scenario, 2/2018 VDMA INDIA Office

report co-financed by Indian Railways and Japan International Cooperation Agency

(JICA) has been completed in July 2015. To implement the project a new special purpose vehicle (SPV) named National High Speed Rail Corporation Limited has been formed early this year.

Economy Gujarat is located on the Western coast of India and has the longest coastline of 1,600 km in the country. The state shares its border with Rajasthan, Madhya Pradesh, Maharashtra and the Union Territories of Daman & Diu and Dadra & Nagar Haveli. The Arabian Sea borders the state both to the West and the South-West. Ahmedabad, Vadodara, Surat, Rajkot, Bhavnagar and Jamnagar are some of the key cities of the state. There are eight agro climatic zones in the state that support cultivation of a wide range of crops. The most commonly spoken language of the state is Gujarati. Hindi and English are the other Indian languages used.

Gujarat has excellent infrastructure as compared to the other states. There are 42 ports, 13 domestic airports and one international airport. The state also has extensive road and rail network. The urban and rural areas have 24-hour power supply. A 2,200 km gas-grid supplies gas to the industrial areas. There are 83 product clusters, 257 industrial estates, 32 notified Special Economic Zones (SEZ) and upcoming infrastructure on the Delhi-Mumbai Industrial Corridor (DMIC). Almost one-third of the DMIC project is taking place in Gujarat alone. A Dedicated Freight Corridor (DFC) is being set up between Mumbai and Delhi. Of the 24 industrial nodes identified across six states where DFC passes, six have been proposed for Gujarat alone. Gujarat is the ‘Petro Capital’ of India, the state contributes significantly to the country’s petrochemicals production (62%), chemicals production (51%) and pharmaceuticals production (35%). It has achieved the distinction of being one of the most industrially developed states. Accounting for 5% of the total Indian population, Gujarat contributes 24.6% to India’s goods exports.

Gujarat has good educational infrastructure with premier institutes in management, fashion, design, infrastructure planning and pharmaceuticals. Also, there are industrial training institutes in each district for training manpower for shop floor level. The State Government has many initiatives to encourage innovation in the education sector. Gujarat is the only state in India where the State Government has framed policies in almost all key sectors such as industry, power, ports, road, agriculture and minerals. Gujarat’s Industrial Policy, 2009, offers attractive incentives and concessions for prospective investors.

At current prices, Gujarat’s GSDP was about € 142 billion ($ 172.63) billion during 2016-17. The state’s GSDP expanded at a CAGR of 11.4% during 2011-12 to 2016-17. Gujarat’s NSDP was about € 125 ($151.92) billion during 2015-16. The state’s NSDP expanded at a CAGR of 13.85% during 2011-12 to 2016-17. The state’s per capita GSDP stood at € 2176 ($ 2,654) during 2016-17 compared with € 1729 ($ 2108) during 2011-12. Gujarat’s per capita GSDP increased at a CAGR of 11.99% between 2011-12 and 2016-17. Gujarat’s per capita NSDP was € 1916 ($ 2336) over 2016-17 vis-à-vis € 1496 (US$ 1824) during 2011-12. The state’s per capita NSDP increased at an average rate of 12.36% between 2011-12 and 2016-17.

During 2016-17, the tertiary sector contributed 36.12% to the state’s GSDP (at current prices), followed by shares of secondary (44.77%) and primary (19.11%) sectors. The primary sector increase at a CAGR of 8.85% between 2011-12 and 2016-17. At a CAGR of 15.06%, the secondary sector has been the fastest growing sector, during 2011-12 and 2016-17. Growth in the sector was driven by expansion of manufacturing, construction and electricity, and gas & water supply industries. The tertiary sector increased at a CAGR of 12.40% between 2011-12 and 2016-17. Growth was driven by trade, hotels, real estate, finance, insurance, transport, communications and other services sectors. Urban Infrastructure In order to develop and improve urban areas of Gujarat, the state government has announced plans to invest € 1616.47($ 1,719.65) million as per the budget 2016-17. For construction of individual, community and public toilets, waste management, water and drainage facilities and building awareness, the Government of Gujarat has announced plans to invest € 147.19($ 156.58) million during 2016- 17.Out of the planned investment, € 14.35 ($ 15.27) million has been allocated for 1,000 buses for transportation in municipality – Municipal Corporations areas. The Government of Gujarat has planned to invest € 12.06($ 12.83) million for works related to ring roads in the following cities, Rajkot, Bhavnagar, Jamnagar and Vadodara. For work on development of outgrowth areas of Municipal Corporations–municipalities, €7.17($ 7.63) million has been proposed by the state government. For fulfilling the R.O.B-R.U.B works across the Municipalities and Municipal Corporation areas and for speeding up the work on Surat’s Dream City project, allocations of € 2.15($ 2.29) million and €0.71($ 0.76) million have been proposed by the state government during 2016-17.

As of September 2016, Gujarat had a total of 74 SEZs, comprising eighteen operational SEZs, 28 SEZs having formal approvals, 4 with in-principle approvals and 24 notified SEZs. Gujarat ranks first in terms VDMA-Newsletter “India”, Edition 2/2018 Contact: Oliver Wack, Telephone: +49 69 6603-1444

12 Indian Economic and Industrial Scenario, 2/2018 VDMA INDIA Office of total area covered under SEZs in India. It is also a leading SEZ state with the highest geographical area of 29,423.9 hectares under SEZ development. As of March 10, 2015, the total utilised area of notified SEZs in Gujarat stood at 6,818.58 hectares. Has 18 operational SEZs namely, Kandla SEZ, Surat SEZ, Surat Apparel Park, Adani Port and Special Economic Zone, Dahej SEZ Ltd., Jubilant Infrastructure Ltd., E Complex Pvt. Ltd., Zydus Infrastructure Pvt. Ltd., Euro Multivision Pvt. Ltd., Reliance Jamnagar Infrastructure Ltd., GIDC Apparel Park Ahemdabad, Sterling SEZ Pvt. Ltd., Aqualine Properties Pvt. Ltd. Gandhinagar, L&T Ltd., Vadodra, Tata Consultancy Services Ltd., Gandhinagar, GIFT Multi-Service SEZ, Electronic Park SEZ and Synefra Engineering. & Construction Ltd. First state to formulate an SEZ policy, which includes flexible labour laws and exit options for investors. SEZs in Gujarat receive a 10-year corporate tax holiday on export profits (100.0% for the initial five years and 50.0% for the next five years)

Social Infrastructure Gujarat has a literacy rate of 78.03%; the male literacy rate is 85.80% and the female literacy rate is 69.70%. In order to improve the education infrastructure in the state, the Government of Gujarat announced plans to invest € 3.38($ 3.6) billion under planned and non-planned expenditure for the Education sector. Further, allocations of € 149.64($ 159.19) million, € 104.15($ 110.80) million and € 94.61($ 100.65) million have been made by the state government for secondary & higher education, higher education and technical education, respectively, during 2016-17. Moreover, for Sarva Shiksha Abhiyaan and implementation of mid-day meal scheme in the state, amounts of € 224.01($ 238.31) million and € 149.39($ 158.93) million respectively have been allocated by the state government, as per the state budget 2016-17.

The state government, as per state budget 2016-17 has decided to provide free medicines for a lifetime, to the poor and middle class families, through government hospitals. For providing 575 free medicines in the state, a provision of € 39.06($ 41.55) million has been proposed by the state government during 2016-17. In order to complete the construction of 50 sub-centres, 63 primary health centres and 15 community health centres across the rural areas of the state, a provision of € 14.55($ 15.48) million has been made by the state government during 2016-17.

Cultural Infrastructure Various dance forms of the state include dandiya raas, garba, garbi, rasaka, tippani and padhar. -Pavagadh Archaeological Park, located in the of Gujarat, was declared as a World Heritage Site by the United Nations Educational, Scientific and Cultural Organization (UNESCO) in 2004. Many fairs and festivals are celebrated in the state such as Bhavnath Mahadev Mela, Dangs Darbar, Vichitra Mela, Dhrang Fair, Trinetreshwar Mahadev Fair, Vautha Mela, Shamlaji Mela, Kutch Mahotsav, Bhadra Purnima, Kavant Mela, Modhera (dance festival), Makar Sankranthi, International Kite Festival (Uttarayan) and Navrathri Festival. Museums in the state include The Gandhi Smarak Sangrahalaya (Ahmedabad), Calico Museum of Textiles (Ahmedabad), Vadodara Museum (Vadodara), Maharaja Fatehsingh Museum (Vadodara), Gandhi Museum (Bhavnagar), Kite Museum (Ahmedabad), Watson Museum (Rajkot) and the Lady Wilson Museum (Valsad). An investment of € 3.27($ 3.48) million has been proposed by the government for the development and adornment of the 6 Pavitra Yatra Dham and 356 Devasthan which is managed by the state government.

Prominent stadiums in the state include the Sardar Patel Cricket Stadium (Ahmedabad), Moti Bagh Stadium (Vadodara), Indian Petrochemicals Corporation Ltd (IPCL) Sports Complex (Vadodara) and the Surat Indoor Stadium. Golf courses in the state include Gaekwad Baroda Golf Club (Vadodara), Gulmohar Greens Golf & Country Club (Ahmedabad), Aalloa Hills Golf Resort (Ahmedabad), Kensville Golf and Country Club (Ahmedabad), Cambay Golf Club (Gandhinagar), and an integrated Golf Course in Ganesh Housing Corporation (Ahmedabad). In Budget 2016-17, the allocation proposed by the state government under the plan and non-plan expenditure for Sports, Youth Services and Cultural Activities Department is € 81.86($ 87.08) million.

VDMA-Newsletter “India”, Edition 2/2018 Contact: Oliver Wack, Telephone: +49 69 6603-1444

13 Indian Economic and Industrial Scenario, 2/2018 VDMA INDIA Office

Development Projects: Key Public Private Partnership (PPP) Projects

VDMA-Newsletter “India”, Edition 2/2018 Contact: Oliver Wack, Telephone: +49 69 6603-1444

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VDMA-Newsletter “India”, Edition 2/2018 Contact: Oliver Wack, Telephone: +49 69 6603-1444

15 Indian Economic and Industrial Scenario, 2/2018 VDMA INDIA Office

Key Industries in the State There are 13 major industry groups that together account for around 82.05% of total factories, 95.85% of total fixed capital investment, 90.09% of the value of output and 93.21% of value addition to Gujarat’s industrial economy. Gujarat is a leader in industrial sectors such as chemicals, petrochemicals, dairy, drugs and pharmaceuticals, cement and ceramics, gems and jewellery, textiles, and engineering. The industrial sector of the state comprises of around 603,000 micro, small and medium industries which provide employment to about 3,851,000 people. Siemens PLM Software India Pvt Ltd has signed an agreement with the state government to set up five centres of excellence. These centres will address industry segments like automotive, industrial machinery, industrial automation, aerospace, and defence and shipbuilding. During FY’15, the company (Siemens PLM Software) spent US$ 250 thousand for upgradation of Government Industrial Training Institutes in the states of Maharashtra, Gujarat and Delhi.

Agro & Food Processing The agro sector, including animal husbandry, contributed 18% to Gujarat’s GSDP over 2015-16. Gujarat accounts for the largest share in the total investments in the food processing sector of India. Cotton, groundnut, bajra, paddy, maize, jowar, sesamum, castor, and tur (pigeon pea), along with fodder and vegetables, are the major kharif crops in the state. Normal area under kharif cultivation is 8.6 million hectares. During 2015-16 (up to December 2015), the state held 213 agriculture produce market committees (APMCs) and there were 213 main yards and 187 sub-market yards operational in the state. GAIC promotes agricultural activities at the ground level and aids the development of agro industries in the state. During 2015-16, the construction of hi-tech cold storage facility for potato at Deesa was under process.

Gujarat’s dairy sector consists of 17 district milk producers’ unions, with around 14,598 milk co- operative societies. The state’s milk production, which stood at 12.1 million tonnes during 2015-16, is the fourth largest in India. Under Dairy Development Schemes and National Programme for Dairy Development (NPDD), the central government released € 0.19($ 0.2) million for the growth of dairy processing industries in Gujarat. Under the plan and non-plan expenditure for the Food, Civil Supply and Consumer Affairs department, an allocation of € 147.87($ 157.31) million has been proposed by the state government during 2016-17. In budget 2016-17, for increasing the storage capacity of food grains the state government has planned to construct 124 godowns at taluka and district levels, for which an allocation of € 13.92($ 14.81) million has been made,

Textiles and Apparel Gujarat is the largest producer (33%) and exporter (60%) of cotton in the country. As per Government of Gujarat’s survey report, technical textiles is a key emerging area with over 860 units in Gujarat. Textile contributes 6% of the total industrial production in the state (organised sector). Over 40% of the country’s art-silk fabric is produced in Surat. Gujarat is the largest producer of denim in India (65 to 70%) and the third-largest in the world. About 24% to 28% of fixed investment, production value and employment of Small Scale Industries (SSI) is from textiles sector. In 2008-09, the state contributed 33% of mill-made fabric and 25% power-loom fabric to the total fabric produced in the country.

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16 Indian Economic and Industrial Scenario, 2/2018 VDMA INDIA Office

Chemicals and Petrochemicals Gujarat contributed about 36.4% to the national production of chemicals in 2014-15. It is the highest contributor to the total national production of petrochemical products. Gujarat’s contribution in the national production of the following is Soda ash: About 91%, Salt: 66%, Petrochemical: 62%, Onshore Crude oil: 27.11%, The State Government is developing the Petroleum, Chemicals and Petrochemicals Integrated Region (PCPIR) at Dahej.

Engineering and Automotive The state’s engineering and automotive sectors contribute 18% to state’s total industrial production and over 9% to the national engineering output. The sector comprises more than 300 units in large sector and over 75,000 units in Small and Medium Enterprises (SME) sector (excluding repair and services) operating in the state. The state has over 30 engineering product clusters. The state government has set up an international level Automotive Skill Development Institute on PPP mode with PSA Peugeot, to generate skilled manpower for the automotive sector. Small-scale industry is a significant contributor to the national production of brass parts, foundry, forging and machine tools, oil engines and electric motors, submersible pumps and industrial valves and bearings. The brass parts cluster at Jamnagar has over 5,000 small units and meets almost 70% of the entire requirement for brass parts in India. General Motors has set up its automotive manufacturing facilities in Gujarat, providing a boost to its auto ancillary industry.

Gems and Jewellery Gujarat accounts for 72% of the world’s share of processed diamonds and 80% of total diamonds processed in India. 90% of total diamonds in Gujarat are processed by about 10,000 diamond units located in and around Surat. Eight out of 10 diamonds in the world are polished in Surat. The state has the highest labour productivity in the jewellery sector in India. It is also internationally renowned for the production of unique hand-made silver ornaments (85% of total silver jewellery production of India). Renowned institutions such as the Indian Diamond Institute, Gujarat Hira Bourse, and the Gems and Jewellery Export Promotion Council provide skilled manpower for the industry.

Oil and Gas Gujarat ranks second in the production of crude oil (onshore) in India. Till December 2015, the state accounted for 24.7% of the total crude oil (onshore) production in the country. As on December 2015, the state accounted for 16.3% of the total natural gas (onshore) production in the country. The state has the highest number of oil and gas fields, both onshore and offshore, Gujarat accounts for nearly 44.5% of India’s installed refining capacity in 2014-15. Oil and gas reserves are located at Ankleshwar, Mehsana, Tapti High, Hazira, Bharuch, Gandhar, Dahej, Jambusar, Palej and Kalol. Isolated gas fields are located around Ahmedabad. Gujarat consists of 47% of total domestic gas connections in the country. As per Budget 2016-17, the state government is planning to add 40 CNG stations as well as 2.5 new domestic gas connections during the next year. Further, at a cost of € 94.77($ 100.82) million, the Gujarat State Petroleum Limited has also decided to add new gas pipelines of about 174 km length in the state, during 2016-17,

Pharmaceuticals and Biotechnology Gujarat contributed 35% to India’s pharma sector turnover and around 28% of India’s pharma exports in 2014-15. The state accounts for 80 % of intravenous sets manufactured in the country. It has the largest number of clinical research organisations in India and over 100 companies with WHO-compliant manufacturing units. The state accounts for 40% of pharma machinery production in India. The landscape of the Gujarat biotechnology industry consists of more than 50 biotechnology companies and 66 support organisations. Gujarat holds the maximum number of patents among all Indian states, with 3,637 licensed units engaged in drug manufacturing. The state is home to 40% of Contract Research and Manufacturing (CRAM) companies in India.

Shipbuilding There are several shipyards present in Gujarat such as ABG Shipyard, Alcock Ashdown and the Vipul Shipyard. The infrastructure available for development of the shipbuilding industry includes: Availability of raw materials such as ship building plates and engines, Stillness of water and deep draft, Proximity to ancillary industries, Sufficient anchorage space, Gujarat has nine shipbuilding yards in operation, In addition to this, 8 shipbuilding yards are under the execution phase while 5 more are under the approval process. The state accounted for around 60% share of the shipbuilding order book of India. The Ports & Transport policy under the state budget 2016-17, has announced Alang Ship Breaking Policy suited to the current global situation. The policy includes modernization of Ship Recycling Yard, environmental facilities for disposal of waste, infrastructure to enhance the facilities and welfare of workers and labourers.

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17 Indian Economic and Industrial Scenario, 2/2018 VDMA INDIA Office

Tourism The state has a rich architectural and cultural heritage owing to its historical parentage of the Indus Valley Civilisation sites such as Lothal and Harappa. There are many forests and natural ecosystems, heritage monuments, beaches and coastal sites, gardens, lakes, archaeological and architectural sites in Gujarat. Eight tourism hubs have been created for the convenience of tourists visiting Gujarat. These are in Ahmedabad-metro, Ahmedabad (North Gujarat); Surat (South Gujarat), Vadodara (Central Gujarat), Rajkot, Junagadh and Jamnagar (Saurashtra) and Bhuj (Kutch). Gujarat has the longest shoreline of 1,600 km, which supports many forests and natural ecosystems, beaches & coastal sites, gardens, lakes, etc, which attract large crowds from across the world. Gujarat has four national parks and 21 sanctuaries including Nal Sarovar, Anjal, Balaram-Ambaji, Barda, Jambughoda, Jessore, Kachchh Desert, Khavda, Narayan Sarovar, Paniya, Purna, Rampura, Ratanmahal and Surpaneshwar. Gujarat Infrastructure Development Board has prepared model concession agreement model under PPP model for the development of tourism sector projects in Gujarat.

Development Projects: SEZ’s and Industrial Clusters

VDMA-Newsletter “India”, Edition 2/2018 Contact: Oliver Wack, Telephone: +49 69 6603-1444

18 Indian Economic and Industrial Scenario, 2/2018 VDMA INDIA Office

Seminars & Exhibitions

IMTEX 2019 Indian Metal Cutting Exhibition Date Venue Organizer Profile Products/ Participants BIEC, Indian Machine Tools Manufacturers This trade fair will .Machine building, Bangalore Association (IMTMA) showcase the construction of equipment, exhaustive range of .Tool & mould-making, Retrospect 10th Mile, Tumkur Road innovations and fixture design,

201 9 technological .Steel & light-metal 2016: Bangalore India refinements in the construction, complete product .Road vehicle uary Net Area: 30,000 sq. mts Tel: +91-80-66246600 segment of metal- construction & suppliers

Jan forming. .Automotive industry &

suppliers, 30

Total Visitors: Fax: +91-80-66246661

– .Shipbuilding industry, 40,000 Appx. Email: [email protected] .Aerospace industry, .Electrical & electronic uary industry, Total No. of Website: Jan .Precision machines & www.imtex.in 5 Exhibitors: 475 optics, 2 .Manufacture of iron, sheet metal and metal ware

Technotex 2018 Date Venue Organizer Profile Products/ Participants BEC FICCI ○ Manufacturers of The 7th Technotex Machinery for Technical Mumbai FICCI Trade Fair will be jointly Textile Secretariat, organized by FICCI ○ Technology Providers Federation House, Retrospect: & Ministry of ○ Raw Material Suppliers Tansen Marg, Textiles ○ Textile Chemicals

8 2016 New Delhi – 110001 ○ Consultants

201

○ R & D Companies Exhibitors: 163 Tel : +91-11-23487581 (D) ○ Major Textile Institutions Fax : +91-11-23359734 June Mob : 91-9654258258 Countries: 29

– Taiwan, China, E-mail : U.S.A, Japan, [email protected], Switzerland,

June [email protected], Luxembourg, [email protected] 28 UK, Belgium, France, Russia, Spain Website: www.technotexindia.in and Germany

Visitors: 6602

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19 Indian Economic and Industrial Scenario, 02/2018 VDMA INDIA Office

Activities & services of the VDMA India Office Promote sales of members in participating divisions within VDMA especially exports, including participation in exhibitions.

Organize symposia and similar presentations of German companies in India.

Participate and service bilateral programs such as those in existence, with governmental participation between Germany and India.

Furnish information about the complete product program of the German industry to assist Indian companies to identify right partners for mutual business relationship.

Provide information on market trends, prospects, future development, new projects and tenders.

Offer job opportunities by uploading your resume on the Indian website under careers.

Contact: VDMA INDIA SERVICES PRIVATE LIMITED Rajesh Nath, Managing Director Jamly John, General Manager GC 34, Sector III, Salt Lake Kolkata– 700106, India Telephone: +91 33 40602364 Fax: +91 33 2321 7073 E-mail: [email protected]

VDMA India Quarterly Newsletter-German Machinery Industry

The VDMA India office publishes a Quarterly Newsletter-German Machinery Industry. This Newsletter informs the Indian industry about the development in the German Machinery industry in various industrial sectors. This Newsletter has a circulation of around 8000 copies in different industrial divisions. The VDMA member companies have the possibility of giving an advertisement in this Newsletter at a discounted rate.

For further details, please contact:

Mr. S Manohar: [email protected]

VDMA-Newsletter “India”, Edition 2/2018 Contact: Oliver Wack, Telephone: +49 69 6603-1444