India - Environment Scan

[Vivek Raghuvanshi]

POLITICAL AFFAIRS

Sino – Indian ice breaking measures.

At 14,000 meters above the sea level at Bum La, Sino-Indian border along Arunachal Pradesh, Indian and Chinese army personnel pledged brotherhood and friendship to tide over the recent friction over alleged Chinese intrusion into Indian territory on 1st October 09 to jointly celebrate the 60th anniversary of the formation of the People’s Republic of China.
Despite the nausea suffered due to lack of acclimatization by family members of army personnel, the spirits of revelry by Chinese and Indian army were not dampened. Col Yang Zi Zing who headed a 200-member Chinese delegation said that India and China are natural allies and that we must take measures to strengthen Sino-Indian friendship. Brig. C.P. Mohanty, Indian Army said that India appreciates China’s goodwill gesture in making Indian soldiers a part of their 60th anniversary celebration.
Since a decade Sino-India ice breaking sessions are being held at the borders. On the Chinese 60th anniversary, the two-and-a-half hours meeting between officials of Chinese and Indian army culminated with their family members exchanging gifts and taking pictures.

[Vivek Raghuvanshi]

ECONOMY & FINANCE

Tax changes, investment needed in food processing – PM

The Indian Prime Minister saif that if the Indian government reviews taxes on processed food and improves rural infrastructure, this would create a suitable environment for investment and then we can expect an increase in private investment in this sector.
Although India is one of the major producers of some farm products internationally but due to lack of a dynamic food processing industry it leads to huge wastages and this has limited India’s share in world food trade to less than 2 percent.
The Congress led coalition government has shown keenness to devise a National Food Processing Policy to boost this sector and increase farm income.
Dr Man Mohan Sigh said that the Indian Government needs to rethink the taxation structure in the food processing industry. The multiple tax on processed food needs to be simplified.
In the coming budget we could expect that Dr Man Mohan Singh may address this issue. The Prime Minister said that the states should remove bias when they use value addition tax to impose multiple taxes and that Goods and Services Tax (GST) should be implemented by them as early as possible.
April 2010 deadline has been set to remove multi levies such as excise and service tax and move over to a simpler GST as per the amendments to the Agricultural Produce Marketing Committee (APMC) Act in letter and spirit.
The Prime Minister urged the corporates to look at the feasibility of the food processing industry and motivated them to build multinational brands in this sector. He urged corporates to increase their presence in the food processing industry and build global brands. For this he said the government will consider increasing public investment to build rural on-farm infrastructure like primary processing centres, collection centres, cold chains etc.,
A meager of 6% food items produces by India are processed and the rest are wasted due to shorter shelf life of food items. This is in contrast to the 60-80 percent in developed nations and 30 percent in some Asian and Latin American nations.
The National Food Processing ( NFP) Policy will adopt a number of legislative, administrative and promotional measures besides being comprehensive to be effective, said Dr Manmohan Singh.
This NFP policy after much deliberations will evolve keeping in mind the objective of developing feasible agri-business and agro-industry models keeping in mind the different agro-climates and regions. The PM said that clusters could be identified for all-round upgrade by infusing new technology, new packaging methods and by providing marketing support.

[Vivek Raghuvanshi]

POLITICS

Delhi court reserves order on CBI plea to acquit Quattrocchi

Ironically Additional Solicitor General P.P. Malhotra appearing for the CBI who has asked for the plea to withdraw Italian businessman Ottavio . Quattrocchi's name from the Bofors gun deal pay-off case was at one point in time the defence lawyer for one of the accused in the Bofors case ie Win Chadha. Malhotra was earlier a defence counsel for the prime accused Win Chadha when the case was being pursued by Enforcement Directorate.
A city court on Friday reserved its order on the Central Bureau of Investigation (CBI) plea to withdraw Italian businessman Ottavio . Quattrocchi's name from the Bofors gun deal pay-off case. Chief Metropolitan Magistrate Kaveri Baweja reserved the order for Oct 24 whe it will be decided whether CBI's application under Section 321 of Criminal Procedure Code (CrPC) should be accepted. In this regard Ajay Aggarwal, the Opposing advocate said in an application that he should be treated as complainant in the case.
Lets go back down the memory lane, when Win Chadha’s office in Delhi’s Vasant Vihar was raided by the Enforcement Directorate on June 5, 1987, Malhotra was embroiled in a controversy following which an Enforcement Directorate team paid a visit to Malhotra where he voluntarily handed over Power of Attorney papers to Enforcement Directorate.
A Swedish Radio in 1987 had broadcasted that USD 13 million (Rs 64 crores) were paid allegedly as kickbacks to the Congress party and the Rajiv Gandhi government for the multi-billion dollar Bofors howitzer deal. This Bofors scandal had then shaken the nation and Rajiv Gandhi lost his two-thirds majority in parliament two years later in an election, post Bofors.
April 16, 1987: Alleged payoffs in the Bofors deal surfaces in a broadcast of Swedish Radio.
January 22, 1990: FIR in the Bofors case registered by CBI.
1997: Swiss banks release some 500 documents after years of legal wrangling. CBI files a case against Ottavio Quattrocchi, arms dealer Win Chadha, also naming Rajiv Gandhi, Defence Secretary S K Bhatnagar and number of others.
October 22, 1999: CBI files first chargesheet in the case naming Chadha, Quattrochhi, Bhatnagar, former Bofors Chief Martin Ardbo and Bofors Company.
October 9, 2000: CBI files supplementary chargesheet naming Hinduja brothers -- Srichand, Gopichand and Prakashchand as accused.
2003: Two British Bank accounts of alleged middleman Ottavio Quattrocchi is frozen by a high court order on request of the government.
February 4, 2004: Delhi High Court gives clean chit to Rajiv Gandhi. Quashes charges under Prevention of Corruption Act.
May 31, 2005: Delhi High court quashes charges against British businessmen, Hinduja brothers -- Shrichand, Gopichand and Prakash.
December 2005: B Datta, the then Additional Solicitor General requests the British Government that two British bank accounts of Quattrocchi be de-frozen on the grounds of insufficient evidence to link these accounts to the Bofors payoff.
January 16, 2006: Supreme Court directs the Indian government to ensure that Quattrocchi does not withdraw money from the two bank accounts in London.
January 16, 2006: CBI claims in an affidavit filed before the Supreme court that they were still pursuing extradition orders for Quattrocchi.
January 23, 2006: CBI admits that around Rs 21 crore, about $4.6 million, in the two accounts have already been withdrawn.
February 6, 2007: Quattrocchi detained in Argentina but the news of his detention released by CBI only on February 9.
February 7, 2007: Interpol informs CBI about Quattrocchi's detention.
February 13, 2007: CBI, responding to the Supreme Court on a matter relating to money withdrawn by Quattrocchi, does not mention the fact of his detention. CBI admits later that it had the information at that time.
February 23, 2007: CBI releases a statement about Quattrocchi's arrest in Argentina.
February 26, 2007: Quattrocchi released on bail.
March 2, 2007: CBI sends a two-member team - Director Prosecution S K Sharma and Superintendent of Police Keshav Mishra -- to assist in fighting the extradition case.
March 7, 2007: The CBI submits 250-page plea for extradition of Quattrocchi to the Argentinian Foreign Office.
March 23, 2007: The hearing of the plea for Quattrocchi's extradition to India began in the Argentinian court.
June 4, 2007: The two-member team goes again to give final touches ahead of the extradition trial of Quattrocchi.
June 7, 2007: Extradition trial begins in El Dorado
June 8, 2007: The court in El Dorado rejects India's extradition request of Quattrocchi.
October, 2008: Attorney General Milon Banerjee opines that CBI can withdraw Red Corner Notice against Quattrocchi.
November 25, 2008: Red Corner Notice against Quattrocchi withdrawn.
April 30, 2009: CBI seeks time from trial court to decide future course of action against Quattrocchi.
September 8, 2009: CBI seeks two weeks time from trial court forexploring options against Quattrocchi after withdrawal of Red Corner Notice.
September 29, 2009: Centre tells Supreme Court about its decision to withdraw case against Quattrocchi.
Bofors watchers were taken aback by the choice of the senior legal officer to argue on behalf of the Central Bureau of Investigation (CBI) in the Ottavio Quattrocchi case.
Now the Congress government has decided that no one was really guilty in the Bofors case. The good old fashioned rule is that any rumor which points a finger at the very top needs to be investigated. Is CBI really doing what it is supposed to do or does it become a tool for manipulation of the ruling party, whosoever it may be for witch-hunting and serving political masters.
Early this month the deadline to file an appeal against the quashing of Bofors corruption charges expired in the Supreme Court . It was decided not to clear CBI’s draft special leave petition by the Law ministry. This special leave application was demanding that the case be further examined. The court order had held that they had no evidence to make a corruption case against Hindujas and had given a clean chit to Rajiv Gandhi and former defence secretary SK Bhatnagar.
The court had observed that as of today they had no evidence to demonstrate that public servants had taken bribe in awarding the contract of guns to M/s AB Bofors & Co. either themselves or through Bofors’ agents. Although it has succeeded in tracing the Swiss accounts of ‘Commission Agents’ employed by M/s AB Bofors wherein illegal payments received by them from Bofors as commission were deposited.
The Bofors case has turned out to be a simple case of cheating against the Hinduja brothers and forgery against M/s AB Bofors. In the absence of Special Leave Petition, the Bofors case that been the Achilles heel of Congress party for over a decade will now help it emerge from the shadow of corruption and bribery.

[Vivek Raghuvanshi]

INDUSTRY & SERVICES

Two Indian firms feature in Green Peace’s top five green electronics brands.

The latest edition of Greenpeace guide to greener electronics features Wipro and HCL in the top five green electronics brands. This is because of the strong focus on e-waste management and climate control . This Greenpeace study has for the first time included energy and climate as evaluation criteria’s.
Abhishek Pratap, Toxics and Energy Campaigner, Greenpeace India said that Greenpeace lauds the efforts of Indian brands taking their environmental responsibilities more seriously and moving into the top bracket . Abhishek said that Greenpeace hopes that these companies will launch PVC and BFR-free products and let their action seem louder than words.
According to the Greenpeace study, Nokia heads the list with 7.5 points on a scale of 10. Sony Ericsson and Philips are other two brands including Wipro and HCL.
According to Greenpeace Wipro is the first Indian company to commit to absolute emission reduction targets. Wipro said that is is committed to cut carbon emissions by 20 percent over three years, after it revealed the externally verified Green House Gas (GHG) emissions of its business and manufacturing operations. Wipro’s latest notebook and desktop models adhere to latest Energy star ratings of Greenpeace. Because if its increased e-waste recycling rate Wipro has strengthened its performance on e-waste management.
Although HCL has improved its e-waste recycling rate and that half of the new products are in compliance with Greenpeace Energy Star ratings, it has failed to set targets for its carbon emissions reduction.
Greenpeace has applauded Hewlett Packard for launching a notebook that is virtually free of PVC (vinyl plastic) and brominated flame retardants (BFRs) and for re-prioritizing its toxic PVC and BFR phase out by 2011. This has come after August when Greenpeace activists had trespassed on Hewlett Packard’s HQ in California to pain the words “Hazardous Product” on its roof. This was a way by which Greenpeace was airing its dissatisfaction over HP’s failure to meet deadlines to reduce polychlorinated biphenyls (PVC) and brominated flame retardants (BFRs) in their products. What Greenpeace was oblivious of the fact was that HP was about to come out with a nearly BFR and PVC-free notebook, the ProBook 5310m, which launched in mid-September.
Bonnie Nixon, HP's Director of Environmental Sustainability said that HP on its part intends to phase out toxics out of its products by 2011. Bonnie said that although Greenpeace's stunt was considered vandalism by some HP executives, one cannot take a hose on the roof and wash that paint down the storm drain. She applauded Greenpeace for its Consumer Watchdog role.
HP, for its part intends to have the aforementioned toxics out of its products by 2011, Bonnie Nixon, HP's Director of Environmental Sustainability, said Friday at a San Francisco conference hosted by the Rocky Mountain Institute.While she said that Greenpeace's stunt was considered vandalism by some HP executives - "you can't take a hose on the roof and wash that paint down the storm drain," she noted - she applauded the nonprofit for pushing its "consumer watchdog" role.
Green peace has lauded Apple for taking on the leadership role for phasing out BFRs and PVCs from its products last year. Greenpeace International Toxics campaigner, Iza Kruszewska says that after Apple and HPs initiative, it puts pressure squarely on its competitors to launch more products that are cleaner and safer.
LG Electronics rating has fallen to 11th position for backtracking on its deadline timeline to eliminate PVC and BFRs from its products by the end of 2010. Only LG Electronics mobile phone range would be free of these toxic substances as of 2010. LG televisions and monitors toxic phase-out has been delayed until 2012.
Abhishek Pratap, Toxics and Energy Campaigner, Greenpeace India said that there are barely two months to go for crucial climate negotiations at Copenhagen and IT companies should realize to take responsibility and do more as time is running out to prevent runaway climate change.

[Vivek Raghuvanshi]

ECONOMY & FINANCE
ECONOMY

Can the lumbering elephant overtake the hyperactive dragon?

China is expected to overtake Japan as the world’s 2nd largest economy by next year. But is it possible that India which has been forgotten by investors, leapfrog ahead?
There is a likelihood that the trend growth rates of China and India could change and India could stride ahead of China as a faster pace.
Out of the 6.5 billion odd people on this planet, 40% reside in China and India. China and India are not only the quickest growing major economies at a time when other economies have shrunk.
Half of the population in China and India in 1950s was below the poverty line when we consider per capita income and levels of poverty. There was hardly any difference between the two then.
There was a spurt in growth of Chinese economy from 1970s compared to India’s average growth rate of 3.5%. Late Raj Krishna, economics professor cynically described it as the hindu rate of growth.
Economists expected that China’s double digit growth rate for nearly four decades would burst but China’s growth defied all expectations.
Acceleration of the Indian economy happened after the liberalization in 1991 when the Indian government relaxed bureaucratic controls over industry, trade and services.
India’s economy expanded by an annual average growth rate of more than 9% for four years in succession in the mid 1990s, this is before India felt the domino effect of the current ongoing recession.
A higher probability of India’s growth rate becoming faster than China is because of the base effect as India’s growth rate is higher than that of China because the base on which the rate is calculated is narrower.
If we see the Gross Domestic Product (GDP) in USD of 2008, we find that China’s GDP was 4.2 trillion USD as compared to India’s 1.2 trillion USD, this goes on to show that China’s economy is 3.5 times larger than India’s economy.
Compared to China, India’s economy has been less hit because of the economic recession because India’s economy is less dependent on exports as compared to China.
China’s combined imports and exports including Foreign Inward Remittance by workers and invisible earnings from tourists and export of services accounts for over 80% of GDP compared to 50% of India’s GDP.
China strode ahead of US as India’s largest trading partner two years back.
For 2009 as compared to China’s growth rate of approx 8%, India’s growth rate is claimed to be between 6.5 to 7% .
Ajay Chibber, Assistant Secretary General of UNDP said in a seminar at Delhi that until recently it was unimaginable to think that India could ever grow faster than China. But seeing the current scenario a day is not far when India will overtake China.
China’s emergence as a global super power can be credited to Mao Tse-Tung, the founder of People’s Republic of China. At recent celebrations of success of communism in China, Chinese did not forget to pay homage to Mao who has earned international respect for making China prosperous.
Farsightedness of the Late Deng Xiaoping, reformer who permitted global investments to enter China was responsible for double digit growth of more than 12% for some years. Liberal economic policies initiated some 30 years ago were responsible for China emerging as a economic superpower which indirectly led it to become a military superpower. Besides Mao Tse-Tung even Deng Xiaopeng was remembered on the occasion when China celebrated 60 years of success of communism.
The liberalization of Indian economy in 1990s under the Prime Minister Late PV Narsimha Rao was responsible for the economic progress of today which enabled India to come out of the stagnating annual growth rates of less than 5%. If Nepal follows China’s and India’s example, there is a likelihood that it will emerge as a successful economy.
It would be not wrong to say that the technological advancements we see today can be attributed to 8% rates of growth of the Indian economy. India’s recent launch of seven satellites in just 20 minutes reflects India’s technological advancement achieved because of its economic progress. India’s emergence as a economic power is reflected in its emergence as a military power as well.
The world sees China as the largest emitter of carbon emission last year but because carbon emission in China is growing less rapidly than its GDP growth indicates that China is moving towards green technology. According to Dr Man Mohan Singh, the Indian Prime Minister, expansion in India’s nuclear energy program will give fillip to economic growth in a sustainable manner. Both India and China are keen to resolve global issues without sacrificing growth and this has enabled them to emerge as a military power as well.
Although the global economy is still trying to recover, Indian and Chinese economy is expected to grow by 6% and 8.2 % this year. IMF and World Bank at annual meetings in Istanbul remembered India and China. Due to formulation and implementation of relevant policies they have been able to tackle problems whether it be the liquidity crunch or prices or supply of items. Seeing the rising level of food inflation, Indian government has taken measures to control it by improvement in central and state public distribution systems.
Contrary to the rapid economic progress of India and China, Nepalese economy has stagnated over the years. Political changes such as transition from Monarchy to multi-party system have not bought about any relevant changes. People at the helm of affairs in Nepal have confessed that their indulgence in political issues has been at the cost of economic issues.
India’s ban on export of food items to protect its domestic supply coupled with deficit monsoon and heavy rainfall has taken a large toll of property and human lives in Nepal. There is a likelihood of starvation deaths likely to increase as food is going to be scarcer and food given by donors has often failed to reach the poor because of the lack of efficient public distribution system in Nepal. It is highly unlikely that that Nepal would be able to attain even a modest growth rate of 5.5%. While there has been no consensus amongst the political leaders regarding civilian supremacy and the role of president, it is unlikely that they would seek resolution of their economic problems.

[Vivek Raghuvanshi]

INDUSTRY & SERVICES

Bharti - MTN debacle due to myopic vision of the South African and Indian governments.

Mittal said that Indian government should focus more on social change rather than delving into business issues. Mittal said that the MTN deal had failed seven times and that MTN needs to sort out their internal issues before a fruitful deal can materialize.
He said that the delay in 3G spectrum has been much hyped about and the delay is because of the corporate warfare and intense rivalry within the industry. As far as the availability of 3G spectrum is concerned India has large amount of 3G spectrum which is lying waste with public sector and defense, and because of this underutilization the private sector cannot move forward in the market to cater to the large need of broadband and wireless unless 3G spectrum is further opened up in India.
The Bharti MTN dissonance has shown that Indian government’s thinking on the global build-up of the Indian businesses continues to be clouded by short-sightedness.
The attempted merger between Bharti Airtel and South Africa’s MTN, the two leading mobile telephony companies has failed for many a reasons. There could have been faults in the gameplans of both sides, but the main reason is the myopic vision of the government and refusal to see reason by both the Indian and South African governments.

As per the Bharti MTN deal, Bharti Airtel, india’s largest telecom company with over 107 million subscribers was to acquire a 49% stake in MTN, whereas MTN was to acquire a 36% share in the Indian company.

The merger if it had been successful, would have created the world’s third largest telecom player through investments of USD 23 billion from both MTN and Bharti with combined annual revenues of USD 20 billion from over 200 million subscribers located in 24 countries. Had the merger been successful, there was a high likelihood that Bharti MTN would have grown bigger and emerged as a global player to reckon with.

As a leading player of the world’s hottest market in the telecom sector Bharti Airtel definitely deserves to work at such gigantic scales and become a global player. But what really went wrong had very little to do with Bharti’s own skill and capacities but the reason for failure can be attributed to myopic vision of the South African government which holds 21% of MTN through a public investment arm . The South African government made it an issue of national pride ie the continuance of the existing identity of MTN.
Although Manmohan Singh, the Indian Prime Minister and Pranab Mukherjee, the finance minister did make efforts to convince the South African government but maybe they could have tried harder by offering sops to South Africans about potential gains which will accrue with a business partnership with India.
The insistence by South African government that the merged identity be domiciled in Johannesburg and listed in both countries would have created dual listing which might have been tantamount to a case of an export of the capital market from India.

The possibility of attendant risks of multi currency settlement infrastructure would have challenged the partial convertibility currency regime that operates in India. But if the Indian government had towed the line, this Bharti MTN the dual listed company would hardly have taken India towards full convertibility to any great extent.
Another issue was that the money that would have moved from India as part of the initial investment of the deal and subsequently servicing it would have moved from India’s large forex reserves. India’s forex reserves can support many other deals of this nature without the apprehension of potential quagmire of full convertibility on the capital account.
The apprehension amongst some regarding American Depository Receipts and Global Depository Receipts being used by MTN to fund its own investment in Bharti as being violative of the takeover code in India would have been ironed out by SEBI, the Indian Market Regulator.

Why Indian firms suffer is because they need more active support from Indian policymakers and banks as well there is a need for whole scale modernization of the company law and currency and tax regimes. Further full convertibility would definitely have a major role if Indian businesses and enterprises are to become globally competitive.

[Vivek Raghuvanshi]

POLITICAL AFFAIRS

Political interference in Police functioning.

In the spate of recent attacks in Pakistan, P Chidambaram, Indian Home Minister said that India is still vulnerable to 26/11 attacks like last year.
India is now spending millions on new security measures such as creation of new commando hubs, navy patrols and effective intelligence gathering.
He said that police officers in India were being kicked around like a soccer ball? As to who were the culprits, he was ambiguous about the fact. What he implied were the politicians. States in India control a bulk of police force in the country.
On paper it is the Home Ministry which is the cadre authority of the exalted Indian Police Service (IPS). What this means is that the Ministry lays down rules and regulations regarding the career management of an officer and ensures that they are adhered to strictly by both the Centre and State governments where a majority of personnel of the Indian Administrative Service (IAS), the Indian Police Service (IPS) and Indian Forest Service(IFS) operate. The Department of Personnel looks after IAS and the Ministry of Environment and Forests control the IFS.

The tragedy of the Indian IPS officer is that although the officer is recruited by the Union government but the arbiter of his fate is the State government.
This is a ridiculous arrangement which nobody outside the country will ever comprehend. The reason why the system has not broken down completely is due to the far sightedness of some Home ministers and a few Chief Ministers.

What lends a certain measure of stability to the police can also be attributed to the high caliber of most of the police officers, some of whom have not been deterred and stayed on course despite great provocation by few petty and vindictive politicians.

Politicians in many states get such a hypnotic kick out of making life difficult and unstable for the Director General of police in their State and his senior police officers that they will hardly agree to the subject of Police being shifted even to the Concurrent list , forget about the Union list.

The need of the hour is to appeal to the good senses of Chief Ministers and educate them that the choice of a Director General of Police and other senior officers such as Commissioner of Police and the Inspector General of Police (Intelligence) should be done objectively and solely on professional grounds. Caste and regional considerations or the pliability of an officer should not hold sway as they do now most of the times.
What really needs to be done is that Chief Ministers need to understand that an honest officer who follows the rules should b preferred to a Yes man. The politicians addiction to boss over police is not just an Indian ailment but it can be seen to varying degrees in other countries but in India it has taken a cancerous form.
India needs to learn from the prevalent system in United Kingdom where a police officer is permitted to assert his authority in public and in matters of police administration call the shots rather than his political bosses as it happens in India.

The Indian politician needs to understand the brilliance and logic behind such an arrangement. Until this happens, police in India will have to bend, if not crawl in his daily interaction with the Chief Minister of a State where he serves.

[Vivek Raghuvanshi]

INDUSTRY & SERVICES

BMW rolls out sports car Z4 at Rs 59 lakh

BMW, the german luxury car maker has launched Z4 Roadster ( SUV ) in India which is priced at Rs 59 lakh. It is powered by 2979 cc straight six 6 cylinder, 24 valve direct injection engine with a maximum power of 306 bhp @ 5800 rpm. The engine is mated to a 7-Speed sports automatic suspension with DCT and drives the rear wheels. Z4 comes with an optional Design Pure White package, that features the finest Nappa leather in Ivory White and door inserts in Alcantara. It is available in 6 exterior colors sporting maximum potential and distinctive design. The new BMW Z4 Roadster carries contemporary styling a complete striking athletic-looking flattened rear, wide track and flared wheel arches. The design is very recognizable on the road emphasizing its power.

BMW will be increasing its business focus on India, a market in which it sees tremendous potential. Besides its focus on increasing car sales in India it also plans to diversify in Non Banking Finance Cooperation business.
It expects to sell approximately 30 to 40 units in the next three months by the end of this year. BMW has been able to sell 2738 cars as against its target of 3000 for this year in India. According to Peter Kronschnabl BMW sold 2908 cars in India.
To further strengthen its position in the luxury car segment , the launch of Z4, two seater sports car powered by 2979 cc petrol engine will give it the competitive advantage. With Z4 launch BMW wants to reach out to a new market segment in India consisting of those who appreciate pure driving experience, high standard of elegance and value and suitability for everyday driving and comfort.
The fierce competition in the Indian luxury car segment is between German rivals BMW and Mercedes Benz. In a comparative analysis of the first eight months sales figures of 2009 we notice that while Mercedes has sold 2026 units as against 2305 sold by BMW. The bulk of BMW sales comes from its 3 series and 5 series luxury sedans, which are being currently assembled at the Chennai plant.
As part of its relative diversification strategy with BMW’s intention to enter Non Banking Finance Cooperation , BMW expects to receive the license as early as 2010. BMW has plans of going into car leasing, buyback, financing used car business and offering finance to purchase other car brands. BMW might also consider looking at the feasibility of insurance business with the help of a corporate partner, thereby gets its integration strategy in place in India.
Besides its investment of USD 30 million in the Chennai plant, BMW is considering further investments to a tune of USD 50 million in its auto finance project. Higher investments in its NFBC is because of the mandate specified as that is the minimum amount required to be invested.
Kronschnabl stated that currently the localization is at 10 percent. The volume at this stage is however, too low to increase the level of localization. For BMW to raise its localization levels, the BMW sale have to reach 10,000 units per year. Kronschnabl further stated that BMW is currently growing at 18% in India as against the industry average of 11 percent.
Besides majority of its sales coming from 3- series and 5- series luxury sedans, BMW also sells 6-series and 7-series in the luxury segment and X3, X5 and X6 in the sports utility segment and M3, M5 and M6 in the convertible sports coupe category .

[abhishek]

I find it quite informative. I just want to say that India is in desperate need of electricity and power if it thinks that it has to be super power till 2020. The vision of ex-president APJ Kalam will only be a unfulfilled dream if the demand and supply gap will not be fulfilled in power sector. Nuclear energy will some how help India in meeting its electricity demand for households and Industries. There are multiple ultra mega power projects coming in India, so I feel that the continuously increasing demand will be met. The investments by the foreign players in solar power,wind electricity and biomass energy will also help India in meeting its demand. Now, almost every state has agencies to promote renewable energy resources like as WBGEDC ( West Bengal Green Energy Development Corporation), WBREDA( West Bengal Renewable Energy Development Agency), HAREDA (Haryana Renewable Energy Development Agency) and the list goes on. The question is about the timely execution of these projects. Government is doing right by putting a dead line on the solar power projects . This assures the timeliness and efficiency on the part of the developer. So we can hope as a citizen of India that the gap in infrastructure in rural and urban India will be narrowed down and hence the future will be bright.