BIZ WORLD

HSBC alerts US clients having accounts in India

The HSBC Bank, which is at the core of a US crackdown on offshore tax evasion, has alerted its clients having an account in India, including Indian Americans, to consult a tax advisor after it received summons from IRS seeking its account-holders’ names.

"In the interest of our customers, we would like to highlight that if you have any concerns about your US tax reporting relating to your HSBC India account(s), you should consider consulting with a US tax advisor to determine the appropriate course of action," said Sanjay Nair, head customer propositions, retail banking and wealth management, HSBC in a letter to its customers.

HSBC in its letter, informed its American clients having bank account in HSBC India that the IRS has served a summons on the bank seeking information with regard to financial accounts of US persons maintained with its branches in India.

Goldman Sachs

upgrades India to

‘marketweight’

Goldman Sachs upgraded India to "marketweight" after keeping an "underweight" rating for over a year citing a likely improvement in the macroeconomic situation, lower oil prices, attractive stock valuations and the government's recent initiatives to push policy reforms.

The U.S. investment bank said Indian equity markets may moderately outperform the Asian region on a six months basis as the price to earnings valuations for MSCI India index are just at 14 times forward earnings, it said in its note.

Goldman Sachs had held India at "underweight" for over a year based on inflation risks, concerns over valuation and policy tightening overhangs.

"The latest move by the RBI to raise the repo rate by 50 basis points was a clear sign in our view that the central bank is vigilant in bringing down inflation expectations," Goldman said.

Despite the near-term weakness, the policy tightening was a necessary step to reigning in inflation expectations and would ultimately serve as a net positive for the Indian equity market on a medium to longer term horizon, it added.

The Reserve Bank India (RBI), which has raised rates 11 times since mid-March 2010, is expected to be nearing the end of its tightening cycle as the threat of a recession hangs over the global economy.

The investment bank also said that government reforms were showing traction citing the enhanced foreign investor limit for corporate debt, freeing petrol pricing and the recent draft released on land acquisition for industry.

Indian medical tourism industry to be worth $108 billion by 2015

India's worldclass medical technology coupled with a skilled medical workforce will ensure that the Indian medical tourism industry is worth Rs.10,800 crore ($108 billion) and that the number of foreign patients visiting the country crosses 32 lakh by 2015, a commerce chamber report said Friday.

"Emerging Trends In Domestic Medical Tourism Sector", prepared by the Associated Chambers of Commerce and Industry of India (Assocham) estimated the current worth of Indian medical tourism industry at around Rs.4,500 crore with about 8.5 lakh foreign patients annually getting treated here.

"India enjoys strategic advantage of essential resources like world-class medical technology, infrastructure and skilled medical workforce. The rapid growth will not only earn foreign exchange but will also give a huge boost to the country's health sector," said the study.

According to Assocham, top notch facilities, especially in sectors like cardiology, joint replacement, orthopedic surgery, transplants etc. at a low price, are certain key factors making India a favored destination.

"High quality medical care at a fraction of a price people would traditionally pay in developed countries is the basic reason behind this surge in number of patients flocking to India for treatment purposes," said D.S. Rawat, secretary general of Assocham.

As per the study, Andhra Pradesh, Karnataka, Kerala, Tamil Nadu, Maharashtra, West Bengal and New Delhi are fast emerging as India's best medical centers with facelifts, dental and botox treatment, tummy tucks, eye care etc. the most sought after treatments.

Further, with holistic medicinal services like yoga, meditation, ayurveda, allopathy etc. India offers a plethora of facilities difficult to match in other countries.

"Ayurveda is increasingly becoming popular as a non-surgical treatment for various ailments among the patients hailing from abroad," said the study.

India gets the most number of foreign patients from the Middle East, followed by the US, Europe and people from neighboring countries like Bangladesh, Nepal, Pakistan, Afghanistan and others.

However, Assocham added that India was facing tough competition from Australia, Belgium, Cuba, Costa Rica, Hungary among others that are actively promoting healthcare tourism.

"We propose developing ‘Multi-Specialty Health City’ on public-private partnership basis at 10 centers across the country, which will help us secure a bigger share in the industry and also encourage reverse brain drain by attracting non-resident Indian doctors, experts," said Rawat.

NRI IT professionals move back to India

With declining wages abroad, an increasing number of non-resident Indian IT professionals are moving back to their home country, says a survey.

IT and IT-enabled firms in India hired 28 percent more non-resident Indian (NRI) professionals in the first quarter of 2011-12, according to the survey conducted by recruitment consulting firm MyHiringClub.com.

Among 11 surveyed industries, IT and ITenabled services registered highest growth, with 28 percent increase year-on-year in the first quarter of the current fiscal. It is followed by pharma and healthcare, up by 20 percent, automobile and manufacturing, up by 18 percent, telecom, up by 14 percent, banking and financial services, up by 10 percent and FMCG, up by six percent.

"The high economic growth in India with many good opportunities has fuelled the NRI thought process to head back. In addition to that, many US companies are opening their offices in India and hiring more to target the growing market in Asia," Rajesh Kumar, CEO of MyHiringClub.com, said in the survey report. He said an increasing number of high value NRI professional recruitment is likely to take place in the coming years as wage gaps have declined sharply.

"Increasing number of people are now returning because now the advantages of returning back to India outweigh the disadvantages by far," said Kumar. The highest number of NRIs who returned home found jobs in Bangalore, followed by Mumbai, Delhi and Hyderabad.

Amazon set to launch services in India

World's largest online retailer, Amazon.com is set to enter India, riding on the second wave of e-commerce boom in India. Amazon is in discussions with leading Indian e-commerce players like Flipkart.com, LetsBuy.com and Exclusively.in, among others and may enter the market as early as the first quarter of next year.

Acquiring Indian players has been the dominant theme for foreign majors looking to enter Indian market with eBay acquiring Baazee.com and Groupon picking up SoSasta.com to enter the market. But sources say that Amazon is looking to set up operations on its own as its discussions with many players on acquisition front haven't seemed to work out.

"Indian players see the huge potential in the e-commerce segment here and so have so far been resistant to being bought out easily," said another source. Amazon is likely to ramp up through inorganic ways later, depending on market growth and their performance relative to competition.

Hiring is currently on in Hyderabad, Bangalore and Chennai to fill up the various positions in this team, say sources. "A team of over 200 people is being built, though all of them might not end up in the core retail arm," said another source.

Amazon is also establishing a warehouse in Mumbai, a standard step before entering the e-commerce space going by what Amazon has been doing globally. Another interesting development has been the buying of 80,000 sq ft by Amazon at SP Infocity, promoted by Shapoorji Pallonji & Co Ltd, in Perungudi in Chennai. The company already has a development center in Chennai.

India ranks 14th on FDI inflow index

India's ranking on the list of countries attracting the highest foreign direct investment (FDI) in 2010 fell to 14th position with inflows declining to $25 billion as against $36 billion last year, according to a UN survey.

The US tops the list of countries with overseas fund inflows at $228 billion, followed by the Chinese mainland, which attracted inflows of $106 billion, and Hong Kong at $69 billion. Belgium was the fourth largest FDI inflow destination at $62 billion.

According to the UNCTAD's annual investment survey -- World Investment Report 2011 -- the FDI to South Asia declined to $32 billion, reflecting a 31 percent slide in inflows to India and a 14 percent drop in flows to Pakistan. India ranked fourth on the list of top 10 recipients and sources of FDI inflows in developing Asia in 2009 and 2010 behind China and Singapore.

In contrast, inflows to Bangladesh, a rising low-cost product location, increased by nearly 30 percent to $913 million. "The desire to invest in India is still there but we need to put in a system to ensure that the deal that is given will stand for some time," said Biswajit Dhar, director general, Research and Information System for Developing Countries.

India was also the fifth largest source of funds (FDI outflow) in developing Asia, helped by a string of major acquisitions in countries across the globe between 2007- 2011.

India's industrial output rises 8.8 percent in June

India's factory output grew at a faster 8.8 percent in June compared to the levels seen in the year-ago period, primarily due to robust growth in the manufacturing sector -- especially capital goods production, according to official data release.

The barometer for measuring industrial output, the index of industrial production (IIP), had risen by a much slower 5.6 percent in May.

Manufacturing, which constitutes about 80 percent of the IIP, grew at a rate of 10 percent in June compared to 5.6 percent in the previous month, while mining output grew by a slower 0.6 percent as against 1.4 percent in May, according to a statement from the ministry of statistics and program implementation.

Electricity generation was up 7.9 percent in June, also slower than what was registered in the previous month at 10.3 percent.

According to the data, capital goods grew at a scorching 37.7 percent, while intermediate products remained almost stagnant -- their production rose by only 1.9 percent. Consumer goods output too showed a slow rise at 1.6 percent.

Consumer durables and non-durables production slowed to 1 percent and 2.1 percent, respectively.

Pandit says Citigroup now 'a different company'

Citigroup's Indian American CEO Vikram Pandit has reassured employees that notwithstanding the decline in its stock price, the bank was healthier than it was before the 2008 meltdown and its fundamentals were in good shape.

"Although the decline is difficult to watch and naturally reminds all of us of what happened several years ago, there is little similarity between now and then in both drivers and implications," Pandit told senior managers in a voice mail.

Similar comments came from the Bank of America CEO Brian Moynihan as shares of the two giants and other US financial firms bounced back from their biggest single-day drop in two years.

"Not only is it a fundamentally different time but we are a fundamentally different company," Pandit said in his message, adding that the bank has been profitable for six quarters, is making investments in every region, has derisked its balance sheet and shed $519 billion in non-core assets.

"These actions have contributed to the unquestionable financial strength Citi has built over the past several years," he said, noting the bank's strong capital ratios and liquidity base.

Pandit said what has changed this time around is that investors are looking for "return of capital" and not "increased capital levels."

"The companies which have fared better relatively are the ones who have announced plans to return capital to shareholders and our goal is still to return capital next year," said Pandit.

[BY RITU PANDEY]