BIZ WORLD

Steven Wisch Elected to USIBC Board of Directors

Steven Wisch, Founder & Managing Director of IREO and India Equity Partners (IEP) has been elected to U.S.- India Business Council (USIBC) Board of Directors. As a board member, Wisch will help the USIBC provide strategic direction for U.S. and Indian companies seeking bilateral investment opportunities and partnerships.

"With the clouds of the global recession receding, and as India's real estate sector emerges, the appointment of Steven Wisch to the USIBC board represents the increased focus that the Council is placing on real estate development," said U.S.- India Business Council Chairman Indra Nooyi.

"Steven brings a wealth of insight and knowledge of the industry to the Board and will be asked to play a leadership role in strengthening the Council's advocacy pertaining to the real estate sector."

"As a USIBC board member, I look forward to assisting Indian and U.S. companies work together across a wide range of sectors," said Wisch. "On behalf of IREO and IEP, I am excited about collaborating with my Indian and U.S. colleagues to enhance investment flows that benefit both nations."

Indo-US Services Trade May Touch $150 Billion by 2015

Indo-US services trade is likely to grow to an ambitious $150 billion in the next six years, says a Confederation of Indian Industries (CII) estimate.

At present, the country's total engagement with the US is over $60 billion, out of which about $40 billion are accounted for by the merchandise trade. Last fiscal, the services exports to the US touched $22 billion. "The fast growing services trade between India and the US, which has remained relatively stable despite global economic crisis, is expected to cross $150 billion figure by 2015 even faster than the bilateral merchandise trade," CII said quoting its study.

"Given the growing demand for services in the US and assuming that the demand for outsourcing will continue to grow from American corporations, the country should expect larger market access in this sector," said the study.

The CII study also listed several impediments to the bilateral trade. It asked the US to remove trade restrictions and production subsidies to counter the effect of the global economic crisis. Besides, the sudden withdrawal of the Generalized System of Preferences has hit-hard India's labor-intensive gold jewelry, diamond and brass products, CII said. The US is a major market for these products.

US Think Tank: India will be the Third Largest Economy by 2050

An article "The G20 in 2050,"carried in the November bulletin of the Carnegie Endowment for International Peace has forecast that "China, India, and the United States will emerge as the world's three largest economies in 2050. Their total GDP, in real US dollar terms, will be over 70 per cent more than that of the other G20 countries combined."

China will become the world's largest economy in 2032, and grow to be 20 per cent larger than the United States by 2050. Over the next forty years, nearly 60 per cent of G20 economic growth will come from Brazil, China, India, Russia, and Mexico alone (BRIC+M), the article written by Uri Dadush, director of the International Economics Program at the Foundation, and Bennett Stancil, a Fellow at the Program. "In China and India alone, GDP is predicted to increase by nearly $60 trillion —the current world GDP — but the wide disparity in per capita GDP among these three will persist," they noted.

India's annual average GDP growth between 2009-2050 is predicted to 6.19 per cent, and these emerging markets will not rise among the world's richest countries in per capita terms- their average income in 2050 will still be 40 per cent below that of the G7 nations presently. India's Purchasing Power Parity (PPP) will be 97 per cent as large as that of the United States by 2050. India is expected to become the world's most populous nation in 2031— and an average exchange rate appreciation of 0.9 per cent per year will push annual GDP growth to an average of 6.2 per cent, according to the study.

Google Mauled by Indian Newspaper Lion's Den

Though search engine giant Google came in peace to a gathering of world newspaper editors and executives in India, it was soon embroiled in a battle over internet copyright. "Please don't shoot. I am unarmed," Google senior vice president David Drummond told participants at the World Newspaper Congress, where his company has been vilified as a parasite sucking the life blood from mainstream journalism.

Addressing the final session of the three-day congress in the southern city of Hyderabad, Drummond, who is also Google's chief legal counsel, sought to counter the charges of "stealing" stories from online newspaper websites and not sharing advertising revenue. "Talk of us as ‘vampires' and ‘kleptomaniacs' is wide of the mark," said Drummond, who argued that Google had taken various steps to address newspaper industry concerns that its content was being exploited online.

On December 8, 2009, Google announced it would let publishers set a limit on the number of articles people can read for free through its search engine, and the following day it launched a "news-spe- cific crawler" that lets online media automatically keep stories, photos or video out of its index.

India's Defense pact with Russia to boost defense capability

India has voiced confidence that its agreement with Russia on a 10-year military and technical cooperation from 2011 would help enhance the operational capability of its defense forces in the next decade.

The agreement which was among the three defense pacts signed between India and Russia after the annual summit talks between Prime Minister Manmohan Singh and Russian President Dmitry Medvedev provides for acquisition, licensed production, upgrades and modernization of defense equipment as well as the development of new and advanced weapon systems.

"The agreement would help enhance operational capability of Indian Defense forces in the next decade by providing various Defense equipment systems," Foreign Secretary Nirupama Rao told newsmen wrapping up the prime minister's talks with the Russian leadership that also included prime minister Vladimir Putin, who as the earlier Russian President sowed the seeds for Russia's strategic partnership with India. "... (it) will also facilitate capacity development of the Indian Defense Industry," she said.

India Will Test World's Third Largest Solid Rocket Booster

The Indian space agency is expected to take a major step in January towards realizing its next generation rocket by groundfiring the world's third largest - in terms of fuel mass and length - solid rocket booster developed in-house. An Indian Space Research Organization (ISRO) official said: "The large solid propellant booster project was taken up nearly a decade ago and will achieve its first milestone next month."

Recently, ISRO Chairman K. Radhakrishnan said the static testing of the booster will happen soon.

The 200-ton solid propellant rocket booster - designed to power ISRO's next generation (geosynchronous launch vehicle) GSLV Mark III - will be ground tested at India's space port Satish Dhawan Space Centre, Sriharikota, 80 km from here. The stage is expected to burn for 103 seconds.

In terms of fuel mass and length GSLV Mark III's 200 ton, 25 meter long solid boosters will rank after US Space Shuttle's booster (fuel mass of 440 ton, 37.8 meter) and Europe's Ariane (fuel mass 240 ton, length 31.6 meter).

Measured in terms of diameter ISRO's new solid booster will rank second in the world with 3.2 meter while that of Space Shuttle and Ariane measure were 3.6 meter and 3.05 meter respectively.

India Surge 61%

New car sales in India rose 61 per cent year on year in November, helped by a low base level in 2008 and government stimulus to encourage spending, industry data shows.

The Society of Indian Automobile Manufacturers (SIAM), which issued the data, said total sales were 133,687 units as India's economy continues to pick up speed after the global financial crisis.

The vehicle market was extremely depressed last November, falling 20 per cent from 2007 levels, during some of the worst moments in the crisis as stock markets plunged worldwide and consumer confidence dived.

Since then, the global economy generally and India's economy in particular has rebounded, helped by vast government stimulus packages and low interest rates that have encouraged investment and spending.

"We will have to see the actual scene when and if the government withdraws the stimulus packages," said SIAM director Sugato Sen.

Sales at Maruti, the country's top passenger carmaker, climbed 57 per cent during the month, while those of Hyundai jumped 93 per cent and Tata Motors Ltd posted a 48 per cent rise.

Telangana Decision Hits Businesses

A unit of global drugmaker GlaxoSmithKline temporarily halted operations in Andhra Pradesh state as the fallout from a government plan to carve up the southern state mounted.

India's Congress-led government approved a plan on December 10, 2009, to create a new state called Telangana out of Andhra Pradesh, home to high-tech Hyderabad city, after more than a week of violent protests and a hunger strike by a leading politician.

But fresh protests and the mass resignation of local state lawmakers may still force the government to backtrack, fearing not only a political backlash, but also economic repercussions.

GlaxoSmithKline Consumer Healthcare, a unit of the global drugmaker, said on Friday it was temporarily closing its factory in the state due to the political protests. Shares in several Indian realty firms based in Hyderabad fell, and a local branch of HSBC bank was attacked by a mob of protesters who have shut down the city for more than a week.

Investors worry whether the tug-of-war over the creation of a new state will affect investments, as well as where it will leave the status of Hyderabad, home to companies like Microsoft, Google and Dell.

The central government in New Delhi has not yet decided the fate of Hyderabad, once seen as an example of Indian cities fast becoming hubs for global companies looking to cut costs.

"Even though it's been years in the making, the decision (to split the state) was quite sudden, so there's been quite a bit of turbulence and uncertainty," said Dipankar Mitra, an economist at Noble Group. "That doesn't send very good vibes to investors."
[Gauri Kumar]