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Building
Strong Partnerships
The
4th Indo-US Economic
Summit held in New
Delhi from 18 to
20 September 2007,
has addressed a
wide-range of issues
regarding bilateral
trade in areas as
diverse as retailing
in food sector to
real estate, road
and port development
to aviation and
aerospace. The Summit
felt that retail
business, especially
in the food sector,
can help India emerge
as a sourcing hub
besides generating
employment in rural
India. Health is
another area in
which India's capabilities
can be converted
into immense benefits.
In this context
the Summit has strongly
recommended exploration
of healthcare collaborations
with foreign entities.
It has also called
for infrastructure
improvement to boost
medical tourism,
through public-private
participation. Infrastructure
is one area that
the Summit hammered
time and again as
a path to progress.
Road, port and airport
infrastructure prominently
figured in the Summit
deliberations. Then,
there is the issue
of India strongly
pitching in for
a position as a
relocation centre
for manufacturing
activity for multinational
companies, especially
in the areas of
knowledge-based
sectors, engineering,
and R&D.
During the last
three years, the
Indian economy has
consistently registered
over 8 percent GDP
growth. In 2006-07,
the economy, the
economy grew by
9.4 percent, the
highest ever in
19 years confirming
that the Indian
economy has shifted
to a higher growth
trajectory. India
is now a $ 1 trillion
economy.
During 2006-2007,
India received Foreign
Direct Investment
(FDI) inflows of
$ 15.7 billion,
the highest ever.
FDI exceeded portfolio
flows for the first
time in the recent
history. Outward
direct investment
from India also
exhibited a significant
rise to $ 8.7 billion
during April December
2006 from US $ 1.9
billion a year ago
due to few large
cross border acquisitions
by Indian Corporate
companies. Forex
reserves have crossed
$200 billion. The
Indo-US relationship
is poised for great
transformation.
There is a considerable
degree of expectation
not only between
the two countries
but in different
parts of the world
regarding the developing
relationship between
the two largest
democracies. A strong
Indo-US partnership
has the potential
to change the power
equations in the
world. Both countries
are engaged in discussing
cooperation in a
wide range of activities
trade, energy, environment,
science & technology,
agriculture and
defence.
In the first half
of 2007, FDI has
almost trebled from
$3.6 billion during
the same period
last year to $11.4
billion this year.
This is an endorsement
of the intent of
the Government to
attract FDI to sustain
an 8.0 percent growth
for the Indian economy.
The
US is one of the
largest foreign
direct investors
in India. The
stock of actual
FDI increased
from US $ 11.3
million in 1991
to US $ 5708 million
as on January
2007. FDI inflows
from the US constitute
about 11 percent
of total actual
FDI inflows into
India.
The US is the
leading portfolio
investor in India,
as in December
2006 US based
Foreign Institutional
Investors have
made a net investment
of US $ 17.8 billion
of a total of
US $ 51.021 billion
in Indian capital
markets accounting
for 33 percent
of the total.
The US is also
the most important
destination of
Indian investment
abroad. Between
1996 and July
2006, Indian companies
invested US $
2619.1 million
in the US largely
in manufacturing
and non-financial
services.
Montek Sigh Ahluwalia,
Deputy Chairman,
Planning Commission,
inaugurated the
Summit. Dr David
C Mulford, US
Ambassador to
India, delivered
a Special Address.
William Nobrega,
President and
CEO, Conrad Group,
US made a presentation
on “Why
India will Outperform
China; Democracy,
Demographics &
Determination”.
Ms Kathryn Taylor,
Mayor of Tulsa,
accompanied by
a 20-member delegation
was the Guest
of Honour during
the session on
Civil Aviation
& Aerospace.
Deepak Pahwa,
Summit Chairman
& President,
IACC, delivered
the Welcome Address.
Prem Behl, Summit
Co-Chairman delivered
the Theme Presentation
and Vinod Madhok,
Regional President
proposed the vote
of thanks.
Summit Committee
The Summit was
led by Pahwa,
Summit Chairman
and Prem Behl,
Summit Co-Chairman,
assisted by a
Steering Committee
comprising Vinod
Chandiok, Partner,
Walker Chandiok
& Co, S. Chandrasekar,
Chairman, IACC
Infrastructure
Committee, Dr
Vivek Lall, Vice
President, Integrated
Defence Systems,
Boeing India,
S Madhavan, Executive
Director, PricewaterhouseCoopers,
Vinod Madhok,
Sr. Director (Finance),
Dalmia (Bros)
(P) Ltd, Kamal
Meattle, Chief
Executive Officer,
Paharpur Business
Centre, K N Memani,
Chairman, KNM
Advisory (P) Ltd,
Dr M K Modi, Managing
Director, Modipon
Ltd and Ron Somers,
President, US-India
Business Council.
Co-organizer
The US-India Business
Council (USIBC),
was the co-organizer
of the Summit.
The USIBC comprises
of 250 of the
largest US companies
investing in India,
joined by two
dozen global Indian
companies, whose
common aim is
to strengthen
US-India commercial
ties and deepen
two-way trade.
The USIBC has
offices in Washington,
New York, San
Francisco and
New Delhi.
Knowledge Partner
PricewaterhouseCoopers
Pvt Ltd (www.pwc.com/india)
was the Knowledge
Partner for the
Summit.
Partner Chambers
in the USA
The Alliance of
Indo-American
Chambers of Commerce
represented by
Indo-American
Chamber of Commerce
of Greater Houston
and Indo-American
Chamber of Commerce
of Oklahoma, Tulsa,
Oklahoma, were
the Partner Chambers
in the US.
Supporting Ministry
The Department
of Industrial
Policy & Promotion,
Ministry of Commerce
& Industry
was the supporting
Ministry.
The Summit brought
together Indian
and US corporate
leaders, eminent
personalities,
financial experts
and policy makers
to exchange ideas
on some of the
important sectors.
During the working
sessions held
on 19 and 20 September,
2007, presentations
were made by eminent
speakers covering
the following
themes:
FARM TO RETAIL
Chairman: Mr Prem
Behl, Co-Chairman,
Indo-US Economic
Summit
Keynote Address
Mr P 1 Suvarathan,
Secretary, Ministry
of Food Processing
Industries
Speakers
Mr Gokul Patnaik,
Chairman, Global
AgriSystems (P)
Ltd
"The New
Revolution in
Indian Agriculture"
Mr Atul Singh,
President &
CEO, Coca Cola
India
"Food Processing
Sector & Coca-Cola
India"
Mr S K Jain, Managing
Director, LMJ
International
Ltd
"The link
in between the
Farm and the Retail"
Dr Jochen Zoller,
President, Intertek
Food Services,
Intertek Group
Pic
"Innovation
in Food Quality
& Safety Services"
Mr Amit Takkar,
General Manager-Agro,
Adani Enterprises
Ltd
"Aggregation
and Logistics"
Mr Pankaj Dharkar,
National President
(HQ), ISHRAE
"Cold Chain
Management"
Mr Vinod Sawhny,
President &
CEO, Bharti Retail
(P) Ltd
"Farm to
Retail: Role of
Modern Retail"
Brig J S Oberoi,
Advisor, Wal-Mart
"Building
Strong Partnerships
- From Farm to
Retail"
Mr James F McDonnell,
Partner, PricewaterhouseCoopers,
"Farm to
Fridge: Challenges
and Opportunities
in the Retail
Supply Chain"
MEDICAL &
HEALTHCARE SERVICES
Chairperson: Dr
Shubnum Singh,
Chief Physician
Services, Max
Healthcare\
Speakers
Mr Shivinder Singh,
CEO & Managing
Director, Fortis
Healthcare Limited
"Emerging
Trends in Healthcare-The
Indian Opportunity"
Dr Rana Mehta,
Vice President,
Healthcare, Technopak
Advisors Ltd
'The New Healthcare
Consumer"
Dr Nandakumar
Jairam, Chairman,
Columbia Asia
Hospital Pvt Ltd
"Medical
Tourism-A Reality
Check"
Mr Lalit Bhasin,
Advocate, Bhasin
& Co
"Legal Issues
in Medical &
Healthcare"
Keynote Address
Mr Amarjeet Sinha,
Joint Secretary,
Ministry of Health
& Family Welfare
Dr S Ahmed, Vice
Chancellor, Hamdard
University
"Moderator
for Q&A Session"
EDUCATION MANAGEMENT
Chairman: Mr Vivek
Mehra, Executive
Director, PricewaterhouseCoopers
Keynote Address
Mr Sam Pitroda,
Chairman, National
Knowledge Commission
(through Video
Conferencing)
Guest of Honour
Dr Balchandra
Mungekar, Member
Education, Planning
Commission
Speakers
Dr Prasad Medury,
Partner, Amrop
International
"Talent Management
in an Era of High
GDP Growth"
Ms Charu Modi
Bhartia, Vice
Chairperson &
CEO, Modi Apollo
International
Group (P)Ltd
"Challenges
and Opportunities
for Foreign Education
Providers in Indian
Market"
Dr Gurinder Singh,
DG, Amity Intl'
Business School
& Pro-Vice
Chancellor, Amity
University
"Liberalization
of Higher Education
in India: A Case
for promoting
Strategic Alliances
for Quality Educations"
Mr D P Sabharwal,
Joint Director,
Ministry of Labour
"Sk;7/ Development
Programme of Directorate
General of Employment
& Training"
Mr Anand Sudarshan,
MD & CEO,
Manipal Education
"Private
Sector in Higher
Education"
Dr Pramath Raj
Sinha Founding
Dean, Indian School
of Business
"Education
Management"
CIVIL
AVIATION &
AEROSPACE
Chairman: Dr Vivek
Lall, Vice President,
Integrated Desense
System, Boeing
India
Speakers
Mr Lalit Bhasin,
Advocate, Bhasin
& Co
"Legal Issues
- Need for an
Independent Regulatory
Mechanism"
Mr Atul Sharma,
Partner, Link
Legal
"Airports
- Capacity Augmentation"
Mr Ashutosh Chaturvedi,
Executive Director,
PricewaterhouseCoopers
"Financial
/ Taxation Aspects
of Aircraft Acquisitions"
Mr John Fennerty,
Deputy Economic
Counselor, US
Embassy
Air Cdr Jasjit
Singh, Director,
Centre for Air
Power Studies
"Aerospace
Defence Issues"
Guest of Honour
& Special
Address Ms Kathryn
Taylor, Mayor
of Tulsa "Aerospace
& Energy"
ROADS,
PORTS & REAL
ESTATE
Chairman: Mr S
Chandrasekar,
Chairman, IACC
Infrastructure
Committee
Speakers
Dr A Ramakrishna,
Former President
(Operations) &
Deputy MD, Larsen
& Toubro Limited
"Roads and
Highways - the
Way Ahead"
Mr Rakesh Srivastava,
Joint Secretary
- Ports , Ministry
of Shipping
"Emerging
Opportunities
in the Port Sector,
especially with
Private Sector
Participation"
Mr Kok Huat Goh,
CEO, TSI Ventures
"Opportunities,
Challenges and
Public Private
Partnership in
Indian Real Estate"
Mr Arun Chandran,
Business Development
Manager, Parsons
Brinckerhoff India
Pvt Ltd
"Private
Sector Transit
Options"
Mr S R Bansal,
Vice President,
India Infrastructure
Finance Company
Limited (IIFCL)
"Government's
initiative through
IIFCL"
Mr Sanjiv Aggarwal,
Director, Head
- Power, Energy,
Transportation
and Metals &
Mining, Citibank
"Financing
models for infrastructure
projects"
MANUFACTURING
IN INDIA: LEADING
OPPORTUNITIES
Chairman: Mr Deepak
Pahwa, President,
Indo-American
Chamber of Commerce
Keynote
Address
Mr Ajay Shankar
Secretary, Department
of Industrial
Policy and Promotion,
Ministry of Commerce
& Industry
Speakers
Mr Bharat Bhatia,
Head, Regional
Government Relations
Office (GRO),
Motorola
"India -
A Manufacturing
destination for
Electronics Hardware"
Mr Ramesh Subramaniam,
President, Sri
City SEZ
The SEZ opportunity
for manufacturing
in India"
Mr Sunil Gulati,
Group President,
Yes Bank
"Globalization
of Indian Manufacturing"
Mr Raman Roy,
Chairman, Quatrro
BPO Solutions
(P) Ltd
"Manufacturing
in India: Knowledge-based
Manufacturing"
Mr Mohit Rana,
Senior Principal,
AT Kearney India
"Outsourcing
of Engineering,
Design and R&D
Services"
Mr Anil Varghese,
Group Head - Emerging
Geographies, Microsoft
India
"Project
Vikas-SME Manufacturing
Initiative"
Dr B V R Mohan
Reddy, CMD, Infotech
Enterprises Limited
"Globalization
of Engineering
Services - The
Next Frontier"
Mr Akil Hirani,
Managing Partner,
Majmudar &
Co
"Pertinent
Legal Issues while
Outsourcing to
Indian Companies"
Mr. Deepak Pahwa
Concluding
Remarks
Mr Jagdip Ahluwalia,
Executive Director,
Indo-American
Chamber of Commerce
of Greater Houston
Vote of
Thanks
Highlights
of the Proceedings
Farm to
Retail
• Modern
retail will result
in increased employment;
reduction in wastage
and will strengthen
India's position
as a sourcing
hub.
• Farmer
engagement by
business houses
can bring about
great change.
• Interventions
can be brought
in with a sensitive
and nuanced approach.
• While
there are issues
in farm-to-fork,
solutions are
emerging to link
farmers to modern
retail.
• Government
initiatives in
farm-to-fork retail
will help boost
the sector and
encourage best
practices in crop
management, exchange
of information
and will encourage
the use of technology
etc.
• Mega food
parks will help
provide infrastructure
for food processing.
• Food processing
sector is a priority
for the government
and retailers.
Investment in
this sector needs
to, and will,
improve.
• With best
practices in IT,
technology, crop
and yield management,
India can feed
all of her people
and the rest of
the world.
• Food safety
and quality control
are important
issues that need
to be addressed.
• There
is an absence
of a cold chain
in India. The
cold chain scenario
needs to improve
in order to facilitate
modern trade.
The distribution
centre is a key
element in the
cold chain.
• Globalization
is driving complexity
and opportunity
for retailers
and their suppliers.
Medical &
Healthcare Services
• Immense
benefits can be
achieved by the
Indian healthcare
sector through
collaboration
with global healthcare
entities, such
as training &
exchange programmes,
joint research,
continuing medical
education, prevention,
care, support
and treatment
for HIV/AIDS.
• Healthcare
consumerism is
changing globally.
The consumer today
seeks services
at standards at
par with other
service sectors
(such as hospitality).
• A reality
check on Indian
Medical Tourism:
The western market
is still elusive,
the only visitors
being regional
SAARC and African
countries. A poor
infrastructure
is the main barrier.
Thus, there is
need to accelerate
infrastructure
improvement.
• Best medical
practices, transparent
audit, elevation
of nursing and
paramedical care,
reduction in hospital
acquired infections
and a more transparent
pricing are the
initiatives required
to be taken to
capture global
market.
• Medical
jurisprudence
is still evolving
in the country.
Healthcare does
not figure in
the constitution
and judiciary
has also, more
or less, been
silent on it.
• There
is need for public
private participation
in the healthcare
sector.
• In view
of the increasing
medical tourism,
there is also
a need for a legal
framework for
treating foreign
patients.
Education
Management
There is a huge
skill shortage
in India. At the
entry level, below
20% of the students
coming out annually
are “employable”.
Hence, it is important
to focus on professional
and vocational
training.
Amarjeet Singh,
Joint Secretary,
Ministry of Health
& Family Welfare,
delivering the
Keynote Address
during the Session
on 'Medical and
Healthcare Services'
At the top management
level only 1 out
of 3 posts are
being filled which
is starting to
affect industrial
growth. Hence,
it is important
to have a lot
more executive
development programmes
and to attract
back our non-resident
Indian talent.
Some level of
regulation is
required in the
education sector
but the focus
of the government
should be on facilitation.
We have separated
R&D and education;
it is important
to bring them
back together.
Scientists should
also teach and
teachers should
also conduct research.
There is a huge
dearth of teachers
in Universities.
There are 30-40
percent vacancies
at universities
purely on numbers
and the shortage
is a lot more
on the capability
benchmark. The
reasons include
low pay scales
and lack of adequate
opportunities
in India for acquiring
of PhDs.
People targeting
educating Indian
students are finding
it easier to set
up colleges abroad
in locations like
Dubai. The suggestion
that government
consider the possibility
of an education
SEZ, where government
regulations do
not apply or do
not apply as stringently,
was voiced.
Government is
increasingly focusing
on partnerships
with the Industry
for upgradation
of ITIs into Centres
of Excellence.
Apart from providing
financial assistance,
the private sector
will be involved
in every stage,
right from forecasting
of emerging training
areas to development
of curriculum
to being guest
faculty to placement
of trainees.
Civil Aviation
& Aerospace
Generally, India
has been witnessing
revolutionary
changes in the
recent times.
We must have some
introspection
and see what we
can do more as
we have some deficiencies
in the aviation
sector which need
to be rectified.
Clearly, there
is an absence
of trained manpower
and the need to
set up institutions
with the collaboration
of foreign institutes
is imperative.
Further, the need
for regulating
airport business
is extremely critical
the regulators
should be appointed
so that businesses
know what benchmarks
are to be followed
to ensure clarity.
India has made
strides but still
a long way to
go in view of
the existing and
future demand
in this sector.
Taxation
With regard to
aircraft leasing,
on the taxation
side, one has
to keep in mind
that now there
is no withholding
tax exemption
in operating lease
transactions.
Therefore, it
becomes imperative
for businesses
to opt for a tax
optimization model.
With the recent
Supreme Court
Ruling in the
Morgan Stanley
case, the viability
of a wet lease
also needs to
be examined. One
cannot ignore
the VAT/Service
tax implications
on lease of aircraft
while looking
into a favourable
tax structure.
US view
The U.S. Government
is ready to cooperate
with India in
the aviation sector.
US technical expertise
should be brought
to India to work
with India so
that the huge
demand in the
aviation sector
can be fulfilled.
There is a lack
of financing from
the private sector
and US is trying
to play a role
in this area.
US government
believes that
India can also
grow in double
digits and match
China. Today,
the US businesses
are coming to
India for long
term profitability.
Typically US were
not involved in
the defence side.
However, now US
have started getting
involved in this
side as well Aerospace
area NASA and
ISRO are collaborating.
In the view of
US, in the next
15 years the top
three economies
would be the US,
India and China.
There is a great
opportunity in
collaboration
between India
& US.
Aerospace Defence
Issues
• Top end
of technology
is required for
the Indian defence.
• Roads,
Ports & Real
Estate
• A world
class infrastructure
is imperative
for a globally
competitive economy.
This will result
in improved quality
of life, increased
employment opportunities
and poverty elimination.
Infrastructure
is critical to
improve productivity
across all sectors.
• Road infrastructure
development is
accorded high
priority by the
Government. There
are enormous opportunities
and challenges
in the road sector.
A proposed investment
of around US $
50 billion (Rs
2, 00,000 crores)
over the next
6 years is envisaged
in the road sector.
• As far
as the ports sector
is concerned,
development of
54 new berths
in major ports
including road
and rail connectivity
is on the anvil
with an investment
of around US $
11 billion (Rs
44,000 crores)
during the next
five years. Also,
development of
187 minor/intermediate
ports, primarily
through the PPP
route is envisaged.
Active participation
of private sector
is the theme for
the future.
• In the
real estate sector,
the potential
growth is estimated
at 25-30 percent
per annum.
• Infrastructure
finance is a key
in the growth
of this sector.
There is a need
for the government
to increase allocation
for infrastructure
financing. Incorporation
of India Infrastructure
Finance Company
Limited (IIFCL)
for providing
long-term debt
to project companies
setting up commercially
viable infrastructure
projects in roads,
ports, urban infrastructure
etc. is a major
step in this regard.
• Rs. 5,000
crores have already
been allocated
by IIFCL to various
projects.
• Private
Public Partnership
(PPP) is gaining
importance due
to inadequate
budgetary resources
and aims at providing
adequate infrastructure,
improvement in
the quality of
services and reduction
in costs.
• Real Estate
sector also has
many opportunities
and challenges.
India is way short
of the demand
of the residential
units.
Manufacturing
in India: Leading
Opportunities
Relocation of
manufacturing
from overseas
to India is the
theme. India is
the manufacturing
destination for
electronics hardware.
There is a huge
opportunity to
grow. Today electronics
hardware manufacturing
accounts for less
than 1.0 percent
of India's GDP,
as against many
countries where
it is around 15-20
percent. Telecom
and electronics
manufacturing
is truly global.
No one country
is self sufficient.
Imports are a
key to promote
manufacturing
in any country.
India is on the
way to be a manufacturing
hub for electronics
hardware just
two things to
be kept in mind
infrastructure
and taxation.
Knowledge-based
manufacturing
Customer needs
are changing.
Hence, the needs
of the corporate
world are undergoing
change. Customers
are forcing the
companies to take
a re-look at their
strategies. Businesses
are facing some
realities like
focus on core
operations need
to reduce costs,
staff shortages
and technology
changes. Today,
opportunities
are created on
a global platform.
“Best Shoring”
is the mantra.
'Geography is
history' as distances
become irrelevant.
Potential Future
Scenario - Shared/support
services will
be relocated to
India and China.
Engineering
& Design and
R&D
India has potential
to emerge as a
leader in R&D
and Engineering
huge talent pool,
cost savings,
good quality levels
and capacity enhancement.
Challenges to
be addressed:
• Augment
quality and quantity
of workforce
• Enhance
manufacturing
scale & capabilities
• Develop
industry focused
clusters
• Improve
interface between
R&D providers,
manufacturing
and academia
Globalization
of Engineering
Services The next
Frontier
Why is globalization
happening?
• Trade
& investment
barriers are disappearing
• Distances
disappearing
• Material
culture is beginning
to look similar
• National
economies merging
into an interdependent
global economic
system
Collaborative
Engineering usually
follows the following
process:
• Concept
developed in the
western world
• Design
& analyses
China and India
• Production
design China,
India, Europe
• Production
- South America,
etc
• After
market where consumers
are present
Drivers
for outsourcing
80% of the product
cost comprises
design process
and testing/evaluation
hence, both of
the above can
be outsourced
Domain Expertise
in India present
in the following
sectors
• Aerospace
• Automotive
• Rail
• Semiconductors
• Consumer
Electronics
Why companies
offshore?
• Lower
cost
• Market
access
• Quality
of supply
• Government
incentives
• Time to
market
• Support
customer footprint
etc
Concurrent Engineering.
Because of time
zone difference,
workday being
24 hours, designing
is done faster.
India has a geographical
advantage here.
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