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10/2015

INDIA Contact: Rajesh Nath, Managing Director Jamly John, Regional Manager - West

Please Note:

Telephone: +91 33 2321 7391

1 crore = 10 000 000

Fax: +91 33 2321 7073

1 lakh

E-mail: [email protected]

1 Euro = Rs.74

= 100 000

The Economic Scenario

Economic Growth India has moved up one position to become the world's seventh most valued 'nation brand', with an increase of 32% in its brand value to $2.1 billion. The US remains on the top with a valuation of € 17 billion ($19.7 billion), followed by China and Germany at the second and the third positions respectively. The UK is ranked 4th, Japan is at fifth position and France is sixth on the list. While India and France have moved up one position each since last year, all the top-five countries have retained their respective places. However, the surge of 32% in India's 'nation brand value' is the highest among all the top-20 countries on the list. China has retained its second position despite a decline of 1% in its brand value to € 5 billion ($6.3 billion). This is being measured by the strength and value of the nation brands of 100 leading countries using a method based on the royalty relief mechanism employed to value the world's largest companies. The nation brand valuation is based on five year forecasts of sales of all brands in each nation and follows a complex process. The Gross domestic product (GDP) is used as a proxy for total revenues. It is understood that India's 'Incredible India' slogan has worked well, while Germany suffered due to the Volkswagen crisis. About the US, the report said it remains a powerful brand with an inviting business climate. However its value comes in large part from the country's sheer economic scale. The US' world-leading higher education system and the soft power arising from its dominance of the music and entertainment industries are significant contributors too. This soft power will help the US to retain the most valuable nation brand for some time after China's seemingly imminent rise to become the world's biggest economy. China's recent stock market turbulence and slowing growth will also extend the US' tenure of the top spot. Among BRICS nations, India is the only country to have witnessed an increase in its brand value with all others - Brazil, Russia, China and South Africa - seeing a dip in their respective brand valuations. India is the second most valued among these emerging economies after China, followed by Brazil, Russia and South Africa. VDMA-Newsletter “Indien ”, Ausgabe 10/2015 Kontakt: Oliver Wack, Telefon: +49 69 6603-1444

Indian Economic and Industrial Scenario, Oct 2015

VDMA INDIA Office

There's more mixed news for the economy from the high-frequency indicators. Core sector growth accelerated in September to a four-month high, data released by the government showed, and the country's biggest car manufacturer Maruti Suzuki reported strong numbers in October. The good news was tempered by a slowdown in manufacturing to a 22-month low in October. The Manufacturing Purchasing Managers' Index declined to 50.7 in October from 51.2 in September. The Index of Eight Core Industries expanded 3.2% in September compared with growth of 2.6% in the previous month as outsized gains in fertilisers masked a contraction in three sectors that are part of this measure. Growth in the April-to-September period was 2.3%, which was less than 5.1% in the corresponding period of the previous year. Maruti sold over 30,000 more cars in October this year compared with the same month last year, an increase of 29.1%. The data typify the mixed picture of economic recovery presented by the indicators, with a weak PMI and corporate investment countering upbeat indirect tax collections and rising industrial growth. Industry is improving but at a gradual pace because rural demand is not picking up. Industry is growing only on urban demand. Maruti turning in a good set of numbers shows that the consumer durables segment will be good. India's industrial output expanded at an almost three-year high rate of 6.4% in August and the core sector numbers suggest it could pick up. The core sector index has a 38% weight in the Index of Industrial Production. Most independent economy watchers have lowered their estimates of India's growth in the current financial year to about 7.5% from almost 8% because of the mixed evidence and the weakness in the rural economy following successive weak monsoons. Although investment is showing signs of incipient recovery, a full-blown investment recovery will take anywhere between 12-18 months. The decline in PMI was largely because of weaker output following a slower rise in new orders. Rates of expansion in both production and order books were the weakest in their current 24-month sequences of growth. PMI data for October show a further loss of growth momentum across the Indian manufacturing economy, with a slower rise in new business inflows resulting in a weaker expansion of output. Core sector growth was driven by an 18.1% spike in fertiliser production and a 10.8% rise in electricity generation. The key cement and steel sectors shrank 1.5% and 2.5%, respectively, taking some of the sheen away from the headline numbers. Coal production recovered marginally to post a 1.9% growth while natural gas production was up 0.9%. Crude production was flat while refining showed a marginal 0.5% growth. The government has cleared 16 foreign investment proposals, including that of HDFC Capital and Ageon Religare Life Insurance Company, amounting to € 638 million (Rs 4,722 crore). The investment proposals were approved following the recommendation for the same by the Foreign Investment Promotion Board (FIPB). However, it rejected 8 proposals including that of Cipla Health Limited and Apollo Hospitals Enterprise Limited. The Board cleared proposal of HDFC Capital Advisors Limited which alone entails investments of € 324 million (Rs 2,400 crore). HDFC Fund proposes to make investments in equity, equity linked instruments, redeemable preference shares, non-convertible debentures and other debt securities of listed or unlisted investee companies engaged in real estate construction development projects which are permitted under the SEBI AIF Regulations as a Cateqory II AIF. Besides, Ageon Religare Life Insurance's proposal worth € 76 million (Rs 559.96 crore) was cleared by FIPB. The approval was sought for the transfer of shares to Aegon India Holding thereby raising the foreign shareholding from 26% to 49%. Among others, Sun Pharma Research Advanced Company Ltd's proposal worth € 34 million (Rs 250 crore), Synergia Life Sciences Pvt Ltd € 5.4 million (Rs 40 crore) and the post facto approval for Aditya Birla Nuvo's € 51 million (Rs 377 crore) plan were cleared during a meeting held at end of September.

VDMA-Newsletter “Indien ”, Ausgabe 10/2015 Kontakt: Oliver Wack, Telefon: +49 69 66031444

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Indian Economic and Industrial Scenario, Oct 2015

VDMA INDIA Office

Industry Scenario Steel

Tata Steel may scale up Kalinganagar capacity to 16 mtpa by 2025 Tata Steel intends to ramp up capacity of its Kalinganagar steel making facility to 16 million tonne per annum (mtpa) by 2025 from six mtpa proposed originally. The total cost of putting up a 16 mtpa facility would be around Rs 1 lakh crore compared to € 6081 million (Rs 45,000 crore) estimated for the 6 mtpa plant. In the first phase, Tata Steel is commissioning 3 mtpa capacity. This unit is scheduled to be inaugurated in mid November this year. Iron ore requirement for the first phase of the steel plant is pegged at 5 million tonne per year. To firm up raw material supplies, Tata Steel has drawn up a plan to invest € 311 million (Rs 2,300 crore) on scaling up capacity of its captive mine- Khandabandh iron ore deposits to 5 mtpa. The expansion is expected to be completed by 2017. Presently, iron ore from Joda mines will cater to our first phase requirement till 2017. The Khandabandh mines will meet our requirement from 2017 till 2020. Beyond that, they will have to look for more mines as their steel making capacity would go up to six mtpa. The investment for the first phase of Tata Steel's Kalinganagar project is pegged at Rs 25,000 crore of which the steel maker had already invested € 2973 million (Rs 22,000 crore). Different units of the Kalinganagar plant would commence commercial production sequentially. Tata Steel has already started production from its coke ovens last month. The greenfield steel plant would have coke production capacity of 1.5 mtpa. The steel firm has been alloted 3,470 acres of land for the Kalinganagar project. The plant would roll out high end flat steel products

Iron, steel exports plunge 41% to $4.57 billion in September Iron and steel exports plummeted by 41% to € 4 billion ($4.57 billion) in September against € 7 billion ($7.69 billion) a year ago, hit by a subdued economic sentiment mainly in the commodities market. The year on year September fall in iron and steel is more than cumulative decline during April-September period against the comparable months of 2014. Over 40% drop in India's exports of primary iron and steel has come about on the back of a massive fall in shipments to the US, Italy, UAE, Bangladesh and Nepal among others in September this year. However, some consolation was provided by Belgium, China and Iran for the month even as the setback in these exports has dealt a severe blow to the country's total engineering exports. Iron and steel along with non-ferrous metals form a major component of the total exports from the engineering sector. Essentially, the fall is seen more in value terms because of a steel drop in international prices while the volume is also under pressure due to subdued sentiment in the entire commodity space. The big fall came about as shipments to the US dropped by 77% to € 17 million ($19.81 million) in September from € 74 million ($84.86 million) in the same month last year. Likewise, export of these basic material to Italy fell by 57.23% to € 18 million ($21.14 million) from € 43 million ($49.42 million). To Nepal, the fall was even steeper by 85.58% to € 6 million ($7.27 million) from € 44 million ($50.44 million). The consignments to Thailand were down 85.43% to € 4 million ($4.74 million) from € 28 million ($32.53 million). Some solace was visible, though Belgium where exports of iron and steel increased to € 32 million ($36.22 million) from € 15 million ($17.62 million) rising by over 105% and China to € 5 million ($6.12 million) from € 5 million ($5.71 million), increasing by 7%. To Iran, the shipments went up by 9% to € 26 billion ($29.61 million) from € 24 billion ($27.08 million).

Rama Steel starts production at Khopoli plant Steel pipes and tubes manufacturer Rama Steel Tubes Ltd (RSTL) has commenced commercial production at its Khopoli plant, near Mumbai, doubling its capacity to 72,000 tonnes of mild steel tubes output. The Khopoli plant which is the company’s latest addition to its two existing plants at Sahibabad near Delhi enjoys the economic advantage of low transportation cost benefiting exports as well as distribution in the western and southern pipe markets in India. Adding the plant at Khopoli was a decision based on anticipated benefits for the growth and profitability VDMA-Newsletter “Indien ”, Ausgabe 10/2015 Kontakt: Oliver Wack, Telefon: +49 69 66031444

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Indian Economic and Industrial Scenario, Oct 2015

VDMA INDIA Office

of the company. Their exports already constitute 30-35% of the turnover and markets around Mumbai and South India have tremendous demand for hollow sections and tubes. RSTL reported gross sales of € 7 million (Rs 49 crore) for the first quarter ended June 2015. The company has set up its overseas arm, RST International Trading FZE, in Dubai with the objective of exploring international business in steel products, concentrating its business in Africa, mainly in Ethiopia, Sudan, Somalia Ghana and UAE.

Defence manufacturing unit by UK-based company to kickstart Tata Steel Gopalpur SEZ Tata Steel's proposed SEZ and Industrial Park at Gopalpur in south Odisha is poised to take off with the ground breaking ceremony for a defence equipment unit by Meggit Corporation of the UK at the location. Meggit Corporation is setting up an assembly facility for air defence target system at Gopalpur in association with its Indian partner Sure Safety Solution. The project, estimated to cost € 7 million (Rs 50 crore), is being set up under the 'Make In India' programme of the India government, one of whose objective is to manufacture various defence equipment within the country. The project will come up in an air-conditioned shed on 5 acres of land within the Tata Steel Industrial Park and start production from January, 2016. They have a big responsibility to provide the company all facilities (including building of the shed) so that the project becomes production worthy in two months' time. It is hoped that with the establishment of the defence equipment unit at Gopalpur by the UK based company, it would attract other similar investors, particularly from Europe and South East Asia, to the area. They plan to develop this SEZ and Industrial Park as a defence and electronics hub. It may be noted Gopalpur already has India Army Air Defence College in its vicinity which will come in handy to test the defence equipment.

Automobile

Mercedes-Benz to expand manufacturing in India; seeks government support on tax concessions Mercedes-Benz India is looking at expanding local manufacturing, a plan that though depends on getting support such as tax concessions from Maharashtra, the state where its factory is located. The first product the luxury car maker launched in India since October is the GLE-Class, is also the first model that the company is making locally from day one. Local production of the other seven models it makes in India started at least six months after the launch. Local production allows the company to make its vehicles more affordable — vehicles imported as fully built attract between 60% and 100% import duty — thereby helping sell more here. In 2007, Mercedes acquired 100 acres in Pune where it has so far invested € 135 million (Rs 1,000 crore). In June, it doubled production capacity to 20,000 units a year and the plant became the only factory outside Germany to produce the super luxury Maybach S500, which, priced at € 0.23 million (Rs 1.67 crore), is the costliest car to be made in India. It is now looking at the prospects of exporting from India, too. They have the capacity (in India), but there needs to be a free trade agreement or some sort of agreement that would make exports financially viable. Currently, 80% of the cars sold in India by Mercedes are produced locally. As much as 60% of the components used in these are sourced locally. Between January and September this year, the company sold 10,079 vehicles in India compared with 7,529 units in the year-earlier period, recording growth of 34%. In 2014, it sold 10,201 units. The carmaker expects strong double-digit growth next year as well. Among Mercedes' 22 product offerings, eight are locally produced. The C-Class, E-Class, SClass, CLA, ML and GL contribute more than 70% of the total sales in India, while new generation cars - A-Class, Bclass, CLA and GLA - account for 20-25%. Mercedes-Benz India recently launched a new nomenclature for its SUVs. From now on, all SUVs will start with GL, followed by the platform name. So, GLE means the SUV is based on the E-Class platform. The SUV will take on the likes of the BMW X5 and Audi Q7. VDMA-Newsletter “Indien ”, Ausgabe 10/2015 Kontakt: Oliver Wack, Telefon: +49 69 66031444

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Indian Economic and Industrial Scenario, Oct 2015

VDMA INDIA Office

The German luxury carmaker has launched 13 products this year so far in India and two more are expected to come before the end of the year.

Bharat Stage-V emission norms for vehicles across India from 2019 India will implement the Bharat Stage-V, or BS-V, emission norms for vehicles across the country from 2019. This ends the debate around the oil ministry's push to directly progress from the current BS-IV to BS-VI norms to speed up the green initiative. The BSVI emission norms for four-wheelers shall be implemented from 2023. Refiners were more or less in sync with the oil ministry's idea to upgrade directly to the BS-VI stage as the investments needed to upgrade to stage V or VI were similar and by first upgrading to V and then to VI would have meant additional cost. But carmakers were staunchly opposed to it, citing heavy investments in a shorter timeframe. This is why the road transport and heavy industries ministries have been opposing skipping the stage-V norms. Bharat stage norms, based on European regulations, are emission standards decided by the government to regulate the amount of air pollutants from vehicles. Following a rapid rise in air pollution that's choking cities and fuelling green activism, there has been pressure on the government to speed up efforts at improving the fuel quality. The emission of Sulphur, a key pollutant, from BS-V fuel is just a fifth of that in BS-IV. According to the roadmap laid in the Auto Fuel Vision and Policy 2025, released last year, the BS-V norms were to be implemented between April 2020 and March 2021 for all fourwheelers. The BS-VI was to be rolled out from April 2024. The auto fuel policy also estimated the capital cost for refiners across the country to upgrade to BS-V norms at Rs 80,000 crore. The penetration of BS-IV motor spirit or petrol in the domestic market was 24% and that for BS-IV grade diesel was 16% in 2014, according to auto fuel policy report. India introduced BS-IV auto fuel in 13 cities in 2010 and has decided to extend it across the country by April 1, 2017, in phases.

India to be global manufacturing hub for new Maruti Baleno More than three decades after it started operations, Maruti is all set to export a `Made in India' vehicle to Japan, which will be sold by its parent Suzuki. Japan's Suzuki which controls 56% stake in Maruti, has decided to make India a global manufacturing hub for its upcoming premium compact car `Baleno', which will be exported to over 100 countries, including the Western European nations. Baleno will be Maruti Suzuki's first attempt in the premium compact segment and made a debut in India in October. It was unveiled at the Frankfurt Motor Show in September. Baleno will compete mainly with Hyundai's Elite i20 and Honda's Jazz and will have a 1.2litre petrol engine (manual and automatic variants) and 1.3-litre diesel engine. This will be the first instance of Maruti - which contributes 40% to Suzuki's global sales volume and one third to its revenues -supplying a car to its parent for and manufacturing teams of the company see this as a "big achievement, thus a vehicle made at Manesar factory will be sold in Japan. Apart from Japan, other countries where the Baleno will be sold include, Italy , France, Germany , Netherlands, Belgium, Denmark and Spain. In South America, it will be sold in Chile, Pa raguay and Colombia. After S-Cross, Baleno will be the second car to be sold through Maruti's premium retail network `Nexa'. Baleno will be manufactured on a new platform by Suzuki's engineers and Kalsi said Maruti's engineering and R&D teams have been involved in the model's development.

Magneti Marelli opens new plant for AMT gearboxes in India Italian auto components major Magneti Marelli has opened a new manufacturing facility in India to meet the growing demand for automated manual transmission (AMT) gearboxes. Magneti Marelli Powertrain India, a joint venture between Magneti Marelli, Maruti Suzuki and Suzuki Motor Company since 2007, has inaugurated a new industrial site for the production of robotised gearboxes for automobiles, also called AMT. The company has invested Rs 150 crore on the plant which has come up at Manesar. It covers 7,500 sq mt and houses production lines and offices. When fully operational, the plant will employ around 115 people and will have a production capacity of 2,80,000 robotised gearbox kits per year. The facility was created to address the growing market success that the AMT component has had in India over the past two years and to meet the demand from local carmakers regarding additional future implementations. The company provides AMT gearboxes to various popular models like Maruti Celerio, Maruti Alto, Tata Nano and Tata Zest in India. Magneti Marelli has seven plants and a research and development (R&D) centre in the New Delhi area, operating in the powertrain, electronic systems, exhaust systems among others. It also has three plants and a R&D centre in the Pune area operating in the lighting, powertrain, exhaust Systems and shock Absorbers sectors. The company also has a plant in the Chennai region, operating in the exhaust systems sector.

VDMA-Newsletter “Indien ”, Ausgabe 10/2015 Kontakt: Oliver Wack, Telefon: +49 69 66031444

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Indian Economic and Industrial Scenario, Oct 2015

VDMA INDIA Office

Power

NTPC incorporates arm to run and expand Patratu power plant State-run NTPC has incorporated Patratu Vidyut Utpadan Nigam Ltd in a joint venture with Jharkhand Bijli Vitran Nigam Ltd for operating the Patratu thermal power plant in the state. A subsidiary company of NTPC Limited (NTPC) has been incorporated in the name 'Patratu Vidyut Utpadan Nigam Limited' in October in joint venture with Jharkhand Bijli Vitran Nigam Limited (JBVNL). The subsidiary has been incorporated to acquire, establish, operate, maintain, revive, refurbish, renovate and modernise the performing existing units and further capacity expansion of Patratu Thermal Power Station in Ramgarh district of Jharkhand. NTPC shall hold 74% of the equity share capital in Patratu Vidyut Utpadan Nigam Limited and balance 26% shall be held by JBVNL.

Plant to come up in Madhya Pradesh to generate power To generate eco-friendly power from waste and produce organic fertiliser, a plant will be set up in 50 acre land in Baghelkhand area of Madhya Pradesh. An action plan has been chalked out to generate energy and organic fertiliser from waste in Rewa and Satna Municipal Corporations and Nagar Panchayat areas. For the purpose, 50 acre barren land has been selected at Bandha village on the outskirts of Rampur Baghelan area in Satna district to set up the plant, on the initiative of Energy Minister. The urban development and environment departments are finalising this cluster-based project. The waste from Rewa and Satna urban bodies will be brought to the plant for producing energy and organic fertilisers. At present, this project is operating in Koshta village of Rewa district for which only 6.41 hectare land is available. In view of the shortage of space there, it has been decided to set up the new plant at Bandha village in Satna district under Solid Waste Management Scheme

Sany group, Andhra sign MoU; to invest in wind projects China's construction equipment manufacturer Sany Group has entered into an MoU with Andhra Pradesh government for investment of € 541 million [$ 600 million (Rs 4,000) crore] to set up wind power projects for the period 2016-2020 to establish wind power projects. These projects will generate 1,100 million units of wind/ renewable energy annually. The Group is also looking forward to explore opportunities to manufacture some wind turbines components in the state. Sany Group had said that it would invest € 2703 million [$ 3 billion (Rs 20,000 crore)] to develop 2,000 MW of renewable energy projects in India.

Bharat Light & Power sets up joint venture with Norway's Statkraft Renewable energy firm Bharat Light & Power (BLP) has entered into equal joint venture with Norwegian power company Statkraft for providing distributed solar energy solutions in India. Statkraft BLP Solar Solutions Pvt Ltd (SBSS), the 50:50 JV, will provide industrial and commercial consumers with both rooftop and ground mounted solutions with world class technology and execution. SBSS will provide a variety of financing structures, whereby consumers can convert their solar capex into an attractive per unit cost of solar energy, enabling consumers to reduce their carbon footprint and lower energy costs. By providing distributed solar energy solutions on a per kWh basis, storage and micro grid solutions, they will transform the way power is generated and consumed in India. This will go a long way in supporting the government's mission of 24/7 power for all by 2019. The government has set a target of achieving 100 GW of solar and 60 GW of wind based power generation capacities by 2022. It is estimated that 40 GW will be distributed solar energy. The partnership between Statkraft and BLP is committed to contribute to the clean energy drive that it intends to bring to India the latest advancements in renewable technology, competitive financing structures, low cost solar energy, and global best practices in engineering design and project development. BLP is a renewable energy generation and technology firm. It has three verticals. The company is focusing on the wind and solar sectors. It has about 800 mw of wind farms in operation and under development. VDMA-Newsletter “Indien ”, Ausgabe 10/2015 Kontakt: Oliver Wack, Telefon: +49 69 66031444

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Paper & Printing

Paper sector may show improvement in profit in second half of FY'16 The profitability of paper companies is likely to rise in the second half of the ongoing fiscal helped by the improved cost structure. The pricing environment in the paper sector did not improve in the first half of FY 2015-16 due to an unfavourable domestic demand-supply balance and a high level of imports. The profitability of the companies should show an improvement in the second half due to improved cost structure. The sector continues to face a muted pricing environment in uncoated writing and printing paper as the domestic overcapacity added in the past has not been fully absorbed. This has also led to a spike in inventory levels. The industry is facing import pressures in certain segments. The realisation in the coated writing and printing paper segment has marginally declined, driven by the increase in imports from Asian countries such as China and Indonesia. Dynamics in certain segments such as newsprint and coated paper continue to be driven by import price parity. Imports at aggressive pricing could lead to further pricing pressure in these segments. However, the recent rupee depreciation is likely to help the companies withstand these competitive pressures to an extent. The input pressures, primarily due to the increase in domestic wood prices faced by paper companies over FY 2012-14 have subsided. Wood prices, which have almost doubled during the period, more or less stabilised in FY15. Farm forestry by paper mills and high wood prices have led to the increased availability of wood in nearby areas, thereby reducing average procurement costs for mills. Wood prices are likely to stabilise or reduce from the current levels. In addition, lower fuel costs are likely to be beneficial for paper companies. The paper makers have been focusing on improving operational efficiency through capex or process improvement during the downturn. However, they have in the past been squeezed both on the pricing and cost fronts and as such could not really gain from the operational efficiencies developed. An improved cost structure along with relief on the cost front would help improve the profitability of sector companies, even with muted demand growth.

BILT introduces Medi Print for pharma, Bible printing Ballarpur Industries, popularly known as BILT, one of the largest paper manufacturers in the country, which also ranks among the top 100 pulp and paper companies in the world, introduced the 40gsm Medi Print brand at a recently held exhibition in India. As its name suggests, the paper is of lower grammage (thinner) and is targeted for the pharmaceuticals print market, as well as the Bible printing segment. In the pharmaceuticals industry, globally, India has the third place in terms of volume and 14th in terms of value. The total turnover of India’s pharmaceuticals industry between 2008 and September 2009 was € 18 billion ($ 21.04 billion). While the domestic market was worth € 12 billion ($13.8 billion) as of 2013, it is expected to reach € 43 billion ($ 49 billion) by 2020. As per estimates, the growth in Bible printing is in double digits. According to the Bible Society of India, the complete Bible is available in 65 Indian languages. Portions of the Bible are available in 204 Indian languages. As on 31 December 2010, at least some portion of the Bible is available in 2,527 languages of the world. The complete Bible is available in 469 languages across the world. ITC is the sole supplier of the BILT paper to the Bible Society of India, which is the largest publisher of the Bible in India, meeting 90% of the demand. Other manufacturers in the Bible paper segment include ITC in India and Tervakoski Mill in Finland.

Indian pulp and paper industry delegation visits Sweden A delegation, representing the Indian pulp and paper industry, under the aegis of the Indian Paper Manufacturers Association (IPMA), visited Sweden from 27 to 30 September 2015. The delegation was invited by the Swedish Pulp & Paper Technology Group and Business Sweden, to discuss the potential areas for Indo-Swedish collaboration. The 19-member team comprised of senior representatives from the member mills of the Indian Paper Manufacturers Association, including BILT, ITC, JK, Seshasayee, Star, TNPL and Yash. There were also representatives from other paper mills, such as Rama, Shreyans, Khanna and Sripathi. VDMA-Newsletter “Indien ”, Ausgabe 10/2015 Kontakt: Oliver Wack, Telefon: +49 69 66031444

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Indian Economic and Industrial Scenario, Oct 2015

VDMA INDIA Office

The IPMA, business meetings were held with Swedish companies with interests in paper and pulp. The companies which met the Indian delegation include Innventia, Elof Hansson, Clean Combustion, Alfa Laval, Lorentzen & Wettre, Andritz, MoRe Research, UMV, Angpanneforeningen (AF), Valmet Technologies, Akzo Nobel Pulp & Performance Chemicals, SWECO, and BTG Instruments, among others. During discussions with their Swedish counterparts, the Indian representatives identified a number of avenues where both the countries can collaborate. These include new plant and equipment; rebuilding of paper machines; energy efficiency/conservation; environment-friendly green technologies; new technologies like nano-cellulose, biorefinery, carbon fibre from lignin, etc; collaborative R&D; plantation of high yielding, short maturity pulpable wood species; improved recovery; sorting and utilisation of waste paper; and CDM projects; among others.

Ports & Shipping

Dhamra Port to get non-government Railways status The Adani Group-operated Dhamra Port Company Ltd (DPCL) in Odisha will soon get the status of 'Non-Government Railways', the second such private company in the country. DPCL, a wholly-owned subsidiary of Adani Ports and Special Economic Limited (APSEZ), signed a commercial agreement with the Ministry of Railways at its East Coast Railway Headquarters. The agreement accords the status of Non-Government Railways (NGR) to DPCL under the Indian Railway Act, 1989. This was the first of its kind NGR status granted in the state of Odisha and only the second one in India. Non-Government Railway Policy promulgated by the Centre is a recent concept by which Indian Railways encourage its strategic partners like ports and industries to invest in creating additional railway infrastructure and as a result, connectivity to hinterland can be extended to major Railway network. Since Railway connectivity is crucial to economic development, the Centre came forward with an ambitious plan under 'Participatory Policy for Capacity Augmentation and Increasing Rail connectivity' in Public Private Partnership (PPP) mode. DPCL, with help from the Odisha government, opted for the scheme and constructed 62.5 km of railway tracks, which was the longest ever Non-Government Railway System constructed by any private organisation. After acquisition by APSEZ, Dhamra Port was expecting to increase its capacity to more than 100 MMT per annum within a few years, by doubling the railway line and completing its second phase of expansion, the release said. Through this initiative, Dhamra Port shall be able to connect the major portion of Bhadrak district with the National Railway Network.

New rules to boost shipping fleet; may dent foreign shippers State-owned firms may have to give half their freight business to local shippers to help rescue an industry battered by the global commodities downturn. Cabinet could as early as next month consider making it mandatory for state-owned oil, steel, coal and fertiliser importers to route at least half of their cargoes through local shippers as part of a broader agenda of Prime Minister to shore up and protect the ailing sector. New Delhi is proposing importers sign 5-year contracts with local shipping firms in a move designed to shift freight worth billions of dollars to Indian flag carriers and help boost fleet companies like Shipping Corp of India (SCI), Mercator Ltd, Great Eastern Shipping Co and Essar Shipping. In 2013-14, India paid about € 50 billion ($57 billion) in freight payments to foreign firms. India's total international trade increased by more than 230% between 2000 and 2014, to 811 million tonnes last year but domestic shippers saw their trade rise by just 26% as they were edged out by international firms able to offer lower rates and quicker turnaround times. The proposed measures are designed to reverse that decline and encourage investment and expansion. Assured employability will encourage operators to increase Indian tonnage, and linking freight to international benchmarks. A key part of the new proposal is to link the freight rates charged under the contracts to global benchmarks such as Clarksons and World Scale in order to bring greater transparency to rate setting and avoid local shippers setting up cartels. The move fits Modi's 'Make-in-India' push toward creating skilled jobs for millions of young Indians. As more Indian ships start participating in the regular carriage of Indian imports, other ancillary industries such as bunkering, ship repair and even ship building will grow. Most VDMA-Newsletter “Indien ”, Ausgabe 10/2015 Kontakt: Oliver Wack, Telefon: +49 69 66031444

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VDMA INDIA Office

foreign-flag vessels calling on Indian ports bunker, or re-fuel, in Singapore or Khor Fakkan in the United Arab Emirates, and don't hire Indian seafarers. As of now, the (Indian) fleet is not enough to meet our requirements, but the shipping ministry has said companies will raise funds on the back of 5-year contracts to buy more vessels. Major international shippers who have increased trade into India over the past decade stand to potentially lose out if the new measures are implemented. Non-domestic shippers carrying Indian freight include Frontline Ltd, Navig8 Chemical Tankers Inc , Hyundai Merchant Marine Co Ltd, Olympic Shipping , BW LPG and Avance Gas Holding , crude buyers and shipping.

Agreement between India and Egypt on Maritime Transport The Union Cabinet chaired by the Prime Minister Modi, has given its approval for signing of an agreement between India and Egypt on Maritime Transport. Recognizing the significant mutual benefit that can be derived from-cooperation in the area of shipping between the two countries, it has been decided to sign the Agreement with a view to strengthening cooperation and to render sustained mutual assistance and advice on merchant shipping and other related maritime matters. The Agreement would be signed on a mutually convenient date and venue. Signing of the Agreement will help, both countries to encourage and facilitate the development their maritime relationship and cooperate in the task of enhancing and stimulating steady growth of maritime traffic, exchange and training of staff and students from various maritime establishments, exchange-of information necessary for accelerating and facilitating the flow of commercial goods at sea and at ports, establishment of joint ventures in the fields of maritime transportation, shipbuilding and repairs, maritime training, information technology including development of simulators, port facilities and related maritime activities, etc.

Garment and Leather

Pepe Jeans plans to raise India marketing spend by 20% in 2016 British denim wear brand Pepe Jeans plans to increase its India marketing spend by 20% in 2016. The company also intends to increase visibility of the brand through more television advertisements. They intend to continue to reach out to the target audience through relevant collaborations, sponsorships and initiatives. They are looking to associate with sports and music. Cricket is one such platform that they are quite keen on. The Kala Ghoda Arts Festival (in Mumbai) is also a great opportunity to reach out to music enthusiasts in the city. The company has received a good response to the kids wear category, which was launched recently in India, with sales exceeding expectations. The Pepe Jeans Kids Wear sales, especially in large format stores, have even surpassed that of brands like United Colors of Benetton Kids and US Polo Kids. Pepe Jeans also plans to bring its international footwear range to India by next year. At present, the footwear range is available across some of its flagship stores in metro cities. The company is testing the market to arrive at the right pricing. As a part of its marketing initiative, Pepe Jeans has set up a custom studio in its flagship store in Delhi's Connaught Place, where shoppers can get their denims stamped with their choice of names or designs. The concept, which exists internationally and is being expanded throughout Europe, has been introduced in the country for the first time by the company. Pepe Jeans plans to increase its stores in India to 450-500 from 174. The new stores will open in both metro cities and tier-II and III towns.

Landmark Group to open 50 more Easybuy stores in 3 years Dubai-based retail major Landmark Group is envisaging opening 50 more Easybuy apparel value retail format stores across the country over next three years. Launched a year ago, Easybuy is Landmark's fourth retail format with the other three being Lifestyle, Max and Spar. The company has so far opened nine Easybuy stores across the country, including seven in Telangana and Andhra Pradesh. The franchisee-run Easybuy exclusive format stores, typically with a carpet area of between 5,000sft and 6,000 sft, are targeted at middle-class families in Tier-II and Tier-III cities, offering over 1,000 styles in the price range of Rs 69 to Rs 699. Each of the Easybuy stores involves an investment of € 0.13 million VDMA-Newsletter “Indien ”, Ausgabe 10/2015 Kontakt: Oliver Wack, Telefon: +49 69 66031444

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Indian Economic and Industrial Scenario, Oct 2015

VDMA INDIA Office

(Rs 1 crore) are expecting Easybuy to generate revenues of € 13.51 million (Rs 100 crore) by the end of this financial year.

Amendments in MEIS to boost textile and apparel exports A Public Notice has been published by Director General of Foreign Trade (DGFT) regarding extension in duty incentives under the Merchandise Exports from India Scheme (MEIS). The duty benefit amendments as part of the allocation have been increased from € 2432 – 2838 million (Rs 18,000 crore to Rs 21,000 crore) for MEIS. Textile and apparel sector has emerged as one of the major beneficiaries of the latest amendments in MEIS. Launched in April 2015, the MEIS provided duty reward to eligible textile and apparel categories to an extent of 2% of FOB value in countries falling under Group A (Traditional markets - USA, EU-28 and Canada) and a single country in Group B (Emerging markets) viz. Japan. Later in July 2015, the scheme was amended wherein countries of Norway, Switzerland, Iceland and Liechtenstein were shifted from Group C (other markets) to Group A and 2% duty benefit was provided for fabric exports to Bangladesh and Sri Lanka. Despite these additions, many important markets for yarn, fabrics, made-ups and garments like Latin American countries, Russia and CIS countries, Turkey, etc. remained uncovered for duty reward. Indian textile and apparel exporters had been demanding a more comprehensive market coverage to set off the disadvantage that they faced due to factors such as lack of FTAs with EU and USA, and higher interest and power rates than competing countries. The recent amendment in MEIS has addressed these concerns of industry, thereby improving industry sentiments. In the recent amendment, the country coverage for all eligible textile and apparel categories has been extensively extended. Eligible categories under HS Code Chapters 50 to 63 are now eligible for duty reward of 2% to all countries of Group B, Group C and Group A countries. This means that the duty reward is now available to textile exporters in any country globally. For eligible apparel and made-ups categories under HS Code Chapters 61 to 63, the duty reward has been extended to all Group B countries in addition to Group A countries. Group B comprises of 140 countries covering important emerging apparel and made-up markets like South Africa, Russia, China and Hong Kong, East and West African countries, etc. Incentives in these additional markets would prove extremely beneficial to exporters.

Leather industry: Lower global demand, strong rupee take the shine off job growth About 18,000 people working in the leather industry were made redundant in 2014-15 due to lower global demand from Europe and currencies of competing countries depreciating more than the rupee. The leather industry, which employs about 2.4 million people, had revenues of € 11050 million (Rs 81,774 crore) in 2014-15, with the domestic industry accounting for Rs 39,251 crore. Leather exports went up to € 5746 million (Rs 42,523) crore in 2014-15 from € 5242 million (Rs 38,794 crore) in the previous financial year, but the industry was employing 18,000 fewer people over the previous year. The job situation for leather manufacturers catering to the domestic industry is more or less static, job creation in the exports segment is an issue. In the first half of this financial year, exports have declined due to lower demand from traditional markets, especially Europe. The Indian leather industry is also not able to match the prices of competing nations, where the currency has depreciated by over 25%, which makes their products cheaper by around 10% compared to Indian exports. Orders roughly of € 261 million ($300 million) worth were lost during the first six months and Small and medium enterprises (SMEs) have mainly faced the heat. It is believed that another 10,000 to 15,000 people would have lost their jobs in 2015-16 so far, and if things continue this way, more jobs will be gone. Industry representatives also say that it is difficult for a leather exporter to start catering to the domestic market as there are differences between the two businesses in terms of quality, product design and pricing. In 2013-14, the leather industry was able to add 39,000 jobs.Besides the currency factor and unfriendly policies, the industry is also facing pollution-related issues in Tamil Nadu, and the Maharashtra government's decision to ban bull slaughter will also impact the availability of raw materials. On the raw material front, imports of semi-processed hides from countries in Africa would cost around Rs 250 per sq ft as against Rs 100 to 120 locally. The domestic industry is facing competition from cheap imports and synthetics. In the last six months, the domestic market also reported a five per cent drop due to price and competition. While Tamil Nadu accounts for 40% of the country’s leather production, Maharashtra is at 15%, much of it in small and medium units. Kolkata, Kanpur, Jalandhar, Bengaluru, Delhi and Hyderabad are the other important places involved in leather manufacturing and exports. These clusters account for around 90% of the country’s leather products.

VDMA-Newsletter “Indien ”, Ausgabe 10/2015 Kontakt: Oliver Wack, Telefon: +49 69 66031444

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Indian Economic and Industrial Scenario, Oct 2015

VDMA INDIA Office

General ABB India rolls out its first 800kV UHVDC transformer ABB India rolls out its first 800kV UHVDC transformer from its Vadodara facility. The transformer will be installed at Powergrid's Agra substation, a part of the North East-Agra 800 kV ultra-high voltage direct current (UHVDC) transmission link. UHVDC is the technology of choice for long-distance bulk power transmission and enables evacuation and transmission of clean energy from the North East to load centers of North India. It also brings cheaper power from the states of Madhya Pradesh and Chhattisgarh to the North Eastern Region with minimal losses. When fully commissioned in 2016, the North-East Agra link will become the world's first multi-terminal UHVDC connection. From the facility in Vadodara, ABB has already supplied six units of 400 kilovolt (kV) converter transformer for this project for installation at Alipurduar substations in West Bengal.

Prince Pipes plans Rs 100 crore plant in West Bengal PVC pipes major Prince Pipes and Fittings is looking to invest up to Rs 100 crore for a manufacturing facility in the east by 2017-18 and considering West Bengal for the eastern plan and looking to invest somewhere between Rs 75-100 crore. The company currently has six plants in south, west and north India with a total capacity of 90,000 mtpa. The new facility will help the company to have a greater competitive edge in the eastern region. By 2017-18 it will able to garner critical volume for feasibility. The company commands about 10-11% market share in the Rs 10,000 crore PVC pipes and fittings industry. The company has tied up with Polish firm Trelleborg for sealants. Prince will use sealants in its premium pipes from Poland with this tie up, which is for a period of one year.

KONE India launches new range of elevators KONE India, a manufacturer of elevators and escalators announced the launch of a new range of gearless, compact elevators, targeting the low and mid-rise residential segments. KONE I MinSpace will serve the low rise and mid-rise segments, offering ride comfort and energy savings. KONE I MiniSpace is powered by the KONE EcoDisc that revolutionised the elevator industry. This is significantly more energy efficient than the preceding technologies and helps in reducing operating costs and carbon footprint. KONE India has over 40 outlets in the country and has about 3,800 people on its rolls. Besides serving the local market, the company ships its products to Bangladesh, Nepal and Asia-Pacific countries.

ESK India partners Rockwell Automation for North India ESK India, an arm of France-based Sonepar Group has entered into an association with the US based Rockwell Automation for distributor relationship for North India. ESK India, a 100% subsidiary of France-based Sonepar Group has entered into an association with the US based Rockwell Automation, a dedicated industrial automation and information solutions company for distributor relationship in North India. ESK Automation, a newly formed entity of ESK India, will be the authorised business unit of the group that will be well equipped for managing customer inquiries, order fulfillment, full technical support and customer service on behalf of Rockwell Automation in North India. ESK Automation will also provide added focus and value to customer relationships. ESK Automation, as the authorised distributor for Rockwell Automation for North India, will support in consolidating its limited distribution model along with growth and performance business strategy, which consists of enhancing market access, expanding its served markets and extending its geographic reach in this important region.

VDMA-Newsletter “Indien ”, Ausgabe 10/2015 Kontakt: Oliver Wack, Telefon: +49 69 66031444

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Focus State – Tamil Nadu Governor: Dr. Konijeti Rosaiah Chief Minister: Smt. Jayalalithaa

General Facts Area (sq km)

130,058 sq kms

Total Population

72.13 million

Literacy Rate

80.3 %

Airports

Chennai ,Trichy, Coimbatore, Tuticorin, Salem and Madurai

Infrastructure Roads Tamil Nadu has 27 National Highways running through it. The state is also an important terminus in the Golden Quadrilateral road link of the National Highway Authority of India (NHAI). The district centres are linked through 187 State Highways. Tamil Nadu is one of the first states in India, to have 100 % metalled road connectivity even in the rural areas. The State Express Transport Corporation (SETC), formerly, Thiruvalluvar Transport Corporation was established in September 1975 and provides road transport services within the state. To upgrade road infrastructure, the State Government is implementing a World Bank-funded project at a cost of € 365 million. By Air Tamil Nadu has international airports at Chennai and Trichy; it has domestic airports at Chennai, Coimbatore, Tuticorin, Salem and Madurai. The Chennai International Airport was the first in the country to get ISO 9001-2000 certification. Construction work has been completed on a new passenger terminal at the Chennai International Airport. The terminal will have a capacity of 10 million passengers. Electronic Data Interchange (EDI) facility for customs clearance is available at the Chennai Airport. A new integrated terminal building has been constructed at Madurai Airport. Railways Tamil Nadu’s railway network falls under the jurisdiction of the Southern Railways, which covers Tamil Nadu, Kerala, Puducherry and a small part of Andhra Pradesh. It has six divisions, four of which are in Tamil Nadu; they are Chennai, Tiruchirapalli, Madurai and Salem. Coimbatore is also a key railway junction. Tamil Nadu had a 5,958 km rail network with 536 railway stations. Chennai also has a well-established suburban railway network that connects it to the suburbs and the neighbouring cities. The Mass-Rapid-Transit System (MRTS) is an elevated line of the suburban railway in Chennai; it runs from the Chennai beach to the Velachery suburb, covers a distance of 25 km and has 21 stations. It is owned by the Southern Railways.

VDMA-Newsletter “Indien ”, Ausgabe 10/2015 Kontakt: Oliver Wack, Telefon: +49 69 66031444

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Indian Economic and Industrial Scenario, Oct 2015

VDMA INDIA Office

Ports Tamil Nadu has three major ports, at Chennai, Ennore and Tuticorin; it has 15 minor ports. In 2011-12, the total traffic handled at Chennai, Ennore and Tuticorin ports was 55.71 million tonnes, 14.96 million tonnes, and 28.11 million tonnes, respectively. Together, the three ports accounted for about 17.6 % of the total traffic handled at all major ports across the country. Between, 2005-06 and 2011-12, the major-port traffic increased at an average rate of 5.04 %. The Chennai port handles, mainly, container cargo while the Ennore and Tuticorin ports handle coal, ores and other bulk minerals.

Economy At current prices, the GSDP of Tamil Nadu was about € 105 billion (US$ 137 billion) in 2012-13. The average GSDP growth rate between 2004-05 and 2012-13 was about 16.5%. The net state domestic product (NSDP) of Tamil Nadu was about US$ 124 billion in 2012-13. The average NSDP growth rate between 2004-05 and 2012-13 was 16.8%. The state’s per capita GSDP in 2012-13 was € 1550 million (US$ 2,012.5). The per capita GSDP increased at a compound annual growth rate (CAGR) of 15.7% between 2004-05 and 2012-13. The state’s per capita NSDP in 2012-13 was € 1397 million (US$ 1,814). The per capita NSDP increased at a CAGR of 15.9% between 2004-05 and 2012-13. In 2012-13, the tertiary sector contributed 57.5 % to the state’s GSDP at current prices, followed by the secondary sector at 31.4%. The tertiary sector grew at an average rate of 16.6% between 2004-05 and 2012-13; driven by trade, hotels, real estate, finance, insurance, transport, communications and other services. The secondary sector grew at an average rate of 16.4% between 2004-05 and 2012-13. Its growth was mainly driven by manufacturing and construction. The primary sector grew at an average rate of 16.5% between 2004-05 and 2012-13. Tamil Nadu is one of the leading producers of bananas, flowers, tapioca, mango, coconut, groundnut, coffee, tea and sugarcane. In 2012-13, total production of food grains and pulses in the state was 6.2 million tonnes and 249,100 tonnes, respectively. In 2012-13, total sugarcane production in the state is estimated at 42.2 million tonnes, while total rice production stood at 5.5 million tonnes. In 2012-13, total vegetable production in the state is estimated at 10.8 million tonnes. In 2012-13, total fruit production in the state is estimated at 10.2 million tonnes. As per Department of Industrial Policy & Promotion (DIPP), the cumulative FDI inflows from April 2000 to September 2013 were at € 9.3 billion (US$ 12.2 billion). Investments proposals worth € 3.92 billion (US$ 5.1 billion) were finalised with various multinationals in 2012-13. In 2012-13, outstanding investments in the state were € 133 billion (US$ 173.3 billion). Electricity and services sectors continue to attract large investments. The electricity sector attracted investment of € 54 billion (US$ 70 billion) in 2012-13, accounting for 40.4 % of total outstanding investments. The services sector secured investments worth € 42 billion (US$ 54.6 billion), accounting for 31.5 % of total outstanding investments. Tirupur and Erode are the country's largest exporters of knitwear. IT exports* from Tamil Nadu have increased from € 2.31 billion (US$ 3 billion) in 2005-06 to € 8 billion (US$ 9.8 billion) in 2011-12, registering a CAGR of 21.7 %. IT exports from Tamil Nadu were estimated at € 7 billion (US$ 9.2 billion) during 2012-13. A majority of software exports from Tamil Nadu consist of application software. Tamil Nadu exported about 73,991 tonnes of marine fish and fish products, worth € 450 million (US$ 584.2 million), in 2011-12.

Urban Infrastructure The Jawaharlal Nehru National Urban Renewal Mission (JNNURM) covers the town Panchayats that fall within Chennai Metropolitan Development Authority and urban agglomeration area of Madurai and Coimbatore. Forty five towns have been identified under the JNNURM. The thrust areas for development under the JNNURM include water supply and sanitation, sewerage, solid-waste management, road network, urban transport and redevelopment of inner-city areas; also envisaged is the shifting of industrial and commercial establishments to designated areas. Under the JNNURM, 48 projects costing € 0.86 billion have been sanctioned for Tamil Nadu. The projects have been sanctioned between 2006-07 and 2010-11. Key areas of development are water supply, sewerage, storm water drainage, solid waste management, development of heritage areas and roads/ flyover.

Social Infrastructure Tamil Nadu has a literacy rate of 80.3 % according to the provisional data of Census 2011; the male literacy rate is 86.8 % and the female literacy rate is 73.9 %.Tamil Nadu is among the states running the Total Literacy Campaign, the Post-Literacy Mission and the Continuing Education Programme (CEP). VDMA-Newsletter “Indien ”, Ausgabe 10/2015 Kontakt: Oliver Wack, Telefon: +49 69 66031444

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As of 2011-12, the state had 34,871 primary schools, 9,969 middle schools and 10,827 high & higher secondary schools. In 2011-12, students’ strength in the state was about 3.17 million in primary schools, 2.15 million in middle schools and 6.14 million in high and higher secondary schools. Private participation is being encouraged in technical and vocational education.

Cultural Infrastructure Tamil Nadu is known as the Land of Temples; nearly 33,000 ancient temples – many at least 600 to 800 years old – are scattered all over the state. The Sports Development Authority of Tamil Nadu (SDAT) is responsible for developing sports-related infrastructure in the state. The M. A. Chidambaram Stadium of Chennai is an international cricketing arena with a capacity of 50,000; it also has the offices of the Tamil Nadu Cricket Association. The Chennai Open Tennis championships are held every January at the SDAT Tennis Stadium. The Jawaharlal Nehru Stadium in Chennai is a multipurpose stadium that hosts football tournaments, and track and field events. Chennai also hosts the Annual Madras Music Season during December-January; it includes performances by a number of artists, all over the city. Bharatanatyam is a well-known classical-dance form of Tamil Nadu. From the beaches in the East to Nilgiri hills in the West, Tamil Nadu offers different types of avenues for adventure, leisure and culture tourism.

Major Industrial Projects being implemented Cost € million 255.4

Name of the project Elevated corridor from Chennai to Maduravoyal

Promoter Build- OperateTransfer - Toll

Chengapalli to Coimbatore Bypass and from Coimbatore Bypass to Tamil Nadu and Kerala Border Second Container Terminal – Chennai

Build- OperateTransfer – Toll

136.4

Roads

Build- OperateTransfer - Toll

78.1

Ports

Salem – Ulundrupet

Build- OperateTransfer – Toll

170.6

Industry Roads

Roads

Key Industries in the State Tamil Nadu Industrial Development Corporation Limited (TIDCO), State Industries Promotion Corporation of Tamil Nadu (SIPCOT), Tamil Nadu Industrial Investment Corporation Limited (TIIC) and Tamil Nadu Small Industries Development Corporation Limited (TANSIDCO) are jointly responsible for developing industrial infrastructure in the state. Tamil Nadu Industrial Guidance & Export Promotion Bureau has been constituted with the objective of attracting major investment proposals into Tamil Nadu. As of March 2012, the state had 760,000 registered Micro, Small and Medium Enterprises (MSMEs), providing employment to around 5.2 million persons with a total investment of around US$ 8.22 billion. Tamil Nadu is an important IT hub. It is one of the largest software exporters by value in India. IT exports from Tamil Nadu have increased from € 2.19 billion in 2005-06 to € 5.6 billion in 200910, registering a CAGR of 26.5 %. A large number of textile mills and engineering units are present around the city of Coimbatore. The districts of Coimbatore, Tirupur and Erode are referred to as the ‘Textile Valley of India’. In the last two decades, Tamil Nadu has attracted investments in the automotive industry, particularly, in cars, railway coaches, tractors, motorcycles, automobile spare parts and accessories, tyres and heavy vehicles. The automotive industry has a crucial role in driving the state’s economy. Textiles Tamil Nadu is known as the “Yarn Bowl” of the country. Tamil Nadu accounts for 46.10 % of the country’s spinning capacity and it is the leading state in the country in the export of cotton yarn. Coimbatore and Tirupur are the major textile centres in Tamil Nadu. Tirupur is known as the ‘Knitting City’. Tamil Nadu produced about 1,482.79 million kg of spun yarn; it was about 34.01 % of the annual spun yarn production of the country during 2011-12. The capacity of the spinning mills in the state is around 22.24 million spindles. Tamil Nadu has 1,997 spinning mills (60.64 % of mills in India), 458,000 power looms and 207,000 handlooms. Karur, Madurai and Rajapalayam are the other textile centres in the state.

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Indian Economic and Industrial Scenario, Oct 2015

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Automotive Industry Chennai is fast emerging as a major export hub of cars for the Southeast Asian and South African markets. Tamil Nadu has around 35 % share in the Indian automotive industry. Tamil Nadu’s strong performance in the auto industry is because of the presence of skilled manpower with strong engineering capabilities. In Tamil Nadu alone, nearly € 0.73 billion has been invested by some of the major tyre companies, such as Apollo Tyres, ATC Tyres, MRF, Dunlop and TVS Srichakra. Engineering Tamil Nadu has a strong engineering base, which is concentrated in Chennai, Coimbatore and Salem. Exports of engineering products from Tamil Nadu were worth € 3.4 billion in 2009-10.The state has network of nearly 3,000 engineering units, employing over 250,000 skilled workforce, making highquality inputs including castings and forgings and a wide variety of ancillary products. IT and ITes Tamil Nadu has emerged as a centre for IT investments. Tamil Nadu has 22 approved IT Parks. The TIDEL Park in Chennai is spread over 1.28 million sq ft. It is the largest IT facility in India, promoted by TIDCO and ELCOT. A TIDEL Park (IT-SEZ) in Coimbatore has been inaugurated in August, 2010. The number of software units in Tamil Nadu has increased from 1,114 in 2004-05 to 1,751 in 2009-10. IT exports from Tamil Nadu have increased from € 2.19 billion in 2005-06 to € 5.6 billion in 2009-10, registering a CAGR of 26.5 %. There are 13 operational SEZ’s for IT/ITeS in the state. Software Technology Parks of India (STPI) Chennai was established in 1995. It has established its sub-centres at Trichy, Madurai, Tirunelveli, Coimbatore and Pondicherry. A majority of software exports from Tamil Nadu consists of application software. Cement Tamil Nadu is among the leading cement manufacturers in the country. The state had a cement production capacity of 28.71 Million Tonnes Per Annum (MTPA) in 2009-10, registering a growth of 43.1 % over the previous year. In 2009-10, the cement production in the state was 20.86 MTPA against 19.01 MTPA during the previous year. In 2009-10, cement capacity utilisation of the state was 72.65 %. The production of ready-mix concrete is a major activity of the industry in the state. Banking and Financial Services Chennai is a key financial centre in South India with major Indian financial institutions and foreign banks having a strong presence. Several banks have their back office operations in Chennai. Drugs and Pharmaceuticals Tamil Nadu is the fifth-largest pharmaceutical producing state in the country, next to Maharashtra, Gujarat, West Bengal and Andhra Pradesh. Tamil Nadu and Puducherry have companies producing mainly formulations, although there are some bulk drug manufacturers too.

Key Projects under planning Name of the project Tirupur Water Supply Madurai - Arupukottai – Tuticorin Hosur - Krishnagiri Section 100 MLD Sea Water Desalination Plant Reverse Osmosis

Promoter Build- Operate- Own Transfer Build- Operate- Transfer- Toll Build- Operate- Transfer- Toll Build- Operate- Transfer

VDMA-Newsletter “Indien ”, Ausgabe 10/2015 Kontakt: Oliver Wack, Telefon: +49 69 66031444

Cost € million 157.4 140 140

Roads Urban Development

Project ownership State Government State Government State Government

Urban Development

State Government

Industry Urban Development

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Seminars & Exhibitions Intersolar India 2015

18 November – 20 November 2015

Date

Venue

Organizer

Bombay Exhibition Centre

MMI India Pvt. Ltd.

Mumbai Retrospect: 2014 Exhibitors: 170

5th Floor, Lalani Aura, 34th Road, Khar West, Mumbai. 400 052 Tel: +91-22 -4255 4707 Fax: +91-11-4255 4718 Email: [email protected]

Countries :NA

Profile

Products/ Participants

Intersolar India will provide great insight into the Indian solar market by bringing companies from around the world together so they may prosper and gain the knowledge needed to expedite the implementation of solar as a significant source of energy

. Photovoltaics . Solar thermal technologies . PV cell . Module and inverter manufacturers . Components and mounting systems suppliers . Manufacturing system suppliers . Service companies . Manufacturers of solar thermal applications

Visitors: 8000

Website: www.intersolar.in

Venue

Organizer

Profile

Products/ Participants

Pragati Maidan

Hannover Milano Fairs India Pvt. Ltd

World of Industry INDIA 2014, 8th edition includes concurrent shows MDA India, Industrial Automation, CeMAT, Surface Technology.

Hydraulics and Pneumatics to ElectroMechanical Transmission, automation components to process and factory automation systems, materials handling equipments to logistics infrastructure systems. Surface technology products to electroplating and surface engineering techniques.

WIN India 2015 Date

9 December – 11 December 2015

New Delhi Retrospect: 2014 Exhibitors: 314 Visitors: 11,374 Exhibiting Countries :27, Group participation from five international pavilions – Germany,Italy, China, Korea and Taiwan.

B-102,BusinessSquare, Off Solitaire Corporate Park,1st floor, Chakala, Andheri (E) Mumbai - 400093 Tel : +91 22 66875500 Fax: +91 22 66875555 Email : [email protected]

Website: www.win-india.com

VDMA-Newsletter “Indien ”, Ausgabe 10/2015 Kontakt: Oliver Wack, Telefon: +49 69 66031444

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Indian Economic and Industrial Scenario, October 2015

VDMA I NDIA Office

Special Rates at Hotels in India We have negotiated special rates for VDMA member companies with Taj Group, Oberoi Group & ITC Group of Hotels covering not only the major cities like New Delhi, Mumbai, Kolkata, Chennai, Bangalore, Hyderabad but also other destinations in India like Goa, Agra, Rajasthan, Kerala and many others. The discounts range from 25% up to 45% depending on the city and the hotel. However these discounted rates would be valid only when the booking is done through VDMA India Office in Kolkata. For further details or reservations feel free to contact us.

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, Regional Manager – West GC 34, Sector III, Salt Lake Kolkata– 700106, India Telephone: +91 33 2321 7391 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: Ms Jamly John at: [email protected]

VDMA-Newsletter “Indien ”, Ausgabe 10/2015 Kontakt: Oliver Wack, Telefon: +49 69 66031444

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