Thursday, 28 December 2017

India bets big on methanol

Coal Production and Transportation in India

Energy is considered as a key input for the economic development of the country. India is poised to play a significant role in global energy space as it is likely to account for 25% of global energy demand by 2040. India needs around 2900 cr litres of petrol and 9000 cr litres of diesel per year currently, the 6th highest consumer in the world and will double consumption and become 3rd largest consumer by 2030. Our import bill on account of crude stands at almost 6 lac crores.

Hydrocarbon Fuels have also adversely affected the environment with Green House Gas Emissions (GHG). India is the third highest energy-related carbon dioxide emitter country in the world. Almost 30%pollution in cities like Delhi is from automobiles and the growing number of automobiles on the road will further worsen the pollution. It must be noted that the recent situation is alarming and time has come for the Govt to present a comprehensive roadmap to reduce the urban pollution in this country and stop pollution-related deaths completely. We need to have our own “Indian Fuel of global relevance”. Biofuels are pollution-free, indigenous, import substitute and cost-effective solution.

Methanol is a clean burning drop in fuel which can replace both petrol & diesel in transportation & LPG, Wood, Kerosene in cooking fuel. It can also replace diesel in Railways, Marine Sector, Gensets, Power Generation and Methanol based reformers could be the ideal compliment to Hybrid and Electric Mobility. Methanol burns efficiently and gives almost no emissions.

Methanol Economy – India’s road ahead

The government with the recommendations from NITI Aayog has given the go-ahead to add 15% Methanol in Petrol. This is a tried and tested used in countries like USA. Imported refined petrol costs about Rs. 80 while locally produced methanol can be acquired at less than Rs 20 for a litre. Industry experts feel that with this move, the cost of blended petrol would be decreased by 10%. With the revenue fall in tax income, the government could effectively increase duties and pass some benefit to the consumers by lowering costs periodically. NITI Aayog report suggests that methanol blended petrol would lower pollution by 33%.

Globally, the installed capacity of methanol is 120 million ton. Currently, Methanol accounts for almost 9% of transport fuel in China. They have converted millions of vehicles running on Methanol. China alone produces 65% of world Methanol and it uses its coal to produce Methanol. Israel, Italy have adopted the Methanol 15% blending program with Petrol and fast moving towards M85 & M100, Japan, Korea have extensive Methanol & DME usage and Australia has adopted GEM fuels (Gasoline, Ethanol & Methanol) and blends almost 56% Methanol.

Methanol and DME will play an important role in order to contain the rising imports and improve the energy security of India. India has an installed Methanol Production capacity of 2 MT per annum. As per the plan prepared by NITI Aayog, using Indian High Ash coal, Stranded gas, and Biomass can produce 20MT of methanol annually by 2025.  India, with 125 Billion Tonnes of proven Coal reserves and 500 million tones of Biomass generated every year & the huge quantities of Stranded & Flared gases have a huge potential for ensuring energy security based on alternate feedstock and fuels.

NITI Aaayog has drawn out a roadmap to substitute 10% of Crude imports by 2030, by Methanol alone. This requires approximately 30MT of Methanol. Methanol & DME are substantially cheaper than Petrol and Diesel and India can look to reduce its fuel bill 30% by 2030.

India’s future – Methanol Economy

With very little modifications to existing engines (vehicles) and fuel distribution infrastructure, 15% of all vehicle fuels can be converted to Methanol & Di-Methyl Ether (DME). India is shortly going to implement Methanol 15 % blending program with Petrol and cost of petrol is expected to come down immediately by 10%. Nitin Gadkari, in his speech in Loksabha said, you will soon see buses and trucks running on 100% methanol. Diesel to state transport costs Rs 45/litre while methanol would only cost Rs 19/litre. This would increase profitability and bring down ticket costs. Global engine manufacturers like Volvo, Caterpillar, Mercedes and in collaboration with Indian players can manufacture these engines under the Make in India.

Worldwide due to emission regulations being implemented stringently by IMO (International Maritime Organisation), marine Sector is shifting to Methanol as the fuel of choice. Being a very efficient in liquid form and practically generating no SOx or NOx, Methanol is much cheaper than LNG and Bunker / Heavy Oil.  Ministry of Shipping is preparing a roadmap to convert 500 barges into Methanol and a cabinet note is being prepared to adopt Methanol in Inland Waterways system. The first barge in India to run on Methanol will be achieved in the next 12 months. Sweden has already about 17 boats, ferries, barges and a 1500 passengers cruise ship running on Methanol. India will convert abt 50 Nos of vessels in the Port sector and various vessels owned by government entities to operate on Methanol.

The cooking fuel program of Methanol liquid fuel and LPG-DME blending is a low hanging fruit for India. A 20% blending program with LPG, without any infrastructure modifications, would result in an immediate savings of Rs.6000 Crores a year.

With high coal reserves, there are currently five companies who have the tech to produce methanol – Gujarat Narmada Valley Fertilizers, Deepak Fertilizers, Rashtriya Chemicals, Assam Petrochemicals and National Fertilizers Ltd.

India by adopting Methanol can have its own indigenous fuel at the cost of approximately Rs 19/litre at least 30% cheaper than any available fuel. Methanol fuel can result in great environmental benefits and can be the answer to the burning urban pollution issue. At least 20% diesel consumption can be reduced in next 5-7 years and will result in a savings of 26000 Crores annually. Rs. 6000 Crores can be annually saved from the reduced bill in LPG in the next 3 years itself. The Methanol blending program with Gasoline will further reduce our fuel bill by at least 5000 Crores annually in next 3 years.

Source- PIB, Loksabha TV, Niti Aayog

Wednesday, 27 December 2017

Only 1.7% of India’s population pays income tax

Business hub in Mumbai

Ministry of Finance has revealed that only 2.06 crore people paid income tax in year 2015-16.

Are we that poor? It’s hard to digest these facts that hardly 2 out of  120 people pay income tax to the government in the AY 2015-16. The data further revealed that just over 3 per cent of the 120 crore Indian population filed their tax returns.

While the number of income-tax return filers rose to 4.07 crore in the assessment year 2015-16 (FY 2014-2015) from 3.65 crore in the previous year, only 2.06 crore actually paid their tax as the others claimed income below taxable limits.

Last year, 3.65 crore who filed returns out of which 1.91 crore had paid income tax.
According to the official figures, the maximum amount of 19,931 crore was collected from 2.80 crore tax filers who paid between Rs. 5.5 lakh to Rs. 9.5 lakh in taxes. Data shows that as many as 1.84 crore returns were filed for payment of income tax of less than Rs. 1.5 lakh or an average of Rs 24,000.

Out of the total 4.07 crore tax returns field in AY 2015-16, nearly to 82 lakh declared their income as zero or income less than Rs. 2.5 lakh. Currently, no income tax is levied on income up to Rs 2.5 lakh.

It’s time to say goodbye to the income tax

The total amount of income tax paid by individuals this year has declined to Rs. 1.88 lakh crore in AY 2015-16 from Rs. 1.91 lakh crore in AY 2014-15. The government should positively think of repealing income tax up to Rs 10 lakh rupees.  To manage the fiscal consolidation, we could cancel religious, gas, education subsidies on the basis of PAN/Aadhaar income.

The most striking fact is that only 5 Indians reported income of more than 100 crores; 11 Indians reported income Rs 50 to Rs 100 crores and just 58 Indians declared income between Rs 25 to Rs 50 crores. Then who are owns those Rolls Royce, Lamborghinis and Mercs? In South Mumbai, one of India’s hot properties, rates for 3 BHK sky bungalows range starts from Rs 10 crores. We also here movie actors earning Rs. 100 from a film. As the numbers don’t add up, there is certainly something fishy. It would be advisable to repeal the income tax system to benefit at large of a middle-class population. The decision would boost Ease of Doing Business for MSMEs. Let’s wait what Mr.Jaitley has got to deliver in his ‘last’ full-fledged budget.

Sunday, 17 December 2017

Indian electronic manufacturers to get competitive edge from the hike in import duty.

Indian electronics manufacturers to get competitive edge from the hike in import duty

The Government of India’s decision to hike duty on the import of electronic goods would boost #MakeInIndia.

The notification issued by Ministry of Finance announced the raise in custom duties on a host of electronic goods in order to give a push to Make in India initiative. As per the notification, the customs duty on products like Television sets, mobiles, microwaves, refrigerators and many others have been increased.

The customs duty on television set has been increased to 20% from 10%, while the additional duty on assembled LED panels (modules) has also been increased from nil to 7.5%. Similarly, the duty on monitors and projectors has been doubled to 20%, while for the mobile handsets the duty has been raised to 15%. The move has been cherished by electronic manufacturing and Original Equipment Manufacturers (OEMs) who Make in India. This would mean that the electronic product manufactured in India would relatively cost less than its equivalent produced abroad.

Global electronic brands, in a hope to increase revenue, were eyeing India’s booming $100 billion electronics market. The electronics market of India is one of the largest in the world and is anticipated to reach US$ 400 billion in 2022. The market is projected to grow at a compound annual growth rate (CAGR) of 24.4 per cent during 2012-2020. The hike in import duty would encourage global electronics manufacturers to set up plants in India.

#MakeInIndia, for Indians and ship it anywhere in the world – PM Modi

With local sourcing of electronic goods, India could narrow the gap between India’s export and import. As per data published by NITI Aayog, in the period of 2014-15, India imported electronic good worth $36.9 billion while its export was minimal at just $6 billion. In several countries, the contribution of the electronics industry to the GDP is significantly high. For example, the electronic industry contributes 15.5% to GDP in Taiwan, 15.1% in South Korea and 12.7% in China. But in India, this proportion is only 1.7%. As India awakes, the scenario in electronics manufacturing would see a transformational shift.

The notification of increasing import duty gives protection to the brands who manufacture here in India from low-cost OEMs products which are often dumped in price-sensitive Indian market by Chinese brands. With the commitment to Make in India, reputed International electronic brands are keen to set up large Electronic Manufacturing Clusters. iPhone maker Foxconn has agreed to set up a manufacturing plant at India’s largest electronics SEZ at JNPT Coastal Economic Zone near Mumbai.

Local sourcing and manufacturing of electronic products would usher higher profits for MSME as well large-scale manufacturers. The government also expects higher revenues from hiked import duties by the end of the year. Experts who have worked in electronics segment say that hike in import duty would lead to inflationary pricing, however Indian Manufacturers will benefit.

This protectionary measure by the government of India would strengthen Made-In-India brands. The electronics manufacturing industry has a potential to give 10 million jobs per year.

"I would like to congratulate Government on the decision to raise customs duty on some electronic items including television, mobile phone, and water heater. This move will definitely give a boost to Manufacturing in India which will in-turn push Make in India initiative by our Government. It will encourage foreign players to manufacture products in India rather than import them as the prices are expected to go up, especially for televisions. With this move, Indian manufacturers who make products with complete backward integration will benefit immensely. Manufacturers such as Videocon, one of the leading Indian manufacturer with a large workforce will get a boost as they have a very strong manufacturing base in the country. Even smaller manufacturers like Vierra will be benefitted from this step. Overall it is a great step to boost manufacturing in the country and will also lead to job generation. Make in India project by our government is a great project and to make it successful the government has started implementing the right environmental requirement.” said Mr. K.S. Raman, Former President, Consumer Electronics & Appliances Manufacturing Association (CEAMA).

The growing customer base and the increased penetration in the consumer durables segment has provided excellent scope for the growth of the Indian electronics sector. Soon, India will not just be a market for others, but it will reposition itself as the next factory of the world.

- Chaitanya Kulkarni

Wednesday, 13 December 2017

Give your data the security it deserves

Data Suraksha with Dell Latitude 2-in-1

As per Global Information Security Survey 2016-17 by EY, 33% of Indian companies don’t have any Security Operations Center (SOC) as compared to 44% worldwide. Besides, 44% companies in our country don’t have any or minimum vulnerability identification capability.

India is at risk of cybercrimes and data breaches. And increasingly, the situation is getting worse. Recently, the food delivery app, Zomato, was affected by a major data breach incident, which resulted in the information theft of 7.7 million users. Over the past one year, our country has seen many data breach incidents, including Mirai botnet malware, Petya, and the most infamous, ransomware WannaCry.

Undoubtedly, it will be the job of a CISO to place the enterprise-level security agenda on the company’s priority list, communicate its urgency across organizations, drive various remedial programs, and most importantly, ensure the timely deployment of various security measures.

However, when it comes to cyber security, every employee should be responsible. Awareness is the key. Spreading awareness about enterprise-level security in particular and data security in general help dealing with cybercrimes.

Moving a step ahead, some organizations are promoting this issue on a massive level. For example, the latest campaign of Dell EMC on data security, #DataSuraksha. The campaign is getting enthusiastic participation from professionals across sectors and cities, even from Tier-2 and Tier-3 cities. Some good ideas about data security which I found quite insightful include:

  • Don't allow your app to access your phone contact book unless it's absolutely necessary.
  • Automate end user backups, with multiversioning, whitelisted apps.
  • Don’t allow the Internet Server remember passwords
  • Use encryption technology and store data at several storage devices.

Going a step further, Dell EMC is also rewarding such great ideas with fascinating goodies. The campaign has already taken social media by storm to fulfill its objective. To know more about the campaign or participate in it, visit Dell EMC India’s Facebook and Twitter.

It’s time for all of us to do our bit and aim for a cyberthreat-free nation. 

Monday, 11 December 2017

RBI lowers card transaction rate for small businesses.

Debit card transaction rate

Digital payments are expected to reach new horizons with good news from India’s Reserve Bank of India. RBI has decided to low Merchant Discount Rate for small and medium businesses in India. Politicians and RBI shifted its goal posts to increase digital payments after the historic decision of demonetisation. It is an imminent fact that large cash transactions in an economy lead to tax evasions. The government is now even considering bringing criminality provision in law for unaccounted large cash transactions.

As a short-term view, Reserve Bank of India has slashed MDR for small businesses to 0.4%. MDR is an acronym for merchant discount rate. It is the commission the bank and the card issuer share among themselves. Thus, if the MDR is 0.5 percent, this amount will be shared between the bank and the card issuer namely VISA, Mastercard, RuPay, AMEX etc.

In recent times, debit card transactions at ‘Point of Sales’ have shown significant growth. With a view to giving further fillip to acceptance of debit card payments for the purchase of goods and services across a wider network of merchants, it has been decided to rationalise the framework for Merchant Discount Rate (MDR) applicable on debit card transactions based on the category of merchants. A differentiated MDR for asset-light acceptance infrastructure and a cap on the absolute amount of MDR per transaction will also be prescribed. The revised MDR aims at achieving the twin objectives of increased usage of debit cards and ensuring sustainability of the business for the entities involved.

Payment products developed by National Payments Corporation of India will have differentiated MDR rates. The UPI and BharatQR have different merchant discount rates (MDR) so it will be a challenge for card networks and the NPCI to sort out where the transaction is originating and charge merchants accordingly. On the UPI, merchants are charged a merchant discount rate (MDR) of 0.25% for payments below Rs 1,000 and 0.65% for all other charges.

According to a press release issued by Reserve Bank of India, revised MDR rate from 1st January 2018 will be as follows:
  • Small merchants (with a turnover up to Rs 20 lakh during the previous financial year) will have to pay a maximum of 0.4% of a transaction on a physical POS or online. This will be capped at Rs 200 per transaction.
  • Small merchants who use QR code-based card acceptance infrastructure such as BharatQR will have to pay 0.3% of a transaction. This will be capped at Rs 200 per transaction.
  • Other merchants (with a turnover of over Rs 20 lakh during the financial year) will have to pay a maximum of 0.9%. This will have an MDR cap of Rs 1000 per transaction.
  • Other merchants who use QR code-based card acceptance infrastructure such as BharatQR will have to pay 0.8% of a transaction. This will be capped at Rs 1000 per transaction.

Digital payments for small businesses will be cheaper at large after the revision in MDR rates. Although, retailers which fall under GST turnover (above Rs. 20,00,000) are unhappy with the move. Government organisations (IRCTC, MCGM, Govt colleges) charge 1% from consumers on debit cards payments. But, private retailers do not charge consumers for Debit card payments. is of an opinion that we should aim for blanket rates for all merchants from 2019. High rates on POS based payments through cards are justified due to POS machine cost. Payments from BHIM, UPI or BharatQR should be made free for the benefit of retailers and consumers. India would move towards less cash economy if income tax limit is increased to Rs. 5,00,000.

- Chaitanya Kulkarni

Friday, 8 December 2017

Patanjali Ayurved forays into solar power business.

Patanjali Solar India

Swadeshi FMCG giant Patanjali has decided to venture into renewables energy space. The company which aims to hit a turnover of more than Rs. 25,000 crores by 2018 have planned to diversify its business into solar power equipment manufacturing.

“Getting into solar is in line with the swadeshi movement. With solar, each household in India can have an uninterrupted power supply, and we are here to make that happen,” Acharya Balkrishna, managing director of Patanjali Ayurved, said in an interview with Mint.

This will be the company’s first exposure to the infrastructure sector and comes after its runaway success in consumer products.

Patanjali Ayurved, which was set up in 2006, has grown at a stunning pace, increasing its revenue more than fivefold to Rs10,561 crore in the year to 31 March from Rs. 2,006 crore in 2014-15; it aims to cross Rs. 20,000-25,000 crore in sales by 31 March 2018. Today, Acharya Balkrishna, the face of Patanjali is a director of 18 companies associated with Patanjali group.

Patanjali’s newest acquisition is Noida-based Advanced Navigation and Solar Technologies Pvt Ltd (ANST). The company pioneers in manufacturing of solar panels, solar sun trackers, solar maritime equipments and rooftop solutions. ANST has a manufacturing unit in the state of Uttar Pradesh with the capacity of 120 megawatts. Patanjali plans to invest around Rs100 crore in solar equipment manufacturing and its factory in Greater Noida is expected to be fully operational within the next couple of months.

Acharya Balkrishna, of Patanjali, revealed that the idea of venturing into solar power business came when we started with our plan to use solar as a source of power at all our factories. That time we understood that most of the solar modules were indirectly imported from China. And there was no quality consistency even in India-made ones”.

With the average efficiency of a solar panel usually at just 16-22%, sub-standard quality will impact generation. The announcement of Patanjali’s acquisition of ANST comes at a time when India plans to auction solar EPC contracts of 17 GigaWatts by March 2018. India has committed to awarding 175 GW of clean energy by 2022, of which 100GW would be solar contracts.

“Solar energy can help us achieve ‘Power To All’. We started with making solar modules for our captive use initially and then decided to utilize existing capacity to manufacture solar modules and sell in the market. This unit is at a nascent stage at this moment,” said Balkrishna.

By March 2019, every household in India is expected to get uninterrupted supply of electricity. With the menace of pollution and arrival of electric cars, Patanjali aims to fill the void of demand and supply. The Ministry of New & Renewable Energy (MNRE) is also planning to issue an expression of interest (EoI) for setting up 20 GW of manufacturing facilities for the renewables sector and is “exploring innovative ways” for the addition of more renewables capacity through floating solar plants, offshore wind farms and hybrid installations. MSME companies get 30% capital subsidy under MNRE rating policy.

- Chaitanya Kulkarni

Tuesday, 5 December 2017

Demonetisation drives India’s AUM industry growth

Demonetisation AUM growth benefits Mutual Fund

Demonetization can be largely associated with the transition of monetary assets. Exchanging the illegal tender with the legal one. Be it the transition from barter to bronze coins or from cash king to less cash society.  Demonetization in India was largely a hit on pirates’ buried treasure – the Black Money. This was a part of the long-term war on cash that the country has waged. Cash is just a tender issued by central banks and it cannot act as a commodity. Black money holders consider cash as a revenue stream generated from illegal activities or activities which go beyond legal framework. In a rich country like India with poorer citizens, demonetization is a human issue as it also questions the earnings of the low wager and their saving abilities.

One thing demonetisation announced by PM Modi has achieved in large. The citizens of this country started to show interests in financial reconsolidation, few even talking the language of financial experts and economists. Political opponents without studying data did their best to attack the demonetisation decision. It can be debated whether the implementation could have been better also taking into the account of secrecy to be maintained. Now that, most of the notes are back into the formal system, the responsibility to act is now with Income Tax department.

The sudden ban on high value propelled people to invest in formal investments channels like banks, mutual funds and bond markets. Investments in gold and real estate became unreliable. Typically, the Indian households are major savers in the economy contributing 70 to 80 % of the gross domestic saving. These include physical assets namely real estate/gold etc. –constitute a major portion and the financial assets are mainly cash/bank deposits/ etc. Interestingly the recent data show that data from the Reserve Bank of India (RBI) shows that gross financial savings rose to 11.8% of the gross national disposable income (GNDI) in the fiscal year 2017, a notable climb of 90 basis points from 10.9% in the previous year.

Indians invested 1.2% of their disposable income into shares and bonds, a massive improvement from the average 0.2% in the years before. A look at how stock indices have soared since demonetisation should be enough to add a sense of certainty to this. The inflows into equity mutual fund schemes are another indicator of how the stock market gained from getting a bigger slice of household savings. The economy had seen a correction by back-to-back key economic reforms like demonetisation and GST, yet the BSE Sensex touch 33,500 in November 2017. The insurance sector also benefited with 2.9% of disposable income investments.

But before we rejoice, a look at household debt is warranted. Household debt rose to 3.7% of GNDI from 3.1% which means Indians resorted to loans after being bereft of cash. Adjusted for this, net financial savings come to 8.1% of GNDI, while that into physical assets is still higher at 10.7%. ‘Mutual Funds Sahi Hain’ campaign by AMFI encouraged savings in Assets Under Management (AUM) industry by targeting low-income and middle-income groups. Reflective to this, AUM by mutual funds increased to Rs 17.5 trillion by end of March 2017 and further Rs 21.4 trillion by October 2017. Higher resource mobilisation by mutual funds after demonetisation has mainly driven by retail and high net worth individual investors. Disposable savings, low-cost stock brokers, public trust and buoyant stock markets have been key to rise in AUM investments.

India enjoys a traditional bias towards physical assets, over financial investment. As per the Credit Suisse Global Wealth Report, 2016, financial assets in India account for around 10 per cent of total wealth against 51 per cent, 53 per cent and 72 per cent in UK, Japan and the US, respectively. With GST and other reforms, the organised sector is expected to grow at a faster rate than an unorganized sector. As India enjoys high GDP growth, investments in AUMs could become a structural trend.

- Chaitanya Kulkarni

Friday, 1 December 2017

The Fastest Growing Economies of 2017

ethiopia highways road

After the economic crises of 2008, almost a decade later, major emerging nations and developed economies are yet to recover from the doom shocks. A double-digit growth which was dominated by countries like China, Ethiopia, and Qatar seems like an impossible task at least for next five years from now. Emerging Asian and African countries lead with fastest GDP growth in the world. In the Americas, scandal-hit Panama leads in GDP growth despite the economic slowdown.

In the decade of boom and bust, from the year 2008 to 2017, the transformational human development shift has been witnessed by countries like Nauru, Ethiopia, Turkmenistan, China, Uzbekistan, Laos, and India. Nauru, a tiny island in Micronesia has witnessed an astonishing average yearly growth of 16% in this decade, suggests IMF report. Nauru’s boom was fuelled by GDP growth of 34.2% and 36.5% in year 2013 and 2014 respectively. The tiny island is a high fluctuating economy (common with micronations and war-torn zones) with GDP growth of just 4% in the current year.

The IMF data shows that Ethiopia, which maintained two-digit growth for years and throughout 2011, suffered a significant deceleration in 2012, and after recovering in the 2013-2015 period, lived a major slowdown in 2016 when growth estimates were of 6.5 percent. IMF expects the economy to Ethiopia to stable at 7.5% in current year.

The energy-rich economies of Turkmenistan and Qatar known for its consistent double-digit growth. The demand for Gas as an alternative to Diesel is on the rise. More countries like India, Russia, and China are keen to develop a Gas pipeline which would boost the growth in upcoming years. 

Turkmenistan’s GDP is expected to grow at 6.5%. The blockade led by Saudi Arabia and the United Arab Emirates has hit hard on the Qatar economy which GDP estimates of 2.5% in the current. Qatar grabbed the attention of economists in 2006 and 2010 with the GDP growth of 26.2% and 19.6% respectively.

Economies with more than 6% GDP growth projection in 2017

Côte d'Ivoire
Burkina Faso

The ray of hopes, China and India have cushioned the global economy from a drastic fall. With the large resource pool and growing middle-class, China and India will continue to invest heavily in upgrading its infrastructure. Though, a worrying trend for the world economy is that economists predict China to grow around 6% for the next two decades. China has invested billions of Yuans of investment in its infrastructure and diplomatic soft loans to African nations, Sri Lanka and Pakistan. If China fails to maintain its fiscal deficit, it could trigger a global economic crisis.

India is the only ray of hope in this era of uncertainty. But India’s track record in maintaining high growth is not good. Democratic values, the rule of bureaucracy and federalism are among the things that keep manufacturing away, a trend in EODB suggest. Critics say that India is always that country which the world and its citizens expect to take off, but it never does. After the revolutionary reforms of GST and Demonetisation, India’s economy will be back on track with approx. 7% GDP growth by March 2018. Ministry of Finance, India estimate suggest that India would grow near 8% for around 3 to 4 years. In the current state of global economy, double-digit growth seems to be a magic number and I am still optimistic. The major overhaul of the tax structure, infrastructure investments, and renewable energy generation could boost India’s economy to double-digit soon.

- Chaitanya Kulkarni

Friday, 24 November 2017

Dassault Falcon and Rafale components to be manufactured at Aerospace SEZ in Maharashtra

Dassault Falcon and Rafale components to be manufactured at Aerospace SEZ MIHAN in Nagpur, Maharashtra, India

Components for business class jet Falcon 2000 and Rafale fighter jet will be made at MIHAN SEZ in Nagpur. A deal was signed by Reliance Group with Dassault Aviation for building an aerospace manufacturing facility.

The Dassault-Reliance manufacturing facility Dhirubhai Ambani Technology Park is located in the Mihan SEZ adjoining Nagpur International Airport. Under this Joint Venture (51% Reliance Infrastructure and 49% Dassault Aviation) the facility will manufacture several components of the offset obligation connected to the purchase of 36 Rafale Fighters from France, signed between the two Governments in September 2016.

Dassault Reliance Aerospace Ltd. (DRAL) will manufacture components for the Legacy Falcon 2000 Series of Civil Jets manufactured by Dassault Aviation and thus will become part of its Global Supply Chain. These first steps are expected to achieve in the coming years the possible setting up of final assembly of Rafale and Falcon Aircraft.

The Joint Venture also represents an unequaled Foreign Direct Investment (FDI) by Dassault Aviation of over 100 Million Euros, the largest such Defence FDI in one location in India.
The DRAL facility will train thousands of skilled workers in aviation assembly and integration and lead to huge employment generation in Nagpur and its surrounding areas. It will also attract and house an organic ecosystem of over 200 MSME’s to secure the component and avionics manufacturing needs of Rafale and Falcon Jets.

Eric Trappier, the CEO of Dassault Aviation, said, "Apart from supplying the aircraft to IAF, the company is also keen to offer the 57 planes needed by Indian Navy. Assembling of the Rafale aircraft at the Nagpur unit would depend on the additional orders it gets.”

The Reliance Dassault partnership will bring high levels of Technology Transfer. It will make India a major supplier into the global aviation supply chain. It will be the endeavor of both Dassault and Reliance to fully support Prime Minister Modi’s “Make in India” and “Skill India” policies and to accelerate India’s pursuit of self-sufficiency in the aerospace sector.” – Anil Ambani, MD, Reliance Group.

DRAL expects that the first Make-In-India Falcon aircraft will take off from MIHAN factory by 2022.

Source – Dassault Aviation.