Indian Prime Minister Mr. Narendra Modi has given a slogan “Make in India” that should be popular in world and should be visible in every corner of the world. There are two aspect of this vision, 1. Outside companies go to India and setup their manufacturing units 2. Indian companies expand their market reach and expand their current manufacturing in India to support the new demand. Let’s look at both angles..
It is fact that China is by far the largest manufacturing hub in the world. China has manufacturing of almost all categories of consumer and industrial products. It may be challenging to compete directly with China in order to get the manufacturing unit if the finish goods is mainly for the world market and not for India. The reason for that is that since China has been in manufacturing facilities since long so it has created whole ecosystem for entire supply chain. The only reason why an outside company comes to India for setting up a manufacturing unit is (A) It has Indian domestic market as their demand or it can create a demand in Indian market (B) Indian governments, both federal and state government gives an advantage that China cannot provide. As we know that it will be challenging to provide any added advantage compare to China. Hence in this case there is only option to attract manufacturer is to help them grow their demand in Indian market. This is something that Indo American Market Gateway is actively working on since long and helped companies to establish their market in India.
2. Indian companies expand their market reach to other countries
This is possible but it requires fundamental change in thinking by Indian manufacturer. Indian companies inherently thinks for the short term and does not look beyond the fences. To put this in perspective we have to analyze some of the well-known US brands and vision behind it. If we analyze major brands then the common denominator is that they had a long term vision from the beginning and have invested significant money and effort in building brand and loyalty. This can be visible if you visit Hershey’s park in Pennsylvania. It’s merely a chocolate brand but in Hershey park town you can see thousands of people visiting factory and facility like a religious place for worship.
Currently if you see popular brands in USA then you cannot find a single brand that is originated in India. Small country like South Korea has more popular brands in USA like Samsung, LG, Hyundai, and KIA. Indian companies are exporting their products to North American market but those are mainly aimed at the ethnic population of south Asian origin. There is no sincere effort made by any Indian company to break out of the ghetto and sell their products in the main stream market. Recently I had a talk with one of the biggest financial tech city project in India. While they claim to be the biggest self-sufficient hi-tech city in western India and hope to get the world class financial companies as their tenants but does not have a small budget for organizing seminar in world’s largest financial market New York! You cannot make impact in world market just by designing a plan. Small city like Dubai is making much impact in developed countries and attract more investors, just by right marketing strategy and long term vision. Mahindra and Mahindra is the only brand which is making efforts in this direction and with the dynamic leader like Anand Mahindra, it can one day be in the list of real “Global” Indian companies which originated from India. There should be a systemic efforts on part of Indian government to encourage entrepreneur like Anand Mahindra in India so that they can fuel “Make in India” by expanding their market.
Finally big technology companies realize the potential of Indian market. India now has an infrastructure which can be leveraged by companies to push their products to the end users. Millions of Indians now own smart phone and they are acquainted with the transaction on phone apart from being savvy on net and purchasing products from ecommerce websites. Many things came together at the same time, like having a reliable internet connection, accessibility of internet, cheaper cell phone and data plans , acceptability of credit cards, trust on net transactions. This by far puts India in top three nations of the world for the fastest growing economy in next decade. Companies which will miss this boat will have to struggle to complete with India based giants. Amazon is doing right thing at right time as flipkart is grabbing large market share in India.
Times of India Article
Boby Kurian & Samidha Sharma, TNN | Sep 29, 2014
BANGALORE: If there’s anything that energizes Jeff Bezos, founder and CEO of Amazon.com, it’s his trademark loud laugh. Used variously to galvanize employees or send them a tough message, the laugh defines the confidence Bezos brings to his e-commerce business.
But something galvanizes him even more. “My first visit to India five years ago, which included Varanasi, left me energetic and energized,” Bezos told TOI. “Amazon is little over a year old in India. But the local team here has blown past the initial set of goals.”
To make his business intentions in India clear, Bezos put up a maverick show in Bangalore on Sunday: he was on top of a truck flashing a big $2-billion cheque and an even bigger smile. “Amazon has unveiled a $2-billion investment in the country … we’ll work to better what Indians love most in shopping — vast selection, competitive pricing and fast delivery.”
Despite the truck theatrics, Bezos does not hide his intent. His conversation with TOI was loaded with “customercentric”, a term he mentioned at least 30 times in our interview. Bezos’s sole principle: “We stay focused on the customer, not the competition. It’s the customer who pays us, not our rivals.”
If he’s unfazed by competition, he’s unfazed by policy too — at least for now. “Every country has its unique set of rules, and it’s our job to adapt to them,” Bezos said, responding to India’s rules on FDI in e-commerce.
“So, we are currently focused on bringing an incredibly large number of (local) small and medium enterprises online. That’s a big shift.”
After many laughs, it’s time for Bezos wit. Asked about his visit to India, particularly New Delhi, at a time when the Prime Minister is in the US, Bezos quipped: “We are doing a balancing act. The world is in balance now.”
US has an impressive range of weaponry to offer to Indian army under the Defense Technology and Trade Initiative (DTTI). The Indian taskforce could soon be equipped with the cutting-edge defense technology.
“We have a number of offers on the table for India. There’s a groundbreaking offer to share in the next generation of the Javelin missile, co-production and co-development,” undersecretary of Defense for Acquisition, Technology and Logistics, Frank Kendall, revealed to press.
He also added that the list of armaments also include a helicopter program and an unmanned aerial vehicle program. Thus, under the defense technology transfer program between US-India, the Indian army will be armed with the new-age arms like artillery pieces, attack helicopters, Javelin missiles, and unmanned aerial vehicles.
Kendall, who has come on behest of US defense secretary Chuck Hagel to lead Pentagon’s Defense Technology and Trade Initiative (DTTI) with India, commented that, “We have an artillery piece. We have a number of things in different stages of process.”
The discussion for the defense deals between the two nations is at different stages and would also take account of the rights to co-produce and co-develop. The DTTI progression was introduced by former National Security Advisor Shivshankar Menon under the rule of former government. The replacement for former National Security Advisor, Menon is yet to be found by the current government.
The talks will also undertake the subject around transference of science and technology, in addition to the arms deal. With the offer on table of world-class weapons, Kendall said that the US would carry on while side by side considering for additional prospects. “We also had some good discussions about science and technology cooperation that we need to continue. So to some extent, it will be continuing the work that we’ve already started, but we’re also looking for additional opportunities. So I think there’s a lot of potential there,” he said in while speaking to the reporters.
India is amongst the leading importers of arms in the world. However, the questions concerning India’s self-ability to meet its defense needs have been raised often. During the last year of his reign when the former PM visited White House in September 2013, signed up a commitment to purchase defense technology under Defense Technology and Trade Initiative (DTTI) of worth USD 5 billion.
There was a significant progress between India-US defense ties in year 2005, when the former Indian Prime Minister Manmohan Singh, signed the Civil Nuclear deal. The much talked deal also paved way for an accelerated Indo-US Defense Corporation. The figures clearly show the impact of post deal state on Indo-US joint defense trade as from being USD 100 million in the past, the investment has reached to billions.
This advancement can be judged well from the fact that even after the last year’s political upheaval after arrest of a junior Indian diplomat, Devyani Khobragade,, the Indian side signed yet another contract of a $1.01-billion deal for the six additional C-130J military transport aircraft.
India established that they are endorsing an agreement signed with the International Atomic Energy Agency (IAEA) agreement, to upsurge the negligence of civilian nuclear program. The step is defined to be directed towards clearing a major nuclear partnership with the United States.
The endorsement of IAEA agreement is a prominent sign indicating that the newly elected Prime Minister, Narendra Modi, wants to strengthen strategic and trade ties with the United States, prior to his visit to White House to meet President Barack Obama in September.
The spokesman for the Ministry of External Affairs, Syed Akbaruddin, confirmed the domestic news reports, “I can confirm that we are ratifying the Additional Protocol to the IAEA Safeguards Agreement.” Adding further Akbaruddin stated, “The move signals India’s commitment “to the responsible use of nuclear power.” No response was available on the news from IAEA
US has welcomed the move as evident from the comment of a U.S. State Department spokeswoman as she said, “This action marks another important step in bringing India into the international nonproliferation mainstream.” The spokeswoman also added to the remark that compliance with the International Atomic Energy Agency (IAEA), is also in accordance with joint statement on nuclear cooperation in year 2005, between former Indian PM, Manmohan Singh and former U.S. President George W. Bush.
“The United States remains fully committed to expanding our civil nuclear cooperation with India,” spokeswoman said and added that , “its strong support for India’s full membership in the four multilateral arms export control regimes, in a phased manner, as India takes the steps necessary to join each regime.” The four control regimes are: the Australia Group, the Missile Technology Control Regime, which occupies chemical and biological assets, and the Wassenaar Arrangement that covers dual-use substances and conventional arms and Nuclear Suppliers Group.
IAEA pact critics say that the pact fails to address the concerns regarding India’s involvement with the countries that exercise trade in nuclear supplies, without the signing of Non-Proliferation Treaty. Tariq Rauf, ex- senior IAEA official cleared that- there would be “no gain for non-proliferation”.
India, is not a member of the nations who signed the Non-Proliferation Treaty, which means that the IAEA, nuclear overseer headed by United Nations has no control over the Indian activities under the military nuclear program.
India and Pakistan tested their nuclear weapons in 1998, which started off an arms race between the neighbors and also put china, Asian superpower, in an uncomfortable position.
In a news issued last week, defense research group disclosed that the Indian nuclear plant is set to expand and by the mid-2015 it could achieve the capacity to produce a weapons-grade uranium in large amount. The nuclear facility will soon be capable to produce at least 160 kg of weapons grade uranium per year or enough uranium to make five atom bombs- this exceeds the required amount for nuclear-powered submarines, said IHS Jane.
The takeover bid of £85 billion from Pfizer has been rejected by AstraZeneca on the grounds that it undervalued the UK Company and also that it posed a number of risks. AstraZeneca’s shares have dropped by 14% to reach the £41.45 per share mark.
The chairman of AstraZeneca, Leif Johansson, told that the US Company expected a better quoting price than Pfizer’s offer of £55 a share. This way it could prove to be the biggest foreign takeover of a UK company. With Pfizer quoting £53.50 a share, it wasn’t agreeable for AstraZeneca that expected the bid to be at least 10% higher that could put the value of AstraZeneca at about £74 billion. Although Pfizer placed the final bid at £55 a share, along with the increase in the cash portion of the bid from 33% to 45% that included the rest of the amount to be paid in Pfizer shares.
According to Johansson, Pfizer hadn’t told the UK Company about the increased bid and portrayed £53.50 as the final bid. This let the Anglo-Swedish company to believe that this bid was an undervaluing approach for the company’s estimates to produce new drugs as an independent business. He also suggested that Pfizer’s strategy to move itself to the UK for tax issues and its reputation with reducing the research expenditure could jeopardize the future of the merger.
Johansson said: “Pfizer’s approach throughout its pursuit of AstraZeneca appears to have been fundamentally driven by the corporate financial benefits to its shareholders of cost savings and tax minimization. From our first meeting in January to our latest discussion yesterday, and in the numerous phone calls in between, Pfizer has failed to make a compelling strategic, business or value case. The board is firm in its conviction as to the appropriate terms to recommend to shareholders. We have rejected Pfizer’s final proposal because it is inadequate and would present significant risks for shareholders, while also having serious consequences for the company, our employees and the life-sciences sector in the UK, Sweden and the US.”
The refutation of the deal seems to put an end to the battle between the two firms only if the AstraZeneca shareholders do not change their mind to accept Pfizer’s latest attempt. Johansson said, “I have no idea. This has been going on for quite some time and in very deep engagement over the whole of the weekend. Pfizer now says this is the final offer – I have to believe them at what they say.”
With Pfizer chasing AstraZeneca, the shareholders have a different opinion in all of the shareholders with some calling for AstraZeneca to negotiate with Pfizer while there are others who have acknowledged AstraZeneca’s board member for refusing the bid.
The shadow business secretary Chuka Umunna, said on Twitter that AstraZeneca had rejected Pfizer’s “fast buck” business mentality, “I very much welcome the rejection of Pfizer’s final offer by the board of AstraZeneca. The right decision for the company and for the country. We don’t want to see the takeover of great British firms driven by financial engineering – we want them to be driven by long-term investment.”