Madame Nurupama Rao, Indian Ambassador to the United States

May. 3 – Nirupama Rao, the Indian Ambassador to the United States, has said that while cooperation on bilateral issues between India and the United States (U.S.) remains on track, aspects such as technology and energy have become a focal point of the ties between the two countries.

“Technology is very much a driver in this relationship, especially high technology. I’m talking of strategic trade, trade concerning such areas as civil aviation, biotechnology, space sciences, nanotechnology,” Madame Rao said. “And all this I would argue should, if I have a wish list for the future, become infused with much greater dynamism than they have been in past. So we have to focus our efforts and intensify the work we need to do in these areas.” Continue Reading

May. 3 – Ikea has become the latest multinational corporation (MNC) retailer to plant its feet in the fast reforming Indian market. India’s Cabinet Committee on Economic Affairs cleared a 1.5 billion euro (US$2.4 billion) investment plan by Ikea on Thursday this week which formally paved the way for the Swedish retail giant to set up shop in Asia’s third-largest economy.

“Yes, [the Ikea investment] is cleared,” Information and Broadcasting Minister Manish Tewari said.

India’s Foreign Investment Promotion Board (FIPB), which clears foreign investment proposals in the country, gave its approval to Ikea’s investment proposal last February. However, given the significant investment amount, the proposal still needed the final approval of the federal government. Continue Reading

May. 2 – Unilever has earmarked a whopping US$5.4 billion to increase its equity stake in its Indian joint venture (JV). As Indian rules relax concerning the amount of equity foreign corporations can hold in JV’s, Unilever has taken the opportunity to increase its stake in Hindustan Unilever (HUL) from 52.5 percent to the maximum 75 percent permitted. HUL manufactures well known brands such as Dove soap, Flora margarine and many others.

Unilever is offering a premium of 36 times next year’s earnings to acquire the stake. GlaxoSmithKline has recently done the same in lifting its stake in its own Indian JV from 43.2 percent to the maximum 75 percent threshold.

“The long heritage and great brands of Hindustan Unilever, and the significant growth potential of a country of 1.3 billion people, makes India a strategic long-term priority for the business,” said Paul Polman, Unilever’s Chief Executive. Continue Reading

May. 2 – The World Bank recently released the latest edition of its India Development Update, which states that the Indian economy is trending upwards and would likely grow by 6.1 percent in 2013 thanks to the country’s robust domestic demand, strong savings and good investment rates of return.

Martin Rama, the World Bank’s Chief Economist for South Asia, expressed hope.

“Despite the current downturn, long-term prospects remain bright for India. India possesses the fundamentals to grow at sustained high rates over the next several decades,” he said.

In recent months, India’s wholesale price index-based inflation and trade deficit have declined, with inflation falling below 6 percent. Inflation is expected to decline even further thanks to expectations regarding the rupee and a good monsoon season. India’s current account deficit, which reached a record high of 6.7 percent during the fourth quarter of 2012, is also expected to narrow. Continue Reading

By Sondre Ulvund Solstad

May 1 – The Indian Government has granted in-principle approval for the establishment of 12 National Investment and Manufacturing Zones (NIMZs) throughout India. According to the official press release from the Indian Ministry of Commerce and Industry, India seeks to create industrial townships which will be benchmarked to be the best manufacturing hubs in the world.

The NIMZs are central to the government’s national manufacturing policy, which aims to increase the share of manufacturing to 25 percent of the country’s GDP while also creating 100 million jobs over the next decade. Manufacturing currently accounts for 16 percent of India’s economic output. Continue Reading

By Dezan Shira & Associates, Delhi Office

Apr. 30 – Payroll , or employee compensation management, is a multifaceted process. As part of payroll, businesses generally compute and withhold government taxes like social security and individual income taxes from an employee’s salary. Many companies also have benefit plans like health insurance, which include deductions of premiums from its employees’ salaries according to employee customization, adding another layer of activity for payroll processing.

To help shed some light on this complicated process, in this article we discuss allowances (including housing and leave travel assistance) and the benefits of outsourcing payroll. Continue Reading

Apr. 26 – In several recent statements both to the press, international investors, and the Indian parliament, India’s President, Prime Minister, and Finance Minister have stated that they are confident in returning to seven or eight percent annual growth as early as 2015. They have also stressed that foreign direct investment (FDI) is critical in this regard, signaling further facilitation in the times to come.

“We are confident that we will return to 7-8 percent growth bracket in the next two to three years,” said President Pranab Mukherjee on Tuesday, speaking to the IFTDO’s World Conference and Exhibition in New Delhi. “We need to revitalize investment in the country for this purpose. We welcome foreign investment which has a critical role in bringing in modern technology and globalizing our economy.”

Prime Minister Manmohan Singh recently expressed similar sentiments to the Indian Parliament. Continue Reading

Apr. 25 – The World Bank has listed India as the world’s largest recipient of remittances from its overseas diaspora in 2012 after having received over US$69 billion in remittances.

Following India is China (US$60 billion), the Philippines (US$24 billion), Mexico (US$23 billion), Nigeria (US$21 billion) and Egypt (US$21 billion). Pakistan, Bangladesh, Vietnam and Lebanon are also on the list of large recipients.

Remittance flows to developing countries reached US$401 billion in 2012, a 5.3 percent year on year increase. This number is expected to grow by an average of 8.8 percent annually over the next three years to reach US$515 billion by 2015. Remittance flows to South Asia increased by 12.8 percent to US$109 billion. Continue Reading