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Issue 92 | April 2016Strictly for Private Circulation
Key Macroeconomic Highlights of FY15
MACROECONOMIC UPDATE
n Real Gross Value Added (GVA) at basic prices grew at an average rate of 7.3% during Apr-Dec FY16 as compared to 7.4% during Apr-Dec FY15. The agriculture, industry and services sectors grew by 0.6%, 7.4% and 9.2% respectively during Apr-Dec FY16 as against 0.3%, 5.9% and 10.7% respectively during Apr-Dec FY16.
n The Private Final Consumption Expenditure (PFCE) grew by 6.1% during Apr-Dec FY16, while Government Final Consumption Expenditure grew by mere 3.3% during Apr-Dec FY16.
n During Apr-Feb FY16, the Index of Industrial Production (IIP) registered a growth of 2.6% (y-o-y) against 2.8% (y-o-y) in the corresponding period of the previous fiscal.
n The mining and manufacturing sectors grew by 2.4% and 2.3% respectively during Apr-Feb FY16, while growth in electricity sector witnessed significant moderation to 5.1% during Apr-Feb FY16 as against 9.1% during Apr-Feb FY15.
n During FY16, combined CPI inflation moderated to 4.9% as compared to 6.0% in FY15.
n During FY16, WPI reported a decline of 2.5% as against a growth of 2.0% during FY15.
n Growth in bank credit revived to 11.3% (y-o-y) as on Mar 18, 2016 as against 9.0% (y-o-y) during the corresponding period of the previous fiscal.
n India's exports declined by 16.7% during Apr-Feb FY16, while imports declined by 14.7% during Apr-Feb FY16 leading to a trade deficit of US$ 113.4 billion during Apr-Feb FY16 as against a trade deficit of US$ 126.3 billion during Apr-Feb FY15.
n The current account deficit narrowed to US$ 22 billion (1.4% of GDP) during Apr-Dec FY16 as against US$ 26.2 billion (1.7% of GDP) during Apr-Dec FY15.
E: D&B estimateSource: CSO
*Up to Feb-16; Source: Ministry of Commerce and Industry
India's exports & imports (US$ bn) Macroeconomic triad (estimate)
Note: Exchange rate: INR/US$ at month endInterest rate corresponds to yield on T-Bills 15-91 daysSource: D&B Industry Research Service
FY16
Inflation-2.5%
%
Interest rate6.9%
Exchange rate66.3
cursorIndustryCONTENTS
Logistics & Supply Chain
Commercial Vehicle
Gems & Jewellery
Hi-Tech
Banking
Hospitality
IT-Hardware
Passenger Vehicle
Textile & Garment
Steel
Retail
Two and Three-Wheeler
2
4
5
7
6
8
3
9
10
11
15
14
13
12
Macroeconomic Update
Auto Components
Healthcare & Pharmaceutical
IIP and core infrastructure: Growth (%)
*Upto Feb-16Source: Ministry of Commerce & Industry, CSO
GDP: Growth (%)
Agriculture Industry ServicesEight core industries IIP
Exports (LHS) Imports (RHS)
-2
0
2
4
6
8
10
12
FY14 FY15 FY16 (E)
Gross value added at basic prices
-4.0
0.0
4.0
8.0
12.0
16.0
20.0
FY0
8
FY0
9
FY1
0
FY1
1
FY1
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FY1
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FY1
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FY1
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FY1
6*
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AUTO COMPONENTS INDUSTRY
n Nipman Fasteners Industries entered into a technical tie-up with South Korea's IL-Ryung Co to manufacture steering components and subassemblies at an investment of about US$ 35 million.
n Hitachi Automotive Systems India, part of the Hitachi Group, set up an auto parts manufacturing facility with an investment of ` 3.13 billion to cater to domestic and overseas markets.
n Tata AutoComp GY Batteries, a JV between Tata AutoComp Systems and GS YUASA International of Japan, inaugurated a manufacturing facility for valve regulated lead-acid batteries, at Ranjangaon near Pune.
n Integral Component Manufacturers Pvt Ltd entered into a JV with Japan-based Nishuira Seiko Co Ltd to cater to Japanese clients in India and abroad.
n Apollo Tyres opened first branded retail outlet 'Apollo Zone' in Lebanon, taking the total branded retail outlet in the West Asian region to three after Dubai and Kuwait. The company also forayed into two wheeler tyre segment with the launch of Apollo Acti series for bikes and scooters.
n Mahindra & Mahindra Ltd entered into an agreement to sell its entire 71.19% stake in Swaraj Automotives Ltd, a manufacturer of seats and seat mechanisms, to b4S Solutions for ̀ 248.4 million.
n Tyre manufacturer Ceat made a foray into the tubeless tyre segment for scooters with the launch of Milaze tubeless tyres in the country.
n ZF Hero Chassis Systems, a 50:50 JV between ZF India and Hero Motors opened its new plant in Oragadam, Chennai to assemble front and rear chassis systems for BMW cars.
Key Highlights of FY16
Rubber prices* (Kottayam)(`/quintal)
Steel prices (Mumbai) (`/tonne)
*Rss-4 CMIESource for all above charts:
Major Expansion Announcements during FY16
n US-based Vehicle Access Systems Technology acquired 50% stake in Minda Corporations' venture manufacturing vehicle keys and access systems.
n Apollo Tyres acquired Reifencom GmbH, one of the largest tyre distributors in Germany, for Euros 45.6 million (` 3.2 billion).
n As part of its strategy to venture into commercial heat treatment, surface coating and metallurgical services, Kalyani Group, through its arm Kalyani Technoforge acquired the Indian operations of Bodycote, a player in thermal processing services.
n Elgi Rubber Co Ltd acquired US retreading equipment manufacturer American Equipment Manufacturing Inc.
n Continental acquired 100% stake in Emitec Emission Control Technologies. n Amtek Auto Ltd acquired the Iron & Aluminium Casting, Forging and Machining
business of Asahi Tec Corporation. The company also acquired Volvo Cars' auto component plant in Floby, Sweden.
n LyondellBasell entered into a definitive agreement for acquiring polypropylene compounds (PPC) manufacturer, SJS Plastiblends Pvt Ltd.
n Singapore-based PE firm Everstone Capital acquired over 51% in domestic auto components maker SJS Enterprises for ̀ 3.5 billion.
n Pricol Ltd sold its 100% shareholding of its wholly owned subsidiary company, Coimbatore Metal Works Ltd for ̀ 130 Million.
n Rane (Madras) Ltd's wholly owned subsidiary Rane (Madras) International Holdings B V (WOS) in Netherlands entered into share purchase agreement with US-based PDC Holdings Inc to acquire Precision Die Casting Inc with an investment of US$ two million.
n Heating, ventilation and air conditioning systems maker Lloyd Electric and Engineering acquired Noske-Kaeser's rail and vehicles business in Germany, New Zealand, Australia, Brazil and the US for Euros 2.3 million.
Auto Components: Key financial indicators
Parameters Units Q3FY15 Q4FY15 Q1FY16 Q2FY16 Q3FY16
Net sales ` bn
` bn
` bn
Rs bn 301.9 307.8 305.5 310.2 300.7
y-o-y growth % 6.7 2.0 0.7 -0.1 -0.4
Operating profit Rs bn 39.8 42.8 47.2 47.5 16.9
y-o-y growth % 11.7 13.8 15.7 13.4 10.1
Net profit Rs bn 14.6 17.7 20.3 21.1 16.9
y-o-y growth % 8.7 14.4 28.8 20.7 15.4
Operating profit margi % 13.2 13.9 15.5 15.3 14.6
Net profit margi % 5.1 4.8 5.1 5.2 5.6
Note: Operating profi t: PBDIT net of prior period and extra-ordinary items (P&E) & Other income; Net profi t: PAT net of P&E;
Source: CMIE
0
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DONEDONEDONEDONEDONEDONEDONE
BANKING INDUSTRY
n Interest rates of Small Saving Schemes recalibrated w.e.f. Apr 1, 2016 on a quarterly basis to align the small saving interest rates with the market rates of the relevant government securities.
n The Regional Rural Banks (RRB) Amendment Bill was passed by the Parliament. The Bill seeks to help RRBs to raise their authorised capital and enables them to raise funds from the capital market.
n The Union Budget FY17 provided ̀ 250 billion towards recapitalisation of public sector banks.
n The Union Cabinet approved 100% foreign direct investment under the automatic route for white label ATMs to promote financial inclusion and ease and expedite foreign investment inflows.
Key Highlights of FY16Deposits, credit and growth rates
%` bn
Deposits (LHS) Credit (LHS)
y-o-y growth rates of deposits (RHS)
y-o-y growth rates of credit (RHS)
Note: Data for Mar-16 is as on Mar 18, 2016
Note: Call rates for Apr-16 are up to Apr 13, 2016Source for all above charts: RBI
Movement in call money rates (%)
Call money rate- High (%)
Call money rate- Low (%)
Key RBI Announcements in FY16
n The RBI reduced repo rate twice by total 75 basis points during FY16 to 6.75% as at end of the fiscal.
n The RBI released guidelines (effective from Apr 1, 2016) on computing interest rates on advances based on the marginal cost of funds (MCLR).
n The RBI issued new norms for Strategic Debt Conversion (SDR) which gave lenders the right to convert their outstanding loans into a majority equity stake if the borrower fails to meet conditions stipulated under the restructuring package. It also allowed banks to acquire 51% or more stake in companies, where debt restructuring has failed to revive them within a stipulated timeframe.
n Measures were announced to further open debt and currency markets which include upward revision of the present US$ 30 billion ceiling for foreign investments in government bonds by ̀ 1.2 trillion by March 2018 in stages, and allowing overseas funds to purchase debt issued by Indian states.
n The RBI widened the pool of international investors eligible to lend to Indian companies and also eased repayment options.
n The RBI announced two measures that would enable higher remittances and also ease the process of raising funds through external commercial borrowings (ECB). The limit on trade-linked remittances trebled to ̀ 15 lakh from the earlier ` five lakh, and banks can now regularize payments exceeding the limit if they are satisfied with the bonafide of the transaction. The RBI also allowed overseas banks to enter into swaps with other overseas banks besides domestic banks to facilitate disbursals of rupee loans by overseas lenders.
n The target for direct lending to small and marginal farmers under the norms was increased to 7% for FY16 and to 8% for FY17.
n The RBI granted in-principle nod to 11 applicants including Aditya Birla Nuvo, Airtel M Commerce Services, Department of Posts, Fino PayTech, National Securities Depository Ltd, Reliance Industries, Tech Mahindra and Vodafone m-pesa to set up payments banks.
n Ten microfinance and small finance companies received 'in-principle' nod from the RBI to start small finances banks across the country. These include Au Financiers, Capital Local Area Bank, Disha Microfin, Equitas Holdings, ESAF Microfinance and Investments, Janalakshmi Financial Services, RGVN (Northeast) Microfinance, Suryoday Micro Finance, Ujjivan Financial Services and Utkarsh Micro Finance.
n The RBI designated State Bank of India (SBI) and ICICI Bank as domestic systemically important banks requiring them to keep aside additional capital to cover risk.
n The RBI permitted promoters, or investors to own more than 10% stake in a private bank if the applicant meets certain conditions including if 'it is in public interest' and in the 'desirability of diversified ownership'.
0
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0
2
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Ap
r-1
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Jun
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Jul-
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Au
g-1
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Sep
-15
Oct
-15
No
v-1
5
Dec
-15
Jan
-16
Feb
-16
Mar
-16
Ap
r-1
6
DONEDONEDONEDONEDONEDONEDONE
COMMERCIAL VEHICLE INDUSTRY
n FY16 saw a 12.2% growth in domestic sales of commercial vehicles after witnessing a decline of 1.1% in FY15. Exports of CVs, recorded growth of 16.9% in FY16 as against 12.8% in FY15.
n The Supreme Court hiked the green cess on commercial vehicles by 100%.
n Japanese auto major Isuzu signed a Memorandum of Understanding with the Andhra Pradesh Government to facilitate investment by its suppliers in the state under the Automobile and Auto Component Policy 2015-20. Seven auto component companies nominated by Isuzu Motors India also signed MoUs with the state government.
n German auto major Daimler inaugurated its new bus manufacturing facility at Oragadam, near Chennai with a manufacturing capacity of 1,500 units.
n Tata Motors launched a small commercial vehicle, Tata ACE Mega. The company also launched its next generation range of 'Ultra' commercial vehicles in Bangladesh in partnership with Nitol Motors Ltd.
n Tata Motors received an order for the supply of 1,200 units of high-mobility multi-axle trucks from the Indian Army.
n Mahindra & Mahindra Ltd (M&M) announced setting up of a new start-up venture called Trringo, the first ever organised rental service for the sector. With an initial investment upwards of ̀ 100 million by M&M, the startup is hopeful of establishing a presence in five states (Maharashtra, Gujarat, MP, Karnataka and Rajasthan) by end of Aug-16. The company also plans to invest ` 80 billion in its automotive plants in Maharashtra over a period of seven years for infrastructure development, product development and capacity expansion.
n Mahindra & Mahindra Ltd launched several variants of its light commercial vehicle Jeeto range. Jeeto is the first product in its category with a modular range of eight mini trucks catering to the varied needs of the sub-one tonne segment.
n Deccan Auto Ltd set up a bus manufacturing plant with a capacity to produce 3,000 buses in Telangana. The plant is set up with an investment of ` 2.5 billion and will serve both domestic and export markets in Asia and Africa.
n Volvo Group launched its customer financing arm Volvo Financial Services in India offering loans, leases, insurance, maintenance, and other aftermarket services, to customers and dealers of the Volvo Group and VE Commercial Vehicles Ltd.
n Eicher Trucks and Buses, part of the Volvo Eicher Commercial Vehicles launched Eicher Live - an advanced telematics solution for the commercial vehicle industry. Eicher Live provides real time dashboard data analytics of the fleet, tracking fuel management and fault identification.
n Volvo Buses India merged with Volvo India Pvt Ltd. In another development, Volvo Buses partnered with the Navi Mumbai Municipal Transport to introduce hybrid buses in the country under a pilot project which will commence in the first half of 2016.
n China-based, Foton Motor received all licenses including environmental clearance for setting up ` 1.7 billion plant near Pune to manufacture a range of vehicles including SUVs, vans and trucks.
n Ashok Leyland expanded its design and service training centre at its Ras Al Khaimah (RAK) manufacturing facility in UAE.
n Daimler Trucks Asia launched DICV-made FUSO trucks in South Africa, making it one of the largest market for exports from India.
n Ashok Leyland bagged an order for 680 vehicles and spare parts in January 2016 worth US$ 50 million from the Ministry of Local Government, Public Works and National Housing, Government of Republic of Zimbabwe.
n The state of Himachal Pradesh plans to introduce inter-state electric buses for which Central Government has sanctioned ̀ 350 million.
n The Delhi government decided to run 1,000 new air-conditioned low-floor buses on public-private partnership (PPP) model in the national capital.
n Swedish automotive manufacturer Volvo received an order for supply of 11 electric hybrid buses and 2 electric bus chargers to the city of Namur in Belgium.
n VE Commercial Vehicles, a 50:50 JV of Swedish commercial vehicle maker Volvo AB and Gurgaon-based Eicher Motors to set up a marketing company in South Africa to scale up its exports to the continent.
n Daimler Trucks Asia opened two new regional centres at Nairobi and Pretoria in Africa for its Fuso brand. These regional centers will be responsible for sales and service of all Daimler brands in 41 markets in East, Central and West Africa, and will cover 9 markets of Southern Africa. The company also commenced CKD production of the new robust FUSO range at the AVA assembly plant in Mombasa, Kenya.
Key Highlights of FY16
Global News
Commercial vehicle sales (Nos.)
Commercial vehicles: Key financial indicators
Trend in domestic CV sales
Trend in domestic Passenger Carriers sales
Done
Segments Feb-15 Feb-16 y-o-y growth (%) Apr-Feb FY15 Apr-Feb FY16 y-o-y growth
(%)
M&HCV 21,616 29,035 34.3 2,03,039 2,65,236 30.6
LCV 30,382 33,324 9.7 3,45,619 3,40,603 -1.5
Total domestic sale 51,998 62,359 19.9 5,48,658 6,05,839 10.4
Exports 7,428 8,250 11.1 77,468 91,146 17.7
Total sales 59,426 70,609 18.8 6,26,126 6,96,985 11.3
Source: CMIE
Parameters Units Q3FY15 Q4FY15 Q1FY16 Q2FY16 Q3FY16
Net sales ` bn 131.5 163.1 141.6 164.7 150.3
y-o-y growth % 26.8 31.4 28.0 28.7 14.3
Operating profit ` bn -8.3 5.9 8.1 11.6 9.2
y-o-y growth % N.A. N.A. N.A. N.A. N.A.
Net profit ` bn -20.8 -8.5 4.8 2.1 1.9
y-o-y growth % N.A. N.A. 31.6 N.A. N.A.
Operating profit margin % -6.3 3.6 5.8 7.0 6.1
Net profit margin % -15.7 -5.2 3.2 1.2 1.2
Note: Operating profi t: PBDIT net of prior period and extra-ordinary items (P&E) & Other income; Net profi t: PAT net of P&E;N.A.: Not Applicable (Losses incurred); Source: CMIE
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Trend in domestic Goods Carriers sales
Segmental trend in CV exports (Nos)
Source for all above charts: CMIE
Change (RHS)Sales (LHS)
Change (RHS)Sales (LHS)
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Passenger carriers Goods carriers
GEMS AND JEWELLERY INDUSTRY
n Gems and jewellery exports declined by 12.4% (y-o-y) to US$ 29.4 billion during Apr-Feb FY16 due to slowdown in global demand, while imports declined by 23.4% (y-o-y) to US$ 21.7 billion during Apr-Feb FY16.
n The Gem & Jewellery Export Promotion Council (GJEPC) and Bharat Diamond Bourse (BDB) launched the 'India Diamond Trading Centre' (IDTC) in Mumbai, marking a significant milestone in 'Make in India' campaign to promote India as a global diamond - trading hub. The IDTC special notified zone is spread across 4,000 sqft at the Bharat Diamond Bourse (BDB), with nine fully equipped viewing rooms as per international standards, a strong room, a conference room, and state-of-the-art security systems.
n India Bullion Jewellery Association Ltd (IBJA) announced the launch of 'World Silver Council' that will help in ending ambiguity and malpractices in trading by following a benchmark standard for the precious metal, thus benefiting consumers.
n The country's first B2B portal for the gems and jewellery industry, myheera.com was launched in New Delhi, with an aim to provide complete business solutions to industry players on a single online platform.
n The Cabinet approved gold bond and gold monetisation schemes. The gold bond scheme has been proposed to develop a financial asset as an alternative to gold and decrease demand of gold in physical form. The gold monetisation scheme has been proposed to attract individuals and other entities that hold physical gold by offering interest on deposit of gold. The gold deposited with the agencies will be loaned to jewellers, which is expected to bring down import demand from the jewellery manufacturing sector.
n The RBI made amendments in the 'Gold Monetisation Scheme', according to which depositors will be allowed to withdraw medium term and long term government deposits pre-maturely after the minimum lock-in period, though with a penalty. In the case of large tenders of gold, the metal can be deposited directly with refiners wherever they have the assaying capacity.
n The Government of Maharashtra announced its decision to set up a jewellery and knowledge smart city in the state to promote the growth of the gems and jewellery sector.
Key Highlights of FY16
Major Policy Announcements during FY16
Gems & Jewellery Exports & Imports (` bn)
Note: * Outstanding investments as of March every year
Gold prices in Mumbai market
Price (LHS) Change (RHS)
`/10 gm %
Gems & Jewellery: Investment scenario* (` bn)
n The Board of Directors of Rajesh Exports accorded approval to form a subsidiary in Europe to sell jewellery in Europe. The Board also approved acquisition deals of US$ 250-500 million in Europe to enhance the domestic and global presence of the company in gold business and to strengthen its backward integration.
n Rajesh Exports acquired Valcambi for US$ 400 million in an all-cash deal. The company purchased the stakes of Newmont Mining Corporation and a group of global investors to own 100% equity in Valcambi.
n PC Jewellers acquired bridal jewellery brand Azva from World Gold Council. n Tara Jewels signed an exclusive manufacturing and supply agreement with
Sterling Jewelers Inc (USA) for the designer brand Angel Sanchez. n Diamonds Direct and Blackstone announced that funds managed by Blackstone
Tactical Opportunities have acquired Diamonds Direct, a leading US independent jewellery company.
n LVMH announced to take a minority stake in the Italian Jeweller Repossi to support its growth plan.
n De Beers Consolidated Mines signed an agreement to sell Kimberley Mines (including the tailings mineral resources) to Ekapa Minerals (Pty) Limited - an investor consortium. The consortium comprises Ekapa Mining (Pty) with a share of 50.1% and Petra Diamonds Limited with a share of 49.9%.
Major Mergers & Acquisitions during FY16
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Exports Imports
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Source for all above charts: CMIE
*Up to Feb-16
HEALTHCARE & PHARMACEUTICAL INDUSTRY
n The pharmaceuticals sector continued its growth momentum on account of increasing penetration of healthcare services, and higher healthcare spending by private and public players.
n Foreign investments into the pharmaceuticals industry slowed down in FY16 (Apr-Dec) to US$ 352 million, as compared with US$ 1,216 million in FY15 (Apr-Dec).
n Exports of drugs were markedly higher, posting a 9.9% year-on-year gain in FY16 (up to Feb) at US$ 15.4 billion compared with nearly US$ 14.0 billion in the corresponding period a year ago.
n A spate of mergers and acquisitions were announced during FY16, with the most prominent ones being between Sun Pharma and Ranbaxy, Lupin and Gavis, Cipla and InvaGen, Cipla and Exelan.
n A draft national medical device policy was issued in FY16. The policy, which proposes a new regulatory body, the National Medical Device Authority of India, as the apex body for the devices industry, aims to strengthen the 'Make in India' initiative and reduce dependence on imports.
n The government took a host of measures to bring fair practices into play in the sector. The National Pharmaceutical Pricing Authority, which monitors prices of medicines in the country, sought changes to the existing Drug Price Control Order, 2013 and proposed a fine on those violating pricing norms.
n A seven-member panel Drugs Consultative Committee was formed to look into the issue of online sales of drugs.
n Manufacture and sale of over 300 drug combinations sold without approval from the Central Government was banned.
n The national list of essential medicines was revised to add 106 more drugs while 70 other drugs, which are not prescribed frequently or where better alternatives are available in the market, were taken off the list.
n Plans to set up ` 500 crore pharma technology upgradation fund to facilitate cheaper loans to companies looking to upgrade their manufacturing facilities.
n The centre also aims to set up a 100-acre pharma park in Karnataka in a bid to boost the industry.
n Customs duty exemption on three drugs mainly used for treatment of hormonal disorders, growth failure, and haemophilia, was retained.
n Global pharma firm Mylan received government approval to invest US$ 750 million in its Indian arm to help it to acquire Jai Pharma Ltd.
n Switzerland-based Ferring Pharmaceuticals proposed to invest US$ 100 - US$ 250 million for setting up a facility in the upcoming Pharma City on the outskirts of Hyderabad.
n Apollo Hospitals Enterprise aims to add 1,370 beds at six locations with an estimated cost of ̀ 15.5 billion by 2018-19
n Indoco Remedies plans an investment of `1.25 billion for expansion of its sterile ophthalmic facility at Goa and for setting up a green field API facility at Patalganga.
n Kyowa, a wholly-owned subsidiary of Lupin, plans to install a manufacturing unit at Tattori in Japan, in line with the company's expansion plans in the country.
n Mankind Pharma entered into the US market with an investment of ̀ three billion to set up a manufacturing plant in New Jersey.
n Strand Life Sciences acquired 68% stake in a US-based diagnostic firm Venaxis.
n Piramal Enterprises acquired five brands from Organon India Pvt Ltd and MSD BV for ` 920 million to beef up its offerings in the over-the-counter (OTC) healthcare segment.
Key Highlights of FY16
Major Policy Announcements during FY16
Major Announcements during FY16
Trend in Drugs and Pharmaceuticals export
Trend in Drugs and Pharmaceuticals import
Drugs & Pharma: Investment scenario* (` bn)
*Upto Feb-16
*Upto Feb-16
*Outstanding investments as of March every yearSource for all above charts: CMIE
Value (LHS)
Value (LHS)
Change (RHS)
Change (RHS)
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1
FY1
2
FY1
3
FY1
4
FY1
5
FY1
6*
0
50
100
150
200
250
300
350
Mar
-07
Mar
-08
Mar
-09
Mar
-10
Mar
-11
Mar
-12
Mar
-13
Mar
-14
Mar
-15
Mar
-16
HI-TECH INDUSTRY
Civil aviation: Cargo statistics (mail tonne km in mn)
Civil aviation: Load factor (%)
Source for all above charts: CMIE
Major Policy Announcements during FY16
n The Government of India set up a fund of ` 100 billion to boost electronic manufacturing, to promote innovation, research and product development in electronics, nano electronics and IT.
n Haryana State Industrial & Infrastructure Development Corporation signed MoU with Jaina Mobiles Industries for setting up of an electronics cluster in Industrial Model Township Sohna, district Mewat, Haryana. The government of Maharashtra approved a new electronics policy which aims to create one lakh jobs over the next five years and attract investments of U$ three billion.
n The Government of India approved the proposal of setting up Electronic Manufacturing Cluster (EMC) in Chhattisgarh's upcoming capital Naya Raipur.
n The government banned the sale of entry-level one-star ACs in the Indian market and introduced improved energy efficiency guidelines for frost-free refrigerators.
Key Highlights of FY16
n During FY16 (up to Dec), the electronics sector received FDI equity inflows of around US$ 191.72 million.
n Government granted in-principle approval for building 15 greenfield airports to handle the increasing air traffic in the country. This includes Mopa in Goa, Navi Mumbai, Shirdi and Sindhudurg in Maharashtra, Bijapur, Gulbarga, Hasan and Shimoga in Karnataka.
n Taiwan Electrical and Electronic Manufacturers' Association signed a MoU with the Government of Karnataka's KIADB to set up US$ 500 million Taiwan Electronic Manufacturing Cluster near Bengaluru.
n United Technologies signed a MoU with the Government of Haryana to set up an eight-acre unit in Gurgaon to manufacture air-conditioners, creating 2,000 jobs in the process.
n Etihad Airways invested nearly ̀ 20 billion in Jet Airways.
n Turbo Megha Airways received flying permit or air operation permit from the Directorate General of Civil Aviation.
n Haier signed a memorandum of understanding with the Maharashtra Government to invest ̀ 3.70 billion in its Pune plant to scale up operations.
n Godrej & Boyce Manufacturing Company entered into a technology license agreement with Sure Chill Company, a UK based company for manufacturing and marketing of medical refrigerators in India.
n Crompton Greaves sold its 50% holding in JV, CG Lucy Switchgear, to its partner W Lucy & Company for ̀ 400.2 million.
n Hitachi acquired 100% stake in its subsidiary Hitachi Hi-Rel Power Electronics Pvt Ltd that manufactures and sells power electronics products in India.
Civil aviation: Airport traffic statistics (FY16*)
*Upto FebSource: CMIE
-40%
-30%
-20%
-10%
0%
10%
20%
30%
40%
-40
-30
-20
-10
0
10
20
30
40
FY1
2
FY1
3
FY1
4
FY1
5
FY1
6*
Mail tonne km (LHS) % growth (RHS)
* Up to Feb
Passenger load factor Weight load factor
0
10
20
30
40
50
60
70
80
90
FY1
1
FY1
2
FY1
3
FY1
4
FY1
5
FY1
6*
* Up to Feb-16
Parameters Aircraft traffi c Passenger traffi c Cargo traffi c
Nos. y-o-y growth (%) Nos. y-o-y
growth (%) Tonnes y-o-y growth (%)
Domestic traffic 1,291 12.5 153,404 20.9 956 5.8
International 342 8.5 49,927 7.6 1,502 7.0
Total airport 1,633 11.6 203,332 17.3 2,458 6.5traffic
traffic
HOSPITALITY INDUSTRY
Major Expansions during FY16
Major Announcements during FY16
n Thomas Cook acquired Swiss tour operator Kuoni Group's business in India and Hong Kong for around ` 5.35 billion. In another development, Thomas Cook (India) Ltd entered into a strategic partnership with OYO Rooms offering access to over 3,200 hotels, spread across over 140 cities pan India.
n SAMHI Hotels acquired a five-star hotel from Ahmedabad-based Sidhi Gujarat Hospitality for an estimated ` 1.35 billion. The company also acquired Hyatt Regency in Pune from RK Jatia Group-owned Ascent Hotels for an estimated ` 3.5 billion.
n Hello Curry, a Hyderabad-based Indian fast food chain, acquired food delivery start-up Paratha Post.
n R&A Foods, which operates the Paninaro and Pronto brands, acquired quick service restaurant chain Pico Express in an all-stock deal.
n Bengaluru-based MRG Hospitality and Infrastructure acquired the four-star business hotel Aura Grande in Mumbai for ̀ one billion.
n Mirah Hospitality aquired a 30% stake in Gritty Foods LLP-owned brand Hopping Chef.
n InterContinental Hotels Group signed a management pact with Adyar Gate Hotels for InterContinental Chennai Mahabalipuram Resort, to join InterContinental Marine Drive as the second hotel under its luxury brand in India.
n Mexican-style quick service restaurant chain Taco Bell announced its expansion into New Delhi through a tie-up with Burman Hospitality Pvt Ltd, its first franchisee partner in India.
n Malaysian restaurant chain Manhattan Fish Market launched its first outlet in India in Chennai.
n Swosti Group announced the launch of a luxury resort at Chilika lake in Odisha at an investment of over ̀ 0.8 billion.
n The Hinduja Group took acquisition of the heritage building, Old War Office in London, from the British Ministry of Defence. The company plans to restore and redevelop the 1,100-room structure into a five-star hotel and residential apartment.
n Paytm partnered with RoomsTonite to offer last minute hotel bookings.
n The 'Tourist Visa on Arrival-Electronic Travel Authorization (TVoA-ETA) scheme' was renamed as 'e-Tourist Visa' (eTV) in a bid to avoid inconvenience to tourists who, misled by the scheme's name, presumed visa would be granted upon arrival in India.
n The Government of India identified five ITDC-run hotels for privatisation as part of its plan to disinvest eight such loss-making properties. The properties in which the stake to be offloaded were Hotel Janpath, Hotel Patliputra Ashok; Hotel Bharatpur Ashok and property at Kosi; Hotel Donyi Polo Ashok and Hotel Pondicherry Ashok.
n Kolkata-based Mani Group signed a MoU with the tourist department of the government of Rajasthan to set up an organic resort in Nagaur, at an investment of US$ 1.1 billion.
n Growth in foreign tourist arrivals moderated to 5.7% (y-o-y) in FY16 (up to Feb-16) as compared to 9.3% (y-o-y) in the corresponding period of FY15. Foreign tourist arrivals in India stood at 7.4 million during Apr-Feb Fy16.
n Outstanding investment projects in the hotels & tourism sector stood at ` 1,162.75 billion in FY16 (up to Dec-15) compared with ` 1,128.00 billion in FY15 (up to Dec-14).
Key Highlights of FY16Foreign tourist arrivals in India('000 nos.)
Foreign exchange earnings
Earnings (LHS) Change (RHS)
FDI equity inflows in hotels & tourism sector (US$ mn)
* Apr-Dec FY16** Apr-00 to Dec-15Source: DIPP
*Up to Feb-16Source: CMIE
*Up to Feb-16Source: CMIE
-6
-1
4
9
14
19
24
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
FY0
7
FY0
8
FY0
9
FY1
0
FY1
1
FY1
2
FY1
3
FY1
4
FY1
5
FY1
6*
No. of tourists (LHS) Change (RHS)
'000 %
-20
-10
0
10
20
30
40
0
5
10
15
20
FY0
7
FY0
8
FY0
9
FY1
0
FY1
1
FY1
2
FY1
3
FY1
4
FY1
5
FY1
6*
%US$ bn
3,259
486777 945
8839
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
10,000
FY13 FY14 FY15 FY16* Cumulative**
IT HARDWARE INDUSTRY
n Domestic computer hardware and peripheral production remained relatively stagnant (-0.1%) in FY16 (upto Jan 16). Production of personal computers rebounded to 5.1% during Apr-Jan FY16 as compared to a sharp decline of 40.1% in the corresponding period a year ago. However, production of computer peripherals slid 10.7% during Apr-Jan FY16, casting a shadow over the overall production figures.
n During FY16 (up to Dec 15), FDI equity inflows into the computer software and hardware industry increased to US$ 5,306 million.
n Hewlett-Packard split into two companies effective November 1, 2015 - HP Inc. consisting of personal computers and printers; and Hewlett Packard Enterprise (HPE), dealing in servers, data storage, networking and consulting services.
n Foxconn signed a US$ five billion pact with the Maharashtra State Government to set up units in Maharashtra and manufacture Iphones, IPads, Laptops and silicon chips.
n Intel India signed an agreement with Telangana government to develop an electronics component manufacturing ecosystem in the state.
n The Union Budget 2016-17 announced withdrawal of exemption from basic customs duty, countervailing duty and special additional duty on certain parts, components and accessories in the manufacture of personal computers, laptops, mobile phones and tablets, and their sub-parts.
n The Budget retained excise duty of 2% without CENVAT credit or 12.5% with CENVAT credit on tablet computers.
n Excise duty has been exempted on inputs, parts and components, subparts for manufacture of charger/adapter, battery and wired headsets/speakers of mobile phone, subject to actual user condition.
n HCL Technologies acquired US-based CRM services provider, PowerObjects for US$ 46 million. In a separate move, HCL Technologies inked a deal with Swedish auto major Volvo to take over its external IT business for US$ 138 million.
n Japanese printer firm Konica Minolta, through its sales subsidiary Konica Minolta Business Solutions India, acquired the production printing business of Monotech Systems, which was the company's distributor in India.
n IBM India entered into a seven-year strategic relationship with BTI Payments Pvt Ltd, to transform its IT infrastructure.
n FIH Mobile Ltd, a subsidiary of Foxconn Technology Group made an investment to acquire a 10% stake in MoMagic technologies to further strengthen FIH's business presence in India.
n Optiemus Infracom Ltd and Wistron Corporation entered into a joint venture agreement to set up manufacturing facilities for telecom products in India.
n Times Internet invested US$ 15 million to acquire a majority stake in Taskbucks, a mobile-only tasks marketplace that matches consumers with brands and enterprises on its unique platform.
n Qualcomm Incorporated and Lenovo Group entered into a new 3G and 4G patent license agreement for China, which covers devices marketed by both Motorola and Lenovo. Under the terms of the agreement, Qualcomm granted Lenovo a royalty-bearing patent license to develop, manufacture and sell 3Gand 4G, including 3-mode complete devices.
n Competition Commission of India gave its nod to the US$ 37 billion acquisition of Broadcom Corporation by Avago Technologies Ltd.
Key Highlights of FY16Domestic computer hardware& peripheral production (` bn)
*Up to Jan-16Source: CMIE
Key Policy Announcements during FY16
Major Acquisitions and Joint Ventures during FY16
0
5
10
15
20
25
30
35
40
FY1
2
FY1
3
FY1
4
FY1
5
FY1
6*
LOGISTICS & SUPPLY CHAIN INDUSTRY
Key Highlights of FY16
Major Announcements during FY16
n The National Waterways Bill, 2015, was passed by the Parliament. Under the bill, 106 additional inland waterways are added to the list of national waterways, taking the number to 111.
n The Union Cabinet approved exchange of Airports Authority of India's land measuring 11.45 acres at Visakhapatnam Airport with an equivalent area offered by the Visakhapatnam Port Trust for setting up of a multi-modal logistics park by Container Corporation of India.
n Delhi Mumbai Industrial Corridor Trust and Japanese IT firm NEC Corporation signed a shareholders' pact with 50:50 equity participation to establish a Logistic Data Bank (LDB) which will be operated by a special purpose vehicle.
n Considering the growing export-import cargo traffic of Bengaluru, a direct container train service was announced between Container Corporation of India's Whitefield Depot in Bengaluru and Krishnapatnam Port on the Eastern Coast to cater to customers in the region.
n Singapore-based Genshipping Pacific Line started its Indian operations with its company name Genshipping Pacific Line (India) Pvt Ltd headquartered in Chennai.
n GVK Mumbai International Airport Ltd along with its strategic technology partner Kale Logistics Solutions launched India's first Cargo Mobile App as an extension to its air cargo community platform, GMAX. The app enables complete vehicle tracking within the air cargo complex, i.e. right from the entry gate to the vehicle gate-out.
n ASR Logistics India Pvt Ltd established a new division in Dubai in the name of ASR Cargo LLC Dubai to provide complete logistics solutions to the customers operation from the Gulf and to focus on transportation and warehousing services in UAE.
n Aegis Logistics received the allotment of three acres of land at Mangalore Port to build a storage terminal. The land has been allotted on a lease for a period of 30 years by New Mangalore Port Trust.
n CMA CGM, a Marseilles-based group, through its logistics arm CMA CGM LOG, acquired 60% stake in logistics operator LCL Logistix, to expand its forwarding and intermodal operations.
n LetsTransport acquired Bengaluru-based Shifter, a mini truck service provider. n Blue Dart Express Ltd acquired additional 21% stake in Blue Dart Aviation Ltd
thus making it a subsidiary with the majority shareholding of 70%.n Logistic service provider Parsel merged with a third party logistics provider
Ecom Solutions. n Delhi-based logistics and delivery start-up Turant Delivery acquired Bengaluru-
based logistics service provider Zippon. n TVS Asianics Supply Chain Solutions, the Singaporean JV of TVS Logistics
acquired a majority stake in Australia-based Transtar. n Air Liquide group subsidiary, CRYO International acquired pharma logistics firm,
PDP Couriers.n Hyperlocal delivery start-up Grofers acquired business-to-business logistics
service provider Townrush.n FM Logistic acquired majority stake in Pune-based Spear Logistics from Ambit
Pragma.n Great Eastern Shipping to close down Great Eastern Shipping Co London
Limited, its wholly owned subsidiary in UK.n European supply chain operator, GEODIS entered into an agreement to acquire
US third party logistics firm, Ozburn-Hessey Logistics.n The GEFCO Group signed an agreement with PE fund Nimbus to acquire the
Dutch company IJS Global, a freight forwarding company specialising in air and sea freight operations.
Investment scenario: Logistics* (` bn)
*Transport logistics services; Outstanding investments as of March each yearSource: CMIE
0
100
200
300
400
500
600
700
800
Mar
-06
Mar
-07
Mar
-08
Mar
-09
Mar
-10
Mar
-11
Mar
-12
Mar
-13
Mar
-14
Mar
-15
Mar
-16
PASSENGER VEHICLE INDUSTRY
n During FY16, domestic sales of multi-utility vehicles cars recorded decent growth of 12.1%. Exports of multi-utility vehicles grew significantly by 54.1% during FY16.
n During FY16, several PV manufacturers announced capacity up-gradation and parts distribution centres to meet the growing demand. - Mercedez-Benz started its second manufacturing facility in Chakan, Pune thereby doubling capacity to 20,000 units per annum.p Honda Cars is expanding the capacity at its Tapukara, Rajasthan plant from
1.2 lakh units to 1.8 lakh units, with an investment of ̀ 3.8 billion. p Nissan Motor India inaugurated its new regional parts distribution centre at
Luhari in Gurgaon district. p Jaguar Land Rover India started its parts distribution centre in Bhiwandi near
Mumbai.n During FY16, several PV manufacturers made several attempts to tap the
growth potential in the overseas market. Honda Cars India initiated the export of Jazz to South Africa from its Rajasthan plant. Mahindra & Mahindra set up a separate business unit to tap the African market. Tata Motors' subsidiary Jaguar Land Rover to invest US$ two billion to build a plant in Slovak Republic.
n Mahindra & Mahindra and Ford Motors signed MOU with Tamil Nadu Government. M&M signed MOU to invest ̀ 20 billion, including investments in Mahindra Research Valley (MRV), a new test track for MRV and an automotive plant while Ford Motors signed MOU for augmenting manufacturing capacity and building a global engineering and technology center in Tamil Nadu.
n In Union Budget 2016-17, infrastructure tax of 1% was levied on small petrol, LPG, and CNG cars. Similarly, 2.5% and 4% levied on diesel cars and higher engine capacity vehicles such as luxury cars and SUVs respectively. Further, government plans to levy 1% cess on luxury cars that cost over ̀ one million.
Key Highlights of FY16Passenger cars: Domestic sales (Nos)
Utility vehicles: Domestic sales (Nos)
Source for all above charts: CMIE
n Tata Motors announced its new IMPACT Design language for its upcoming passenger vehicles. With the recently unveiled ZICA as the first new product under this design language, the IMPACT Design forms the over-arching design brand which stands for 'Immediate IMPACT at first sight. Lasting IMPACT over time.’
n The Japan-based Isuzu Motors incorporated a new company called Isuzu Engineering Business Centre India Pvt Ltd in India.
Major Announcements during FY16
Passenger vehicle sales (Nos)
Source: CMIE
Segments FY15 FY16 y-o-y growth (%)
Micro cars 16,901 21,012 24.3
Mini cars 5,24,247 5,42,632 3.5
Compact cars 10,80,413 11,90,562 10.2
Super compact cars 47,284 72,676 53.7
Mid-size cars 1,86,584 1,81,168 -2.9
Executive cars 20,206 15,324 -24.2
Premium cars 2,064 2,105 2.0
Vans 1,71,395 1,77,535 3.6
Passenger cars 20,49,094 22,03,014 7.5
Multi-utility vehicles 5,52,135 5,86,664 6.3
Domestic sales 26,01,229 27,89,678 7.2
ExportsExports 6,21,341 6,53,889 5.26,21,341 6,53,889 5.2
Total sales 32,22,570 34,43,567 6.9
-8
-6
-4
-2
0
2
4
6
8
10
1,500,000
2,000,000
2,500,000
FY1
2
FY1
3
FY1
4
FY1
5
FY1
6
Domestic sales (LHS) % growth (RHS)
-10
0
10
20
30
40
50
60
0
100000
200000
300000
400000
500000
600000
700000
FY1
2
FY1
3
FY1
4
FY1
5
FY1
6
Domestic sales (LHS) % growth (RHS)
RETAIL INDUSTRY
n Retail industry continued its upward streak in FY16, buoyed by robust growth in retail sales and strong prospects of future economic growth. Online retail sales charted higher growth on the back of growing popularity of mobile commerce, extensive penetration of smart phones and tablets, and easy access to internet.
n The government relaxed foreign direct investment (FDI) norms for 15 sectors including retail trade. The government eased norms to spur growth of e-commerce space and relaxed restrictive local sourcing conditions for single-brand retailers.
n Manufacturers were allowed to sell their products through wholesale and/or retail, including through e-commerce without government approval.
n The government also approved 100% FDI in e-commerce marketplaces subject to certain stipulations, which is aimed at bringing fair-play into the market and remove malpractices or monopolies in the segment.
n Sports apparel giant Adidas AG became the first foreign sportswear company to receive government nod to open 100% foreign-owned stores in India.
n Furniture retailing giant IKEA acquired its first piece of land in India in Hyderabad to build a retail store, entailing an investment of around US$ 75 - US$ 90 million. It also signed an MOU with the Haryana government to open stores in the state with an investment of around ` 20 billion. In addition, the company also signed MoU with the Governments of Uttar Pradesh, Telangana, Karnataka and Maharashtra to roll out its large outlets.
n Alibaba.com opened its first physical trade facility centre in the country at Jaipur and a hindi portal.
n The Department of Posts tied up with more than 400 e-commerce agencies like Flipkart, Amazon and Snapdeal for delivering e-commerce pre-paid and cash-on-delivery (COD) orders.
n Grocery chain operator BigBasket raised US$150 million in fresh funding from UAE's Abraaj Group and other investors with a view to expand into smaller cities.
Key Highlights of FY16
n The Future Group agreed to merge its retail business with Bharti Retail in an all-stock deal valued at an estimated ̀ 7.5 billion.
n Aditya Birla Group merged its retail apparel businesses into a single entity called Aditya Birla Fashion & Retail Limited (ABFRL). Further, Aditya Birla Retail Limited (ABRL) agreed to acquire Total Superstore, the retail division of Jubilant Agri & Consumer Products in an all-cash deal. As part of the deal, ABRL announced to acquire the leasehold rights to four Total hypermarkets in Bengaluru.
n Retail chain V-Mart announced investments worth ` 2 billion for adding about 200 new stores across the country over the next five years.
n Dogo, a Turkish brand entered the Indian market through an alliance with e-commerce portal FashionAndYou. Dogo sells bags, footwear, clothes, accessories and home décor products.
n Department store chain Shoppers Stop entered into a deal to launch its own store on online marketplace Snapdeal.
n Dutch food retailer SPAR, in partnership with Max Hypermarkets, plans to operate 25 hypermarket stores by 2017.
n Walmart India plans to add 50 more cash-and-carry stores in India over the next four to five years.
n International Finance Corporation plans to invest nearly US$ 25 million (` 1.7 billion) in Lenskart Solutions with a view to expand its investment portfolio in online retailers.
Major Announcements in FY16
STEEL INDUSTRY
n India's finished steel production bounced back, posting a modest growth of 0.6% in FY16 (up to Feb) as compared with a drop of 2.6% witnessed in the corresponding period a year ago.
n Consumption of finished steel also spurred up 4.2% in FY16 (up to Feb) after declining 1.7% in the same period of the previous year.
n Steel imports amounted to ` 360.73 billion in the Apr-Jan period of FY16, clocking a 24% (y-o-y) increase as compared with nearly 75% (y-o-y) increase in FY15.
n The government plans to set up four steel plants in Jharkhand, Karnataka, Odisha and Chhattisgarh and the Steel Ministry is in the process of facilitating setting up of SPVs for these mineral-rich states.
n Tata Steel commissioned the first phase (three million tonnes per annum) of its six MTPA capacity Kalinganagar Steel Plant - the largest single-location green-field steel project in India - in Odisha.
n Steel Authority of India Limited (SAIL) and National Mineral Development Corporation (NMDC) inked a deal to set up a three million tonne ultra-mega steel plant (UMSP) with an investment of ̀ 180 billion.
n The government imposed duties in the range of US$ 180 and US$ 316 per tonne on certain industrial-grade stainless steel imported from China, Malaysia and South Korea, and these will be valid for a period of five years.
n A minimum import price (MIP) ranging from US$ 341 to US$ 752 per tonne has been imposed on 173 steel products to provide relief to the domestic steel industry. New MIP rates would be applicable for a period of six months from the date of notification i.e. Feb 5, 2016.
n The Directorate General of Safeguards levied a provisional safeguard duty of 20% on imports of hot-rolled flat products of non-alloy and other alloy steel, with a view to cushion domestic manufacturers from recent upsurge in shipments from countries like China.
n The safeguard duty of 20%, which will be reduced to 10% in stages over the next two years, shall not be imposed on steel products which are imported at or above the minimum import price (MIP).
n Import duty on flat steel products was hiked from 7.5% to 10% and on long steel products from 5% to 7.5%.
n Import duty on selective steel products was raised by 2.5%. Import duty on semi ingots products, stainless steel long products, alloy steel long products, non-alloy long products and alloy steel flat products increased to 10%. Import duty on non-alloy flat products and some specified alloy steel products raised to 12.5%.
n The Union Steel Ministry issued Stainless Steel Products (Quality Control) Order 2015 to introduce stringent quality norms and curtail rising imports.
n The Government issued an advisory to large steel companies to increase R&D investment up to 1% of sales turnover for development of value added products that are import substitutes.
n SAIL plans to invest around ` 1,500 billion to increase its steel production from 24 million tonnes (MT) to 50MT by 2025.
n Rashtriya Ispat Nigam Ltd plans to enhance its capacity to 16 million tonnes per annum (MTPA) by 2025 with an investment of ̀ 350 billion.
n Mesco Steel plans to invest ` 135 billion over the next three to five years to increase annual capacity to 4.5 MT.
Key Highlights of FY16
Major Policy Announcements of FY16
Major Expansion Announcements during FY16
Trend in HRC and CRC prices- Mumbai (`/tonne)
Finished Steel Production
Growth in exports & imports of finished steel (%)
Steel: Investment scenario (` bn)
*Outstanding investments as of March every yearSource for all above charts: CMIE
*Upto Dec
ImportsExports
0
2000
4000
6000
8000
10000
12000
14000
16000
Mar
-06
Mar
-07
Mar
-08
Mar
-09
Mar
-10
Mar
-11
Mar
-12
Mar
-13
Mar
-14
Mar
-15
Mar
-16
-60.0
-40.0
-20.0
0.0
20.0
40.0
60.0
80.0
FY0
6
FY0
7
FY0
8
FY0
9
FY1
0
FY1
1
FY1
2
FY1
3
FY1
4
FY1
5
FY1
6*
*Upto Feb
0
5
10
15
20
25
0.00
20,000.00
40,000.00
60,000.00
80,000.00
100,000.00
FY0
6
FY0
7
FY0
8
FY0
9
FY1
0
FY1
1
FY1
2
FY1
3
FY1
4
FY1
5
FY1
6*
Finished Steel Consumption (LHS) Change (RHS)
'000 tonnes %
0
10,000
20,000
30,000
40,000
50,000
60,000
FY0
6
FY0
7
FY0
8
FY0
9
FY1
0
FY1
1
FY1
2
FY1
3
FY1
4
FY1
5
FY1
6
HR Coils (2.00 mm) CR Coils (1 mm)
n Production of fabrics during FY16 (up to Jan-16) showed a meager 0.7% growth to 54,589.8 million square metres (msm) from 54,189.9 msm in the same period a year ago. Yarn production was up 1.8% during Apr-Jan FY16, compared with 1.4% in the corresponding period of FY15.
n The textiles sector (including dyed, printed) received FDI equity inflows to the tune of US$ 1,414.5 million during FY16 (up to Dec).
n Amended Technology Upgradation Fund Scheme (ATUFS) was launched, providing 10% -15% subsidy on capital investments subject to certain limits across two broad sub-sectors of textile industry.
n The Government gave green signal to seven textile parks under SITP (Scheme for Integrated Textile Parks) in Rajasthan with a view to generate jobs and attract investments.
n The Federation of Hosiery Manufacturers' Association of India devised FOHMA Hosiery Cost Index (HOSEX) - a first-of-its-kind cost index for any textile industry segment in the country. HOSEX is aimed at enabling companies to benchmark their pricing to a systematic cost plus scenario and ensure the same is accepted by the market.
n The National Textile Corporation commenced e-auction of yarn on December 10, 2015 with a view to facilitiate greater transparency, efficiency and better price discovery.
n The US Government renewed generalised system of preference (GSP) benefits for Indian exporters, retrospectively from August 2013 till December 2017, enabling duty advantage on 3,500 product lines.
n The Union Budget 2015-16 allocated ` 14 billion towards the ATUFS and ` three billion for development of mega clusters in the textile sector.
n Basic customs duty reduced to 2.5% for textile raw materials used in technical textiles.
n Basic customs duty for certain specified fabrics reduced to zero provided the articles are imported to manufacture garment for export, and the total value of goods imported shall not exceed 1% of the Free on Board (FOB) value of textile garments exported during the preceding financial year.
n The Budget 2016 levied 2% excise duty without input tax creditor 12.5% with input tax credit on branded readymade garments and made-up articles of textiles having retail sale price of ̀ 1,000 or more.
n The government relaxed border trade norms with China. For border trade between India and China, the CIF value per consignment was increased from ` 100,000 to ̀ 200,000 in case of Nathula, while for Gunji and Namgaya Shipkila, the CIF value limit of ̀ 25,000 was enhanced to ̀ 100,000.
n The Cabinet Committee on Economic Affairs approved additional fiscal allocation to reimburse anticipated losses in disposal of cotton procured by Cotton Corporation of India (CCI) and Maharashtra State Cooperative Cotton Growers Marketing Federation Ltd (MSCCGMFL) under the minimum support price (MSP) operations during the cotton season 2014-15. The Committee also approved engaging the MSCCGMFL to undertake MSP operations as a sub-agent of the CCI during the cotton season 2014-15 (October-September).
n Raymond Ltd announced plans to invest $ five million to launch its products in the West Asian and African regions through its subsidiaries.
n China Small and Medium Enterprise Investment Ltd, a Chinese investment firm, signed a MoU with the Gujarat Government's Industrial Extension Bureau to set up a textile park near the industrial town of Sanand in Gujarat, in the first phase.
n Filatex India plans to set up manufacturing facilities of 100 MT/day of polyester fully drawn yarns at its existing unit at Dahej, entailing a cost of ̀ one billion.
n Grasim Industries announced a capex plan of ` 1.50 billion for product development, R&D and business development for its new fabric brand Livain FY17.
TEXTILE & GARMENT INDUSTRY
Key Highlights of FY16
Key Policy Announcements during FY16
Major Expansions Announced during FY16
Fabrics production(Million sq. metres)
Cotton and Synthetic yarn production ('000 tonnes)
Textiles: Investment Scenario* (` bn)
Source for all above charts: CMIE
*Up to Jan-16
*Up to Jan-16
*Outstanding investments as of March every year
-20.0
-15.0
-10.0
-5.0
0.0
5.0
10.0
15.0
20.0
48,000
50,000
52,000
54,000
56,000
58,000
60,000
62,000
64,000
66,000
FY1
2
FY1
3
FY1
4
FY1
5
FY1
6*
Fabrics Production (LHS) % growth ( RHS)
-6
-4
-2
0
2
4
6
8
5,000
5,200
5,400
5,600
5,800
6,000
6,200
6,400
6,600
6,800
FY1
2
FY1
3
FY1
4
FY1
5
FY1
6*
Yarn Production (LHS) % Growth (RHS)
0
100
200
300
400
500
600
FY0
7
FY0
8
FY0
9
FY1
0
FY1
1
FY1
2
FY1
3
FY1
4
FY1
5
FY1
6
TWO-WHEELER AND THREE-WHEELER INDUSTRY
Key Highlights of FY16
Major Announcements during FY16
Major Policy Announcements during FY16
n Domestic sales of two-wheelers grew by 2.7% (y-o-y) at 18.9 million units in FY16. Exports of two-wheelers during the same period recorded a growth of mere 0.97% at 2.48 million units.
n In FY16, domestic sales of three-wheelers increased merely by 0.25% to 0.94 million units. Exports of three-wheelers declined by 0.8% to 404,441 units during FY16.
n During FY16, several two-three wheeler manufacturers announced capacity up-gradation to meet the growing demand. Honda Motorcycle & Scooter India inaugurated its fourth manufacturing plant at Gujarat in India with a manufacturing capacity of 1.2 million units annually. Royal Enfield announced to double its production capacity to nine lakh units by 2018 with the setting up of its third plant in Tamil Nadu. India Yamaha Pvt Ltd announced to increase the production capacity at its new two wheeler plant in Tamil Nadu, from 4.50 lakh units to 18 lakh units by 2018.
n During FY16, several two & three wheeler manufacturers made several attempts to tap the growth potential in the overseas market. Piaggio India launched its first overseas operation in Nepal with the launch of Vespa in Kathmandu. Hero Moto Corp stated operations at its first plant outside India at Colombia with a production capacity of 80,000 units per annum. Royal Enfield set up a direct distribution subsidiary in the US, its first outside India, to cater to the North American market.
n Growing emergence of e-commerce led to many tie-up arrangements between online marketplaces and two-three wheeler manufacturers during FY16. Suzuki Motorcycle tied up with Snapdeal for the sales of its vehicles. Piaggio announced the launch of an online store in partnership with Snapdeal.com in India. Harley-Davidson also tied up with fashion portal Myntra to sell its casual merchandise through an exclusive online store.
n The year FY16 witnessed launch of some battery operated vehicles. Kinetic Group venture, Kinetic Green Energy and Power Solutions launched its indigenously designed battery operated e-three wheeler 'Kinetic Safar' priced at ` 1.28 lakh (ex-showroom Delhi). Mahindra launched its all electric scooter, GenZein the Californian city in US.
n Royal Enfield acquired UK-based Harris Performance Products Ltd, a motorcycle design and engineering firm acquiring all its assets, employees, trade names, technical know-how and intellectual property.
n Mahindra Two Wheelers Ltd acquired 51% stake in Peugeot Motocycles, a part of the France-based PSA Group.
n Hero MotoCorp entered into a tie up with Punjab National Bank to create a strong presence in the rural market by providing easy financing schemes.
n The Kinetic Group re-entered the two wheeler market by launching super bikes in partnership with Italian motorcycle manufacturer MV Agusta.
n Piaggio India opened its first Motoplex store in India in Pune. The company plans to open 90 such stores across the world with three to four stores to be opened in India.
n Insurance Regulatory and Development Authority made third party insurance mandatory for battery operated three wheeled vehicles.
Two-wheeler: Domestic sales volume (mn)
Three-wheeler: Domestic sales volume (Nos.)
Source for all above charts: CMIE
0
2
4
6
8
10
12
14
16
0
2
4
6
8
10
12
14
16
18
FY1
2
FY1
3
FY1
4
FY1
5
FY1
6
Domestic sales (LHS) % growth (RHS)
-15
-10
-5
0
5
10
15
440000
460000
480000
500000
520000
540000
560000
FY1
2
FY1
3
FY1
4
FY1
5
FY1
6
Domestic Sales (LHS) % growth (RHS)
Auto Components
Passenger vehicle
Commercial vehicle
2 & 3- wheeler
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