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Karmayogi

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Indian tractor market is largest in the world 9 April 2001, Economic Times, By Neena Puri

INDIA has achieved the distinction of being the biggest tractor market in the world. Those in for the long haul must accept industry cycles as part of the game, T L Palani Kumar, Managing Director, New Holland Tractors (India) Ltd, tells Neena Puri.

Q. What is your take on the Indian tractor industry, considering that since the time you have entered it has been on a downward track?
A. India is an agricultural economy in different stages of tractorisation and farm mechanisation. The fact is that the world tractor market is estimated at about 8 lakh tractors per annum and the Indian market constitutes about 36 per cent of this, the largest in the world. Given this scenario, we could not have ignored this huge Indian tractor market.

Q. Why are you entering the medium HP tractor range now?
A. The Indian tractor market, if segregated between small (upto 25 HP), medium (26-45 HP) and large (over 45 HP) tractors, reveals a size of 20 per cent, 60 per cent and 20 per cent respectively. Hence, it naturally makes business sense for us to enter the biggest segment of the market. Since, our technical expertise was in higher HP tractors, we made an entry with what we already had in hand, with an aim to gradually enter the medium sized tractor segment, which constitutes the largest chunk. In fact, we are targeting the commercial launch of a 42 HP tractor by the end of this month.

Q. Do you see the removal of QRs on tractors and the lowering of import duty on second hand tractors as a threat to indigenous manufacturing?
A. Yes, there has been a fall in duty on second hand imports of tractors from 67 per cent previously to about 63 per cent now. However, despite this, I do not perceive the import of second-hand tractors as a threat. The reason being that these imported tractors will still be higher priced than indigenously manufactured tractors. The cost base for manufacturing tractors in India still remains very efficient. And given the price sensitivity of Indian farmers, I don’t see a market for these tractors, except a few stray cases.

Q. But if 50 per cent of the tractors in Sri Lanka, which is our neighbour and quite similar to India in terms of its demographic profile, is imported why can’t it happen in India?
A. But the majority of the imported tractor population in Sri Lanka is Indian tractors. So, Indian manufacturers need not worry too much on this count! Here, I would also like to add that these imports also have the potential for exposing the Indian farmer to globally acceptable features of tractors, to some extent.

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How India Is Breaking Its Shackles (INDIA UNBOUND By Gurcharan Das) 16 April 2001, Business Week review, By Pete Engardio   India Unbound is one of the most readable and insightful books to appear on India's tortuous economic path in its 54 years since shaking off British rule.

Das, a retired Procter & Gamble executive and newspaper columnist, seems to be speaking mostly to Indians. But Westerners would also do well to read it - especially those who find themselves drawn to the growing political crusade against globalism. Many are still convinced that, somewhere, there is a viable alternative to market capitalism that can bring both prosperity and equity to the world's masses. India's story should be sobering.

The failure of India's brand of socialism can't be blamed on brutal dictators. It was fostered by benevolent leaders such as Mohandas K. Gandhi and Jawaharlal Nehru, and nurtured by a parliamentary political system. Nor can it be said that India stuck rigidly to one path. India's business leaders share the blame for the debacle. Many of them acquiesced to massive regulation in return for an easy life making shoddy goods that were protected from competition. Not until its sweeping market reforms of the 1990s, mandated as part of an International Monetary Fund bailout, did India begin its economic revival as a dynamic hub of software, Internet, pharmaceutical, and media concerns.

Das is exuberant about what is happening today. India, he writes, is "on the brink of the biggest transformation in its history." Nationalism, inflexible labor laws, terrible infrastructure, and poor education remain hindrances. But the Information Age is igniting an Indian renaissance. He chronicles the many software and Net tycoons who have put India back on the global map. What's more, he believes, the process is becoming irreversible: As every village gets connected to the outside via cable, satellites, and the Net, bureaucrats are fast losing the control over information that is essential to their power. "We have realized that our great strength is our people," he says. "Our great weakness is our government. Our great hope is the Internet."

Das asserts that, having blown the industrial revolution, India can "leap right into the information revolution." Services will create many more jobs than manufacturing anyway. The fact that Das now consults for a venture-capital fund with stakes in an array of dot-coms partly explains his enthusiasm for the Net. With its wealth of engineering talent, cheap labor, and one of the world's biggest domestic markets, why can't India be world-class in manufacturing as well as information services? Why cede such a powerful growth engine to China?

While the book is hopeful, he also makes it clear throughout that India, Internet or no, still has lots of work to do before its renaissance is secure.

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Indians become top kingmakers in the US
Excerpts from US Census Bureau (reported in Times of India)

• Indian American median family income is $60,000 as against the national median family income of $38,885.
• About 300,000 Indian Americans work in technology firms in California's Silicon Valley. The average income of Indian Americans in that region is estimated to be $125,000 a year.
• The estimated annual buying power of Indian Americans in the US is around $20 billion.
• Indians are running Fortune 500 companies. Rono Dutta is president of United Airlines, and Rakesh Gangwal is president and CEO of US Airways. Calcutta-born Rajat Gupta, a member of the American Indian Foundation, is managing director of consulting giant McKinsey & Co.
• About one-third of the engineers in Silicon Valley are of Indian descent, while 7 per cent of valley high-tech firms are led by Indian CEOs. Some successes are well known, such as Vinod Khosla, co-founder of Sun Microsystems, and Sabeer Bhatia, who founded HotMail and sold it to Microsoft for $400 million.
• The number of Indian American New Economy millionaires is in the thousands. Massachusetts' Gururaj Deshpande, co-founder of a number of network-technology companies, is worth between $4 billion and $6 billion.
• Other prominent Indians who have become symbols of success for the Indian community are Dr Kalyani Chawla who became the first Indian American to fly in a US space shuttle; Walt Disney paid Manoj Night Shyamalan $2.5 million for the screenplay of the movie The Sixth Sense.
• Two Indians, Har Gobind Khurana of MIT and the late S. Chandrashekhar have gone on to win the Noble prize in medicine and physics.
• The visit of former US President Bill Clinton to India, as head of an Indian delegation to collect funds for victims of the Gujarat earthquake, has focused attention on the rapidly rising influence that the two million strong Indian American community in the US has come to enjoy.
• According to the US Census around 35 per cent of Indian Americans have been naturalized. Along with close to half a million United States born Indian-Americans who are already US citizens, the Indian-American community comprises a formidable voting force.
• In recent years, however, they have begun taking a more direct role in politics, as well as continuing to help through their financial contributions. Perhaps the highest profile effort to play a direct role in politics is by Kumar Barve, a US-born Indian American, a delegate for several terms in the Maryland assembly.
• Several Indian-Americans have held the position of mayor. Examples are Bala K. Srinivas in Hollywood Park, Texas, John Abraham in Teaneck, New Jersey, and Arun Jhaveri in Burien, Washington.
• During his India visit, the Ambanis will be among the privileged few who will lunch with Clinton and there are reports that Clinton is being appointed as a board member of Reliance, with an annual salary of $1 million. InfoUSA CEO Vinod Gupta will host Clinton for a day.

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Indian firms embrace biotechnology - Biotechnology is seen as a growing industry 6 April, 2001, BBC, By Crispin Thorold     Last year, India successfully prevented a US company patenting basmati rice.

After India's software revolution, biotechnology is being described as the next big thing to hit the country. Multinational and Indian research companies are investing heavily in the industry, encouraged by biotechnology-friendly policies.

Politicians and policy makers believe that as well as creating wealth, the growth in biotechnology may bring medical and ecological breakthroughs. Biotechnology, like IT, is knowledge intensive. This gives India's highly qualified, English speaking but relatively cheap work force a real commercial advantage.

Biotech strategies Realising the potential economic benefits, a number of forward-thinking ministers have launched biotechnology strategies. In the southern state of Tamil Nadu, one of the world's leading agricultural scientists, Professor M S Swaminathan, helped draw up the local policy.

Mr Swaminathan was the creator of India's "green revolution", a scheme that massively increased crop yields in the late 1960s. He believes that by improving infrastructure and encouraging investment "socially beneficial" biotechnology can flourish. "We will invite entrepreneurs, non-resident Indians, or even outsiders," he said. "We welcome anyone who shares our vision of reaching the unreached, or including the excluded in terms of technological benefit."

Facilities being built to attract businesses include a biotechnology park near Madras, medicinal plants laboratories near the temple-town Madurai, and a marine centre in the south of the state.

An existing women's biotechnology park, on the outskirts of Madras, will continue to be supported by the government, and a Bioinformatics and Genomics Centre will be opened at the state's main IT industrial park.

Natural resources
As well as this new infrastructure, overseas investors are drawn by India's enormous natural resources. Tamil Nadu alone has 5,000 species of flowering plants and 22,500 square kilometres of forests. The area also has a sizeable section of India's 7,500 km coastline. It is part of the ecological treasure trove that is the basis of much of the local biotechnology.

An estimated 60% of the world's population live within 60 km of the sea. For them, global warming is a real threat to food security. Topsoil will be washed away leaving marshy saline soil, an environment in which conventional crops won't grow. It's a problem researchers at the M S Swaminathan Research Foundation are trying to resolve.

"Our scientists have mapped mangrove trees. They grow in the estuaries, between seawater and fresh water and they have genes for seawater tolerance. We have identified those genes and transferred them to a number of crops, including mustard, tobacco, pulses and rice," says Professor Swaminathan.

In medicine as well as agriculture, India's ecosystem has much to offer. Many Indian tribes turn to traditional healers who use locally found plants to treat diseases.

Biopiracy
Multinational companies have realised the potential of these remedies in drug development. In the recent years, overseas firms have rushed to patent chemicals from natural sources that have been used locally for hundreds of years. These include turmeric, neem, and ginger.

This "biopiracy", which for many people is nothing less than the theft of indigenous resources and know-how, is being combated to some extent in the courts. But there is real concern about the motives of the multinational companies who are investing in India.

In a recent report, the Confederation of Indian Industry said the national market in biotechnology was now valued at $2.5 billion, a fivefold increase since 1997. By 2010, the Indian industry could be worth $4.5 billion. It may be small fry compared to the United States, which has an annual biotechnology turnover of $20 billion, but India is now a major player in the global industry.

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