There has been some significant policy initiatives to meet India’s infrastructure and Make in India goals. Here is a snapshot of some highlights from the past few months. As international interest and pour in, the Indian government needs to ensure there is no slow-down on the policy front.
AIIB to fund Modi schemes
Indian Prime Minister Narendra Modi has asked senior officials to approach the bank after a meeting with AIIB president Jin Liquin last month. The funds will be used for some of the PM’s projects in agriculture, rural housing and railways.
Last month, India was elected to the board of directors of the AIIB. India is a founding member and second-largest shareholder of the AIIB, which has its headquarters in Beijing with a capital of $100 billion.
According to a note circulated by the Department of Economic Affairs, Modi has asked the officials to seek AIIB loans for the Pradhan Mantri Krishi Sinchayee Yojana (Prime Minister’s Agricultural Irrigation Scheme) or PMKSY, rural housing programme and railway projects. The finance ministry has asked the ministries of agriculture, rural development, water resources and railways to prepare proposals for loans from the new bank.
The World Bank and the Indian Railways will work together to create a Railway Development Fund that will partly finance the $142 billion investment plans for the core infrastructure sector.
Prabhu said: “Our idea is to get part of this plan funded by multilateral bodies and the World Bank, that has global experience and access to technology, is a good partner.”
He also said the government has now allowed 100 per cent foreign direct investment (FDI) in rail sectors such as construction, operation and maintenance of suburb corridors, and coach manufacturing and maintenance facilities. The IFC could help Indian Railways to monetise its huge assets, he added.
World Bank was likely to work with global pension funds, among others, to raise money for the new fund.
The proposed grid will have details of upcoming projects as well as those that are underway besides land available with the Centre, states, their agencies and public sector undertakings. It is aimed at boosting private sector investments across the length and breadth of India.
The Department of Industrial Policy & Promotion (DIPP), which is discussing the idea with states as part of the Invest India programme, hopes such a grid will highlight projects and make it easier for investors to access and explore their potential.
Invest India has been functioning as a joint venture of DIPP, state governments and the Federation of Indian Chambers of Commerce & Industry (FICCI), with a mandate to be the first reference point for the global investment community.
Hitachi’s Make in India ATMs
Japanese technology giant, Hitachi has plans to expand its ATM operations in India.
Hitachi-Omron Terminal Solutions has announced setting up of Hitachi Terminal Solutions India Private Limited as an ATM manufacturing company in India. The new company has been set up with a capital of $15 million (Rs 100 crore) and is set a target to produce 1,500 units of ATMs per month at the end of calendar year 2016.
Tetsuji Shimojo, representative director and president, Hitachi-Omron Terminal Solutions, said: “Hitachi-Omron Terminal Solutions entered the cash recycling ATM market in India at an early stage and has been providing ATMs that are suited to India’s environment, considering the quality, condition and usage of the banknotes, and solutions corresponding to needs of operational efficiency of financial institutions and the deposits of users.”
The company said in a statement: “India is one of Asia’s largest ATM markets on account of the country’s high economic growth rate of (around) 7 per cent and because it is the world’s second most populous country. The Indian ATM market is expected to continue to expand in future.”
Otis forays into Make in India
US-based Otis Elevator Company’s Indian arm is expanding its manufacturing in India to escalators and customised elevators.
Sebi Joseph, president of Otis Elevator Company (India) Ltd, said: “India is the second largest market for elevators in India, at 48,000 installations every year. It is also slowly migrating towards high-speed elevators.”
Second to China (500,000 installations a year) in volume terms, the Indian market in value terms would also be among the top 10 markets for elevators and escalators in the world.
The company already builds elevators in India in Bengaluru and has doubled its capacity in 2015 by spending $14.6 million in the expansion.
Kia Motors’ India entry
South Korea’s second-largest automobile manufacturer and a subsidiary of Korean auto giant Hyundai, Kia Motors, is all set for an India entry.
The report says that Kia has already started preliminary work on identifying land for its factory in India and is looking at possible models and suppliers. It has also completed report on the feasibility study of the Indian market.
The Korean auto-giant has been eyeing the Indian market for many years. The slowdown here over the past few years and its own expansion projects in many other markets, including top-seller China, resulted in a delay in investments.
While the maker is making moves to get into the Indian market soon, it will still take them 2-3 years to start selling cars in India.