India’s partnership at Messe Hannover was indeed a great success

Strong Indian contingent led by the Prime Minister was able to clearly leave a powerful message for the Global Manufacturing Industry – to look at India as a major investment destination and the place to do business.

Hon’ble Prime Minister, Shri Narendra Modi and Her Excellency Chancellor of the Federal Republic of Germany, Angela Merkel addressing the audience at the Hannnover Messe

Mr Sumit Mazumder, President, CII with Hon’ble Prime Minister Shri Narendra Modi and Her Excellency Chancellor of the Federal Republic of Germany, Angela Merkel

The Make in India campaign was extremely well demonstrated through a truly world-class display at the Messe – particularly at the India pavilion. The city of Hannover also had the ‘Indian lion’ all around wrapped with messages from India.

The Prime Minister assured investors at the gala opening of the Hannover Messe that India will do its part – as an anchor of economic stability; an engine for growth; and, as a force of peace and stability in the world. He invited investors to do business and make in India – for India and the world.

The German Chancellor stated that “We have seen excellent examples of Indo-German cooperation at the Hannover Messe. We have also seen potential for growth, especially for German companies already present in India who wish to expand.”

The Ministry of Commerce and Industry led brilliant display and clear message hit home with German Investors by branding the Make in India slogan of the Government of India in a widespread manner in Germany.

Honble Minister of State for Commerce and Industry , Smt Nirmala Sitharaman at CII Pavilion at Hannover Messe

Hon´ble Minister of State (Independent charge) for Commerce and Industry at the Seminar on “Investment Opportunities in Andhra Prades”

Mr Rajeev Kher, Commerce Secretary, Government of India at CII Pavilion at Hannover Messe Also seen are Mr Sumit Mazumder, President, CII, Mr Chandrajit Banerjee, Director General, CII, Dr Naushad Forbes, President-Designate, CII and Mr Deep Kapuria, Chairman, Trade Fairs Council

Hon’ble Chief Minister at the Seminar on “Investment Opportunities in Maharashtra” on 13 April 2015 at Hannover Messe, Germany. Also seen are Mr Sumit Mazumder, President, CII; Mr Apurva Chandra, Principal Secretary-Industries, Govt of Maharashtra; Mr Chandrajit Banerjee, Director General, CII; Mr Subhash Desai, Industries Minister, Govt of Maharashtra; Mr Anand Kulkarni, Additional Chief Secretary-PWD, Govt of Maharashtra (R-L)

Mr Madan Mohan Mittal, Hon’ble Minister for Industries & Commerce, Technical Education & Industrial Training and Parliamentary Affairs, Government of Punjab addressing INVEST PUNJAB at Hannover Messe: Germany.

 

The Make in India Lion was hard to miss in Hannover. The Lion was spotted at the airport, on buses, on taxis as well as other key vantage points in the city as well as the Fair grounds.

 

 

 

 

 

Constructed by the Department of Industrial Policy and Promotion (DIPP), the India Pavilion projected India’s brand image by incorporating many of the key sectors of the Make in India campaign.

 

During a visit to the fair, the Indian Prime Minister showed the German Chancellor the strengths of India which was so well captured in this special section of the India pavilion. The Indian Commerce and Industry Minister accompanied the two leaders during the visit.

Indian industry also did not lag behind. A strong 40 member CEO’s delegation led by Mr, Sumit Mazumder, President, CII participated at the event. 350 Indian companies including the Tata Group, Reliance, Bharat Forge, State Bank of India and the Kirloskar Group showcased their strengths at Hannover Messe. CII also set up 3 stalls at Hannover Messe, Germany to showcase Brand India at the global event highlighting the industrial growth and business opportunities in the country.

(L-R) Mr Virendra Gupta, Deputy Director General, CII; Mr Deep Kapuria, Chairman, Trade Fairs Council; Dr Rajan Katoch, Secretary Heavy Industries, Ministry of Heavy Industries and Public Enterprises; Mr Vishvajit Sahay, J S Heavy Industries, Ministry of Heavy Industries and Public Enterprises at CII Pavilion at Hannover Messe

Mr. Cyrus P Mistry, Chairman, Tatasons at CII Pavilion at Hannover Messe on 13th April 2015. Also seen are Mr Sumit Mazumder, President, CII, Mr Chandrajit Banerjee, Director General, CII and Dr Naushad Forbes, President Designate, CII

 

CII President, Mr Sumit Mazumder in an interaction with Hon’ble Prime Minister, Shri Narendra Modi

The Indo German Business Summit co-organised by BDI-CII was very well attended especially by the CEOs of prominent German companies.

Hon’ble Prime Minister, Shri Narendra Modi addressing the gathering at the Indo-German Business Summit 2015

Her Excellency Chancellor of the Federal Republic of Germany, Angela Merkel addressing the Indo-German Business Summit 2015

 

 

 

 

 

 

 

 

It was indeed most encouraging to have the Prime Minister and the Chancellor address this business session.

Hannover Messe saw participation from 13 States and the North-East of India – they put up their displays to show-case a very healthy competitive India and how they have been attracting business and growing.

Some States had special sessions. Maharashtra CM made a strong pitch for investors to look at Maharashtra. Very well received. Some iconic international brands spoke strongly about the state’s industry-friendly attitude to a global audience.

The Commerce and Industry Minister spoke on the strengths of Andhra Pradesh as a potential investment destination. This added weight to the AP story. AP demonstrated how they are going about in building a powerful state.

The special session on ‘Make in India’ – Secretary, DIPP made an excellent presentation and many of the queries from the potential investors were answered.

Her Excellency Chancellor of the Federal Republic of Germany shaking hands with Mr Sumit Mazumder, President, CII at the Indo-German Business Summit

Overall mood and approach towards India very positive by Germany, other participating countries and also Industry from several other nations.

A high-powered Indian CEOs delegation from CII well supported the dynamic Government team led by Hon’ble PM.The best and a proud display and performance by India.  Kudos to Team India.

Mr Chandrajit Banerjee
Director General, CII

CII Recommends Capital Gains exemption on Transfer of Shares by Sponsor to REITs/InvITs

Exemp REITs/ InvITs from MAT and DDT at SPV level: CII

The Budget 2014-15 notified the norms where Real Estate Investment Trust (REITs)/ Infrastructure Investment Trust (InvITs) was provided the ‘pass through’ status for the purpose of taxation to attract long-term foreign and domestic investors. Later, SEBI had put in place the regulations for listing of new business trust structure that would help attract more funds in a transparent manner into the realty sector. However, much needs to be done on the tax structures of this instrument for it to become more efficient for domestic as well as overseas investors, stated CII in a press release issued here today.

For sponsors to structure REITs/ InvITs, there is a need to exchange shares in Special Purpose Vehicles (SPVs) with units of REITs/InvITs. Such exchange of shares is in reality not a commercial transaction as the stakeholders of shares of SPVs are the same as unit holders of REITs/InvITs. Hence, there is no sound basis of taxing such an exchange in the absence of real income. Finance (No. 2) Bill, 2014 proposed capital gain tax on capital gains arising to the Sponsor on sale of REITs units held by the Sponsor (post listing of units). The Bill proposed deferment of capital gains tax on capital gains arising at the time of exchange of shares in SPVs with units of the REITs, and taxing the capital gains at the time of disposal of units by the sponsor. Currently, Sponsors / Promoters of listed companies enjoy the benefit of long term capital gain tax exemption where STT is levied / paid. CII has recommended that long term capital gains tax should be exempted for sponsors of REITs/ Invits.

Mr Chandrajit Banerjee, Director General, CII mentioned that “as exchange of shares is being done only to initialize REITs/ InvITs with assets, therefore such gains should be exempt from Minimum Alternate Tax (MAT) as well as this act of exchange is not a transaction and therefore should not be treated as such.  There could be a potential MAT liability on such transfer, and CII has suggested for an exemption from the potential MAT liability also on such cashless transfers, since there is no change in the ultimate economic owner of the asset.”

Further, since REITs are required to mandatorily distribute almost the entire annual income as dividends to unit holders, the underlying SPV would necessarily have to suffer the dividend distribution tax (DDT) liability when it distributes income to the REIT. “This results in a multiple layer of tax, since the SPV would suffer this DDT levy in addition to corporate income tax on its taxable income. Outflow of Corporate Tax and DDT will bring down the earnings for distribution.  Hence, SPV should be exempt from DDT on dividend distributed to REITs/InvITs”, stated Mr Banerjee. CII recommended that DDT exemption is imperative on REITs/Invit to provide an effective tax structure and therefore, DDT exemption should be extended to SPVs where REITs hold the minimum stake as required by the regulations.

CII has said that easier taxation rules could provide a fillip to REITs as a lot of global capital is looking at new investment opportunities and business friendly regulations would help attract more funds in a transparent manner into the real estate sector.

“Innovations in digital space to create new opportunities for financial services firms” – CII-PwC Report

Technology will act as a huge enabler to reach out to a new segment of customers and explore untapped markets in the financial services market. The banking industry has already taken to the mobile opportunity and now it is time for the insurance and asset management industries to follow suit. These sectors need to develop innovative applications to assist in the sales process for agents and brokers, rather than restricting the scope of applications to vanilla activities such as quote generation or providing product information.

Given the large volumes with lesser margins involved, technology needs to be extensively used for maximising benefits as well as Return on Investment (RoI). Mobile and tablet based selling and customer service need to become focus areas, apart from continuing to leverage on the established channels in the sector.

The findings are part of a CII-PwC report Bridging the gap with digital, which also states India’s six largest cities account for 10 percent of the country’s bank branches, while at the other end there are eight districts in the north east with just two or less branches each. With steady growth in branches over the last three years, there is a clear opportunity to expand reach through either branch expansion or by focussing on alternate distribution channels.

Additionally firms need to balance supply-side challenges, such as regulatory requirements and optimal incentive structures, with demand-side stumbling blocks through well thought-out systems, structures and controls, so as to truly extract the potential that technologies such as mobile and digital provide to any distribution strategy, the report added.

The reach of social media is expanding every day, from major cities to Tier 2 and Tier 3 cities in India. Many internet penetration initiatives that try to leverage on innovative, lower-cost methodologies are further adding to this expansion. Social media as a channel provides companies with the ability to create highly tailored propositions. Using social media mining tools, companies can assess customer sentiment regarding product propositions and brands and appropriately create highly specific solutions.

The report suggests that a collaborative effort from the government, regulator, industry players and technology innovators is required to penetrate the rural and semi-urban areas. New guidelines issued by different financial services regulators will necessitate changes in processes, product mix as well as the technology components adopted by market players.

Mr V Ganesh, Chairman – CII Financial Distribution Summit 2014 and Chief Executive Officer, Karvy Computershare Pvt. Ltd., said, “Our industry has already witnessed the use of a number of interesting methodologies to address the challenges of distributing to these markets, be it bundling new products with existing ones through established financial channels, enhancing the productivity of channels with technology or directly reaching customers through social media and other digital avenues. There are significant learnings to note from other countries as well as other industries, including the FMCG, telecom and e-commerce sectors.”

Vivek Belgavi, Partner, PwC India, said, “The allocation of resources across the different channels is crucial when considering the right distribution mix for Tier 2 and Tier 3 cities. Given the more geographically dispersed demand and traditionally lower average ticket size, these cities entail a higher cost. So the use of traditional distribution services needs to be assessed. The key is to balance this constraint with effective incentive structures to encourage agent productivity and thus make up for the lower ticket size through higher volumes.”

Government keen to partner with industry, says Chemicals and Fertilizers Minister at CII Pharma Summit

“GDP growth not possible without Healthy India,”  says industry

Government’s keenness and openness to working with industry and making suitable amendments in policies to spur manufacturing activity, the need for industry to focus more on research and ensure a more fuller utilization of the country’s technically trained manpower and an admission of the unhealthy state of affairs at public sector enterprises were some of the key points made by the Minister of State for Chemicals and Fertilisers, Mr Hansraj Gangaram Ahir, at the 12^th National Pharmaceutical Conclave organized by the Confederation of Indian Industry (CII) here on Friday.

The two-day summit has, for the first time, witnessed the coming together of all big pharma associations in the country such as the Indian Pharmaceutical Association (IPA), the Indian Drugs Manufacturers’ Association (IDMA), the Organisation of Pharmaceutical Producers of India (OPPI) and the Bulk Drug Manufacturers’ Association (BDMA). Senior representatives and heads of all the associations were present at the opening of the pharma summit which also saw the captains of pharma industry from across the country converging at one platform.

 

Taking a refreshingly pro-active stance, Secretary, Department of Pharmaceuticals, Dr V K Subburaj, said it was time for action and not for preparing another set of recommendations. He exhorted both government and industry to sit together and decide what needed to be done to bring the sector out of the low growth phase that it had entered into in the past couple of years. The secretary also complimented the pharma industry for bringing laurels to the country and for being the second highest foreign exchange earner after IT. He rued the fact that while pharma sector had grown in the country, the same had not been the case with medical devices sector and the country continued to depend on imports for bulk of its requirement of diagnostic equipment and other devices. He blamed the poor growth of devices sector for the high cost of healthcare in the country and asked industry to work on correcting that anomaly.

Additional Secretary, Ministry of Health & Family Welfare and Director General, Central Government Health Scheme, Mr Navreet Singh Kang, said incentives to encourage research were important. He said the fact that medical devices and clinical trials were being subjected to the same standards as of pharma products was on the radar of the government and it was working on doing something in that direction. He said the government wanted to partner with industry on clinical trials and assured that whatever tweaking of administrative machinery was required for that, will be undertaken.

CII’s National Committee on Pharmaceuticals today reiterated the need for a collaborative approach between the pharmaceutical industry and the government to make, develop and innovate in India thereby leading to the key objective of a healthy India. The aim of the conclave is to create an all-stakeholder platform to discuss the critical issues plaguing the pharmaceutical sector in India. While the Indian pharmaceutical industry is taking great strides in manufacturing and developing in India, there is a great need to encourage innovation in India and help maintain the country’s competitive edge. The points were discussed at the inaugural session of the 12^th National Pharmaceutical Conclave organized by the Confederation of Indian Industry’s National Committee on Pharmaceuticals.

The conclave intends to focus on the issues that need urgent attention of the industry stakeholders. Further, it endeavours to bring the decision makers together so that the discussions result in meaningful actionable outcomes. The conference has been designed systematically to take stakeholders through the opportunities and challenges inherent in the pharmaceutical landscape in India and finally amalgamate findings while devising recommendations to aid implementation.

Dr Rajiv Modi, Chariman, CII National Committee on Pharmaceuticals and Chairman & Managing Director, Cadilla Pharmaceuticals Ltd said: “The Indian pharmaceuticals industry is the world’s third biggest market by volume with a compounded annual growth rate of 15 percent over the last five years. It is expected to attain a market size of USD 45 billion by 2020. The inclusion of the pharmaceuticals sector in the “Make in India” campaign provides a unique opportunity to the industry to push it’s agenda of R&D, innovation and affordable healthcare for all. India is ready to become the ‘Pharmacy of the World’ by giving greater impetus to quality, exports, public-private and private-private partnerships.”

He added: “Further, India should also develop and formalise a robust and comprehensive IPR policy, in the wake of discovery research gaining huge momentum today, with most Indian companies ploughing back a sizeable percentage of their turnover into R&D. In the coming years, many innovative drugs will be launched by Indian pharmaceutical companies, thereby boosting the image of Brand India.”

“The 12th National Pharmaceutical Conclave brings together the government and the pharmaceutical industry on a common platform to discuss, debate and thereafter arrive upon key recommendations.  The theme – make, develop and innovate in India – aims at creating a healthy India by reducing the gap between biopharmaceutical innovation and the people who need it. To improve access to medicines in India, and to healthcare more broadly, we believe collaborative multi-sector approaches that meet both the Government’s health policy objectives and ensure patient access to innovative medicines are needed. Policy, regulatory and legal reforms could substantially improve the business environment for the biopharmaceutical sector in India, in addition to supporting the new Government’s goals of bringing growth to India through research, innovation and manufacturing,” said Mr. K.G. Ananthakrishnan, Co-Chairman, CII National Committee on Pharmaceuticals and Managing Director, MSD Pharmaceuticals Pvt Ltd.