Make in India effect

Prime Minister Narendra Modi’s clarion call for “Make in India” appears to be reaping huge dividends as foreign investment is eyeing India and making a beeline for it in a bid to woo the second most populous nation in the world that represents also the world’s biggest market for its own products. The foreign interests seem to be contenting themselves with signing joint ventures and investment, while hoping to reap rich rewards from the domestic and international sales of products made from their technology.

A success story of Prime Minister Narendra’s Modi’s “Make in India” is reflected in “German Engineering at Indian Prices” as Surat-based Pooja Heatex Ltd announced a joint venture with Germany-based Funke Warmeaustauscher Apparatebau GmbH to manufacture a wide range of Plate and Shell/Tube type “heat exchangers” for various domains. The venture deal – which focused on developing a broad portfolio of products for major South Asian and European clients of Funke in India through manufacture at Surat in Gujarat – was structured through ALCOR Mergers and Acquisitions Pvt Ltd, a portfolio company of ALCOR Fund which has seen a huge flow of transactions, following the “Make in India” campaign by PM Modi, according to Thomas Matthew, Director, ALCOR. “The venture model creates a platform to sell high-end German-engineered products at Indian prices, while meeting the growing demand for process equipment in India and globally. While FUNKE Germany will be investing $40 to $50 million over next five years, this venture is projected to touch sales revenue of over $75 million from India – besides over $150 million globally – in the same period,” Mathew said, while recalling how FUNKE President Bernd Timmermann had told him during a trip abroad, “We are confident about PM Modi making a change and we want to invest (In India) now.”

Another German venture in India involved Parag Milk Foods recent tie-up with Germany’s cheese major Hochland Group. Parag chairman Devendra Shah said the company is broadening its portfolio of consumer health and nutrition-based products and has launched the Hochland Group’s champion product – Almette fresh cream – in original and fine herbs to suit the Indian palate. Mahesh Israni, Parag’s chief marketing officer, said India is the next big market with growing demand driven by India’s young demography, which is more experimental and new gourmets. “We are producing two million litres milk daily from farming to Pan-India distribution and exports since 2000 to America, Australia, South-east Asia, Africa and Middle East. India’s cheese market is at Rs 11.7 billion with CAGR growth of 31.3 per cent over next five years and the drivers for this being: fast food culture (growing at 30 per cent to 35 per cent annually); growing disposable incomes and fast food consumption,” he said. Johannes Rogg, Division Manager, New Business Development, Hochland SE, said the company’s turnover is Euro 1.3 billion and 3,00,000 tonnes cheese production annually at 11 plants in six countries including Germany and Russia, besides being number cheese supplier to MacDonalds in Europe and searching new markets for the company. 

While being biggest milk producer globally, India’s cheese segment remained under-developed and represented a good market for Hochland’s entry, he added.

Portals, Tie-ups, Technologies and Policies for business have been springing up to take advantage of the booming Indian economy.  An online platform “BookMyCharters” was launched by Baron Aviation to make private air charters India-wide cheaper and convenient – while also enabling flyers to book a private jet “in less than 60 seconds.” The current offline model presents limited choice of aircraft and takes between 2 hours to 48 hours to generate a quote, compared to our online platform reducing the entire process of searching and quoting an aircraft to less than a minute,” Rajeev Wadhwa, Chairman and CEO, Baron Aviation, said while describing the present air charter market as being around Rs 1,800 crore and expected to grow to Rs 5,000 crore by 2020. “BookMyCharters management is looking at migrating 30-40 per cent of current air charter users to the platform within first year of operations and also expects to grow the existing market by 30 per cent, bringing in new customers – especially from non-metro cities and in international visitors,” he said, while noting that this platform is a globally-scalable one geared to address the $20 billion global opportunity, besides being a substitute to high-value private jet ownership and also a global player while reaching out to mature markets like America and Europe alongside emerging markets like Africa directly or engaging partnerships with local players. BookMyCharters, an initiative of Baron Aviation, has presently signed up with 48 aircraft and over 12 operators, besides five more operators and 10 aircraft in the pipeline in December 2015 and plans to integrate over 60 per cent of Indian private aircrafts over the next 8 to 12 weeks, he said.

Wadhwa said, “Prime Minister Narendra Modi is doing a credible job of attracting investors and the air charter segment stands to benefit in this. India has 126 operators with 194 aircraft, and 79 operators each having one or two aircraft, while their flying time is grossly under-used at between 300 to 400 hours, compared to 800 to 1,000 hours internationally. The clientele for air charters included film promotions, special events, corporate (52 per cent), leisure (30 per cent), election campaigning, VIP flying, luxury holidays and spa destinations, inbound business travel by senior MNC executives, global investors, holiday destinations and religious tours. While Mumbai airport however has the most expensive penalty in the world for aircraft parking more than 48 hours, about 75 per cent of India’s air charter brokers – who are in Delhi – close down at 6 pm, he said while emphasizing the need for this online portal that could be used anywhere in the country for connectivity to 149 airports – as compared to 33 airports serviced by commercial airlines.

Gujarat highlighted its new Tourism Policy – with the Tourism sector being given the status of an industry – through focus on investment opportunities in tourism projects covering eco-tourism, beach and water sports, heritage, international Buddhist circuit, wayside amenities and cafeteria, cleanliness and Greenfield properties for development, besides initiatives like PPP in such projects, special tourist police and annual tourism industry excellence awards. Saurabhbhai Patel, Gujarat Minister of Tourism, said that this policy, while positioning Gujarat as a vibrant tourist destination, would catapult tourism as one of the most important economic drivers, leading to sustainable development and inclusive growth. “Gujarat has 16 per cent of India’s total GDP and 25 per cent of its exports. Tourism has immense national opportunities but needs more infrastructure and investment to draw tourists and increase job opportunities. So we gave tourism an industry status and subsidies for new hotels expansion (no taxes for five years, handed running of properties to others,” he said while announcing roadshows for Mumbai, Delhi, Ahmedabad, Chennai, Bangalore, Kolkata and Hyderabad over the next two months to highlight investment opportunities in the tourism sector. The minister said that besides developing “single window” clearance, the government had contemplated building new airports and had floated a tender which was, however, not successful.

N Srivastava, Tourism Commissioner & Managing director, Tourism Corporation of Gujarat Ltd, said Gujarat’s 2014-14 total tourist arrivals were 13.5 per cent higher at 326.91 lakhs – where the annual domestic tourism growth rate nationally is barely 9.6 per cent – with Ahmedabad, Ambaji, Dwarka, Surat and Vadodara accounting for over 41 per cent of gross tourist flow, besides major iconic festivals like Navratri, Rann-Utsav and International Kite Festival. The state governmen focus on Tourism could be gauged from the fact that the Gujarat Tourism budget had grown exponentially from a mere Rs 100 crores in 2006 to over Rs 500 crores currently, he said.

Bollywood filmstar Viveck Oberoi spoke about his role as property entrepreneur in Gujarat which began a few years ago – when Prime Minister Narendra Modi was the Gujarat Chief Minister – by identifying some areas there for an upwardly mobile class experiential township in which he invested Rs 200 crores. “There are lots of young, upwardly mobile people in manufacturing and we have created 25 world-class facilities and the world’s first floating cinema and 85,000 square feet beach for sports activities barely 30 to 35 kms from Ahmedabad,” Oberoi said, while noting that the idea was to encourage weekenders including families, besides holding music festivals and other cultural activities.