Friday, December 15, 2006

The Indian Economy: News That Caught My Eye # 2

Infosys in the Nasdaq-100 Index: On 18th December 2006 Indian IT giant Infosys (market capitalisation on nasdaq - $5.6 Billion) is set to join the likes of Adobe, Apple, Cisco, Dell, eBay, Google, and Microsoft in the Nasdaq 100 Index - becoming the first Indian company to do so!

Infosys is one of the great Indian companies (like Tata) that has a spotless reputation in India, and ranks among one of the most aspirational organisations to work for.

Business wise too, they've grown from strength to strength, and this recognition is the icing on the cake - though people at Infy insist this is just the beginning!

Meanwhile their PR machinery is working overtime, though redundantly, because most media is falling all over themselves to get soundbytes from them. Now that's what I call reputation!

Auto Industry shows 16.4% growth: In the period April to November 2006, India Inc produced 7.4 million vehicles - recording an increased production of 17.52% four wheelers, and 15.02% higher two wheelers. With domestic sales of four wheelers rising by 20.68%, and two wheelers up by 14.43% (the rest of the increase went into exports)

All this growth is good, though I'd say no thanks to advertising - because advertising in the auto sector in India (two wheelers in particular) continues to be pretentious, insightless, and should send most of the relevant creative directors into hiding (except perhaps, those doing the Tata Motors, Bajaj, and TVS work).

The US - India Nuke Deal: Last week the US congress voted overwhelmingly (330 Ayes, 59 Nays, 44 abstentions) to pass the legislation allowing nuclear trade with India, ratifying to the world India's outstanding responsible stand and record in nuclear power management.

Unlike countries like Iran, North Korea and our neighbour Pakistan, India has never postured or threatened anyone with its capabilities, but has focussed on its positive uses.

Capability proven, responsibility recognized and promised, India inc including the Tatas and Reliance Energy can now look forward to expanding their capabilities into nuclear energy in the near future.

Mobile User base crosses 14 crore (14,00,00,000): Indians love to talk. And the mobile phone providers (GSM, WLL and CDMA) have raked in the benefits, adding a whopping 6,700,000 subscribers in November alone. GSM service providers like Airtel and Hutch lead the market, not just offerring basic services but a host of value added services as well.

Not surprisingly, marketing and advertising in this industry is very active and noticeable, with brands like Hutch (courtesy Ogilvy) consistently creating fabulous slick looking and premium feeling campaigns. Airtel also has its act together, but has a more lower mass appeal.

Kerala ties up with Red Hat: The state government of the south Indian state of Kerala (which recently tried to ban Microsoft for some ideological reasons) has joined the free software bandwagon, and is officially opening its doors (blatantly aligning?) to Linux. It's trying to woo Red Hat into setting up facilites and support for the state government and state run schools in Kerala.

My only point is, when state governments are in a habit of banning companies - which literally amounts to banning growth through free trade - I would think twice before investing there.

West Bengal threatens to slip back into the red: This eastern state of India has long sufferred at the hands of communist parties who have consistently paralysed growth and chased companies out of the region, in the name of 'taking care of the interests of the common man'.

Fortunately, over the last half decade or so, we saw a positive change in attitude, stemming from the progressive thinking of the previous and current Chief Ministers - Jyoti Basu and Buddhadev Bhattacharjee respectively. We have begun to see dramatic changes in the state, which until recently looked like something time had forgotten.

New IT parks, new industry and hence new prosperity was beginning to show.

Which is why perhaps the Tata group chose West Bengal as the location for their prestigious new car project. Only to now find themselves at the mercy of archaic thinking communist forces who once again are resorting to strikes, and going on a rampage trying to stop the project from taking off!

These people have no clue as to the damage their actions will cause to the people they claim to be protecting. And how it will effect further investment in the state. Whatever their issues are, need to be resolved in a slightly less violent and more civilised manner than what they're doing right now.

Sprite sells more than Coke! India is full of surprises - and perhaps the only part of the world where the Coca Cola company sells more Sprite than their flagship brand Coke! This is besides the point that their largest selling brand is a third name - Thums Up - which they acquired from an Indian company many years back! The final tally of cases sold by Coca Cola India - Total, 215million; Thums Up, 50million; Sprite, 40million; Coke, 32million.


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