Showing posts with label New Investment law. Show all posts
Showing posts with label New Investment law. Show all posts

Thursday, May 14, 2020

Economic Cost of Hate

Economic Cost of Hate

India has seen gradual increase of hate against its Muslim Minority. This gradual increase of last 6 years has suddenly spiked in last 8 months, which is noticed by global human rights groups and Governments.

The countries and international organizations has started discussions and so are governments. This discussion has now coming to the point it will start damaging India’s Economy and will have serious implications.

US Congress has already issued statement and so is USCIRF and Congress Members, and Bernie Sanders has raised serious questions on India’s handling of Racism, Hate and Violence against its minorities.



UK Parliament has already discussed the matter.

EU Parliament will take up the issue once opened. It has 3 resolutions on the matter.  

OIC – Organization of Islamic Cooperation is world’s second biggest group of countries has already issued statements and requested government of India, to protect the life and properties of Muslims.

GCC – Gulf Cooperative Council is world’s smallest but richest group with substantial exposure and relations with India and with very good say across the worlds, is started serious talking about Islamophobia and Hate in India. This will have serious economic impact.

US, Europe and UK, number of Muslim countries has echoed their concern for the Hate Crime and Islamophobia in India.

 


Notably among them are Turkey, Iran, Malaysia, Indonesia has come out with their statements.

The real question is How is the cost or economic impact of all this hate mongering.




I will start with GCC.

1.      GCC hosts 9 million Indian – This number can vary between 9 million and 12 million depending upon how you view or calculate.

2.      The total of 79 billion USD, 55 Billion comes from GCC countries or 70%, more importantly India is single largest recipient of foreign remittances.

Among countries, the top remittance recipients were India with $79 billion, followed by China ($67 billion), Mexico ($36 billion), the Philippines ($34 billion), and Egypt ($29 billion). World Bank

3.      More than 80% Indian working in GCC are low wage earners or labor which are easy to replace.

4.      India’s Export – Fresh Vegetables and Meat

5.      GCC is single biggest market for Fresh Vegetables, and Fruits, Agriculture Products.

6.      GCC is single biggest market for Fresh Meat Exports – Caracas – Goat and Sheep

7.      GCC is single biggest market for Beef Exports.

8.      GCC is single biggest trading partner for Agro Commodities.

GCC countries account for 15 percent of India’s total import and 12 percent of the country’s total export basket in value terms.

Among the GCC countries, UAE accounted for the major chunk of India’s exports and imports with $30.08 billion and $29.77 billion respectively in FY19.

 

This is despite a negative growth in both imports and exports of gems and jewelry, a major item in the product basket between India and UAE.  India’s imports of gems and jewelry from UAE have seen a decline of 13 percent, while its exports of these products to UAE have fallen by 3 percent in FY19 over the previous fiscal.

UAE accounts for 9 percent of India’s total export basket and 5.80 percent of India’s import basket by value.

UAE is the major destination for India’s jewelry exports, accounting for about 80 percent of India’s exports.




Energy, Expatriates and Economy

Indian National make up the Gulf states’ largest expatriate community, with an estimated 9.6 million Indian nationals living and working in the region; especially in Saudi Arabia (2.8 million) and the UAE (2.6 million.

The GCC is India’s largest regional-bloc trading partner, which accounted for $104 billion of trade in 2017–18, nearly a 7 per cent increase from $97 billion the previous year. This is higher than both India–ASEAN trade ($81 billion) and India–EU trade ($102 billion) in 2017-18. Two of India’s top five trading partners, the UAE and Saudi Arabia, are from the Gulf. The GCC also provided over $55 billion in foreign-exchange remittances from Indian expatriates in 2017, accounting for over 70 per cent of India’s total.

The total bilateral trade between the GCC and India was estimated at US$121.34 billion ($203 billion) in 2018-19. The UAE is estimated to be India’s third-largest partner with trade in 2018-19 estimated at nearly US$60 billion ($100 billion), while Saudi Arabia is India’s fourth-largest trading partner, with trade in 2018-19 estimated at over US$34billion ($57 billion).

They aim to increase bilateral trade by 60 per cent over the next five years and have set a target of $75 billion for UAE investments into India’s infrastructure development, spanning ports, airports, highways and construction, as well as petrochemical projects.


India expected to attract large-scale investment from the GCC to India, following the recent announcement of the development of a $44 billion oil refinery to be built by Abu Dhabi National Oil Company (ADNOC), Saudi Aramco and Indian counterparts.
The announcement comes a few months after Emirates Group announced a $4.23 billion (INR300 billion) aircraft maintenance, repair and overhaul (MRO) project in Andhra Pradesh in February this year.
Aramco is also in talks with Reliance Industries Limited  to purchase a 20 per cent stake in its oil to chemical business, which is estimated at US$75 billion ($125.5 billion).



The GCC has also invested in developing India’s energy infrastructure. In 2019, the Saudi Ambassador to India stated that Riyadh wished to invest US$100 billion ($166 billion) in India

Foreign Direct Investment (FDI) in India increased to $61.96 billion in 2017-18, according to Indian Government’s Department of Industrial Policy and Promotion (DIPP). Total FDI reached $ 61.96 billion in the last four years, it said.

India: An investment gateway

Yusuffali predicts that an investment to the tune of $150 billion will flow into retail, aviation, tourism and manufacturing sectors from Gulf countries.

This will have a mutual benefit for both the countries as India faces 30 per cent wastage in the Indian farm sector due to bottlenecks in storage, packaging and transportation, and investment by Saudi Arabia would benefit both the countries.

 

 

 

 


Why GCC Matters

And with an average GDP per capita of US $ 61,559 in terms of purchasing parity, most GCC nation rank in worlds top ten richest countries.

 

Indonesia and Malaysia account for 85% of the world's palm oil output while India is the biggest buyer of edible oil.

Indonesian crude palm oil has sold at a premium to Malaysian oil since India this month placed curbs on imports of refined palm oil.
The trade ministers of India and Indonesia, which want to more than double their bilateral trade to $50 billion by 2025, met in Davos on Thursday and agreed to fast-forward trade between them, one of the informed sources
An Indian government document, reviewed by Reuters, said that Indonesia had "informally agreed" to double the annual quota for Indian bovine meat exports to 200,000 tonnes.
Indian-Indonesian trade was worth $21.2 billion in the  2019.

Indonesia imported 94,500 tonnes of Indian buffalo meat worth $323 million in the 2018/19 fiscal year. It is the third biggest buyer of Indian buffalo meat after Vietnam and Malaysia.

India’s Tourism Sector

The Foreign Tourist Arrivals in India is small compared to global standards. The lack of enough and quality infrastructure is one reason, the culture and social environment is second factor.

The arrivals are divided as Foreign and NRI, we will discuss only Foreign Arrivals.

The single largest arrival is Bangladesh Nationals. Then come US and Europe. The Bangladesh alone constitute more than 20% of total arrivals, USA and Europe together constitute another 25%.  The remaining 55% is scattered over countries. North Africa, GCC and Malaysia together is above 10%. Other Muslim Countries has another 3% arrivals in India.

Tourism is one of very important employment sector for India. The present environment of hate will directly affect sentiments of Tourist and their arrivals. Not only the Muslims but all arrivals will be affected.

We see more than 50% reduction in Tourist arrivals from Muslim World to India. The NRI arrival will also be heavily affected because of Job loss.

The arrivals from USA and Europe will be affected by 15%, as sentiments go negative. This will affect India’s direct foreign currency income and employment.


 

Services Sector – India’s services sector is more dependent on USA and Europe. IT, ITES are mostly catered to developed world. In last few years, there is substantial growth and Opportunities are generated from GCC. This growth is steady and remain double the average growth of India’s services sector exports. This nascent sector will face challenge to survive in GCC, North Africa and Malaysia, Indonesia.

The Effect of Hate on FDI and PPP and other projects

As Result of Increase of Hate in India, India will see substantial losses in terms of financial loss. Remittance will be down by 30% or 17 Billion Dollar, direct commercial loss or loss of business will be 55 billion and overall Indian economy will be take hit of 1.5 percent.

 

The sentiment in GCC particularly and worldwide in general will be negatively impacted. The investors look for safety of their amount and social conditioning. Peace is most important to drive growth anywhere in the world. Without peace and harmony, it is impossible to find growth and development. Hate will not only drag down the growth of particular community but it will have drag down effect on everyone. These negative sentiments will persist for the long time. GCC human rights activist and global Human Rights activist particularly in EU and USA will have substantial impact on FDI in India.

 

Data Source - 

India Tourism Statistics 2019 Ministry of Tourism Government of India

Annual Report 2018 -2019 Department of Commerce Government of India

GCC Stat

World Bank Remittances Report

IMF Economic Review

Venture Art Economic Projections

 


Friday, October 9, 2015

This is how IBM is helping start-ups reach cloud nine!


Flipkart's Big Billion Day Sale is approaching and people are waiting with bated breath to see whether it would be a roaring success or a doomsday sale like its previous stunt last year. One of the main reasons why it failed like most databases do is lack of adequate storage of data. 
Likewise, if we think about the Smart Cities project, there would be large scale application of IoT (Internet of Things). The big question is where can we store such massive bulk of data securely? 

The solution is on cloud, literally. Cloud is upending the industry. Large enterprises, midsized companies to even start ups are moving toward a scalable infrastructure that is optimized and responsive to help them meet new business demands. Cloud models also help businesses to work smarter through more flexible and cost-effective access to technology and information. 

"Now we live in a generation where if start-ups need to start new applications, by default their option is cloud. It provides a quick solution to get the infrastructure up and running," said Radhesh Kanumury, Country Manager, Global Entrepreneur Programme, IBM India/South Asia. 

How IBM is helping start-ups reach cloud nine 

1. IBM's cloud platform offers solutions to cater to the needs of SMBs, start-ups and developers which constitute a huge portion of the cloud market. As per a report from Evans Data Corp, India is slated to have the largest developer community in the world by year 2019. The report further goes on to state that the number of developers is expected to grow to 26.4M by 2016 and the percentage of developers expected to develop in the cloud will grow by 44% to 12.5M by 2019. 


2. As enterprises increase the adoption of cloud based consumption of IT, they will have a need for an integrated and secure view of IT across on premise, off premise infrastructures and applications. IBM helps customers create this hybrid environment. 

"It gives startups the freedom that they need to quickly build applications. One can develop applications faster than before, even develop 4-5 builds (transition from prototype to product) per week," said Srinath Ranga, founder of Opteamize Cloud Solutions Pvt Ltd, an IBM Business Partner offers Cloud and SaaS solutions focused on accelerating the student recruitment processes. 

3. In pursuit of creating the best suite of solution for customers, IBM invested $7 billion in building a high value cloud portfolio. With a strong portfolio at every level of cloud- SoftLayer at the infrastructure level and Bluemix, the platform-as-a-service, IBM serves Indian enterprises with the solutions, depending on varied business requirements. 

4. Apart from providing cloud infrastructure, IBM also provides hands-on training to the start-ups to get the maximum out of cloud. This is also followed by technical assistance when and where needed, which is done in real time through cloud. 

5. Though bandwidth and expensive hardware would be the two main challenges, but the government is on its way to provide cheap bandwidth to even the remotest of the villages in India. As per bandwidth is concerned, the best use of cloud is one can store data offline on cloud and when connectivity is there one can send the data to the database. 



How start-ups are reaching out to cloud 

1. Start-ups, related to medical services, are taking to cloud to store medical data of their customers. With the smart wearables available, start-ups are taking to them too. A Bombay start-up is developing a device to detect heart attacks and send help on an immediate basis. 

2. Cloud platforms are used by start-ups like LightMetrics to measure fuel efficiency of a vehicle, harsh braking and violation of traffic rules and hence manage the traffic on real time. 

3. Another start-up has taken to IBM solutions to monitor the energy usage of an electrical appliance. 

4. A Tamil Nadu based start-up have solved the problem faced by crab breeders where maintaining the pH level of the water is critical to the life of the breeds. As soon as the level increases, an alert is sent to the smartphone. 

5. Radhesh also said cloud can also help police to monitor riot prone areas. For example, if there are more than 10 people at a place where they shouldn't be, an alert is sent and necessary steps can be taken. 

Citation from Business Insider India : http://goo.gl/n23eMs

What six top accelerators want to hear from startups

It’s a rare opportunity for a startup to pitch in front of one accelerator, let alone six on the same day. Recently, representatives from 500 Startups, Alchemist, Startup Bootcamp, Seedcamp, Open Network Lab and Chinacclerator watched nearly 40 startups deliver two-minute pitches in Seoul.



After the pitches, all of the reps came up on stage to give the startups advice on how to improve their pitches. Here are their eight top recommendations:

One: Your goal is to get a meeting
The reason you’re making a pitch is to get a meeting, not to convince an accelerator or VC to make an investment on the spot. Meeting One will lead to Meeting Two, which will hopefully give way to Meeting Three. Don’t lay out your entire case. Make your strongest points and cover the details or secondary business models during your meetings.

Two: Talk about your team
What makes your team uniquely able to execute your idea? The team and your passion, more than anything else, separate you from competitors. You must demonstrate a personal attachment to wanting to solve the problem you’re tackling.Otherwise, the accelerators will assume you’ll give up when things get tough and your bank balance is sitting at zero.

Three: Don’t pretend you’re perfect
What do you need help on from an accelerator? If everything is perfect, you’ll be fine on your own. Don’t be afraid to demonstrate a need.

Four: Talk about specific plans for growth
How will you get your first 100 or 1,000 customers? It’s easy for startups to make up market projections or valuations. What’s harder is sitting down and coming up with a strategy or traction or early growth. Make sure to talk about how you will grow and be specific about the next milestones you plan to reach.



Five: Focus on what the accelerators don’t know
Most accelerators can guess at the total size of the market you’re trying to tap. If you’re pressed for time, you can skip over this in your pitch. The exception to this is if you’re taking on a niche or re-segmented market that’s harder to gauge.

Six: Talk about how well you understand your customers and market
This isn’t just about proving that you’ve done your homework. It’s about showing that your strategies match up with actual customers, not just hypothetical ones.

Seven: Tell a story and capture attention
Having thought through your problem and solution is great, but the way you present that problem and solution is just as important. The story needs to be simple enough that anyone can understand, but you need to include details that show you know what you’re talking about. Accelerators and VCs see lots of startup pitches. They only remember a few.

Eight: End your pitch with a strong call for action
This can be a specific ask from the accelerator or asking the audience to download your app for something in return. No matter what the call to action is, it should be aimed at making you more memorable.
Citation from Your Story : http://goo.gl/uT26pf

Tuesday, August 25, 2015

Industrial Toys Gaming Company Raises $5 million

Mobile games developer Industrial Toys has raised $5 million in a round of funding led by Accel Partners.

As part of the financing, the Pasadena company is also announcing the launch of its first title, "Midnight Star," which will be available this summer in beta.

Industrial Toys is an independent studio that designs mobile games for serious gamers. It was founded by Alex Seropian, who also founded Bungie Studios, the team behind the hit "Halo" franchise.

"We’re huge fans of mobile gaming, but we think there aren't enough great mobile games for core gamers and we’re committed to changing that," the company says on its website. "We'll be mobile to the core, with games that let you have an immersive session at home that blows your mind apart as well as a 30-second experience that still moves you forward while you’re waiting for the bus.

We Advice You Grow


The Series A round represents Industrial Toys' first institutional financing and comes from a firm with a long history in the games space. Accel Partners was an early investor in Supercell, Rovio, Playfish, Gameforge and Mind Candy.
"Each new platform shift yields a crop of large, independent gaming companies. The shift to mobile and tablets is no different, but has largely targeted the casual or mid-core gamer. The opportunity to ‘activate’ core gamers is even bigger -- the content just hasn’t been there,” said Vas Natarajan, a partner at Accel Partners. “Alex and team are developing for the gamers who’ve largely been underserved in this push to mobile.”
Industrial Toys had been angel-funded as it worked on its first title.
Mobile games are the fastest-growing segment of the gaming market, with revenue set to nearly double from $13.2 billion in 2013 to $22 billion in 2015, according to market research firm Gartner.

Tuesday, June 2, 2015

Saudi Arabia Opening for Investment

Infrastructure Projects in Saudi Arabia: Getting qualified

By Daniel Goodwin - d.goodwin@tamimi.com
With the Kingdom of Saudi Arabia (KSA) rolling out a succession of major public infrastructure projects in recent years, KSA's foreign investment policy makers have made it clear that they are keen to see more foreign participation in those projects. As the economic powerhouse of the GCC with a strong pipeline of work in the years ahead, KSA is on the radar for foreign contractors looking to expand in the Middle East. Often, to be eligible to bid for these larger projects, a contractor must be pre-qualified.
Pre-qualification for government contracts in Saudi Arabia
Pre-qualification is used to identify contractors who have the necessary experience, know-how and resources to successfully carry out a particular scope of work or project.

Looking to Opportunities in GCC

In KSA the pre-qualification process, where utilised, is itself a competitive tender process and is governed by the Government Tender and Procurement Law ("GTPL") and its implementing regulations ("GTPR").
The specific requirements for pre-qualification for government tenders vary between different government agencies and also from project to project. Generally for government projects the GTPR mandates that contractors must:
  • Have a Commercial Registration in KSA. For foreign contractors this first requires a licence from the Saudi Arabian General Investment Authority ("SAGIA").
  • Be registered with the General Organisation for Social Insurance.
  • Have a tax or zakat certificate.
  • Have a Saudization certificate.
  • Have a certificate of membership of the Chamber of Commerce.
  • Be registered with the Ministry of Labour.
  • Have a requisite Contractor Classification issued by the Ministry of Municipal and Rural Affairs ("MOMRA") to carry out the work required. This will depend on the type of work specified and the value of the contract.
Generally, though it may vary between various government entities, other pre-qualification requirements may require the contractor to:
  • Have no conflict of interest (including for any proposed subcontractors).
  • Have no recent instances of contractual non-performance (which could be within say the past five years).
  • Meet required financial levels, provide audited financial statements, and be solvent with no recent history of liquidation, bankruptcy or defaults (say within the past five years).
  • Have certain annual turnovers (depending on the project requirements).
  • Meet specific experience requirements depending on the precise nature of the project.
  • Declare any fees, gratuities, payments or inducements paid to any party in respect of pre-qualification or the bidding or tender process.
Streamlined processes for foreign contractors
A foreign contractor that does not have a commercial presence / registration in KSA may still qualify to bid for a government contract.
The recent Council of Ministers Resolution No. 405, released in August 2014, applies to contractors in the areas of: construction; roads; water and sewage works; implementation of works for water conveyance; desalination plants and electric power; electrical, mechanical, electronic, industrial and marine works; and communications technology.
This resolution allows contractors that are licensed as first class in their home country, or certain 'well known' contractors, to obtain a temporary certificate from SAGIA allowing the contractor to bid on government projects (but only one at a time). The contractor may then fulfil the other requirements (set out above) after it is awarded a government contract.
If successful in being awarded a government contract, the foreign contractor must establish an entity in KSA and obtain a temporary commercial registration. A temporary commercial registration licence must be applied for within 30 days of the date the contract is awarded and a copy of the award letter or the project execution contract signed by the government authority must be submitted to SAGIA.
A temporary commercial registration licence from SAGIA:
  • Will be limited to the activities necessary to carry out the project awarded by the KSA government authority.
  • Will be limited to a time period linked to the expected duration of the project awarded by the KSA government authority.
  • Will be linked to the KSA government authority that awarded the project.
  • Must be renewed every 12 months and the consent of the KSA government authority that awarded the project is required.
As a further refinement, a foreign contractor classified in the first class in its country, or which has implemented a project with a value of not less than SAR500 million, has not less than 2,000 employees and total assets of not less than SAR50 million, can apply for a SAGIA licence using the recently introduced Fast Track process. SAGIA states that the Fast Track system allows a licence to be issued in as few as five days from acknowledgement of a completed application.
Joining a consortium to bid for contracts in KSA
A consortium is essentially an agreement between a number of parties to undertake a joint venture. If a foreign entity is a joint venture partner it must hold a SAGIA foreign investment licence and a Commercial Registration issued by the Ministry of Commerce and Industry. Usually (but not always) the consortium will establish a KSA limited liability company to execute the contract. A consortium intending to bid for a government contract will be required to submit a copy of the consortium agreement.
For a foreign contractor bidding for KSA government contracts as part of a consortium, there may be a need for the foreign contractor to have a KSA SAGIA licence, depending on the terms of the Request for Proposal or Tender. Some may require KSA registration first, others may not. The SAGIA licence will need to be obtained by the new JV company (if there is one) otherwise it must be obtained by the foreign company setting up an entity in KSA as part of an unincorporated consortium.
Pre-qualifying for private sector contracts
Tender and pre-qualification processes for private sector contracts in KSA are not governed by specific laws.
Requirements for pre-qualification issued by private companies in KSA (other than government procurement) vary depending on the level of sophistication of the company, whether the company has experience in carrying out similar past projects, and the value and complexity of the work. However, most of the information required for government pre-qualification is generally also requested in private sector tenders.
Other pre-qualification requirements may include:
  • Past occupational health and safety record.
  • Any ISO or similar compliance.
  • References from past employers, head-contractors or sub-contractors.
  • A requirement to provide a financial guarantee / bond.
It may be a pre-qualification requirement that all bidders already have a KSA established entity.
Inducement of government officials
KSA has laws that keep the tender process transparent, fair and free from impropriety.
The Anti-Bribery Law 1992 makes it clear that the receipt of any benefit or advantage (financial or non-financial) concerning any government official would be considered a bribe and includes a promise, gift, bounty, favour or recommendation.
Prohibited circumstances include not only when officials demand a bribe for themselves or another person for performing their normal duties (or abstaining from performing such duties) but also receiving what is deemed to be a bribe without demand by the official concerned.
There are severe penalties for bribery, which vary according to the severity of the circumstances. The most severe penalties are 10 years imprisonment and/or a SAR1 million fine. The lesser crimes still carry imprisonment penalties of up to 3 years and/or a fine of up to SAR100,000.
Bribes or inducements in the private sector are illegal under Shari'ah principles.
Conclusion
Qualifying as an approved bidder is the first part of the tender process and contractors now have a more streamlined way to qualify as a bidder in KSA.
The willingness of the government to bring in more streamlined processes for contractors entering KSA is a reflection of the significant amount of work being carried out and the need for experienced foreign contractors to bring their know-how and resources to implement projects in the Kingdom of Saudi Arabia.
With the continued rollout of world class infrastructure projects across the Kingdom, the demand for foreign contractors and suppliers will remain strong in the years ahead. Knowing how to pre-qualify to tender on those projects is an essential first step for any contractor looking to win tenders in KSA.
© Al Tamimi & Company 2015

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