L-1 visas to Indian IT cos decline

Source :Pankaj Mishra & Shruti Sabharwal, ET Bureau | Jan 3, 2012, 10.09AM IST


For the first time in many years, the number of short-term US visas given to Indian professionals has declined, giving credence to complaints that America is making it difficult for software companies such asInfosys and Tata Consultancy Services to send employees to their biggest market. 

Approvals for L-1 visas, on which Indian software companies rely to send their most skilled professionals on assignments to the United States, were 28% lower at 25,898 in 2011, data from an independent public policy think tank based in the US show. On the other hand, such visa approvals rose by 15% for applicants from the rest of the world, leading to concerns that India is singled out for attention. 

"This shows an enormous gap in visas issued as well as approval/denial rates between posts in India and the rest of the world, raising policy questions as to whether this great disparity is the result of a conscious policy at US posts in India," the National Foundation for American Policy wrote in its report. 

Among the advisory members of the foundation is Columbia University economist Jagdish N Bhagwati, an advocate of global free trade. Most people in the software industry believe there is a deliberate policy of discrimination against Indians but they are wary of voicing their opinion publicly for fear of antagonising the American government. 

Som Mittal, the president of software industry lobby Nasscom, said even American companies such as IBM and Accenture have been affected because the high rejection rates prevent many of their Indiabased staff from travelling to the United States. 

"For us, it adds to our uncertainty and costs," he observed. 

40% of Work Permits Under L-1 

About 25,000-35,000 Indians travel to the US every year to work on assignments for software companies. Up to 40% of work permits are usually under the L1 category meant for professionals with specialised skills such as project management. 

India's $70-billion IT services sector is facing increased scrutiny from US immigration officials and other federal authorities, especially after an American employee of Infosys accused the company of abusing short-term work permits issued under B1 visa category to do software code writing. 

The US has also doubled visa fees under the H1 and L1 categories that most Indian companies use. The Indian government has been urging the US, which accounts for more than half of Indian IT exports, to ease up on visa rejections but it does not appear to be making much headway. 

"The release of the L1 visa data makes it difficult for US government officials to argue that nothing different is going on in India," the foundation wrote. The US State Department has been denying that anything is amiss with L1 visa approvals in India because the country gets the lion's share of such work permits. However, the foundation termed that line of argument "questionable". 

"The fact that India has a large and growing pool of skilled professionals tells us nothing about whether when employers apply for L1 visas, the individual cases of such professionals are decided properly." Already facing an uncertain economic environment, companies such as TCS, Infosys and Wipro are now being forced to adopt technologies such as telepresence to compensate for the presence of an expert at the customer's site. 

For Indian technology companies competing for contracts in the US, every visa denial counts, and can mean loss of business. An executive at a mid-sized company cited the example of a million-dollar short-term project which it lost to a local competitor because it was not able to get its employee an L-1 visa. The rival got the job done through an Indian expert based in the UK. 

Eshan Joshi, a former head of employee compensation and immigration at Infosys, said the US needs to create a new category of visas for services to bring clarity and also meet special needs of the technology sector. The increasing complexity around work permits causes short-term hiccups for technology services vendors scrambling to back critical projects with their best talent, said Joshi, who is now an independent human resources consultant. "It makes executing projects very difficult, but not a fatal issue for business in the long term. Companies need to reduce dependence on such work permits."

Made in India, faked in China- $5bn loss

Source :IANS | Jan 1, 2012, 02.54PM IST


 Chinese manufacturers are increasingly "faking" popular Indian products of consumer goods giants such as Dabur and ITC, undermining the legitimacy of brands and causing losses worth as much as $5 billion annually, officials said.

"A lot of counterfeit Dabur products are made in China. We have conducted at least 20 raids in China but no proper action has been taken by the Chinese," said Ashok Jain, general manager of finance at Dabur India, the country's fourth largest FMCG firm.

He said such fake products manufactured in China with "Made-in-India" tag are supplied across the world, mostly in India and African countries.

"It causes huge damage to the brand. Those fake products are obviously not up to our standards and supplied at very low prices," Jain told IANS.

Dabur, which has nearly $4 billion market capitalisation, operates in key consumer product categories like healthcare, skin care, hair care and oral care. The company's revenue last fiscal was $910 million.

Pradeep Dixit, a senior official of ITC, a $33-billion conglomerate, said the popular FMCG brands of the company were counterfeited by unscrupulous firms and supplied in domestic as well as foreign markets.

"Our popular cigarette brand is faked and supplied widely in the states like Chhattisgarh, Bihar and Uttar Pradesh," he said.

"China is a big problem everybody is facing," said S.K. Goel, chairman of the Central Board of Excise and Customs, told IANS.

Goel said the big international brands like Nokia, Adidas, Reebok and Nivea were also widely counterfeited in China and supplied in India and other parts of the world.

Chinese manufacturers are also faking drugs, endangering lives of patients. Fake drugs, carrying " Made in India" tags, supplied from China were recently detained in Nigeria and other African countries.

K.K. Vyas, Delhi's deputy commissioner of police (crime), said the police have seized and confiscated a lot of fake and counterfeited products of popular brands in the national capital recently.

Vyas emphasised on the need for enhancing punishment for unscrupulous manufacturers and importers. "Punishment needs to be enhanced. Also there is need that judiciary addresses these issues quickly."

"Counterfeiting is a big menace. It is hurting everybody - consumers, industry and the exchequer," said Anil Rajput, chairman of the anti-smuggling and anti-counterfeiting committee of Federation of Indian Chambers of Commerce and Industry (FICCI).

Recently, FICCI formed a panel called "FICCI-Cascade" that expands into a committee on anti-smuggling and counterfeiting activities destroying the economy. Chaired by Rajput, the committee is working closely with the government to curb this menace.

According to a report by think tank Indiaforensic Research Foundation, the total loss to the economy annually due to crimes such as counterfeiting, commercial fraud, smuggling, drug trafficking, bank fraud, tax evasion and graft is estimated at Rs.22,528 crore.

Savings bank a/c number portability on anvil: Finance ministry

Source : ET :PTI | Jan 3, 2012, 05.23PM IST

 The finance ministry is working on savings banks account number portability, which will allow a customer to retain his account number while changing his bank.

"We want to do it (savings a/c number portability). Right now there are some technical problems...we have identified them. We will overcome them soon," financial services secretary D K Mittal told reporters here.

He was speaking after a meeting in the ministry, which among others was attended by economic affairs secretary R Gopalan, finance secretary R S Gujral and chief economic adviser Kaushik Basu.

He said banks would have to work on identification code, know your customers (KYC) norms and core banking solution ( CBS) for implementing the savings bank account number portability.
The move would help customers change banks, without the need of going through the KYC norms again. Last year, the government had allowed portability of mobile numbers and health insurance policies.


In October last year, the Reserve Bank had deregulated interest rates on savings account deposits, following which few private sector lenders have hiked rates to as much as 7 per cent.


Mittal further said capital infusion in PSU banks would be completed by the end of this fiscal. "We will complete the process of bank recapitalisation by March 31," he said. The government has already announced that it is committed to providing adequate capital to public sector banks, so as to maintain their Tier-I capital at 8 per cent.


The government has made Budget provision of Rs 6,000 crore for capital infusion in PSU banks in the current fiscal.


State Bank of India, Bank of Baroda, Union Bank of India, IDBI Bank and Syndicate Bank are some of the lenders which will be benefited by the capital infusion initiative of the government.

Eyes set on Post Office banks and liberalisation of sector

Source :E T :3 JAN, 2012, 10.12AM IST, PTI 

 The government's plan to tap into India's vast postal system to reach out to the unbanked population by utilising offices across the country as banks is expected to take some shape this year as the proposal has been sent to the Finance Ministry for its nod.

The idea that 1.55 lakh Post Offices could double up as banks is aimed at aiding the government's goal of financial inclusion, especially in rural areas. Once implemented, coverage of the country's banking network will increase three-fold in one stroke.

Around 90 per cent of the Post Office branches are in rural areas. In contrast, out of approximately 87,000 bank branches in the country, around 24,000 are in rural India.

India Post is the biggest postal network in the world, a major portion of which, about 1.4 lakh post offices, are located in rural India.

Although the idea has been around for a while, Communications Minister Kapil Sibal brought it centre-stage in July. However, before it takes shape, the Acts governing the banking and postal sectors will have to go through major amendments.

"Before applying for a banking licence, there are certain procedures that need to be completed. The work is in progress and the proposal has been submitted to the Ministry of Finance for its nod to go ahead," a government official privy to the development told PTI.

The year may witness quite a few amendments to the 113- year-old Post Office Act, which are aimed at opening up the sector.

The proposed amendments in The Indian Post Office Act, 1898, include recognising the services of private courier players and bringing them under the regulatory ambit. This will legalise 'forbidden services' like sending personal letters through private courier companies.

However, a lot needs to be done within the Department of Posts before reforms are implemented in the sector, as the industry is demanding that the services wing of the DoP should be a separate entity. This could be done along the lines of BSNL, which was hived-off from the Department of Telecom, industry players have said.

During 2011, Sibal made efforts to kick-off reforms in the sector, starting with India Post.

"After many years, we have seen government is ready to listen to industry. Minister (Sibal) has said that no policy decision will be made without taking views of industry. It's a highly welcome move, but DoP officials are still not ready to open up," said an industry representative.

How to Sell to China Now

Source :Bloomberg:Karen E. Klein :December 30, 2011, 10:05 AM EST

With robust economic growth, the Chinese business sector is poised for a 2012 “buying binge” that could benefit small U.S. companies, says James Chan, president of Asia Marketing & Management, a Philadelphia consultancy. Chan was born in Canton (now Guangzhou) and educated in Hong Kong and the U.S., and he has been advising American exporters since 1981. He says he has never seen such an opportune time for small business to target the Chinese market. “This is a new frontier, filled with both real opportunities and new risks,” he says. Chan spoke about both with Smart Answers columnist Karen E. Klein. Edited excerpts of their conversation follow.

Why should small and midsize U.S. businesses take on the hard work and the risk of exporting to China?

There was an old, mid-20th century American idea that everybody in the world should beat a path to our door. That idea was very true in 1960. Today it’s incorrect and anachronistic.

What’s changing now?

The Chinese government has been placing full-page color advertisements this year touting its China International Fair for Trade in Services. Instead of just jet turbines, it seems the next wave in selling to China is going to be intangible services and technical expertise, which many small businesses do very well.

What kind of technology and know-how are they looking for?

What you want to sell is a niche product or service, or better yet, a niche of a niche. You can’t go over there and say, “I can help you write a press release.” But even a one-person consultancy can approach a big Chinese company and say, “I’m connected with newspapers. I can cast your company’s new product so that it can be understood by the American reading public.” Now, that’s how you get top dollar.

Some small U.S. business owners fear that their proprietary formulas or skills will be pirated if they take them overseas, particularly to China. How do they deal with that?

Anything in China that succeeds, people will replicate it. Piracy is really an equal opportunity thing in China. Small and midsize companies should not be paralyzed by this fact. They should focus on their hands-on, daily experience that can’t be copied.

How risky is doing business in China?

It’s very risky. For one thing, Chinese companies want you not only to sell them your product or service but also to teach them how to make or do what you do. Everyone selling in China will hit that demand as part of the negotiation process. And some people will say yes. What I have to do is explain that we can’t sell them our baby because if we do, we have no business and we’ll all starve.

How else is negotiating a business deal different?

In America, you sign a contract, and every word means something; it can be interpreted literally, and it’s largely enforceable in court. But in China, a contract is more like a suggestion, or an expression of a preference.

And it’s difficult for Westerners to sue successfully under China’s legal system?

Western law is new in China. When I first went back there in 1982, there were practically no lawyers. The court system is different, and business law may not be enforceable, or enforcement may be spotty and inconsistent.

But the major reason contracts are not viewed the same is that Chinese culture sees the law as something made by people, so it can also be changed by people. That is, you can convince someone by reasoning, cajoling, arguing, or crying for six hours until the person caves in.

What’s the Chinese view of American exports?

Chinese companies and the Chinese people have great respect for American products that are durable and made with care. They don’t have to be luxury items. A friend of mine told me that increasingly his company is selling baby milk powder to China. Because they had a scare with bad baby formula, Chinese consumers who have the extra $5 would rather buy imported formula, and a lot more of them have that extra money than they used to.

What’s the biggest fallacy about selling in China?

Some people are in denial and think they can succeed quickly. Real entrepreneurs understand that it takes time to break into a new market. You can’t just send out tens of thousands of e-mail messages. You have to go to China, do technical sales seminars, answer questions, dine with people. Then you have to take the time for them to argue with you over price, delivery, and credit terms before they finally place a small order to test you out. The unfamiliarity is difficult to overcome. But if U.S. entrepreneurs are willing to give China a chance, and persevere a little longer, the potential is almost unlimited.

Karen E. Klein is a Los Angeles-based writer 

Singapore Growth Slows as Lee Predicts ‘Difficult’ Outlook

Source :Bloomberg :Shamim Adam :January 03, 2012, 10:16 AM EST

Dec. 31 (Bloomberg) -- Singapore’s expansion slowed in 2011 and growth next year will be constrained by a “difficult” global environment and government efforts to reduce the inflow of foreign workers, Prime Minister Lee Hsien Loong said.

Gross domestic product rose 4.8 percent this year, Lee, 59, said in his New Year message released in Singapore today. That compares with the government’s earlier forecast of a 5 percent increase. The economy will expand 1 percent to 3 percent in 2012, Lee said, reiterating an earlier estimate.

“The external environment is uncertain,” Lee said. “Debt problems in Europe are far from solved. Next year looks like being difficult for the global economy. As a small, open country, Singapore will inevitably be affected.”

Singapore, which uses the island’s dollar to manage inflation, said in October it will slow gains in its currency as it joined Asian nations in moving to shield their economies from faltering growth in Europe and China. At the same time, the island has sought to counter a voter backlash against a surge in immigration by promising to damp the influx of foreigners, a move Lee says will curb expansion.

“The extent of the soft landing in China, the pace of recovery in the U.S. and the downside risks in the euro zone are the three key factors that underscore Singapore’s outlook for 2012,” said Irvin Seah, an economist at DBS Group Holdings Ltd. in Singapore. Slowing the inflow of foreign workers will pose a “constraint” on growth as it raises business costs, he said.

Economic Contraction

The growth rate Lee estimates for 2011 implies that the fourth-quarter contraction in the economy “will be more severe than what most people in the market expected,” Seah said.

The economy probably shrank an annualized 5 percent in the fourth quarter from the previous three-month period, according to the median of 11 estimates in a Bloomberg News survey. The trade ministry will release the GDP report on Jan. 3.

The MSCI Asia Pacific Index of stocks slumped 17 percent this year as concern Europe’s protracted sovereign-debt crisis will weigh on the region’s growth halted a two-year rally in equities. Singapore’s benchmark Straits Times Index dropped by a similar amount, and its currency weakened 1 percent against the U.S. dollar.

China’s expansion is slowing as global growth falters and Premier Wen Jiabao maintains curbs on the property market to cool speculation and price gains in Asia’s biggest economy. The People’s Bank of China will maintain a “prudent” monetary stance and “ensure the continuity and stability” of policy in 2012, Governor Zhou Xiaochuan said in a New Year message.

General Election

Singapore, located at the southern end of the 600-mile (965-kilometer) Malacca Strait and home to the world’s second- busiest container port, has remained vulnerable to fluctuations in overseas demand for manufactured goods even as the government boosts the financial services and tourism industries to cut its reliance on exports.

Lee’s ruling People’s Action Party won the general election in May with the smallest margin of popular votes since independence in 1965 as citizens expressed discontent over the rising cost of living and competition with foreigners for jobs and housing.

Singaporeans also voted for a new president in August and former Deputy Prime Minister Tony Tan, who was backed by Lee and several ministers, won the largely ceremonial post with a margin of about 0.3 percent over his nearest rival.

New Norms

“Having made a significant political transition, we are all now adjusting to new norms in a changed environment,” the prime minister said today. “We are working hard to tackle our immediate challenges.”

Since the general election, the government has tightened rules on overseas labor and made it more expensive for foreigners to buy property in Singapore.

The government imposed additional taxes on purchases of private residential property in December to curb excessive investment that it said may spur economic and banking-industry risks. Foreigners and corporate entities will have to pay an additional 10 percent stamp duty, the government said Dec. 7.

“The government is committed to keeping homes affordable to all Singaporeans,” Lee said today, adding that the government will make more public housing available in 2012. “In the private property market, the additional buyer’s stamp duty will moderate capital inflows and foreign demand, and help to stabilize prices.”

Foreign Influx

The country, ranked by the World Bank as the easiest place to do business, has cut taxes in recent years to spur investment, prompting companies to hire hundreds of thousands of foreigners to fill positions. More than a third of the 5.2 million population is made up of foreigners and permanent residents, and about half of all new jobs created in 2010 went to workers from overseas.

The island is tightening the number of foreign workers entering the country to a “more sustainable” rate, Lee said today. The government announced in August that it would raise salary thresholds and require better educational qualifications for some non-Singaporean workers.

“Companies are already feeling the pinch,” especially small and medium-sized enterprises, Lee said. “Singaporeans will feel it too, because many foreign workers do jobs that serve citizens. Admitting fewer foreign workers also means forgoing business opportunities and accepting slower growth. This is one reason why we only expect 1 percent to 3 percent growth next year.”

The prime minister also pledged to intensify efforts to improve the bus and rail network after Singapore’s worst subway disruptions on record this month rankled commuters already complaining of crowded public transportation.

Bajaj Auto unveils small car RE60

Mr Rajiv Bajaj, Managing Director, Bajaj Auto, during the unveiling of the RE60
 in the Capital on Tuesday. Photo: Ramesh Sharma


Source :BL:murali gopalan:New Delhi :jan 3,2011

One of the best kept secrets in the Indian auto space was finally made public here on Tuesday.

The ultra-low cost car was first announced over four years ago as a project with Bajaj Auto and Renault-Nissan. It was then touted as the challenger to the Tata Nano but this is not what Mr Rajiv Bajaj, Managing Director, had in mind.

“In 2007, we started work on a low-cost car with Renault-Nissan but dropped this concept two years later because it did not make sense to us. The better option was to go for a four-wheeler,” he told reporters at a press conference.

Thus was born the RE60, where Bajaj Auto’s goal was to take the story of the three-wheeler into this new millennium as it did with the Chetak scooter which made way for the contemporary Pulsar motorcycle in the turn of the century.

“We are an ‘anti-car company’ from a marketing position point of view. This vehicle was born out of the costs and skills of a two-wheeler market. There must be a starting point for a strategy which in our case was a brand,” Mr Bajaj said.

The RE60 weighs barely 400 kilograms and is fitted with a 200cc engine in its rear which delivers 20 hp. It has petrol and CNG/LPG fuel options. The company believes that one of its biggest strengths is its mileage tipped to be over 35 kilometres to a litre. Likewise, on the carbon dioxide emissions front, it is about 60gm/km.

Bajaj Auto has not announced the price of the RE60 though it is expected to be in the Rs 1.8 lakh range. It will be produced in Aurangabad which is home to the existing three-wheeler range. The first set of vehicles is expected to debut in the coming months.

The company does three-wheeler sales of 500,000 units annually of which nearly two-thirds are exported. Its marketing consultant, Mr Jack Trout, had reiterated that the leader should do more. “He urged us to do something dramatic for the three-wheeler segment. The RE60 is the story of a four year journey. We have fulfilled Mr Trout’s vision and this is a testimony to our engineering. It is a new concept in urban transport,” Mr Bajaj said.

From the company’s point of view, the RE brand is synonymous with the autorickshaw where its core customer is the one who uses it daily. “India has five million three-wheelers of Bajaj Auto from different vintages. I do believe that State after State will be encouraged to replace them with the RE60,” he added.

Sri Lanka, though, could end up being the first market for the vehicle even ahead of India. Bajaj Auto exports 10,000 units a month of which nearly 9,000 vehicles are used in a personal capacity. It is here that the RE60 is expected to do very well.

Likewise, Africa is another key market for the company’s three-wheelers where monthly numbers are 12,000 units. Public transport is little to write home about in this part of the world and Bajaj Auto believes the RE60 can fulfil this need there.

The platform for the RE60 will also roll out three-wheelers and is part of the company’s de-risk strategy. “This is a platform designed by Bajaj Auto and we are not a contract manufacturer for anyone. We are free to brand our own four-wheeler built on this. With modifications, we can supply the vehicle to Renault-Nissan,” Mr Bajaj said.

And given that his company is anti-cars, he added that Renault-Nissan was free to walk away ‘if they are anti-four wheelers’.

“We believe in niche and are not in the rat race for volumes. As a four-wheeler company, we will not develop cars. I hope the RE60 becomes an international icon as it has huge opportunities across the world,” Mr Bajaj said.

Allahabad Bank revamps AllBank Finance

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Source :BL :Shobha Roy:kolkata:3 jan 2012

AllBank Finance — the 100 per cent subsidiary of Allahabad Bank that has been barely functional since 2005 — is now on a revamp spree. Hit by falling revenues and profits, that almost halved last fiscal, the company's board has been reconstituted and AllBank Finance plans to focus on new segments to drive its revenues.

The board — reconstituted by Allahabad Bank two months ago — will have four members from the bank, said Mr J. P. Dua, Chairman and Managing Director of the bank. “Mr Dua will be the chairman of the Board, while Mr D. Sarkar, executive director, and Mr A. B. Bhattacharjee and Mr Narang, both general managers, will be the directors on the board,” Mr Dua said. This apart, the board will have three independent directors — Mr Vinod Kothari, a chartered accountant and company secretary; Mr Subir Das and Mr Emron Samuel, both chartered accountants. Allahabad Bank has also selected Mr M. Satpathy as the vice-president and Chief Executive Officer of the company.

Under the new management, the company plans to venture into such new areas as trustee and custodial services and carry out techno-economic viability study of projects to improve earnings; besides raising debts, doing syndication of loans and distributing mutual funds.

Incorporated in 1951 as “Allahabad Bank Nominees Limited”, the company subsequently changed its name to “AllBank Finance Limited” in 1991.It has, however, remained dormant since 2005, Mr Dua said.

Hardening interest rates, tight liquidity and rising inflation pulled down AllBank Finance's revenues and profits, the company said in its annual report 2010-11. The company reported a 46 per cent drop in revenue, at Rs 5.80 crore, and 61 per cent decline in net profit to Rs 2.80 crore for the year ended March 31, 2011.

“Despite having adequate capital, the company has not been doing well due to the lack of focus. Our main aim now is to revive the focus,” Mr Dua said. The company — which has two branches, one each in Kolkata and Mumbai — plans to open one in Delhi by end January and another one, either in Bangalore or Chennai, by March.