The Minister of State for Commerce, Shri Jairam Ramesh addressing the Press Conference on the IGNOU-APEDA programme

India’s semiconductor ecosystem is poised to shape up with the government receiving seven confirmed investment proposals worth $7 billion for Fab City in Hyderabad. In addition, five more proposals amounting to $800 million have got an in-principle approval while three others are under active consideration, Union minister of State for Commerce Jairam Ramesh said.

Reliance Industries has also expressed interest in setting up a semiconductor project. The seven confirmed projects are SemIndia ( $3 billion), Nano Tech Silicon India ($2 billion), Solar Semiconductor ($1 billion), Titan Energy Systems ($750 million), XL Telecom & Energy ($75 million), KSK Energy ($70 million) and Embedded IT Solutions ($5 million) which are all setting up shop in Hyderabad’s Fab City, Mr Ramesh said. He was speaking on the sidelines of ISA Vision Summit 2008 organised by Indian Semiconductor Association (ISA).

“The government has also given in principle approval to five other companies which amount to an investment of over $800 million while three projects worth over $3 billion are under consideration.Reliance Industries has expressed interest in putting up a solar PV facility, most probably in Jamnagar. While they have not given a formal application, the investment for this project could be upwards of $5 billion,” he said.

The five companies which have got in-principle approval are Chandradeep Solar, Neotech Solutions, Photon Energy Systems, Surana Ventures and Rama Terra Solar. These, along with the seven confirmed projects, will be based out of Hyderabad’s Fab City.

The three under consideration include Moser Baer ($2 billion), HSMC ($1 billion) and Videocon ($250 million). While Moser Baer will put up its plant in Sriperumbudur, Videocon and HSMC are scouting for locations. Regarding the number of companies which will get the subsidy outlined in the fab policy, M Madhavan Nambiar, Additional Secretary in the IT Department said, companies after investing Rs 1,000 crore (about $300 million) in new ecosystem plants in non-SEZ areas and Rs 2,500 crore ($600 million) for fab units before 2010, can apply for subsidy. The IT ministry will take a call on them, he added.

Source : The Economic Times

In a significant development, the government has  allowed foreign carriers to take up to 74 per cent stake in cargo airlines.
Previously, while foreign direct investment (FDI) up to 49 per cent was allowed in cargo airlines, international carriers were not allowed to invest in cargo operations.

"The Cabinet decision says that no direct or indirect investment by foreign airlines will be allowed in case of scheduled, non-scheduled and chartered airlines. However, 74 per cent FDI from foreign airlines will be allowed in cargo carriers," said a civil aviation ministry official.
The government also approved 100 per cent FDI in maintenance, repair and overhaul (MRO) organisations, flying training institutes (FTIs) and helicopter services (up from
49 per cent).

Also, FDI in ground handling services and non-scheduled airlines has been increased to 74 per cent up from the earlier 49 per cent. However, FDI for scheduled airlines - a controversial area were the Cabinet has been divided -remains capped at 49 per cent.
The CCEA decisions would give a major boost to FDI in the aviation sector.

"At present, there are only 12-13 aircraft dedicated to freighter services. Once FDI from foreign carriers is allowed, many major carriers will buy stakes in Indian cargo carriers," said Kuljeet Singh, partner, Ernst &Young (E&Y).
In India, apart from Air India, which has dedicated freighter operations, Jet Airways has plans to start cargo operations in the next
18 months.

Flyington Freighters and Aryan Cargo Express are also slated to start cargo services.
Experts said the move would bring massive investment in MRO and ground-handling segments.
"The MRO segment is capital-intensive. The decision will, therefore, lead to a lot of foreign investments in this segment. On the ground handling side, one can see foreign companies like Menzies and SATS increasing stakes in their respective ground handling joint venture companies," said Kuljeet Singh.

Menzies has a tie-up with Booba whereas Singapore-based SATS has tied up with national carrier Air India to form ground handling companies. In the MRO sector, apart from Air India, which is planning to set up four MRO facilities with Airbus and Boeing, GMR is tying up with Lufthansa Technik to set up an MRO, while Kingfisher is looking at a tie-up with Gulf-based aircraft maintenance service provider, GAMCO. Experts also see immediate interest from international helicopter operators, who have been allowed to fully own their Indian ventures.

"Global helicopter operators like Canada Helicopter Company and America-based Bristow have been in talks with various Indian companies to set up bases here. As it is, helicopter and charter yields in India are 30 per cent lower than international standards. With better equipment, aircraft and training facilities, the entry of international helicopter operators should lead to an increase in benchmarks and hence yields," said a sector expert.

Source: Business Standard

The telecom firms need not seek a fresh licence for starting mobile TV services on their own network
Broadcast regulator Telecom Regulatory Authority of India (Trai) proposed allowing 74% foreign direct investment (FDI) in mobile television services and favoured a bidding process for allocation of licenses for this service.
The telecom firms need not seek a fresh licence for starting mobile TV services on their own network.
The license fee should be charged at 4% of gross revenue for each year or 10% of the reserve one time entry fee limit for the concerned license area, whichever is higher, Trai said in its recommendations to the Ministry of Information and Broadcasting.
Apart from Doordarshan, private mobile TV operators may be assigned at least one slot of 8 MHz each for mobile TV operation in UHF Band V from 585 MHz to 806 MHz. Such spectrum would enable each mobile TV operator to offer about 15 video channels through the terrestrial broadcast route, Trai said. For better utilization of spectrum, the sharing of terrestrial transmission infrastructure of Doordarshan should be permitted on mutual agreement basis in a non-discriminatory manner. Similarly, the mobile TV operators will also be obliged to offer their infrastructure for sharing.
The choice of broadcasting technology should be left to the service provider, it said.
The licenses for mobile television services should be granted through a closed tender system on the basis of one time entry fees quoted by the bidders.

The Government has  liberalised the foreign direct investment (FDI) cap across various sectors including public sector oil refineries, while allowing foreign investment in areas such as commodity exchanges and credit information companies (CICs).
In the case of petroleum refining by PSUs, the Union Cabinet has approved hiking the equity cap to 49 per cent (from the existing 26 per cent) with prior approval of the FIPB.

However, it does not envisage dilution in the existing PSUs. Also in the case of trading and marketing of petroleum products, the Cabinet has waived-off a condition of compulsory divestment of up to 26 per cent in favour of Indian partner/public within five years.
FDI In refining While FDI up to 100 per cent through automatic route is allowed for private companies, in the case of PSUs, there was a cap of 26 per cent. Today's decision would ease the entry of foreign players in the refining sector in partnership with PSUs.

The move assumes significance in the backdrop of the interest envisaged by foreign companies such as Kuwait Petroleum for forging alliances with new refining projects of state owned refiners.
FDI up to 26 per cent and the FII up to 23 per cent has been allowed in commodity exchanges subject to the condition that no single investor would hold more than five per cent.

The move is in sync with the stance of the Department of Economic Affairs that there should be separate caps within the overall cap of 49 per cent for the FDI and the FII investment at 26 per cent and 23 per cent, respectively.

Industrial parks

However, DIPP had said there was no justification for imposing separate caps on the FDI and the FII within the overall foreign investment cap. = The Cabinet also decided to exempt foreign investment in industrial parks from the provisions of Press Note 2 (2005) that stipulates conditions such as minimum capitalisation and a three-year lock in.

Similarly, in case of construction development projects, investment by registered FIIs under the portfolio investment scheme would be distinct from the FDI and outside the provisions of Press Note 2 (2005). Besides the minimum capitalisation of $10 million for the wholly-owned subsidiaries and $5 million for joint ventures with Indian partners, the Press Note 2 specifies that original investment cannot be repatriated before a period of three years from completion of minimum capitalisation. It also stipulates other conditions such as minimum area to be developed.

Source : The Hindu Business Line