When it comes to outsourcing, India continues to rule as the favourite global destination, even though factors like emergence of cheaper destinations, employee and salary crunch are adversely affecting the sector, a recent study shows.
India holds an edge as it commands global confidence to produce perfect Turn Around Time (TAT), a recent study by recruitment solutions provider Elixier Solutions shows.
TAT is the time needed for performing a task, especially receiving, completing, and returning an assignment.
"At present outsourcing business in India is increasing at a rate four times more than any other country and the county has the resource and margin to meet the competition," a partner in Elixier Solutions Vipul Prakash said.
According to the study, growing at a rate of 40 per cent annually, India is the lead player in this sector followed by China at the second spot with a growth rate of 25 per cent.
"Certain companies restrain from outsourcing their practices thinking it to be a luxury practice which only organisations having deep pockets can afford," Elixir Web Solutions Associate Partner Jacob Samuel said.
The overall outlook of this industry seems positive with experts predicting that the global market for shared services would grow to 1.43 trillion dollar by the end of 2009 from 1,000 billion dollar at present.
Although India and China are the market leaders in this sector, there are huge opportunities present in the market to give ample space to other countries like Philippines, Vietnam, Romania, Kenya, Sri Lanka and North America market to grow, the report said.
The study also said although it is unlikely that India would be able to retain its number one slot with China aggressively trying to outstrip it in the business, it would still be able to get a decent share of the pie.
Also, processes like human resource, insurance, life sciences, finance, legal services, technical support, risk management, supply chain and media would come up in a big way in terms of business and employment opportunities, the study added.
Wednesday, September 5, 2007
Tuesday, September 4, 2007
India is No-1 travel destination: Report
India has officially been voted the world's favourite country to visit by readers of the swish magazine Condé Nast Traveller.
The awards are given annually for the hotels, airlines, islands, tour operators, spas, cruise lines, cities and countries ranked 'best in the world' by the magazine's readers.
Though the awards are hardly definitive, the winner in each category is seen to gain considerable cachet as the choice of the big-spender classes.
This year the magazine's readers rated India as best in the world for culture, value for money and the sheer scale and variety of its attractions.
Sarah Miller, the magazine's editor said it was an undoubted coup for India to "achieve the accolade of our discerning readers' favourite country in the world." She added that the Conde Naste vote, coming "as it celebrates 60 years of independence...shows India's moment has come."
Last year's winner, Italy, was ranked number two and Thailand, which attracts more Western tourists than anywhere else in the world, was at number three.
The awards are given annually for the hotels, airlines, islands, tour operators, spas, cruise lines, cities and countries ranked 'best in the world' by the magazine's readers.
Though the awards are hardly definitive, the winner in each category is seen to gain considerable cachet as the choice of the big-spender classes.
This year the magazine's readers rated India as best in the world for culture, value for money and the sheer scale and variety of its attractions.
Sarah Miller, the magazine's editor said it was an undoubted coup for India to "achieve the accolade of our discerning readers' favourite country in the world." She added that the Conde Naste vote, coming "as it celebrates 60 years of independence...shows India's moment has come."
Last year's winner, Italy, was ranked number two and Thailand, which attracts more Western tourists than anywhere else in the world, was at number three.
Four Indians among top tech innovators
They are young innovators who are altering the state of medicine, computing, communications and energy.
Their work represents the future of technology. Since 1999, the editors of Technology Review , an MIT publication, have honoured a collection of technologists and scientists, all under 35 years. They call them the TR35. The honours list for this year is just out. And the seventh class of outstanding innovators has four Indians.
Tapan Parikh, Sanjit Biswas, Partha Ranganathan and Dr Shetal Shah are among the 35, 2007, Young Innovators from across the world to be chosen this year. Interestingly, the list also has names like Mark Zuckerberg, who has become famous for creating social-networking site Facebook .
The 33-year-old Parikh has been named Humanitarian of the Year for his technology for the developing world. A PhD student in computer science at the University of Washington, Parikh has created an information system tailored for small-businesses in the developing world.
Sanjit Biswas too has developed a technology to help the poor access Internet service wirelessly. Partha Rangnathan, the principal research scientist at HP Labs, with his innovations, is trying to lower greenhouse-gas emissions.
Dr Shetal Shah of State University of New York, Stony Brook had spent hundreds of hours in ambulances, transporting ill premature babies to New York University Medical Center’s specialised neonatal unit. During these bumpy rides around the megalopolis, he noticed how disruptive these vibrations were to him.
Shah has created a device to measure forces imparted on patients during transport or trauma.
Their work represents the future of technology. Since 1999, the editors of Technology Review , an MIT publication, have honoured a collection of technologists and scientists, all under 35 years. They call them the TR35. The honours list for this year is just out. And the seventh class of outstanding innovators has four Indians.
Tapan Parikh, Sanjit Biswas, Partha Ranganathan and Dr Shetal Shah are among the 35, 2007, Young Innovators from across the world to be chosen this year. Interestingly, the list also has names like Mark Zuckerberg, who has become famous for creating social-networking site Facebook .
The 33-year-old Parikh has been named Humanitarian of the Year for his technology for the developing world. A PhD student in computer science at the University of Washington, Parikh has created an information system tailored for small-businesses in the developing world.
Sanjit Biswas too has developed a technology to help the poor access Internet service wirelessly. Partha Rangnathan, the principal research scientist at HP Labs, with his innovations, is trying to lower greenhouse-gas emissions.
Dr Shetal Shah of State University of New York, Stony Brook had spent hundreds of hours in ambulances, transporting ill premature babies to New York University Medical Center’s specialised neonatal unit. During these bumpy rides around the megalopolis, he noticed how disruptive these vibrations were to him.
Shah has created a device to measure forces imparted on patients during transport or trauma.
Monday, September 3, 2007
Indian economy seen escaping subprime fallout
India should escape major fallout from the US subprime credit turmoil thanks to its largely insulated economy but the country's outsourcing sector has cause for concern, economists said.
While the nation of 1.1 billion people has been gradually easing rigid state controls on trade and investment and opening up its economy, it remains far less exposed to global financial upheaval than many countries.
Global financial markets have been volatile in the last few weeks amid concerns about the shaky US subprime sector of housing loans to customers with bad credit histories.
That has led financial institutions worldwide to examine their investment risks and plan for any possible long term fallout, including heavy losses, from once investing in bad debt.
India, however, appears to be in a strong position to withstand aftershocks.The country has "largely a domestically driven economy with limited trade dependence," said Mumbai-based Edelweiss Capital brokerage economist Manika Premsingh.
In addition, India's banking sector is not directly exposed to the subprime woes that have upset global markets, unlike some banks in Britain, Germany and elsewhere, economists note.
"The direct and indirect exposure of the Indian banking sector to the subprime woes is limited and does not pose a threat to either the local banking system or to the economy," said JP Morgan economist Rajeev Malik in Singapore. But worries persist that the crisis has not blown out. Late Friday, US authorities moved to reassure investors they would protect the economy from the subprime troubles.
On Monday, German's IKB bank said it could lose nearly one billion dollars this year after its subprime loan portfolio went bad.
Private consumption accounts for 62 percent of India's gross domestic product. Exports as a percentage of GDP represent less than 15 percent. Also, the booming outsourcing and IT sectors, which fear a possible US economic slowdown could hit budgets of cost-conscious firms farming out work to the country, but this accounts for only 5.4 percent of India's GDP.
"There may be some cases of business process outsourcing or call centres affected," said Deepak Lalwani, director at London's Astaire and Partners.
But "the US subprime situation does not have a direct effect on growth." The economy here grew by a surprise 9.3 percent in the first quarter to June. While economists expect it to slow in coming quarters due to aggressive monetary tightening to fight inflation, economists still forecast full-year growth of 8.5-9.0 per cent compared with 9.4 per cent in the past year.
India's economy has grown by an average annual 8.6 percent in the past three financial years, making it the second fastest expanding after China. But some insist that the subprime upheaval could cause a "significant" slowdown, as "Global risk" has been "at the heart of India's current growth acceleration cycle," Morgan Stanley economist Chetan Ahya said.
Foreign investors have poured billions of dollars into the country to capitalise on its scorching growth, creating vast foreign exchange reserves. "If the current global risk aversion trend continues for more than three months, we believe India could face a significant deceleration in growth," Ahya said in a brokerage note last month.
"It all boils down to international integration. Our growth story is still one mainly of domestic demand," said Soumitra Chaudhuri, economic advisor to Indian ratings agency ICRA.
While the nation of 1.1 billion people has been gradually easing rigid state controls on trade and investment and opening up its economy, it remains far less exposed to global financial upheaval than many countries.
Global financial markets have been volatile in the last few weeks amid concerns about the shaky US subprime sector of housing loans to customers with bad credit histories.
That has led financial institutions worldwide to examine their investment risks and plan for any possible long term fallout, including heavy losses, from once investing in bad debt.
India, however, appears to be in a strong position to withstand aftershocks.The country has "largely a domestically driven economy with limited trade dependence," said Mumbai-based Edelweiss Capital brokerage economist Manika Premsingh.
In addition, India's banking sector is not directly exposed to the subprime woes that have upset global markets, unlike some banks in Britain, Germany and elsewhere, economists note.
"The direct and indirect exposure of the Indian banking sector to the subprime woes is limited and does not pose a threat to either the local banking system or to the economy," said JP Morgan economist Rajeev Malik in Singapore. But worries persist that the crisis has not blown out. Late Friday, US authorities moved to reassure investors they would protect the economy from the subprime troubles.
On Monday, German's IKB bank said it could lose nearly one billion dollars this year after its subprime loan portfolio went bad.
Private consumption accounts for 62 percent of India's gross domestic product. Exports as a percentage of GDP represent less than 15 percent. Also, the booming outsourcing and IT sectors, which fear a possible US economic slowdown could hit budgets of cost-conscious firms farming out work to the country, but this accounts for only 5.4 percent of India's GDP.
"There may be some cases of business process outsourcing or call centres affected," said Deepak Lalwani, director at London's Astaire and Partners.
But "the US subprime situation does not have a direct effect on growth." The economy here grew by a surprise 9.3 percent in the first quarter to June. While economists expect it to slow in coming quarters due to aggressive monetary tightening to fight inflation, economists still forecast full-year growth of 8.5-9.0 per cent compared with 9.4 per cent in the past year.
India's economy has grown by an average annual 8.6 percent in the past three financial years, making it the second fastest expanding after China. But some insist that the subprime upheaval could cause a "significant" slowdown, as "Global risk" has been "at the heart of India's current growth acceleration cycle," Morgan Stanley economist Chetan Ahya said.
Foreign investors have poured billions of dollars into the country to capitalise on its scorching growth, creating vast foreign exchange reserves. "If the current global risk aversion trend continues for more than three months, we believe India could face a significant deceleration in growth," Ahya said in a brokerage note last month.
"It all boils down to international integration. Our growth story is still one mainly of domestic demand," said Soumitra Chaudhuri, economic advisor to Indian ratings agency ICRA.
Bull run likely to last for few more years
The Sensex broke the 13-year upsloping trend channel in September 2005, thereby confirming that a multi-year bull run was underway. This means the bull run is likely to last for a few more years.
This type of sustained bullishness was witnessed earlier in the Dow. The Dow went through a 17-year consolidation phase between 1966 and 1983, which then triggered a mega bull run, leading to an 11-fold increase in the index over the next 17 years.
Hence long-term investors in India would only vary their equity allocation from time to time after taking into account the then-prevailing risk-reward tradeoffs.
In the intermediate term (a few months perspective), the concern among market participants is that the bull run, which commenced in May 2003, may have finally peaked out at 15,869. Technically, we have managed to remain above critical supports during the recent sharp selloff, and hence it may be premature to make such a call.
The upsloping trendline (the backbone) of this entire rally, drawn connecting the lows of May 2003 (2,904) and May 2004 (4,227), has offered support during the June 2006 selloff, and the Sensex has again bounced off this trendline during this month’s correction.
This trendline is currently placed at 13,843. The same trendline drawn on the weekly timeframe has a value between 13,500 and 13,700 over the next two weeks. The recent low is at 13,779, the ‘200-day exponential moving average’ is at 13,837 while the ‘200-day simple moving average’ is at 14,001. The monthly closing of the Sensex in January 2007 was at 14,090. Hence, this makes the 13,800-14,100 level a formidable support zone.
Only a decisive breach of this support zone would trigger a multi-month corrective process, thereby leading to damage in terms of value as well as delaying the sequence of making new highs. The next significant support level in case of a break-down would be between 12,809 and 13,168, where key Fibonacci Retracement levels are placed.
However, merely staying above the 13,800-14,100 support will not necessarily lead to an immediate upsurge in indices and stocks. This is because there will be selling at higher levels by those market participants caught on the wrong foot when the market fell sharply from its peak. The Sensex may thus remain bound between 13,800 and 15,100 for a few more weeks.
The ability to remain above the aforesaid support zone in the coming weeks in the face of sustained selling at higher levels would then enable us to remain positive on the Sensex. The Sensex could then target 17,657 by December 2007. A break-down below the 13,800 and 14,100 support zone would, therefore, delay attaining the above target by several months. For the Nifty, 4,000 remains a key support intra-month while a monthly close above 4,082 would ensure that the intermediate uptrend remains intact.
This type of sustained bullishness was witnessed earlier in the Dow. The Dow went through a 17-year consolidation phase between 1966 and 1983, which then triggered a mega bull run, leading to an 11-fold increase in the index over the next 17 years.
Hence long-term investors in India would only vary their equity allocation from time to time after taking into account the then-prevailing risk-reward tradeoffs.
In the intermediate term (a few months perspective), the concern among market participants is that the bull run, which commenced in May 2003, may have finally peaked out at 15,869. Technically, we have managed to remain above critical supports during the recent sharp selloff, and hence it may be premature to make such a call.
The upsloping trendline (the backbone) of this entire rally, drawn connecting the lows of May 2003 (2,904) and May 2004 (4,227), has offered support during the June 2006 selloff, and the Sensex has again bounced off this trendline during this month’s correction.
This trendline is currently placed at 13,843. The same trendline drawn on the weekly timeframe has a value between 13,500 and 13,700 over the next two weeks. The recent low is at 13,779, the ‘200-day exponential moving average’ is at 13,837 while the ‘200-day simple moving average’ is at 14,001. The monthly closing of the Sensex in January 2007 was at 14,090. Hence, this makes the 13,800-14,100 level a formidable support zone.
Only a decisive breach of this support zone would trigger a multi-month corrective process, thereby leading to damage in terms of value as well as delaying the sequence of making new highs. The next significant support level in case of a break-down would be between 12,809 and 13,168, where key Fibonacci Retracement levels are placed.
However, merely staying above the 13,800-14,100 support will not necessarily lead to an immediate upsurge in indices and stocks. This is because there will be selling at higher levels by those market participants caught on the wrong foot when the market fell sharply from its peak. The Sensex may thus remain bound between 13,800 and 15,100 for a few more weeks.
The ability to remain above the aforesaid support zone in the coming weeks in the face of sustained selling at higher levels would then enable us to remain positive on the Sensex. The Sensex could then target 17,657 by December 2007. A break-down below the 13,800 and 14,100 support zone would, therefore, delay attaining the above target by several months. For the Nifty, 4,000 remains a key support intra-month while a monthly close above 4,082 would ensure that the intermediate uptrend remains intact.
The Indian investor gets savvier
The market has an uncanny habit of beating expectations and surprising even the best of market cynics and optimists. The alarm witnessed during the early phase of the correction in August proves this point. The current volatility has brought forth many questions: what will be the extent of the crisis that has engulfed global bourses, duration of correction and sustainability of the three-year bull run in the Indian market?
In the past month, the average daily volatility witnessed in Nifty increased by nearly 86%, with the average daily point movement in Nifty being approximately ± 2.15%. This implies that the Nifty, on an average, moved 92 points both ways. This is in contrast to the regular market movement during the past one year when volatility was around ± 1.24%.
The spurt in the seismograph of Indian indices was not a one-off phenomenon, but was visible throughout the emerging and developed world. This short-term stampede was largely due to the sharp increase in risk aversion witnessed by investors, primarily FIIs and hedge funds. The rising defaults in the US subprime market — a fall-out of credit abuse — coupled with declining demand for new properties, hit financial companies which had securitised or invested in subprime loans and mortgages.
The consequent rise in losses in the US-based funds resulted in panic and increased redemption pressure on international funds. With the underlying assets (read subprime loans) having become illiquid, redemptions had to be funded via the sale of liquid assets. This led to a sell-off in emerging markets.
A more significant long-term impact of this could be the possibility of a slowdown in US consumption and the economy. The housing slowdown has already caused a dent in the home equity of US consumers. With higher oil prices looking a distinct possibility and declining real wages in the US, fears of a recession in the US economy have become real.
The latest US economic data hints at falling consumption of durable goods, residential investment in free fall, inventories on the increase and declining sales in the retail sector. The focus of the Fed is, therefore, shifting towards growth rather than inflation. So, there is a high likelihood of cut in interest rates in the US.
Against this backdrop, the India Growth Story acquires a much deeper meaning since India is one of the few nations whose growth is largely shielded form global upheavals, including that of the US. This is because almost two-thirds of our GDP comes from domestic consumption. The total Indo-US trade is around $26.8 billion and is growing at 29.5% YoY. Despite the US being our largest trading partner, the total contribution of the US trade in demand for Indian goods is around 1.7% of the GDP.
This implies that the high-paced growth seen in India since the past decade was sustained by internal demand. The government’s commitment to incur a capex of $300 billion in the next five years, coupled with a similar expansion programme in the private sector, has unleashed a capex cycle that is expected to sustain in the mid-term. The gross fixed capital formation in India is already at 30.2% of the GDP and is expected to rise to 35% in five years. This bodes well for India Inc, which can expect to see demand-driven growth in the future. In short, future GDP growth seems to be intact.
However, the domestic stock market will continue to be well-integrated with the global capital market. The eventual de-coupling of the Indian market from the crisis engulfing the rest of the world will begin gradually. The credit premiums offered for emerging markets have declined significantly on the back of huge currency chests of these economies. Against the backdrop of these uncertainties, the Indian investor has shown greater maturity by keeping faith in the market.
In fact, perhaps s/he has become far more confident in facing these bouts of volatility. But complacency should not set in. The investor should consider these bouts of volatility to buy fundamentally strong companies available at good valuations.
In the past month, the average daily volatility witnessed in Nifty increased by nearly 86%, with the average daily point movement in Nifty being approximately ± 2.15%. This implies that the Nifty, on an average, moved 92 points both ways. This is in contrast to the regular market movement during the past one year when volatility was around ± 1.24%.
The spurt in the seismograph of Indian indices was not a one-off phenomenon, but was visible throughout the emerging and developed world. This short-term stampede was largely due to the sharp increase in risk aversion witnessed by investors, primarily FIIs and hedge funds. The rising defaults in the US subprime market — a fall-out of credit abuse — coupled with declining demand for new properties, hit financial companies which had securitised or invested in subprime loans and mortgages.
The consequent rise in losses in the US-based funds resulted in panic and increased redemption pressure on international funds. With the underlying assets (read subprime loans) having become illiquid, redemptions had to be funded via the sale of liquid assets. This led to a sell-off in emerging markets.
A more significant long-term impact of this could be the possibility of a slowdown in US consumption and the economy. The housing slowdown has already caused a dent in the home equity of US consumers. With higher oil prices looking a distinct possibility and declining real wages in the US, fears of a recession in the US economy have become real.
The latest US economic data hints at falling consumption of durable goods, residential investment in free fall, inventories on the increase and declining sales in the retail sector. The focus of the Fed is, therefore, shifting towards growth rather than inflation. So, there is a high likelihood of cut in interest rates in the US.
Against this backdrop, the India Growth Story acquires a much deeper meaning since India is one of the few nations whose growth is largely shielded form global upheavals, including that of the US. This is because almost two-thirds of our GDP comes from domestic consumption. The total Indo-US trade is around $26.8 billion and is growing at 29.5% YoY. Despite the US being our largest trading partner, the total contribution of the US trade in demand for Indian goods is around 1.7% of the GDP.
This implies that the high-paced growth seen in India since the past decade was sustained by internal demand. The government’s commitment to incur a capex of $300 billion in the next five years, coupled with a similar expansion programme in the private sector, has unleashed a capex cycle that is expected to sustain in the mid-term. The gross fixed capital formation in India is already at 30.2% of the GDP and is expected to rise to 35% in five years. This bodes well for India Inc, which can expect to see demand-driven growth in the future. In short, future GDP growth seems to be intact.
However, the domestic stock market will continue to be well-integrated with the global capital market. The eventual de-coupling of the Indian market from the crisis engulfing the rest of the world will begin gradually. The credit premiums offered for emerging markets have declined significantly on the back of huge currency chests of these economies. Against the backdrop of these uncertainties, the Indian investor has shown greater maturity by keeping faith in the market.
In fact, perhaps s/he has become far more confident in facing these bouts of volatility. But complacency should not set in. The investor should consider these bouts of volatility to buy fundamentally strong companies available at good valuations.
Citi Micro Entrepreneur Awards receives 1,000 applications
Citi Group on Monday said Citi Micro Entrepreneur Awards has received almost 1,000 applications from across the country.
About 60 per cent of the application has been received from semi-urban and rural areas, Citi group said in a release.
Of the total application, nearly 50 per cent of applicants are women micro entrepreneur, it said.
The award programme, recognises the entrepreneurial skills of the underprivileged, is funded by grant support from Citi Foundation and implemented by Delhi-based NGO Partners in Change.
Since inception in 2004, around Rs 3 crore have been invested in this programme, it said.
About 60 per cent of the application has been received from semi-urban and rural areas, Citi group said in a release.
Of the total application, nearly 50 per cent of applicants are women micro entrepreneur, it said.
The award programme, recognises the entrepreneurial skills of the underprivileged, is funded by grant support from Citi Foundation and implemented by Delhi-based NGO Partners in Change.
Since inception in 2004, around Rs 3 crore have been invested in this programme, it said.
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