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SEZs to have duty-free shops

SPECIAL economic zones (SEZs) are getting another cap on their feather: Duty - free shopping. The government has agreed to allow duty-free outlets in SEZs and a dozen applications filed by Fiemin-go Duty free Shop Ltd which runs duty-free outlets across the country’s major international airports are under consideration now.

Since SEZs are still going through teething troubles, setting up duty-free outlets in these zones was a grey area till now and there was no clarity on allowing foreign investment in such out-lets. Therefore, the issue was discussed by the Foreign Investment Promotion Board (FIPB) recently and it has been decided that such outlets can be allowed with prior permission from the department of commerce.

It is understood that rules will be framed for such outlets by the department in consultation with revenue officials. To avoid confusion, the government would specify the categories of people who would be eligible for purchase from these outlets and the value ceiling on such transactions. SEZ units and SEZ developers are entitled to duty-free inputs but not all purchase of consumer goods might be covered by this concession.

Apart from SEZs, Flemingo had sought permission for opening duty-free outlets at Wagah border with Pakistan and the Paradeep port. The foreign investor had also suggested that an ‘omnibus’ clearance should be given instead of approving new outlets one by one.

After discussing the ‘omnibus’ clearance suggested by the foreign investor, FIPB decided that permission should be granted only with the approval of the nodal authorities — commerce & industry ministry in the case of SEZs, the civil aviation ministry in the case of airports and the ministry of shipping in the case of ports.

ABB mulls entry into ports, SEZs

RIDING on the growth of its core business and with order backlog of Rs 3137.5crore as of June, ABB India is now looking at increasing its market penetration by adding new revenue streams and more channel partners. The power and automation technology major is also planning to increase its total headcount, which currently stands at around 5,000.

Speaking to ET ABB India vice chairman & MD Ravi Uppal said: “We are planning to hire close to 800 people within this year against 600 last year.” He adds: “There are plans to increase the number of scientists, engineers and domain experts from 356 to 5oo at the R & D centre in Bangalore.” The company also intends to increase the number of engineers at the recently established global operations-cum-engineering centre at Peenyain Bangalore, which is fully functional with around 250 engineers.

As a long-term strategy to strengthen its marketing base and improve the reach of its products in the Tier n cities ABB India is planning to hire around 300 channel partners or distributors in the near future. Currently, the company has a network of 650 channel partners. These channel partners are mainly responsible for the sale of standard products like low voltage switchgears, drives and motors.

ABB India is also looking at the prospect of adding new business streams like developing automation system for ports and process automation and electrification of upcoming SEZs across India. “With metals leading the charge, ABB India is aggressively targeting sectors like pulp & paper, cement, construction and pharm,” says Uppal.

Source : ET

Star tag to be made must for real estate developers too

After star hotels, now it is turn for star-rated real estate developers. Soon government would make it mandatory for developers to get rated by urban development ministry to operate in the country. Developers will be accorded star grades between one and five on the basis of their past performance, quality of products and net worth.

The move is aimed at protecting consumer interests in deciding whether they are gelling value for their money spent, a government source said. As the market is flooded with developers of various hues, who promise moon but end up in fleecing, the government has decided to introduce a rating system, he added. If a developer fails to deliver according to the contract, the star status would be taken away.

Confirming the move Anil Baijal, secretary, urban development ministry said: “The exact parameters are not set as yet. The decision is in sync with bring more transparency in obligations and full disclosure. The whole idea for setting up a regulation is to ensure that the consumers are not taken for a ride.”

According to sources in Nirman Bhawan, government is already discussing the proposed modalities with various quarters including industry bodies Ficci and Assocham and the real estate developers. Not only, companies’ forthcoming projects will also have to meet yardsticks for the star accreditation. This accreditation will be granted on the basis of plans submitted by developers to the regulatory authority. Moreover, if developers fail to make the project ready for occupancy, they risk loosing the star status.

Developers say, this move will be viable only if the government also takes proactive measures to check the consumers also adhere to the agreed payment mechanism.

Says Rumneek Bawa, chief executive officer (CEO), Uppal’s Group, “For instance many a time consumers fail to pay up installments, though there may not be any genuine problems.

Source : ET

Retail war cry echoes globally

AS the noisy tug-of-war for retail talent gains momentum in India, it’s echoes are being heard abroad. A steep demand-supply gap is increasingly forcing new entrants in retailing to go on a global hunt. Local poaching is just not sufficient as they have discovered. Several head hunters confirm, they have international mandate to head hunt in the developed markets that offer the same complexity and scale as is being envisaged by the fresh retail ventures back home.

Reliance Retail, which mopped up the market to fill its top positions early this year, is now looking overseas to fill vacancies in the core areas in its retail venture. So is the AV Birla Group, which has roped in ex - Shoppers Stop honcho Vijay Kashyap to help it hand-pick key people. Ebony Retail Holdings, which is on an overdrive, too, is bringing key executives from global retail chains who have worked in large, complex and more mature markets such as China and Japan. Seeing all this, it doesn’t surprise many when sources say, Bharti has brought in a Tesco honcho, an expat, as CEO for its retail venture.

Much of the head hunting overseas is meant to bring in professionals especially in operations and merchandising. “There is no option but to scour global markets for talent in the retail sector considering the modem retail has a short history,” says B S Nagesh, CEO, Shoppers Stop. Yet he feels that people, who come on board, will have to go through a complicated learning curve.

The crunch is so acute that even abroad, companies are looking at professionals who have retired from global retail chains. And this is going to stay for some time, say analysts. “There’s a huge market for what they call interim executives in the US, which include people who may have retired and would be happy doing trouble shooting or work on a project basis.

This is being seen as a potential talent pool now,” says Atul Vohra, managing partner, Transearch, which has just helped a client get a key executive for a hyper market venture in India. Adds Arun Das Mahapatra, managing partner, Heidrick & Struggles: “We are focusing on talent mapping of Indians abroad with the objective of repatriating them for specialised sectors that lack competency in India.” Meanwhile, locally, the retail brigade is hunting for talent from outside of retail as there’s little to poach from within, says K Sudarshan, managing partner, EMA Partners. “For now, any hiring exercise for retail ventures is looking at sectors beyond retail such as those which are mass market and operations led, but many have started going overseas for talent hunt.”

Tug-of-war
The retail war for staff has entered global turf. Several head hunters confirm they have international mandate to head hunt in the developed markets that offer the same complexity and scale as is being envisaged by the fresh retail ventures back home.

Source : ET

GMR to setup 250-acre aerotropolis around IGI

NEW DELHI : The GMR-led joint venture company, Delhi International Airport (Dial), plans to develop an aerotropolis around the Indira Gandhi International Airport, which could provide facilities like convention centres, malls and golf course. “Dial proposes to build a world class Aerotropolis by developing 250 acres of land around the Delhi Airport for commercial activities,” a company official said. The company plans to partner with leading real estate developers in the country to set up facilities for business as well as casual travellers. The Dial official said developing the aerotropolis was a part of the company’s plans to increase non-aeronautical revenue. The proposed aerotropolis is expected to be linked with the city via an eight lane highway as well as the high speed metro line running from the city centre.

Sealing in Delhi to Resume from September 2006

The Municipal Corporation of Delhi (MCD) will start the sealing of the unauthorised commercial properties in post areas of Delhi from the 1st September. According to the Supreme Court this will be the Middle path for the stopping the commercialization of the residential colonies in Delhi. Shutters will be brought down by the MCD in the Following A and B class area of Delhi.

Gulmohar Park
Anand Niketan
Basant Lok
Friends Colony

Auto repair shops, Liquor shops, gyms, pre primary schools will be the main target in this sealing campaign. No professional activities except the doctors, lawyers, architects, chartered accountants, will be allowed to in residential colonies. These doctors, lawyers, architects, chartered accountants will only be allowed these colonies if they are the property owners and the total commercial activity should not extend more than 50% of the area. Placement agencies, Offices, Call centers and data entry centers will be pushed out of these post colonies.

DLF using Shahrukh Khan as brand ambassador

DLF, the real estate major of Gurgaon is set to sign up Bollywood Badshah Shah Rukh Khan as brand ambassador. DLF is one of the most preferred Real Estate Developer for the higher end apartments and Properties. DLF is not the First real estate developer using celebrities to promote their brands. Celebrities like Yuvraj Singh, Shane Warne, Kapil Dev, Perizaad Zorabian and Amitabh Bachchan have been lending their star power to specific real estate projects of various developers over the past year. The Sahara Group with its Aamby valley project was perhaps a trendsetter in using celebs to promote a project with national and international celebs including Big B, Boris Becker, Nadia Comaned, Carl Lewis, and Anna Kournikova.

With the increasing number of Hollywood and Bollywood Celebrities in the Real Estate, the properties are now also becoming consumer products rater that an Asset in the advertising market. DLF will be unveiled Shahrukh Khan as the Brand Ambassador at Kuala Lumpur during the tri-nation cricket series featuring India, Australia and West Indies, in September. DLF will be forking out between Rs 10-15 crore to be the key sponsor for the tournament.

SEZ Sops now in Rajya Sabha

The SEZ sops controversy has now reached the Rajya Sabha at last. The commerce minister Kamal Nath has said that the projected revenue loss from the incentives was only imaginary and these SEZ will be one of the major income to the Government and will definitely act as a booster to the Economy of the Country. He clarified that “According to a study by National Institute of Public Finance and Policy the loss of tax revenue on account of SEZs on the indirect tax front would be Rs 90,000 crore and direct taxes Rs 70,000 crore”.

He also discussed that there are around 28 operational SEZ’s across the country which have accounted for exports worth Rs 22,000 crore last year besides creating direct employment for over one lakh people and the SEZs operational at present had 927 manufacturing units and an investment of Rs 2000 crore had flowed into them in last two months. Nath, however, said, “Taxes cannot be exported to remain competitive. The government offers tax concessions to exporters otherwise also. The incentives for units in SEZs cannot be less than what is being offered outside.”

SEZ Policy changes may hurt developers

So, the tussle between the Ministry of commerce and Finance is getting to the throat of the SEZ developers. The Finance ministry has challenged the criterion for the selection of the developers of the Special Economic Zones (SEZ’s). The government would have to rewrite the SEZ policy and all approvals would need a fresh look, if the finance ministry’s latest proposal is accepted. The finance ministry has also said that a policy framework would be desirable in order to counter charges of discrimination, even for the current lot.

Our Review : In case the proposal of the Finance Ministry is accepted, there will be a definite downfall in the real estate market and specially the developers who have already purchased the Real Estate in their concerned states will have to face a huge loss. What we personally feel that the problem with the finance ministry is that, they will not get anything out of these special processing zones. Most of the incentives that are given in the SEZ are against the Finance ministry. But the point is that, these SEZ, whenever operational will give a great push to the economy of the country and especially where the overseas multination companies will seek permission to set up there units here in India, will give the country a good amount of foreign exchange. Many industrial sectors, like textiles, which are facing problem with the Chinese goods into the market will defiantly have a chance to rise in the overseas market.

Reliance Retail: First store in Hyderabad in September

With the mega 25000 crore project in the news from June onwards this year, the company has now announced to open its first store in the Hi-tech city of Hyderabad. The store will be a specialty store of vegetable and food. “We will be opening our first store in Hyderabad in September and this will be a very large store with food, vegetables and staples,” Reliance Retail president and chief executive (operations and strategy) Raghu Pillai said.

The company was in news with the governments and cooperative chains for alliances in the sector. There was a news some days back that the Reliance is looking for real estate in different states. The company had plans to spread to other parts of the country soon, though refusing to divulge details on the number of stores it hoped to close this fiscal year with.

Our Review: With growing retail sector in the country and specially the ongoing foreign investments in the retail sector, the future of this sector is definitely bright. With Reliance getting into this sector with a blast, it is definitely going to hurt the existing big B’s like Vishal Megamart, Super Bazaars and Big Bazaars.