South Korean carmaker Kia Motors Corp will announce a plan for its first factory in India "soon", vice-chairman Lee Hyong-keun told reporters on Wednesday.
The comment, made on the sidelines of the Shanghai auto show, came after Kia and affiliate Hyundai Motor Co suffered a March sales slump in China, their biggest market, attributed to a political standoff and rising competition from local brands.
Kia said in a regulatory filing on Wednesday that the investment size for its India plant has not been decided.
India's Economic Times newspaper reported on Monday that the envisioned factory involves two phases with combined investment of $1.6 billion, in one of the biggest foreign direct investment projects in India.
Reuters reported in February that Kia was close to finalising Andhra Pradesh as the site for its first Indian factory, with production scheduled to start in 2019.
India, with a young skilled work force, high growth rate and deregulation being undertaken by the government, is set to become an important destination for foreign investment, a former top US trade official has said. “With the young skilled work force, its growth rate that is going to surpass China for the coming years as well as the market opening and deregulation undertaken by Prime Minister Narendra Modi will make this a really important destination for foreign investment,” Wendy Cutler, who was the Acting Deputy US Trade Representative under Obama administration told a Washington audience yesterday
Speaking at a panel discussion on the occasion of launch of Foreign Direct Investment (FDI) Confidence Index, Cutler said, India under Modi has emerged as among the favourite destinations for foreign investors. For the second consecutive year, India appears in top 10 of the index. This year, it was placed at eighth spot as against ninth last year.China has slipped to the third spot. Germany has now become the second top destination in the FDI Confidence Index after the US, which takes the fifth spot for the fifth year in a row
“Five of the top 10 countries are from Asia. There is a lot of optimism about investment opportunities in Asia, not only among Asian but also global investors as well. Clearly China and India seems to be the cause of this lot of optimism. India moved eighth on the index,” she said
Cutler said the optimism about investment in China “does not seem to be in line from what we are hearing” from not only the US business community but also the European business community as well
In her previous stint in the United States Trade Representative, she was responsible for the Trans-Pacific Partnership agreement (TPP), US China trade relations and US India Trade Policy Forum. “The investment climate is getting worse in China. Companies are facing a lot of restrictions in China, whether it be licensing or approval process or favourable treatment of domestic competitors or requirements to share technology. We are hearing from our companies that their optimism is declining,” Cutler said
Noting that the Chinese FDI in the US and vice versa should be watched closely, she said there is a growing concern that while the US and foreign companies are facing restrictions in China, there is a feeling that Chinese companies face few restrictions here in the US
“India on the other hand is moving towards becoming a favourite FDI destination,” she said. “When you loom at India, it is moving from a close market to an open market. The reforms that are being undertaken are perhaps not as ambitious as one would hope for. But under Prime Minister Modi, India is really under track towards opening,” she said
Contrasting India, a little bit with China, Cutler said that China was really open to foreign direct investment. “But we are seeing that trend going in a different direction,” Cutler said
“The other thing that makes me think very favourably about India is that it does not face the same demographic challenges that many Asian countries face. India with most of its population under 40 offers a very attractive destination, coupled with the high skilled nature of the work force,” she said. However, she said India is “one of the difficult countries” to negotiate
“So while all these developments are positive, they have a way to go here, but they are moving in the right direction,” Cutler said. Global Business Policy Council chairman Paul Laudicina said that India’s youth population gives India wage price advantage over China
In China, average manufacturing wages have tripled between 2006 and 2015. “This is part of the reason that coupled with a robust growth, a huge internal market, Modi government’s attempt to promote investment, the intention to abolish the foreign investment promotion board, access to the retail sector is being made more accessible. All of this makes India a robust environment,” he said.
BuildingIQ (ASX: BIQ) today announces that it has partnered with the Springfield Land Corporation (SLC) to implement its cloud-based platform for creating IoT-enabled buildings, at 6 Yoga Way Springfield Central which houses GE’s Queensland, Australia headquarters among other tenants. The 14,000-square meter, AU$72 million futuristic office, located in central business district (CBD), boasts a stellar reputation for sustainability with a 6 Star Green Star rating and the Current Performance with a 4 Star NABERS rating. The building is targeting a 4.5 NABERS rating performance. BuildingIQ’s 5i platform – built upon the five pillars of data capture and analysis, modeling, measurement & verification, control, and human expertise – is being used to add unprecedented transparency into the building’s operations, maximize occupant comfort and optimize energy usage.
Through ongoing analysis, the BuildingIQ 5i platform yielded immediate benefit. The platform has been used to identify high load within the building and has provided actionable, data-driven insights for the building manager to streamline operations. The moment BMS data begins to flow to BuildingIQ’s cloud, pattern and trend anomalies can potentially be identified and tracked. This approach also provides the benefits of scale that large portfolio owners require to manage energy across wide geographies. The same work that is being done at GE’s building can be replicated throughout numerous properties. BuildingIQ’s platform enables a portfolio approach to energy management, with building data from multiple structures and BMSs being pulled into one central repository or dashboard.
“We are excited about this strategic partnership to create a smart city solution using BuildingIQ’s technology,” said Paul Wyatt, Chief Digital Officer of Springfield Land Corporation. “There has been a large emphasis on the construction of Greater Springfield thus far, and creating a digital infrastructure to optimize operations is just as important. The data-driven approach that BuildingIQ provides to us through its 5i platform ensures that we continue to make informed choices that will benefit the fledgling city as it continues to grow.”
The scalability of BuildingIQ’s platform is significant as the building is just one structure within the Greater Springfield area. The development covers 2,860 hectares with 390 hectares dedicated to the CBD. The dedicated space provides a future employment base for an estimated 52,000 workers with an area of 2.6 million-square meter of office, retail, health and technology facilities. With BuildingIQ’s extensive experience in working to augment BMS’s from virtually any provider within commercial office spaces, education campuses, healthcare facilities and retail spaces, there is great potential for expansion within Springfield. In addition, to the benefits that daily energy optimization provides, widespread adoption of the 5i platform would also create the necessary foundation for the city as a whole to participate in demand response events.
“It’s inspiring to watch SLC execute on turning Chairman Maha Sinnathamby’s smart city vision into a reality,” said Michael Nark, president and CEO of BuildingIQ. “Incorporating our IoT-enabled, energy management platform will ensure that the city’s building infrastructure, such as 6 Yoga Way, lives up to its full energy efficiency potential. Without continuous monitoring and fine-tuning of controls and operations, even the highest performing buildings will drift into inefficiency. Incorporating BuildingIQ early in the building’s life will ensure the proper return on investment is reached.”
India’s growth has been “impressive” in the recent years which makes room for tax broadening efforts by the government, according to a top IMF official.
“India has recorded quite an impressive growth performance in recent years. Our view is that the elimination of fuel subsidies and the targeting of social benefits has delivered in terms of allowing the union budget target to be achieved at 3.5 per cent of GDP,” Vitor Gasper, Director of the IMF Fiscal Affairs Department told reporters at a news conference here yesterday.
“We have been collaborating with the Indian authorities in terms of looking at fiscal structural measures, including expenditure rationalisation while protecting infrastructure investment, tax broadening efforts,” he said.
In this context, the rollout of Goods and Services tax (GST) is an extremely important step that will create a true unified national market in India, he said. “We see room for tax broadening efforts. We see room for more progressive income taxes in line with trends in income inequality. Perhaps more generally, we do see a case for a medium-term framework and we know that the authorities are actively working on that,” Gasper said.
He also said inequality has increased in both India and China. “As was the case for India, in China you see that inequality has increased. From that viewpoint, you could advocate, you should advocate social spending and taxation reform in order to address that issue in China.
“At the same time, it turns out that increase in social spending and change in taxation does support the transfer of expenditure from investment to consumption. That is part of the overall rebalancing of the Chinese economy,” Gasper said.
Gasper said globalisation and technological change have been major drivers of economic growth and cross country convergence. “More than one billion people have been lifted out of extreme poverty since the early 1980s, and most of them come from China and India,” he said.
“At the same time, when you focus on country indicators, you see that inequality has increased in most advanced economies and large emerging economies. Again, I am referring to China and India,” Gasper said.“The clear perception around the world of widespread increases in income inequality illustrates the dominance of national politics shaping these perceptions. Fiscal policies, government expenditures and revenues are powerful means to ensure the sharing of the growth dividend,” the IMF official added.
Malcolm Turnbull has defended the use of a federal fund to help Indian billionaire Gautam Adani build a vast coal project in central Queensland as Bill Shorten warns against offering a concessional loan to the project even though his Queensland Labor colleagues want it built.
The Prime Minister declared the coalmine would create “tens of thousands” of jobs and boost state and federal budgets for years and that the nation needed a $5 billion fund to open up the “economic frontier” of Northern Australia with big projects like Adani coalmine, rail link and connected port.
One day after Mr Turnbull met Mr Adani in New Delhi to discuss the mine plans, Labor sided with green groups who warn against the use of the Northern Australia Infrastructure Fund to give the project a concessional loan.
Mr Adani has told the Indian media his project is eligible for a $900 million loan and Deputy Prime Minister Barnaby Joyce yesterday warned the rail project was at a “tipping point” and needed the federal support. The Prime Minister did not repeat Mr Joyce’s warning but emphasised the broader gains from the project if it went ahead on commercial terms.
“The project, if it is built, will create tens of thousands of jobs,” he said. “It will generate, over the course of its life, an enormous amount in taxes and in royalties, revenues for state and federal governments. So plainly there is a huge economic benefit from a big project of this kind, assuming it’s built and it proceeds.”
Mr Turnbull compared the NAIF to the Clean Energy Finance Corporation, another government agency that offers loans to energy projects and has made a profitable return.
“The Northern Australia Infrastructure Fund is an important part of our commitment to development of Australia’s north — that is our big economic frontier, a huge opportunity with far too little development, far too little infrastructure,” he said.
Mr Shorten said the mine and rail line needed to make sense commercially rather than requiring taxpayer help. “We need the Adani project to stack up. It needs to stack up environmentally and commercially,” he said. “I haven’t seen the case made for the taxpayer to underwrite a $1bn loan.”
Adani has estimated its project will create 10,000 jobs over time, but this is based on economic modelling that goes out to 2030 and was disputed in a court hearing on the environmental approvals for the mine. With the rail link added, it could be 13,000 jobs. The mine would create 1464 jobs including indirect jobs according to consulting firm GHD, which was commissioned by Adani.
With the Nationals strongly backing the Adani project, Mr Joyce yesterday argued the federal loan was needed to ensure the plans survived a “tipping point” that could halt everything. “I know the greenies will go off their heads and they’ll be ringing me up and tweeting me and they’ll be ringing me up and tweeting me right now, but I can deal with that,” he said.
While Mr Adani has called for more federal help to remove regulatory barriers, Mr Turnbull said it was up to the company to overcome any commercial barriers.
“The obstacles or the challenges for Adani in this project are commercial ones. He is very confident basically because he is building a vertically integrated project — he is going to be producing coal, most of which he will be buying himself to fuel his own power stations in India,” he said.
Asked about whether he was confident the Adani mine would go ahead, Mr Turnbull said: “It’s a long time since I gave commercial appraisals on projects for a living. I’ll leave that to Mr Adani.”