BAMNOD, India — The 50-year-old farmer knew from experience that his onion crop was doomed when torrential rains pounded his fields throughout September, a month when the Indian monsoon normally peters out.
For lack of modern agricultural systems in this part of rural India, his land does not have adequate drainage trenches, and he has no safe, dry place to store onions. The farmer, Arun Namder Talele, said he lost 70 percent of his onion crop on his five-acre farm here, about 70 miles north of the western city of Aurangabad.
“There are no limits to my losses,” Mr. Talele said.
Mr. Talele’s misfortune, and that of many other farmers here, is a grim reminder of a persistent fact: India, despite its ambitions as an emerging economic giant, still struggles to feed its 1.1 billion people.
Four decades after the Green Revolution seemed to be solving India’s food problems, nearly half of Indian children age 5 or younger are malnourished. And soaring food prices, a problem around the world, are especially acute in India.
Globally, floods in Australia and drought in China have helped send food prices everywhere soaring — on fears the world will see a repeat of shortages in 2007 and 2008 that caused food riots in some poor countries, including Egypt.
While India’s agricultural problems are part of this bigger global puzzle, in many ways India’s food challenges are more entrenched and systemic than those faced elsewhere.
Western investors may take eager note of India’s economic growth rate of nearly 9 percent a year. But that statistic rings hollow in India’s vast rural areas. Agriculture employs more than half the population, but it accounts for only 15 percent of the economy — and it has grown an average of only about 3 percent in recent years.
Critics say Indian policy makers have failed to follow up on the country’s investments in agricultural technology of the 1960s and ’70s, as they focused on more glamorous, urban industries like information technology, financial services and construction.
There is no agribusiness of the type known in the United States, with highly mechanized farms growing thousands of acres of food crops, because Indian laws and customs bar corporations from farming land directly for food crops. The laws also make it difficult to assemble large land holdings.
Yet even as India’s farming still depends on manual labor and the age-old vicissitudes of nature, demand for food has continued to rise — because of a growing population and rising incomes, especially in the middle and upper classes. As a result, India is importing ever greater amounts of some staples like beans and lentils (up 157 percent from 2004 to 2009) and cooking oil (up 68 percent in the same period).
Food prices are rising faster in India than in almost any other major economy — and faster than they did during the 2007-8 surge.
In December 2010, India’s food prices jumped 13.7 from the year earlier, while inflation for all commodities, heavily weighted by the food number, stood at 8.4 percent.
A snapshot number released in mid-January showed Indian food prices rising even faster — more than 17 percent over the same period in 2009 — as the cost of onions, fruit, eggs, milk and other commodities rose.
Food inflation hits especially hard here because Indians — most of whom live on less than $2 a day — spend a bigger portion of their disposable incomes on food than people in other big, developing economies like China and Brazil.
“This is the worst form of taxation on the poorest of the poor,” said Ashok Gulati, Asia director for the International Food Policy Research Institute.
Indian government officials have scrambled to make up the shortage of vegetables like onions by importing them. These short-term efforts have helped; onions are now available at 20 rupees a kilo (about 20 cents a pound) in Mumbai, down more than 70 percent from their recent highs.
But experts say the widening gap between agriculture’s anemic supply and the rising demand for food calls for fundamental changes in farming policies.
During the Green Revolution the government invested heavily in rural agriculture, with an emphasis on hybrid seeds, fertilizers and irrigation canals.
Friday, February 11, 2011
India’s Industrial Output Growth Slows to 20-Month Low
India’s industrial output grew at the weakest pace in 20 months, adding to concern the economy may slow after the steepest interest-rate increases in Asia.
Output at factories, utilities and mines rose 1.6 percent in December from a year earlier after a revised 3.62 percent gain in November, the government said in a statement in New Delhi today. The median estimate of 27 economists in a Bloomberg News survey was for a 2 percent increase.
Reserve Bank of India Governor Duvvuri Subbarao has signaled borrowing costs will rise further to damp inflation after boosting rates seven times in a year. Concern price gains and costlier credit will damage purchasing power has spurred a 15 percent slump in the Bombay Stock Exchange’s Sensitive Index this year, the region’s worst fall.
“Higher inflation and borrowing costs will have a damping effect on the demand going forward” said Ramya Suryanarayanan, an economist at DBS Group Holdings Ltd. in Singapore. “But the main reason output slowed is because of very strong base effect.”
December’s production number in India may have been affected by the comparison with a year earlier period when output jumped as the economy rebounded from the global financial crisis. Industrial output climbed 18 percent in December 2009, according to government data.
Stocks Gain
The Sensitive Index erased the day’s losses by close of trading and gained 1.5 percent. The yield on the 7.8 percent bond due in September 2020 rose two basis point to 8.15 percent. The rupee was little changed.
Production growth in December was dragged down by manufacturing, which rose 1 percent from a year earlier, compared with a 3.2 percent gain in the previous month, today’s report showed. Mining production rose 3.8 percent and electricity output gained 6 percent. Capital goods production fell 13.7 percent.
“The output growth slowed mainly because of the base effect and doesn’t mean we are going into weak growth,” India’s Industry and Commerce Minister Anand Sharma told reporters in New Delhi today. “We’ll end with higher growth this year than last year.”
Subbarao raised the key repurchase rate by a quarter of a percentage point last month to a two-year high of 6.5 percent and pledged to persist with an “anti-inflationary monetary stance” as he lifted the nation’s inflation forecast because of higher food costs.
Inflation Forecast
India’s benchmark wholesale-price inflation rate may be at 7 percent by March 31, more than the 5.5 percent estimated earlier, Subbarao said. The gauge stood at 8.43 percent in December.
In China, where industrial output climbed 13.5 percent in December, the central bank this week increased rates for the third time since mid-October ahead of a report forecast to show inflation accelerated to the fastest pace in 30 months.
IDBI Gilts Ltd. economist Namrata Padhye said demand in some segments of India’s economy, such as real estate, is showing signs of easing. DLF Ltd., India’s biggest real-estate developer, on Feb. 1 said net sales rose 22.4 percent in the quarter through December compared with a 35 percent gain in the previous quarter.
Cement production by companies including Ambuja Cements Ltd., a subsidiary of Holcim Ltd., the world’s second-largest maker of the building material, fell 2.2 percent in December, according to separate government data.
Investor Confidence
Investor confidence in India may be hurt as rising rates cause growth to slow, Robert Prior-Wandesforde, the Singapore- based head of India and Southeast Asia economics at Credit Suisse, said on Feb. 9.
The pace of India’s economic expansion may drop to 7.7 percent in the year ending March 31, 2012, from an estimated 8.4 percent this year, Prior-Wandesforde said.
Samiran Chakraborty, a Mumbai-based economist at Standard Chartered, this month reduced his growth projection for the period to 8.1 percent from 8.8 percent.
The government on Feb. 7 predicted gross domestic product will gain 8.6 percent in the year ending March 31, the fastest pace in three years.
Citigroup Inc. this week recommended investors buy Indian shares, saying analysts had become “overly pessimistic” on the outlook for corporate earnings.
Subbarao said Jan. 25 that India’s production data has been “volatile” this year and that company sales, indirect tax collections and leading indicators of growth in services suggest “persistence of the growth momentum.”
Car sales in India rose 26 percent to a record in January, adding to evidence of strong consumer demand. Excise tax collections in the nine months through December rose about 34 percent, indicating growing sales at companies.
“There are some segments that are looking strong while others aren’t,” said IDBI Gilts’ Padhye. “One needs to look at numbers for the next couple of months to firmly establish growth is slowing.”
Output at factories, utilities and mines rose 1.6 percent in December from a year earlier after a revised 3.62 percent gain in November, the government said in a statement in New Delhi today. The median estimate of 27 economists in a Bloomberg News survey was for a 2 percent increase.
Reserve Bank of India Governor Duvvuri Subbarao has signaled borrowing costs will rise further to damp inflation after boosting rates seven times in a year. Concern price gains and costlier credit will damage purchasing power has spurred a 15 percent slump in the Bombay Stock Exchange’s Sensitive Index this year, the region’s worst fall.
“Higher inflation and borrowing costs will have a damping effect on the demand going forward” said Ramya Suryanarayanan, an economist at DBS Group Holdings Ltd. in Singapore. “But the main reason output slowed is because of very strong base effect.”
December’s production number in India may have been affected by the comparison with a year earlier period when output jumped as the economy rebounded from the global financial crisis. Industrial output climbed 18 percent in December 2009, according to government data.
Stocks Gain
The Sensitive Index erased the day’s losses by close of trading and gained 1.5 percent. The yield on the 7.8 percent bond due in September 2020 rose two basis point to 8.15 percent. The rupee was little changed.
Production growth in December was dragged down by manufacturing, which rose 1 percent from a year earlier, compared with a 3.2 percent gain in the previous month, today’s report showed. Mining production rose 3.8 percent and electricity output gained 6 percent. Capital goods production fell 13.7 percent.
“The output growth slowed mainly because of the base effect and doesn’t mean we are going into weak growth,” India’s Industry and Commerce Minister Anand Sharma told reporters in New Delhi today. “We’ll end with higher growth this year than last year.”
Subbarao raised the key repurchase rate by a quarter of a percentage point last month to a two-year high of 6.5 percent and pledged to persist with an “anti-inflationary monetary stance” as he lifted the nation’s inflation forecast because of higher food costs.
Inflation Forecast
India’s benchmark wholesale-price inflation rate may be at 7 percent by March 31, more than the 5.5 percent estimated earlier, Subbarao said. The gauge stood at 8.43 percent in December.
In China, where industrial output climbed 13.5 percent in December, the central bank this week increased rates for the third time since mid-October ahead of a report forecast to show inflation accelerated to the fastest pace in 30 months.
IDBI Gilts Ltd. economist Namrata Padhye said demand in some segments of India’s economy, such as real estate, is showing signs of easing. DLF Ltd., India’s biggest real-estate developer, on Feb. 1 said net sales rose 22.4 percent in the quarter through December compared with a 35 percent gain in the previous quarter.
Cement production by companies including Ambuja Cements Ltd., a subsidiary of Holcim Ltd., the world’s second-largest maker of the building material, fell 2.2 percent in December, according to separate government data.
Investor Confidence
Investor confidence in India may be hurt as rising rates cause growth to slow, Robert Prior-Wandesforde, the Singapore- based head of India and Southeast Asia economics at Credit Suisse, said on Feb. 9.
The pace of India’s economic expansion may drop to 7.7 percent in the year ending March 31, 2012, from an estimated 8.4 percent this year, Prior-Wandesforde said.
Samiran Chakraborty, a Mumbai-based economist at Standard Chartered, this month reduced his growth projection for the period to 8.1 percent from 8.8 percent.
The government on Feb. 7 predicted gross domestic product will gain 8.6 percent in the year ending March 31, the fastest pace in three years.
Citigroup Inc. this week recommended investors buy Indian shares, saying analysts had become “overly pessimistic” on the outlook for corporate earnings.
Subbarao said Jan. 25 that India’s production data has been “volatile” this year and that company sales, indirect tax collections and leading indicators of growth in services suggest “persistence of the growth momentum.”
Car sales in India rose 26 percent to a record in January, adding to evidence of strong consumer demand. Excise tax collections in the nine months through December rose about 34 percent, indicating growing sales at companies.
“There are some segments that are looking strong while others aren’t,” said IDBI Gilts’ Padhye. “One needs to look at numbers for the next couple of months to firmly establish growth is slowing.”
Tata Motors Net Beats Estimates as Economic Recovery Boosts Jaguar Demand
Tata Motors Ltd., the owner of Jaguar Land Rover, said third-quarter profit more than tripled as a global economic recovery and rising wealth in emerging markets boosted demand for luxury vehicles.
Net income rose to 24.2 billion rupees ($529 million) in the three months ended Dec. 31, from 6.5 billion rupees a year earlier, the Mumbai-based automaker said in a statement today. That exceeded the 21.5 billion-rupee average of 22 analyst estimates compiled by Bloomberg. Sales gained 22 percent to 315 billion rupees.
Jaguar Land Rover posted a profit after tax of 275 million pounds ($440 million) in the quarter as sales climbed in China where Tata Motors plans to start building the British brands. The revival in luxury vehicle demand has spurred Bayerische Motoren Werke AG and Daimler AG to expand production and target record sales this year.
“The overall picture looks very good for Tata Motors,” said Juergen Maier, a Vienna-based fund manager for Raiffeisen Capital Management who helps manage about $1.3 billion in assets. “There is a huge demand for luxury cars and competitors like BMW and Mercedes Benz are unable to produce enough to meet demand.”
Tata Motors rose 3.7 percent to 1,142.7 rupees at the 3:30 p.m. close of trading in Mumbai, while the benchmark Sensitive Index of the Bombay Stock Exchange gained 1.5 percent.
China, U.S.
Jaguar sales gained almost 50 percent last year in China, while deliveries of Land Rover SUVs more than doubled, Tata Motors said in January. The automaker has said it will build the Land Rover in China and India as economic growth and rising incomes boost demand in the world’s two most-populous nations.
Tata Motors plans to annually invest as much as 1 billion pounds in Jaguar Land Rover’s capital expenditure and product development, Chief Financial Officer C. Ramakrishnan said at a press conference in Mumbai. In India, Tata will spend as much as 30 billion rupees on its factories and products.
Jaguar anticipates sales growth of more than 10 percent in 2011, Adrian Hallmark, brand director, said last month. The luxury marque plans to expand its presence in China with 10 new dealers to take the number of outlets to 50, Hallmark said.
The Evoque, Land Rover’s smallest and cheapest vehicle, which will cost about $40,000 in the U.S. when it hits dealers in the fall, will help the brand increase sales in 2011 from last year’s 181,000 and should lead to a record in 2012 of more than 225,000, according to John Edwards, Land Rover’s brand director.
Trucks, Buses
BMW customers must wait as many as three months for most models and as long as six months for the overhauled X3 sport- utility vehicle. Waiting times at Daimler’s Mercedes-Benz are at close to the pre-recession levels of 2007, with most vehicles ordered now scheduled for delivery at the beginning of the second quarter.
Tata Motors’s sales of trucks and buses in India rose 22 percent to 113,622 units, according to the statement. Sales of passenger vehicles, including the world’s cheapest car Nano, increased 5 percent to 64,501.
The Nano went on sale nationwide in India in January after lengthier warranties and easier financing helped sales rebound in December from a record low. Demand for the car, which costs as little as 137,555 rupees in New Delhi, surged to 5,784 units in December from 509 a month earlier after Tata began television advertisements, added more sales points and introduced a 99 rupee-a-month maintenance option.
The car’s sales had fallen on a month-on-month basis since July because of price increases and safety concerns following at least three fires. Tata may export the Nano to countries such as Thailand, Sri Lanka and Bangladesh as early as this year, Chief Executive Officer Carl-Peter Forster said last month.
Net income rose to 24.2 billion rupees ($529 million) in the three months ended Dec. 31, from 6.5 billion rupees a year earlier, the Mumbai-based automaker said in a statement today. That exceeded the 21.5 billion-rupee average of 22 analyst estimates compiled by Bloomberg. Sales gained 22 percent to 315 billion rupees.
Jaguar Land Rover posted a profit after tax of 275 million pounds ($440 million) in the quarter as sales climbed in China where Tata Motors plans to start building the British brands. The revival in luxury vehicle demand has spurred Bayerische Motoren Werke AG and Daimler AG to expand production and target record sales this year.
“The overall picture looks very good for Tata Motors,” said Juergen Maier, a Vienna-based fund manager for Raiffeisen Capital Management who helps manage about $1.3 billion in assets. “There is a huge demand for luxury cars and competitors like BMW and Mercedes Benz are unable to produce enough to meet demand.”
Tata Motors rose 3.7 percent to 1,142.7 rupees at the 3:30 p.m. close of trading in Mumbai, while the benchmark Sensitive Index of the Bombay Stock Exchange gained 1.5 percent.
China, U.S.
Jaguar sales gained almost 50 percent last year in China, while deliveries of Land Rover SUVs more than doubled, Tata Motors said in January. The automaker has said it will build the Land Rover in China and India as economic growth and rising incomes boost demand in the world’s two most-populous nations.
Tata Motors plans to annually invest as much as 1 billion pounds in Jaguar Land Rover’s capital expenditure and product development, Chief Financial Officer C. Ramakrishnan said at a press conference in Mumbai. In India, Tata will spend as much as 30 billion rupees on its factories and products.
Jaguar anticipates sales growth of more than 10 percent in 2011, Adrian Hallmark, brand director, said last month. The luxury marque plans to expand its presence in China with 10 new dealers to take the number of outlets to 50, Hallmark said.
The Evoque, Land Rover’s smallest and cheapest vehicle, which will cost about $40,000 in the U.S. when it hits dealers in the fall, will help the brand increase sales in 2011 from last year’s 181,000 and should lead to a record in 2012 of more than 225,000, according to John Edwards, Land Rover’s brand director.
Trucks, Buses
BMW customers must wait as many as three months for most models and as long as six months for the overhauled X3 sport- utility vehicle. Waiting times at Daimler’s Mercedes-Benz are at close to the pre-recession levels of 2007, with most vehicles ordered now scheduled for delivery at the beginning of the second quarter.
Tata Motors’s sales of trucks and buses in India rose 22 percent to 113,622 units, according to the statement. Sales of passenger vehicles, including the world’s cheapest car Nano, increased 5 percent to 64,501.
The Nano went on sale nationwide in India in January after lengthier warranties and easier financing helped sales rebound in December from a record low. Demand for the car, which costs as little as 137,555 rupees in New Delhi, surged to 5,784 units in December from 509 a month earlier after Tata began television advertisements, added more sales points and introduced a 99 rupee-a-month maintenance option.
The car’s sales had fallen on a month-on-month basis since July because of price increases and safety concerns following at least three fires. Tata may export the Nano to countries such as Thailand, Sri Lanka and Bangladesh as early as this year, Chief Executive Officer Carl-Peter Forster said last month.
India and Pakistan to restart peace talks
India and Pakistan have agreed to resume a broad-ranging peace process suspended after the 2008 Mumbai terror attacks mounted by Pakistan-based militant group Lashkar e-Taiba, which left 166 people dead.
The US has been pushing the nuclear-armed neighbours hard for more than a year to resume the talks. It hopes eased tensions along their border would free Pakistan to devote more resources to battling the Taliban – crucial for Washington’s strategy to stabilise Afghanistan.
New Delhi and Islamabad released simultaneous statements on Thursday saying they would “resume dialogue on all issues” including terrorism, the divided Muslim-majority province of Kashmir, peace and security, water disputes, economic and humanitarian issues and promoting cultural exchange.
Pakistan’s foreign minister will visit India before July to review the progress of the discussions.
The agreement is a significant softening of India’s position towards Islamabad compared with the aftermath of the Mumbai attacks, when New Delhi insisted there could be no talks on outstanding issues until Pakistan brought the perpetrators of the attack – including the planners and trainers – to justice.
“This is a very pragmatic decision, a very well thought out decision,” Nirupama Rao, India’s foreign secretary, told an Indian television channel after the announcement. “India and Pakistan cannot afford to turn their backs to each other.”
A Pakistan foreign ministry official said: “Resumption of a broad peace process will give an impetus to normalised relations. The world doesn’t want two nuclear armed neighbours of the size of India and Pakistan to remain enemies.”
Uday Bhaskar, a retired commodore and former director of India’s Institute for Defence Studies and Analysis, said New Delhi’s decision reflected its concern about rising instability in Pakistan, which is increasingly being hit by terror attacks on its own soil.
“If my neighbour is going through this kind of internal deterioration in terms of its security, I think it’s very prudent I have contact with whoever is minding the store in Islamabad,” he said.
Hindu-majority India and Muslim-majority Pakistan have fought three wars and come to the brink of a fourth since independence from Britain in 1947 and the partition of the subcontinent.
From 2002 until 2006 the two countries engaged in intensive talks that led to the broad outlines of a potential settlement on the most bitterly contentious issue: the future of the divided province of Kashmir, which both sides claim as their own.
However, the talks petered out after Pervez Musharraf, Pakistan’s then president, was engulfed by domestic political turmoil that finally led to his ousting, and were formally cut off after the Mumbai attacks.
However, Brahama Chellaney, a professor of international studies at the New Delhi-based Centre for Policy Research, expressed scepticism that talks could now lead to any substantive result, given the weakness of Pakistan’s government vis-à-vis its powerful military and the tone of public opinion in India.
“The restart of the process in my view does not amount to much,” he said. “The challenge is that the two sides are not symmetrical. You have one side, which doesn’t run the foreign policy, and the other side, looking behind its shoulder at public opinion.”
In Pakistan, analysts warned, fresh discussions to resolve Indo-Pakistani disputes would offer militants an incentive to disrupt the process by launching another attack.
“India and Pakistan will have to show the maturity to stay on course, especially if there is another militancy-related big incident. This time there should be no break irrespective of whatever comes next,” said Mehmood Durrani, a retired major general and former national security adviser to Pakistan’s prime minister.
“While this announcement is a good step, India and Pakistan unfortunately have a history of having taken one step forward, two steps backward. We have to break away from that pattern.”
The US has been pushing the nuclear-armed neighbours hard for more than a year to resume the talks. It hopes eased tensions along their border would free Pakistan to devote more resources to battling the Taliban – crucial for Washington’s strategy to stabilise Afghanistan.
New Delhi and Islamabad released simultaneous statements on Thursday saying they would “resume dialogue on all issues” including terrorism, the divided Muslim-majority province of Kashmir, peace and security, water disputes, economic and humanitarian issues and promoting cultural exchange.
Pakistan’s foreign minister will visit India before July to review the progress of the discussions.
The agreement is a significant softening of India’s position towards Islamabad compared with the aftermath of the Mumbai attacks, when New Delhi insisted there could be no talks on outstanding issues until Pakistan brought the perpetrators of the attack – including the planners and trainers – to justice.
“This is a very pragmatic decision, a very well thought out decision,” Nirupama Rao, India’s foreign secretary, told an Indian television channel after the announcement. “India and Pakistan cannot afford to turn their backs to each other.”
A Pakistan foreign ministry official said: “Resumption of a broad peace process will give an impetus to normalised relations. The world doesn’t want two nuclear armed neighbours of the size of India and Pakistan to remain enemies.”
Uday Bhaskar, a retired commodore and former director of India’s Institute for Defence Studies and Analysis, said New Delhi’s decision reflected its concern about rising instability in Pakistan, which is increasingly being hit by terror attacks on its own soil.
“If my neighbour is going through this kind of internal deterioration in terms of its security, I think it’s very prudent I have contact with whoever is minding the store in Islamabad,” he said.
Hindu-majority India and Muslim-majority Pakistan have fought three wars and come to the brink of a fourth since independence from Britain in 1947 and the partition of the subcontinent.
From 2002 until 2006 the two countries engaged in intensive talks that led to the broad outlines of a potential settlement on the most bitterly contentious issue: the future of the divided province of Kashmir, which both sides claim as their own.
However, the talks petered out after Pervez Musharraf, Pakistan’s then president, was engulfed by domestic political turmoil that finally led to his ousting, and were formally cut off after the Mumbai attacks.
However, Brahama Chellaney, a professor of international studies at the New Delhi-based Centre for Policy Research, expressed scepticism that talks could now lead to any substantive result, given the weakness of Pakistan’s government vis-à-vis its powerful military and the tone of public opinion in India.
“The restart of the process in my view does not amount to much,” he said. “The challenge is that the two sides are not symmetrical. You have one side, which doesn’t run the foreign policy, and the other side, looking behind its shoulder at public opinion.”
In Pakistan, analysts warned, fresh discussions to resolve Indo-Pakistani disputes would offer militants an incentive to disrupt the process by launching another attack.
“India and Pakistan will have to show the maturity to stay on course, especially if there is another militancy-related big incident. This time there should be no break irrespective of whatever comes next,” said Mehmood Durrani, a retired major general and former national security adviser to Pakistan’s prime minister.
“While this announcement is a good step, India and Pakistan unfortunately have a history of having taken one step forward, two steps backward. We have to break away from that pattern.”
Eurofighter woos India with partner offer
The Eurofighter consortium is prepared to offer India a manufacturing role, as the international race intensifies to supply 126 jet fighters worth $11bn to New Delhi.
In an interview with the Financial Times, Bernhard Gerwert, chairman of Eurofighter’s supervisory board, said so-called work-share agreements – which determine what parts of the aircraft are made in the UK, Germany, Spain and Italy and support valuable high-tech jobs – would have to be adjusted if India bought the Typhoon multirole combat aircraft.
Speaking at the Bangalore air show on Thursday, Mr Gerwert said the manufacture of the aircraft would have to be “rebalanced” to meet the requirements of the world’s largest democracy, should it choose to become part of what he called “the Eurofighter family”.
“All of the partners will have to reduce content in Europe and shift to India,” he said.
In contrast to the terms surrounding the purchases of the Typhoon by Austria and Saudi Arabia, Mr Gerwert envisaged India becoming a “new industrial partner” to join the 400 European companies that make the Eurofighter.
Indian companies would become “significant manufacturing and engineering” partners contributing to the future development of the aircraft alongside Finmeccanica, BAE Systems and EADS.
Mr Gerwert forecast that as many as 20,000 jobs would be created in India.
The emphasis on industrial partnership reflects the importance of the deal to the future of the Typhoon after European government spending cuts.
The consortium is increasing efforts to persuade New Delhi to opt for Europe’s largest military collaboration as the hard-fought competition reaches a climax.
Eurofighter faces stiff competition. Saab’s JAS-39 Gripen, Boeing’s F/A-18 Super Hornet, Dassault’s Rafale, Lockheed’s F-16 Super Viper and Russia’s MiG-35 are also vying for one of the world’s biggest current military contracts by offering their own offset, transfer of technology and price incentives.
P.V. Naik, head of the Indian Air Force, said he expected a decision on the aircraft to be made by September.
In an interview with the Financial Times, Bernhard Gerwert, chairman of Eurofighter’s supervisory board, said so-called work-share agreements – which determine what parts of the aircraft are made in the UK, Germany, Spain and Italy and support valuable high-tech jobs – would have to be adjusted if India bought the Typhoon multirole combat aircraft.
Speaking at the Bangalore air show on Thursday, Mr Gerwert said the manufacture of the aircraft would have to be “rebalanced” to meet the requirements of the world’s largest democracy, should it choose to become part of what he called “the Eurofighter family”.
“All of the partners will have to reduce content in Europe and shift to India,” he said.
In contrast to the terms surrounding the purchases of the Typhoon by Austria and Saudi Arabia, Mr Gerwert envisaged India becoming a “new industrial partner” to join the 400 European companies that make the Eurofighter.
Indian companies would become “significant manufacturing and engineering” partners contributing to the future development of the aircraft alongside Finmeccanica, BAE Systems and EADS.
Mr Gerwert forecast that as many as 20,000 jobs would be created in India.
The emphasis on industrial partnership reflects the importance of the deal to the future of the Typhoon after European government spending cuts.
The consortium is increasing efforts to persuade New Delhi to opt for Europe’s largest military collaboration as the hard-fought competition reaches a climax.
Eurofighter faces stiff competition. Saab’s JAS-39 Gripen, Boeing’s F/A-18 Super Hornet, Dassault’s Rafale, Lockheed’s F-16 Super Viper and Russia’s MiG-35 are also vying for one of the world’s biggest current military contracts by offering their own offset, transfer of technology and price incentives.
P.V. Naik, head of the Indian Air Force, said he expected a decision on the aircraft to be made by September.
Saturday, February 5, 2011
In a Graying Population, Business Opportunity
CAMBRIDGE, Mass.
IT’S not easy being gray.
For the first time ever, getting out of a car is no picnic. My back is hunched. And I’m holding on to handrails as I lurch upstairs.
I’m 45. But I feel decades older because I’m wearing an Age Gain Now Empathy System, developed by researchers at the Massachusetts Institute of Technology. Agnes, they call it.
At first glance, it may look like a mere souped-up jumpsuit. A helmet, attached by cords to a pelvic harness, cramps my neck and spine. Yellow-paned goggles muddy my vision. Plastic bands, running from the harness to each arm, clip my wingspan. Compression knee bands discourage bending. Plastic shoes, with uneven Styrofoam pads for soles, throw off my center of gravity. Layers of surgical gloves make me all thumbs.
The age-empathy suit comes from the M.I.T. AgeLab, where researchers designed Agnes to help product designers and marketers better understand older adults and create innovative products for them. Many industries have traditionally shied away from openly marketing to people 65 and older, viewing them as an unfashionable demographic group that might doom their product with young and hip spenders. But now that Americans are living longer and more actively, a number of companies are recognizing the staying power of the mature market.
“Aging is a multidisciplinary phenomenon, and it requires new tools to look at,” Joseph F. Coughlin, director of AgeLab, tells me, encumbered and fatigued after trying to conduct a round of interviews while wearing Agnes. Viewed through yellow goggles, the bright colors of Professor Coughlin’s bow tie appear dim. “Agnes is one of those tools,” he says.
AgeLab, like a handful of other research centers at universities and companies around the country, develops technologies to help older adults maintain their health, independence and quality of life. Companies come here to understand their target audience or to have their products, policies and services studied.
Often, visitors learn hard truths at AgeLab: many older adults don’t like products, like big-button phones, that telegraph agedness. “The reality is such that you can’t build an old man’s product, because a young man won’t buy it and an old man won’t buy it,” Professor Coughlin says.
The idea is to help companies design and sell age-friendly products — with customizable font size, say, or sound speed — much the way they did with environmentally friendly products. That means offering enticing features and packaging to appeal to a certain demographic without alienating other consumer groups. Baked potato chips are just one example of products that appeal to everybody but skew toward older people. Toothpastes that promise whitening or gum health are another.
Researchers at AgeLab are studying the stress levels of older adults who operate a hands-free parallel-parking system developed by Ford Motor. Although this ultrasonic-assisted system may make backing up easier for older adults who can’t turn their necks to the same degree they once did, the car’s features — like blind-spot detection and a voice-activated audio system — are intended to appeal to all drivers who enjoy smart technology.
“With any luck, if I am successful,” Professor Coughlin says, “retailers won’t know they are putting things on the shelves for older adults.”
THE first of about 76 million baby boomers in the United States turned 65 in January. They are looking forward to a life expectancy that is higher than that of any previous generation.
The number of people 65 and older is expected to more than double worldwide, to about 1.5 billion by 2050 from 523 million last year, according to estimates from the United Nations. That means people 65 and over will soon outnumber children under 5 for the first time ever. As a consequence, many people may have to defer their retirement — or never entirely retire — in order to maintain sustainable incomes.
Many economists view such an exploding population of seventy- and eighty-somethings not as an asset, but as a looming budget crisis. After all, by one estimate, treating dementia worldwide already costs more than $600 billion annually.
“No other force is likely to shape the future of national economic health, public finances and policy making,” analysts at Standard & Poor’s wrote in a recent report, “as the irreversible rate at which the world’s population is aging.”
IT’S not easy being gray.
For the first time ever, getting out of a car is no picnic. My back is hunched. And I’m holding on to handrails as I lurch upstairs.
I’m 45. But I feel decades older because I’m wearing an Age Gain Now Empathy System, developed by researchers at the Massachusetts Institute of Technology. Agnes, they call it.
At first glance, it may look like a mere souped-up jumpsuit. A helmet, attached by cords to a pelvic harness, cramps my neck and spine. Yellow-paned goggles muddy my vision. Plastic bands, running from the harness to each arm, clip my wingspan. Compression knee bands discourage bending. Plastic shoes, with uneven Styrofoam pads for soles, throw off my center of gravity. Layers of surgical gloves make me all thumbs.
The age-empathy suit comes from the M.I.T. AgeLab, where researchers designed Agnes to help product designers and marketers better understand older adults and create innovative products for them. Many industries have traditionally shied away from openly marketing to people 65 and older, viewing them as an unfashionable demographic group that might doom their product with young and hip spenders. But now that Americans are living longer and more actively, a number of companies are recognizing the staying power of the mature market.
“Aging is a multidisciplinary phenomenon, and it requires new tools to look at,” Joseph F. Coughlin, director of AgeLab, tells me, encumbered and fatigued after trying to conduct a round of interviews while wearing Agnes. Viewed through yellow goggles, the bright colors of Professor Coughlin’s bow tie appear dim. “Agnes is one of those tools,” he says.
AgeLab, like a handful of other research centers at universities and companies around the country, develops technologies to help older adults maintain their health, independence and quality of life. Companies come here to understand their target audience or to have their products, policies and services studied.
Often, visitors learn hard truths at AgeLab: many older adults don’t like products, like big-button phones, that telegraph agedness. “The reality is such that you can’t build an old man’s product, because a young man won’t buy it and an old man won’t buy it,” Professor Coughlin says.
The idea is to help companies design and sell age-friendly products — with customizable font size, say, or sound speed — much the way they did with environmentally friendly products. That means offering enticing features and packaging to appeal to a certain demographic without alienating other consumer groups. Baked potato chips are just one example of products that appeal to everybody but skew toward older people. Toothpastes that promise whitening or gum health are another.
Researchers at AgeLab are studying the stress levels of older adults who operate a hands-free parallel-parking system developed by Ford Motor. Although this ultrasonic-assisted system may make backing up easier for older adults who can’t turn their necks to the same degree they once did, the car’s features — like blind-spot detection and a voice-activated audio system — are intended to appeal to all drivers who enjoy smart technology.
“With any luck, if I am successful,” Professor Coughlin says, “retailers won’t know they are putting things on the shelves for older adults.”
THE first of about 76 million baby boomers in the United States turned 65 in January. They are looking forward to a life expectancy that is higher than that of any previous generation.
The number of people 65 and older is expected to more than double worldwide, to about 1.5 billion by 2050 from 523 million last year, according to estimates from the United Nations. That means people 65 and over will soon outnumber children under 5 for the first time ever. As a consequence, many people may have to defer their retirement — or never entirely retire — in order to maintain sustainable incomes.
Many economists view such an exploding population of seventy- and eighty-somethings not as an asset, but as a looming budget crisis. After all, by one estimate, treating dementia worldwide already costs more than $600 billion annually.
“No other force is likely to shape the future of national economic health, public finances and policy making,” analysts at Standard & Poor’s wrote in a recent report, “as the irreversible rate at which the world’s population is aging.”
Treasury 10-Year Yield Reaches a Nine-Month High as Recovery Builds Steam
Treasuries tumbled, pushing 10-year yields to the highest since May, as an unexpected drop in the jobless rate and data showing growth by factories and service industries fueled bets the economic recovery is gaining steam.
Thirty-year yields had the biggest weekly increase since October as manufacturing also accelerated in Europe and China, making higher-yielding assets more attractive. The gap between U.S. 2- and 10-year yields reached the widest in almost a year as U.S. employers added jobs for a fourth month. The Treasury will auction $72 billion in notes and bonds next week.
“In context with the other data we’ve seen, the employment number is consistent with the idea of recovery -- net net, it’s taken as a bearish signal,” said Carl Lantz, head of interest- rate strategy in New York at Credit Suisse Group AG, one of 20 primary dealers that trade with the Federal Reserve. “The market probably won’t be able to catch its breath until we get through the auction process. Demand will be fairly strong.”
The benchmark 10-year note yield climbed 31 basis points to 3.63 percent yesterday in New York, from 3.32 percent on Jan. 28, according to BGCantor Market Data. It was the biggest weekly gain since Dec. 10. A basis point is 0.01 percentage point. The yield touched 3.66 percent yesterday, the highest since May 4.
The price of the 2.625 percent security maturing in November 2020 dropped 2 15/32, or $24.69 per $1,000 face amount, to 91 3/4.
Thirty-year bond yields advanced 20 basis points to 4.73 percent, the biggest jump since the five days ended Oct. 15. They touched 4.74 percent yesterday, the highest level since April 15. Two-year yields increased 21 basis points to reach 0.74 percent in the biggest rise since June 5, 2009.
Yield Spread
The yield gap between 2- and 10-year Treasuries widened to as much as 291 basis points, the most since Feb. 23, 2010.
Treasuries fell yesterday as the jobless rate decreased for a second month, Labor Department data showed. A Bloomberg survey had forecast it would rise to 9.5 percent, from 9.4 percent in December. Employers added 36,000 jobs, less than predicted, as storms swept the nation. It was the smallest increase in four months, the data showed.
“The weather distortions are so great that it’s hard to really extract any information about the strength of the labor market,” Gary Pollack, who helps oversee $12 billion as head of fixed-income trading at Deutsche Bank AG’s Private Wealth Management unit in New York, said yesterday.
Growth in Services
The jobs report came a day after data from the Institute for Supply Management showed U.S. service industries, which account for 90 percent of the U.S. economy, grew in January at the fastest pace since 2005. The ISM’s index of non- manufacturing businesses rose to 59.4, from December’s 57.1, the Tempe, Arizona-based group said.
A separate ISM factory index for the U.S. increased last month the most since 2004, the Tempe, Arizona-based group said on Feb. 1. Manufacturing in the 17-nation euro region, the U.K. and China also expanded, other reports that day showed.
Treasuries have lost 1.2 percent this year, according the Bank of America Merrill Lynch Treasury Master index. The Standard & Poor’s 500 Index has gained 4.2 percent.
“The overall tone of economic data has been positive, and the market has been acknowledging that,” said Thomas Simons, a government-debt economist in New York at primary dealer Jefferies Group Inc. “It’s still not a tremendously satisfying pace of recovery, but things are moving right along.”
Not Enough Growth
The Fed is unlikely to raise interest rates for at least 12 months because the U.S. economy isn’t generating enough growth to lower unemployment, Pacific Investment Management Co.’sBill Gross said yesterday in a radio interview on “Bloomberg Surveillance” with Tom Keene.
The central bank would probably like to see the economy adding at least 200,000 jobs a month before considering rate increases, said Newport Beach, California-based Gross, manager of the world’s biggest bond fund. Policy makers have held the benchmark interest rate near zero since December 2008.
Fed Chairman Ben S. Bernanke said in a speech on Feb. 3 in Washington the nation needs to see faster job growth for a sufficient time before policy makers can be assured the economic recovery has taken hold.
The central bank bought $27.8 billion in U.S. debt this week, part of a $600 billion program to spur the economy. While Bernanke said in his speech that growth will pick up this year and the Fed’s purchases of Treasuries are “providing significant support to job creation and the economy,” he gave no indication whether he’ll maintain or adjust monetary stimulus after the asset buying-program ends in June.
The difference between yields on 10-year notes and Treasury Inflation Protected Securities, a gauge of trader expectations for consumer prices over the life of the securities, widened to 2.36 percentage points from a 2010 low of 1.47 in August.
The Treasury will auction $32 billion of 3-year notes, $24 billion of 10-year debt and $16 billion of 30-year bonds next week in daily sales that begin Feb. 8.
Thirty-year yields had the biggest weekly increase since October as manufacturing also accelerated in Europe and China, making higher-yielding assets more attractive. The gap between U.S. 2- and 10-year yields reached the widest in almost a year as U.S. employers added jobs for a fourth month. The Treasury will auction $72 billion in notes and bonds next week.
“In context with the other data we’ve seen, the employment number is consistent with the idea of recovery -- net net, it’s taken as a bearish signal,” said Carl Lantz, head of interest- rate strategy in New York at Credit Suisse Group AG, one of 20 primary dealers that trade with the Federal Reserve. “The market probably won’t be able to catch its breath until we get through the auction process. Demand will be fairly strong.”
The benchmark 10-year note yield climbed 31 basis points to 3.63 percent yesterday in New York, from 3.32 percent on Jan. 28, according to BGCantor Market Data. It was the biggest weekly gain since Dec. 10. A basis point is 0.01 percentage point. The yield touched 3.66 percent yesterday, the highest since May 4.
The price of the 2.625 percent security maturing in November 2020 dropped 2 15/32, or $24.69 per $1,000 face amount, to 91 3/4.
Thirty-year bond yields advanced 20 basis points to 4.73 percent, the biggest jump since the five days ended Oct. 15. They touched 4.74 percent yesterday, the highest level since April 15. Two-year yields increased 21 basis points to reach 0.74 percent in the biggest rise since June 5, 2009.
Yield Spread
The yield gap between 2- and 10-year Treasuries widened to as much as 291 basis points, the most since Feb. 23, 2010.
Treasuries fell yesterday as the jobless rate decreased for a second month, Labor Department data showed. A Bloomberg survey had forecast it would rise to 9.5 percent, from 9.4 percent in December. Employers added 36,000 jobs, less than predicted, as storms swept the nation. It was the smallest increase in four months, the data showed.
“The weather distortions are so great that it’s hard to really extract any information about the strength of the labor market,” Gary Pollack, who helps oversee $12 billion as head of fixed-income trading at Deutsche Bank AG’s Private Wealth Management unit in New York, said yesterday.
Growth in Services
The jobs report came a day after data from the Institute for Supply Management showed U.S. service industries, which account for 90 percent of the U.S. economy, grew in January at the fastest pace since 2005. The ISM’s index of non- manufacturing businesses rose to 59.4, from December’s 57.1, the Tempe, Arizona-based group said.
A separate ISM factory index for the U.S. increased last month the most since 2004, the Tempe, Arizona-based group said on Feb. 1. Manufacturing in the 17-nation euro region, the U.K. and China also expanded, other reports that day showed.
Treasuries have lost 1.2 percent this year, according the Bank of America Merrill Lynch Treasury Master index. The Standard & Poor’s 500 Index has gained 4.2 percent.
“The overall tone of economic data has been positive, and the market has been acknowledging that,” said Thomas Simons, a government-debt economist in New York at primary dealer Jefferies Group Inc. “It’s still not a tremendously satisfying pace of recovery, but things are moving right along.”
Not Enough Growth
The Fed is unlikely to raise interest rates for at least 12 months because the U.S. economy isn’t generating enough growth to lower unemployment, Pacific Investment Management Co.’sBill Gross said yesterday in a radio interview on “Bloomberg Surveillance” with Tom Keene.
The central bank would probably like to see the economy adding at least 200,000 jobs a month before considering rate increases, said Newport Beach, California-based Gross, manager of the world’s biggest bond fund. Policy makers have held the benchmark interest rate near zero since December 2008.
Fed Chairman Ben S. Bernanke said in a speech on Feb. 3 in Washington the nation needs to see faster job growth for a sufficient time before policy makers can be assured the economic recovery has taken hold.
The central bank bought $27.8 billion in U.S. debt this week, part of a $600 billion program to spur the economy. While Bernanke said in his speech that growth will pick up this year and the Fed’s purchases of Treasuries are “providing significant support to job creation and the economy,” he gave no indication whether he’ll maintain or adjust monetary stimulus after the asset buying-program ends in June.
The difference between yields on 10-year notes and Treasury Inflation Protected Securities, a gauge of trader expectations for consumer prices over the life of the securities, widened to 2.36 percentage points from a 2010 low of 1.47 in August.
The Treasury will auction $32 billion of 3-year notes, $24 billion of 10-year debt and $16 billion of 30-year bonds next week in daily sales that begin Feb. 8.
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