Mumbai, June 20
India's diamond exports crashed by more than 50 per cent in May this year compared to the year-ago period sparking off panic in the diamond cutting and polishing industry, which is one of the biggest employers in Western India.

According to data released by the Gems and Jewellery Export Promotion Council (GJEPC), exports of cut and polished diamonds fell from 51.22 lakh carats in May 2011 to 25.74 lakh carats in the corresponding period this year. In value terms, the fall in exports was 44 per cent - from $2,240 million to $1,245 million in the same period.

The decline in May was steeper than in April this year, which saw exports decline 35 per cent in terms of value as compared to April 2011.

Diamond merchants are blaming the fall in exports on the Indian government's decision to impose two per cent import duty on polished diamonds from January 2012 as a measure to conserve foreign exchange.

The data indicates that import of cut and polished diamonds fell 88 per cent as a result. "Though margins were lower, cut and polished diamonds were imported for the purpose of value addition," says Amanbhai Shah, who owns a diamond polishing unit in suburban Mumbai.

However, even the diamond cutting and polishing business at home has also been affected, according to the data. The Indian diamond industry imports rough stones which are cut and polished within the country before they are exported. However, even this part of the business took a major hit in May this year. According to the GJEPC data, imports of rough diamonds fell 20 per cent over May 2011.

Those in the diamond trade say the sharp fall in the Indian rupee has made it expensive for them to import rough stones. Often importers of rough stones trade these with other businessmen who specialise in cutting and polishing them who in turn trade their finished goods with the actual exporters. Since it takes several months for dues to be settled across the chain, traders are wary of taking positions in stock lest they be affected by volatility in the exchange rates, analysts said.

New Delhi, June 20
Global agency Fitch today cut credit rating outlook to negative from stable of 11 financial entities, including SBI, ICICI Bank, PNB and Axis Bank.

The action follows the revision earlier this week of India's outlook to negative.

"The outlook revision of the financial institutions reflects their close linkages with the sovereign by virtue of their high exposure to domestic counterparts and holdings of domestic sovereign debt," Fitch said in a statement.

The list of downgraded entities include six government banks (including an international banking subsidiary of a government bank), two private banks. These include Bank of Baroda, Bank of Baroda (New Zealand) Ltd (BOBNZ), Canara Bank, and IDBI Bank.

Besides two wholly owned government institutions, Export-Import Bank of India and Housing and Urban Development Corporation Ltd have also been similarly downgraded. Besides, the outlook of IDFC Ltd and Indian Railway Finance Corporation Ltd outlook has also become negative.

However, Fitch said the banks continue to have reasonable customer deposit base, domestic franchises and adequate capital.

The non-banking financial entities, meanwhile, lack the funding advantage, which puts them more at risk during times of increased market volatility, it said.

Fitch also said sovereign support for both the large banks and 'policy-type institutions' is expected to remain strong, with the former benefiting from their large share of system assets and deposits and the latter from their association with the government.

According to analysts, the cut in the rating outlook may raise the cost of overseas borrowings for such institutions.

Earlier this week, Fitch lowered India's credit rating outlook to negative, citing corruption, inadequate reforms, high inflation and slow growth.

India faces an "awkward combination" of slow growth and elevated inflation, Fitch had said, adding that the country "also faces structural challenges surrounding its investment climate in the form of corruption and inadequate economic reforms".

Standard and Poor's (S&P) had in April lowered India's rating outlook to negative from stable. It also warned on June 11 that the country may be the first in the BRIC grouping to falter and its sovereign credit rating may slip below investment grade. — PTI 

New Delhi, June 20
With smartphones becoming the order of the day around the world, estimates say their accessory market is set to touch the $20 billion mark this year.

Reports said the smartphones accessory will account for more than half of the $36 billion that all aftermarket handset accessories will produce.

Market watchers point out that by 2017, smartphone accessories market will grow to $38 billion in revenues, while feature phone accessory revenues could decline to $12 billion.

Experts say it is the increasing penetration of smartphones which is driving the shift in accessory design towards smart accessories that are driving higher levels of consumer interaction, product value and brand recognition.

Reports say the total smartphone shipment volumes reached 491.4 million units in 2011, a whopping increase over 304.7 million units in 2010.

However, in percentage basis, the growth was lower in 2011 (61.3 per cent) as compared to 2010 (75.7 per cent).

A recent IDC report also said by December 2011, one out of every three mobile phones shipped worldwide was a smartphone.

Among the manufacturers, while Apple regained its market leader position by launching iPhone 4S worldwide, it was Samsung which broke the 30 million-unit mark for the first time and also posted the largest year-over-year increase.

According to the reports, the smartphone market in India climbed by 17 per cent last year. This has also been the reason for the increased usage of mobile internet.

Smartphones are always connected to the Internet and have better applications, which has also driven the applications sales, development and the increase in social media activities in the country.

While a majority of the cellphones in the country are feature phones due to their low prices, the prices of smartphones are also taking a downward curve since manufacturers are now bundling low cost-medium specification devices with the Android platform.

The handset industry in India comprises 226 million handsets and the number is set to grow further. Device sales are predicted to reach 231 million units in 2012 with a growth of 8.5 per cent over last year’s figures (213 million).

Market watchers say while feature phone consumers will spend an average of $28.17 on accessories per device, the smartphone owners will spend $56.18 on accessories per device.

The difference in spending is driven by a combination of consumers spending more per accessory and purchasing more accessories for smartphones as compared to feature phone owners.

While feature phone accessories tend to be basic commodity-type products, smartphone-focused accessories are increasingly looking to leverage on device applications and communication protocols that can increase the design complexity and allow the accessories to become service delivery platforms.

New York, June 20
Social networking giant Facebook Inc has acquired Israeli facial recognition firm Face.com for an undisclosed amount in a bid to strengthen its photo sharing platform.

Face.com's software is used for facial recognition on photos loaded on its websites and through mobile applications.

"Facebook has acquired Face.com," Face.com Founder Gil Hirsh has said on his blog.

The announcement comes about two months after Facebook shelled out $1 billion for photo-sharing service firm Instagram.

Although financial details of the deals were not disclosed, media reports have pegged the transaction in the range of $60 million to $100 million.

Announcing the deal, Hirsh said, "Facebook is a part of your life every single day. We keep up with our friends and family, share interesting (or mundane) experiences from our daily lives, and perhaps most importantly for us, we share a lot of photos." "...By working with Facebook directly, and joining their team, we'll have more opportunities to build amazing products that will be employed by consumers - that's all we've ever wanted to do," he added.

Face.com's app scan billions of photos monthly, and have helped tag hundreds of millions of faces. It helps people to tag their own photos quickly and easily, and discover photos of themselves and their friends that they never knew existed.

The two recent acquisitions by Facebook, which has over 900 million users across the world, suggest that the social networking firm is taking huge interest in strengthening its photo-sharing platform. — PTI 

New Delhi, June 20
Hit by a demand slump, Toyota Kirloskar Motor has stopped production of its all petrol cars, while others like Fiat are considering shutting down plants for a few days next month. While Tata Motors will stop production of commercial vehicles at Pune for three days this week, Maruti Suzuki India will be having its week-long annual maintenance shut down from next week.

"We are having some amount of inventory for our petrol cars and it has gone up to over 30 days. To control the stock from piling up further, we have stopped production of our entire range of petrol cars from June 16," Toyota Kirloskar Motor (TKM) Deputy Managing Director (Commercial) Shekar Viswanathan said.

He, however, did not share the company's plans on how long the petrol car production will continue to be withheld.

TKM rolls out petrol variants of its small car Liva, sedans Etios and Corolla Altis. It also produces a petrol variant of Innova on-demand.

Viswanathan said the company's sales of diesel vehicles are steady, but the waiting periods are coming down.

According to Society of Indian Automobile Manufacturers (SIAM) data, TKM had rolled out over two-fold more passenger cars in May that stood at 8,511 units.

Expressing similar sentiments, Fiat India Automobiles Ltd (FIAL) said its petrol models are not selling well and it is monitoring the inventory situation at present.

"Depending upon the demand and inventory situation, we may shut down our plant for 2-3 days next month," FIAL President and CEO Rajeev Kapoor said.

The sluggish demand has not only impacted passenger car makers, but also hitting the commercial vehicle manufacturers. "Given the market scenario, we need to align our production. We will have a block closure from June 22 to June 24 at our plant in Pune," a Tata Motors spokesperson said. — PTI

New Delhi, June 20
The Tata group is developing an electric car that is expected to be priced below $20,000 (over Rs 10 lakh) in partnership with France’s Dassault Systemes. Tata Technologies, the group’s engineering services outsourcing and product development IT services arm, has undertaken a study to demonstrate the feasibility of developing an electric vehicle at an attractive price.

Tata Technologies used the Dassault Systemes 3DExperience platform based on Version 6 technology for the ground-breaking of small urban electric vehicle study - the eMO (for electric MObility).

“We needed a highly regarded partner for this project, as we were relying on it to showcase our multi-dimensional approach to vehicle engineering and development,” said Kevin Fisher, president, Tata Technologies Vehicle Programs and Development (VPD) Group.

“We have a deep history with Dassault Systèmes and are confident that Catia and Enovia V6 applications would help us leverage the talents of a global engineering team to meet numerous design and cost constraints, as well as create the targeted user experience, including a final vehicle price tag of under $20,000,” he added.

Reports said a significant challenge in the development process was the requirement to fit all the required vehicle systems into a small footprint while maintaining spacious seating for four adults. To achieve this, Tata Technologies utilised the powerful capabilities within Catia and Enovia applications to quickly develop various studies, allowing global collaboration to rapidly evaluate and converge on optimal solutions.