New Delhi, June 26
The Coca-Cola Co announced a further $3 billion in investment in India over the next eight years on Tuesday as the world's biggest soft drinks maker seeks to expand in a country where its flagship brand trails rival Pepsi.

The investment by Coca-Cola and its bottlers, on top of a $2 billion five-year plan announced in November, will hearten Indian officials who are trying to restore investor confidence after growth fell to a nine-year low in the first quarter.

The beverages giant said it, along with its partners, will invest $5 billion (about Rs 28,000 crore) in India by 2020 on various activities, including setting up of new bottling plants.

"Coca-Cola will invest $5 billion in India between now and 2020. This investment in India is a part of $30 billion globally planned by the company. India aims to be among top five countries in Coca Cola's markets. It’s presently at no. 7," Coca-Cola chairman & CEO Muhtar Kent told reporters here.

The investment, along with its partners, will go on increasing bottling lines, adding new bottling plants, enhancing backend chain infrastructure as well as marketing by the company, he added. "We’ve increased the investment here because we think, there's potential here to stay ahead of the curve," Kent said.

Coca-Cola's announcement comes days after Swedish retailer IKEA, the world's largest furniture maker, said it would invest 1.5 billion euros ($1.9 billion) to open 25 stores in Asia's third-largest economy over 15 to 20 years.

Coca-Cola and its bottlers have spent some $2 billion since the company returned to India in 1993 after pulling out in 1977 when a government ruling would have forced it to share its secret formula.

Coca-Cola lags rival PepsiCo's brand Pepsi in India's $10 billion beverages market and it has been trying to aggressively raise its market share — cutting some prices in the summer season for the first time since 2003.

"The brand that has been doing well for Coca-Cola is Thums Up," said an analyst with a foreign brokerage, who did not wish to be named, referring to a local cola brand owned by the Atlanta-based company. — Reuters, PTI

New Delhi, June 26
Looking to take advantage of soaring petrol prices and the customer preference for smaller and more fuel efficient cars, India’s largest automaker, Maruti Suzuki India, plans to replace its existing 800cc car with a new model with different looks by the end of this year.

The new 800cc model is likely to be more fuel efficient, but also more expensive than its existing best selling model, the Alto.

According to sources close to the development, the company will start commercial production of the car at its Gurgaon facility from July or August and will launch it by the Diwali festival on November 13.

"Although this will be a 800cc car, technologically it will be more advanced than the existing two 800cc models. It'll be more fuel efficient, and hence will also be more expensive than M800 and Alto," a source said.

It is understood Maruti Suzuki has upgraded the existing engine and platform of the Alto instead of a complete overhaul in order to reduce development costs.

According to the company's official website, the prices of the M800 varies between Rs 2.05 lakh and Rs 2.30 lakh, while that of the Alto stands at Rs 2.40-3.43 lakh. A 1,000cc variant of the Alto is priced at Rs 3.14-3.31 lakh. All the prices are for ex-showroom in Delhi.

When contacted, a Maruti Suzuki India spokesperson declined to comment "on any future model development".

Sources said the company has already done the test productions at various stages of development and is now gearing up to roll out the vehicle commercially.

Tokyo, June 26
Nomura has cut its GDP forecast for India to 5.8% from 6.7% for the fiscal year ending March. 2013, and to 6.6% in 2013-14 vs previous 6.9%.

Nomura said the country's monetary and fiscal policy is "in a deadlock", adding that government policies remain inflationary, reducing scope for the RBI to cut interest rates, and in turn worsening the fiscal deficit.

"The longer the economy stays in the current deadlock, the bigger the policy shock that will be required to get out," Nomura said in a report on Monday.

Nomura also raised the wholesale price index inflation forecast for 2012-13 to 7.6% from prior 7.1% due to higher food prices and rupee depreciation. — Reuters

Mumbai, June 26
Global private equity funds, which poured tens of billions of dollars into India investments when the economy and currency were flying high a few years ago, may be stuck with those holdings much longer than planned as the rupee's plunge plays havoc with their exit options.

Returns on funds raised in dollars have shrunk with the currency's tumble to record lows, compounding the effects of a weak stock market and slowing growth, and threatening to further dampen private equity interest in Asia's third-largest economy.

"This has simply shaved off nearly a year's implied return," said Srinivas Chidambaram, managing director at Jacob Ballas Capital India, of the rupee's steep slide since August.

"The depreciation is clearly a matter of concern in the medium term as it impacts exit realisations and existing portfolios," he said. His company, an offshore fund backed by New York Life Insurance Co, manages $600 million in India.

The rupee is Asia's worst-performing currency over the past 12 months, shedding more than one-fifth of its value to hit a record low last Friday at 57.32 to the dollar. In November 2007, at the height of a boom in private equity investment, it marked a decade high of 39.03.

India has proven a tough market for global private equity companies once captivated by its growth potential.

Fierce competition for deals, few willing sellers, a regulatory ban on leverage and a fickle market for exits through IPOs meant many private equity firms have had to content themselves with minority stakes, often in listed companies. — Reuters

New Delhi, June 26
The spurious goods market continues to thrive in India. Even as the world celebrated Anti-Counterfeiting Day earlier last week, it has emerged that fighting fakes has become one of the biggest challenges faced by industry.

According to figures cited by FICCI-Cascade, spurious goods are available in pharmaceutical drugs, fast moving consumer goods, recorded, computer and software goods, soft drinks, cosmetics and toiletries and is rampant in the automobile industry.

FICCI-Cascade (Committee on Anti-Smuggling & Counterfeit Activities Destroying the Economy) has been set up with the participation of leading industries from all sectors of the economy.

Reports suggest the fake automotive parts market in India is estimated at between Rs 2,500-3,500 crore, which is approx. 35 per cent of the total auto parts sold in the country.

A recent study conducted by Business Action to Stop Counterfeiting and Piracy indicates the global value of counterfeit and pirated goods, currently estimated at US $650 billion, is likely to more than double by 2015.

According to the Havoscope Global Black Market Index, the market value of counterfeit and pirated auto parts in the country stands at a staggering $1.15 billion.

Speak about the menace to any vehicle or auto parts maker or an authorized spare parts dealer and they point out the loss of revenues they were incurring as result and also the lack of governmental resolve to eradicate the hugely entrenched problem.

While manufacturers like Maruti Suzuki India have actually been going on air stressing on the need for use of genuine spare parts in their vehicles, other manufacturers have also been carrying out awareness drives to drive home the need for using genuine company spare parts rather than picking up spurious parts from the market at much lesser cost.

Experts point out that spurious parts are available in the same packaging as the genuine ones, but come at a much cheaper price — one of the reasons for their huge sales.

According to automakers, the spurious parts industry is spread all over India, with well networked agents in the metros and ‘B’ towns. There is a large network of unorganized distribution channels that all contribute to the growth of this parasitic industry.

The difference in the price of the original and counterfeit part is the main reason for more market turnover. The most important step to stop the growth of the spurious industry is to make law enforcing agencies aware of the situation and ensuring coordinated action as the government also loses a lot of revenue s the spurious parts makers do not pay any taxes.