Bangalore, August 1
Shrinking export orders and sluggish output dragged Indian manufacturing growth in July down to its weakest pace since last November, a business survey showed on Wednesday.

The HSBC manufacturing Purchasing Managers' Index (PMI), which gauges business activity at India's factories but not utilities, fell to 52.9 in July, from 55.0 in June — its biggest one-month drop since September last year.

Still, the index has remained above the 50 mark that divides growth and contraction for more than three years.

With clear signs the global economy is slowing, export orders fell slightly for the first time in nine months.

EXPORTS SLIDE: India's exports fell 5.45% to $25.1 billion in June, while imports fell 13.46% to $35.4 billion, leaving a trade deficit of $10.3 billion, government data showed on Wednesday.

After recording strong growth for much of last year, India's overseas sales have tanked, with officials blaming weak demand in the United States and Europe for the fall.

Exports between April and June fell 1.7%, totaling $75.2 billion. Oil imports for June fell 4.4% to $12.7 billion.

Weak exports and widening trade and current account deficits have added to economic gloom, as growth has slowed to its worst pace in nine years. Power outages across India over the last month also crimped production while factories were without electricity.

"Manufacturing activity grew at a slower clip in July on the back of power outages and a moderation in new order inflows, with the weak global economic conditions dragging down export orders," said Leif Eskesen, economist at HSBC, sponsor of the survey. — Reuters

New Delhi, August 1
The row between Telenor and its Indian joint venture partner Unitech is set to worsen after the Norwegian telecom major gained approval from the majority of its board members to auction off its business interests including the assets in India.

Telenor, which has been blaming Unitech of fraud and forgery, this morning came out with an auction notice in a prominent financial daily with an announcement that it had got the approval of its majority of the board members, which its Indian partner is opposing.

The joint venture, Unitech Wireless (Tamil Nadu) Pvt, has invited interests from potential bidders by August 6, its managing director Sigve Brekke said in the auction notice.

Telenor is willing to participate in the auction through an Indian affiliate company, the notice said, adding in case there is just one bidder it would have the right to fix the bid price at a "fair market value" of Rs 41.9 billion.

Telenor, which wants to continue with its Indian operations, wants to scrap the joint venture and migrate its business to a new company to seek fresh operating licences in the forthcoming 2G spectrum auction ordered by the Supreme Court as it in February cancelled the 122 telecom licences issued on a first-come-first serve basis by former telecom minister A. Raja in 2008.

While opposing Telenor's move, Unitech, which owns just under one-third of the joint venture, has said the Norwegian firm cannot unilaterally scrap the joint venture agreement and that it had veto rights to block any asset transfer. Telenor controls the joint venture with a 67.25 percent ownership.

A spokesman for Unitech said his company will take "legal action" against the proposed auction.

In reaction Telenor said: “The court mandated cancellation of license will destroy any value in the Uninor business. We don’t see why any shareholder should want this value destruction to happen when it is possible to conduct an open and transparent auction of Uninor's business while Uninor is still a going concern. An open auction will also remove any dispute around the real valuation of the Uninor business”.

The Norwegian telecom firm further stated: “Despite adverse circumstances, we are willing to participate in this auction and procure all of Uninor’s business”. 

New Delhi, August 1
Car sales in July witnessed moderate growth with the market still reeling under high interest rates and high fuel costs. India’s largest automaker and the second largest manufacturer, Maruti Suzuki India and Hyundai Motor India, both posted single-digit growth rate reflecting clearly the market sentiment.

Some other car manufacturers did report double-digit growth in July year-on-year but that was as a result of riding high on sales of a newly launched models.

Notwithstanding the lockout at the Manesar plant affecting its ready inventory, Maruti Suzuki reported a 9.2% rise in sales for July at 82,234 units as against 75,300 units in the same month last year.

Hyundai Motor said it posted a 6.4% sales growth in July over the same month in 2011. It added it sold 52,845 units (domestic 27,585 units, exports 25,260 units), up from 49,666 units (domestic 25,642 units, exports 24,024 units) logged in July 2011.

Nissan Motor India, the Indian subsidiary of Nissan Motor Co of Japan, reported sales of 3,481 units in July, up from 1,593 units sold in July 2011. The firm said the sales growth was driven by its entry-level Sunny sedan accounting for 2,436 units. 

New Delhi/Singapore, Aug 1
Diesel use in India temporarily spiked during two days of massive power cuts which left hundreds of millions of people without grid power, highlighting increasing clamour for the fuel to back up a rickety national grid.

Diesel usually makes up about 40% of fuel consumption in Asia's no. 3 oil importer, although much of the demand is covered from domestic production and imports in the last year have been about 60,000-70,000 tonnes a month.

"Demand is higher and it significantly went up in the northern region in the last two days," said an official at state-run refiner Indian Oil Corp.

"Diesel demand is very high, about 25% growth in some states, mainly due to power shortages. The blackout is a one-off case, but otherwise demand is high due to power shortages. It should ease out in the next one or two months," Bharat Petroleum chairman R. K. Singh told Reuters.

Last year, around 15% of total diesel demand of about 1.4 million barrels per day in India was consumed for power generation, said Victor Shum at consultant Purvin & Gertz.

"I expect increased use of diesel-fuel power generators in the near term when the government tries to find solutions to the power grid failure. Diesel consumption should therefore increase, further boosting diesel crack spreads in the region."

The government has forecast diesel consumption should grow 5.9% in FY2012-13, about the same pace as petrol and slightly below the economy as a whole, which should expand by about 6.5%. The government caps the price of diesel in an attempt to protect the poor and control inflation while petrol is sold at market rates. Diesel is 40% cheaper than gasoline. — Reuters

San Jose, Calif., August 1
An attorney for Apple told a jury Tuesday that bitter rival Samsung faced two options to compete in the booming cellphone market after Steve Jobs introduced the iPhone to critical acclaim in 2007: Innovate or copy.

Samsung chose to copy, making its smartphones and computer tablets illegal knockoffs of Apple's popular products, attorney Harold McElhinny claimed.

Samsung ``has copied the entire design and user experience'' of Apple's iPhone and iPad, McElhinny told a jury during his opening statement at the patent trial involving the world's two largest makers of cellphones.

In his opening statement, Samsung attorney Charles Verhoeven countered that the South Korean company employs thousands of designers and spends billions of dollars on research and development to create new products. ``Samsung is not some copyist, some Johnny-come-lately doing knockoffs,'' he said.

Verhoeven asserted that Apple is like many other companies that use similar technology and designs to satisfy consumer demands for phones and other devices that play music and movies and take photographs.

For example, he said several other companies and inventors have filed patent applications for the rounded, rectangular shape associated with Apple products. ``Everyone is out there with that basic form factor,'' Verhoeven said. ``There’s nothing wrong with looking at what your competitors do and being inspired by them.''

A verdict in Apple's favor could lead to banishment of Samsung's Galaxy products from the US market, said Mark A. Lemley, a professor and director of the Stanford Program in Law, Science, and Technology.

A verdict in Samsung's favor, especially if it prevails on its demands that Apple pay its asking price for certain transmission technology, could lead to higher-priced Apple products.

The witness lists of both sides are long on experts, engineers and designers and short on familiar names. Apple CEO Tim Cook is not scheduled to testify.

On Tuesday afternoon, Apple designer Christopher Stringer wrapped up the first day of testimony discussing his role in helping create the company's iPhone and iPod during his 17 years at the company.

Dressed in a tan suit, the bearded and long haired designer said because of Apple's desire to create original products, he and his co-workers surmounted numerous engineering problems such as working with the products' glass faces in producing both products over a number of years. Stringer said he was upset when he saw Samsung's Galaxy products enter the market.

``We've been ripped off, it's plain to see,'' Stringer said. ``It's offensive.''

The trial resumes Friday with the testimony of Apple senior vice president for marketing Philip Schiller.

Cupertino, California-based Apple Inc. filed its lawsuit against Samsung Electronics Co. last year and is demanding $2.5 billion in damages, an award that would dwarf the largest patent-related verdict to date. — AP

New Delhi, August 1
The cabinet is likely to set the starting price on Thursday for an auction of second-generation radio airwaves, two senior government sources have said.

The country will sell 2G airwaves in an auction after the Supreme Court in February ordered the revocation of all the operating permits awarded in a 2008 sale which became the centre of a corruption scandal that has blighted the government.

The auction is the final chance for carriers including Telenor and Sistema to continue working in India, the world's second biggest mobile phone market, as their licences are scheduled to be revoked in September.

"It's coming up before the cabinet tomorrow," one source said on Wednesday. "The (ministerial panel) has given them two options on the price."

A ministerial panel has recommended setting the auction base price at Rs 140 billion ($2.5 billion) or Rs 150 billion for 5 megahertz (MHz) of GSM radio airwave bandwith in the 1800 MHz band, the source said.

The panel has recommended the base price of another band, used by Sistema's Indian unit, at 1.3 times the base price of the 1800 MHz band airwaves, the source said.

Both sources declined to be named. — Reuters