India gears up LPG import infrastructure

NEW DELHI, Oct. 29 (UPI) -- India is gearing up its liquefied petroleum gas import infrastructure to tackle addition volume in the coming months.

The Petroleum and Natural Gas Ministry says the country’s LPG gas import infrastructure is being cranked up to handle additional volumes in a few months, when Reliance Industries Ltd. is expected to cut LPG production.

RIL accounted for more than a quarter of the country’s LPG production of around 8.5 million tons per annum in 2006. Around 2.5 mtpa LPG was imported last year to meet the domestic demand of 11 mtpa. India is not self-sufficient in this petroleum product, a ministry official said.

RIL says it is planning to cut LPG production at Jamnagar from 2.3 mtpa to around 1.6 mtpa from mid-2008 following the grant of export-oriented unit status to the refinery.

According to the ministry’s data, LPG imports are already on the rise. The data says that between April and July, the country imported 0.7 million tons LPG, 49 percent more than the 0.47 million tons a year ago.

“The cut in production will further increase imports. We are gearing up by augmenting our import facilities at Kandla,” said a senior ministry official.

Gap Threatens India's Clothing Boom

The Gap clothing chain has withdrawn a line of embroidered blouses and ordered an internal investigation after a news report alleged that the garments were stitched by children in a Delhi sweatshop. Sunday's edition of Britain's Observer splashed an undercover investigative report across two pages, alleging children between 10 and 13 worked in conditions "close to slavery" in the factory producing blouses bearing Gap labels. Gap, which has 200 of its 2,000 suppliers in India, was quick to order a recall and an investigation, while calling a meeting with suppliers to reiterate its no-tolerance policy on child labor. "Under absolutely no circumstance is it acceptable for children to produce or work on garments. It's a non-negotiable for us," Gap's senior vice-president for social responsibility, Dan Henkle, said in a statement.

The allegations may have come as a shock to Western readers accustomed to stories about India's rise as an economic power, but for most Indians child labor is a well-known reality — either uncomfortable or necessary, depending on which part of the social spectrum one belongs to. Indian law prohibits employment of children under the age of 14 in professions deemed hazardous, which covers 13 occupations and 57 processes, including the garment, mining, hospitality and domestic sectors. But between 75 and 90 million children continue to be part of the labor force in India.

"Everyone knows factories in Shahpur Jat use child labor — it's an open secret," says Puja Sahu, owner of a fashionable boutique in the area where the Observer reporter allegedly found the sweatshop. Shahpur Jat lies in the southern part of Delhi and houses grimy, dimly lit sweatshops behind plush, high-end boutiques. On Monday, there were no children working in the unit that had reportedly been making clothes for Gap, but several children were seen embroidering clothes in a number of other factories. Sahu says trained embroiderers and tailors are paid between $110 and $150 a month, whereas "children can be employed for less than half of this, sometimes for no money at all if their parents have sold them off."

The Indian government tried to downplay the issue and none of the ministries in whose domain it has arisen has commented. It was left to Commerce Minister Kamal Nath to react to the report. According to the Times of India, Nath said the allegations would be probed, while warning developed countries against using allegations of child labor as a pretext for taking protectionist tariff measures. Children's rights activists, however, see the latest allegations as typical of the problems associated with India's economic rise, where growth is prioritized over social equity. Pradeep Narayan of the non-profit Child Rights and You says, "Policies on liberalization, privatization, trade, export-import, et cetera get implemented very fast and very effectively. But the policies on the social sector, like health or child labor, never do."

On Monday, the Confederation of Indian Industry released a report predicting a 12% increase in the sourcing by foreign companies of clothing and textile production in India. In 2008, clothing and textile production in India for foreign brands is projected to be worth between $22 billion and $25 billion, as Western producers come in search of lower production costs that enable lower retail prices in the boutiques of the industrialized world. The cost to India of its neglect of social issues may begin to rise sharply, however, if the Gap recall deters other Western brands from sourcing their production to India. In the competitive apparel retail markets of the industrialized world, after all, the potential loss of market share as a result of a clothing label being tainted by any association with child labor would almost certainly outweigh any cost advantages in turning a blind eye.

India gets a taste for Chinese

MUMBAI - China and India might be elbowing each other in their growing global economic stakes, but an ancient food connection is growing deeper and stronger. Chinese cuisine ranks India's most favorite after local food, in the country's food and beverages (F&B) business bubbling at 9% annually.

A Federation of Indian Chambers of Commerce and Industry study expects India's F&B business to be worth US$117 billion by the end of the year. Showcasing the Chinese food market segmentare breezy young upstarts like Yo! China that aims at being a $250 million food chain in the near future.

Young entrepreneurs Ashish Kapur, Ajay Saini, Joydeep Singh, Sampat Talwar, Arun Chadha and Mandhir Soni started Yo! China four years ago in New Delhi, with open kitchens sporting a comic-book type of red and yellow interior. Their tagline "Chinese food. Chinese prices" was to bridge street food prices and gourmet quality.

Yo! China is now India's largest Chinese retail chain, with 14 outlets, including contracts to serve Mumbai and Delhi airports.

"There are 350 million middle-class people who eat three meals a day," reckons Ashish Kapur, managing director of Yo! China. "That's approximately a 1,000 million meals a day, and we didn't see national restaurant brands for such an opportunity."

His colleague and chief of projects, Ajay Saini, estimates India could accommodate another 10,000 Chinese outlets. "A recent market study said Chinese food is the favorite option when young people go out to eat and the second favorite [after south Indian cuisine] when families dine out," Saini told Asia Times Online. He figures India's eating-out frequency is still a fraction compared to Taiwan, South Korea or Thailand.

In which case, the Chinese food market in India is set explode with one-third of the population below the age of 15, and incomes rising. "India is the only large country in the world where the size of the working age population will grow - and will exceed the number of dependent children and old persons - until 2025, the year up to which projections of population have been made, and perhaps even beyond till 2045," Finance Minister Palaniappan Chidambaram told the Nobel Institute in Oslo on October 24.

Chinese food took root in India when Chinese immigrants settled in the sub-continent in the 18th century, mostly in eastern India, and gravitating towards Kolkata (Calcutta) that hosts the largest Chinese Indian population in the country.

Tangra, a leather-refining suburb in east Kolkata, became India's best-known "Chinatown" with its concentration of Chinese eateries, mostly in homes of local Chinese with the family disappearing when customers appeared through the living room curtains. Tangra also became India's best-known origin for Chinese sauces.

Since the 1980s, a spicy Indianized version of Chinese food took to the streets of metros, the cheap fusion cuisine becoming a great social leveler. In its pre-sanitized days, Marine Drive - Mumbai's famous seafront - had Chinese food street vendors with a clientele ranging from millionaire industrialists to hungry office-goers grabbing a chow mein plate for $2. (Though chow mein was originally a Chinese-American dish probably first created in the United States by Chinese cooks serving American railroad workers in the 1850s that bears little resemblance to true Chinese cuisine. The term comes from Mandarin Chinese, ch'ao mien', "fried noodles".)

Chinese street food costs even lesser in Kolkata, with a filling half-plate portion of vegetable chow mein selling for Rs6 (15 US cents).

Kolkata city centers such as Dalhousie Square and Park Street turn into humming street food bazaars during lunch hours, amid the clatter-bang of ancient trams lumbering through crowded traffic, and the sizzle of fried rice and noodles on woks, blending with sellers of popular pan-Indian fare.

Pioneering Chinese Indian restaurateurs, like Nelson Wang of Mumbai's China Garden, run their decades-old establishments in Indian metros - from Chungking in Chennai's Mount Road to Kamling off Marine Drive in Mumbai - but are losing top-end clientele to Chinese restaurants in five-star hotels such as the Taj and Marriot in Mumbai.

India's strong love for vegetarian food causes more headaches for Chinese chefs. Even street stalls sometimes use separate utensils for cooking vegetarian and non-vegetarian fare.

US-based Mark Pi Chinese food retail chain, with plans to open 300 restaurants across India and 400 more outlets in the Asia-Pacific region in the next five years, even promises a "Jain" Chinese menu for the predominantly vegetarian region of Gujarat: garlic, onions and potatoes forbidden.

"Any restaurateur who wants to serve Hong Kong-quality dimsum has to import everything from the flours to the fillings," sniffs Marryam H Reshii, a local food critic writing in the popular Indian portal Rediff.com. "It's only the rice, potato and wheat flours from south China that can turn out perfect dimsum."

UK-based food industry researchers and analysts IGD estimate that China's food market that was 35% the size of the US market in 2003, and will grow to be 82% in another 13 years. The US, China, Japan, India and Russia are expected to be the top five food retail markets by 2020.

India's love affair with Chinese food can only strengthen with increasing tourist traffic between the two Asian giants. The year 2007 had been declared "China-India Year of Friendship through Tourism" and the Chinese government said it hoped to double the number of Indian tourists to China each year to about 1 million by 2011, out of a total of 7 million Indians visiting foreign nations.

RBI hints at no change in rates

The Reserve Bank of India is unlikely to change the policy rates — the repo and reverse repo rates — in its mid-term review of the monetary policy amid persistent inflationary expectations following copious foreign capital inflows.

Headline inflation has dropped significantly below Reserve Bank of India’s target of 5 per cent for 2007-08 but this is a result of the government deciding not to pass on the increase in oil prices to consumers.

“The Indian basket price of crude oil, which averaged $57 a barrel in February 2007, increased to $75 a barrel in September 2007. Thus, headline inflation has remained suppressed due to a halt in pass-through of higher international prices to domestic prices since February 2007,” RBI noted in its report on Macroeconomic and Monetary Developments released on the eve of the mid-term review of the 2007-08 policy.

The report said the government would also start feeling the pinch of having to issue bonds to oil companies as compensation for losses that accrue from holding the price line. The government has approved Rs 23,458 crore of bonds in 2007-08.

Also, money supply is at a high of 21.8 per cent against the central bank’s target of 17 to 17.5 per cent and copious foreign capital inflows have caused a liquidity glut, which is seen as having significant potential to stoke inflation.

Against this background, key policy rates are likely to be kept unchanged at 7.75 per cent (the repo rate, at which RBI provides liquidity to banks) and 6 per cent (the reverse repo rate, at which liquidity is absorbed from banks), according to analysts.

Though overall credit growth has slowed to 23 per cent year-on-year in October 2007 from 28 per cent in 2006-07, demand for credit from the industrial sector has remained high. The slowdown has been largely because of a slump in demand from interest-rate sensitive sectors, including housing.

Analysts said this should offer RBI some comfort as its objective is to ensure that the genuine credit needs of industry are met and also because banks are likely to marginally lower interest rates on deposits.