INDIAN INDUSTRY SCALES NEW HEIGHTS

Indian industry continued to scale new volume peaks in December 2005, led by telecom, cement and automobiles. Tele-density in India has crossed into double digits to 11.43%, while 30 million new subscribers were added during the year, 26 million of whom were mobile subscribers and 4 million were fixed line. In December 2005 alone, 5 million total new subscribers were added. The installed telecom base in India is now 125 million subscribers according to the Telecom Regulatory Authority of India (TRAI).The industry grew by 34% in 2005, and the pace of growth is expected to continue, driven by falling telecom and handset costs. In the first week of January 2006 Reliance Infocomm dropped the national long-distance calling rate to its lowest ever of $0.02 per minute.

The Indian automobile sector, too, saw a surge in volumes for December despite price hikes. Cement industry leader ACC grew volumes for December by 18.3%, leading a renewed burst of growth for the industry as India continues to see an unprecedented construction and infrastructure boom.

While Indians are rapidly buying cell phones, cars and other consumer products, their appetite for gold is also increasing. India is the largest importer of gold in the world, and bullion futures are the most popular instruments traded on Indian commodity exchanges the National Commodity Exchange (NCDEX) and the Multi Commodity Exchange (MCX), with daily volumes exceeding $1.5 billion. The Securities and Exchange Board of India is finalizing plans to allow the introduction of gold mutual funds and exchange-traded funds, making it one of just a few nations to have bullion-linked saving instruments.

As the economy grows rapidly, the country's power needs have been increasing, too. A total of 100,000 MW of new generating capacity is to be put into place by 2012. National Thermal Power Corporation alone will put up 21,000 MW of that. In January 2006 it became the first Indian corporate (after the banks) to float a medium-term note program (tenure of K) years) listed on the Singapore Exchange. It is in the market to raise $1 billion to fund its gigantic expansion program.

-Antonio Guerrero

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