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INDIAN (B)

Inclusiveness Is Needed, Not Charity

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If you have attended his talks or watched his  YouTube videos, you will know that Sadhguru Jaggi Vasudev (60), has the ability to respond to any question — be it current affairs, spirituality, well-being or environment — with an enviable ease and calm. He speaks to Suman K. Jha on the rich and wealth management; economy, CSR, and judicious use of natural resources.

Excerpts:

How much wealth should one earn during one’s lifetime? 
Wealth is just one of the tools towards human well-being, not the whole of it. Wealth means making our surrounding pleasant for ourselves. But today, in pursuit of wealth creation, we are destroying the very planet upon which we live. Whether you make a safety pin or build a computer, you are digging it out of the planet. Individual human beings and humanity as a whole must decide how much to dig and how much the planet can take. We have to look at how much is sensibly manageable. Instead of thinking of wealth creation, we need to think of creating human well-being!

Do those (who have enough wealth) have a responsibility towards the less well-off? 

If you have, you can give and that is wonderful, but you should not talk about making others give. If someone has made money, paid taxes, and comply with the nation’s laws, whether they want to build a cancer hospital or paint themselves gold is their choice.

Charity is neither sustainable nor is it a solution. Nobody  wants to feel his well-being depends on charity. He wants to feel worthy, and that he is part of the process of economic prosperity. So, what is needed is investment. Charity means you only give what you think you can spare. Charity will always be a drop, investment is a chunk. So, investing in healthcare and education for the disadvantaged is not charity. It is investment that creates quality human resources and expands markets, furthering the scope of the economic engine.

Why does Hindu philosophy not encourage wealth creation? Critics say this discourages entrepreneurship.
This is not a culture that has been shy of the economic process. Till 250 years ago, India was the planet’s largest economy. Just about anybody who could build a ship in Europe wanted to come here. At the same time, there was not a single Indian without a spiritual practice, because at that time, spiritual process was not necessarily transmitted by a guru or an organisation. In every home, there was a spiritual process.

India became a vibrant economy, without a sense of conquest. Our success was not to the detriment of someone else. This culture has always stressed upon equal measure of attention for both internal and external well-being.

India will soon become the fifth top economy of the world. How does one minimise the divide between the haves and have-nots?
The haves and have-nots have happened not because of someone being born poor or born rich. It is just that socially we did not collectively take the responsibility of making sure everyone has something. What is needed is a more inclusive economy. If we want a gentler and more compassionate economic process, it is not charity but inclusiveness that is needed. If there is no sense of inclusiveness in individual human beings, there is no way that the systems they create or actions they perform will lead to inclusiveness.

Today for the first time in the history of humanity, we have the necessary technology, resource and capability to address every issue — of nourishment, health or education — on the planet. The only thing that is missing is inclusive consciousness. Tell me, how do you bring same parity between people when only 1.53 per cent have been paying taxes till recently. No wonder there is resistance to GST, as there is no escape.

How can Indian corporates become more socially responsible?

The days of CSR are over. Both the corporation and the individual come armed with certain capabilities. It is important to see how human potential and corporate capability can be combined to create a productive enterprise.




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INDIAN (B)

Walmart in talks to buy minority stake in Flipkart: report

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MUMBAI (Reuters) – U.S. retailer Wal-Mart Stores Inc is in advanced talks to buy a minority stake in India’s leading homegrown e-commerce firm Flipkart, the Economic Times newspaper said on Tuesday.

Walmart could acquire a stake of 15 percent to 20 percent in Bengaluru-headquartered Flipkart, the main challenger to U.S. tech giant Amazon.com Inc’s India ambitions, the daily said, citing two anonymous sources.

Walmart has held intermittent talks with Flipkart over the past two years, two sources familiar with the matter told Reuters, asking not to be identified as the talks are confidential.

The two companies signed a non-disclosure pact in 2016 that was renewed last year, one of the sources said.

In September 2016, Reuters reported Walmart was in talks to buy a minority stake in Flipkart. [reut.rs/2dCBJzs]

Walmart is likely to make a significant investment in Flipkart if the talks lead to a deal, both sources said, adding, however, that buying a stake of 15 percent to 20 percent in the online marketplace could be pricey and difficult as it recently raised funds.

FILE PHOTO: The logo of India’s largest e-commerce firm Flipkart is seen on the facade of the company’s headquarters in Bengaluru, India July 7, 2017. REUTERS/Abhishek N. Chinnappa/File photo

Last year, Japan’s SoftBank Group invested nearly $2.5 billion in Flipkart through both primary and secondary investments. Flipkart also secured $1.4 billion from China’s Tencent, online marketplace eBay and software giant Microsoft.

SoftBank owns roughly a fifth of Flipkart, while U.S. hedge fund Tiger Global Management owns a stake of slightly less than 20 percent, one of the sources told Reuters.

A Walmart-Flipkart deal could be finalised as early as March, and may involve a direct investment and secondary sales by some longstanding Flipkart investors, the Indian paper said.

It makes little sense for Walmart to buy a stake in Flipkart unless it is looking to fully acquire the firm, said Harminder Sahni of retail consultant Wazir Advisors.

A potential union of SoftBank-backed Chinese e-commerce player Alibaba and Flipkart would pose a more formidable challenge to Amazon, he added.

Betting on Flipkart, though, will intensify Walmart’s battle with Amazon that has hurt brick-and-mortar rivals like it in their home U.S. market, pushing them to invest in online retail, offer discounts and improve the in-store shopping experience.

Spokesmen for Flipkart and Walmart declined comment, saying the firms do not respond to market rumors or speculation.

Reporting by Sankalp Phartiyal in MUMBAI, Sangameswaran S in BENGALURU; Additional reporting by Nandita Bose in NEW YORK; Editing by Sai Sachin Ravikumar and Clarence Fernandez



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INDIAN (B)

FMCG: From Mixed Reactions In The Last FY To Expectations From This Year’s Budget

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The FMCG (Fast-moving consumer goods (FMCG) or consumer packaged goods (CPG)) industry is the backbone of equity and human resource markets nationally. The sector logged a healthy 8 percent revenue growth in the first half of fiscal 2017, but failed to sustain momentum thereafter following demonetization of high-value notes. This restricted full-year growth to just 6 percent on-year.

GST Impact

In August 2016, the GST bill was passed by the Indian Parliament.It was levied on as many as 178 products, including chocolates, cosmetics, detergents and air-fresheners etc. Some firms operating in categories such as FMCG, consumer electronics and food retail reaped the benefits in the form of reduced logistics costs and lowering of taxes. However, other segments, such as soft drink manufacturers and e-tailers have had to pay higher taxes. Many companies like HUL passed on this cost advantage to the end consumer, but quite a few others did not. Especially those that carried long pipeline stocks did not pass on the advantage despite the government making it clear that it was the responsibility of the companies to ensure that their entire retail is directing to announce this to the end user.

E-commerce 

This got a huge fillip, thanks to demonetization and GST, and aided FMCG sector on an everyday level. Monthly groceries that were traditionally cash and carry were now going cashless. The adoption to this online mechanism has been surprisingly quick, compared to expectations. Aggregators like big basket or Amazon grocery, are trying a new route to deepen relationships with consumers.

Corresponding to the growth of e commerce, one saw the decline in Television advertising paving way to viral marketing in social media. Brands getting marketed through this medium increased. Examples included new screens/modes like Netflix, Hotstar, Jio movies, endangering the blockbuster/events driven advertising which has been the mainstay of FMCG advertising. Even Nestle relaunched its noodles via Snapdeal, a tribute to the reach of E-commerce.

What to expect in FMCG -2018?

Favorable demographics and rise in income level will boost FMCG market in 2018. This industry in India is expected to grow at a CAGR of 20.6 per cent and is expected to reach US$ 103.7 billion by 2020 from US$ 49 billion in 2016. Growing awareness, easier access, and changing lifestyles are the key growth drivers for the consumer market. The Government of India’s policies and regulatory frameworks such as GST and demonetization are expected to drive demand, both in the rural and urban areas, and economic growth in a structured manner in the long term and improve performance of companies within the sector.

Quarterly growth trends are positive for the industry already, but that is partly also because the comparison basis of last year same quarter was low! Some other trends to look forward to:

Ethnic positioning seems to be gaining favor- some examples are Paper boat beverages from Hector, Cheddar foods into the banana/tapioca chips segment as against KFC ( shutting down in some places) to Dominos that has reported slow growth. Western trends in foods seems to have slowed down and desi is clearly up.

Fitness/Health- this is expected to grow more… Consumer awareness in this area fueled by ‘organic’ farm foods and gym/work out areas- this is one segment that will continue to bring in the money.

Rural is picking up demand. Semi-urban and urban segments accounted for a revenue share of 40 per cent in the overall revenues recorded by FMCG sector in India. Affordability will be the primary focus as companies target the rural folks. Smaller unit packs that encourage bottom of the pyramid to purchase products will be seen more and more. Britannia’s Tiger is going to see revival in packaging and in distribution/availability. Dabur is revamping its Dabur Red toothpaste. Patanjali is further entering rural India with its various brands.

EXPECTATIONS FROM 2018 BUDGET-for FMCG

As per a report, makers of Fast moving consumer goods (FMCG) are expected to see nearly 15% revenue growth in the quarter ending December 31, 2017. The reason provided for the growth is improved consumer sentiment and rise in rural demand

From a FMCG perspective, for GST benefits to reach the consumers, organizations like Mars (confectionary) are investing in instore technology to ensure monitoring of this.Dabur, which makes Vatika shampoo and Fem skin-care products, plans to release ads telling consumers about the price reductions as well as to monitor the trade closely. Kolkata based Emami is also planning to do similar things.

Analysts expect tax policy for cigarettes to be soft, with an anticipation of an increase in excise duty on cigarettes by 10 percent across slabs and also the likely introduction of 59-mm segment in the current slab structure.

Given the above importance of rural in fueling the economy, the budget is expected to favor this segment. The plan of‘double rural income in the next 5 years’ may get further clarity on its implementation.

In order to boost e commerce, miniaturized Point of Sale (POS) card reader for m-POS, iris scanners, fingerprint readers/scanners and micro ATM standards version 1.5.1 that have been exempted from BCD, excise/ Countervailing Duty (CVD) and Special Additional Duty (SAD), will continue that way.

According to CRISIL, overall FMCG is to see volume-driven growth andimproved margins. However, rising input prices of raw materials such as crude oil and milk will restrict further margin expansion.

Disclaimer: The views expressed in the article above are those of the authors’ and do not necessarily represent or reflect the views of this publishing house. Unless otherwise noted, the author is writing in his/her personal capacity. They are not intended and should not be thought to represent official ideas, attitudes, or policies of any agency or institution.




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INDIAN (B)

Fujifilm to take over Xerox, combined into joint venture

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TOKYO (Reuters) – Japan’s Fujifilm Holdings is set to take over Xerox Corp, and combine the U.S. company into their joint venture Fuji Xerox in an effort to cut costs, the companies said on Wednesday.

Fujifilm will own 50.1 percent of Xerox shares, and combine Xerox with Fuji Xerox, their joint venture in which the Japanese company already holds a 75 percent stake.

Reporting by Naomi Tajitsu; Editing by Jacqueline Wong



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INDIAN (B)

4 major rivers in J&K declared 'national waterways': JK govt

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Jammu, Jan 31 (PTI) Four major rivers, including Jehlum and Chenab, in Jammu and Kashmir have been declared “national waterways” by the Union government, paving the way for inland navigation on them to boost water transport and tourism, the state government has said.

“The Union government has declared four rivers namely Chenab, Indus, Jhelum and Ravi as national waterways, which would be developed in a phased manner,” Minister for Public Health Engineering, Irrigation and Flood Control, Sham Lal Choudhary said.

He said the state government was examining the feasibility-cum-detailed project report of Inland Waterways Authority of India (IWAI) prepared for inland navigation and construction of horizontal and vertical terminals across these waterways.

“The development of these national waterways will boost the Inland Water Transport, besides, exploit the tourism potential on the national waterways of the state and improve the socio-economic profile of people of these areas,” he said.

Choudhary, speaking on a discussion on the demand for grants of PHE, I&FC departments in the Legislative Assembly last night, said under the Rs 399.29 crore Comprehensive Flood Management Plan for river Jehlum, Phase-I, an amount of Rs 177.20 crore has been utilised against the released amount of Rs 196.12 crore.

He said a dispute with the Punjab government in connection with the construction of Shahpur Kandi Barrage has been resolved and a fresh agreement has been ratified by both the governments.

“To take the project forward, formulation of DPRs of Comprehensive Flood Management Plan of river Jehlum Phase-II worth Rs 1684.60 crore under PMDP has been entrusted to WAPCOS, an empanelled agency of Union Ministry of Water Resources and it has been directed to complete it within three months,” the minister stressed.

To meet future flood challenges in the Jammu region, the Flood Protection to River Chenab project at a cost of Rs 2,314 crore has been conceptualised and the DPR has been submitted to the Union government, he added. PTI AB ABH

Disclaimer: This story has not been edited by BW staff and is auto-generated from a syndicated feed.


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INDIAN (B)

Fed expected to keep interest rates steady as Yellen era ends

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WASHINGTON (Reuters) – The Federal Reserve is expected to leave interest rates unchanged on Wednesday while signaling a gradual tightening of monetary policy later this year as the U.S. economy continues to expand and job gains remain solid.

Investors will focus on the U.S. central bank’s gauge of inflation, which remains stubbornly below its 2 percent target, the risks it sees to its economic outlook, and any assessment of the impact of the Trump administration’s tax overhaul on growth.

The Fed is due to release a statement at the end of its latest two-day policy meeting at 2 p.m. EST (1900 GMT). The policy meeting is Fed Chair Janet Yellen’s last as head of the central bank.

The economy has added about 10 million jobs and unemployment has fallen to a 17-year low of 4.1 percent during Yellen’s four-year tenure while interest rates have slowly risen from the near-zero levels put in place to fight the 2007-2009 recession.

Incoming Fed chief Jerome Powell has worked closely with Yellen and embraces her view that keeping rates on a slow upward path will allow unemployment to fall further, coaxing workers back into the labor force and fostering stronger wage growth.

With the outset of the Powell era only days away, analysts do not expect a dramatic shift from the Fed on Wednesday.

“Why change the current message on policy and possibly sway market opinion one way or the other, just before Powell takes over?” said Lou Brien, an analyst for Chicago trading firm DRW. “I don’t think Powell will shift the direction of policy in March, but it is only fair to give him a clean slate just in case.”

The Fed raised rates three times last year and currently projects another three hikes in 2018. But that forecast, which has been largely accepted on Wall Street, will hinge on a continued pickup in inflation.

Even a small upgrade in the central bank’s description of inflation or its view of the balance of risks to the economic outlook could suggest a slightly faster pace of rate hikes than currently anticipated.

The economy grew 2.3 percent last year.

Several Fed policymakers have said that President Donald Trump’s restructuring of the U.S. tax code, including an estimated $1.5 trillion in corporate and individual tax cuts, could spur growth this year.

U.S. stocks have risen sharply since the tax package passed Congress late last year on expectations of a rise in corporate profits.

Reporting by Ann Saphir; Editing by Paul Simao



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INDIAN (B)

GiftsbyMeeta in One-of-a-kind Move to Set up a Team of 30

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Bikers for Same-day Delivery in Delhi NCR Areas on Upcoming Valentine

(Attn.editors: The following press release comes to you under an arrangement with PRNewswire. PTI takes no editorial responsibility for the same).

GiftsbyMeeta in One-of-a-kind Move to Set up a Team of 30 Bikers for Same-day Delivery in Delhi NCR Areas on Upcoming Valentine

NEW DELHI, January 30, 2018/PRNewswire/ –India’s only holistic premium gifting brand, GiftsbyMeeta, in a fresh move, announced that the company is in advanced phase to set up a team of more than 30 bikers to cater the overwhelming demand of online Valentine gifts from the website on Valentine’s day for a faster delivery.

(Logo: http://mma.prnewswire.com/media/530131/Gifts_By_Meeta_Logo.jpg )

GiftsbyMeeta, a sister company of India’s biggest floral retail chains, Ferns and Petals group took this move based on the latest survey conducted by the company on its more than 30,000 customers from Delhi NCR.

The recently concluded survey reveals that out of 5,000 respondents (customers), 50% wanted their delivery of gifts on the same day, 30% customers were okay with their delivery within 48 hours while 5% customers agreed upon giving more time than 48 hours, emphasizing more on the quality of products.

The survey conducted via emails, company’s social media channels and via direct phone calls has also revealed that 10% customers wanted to emphasize more on quality rather than giving priority to the delivery time.

While interacting with press personnels at head offices in New Delhi, Mr. Ankit Rathi, North India Retail Sales Head, GiftsbyMeeta said, “The latest survey has vividly proven that timely delivery is the most important thing, after a lot of enhancement at the technological and qualitative front and product varieties, the delivery is still something the customers are expecting to be further improved. Moving along these lines, the company has set up an internal team of experts to come out with some concrete solutions against this demand. And based on the responses obtained from the customers, by the survey, the company has hired a team of 30 bikers to ensure the fastest delivery of online Valentine gifts for girlfriend throughout the valentine week. The valentine occasion has always been the higher sales-generating day and on the valentine occasion, this premium gifting company receives an order on every interval of 3 minutes, on its website.”

The company has already a team of 10 bikers, 10 four- wheelers, as well as its delivery partner, BlueDart that makes the delivery within 24 hours in Delhi NCR area.

The company will be keeping a team of 3 four-wheelers and 5 bikers on the standby mode so that every order from the categories such as romantic gifts and other valentine-centric categories can be served with furthermost priority.

About GiftsbyMeeta:

The proven leader in the Indian floral and plants market, Ferns and Petals group’s owner, Mr. Vikaas Gutgutia’s wife, Mrs. Meeta Gutgutia, has started GiftsbyMeeta, a single window of holistic gifting services online. The company started its operations in the year 2013 and has developed a great expertise in offering luxury gifting services and it has already reached to more than 160 nations with its gifting services. This bootstrap financed company has more than 5,000 unique gifting articles and these premium gifts have been arranged in various categories such as gifts for wife, husband and other relationship and locations based categories on the website.

Media Contact: Ankit Rathi ankit.rathi@fnp.com +91-9711304321 GiftsbyMeeta Source: GiftsbyMeeta PRNewswire DL

Disclaimer: This story has not been edited by BW staff and is auto-generated from a syndicated feed.


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Xerox near deal that would cede control to Fujifilm – WSJ

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(Reuters) – Xerox Corp is nearing a deal with Fujifilm Holdings Corp that would cede control of the U.S. photocopier pioneer to its Japanese competitor, The Wall Street Journal reported citing people familiar with the matter.

The deal, to be announced as soon as Wednesday, would combine Xerox with the five-decades-old joint venture it has with Fujifilm, the Journal said. Xerox shareholders would own just under half of the resulting entity and would get an implied premium for their stock and cash, it said.

The talks could still fall apart or the terms could change, the paper said, adding that Xerox shares would continue to trade following any deal.

Fujifilm and Xerox declined to comment on the report.

FILE PHOTO: Fujifilm’s company logo (top) is seen at its exhibition hall nearby the headquarters of Fujifilm Holdings Corp in Tokyo, Japan June 12, 2017. REUTERS/Kim Kyung-Hoon/File Photo

Xerox has been under pressure to find new growth sources as it struggles to reinvent its legacy business amid waning demand for office printing. Fujifilm is also trying to streamline its copier business with a larger focus on document solutions services.

Xerox has been targeted by activist investor Carl Icahn and shareholder Darwin Deason, who joined forces last week to push Xerox to explore strategic options, oust its “old guard”, including its CEO, and negotiate better terms for its decades-long deal with Fujifilm. Icahn is Xerox’s biggest shareholder, with a 9.72 percent stake.The two firms’ joint venture, Fuji Xerox, was formed in 1962 and has limited prospects as demand for office printing declines.

The joint venture, which is 75 percent owned by Fujifilm, now accounts for nearly half of Fujifilm’s sales and operating profit and sells photocopy products and services in the Asia-Pacific region.

Fujifilm shares were down 0.4 percent in early morning trade on Wednesday. Xerox shares ended down 0.5 percent on Tuesday.

Reporting by Diptendu Lahiri in Bengaluru and Minami Funakoshi in Tokyo; Editing by Sandra Maler and Muralikumar Anantharaman



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INDIAN (B)

Era of US' economic surrender is over: Trump

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By Lalit K Jha

Washington, Jan 31 (PTI) In a stern warning to countries like China, President Donald Trump today said the era of America’s “economic surrender” is over and the US is seeking to enter into new trade agreements with nations that commit to fair and reciprocal trade.

In his first State of the Union address, Trump said his administration will work to fix bad trade deals and negotiate new ones to protect American workers.

“We will protect American workers and American intellectual property, through strong enforcement of our trade rules,” he said.

“The era of economic surrender is over. From now on, we expect trading relationships to be fair and to be reciprocal. We will work to fix bad trade deals and negotiate new ones,” Trump said.

Trump had earlier criticised the one-sided and unfair trade relationship between the US and China and asserted that America must address the unfair trade practices that drive the trade deficit.

Trump said his economic policies is resulting in new confidence in the country.

“Since the election, we have created 2.4 million new jobs, including 200,000 new jobs in manufacturing alone. After years of wage stagnation, we are finally seeing rising wages,” he said.

“Unemployment claims have hit a 45-year low. African- American unemployment stands at the lowest rate ever recorded, and Hispanic American unemployment has also reached the lowest levels in history,” he said.

“Small business confidence is at an all-time high. The stock market has smashed one record after another, gaining USD 8 trillion in value. That is great news for Americans’ 401k, retirement, pension, and college savings accounts,” he said.

Referring to his tax cuts and reforms, Trump said the massive tax cuts provide tremendous relief for the middle class and small businesses.

“To lower tax rates for hardworking Americans, we nearly doubled the standard deduction for everyone. Now, the first USD 24,000 earned by a married couple is completely tax-free. We also doubled the child tax credit. A typical family of four making USD 75,000 will see their tax bill reduced by USD 2,000 — slashing their tax bill in half,” he said.

Trump said he slashed the business tax rate from 35 per cent all the way down to 21 per cent, so American companies can compete and win against anyone in the world. These changes alone are estimated to increase average family income by more than USD 4,000.

Small businesses have also received a massive tax cut, and can now deduct 20 per cent of their business income, he said.

“Since we passed tax cuts, roughly 3 million workers have already gotten tax cut bonuses — many of them thousands of dollars per worker. Apple has just announced it plans to invest a total of $350 billion in America, and hire another 20,000 workers,” said the president as he described this as a “new American moment”.

“There has never been a better time to start living the American Dream,” he said.

Trump said in his drive to make Washington accountable, his administration has eliminated more regulations in the first year than any administration in history.

“We have ended the war on American Energy — and we have ended the war on clean coal. We are now an exporter of energy to the world,” he said.

He said many car companies are now building and expanding plants in the United States — something not seen for decades.

Chrysler is moving a major plant from Mexico to Michigan; Toyota and Mazda are opening up a plant in Alabama.

“Soon, plants will be opening up all over the country. This is all news Americans are unaccustomed to hearing — for many years, companies and jobs were only leaving us. But now they are coming back,” he said.

Noting that “exciting progress” is happening every day, he said to speed access to breakthrough cures and affordable generic drugs, last year the FDA approved more new and generic drugs and medical devices than ever before in the history.

“We also believe that patients with terminal conditions should have access to experimental treatments that could potentially save their lives.

“People who are terminally ill should not have to go from country to country to seek a cure — I want to give them a chance right here at home. It is time for the Congress to give these wonderful Americans the “right to try.”,” he said.

“One of my greatest priorities is to reduce the price of prescription drugs. In many other countries, these drugs cost far less than what we pay in the United States. That is why I have directed my Administration to make fixing the injustice of high drug prices one of our top priorities. Prices will come down,” he said. PTI LKJ PMS

Disclaimer: This story has not been edited by BW staff and is auto-generated from a syndicated feed.


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Low-cost, long-haul flights from India to boost leisure travel – report

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MUMBAI (Reuters) – The launch of low-cost, long-haul flights by Indian airlines will boost outbound leisure travel and open a multi-billion dollar opportunity for carriers, a report released on Wednesday showed.

The analysis by aviation consultant CAPA India and online travel agent Expedia Inc (EXPE.O) comes as large budget airlines IndiGo and SpiceJet Ltd (SPJT.BO) draw up plans to fly as far as Europe and the United States.

The carriers have so far focused on shorter-range destinations such as Sri Lanka and Thailand.

Only 0.3 percent of Indians currently travel abroad for a holiday every year, a fraction of the estimated 100 million who could potentially afford to do so, CAPA’s analysis of household income shows. Most Indians travel for education, business or to visit friends and relatives.

Tourism spending by Indians could rise to as much as $40 billion by 2027 from about $16.4 billion in 2016, CAPA said, ranking it sixth in the world ahead of Canada, South Korea and Australia.

“If there is any market where low-cost, long-haul can work it is India,” CAPA India CEO Kapil Kaul said at an aviation conference in Mumbai on Tuesday, citing its geographic location and a large order pipeline for new long-range narrowbody jets. 

SpiceJet Chairman Ajay Singh said on Tuesday low-cost long haul flights will be introduced as early as this winter.

IndiGo is exploring long-haul operations and seeking rights to routes, parent InterGlobe Aviation Ltd (INGL.NS) told analysts last week.

The low-cost flights would compete against full-service Indian carriers Air India and Jet Airways (JET.NS) as well as global rivals such as Emirates [EMIRA.UL] and Lufthansa (LHAG.DE).

BUDGET GROWTH

Low-cost carriers, launched in the early 2000s, already dominate domestic air travel with a two-thirds market share.

The share of budget airlines in the international market rose to about 23 percent in the fiscal year 2016/17 from 14.5 percent five years earlier, CAPA estimates.

That is expected to rise as Indian airlines have placed orders for nearly 800 re-engined aircraft, such as Airbus (AIR.PA) A320neos and Boeing Co (BA.N) 737 MAX narrowbodies.

The jets, with longer ranges than predecessors, will enable low-cost carriers to launch non-stop routes to Asian destinations such as Phuket, Manila, Hong Kong, and Hanoi that are otherwise unviable today.

By 2025, Indian budget carriers will operate close to 40 wide-bodied aircraft, which could deliver an additional 2 million annual outbound leisure travellers to places such as New York and Sydney, CAPA said.

Low-cost carriers AirAsia India and Vistara, a full-service joint venture between Singapore Airlines (SIAL.SI) and India’s Tata Group, are expected to launch their first international flights later this year.

Reporting by Aditi Shah, Editing by Jamie Freed and Biju Dwarakanath



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