Professional Documents
Culture Documents
I would also like to thank the entire team Amity International Business
School for the constant support and help in the successful completion of
my project.
Signature
Subject
Research Methodology……………… 7
Primary Objective(s)
Research Design
Chapter 2
Sample Design
Scope of the Study
Limitations
Data Collection
Chapter 5 Primary Data 55
Secondary Data
Chapter 7 Recommendations 58
Chapter 8 Bibliography 59
Chapter 9 Annexure 60
Tables
Graphs
Conclusion
Chapter 10 68
Chapter 11 80
This research work - has been done by me under the humble guidance of my
Industry guide Mr ABAHY UPADHAY & faculty guide Ms.Geeta on the topic
“IMPACT OF FOREIGN INSTITUTIONAL INVESTMENT ON INDIAN STOCK
MARKET”.
This research work starts with the general introduction of the FII in India after
LPG(Liberalization ,Privatization , Globalization) in 1991 . Rules & regulation
through which FII enter into Indian market & finally what impact it leaves on our
sensex , also provides the advantage & disadvantage of FII in India .
Foreign Institutional Investors are in love with India. They are betting big time on
Dalal street. The amount of investment that has poured into India in last 3 Years is
more than total investment they made in the country since India got Independence.
The total investment that Foreign Investors (FIIs) have made in India currently
stands at 220,000 crore rupees or $52 Billion. These figures were as of April 2007. In
first 4 months of this year itself FIIs have put in around 15000 crores One of the
reason which pulls the Sensex to a life time high 15000,in July 2007 is none other
than FIIs only
With the use of SPSS, finally I find that positive relationship exist between FII &
SENSEX figure , as R2 ( coefficient of determination) comes out in plus points
PRIMARY OBJECTIVE
Before starting a project , we should keep in mind the clear objective of the project
because in the absence of the objective one can”t reach the conclusion or the end result of
the project . Research objective answer the question “Why this study is being conducted”
For every problem there is a research. As all the research is based on some objective, my
research has also some objectives which are as follows:
To ascertain the growth prospect in BRIC countries by doing in-depth and detailed
analysis of the economic situations in these countries
To identifying key opportunities for growth in different industry sectors at the
economies of Brazil Russia, India and China,
Research Design is a plan for selecting the sources and types of information used to
answer research questions. A framework for specifying the relationships among the
study variables. Research Design is a blueprint that outlines each procedure from
the hypothesis to the analysis.
Growing Pains: Brazil, Russia, India and China face economic hurdles
Brazil, Russia, India and China, collectively known as BRICs, are the current buzz on
everyone’s global economy radio as a result of their incredible economic growth. This
growth has stemmed from compounding changes in each country: “All these things don’t
just happen magically–they happen for a reason,” says Texas A&M Finance Professor
Arvind Mahajan.
Researchers have linked BRICs as a potential team with China and India acting as
dominant global suppliers of goods and services, and Brazil and Russia as their
commodity and raw material suppliers. All four of these countries have experienced
growth because of their advancement to global capitalism, which has been propelled by
programs such as changing political systems, foreign investment and education. But
BRIC countries still face major hurdles that may slow their rising economies.
Brazil’s economic position has improved because the demand and prices of its exports
have risen, but primary surplus associated with higher taxes can lead to higher public
debt. The INSS, Brazil’s social security administration, is pressuring the central
government for increasing retirement expenditures while investment expenditures are
declining as a fraction of its gross domestic product, or GDP.
A democratically elected government runs India, but its democracy has created obstacles
of another kind. “Progress can’t be as swift because of democracy. Democracy can be bad
news and good news—it’s bad because it makes everything move slower, but it’s good
because if people aren’t happy, they can complain,” Mahajan says. Even with slower
progress, India’s growth rate has exploded–it averaged a 6 percent increase over the last
25 years. If that growth rate continues, India’s economy (in terms of purchasing power)
will equal that of the U.S. by 2050.
China has the most potential of the BRIC countries to become the next world leader.
Mahajan says researchers joke that “China is the production center of the world and India
is the huge back office of the world.” China is the biggest country by area, and with 1.3
billion people, it is also the most populous nation in the world. Needless to say, China’s
overpopulation results in cheap labor and concentrated areas of poverty.
In an effort to control overpopulation, each family in China was allowed to have only one
child. This has helped lower the population, but in the future, there may not be enough of
the working-age population left to run China’s huge rising economy. The lack of
regulations is also causing major problems. Pollution is so extreme that citizens are
developing serious health problems from polluting agents. And as more people in China
become educated and wealthy, they will demand more political rights.
In order for the U.S. to remain active in the global market alongside BRIC countries,
Mahajan suggests that the U.S. must continue in the path of freely competitive and more
efficient markets, pursuing policies encouraging innovation and rigorous education with
new industry-specific strategies. “If we do things right, we can have the same strengths,”
he says.
Mahajan, along with other Mays professors, plans to continue challenging Texas A&M
students in their knowledge and understanding of the global economy, especially
concerning BRIC countries. “The U.S. is on the first page of every country’s newspaper,”
Mahajan says. “We know so little about these countries, and they know so much about us.
We need to understand where people are coming from to know where they are going
The Bric countries have large, young populations to drive this growth, with many
concentrated in major cities, wealth generators that these are.The growing prosperity of
the Bric economies will be largely down to a rapidly emergent and expanding middle
class. Improving domestic consumption should complement export and investment
strengths, and provide more long-term growth.
The numbers of Bric residents whose incomes exceed $3,000 (consistent with entry into
the middle class in the emerging markets region) should almost double between 2006 and
2009.
By 2015, more than 800 million people across the four economies should have crossed
this threshold – exceeding the current total population of the US, Western Europe and
Japan combined. This should affect many industry sectors, including mobile-phone
operators, computers, automobiles, etc. Rising incomes will also lead to increased
numbers of high-net-worth individuals.
Meanwhile, India's stock market has reached very high levels. We expect Indian GDP and
corporate earnings growth to slow as we enter 2008. We will be watching for fiscal and
monetary policy initiatives to keep inflation under control. Although positively positioned
for the long term, the Indian market is likely to remain volatile in the short term.
Chinese equity valuations have moved up in recent months, but we believe the higher
valuations are justified given the better earnings-growth outlook. The currency
appreciation, mergers and acquisitions, and implementation of management incentive
plans, as well as a tax cut in 2008, should support Chinese equities. A negative is China's
huge and rising trade surplus with the US and Europe.
Finally, Russian equities suffered in the August markets' turmoil, and with no strong
performance earlier this year to cushion the blow, many Russian stocks have been left on
modest valuations. For example, Gazprom and Lukoil are on relatively low valuations,
even though both companies have a longer estimated life of oil resources than their
Brazilian counterpart Petrobras.The oil price, which is a key driver of Russian equities, is
unlikely just to collapse, although for some stocks, the market has been trading as if this
were the case.
Forecasts that the nominal GDP of the BRICs will virtually treble between 2006-2012 to
US$15.4trn, with combined exports of US$3.6trn boosting domestic growth and creating
Brazil, Russia, India, and China in 2050.Some Projection about BRIC countries
In less than 40 years, the BRICs economies together could be larger than the G6 in US$
terms .By 2025 they could account for over half the size of the G6 - they are currently
worth less than 15%. Of the current G6, only the US and Japan may be among the six
largest economies in US$ terms in 2050
The largest economies in the world (by GDP) may no longer be the richest (by income
per capita), making strategic choices for firms more complex.
As today’s advanced economies become a shrinking part of the world economy, the
accompanying shifts in spending could provide significant opportunities for global
companies. Being invested in and involved in the right markets—particularly the right
emerging markets—may become an increasingly important strategic choice
Brazil, Russia, India and China as economies that would together overtake the economies
of the six richest countries in the world by 2040. India and China are investing in higher
education and going for “intellectual capital”, while Russia and Brazil depend too much
on the current commodity price boom and are not making the necessary investments in
infrastructure and human capital.
• According to the authors, China and India “are competing with the west for
“intellectual capital” by seeking to build top-notch universities, investing in high,
value-added and technologically intensive industries, and utilising successful
diasporas to generate entrepreneurial activity…”. Yes, but India has got its basic
education wrong. It might have a few Brahmin-like intellectuals involved in rich-
economy standard services and high-tech activities, but it will not have resolved
its problems of mass poverty and thus long-term political stability and immense
potential growth prospects. According to my Pocket World in Figures, 2007
Edition edited by The Economist, adult literacy in China is 90.9%, Brazil 88.6%,
Russia 99,4% and India…. a mere 61%. What do foreign investors want to do in a
country with 40% illiterate people? There is not much evidence either that much is
being done in India to tackle this problem.
• The article also says that in Russia and Brazil, “the infrastructures of both
countries remain third world”. If China is investing massively in infrastructure,
there is no evidence of a real drive to do something about infrastructure in India at
all. And if Brazil’s and Russia’s infrastructure is “third world”, so what is India’s?
Globalization and growth--Worldwide demand for energy and other commodities, the
outsourcing phenomenon, and widespread access to global capital have helped fuel the
BRIC countries' growth. India dominates service outsourcing, Brazil and Russia have vast
energy and mineral resources, and China has developed into the world's manufacturing
plant. India's economy is growing at 8.5% a year, and China's at more than 10.5%, and a
combined GDP of BRIC countries is US$5.2 trillion in 2006.
Huge populations, future buyers--Together, the BRIC countries represent 42% of the
world's population, These leading emerging and rapidly-growing economies represented a
total market of 2.7 billion people.That number represents enormous untapped future
purchasing power. It gives BRIC countries the potential for even more rapid expansion if
their economies continue
to develop and the benefits reach a greater percentage of their populations.
Reduced reliance on foreign debt—Growth has helped BRIC countries pay down loans
incurred during previous economic crises, though the potential for default on that debt
could still present an investment risk.
COUNTRY ANALYSIS
BRAZIL
AMITY INTERNATIONAL BUSINESS SCHOOL,NOIDA
AMITY UNIVERSITY – UTTAR PRADESH
Brazil became an independent nation in 1822 and a republic in 1889. By far the largest
and most populous country in South America, Brazil overcame more than half a century
of military intervention in the governance of the country when in 1985 the military
regime peacefully ceded power to civilian rulers. Brazil continues to pursue industrial and
agricultural growth and development of its interior. Exploiting vast natural resources and
a large labor pool, it is today South America's leading economic power and a regional
leader. Highly unequal income distribution remains a pressing problem.
Population: 190,010,647
Brazil conducted a census in August 2000, which reported a population of 169,799,170;
that figure was about 3.3% lower than projections by the US Census Bureau, and is close
to the implied under enumeration of 4.6% for the 1991 census; estimates for this country
explicitly take into account the effects of excess mortality due to AIDS; this can result in
lower life expectancy, higher infant mortality and death rates, lower population and
growth rates, and changes in the distribution of population by age and sex than would
otherwise be expected .
Nationality: Brazilian
Ethnic groups: white 53.7%, mulatto (mixed white and black) 38.5%, black 6.2%,
Religions: Roman Catholic (nominal) 73.6%, Protestant 15.4%, Spiritualist 1.3%,
Bantu/voodoo 0.3%, other 1.8%, unspecified 0.2%, none 7.4% (2000 census)
Languages: Portuguese (official), Spanish, English, French
Brazil will remain a strong beneficiary of high energy prices in 2008, with its ethanol and
chemical industries firing on all cylinders. Brazil is also strongly positioned in the world
of rising beef and poultry prices, general appreciation in agricultural commodities
markets and rising global demand for other natural resources. It’s regional stronghold in
energy will be amplified as electricity demand rises both domestically and in
neighbouring countries.
Brazil is benefiting from benign inflation and strong exports. In addition, declining
interest rates and a current account surplus have combined to kick-start local markets.
Brazil's growth is expected to remain strong as homebuilding takes off, retail sales
expand and infrastructure improvements gain steam. All of this comes as exports remain
healthy and demand for imports rises.
RUSSIA
Population: 141,377,752
Age structure: 0-14 years: 14.6% (male 10,563,567/female 10,021,316)
15-64 years: 71.1% (male 48,412,612/female 52,061,604)
65 years and over: 14.4% (male 6,360,038/female 13,958,615)
Nationality: Russian
Ethnic groups: Russian 79.8%, Tatar 3.8%, Ukrainian 2%, Bashkir 1.2%, Chuvash 1.1%,
other or unspecified 12.1%
Religions: Russian Orthodox 15-20%, Muslim 10-15%, other Christian 2% (2006 est.)
Languages: Russian, many minority languages.
Russia will most likely be a star performer in 2008 in the entire Euro-Asian zone. This
performance will only partially depend on high-energy prices. Instead of oil and gas –
which will remain solid performers for Russia – the country economy will be driven by
domestic consumption growth, higher demand for majour commodities and enhanced
Russia faces political risk and depends heavily on oil and gas prices, but it's generally
considered the cheapest of the BRIC markets. Moreover, Russia has better long-term
growth prospects than most other emerging markets, Gerhardt says, and should
outperform in the next 12 months.
CHINA
China stood as a leading civilization, outpacing the rest of the world in the arts and
sciences, but in the 19th and early 20th centuries, the country was beset by civil unrest,
major famines, military defeats, and foreign occupation. After World War II, the
Communists under MAO Zedong established an autocratic socialist system that, while
ensuring China's sovereignty, imposed strict controls over everyday life and cost the lives
Population: 1,321,851,888
Age structure: 0-14 years: 20.4% (male 143,527,634/female 126,607,344)
15-64 years: 71.7% (male 487,079,770/female 460,596,384)
65 years and over: 7.9% (male 49,683,856/female 54,356,900) (2007 est.)
Median age: total: 33.2 years
male: 32.7 years
female: 33.7 years
Nationality: Chinese
Ethnic groups: Han Chinese 91.9%, Zhuang, Uygur, Hui, Yi, Tibetan, Miao, Manchu,
Mongol, Buyi, Korean, and other nationalities 8.1%
INDIA
Aryan tribes from the northwest infiltrated onto the Indian subcontinent about 1500 B.C.;
their merger with the earlier Dravidian inhabitants created the classical Indian culture.
The Maurya Empire of the 4th and 3rd centuries B.C. - which reached its zenith under
ASHOKA - united much of South Asia. The Golden Age ushered in by the Gupta dynasty
(4th to 6th centuries A.D.) saw a flowering of Indian science, art, and culture. Arab
incursions starting in the 8th century and Turkic in the 12th were followed by those of
Population: 1,129,866,154
Age structure : 0-14 years: 31.8% (male 188,208,196/female 171,356,024)
15-64 years: 63.1% (male 366,977,821/female 346,034,565)
65 years and over: 5.1% (male 27,258,259/female 30,031,289)
Median age : total: 24.8 years
male: 24.5 years
female: 25.2 years
Nationality: Indian
Ethnic groups: Indo-Aryan 72%, Dravidian 25%, Mongoloid and other 3%
Religions: Hindu 80.5%, Muslim 13.4%, Christian 2.3%, Sikh 1.9%, other 1.8%,
unspecified 0.1%
Languages: English enjoys associate status but is the most important language for
national, political, and commercial communication; Hindi is the national language and
primary tongue of 30% of the people; there are 21 other official languages: Assamese,
Bengali, Bodo, Dogri, Gujarati, Kannada, Kashmiri, Konkani, Maithili, Malayalam,
Manipuri, Marathi, Nepali, Oriya, Punjabi, Sanscrit, Santhali, Sindhi, Tamil, Telugu, and
Urdu; Hindustani is a popular variant of Hindi/Urdu spoken widely throughout northern
India but is not an official language
PESTLE Analysis
Brazil: After the slowdown of the 90's the focus
shifts to stability
Though hindered by certain structural problems, economic growth now looks steady.
Brazil's economic performance has a strong base. Brazil seems to have left its turbulent
economic past behind though a number of basic issues still remain. A strict taxation
policy is regarded as a burden amongst all social classes with inadequate social returns
President Lula has promised to bring the issues of rampant red tape, corruption and
organized crime under control Corruption scandals involving members of the legal,
executive and judiciary systems are commonplace. Red tape is holding back opportunities
for business in Brazil. The existence of organized crime and prison gangs is rampant. The
absence of strong laws protecting intellectual property is a growing issue. The Lula
government has identified key issues to tackle.
A declining and ageing population along with the growth of urban agglomerations
are increasingly important issues. Russia's population is steadily declining and ageing
rapidly Expanding urban agglomerations are characterized by rising affluence and
growing business opportunities but income inequality and a rising crime rate are the key
challenges
Active government involvement to support the growth of the ICT sector, though
software piracy is still rampant The Russian government is actively encouraging
research and development in the technology sector.Software Piracy continues to be a
major inhibitor to the growth of the ICT industry
India: Rising internal issues may de-stabalize the well placed reforms
Declining in influence, Indian National Congress still holds the key to political stability
Gaining the support of national and regional parties makes it difficult for a single-party
government to be formed at the center. Political stability in India is threatened by the
Kashmir dispute and other internal issues. India's current position in the global arena is
reflective of its political and economic development over the past two decades.
Doubts over sustainability of the current rapid economic growth continues to plague
the sub-continent India has registered robust economic growth over the recent past
which has put it in a relatively strong economic position. However, doubts over the
sustainability of this growth continue to plague the economy. Infrastructure holds the key
to sustain current levels of economic growth. The government has adopted a liberal
approach towards foreign nvestment in most sectors
Steps have been taken to improve the legal system though lot still remains
Initiatives have been taken to strengthen the judicial system. Other indicators of legal
health see only marginal improvement
After two decades of rapid economic growth, China takes conscious measures to
stabilize and sustain future growth. China has been the fastest growing economy in
East Asia and the world for the last two decades However; there are growing concerns
IT SECTOR
Brazil, Russia, India and China to Lead Internet Growth Through 2011
There will be 1.5 billion people with Internet access in 2011, with the biggest growth in
the online population occurring in Brazil, Russia, India and China, according to a new
report.
JupiterResearch says the worldwide online population will increase at a compound annual
growth rate of 6.6 percent during the next five years, far outpacing the 1.1 percent
compound annual growth rate for the planet's population as a whole. The report says 1.1
billion people currently enjoy regular access to the Web.
North America will remain on top in terms of the number of people with online access.
According to JupiterResearch, online penetration rates on the continent will increase from
the current 70 percent of the overall North American population to 76 percent by 2011.
However, Internet adoption has "matured," and its adoption pace has slowed, in more
developed countries including the United States, Canada, Japan and much of Western
Europe, notes the report.
As the online population of the United States and Canada grows by about only 3 percent,
explosive adoption rates in China and India will take place, says JupiterResearch. The
report says China should reach an online penetration rate of 17 percent by 2011 and India
should hit 7 percent during the same time frame. This growth is directly related to
infrastructure development and increased consumer purchasing power, notes
JupiterResearch.
By 2011, Asians will make up about 42 percent of the world's population with regular
Internet access, 5 percent more than today, says the study.
Penetration levels similar to North America's are found in Scandinavia and bigger
Western European nations such as England and Germany, but JupiterResearch says a
number of Central Europe countries "are relative Internet laggards."
For the study, JupiterResearch defined "online users" as people who regularly access the
Internet by "dedicated Internet access" devices. Those devices do not include cell phones.
Brazil, Russia, India and China, commonly referred to as BRIC, consumed $65 billion of
information technology in 2005 and combined IT spending in BRIC is expected to reach
nearly $110 billion by 2009. Although they are often described as a group, Brazil, Russia,
India, and China are a diverse and complex set of economies and cultures. Today these
economies account for just 6% of global IT consumption, but by 2009 the BRIC
emerging group will account for 8% of global technology spending, making it equal in
size to the Japanese IT market. This is this reason why BRIC is becoming an important
strategic focus for many global technology companies.
Energy Sector
The BRIC countries - Brazil, Russia, India and China - have helped push the steel
demand globally with strong performances recorded in the past year and is expected
to sustain in coming years too.
The International Iron and Steel Institute (IISI) said that with only two months left before
the year gets over, the expectation for global demand in alloy for 2007 is to increase 6.8%
due to solid contribution given by BRIC countries - Brazil, Russia, India and China,
Apparent consumption of steel in China is anticipated to increase by 11% this year and
over 11.3% in 2008, making up 35.01% of the worldwide demand for two years time. For
India, consumption of steel is expected to grow by 13.5% this year and around 11.6% in
the year 2008.
Positive predictions are being made for Russia's market, following an increase of 25% in
consumption for the year 2007 and a rise of around 9.48% for 2008. The rise is being
fuelled by the construction and energy sectors. Brazil's apparent consumption of steel is
projected to go up by 15.60% this year and 5% in the year 2008, with public investment
program partly contributing to fixed capital formation.
The surging steel demand will benefit the iron-ore diggers the most, and steel producers
of coking (metallurgical) coal. Manganese and molybdenum are also going to benefit but
for stainless steel, the demand for chrome and nickel will remain underpinned.
Opportunities do exist
There are, of course, wide regional differences in expenditure levels within the BRIC
countries, far more so than in developed countries where health systems have evolved to
provide a more uniform level of coverage. All four countries have a relatively wealthy
A long haul
This is evolution not revolution, and change will be incremental. Short-term opportunities
exist in meeting the health demands of the burgeoning middle classes, and future
prospects are bright, where steady growth in BRIC markets will erode commercial
differences with the established markets in North America, Japan and Europe.
INDIA
With a population of over one billion, the pharmaceutical market in India has
considerable potential. Espicom’s market projections assume stable market growth of
around 8.4% per year, putting the market at US$15.6 billion by 2012. It should be noted,
however, that if calls for an end to drug price controls come to fruition, short-term market
growth is likely to be much higher.
As India develops, the disease profile of the country is changing. Traditional infectious
diseases such as smallpox have been eradicated and the number of cases of vaccine
CHINA
The pharmaceutical market in China (excluding Hong Kong) is estimated at US$22.6
billion in 2007, an increase of around 8.5% over the previous year. The figure is distorted,
however, by the presence of traditional Chinese medicines (TCMs). The TCM market is
estimated to be worth around US$5-6 billion. The size of the market for western-style
pharmaceuticals, therefore, can be reckoned at around US$17.0 billion, equal to around
US$13 per capita. This makes China one of the largest markets in the world, and second
only to Japan in Asia. Per capita spending on pharmaceuticals remains among the lowest
in the world, however, and is broadly comparable with India.
The Chinese pharmaceutical market has shown impressive growth in recent years, in
tandem with the country’s rapid economic expansion. The influx of foreign multinationals
in recent years has offered continued investment, and production plants and R&D
facilities are being expanded all the time. Improvements in regulatory practices are
making the ability to sell imported products quicker and easier, while the lowering of
tariffs on imported goods and an increase in transparency of legislation has made a
notoriously hard-to-penetrate market a more attractive proposition for overseas
companies. Imports continue to rise, with 2005 seeing an increase of 21.8%. Recent
government price cuts, particularly pertaining to the burgeoning category of antibiotics
are likely to affect some companies, and although an anticipated price war is likely to
have an effect on the market, the industry as a whole will become more competitive.
BRAZIL
Due to the depreciation of the US dollar, the Brazilian pharmaceutical market is
experiencing high growth in dollar values. The Brazilian pharmacy sector was valued at
US$9.8 billion in 2006, well ahead of the pharmacy sector in Mexico, valued at US$9.6
AMITY INTERNATIONAL BUSINESS SCHOOL,NOIDA
AMITY UNIVERSITY – UTTAR PRADESH
billion. Drug prices continue to increase in spite of generics competition. Excluding
ICMS and other taxes applicable to drugs, FEBRAFARMA estimated the annual
pharmaceutical market at US$10.9 billion and 1.7 billion units in 2006. Including ICMS
and other taxes, Espicom estimates the market to reach around US$13.6 billion in 2007,
equal to US$72 per capita.
The generics sector is dominated by local producers, restricting the market entry for
foreign producers. In 2006, generics sales amounted to US$1.1 billion, equal to 10.7% of
the overall pharmacy sector. Generics sales will continue to outperform the pharmacy
sector, fuelled by generics production of oral contraceptives & hormones and
blockbusters losing their patents.
RUSSIA
In 2007, the Russian pharmaceutical market is estimated at US$8.3 billion, equal to
around US$59 per capita. The market size is almost three times larger than the Czech
Republic. In per capita terms, the market is similar to Romania. The market is split
between imported products and cheap locally-produced generics. Imports account for
around 69% of the pharmaceutical market. According to the Ministry of Health and
Social Development, approximately 60% of imported drugs were generics in 2006.
In 2005, new rules governing the supply of drugs to vulnerable population groups came
into force. Patients have to choose between receiving a package of benefits including free
medicines or accepting a sum of R513 each month. The government initially allocated
US$1.7 billion for the programme, but this fell by 41% in 2006, due to half of the
population opting out in favour of the cash equivalent. The budget for 2007 is R34.9
billion (US$1.3 billion), although this is unlikely to cover costs.
The biggest breakthrough growth for the automotive industry will come from BRIC
countries .These countries — India, Brazil, Russia and China — will account for more
than 40 per cent of forecast global light vehicle assembly increases and represent 52 per
cent of the industry's forecast global capacity expansion.
These factors are reflected in the fact that nearly all major global automakers are pursuing
a BRIC strategy in some form as they attempt to gain competitive advantage by tapping
the potential of these emerging markets. This is just one of the findings included in the
annual `Global Automotive Financial Review' by PricewaterhouseCoopers.
So far we know pretty much every scrap of information that is avail-able on the Nano, till
the car is officially launched later this year and is available for test-drives . We know that
the standard variant — sans airconditioning and power steering—will have an ex-dealer
price of Rs 1 lakh (though customers will have to shell out the value added tax and the
logistics cost from the factory). That it sports a 623 cc, two-cylinder , MPFI engine with
single balancer shart, four-speed manual transmission and top speed of 105 kms per hour.
That the powertrain is packed in the rear to increase interior space.
All the major global vehicle manufacturers have either established or are in the process of
establishing their presence in India like Volkswagen, Hyundai Motors India,,
BMW,Nissan,Honda,Maruti.Tata Motors, Ford,Opel India, Renault, Toyota
etc. Industry, however, needs to work with Government to address some of the key areas
such as inadequate infrastructure, high direct and indirect tax regime, inflexible labour
laws, etc., to ensure that the industry is able to seize the opportunity and achieve the
potential growth."
As per the report, the emerging strength of the BRIC countries is common to all
manufacturing sectors. What makes the automotive industry so different is the additional
dynamics of consumer tastes and demands, which vary so much from market to market.
The challenge is responding to these with new strategies and products. Companies that
maintain a `business as usual' strategy or wait too long to act will find it extremely
challenging to sustain momentum as the competitive environment transforms around
them. As the auto industry becomes more global and markets more competitive, the
winners will tend to be those companies that fully capitalise on the opportunities in
BRAZIL
Brazil represents the 16th largest retail market in the world growing at 6.6% CAGR.
Brazil is a high-potential market for retail as a result of the country’s
large and growing population (expected to reach 200 Million by 2013) and its
attractiveness to foreign investors as a strategic base for the Latin America region which
will continue to attract money while creating additional jobs.
Brazil has been a favoured FDI destination too. In retail, F&G was the most attractive
segment for FDI in Brazil till recently, with over US$5 billion invested. The growing
RUSSIA
Russia’s economy has grown strongly for 8 years with 2006 growth just under 7% and is
attractive to foreign investors. National operators currently have the largest market share
but multinational retailers have strong positions in modern retail formats. Investment
priorities are similar to developed markets and include efficient supplychain, private label
and customer loyalty.
Russia's food retail market is extremely fragmented, and it is only in the cities of Moscow
and St Petersburg that significant consolidation has taken place. About 70-80 percent of
the organised shopping centre developments are concentrated in these two major cities.
On a countrywide basis, the top five grocers capture a combined share of around 9% of
the modern grocery distribution. There is also a marked absence of hard discounters in
this highly price-sensitive land -- thereby creating a huge opportunity area.
The main investors in Russia happen to be European countries. With the majority of
foreign investments directed towards retail and wholesale trade, more than in other BRIC
countries, Russian retail attracts a large portion of FDI. As far as retail categories are
concerned, besides grocery development, cosmetics and personal care hold much promise
with an annual growth rate of 15 percent. Currently there is also an absence of value retail
brands in Russia.
INDIA
India represents the 11th largest retail market in the world and is growing at 10.4%
CAGR. Given the lower income levels and comparatively strong restrictions on foreign
direct investment, foreign retailers have been far less active in India than in China. Lack
of infrastructure (roads, rail, etc) will impede growth. Spending on “Food at home” is
expected to represent over 50% of total spending by 2010.
The current policy prohibits FDI in retail trading, except for ‘Single Brand' product retail
subject to a maximum 51 percent foreign equity, and 100 percent FDI in wholesale trade
alone. India offers huge opportunities across all retail categories and formats, with the
largest opportunity waiting in the F&G sector, which is less than one percent organized at
the moment. Developing retail agribusiness ventures, among others, is advised .
CHINA
China represents the 3rd largest retail market in the world and is growing at a 9% CAGR.
China’s population of 1.3B consumers along with high economic growth Rates, recent
entry into the WTO and opening up of its markets offers retailers considerable
opportunities for growth. “Food at home” will remain the largest Segment.
Domestic retailers are now scrambling to enter tier-II cities to consolidate their positions
before global retailers establish themselves in these areas too. With growing urban as well
as rural incomes, national as well as international retailers are set to cash in on the
shopping boom.
1) Across BRIC countries, the food and grocery (F&G) segment is clearly driving
retail growth. For eg, retail food sales dominate the total retail market in Brazil,
accounting for almost 54 percent of the total retail sales, while Russia is the fastest
growing retail food sales market in the world, with the potential to again double in
size by 2008.
2) The prevalence of English as a language of communication to a very great extent
facilitates material sourcing and business communication. While India and Russia
pose no problems in this regard, Brazil and China present communication
problems for foreign companies.
3) The importance of governments that are quick on decision-making and passing
liberal trade laws cannot be emphasised enough. In China, for instance, being a
non-democratic country makes it easier for foreign investors to do business sans
bureaucratic red-tapism (in comparison to a democratic country like India), the
obvious reason being that the political establishment is not directly accountable to
the people.
4) Growing urbanisation and metropolitan saturation is leading to the expansion of
retail formats and investment opportunities towards tier-II cities and rural hubs
across all four countries.
5) Continued economic reforms together with the growth of organised retail
(especially in the F&G segment) has led to growing rural incomes, triggering off
far-reaching, social impacts. The upcoming ‘Golden Quadrilateral' plan for
roadways in India, which is to connect the four cities of Delhi, Kolkata, Mumbai
and Chennai, will have massive economic and social repercussions on rural and
Eye on India
India's imminent urbanisation process has implications for demand for housing, urban
infrastructure, location of retail, and demand for consumer durables.
The on-stream infrastructure development will drive growth in the transportation sector,
spur demand for vehicles, increase real estate values along the “Golden Quadrilateral”
corridor, and potentially boost construction of suburban homes as people escape
congested cities. Plus, it will open up thousands of villages en route to a global audience
and effectively integrate them with the growing Indian economy.
• Growth of the Retail market, to a great extent, is the dependent on the size of the
country's consuming class and the rate of growth of GDP, especially disposable incomes.
• India is the world's second most populous country and its GDP growth is likely to
surpass that of China by 2015.
• Reflecting on the robust growth in India's GDP, consumer expenditure (in current
prices) grew at a relatively high pace of nearly 10 percent per annum over the past two
years.
• India's advantage lies in the fact that it has the largest young population in the world –
over 890 million Indians are below 45 years of age. The median age for India is 25 years
as compared to 28 years for Brazil, 33 years for China and 38 years for Russia.
• There are more English speaking people in India than on the European continent.
• The retailing industry in India, estimated at USD 270 Billion in 2006, is expected to
double to USD 440 Billion by 2010.
• The size of the organised retailing market in 2006 stood at USD 12.4 Billion in 2006,
thereby making up a mere 4.7 percent of the total retailing market.
• Of the total retail market, food and grocery retail is by far the single largest block
estimated to be worth a whopping Rs.642,200 crore, but more than 99 percent of this
market is dominated by the neighbourhood mom & pop stores.
• Clothing, textiles and fashion accessories constitute the second largest block.
• For the year 2007, the India Apparel Report 2007 expects growth of organised retail to
touch 40 percent. From 2008 onwards (until at least 2010), organised retail is expected to
register around 45 percent YoY growth in India.
• Total retail in India, which registered 5.7 percent YoY growth from 2004-2006, to range
between that and 6 percent YoY growth over the next 3-4 years.
• With these growth percentages and following from our estimates for 2006, the future
estimates* for organised retail in India: 2007– Rs.77,000 crore; 2008 – Rs.111,500 crore;
• All new players – Reliance Industries, Bharti Retail/ Wal-Mart, AV Birla Group – have
shown interest towards developing these two formats, along with wholesale, cash & carry
outlets, while India's largest retailer – Pantaloon Retail India Ltd. – has a continuous store
rollout schedule for its Big Bazaar hypermarkets and Food Bazaar supermarkets.
Price change is the ultimate focus of investors, but investing as a forward looking process
requires examination of fundamental issues. One fundamental issue in country analysis
is the degree of carbon dependency - principally oil, natural gas and coal.
Carbon based economies could once assume that carbon for energy and for material was
unlimited and that it would always be available. In World War II control of African and
Middle Eastern oil supplies was an important strategic issue that began to put carbon
availability as an issue into clearer view. By the 1970’s an OPEC oil embargo showed
that low cost oil was not a total certainty. In the last few years, both supply and price
have come into fierce focus. Globalization and global growth in standards of living
(essentially carbon dependent) have put geologic supplies of liquid carbon fuels into
question. Evolution of terrorism as a new global war with no end in sight has put
politically controlled supplies of liquid carbon into flux, along with disruptive price rises.
While there are non-carbon energy alternatives, such as uranium (proxy CCJ), the world
is so entrenched in carbon dependency that it is beyond individual investment time frames
to consider substitution on a global scale. While there are enormous coal supplies
AMITY INTERNATIONAL BUSINESS SCHOOL,NOIDA
AMITY UNIVERSITY – UTTAR PRADESH
and technologies to convert coals to liquids and gases (SASOL in South Africa: SSL),
these will take many years to implement on a global scale.
There is not necessarily a good or bad level of carbon dependency; however awareness of
each country’s carbon dependency could be useful in predicting economic performance
under scenarios with varying carbon price levels and available supply.
Some countries may do better in a carbon starved world, or in a scenario where carbon
prices or supplies are in crisis. The table below shows some key carbon dependency facts
for major countries and regions. Let’s think about what implications this data may
suggest.
BRIC (Brazil, Russia, India and China), for example, is anything but a monolith in terms
of carbon. Russia (proxy TRF) and Brazil (proxy EWZ) are major carbon exporters.
Brazil exports both non-renewable petroleum and renewable alcohol, whereas Russia
produces only non-renewable oil and gas. Russia is in a good carbon situation today, but
they are acting recklessly with relationships and they have not shown themselves to be
particularly trustworthy in the energy sector — caution is appropriate allocating to
Russia.
China (proxy FXI) is about to be, or may already be, the world’s largest carbon consumer
and is working very hard to sustain its carbon supplies to drive its economy and maintain
civil order ,which may depend on growth of its economy. India (proxy INP) is a net
carbon consumer, but nowhere near the level of China . India has built an economy based
on exporting brains and services, instead of manufactured goods as China has done.
Both India and Brazil consume low percentages of world carbon and have low per capita
carbon consumption. That may mean they have lower short term sensitivity to a price or
supply crisis, except to the extent that their customers suffer from carbon problems.
FINANCIAL SECTOR
Financial services market consists of institutions such as banks, insurance companies,
finance houses and assets management companies, among others, that deliver products to
direct end users, the customers, being the largest and most visible single group of end
users.The retail products available to this group in its generic form include depository
accounts, credits and payment services. Though statistics are sketchy, it would not be out
of place to suggest that this market encompasses more than 300 businesses, which include
the 24 commercial banks; mortgage banks, securities companies and brokers, insurance
agencies, micro-finance banks and leasing companies, among others.
Banking and insurance products are well-established among India's growing upper- and
Everyday financial services are out of reach for more than two billion people in
developing countries. But the rapid growth of branchless banking – including mobile
phone banking – is reducing the cost and expanding the availability of such services.
Brazil’s increase in access to finance has been accomplished largely through the more
than 95,000 banking “correspondents”—local merchants and post offices that act as
agents for banks, equipped with card-swipe and barcode-reading point-of-sale (POS)
terminals. In the past five years, technology has brought 13 million people in Brazil into
the banking system
In Russia, a broad network of bank ATMs, POS terminals, and online e-money providers
offer transaction services outside of traditional branch offices.
BRIC (Brazil, Russia, India and China) countries have outperformed other emerging
markets in 2008. According to Morgan Stanley Capital International's (MSCI's) emerging
market standard index, investments in BRIC countries have given a return of 50.22%,
while emerging markets of Eastern Europe gave second best return of 43%.
Among the BRIC countries, China, which was languishing for last four years, gave a
return of 71.68% as per MSCI index. Russia was ranked second with a return of 51.80%
and India came third with a return of 45.95%. Brazilian market gave a return of 40.46%
However, this does not mean that Chinese market has offered a superior return in the long
term. But later, the market turned bearish as government had halted the privatisation
programme.But later, as the government again pushed the reform programmes in
companies, investors' interest returned to the market.
Particularly, after the government's recent decision to divest a part of its share holding in
banks has helped the investors' confidence in the market. Recently, Industrial and
Commercial Bank of China raised $21.9 billion through an initial public offerings - the
biggest ever in the history of capital market.
Indian stock market has continued its bull run for the fourth year since 2003. The BSE
30-share index went up by over 42% per annum compounded annually. Every year since
2003, the sensex has been making records by touching new highs. A senior merchant
banker said the Indian market would have touched higher levels had the Manmohan
Singh government not halted the reforms in the public sector companies.
Shares of oil PSUs and public sector banks, except that of State Bank of India, did not
perform. While the sensex went up by around 47%, BSE index for public sector
companies improved by only 12% in 2006. Because of the continued bull-run, M-cap of
BSE has crossed $800 billion mark. The market cap of Chinese market has gone ahead of
India's because of its bull-run in the last two months when the SSE-180 stock index went
up by around 35%.
In case of Brazilian market also, the commodity prices play an important role. The most
prominent index Ibovespa, went up by 30.33% .
In 2007, BRIC-centric exchange traded funds (ETFs) were powerhouses. So far, 2008 is
telling a different story. The Claymore/BNY BRIC Fund (EEB) has seen challenges in
some of its four countries - Brazil, Russia, India and China. From its all-time high, it's
down 19%, reports Gary Gordon for ETF Expert, and the gains upward of 65% in
2007 feel like a memory. Year-to-date, the fund is down 10.7%.
Take heart, though: it's still above its long-term trend line (200-day moving average).
Gordon feels that the fund is still attractive, though: it has a low price and allows
investors access to all four emerging markets without being overweight in any single
Brazil, Russia, India and China are the dominant emerging countries in the world, and
as a whole, the future growth of the world economy depends on these countries
continuing on their growth path. Needless to add, mutual funds, hedge funds, ETFs,
indexes, future, options and a host of other investing instruments have now
mushroomed to take advantage of the rapid growth in these economies. Many
companies that operate in these countries have listed their stocks in the New York
Stock Exchange as well, in search of a wider pool of investors and investment dollars.
The average investor can take the path of investing in individual securities, but this limits
the number of companies one can safely and easily invest in. It is far better to put money
into actual mutual funds that specialize in emerging economies with a specific focus on
the BRIC nations of Brazil, Russia, India and China.
Wall Street Journal recently reported that Franklin Templeton Investments, HSBC Asset
Management, Deutsche Asset Management and Schroders Investment Management are
among the fund companies that recently began offering BRIC funds to investors in
Europe and Asia, and to U.S. high-net-worth individuals. Nikko Asset Management has
launched a BRIC fund in Japan.
As you may note, these funds are not available to the average investor in the US - but if
you are a high net-worth individual then you can take advantage of these funds. There are
other options however, such as the American Century Emerging Markets and Managers
Another method to invest is to simply buy the ETFs that track the stock market indexes in
these countries. For example you could purchase the MSCI Brazil Index fund (EWZ), and
the MSCI India ETF, or the upcoming Market Vectors Russia ETF (produced by Van
Eck), and the MSCI China (HKD) or very broadly, simply the MSCI Emerging Markets
Index ETF (EEM). Also, take a closer look at all the closed funds that operate in these
countries. Funds such as India Fund, India Growth Fund, China Fund, Greater China
Fund, Brazil Fund and Brazil Equity Fund, and Templeton Russia Fund will give you the
exposure and diversification you need.
Last but not the least is funds that are based in those countries - local companies that
primarily cater to the domestic population. There are several very savvy fund managers
that operate in each of these countries, and who are intimately familiar with the local
conditions and now have developed a reasonably strong track record. Not all of them
have facilities to accept and disburse funds abroad, but either directly, or through banking
institutions, you should be able to access these funds. Alternatively, your broker should be
able to place orders in those countries directly and give you access to not only these
mutual funds, but to a large range of individual companies in these countries.
As with any asset allocation methodology, make sure that investments in the
BRIC countries make up a fixed, small percentage of your overall portfolio. Many of
these nations are experiencing serious, sustained growth for the first time in many
years - and are yet to face all the usual obstacles of business cycles, social moods
that may swing from pro-business to anti-business, protectionism and currency
upheavals. While the returns are wonderful, always take some money off the table
each time you make a serious profit in any of these investments. As mentioned
above, event risks are above average in these economies and countries.
Emerging markets may be “high-risk, high-octane stuff”, says Justin Modray of Bestinvest in
The Independent on Sunday, but those who have been brave enough to invest in funds
covering Brazil, Russia, India and China (Bric funds) have seen “eye-popping” returns, says
while the Axa Talents Brick (the ‘k’ stands for South Korea) has risen by a third over the
past 12 months.
That compares to a measly 0.7% return over the same period from the global emerging
markets sector. “Even the star managers in this sector couldn’t keep up with the Brics,” says
One of the bedrocks of the expansion in emerging markets has been exports. Russia and Brazil
have benefited from the price of oil and other commodities being pushed up by China’s and
India’s demand for raw materials, while Westerners have snapped up China’s cheap
manufactured goods. Many commentators fear, understandably, that this makes them
vulnerable to a slowdown, or even recession, in the US economy – something that seems more
But there’s more to the Bric story than cheap goods. As their economies have developed, the
countries have become increasingly self-reliant. The emergence of a middle class in each
country is feeding a steady rise in internal consumption. With retail and financial services
booming as a result, there are signs that the Brics are now better placed than in the past to
weather a US downturn.
And investment bank Goldman Sachs (whose head of global economic research, Jim O’Neill,
initially coined the term Bric) certainly sees no slackening of growth in the near future – the
US bank has pencilled in average GDP growth of 8.5% for the Brics during both 2007 and
2008. Indeed, O’Neill believes the Brics could “become bigger than the G6 by 2035”. He thinks
China represents particularly good value and that this year’s stockmarket rally “could be the
start of a bull market” lasting five years or more, says the FT.
PERFORMANCE ANALYSIS
Of course, there are risks in investing in emerging markets. Political interference, corruption
and bureaucracy are a fact of life in all four countries. But there is comfort in the fact that
valuations remain attractive. “Brazil is on nine times 2007 earnings and China and Russia on
11-12 times,” Julian Mayo, investment director of Charlemagne Capital, tells the FT.
For those who are interested in buying into the Bric, most financial advisers reckon emerging
markets should make up no more than 10% of a portfolio. The Axa Talents Brick is the fund
BRIC Funds are volatile and carry a higher risk both in terms of market and currency
volatility which may result in dramatic fluctuations from time to time. Risks might also
include dealing difficulties, settlement and custody practices and the market for some of
the securities may be less liquid. Investments in emerging markets include investment in
Russia. You should be aware that although the Russian Registrar Companies, that provide
share registration services to issuers of Russian securities, are appropriately licensed in
Russia, they may not be subject to the same stringent controls, as in other, more
developed countries. This may mean that investors may not secure good title to the
Russian securities held by the local Depositary. Hence, because of the potential for even
greater volatility in such markets, there is a consequently greater risk of you not receiving
back all/or any of your investment allocated to this market. The Fund will hold typically
around 60 stocks. Lower diversification and active stock selection can result in greater
than average investment in individual countries, companies or market sectors. Such
The manufacturing companies of the group of countries known as Bric (Brazil, Russia,
India, and China) are filled with optimism in relation to the business perspectives for the
next 12 months, notwithstanding the moment of strong crisis in the American economy.
According to the survey of the KPMG International consulting company, the Brazilian
companies are more confident regarding the level of business activity this year - 77.5%
believe it will increase and 1.2% that it will reduce. On the average of the Bric, 70%
foresee an increase of the level of activity, whereas 5.9% believe in the fall. KPMG has
surveyed 1.8 thousand companies in the four countries. The Brazilian companies are also
those which show the greatest optimism regarding the level of orders and employment in
2008. According to the survey, 76.3% expect an increase in the number of orders this
year, while 0.9% believes the number of orders will decrease. From the surveyed
Brazilian companies, 54.2% plan on hiring more employees, a percentage well above that
from China, where 31% of the companies intend to increase the number of employees this
year. The manufacturing sector of the four countries is also optimist in relation to the
perspective of revenues for the next 12 months: 71.1% of the companies expect growth.
The belief in the gaining of new customers and new orders is the main factor that leads
the companies of the four countries to bet on the increase of the revenues, followed by the
perspective of launching new products and innovations, and and to bet on the increase of
efficiency and management of costs. The Russian companies are the most optimist ones
(81%), followed by the Brazilian ones, with 74.9%.
About 80 percent of organizations surveyed agreed that they will sell their products in
BRIC countries. About 67 percent of executives interviewed revealed that globalization is
helpful as this will provide them an option of entering into markets of BRIC countries;
only 12 percent of the executives interviewed revealed that globalization has negative
impacts on their organizations.
A majority of the executives plan to sell their products in China, which has a huge
population. About 80 percent of the organizations are implementing strategies to target
the Chinese market, while about 55 percent plans to do so in the next few years. About 64
percent of the organizations agreed that India offers ‘significant market opportunities’,
while less than 50 percent agreed for it in the Brazilian and Russian markets
First, for the first time in recent memory, BRICs are growing not by borrowing, but by
investing. China has the world's highest savings rate. Russia is sitting on huge foreign
currency reserves, thanks to windfalls from oil profits. Even freewheeling Brazil is
showing heretofore unseen discipline by running a fiscal surplus.
Second, soaring commodity prices have put more money in BRICs’ pockets than ever
before. That means much less danger of a financial meltdown like the ones Brazil and
Russia had the 1980s and 1990s.
Finally, higher credit ratings mean that BRICs today can issue debts in their own
currencies. The result? Much more stable economic expansion and financing of
investment that depends on the whims of foreign investors.
Rising economies Brasil, Russia, India and China have decided to gradually intensify
cooperation beginning with consultations at the ambassadorial level and then moving on
to political level.
Consultations will focus on issues of mutual interest in the international arena as also
those relating to trade, development and financial system.The decision was taken during a
ministerial meeting of the four countries on Monday on the sidelines of the ongoing
United Nations General Assembly session.
External Affairs Minister Pranab Mukherjee, who is leading the Indian delegation at the
UNGA, had a series of bilateral meetings with his counterparts during which international
issues as also those of mutual interest came up.
During a meting with Afghan Foreign Minister Rangin Sapanta, Mukherjee reiterated
India's firm commitment to assist Afghanistan in its efforts to rebuild its economy,
especially in infrastructure, and to support capacity building programmes aimed at
"Afghan-isation."
The two foreign ministers also reviewed "excellent" bilateral relations and discussed the
security situation in Afghanistan. They agreed that it posed a "significant challenge,"
officials said.Besides the Afghan foreign minister, Mukherjee also had in-depth
discussions on issues of mutual interest with the foreign ministers of Algeria, Singapore,
Cuba, Slovakia, the UAE, Slovenia and Canada. During their discussions, Mukherjee and
Algerian Foreign Minister Mourad Medelci agreed on the need to expand bilateral
cooperation, focusing in particular on the economic relationship.
In his meeting with Cuba's Foreign Minister Felipe Perez Roque, Mukherjee sought and
received a briefing on the health of Cuban leader Fidel Castro, officials said but gave no
further details.
The two ministers noted that the excellent bilateral relationship had developed over the
years with contacts at the highest levels, and they also recalled that Prime Minister
Manmohan Singh had called on Castro in September 2006, on the sidelines of the summit
meeting of the Non-Aligned Movement in Havana.
SECONDARY DATA
My study is based only on secondary data collected from multivariate websites . A
large number of online & published reports have been studied to analyze the growth
forecaste of BRIC countries. As nature of my study only needs secondary data which
is as follows:
Data pertaining to foreign investment in India has been acquire from the site
of….etc
Some facts & figures from journals, books, newspapers and magazines like
Deal maker, Business World, Economic Times, Times of India, Hindustan
Times,Financial Express, Business Today, Business Line etc.
BIBLIOGRAPHY
http:// reuters.com
http:// businessmonitor.com
http:// www.cia.gov
http:// /en.wikipedia.org/wiki/BRIC
http:// www.indiaretailing.com/emerging-markets.asp
http://www.business-standard.com
http:// http://www.marketwatch.com
http:// greenlightadvisor.com/glablog
http://
http://
www.
http:/
http://
Currency (code): Indian rupee yuan (CNY); real (BRL) Russian ruble
(INR) (RUR)
Exchange rates: 39.40 per dollar 7.5 per dollar 1.8 per dollar 24.4 per dollar
Forex Reserve $ 250 billion $1.4 trillion $168 Billion. $463.5 billion
GDP contribution
100% 4
15 11 14
80% 20 40
29
49 Agriculture
60%
industry:
40%
66 Service
56 56
20% 40
0%
India China Brazil Russia
Countries
12 10.9
10
8
5.7
% 6
4
4
1.6
2
0
Russia Brazil India China
Countries
10
7.5
8
6
4
% of GDP
2
0 Series1
-2 Russia China Brazil India
-4 -1.3 -3.3
-6
-8
-10 -7.7
Countries
40 37.8
35 30.8
30
% of GDP
25
20 17.3 Series1
15 9.7
10
5
0
Brazil Russia China India
Countries
80 74.9
67
70
60
50
40 Series1
%
30
17.9
20 12.8
10
0
Brazil India China Russia
Countries
China has emerged as the worlds manufacturing hub, while India has come on very strong
as its counterpart hub in services, both providing Western firms access to inexpensive
educated and -or- highly-skilled labour. Russia, under Putin, has successfully emerged as
a highly profitable energy and raw materials producer, second in oil and gas reserves to
Saudi Arabia. Brazil has changed the regional balance in the Americas by turning itself
into the winds of east-west trade in hard and soft commodities and using its strength to
bolster its new economic clout in relation to North America