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India: Opportunities Unlimited
5 November 2009 Rahul Chongtham Trade Representative
India : Basic Facts
India is a union of states with Parliamentary system of Govt. 28 States & 7 Union Territories Land Area: 3.29 Million sq.km Population: 1.2 Billion Language: English & Hindi Independence Day: 15 August 1947 Republic Day: 26 January 1950 GDP (PPP) – US$ 3.29 trillion (2008 est.) GDP (Official exchange rate) – US$ 1.21 trillion (2008 est.) Age structure: 0-14yrs ( 31%) 15-64 ( 63.6%) 65 years & over ( 5.3%)
India: Fastest Growing Free Market Democracy
World Bank Growth Forecast For 2009 .
GDP Composition by Sector (2008 – 2009) Growth in sectors 2005 .08 4.90% 9.20% 2007 .90% 8.20% 10.2008 Indicators Agri & Allied Industry Services 2005 -06 5.70% .10% 10.60% 3.07 4% 11% 11.90% 2008 -09 1.60% 2006 .80% 10.
Top 5 Sector attracting FDI are: . .Construction sectors FDI is open to almost all sectors.Housing & Real Estate .India: An Attractive Investment Destination World Investment Report 2008 from UNCTAD affirms India as the second most attractive FDI destination in the world.Services .Computer – Software & Hardware .Telecom .
India Overseas Direct Investment (ODI) Increase in India’s ODI is due to large scale acquisitions by Indian companies growing appetite for an overseas presence and hunt for energy assets . 65% of ODI was routed through tax-friendly countries. .
Tata Steel buys Corus Plc Tata Steel buys Corus Plc USD 12.Major M&A Deals Undertaken Abroad by India Inc.1 billion Hindalco acquired Novelis Inc.58 billion Suzlon Energy Ltd.6 billion Videocon Industries acquired Daewoo Videocon Industries acquired Daewoo Electronics Corporation Limited Electronics Corporation Limited USD 730 million . USD 6 billion Essar Steel acquired Algoma Steel Essar Steel acquired Algoma Steel USD 1. acquires REpower USD 1. acquires REpower Suzlon Energy Ltd. Hindalco acquired Novelis Inc.
real estate. real estate.98 billion Renault.14-percent stake USD 0.Major M&A and Investments Announcements in India Vodafone buys Hutch Vodafone buys Hutch USD 11 billion Plans to spend on its development operations in Plans to spend on its development operations in India over the next four years India over the next four years USD 1.14-percent stake Cellular by acquiring 48.74 billion .905 billion USD 0. Mylan Laboratories acquired aamajority stake in Mylan Laboratories acquired majority stake in Matrix Laboratories Matrix Laboratories USD 0.7 billion Plans investment in private equity. Nissan and Mahindra & Mahindra has Renault. Nissan and Mahindra & Mahindra has initiated aaGreenfield automobile plant project in initiated Greenfield automobile plant project in Chennai. and private wealth management private wealth management USD 1 billion Aditya Birla Group increased its stake in Idea Aditya Birla Group increased its stake in Idea Cellular by acquiring 48. Chennai. and Plans investment in private equity.
Movement of India’s Foreign Exchange Reserve Increase in FDI and FII has facilitated an increase in forex reserves. . It offers adequate security against any possible currency crisis or monetary instability. Increase Forex Reserves has enabled prepayment of certain high cost foreign currency loans of the government.
This level was last seen in May 2008. .India: Vibrant Capital Market The Sensex breached the 17000 mark on 30th September 2009 as FII inflows continued to flood the market.
India: Foreign Trade India’s Merchandise Exports/Imports India’s Services Exports/Imports * All figures in US $ Billion * All figures in US $ Billion Petroleum products are the major contributors towards India’s growing imports Services sector has been a major contributor for the increase in exports from India. Quality and cost advantage are two important parameters leveraged by the Indian producers to market their products and services .
raw hides and skins.37 2006-07 3. pharma products. organic & inorganic chemicals. Main Import items: Organic chemicals. machinery and mechanical appliances etc.6 27.13 2004-05 2. rubber and leather articles.21 2005-06 6. toys.55 Main Export items: Animal and vegetable fats and oils.77 17.32 13. .05 19.48 15.78 13. games and sports requisite etc.Merchandised Trade between Iceland & India Particulars Export Import Total Trade * All figures in US $ Million 2003-04 9.53 17.73 11. iron and steel. apparels and clothing accessories. saddles and harness.91 15.3 12. animal hairs.21 2007-08 3.
second largest among the emerging economies. It witnessed a CAGR of approximately 29 per cent from 2002–03 to 2007–08. . The Indian telecom industry generated revenues of approximately US$ 32 billion in 2007–08 with a growth rate of 60 per cent over previous year.Indian Telecom Industry Fifth-largest telecom network in the world.
.2 per cent. Tele-density in the rural areas is even lower at 9.33 per cent. On an average. over 8 million users are added per month. The government is promoting telecom manufacturing by providing tax sops and establishing telecom-specific SEZs.Indian Telecom Industry The mobile subscriber base in India is likely to reach 500 million by 2010.6 per cent from June 2004 to June 08. making India the world’s fastest growing wireless services market. India had a teledensity of 28. The subscriber base grew at a CAGR of 43. As on June 2008.
22 million in June 2007 to 11.Indian Telecom Industry Top Five Internet Service Providers by Market Share (as on June 2008) The total number of internet subscribers grew from 9. .66 million in June 2008. BSNL is the largest Internet Service Provider followed by MTNL.
.Market Share of Wireless Operators in India (as of June 2008) Bharti Airtel has crossed 100 Million subscriber mark in May 2009.
Opportunities for Telecom Companies 3G Services Worldwide Interoperability for Microwave Access (WiMax) Managed Service Virtual Private Network Enterprise Telecom Services Rural Telephony Value-Added Services .
The Embassy of Iceland in India can assist Icelandic companies to market their products and services as well as identify potential Indian partners for JVs. gaming. mobile commerce applications which will improve margins over current SMS value added services. Participating in trade exhibitions such as India TelecomInternational Exhibition & Conference will provide the right exposure for Icelandic companies to enter the Indian telecom sector. advertising. Demand for good VAS content providers from mobile operator is expected to increase when the 3G spectrum rolls out early next year. .IndianTelecom Industry Recommendations The VAS segment will offer ample opportunities to Icelandic companies keen on tapping this sector. We will see more VAS in banking.
Indian Energy Sector Installed capacity: 145.440 MW as on September 2008. Thermal Hydro Other Renewables Nuclear State Sector Central Sector Private Sector - 64% 25% 8% 3% 53% 34% 13% Coal is the dominant source contributing 53% of the energy generation in the thermal segment. wind energy dominates the renewable power generation in India . Besides hydro energy.
Indian Energy Sector Projected Growth Present Per capita Consumption Per capita Consumption by 2012 Peak demand Estimation by 2012 Investment requirement by 2012 Generation Transmission & Distribution Power for all by 2012 – 631 kwh – 1.000 kwh – 157 GW – USD 100 Billion – USD 50 Billion – USD 50 Billion .
A. The current power shortfall in India is 15000 MW.2007 2007 .1997 1997 .Indian Energy Sector Capacity Addition – Targets & Achievements Five Year Plan Eighth Plan Ninth Plan Tenth Plan Eleventh Plan Year 1992 .180 N.110 78.538 40.245 41.2002 2002 .423 19.577 Achievement 16.* In the first 2 years of the Eleventh Five Year Plan only 12500 MW was added.015 21. .2012 Target 30.
305.77 .25 248. India’s exploitable Hydro Electric potential is estimated to be 150. Ministry of New & Renewable Energy identified 5415 potential sites with an aggregate capacity of 14.000 MW.93 Cumulative SHP installed capacity 2180. The government has fixed a target to add 1400 MW during the 11th Plan (2007-12).000 MW of SHP exist in India. Year 2007-08 2008-09 Target (in Capacity addition MW) during the year (in MW) 200 250 205.348 MW.84 2429. An estimated potential of about 15.Indian Energy Sector Small Hydro Project (SHP) upto 25 MW Total installed capacity of Hydro Power in India – 36.47 MW for projects up to 25 MW capacity. So far only 23% of this potential has been harnessed.
75 706.1 400.58 762.97 110.1 196.95 643.Indian Energy Sector State Wise Identified Small Hydel Sites And Potential Up To 25 MW Capacity (as on 31.16 708.2009) S.41 1411.05 2268.29 1333.62 9.No 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 Name of State Andhra Pradesh Arunachal Pradesh Assam Bihar Chhatisgarh Goa Gujarat Haryana Himachal Pradesh Jammu & Kashmir Jharkhand Karnataka Kerala Madhya Pradesh Maharashtra Manipur Meghalaya Identified Total Capacity ( In Number of Sites MW) 489 566 60 94 164 9 292 33 547 246 103 128 247 99 253 113 102 552.81 .1 229.84 213.58 109.72 208.04 213.3.
47 390.79 7.No 18 19 20 21 22 23 24 25 26 27 28 29 Name of State Mizoram Nagaland Orissa Punjab Rajasthan Sikkim Tamil Nadu Tripura Uttar Pradesh Uttaranchal West Bengal A&N Island TOTAL Identified Number of Sites 75 99 222 234 67 91 176 13 220 458 203 12 5415 Total Capacity ( In MW) 166.25 393.98 295.16 1609.2009) S.86 292.91 14305.02 63.3. .31 46.94 196.47 23 States have announced policies for setting up commercial SHP projects through private sector participation.17 265.Indian Energy Sector State Wise Identified Small Hydel Sites And Potential Up To 25 MW Capacity (as on 31.54 499.
Indian Energy Sector – Geothermal Energy Indian Geothermal provinces can produce up to 10600 MW of power. Government has identified 340 hot springs in the country and are planning to develop some of the Geothermal fields for power generation. .
GeothermEx Inc. USA has identified has identified 6 most promising Geothermal sites for development in order of the following ranking: Tattapani in Chhatisgarh Puga in Jammu & Kashmir Cambay Graben in Gujarat Manikaran in Himachal Pradesh Surajkund in Jharkhand Chhumanthang in Jammu & Kashmir National Hydro Power Corporation (NHPC) has been appointed by the government as the nodal agency to promote geothermal energy in India.Indian Energy Sector – Geothermal Energy International consultant.. Chhatisgarh Renewable Energy Development Agency (CREDA) is currently developing the Tattapani geothermal site. NHPC plans to develop 2 to 5 MW geothermal power plant at Puga. .
OREDA. The Embassy can also facilitate link-ups with Indian energy companies for possible JVs.Indian Energy Sector Key Players (i) National Hydro Power Corporation (ii) Tata Power (iii) Reliance Power (iv) Jaiprakash Hydro Power (v) L&T (vi) Bhilwara Energy (vii) Athena Energy & (viii) State renewable energy agencies such as CREDA. It would be beneficial for Icelandic energy companies to participate in trade exhibitions such as the Renewable Energy India Expo. Embassy of Iceland in India can assist Icelandic companies to approach the concerned State Governments. . etc. Recommendations: As most renewable energy projects in India are with the State Governments.
.5 per cent in 2008. Telecom vertical accounts for second largest share of the pie at 19 per cent.Indian IT & IT Enabled Services Sector IT/ITeS industry: On a steady growth track Total IT revenues reached US$ 64 billion in 2008-09 growing at 33 per cent over previous year.2 per cent in 1998 to an estimated 5. BFSI vertical continues to account for the largest share of exports at 31 per cent. Contribution of IT/ITeS industry to India’s GDP has grown from 1.
Direct employment for four million and indirect employment for 10 to 12 million by 2015.Indian IT & IT Enabled Services Sector IT/ITeS industry: On a steady growth track Size of the domestic market in 2008 was US$ 23. Hardware accounted for about 50 per cent of the total domestic IT-BPO spend. Indian domestic market. 2008 (US$ billion) .2 billion.
GM awarded Wipro a 5-year contract valued at US$300 million ABN AMRO awarded a US$500 million 5-year contract to TCS. I-Flex solutions Ltd. .Indian IT & IT Enabled Services Sector Key Indian IT Players in the Sector Tata Consultancy Services. Large Off-Shoring Contracts TCS won a US$1. HCL Technologies. Wipro. Patni Computer Systems.2 billion IT & operations support deal from the Nielsen Company. British Telecom awarded a US$1 billion contract to Tech Mahindra. Infosys & Patni Computers. L&T Info Tech Ltd and Polaris Ltd. Tech Mahindra. Infosys. Infosys won US$250 million outsourcing deal from Philips Electronics.
000 technical graduates per annum.000 are engineers Over 50.000 new employees per annum Global and 24/7 delivery capability .00. about 50 to 70 per cent lower than EU Ease of scalability 675.000 MBAs graduating per annum Leading firms add more than 10. general and administrative costs approximately 80 per cent of comparable cost in EU Average offshore billing rate of US$ 20 to 35 per hour.Indian IT & IT Enabled Services Sector India: Value proposition Cost advantage Cost of an engineer is about 20 – 40 per cent of comparable cost in European Union (EU) Selling. of which 4.
2 billion. Domestic IT market is dominated by the hardware spending accounting for over 50 per cent of the total spending. with niche verticals like healthcare and retail fast gaining traction apart from the traditional verticals of BFSI and manufacturing . It is currently growing at 20 per cent.Indian IT & IT Enabled Services Sector Key Opportunities Domestic Market Overall size of the domestic market in 2008 was US$ 23. Government is taking up e-governance initiatives and increasing its IT spends/outlays Demand for domestic BPO services increasing rapidly.
aerospace. animation and design. automotive. business & technical analysis. Engineering services outsourcing Range of services includes engineering and designing solutions across diverse industry verticals like telecommunications.000 law graduates passing out every year. Cost arbitrage -Indian lawyers billing one-tenth of their US counterparts (US$ 40 to $60 in India compared to US$ 350 per hour in the US). construction. . business market research. etc.Indian IT & IT Enabled Services Sector Key Opportunities Knowledge Process Outsourcing (KPO) KPO opportunities exist in R&D. utilities and industrial design. Legal Process Outsourcing Over 1 million lawyers and over 70.
migrating from the back-room services off-shoring. Top 10 companies contributed 85 per cent to segment revenues. . Software products Indian software products segment presently forms a very small percentage of the overall Indian IT-ITeS industry. Testing services outsourcing Indian export revenues from software testing services were estimated at US$ 385 million in 2006-07.Indian IT & IT Enabled Services Sector Key Opportunities Research and analytics India emerged as the choice destination for their front-end research and analysis divisions.
Trade associations like NASSCOM. Business Consultants. FICCI & CII can facilitate meetings & link-ups with Indian companies. Icelandic companies can showcase their products & services by participating in trade exhibitions like Convergence India.Indian IT & IT Enabled Services Sector Recommendations Embassy of Iceland in India can assist Icelandic companies to market their products & services to the fast growing Indian domestic market. Indian Embassy in Iceland can be approached for information on government projects such as National e-Governance Plan. .
Sector declared high priority by the government and has set a target to double process food production by 2015.5 million tonnes Rank Highest in the world 2nd largest Largest 3rd largest 3rd largest Size of the food processing sector was USD$ 70 Billion in 2005 and is expected to reach USD$ 90 Billion in 2012. Only 2% of agri-produce is processed. Product Milk Fruits & Vegetables Livestock Poultry Food Grain Fish Quantity 90 million tonnes 150 Million tonnes 485 million 489 Million 204 million tonnes 7. India accounts for only 1.5% of the international food trade. . Huge investment opportunities in food processing technology and equipments.Indian Food Processing Sector India is the world’s second largest producer of food.
India’s comparatively cheaper workforce can be effectively utilized to setup large low cost production bases for domestic and export markets. leading to tremendous new opportunities for exploiting the large latent market. milk products. increase literacy and rising per capita have all cause rapid growth and changes in demand patterns. fish & poultry processing. Excellent opportunities exist in fruit & vegetable processing.Indian Food Processing Sector Advantage India: Food Processing One of the largest producer of food in the world. An average Indian spends about 50 per cent of household expenditure on food items. convenience food & drinks. Rapid urbanization. packaging. . meat. India has diverse agro-climatic conditions and has a large and diverse raw material base suitable for food processing.
5 7. Of Feature Films Theatre Admissions Produced (In Million) Average Ticket Rate (US$) India US Japan China France Germany Spain Italy Rep of Korea UK 1132 520 418 400 240 185 173 155 113 102 3290 1364 161 196 190 129 108 112 151 164 0. Japan and China combined.9 9.2 8.7 2. . It produces almost as many films as the US.8 9 8.Indian Film Industry India dominates world of Films Country No.4 8.5 Indian film Industry is the World’s largest in terms of films produced as well as the number of cinema-goers.5 5.2 11.
1% till 2013. .Walt Disney and Yash Raj Films are partnering to produce animated films.Warner bros is currently funding film projects. Opening of the film industry to foreign investment has led to many global production units entering the industry.Dreamworks Studios and Reliance ADA Group production deal valued at USD$ 825 Million . . The number of countries wooing Bollywood is increasing. Exotic locations experienced film crews and tax breaks are amongst the incentives being offered by these countries.Sony pictures entertainment recently co-produced a film with SCB Films.11 billion and projects its growth at 9. Recent Collaboration: . .Indian Film Industry FICCI-KPMG study values the Indian Film Industry at USD$ 2.
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