Market based system

Foreign trade and foreign investment as

integral part if Indian economy

Fastest growing economy

World’s second largest labor force

Centrally planned Economy

Privatebusinesses and capitalism were

suppressed

Privatization of Farmland

Promotion of foreign investment

Flourishing small scale entrepreneurs

0 yrs ago, India and China were among the poorest and economically
most isolated countries in the world.

ow did China and India emerge as

economic giants?
 Low-pri
ced cons
umer go
o ds
& c om p uter
rs
Call cente
engineers
 China – Economic Fact Sheet
GDP – real growth rate:  
9.8% (2008) country comparison to the world:
13% (2007)
11.6% (2006)

GDP-Per capita (PPP-Purchasing power parity):

$6,000 (2008)country comparison to the world:
$5,500 (2007)
$4,900 (2006)
note: data are in 2008 US dollars

GDP – composition by sector:

agriculture: 10.6%
industry: 49.2%
services: 40.2% (2008)
GDP- real growth rate:
6.6% (2008)
9% (2007)
9.6% (2006)

GDP – per capita (PPP – Purchasing power parity)

$2,800 (2008)
$2,700 (2007)
$2,500 (2006)
note: data are in 2008 US dollars

GDP – Composition by sector:

agriculture: 17.2%
industry: 29.1%
services: 53.7% (2008)
Indicators India China
Political System Multi-party One-party
Democracy authoritarian rule
Speed of Growth Economic reforms Economic reforms
started in 1991. started in 1978.
Average 6% growth Average 9.5%
rate in past two growth rate in past
decades. two decades.
Areas of Rising power in Dominant in mass
Specialization software, design, manufacturing,
services, and electronics and
precision industry. heavy industrial
plants
Indicators India China
Gini index 47.0 (up 10 points
(standard 36.8 from 15 yrs ago)
measure of
inequality)
Foreign Direct 6.8% (up from 17.8%
Investment 0.3% in 2004)

Future Areas of R&D, bio- IT business, services

growth technology, high- and continued
value IT enabled manufacturing
services (legal,
medical,
engineering
architecture),
Agriculture
Sector
ndia is an agricultural country.

rowth of service sector is pushing down the contribution of agriculture.

ontributing 17.2% of the GDP.

Largely depends on monsoon.

rovides employment to two-thirds of the total population.

5% of export earnings

ural women play a vital role, 50% of rural labor force.

ields per hectare of crops in India are very low

13.1 : India's Imports and Exports of Agricultural Commodities vis-à-vis
Total National Imports/ Exports During 1990-91 to 2007-08

(Value in Rupees
                Crore)
Year Agriculture Total National %age Agriculture Agriculture Total National %age Agriculture
Imports Imports Imports to Total Exports Exports Exports to Total
        National Imports       National Exports
1 2   3 4 5   6 7
1990-91 1205.86 43170.82 2.79 6012.76 32527.28 18.49
1991-92 1478.27 47850.84 3.09 7838.04 44041.81 17.80
1992-93 2876.25 63374.52 4.54 9040.30 53688.26 16.84
1993-94 2327.33 73101.01 3.18 12586.55 69748.85 18.05
1994-95 5937.21 89970.70 6.60 13222.76 82673.40 15.99
1995-96 5890.10 122678.14 4.80 20397.74 106353.35 19.18
1996-97 6612.60 138919.88 4.76 24161.29 118817.32 20.33
1997-98 8784.19 154176.29 5.70 24832.45 130100.64 19.09
1998-99 14566.48 178331.69 8.17 25510.64 139751.77 18.25
1999-00 16066.73 215528.53 7.45 25313.66 159095.20 15.91
2000-01 12086.23 228306.64 5.29 28657.37 201356.45 14.23
2001-02 16256.61 245199.72 6.63 29728.61 209017.97 14.22
2002-03 17608.83 297205.87 5.92 34653.94 255137.28 13.58
2003-04 21972.68 359107.66 6.12 37266.52 293366.75 12.70
2004-05 22811.84 501064.54 4.55 41602.65 375339.53 11.08
2005-06 21499.22 660408.90 3.26 49216.96 456417.86 10.78
2006-07 29637.86 840506.31 3.53 62411.42 571779.28 10.92
2007-08(P) 29777.01  964849.76 3.09 77769.71  640172.14 12.15
P Provisional
Source : DGCI&S, Ministry of Commerce, Kolkata.
griculture accounted for 10.6 % of the GDP

3o million- over 45% of labor force still makes living from farming.

arming methods have been improved in China.

hina produces wheat, rice, potatoes, peanuts, millet, cotton.

nly 15 percent of the total land available in China can be

cultivated.

ore than 75 percent of the total cultivated land is used for

producing food crops.
 Increases in Output of Major Agricultural Products
(10,000 tons)
Variety 1949 1978 2005

grain 11,318 30,477 50,839

cotton 44.4 216.7 383.1

oil-bearing crops 256.4 521.8 2,601.2

sugarcane 264.2 2,111.6 7,470

sugarbeet 19.1 270.2 864

flue-cured 4.3 105.2 218.5

tobacco
tea 4.1 26.8 67.6

fruit 120.0 657.0 6,237.6

meat 220.0 856.3 5,960.9

aquatic products 45 466 4,122

 Increases in Output of Major Agricultural Products
(10,000 tons)
Variety 1949 1978 2005

grain 11,318 30,477 50,839

cotton 44.4 216.7 383.1

oil-bearing crops 256.4 521.8 2,601.2

sugarcane 264.2 2,111.6 7,470

sugarbeet 19.1 270.2 864

flue-cured 4.3 105.2 218.5

tobacco
tea 4.1 26.8 67.6

fruit 120.0 657.0 6,237.6

meat 220.0 856.3 5,960.9

aquatic products 45 466 4,122

INDUSTRIA
L SECTOR
anufacturing contributes around 15% of GDP of the country.

ccording to CSO data quartely estimate of GDP for

manufacturing stood at 38.1 billion US $.

ccording to the data the cumulative growth in manufacturing

index for April-June has been 3.2%.

n the manufacturing sector the value of new project

announced in 2nd half of 2008-09 stood at 13.2 billion US $.
ndia rank’s among top 12 producers of manufacturing value added
products.

n Textile it ranks 4th after China, US & Italy.

n Electrical machinery & apparatus India ranks 5th.

ndia holds 6th position in basic metals category.

thin Chemicals & chemicals products, 10th in leather & leather

products, 12th in machinery & equipment & motor vehicals.
ccording to CSO the industrial output clocked an annual growth rate of
6.8% in July 2009.

here are many Companies who wants to make India as their

manufacturing hub, they are

LG wants to make India its global manufacturing hub for its mobile
handsets.

Hyundai has make India the manufacturing & exporting hub for its
small cars. Their i10 is being manufactured only in India & exported
to the world.
uxury brands like Louis Vuitton are looking at India as a
manufacturing base for their products.

koda Auto plans to make India its regional manufacturing

hub. Aircraft manufacturing Airbus is considering India as
one of the centres for design & development of its long
haul A350 plane.

amsung plans to invest 100 million US $ in its

manufacturing plant near Chennai & make it its global hub.
uzuki too is making India its manufacturing hub for its small cars.

ccording to Investment Commission of India the manufacturing

sector is estimated to have 180 billion US $ investment
opportunity over next 5 years.

anufacturing sector is the largest employer which employes 25.5

million people of the total workforce.

mployment growth rate is 2.78%

hinese manufacturing sector accounts for 43% of
Chinese economy.

ts economy growth in average of almost 8% every year.

hinese manufacturing sector ranks 4th in the world after

US, Japan, & Germany.
hina’s fast growing domestic market worldwide demand
for Chinese goods & the cost advantage China offers to
manufacturers are fueling the growth of manufacturing
sector in China.

urchasing Manager’s Index (PMI) which measures

manufacturing activity nationwide.

MI index rose to 54 points in August up from 53.3 in July.

hina has 50% share of worldwide camera market.
&
30% of Air conditioners .

5% of Washing Machines & 20% of Refrigerators.

hina’s crude steel production rose by 28.25%.

nvestment in chemical industry grew by 35.9%.

SERVICE
SECTOR
Can be classified into 2 types:
Old
New

Old Services includes:

Petty Trading
Domestic Services
Catering and Hotel Services
ew Services includes:

ommunications

usiness and legal practices

ulture, research and education.

 INDIA v/s China
INDIA CHINA

54 per cent of GDP Below 41 per cent of GDP

Since 1978 to 2008 :

Average Annual Growth rate is 7.0% Average Annual Growth rate is 10.8%

Employment Opportunities :
Low High

Most advanced service sector :

Delhi with a GDP share of 77 per cent Beijing with a GDP share of 61 per cent

A net exporter of services A net importer of services

Service Sectors China India Australia Korea Japan UK US
Finance and Insurance 16.50 13.27 11.83 15.53 9.78 6.89 10.35
Government and Social 8.01 10.78 6.06 10.47 6.72 6.62 10.35
Organizations
Real Estate 6.07 11.64 29.15 22.34 30.66 32.16 30.92
Wholesale, Retail Trade and 23.57 30.39 19.15 17.98 18.54 20.81 20.05
Catering
Transport, 16.96 19.18 12.11 13.09 8.91 10.00 7.89
Telecommunications etc
Transport and Storage 8.76 10.86
Post and 8.20 8.32
Telecommunications
Education, Health, Research 28.87 14.73 21.69 20.59 25.40 23.51 20.44
etc
Education, Culture and Arts 8.71 7.98
Health, Sports and Social 2.96 2.14
Welfare
Scientific Research and 2.25 0.89
Polytechnic
Others 14.95 3.71
Total 100 100 100 100 100 100 100
Year 1 INR = % Change 1 USD = INR % Change I USD = % Change
CYN CYN
2000 0.1910 43.55 8.2798
2001 0.1774 (7.12) 46.75 7.34 8.2773 (0.20)
2002 0.1714 (3.38) 48.28 7.15 8.2766 (0.20)
2003 0.1723 0.52 48.05 (0.47) 8.28 0.40
2004 0.1817 5.45 45.55 (5.20) 8.2767 (0.40)
2005 0.1912 5.22 43.35 (4.83) 8.2765 0.00
2006 0.1796 (6.06) 44.92 3.62 8.0702 (2.50)
2007 0.1764 (1.78) 44.24 (1.51) 7.8051 (3.28)
2008 0.1853 5.04 39.26 (11.08) 7.2755 (6.78)
2009 0.1409 (23.96) 48.41 23.30 6.8225 (6.22)
he forex reserves of the Republic of China amounted to
US$332.24 bn at the end of Sep’09, showing an increase
of US$6.82 bn from the previous month.

he main factors responsible for the increase are:

1. The EUR, JPY and other major currencies appreciated
against the US dollar. Foreign exchange reserves
denominated in these currencies were worth more in
terms of the base currency, the US dollar.
2. Returns from foreign exchange reserves
management.
EFFECTIVE DATE OF ACCOMMODATIONS ACCOMMODATIONS
DISCOUNT
CHANGE WITH COLLATERAL WITHOUT COLLATERAL

2009-02-19 1.25 1.625 3.5

2009-01-08 1.500 1.875 3.750
2008-12-12 2 2.375 4.25
2008-11-10 2.75 3.125 5
2008-10-30 3 3.375 5.25
2008-10-09 3.25 3.625 5.5
2008-09-26 3.5 3.875 5.75
2008-06-27 3.625 4 5.875
2008-03-28 3.5 3.875 5.75
2007-12-21 3.375 3.75 5.625
2007-09-21 3.25 3.625 5.5
2007-06-22 3.125 3.5 5.375
2007-03-30 2.875 3.25 5.125
2006-12-29 2.75 3.125 5
2006-09-29 2.625 3 4.875
ccording to a recent report from international
economic think tanks, India and China soon plans to
form a trade coalition in Asia and that is projected to
boost 65% of world trade by near 2020.Both the
countries India and China are determined to achieve
that and create a huge impact on world economic
bodies.
THANK
YOU