The Embassy of Iceland in India

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
GDP Growth
12.00% 10.00% 8.00% 6.70% 6.00% 4.00% 2.00% 0.00% 2005 - 2006 2006 - 2007 GDP Growth 2007 - 2008 2008 - 2009 9.50% 9.70% 9.00%

00% 0.00% 2.10% 7.00% -8.80% -3% China EU US Japan 5.00% India -2.00% 4.World Bank Growth Forecast For 2009 GDP Growth 8.00% India China EU US Japan -6.00% -4.00% 6.5% -6.00% -4.20% .

90% 9.07 4% 11% 11.60% 2006 .60% 3.2008 Indicators Agri & Allied Industry Services 2005 -06 5.90% 8.10% 10.80% 10.08 4.70% .20% 10.90% 2008 -09 1.30% 17% Agriculture Industry Growth in sectors 2005 .GDP Composition by Sector (2008 ± 2009) 25% Services 57.20% 2007 .

Services .  Top 5 Sector attracting FDI are: .07 2007 .8  World Investment Report 2008 from UNCTAD affirms India as the second most attractive FDI destination in the world.5 34. 9 2005 -06 2006 .Construction sectors  FDI is open to almost all sectors.Telecom .08 2008 -09 US $ Billion .Housing & Real Estate .4 22.Computer ± Software & Hardware .India: An Attractive Investment Destination Foreign Direct Investment 45 40 35 30 25 20 15 10 5 0 41.

7 13. .  65% of ODI was routed through tax-friendly countries.1 5.08 2008 -09  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 .07 US $ Billion 2007 .04 2005 -06 2006 .India Overseas Direct Investment (ODI) 20 18 16 14 12 10 8 6 4 2 0 18.4 17.

acquires REpower USD 1.1 billion Hindalco acquired Novelis Inc.58 billion Suzlon Energy Ltd. Tata Steel buys Corus Plc USD 12.Major M&A Deals Undertaken Abroad by India Inc. USD 6 billion Essar Steel acquired Algoma Steel USD 1.6 billion Videocon Industries acquired Daewoo Electronics Corporation Limited USD 730 million .

905 billion Mylan Laboratories acquired a majority stake in Matrix Laboratories USD 0.Major M&A and Investments Announcements in India Vodafone buys Hutch USD 11 billion Plans to spend on its development operations in India over the next four years USD 1.14-percent stake USD 0.74 billion . real estate. and private wealth management USD 1 billion Aditya Birla Group increased its stake in Idea Cellular by acquiring 48. USD 0.98 billion Renault.7 billion Plans investment in private equity. Nissan and Mahindra & Mahindra has initiated a Greenfield automobile plant project in Chennai.

2 151.9 199.6 280. .8 March 1991 March 2006 March 2007 March 2008 March 2009 Sep 2009 US $ Billion  Increase in FDI and FII has facilitated an increase in forex reserves.98 5.Movement of India¶s Foreign Exchange Reserve Foreign Exchange Reserve 350 300 250 200 150 100 50 0 309.  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.7 251.

2008 BSE Sensex  The Sensex breached the 17000 mark on 30th September 2009 as FII inflows continued to flood the market. 2008 23 July. 1990 17 Oct. 2009 6 July. 2009 30 Sep. 2008 15 Jan. 2002 18 May. 2006 25 Jul.India: Vibrant Capital Market BSE Sensex 25000 20000 15000 10000 5000 0 18 Dec. 2008 11 Feb. 2007 7 Feb. 2009 8 Jan. This level was last seen in May 2008. 2009 7 Sep. 1992 22 Jan. . 2008 23 Jul.

4 90.07 Export * All figures in US $ Billion 2007 .09 57.09 149.1 185.2 103.7 44.06 2006 .08 Import 2008 .5 51.India: Foreign Trade India¶s Merchandise Exports/Imports 287.08 Import 2008 .07 Export * All figures in US $ Billion 2007 .2 India¶s Services Exports/Imports  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.6 126.3 163 251 168.06 2006 .8 80 60 40 20 0 2005 .  Quality and cost advantage are two important parameters leveraged by the Indian producers to market their products and services .5 52.7 120 100 73.1 101.8 300 250 200 150 100 50 0 2005 .3 34.

53 17. raw hides and skins. saddles and harness. games and sports requisite etc. rubber and leather articles.78 13. .77 17.13 2004-05 2. animal hairs.21 2005-06 6.3 12. toys.55 Main Export items: Animal and vegetable fats and oils. iron and steel. machinery and mechanical appliances etc. organic & inorganic chemicals.37 2006-07 3.6 27. Main Import items: Organic chemicals.Merchandised Trade between Iceland & India Particulars Export Import Total Trade * All figures in US $ Million 2003-04 9.73 11.21 2007-08 3.48 15.91 15.05 19. apparels and clothing accessories.32 13. pharma products.

second largest among the emerging economies.06 2004 .05 2003 .  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.04 2002 .  It witnessed a CAGR of approximately 29 per cent from 2002±03 to 2007±08.10 (E) 2006 .07 2005 . Revenues of Indian Telecom Industry: 2002-10 2009 .Indian Telecom Industry  Fifth-largest telecom network in the world.03 0 11 10 9 10 20 US $ Billion 30 40 50 15 20 43 .

42 104. India had a teledensity of 28.2 per cent.22 76.6 per cent from June 2004 to June 08.33 per cent.33 .Indian Telecom Industry  The mobile subscriber base in India is likely to reach 500 million by 2010.04 9.  The subscriber base grew at a CAGR of 43.96 19.  On an average. Tele-density in the rural areas is even lower at 9.  The government is promoting telecom manufacturing by providing tax sops and establishing telecom-specific SEZs. 30 20 10 0 2004 2005 2006 Per Cent 2007 2008 7. over 8 million users are added per month.01 153.79 225.61 13. making India the world¶s fastest growing wireless services market.53 100 200 300 400 Subscribers in Million Teledensity in India 28.  As on June 2008.86 2008 2007 2006 2005 2004 0 Telecom Subscriber Base in India 325.

66 million in June 2008.84% 7. .  BSNL is the largest Internet Service Provider followed by MTNL.47% 50.96% 16.Indian Telecom Industry Top Five Internet Service Providers by Market Share (as on June 2008) 4.22 million in June 2007 to 11.49% BSNL MTNL Bharti Airtel Reliance Sify  The total number of internet subscribers grew from 9.07% 7.

.00% 9% 2% 1% 15.00% 18.00% 24.Market Share of Wireless Operators in India (as of June 2008) 9% 4% 1.00% 17.00% BSNL Idea MTNL TATA Bharti Airtel Aircel Reliance Spice Vodafone Others  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. advertising. mobile commerce applications which will improve margins over current SMS value added services. 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.  Participating in trade exhibitions such as India TelecomInternational Exhibition & Conference will provide the right exposure for Icelandic companies to enter the Indian telecom sector. .

Indian Energy Sector Installed capacity: 145. wind energy dominates the renewable power generation in India .440 MW as on September 2008.  Besides hydro energy. 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.

000 kwh ± 157 GW ± USD 100 Billion ± USD 50 Billion ± USD 50 Billion .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.

015 21.180 N.423 19.245 41.110 78.2007 2007 . .Indian Energy Sector Capacity Addition ± Targets & Achievements Five Year Plan Eighth Plan Ninth Plan Tenth Plan Eleventh Plan Year 1992 .538 40.1997 1997 .2012 Target 30.*  In the first 2 years of the Eleventh Five Year Plan only 12500 MW was added.A.  The current power shortfall in India is 15000 MW.2002 2002 .577 Achievement 16.

 The government has fixed a target to add 1400 MW during the 11th Plan (2007-12).Indian Energy Sector Small Hydro Project (SHP) upto 25 MW  Total installed capacity of Hydro Power in India ± 36.77 . Year 2007-08 2008-09 Target (in MW) 200 250 Capacity addition during the year (in MW) 205.  An estimated potential of about 15.  India¶s exploitable Hydro Electric potential is estimated to be 150.93 Cumulative SHP installed capacity 2180.305.47 MW for projects up to 25 MW capacity.000 MW.000 MW of SHP exist in India. Ministry of New & Renewable Energy identified 5415 potential sites with an aggregate capacity of 14.84 2429.348 MW. So far only 23% of this potential has been harnessed.25 248.

Indian Energy Sector State Wise Identified Small Hydel Sites And Potential Up To 25 MW Capacity (as on 31.3.97 110.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 99 253 113 102 552.1 229.84 213.16 708.58 109.81 .05 2268.04 213.72 208.1 196.58 762.95 643.41 1411.29 1333.1 400.2009) S.75 706.62 9.

16 1609.2009) S.31 46.98 295.79 7.86 292.91 14305.47 390.3.02 63.47  23 States have commercial SHP participation.Indian Energy Sector State Wise Identified Small Hydel Sites And Potential Up To 25 MW Capacity (as on 31. announced policies projects through for setting up private sector .25 393.54 499.17 265.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) 166.94 196.

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.  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.Indian Energy Sector ± Geothermal Energy  International consultant.

etc. Embassy of Iceland in India can assist Icelandic companies to approach the concerned State Governments. Recommendations:  As most renewable energy projects in India are with the State Governments.  It would be beneficial for Icelandic energy companies to participate in trade exhibitions such as the Renewable Energy India Expo.  The Embassy can also facilitate link-ups with Indian energy companies for possible JVs. OREDA. .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.

8 Domestic .5 per cent in 2008.  Contribution of IT/ITeS industry to India¶s GDP has grown from 1.  BFSI vertical continues to account for the largest share of exports at 31 per cent.2 per cent in 1998 to an estimated 5.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. Telecom vertical accounts for second largest share of the pie at 19 per cent.2 40. Exports Revenue segmentation of IT/ITeS sector in 2008 (US$) 23.

 Hardware accounted for about 50 per cent of the total domestic IT-BPO spend.Indian IT & IT Enabled Services Sector IT/ITeS industry: On a steady growth track  Size of the domestic market in 2008 was US$ 23.5 Hardware IT Services Software BPO .6 2.2 billion.2 11.  Direct employment for four million and indirect employment for 10 to 12 million by 2015.9 Indian domestic market. 7. 2008 (US$ billion) 1.

 British Telecom awarded a US$1 billion contract to Tech Mahindra. Wipro. Patni Computer Systems. Infosys. I-Flex solutions Ltd.  GM awarded Wipro a 5-year contract valued at US$300 million  ABN AMRO awarded a US$500 million 5-year contract to TCS.2 billion IT & operations support deal from the Nielsen Company. HCL Technologies.  Infosys won US$250 million outsourcing deal from Philips Electronics. Infosys & Patni Computers. L&T Info Tech Ltd and Polaris Ltd. Large Off-Shoring Contracts  TCS won a US$1. Tech Mahindra.Indian IT & IT Enabled Services Sector Key Indian IT Players in the Sector  Tata Consultancy Services. .

000 technical graduates per annum.000 are engineers  Over 50.000 MBAs graduating per annum  Leading firms add more than 10.000 new employees per annum Global and 24/7 delivery capability . general and administrative costs approximately 80 per cent of comparable cost in EU  Average offshore billing rate of US$ 20 to 35 per hour. of which 4.00. about 50 to 70 per cent lower than EU Ease of scalability  675.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.

It is currently growing at 20 per cent. with niche verticals like healthcare and retail fast gaining traction apart from the traditional verticals of BFSI and manufacturing .Indian IT & IT Enabled Services Sector Key Opportunities Domestic Market  Overall size of the domestic market in 2008 was US$ 23.2 billion.  Government is taking up e-governance initiatives and increasing its IT spends/outlays  Demand for domestic BPO services increasing rapidly.  Domestic IT market is dominated by the hardware spending accounting for over 50 per cent of the total spending.

construction. aerospace. . Engineering services outsourcing  Range of services includes engineering and designing solutions across diverse industry verticals like telecommunications. business & technical analysis. Legal Process Outsourcing  Over 1 million lawyers and over 70. utilities and industrial design.000 law graduates passing out every year. etc. animation and design. automotive.Indian IT & IT Enabled Services Sector Key Opportunities Knowledge Process Outsourcing (KPO)  KPO opportunities exist in R&D. business market research. 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).

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. 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. migrating from the back-room services off-shoring. . Testing services outsourcing  Indian export revenues from software testing services were estimated at US$ 385 million in 2006-07.

FICCI & CII can facilitate meetings & link-ups with Indian companies.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. Business Consultants.  Icelandic companies can showcase their products & services by participating in trade exhibitions like Convergence India. .  Trade associations like NASSCOM.

Product Milk Fruits & Vegetables Livestock Poultry Food Grain Fish Quantity 90 million tonnes 150 Million tonnes 485 million 489 Million 204 million tonnes 7.  Sector declared high priority by the government and has set a target to double process food production by 2015.  India accounts for only 1.5% of the international food trade.  Huge investment opportunities in food processing technology and equipments.  Only 2% of agri-produce is processed. .Indian Food Processing Sector India is the world¶s second largest producer of food.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.

 India has diverse agro-climatic conditions and has a large and diverse raw material base suitable for food processing. packaging. meat. leading to tremendous new opportunities for exploiting the large latent market.  Excellent opportunities exist in fruit & vegetable processing. . increase literacy and rising per capita have all cause rapid growth and changes in demand patterns. milk products. An average Indian spends about 50 per cent of household expenditure on food items. fish & poultry processing. convenience food & drinks.Indian Food Processing Sector Advantage India: Food Processing  One of the largest producer of food in the world.  Rapid urbanization.  India¶s comparatively cheaper workforce can be effectively utilized to setup large low cost production bases for domestic and export markets.

8 9 8.7 2. Of Feature Films Theatre Admissions Produced (In Million) Average Ticket Rate (US$) 1132 520 418 400 240 185 173 155 113 102 3290 1364 161 196 190 129 108 112 151 164 0.2 11. Japan and China combined.2 8.5 5. .5  Indian film Industry is the World¶s largest in terms of films produced as well as the number of cinema-goers. It produces almost as many films as the US.9 9.Indian Film Industry India dominates world of Films Country India US Japan China France Germany Spain Italy Rep of Korea UK No.4 8.5 7.

 Recent Collaboration: .  The number of countries wooing Bollywood is increasing.Warner bros is currently funding film projects.11 billion and projects its growth at 9. .Dreamworks Studios and Reliance ADA Group production deal valued at USD$ 825 Million . .Walt Disney and Yash Raj Films are partnering to produce animated films. 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.1% till 2013.  Opening of the film industry to foreign investment has led to many global production units entering the industry. .Indian Film Industry  FICCI-KPMG study values the Indian Film Industry at USD$ 2.

Thank you .