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An URGE to Invest in INDIA

Presented by :
Sharanjeet Singh (50701517)
- Biotechnology
- Banking
- Telecommunication
- Power

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What is the India story?

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Average annual GDP growth (%)
(%)
10
100
9.0
8 80
8.0 80
6.0 65
6
60 52
4 3.5
1.0 40
17
2
20
0
0
1900-1950 1950-1980 1980-2002 2002-2006 2006-2008
1950 1980 2000 2010

Poverty is declining Middle class is exploding


(%)

50 500
46 400
40
300
30 26
20 200

10 16 100

0 0

1980 2000 2010 (proj) 1980 2000 2010

1% of the people have been crossing poverty line each year for 25 years

Equals ~ 200m 5
Advantage India…
Rated among the most
Rated as the second favourite investment
best destination for destinations (UNCTAD,
manufacturing Largest English JETRO, JBIC,
projects and the most speaking nation in Deutsche Bank, EIU,
attractive investment the world etc.)
destination-IBM One of the lowest
cost destination
in the world

One of the oldest


Largest
stock exchanges
Democracy
in entire Asia Operates under
in the world
Advantage English common
law and based
India on English style
justice system

Superb banking
systems and well Harmonized
developed financial Intellectual
systems. property rights
laws
2nd largest pool
Best technology India has been
of scientists and
licensing regime rated as the most
engineers in the
- UNCTAD’s attractive
World
Global investment
Competitivenes destination for
s Report, 2007 offshoring

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Views…
India has among the highest
India is among the two
returns on foreign
most attractive FDI
investment
destinations in the world

US Department of Commerce
A T Kearney
FDI Confidence Index 2007
By 2032, India will be among the
three largest economies in the world

BRIC Report
Goldman Sachs, October 2006
“India is a developed
country as far as intellectual
“We came to India for the costs, capital is concerned.”
stayed for the quality and are
now investing for innovation.”

Jack Welch
General Electric
- Dan Scheinman, Cisco System Inc. as
told to Business Week, August 2005

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India’s Competitive Advantage vis-à-vis Other Nations

India- Fact File

Quantity and quality of manpower 


Surplus
India

China
Projected
Turkey
Mexico Philippines

workforce Brazil Malaysia Israel
in 2020 
Ireland
Russia

Shortfall
Low People strength High
• Productivity/quality
• Cost
• English language skills

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Source: World Competitiveness Yearbook 2007; Britannica Yearbook, CIA, World factbook, May 2007 ,BCG ; Literature search; E&Y analysis
More sectors opened;
Equity caps raised;
Conditions relaxed;
Foreign Exchange
Management
Up to 100% under
‘Automatic Route’ in
all sectors except
a small negative list
up to 74/51/50%
in 111 Sectors under
‘Automatic Route’
100% in some sectors
Up to 51%
under ‘Automatic
Route’ for
35 Priority Sectors

Allowed selectively
up to 40%

Pre 1991 1991 1997 2000 Post 2000


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Recent policy
changes:
 Ban against using foreign brand name has
been lifted.

Corporate tax for foreign companies reduced


to 41%.

5 year tax holiday extended to


enterprises engaged in infrastructure.

100% FDI for biotech, titanium mining ore.

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Booming Sectors

- BIOTECHNOLOGY
- POWER
- TELECOMMUNICATION
- BANKING

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The Indian Pharmaceutical The domestic market is
industry (including exports) expected to double in
is expected to grow the next 5 years to over
at 23% p.a. till 2010
$10 billion

Opportunities

The Biotech industry


The Biotech industry
is projected to grow
for fresh investment
at a CAGR of 39%
in 5-7 yrs –US$ 2bn

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POLICY

OUTLOOK


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Telecommunication


OUTLOOK

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POWER SECTOR –

PRESENT SCENARIO

The Planning Commission has


estimated that around
India currently has around 78,000 MW of This would require
145,000 MW new power facilities will Investment of around
production capacity be set up over the US$ 73 billion.
next 5 years.
(March 2008).

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India has the fifth largest electricity generation capacity in the world

Opportunities in Generation for:


 
Ultra Mega Power Plants (UMPP) – 6 projects of 4000 MW each 

Coal based plants at pithead or coastal locations (imported coal) 

Natural Gas/CNG based turbines at load centers or near gas


terminals 

Hydel power potential of 150,000 MW is untapped as assessed by the


Government of India

  Renovation, modernization, up-rating and life extension of old


thermal and hydro power plants
 
Private sector participation possible through JV and 100% equity
mode
Total investment opportunity of about US$ 200 billion over a five
year horizon
Total estimated invest opportunities
Of US $150 billion till 2012.
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India
Australia 12
Malaysia 11.8
China 11.5
Korea 11.5
Taiwan 10.5
Singapore
7.8
Philippines
7.5
Japan
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Return on equity
Source jp Morgan

India has higher return on equity than other countries in Asia 18


Is this the right time? … It is

Vibrant
Economy

Booming
Consumerism Time to secure
+
first-mover
advantage in India
Relaxing FDI
norms

Resplendent
Market

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Explore.. Envision.. Invest
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