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© Confederation of Indian Industry Confederation of Indian Industry India: Opportunities & Challenges CII Business Delegation to Portugal & Spain 3-9 July 2008 Mr Dipankar Chatterji Mr Dipankar Chatterji Past Chairman, Eastern Region, CII Chairman, CII North East Council and Senior Partner, L B Jha & Co.
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© Confederation of Indian Industry Confederation of Indian Industry India: Opportunities & Challenges CII Business Delegation to Portugal & Spain 3-9 July.

Dec 16, 2015

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Page 1: © Confederation of Indian Industry Confederation of Indian Industry India: Opportunities & Challenges CII Business Delegation to Portugal & Spain 3-9 July.

© Confederation of Indian Industry

Confederation of Indian Industry

India: Opportunities & Challenges

CII Business Delegation to Portugal & Spain3-9 July 2008

Mr Dipankar ChatterjiMr Dipankar ChatterjiPast Chairman, Eastern Region, CII

Chairman, CII North East Council andSenior Partner, L B Jha & Co.

Page 2: © Confederation of Indian Industry Confederation of Indian Industry India: Opportunities & Challenges CII Business Delegation to Portugal & Spain 3-9 July.

© Confederation of Indian Industry

5,000 year old ancient civilization5,000 year old ancient civilization 325 languages spoken – 1,652 dialects325 languages spoken – 1,652 dialects 3.28 million sq. kilometers - Area3.28 million sq. kilometers - Area 7,516 kilometers - Coastline 7,516 kilometers - Coastline 5600 dailies, 15000 weeklies and 20000 5600 dailies, 15000 weeklies and 20000 periodicals in 21 languages with a combined periodicals in 21 languages with a combined circulation of 142 million.circulation of 142 million.

Parliamentary form of GovernmentParliamentary form of Government Worlds largest democracy.Worlds largest democracy. Worlds 4th largest economy.Worlds 4th largest economy.

World-class recognition in IT, bio-technology & World-class recognition in IT, bio-technology & space.space. Largest English speaking nation in the world.Largest English speaking nation in the world.22ndnd largest pool of scientists and engineers in largest pool of scientists and engineers in the World.the World.

India – Introduction

Page 3: © Confederation of Indian Industry Confederation of Indian Industry India: Opportunities & Challenges CII Business Delegation to Portugal & Spain 3-9 July.

© Confederation of Indian Industry

India : Trade

Tata Motors paid $ 113. billion to buy Corus.

Ranbaxy, the largest Indian pharmaceutical company, gets 70% of its $1 billion revenue from overseas operations and 40% from USA.

Tata Tea has acquired Jaguar and Land Rover for 1.5 billion Pound.

India is one of the world's largest diamond cutting and polishing centres, its exports were worth $16 Billion in 2006-07

About 9 out of 10 diamond stones sold anywhere in the world, pass through India.

Wal-Mart sources $1 Billion worth of goods from India - half its apparel. Wal-Mart expects this to increase to $10 Billion in the next couple of years.

The country's foreign exchange reserves stand at an all-time high of $299.15 Billion

Page 4: © Confederation of Indian Industry Confederation of Indian Industry India: Opportunities & Challenges CII Business Delegation to Portugal & Spain 3-9 July.

© Confederation of Indian Industry

India: Self-Reliance

India is among six countries that launch satellites and do so even for Germany, Belgium, South Korea, Singapore and EU countries.

India is among the 3 countries in the World that have built Supercomputers on their own.

India is providing aid to 11 countries, writing-off their debt and loaning the IMF $300M.

It has also prepaid $3Billion owed to the World Bank and Asian Development Bank.

Page 5: © Confederation of Indian Industry Confederation of Indian Industry India: Opportunities & Challenges CII Business Delegation to Portugal & Spain 3-9 July.

© Confederation of Indian Industry

Key Features of the Indian Economy

1. Robust GDP growth (average growth rate of 9.33% over the last 3 years).

2. Manufacturing & Services are leading the way

3. India is emerging as a global manufacturing hub

4. High Skill-level in Labour force

Page 6: © Confederation of Indian Industry Confederation of Indian Industry India: Opportunities & Challenges CII Business Delegation to Portugal & Spain 3-9 July.

© Confederation of Indian Industry

GDP (2007-08)

GDP grew by 9% to US$ 3787.3 billion. (PPP)

Foreign Trade & Reserves

Exports grew by 23.03% to US$155.5 billion

Imports grew by 27.01% to US$235.9 billion

Large and Growing Economy (2006-07)

Page 7: © Confederation of Indian Industry Confederation of Indian Industry India: Opportunities & Challenges CII Business Delegation to Portugal & Spain 3-9 July.

© Confederation of Indian Industry

GDP Composition Undergoing a Drastic Change

1990-91

32%

27%

41%

Agriculture Industry Services

2007-0818%

27%

55%

Source: Reserve Bank of India

Page 8: © Confederation of Indian Industry Confederation of Indian Industry India: Opportunities & Challenges CII Business Delegation to Portugal & Spain 3-9 July.

© Confederation of Indian Industry

Stock Exchange in India

History

•1860, the exchange flourished with 60 brokers. This began when the American Civil War broke and the cotton supply from the US to Europe stopped.

•At the end of the war in 1874, the market found a place in a street (now called Dalal Street).

•In 1887, "Native Share and Stock Brokers' Association" was established. In 1895, the exchange acquired a premise in the street which was inaugurated in 1899.

Page 9: © Confederation of Indian Industry Confederation of Indian Industry India: Opportunities & Challenges CII Business Delegation to Portugal & Spain 3-9 July.

© Confederation of Indian Industry

List of Stock exchanges in India

•Bombay Stock Exchange

- The oldest market in Asia.

- First in India to introduce Equity Derivatives

- First in India to launch a Free Float Index

- First in India to launch US$ version of BSE Sensex

- First in India to launch Exchange Enabled Internet Trading Platform

•National Stock Exchange

- It uses satellite communication technology to energise participation from around 400 cities in India.

- NSE can handle up to 1 million trades per day.

- It is one of the largest interactive VSAT based stock exchanges in the world.

•Regional Stock Exchanges

Page 10: © Confederation of Indian Industry Confederation of Indian Industry India: Opportunities & Challenges CII Business Delegation to Portugal & Spain 3-9 July.

© Confederation of Indian Industry

Strong Macro Economic Fundamentals

Stock Markets

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Market capitalisation on the BSE Market capitalisation on the NSE

BSE sensex S&P CNX nifty index

US $ Billion Index Value

Page 11: © Confederation of Indian Industry Confederation of Indian Industry India: Opportunities & Challenges CII Business Delegation to Portugal & Spain 3-9 July.

© Confederation of Indian Industry

Infrastructure

Source: Economic Survey 2006-07

• Accounts for 27% weightage in Industrial production.

• An investment of US$ 320 billion is required in the infrastructure sector in India.

• Investment requirements in some key sectors are: - US$ 50.8 billion for modernisation and upgradation of highways.

- US$ 9.25 billion for civil aviation.- US$ 11.5 billion for ports; and

- US$ 69.39 billion for railways.

Page 12: © Confederation of Indian Industry Confederation of Indian Industry India: Opportunities & Challenges CII Business Delegation to Portugal & Spain 3-9 July.

© Confederation of Indian Industry

Infrastructure

Construction• Second largest economic activity after agriculture.

• Accounts for 11% of India’s GDP and 50% of its Gross Fixed Capital Formation (GFCF).

Roads, Ports, Airports & Railways• National Highways Development Project-India's largest

highway project ever-is well under way.

• Airport infrastructure is on a growth curve. This includes modernization plan for 37 non-metro airports.

Source: Economic Survey 2006-07

Page 13: © Confederation of Indian Industry Confederation of Indian Industry India: Opportunities & Challenges CII Business Delegation to Portugal & Spain 3-9 July.

© Confederation of Indian Industry

Manufacturing

• Recorded growth of 9.8% in 2007-08 (April-Nov.)

• Industry output increased 9.2% in 2007-08 (April-November).

• The top five growth industries in the manufacturing sector are Cement, Steel, Pharma, Gems and Jewellery and Engineering.

Page 14: © Confederation of Indian Industry Confederation of Indian Industry India: Opportunities & Challenges CII Business Delegation to Portugal & Spain 3-9 July.

© Confederation of Indian Industry

IT and IT enabled Services

• IT sector has grown by 27% in 2007.

• Liberal Policy framework for the sector has had a direct impact on industry's competitiveness and created avenues for growth of IT & BPO sectors.

• Special schemes including Export Oriented Unit, SEZ’s etc offer a wide range of duty concessions and exemptions for IT exports.

Page 15: © Confederation of Indian Industry Confederation of Indian Industry India: Opportunities & Challenges CII Business Delegation to Portugal & Spain 3-9 July.

© Confederation of Indian Industry

IT and IT enabled Services

• IT-ITeS industry's contribution to India's GDP is expected to rise to 7% by 2008 against 5.2% in 2007.

• The country is drawing 25 per cent of fresh global investments in R&D centres.

• In many cases, such as Oracle, Intel, Adobe, STMicroelectronics (STM), SAP, the India R&D centre is their largest facility outside the US or Europe.

• Employment by the software and BPO industry has grown rapidly, from 2,84,000 in 2000 to 1.6 million for FY2006-07.

Page 16: © Confederation of Indian Industry Confederation of Indian Industry India: Opportunities & Challenges CII Business Delegation to Portugal & Spain 3-9 July.

© Confederation of Indian Industry

Pharmaceuticals

• The Indian Pharmaceutical Industry growing at 10-13% annually, is the 4th largest pharmaceutical industry in the world and is expected to be worth $25 billion by 2010.

• India is among top 5 bulk drug makers and at home, the local Industry has edged out the Multi-National companies whose share of 75% in the market is down to 35%.

• Trade of medicinal plants has crossed $900 million already.

Page 17: © Confederation of Indian Industry Confederation of Indian Industry India: Opportunities & Challenges CII Business Delegation to Portugal & Spain 3-9 July.

© Confederation of Indian Industry

Pharmaceuticals

• Already 15 of the 20 largest pharmaceutical companies in the world have a presence in India, involved in the development & manufacture of genomic drugs, whose business is growing exponentially.

• Sequencing genes & delivering genomic information for big pharmaceutical companies is the next boom industry in India.

Page 18: © Confederation of Indian Industry Confederation of Indian Industry India: Opportunities & Challenges CII Business Delegation to Portugal & Spain 3-9 July.

© Confederation of Indian Industry

Tourism

• Foreign tourist arrivals have grown by 11.9% in 2007.

• Constitutes 6.8% of GDP and provides employment to 41 million people.

• Healthcare tourism alone can rake over US$ 1.86 billion additional revenues by 2012. Currently it stands at US$ 821.40 million industry.

• Total earnings from foreign tourists has shown an annual growth rate of 19.2 per in 2006 and 33.8 per cent in 2007 to garner US$ 7.49 billion in 2005, US$ 8.93 in 2006 and US$ 11.96 billion in 2007.

Page 19: © Confederation of Indian Industry Confederation of Indian Industry India: Opportunities & Challenges CII Business Delegation to Portugal & Spain 3-9 July.

© Confederation of Indian Industry

Energy

• Indian energy sector requires investments to the tune of USD120-150 billion over the next five years.

• Thirty eight coal fields with mine able coal reserves in excess of 2,800 million tones have been identified and are in the process of being allocated for captive mining.This may imply a total capital requirement of around USD1.5-2billion.

• Reserves estimated at 700MMT of oil and gas have been discovered.

• Discoveries of gas to the tune of 700 bcm in the last decade have meant that gas reserves hold promise in India.

• The government has envisaged a capacity addition of around 107,000 MW5 by 2012, out of which 22,900MW is earmarked for the private sector.

Page 20: © Confederation of Indian Industry Confederation of Indian Industry India: Opportunities & Challenges CII Business Delegation to Portugal & Spain 3-9 July.

© Confederation of Indian Industry

India’s FDI Abroad: Rapid Increase

Source: RBI

(US Billion $)

0.761.39

1.82 1.93 2.272.93

11.01

2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07

Page 21: © Confederation of Indian Industry Confederation of Indian Industry India: Opportunities & Challenges CII Business Delegation to Portugal & Spain 3-9 July.

© Confederation of Indian Industry

India Advantage: General

Trained manpower and knowledge base

Excellent network of research laboratories

Well-developed base industries

Pro active policy framework

Proficiency in English

Low manpower costs

Fast rising middle class and consumption

Favorable Demography

Page 22: © Confederation of Indian Industry Confederation of Indian Industry India: Opportunities & Challenges CII Business Delegation to Portugal & Spain 3-9 July.

© Confederation of Indian Industry

Thank You www.cii.in