Business Opportunities in India Enterprise Ireland Seminar

1
Business Opportunities in India Enterprise
Ireland Seminar

• Sectoral Regional Opportunities in India
• Corrib Great Southern Hotel, Renmore, Galway
• Thursday, 15th September, 2005
• Dr Prabhu Kulkarni,
• Irish Exporters Association - Asia Trade Forum

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INDIA - BUSINESS OPPORTUNITIES Prabhu
Kulkarni

• The rise of India and China is more important
  than the disintegration of the Soviet Union
• or
• the unification of Germany
• Robert Blackwill
• former US ambassador to India
• during the Indian Prime ministers
• State visit to USA
• On 18th July 2005

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INDIA - BUSINESS OPPORTUNITIES Prabhu Kulkarni

• THE LARGEST LIBERAL DEMOCRACY IN
• THE WORLD
• THRIVING ECONOMIC POWER.
• MULTICULTURAL, MULTI-LINGUAL SOCIETY,
• OFFERS EVERY CITIZEN EQUAL OPPORTUNIES

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INDIA - BUSINESS OPPORTUNITIESGovernment
Prabhu Kulkarni

• India is politically stable ( Italy 47
  governments in 55 years)
• like many European countries including Ireland
  coalition government is the norm
• No Indian government has ever reversed policy
  framed by the earlier administrations
• Economic liberalisation and need for foreign
  investment is accepted by all political parties

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INDIA - BUSINESS OPPORTUNITIESEconomy
Prabhu Kulkarni

• Population 1.1 Billion
• GNP 650 Billion
• GNP/C 590
• GNP (PPP- 2004) 3.319 trillion
• GNP/C (PPP- 2004) 3,300
• Indian Economy is now fourth largest in the world
  in terms of PPP and 7th largest in GDP terms
• Indian CSO 30th June 2005

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INDIA - BUSINESS OPPORTUNITIESEconomy
Prabhu Kulkarni

• INDIAN TRADE 2004-2005
• EXPORT 89 Billion (43.8)
• IMPORT 118 Billion (51.4)
• Foreign Exchange Reserve 139 Billion (68)
• Foreign Direct Investment (2002) 33.92
  Billion
• EU FDI (2002) 4.51 Billion
• (Figure in Bracket are 2001-2002 data)

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INDIA - BUSINESS OPPORTUNITIESEconomy
Prabhu Kulkarni

• EU-INDIA TRADE 2002
• EXPORT 14.5 Billion
• IMPORT 14 Billion
• Irish trade with India 2004
• EXPORT 109 million
• IMPORT 152 million

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INDIA - BUSINESS OPPORTUNITIESLand People
Prabhu Kulkarni

• India is the second largest country in Asia and
  the seventh largest in the world, covering an
  area of some 3 million KM2
• (Ireland, by contrast, is 68,890 KM2 )

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INDIA BUSINESS OPPORTUNITIESGovernment/s Pra
bhu Kulkarni

• India is organised into 28 States and six Union
  Territories based predominantly on linguistic
• division
• The head of each State is the Governor, who is
  advised by a Council of Ministers headed by the
  Chief Minister
• Each State government consists of a Legislative
  Assembly (of elected members) and a Legislative
  Council (of nominated members)

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INDIA - BUSINESS OPPORTUNITIESbusiness
Opportunities Prabhu Kulkarni

• Both the central and state governments are
  aggressively seeking foreign investment
• Offer incentives to encourage overseas companies
  to set up Business
• India looks like an investment dream come true
  but challenges are equally vast

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• INDIA - BUSINESS OPPORTUNITIES
• Regional

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INDIA States Union Territories Prabhu
Kulkarni
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INDIA - BUSINESS OPPORTUNITIESLand People
Prabhu Kulkarni

• North to south distance is over 2,933 km and
  from east to west over 3,214 km
• 15,200 km of border and 7,516 km coastline
• Number of States in India are similar to the
  Member States the enlarged European Union in
  diversity, size and population

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INDIA EUREOPE Comparison of size Prabhu
Kulkarni
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INDIA - BUSINESS OPPORTUNITIESbusiness
Opportunities Prabhu Kulkarni

• Decide if products are to be sold strictly in
  the Indian market or primarily exported from
  India to other countries?
• If bulk product is to be exported, then there are
  possible specific locations and various methods
  of availing of tax advantages and export
  incentives

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INDIA - BUSINESS OPPORTUNITIES Prabhu Kulkarni

• Select the region and State/s suitable to your
  products, process and Technology
• All States are interested in your business and
  offer excellent opportunities
• Each one with unique Language, History, cultural
  and social traditions, even the diet, food habits
  and the dress codes vary significantly
• Compartmentalize the country in 4 zones North
  south, East and west

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INDIA - BUSINESS OPPORTUNITIESIndustrial
Location Prabhu Kulkarni

• My personal recommendations will be to consider
  three states
• Maharashtra
• Gujarat
• Karnataka
• for the purpose of this presentation I will
  call these as Western States

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INDIA - BUSINESS OPPORTUNITIES Western Region-
Economic Advantages Prabhu Kulkarni

• LARGE MANUFACTURING BASE
• HIGHLY DEVELOPED BANKING AND FINANCIAL
  INSTITUTIONS AND VIBRANT CAPITAL MARKET
• UNLIMITED LOW-COST SKILLED WORKFORCE

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INDIA - BUSINESS OPPORTUNITIESWestern Region-
Economic Advantages Prabhu Kulkarni

• Combined population of about 220 million
  population
• Relatively advanced in industries,
  infrastructure and well administered
• Well connected to rest of Indian markets by
  rail, road and Air
• Major sea and air export ports of India are
  located in this region
• Close to economically advancing states like
  Rajasthan, Andhra Pradesh, Kerala and Tamil Nadu

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INDIA - BUSINESS OPPORTUNITIESWestern Region-
Economic Advantages Prabhu Kulkarni

• Together this region accounts for about 60 of
  Indias Export and Imports
• Attract about 55 of Indias foreign Direct
  Investment (FDI)
• 60 of Income tax is Generated in this region
• Firm level analysis of competitiveness carried
  by the world Bank and CII - this region receives
  70 of Indias approval rating

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INDIA - BUSINESS OPPORTUNITIES For Irish
Industries Western Region
Prabhu Kulkarni

• Over 270 of the Fortune 500 companies have
  either manufacturing or Marketing operations in
  this Region
• Major Manufacturing centre for Engineering,
  Automotive, pharmaceuticals Chemicals, IT,
  Construction and all type of Industries

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INDIA - BUSINESS OPPORTUNITIES For Irish
Industries Western Region
Prabhu Kulkarni

• Major cities-
• Mumbai, Pune, Nasik, Ahmedabad, Vadodara and
  Bangalore
• Bangalore is the Hub of Indian IT Industries
• A number of Irish companies are represented in
  this Region

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• INDIA - BUSINESS OPPORTUNITIES
• Commercial Sectors
• These are recommendations with high potentials
• Other business also have good potentials and the
  IEA/AFT
• will offer all possible help and assistance

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INDIA - BUSINESS OPPORTUNITIES for Irish
Industries - Sectors Prabhu Kulkarni

• Engineering
• High precision components,
• improve competitiveness
• Food Processing
• Value added products
• Information Technology
• Hardware and Software Development
• Tourism Inward outward
• Research Development
• Product and Process improvement

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INDIA - BUSINESS OPPORTUNITIES ENGINEERING
INDUSTRY - Sectors Prabhu Kulkarni

• Engineering Major centre for machinery and
  component manufacturing for aeroplanes cars,
  trucks, two wheel vehicles, chemical,
  agricultural and pharmaceutical industries
• Centre for high precision components
  manufacturing for aeronautic, space,
  scientific and technological research and
  industries

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INDIA - BUSINESS OPPORTUNITIES ENGINEERING
INDUSTRY - Sectors Prabhu Kulkarni

• At the Recent India EU Business Summit this
  sector has been selected as a main area of
  Cooperation
• A number of technically advanced Indian and EU
  companies participated in the seminar on
  Engineering component manufacturing
• High quality professional engineers and
  technicians are in large numbers and modest cost

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INDIA - BUSINESS OPPORTUNITIES Food Sectors
Prabhu Kulkarni

• India is the
• largest milk and tea producer in the world
• Number one in Remote sensing satellite
  technology (climate weather data Systems)
• Second largest producer of wheat and rice
• Among the top five producers of food grain,
  sugar, fruits, cotton, tobacco and leather
  products

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INDIA - BUSINESS OPPORTUNITIES Food Sectors
Prabhu Kulkarni

• Wide range of raw materials in large quantities
  are available for food processing
• Poor post harvesting facilities, about 40 crop
  is lost to pests and vermin
• Presently tiny percentage of agricultural
  materials are processed into value added products
  
• Rising per capita income, rapid economic growth
  and the changing demand patterns offer new
  opportunities

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INDIA - BUSINESS OPPORTUNITIES Food Sectors
Prabhu Kulkarni

• Urban Indians Spend up to 43 income on eatables
• Annual imports of fresh fruits and ready made
  food is about US 1.1 Billion
• Food imports are growing at the rate of 10 per
  year
• Some of the large value imports are chocolate
  syrup, peanut butter, cake mixes, various sauces
  including barbecue

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INDIA - BUSINESS OPPORTUNITIESIT-Sector
Prabhu Kulkarni

• The total value of outsourcing to India is
  estimated to be 44 per cent of the worldwide
  total ( 17.2 billion in 2004-05)
• The offshore penetration of Fortune 500 increased
  by 33 per cent in 2004 (from 300 in 2003 to 400
  companies in 2004).

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INDIA - BUSINESS OPPORTUNITIESIT-Sector
Prabhu Kulkarni

• Growth of IT exports from India
• 2003-04 12.8 billion
• 2004-05 34.5 17.2 billion
• 2005-06 30-32 22.5 billion
• Indian software and services exports industry has
  reinforced that the Industry would attain the
  projected target of 50 billion in 2009.

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INDIA - BUSINESS OPPORTUNITIESIT-Sector
Prabhu Kulkarni

• PROGRAMMERS' SALARIES
• Romania 2,400
• India 5,880
• Czech Republic 6,400
• Philippines 6,500
• Malaysia 7,200
• China 8,900
• Israel 25,000
• Ireland 28,000
• average wage/year 2003 Source Nasscom India

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INDIA Opportunities in Domestic market
ICT-Sector Prabhu Kulkarni

• year Market value Indian foreign
• Billion US share share
• 2004 29.2 42 58
• 2008 54.8 lt35 gt65
• Indian companies prefer to deal with foreign
  partners in order to participate in the high
  value export market in preference to domestic
  market
• Indian ICT Market- Gartner Research- Hindustan
  Times, Mumbai, 30th August 05

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INDIA - BUSINESS OPPORTUNITIESTourism-Inward
Prabhu Kulkarni

• About 4.5 to 5 million Indians travel out of
  India annually for holidays and business
• Over 60 of these Indian tourists visit Europe
• More Indian tourists visit Europe than the UK
• Most popular destinations are London, Paris,
  Rome, Berlin, Zurich and Frankfurt
• With imaginative publicity in selective areas
  we could attract 5 to 10 of these tourist to
  Ireland

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INDIA - BUSINESS OPPORTUNITIESTourism-Inward
Prabhu Kulkarni

• Most popular period for Indian tourists is
  April, May and June (to escape unbearable heat)
• This is a low season for tourism in Ireland
• Like all tourists, Indian travellers are high
  spending fun loving people

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INDIA - BUSINESS OPPORTUNITIESTourism-Outward
Prabhu Kulkarni

• India has significant potential to become major
  tourist destination
• With some of the oldest and magnificent
  monuments in the world , over 5000 years of
  history, India has no tourist interpretative
  centres for internal and international visitors
• Over 3.5 million overseas tourists visited India
  spending over US 30 billion in 2004
• Potential for tourism infrastructure development
  and training facilities are high
• Moderate cost tourist accommodation and
  organised package holidays out side the golden
  triangle need investment

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INDIA - BUSINESS OPPORTUNITIESResearch
Development Prabhu Kulkarni

• Indias low cost economy and high standard of
  education makes it an ideal place for industrial
  and academic research
• Major International Chemical, Pharmaceutical,
  Biotech, Engineering, IT and telecommunication
  firms have established their Research
  Development Divisions in India

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INDIA - BUSINESS OPPORTUNITIESResearch
Development Prabhu Kulkarni

• Under the 2002 Science Technology agreement EU
  will allow Indian Researchers access to the
  framework programmes on Research and
  Technological Development
• This offers unique opportunity to Irish
  companies to contract their product and process
  improvement Research projects to India
• Over 300,000 English speaking engineering and IT
  graduates qualify in India annually (USA 60,000)

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INDIA - BUSINESS OPPORTUNITIESR D
Education Prabhu Kulkarni

• India has the second largest education system in
  the world,
• 900, 000 educational institutions.
• The Indian government has made education a top
  priority in its current five-year plan, by
  allocating 4.5 of the total budget to education
  
• over half of that going to primary and upper
  primary schools.

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INDIA - BUSINESS OPPORTUNITIESR D Education
Prabhu Kulkarni

• 600,000 Primary Schools - 3.2 million
  Teachers
• 110,000 Secondary Schools 27 million
  students
• 260 Universities 11,090 colleges 7 million
  students
• 1,180 Industrial Research Centres
• 60 National Research Laboratories
• over 5 million Scientists Engineers

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INDIA Honey, the Kidsve shrunk
usResults/Success of Investing in India
Prabhu Kulkarni

• P/E ratio of MNC and Indian Subsidiary The
  Economic Times-India- 18-8-05
• NYSE BSE
• Unilever 19.32 31.7
• Gillette 28.43 39.9
• P G 20.63 26.8
• Siemens 20.53 37.7
• AstraZeneca 20.63 32.2
• Pfizer 19.69 44.6
• Goodyear 11.29 50.3
• Cummins 8.76 21.3
• Timken 12.35 23.9
• Kennametal 14.5 17.5

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INDIA Investing in India- BSE- Raging
BullEmerging Stock Markets Prabhu
Kulkarni

• Country market GDP mil M. Cap/GDP
• Capitalisation Million Ratio
• S. Korea 525,488 679,647 0.77
• Taiwan 501,478 345,105 1.45
• Saudi Arabia 486,234 250,557 1.94
• INDIA 449,884 691,876 0.65
• China 374,530 1,649,329 0.23
• Russia 336,178 582,395 0.58
• Brazil 336,123 604,855 0.56
• Sunday Times of India- 28th August 2005