EU

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EU India Economic Relations in Perspective
Vision for 2020
By- Munish Dayal President, Business Banking
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YES Bank

• The Only Greenfield private bank set up in the
  last decade
• Professional Entrepreneurship
• Indian bank catering to Emerging India
• Knowledge driven strategy
• Focus on SME Banking
• Unique One Bank Model Integrated Product
  Offering
• New generation Technology
• One of 20 most wired companies
• Nasscom award for Innovations in IT

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India has strong Macro Fundamentals - Current
Growth Oriented GDP ()
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Increasing share of services in GDP
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With Services Sector gaining importance.
Indian economy in a resilient mode in terms of
GDP growth
Source Central Statistical Organisation
Increasing International Trade
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Strong Forex Reserves
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along with rising forex rate and reserves
and has an increasing share in international
trade
Source Indiastat.com
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To do business in India.
Days taken to start business
A change is taking place in the regulatory environment
FDI allowed in almost all sectors Import duties rationalised Single window clearance Expediting clearances through escalatory mechanisms Greater transparency brought about through e-governance
Level of complexity
According to Transparency Internationals 04
Corruption Perception Index Indias score is 2.8
out of 10. India ranks 90 out of 145 on the
Transparency International Corruption Perceptions.
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The transformation
Yesterday

• Slow rate of growth
• Bureaucratic
• Protected and slow
• Small consumer markets
• Weak infrastructure

Today

• One of the worlds fastest growing economies
• Reasonably proactive
• Opening up of sectors for investment
• Promising consumer markets
• Infrastructure needs improvement

India is the worlds largest democracy
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India today

• Has world-class recognition in IT, bio-technology
  and space
• Is the largest English speaking nation in the
  world
• Has the worlds largest single-location forging
  facility
• Has the second largest petrochemical facility in
  the world
• Is the lowest cost steel producer in the world
• Is the largest 2 wheeler manufacturer in the
  world
• Is the second largest tractor manufacturer in the
  world
• Is the fifth largest commercial vehicle
  manufacturer in the world
• Is among six countries that launch satellites and
  does so even for Germany, Belgium, South Korea,
  Singapore and EU countries
• Is one of the few countries that has built its
  own Supercomputer

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• India and the EU Strategic Economic Partners

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India EU Export Import Trends

• Trends in Bilateral Trade and Investment India
  and the EU
• In 2005, bilateral trade in goods grew by an
  impressive 20
• On average, between 2001 and 2005, this growth
  has been 11
• EU is Indias largest trading partner
• Accounts for nearly 1/5th of Indias external
  trade
• India is EUs 10th main partner
• Accounts for 1.8 of trade
• Trade in Commercial Services has also increased
  substantially
• 10 average annual growth
• EU is Indias largest source of Foreign Direct
  Investment
• Amounting to Euro 1100 million in 2004
• Indias inflows into EU Euro 600 million in 2003

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India EU Export Import Trends (contd)
Trade with India has been increasing both in
terms of exports and imports Balance went from -
512 M Euro to 2199 M Euro
Trade with EU has been increasing However
Imports exceeded Exports by almost 5500 M Euro in
2005 resulting in a negative balance
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India EU Export Import Trends (contd)

• Indias share in total EU imports though
  miniscule (at 1.6 in 2005) has been increasing
• EUs share in Indian imports is substantial at
  21.3 in 2005

• Indias share in total EU exports though
  miniscule (at 2.0 in 2005) showed a 0.5
  increase from 2001.
• EUs share in Indian Exports is substantial at
  22 in 2005

The EU Major Indian Trade Partner
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Primary Areas and Products of Trade and Investment
Account for over 50 of EU imports from India but
share of this in EUs total imports is less than
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Indias share in EU imports is miniscule.
Potential needs to be appropriately harnessed
through the creation of strategic economic
partnerships
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Primary Areas and Products of Trade and Investment
Account for over 62 of EU exports to India
The potential of India in the EU Imports of
Agriculture needs to be appropriately harnessed
through the creation of strategic economic
partnerships
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• Harnessing the Potential

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Indias OfferingTrade Potential

• Indias share in EU imports though increasing is
  miniscule

Indias share in EU imports stood at 1.6 in
2005, registering a slight increase from 1.4 in
2001
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• Public Private Partnerships

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Public Private Partnership (PPP)

• Government objective
• Maximize Service to the common man at an
  affordable price with minimum use of government
  funds
• Best achieved through Public Private Partnerships
  in provision of infrastructure and enabling
  services
• Three Models available for public private
  partnership
• Model 1
• Private Sector and Government as partners invest
  with an objective to earn returns from the
  investment
• Model 2
• Private Sector invests - Government provides soft
  funds to the project to reduce user charges and
  capital investments
• Model 3
• Private Sector Invests -Government rationalizes
  the user charges

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Offerings in a PPP Environment

• Role of the Government
• Create an enabling and regulatory framework for
  the private sector participation
• Provide land (or other strategic resource) along
  with some seed capital and leverage the same by
  inviting private sector
• Monitor and regulate the performance of the
  Private sector participants to ensure service
  levels

• PSP Options
• Service Contract
• Management Contract
• Lease
• Concession
• BOT/BOO
• Divestiture

PPP Models 1 Soft Fund Model 2 User Price
Rationalization Model
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• The Way Forward

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The Way Forward

• Increasing trade potential awareness in India and
  the EU
• Strengthening trade arrangements
• Promoting dialogue and commercial arrangements
• Developing Strategic Economic Partnerships
• Joint Ventures
• Equity Participation in Agri Projects
• Strengthening Infrastructure such as
• Trade Links
• Air Routes

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THANK YOU