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

© Confederation of Indian Industry  5,000 year old ancient civilization  325 languages spoken – 1,652 dialects  3.28 million sq. kilometers - Area  7,516 kilometers - Coastline  5600 dailies, weeklies and periodicals in 21 languages with a combined circulation of 142 million.  Parliamentary form of Government  Worlds largest democracy.  Worlds 4th largest economy.  World-class recognition in IT, bio-technology & space.  Largest English speaking nation in the world.  2 nd largest pool of scientists and engineers in the World. the World. India – Introduction

© 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  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 $ Billion

© 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.

© 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

© Confederation of Indian Industry GDP ( )  GDP grew by 9% to US$ 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 ( )

© Confederation of Indian Industry GDP Composition Undergoing a Drastic Change Source: Reserve Bank of India

© 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.

© 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

© Confederation of Indian Industry Strong Macro Economic Fundamentals Stock Markets

© Confederation of Indian Industry Infrastructure Source: Economic Survey 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$ billion for railways.

© 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

© Confederation of Indian Industry Manufacturing Recorded growth of 9.8% in (April- Nov.) Industry output increased 9.2% in (April-November). The top five growth industries in the manufacturing sector are Cement, Steel, Pharma, Gems and Jewellery and Engineering.

© Confederation of Indian Industry IT and IT enabled Services IT sector has grown by 27% in 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.

© 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 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 FY

© Confederation of Indian Industry Pharmaceuticals The Indian Pharmaceutical Industry growing at % annually, is the 4 th largest pharmaceutical industry in the world and is expected to be worth $25 billion by 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.

© 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.

© Confederation of Indian Industry Tourism Foreign tourist arrivals have grown by 11.9% in 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 Currently it stands at US$ 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$ billion in 2007.

© Confederation of Indian Industry Energy Indian energy sector requires investments to the tune of USD 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.

© Confederation of Indian Industry India’s FDI Abroad: Rapid Increase Source: RBI

© 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

© Confederation of Indian Industry Thank You