1. skycargo.com Ram C. Menen Divisional Senior Vice President Cargo Mumbai, India 24 th January 2008 Emerging Market: The Road Ahead

2. Emerging Markets : Where Are They Asia Middle East Eastern Europe Africa Latin America Will They Walk the Walk……..

3. Emerging Markets Fastest Growing Economies Of The World: BRIC Countries

4. World Markets

5. Emerging Market: Asia Highest growth is likely to be within the Asia Pacific region where its share will go from 24% to 26% by 2011. India and China will be major players in this growth. India needs to be prepared to be able to deal/handle this growth. ……Is India preparing its infrastructure to be able to deal with this and be a major player……?

6. Welcome to ‘Incredible !ndia!’

7. Indian Economy The economy of India is the 12 th largest in the world 3 rd largest in terms of Purchasing Power Parity (PPP) 2 nd fastest growing major economy in the world GDP worth US $1.25 trillion (2008). GDP growth rate of 9.4% (fiscal year 2006- 2007) Source: Wikipedia

8. India’s buoyant growth outlook Higher GDP growth as industrial expansion accelerates Inflation risks building up Smaller current account deficit as industrial exports strengthen Further monetary tightening may be at hand Deteriorating fiscal position could limit infrastructure investments

9. Latest Trends & Developments - FDI India has displaced the US to become the second-most favored destination for foreign direct investment after China FDI equity flows were US$ 5.5 billion in 2005-06, it increased almost three times to US$ 15.7 billion in 2006-07, representing a growth rate of 184% Source: www.ibef.org/economy/fdi.aspxwww.ibef.org/economy/fdi.aspx

10. India Issues Politics & Government Bureaucracy, slowness due to fragmentation Infrastructure –Facilities –Need to simplify the business through effective use of technology –Power Sustaining the growth spurt

11. Air Cargo Outlook With India's GDP growing at over 9% per year and the manufacturing sector enjoying double digit growth rates, the Indian logistics industry is at an inflection point. Overall, the growth rate of the aviation sector (including domestic) in the next 10 years is expected to be not less than 25 percent. Source: www.reportbuyer.com/transport_travel/logistics_shipping/india_logistics_outlook_2007.htmlwww.reportbuyer.com/transport_travel/logistics_shipping/india_logistics_outlook_2007.html

12. India: Infrastructure. Highest landed costs due to inefficiencies throughout domestic logistics chain New highway system is key to future growth Four Metro Airports: Delhi, Mumbai, Kolkata, Chennai Non-Metro Airports: Bangalore, Hyderabad, Kochi, Thiruvananthapuram etc Emerging Airports: Nagpur, Guwahati, Lucknow, Coimbatore,

13. Cost of Logistics Logistics cost in India is over 13% of GDP (circa US$ 70 billion), compared to less than 10% of GDP in Western Europe and North America. The main reasons are: inefficiency of the system, lower average trucking speeds, lower turnaround speeds at ports and cost of administration delays Efficient supply chain management is the only way to bring the costs down For this to happen, logistics infrastructure must consider developments in science of supply chain management.

14. Infrastructure The country needs US$330bn in infrastructure investment over the next five years to sustain its economy's growth at 8% annually India needs to increase its spending on infrastructure projects to 8% of the country's GDP from 4.6% at present. Despite these obstacles, India will reach average annual freight traffic growth of 11.1% (international) in the 2007-2011 period http://www.reportbuyer.com/transport_travel/country_overviews_transport_travel/india_freight_tranport_report_q3_2007.html

15. The Way Forward… Science of vendor managed inventory (VMI) will evolve and will play a critical role in achieving efficiency of future supply chains Collective & Collaborative efforts in the supply chain is a must The ability to communicate in real time will be critical to efficient stock keeping for manufacturers and retailers equally, to maintain the integrity of efficient VMI process. Infrastructure must support and facilitate continuous replenishment process.

16. The Way Forward… Development of good sales to inventory ratio data will be key to the efficiency of VMI operation Development of common language for transmitting data electronically from one business to the other will be key to success and India is best placed to be able to deal with this because of its supremacy in the IT field. Air Freight has got to be factored in and should be a planned tool for gaining efficiency in VMI.

17. Value Chain

18. India’s … Future… Up until now, the highest growth has been in the services industry. However, during the next phase, highest growth will be in the manufacturing and retail business A good logistics infrastructure will be key to emerging India market

19. Opportunity As an emerging and developing nation, India has the advantage of leapfrogging technology. India is in a position to benefit from latest technologies and take the science of supply chain to the next level, giving it a leadership position in the world market

20. Thank You skycargo.com