Engaging india sp joshi - australian business consulting & solutions

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Engaging India

Transcript of Engaging india sp joshi - australian business consulting & solutions

Page 1: Engaging india   sp joshi - australian business consulting & solutions

Engaging India

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The Country

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• 1.29 billion: Second largest population in world• World’s youngest population – 59% people in 15-54 age bracket

• Largest democracy in the world• World’s second largest workforce• Largest biometric database in the world: over 950 million

Demographics

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Economy• GDP (2015): AUD 2.7 Trillion • GDP: Average growth rate last decade over 7%,

expected to achieve 7.8% in 2016-17, highest growth among BRICS and developing economies

• Services sector contributes 65% to GDP followed by manufacturing (18%) and agriculture (17%)

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Socio-economic Profile

• Foreign exchange reserves over US$ 354 billion• Over 11,000 companies listed on Indian stock exchanges• Market capitalisation (2016): AUD 2.01 Trillion• World’s second largest workforce• World’s second largest users of Mobiles: more than one billion (April

2016)• Internet users: more than 402 million (December 2015)• Number of online shoppers estimated at 40 million• Largest biometric database in the world: over 750 million, targeted to

cross one billion within a year

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Geo-political profile

World’s largest democracy Structured as Sovereign

Democratic Republic Stable political regime Consumption and investment

driven economy Sixth largest country by area World’s second largest

acreage of arable land

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India’s growth drivers• Demographic dividend• Job creation• High savings rate• Pro-reforms Federal Government• Focus on ease of doing business• Reviving investment climate• Fiscal consolidation

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Future Economic Trends• By Year 2030• India forecasted to be world’s 3rd largest economy• 600 million people expected to live in cities• 586 million Indians expected to be in middle and

upper middle income segment• By Year2050• India poised to become second largest economy,

ahead of US (PWC)

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Business Opportunities

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Infrastructure• Total planned investment on infrastructure

(includes power, bridges, dams, roads and urban infrastructure development) during 12th five year plan is A$ 1.3 trillion

• Indian Government plans to invest A$ 490 billion in infrastructure over a period of three years, which will include A$ 157 billion for developing 27 industrial clusters and an additional A$ 98 billion for road, railway and port connectivity projects

• Indian construction equipment industry expected to grow to A$ 6.5 billion by FY2019-20 from current size of A$ 3.6 billion, according to Indian Construction Equipment Manufacturers’ Association

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Infrastructure Opportunities

• Roads: projects worth A$ 78 billion• Ports: planned investment of A$ 38 billion• Railways: 2 dedicated freight corridors, 3300 km of rail line,

safety, metro development for 7 cities• Airports: modernisation of non-metro airports, 7 green

field airports• Electricity: new power plants, projects worth A$ 295 billion• Green building products & services

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Smart Cities(www.smartcities.gov.in)

• Smart city projects aim at developing the entire urban eco-system, represented by comprehensive development-institutional, physical, social and economic infrastructure

• GOI initiative to set up 100 smart cities identified across India in stage-1

• Allocated a budget of A$ 21billion• 120 cities to receive funding in stage-2: A$ 23.5 million per

city per year. State Government will contribute an equal amount

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Smart Cities: Opportunities• As per NASSCOM: opportunities

to the tune of A$ 40-50 billion over the next 10 years

• Focus Areas:• E-governance & citizen

services• Waste management• Water management• Energy management• Urban mobility• Others: master planning,

telemedicine, etc.

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Mining• India’s mineral production valued at over A$ 50 billion in

year 2013-2014• India is world’s 3rd largest coal producer• Significant producer of iron ore, lignite, copper,

manganese & chromite• Concentrated amongst a few public sector companies• Private sector becoming active & making significant

investments

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Mining Sector - opportunities• Mining IT & mine management systems• Geo-mining consultancy• Underground mining equipment & technologies• Mineral beneficiation systems• Safety systems & equipment• Environmental protection technology & equipment• Training

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Food Processing

• Wide array of products, coupled with increasing global connectivity, has led to a change in the tastes and preference of domestic consumers

• This trend has been bolstered by rising incomes, increasing urbanisation, a young population, and the emergence of nuclear families. Consumer preference is moving towards healthier snacks

• Liberalisation and growth of organised retail have made the Indian market more attractive for global players

• With a large agriculture sector, abundant livestock, and cost competitiveness, India is fast emerging as a sourcing hub of processed food. Danone, Nestle, Kraft Foods, Mondelez International, Heinz are the international players in food processing market in India

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Food Sector Opportunities• Fast growing segments

• Packaged Food• Aerated Soft Drinks• Packaged Drinking Water• Alcoholic Beverages

• In 2015, Zespri International New Zealand based company tied up with Mumbai Tiffinmen to sell new variants of fruits in India

• Many global and Indian companies are getting into joint ventures to make global products available in India. Starbucks and TATA Alliance is one of the largest joint ventures

• Bharti Enterprises and Delmonte Pacific Ltd is the largest fresh baby corn exporter in India

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eCommerce in India• eCommerce industry is fast rising and changing

fast• The sector in India has grown by 36% (CAGR)

since 2009 to touch A$ 27.7 billion in 2014• Currently, eTravel comprises 70% of the total

eCommerce market• eTailing, (online retail and online marketplaces) is

the fastest-growing segment (CAGR of around 56% over 2009-2014)• The size of the eTail market is pegged at 7.8

billion AUD in 2015• Books, apparel and accessories and electronics

are the largest selling products through eTailing, constituting around 80% of product distribution

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eTail (AUD Billion)

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eCommerce - Growth Drivers•Fast growing internet population•Increasing use of in internet-enabled devices smartphones, tablets and internet broadband and 4G has led to developing a strong consumer base, likely to increase further•Changing lifestyle of the Indian consumer seeking convenience, comfort and variety•Peer pressure, rising aspirations with career growth, fashion and trends encourage this segment to shop more than any other category •Fast growth of internet users in rural areas

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eCommerce Prospects in India• eCommerce market expected to grow @40% CAGR, likely to touch A$ 177

billion in 2020• eCommerce retail expected to grow @ 52% CAGR, poised to reach A$ 47.7

billion in 2020• Of the total organised retail market, online retail penetration is likely to

increase from 6 per cent in 2014 to 14 per cent by 2020• Value wise, electronics is the largest segment in e-commerce retail (47%)

followed by apparel (31%), home & furnishing (8%), books (7%), baby products and personal care (2% each)

• eCommerce retail high growth attributed to high growth in internet devices, ease of shopping, innovative payment options, deals & discounts and rapidly changing lifestyles

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Packaging and labelling regulation • All pre-packaged commodities imported into India must carry the

following declarations on the label: • Name and address of the importer• Generic or common name of the commodity packed• Net quantity in terms of standard unit of weights and measurement (India

follows metric system)• Manufacturing or packing date• Maximum retail sales price (MRP) at which the commodity in packaged

form may be sold to the end consumer

• Standard labelling language is English• Packaging and Labeling requirements for packaged food products

are separately specified (www.fssai.gov.in )

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Doing Business in India

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• Family like organizations, many older organizations are philanthropic• Preference for foreign partners, degree depends on country• E-governance and mechanization has helped a great deal to

reduce corruption• Bureaucracy more accountable and efficient• Intellectual property – stricter laws now in place, getting better• Attitudes towards quality – a drastic change• Commitment to deadlines – improving• Long term relationships are valued• There is certain mindset about management hierarchy• Indians have difficulty in saying no

Business environment

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Government: Reforms and Initiatives• GST: Bill Cleared by Parliament on 3rd August 2016, set to roll out

from April 2017• Labour and insolvency & bankruptcy laws simplified • Make in India (www.makeinindia.com ): facilitate investment, foster

innovation, protect intellectual property • Skill India (www.skillindia.in ): aims to train over 400 million people

in India in different skills by 2022• Smart Cities (www.smartcities.gov.in ): scheme to develop 100 cities

as smart cities in next five years• Digital India (www.digitalindia.gov.in ): initiative to make

Government services available to citizens electronically by improving online infrastructure and by increasing Internet connectivity

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Ease of Doing Business - Initiatives

• eBIZ (Online Single Window Platform) initiated to facilitate one-stop access for investors to know more about Investment opportunities (www.ebiz.gov.in )

• User-friendly features such as Payments through netbanking, credit & debit cards, status tracking, SMS alerts and Help-desk support enabled and information on number of licenses/approvals required from Government agencies

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Ease of doing business - Initiatives• Most approvals required to start business now done

online• Online filing of annual income tax and other statutory

returns • Applications for Industrial licensing and Industrial

Entrepreneur Memorandum can be made online• Electricity connections and building approvals made

simpler• Exports and import procedures simplified

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Questions one needs to ask

1. Can I sustain my business without exporting to India in next 10 years?

2. Can I grow my business without being in India in next 10 years?

If the answer is NO, it is time to engage India

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How to engage• Ascertain market size, growth trends, competitive situation and

entry barriers, to make a confident entry• Important to check market credentials of potential partner/s • While most Indians can communicate in English, body language

and mannerisms can be sometimes misleading• Exchanging pleasantries before initiating a business discussion is

helpful to break the ice• Indians like to develop personal relations in business

engagements, don’t get offended by personal questions• On the ground professional support is necessary to meet

regulatory and cultural challenges• Always consider long term prospective

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Australian Business Consulting & SolutionsAssists Australian businesses into India

• Market assessment studies• Distribution/JV Partner search• Setting up company• Sourcing/contract manufacturing• On-going assistance/advice to do business in India

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Thank You