India:

Market Snapshot“Doing ICT Business with India”

Nicola Watkinson

Senior Trade & Investment Commissioner

23 September 2015

INDIA – a major global economy

US$ 2.01 Trillion

economy

11th largest global

economy, poised to be

the 3rd largest by 2030

Australia’s 7th largest

export market

Home to a number of the

world’s leading

corporates

Outbound Foreign Direct

Investment has grown from A$5.1 billion in

2003-04 to A$43 billion in

2013-14

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Australia and India - Economic Relationship

• Two-way goods & services increased from $6.8 - $14.8 bn (FY03-14)

• Indian investment in Australia approx. A$11 bn

• Over 100 Indian companies in Australia

• Free Trade Agreement could result in increase in Australia's GDP by up to

US$32 billion (A$45.5 billion) and India's GDP by up to US$34 billion (A$48.3

billion) over a period of 20 years (Independent modelling conducted in 2008

on the Australia–India CECA)

• Approx. 450,000 people of Indian descent live in Australia

• Around 150 Australian companies with representation in India

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Australian ICT companies in India

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Australia – India Partnerships in Research

• Max Healthcare - Deakin

• IIT - Monash Centre in Mumbai

• TERI - Deakin Nanobiotechnology Centre

• Thermax, CSIRO Australia & University of New South Wales

• Department of Biotechnology, Govt. of India & Queensland University of Technology

• Australian Cochlear Ear Implant by Defense Research Development Organisation

• Australian solar manufacturer Dyesol partnership with Tata Steel

• ABB’s joint research initiative between its Indian and Australian operations and RMIT

• AgTechnix’s technology by Hyderabad based SeedWorks India

• Rio Tinto and iGATE Patni – dedicated R&D centre in India

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Indian IT companies in Australia

• More than 25 Indian IT firms in Australia

• Big 6 already represented in Australia providing over 8,000 knowledge-

based jobs

• Positive revenue growth compared to other OECD markets is generating

interest

• Seeking to move up value chain, presenting opportunity to

commercialise Australian research and integrate start-ups into their

supply chain

• Offer investment funds through corporate VC arms and a path to global

markets as 80% to 90% revenues from Fortune 500 customers in the US

and Europe

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The Big 6 India IT companies – reach & capacity to invest

• Tata Consultancy Services (TCS) - US$ 15 billion revenue, 45 countries, Co-Innovation

Network – partner with international academic & research institutions, start-up companies.

• Cognizant Technology Solutions - US$ 10.26 billion, 40 countries, Global Technology

Office tracks technology trends, invested in Melbourne mobile solutions company, Odecee

• Infosys - US$ 8.7 billion revenue, 50 countries, Centre of Emerging Technologies

partners for new technology development, created Infosys Innovation Fund worth US$500

million and is partner in Australia's Smart Services CRC.

• Wipro - 8 billion revenue, presence in 57 countries, 55+ dedicated emerging technologies

‘Centres of Excellence’ & Innovation centre in Bangalore, created a $100-million venture

capital fund, Wipro Ventures , invested in NSW analytics company, Promax Applications

• Tech Mahindra - US$3.7 billion revenue, 52 countries, created US$150-million Growth

Factories fund.

• HCL Technologies - $6.7 billion revenue, 31 counties, parent HCL has recently floated

$500M health tech fund to evaluate US based health technologies.

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Indian IT industry - strong contribution to India

GDP Share Highest relative share in national GDP 9.5%

3.5 mnEmployees Largest private sector employer

Diversity Ardent promoter of diversity>1.2 mn

Women

Exports Largest share in total services exports >38%

55%Leading global sourcing destinationMarket

Share

Magnet for PE/VC investments 53%USD 6 billion

Investments

Source: NASSCOM

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NOTABLE

TRENDS

IN

INDIAN IT

SECTOR

INTERNATIONALIZED -580 global deliverycentres,75

countries, 92% revenues US,

UK & Europe

SMAC TECHNOLOGIES -

expected to grow to USD

225 bn (2020)

INCREASED R&D

FOCUS - TCS US$ 35

mn investment in

Carnegie Mellon Uni

LARGE PLAYERS

GAINING ADVANTAGE

top 6 =50% of the

market

DIGITAL REVENUES

& INVESTMENTS -

quadrupled in 5 yrs

& 110+ M&A’s

CONSUMERISATION

OF IT -

moved up value chain

beyond outsourcing

UPTICK IN HIGH

VALUE ADDED

SERVICES - ER&D

revenue US$20 bn

Source: Booz and Company, NASSCOM

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Opportunities - Indian government’s digital push

Government Investments in Technology-2014-15

Digitisation

Infrastructural

improvements

Push for

Manufacturing

Technology in

healthcare &

agriculture

Source: McKinsey, Zinnov

NASSCOM Initiatives

Healthcare IT PlatformPartnership with NATHEALTH and Ministry of Health to

build centralised Healthcare IT Platform

Smart CitiesNASSCOM and Industry helping to define IT

Architecture for 100 Smart Cities Initiative

Digital IndiaCatalyse Digital Literacy and partner for Digital India

Defence R&DIndustry collaboration for Defence R&D Technology

Make in IndiaSoftware Products leading Make in India; IOT Lab

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Opportunities for Australian companies

• Food

Drivers

1. Improper handling - 40% losses at farm gate

2. Yield fluctuation - lack of precision farming methods, supply chain management & infrastructure

3. Agriculture, livestock, forestry and fishery 16.1 % of the Gross Value Added (2014-15)

4. Focus - canned, dairy, processed, frozen food to fisheries, meat, poultry, and food grains

5. Food grain production - 251.12 million tonnes

6. Largest milk producer (138MT annual) & largest bovine population.

Technologies - Cloud, sensor, GPS for resource allocation, decision making to improve productivity, yield,

reduce operational costs and emerging opportunity for automation technologies in production.

Drivers

1. Improper utilisation of natural reserves – coal, LNG, solar

2. Mining sector challenge to re-boot operations after recent ban for increasing production, productivity &

improve the environmental footprint

3. 4th largest energy consumer after US, China, Russia & 300 million people have no access to electricity

Technologies - supporting reduction in mining operational costs (cloud, systems integration, mobility),

remote automation, monitoring & visualisation of activities (reducing wage/ FIFO mine costs, supporting

decision making), resource monitoring (via sensor networks and visualisation) and simulation (worker training

and decision making)

MINING,

OIL & GAS

AGRI

FOOD

Source: IBEF

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Opportunities for Australian companies

• Food

• Food

Drivers

1. “Make in India” initiative – aim to increase manufacturing output from 16- 25% GDP (2025)

2. Manufacturing Industry presents USD 8 billion opportunity for ICT sector (2017)

3. Indian automotive sector – current value US$ 90 billion, 3 million passenger cars per year

4. Civil aviation sector growth of over 41% in passenger traffic in 2 years

5. Ranks 8th globally in military spending & US$ 4 bn to be invested in defence over 7-8 years

6. 3rd largest armed forces globally(budget US$ 37.3 billion in 2014), focus on Armed Forces

Modernization and Defense Offsets

Technologies - Air & ground traffic management, security systems, cyber security, optimization, big

data, mobility, cloud computing, The Internet of Things, simulation.

Drivers

1. Shortfall in electricity generation, energy cost is driver for energy efficiency solutions

2. Ambitious target to increase capacity to generate 55 GW RE by 2022

3. Government action mandating reduction targets in high energy industries, trading mechanism

4. National Smart Grid Mission -130 mn Smart Meters(2021).14 Smart Grid Pilot Projects underway

5. National Mission for Clean Ganga - US$ 400 mn programme to clean 10 river front towns/cities

6. 16% of worl’d population & 4% water resources – demand to rise by 20% in 2020

7. Environment technologies market valued at US$ 14.29 bn

Technologies - successful integration of intermittent renewable energy into grid, smart systems

for energy generation, management, transmission and usage, monitoring, simulation, water

utilization & treatment, waste management, capture and reuse solutions.

MANUFACTURING

RENEWABLES,

& ENERGY

EFFICIENCY

WATER

Source: IBEF

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Opportunities for Australian companies

• Food

• Food

Drivers

1. Health expenditure only 4 per cent of GDP (2012)

2. Capacity constraints - 700,000+ beds required in 6 years, investment opportunity of US$ 25-30 bn

3. Increase in lifestyle diseases

4. Industry growth around 14 % pa rising from US$70 billion to US$280 billion (2020).

5. Aged care - 320 million citizens over 60 yrs, 48 million people over 80 yrs (2050)

6. Reach - 70% of India’s population lives in rural areas

Technologies - Commercialise Australian research, med technologies & collaborate on data

analytics, and bio-informatics, remote locations services - e-health, tele-medicine, remote monitoring,

and remote diagnostics.

Drivers

1. Services sector accounts for 57% GDP

2. Banking assets US$ 1.8 trillion (FY14) & to be US$ 28.5 trillion (FY25)

3. Mutual fund industry on all-time high of US$ 189.83 billion

4. Equity funds had inflows of US$ 825.49 million

5. Life insurance sector biggest in the world & 15th largest insurance market in terms of volume

Technologies - systems integration & optimisation across the financial services, banking & insurance

sectors, cyber security and privacy systems, payment technology, multi-channel customer support

platforms and software to support regulatory reporting.

HEALTH

FINANCIAL

SERVICES

Source: IBEF

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• Food

Opportunities for Australian companies

Source: Ernst and Young 2015; PWC 2015, IBEF

Drivers

1. Cities - 100 Smart cities program - US$ 10bn per city

2. Road Safety - loss of >150,000 lives & >500,000 road accident every year, considerable budget

allocated by State governments & international agencies for safety technologies

3. Rail - modernisation of rail network including safety, operational and energy efficiency, investment of

US$93 billion in capacity addition (12th Five-Year Plan - 2012-17)

4. Ports - modernization of port infrastructure, transformation in to world class ports & improvement of

hinterland (port connectivity highway project US$ 310 million)

Technologies - support operational efficiencies, remote resource monitoring (visualisation, simulation

to maximise efficiency of loads and handling) systems integration mobility (cloud) technologies,

intelligent transport systems and technology, predictive analytics, sensor technologies, smart grids,

smart meters, simulation systems, safety

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Pathways to market

Australian ICT exporters Niche applications for Indian domestic market

Strategic alliances with India’s IT majors to support international customers

and markets

Australian research institutions and technology Attract Indian investment into Australia’s innovation development - R&D

strengths and commercialisation potential

Australian research and innovation hubs / centres Create linkages with Indian business, universities, research bodies &

government.

VET providers Participate in digital upskilling of Indian IT sector

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Profiling Australian capability to India

MEETING WITH INDIAN SYSTEMS

INTEGRATOR

AUS COMPANIES IDENTIFICATION

&

OPPORTUNITY COMMUNICATION

INDIA VISIT BY

AUSTRALIAN COMPANY

VIDEO CONFERENCE CONNECTION

AND

DISCUSSION OF BOTH PARTIES

RE-SELLER AGREEMENT SIGNED

+

FIRST CONTRACT AWARDED

Australian Hospital Mgt software for Indian market

INFORMATION ON MARKET

&

CUSTOMER PROVIDED

LEVERAGED STATE GOVT

AND

INDUSTRY ASSOCIATION NETWORKS

FREQUENT MARKET VISITS TO

DEMONSTRATE COMMITMENT

INDIAN COMPANY SITE VISIT TO

AUSTRALIA

VISIT BY AUS TECHNICAL PERSON TO

INDIA FOR 6 WEEKS

LARGEST INDIAN IT COMPANY CONTACTED

AUSTRADE TO IDENTIFY TECHNOLOGY

PROVIDERS FOR GLOBAL CUSTOMERS

LINED UP > 50 AUS IT START-UPS

INDIAN COMPANY TECHNICAL TEAM

REVIEW AND SHORTLIST

State Govts, ICN, Enterprise

Connect, Commercialisation

Australia, NICTA

Opportunity for IT Start Ups to be a part of global supply chains

AUSTRALIA SITE VSIIT BY INDIAN

COMPANY DECISION MAKERS FOR

DETAILED DISCUSSIONS

OUTCOME: Agreement between Australian

start-ups and Indian IT major for the US and

European markets

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How Austrade can help you

Our strength is in our NETWORK

Austrade has 10 offices inIndia & strong industry contacts in

major centres and Tier II cities

Our network provides market insightsto Australian companies entering the

market to help them select the:

• projects

• partners

• locations to give them the greatest chance of

success

Austrade India IT team

Amanda Hodges

Trade and Investment Commissioner, Mumbai

Amanda.hodges@austrade.gov.au

Malini Dutt

Investment Manager, Mumbai

malini.dutt@austrade.gov.au

Grace Ann Lobo

Investment Manager, Mumbai

Graceann.lobo@austrade.gov.au

Nicola Watkinson

Senior Trade and Investment Commissioner

Nicola.watkinson@austrade.gov.au

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Key IT events/activities - FY 2015/16..don’t miss the

opportunity!

• October - November 2015: Australian IT Innovation and Technology

Virtual Showcase to India 2015 - Applications close on 15 Oct 2015

• February 2016: Australian ICT CoE Mission to India - Presenting

Australian IT centres of excellence to Indian multinational corporations

• Marketing & Media campaign - Austrade India innovation website

• Independent market visits by Australian organisations

• Indian companies (Customer and Investor) Targeting and Profiling

followed by Australia site visits

Thank you