GDP of $ 1.7 trillion (4th largest economy in the world)
GDP growth rate of 8% ( year ending March 2012)
FDI inflow of $ 48 billion in the last two years
Key Statistics
Positive Trend
Population 1.1 billion ( 70% rural)
27% of the population below the poverty line in 2005 vs. 53% in 1978
63% literacy rate in 2006 vs. 53% in 1978
Indus Valley Civilization flourished during the 3rd and 2nd
millennia B.C.
The Classical Indian culture dates from around 1500 B.C.
Influence spread through seaborne trade
British rule from the 19th century till 1947
Parliamentary system, based on the Constitution, with power divided between the Center and the States
History
The Turning Point
The collapse of the Soviet Union, which was India's major trading partner, and the Gulf War, which caused a spike in oil prices, resulted in a major balance-of-payments crisis for India, which found itself facing the prospect of defaulting on its loans
In response the Govt. initiated economic liberalization in 1991
The reforms did away with the “License Raj” reduced tariffs and interest rates and ended many public monopolies, allowing automatic approval of foreign direct investment in many sectors.
Results
India has progressed towards a free-market economy, with a substantial reduction in state control of the economy and increased financial liberalization.
This has been accompanied by increases in life expectancy, literacy rates and food security,
Sector % of GDP % of the Labor
Force
Agriculture 18.5% 52%
Industry 26.3% 14%
Services 55.2% 34 %
The Economy
Agriculture Industry
Rice,Wheat,Cotton, Oilseeds,Sugarcane,Tea,Onions,Potatoes, Jute, Dairy,Poultry,Fruit
Textiles,Chemicals, Steel,Mining,Cement,Transport,Pharma,Food Processing,Machinery
Globalization’s promise has been fulfilled
High-productivity employment opportunities have expanded and structural change has contributed to overall growth.
Not so much in productivity growth within individual sectors, where performance has been broadly similar across global regions, but in ensuring that the broad pattern of structural change contributes to, rather than detracts from, overall growth
Foreign Trade
Major export commodities include engineering goods, petroleum products, chemicals and pharmaceuticals, gems and jewelry, textiles and garments, agricultural products, iron ore and other minerals.
Major import commodities include crude oil and related products, machinery, electronic goods, gold and silver.
Private consumption has reduced from 60% to 50%
of GDP while investment has grown from 42 to 50% India will see further reduction in poverty Middle class is expected to grow tenfold. Urban areas will continue to grow-there are already
20 cities with more than 1.6 million inhabitants –potential consumers, entrepreneurs and industrial/service workers
Economic Prospects
Citibank since 1902 Colgate since 1937 P&G (predecessor) since 1951 IBM since 1951(left in mid-70’s and came back in
1997) Cummins since 1962 Bank of America since 1964
American presence in India
US-India Business Council Silicon Valley and other networks Five US Consulates in India Rotary, Lions, Alumni groups NGO’s: Ford, Rockefeller and Gates Foundations Cooperation in Defense, Scientific Research, Higher
Education
Indo-US Groups
US Govt. Presence
The new consulate compound will house all United States Government offices in Mumbai, including the Department of State, the Foreign Commercial Service, the U.S. Food and Drug Administration and the Foreign Agricultural Service.
Pharmaceuticals/ Health Care IT Auto components Other services Cut Diamonds Garments Engineered products Chemicals
Strengths
Electronics manufacturing
Infrastructure/Transportation/Power/Water
Green technologies
Agriculture/Food Processing
Weaknesses
Urgent need for:
Zero Waste/ Landfills
Low Emission
Reduction in water use/ Wastewater recycling
Energy Saving/ Renewable Energy
Improved productivity from small holdings Soil degradation Irrigation Food storage and processing Low-cost nutrition Diabetes- from two sources
Meeting Food Needs
Liaison office Through an Agent/Distributor Assembly or Manufacture in India Technology licensing US Exim-Bank support The Partnership route
How to go in
Growing economy and large numbers of wealthy and
middle-class people
Diversified economy, with competitive business people looking for new technologies and opportunities
Why go to India
Support
Established set-up for doing business: English speaking, Banking & Trade Finance, Law firms, Media ( print, television, social media), CPAs, Insurance
International airports accessible from East and West, international standard hotels, communication and health care.
Automatic approval except for certain sectors
Investment in restricted sectors or where there are sector caps: approval of the Ministry of Finance-Foreign Investment Promotion Board
Inflow and outflow of funds under the authority of the Reserve Bank of India
Investment Procedure
Laboratory to adapt products and build up a supply
base for developing markets Export location for Middle East, Africa, Russia/CIS
and SE Asia American systems, procedures and efficiencies can
build competitiveness Large population of educated young people-
welcome a chance to work in a professional environment
Unique Reasons to go to India
Source of technical and managerial talent-men and
women
Indian companies are venturing overseas-deals worth $5.89 billion during the first half of 2011
India is a Democracy
More Reasons
National pride and confidence in their education,
achievements, background and culture Awareness of global issues Interest in discussing political and other current
topics Negative issues
CULTURAL FACTORS
80% Hindu, 14% Moslem, 2% Christian, 1.3% Sikh
Close family ties-arranged marriage
Vegetarian
Each State is unique
CULTURAL FACTORS
“You’ve got to start with the customer experience and
work backwards to the technology. You can’t start with the technology and try to figure out where you’re going to try and sell it…” –Steve Jobs
The Wisdom of Jobs
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