Transcript Doing Business with India

“….I want to appeal to all "Few nations have the growth
the people world over…..
potential that lndia already
…Come, Make in India.
enjoys. lndia holds the
Sell anywhere but
promise of a most
manufacture here….”
successful future..."
-Hon’ble Prime Minister, Shri
Narendra Modi, in his Independence
Day, 15th August 2014 Address.
Klaus Schwab,
Founder and Executive Chairman, World
Economic Forum, at the lndia Economic
Summit 2009, New Delhi, 8 – 10 November
2009
 Land area
 Capital
 Population
 Languages
 Major international airports
3.29 million sq km
New Delhi
1.21 billion (2011)
Hindi(official language of the Union) English
(business language)
Ahmedabad, Amritsar, Bangalore, ChennaiGoa,
Guwahati, Hyderabad, Kochi, KolkataMumbai,
New Delhi, Thiruvananthapuram
 Major seaports
Mumbai, New Manqalore, Kolkata. Kandla,
Kochi, Chennai, Ennore, Haldia, Mormugao,
Paradip, Tuticorin, Vishakapatnam
 Major cities
New Delhi, Mumbai, Kolkata, Chennai,
Bangalore, Hyderabad, Pune, Lucknow, Kanpur
 Time zone
5 hours 30 minutes ahead of Greenwich Mean
Time (GMT)
lndian rupee (lNR)
 Currency unit
India’s total merchandise trade was $ 765 billion in 2013-14.
EXPORTS
2012-13
2013-14
2014-15 (Apr-Jun)
$ 300.401 billion
$ 314.405 billion
$ 76.032 billion
IMPORTS
2012-13
2013-14
2014-15 (Apr-Jun)
$ 490.737 billion
$ 450.198 billion
$ 113.015 billion
India’s Top Export Markets for 2013-14
No.
Country
1.
USA
39.14
2.
UAE
30.52
3.
China
14.82
4.
Hong Kong
12.73
5.
Singapore
12.51
6.
Saudi Arabia
12.22
7.
UK
9.78
8.
Netherlands
8.00
9.
Germany
7.52
10.
Japan
6.81
India’s Total Exports
Source: Dept. of Commerce, New Delhi
Total Exports
(in $ bn.)
$ 314.41 billion
No.
Country
1.
China
51.03
2.
Saudi Arabia
36.40
3.
UAE
29.10
4.
USA
22.51
5.
Switzerland
19.31
6.
Iraq
18.52
7.
Kuwait
17.15
8.
Qatar
15.71
9.
Indonesia
14.75
10.
Nigeria
14.01
India’s Total Imports
Source: Exim Bank
Total Imports (in $ bn)
$ 450.20 billion
India-Tanzania Trade 2013
(Source : TRA)




Tanzanian imports from India
- $ 2308.71 million
Tanzanian exports to India
- $ 752.17 million
Total bilateral trade
- $ 3060.88 million
Tanzania’s bilateral trade with top five partners:
India
- $3060.88
Switzerland - $ 2026.65
China
- $ 1905.28
South Africa - $ 1494.25
UAE
- $ 1277.86
Total trade between India and Tanzania from 01 April 2013 to
31 Mar 2014 [as per Indian Government figures] - $4125 million
India-Tanzania Trade 2014
(January to June)
(Source : TRA)
 Tanzanian imports from India
 Tanzanian exports to India
 Total bilateral trade
- $1565.79
- $ 381.66
- $ 1947.45
 Main items of export from Tanzania – gold, cashew, pulses,
spices (cloves), precious stones, cotton, timber, etc.
 Main items of import from India – petroleum products,
medicines, machinery, motor vehicles, motor cycles,
including three-wheelers (Bajajis), tractors, wires and
cables, chemicals, plastics, etc.
Indian Investments in Tanzania
(Sources: TIC & EPZA)
 Investments with Indian interests ;
Cumulative Total from 1990 to 2013 (as per TIC) - US $
1.96 billion supporting over 52,000 local jobs
Investments with Indian interests in EPZAs
Cumulative Total - US $ 497.12 supporting over 3600
local jobs
Total Indian Investments in Tanzania US $ 2.46 billion
supporting over 55,600 local jobs
India’s Major Exports to Africa
 Mineral fuels and petroleum products
 Vehicles
 Pharmaceuticals
 Electrical and electronic equipment
 Machinery
 Iron and steel and Items of iron and steel
 Cotton
 Plastics and articles
India’s Major Imports from Africa
 Crude oil and mineral fuels
 Pearls and precious stones
 Un-wrought and semi-manufactured gold
 Inorganic chemicals
 Edible fruits and nuts
 Iron and steel
 Fertilizers
 Ores and slag
Make in India
 PM Modi launches ‘Make in India’ campaign in New
Delhi on 25 September 2014
 Simultaneous / coordinated launch events organized
all over India and in many capitals across the globe
including in Dar es Salaam
 Basic features – (a) develop robust manufacturing
sector in India so that its contribution rises to 25% of
GDP from current 15%; (b) Government will create
enabling environment for this to happen; and (c)
Some measures have already been initiated* and
results are showing [See next slide]
Make in India – Ease of Doing
Business
 Six best practices on grant of clearances recommended to States, many which
have already adopted
 Process of applying for Industrial License (IL) and Industrial Entrepreneur
Memorandum (IEM) has been made online on 24 X 7 basis
 Registration with Employees Provident Fund Organization (EPFO) and
Employees State Insurance Corporation (ESIC) have been automated –
registration number given on real time basis
 Vide Press Note No. 3 (2014) large number of defence industry
parts/components, castings/forgings, dual use items, etc, have been excluded
from purview of industrial licensing
 Vide Press Note No. 5 (2014) validity period of IL has been increased from
two to three years
 Security clearance on IL applications will be granted within 12 weeks
 Partial commencement of production is being treated as commencement of
production of all items included in IL
 eBiz Project being developed top create investor centric hub-and-spoke based
online single window model for providing clearances and filing compliances
Why Make in India?
 Manufacturing will not only spur new jobs in India but also
increase the size of the market
 Attractive to manufacturers to sell in India and abroad
 PM’s catch phrases
“zero defect, zero effect” manufacturing practices
“efficient, effective and simple governance”
Manufacturing in India is driven by “democracy,
demographic dividend and demand”
“Red carpet for investors, not red tape”
In India, FDI stands for ‘First Develop India’ as also
‘Foreign Direct Investment’
Foreign Direct Investment FDI
Most Sectors are open to FDI under automatic route; only a few
sensitive sectors are closed for foreign investment
Some Sectors have a cap of between 49% to 74% of FDI – the rest
have 100% FDI facility
Some of the sectors with 100% FDI under automatic route are:
Non-banking financial companies (NBFC); Coal and Lignite
Mining for captive consumption of power projects, and iron and
steel and cement production; power production; software
development; electronic hardware, film industry, advertising,
hospitals, hotels, food processing, private oil refineries, telecom
products, airports (green-field projects); manufacture of drugs
and pharmaceuticals, industrial parks; SEZs; etc
Sectors Attracting Highest
FDI Inflows (2012)
Sector
Percentage to Total Inflows
Services sector [Financial & Non-Financial]
19%
Construction Development: Townships, Housing Built-Up 12%
Infrastructure
Telecommunications [Radio Paging, Cellular Mobile, Basic 7%
Telephone services]
Computer Software & Hardware
6%
Drugs & Pharmaceuticals
5%
Chemicals [other than fertilizers]
5%
Power
4%
Automobile Industry
4%
Metallurgical Industries
4%
Hotel & Tourism
3%
Source: Dept. of Industrial Policy & Promotion, New Delhi
India has the potential to offer myriad of opportunities for foreign investors across a
wide gamut of manufacturing sectors (1)
Auto
Auto components
Defence
Overview
 Likely to become 3rd largest
auto market in the world by
2016, accounting for more
than 5% of the global vehicle
sales
 India’s is 2nd largest two
wheeler manufacturer, largest
motor cycle manufacturer and
5th largest commercial vehicle
manufacturer
 Expected size by 2016 is USD
145 billion.
 Worth USD 39.7 billion in
FY2012–13
 India’s exports of auto
components increased at a
CAGR of 17% during 200813; Exports have risen to
USD 9.7 billion in 2012-13
 3rd largest armed forces in the world.
 Largest importer of conventional defence
equipment
 70% of defence requirements are met
through imports
 Defence budget in 2014-15 is USD 38
billion, expected to reach USD 50 billion
by 2018
Investment
opportunities
 Passenger Vehicles
 Two Wheelers
 Three Wheelers
 Commercial Vehicles
 low cost electric vehicles
 Engine & Engine Parts
 Transmission & Steering
Parts
 Suspension & Breaking
Parts
 Electrical parts
 Manufacturing of defence equipment
 Maintenance, repair and overhaul
segment
 Engineering services outsourcing
FDI policy
100% FDI is allowed under the
automatic route
100% FDI is allowed under
the automatic route
Up to 49% under the government route
and beyond 49% through CCS (in case of
transfer of technology)
Opportunities
Electrical Equipments
ESDM
Pharmaceutical
Overview
 Estimated output by 2022 approx.
USD 100 billion
 The market expanded at a CAGR of
10.5 per cent over (FY07–12).
 Worth USD 68.31 billion in 2012;
anticipated to be USD 94.2 billion
by 2015; CAGR of 9.88% between
2011 and 2015
• Accounts for about 2.4 % of
the global pharma industry in
value terms and 10% in
volume terms
• Expected to grow at 12.1%
during 2012–20
• Expected to reach USD250
billion by 2020 from the
current USD65 billion
Investment
opportunities
 Generation
Machinery:
Turbines, Generators
 Transmission Machinery
 Consumer electronics
 Strategic electronics
 Medical electronics
 Avionics
 Fabless manufacturing
 Automotive electronics
 Electronic Manufacturing Services
 EMCs
• Active pharmaceutical
ingredients (APIs)
• Contract research and
manufacturing services
(CRAMS)
• Formulations
FDI policy
100% FDI is allowed under the
automatic route subject to all the
applicable regulations and laws.
100% FDI through automatic route
for ESDM except for defence
electronics
• 100% FDI is allowed under
the automatic route for
Greenfield projects.
• For brownfield project
investment up to 100% is
under the government route.
Boilers,
Opportunities
Construction
Food Processing
Leather
Overview
 Second largest employer and contributor to
economic activity, after agriculture sector.
 Accounts for 2nd highest FDI inflow after the
services sector
 Worth USD 78.5 billion in FY13; expected to
grow to USD 140 billion in FY17.
 Industry size is Rs 845 billion in
2012-13, growing at 8.4% for
the last five years ending 201213
 Value addition of sector as
share of GDP manufacturing
was 9.8% in 2012-13
 Industry size approx. USD 11
billion (exports - USD 6
billion and domestic market USD 5 billion)
 Exports projected to grow at
24% pa in next five years.
Domestic market expected to
double in next five years.
Investment
opportunities
 Residential,
retail,
commercial
and
hospitality sectors
 Technologies and solutions for sustainable
cities, low cost and affordable housing,
Green building solutions, environment
friendly building materials
 Training and skill development of
construction sector workers
 Smart cities
 Urban water supply; urban sewerage &
sewage treatment
 Fruits and Vegetables
 Fermentation products
 Beverages
 Dairy
 Food additives, nutraceuticals
 Confectionary and bakery
 Meat & poultry
 Fish and sea foods processing
 Grain Processing
 Food packaging
 Food processing equipment
 Consumer food
 Tanning and finishing of
leather products
 Manufacturing of leather
garments
 Manufacturing of leather
footwear and footwear parts
 Manufacturing of leather
goods, such as harness and
saddlery.
FDI Policy
100% FDI is allowed under the automatic
route subject to conditions. Norms for
foreign investors in real estate sector have
been relaxed since Oct 2014.
100% FDI through automatic
route for most of the food
products
except for items
reserved for MSME.
100% FDI is allowed under the
automatic route subject to all
the applicable regulations
and laws.
Opportunities
Chemicals Petrochemicals
Oil & Gas
Textile
Overview
 Size of the industry (2012-13) is
around USD 144 billion
 India accounts for approximately
16% of the world production of
dyestuff and dye intermediated
 The polymer demand is expected
to grow by 8-10% with a healthy
growth in clothing, automobiles,
etc.
 4th largest consumer of crude oil
and petroleum products in the
world (2013)
 Oil imports constitute 80% of
India’s
total
domestic
oil
consumption (May 2014).
 At the end of 2013, India had
215.066 MMTPA of refining
capacity, making it the secondlargest refiner of crude oil in Asia.
• 2nd largest textile
manufacturing capacity
globally
• Sector contributes 14% to
industrial production and
4% to GDP and 13% of
country’s export earnings
• Domestic textile and apparel
industry is estimated to
reach USD 100 bn by 2017
from USD67 bn in 2014.
• Exports are expected to
increase to USD 65 bn by
2017 from USD 40 bn in
2014
Investment
opportunitie
s
 Petrochemicals
 Specialty chemicals
 Agrochemicals
 Colorants
 Technical training
 Underground coal gassification
 E&P services and equipments
 City gas distribution
 Refinery
 Technology
partnerships
in
upstream sector
• Entire value chain of
Synthetics
• Values added and speciality
fabrics
• Technical Textiles
• Garment
• Retail Brands
FDI policy
100% FDI is allowed under the
automatic route subject to all the
applicable regulations and laws.
FDI is subject to the existing sectoral
policy and regulatory framework
and varies across the value chain
• 100% FDI is allowed under
the automatic route in
textile sector
◊ Stable and democratic political environment & responsive
administrative set up
◊ Well established judiciary to enforce the rule of law
◊ Land of abundant natural resources and varied climatic
conditions
◊ Investor friendly policies and incentive based schemes
◊ Cost competitive labour force of nearly 530 million
◊ large pool of skilled manpower with significant English
speaking population
◊ Young country with a median age of 30 years by 2025
What drives India?
● Talented Workforce
● Hub of Innovation
● World’s IT Nucleus
● Leader in Carbon Credits
● Leading Innovator of technology and processes for
developing countries
Combination of macro-economic planning focussed
on development, public-private partnership in
infrastructure, domestic demand, and a sound and
well-administered financial system
● Large number of households without basic assets –
huge untapped market potential
● Massive reduction of import duties and rationalization
of direct and indirect tax structures
● Robust banking and financial institutions
● Full current account convertibility
● Sustained economic reforms since 1991
● India – Your reliable partner
Entry Options in India
Entry for doing business in India, be it trading,
manufacturing or in the service industry.
How does a foreign entity or national set up a business
in India?
Details on types of office, repatriation of funds, form
of enterprise, economic laws and regulations, visa and
entry requirements, taxes, etc, can be found at the
website of INVEST INDIA at
http://www.investindia.gov.in/
Sectors to look out for
◊ ELECTRICITY GENERATION – fifth largest generation
capacity with third largest transmission and
distribution network
◊ STEEL – Production to rise to 100 MPTA by 2019-20
◊ AVIATION –Poised to emerge as third largest market
by 2020; will generate 2.6 million jobs
◊ REAL ESTATE – Worth $ 66.8 billion estimated CAGR
of 19% between 2010 and 2014
◊ RETAIL MARKET – fifth largest globally, expected to
grow to $ 804 billion by 2015
Sectors to look out for
▪ HEALTHCARE – To become a $ 100 billion industry by
2015
▪ BIOTECHNOLOGY – With 380 biotech companies
ranked among top 12 companies
▪ PHARMACEUTICALS – Unique programme launched
to discover drugs for infectious diseases common to all
developing countries
▪ TOURISM – 1.6 billion tourists expected by 2020;
adding over 100,000 classified hotel rooms by 2013
ASANTENI SANA
DHANYAVAD
THANK YOU
High Commission of India
Dar es Salaam
www.hcindiatz.org