Transcript India and The Midwest - Consulate General of India

Consulate General of India
Chicago
Indian Economy
• According to IMF, India’s GDP was nominally worth US$ 2.047 Trillion (2014) – 11th
Largest by Market Exchange Rates
• GDP on the basis of Purchasing Power Parity (PPP) is US$ 7.277 Trillion (2014) – 3rd
Largest in the World.
• GDP in PPP Projected to grow
8,550.04 T (2016)
11,044.01 T (2019)
• India’s economy grew at an average of 8.5% per annum during the period 2004-05 to
2010-11. Even in the crisis year, 2008-09, India recorded a GR of 6.7% and followed up
with 8.6% in 2009-10 and 9.3% in 2010-11. Two decades of robust economic growth
gave rise to the so-called “Indian Economic Miracle”.
• India's Ministry of Statistics & Programme Implementation (MOSPI) projected economic
GR at 7.5% YoY (real growth) for Oct-Dec 2014 quarter. Advance estimates for FY15
(Apr-Mar) has been reckoned at 7.4%.
Indian Economy
Indian Economy
• Inflation for Jan 2015 is stable at 5%. Core inflation is down to 3.9%. Inflation
expected to remain at low levels, facilitated by lower international crude oil prices.
• RBI has reduced interest rates in January 2015 from 8% to 7.75%.
• India’s forex reserves reached an all-time high of USD 330 billion (Feb’15), $11
billion reserves added in only four weeks. India currently has the 10th highest forex
reserves in the world.
• India's external debt coverage ratio fell to 70% of total external debt in 2014 from
over 130% in 2008. External Debt is pegged at US$ 450 billion.
• Rupee is firm & strengthened ~3% against the US dollar in January 2015
• Stock market has boomed. Foreign investors remain keen buyers of Indian assets.
• Foreign institutional investors poured in USD 3.4 bn into the equity and debt
markets during Jan’15.
Indian Economy
• Total value of India’s listed
companies expected to cross US$ 1.5
trillion as India enters top 10 club of
countries by Market Capitalization.
Over 98,000 new domestic & 216
foreign companies registered in
India during FY 2013-14.
• According to the Hurun Global Rich
List 2015, India has the third largest
number of billionaires (97), behind
China (430) and US (537). India
added 27 new billionaires this year.
Combined wealth adds up to $266
billion.
• According to Boston Consulting
Group (BCG), India is poised to
become world’s 7th biggest
nation in terms of private
wealth, with 150% increase in
total from US$ 2 trillion (2013)
to US$ 5 trillion (2018).
• India is ranked among the top
four countries showing
absolute gains in wealth (along
with USA, China & UK).
•
Series of Economic Reforms.
•
Implementing long-awaited goods &
services tax (GST)
•
Expanding Infrastructure, promoting
manufacturing, Skills Development &
Job creation.
•
Infrastructure Investment Trusts
•
Real Estate Investment Trusts
•
Ease of Doing Business in India
•
Disinvestment of PSUs to generate
$ 9.5 billion, including Oil Majors.
•
“Red Carpet instead of Red Tape”
•
Develop more airports in PPP
•
Visa on Arrival (VOA) scheme to
facilitate business travelers.
•
Bullet Trains
•
100% FDI in Railway infrastructure
•
FDI in Defense & Insurance sectors
raised from 26% to 49%.
•
FDI in Construction sector being
liberalized.
•
Deregulation of Diesel and Petrol
•
Passing of Insurance Bill, Pension
Sector Reforms
•
Simplification of the land acquisition
laws
• 25 key sectors identified :
• Automobiles, Auto
• India’s manufacturing sector contributed
only 13% to its economic output in 2013.
• ‘Make in India’ launched in September 2014
• Aims at transforming the economy from the
services-driven growth model to laborintensive manufacturing-driven growth.
• Increase productivity.
• Attract foreign companies to set up factories
in India & invest in infrastructure.
• According to McKinsey, India’s
Manufacturing sector to touch US$ 1 trillion
by 2025.
components, Aviation,
Biotechnology, Chemicals,
Construction, Defense
Manufacturing, Electrical
Machinery, Electronics, Food
Processing,
• IT, Leather, Media &
Entertainment, Mining, Oil &
Gas, Pharmaceuticals, Ports,
Railways, Renewable Energy,
Roads & Highways, Space,
Textiles & Garments,
Thermal Power, Tourism &
Hospitality & Wellness.
Smart Cities
• GOI has mooted 100 Smart Cities across India. US
to develop three smart cities - Ajmer, Allahabad
and Visakhapatnam.
• Smart Cities to be equipped with an array of
modern state-of-the-art technologies, including
24-hour power supply, Internet of Things (IoT),
Machine to Machine (M2M) communication,
Mobility, excellent public transport systems,
pneumatic waste management system.
• By one estimate, the smart cities market is
projected to hit $1.5 trillion by 2020.
• Countries like Japan, Germany, Sweden, Singapore,
Israel, UK, US, Hong Kong and the Netherlands,
besides MNCs, have shown interest in building
smart cities in India.
Delhi-Mumbai (DMIC) Corridor
• GOI developing the Delhi-Mumbai
Industrial Corridor ( DMIC) as a global
manufacturing and investment
destination utilizing the 1,483 km-long,
high-capacity western Dedicated
Railway Freight Corridor (DFC) as the
backbone.
• 24 manufacturing cities are envisaged
in the perspective plan of the DMIC
project.
• These cities will provide international
and domestic investors with a diverse
set of vast investment opportunities.
• In the first phase, seven cities are
being developed, one each in the
states of UP, Haryana, Rajasthan, MP
and Gujarat and two in Maharashtra.
• The initial phase of the new cities is
expected to be completed by 2019.
• Sectors of focus include general
manufacturing; IT/ITES;
electronics including high-tech
industries; automobiles and auto
ancillary; agro and food
processing; heavy engineering;
metals and metallurgical
products; pharmaceuticals and
biotech; and services sector.
Swachh Bharat Abhiyan Clean India Mission
• A national campaign
launched on 2 October 2014
by GOI, covering 4041
statutory towns, to clean
streets, roads and
infrastructure of the country.
• This campaign aims to
accomplish the vision of a
'Clean India' by 2 October
2019, the 150th birthday of
Mahatma Gandhi. It is
expected to cost over US$9.7
billion.
Specific objectives:
• Conversion of insanitary toilets to pour flush
toilets
• 100% collection and scientific processing,
disposal, reuse/recycling of municipal solid waste
• A behavioral change in people regarding
healthy sanitation practices
• Generation of awareness among citizens about
sanitation and its linkages with public health
• Supporting urban local bodies in designing,
executing and operating waste disposal systems
• Facilitating private-sector participation in
capital expenditure and operation and
maintenance costs for sanitary facilities
Pradhan Mantri Jan Dhan Yojana
(Prime Minister's People Money Scheme )
• As of 2012, only 35% of Indians older than 15 years had bank accounts in a
formal financial institution; against Av. of 41% in other developing countries.
• There are only 229 million basic bank accounts in India. Thousands of villages
still lack a bank branch; less than 10% of all commercial bank credit goes to
rural areas, where around 70% of the total population lives.
• A scheme for comprehensive financial inclusion was launched by PM Modi
on 28 August 2014 to provide universal access to banking facilities. Initial
target was opening of 75 million accounts per year.
• Run by Department of Financial Services, Ministry of Finance, on the
inauguration day, 15 million bank accounts were opened under this scheme
and around US$1.7 billion were deposited.
• Also has an option for opening new bank accounts with zero balance.
Digital India
• Digital India aims to
transform India into a
digitally empowered society
and knowledge economy.
• 400,000 Public Internet Access Points
• Wi-fi in 250,000 schools, all universities;
Public Wi-fi hotspots for citizens
central to enabling change.
• Digital Inclusion: 17 million trained for
IT, Telecom and Electronics Jobs
• Job creation: Direct 17 million and
Indirect at least 8.5 million.
• e-Governance & eServices
• India to be leader in IT use in services –
health, education, banking
• Digitally empowered citizens – public
cloud, internet access
• Focus is to make technology
• Overall Costs would be ~ Rs
5 billion
Impact of Digital India - 2019
•
Broadband in 250,000
villages, universal phone
connectivity.
•
Net Zero Imports by 2020
MyGov (mygov.nic.in)
• MyGov aims to help citizens contribute in governance by giving their
opinions and views on important socio-economic issues.
• MyGov is a technology-driven medium that will provide citizens an
opportunity to contribute towards good governance.
• It is also an initiative to build a digital knowledge library. People share their
views and ides on the topics of national importance. The platform presents
an opportunity for the citizens to both ‘Discuss’ and ‘Do’.
• Groups: Girl Child Education, Caring for the Specially-Abled, Clean India, Tribal
Development, Challenges in Petroleum Sector, Chemicals & Petrochemicals, Clean Ganga,
Consumer Protection and Internal Trade, Digital India, Disaster Resilient India, Energy
Conservation, Expenditure Management Commission, Food Security, Green India, Healthy
India, Incredible India, Indian Railways, Job Creation, New Education Policy, Skill
Development, Sporty India, Watershed Management, Youth for Nation-Building, etc.
India Partners
• Consultant Partners - TMF India Pvt. Ltd, Ernst and Young India,
Grant Thornton Advisory Private Limited, KPMG India Pvt. Ltd.,
PricewaterhouseCoopers Pvt. Ltd., SKP, Vaish Associates Advocates
• MoU Partners - Japan External Trade Organization(JETRO), Korea
Trade-Investment Promotion Agency(KOTRA), UK Trade &
Investment(UKTI), Ubifrance, Invest in France, Board of
Investment Mauritius, Select USA, Czech Invest
• Joint Venture Opportunities - Invest India, as a part of its
investment facilitation service to foreign investors, also assists
them in finding partners based in India on the basis of requests
received.
Investment Opportunities – Invest India
• Automobile: Huge demand for low-cost electric vehicles that are
suited for safe short-distance urban commutes (averaging 50-100
km/trip). It is estimated that total electric vehicles sales would
amount to 6-7 Million units by 2020.
• Biotechnology - India constitutes around 8% of the total global
generics market, by volume, indicating a huge untapped
opportunity in the sector.
• Defence Manufacturing - Up to 49% investment is allowed under
the government route. Investment Opportunities include Defence
products manufacturing, Supply chain, sourcing opportunity,
Defence offsets.
Investment Opportunities – Invest India
• Pharmaceuticals - India is expected to be the third largest global
market for active pharmaceutical ingredients by 2016, with a 7.2%
increase in market share. The Contract Research and Manufacturing
Services industry (CRAMS) – estimated at USD 8 Billion in 2015. India
is the largest exporter of formulations with 14% market share and
ranks 12th in the world in terms of export value. Double-digit growth is
expected over the next five years.
• Renewable
Energy - India has vast untapped renewable energy
resources — wind energy has installed capacity of 21.1 GW and an
estimated potential of 102.8 GW. Small hydro has installed capacity
of 3.8 GW and an estimated potential of 19.7 GW. India raises solar
investment target to $100 bn by 2022. U.S.-based First Solar and
SunEdison Inc have sizeable businesses in India, and together with
local firms plans to invest $6 billion.
Invest India
Advantage India
•
Word Bank’s latest Global Economic Prospects Report
predicts India’s GDP growth at 6.8% in 2006 & 7.7% (2017.)
•
IMF’s World Economic Outlook predicts that in 2016, India’s
GDP growth rate of 6.6% would overtake China’s 6.3%.
•
The Indian consumer market will grow 2.5 times by 2025.
Over 400 million-strong Middle Class provides huge market.
•
India’s capital markets operate with much efficiency and
transparency.
Advantage India - Demography
•
Dynamic transformation : So-called “population burden” is
being converted to a “demographic dividend”.
•
> 50% of India’s population is <25 years and >65% is < 35.
•
540 million young Indians under the age of 25. Every third
person in an Indian city is a youth.
•
In 2020, the average Indian is expected to be only 29 years
old, compared with 37 in China and the U.S., 45 in West
Europe and 48 in Japan. This is India’s vast untapped
potential, which some economists believe could add a
significant 2% growth to the GDP.
Japan’s Investments in India
• Japan to invest $35 billion in India in a wide
spectrum of projects, including infrastructure,
clean energy & skill development.
• Japan is the fourth biggest foreign investor in
India, contributing about 8% to the total FDI
inflows. About 60% of Japanese presence in the
country is in the manufacturing sector.
• Japan telecom giant SoftBank to invest $10bn in
India.
• Major investor in DMIC.
• Japan committed a loan of $2 bn for Delhi Metro.
China’s Investments in India
• China to invest $20 billion in India in next 5 years ($4 bn
annually).
• During President Xi’s visit, China and India signed 12 agreements
covering industrial parks, railway, credit and leasing, with
cumulative investments of $13 billion.
• Two Chinese industrial parks to be set up in India. China’s Beiqi
Foton Motor Corp Ltd and Maharashtra Industrial Development
Corp have signed an MoU for setting up of Chinese industrial park
in Pune with $5-billion investment in three phases by 2030.
• Chinese companies such as Huawei, Alibaba, Xiaomi are increasing
their investments in India.
US Investments in India
• U.S. Leads Top 15 Countries Investing In India.
• President Obama announced more than $4 billion in trade and
investments with India.
• The US Export-Import Bank to commit up to $1 billion in
financing to support "Made-in-America" exports to India.
• OPIC will support lending to small and medium businesses
across India that will result in more than $1 billion in loans in
underserved rural and urban markets.
• The U.S. Trade and Development Agency will aim to leverage
nearly $2 billion in investments in renewable energy in India.
Engagement with States
•
PM and EAM have stressed the need for partnering with the States
and connecting them with the world better.
•
A new ‘States Division’ created in Ministry of External Affairs (MEA).
•
Objective is furthering a robust engagement with States and fostering
closer coordination, facilitation and better familiarization of states.
•
Due to imperatives of geography, economy and security, interaction,
involvement and influence of States in external affairs has increased,
and will only grow with time.
•
Trans-national security matters also have implications for states.
Key States with Potential
• Gujarat
• Andhra Pradesh
• Tamil Nadu
• Telangana
• Karnataka
• Haryana
• Madhya Pradesh
•
Maharashtra
Investment Opportunities – Gujarat
•
Gujarat is a thriving industrial state and hotbed for investments.
Gujarat accounts for 15.14% (USD 114.52 bn) of the total
investments in India; highest amongst all States in India.
•
Gujarat is leader in various industrial sectors, Chemicals,
Petrochemicals, Drugs & Pharmaceuticals, Dairy, Cement
&Ceramics, Textiles, Engineering and Gems & Jewellery.
•
The influence area of DMIC covers 62% of total area of Gujarat (18
out of 26 districts are within the influence area) and Investment
potential for Gujarat is about US$ 30bn (1/3rd of total investment
potential in DMIC).
Investment Opportunities – Madhya Pradesh
• MP has a land bank of approximately 25000 hectares.
231 notified
industrial areas spread over 15000 hectares with all facilities.
• Consistently high investment in industrial Infrastructure to the tune of INR
872 million.
• Potential IT hub in India with software exports of INR 2.3 billion (US$45
million) in 2012-13
• Prominent pharmaceutical hub in India with pharma exports of $US 99
million in 2012-13 and a total investment of $US 352 million.
• India’s largest Single Destination Solar Power Project (130 MW) located in
Neemuch district . Horticulture is emerging as an important sector.
Investment Opportunities – Andhra Pradesh
• APInvest is the single point of contact that facilitates investments in
Andhra Pradesh.
• SEZ’s :- “Special Economic Zones” – Tax-Free industrial areas
• Single window Clearances:
• Foreign Manufacturing Companies - ALSTOM, Apache, Kobelco, AMD,
Celetronix, WEP, Celestica, EISAI, Castall, Eicher, Denison, Pharmazell ,
Aptuit Laurus, SNF.
• Key Industries - Automotive, Engineering, Apparel & Fashion, Electronics
H/W, Pharma, Food Processing, Renewable Energy, IT/ITES, Logistics &
Warehousing & other eco-friendly industries.
• Construction of New Capital at Vijaywada – Smart Cities
Investment Opportunities – Telangana
• Opportunities in Infrastructure, Power, Renewable Energy, Water
cleaning and Treatment, Real Estate, IT and Biotechnology.
• Hyderabad is the hub of IT and BT. Google, Microsoft, ISB
• The State’s focus is on developing high competence in twelve core
sectors: Life Sciences – bulk drugs, vaccines, neutraceuticals and
biological; IT Hardware and Semi-Conductors; Precision Engineering –
Aviation, Aerospace, and Defence; Food Processing and Nutrition
Products; Automobiles and Heavy engineering; Plastics, Polymers and
Chemicals; Textiles and Apparel; Leather; Waste Management and Green
Technologies; Renewable Energy and Solar power; Gems and Jewellery
Inland Port; Logistics Hub/Container Depot And Mineral based
industries.
Investment Opportunities – Karnataka
• Sole producer of felsite and the leading producer of iron ore, chromite, and dunite.
• About 53% of the urban population of the state lives in eight urban cities namely, Bangalore,
Hubli- Dharwad, Mysore, Gulbarga, Belgaum, Mangalore, Davangere and Bellary.
• Housing: Integrated Townships, Low-Cost Housing. Environment: Planning and Upgradation
of green areas, Water Bodies, Conservation of Environment, Sewerage Treatment Plants.
• Investment in infrastructure is set to increase from the current 8.37% to 10% in the 12th 5
Year Plan (2012-2017). This potentially means a US$ 1 trillion opportunities for global
investors over the next 5 years.
•
Karnataka is positioning as major growth centre for chemical industry with presence of 500
companies with leading players like MRPL, BASF, Mangalore chemicals and fertilizers, United
Phosphorus. Attracting large R&D Centres for Chemicals/Petrochemicals including planned
centre of SABIC.
• The SEZ offers single point clearances, 100% FDI approvals for most projects and several
duty and tax incentives/exemptions for all units operating out of SEZ
INDIA-USA
• India is United State’s 10th largest supplier of goods imports and
18th largest goods exports market.
• US is the third largest source of FDI into India. The cumulative US
FDI in India is estimated at US% 50 billion. The Indian FDI in USA
is put at US$ 25 billion.
• A recent study of 68 Indian Cos. in the US revealed that their
collective investments in the US since 2008 exceed US$ 17 billion.
1/3 rd actively engaged in research spending $ 350 million .
• Indian aircraft orders alone support 40,000 jobs in the defense
industry of the US.
• Potential to expand current level of bilateral trade from US$ 100
billion to US$ 500 billion in 5-7 years of time.
India-US Trade 2005-2014
Calendar Year
India’s Exports to
USA ($m)
India’s Imports
from US($m)
Total Trade ($m)
2005
18,807.50
7,958.00
26,765.50
2006
21,830.80
10,056.20
31,887.00
2008
22,196.80
17,595.70
39,792.50
2009
21,176.20
16,462.40
37,638.60
2010
29,531.20
19,222.70
48.753.90
2011
36,152.80
21,501.30
57,654.10
2012
40,518.30
22,335.60
62,853.90
2013
41,829.00
21,875.30
63,704.30
2014
45,228.20
21,627.60
66.855.80
Country – India - Last updated December 2014 (12/17/2014) - Measures: Total Value ($US)
Exports
Imports
Time
State
2014 through October
2013
2014 through October
2013
17,439,923,477
21,842,276,090
38,416,445,616
41,845,281,062
541,951,145
696,004,525
1,143,256,632
1,192,904,591
212,712,726
222,808,167
371,045,748
393,013,268
62,988,658
85,833,276
124,908,142
133,977,777
239,234,580
261,582,514
909,867,310
1,131,525,721
270,699,810
189,248,594
164,116,556
195,783,960
115,614,215
157,339,266
365,462,877
351,178,067
30,872,669
29,354,545
48,889,054
53,604,782
1,218,927
1,309,733
4,987,225
4,808,862
168,985,085
289,452,313
571,523,258
639,008,607
1,644,277,815
1,932,932,933
3,704,056,802
4,095,805,635
All States
Illinois
Indiana
Iowa
Michigan
Minnesota
Missouri
North Dakota
South Dakota
Wisconsin
Total
President Obama’s Historic Visit
• Leadership committed to deepening of
bilateral ties.
• PM Narendra Modi’s landmark visit to
the US heralds new era in relationship.
• President Barack Obama became the
first US President to be the chief guest
at India’s Republic Day celebrations.
• First US President to visit India twice
while in office.
• First time a US president sat at an open
venue for over two hours.
• Visible chemistry between PM Modi
and President Obama.
• Obama: “Time has come for US to be
India’s best partner on a range of issues
from education, environment,
infrastructure to counter-terrorism.
• PM Modi: “U.S.-India partnership would
be instrumental in shaping the character
of this century.”.
• US expressed support for India’s claim
for a permanent seat in the UNSC.
• Secure Hotlines between Indian PM and
US President and between the NSAs.
• Negotiations on Bilateral Investment
Treaty to be expedited.
President Obama’s Historic Visit
• Strategic Dialogue elevated to ‘Strategic
& Commercial Dialogue’ reflecting joint
commitment to strengthening of
commercial ties & promoting regional
economic growth & stability.
• U.S. can offer new technology
partnerships in the realms of energy,
environment, defense, health care,
education, etc to supercharge India’s
development trajectory.
• U.S. & India negotiating long-term
energy supply arrangements that could
boost India’s energy security .
• Proposed LNG imports from US ~ 5.8
MTPA/US$2.5 billion from Sep 2017
from the terminal of Sabine Pass on the
Louisiana-Texas border.
• Strengthening of Bilateral defense ties joint manufacture of some equipment.
• US surpassed Russia as India’s biggest
arms supplier. US$ 5 billion worth of
weapons procured from US (total $14b)
• India is now on par with NATO on the
sophistication of defense technology
offered to India.
• India conducts maximum defense
exercises with USA.
Consulate General of India
Chicago