Transcript Indian Diaspora: Our People, Our Wealth

Indian Economy
An Opportunity Unlimited
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India: Fastest Growing Free Market Democracy
GDP Growth
Forex
FII Flow
FDI
Per Capita
Inflation
1990
4.9 percent
< USD 1 billion
USD 1 million (1993)
USD 97 million
USD 390
9 percent
2007*
9.4 percent
(8.9 percent for
Q2 2007-08)
USD 246 billion
(USD 276 billion in
2007-08 till December)
USD 15 billion
(USD 18 billion in
2007-08 till 14th Jan)
USD 16 Billion
(USD 9.2 billion in
2007-08 till October)
USD 797
3.4 percent
* Annualized data used to show comparison with 1990
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Source: Times of India
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India: Among the Top-15 Countries in terms of GDP at
constant prices
The Indian economy has witnessed unprecedented growth…. Booming services and industry sectors are providing the
required impetus to economic growth
Fastest GDP growth of 9.4
percent in 2006-07, since last 18
years (at constant prices)
469
556
638
737
India’s GDP has witnessed high growth, and was the second
fastest growing GDP after China in 2006-07
830
477
The sound performance of each industry segment is leading
to the overall robust performance of the Indian economy
2002-03 2003-04 2004-05 2005-06 2006-07
2007-08
(H1)
Contribution of
Services increased from
48 percent to
55 percent
900
Estimated contribution to GDP by various
sectors for H1 (2007-08) are: Industry –
138.5 billion, Agriculture – 73.8 billion and
Services – 268.8 billion
800
700
Growth in sectors at Current
Prices (2006-07):
Industry: 16.2%
Services: 16.3%
Agriculture: 10.2%
Source: MOSPI Statistics
USD Billion
USD Billion
India's GDP at Current Prices: 2002-07
900
800
700
600
500
400
300
200
100
0
453
600
398
500
400
300
200
100
191
237
103
125
105
105
204
231
135
145
0
1999-00
2002-03
2005-06
Agriculture
Industry
Services
2006-07
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India: Robust Economic Platform
India's Forex Reserves: 2001-08 (Till 28 December 2007)
276
300
250
199
150
100
141
152
2005-06
200
2004-05
USD Billion
Steadily increasing
Forex reserves offer
adequate security
against any possible
currency crisis or
monetary instability
In 2007-08 (till 28 December),
Forex reserves witnessed a
growth of approximately 39
percent over 2006-07.
112
54
75
50
2007-08
(Till 28
December)
2006-07
2003-04
2002-03
2001-02
0
External Debt-to-GDP Ratio
22
21.1
Falling Dollar inflates
the India’s external debt
20.4
Increased
confidence of
investors in Indian
companies has led
to a surge in cross
border borrowing by
corporate houses
Ratio
19
17.8
India’s Forex
reserves are in
excess of
external debt…
17.3
15.8
16
16.4
…the decreasing external debt to
GDP ratio indicates that India has
a sound economic platform
13
10
2001-02
2002-03
2003-04
2004-05
2005-06
2006-07
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Source: RBI Statistics
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India: Surging Exports
India's Exports: 2002-08
USD Billion
Services sector has
been a major
contributor to
increased exports
from India
140
120
100
80
60
40
20
0
126
103
86
84
53
2002-03
Quality and cost advantage are the two
important parameters leveraged by the
Indian producers to increasingly
market products and services
64
2003-04
2004-05
2005-06
2006-07
Acceptance of
Indian products
along with the cost
advantage has
provided an edge to
Indian companies
2007-08
(AprilOctober)*
* - 2007-08 provisional data for period of April to October only
India's Imports: 2002-08
USD Billion
250
Product imports by
India mainly include
petroleum products
and minerals
191
200
150
150
100
130
112
62
78
Petroleum products are the major
contributors towards India’s growing
imports
50
0
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08
(AprilOctober)*
* - 2007-08 provisional data for period of April to October only
Source: Ministry of Finance (November Report)
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India: Attractive Investment Destination
With improved performance on PE ratio and ROE, Indian markets have attracted
large investments
India is ranked
FDI Inflow - India: 2001-07
18,000
second in AT
confidence index
(2007)
USD Million
Kearney’s FDI
15,730
185 percent
Increase
13,500
Electronic equipment,
manufacturing and telecom
have witnessed significant
FDI inflow
9,277
9,000
4,222
4,500
5,546
3,134
2,634
3,755
0
2001-02 2002-03 2003-04 2004-05 2005-06 2006-07
Net FII into India: 2001-07
FDI inflow for the
of 185 percent over
the same period last
Large FII activity in India has
led to an upsurge in the
Sensex
year
USD Billion
period 2006-07
witnessed a growth
2007-08
(till
October)
20
18
16
14
12
10
8
6
4
2
0
18.0
170 percent
Increase
10.0
9.4
6.7
1.8
2001-02
Source: DIPP (October Report), SEBI
10.2
0.6
2002-03
2003-04
2004-05
2005-06 2006-07
2007-08
(till 14
January)
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India: Vibrant Capital Market
India is among the
major destinations
across the globe for
inflow of US Dollar
Sensex – The Bombay Stock Exchange index has risen 20 times from
1990s to reach 20,000 mark in November 2007.
11/12/2007
Crossed
20,000
mark
25000
20000
Sensex has risen
20 times in the
period 1990-2007
09 July 2007
Crossed 15,000 mark
15000
07 February 2006
Crossed 10,000 mark
30 December 1999
Crossed 5,000 mark
10000
Emergence of
industry and
confidence of local
investors along with
the FIIs has led to
upsurge of the
Sensex
5000
0
1Jul97
1Feb98
1Sep98
1Apr99
1Nov99
FIIs have infused
large investments
into the Indian
stock market
1Jun00
1Jan01
11Aug- Mar01
02
111Oct- May- Dec02
03
03
1Jul04
Encouraging
industry
performance
1Feb05
1Sep05
1Apr06
1Nov06
1Jun07
1Jan08
Increased local
investors’
confidence
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India: Vibrant Economy Driving M&A Activities
Number of Deals and Value
70
70
1,200
1,000
USD Billion
60
782
50
40
30
20
10
467
28.2
306
800
600
400
18.3
200
12.3
0
0
2004
2005
Deal Value
Number of deals
1,081
80
In 2007, there were a total of
676 M&A deals and 405 private
equity deals…
In 2007, the total value of M&A and
PE deals was USD 70 billion…
2006
2007
No. of Deals
… Total M&A deal value was
close to USD 51 billion…
Growth Drivers:
 Globalisation and increased competition
 Concentration of companies to achieve economies of
scale
 Cash Reserves with corporate
Private equity deals
value increased to USD
19 billion
Trends:
 Cross-border deals are growing faster than domestic deals
 Private Equity (PE) houses have funded projects as well as
made a few acquisitions in India
Source: Deal Tracker Grant Thornton, Economic Times
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Major M&A Deals Undertaken Abroad by India Inc.
Tata Steel buys Corus Plc
USD 12.1 billion
Hindalco acquired Novelis Inc.
USD 6 billion
Essar Steel acquired Algoma Steel
USD 1.58 billion
Suzlon Energy Ltd. acquires REpower
USD 1.6 billion
United Spirits Ltd. acquired Whyte &
Mackay
USD 1.1 billion
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Major M&A and Investments Announcements in India
(1/2)
POSCO to invest in building steel
manufacturing plants and facilities in India by
2016
USD 12 billion
Vodafone buys Hutch
USD 11 billion
Plans to establish three manufacturing plants
to produce photo-voltaic units
USD 2 billion
Plans to spend on its development operations
in India over the next four years
USD 1.7 billion
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Major M&A and Investments Announcements in India
(2/2)
Plans investment in private equity in Indian
markets
USD 1 billion
Plans investment in private equity, real estate,
and private wealth management
USD 1 billion
Aditya Birla Group increased its stake in Idea
Cellular by acquiring 48.14-percent stake
USD 0.98 billion
Mylan Laboratories acquired a majority stake
in Matrix Laboratories
USD 0.74 billion
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India: Pacing Ahead to Emerge as a Major Economy in
the World
2007 Global Retail Development Index (GRDI)
India
80
Services sector
attracted interest of
major global players
and large
investments are
pumped in it
India is expected to
outperform its rivals
in the BRIC, in terms
of GDP growth rate,
from 2015
onwards…
60
2.9
Malaysia
2.8
Brazil
Indonesia
0
India Russia Vietnam Ukraine China
Chile
3.2
China
Thailand
40
20
2.3
2.3
1.3
3.2
2.6
1.6
1.8
3.3
1.4
2
1.2
1.5
1.5
Financial structure
Business environment
Latvia
1.4
1.1
People and skill availablity
Projected GDP Growth Rates for Select Upcoming Economies
8
GDP Growth Rate (%)
AT Kearney has
placed India as the
most preferable
destination for
Services sector
(2007)…
2007 Global Services Location Index
100
GRDI Score
… India is the top
destination in the AT
Kearney Global
Retail Development
Index (2007)
6
4
2
0
2005-10
2010-15
2015-20
2020-25
Brazil
Source: AT Kearney, BRIC Report
2025-30
China
2030-35
India
2035-40
2040-45
2045-50
Russia
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Why India? – Quote Unquote
“India has evolved into
one of the world's
leading technology
centers“.
“India is now truly a
land of opportunity”.
John Redwood
Economic
Competitiveness Policy
Group, UK
By 2032, India will be
among the three
largest economies in
the world.
“We came to India for the
costs, stayed for the
quality and are now
investing for innovation”.
- Dan Scheinman, Cisco
System Inc. as told to
Business Week, August
2005
BRIC Report,
Goldman Sachs
“India is a
developed country
as far as intellectual
capital is
concerned”.
Jack Welch
General Electric
“I have never seen
India so dynamic,
vibrant and full of
business
opportunities”.
Craig Barrett
Intel
Corporation
Peter Loescher
President and
Chief Executive
Siemens
“The Indian market has two
core advantages - an
increasing presence of
multinationals and an upswing
in the IT exports”.
“India is a very exciting
market and the luxury
car segment is growing
exponentially here”.
Mr Paul de Voijs
Managing Director
Volvo Car India
Travyn
Rhall,
ACNielsen
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