Transcript Indian Diaspora: Our People, Our Wealth

Indian Economy
Opportunities Unlimited
SEPTEMBER 10, 2008, BUDAPEST
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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
2008*
9.0 percent
USD 297.286 billion
(as on August 22,
2008)
USD 16.1 billion in
2007–08
USD 25 billion in
2007–08
USD 740
12.40 percent
(for the week
ended August
16)
Sources: Times of India, , RBI, RBI, DIPP, Indian Budget, Rediff, The Economic Times
* Annualized data used to show comparison with 1990
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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
India's GDP at Constant Prices: 2002–07
1200
27 percent
Increase
800
600
1068
400
200
469
556
638
737
838
Fastest GDP growth of 9.4 percent in 2006–07, since
last 18 years (at constant prices)

India’s GDP has witnessed high growth and was the
second fastest growing GDP after China in 2007-08

The sound performance of each industry segment is
leading to the overall robust performance of the Indian
economy
0
2002–03
2003–04
2004–05
2005–06
2006–07
2007–08*
Contribution of
Services increased from
48 percent to
53 percent
* RE - Revised Estimates
1,200
1,000
Growth in sectors at Constant Prices (2007–
08):
Industry: 10.8%
Services: 8.5%
Agriculture: 4.5%
USD Billion
USD Billion
1000

800
564
439
600
398
400
191
200
0
103
105
237
125
105
314
204
135
245
154
1999–00
2002–03
2005–06
2006–07
Agriculture
Industry
Services
Source: MOSPI Statistics, RBI
190
2007–08
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India: Robust Economic Platform
India's Forex Reserves: 2001–08
350
In 2007-08, Forex reserves
witnessed a growth of
approximately 56 percent over
2006-07.
250
USD Billion
Steadily increasing
Forex reserves offer
adequate security
against any possible
currency crisis or
monetary instability
310
300
199
200
141
150
152
112
100
54
75
50
0
2001–02 2002–03 2003–04 2004–05 2005–06 2006–07 2007–08
India’s Forex
reserves are in
excess of
external debt…
External Debt-to-GDP Ratio
22
21.1
20.4
Increased
confidence of
investors in Indian
companies has led
to a surge in cross
border borrowing by
corporate houses
Ratio
19
18.8
18.6
17.8
17.2
17.8
16
…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 2007–08
Source: RBI Statistics
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India: Surging Trade (1/2)
Services sector has
been a major
contributor to
increased exports
from India
USD Billion
India's Exports: 2002–08
180
160
140
120
100
80
60
40
20
0
156
126
103
84
53
Quality and cost advantage are the two
important parameters leveraged by the
Indian producers to increasingly
market products and services
64
Exports in April 2008 amounted
to USD 14.4 Billion increasing by
31.5 percent from April 2007 …
2002–03
2003–04
2004–05
2005–06
2006–07
2007–08
Acceptance of
Indian products
along with the cost
advantage has
provided an edge to
Indian companies
India's Imports: 2002–08
236
250
USD Billion
Product imports by
India mainly include
petroleum products
and minerals
Petroleum products are the major
contributors towards India’s growing
imports
185
200
150
150
112
100
78
62
Imports in April 2008 amounted
to USD 24.2 Billion increasing by
36.6 percent from April 2007 …
50
0
2002–03
2003–04
2004–05
2005–06
2006–07
Source: Ministry of Finance (May 2008)
2007–08
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India: Surging Trade (2/2)
Exports of Top-Five Commodities (Apr-Feb 2007-08 *)
S.No.
Commodity
Amount (in USD mn)
Percentage Growth (2006-07)
Percentage share in
total exports
1
Petroleum (Crude & Products)
24,025.55
40.69
16.82
2
Gems & Jewellery
17,745.57
24.25
12.43
3
Machinery And Instruments
7,850.26
30.45
5.50
4
Rmg Cotton Including Accessories
6,722.09
7.79
4.71
5
Drugs, Pharmaceuticals & Fine
Chemicals
6,589.02
24.93
4.61
* Data for April-Feb 2007-08 (Provisional)
Imports of Top-Five Commodities (Apr-Feb 2007-08 *)
S.No.
Commodity
Amount (in USD mn)
Percentage Growth (2006-07)
Percentage share in
total exports
1
Petroleum, Crude & Products
70,542.95
34.97
32.75
2
Electronic goods
18,407.72
27.77
8.55
3
Machinery except electrical &
electronics
17,490.72
40.88
8.12
4
Gold
15,241.83
17.50
7.08
5
Iron & Steel
7,610.25
41.12
3.53
* Provisional data
Source: DGFT
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India: Attractive Investment Destination
With improved performance on PE ratio and ROE, Indian markets have attracted large
investments
FDI Equity Inflow - India: 2001–08
India is ranked
27,000
second in AT
22,500
confidence index
(2007)
USD Million
Kearney’s FDI
Electronic equipment,
manufacturing and telecom have
witnessed significant FDI inflow
24,579
56 percent
Increase
18,000
15,730
11,880
13,500
9,000
4,222
4,500
FDI for April 2008 amounted to
USD 3749 Million
5,546
3,134
2,634
2002–03
2003–04
3,755
0
2001–02
2004–05
2005–06
2006–07
2007–08
Net FII into India: 2001–08
FDI inflow for the
18
period 2007-08
16
of 56 percent over
Large FII activity in India has led
to an upsurge in the Sensex
the last year
140 percent
Increase
16.1
14
USD Billion
witnessed a growth
Jan–M ar
(08)
12
10.0
10
8
10.2
9.4
6.7
6
4
2
1.8
0.6
0
2001–02 2002–03 2003–04 2004–05 2005–06 2006–07 2007–08
* FII growth momentum was restricted because of Sub Prime Crisis in 2007-08
Source: DIPP (October Report) , SEBI
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India: Vibrant Capital Market
Sensex – The Bombay Stock Exchange index has risen 20 times from 1990s to
reach 20,000 mark in November 2007.
India is among the
major destinations
across the globe for
inflow of US Dollar
25000
11 December
2007 Crossed
20,000 mark
20000
15000
Sensex has risen
20 times in the
period 1990-2007
30 December 1999
Crossed 5,000 mark
07 February 2006
Crossed 10,000 mark
10000
5000
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Emergence of
industry and
confidence of local
investors along with
the FIIs has led to
upsurge of the
Sensex
FIIs have infused
large investments
into the Indian
stock market
Encouraging
industry
performance
Increased local
investors’
confidence
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India: Vibrant Economy Driving M&A Activities
Number of Deals and Value
1,081
80
1,000
60
50
40
20
10
800
782
467
600
28.2
306
12.3
400
18.3
Number of deals
USD Billion
70
30
1,200
70
…First two months of 2008 have already
seen 92 M&A valued at
approximately USD 6 Billion
200
0
In 2007, the total value of M&A and
PE deals was USD 70 billion…
0
2004
2005
Deal Value
2006
2007
No. of Deals
In 2007, there were a total of
676 M&A deals and 405 private
equity 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 corporates
Private equity deal
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, IBEF, RBI
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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
Tata buys Jaguar and Land Rover
USD 2.3 billion
Essar Steel acquired Algoma Steel
USD 1.58 billion
Suzlon Energy Ltd. acquires REpower
USD 1.6 billion
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Major M&A and Investments Announcements in India
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
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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Major M&A and Investments Announcements in India
Plans to invest in six private equity funds in
Indian market
USD 0.185 billion
Plans expansion of network in India
USD 4–5 billion
Plans expansion of cement capacity in India
Over USD 1 billion
Source: The Economic Times
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Indian Companies Fuelling Future Expansions
Plans to provide services in the Sri Lanka
market
USD 0.2 billion
Plans to invest in the Uganda market
USD 0.5 billion
Plans to invest in its global expansion efforts
Over USD 2 billion
RIL is planning to invest in its recently
acquired polyester manufacturing facility in
North Carolina
Source: International Business Times, The Financial Express, IBEF, SifyBroadband
USD 0.215 billion
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India: Pacing Ahead to Emerge as a Major Economy in
the World
2008 Global Retail Development Index (GRDI)
India
China
2.9
60
Malaysia
2.8
40
Thailand
Brazil
20
Indonesia
0
India Russia Vietnam Ukraine China
2.3
1.4
Chile
2.3
1.3
3.2
1.6
1.8
3.3
1.5
1.5
Financial structure
Business environment
Egypt
2
1.2
2.6
1.4
1.1
People and skill availablity
Projected GDP Growth Rates for Select Upcoming Economies
8
GDP Growth Rate (%)
India is expected to
outperform its rivals
in the BRIC, in terms
of GDP growth rate,
from 2015
onwards…
3.2
80
Services sector
continues to attract
interest from major
global players and
large investments
are being pumped
into it
AT Kearney has
placed India as the
most preferable
destination for
Services sector
(2007)…
2007 Global Services Location Index
100
GRDI Score
… India ranks
second in the AT
Kearney Global
Retail Development
Index (2008)
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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