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Woollen Garments, Knitwear

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  • 1. PRESENTATION ON DEVELOPMENT OF SMEs IN INDIA & RETAIL INDUSTRY 1
  • 2. CONTRIBUTION OF SMEs TO THE ECONOMY -
    • REGIONAL DEVELOPMENT
    • COMPLEMENTARY ROLE TO SUPPORT THE LARGE SECTOR
    • BASIS FOR INNOVATIONS AND ADAPTATIONS
    • EMPLOYMENT GENERATION
    • DIRECT MULTIPLIER EFFECT OF THE PERFORMANCE ON THE GROWTH OF THE NATIONAL ECONOMY
    2
  • 3. PREDOMINANT ROLE OF SMEs IN THE ECONOMY DUE TO –
    • ITS NUMBER
    • VARIETY
    • INVOLVEMENT IN ALL ASPECTS OF THE ECONOMY
    3
  • 4. INDIAN DEFINITION OF SMALL SCALE INDUSTRY (SSI)
    • INVESTMENT IN PLANT AND MACHINERY DOES NOT EXCEED Rs. 10 MILLION (US$1-Rs.49) –
    • WHETHER HELD ON OWNERSHIP/LEASE/HIRE PURCHASE
    4
  • 5. THE THIRD ALL-INDIA CENSUS OF SMALL SCALE INDUSTRIES (AUGUST 2004)
    • Size – approx.10.52 million units compared to 80,000 units in the late 1940s
    • Total employment contribution – 24.93 million with a per unit contribution of 2.37
    • Export contribution – Rs.14,199 crores
    • Number of exporting units – 50,606
    • Contribution to GDP – 7%
    • Approx. 7,500 different products produced by SSIs in India
    • Out of 878 items reserved for the sector, only 672 are actually produced by SSIs
    2
  • 6. Based on products, SMEs in India can be broadly classified into the following groups:
    • Food products
    • Chemicals and chemical products
    • Basic metal industry
    • Electrical machinery and parts
    • Rubber and plastic products
    • Machinery and parts excluding electrical goods
    • Hosiery and garments
    • Wood products
    • Nonmetallic mineral products
    • Paper products and Printing
    • Transport equipment and parts
    • Leather and leather products
    • Miscellaneous manufacturing industries
    • Other services and products
    • Beverages, tobacco / tobacco products
    • Repair services
    • Cotton textiles
    • Wool, silk and synthetic fibre textiles
    • Jute, hemp and mesta textiles
    • Other services
    6
  • 7. Contributions of Indian SSIs to total exports by sector (%) 7 Ready-made garments Woollen garments, knitwear 30 Engineering goods 55 Cosmetics, basic chemicals & pharmaceuticals 45 Plastic products 29 Marine Products 35 100 Sporting goods 80 Leather products 65 Processed foods 90 SSI share in total exports Product
  • 8. Indian Government’s development strategy
    • Protective discrimination e.g. reservation, priority-sector lending
    • Integration between large and small e.g. subcontracting, ancillarization and vendor development
    • Institutional support through a network of testing centres, tool rooms, entrepreneurship development institutes
    • The setting up of a separate Ministry of Small Scale Industries in 1999 marked a major step towards providing a policy platform for the SME sector.
    8
  • 9. CHALLENGES FACED BY SME SECTOR IN INDIA
    • The term “economic globalization” implies an evolving pattern of cross-border enterprise activities. It implies a change, broadly on the following lines :
    9 Survival of the fittest Protective policies Focus on growth Limited economic interest Flexible production system Rigid production system World market Local market Outsourcing-local/international Manufacturing for self-identified market Strategic alliances Single-firm activity Collaborations Local/National Investment Post-Globalisation Pre-Globalisation
  • 10. NEED FOR NEW APPROACH
    • New policy for development of SMEs in regional setting by encouraging Foreign Direct Investment
    • Innovative bottom-up development policies endowing individuals, firms and territories with factors to place their skills, products or services in the global competitive market
    • Encouraging Private-public partnerships which will generate employment and stimulate economic activity
    • Modernizing the export-oriented clusters for enhancing global competitiveness
    • Consortia approach for enhancing exports from SMEs
    • Fostering linkages between Indian SME clusters and similar product cluster overseas for mutual benefit
    • Organizing product specific trade fairs with international participation
    • Concentrate on developing and promoting service sector
    10
  • 11. RETAIL INDUSTRY IN INDIA
    • Some countries include retailing in its definition of SMEs alongwith manufacturing and services
    • Indian retailing – largest industry – 14% of GDP
      • Second largest source of employment next to agriculture
      • Organized retailing accounts for just 3% of the total retail market;
      • projected to grow at 25-30 per cent a year
      • Annual growth rate of 8.5% and amounting to Rs. 200 billion in 2003-04
      • Untapped segment amounts to a whopping Rs. 9,800 billion (approx.$222 billion)
      • India’s estimated total retail market to be around $202.6 billion which is expected to grow at a compounded 30% over the next five years
    • Government unlikely to announce any decision on allowing FDI in retail. Revised safeguards for ensuring “livelihood protection” to ‘mom & pop’ stores are yet to be finalized
    • FDI regime would provide opportunity for joint ventures, ease financial crunch, bring in technical know-how and best management practices
    11
  • 12. ALL INDIA ASSOCIATION OF INDUSTRIES Building bridges of prosperity through Industry
    • Serving industry since 1956
    • India’s premier business networking organisation and a centre for excellence for international trade
    • Membership - open to all sectors of the industry including agriculture, service, entertainment, finance and also to professionals
    • Representation -
    • - AIAI has representations on various national and regional governmental bodies and financial institutions to address the issues of its members.
    • Agreements for co-operation
    • The All India Association of Industries (AIAI) has signed agreements for co-operation with 70 international Trade Promotion Organizations and Chambers of Commerce across the globe to promote bilateral trade, exchange of trade-related information, trade delegations, joint ventures and technology transfers
    12
  • 13. OVERSEAS MEMBERSHIP of All India Association of Industries
    • Our Overseas Membership scheme allows non-Indian based companies with no Indian registered office to :
      • Make new contacts by being part of one of India’s biggest business organisations
      • Use AIAI’s Members’ Lounge as your base and meeting place and enjoy a range of member benefits when visiting India. Located in the heart of the business capital, the Members’ lounge offers a space from where you can work, connect your laptop, use the internet or invite your Indian clients for meetings. Refreshments available.
      • Raise your company profile by association with the recognised and respected AIAI brand
      • Receive the AIAI Newsletter
      • AIAI’s team can help you identify organisations in India which can help you with your business
      • Make new business contacts and gain information by participating in AIAI’s programme of networking events and seminars
    • How much does it cost ?
      • Our Overseas Membership costs US$ 225/- per annum. Payment must be made on-line by credit card
    • Terms and conditions
      • Only non-Indian companies with no office in India may apply for overseas membership
      • AIAI reserves the right to refuse an application from any overseas company at our discretion
      • AIAI reserves the right to revoke membership at any point without refund
      • AIAI is not responsible for the conduct or actions of its members
    13
  • 14. ECONOMIC INDICATORS (2004-2005)
    • Population 1 billion+
    • GDP (in $ billion) 520
    • GDP growth rate (%) 7.0
    • Foreign Exchange Reserves (US$ billion) 143.5
    • Inflation (%) 4.0
    • Agriculture (% of GDP) 22
    • Industry (% of GDP) 28
    • Services, etc. (% of GDP) 48
    • Source : Tata Services
    14
  • 15. MARKET OPPORTUNITIES
    • Women’s wear - 37.5% of the clothing market – US$3.93bn
    • Women’s western wear - $ 157 million
    • Organized apparel retailing – to grow 5 times over next 5 years
    • Fire fighting equipment estimated at about $34-40 million
    • E-commerce –
      • PC penetration – 14 million users (March 2005)
      • E-commerce activity in 2004 – US$ 350 million (NASSCOM)
      • B2C E-commerce to grow to $489 million by end of 2006
    15
  • 16. I N D I A O F F E R S
    • Good command on English language
    • Large, well-trained, low-cost workforce
    • Very good pool of engineers, accountants, technicians
    • Well developed R & D Infrastructure
    • Well established legal system/courts
    • Mature, nation-wide distribution system
    • Foreign Investment regulations that provide freedom of entry, investment, location, choice of technology for import & export
    • Current account convertibility, capital account convertibility for foreign investors
    • Investment & tax incentives for exports
    16
  • 17. Why you can’t ignore India
    • A bridge between East and West
    • Vast market: a fast-growing consumer market
    • Growing economy: from agriculture to industry and now to services, the Indian economy is acquiring depth and maturity
    • Legal System: Well laid out legal procedures & systems
    • Systems in place : India is one of those rare third world countries where democratic systems are all in place, and though it takes some time, the rule of law prevails
    • Market-friendly approach : Successive governments from across the political spectrum have committed themselves to a market-friendly economic approach
    17