India Belgium 2009

Update on the Indian economy in the present global crisis and overview of the Belgo-Indian economic relations By Jean-Pierre Muller Trade Commissioner Awex & Brussels Export Office New Delhi Brussels Export, 12 June 2009

I. INDIA a billion people country with a trillion dollar economy...

India : Nominal Gross Domestic Product and Real GDP Growth Fiscal years (beginning April 1st of the year indicated) Nominal GDP (BIO US$) % change from year ago 12.0% 1,400.0 11.0% 9.7% 9.3% 1,133.5 10.0% 1,200.0 1,164.1 1,121.4 8.4% 8.3% 9.0% 1,000.0 923.5 9.1% 8.0% 810.0 7.0% Bio US$ 6.0% 800.0 697.8 6.0% 5.0% 596.0 600.0 5.0% 4.0% 400.0 3.0% 2.0% 200.0 1.0% 0.0 0.0% 2003 2004 2005 2006 2007 2008 2009* * forecasts Source : The Economist Intelligence Unit

GDP Growth Comparative data analysis 14.0% 12.0% 10.0% India 8.0% China 6.0% 4.0% USA 2.0% EU 27 0.0% 2005 2006 2007 2008 2009* -2.0% World -4.0% -6.0% * = forecasts Source : The Economist Intelligence Unit

World Rankings List of countries by nominal GDP in 2008 (in Bio US$) 1 United States 14,330.0 16 South Korea 857.5 2 Japan 4,844.0 17 Turkey 798.9 3 China (PRC) 4,222.0 18 Poland 567.4 4 Germany 3,818.0 19 Belgium 530.6 5 France 2,978.0 20 Sweden 512.9 6 United Kingdom 2,787.0 21 Indonesia 510.8 7 Italy 2,399.0 22 Switzerland 492.6 8 Russia 1,757.0 23 Norway 481.1 9 Spain 1,683.0 24 Saudi Arabia 467.7 10 Brazil 1,665.0 25 Austria 432.4 11 Canada 1,564.0 26 Taiwan, R.O.C. 401.6 12 India 1,237.0 27 Iran 382.3 13 Mexico 1,143.0 28 Greece 373.5 14 Australia 1,069.0 29 Denmark 369.6 15 Netherlands 909.5 30 Argentina 338.7 Source : CIA, The world factbook 2008

World Rankings List of countries by nominal GDP in 2008 (in Bio US$) Purchasing Power Parity (PPP) method 1 United States 14,290.0 16 Turkey 906.5 2 China 7,800.0 17 Iran 842.0 3 Japan 4,348.0 18 Australia 800.5 4 India 3,267.0 19 Taiwan 738.8 5 Germany 2,863.0 20 Netherlands 670.2 6 United Kingdom 2,231.0 21 Poland 667.4 7 Russia 2,225.0 22 Saudi Arabia 582.8 8 France 2,097.0 23 Argentina 575.6 9 Brazil 1,990.0 24 Thailand 553.4 10 Italy 1,821.0 25 South Africa 489.7 11 Mexico 1,559.0 26 Pakistan 452.7 12 Spain 1,378.0 27 Egypt 442.6 13 Canada 1,307.0 28 Colombia 399.4 14 South Korea 1,278.0 29 Belgium 390.5 15 Indonesia 915.9 30 Malaysia 386.6 Source : CIA, The world factbook 2008

INDIA vs. CHINA (Comparative data - 2007) 6,000.0 5,478.0 5,000.0 4,000.0 3,241.8 2,784.0 3,000.0 2,453.0 2,000.0 1,133.5 1,032.0 1,000.0 0.0 Nominal GDP GDP / head GDP/ head in BIO US$ in US$ in US$ (PPP Method) Source : The Economist Intelligence Unit

India : Balance of trade and current account balance Fiscal years (beginning April 1st of the year indicated) 350,000 Indian Imports (Mio $) 305,487 300,000 Indian Exports (Mio $) Trade Balance (Mio $) 250,000 231,571 Current account balance (Mio $) 200,000 185,041 176,357 149,430 150,710 150,000 122,963 Mio US$ 105,975 102,175 100,000 75,537 77,939 60,895 50,000 0 2003 2004 2005 2006 2007 2008 -14,642 -50,000 -28,036 -47,255 -62,078 -100,000 -80,861 -150,000 -129,130 Source : The Economist Intelligence Unit

Top 30 exporters in the world List of countries by exports in 2008 (in Bio US$) 1 Germany 1,530.0 16 Spain 292.8 2 China 1,465.0 17 Taiwan 255.7 3 United States 1,377.0 18 Singapore 235.8 4 Japan 776.8 19 Un. Arab Emirates 207.7 5 France 761.0 20 Brazil 200.0 6 Italy 566.1 21 Malaysia 195.7 7 Netherlands 537.5 22 Poland 190.5 8 Russia 476.0 23 Sweden 185.1 9 United Kingdom 468.7 24 Australia 178.9 10 Canada 461.8 25 Thailand 178.4 11 South Korea 419.0 26 Norway 177.6 12 Belgium 372.9 27 India 175.7 13 Hong Kong 362.1 28 Switzerland 172.7 14 Saudi Arabia 311.1 29 Austria 163.3 15 Mexico 294.0 30 Czech Republic 145.8 Source : CIA, The world factbook 2008

Top 30 importers in the world List of countries by imports in 2008 (in Bio US$) 1 United States 2,190.0 16 India 287.5 2 Germany 1,202.0 17 Taiwan 236.0 3 China 1,156.0 18 Singapore 219.5 4 France 833.0 19 Poland 213.9 5 Japan 696.2 20 Switzerland 212.8 6 United Kingdom 645.7 21 Turkey 204.8 7 Italy 566.8 22 Australia 187.2 8 Netherlands 485.3 23 Austria 183.4 9 Spain 444.9 24 Thailand 179.0 10 Canada 436.7 25 Brazil 176.0 11 South Korea 435.0 26 Sweden 166.6 12 Hong Kong 387.9 27 Malaysia 156.2 13 Belgium 375.2 28 Czech Republic 141.4 14 Mexico 305.9 29 United Arab Emirates 141.1 15 Russia 302.0 30 Indonesia 128.8 Source : CIA, The world factbook 2008

Exchange rate of Indian Rupee (Value at the end of the indicated 80 period) 70 67.70 67.25 59.66 58.08 58.25 1 $ or 1 € = INR 60 57.26 53.53 50 48.34 50.36 47.86 49.60 46.69 48.04 45.60 43.52 43.73 45.19 44.12 42.49 42.85 43.73 43.99 42.83 39.43 40 1 € = INR 1 $ = INR 30 98 99 00 01 02 03 04 05 06 07 08 0 9 19 19 20 20 20 20 20 20 20 20 20 n- Ju

India - Foreign Direct Investement Total FDI : 83,6 Bio US$ BELGIUM 279.4 HONGKONG 359.1 BRITISH VIRGINIA 391.0 RUSSIA 365.2 SPAIN 440.7 SOUTH KOREA 457.0 FDI Inflows in India BERMUDA 488.8 (accumulated from April 00 to December 08) SWEDEN 509.2 ITALY 592.1 CAYMAN ISLAND 654.3 SWITZERLAND 778.4 U.A.E. 881.9 FRANCE 1,172.4 CYPRUS 2,003.0 GERMANY 2,111.9 JAPAN 2,353.5 NETHERLANDS 3,524.1 U.K. 5,142.4 U.S.A. 5,867.6 SINGAPORE 6,458.3 MAURITIUS 34,241.4 0.0 5,000.0 10,000.0 15,000.0 20,000.0 25,000.0 30,000.0 35,000.0 40,000.0 (in Mio US$) Source : Ministry of Commerce & Industry, Department of Industrial Policy & Promotion

India : Destination of FDI by location FDI stocks accumulated from April 00 to Dec. 08 33.8% 35.0% 30.0% 25.0% 20.0% 16.1% 15.0% 7.0% 6.8% 10.0% 5.6% 4.3% 5.0% 1.6% 0.0% I I AI E AD A AD BA H R AT NN L AB O AB M DE LK AL HE U ER ED M KO EW G C YD N M N BA AH H Source : Ministry of Commerce & Industry, Department of Industrial Policy & Promotion

Top 30 recipients of FDI in the world List of countries by FDI stock in 2007 (in Bio US$) 1 United States 2,093.0 16 Brazil 248.9 2 United Kingdom 1,288.0 17 Austria 222.9 3 Hong Kong 1,185.0 18 Sweden 216.6 4 France 942.3 19 Singapore 214.5 5 Germany 855.8 20 Ireland 191.4 6 China 758.9 21 Denmark 149.7 7 Belgium 678.2 22 Poland 143.0 8 Netherlands 673.4 23 South Korea 119.6 9 Spain 568.8 24 Japan 110.8 10 Canada 527.4 25 Hungary 108.6 11 Italy 364.8 26 Turkey 106.4 12 Australia 315.0 27 India 95.9 13 Switzerland 306.4 28 South Africa 93.5 14 Russia 271.6 29 Taiwan 92.8 15 Mexico 260.9 30 Chile 91.5 Source : CIA, The world factbook 2008

Stock market Indexes (Values at the end of the period) 20287 15411 14650 13787 13461 13264 13409 10783 10718 12463 11497 10454 10787 11345 9647 10021 9398 8739 9181 8342 8776 6603 5839 5006 3972 3055 3263 3377 Dow Jones Industrial Average (NY) BSE Sensex (Mumbai) 98 99 00 01 02 03 04 05 06 /1 /2 /1 /2 /1 19 19 20 20 20 20 20 20 20 07 07 08 08 09 20 20 20 20 20

Latest update on Indian economy •5.8% quarterly GDP growth in March 2009 (higher than expected and better than the previous term) •Low inflation : less than 1% in March 2009, on a year earlier, vs. 10% in March 2008 (wholesale prices) • Tumbling exports : in March, they were 33% down on a year earlier (but India is less reliant on trade than most emerging markets) •Fiscal deficit well above 5.5% of the GDP (actually more than 12% if we include State Governments deficits + extra budget spending)

II. Bilateral relations

Bilateral trade Belgium-India Belgian exports to India (Mio €) Belgian imports from India (Mio €) Balance 6,000 5,126 5,202 5,000 4,782 4,522 4,225 4,000 Mio € 3,128 2,958 2,709 3,000 2,493 2,358 2,260 2,262 1,998 1,867 1,824 2,000 1,000 0 2004 2005 2006 2007 2008 Source : Belgian National Bank

Bilateral trade (II) Composition of Belgian Exports (2008) Chemicals, 3.9% Plastics, 2.2% Metals, 5.5% Belgian exports Machinery, 6.4% minus diamonds = 1,000 Mio € Diamonds, 78.8% Composition of Belgian imports (2008) Transportation Machinery, 3.5% equipment, 4.1% Chemicals, 7.1% Diamonds, 50.3% Textiles, 7.6% Belgian Imports Metals, 8.9% minus diamonds = 1,450 Mio € Minerals, 9.8% Source : Belgian National Bank

Bilateral trade (III) •India is Belgium’s 9th customer and 13th supplier. •But, without inclusion of the diamond trade, India is actually Belgium’s 33d customer and 28th supplier. Source : Banque Nationale de Belgique

Recent events in the bilateral relations • Mission Marcourt (Awex) – September 2008 • State Visit to India by King Albert II and Queen Paola – October 2008 • 11th Joint bilateral commission (Brussels, May 2009) • “India calling” mission in Brussels – October 2009 (Indian Merchants’ Chambers) • Crown Prince Philippe mission to India – March 2010

Bilateral Agreements •Agreement on Economic, Industrial, Scientific and Technological Cooperation between BLEU and India in March 1990 •Agreement on Avoidance of Double Taxation signed on 26 April 1993, and came into effect on 5 August 1997 •Agreement on Bilateral Investment Protection signed by India and BLEU (Belgium Luxembourg Economic Union) in November 1997. •Agreement on Air transportation in March 2003 • Social security agreement signed in New Delhi in November 2006 (will come into effect in Sept. 2009).

Major bilateral and multilateral issues •Market access challenges High level of tariff barriers (among the highest of the emerging economies) Taxation on imported wine & spirit (incl. beers) Steel : BIS mandatory certifications + imposition of antidumping duties. •6th round of Free Trade Agreement (FTA) negotiations in March 2009  major issues : agriculture, service sector

Indian investments in Belgium • Indian investments in Belgium exceed 1 Bio €, mainly through mergers & acquisitions • Major M&A operations : • Crompton Greaves took over Pauwels Trafo in February 2005; • Suzlon Energy took over Hansen Transmissions in March, 2006; • Ranbaxy acquired Ethimed in March 2006; • Matrix laboratories Ltd (part of Mylan Pharma, US) acquired Docpharma in June 2005; • Jubilant Organosys, New Delhi took over PSI, Ghent in March 2005; • Raymond formed a joint venture with UCO Belgium in August 2006; • All Cargo, Mumbai bought substantial stake in Eculines, Antwerp in June 2005. • Satyam Computer Services took over S&V,Ghent in April 2008 • ORG Informatics acquired BSS (Belgium Satellite services) from Belgacom. • Other important players : Indian BPO companies like Tata Consultancy Services (TCS) , HCL, NIIT, … • Jet Airways

Belgian investments in India •Belgium invested 280 Mio $ in India from 2000 to 2008 (0.37% of total FDI, 21st most important investor) •Major sectors / investors : Pharmaceuticals : UCB, Solvay, AFGA Healthcare, GSK, Omega pharma. Engineering and Equipments : CMI, Tractebel, Barco, Magotteaux, Hamon, Machines Boucherie, Ateliers François Diamonds : Rosy Blue, Munic Gems, Antwerp Diamond Bank (financing) and Bettonville (diamond cutting machines). Steel and Metals : Bekaert (steel cords), Umicore (Zinc powder unit + automotive catalysts) IT : Research centre of Alcatel Lucent in Chennai + Several IT centres of Belgian companies (KBC, Colruyt, …) Logistics / Marine : Ports (Antwerp and Zeebrugge), logistics companies (Ahlers and Conti-lines) and dredging companies (DEME, De Nul). Emerging & New Markets : biotechnology (Imec, Viziphar), environmental services (Waterleau) and sustainable energy (Vincke). Food : Puratos and Inbev

Thank you for your attention!

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India Belgium 2009

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India Belgium 2009 — Presentation Transcript