A newsletter for economic development agencies from IBI Consulting.

1. IBI Investor
Newsletter for economic development agencies
Issue 1 | January 2011
India Inc.’s outward
investment increasing
Welcome to the inaugural issue of
 Overseas investment
‘Investor’ from IBI Consulting!
by Indian companies
to increase driven by
the need to explore If one were to ask what David Cameroon, Barack Obama, Nicholas
new markets Sarkozy, Wen Jia Bao and Dmitry Medvedev had in common in the year
2010, it is this – all of them made a visit to the Indian subcontinent last
year. The Heads of the state of 5 most powerful nations in the world were
 India is the 21st
largest outward in India one after the other. This in itself is a testimony to India’s influence
investor as a nation in the world economic arena.
While many countries are still struggling to come out of the
 Indian firms have economic recession, India has withstood the onslaught of recessionary
invested over $75
pressures and is again on a steady growth path. India is estimated to grow
billion overseas in the
past decade at an 8.7% in 2011 according to forecasts by the Asian Development Bank.
The boon of a huge working population (from 2010-30 India will add 241
million people into the working age population) and the minimal impact the
 Sectoral and regional global recession has had on the country continues to instill and inspire
distribution of outward
confidence in the minds of the Indian corporate world.
Indian FDI is
increasing
Hence it is no surprise that India has witnessed an exodus in
outward investments in the recent past. The country maintained its
 Singapore is the position as the second highest foreign employer in the UK, after the US
largest host to Indian (2009 UK inward foreign direct investments official data). Indian
outward FDI
companies are increasingly exploring newer geographies and scouting for
opportunities to satisfy its appetite for growth. Apart from the ICT sector,
 Favourable regulatory manufacturing, life Sciences and the Services sectors are looking at
developments have capitalizing on the investment opportunities outside the country.
supported India’s
emergence as an
As an Economic Development Agency there could not be a better
outward investor
time to consider the Indian market as a strategic destination, not only to
attract investments from but for companies in your region to explore
 Though there was a 25 opportunities in India. We welcome you to be part of the growth story as
per cent drop in 2009, they say of ‘Incredible India!’
Indian firms are once
again increasing their
In this issue we have highlighted the Aerospace sector in India
overseas investment,
including through which is the next big sector that is taking off in the country. Please read on
M&As to see why.
Source: Vale Columbia Also wishing all of you from IBI Consulting, the best 2011 has to
Center on Sustainable offer.
International Investment
For comments/queries: Shankar Ramachandran at shankar@ibimail.net or +91 99999 48732
Copyright © 2011 IBI Consulting
www.consultibi.com

2. India’s Expanding Aerospace Industry
The Indian aerospace industry is one of the fastest growing in the
world largely driven by the increase in defense spending and the growing
commercial aviation market.
A recent example of the growing commercial aviation market is the
Karnataka – India’s $16 billion order for 180 airplanes from Airbus by IndiGo Airlines, India’s
Aerospace Hub third largest domestic carrier. Many Indian carriers are growing their fleets
as demand booms in India, where the economy is growing at nearly 9
 According to report percent. IndiGo'srival SpiceJet, agreed to buy 30 Nextgen turboprop aircraft
published by the from Canada's Bombardier Inc. for $915 million in November 2010.
Confederation of
Indian Industry and India is also emerging as a Maintenance Repair Overhaul (MRO)
PwC, Karnataka has destination. According to a report by the Confederation of Indian Industry,
emerged as the critical India’s MRO segment is estimated to grow at 10 percent and reach $2.6
destination in the billion by 2020.
aerospace value chain.
Defense aviation is another strong driver of growth with India
 Both manufacturing expected to spend over $100 billion in the next decade for the purchase of
and service companies defense equipment. In January 2011 India’s defense ministry awarded
have a presence in the
initial operating clearance to the air force’s indigenous light combat aircraft
state. A large number
called Tejas. Given that indigenous material comprises only about 30
of public sector
percent of military equipment, there is immense potential for foreign
aerospace institutions
such as Hindustan players in this area.
Aeronautics Limited
and National Pursuing the goals of self-reliance in the defense sector, the
Aeronautics government introduced offsets or binding arrangements written into
Laboratory are based commercial defense contracts that oblige the foreign vendor to invest a
in Bangalore. certain portion of their contract back into the home country. The Defense
Procurement Policy 2011 of the Ministry of Defense has enlarged the scope
 To add to existing of offsets and reformed the procurement process by including homeland
facilities and exploit security and civil aerospace products under the ambit of offsets.
opportunities in the
international market, The Indian government recognizes the need for technological tie-
the state government ups with foreign manufacturers to successfully develop commercial and
has planned an defense aircraft in the domestic market. Reforms in sourcing and the
aerospace special regulatory environment along with the changing market dynamics offer
economic zone at various opportunities for foreign companies in the aerospace industry.
Devanahalli close to
the new Bangalore
IBI Consulting works closely with regions across the world exploring
International Airport.
opportunities in partnerships or joint-ventures with Indian companies in the
aerospace and defense sector. IBI helps facilitate meetings and all other
support services for delegations. For a detailed presentation on IBI services,
please write to shankar@ibimail.net.
The Investment & Trade Promotion practice (ITP) at IBI Consulting helps Economic Development Agencies (EDA)
and trade offices attract inward investment into their respective regions from Asia as well as help trade offices of
foreign economies find distributors and trading partners in Asian markets. Our portfolio of services includes:
 Market Access Consultancy
 Market Representation & Outreach
 Investor Seminars, Events & Road Shows
 Trade Missions Support Services
 Lead Generation & Nurturing
For comments/queries: Shankar Ramachandran at shankar@ibimail.net or +91 99999 48732
Copyright © 2011 IBI Consulting
www.consultibi.com

3. IBI State Watch
Gujarat:
Gujarat is called the ‘petro capital of India’. Strategically located on western
coast of India, the state has the longest coastline in the country of about
1600 Kilometers. The state contributes 34 per cent to petrochemicals and
27 per cent to India’s chemicals & pharmaceutical business. And with 41
Gujarat ports, the state handles 25 percent of the countries sea cargo.
Capital: Gandhinagar The people of Gujarat have been traditionally entrepreneurs and are known
to be enterprising with high levels of business acumen. The state also holds
Population: 50 million the unique distinction of having been the hot bed of white revolution. With
one of the largest milk cooperative of the country operating from the
Language: Gujarati region, Dairy sector is big in the state.
Gujarat is -
Gujarat was recently in the news for having held the ‘Vibrant Gujarat’
 World’s largest
Summit which was intended to bring together various stake holders who
producer of included business leaders, policy makers, investors and thought leaders
processed under one roof to showcase the state as a leading investment destination.
diamonds & wall The two day summit saw the signing of 7936 MOUs worth $450 billion with
clocks promises of creating over 5 million jobs.
 The world’s largest
producer of Castor Power, Manufacturing, Urban Development & Infrastructure were the main
& Cumin sectors which saw the investment commitments flowing in. Japan and
 The world’s third Canada were partner countries at the conclave.
largest producer of
denim The Key sectors in the state include:
 World’s largest
greenfield  Chemicals & Petro-chemicals
 Engineering & Auto
petroleum refinery
 Pharma & Life Sciences
 India’s largest
 Environmental Technologies
producer of
 Food & Agro
pharmaceuticals,  Gems & Jewellery
chemicals and  Textiles & Apparel
petrochemicals
Upcoming Events:
NASSCOM India Leadership Forum
 Mumbai, 8 to 10 February, 2011
 For more information: http://indialeadershipforum.nasscom.in/
Aero India 2011
 Asia’s premier airshow will be held in Bangalore from February 9 to 13, 2011.
 The show will have exhibitors from over 25 countries showcasing new technologies and products.
 For more information: www.aeroindia.in
For comments/queries: Shankar Ramachandran at shankar@ibimail.net or +91 99999 48732
Copyright © 2011 IBI Consulting
www.consultibi.com