Delhi Mumbai Industrial Corridor

Haryana Haryana Dadri Delhi-Mumbai Industrial Uttar Rajasthan Pradesh Corridor Gujarat Department of Industrial Policy & Madhya Promotion (DIPP) Pradesh Ministry of Commerce & Industry Government of India (MoCI) Maharashtra J.N.Port Osaka August 2, 2007

Overview DMIC along Dedicated Freight Corridor (DFC) to optimize on connectivity offered MOU between MoCI and METI, Japan in December, 2006 Inter-Ministerial Group formed to evolve the Project Outline Indo Japanese Task Force to guide the process First Taskforce Meeting held at Tokyo on 25th May, 2007 Second Task Force Meeting held at New Delhi on July 02, 2007 Third Task Force Meeting at Tokyo on July 23, 2007 Observations of Task Force Meetings incorporated in Concept Paper Project Outline finalization before Aug 22, 2007 visit of Premier Abe Feasibility Studies of Phase by December 2008 Project launch January 2008 Completion of Phase I by 2012 coinciding with Western DFC. 2

Delhi-Mumbai Industrial Corridor (DMIC) Haryana The 1483-km long DFC Project to be commissioned in 2012 Dadri Uttar Focus is on ensuring high impact Rajasthan Pradesh developments within 150km distance on either side of alignment of DFC Area under Project Influence is 14% Gujarat and population is 17% of the Country Madhya Pradesh 20% more than Japan Total Population in the Project Maharashtra Influence Area : 173.4Mn J.N.Port Total Workers in the Project Influence Area: 68.36Mn End Terminals DFC Alignment As per Census-2001 3

Sonepat Existing Industrial Belts ` ` Ghaziabad ` Dadri Gurgaon ` ` Noida Sohna ` ` ` Uttar Pradesh- Noida/ Alwar ` `` Faridabad Greater Noida, Ghaziabad ` (General Manufacturing) `` `` Jaipur Jodhpur ``` Haryana- Gurgaon, Bhilwara Faridabad, Sonepat `` ` ` Kota (Automobile, Electronics, Handloom) Rajasthan: Jaipur, Alwar, ` `` Ahmedabad Kota, Bhilwara, Jodhpur ` Anand (Marble, Leather, Textile) ` ` Vadodara ` Bharuch `` ` Surat Gujarat: Ahmedabad, Vadodara, Anand, Bharuch, ` ` Nashik Surat (Engineering, Gems & Jewelry, Chemicals) J.N.Port Maharashtra: Mumbai, Pune, Mumbai ``` `` `` ` Pune Nashik (Auto/Auto Component, Textile, Pharma, Aluminum) 4

Vision for DMIC “To create strong economic base with globally competitive environment and state-of-the-art infrastructure to activate local commerce, enhance foreign investments and attain sustainable development” Delhi-Mumbai Industrial Corridor is conceived to be developed as “Global Manufacturing and Trading Hub” supported by world class infrastructure and enabling policy framework Project Goals Double employment potential in five years (14.87% CAGR) Triple industrial output in five years (24.57% CAGR) Quadruple exports from the region in five years (31.95% CAGR) 5

Project Objectives Industrial Infrastructure Developing new industrial clusters Upgradation of existing industrial estates/clusters in the corridor Developing Modern Integrated Agro-Processing Zones with allied infrastructure Development of IT/ITeS Hubs and other allied infrastructure Providing efficient logistics chain with multi-modal logistic hubs Physical Infrastructure Development of ‘Knowledge Hubs’ with integrated approach Feeder Road/Rail connectivity to ports, hinterlands and markets; Development of existing Port infrastructure and Greenfield Ports; Upgradation/ Modernization of Airports; Setting up Power Generation Plants with transmission facilities; Ensuring effective environment protection mechanism Development of integrated townships 6

Integrated Corridor Development The development strategy for the DMIC is based on the competitiveness of each of the DMIC states : Holistic approach adopted to identify High Impact/Market Driven Nodes along the DMIC Each Node will be self-sustained regions with world class infrastructure and enhanced connectivity to DFC, Ports, and Hinterlands Market Driven Nodes are proposed to be in two categories Investment Regions - Approx. 200 sq km Area (Minimum) Industrial Areas - Approx. 100Sqkm Area (Minimum) 7

Integrated Corridor Development Criteria for Selection of Investment Region Each DMIC State to have at least one node to spread economic benefit Proximity to major urban agglomerations Potential for Developing Greenfield Ports (or) Augmentation Availability of land parcels and established industrial base Criteria for Selection of Industrial Area: To take advantage of inherent strengths of specific locations Mineral Resources Agriculture Industrial development, and, Skilled Human Resource base To spread the benefits of the corridor the project will also seek to link Under- Developed Regions along the Corridor to Well Developed Regions 8

Nodes for Phase-I Development (2008-12) Haryana Haryana a Short listed Investment Regions: Dadri 2 1 1) Dadri-Noida-Ghaziabad (Uttar Pradesh); 3 b Uttar Manesar-Bawal Region (Haryana); Rajasthan Pradesh 2) c 3) Khushkhera-Bhiwadi-Neemrana (Rajasthan); 4) Bharuch-Dahej (Gujarat); Gujarat f 5) Igatpuri-Nashik-Sinnar (Maharashtra); Madhya 6) Pitampura-Dhar-Mhow (Madhya Pradesh) d Pradesh 4 6 Short listed Industrial Areas: a) Meerut-Muzaffarpur (Uttar Pradesh) 5 Maharashtra J.N.Port b) Faridabad-Palwal (Haryana) e c) Jaipur-Dausa (Rajasthan); d) Vadodara-Ankleshwar (Gujarat); e) Industrial Area with Greenfield Port at DFC Alignment Alewadi/ Dighi (Maharashtra); Investment Region (Min.200SQKM) f) Neemuch-Nayagaon (Madhya Pradesh) Industrial Area (Min.100SQKM) 9

Phase- II (2012-18): indicative list of projects (to be finalized after consultations) Haryana Haryana 7 Investment Regions: g Dadri 7) Kundli-Sonepat (Haryana); Uttar 8) One Region in Gujarat (Location yet to be Rajasthan Pradesh h decided); j 9) Ratlam-Nagda (Madhya Pradesh) i Industrial Areas: Gujarat k g) Rewari-Hissar (Haryana)*; p Madhya 8 9 Pradesh h) Ajmer-Kishangarh (Rajasthan); i) Rajsamand-Bhilwara (Rajasthan); l m j) Pali-Marwar (Rajasthan)*; Maharashtra J.N.Port k) Palanpur-Sidhpur-Mahesana (Gujarat)*; n l) Surat-Navsari (Gujarat); m) Valsad-Umbergaon with Maroli Greenfield Port (Gujarat); DFC Alignment n) Pune-Khed (Maharashtra) Investment Region (Min.200SQKM) p) Shajapur-Dewas (Madhya Pradesh); Industrial Area (Min.100SQKM) 10

Components of Each Industrial Node Industrial Infrastructure New Industrial Clusters/ Parks/ SEZs Upgradation of existing industrial estates/clusters Modern Integrated Agro-Processing Zones with allied infrastructure IT/ITES Hubs and other allied infrastructure Efficient logistics chain with integrated multi-modal logistic hubs Physical Infrastructure Knowledge Cities / Skill Development Centers with integrated approach Augmentation of Existing Port infrastructure & Greenfield Port Development; Upgradation/ Modernization of Airports; Power Generation Plants with transmission facilities; Feeder Road/Rail connectivity to ports, hinterlands and markets; Dovetailed integrated townships catering to investor countries Effective Environment Protection Mechanism 11

Implementation Structure – 3 Tier An Apex Authoritywith concerned Central Ministers and Chief Ministers of respective DMIC States as Members; A Corporate Entity, referred as DMIC Development Corporation (DMICDC), to coordinate Project Development, Finance and Implementation; A Project Management Consultant will work under DMICDC for overall planning, monitoring and financial advisory services Project specific Special Purpose Vehicles (SPVs) to implement individual project components viz. Industrial Areas/SEZs, Roads, Power, Ports, Airports etc State-level Committee for coordination between DMICDC, Various State Govt. Entities and Special Purpose Vehicles (SPVs), wherever necessary. 12

Implementation Framework DMIC Steering Authority (concerned Central Ministers & Chief Ministers as Members) DMICDC (A Corporate Entity with representation from Central & State Govt. Agencies, FIIs and DFC) Master Development Plan, Techno-Economic Feasibility Studies, Business Plans, Projects Prioritization, Bundling & Unbundling of Projects to Central/Line Ministries & State Govt State-level Committee Project Specific Special Purpose Companies (SPC) (For both Central & State Govt Projects viz. Ports, Airports, Roads, Industrial Areas, Power etc) Approvals & Clearances (FIPB, NSC, MOEF etc), Monitoring & Commissioning of Projects, Financing Arrangement etc 13 Project-1 Project-2 Project-3 Project-4

Financial Structure of the DMICDC 49 % equity contributed by GOI 51 % equity contributed by Financial Institution(s) and other Infrastructure organizations Loans facilitated by DMICDC – as a pass-through arrangements for specific projects Project Development Funds contributed by GoJ, Fis and GoI. 14

Project Development Fund (PDF) Magnitude of Project and the high number of sub-project necessitates creation of a Project Development Fund: USD 250 mn to be raised as Project Development Fund PDF to be used specifically for all Project Development Activities to reach technical and financial closure PDF to be a revolving fund – expenditure on Project Development to be recovered from Project SPVs 15

Commitment of DMIC States Each State Government will notify a nodal agency to coordinate with DMICDC, State level agencies, and SPVs Would set up the investment regions/ industrial areas in each state; Assist in acquiring the land for setting up of infrastructure & investment regions/industrial areas Facilitate the clearances required from the State Government 16

Project Specific SPVs Implementation of specific components of industrial nodes Projects to be awarded to operators with relevant clearances through a transparent bidding process Project Operators to raise finances, to implement the projects Independent Board of Directors for each SPV Debts to be raised domestically and externally e.g. through JDRs Debts could also be raised by DMICDC and passed on to SPVs 17

Soft Infrastructure for DMIC Initiatives for Skill Enhancement Skill Development Centers planned for each investment region/ industrial areas Streamlined Administrative Procedures Each Node could have one or more Special Economic Zone, whose Head is empowered by the Act to grant necessary clearances Each State Government will constitute an empowered authority for each of the investment region/ industrial area These authorities to have delegated powers, from State Governments and other , to take decisions locally Flow of Goods Government of India has already announced road map for introducing a ‘Goods and Service Tax’ by 2010 which would replace central and state taxes into a unified tax regime 18

Overview Project Development Phase : Estimated Requirement : USD 250 mn Suggested Structure : Venture Capital Fund Project Developer : DMICDC Recovery of Investment : From successful bidders Contributors : GoJ, FIs and GoI 19

Timelines Concept Report finalized Appointment of Consultant for preparation of DPR: July 2007 Joint Presentation of final concept from Hon’ble PM (India and Japan): August 2007 Finalization of DPR by GoJ/GoI and the financing plan : December 2007 Project Launch: January 2008 20

Thank You 21

Key Issues in Project Implementation The complexity of implementing the DMIC will require rigorous detailing of all aspects of the project prior to implementation : Engineering Environmental Social Financial Contractual, etc The size of the project will also require to be implemented in phases. This will be critical in ensuring its sustainability Given the involvement of multiple Ministries and multiple state governments an effective framework for co-ordination is critical The DMIC Project involves an investment of US$ 90 bn with 60-70 different projects. An a priori strategy for the mobilization of finances to cover each phase of the project will also be critical 22

Four-Tier Implementation Structure An Apex Authority, Headed by the Prime Minister with concerned Central Ministers and Chief Ministers of respective DMIC States as Members; A Corporate Entity, referred as DMIC Development Corporation (DMICDC), to coordinate Project Development, Finance and Implementation; A Project Management Consultant (Joint Consultant) will work under DMICDC for overall planning, monitoring and financial advisory services State-level Coordination Entity for coordination between DMICDC, Various State Govt. Entities and Special Purpose Vehicles (SPVs); Project specific Special Purpose Vehicles (SPVs) to implement individual project components viz. Industrial Areas/SEZs, Roads, Power, Ports, Airports etc 23

Project Development Fund (PDF) Magnitude and importance of Project necessitates creation of Project Development Fund: Cost of Project development would be substantial Funding would need to be accessed from variety of sources-Central and State Govt., Indian and Foreign investors, bilateral and multilateral Institutions Investments to be recovered from PPP projects USD 250 mn to be raised as Project Development Fund from Govt of India, Japan and FIs The PDF to be used specifically for all Project Development Activities to reach technical and financial closure PDF ensures availability of finance to get projects off the ground 24

SMEs in India - Definition Manufacture (i) a micro enterprise, where the investment in plant and machinery does not exceed twenty five lakh rupees (US $ 55K); (ii) a small enterprise, where the investment in plant and machinery is more than twenty five lakh rupees (US$ 55K) but does not exceed five crore rupees (US$ 1.1M); or (iii)a medium enterprise, where the investment in plant and machinery is more than five crore rupees (US$ 1.1M)but does not exceed ten crore rupees(US$ 2.2M); 25

SMEs in India - Definition Services (i) a micro enterprise, where the investment in plant and machinery does not exceed ten lakh rupees (US $ 22K); (ii) a small enterprise, where the investment in plant and machinery is more than twenty lakh rupees (US$ 55K) but does not exceed two crore rupees (US$ 444K); or (iii)a medium enterprise, where the investment in plant and machinery is more than two crore rupees (US$ 444K)but does not exceed five crore rupees(US$ 1.1M); 26

SME Sector produces wide range of products : Simple consumer goods to highly precision and sophisticated end- products leather articles, More sophisticated items plastics and rubber goods, manufactured by SME fabrics and sector now include ready-made garments, television sets, cosmetics, electronic desk calculators, utensils, sheet metal microwave components, components, air conditioning equipment, soaps and detergents, electric motors, processed food and auto-parts, vegetables, drugs and pharmaceuticals. wooden and steel furniture and so on. 27

SME Sector in India Key growth engine of the Indian economy Constitutes 95% of all industrial units in the country Contributes more than 40% to domestic industrial output Generates 45% of industrial employment Constitutes about 50% of total manufactured exports (Direct and Indirect) Produces diverse range of products (more than 8,000 – consumer items, capital goods and intermediates) 28

SME Sector – Significance in Indian context SMEs are generally less capital-intensive and more labour-intensive. Are best suited for countries like India, China and most of the developing world having abundant supply of low-cost manpower and bountiful natural resources. Provide large scale employment, ensure equitable distribution of income and facilitate effective mobilization of resources of capital and skills, which would otherwise remain unutilized, particularly in rural and backward areas. India has already established a niche in SME Development Strategy and providing excellent support in product development, R&D, financial instruments, Infra-structure, marketing and export development Consequently, India is fast emerging as a global hub for labour-intensive knowledge-oriented business. 29

SMEs – The Most Vibrant & Potential Growth Segment A recent World Bank Report states: “There is now widespread recognition within India that vibrant SMEs are potentially a key engine of economic growth, job creation and greater economic prosperity”. 10th Plan Document of Govt. of India states: “Growth as planned will come from a sharp step-up in industrial and services growth, spurred by SMEs”. 30

SME Profile SSI units : 12.3 million Employment generated in SSIs : 29.5 million Production : US $ 100 billion Exports : US $ 27 billion SSIs account Industrial Production : 40% Exports : 35% (50% of Direct & Indirect) GDP Share : 7% 31

SME Profile Ownership pattern : Proprietorships : 78% Partnerships : 16% Corporate & Others : 6% Industrial Units : 96% Service Enterprises : 3% Ancillary Units : 1% 32

Challenges of SMEs Access to finance for SME Projects Lack of adequate working capital Quality industrial infrastructure (inclusive of Power) Marketing of products Technology up gradation and improvement in quality of products Delayed payments to SMEs Sickness and NPA management 33

India: Quick facts • India continues to be the best place to start a business, says a global services location index by AT Kearney. • India's foreign exchange reserves stand at US$ 180 billion. • India has displaced US as the second-most favoured destination for foreign direct investment (FDI) in the world after China according to an AT Kearney's FDI Confidence Index • Poised at a phenomenal growth of 500 per cent, the Indian insurance industry is expected to reach US$ 60 billion in the next four years. • Total premium of the general insurance industry grew 16.48 per cent in 2005- 06 to US$ 4.4 billion from US$ 3.78 billion a year earlier. • India adds about five million telephone subscribers every month. The total number of subscribers is expected to reach 250 million by the end of 2007. • The Indian IT-ITeS industry has recorded revenues of US$ 23.6 billion in FY 2005-06. 34

India: Quick facts • India has one of the largest road networks in the world, aggregating 3.34 million kilometers. It comprises 66,590 km of National Highways, 1,28,000 km of State Highways, 4,70,000 km of Major District Roads and about 26,50,000 km of other District and Rural Roads. • Indian roads carry about 70 per cent of the freight and 85 per cent of the passenger traffic. • India is the Sixth largest crude consumer in the world. • Estimated to be a US$ 350 billion industry, the Indian retail sector is growing at a three-year CAGR of 46.64 per cent. • The travel and tourism sector in India is expected to generate a total demand of US$ 53,544.5 million of economic activity in 2006, accounting for nearly 5.3 per cent of GDP and 5.4 per cent of total employment. • International Iron and Steel Institute (IISI) has ranked India as the seventh largest steel producer in the world with an overall production of about 40 million tonnes in 2006. 35

India: Quick facts • India exports US$ 6 billion worth of garments. • India's gems and Jewellery sector contributed to about 15 per cent of India's total merchandise exports during 2005-06. • India is the largest consumer of gold jewellery in the world and accounts for about 20 per cent of world consumption. • India is the largest diamond cutting and polishing centre in the world. • India is the second largest producer of rice and wheat in the world; one of the largest producers of sugar, sugarcane, peanuts, jute, tea and an assortment of spices. • The Indian pharmaceutical industry, consistently growing at 9.5 per cent in the last 5 years, could zip at 13.6 per cent between 2006 and 2010 and reach a market size of US$ 9.48 billion by 2010 from its present level of about US$ 5.7 billion. • Healthcare delivery is one of the largest service-sector industries in India. The country will spend US$ 45.76 billion on healthcare in the next five years. 36

Sectoral FDI Policies Sectors FDI Policy Transportation Civil Aviations Services: upto 49% under automatic route Road: upto 100% under Automatic route Shipping / Inland Water Transport: upto 74% under automatic route Retail Note permitted except Single Branded product retailing ( upto 51% under FIPB route) Insurance upto 26% under automatic route Finance, Banks:upto 74% under automatic route Economic NBFC: upto 100% under automatic route with organization capitalization norms 37

Sectoral FDI Policies Sectors FDI Policy Public sector Reserved: Railways Transport, Arms, Atomic Energy, Defense Aircrafts & Warships, Atomic menial & some such mineral – No FDI, Tech transfers and vendors possible Service Upto 100% under Automatic route for most services. Some services have entry conditions. Refer FDI Manual in CD IT Upto 100% under Automatic route Manufacturing Upto 100% under Automatic route Electricity, gas, Upto 100% under Automatic route except Atomic Energy water, other utilities 38

Sectoral FDI Policies Sectors FDI Policy Real estate, FDI up to 100% under automatic route in Construction townships, housing, built-up infrastructure and construction-development projects (which would include, but not be restricted to, housing, commercial premises, hotels, resorts, hospitals, educational institutions, recreational facilities, city and regional level infrastructure) entry conditions of minimum capitalization and area -Reference Press Note 2, 2005 at dipp.gov.in No speculative activities 39

Opportunities Fashion Technology Information Technology Design Technology Health Technology Bio Technology Infrastructure sectors 40

Fashion Technology - Opportunities Glamour & Limelight Creative High Value Addition Coverage (Extensive) Clothes Dresses Garments Textile 41

Fashion Technology - Opportunities (contd.) Footwear Various Leather Products Jewellery Travel Goods Fashion Accessories (purses, bags, carryon, watches etc.) Personal Embellishment (Face, Hair, Hands, Feet, Cosmetics, Perfumes etc.) 42

Information Technology : Opportunities Media Entertainment Contents, Animation, Games, Gaming 43

Design Technology : Opportunities Interiors - (Furniture & Furnishing – homes, work places, community, hospitals, schools, shopping places, recreation, sports) Exteriors - (Architectural) Industrial products Textiles Electrical appliances White goods Leather products Engineering products Machinery Dies and tools Watches Jewellery Hospital equipments Medical instruments Electronics and Communication Products and Equipments 44

Health Technology : Opportunities Personal Health Care Preventive Health Care Physiotherapy Monitoring (sensors) Community Health Vaccines Public Health Surveillance of Health Status (AIDS, Bird Flu etc) Medical Imaging Technology such as X-ray, Cat scanning, Computed Tomography Scan (CTs), Magnetic Resource Images (MRIs), Sonograms etc. Surgical & Physiotherapy 45

Health Technology : Opportunities (contd.) Personal Health Care Preventive Health Care Physiotherapy Monitoring (sensors) Community Health Vaccines Public Health Surveillance of Health Status (AIDS, Bird Flu etc) Medical Imaging Technology such as X-ray, Cat scanning, Computed Tomography Scan (CTs), Magnetic Resource Images (MRIs), Sonograms etc. Surgical & Physiotherapy 46

Health Technology : Opportunities (contd.) Health Information Management Medical Laboratory Technology Beauty Care and Wellness Nursing Pharmacy Technology Medical Research Laboratory Yoga & Naturopathy Herbal Therapies Environmental Health Food Supplements Food, Inspection and Testing etc. Medical Waste Management Hospital Supplies & Staffing Services 47

Bio Technology : Opportunities Opportunities knowledge sector US $ 365 billion in 2020. The biotech industry continues to grow at almost the same rate that it did in last year. The industry recorded 36.55 percent growth compared to the previous year’s revised figure of US $ 788 million. In 2003-04, there were just four companies with revenues in excess of US $ 22 million. An Ernst and Young study has named India as one of the five emerging biotech leaders in the Asia Pacific besides Singapore, Taiwan, Japan and Korea, with mainland China catching up quickly. The study ranked India third in the region based on the number of biotech companies (96) in the country, after Australia (228) and China, including Hong Kong (136). The above-expected growth will facilitate SMEs to enter into this field by setting up contract Research Organisations (CROs) and in other areas to meet the demand of US $ 3.1 billion market of Indian Pharmaceutical Industry. With the industry zooming part the US $ 1 billion mark, registering revenues of US $ 1.07 billion, the sector has achieved a significant milestone. 48

Power (Estimated investment: USD 60 billion) Over 67000 MW capacity to be added in the 11th plan period (2007-08 to 2011-2012) 9 UMPPs to be implemented during the 11th and 12th plans Transmission capacity augmentation through JVs for new generation 49

Roads (Estimated investment: USD 49 billion) NHDP-II: 4569 km, NHDP-VII: $38000 mn. $103800 mn. State Roads programme are in NHDP-III: 10000 km addtion $155200 mn. NHDP-IV: 20000 km $66100 mn. NHDP-V: 6500 km $98100 mn. NHDP-VI: 1000 km $39700 mn. 50

Railways (Estimated investment USD 67 billion) Dedicated Freight Corridors with PPP sub-projects envisaging more than USD 7 billion investment for the North South, East West Corridors alone Container operations Rail side warehousing Logistics Parks Development of Rail links to Ports Dedicated rail links for evacuation of specific industrial items Modernization of Railway Stations Development of new routes 51

Airports (estimated investment USD 9 billion) Metro Airport development through PPP Greenfield Airports Concept of Merchant Airports being examined by Government City side development in 24 Non-metro Airports Provision of Services within airports 52

Ports: (Estimated investment USD 11 billion) National Maritime Development All new berths on PPP basis Programme Gradual transition of old berths 387 port projects to PPP Compound Annual Rate of Growth during different Time span 12 10 10.78 ercentage 9.5 9.97 8 6 6.74 5.51 4 P 2 0 1951-2004 1992-2004 2001-2004 2003-2004 2004-2005 54 Years Post Liberalized Last 3 Years Prev ious Year Projected Grow th Era Pe riod 53

Telecom Untapped rural potential with low rural tele-density of 1.9% which must increase to 10% by 2012 Almost a million broadband connections added in 2006-2007. With low penetration scope for further increase Current tele-density 15% 54

Urban Infrastructure Mass Rapid Transit Systems at Mumbai at a capital cost of about USD 2.5 billion, Hyderabad and Kolkata at about USD 1 billion each, Ahmedabad at about USD 950 million and other cities 55

Delhi Mumbai Industrial Corridor

by Vishal Dedhia on Apr 04, 2010

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