Kochar Trade With Indiav1.2


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Kochar Trade With Indiav1.2

  1. 1. The Path Towards India India’s Growing Presence in the Global Stage Vikram Kochar Universal Metals, Inc New York and Washington DC 516 829 0896 / 703 598 7007 [email_address] www.universalmetals.us Buyer and Seller Stainless Steel Seconds and Usables Non Ferrous Scrap
  2. 2. Quote from Dwight Eisenhower <ul><li>“ We who are free -- and who prize our freedom above all other gifts of God and nature --must know each other better; trust each other more, support each other.” </li></ul><ul><ul><ul><li>Dwight Eisenhower uttered hope in New Delhi in 1959 </li></ul></ul></ul><ul><li>Irksome….that only it is now that a stronger relationship is being forged </li></ul><ul><li>USA - World’s most powerful democracy </li></ul><ul><li>India - World’s most populous democracy </li></ul>
  3. 3. Contents <ul><li>Introduction </li></ul><ul><li>India’s Current State </li></ul><ul><li>Necessary Growth of India </li></ul><ul><li>Indian Policies for 2006 and Beyond </li></ul><ul><li>US and India </li></ul><ul><li>Conclusion </li></ul>
  4. 4. Introduction <ul><li>India is one of the fastest growing free economies of the world (7% to 8% growth rate) </li></ul><ul><ul><li>Currently the 12th largest economy </li></ul></ul><ul><ul><li>3rd largest in Asia </li></ul></ul><ul><li>Likened their emergence to the emergence of America in the 20 th century, with impacts potentially as dramatic </li></ul><ul><ul><li>Trade and Economic Importance </li></ul></ul><ul><ul><li>Infrastructure Development </li></ul></ul><ul><ul><li>Defense Policies </li></ul></ul><ul><li>World has taken notice </li></ul><ul><ul><li>Davos Conference (World Economic Forum) </li></ul></ul><ul><ul><li>Dignitary Visits </li></ul></ul>
  5. 5. Introduction (cont.) <ul><li>Many Analysts from the west state that: </li></ul><ul><ul><li>India is set to become the office of the world </li></ul></ul><ul><ul><li>Strategic partner to balance Asian power </li></ul></ul><ul><li>Each Passing Day </li></ul><ul><ul><li>Indian businesses opening in the USA </li></ul></ul><ul><ul><li>American businesses opening up in India </li></ul></ul><ul><ul><ul><li>Many US Companies have a household name in India </li></ul></ul></ul><ul><ul><ul><ul><li>McDonalds </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Coca Cola </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Microsoft </li></ul></ul></ul></ul><ul><li>Many of the world’s business people are convinced It is on the brink of replicating the astonishing burst of growth that transformed China </li></ul><ul><ul><li>Booming High-Tech Service Sector </li></ul></ul><ul><ul><li>Tens of Millions of Affluent Consumers </li></ul></ul>
  6. 6. Current State <ul><li>Population - 1.1 Billion </li></ul><ul><ul><li>US - 298 Million </li></ul></ul><ul><ul><li>World - 6.4 Billion </li></ul></ul><ul><ul><li>It occupies 2.4% of world’s land mass, but supports more than 15% of the world’s population </li></ul></ul><ul><li>2005 GDP - 3.678 Trillion </li></ul><ul><ul><li>4th Biggest GDP in the world </li></ul></ul><ul><ul><li>50% Services / Transportation </li></ul></ul><ul><ul><li>22.7% Agriculture </li></ul></ul><ul><ul><ul><li>Wheat, Rice, Grains, Oil, Seeds, Sugar, Jute, and Cotton </li></ul></ul></ul><ul><ul><li>26.6% Manufacturing / Industry </li></ul></ul><ul><ul><ul><li>Textiles, jutes, processed foods, steel, machinery, transport equipment, cements, aluminum, fertilizers, mining, petroleum, computer software </li></ul></ul></ul>
  7. 7. Current State <ul><li>Various sectors of India’s economy have grown in 2005 </li></ul><ul><ul><li>Agriculture - 11% </li></ul></ul><ul><ul><li>Manufacturing - 9% </li></ul></ul><ul><ul><li>Electricity - 8% </li></ul></ul><ul><ul><li>Total GDP up 7% </li></ul></ul><ul><li>Booming economy has increased foreign / commercial presence in India </li></ul><ul><ul><li>BMW invested 23M in a new plant </li></ul></ul><ul><ul><li>Cisco has planned 1.1B investment over the next 3 years </li></ul></ul><ul><ul><li>McDonald's, Coca Cola, Benetton, MTV are an established part of culture in India’s youth </li></ul></ul><ul><ul><li>Fidelity Investments have launched an Indian Focused Fund </li></ul></ul>
  8. 8. Current State <ul><li>Driving the super cycle along with China </li></ul><ul><ul><li>Refocus of Infrastructure and Manufacturing </li></ul></ul><ul><li>India has passed the US as the second most preferred spot to invest in (After China) </li></ul><ul><ul><li>$5.3B Invested in India </li></ul></ul><ul><li>India’s growth is spurred by vast and growing number of entrepreneurs who want to make money </li></ul>
  9. 9. Current State - India’s Roadblocks <ul><li>Crumbling Infrastructure </li></ul><ul><li>Pollution </li></ul><ul><ul><li>Needs help in energy and does not want to rely on dirty coal </li></ul></ul><ul><li>Heavily layered and complex government system </li></ul><ul><ul><li>Tremendous amount of bureaucracy </li></ul></ul><ul><li>Idea development have become a major source of political and bureaucratic corruption </li></ul><ul><ul><li>No process to strengthen an entrepreneurial idea </li></ul></ul>
  10. 10. Current State - India’s Roadblocks <ul><li>Basic Culture </li></ul><ul><ul><li>India has 17 major languages, and 27,000 different dialects </li></ul></ul><ul><li>Female Illiteracy Rate at 55% </li></ul><ul><li>216 Million Undernourished </li></ul><ul><ul><li>25% of the world’s population </li></ul></ul><ul><ul><li>25% of the world lives below the poverty line </li></ul></ul><ul><li>1/3 of the population contributes to 80% of the wealth </li></ul><ul><li>Overall Cultural Paradox </li></ul><ul><ul><li>India is a society that is open, eager, confident, and ready to take on the world. But its state, its ruling, conservative, class, is far more hesitant, cautious, suspicious, of the changes around it </li></ul></ul>
  11. 11. The Growth of India <ul><li>Coinciding with its current state </li></ul><ul><ul><li>Set to leave third world status </li></ul></ul><ul><ul><li>Further elevate it as an economic power house </li></ul></ul><ul><li>Growth is a necessity </li></ul><ul><ul><li>If not, bring rise in unemployment due to its own growing population </li></ul></ul><ul><ul><li>Balances China’s Power in the Region </li></ul></ul>
  12. 12. The Growth of India <ul><li>India’s government realizes that the way to growth is through: </li></ul><ul><ul><li>Redevelop its Infrastructure </li></ul></ul><ul><ul><li>Increase Manufacturing / Industrialization </li></ul></ul><ul><ul><li>Stronger role from Central Government </li></ul></ul><ul><ul><li>Alleviate Tax policies </li></ul></ul><ul><ul><li>Increasing Trade </li></ul></ul><ul><ul><ul><li>Globalization </li></ul></ul></ul><ul><ul><ul><li>Capitalism </li></ul></ul></ul><ul><ul><li>Strengthen its Relationship with the US </li></ul></ul><ul><li>It was essentially US road map to growth during its early stages </li></ul>
  13. 13. India’s Path to Growth <ul><li>India realizes that a major driver for their future growth is the modernization of their current infrastructure </li></ul><ul><li>Re-Developing their infrastructure </li></ul><ul><ul><li>India needs $150B of investment in ports, roads, power plants, etc. </li></ul></ul><ul><ul><li>Economic growth of 8% drives uses of metals </li></ul></ul><ul><ul><li>I.e. - houses, cars, appliances </li></ul></ul><ul><ul><li>It is getting better as its being funded through public and private funds </li></ul></ul>
  14. 14. India’s Path to Growth <ul><li>Bharat Nimran Program </li></ul><ul><ul><li>Government Program with 15B dollar investment to strengthen infrastructure </li></ul></ul><ul><ul><ul><li>Roads, Electrification, Telecommunication lines, water, agriculture, bridges, seaports, airports, growth poles </li></ul></ul></ul><ul><li>Major funding coming from Privatization </li></ul><ul><ul><li>2 Major Airports are being Privatized </li></ul></ul>
  15. 15. India’s Path to Growth <ul><li>Reintroducing the path to manufacturing / industrialization </li></ul><ul><ul><li>Agricultural to Industrial to Service Economy </li></ul></ul><ul><ul><li>US is Example – At Service Phase </li></ul></ul><ul><ul><li>China is Example – At Industrial Phase </li></ul></ul><ul><li>Current output of major Indian mills and recycling facilities have increased </li></ul><ul><li>21B spent in developing steel plants by Mital and Posco </li></ul><ul><ul><li>Steel consumption will rise to 160M tons from 35M tons (5-7 years) </li></ul></ul><ul><li>Need more raw commodities to meet the increased demand </li></ul><ul><li>Overall increase in manufacturing </li></ul><ul><ul><li>Highly Engineered / Precisioned Items </li></ul></ul><ul><ul><li>Opportunities for investment </li></ul></ul>
  16. 16. India’s Path to Growth <ul><li>Indian Government Helping </li></ul><ul><ul><li>Setup economic zones in which companies don’t pay taxes or duties on imported goods needed for manufacturing </li></ul></ul><ul><ul><li>Completed 10 Billion Dollar National Highway project connecting the countries four major cities </li></ul></ul><ul><ul><li>Investment Expenditures up 25% (1.1B) </li></ul></ul><ul><ul><li>Easing Foreign Investment and Privatization Policies </li></ul></ul><ul><ul><ul><li>Industries have benefited from eased policies </li></ul></ul></ul><ul><ul><ul><ul><li>Automobile, Software, Telecom, Electronics </li></ul></ul></ul></ul><ul><ul><ul><li>Government to focus on following industries </li></ul></ul></ul><ul><ul><ul><ul><li>Mining, Trade, Pensions </li></ul></ul></ul></ul><ul><li>Government getting better every week as set of regulations have been eased or permissions have been eliminated </li></ul>
  17. 17. India’s Tax Policies for 2006 <ul><li>Lowering Import duties from 15% to 12.5% </li></ul><ul><li>Raw Metals and Manufacturing Inputs </li></ul><ul><ul><li>Alloy Steel and Primary and secondary non-ferrous metals reduced from 10% to 7.5% </li></ul></ul><ul><ul><li>Import on steel melting scrap and mineral products is at 5% </li></ul></ul><ul><ul><li>Ore and Concentrates from 5% to 2% </li></ul></ul><ul><ul><li>Major Bulk Plastics from 10% to 5% </li></ul></ul><ul><li>Custom Duties have been lowered from 10% to 7.5% on: </li></ul><ul><ul><li>Refractories and Graphite electrodes </li></ul></ul><ul><ul><li>Raw Materials for refractories such as graphite powder, aluminous cement, boron carbide, reactive alumina, silicon metal, and micro fumed silica </li></ul></ul><ul><li>Tax on small cars to decrease from 24% to 16% </li></ul>
  18. 18. India’s Global Trade <ul><li>Infrastructure, Industrialization, Easing Tax Policies are primary drivers for an increased global presence of India </li></ul><ul><li>Reaching towards market oriented economic reform </li></ul><ul><ul><li>Liberalized Foreign Investment and Exchange Regimes </li></ul></ul><ul><ul><li>Industrial Decentralization </li></ul></ul><ul><ul><li>Significant Reduction in Tariffs and other trade barriers </li></ul></ul><ul><ul><li>Reform and Modernization of the Financial Sector </li></ul></ul><ul><ul><li>Significant Adjustments in Government Monetary and Fiscal Policies </li></ul></ul><ul><ul><li>Safeguarding Intellectual Property Rights </li></ul></ul>
  19. 19. US and India <ul><li>India’s and US growing relationship </li></ul><ul><li>Strong relationship has already existed </li></ul><ul><ul><li>US is India’s Largest Trading Partner </li></ul></ul><ul><ul><ul><li>Total Bilateral Trade is 21.66B </li></ul></ul></ul><ul><ul><ul><ul><li>Exports to India is 6.1B (Up 22.4%) </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Imports from India is 15.56 B (Up 19.2%) </li></ul></ul></ul></ul><ul><ul><li>Of all FDI Into India, US contributes one of the largest (11%) </li></ul></ul><ul><ul><ul><li>$401M in 2004 </li></ul></ul></ul><ul><ul><ul><li>$11.3M in 1991 </li></ul></ul></ul>
  20. 20. President Bush Visits India <ul><li>Three year deadline set to double trade </li></ul><ul><li>Conducted Joint Commission Sessions </li></ul><ul><ul><li>Science and Technology </li></ul></ul><ul><ul><li>Cooperation in Cyber-Security </li></ul></ul><ul><ul><li>Development of low cost drugs to fight AIDS </li></ul></ul><ul><li>How India can draw more investment from America </li></ul><ul><ul><li>INFRASTRUCTURE PROJECTS </li></ul></ul><ul><ul><li>Requires 150B infrastructure development to sustain growth rate </li></ul></ul>
  21. 21. New Patterns of Globalization <ul><li>For growth and success to continue </li></ul><ul><ul><li>India </li></ul></ul><ul><ul><ul><li>Recognition of leaders that developing countries must open their markets to imports and manufactured goods and services </li></ul></ul></ul><ul><li>At the Same Time </li></ul><ul><ul><li>USA </li></ul></ul><ul><ul><ul><li>Wealthy Countries Need to Reduce their Agricultural Tariffs and Subsidiaries </li></ul></ul></ul><ul><li>Both Governments need to seek: </li></ul><ul><ul><li>Liberalization of Investment Restrictions </li></ul></ul><ul><ul><li>Regulatory Transparency </li></ul></ul><ul><ul><li>Reducing or Eliminating Tariff Barriers </li></ul></ul><ul><li>Lead to Increased Trade and Investment </li></ul>
  22. 22. US Interest in India <ul><li>India’s requirement for equipment and services will exceed tens of billions of dollars in the mid term as the economy globalizes and expands </li></ul><ul><ul><li>Infrastructure </li></ul></ul><ul><ul><li>Transportation </li></ul></ul><ul><ul><li>Energy </li></ul></ul><ul><ul><li>Environment </li></ul></ul><ul><ul><li>Health Care </li></ul></ul><ul><ul><li>High Tech </li></ul></ul><ul><ul><li>Defense </li></ul></ul>
  23. 23. Indian Investment Opportunities <ul><li>Best Prospects for Investment in India </li></ul><ul><ul><li>Telecom Equipment </li></ul></ul><ul><ul><li>Computers and Peripherals </li></ul></ul><ul><ul><li>Electrical Power Generation, Transmission, Distribution Equipment </li></ul></ul><ul><ul><li>Pollution Control Equipment </li></ul></ul><ul><ul><li>Oil and Gas Field Machinery </li></ul></ul><ul><ul><li>Mining Industry Equipment </li></ul></ul><ul><ul><li>Medical Equipment </li></ul></ul><ul><ul><li>Defense Industry Equipment </li></ul></ul><ul><ul><li>Textile Machinery </li></ul></ul><ul><ul><li>Machinery Tools </li></ul></ul><ul><ul><li>Food Processing </li></ul></ul><ul><ul><li>Cold Storage Equipment </li></ul></ul><ul><ul><li>Removable Energy Equipment </li></ul></ul>
  24. 24. Facts and Figures of India Chemicals Gems & Jewelry Iron & Steel Tea Fertilizers Handicrafts Edible Oils Fabrics Transport Equipment Cotton Apparel Electronic Goods Precious Stones Machinery Engineered Goods Petroleum Agricultural Products Total Imports to India - 99.8B Total Exports from India - 76.3 B
  25. 25. Facts and Figures of India Iron & Steel Ferrous Waste / Scrap Metal Chemicals Computer Hardware Leather Products Fertilizers Gems / Jewelry Cotton Agriculture Related Products Advanced Machinery Internet Enabled Services Aircraft and Parts Textiles / Ready Made Garments Diagnostic or Lab Reagents Principal US Imports Principal US Exports
  26. 26. Indian Attractions <ul><li>Short Term Attraction </li></ul><ul><ul><li>American Businesses to other Indian Attractions </li></ul></ul><ul><ul><ul><li>Economy growing more than 7% for the fourth straight year </li></ul></ul></ul><ul><ul><ul><li>Fast Expanding Middle Class </li></ul></ul></ul><ul><ul><ul><li>India’s main stock index was up by more than 50% last year </li></ul></ul></ul><ul><ul><li>Tremendous Potential as population move towards urban areas </li></ul></ul><ul><ul><ul><li>India’s boom has yet to reach 2/3 of its population </li></ul></ul></ul>
  27. 27. Indian Attractions <ul><li>Long Term Attraction </li></ul><ul><ul><li>Stability </li></ul></ul><ul><ul><ul><li>Proven mechanism for peaceful transfer of power in government and corporations </li></ul></ul></ul><ul><ul><ul><li>Ability to Withstand terrible internal conflicts without danger to its integrity </li></ul></ul></ul><ul><ul><li>Democracy </li></ul></ul><ul><ul><li>Demographics </li></ul></ul><ul><ul><ul><li>China’s one child policy ensures that it will grow old before it gets rich </li></ul></ul></ul><ul><ul><ul><li>India will remain younger and more dynamic </li></ul></ul></ul>
  28. 28. Long Lost Brothers? <ul><li>According to the Pew global attitudes study, </li></ul><ul><ul><li>India is the most pro-America country in the world </li></ul></ul><ul><ul><li>71% of Indians have a favorable impression of the US </li></ul></ul><ul><li>Worried about outsourcing to India? </li></ul><ul><ul><li>Through all the outsourcing of goods and services over, American incomes have actually risen faster than those of other major industrial countries </li></ul></ul><ul><ul><li>More than half the fortune 500 companies source some IT work to India </li></ul></ul>
  29. 29. Long Lost Brothers? <ul><li>Indian’s Understand Americans </li></ul><ul><ul><li>Noisy open society with a chaotic democratic government </li></ul></ul><ul><ul><li>English speaking </li></ul></ul><ul><ul><li>Familiar world view </li></ul></ul><ul><ul><li>Growing fascination with each other in bringing together businessmen, non-governmental activists, journalists, and writers </li></ul></ul><ul><li>Similar political, social and economic counterparts </li></ul><ul><ul><li>I.e. - China, Middle East </li></ul></ul>
  30. 30. India: Already Doing Well <ul><li>India is doing very well in terms of growth and establishing its place in the Global Economy </li></ul><ul><li>India is a very self reliant country </li></ul><ul><ul><li>Domestic Consumption is 85% </li></ul></ul><ul><li>Recognition that India has a lot of potential is beginning to sink in </li></ul><ul><li>India will be the number one knowledge production center of the world </li></ul><ul><ul><li>Many companies are opening R&D outfits in India </li></ul></ul><ul><li>It is growing faster and lifting more people out of poverty than ever before </li></ul>
  31. 31. India’s “Modest” Growth <ul><li>3 Million new mobile Connections each month </li></ul><ul><ul><li>Second Fastest Growing Market (After China) </li></ul></ul><ul><ul><li>Well Ahead of Targets </li></ul></ul><ul><li>1 Million vehicles a year by 2005-2006 </li></ul><ul><li>Heavy Manufacturing Items such as TVs and Fridges will grow to 9.5 M and 4.7 M respectively </li></ul><ul><li>70,000 Bank Branches, 200,000 ATMs by 2009 </li></ul><ul><li>BPO and Software will have a turnover of 80 Billion by 2007 </li></ul>
  32. 32. India’s Economic Transformation <ul><li>2003 Study by Goldman Sachs </li></ul><ul><ul><li>Over the next 50 years, India will be the fastest growing of the world economies </li></ul></ul><ul><li>Per capita income will be 35 times higher than today </li></ul><ul><li>Indian Companies are growing at an extraordinary rate of 15-20% </li></ul><ul><li>Will become a knowledge economy and an even bigger player than it is today on the global stage </li></ul>
  33. 33. India’s Economic Transformation <ul><li>India will also be the drug factory of the world </li></ul><ul><ul><li>Tools and Production Facilities will be built to ensure it can help Foreign Multinationals take advantage of the cost savings </li></ul></ul><ul><ul><li>Indian Companies themselves will be spending a lot in R & D for development of drugs </li></ul></ul><ul><li>Strong Vehicle for Equity Investing </li></ul><ul><ul><li>Indian National Stock Exchange and Bombay Stock Exchange are 3rd and 5th largest in the world in terms of investment </li></ul></ul>
  34. 34. India’s Bright Future <ul><li>Unlike China, many Indians residing in foreign land are returning in huge numbers because salaries and quality of life has been greatly improving </li></ul><ul><ul><li>Convey Western Philosophies for economic growth </li></ul></ul><ul><li>It’s Finance Minister attended the G-7 rich countries treasury meeting for the first time in London </li></ul><ul><li>India’s National Income will overtake that of Italy by 2014, France by 2020, Germany in 2023, and Japan by 2033 </li></ul><ul><li>India, like China, still has starving millions, but its high-tech all stars have become world beaters </li></ul>
  35. 35. Summary <ul><li>“ What is happening today is the birth of India as an independent society, boisterous, colorful, open, and ready for change” </li></ul><ul><ul><li>Jawaharlal Neru, India’s first prime minister </li></ul></ul><ul><li>India, even with its issues, is a tremendously growing economy, and is being noticed by business and foreign dignitaries around the world </li></ul><ul><li>Multiples opportunities for investment </li></ul><ul><li>US and India relations getting stronger based on similar goals and challenges </li></ul><ul><li>Any questions???? </li></ul>
  36. 36. UNIVERSAL METALS, INC. 98 CutterMill Road, Suite 428 N 1600 North Oak Street Suite 824 Great Neck, NY 11021 Arlington, VA 22209 Phone: 516 829 0896 Phone: 703 598 7007 Fax: 516 829 0955 Fax: 703 807 2196 [email_address] www . universalmetals . us Universal Metals was founded in 1991 as a secondary and excess prime exporter of non ferrous items, focusing specifically on stainless and electrical steel. We are an exporter of secondary stainless steel products in a form used prior to manufacturing. We sell stainless steel sheets, stainless steel coils, pipes and tubes, and bars and rods. Once a manufacturer has this product, they then produce the final end product with it. We also export various non ferrous scrap items, including ISRI specifications from the copper, brass, stainless steel, and aluminum family. In recent years, there has been a surge in demand for these products in the overseas market. Universal Metals has taken advantage and demonstrated tremendous growth during those years. Industries around the world that utilizes the unique chemical properties of stainless steel secondaries and other non ferrous scrap including chemical and power, food and beverage, pharmaceutical, and transportation. Other major uses are in architecture, domestic appliances, household items, and electronic appliances. Our end users all serve the industries mentioned. In fact, the demand of stainless has become so evident that the secondary market continues to grow just to keep pace with the growth of all industries and the expanding markets around the world. This is a niche that Universal Metals have helped develop and leverage in order to serve the growth. Universal Metals, inc. with its experience in the non ferrous industry, and the overseas markets, will continue to help facilitate the growth of industries throughout the world. Our international operations are further facilitated by our offices in India. Most importantly, as recognized by our suppliers and our customers, what we bring is not only a renowned reputation, but a personal relationship to ensure we accommodate our customer’s needs to the absolute best of our abilities. Our renowned reputation and continued growth comes from our fast, efficient, and dependable service. Our experience with exporting throughout the globe gives us a competitive advantage that is passed on to our customers. We look forward to hearing, and working with you, as your ultimate Non Ferrous / Stainless Steel buyer and seller. Sincerely, Vikram Kochar,