India Presentation - Business Environment

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  • http://personalliberty.com/2011/05/05/brics-want-to-rely-less-on-us-dollar/
  • http://www.tiptoptens.com/2011/09/06/top-10-reasons-of-indias-economic-growth-in-recent-years
  • http://www.tiptoptens.com/2011/09/06/top-10-reasons-of-indias-economic-growth-in-recent-years
  • http://facts.randomhistory.com/2009/07/21_india.htmlhttp://www.rediff.com/money/2005/apr/18eco.htm
  • After looking at the two maps, one can note that the division of the states also correlate to the ethnic breakdown in the country. When doing business in India remember that these states can be more different than alike. Make sure you understand each regions rules and regulations as each state can be quite independent. Some states welcome foreign business while others do not. Also of importance is the fact that India is recognized as a prime location for some American business to expand, but Indian business are also looking for American counterparts. http://www.nacbb.com/newsletters/2010-june-business-growth.html
  • This map demonstrates that India is one of the most dense countries in the worldhttp://www.theglobaleducationproject.org/earth/human-conditions.php
  • www.cia.gov
  • http://www.exploreten.com/quick-list/most-populated-cities-of-india-top-10/
  • Note that the old Caste system is still gradually going away, but it is still in place. The government recgonizes that the consumer class will help india prosper and maintain its place in the world.
  • India has more than 15 native tongues, although English is the language spoken for national, political and commercial communication. On a world’s scale, Mandarin is the top language with 14.1% of the worlds population speaking it, Spanish is the next with 5.85% of the worlds population speaking it, third is English with 5.52%, and fourth is Hindi at 4.46%. Another interesting note is that Bengali is the 7th most widely used language in the world with 3.05% of the population. This ties into the earlier History of when Bangladesh split from India, but India still has strong ties to that area. (source Wikipedia)
  • On a worldly scale, the top four organized religion from the largest are 1. Christianity, 2. Islam, 3. Hinduism, and 4. Buddhism (SOURE wikipedia or toptens.com)Comparing the top ethnic groups in India in relation to the world’s top ethnic groups is tricky since areas have different definitions for ethnic groups vary depending on sources. But since China is the worlds most populus nation, many argue that Han Chinese is the world’s largest ethnic group. source for charts: cia.gov
  • Ethnic clashes do erupt from time to time in India,
  • cia.gov
  • http://www.commerce.nic.in/publications/anualreport_chapter2-2010-11.htm
  •  Historical Legacy of Indias Maritime TradePrior to discovery of the Trans-Atlantic and East-West trade routes to America and the Indian-subcontinent, Indianmerchants from ancient Indian port cities like Surat, Cochin, and, Chennai have been known to be sailing on theirmerchant ships across Bay of Bengal to distant lands like Java, Sumatra in the Far East and across the Arabian Sea toPersia and East Africa actively trading in spices, silk, and other exotic commodities. Ports of Bharuch, Khambat, andDiu in The Gulf of Kutch and Gulf of Cambay have been famous as bustling centres of maritime trade andcommerce in the medieval period. The sea trade was undertaken using locally built ships, which successfully navigatedtheir way to distant lands and brought back ivory, gold, and diamonds in barter.Old Ports & Sea Routes of Medieval IndiaIndias famed riches have inspired many pioneering sea expeditions by western seafarers (including Vasco da Gamaand Marco Polo), which eventually led to discovery of America and East West trade routes. Indias golden age ofmaritime trade however, were short-lived as it came under increasing domestic political and economic instabilitycaused by internecine wars and feuds among princely kingdoms that ruled different parts of India. The weakeningof the political and economic fabric brought about erosion of traditional overseas trade and eventually led tocolonization of India. A strong merchant fleet and military control over coastline of India became Britains principalmeans to colonize India.Three hundred years of British rule, starting with establishment of East India Company in 1600 AD witnessed bothpositive and negative consequences for the Indian maritime industry sector. Importantly, the British colonialismbrought India in the ambit of global trade in the wake of industrial revolution, though the terms of trade were highlyweighed against Indias national economic interests. The industrial revolution in Europe had brought aboutrevolutionary changes in the shipping as in any other fields. The size of ships used in the overseas trade grew largerand larger and conventional wooden hull of the ship was soon replaced steel and the sail was replaced by steam anddiesel driven propulsion. These far-reaching technological developments resulted in the establishment of modernports like Mumbai, Kolkata and Chennai, which not only catered to colonial trade but also acted as the centres ofBritish colonial administration. The British merchant ships laden with cotton bales left Mumbai harbour and cameback with textiles manufactured by the Manchester Mills, which were dumped into the Indian market at cheap rates.In the post-independence period, a strong undercurrent of shipping nationalism thus, sought to give major strategicboost to the development of ports and encourage growth of a strong national merchant fleet through policies ofcargo support for Indian flagged vessels, especially to Shipping Corporation of India (SCI), cabotage protection forcoastal shipping and state canalisation of exports and imports through agencies like Indian Oil Corporation (IOC),State Trading Corporation (STC) and Minerals & Metals Trading Corporation (MMTC) etc. to achieve economicself-reliance and provide necessary economies of scale in development of basic infrastructure for Indias externaltrade. Considering, Indias import dependence on food grains, petroleum and capital goods, concomitant with thepolicy of the government to undertake core sector industry development (including shipping and shipyards) in thepublic sector, the government chose to actively intervene in the development of maritime sector and thereby try tomeet the expectations of national security and economic well-being.From the port pdf:• There are more than 2,000 ports around the world, from single berth locations handling a few hundreds tonnesa year to multi-purpose facilities handling up to 300 million tons a year.• More than 80 percent of trade with origins or destinations in developing countries, in tonnage, is through seas.• Total world port traffic in 2001 reached around 11.93 billion tonnes. After an average of 3% annual growth ratesince 1990s, port traffic contracted for the first time in 15 years in 2001. World container port traffic has however,continued to expand at a rate of 15.4 per cent over the previous year, reaching 225.3 million TEUs. The ports ofdeveloping countries handled 94.2 million TEUs, or 42 per cent of the total container traffic.• World port traffic is made of 45% of liquid bulks (mainly oil, petroleum products, and chemicals), for 23% ofdry bulks (coal, iron ore, grain, and phosphate), and for 32% of general cargo, including container cargo.• World total freight payment as a proportion of total import value is reckoned at 6.2 per cent in 2000. The freightfactor was 5.2 per cent for developed market-economy countries and 8.8 per cent for developing countries. ForIndia, the figure is around 12%, showing inefficiencies in the logistics chain
  • pdf page 52
  • http://www.indiatradepromotion.com/an-overview-of-the-trade-agreements.htmlhttp://www.asiatradehub.com/india/roads.aspIndia has a vast network of National Highways (NHs) totaling to 34,298 km connecting important towns cities, ports and industrial centres of the country.Industrilation of the country has induced a traffic growth of 8-12 percent per year on many sections of National Highways and this growth trend is expected to continue. While the traffic on National Highways has been growing at a rapid pace, it has not been possible for the Government to provide matching funds due to competing demand from other priority sectors. This has led to a large number of deficiencies in the network. Many sections of the NHs are in need of capacity augmentation by way of widening grade separation construction of bypasses bridges and expressways etc. Many bridges are in need of replacement. The traffic movement on NHs is also hindered due to a large number of Rail-Road crossings where road traffic has to per force stop due to the frequent closures. The overall scenario on the highways has led to economic losses by way of longer turn around time for the vehicle fleeting rising vehicle operating costs and dissipation of human energy in the driving. This calls for urgent remedial measures.To motivate the inflow of resources for the development, maintenance and management of NHs and to improve their efficiency, productivity and quality of service and to bring in competitiveness in providing highway services to road users. The Government of India in consonance with its general policy of liberalisation/globalisation of Country's economy welcomes private investment in National Highways and hopes that this measure would help in improvements of the existing highways and bring in the latest technology and improvements of the existing highways and bring in the latest technology and improved management techniques. The users are already accustomed to pay fee for use of bridges on National Highways for the last two decades.Other highway projects have also been awarded to private sector recently and the experience gained in the process has been utilised in framing these guidelines. 2. DEMAND SCENARIO  (A) Existing NetworkThe deficiencies in the existing National Highways network (as on 1.4.96) and estimated cost of their removal are as given below. These works are required to be completed within a period of 10-15 years.S.No.Category of WorkLength/No.Estimated Cost (1.4.96 prices)1Widening of single lane to two lanes including strengthening of pavement5200 km5200 Cr.2Widening of 2 lanes roads (4 lane or wider)14.000 km42.000 Cr.3Strengthening of pavement (2 lane equivalent) and construction of paved shoulders15.000 km9.000 Cr.4Construction of bypasses40 No.2.000 Cr.5Construction of Bridges4701.000 Cr.6Miscellaneous & Road Safety WorksL.S.5.000 Cr.  Total64,2000 Cr.(B) ExpresswaysConstruction of Expressways on new Alignments2000 km16,000 CrTotal (A) + (B) 80,200 Cr. Say :80,000 Cr.
  • http://www.bbc.co.uk/news/world-south-asia-12916888
  • http://www.thehindu.com/news/national/article2999479.ece
  • http://www.foreignpolicy.com/articles/2011/12/02/rise_of_the_timbis
  • https://www.cia.gov/library/publications/the-world-factbook/geos/in.htmlhttp://www.spiroedu.com/linkview.php?process=Education%20systems
  • http://blog.euromonitor.com/2012/08/india-lagging-far-behind-china-in-female-literacy-and-employment-rates.html
  • http://www.gallup.com/poll/154109/Nearly-One-Third-Indians-Suffering.aspSuffering levels among the most educated and the least educated Indians suggest the gaps between the haves and have-nots may actually be widening.Educational opportunities are not universal in India especially hard-hit are children living in rural areas.School attendance is decreasing in rural India.Roughly twice as many agricultural workers (38%) as white-collar workers (17%) rate their lives poorly enough to be considered suffering.x
  • http://www.statista.com/statistics/14564/growth-of-indias-gross-domestic-product/
  • https://www.cia.gov/library/publications/the-world-factbook/geos/in.html
  • http://www.minddump.org/?tag=didyouknow#
  • http://ianshul.com/2010/07/8-reasons-why-epic-may-actually-have.html
  • http://www.ey.com/GL/en/Newsroom/News-releases/Media---Press-Release---FDI-in-India-up-25--in-2011http://www.tiptoptens.com/2011/09/06/top-10-reasons-of-indias-economic-growth-in-recent-years/
  • http://online.wsj.com/article/SB10001424052970204630904577058131832465876.html
  • https://www.cia.gov/library/publications/the-world-factbook/fields/2050.html#in
  • http://www.washingtonpost.com/world/a-solar-boom-in-india/2012/05/10/gIQAASUyFU_graphic.html
  • http://www.hpcwire.com/hpcwire/2012-01-04/india_aims_to_double_r_d_spending_for_science.htmlhttp://www.financialexpress.com/news/making-india-a-preferred-r-amp-d-hub/922866/
  • http://www.managingip.com/Article/1321252/India-strengthens-software-protection.html
  • http://www.managingip.com/Article/1321252/India-strengthens-software-protection.html
  • http://www.businessweek.com/magazine/content/11_04/b4212013616117.htmSuch laws have long deterred foreign investors, hampered manufacturing, and prevented the nation of more than 1 billion people from experiencing an industrial takeoff similar to China's. In a speech to trade unions on Nov. 23, Prime Minister Manmohan Singh wondered if these laws had hampered India's growth. "Is it possible that our best intentions for labor are not actually met by laws that sound progressive on paper but end up hurting the very workers they are meant to protect?" he asked. 
  • http://www.businessweek.com/magazine/content/11_04/b4212013616117.htmIndia's labor laws have their roots in the British raj and were last fully updated in the Industrial Disputes Act of 1948. India's IT companies, such as Tata Consultancy Services and Infosys, employ as many as 2.7 million. 
  • http://www.bbc.co.uk/news/business-15346605
  • http://yin-yang-india.com/tag/income-tax-statistics-india-versus-usa/
  • http://www.worldlistmania.com/largest-banks-top-banks-india/
  • http://www.economywatch.com/india-it-industry/size.htmlhttp://www.nasscom.in/indian-itbpo-industry
  • http://ict4dblog.wordpress.com/2010/01/05/indian-it-sector-statistics-1980-2009-time-series-data/- The phenomenal growth rate of India’s software exports, with (ten-year rolling) average annual growth never dropping below 30%, and overall exports exceeding US$36bn in 2008/09:
  • http://ict4dblog.wordpress.com/2010/01/05/indian-it-sector-statistics-1980-2009-time-series-data/- The much higher growth rate of Indian IT exports compared to production for the domestic market.  As a result, the share of exports in total IT output has risen from 19% in 1991/92 to 69% in 2008/09:
  • http://www.dnb.co.in/CTOBlackBook2009/Industry%20Overview.aspExports are the principal sales channel for the Indian IT-BPO industry. The Indian IT-BPO exports sector is predicted to record a revenue growth of 5.4% at USD 50.1 billion in FY10 over FY09In the export market, the IT services segment is estimated to have contributed the highest share of 54.5% in revenue in FY10, followed by the ITeS-BPO segment with a 24.8% share and the rest by software products & engineering services and hardware segment. BPO has evolved as the fastest-growing segment growing at CAGR of 19.2% during FY07 to FY10 driven by implementation of innovative delivery models, increasing service lines and tapping new verticals.
  • http://www.nasscom.in/indian-itbpo-industry
  • http://www.nasscom.in/indian-itbpo-industry
  • http://www.rediff.com/business/slide-show/slide-show-1-top-20-it-companies-in-india/20110803.htm
  • http://ezinearticles.com/?What-is-the-Secret-of-Indias-Current-Economic-Success?&id=4864490
  • http://economictimes.indiatimes.com/opinion/comments-analysis/retail-fdi-will-transform-agriculture-by-integrating-indian-farmers-in-the-global-supply-chain/articleshow/16538483.cmshttp://business.mapsofindia.com/india-retail-industry/http://online.wsj.com/article/SB10000872396390443768804578036271356433486.html
  • http://articles.timesofindia.indiatimes.com/2012-07-05/telecom/32550630_1_base-touches-subscriber-base-wireline-segmenthttp://www.businessreviewindia.in/technology/software/-telecom-industry--indias-success-story
  • http://window2india.com/cms/admin/article.jsp?aid=5179http://rise.mahindra.com/india-and-the-future-of-outsourcing/http://www.oifc.in/Sectors/Infrastructure/Powerhttp://www.investindia.gov.in/?q=power-sector
  • http://education.usibc.com/about/
  • http://www.worldwide-tax.com/india/indpractice.asp
  • http://www.worldwide-tax.com/india/indpractice.asphttp://www.international-business-center.com/international_newsletter/volume2_issue1.htm#Tipshttp://www.transparency.org/
  • http://www.worldwide-tax.com/india/indpractice.asphttp://www.international-business-center.com/international_newsletter/volume2_issue1.htm#Tipshttp://www.transparency.org/
  • http://www.worldwide-tax.com/india/indpractice.asp
  • India Presentation - Business Environment

    1. 1. India Team Country Presentation Team Topaz
    2. 2. Outline 1 Introduction 2 Analysis of Business Environment 3 Future Business Potential 4 Tips for U.S. Citizens
    3. 3. Introduction
    4. 4. The Ten Largest Economies in 2050 India will likely be the 3rd largest economy in the world in 2050, measured in GDP nominal (millions of USD), according to Goldman Sachs.
    5. 5. Reasons for India‟s Economic Growth• Global Trade – India opened its doors to the global trading floor in 1991, and it lead to the increase in the international trade sector. Among the top trading partners of the country includes the United States, the European Union and the UAE.• Increase in Outsourcing Services – the sector has helped employed around 3 million jobs in both direct and indirect opportunities• Farming and Agriculture - India is considered as the second largest in the global market when it comes to the farm output.• Foreign Direct Investment - When it comes to PPP or the purchasing power parity, it is the fourth largest economy. Thus, it has made the country to be a favorite foreign direct investment destination for industries like telecommunications, auto components, pharmaceuticals and information technology companies. With the reduction of licensing requirements and the restrictions on the expansion, more FDI companies are moving towards the country.
    6. 6. Reasons for India‟s Economic Growth(cont.)• Industrial and Textile Industries - Factory manufacturing industries of India is considered as the 14th top producer in the world, and this sector accounts for around 17 percent of the entire employment sectors of the country. The textile industry, itself, employs around 20 million people.• Investment Boost - Investments have been trigged by the domestic consumption issues, and this has led people to give focus on the real property investments, which is noted to have an average increase of 17 percent per year for the last five years.• Mining - A vital element to the overall economy, the sector is essential producing around 79 different minerals that are exported all over the world.• Banks and Financial Institutions - In 1969, 14 banks were nationalized by Indira Gandhi, and this led to the requirement that 40 percent of the total net credit of the banks must be used for other industries and other sectors. Overall, this helped the country overcome certain budget issues for every sector.
    7. 7. Brief History of India• From the 3rd millennia to the 16th century, various tribes, empires, and dynasties helped form the Indian culture• In the 16th century, European explorers began establishing footholds in India.• By the 19th century, Great Britain was the prominent political power in the region.• The British Indian Army played vital roles in both World Wars.• By 1947, Mohandas Gandhi and Jawaharlal Nehru lead a successful nonviolence resistance movement that brought India its independence in 1947.• On India’s Independence Day, August 15, 1947, the country was split into India and Pakistan. The partition displaced 1.27 million people and resulted in the death of several hundred thousand to a million people.• By 1998, India conducted successful nuclear weapons testing.• By 2005, India had the fourth largest economy in the world on the basis of Purchasing Power Parity.
    8. 8. Map of States in India
    9. 9. Population Density Map
    10. 10. Iconic Images of India National Icon – BengalNational Flag Tiger
    11. 11. India by the Numbers Linear miles GDP GDP – Area of of (Purchasing Per Land Labor Force Coastline. Power Capita Sq. km (km) Parity) (PPP) India 3,287,263 7,000 487,600,000 4.5 trillion $3,700 World 136,437,679 356,000 3,492,503,026 95.8 trillion $16,154*World Ranking --- 7th 2nd 4th 164 Percentage 5.7% 2.0% 14.0% 4.7% ---• Although India is ranked 4 largest in the world regarding GDP, the top three entities (European Union, United States, and China) comprise over 44% of the World’s GDP*Note this is an average across the data
    12. 12. Most Populated Cities in India
    13. 13. India Government• Structure: Republic of India – 27 states – 7 territories• Legal System – Common law based on the English legal system – Separate personal codes apply to individuals depending on religious orientation
    14. 14. Environmental Issues Over Air population Pollution Deforestation Water and Pollution Overgrazing
    15. 15. Society - LanguageTop Four Native Languages Hindi (41.0%) Bengali (8.1%) 41% Telugu (7.2%) Marathi (7.0%) 8.1% 7.0% 7.2% Percent of India‟s Population which speaks the language
    16. 16. Society- Religion and Ethnicity Religion Ethnic GroupsThe above data is representative of the top religions or ethnic groups in India
    17. 17. Society – EthnicDispersion Map
    18. 18. Economy• Open-market economy with ties to its past autarkic policies.• In the early 1990’s, legislation such as industrial deregulation, privatization of state-owned enterprises, and reduced control of foreign trade and investment accelerated the economy’s growth.• Labor force – One-half is in agriculture – One-third is in services, but is a major source of growth
    19. 19. Top Commodity Exports and Imports
    20. 20. Ports of Entry
    21. 21. Regulation of India Ports • Laws: – Indian Ports Act of 1908 • This aided in delineating the responsibility of operational and procedural aspects of governing the ports for the central and state governments • In essence, this granted the central government the majority of power when it comes to ports. – Major Ports Trusts Act of 1963 • Articulated the conceptual framework of comprehensive institutional design for port administration in respect of designated major ports. This lead to the unprecedented decentralization and rationalization of port administration.
    22. 22. Trading Alliances• Trade agreements can be formed between two states or multiple states within the country.• “India views Regional Trading Arrangements (RTAs) as constructive blocks towards the overall purpose of trade liberalization. Consequently, it is participating in a number of RTAs.• South Asia Free Trade Area – Came into force in January 2006 – Members include: Bangladesh, Bhutan, India, Maldives, Nepal, and Sri Lanka – Objective: Endorse and augment mutual trade and economic cooperation among the „Contracting States‟• India-Mercosur Preferential Trade Agreement (PTA) – Came into force on June 2003 – Members: India and MERCOSURE – Objective: Enlarge and reinforce relations between MEROCSUR and India and endorse the extension of trade by granting reciprocal fixed tariff preferences with the ultimate objective of creating a free trade area between the parties. – MERCOSURE is a trading block in Latin America formed in 1991 which consists of Brazil, Argentina, Uruguay, and Paraguay.• Asia-Pacific Trade Agreement (APTA) aka the Bangkok Agreement – Signed: July 1975 – Proposal of the United Nations Economic and Social Commission for Asia and the Pacific• BIMSTEC (Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation – Its membership involves India, Bangladesh, Bhutan, Nepal, Sri Lanka, Thailand, and Myanmar. – This is the “bridging link” between to major regional groupings. – Objective: Sub regional economic collaboration consortium•
    23. 23. Politics• Two major political parties – Indian National Congress – Bharatiya Janata Party (BJP)• In the past decade, more smaller regional based political parties have sprouted.• These parties are more aligned with the state, thus the relationship between each state and the central government can be volatile at times.• The different religious and ethnic groups have their own political parties at times and this leads to a one sided agenda. – For instance, the Bharatiya Janata Party has an image of being pro Hindu• Terrorism, Naxalism, religious violence, and caste-related violence are important issues affecting politics in India. – The Washington Times in 2004 reported that nearly ¼ of the Indian Parliament legislatures had ongoing criminal cases against them.
    24. 24. Hofstede Dimensions Power Individualism Masculinity Uncertainty Long-Term Distance Avoidance OrientationU.S. 40 91 63 46 29India 77 48 56 40 61Delta -37 43 7 6 -32 • Power Distance: Extent to which the less powerful member of organization and institutions accept and expect that power is distributed unequally. • Individualism: Refers to the extent individuals are more likely to adhere to individual needs whereas the opposite, collectivism, is where people tend to stick together from birth on, often in extended families. – Individualism: “The American Dream” • Masculinity: Refers to the degree the roles between genders are distributed. The high masculine score reflects more assertive people, but a low score reflects a more caring individual. • Uncertainty Avoidance: Refers to the degree with which the country is willing to incur uncomfortable or unstructured opinions. • Long-Term Orientation: Emphasizes perseverance and saving for future betterment
    25. 25. Analysis of Business Environment
    26. 26. Population• India has the second largest population in the world behind China• In July 2012, the population was estimated at 1,205,073,612• Indians now make up 17% of the worlds population. Uttar Pradesh remains its most populous state, with 199 million people.• More people now live in India than in the United States, Indonesia, Brazil, Pakis tan and Bangladesh combined.• India is on course to overtake China as the worlds most populous nation by 2030
    27. 27. Age Distribution• India will be one of the youngest nations by 2020• The proportion of the working age population (15-59 years) is likely to rise from around 58% in 2001 to over 64% by 2021, according to the Economic Survey. – The comparative figures for China and the U.S. are 37 years, while it is 45 for West Europe and 48 Japan.• There will be around 63.5 million new entrants to the working age group between 2011 and 2016.• These changes are likely to contribute to a substantially increased labor force. – However, it will benefit India only if the population is “healthy, educated, and appropriately skilled.
    28. 28. Growth in the Labor Force(population aged 15-59)
    29. 29. Education in India• Education expenditures: – 3.1% of GDP (2006)• Literacy: – Definition: age 15 and over can read and write – Total population: 61% – Male: 73.4% – Female: 47.8% (2001 census)• School life expectancy (primary to tertiary education): – Total: 10 years – Male: 11 years – Female: 10 years (2007)
    30. 30. Female Literacy in India
    31. 31. Standard of Living • In 2012, more than 3 in 10 Indians rate their lives poorly enough to be considered "suffering," up from 24% last year.
    32. 32. Income Levels• Fourth largest economy in the world due to a strong economic growth but still has a low per capita income• Still the poorest among the G-20• In 2011, GDP per capita (PPP) was $3,700• In 2010, the population below poverty level was 29.8%• GDP per capita rises steadily year after year
    33. 33. Growth of GDP
    34. 34. Annual Real GDP Growth Rate Annual Real GDP Growth Rate12.00% 10.62% 9.99%10.00% 9.53% 9.03%8.00% 7.59% 7.24% 6.85% 6.86% 6.58% 6.19%6.00% 4.56%4.00%2.00%0.00% 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
    35. 35. Shares of Global GDP
    36. 36. Internet & Communication Infrastructure• In 2011, there were 894 million mobile cell phones in use; ranks 2nd in world in regards to number of cell phone users• In 2009, there were 61,338,000 internet users; India ranks 6th in world in regards to number of internet users• In 2011, more than 100 million homes had access to cable and satellite TV offering more than 700 TV channels• In 2011, there were 32.6 million telephone main lines in use
    37. 37. Mobile Phone Subscriptions
    38. 38. Internet Users as Percentage ofPopulation
    39. 39. Foreign Direct Investment in India• India is a favorite foreign direct investment destination for industries like telecommunications, auto components, pharmaceuticals and information technology companies.• The overall number of FDI projects increased by 25% to 864 (valued at US$ 50,813 million) in the 11 months to November, up from 691 projects (valued at US$ 44,874 million) in 2010• The United States remains the leading investor in India, both in terms of projects and jobs generated.
    40. 40. Foreign Direct Investment Rules• The cabinet of the Congress party- led coalition in New Delhi agreed to allow foreign multi-brand retailers to own up to 51% of joint ventures in India – Foreign retailers can now open supermarkets with Indian partners. (Wal-Mart-Bharti wholesale store shown to right)• Government changed the rules to allow single-brand retailers such as Nike Inc. to own 100% of their Indian businesses. Before, they were permitted to own only 51% of a partnership with an Indian company.• Currently, retailing is dominated by millions of mom-and-pop stores, and it lacks much modern supply-chain management, including storage of temperature-sensitive products.
    41. 41. Top Export and Import Partners of India
    42. 42. India‟s Trade Balance
    43. 43. Clean Energy Investments• Clean energy investments have risen faster than any other country, growing 52 percent to a total $10.3 billion in 2011• Advanced its solar capacity from 18 megawatts in 2010 to 277 megawatts in 2011 In 2011, there was $4.2 billion in funding for grid-connected solar power plants, a sevenfold increase from 2010 levels
    44. 44. Research and Development Spending • Over 5 years, the Prime Minister hopes to double the R&D budget for science and technology from 1 percent of the GDP to at least 2 percent. • India, China and Brazil are ahead of the US in terms of the rate of growth in R&D indicators • A 2 percent of GDP figure for R&D would put India ahead of Chinas at 1.4 percent investment, but behind the US at 2.7 percent and Japan at 3.3 percent. • Part of that funding increase would go toward increase supercomputing capacity and capability, which would be implemented by the Indian Institute of Science
    45. 45. Issues Regarding IntellectualProperty Protections • Pirates consider the business of software piracy a much safer and easier way to earn illegal money than through other means • In 2007, India experienced PC sales growth at 32%, while the nation’s piracy level is hovering at a dismal 72% percent • Present levels of software piracy contradict the leading position India enjoys in IT and Software
    46. 46. Intellectual Property Enforcement • Indian Copyright Act of 1957, in its present form, is regarded as one of the toughest and strictest in the world – Empowers the police to take action without a warrant against pirates/infringers – Punishment for copyright infringement is imprisonment for up to three years and a fine of up to 200,000 Rupees ($4,500)
    47. 47. Intellectual Property Enforcement(cont.) • Delhi High Court passed the first judgment on damages in 2005 – The Microsoft Corporation v Kamal Wahl (Suit 817, 2004) was the highest award of damages ever granted in an intellectual property matter by an Indian Court – The court granted damages of 2.3 million Rupees ($52,800) in favor of the plaintiffs • A much needed amendment in the Copyright Law is the inclusion of statutory damages – Various countries, such as the US and Australia, have incorporated statutory damages into their copyright laws and have effectively controlled software piracy in their jurisdictions
    48. 48. Labor Laws - Issues • As soon as a company hires more than 100 employees, it is impossible to fire anyone without government permission. – Legislators are fighting to push a law through Parliament to let a company expand its workforce without surrendering the power to lay off workers to bureaucrats. The bill faces fierce opposition from labor unions. • Companies must keep 6 attendance logs and 10 separate accounts for overtime wages, and file 5 types of annual returns. • There are at least 11 definitions of "Is it possible that our best the word "wage.“ intentions for labor are not actually • Other rules regulate the height ofmet by laws that sound progressive commodes in workerson paper but end up hurting the very washrooms, how often a buildingworkers they are meant to protect?“ must be lime-washed, and how- Prime Minister Manmohan Singh, Nov 2011 many sand-filled buckets must be on hand to put out fires.
    49. 49. Labor Laws - Waivers • Some labor laws were waived starting in 2001 to encourage growth in the sector, Indias second-largest earner of foreign exchange, by placing most of the workforce inside fenced-off zones. • The waivers allowed IT companies and call centers to operate 24 hours a day, recruit women to work late at night without building single-gender facilities, and add staff freely without submitting layoff decisions to the authorities.Indias IT companies, such as Tata Consultancy Services and Infosys, employ as many as 2.7 million.
    50. 50. Trade Unions in India • The Trade Unions Act, passed in 1926, allows workers to register unions with the Labor Department. These then have to be recognized by the company they work for. • Most trade unions in India are aligned to parliamentary parties and of these, leftist parties have traditionally been at the forefront of voicing workers demands. • Workers allege that privatization has encouraged collusion between labor departments and company managements, making the process of registration of unions difficult • Strikes demanding the right to form workers unions have hit the automobile sector in northern India at frequent intervals.
    51. 51. Tax Revenue in India • Under 3% of Indian citizens pay income taxes – The remainder of the income tax revenue for the government is derived from corporations. • Tax Rates – Annual Income of $4000 or below – no tax – Annual Income ranging from $4001 to $10,000- 10% – Annual Income from $10,001 to $20,000- 20% – Annual Income over $20,000 – 30% • There are various levels of tax exemptions for individuals. For example, any income from agriculture (around 45% of employment in India) is exempt from income taxes.
    52. 52. Largest Banks in IndiaRank Bank Total Assets Number of Branches1 State Bank of India (SBI) 369.56 billion US dollars 13,0002 ICICI Bank 119.69 billion US dollars 2,5003 Punjab National Bank 82.23 billion dollars 5,0004 Bank of Baroda 78.28 billion US dollars 3,4005 Canara Bank 72.3 billion US dollars 3,1006 Bank of India 70 billion US dollars 3,4007 HDFC Bank 65.48 billion US dollars 1,9868 Standard Chartered Bank9 IDBI Bank 55.69 billion US dollars 92310 Axis Bank $53.36 billion 1,281
    53. 53. Size of IT-BPO Industry• The size of the Information Technology & Business Process Outsourcing industry in India experienced exponential growth: – 150 million US Dollars in 1990-1991 – 5.7 billion in 1999-2000 – 50 billion US Dollars in 2007 – 100 billion in 2012-2013.
    54. 54. Indian Software Exports
    55. 55. Key Highlights of IT-BPO in 2012• Aggregate revenues cross the USD 100 billion mark, exports at USD 69 billion• Within the global sourcing industry, India was able to increase its market share from 51% in 2009, to 58% in 2011• Software and services revenues (excluding Hardware), comprising nearly 87% of the total industry revenues, expected to post USD 87.6 billion in FY2012; estimated growth of about 14.9% over FY2011• Within Software and services exports, IT services accounts for 58%, BPO is nearly 23% and R&D and Software Products account for 19%
    56. 56. Key Highlights of IT-BPO in 2012 (Cont.)• Expected to add 230,000 jobs in FY2012, thus providing direct employment to about 2.8 million, and indirectly employing 8.9 million people• As a proportion of national GDP, the sector revenues have grown from 1.2% in FY1998 to an estimated 7.5% in FY2012• The industry’s share of total Indian exports (merchandise plus services) increased from less than 4% in FY1998 to about 25% in FY2012• Embracing emerging technologies, increased customer- centricity, deepening focus on new markets, adopting new business models are some successful growth strategies followed by the industry
    57. 57. Top IT-BPO Companies in India 2011 Number ofRank Company 2011 Revenue Revenue Employees Growth Tata Consultancy 1 Rs 33,112 crore 25% Over 198,500 Services Infosys 2 Rs 25,997 crore 22% 133,560 Technologies 3 Wipro Rs 24,899 crore 13% 122,385 Hewlett-Packard 4 Rs 23,227 crore 30% India Cognizant 5 Technology Rs 21,393 crore 37% Solutions 6 IBM India Rs 14,132 crore 14% 7 HCL Technologies Rs 14,111 crore 28% 8 HCL Infosystems Rs 12,137 crore 2% 9 Ingram Micro India Rs 9,766 crore 35% 10 Redington India Rs 9,274 crore 32%
    58. 58. Future Business Opportunities and Threats
    59. 59. Business Opportunities• Manufacturing – Untapped demand for low cost products that are affordable to millions of people – Frugal Innovation: Take an established product like a laptop which to millions of Indians would be unaffordable. Look at that laptop, work out what people could afford, and design a bare bones laptop that functions like the original product, but costs a fraction of the price. • This business concept is at the heart of Indias emerging economy, and has proved to be successful- from the Tata Nana car to the TVS scooter.
    60. 60. Business Opportunities (cont.)- Retail - Allow 51% FDI in multi-brand retail - Consumer Spending up by 75% - Retail industry expected to reach US$ 1.3 trillion by the year 2018 - Will improve retail supply chain and benefit farmers and consumers- Insurance - Allow foreign ownership of local insurance companies and pension-fund managers up to 49% - Huge opportunity as only 4.7% of the countrys more than 1.2 billion people currently have insurance of any kind - “Insurance sectors need for capital can be met only through increasing FDI” – Minister of Finance
    61. 61. Business Opportunities (cont.)- Telecom - One of the largest telecom markets in the world - The limit in broadcast services is to increase 74% across the board - World’s 2nd largest mobile phone industry with nearly 1 billion subscribers - Supportive government policies, emerging new technologies and changing consumer behavior fuel the growth - This is a lucrative market. A large number of multinational telecommunication leaders are already pouring into the nation
    62. 62. Business Opportunities (cont.)- Energy - Unprecedented need for clean energy production, unable to meet the burgeoning demands of the growing population and businesses - Severe shortage of electricity in several states - FDI of up to 100% is permitted under automatic route for projects of electricity generation, transmission, distri bution and power trading - Growing potential of solar power generation
    63. 63. Business Threats- Lack of adequate infrastructure facilities- High cost of real estate- Unstable political conditions- Shortage of trained manpower- Widespread corruption, slow processing in government offices- Opposition to FDI from some political parties and local groups
    64. 64. Tips for U.S. Citizens
    65. 65. Gender Issues • Shaking hands with women is a very sensitive point in Indian culture. The important rule is that shaking a woman by the hand is at the womans initiative. Only when an Indian woman offers her hand, is it acceptable to shake it. In the absence of a handshake, the custom all over India is the greeting of peace known as "Namaste". When making this greeting, hold the palms of both hands together under the chin, smile, bow slightly and say "Namaste.” • In Indian culture, it is considered improper for a man and woman to embrace and kiss in public.
    66. 66. Business Etiquette • Do not arrange business meetings for national holidays. • It is important to remember that apart from the national holidays there are many festivals that are specific to certain regions of India. • Like many high context cultures, Indians are family oriented. They take time to know you before they delve into business. The exchange of personal information may be more important than the legality of the contract. • Like most Asian countries, India sees itself as different from the rest of the region; not monolithic. Indians will, almost always, protect each other, their cultural values, and their philosophies. It is important for an American not to impose his or her values on them. Always follow their lead.
    67. 67. Business Etiquette (cont.) • Stay out of political and historical controversial discussions as much as possible. Be aware of political tensions between India and Pakistan over Kashmir for example. • Respect for religious beliefs in India is paramount. Hindu is predominant while Islam is distant second. Being aware of some basic predominant religious beliefs is essential to understanding any people. Hindus in India hold a cow in sacred esteem, Muslims dont eat swine, and Muslims observe certain holidays and pray so many times a day facing a certain direction. In some cases, Shariah Law is practiced, whose tenets are vastly at variance with Judeo- Christian values practiced in the west.
    68. 68. Presenting and Receiving Gifts • When presenting gifts, take care that the gift-wrapping is neither black nor white as these are believed to bring bad luck. On the other hand, the colors that are thought to bring good luck are red, green and yellow. • It is not customary in India to open a gift in the presence of its donor. If you receive a gift from your Indian colleague, open it only after your colleague has left the room. • Acceptable gifts are flowers, chocolate, perfume and small electronic goods. • You should refrain from giving gifts that have a picture of a dog (dogs are considered unclean animals). • It is important to know that many Indians do not drink alcohol or eat beef.

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