Indian Economy & Globalisation

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Indian Economy & Globalisation

  1. 1. INDIAN ECONOMY AND GLOBALISATION<br />IRVING FISHER GROUP<br />
  2. 2. The term globalization means International Integration.<br />It is a process through which the diverse world is unified into a single society.<br />Opening up of world trade, development of advanced means of communication, internationalisation of financial markets, growing importance of MNC&apos;s, population migrations and more generally increased mobility of persons, goods, capital, data and ideas<br /> WHAT IS GLOBALISATION ?<br />
  3. 3. GLOBALISATION<br />
  4. 4. Issues<br />Accountability of Global businesses?<br />Increased gap between rich and poor fuels potential terrorist reaction<br />Ethical responsibility of business?<br />Efforts to remove trade barriers.<br />
  5. 5. Shape of the world’s economy is being changed by “globalization”<br /><ul><li> Marketing
  6. 6. Branding
  7. 7. Advertising</li></ul>Nike<br />Dell <br /><ul><li> Cost down
  8. 8. Outsourcing</li></li></ul><li><ul><li>New trade pattern:developing countries </li></ul>don&apos;t just have to trade their raw materials to the West and get finished products in return; <br />can become big-time producers as well. <br /><ul><li>New production pattern:global product network</li></ul>companies can locate different parts of their production, research and marketing in different countries<br />Globalization – what’s really new? New Trade and Production Patterns<br />
  9. 9. <ul><li>Growing global markets in services</li></ul>people can now offer and trade services globally -- from medical advice to software writing to data processing -- that could never really be traded before.<br />Globalization – what’s really new? New markets<br />W-2, W-4, 1099 bonuses & stock statements<br />Indian accountant<br />US tax payers<br />
  10. 10. <ul><li>Market economic policies spreading around the world, with greater privatization and liberalization than in earlier decades.</li></ul> ex: BRIC<br /><ul><li>Widespread adoption of democracy as the choice of political regime.</li></ul>Globalization – what’s really new? New rules and norms<br />
  11. 11. <ul><li>Multilateral agreements in trade, taking on such new agendas as environmental and social conditions.
  12. 12. New multilateral agreements – for services, intellectual property , communications – more binding on national governments than any previous agreements.</li></ul>Globalization – what’s really new? New rules and norms<br />
  13. 13. Growth<br />Customer Survey<br />
  14. 14. *<br />2010<br /><ul><li>GDP – USD 1.36 trillion
  15. 15. GDP growth rate – 9%
  16. 16. Services contribution – 60-65%
  17. 17. Balance of Trade – Negative balance should increase with surging imports versus exports
  18. 18. Investment goal – USD 370 billion</li></ul>*<br />2008<br /><ul><li>GDP – USD 1.16 trillion
  19. 19. GDP growth rate – 9.5%
  20. 20. Services contribution – 60%
  21. 21. Balance of Trade – Negative balance should increase with surging imports versus exports
  22. 22. Investment goal – USD 305 billion</li></ul>2006<br /><ul><li>GDP – USD 590 billion
  23. 23. GDP growth rate – 9%
  24. 24. Services contribution – 54%
  25. 25. Balance of Trade – USD (-)46.2 billion
  26. 26. Investment goal – USD 250 billion</li></ul>Growing Indian Economy<br />*: ProjectedSource: Economic Times & India Brand Equity Foundation (IBEF)<br />
  27. 27. Growing GDP<br />Contribution of Services - <br />increased from 48% to 62% and is estimated to contribute 60% by 2010<br />*: ProjectedSource: India Brand Equity Foundation (IBEF)<br />
  28. 28. Growing Exports<br />*: Projected<br />Source: Ministry of Commerce & IBEF<br />
  29. 29. Source: Ministry of Commerce & IBEF<br />Growing Imports<br />
  30. 30. Increasing Forex Reserves<br />Steadily increasing Forex reserves offer adequate security against any possible currency crisis or monetary instability<br />Source: Reserve Bank of India & India Brand Equity Foundation (IBEF)<br />
  31. 31. Growing FDI Inflows<br />India is ranked second in AT Kearney’s FDI confidence index (2007)<br />Electronic equipment, manufacturing and telecom have witnessed significant FDI inflow<br />* Provisional<br /> Source: Department of Commerce<br />
  32. 32. Increasing Per Capita Income<br />Source: India Brand Equity Foundation (IBEF) & Economic Survey 2007-08<br />
  33. 33. Major M&A and Investments Announcements in India<br />POSCO to invest in building steel manufacturing plants and facilities in India by 2016<br />USD 12 billion <br />Plans to establish three manufacturing plants to produce photo-voltaic units<br />USD 2 billion <br />Plans to spend on its development operations in India over the next four years<br />USD 1.7 billion<br />Source: India Brand Equity Foundation (IBEF)<br />
  34. 34. India Inc. Investing Overseas<br />Main sectors: <br />Main Destinations: China, UAE, UKNorth America is emerging as a destination.<br />
  35. 35. Additional economic indicators:<br /><ul><li>India has a consumerbase of 1.14 billion people
  36. 36. India is the 4th largest economy in the world when measured by PPP
  37. 37. India’s has a growing middle class of over 300 million people - 30% of India’s population – and larger than the population of the US
  38. 38. India is the 3rd largest global telecom market. The mobile subscriber base has grown from 0.3 Million in 1996 to over 250 million currently.
  39. 39. India is likely to add over 200 shopping malls by 2010 and 715 malls by 2015
  40. 40. The number of billionaires in the country were 3 in 1999; 23 in 2006; and are 48 currently.</li></li></ul><li>Exports to US<br />India’s Trade with USA<br />USD Billion<br />Imports from US<br />Source: Department of Commerce, Govt of India<br />
  41. 41. Major Items Exported to USA (2006)<br />Source: US Department of Commerce<br />
  42. 42. Major Items Imported from USA (2006)<br />Source: US Department of Commerce<br />
  43. 43. India co. going Global <br />&quot;Toyota Motor has chosen to source from India due to its competitive cost of manufacture, availability of abundant engineering talent, and strong indigenous machine tool.&quot;<br />
  44. 44. Automotive Sector - Overview<br /><ul><li>India is the world’s:
  45. 45. 2nd largest two-wheeler market,
  46. 46. 4th largest commercial vehicle market
  47. 47. 11th largest passenger car market.
  48. 48. Expected to be the 7th largest automobile market by 2016
  49. 49. India has become an attractive destination for global American,European,Japanese andKorean OEMs.</li></ul>Source: IBEF, Economic Times<br />
  50. 50. <ul><li>1990 FDI $ 234 Million
  51. 51. 1998-2003 FDI $ 2.5 Billion Per Year
  52. 52. Target FDI $ 10 Billion Per Year
  53. 53. Over 620 FIIs Compared to 500 in 2003 and Earlier
  54. 54. China FDI & FII</li></ul> FDI $ 50 Billion Per Year<br /> FII $ 20 Billion Per Year<br />GOI POLICY-FDI AND FII<br />
  55. 55. Agriculture<br /><ul><li>Agriculture acquired 17% of India’s GDP in 2008.
  56. 56. 60% of population still depends on agriculture for their livelihood.
  57. 57. Occupied 43% of India’s geographical areas.
  58. 58. All other sectors are growing at much faster.</li></li></ul><li>SHARE IN GDP<br />
  59. 59. Education<br />Current Literacy rate is 64.84%<br />
  60. 60. What are people talking about India?<br />&quot;India has a fantastic pool of software professionals. The world needs to benefit from this.“ <br />This market (India) is critical to our plans for building a Ford Motor Co. for the 21st century<br /> Bill Gates, Microsoft Chairman<br />Bill Ford, Chairman and CEO<br />India on its way to becoming IT, manufacturing kingdom of the world<br />The dynamism shown by India in the last 15 years is phenomenal<br />Mr Yasukuni Enoki, Japanese Ambassador to India <br />Paul Wolfowitz, President, World Bank <br />
  61. 61. <ul><li>High growth but problem of unemployment.
  62. 62. Need to generate 10 million jobs per year.
  63. 63. Multi party rule, hence need to accommodate political ideology with economic reality (reservation, labour law reforms).</li></ul>India’s Problems<br />
  64. 64. Conclusion<br />Companies in India That Have Successfully Met Competition by Multinationals & Domestic Companies Had A Spirit Of Innovation Not Only In Their Products And Services But Also With Reference To All Their Resources And Effectively Restructured Them In A Time And Cost Frame And Met Customer Needs And Improved Their Top And Bottom Line.<br />
  65. 65. Thank You<br />

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