Gems and jewellery


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Gems and jewellery

  1. 1. Phases Of Manufacturing• Gone through various phases of development.• 1947 - Initial phase of building the industrial foundation .• 1950’s and early 1960’s -To the license–permit Raj.• 1965–1980, to a phase of liberalization of 1990’s.• 1990- emerging into the current phase of global competitiveness.11/30/2011 Source CII website 1
  2. 2. Facts Of Manufacturing• Contributes about 15% of India’s GDP• 50% to the country’s exports.• Employed 58 million people (about 12% of the workforce) in 2008.• By 2012, This sector will employ a further 12– 13 million out of nearly 89 million additional people who will enter the workforce.11/30/2011 Source CII website 2
  3. 3. Gems and Jewellery• One of the fastest growing segments in the Indian economy.• Annual growth rate of approximately 16 %.• Country is also the largest consumer of gold in the world.• It consumes in excess of 800 tonnes of gold that accounts for 21 % of world gold consumption, of which nearly 620 tonnes go into making jewellery .11/30/2011 Source CII website 3
  4. 4. Continued• India is also emerging as the worlds largest trading centre for gold targeting US$ 17 billion by 2011.• Industry has the best skilled manpower for designing• Producing high volumes of exquisite jewellery at low labour costs.• Largest diamond cutting and polishing centre in the world—the industry enjoys 60 per cent value share, 82 per cent carat share and 95 per cent share of the world market in terms of number of pieces.11/30/2011 Source CII website 4
  5. 5. Continued• The Indian Gems and Jewellery market continues to be dominated by the unorganized sector.• with the Indian consumer becoming more aware and quality conscious, branded jewellery is becoming very popular and the market for branded jewellery is likely to be worth US$ 2.2 billion by 2010, according to a McKinsey report.• the government allows 51 per cent FDI in single brand retail outlets, attracting both global and domestic players to this sector. The World Gold Council recently estimated the size of Indias gold coin market at about US$ 2.11 billion.11/30/2011 Source CII website 5
  6. 6. Auto components• The Indian auto component industry is one of Indias sunrise industries with tremendous growth prospects.• India is now a supplier of a range of high- value and critical automobile components to global auto makers such as General Motors, Toyota, Ford and Volkswagen amongst others.11/30/2011 Source CII website 6
  7. 7. Continued• As per an Automotive Component Manufacturers Association of India (ACMA) report, the turnover of the auto component industry was estimated at over US$ 18 billion in 2007-08, an increase of 27.2 per cent since 2002.• It is likely to touch US$ 40 billion by 2015-16. In 2006-07, the auto component sector saw sales worth around US$ 15 billion, with US$ 2.8 billion as exports.• Investments in the auto component industry were estimated at US$ 7.2 billion in 2007-08.11/30/2011 Source CII website 7
  8. 8. Aerospace• India is poised to become a large commercial and defence aircraft market.• Boeing expects a demand of between 900 to 1,000 commercial aircraft worth USD100 billion approximately in the next 20 years. ted offsets. The defence offset policy has been under implementation and a formal civil offset policy is also expected to follow shortly. The total spending in the next 5 years is expected to be between USD25 billion (assuming uniform demand) for commercial aircrafts and USD100 billion as defence expenditure. Out of the defence expenditure, approximately 15-20 percent (USD15-20 billion) is expected to be spent on military aircrafts. Assuming an offset of 30 percent for the civil sector too, the total offset opportunity for the aerospace sector is valued to be at least USD10-15 billion. As Indian manufacturing capabilities mature over the years, it is expected to capture a large share of this opportunity.The Indian aerospace industry is one of the fastest-growing aerospace markets in the world with an expanding consumer base comprising airlines, businesses and High Net Worth Individuals. All segments in the aerospace industry, including civil and military aviation and space, are showing a significant level of growth..11/30/2011 Source CII website 8
  9. 9. Automobiles• The growth of the Indian middle class along with the growth of the economy over the past few years has attracted global auto majors to the Indian market. Moreover, India provides trained manpower at competitive costs making India a favoured global manufacturing hub. The attractiveness of the Indian markets on one hand and the stagnation of the auto sector in markets such as Europe, US and Japan on the other have resulted in shifting of new capacities and flow of capital to the Indian automobile industry. According to the International Yearbook of Industrial Statistics 2008 released by United Nations Industrial Development Organisation (UNIDO), India ranks 12th in the list of the world’s top 15 automakers. Indian original equipment manufacturers (OEMs) are making their mark today with Tata and Mahindra & Mahindra as leading Indian OEMs emerging on the global scene. With increasing competition from the global players, Indian OEMs have upgraded their technology .11/30/2011 Source CII website 9
  10. 10. Capital goods• Capital Goods refer to products that are used in the production of other products but are not incorporated into the new product. These include machine tools, industrial machinery, process plant equipment, construction & mining equipment, electrical equipment, textile machinery, printing & packaging machinery etc. The Capital Goods industry is the “mother” of all manufacturing industry and is of strategic importance to the National security and economic independence. It is in the interest of the User Sectors that the Capital Goods industry should be strengthened since it is a known fact that the presence of a strong domestic industry increases competition and helps in reducing the capital cost of the project and most important, the maintenance of plant and machinery can be done economically. The imported plants come at the lowest cost but the importers make up for that in their high priced maintenance contracts & spares. The Capital Goods Sector was on an upswing since March 2002, due to investments having taken place in the infrastructure, oil & gas sector, power sector, steel plants, automobile industries etc. The capital goods industry has evolved over these years in terms of competitiveness by consolidating. Hence the number of players are few. Due to its strategic importance for the country, it is essential to encourage manufacturing of capital goods rather than import and enhance the value addition and technology transfer. The annual sales of the capital goods industry was about Rs.110,000 crores during 2008-09 though the market is more than Rs 300,000 crores with between 60 to 70 % of equipment across all categories being imported, with the drastic fall in customs duty and the inherent dis-advantages faced by domestic manufacturers thereby making them cost un-competitive and reducing them to be traders and assemblers, instead of manufacturers. Its contribution to the exchequer has been in excess of Rs.20,000 crores in terms of customs, sales tax and excise collections and which will be higher if corporate taxes are added. The capital investments made in this sector has registered a healthy CAGR of close of 10% for a period from 1995 to 2005. The industry currently employs 6 million skilled and semi-skilled workers. It needs to be highlighted that this sector generates the much needed employment for less educated persons like fitters, welders, machine operators and ITI graduates and employs all collared people.• Capital Goods Industry: Policy Intervention for Sustaining Growth• Few sectors of the capital goods sector, which have a lower gestation period & are off the shelf products has been witnessing a downturn since October 2008. The performance of the capital goods companies are expected to lower in 2009 - 2010 as compared to 2008 - 2009 as the order in flow had slowed down since the global recession. It is expected that the industry will foresee an upswing either in the last quarter of the current financial year or first quarter of next financial year as order inflows have picked up.11/30/2011 Source CII website 10
  11. 11. Chemicals• The chemical industry in India is poised for explosive growth in the coming years. India’s population has grown nearly as large as that ofChina , with its consuming middle class accounting for about a third of its population. Disposable income inIndia is rising, potentially driving growth of chemicals consumption at exponential rates.India’s GDP growth exceeded 9% for the last fiscal year, fueling double-digit growth of its chemicals industry. India’s government has set in place policies and special economic zones to promote investment in its petrochemical sector, and several key domestic companies have unveiled ambitious expansion plans for the next few years. The Indian Chemical Industry Outlook is the only chemical conference inIndia organized specifically to address a broad range of issues impacting the industry. The conference will take a look at different segments of the Indian chemical industry, and explore the growth opportunities and challenges in each segment.11/30/2011 Source CII website 11
  12. 12. Climate change• Climate change is increasingly becoming a central topic of debate and strategic decision making by Governments and businesses all over the world. The warming of the climate system is unequivocal, as is now evident from observations of increases in global average air and ocean temperature, widespread melting of snow and ice, and rising global mean sea level. It impacts all countries, but is particularly severe for developing countries like India, given their vulnerabilities, inadequate means and limited capacities to adapt to its effects. The present plan of Government of India constitutes one of the strongest responses to global climate change by any developing country. India has already achieved emission intensity reduction by 17.6% between 1990 and 2005. Going forward, given the recent successes of Indian industry in energy efficiency, renewable energy and green buildings and enhanced commitment to address climate change issues, the 20-25% emission intensity reduction goals, set out by the Indian Government, should be achievable. As India reduces emission intensity of its economy by 20-25% by 2020, numerous investment opportunities are likely to emerge in the key sectors. These include (a) Industrial energy efficiency: An investment opportunity of Rs 82575 million exist in industrial energy efficiency leading to annual saving potential of Rs 37510 million (b) Renewable energy: 20,000 MW target of solar energy capacity by 2022 and pipeline of other renewable energy projects such as biomass, wind and small hydro present huge investment opportunity in the sector in coming years (c) Green Buildings: One billion sq. ft. of green buildings is being targeted to be set- up in India by the year 2012, leading to significant investment requirement in the sector and (d) Cleaner Conventional Energy Technologies: Indian Government has set a target of having upto 50% of new thermal power generation capacity based on clean coal technologies. The investment requirement in clean conventional energy technologies is relatively higher, at present.11/30/2011 Source CII website 12
  13. 13. Defence• The opening up of the Indian economy during the early nineties heralded an era of unprecedented industrial growth in India. The growth rates seen match those of the fastest growing economies. A confident and resurgent Indian Industry is making forays into almost all the sectors of manufacturing. Lately, the huge opportunities for growth within the domestic and global defence and aerospace industries have attracted the attention of Indian industry. The current profile of equipment held by the Indian Armed Forces with regards to ‘State of the Art’, ‘Matured’ and ‘Obsolescent’ equipment is 15, 35 and 50 percent respectively. This suggests that the Government will have to make serious efforts towards upgrading its defence resources either by developing or procuring defence equipment and systems. Moreover, modernization, upgradation and maintenance of the existing equipment will also provide immense opportunities to the industry. India is one of the largest global military spenders. The defence budget for 2009-10 has increased by 34.19 percent over the previous year’s budget estimate (BE) of INR 1,056 Bn. The huge opportunity has attracted the attention of not only a few large players but also a large number of Micro, Small and Medium Sized Enterprises (MSMEs) which visualise this unprecedented opportunity as a gateway towards entering into the domain of defence production. The slowing down/saturation of markets in other sectors has also been responsible for the directing their interest towards the unexplored defence sector which promises sustained business opportunities. The private sector is enthusiastic about its ability to play a larger role in contributing to the total defence related production both within the country, as well as looking at export markets once sufficient experience has been gained in particular areas. The need of the hour is to combine the skills of Public and Private sector, developing this into a partnership with the aim of achieving self- reliance in defence production. CII believes in creating an environment where both public and private sector grow together and partner with each other, thereby contributing towards the national growth. CII has supported this endeavour and has been working with the armed forces and the Ministry of Defence towards achieving maximum indigenisation. At the policy level as well, there is a clear support for achieving the long cherished goal of self reliance in defence sector. The Government has been receptive to suggestions and has been willing to make the required policy changes whenever required. Initially promulgated in December 2002, Defence Procurement Procedure has already undergone five revisions. The recent amendments in DPP 2008 (Amendments 2009) are a welcome step. Various provisions have been laid down to ensure industry participation at various levels.11/30/2011 Source CII website 13
  14. 14. Drugs & Pharmaceuticals• The Indian pharmaceutical industry is driving product development and breaking new grounds in medicine research worldwide. The Indian domestic pharmaceutical market was estimated to be US$ 10.76 billion in 2008 and is expected to grow at a high compound annual growth rate (CAGR) of 9.9 per cent till 2010 and thereafter at a CAGR of 9.5 per cent till 2015. Currently, the Indian pharmaceutical industry is one of the worlds largest and most developed, ranking 4th in volume terms and 13th in value terms. The country accounted for 8 per cent of global production and 2 per cent of world markets in pharmaceuticals in 2008. The Indian pharmaceutical offshoring industry is slated to become a US$ 2.5 billion opportunity by 2012, thanks to lower R&D costs and a high- talent pool in India.11/30/2011 Source CII website 14
  15. 15. Fast Moving Consumer Goods (FMCG)• Fast Moving Consumer Goods (FMCG) goods are popularly named as consumer packaged goods. Items in this category include all consumables (other than groceries/pulses) people buy at regular intervals. The most common in the list are toilet soaps, detergents, shampoos, toothpaste, shaving products, shoe polish, packaged foodstuff, and household accessories and extends to certain electronic goods. These items are meant for daily of frequent consumption and have a high return. The Indian FMCG sector is the fourth largest sector in the economy with a total market size in excess of US$ 13.1 billion.It has a strong MNC presence and is characterised by a wellestablished distribution network, intense competition between the organised and unorganised segments and low operational cost. Availability of key raw materials, cheaper labour costs and presence across the entire value chain gives India a competitive advantage. The FMCG market is set to treble from US$ 11.6 billion in 2003 to US$ 33.4 billion in 2015. Penetration level as well as per capita consumption in most product categories like jams, toothpaste, skin care, hair wash etc in India is low indicating the untapped market potential. Burgeoning Indian population, particularly the middle class and the rural segments, presents an opportunity to makers of branded products to convert consumers to branded products. Growth is also likely to come from consumer upgrading in the matured product categories. With 200 million people expected to shift to processed and packaged food by 2010, India needs around US$ 28 billion of investment in the food-processing industry.11/30/2011 Source CII website 15
  16. 16. Micro, Medium & Small Scale Industry• Micro, Small and Medium Enterprises have been recognized as one of the key sector for employment generation and overall economic development of our country. The Micro, Small and Medium Enterprises development Act, 2006, was enacted to expand our focus to the entire gamut of micro, small and medium enterprises (MSMEs) both in manufacturing and service enterprises. This sector now provides employment to nearly 60 million persons and account for nearly 45 % of India’s manufacturing output. CII accords a high priority to the development of MSMEs, the dynamic segment of Indian Economy. The CII National MSME Council is the apex council for the SME members, and represents 69% of the total membership (approx. 8000). The council ensures involvement of the MSME members, and influences CIIs decision making on all issues of concern to the industry. The National council is supported by the MSME Sub-committees in the four regions and MSME Panels across all State & Zonal Offices.11/30/2011 Source CII website 16
  17. 17. Indias IT Industry• Information Technology is one of the most important industries in the Indian economy. The IT industry of India has registered huge growth in recent years. Indias IT industry grew from 150 million US Dollars in 1990-1991 to a whopping 50 billion UD Dollars in 2006-2007. In the last ten years the Information Technology industry in India has grown at an average annual rate of 30%.• The liberalization of the Indian economy in the early nineties has played a major role in the growth of the IT industry of India. Deregulation policies adopted by the Government of India have led to substantial domestic investment and inflow of foreign capital to this industry. In 1970, high import duties had forced IBM to leave India. However, after the early nineties, many multi national IT companies, including IBM, have set up their operations in India. During the ten year period 1992-2002, the Indian software industry grew at double the rate as the US software industry.• Some of the major reasons for the significant growth of the IT industry of India are -• Abundant availability of skilled manpower• Reduced telecommunication and internet costs• Reduced import duties on software and hardware products• Cost advantages• Encouraging government policiesSome of the major companies in the IT industry of India are -•• Tata Consultancy Services (TCS)• Infosys• Wipro• IBM• HP• HCL• Cognizant Technology Solutions (CTS)• Patni• Satyam• NIITIndias IT industry caters to both domestic and export markets. Exports contribute around 75% of the total revenue of the IT industry in India. The IT industry can be broadly divided into four segments -• IT services• Softwares (includes both engineering and Research and Development)• ITES-BPO11/30/2011• Hardware Source CII website 17
  18. 18. Textiles & Apparel• India Textile Industry is one of the largest textile industries in the world. Today, Indian economy is largely dependent on textile manufacturing and exports. India earns around 27% of the foreign exchange from exports of textiles. Further, India Textile Industry contributes about 14% of the total industrial production of India. Furthermore, its contribution to the gross domestic product of India is around 3% and the numbers are steadily increasing. India Textile Industry involves around 35 million workers directly and it accounts for 21% of the total employment generated in the economy. The Indian Textile Industry contributes approximately 12 percent to industrial production, 15 per cent to the manufacturing sector, 4 percent to the GDP and 12 per cent to the countrys total export earnings. The sector provides direct employment to over 35 million people, the second largest provider of employment after agriculture. This fact makes a call that says that textiles sector is a labor intensive one. There are another 55 million people who are engaged in its allied services. The Indian textile industry is estimated to be around US$ 52 billion and is likely to reach US$ 115 billion by 2012. The domestic market is likely to increase from US$ 34.6 billion to US$ 60 billion by 2012. It is expected that Indias share of exports to the world would also increase from the current 4 per cent to around 7 per cent during this period. Indias textile exports have shot up from US$ 19.14 billion in 2006-07 to US$ 22.13 billion in 2007-08, registering a growth of over 15 per cent.11/30/2011 Source CII website 18
  19. 19. Steel & Non-Ferrous Metals• The Indian steel industry entered into a new development stage from 2005–06, resulting in India becoming the 5th largest producer of steel globally. Producing about 53 million tonnes (MT) of steel a year, today India accounts for a little over 7 per cent of the worlds total production. India is the only country worldover to post a positive overall growth in crude steel production at 1.01 per cent for the January-March period of 2009. The recovery in steel production has been aided by the improved sales performance of steel companies. According to a report from Barclays Capital, China and India are going to provide the impetus for steel demand for the next few years.11/30/2011 Source CII website 19