Indian competitiveness is rising according to global executives. India ranks second on manufacturing competitiveness indices and CEOs expect India, along with China, to be the top countries for future job growth. Companies like GE are developing low-cost products in India and distributing them globally. While India currently lags major trading partners in exports to the US, its strong competitiveness positioning suggests its trade volumes will increase in the coming years.

1. Rising Indian competitiveness
Raghuram Sudhakar
August 2010

2. Roadmap
Introduction
Competitiveness diagnostic
CEO voices on India
Case Study: How GE is disrupting itself
Road ahead for India’s exports to U.S.
Key takeaways

3. Investment in/sourcing from India is expected to increase since India
fares well on all five critical factors
Critical factors for foreign investment/sourcing
Desire to invest in / source
from India
Competitiveness


Quality reliability
Second only to
China in
manufacturing
competitiveness

Rapidly expanding
capabilities in
engineering
design and
development and
embedded
software
development

Largest number of
Deming award
winners outside
Japan.
153 recipients of
TPM Excellence
award from Japan
Institute of Plant
Maintenance
(JIPM) committee.
Resource
availability
Dependability

Democratic
regime


Rich talent pool of
scientists,
researchers, and
engineers
Economic and
political stability.

Large, welleducated Englishspeaking
workforce
Climate for
Investment

Investor friendly
policies. (Liberal
policy on
Technology
collaboration)

Cost effective
production
facilities.

Large domestic
market.
Source: Deloitte and US Council on Competitiveness - 2010 Global Manufacturing Competitiveness Index; ©Deloitte Touche Tohmatsu, 2010
Investment and Technology promotion division, Government of India

4. Western businesses in the future would not prefer China or India, but China
and India
Global Manufacturing Competitiveness Trend
Current competitiveness
Country
Index
score
1
China
10
2
India
3
Competitiveness in the next 5 years
Country
Index
score
1
China
10
8.15
2
India
9.01
Republic of Korea
6.79
3
Republic of Korea
6.53
4
U.S.
5.84
4
Brazil
6.32
5
Brazil
5.41
5
U.S.
5.38
6
Japan
5.11
6
Mexico
4.84
7
Mexico
4.84
7
Japan
4.74
8
Germany
4.80
8
Germany
4.53
9
Singapore
4.69
9
Poland
4.52
10
Poland
4.49
10
Thailand
4.35
Rank
Rank
Source: Deloitte and US Council on Competitiveness - 2010 Global Manufacturing Competitiveness Index; ©Deloitte Touche Tohmatsu,
2010

5. Indian manufacturing companies are on par with the best in the world from the
quality perspective
Quality excellence of Indian Manufacturing
Evolution of quality in Indian Manufacturing (1988-2009)
29%
•
10%
% of India’s
GDP from
Manufacturing
Defects in
Manufacturing
1%
•
500ppm
India has the largest number of
Deming Award winners (21) outside
of Japan, in comparison with
Singapore (1), Taiwan (1), Thailand
(9) and U.S. (3)
153 companies have achieved Total
Productive
Maintenance
(TPM)
Excellence Award for their total
productivity management practices by
the
Japan
Institute
of
Plant
Maintenance (JIPM) committee.
100ppm
1975-88 1998-2000
2006
2008
2009
“Nano has revolutionised the global automotive thrust towards affordable cars and Godrej’s Chotu Kool will do
the same for the white goods industry, as Sony’s walkman and the Apple iPod and iPhone have done.”
-Surinder Kapur, Chairman, Sona Koyo Steering Systems
Source: “India Inc. Passes the Quality Test,”, Business Standard, January 4, 2010

6. Indian CEOs are optimistic about the manufacturing sector's competitiveness
CEO voice on India’s manufacturing competitiveness
Do you think that India's manufacturing/services sector has declined, stayed
the same or improved in terms of global competitiveness since the financial crisis began?
Manufacturing
Services
24%
21%
31%
42%
47%
Delined
Stayed the same
37%
Improved
Source: PricewaterhouseCoopers 13th Annual Global CEO Survey (2009)
Total = 62

7. Global CEOs expect most jobs to be created in Brazil and India in 2011
CEO voice on job creation in the future
What do you expect to happen to the headcount in your organization globally over the
next 12 months?
Brazil
27
India
27
13
23
China & Hong Kong
7
23
23
Korea
Canada
US
Global
13
30
17
18
15
Australia
UK
17
15
30
14
7
9
Increase by less than 5%
10
19
25
20
3
7
10
7
9
Increase by 5-8%
Source: PricewaterhouseCoopers 13th Annual Global CEO Survey 2010
Total = 1198
Increase by more than 8%

8. More are set to mark their presence in India in the coming years
CEO voice on expanding presence in India
“The structural shifts have already begun. The emerging markets, if you will, are a critical component of the
business environment that we have to compete in. So whether it be the BRIC countries, where we have to
have a strong presence, our clients are demanding that we be in emerging markets. Brazil, Russia, India and
China are markets that we are investing in. We have a very strong competitive position in those markets, and
we will continue to grow it.”
- Michael I. Roth, Chairman and CEO, Interpublic Group, US
India will probably be the second biggest economy in the world by 2035. How much longer can we call that
an emerging market?
- David Rubenstein founding managing director of The Carlyle Group
“I don’t even want to talk about your growth plans for the U.S. You’ve got to triple the size of your Indian
business in the next three years. You’ve got to put more resources , more people, and more products in
there, so you’re deep in that market and not just skimming the very top. Let's figure out how to do it.”
- Jeffrey R. Immelt, CEO of General Electric in conversation with his senior manager – the head of a major
business unit
Source: PricewaterhouseCoopers 13th Annual Global CEO Survey 2010, Harvard Business Review October 2009

9. General Electric is into reverse innovation today – developing
products in India and distributing them globally
Case study: How GE is disrupting itself
Then
Now
REVERSE
INNOVATION
Developing products in
China and India and
distributing them globally.
GE badly needs low-cost
innovations to not only
expand beyond high end
segments in India, but to
also pre-empt local
competition from creating
similar products and using
them to disrupt GE in rich
countries.
GLOCALIZATION
Developing high-end
products at home and
adapting them to other
markets around the world
Stages of GE’s disruption
Developing a $1000
handheld
electrocardiogram
(ECG device) for
rural India
Selling the same in
US, where they are
pioneering new
uses for the
machine.
Decision in 2009 to
spend $3 billion in
the next 6 years in
creating at least 100
healthcare
innovations to lower
costs, increase
access and improve
quality.
Plan to create a
separate P&L for all
GE businesses in
India and giving
India considerable
power to tap GE’s
global R&D
resources.
Source: Govindrajan, V, Immelt, Jeffrey and Trimble, Chris, “How GE is disrupting itself,” Harvard Business Review, October 2009

10. Indian CEOs expect U.S. to be the second largest market for Indian
goods and services after South Asia
Important overseas markets for India
Indian CEOs were asked: Which of these will be your most important market
outside of India when economic recovery arrives?
Don't
Know/Refused
10%
•
South Asia
18%
None
11%
•
Other
9%
U.S.
16%
Russia
3%
E.U.
6%
Middle East
11%
China
16%
Total = 62
Source: PricewaterhouseCoopers 13th Annual Global CEO Survey (2010)
Over the past 10 years, the
shares of Indian exports going to
South Asia, China and the Middle
East have grown, while the
United States and Europe shares
have shrunk.
In that same period, India’s share
of total world exports grew from
just over 0.6% in 1998 to nearly
1.5% through the first five months
of 2009.

11. India lags behind other countries in its imports to U.S. but with high
competitiveness, there is scope to climb up the ladder
National Competitiveness vs Share of US imports
China
10
9
Current Manufacturing
Competitiveness Index
India
8
Republic of Korea
7
6
Brazil
Japan
Singapore
Thailand
5
4
Mexico
Germany
Canada
UK
3
2
1
0
0
50
100
150
200
250
300
350
US Imports (all products) in 2009 ($ billions)
Note: US imports above include only products, not services
Source: Deloitte and US Council on Competitiveness - 2010 Global Manufacturing Competitiveness Index; ©Deloitte Touche Tohmatsu, 2010
TradeMap Statistics

12. India is an important and inevitable destination to global executives
for it strengths and rising competitiveness
Summary
Key takeaways
 India is a favorable destination for global investment, considering it satisfies all five critical factors for
investment/sourcing.
 CEOs around the world feel that India is where competitiveness is rising, most jobs will be created in
the future and is a strategic location for future expansion.
 Companies like GE are already disrupting themselves through reverse innovation – developing
products in India and distributing them globally.
 Though India lags behind other countries in its imports to U.S today, high competitiveness will propel
its growth in the days to come.

13. END OF PRESENTATION