INDIA

FASTEST GROWING
FREE MARKET DEMOCRACY
IN A GLOBAL ECONOMY

Presentation by:
Kamal Meattle, CEO, PBC-STIP, New Delhi, India www.pbcnet.com
meattle@pbcnet.com 1
CONTENTS

• THE INDIA STORY

• INDIAN SUCCESS STORIES

• INTERNATIONAL SUCCESS STORIES

• INDIA ADVANTAGE

• BUSINESS OPPORTUNITIES

• BUSINESS OPPORTUNITES FOR PHILIPPINES

• SME : ADDING VALUE

• WINNING ATTITUDE

• ACKNOWLEDGEMENT
2
THE INDIA STORY

3
1947 : Year of Indian Independence

Today’s India is one of the fastest growing Democratic Market Economy,

well on it’s way to be integrated with the world economy

The famous Goldman Sachs report ( Dreaming with BRICs: The Path to
2050 ) states that, among Brazil, Russia, India and China, India will grow
the fastest over the next 30 to 50 years by leveraging its demographic
advantages and through continued development

India’s GDP will exceed Italy’s in 2016, France’s in 2019, Germany’s in 2023
and Japan’s in 2032

INDIA TO BECOME THE 3RD LARGEST ECONOMY IN THE WORLD BY 2032

AND…
THE STORY BEGAN IN 1947

4
India Pre - Liberalization

• Planned Industrial Development

• Industry Licensing and Quotas

• Dominance of Public Sector

• Restriction on Private Investment

• Socialism

• Mixed Economy

5
The New Industrial Policy for liberalization-1991

De-licensing
De-control
• Liberalization of De-regulation
Industrial Licensing
Broad banding
Abolition of registration

Liberalization of foreign investment

• FERA Liberalization
Liberalization of Technology Import

6
 The New Industrial Policy for liberalization - 1991

Abolition of threshold assets limit

• MRTP Liberalization
No MRTP clearance needed for
expansions, mergers

Several industries hitherto reserved

for public sector opened up to private
sector
• Curtailment of Public
Sector
Only eight core industries remain
reserved for the public sector

Purview of Board for Industrial and

Financial Reconstruction (BIFR) extended to
Public sector
7
India Liberalization Stage - Strategies Developed
• Government’s role changed to Regulator from Licensor

• All Licenses Rationalized

• Active participation of private sector

• FDI being Welcomed (100%) - Automatic Route

• Barriers Dismantled & Procedures Simplified

• Indian Industries Actively Investing Abroad

• Bureaucracy - Less Government is Good Governance

• Allowing Market Forces to Govern the Efficient Allocation of

Resources with Minimum State Intervention

8
• Reducing and rationalising foreign trade barriers
Economic Scenario : Post Liberalisation
• India - One of the fastest growing economies in the world
• Average GDP growth (1995 -2005) : 6.2 % per annum
• Average annual growth (1995 - 2005)
Agriculture & Allied : + 2.1 % per annum
Industry : + 6.6 % per annum
Services : + 7.8 % per annum
• Average Per Capita Income growth (1995 - 2005): 3.8 % per annum
• Inflation down to a single digit level continuously for the last ten years
• Foreign exchange reserves increased from US $ 2 b (March 1991)
to US $ 145 b (September 2005)

• Merchandise Exports : +20 % average rate of growth in last three years

• Booming Services Exports from US $ 4.6 b in 1990-91 to US $ 51.3 b in

2004-05
9
Economic Scenario : Post Liberalization
• Balance of Payments surplus (US $ 26 b in 2004 - 05)

• External Debt Service Ratio down from 26.2 % in 1995 to 6.2 % in 2005

• Foreign Direct Investment (FDI) : Average +US $ 5 b pa in the last

five years.

• Foreign Portfolio Investment : US $ 11.4 b in 2003-04 and

US $ 8.9 b in 2004-05

• Reforms continuing and have unleashed dynamic forces –

putting the economy on a trajectory of unparalleled economic
growth in the future

• The Indian Government is working in close co-operation with

industry and trade to mitigate the remaining problems and
constraints

• Broad consensus across the political spectrum on the need for

and direction of the reforms. Some issues still need to be resolved
10
Share Of Services Sector In GDP On The Rise (%)

60 52.4
48.9
50 40.6 43.9
32.2 28.1
40 27.2 27.1
27.2 28.0
30 23.8 20.5
20
10
0
1990-91 1995-96 2000-01 2004-05

A gric ulture Indus try Serv ic es

11
Agriculture

India
• the world’s most irrigated land mass
• world’s 2nd largest exporter of rice & 5th largest exporter of wheat

Food production: India’s Ranking in the World

1st Tea, Milk

2nd Rice, wheat, sugar

12
Manufacturing

• Rate of growth
2003-04 7%
2004-05 9.2 %
• Diversified base of world class capabilities
• State-of-the-art technologies
• TQM,TPM, Six Sigma & Lean Manufacturing - part of
everyday practice
• Diversified industrial base with supporting ancillary industries
• Overseas acquisitions worth US$ 500 m

13
Services

• Consistent growth
2003-04 9.1 %
2004-05 8.9 %
• Sectors Driving Growth
- ITES
- Healthcare
- Financial Services
- Education

Source:Economic survey, 2004 - 05

14
Average GDP growth - India & the World

Average GDP Growth (1990-2001)

9.4
9.5
8.5
7.5
6.2
Growth (%)

6.5 5.5
5.5 4.9 4.7
4.5 3.3
3.5 2.9 2.9
2.0
2.5
1.5
India

Philippines
China

Thailand

USA
Indonesia

Mexico

Brazil
S.Korea

Source: WDI, World Bank, 2003

15
Rising share of India’s external trade in GDP

Target :
To double share of exports from 0.7 % to 1.5 % of world trade

S h a re o f e xte rn a l tra d e in G D P

40 3 0 .3 2 8 .9 3 1 .6 32
2 5 .5 2 6 .9
30 2 3 .1
1 8 .1
20
10
0
1 9 9 1 - 9 12 9 9 4 - 9 15 9 9 7 - 9 81 9 9 9 - 2 0 0 0 - 0 21 0 0 1 - 0 2 0 0 2 - 0230 0 3 - 0 4
2000

16
Macro Economic Indicators (2004 - 05)

• Land Area: 3.29 m sq. km.

• Population: 1.09 b

• GDP: US $ 630 b

• Real GDP Growth: 6.9 %

• Gross Domestic Savings: 28.1 % (2003 - 04)

• Gross Domestic Investment: 26.3% (2003 - 04)

• Per Capita Income: US $ 580

• Inflation Rate: 6.4 %

17
Macro Economic Indicators (2004-05)

• Exchange Rate: US $ 1 = 43.75

• Merchandise Exports: US $ 80b

• Merchandise Imports: US $ 106b

• Services Exports: US $ 51b

• Foreign Direct Investment: US $ 5.5b

• Foreign Portfolio Investment: US $ 8.9b

• Direct Investment Abroad: US $ 1.5b

18
INDIAN SUCCESS STORIES

19
Indian MNCs - On a global buying spree

• Number of foreign firms acquired 120

by Indian companies during
2001 - 03

• Total worth US $ 1.6 b

• India - 8th largest investor in the UK

• No of investments 440

• No of Indian companies with 1,441

operations in Singapore

20
India – Leading The World

• Hero Honda - Largest producer of motorbikes in the world

• Moser Baer - World’s 3rd largest producer of optical media

• Hero Cycles - World’s largest bicycle producer

• Bharat Forge - Amongst the world’s top 3 forgings manufacturers

• UB Group - World’s 2nd largest producer of alcoholic beverages

• Paharpur Cooling Towers - World’s 2nd largest manufacturer of

Cooling Towers

21
India – Leading The World

• Apollo Hospitals - Single largest hospital chain in South Asia

• TISCO - world’s cheapest producer of steel

• Reliance Industries - World’s largest producer of PTA, a chemical

used in textile production

• Mahindra & Mahindra - Amongst top 3 tractor manufacturers in the

world
• Telco - Amongst top 3 truck manufacturers in the world
• Welspun - World’s largest producer of terry-towels
• Gujarat Ambuja - Amongst top 5 cement producers in the world

22
Some Indian Examples Benchmarked with the
Best In The World

23
Success Story of RELIANCE

The Reliance Group founded in 1932, is India's largest business house with
total revenues of over US $ 22.6 b and exports of US $ 3.6 b

It began as a an SME

The Group's activities span exploration and production of oil and gas,
refining and marketing, petrochemicals, textiles, financial services, insurance,
power, telecom and infocom initiatives

The Group exports its products to more than 100 countries the world over

Reliance Group revenue is equivalent to about 3.5 % of India's GDP

The Group contributes nearly 10 % of the country's indirect tax revenues and
over 6% of India's exports

Today, the Reliance Group has one of the largest family of shareholders in the
world

24
Success Story of WIPRO

Wipro was set up in the backdrop of the small town of Amalner in

Maharashtra in 1945

An SME and primarily an oil factory, the chief products were

Sunflower Vanaspati and 787 laundry soap

It was in the early eighties that Wipro made its foray into the Infotech
arena

With this began the Wipro Infotech story

Today, Wipro stands at the firmament, as a trusted and experienced

provider of a comprehensive range of IT services, solutions and
products, worldwide

25
Success Story of BHARTI

Bharti Enterprises has successfully focused its strategy on telecom

while straddling diverse fields of business

It all began as a Small Industry

Bharti Tele-Ventures is today acknowledged as one of India's finest

companies, and its flagship brand 'Airtel', has over 12 million customers
across India

Recently, Bharti has successfully launched an international venture with

EL Rothschild Group owned ELRO Holdings India Ltd., to export fresh
Agri- products exclusively to markets in Europe and USA

26
Success Story of DR.REDDY’S

Dr.Reddy’s Laboratories was founded in 1984, with a capital of US $40,000 in cash and
US $120,000 in bank loan

In fact, it is this spirit of entrepreneurship that has shaped the company to become
what it is today

Today, the company with revenues of US $446 m, in fiscal year 2005, is India’s second
largest pharmaceutical company and the youngest among its peer group

Dr. Reddy’s started its drug discovery programme in 1993 and within three years it
achieved its first breakthrough by out licensing an anti-diabetes molecule to Novo
Nordisk in March 1997

With this very small but significant step, the Indian industry went through a paradigm
shift in its image from being known as just ‘copycats’ to ‘innovators’!

Through its success, Dr. Reddy’s pioneered drug discovery in India

Today, the company manufactures and markets API (Bulk Actives), Finished Dosages
and Biologics in over 100 countries worldwide, in addition to having a very promising
Drug Discovery Pipeline
27
Success Story of BIOCON

Biocon is India's leading biotechnology enterprise

Over the past 25 years, they have evolved from an small enzyme manufacturing
company to a fully integrated biopharmaceutical enterprise, focused on healthcare

At Biocon, success has been their ability to develop innovative technologies and
products and to rapidly leverage them to adjacent domains

This unique "integrated innovation" approach has yielded a host of patented

products and technologies that have enabled multi-level relationships with their
global clientele

As India's first and leading biotechnology company, Biocon extends its support to
numerous community outreach and corporate citizenship initiatives with special
concentration in the areas of healthcare, education and environment

The Biocon Foundation, set up in 2004 has recently launched Arogya Raksha
Yojana, a unique health initiative for rural India

28
 Success Story of Paharpur Cooling Towers

In its over four decades of existence, Paharpur has come to be acknowledged as the
pioneer in the Indian cooling tower industry

It all began as a small industry with a capital of US $ 11,000

At today's selling prices, Paharpur has sold cooling towers valued at over US$ 1 b

If these cooling towers were all working together, they would be able to cool more than 265
million liters of water every minute or 382 b liters in 24 hours

The Paharpur team consists of highly qualified engineers & professionals with over 1,000
man years of experience in the field of cooling tower application engineering, designing,
erection and trouble shooting

Paharpur has pioneered several improvements in cooling tower design and operation and
has emerged as one of the largest cooling tower manufacturers in the world, with exports to
more than 40 countries

29
Success Story of Standipack

A successful SSI unit set up in 1980, in NCR, Delhi

• It is the largest lube oil flexible packaging company in India producing

packaging materials, machinery and systems and doing contract packaging

• Produces /contract packages over 300 m packages a year, for the oil
majors in Delhi, Kolkata, Chennai and Mumbai

• Patents in most countries of the World

30
 Success Story of Paharpur Business Centre &
Software Technology Incubator Park

• Began operations in 1990 in New Delhi, with an equity capital of Less than
US $ 15,000

• Current net worth of US $ 10 m

• Provides a suite of 28 services, employing 450 persons

• Has Fortune 500 companies, MNC's and corporate, as clients

• Has five international certifications, ISO 9001, ISO 14001, SA 8000, OHSAS
18001 and HACCP

• Commitment to UN Global Compact

31
Success Story of Paharpur Business Centre &
Software Technology Incubator Park

• Publishes its annual Sustainability Report following the GRI system

• Reports its triple bottom line - relating to profit, environment and

sustainability

• Now providing technical support to setting up of a 1.7 m ft2 Software Park

near Delhi that has been given the SEZ status by the GOI –
‘The Haryana Technology Park’

• Company showcased by CII at the World Summit on Sustainable

Development in Johannesburg in 2002 for its sustainability initiatives

• Its USP is the Clean Indoor Air in its Center in Delhi - Certified Mountain
Quality Air using biotechnology developed by NASA, USA to clean air

32
INTERNATIONAL SUCCESS STORIES

33
Preferred Destination For Foreign Equity Investors
Japan
2 ,0 0 0 1 ,8 5 8
In d ia
1 ,8 0 0
So u th K o r e a
1 ,6 0 0
Sin g a p o r e
1 ,4 0 0
1 ,1 0 5 Au s tr a lia
1 ,2 0 0 1 ,0 5 4
965 C h in a
1 ,0 0 0
Hong Kong
800
548 Ta iw a n
600 393
2 6 31 7 2 M a la ys ia
400
200 36 22 17 8 Sr i La n k a
7
0 N e w Ze a la n d
1 Ph ilip p in e s
Th a ila n d

India attracts second highest private

equity investment in Asia
Total equity flow to India between 1999 and 2004 doubled
Source: NASSCOM from US $ 5.12 b to US $ 11.50 b 34
MNCs leveraging the India Advantage

35
FDI INFLOWS TO INDIA

7000
6125
6000 5526
5036
5000 4674
4029
4000

3000
2000

1000
0
2000-01 2001-02 2002-03 2003-04 2004-05 *

FDI Inflows ($ million)

36
 International Brands Utilizing The Indian
Knowledge Base

• More than 100 global companies outsource R&D facilities from India

• GE John F Welch Technology Centre – Company’s largest research outfit outside the USA

• GE Medical Systems – India as sole sourcing base for its portable ultrasound scanner

• Monsanto – First non-US research facility

• Eli Lilly – largest research facility in Asia and 3rd largest in the world

• Texas Instruments – Digital Signal Processor developed in India – controls 50% of the world
market

• AVL, Austria – India as base to do R&D for the company’s Japan centre

37
 Case Study of Selected German Companies
in India
Beiersdorf

Problems at beginning:
• Existence of rival company (Nivea) in the market (personal
hygiene market)

Reason for success:

• Relative name recognition
• Adaptable Indian staff
• Suppliers who are willing to cooperate
• Immense support in form of technology and know-how transfer
from side of Germans
• Great market potential

What is important for business-collaboration with India?

• Patience and endurance

• Local manager who knows mother company
• Collection of experience through business connections 38
 Case Study of Selected German Companies
in India

Daimler Benz

• Decentralized research was quite essential

• Achievement of local representation to assess market
specified interests

Why India?

• Great resources of highly qualified scientists as staff

• Availability of human capital with low labor costs
• Internationality:
English language and understanding of European culture
(due to British history, existence of numerous institutions,
administrations, school etc)
• Economic Policy

39
 India – A Preferred Destination
"India has the potential to deliver the fastest
growth over the next 50 years with an
average rate of more than 5 per cent a
year for the entire period”
Dominic Wilson, Senior Global
Economist and Vice President,
Goldman Sachs 2005
"We want to bring to the world various facets
of this extraordinary country, its people and
progress"
Chris Cramer, International Managing
Director, CNN 2004
“India's highly educated workforce,
management talent, rule of law,
transparency, cultural affinity and regulator
environment are more favorable than
China's.”
A T Kearney, FDI Index 2004
“Quite simply, I was blown away by what I
saw on my first trip to India”
Stephen Roach, Managing Director &
Global Chief Economist, Morgan
Stanley 2004
40
INDIA ADVANTAGE

41
The India Advantage

Excellent network
Well-developed
of research laboratories
base industries

Proficiency in Pro active

English policy framework

Extensive clinical trial

opportunities
Rich biodiversity

Low manpower Trained manpower

costs and knowledge base

42
Demographics: A strong demand driver

43
 Growing Knowledge Pool

Partnership Driver - Skilled Manpower

Global Growth in Working-Age Availability of Skilled Availability of Qualified

Population (15~64) Over the Next Manpower, 2003 Engineers, 2003
Six Years ( Mln )
Stock Addl working 10 = High 10 = High
Position 2004 age population
by 2010 1 = Low 1 = Low
World 4,087 375 Singapore 7.4 India 8 .9
India 675 83 USA 7.3 Singapore 7.9
Africa 477 73 India 7.2 USA 7.3
China 921 56 Germany 7.1 Hong Kong 6.9
41 Hong Kong 7.1
S E Asia 355 Germany 6.7
L America 38 Japan 7.0
352 Taiwan 6.7
20 Taiwan
6.6
W Asia 127 Mexico 6.4
13 Korea
5.7
USA 197 Korea 5.8
W Europe 123 0.04 Mexico 5.3
Source: UN, Morgan Stanley Source: IMD Competitiveness
China Yearbook3.9
2003
Japan 85 -3 China 4.3
ISO:9001:2000
44
The Cost Advantage

Average wage / year (in thousand US dollars)

30 28
25
25
20
15
8.9
10 7.2 8
6.4 6.5 7.2
5.88 6
5 2.4
0

Source: NASSCOM

Costs for offshore work

30 - 50 % lower than in USA / Europe

45
 Low Wages

Total Compensation for Work ers in Heavy

Manufacturing (US$ per Hour)
25
20.32
20

15

10 8.35

5 2.27
0.75 0.43 0.35
0
USA Korea Mexico China India Indonesia

Source: IMD Competitiveness yearbook, 2003 46

Import duty Reductions

R e d u c tio n in P e a k C u s to m s D u tie s o n M a n u fa c tu re d

160
140
150
120
100
110
in per cent

80
60
40
50 42
20 3 8 .5 30 25 20
0
1991 M a r-9 2 M a r-9 5 M a r-9 7 M a r-0 0 M a r-0 2 M a r -0 3 w . e . f M a rc h
2004

47
India - Economic Enablers

10th largest economy in the world - 4th in terms of PPP

Will overtake Japan in PPP terms by 2010, to be 3rd largest in the world

Large entrepreneurial base and diversified manufacturing structure

Large reservoir of skilled labour at internationally competitive cost

Vast pool of scientifically and technically qualified manpower of 20m

A large domestic market - 300 m + strong middle class population

having substantial purchasing power

Largest democratic set - up

A broad based and transparent legal framework including arbitration

48
India - Economic Enablers

Vast network of bank branches, financial institutions and well-organized

capital and money markets

A network of technical and management institutes of highest

international standards for development of human resources

India has a record of meeting its international financial obligations as

per schedule and has never been a defaulter

No communication barrier, as English is the most prevalent business

language

Strong and vibrant small scale sector that is keen to establish

strategic alliances with their foreign counterparts

49
India - Economic Enablers

Supportive infrastructure base

Strategic location for third country markets, particularly in the rapidly

growing south and south-east Asian countries

The strategic location of India and its easy and efficient access to the
Middle East, East European countries, CIS countries, Africa, South East Asia
and Asia-Pacific countries places it in a unique position as a sourcing ground
for entering into strategic alliances in export-oriented industries

Foreign companies can take advantage of India’s strategic location and tap
the markets of these countries.
India is slowly but surely emerging as an attractive destination for foreign
investment

Liberalized industrial and foreign investment policies

50
India - Economic Enablers

Recognising the need and the potential in certain areas, the Government
has also come out with specialised packages of incentives for setting up
projects in the fields of power, roads and highways, telecommunications,
mining, drugs and pharmaceuticals,hydrocarbons, shipping and ports,
tourism, electronics, food processing, etc

The Government is vigorously promoting and approving foreign direct

investment keeping in view the objective of attracting at least US $ 10 b
per annum

The Government is very keen to attract sizeable foreign investment into

infrastructural projects like roads, power, ports, telecommunications, etc.
as the demand for infrastructural services is expected to rise several
times to match the projected economic growth of around 8 % per annum
in the next ten years

51
 India - Economic Enablers

Sector FDI Limits

• Defence up to 26 %

• Telecom up to 74 %

• Civil Aviation up to 49 %

• Real estate & construction sector up to 100 %

• Integrated township development up to 100 %

• Tea plantation up to 100 %

52
 The India Advantage: Infrastructure

• Road length 2.5 m km

Second largest road network in the world

• Railway routes 63,000 km

• Cargo handled 298 m tonnes

• Electricity installed capacity 126,000 MW

Sixth in world electricity generation

• Telephone Connections 77 m lines

• Fixed lines (Dec, 2004) 44.76 m

8th largest telecom network in the world

Source: Department of Economics & Statistics, Tata Services Ltd 53

Indian Brains Abroad

• Though foreign multinational have dominated the research agenda in India

to date, a growing number of Indians who have worked abroad are
returning home with cash, contacts and confidence to set up companies
of their own
• These are people who have the experience and exposure to best practices
abroad
• For the first time, Indians who have been exposed to the world, realize they
can do something just as good and they can be world-class
• They have an attitude to meet challenges and succeed and also give back
something to their country

• 35 % of Doctors in USA
• 36 % of NASA Scientists in USA
• 35 % of Silicon Valley Start-Ups are by Indians
• India emerging as outsourcing hub
54
BUSINESS OPPORTUNITIES

55
Opportunity in various Industry Sectors

• Software

• Biotechnology

• Outsourcing

• Retailing

• Real Estate

• Auto Components

• Telecommunication

• Media & Entertainment

56
Opportunities in Software

• The Software industry in India is witnessing an explosive growth and expects

to generate US $ 87 b including US $ 50 b from exports by 2008

• More than 150 global business giants have set up research and development
facilities in India

Some of these firms are GE, Microsoft, TI, HP, IBM, Daimler Chrysler and
Motorola

• Bangalore has over 150,000 software engineers and a concentration of

hi-tech companies

• Delhi and NCR is the 3rd largest exporter of Software services from India

• More than 70,000 software professionals enter the Indian market each year

57
Opportunities in Software – The China
Connection

• China has a worker base equal to India's in terms of cost, quality

and scale

• In future, the Indian software Industry will use China as a base to

cater to the local markets including Japan

• Indian firms such as HCL, TCS, Infosys and Wipro have already
opened centers in China to outsource technology talent

58
Growing IT Market

Size (2002 - 03) US $ 24 b

Growth rate 28 %

CAGR (since 1999) 46 %

Share of IT and BPO 1.4 % of GDP

2008 projection 7%

Exports (2003 - 04) + US $ 12 b

Growing at + 30 % pa

Employment Over 650,000

Second largest employer in IT services sector

59
Opportunities in Biotechnology

• Biotechnology is a fast emerging sector in India

• The consumption of biotech products in India was US $ 1.8 b

in 1999 and is expected to cross US $ 4.2 b by 2010

• It is estimated that 10 % of the researchers and 15% of the

scientists in pharmaceuticals and biotech R&D in USA are of
Indian origin

• India is churning out 2 m graduates, 300,000 post

graduates and 1,500 PhD's, every year

• Biocon, the first biotech company was launched in 1978

• Indian Firms such as Shantha Biotech, Bharat Biotech,

Dr. Reddy's Lab and Biocon are all very successful firms

60
 Biotech Market - A consistent Uptrend

25 % growth in investment

70 % growth in employment
2002- 03

74 % growth in R&D
manpower

Size 2003 - 04 US $ 705 m

US $ 5 b annual
revenues

2010
1 m skilled jobs

10 % of global industry
Source: Confederation of Indian Industry (CII) 61
Pharma Market

Size (2002- 03) US$ 7 b

Size 2010 (estimated) US$ 25 b

CAGR (1995 - 2002) 16.6 %

Exports 23 %
CAGR(1995 - 2002)

Volume – wise 8 % of global market

4th largest in the world

Share of formulations 80 %

62
Opportunities in Outsourcing

• The Indian Outsourcing industry is moving up the value chain

• It is BPO today but the future is for Knowledge Process Outsourcing

(KPO), Financial Process Outsourcing (FPO) and Legal Process
Outsourcing (LPO)

• It is providing value through domain expertise rather than process

expertise

• India, in the new knowledge economy, is all set to emerge as a global

KPO,FPO and the LPO hub

• It is estimated to capture 71 % of the world market by 2010 against

56 % today giving it a market of US $12 b

• There are new opportunities, given that there is a serious shortage of

quality teachers, in the USA

63
Opportunities in Outsourcing

• The remote education market is expected to be US $ 15 b by 2008

• The current leaders are Engineering design – US $ 400 m, basic
data search, integration and management – US $300 m and Biotech and
Pharma – US $ 280 m
• The Compounded estimated annual growth of KPO for India is 50 %
whereas BPO will grow at about 30 %
• KPO is expected to engage 250,000 people by 2010
• It will be in areas such as biotechnology,animation and graphics,design
in aerospace & automotive, health care, pharma research, learning
solutions, data management, customer analytics and entertainment
• FPO will include insurance underwriting, risk assessment, equity
research and corporate market research

64
ITES - BPO Sector

Contribution of IT Enabled Services in total IT

exports
1999-2000
20%
2002-2003
33%
2000-2001
20%
2001-2002
27%

- ITES exports projected to touch US$ 24 b by 2008

- India offers combination of cost-quality-scale advantage

65
Opportunities in Retail Sector

The ongoing buoyancy in India’s spending, arising from the changing demographics
and the resultant rise in income levels, has resulted in a distinct consumer preference
for value-added products across the retail spectrum, providing a platform for the
rapid growth of the retailing sector which could emerge as one of the fastest growing
sector in coming years

• Organized retailing industry to rise from US $ 4b to US $ 15b by 2010

The total retailing industry, estimated at US $ 200b is largely in the unorganized
sector with organized retailing accounting for less than 2 % (US $ 4b)

• The organized retailing segment to grow fourfold in 5 years

• According to NCAER, the Indian middle class (household income between US

$ 4,500 – 23,000) currently at 92m, is expected to cross 153m by 2010

• Substantial mall construction:

The number of malls is expected to rise from the current 40 to around 250 by
2010

• Close to 50m sq. ft. of retail space is expected to be developed over the next 5
years
66
Opportunities in Real Estate

• The US $ 50 b Indian real estate market is booming and expected to grow at

25 per cent annually

• The boom owing to the consumption powered growth of the country's

economy has seen investors planning nearly 250 new shopping malls
by 2008, as against just three that existed till 2002

• The central government adopted a regulation in 2005 allowing

foreigners to bid for Indian construction projects with local partners
and also reducing their minimum land - holding limit from 100 acres to
25 acres

• Enthused by the liberalized investment guidelines, a slew of foreign

builders are rushing to launch projects in Asia's third largest economy

• Expected annual shortfall of 20 m housing units by 2011

Mumbai alone would need more than 180,000 housing units

• An opportunity – for developing large- scale commercial and residential

townships in six cities – Kolkata, Bangalore, Mumbai, Chennai, Hyderabad
and New Delhi
67
Opportunities in Auto Components

The Indian automotive industry has grown at a staggering pace over the last few
years

The US$ 6.8 b industry has registered a CAGR of 17 % between 1998 - 2003 and
is projected by ACMA to grow at a 15 % CAGR till fiscal 2012

The opening up of the sector over the last decade has caught the attention of
global auto majors

In the 1990’s, economic liberalization allowed foreign automakers such as

Hyundai, Ford, Toyota and GM set up base in India

They also persuaded their overseas components suppliers to set up local

manufacturing bases in India

For example, Delphi followed General Motors and opened their plant in the state
of Gujarat in 1995 and Visteon followed Ford in 1998

68
 Opportunities in Auto Components

• Present Industry size US $ 6.8b

By 2012 US $ 17b
• Total Exports By 2010 US $ 5b

• Key Features
- Suitability as a low cost manufacturing base for MNCs
- Costs 20 - 30 % lower, compared to USA
- High product quality, superior design & engineering
capabilities

* Source: ACMA 69
Opportunities in Telecommunication

• Until 1995, during the more than forty years of government monopoly, there
were 9.4 m telephone connections

• There are 46.2 m fixed line subscribers and 52.2 m mobile phones

• The mobile phone market is growing at 2 m per month

• Estimated rise in Cellular by 100 m subscribers by 2007

• Basic telephone connections 175 m by 2010

• 100 % FDI in telecom equipment manufacturing

• Almost 2 m wireless subscribers getting added every month

• Unlike many developed countries, the GSM and CDMA technologies co - exist

• The outsourcing boom would not have occurred without the private telecom
70
sector
Opportunities in Media & Entertainment

• The Indian media and entertainment industry, with the prominent

segments being films, television, and music has grown in recent times

• The entertainment industry is currently generating revenue of US $ 7.2b

• The average growth budget for films has been increasing by 15 % p.a

• Another high growth segment of the entertainment industry is television

broadcasting

• The present size of this segment is estimated to be US $ 1b

• The penetration of cable TV, in the rural segment is expected to

grow by 12 % pa

• The music industry in India is expected grow at 20 % pa

• FM radio broadcasting has been privatized

71
BUSINESS OPPORTUNITIES
FOR PHILIPPINES

72
 Bilateral Trade

Value in US $ m

Year Export Import Total Trade Balance of Trade

1997- 98 239.01 27.77 266.78 211.24

1998 - 99 118.71 37.25 155.96 81.46

1999 - 00 143.68 56.31 199.99 87.37

2000 - 01 201.63 62.97 264.60 138.66

2001- 02 248.63 95.17 343.80 153.46

2002 - 03 473.23 123.98 597.21 349.25

2003 - 04 321.54 122.11 443.65 199.43

2004 - 05 393.90 181.87 575.77 212.03

Source: Ministry of Commerce, India

73
Major Indian Exports To Philippines
• Meat & preparation

• Drugs, Pharmaceuticals & fine Chemicals

• Rubber manufactured products except footwear

• Plastic & Linoleum Products

• Primary & semi finished iron steel

Major Indian Imports From Philippines

• Metal ores & scrap

• News print

• Non - ferrous metals

• Gold

• Electronic goods 74
Potential for Business

• IT & ITES

• Sharing information & technology for clean environment

• Gems and Jewelry

• Natural and Herbal Products

• Renewable Energy Sources

• Dairy

• Drugs and Pharmaceuticals

• Construction and Material and services

• Mining

• Oil and Gas

75
Deteriorating Air Quality

The major sources of air pollutants

Motor vehicles

Industrial plants

Burning and construction work

The continuing increase in motor vehicles and population, the inadequate mass
transit system, worsening traffic conditions, the establishment of pollutive
industries, the widespread practice of open burning, and inadequate enforcement, if
not adequately addressed, are bound to contribute to increasing air pollution in the
surrounding areas

The most effective approach in improving air quality is to stop the generation of
pollutants at their source

This involves replacing a highly pollutive technology or energy source with a non-
polluting or a less polluting one, including shifting to cleaner fuels

76
 Air Quality Management

The world’s best practices in preventing air pollution and maintaining ambient air
quality reflect the creative use of technology and fuel options, which range from

• Use of cleaner vehicle fuels - CNG, Gasohol, Biodiesel, Fuel cell, Electricity

• Solar energy

• Wind energy

• Mass transportation systems – Underground, Monorail

• Usage of Appropriate technologies for ‘Green Buildings’

• Innovative urban planning incorporating walkways and bike lanes

77
Improvement Of Ambient Air - Nehru Place Greens,
New Delhi 1996 - 2005

Parameter ASHRAE * 1996 1999 2001 ASHRAE ** 2002 2004 2005^

Standard Standard
(maximum) (maximum)
CO 2 1000 PPM 455 350 339 300-500 ppm 331 341 345
Carbon 0.055 ug / m 3 BDL # BDL # BDL # 10 mg / m 3 BDL # BDL # BDL #
monoxide
Ozone 100 ug / m 3 BDL # BDL # BDL # 0.005 mg / m 3 BDL # N.A. N.A.
Formaldehyde 0.4 mg / m 3 0.278 BDL # BDL # 0.012 mg / m 3 BDL # N.A. N.A.

Lead 1.5 mg / m 3 2 0.003 BDL # 1.5 ug / m 3 BDL # N.A. N.A.

Nitrogen 100 ug / m 3 67 38 34 100 ug / m 3 32 33 35
dioxide
Sulphur 365 ug / m 3 69 40 32 365 ug / m 3 31 32 32
dioxide
SPM 260 ug / m 3 1047 593 390 260 ug / m 3 389 399 404
RSP 75 ug / m 3 672 502 355 - 349 356 354
Benzene 10 ug / m 3 45 18.5 10 Carcinogenic ϒ 10 N.A. N.A.

*
American Society for Heating, Refrigeration, Air Conditioning Engineers 62-1999 (revised)
**
American Society for Heating , Refrigeration, Air Conditioning Engineers 62-2001 (revised)
#
Below Detectable Level
ϒ Any presence of Benzene is carcinogenic
^
Data validated to August 2005 78
IAQ Results After IAQ Program At PBCTM - STIP
1996 - 2005

Parameter ASHRAE *
1996 1999 2001 ASHRAE **
2002 2004 2005 ^

Standard Standard
(maximum) (maximum)
CO 2
1000 PPM 700 ppm 351 357 362
818 369 358 excess of
Carbon 0.055 ug / m 3 ambient
10 mg / m 3
BDL #
0.072 0.070
monoxide BDL #
BDL #
BDL #

Ozone 100 ug / m 3
100 ug / m 3
BDL #
N.A. N.A.
BDL #
BDL #
BDL #

Formaldehyde 0.4 mg / m 3
0.5 mg / m 3
BDL #
N.A. N.A.
0.156 0.013 BDL #

Lead 1.5 mg / m 3
0.087 BDL #
BDL #
1.5 ug / m 3
BDL #
N.A. N.A.
Nitrogen 100 ug / m 3
100 ug / m 3
20 21 22
dioxide 30 22 22
Sulphur 365 ug / m 3
365 ug / m 3
23 19 19
dioxide 20 28 23
SPM 260 ug / m 3
606 118 94 260 ug / m 3
92 90 82
RSP 75 ug / m 3
218 55 47 - 46 39 37
Benzene 10 ug / m 3 ϒ BDL #
N.A. N.A.
Carcinogenic
18.5 BDL #
BDL #

American Society for Heating, Refrigeration, Air Conditioning Engineers 62-1999 (revised)
American Society for Heating , Refrigeration, Air Conditioning Engineers 62-2001 (revised)
Below Detectable Level
ϒ any presence of Benzene is carcinogenic
79
Air Quality Management – Grow Fresh Air

Sansevieria Trifasciata
Areca Palm
(Bed Room Plant)
(Living Room Plant)

Using toxin removing plants to clean the air

Biotechnology originally developed by NASA, USA and research done by
PBC - STIP on plants suitable for the Delhi climate

80
SME: ADDING VALUE

81
SME’s IN EU

Category Max.# Employees Max. Turnover Euro

m

Medium 249 50

Small 49 10

Smallest 9 2

Wef. January 2005

82
SME’s IN INDIA

The definition of small-scale industries (SSI), is given below

Norms for Definition of SSI in India

Maximum Limit of Investment in plant and machinery in INR m

Year SSI Ancillary

1985 3.5 4.5

1991 6 7.5

1997 30 30

1999 10 10

Source: Ministry of SSI, Govt. of India

INR 10 m =
US $ 227,000
83
Contribution Of SME’s Across Diverse Economies

Country
84
Technology & SSI

To say it in Sam Pitroda’s words

“ Technology is for problem solving at personal, community and national levels

It is about doing things differently
It is about change in mindset, processes, products and preferences
Technology is about opportunities and experiences”

• This is where the SSI is creating a successful niche for itself.

• Technology is empowering people at all levels cutting across sectors

• This has helped India graduate from being a promising economy to one of the
fastest growing economies

85
 SSI Dominant Sectors In India
• Textiles, Knitwear, Garments, Woolen and Hosiery
• Leather and Leather products including footwear and
garments
• Food Processing
• Drugs, Pharmaceuticals and Biotech
• Auto parts and components
• Chemicals, Dyes and intermediaries
• Hand Tools
• Electronic Industry particularly relating to design and
measuring

•Glass and Ceramic items including tiles

•Information Technology and ITES
•Rubber and Plastic Products, Parts & Components
•Bicycle and Bicycle parts
•Foundries – Ferrous and Cast Iron
•Lubricant Manufacturing
•Gems and Jewelry
•Paper and Paper products, Corrugated Boxes

86
SSI Enablers - CLUSTERS

• 350 SSI and 2,000 artisans clusters

• Panipat (Haryana) accounts for 75 % of the total blankets

produced in India

• Tirupur (Tamilnadu) contributes 80 % of the country’s

hosiery exports

• Agra (Uttar Pradesh) produces 150,000 shoes per day

valued at US $ 1.3 m

• Ludhiana (Punjab) produces 95 % of the country’s woolen

knitwear, 85 per cent of country’s sewing machines and
60 per cent of bicycle and bicycle parts

87
SUPPORT FOR SSI

Dedicated Ministry and allied organisations offer

• Policy Support - Reservation, Priority Sector Lending, SEZ, Labor

• Institutional support - Through testing centres, tool rooms,

entrepreneurship development institutes, training, warehousing

• Partnership support - Sub-contracting, ancillarisation & vendor

development

• Marketing Support - Through Trading Houses, Subsidizing the

participation at international Trade Fairs, sales promotion and
business travel

88
Additional Government Initiatives

• Credit Guarantee Fund Trust Scheme

• Collateral free loans of lenders to SSIs up to US $ 58,000

• Payment to SSI suppliers should be made within 120 days

• Reimbursement scheme in respect of ISO 9000 Quality Certification

• Instituting marketing development assistance scheme

89
POLICY FRAMEWORK: Important Features

• Reservation of items for exclusive purchase from SSI

• 358 items reserved for preferential purchase from SSI

• Price preference up to 15 % on Government purchase

• Development of Industrial Estates In selected towns

• Technology : Adoption of new technology

• Technology up gradation of existing units

90
Networking of SSI for Globalization

• The promotion of inter-firm linkages

• Use of Internet: Web Portals like eBay have opened a

new avenue, which the SSI are using as a tool, for marketing

• The increasing presence of Multinational corporations have

opened new opportunities for subcontracting

91
SSI Sector Facilitating Institutions

Technology Support
NSIC, SIDO,
SISIs,RTCs,PPDCs, TBSE
Funding Institutions
Banks, SIDBI, SFCs, Technical Training
SIDCs, NSIC SIDO, SISIs, EDIs, TCOs
, PPDCs, DICss, CFTIs

SSI Sector
Industrial
Infrastructure SIDCs,
SSIDCs, HUDCO
Marketing SIDO,
NSIC,SSIDCs, EPCs
Entrepreneurship Development
SIDO, EDI, NIESBUD, SISIs
Specialized Institutions

92
Contribution Of SSI In India

> 8,000 Products 95% of Industrial Units

35% of National SSI

Exports Over 11 m
An Engine of Growth Units

Over 27 m 7% of GDP
Employed

93
 Growing Competitiveness of SSI

Year Total Registered Unregistered Employment Employment Exports

SSI Units SSI Units SSI Units per Unit US $
(million) (million) (million) (million) (billion)

1998- 99 9.3 1.2 8.1 22 2.4 11

2002- 03 11 1.5 9.5 26 2.4 20

2004- 05 12 2 10 28 2.3 24
(P)

Source: Ministry of SSI

The Average Export per unit is US $ 2,000

94
Growing Productivity & Quality Controls

Year Average Capital Employment Per Unit Production

US $ US $
1993-94 2,100 6.3 17,000

1999-00 3,700 3.6 71,000

Source: Second Census & Sample Survey of 1999-2000 by DC(SSI)

50 % of the total number of ISO 9001 / 14001 certified

units are from the SSI Sector

95
WINNING
ATTITUDE

96
It Is All About Attitude - Management

• Differentiating themselves through the products and services they provide

• Standing out by creating special interfaces with their customers and building
unique ways by which they can be held accountable by them

• Building a very strong quality story

• Benchmarking innovations against well set, globally accepted standards and

aim for targets, creating an environment and culture of innovation within the
organization

• Developing systems to nurture innovation making full use of the availability of

information and by rightful dissemination of knowledge to foster goal driven
innovation

• Building efficient processes to cut time - to- market

• Providing opportunities to their people to do roles that go beyond their

existing work profiles

• Providing continuing education

97
It Is All About Attitude – Business Person

• Need to hone their skills

• More adaptive thinking

• Greater entrepreneurial drive to find new horizons of growth with a competitive

spirit

• Foresight with a fierce unrelenting passion to execute and act today to improve the
future

• Bring change more aggressively and lead the organization to implement

sustainable changes

• Energizing their team and inspiring them for excellent team performance

• Delegating authority to allow people to perform

98
It Is All About Attitude – Business Person

• Ability to reach out to a wide international network for ideas and problem
solving

• Understanding on how things get decided and done

• Using customized strategies to influence specific stakeholders

• Executive maturity and emotional wisdom to respond to others and

embody the aspirations of ones organization

• Inner strength to do the right thing at the right time

• Courageous dedication to super ordinate goals, doing what is right and

what will make India great

• To keep learning and be abreast of new technology

99
Acknow ledgement

PHDCCI – PHD Chamber of Commerce and Industry

CII – Confederation of Indian Industry

FICCI – Federation of Indian Chamber of Commerce and Industry

Assocham – Associated Chamber of Commerce and Industry of India

IGCC – Indo German Chamber of Commerce

IACC – Indo American Chamber of Commerce

ICRIER – Indian Council for Research in International Economic Relations

NASSCOM – National Association of Software and Service Companies

USCAN – Uniting Services Consulting Advocacy and Networking

Paharpur Business Centre – The International Division

100
THANK YOU

101