Overview of Core Sector Industries

in India

BDB India Private Limited

Contents Performance of Core Sector Industries in India…………………………………………………03

Indian Coal sector…………………………………………………………………………………………..04

Indian Crude Oil and Natural Gas sector………………………………………………………….06

Indian Steel sector………………………………………………………………………………………….08

Indian Cement sector……………………………………………………………………………………...09

Indian Electricity sector……………………………………………………………………………….....10

Indian Fertiliser sector……………………………………………………………………………………11

Addendum……………………………………………………………………………………………………..12

Indian Automobile sector……………………………………………………………………...12

Indian Chemical sector…………………………………………………………………………14

Key highlights of Indian Economy…………………………………………………………15

Make in India Initiative………………………………………………………………………. 16

About BDB…………………………………………………………………………………………………....17

Performance of the Core Sector Industries in India

The Core Sector Index, which measures

the output of eight infrastructure sectors,

rose 2.6% in August 2015, compared with

1.1% in the previous month, data released

recently showed. The eight sectors

included in the index are coal, steel,

cement, natural gas, fertilizer, crude oil,

refinery products and electricity.

Seven out of eight sectors included in the

index posted positive growth with natural

gas production finally bouncing back into

the positive zone after many years of

decline reportedly because of falling

output from KG-D6 basin field.

Only steel posted negative growth at -

5.9%, possibly because of a flood of

imports.

The higher core sector output bodes well

for factory output as measured by the

index of industrial production (IIP).

The Core Sector Index has a 38% weight in

the IIP, making it a lead indicator of

industrial production. The combined

Index of Eight Core Industries stands at

167.6 for FY 2014-15, which was 6.0 %

higher compared to the index of FY2013-

2014.

Index of eight Core Industries : Yearly Index

(Base Year : 2004-05 = 100)

Sector 2011-12 2012-13 2013-14 2014-15 Apr-Jul 2014-15

Apr-Jul 2015-16

Coal 141.5 148.1 150.0 162.6 140.9 148.8

Crude Oil 112.1 111.4 111.2 110.2 110.6 109.8

Natural Gas 149.7 128.1 111.5 105.7 107.2 102.6

Refinery Products# 133.7 172.5 175.0 175.7 170.3 176.9

Steel 174.0 181.1 201.9 206.7 212.1 215.1

Cement 175.2 188.7 194.5 205.4 212.8 214.9

Electricity 149.3 155.3 164.6 178.1 181.8 185.5

Fertilizers 103.8 100.2 101.8 101.7 97.5 101.4

Overall index 145.3 154.7 161.2 167.6 166.6 170.1

Growth in the eight Core Industries : Yearly Growth

(Base Year : 2004-05 = 100)

Sector 2011-12 2012-13 2013-14 2014-15 Apr-Jul 2014-15

Apr-Jul 2015-16

Coal 1.3 4.6 1.3 8.4 6.4 5.7 Crude Oil 1 -0.6 -0.2 -0.9 -0.4 -0.7 Natural Gas -8.9 -14.5 -13 -5.2 -5.2 -4.2 Refinery Products# 3.1 29.0 1.5 0.4 -2.3 3.9 Steel 10.3 4.1 11.5 2.4 5.9 1.4 Cement 6.7 7.7 3.1 5.6 11.2 1.0

Electricity 8.1 4.0 6.0 8.2 11.4 2.0 Fertilizers 0.4 -3.4 1.5 -0.1 4.9 4.1 Overall index 5.0 6.5 4.2 4.0 5.5 2.1

# Reportedly, Refinery Products’ yearly growth rate of 2012-13 is not comparable with other years on account of

inclusion of RIL (SEZ) production data since April, 2012.

Indian coal sector :

India currently produces around 89

minerals under different groups like fuel

minerals, metallic minerals, non-metallic

minerals, atomic minerals and minor

minerals.

In India, 80% of mining is in coal and the

balance 20% is in various metals and other

raw materials such as gold, copper, iron,

lead, bauxite, zinc and uranium

Mining industry structure : Government or public sector contributes to 85% of the total value of mineral production which focuses on fuel and metallic minerals whereas private sector contributes only 15% with its main focus on metallic and non-metallic mines.

Coal production trends : India’s coal deficit has increased drastically which has ultimately resulted in increase of coal imports. India is the second largest importer of coal in the world.

Mining clusters in India :

Jharkhand, Chhattisgarh, Odisha, West

Bengal, Maharashtra and MP are the key

states for mining with a coal reserve of

287 billion MT which contributes to 80%

of the total mineral production in India.

With coal demand rising by over 10%

annually, India’s coal imports have risen

at a CAGR of more than 25% during the

last few years.

Indian power sector relies heavily (around

78 per cent) on coal for electricity

generation.

Government Initiatives : Basic Customs Duty (BCD) on bituminous coal is being reduced from 55% to 10%. One-tenth of the expenditure on prospecting, extraction and production of certain minerals during five years ending with the first year of commercial production is allowed as a deduction from the total income. Future outlook of coal mining sector in India :

Coal India Limited has plans to outsource its

underground mines to contract mining

companies having requisite technical expertise.

Over 50 underground new mines of CIL are

expected to be outsourced. In the long term,

underground mining is expected to dominate

open cast mining in India.

Establishment of Coal Regulatory Authority by

FY 2018 - 2020 is an upcoming development

overseen by the mining sector in India.

Moving ahead, MDO type of mining operation

will likely dominate coal production. Several

international companies like BBB, Bucyrus,

BHEC and CODCO have shown interest in

investing into the underground mining sector in

India by teaming up with Indian companies like

AMR, INDU, SCCL and MINOP Innovative etc.

Indian Crude Oil and

Natural Gas sector : The Crude Oil and Natural Gas sector is divided into three major segments : Upstream, Midstream and Downstream. The upstream segment is also known as the Exploration and Production (E&P) segment. Upstream : Crude oil production trails consumption India’s Oil and Gas demand are met by imports which are around 80%. India consumes nearly 5% of the global crude oil consumption. The Indian Oil and Gas sector is traditionally dominated by national oil companies. The key focus area for India’s future upstream sector is to increase the domestic production by encouraging exploration to meet the demand. The introduction of New Exploration Licensing Policy (NELP) has proved to be successful in attracting interest of National Oil Companies as well as private domestic and a few overseas players. Crude Oil The Crude Oil production in 2014-15 (till December 2014) was about 28.171 Million Metric Tonne (MMT). In 2014-15, the share of offshore crude oil production was about 50.2%. The remaining crude oil production was from states like Rajasthan and Gujarat. Crude Oil accounts for about 28% of the total energy basket of the country. Crude oil production has more or less remained stagnant over the last few years; it is expected to increase in coming years with new production wells coming up 2017-18.

Natural Gas Natural gas production in 2014-15 (till December 2014) was about 25.319 Billion Cubic Metre (BCM).

The share of offshore natural gas production in 2014-15 was about 74%. Infrastructure to import greater volumes of LNG is also on the radar. This includes setting up new LNG terminals, raising existing terminal capacity and expanding the gas grid. There are plans to auction 69 small and marginal oil and gas fields to private companies with a new revenue sharing model. Need to tap unconventional resources The Directorate General of Hydrocarbons has estimated the coal bed methane resources to the tune of 92 tcf (2.61 tcm). India’s shale gas reserves stands between 300 tcf (8.5 tcm) and 2,100 tcf (59.5 tcm).

Unexplored Reserves - Hindering the growth of Domestic Production India is the fourth-largest energy consumer internationally, its sedimentary basins remain underexplored and the Oil and Gas production has been relatively stagnant. India has 26 sedimentary basins covering an area of 3.14 million square kilometres. These sedimentary basins are divided into four categories based on their degree of prospectivity. Category 1 Refers to established

commercial production

There are 7 basins under category 1 and deep water areas producing Crude Oil and Natural Gas in India

Category 2 Known accumulation of hydrocarbons but no commercial production as yet

Category 3 Indicated hydrocarbon considered geologically prospective

Category 4 Uncertain potential which may be prospective by analogy with similar

basins in the world

Opportunities in Indian Exploration & Production Sector Unexplored Indian sedimentary

basins

Growing economy and population growth

Surplus refining capacity and natural gas pipeline network

Uniform Licensing Policy and Rights to explore all type of hydrocarbons (conventional and non-conventional

FDI of 100% in Exploration & Production

Supportive Government Policies Refining

The refining industry in India comprises of :

1 Public Sector Undertaking Refineries (PSUs)

2 Private Sector Refineries 3 Joint Venture Refineries The Indian petroleum refining industry comprises of both private and public companies. There are around 22 Refineries in India with total installed capacity of 215 million metric tonnes per annum (MMTPA). Public sector accounts for 19 numbers (including two joint venture refineries) and three belongs to the private sector.

There is a wide gap between private and public sector refiners in respect of product-mix, refining margin, capacity, pricing and market.

Refining clusters

Region Locations

North & Central

Bhatinda, Panipat, Mathura, , Bina

East Barauni, Haldia, Bongaigaon, Guwahati, Digboi, Numaligarh

West Jamnagar, Vadinar, Koyali, Mumbai

South Mangalore, Kochi, Chennai, Tatipaka, Vishakhapatnam

Refining capacity and production trend for last 3 years

Over the years there has been considerable increase in refining capacity in India.

But in 2014 and 2015 there has been no substantial capacity expansion. Private sector refineries grew at CAGR (Compound Annual Growth Rate) of 12.48% from 43.6 to 88.3 MMTPA between 2008 and 2014. The refining capacity of the country is projected to reach 307 MMTPA by end of 2016-17 as per the Draft Report of Working Group on Refinery for 12th Plan. Majority Public Refineries in India have capacity below 10 MMTPA

Private sector refineries are less in number with larger capacities while public sector refineries are more in number with small capacities. Most of the public sector refineries have capacity below 10 MMTPA, whereas all the three private sector refineries have capacity equal to or above 20 MMTPA. Private sector refiners are able to take advantage of scale economies, whereas public sector refiners lag behind in this respect.

Capacity Range

(MMTPA)

Number of refineries Private Sector

Public Sector

Total

0 - 10 - 14 14 10 - 20 - 5 5 20 - 30 2 - 2 30 - 40 1 - 1 Total 3 19 22

Future Outlook

Securing supplies is expected to remain on top of India’s energy agenda for the future.

While exploration activity has taken place on land and in shallow basins across the country, but deep water and ultra-deep water oil and gas resources hold the key to substantially increase domestic production.

Expansions planned for tapping foreign investment in export-oriented infrastructure, including product pipelines and export terminals.

This creates a plethora of opportunities for strategic investors having relevant technical expertise and financial muscle.

Indian Steel sector : The global steel production recorded a marginal growth of 1% to reach 1,665 million MT, over the previous year. The sector contributes to nearly 2% of the country's GDP. Indian Steel sector is likely to grow by 6.2% in 2015 and 7.3% in 2016

Construction, Infrastructure, Capital Goods and Automobiles are the major sectors responsible for steel consumption in the country. While traditional sectors have stronghold in steel consumption; special steel are increasingly being used in engineering industries like Defence, Aerospace, Power Generation and Oil and Gas. Indian steel industry can be broadly classified based on type of producers operational in country. Integrated Steel Producers - Predominantly “Primary Steel Producers” converting iron ore to finished steel through various operations such as refining facilities, rolling facilities etc. A steel producer having a minimum

production capacity of 1 million MT per

annum of crude steel is referred as

“Integrated Producer”.

Secondary Steel Producers –

Primarily mini steel plants which melts scrap or sponge iron to produce steel.

Major Iron ore rich states like Odisha, Chhattisgarh, Jharkhand, and Karnataka house the maximum number of Integrated Steel plants.

States like Maharashtra, Gujarat and NCR region, along with iron rich states is dominate the secondary steel producers and rolling mills scene.

Steel production in India

In 2014 - 15, production of total finished

steel (Alloy + Non Alloy) was 91.46 million

tonnes registering a growth of 3% over 2013

- 14.

India remained the largest producer of Sponge Iron (or DRI) in the world with a total production of 20.38 million MT.

The production of Pig Iron for sale stood at 9.7 million MT showing a growth of 22% over previous fiscal year. Imports and exports of Steel

India, a net importer of total finished steel since 2007 - 08 turned into a net exporter in 2013 - 14. However, during last fiscal year, India again became a net importer. India can freely import and export Iron and Steel. Government plans to set up four steel plants, the first state owned greenfield projects in steel sector since almost last four decades. Steel Ministry is facilitating setting up of “Steel Research & Technology Mission of India” (SRTMI) in association with public and private sector companies to boost research & development activity in the iron and steel sector. Along with China, imports from Japan and South Korea continue to bog down the Indian market. Central government has announced to impose a 20% safeguard duty on import of certain category of steel. India imported 15 million MT of iron ore in FY 2015 due owing ban on mining activities and declining global prices.

Indian Cement Industry :

India is the second largest cement producing country in the world after China with a production capacity of ~ 400 MMTPA.

India’s cement industry is playing a key role in the Indian economy by providing employment directly or indirectly.

The cement demand in India comes from four major segments - housing, infrastructure, commercial and industrial sector.

Industry structure

Indian cement industry is dominated by the private sector which contributes around 98% of total capacity. The top 20 cement companies account for almost 70% of the total cement production of the country.

The Indian cement industry consists of 188 large plants (installed capacity of 378.3 MTPA) and 365 small plants (installed capacity of 11.7 MTPA). A State like Andhra Pradesh has around 26 large cement plants followed by Tamil Nadu with 18 cement plants and Rajasthan with 17 cement plants. Current and future technological trends With modernisation and assimilation of state-of-the-art technology, Indian cement plants are today most energy-efficient and environment-friendly and are comparable to the best in the world in terms of kiln size, technology, energy consumption or environment friendliness. Presently, about 99% of the total capacity in the industry is based on modern and environment-friendly dry process technology. Cement industry has also taken efforts to utilise waste heat recovery in the plants.

Major investments

Cement and gypsum products attracted foreign direct investment (FDI) of around US$ 3,100 million between April 2000 and December 2014.

Government initiatives

The Government of Tamil Nadu has launched low priced cement branded 'Amma' Cement. The sale of the cement started in Tiruchi at Rs 190 (US$ 3.05) a bag through the Tamil Nadu Civil Supplies Corporation (TNCSC).

The Government of India has decided to adopt cement instead of bitumen for the construction of all new road projects on the grounds that cement is more durable and cheaper to maintain than bitumen in the long run.

The all India cement capacity utilisation is likely to improve from 71% in FY15 to 72% in FY16 to 77% in FY17.

Delays in project execution and project commissioning may result in higher capacity utilisation levels.

The market is expected to grow at a CAGR (Compound Annual Growth Rate) of 8.96% during the period 2015 - 2019.

Indian Electricity sector : Energy is one of the major drivers of a growing economy like India and is an essential building block of economic development. In FY15 the power generation grew by 8.4% YoY and the peak deficit was down to 3.5% in FY15 from 4.5% in FY14. This was due to increase in coal availability at majority of the power stations and installed power capacity. India’s total installed power generation capacity as on 31 May 2015 was 272,503 MW.

During the year FY15 there were a few key reforms Announced. Below are few of them : 1 Reallocation of coal blocks through

e-auction Process

2 New gas pooling mechanism to bailout 14,000 MW of stranded power plants

3 New Ultra Mega Power Project (UMPP) policy to approach plug and play model

Reallocation of coal blocks through e-auction process has addressed the uncertainty of coal supply for existing and upcoming power plants. The e-auction has been done in a phased manner.

Renewable energy is fast emerging as a major source of power in India. Wind energy is the largest source of renewable energy in India. It accounts for an estimated 60% of total installed capacity (21.1GW).

There are plans to double wind power generation capacity to 40GW by 2022. India has also raised the solar power generation capacity addition target by five times to 100GW by 2022. With many bilateral nuclear agreements in place, India is expected to become a major hub for manufacturing nuclear reactors and associated components. Foreign participation in the development and financing of generation and transmission assets, engineering services, equipment supply and technology collaboration in nuclear and clean coal technologies is also expected to increase. The government is keen on promotion of hydro, renewable and gas-based projects, as well as adoption of clean coal technology.

Overall outlook

Power remains one of the most critical

components of infrastructure affecting

economic growth of the economy. The

Government has planned to provide

affordable 24x7 power for all homes,

industrial and commercial establishments

and adequate power for farms by 2019.

Along with generation, the Government

has also increased its focus on the

Transmission & Distribution space which

is likely to help in improving PLF levels,

improving financial health of SEB’s and

reducing Transmission losses.

Government is also focusing on the

manufacturing sector through its flagship

initiative Make in India. This is likely to

drive the demand high.

69.5%

15.3%

13.1%

2.1%

SOURCES OF POWER WITH SHARES IN TOTAL INSTALLED CAPACITY

Thermal Hydro Renewable Nuclear

Indian Fertilizer Sector :

Introduction

Importance To Economy

Size of the

Industry

57 large size and 64 medium and

small size chemical fertilizer

production units in India

Type of

Fertilizers

Urea, DAP, Complex Fertilizer,

Ammonium Sulphate and calcium

ammonium nitrate are produced in

India

Sector type Allied sector of Agriculture

Global Ranking

Production 3rd largest producer of nitrogenous

fertilizer

Consumption 2nd largest consumer of fertilizers

Production and consumption of fertilizer in India

India has 30 manufacturing units of urea with an Installed capacity of 21.6 million MT.

India is meeting 80% of its urea requirement through Indigenous production but is largely import dependent for its requirements of phosphatic and potassic (P & K) fertilizers either as finished fertilizers or raw materials.

In India, complex fertilizer is produced by public sector, cooperative sector and private sector players. Indian Fertilizer Industry clusters

Region Locations

North Uttar Pradesh, Punjab, Rajasthan & Madhya Pradesh

West Gujarat & Maharashtra

South Andhra Pradesh, Tamil Nadu, Kerala & Karnataka

East West Bengal, Assam, Orissa & Chhattisgarh

The Indian Fertilizer Industry is facing following challenges : 1 Allocation of gas to the sector 2 Reduce dependency on imports of

Urea, potash and phosphates 3 Improving operating margins 4 Preventing excessive use of Urea 5 Reducing mounting pressure of

subsidy on Government Government Initiative : New fertiliser policy to reduce to the urea import dependency : The policy aims at maximizing urea production from the urea units including through conversion of non-gas based units to gas, and encouraging investment in joint venture projects.

It is also aimed at establishing a more efficient urea distribution system in order to ensure availability of urea in the remotest corners of the country.

This may help in bridging the widening demand-supply gap to large extent and reduce dependence on the imports of the urea.

Removal of restriction on neem-coated urea production to improve the margin : The government has taken steps to encourage production and availability of coated urea in the country.

ADDENDUM

Indian Automobile sector : Indian automobile market can be divided into following segments :

The automotive industry today

contributes approximately 22 % to the

country’s manufacturing Gross Domestic

Product (GDP).

In recent years, India has witnessed increasing investments in R&D and geographic expansion from global automotive manufacturers.

Considering the automotive industry ranked 6th in attracting FDI equity, with a cumulative inflow of approximately INR 681 Billion from April 2000 - April 2015, successful formulation and changes in policies have also been made by the government to support the industry.

The automobile sector registered a growth of 7.22 % over the same period last year by producing 23 Million vehicles. The overall auto exports have also risen 14.89% with PVs, CVs, three-wheelers and two-wheelers up 4.42%, 11.33%, 15.44% & 17.93% respectively. This performance is much higher than the shipments in FY2013-14. Indian automobile industry clusters

Current and future technological trend In the coming decade, the Indian automotive industry will witness increased thrust on green vehicles, on the back of rising fuel consumption and costs, and heightened awareness on environmental issues. Customer-driven demands for cost-effective vehicles and enhanced in-vehicle experience will lead to technological innovations as also introduction of innovative features in vehicles. Going forward, OEMs will increase thrust on developing smaller engines, driven by rising fuel prices and the expected introduction of more stringent emission control norms without compromising on performance. The larger engines are being replaced by smaller engines with a turbocharger

Government initiatives To take ahead the 'Make in India' campaign, a new Automotive Mission Plan (AMP) 2026 has been decided by the automotive sector and the Government of India. Some of the key highlights of the Automotive Mission Plan 2026 are as follows : Indian automotive industry to

grow 3.5 to 4 times of the current value of USD 74 billion to USD 260 to 300 billion.

By 2026, passenger vehicles likely

to increase between 9.4 - 13.4 million units, commercial vehicle between 2.0 - 3.9 million units, two wheeler to grow to 50.6 - 55.5 million, and tractors to 1.5 - 1.7 million units.

Contribute over 12% to India's

GDP and Generate 65 million more jobs.

The industry will look to increase exports multifold to reach 35-40 % of overall output.

BS-V norms to be adopted by 2019

and BS-VI norms to be implemented 2023 for passenger vehicle.

Auto Component to grow to

Rs 593,500 crore - Rs 732,000 crore.

The national mission for electric

mobility 2020

The objective is to encourage reliable, affordable and efficient EVs (hybrid and electric vehicles) that meet consumer performance and price expectations through government industry collaboration. It shall also help in promotion and development of indigenous manufacturing capabilities, required infrastructure, consumer awareness and technology - thereby helping India emerge as a leader in the two-wheeler and four-wheeler EV market in the world by 2020 and contributing towards national fuel security.

Indian Chemical sector :

Indian chemical industry comprises of both small scale as well as large scale units.

The industry can be classified as bulk chemicals, speciality chemicals, agro chemicals, petrochemicals and fertilisers. Bulk chemicals is the largest followed by agro chemicals and specialty chemicals. Specialty chemicals is the fastest growing segment followed by bulk chemicals.

The large scale units are able to set up capital intensive projects with long gestation periods. While the fiscal incentives provided to small scale units earlier led to development of large number of small and medium enterprises (SME).

Over the last 5 years Indian chemical industry has started to evolve rapidly. The Indian chemical and petrochemical industry currently stands at USD 118 Bn and is expected to grow at a CAGR of 8% for the next five years.

The share of this sector in the manufacturing GDP is around 15% and it accounts in the tune of 9% of total exports.

Bulk chemicals form the largest sub-segment of Indian chemical industry with 40% market share whereas specialty chemicals with 19% market share is the fastest growing segment.

States like Gujarat, Maharashtra, Uttar

Pradesh, West Bengal, Himachal Pradesh,

Tamil Nadu and Andhra Pradesh

contributes significantly for the chemical

& chemical products in terms of Output.

The current low per capita consumption across industries and segments and strong growth outlook for the key end use are the key growth drivers for this industry.

The Government has set an ambitious plan of increasing the share of manufacturing GDP from 16% to 25% by 2022. The R&D intensity of Indian companies has been limited, but it is expected that R&D investment for companies in India is expected to grow above 2% of their revenues thereby bridging the competitive gap to a certain extent.

Strong end use industry growth is expected to boost demand of the chemical products and thereby creating an opportunity for chemical companies to grow.

Strong outlook for chemical demand is likely to result in significant investment in capacity additions and hence import substitution. For increasing local production it requires global competitiveness to withstand imports as well as for exports of surplus.

Key success factors needed are availability of feedstock at competitive cost, value chain access, access to advanced technology and low cost capital, investments in R&D and talent development.

India is today seen as a growth market for large MNCs who are looking to expand in Emerging markets.

Indian government has set ambitious plans to set up Petroleum Chemicals & Petrochemicals Investment Regions (PCPIR) in Gujarat, Andhra Pradesh, West Bengal and Odisha to accelerate country’s industrial growth. Future Prospects & Investment Opportunities

Some of the few below investment opportunities can be looked at :

Indian companies can either explore alternate feedstock or invest in setting up plants in resource rich nations to secure feedstock

Companies may invest in exploring the right product mix to be competitive & profitable using the available feedstock in India i.e. Naphtha & its derivatives capital or access to international market by taking advantage of increasing expansion of western companies in India

-- Indian companies may look at exploring possibilities of merger, JV opportunities for technology,

-- Exploring opportunities that exists

in segments like Speciality

Chemicals, Speciality Polymers for

catering to emerging domestic

demand as well as a manufacturing

hub.

Key highlights of Indian

Economy :

The Indian Economy has emerged as one of the largest economies with a promising economic outlook on the back of controlled inflation, rise in domestic demand, increase in investment, decline in oil prices and reforms. GDP indicators

GDP indicators 2013-14 2014-15

GDP (constant prices (INR crore)

9,921,106 10,656,925

Growth (In %) 6.9 7.4

GVA at basic prices (2011-12 prices) (INR Crore)

9,169,787 9,857,672

Growth (In %) 6.6 7.5

GDP performance in 2014–15 from the demand side (comprising consumption, investment and net exports) On the demand side, growth of private final consumption increased to 7.6% in 2014–15, from 6.5% in 2013-14

The fixed capital formation in the economy has picked up growth. Gross fixed capital formation increased from 3.0% in 2013-14 to 4.1% in 2014–15.

Exports in 2014–15 recorded a growth of 0.9% as compared to 7.3% in 2013-14. Imports, on the other hand, increased from -8.4% in 2013–14 to -0.5% in 2014–15, primarily due to the sharp decline in international oil prices in the current year that compressed the oil import bill. Inflation and monetary policy The average Wholesale Price Index (WPI) inflation declined in 2014–15 to 3.4% (April-December), vis-à-vis 8.9% in 2013-14, as fuel has witnessed a sharp decline in prices.

Food price inflation also moderated to 4.8% during April-December 2014 as compared to 9.4% in 2013–14. Average retail inflation, measured by Consumer Price Index (CPI), moderated to 6.3% in 2014-15 (April-December) from 9.5% in 2013–14. Due to tightening of monetary policy last year has helped in containing demand pressures, creating a buffer against external shock and keeping volatility in the value of the rupee under check. During the last one year, the rupee remained relatively stable vis-à-vis the currency of peer emerging countries, which too had a sobering influence on inflation. With the easing of inflationary conditions, the RBI signalled softening of the monetary policy stance by cutting policy repo rates by 25 basis points (bps) to 7.75% in January 2015. Subsequently, the RBI also reduced the statutory liquidity ratio (SLR) by 50 bps from 22.0% of net demand and time liabilities (NDTL) to 21.5%. GDP outlook for 2015-16 The macroeconomic situation in India has improved significantly during the current year. Also, acceleration in services and manufacturing growth in the face of subdued global demand conditions point to the strengthening of domestic demand. However, concerns surrounding the construction and mining activities in the country still exist. Agriculture also suffered due to poor monsoon, but there are no indications of its spill over to the next year. In the light of the government’s commitment to reforms, the outlook for domestic macroeconomic parameters is generally optimistic and a growth of around 8.5% is in the realm of possibility in 2015- 16.

Make in India Initiative : Make in India is an initiative programme of the Government of India to encourage multinational and domestic companies to manufacture their products in India. The major objective behind the initiative is to focus on 25 sectors of the economy for job creation and skill enhancement. The government has set an ambitious target of increasing the contribution of manufacturing output to 25% of Gross Domestic Product (GDP) by 2025, from 16% currently. The 25 sectors identified includes Automobiles, Chemicals, IT, Pharmaceuticals, Textiles, Ports, Aviation, Leather, Tourism & Hospitality, Wellness, Railways, Design Manufacturing, Renewable Energy, Mining, Bio-technology and Electronics. The version 1.0 included steps like relaxation in foreign equity caps in various sectors, application for licenses was made available online and the validity of licenses was increased to three years. Since the start of the Make in India initiative. Regulations and approval processes have been eased; 100% foreign direct investment (FDI) have been allowed in all 25 sectors, except Space (74%), Defence (49%) and news media (26%); various schemes have been started to support start-ups, and other pro-industry policy measures are expected in the labour intensive sectors where India has been lagging behind. The government is now all set to launch version 2.0 of this high-profile initiative. While the first level focused on easing processed to help businesses, Part two is aimed at turning it into ‘a people’s movement ‘ on the lines of the Swadeshi movement. An analysis of the past 12 months shows that the Make in India initiative is indeed working.

The Government of India has received investment proposals of over Rs 1, 10,000 crore (US$ 16.56 billion) in the last 12 months from a host of companies across industries. India has become one of the most attractive destinations for investments in the manufacturing sector. With a hard focus on the manufacturing sector, the government is trying to upgrade the skills of its workforce. Taking a cue from countries such as Japan and Germany, known for their top-quality manufacturing. The Government is starting an investor outreach programme with several countries to bring global best practices in India so as to achieve world standards and be a part of the global supply chain. The government recently launched make in India Mittelstand, a business support programme for 30 ‘high-potential’ German companies to invest in India. Global manufacturing is in turmoil with the low cost model of last two decades coming under pressure. China’s competitiveness is eroding. Brazil seen as one of the most competitive 10 years ago is becoming a high cost country. This turmoil provides a unique opportunity for India to become among the top 3 manufacturing players in the world. Make in India has changed the mind sets-both inside and outside the country. Various states were mobilised and the results are showing. For instance, a ‘Make in North-east’, initiative has been planned. The Uttar Pradesh government has secured investment deals valued at Rs 5,000 crore for setting up mobile manufacturing units in the state and Maharashtra has cleared land allotment for 130 industrial units across the state with an investment of Rs 6,266 crore. The Automobile Industry is an important sector in the ‘Make in India’ initiative, and has been identified as one of the 25 thrust sectors outlined for growth. Several auto majors have rolled out their plans to be part of the initiative.

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The marketplace is the interface between product and consumer. All market and customer driven

business enterprises therefore tailor their strategy, based on the marketplace. As commercial

enterprises have to be market and customer driven, BDB’s cutting edge inputs to our clients have

always resulted in their meeting or exceeding their growth targets and market-leadership aims.

Business research and Strategy is an intricate, involved and specialised subject and specialization

cannot be mass produced. Every specialization needs expertise, dedication, commitment and

enthusiasm. And at BDB, we pursue our specialization with a passion. We have constituted a fine

team, whose talent and honesty of purpose is beyond compare.

Researching the market thoroughly, profiling existing customers and potential customers, analysis of

product differentiation, technology evaluation, re-evaluating customer needs and creating new

markets are important steps towards success. Conversion of these needs into demand and creating an

appropriate market interface can lead to sales growth and larger market share.

The best result oriented strategy specifically tailored for our clients and for specific product range,

requires intricate market research and intimate knowledge about the working of the market place.

Our methodology of studying the markets in-depth involves primary research of the stakeholders –

buyers, end users, OEMs, consultants, channel partners, competitors, EPC contractors – the entire

value chain. The findings are then analysed leveraging our years of experience.

Thanks to the faith entrusted in us by many globally leading multinational companies as well as

Indian business groups over quarter of a century; today BDB can carry out in-depth market analysis to

map potential opportunities. BDB, an ISO certified company is uniquely qualified, experienced and

equipped to design a failsafe growth plan that will achieve business growth.

BDB’s unique strategy developing expertise, based on in house market research, includes sectors such

as electrical industry, process industry, automotive industry, machine tool industry, metallurgical

industry, plastics and composites industry, HVAC industry, construction machinery industry, farm

equipment industry, industrial chemical sector, agrochemical industry, pharmaceutical & healthcare

sector, domestic appliances market, international markets as well as qualitative studies involving

customer satisfaction measurement and monitoring in the industrial eco-system.

Business verticals