India Buisness Opportunity

8/6/2019 India Buisness Opportunity

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• The total wealth of India has tripled in a decade to $3.5 trillion and is expected to double again in

the next 5 years (source: Credit Suisse)

• 1.1 million jobs were created in India in 2010 and this year will see 12.9% salary hike for the

employed according to Aon Hewitt, a global HR consultancy group

• The urban-household income would top $4 trillion in next 20 years (US Dept. of Commerce)

• The Population is expected to be over 1.50 billion by 2050 from the current 1.16 billion; the number

of people living in the cities will increase to 590 million by 2030 from the current 340 million, and

180 million new workers will get added into India’s work force by 2030.

• By 2020, additional 800 universities and 35,000+ colleges are required to enable the targeted 46

million children to avail college education

• The Boston Consulting Group sees a shortfall of 200,000 engineers, 400,000 other graduates and

150,000 vocationally trained workers in the coming years.

• There is only 1 doctor for every 1700 people in India and 1 nurse for every 1250 people

• 40% of fruits and vegetables produced in India goes wasted

• India added 18.99 million mobile phone connections in January 2011 alone taking the total figure to

771.18 million

• Only 3% have insurance of any kind and less than 1% of Indians participate in Indian stock market

India Business Opportunities• india business opportunities

Driven by a growth rate of over 8% in 2010 and a 350 million strong middle-class with increasing

purchasing power, the Indian market today is reshaping the world’s economy. India’s GDP crossed thetrillion dollar mark in 2007 and is currently in 4th position (PPP) after US, China and Japan. Investment in

almost every sector (Education, Food, Energy, Health Care and Retail) of the Indian economy has a promise

of high returns that has caught the attention of investors and businesses across the world. Considering that

restaurants keep you waiting, malls are packed, movie theatres are full, and airlines and hotels are over-

booked showcase the increasing appetite of the Indian consumer. As an example, recognizing that Indian

youths strongly favor branded clothes, Levis introduced a special brand ‘Spykar’ for India that is a runaway

success.

So far only Multi National Companies (MNCs) with their vast resources, know-how and the right connections

have been the major beneficiaries of this phenomenal growth in India. Small and Medium Enterprises

(SMEs) and Entrepreneurs are just becoming aware of the growth story of India.

A simple analysis, taking into account the increasing population (See side box), growing consumption and

the shrinking agricultural land, shows that there is a very lucrative market for US companies with products

or technologies in the following areas:

• Food & Beverages: food processing, food packaging, food warehouse and transport, health drinks,

etc.

http://www.entryindia.com/taxonomy/term/179

http://www.entryindia.com/taxonomy/term/179



• Home based: home décor products, kitchenware essentials, bed and bath, etc.

• Healthcare: diagnostics and testing, medical equipment, health supplements, clean air and water

products, etc.

• Education: medical/nursing, ‘train the teacher’ programs, automotive mechanics, medical

technicians, advanced courses in the upcoming fields of genetics and nanotechnologies. For humanresource and skill requirements in the healthcare services industry, your can download a full report

by National Skill Development Corporation of India at entryindia.com/files/Healthcare/healthcare.pdf

• Consultancy Services: engineering, business development, product development, security analysis,

etc.

• Infrastructure: waste management, solar and wind technologies, temperature controlled

warehouses, air and noise pollution control technologies, towing trucks, and automated parking lot

equipment.

Similar business prospects abound in other sectors such as home land security, media & entertainment,

hotel/motel, financial investment services, etc.

One of the business formats that is rapidly gaining acceptance is "Franchising" which is growing at a rate of

30% annually. While legal infrastructure and ecosystem are in place in India, one must do a thorough

research, and due diligence of the potential Franchisee and create binding agreements covering all

important aspects of the Franchising before making any investments. One must also understand business

norms of India and seek professional help in navigating the paper trail, IP protection, and Tax implications

etc. before undertaking partnership agreements with the Franchisee. Top sectors with franchising

opportunities are Education and Healthcare due to a huge mismatch between supply and demand now and

in the coming years. You may want to take advantage of the fact that US Commercial Service (Dept. of

Commerce) regularly takes Trade Missions of US Franchisors to India.

Another popular model is Public Private Partnership (PPP) with the Government of India through a ‘tender’

process. In the Infrastructure sector, for example, India is expected to invest $1.2 trillion in revamping or

upgrading its ports, roads, bridges, energy plants, etc. Again the US Commerce Service can be instrumental

in making the opportunities in this area available to US companies in a timely fashion and help with

responding to the RFPs and with the required paperwork.

All of the above present a historic opportunity for the SMEs and Entrepreneurs in the US to expand beyond

borders to India. US companies with the right know-how have almost unfair advantage for success for

several reasons:

• President Obama’s National Export Initiative has set a target of doubling US exports to $2 trillion by

2015. To meet this objective, the US Administration has initiated huge incentives to support USexports. Commerce Dept.'s International Trade Administration (ITA) budget is raised by 20 percent

to $534 million and 300 international trade specialists are added to help US companies export US

goods and services.

• Indians have a very favorable view (76%) of the US according to a Global Attitudes Survey. Indian

Government officials make regular visits to the US to meet with the industry experts and to promote

business and trade opportunities.

http://www.entryindia.com/files/Healthcare/healthcare.pdf)





• The government of India offers multiple incentives to US companies doing business in India.

Government incentives include duty free import of capital goods and raw materials, reimbursements

of Central Sales Tax, Tax holiday for specified period, 100 per cent repatriation of profits for

subcontracting facilities and more.

The following are some selected resources to begin your India strategy:1. Reports

a. US Commercial Service’s ‘Country Commercial Guide’ on India: buyusa.gov/ india /en/ccg2010.doc

b. McKinsey Global Institute’s report on India’s urbanization at

mckinsey.com/mgi/reports/freepass_pdfs/india_urbanization/MGI_india_urbanization_fullreport.pdf

2. Websites

a. US Commercial Service: buyusa.gov/ india /en/

b. India Brand Equity Foundation: ibef.org

c. India: Data, Projects and Research by World Bank: worldbank.org.in/

d. entryindia.com for information and services for SMEs and Entrepreneurs

3. India Business and Travel Guide, indiabusinessandtravelguide.com

http://www.buyusa.gov/india/en/ccg2010.doc

http://www.mckinsey.com/mgi/reports/freepass_pdfs/india_urbanization/MGI_india_urbanization_fullreport.pdf

http://www.buyusa.gov/india/en/

http://www.ibef.org/


http://www.worldbank.org.in/

http://www.entryindia.com/

http://indiabusinessandtravelguide.com/

http://www.buyusa.gov/india/en/ccg2010.doc

http://www.mckinsey.com/mgi/reports/freepass_pdfs/india_urbanization/MGI_india_urbanization_fullreport.pdf

http://www.buyusa.gov/india/en/


http://www.worldbank.org.in/

http://www.entryindia.com/

http://indiabusinessandtravelguide.com/



MACRO ECONOMIC INDICATORS

Population 1.21 billion

Gross Domestic Product (GDP) during 2010-11 US$ 1,597.5 billion

Gross National Income (GNI) during 2010-11 US$ 1,584.2 billion

Per Capita Income in 2010-11 US$ 1226.4

Overall Industrial growth (March 2011) 7.3 per cent

Forex Reserves ( for the week ended June 10,2011 ) US$ 310.50 billion

Amount of FDI inflows during 2010-11 (April 2010-March 2011) US$ 19.4 billion

Cumulative amount of FDI inflows (August 1991 toMarch 2011) US$ 146.3 billion

Exchange rate INR/1 USD (as on June 21, 2011) 44.9

Exports

April 2011US$ 23.8 billion

Imports

April 2011 US$ 32.8 billion

Average literacy rate (census 2001) 64.8%

Life expectancy for males 63.9 years

Life expectancy for women 66.9 years



India at a glance

Area : 3.3 Million sq. kmLocation: The Indian peninsula is separated from mainland Asia by the Himalayas. The Country issurrounded by the Bay of Bengal in the east, the Arabian Sea in the west, and the Indian Ocean to thesouth. India occupies a major portion of the south Asian subcontinent.

Geographic Coordinates: Lying entirely in the Northern Hemisphere, the Country extends between 8°4' and 37° 6' latitudes north of the Equator, and 68°7' and 97°25' longitudes east of it.

Indian Standard Time: GMT + 05:30

Telephone Country Code: +91

Capital: New Delhi

Border Countries: Afghanistan and Pakistan to the north-west; China, Bhutan and Nepal to the north;Myanmar to the east; and Bangladesh to the east of West Bengal. Sri Lanka is separated from India

by a narrow channel of sea, formed by Palk Strait and the Gulf of Mannar.Coastline : 7517 km encompassing the mainland, Lakshadweep Islands, and the Andaman & NicobarIslands.

Climate: The climate of India can broadly be classified as a tropical monsoon one. But, in spite of much of the northern part of India lying beyond the tropical zone, the entire country has a tropicalclimate marked by relatively high temperatures and dry winters. There are four seasons - winter(December-February), (ii) summer (March-June), (iii) south-west monsoon season (June-September),and (iv) post monsoon season (October- November)

Terrain: The mainland comprises of four regions, namely the great mountain zone, plains of the Gangaand the Indus, the desert region, and the southern peninsula.

Natural Resources: Coal, iron ore, manganese ore, mica, bauxite, petroleum, titanium ore, chromite,natural gas, magnesite, limestone, arable land, dolomite, barytes, kaolin, gypsum, apatite,

phosphorite, steatite, fluorite, etc.Political Profile

Country Name: Republic of India ; Bharat Ganrajya

Government Type: Democratic Republic with a Parliamentary system of Government.

Administrative Divisions : 28 States and 7 Union Territories.

Constitution: The Constitution of India came into force on 26th January 1950. The Constitution of India is the fountain source of the legal system in the Country.

Executive Branch: The President of India is the Head of State, while the Prime Minister is the Head of the Government and runs office with the support of the Council of Ministers who forms the Cabinet.

Legislative Branch: The Federal Legislature comprises of the Lok Sabha (House of the People) and theRajya Sabha (Council of States) forming both the Houses of the Parliament.

Judicial Branch: The Supreme Court of India is the apex body of the Indian legal system, followed byother High Courts and subordinate Courts.

National Days:

• 26 th January (Republic Day)

• 15 th August (Independence Day)

• 2 nd October (Gandhi Jayanti; Mahatma Gandhi's Birthday)



Demographic Profile

Population (Census 2011): 1210.19 Million

Males : 623.72 Million,

Females : 586.46 Million)

Birth Rate (2001 census): 24.8 PercentDeath Rate (2001 census): 8.9 Percent

Density of Population (Census 2011) : 382 Persons per square kilometer

Life expectancy at Birth (As of September 2005) :

Males : 63.9 Years,

Females : 66.9 Years

Ethnic Groups: All the five major racial types - Australoid, Mongoloid, Europoid, Caucasian, andNegroid find representation among the people of India.

Religions: According to the 2001 census, out of the total population of 1,028 million in the Country,Hindus constituted the majority with 80.5%, Muslims came second at 13.4%, followed by Christians,Sikhs, Buddhists, Jains, and others.

Languages: There are 22 different languages that have been recognised by the Constitution of India,of which Hindi is an Official Language. English has by law been designated the language for officialpurposes.

Literacy Rate (Census 2011): 74.04 Percent

Males: 31.98 Percent,

Females: 49.10 Percent



Advantage India

• World's largest democracy with 1.2 billion people.

• Stable political environment and responsive administrative set up.

• Well established judiciary to enforce rule of law.

• Land of abundant natural resources and diverse climatic conditions.

• Rapid economic growth: GDP to grow by 8.5% in 2010-11* and 9.0% in 2011-12.

• India's growth will start to outpace China's within three to five years and hence will becomethe fastest large economy with 9-10% growth over the next 20-25 years (Morgan Stanley).

• Investor friendly policies and incentive based schemes.

• Second most attractive Foreign Direct Investment (FDI) location in the world: India received a

total of US$ 25.9 billion of FDI in 2009-10.• Healthy macro-economic fundamentals: Investment rate is expected to be 37% in 2010-11

and 38.4% in 2011-12 while Domestic Savings rate is expected to be 34% in 2010-11 and36% in 2011-12.

• India's economy will grow fivefold in the next 20 years (McKinsey).

• Cost competitiveness; low labour costs.

• Total labour force of nearly 530 million.

• Large pool of skilled manpower; strong knowledge base with significant English speakingpopulation.

•

Young country with a median age of 30 years by 2025: India's economy will benefit from this"demographic dividend".

• The proportion of population in the working age group (15-59 years) is likely to increase fromapproximately 58% in 2001 to more than 64% by 2021.

• Huge untapped market potential.

• The urban population of India will double from the 2001 census figure of 290m toapproximately 590m by 2030 (McKinsey).

• Progressive simplification and rationalization of direct and indirect tax structures.

• Reduction in import tariffs.

• Full current account convertibility.

• Compliance with WTO norms.

• Robust banking and financial institutions.

"* India's financial year is from April to March. 2010-11 above means April 2010-March 2011."



Indian Economy

India has undergone a paradigm shift owing to its competitive stand in the world. The Indian economyis on a robust growth trajectory and boasts of a stable annual growth rate, rising foreign exchangereserves and booming capital markets among others.

Indian economy is estimated to grow at 8.6 percent in 2010-11 as compared to the growth rate of 8.0percent in 2009-10. These GDP figures are based at factor cost at constant (2004-05) prices in theyear 2010-11.The growth rate of 8.6 per cent in GDP during 2010-11 has been due to the robustgrowth rates of over 8 per cent in the sectors of manufacturing, construction, trade, hotels, transportand communication, financing, insurance, and, real estate and business services. Agriculture sectorregistered a growth rate of 5.4 percent in 2009-10. A growth rate of 18.3 percent is estimated for GDPat current prices in the year 2010-11.

Agriculture Sector

The agriculture, forestry and fishing sector is likely to show a growth of 5.4 per cent in its GDP during2010-11, as against the previous year’s growth rate of 0.4 per cent.The estimate of GDP fromagriculture in 2010-11,according to the Department of Agriculture and Cooperation (DAC),productionof foodgrains and oilseeds is expected to grow by 6.5 per cent and 11.9 per cent, respectively, ascompared to the previous agriculture year. The production of cotton and sugarcane is also expected torise by 41.2 per cent and 15.2 per cent, respectively, in 2010-11. Among the horticultural crops,production of fruits and vegetables is expected to increase by 4.1 per cent and 3.8 per cent,respectively, during the year 2010-11.

Industry Sector

The growth in GDP for mining and quarrying and manufacturing sectors during 2010-11 is expected tobe 6.2 and 8.8 percent respectively over previous year. According to the latest estimates available onthe Index of Industrial Production (IIP), the index of mining and manufacturing registered growthrates of 8.0 per cent and 10.0 per cent during April-November, 2010. The estimated growth rate forconstruction sector is 8.0 percent in 2010-11. The key indicators of construction sector, namely,cement production and steel consumption have registered growth rates of 4.4 per cent and 8.8 percent, respectively during April- December, 2010.

Services Sector

The estimated growth in GDP for the trade, hotels, transport and communication sectors during 2010-11 is placed at 11.0 per cent, mainly on account of growth during April- November, 2010-11 of 14.9per cent in passengers handled in civil aviation , 21.3 per cent in air cargo handled and 40.9 per centin stock of telephone connections. The sales of commercial vehicles witnessed an increase of 34.1 percent per cent in April-December, 2010. The financing, insurance, real estate and business servicessector is expected to show a growth rate of 10.6 per cent during 2010-11, on account of 14.0 per centgrowth in aggregate deposits and 22.6 per cent growth in bank credit during April- November 2010(against the respective growth rates of 18.6 per cent and 10.1 per cent in the corresponding period of previous year). The growth rate of community, social and personal services during 2010-11 isestimated to be 5.7 per cent



INVESTMENT

POTENTIAL FOR INVESTMENT IN INDIA• India presents a vast potential for overseas investment and is actively

encouraging the entrance of foreign players into the market. India is also one of the few markets in the world, which offers high prospects for growth andearning potential in practically all areas of business.

• According to the Federation of Indian Export Organisations (FIEO) , thecountry's exports would cross USD 300-billion in 2011-12."In FY 11, exportstouched USD 246-billion and we expect it to reach the USD 300-billion mark inFY 12. Asia, Latin America and Caribbean (LAC) region and Africa have been themain contributors to this growth," FIEO President, Ramu Deora, said.Also, thesigning of Comprehensive Economic Cooperation Agreement (CECA) and Free

Trade Agreement (FTA) with Asian countries is expected to raise Asia share inour exports to 55 per cent by 2014, he said.

• India's petroleum refining capacities is expected to rise to 240 million tonnes perannum (MTPA) by March 2012 from the current 188 MTPA, attracting anestimated investment of US$ 13.5 billion-US$ 14.6 billion. The capacity additionis believed to boost country's exports of petroleum products, informed a topgovernment official.S Sundereshan, secretary, ministry of petroleum & naturalgas, government of India stated that the country would have an excesspetroleum refining capacity of around 90 million tonnes per annum in next 12 to18 months. "Currently, we have an installed refining capacity of 188 MTPA, whileseveral green field refinery projects are lined up and are expected to beoperational by March 2012. This will increase the total refining capacity to 240million tonnes," he said . Currently, India's total demand for the petroleumproducts is pegged at around 140 MTPA. This creates a spare capacity of 48million tonnes per annum at the refineries. The spare capacity will increase toaround 90 million tonnes per annum. The domestic demand is expected to bearound 142-143 tonnes per annum."We will be actually exporting a total of 90million tonnes of petroleum products to some of the most developed countriesincluding the US and European countries," added Sundereshan.

• Mobile value-added services will generate US$ 12.3 billion in sales by 2015,more than double the US$ 4.0 billion figure currently, consulting firmPricewaterhouseCoopers said in a report. The present student community will bethe largest consumers of value-added services in the next four years, the study

revealed. It also adds that the new generation of content users will demandmore entertainment and utility-based services. As students become tomorrow'sworking class, capable of high income & high propensity to pay, they are likelyto generate incremental revenue of US$ 3.3 billion in 2015. The consulting firmhad sampled 1,050 respondents across Delhi, Mumbai, Hyderabad, Bangalore,Chennai, Bhubaneswar, Kochi, Ahmedabad, Pune and Kolkata, for its study. PwCprojects the working population to make up around 50% of the subscriber base,which is expected to be around 1.2 billion in 2015, therefore increasing revenueflows.



• The Indian biotechnology sector is expected to touch the US$10 billion mark by2015 on the back of emerging opportunities across various verticals, namelybiopharma, agri-biotechnology, industrial biotechnology among others.Presently, the biotechnology sector in the country is estimated to be around US$4 billion of which around 40 per cent is contributed by Karnataka. “Bangalorehosts 52 per cent of the core biotechnology companies in the country andaround five top biotech companies are in the city. It shows the favourableecosystem for biotechnology industry in the state. We will make further effortsto boost growth of the industry,” B.S Yeddyurappa, Karnataka chief minister,said after inaugurating Bangalore India Bio 2011. He also said that the state wasabout to open four biotechnology parks in various parts of the state. Presently,the state is in the process of promoting biotech finishing schools to create skilledworkforce for the industry.





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India Buisness Opportunity