India-the next growth engine€¦ · Fertility Rate (births per woman) 2.9 Infant Mortality Rate (per 1,000 live births) 61.6 Life Expectancy at Birth (years) 63.5 Rural Population

Indian Economy* An Overview

Sources: WDI, WEO, IFS *Most Recent Data Available

Indicators India

GDP (US$ Billions) 800

GDP Per Capita (US$) 725

Real GDP Growth (%) 9.3

Inflation (%) 7.7

Trade Balance (US$ Billions, Last 12 months) -41.2

Gross Domestic Savings (% of GDP) 20.7

Gross Fixed Capital Formation (% of GDP) 23.7

Household Consumption Expenditure (% of GDP) 67.9

Exchange Rate (Per US$) 46.7

Foreign Exchange Reserves (US$ Billions) 157.1

Exports of Goods and Services (% of GDP) 19.1

Foreign Direct Investment, Net Inflows (% of GDP) 0.8

Bank Credit to Private Sector (% of GDP) 41

Bank Credit to Public Sector (% of GDP) 20

A Comparison of Demography andInfrastructure*


Indicators India

Population (Billions) 1.1

Population Growth (%) 1.5

Fertility Rate (births per woman) 2.9

Infant Mortality Rate (per 1,000 live births) 61.6

Life Expectancy at Birth (years) 63.5

Rural Population (% of total population) 71.5

Electric Power Consumption (KWH per capita) 435.3

Net Energy Imports (% of energy use) 18.1

Energy Use (kg of oil equivalent per capita) 519.9

Personal Computers (per 1,000 people) 12.1Households with Television (%) 37.0

Adult Literacy Rate (% of people aged 15 and above) 61.0

Mobile Phone Subscribers (per 1,000 people) 43.8

Broadband Subscribers (per 1,000 people) 0.6

India’s Gross Domestic Product 1980-2005

0

200

400

600

800

1000

1980 1985 1990 1995 2000 2005

-20

-10

0

10

20Gross Domestic Product - L

GDP Growth (in Rupees) - R

US$ Billions Percentage Change, Year Ago

Sources: The World Bank, IMF

India’s GDP Per Capita US$,1980-2005

0

200

400

600

800

1980 1985 1990 1995 2000 2005

-20

-10

0

10

20

Per Capita GDP - LGrowth Rate - R

US$ Percentage Change, Year Ago

Source: World Bank, IMF

Contributions to the World’s GDP Growth 1995-2005

Source: WEO

33%

13%

7%

4%

3%

3%

3%

3%

3%

3%

24%

United States

China

United Kingdom

Italy

Canada

France

Spain

Mexico

Russia

India

Other Countries

Top Global Trading Nations As a Percentage of World’s Trade, 2005

15%

13%

7%

5%

4%

3%

3%

3%

2%

2%

1%

Euro Area

United States

China

Japan

United Kingdom

Canada

Hong Kong SAR

Korea

Mexico

Singapore

India (18th)

Source: WEO

India’s Population Growth 1970-2005

0.4

0.6

0.8

1.0

1.2

1970 1975 1980 1985 1990 1995 2000 2005

1.3

1.6

1.9

2.2

2.5Population - L

Population Growth - R

Billions Percentage Change, Year Ago

Source: The World Bank, IMF

A Comparison of Fixed Investments As a Percentage of GDP, 1995-2005

Source: IFS, NBS and World Bank

0

10

20

30

40

50

China India Korea Japan United

States

Percent

Residential Investment As a Percent of GDP, 1996-2005

Sources: WDI, WEO

2.9 3.3

5.9

4.5

6.16.9

11.8

7.6

4.3

5.9

15.1

7

0

2

4

6

8

10

12

14

16

1996 2000 2005

China India Hong Kong Korea

Percent of GDP Percent

Non-Residential Investment As a Percent of GDP, 1996-2005

Sources: WDI, WEO

29.9 29.5

39.3

20.2

16.8 17.815.7 14.6

13.2

26.8

23.2

30.5

0

5

10

15

20

25

30

35

40

45

1996 2000 2005

China India Hong Kong Korea

Percent of GDP Percent

India’s Balanced Financial Market 2005

Sources: IFS, S&P, BIS

Bank Assets, 41%

Stock Market

Capitalization,

35%

Government

Bonds, 22%

Corporate Bonds,

2%

Equity Market Returns vs. Risk MSCI Regional and National Indices, 2000-2006

0

5

10

15

20

25

30

35

-1 0 1 2 3 4 5 6 7 8 9

Annualized Return (%)

Va

ria

nc

e (

%)

China

India

World

Emerging

Asia

Brazil

Russia

Developed

Europe

Emerging

Europe

Latin

AmericaUnited

States

Japan

Source: Bloomberg

Major Foreign Direct Investors in India 2005

Source: The U.S. China Business Council

Mauritius, 55%United States, 11%

Germany, 7%

Others, 17%

Foreign Exchange Reserves Selected Countries, 1996-2006

0

500

1000

1500

2000

2500

3000

3500

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

US$ Billions

China

Russia

Africa

India

Mexico

Brazil

Other

Source: IFS

Major Business Constraints Percentage of Surveyed Managers Saying Yes*


Indicators China India

Corruption 27.3 37.4

Courts 17.5 29.4

Crime 20.0 15.6

Labor Regulations 20.7 16.7

Labor Skills 30.7 12.5

Tax Rates 36.8 27.9

Control of Corruption Normalized Control of Corruption Index, 2005

Source: The World Bank

204 Countries

Index

MALAYSIA

INDIA

THAILAND

CHINA

-3

-2

-1

0

1

2

3

HIGH

LOW

Government Effectiveness Normalized Government Effectiveness Index, 2005


209 Countries

Index

MALAYSIA

THAILAND

INDIA

CHINA

-3

-2

-1

0

1

2

3

HIGH

LOW

Law and Order Normalized Rule of Law Index, 2005


208 Countries

Index

MALAYSIA

INDIA

THAILAND

CHINA

-3

-2

-1

0

1

2

3

HIGH

LOW

Political Stability Normalized Political and Violence Index, 2005


213 Countries

Index

MALAYSIA

CHINA

THAILAND

INDIA

-3

-2

-1

0

1

2

3

HIGH

LOW

Voice and Accountability Normalized Voice and Accountability Index, 2005


INDIA

THAILAND

MALAYSIA

CHINA

-3

-2

-1

0

1

2

3

HIGH

LOW

208 Countries

Index

Number of Major Airports 2006

Source: Business Week

United StatesChinaIndia

200

150

100

50

0

Number of Airports

Port Shipments Billions of Tons, 2006



3.0

2.5

2.0

1.5

1.0

0.5

0.0

Billions of Tons

National Expressways Thousands of Miles, 2006



50

40

30

20

10

0

Thousands of Miles

Total Population of the Country 2006



1.4

1.2

1.0

0.8

0.6

0.4

0.2

Billions

Electricity Production in the Country 2006

Source: Business Week China’s figure is for 2005


4000

3000

2000

1000

0

Billions of KWH

Internet Penetration in the Country 2006



70

60

50

40

30

20

10

0

Percent

Access to Improved Water Source Percentage of Population, 2002

100%

100%

96%

92%

91%

89%

86%

77%

Japan

United States

Russia

S. Korea

Mexico

Brazil

India

China

Source: WDI

Engineering Focused GlobalResourcing Centers in Hyderabad Employment Demand by Starting Year*

Source: McKinsey Global Institute

*Starting Year Employment is Based on 2004 Employment and 20% Annual Growth Rate

300400

480 460

1,300

3,800

5,100

2004200320022001200019991998

6000

5000

4000

3000

2000

1000

0

Number of Engineers

Demand For Suitable Engineers inHyderabad Will Exceed Local Supply Assuming Constant Demand for Additional Centers*

Source: McKinsey Global Institute*20% Annual Employment Growth Rate ofExisting Ones

0.5

5.5

1.4

6.1

5.5

6.7

7.8

7.4

9.4

7.8

200820072006200420022000

12

10

8

6

4

2

0

Thousands of Engineers

Demand for Engineers by Global Resourcing CentersSuitable Engineering Graduates from Hyderabad Region

11.3

8.2

Technological Readiness

(1 = Lags Behind Other Counties, 7 = Is Among World Leaders)

Source: The Global Competitiveness Report ‘06-’07

Russian Fed.China

MexicoIndia

Korea, Rep.U.K.

CanadaU.S.

GermanyJapan

6.5

6.0

5.5

5.0

4.5

4.0

3.5

3.0

2.5

Score

Mean = 3.9

Company Spending on R&D

(1 = Do not Spend Money on R&D, 7 = Spend Heavily on R&D)


MexicoRussian Fed.

ChinaIndia

CanadaU.K.

Korea, Rep.Germany

U.S.Japan

6.5

6.0

5.5

5.0

4.5

4.0

3.5

3.0

Score

Mean = 3.4

University Collaboration

(1 = Minimal or Nonexistent, 7 = Intensive and Ongoing)


Russian Fed.Mexico

IndiaChina

Korea, Rep.Canada

U.K.Japan

GermanyU.S.

5.5

5.0

4.5

4.0

3.5

3.0

Score

Mean = 3.3

Availability of Scientists and Engineers

(1 = Nonexistent or Rare, 7 = Widely Available)


ChinaMexico

Russian Fed.Korea, Rep.

U.K.U.S.

GermanyCanada

IndiaJapan

6.5

6.0

5.5

5.0

4.5

4.0

3.5

Score

Mean = 4.4

Surface Road Access Selected States,1998-1999

Sources: Road Statistics of India, Government of Madhya Pradesh

MaharashtraOrissa

KarnatakaWest Bengal

All IndiaAndhra Pradesh

Bihar

100

80

60

40

20

Length Per 100 Sq. Km of Area

Telephone Connections Selected States,1999-2000

Source: Department of Post. Ministry of Communication, Government Of India

KarnatakaAndhra Pradesh

All IndiaMaharashtra

OrissaWest Bengal

Bihar

4000

3000

2000

1000

0

Connections per Lakh of Population

Population Served By A TypicalPost Office Selected States,1999-2000

Source: Department of Post. Ministry of Communication India New Delhi

West BengalBihar

MaharashtraAll India

KarnatakaAndhra Pradesh

Orissa

9000

8000

7000

6000

5000

4000

Population

Efficiency and Transparency ofGovernance Least Corrupt States in India, 2005

Sources: The World Bank, TII-CMS Study

States

KeralaHimachal Pradesh

Gujarat

Andhra PradeshMaharashtra

ChhatisgarhPunjab

West Bengal

OrissaUttar Pradesh

Source: The Times of India

INDIA POISED?


INDIA POISED?

POSITIVES

•YOUTH

•ENGLISHSPEAKING

•DEMOCRACY

NEGATIVES

•POWER

•INFRASTRUCTURE

•EASE OF DOINGBUSINESS


INFRASTRUCTURE

RAILWAYS: AMONG LARGEST IN THE WORLDBUT POWER – SHORTFALL IN MOST MAJORCITIES

73.529.96.3MOBILE PHONE PER

100 POP

72

2211

CHINA

54770INETRNET

PER MN POP

213132191ROADS

KM PER MN POP

USAINDIA

73.529.96.3MOBILE PHONE PER

100 POP

72

2211

CHINA

54770INETRNET

PER MN POP

213132191ROADS

KM PER MN POP

USAINDIA


STARTING A BUSINESS

5

13

11

PROCEDURES

35USA

9335CHINA

13435INDIA

HOW

TOUGH

DAYS

5

13

11

PROCEDURES

35USA

9335CHINA

13435INDIA

HOW

TOUGH

DAYS


INDIANS EVERYWHERE

•3RD LARGEST FOREIGN INVESTOR INBRITAIN

•8,000 TEACHING IN US UNIVERSITIESMAINLY SCIENCES

•21,000 MOTELS IN US (OUT OF 53000)

•28% OF ALL STARTUPS IN US


SPECIAL ECONOMIC ZONES

•1,750 SQ KM: LAND REQUIRED FORPROPOSED SEZs

•$71 BN INVESTED BY DEC 2009 IF ALL234 SEZs GET GOING

….BUT POLITICAL VOLCANO


MEGA DEALS US$ Billions

•ARCELOR: 33.35

•TATA CORUS: 12

•BIRLA – NOVELIS: 6

•JET – AIR SHARA: 0.35

•VODAFONE: 18.8

•ESSAR GLOBAL*: 4

Source: The Times of India*2 Steel Companies in North America

No. of AmountStage Invests % (US$ M) %

PE & VC in 2005 – By Stage

Early Stage (India-based) 22 15 79 3

Early Stage (Cross-border) 6 4 71 3

Growth 24 16 332 14

Late Stage 40 27 632 27

PIPEs 49 33 820 36

Buyout 6 4 375 16

Others / Unknown 0 0 0 0

80%

6%

Total 147 100 2309 100

Source: Oxford Bioscience Partners

THE INDIAN PHARMA INDUSTRY

Manufacturing facilities: The largest number of US FDAapproved plants outside of USA -- 75

0

20

40

60

80

India Italy China Spain Taiwan Israel Hungary

Sources: SSKI Research, Oxford Bioscience Partners

THE INDIAN PHARMA INDUSTRY

17% 22%29% 36% 39%

83% 78%71% 64% 61%

2001 2002 2003 2004 2005

331 352 461 541 599

# of DMFs Filed

India

Rest ofthe World

No. of DMFs (Drug Master Files) Filed with U.S. FDA

The largest by any country


INDIA

• FDA Generic Drug Approval Applications (ANDAs)

– 25 of all 126 in 2004 (20%)

– Tripled 2002 – 2004

– Increased Today

• Vaccine Production

– Largest in the World

• Intellectual Property Protection

– Joined WTO in 2005


Per Capita Drug Expenditure World Development Report, 2004

USA 4,499 13.0

Japan 2,908 7.8

Norway 2,832 7.8

Germany 2,422 10.6

World Average 482 9.3

China 45 5.3

India 23 4.9

India “Middle Class” 230

$/Person % GDP


Major Life Science InvestmentOpportunities

• Drug Discovery

– Domestic and acquired from the west

• Drug Manufacture

– Export, Domestic

• Clinical Trials

– Insourced, Domestic

• Diagnostic Products / Information

• Medical Clinics

– Urban / Rural

• Hospitals


The Indian IT Industry

Source: Nasscom Strategic Review

India: IT Exports Set to OvertakeNet Oil Imports by Fiscal 2008

Source: CLSA Asia-Pacific Markets

Employment in Indian IT ServiceExports, BPO, and Domestic IT Roles



Documents

India-the next growth engine€¦ · Fertility Rate (births per woman) 2.9 Infant Mortality Rate (per 1,000 live births) 61.6 Life Expectancy at Birth (years) 63.5 Rural Population