LOVELY PROFESSIONAL UNIVERSITYDEPARTMENT OF MANAGEMENT

Report on Summer TrainingReport on Overview of Indian export industry with special emphasis on PunjabSubmitted to Lovely Professional University

In partial fulfillment of theRequirements for the award of Degree ofMaster of Business AdministrationSubmitted by:Manvi AdlakhaUniversity Roll No.Q1305, A29Reg:-11311376

DEPARTMENT OF MANAGEMENTLOVELY PROFESSIONAL UNIVERSITY JALANDHAR NEW DELHI GT ROADPHAGWARA PUNJABDECLARATION

I, Manvi Adlakha, student of MBA 3rd Semester, hereby declare that project entitled Report on Overview of Indian Export Industry with special emphasis on Punjab submitted in the partial fulfillment of the degree for Master of Business Administration to Lovely Professional University is of my own accurate work.I further declare that all the facts and figures furnished in this project report are the outcome of my own intensive research and findings. It is an authentic report on secondary research of the topic taken by me under the guidance of and part or full of it has been presented elsewhere before any other University or Institute for the award of any Degree or Diploma.

Manvi Adlakha MBA 3rd Semester

ACKNOWLEDGEMENT

First of all I thank the LOARD ALMIGHTY for giving the courage and wisdom to take up this project and complete it successfully. I take this opportunity to express my thanks to each and every person who have helped me and guide me in doing this project.I wish to express my sincere gratitude to the Respected Dean Mr. Modi for giving a chance to do this project under CODE in Lovely Professional University.I am grateful to Mr. Ajay Kumar Khullar (Mentor) for allowing me to undertake my training under his guidance. It is the result of his esteem kindness that I am able to complete my project.I exploit this opportunity in express sense of gratitude and indebtedness whole heartedly to Mr. Ajay Kumar Khullar and Mr. Rajeev Gupta for their encouragement while carrying out study of our project work on training need analysis.I sincerely thank all the members of the teaching and non- teaching staff in the Department of Master of business administration for their sustained help in my pursuits.I am really thankful to all the members of CODE (Lovely Professional University) for providing me the necessary help required during the training period.

Manvi Adlakha MBA 3rd Semester

TABLE OF CONTENTS:Sr.No.TopicPage no

1Abstract5

2Chapter 1 Introduction6

1.1 Export8

3Chapter 2 : Overview of Indian Export industry9

2.1 History of export10

2.2 Countries where India export11

2.3 Products exported by India14

2.4 India export 2012-201418

2.5 Regional export patterns20

2.6 Top 10 exporting companies of India21

4Chapter 3 : Overview of Punjab export

2.1 Punjab25

3.2 Industrial cluster 27

3.3 Major industries28

3.4 Commodities wise export29

3.5 SWOT Analysis30

5References41

ABSTRACT:International trade is the exchange of goods and services between countries. This type of trade gives rise to a world economy, in which prices, or supply and demand, affect and are affected by global events. This report actually emphasizes on export industry of Punjab by comparing it with export industry of India and world. I have discussed about various companies that are in exporting business in accordance with world, India and Punjab. Main focus is on companies of Punjab and various items that Punjab exports to the world and how much Punjab contributes in national economy and world economy.This report includes all products that are exported from India in various countries and their share in the world market. This report will tell you about history of India export industry and its overview and all other things that are important in terms of export in both India and Punjab industry.

1) INTRODUCTIONInternational trade is defined as trade of goods and services of nation with rest of the world. In other words international trade is the exchange of goods and services between countries. This type of trade gives rise to a world economy, in which prices, or supply and demand, affect and are affected by global events. Trading globally gives consumers and countries the opportunity to be exposed to goods and services not available in their own countries. Almost every kind of product can be found on the international market like; Foods Clothes spare parts Oil Jewelry Wine[footnoteRef:2] [2: ]

Stocks Currencies Water. Services are also traded: Tourism Banking Consulting Transportation. A product that is sold to the global market is an export, and a product that is bought from the global market is an import. Imports and exports are accounted for in a country's current account in the balance of payments.

India has opened economy. India trading partners are USA, UK, UAE, Switzerland, South Korea, Singapore, Saudi Arabia, Nigeria, Japan, Iran, Indonesia, Hong Kong, Germany, China, and Belgium. USA, China, UAE, Saudi Arabia, Singapore and Germany have been the top trading partners of India for the past 3 years.

[footnoteRef:3] [3: www.innovativejournal.in]

1.1) EXPORTS:

Afunctionof international trade whereby goods produced in one country is shipped to another country for future sale or trade. The sale of such goods adds to the producing nation's gross output. If used for trade,exportsare exchanged for other products or services. Exports are one of the oldest forms of economic transfer, and occur on a large scale between nations that have fewer restrictions on trade, such as tariffs or subsidies.Exportof commercial quantities of goods normally requires involvement of thecustomsauthorities in both the country of export and the country of import. The advent of smalltradesover the internet such as throughAmazonandeBay has largely bypassed the involvement of Customs in many countries because of the lowindividualvalues of these trades. Nonetheless, these small exports are still subject to legal restrictions applied by the country of export. An export's counterpart is animport. [footnoteRef:4] [4: http://www.investopedia.com/terms/e/export.asp]

2) OVERVIEW OF INDIAN EXPORT INDUSTRY:

The export business in India is the subsequent result of globalization and growth of trade relations between countries. Through these trade relations the Indian exporters have gained opportunities to expand their business overseas.The Indian products have a huge demand in the foreign markets. The export business has been flourishing and according to reports it contributes a huge share to the development of the country. The Indian exporters have succeeded in with standing the stiff competition prevalent in the foreign markets through skilled manpower and quality products.

Export sector of Indian Economy has improved immensely over the years and has earned US $ 125 billion in the year of 2005-06. Indian exports has estimated target of US 160 billion in 2007-08. The achievement came to the Indian exports in the same fiscal despite the odds against the exports, minimizing the gains. In the first two months of 2007-08 exports grew by 20.3%, which was a little lower than the previous year over the same period a year ago. (http://business.mapsofindia.com/sectors/export.html)Exports in India decreased to 26479.72 USD Million in June of 2014 from 27998.50 USD Million in May of 2014. Exports in India averaged 4005.73 USD Million from 1957 until 2014, reaching an all time high of 30541.44 USD Million in March of 2013 and a record low of 59.01 USD Million in June of 1958. [footnoteRef:5] [5: http://www.tradingeconomics.com/india/exportshttp://EzineArticles.com/5356745]

2.1) HISTORY OF EXPORTS: India is working in agriculture sector ever since the ancient times till the establishment of the British Empire. Indian trade historyreflects that despite the frequent political upheavals during the 12th to the 16th centuries, the country was still prosperous. The political and economic policies followed by the Muslim rulers propagated the growthof towns in various parts of the country. These towns grew into trade and industrial centers which in turn led to the general prosperity. From the 16th to the 18th centuries, covering the two hundred years of Mughal rule, Indian urbanization saw further growth. India was well known for its textiles one of the chief items of export. Textiles from Gujarat were sent to the Arab countries and to South-east Asia. Trade history of India also shows hardwood furniture. A larger variety of ornamental work in cut stones, ivory, pearl and tortoise shells wereproducedin South India. Pearl fishing was a major industry here. Indian art and crafts patronized by Indian rulers were unmatched for their beauty and skill and were very popular in the European countries.

[footnoteRef:6] [6: http://www.tradechakra.com/indian-economy/exports/index.html]

2.2) COUNTRIES WHERE INDIA EXPORTS:India has developed business relations with a number of foreign countries like the member countries of SAARC, some Eastern European countries as well as African countries, members of EU.Various countries include; Russia UAE USA Hong Kong UK Japan Germany Singapore Belgium Malaysia Netherlands Bangladesh Italy France Australia BelgiumUSA has turned out to be the most significant export partner of India and the export sector of Indian economy earned approximately US $13265.60 million in 2006-07. UAE has stood second only to USA as UAE contributed 9.7 out of the total Indian earnings from exports in 2006-07. UK and China has exchanged their positions in the current year as China's share among the exports figure in India in 2006-07 has improved by 6.3 % in comparison to 2005-06. In 2004-05 Belgium and Italy contributed substantially to the earnings from exports, with a contribution of US $ 2442.09 million and US $ 2160.83 million respectively.[footnoteRef:7] [7: ]

India has seen massive directional change in the context of origin of demand for Indian products. Till 2001-02 North America and the EU markets shared nearly 21% and 23.2 % respectively of total exports and the remaining to the rest of the globe. By 2006-07, North America had a share of only 16% of the total exports and the EU's share was 21.2%.

Europe turned out to be the most favored export destination with 33% of the companies earning their revenues from this region, followed by Asia and America. The US and Germany were the most preferred destinations within the American and European regions. Russia and Ukraine turned out to be prospective export destinations in the CIS region. Singapore, which is Indias largest trading and investment partners in ASEAN, emerged as one of the most popular export destinations in Asia.In recent years India has recognized the export potential of Africa. With India, on the average of providing preferential market access for exports from all 50 Least Developed Countries, of which 34 are in Africa, bilateral trade is expected to increase in the coming years. South Africa emerged as the most lucrative country for export in the African region where India holds the rank of 20th largest exporter and importer for South Africa and is its sixth largest trading partner in Asia.In the Middle East, the UAE was the most preferred spot; the Associated Chambers of Commerce and Industry (ASSOCHAM) has predicted that Indias trade with the UAE will touch $ 25 bn by 2010.With plans to treble the bilateral trade from around $3.2 billion to $10 billion by 2010, Brazil turned out to be the most promising export destination in the LAC region. Mexico emerged as the other prominent market in LAC region with India signing a ten-year bilateral investment promotion and protection agreement (BIPPA) with Mexico in 2007 for promotion of free investment.[footnoteRef:8] [8: http://business.mapsofindia.com/sectors/exports/(http://www.tradechakra.com/indian-economy/exports/index.html)(http://www.dnb.co.in/Exporters/Key%20Highlights.asp)]

2.3) PRODUCTS EXPORTED BY INDIA:Exportshave boosted the growth of Indian economy substantially and Indian exports in the current year have earned nearly US $ 125 billion and is expected to earn US $ 160 billion for the next fiscal year. Themajor export products of Indiainclude; Leather Medical appliances Equipments Textiles Others

LEATHER GOODS:

India hasdevelopedover the years to become a key player in the export of leather goods and accessories among the major export products of India.

India exports numerous leather products for daily use like leather wallets, belts, key holders, folders, pouches, leather toys, handbags etc. Gift items made of leather such as Leather notebooks, decorated leather journals, key rings, rugs are quite popular in foreign countries.

A large number of small scale, medium scale as well as large scale companies in India are engaged in the export of leather goods, the list of such companies include:

Sharie International Islam International Indobest Falcon International Z.N.T International Balaji Impex Private Limited Paradise Noble Creations Asian adores The Lotus Handicrafts New Era Overseas Medical AppliancesIndian medical appliances have made their mark in the foreign countries on account of superior quality and variety. Common medical appliances exported from India include absorbent gauze, sterile gloves, crepe bandages, gauze sponge, surgical face masks, surgical caps, and surgical disposables. Export of specialized medical appliances have also gained importance among major export products of India and appliances such as baby incubator, automatic vertical autoclave, air ionisers, nelaton catheter, digital video colposcopes, digital imaging softwares.

A large number of small scale, medium scale as well as large scale companies in India are engaged in the export of medical appliances goods, the list of such companies include:

Nidhi Meditech Systems Coral Marketing Narang Scientific Works Private Limited Relique Technologies Surya Surgical Industries Chatterjee Surgical United Surgical Industries B. L. Life sciences Private Limited Paramount Surgical Emporium, Delhi Magnum Medicare Pvt. Ltd. Textiles goods:

Textile goods have gained prominence among the export products of India; designer garments for ladies as well as gents manufactured by the big houses in India have created hugedemandin the International garmentindustry. The popular ladies garment include knitted tops, embroidered salwar, sequin work blouses, sarongs, floral t-shirts, beaded garments,poplinembroidered kurta, viscose crape printed skirt.

A large number of small scale, medium scale as well as large scale companies in India are engaged in the export of textile goods, the list of such companies include:

Kshethra Exports Mirza Fabric Private Limited Kanha Designs Pvt. Ltd. Knitco Fashionns Boom Buying Private Limited Revolution Exports Flying Fashions Subasri Textile Vipro Garments Kewal Impex Sudharshanaa Tex Macsam

Equipments:India caters to the need of varied equipments of the foreign countries, therefore the Indian equipment industry have grown in leaps and bounds and ranks high among the major export products of India like conveyor systems, hand pallet trucks, magnetic coolent cleaners, vibrating screens, EOT cranes, industrial magnetic conveyors, cantilever racks, steel rolling mill plants, hydraulic stackers, heavy duty pallet rack, pin pulveriser, agitator vessel, rotary vane feeders.

A large number of small scale, medium scale as well as large scale companies in India are engaged in the export of equipments, the list of such companies include:

Orton Engineering Private Limited A.S. Precision Machines Pvt. Ltd. Dewas Techno Products P Ltd. Metal Storage Systems Private Limited Yagnam Pulverizer Private Limited Elegant Engineers Metro Engineering Industries Jai Gopal Engineering Works Private Limited[footnoteRef:9] [9: http://business.mapsofindia.com/sectors/exports/major-products.html) ]

2.4) INDIAN EXPORT IN 2012-2014:

Indias Export from 2013-2014. In April 2014, it reached maximum to 29578.5 USD Million and in the end of 2013 in was on the lowest point i.e. 24613.29USD Million.

[footnoteRef:10] [10: (http://www.tradingeconomics.com/india/exports)]

2.5) Regional export patterns: Maximum number of exporters located in the western region. Expectedly, the western region of India, with 39% representation, accounted for the maximum number of exporters. Followed by 29% southern-based exporters 26% northern-based exporters Maharashtra in the western region, Tamil Nadu in the south and Uttar Pradesh in the north emerged as a strong base for a sizeable number of exporters. Majority of exporting companies from the north, west and south regions are from the engineering sector, accounting for 26%, 32% and 22% respectively from the total sample for each of these regions. Exporters from the leather industry dominated the eastern region sample, with a 25% representation. More than 50% of the exporters in chemicals, IT, pharmaceuticals and textile sectors were public limited entities.

[footnoteRef:11] [11: (http://www.tradingeconomics.com/india/exports)]

2.6) TOP TEN EXPORTERS OF INDIA:1) Oracle Financial Services Software:

Oracle Financial Services Software Limited (OFSSL) is a world leader in providing IT solutions to the financial services industry. The company has a large exposure to foreign financial companies which contribute 96 per cent of the revenue to the company. The company addresses the entire financial services space through a comprehensive portfolio of products, IT services, consulting and knowledge process outsourcing services with an experience of delivering value-based IT solutions to over 810 financial institutions across 130 countries. The company also has strong alliance and/or implementation relationships with industry leaders such as Hewlett-Packard, IBM, Sun Microsystems and Intel.

2) Opto Circuits:Opto Circuits is a technology-based electronics company engaged in design, development, manufacturing, marketing and distribution of medical electronic devices and medical monitoring products. Opto Circuits offers technological advanced medical devices that are proprietary in nature, improve patient safety and care and reduce healthcare costs. It offers a broad range of more than 100 medical devices across 17 clinical categories spread over 12 medical fields. It has sales in 56 countries and operations in India, Germany and the US. Of its total sales, around 95 per cent of the revenue comes from exports while the remaining comes from the domestic markets.

3) INFOSYS:

Infosys, the second-largest software making company, generates 94 per cent of the revenue through exports. The major exporting countries are the US (63.9 per cent) and Europe (21.9 per cent) that together generates almost 85 per cent of the export revenues while the rest comes from India (2.2 per cent) and some other countries. The companys revenue comes from providing various IT products and services catering to sectors such as BFSI, manufacturing, retail, life science, energy and communication services.

4) TCS:

Tata Consultancy Services, part of the Tata Group that is one of Indias largest industrial conglomerates and most respected brands, is an IT services, business solutions and outsourcing organization that delivers real results to global businesses, ensuring a level of certainty that no other firm can match. TCS offers a consulting-led integrated portfolio of IT and IT-enabled services delivered through its unique Global Network Delivery Model (GNDM), recognized as the benchmark of excellence in software development. Of its total sales, 91 per cent of the revenue comes from exports while the remaining is derived from the domestic markets.

5) Divis Lab:

Divis Laboratories is engaged in the manufacture of generic active pharmaceutical ingredients (APIs), custom synthesis of active ingredients and other specialty chemicals such as peptides and nutraceuticals. The company has three multi-purpose manufacturing facilities with a total reactor capacity of 4,500 cubic meters and all support infrastructures such as utilities, environment management and safety systems. The company in a matter of short time has expanded its breadth of operations to provide complete turnkey solutions to the domestic Indian pharmaceutical industry. Of its total sales, more than 90 per cent of the revenue comes from exports while the remaining comes from the domestic markets.

6) Rajesh Exports:Rajesh Exports Limited (REL) is the largest gold jeweler manufacturer in the world and also the countrys largest exporter of gold jeweler with a market share of around 40 per cent. Shubh Jewelers is the retail brand of the company. Of the total sales, around 85 per cent of the revenue comes from exports while the remaining is from the domestic markets. REL exports plain gold jeweler and studded gold jewelers mainly to the US, UK, Singapore and the UAE. It is also the only Indian company to be recognized by the Government of India as a Five Star Export House in the field of gold jewelers.

7) Tech Mahindra:

Tech Mahindra provides information technology (IT) services to the telecommunications industry worldwide. Tech Mahindra, with 84.75 per cent exports of its sales in FY11, arrives at number seven in our list. A majority of its stake is owned by Mahindra & Mahindra Limited in partnership with British Telecommunications Plc. Tech Mahindra serves telecom service providers, equipment manufacturers, software vendors and systems integrators. The company recently completed the merger of Mahindra Satyam with itself. This merger has made Tech Mahindra the sixth-largest IT service provider with top line of Rs 5,490 crore and a workforce of 75,000.

8) Aban Offshore:

Aban Offshore provides drilling and oil field services for the offshore exploration and production of hydrocarbons to the oil industry in India and internationally. The company is also involved in wind power generation activities. It owns and operates 15 jack-up offshore drilling rigs, two drill ships, one floating production platform and one jack-up rig and a drill ship on bareboat charter. It also operates 165 wind energy generators. The company earned around 84.39 per cent of its revenues from exports in FY11, making it the eighth in the list. This takes the total export sales to above Rs 1,004 crore.

9) Sesa Goa:

Goa-based Sesa Goa is Indias largest private producer and exporter of iron ore with operations in Karnataka too. The company produces 18.8 MT of iron ore and receives 80 per cent of its revenue from exports and the rest through domestic sale. At present the company seems to be facing severe problems due to the ban on iron ore mining in Karnataka and the increase in export duty. The iron ore mining ban in Karnataka has stopped the company from producing iron ore and the concerns have now shifted to the Goa mines as an appointed commission has submitted a report with regards to illegal mining taking place in Goa. Sesa Goa has a major mining operation in Goa that almost contributed 80 per cent of the total production of the company in FY11.

10) Dr. Reddys Lab:

Dr. Reddys Lab was established in 1984 and is an integrated global pharmaceutical company, committed to providing affordable and innovative medicines for healthier lives. It operates in three segments viz. pharmaceuticals and active ingredients (PSAI), global generics and proprietary products. Their major markets include India, USA, Russia and CIS, Germany, the UK, Venezuela, South Africa, Romania and New Zealand. Of the total sales, around 72 per cent of the revenue comes from exports while the remaining from the domestic markets.

(2012 data)[footnoteRef:12] [12: http://www.dsij.in/article-details/articleid/4476/top-ten-exporters-of-india.aspx)]

3) PUNJAB

Punjab state is located in northwestern India, bordered on the north by Jammu and Kashmir and Himachal Pradesh, on the east and south by Haryana, and on the west by Pakistan. Punjab covers an area of 50,362 sq. km. Punjab is basically an agrarian economy. However, the importance of agriculture sector in Punjab economy has declined over the period. The Gross State Domestic Product (GSDP) of Punjab was US$ 40.6 billion in 2009-2010. The compound annual growth rate (CAGR) of GSDP from 2001-02 to 2009-2010, was about 11.8 per cent. Punjab ranks 13th amongst all the Indian states in terms of GSDP. Agriculture and services are the two sectors that drive the states economy. According to the Planning Commission of India, the state ranks amongst the top five states interims of per capita income. Punjab has a very high purchasing power, highest per capita consumption of power and a large consumer durable market. The Government of Punjab is promoting the development of several special economic zones (SEZ) across Punjab. Punjabs total exports of industrial items in the year 1995-96 were 2564.61 crore 2001-2002 these exports were 4407.90 crore 2008-09 exports were to the tune of 13888.29 crores 15972.48 crore during the year 2009-2010.The main items of export from the State are; Yarn & Textiles Readymade Garments and Hosiery Sports Goods Engg. Goods Cycle& Cycle Parts Hand Tools Drugs

Ludhiana, Jalandhar and Amritsar account for around 90 per cent of the total exports of Punjab. (Statistical Abstract of Punjab 2010)[footnoteRef:13] [13: Synopsis pdf]

3.2) INDUSTRIAL CLUSTERS OF PUNJAB:

Ludhiana Amritsar Jalandhar Patiala Phagwara Batala Goraya Mandi Gobindgarh Mohali Dera Bassi, Chanalon Rajpura Goindwal

3.3) MAJOR INDUSTRIES OF PUNJAB:

Hosiery/Ready-Made garments Yarn and Textiles Cycle and Cycle Parts Sports Goods Electronic Goods Auto Parts Hand Tool/Machine Tools Chemical/Pharmaceutical Food products Leather/Rubber Goods.

[footnoteRef:14] [14: Synopisis pdf]

3.4) COMMODITY WISE EXPORT FROM PUNJAB:

[footnoteRef:15] [15: ]

3.5) SWOT ANALYSIS OF PUNJAB:

STRENGTHS:.1 Geography and Societal Parameters Relatively flat alluvial land, almost all of which is easily amenable to economic utilization Administratively compact. Access to waters from the extensive river system and aquifers originating in the Himalayan foothills although diversion of dam water outside the Punjab river basin and over-exploitation of water in agriculture has lowered the water table of groundwater at a rapid pace such that over 85 per cent of the agricultural blocks in the state are over-exploited or dark. Despite some in-migration of farm and factory labor, the problem of slums in urban areas is relatively contained. Located on the potentially active trade route to Pakistan and Central Asia, when reactivated. 2 Economic and Infrastructure Strengths Among the highest per capita income states in India. Led the country in the Green Revolution and in the adoption of improved agricultural practices. Extensive development of agricultural markets and networks and some success in new kinds of contract farming. With its extensive road network, Punjab has the highest road density (105 km of surfaced roads per 100 square km. of geographical area as on 2002) amongst 36 major states. This is much higher than the national average (43) and also higher than the other economic frontline states, such as Tamil Nadu (97), Maharashtra (68), Gujarat (63), Haryana (60) and Karnataka (54). Has the highest railway networks for the geographic area. Consumption of electric power in Punjab is the highest amongst the major states of India. In 2005/06, per capita power consumption (utilities and non-utilities) in Punjab was 1437 units compared with the national average of 631 units. In comparable economic frontline states, the level of consumption was lower Gujarat (1284), Haryana (1090), Tamil Nadu (977), Maharashtra (934) and Karnataka (720). 3 Social Infrastructure Strengths Low poverty & relatively superior nutritional and health indicators in comparison to other parts of the country. Educational infrastructure which is among the best of Indian states. By 2001, 96 per cent of the habitations were covered by primary schools within a distance of 1 km. Female literacy rate at 63 per cent in 2001 was superior to the national average (54 per cent) as also that of most other economically frontline States Karnataka (57 per cent), Haryana (56 per cent), Gujarat (58 per cent) and comparable to Tamil Nadu (64 per cent) and a little behind that of Himachal (67 per cent) and Maharashtra (67 per cent). Ease of access to government health care facilities for rural areas in Punjab is the highest (62 per cent) among the major states. It is much lower (24 per cent) than the national average of 41 per cent for urban areas. 374 Tradition of trade, business and industry Cotton mills, grain processing, sugar manufacture and the processing of agricultural materials such as oilseeds, as also metal working and leather products, have had a long history in Punjab. Hard working and innovative workforce that has been able to build a positive reputation both within the country and in several parts of the world. There exists a large pool of potential entrepreneurial talent that can push the industrialization of Punjab, provided the business atmosphere is perceived to be conducive. Strong potential for IT, Biotechnology and healthcare sectors. WEAKNESSES 1 Geography Landlocked and located in a corner of the country with associated disadvantage in terms of sources of raw material and markets (domestic and overseas), and border with Pakistan with a history of military conflicts. The dedicated rail freight corridor and the building of at least 2 international airports and a few small airports should help overcome this limitation, while peace with Pakistan in the medium run could turn the border area handicap into an opportunity. Agricultural advancement and the general prosperity has meant that land prices are higher than in other parts of the country, with adverse implications for the conversion of land to industrial use. Urban infrastructure is not commensurate with the relatively high levels of income in the state. 2 Social Indicators The quality of education remains a major problem. Despite having relatively higher average incomes and good quality infrastructure, the educational attainment of Punjab is only slightly above the national average. Recent nationwide surveys on learning achievements conducted by the NCERT show learning achievements at the school level in Punjab to be consistently below the national average. Weak and malfunctioning public system of delivery of education and health. The male literacy rate at 75 per cent in Punjab is the same as the national average, but lower than that in Maharashtra (86 per cent), Tamil Nadu (82 per cent), Gujarat (80 per cent) and Haryana (78 per cent). The female literacy rates are better than the national average and that of most other states. Punjabs sex ratio at 876/1000 after Haryana is the worst among all the states. It is not only much lower than the sex-ratio of 933/1000 for India as a whole but has also declined between 1991 and 2001. Even worse, Punjab has the lowest child sex ratio (798/1000) of all the states and this has also declined continuously since 1981. Out of the 10 districts with the lowest child sex ratio in India, 7 are from Punjab. A major problem of drug addiction among young male population in Punjab. 3 Administrative Apathy Perceived indifference amongst the different departments of the state government to the needs of business. This may be a legacy from the days when Punjab was rocked by terrorism and the civil service functions had less priority, leading to a comfortable non-activist approach, which seems to have become somewhat institutionalized. Excessive requirement of time in following-up with public offices and the multiplicity of such offices and points of interaction. The Udyog Sahayak System of "Single Window" system has just not worked. "Inspector-raj is still perceived to be deeply rooted. The strained condition of the states finances is widely known, and continuation of populist policies further undermines any confidence that business may develop in the capacity of the state government to do anything about improving the prospects for business in Punjab. 4 Weak industrial policy regimes Punjab has all along had an agrarian focus and the state is perceived not to have much interest in promoting industrial activities. This weakness has become more pronounced in the economic environment of the past 15 years or so when many state governments are proactively pursuing private investment in thrust areas where selected industries can be made globally competitive. Punjab has not amended its APMC Act, while several other states have been more pro-active in revamping their legislation. The Government of India has circulated model rules to be notified in this regard. Punjab must allow the private sector in trading in agricultural produce if agro-based industry is to be given a thrust, leading to greater income generation and prosperity of the states farm sector and farmers. A large part of the small scale industry (SSI) in metal products which came up in Punjab during the seventies and the eighties was greatly dependent on the Freight Pool Equalization Policy for iron & steel. With the termination of this policy, many of the SSI units saw their businesses turn uneconomic. To make matters worse for the industry of Punjab, the termination coincided with the period of terrorism and the period of the collapse of export markets in the former USSR, which affected the hosiery and woolen textiles industry in Punjab. Industrial policy of the state government did not adequately focus on the need to facilitate a process of modernization so that the SSIs could refocus their businesses. Earlier octroi, and now entry tax, are levied by the government of Punjab which discourages industrial activity in the state which relies for its industrial raw materials and markets outside of the borders of Punjab5. Having an entry tax on industrial raw materials entering the state means that the cost of production of all units located in the state goes up and their competitiveness is further eroded. Since most other states do not have these levies, this is a wound inflicted on the competitiveness of industry by the government of Punjab. The fiscal concessions granted by the Government of India to the neighboring hill states have led to a movement of industrial activity away from Punjab to these states, e.g., Himachal Pradesh and Jammu. Loss of credibility because of repeatedly announcing industrial subsidies of different kinds and failing to disburse because of resource constraints; the fine print in the Industrial Policy of 2003 that subsidies will be paid only if funds are available has also undermined the creditability of the government. 5 Infrastructure Deficits The indices of infrastructure facilities for Punjab "look" better than those for other states, but this comparison is deceptive. Punjab's dependence on air transport, railways and road network is much greater than many other states, given its landlocked nature. Although the power deficit both energy and peak demand for Punjab is around the median of all the states, this is because industrial growth has been much slower in Punjab, than in other comparator states. Punjab has not been active in promoting Public Private Partnership (PPP) models for the development of infrastructure projects. This is an area where the state can clearly do more and thereby broaden the pool of capital and expertise in improving the states infrastructure. Dominance of small scale industrial units in the landscape of the state creates demand for industrial infrastructure. The strained condition of the states finances serves to undermine confidence in the states ability to provide industrial infrastructure for small scale units. Unsatisfactory performance in infrastructure creation with assistance under the Schemes available from the Government of India. Little state institutional support for industry. Quality Marking Centers and Industrial Development Centers are facing closure. PSIDC and PFC have lost their relevance. 6 The Challenge of upgrading skills Punjab has been slow to take advantage of the National Level Skills Mission to upgrade the infrastructure of its ITIs to address the manpower needs of industrial sector of Punjab. There is also an urgent need for other institutional mechanisms for providing vocational education to endow the youth with skills that are in demand in the market. If Punjab is to make knowledge-based industries as a thrust area for development, then there is need to expand and significantly improve the base for higher education. OPPORTUNITIES 1 Agro-based Industry Any strategy to advance industrialization must exploit the clear advantage that Punjab has in the farm sector. It produces wheat, paddy, other grains, oilseeds, cotton, sugarcane, fruit, vegetables, milk, honey and other animal husbandry products. This provides a strong base of supply of myriad inputs for food processing, dairy and other agro-based industries. The nexus between industry and agriculture can help disseminate best technology and best practices to farmers and thus symbiotically help both the farm sector and the industrial sector. The development of agro-based industries and longer-term contractual arrangements for purchase of produce (as well as the marketing of best quality seed etc.) has the potential of greatly reducing economic uncertainty for both the farmer and the industrial user. The entry of large business houses into the retail and distribution chain for farm products, opens up the opportunity of using these large professionally run companies as instruments for bringing the best technology and practices to the farm sector of Punjab. A highway for moving not just technology in the form of better quality seeds, but also practices that raise the efficiency of water and fertilizer use, check soil quality and offer remedial measures and other technical support programmes for farmers, will greatly complement and enhance the efforts of existing government agencies. As modern retail leads to investment in logistics, cold chains and warehousing facilities, this will encourage agricultural diversification away from food grain into high value vegetables and fruits, which will also help in the conservation of water resources as area under paddy is reduced and will help improve soil quality through crop rotation. 2 Cotton and Other Textiles Punjab is a major grower of cotton and has a long established industry of cotton spinning and weaving. The cotton-to-finished-product chain needs to be advanced through greater efforts at improving the cotton economy and facilitating the expansion of all downstream activities, particularly the manufacture of made-ups and apparel. There is a rapidly growing domestic as well as overseas market for these products. The textiles industry of Punjab already has wool and acrylic fiber base. To sustain the thrust on textiles, some balance with manmade and blended fiber products will have to be maintained to cater to an expanding market for manmade and blended textiles. The facilitation and assistance to the multiplication of Textile Parks is vital to consolidate and expand the textiles base in the state.4 Automotive Components The auto-components industry of India is likely to grow rapidly, given its global competitiveness, and this has strong implications for employment and income generation in Punjab. Punjab has an automotive component industry which caters largely to the lower value replacement market. This is partly the result of no significant automotive producer having set up manufacturing base in the state since the economic reforms were launched in India in 1991. The state government must adopt an imaginative plan to attract modern automotive components manufacturers to set up capacity in the state, while at the same time seeking large scale investments in the automotive sector. 5 Bicycles and Components Punjab is a major centre for the manufacture of bicycles, around which there is a large community of component manufacturers. The state accounts for over three quarters of the bicycle component manufacture in the country. Between 1994 and 2000, the output of bicycles in India stagnated at around 11 million units and has since risen only marginally to over 12 million units, while Chinas output rose from 40 million to over 50 million units, and has further increased to 87 million units by 2007. The growth of bicycles in China is driven primarily by the demand expansion in export markets. There is a tremendous opportunity in the markets of the industrial countries for high-end bicycles for health-conscious buyers, since the domestic production of bicycles in these countries has declined and they are importing mainly from China. Punjab is well placed to rejuvenate the bicycle industry, geared both to the domestic market and to the export market. Collaboration with companies from East Asia, e.g., Taiwan, the second largest exporter, should be used in accessing technological know-how, designs, and market information. 6 Light Engineering, Machine Tools and Hand Tools Punjab has a history of light engineering, machine tool construction and metal fabrication. Most of these units are in the SSI sector and have been rendered uncompetitive by the radical change in the economic environment in the country and the world. The hand tools industry in India is mainly export oriented and is concentrated largely in the small scale sector at Jalandhar and Ludhiana in Punjab and at Nagaur in Rajasthan. Unlike Nagaur, Jalandhar and Ludhiana export 80 to 90 per cent of their production, specializing in spanners, hammers, vices, etc. The hand tools manufactured at Nagaur are mostly sold to dealers/merchants or manufacturers/exporters in Punjab for finishing. Industry clusters/technology parks by providing common facilities and both upstream and downstream sourcing as well as modern technical testing equipment can greatly improve their product quality and competitiveness. Facilitation of technological and commercial linkages with companies in East Asia especially Taiwan, in similar activities will help provide the local units with improved technology, new products and wider markets. 7 Leather, Sports Goods and other manufacturing Activities The leather industry in Punjab is mainly clustered in Jalandhar and specializes in the processing of buffalo hides into finished leather, which is mostly exported. There are about 50 tanneries, and about 20-25 units are ancillaries and manufacturers of leather products like footwear, garments and goods. Compared to other leather clusters like Kanpur and Chennai, the Jalandhar firms have not gone for forward integration into the manufacturing of products like footwear, goods and accessories, thus missing out on value added exports. Clusters and technology park instruments can be used effectively to build on the pre-existing local business in leather products, sports goods and other manufacturing. The Ludhiana knitwear cluster is an unorganized cluster of over 12,000 units in the value chain with around 10,000 knitting units, 500 processing units, 100 machinery manufacturers and 200 spinners, operating mostly in congested residential areas. The cluster employs around 400,000 people and produces an entire range of winter and summer wear including pullovers, T-shirts, sweat shirts, jackets, caps, track suits, gloves, socks, knitted furnishings, shawls and blankets for the domestic as well as international markets. The total turnover of the cluster is estimated at Rs.5000 crores, of which exports account for around Rs.1000 crores. Ludhiana has 90 per cent share of the domestic woolen market and is a significant player in the cotton segment. Ludhiana is also a large manufacturer and primary supplier of cotton knit fabric to units based in Tirupur, Tamil Nadu. The small scale units in these industries need to be helped in modernization so that they can increase the scale, quality and design of their operations and finished products. 8 Pharmaceuticals Punjab has one of the largest Indian pharmaceutical companies domiciled in the state and has several other companies engaged in the business. There are several colleges for training skilled manpower required for the pharmaceutical industry. The state government must focus on enlarging the pharmaceutical and personal hygiene industrial product space in Punjab. 9 Information Technology and Bio-technology Attracting large and high visibility investments is crucial to the development of IT within the state. IT provides opportunities for the state to embark on a path that maximizes employment opportunities for its educated youth. IT is less intensive in the use of land and other natural resources. Many of the IT entrepreneurs in Punjab are relatively small and there is need to create facilitation methods by way of which these units can come up in areas where infrastructure is built and maintained by some form of public private partnership. The technological orientation of the Punjabi farmer and the presence of pharmaceutical industry in the state provide a natural base for the development of Biotech (BT) industries in Punjab. 10 Networking and Gaining from Central Financing Initiatives Punjab has been slow to make use of the Development Schemes of the Government of India to foster the advancement of specific sectors in the state, e.g., Textile Technology Parks, Food Parks, SEZs, Cluster development Schemes, Technology Up gradation Schemes, etc. A more pro-active approach is needed to exploit the opportunities and utilize the funding provided by the Government of India under these schemes. THREATS 1 Geo-political Being a border State, Punjab has had a long history of suffering from the hostilities that have often come from our western neighbor. However, this has not been a major factor in recent years. Although bilateral relations with Pakistan have considerably improved, the continuing difficult conditions in Pakistan and also Afghanistan continue to hold concern for Punjab. 2 Comforts and Self-Satisfaction Punjab is a relatively rich state with one of the highest per capita incomes among the states of India. This comes in part from the relatively advanced farm sector and a small business and trading community, as also the larger number of prosperous Punjabis who are resident in other parts of the country and also overseas. This has resulted in an excessive focus on real estate opportunities which appear to be enormous. The expectations of the nature of the job Opportunities are also higher than they might be in other states. In consequence, greater emphasis needs to be placed on the quality of life parameters when seeking to create employment opportunities, especially for rural youth. The buying power of the Punjabis has boosted real estate development, both housing and commercial. The increase in the price of both urban and rural land has put a lot of disposable income in the hands of many. This has created a false perception that the economy will continue to grow with no evidence of great distress in most sections even if the industrial sector does not take off. There is also widespread skepticism about the possibility of the materialization of any significant improvement in the outlook for industry based on expectation of little change in official policy and bureaucratic attitude. There is a simultaneous sense of complacency and cynicism. If business continues as usual, Punjab would continue to fall relatively behind the Western and Southern states which are moving ahead at an ever faster pace, and are rapidly closing on whatever distance exists between them and Punjab in terms of income. It is extremely important for Punjab to get moving, not to address acute poverty or backwardness but to be able to seize on the full gamut of opportunities that the rapidly growing Indian economy is placing on offer for those who are willing to take the trouble of exploiting them. Only then can Punjab ensure the leadership role that it has had in economic development and broad-based prosperity within India. 3 Pressure on Natural Resources especially soil and water The manner in which the wheat-paddy cycle has been taken forward and the associated excessive exploitation of groundwater has placed the bounty of naturally fertile land and water abundance in Punjab in jeopardy. This trend has to be reversed so that the natural vitality of the farmland of Punjab is restored. Recharging of water resources is perhaps the single most important challenge facing the economy of Punjab. A suitable industrial strategy can help fashion a response to this challenge which will enhance both the short-term and the longer-term productivity of farming activities in the state. [footnoteRef:16] [16: http://www.unido.org/fileadmin/user_media/Publications/Pub_free/Punjab_industrial_review.pdf)]

REFRENCES:

www.innovativejournal.inhttp://www.investopedia.com/terms/e/export.asphttp://www.tradingeconomics.com/india/exportshttp://EzineArticles.com/5356745http://www.tradechakra.com/indian-economy/exports/index.htmlhttp://business.mapsofindia.com/sectors/exports/http://www.tradechakra.com/indian-economy/exports/index.htmlhttp://www.dnb.co.in/Exporters/Key%20Highlights.asphttp://business.mapsofindia.com/sectors/exports/major-products.htmlhttp://www.tradingeconomics.com/india/exportshttp://www.dnb.co.in/Exporters/Key%20Highlights.asp)http://www.dsij.in/article-details/articleid/4476/top-ten-exporters-of-india.aspx Synopsis pdfhttp://www.unido.org/fileadmin/user_media/Publications/Pub_free/Punjab_industrial_review.pdf

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