invst opprtnity in india

8/14/2019 Invst Opprtnity in India

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Investment Opportunities in

India


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Indian Economy An Overview

Economic Growth Sustained economic performance

Average since 1991 6.2% 2004-05 6.9% Forecast till 2050Goldman Sachs 5 % p.a.

Services account for over 50% of GDP

Manufacturing sector grew at 9% in 2004-05

Trade (2004-05) Exports growth 24% in 2004-05 reaching US$80 billion

Imports growth 35% reaching US$106 billion

Investment Foreign Investment - US$16 billion in 2003-04

Mature Capital Markets NSE third largest, BSE fifth largest in terms of number of

trades

Well developed banking system


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Fiscal Reforms

Rationalisation of tax structure both directand indirect Progressive reduction in peak rates of

duties; Direct and indirect taxes further reduced this

year Peak Custom duty reduced to 15% Corporate Tax reduced to 30% Tariff to be aligned with ASEAN levels

Value Added Tax introduced from 1st April

2005 Rupee made fully convertible on trade

account

India among thetop reformers in

2003: World

Banks DoingBusiness in 2005


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Made in India

Third most attractive destination for manufacturing ATKearneys FDI Confidence Index 2004

Indian industry equally competitive in a wide range ofmanufacturing skill-intensive products:

Apparels, electrical and electronics components;

speciality chemicals; pharmaceuticals; etc. Automotive components: Major MNCs & their OEMs

sourcing high-quality components from India

Volvo, GM, GE, Chrysler, Ford, Toyota, Unilever,Cliariant, Cummins, Delphi

Indian companies now having manufacturing presencein multiple countries

Over 55% of approved outward investment by Indiacompanies in manufacturing activities


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Human Resources

Indias competitive edge - its highly-skilled manpower Over 380 universities (11200 colleges)

1500 research institutions

Over 200,000 engineering graduates

Over 300,000 post graduates from non-engineeringcolleges

2,100,000 other graduates Around 9,000 PhDs

Knowledge workers in software industry increased from56,000 in 1990-91 to 650,000 in 2003; to reach 2 million by 2008

Due to its young demographic profile, India would

continue to be surplus in working population for a long-time


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Competitive Strengths

Rank out of 102 countries

Availability of scientist and engineers 3

Quality of management schools 8 State of cluster development 17

Quality of scientific research institutions 20

Government intervention in corporate investment 34

Quality of educational system 36

Sophistication of financial markets 37 Foreign ownership restrictions 41

(Source: World Economic Forums Global Competitiveness Report, 2003-04)


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Investing in India Entry Routes

Automatic RoutePrior Permission

(FIPB)

Investing in India

General ruleNo prior permission

requiredOnly information to theReserve Bank of Indiawithin 30 days of inflow/Issue of shares

By exceptionPrior Government

Approval needed

Decision generallyWithin 4-6 weeks


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Policy on FDI

FDI up to 100% is allowed under the AutomaticRoute in all activities except:

Sectors attracting compulsory licensing

Transfer of shares to non-residents under certaincircumstances

Investor having existing venture in same field

Equity/route limit in few sectors under sectoralpolicies

Investment made receive National Treatment

Bilateral Investment Promotion and ProtectionAgreement with 57 countries

National and Most Favored Nation Treatment toinvestment; Investment protection features


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100% FDI Under Automatic Route

Infrastructure Sector

Electricity generation (except atomicenergy)

Electricity transmission & distribution

Mass Rapid Transport System

Roads and Highways

Toll Roads & Vehicular bridges

Ports and Harbors

Hotel and tourism

Townships, housing, built upinfrastructure and construction

development

Manufacturing Activities

All manufacturing activities exceptdefence items

items reserved for small-scalesector

Services Sector

Health, education, Research &Development services

Tourism services;

Consultancy services

Construction & design services.


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RecentPolicyInitiatives

FDI up to 100% allowed under the automatic routefor development of townships, housing, built upinfrastructure and construction developmentprojects

FDI in domestic airlines increased to 49% andallowed under automatic route

Fresh guidelines for investment with previous joint

ventures in same field issued

Transfer of shares from residents shareholders puton automatic route


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India: FDI Outlook

Third most attractive investment destinationAT Kearneys FDI Confidence Index, 2004 Second most attractive destination for manufacturing and

telecommunication services

Among the top 3 investment hot spots forthe next 4 years UNCTAD & Corporate Location April 2004

Most Preferred Off shoring destination - AT

Kearneys 2004 Offshore Location AttractivenessIndex


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Civil Aviation

Investment Policy In the airports, FDI up to 100% permitted

In domestic airlines, FDI up to 49% permittedsubject to no direct or indirect equity participationby foreign airlines 100% investment by NRIs

Investment Opportunities Modernisation of International airports at Delhi,

Mumbai, Chennai and Kolkata

Modernisation of non -metro airports

Private sector participation is allowed in supportservices and aircraft manufacture


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Civil AviationProject on Offer

Development of Metro and non Metro Air ports

1. Modernisation of Chennai Airport US $ 444 million

2. Modernisation of Kolkatta Airport US $ 177 million

3. Modernisation of Delhi Airport US $ 666 million

4. Modernisation of Mumbai Airport US $ 555 million

5. Development of 25 non Metro Airports US $ 888 million

6. Development of Greenfield Airport at Goa US $ 340million

7. Development of Greenfield Airport at Pune US $ 340 million

Contact person: Ms. S. Narendra, Deputy Secretary, Ministry of Civil Aviation, TeL; 24610987


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Civil Aviation


Passenger By 2010: 90-100 million (59 million domestic passengers & 35million intl. Passengers)

Cargo By 2010: 3360 thousand tonnes Airports Traffic Projections

Airports Traffic Projections


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Special Economic Zones

Policy Duty free zones, deemed foreign

territories

FDI up to 100% permitted inalmost all manufacturing activities

Transfer of goods from DTA to

SEZ treated as exports, Units to be net foreign exchange

earner within 5 years. No exportcommitments

No limits on DTA sales

Can be set up in the public,

private or joint sector Single Window Clearance System

Incentives For developer: Income tax

exemption for a block of 10 yearsin 15 years

For units: 100% Income Taxexemption for first 5 years, 50%for next 5 years and 50% of theploughed back export profits for

next 5 years Exemption from indirect taxes;

excise, sales, services tax, etc.

Freedom to raise ECB with outany maturity restrictions

New Lawon SEZ


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Thank You


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Telecommunications

1.6 3.15.5

10.5

28.2

48.7

1.52.4

5

17.7

19.5

6

0

10

20

30

40

50

60

2000 2001 2002 2003 2004 2005

(up to

April)

No.

inmillion

Among the fastest growing telecom markets 550,000 km of optical fibre cable laid

Cellular phones increasing by 2 million every month

To reach 200 million in 3 years

Lowest mobile tariff in the world

Share of privet sector 46%; expected to cross 50%

by year end

Tele-density of 9, expected to be 20 in next threeyears

New Broad Band Policy envisages:

20 million broadband subscribers by 2010

Investment Opportunities

Setting up manufacturing facilities;

Supply of hand sets and equipments

Telecom & Value added service.


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Roads Policy:

FDI up to 100% is permitted for construction andmaintenance of roads, highways, vehicular bridges, tollroads, vehicular tunnels.

Ten year tax holiday for road and highway projects;

Investment Opportunities

India has a road network of 3.3 million kilometers

18,000 km of highways being developed under NationalHighway Development Programme; Investment US$20 billion envisaged

Projects for 10,000 km would be on offer

Major programmes being taken up

Many more opportunities in the States;


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Ports

Policy & Incentives

FDI up to 100% permitted for construction andmaintenance of ports and harbours.

Ten year tax holiday

Public-private partnership

12 major ports, 185 minor ports

12 private/ captive projects with investment ofUS$ 600 million completed

24 projects with investment of US$1.6 billionunder implementation/award

Investment requirement of US$22 billion to

develop maritime sector Ports & Shipping

Inland waterways


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Tourism

Contact person: Mr. AmitabhKant, Joint Secretary, Ministryof Tourism,

Investment Policy

FDI up to 100% is allowed under the automatic route in townships, housing,built-up infrastructure and construction development projects includinghousing, commercial, premises, hotels, resorts, hospitals, educationalinstitutions, recreational facilities etc.

Projects on Offer International Trade cum Convention Centre , Jaipur

Offered to private sector for designing, finance, construct, operate and maintain thefacility

Estimated cost Us $ 22 million Time frame for implementation 18 months

Development of Tijara Fort, Alwar Private sector would require to restore the Fort and develop interior & surroundings

of the fort, would be provided for long term lease Estimated cost Us $ 5.5 million Time frame for implementation 18 months

Championship Golf Course, Udaipur, Jodhpur or Jaipur Land would be acquired and offered on long term lease Estimated cost Us $ 5.5 million excluding land cost Time frame for implementation 18 months

International Convention Centre , Bangalore Karnataka Govt would acquire the land for investors Facilities to be provided in convention Centre : Exhibition space of 50000 sq Mt, food

court, Conference Hall & suites, Convention Centre, shopping malls, health club, golf

course, % & 7 star hotels, handicraft village, multiplexes etc. Estimated cost Us $ 111 million
http://rds.yahoo.com/S=96062857/K=Jaipur/v=2/SID=w/TID=I038_76/l=II/R=8/SS=i/OID=e5019d155414b07c/SIG=1m690iget/EXP=1119084259/*-http%3A//images.search.yahoo.com/search/images/view?back=http%3A%2F%2Fimages.search.yahoo.com%2Fsearch%2Fimages%3Fp%3DJaipur%26sm%3DYahoo%2521%2BSearch%26fr%3DFP-tab-img-t%26toggle%3D1%26ei%3DUTF-8&h=167&w=318&imgcurl=www.india-tours.com%2Fhotels%2Findia%2Fjaipur%2Fthree-star%2Fhotel-trident-jaipur.jpg&imgurl=www.india-tours.com%2Fhotels%2Findia%2Fjaipur%2Fthree-star%2Fhotel-trident-jaipur.jpg&size=13.4kB&name=hotel-trident-jaipur.jpg&rcurl=http%3A%2F%2Fwww.india-tours.com%2Fhotels%2Findia%2Fjaipur%2Fthree-star%2Fhotel-trident-jaipur.html&rurl=http%3A%2F%2Fwww.india-tours.com%2Fhotels%2Findia%2Fjaipur%2Fthree-star%2Fhotel-trident-jaipur.html&p=Jaipur&type=jpeg&no=8&tt=75,669&ei=UTF-8


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UrbanInfrastructure

FDI Policy

FDI upto 100% is allowed in townships, housing, built-upinfrastructure and construction development projects

Opportunities Us$ 26 billion proposed to be invested in next 5 years in

urban infrastructure in 60 cities as a part of NationalUrban Renewal Mission

The Mission covers physical infrastructure such as water,lighting, sanitation, energy & housing.

CII


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Petroleum RefiningStatus

Total 18 refineries with production of 116 million tonnes (April- Feb.2004-05) in terms of crude through put. by the year 2006-07 demand is expected to increase to 155 million tonnes

per annum.

FDI Policy FDI is permitted up to 100% under automatic route in private sector

Indian companies

Investment opportunities Additional refining capacity of about 110 million tonnes per annum

excluding EOUs is planned for implementation by the end of tenthplan( 2002-07) Investment requirement of over US $ 22 billion.

Opportunity for the transfer of technologies for upgrading the bottomof the barrel and to meet the predominant demand for middledistillates and also to improve the quality of petroleum products tomake them environment-friendly and globally competitive.


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Banking Sector

Status

No of Scheduled Banks: 362( As on March 2003) *

Indian Private Sector Banks: 30 (market share: 10%)

Foreign Banks: 36 (market share: 12%)

FDI Policy

FDI up to 74% from all sources under automatic route ispermitted in Private Sector Banks subject to conformity ofguidelines issued by RBI

Foreign Bank can also establish as branch or Wholly owned

subsidiary

* Source: Indian bank Associationhttp://www.indianbanksassociation.org/home/
http://images.google.co.in/imgres?imgurl=http://www.winbank.gr/Documents/PressKit%2520images/atm%2520big%252001.jpg&imgrefurl=http://www.winbank.gr/ecportal.asp%3Fid%3D220988%26nt%3D84&h=407&w=472&sz=69&tbnid=S74W2nWENiYJ:&tbnh=107&tbnw=124&hl=en&start=3&prev=/images%3Fq%3DATM%26hl%3Den%26lr%3D%26sa%3DG


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Textiles

Indian textiles sector:

Turnover US$37 billion;

Exports US$13 billion;

Investments of US$11 billion in the last five years;

India is 2nd largest producer of cloth and 3rd largest

producer of cotton yarn;

Textiles sector has the potential to reach US$85billion by 2010

Exports can reach US$50 billion

Garments to account for 50% of exports; Investment required US$30 billion


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Pharmaceuticals

Indian Pharmaceutical : A US $ 4 billion industry (retail sales)

Exports: US $ 3.18 billion (2003-2004)

The country ranks 4th worldwide accounting for 8% of worlds production by

volume and 1.5% by value.

Opportunities

Due to rising costs of R&D overseas, greater tendency towards outsourcingand networking.

Increasing competence in molecular biology, immunology and biotechnology

Potential for clinical research and initiating clinical trials

An efficient and cost effective source for procuring generic drugs especiallythe drugs going off patent in the next few years.


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Biotechnology

Indias inherent strengths Rich Biodiversity Large reservoirs of valuable diagnostic and clinical data Vibrant and inventive pharmaceutical industry; World class network of educational and research institutions Known strengths in mathematics, logic and computational

skills Super Computing and Software strengths enable extensive

use of bio-informatics in new drug discovery

Opportunities : Biotech based new drugs / pharmaceuticals Bio-technology parks get all facilities of 100% EOU


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Food Processing Third largest producer of food items

Largest milk producer Largest livestock population; 2nd largest in fruits & vegetables

Opportunities in food processing sector 50% of household income spent on food items With increasing income levels and urbanisation fast

growth in demand of processed food expected; over250 million strong middle class

Low levels of value addition in food sector: only 7%

New Integrated Food Law being enacted Investment of US$ 28 billion required to raise food

processing from 2% to 8-10%. Investment opportunities in

Processing of fruit & vegetable, meat, fish & poultry,milk products, packaged food & drinks.

Establishing infrastructure, cold chain, etc.


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PowerProjects on offer

Bairabi dam Hydro Electric project (80mw)Mizoram Ministry of environment and forests has granted environment

clearance to the project.

CEA has issued techno economic clearance of the project

Athirapilly Hydro Electric project (160 MW) Kerala Ministry of environment and forests has granted environment

clearance to the project.

Techno economic clearance of the project has been accorded

Matnar Hydro Electric Project (60 MW) Chhattisgarh Environment and forest clearances are yet to be obtained.

Techno economic clearance of the project has be accorded

Contact person: Mr. Dev Dutt, Under Secretary, Ministry of Power,

TeL; 23715507


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Power

Projects on offer

Private Sector Hydro ElectricProjects

Dhamwari Sunda (70 MW) Himachal Pradeshby M/s Dhamwari Power Company Ltdeconomic clearance of the project has beenaccorded

Alliain Duhangan (192 MW), HimachalPradesh , by M/s A.D. Hydro Power Ltd

Karcham Wangtoo (100 MW) HimachalPradesh by Karcham Hydro Corporation Ltd.

Srinagar (330 MW), Uttaranchal by M/sAlaknanda hydro Power Co. Ltd.

Contact person: Mr. Dev Dutt, Under Secretary, Ministry of Power,