India Country -Emerging Economy

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India
Emerging Economy

By : Amit Rathod Exec. PGDM 2010-11

Geographic & climatic conditions
Geographical Location:
Southern Asia, bordering the Arabian Sea and the Bay of Bengal, between Burma , Pakistan, china , Nepal.

Land boundaries:
Total: 14,103 km border countries: Bangladesh 4,053 km, Bhutan 605 km, Burma 1,463 km, China 3,380 km, Nepal 1,690 km, Pakistan 2,912 km

Population
Population: 1,191,000,000 (2010 estimated)

‡ Growth rate: 1.548% (2009
estimated) Age structure: 0-14 years: 31.1% 15-64 years: 63.6% 65-over: 5.3%

Source : http://en.wikipedia.org/wiki/Demographics_of_India

Indian Flag
The Indian flag is a horizontal tricolor in equal proportion of deep saffron on the top, white in the middle and dark green at the bottom. The ratio of the width to the length of the flag is two is to three. In the centre of the white band, there is a wheel in navy blue to indicate the Ashok Chakra, is a symbol dating back to 2nd century BC. Its diameter approximates the width of the white band and it has 24 spokes, which intends to show that there is life in movement and death in stagnation. The saffron stands for courage and sacrifice; the white, for purity and truth; the green for growth and auspiciousness

India 2nd in global competitiveness

Source -Press Trust Of India / Washington July 11, 2010, 0:38 IST

Firms in India Globally Competitive

India

Constitution of India : Democratic system
The Constitution of India (Hindi: ) is the supreme law of India. The framework defining fundamental political principles, establishing the structure, procedures, powers and duties, of the government and spells out the fundamental rights, directive principles and duties of citizens. Passed by the Constituent Assembly on 26 November 1949, it came into effect on January 26, 1950. Supervised by Dr. Rajendra Prasad & B. R. Ambedkar, as chairman of the Constitution Drafting Committee, was the chief architect of the Indian Constitution.

Institutions : Legal

The Indian Judicial System has the Supreme Court of India is located only in the capital city Delhi, without any benches in any part of the nation, and is presided by the Chief Justice of India

Investor Friendly, Liberal open market economy
‡ Government is focusing on business & investment environment ± No licensing required except in five sectors ± 100 % FDI permitted in manufacturing (except atomic energy) ± 100 % FDI permitted in most services sector ± Foreign investment allowed in capital market

‡ State Government compete for Investor friendly image

Infrastructure :Finance
Infrastructure funding has come a long way to go in India. Foreign investors are comfortable with the idea of investing in Indian infrastructure The average internal rate of return (IRR) on infrastructure projects in India is about 15-20 per cent. India needs US$320 billion in infrastructure 11th Plan(20072012)

Infrastructure : Indian Telecom Industry
Average growth rate of over 40% in respect of subscribers The tele-density of India at about 23 per cent coupled with its billion-plus population offers immense growth potential for the telecom services sector

Infrastructure : Civil Aviation
Totally 125 civil airports in India including the 11 designated international airports. Of these only 94 airports only are presently operational. Economic survey report , there had been record growth of over 25% in the air traffic in India in the last three years

Infrastructure : Railways
India has one of the largest railway networks in the world (63,000 KMs route network) Accounts for 30% of total freight traffic Traffic volumes set to double by 2016 Potential for rolling stock, passenger coaches, track equipment, signaling equipment

Infrastructure : Highways & Roads
‡ India has an extensive road network of 3.3 million Kms ± the second largest in the world. Roads carry about 61% of the freight and 85% of the passenger traffic. Highways/Expressways constitute about 66,000 Kms (2% of all roads) and carry 40% of the road traffic. The Government of India spends about Rs.18000 Crores (US $ 4 billion) annually on road development.

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‡

Infrastructure : Power
Electricity is the most important infrastructural input in the development and growth of economy. India, which posted a 9.4% GDP growth last fiscal, has an installed capacity of 132,110 mw. India s investment requirements for power generation and transmission will be tune of $200 billion, to be able to fulfill projected demand by 2012.

Power Reach & Cost per Unit
Per capita consumption Around 606 units. Customers registered as being from the agriculture sector, 85 paise/kWh (0.6 U.S. cents/kWh), were far below the overall average price (208 paise/kWh). This occurred at the expense of commercial consumers (354 paise/kWh), industry (350 paise/kWh, 7.8 U.S. cents/kWh) and railway hauling (411 paise/kWh).

Infrastructure : Ports
India has around 12 major ports and 185 minor ports with a coastline of 7517 Km. Twelve major ports Kolkata, Paradip , Visakhapatnam, Chennai, Ennore, and Tuticorin on the east coast and Cochin, new Mangalore, Mormugao, Jawaharlal Nehru at Nhava, Mumbai and Kandla on west coast. India has the largest merchant shipping fleet among the developing countries and is ranked 17th in the world
In Million tons

Indian macroeconomic Indicators : GDP Growth
10 9 8 7 6 5 4 3 2 1 0

GD Growth Rate (%)

GDP - composition by sector: Agriculture: 17.1% Industry: 28.2% Services: 54.6% (2009)

9 0 1 2 3 4 5 6 -7 8 9 8-9 999-0 000-0 001-0 002-0 003-0 004-0 005-0 2006 007-0 008-0 eb) F 199 1 2 2 2 2 2 2 2 2 to p 0 (u -1 009 2

Source : CIA World Fact book

Macroeconomic environment

Macroeconomic environment
Foreign Reserve (US $ Bn)
350

300

288

250 220 200 192

243

150

144 148

Foreign Exchange (US $ Bn) Reserves

100 75 50 20 5.3 0 5.4 8.4 9.6 18 22 28 38 42 46

84

32

Yr-91 Yr-92 Yr-93 Yr-94 Yr-95 Yr-96 Yr-97 Yr-98 Yr-99 Yr-00 Yr-01 Yr-02 Yr-03 Yr-04 Yr-05 Yr-06 Yr-07 Yr-08 Yr-09 Yr-10

Higher education and Training
India is the second largest Education market of the world & India spends about 5% of its GDP in education. With more than 55 percent of its 110 million population is under the age of 25 by 2010, is the indicator of potential educational market in India. India has around 370 universities and 18000 colleges with 12 million students on their rolls, and half a million teachers teaching in all disciplines. India currently has around 115 universities and 2,100 colleges, which teach various engineering disciplines. Engineering colleges in the country have been growing at 20 per cent a year, while business schools have grown at 60 per cent.

Goods market efficiency : Industrial production
‡ Industrial Production in India expanded 1.6 percent in December of 2010. Industrial production measures changes in output for the industrial sector of the economy which includes manufacturing, mining, and utilities. Industrial Production is an important indicator for economic forecasting and is often used to measure inflation pressures as high levels of industrial production can lead to sudden changes in prices. From 1994 until 2010, India's industrial production averaged 7.49 percent reaching an historical high of 17.70 percent in December of 2009 and a record low of -0.20 percent in December of 2008

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‡

Healthcare
‡ By the year 2010, India has the best mass health care delivery system in the world. Because our country produces the largest number of doctors in the world. India also produce the largest number of nurses and technicians. The India is the only country in the world which can provide quality healthcare service to the patients of developed countries at around 40 to 50% of the price charged for treatment at developed countries.

‡

‡

Primary Education
‡ Primary education is the foundation on which the development of every citizen and the nation as a whole built on. India has made a huge progress in terms of increasing primary education enrolment, retention, regular attendance rate and expanding literacy to approximately two thirds of the population. GOI and States increasingly recognize education as a critical input for human capital development, employment/ jobs, and economic growth, and are putting major financial and technical resources into this effort

‡

‡

Labor market efficiency

Unemployment Rate

Financial market development : India Exports
‡

India exports were worth 22500 Millions USD in December of 2010. Exports amount to 22% of India s GDP. Gems and jewellery constitute the single largest export item, accounting for 16 percent of exports. India is also leading exporter of textile goods, engineering goods, chemicals, leather manufactures and services. India s main export partners are European Union, United States, United Arab Emirates and China

Financial market development : India Imports
India imports were worth 25100 Millions USD in December, 2010. India is poor in oil resources and is currently heavily dependent on coal and foreign oil imports for its energy needs. Other imported products are: machinery, gems, fertilizers and chemicals. Main import partners are European Union, Saudi Arabia and United States.

Science and Technology
India s science and technology, seems finally to find its feet. In January 2007, ISRO successfully recovered an orbiting satellite. It is a technology that only China, the EU, Russia and the USA possess. In April 2007 ISRO commercially launched and Italian scientific satellite Agile into orbit and entered the international satellite launch market. Successful launch of the Geosynchronous Satellite Launch Vehicle, (GSLV-F04), which placed a 2-tonne communication satellite, INSAT-4CR into orbit. Successfully tested an indigenously made cryogenic engine to power GSLVs. Indian made super-computer ranked in the top-10 in the world

What is e-commerce?
Includes:
Online business to business transactions Online business to consumer transactions Digital delivery of products and services Online merchandising Automated telephone transactions eg phone banking E commerce in India is at low cost

1 Consumer finds
something she wants to buy at a ³shop´ on the Net Shop

6
Verification and remittance of actual funds

2

Consumer sends on enciphered request for payment to her bank

3

The electronic bank sends back a secure packet of ecash Merchant Server

Consumer¶s Bank

Consumer Public Key

5

4

Consumer sends the ecash to the shop

The shop sends the packet of cash to its bank

Shop

Merchant Bank

Technological readiness:Exports of IT Services
India is home to large number of IT professional, who have the necessary skill and expertise to meet the demands and expectations of the global industry. The cost of skilled Indian work force is reasonable low compared to the developed nation. India has huge pool of English speaking IT professional. This is why IT speaking countries like US & UK are depend upon India for IT Skill out sourcing.

Market size : Retail
Retail Industry market size is $650 billions by 2010. The high growth in the retail sector in India is primarily driven by the impact of rising incomes, increasing urbanization, greater brand competition, changing lifestyles. India's vast middle class and its almost untapped retail industry are key attractions for global retail giants wanting to enter newer markets.

Business sophistication
Business sophistication is conducive to higher efficiency in the production of goods and services. It leads, inturn, to increased productivity, thus enhancing a nation s competitiveness. ‡ Process of continual improvement of quality & quantity through value chain.

Business sophistication ± Indian Top companies in world

Innovation : Policies
The final pillar of competitiveness is technological innovation. Indian Pharama Industry expenditure in R & D 8-9 %. Bio Technology - India is among the first few countries in the developing world to have recognized the importance of biotechnology as a tool for advancing growth in the agriculture and health sectors . Department of Biotechnology (DBT)- The DBT has established a huge infrastructure of 55 globally networked bio-informatics centers and supports. Presently, 15,000 scientists are estimated to be engaged in India s biotechnology sector. India s Information-Communications-Technology (ICT) sector : It exports software to over 102 countries around the globe and one out of every four global giants outsourced their software requirements to India. E-Commerce - Electronic commerce means business conducted by means of computer networks. online services such as banking, ticketing (including airlines, bus, railways), bill payments, hotel booking etc. have been of tremendous benefit for the customers.

India-China Trade Relations
India has emerged as the 7th largest export market of China and 10th largest trade partner.
y Handpicked three commodities from the basket of commodities that India exports to China. These are y Iron & Steel y Cotton y Organic Chemicals

India AND China: Engines of global growth
1/3 rd of humanity: Demanding goods and services from the world 1/4 th of high-skilled manpower: Providing goods and services to the world In 2025, the combined GDP of India and China will be roughly equal to that of G-7 minus US (i.e. Japan, Germany, France, UK, Canada and Italy).
India and China cannot afford to ignore each other.

Bibliography
http://www.unicef.org/infobycountry/india_statistics.html http://www.indiastat.com http://www.worldbank.org.in/WBSITE/EXTERNAL/COUN http://www.rbi.org.in http://www.indiainfraguru.com/ http://www.wto.com http://www.youthxchange.net/main/ff4b265_india-p.asp http://www.asiape.com/aper/aper_issues/aper1101.html

Thank you

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