FSA Research Project

about fsa

the fsa Research Project is one of the projects organized by the Financial Study association Amsterdam (FSA), which is the largest financial study association in the Netherlands. It is administered by students from the University of Amsterdam and the VU University Amsterdam.

The objective of the FSA is to bridge the gap between the theory as taught in university and the practice of the business field. We do this by organizing several national and international projects during the year. In this way, students participating in the FSA have the opportunity to meet their future employer and develop personal and professional skills while participating companies get the possibility to meet top students in the final stage of their study.

The projects of the FSA refer to the subjects Banking, Investments, Consultancy and Accountancy. These subjects are covered in the following well-known projects: London Banking Tour, International Banking Cycle, Beroependagen, FSA Congres, Consultition, Traders Trophy and the international FSA Research Project. We also publish the FSA Magazine which contains academic articles and interviews with people working in the financial industries.

All activities of the FSA are organized by students from both universities of Amsterdam with an interest in finance. The FSA cooperates with many companies and also with other financial study associations in Groningen, Maastricht, Rotterdam and Tilburg within the Financial Association Netherlands (FAN).

Innovation, ambition and enthusiasm are the elements people of the FSA share. This is also reflected in our slogan: ‘The urge to improve is what makes the difference’. It has made us what we are today and stimulates us to find new and better ways to bring students and employers closer together. The FSA is always looking for talented members and the Research Project is one of the opportunities to join us.

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IntroductIon 4

commIttee and partIcIpants 6

advIsory Board 8

commIttee of recommendatIon 10

What We offer 12

clIent BenefIts 14

research experIence 15

aBout IndIa 16

doIng BusIness In IndIa 20

CoNTeNT

Financial Study association Amsterdam (FSA)Roetersstraat 11Room e2.111018 WB AmsterdamThe NetherlandsT: +31 (0)20 525 65 12F: +31 (0)20 525 59 16e: [email protected]: www.fsaresearchproject.nl

FSA Research Project Committee 2011-2012

Roderik Dirckx (Treasurer)Sjoerd Keilman (Coordinator)Tim Neuteboom (Chairman)Hanne Schlaghecke (external Relations)Maud Wijsman (Coordinator)Michelle Wolters (external Relations)

CoLoPHoN

This brochure was compiled to promote the FSA Research Project India. The Research Project is a project of the Financial Study association Amsterdam. For more information, please visit www.fsa.nl or www.fsaresearchproject.nl

All rights reserved.

FSA Research Project | 3

INTRoDUCTIoN

The FSA Research Project is proud to present its destination for 2012: India. In July and August, a team of twenty highly talented and motivated students will conduct international research for companies with aspirations towards emerging markets. extensive training and supervision by knowledgeable experts in the preparatory phase will have the team fully prepared for departure.

The economy of India is a developing and influential market economy. It currently is the fourth largest economy in the world based on the purchasing power parity. India has a fast developing economy, a potential market of 1,2 billion consumers and a young, educated english speaking working population combined with relatively low cost of labor. Future prognoses are positive and the economic growth rate is estimated between 8% and 10% in the coming years. Some of the most promising sectors in India are: infrastructure, ICT, energy and environment, healthcare and the maritime sector. The promising growth in the Indian consumer market and the young, educated and hardworking labor force offers a lot of opportunities for foreign companies.

The FSA Research project is an excellent opportunity to provide answers to your business questions. We deliver tailor made professional consultancy services and research reports for companies with international aspirations. As the FSA operates on a non-profit basis, company specific research can be conducted at a competitive price. The quality is guaranteed by years of experience, the careful selection of the researchers, seminars and language courses from knowledgeable experts, and guidance by the best professors the city of Amsterdam has to offer.

This brochure is intended to inform you about the structure of the FSA Research Project and how we can add value to your business. If you have any further questions, please do not hesitate to contact us. We are more than happy to meet you and to provide additional information.

Kind regards,

Committee FSA Research Project 2012 India


IntroductionBy Uri Rosenthal, Minister of Foreign Affairs

The Financial Study Association Amsterdam (FSA) has chosen India as the site of its Research Project for 2012. Last year the FSA selected another BRICS country, South Africa; in 2010 the Research Project focused on China. India is therefore a logical choice.

The emerging BRICS market bloc – Brazil, Russia, India, China and South Africa – is playing a more prominent role in the world. 2011 has been a unique year for the BRICS countries, as all of them have had a seat (as either a permanent or a non-permanent member) on the UN Security Council. In these times of global economic challenges, BRICS countries such as India play a crucial role in forums like the G20, where advanced and emerging economies can learn from each another and work together collectively.

India is projected to become the world’s third largest economy by 2030. But to get there, it will need sustained growth over the coming years. India’s economy has grown by an average of 7.5% each year for the past decade, and foreign companies are eager to compete in India’s growing markets and take advantage of investment opportunities. one example is the enormous investments India expects to make in infrastructure such as roads, maritime ports and airports.At the same time, the modernisation of India and the lifting of hundreds of millions of Indians out of poverty necessarily remains the focus of the Indian government. This extraordinary – and so far extraordinarily successful – effort requires that India sustain its high rate of economic growth and open markets for its goods and services, while attracting the investment needed to realise its vision of inclusive development.

The Indian economy offers many opportunities for trade with and investment from the Netherlands. The Dutch government encourages and facilitates foreign trade and investment: they are the engines that power our growth, and it is essential that we keep this engine going. With our network of embassies, consulates and business support offices we stand ready to assist entrepreneurs and corporations that are considering investing abroad, for instance in India.

The main sectors in Dutch exports to India are machinery and machine parts, chemical products and manufactured

goods. India’s exports to the Netherlands are mainly agricultural products, machinery, transport equipment, garments and textile products, and chemical products. Mutual investments show a positive development, making the Netherlands among the top five largest foreign investors in India. Indian foreign direct investment in the Netherlands is also on the increase. The Netherlands is one of the largest recipients of Indian Foreign Direct Investment (FDI). Indian companies value our country as an excellent investment location, also for their european expansion plans. The Netherlands is ‘the Gateway to europe’.

The following fields have been identified as particularly promising for further trade, cooperation, and investment between our countries: the automotive industry, agri-business, infrastructure/logistics/port development, ICT, life sciences & health (including the medical sector and biotechnology), water management and water technology, and creative industries.

The FSA Research Project offers companies that are investing in India, or are considering doing so, an excellent opportunity to conduct company-specific research. This is a win-win situation: the highly qualified students participating in the Research Project gain valuable experience and a detailed view of how international companies operate; the corporations benefit from tailor-made answers to questions which they do not have the time or manpower to investigate themselves.

Previous Research Projects, including 2010’s project in China and 2011’s project in South Africa, proved to be a big success.

I am sure the ‘incredible India’ experience will be equally successful.

uri RosenthalMinister of Foreign Affairs of the Kingdom of the Netherlands


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CoMMITTee

roderik dirckxtreasurerbsc future Planet studies

sjoerd KeilmanCoordinatorMSc Business Administration: Financial Management

tim neuteboomChairmanMSc Business Administration: Financial Management

hanne schlagheckeexternal RelationsMSc Business Administration: Strategy and organization

maud WijsmanCoordinatorBSc Business Administration

michelle Woltersexternal RelationsBSc Business Administration


roderik dirckxtreasurerbsc future Planet studies

sjoerd KeilmanCoordinatorMSc Business Administration: Financial Management

tim neuteboomChairmanMSc Business Administration: Financial Management

hanne schlagheckeexternal RelationsMSc Business Administration: Strategy and organization

maud WijsmanCoordinatorBSc Business Administration

michelle Woltersexternal RelationsBSc Business Administration

PARTICIPANTS

ahron ZijlstraBSc Finance

fenna van KempenMSc Public International Law

leonard driessenPre-MSc Business Administra-tion: Management Consulting

marloes van deursenMSc Marketing

arthur van amerongenBSc European Studies

Janneke BrouwerBSc European Studies

leonard houwelingMSc Business Administration: Financial Management

Myrthe BastingsMSc Business Studies: Marketing strategy

Bas van KlaverenBSc International Business Administration

Juliette BonsenBSc International Business and Management

lianne van WestrhenenBSc Communication Science

pieter van der straatenMSc Business Administration: Financial Management

emilie majoorBSc Finane and Organization

Justin PaarlbergBSc Economics and Business

marijn tripMSc Business Administration: Financial Management

tim rutgersMSc Business Administration: Strategy and Organization

ADVISoRy BoARD

prof. dr. a. lucas FinanceAndré Lucas is an expert in Financial Risk Management, Asset Pricing, and Financial econometrics. His research focuses on empirical modelling issues for market and credit risk, in particular at the portfolio level. He has published on this topic in journals such as Journal of econometrics, Journal of Business and economic

Statistics, Applied Mathematical Finance, and Journal of Banking and Finance.

prof. dr. a.W.a. Boot Financearnoud boot is Professor of Corporate finance and Financial Markets at the University of Amsterdam and director of the Amsterdam Center for Law & economics (ACLe). He is a member of the Dutch Social economic Council (SeR) and the Bank Council of the Dutch Central Bank (DNB). He is also advisor to the Riksbank (Central Bank of

Sweden), Research Fellow at the Centre for economic Policy Research (CePR) in London and at the Davidson Institute of the University of Michigan. Prior to his current positions, he was on the faculty of the J.L. Kellogg Graduate School of Management at Northwestern University in Chicago, and during 2000-2001 he was a partner in the Finance and Strategy Practice at McKinsey & Co. In addition to his academic activities, professor Boot advises extensively on ownership structure issues, particularly related to the public/private domain. He is frequently involved in legal cases (expert opinions), and is consultant to several financial institutions and corporations. His consultancy activities concern the regulation and strategic positioning of financial institutions, corporate finance, governance and anti-trust issues. For these activities, he has also established the Amsterdam Center for Corporate Finance, a ”think tank” designed to improve the interaction between theory and practice



prof. dr. s.J.g. van WijnbergenEconomicsSweder van Wijnbergen is professor of economics at the Faculty of economics and Business at the University of Amsterdam. In 1997 Hans Wijers brought him in to the Ministry of economic Affairs, where he worked as secretary until 1999.Van Wijnbergen

studied physics at Utrecht University and econometrics at the erasmus University. He obtained his doctorate on economics at MIT in the US. Between 1980 and 1992 van Wijnbergen was attached to the World Bank, in the second half of this period as head economist. His research area is focused on international economics, finance, balance of payments- and financial crises.

prof. dr. Ir. h. rijkenCorporate FinanceHerbert Rijken is attached to the VU University as professor of corporate finance at the Faculty of economic Sciences and Business Administration. He studied applied Physics at the tu Delft and Business Administration at the University Nyenrode. He has obtained

his doctorate at the faculty applied Physics of the tu eindhoven. education- and research activities are mainly focused on corporate finance, in particular credit risk and corporate governance.

prof. dr. t.l.c.m. groot Management AccountingTom Groot is professor Management Accounting at the Faculty economic Sciences and Business Administration at the VU University. He is also head of the department Accounting and director of the research institute Amsterdam Research Center in Accounting

(ARCA) and honorary member of the Association of Financial Controllers. He regularly publishes in national and international magazines about the performance measurement and -judgment, management control and financial management in commercial firms as well as non-profit organizations.

drs. l.a. van eerdenFinancial Business AdministrationLeo van eerden is attached to the VU University as a professor at the finance department of the Faculty of economic Sciences and Business Administration. He studied International economics at the University of Tilburg and at the moment he is working on his PhD at the

VU University. His current research area is mainly focused on financial crises, regulation, supervision on banks and system risk management.

CoMMITTee oF ReCoMMeNDATIoN

prof. dr. d.c. van den BoomRector magnificus Universiteit van Amsterdam

prof. dr. l.m. BouterRector magnificus Vrije Universiteit Amsterdam

mr. e. e. van der laanMayor of Amsterdam

dr. B. h. hiensch Dutch ambassador at the Consulate General in New Delhi, India

Mr. D.R. Hooft GraaflandMember Executive Board / CFO Heineken

dhr J.g.a. rijnierseCEO Sodexo Benelux, board member for VNO-NCW

prof. dr. K.h.W. KnotPresident De Nederlandse Bank

dr. a.h.g. rinnooy KanChairman Social Economic Counsil (SER)

drs h. BiesheuvelChairman SME’s Netherlands

dhr. B. pullesDirector NL EVD Internationaal

prof. dr. c.n. teulingsDirector Centraal Plan Bureau

prof. drs. h.e.m. Binnendijk Lecturer Faculty of Economic Sciences and Business Administration VU University

drs. f.W. WeisglasEx-chairman of “de Tweede Kamer der Staten-Generaal”


fsa Research Project | 11

By Ms Hella e.M. Binnendijk, MSCLecturer Faculty of Economics and Business AdministrationVU University Amsterdam

As I type the letters that will result in the word ‘MyIndia’, I realize that it is a contradictio in terminis; no one can possess India.

Not the Portuguese who landed in the person of Vasco da Gama, not the Dutch who arrived a little later, not the British, although they tried their utmost, and nowadays not even the Pakistani can possess India. Looking at the globe gives us the impression that India is a country; but in reality India is a conglomerate of people, cultures and the (often bureaucratic) rules they set in order to live together. everyone who has travelled in India experiences the ‘United States of India’; diversity all over the place. And this is one of the things that made me, more than twenty years ago, fall in love with India.

I am very pleased that the FSA Research Project 2012 will be in India. As one of the BRICS countries, the ‘I’ stands for India, it will be very interesting for our business students to experience working there. The Indian economy is emerging at high speed; any growth figures that I might write today will be history by the time you are able to read it. So no figures here.

With this short essay I would like to introduce to you a part of emerging India that most western visitors hardly notice; the world of disappearing professions. Although I don’t know if disappearing professions should be seen as a positive or negative result of growing prosperity, they are interesting from the point of view of entrepreneurship and craftsmanship. Let’s take a closer look at the ‘the letter-writer and -reader’ in the Northern cities. His daily activities at the corner of busy streets made it possible for illiterate people to communicate on paper with their friends, family and loved ones. The craftsman had a huge memory, he knew everything about everybody; let’s say FaceBook avant la lettre. With his skills he was able to earn an income and send his children to school. The next generation was taught to read, write and even use a computer. And nowadays as a result of that the ‘letter-writer’ is no longer needed and the profession is quietly disappearing. From a sociological (or even romantic) point of view it might sound sad but from a business point of view it is the start of economic growth.Another disappearing profession, or should I even say disappearing industry, is the ‘dabba walla’ in Mumbai. Dabba wallas are men who are part of a lunch box delivery system. on their bicycles they collect metal lunch boxes,

called tiffins, with homemade cooked meals (curries I suppose) from the houses of mainly office people. The tiffins are brought to sorting places where the dabba wallas exchange and organize the deliveries. Then the final delivery is made. After lunch time the empty boxes will be collected again and brought back to the right home. Due to their very detailed marking system on the boxes the dabba wallas hardly make a mistake in delivering 200.000 boxes per day. And like the letter writer the dabba walla earns his money and his children will be educated. They might get an attractive job at one of the emerging fast food chains in the city; PizzaHut, McDonalds, KFC. The new generation might even build a career within that company and travel abroad to headquarters. Although nowadays there are still many dabba wallas on the streets of Mumbai internationalization is bringing fast food places, like Haldiram, Bikanerwala and Bengali Sweet House, into the huge lunch market of India. And with that the dabba walla will slowly disappear.

education is the accelerator of the Indian economy. Some years ago I was asked by an older Indian man (in his Indian english while wiggling his head) why european parents invest their money in real estate. He had the opinion that investing money in your children by having them graduating from to the best schools around the world would create a much better return on investment than selling a piece of property. Looking at the european crisis of this moment, that man might have spoken prophetic words. education and knowledge are the basis of what is going on in India.

our research students will probably do their projects within modern, state of the art, companies in India. They will experience what they have been taught at university. But they will experience much more what they have never been taught, they might even not believe their own ears and eyes. India is a planet in itself and not all that works in western society will fit in India. But I hope that our students whilst doing their projects will be able to ‘discover’ what does work well in India and what could be transplanted to europe. It is time to learn from Asia. Good prepared business students will get the best out of a project. But preparing for India requires more than just having good grades. It means preparing for a culture and reading the authors1 who will tell and teach you about cultural history; because in India culture and business are two sides of the same coin.

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• Suketa Mehta (Maximim City-Bombay Lost and Found)• Rohinton Mistry (A Fine Balance)• Salman Rushdie (Midnight’s Children)

My INDIA

WHAT We oFFeR

We conduct high quality, company-specific research in emerging markets on a non-profit base for companies with international aspirations.

What? The main objective of the project is to conduct research in India and the Netherlands, which can be fully customized to the wishes of the company. of course, the research can be conducted in several areas. examples of research that has been conducted previously are:• Market Analysis • Competitor Analysis • Industry entrance analyses• Sector Analysis • Growth strategy analyses• Feasibility Analysis• Identification of possible business partners• Background research and competitive market analyses• Distribution and Logistics Research • Finance or Investment opportunities • outsourcing and off Shoring • Import and export Analysis • Market expanding opportunities

hoW? Before going abroad, thorough desk research will be carried out and maximum preparation will be ensured. Researchers are offered intensive training about conducting research, India, and relations with clients. The acquisition period starts in January and as soon the client has given the final assignment desk research will start. During the entire process we will be supported by our advisory board. They can be contacted by the committee in case of questions and will act as our consultants.

The field research will take place in India and will last for five weeks. once the participants have returned to the Netherlands, the gathered data will be processed and the final report will be written. The company will constantly be kept well-informed and updated about the project’s progress. The research results will be presented to the contracted company and, upon request, the report will be published.



student selectIon each year around 90 students apply for the FSA Research Project. These students are active in the field of Finance, Accountancy, Management Accounting (Controlling), International Financial economics, Marketing, Fiscal economics and other related disciplines such as Law and Social Science. We have selected sixteen of the most promising students. • Final stage of study (150 eCTS prerequisite)• Highly motivated and ambitious• Internationally oriented • organizational experience• Good academic results• Team playing skills

Note: Participating companies are able to express their preference for participating students

desK research Desk research covers a period of approximately six months. The first half of this period will be used to learn about the Indian economy, politics, culture and language. The students acquire this knowledge through lectures given by guest speakers, i.e. people from business practice. During the second half of the desk research students will start the research for their individual business assignments.

fIeld research During the Research Project, approximately five weeks of field research will be carried out in India. The information needed for these assignments will be obtained by means of interviews and visits to companies and institutions. The way the field research is conducted can be adjusted according to the specific preferences of the participating companies.

reportIng After our visit to India each participating student will analyze and process the information gathered during the previous phases of the Research Project. The individual contributions of the participating students to the general survey will then be compiled to a customized report covering the research question proposed by the client. The students will present their individual research reports to the participating companies. A seminar organized in December will inform the companies about the results and give them the chance to get acquainted with professors and participating students.

CLIeNT BeNeFITS

For over 15 years, the FSA Research Project has conducted research in a variety of emerging markets. This has resulted in an extensive network and the accumulation of valuable knowledge concerning this field of research. This enables us to continue delivering the required work and to end up with satisfied clients of the FSA Research Project year after year. each individual research project will be customized to the needs of the participating organization with the objective to completely satisfy the client. This way, we can offer:

hIgh QualItyStudents conducting the research are selected based on both personal and professional performance. Primarily, these students are in the final stage of their study. Prior to departure, the students carry out extensive desk research and study the sector and industry specific characteristics of the particular research subject. Because of this, the time spent in India can be fully dedicated to field research. The field research in India will last five weeks. In order to guarantee quality of the research, it will be conducted under supervision of university professors of both the Vrije Universiteit Amsterdam and the Universiteit van Amsterdam.

confIdentIalItyIt is possible to manage discrete research. This means the company name and/or the results of the research will not be published or discussed publicly. Clients named in the subsequent section have given their explicit authorization.

competItIve prIce Since the FSA is a non-profit organization, we are able to offer specific research at a price of approximately 10 000 eUR (excluding VAT), based on research to be carried out by two students. The costs will rise accordingly in case the assignment requires more students.

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expenses are based on the participation of twenty-two students for a stay of five weeks in India.Travel and accommodation expenses include airline tickets, insurance costs and transportation in India.The organizational expenses consist of correspondence, telephone bills and brochures.The academic supervision and the final report, which will be presented, are part of the research expenses.each participating student will contribute 750 eUR.


over the last fifteen years the Financial Study association Amsterdam has gained considerable experience in organizing foreign Research Projects. The destinations of the previous editions are displayed in the ‘FSA Research Project – world map’ at the end of this brochure. In each of these projects, research assignments have played an important role. As mentioned before, the research can be conducted in a variety of fields. examples of participating companies in the past have been:• ABN AMRo • Royal Philips • ABP • P&o Nedloyd • Corus • Rabobank • De Nederlandsche Bank • Stork • DHL • TPG • Grontmij • TNo• ING Group • Unilever

This list shows a number of companies active in different industries. Due to confidentiality issues, we can only mention a limited number of companies, which have given their explicit permission. Some examples of research assignments are provided below. Noteworthy is that only large companies are named here, numerous researches have been done for several small and medium enterprises.

fmcg supply chain (south africa, 2011) the goal of this research was to find out who the most important players were in the FMCG Supply Chain from producer through packager to retailers. The mission was to find out how technologically advanced each industry link was, where decision power and autonomy lies, how the market is evolving, and which industry and consumer trends in South Africa are noticable. Shortly put, the interviews, that took the researchers from Johannesburg through Durban to wonderful Cape Town, were designed to help a Dutch player gain foothold if they were to start conducting any type of operations in the country.

green technology (china, 2010) This research was to identify the opportunities in the Chinese market. The focus was on Shanghai, Beijing and the province of Shandong. The research consisted of two parts. on one hand, the aim was to find out possibilities for doing business in China (including the legal aspects). on the other hand, it was focused on sustainability and agriculture in particular. To highlight the reciprocal investment possibilities, also a blueprint was made of both these sectors in the Dutch market.

Synclair Packaging B.V. (Argentina, 2009) the research included a market-scan of the flexible food packaging industry in Argentina, specifying the meat industry, and the identification of possible distributors. This was done in order to give recommendations about entering the Argentinean food packaging market.

strawberindo lestari (Indonesia, 2008) this research represents a study on the logistical process of PT Strawberindo Lestari’s export activities to Singapore and Malaysia. The goal of this project was to find a more cost efficient method of transportation, while preserving the quality of the products.

nec philips (south africa, 2007) This particular research was about finding appropriate business partners for the joint-venture NeC Philips in Mozambique, Tanzania, and Kenya to distribute one of their products. In order to realize this they had to plan and arrange a large variety of business meetings with potential distributors in each of these countries. The outcome of this research assignment was an advisory report concerning which distributors were best suited for the job. NeC Philips actually used their advice to select one of the potential partners.

dutch trade Board (India, 2006) The research in India was performed for the Dutch Trade Board (DTB), which is an agency related to the Dutch ministry of foreign affairs. This research was focused on the trade relations between Dutch and Indian SMe’s in the biotech, medical, automotive, ICT and agricultural sector. The final report is now used by the eVD in providing information about India to Dutch companies.

dhl (Brazil, 2005) The scope of this research assignment was the Brazilian express-market and the interaction with the Benelux express-market in particular. Furthermore they explored the possibility of expanding their business.

rabobank (russia, 2004) the fsa conducted research within the agricultural business and provided Rabobank with a qualitative industry entrance analysis of the Russian agricultural market.

Ing group (India, 2003) The FSA provided ING Vysya Life Insurance with a quantitative analysis of their investment portfolio in India. A decreasing interest rate was the reason to assess whether, next to bonds, investments should be expanded to stocks. ING used the report to rebalance its investment portfolio.

Dialight corporation (Mexico, 2002) Dialight Corporation is an American lighting firm that produces and develops the LeD Technology. LeD (Light emitting Diode) is a new technology based on semi-conductors. The FSA Research Project was asked to extensively research the Mexican led Traffic Light market. In the three largest cities of the country (Mexico City, Guadalajara and Monterrey) three students interviewed government officials, the competition repre-sentatives, as well as other related third parties.

ReSeARCH exPeRIeNCe

ABoUT INDIA

India is developing into an open-market economy. economic liberalization, including industrial deregulation, privatization of state-owned enterprises and reduced controls on foreign trade and investment, began in the early 1990s and has served to accelerate the country’s growth, which has averaged more than 7% per year since 1997. India’s diverse economy encompasses traditional village farming, modern agriculture, handicrafts, a wide range of modern industries, and a multitude of services. Slightly more than half of the work force is in agriculture, but services are the major source of economic growth, accounting for more than half of India’s output, with only one-third of its labor force. India has capitalized on its large educated english-speaking population to become a major exporter of information technology services and software workers. India’s long term challenges include widespread poverty, inadequate physical and social infrastructure, limited non-agricultural employment opportunities, insufficient access to quality basic and higher education and accommodating rural-to-urban migration.Source: CIA World Factbook

economyIndia has grown to become a trillion dollar economy with a largely self-sufficient agricultural sector, a diversified industrial base and a stable financial and services sector. There is a structural shift visible from an agrarian to a services driven economy since 1970. As compared to other countries, India has been and continues to be relatively insulated from external shocks due to its strong domestic consumption pattern. Consequently India was relatively unaffected by the global recession, which affected the whole world in 2009. Increasing urbanization and modern technology have brought about a remarkable change in the lifestyles and consumption pattern of Indians. Private domestic consumptions accounts for more than 50% of the country’s GDP and is one of the key factors driving overseas investments in the country.Source: Ernst & Young, Doing business in India, 2011 and Indian Embassy in NL

economIc IndIcators 2010GDP US $ 4.06 trillion (fifth in the world list)GDP per capita US $ 3,500GDP real growth rate 10.4% (fifth in the world list)Inflation rate 12% Unemployment rate 10%Labor force 478,3 million (second in the world list)Source: CIA World Factbook

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foreIgn tradeTotal trade between India and the Netherlands has grown over 80.72% in the period 2006 - 2010. exports from India to the Netherlands in these five years have increased 97.57% while Dutch exports to India increased by 55.34%.

Major Indian exports to the Netherlands include mineral products, electrical machinery equipment, textile fabrics & goods, products of the chemicals and related industries, transport equipment and products of vegetable origin.Major Indian imports from the Netherlands are electronic goods, electrical machinery, products of the chemical and related industries, non-precious metals, medical or surgical instruments and accessories.

Main trading partners importChina, UAe, Saudi Arabia, US, AustraliaMain trading partners exportUS, UAe, ChinaSource: CIA World Factbook and Indian Embassy in NL, CBS

foreIgn dIrect InvestmentThe Netherlands ranks 5th in the list of countries in terms of cumulative FDI inflows into India during the period April 2000 to March 2011, with fresh inflows, not including reinvestment of dividends etc., amounting to US $ 5.7 billion which was 4 % of total inflows into India during the above period. A large number of Dutch majors like Philips, Royal Dutch Shell, Unilever, ING, Rabobank, KLM, Akzo Nobel and others have a major presence in India in important sectors of the economy and have been steadily planning additional investments to expand their operations. Currently there are more than 100 Dutch companies that have a presence in India.Source: Indian Embassy in NL

promIsIng sectorsIndia presents a vast potential for overseas investment and is actively encouraging the entrance of foreign players into the market. India is also one of the few markets in the world, which offers high prospects for growth and earning potential in practically all areas of business.

Key sectors in India are amongst others, automotive, banking, health sciences, information technology, insurance, oil and gas, ports, power and utilities, real estate, retail and consumer products and roads and highways. A selection of these sectors will be discusses here in more detail. Source: Ernst & Young, Doing business in India, 2011.

• AutomobileToday, India is among the top three markets across a number of vehicle segments attracting many global players. India is developing into a small vehicle product development hub enables by the large volumes needed for the domestic market and the ability to reduce costs through frugal engineering and manufacturing. Its proximity to the south-east Asian and African markets and well-connected ports makes it an ideal location to develop as a small vehicle manufacturing hub. Furthermore the barriers to entry into the automotive industry are relatively low and setting up operations is fairly easy without the need for industrial licenses. India is the second-fastest growing vehicle market in the world chiefly due to the rising personal disposable income and a growing middle class. The number of households in the middle income group is expected to rise to 170m (65%) in 2015. This provides immense scope for growth in the passenger car density, which is currently 11 per 1000 people, compared to 150 in countries such as Brazil.

• Health sciencesIndian life sciences industry has evolved tremendously, with pharmaceutical, biotechnology and health care domains contributing significantly to drive development and growth in the sector. A large population, evolving patient demographics, increasing healthcare expenditure, growing urbanization, rising life expectancy, increasing disposable income and active private-sector participation have augmented the growth of the country’s healthcare sector in recent years. In the pharmaceutical sector demand from the exports market has been growing rapidly due to the capability of Indian players to produce cost-effective drugs with world-class manufacturing facilities. Medical devices have advanced in the field of diagnostic kits and constitute a high growth segment in the medical devices market with a growth rate of 30%. Key factors contributing to this are increasing urban middle class population demanding better health care services, as well as expansion of corporate hospitals and research institutes in the country.

• Retail and consumer productsWith an estimated market size of US$395b in 2011, India’s retail sector is at the peak of its appeal for international and Indian players. Being the second-largest employer after agriculture, this sector is expected to grow to US$785b by 2014, ensuring the retail sector continues to be one of the mainstays of the Indian economy. Up to 100% of FDI is allowed under the automatic route in cash-and-carry wholesale trading and export trading. Up to 51% FDI, with prior government approval is permitted in retailing of ‘single-brand’ products. The demand for international brands is showing a healthy uptrend. Further the growing presence of domestic companies across the different retail verticals is giving the Indian organized market a strong boost. Changing lifestyles, strong income growth and favorable demographic patterns have resulted in huge expansion of Indian retail.

• TelecommunicationsThe telecom sector has played a pivotal role in the socioeconomic development of India. In fact, the Indian telecom sector is one of the key architects of the accelerated growth and progress of other segments of the economy. enhanced connectivity improves governance, business communication, security, response to emergencies and the overall strengthening of the country’s sociocultural ethos. In recent times, India has emerged as one of the fastest growing telecom markets in the world. The considerable growth of the telecom industry in India is being followed by the urge to move toward better technology and the next level of service delivery. While the last five years have been transformational for Indian telecom industry, the next few years look even more exciting. BWA (broadband wireless access) will overcome the key hindrance of last mile connectivity in India, while 3G has the potential to make the mobile phone a ubiquitous device to access internet based services. It is further expected that 3G and BWA will increase the demand for data based services such as mobile payment, m-health, m-governance and m-education services. Source: Ernst & Young, Doing business in India, 2011

ABoUT INDIA



educatIonIndia has one of the largest school-age population in the world. It has a well-established education system with more than 1.6m schools enrolling in excess of 130m students. For higher education, India has more than 500 universities as well as more than 25000 colleges and 7000 technical institutions with approximately 13m students.

India’s labor force stood at approximately 478.3m in 2010. It is estimated that around 13m people enter Indian’s urban labor force every year.

Source: Ernst & Young, Doing business in India, 2011

hIstoryover the centuries India had always been attractive to traders, and one of the first europeans to come to India was the Portuguese trader Vasco da Gama who landed at Calicut, sailing via the Cape of Good Hope in 1498. Vasco da Gama was followed by the French, the Dutch and the english, all of whom were lured by the commercial interests that India offered. By the last quarter of the 18th century the english established themselves as the dominant power in India and they set about making revolutionary changes in the social, political and the economic life of the country. India was part of the British empire until 1947 and today India is world’s largest democracy with a federal form of government. Source: Indian Embassy NL – Tourism India

geography and factsIndia is the seventh largest country in the world, and inhibits the world’s second largest population (1.2b). India consists of 28 states and seven union territories. China, Nepal and Bhutan are bordering countries to the north, Afghanistan and Pakistan to the north-west, Myanmar and Bangladesh to the east and Sri Lanka to the south. ClimateIndia’s climate can be classified as tropical monsoon. The country has four seasons: summer (March – June), monsoon (June – September), post-monsoon (october – November) and winter (December – February). Natural resourcesCoal, manganese, bauxite, iron ore, mica, chromites, diamond, limestone, titanium ore, natural gas, petroleum and arable land form India’s natural resources. In total 51% of India’s land is arable. Source: Ernst & Young, Doing business in India, 2011

DoING BUSINeSS IN INDIA

Destination: IndiaBy Bob HienschDutch Ambassador at Netherlands Embassy in New Delhi, India

The Financial Study Association Amsterdam (FSA) has chosen India as the next destination for the Research Project 2012. I welcome this opportunity for the FSA to highlight, assess and evaluate India at this juncture as the country is undergoing various economic and political transformations. As the largest market economy in the world India has risen to be a prominent and dominant world player in recent times, and has paved a path for global economic development. Together with other emerging markets India has developed into a significant player in international forums such as the G20, WTo, World Bank, BRIC and IBSA.

India also proves to be a very interesting country in terms of co-existence, political democracy, market economy and economic growth on the one hand and bureaucracy, unemployment, poverty, and inequality on the other. This paradox creates a set of both an abundance of opportunities as interesting challenges.

As the world second most populous country with 1.2 billion residents, India has witnessed a paradigm shift over the past two decades and now finds itself on a robust growth trajectory. The Indian economy today boasts a burgeoning annual growth rate, intensive capital markets and a tolerably liberalised foreign direct investment climate. India is one of the few economies to have weathered the recent global financial crisis, leaving its gross domestic product growth largely unaffected. The country’s GDP has been growing at an average rate of 8.6 per cent for the last five years and will continue to grow substantially: India’s GDP growth projection for 2011 is 7.5 per cent.

India’s economy has strong fundaments and is host to several eminent global corporate giants which are leaders in their respective fields. According to the Global Competitiveness Report 2010-11, India ranks 51st among 139 countries, surpassing Brazil, Russia and South-Africa. India ranks higher than many countries in key parameters such as market size (4th) and innovation (39th) and is also appreciated for its reliable financial market (17th). According to UNCTAD’s World Investment Prospects Survey 2010-2012, India is the second-most attractive destination for FDI in the world. Indian markets have significant potential and offer prospects of high profitability and a favourable regulatory environment for investors. The strong Indian


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growth story, based on the structural strengths of a young population, extensive domestic consumption and investments, drew the attention of a significant amount of foreign investors in recent years.

India is known for its highly skilled labour force that speaks english fluently and is familiar with the Western culture. While its size and growth potential make India attractive as a market, the most compelling reason for investors to be in India is that it provides a good return on investment. This is witnessed by the growth of the number of foreign investors who are increasingly looking at India, while exploring the opportunities of its market. Besides, Dutch companies are increasing their investments in India. In India, the Netherlands is represented by more than one hundred companies, led by well-known multinationals e.g. Philips, Shell, Hindustan Unilever, DSM, AkzoNobel, ING, Rabobank and KLM, among others.

India is now poised to reap its demographical dividends. Its rapidly increasing middle class provides the world with huge market potential. Given its strategic strengths and rapidly growing economy, India serves as an ideal destination for Dutch investors. The Dutch government has been particularly proactive towards developing strategies for Dutch enterprises in India. India is prominently listed as a major destination for business co-operation by various forums like the Dutch Trade Broad, NCH, FMe, Agentschap NL/eVD and others. The Netherlands Trade Network with offices in Delhi, Mumbai, Chennai and Ahmedabad facilitates support in the realisation of business plans in India. entry into the Indian market is not always easy. It can occur that there is bureaucratic delay, over-regulation and unclear quality standards. It might also take some time to fully understand the Indian business culture. - But beyond doubt, the Indian market’s huge potential has a lot to offer to Dutch entrepreneurs.

The FSA Research Project embodies an opportunity for future investments in India through research, either company or product specific. This research project conducted by resourceful and highly qualified students represents an

ideal platform for companies with limited human resources and restrained market accessibility. The custom tailored approach will provide small and medium sized businesses with the desired results.

I would like to compliment the scholars of FSA on their commitment, dedication, resourcefulness and the successes of previous research projects on South Africa and China. Recognizing a win-win situation, I am confident that the India experience will help them to reach greater heights and will allow them to derive more experience than ever before.

bob HienschAmbassador of the Kingdom of the Netherlands to India ([email protected])

Central europe 1995

Argentina 1996/2009

Brazil 1997/1999/2005

Mexico 1998/2002

Indonesia 2008

India 2001/2003/2006/2012

South Africa 2000/2007/2011

Israel 1994

Russia 2004

Central europe 1995

China 2010

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