Business and Investment Opportunities in India

APresentation

By

High Commission of IndiaDar es Salaam

20 November 2014

“….I want to appeal to all the people world over….. …Come, Make in India. Sell anywhere but manufacture here….”

-Hon’ble Prime Minister, Shri

Narendra Modi, in his Independence

Day, 15th August 2014 Address.

"Few nations have the growth

potential that lndia already enjoys. lndia holds the

promise of a most successful future..."

Klaus Schwab,Founder and Executive Chairman, WorldEconomic Forum, at the lndia Economic

Summit 2009, New Delhi, 8 – 10 November 2009

India Fact File Land area Capital Population Languages

Major international airports

Major seaports

Major cities

Time zone

Currency unit

3.29 million sq kmNew Delhi1.21 billion (2011)Hindi(official language of the Union) English (business language) Ahmedabad, Amritsar, Bangalore, ChennaiGoa, Guwahati, Hyderabad, Kochi, KolkataMumbai, New Delhi, Thiruvananthapuram

Mumbai, New Manqalore, Kolkata. Kandla, Kochi, Chennai, Ennore, Haldia, Mormugao, Paradip, Tuticorin, Vishakapatnam

New Delhi, Mumbai, Kolkata, Chennai,Bangalore, Hyderabad, Pune, Lucknow, Kanpur

5 hours 30 minutes ahead of Greenwich Mean Time (GMT)lndian rupee (lNR)

Trade and Commercial Profile

India’s total merchandise trade was $ 765 billion in 2013-14.

EXPORTS2012-13 $ 300.401 billion2013-14 $ 314.405 billion2014-15 (Apr-Jun) $ 76.032 billion

IMPORTS

2012-13 $ 490.737 billion2013-14 $ 450.198 billion2014-15 (Apr-Jun) $ 113.015 billion

Major Export Destinations India’s Top Export Markets for 2013-14

No. Country Total Exports (in $ bn.)

1. USA 39.14

2. UAE 30.52

3. China 14.82

4. Hong Kong 12.73

5. Singapore 12.51

6. Saudi Arabia 12.22

7. UK 9.78

8. Netherlands 8.00

9. Germany 7.52

10. Japan 6.81

India’s Total Exports $ 314.41 billionSource: Dept. of Commerce, New Delhi

`Major Import Sources

India’s Top Import Markets in 2013-14No. Country Total Imports (in $ bn)

1. China 51.03

2. Saudi Arabia 36.40

3. UAE 29.10

4. USA 22.51

5. Switzerland 19.31

6. Iraq 18.52

7. Kuwait 17.15

8. Qatar 15.71

9. Indonesia 14.75

10. Nigeria 14.01

India’s Total Imports $ 450.20 billion

Source: Exim Bank

India-Tanzania Trade 2013(Source : TRA)

Tanzanian imports from India - $ 2308.71 millionTanzanian exports to India - $ 752.17

millionTotal bilateral trade - $ 3060.88 millionTanzania’s bilateral trade with top five partners:

India - $3060.88Switzerland - $ 2026.65China - $ 1905.28South Africa - $ 1494.25UAE - $ 1277.86

Total trade between India and Tanzania from 01 April 2013 to

31 Mar 2014 [as per Indian Government figures] - $4125 million

India-Tanzania Trade 2014(January to June)

(Source : TRA)

Tanzanian imports from India - $1565.79Tanzanian exports to India - $ 381.66Total bilateral trade - $ 1947.45

Main items of export from Tanzania – gold, cashew, pulses, spices (cloves), precious stones, cotton, timber, etc.

Main items of import from India – petroleum products, medicines, machinery, motor vehicles, motor cycles, including three-wheelers (Bajajis), tractors, wires and cables, chemicals, plastics, etc.

Indian Investments in Tanzania(Sources: TIC & EPZA)

Investments with Indian interests ;Cumulative Total from 1990 to 2013 (as per TIC) - US $ 1.96 billion supporting over 52,000 local jobs

Investments with Indian interests in EPZAsCumulative Total - US $ 497.12 supporting over 3600 local jobs

Total Indian Investments in Tanzania US $ 2.46 billion supporting over 55,600 local jobs

India’s Major Exports to AfricaMineral fuels and petroleum productsVehiclesPharmaceuticalsElectrical and electronic equipmentMachineryIron and steel and Items of iron and steelCottonPlastics and articles

India’s Major Imports from AfricaCrude oil and mineral fuelsPearls and precious stonesUn-wrought and semi-manufactured goldInorganic chemicalsEdible fruits and nutsIron and steelFertilizersOres and slag

Make in IndiaPM Modi launches ‘Make in India’ campaign in

New Delhi on 25 September 2014Simultaneous / coordinated launch events

organized all over India and in many capitals across the globe including in Dar es Salaam

Basic features – (a) develop robust manufacturing sector in India so that its contribution rises to 25% of GDP from current 15%; (b) Government will create enabling environment for this to happen; and (c) Some measures have already been initiated* and results are showing [See next slide]

Make in India – Ease of Doing Business Six best practices on grant of clearances recommended to States, many

which have already adopted Process of applying for Industrial License (IL) and Industrial Entrepreneur

Memorandum (IEM) has been made online on 24 X 7 basis Registration with Employees Provident Fund Organization (EPFO) and

Employees State Insurance Corporation (ESIC) have been automated – registration number given on real time basis

Vide Press Note No. 3 (2014) large number of defence industry parts/components, castings/forgings, dual use items, etc, have been excluded from purview of industrial licensing

Vide Press Note No. 5 (2014) validity period of IL has been increased from two to three years

Security clearance on IL applications will be granted within 12 weeks Partial commencement of production is being treated as commencement of

production of all items included in IL eBiz Project being developed top create investor centric hub-and-spoke

based online single window model for providing clearances and filing compliances

Why Make in India?Manufacturing will not only spur new jobs in India but

also increase the size of the market Attractive to manufacturers to sell in India and abroadPM’s catch phrases

“zero defect, zero effect” manufacturing practices“efficient, effective and simple governance”Manufacturing in India is driven by “democracy, demographic dividend and demand”“Red carpet for investors, not red tape”In India, FDI stands for ‘First Develop India’ as also ‘Foreign Direct Investment’

Foreign Direct Investment FDIMost Sectors are open to FDI under automatic route; only a few sensitive sectors are closed for foreign investmentSome Sectors have a cap of between 49% to 74% of FDI – the rest have 100% FDI facilitySome of the sectors with 100% FDI under automatic route are:Non-banking financial companies (NBFC); Coal and Lignite Mining for captive consumption of power projects, and iron and steel and cement production; power production; software development; electronic hardware, film industry, advertising, hospitals, hotels, food processing, private oil refineries, telecom products, airports (green-field projects); manufacture of drugs and pharmaceuticals, industrial parks; SEZs; etc

Sectors Attracting Highest FDI Inflows (2012)

Sector Percentage to Total Inflows

Services sector [Financial & Non-Financial] 19%

Construction Development: Townships, Housing Built-Up Infrastructure

12%

Telecommunications [Radio Paging, Cellular Mobile, Basic Telephone services]

7%

Computer Software & Hardware 6%

Drugs & Pharmaceuticals 5%

Chemicals [other than fertilizers] 5%

Power 4%

Automobile Industry 4%

Metallurgical Industries 4%

Hotel & Tourism 3%Source: Dept. of Industrial Policy & Promotion, New Delhi

India has the potential to offer myriad of opportunities for foreign investors across a wide gamut of manufacturing sectors (1)

Auto Auto components Defence

Overview Likely to become 3rd largest auto market in the world by 2016, accounting for more than 5% of the global vehicle sales

India’s is 2nd largest two wheeler manufacturer, largest motor cycle manufacturer and 5th largest commercial vehicle manufacturer

Expected size by 2016 is USD 145 billion.

Worth USD 39.7 billion in FY2012–13

India’s exports of auto components increased at a CAGR of 17% during 2008-13; Exports have risen to USD 9.7 billion in 2012-13

3rd largest armed forces in the world. Largest importer of conventional defence

equipment 70% of defence requirements are met

through imports Defence budget in 2014-15 is USD 38

billion, expected to reach USD 50 billion by 2018

Investment opportunities

Passenger Vehicles Two Wheelers Three Wheelers Commercial Vehicles low cost electric vehicles

Engine & Engine Parts Transmission & Steering

Parts Suspension & Breaking

Parts Electrical parts

Manufacturing of defence equipment Maintenance, repair and overhaul

segment Engineering services outsourcing

FDI policy 100% FDI is allowed under the automatic route

100% FDI is allowed under the automatic route

Up to 49% under the government route and beyond 49% through CCS (in case of transfer of technology)

Opportunities

Electrical Equipments ESDM Pharmaceutical

Overview Estimated output by 2022 approx. USD 100 billion

The market expanded at a CAGR of 10.5 per cent over (FY07–12).

Worth USD 68.31 billion in 2012; anticipated to be USD 94.2 billion by 2015; CAGR of 9.88% between 2011 and 2015

• Accounts for about 2.4 % of the global pharma industry in value terms and 10% in volume terms

• Expected to grow at 12.1% during 2012–20

• Expected to reach USD250 billion by 2020 from the current USD65 billion

Investment opportunities

Generation Machinery: Boilers, Turbines, Generators

Transmission Machinery

Consumer electronics Strategic electronics Medical electronics Avionics Fabless manufacturing Automotive electronics Electronic Manufacturing Services EMCs

• Active pharmaceutical ingredients (APIs)

• Contract research and manufacturing services (CRAMS)

• Formulations

FDI policy 100% FDI is allowed under the automatic route subject to all the applicable regulations and laws.

100% FDI through automatic route for ESDM except for defence electronics

• 100% FDI is allowed under the automatic route for Greenfield projects.

• For brownfield project investment up to 100% is under the government route.

Opportunities Construction Food Processing Leather

Overview Second largest employer and contributor to economic activity, after agriculture sector.

Accounts for 2nd highest FDI inflow after the services sector

Worth USD 78.5 billion in FY13; expected to grow to USD 140 billion in FY17.

Industry size is Rs 845 billion in 2012-13, growing at 8.4% for the last five years ending 2012-13

Value addition of sector as share of GDP manufacturing was 9.8% in 2012-13

Industry size approx. USD 11 billion (exports - USD 6 billion and domestic market - USD 5 billion)

Exports projected to grow at 24% pa in next five years. Domestic market expected to double in next five years.

Investment opportunities

Residential, retail, commercial and hospitality sectors

Technologies and solutions for sustainable cities, low cost and affordable housing, Green building solutions, environment friendly building materials

Training and skill development of construction sector workers

Smart cities Urban water supply; urban sewerage &

sewage treatment

Fruits and Vegetables Fermentation products Beverages Dairy Food additives, nutraceuticals Confectionary and bakery Meat & poultry Fish and sea foods processing Grain Processing Food packaging Food processing equipment Consumer food

Tanning and finishing of leather products

Manufacturing of leather garments

Manufacturing of leather footwear and footwear parts

Manufacturing of leather goods, such as harness and saddlery.

FDI Policy 100% FDI is allowed under the automatic route subject to conditions. Norms for foreign investors in real estate sector have been relaxed since Oct 2014.

100% FDI through automatic route for most of the food products except for items reserved for MSME.

100% FDI is allowed under the automatic route subject to all the applicable regulations and laws.

OpportunitiesChemicals Petrochemicals Oil & Gas Textile

Overview Size of the industry (2012-13) is around USD 144 billion

India accounts for approximately 16% of the world production of dyestuff and dye intermediated

The polymer demand is expected to grow by 8-10% with a healthy growth in clothing, automobiles, etc.

4th largest consumer of crude oil and petroleum products in the world (2013)

Oil imports constitute 80% of India’s total domestic oil consumption (May 2014).

At the end of 2013, India had 215.066 MMTPA of refining capacity, making it the second-largest refiner of crude oil in Asia.

• 2nd largest textile manufacturing capacity globally

• Sector contributes 14% to industrial production and 4% to GDP and 13% of country’s export earnings

• Domestic textile and apparel industry is estimated to reach USD 100 bn by 2017 from USD67 bn in 2014.

• Exports are expected to increase to USD 65 bn by 2017 from USD 40 bn in 2014

Investment opportunities

Petrochemicals Specialty chemicals Agrochemicals Colorants Technical training

Underground coal gassification E&P services and equipments City gas distribution Refinery Technology partnerships in

upstream sector

• Entire value chain of Synthetics

• Values added and speciality fabrics

• Technical Textiles• Garment• Retail Brands

FDI policy 100% FDI is allowed under the automatic route subject to all the applicable regulations and laws.

FDI is subject to the existing sectoral policy and regulatory framework and varies across the value chain

• 100% FDI is allowed under the automatic route in textile sector

Advantage IndiaWhy do business with India or invest in India?

◊ Stable and democratic political environment & responsive administrative set up

◊ Well established judiciary to enforce the rule of law◊ Land of abundant natural resources and varied

climatic conditions◊ Investor friendly policies and incentive based

schemes◊ Cost competitive labour force of nearly 530 million◊ large pool of skilled manpower with significant

English speaking population◊ Young country with a median age of 30 years by 2025

What drives India?

● Talented Workforce● Hub of Innovation● World’s IT Nucleus● Leader in Carbon Credits● Leading Innovator of technology and

processes for developing countriesCombination of macro-economic planning focussed on development, public-private partnership in infrastructure, domestic demand, and a sound and well-administered financial system

Advantage India

● Large number of households without basic assets – huge untapped market potential

● Massive reduction of import duties and rationalization of direct and indirect tax structures

● Robust banking and financial institutions

● Full current account convertibility● Sustained economic reforms since 1991● India – Your reliable partner

Entry Options in India

Entry for doing business in India, be it trading, manufacturing or in the service industry. How does a foreign entity or national set up a business in India? Details on types of office, repatriation of funds, form of enterprise, economic laws and regulations, visa and entry requirements, taxes, etc, can be found at the website of INVEST INDIA at

http://www.investindia.gov.in/

Sectors to look out for◊ ELECTRICITY GENERATION – fifth largest

generation capacity with third largest transmission and distribution network

◊ STEEL – Production to rise to 100 MPTA by 2019-20

◊ AVIATION –Poised to emerge as third largest market by 2020; will generate 2.6 million jobs

◊ REAL ESTATE – Worth $ 66.8 billion estimated CAGR of 19% between 2010 and 2014

◊ RETAIL MARKET – fifth largest globally, expected to grow to $ 804 billion by 2015

Sectors to look out for

▪HEALTHCARE – To become a $ 100 billion industry by 2015

▪BIOTECHNOLOGY – With 380 biotech companies ranked among top 12 companies

▪PHARMACEUTICALS – Unique programme launched to discover drugs for infectious diseases common to all developing countries

▪TOURISM – 1.6 billion tourists expected by 2020; adding over 100,000 classified hotel rooms by 2013

ASANTENI SANA

DHANYAVAD

THANK YOU

High Commission of India

Dar es Salaam

www.hcindiatz.org