India Country -Emerging Economy

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    IndiaEmerging Economy

    By : Amit Rathod

    Exec. PGDM

    2010-11

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    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, Burma1,463 km, China 3,380 km,

    Nepal 1,690 km, Pakistan

    2,912 km

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    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

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    The Indian flag is a horizontal tricolor inequal 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 awheel 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

    Indian Flag

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    India 2nd in global competitiveness

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

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    Firms in India Globally Competitive

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    India

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    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.

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    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

    Institutions : Legal

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    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

    Investor Friendly, Liberal open market

    economy

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    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 ininfrastructure 11th Plan(2007-

    2012)

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    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 itsbillion-plus population offers

    immense growth potential for the

    telecom services sector

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    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

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    Infrastructure : Railways

    India has one of the largest railway networks inthe 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

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    Infrastructure : Highways & Roads

    India has an extensive road networkof 3.3 million Kms the secondlargest in the world.

    Roads carry about 61% of thefreight and 85% of the passenger

    traffic.

    Highways/Expressways constituteabout 66,000 Kms (2% of all roads)and carry 40% of the road traffic.

    The Government of India spendsabout Rs.18000 Crores (US $ 4billion) annually on roaddevelopment.

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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%GDPgrowth last fiscal, has an installed

    capacity of 132,110 mw.

    Indias investment requirements

    for power generation and

    transmission will be tune of $200

    billion, to be able to fulfill

    projected demand by 2012.

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    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).

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    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

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    0

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    -10(uptoF

    eb)

    GD

    GrowthRate(%)

    GDP - composition

    by sector:

    Agriculture: 17.1%

    Industry: 28.2%

    Services: 54.6% (2009)

    Source : CIA World Fact book

    Indian macroeconomic Indicators : GDP Growth

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    Macroeconomic environment

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    Macroeconomic environment

    5.3 5.4 8.4 9.620 18 22

    28 3238 42

    46

    7584

    144 148

    192

    220

    243

    288

    0

    50

    100

    150

    200

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    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

    Foreign Reserve (US $ Bn)

    Foreign Exchange (US$ Bn) Reserves

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    Higher education and Training

    India is the second largest Education market of the world & India spendsabout 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, whichteach 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.

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    Industrial Production in Indiaexpanded 1.6 percent in Decemberof 2010.

    Industrial production measureschanges in output for the industrialsector of the economy which

    includes manufacturing, mining, andutilities.

    Industrial Production is an importantindicator for economic forecastingand is often used to measureinflation pressures as high levels ofindustrial production can lead tosudden changes in prices.

    From 1994 until 2010, India'sindustrial production averaged 7.49percent reaching an historical highof 17.70 percent in December of2009 and a record low of -0.20

    percent in December of 2008

    Goods market efficiency : Industrial production

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    Healthcare

    By the year 2010, India has thebest mass health care deliverysystem in the world.

    Because our country produces thelargest number of doctors in theworld. India also produce thelargest number of nurses andtechnicians.

    The India is the only country in the

    world which can provide qualityhealthcare service to the patientsof developed countries at around40 to 50% of the price charged fortreatment at developed countries.

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    Primary Education

    Primary education is the foundation on which the development of everycitizen and the nation as a whole built on.

    India has made a huge progress in terms of increasing primary educationenrolment, retention, regular attendance rate and expanding literacy toapproximately two thirds of the population.

    GOI and States increasingly recognize education as a critical input forhuman capital development, employment/ jobs, and economic growth, andare putting major financial and technical resources into this effort

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    Labor market efficiency

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    Unemployment Rate

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    India exports were worth 22500Millions USD in December of2010.

    Exports amount to 22% of IndiasGDP.

    Gems and jewellery constitutethe single largest export item,accounting for 16 percent ofexports.

    India is also leading exporter oftextile goods, engineering goods,chemicals, leather manufactures

    and services. Indias main export partners are

    European Union, United States,United Arab Emirates and China

    Financial market development : India Exports

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    India imports were worth25100 Millions USD inDecember, 2010.

    India is poor in oil resourcesand is currently heavily

    dependent on coal andforeign oil imports for itsenergy needs.

    Other imported products are:machinery, gems, fertilizersand chemicals.

    Main import partners areEuropean Union, Saudi Arabiaand United States.

    Financial market development : India Imports

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    Science and Technology

    Indias 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 USApossess.

    In April 2007 ISRO commercially launched and Italian scientificsatellite Agile into orbit and entered the international satellitelaunch market.

    Successful launch of the Geosynchronous Satellite LaunchVehicle, (GSLV-F04), which placed a 2-tonne communicationsatellite, INSAT-4CR into orbit.

    Successfully tested an indigenously made cryogenic engine topower GSLVs.

    Indian made super-computer ranked in the top-10 in the world

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    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

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    Consumer finds

    something she wants

    to buy at a shop on

    the Net

    Consumer sends on

    enciphered request for

    payment to her bank

    The electronic bank

    sends back a

    secure packet of e-

    cash

    Consumer

    sends the e-

    cash to theshop

    Verification and

    remittance of actual

    funds

    Consumer

    Public Key

    The shopsends the

    packet of

    cash to its

    bank

    Merchant Bank

    MerchantServer

    Shop

    Consumers

    Bank

    Shop

    1

    3

    6

    2

    5

    4

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    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 Englishspeaking IT professional. This is why

    IT speaking countries like US & UK

    are depend upon India for ITSkill out

    sourcing.

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    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, greaterbrand competition, changing

    lifestyles.

    India's vast middle class and its

    almost untapped retail industry

    are key attractions for globalretail giants wanting to enter

    newer markets.

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    Business sophistication

    Business sophistication is conducive to higher

    efficiency in the production of goods and services.

    It leads, inturn, to increased productivity, thusenhancing a nations competitiveness.

    Process of continual improvement of quality &

    quantity through value chain.

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    Business sophistication Indian Top

    companies in world

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    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 ofbiotechnology as a tool for advancing growth in theagriculture and health sectors .

    Department of Biotechnology (DBT)-T

    he DBT

    has established ahuge infrastructure of 55 globally networked bio-informaticscenters and supports. Presently, 15,000 scientists are estimated tobe engaged in Indias biotechnology sector.

    Indias Information-Communications-Technology (ICT) sector : Itexports software to over 102 countries around the globe and one

    out of every four global giants outsourced their softwarerequirements to India.

    E-Commerce - Electronic commerce means business conducted bymeans of computer networks. online services such asbanking, ticketing (including airlines, bus, railways), billpayments, hotel booking etc. have been of tremendous benefit for

    the customers.

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    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

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    India AND China: Engines of global growth

    1/3 rd of humanity: Demanding goods and servicesfrom the world

    1/4 th of high-skilled manpower: Providing goodsand services to the world

    In 2025, the combinedGDP of India and China will beroughly equal to that ofG-7 minus US (i.e.

    Japan, Germany, France, UK, Canada and Italy).

    India and China cannot afford to ignore each other.

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    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

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    Thank you