Open de l'International 2016 - Focus Inde

Focus IndeVannes, 4 juillet 2016

SpeakerKuntal DESAIBretagne Commerce International Partner for India, Bangladesh, Burma

Indian market



Loca

tion

29 States 7 Union Territories

General information on India


• Area: 3.287 million sq. km(5 times France)

• Administrative capital: New Delhi29 State capitals and 7 Union Territories

• Main Economic Cities: Mumbai, New Delhi, Kolkata, Chennai, Bangalore, Hyderabad.Numerous regional cities and towns

• Currency: Indian Rupee INR, 1 Euro = 73 INR

• Demographics1.32 Billion inhabitants50% of population is between 0-25 years

• LanguagesHindi: Official LanguageEnglish: Main language for business and administrationThere are 22 regional languages with more than 100 dialects

Country data


Parliamentary form of Government in the centre with Prime Minister and Council of Ministers; two houses of Parliament.

Each State has its own government with Chief Minister.

GDP: 2050 billion USD, GDP rank 7 th.

Growth: 7.5%

Inflation: 5.65%

Foreign Direct Investment received 45 billion USD in 2015

Main FDI routes/countries: Mauritius, Singapore, Netherlands, Japan, USA.

Unemployment rate: 4.5%

Foreign tradeIndia & its business partners


Imports• 448 billion USD in 2015• Major suppliers: China, UAE, Saudi Arabia, Switzerland, USA.• Main items: oil, gold & silver, machinery, electronics, precious stones.

Exports• 310 billion USD in 2015 (merchandise), 155 billion USD (services)• Key export customers: UAE, USA, Singapore, China, Hong Kong, Netherlands.• Main items: Refined crude, engineering products, chemicals & pharmaceuticals, gems & jewellery, agricultural products, textiles.

Economic relations India - France


Global Exports Share 2014• France 3.1%. No. 6• India 1.7%. No. 19

Trade • France exports to India: 2.7 billion Euro • India exports to France: 5.2 billion Euro

More than 1000 French companies in India.Investment of 20 billion Euro.Employ more than 300,000 people.French Schools in major cities

French Companies in India• Automotive: Michelin, Renault, auto – ancillaries.• Banking and Financial Sector: BNP Paribas…• Energy: Areva, Alstom, Total...• Retail and consumer goods: Decathlon, Auchan, Sephora, Louis Vuitton, Chanel…• Tourism and hospitality: Accor, Shanti, Dune…

Market attractivenessWhy invest in India ?


The opportunities:

• Growing economy > 7 % per year• Growing ‘middle class’ of 300 million with purchasing power• Young population, 50% under 25 years of age• Reasonable education levels for employment• Large employable population• Improving standard of living and aspiration• Improving communications & infrastructure• Structured Company Law for Limited Companies & LLPs• Independent Judiciary • Foreign Direct Investment 100% possible with exceptions• Organized Industrial areas in major states to attract industry

Why invest in India ?


The broad challenges:

• Inter Cultural: Time, Punctuality, Performance levels• Localised issues – there are 28 states in India with numerous

languages!• Trust, respect for contracts• Recruitment of employees and Training• Retention of employees• Establishment of company / organization: time taken for: - Limited Company or LLP - Regulatory approvals - Central and Regional regulations, Corporate Tax & VAT• Repatriation of investment: structure your equity investment and pay attention to regulatory approvals (Reserve Bank of India) with care• Corporate Tax:

Domestic Companies >100 m INR: 34.61%Foreign Companies > 100 m INR: 43.26%

Why invest in India ?


Business in India for foreign companies establishment

• Foreign Direct Investment through the Automatic route- 100% ownership of foreign company- Establishment of company in India as per Indian regulations

• Foreign Direct Investment through the Approval route

- Approval required for investment by FIPB depending on nature of business- % of ownership to be ascertained depending upon regulations

• ‘Limited Company’ or ‘Limited Liability Partnership’; 100% ownership as per regulations or with Indian shareholders / partners

• Operate through Importers, Distributors, Selling Agents, Representatives or Service Providers through contractual agreements

India, Industry specific information


India Industry specific information


Automobile & ancillaries:OEMS: Maruti Suzuki, Hyundai, Mahindra, Tata Motors, Toyota, Honda, Ford, Renault-Nissan, GM, Volkswagen, Skoda, Daimler Benz, Audi, BMW, Mitsubishi.Tyres: Michelin, Bridgestone, MRF, Apollo, Ceat, JK, TVS.Ancillaries: Numerous from many countries including France.Growth: Approx. 5% , > 11 million vehicles sold per year.

https://www.google.co.in/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&uact=8&ved=0ahUKEwisuJeTiZ3NAhVLqY8KHTFDC2YQjRwIBw&url=http://indiatoday.intoday.in/auto/story/indian-auto-industry-2026/1/382971.html&psig=AFQjCNEp6D_ZaUQTJ0Uu0Ls_aJ84oR-NOw&ust=1465634753443144



Pharmaceuticals:• 3 rd. largest in volume, 14 th. largest in value, USD 30 billion• High growth over the last few years at 10% per year• Generics, Active Pharma Ingredients form the major exports, 20% of global exports• >100 USFDA approved pharma manufacturing units, >USD 6 billion USA export• Formulations, Biotech are newer companies expanding• Multinational presence in India at the top end of the market due to Patent Act

• Pfizer, Glaxo, Sanofi Aventis, Merck, J&J• Indian companies:

• Sun, Lupin, Dr. Reddys, Aurobindo, Torrent.

Power:• 3 rd. largest producer of electricity in the world at 303 GW• 28% - Renewable sources, 72% - non renewable sources• Focus on Renewable sources at present



Retail:• USD 500 billion• 80% small retailers, Governmental regulations for large foreign retail chains• Exception for Hypermarkets: Walmart, Tesco, Auchan etc. presence• Presence of Indian and foreign single and multiple retail chain stores increasing• Single brand stores allowed 100% FDI, presence of global brands increasing

Animal Husbandry:• Largest cattle population > 300 million, 115 m tonnes of milk annually• 3 rd. largest egg producer 75 billion eggs per year• 6 th. largest poultry meat producer, largest exporter of buffalo meat • Dominated by small dairy farms < 50 cattle selling milk to Co operatives• Presence of large modern dairy and poultry farms increasing



Textile:• Market size of USD 120 billion at present.• Exports USD 45 billion, 11% of India exports.• Employs 40 million directly, 60 million indirectly.

Agriculture:• GDP at USD 260 billion, employing 58% of India’s population• 250 m tonnes of food grain, 18 m tonnes of pulses. • Agriculture constitutes 10% of Indian exports, largest spice exporter.

Risks


Risks

• Inter cultural issues, location and industry specific

• Policy changes by the Government

• Lack of infrastructure in particular locations

• Need for complete transparency on costs

• Time related deadlines often not met

• Issues arising from natural calamities

Focus MexiqueVannes, 4 juillet 2016


Business practices, intercultural aspects

Doing Business in India

• Be very clear and precise in your business goals

• Due diligence from internal & external sources is very important for:

• Hiring personnel

• Partners in Business

• Business structure & activity: company and methods

• Periodic Business reviews are essential with key personnel

• Personal and Business interests often overlap: be vigilant

• Take special care on contractual obligations which can change frequently

Focus MexiqueVannes, 4 juillet 2016


SpeakerKuntal DESAIBretagne Commerce International Partner for India, Bangladesh, Burma

Questions/réponses


Merci de votre attention !


Open de l'International 2016 - Focus Inde

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Transcript of Open de l'International 2016 - Focus Inde