Indian Economy Globalisation
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The document discusses India's growing economy and its increasing globalization. It provides statistics that show India's rising GDP, exports, imports, foreign investment, and per capita income. Several sectors such as services, manufacturing, information technology, automotive, and pharmaceuticals are growing. Global companies are investing more in India due to its large consumer base, low costs, and skilled workforce. While India's economy is expanding rapidly, challenges remain around job creation and reducing economic disparities between urban and rural areas. Overall, the statistics and expert comments presented paint a positive picture of India's economy and its increasing integration into the global marketplace.
Indian Economy Globalisation
- 1. IRVING FISHER GROUP INDIAN ECONOMY AND GLOBALISATION
- 2. The term globalization means International Integration. It is a process through which the diverse world is unified into a single society. Opening up of world trade, development of advanced means of communication, internationalisation of financial markets, growing importance of MNC's, population migrations and more generally increased mobility of persons, goods, capital, data and ideas
- 4. Accountability of Global businesses? Increased gap between rich and poor fuels potential terrorist reaction Ethical responsibility of business? Efforts to remove trade barriers.
- 5. Nike Dell Marketing Branding Advertising Cost down Outsourcing
- 6. New trade pattern: developing countries ◦ don't just have to trade their raw materials to the West and get finished products in return; ◦ can become big-time producers as well. New production pattern: global product network ◦ companies can locate different parts of their production, research and marketing in different countries
- 7. Growing global markets in services people can now offer and trade services globally -- from medical advice to software writing to data processing -- that could never really be traded before. W-2, W-4, 1099 bonuses & stock statements Indian accountant US tax payers
- 8. Market economic policies spreading around the world, with greater privatization and liberalization than in earlier decades. ex: BRIC Widespread adoption of democracy as the choice of political regime.
- 9. Multilateral agreements in trade, taking on such new agendas as environmental and social conditions. New multilateral agreements – for services, intellectual property , communications – more binding on national governments than any previous agreements.
- 11. GDP – USD 590 billion GDP growth rate – 9% Services contribution – 54% Balance of Trade – USD (-)46.2 billion Investment goal – USD 250 billion 2006 Growing Indian Economy *: Projected Source: Economic Times & India Brand Equity Foundation (IBEF) GDP – USD 1.16 trillion GDP growth rate – 9.5% Services contribution – 60% Balance of Trade – Negative balance should increase with surging imports versus exports Investment goal – USD 305 billion 2008 * GDP – USD 1.36 trillion GDP growth rate – 9% Services contribution – 60-65% Balance of Trade – Negative balance should increase with surging imports versus exports Investment goal – USD 370 billion 2010 *
- 12. 105 105 135 145 167 103 125 204 231 287 682 191 237 398 453 0 200 400 600 800 1,000 1,200 1999-00 2002-03 2005-06 2006-07 2010* USDBillion Agriculture Industry Services Contribution of Services - increased from 48% to 62% and is estimated to contribute 60% by 2010 Growing GDP *: Projected Source: India Brand Equity Foundation (IBEF)
- 13. *: Projected Source: Ministry of Commerce & IBEF 83.5 103.1 126.3 155 200 50 90 130 170 210 USDBillion 2004-05 2005-06 2006-07 2007-08* 2008-09* Growing Exports
- 14. Source: Ministry of Commerce & IBEF Growing Imports 111.5 149.1 185.7 210.8 50 100 150 200 250 USDBillion 2004-05 2005-06 2006-07 2007-08 (Apr- Feb)
- 15. India's Forex Reserves: 2001-08 (Till 14 March 2008) 54 75 112 141 152 199 306 0 50 100 150 200 250 300 350 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 (Till 14 March 08) USDBillion Steadily increasing Forex reserves offer adequate security against any possible currency crisis or monetary instability Increasing Forex Reserves Source: Reserve Bank of India & India Brand Equity Foundation (IBEF)
- 16. Growing FDI Inflows * Provisional Source: Department of Commerce 8.9 22 30 4.3 6 0 5 10 15 20 25 30 35 2003-04 2004-05 2005-06 2006-07* 2007-08* USDBillion Electronic equipment, manufacturing and telecom have witnessed significant FDI inflow India is ranked second in AT Kearney’s FDI confidence index (2007)
- 17. Increasing Per Capita Income Source: India Brand Equity Foundation (IBEF) & Economic Survey 2007-08 460 797 1021 2000 4000 0 500 1000 1500 2000 2500 3000 3500 4000 USD 2000-01 2006-07 2007-08 2016-17 2025
- 18. Major M&A and Investments Announcements in India USD 1.7 billion Plans to spend on its development operations in India over the next four years USD 2 billion Plans to establish three manufacturing plants to produce photo-voltaic units USD 12 billion POSCO to invest in building steel manufacturing plants and facilities in India by 2016 Source: India Brand Equity Foundation (IBEF)
- 19. Main sectors: Main Destinations: China, UAE, UK North America is emerging as a destination. India Inc. Investing Overseas • Auto Components • IT • Beverages • Metals • Cosmetics • Mobile Communications • Energy • Pharmaceuticals • Financial Services • Software • Industrial Goods
- 20. Additional economic indicators: •India has a consumer base of 1.14 billion people •India is the 4th largest economy in the world when measured by PPP •India’s has a growing middle class of over 300 million people - 30% of India’s population – and larger than the population of the US •India is the 3rd largest global telecom market. The mobile subscriber base has grown from 0.3 Million in 1996 to over 250 million currently. •India is likely to add over 200 shopping malls by 2010 and 715 malls by 2015 •The number of billionaires in the country were 3 in 1999; 23 in 2006; and are 48 currently.
- 21. India’s Trade with USA Imports from USExports to US Source: Department of Commerce, Govt of India 11.4 5 13.7 7 17.3 9.4 18.8 11.7 0.0 5.0 10.0 15.0 20.0 2003 - 04 2004 - 05 2005 - 06 2006 - 07 USDBillion
- 22. Major Items Exported to USA (2006) Textiles 36% Engineering Goods & Machinery 15% Organic Chemicals 6% Iron & Steel 5% Cut and polished diamond & jew ellery 38% Source: US Department of Commerce
- 23. Major Items Imported from USA (2006) Fertilizers 9% Optical & Medical Instruments 11% Precious stones & Metals 14% Aircraft, Aviation Machinery & parts 25% Engineering Goods & Machinery 41% Source: US Department of Commerce
- 24. Buyer Acquisition Price Reliance Industries Flag Telecom, Bermuda US$ 212m Tata Motors Daewoo, Korea US$ 118m Infosys Technologies Expert Information Services, Australia US$ 3.1m Bharat Forge Carl Dan Peddinghaus, Germany N/A Ranbaxy RPG (Aventis) Laboratories, France N/A Wockhardt CP Pharmaceuticals, UK US$ 18m Cadila Health Alpharma SAS, France US$ 5.7m Hindalco Straits Ply, Australia US$ 56.4m Wipro NerveWire Inc, USA US$ 18.5m Aditya Birla Dashiqiao Chem, China US$ 8.5m United Phosphorus Oryzalin Herbicide, USA US$ 21.3m "Toyota Motor has chosen to source from India due to its competitive cost of manufacture, availability of abundant engineering talent, and strong indigenous machine tool."
- 25. Automotive Sector - Overview India is the world’s: • 2nd largest two-wheeler market, • 4th largest commercial vehicle market • 11th largest passenger car market. Expected to be the 7th largest automobile market by 2016 India has become an attractive destination for global American, European, Japanese and Korean OEMs. Source: IBEF, Economic Times
- 26. 1990 FDI $ 234 Million 1998-2003 FDI $ 2.5 Billion Per Year Target FDI $ 10 Billion Per Year Over 620 FIIs Compared to 500 in 2003 and Earlier China FDI & FII FDI $ 50 Billion Per Year FII $ 20 Billion Per Year
- 27. Agriculture acquired 17% of India’s GDP in 2008. 60% of population still depends on agriculture for their livelihood. Occupied 43% of India’s geographical areas. All other sectors are growing at much faster.
- 28. Year Industry(%) Service(%) Agriculture(%) 1991 25 31 44 2007 28 55 17
- 29. Current Literacy rate is 64.84% Year Literacy Rate Male - Female Person Male Female Gap 1981 43.6 56.4 29.8 26.6 1991 52.2 64.1 39.3 24.8 2001 65.4 75.8 54.2 21.6
- 30. "India has a fantastic pool of software professionals. The world needs to benefit from this.“ Bill Gates, Microsoft Chairman This market (India) is critical to our plans for building a Ford Motor Co. for the 21st century Bill Ford, Chairma n and CEO India on its way to becoming IT, manufacturing kingdom of the world The dynamism shown by India in the last 15 years is phenomenal Mr Yasukuni Enoki, Japanese Ambassador to India Paul Wolfowitz, President, World Bank What are people talking about India?
- 31. High growth but problem of unemployment. Need to generate 10 million jobs per year. Multi party rule, hence need to accommodate political ideology with economic reality (reservation, labour law reforms).
- 32. Companies in India That Have Successfully Met Competition by Multinationals & Domestic Companies Had A Spirit Of Innovation Not Only In Their Products And Services But Also With Reference To All Their Resources And Effectively Restructured Them In A Time And Cost Frame And Met Customer Needs And Improved Their Top And Bottom Line.
- 33. Thank You