INDIAS SHARE IN WORLD ECONOMY

Linking INDIA to World Economy

INDIA:1991 TILL NOW..

Until 1991, all Indian governments

followed protectionist policies that were influenced by socialist economics. Widespread state intervention and regulation largely walled the economy off from the outside world. An acute balance of payments crisis in 1991 forced the nation to liberalise its economy; since then it has slowly moved towards a free-market system by emphasizing both foreign trade and direct investment inflows. India's recent economic model is largely capitalist.

 At present India is the 2nd most preferable

destination for Foreign Direct Investment(FDI).

Core areas of development are: Tele communication,

IT, Auto-components, Chemicals, Apparels and Jewellery. India has become more liberal and open now.

Linking INDIA to World Economy

A C C O R D I N G T O T H E I N T E R N A T I O N A L M O N E T A R Y F U N D , A S O F

INDIA AS AN ECONOMY
INDIAN LABOUR

2011, THE INDIAN ECONOMY IS WORTH US$1.631 TRILLION; IT IS THE NINTH-LARGEST ECONOMY BY MARKET EXCHANGE RATES.
T H E

467-MILLION WORKER THE WORLD'S SECOND-LARGEST.

M A J O R

FORCE

IS

INDUSTRIES INCLUDE TEXTILES, TELECOMMUNICATIONS, CHEMICALS, FOOD PROCESSING, STEEL, TRANSPORT EQUIPMENT, CEMENT, MINING, PETROLEUM, MACHINERY, AND SOFTWARE.
INDIA WAS THE WORLD'S FIFTEENTH-LARGEST IMPORTER IN

2009 AND THE EIGHTEENTH-LARGEST EXPORTER.

W I T H 7 O F T H E W O R L D ' S T O P 1 5 I N F O R M A T I O N T E C H N O L O G Y

OUTSOURCING COMPANIES BASED IN INDIA, THE COUNTRY IS VIEWED AS THE SECOND-MOST FAVOURABLE OUTSOURCING DESTINATION AFTER THE UNITED STATES.

India's consumer market, currently the world's thirteenth-largest, is expected to become fifthlargest by 2030.

Driven by growth, India's nominal GDP per capita has

steadily increased from US$329 in 1991, when economic liberalization began, to US$1,265 in 2010, and is estimated to increase to US$2,110 by 2016.

According to a 2011 PwC report, India's GDP at

purchasing power parity will overtake that of the United States by 2045.

 Goldman Sachs predicts that China and India, respectively,

will become the dominant global suppliers of manufactured goods and services world's land coverage and 40% of the world's population and hold a combined GDP (PPP) of 18.486 trillion dollars. GDP per capita in US$ terms will quadruple", and that the Indian economy will surpass the United States (in US$) by 2043.[18] Despite its present low Nominal real GDP Per Capita levels, India is now aiming to go past $ 4,500 threshold by 2020 & thereby achieving Upper-Middle Income country status. Many analysts predicts that India would emerge as a high-income economy during 2025-30

India is a part of BRICS which encompasses over 25% of the

Goldman Sachs predicts that "from 2007 to 2020, India's

Linking INDIA to World Economy

INDIAS
CONTRIBUTION TO WORLD ECONOMY

Linking INDIA to World Economy

Indias Contribution to Worlds Economy

Government Intervention
Major improvements in educational standards across

India.

In the late 80s the government led by Rajiv Gandhi

eased restrictions on capacity expansion for incumbents, removed price controls and reduced corporate taxes. While this increased the rate of growth, it also led to high fiscal deficits and a worsening current account.

Linking INDIA to World Economy

Indias Contribution to Worlds Economy

Public Receipts The tax reforms, initiated in 1991: (a) Reducing the rates of individual and corporate income taxes, excises, customs and making it more progressive (b) Reducing exemptions and concessions . (c) Simplification of laws and procedures. (d) Introduction of PAN to track monetary transactions.
Linking INDIA to World Economy

Indias Contribution to Worlds Economy

Public Receipt
Tax receipts of Centre & State amount to

approximately 18% of national GDP.

limited resources of Government affect its ability to

pay fair wages to public servants. This may well be the cause of endemic corruption at all levels of government.

Linking INDIA to World Economy

Indias Contribution to Worlds Economy

Physical Infrastructure
India's low spending on power, construction,

transportation, telecommunications and real estate, at $31 billion or 6% of GDP in 2002 had prevented India from sustaining higher growth rates.
India holds 2nd position in the world in roadways'

construction, more than twice that of China.

Linking INDIA to World Economy

Indias Contribution to Worlds Economy

Agriculture Sector Agriculture & allied sectors like forestry logging and fishing accounted for 16.6% of the GDP in 2007.
2nd largest world-wide in farm output.

Linking INDIA to World Economy

Indias Contribution to Worlds Economy

Industry India is 14th in the world in Factory Output.
Account for 27.6% of the GDP and employ 17% of the

total workforce.

Linking INDIA to World Economy

Indias Contribution to Worlds Economy

Service Sector India is 15th in service output.
It provides employment to 23% of work force, and it

is growing fast, growth rate 7.5% in 19912000 up from 4.5% in 195180.

Contribution of IT to GDP increased to 4.8 % in

2005-06 and is projected to increase to 7% of GDP in 2008.

Linking INDIA to World Economy

INDIAS
ECONOMIC STABILITY AND POSITIONS IN GLOBAL MARKET

Linking INDIA to World Economy

Indias Contribution to Worlds Economy

According to Forbes Global2000 ranking for 2011,

Five leading companies are:

Forbes Rank
121

150

152

Company Name Reliance Industrie s State Bank of India Group Oil & Natural Gas

Industry Sales
Oil & Gas 34.03 Operations

Profits 4.87

Assets 43.61

Market Val
35.95

Banking

22.63

2.23

255.86

12.75

Oil & Gas 24.04 Operations

4.95

35.35

28.91

Indian Oil & Gas 51.66 Operations Oil Utilities 9.63 317 NTPC Linking INDIA to World Economy

207

1.97
1.86

33.64
24.58

10.2
29.7

Emerging Market Growth : 1980 2006

17
2,700 2,400 2,100 1,800 1,500 1,200 900 600 300 United States Euro Area

PPP adjusted GDP ($ bn)

China

(1980 = 100)
Korea Taiwan India

Japan

1992

1994

1996

1980

1982

1984

1986

1988

1990

1998

2000

2002

2004

Emerging economies amongst the fastest growing

2006

GDP Growth in Current YEARS

Linking INDIA to World Economy

Contribution to GDP growth

Linking INDIA to World Economy

Balance of Payments

Linking INDIA to World Economy

FDI LIMITS IN INDIA

INSURANCE: 26%

TELECOMMUNICATION: 49%
TRADING: 51% POWER: 100% BPOS: 100% DRUGS: 100% ROAD,HIGHWAYS: 100% POLLUTION CONTROL: 100% NBFC: 49% RETAIL: 100%(RECENTLY CHANGED FROM 51%)
Linking INDIA to World Economy

PROSPECT OF INDIA IN INTERNATIONAL MARKET

Linking INDIA to World Economy

Exports: traditional goods remain dominant but their share has declined sharply. Though traditional goods registered the slowest growth rates during 1992-2004 (less than 10%) and their share has declined sharply, they still accounted for more than 50% of exports in 2004. Food represented 10% in 2004, compared to 34% in 1980, and textiles 20%, compared to 28% in 1980.

Imports show the extent of Indias integration into the world market. Electronics and textiles have increased as a share of total imports, indicating a certain degree of productive integration, since imports of such goods were practically non-existent in 1980.

US has retained its top position. while China was ranked 2nd , a survey carried out by the Association of Foreign Investors in Real Estate (AFIRE) said. China moved to the 2nd position, garnering 21.4 % votes and displacing India in the process, which was preferred only by 16.7% of the respondents favoring the country as the most fancied place for real estate investment.

Major M&A and Investments Announcements in India

POSCO to invest in building steel manufacturing plants and facilities in India by 2016

USD 12 billion

Vodafone buys Hutch

USD 11 billion

Plans investment in private equity, real estate, and private wealth management

USD 1 billion

Plans expansion of cement capacity in India

Over USD 1 billion

Plans to spend on its development operations in India over the next four years

USD 1.7 billion

Indian firms seek global reach

Tata Steel bought Corus Plc Hindalco acquired Novelis Inc. Suzlon Energy Ltd. acquired REpower Dr. Reddys acquired Betapharm United spirits acquired W&M

USD 12.1 billion

Acquisition made Tata Steel worlds fifth largest steel producer globally

USD 6 billion

Acquisition made Hindalco the world largest aluminum rolling company

USD 1.6 billion

Acquisition made Suzlon world's thir largest wind power company

USD 0.5 billion

Acquired Germans third largest generic companies

Acquisition made United Spirits world's second largest spirit company

USD 0.5 billion

INDIA AS A KEY PLAYER:

ITS STRENGTHS AND WEAKNESSES

Indian Workers in Overseas

38% of Doctors in America

are Indians.
12% of Scientists in

34% of MICROSOFT

employees are Indians.

28% of IBM employees

America are Indians.

36% of NASA employees

are Indians.
13% of XEROX employees

are Indians.
17% of INTEL

are Indians.

employees are Indians.

Evaluation
Weaknesses
Debt GDP ratio high Inadequate infrastructure, huge funding needed Unsatisfactory investment climate Rising gap between rich and poor Dependence on oil imports, monsoons Huge Population growing year by year

Strengths
Sustained growth for over a decade (but recent slowdown) Strong export potential, Healthy forex reserves Low external debt Low inflation
Political consensus on reforms Deepening financial sector Knowledge base advantage, demographic surge

Why India? Quote Unquote

India is now truly a land of opportunity. India has evolved into one of the world's leading technology centers.
Craig Barrett Intel Corporation Peter Loescher President and Chief Executive Siemens

I have never seen India so dynamic, vibrant and full of business opportunities.

John Redwood Economic Competitiveness Policy Group, UK

By 2032, India will be among the three largest economies in the world.

We came to India for the costs, stayed for the quality and are now investing for innovation.

BRIC Report, Goldman Sachs

The Indian market has two core advantages - an increasing presence of multinationals and an upswing in the IT exports.

- Dan Scheinman, Cisco System Inc. as told to Business Week, August 2005

India is a developed country as far as intellectual capital is concerned.

India is a very exciting market and the luxury car segment is growing exponentially here.
Mr Paul de Voijs Managing Director Volvo Car India

Travyn Rhall, ACNielsen

Jack Welch General Electric

31

COMPARISION OF BRICS COUNTRIES RANKS AS ON 2011 CATEGORY AREA POPULATION LABOUR FORCE GDP (NOMINAL) BRAZIL 5 5 5 7 RUSSIA 1 9 7 11 INDIA 7 2 2 10 CHINA 3 1 1 2 AFRICA 25 25 34 28

EXPORTS
IMPORTS RECEIVED FDI

18
20 11

11
17 12

16
11 29

1
2 5

36
34 31

CATEGORY FOREX RESERVES EXTERNAL BEBT RAIL NETWORK ROAD NETWORK NO OF INTERNET USERS NO OF MOBILE USERS MOTOR VEHICLE PRODUCTION

BRAZIL 7 28 10 4 5

RUSSIA 3 24 2 8 7

INDIA 6 26 4 3 4

CHINA 1 23 3 2 1

AFRICA 33 45 12 18 44

25

19

24

.. And can help transform India

Let us all work towards this transformation