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jharaman96@gmail.com/yahoo.in
CONTENTS
THE INDIA STORY INDIAN SUCCESS STORIES INTERNATIONAL SUCCESS STORIES INDIA ADVANTAGE BUSINESS OPPORTUNITIES BUSINESS OPPORTUNITES FOR PHILIPPINES SME : ADDING VALUE WINNING ATTITUDE ACKNOWLEDGEMENT
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Todays India is one of the fastest growing Democratic Market Economy, well on its way to be integrated with the world economy The famous Goldman Sachs report ( Dreaming with BRICs: The Path to 2050 ) states that, among Brazil, Russia, India and China, India will grow the fastest over the next 30 to 50 years by leveraging its demographic advantages and through continued development Indias GDP will exceed Italys in 2016, Frances in 2019, Germanys in 2023 and Japans in 2032 INDIA TO BECOME THE 3RD LARGEST ECONOMY IN THE WORLD BY 2032
Planned Industrial Development Industry Licensing and Quotas Dominance of Public Sector Restriction on Private Investment Socialism Mixed Economy
De-licensing De-control Liberalization of Industrial Licensing De-regulation Broad banding Abolition of registration
FERA Liberalization
Abolition of threshold assets limit MRTP Liberalization No MRTP clearance needed for expansions, mergers
Several industries hitherto reserved for public sector opened up to private sector Curtailment of Public Sector
Only eight core industries remain reserved for the public sector
Purview of Board for Industrial and Financial Reconstruction (BIFR) extended to Public sector
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Average Per Capita Income growth (1995 - 2005): 3.8 % per annum Inflation down to a single digit level continuously for the last ten years Foreign exchange reserves increased from US $ 2 b (March 1991) to US $ 145 b (September 2005) Merchandise Exports : +20 % average rate of growth in last three years Booming Services Exports from US $ 4.6 b in 1990-91 to US $ 51.3 b in 2004-05
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60 50 40 30 20 10 0
32.2
40.6 27.2
1990-91
1995-96 Agriculture
2004-05
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Agriculture
India the worlds most irrigated land mass worlds 2nd largest exporter of rice & 5th largest exporter of wheat Food production: Indias Ranking in the World
1st 2nd
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Manufacturing
Diversified base of world class capabilities State-of-the-art technologies TQM,TPM, Six Sigma & Lean Manufacturing - part of everyday practice Diversified industrial base with supporting ancillary industries Overseas acquisitions worth US$ 500 m
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Services
Consistent growth 2003-04 2004-05 Sectors Driving Growth - ITES - Healthcare - Financial Services - Education 9.1 % 8.9 %
Growth (%)
6.2 5.5 4.9 4.7 3.3 2.9 2.9 2.0 Philippines India Thailand Indonesia USA S.Korea Mexico Brazil
18.1
23.1
25.5
26.9
30.3
28.9
31.6
32
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Land Area: Population: GDP: Real GDP Growth: Gross Domestic Savings: Gross Domestic Investment: Per Capita Income: Inflation Rate:
3.29 m sq. km. 1.09 b US $ 630 b 6.9 % 28.1 % (2003 - 04) 26.3% (2003 - 04) US $ 580 6.4 %
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Exchange Rate: Merchandise Exports: Merchandise Imports: Services Exports: Foreign Direct Investment: Foreign Portfolio Investment: Direct Investment Abroad:
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Number of foreign firms acquired by Indian companies during 2001 - 03 Total worth India - 8th largest investor in the UK No of investments No of Indian companies with operations in Singapore
120
US $ 1.6 b
440 1,441
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Hero Honda - Largest producer of motorbikes in the world Moser Baer - Worlds 3rd largest producer of optical media Hero Cycles - Worlds largest bicycle producer Bharat Forge - Amongst the worlds top 3 forgings manufacturers UB Group - Worlds 2nd largest producer of alcoholic beverages Paharpur Cooling Towers - Worlds 2nd largest manufacturer of Cooling Towers
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Apollo Hospitals - Single largest hospital chain in South Asia TISCO - worlds cheapest producer of steel Reliance Industries - Worlds largest producer of PTA, a chemical used in textile production Mahindra & Mahindra - Amongst top 3 tractor manufacturers in the world Telco - Amongst top 3 truck manufacturers in the world Welspun - Worlds largest producer of terry-towels Gujarat Ambuja - Amongst top 5 cement producers in the world
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Wipro was set up in the backdrop of the small town of Amalner in Maharashtra in 1945 An SME and primarily an oil factory, the chief products were Sunflower Vanaspati and 787 laundry soap It was in the early eighties that Wipro made its foray into the Infotech arena With this began the Wipro Infotech story Today, Wipro stands at the firmament, as a trusted and experienced provider of a comprehensive range of IT services, solutions and products, worldwide
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Bharti Enterprises has successfully focused its strategy on telecom while straddling diverse fields of business It all began as a Small Industry Bharti Tele-Ventures is today acknowledged as one of India's finest companies, and its flagship brand 'Airtel', has over 12 million customers across India Recently, Bharti has successfully launched an international venture with EL Rothschild Group owned ELRO Holdings India Ltd., to export fresh Agri- products exclusively to markets in Europe and USA
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Biocon is India's leading biotechnology enterprise Over the past 25 years, they have evolved from an small enzyme manufacturing company to a fully integrated biopharmaceutical enterprise, focused on healthcare At Biocon, success has been their ability to develop innovative technologies and products and to rapidly leverage them to adjacent domains This unique "integrated innovation" approach has yielded a host of patented products and technologies that have enabled multi-level relationships with their global clientele As India's first and leading biotechnology company, Biocon extends its support to numerous community outreach and corporate citizenship initiatives with special concentration in the areas of healthcare, education and environment The Biocon Foundation, set up in 2004 has recently launched Arogya Raksha Yojana, a unique health initiative for rural India
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In its over four decades of existence, Paharpur has come to be acknowledged as the pioneer in the Indian cooling tower industry It all began as a small industry with a capital of US $ 11,000 At today's selling prices, Paharpur has sold cooling towers valued at over US$ 1 b If these cooling towers were all working together, they would be able to cool more than 265 million liters of water every minute or 382 b liters in 24 hours The Paharpur team consists of highly qualified engineers & professionals with over 1,000 man years of experience in the field of cooling tower application engineering, designing, erection and trouble shooting Paharpur has pioneered several improvements in cooling tower design and operation and has emerged as one of the largest cooling tower manufacturers in the world, with exports to more than 40 countries
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A successful SSI unit set up in 1980, in NCR, Delhi It is the largest lube oil flexible packaging company in India producing packaging materials, machinery and systems and doing contract packaging
Produces /contract packages over 300 m packages a year, for the oil majors in Delhi, Kolkata, Chennai and Mumbai
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Success Story of Paharpur Business Centre & Software Technology Incubator Park
Began operations in 1990 in New Delhi, with an equity capital of Less than US $ 15,000 Current net worth of US $ 10 m Provides a suite of 28 services, employing 450 persons Has Fortune 500 companies, MNC's and corporate, as clients Has five international certifications, ISO 9001, ISO 14001, SA 8000, OHSAS 18001 and HACCP Commitment to UN Global Compact
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Success Story of Paharpur Business Centre & Software Technology Incubator Park
Publishes its annual Sustainability Report following the GRI system Reports its triple bottom line - relating to profit, environment and sustainability Now providing technical support to setting up of a 1.7 m ft2 Software Park near Delhi that has been given the SEZ status by the GOI The Haryana Technology Park Company showcased by CII at the World Summit on Sustainable Development in Johannesburg in 2002 for its sustainability initiatives Its USP is the Clean Indoor Air in its Center in Delhi - Certified Mountain Quality Air using biotechnology developed by NASA, USA to clean air
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India attracts second highest private equity investment in Asia Total equity flow to India between 1999 and 2004 doubled Source: NASSCOM from US $ 5.12 b to US $ 11.50 b
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36
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Why India? Great resources of highly qualified scientists as staff Availability of human capital with low labor costs Internationality: English language and understanding of European culture (due to British history, existence of numerous institutions, administrations, school etc) Economic Policy
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Quite simply, I was blown away by what I saw on my first trip to India Stephen Roach, Managing Director & Global Chief Economist, Morgan Stanley 2004
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INDIA ADVANTAGE
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Proficiency in English
Rich biodiversity
By 2020
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375 83 73 56 41 38 20 13
Singapore USA India Germany Hong Kong Japan Taiw an Korea Mexico China
7.4 7.3 7.2 7.1 7.1 7.0 6.6 5.7 5.3 4.3
-3
Source: NASSCOM
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Low Wages
Total Compensation for Workers in Heavy Manufacturing (US$ per Hour)
25 20.32 20 15 10 5 0 USA Korea Mexico China India Indonesia 8.35 2.27 0.75
0.43
0.35
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in p e r c e n t
120 100 80 60 40 20 0
150 110 50
1991 Mar-92 Mar-95
42
Mar-97
38.5
Mar-00
30
Mar-02
25
Mar-03
20
w.e.f March 2004
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A network of technical and management institutes of highest international standards for development of human resources
India has a record of meeting its international financial obligations as per schedule and has never been a defaulter No communication barrier, as English is the most prevalent business language Strong and vibrant small scale sector that is keen to establish strategic alliances with their foreign counterparts
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Supportive infrastructure base Strategic location for third country markets, particularly in the rapidly growing south and south-east Asian countries
The strategic location of India and its easy and efficient access to the Middle East, East European countries, CIS countries, Africa, South East Asia and Asia-Pacific countries places it in a unique position as a sourcing ground for entering into strategic alliances in export-oriented industries
Foreign companies can take advantage of Indias strategic location and tap the markets of these countries. India is slowly but surely emerging as an attractive destination for foreign investment Liberalized industrial and foreign investment policies
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The Government is vigorously promoting and approving foreign direct investment keeping in view the objective of attracting at least US $ 10 b per annum
The Government is very keen to attract sizeable foreign investment into infrastructural projects like roads, power, ports, telecommunications, etc. as the demand for infrastructural services is expected to rise several times to match the projected economic growth of around 8 % per annum in the next ten years
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Defence Telecom Civil Aviation Real estate & construction sector Integrated township development Tea plantation
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298 m tonnes
126,000 MW
Telephone Connections Fixed lines (Dec, 2004) 8th largest telecom network in the world
Source: Department of Economics & Statistics, Tata Services Ltd
77 m lines
44.76 m
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BUSINESS OPPORTUNITIES
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Software Biotechnology Outsourcing Retailing Real Estate Auto Components Telecommunication Media & Entertainment
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Opportunities in Software
The Software industry in India is witnessing an explosive growth and expects to generate US $ 87 b including US $ 50 b from exports by 2008 More than 150 global business giants have set up research and development facilities in India Some of these firms are GE, Microsoft, TI, HP, IBM, Daimler Chrysler and Motorola Bangalore has over 150,000 software engineers and a concentration of hi-tech companies Delhi and NCR is the 3rd largest exporter of Software services from India More than 70,000 software professionals enter the Indian market each year
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China has a worker base equal to India's in terms of cost, quality and scale
In future, the Indian software Industry will use China as a base to cater to the local markets including Japan
Indian firms such as HCL, TCS, Infosys and Wipro have already opened centers in China to outsource technology talent
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Growing IT Market Size (2002 - 03) Growth rate CAGR (since 1999) Share of IT and BPO 2008 projection US $ 24 b 28 % 46 %
1.4 % of GDP 7%
+ US $ 12 b + 30 % pa
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Opportunities in Biotechnology
Biotechnology is a fast emerging sector in India The consumption of biotech products in India was US $ 1.8 b in 1999 and is expected to cross US $ 4.2 b by 2010 It is estimated that 10 % of the researchers and 15% of the scientists in pharmaceuticals and biotech R&D in USA are of Indian origin India is churning out 2 m graduates, 300,000 post graduates and 1,500 PhD's, every year Biocon, the first biotech company was launched in 1978 Indian Firms such as Shantha Biotech, Bharat Biotech, Dr. Reddy's Lab and Biocon are all very successful firms
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2002- 03
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Pharma Market
Size (2002- 03) Size 2010 (estimated) CAGR Exports CAGR(1995 - 2002) (1995 - 2002) US$ 7 b US$ 25 b 16.6 % 23 %
Volume wise
Share of formulations
80 %
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Opportunities in Outsourcing
The Indian Outsourcing industry is moving up the value chain It is BPO today but the future is for Knowledge Process Outsourcing (KPO), Financial Process Outsourcing (FPO) and Legal Process Outsourcing (LPO) It is providing value through domain expertise rather than process expertise India, in the new knowledge economy, is all set to emerge as a global KPO,FPO and the LPO hub It is estimated to capture 71 % of the world market by 2010 against 56 % today giving it a market of US $12 b There are new opportunities, given that there is a serious shortage of quality teachers, in the USA
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Opportunities in Outsourcing
The remote education market is expected to be US $ 15 b by 2008 The current leaders are Engineering design US $ 400 m, basic data search, integration and management US $300 m and Biotech and Pharma US $ 280 m The Compounded estimated annual growth of KPO for India is 50 % whereas BPO will grow at about 30 % KPO is expected to engage 250,000 people by 2010 It will be in areas such as biotechnology,animation and graphics,design in aerospace & automotive, health care, pharma research, learning solutions, data management, customer analytics and entertainment FPO will include insurance underwriting, risk assessment, equity research and corporate market research
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2002-2003 33%
- ITES exports projected to touch US$ 24 b by 2008 - India offers combination of cost-quality-scale advantage
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The Indian automotive industry has grown at a staggering pace over the last few years The US$ 6.8 b industry has registered a CAGR of 17 % between 1998 - 2003 and is projected by ACMA to grow at a 15 % CAGR till fiscal 2012 The opening up of the sector over the last decade has caught the attention of global auto majors In the 1990s, economic liberalization allowed foreign automakers such as Hyundai, Ford, Toyota and GM set up base in India They also persuaded their overseas components suppliers to set up local manufacturing bases in India For example, Delphi followed General Motors and opened their plant in the state of Gujarat in 1995 and Visteon followed Ford in 1998
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US $ 6.8b US $ 17b US $ 5b
Key Features - Suitability as a low cost manufacturing base for MNCs - Costs 20 - 30 % lower, compared to USA - High product quality, superior design & engineering capabilities
* Source: ACMA
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Opportunities in Telecommunication
Until 1995, during the more than forty years of government monopoly, there were 9.4 m telephone connections There are 46.2 m fixed line subscribers and 52.2 m mobile phones The mobile phone market is growing at 2 m per month Estimated rise in Cellular by 100 m subscribers by 2007 Basic telephone connections 175 m by 2010 100 % FDI in telecom equipment manufacturing Almost 2 m wireless subscribers getting added every month Unlike many developed countries, the GSM and CDMA technologies co - exist The outsourcing boom would not have occurred without the private telecom sector 70
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Bilateral Trade
Value in US $ m
Year 1997- 98 1998 - 99 1999 - 00 2000 - 01 2001- 02 2002 - 03 2003 - 04 2004 - 05 Export 239.01 118.71 143.68 201.63 248.63 473.23 321.54 393.90 Import 27.77 37.25 56.31 62.97 95.17 123.98 122.11 181.87 Total Trade 266.78 155.96 199.99 264.60 343.80 597.21 443.65 575.77 Balance of Trade 211.24 81.46 87.37 138.66 153.46 349.25 199.43 212.03
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Use of cleaner vehicle fuels - CNG, Gasohol, Biodiesel, Fuel cell, Electricity Solar energy Wind energy Mass transportation systems Underground, Monorail Usage of Appropriate technologies for Green Buildings Innovative urban planning incorporating walkways and bike lanes
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Improvement Of Ambient Air - Nehru Place Greens, New Delhi 1996 - 2005
Parame te r ASHRAE* Standard (m aximum ) 1000 PPM 0.055 ug / m 3 100 ug / m 3 1996 1999 2001 ASHRAE** Standard (m aximum ) 300-500 ppm 10 mg / m 3 0.005 mg / m 3 0.012 mg / m 3 1.5 ug / m 3 100 ug / m 3 365 ug / m 3 260 ug / m 3 C arcinoge ni cc 2002 2004 2005^
Formal de hyde 0.4 mg / m 3 Le ad Ni troge n dioxi de Sul phur dioxi de SPM RSP Be nz e ne
*
American Society for Heating, Refrigeration, Air Conditioning Engineers 62-1999 (revised) American Society for Heating , Refrigeration, Air Conditioning Engineers 62-2001 (revised) # Below Detectable Level c Any presence of Benzene is carcinogenic ^ Data validated to August 2005 78
**
1996
1999
2001
ASHRAE** S tan dard (m axim um ) 700 ppm e xce ss of 3 ambi e n t 10 mg / m 100 ug / m 3 0.5 mg / m 3 1.5 u g / m 3 100 ug / m 3
2002
2004
2005 ^
0.087
BDL# 22
365 ug / m 3 23 94 47 BDL
#
606 218
American Society for Heating, Refrigeration, Air Conditioning Engineers 62-1999 (revised) American Society for Heating , Refrigeration, Air Conditioning Engineers 62-2001 (revised) Below Detectable Level c any presence of Benzene is carcinogenic
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Areca Palm (Living Room Plant) Using toxin removing plants to clean the air
Biotechnology originally developed by NASA, USA and research done by PBC - STIP on plants suitable for the Delhi climate
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SMEs IN EU
Max. Turnover m 50 10 2
Euro
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SMEs IN INDIA
The definition of small-scale industries (SSI), is given below
Norms for Definition of SSI in India Maximum Limit of Investment in plant and machinery in INR m Year 1985 1991 1997 1999 SSI 3.5 6 30 10 Ancillary 4.5 7.5 30 10
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This is where the SSI is creating a successful niche for itself. Technology is empowering people at all levels cutting across sectors This has helped India graduate from being a promising economy to one of the fastest growing economies
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350 SSI and 2,000 artisans clusters Panipat (Haryana) accounts for 75 % of the total blankets produced in India Tirupur (Tamilnadu) contributes 80 % of the countrys hosiery exports Agra (Uttar Pradesh) produces 150,000 shoes per day valued at US $ 1.3 m Ludhiana (Punjab) produces 95 % of the countrys woolen knitwear, 85 per cent of countrys sewing machines and 60 per cent of bicycle and bicycle parts
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Dedicated Ministry and allied organisations offer Policy Support - Reservation, Priority Sector Lending, SEZ, Labor Institutional support - Through testing centres, tool rooms, entrepreneurship development institutes, training, warehousing Partnership support - Sub-contracting, ancillarisation & vendor development Marketing Support - Through Trading Houses, Subsidizing the participation at international Trade Fairs, sales promotion and business travel
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Credit Guarantee Fund Trust Scheme Collateral free loans of lenders to SSIs up to US $ 58,000 Payment to SSI suppliers should be made within 120 days Reimbursement scheme in respect of ISO 9000 Quality Certification Instituting marketing development assistance scheme
89
The promotion of inter-firm linkages Use of Internet: Web Portals like eBay have opened a new avenue, which the SSI are using as a tool, for marketing
The increasing presence of Multinational corporations have opened new opportunities for subcontracting
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SSI Sector
Marketing SIDO, NSIC,SSIDCs, EPCs Entrepreneurship Development SIDO, EDI, NIESBUD, SISIs Specialized Institutions
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Over 11 m Units
Over 27 m Employed
7% of GDP
93
2.4
1.5 2
9.5
26
2.4
10
28
2.3
24
50 % of the total number of ISO 9001 / 14001 certified units are from the SSI Sector
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WINNING ATTITUDE
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Need to hone their skills More adaptive thinking Greater entrepreneurial drive to find new horizons of growth with a competitive spirit Foresight with a fierce unrelenting passion to execute and act today to improve the future Bring change more aggressively and lead the organization to implement sustainable changes Energizing their team and inspiring them for excellent team performance Delegating authority to allow people to perform
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Ability to reach out to a wide international network for ideas and problem solving Understanding on how things get decided and done Using customized strategies to influence specific stakeholders Executive maturity and emotional wisdom to respond to others and embody the aspirations of ones organization Inner strength to do the right thing at the right time Courageous dedication to super ordinate goals, doing what is right and what will make India great To keep learning and be abreast of new technology
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Acknow ledgement
PHDCCI PHD Chamber of Commerce and Industry CII Confederation of Indian Industry FICCI Federation of Indian Chamber of Commerce and Industry Assocham Associated Chamber of Commerce and Industry of India IGCC Indo German Chamber of Commerce IACC Indo American Chamber of Commerce ICRIER Indian Council for Research in International Economic Relations NASSCOM National Association of Software and Service Companies USCAN Uniting Services Consulting Advocacy and Networking Paharpur Business Centre The International Division
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THANK YOU
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