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SUBJECT- ECONOMICS
The Indian economy has witnessed an unprecedented growth. Booming Indian services and industry sector are providing the required impetus to the economic growth
India's GDP: 2002-07 700 600 USD Billion 500 400 300 200 100 0 2002-03 2003-04 2004-05 2005-06 2006-07 4% 424 484 534 590 631 8.5% 7.5% 8.4% 9.4%
Indian economy is the 4th largest in terms of PPP USD 4.1 trillion in 2006
USD Billion
The sound performance of each industry segment is leading to the overall robust performance of the Indian economy
700 600 500 400 300 103 200 100 0 205 104
168 117
347
2006-07
USD Billion
Indias enhanced economic performance has been the major contributor towards increased Forex reserves
213
at present level of Forex reserves, the country has adequate cover for 12 months of imports
Steadily increasing Forex reserves offer adequate security against any possible currency crisis or monetary instability
Forex reserves witnessed an increase of 200 percent for the period 1990-2007
Ratio
16
Increased confidence of investors in Indian companies have led to a surge in cross border borrowing by the corporate houses
13
the decreasing external debt to GDP ratio indicates that India has a sound economic platform
2001-02 2002-03 2003-04 2004-05 2005-06 2006-07
10
Acceptance of Indian products along with the cost advantage has provided an edge to Indian companies
Quality and cost advantage are the two important parameters leveraged by the Indian producers to increasingly market their products and services
USD Billion
Indian companies have chalked out extensive plans to increase their presence abroad
India's Import: 2002-07 (till February 2007) 180 160 140 120 100 80 60 40 20 0 149.65 111.89 78.28 61.52 162.30
Petroleum products are the major contributors towards Indias growing imports
2003-04 2004-05 2005-06 2006-07 (upto Feb. 07)
2002-03
With improved performance on PE ratio and ROE, Indian markets have attracted large investments
FDI Inflow - India: 2001-07 18,000 16,000 14,000 15,730
USD Million
FDI inflow for the period 2006-07 witnessed a growth of 180 percent over the same period last year
2004-05
2005-06
2006-07
12 10.00 10 USD Billion 8 6 4 2 0 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 1.80 0.60 10.20 9.40 6.72
Mauritius has been the largest contributor towards FDI into India..
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India is among the major destinations across the globe for inflow of US Dollar i.e. FIIs
16,000 14,000 12,000 10,000 IN R 8,000 6,000 4,000 2,000 7/1/1997 7/1/1998 7/1/1999 7/1/2000 7/1/2001 7/1/2002 7/1/2003
12/30/1999 Crossed 5,000 mark
Emergence of industry and confidence of local investors along with the FIIs has led to increased movement of sensex
7/1/2004
7/1/2005
7/1/2006
7/1/2007
SECTOR
Automotive
USD (Mn)
518 1,375 1,133 896 1,484 1,327
SECTOR
Manufacturing Media Oil & Gas Pharma & biotech Telecom Others
USD (Mn)
933 630 384 2,520 2,198 4,006
Number of deals
Banking and Financial Chemicals and Plastics Electrical and Electronics Energy FMCG, Food and Beverages IT and ITES
2,903
Total
20,305
In 2006, there were a total of 480 M&A deals and 302 private equity deals Average deal size close to USD 36 million Contribution of private equity deals to total number of deals have increased from nearly 9 percent in 2004 to 28 percent in 2006
10
USD 6 billion
11
Plans to spend on its development operations in India over the next four years
Plans investment in private equity, real estate, and private wealth management
USD 1 billion
Aditya Birla Group increased its stake in Idea Cellular by acquiring 48.14-percent stake
Renault, Nissan and Mahindra & Mahindra has initiated a Greenfield automobile plant project in Chennai.
12
India has been ranked superior to other major countries by many prominent surveys
100
AT Kearney placed India among the top three in its FDI confidence index
the retail market along with the services sector has been attracting the interest of major players
India is expected to outperform its rivals in the BRIC, in terms of GDP growth rates, from 2015 onwards
0 2005-10 2010-15 2015-20 Brazil 2020-25 2025-30 China 2030-35 India 2035-40 Russia 2040-45 2045-50
13
Population (million)
Rich (Above 115,000) High Income (57,000 115,000) Consuming class (23,000 57,000) Working class (10,200 23,000) Needy (Below 10,200)
9 48 221 726
2001-02
2005-06
2009-10(E)
* In PPP terms
Increasing per capita income and large population moving into middle class has led to high level of consumerism in India
700 600 500 USD 400 300 200 100 0 2002-03 393
651
Increasing per capita income coupled with an emerging middle class has provided the necessary impetus to consumerism in India
2003-04
2004-05
2005-06
2006-07
14
345
Countries worldwide are anticipating a shortage of working population in the future. India is expected to emerge as a clear winner, and by 2050, it will have the largest working age population.
15
2010
GDP USD 900 billion GDP growth rate 9%
2008
GDP USD 750 billion GDP growth rate 9.5%
Services contribution 60-65 % FDI limit is expected to be 100 percent in major industry sectors such as Telecom, Semiconductors, Automobiles, etc. Balance of Trade Should be positive with increased level of exports as compared with imports Investment goal USD 370 billion
2006
GDP USD 590 billion GDP growth rate 9 % Services contribution 54 % FDI limit not 100 percent in major industry sectors such as Telecom, Semiconductors, Automobiles, etc. Balance of Trade USD (-)46.2 billion Investment goal USD 250 billion
Services contribution 60 % FDI limit is expected to be close to 100 percent in major industry sectors such as Telecom, Semiconductors, Automobiles, etc. Balance of Trade Should increase with surging exports as compared with imports Investment goal USD 305 billion
16
By 2032, India will be among the three largest economies in the world.
US Department of Commerce
We came to India for the costs, stayed for the quality and are now investing for innovation.
The Indian market has two core advantages - an increasing presence of multinationals and an upswing in the IT exports.
Travyn Rhall, ACNielsen
- Dan Scheinman, Cisco System Inc. as told to Business Week, August 2005 Jack Welch General Electric
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