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1
A
GLOBAL / COUNTRY STUDY AND REPORT
ON
INDONESIA COUNTRY
SUBMITTED TO
LATE.SMT.SHARDABEN GHANSHYAMBHAI PATEL INSTITUTE OF
MANAGEMENT STUDIES.DHARMAJ.
GUJARAT TECHNOLOGICAL UNIVERSITY
IN PARTIAL FULFILLMENT OF THE
REQUIREMENT OF THE AWARD FOR THE DEGREE OF
MASTER OF BUSINESS ASMINISTRATION
UNDER THE GUIDANCE OF Mr. Pratik Bhavasar
Mrs. Shweta Patel Mr. Sarfras Pathan
Ms.Zarna Patel Ms. Darshita Mirani Ms. Priyanka Patel
SUBMITTED BY
Gropup-2 (107330592061- 107330592095)
BATCH: 2010-2012
TABLE OF CONTENT
2
Sr. no.
Particulars
Page no.
PART-1 (SEM:III)
1 Demographic Details
2 SWOT Analysis
3 PESTAL Analysis
4 Commerce
5 Summary of Exim Policy
6 INDONESIA-INDIA Trade Relation
7 Duty Structure of INDONESIA Country
PART-2(SEM:IV)
1 Gems & Jewellery Sector
2 Information Technology Sector
3 Infrastructure Sector
4 Textile Sector
5 Agriculture Sector
6 Tourism Sector
3
CHAPTER 1: DEMOGRAPHIC DETAILS
FACTORS INDIA INDONESIA
Nationality Indian(s) Indonesian(s)
Population 121.01 Corers (2011 est.) 245.61 Corers (July 2011 est.)
Currency Rupee(Re) Rupiah(Rp)
Age structure
0-14 years: 29.7% (2011 est.)
15-64 years: 64.9% (2011 est.)
65 year & over: 5.5
%(2011est.)
0-14 years: 27.3% (2011 est.)
15-64 years: 66.5% (2011
est.)
65 year & over: 6.1 %(
2011est.)
Religions Hindu: 83%
Muslim: 11.4%
Christian: 3%
Sikh: 2%
Buddhist: less than 1%
Jain: 0.5%
Muslim: 87%
Christian: 10%
Hindu: 2%
Buddhists, Taoists &
Confucianists: 1%
Major Industries
Sugar Industry, textiles,
Cement, paper, iron & steel,
leather, aluminium, photo &
film, glass, chemical,
locomotive, automobile,
fertilizer, plastic, petro-
chemical.
Agriculture, Beverages,
Cement, Chemicals, Coke,
Fertilizers, Food Processing,
Iron and Steel, Machinery,
Crude Oil Refining, Edible oil,
Software Development,
Textiles, Transport Equipment.
Natural resources:
Iron ore, bauxite, and copper
ore. The Gold, silver, and
diamonds make up a very very
small part of other natural
resources available in India.
Petroleum, tin, natural gas,
nickel, timber, bauxite, copper,
fertile soils, coal, gold, silver
Per Capita Income:
Per capita Income: 54527Rs. (2010 est., PPP): $4,394
GDP Annual growth rate (FY 2010 Annual growth rate (2010):
4
est.): 8.6% $707 billion; (2011 est.): $823
billion
Education: Aged 25 or over and having
attained: no formal
schooling65.8%, incomplete
primary 7.1%, primary 10.9%,
incomplete secondary 6.2%,
secondary 7.1%, higher 2.9%
(1981). Literacy; literate
population aged 15 or over
261,200,000 or 48.2% (1990)
Aged 25 or over and having
attained: no formal schooling
30.3%, incomplete primary
32.3%, primary 22.8%,
incomplete secondary 6.4%,
secondary 7.1%, higher 1.2%
(1985). Literacy; literate
population aged 15 or over
80,233,132 or 77.6% (1987).
Literacy Total population: 61%
Male: 73.4%
Female: 47.8%
Total population: 90.4%
Male: 94%
Female: 86.8%
Inflation Rate:
2010- 5.1%
2009- 4.8%
2008- 9.9%
2010- 11.7%
2009- 10.9%
2008- 8.3%
Birth Rate: 20.97 births/1,000 population
(2011 est.)
18.1 births/1,000 population
(2011 est.)
Death Rate:
7.48 deaths/1,000 population
(2011 est.)
6.26 deaths/1,000 population
(2011 est.)
Infant Mortality Rate
Total: 47.57 deaths/1,000 live
births
Male: 46.18 deaths/1,000 live
births
Female: 49.14 deaths/1,000
live births (2011 est.)
Total: 27.95 deaths/1,000 live
births
Male: 32.63 deaths/1,000 live
births
Female: 23.03 deaths/1,000
live births (2011 est.)
Languages
Hindi, Bengali, Telugu,
Marathi, Tamil, Urdu, Gujarati,
Kannada, Malayalam, Oriya,
Punjabi, Assamese, Maithili,
others.
Bahasa Indonesia (official,
modified form of Malay),
English, Dutch, local dialects
(of which the most widely
spoken is Javanese)
5
6
2.SWOT ANANLYSIS
PARTICULAR INDIA INDONESIA
STRENGTH Specialist marketing
expertise
New, innovative
product or service
Location of your
business
Cost advantage
through proprietary
know-how
Quality processes
and procedures
Strong brand or
reputation
Provide high quality
Life spring has good
reputation and brand
awareness
Fiscal Constraint
Surging Working Age
Population
Three Economic
Strengths:
supply of energy,
commodity and
mining resources
WEAKNESS Lack of marketing
expertise
Undifferentiated
products and
service
Location of your
company
Competitors have
superior access to
distribution
channels
Poor quality of
goods or services
Damaged reputation
Unlike US health
supplement, Indonesian
products tend to package
in bottles and do not have
boxes.
Over Population
Drug War
Lack of management or
other employee talent
OPPORTUNITIES
Developing market
(China, the Internet)
Mergers, joint
Indonesian products are
generally regarded as high
quality products in
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ventures or strategic
alliances
Moving into new
attractive market
segments
A new international
market
Loosening of
regulations
Removal of
international trade
barriers
A market that is led
by a weak
competitor
Indonesian consumers.
To Indonesian consumers,
marine-related products
contaminated with
pollution
Instant Translation of Web
Pages
Indonesia Battles Graft
Budding Democracy
Urbanization
New markets for products
Financial or legal trouble
for competitors
New technologies the
company could adopt
Changes in regulatory /
tax burdens
THREATS A new competitor in
your own home
market
Price war
Competitor has a
new, innovative
substitute product or
service
New regulations
Increased trade
barriers
A potential new
taxation on your
product or service
High Currency exchange
makes Indonesian
products to be expensive
and consumers tend to
switch to US products.
Local customs increase
the import fees and this
may hurt the cost of our
business.
Potential for religious
Extremist
Privacy on water
8
3.PESTLE ANALYSIS OF INDONESIA & INDIA
Country
Pestle
Analysis
INDIA INDONESIA
Political The political Situation in the country is
more or less stable. Overall India
currently has a coalition led government
and both major political parties the UPA
and BJP, whichever comes in power.
Indonesia is considered as Republic
country. The Indonesia Constitution
provides by Federal Constitution in
1949 for a strong executive.
Economical The economic factors in India are
improving continuously.
This will lead to higher buying power in
the Hands of the Indian consumers.
The international economic downturn
slowed Indonesia's GDP growth to
6.9% in 2010; The major export
affecting commodities are oil and gas,
electrical appliances, plywood, textiles
and rubber. Indonesia made business
start-up less costly.
Socio-cultural India is the second most populous
nation in the world with an approximate
population of over 1.1billion people.
Continuous increase in the
consumption of beer in India with an
increase in the purchasing power the
Indian consumer
A Socio-economic education in
Indonesia has good literacy rate is
90.4% then it has bright future.
Indonesia is a multi-culture and
religion country.
Technological The technological knowhow and
expertise will also enter the Indian
market with an increase in competition.
European technology entering the
Indian beer market increased
production and lowering cost of
production could play a major role in
the Indian beer market.
Indonesian Broad casting technology
talk about media sources it has
678AM and 43 FM channels. A
number of policies have been
implemented to attract foreign
investment to start up the business.
Legal The introduction of discrimination and The Indonesian legal rules and
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disability discrimination legislation,
an increase in the Minimum wage &
greater requirements for firms to
recycle. Legal changes can affect a
firm‘s costs & demand.
regulations are based on Roman-
Dutch law. Being considered Federal
Constitution in 1949 and Provisional
Constitution abrogated in 1950 which
restored on 5 July 1959.
Environmental
Environmental factors include the
weather & climate changes.
Changes in temperature can impact on
many industries including farming,
tourism & insurance. The growing
desire to protect the environment is
having an impact on many industries.
Environmental factor include its
geographic location, Indonesia has
faced many natural disasters such as;
9.0 earthquake, tsunami in the Indian
Ocean .Preparing the necessary plans
for Environmental protection and
Environmental development projects,
10
3: COMMERCE
INDONESIA Exports Imports
Oil And Gas
Electrical Appliances
Plywood
Textiles
Rubber
Machinery&
Equipment
Chemicals
Fuels
Foodstuffs
INDIA Exports Imports
Pearls
Cotton
Sandalwood
Perfumed Oils
Semi-Precious Stones
(Imported Tortoise
Shell)
(Imported Silk From
China)
Gold Roman Coins
Glassware
Wine
Medicines
Tin/Copper
Silverware
Clothing
11
5: EXIM POLICIES
INDIA
A developing country such as India needs to import technology and capital
goods. To offset these imports, the government of India provides export
promotion schemes. The Indian government also uses import quotas; import
licensing and import duties to help balance the import-export trade in India.
Some key highlights of this EXIM policy 2009 to 2014 revisions are:
Market Access and Export Market Diversification:
Incentive schemes have been expand to cover new markets and new
product categories. New markets, sixteen from Latin America and ten
from Asia-Oceania have been added as part of the Focus Market
Scheme. The incentives available have increased from 2.5% to 3% for
these new markets.
New Product Incentive Scheme:
This covers a wide variety of products ranging from engineering,
plastics, textiles, Green technology, Jute & Fiscal, technical textiles,
project goods, vegetable textiles and some electronics. The incentives
increased from 1.25% to 2%.
Technology Upgrades:
For companies in certain sectors such as engineering and electronic
products who want to upgrade their technology, zero duty will be
assessed.
Gems &Jewellery Sector:
Gold Jewellery exports will be permitted to receive Duty Drawbacks.
This is where the duty collected on the export will refunded.
Value added Manufacturing:
To increase Value added Manufacturing exports, a 15% minimum
value addition on imported inputs has now been prescribed.
12
Procedure Simplification:
Increase from 15 to 50, the number of sample pieces allowed to be
imported by exporters at duty free rates.
Given the recent downward turn in the global economy, India's exports have
also been shrinking. It is hope that some of the latest EXIM policy promotion
schemes will help to accelerated India's import-export industry again.
Objectives:
To accelerate the economy from low level of economic activities to high
level of economic activities by making it a globally oriented vibrant economy
and to derive maximum benefits from expanding global market opportunities.
To stimulate sustained economic growth by providing access to
essential raw materials, intermediates, components,' consumables and
capital goods required for augmenting production.
To enhance the techno local strength and efficiency of Indian
agriculture, industry and services, thereby, improving their competitiveness.
To generate new employment.
Opportunities and encourage the attainment of internationally accepted
standards of quality.
To provide quality consumer products at reasonable prices.
13
INDONSIA
Foreign Trade Policy 2009-14
Higher Support for Market and Product Diversification
Additional benefit of 2% bonus, over and above the existing benefits of
5% / 2% under Focus Product Scheme, allowed for about 135 existing
products, which have suffered due to recession in exports. Major
sectors include all Handicrafts items, Silk Carpets, Toys and Sports
Goods (all of which were earlier eligible for 5% benefits); Leather
Products and Leather Footwear, Handloom Products and Engineering
Items including Bicycle parts and Grinding Media Balls (all of which
were earlier eligible for 2% benefit).
256 new products added under FPS (at 8 digit level), which shall be
entitled for benefits @ 2% of FOB value of exports to all markets. Major
Sectors / Product Groups are Engineering, Electronics, Rubber &
Rubber Products, Other Oil Meals, Finished Leather, Packaged
Coconut Water and Coconut Shell worked items.
Instant Tea and CSNL Cardinal included for benefits under VKGUY @
5% of FOB value of exports.
Support for Technological up-gradation
Zero duty EPCG (Export promotion capital goods) scheme, introduced
in August 2009 and valid for only two years up to 31.3.2011, has been
extended by one more year till 31.3.2012.
Additional Towns of Export Excellence (TEEs) announced viz. Barmer
(Rajasthan) for Handicrafts; Bhiwandi (Maharashtra) for Textiles; and
Agra (Uttar Pradesh) for Leather Products.
Stability / Continuity of the Foreign Trade Policy:
14
The popular and exporter friendly Duty Entitlement Passbook (DEPB)
scheme has been extended beyond 31.12.2010 till 30.06.2011.
Availability of concessional Export Credit. Interest subvention of 2% for
pre-shipment credit for export sectors namely, Handloom, Handicraft,
Carpet and SMEs for all export sectors, have been allowed till
31.3.2011 in the budget 2010-11.
Leather Sector:
Leather sector shall be allowed re-export of unsold imported raw hides
and skins and semi-finished leather from Public bonded warehouses,
without payment of any export duty.
Finished Leather export shall be entitled for Duty Credit Scrip @ 2%
under FPS. Additional 2% bonus benefits over and above the existing
benefits under Focus Product Scheme would significantly benefit the
Leather Sector.
Handloom sector:
Duty free import of specified trimmings, embellishments etc. shall be
available on Handloom made-ups exports @ 5% of FOB value of
exports.
Additional 2% bonus benefits over and above the existing benefits
under Focus Product Scheme would significantly benefit the Handloom
Sector.
Textiles sector:
Duty free import of specified trimmings, embellishment etc. shall be
available @ 3% on exports of in line with the facility available to sectors
like Textiles & Leather. It will promote export of products such as micro
cloth, which has become popular in home textiles.
15
Gems &Jewellery sector:
The list of items allowed for duty free import by Gems &Jewellery
sector has been expanded by Inclusion of additional items such as
Tags and labels, Security censor on card, Staple wire, and Poly bag.
This will reduce the cost of the product to some extent.
Handicraft Sector:
The facility of duty free import of tools under Duty Free Import scrip‘s
for Handicraft sector shall be made operational.
Additional 2% bonus benefits over and above the existing benefits
under Focus Product Scheme will significantly benefit the Handicrafts
and Silk Carpets sectors.
Agriculture and Plantation:
Oil Meals (Cotton, rape seed, and groundnut), Castor Oil derivatives,
Packed Coconut Water and Coconut Shell worked items shall be
entitled for benefits @ 2% of FOB value of exports to all markets under
FPS.
Engineering and Electronics:
Additional items of Engineering, namely, Pipes &Tubes, Electric
Generating Sets, Cast Articles of Iron & Steel, Ferro Manganese and
Ferro Silicon shall now be entitled for benefit @ 2% under FPS.
A number of engineering items namely, Machine Tools, Compressors,
Iron & Steel Structures including Transmission Towers and
Scaffolding, LPG Cylinders, Ductile Tubes & Pipes shall now be
entitled for benefits @ 2% of FOB value exports to all markets under
FPS instead of their exports to specific markets under MLFPS earlier.
6. INDONESIA-INDIA RELATIONS
16
Indonesia–India relations are bilateral relations between Indonesia
and India. India and Indonesia are close geographical neighbours who
share a maritime boundary.
Modern Indonesia–India relations go back to the contacts between
President Sukarno and Prime Minister Jawaharlal laid the foundation
of the Afro-Asian and Non-Aligned Movement at the Bandung
Conference in 1955.
In1991, Indonesia-India has been a rapid development of bilateral
relations in Political, security, defence, commercial and cultural fields.
Indonesian Abdurrahman Wahid and Megawati Soekarnoputri visited
India as Presidents in 2000 and 2002 respectively. After his 2005
landmark visit that laid the foundation of the strategic partnership
between the two countries. President
SusiloBambangYudhoyono paid a second visit to India in January 2011
when he was the Chief Guest at the Republic Day celebrations of India.
Indian Prime Minister Dr.Manmohan Singh visited Indonesia in April
2005 to take part in the Golden Jubilee Celebrations of the Bandung
Conference. President PratibhaDevi SinghPatilpaid a State Visit to
Indonesia in December 2008.
Major Indonesian exports to India include oil & gas, electrical appliances,
plywood, textiles and rubber... Major imports into Indonesian from India are
cotton yarn, glassware, wine, medicines, and silverware and gold roman
coins. The Indonesian Ministry of gas is also currently negotiating the
establishment of a natural gas-operated fertilizer plant with another Indian
company.
17
Bilateral Ministerial Visits in 2011
Indonesian Minister of Trade Dr. (Mrs) Mari Elka Pangestu visited India
on 2March 2011 to attend the India-ASEAN Business Summit, on the
margins of which he had a meeting with Commerce & Industry Minister
Shri Anand Sharma.
Minister of State for Petroleum & Natural Gas visited Indonesia on 3-6
April 2011 for bilateral discussions with the Indonesian Minister for
Energy and Mineral Resources Dr Darwin Zahedy Saleh on the
kerosene to LPG conversion programme. A bilateral Joint Working
Group on Oil & Gas has been set up, which is expected to hold its first
meeting in Jakarta this year.
External Affairs Minister Shri S.M.Krishna visited Bali, Indonesia on 21-
23 July2011 to attend the ASEAN-India Post Ministerial Conference,
the East Asia
Ministers Meeting and the 18th Meeting of ARF Foreign Ministers
Economic relations:
India is the fourth largest trade partner of INDONESIA after the US, Italy and
Saudi Arabia.
Investment:
There are over a dozen major Indian manufacturing joint ventures in
Indonesia with direct Indian participation or financed by overseas Indians. The
bulk of these investments were made in the 1970s and 80.In fact up to 1985
India was among the top five investors in Indonesia. Major investments are in
the fields of synthetic fibres, textiles, garments, steel and hand tools.
18
Major Indian companies with assets in Indonesia include the Aditya Birla
Group (Indo-Bharat Rayon), the S.P. Lohia Group (Indo-Rama Synthetics),
the Ispat Group (Ispat-Indo), Jaykay Files Indonesia, Gokak Indonesia, and
ESSAR Dhananjaya.
Services:
These include oil and gas, manpower and engineering consultancy services
for the petroleum industry, mining, plantation products (particularly CPO), IT
education and services, ports and railways, telecommunications,
pharmaceuticals and education (both School and University).
Banking:
Indonesia has both State-owned banks and private banks. All major
international banks have a presence in Indonesia. The Bank of India
maintains a representative office in Indonesia while Bank Indonesia
International (BII) has a branch in Mumbai.
NON-TARIFF BARRIERS:
Non-tariff barriers on the following Indian products have been imposed by
Indonesia:
• Bovine Meat & Skimmed Milk Products – Banned because of FMD;
• Wheat Flour – 11.4% till the end of 2010;
• Uncoated Writing Paper and Printing Paper – 6.19% to 40.13% till
November
2009;
• Hot Rolled Coil – 0 – 56.51% till February 201
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7. DUTY STRUCTURE
Accordingly to India basic customs duty on all goods currently
attracting 2% has been increased to 2.5% and basic customs duty on
those goods attracting 3% has been decreased to 2.5%. (S. No. 1 & 2
of Notification No. 21/2011-Cus dated the 1st March 2011)
The Export of goods and services in 2010 in Indonesian was
$44.6billion. U.S. goods exports in 2009 were $5.26billion, up 19.7
present from the previous year. Corresponding U.S. imports from
INDONESIA were $2.4 billion, up 14.5 present. INDONESIA is
currently the 37thlargest export market for U.S. goods. The stock of
U.S. foreign direct investment (FDI) in INDONESIA in 2005 was $4.8
billion, up from $4.1 billion in 2004. U.S. FDI in INDONESIA is
concentrated largely in the mining sector.
Over the past decade, the Government of Indonesia has gradually
liberalized its trade regime and economic policies in general. The
reform process had been somewhat halting until the appointment of
Prime Minister and a new ministerial economic team in 2002. To
maintain its reform momentum, the GOI should continue its efforts to
reduce red tape, reduce corruption, reform the cumbersome
bureaucracy, and eliminate unreasonable and non-science based
health and safety standards.
Sales taxes are levied at rates ranging from 10 present to 30 present. Excise
duty is collected on the imports of gold roman coins, glassware, wine,
medicines, benzene, coffee, cotton yarn, tin/copper, and several other
products.
20
Imported items are assessed a surcharge to cover inspection, listing,
classification, and re-examination of goods. The applicable rates are 3 present
for goods dutiable at 30 present or less than 6 present for goods dutiable at
more than 30 present.
The Indonesia tax system includes direct taxes, such as corporate
profits tax and income tax on personal income, as well as indirect
taxes, such as sales tax and customs duties.
Corporate Profits Tax – in general this tax is levied on the profits
of corporations at a rate of 22% per annum.
Income Tax – direct income tax at a maximum of 22% is
applicable to, in particular, the remuneration of directors of joint
stock companies and the managers of limited liability
companies, interest and foreign dividends. Taxable income from
moveable capital must be withheld by the payer.
Sales Tax - sales tax at rates of between 10% and 30%
(although most commonly 12%) is applicable on certain goods
and services.
Customs Duties – goods imported into Indonesia are subject to
customs duties. The rates are usually between 1% and 45%.
Salary Tax – salary tax is levied at a rate of 20% subject to
personal allowances. Salary tax must be withheld at source by
the employer.
Stamp Duty – stamp duties are levied on most types of
documents used or executed in Indonesia.
21
Gems & Jewellery Sector
Sr. No. Particulars Page no.
1. Introduction of the selected Company / Industry / Sector and its role in the economy of specified country.
Structure, Functions and Business Activities of selected Industry / Sector / Company
2. Comparative Position of selected Industry / Sector / Specific Company / Product with India and Gujarat
Present Position and Trend of Business (import / export) with India / Gujarat during last 3 to 5 years
3. Policies and Norms of selected country for selected Industry/company for import / export including licensing / permission, taxation etc
Policies and Norms of India for Import or export to the selected country including licensing / permission, taxation etc
Present Trade barriers for import / Export of selected goods (if any)
4. Potential for import / export in India / Gujarat Market
Business Opportunities in future
Conclusions and Suggestions
22
1.1 Introduction of global gems and jewellery sector
The word jewellery itself is derived from the word jewel, which
was anglicized from the Old French "jouel", and beyond that, to the Latin word
"jocale", meaning plaything.
Form and function
Jewellery has been used for a number of reasons:
Currency, wealth display and storage,
Functional use (such as clasps, pins and buckles)
Symbolism (to show membership or status)
Protection (in the form of amulets and magical wards),
Artistic display
Most cultures have at some point had a practice of keeping large
amounts of wealth stored in the form of jewellery. Numerous cultures move
wedding dowries in the form of jewellery or create jewellery as a means to
store or display coins. Alternatively, jewellery has been used as a currency or
trade good; an example being the use of slave beads
Many items of jewellery, such as brooches and buckles, originated as
purely functional items, but evolved into decorative items as their functional
requirement diminished. Jewellery can also be symbolic of group
membership, as in the case of the Christian crucifix or Jewish Star of David,
or of status, as in the case of chains of office, or the Western practice of
married people wearing a wedding ring.
Wearing of amulets and devotional medals to provide protection or
ward off evil is common in some cultures; these may take the form of symbols
(such as the ankh), stones, plants, animals, body parts (such as the Khamsa),
or glyphs (such as stylized versions of the Throne Verse in Islamic art)
Although artistic display has clearly been a function of jewellery from the very
beginning, the other roles described above tended to take primacy. it was only
in the late 19th century, with the work of such masters as Peter Carl
Faberge and René Lalique, that art began to take primacy over function and
23
wealth. His trend has continued into modern times, expanded upon by artists
such as Robert, Ed Levin, and Alberto Repossi.
Global Gems and Jewellery Market
According to CARE Research, the US is the world‘s largest market for
jewellery accounting for an estimated 29% of the world jewellery sales in
2010.The US is followed by China (11%) , India (10%), the Middle East (9%)
and Japan (8%) as the biggest consumers. In Europe, the UK(4%) and Italy
(5%) are the largest consumers, and Italy is also one of the world‘s largest
jewellery fabrication centres. These seven key markets account for about 80%
of the total worldwide sales.
According to the CARE Report, global retail sales value of jewellery,
including diamonds and gemstones, is expected to reach US$185 billion in
2010 and US$230 billion by the year 2015 growing at CAGR of 4.6% between
2010 and 2015. In 2005, sales totalled US$146 billion and grew at a CAGR of
4.8% between 2005 and 2010 period.
During 2009, the world GDP decreased by 0.8% to US$57,228.37
billion while for 2010 and 2011, world GDP is estimated to grow by 3.9% and
4.3%, respectively, according to International Monetary Fund (IMF).
Historically, it has been observed that the correlation between the
global jewellery sales and world GDP was very high at 0.99.
Of total global sales of US$146 billion in 2005, diamond-studded
jewellery was the largest segment, representing 47% of total jewellery
consumption. By type of jewellery, diamond-studded jewellery accounted for
the largest share of the global jewellery market, followed by plain gold
jewellery (42%).
According to a recent KPMG study the largest jewellery market is the
United States with a market share of 30.8%, Japan, India, China, and the
Middle East each with 8–9%, and Italy with 5%.
The authors of the study predict a dramatic change in market shares by 2015,
where the market share of the United States will have dropped to around
25%, and China and India will increase theirs to over 13%. The Middle East
will remain more or less constant at 9%, whereas Europe's and Japan's
24
market share will be halved and become less than 4% for Japan, and less
than 3% for the biggest individual European countries, Italy and the UK.
INTERNATIONAL TRADE OF GEMS AND JEWELLERY
Exports and Imports
Gold
The largest exporter of gold in the world in the year 2010 was USA with a
share of 19.9% in total world exports, followed by Australia (15.9%), Canada
(9.3%), Hong Kong (7.3%) and Peru (7.1%). The world‘s largest importers of
gold include Switzerland (25.7%), UK (19.6%), USA (8.4%), India (7.5%), and
South Africa (4.4%).
Diamond
Israel (with a share of 19.7%), Belgium (19.6%), India (14.3%), USA (12.8%),
and UK (9.1%) were the largest exporters of diamond in the world, in the year
2007. The largest importers of diamonds include: USA (17.7%), Belgium
(16.2%), India (13.1%), Israel (13%), and Hong Kong (12.9%).India was an
exporter as well as an importer of diamonds, with a respective share of 14.3%
and13.1% in the world. This may be because; India imports rough diamonds,
for value addition, and exports as cut and polished diamonds.
Precious Stones
Hong Kong, USA, Switzerland, Thailand and India were among the leading
exporters, as well as
Importers of precious stones (other than diamond) in the world in the year
2010. Hong Kong was the largest exporter of precious stones (other than
diamonds) with a share of around 17.1% of the total world exports, and was
followed by USA (13.2%), Switzerland (12.7%), Thailand (12.2%), and India
(9%).In the case of imports, the leading importers include: USA (26.5%),
Hong Kong (14.4%), Switzerland (9.2%), Thailand (7.2%) and India (6.3%).
Pearls
In the case of Pearls, Hong Kong was the largest exporter, with the exports
valued US $ 482.92 million constituting a share of 30.2%, in the world exports
25
of pearls in the year 2007. Japan, China, Australia, and French Polynesia
were the other major exporters of pearls. Hong Kong was the largest importer
with a share of around33.2%, followed by Japan (18.3%),
USA (15.8%), Germany (4.4%), and Australia (4%)
Platinum
South Africa, constituting a share of 32.5% was the largest exporter of
platinum in the world in the year2007. UK, USA and Germany were the other
major exporters. USA was also a major importer of platinum constituting a
share of 24.4% in the world, followed by Japan (19.2%),
Germany (12.7%) and UK (8.6%)
Silver
Major exporters of silver in the year2007 include: China, with a share of
15.9% in the world, followed by Mexico (11.2%), Hong Kong (8.7%) and
Germany (8.1%). USA, Hong Kong, UK, Germany and India were the major
importers of silver in the world.
1.2 Indian Gems and Jewellery Sector -
introduction
According to CRISIL Research, the Indian jewellery retailing market is
estimated at Rs. 973 billion as of 2009-10, contributing around 6% of the
overall retailing industry in India. This makes jewellery the largest contributor
of India‘s overall retail industry. Within the jewellery retailing market in India,
the share of gold jewellery is estimated to be around 80%, according to
CRISIL Research. The two major sub segments within jewellery are gold (22
carat and above) and diamonds, with the former constituting of 80% of the
value of jewellery consumption and the balance 20% comprising of
diamonds(15%) and gemstone jewellery. The overall size of domestic Gems
and Jewellery sector is pegged at Rs. 870 billion as of 2008-09 according to a
FICCI-Technopak study and is expected to grow up to Rs. 1,832 billion by
2014-15.
26
In India, organised retailers account for a mere 4% of the total jewellery
retail market. There are about 15,000 vendors across the country in the gold
processing industry, with over 450,000 gold smiths spread across the country.
There are also more than 6,000 vendors in the diamond-processing industry.
Gold is consumed most in south (37%), west (32%) , north(18%) and
east(13%) in that order. In 2009, total Indian gold consumption reached
US$19bn or Rs. 974 bn equivalent at the end of 2009. Over the past decade,
this has increased at an average rate of 13% per year, outpacing the
country‘s real GDP, inflation and population growth by 6%, 8% and 12%
respectively.
Gold jewellery demand in India, the world‘s largest gold
jewellery market, rose 67% year-on-year to 272 tonnes in the first half of
2010. Over the same period, the average domestic gold price surged to
almost Rs.52, 800/oz, before hitting a new high of 60,460/oz on October 15,
2010.
Gold jewellery accounted for around 75% of total Indian gold demand in
2009, the remainder being investment (23%) and decorative and industrial
(2%). Diamonds are consumed most in West (35%), North (32%), South
(25%) and East (8%) - in that order.
The Indian gems and jewellery sector is expected to grow at a compound
annual growth rate (CAGR) of approximately 13 per cent during 2011–2013,
on the back of increasing Government efforts and incentives together with
private sector initiatives, according to a report 'Indian Gems and Jewellery
Market Forecast to 2013', by research firm RNCOS. As per the research
report, with India's consumption pegged at nearly 24 per cent in 2008, the
country remains world's largest gold consumer and this share is expected to
grow further. Moreover, India also forms the largest cutting and polishing
Industry for diamond in the world.
The Government policies and the banking sector have provided a lot
of assistance to this sector with around 50 banks providing nearly US$ 3
billion of credit to the Indian diamond industry. India will soon overtake the US
to become the third-largest men's luxury jewellery market in the world,
according to Euro monitor International.
27
The study estimated that the country's men's jewellery market stood
at around Rs 954 carore (US$ 194.4 million), in sales and it is projected to
grow by 36.4 per cent in 2012. "Although it's a niche market, it is growing.
Nobody can ignore it now," as per GR Radhakrishnan, Managing Director,
GRT Jewelers, who pegs the share of men's jewellery in its total sales at 20-
25 per cent.
Indian sellers on eBay, a leading online marketplace, export an item
internationally every 32 seconds, according to the company's Asian exporters'
index. 44 pieces of jewellery are sold every hour by Indian sellers on eBay.
Ratings agency CRISIL has launched a Gold Index to track the performance
of gold prices in the Indian market. This is the first index launched by CRISIL
in the commodities space.
"In the last 3- 4 years, a lot of Indians are investing in gold which is in
the paper format. People should take a long-term perspective while investing
in gold. ETFs as a concept is picking up," as per Jiju Vidyadharan, Head,
Funds and Fixed Income Research, CRISIL Research.
The gems and jewellery sector is a major foreign exchange earner.
Due to its importance in India‘s foreign trade, the government has taken many
initiatives to boost the sector. The government, for instance, has declared this
sector as a thrust area for exports. During the global economic meltdown
especially the government has dealt out many initiatives for the badly-affected
sector. This chapter focuses on the various policies and measures that were
taken by the government for the gems and jewellery sector.
GEMS AND JEWELLERY SECTOR ROLE IN ECONOMY
28
Gross Bank Credit to the Sector
The sector is well-supported by government policies and the banking sector.
According to the report by the RBI on Gross Bank Credit (GBC), credit to the gems
and jewellery sector has registered a CAGR of 11.55% (2006-09) and increased
from Rs 205.59 bn as on March 31, 2006 to Rs 285.37 bn as on March 31, 2009.
The gems and jewellery sector accounted for 2.71% of the total GBC disbursed
during the period. However, it is observed that the sector‘s share as on March 31,
2009, in the total GBC deployed to the industry has declined to 2.71% from 3.73%
as on March 31, 2006.
29
Introduction of TITAN Company profile
Background:
30
Company Products Established Founder Distribution Production
Plant
Titan Watches
&
Jewellery
1984 TATA
Group
TIDCO
India,
Middle East,
Africa, Asia
Pacific,
Europe
India
Titan Industries was established in 1984 as a joint venture between the Tata
Group and Tamil Nadu Industrial Development Corporation (TIDCO). The
company set up its corporate office in Bangalore (Karnataka) and its watch
manufacturing facility in Hosur (Tamil Nadu). In two decades the company has
built an impressive watch business to become India‘s largest manufacturer and
the world's sixth largest manufacturer of watches. This has mainly been achieved
by developing a formidable distribution network. The company has amongst the
world's largest retail chain of exclusive retail showrooms for watches called ‗The
World of Titan‘ spread over 100 towns.
It also has multi-brand outlets named ‗Time Zone‘, service centers and dealer
outlets. Globally Titan has a presence in over thirty countries through its marketing
subsidiaries.
Titan has also entered the jewellery business in 1995. Jewellery is sold in India
through an exclusive company controlled retail chain, comprising of owned and
franchised outlets. It is also exported to Singapore and the Middle East.
The company has watch assembly plants at Dehradun (Uttar Pradesh) and
Baddi(Himachal Pradesh) and a plant manufacturing electronic circuit boards in
Goa.The majority stake in the company is held by the promoters, with TIDCO
having 28 per cent of the shares and Tata Group companies owning 25 percent of
the shares. Public holding in the company is around 28 per cent.
Products
Titan Industries, best known as India's pioneering manufacturer of quartz watches,
has also etched a niche for itself in some of the most competitive spaces in the
fashion industry such as jewellery and eyewear. Precision engineering is another
31
area of specialization that Titan Industries is proud on jewellery
Jewellery: Following the suit of time products, Titan Industries‘ Tanishq has been
India‘s largest, fastest growing and most popular jewellery brand.
Tanishq offers a premium range of innovatively created gold jewellery with an
aesthetic use of diamonds and precious, semi-precious stones in various hues.
Arresting designs in 22kt pure gold as well as platinum are among the most
admired products on the company‘s list. Gold Plus the recent retail plain gold
jewellery offering is specifically created for semi urban and rural Indian market.
The brand offers gold jewellery, as well as unique designs crafted with diamonds,
American diamonds and other precious stones.
Titan Industries boasts of 125 Tanishq boutiques, 2 Zoya stores and 30 Gold Plus
stores in India. The enchanting jewellery patterns that are part of these brands
originate in the well-equipped exclusive jewellery design studio of Titan Industries.
Gold Plus
Titan Industries‘ Gold Plus is designed for the jewellery preferences of the semi-
urban and rural Indian customer. With a presence in 29 towns spread across 6
states, Gold Plus is the largest jewellery retail chain in Tamil Nadu.
In addition to gold jewellery, the brand also offers impressive designs embellished
with diamonds, American diamonds (Cubic Zirconia) and other precious stones.
The Gold Plus jewellery comes with the assurance of purest 22-karat (916) and
18-karat (750) gold and premium craftsmanship. Every Gold Plus product is
endorsed by a certificate that states the purity of the gold and the quality of
diamonds used in the article.
The elaborate and intense quality checks during the manufacturing process
ensure the purity of gold and a perfect finish. The gold is purchased in the form of
bars from only those banks that are certified by Reserve Bank of India (RBI).
Using this gold, jewellers are crafted in Titan Industries‘ manufacturing units in
Hosur, Tamil Nadu where highly skilled artisans create traditional and modern
designs.
Tanishq
32
Tanishq, India's largest, most trusted and fastest growing jewellery brand,
offers traditional as well as trendy designs in gold, diamond and platinum. With
retail sales of over Rs. 3000 carore last financial year, Tanishq has delivered value
to its customers and shareholders.
Backed by in-depth research in the jewellery space, the production and sourcing
units of Tanishq create exquisite designs with faultless finish. Located at Hosur
(Tamil Nadu) and Dehradun (Uttarakhand)) the 1, 35,000 sq. ft. manufacturing unit
is equipped with the latest and most up-to-date technology and tools. The unit also
complies with the labour and environmental standards.
Stringent quality standards ensure that every product at Tanishq is crafted
to perfection with unmatched finish. With innovations like the karat meter - the only
non-destructive means to check the purity of gold - Tanishq introduced
technology-backed challenge in the category completely governed by individual
trust. The brand propagates ethical practices and provides the customer a
certification of purity of material and reselling policies. Following the line of ethical
practice further, adequate policies are in place for the artisans who create the
jewelry.
Tanishq has a Golden Harvest savings scheme which is a unique Jewellery
purchase scheme, leading to an easy purchase of Tanishq jewellery of your
choice. With this scheme you can buy for more than what you save because
Tanishq will add a special bonus at the end of the scheme.with over 118 opulent
stores in 76 Indian cities, Tanishq continues to rule the jewellery space.
Favorable Factors for Titan in Asian Market
After an extensive survey of the Asian market, Titan found that with brands jostling
for shelf space, retailers needed good reasons to stock the brand. The need of the
hour was also to create strong consumer demand.
So the company unleashed a massive advertising campaign to
create brand awareness.
It also participated in the world renowned Basle Fairs, an annual
event in which the world‘s biggest watch and jewellery
manufacturers customarily participate in and unveiled its Euro watch
range at this fair.
33
The company received a huge amount of interest from major watch
distributors and companies.
All sales and marketing efforts were only on these markets. This
move halved the advertising spend in the European market.
The company also decided to shift its warehouse to lower cost
locations in these countries to reduce the overhead costs and
rationalize its manpower employed in managing Asian operations in
its subsidiary TIME.
To consolidate the operations in overseas markets and provide a
unified thrust across countries, a new division, the International
Business Division was formed in the financial year 2004-05 for
watches, jewellery and other products of Titan.
Countries in which Titan can enter (Indonesia)
Favorable factors for Titan in Indonesia:
As the country is neighboring countries of India, Titan can make
geographic presence.
It can take ideal location advantage.
It will have to spend less on transportation cost as it can export to
the neighboring countries.
With the availability of Indian newspapers and television channels,
the spillover of domestic advertising is another influential factor.
Titan would not require spending so much on aggressive
advertisement and promotion like in European market.
As both the countries are developing countries the advantage of low
cost will be available.
Location with low cost of warehousing will be available to company.
No need to create brand awareness as it has already been created
in the global market.
Indian Gems and Jewellery Market position
According to our latest report ―Indian Gems and Jewellery Market Forecast to
2013‖, India possesses the most competitive gems and jewellery market due to its
34
low cost of production and availability of skilled labour. The market plays an
important role in the economic development of the country as it accounts for
nearly 13% share in the overall merchandise exports. Besides, in terms of gems &
jewellery, the country enjoys leading position in the global market. Moreover, with
highly skilled & low cost manpower, strong government support, and growing
demand the market is expected to surge at a CAGR of around 13% during the
forecast period (2011 – 2013).
According to our latest report ―Indian Gems and Jewellery Market Forecast to
2013‖, India possesses the most competitive gems and jewellery market due to its
low cost of production and availability of skilled labour. The market plays an
important role in the economic development of the country as it accounts for
nearly 13% share in the overall merchandise exports. Besides, in terms of gems &
jewellery, the country enjoys leading position in the global market. Moreover, with
highly skilled & low cost manpower, strong government support, and growing
demand the market is expected to surge at a CAGR of around 13% during the
forecast period (2011 – 2013)Indian gems and jewellery market is mainly
dominated by gold and diamond jewellery, wherein the share of branded jewellery
in domestic sales is continuously growing. In recent years, India has gained
prominence as a leading international destination for sourcing high quality
jewellery. At present, the country occupies nearly 20% share in the overall
jewellery exports globally.
Indian gems and jewellery market is mainly dominated by gold and diamond
jewellery, wherein the share of branded jewellery in domestic sales is continuously
growing. In recent years, India has gained prominence as a leading international
destination for sourcing high quality jewellery. At present, the country occupies
nearly 20% share in the overall jewellery exports globally. The major destinations
for gems and jewellery export from India are the UAE, the US, Hong Kong. The
share of Indian export in global trade is expected to increase further in near future
on the back of various factors discussed in the report.
India's Position in Gems and Jewellery Sector
Gems and Jewellery is one of India‘s leading foreign exchange earning
35
sectors.
It accounted for 16.7 per cent of India‘s total Merchandise Exports.
USA‘s import of Gem & Jewellery from India increased by 50.5% in 2010 as
compared to 2009.
India Gems & Jewellery exports are expected to grow at a whopping 15 to
20 per cent in FY 2011-2012.
At present India exports 95% of the world‘s diamonds.
2.1 Comparative Position of Indonesian Gems &
Jewellery sector
Definition
Mining of Precious Stones or Gemstones in Indonesia consists of establishments
engaged in the mining and extraction of precious stones / gemstones such as
diamonds, sapphires, jade, amethyst, opal and turquoise.
Activities
The primary activities of firms in this industry are:
- Preparation of mining region.
- Extracting of precious stone and gemstone.
- Cleaning of precious stone and gemstone.
- Cutting of precious stone and gemstone.
- Polishing of precious stone and gemstone.
- Refining of precious stone and gemstone.
The Existence of Pearl in Indonesia:
Indonesia nowadays is producing more South Sea Pearl, especially from
Pinctada maxima, either from the nature or from cultivation. The center of
Pinctada maxima cultivation are spread all over the spot like in Lampung,
East Java, West Nusa Tenggara, East Nusa Tenggara, South Sulawesi,
North Sulawesi, South East Sulawesi, Maluku, North Maluku and Papua.
Indonesian South Sea is very popular in world market, and it usually sold in
36
Loose and Jewelry. For Loose pearl, it is usually sold by Auction way, either
in local or foreign.
Pinctada margaritifera, Pinctada fucata, Pinctada lentiginosa and Pteria
penguin are other famous type of cockleshell, which cultivated in Indonesia.
The pearl cultivation is can be done only in clean and calm water. By the
pearl cultivation, it will gain lot of profit and also will keep the quality of
seawaters clean and safe.
Some Indonesian pearls entrepreneurs are now make an association called
as ASBUMI or the Association of Indonesia Pearls Cultivation. As a
provider for the Indonesian pearls entrepreneurs, the existence of ASBUMI
is important and they play the role as a facilitator in order to cultivate and to
sale the Indonesian Pearls.
History of Silver Work in Bali, Indonesia:
The art of metal work arrived in Indonesia in the Bronze Age from Southern
Chinese and Southeast Asian areas. Bronze drums, dated from as early as
the fifth century BC, have been found throughout the archipelago, and
some of them are believed to have been cast in Bali. Indeed, the most
famous of these drums, the massive Moon of Pejeng, still rests in Bali on a
temple pavilion in the village of Pejeng. The drums were cast in the lost wax
style and in stone molds. Beads of glass, carnelian, shell, silver, gold and
other metals have been found in Bronze age sites as well. The earliest
metal jewelry was primarily copper with some gold, silver and "suwasa",
which is one part gold and two parts copper. Metal age graves reveal gold
necklaces, hairpins, beads and rings. Initially, raw gold made its way to
Indonesia from China and India but eventually gold was found in Sumatra,
which became famous for its jewelry and dagger hilts.
By the time of the birth of Christ, the people of Sumatra and Java were
practicing rice cultivation with irrigation and the use of the buffalo-drawn
plow. The accumulation of wealth which ensued encouraged the refinement
of many art forms, including jewelry. By AD 1,000 gold and silverwork in
Java had reached a level of artistry as high as that of the bronze caster.
The abundance of gold was documented by a Chinese trader who reported
37
in 1225 that Javanese criminals, except for thieves and murderers, were
not imprisoned or subjected to corporal punishment but fined in gold.
Major market segments are identified and also those forces affecting
demand and supply within this industry. Performance analysis includes
emerging industry trends as well as recent results and performance of each
key company. Drawing on the depth of information DIS also provides 5 year
forecasts for this industry.
The comprehensive study examines details such as the barriers to entry,
operating cost structure, technology & systems and domestic &
international markets. Tables and statistics include: Industry revenue,
exports, imports, wages and number of companies in the industry, Industry
growth and geographic regional data.
KEY STATISTICS 2004 2005 2006 2007 2008
Industry Revenue 107,942 104,367 131,689 158,085 169,151 Rp.Billion
Industry Gross Product 7,016 6,784 8,560 10,276 10,995 Rp.Billion
Number of
Establishments 110 120 130 130 130 Units
Employment 109,600 101,200 85,700 81,000 85,400 Units
Exports 2,856 3,457 6,481 6,521 7,820 Rp.Billion
Imports 10,926 10,899 25,482 30,419 35,880 Rp.Billion
Total Wages 1,425 1,316 1,114 1,010 1,109 Rp.Billion
Domestic Demand 116,012 111,809 150,690 181,983 197,211 Rp.Billion
2.2 Present Position and Trend of Business of BASK
BALI
At present Bask Bali doesn‘t have significantly any Business with India or Titan
industries but yet it has scope to have future business and trade relationships.
38
The followings are the details of the company.
Indonesian company
Basic Information
Pt. Bask bali is based in bali, Indonesia exporting for over 14 years all kind of
jewelry mainly to the usa. Besides producing our collections in sterling and 18k
gold, we are specialized in private label or contract manufacturing. We do wax
or metal master on request as per your drawing or design, specialized in hand
made techniques, like cutwork, granulation, chasing and chain weaving.
The company also has a large collection of over 5000 proprietary designs
in both silver and gold developed by the founder and designer, Steven Battelle,
which are available for delivery to most countries except the USA.
Steven divides his time between the sales office of Bask Jewelry and Steven
Battelle Collection in California and the design studio here in Bali The overall
management of the Bali facility and orders is handled by Andreas Kuhn, who has
resided in Bali for 12 years, and is probably among the most qualified and
experienced professionals in the world in the critical area of translating Western
needs and design criteria to our talented Balinese and Javanese smiths who
produce the work.
If you need fine handmade, you‘ve come to the right place.
Company Name: PT. Bask Bali
Business Type: Manufacturer
Product/Service
(We Sell): all kind of Jewelry (Sterling, 14K, 18K and 22K)
Address: Jl. Cendrawasih 69, Petitenget
Number of 101 - 200 People
39
Employees:
Factory Information:
Policies -Probably the most critical element in any jewelry production is the
production of the control sample. With a proper control sample, when the
production is given out to the worker he (or she) can be directed to "make it like
this". Approving a sample before production will result in a much lower percentage
of problems than any other method of manufacture, as both the worker and the
QC department have clear guidelines.
We work on the basis of a job order charge which covers the management
of the individual style produced as well as a standard markup on labor and
materials. The metals component may vary from production to production based
on fluctuation in final weights and changes in precious metals pricing.
At the time of an order, we generally require a 50% deposit, which will lock in
the silver (or gold) pricing to the date of the order.For production we currently
charge a $5 job order fee per style per stone, which is waived if the order is $1000
or more of a single item. Minimum quantities are normally around 20 per style. If
the production is delivered in Bali instead of being directly exported, its necessary
to charge a 10% PPN local tax.
3.1 Policies and Norms of Indonesia for Gems &
Jewellery sector
Indonesia’s Pattern of Trade and Competitiveness
Pattern of trade:
In 2010 the key markets for Indonesia‘s non oil exports were developing East Asia
(accounting for 26%), Japan (15%) and NAFTA (16%), mainly the United States. It
is worth noting that exports to East Asia increased significantly from 15% in 1990
40
to 26% in 2010. This was in large part due to an increase in exports to other
ASEAN countries, whose share doubled to 16% of the total non oil exports.
Brenton and Ikezuki (2003) shows that Indonesia‘s manufacturing exports to non-
OECD countries in 1990 were 41% of those to OECD countries.
This ratio has risen significantly to around 80% in 2010. This finding suggests that
developing countries are becoming important markets for Indonesia. It is
interesting to note that Indonesia has been quite successful in competing in
developing countries. Its market share has been increasing throughout the last
decade, thus making developing countries as important as OECD countries as
destination of Indonesia‘s exports.. This could suggest that in the future Indonesia
should consider targeting its exports to the developing economies. In this regard, it
should be noted that in general developing countries have higher levels of tariff
than developed countries. Indonesia already has a much lower tariff than
developing countries in general. This further suggests that it is in Indonesia‘s
interest to see that tariffs in developing countries are being reduced.
3.2 Policies and Norms of India for Import or export to the other Asian Countries Foreign Trade Policy 2009-2014 Foreign Trade Policy has identified the gems and jewellery sector as a thrust area
with prospects for export expansion and employment generation. The highlights of
the policy are:
a. Import of gold of 8 carat and above allowed under replenishment scheme
subject to import being accompanied by an Assay Certificate specifying
purity, weight and alloy content.
b. Duty Free Import Entitlement (based on FOB value of exports during the
previous financial year) of consumables and tools, for:
1. Jewellery made out of:
i. Precious metals (other than gold and platinum) – 2%
ii. Gold and platinum – 1%
iii. Rhodium finished silver – 3%
2. Cut and polished diamonds – 1%
41
3. Duty free import entitlement of consumables for metals other than
gold, platinum will be 2% of FOB value of exports during the
previous financial year.
c. Duty-free import entitlement of commercial samples shall be Rs 300,000.
d. Duty free re-import entitlement for rejected jewellery shall be 2% of FOB
value of exports.
e. Import of diamonds on consignment basis for certification/ grading and re-
export by the authorized offices/agencies of Gemological Institute of
America (GIA) in India or other approved agencies will be permitted.
f. To promote export of gems and jewellery products, the value limits of
personal carriage of gems and jewellery products in case of
holding/participating in overseas exhibitions increased to US$ 5 mn and to
US$ 1 mn in case of export promotion tours. Further, the limit in case of
personal carriage, as samples, for export promotion tours, has been
increased from US$ 0.1 mn to US$ 1 mn.
g. Extension in number of days for re-import of unsold items in case of
participation in an exhibition in the US increased to 90 days.
h. In an Endeavour to make India a diamond international trading hub,
diamond bourses will be planned.
i. Gems and jewellery units may sell up to 10% of FOB value of exports of the
preceding year in Domestic Tariff Area (DTA), subject to fulfillment of
positive Net Foreign Exchange (NFE). In respect of sale of plain jewellery,
recipient shall pay concessional rate of duty as applicable to sale from
nominated agencies.
42
Industry Policy
All industrial undertakings of gems and jewellery are exempt from obtaining an
industrial license to manufacture. They are required to file an Industrial
Entrepreneur Memoranda (IEM) in Part 'A' (as per prescribed format) with the
Secretariat of Industrial Assistance (SIA), Department of Industrial Policy and
Promotion, Government of India, and obtain an acknowledgement. No further
approval is required. Immediately after commencement of commercial production,
Part B of the IEM has to be filled in the prescribed format.
Industrial undertakings are free to select the location of a project. In the case of
cities with population of more than a million (as per the 1991 census), however,
the proposed location should be at least 25 KM away from the Standard Urban
Area limits of that city unless, it is to be located in an area designated as an
"industrial area" before the 25th July, 1991. Relaxation in the aforesaid location
restriction is possible if an industrial license is obtained as per the notified
procedure. Small scale units are, however, exempt from the location restrictions.
Entrepreneurs are required to obtain Statutory clearances relating to Pollution
Control and Environment for setting up an industrial project.100 per cent Export
Oriented Units (EOUs) and units in the Export Processing Zones (EPZs)/Special
43
Economic Zones(SEZs), enjoy a package of incentives and facilities, which
include duty free imports of all types of capital goods, raw material, and
consumables in addition to tax holidays against export.FDI upto 100 per cent is
allowed through the automatic route for all manufacturing activities in Special
Economic Zones (SEZs).
The Development Commissioners (DCs) of Export Processing Zones (EPZs) /Free
Trade Zones (FTZS)/Special Economic Zones (SEZs) accord automatic approval
to projects where
(a) Activity proposed does not attract compulsory licensing or falls in the services
sector except IT enabled services;
(b)Location is in conformity with the prescribed parameters;
c) Units undertake to achieve exports and value addition norms as prescribed in
the Export and Import Policy in force;
(d)Unit is amenable to bonding by customs authorities; and
(e) Unit has projected the minimum export turnover, as specified in the Handbook
of Procedures for Export and Import. Processed foods are a de licensed industry.
The de licensed undertakings, however, are required to file an Industrial
Entrepreneur Memoranda (IEM) with the Secretariat of Industrial Assistance (SIA).
No further approval is required. No restrictions are imposed regarding the location
of the industrial undertaking. Certain items belonging to the are reserved for small
scale industry
Tariff-non-tariff Policy
The import duty on most of the items under this group is 35.2 to 56.832 per cent.
This includes a basic duty and a special additional duty. However, in case of
certain items like dust and powder of precious or semi-precious stones, waste and
scrap of precious metal, gold and silver coins, imitation jewellery etc. attract higher
duty.
3.3 Present Trade barriers for import / Export of Gems &
Jewellery
Restriction for export import of gems and jewellery
Several schemes that restricted the export and import of gold were launched in
44
various forms between 1947 and 1963, but the control regime finally took shape
with the implementation of the Gold Control Act 1968. This Act did not allow
goldsmiths to receive more than 100 grams of standard gold for manufacturing
jewellery. Further, a certified goldsmith was not allowed to possess a stock of
more than 300 grams of primary gold at any time. The quantity of primary gold
possessed by a licensed dealer was limited between 400 grams and 2 kg,
depending on the number of artisans employed. There was a legal ban on gold
transaction between dealers.
The government abolished the Gold Control Act when the balance of payment
crisis occurred in 1990, after which the large export houses could import gold
freely. Exporters in the export processing zones were allowed to sell 10% of their
produce in the domestic market. In 1993, gold and diamond mining were opened
up for private investors and foreign investors were allowed to own half of the
equity in mining ventures. In 1997, overseas banks and bullion suppliers were also
allowed to import gold into India. These measures led to the entry of foreign
players such as De Beers, Tiffany and Cartier into the Indian market.
Foreign Direct Investment Policy
At present, the Indian government allows 100% foreign direct investment
(FDI) in gems and jewellery through the automatic route.
For exploration and mining of diamonds and precious stones FDI is allowed
up to 74% under the automatic route.
For exploration and mining of gold and silver and minerals other than
diamonds and precious stones, metallurgy and processing, FDI is allowed
up to 100% under the automatic route.
Export Facilitation Measures by the Ministry of Commerce and
Industry
Further, in February 2009, the gems and jewellery sector got a special boost from
the Ministry of Commerce with the following announcements: Gems and jewellery,
diamonds and precious metals were given a special boost by the Ministry of
Commerce and Industry, the Export Promotion Council for Gems and Jewellery
and Star Trading Houses (in the gems and jewellery sector). Besides, the
45
Diamond India Ltd, MSTC Ltd and STCL Ltd were added under the list of
nominated agencies notified under Para 4 A.4 of foreign trade policy for the import
of precious metals.
Surat, Gujarat has been given the recognition of a town of export
excellence, because it is home to thousands of diamond units that employ
many diamond workers.
The authorized persons of gems and jewellery units in export-oriented units
will be allowed to carry personal carriage of gold in primary form up to 10 kg
in a financial year subject to the RBI and customs guidelines.
Import restrictions on worked corals have been removed to address the
grievance of gem and jewellery exporters.
4.1 & 4.2 Potential for import / export in India / Gujarat
Market & Future Business opportunities
Export import of the gems and jewelry in India
Exports
During the Fiscal Year 2010-11, the total exports for gems and jewellery stood at
US$ 43,139.24 million as compared to US$ 29,368.72 million during the fiscal year
2009-10. During the same period, the sector registered a growth of 46.89 per cent
over the previous year.
Gem and Jewellery Export Promotion Council (GJEPC)
The Gem and Jewellery Export Promotion Council is a representative body of
trade. The following initiatives have been taken by the council in order to enhance
competitiveness such as:
Preparation of a medium term exports strategy for various sectors including
gems and jewellery by the Ministry of Commerce.
Exploring the possibility of direct procurement of rough diamonds from
mining countries.
Promotion of Indian diamonds and jewellery abroad through
advertisements, publicity and participation in international fairs, buyer-seller
meets and direct approach to market retailers.
46
Market study through experts in the field to identify new markets.
Promotion of export of 'hallmark' jewellery from India to assure foreign
customers of quality and purity of jewellery made in India .
Gems and jewellery exports contracted steeply by 39% year-on-year to $2.7 billion
in February due to sluggish demand in western markets like Europe and the US,
the Gems and Jewellery Export Promotion Council said today.In February last
year, the exports stood at $4.5 billion, according to the data provided by the Gems
and Jewellery Export Promotion Council (GJEPC).
"We are getting less orders this year due to sluggish demand in European and
American markets," GJEPC Chairman Rajiv Jain said adding this trend is likely
Composition of Exports
Cut and polished diamonds: The export of cut and polished diamonds grew
manifold in 2010-11 as compared to 2009-10. In 2010-11, the export of cut
and polished diamonds was US$ 28251.92 million as compared US$
18237.56 million, recording a growth of 54.91 per cent.
Coloured Gemstones: Export of coloured gemstones was registered at US$
314.54 million in 2010-11 as compared to US$ 286.78 million in 2009-10,
showing a growth of 9.68 per cent.
Gold Jewellery: Export of Gold jewellery also grew in 2010-11, registering
US$ 12885.59 million as compared to US$ 9669.10 million in 2009-10. A
growth of 33.27 per cent was recorded.
Net Exports of Gems and Jewellery items during April-October 2011
The summary of export of gems and jewellery items during April 2010-March
2011 as compared to same period last year
Items April-
October
2011
April-October
2010
(Same ports as
current year)
% Growth/decline over
previous Year
US$ in
Million
US$ in Million US$
Cut & Pol Diamonds 15195.08 14807.71 2.62
Gold Jewellery- 1357.28 1209.24 12.24
47
D.T.A
SEZ/EPZ (included
Gold Jewellery &
Gold Medallions
and coins)
7968.97 5535.29 43.97
Total 9326.25 6744.53 38.28
Coloured
Gemstones
187.17 158.45 18.13
Silver Jewellery 386.92 284.18 36.15
Others * 17.52 9.08 92.95
Net Exports 25112.94 22003.95 14.13
Exports of Rough
Diamonds
995.65 580.44 71.53
Others 51.45 31.96 ---
Total Exports 26160.04 22616.35 15.67
* Data of Cut & Pol Diamonds include export of CPD (Bonded W.H) also.
Figures for April - October '2011 are provisional and subject to revision.
Data for October 2011 does not include figures from Visakhapatnam SEZ,
Cochin Air Cargo & Mumbai FPO
Above figures does not include data for Costume/ Fashion Jewellery, and
Sales to foreign tourists.
48
The Gems & Jewellery sector has experienced high growth over the years on the
back of a buoyant performance in its exports. Total exports of Gems and Jewellery
has registered an impressive growth from US$ 2.99 bn in FY91 to 21.12 bn in
FY09 which translates into a CAGR of around 11.47%. However, during FY01-
FY02, the slowdown in the US, which is the largest importer of India's gems and
jewellery, and some other importer countries, led to a demand contraction and a
subsequent decline in the export growth rate for the sector; while the decline was
mainly in exports of cut and polished diamonds (CPD), gold jewellery exports had
remained resilient as it registered a positive growth. Net exports during FY01 and
FY02 fell to US$ 7.8 bn and US$ 7.6 bn, respectively, as compared with US$ 8.1
bn during FY00. The government took important policy initiatives, including de-
licensing of the import of rough diamonds (with effect from April 1, 2002), which
was a long standing need, to give a boost to this sector. This was reflected in the
growth in the exports during FY03. Exports during FY03 grew by 21.36% as
compared to a decline of around 3% during the previous financial year. The
growth momentum in exports continued during the following two successive
financial years; however, during FY06 and FY07 the sector witnessed a
deceleration in the rate of growth (6.5% during FY06 and 2.7% during FY07) in net
exports due to the dismal performance in the cut and polished diamonds segment.
49
The growth in Gems and Jewellery exports has been primarily driven by the CPD
segment over the years. As one of the largest cutting and polishing centre of
diamonds in the world, the Indian CPD segment has always held the largest share
in the total exports of gems and jewellery. India primarily focussed on exports in
cut and polished diamonds owing to its traditional expertise in diamond cutting and
polishing. Growing by around an annual average growth rate of 9%, this segment
held an average share of around 83% in the net exports of gems and jewellery
during FY92 to FY02. However, since, FY03, its share shrank to around 69%.
Even though its share in net exports had fallen, it had continued to register an
average growth rate of around 13% during the above mentioned period. CPD
exports grew from US$ 7.11 bn in FY03 to US$ 13.02 bn in FY09; however, over
the years, the fall in the share of CPD exports has been increasingly replaced by
the growth in exports of gold jewellery.
50
The share of gold jewellery in India's net exports of gems and jewellery increased
from merely 6.80% in 1990-91 to 16.50% in FY03 and to 32.47% in FY09. Exports
of gold jewellery (as shown in the graph below) also witnessed an increase from
US$ 1.51 bn in FY03 to US$ 6.86 bn in FY09 at a CAGR of 28.69%.
The Recognizing the growing acceptance of Indian gold jewellery in the world
market the government had initiated several measures including a medium term
strategy in FY06.
The following measures were a part of this medium-term strategy:
a. Hallmarking and certification of gold to aid the development of Indian
brands in the jewellery market.
51
b. Integration throughout the jewellery supply chain from mining of raw
materials to retailing of end products as well as joint venture manufacturing
with the leading suppliers of the world.
c. Developing market intelligence with a focus on key markets including NRIs.
Under the Market Development Assistance and Market Access Initiative
scheme of the Government undertaken during the foreign trade policy of 2004-
09, steps have also been taken to encourage: creation of training infrastructure
to impart skills to artisans in jewellery designing; participation of exporters in
international fairs, and arrangement of buyerseller meets abroad to showcase
the quality and variety of Indian products.
The share of exports of coloured gemstones in India‘s net exports is very small.
Moreover, India is a net importer of pearls and synthetic stones. In fact, rough
coloured gemstones, synthetic stones and raw pearls are largely imported for
value addition and for preparation of final products, which are then sold either in
the domestic or international market. India has a rich resource of highly skilled and
low cost labourers which is effectively utilised by the Indian manufacturers in this
sector for creation of highly value added goods.
Even though platinum jewellery is highly sought-after in the international markets,
India does not export the same because it lacks natural resources for platinum;
however, platinum bars are imported into India, though in very low quantities, as
the demand for platinum jewellery is restricted to high-end customers and is not
very robust.
52
4.3 Conclusions & Suggestions
After analyzing the Gems & Jewellery sectors of India & Indonesia we can reach
on following conclusions & suggestions:
1. India‘s gems & jewlellery sector is one of the world‘s fastest growing sectors as
far as exports are concerned. Whereas Indonesia‘s same sector is very under
developed & having vast scope for development & business with India.
2. Looking to the very few trade barriers by both the economies for the gems &
jewellery sector it can be concluded that there is an ample scope for Indian
companies to export their gems & jewellery & also raw precious metals to
Indonesian companies.
3. Hence Titan industries of India should look for licensing or exporting with the
Indonesian company Bask Bali or alternatively it can go to expanding its
operations by having joint venture with this company in Indonesia.
References
1. http://www.eaber.org/sites/default/files/documents/CSIS_Soesastro_2005_4.pdf
53
Information Technology Sector
Table of Content Sr.No Particulars Page.No
1 Overview of Indian Information technology sector
2 Opportunity and Challenges of Indian Information technology Sector
3 Gujarat Information Technology Sector
4 Summary of Opportunity In Indonesia
5 Indonesia Information Technology Sector
6.Information about Company
1.TCS
2. NIIT
3. ZENITH Software Consultancy
4. WIPRO
5. Reliance Data Solution
7 Conclusion
8 Suggestion
9 References
1. INDIAN INFORMATION TECHNOLOGY SECTOR
The last decade has seen many positive developments in the Indian
information technology sector. The Indian information technology sector has
been instrumental in driving the nation‘s economy onto the rapid growth
curve. The sector now compares favourably with information technology
sector in the region on metrics like growth, opportunities, profitability and
services. A few companies have established an outstanding track record of
different services, growth and value creation. This is reflected in their market
valuation of the sector. However, improved regulations, innovation, growth
and value creation in the sector remain limited to a small part of it.
The Indian Information Technology sector is provided IT Services,
Engineering Services, ITES-BPO Services and E Business. Outsourcing,
packaged software support and installation, systems integration, processing
services, hardware support and installation and IT training and education.
54
The Indian Information Technology sector accounts for a 6.1% of the country's
GDP and export earnings as of 2009, while providing employment to a
significant number of its tertiary sector workforce. More than 2.5 million people
are employed in the sector either directly or indirectly, making it one of the
biggest job creators in India and a mainstay of the national economy.
Strengths of the Indian IT sector:
Highly skilled human resource
Low wage structure
Quality of work
Initiatives taken by the Government
global players have set-up operations in India
Quality Standards
Cost competitiveness
Quality telecommunications infrastructure.
2. OPPORTUNITIES & CHALLENGES IN INDIAN
INFORMATION TECHNOLOGY SECTOR:
The successful player in the sector has been raised for challenges must be
addressed before success can be achieved:
The market is seeing growth driven by new products and services that
include opportunities in computer hardware & software services, IT
services business process outsourcing and engineering services.
These require new skills in sales & marketing, of the services.
It provides them to take advantages of cost-effectiveness in these
areas due to new talent pool, Lower wages and greater advantage by
making their exports cheaper and competitive.
55
Have emerged as a major outsourcing and offshore development
centre for the IT companies due to the proximity to their major business
clientele in the USA.
The wake of US crisis it was observed that the rupee appreciated due
to the weakened US economy, Federal bank interest cuts and
subsequent FII inflows in the country. Due to this IT companies in India
incurred lower profit margins.
The US crisis, Indian IT company suffered major drop in profits
because majority of its clientele in the BFSI (Banking Financial Sector
and Insurance) due to the recession BSFI clients cut down on their IT
spending leading to lower profits so company presence in various
verticals.
56
3. GUJARAT INFORMATION TECHNOLOGY SECTOR
One Of The Most E-Prepared State In The Country Frontline State In
The Implementation Of E-Governance Policies And Projects.
Government Supported Comprehensive IT Infrastructure Development
through Joint Ventures with Private Players.
Ready To Use State Of The Art Infrastructure Such As The Creative
Info City Park At Gandhinagar And GNFC Info Tower And Astron IT
Park At Ahmadabad
15 IT /ITES /Electronics Special Economic Zone to Be Set Up In The
State By Large Corporate Players. Such As TATA, DLF, Adani Group,
Raheja Group, L & T, GIDC Etc…
Gujarat International Finance TECHCITY (Gift) 500 Acre Mega Project
For Global Financial Services Industry Through Come Up At
Gandinagar.
IT Sector Growth In GUJARAT
The Information And Communication Technology (ICT) Sector In
Gujarat Is Projected To See Investments Up To US $3.7 Billion By
2011.
The IT/ITES Sector Turnover Should Grow From US$ 60 Million In 2005
To US$ 2.4 Billion In 2010-11.
Software Export From The State Saw The Growth Rate Of 107.3% To
Reach US$ 134 Million.
IT Sector Services And IT Hardware Industry Are The Focus Growth
Areas Of Gujarat‘s IT Industry.
57
GUJARAT INTERNATIONAL FINANCE TEC-CITY (GIFT)
A one stop destination for global financial services industry spread over
500 hectares.
Located at a distance of 12 KM. from Ahmadabad International airport
and 8 KM. from Gandinagar, alongside national highway no. 8
IT services to support business including connectivity, IT , Walk – to –
Work housing, security and IT Services.
GIFT CITY ADVANTAGE
High speed IP based network
Infinite bandwidth
Robust data centre with disaster recovery sites
Intelligent building services
Shared market infrastructure (Access to national and global stock
exchanges)
Secure, reliable, scalable platform for global financial services with IT.
OPPORTUNITY:
By the opening of the GIFT City in GANDHINAGAR The major players of
India in the sector of IT like TCS, NIIT, ZENITH, RELIANCE DATA
SOLUTION, WIPRO, L & T, ADANI GROUP, INFOSYS, and many more IT
Companies have to opportunity to expand their business at one hub and
export their services in Indonesia.
In Our Project we have study about the following five companies, they are
having a financial strength to start business over Indonesia and also other
capability for the international business some companies like TCS,WIPRO,
NIIT has already established business there but they are opportunity to
expand their business to another state and can be provided new services to
the different small & medium companies and government.
58
4. SUMMARY OF OPPORTUNITY IN INDONESIA
Company
Existing or Not
Where It IS
Mode of Operation
TATA
CONSULTANCY
SERVICES
Yes
Jakarta
Expansion Of
Business In
Sumatra
NIIT
Yes
Jakarta
Software Solution
Service Provide To
Indonesian
Government,
Corporate And
Finance Sector
ZENITH
No
---
Can Establish The
Company And Give
The Competition To
Other
WIPRO
Yes
Jakarta
The Opportunity To
Develop Their Units
In Sumatra And
Kalimantan
RELIANCE DATA
SOLUTION
No
---
Establish The
Company And
Provide Consulting
Services
59
5. INDONESIA INFORMATION TECHNOLOGY SECTOR
The Information Technology Plays Important Role In The Development
Process Of Indonesia. The Information Technology Sector Consists Of
Computer Software And Hardware Services. It Also Includes Different
Services and IT Services Business Process Outsourcing. The Information
Technology Sector Is Its Reform Would Lead To Highest Rates Of Economic
Growth.
The Information Technology Sector In Indonesia Is The Largest In The
Region. Indonesia Is Expected To Be One Of The Best Regional IT Market
Growth Prospects Over Five-Year Forecast Period. In Later In the 19th
Indonesia‘s Information Technology Services Are Not So Much Developed,
There Is No Any E Business, Business Process Outsourcing, IT Services or
Other Services.
The Government Of Indonesia Has Been Currently Undertaking A
Comprehensive Reform Strategy For The Services Sector As A Whole And
The Computer & Software System In Specific. The Goal Of Information
Technology Reform Was Creating An Efficient IT Sector Which Offers Better
Quality Services. Government Is Rolling Out E-Learning Initiatives, Which
Could Because Education.
The Indonesian IT Market Is Forecast To Grow At A Compound Annual
Growth Rate Of 17% Over The 2011-2015 Periods. The Revival In Business
Spending Building On Momentum From Consumer Spending. In 2010,
Computers Sales Grew Strongly, And Double-Digit Growth Is Expected Again
In 2011. Indonesia Is Forecast To Be One Of The Best Regional IT Market
Growth Prospects Over BMI's Five-Year Forecast Period.
60
6. INFORMATION ABOUT THE COMPANY
1) TATA COUNSLTANCY SERVICES
Products & Services offered by TCS:
Tata Consultancy Services Offers Consumers And Institutions A Broad
Range Of Computer Software Products And Services, Including IT
Services, Custom Development Services, Business Process
Outsourcing, Application Management, Migration &Re-Engineering And
System Integration Services Provided By TCS.
DATA ANALYSIS OF TCS
SWOT ANALYSIS
STRENGTH WEAKNESS
Extensive global reach
Strong financial performance
Employee management skills
Value Added Services
Significant exposure to financial service market
Lake of scale in consulting operation
Leadership Crisis
E-Business
OPPOURNITIES THREATS
61
Focus on SMB segment
Growth in worldwide IT services
Mergers & Acquisition
Increasing employee costs
Intense competition
Consolidation in the end markets
Rupee appreciation
Changing Global Environment
Financial Performance during last years
Particulars 2010 2009 2008 2007 2006 2005
Revenues
Total Revenue 30,028.92 27,812.88 22,619.52 18,685.21 13,263.99 9,748.47
International Revenue 27,431.02 25,630.76 20,573.90 17,003.22 11,607.08 8,560.90
Domestic Revenue 2,597.90 2,182.12 2,045.62 1,681.99 1,656.91 1,187.57
Revenue From Offshore
Business
13,989.82 11,328.80 8,620.46 6,886.30 4,341.05 3,313.07
Revenue By Geographic
Segments
Americas 17,272.93 15,600.21 12,394.05 10,514.81 7,831.28 5,771.41
Europe 8,009.57 8,212.22 6,603.02 5,320.48 2,975.34 2,250.17
India 2,597.90 2,182.12 2,045.62 1,681.99 1,656.91 1,187.57
Others 2,148.52 1,818.33 1,576.83 1,167.93 800.46 539.32
Cost
Employee Cost 15,065.75 14,483.20 11,411.05 9,001.39 6,111.52 4,384.52
Other Operating Cost 6,268.62 6,159.88 5,497.09 4,544.97 3,468.17 2,550.12
Total Cost (excluding
interest
& depreciation)
21,334.37 20,643.08 16,908.14 13,546.36 9,579.69 6,934.64
Profitability
EBIDTA (before other
income)
8,694.55 7,169.80 5,711.38 5,138.85 3,684.30 2,813.83
Profit before tax 8,289.63 6,150.07 5,845.95 4,918.28 3,506.62 2,633.69
Profit after tax 7,000.64 5,256.42 5,026.02 4,212.63 2,966.74 1,976.90
Capital Accounts
(INR Crore)
Share Capital 295.72 197.86 197.86 97.86 48.93 48.01
Reserves And Surplus 18,171.00 15,502.15 12,102.26 8,752.24 5,949.88 3,429.53
62
Gross Block 6,419.51 5,843.86 4,291.80 3,197.71 1,951.04 1,170.65
Total Investments 3,682.08 1,614.41 2,606.16 1,256.87 704.62 421.54
Net Current Assets 7,395.02 7,544.12 5,553.32 4,331.11 2,867.18 1,797.09
Earnings per share in Rs
EPS - as reported 35.67 53.63 51.36 43.05 60.63 47.37
EPS - Adjusted for Bonus Issue 35.67 26.81 25.68 21.53 15.16 11.84
RATIO ANALYSIS
Particulars
Unit 2010 2009 2008 2007 2006 2005
Ratios - Financial Performance
International Revenue/Total Revenue % 91.35 92.15 90.96 91.00 87.51 87.82
Domestic Revenue/Total Revenue % 8.65 7.85 9.04 9.00 12.49 12.18
Other Operating Cost/Total Revenue % 20.88 22.15 24.30 24.32 26.15 26.16
Total Cost/Total Revenue % 71.05 74.22 74.75 72.50 72.22 71.14
Profit before tax/Total Revenue % 27.61 22.11 25.84 26.32 26.44 27.02
Profit after tax/Total Revenue % 23.31 18.90 22.22 22.55 22.37 20.28
Ratios - Balance Sheet
Debt-Equity Ratio No 0.01 0.04 0.04 0.06 0.02 0.06
Current Ratio No 1.88 2.26 2.24 2.24 2.25 2.24
Capital expenditure / total revenue % 3.43 3.95 5.58 6.64 4.69 3.72
Ratios - per share
Price Earnings Ratio No 21.89 10.07 15.79 28.97 31.57 -
Dividend Per Share Rs. 20.00 14.00 14.00 13.00 13.50 11.50
Dividend Pay out % 65.45 30.54 31.89 30.74 25.07 27.55
Interpretations:
1. The Total Revenues Of TCS Limited Aggregated Rs.23, 044.45 Crore
In Fiscal 2010 As Compared To Rs.22, 404.00 Crore In Fiscal 2009,
Registering A Growth Of 2.86%.
2. Based On TCS Net Income As A Percentage Of International &
Domestic Revenue Of The Company.
3. In 2010, The Company‘s Profit Before Taxes Aggregated Rs.6,370.38
Crore And In 2009 Rs.5,139.69 Crore Which Is Increase Up to 5.5%
63
4. In 2010, The Company‘s Profit After Taxes Aggregated Rs.5,
618.51crore And In 2009 Rs4, 696.21 Crore. Which Is Increase up
4.41%
5. Dividends Declared Per Common Share As A Percentage Of Net
Income Per Diluted Share. Which Is three Interim Dividends Of Rs.2
Each On The Equity Shares. A Final Dividend Of Rs.4 Per Equity
Share Has Been Recommended.
6. In 2010, The Company‘s Earnings per Share Were Rs.28.61 Is Higher
Than The 2
TCS MARKET PRICE DATA:
Month National
Stock
Exchange
of India
Limited
Bombay
Stock
Exchange
Limited
High
Low
Total
Number
of Shares
Traded
High
Low
Total
Number
of Shares
Traded
April 2010 821.70 759.75 4,66,88,033 820.65 759.70 64,82,257
May 2010 770.25 699.55 3,18,93,156 769.70 698.75 43,66,667
June 2010 787.70 733.05 2,71,73,888 787.35 735.15 32,63,975
July 2010 854.45 732.00 3,94,55,080 854.05 731.35 79,57,621
August 2010 879.85 832.05 2,75,70,578 878.25 833.10 46,56,158
September 2010 953.95 837.30 3,54,47,344 952.75 837.30 60,40,462
October 2010 1,066.95 940.90 3,72,01,142 1,063.65 940.75 61,64,277
November 2010 1,092.30 1,004.75 2,61,24,520 1,092.40 1,010.30 26,76,651
December 2010 1,170.20 1,072.60 2,83,52,371 1,167.85 1,072.60 32,72,889
January 2011 1,212.20 1,098.50 3,58,54,733 1,212.60 1,099.40 39,87,730
February 2011 1,183.70 1,089.60 3,57,48,233 1,184.80 1,089.40 39,16,850
March 2011 1,183.90 1,064.35 3,58,48,050 1,182.50 1,064.10 43,25,660
BUSINESS OPPOURTUNITY IN INDONESIA:
64
TCS Provides same product and software solution in INDIA as well as
INDONESIA. In Indonesia TCS was there only in Jakarta but in Indonesia
there are major 9 states where TCS can expand their business and establish
the new unit in SUMATRA. This state has major population in which highly
educated people are there which TCS uses as their employee in can there
company
2)NIIT
NIIT‘s is an initiative that is aimed at serving as a bridge between education
and industry by providing skills that are sought after by the industry by
delivering quality training within the college campus at a time convenient to
the students. This helps the students get better placement and the industry to
get better trained resources, which can be productive from the very first day.
NIIT‘s training solutions in IT, Business Process Outsourcing, Banking,
Finance and Insurance, Executive Management Education, and
Communication and Professional Life Skills, touch five million learners every
year. NIIT‘s expertise in learning content development, training delivery and
education process management make it the most preferred training partner,
worldwide.
NIIT has provided computer-based learning to over 15,000 government and
private schools. To address the vast population of underserved, school-aged
children, NIIT launched the Hole-in-the-Wall education initiative. We provide
technology-based learning solutions to leading corporates across the world.
NIIT offers cutting-edge learning solutions to Fortune 100 companies,
universities, technology majors, training corporations and publishing houses.
The company‘s expertise in areas like strategic consulting, learning design,
customized content, off-the-shelf content (e-learning),training delivery, hi-end
technology training, testing & assessment, and learning management enables
large organisations to train cost effectively and efficiently. It facilitates a
learning environment that meets their existing and emerging skills.
NIIT SOFTWARE:
65
NIIT provides following services IN INDIA:
I. Information Technology Learning Solution
Career Programs
Technology Learning Solutions for Engineers
Networking & Infrastructure Management Programs
Basic Computer Programs
Short Term Technology Programs
II. Networking and Infrastructure Management Programs
III. Institute of Banking, Finance, Insurance
IV. Executive Management Program
V. Institutional Alliances
VI. Solution For Corporate
VII. Solution For government
VIII. Solution for School
Information Technology Learning Solution
NIIT has been working closely with global leaders in Technology to provide
training on state-of-the-art technology platforms. The alliances with some of
the most eminent names in the industry like Cisco, Microsoft, Oracle, SAS
Institute and many more to ensure that the students capitalize on the latest
skills and technology trends, so that they are better able to meet the ever-
increasing industry.
Key learning solutions are following:
a. Career Programs:
b. Technology Learning Solutions for Engineers
c. Networking & Infrastructure Management Programs
d. Basic Computer Programs
NIIT provides following services IN INDONESIA:
I. Career Programs
II. Network Engineering
III. Software Engineering
66
IV. Short Term Program
a. Oracle b. Microsoft C. adobe
BUSINESS OPPOURTUNITY IN INDONSIA:
Every company wants to expand its business. So NIIT has wider scope to
growth of its business across the country like Indonesia. The company has
opportunity to introduce new software‗s which are provided by the NIIT
Company located in India, which are as follows:
I. Networking and Infrastructure Management Programs
II. Institute of Banking, Finance, Insurance
III. Institutional Alliances
IV. Solution For Corporate
V. Solution For government
Through experience of a NIIT delivering IT services solution for government
school colleges and corporate. Company provides to Indonesia clients across
industry verticals, with prime focus of government corporate and software
solution IT and BPO companies.
67
3) ZENITH SOFTWARE CONSULTANCY
Zenith Software, An Iso 9001:2008 And Iso/Iec 27001:2005 Certified
Company Provides World-Class Software Solutions And Support Services To
Its Clients Using A Proven Onsite/Offshore Engagement Model. With Over A
Decade Of Experience In The Outsourcing And Offshoring Space, They Are A
Part Of The Reputed Zenith Group That Has Business Interests In The High
Technology Industry. Company Offshore Development Centre Is Located In
Bangalore, India. And Zenith is also Present In USA, UK, Australia And New
Zealand.
Zenith Caters To Clients Across Industry Verticals, With Prime Focus On
Travel, Insurance And Retail Segments. Our Horizontal Strengths Include
Custom Application Development And Management, E-Business Solutions,
Package Implementation, Data Warehousing And Testing. We Also Offer It
Services And BPO Services Under The Same Roof.
SERVICE OFFERINGS:
Zenith Provides Following Services:
It Services
Custom Application Development
Application Management Services
Package Application Services
Bi & Data Warehousing
Software Testing
CUSTOM APPLICATION DEVELOPMENT:
Zenith Offers The Right Combination Of Technical Expertise, Functional
Knowledge And Delivery Model To Effectively Address An Organization's
Software Needs While Optimizing Their Spends.. Zenith's Custom
Development Services Include The Development Of New Applications,
Features, Extensions, Enhancements, Interfaces And Customization Of
Packages.
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APPLICATION MANAGEMENT
Application Management Services Include:
Maintenance / Enhancements
Migration / Re-Engineering
Documentation
Web Enabling Of Legacy Applications
Testing And Root-Cause Analysis Services
Production Support
DATA WAREHOUSING
Zenith Offers Cost Effective Data Warehousing Solutions For Your Unique
Needs. Our Solutions Span the Entire Life Cycle Of Building And Operating A
Business Intelligence System, Including
Business Requirements Analysis
Query Analysis, Data Modelling, Extraction, Transformation And
Loading
ETI Architecture And Development
Custom Reporting
Development Of OLAP Solutions For Business Intelligence
Data Mining
Database Management And Performance Tuning
Delivery Model
Zenith's Proven Global Delivery Model Facilitates You In Reducing Your Tco
While Enhancing Your ROI. We Meet Clients' Requirements By Striking The
Right Balance Of Onsite And Offshore Development. Experience Over A
Decade Has Endowed Us With The Expertise To Manage Communication
Processes And Projects Across Geographic Locations.
We Offer You The Following Delivery Models:
69
Offshore Development
Onsite-Offshore Development
Dedicated Development Centre
RPO Services
As A Strategic Business Partner, We Design And Manage The Recruiting
Process For Clients With Complex And Evolving Needs. Operational
Flexibility, Underpinned By Competency Based Practices And Policies Allow
Us To Provide Seamless Solutions That Are Strategic, But Practical In
Execution.
RECRUITMENT PROCESS PROGRAM
Keeping In Mind The Specific Needs Of Each And Every Customer, Zenith
Software Works Towards Identifying The Right Fit Candidate At Various
Levels Of The Job. Zenith Has A Dedicated HR Team Which Consists Of An
HR Manager, A Team Of Recruiters And A Team To Resources Managers.
Working Closely With Our Clients Helps Us Plan Our Recruitment
Accordingly. We Use One Or More Of The Following Recruitment
Processes:
Advertisements In Papers And On Jobsites
Employee Referrals
Walk-In Interviews
Campus Recruitment
BPO SERVICES
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BUSINESS OPPOURTUNITY IN INDONSIA:
In Indian Software Company Zenith Software Are Opportunity To Establish
Their Company In Indonesia Capital In Jakarta. The Zenith Software Solution
Is Providing Different Solution To Companies And Governments for the
outsourcing activity as well as database management services. The Zenith
Team Combines Business Understanding with Technology Insight. Through
Experience Garnered Over A Decade Of Delivering It Services. Zenith
Company Provides To Indonesia Clients Across Industry Verticals, With Prime
Focus On Travel, Insurance And Retail Segments. Zenith Horizontal
Strengths Include Custom Application Development And Management, E-
Business Solutions, Package Implementation, Data Warehousing And
Testing. Zenith Also Offers It Services And BPO Services In Indonesia Capital
Jakarta And Different State In Indonesia.
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WIPRO (Western India Vegetable Products Ltd)
In The Year Of 1945, In Pre–Independent India, A Vision Was Born, Which
Would Eventually Stand Out As A Brand Name Synonymous With Innovation
And Integrity. Starting Off With Consumer Products Business, Wipro Then
Diversified Into Newer Areas Including It Hardware And It Services. Such Has
Been The Dynamic Power Of The Organization That Over The Past 50 Years,
Wipro Has Evolved Into A Leading Global It Company, A Company Which
Has Pioneered Many An Innovation In The It Services, BPO And R&D
Services Space.
Headquartered At Bangalore, India, We At Wipro Implement The Philosophy
Of 'Applying Thought', Thereby Helping Clients To "Do Business Better". Our
Path Breaking Innovations And Ideas Have Culminated Into The `Wipro Way'
– A Process Which Directly Impacts Customer Benefits By Improving Time-
To-Market, Enhancing Predictability And Reliability, And Cutting Costs.
Wipro Products in India and Indonesia:
Wipro Provides Following Product And Software Solution:
Desktop
Laptops
Datacentre System
Infrastructure Technology Solutions
Networking Solutions
Enterprise Information Security
Emerging Technologies
Enterprise Management
Contact Centre Infrastructure
Platforms & Storage
BUSINESS OPPOURTUNITY IN INDONSIA: Wipro Provides Same
Product And Software Solution In India As Well As Indonesia. In Indonesia
Wipro Was There Only In Jakarta But In Indonesia There Are Major 9 States
Where Wipro Can Start Up There Services In Sumatra And Kalimantan.
These Two States Have Major Population In Which Highly Educated People
Are There Which Wipro Uses As Their Employee In Can There Company.
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There Is Bright Future For The Services Provided By Wipro In These 2 States
And The Services Are…
Desktop
Laptops
Data Centre System
Mobility
Infrastructure Technology Solutions
Networking Solutions
Enterprise Information Security
Emerging Technologies
Enterprise Management
Contact Centre Infrastructure
Platforms & Storage
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RELIANCE DATA SOLUTIONS:
Reliance Data Solutions Is An Information Management Services Firm That
Provides Online Data Backup, Managed It Services, And Business
Technology Consulting In A Reliable And Timely Manner To Small And Mid-
Sized Companies.
Reliance Data Solutions Provides Organizations With Affordable Information
Management Services. From Our Business-Class Remote Online Backup
Service To Monitoring Your Information Technology Assets Via Our Remote
Monitoring Management Service, Reliance Data Solutions Can Address All
Your Information Management Needs.
Reliance Data Solution Provides Different Solution In Indian Companies:
Online Backup
Managed Services
Consulting Services
ONLINE BACKUP:
Trust The Backup Of One Of Your Most Vital Resources - Data - To A Highly
Secure And Reliable Remote Data Vault. Reliance Data Solutions‘ Remote
Data Backup Is A Business-Class Online Backup Service Which Provides A
Unique Service Offering:
Fully Automated Process With Backups Held On Disk For Rapid File
Restoration.
Secure Online Transfer Of Fully Encrypted Data To An Offsite Data
Centre, Ensuring Regular Backups Are Stored Safely And Remotely.
Sound Basis For Business Continuity Planning - Whatever Happens,
Your Data Is Safe.
Cost-Effective Solution with an All-Inclusive Monthly Service Charge.
Live Customer Support.
MANAGED SERVICES:
74
Network Monitoring
Reliance Data Solutions Provides A Comprehensive Range Of Network
Monitoring And Performance Management Solutions To Help You Manage
Network Performance.
Server Monitoring
The Health Of One Of The Most Critical Business Systems - The Server.
Avoid The Risks of Expensive Remedial Action and Reputational Damage
through Proactive Monitoring of Server Security, Hardware And Disk
Performance, And Application software.
Workstation Monitoring
Workstation Monitoring Can Spot Periodic Workstation Problems And Fix
Them Fast, Ensuring Optimum Availability For All Users And Keeping
Business Running Smoothly.
System And Network Alerting
Help Stay On Top Of Your Networks and Systems Around The Clock. Get
Alerted To Issues With Instant Emails And Sms Alerts The Moment A
Problem Is Detected.
Asset Tracking
Track Software License Compliance, Hardware Configuration Information,
And Receive Comprehensive Inventory Tracking Reports. Audit Hardware
And Software Changes And Confirm That The System's Expected State Is Its
Actual State.
CONSULTING SERVICES:
Planning Services:
Technology Evaluation
75
Needs Assessment
Infrastructure Planning
Business Continuity
Organizing Services
Project Management
Vendor Management
Resource Management
Implementing Services
Resource Acquisition
Hardware Installation
Application Deployment
Monitoring Services
Remote Monitoring Management
Technical Support
Business Review
Strategy Evaluation
OPPOURTUNITY FOR FUTURE:
In Indian Software Company Reliance Data Solution Are Opportunity To
Establish Their Company In Indonesia Capital In Jakarta. The Reliance Data
Solution Is Providing Different Solution To Indian Information Technology
Companies. Through Experience Garnered Over A Decade Of Delivering It
Services. RDS Company Provides To Indonesia Clients across Information
Technology Sector Companies Different Solution Like as
Online Backup
Managed Services
Consulting Services
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6. CONCLUSION:
India is the fourth largest trade partner of INDONESIA after the US, Italy and
Saudi Arabia.
Major imports to Indonesia from India are cotton yarn, glassware, wine,
medicines, and silverware and gold roman coins. The Indonesian Ministry of
gas is also currently negotiating the establishment of a natural gas-operated
fertilizer plant with another Indian company, along with that the service sector
lead to highest economic growth. it‘s play a important role for the development
of nation. The Information Technology Sector Consists Of Computer Software
And Hardware Services. It Also Includes Different Services and IT Services
Business Process Outsourcing.
The Government Of Indonesia Has Been Currently Undertaking A
Comprehensive Reform Strategy For The Services Sector As A Whole And
The Computer & Software System In Specific. The Goal Of Information
Technology Reform Was Creating An Efficient IT Sector Which Offers Better
Quality Services. Government Is Rolling Out E-Learning Initiatives, Which
Could Because Education.
These listed companies of India are providing better data solution,
outsourcing facility ,online backup, consulting services, implemented services,
system and networking alert, security solution, IT infrastructure solution etc.
That can make easy life for the Indonesian service & manufacturing industry
as well as government.
77
7. SUGGESTION:
TATA has already existing in Indonesia that is at Jakarta but it can expand its
business in the same country at Jakarta.
NIIT also existing in Indonesia at Jakarta so the company have an opportunity
to provide software solution service to the country‘s Government, Corporate
and Finance sector.
ZENITH is not yet established in Indonesia so the company have an
opportunity to establish their business in Indonesia and give competition to
others.
WIPRO is existing in Indonesia at Jakarta but the company have an
opportunity to develop their units in Sumatra and Kalimantan.
RELIANCEDATA SOLUTION not yet establishes in Indonesia so the
company have an opportunity to establish their business in Indonesia and can
provide consultancy services.
78
References:
1. http://www.euromonitor.com/india/country-factfile
2. http://www.scribd.com/doc/33325854/PESTEL-Analysis-of-Indonesia
3. http://www.exim-policy.com/
4. http://www.wealthbriefingasia.com/article.php?title=&id=41736
5. http://www.embassyofindonesia.org/foreign/foreignpolicy.htm
6. http://mea.gov.in/mystart.php?id=50044478
7. http://www.nationsencyclopedia.com/Asia-and-Oceania/Indonesia-
CUSTOMS-AND-DUTIES.html
8. http://www.tcs.com/homepage/Pages/default.aspx
9. http://www.niit.com/Pages/DefaultINDIA.aspx
10. http://www.wipro.com/
11. http://zenithsoftware.net/About_Us.html
12. http://www.rcom.co.in/Rcom/business/HTML/dso_overview_main.html
13. http://www.oppapers.com/essays/BankIng-In-India/280478
14. http://www.scribd.com/jindal26/d/23316762-Information-Technology
15. www.indianmirror.com/indian-industries/information-technology.html
http://neerajmishra.wordpress.com/2008/07/21/information-technology-it-i
technology-it-i
17. india-the-challenges-future-scope/
18. http://www.euromonitor.com/indonesia/country-factfile
79
Infrastructure Sector
TABLE OF CONTENT
PART-II INDUSTRY/ SECTOR/ COMPANY/ PRODUCT/ SERVICE
SPECIFIC STUDY
Sr. No. Particulars Page No.
4 Introduction of the Indian Infrastructure industry
5 Introduction of the Indonesia Infrastructure industry
5.1 Shipping (Ports)
5.2 Railways
5.3Roads
5.4 Post and Telecommunications
6. Comparative study of Infrastructure Industry
6.1 Reliance Infra (India)
6.2 Wika (Indonesia)
7. Data Analysis
8 Present Trade Barriers
8.1 Indian Foreign Trade Policy
8.2 Indonesian Foreign Trade Policy
9 Business Opportunities in Indonesia
Conclusion & suggestions
80
Bibliography
Chapter:4 Introduction of the Indian Infrastructure
industry
Investment Opportunities In Indian Infrastructure.
In the next five years planned infrastructure investment in India in some key
sectors are (at current prices): Modernization of highways -US$ 75 billion,
Development of civil aviation US$ 12 billion, Development of Irrigation
system- US$ 18 billion, Development of Ports-US$ 26 billion, Development of
Railways- US$ 71 billion, Development of Telecom- US$ 32 billion,
Development of Power -US$ 232 billion. Thus in the eleventh five year plan
,investment in the above sectors (Aviation infrastructure ,Construction
infrastructure, Highway infrastructure ,Power infrastructure, Port infrastructure
,Telecom infrastructure ) will be US$ 384 billions(Rs 17,20,000 Crores)
considering the huge infrastructure market potential in India. In addition to the
above, investments to the tune of US$ 91 billions have been planned in other
infrastructure sectors like Tourism infrastructure ,Urban infrastructure ,Rural
infrastructure, SEZs ,and water infrastructure and sanitation infrastructure
thus making the total infrastructure investments in the eleventh plan period
81
2007-08 to 2011-12 as US$475 billions. Domestic and global infrastructure
funds have exposure to Indian infrastructure sectors.
Infrastructure Potential in India:
Ports infrastructure in India:
India has a long coastline of 7,517 km. The existing 12 major ports
control around 76 % of the traffic. Due to globalization, India‘s ports
need to gear up to handle growing volumes. A number of the existing
ports have plans for expansion of capacities, including addition of
container terminals. The government has launched the National
Maritime Development Programme, to cover 276 port projects
(including related infrastructure) at an investment of about INR 600
billion by the year 2012. Also, States are increasingly seeking private
participation for the development of minor ports, especially on the west
ports. Indian ports are projected to handle 875 million tones(MT) of
cargo traffic by 2011-12 as compared to 520MT in 2004-05.There will
be an increase in container capacity at 17% CAGR.Cargo handling at
all the ports is projected to grow at 19 per cent per annum till 2012.
Planned capacity addition of 545 mt at major ports and 345 mt at minor
ports. Port traffic is estimated to reach 1350 million tones by 2012.
Airports infrastructure in India:
Passenger and cargo traffic slated to grow at over 20% annually and
set to cross 100 million passengers per annum by 2010 and and set to
cross cargo traffic of 3.3 million tonnes by 2010.Mumbai and Delhi
airports have already been handed over to private players.Kolkata and
Chennai airports will also be developed through JV route.
Railways Infrastructure in India:
Indian Railways is the largest rail network in Asia and worlds second
largest under one management. Indian Railways comprise over one
hundred thousand track kilometers and run about 11000 trains every
day carrying about 13 million passengers and 1.25 million tones of
freight every day. Programmed also envisages strengthening of rail
82
connectivity to ports and development of multimodal corridors to
hinterland. Construction of 4 mega bridges costing about US$ 750
million is also included in the programme. Construction of a new
Railway Line to Kashmir valley in most difficult terrain at a cost of US$
1.5 Billion and expansion of rail network in Mumbai area at a cost of
US$900 million has also been taken up. Freight traffic is growing at
close to 10% and passenger traffic at close to 8% annually.
Power Infrastructure in India:
Presently the installed capacity of electric power generation stations
under utilities stood at 130000MW and in the five year plan the
generation capacity is planned to be increased to 2,20,000 MW by
2012.There is a 13% peaking and 8% average shortage of power
annually. Central government has already taken seps to increase
capacity by building Ultra mega power projects (UMPPs).There is a
plan to increase Nuclear power capacity from 3900MW currently to
10000 MW by end of 11th plan.
Telecom Infrastructure in India:
Even with the rapid growth of telecom sector in India, the rural
penetration is still less than 5%. At 500 minutes a month, India has the
highest monthly 'minutes of usage' (MOU) per subscriber in the Asia-
Pacific region, the fastest growth in the number of subscribers at
CAGR of more than 50%, the fastest sale of a million mobile phones (in
one week), the world's cheapest mobile handset and the world's most
affordable colour phone.
Highways and Roads infrastructure:
The Indian road network has emerged as the second largest road
network in the world with a total network of 3.3 million km comprising
national highways (65,569 km.), State highways (128,000 km.) and a
wide network of district and rural roads. The US tops the list with a road
83
network of 6.4 million km. Currently, China has a road network of over
1.8 million km only. Out of the 3.38 million Kms of Indian road network,
only 47% of the roads are paved.
Construction Infrastructure in India:
Construction accounts for nearly 7 per cent of Indian GDP and is the
second biggest contributor (to GDP) after agriculture. Construction is a
capital-intensive activity. Broadly the services of the sector can be
classified into infrastructure development (54%), industrial activities
(36%), residential activities (5%) and commercial activities (5%). The
main entities in the construction sector are construction contractors,
equipment suppliers, material suppliers and solution providers.
Oil, Gas –Hydrocarbon Infrastructure in India:
With the exponential increase in the population of vehicles and
industrial requirement, the consumption of petrol products is likely to
increase to 300 MMT by the year 2010. India has established
geological reserves of more than 6 billion and exploration acreages are
available on offer on continuous basis. It is estimated that investment
over the next 10-15 years shall be in the range of US$ 100-150 billion.
Additional refining capacity of 110 million tonnes shall be required by
2010. Opportunities have emerged in business areas linked to Natural
Gas.
Top players in the infrastructure sector in India:
L & T Ltd
HCC infrastructure
Maytas Infra Limited
Patel Engineering
Reliance Infrastructure
84
Punj Lloyd
Subhash Projects
Sadbhav Engineering
IRB Infrastructure Developers Limited
GMR Infrastructure
Chap 5: Introduction of the Indonesia Infrastructure
industry
85
5.1 Shipping (Ports)
Maritime transportation became the focus of a major investment program
and a series of regulatory reforms during the 1980s because of its
importance in international trade. Restrictions on new entrants were
imposed through five classes of shipping license: interisland shipping, with a
minimum capacity of 175 gross tons; local shipping, with 35 to 175 gross
tons. Foreign vessels were required to obtain a special license to enter
Indonesian ports, and a policy to reduce transshipment through
About 60 percent of the total cargo shipped was on special bulk carriers,
dominated by crude oil and natural gas; of the general cargo carried by ship,
which in FY 1989 totaled about 40 million tons, about 80 percent was
carried on oceangoing or interisland class vehicles, with the remainder split
evenly between local and traditional craft
5.2 Railways:-
Although trains were used mostly for passenger transportation, freight
hauling had made significant increases in the 1980s, increasing from 800
million tons per kilometer annually in the early 1980s to around 3 billion tons
per kilometer by the start of the 1990s. Much of the railroad network,
however, was built before World War II, overburdened by users, and in need
of substantial overhaul. Maintenance of railroad rolling stock thus was given
special attention in FY 1989 and FY 1990 through a US$28 million World
Bank loan. More than 50 locomotives, 140 passenger cars, and 2,000
freight cars were scheduled for repair and rehabilitation. Government funds
also were provided under Repelita V for 15 new foreign-made diesel
locomotives (mostly from Canada and Japan) and 265 Indonesian-made
freight cars designed for hauling coal, cement, fertilizer, and palm oil. Funds
also included purchases of foreign made signal equipment and automatic
crossing gates.
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5.3 Roads
Road travel was the most important form of travel for both passengers and
freight in the early 1990s and was given the highest priority for government
transportation expenditures. From Repelita I (FY 1969-73) and Repelita II
(FY 1974-78) through Repelita IV (FY 1984-88), about 55 percent of
expenditures on transportation infrastructure was allocated to the extension
and maintenance of roads, while 20 percent went to marine transportation,
15 percent to railroads, and 10 percent to air and river transportation (see
fig. 9). In 1989 a total of 250,000 kilometers of national, provincial, and
district roads were reported in various states of repair, with 65 percent
reported in good to moderate condition and 43 percent of the total reported
as paved with asphalt.
5.4 Post and Telecommunications
Indonesia had a sophisticated telecommunications system as a result of
early investments in satellite communications. New regulations in the late
1980s permitted secondary communications services, such as fax and
cellular phone operations, to be supplied by private businesses in
cooperation with the government's Directorate General of Radio, Television,
and Film.
Television and radio communications were dominated by the government
networks, Radio of the Republic of Indonesia (RRI) and Television Network
of the Republic of Indonesia (TVRI). The satellite communication system
brought television signals to every village in the country. In the early 1990s,
there were some 11 million television sets or an average of 56 per 1,000
people nationwide.
.
87
Chapter 6: Comparative study of Infrastructure
Industry
6.1 RELIANCE INFRA (India)
Reliance Infrastructure Limited is a part of the Reliance Anil Dhirubhai Ambani
Group, one of India‘s largest business houses. Incorporated in 1929, Reliance
Infrastructure is one of India‘s fastest growing companies in the infrastructure
sector. It ranks among India‘s top listed private companies on all major
financial parameters, including assets, sales, profits and market capitalization.
Reliance Infrastructure companies distribute more than 36 billion units of
electricity to over 30 million consumers across an area that spans over
1,24,300 sq kms and includes India‘s two premier cities, Mumbai and Delhi.
The Company generates over 940 MW of electricity through its power stations
located in Maharashtra, Andhra Pradesh, Kerala, Karnataka and Goa.
Reliance span is across three verticals:
- Engineering, Procurement and Construction
- Energy
- Infrastructure
Engineering, Procurement and Construction
EPC offers a single point solution to the execution of power plants
including project engineering, procurement, construction &
commissioning for its clients. Along with full service project advisory
capabilities, we manage power plants on a turnkey basis and provide
industry specialist services such as fuel management advice and fiscal
advice. Our the turnover of the division was Rs 557 crore (US$ 120
million) and order book position of over Rs 18,530 crore (US$ 4 billion)
as on June 30, 2010.
88
Energy
our core competency in energy extends to generation, transmission,
distribution and trading. This comprehensive sphere of influence
extends our vision of a highly developed India within our realms. We
distributed more than 36 billion units of electricity to 30 million
consumers and generate 941 MW of electricity from our power
stations. Our transmission division is developing 5 transmission
projects, with total project outlay of Rs 6,640 crore (US$ 1.4 billion).
Infrastructure
RInfra has a significant presence in the construction of roads, metros,
airports and real estate. Infrastructure is decidedly the most visible and
important form of development in a nation. We signify this with our 11
road projects of 970 kms worth about Rs 12,000 crore (US$ 2.6 billion).
We are currently implementing 3 metro rail projects in Mumbai and
Delhi worth around Rs 16,000 crore (US$ 3.4 billion).In the real estate
space, we are in various stages of bidding/negotiation/planning with
over 400 million sq. feet of mixed use built up potential.
Performance
During the year under review, your Company earned an income of ` 10,908
crore, against ` 10,959 crore in the previous year. The Company earned Profit
after tax of ` 1,152 crore as compared to ` 1,139 crore in the previous year.
Shareholders‘ equity (Net worth) increased to ` 15,152 crore from ` 11,907
crore in the previous year. The factors contributing to the financial
performance are discussed more elaborately in the Management Discussion
and Analysis which is included as part of the Annual Report.
89
90
6.2 Introduction of Wika (Indonesian company)
91
History
WIKA took part in the construction project of Gelanggang Olah Raga Bung
Karno on the occasion of the Games of the New Emerging Forces (GANEFO)
and the 4th Asian Games in Jakarta. With the passing of time, various
improvements were made in order to continue growing as well as contribute to
nation-building by providing construction services throughout the country.
WIKA underwent expansion with the establishment of several new divisions,
namely the Construction Civil Division, Building Division, Housing Facilities
Division, Concrete and Metal Products Division, Industrial Construction
Division, Energy Division, and Commerce Division. WIKA‘s strategy is
Performance
In Wika‘s Financial Performance there is increase in a Gross Income from
Rs.645.733 in 2009 to Rs.673.068 in 2010. That‘s means there is increase in
current assets and also decrease in the cost of sales of company, and it is
good for company‘s growth in future. Also increase in Net Income from
Rs.189.22 in 2009 to Rs.284.922 in 2010 because of increase in sales. And
also increase in earnings per share, so it give it create a good image for
company to attract investor to its securities.
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93
94
Chapter:- 8 Present Trade Barriers
95
8.1 Indian Foreign Trade Policy
A developing country such as India needs to import technology and capital
goods. To offset these imports, the government of India provides export
promotion schemes. The Indian government also uses import quotas; import
licensing and import duties to help balance the import-export trade in India.
Key highlights of India‘s trade policy is
Market Access and Export Market Diversification:
Incentive schemes have been expand to cover new markets and new
product categories. New markets, sixteen from Latin America and ten
from Asia-Oceania have been added as part of the Focus Market
Scheme. The incentives available have increased from 2.5% to 3% for
these new markets.
New Product Incentive Scheme:
This covers a wide variety of products ranging from engineering,
plastics, textiles, Green technology, Jute & Fiscal, technical textiles,
project goods, vegetable textiles and some electronics. The incentives
increased from 1.25% to 2%.
Technology Upgrades:
For companies in certain sectors such as engineering and electronic
products who want to upgrade their technology, zero duty will be
assessed.
Gems & Jewellery Sector:
Gold Jewellery exports will be permitted to receive Duty Drawbacks.
This is where the duty collected on the export will refunded.
Value added Manufacturing:
To increase Value added Manufacturing exports, a 15% minimum
value addition on imported inputs has now been prescribed.
Procedure Simplification:
Increase from 15 to 50, the number of sample pieces allowed to be
imported by exporters at duty free rates.
96
8.2 Indonesian Foreign Trade Policy
Foreign Trade Policy 2009-14
Support for Technological up-gradation
5. Zero duty EPCG (Export promotion capital goods) scheme, introduced
in August 2009 and valid for only two years up to 31.3.2011, has been
extended by one more year till 31.3.2012. In addition, to give a boost to
technological up-gradation for additional sectors as well, the benefit of
the scheme has been expanded to cover paper & paperboard and
articles thereof, ceramic products, refractories, glass & glassware,
rubber & articles thereof, Plywood and allied products, marine
products, sports goods and toys and additional engineering products.
6. Additional Towns of Export Excellence (TEEs) announced viz. Barmer
(Rajasthan) for Handicrafts; Bhiwandi (Maharashtra) for Textiles; and
Agra (Uttar Pradesh) for Leather Products.
Benefit and flexibility to Status Holders:
7. Status Holders contribute to a substantial part of our exports. To
support them to upgrade their technology, 1% Status Holder Incentive
Scheme (SHIS) introduced in August 2009 and valid for only two years
up to 31.3.2011, has been extended by one more year for 2011-12
exports. In addition, to give a boost to technological up-gradation for
additional sectors as well, the benefit of the scheme has been
expanded to cover chemical & Allied products, paper, paperboard and
articles thereof, ceramic products, refractories, glass & glassware,
rubber & articles thereof, plywood and allied products, electronics
products, sports goods and toys and additional engineering products.
8. Additional flexibility provided for transferability of Duty Credit Scrips
being issued to Status Holders under paragraph 3.13.4 of FTP under
VKGUY scheme by allowing transfer of scrip for import of cold chain
equipments to unit(s) in the Food Park.
97
Stability / Continuity of the Foreign Trade Policy:
9. The popular and exporter friendly Duty Entitlement Passbook (DEPB)
scheme has been extended beyond 31.12.2010 till 30.06.2011.
10. Availability of concessional Export Credit:
Interest subvention of 2% for pre-shipment credit for export sectors
namely, Handloom, Handicraft, Carpet and SMEs for all export sectors,
have been allowed till 31.3.2011 in the budget 2010-11. This facility
has now been extended to a number of additional products pertaining
to sectors like Engineering, leather, textiles, Jute.
11. Advance Authorization for Annual Requirement shall also be
exempted from payment of anti-dumping & Safeguard duty in line with
the underlying principle that goods and services should be exported
and not the taxes and levies.
Engineering and Electronics:
35. Additional items of Engineering, namely, Pipes & Tubes, Electric
Generating Sets, Cast Articles of Iron & Steel, Ferro Manganese and
Ferro Silicon shall now be entitled for benefit @ 2% under FPS.
36. A number of engineering items namely, Machine Tools, Compressors,
Iron & Steel Structures including Transmission Towers and Scaffolding,
LPG Cylinders, Ductile Tubes & Pipes shall now be entitled for benefits
@ 2% of FOB value of exports to all 3markets under FPS instead of
their exports to specific markets under MLFPS earlier.
37. Telecom Equipment‘s, Color TVs, Audio Systems, Optical Media,
Semi-conductors, Capacitors, Resistors, PCBs, LEDs, Conductors,
Desktops and Notebooks shall now be entitled for benefits @ 2% of
FOB value of exports to all markets under FPS instead of their exports
to limited market under MLFPS earlier.
Chapter:- 9 Business Opportunities in Indonesia
98
The infrastructure condition in Indonesia has been in crisis in the last ten
years. The road conditions are either severely congested or poorly
maintained. Indonesia‘s teledensity still lags behind that of its neighbors.
Electricity load shedding is also occurring in Java and Bali while severe power
shortages are experienced in other main islands. The percentage of the
population with access to piped water has actually fallen while water quality
and regularity of service delivery are also declining.
The Infrastructure sector of Indonesia consists of following different Industries.
Each of Such Industries are still facing many problem which are yet to be
sorted out.
[9.1] Roads and railways
The access to road transport is deteriorating due to the insufficient facilities in
the business districts and the lack of availability of road networks in the rural
areas. Like in the road transport, the condition in the railways sector has also
deteriorated in recent years, with available access only in Java and limited
areas in Sumatra. The railways facilities are in poor condition. Many of the
rails, bridges, and signal and telecommunication system have exceeded their
technical age limits. Compared to other transportation modes, the market
share of railways in the transportation sector is very small.
In Indonesia there is no large geographical spread in Roads and Railways in
terms of Village area so, for Indian company Reliance infra is having good
opportunities for increase in their geographical business of Road and
Railways in Indonesia, Because Reliance infra has established presence in
the crucial sectors of Roads and Railways in India.
[9.2] Airports
99
The air transportation in Indonesia, particularly the scheduled domestic air
transport, has recently significantly increased; the quality of air transportation
facilities has lagged behind. Airports management in Indonesia has also
remained below the required international standard of air transportation
operation.
Jet Airways offers relatively low costs by international standards and often
provides economical and discounted airfares, especially on booking through
the Internet. It has been able to lower its costs by 'sweating its assets'. So, for
Jet airways there is a good opportunities in air ways business for Increase in
their income and also for increasing their world market share in air ways
business.
Sea-ports
As far as Sea ports are concerned many non-commercial as well as
commercial ports suffered loss recently although the commercial public ports,
in particular, are defined by their ability to generate their own revenue. To
cover their operational and maintenance cost, the Indonesian government
implements cross subsidy schemes among the commercial ports.
Looking at this we can say that Adani has a good opportunity for developing
its area of business in Indonesia as majority of the country parts are in line
with sea, so there is ample profit available to Adani if they work in Indonesia
and develop some Ports.
[9.3] Telecommunication
The rapid expansion of Indonesia‘s telecommunication sector has resulted in
a significant increase in the industry‘s revenues and Indonesia‘s teledensity,
albeit still lagging behind its regional neighbors. Furthermore, although
telecoms infrastructure coverage has increased, the access has not been
distributed equally across country. In 2010, while the penetration rate in
Metropolitan Jakarta (Jabotabek) region was the highest, around two thirds of
the villages, particularly in eastern Indonesia, still had no access to
telecommunication network.
100
Reliance communication has more than 65 million customers (July 2008). It is
the largest cellular provider in India, and also supplies broadband and
telephone services - as well as many other telecommunications services to
both domestic and corporate customers. The company has covered the entire
Indian nation with its network. This has underpinned its large and rising
customer base. So, Reliance communication having a good strength in Indian
telecommunication market that is why it can go for opportunities for
expanding their telecommunication business network in Indonesia by
providing around two thirds of the villages, particularly in eastern Indonesia,
still had no access to telecommunication network.
[9.4] Electricity
The power sector in Indonesia is a monopoly market, with Perusahaan Listrik
Negara
(PLN—National Electricity Company) as the sole supplier of electricity
There are over 70 million people in Indonesia, mostly the poor, who still do not
have access to electricity. To attain 95 to 98 percent electrification rate just in
Java-Bali, where expanding the electricity access will mainly be within the
existing supply and distribution network, is estimated to need about 13-15
years. Thus, if PLN (or its successor) continues connections at the present
pace, it is estimated that Indonesia‘s overall electrification rate will not meet
100 percent in the near future.
Reliance Energy Limited, It is a India‘s foremost private sector utility with
aggregate estimated revenues of Rs 9,500 crore. Reliance Energy distributes
more than 21 billion units of electricity to over 25 million
So, for power business Reliance Energy Limited has good opportunities in
Indonesia because there is a strong monopoly enjoy by the local player that is
PLN—National Electricity Company. So, Reliance Energy Limited by going in
the Indonesian market to grab a huge opportunity by giving a tough
competition to the Indonesian player who are enjoying the monopoly in energy
business.
Conclusion & suggestions
101
There is wide range opportunities seem in this report by analyzing last
3 to 5 years trade business opportunities.
They need to open up in infrastructure sector and give more licenses to
roads, railways, electricity, Airports, sea-ports. Indonetia‘s stock
exchanges have very few companies are listed must have to
encourage private players to list on their exchange.
Reliance infrastructure is a well-established brand and it also enjoys a
high brand recall among the various foreign companies not operating in
the country at present but most scope is there.
The fact that Reliance infrastructure is the Top companies in the Indian
country also goes down very well with the clients. Most of them are
highly satisfied with the services provided to them.
The growth of the infrastructure in the last few years is a cause of
concern as they offer tough competition.
102
References
1. Reliance infrastructure Annual Report and Accounts 2009-10
2. DATA ON GDP AND ECONOMIC INFORMATION
3. http://www.gfmag.com/gdp-data-country-reports/280-egypt-gdp-country-
report.html
4. Get a FREE subscription to Global Finance magazine
http://www.gfmag.com/subscribe.html
5. http://www.expatforum.com/infrastructure/ infrastructure -in-indonetia.html
6. http://www.sis.gov.eg/En/Story.aspx?sid=840
7. List of languages by number of native speakers in India ( article)
8. Economist Intelligence Unit, 2010
9. Ministry of Economic Development
10. http://www.All conference.com
11. http://www.indo/infra/Wika
12. TreadingEconomics.com; world bank
13. WIKA Ltd, Annual Export
103
Textile Sector
104
Study of Textile Industries In India
Industry Analysis:-
Indian Textile Industry
The textile industry is the largest industry of modern India. It accounts for over 20 percent of industrial production and is closely linked with the agricultural and rural economy. It is the single largest employer in the industrial sector employing about 38 million people. If employment in allied sectors like ginning, agriculture, pressing, cotton trade, jute, etc. are added then the total employment is estimated at 93 million. The net foreign exchange earnings in this sector are one of the highest and, together with carpet and handicrafts, account for over 37 percent of total export earnings at over US $ 10 billion. Textiles, alone, account for about 25 percent of India‘s total forex earnings.
India’s textile industry since its beginning continues to be predominantly
cotton based with about 65 percent of fabric consumption in the country
being accounted for by cotton. The industry is highly localised in
Ahmedabad and Bombay in the western part of the country though other
centres exist including Kanpur, Calcutta, Indore, Coimbatore, and
Sholapur.
The structure of the textile industry is extremely complex with the
modern, sophisticated and highly mechanised mill sector on the one hand
and the handspinning and handweaving (handloom) sector on the other.
Between the two falls the small-scale powerloom sector. The latter two
are together known as the decentralised sector. Over the years, the
government has granted a whole range of concessions to the non-mill
sector as a result of which the share of the decentralised sector has
increased considerably in the total production. Of the two sub-sectors of
the decentralised sector, the powerloom sector has shown the faster rate
of growth. In the production of fabrics the decentralised sector accounts
for roughly 94 percent while the mill sector has a share of only 6 percent.
Being an agro-based industry the production of raw material varies from
year to year depending on weather and rainfall conditions. Accordingly
the price fluctuates too.
India's trade in textiles and its share in world trade can be categorized as
follows:
105
India’s Trade in Textiles (1998)
Type
India's Share in
World Trade
Yarn 22%
Fabrics 3.2%
Apparel 2%
Made-ups 9%
Over-all
2.8%
Top companies in Textile industry in India:
• Bombay Dyeing • Fabindia • Grasim Industries • JCT Limited • Lakshmi Mills • Mysore Silk Factory • Arvind Mills • Raymonds • Reliance Textiles
Compound Annual Growth Rate
(CAGR) of different segments
Type CAGR (1993-98)
Yarn 31.79%
Fabric 9.04%
Made-ups 15.18%
Garment 6.795%
106
SWOT ANALYSIS of Indian Textile Industries
SWOT Analysis of Indian Textile Industry:-
Strengths:
1. Indian Textile Industry is an Independent & Self-Reliant industry.
2. Abundant Raw Material availability that helps industry to control costs and
reduces the lead-time across the operation.
3. Availability of Low Cost and Skilled Manpower provides competitive
advantage to industry.
4. Availability of large varieties of cotton fiber and has a fast growing synthetic
fiber industry.
5. India has great advantage in Spinning Sector and has a presence in all
process of operation and value chain.
6. India is one of the largest exporters of Yarn in international market and
contributes around 25% share of the global trade in Cotton Yarn.
7. The Apparel Industry is one of largest foreign revenue contributor and holds
12% of the country‘s total export.
8. Industry has large and diversified segments that provide wide variety of
products.
9. Growing Economy and Potential Domestic and International Market.
10. Industry has Manufacturing Flexibility that helps to increase the
productivity.
Weaknesses: ‗
1. Indian Textile Industry is highly Fragmented Industry.
2. Industry is highly dependent on Cotton.
107
3. Lower Productivity in various segments.
4. There is Declining in Mill Segment.
5. Lack of Technological Development that affect the productivity and other
activities in whole value chain.
6. Infrastructural Bottlenecks and Efficiency such as, Transaction Time at
Ports and transportation Time.
7. Unfavorable labor Laws.
8. Lack of Trade Membership, which restrict to tap other potential market.
9. Lacking to generate Economies of Scale.
10. Higher Indirect Taxes, Power and Interest Rates.
Opportunities: 1. Growth rate of Domestic Textile Industry is 6-8% per annum. 2. Large, Potential Domestic and International Market. 3. Product development and Diversification to cater global needs. 4. Elimination of Quota Restriction leads to greater Market Development. 5. Market is gradually shifting towards Branded Readymade Garment. 6. Increased Disposable Income and Purchasing Power of Indian Customer opens New Market Development. 7. Emerging Retail Industry and Malls provide huge opportunities for the Apparel, Handicraft and other segments of the industry. 8. Greater Investment and FDI opportunities are available. Threats: 1. Competition from other developing countries, especially China. 2. Continuous Quality Improvement is need of the hour as there are different demand patterns all over the world. 3. Elimination of Quota system will lead to fluctuations in Export Demand. 4. Threat for Traditional Market for Powerloom and Handloom Products and forcing them for product diversification. 5. Geographical Disadvantages.
108
6. International labor and Environmental Laws. 7. To balance the demand and supply. 8. To make balance between price and quality.
109
Duty Structure of Indonesia Country
Duty Structure Accordingly to India basic customs duty on all goods currently
attracting 2% has been increased to 2.5% and basic customs duty on
those goods attracting 3% has been decreased to 2.5%. (S. No. 1 & 2
of Notification No. 21/2011-Cus dated the 1st March 2011)
The Export of goods and services in 2010 in Indonesian was
$44.6billion. U.S. goods exports in 2009 were $5.26billion, up 19.7
present from the previous year. Corresponding U.S. imports from
INDONESIA were $2.4 billion, up 14.5 present. INDONESIA is
currently the 37thlargest export market for U.S. goods. The stock of
U.S. foreign direct investment (FDI) in INDONESIA in 2005 was $4.8
billion, up from $4.1 billion in 2004. U.S. FDI in INDONESIA is
concentrated largely in the mining sector.
Over the past decade, the Government of Indonesia has gradually
liberalized its trade regime and economic policies in general. The
reform process had been somewhat halting until the appointment of
Prime Minister and a new ministerial economic team in 2002. To
maintain its reform momentum, the GOI should continue its efforts to
reduce red tape, reduce corruption, reform the cumbersome
bureaucracy, and eliminate unreasonable and non-science based
health and safety standards.
Sales taxes are levied at rates ranging from 10 present to 30 present.
Excise duty is collected on the imports of gold roman coins, glassware,
wine, medicines, benzene, coffee, cotton yarn, tin/copper, and several
other products.
Imported items are assessed a surcharge to cover inspection, listing,
classification, and re-examination of goods. The applicable rates are 3
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present for goods dutiable at 30 present or less than 6 present for
goods dutiable at more than 30 present.
The Indonesia tax system includes direct taxes, such as corporate
profits tax and income tax on personal income, as well as indirect
taxes, such as sales tax and customs duties.
Corporate Profits Tax – in general this tax is levied on the profits of corporations at a rate of 22% per annum.
Income Tax – direct income tax at a maximum of 22% is applicable to, in particular, the remuneration of directors of joint stock companies and the managers of limited liability companies, interest and foreign dividends. Taxable income from moveable capital must be withheld by the payer.
Sales Tax - sales tax at rates of between 10% and 30% (although most commonly 12%) is applicable on certain goods and services.
Customs Duties – goods imported into Indonesia are subject to customs duties. The rates are usually between 1% and 45%.
Salary Tax – salary tax is levied at a rate of 20% subject to personal allowances. Salary tax must be withheld at source by the employer.
Stamp Duty – stamp duties are levied on most types of documents used or executed in Indonesia.
Document Requirements
Economy of Indonesia
Jakarta's central business district at Thamrin Street, Central Jakarta.
Commercial Invoice
All shipments consignee to Indonesia must be presented to customs with a
valid commercial invoice. The invoice should bear the name and address of
the shipper, place and date of the shipment, name and address of the
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consignee, number and kind of packages, content and weight of each
package, tariff number, marks and numbers.
Certificate of Origin
A Certificate of Origin, (COO) is sometimes requested for verification /
certification of the country of origin of certain commodities. There are many
types of certificate of origin in use, in most cases where trade preference is
not being requested a General Certificate of Origin is used. For qualifying
shipments to ASEAN countries the Form D ASEAN Certificate of Origin
should be used in order to qualify for trade preference (less or zero duty
based on commodity shipped.
Bill of Lading /Airway Bill
A bill of lading / airway bill serves as the transportation authorization that
allows the exporter to designate a carrier or agent to transport goods. The bill
of lading/ airway bill usually indicates the following information: name and
address of the shipper, name and address of the consignee, port of
destination, description of goods, listing of freight and other charges, numbers
of bills of lading in full set, and date and signature of the carrier's official
acknowledging receipt on board of goods for shipment.
In the Union Budget 2010-11 presented in February 2010, the Finance Minister made the following announcements to benefit the textile industry:
The central plan outlay for the industry has been enhanced to US$
1.03 billion. Of this US$ 521.4 million is for TUFS, US$ 76 million for
SITP, US$ 80.2 million for handlooms, and US$ 69.3 million for
handicrafts and US$ 98.4 million for sericulture.
Allocation for textiles and jute industry is US$ 713.4 million.
The total allocation for village and small enterprises sector which
include handicrafts and handlooms is US$ 210.3 million.
US$ 31.5 million has been provided for development of mega clusters
in handlooms, handicrafts and power loom sectors.
Customs duty at 4 per cent for import of readymade garments for retail
sales has been withdrawn.
The micro small medium enterprises in textiles sector have been given
full CENVAT credit on capital goods in one installment in the year of
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receipt of such goods and the facility of payment of excise duty in
quarterly basis.
The Mission is aimed at upgrading the technology and skill levels in the knitwear segment of the textile industry, to bring in more export competitiveness.
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Present Trade barriers for import from India to Indonesia
Present Trade barriers for import from India to Indonesia
India is actively pursuing bilateral/regional Free Trade Agreements.
While Free Trade Agreements would certainly imply a reduction in
tariffs, the gains from such trade would be limited in the presence of
non-tariff barriers.
India has progressively cut duties and taxes since 1991, after it began
switching from a Socialist-style system to a market economy. However,
domestic industry still enjoys relatively high levels of protection in
several areas. U.S. companies face tariff and non-tariff barriers that
impede their exports.
All goods imported into India are subject to duty. There are several
factors that go into calculating customs duty, including:
Basic Customs Duty (BCD): This duty is levied either as 1) a specific
rate based on the unit of the item (weight, number, etc.), or more
commonly, 2) ad-volorem, based on the assessable value of the item.
In some cases, a combination of the two is used.
Additional Customs Duty (ACD): This duty is typically referred to as
Countervailing duty or (CVD) and is levied on the assessed value of
goods plus basic customs duty. Goods that fall into this category are
imported goods that have similar goods manufactured in India.
Special Additional Customs Duty: Earlier known as surcharge, Special
CVD tax is applicable on all items. It is levied at the rate of 4 percent of
the basic and the excise duty on all imports.
Non-tariff barriers can take various forms. Broadly these can be categorised as Under:
Import Policy Barriers
Standards, Testing, Labeling and Certification requirements
Anti-dumping & Countervailing Measures
Export Subsidies and Domestic Support
Government procurement
114
The Multi Fibre Arrangement (MFA)
Developed countries began to feel the pressure of developing countries
becoming GATT members, such as Japan in 1955, and the Multi Fibre
Arrangement (MFA) was formed.
The MFA allowed industrialised countries to apply for quotas to restrict the
amount of textiles and clothing exported from developing countries to the EU
and US. (Quotas restrict quantities of goods that can be imported or
esxported but are most often applied to imports).
115
Company Analysis: Raymond
The Raymond Group was incorporated in 1925 and within a span of a
few years, transformed from being an Indian textile major to a global
conglomerate.
In our endeavor to keep nurturing quality and leadership, we always
choose the path untaken - from being the first in 1959 to introduce a
plywood blend in India to creating the world's finest suiting fabric the
Super 240s made from the superfine 11.6 micron wool.
Today, the Raymond group is vertically and horizontally integrated to
provide customers total textile solutions. Few companies globally have
such a diverse product range of nearly 20,000 varieties of worsted
suiting to cater to customers across age groups, occasions and styles.
We manufacture for the world the finest fabrics - from wool to wool-
blended worsted suiting to specialty ring denims as well as high value
shirting.
After making a mark in textiles, Raymond forayed into garmenting
through highly successful ventures like Silver Spark Apparel Ltd., Ever
Blue Apparel Ltd. (Jeans wear) and Celebrations Apparel Ltd. (Shirts).
We also have some of the most highly respected apparel brands in our
portfolio: Raymond, Raymond Premium apparel, Park Avenue, Color
Plus, Parx and Notting Hill.
The Raymond Group also has an expansive retail presence
established through the exclusive chain of 'The Raymond Shop' and
stand-alone brand stores.
They are today one of the largest players in fabrics, designer wear,
denim, cosmetics & toiletries, engineering files & tools, prophylactics
and air charter services in national and international markets. All our
plants are ISO certified, leveraging on cutting-edge technology that
adheres to the highest quality parameters while also being environment
friendly.
8. 1: Introduction of Raymond Company in India
116
8.2: Group Company
Raymond Ltd.
Raymond Apparel Ltd.
Color Plus Fashions Ltd.
Silver Spark Apparel Ltd.
Ever Blue Apparel Ltd.
Celebrations Apparel Ltd.
J.K. Files & Tools
Ring Plus Aqua Ltd.
J.K. Helene Curtis Ltd.
J.K. Investor Trade (India) Ltd.
8.3: Role of Raymond Company in Indian economy
The speed at which the world economy is moving is truly incredible and
in this fast paced global scenario, the spotlight is on India. The Indian
economy is growing at a rapid pace and the true emergence of the
middle class is what is driving this growth in their domestic market
exponential rate which they have never
seenbefore.Withtheriseininvestmentsintheeconomyanddecreaseincosts
, people's needs have increased in terms of goods and services,
different retail experiences such as malls – all have contributed toward
increasing consumer demand.
India is close to achieving a GDP growth rate of 8% that was projected
by the government for this year. They have optimistic that in the current
scenario, the GDP growth could even touch 10%.
In this environment, The Raymond Group too has grown at a
tremendous pace as made the most of the global opportunities that the
post-quota era presented us while consolidating our business in the
domestic market.
From being one of the most respected textile companies in the world
they are now the world‘s largest vertically and horizontally integrated
manufacturer of worsted suiting fabric - a ‗one stop shop‘ providing
various solutions to our customers across various product categories -
worsted suiting to formal suits, shirting to formal shirts and denim fabric
to jeans wear.
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They have expanded capacity of worsted suiting to 33 million meters
with a new facility at Vapi, Gujarat. In addition to expanding capacity of
our denim fabric facility to 40 million metres, we have joined hands with
UCO NV of Belgium, a leading producer of high end denim to form a
global denim company with a combined capacity of 80 million metres
manufacturing facilities in 3 continents and a global marketing network.
They further expanded our textile business by entering a JV with
Gruppo Zambaiti, a textile major from Italy in the form of a 50:50 JV
with Coton ificio Honegger SPA for setting up of a green field facility in
India for high value cotton shirting fabric. This JV with Gruppo Zambaiti
will help us bring in best of the best technological & design inputs and a
strength of a global marketing network. Our JV with Lani ficio Fedora is
Italy's leading woolen fabric manufacturer for the manufacture of
carded woolen products and a respected name in the global markets
has helped enhance our carded woolen business as well.
They have set up three world class garmenting units near Bangalore –
for the manufacture of formal suits, jeans wear and dress shirts. These
garmenting units will act as forward integration to our textile business
enabling us to offer a complete solution to our customers from fabric to
apparel.
They have also made an initial foray in the auto components industry,
acquiring controlling stake in an auto component manufacturing
company, Ring Plus Aqua Limited. They have also expanded our
existing engineering business through a JV with MOB, France which
will manufacture files and rasps in India for Indian and Global markets.
Through their entire growth and consolidation phase, they have never
lost sight of what makes Raymond great – their strength in innovation
and dedication in developing great products. Raymond proved its
global excellence by being the first Indian company in the world to bid
for the world‘s rarest bale of wool and create the world‘s finest fabric -
Super 230s fabric made of 11.8 micron wool. They also unveiled our
newest innovation 'Expressions' an exquisite collection of wool and
plywood suiting fabric specially crafted using exotic fibers like
Cashmere, Angora, Mohair, Bamboo, Casein- a fiber developed from
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milk protein, Linen, Silk, Soybean, Tinsel blended with Super 120s,
100s Merino Wool and fine polyester.
In keeping with their objective is to provide complete wardrobe
solutions for the Indian male, we unveiled exclusive brand stores for
Park Avenue, Manzoni and Parx. Their acquisition of Color Plus is now
complete. They have also expanded our ‗The Raymond Shop‘ network
and set up an exclusive 10,000 sq foot Flagship store for Raymond.
Raymond also ventured into a new area for the first time with a kids
wear brand Zapp!
Crossing the gender divide two of our brands - Park Avenue and Color
Plus recently launched the Western Women's wear collections. 'Park
Avenue Woman'- a complete range of Premium Business Wear for
women is designed specially for the working women professionals of
today. Color plus Woman'- an exclusive range of smart-casual clothing
is inspired by the independent, discerning and multi faceted women of
today.
8.5: Awards & Recognition
Raymond Made-to-Measure has won the
'Most Innovative Store Design' from ET Retail
Awards 2011.
Raymond has won the 'Most Trusted Apparel Brand 2011' Award from
Economic Times Brand Equity.
The Business world Most Respected Company Award 2011 in the Apparel
& Textile category.
Raymond has been ranked 20th in "The Brand Trust Report, India Study,
2011".
Images Fashion Awards 2009 - Most Admired Textile Brand of the Year
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Reader's Digest - Platinum Trusted Brand, 2008
Lyrca Images Fashion Awards 2008 - Most Admired Textile Brand of the
Year
Lyrca Images Fashion Awards 2008 - Most Admired Suiting Brand of the
Year
CNBC Consumer Award 2007 - The Best Branded Readymade Garment
and Textile.
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Export Profile
Table 1.2. But in total manufacturing, the share of textiles and garment out of
manufacturing output increased from 13.6 % in 1985 to 15.5 % in 1993
(Pangestu, 1997: 47).
Table 1.2. GDP Share by Industrial Sector, 2007 (in %)
Industrial Sector 2007
1. Agriculture, forestry and fishery 16.1
2. Mining and quarrying 9.5
3. Manufacturing industries: 25.6
a. Petroleum refinery 1.4
b. Liquefied natural gas 1.3
c. Food, beverages, tobacco 11.5
d. Textiles, leather products & footwear 2
e. Wood products 1.3
f. Paper & printing 0.8
g. Fertilizers, chemicals & rubber 2.9
h. Cement & non-metalic minerals 0.8
i. Iron & basic steel 0.8
j. Machineries &apparatus 2.7
k. Other manufacturing products 0.1
4. Electricity, gas and water supply 1.2
5. Construction 7.5
6. Trade, hotel and Restaurant 16.7
7. Transportation and Communication 6.8
8. Finance, house rent & business services 7.9
9. Other services 8.6
Total GDP 100.0
121
(Source: Central Bureau of Statistics, Economic Indicators, monthly bulletin,
Jakarta.)
The number of medium and large-scale textile enterprises in 1996
totals 2,050 employing 605,544 workers or 14.4% of total employment
in the manufacturing sector. Employment in the manufacturing sector
increases with 7.95% per annum for the period 1990 - 1996, whereas
in the textile sector at a slightly lower rate with 7.13%.
Number of Firms
It should be mentioned here that there are no reliable data on number of
manufacturing firms, and this includes only medium- and large-scale
enterprises. Data differs according to source, as can be seen between Table
2.1 and Table 2.2 and Table 2.3a below. The latter two tables are consistent.
Table 2.1. Number of Textile Enterprises* in Indonesia, 2003 - 2006
Sector 2003 2004 2005 2006
Fibre 22 23 26 26
Yarn 152 159 170 174
Fabrics 909 947 971 986
Garment 674 705 723 733
Other 466 484 493 502
Total 2223 2318 2383 2421
* Medium- and large-scale enterprises.
(Source: Association of Indonesian Textile Producers, 2010)
Table 2.2. Number of Textile Firms* by Subsector, 2004 - 2010
2004 2005 2006 2007 2008 2009 2010
32111
Spinning
mills
112 143 147 162 155 164 170
122
32112
Manufacture
of threads
17 20 18 23 23 22 18
32113
Manufacture
of finished
yarn
12 9 16 10 13 19 20
32114
Weaving
mills
637 639 676 729 749 834 785
32115
Textile
finishing
98 75 97 97 86 91 86
32116
Textile
printing
32 55 77 48 47 60 67
32117 Batik
printing
275 246 239 250 245 312 327
32121
Manufacture
of made-up
textile
articles
191 176 173 176 171 191 196
32122
Sanitary
textile
articles
19 24 21 23 18 21 24
32130
Knitting
mills
263 237 233 246 312 316 334
Total 1,656 1,624 1,697 1,764 1,819 2,030 2,027
123
* Small, medium and large sized firms
(Source: Central Bureau of Statistics, Industrial Statistics.)
Table 2.3. Size Distribution of Firms in Textiles and Garment,
2010, 2011
(a) Number of Firms by Size
Firm Size Total
Number of
Firms
Small Firms Medium
Firms
Large Firms
ISIC Commodity 2010 2011 2010 2011 2010 2011 2010 2011
35133 Fiber 5 4 3 5 3 2 11 11
32111 Yarn 20 27 31 56 61 79 112 162
32114 Fabric 331 365 211 249 95 115 637 729
32115 Finishing 76 47 18 41 4 9 98 97
32121 Finished
Textile
Goods
141 128 43 35 7 13 191 176
32130 Knitting 186 120 61 83 16 43 263 246
32210 Garment 1.276 1.173 324 366 116 172 1.716 1.711
Total No.
of Firms
2.035 1.864 691 835 302 433 3.028 3.132
(Source: BPS, Survey Industry)
(b) % Employment by Firm Size
ISIC Commodity Firm Size
Small Firms Medium Firms Large Firms
2010 2011 2010 2011 2010 2011
35133 Fiber 7.1 6.9 22.7 38.6 70.2 54.6
32111 Yarn 1.0 1.0 8.0 11.4 90.9 87.6
32114 Fabric 7.7 6.6 26.6 23.3 65.7 70.1
32115 Finishing 23.1 9.8 32.0 38.1 44.9 52.1
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32121 Finished
Textile
Goods
27.5 19.2 38.5 26.4 34.0 54.4
32130 Knitting 18.1 5.9 28.3 19.4 53.6 74.8
32210 Garment 19.4 14.1 30.8 26.8 49.8 59.1
(c) % Value Added by Firm Size
ISIC Commodity Firm Size
Small Firms Medium Firms Large Firms
2010 2011 2010 2011 2010 2011
35133 Fiber 0.7 1.6 1.6 20.7 97.7 77.7
32111 Yarn 0.5 0.6 7.8 11.3 91.8 88.1
32114 Fabric 2.5 2.2 16.5 14.8 81.0 83.0
32115 Finishing 10.1 2.6 15.6 53.1 74.3 44.4
32121 Finished
Textile
Goods
17.5 16.6 37.1 19.5 45.3 63.9
32130 Knitting 17.4 3.9 36.6 19.4 46.0 76.7
32210 Garment 12.5 6.3 28.9 14.2 58.7 79.6
(d) % Exports/Production by Firm Size
ISIC Commodity Firm Size
Small Firms Medium Firms Large Firms
2010 2011 2010 2011 2010 2011
35133 Fiber 0.0 2.5 13.3 6.8 0.0 2.0
32111 Yarn 11.1 5.6 9.7 6.2 9.3 8.4
32114 Fabric 1.6 2.5 5.7 3.3 15.8 19.3
32115 Finishing 1.3 0.0 11.2 8.2 22.5 28.3
32121 Finished 0.7 1.2 10.6 6.0 31.6 22.1
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Textile
Goods
32130 Knitting 5.4 1.5 28.6 24.8 39.7 40.8
32210 Garment 3.8 7.9 27.3 41.9 46.6 62.4
(Source: M.E. Pangestu. 1997. p. 38.)
The number of textile manufacturers in Indonesia, excluding garment firms,
has shown a slow increase within 1990-1996 period, compared to other
industries. It increased from 1,675 firms in 1990 to 2,050 firms in 1996,
consisting of small-, medium- and large-sized firms, or growing at an average
rate of 3.4% per annum.
This slow growth is due to the weakening of the domestic as well as the
international market demand, in particular the slow growth in the garment
industry as user of fabrics.
From Table 2.2 could be seen that most of the textile manufacturers
are in the weaving subsector. They account for 38% of the total
number of firms in the textile industry in 1996. The second largest
subsector is the knitting industry, totalling 334 firms in 1996 or 16% of
total number of textile firms. Next in line is the batik industry with 327
firms in 1996.
Table 2.3a. However, the highest concentration based on the four
largest firms is to be found inthe fibre production subsector with 91% of
total output in 1994. Relatively high concentration is also to be found in
the finishing subsector with 49% and the knitting subsector with 42%.
Table 2.4. Almost 90% of the textile industry is located in Java, and
54.8% are concentrated in West Java alone, and another 17% in
suburban area of Greater Jakarta region. For the garment industry,
high concentration is to be found in West Java, Jakarta and Batam
Island, the latter being a free trade zone. Out of the total of 1,675 textile
firms in 1990, 1,555 or 93% were located on Java and only120 firms
outside Java. The corresponding figures for 1996 were 2,050 firms, of
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which 1,829 or 89% were located in Java and the other 221 outside
Java.
Table 2.5.
Level of Industry Concentration (CR4) in Textiles and Garment,
2009, 2010, 2011
ISIC Commodity Level of Concentration (CR4)
2009 2010 2011
35133 Fiber 0.93 0.88 0.91
32111 Yarn 0.23 0.26 0.31
32114 Fabrics 0.19 0.15 0.27
32115 Finishing 0.64 0.35 0.49
32121 Finished
Textile Goods
0.38 0.37 0.26
32130 Knitting 0.45 0.47 0.42
32210 Garment 0.10 0.26 0.26
(Source: Central Bureau of Statistics, Survey Industry, as quoted by M.E. Pangestu. 1998. p. 19)
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Conclusion:
Indian Textile Industry has large and diversified segments that provide
wide variety of products. Growing Economy and Potential Domestic
and International Market. Industry has Manufacturing Flexibility that
helps to increase the productivity Growth rate of Domestic Textile
Industry is 6-8% per annum. Large, Potential Domestic and
International Market try is an Independent & Self-Reliant industry
.
Availability of Low Cost and Skilled Manpower provides competitive
advantage to industry. Availability of large varieties of cotton fiber and
has a fast growing synthetic fiber industry
Emerging Retail Industry and Malls provide huge opportunities for the
Apparel, Handicraft and other segments of the industry.
Greater Investment and FDI opportunities are available
Hence, Indian textile sector has contribute rapid change in its state. So
therefore, for entering into Indonesian textile industry for business is
the great opportunity that we have. As mention above, the textile sector
is been contributed 6-7% into GDP growth , so it‘s a better opportunity
& strength available to textile for business into Indonesia.
Bibliography http://www.fibre2fashion.com/news/NewsDetails.asp?News_id=8383 http://www.atimes.com/atimes/Southeast_Asia/FH03Ae04.html
128
http://www.postgresql.org/docs/awbook.html
http://www.GlobalBusinessGuideIndonesia.com
http://www.taxtile.com
http://indonesiantextile.com
Agriculture Sector
PART-II AGRICULTURE INDUSTRY SECTOR/ COMPANY/ PRODUCT/
SERVICE
SPECIFIC STUDY
129
TABLE OF CONTENT
Sr. No Particulars Page No.
4
Introduction of the Indian Agriculture industry
4.1 Role of Indian Agriculture Industry
4.2 Importance of Indian Agriculture in Economy
5 Introduction of the Indonesia Agriculture industry
6
Business Activities & Structure of Indonesia & India
for Agriculture sector
7 Policy, Norms, Taxation & Licensing Agreement
8 Trade barriers for Import & Export & Business
Opportunities in India
9 Comparative study of agriculture Industry
8.1 Basant Agri tech ltd
8.2 PT. Sikam Selamban
10 Findings & Conclusions
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4 Introduction of Indian Agriculture Sector:-
Agriculture is the backbone of Indian Economy. About 65% of Indian
population depends directly on agriculture and it accounts for around 22% of
GDP. Agriculture derives its importance from the fact that it has vital supply
and demand links with the manufacturing sector. During the past five years
agriculture sector has witnessed spectacular advances in the production and
productivity of food grains, oilseeds, commercial crops, fruits, vegetables,
food grains, poultry and dairy. India has emerged as the second largest
producer of fruits and vegetables in the world in addition to being the largest
overseas exporter of cashews and spices. Further, India is the highest
producer of milk in the world.
In the Indian sub continent, agriculture has a long history of more than 10,000
years with majority of the population solely dependent on the industry.
Consequently this sector has played a significant role in the overall socio
economic development of the nation. The Annual Report 2009-2010
pertaining to this sector released by the Ministry of Agriculture has revealed
that the total geographical area of India is 328.7 million hectares and about
140.3 million hectares of this is net sown area with 193.7 million hectares
found to be the gross cropped area.
Among all the nations of the world, India is the largest producer of fresh fruits
with some of the top ones in the list including sesame seeds, ginger, turmeric,
fennel, badian, jute, cashew nuts, pulses, mangoes, chillies and peppers.
India has claimed the second largest population of cattle with about 281million
cattle. The country also has reserved the second position in the production of
commodities like cashew, garlic, cardamom, onions, tomatoes, coconut,
cabbage, cotton seed, fresh vegetables, ground nut, wheat, rice sugarcane,
tea, green peas, cauliflower, potato and inland fish.
India has been producing tobacco, coconut, rapeseed and tomatoes in huge
amount entitling itself to be called as the third largest producer of these
products. The Indian Agriculture Research Institute (INRI) established in 1905
has a commendable achievement of bringing about the Indian Green
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Revolution of the 1970s. The Indian Council of Agricultural Research (ICAR)
is today the apex body in agriculture and the connected arena in the country
responsible for looking after all the researches and education in the segment.
The union minister of Agriculture is also the president of ICAR.
Farmers confront the problems of finance. They lack adequate marketing
services for selling their farm produce. However, since agriculture has been
the Indian business handed over by the tradition, the future of agriculture in
the nation is bright.
Major Crops of India:
Rice, Wheat, Sugarcane, Oilseeds, Pulses, Cotton, Jowar, Bajra, Ragi, Tea,
Coffee, Coconut, Cashew, Rubber, Spices, Cauliflower, Onion, Cabbage,
Mango, Banana, Sapota, Acid lime.
4.1The Role of Agriculture in India Economic Development:-
Agriculture constitutes the backbone of the Indian economy. It
contributes around 32 per cent of the national income and
provides employment to 70 per cent of Indian working force.
Further, agricultural product constitutes 50 per cent of our
exports and manufactures with agricultural content (cloth, sugar
and manufactured jute) contributes another 20 per cent of
India's export.
Thus around 70 per cent of our exports consist of agricultural
product. The role of agriculture in the industrial development of
the economy is no less important. Agricultural sector supplies
raw materials to the agro-based industries like sugar, jute,
cotton, ground-nut and oilseeds. Failure of agricultural crops
spells a disaster for the Indian industries.
Agriculture also directly and indirectly provides a market for the
industrial products. Directly, agricultural sector consumes
industrial products like chemical fertilizers, pesticides,
insecticides and small tools and equipments.
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Indirectly, the success in agricultural sector increases the
purchasing capacity of the people to purchase industrial
products.
Thus, agriculture occupies a pivotal position in the Indian
economy. And, a rapid development of the economy depends
on a smooth and sustained growth in the agricultural sector.
4.2 Importance of Agriculture in Indian Economy:-
The following points emphasize the importance of agriculture in Indian
Economy.
1) Share of Agriculture in National Income:-Agriculture has got a
prime role in Indian economy. Though the share of agriculture in
national income has come down, still it has a substantial share in
GDP The contributory share of agriculture in Gross Domestic
Product was 55.4% in 1950-51, 52% in 1960-61 and is reduced to
18.5% only at present. The share of the agricultural sector‘s capital
formation in GDP declined from 2.2% in the late 1999s to 1.9% at
present.
(2) Important Contribution to Employment:-Agriculture sector, at
present, provides livelihood to 65 to 70% of the total population.
The sector provides employment to 58.4% of country‘s work force
and is the single largest private sector occupation.
(3) Important Source of Industrial Development: Various important
industries in India find their raw material from agriculture sector -
cotton and jute textile industries, sugar, vanaspati etc are directly
dependent on agriculture. Handloom, spinning oil milling, rice
thrashing etc are various small scale and cottage industries which
are dependent on agriculture sector for their raw material. This
highlights the importance of agriculture in industrial development of
the nation.
(4) Importance in International Trade:-India‘s foreign trade is deeply
associated with agriculture sector. Agriculture accounts for about
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14.7% of the total export earnings. Besides, goods made with the
raw material of agriculture sector also contribute about 20% in
Indian exports. In other words, agriculture and its related goods
contribute about 38% in total exports of die country.
5 Introduction of Indonesia Agriculture Sector:-
Indonesia is the world‘s largest producer of palm oil as well as a leading
global producer of other high value commodities such as cocoa, rubber and
coffee. The country is rich in fertile land ideal for growing a diverse range of
crops for both export and domestic consumption. However, it is export crops
that have come to dominate land use and employment to take advantage of
peaks in global commodity prices. The country is still heavily reliant on
imports for staple goods such as wheat, soybeans and sugar which have
raised the issue of food security on the national agenda as world food prices
have continued to climb. Improving the productivity of government and
privately owned plantations, in addition to small hold farmers through adoption
of technology and land consolidation is a further issue to contend with that
requires striking a delicate balance in a sector that employs over 40% of the
workforce.
Economic Overview:-
Indonesia‘s economy is going from strength to strength having weathered the
global economic crisis and still managing to post 4.5% GDP growth in 2009
followed by 6.1% in 2010. In 2011, that trend is set to continue with GDP
growth expected to remain steady at around 7% over the coming years
according to investment bank Morgan Stanley.
The Role of Agriculture in Indonesia Economic Development:-
Indonesia can be categorized as an agrarian nation, where the role of
agriculture in Indonesia economy really significant. Agriculture sector in
Indonesia has a role in:
(a) Providing job opportunity for the majority of labor force.
(b) Producing foods for the nation.
(c) Raw material producer for industrial sector, and
(d) Strengthening food security and rural development.
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The role of agriculture becomes more important when Indonesia in the
middle of economic crisis.
Normally, agriculture activities are done in rural area, where most of
Indonesian population stays. That is why agriculture development in
Indonesia can not be separated from rural development at large. The
development of agriculture sector will bring a large impact to the welfare of
rural population.
The farmer with small size of land and landless farmers are those who
also prone to experiencing food insecurity. The decreasing of income or
the rising of food prices is sufficient to make farmers and their families
facing a hardship to get access to enough food.
5 .AGRICLUTURE BUSINESS ACTIVITIES IN INDIA
The Department of Agriculture and Cooperation is responsible for the
formulation and implementation of National policies and programmes aimed at
achieving rapid agricultural growth through optimum utilization of the country‘s
land, water, soil and plant resources.
The Department undertakes all possible measures to ensure timely and
adequate supply of inputs and services such as fertilizers, seeds, pesticides,
agricultural implements and also to provide agricultural credit, crop insurance
and ensure remunerative returns to the farmer for his agricultural produce.
The Department is entrusted with the responsibility for collection and
maintenance of a wide range of statistical and economic data relating to
agriculture, required for development planning, organizing agricultural census,
assisting and advising the States in undertaking scarcity relief measures and
in management of natural calamities e.g. flood, drought, cyclone, etc.
The Department is responsible for the formulation of overall cooperative policy
in the country, matters relating to national cooperative organizations,
cooperative training and education. The Department also participates in
activities of international organizations, for fostering bilateral cooperation in
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agricultural and allied sectors and for promotion of export in agricultural
commodities
STRUCTURE OF INDIA AGRICLUTURE
State Co-operative Bank (SCB)
The structure of the co-operative credit societies in India is three-tiered and
federal in character consisting of Primary Agricultural Credit Societies (PACS)
at the base level, the District Central Co-operative Banks (DCCB) at the
district level and the State Co-operative Banks (SCB) at the state level. SCB
act as the apex bank.
Farming Structure
All those activities in agriculture which are undertaken jointly and which
directly influence the primary process, are included in co-operative farming.
Under this system, all decisions influencing production, partly or completely,
are taken by the co-operative society. These decisions may range from joint
management and planning for particular purpose to the complete control of all
resources.
The main objectives of a co-operative farming society are to:
1.secure increased agricultural production through more intensive programme
of land improvement and agriculture.
2. undertake improved techniques in agriculture and agro-based industries, so
as to make proper utilization of land, manpower, cattle, knowledge and skill of
farmers;
3. ensure suitable and scientific crop planning and rotation of crops.
4. secure increased and regular employment for the members.
5. Provide solutions to the pressing agrarian problems from which the country
is suffering.
AGRICLUTURE IN INDONESIA BUSINESS ACTIVITIES
Major Fertilizer Producers
Indonesia has six fertilizer producing companies including five state
companies under a Holding Company, PT PUSRI as the Leading Company.
PT Asean Aceh Fertilizer was liquidated in 2006, after lying idle starting 2003
over scarcity of gas feedstock supplies.
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Agriculture is key to the economy of Indonesia, where it accounts for 43% of
total employment and directly contributes 15% to the GDP. Despite its
importance and role in the national economy, national food production is still
insufficient to meet the food security needs of Indonesia‘s citizens.
STRUCTURE OF AGRICLUTURE
Vision & Mission
Vision
To be a critical and reliable research institution, an international level center of
excellence in providing information and knowledge in agro-socio- economics,
and proactively offers alternative policy recommendations on agricultural
development.
Mission
To conduct analysis and assessment, in order to produce information and
knowledge in agro-socio-economics, which is the primary product of
ICASEPS?
To produce policy analysis, the activities to process information and science
of the research results to be proposed and considered as agricultural
development policies.
To advocate agricultural development policy to main stakeholders
to develop ICASEPS' institutional capacity building so that ICASEPS is able
to realize its vision and mission in a sustainable manner.
STRUCTURE:
The Department of Agriculture and Cooperation is one of the threeconstituent
departments of the Ministry of Agriculture. The other two Departments of the
Ministry are the Department of Animal Husbandry, Dairying and Fisheries and
the
137
Department of Agricultural Research and Education. The Department
Agricultureand
Cooperation is headed by the Agriculture Minister assisted by a Minister of
State.The
Secretary (Agriculture and Cooperation) is the administrative head
oftheDepartmentandPrincipal Adviser to the Minister on all matters of policy
and administration within theDepartment. The Secretary (Agriculture and
Cooperation) is assisted by a PrincipalAdvisor, four Additional Secretaries,
one Financial Adviser,the AgricultureCommissioner, nine Joint Secretaries,
one Horticulture Commissioner, one AgriculturalMarketing Adviser and one
Economic Adviser.
The Indonesian government supports BPS with a very large statistical
organization.
It has branch offices in 33 provinces. The BPS Central Office consists of four
deputies, one of which is the Deputy of Economic Statistics. Under this
Deputy is the
Directorate of Agricultural Statistics, whose function is to collect data on
agricultural
sector. The Directorate has four sub directorates, namely:
• Sub Directorate of Food Crops Statistics
• Sub Directorate of Horticulture Statistics
• Sub Directorate of Plantation and Forestry Statistics
• Sub Directorate of Livestock and Fishery Statistics
Listed below are the contact persons for the four sub directorates.
• Sub Directorate of Food Crops Statistics:
• Sub Directorate of Horticulture Statistics:
In 2000 agriculture accounted for 17 percent of the GDP. Annual output grew
by 3 percent per year during the early and mid-1990s. Some 17 percent of all
land is under cultivation for field crops or used for plantations. Small farms
produce most of the subsistence crops but also contribute substantial
proportions of the nation‘s rubber and tobacco. Plantation estates produce
rubber, tobacco, sugar, palm oil, coffee, tea, and cacao, mostly for export.
138
Food crops accounted for 59 percent of the agricultural GDP in 1993. Rice is
the major staple food of the country, and the yield in 2001 was 49 million
metric tons. Indonesia was once a larger importer of rice, but in the late 1960s
and 1970s the government introduced improved varieties of rice, increased
the use of fertilizers and pesticides, provided better infrastructure for irrigation,
and improved the systems of farm credit.
Other important crops are cassava, maize, sweet potatoes, coconuts,
sugarcane, soybeans, peanuts, tea, tobacco, and coffee. Rubber is also an
important crop. Livestock raised include cattle, buffalo, pigs, goats, sheep,
and poultry. Indonesia‘s chief agricultural exports include coffee, tea, cocoa,
spices, and natural rubber, but together they account for less than 10 percent
of the country‘s total exports. Large quantities of food are still imported.
7.Overview of Indonesia policy
Indonesia's exports were vital to its economic development, as exports
earned the foreign exchange that permitted Indonesia‘s to purchase raw
materials and machinery necessary for industrial production and growth.
During the 1980s, about 25 percent of domestic production, or GDP, was
exported. Although petroleum was the most important export, other exports
included agricultural products such as rubber and coffee and a growing share
of manufactured exports.
Export earnings also contributed to Indonesia's ability to borrow from world
financial markets and international development agencies. On average,
about US$3 billion per year was borrowed during the 1980s. These
borrowings primarily financed governmentsponsored development projects.
However, increasing interest payment obligations in the late 1980s helped
bring more restraint to government borrowing.
Indonesian economy was one of the fastest growing economy in Asia, but it
was highly impacted by the financial crisis of Asia in 1997. The country has to
face several challenges, like the high external debt and inflation rate. The
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agriculture sector provides about 17% of the GDP and it employs
approximately 44% of the population. It is the only Asian country to be an
OPEC member with a supply of 5% of total OPEC's production.
Agricultural exports
Indonesia‘s major agricultural exports consist of products of tree crops,
including palm and coconut products (33.8 percent), rubber (18.6 percent),
coffee, tea and spices (25.9 percent). Indonesia has also had some success
at diversifying into higher valued fruits and vegetables (5.8 percent). Together,
these four product categories accounted for 84.0 percent of all agricultural
exports in 1998-2000.
Major Exports:
Animal and vegetable oils
Electrical Appliances
Plywood
Textiles
Rubber
Foodstuffs and live animals
Beverages and tobacco
Raw materials, inedible
Mineral fuels, lubricants and related materials
Chemicals
Major Imports:
Machinery And Equipment
Chemicals
Fuels
Foodstuffs and live animals
Beverages and tobacco
Raw materials, inedible
Mineral fuels, lubricants and related materials
Animal and vegetable oils and fats
NORMS OF AGRICULTURE
140
Against this backdrop, this paper aims at highlighting and articulating a host of
major issues and suggesting some policy prescriptions. Section I
enumerates major issues that continue to constrain the growth of Indian
agriculture. Section II recounts the policy intentions relating to agriculture
encapsulated in the recently announced, Common Minimum Program (CMP).
In the light of the assessment of the situation in agriculture and the CMP, the
following two sections, Section III and Section IV offer some policy
prescriptions – both for immediate future as well as for medium-term
consideration.
AGRICULTURAL TAXATION IN INDIA
Agricultural property and some agricultural income were being taxed in the
early 1990s, but the revenue from these taxes was negligible. In the early
1950s, however, land revenue agricultural property taxes were a
significant form of government income, providing just under 10 percent of
the tax revenue of the central, state, and union territory governments. At
the end of the 1980s, that proportion was less than 1 percent because
land revenue had been fixed. For instance, land revenue was an average
of Rs28 per hectare in Kerala and Rs23 per hectare in Uttar Pradesh, the
two states with the highest assessment rates. The national average was
Rs16.50 per hectare. Agricultural property also was subject to stamp
duties and registration fees. (All property transactions have to be made on
official, stamped forms, and registration fees have to be paid to register
transactions.)
Provide project import status with a concessional import duty of 5 percent
for the setting up of mechanised handling systems and pallet racking
systems in ‗mandis‘ or warehouses for food grains and sugar as well as
full exemption from service tax for the installation and commissioning of
such equipment.
Provide project import status at a concessional customs duty of 5 per cent
with full exemption from service tax to the initial setting up and expansion
of Cold storage, cold room including farm pre-coolers for preservation or
141
storage of agriculture and related sectors produce ; andProcessing units
for such produce. Provide full exemption from customs dutyt orefrigeration
units required for the manufacture of refrigerated vans or trucks.
Provide concessional customs duty of 5 per cent to specified agricultural
machinery not manufactured in India;
Provide central excise exemption to specified equipment for preservation,
storage and processing of agriculture and related sectors and exemption
from service tax to the storage and warehousing of their produce; and
Provide full exemption from excise duty to trailers and semi-trailers used in
agriculture.
Concessional import duty to specified machinery for use in the plantation
sector to be, extended up to March 31, 2011 along with a CVD exemption.
To exempt the testing and certification of agricultural seeds from service
tax.
The transportation by road of cereals, and pulses to be exempted from
service tax.
Transportation by rail to remain exempt.
To ease the cash flow position for small-scale manufacturers, they would
be permitted to take full credit of Central Excise duty paid on capital goods
in a single installment in the year of their receipt. Secondly, they would be
permitted to pay Central Excise duty on a quarterly, rather than monthly,
basis.
Tax concessions are proposed to assist the growth of agriculture and
associated industries
Estimated agriculture sector growth at 5.4 per cent during this fiscal year
Export taxes. Syria‘s legislation an agricultural production tax is levied on
all agricultural commodities which are exported. Effectively this constitutes
an export tax.
Generally, this tax ranges between 9.5 and 12% of the production value.
The products can be categorized as follows:
Products on which an production tax of 12% of their average price at the
time of export is levied. This product group includes fresh and processed
vegetables and fruits, olives, olive oil and other products made from olives
(a total of 88 commodities).
142
Products on which an export tax of 9-9.5% of their average price at the
time of exports is levied (see Table A- xx in the Appendix).
LICENSES\CERTIFICATION OF AGRICULTURE SECTOR OF INDIA
143
Trade barriers
Trade barriers are government-induced restrictions on international trade. The
barriers can take many forms, including the following:
Tariffs
Non-tariff barriers to trade
o Import licenses
o Export licenses
o Import quotas
o Subsidies
o Voluntary Export Restraints
o Local content requirements
o Embargo
o Currency devaluation
Examples of free trade areas
North American Free Trade Agreement (NAFTA)
144
South Asia Free Trade Agreement (SAFTA)
European Free Trade Association
European Union (EU)
Union of South American Nations
New West Partnership (An internal free-trade zone in Canada between
Alberta, British Columbia, and Saskatchewan)
Gulf Cooperation Council common market
Indonesia‘s Trade Regulation Agreements
Indonesia is part of many different Trade Agreements with countries around
the world. The largest of these is the General Agreement on Tariffs and
Trades (GATT), which Indonesia joined during the Uruguay round
negotiations from 1986-1993. In 1994 the GATT introduced the World Trade
Organization (WTO), which Indonesia joined in 1996. Due to joining the GATT
Indonesia was required to reduce subsidies and tariffs on imported goods in
the hope to increase world trade and stimulate the world‘s economy.
Indonesia has also joined in different regional agreements such as Asia-
Pacific Economic Cooperation (APEC) and ASEAN Free Trade Area (AFTA).
APEC and AFTA both allow for member economies to grow and strength due
to the decreasing and elimination of tariffs and non-tariff barriers to trade.
These international agreements that Indonesia has entered into have allowed
for many different countries to have easier trade with Indonesia on all matter
of goods. There are however still groups of goods that are taxed by Indonesia
upon entering the country as well as the 2.5% tax on all goods entering the
country.
Break-Down of Imports
Imports into Indonesia are broken down into 4 classifications (A, B, C, and D)
based on the need for the goods. These different classes of goods receive
different duties based on the Harmonized System Code (HS), which
Indonesia adheres to.
145
Class A (0-10% duty) Organic foods, medicines and clothing
Class B (10-40% Duty) most raw materials and spare parts of industry
Class C (50-70% Duty) locally manufactured and produced goods, which
have, import protection
Class D (up to 200% Duty) Items above and beyond that which is needed for
everyday life.
Import Restrictions
Indonesia has few remaining items that are prohibited due to the general
trade agreements it has come to with many countries. According to the Nation
Agency for Export Development (NAFED) imports that are still prohibited
include: agriculture products many of these goods are prohibited from being
imported because they are created within the borders of Indonesia and as
such are viewed as being crucial to economic stability within Indonesia.
Export Restrictions
Indonesia‘s exports are broken-down like Imports are into 4 different groups.
These groups are: items conditional of export regulations, items conditional of
inspection, items unallowable for export, items allowable free for export. A
main restriction inclusive of all goods imported and exported from Indonesia is
the shipping restriction, which states that all good either entering or leaving
the country must be carried on Indonesian vessels. Other restrictions deal
with more specific items. Some plants for both import and export will require
approval from the Ministry of Agriculture before they are allowable. Some
animals may require an inspection from the Indonesian Veterinary Service
146
before import or export is allowable. All food items will require a health
inspection certificate from the country of origin before being allowed into
Indonesia Items produced locally will have to adhere to all import and export
standards and in some cases higher standards.
Import/Export barriers in India
Tariff and non-tariff barriers. In 1991, India initiated economic reforms to tide
over the budget deficit, balance of payments problems and structural
imbalances in several industry sectors of the economy. In successive years,
India has made the trade regime increasingly more transparent. However,
India's tariffs are still high by international standards, and many quantitative
restrictions on imports still exist. These high tariffs and import restrictions
have constrained U.S. firms from selling in this market and U.S. investors
from importing competitive inputs in several industries.
Principles of Restriction
DGFT may, through a notification, adopt and enforce any measure necessary
for:-
Protection of public morals.
Protection of human, animal or plant life or health.
Protection of patents, trademarks and copyrights and the prevention of
deceptive practices.
Prevention of prison labor.
Protection of national treasures of artistic, historic or archaeological
value.
Conservation of exhaustible natural resources.
Protection of trade of fissionable material or material from which they
are derived; and
Prevention of traffic in arms, ammunition and implements of war.
Import Restrictions
147
India has few remaining items that are prohibited due to the general trade
agreements it has come to with many countries. Imports that are still
prohibited include: agriculture products many of these goods are prohibited
from being imported because they are created within the borders of India and
as such are viewed as being crucial to economic stability within India.
Indian fertilizer company information:
Basant Agro Tech India registered a net profit of ` 99.10 lakhs in 2001- 2002.
In 2002- 2003, the net profit stood at ` 85.80 lakhs, in 2003-2004 it was ` 90.41
lakhs, and in 2004-2005, it amounted to ` 122.70 lakh. This shows that the
profit level of the company has risen in the last couple of years. The Basant
agro tech India limited company is a leading fertilizers manufacturing
company in India's western region. The company have a brand name Krishi
Sanjivani and this is a registered trademark. Its fertilizers are sold mainly in
the states of Maharashtra, Chattisgarh, Andhra Pradesh, and Madhya
Pradesh.
Basant Agro Tech India's product portfolio includes fertilizers of various
grades, agricultural inputs, and seeds. The company specializes in the
manufacture of nitrogen, phosphate, potash (NPK) mixture, and granulated
fertilizers. It also has a plant with the capacity of 60,000 TPA. The company is
also quite well-known for its production of single super phosphate for which it
has a production capacity of 83,000 TPA. In 2005, Basant Agro Tech India
manufactured 60,919 MT of SSP fertilizers and 39,194 MT of NPK mixture
fertilizers.
Basant Agro Tech India Limited has registered significant growth in the last
few years. Efforts must be made by the fertilizer industry of private sector in
India and the government of India so that it continues to grow.
Location of Plant Capacity (MTS) Type of Fertilizer
Kaulkhed Akola ( M.S) 60,000 T.P.A.
NPK Granulated Mixed
Fertilizers.
148
Kanheri Akola (M.S ) 1,20,000 T.P.A.
75, 000 T.P.A
Single Super Phosphate
(SSP) powder
SSP/NPK Granulation
Sangli (M.S) 30,000 T.P.A.
NPK Granulated Mixed
Fertilizers.
Hospet ( Karnataka
) 45,000 T.P.A.
Single Super Phosphate
(SSP)
NPK Granulated Mixed
Fertilizers.
Neemuch ( M.P )
75.000 T.P.A
30,000 T.P.A
Single Super Phosphate
(SSP) Powder
NPK Granulated Mixed
fertilizers
Financial Analysis:
Capital Structure - Basant Agro Tech (India) Ltd.
Period Instrument Authorized
Capital
Issued
Capital - P A I D U P -
From To (Rs. cr) (Rs. cr) Shares (nos) Face
Value
Capital
(Rs. Cr)
2010 2011 Equity
Share 25.0 8.4 83627500 1.0 8.4
2009 2010 Equity
Share 25.0 8.4 83627500 1.0 8.4
2008 2009 Equity
Share 25.0 8.4 8362750 10.0 8.4
2007 2008 Equity
Share 25.0 8.4 8362750 10.0 8.4
2006 2007 Equity
Share 10.0 8.0 7962750 10.0 8.0
2005 2006 Equity
Share 10.0 3.2 3185100 10.0 3.2
2004 2005 Equity 10.0 3.2 3185100 10.0 3.2
149
Share
2003 2004 Equity
Share 10.0 3.2 3185100 10.0 3.2
2002 2003 Equity
Share 10.0 3.2 3185100 10.0 3.2
2001 2002 Equity
Share 10.0 3.2 3185100 10.0 3.2
2000 2001 Equity
Share 10.0 3.2 3185100 10.0 3.2
1999 2000 Equity
Share 10.0 3.2 3185100 10.0 3.2
1996 1999 Equity
Share 10.0 3.2 3185100 10.0 3.2
1994 1996 Equity
Share 5.0 3.2 3185100 10.0 3.2
1993 1994 Equity
Share 5.0 .7 660000 10.0 .7
Profit & Loss - Basant Agro Tech (India) Ltd.
Mar'11 Mar'10 Mar'09 Mar'08 Mar'07
12 Months 12 Months 12 Months 12 Months 12 Months
INCOME:
Sales Turnover 168.71 130.74 128.52 109.37 92.41
Excise Duty 0.00 0.00 0.00 0.00 0.00
NET SALES 168.71 130.74 128.52 109.37 92.41
Other Income 0.00 0.00 0.00 0.00 0.00
TOTAL INCOME 168.88 131.58 128.91 109.84 92.87
EXPENDITURE:
Manufacturing Expenses 5.73 4.91 3.98 3.37 2.98
Material Consumed 131.30 97.51 98.81 83.55 71.04
Personal Expenses 3.33 2.52 2.22 1.56 1.26
Selling Expenses 0.00 7.63 7.68 8.11 7.64
150
Administrative Expenses 12.29 4.31 4.00 3.29 2.67
Expenses Capitalised 0.00 0.00 0.00 0.00 0.00
Provisions Made 0.00 0.00 0.00 0.00 0.00
TOTAL EXPENDITURE 152.65 116.88 116.69 99.88 85.59
Operating Profit 16.06 13.86 11.82 9.49 6.82
EBITDA 16.23 14.70 12.22 9.97 7.28
Depreciation 2.95 3.23 2.40 1.77 1.52
Other Write-offs 0.00 0.00 0.00 0.00 0.00
EBIT 13.28 11.47 9.82 8.19 5.76
Interest 6.19 4.93 3.50 2.59 1.74
EBT 7.09 6.54 6.32 5.60 4.03
Taxes 1.02 0.97 0.88 0.61 0.46
Profit and Loss for the Year 6.08 5.57 5.44 4.99 3.57
Non Recurring Items 0.00 -0.0 -0.0 -0.0 -0.0
Other Non Cash Adjustments -0.1 -0.0 -0.0 0.00 0.00
Other Adjustments 0.16 0.08 0.05 0.00 0.00
REPORTED PAT 6.08 5.54 5.43 4.97 3.56
KEY ITEMS
Preference Dividend 0.00 0.00 0.00 0.00 0.00
Equity Dividend 0.59 0.50 0.67 0.50 0.72
Equity Dividend (%) 7.00 6.00 7.99 6.00 8.99
Shares in Issue (Lakhs) 836.28 836.28 83.63 83.63 79.63
EPS - Annualised (Rs)
0.73 0.66 6.49 5.94 4.47
Balancesheet - Basant Agro Tech (India) Ltd.
Particulars Mar'11 Mar'10 Mar'09 Mar'08 Mar'07
Liabilities 12 Months 12 Months 12 Months 12 Months 12 Months
151
Share Capital 9.76 8.36 8.36 8.36 7.96
Reserves & Surplus 39.91 34.68 29.81 25.21 19.13
Net Worth 49.68 43.05 38.17 33.57 27.10
Secured Loans 47.16 32.04 28.46 22.43 15.45
Unsecured Loans 16.66 10.05 9.55 5.01 7.52
TOTAL LIABILITIES 113.49 85.13 76.18 61.01 50.07
Assets
Gross Block 59.02 50.83 48.02 36.61 27.53
(-) Acc. Depreciation 18.22 15.38 12.21 9.93 8.26
Net Block 40.81 35.45 35.81 26.68 19.27
Capital Work in Progress. 4.78 2.98 0.64 0.36 2.84
Investments. 0.04 0.04 0.04 0.04 0.07
Inventories 54.71 40.27 26.00 26.78 15.59
Sundry Debtors 36.81 25.43 20.54 14.66 17.28
Cash And Bank 1.58 2.60 3.17 4.88 4.55
Loans And Advances 10.35 8.87 7.74 5.31 3.89
Total Current Assets 103.45 77.18 57.44 51.63 41.31
Current Liabilities 34.02 28.08 15.45 16.04 11.97
Provisions 1.55 2.44 2.30 1.65 1.44
Total Current Liabilities 35.57 30.51 17.75 17.69 13.41
NET CURRENT ASSETS 67.87 46.66 39.69 33.94 27.90
Misc. Expenses 0.00 0.00 0.00 0.00 0.00
TOTAL ASSETS (A+B+C+D+E) 113.49 85.13 76.18 61.01 50.07
Fertilizer company in Indonesia
Company Profile
PT. Sikam activities are chemicals, water treatment, special chemicals for
petrochemical, fertilizer and sugar factory.
Most of Our Customer is Fertilizer and Sugar Factories in Indonesia since
1985.
152
PT. Sikam also became distributor for Sulphuric Acid and Complex Fertilizer
from one of biggest manufacture in Indonesia for west side part of Indonesia.
Now, PT. Sikam expand their business in Boiler.
PT. Sikam has 2 office : Jakarta and Surabaya.
PT. Sikam provide engineer who has experience more than 20 years and
young engineer who has a good achievment spirit.
[ Buying Categories ]
- Other Inorganic Chemicals >> Chemicals
- Other Organic Chemicals >> Chemicals
- Fertilizer >> Agriculture
- Timber >> Construction & Real Estate
- Water Treatment >> Environment
[ keyword ]
Chemicals , environment , boiler
Registration Date 2006/08/12 (Year/Month/Date)
Buyer / Seller in EC21 Buyer
Business Type Agent
Year established 1998
Employees total 11 – 50
Annual revenue USD 1,000,001 - 2,000,000
Contact Information
Company PT. Sikam Selamban
Address Komp. Wonkitri Indah S-19, Jl. Mayjen Sungkono
Surabaya East Java 60224 Indonesia
Phone 62 - 31 - 5673162
153
Fax 62 - 31 - 5664904
Duty Structure on fertilizer products in India
The Indian fertilizer sector in general and Urea producers in particular have
benefited from increased availability of natural gas while the entire sector also
benefited from timely payment of fertilizer subsidy in cash.
Implementation of partial de-control of fertilizer regime as recommended by
the group of ministers (GOM) to let rates of non-urea fertilizers be determined
by the market will help in product innovation and improved efficiency among
the phosphatic fertilizer manufacturers.
The actual subsidy burden of the government is set to be relatively lower in
FY 2009-10 over the previous year with drastic 48% fall in urea prices, 62%
fall in DAP prices and 23% fall in potassium chloride (Muriate of Potash) in
April 2009-January 2010 over the corresponding previous year period.
But urea prices have hardened from $233.90 per tonne in October 2009 to
$275.75 per tonne in January 2010, while DAP prices have rebounded from
$290.25 in November 2009 to $427.50 in January 2010.
If global prices continue to harden, then the relative benefit of lower fertilizer
subsidy will no longer be available. So, the government cannot postpone the
hike in fertilizer prices for too long.
10. FINDINGS & CONCLUSIONS
The country‘s GDP has been increasing over the years and it reached a
whopping IDR5,613.44tr in 2009, while the share of agriculture, livestock,
forestry and fishery contributed IDR858.25tr or 15.29% of total GDP.
This report also includes the market trends and outlook of Indonesia‘s
agriculture industry. Under the Agriculture Plan, 2010-2014, the government
allocated national budget that amounted to IDR8.17tr to the Ministry of
Agriculture (MOA). In order to become one of the major agricultural
commodity exporters, Indonesia will push for the development in Papua,
154
where expansion works will be carried out on a 1.6mn hectare area located in
Merauke.
Also, this report provides a ranking of the leading players in the agriculture
industry as well as their respective financial highlights. In 2009, the top
players in the country‘s agriculture industry were Sinar Mas Agro Resources &
Technology, Perusahaan Perkebunan London Sumatra, BISI International
and Prasidha Aneka Niaga. And SMART is one of the leading palm-based
companies in the country with net sales that amounted to IDR14,201bn in
2009.
As compare to india the Indonesia fertilizer has a finanacially in these sector
is successful but their achievement in these sector are not in compare to the
Indian fertilizer industry it also includes that a data that included highest in
compare with the the Indonesia that I found to the whole that is founding the
india is the highest in the agriculture & fertilizers sector in compare with the
Indonesia.
The products & services related with the agriculture food products that also is
the most important in comparing in both the countries. That india exported to
the Indonesia of the agriculture related products & also it includes the whole
products & services.in compare with the Indonesian company chakan vegoils
& also is the most important in data finding.
Resources
1. http://www.business.gov/industries/agribusiness
2. http://www.eicc.org/mcc/ag/faqs.html
3. http://www.asf.org.pk/faqs.php
4. http://www.centad.org/relatedinfo22.asp
5. http://india.gov.in/citizen/agriculture/faq
6. http://www.entrepreneurswebsite.com/2011/02/26/agriculture-industry-
of-india/
7. http://india.gov.in/citizen/agriculture/index.php?id=52
8. http://internationalbusiness.wikia.com/wiki/Indonesia's_Import/Export_re
strictions-_AAH
155
9. http://www.rediff.com/money/report/budget-2010-sme-fertilizers-cut-
customs-duty-on-inputs/20100211.htm
10. http://www.gbgindonesia.com/en/agriculture/article/2011/agriculture_ove
rview_of_indonesia.php ,http://www.indianchild.com/agricultural_credit_i
ndia.htm ,http://www.banknetindia.com/banking/budget1019.htm http://t
axguru.in/income-tax/major-highlights-of-union-budget-2010-11.html
11. http://www.cabible.com/forum/showthread.php/75-Indirect-Taxes-Key-
Features
12. http://www.caclubindia.com/articles/key-features-of-budget-2010-2011-
4783.asp
13. http://trak.in/tags/business/2010/02/26/india-budget-highlights-2010-tax-
benefits-direct-indirect/
14. http://www.livemint.com/2010/02/26150449/Key-Features-of-Budget-
201020.html
15. http://www.authorstream.com/Presentation/pratm_18-494439-union-
budget-2010-2011/
16. http://www.asiatradehub.com/indonesia/tradepolicy.asp
17. http://www.caclubindia.com/news/full-exemption-from-excise-duty-to-
trailers-amp-semi-
trailers5708.asp http://agriculture.indiabizclub.com/info/agriculture_mar
keting/role_of_ministry_(policies)
18. http://www.photius.com/countries/india/economy/india_economy_agricul
tural_credit.html http://www.gbgindonesia.com/en/main/overviews/econ
omic_overview.php http://www.emergingmarketsdirect.com/products/Ind
onesia-Transportation-Industry.html
19. http://www.winentrance.com/general_knowledge/Economy/Agriculture-
India.html
156
Tourism Sector
157
TOURISM SECTOR IN INDONESIA AND
EGYPT
158
4.1 National Policy On Tourism in Indonesia
National policy on development of tourism is based on a long-term plan of
development. During the last 32 years, a centralized development policy,
including the tourism, was adopted. As a result, many region of Indonesia
were not optimally and equally developed. The growth of tourism had
been lower than that of neighbouring countries in ASEAN, a surprising
fact when taking into account the richness of Indonesia‗s ―tourist
attractions‖.
Recent development shows increasing efforts by the central government
to work together with the local government to identify, develop and
promote potential tourist destinations other than Bali. Along with the
increasing awareness of nature protections, which will attract special
tourists to visit Indonesia, the government has also introduced regulations
on environment which are related to the sector of tourism, such as:
1. The announcement of the Minister of the Environment, No. Kep-
32A/MENLH/7/1995 regarding Proper Clean River Program
(Prokasih).
2. The announcement of the Minister of the Environment, No: Kep-
52/MENLH/10/1995 on Standard Quality of Liquid Wastes for Hotel
Operations.
3. The announcement of the Head of Environment Control Institution
(BAPEDAL), No: Kep-32/BAPEDAL/05/1997 regarding Clean River
Program, to require hotels to install liquid waste management unit.
4. Programs on Evaluating the Achievements of Business Entities in
implementation of Clean River Program.
159
4.2 Tourism In Bali Island
Compared to the total area of Indonesia, Bali represents only 0.29%. Based
on 1997‘s data, the total population of Bali is about 3.3 million, with a
population density of almost 585 person/sq.km.
However, Bali ranks as the first in terms of popularity among tourist-
destination areas in Indonesia. Bali is internationally known for its dances,
temples, and beaches, which have long been recognized as main tourist
attractions. In 1996 BaIi attracted a total number of around 3 million tourists,
or about 30% of the total number of foreign tourists coming to Indonesia.
Economic Perspective
The Tourism industry -- including transportation, hotel, hospitality, and
travelling services -- is the biggest industry in Bali that provides quality
employment opportunities for the Balinese, and is still one of the fastest
growing sectors in the Island. Employment opportunities have been
provided by small businesses especially in the home industry, supporting
the tourism activities.
Tourism industry is expected to contribute a major portion of GDP in foreign
exchange, which is very much needed at this moment, and to provide 2.6
million, 2.8 million, and 3.4 million employment opportunities in 1996, 1997,
and 1998 respectively. The figures above have shown the important role of
tourism in Bali‘s economy. Most of Balinese are economically depend on
the tourism directly or indirectly.
BALI Tourism Board
Bali Tourism Board (BTB) was established on the 1st of March 2000
formed by nine major Bali tourism associations. With the unstable
business climate hamper the island, BTB is hoped to build and develop
a better and more sustainable tourism industry in Bali.
160
Considering the importance of the tourism industry and the capability of
BTB in associating with government, community, and industry alike, the
Governor of Bali officially recognized BTB on 10 May 2000 as the
picture of a new partnership between the travel industry, the
government, and the local community.
4.3 Tourism Development in LOMBOK Island
Existing
Conditions of Tourism Sector
The Island of
Lombok is located next to Bali. Lombok is currently considered as a very
potential tourist destination area after Bali. It is part of the region of West
Nusa Tenggara Barat. With a total population of 2.6 millions for the whole
province, of which about 6 % is employed in tourism sectors, tourism
activities has contributed an amount about US$ 106 millions, or about 25%
of the local GDP.
In an effort to
develop tourism, the government of West Nusa Tenggara has established
a joint venture company with the private sector called the Lombok Tourism
Development Corporation (LTDC). The plan of this cooperation is to
develop tourism facilities in a total area of 1,250 which consists of hotels,
golf course, business center, and other tourism facilities.
Economic
Perspective: The natural resources of Lombok island has attracted a lot of
investors--domestic as well as foreign ones--in establishing tourism related
industries: hotels, resorts, travel agents, restaurants, etc. Based on data
collected, there are domestic investments amounting to Rs. 362 billion and
foreign investments amounting to USD 2.57 million in hotels, restaurants,
etc. It is also expected that these investments could lead to other activities
beneficial to the local community surrounding them.
161
4.4 Impact of tourism industry on Indonesia’s economy
The issue of whether globalization is beneficial remains controversial.
Knowledge about its effects is only partial, as globalization policies are
often examined without consideration of their interactions with key sectors
of the economy, notably tourism.
General equilibrium model of the Indonesian economy to examine the
effects of globalization via tariff reductions, as a stand-alone policy and in
conjunction with tourism growth. Production increases and welfare
improves, while adverse effects on government deficits and the trade
balance are reduced.
Positive impacts: Tourism expenditures and the export and import of
related goods and services generate income to the host economy and can
stimulate the investment necessary to finance growth in other economic
sectors.
Contribution to government revenues.
Employment creation and generation.
Stimulation of infrastructure investments.
Contribution to local economies and the country as a whole.
Negative impacts:
The direct income for an area is the amount of tourist expenditure that
remains locally after taxes, profits, and wages are paid outside the
area and after imports are purchased; these subtracted amounts are
called leakage.
In most all-inclusive package tours, about 80% of travelers‘
expenditures go to the airlines, hotels and other international
162
companies (who often have their headquarters in the travelers‘ home
countries), and not to local businesses or workers. In addition,
significant amounts of income actually retained at destination level
can leave again through leakage.
163
Tourism development can cost the local government and local
taxpayers a great deal of money. Developers may want the
government to improve the airport, roads and other infrastructure,
and possibly to provide tax breaks and other financial advantages,
which are costly activities for the government.
Increasing demand for basic services and goods from tourists will often
cause price hikes that negatively affect local residents whose income
does not increase proportionately.
Diversification in an economy is a sign of health, however if a country
or region becomes dependent for its economic survival upon one
industry, it can put major stress upon this industry as well as the
people involved to perform well.
The seasonal character of the tourism industry creates economic
problems for destinations that are heavily dependent on it.
4.6 Indonesian Tourism Statistics
Indonesian Tourism Statistics
Year International visitors Average stay (days)
2000 5,064,217 12.26
2001 5,153,620 10.49
2002 5,033 400 9.79
2003 4,467,021 9.69
2004 5,321,165 9.47
2005 5,002,101 9.05
2006 4,871,351 9.09
2007 5,505,759 9.02
2008 6,429,027 8.58
2009 6,452,259 7.69
164
Sector Snapshot – Tourism
Contribution to GDP: 3.2% (Direct)
Number Employed: 8.9 million (Direct & Indirect)
Number of Foreign Tourists: 7 million (2010)
Domestic Tourists: 122 million (2010)
Competitiveness Score: 3.96/6 (WEF, 2011)
Regional Rank: 13/26 (WED, 2011)
Indonesia‘s tourism industry remains one of the country‘s most underexploited
natural resources. Despite having the potential to cater to a broad range of
tourist tastes from luxury beach holidays seekers to cultural and eco-tourists;
tourism numbers have showed limp growth while neighbours have seen
numbers soar.
However, tourists are not venturing beyond Bali and the country as a whole
has failed to build a magnetic brand. The scope for being a major tourism hub
is there; the country is home to some of the world‘s best diving and cultural
heritage sites as well as natural wonders. Yet, there is some way to go in
developing human resource capacity and transportation infrastructure that
would allow the country to meet its full potential.
Indonesia was ranked 81st out 133 countries in the World Economic Forum
Tourism Competitiveness Report for 2009, it has since risen to 74th place in
2011 yet has the scope to be far higher.
With many Western countries still posting travel warnings for Indonesia, it has
been a challenge to get a positive message across. Effectively marketing the
country on the global stage has failed to take hold thus far as few are familiar
with international representations of the country, such as known brands. Still,
the sector has shown resilience in tourism numbers despite these hurdles
which is testament to the natural attributes the archipelagic country has.
165
The 2010 revival of the national airline, Garuda, which had previously been
grounded for a poor safety record and mismanagement, will play a role in
promoting Indonesia‘s image in the immediate future while expanding the
number of long haul routes.
Indonesia‘s main source of tourists comes from the ASEAN, being the fourth
largest receiver in the region. Trends have remained relatively unchanged for
the past 5 years with Singapore, Malaysia and Japan followed by Australia
being the main sources. Numbers of Chinese tourists have been increasing
significantly by 19.54% from 2008 to 2009 and numbers to Bali in particular
were up by 175% in 2010 from the previous year.
India is another emerging tourism source while the United Kingdom remains
the main long haul tourism source followed by France and the Netherlands.
The main destinations within Indonesia include Bali, which received 2.576
million tourists in 2010 or nearly 37% of total arrivals and maintains strong
hotel occupancy rates throughout the year at an average of 59%.
This is followed by Jakarta for both business and leisure travel as well as
other secondary cities in Java such as Yogjakarta which is the ‗spiritual
centre‘ of the island. Other popular destinations include Kalimantan, although
the majority of the existing tourism numbers are accounted for by business
travellers to date.
166
Hotel Occupancy Rate for Selected Provinces & Cities
International Tourist Arrivals by Region of Origin
Tourism numbers have been growing from 5.51 million in 2007 to 5.3
million in 2009 and 7 million in 2010 according to Statistics Indonesia.
These figures have been called into question considering that they count
arrivals of foreign residents and business travellers under one single
category making reliable figures difficult to come by.
167
That being said, tourism numbers are increasing in line with increased
government efforts under the Ministry of Tourism & Culture‘s various ‗Visit
Indonesia‘ campaigns.
The Ministry is aiming to increase tourism numbers to 7.7 million for 2011
under the new ‗Wonderful Indonesia‘ campaign, however building up the
brand and competing with the likes of Malaysia will require significant
investment.
Spending on tourism promotion has increased drastically from $15 million
USD in 2009 to $47 million in 2010 (State Budget 2010) yet it appears as
though the message is still not being received effectively. Indonesia still
has to strengthen its internal capacity in terms of infrastructure to start
building a strong and identifiable brand.
The Minister of Tourism and Culture, Jero Wacik has stated his projections
of 2011‘s 7.7 million tourists that he predicts will bring $8.4 billion USD in
revenues.
Currently, tourists in Indonesia spend significantly less per day at $129
USD compared to other countries in the region while lengths of stay are
also on average shorter at 8.4 days compared to 9.5 for Thailand (Ministry
of Tourism, 2010).
Boosting foreign exchange income as well as domestic tourism spending
will come from developing high end leisure and entertainment facilities
alongside well kept heritage sites and transportation infrastructure.
Organisation and presentation of historical information, artefacts and art
has a lot to be improved upon, while the cultural vibrancy of the country
gives solid foundations on which to start. Improvements in this area will
keep more Indonesians in the country for their vacations while attracting
more high spending tourists from the USA, Japan, Europe, Russia and the
Middle East.
Indonesia has long had a poor record when it comes to air safety although
this is being gradually repaired with the rise of airlines such as Air Asia and
Lion Air as well as Garuda‘s revival (see Indonesia‘s Commercial Airline
Industry).
168
The country‘s international airports are also getting an overhaul in order to
meet future tourism capacity.
Investment projects are being offered to local and international investors
under the PPP scheme such as South Banten, Bali and West Kalimantan
(see Public Private Partnerships).
A high speed rail link from the international airport to Jakarta city centre
and a marina in Bali to receive commercial passenger vessels for marine
tourism are also being offered under the scheme. The improvement in
transportation in infrastructure around the main tourism areas is part of the
Bali – Nusa Tenggara economic corridor, as part of the national master
plan to 2025. This corridor would see Bali remaining as the tourism hub
while offering more direct flights from the island to other tourism clusters in
Java and East Indonesia.
169
TOURISM IN INDIA
In order to develop tourism in India in a systematic manner, position it as a
major engine of economic growth and to harness its direct and multiplier
effects for employment and poverty eradication in an environmentally
sustainable manner, the National Tourism Policy was formulated in the year
2002.broadly, the ―policy‖ attempts to :-
Position tourism as a major engine of economic growth;
Focus on domestic tourism as a major of tourism growth;
Position India as a global brand to take advantage of the burgeoning
global travel trade and the vast untapped potential of India as a
destination;
Acknowledges the critical role of private sector with government
working as a pro-active facilitator and catalyst;
Performance of Tourism Sector India:-
Ministry of Tourism compiles monthly estimates of Foreign Tourist
Arrivals (FTAs) and Foreign Exchange Earnings (FEE) from tourism on the
basis of data received from major airports.
Foreign Tourist Arrivals (FTAs)
FTAs during the Month of December 2010 was 6.55 lakh as compared
to FTAs of 6.46 lakh in December 2009 and 5.34 lakh in December 2008.
There has been a growth of 1.4 % in December 2010 over December
2009 as compared to a growth of 21.0% registered in December 2009 over
December 2008. The decrease in growth rate in December, 2010 as
compared to previous month of 2010 was mainly due to flight disturbances
in Europe and other countries during December, 2010.
FTAs in India during 2010 were 5.58 million with a growth rate of 9.3%
as compared to the FTAs of 5.11 million and growth rate of (-) 3.3% during
2009.
170
The 9.3% growth rate in FTAs for 2010 over 2009 for India is much
better than UNWTO‘s projected growth rate of 5% to 6% for the world during
the same period.
5 Global and Indian Scenario
The GDP growth of 6.8% during the fiscal 2009-10 may allay to some
extent the concerns of slowdown in demand and a resultant negative
impact on the economy. However the rising food prices and high level of
general inflation continues to be a cause for concern and a subject matter
of government and RBTs policies.
When economy expands globally, tourism as an industry develops as
there is more money in the hands of people and they use it for travelling.
India is proving to be one of the most strong markets for travels in the
world.
With a annual GDP growth of 8% plus a domestic movement of over
600 million, India is a dynamic market for travel and tourism.
During the period 2002 to 2009, India witnessed an increase in the
Foreign Tourist Arrivals (FTAs) from 2.38 million to 5.11 million.
Growth rate in FTAs during 2009 fell by 3.3 per cent. The year
witnessed a contraction in global tourism by 4.3 per cent; the deceleration
in India was, therefore, less than that of the scale of global slowdown.
171
Share of India in international tourist Arrivals in world, and Asia & the
pacific region, 1997-2010
Share of top 10 countries of the world and India in international tourist
arrivals in 2010.
172
4 NATIONALITY-WISE FOREIGN TOURIST ARRIVALS IN INDIA, 2008-
2010.
173
South East Asia
Indonesia 19609 20068 26171 0.37 0.39 0.45 2.3 30.4
Malaysia 115794 135343 179077 2.19 2.62 3.10 16.9 32.3
Myanmar 12147 12849 14719 0.23 0.25 0.25 5.8 14.6
Philippines 17222 21987 24534 0.33 0.43 0.42 27.7 11.6
Singapore 97851 95328 107487 1.85 1.84 1.86 -2.6 12.8
Thailand 58065 67309 76617 1.10 1.30 1.33 15.9 13.8
Vietnam 4877 5577 7458 0.09 0.11 0.13 14.4 33.7
Others 7360 1730 2980 0.14 0.03 0.05 -
76.5
72.3
Total 332925 360191 439043 6.30 6.97 7.60 8.2 21.9
East Asia
China(Main) 98093 100209 119530 1.86 1.94 2.07 2.2 19.3
China(Taiwan) 28939 23464 23915 0.55 0.45 0.41 -
18.9
1.9
Japan 145352 124756 168019 2.75 2.41 2.91 -
14.2
34.7
Republic of
Korea
79802 70485 95587 1.51 1.36 1.65 -
11.7
35.6
Others 3044 3883 4896 0.06 0.08 0.08 27.6 26.1
Total 355230 322797 411947 6.73 6.25 7.13 -9.1 27.6
NATIONALITY-WISE FOREIGN TOURIST ARRIVALS IN INDIA, 2008-2010
Country of
Nationality
Number of Arrivals % Share % Change
2008 2009 2010 200
8
200
9
201
0
2009
/08
201
0/09
174
BENEFITS TO INDIA
India's growth rate in tourism is expected to increase, which makes India a
very desirable tourist destination. In 2009, India's growth rate was ranked
the highest of all southeast Asian countries, and travel and tourism
contributed 6 percent ($67.3 billion) to the gross domestic product, which
was expected to increase to $187.3 billion in 2019.
Travel and tourism also contributed over 6 percent of total employment,
which means that as of 2009, about one in every 15 citizens worked in this
service industry. In 2009, over 31 million people were employed in travel
and tourism; this number is expected to increase to over 7 percent by 2019.
Many tourists are attracted to the export industry, which includes gifts,
crafts, textiles, leather, home furnishing, gems and jewelery. With the
increase of tourist visits, the export industry earned $16.9 billion in 2009,
which will increase to $51.4 billion by 2019.
Economic Benefit For Travelers Seeking Medical Care
(Green tea leaf mountains located in the Nilgiri Hills, Tamil Nadu, India)
India benefits from all sections of tourism; however, in 2009, India's
medical tourism earned $2.2 billion of revenue annually. It is estimated that
1 million medical tourists will receive treatment in 2012. Medically insured
patients from all over the world come to India to get medical surgeries,
dental care or holistic and Ayurvedic treatments.
Medical tourism in India provides immediate treatment for low-cost prices at
world-class hospitals. Most treatments cost one-fourth the price compared
with Western prices. For instance, in 2009, open heart surgery cost $6000
in India compared with over $19,000 in the United States.
Travel expenses are needed, but overall expenses are still cheaper than
surgery in the home country. Wellness tourism, which consists of travelers
coming to India for yoga, meditation, naturopathy, spa treatments and
Ayurvedic remedies, is a demanding industry and most well known in the
175
state of Kerala. Delhi, Mumbai, Kerala and Tamil Nadu are the leading
destinations for medical tourism.
Benefits of Eco-tourism For Travelers to India
(Sunset at the beach in Goa, India)
India is well known for its overpopulated, littered streets; however, there is
a pristine aspect of India that many tourists overlook. With 89 national
parks and over 400 wildlife sanctuaries, there are many untouched areas to
explore. Eco-tourism educates travelers on sustainable living and how to
enjoy the natural beauty of the environment through recreational activities.
According to the World Tourism Organization, eco-tourism is the fastest
growing market in the tourism industry, with a 5 percent annual growth rate.
Eco-trips can range from a variety of activities including trekking, biking,
scuba diving, camping, yoga, meditation and volunteering projects. These
allow tourists to experience flora and fauna of the local culture.
Tourists can see how local people live, and eco-tourism provides a positive
experience that recognizes man and nature can function together. "Green
Laws" in India encourage tourists to be conscious of decisions to capitalize
on the economic, environmental and social benefits of tourism. Following
these laws educates tourists not only about how to travel properly but also
about how they can visit sacred areas without disturbing the natural flow of
the ecosystem.
176
At the recent Paris Air Show, Indian companies were among the biggest
spenders, spending a total of US$13 billion on 150 new aircrafts at Le
Bourget. This dramatic expansion in the aviation industry indicates a
spectacular growth in Indian tourism over the past two years, with both
inbound and outbound travel galloping ahead of targets. With tourist inflows
barely dented in the aftermath of the tsunami, India‘s travel industry is
targeting five million visitors this year.
The industry will bask in an annualised real growth rate of 9% over the next
10 years, double the rate predicted for overall world tourism growth and
outpacing China‘s progress (at 8.6%).
Annual overall revenue from India’s travel and tourism industry
will increase to around US$90 billion, from the current US$39 billion,
within 10 years. Over the same period, travel-related jobs will grow by
three million, from 24.5 million – one in 18 jobs will be in the tourism
sector. New opportunities will open in travel-related call centres, airport
handling services and tour agencies.
India is now firmly on the tourists‘ radar, especially around Southeast Asia,
says Mr Kaushnesh Thakur, director of the Singapore office of the Ministry
of Tourism (MIT), India. ―The Indian economy is rapidly expanding and
there are more trade and investment activities. India is being talked about
more. Previously, people around Southeast Asia didn‘t know much about
India.‖
The ―Incredible India‖ tourism marketing campaign for the unprecedented
visitor traffic from offshore and for kick-starting the phenomenal growth in
domestic tourism.
While a yearning for a return to basics, to rediscover simple pleasures and
embrace a unique experience has always been a major incentive to visit
177
India, there‘s more than just ―spirituality tourism‖ driving today‘s record
tourism industry growth,‘ explains the MIT‘s Mr Thakur.
"While the pilgrimage places such as Buddist centres are a big attraction
for visitors especially from Singapore, Thailand, Japan, and Korea – many
regions in India have established themselves as attractive destinations.
They include Kashmir, neighbouring Himachal, and Kerala on the south
coast that is fast gaining its reputation as a premium spa centre offering
popular backwater cruises.
While the Golden Triangle of Delhi, Agra and Jaipur continue to draw large
number of tourists.
―We are seeing more secondary destinations open with the explosion of
inbound and domestic tourism‘‘.
India is also now in the top ranks of incentives and meeting destinations.
Mumbai, for instance, has had 30% growth in business travellers over the
past 18 months.
India was ranked among the top five destinations by 20,000 travellers who
said they would most like to visit when polled for the latest Travellers‘ Pulse
Survey by influential Lonely Planet.
According to the Oxford Economic Forecasting Report for the World Travel
& Tourism Council, the burgeoning middle class in Asia‘s fourth largest
economy is directing more of its spending to travel. An additional US$420
billion is expected to be generated by this group over the next four years.
Personal travel is forecast to grow 9% to US$46.5 billion over 10 years
(from US$19.5 billion). A 7.6% rise in business travel will earn US$5 billion,
double the current take.
Exponential growth will bring major challenges.
One of the most obvious is a looming shortage of expertise – more travel
training centres, for instance, are needed – and hotel rooms in popular
centres such as Kashmir.
But one of the most pressing concerns for agents, notes Sudhir Patil, is
red-hot competition for airline seats.
178
The director of leading Indian agency - Kesari Tours - points out the
country‘s middle class, already numbering 50 million, is fast expanding,
which will put more heat on agents to fulfil burgeoning travel demands.
―Our technology systems, backed by our partners such as Abacus, are
easily meeting the extra demand from more travellers, but agents often
face the issue of not getting enough tickets,‖ said Mr Patil.
But he is confident India‘s open skies policy will increase inbound and
outbound capacity over the next few years.
One of the most visible developments of unprecedented domestic demand
is keener competition in the skies over the sub-continent making it more
convenient and affordable for overseas visitors and domestic travellers to
see more of India.
With MIT confidently predicting India‘s international travel market to grow
50% year-on-year during the current summer period, recent new airways
entrants are aggressively trawling for market share and discretionary travel
dollars.
Jet Airways, India‘s largest domestic carrier has carved out 43% of the
domestic flight market, overtaking veteran national, state-owned Indian
Airlines.
Jet Airways is determined to increase its passenger traffic – domestic and
international – by 15-18% this year. Hence, over the next 30 months, it will
spend US$400m on buying and leasing 17 Boeing aircraft, adding to its
current fleet of 42 planes.
The company‘s confidence was backed in February‘s IPO when 17.27m Jet
shares sold out in 10 minutes.
Price pressure is also coming from low-cost competitors, including Air
Sahara, domestic budget carriers such as Air Deccan, Kingfisher Airlines,
Spicejet and Magic Air. And, waiting in the wings is another future entrant,
Indigo Airlines, which placed an order for 100 A320's at the Paris Air Show.
179
Attempting to get ahead of the competition, Indian Airlines extended its
distribution network by signing an agreement with Abacus in January 2005
giving the GDS access to all Indian Airlines domestic fares.
With this agreement, Abacus-connected travel agencies across India were
booking travel for their customers on Indian Airlines directly from their
Abacus terminals. This agreement has enabled Indian Airlines to save
costs on maintaining their standalone reservation terminals while providing
travel agents with an easier way to access Indian Airlines fares directly
through their Abacus terminals.
Future trends
The real GDP growth for travel and tourism economy is expected to be 0.2
per cent in 2009 and is expected to grow at an average of 7.7 per cent per
annum in the coming decade.
Earning through exports from international visitors and tourism goods are
expected to generate 6.0 per cent of total exports (nearly $16.9 billion) in
2009 and expected to increase to US$ 51.4 billion in 2019.
According to the Ministry of Tourism, Foreign Tourist Arrivals (FTAs) for the
period from January to March in 2009 was 1.461 million. For the month of
March 2009 the FTAs was 472000.The reason for the decline is attributed
to the ongoing economic crisis.
In spite of the short term and medium term impediment due to the global
meltdown the revenues from tourism is expected to increase by 42 per cent
from 2007 to 2017.
The national target of 20 million tourists every year by 2025 seems
ambitious in comparison to the numbers of 2010. However, it is achievable
with improvements in the main areas of transportation, leisure facilities and
human resources which will all contribute to building Indonesia‘s global
image that has long been subject to misconceptions.
180
GUJARAT TOURISM
Gujarat, the seventh largest state in India, located in the western part of
India with a coastline of 1600 km (longest in India).
It is the tenth
most popular state in the country for tourists with annual footfall of 18.9
million tourists. Gujarat is the sole home of the pure Asiatic Lions and is
considered to be one of the most important protected areas in Asia.
BRAND AMBASSADOR- AMITABH BACHCHAN
JINGLE: - ―KHUSHBOO GUJARAT KI...‖
―The inflow of tourist is expected to grow at 25%. Gujarat has also developing
saputara and pavagadh as places for adventure tourism‖
TOURIST SPOTS IN GUJARAT
Pavaghadh
Vadodara
Baroda museum & gallery
in vadodara,
Darbar hall in vadodara,
Eme temple in vadodara,
Champaner in vadodara,
Girnar
Dwarka.
Sura
Modhera
Palitana
Rajkot tourism
Porbandar
Kutch tourism
ONE DECADE OF INFLOWS INTO GUJARAT
YEARS WITHIN
GUJARAT
OTHER
INDIAN
STATES
TOTAL
DOMESTICS
FOREINGER
S/NRI
GRAND
TOTAL
2002-03 46,27,499 14,72,624 61,00,123 65,094 61,65,217
2003-04 59,51,533 19,63,954 79,15,487 65,107 79,80,594
2004-05 58,75,635 16,76,391 75,52,026 59,987 76,12,013
2005-06 82,31,604 22,74,151 1,05,05,755 1,73,122 1,06,78,877
2006-07 95,96,066 25,40,533 1,21,36,599 2,06,729 1,23,43,328
2007-08 1,11,28,306 27,65,749 1,38,94,055 2,28,976 1,41,23,031
2008-09 1,22,85,350 32,27,444 1,55,12,794 2,94,739 1,58,07,533
2009-10 1,30,77,389 36,24,156 1,67,01,545 3,09,702 1,70,11,247
2010-11 1,50,62,228 43,54,641 1,94,16,869 3,95,067 1,98,11,936
CONCLUSION
Indonesia has the world's largest Muslim population. Ethnically it is highly diverse,
with more than 300 local languages.
Indonesia has seen great term oil in recent years, having faced the Asian financial
crisis, the fall of President Suharto after 32 years in office, the first free elections
since the 1960s, the loss of East Timor, independence demands from restive
provinces, bloody ethnic and religious conflict and a devastating tsunami.
In Indonesian, 300 regional languages.
The strengths of the Indonesia are Provide high quality
Life spring has good reputation and brand awareness
Fiscal Constraint.
Surging Working Age Population.
Two Economic Strengths:
supply of energy.
commodity and mining resources
The Strengths of the India are
Specialist marketing expertise
New, innovative product or service
Location of your business
Cost advantage through proprietary know-how
Quality processes and procedures Strong brand or reputation.
In Indonesia international tourist visits are 5,064,217 and in 2009 6,452,259.
And during that period of time international tourist visits in india are 683.3( in million)
and 940.0( in million) respectively.
Percentage share of top 10 countires of the world and india in international tourist arrival
in 2010 at France 8.17, USA 6.35%, china 5.93%, Spain 5.61%, Italy 4.64%, UK 2.99%,
Turkey 2.87%, Germany 2.86%, Malasiya 2.62%, Mexico 2.38%, India 0.59%, others
54.99%
So here India has 0.59% tourist arrivals in India during 2010 and it is the world‘s one of
the top 10 countries where tourist arrival.
The main destinations within Indonesia include Bali, which received 2.576 million
tourists in 2010 or nearly 37% of total arrivals and maintains strong hotel occupancy
rates throughout the year at an average of 59%.
So India is better country than Indonesia for tourist.
References:
http://www.infoplease.com/ipa/A0107634.html
http://www.scribd.com/doc/33325854/PESTEL-Analysis-of-Indonesia
http://www.baliprivatetours.com/new/
http://www.streetdirectory.com/travel_guide/1347/business_and_finance/s
wot_analysis.html
http://fama2.us.es:8080/turismo/turismonet1/economia%20del%20turismo/t
urismo%20zonal/lejano%20oriente/economic%20impact%20of%20tourism
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http://starktourism.com/mt_global_india_and_world.htm
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www.aimsindia.co.in
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