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INDIAS SHARE

IN

WORLDECONOMY

Linking INDIA to World Economy

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INDIA:1991 TILL NOW..

Until 1991, all Indian governmentsfollowed protectionist policies that wereinfluenced by socialist economics.Widespread state intervention and

regulation largely walled the economy off fromthe outside world. An acute balance of paymentscrisis in 1991 forced the nation to liberalise itseconomy; since then it has slowly moved towardsa free-market system by emphasizing bothforeign trade and direct investment inflows.India's recent economic model is largelycapitalist.
http://en.wikipedia.org/wiki/Protectionismhttp://en.wikipedia.org/wiki/Protectionismhttp://en.wikipedia.org/wiki/Licence_Rajhttp://en.wikipedia.org/wiki/Licence_Rajhttp://en.wikipedia.org/wiki/Licence_Rajhttp://en.wikipedia.org/wiki/Licence_Rajhttp://en.wikipedia.org/wiki/1991_India_economic_crisishttp://en.wikipedia.org/wiki/1991_India_economic_crisishttp://en.wikipedia.org/wiki/1991_India_economic_crisishttp://en.wikipedia.org/wiki/Economic_liberalisation_in_Indiahttp://en.wikipedia.org/wiki/1991_India_economic_crisishttp://en.wikipedia.org/wiki/Economic_liberalisation_in_Indiahttp://en.wikipedia.org/wiki/1991_India_economic_crisishttp://en.wikipedia.org/wiki/Economic_liberalisation_in_Indiahttp://en.wikipedia.org/wiki/Economic_liberalisation_in_Indiahttp://en.wikipedia.org/wiki/Economic_liberalisation_in_Indiahttp://en.wikipedia.org/wiki/Economic_liberalisation_in_Indiahttp://en.wikipedia.org/wiki/Economic_liberalisation_in_Indiahttp://en.wikipedia.org/wiki/Economic_liberalisation_in_Indiahttp://en.wikipedia.org/wiki/1991_India_economic_crisishttp://en.wikipedia.org/wiki/1991_India_economic_crisishttp://en.wikipedia.org/wiki/Licence_Rajhttp://en.wikipedia.org/wiki/Licence_Rajhttp://en.wikipedia.org/wiki/Protectionism

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At present India is the 2nd most preferabledestination for Foreign Direct Investment(FDI).

Core areas of development are: Tele communication,IT, Auto-components, Chemicals, Apparels andJewellery.

India has become more liberal and open now.

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INDIA AS AN ECONOMYA C C O R D I N G T O T H E I N T E R N A T I O N A L M O N E T A R Y F U N D , A S O F2 0 1 1 , T H E I N D I A N E C O N O M Y I S W O R T H U S $ 1 . 6 3 1 T R I L L I O N ; I TI S T H E N I N T H - L A R G E S T E C O N O M Y B Y M A R K E T E X C H A N G E R A T E S .T H E 4 6 7 - M I L L I O N W O R K E R I N D I A N L A B O U R F O R C E I ST H E W O R L D ' S S E C O N D - L A R G E S T .M A J O R I N D U S T R I E S I N C L U D E T E X T I L E S ,T E L E C O M M U N I C A T I O N S , C H E M I C A L S , F O O D P R O C E S S I N G , S T E E L ,T R A N S P O R T E Q U I P M E N T , C E M E N T , M I N I N G , P E T R O L E U M ,M A C H I N E R Y , A N D S O F T W A R E . I N D I A W A S T H E W O R L D ' S F I F T E E N T H - L A R G E S T I M P O R T E R I N2 0 0 9 A N D T H E E I G H T E E N T H - L A R G ES T E X P O R T E R .W I T H 7 O F T H E W O R L D ' S T O P 1 5 I N F O R M A T I O N T E C H N O L O G YO U T S O U R C I N G C O M P A N I E S B A S E D I N I N D I A , T H E C O U N T R Y I SV I E W E D A S T H E S E C O N D - M O S T F A V O U R A B L E O U T S O U R C I N GD E S T I N A T I O N A F T E R T H E U N I T E D S T A T E S .
http://en.wikipedia.org/wiki/Labour_in_Indiahttp://en.wikipedia.org/wiki/List_of_countries_by_labour_forcehttp://en.wikipedia.org/wiki/List_of_countries_by_importshttp://en.wikipedia.org/wiki/List_of_countries_by_exportshttp://en.wikipedia.org/wiki/List_of_countries_by_exportshttp://en.wikipedia.org/wiki/List_of_countries_by_exportshttp://en.wikipedia.org/wiki/List_of_countries_by_exportshttp://en.wikipedia.org/wiki/List_of_countries_by_exportshttp://en.wikipedia.org/wiki/List_of_countries_by_exportshttp://en.wikipedia.org/wiki/List_of_countries_by_importshttp://en.wikipedia.org/wiki/List_of_countries_by_importshttp://en.wikipedia.org/wiki/List_of_countries_by_importshttp://en.wikipedia.org/wiki/List_of_countries_by_importshttp://en.wikipedia.org/wiki/List_of_countries_by_importshttp://en.wikipedia.org/wiki/List_of_countries_by_labour_forcehttp://en.wikipedia.org/wiki/List_of_countries_by_labour_forcehttp://en.wikipedia.org/wiki/List_of_countries_by_labour_forcehttp://en.wikipedia.org/wiki/List_of_countries_by_labour_forcehttp://en.wikipedia.org/wiki/List_of_countries_by_labour_forcehttp://en.wikipedia.org/wiki/Labour_in_Indiahttp://en.wikipedia.org/wiki/Labour_in_Indiahttp://en.wikipedia.org/wiki/Labour_in_Indiahttp://en.wikipedia.org/wiki/Labour_in_Indiahttp://en.wikipedia.org/wiki/Labour_in_India

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India's consumer market, currently theworld's thirteenth-largest, is expected to become fifth-

largest by 2030.

Driven by growth, India's nominal GDP per capita hassteadily increased from US$329 in 1991, when

economic liberalization began, to US$1,265 in 2010,and is estimated to increase to US$2,110 by 2016.

According to a 2011 PwC report, India's GDP atpurchasing power parity will overtake that of theUnited States by 2045.
http://en.wikipedia.org/wiki/List_of_largest_consumer_marketshttp://en.wikipedia.org/wiki/GDP_per_capitahttp://en.wikipedia.org/wiki/GDP_per_capitahttp://en.wikipedia.org/wiki/List_of_largest_consumer_marketshttp://en.wikipedia.org/wiki/List_of_largest_consumer_marketshttp://en.wikipedia.org/wiki/List_of_largest_consumer_markets

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Goldman Sachs predicts that China and India, respectively,will become the dominant global suppliers ofmanufacturedgoods and services

India is a part of BRICS which encompasses over 25% of theworld's land coverage and 40% of the world's population andhold a combined GDP(PPP) of 18.486 trillion dollars.

Goldman Sachs predicts that "from 2007 to 2020, India'sGDP per capita in US$ terms will quadruple", and that theIndian economy will surpass the United States (in US$) by2043.[18] Despite its present low Nominal real GDP Per Capitalevels, India is now aiming to go past $ 4,500 threshold by

2020 & thereby achieving Upper-Middle Income countrystatus. Many analysts predicts that India would emerge as ahigh-income economy during 2025-30
http://en.wikipedia.org/wiki/Manufactured_goodhttp://en.wikipedia.org/wiki/Manufactured_goodhttp://en.wikipedia.org/wiki/Service_(economics)http://en.wikipedia.org/wiki/Manufactured_goodhttp://en.wikipedia.org/wiki/Manufactured_goodhttp://en.wikipedia.org/wiki/Service_(economics)http://en.wikipedia.org/wiki/Gross_domestic_producthttp://en.wikipedia.org/wiki/Gross_domestic_producthttp://en.wikipedia.org/wiki/United_Stateshttp://en.wikipedia.org/wiki/BRIChttp://en.wikipedia.org/wiki/United_Stateshttp://en.wikipedia.org/wiki/BRIChttp://en.wikipedia.org/wiki/BRIChttp://en.wikipedia.org/wiki/United_Stateshttp://en.wikipedia.org/wiki/Gross_domestic_producthttp://en.wikipedia.org/wiki/Service_(economics)http://en.wikipedia.org/wiki/Manufactured_goodhttp://en.wikipedia.org/wiki/Manufactured_good

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INDIAS

CONTRIBUTION

TO

WORLD ECONOMY

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Indias Contribution to Worlds Economy


Government Intervention

Major improvements in educational standards acrossIndia.

In the late 80s the government led byRajiv Gandhieased restrictions on capacity expansion for

incumbents, removed price controls and reducedcorporate taxes. While this increased the rate ofgrowth, it also led to high fiscal deficits and a

worsening current account.

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Public Receipts

The tax reforms, initiated in 1991:

(a) Reducing the rates of individual andcorporate income taxes, excises, customs andmaking it more progressive

(b) Reducing exemptions and concessions .

(c) Simplification of laws and procedures.(d) Introduction of PAN to track monetary

transactions.

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Public Receipt

Tax receipts of Centre & State amount to

approximately 18% of national GDP.

limited resources of Government affect its ability topay fair wages to public servants. This may well bethe cause of endemic corruption at all levels ofgovernment.

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Physical Infrastructure

India's low spending on power, construction,

transportation, telecommunications and real estate,at $31 billion or 6% of GDP in 2002 had preventedIndia from sustaining higher growth rates.

India holds 2nd position in the world in roadways'construction, more than twice that of China.

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Agriculture Sector

Agriculture & allied sectors like forestry logging andfishing accounted for 16.6% of the GDP in 2007.

2nd largest world-wide in farm output.

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Industry

India is 14th in the world in Factory Output.

Account for 27.6% of the GDP and employ 17% of thetotal workforce.

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Service Sector

India is 15th in service output.

It provides employment to 23% of work force, and itis growing fast, growth rate 7.5% in 19912000 upfrom 4.5% in 195180.

Contribution of IT to GDP increased to 4.8 % in2005-06 and is projected to increase to 7% of GDP in2008.

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INDIASECONOMIC STABILITY

ANDPOSITIONS IN GLOBAL MARKET

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According to Forbes Global2000 ranking for 2011,

Five leading companies are:ForbesRank

CompanyName

Industry Sales Profits AssetsMarket

Val

121RelianceIndustrie

s

Oil & Gas

Operations

34.03 4.87 43.61 35.95

150

StateBank ofIndiaGroup

Banking 22.63 2.23 255.86 12.75

152Oil &NaturalGas

Oil & GasOperations

24.04 4.95 35.35 28.91

207IndianOil

Oil & GasOperations

51.66 1.97 33.64 10.2

317 NTPC Utilities 9.63 1.86 24.58 29.7

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Emerging Market Growth : 1980 200617

China

India

Japan

Korea

Taiwan

United StatesEuro Area

-

300

600

900

1,200

1,500

1,800

2,100

2,400

2,700

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

(1980 = 100)

PPP adjusted GDP ($ bn)

Emerging economies amongst the fastest growing

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GDP Growth in Current YEARS


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Contribution to GDP growth


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Balance of Payments


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FDI LIMITS IN INDIA


INSURANCE: 26% TELECOMMUNICATION: 49%

TRADING: 51%

POWER: 100% BPOS: 100%

DRUGS: 100%

ROAD,HIGHWAYS: 100%

POLLUTION CONTROL: 100% NBFC: 49%

RETAIL: 100%(RECENTLY CHANGED FROM 51%)

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PROSPECT

OF

INDIA

IN

INTERNATIONAL MARKET

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Exports:traditional goods remain dominant but theirshare has declined sharply.

Though traditional goods registered the slowest growth

rates during 1992-2004 (less than10%) and their share has declined sharply, they stillaccounted for more than 50% of exports in 2004.

Food represented 10% in 2004, compared to 34% in1980, and textiles 20%, compared to 28% in 1980.

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Imports show the extent of Indias integration into theworld market.

Electronics and textiles have increased as a share oftotal imports, indicating a certain degree of productive

integration, since imports of such goods werepractically non-existent in 1980.

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US has retained its top position.

while China was ranked 2nd ,

a survey carried out by the Association of ForeignInvestors in Real Estate (AFIRE) said. China moved tothe 2nd position, garnering 21.4 % votes and displacingIndia in the process, which was preferred only by 16.7%of the respondents favoring the country as the mostfancied place for real estate investment.

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Major M&A and Investments Announcements in India

USD 11 billionVodafone buys Hutch

USD 1.7 billionPlans to spend on its development operations

in India over the next four years

USD 12 billion

POSCO to invest in building steel

manufacturing plants and facilities in India by

2016

Plans expansion of cement capacity in IndiaOver USD 1 billion

Plans investment in private equity, real estate,

and private wealth managementUSD 1 billion

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Indian firms seek global reach

Tata Steel boughtCorus Plc

Hindalco acquired

Novelis Inc.

Suzlon Energy Ltd.acquired REpower

Dr. Reddysacquired Betapharm

United spirits

acquired W&M

USD 12.1billion

USD 6

billion

USD 1.6billion

USD 0.5billion

USD 0.5billion

Acquisition made Tata Steel worlds

fifth largest steel producer globally

Acquisition made Hindalco the worllargest aluminum rolling company

Acquired Germans third largestgeneric companies

Acquisition made United Spirits world'ssecond largest spirit company

Acquisition made Suzlon world's thir

largest wind power company

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INDIAAS A KEY PLAYER:ITS STRENGTHS

AND

WEAKNESSES

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Indian Workers in Overseas

38% of Doctors in America

are Indians.

12% of Scientists in

America are Indians.

36% of NASA employees

are Indians.

13% of XEROX employees

are Indians.

34% of MICROSOFT

employees are Indians.

28% of IBM employees

are Indians.

17% of INTEL

employees are Indians.

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Evaluation

Strengths

Sustained growth for over a decade(but recent slowdown)

Strong export potential,

Healthy forex reserves

Low external debt Low inflation

Political consensus on reforms

Deepening financial sector

Knowledge base advantage,demographic surge

Weaknesses

Debt GDP ratio high

Inadequate infrastructure, hugefunding needed

Unsatisfactory investment climate

Rising gap between rich and poor

Dependence on oil imports,monsoons

Huge Population growing year byyear

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31

BRIC Report,

Goldman Sachs

I have never seenIndia so dynamic,

vibrant and full ofbusiness

opportunities.

-Dan Scheinman, Cisco

System Inc. as told to

Business Week, August 2005

We came to India forthe costs, stayed for the

quality and are nowinvesting for innovation.

John Redwood

Economic

Competitiveness Policy

Group, UK

India is now truly a

land of opportunity.

Jack WelchGeneral Electric

India is adeveloped country

as far as intellectualcapital is

concerned.

Peter Loescher

President and

Chief Executive

Siemens

By 2032, India will beamong the three

largest economies in

the world.

Why India? Quote Unquote

Travyn

Rhall,ACNielsen

The Indian market has twocore advantages - an increasingpresence of multinationals andan upswing in the IT exports.

Craig Barrett

Intel

Corporation

India has evolved intoone of the world's

leading technology

centers.

Mr Paul de Voijs

Managing DirectorVolvo Car India

India is a very excitingmarket and the luxurycar segment is growing

exponentially here.

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C O M P A R I S I O N O F B R I C S C O U N T R I E SR A N K S A S O N 2 0 1 1

CATEGORY BRAZIL RUSSIA INDIA CHINA AFRICA

AREA 5 1 7 3 25

POPULATION 5 9 2 1 25

LABOUR

FORCE

5 7 2 1 34

GDP(NOMINAL)

7 11 10 2 28

EXPORTS 18 11 16 1 36

IMPORTS 20 17 11 2 34

RECEIVEDFDI

11 12 29 5 31


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FOREXRESERVES

7 3 6 1 33

EXTERNALBEBT

28 24 26 23 45

RAILNETWORK

10 2 4 3 12

ROADNETWORK

4 8 3 2 18

NO OFINTERNETUSERS

5 7 4 1 44

NO OF MOBILEUSERS

5 4 2 1 25

MOTORVEHICLEPRODUCTION

6 19 7 1 24

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.. And can help transform India

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