ges education final · zuckerberg, invested usd 50 million in byju’s, an indian education-tech...
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SECTOR PROFILE
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WHY INDIA?01
CHAMPION SECTORS02
PROFILE03
INVESTMENT OPPORTUNITIES04
BUSINESS & REGULATORYENVIRONMENT IN INDIA
05
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WHY INDIA?01
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ADVANTAGE INDIA
Worlds largest democracy with
1.3 billionpeople
Expertise acrossa spectrum of
services
Largecompetitively-priced skilled
talent pool
Large andgrowing domestic
consumermarket
Demonstratedcapability to deliver
high-quality,cost-effective
solutions
Integrated taxstructure
Enablingbusiness
environment
Focus oninfrastructuredevelopment
Access totechnology
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INDIA - A FAVORED INVESTMENT DESTINATION
Fastestgrowing major economy in the world in 2018 and 2019
6th largest economy in the world by nominal GDP and 3rd largest economy globally by PPP
1st rankglobally in inward greenfield FDI inflows in 2016
India ranks 8thin global services exports accounting for 3.4% ofworld trade incommercialservices
Services,
57%
Automobile, 5%
Pharma, 4%
Power, 4%
Others,
26%
Chemicals, 4%
Agriculture17%
Industry22%
Services61%
6.1
60.1Mauritius, 34%
Singapore, 17%
Japan, 8%
UK, 7%
USA, 6%
Netherlands, 6%
Others,22%
India’s GDP is likely to touch US$ 5 trillion by 2025
2.6
4.7
2017 2023
GDP in current prices (US$ Trillion) GVA share of sectors in Fy18
43.2
163.1
27.8
95.7
2004-05 2016-17
Exports
Imports
Services Trade (US$ Billion)
14%
10%
1%
1%74%
Category-wise Services Export (2016-17, % share)
17%
15%
1%1%
66% Travel
Transport
Insurance
G.n.i.e
Miscellaneous*
Category-wise Services Import(2016-17, % share)
Gross Foreign Inflows-FDI (US$ Billion) Top FDI source countries (% share in inflows- Apr’00 to Mar’17)
G.n.i.e- Government not included elsewhere; * includes software, business, financial and communication services
20
04
-05
20
05
-06
20
06
-07
20
07
-08
20
08
-09
20
09
-10
20
10
-11
20
11
-12
20
12
-13
20
13
-14
20
14
-15
20
15
-16
20
16
-17
Sector-wise FDI inflows (% share in inflows-Apr ‘00 to Mar’17)
75
60
45
30
15
0
Source: IMF, FDi intelligence report 2017, RBI, WTO
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GROWTH ENABLERS
Growing domestic consumer base Large, young human capital base
Rising disposable income and urbanization More than 800 million people under the age of 34 years
Urb
an p
op
ula
tio
n (%
of
tota
l)
Pe
r-c
ap
ita I
nc
om
e (
INR
)
18,523
61,855
27.8
31.270000
60000
50000
40000
30000
20000
10000
0
32.0
31.0
30.0
29.0
28.0
27.0
26.0
2001 2011
Urban Population and Per-capita Income
Per capita income Urban population
Per-capita Income data pertains to 2001-02 and 2011-12Source: Census 2011, MOSPI
Size of the workforce (millions)*
37
35
27
1400
1200
1000
800
600
400
200
0
Korea Thailand Japan US Europe China India
2015 2025 (Projected) 2050 (Projected)
49
47
36 77
71
55
213
217
235
492
466
405
1008
984
795 860
985
1145
* Population aged 15-64 yearsSource: United Nations population statistics
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CHAMPIONSECTORS
02
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Transport
& Logistics Healthcare Accounting
& Finance
Construction
& Related
Engineering
Services
Media &
Entertainment
Education
Services Financial
Services
Environmental
Services
Tourism
& Hospitality
IT & ITeS Legal
Services
Communication
Services
((( (((
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INVESTMENT ANNOUNCEMENTS
• In 2016, The Chan Zuckerberg Initiative, the philanthropic body launched by Facebook CEO Mark Zuckerberg, invested USD 50 million in Byju’s, an Indian education-tech startup.
• In 2016, Byju’s Classes’ Think and Learn Pvt. Ltd. secured two deals worth USD 125 million from Sequoia Capital, Times Internet Ltd. and others.
• In 2017, private equity investor KKR has invested around USD 97.1 million in coaching firm Resonance Eduventures Ltd.
• Helion Venture Partners, a USD 605 million Venture Capital firm based in India, invested USD 10 million in Toppr, the online test preparation platform.
• Lightbox, a USD 100 million Venture Capital firm based in Mumbai, is helping in building Indian Tech companies. It has invested in startups like Embibe, one of the most popular EdTech companies.
• In 2017, Dabur India Ltd. opened a skill development centre for women in Dhekidol village in the state of Assam that will provide rural women with improved employment and self-employment opportunities.
Source: Media reports
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PROFILE:EDUCATIONSERVICES
03
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EDUCATION SERVICES IN INDIA
• The education industry in India is estimated to reach USD 144 billion by 2020 from USD 97.8 billion in 2016.
• India has become the 2nd largest market for e-learning after the US.
• Approximately 28.1% of India’s population is in the age group of 0-14 years. This provides a good opportunity for growth in the Education sector.
Source: India Brand Equity Foundation (IBEF)
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BASIC INSTITUTION INFRASTRUCTURE IN TERTIARY EDUCATION IN INDIA
Source: Ministry of Human Resource Development (Government of India), OECD, World Bank and All India Survey on Higher Education (AISHE, 2018).
667 723 760 799 864
30.1
32.3 33.3
34.6 35.7
0
200
400
600
800
1000
26
28
30
32
34
36
38
2012-13 2013-14 2014-15 2015-16 2016-17
Year
No. of Universities and Enrolment
No. of Universities Enrollment
61.5
54.3
49.2
0.6
0.6
0.6
0.58
0.6
0.62
0.64
0
20
40
60
80
2012 2013 2014
Government expenditure per student (as % of GDP per capita)and revenue expenditure (as % of GDP)
Government expenditure per student (% of GDP per capita)
Revenue expenditure (% of GDP)
21.5
23
23.6
24.5
25.2
19
20
21
22
23
24
25
26
2012-13 2013-14 2014-15 2015-16 2016-17
Year
Gross Enrolment Ratio (in %)
23
24
23
22.5
23
23.5
24
24.5
2012 2013 2014
Year
Pupil - Teacher ratio (in %)
Pupil - Teacher ratio
En
rollm
en
t (in
mill
ion
)
No
. o
f U
niv
ers
itie
s
Gro
ss E
nro
llment
Ratio
(in
%)
Go
vt.
exp
en
ditu
re p
er
stu
den
t(%
of
GD
P p
er
cap
ita)
Reve
nu
e e
xp
en
ditu
re (%
GD
P)
Pupil
-Teach
er
ratio
(in
%)
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INBOUND MOBILE TERTIARY STUDENTS TO INDIA AND FOREIGN EXCHANGE (FOREX) EARNINGS (TOP 10, PER YEAR IN 2011-15)
Students abroad: Total number of mobile students abroad : 278,383
Students hosted: Total number of mobile students hosted: 44,766
9,144
4,404
2,756
2,088 1,896 1,479
1,459
1,236 1,185 1,116
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
10,000
Nepal Afghanistan Bhutan Nigeria Malaysia United ArabEmirates
Iran, IslamicRep.
Yemen Sri Lanka Iraq
Average Inbound mobile tertiary students - Top 10 source countries
Inb
ou
nd
stu
den
ts
Source : UNESCO (http://uis.unesco.org/en/uis-student-flow)
In volume terms, India attracts highest
number of students from Nepal, followed by
Afghanistan and Bhutan.
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TOP TEN INDIAN UNIVERSITIES IN TERMS OF FOREIGN STUDENTS’ ENROLLMENT (AS PER NIRF SCORECARD)
Source : NIRF
1 Manipal Academy of Higher Education Karnataka 1834
2 Amity University Uttar Pradesh 1212
3 Symbiosis International University Maharashtra 881
4 S.R.M. Institute of Science and Technology Tamil Nadu 609
5 Vellore Institute of Technology Tamil Nadu 598
6 National Institute of Technology Tiruchirappalli 510
7 Aligarh Muslim University Uttar Pradesh 506
8 National Institute of Technology Warangal 504
9 Anna University Tamil Nadu 494
10 Bharati Vidyapeeth Maharashtra 470
S.No Institutes State Total Number of Foreign students
as per NIRF scorecard
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IMPORTANT OBSERVATIONS ABOUT EDUCATION SERVICES IN INDIA
• Ministry of Human Resource Development is actively encouraging foreign students to come to India for higher education. A portal has been launched recently by the Government of India to connect international students with Indian institutions. The website url is www.studyinindia.gov.in.
• In order to promote exports in education services, network, advertisement, internationally recognized accreditation, and periodic revision of pedagogy are important considerations in attracting foreign students to India.
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INVESTMENTOPPORTUNITIES
04
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WHY INVEST IN EDUCATION SECTOR?
• India is in a demographic sweet spot, with a population of about 500 million in the age bracket of 5 to 24 years (IBEF, 2018). This demands huge investment in education services.
• Education infrastructure is a necessity good. There exists stable demand for education services. Therefore, investment in education is likely to offer higher returns.
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INVESTMENT AVENUES IN EDUCATION SERVICES
• Online platforms for learning are gaining popularity due to increasing internet penetration. This is an important avenue for investment in the education sector.
• Vocational training institutions contribute to human-capital development in the country. Investment in such institutions will augment the development process.
• India’s relative advantages lie in Bachelor’s degree programmes and in Engineering and Science/Technology stream. Further investment in the tertiary education can attract greater foreign students to India.
• India also posits an advantage in various traditional medicine related research and development courses as well as Hindi and Sanskrit programmes. Investment in increasing popularity of such courses seems to be an important growth driver for India’s education sector.
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BUSINESS ®ULATORY ENVIRONMENTIN INDIA
05
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REFORMS FOCUS
Fiscalprudence andaccountability
Integratedtax
regime
Enabling Ecosystem
Servicespush
Job creation and inclusive
growth
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REGULATORY ENVIRONMENT - INDIA
Foreign Investment Framework
• Governed by Foreign Exchange Management Act, 1999
• Progressive liberalization in the policies
• Automatic route (No prior approval requirement) such as railway and road infrastructure
• Approval route (Prior government approval required before setup) such as multi brand retail trading
Foreign Direct Investment (FDI) in India
Evolution of foreign investment regulations
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FDI INVESTMENT ROUTE
Under Automatic Route Prior Approval Route
No requirement of any prior regulatory approval
Filing an intimation with RBI in prescribed format within 30
days of investment
Filing particulars of issue of shares within 30 days of issue
of shares to foreign investors
Filing an intimation with RBI in prescribed format within 30
days of investment
Filing particulars of issue of shares within 30 days of issue
of shares to foreign investors
Required approval from Govt. of India – Considered by respective Administrative Ministry/Department.
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BUSINESS PRESENCE IN INDIA - FORM OF ENTITIES
Establishes local presence
Operates as a foreign company
Foreign Company
Liaison Office Project Office Branch Office Joint Ventures Limited Liability Partnership
Wholly Owned Subsidiary
Key considerations for choosing
investment vehicles
• Commercial considerations
• Regulatory framework (prior approval requirements for Chinese companies)
• Tax considerations
• Cost of operations{
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This Report has been prepared by CII.
IT & ITES