internationalisation of indian business

7/28/2019 Internationalisation of Indian Business

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INTERNATIONALIZATION OF INDIAN BUSINESS


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The term globalization means InternationalIntegration.

It is a process through which the diverse worldis unified into a single society. Opening up of world trade, development of

advanced means of communication,internationalisation of financial markets,

growing importance of MNC's, populationmigrations and more generally increasedmobility of persons, goods, capital, data andideas


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1. Shifting of Agriculture worker to industry sector.

2. Urbanization: People are shifting from rural to urban areas.

3. Opening up of trade market export import boom.

4. Big open saturated market for products.

5. A growing market for high quality and low price product.

6. Gradual increase of organized retail chain.

7. Growing number of Merger and Acquisitions.

8. Lucid license policies for overseas Multinational Corporation.

9. High growth rate is showing economic prosperity in India.

10. Indian Market leaders going global.


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Accountabilityof Global businesses?

Increased gapbetween rich and poorfuels potentialterrorist reaction

Ethical responsibilityof business?

Efforts to removetrade barriers.


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Nike

Dell

Marketing Branding Advertising

Cost down Outsourcing


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New trade pattern:developing countries don't just have to trade their raw materials to the West

and get finished products in return;

can become big-time producers as well.

New production pattern:global product network companies can locate different parts of their production,

research and marketing in different countries


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Growing global markets in servicespeople can now offer and trade services globally -- from

medical advice to software writing to data processing --that could never really be traded before.

W-2, W-4, 1099

bonuses & stockstatements

Indian accountantUS tax payers


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Market economic policies spreading around theworld, with greater privatization and liberalizationthan in earlier decades.

Widespread adoption of democracy as the choiceof political regime.


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Multilateral agreements in trade, taking on suchnew agendas as environmental and socialconditions.

New multilateral agreements for services,intellectual property , communications morebinding on national governments than anyprevious agreements.


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GrowthCustomer Survey


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GDPUSD 590 billion

GDP growth rate9%

Services contribution54%

Balance of Trade

USD (-)46.2 billion

Investment goal

USD 250 billion

2006

Growing Indian Economy

*: ProjectedSource: Economic Times & India Brand Equity Foundation (IBEF)

GDPUSD 1.16 trillion

GDP growth rate9.5%

Services contribution60%

Balance of TradeNegative

balance should increase with

surging imports versus exports Investment goal

USD 305 billion

2008 * GDPUSD 1.36 trillion

GDP growth rate9%

Services contribution

60-65%

Balance of TradeNegativebalance should increase with

surging imports versus exports

Investment goal

USD 370 billion

2010 *


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105 105 135 145 167

103 125204 231

287

682

191237

398453

0

200

400

600

800

1,000

1,200

1999-00 2002-03 2005-06 2006-07 2010*

USDB

illion

Agriculture Indus try Services

Contribution of Services -increased from 48% to 62% andis estimated to contribute 60% by 2010

Growing GDP

*: ProjectedSource: India Brand Equity Foundation (IBEF)


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*: ProjectedSource: Ministry of Commerce & IBEF

83.5

103.1

126.3

155

200

50

90

130

170

210

USDB

illion

2004-05 2005-06 2006-07 2007-08* 2008-09*

Growing Exports


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Source: Ministry of Commerce & IBEF

Growing Imports

111.5

149.1

185.7

210.8

50

100

150

200

250

USD

Billion

2004-05 2005-06 2006-07 2007-08 (Apr-

Feb)


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India's Forex Reserves: 2001-08 (Till 14 March 2008)

54 75

112141 152

199

306

0

50

100

150

200

250

300

350

2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08

(Till 14

March 08)

USDB

illion

Steadily increasing Forex reserves offer adequate securityagainst any possible currency crisis or monetary instability

Increasing Forex Reserves

Source: Reserve Bank of India & India Brand Equity Foundation (IBEF)


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Growing FDI Inflows

* ProvisionalSource: Department of Commerce

8.9

22

30

4.36

0

5

10

15

20

25

30

35

2003-04 2004-05 2005-06 2006-07* 2007-08*

USDB

illio

Electronic equipment,manufacturing and telecom havewitnessed significant FDI inflowIndia is ranked second in ATKearneys FDI confidence index(2007)


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Increasing Per Capita Income

Source: India Brand Equity Foundation (IBEF) & Economic Survey 2007-08

460

797

1021

2000

4000

0

500

1000

1500

2000

2500

3000

3500

4000

U

SD

2000-01 2006-07 2007-08 2016-17 2025


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Major M&A and Investments Announcements in India

USD 1.7 billionPlans to spend on its developmentoperations in India over the next fouryears

USD 2 billionPlans to establish three manufacturingplants to produce photo-voltaic units

USD 12 billionPOSCO to invest in building steelmanufacturing plants and facilities inIndia by 2016

Source: India Brand Equity Foundation (IBEF)
http://www.signetsolar.de/index.htmhttp://en.wikipedia.org/wiki/Image:Microsoft_logo.png


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Main sectors:

Main Destinations:China, UAE, UKNorth America is emerging as a destination.

India Inc. Investing Overseas

Auto Components IT

Beverages Metals

Cosmetics Mobile Communications

Energy

Pharmaceuticals Financial Services Software

Industrial Goods


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Additional economic indicators: India has a consumerbase of 1.14 billion people

India is the 4th largest economy in the world when measured by PPP

Indias has a growing middle class of over 300 million people - 30% of

Indias population and larger than the population of the US

India is the 3rd largest global telecom market. The mobile subscriber base

has grown from 0.3 Million in 1996 to over 250 million currently.

India is likely to add over 200 shopping malls by 2010 and 715 malls by

2015

The number of billionaires in the country were 3 in 1999; 23 in 2006; and

are 48 currently.


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Major Items Exported to USA (2006)

Textiles

36%

Engineering

Goods &Machinery

15%

Organic

Chemicals

6%

Iron & Steel

5%Cut and

polished

diamond &jew ellery

38%

Source: US Department of Commerce


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Major Items Imported from USA (2006)

Fertilizers

9%

Optical & Medical

Instruments

11%

Precious stones &

Metals

14%

Aircraft, Aviation

Machinery & parts

25%

Engineering

Goods &

Machinery41%

Source: US Department of Commerce


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Buyer Acquisition Price

Reliance Industries Flag Telecom, Bermuda US$ 212m

Tata Motors Daewoo, Korea US$ 118m

Infosys Technologies Expert Information Services, Australia US$ 3.1m

Bharat Forge Carl Dan Peddinghaus, Germany N/A

Ranbaxy RPG (Aventis) Laboratories, France N/A

Wockhardt CP Pharmaceuticals, UK US$ 18m

Cadila Health Alpharma SAS, France US$ 5.7m

Hindalco Straits Ply, Australia US$ 56.4m

Wipro NerveWire Inc, USA US$ 18.5m

Aditya Birla Dashiqiao Chem, China US$ 8.5m

United Phosphorus Oryzalin Herbicide, USA US$ 21.3m

"Toyota Motor haschosen to source fromIndia due to itscompetitive cost ofmanufacture,availability ofabundant engineering

talent, and strongindigenous machinetool."


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Automotive Sector - Overview India is the worlds:

2nd largest two-wheeler market,

4th largest commercial vehicle market

11th largest passenger car market.

Expected to be the 7th largest

automobile market by 2016

India has become an attractive

destination for global American,European,Japanese andKorean OEMs.

Source: IBEF, Economic Times


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1990 FDI $ 234 Million

1998-2003 FDI $ 2.5 Billion Per Year

Target FDI $ 10 Billion Per Year Over 620 FIIs Compared to 500 in 2003 and Earlier

China FDI & FII

FDI $ 50 Billion Per Year

FII $ 20 Billion Per Year
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Agriculture acquired 17% of Indias GDP in2008.

60% of population still depends onagriculture for their livelihood.

Occupied 43% of Indias geographical areas.

All other sectors are growing at much faster.
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Year Industry(%) Service(%) Agriculture(%)1991 25 31 44

2007 28 55 17
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Current Literacy rate is 64.84%Year Literacy Rate Male -

Female

Person Male Female Gap

1981 43.6 56.4 29.8 26.6

1991 52.2 64.1 39.3 24.8

2001 65.4 75.8 54.2 21.6
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"India has a fantastic pool of

software professionals. Theworld needs to benefit fromthis.

Bill Gates,MicrosoftChairman

This market (India) is criticalto our plans for building aFord Motor Co. for the 21st

century

Bill Ford,Chairman andCEO

India on its way to becomingIT, manufacturing kingdom of

the world

The dynamism shown by Indiain the last 15 years is

phenomenal

Mr Yasukuni Enoki,Japanese Ambassador

to IndiaPaul Wolfowitz,

President, World Bank

What are people talking about India?


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High growth but problem of unemployment.

Need to generate 10 million jobs per year.

Multi party rule, hence need to accommodate

political ideology with economic reality(reservation, labour law reforms).


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1) Unequal distribution of wealth disparity in income.

2) Rapid privatization government driven public sectorunits are on sale.

3) Uneven growth in respect of different sectors.

4) Extreme mechanization is reducing demand for manuallabours.

5) Both employee and consumer exploitation are on rise byprivate sector.


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internationalisation of indian business

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