1. IRVING FISHER GROUP
INDIAN ECONOMY AND GLOBALISATION

2.  The term globalization means International
Integration.
 It is a process through which the diverse world
is 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, population migrations and more
generally increased mobility of
persons, goods, capital, data and ideas

4.  Accountability
of Global businesses?
 Increased gap
between rich and poor
fuels potential
terrorist reaction
 Ethical responsibility
of business?
 Efforts to remove
trade barriers.

5. Nike
Dell
 Marketing
 Branding
 Advertising
 Cost down
 Outsourcing

6.  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

7.  Growing global markets in services
people 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 & stock
statements
Indian accountant
US tax payers

8.  Market economic policies spreading around the
world, with greater privatization and liberalization
than in earlier decades.
ex: BRIC
 Widespread adoption of democracy as the choice
of political regime.

9.  Multilateral agreements in trade, taking on such
new agendas as environmental and social
conditions.
 New multilateral agreements – for
services, intellectual property , communications –
more binding on national governments than any
previous agreements.

10. Growth
Customer Survey

11.  GDP – USD 590 billion
 GDP growth rate – 9%
 Services contribution – 54%
 Balance of Trade –
USD (-)46.2 billion
 Investment goal –
USD 250 billion
2006
Growing Indian Economy
*: Projected
Source: Economic Times & India Brand Equity Foundation (IBEF)
 GDP – USD 1.16 trillion
 GDP growth rate – 9.5%
 Services contribution – 60%
 Balance of Trade – Negative
balance should increase with
surging imports versus exports
 Investment goal –
USD 305 billion
2008 *
 GDP – USD 1.36 trillion
 GDP growth rate – 9%
 Services contribution –
60-65%
 Balance of Trade – Negative
balance should increase with
surging imports versus exports
 Investment goal –
USD 370 billion
2010 *

12. 105 105 135 145 167
103 125
204 231
287
682
191
237
398
453
0
200
400
600
800
1,000
1,200
1999-00 2002-03 2005-06 2006-07 2010*
USDBillion
Agriculture Industry Services
Contribution of Services -
increased from 48% to 62% and
is estimated to contribute 60% by 2010
Growing GDP
*: Projected
Source: India Brand Equity Foundation (IBEF)

13. *: Projected
Source: Ministry of Commerce & IBEF
83.5
103.1
126.3
155
200
50
90
130
170
210
USDBillion
2004-05 2005-06 2006-07 2007-08* 2008-09*
Growing Exports

14. Source: Ministry of Commerce & IBEF
Growing Imports
111.5
149.1
185.7
210.8
50
100
150
200
250
USDBillion
2004-05 2005-06 2006-07 2007-08 (Apr-
Feb)

15. India's Forex Reserves: 2001-08 (Till 14 March 2008)
54
75
112
141 152
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)
USDBillion
Steadily increasing Forex reserves offer adequate security
against any possible currency crisis or monetary instability
Increasing Forex Reserves
Source: Reserve Bank of India & India Brand Equity Foundation (IBEF)

16. Growing FDI Inflows
* Provisional
Source: Department of Commerce
8.9
22
30
4.3
6
0
5
10
15
20
25
30
35
2003-04 2004-05 2005-06 2006-07* 2007-08*
USDBillion
Electronic
equipment, manufacturing and
telecom have witnessed
significant FDI inflow
India is ranked second in AT
Kearney’s FDI confidence index
(2007)

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

18. Major M&A and Investments Announcements in India
USD 1.7 billion
Plans to spend on its development
operations in India over the next four
years
USD 2 billion
Plans to establish three manufacturing
plants to produce photo-voltaic units
USD 12 billion
POSCO to invest in building steel
manufacturing plants and facilities in
India by 2016
Source: India Brand Equity Foundation (IBEF)

19. Main sectors:
Main Destinations:
China, UAE, UK
North 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

20. Additional economic indicators:
•India has a consumer base of 1.14 billion people
•India is the 4th largest economy in the world when measured by PPP
•India’s has a growing middle class of over 300 million people - 30% of
India’s 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.

21. India’s Trade with USA
Imports from USExports to US
Source: Department of Commerce, Govt of India
11.4
5
13.7
7
17.3
9.4
18.8
11.7
0.0
5.0
10.0
15.0
20.0
2003 - 04 2004 - 05 2005 - 06 2006 - 07
USDBillion

22. 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

23. Major Items Imported from USA (2006)
Fertilizers
9%
Optical & Medical
Instruments
11%
Precious stones &
Metals
14%
Aircraft, Aviation
Machinery & parts
25%
Engineering
Goods &
Machinery
41%
Source: US Department of Commerce

24. 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 has
chosen to source from
India due to its
competitive cost of
manufacture,
availability of
abundant engineering
talent, and strong
indigenous machine
tool."

25. Automotive Sector - Overview
India is the world’s:
• 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 and
Korean OEMs.
Source: IBEF, Economic Times

26.  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

27.  Agriculture acquired 17% of India’s GDP in
2008.
 60% of population still depends on
agriculture for their livelihood.
 Occupied 43% of India’s geographical areas.
 All other sectors are growing at much faster.

28. Year Industry(%) Service(%) Agriculture(%)
1991 25 31 44
2007 28 55 17

29.  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

30. "India has a fantastic pool of
software professionals. The
world needs to benefit from
this.“
Bill Gates,
Microsoft
Chairman
This market (India) is critical
to our plans for building a
Ford Motor Co. for the 21st
century
Bill
Ford, Chairma
n and CEO
India on its way to becoming
IT, manufacturing kingdom of
the world
The dynamism shown by India
in the last 15 years is
phenomenal
Mr Yasukuni
Enoki, Japanese
Ambassador to India
Paul Wolfowitz,
President, World Bank
What are people talking about India?

31.  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).

32. Companies in India That Have Successfully Met
Competition by Multinationals & Domestic Companies
Had A Spirit Of Innovation Not Only In Their Products
And Services But Also With Reference To All Their
Resources And Effectively Restructured Them In A Time
And Cost Frame And Met Customer Needs And Improved
Their Top And Bottom Line.

33. Thank You