The India Advantage after the Comprehensive Economic Partnership Agreement

1. 1 The India Advantage after the Comprehensive Economic Partnership Agreement At KCCI 12 March 2010 H.E. Mr. Skand R. Tayal Ambassador of India

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3. 3 India - Facts

4. 4 The Growth Story

5. 5 India’s Decadal GDP Growth rate

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7. 7 Macro-economic stability Steady increase in forex reserves now standing at $ 290 Billion.

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12. 12 Drivers of the India Growth Story

13. 13 India’s Integration with East Asia…….. India is active participant in the ongoing Asian economic regionalism. It is the second nation, after Singapore, in Asian region, having/negotiating/proposed maximum number of FTAs. Till date, the total number of India’s FTA (both proposed and concluded) is 32. Out of this , 19 are with the Asian countries. Already concluded FTAs with East Asian countries: India-Korea CEPA India-ASEAN FTA India-Singapore CECA India-Thailand FTA Proposed/under consultation/under negotiation India-Japan India-Australia India-New Zealand

14. 14 Why India? India to be the 5th largest consumer market by 2025 India is world’s largest functional democracy with a population of over One Billion people India second fastest growing major economy after China. Full National Treatment for Foreign Companies Incorporated in India Profits & Dividends can be Freely Repatriated Stable & Well Developed Banking System India has followed a calibrated globalization process liberalization of FDI regime reduction in import tariff fully convertible current account moving towards fuller capital account convertibility compliance with WTO norms

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16. 16 Large Intellectual Capital base

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18. 18 Untapped Market Potential

19. 19 Infrastructure Opportunities: Power / Roads / PortsInfrastructure: US$ 510 bn in investments planned in next five years Give telecom success story first Then give Airlines success story Then other sectors may be given Details of ongoing projects, investments envisaged and number of projects may be givenGive telecom success story first Then give Airlines success story Then other sectors may be given Details of ongoing projects, investments envisaged and number of projects may be given

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28. 28 Chemicals Indian consumption levels 1/10th of global average New Petroleum, Chemicals and Petrochemicals Investment Region (PCPIR) policy. Each PCPIR to have 250 sq.km area, refinery/petrochemical feed stock company. These regions to be in West Bengal, Gujarat and Andhra Pradesh. 6th IndiaChem 2010 (Exhibition and Conference) to be held in Mumbai 28-30 October at Bombay Exhibition Centre. It would focus on chemicals, technologies, process plant machinery, control and automation systems and petrochemicals. Japan was partner country in 2004 and Korea is requested for 2010. www.indiachem.in

29. 29 Several factors make India a favourite investment destination

30. 30 Consumer Market in India Low margin – high volumes model. 506 million Mobile phones. Consumer looking for a “deal.” 40 million new consumers coming into market every year. Single use products – shampoo in sachets. Appliances designed for power failures.

31. 31 Indian Subsidiaries Outshine Overseas ParentsBetter Financial PerformanceTrends visible in many sectors: IT, auto, pharma & consumar durables

32. 32 Bilateral Context Excellent political relations President Lee’s landmark State Visit in Jan ‘10 Growing economic content – trade in 2008 was 15.6 billion dollars. Bilateral Trade Target for 2014 is US$ 30 Billion CEPA is operational from January, 2010 Indian market hospitable to Korean business. Leading Korean Companies household names.

33. 33 Share of Top Sectors Attracting FDI Inflows from South Korea

34. 34 Potential Areas for Korean Investments in India Auto & Auto Ancillary Defense Pharmaceutical & Chemical Products Healthcare Information Technology Infrastructure Shipping & Ports Textile, Garment & Apparel Industry Mechanical tools Machinery Food Processing Industries Solar Power

35. 35 Example - Hyundai Motor India Ltd. [HMIL] Fastest Growth in Exports from India - Total of 1 million cars in 2010 No. 1 Exporter of Automobiles from India Accounts for 66% of Total Passenger Car Exports from India Exports to over 113 countries from India (120 by end 2010) Biggest Operations outside of Korea in India Over 50% of production in India is Exported Year Exports (Cars) 1999 20 2000 3,823 2001 6,092 2002 8,245 2003 30,416 2004 75,871 2005 96,560 2006 113,339 2007 126,749 2008 243,919 2009 210,007 Total 975,041

36. 36 Information Technology Indian IT-BPO sector US$ 71 billion Software and services exports US$ 47 billion in 2008 Indian IT companies are experts in: Custom Application Development and Maintenance (CADM) System Integration IT Consulting Application Management Computer Aided Designing (CAD) Legal Process Outsourcing Animation Industry IT Enabled Services

37. 37 India – Preferred IT Services Supplier to the World

38. 38 Pharmaceutical Industry in India Medicines at affordable cost Third largest in the world in volume terms Over $20 billion in terms of value Exports over $8 billion worth of drugs and pharmaceuticals to US, Europe, Japan, Australia, etc. Advantage in GENERIC DRUGS ($80 billion worth drugs patent expiring by 2012. Ranbaxy – majority share bought by Daiichi-Sankyo worth $4.6 Billion.

39. 39 Global Reach of Indian Pharmaceuticals

40. 40 Partnership in Space, Science & Technology On 26 May 1999 India’s Polar Satellite Launch Vehicle PSLV C2 successfully launched Korean satellite KITSAT-3 into space. India has 54 satellites in space. 22 Satellites launched for companies from Germany, Italy, Belgium, Indonesia and Argentina. India’s capacity to design, fabricate, launch and track satellites on own Launch Vehicles. Chandrayaan orbiting the Moon. $10 Million Common Fund for R&D in S&T.

41. 41 Comprehensive Economic Partnership Agreement [CEPA] To deepen co-operation in – Trade in goods Information Technology Transfer of Technology Manufacturing sector Services sector Movement of professionals

42. 42 Comprehensive Economic Partnership Agreement [CEPA]

43. 43 CEPA Benefits Encourage Korean companies to setup manufacturing in India Korean Companies can Import Raw Materials, Inputs used in Manufacturing at Concessional Import Duty in India Export to Korea from India with Export Benefits & Concessional Import Duty in Korea

44. 44 Leverage India’s Human Resources R&D Laboratories in India. Samsung, LG, Hyundai Motors. Indian Engineers and IT Experts in Korea. Designing & Research (~1000). Scientists and Researchers in Korean Universities (~600). Indian experts will make Korean companies more competitive globally - Middle-East contracts. CEPA opens new doors 163 categories of professionals from India can work on contracts in Korea.

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47. 47 Success of Korean Companies in India Pioneers are Samsung Electronics (1995), Hyundai Motors (1996) and LG Electronics (1997). Now >400 Korean Corporations in India with more than US$1.5 billion investment. POSCO proposes US$12 billion investment – progress slow but steady. 65% Korean companies in profit. 24% showing growth but still in deficit 11% in deficit. 5. Recent Entrants: Woori Bank, Samsung SDS, Korean IT Corporation.

48. 48 Indian Companies in South Korea

49. 49 Gujarat Vittal Innovation City FEZ Support by KOTRA and Korea Land Corporation. 800 Acres Area Reserved for Korean SMEs. Trilateral MoU between Korea Land Corporation, GVIC and Government of Gujarat. Korean Ecosystem. 70 Korean companies have expressed interest. Electronics, specialty chemicals, components, light engineering.

50. 50 The New BrandMade in INDIAin Partnership with KOREA

51. 51 Thank You. Ambassador of India amb.seoul@mea.gov.in