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“Japan-India Public Private Partnership Seminar” -- Towards New Economic Partnership – Session 3 “Promising India”. 14 February 2008 India International Centre Annex, Delhi. Contents of Presentation. Issue 1: Economic Growth Potential of India: Present & Future
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“Japan-India Public Private Partnership Seminar”-- Towards New Economic Partnership –Session 3“Promising India” 14 February 2008 India International Centre Annex, Delhi
Contents of Presentation Issue 1: Economic Growth Potential of India: Present & Future Issue 2: Economic Partnership and “Complementarity”of Japan and India Issue 3: National Development Structure of India Issue 4: PPP and Directions of Japanese ODA India-Japan PPP Forum
Issue 1:Economic Growth Potential of India: Present & Future India-Japan PPP Forum
India is one of the most potential Asian growth centers. Regional Economic Linkages: The Chain of Sub-regional Economic Circles in Asia JAPAN East Asia Economy INDIA ASEAN Economy The Bengal Bay Economy India-Japan PPP Forum
Changes in GDP (at Current Prices) China Brazil China India Russia Brazil India Russia GDP Growth in Comparison with BRICs India-Japan PPP Forum
GDP Growth in Future Source: IMF India is projected to achieve a long-term economic growth at higher rates than the world average by IMF. India-Japan PPP Forum
A Long-term Perspective onPer Capita GDP in BRICs An Institute made a super long-term projection of GDP Per Capita of BRICs up to 2064. INDIA Source: Open Cities (Spring 2008) India-Japan PPP Forum
Energy Resource ExtractionNatural Gas at Eastern Off-shore • Dhirubhai NG Field • NG Deposit: 35 tcf = sufficient enough to substitute the imported volume • Production: to be commenced from 2008 India-Japan PPP Forum
Indian Students Abroad Ranking of Source Markets in Major English-speaking Countries India-Japan PPP Forum
Summary: Indian Economic Outlook • India is one of the most potential Asian growth centers. • High economic growth expanding domestic and international markets. • GDP growth: 9.4% in 2005~6 • GDP per capita: US$ 737 in 2006 • Such a high economic growth momentum is projected to last in the long-term. • Service sector and ICT business have been long leading such a high growth. • Supported by higher educated human resource • Producing human resource with international manner and technologies in English-speaking countries. • Energy resources are sufficiently available to support a sustainable economic growth. • Shifting to Natural Gas India-Japan PPP Forum
Issue 2:Economic Partnership and Complementarity of India-Japan India-Japan PPP Forum
Changes in Trading Partners of India Import + Export Amount Trades with countries facing the Bengal Bay are notably increasing at the same rate as that of “China.” N.B. The Bengal Bay = Sri Lanka, Bangladesh, Myanmar, Thailand, Malaysia, Singapore & Indonesia India-Japan PPP Forum
Shares of Trading Partners Import + Export Amount The share of “Europe” decreased, while the share of “WANA” significantly increased, followed by China and the countries facing the Bengal Bay. Japan’s share is comparatively low. India-Japan PPP Forum
The three share 44% of the total Sector-wise FDI Inflows(Top 12 from 2000~2007) India-Japan PPP Forum
Top Investing Countries: FDI Equity Inflows Cumulative FDI Equity Inflows (US$) between 2000 -2007 Cumulative Inflows Total: US$ 47,205 mill. Japan is ranked at 6th place, sharing only 4.0%. India-Japan PPP Forum
Tourism Development Tourism sector provides a greater amount of employments Source: “Incredible India” Sep. 2007 Ministry of Tourism India-Japan PPP Forum
Japan is ranked at 7th place with 120 thousand tourist arrivals Tourism Partners Source: “Incredible India” Sep. 2007 Ministry of Tourism India-Japan PPP Forum
2007 2002 2005 2001 2006 FDI Flows vs. Int’l Tourist Arrivals Money (FDI) and human (Tourist) transactions are mutually correlated. The elasticity in recent years is extremely high. India-Japan PPP Forum
India-Japan Trading and FDIs • Trading: • The shares of “WANA” , “China” and “the Bengal Bay Economy” are significantly increasing, while Japan decreases its comparative share. • Trading volume with Japan is increasing at 17.5% p.a., but Japan is still a minor partner, sharing only 2.3% of the total. • FDIs: • India is attracting FDIs in three (3) strategic sectors, namely, “Services (financial and non-financial)”, “Computer Software & Hardware” and “Telecommunication”. These three share 44% of the total FDIs. • FDI inflow form Japan is still weak, compared to USA, UK and Singapore, being ranked at 6th place. • Tourism • A robust growth in Tourism Sector is the result of successful internationalization in the economy. This is correlated with money flows, namely, tourists come and/then money comes. A substantial potential for further expansion of Trade/FDI between India and Japan exists, noting the complementarityof Japanese endowments in ICT sector, automobile and other high value-added industries. India-Japan PPP Forum
Issue 3:National Development Structure of India India-Japan PPP Forum
Regional Economic Linkages: Importance of being linked with Asian economies East Asia Economy JAPAN INDIA ASEAN Economy Technology and capital shift The Bengal Bay Economy India-Japan PPP Forum
BANGLADESH MYANMAR INDIA THAILAND SRI LANKA MALAYSIA SINGAPORE INDONESIA The Bengal Bay Economy The Eastern India is encompassed in the Bengal Bay Economy that stands for a sub-regional industrial and capital linkage with supply chain. India-Japan PPP Forum
National Development Structure- Golden Quadrangle - Delhi Kolkata Mumbai Hyderabad Chennai Bangalore The national economic structure shall be formulated with four (4) major metropolises and two (2) strategic growth centers such as Bangalore and Hyderabad… India-Japan PPP Forum
Co-Developmental Triangles of Eastern Corridors&Balanced Growth of Indian Nation Delhi Kolkata Co-Developmental Triangles of Eastern Corridors Mumbai Hyderabad Chennai / Ennore Connection to ASEAN Industrial Clusters and East-Asian Countries Bangalore India-Japan PPP Forum
NCR 2.2 4.1 Five (5) IT Centers in India India’s IT and BPO exports from STPIs, FY 2004 (US$ billion) IT Industries are likely located in Southern three major centers: Bangalore, Chennai and Hyderabad. Mumbai Hyderabad Bangalore Chennai Source: Press articles; web searches; NASSCOM India-Japan PPP Forum
NCR 9.5 Kolkata 0.7 Mumbai 10.8 Hyderabad 2.9 2.9 2.0 Bangalore Chennai FDI Equity Inflows in Major Cities RGI’s Regional Office-wise: Apr. 2000 to Oct. 2007 (US$ Billion) Southern three major centers have attracted FDI equivalent to that into NCR. India-Japan PPP Forum
International Gateways for Market Linkages Delhi Western Market Oriented Economy Kolkata Hyderabad Mumbai Eastern Market Oriented Economy Bangalore Chennai India-Japan PPP Forum
Road development is urgent Growth Parameters – Rating of Cities (Source: The Times of India, Dt.3rd August, 04, Page10.) • Ranking for 5 to 1 indicate vary good to very poor • Cost of living indicates low to high from 5 to 1 • Rating in the form of 4/3 indicate preference for the first figure, in this case 4 India-Japan PPP Forum
Hyderabad From Ennore Port Bangalore From Chennai Port Chennai Ennore Port Strategic Industrial Corridor: Chennai - Bangalore India-Japan PPP Forum
Spatial Concepts on the National Development Structure • Sub-regional Economic Chain • Importance to link India with ASEAN and East Asia Economies • The Bengal Bay Economy • Economic integration with potential markets • Golden Quadrangle Structure • Four (4) Major Cities + Two (2) Strategic growth Centers • The Delhi – Mumbai Industrial Corridor • The Western Market-oriented Gateway • The Chennai – Bangalore Growth Corridor • The Eastern Market-oriented Gateway India-Japan PPP Forum
Recommendation:For Balanced Development Scenario Recognize three metropolises as strategic growth centers :Chennai, Bangalore and Hyderabad The southern and eastern part of India be a strategic development region towards the balanced national economy Needs / Requirements of the Society and Private Sector Further strengthen the international transport gateway functions at Chennai: • Functionalize and enlarge Chennai and Ennore Ports; • Improve the Logistic and Inter-modal Systems with hinterland economies in Bangalore, Hyderabad and rest of India. • Formulate the Chennai-Bangalore Corridor as a strategic Industrial zone with improved roads Fully mobilize Public and Private resources and knowledge in both countries, India and Japan India-Japan PPP Forum
Issue 4:PPP and Direction of Japanese ODA India-Japan PPP Forum
Investment, Technology, Human Resource Common Policy Agreement Deregulation PPP and Bilateral PartnershipHow to promote it ? India Partnership Public Private Japan Partnership Public Private
Outcomes of the India-Japan Joint Study Group (June 2006) • Bilateral inter-governmental negotiation to develop a Comprehensive Economic Partnership Agreement (EPA/CEPA), consistent with WTO: • Trade in goods and services; measures for trade promotion • Promotion and liberalization of investment flows • A Joint Task Force to be organized with representatives of business community to seek for an agreeable scheme of CEPA. • Japanese ODA: • To support PPP-based projects (economic and social infrastructure), involving the “Viability Gap Funding System” • To encourage FDI through improvement of infrastructures • To promote best-practice projects in terms of transfer of management skills and technology (like Delhi Metro) • To expand human exchanges • To promote projects to bear a synergy of financial and technical cooperation. • Special Economic Cooperation • To promote a synergy between Japanese manufacturing technique and Indian software in ICT, Energy, Logistic and Automobile Sectors India-Japan PPP Forum
Needs of the Society and Business Sector Facility Development & Procurements A Public-Private Partnership Model Lease & Maintenance Contract (TAC-TMC) • Public Facilities: • - Civil Structure • Related Infrastructure Government Private Operator (Special-Purpose Company-SPC) -Project Finance -Design -Construction -Operation -Maintenance Subsidy or Viability Gap Fund Performance Monitoring Management Unit (PMU) - Government Staff Management • Procurements: • Operation systems; • Software and Know-how • Maintenance tools • Others Advisor (Consultants) Investment Service Charges on PFI-contract Basis
A Model of Players’ Demarcations:for Development of the Chennai–Bangalore Growth Corridor India-Japan PPP Forum
Thank you ….. India-Japan PPP Forum