Besides, the general agreement that China would emerge as world factory and India with its knowledge power, the world office, India is resurging fast. On this Republic Day, I give below some splashes of those happenings:
India is emerging as a land of opportunities for business and investment. Canadian companies doing business in the country have revealed in a survey. Despite challenges, entering India has been rewarding and majority (63 per cent companies) plan to expand operations in the country,” the survey conducted jointly by KPMG, a leading audit, tax and advisory multinational company, the Canada-India Business Council (C-IBC), and the Canadian Manufacturers and Exporters and association (CME) said.
“There is a very good chance of the economy to grow by 8 per cent this year. Higher growth rate was possible in the future and the distance of 8 to 10 per cent was very much achievable,” Praful Patel, vice-president (South Asia), World Bank, said on the sidelines of a conference on micro-finance. Prime Minister Manmohan Singh had recently said India should target 10 per cent growth over the next two-three years. India’s GDP grew 8.1 per cent during the first half of 2005-06.
Indian firms have started acquiring a global footprint with global acquisitions of over $3.5 billion in the past two years; from Tata’s acquisitions of Tetley Tea and Daewoo Motors to Videocon’s purchase of Thomson and Bharat Forge’s buyout of Federal Forge. According to our estimates at the India Brand Equity Foundation, this number could cross the $10-billion mark in the next two years.
20 of India’s top 100 companies, ranked in terms of market capitalisation, generate 50 per cent or more of their revenues from international sales. Mahindra wants to build the largest tractor brand in the world; TCS, Wipro and Infosys are targeting slots amongst the top five IT consulting firms in the world. “Incredible India” continues to draw global attention. Now, high-end surgeries and world-class management, engineering and medical education are helping build the medical and educational tourism industries. Apollos and Escorts; the IITs, IIMs and Manipals are bound to become globally preferred brands.
In a landmark development on Dec 5, the US and other partners- the European Union, Russia, Japan, South Korea and China in International Thermonuclear Experimental Reactor (ITER) project have decided to invite India as a full partner in the ambitious multi-billion energy venture at the ITER negotiations meeting in Jeju, South Korea, to invite India as a full partner, India’s acceptance as a full partner was an “acknowledgement of India as a responsible nuclear state with advanced nuclear technology, including in the field of fusion research”.
Microsoft plans to pour $1.7 billion into India over four years and employ another 3,000 people to deepen its presence in the fast-growing software player. About half of the money will be spent on its existing research and development center, its global software delivery unit and expanding to 33 more cities by opening retail outlets. Leading chipmaker Intel Corporation on Dec 5, announced a multi-year investment plan for India, totalling over $1 bn, including $800 mn over the next five years for business expansion. Intel Chairman Craig Barrett said. IT giant Cognizant would be investing around $76 million across its centres in India.
Airbus SAS, the world’s largest commercial planemaker, will revise its forecast of sales in India because of the country’s higher economic growth. India may buy between 800 and 1,000 planes by 2026, according to Kiran Rao, Airbus Vice-President in charge of sales for India.
Gartner projects that total Indian enterprise IT spending (not including consumer IT spend), including hardware, software, telecommunications and IT services, will reach $25 billion in 2006 growing at a CAGR of 20.8 per cent from 2004 to 2009.
Top 300 firms of India Inc. have lined up investments of Rs 3.2 trillion (Rs 320,000 crore) to be made over the next 12 to 18 months. Senior bankers estimate that greenfield projects will account for roughly half of these investments.
India, along with US is estimated to house almost two-thirds of the world’s developers. “India has the second largest developer community outside the US. Bill Gates launch of Visual Studio is an acknowledgement of the fact that India has a strong developer community. The same is true of Intel’s investment into R&D. It is primarily for developers (not software alone but hardware designers and hardware developers).
8.8 mn jobs likely, India may become biggest example of export-led growth. The information technology industry is projected to contribute around 7 per cent to the country’s gross domestic product by 2010, a joint report by Nasscom and McKinsey, released today, said. At present, the sector contributes about 3 per cent to the GDP. The export revenue from the sector is projected to more than treble to $60 billion by 2010, compared with $17 billion in 2005. The IT sector would also account for over 44 per cent of the export growth over the next five years, compared with 12 per cent at present, the report said. “The IT industry will grow at a compounded annual growth rate (CAGR) of 28 per cent to reach $60 billion in export revenues by 2010. It will become one of the biggest examples of export-led growth in the world, rivalling the oil exports from the Gulf,” said TCS Chief Executive Officer S Ramadorai.
$10 billion foreign direct investment in 11 weeks, $9 billion in IT/telecom alone in the first 11 months of the year! Those are the mind-boggling numbers being bandied by a host of investors making a beeline for India. Contrast this with the $8.5 billion through the portfolio route during the calendar year to date and the true significance of the sea change on the anvil comes home as never before. All these years, FDI trailed FII. According to the Reserve Bank of India’s latest annual report, FDI at $3.3 billion in 2004-05 was less than half the total portfolio inflow during the year. Worldwide, it is exactly the opposite. According to the IMF’s World Economic Outlook, portfolio investment at $29 billion was completely dwarfed by direct investment of $197 billion in calendar year 2004. Could it be, as the AT Kearney report points out, that ‘India is on the cusp of an FDI takeoff?’
India may become engg sourcing hub Global engineering companies such as Siemens, Cummins, ABB, Aker Kværner, Wartsila, Alfa Laval and SKF are planning to increase their sourcing of engineering equipment and services from India three-four times from the current level in the next three years.
Usha Martin is planning to become the number one wire rope manufacturer in the world by December 2006, surpassing the largest wire rope manufacturer in the world. Korean transnational Kis now holds the top slot in wire rope globally. Reliance Industries claims India has become the first country in the world to market apples in a particular variety of plastic packaging cartons.
In rural Shimla, in the mid hills of Himachal Pradesh, there has been a fast-growing trend to shift from growing traditional subsistence crops like wheat, corn, and barley to vegetable cash crops like cauliflower, cabbage, tomato, French beans, peas, among others.
As per the report titled “From the Ganges to the Thames” which states that the Indian Foreign Direct Investment in British capital is second only to that of the US and Indian FDI project in Europe has increased from just 5 to 119 during the period 1997 to 2004.
When Tata Chemicals on December 23, 2005 announced the acquisition of 63.5 per cent stake in Brunner Mond Group of the UK for Rs 508 crore, the Tata Group’s spend on overseas buyouts during the year went up to Rs 4,120 crore – its largest so far in a single year.
Nike has won a Rs 196.66 crore bid to sponsor the Indian cricket team’s clothes for the next five years. Close on the heels of Rs 313 crore sponsorship deal with Air Sahara, the announcement has made the Indian cricket team the most valuable sports team, ahead even of Europe’s football clubs.
India a hub for aircraft engineering design
According to a report by ‘Global Sourcing Now,’ KPO business is supposed to touch $17 billion by 2010 of which at least 70 per cent — or $12 billion — is to be outsourced to India. There will be over 300,000 new jobs from the current just 25,000.
According to a study by the United States-based Forester Research, the current annual value of legal outsourcing, which is worth $80 million can rise up to $4 billion and can fetch 79,000 jobs in India by 2015.
Indian and multinational companies are announcing fresh investments in the metals sector at a breakneck pace. Eleven Indian and multinational metal companies have already lined up investments of $69.9 billion (Rs 31,800 crore) in greenfield and brownfield projects. These projects are to be implemented in the next four to six years and are likely to increase the capacity of the steel industry by a whopping 103 million tonnes.
According to a Manpower Employment Outlook survey for the first quarter of 2006, India leads other countries with a positive overall net employment outlook of +27 per cent. Another survey, by Hewitt, projects Indian salaries to increase by 14 per cent in 2006 – the highest in the Asia-Pacific region. Topping the recruiters’ list is the information technology and IT-enabled services industry, which will continue to recruit an average of 400 people every day. Industry body Nasscom estimates fresh IT labour supply at 250,000 in 2006-07.
Long Live Republic India