India: Some Interesting Findings

Some Interesting facts and figure on India:
The information about India mentioned below, shows how India matches up with the other nations and how it is aiming to become one of the most sought after business destinations in the world.

A. Economic Perspective
• GDP growth rate – 6% to 7%; Inflation – 4% to 5% per annum
• Ranked 3rd in the Global A T Kearney FDI Confidence Index in 2004
• GDP growing by over 7.5% for the last 5 years. Accounted for 57.6% of GDP in 2004-05.
• Strong and well managed capital markets
• Rapid growth of Tier II & III cities – sub-urbanization of economic activity.
• Stable economic policies – in spite of changing governments.
• Completely autonomous and independent Election Commission
• Free and Independent Judiciary and Press/Media

B. The Indian Market
• India is home to second largest English speaking manpower in the world.
• The Indian retail market is worth over US$ 1.5 trillion.
• The Indian middle class is over 340 million and is growing rapidly.
• 23% of the population accounted for 42% of the country’s consumption expenditure in 2004.
• India has the fastest growing telecom market – between 1 to 1.5 million new mobile subscribers are being added every month.
• India presents at least 25-30 business destinations at various Tier-I, II & III locations

C. Percentage of World Gross Domestic Product
In Year 2004
Other, 20% / U.S., 28% / EU, 34% / China, 4% / Japan, 12% / India, 2%

In Year 2025 EST.
Other, 21% / U.S., 27% / EU, 25% / China, 15%/ Japan, 7% / India, 5%

In Year 2050 EST.
Other, 10% / U.S., 26% / EU, 15% / China, 28% / Japan, 4% / India, 17%

D. Technology Sector:

• Over 80 of World’s 117 SEICMM (Software Engineering Institute - Capability Maturity
Model) Level 5 companies are in India.
• McKinsey expects IT industry revenues to reach $87 billion by 2008.
• The GE John F Welch technology Centre, Bangalore, is GE’s only R&D facility outside the US –
has filed over 200 international patents.
• Deming Prize for TQM – out of 19 prizes given in the last 4 years 9 have gone to Indian
companies.

E. Research & Development Sector

• Council of Scientific & Industrial Research (CSIR) has filed over 5,000 patents in the last 10 years.
• Patents filed from India have gone up to 1216 in 2004-05 from 848 in 2003-04 – an increase of over 43%.
• India is world’s 4th largest pharmaceutical producer with 8% share in volume terms and has the second highest number of US FDA approved manufacturing units.

F. Indian Banking and Capital Markets Sector

• Gross NPAs (to Gross Advances) of Scheduled Commercial Banks (SCBs) were 7.4% in March 2004 and 5.2% in March 2005 – a reduction of 29.7%
• Well regulated Indian capital markets
• Resource mobilization from Primary markets almost trebled during 2004-05 over the
previous year.
• Private sector companies accounted for 61.6% of resources mobilized through public issues
during 2004-05 – up from 46.8% in 2003-04.
• Mutual Funds mobilized $ 190 million in 2004- 05 compared to $133.8 million in 2003-04 – a
growth of over 42%.

As on 31 March 2005 India had
• 28 Public Sector Banks,
• 30 Private Sector Banks,
• 31 Foreign Banks,
• 4 Local and
• 196 Regional Rural Banks

G. Indian Man Power Capital
• Population of 8 largest cities is approximately 70 million – a highly skilled work force.
• India produces amongst the highest number of technical graduates in the world – over 50,000
computer professionals and 360,000 engineering graduates per annum.
• Second largest English speaking workforce in the world (next only to USA).
• High availability of low cost skilled/unskilled manpower in Tier I, II & III cities.
• Tier II & III cities (20-25 cities) are very cost effective options as cost of living is still relatively low.

H. Future Challenges & Opportunities

• Multi-party democracy – differing opinions can lead to chaos and confusion at times.
• Federal Government is coalition of a number of political parties – slow decision making process.
• Real estate markets in some locations have grown too fast in the recent past leading to mismatch in the demand-supply situation.
• Political opposition can slow/postpone implementation of infrastructure projects.
• Bureaucratic procedures can be a dampener to private business activity.
• Infrastructure bottlenecks can slow down economic activity and growth

(Info courtsey Cushman & Wakefield)