1. Invest India Policies & Opportunities
Rajeeva Ratna Shah
Secretary
Department of Industrial Policy and Promotion
Ministry of Commerce & Industry
Government of India
November 3, 2003, Paris
31/03/2017

2. India – Land of Opportunities
Fourth largest Economy (PPP) - A safe place
to do business
Second Largest Emerging Market
Largest democracy – political stability & consensus on reforms
Largest reservoir of skilled/semi-skilled manpower
Liberal & transparent investment policies
Long-term sustainable
Competitive advantage
- High growth rate economy
Highest returns on investment; India 19.33%, China 14.25%, Thailand 13.3%

3. Strong Macro-Economic Performance
Sustained Economic growth;
7% Current Year
8% Next quinqennium / decade
Over 6% - Next 50 Years – Goldman Sachs
Exports growth - over 19 % in ;
Non Oil imports growing at 31%-Economic vibrancy
Positive balance of trade with USA and China
FII Investment – over US$ 5 billion so far this year
Developed Banking system moving rapidly towards ICT integrated core banking/net banking
Mature Capital Market – NSE third largest, BSE fifth largest in terms of number of trades
Economy grew at 5.4% during the IX plan ( )
Most countries would be proud of such growth.
Economy expected to grow at 7 % this year.
Foreign exchange reserves growing at US$ 2.5 billion every month. Have crossed US$ 91 billion.
India currency is strengthening against US$.
Forex reserves likely to soon touch US$ 100 billion
63000 bank branches with prudential norms.
Vibrant capital market with nearly 9000 companies listed at Stock exchanges
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4. Sustained Economic Growth
(Base year: )
The economy has witnessed some fluctuations due to adverse climatic conditions in some years.
Last year despite an acute draught in large parts of the country, the economy still grew by 4.4%.
Economic growth in the last 10 years has been over 5.5%
The growth this year now expected at 7%.
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5. Growing Foreign Exchange Reserves
Foreign Exchange Reserves (US$ billion)
Exchange Rate (Rs/US$)
Foreign exchange reserves are rising very sharply.
Forex reserves expected to cross US$ 100 billion this year, addition of almost US$ 50 billion in just 2 years.
The value of Indian currency is market determined and has of late been getting strengthened against US$.
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6. Availability of Skilled Labour
Select Indicators
India
8.4
Brazil
7.5
USA
7.4
Mexico
6.6
Czrch
6.3
Availability of Qualified Engineers
1=Low 10= High
China
Availability of Skilled Labour
1=Low 10= High
4.2
India offers high quality and skilled manpower at competitive costs.
Rated second best in terms of availability of scientists and engineers
Macro-economic fundamentals are sound.
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7. Economic Liberalization
Fiscal Policy Reforms :
Stable tax regime with just 3 rates for both Excise as well as Customs duties
Full National treatment for foreign Cos. incorporated in India
Industrial Policy Reforms :
Capacity licensing dispensed with
Compulsory licensing only in 6 sectors: restrictions on grounds of national security, public health, public safety
FDI policy being progressively liberalized
Trade policy Reforms :
Most items on Open General License, Quantitative Restrictions lifted;
Monetary Policy and Financial Sector Reforms :
Interest rates brought down – Bank rate/Prime lending rate lowered
Banking Sector reforms – prudential norms stiffened
Securatization Act for better security for creditors
Competition law enacted. Competition Commission constituted
Independent regulators in place for Insurance sector (IRA) and Capital Markets (SEBI)
Exchange Controls relaxed;
Profits and dividends can be freely repatriated;
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8. Infrastructure Development
US$ 12 billion Highways Development Programme;
Over 13,000 Kms of Highways being developed.
US$ 22 billion ‘Sagar Mala’ programme to develop ports and shipping sector
Modernization of Airports at New Delhi & Mumbai.
World ‘s Fastest growing telecom market with a unified licensing regime and world class international and domestic connectivity;
The Electricity Act, enables captive generation and trading in electricity;
Golden Quadrilateral km
NS-EW Corridors.7300 km
1965 km already completed
4777 km work under progress
Nearly 11 Km of highways getting added every day.
Airports at New Delhi and Mumbai being developed with private participation. Respective legislation amended.
New Electricity Act freely permits captive power generation and allows trading of electricity.
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9. Brand India R&D base for 100 of Fortune 500 companies;
GE’s largest R&D Center outside US;
Large pool of World class scientific and technical manpower;
Indian Institutes of Technology;
Indian Institutes of Management.
S&T policy aims at R&D investments of 2% of GDP by 2007
Among the only three Asian countries with super computing competence
Strong base for manufacturing;
Bharat Forge world’s largest forging facility
Most major MNC’s like Volvo,GM,GE, Chrysler, Ford,Toyota, Unilever, Cliariant, Cummins, Delphi sourcing high quality components and hardware from India
Essel Propack worlds largest manufacturer of laminated tubes(30% of global market/70% Indian,Chinese market).
Hyundai Motors India – Global base for manufacturing small cars;
Indica(100% indigenous car) being exported to Europe as Rover City.
India exporting steel worth more than US$1 billion to China
Hero Honda world’s largest manufacturer of motorbikes
Precision Automation & Robotics India (PARI) - 20 Fortune 500 clients
18 Indian Companies in the latest FORBES 200 list of most competitive small and medium enterprises
Last year there were 13 Companies
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10. Competitive Entrepreneurship
Prevalence of foreign technology licensing – Rank 1
Availability of scientist and engineers – Rank 2
Quality of management schools – Rank 9
Firm level innovation – Rank 12
Firm level technology absorption – Rank 16
Company spending on R&D Rank 32
(Source Global Competitiveness Report, UNCTAD 2003)
India amongst the leading entrepreneurial hotbeds globally (Red Herring Clubs India with Israel)
Global Competitiveness Report by UNCTAD
Ranks 2nd in terms of availability of engineers and scientists second only to Israel.
High ranking in firm level innovation and technology absorption
India is a place where innovation and entrepreneurship flourishes.
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11. The Emerging Market: India Traditional & Emerging Focus
Traditional MNC
Business
Model
5-10 million, Rich
Some MNCs?
PPP>$10,000, m
Local
Firms
PPP $ 3-10,000, 150m
Future
Opportunity?
PPP $ 2-3,000, 150m
India has a large middle class population of 300 million.
The demand for better services and goods is rising.
Indian markets provide immense business opportunities.
PPP>$ 2000, 500m
© C.K. Prahalad
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12. India a Preferred VC Destination in Asia-2001
Country
Amt. Invested ($min)
No. of Companies
Australia
$ 1,228.8
213
South Korea
$ 1,228.1
169
India
$ 907.6
101
China
$ 628.0 23
Hong Kong
$ 247.5 33
Taiwan
$ 235.7 18
Singapore
$ 186.2 38
Malaysia
$ 65.1 11
Thailand
$ 35.7 10
New Zealand
$ 30.9 17
Indonesia
$ 20.0 3
Philippines
$ 4.8
Sri Lanka
$ 0.0 1
India is also a major destination for the venture capital funds, highlighting the strong knowledge and innovation base.
The capital markets are well developed and transparent.
India is also receiving substantial FII investments.
31/03/2017
Source : AVCJ

13. Investing in India – Entry Routes
Automatic Route
Prior Permission
General rule
No prior permission
required
Inform Reserve Bank
within 30 days of
inflow/issue of share
By exception
Prior Government
Approval needed.
Decision generally
Within 4-6 weeks
Foreign Direct Investment in a large number of sectors is permitted under the Automatic Route.
No prior approval is required for making investment under the Automatic route.
Only information to the Reserve bank of India within 30 days of inward remittance or issue of shares is required.
Small number of cases requiring Government approval are considered by an Empowered Body, the FIPB, in a time bound manner.
Compulsory licensing only for 6 categories
Alcoholic beverages
Cigarettes and cigars
Electronic aerospace and defence equipments
Hazardous chemicals
Industrial explosives
f. Drugs and pharma using recombinant technology
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14. Manufacturing Sectors with 100% FDI under ‘Automatic Route’
Cars and motor vehicles
Refrigerator and fire fighting equipments
Food processing
Electronic Hardware
Iron and steel
Private Oil Refineries
Agriculture tools and implements
Fertilizers and pesticides
Pollution control equipments
Tyres and tubes
Packaging products
Construction Machinery
Domestic air conditioners
Electric motors, industrial electric furnaces
Mining and Querying Machinery
Steam engines and turbines
Non-metallic mineral products
Rice, oil mill machinery
Chemical machinery
Drugs and pharmaceuticals except those requiring industrial licensing
Medical equipments
Office computing and accounting machinery
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15. Infrastructure Sectors with 100% FDI Under ‘Automatic Route’
Electricity Generation (except Atomic energy)
Electricity Transmission
Electricity Distribution
Mass Rapid Transport System
Roads and Highways
Toll Roads
Vehicular Bridges
Ports and Harbors
Hotel and tourism
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16. Services Sector with 100% FDI under Automatic Route
Advertising and films
Computer related services
Research and development services
Construction and related engineering services
Pollution control and Management services
Urban Planning and Landscape services
Architectural services
Health related and social services
Travel related services
Road transport services
Maritime transport services
Internal waterways transport services
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17. Sectors with Restrictions on FDI
Sectors with limits on FDI Caps
Private Banking ( 49%)
Insurance (26%)
Domestic Airlines (40%)
Basic and mobile services (49%)
Print Media (26%)
Defence production (26%)
Sectors where FDI is prohibited
Gambling, betting, lottery
Retail Trade
Agriculture Plantation, except tea plantation
Prior Government approval required in
the six sectors under compulsory licensing,
purchase of shares in an existing Company and
having previous joint venture require Government approval.
In addition sectors where investment is not under automatic route would require prior Government approval.
The list of FDI equity caps and the route of entry is available in the Manual circulated among the participants.
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18. Country wise FDI inflows
(Since July 1991)
France ranks 7th
Total FDI inflows from France US$ 620 million since 1991, share of 2.75% in total inflows
Total FDI approvals are US$ 1.72 billion
Realisation rate is 36%
Total FDI inflows into India are US$ 35 billion
Inflows in the last three years have been US$ 260 million
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19. Investment from France- Sectors
(Since July 1991)
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20. Some of the French Companies in India
Lafarge
Ciments Francis
Saint Gobain
Compagnie International
L’Oreal France
Peugeot
Alcatel Spacecom
Vetrotex International
GAZ de France
Schinder Electric
Air Liquide International
Groupe Danone
GDF International
Radio Telephone
Total SA
France Telecom
Vantico International
Essilor International
ELF Gas
Alstom
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21. Intellectual Property Rights-Initiatives
Modernization/revamping of legislations on Intellectual Property IP;
IPR Laws are TRIPS compliant;
Intellectual Property Appellate Tribunal functional from 15th September 2003;
Major initiative underway at modernizing IP administration;
Computerization of IP administration;
Digital database library of patent, trademark & design records;
For more information visit
All Intellectual Property Legislations are WTO compatible. India is on its way to meeting its future commitments as well.
We have recently set up the Intellectual Property Appellate Tribunal.
A major programme at strengthening the IP administration under implementation.
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22. Investment Facilitation
Foreign Investment Implementation Authority (FIIA) - to sort out any operational difficulty and facilitate implementation;
Last meeting with French investors on
‘FDI In India- Policies and Procedures’
Also available in Spanish, German, French & Italian.
An Empowered Sub-Committee of the National Development Council set up on ‘Creating an investor-friendly climate;
To focus on removing regulatory barriers to investments.
Web site
On-line chat, bulletin board and ;
The FIIA periodically meets with foreign investors.
FIIA met with Investors from France on
An Empowered Sub-Committee of the national Development Council, comprising of many Central Ministers and Chief Ministers of the State governments has been set up to review the extant procedures and dismantle administrative barriers.
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23. India: FDI Outlook Rated as the best BPO destination; AT KEARNEY
Best technology licensing regime - UNCTAD’s Global Competitiveness Report, 2003;
Rated among the most favourite investment destinations (UNCTAD, JETRO, JBIC, Deutsche Bank, EIU, etc.)
Major destination for foreign venture capital funds (Far Eastern Economic Review)
Sixth most attractive investment destination – ATKEARNEY Business Confidence Index, 2003
Also among the top 10 Tourist Destinations.
Latest AT KEARNEY Business Confidence Index ranks India as 6th best investment destination.
ATKEARNEY have also ranked India among the top 10 tourist destinations.
India is rated as the best destination for Business Process Outsourcing.
India is also a major destination for venture capital
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24. Opportunities and Potential Areas of Cooperation
Roads
$ 40 bn
Power Generation
$ 143 bn
Transmission &
Distribution
$ 116 bn
Coal
$ 26 bn
Investment
Requirement
in Energy & infrastructure
up to 2012
Refineries
$ 22 bn
Cross-Country
Pipelines
$ 10 bn
Oil & Gas
$ 100 bn
The investment opportunities in the infrastructure sector are immense. With investment requirement of over US$ 500 billion.
Ports
US $ 20 Billion
LNG Terminals
$ 10 bn
Railways US
$ 15 Billion
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25. Investment Opportunities
Roads:
Capacity enhancement of highways;
7000 kms of National Highways being offered during the current year;
Many more opportunities in the States;
Opportunities for equipment manufacturers; technical support;
Urban Infrastructure:
Development of townships for the rapidly growing, increasingly affluent urban middle class;
City level infrastructure; roads, bridges, IT Parks, sanitation and water supply etc.
Consultancy in urban planning;
Some of the specific investment Opportunities:
7000 Km of Highways will be tendered this year under the National Highways development programme.
AT the State level also major projects for road development are being taken up.
Many more opportunities in the development of infrastructure in the cities.
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26. Investment Opportunities
Ports:
Government of India’s initiative of developing ports – ‘Sagar Mala’ with an investment of US$ 22 billion;
Development of Ports;
Shipping;
Power:
Addition of 100,000 MW required over the next 10 years;
Installed capacity 106,000 MW;
Hydro-electric initiative to develop 50,000 MW;
Detailed project reports being prepared to facilitate private investment.
Addition of 100,000 MW planned over the next 10 years.
The existing installed capacity to be doubled.
Another initiative to develop 50,000 MW of hydro electricity. Detailed project reports are being prepared to facilitate private investment.
The Sagar Mala project envisages development of ports and shipping sector at an investment of over US$ 22 billion, largely in the private sector.
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27. Investment Opportunities
Telecommunications
Cellular phones 1.5 million every month;
To increase by 20 million this year; by 100 million in the next 3-4 years;
Telephone connections to rise to 75 million by 2005 and 175 million by 2010;
Investment Opportunities:
Setting up manufacturing base. Value added services;
Food Processing
Large production of variety of food products;
Investment of US$ 28 billion required to raise food processing levels by 8-10 %.
Indian’s spend about 50% of household expenditure on food items.
Demand for processed food rising with growing urbanisation and income levels.
Cell phones increasing at an astonishing rate of 20 million a year.
Already increase of 10 million has taken place this year.
Most experts expect increase of 100 million in the next 3-4 years.
Provides immense opportunities for setting up manufacturing facilities.
Landline phones also increasing rapidly.
Tele-density could reach by 2010.
Producer of a large number of food products
The demand for processed food rising with growing urbanization and changing life styles
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28. Skilled knowledge workforce
India’s competitive edge is its manpower
Over 380 universities (11200 colleges)
1500 research institutions
Over 200,000 engineering graduates
Over 300,000 post graduates from non-engineering colleges
2,100,000 other graduates
Around 9,000 PhDs
Knowledge workers in software and service industry increased from 6,800 in to 650,000 in 2003
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29. ICT opportunities India’s inherent strengths Opportunities : JV/FDI
IT Industry US $ 14 billion; growing at 50% p.a.
Exports US $ 10 billion
2008 exports target : US $ 60 billion , to be 35% of India’s total exports;
Job creation: a million direct & 2-3 Million indirect;
High quality standards;
62 SEI/CMM level 5 companies, two third of world’s total.
250 Fortune 500 companies clients of Indian firms;
Opportunities : JV/FDI
Multi purpose smart cards with PKI protection
Health informatics and telemedicine network
Setting up a deep submicron fab facility
Collaborative ICT research in language technologies / next generation communication / Internet technologies
Joint Software development in super computing applications in fluid dynamics, structural mechanics, bioinformatics, nanoinformatics, etc
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30. India - The Backoffice hub
India has become the most preferred destination – Outsourcing trend increasing
GE,TI, Intel, CISCO, Microsoft, Dell, Sun Micro, Oracle, LG, Ford, American Express and other financial sector companies;
Customer needs are being met
Large pool of skilled English speaking workforce – skills and scalability, 24x7 support
Productivity and quality enhancement
Conducive policy environment and Government support
Highly improved telecom infrastructure
Call center career is aspirational unlike a low choice in the West
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31. Cost savings by off shoring BPO services to India
Impact*
Key opportunity areas
Overall cost saving
Per cent
Claims processing
Servicing
Call centre operations
Insurance
Call centre operations
Loan processing (consumer, corporate, mortgage)
Retail financial services / Retail banking **
Research and development
Pharmaceuticals
Call centre operations
Billing
Telecom
Engineering and design
Accounts payable/ receivable
Automotive
40-60% cost saving for processes offshored
Revenue accounting
Call centre operations
Frequent flyer programmes
Airlines
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32. Country Advantage Likely to be Comoditized
(45-55% savings)
Vendor advantage
(30-40% savings)
Original
Cost
base
Factor
Savings
Additional
Telecom
& manage-
ment costs
Off-shore
Location
cost
Consoli-ation,
Standar-
Dization
& superior
skills
Task
Reengi
neering
Econo-
mies of
scale
Process
Reengine
-ering
New cost
Task migration
Task level
improvement
100
60-65
10-15
8-13
5-7
3-5
Does not
Include gains from
Over-delivery and
continuous
45-55 15
30-35
Task aggregation
And process level
improvement
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33. Joint Venturing opportunities in Biotech
India’s inherent strengths
Rich Biodiversity
Large reservoirs of valuable diagnostic and clinical data
Vibrant and inventive pharmaceutical industry
World class network of educational and research institutions
Known strengths in mathematics, logic and computational skills
Super Computing and Software strengths enable extensive use of bio-informatics in new drug discovery
Opportunities :
Joint Ventures in Biotech based new drugs / pharmaceuticals
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34. Global Business Leaders - Bullish On India’s Potential
“We are expanding our presence in India to take advantage of the ample R&D talent available”
JOHN CHAMBERS, CISCO
JACK WELCH, GE
“India is a developed country as far as intellectual capital is concerned”
“India is handling the most sophisticated projects in the world..I am impressed with the quality of work”
MICHAEL DELL, DELL
BILL GATES, MICROSOFT
“India can be a major part of Dell’s operations and we are looking to capitalize on India’s human capital”
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35. Visit us at www.dipp.nic.in E-mail at rrshah@ub.nic.in
Thank You
Visit us at at
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36. 31/03/2017