India - A Financial

Perspective
Dina Hamze
Gurjeet Jaggi
Erik Shoneman
Francesca Vitale
Vinay verma

India Trade Mission & Study

U.S. Consulate Briefing
 India – A Big Emerging Market
– Skilled managerial and technical manpower
– Extensive rail and road network
– Abundant supply of raw materials
 Business Opportunities
– 4th largest economy in the world
– 2nd largest GDP among developing countries
– Largely English-speaking
 Extremely Attractive to International
Investors
U.S. Consulate Briefing
 Overview of…
– Leading Industries
– Foreign Investment Policies & Incentives
– Foreign Technology Agreements
– Special Economic Zones
– Business Entities
– Mergers & Acquisitions
– Tax Incentives
– Direct & Indirect Taxes
Tiffin Carriers
Tiffin Carriers – In
Action
Completely manual, no
technology!
Each Tiffin changes hands 6
times!
Most Dabbawalas are illiterate!

Better than 6σ Performance!

1 mistake per 6,000,000
Tiffin Carriers -
Mumbai
 Mumbai is very unique
– Reliant upon mass transportation system
 Mumbai Suburban Railway
 6.1 million commuters everyday

 Highest passenger density in the world

– Culturally Diverse
 Extensive business opportunities attract
migrants
 Cuisine is extremely diverse from region to
region
Tiffin Carriers -
Dabbawalas
Company Culture:
 All employees are shareholders
 No management
 Income is shared equally
 Believe serving food is serving
God
 Trusting relations with customers

Results:
 100% Customer Satisfaction
 10% Growth per Year
 Reserve Bank of India
Chandigarh

Noida
New Delhi

Jaipur
Lucknow

Guwahati
Kanpur
Patna
Bhopal

Salboni
Ahamadabad Dewas
Calcutta
Calcutta
Nagpur
Mumbai Nasik Bhuaneshwar

Mumbai

India – A Huge Country

Hyderabad
Byculla

Hyderabad

– Population: 1 Billion
–
Banglore

North to South: 3,200 km

Mysore

Chennai

Trivandrum
– West to East: 3,000 km
– Area: 3,288,000 sq.
km
Reserve Bank of India
 Real GDP
Reserve Bank of India
 Functions
– Bank of Issue
– Banker of Government
– Bankers’ Bank and Lender of the Last Resort
– Controller of Credit
– Custodian of Foreign Reserves
– Supervisory Functions
– Promotional Functions
– Classification of RBI’s functions
 International
Development
Percentage Growth Rate
2004 2005
Q1 Q2 Q3 Q4 Q1 Q2 Q3
Advanced Economies
Euro Area 2.1 2.2 1.8 1.5 1.4 1.1 1.6
Japan 1.7 2.8 2.4 0.4 1.4 2.6 2.9
OECD Countries 3.3 3.7 3.2 2.8 2.6 2.6 2.8
UK 3.1 3.7 2.1 2.9 2.1 1.5 1.7
US 4.4 4.6 3.8 3.8 3.6 3.6 3.6
Emerging Economies
Argentina 9.0 7.1 8.7 9.1 8.0 10.1 9.2
Brazil 5.2 4.7 5.3 4.2 2.6 3.9 1.0
China 9.5 9.6 9.1 9.5 9.4 9.5 9.4
India 6.9 7.6 6.7 6.4 7.0 8.1 8.0
Indonesia 5.1 4.3 5.0 6.7 6.4 5.5 5.3
Malaysia 7.1 8.0 6.8 5.6 5.7 4.1 5.3
South Korea 4.6 5.5 4.7 3.3 2.7 3.3 4.5
Thailand 6.9 6.4 6.1 5.1 3.3 4.4 5.3
Network of Currency
Chests
 RBI is located only in 18 places for currency
operations
 Distribution of notes and coins throughout the
country is done through designated bank
branches, called chests
 Chest is a receptacle in a commercial bank to
store notes and coins on behalf of the Reserve
Bank
 Deposit into chest leads to credit of the
commercial bank’s account and withdrawal,
debit
International
Development
Percentage Growth in Merchandise Exports
Global Scenario (January-September)
2003 2004 2005

World 21.2 21.5 13.8

Industrial Countries 17.4 18.5 10.3

USA 13.0 13.7 10.9
Germany 21.3 21.6 10.1
Japan 19.9 22.0 6.2
United Kingdom 11.4 9.2 11.7

Developing Countries 26.3 26.4 19.1

China, P.R., Mainland 35.4 35.7 32.2
India 28.2 28.2 18.7
Korea 31.0 33.2 12.4
Singapore 24.6 25.5 14.2
Indonesia 12.6 9.2 22.2
Malaysia 20.5 22.2 10.8
Thailand 19.8 20.0 16.1
 Foreign Direct
Investment
Capital Flows (Million USD)
Period 2004-2005 2005-2006

Foreign Direct Investment April-October 2,682 3,631

FIIs (Net) April-December 4,700 5,098

ADRs/GDRs April-October 170 1,427

External Assistance (Net) April-September 346 436

External Commercial Borrowings April-September 1,526 2,752

(Medium and long-term) (Net)
Short-term Trade Credits (Net) April-September 1,963 938

NRI Deposits (Net) April-October -688 231

Foreign Exchange
Reserves
 India’s foreign exchange reserves stood at
139.5 billion USD as of January 13, 2006
 India holds the 5th largest stock of reserves
among emerging market economies and the
6th largest in the world
 India’s foreign exchange reserves continued
to be at a comfortable level and consistent
with the rate of growth
External Debt
 Indicators of Debt Sustainability (%)
March 2004 March 2005 Sept. 2005

Concessional Debt/Total Debt 36.1 33.3 31.6

Short-Term/Total Debt 4.0 6.1 6.7

Short-Term Debt/Reserves 3.9 5.3 5.8

Reserves/Total Debt 101.1 114.8 115.1

 India’s total external debt registered at

124.3 billion USD at end-September
2005
 India’s Trade
India’s Trade April through July 2004-2005

Export Import
US $ million %∆ US $ million %∆
2003-04 2004-05 2004-05 2003-04 2004-05 2004-05
World 56,086 70,493 25.7 70,315 95,646 36.0
Africa 3,434 4,725 37.6 2,936 3,401 15.8
America 11,866 14,610 23.1 6,325 7,996 26.4
Asia 17,236 21,553 25.1 17,980 22,750 26.5
Middle East 8,250 11,058 34.0 3,964 7,576 91.1
Europe 14,505 17,492 20.6 17,981 23,559 31.0
Oceania 637 737 15.6 2,471 3,480 40.8
 
Australia 522 621 19.0 2,355 3,282 39.3
National Commodity &
Derivatives Exchange
Limited (NCDEX)
 Established in 2003 under the Companies
act of 1956.
 Located in Mumbai
 NCDEX currently facilitates 44 commodities
The largest being cotton, rice, wheat,
 Operates at a national level.
 Purpose: To match the buyer with a seller
NCDEX cont.
 In India, the average land holding size is 1.47
hectares, and only five to ten per cent of the
farming population has land holdings
exceeding 4 hectares.
 NCDEX intention: to give farmers a market to
sell their goods in and to match them up with
potential buyers.
 To help farmers to take on futures trading in
commodities so as to get higher prices for
their produce.
Mumbai Culture
 Entrepreneurial Spirit
 The Western Influence
Mumbai Culture
Living in the city
The sites, the sounds, the walk-
ability, public transportation and
the people.
A Culture Engaged in
Business
 “Business Prophet”
 Most individuals are
engaged in some sort of
business
 Business enterprises
everywhere
Business Is
Everywhere
 World’s cheapest
telecom rates
 Phone + fax + printer
= communication
center
A Welcoming Culture
Relationship Building
 Guests are honored
 Getting to know us
– From where?
– How do we like India?
– School?
– Family?
 Immediate?
 Married?
– How do we marry?
Thank You to
Everyone!