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The India Opportunity & Business Environment 2012: What it is? What are the Challenges? How to Get Involved Rana Sarkar President & CEO Canada-India Business Council Board of Trade of Metropolitan Montreal October 25, 2012. Overview. Who We Are The India Opportunity in Box

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slide1

The India Opportunity & Business Environment 2012: What it is? What are the Challenges? How to Get Involved

Rana Sarkar

President & CEO

Canada-India Business Council

Board of Trade of Metropolitan Montreal

October 25, 2012

slide2

Overview

  • Who We Are
  • The India Opportunity in Box
  • Market Challenges and Solutions
  • Common Mistakes to Avoid
  • Steps to Winning in India
  • New Reforms
slide3

Founded in 1982 the Canada-India Business Council serves over 100 members in Canada and India. The C-IBC is Headquartered in Toronto with operations in Vancouver, New Delhi & Montreal.

slide4

We’re the National Trade Promotion Organization Dedicated Exclusively to Building the Canada-India Trade Corridor

  • Convening Key Players Across Borders
  • Proprietary Research
  • Effective Advocacy & Policy Development
  • Network Thickening
  • Building Connectivity
  • Building Mindshare
  • Trade Facilitation & Innovation
  • Accelerate Bilateral Trade, Investment and Deal Flow
  • Institution-to-Institution Relationship & Network Building
  • Raise the “Mindshare” of India in Corporate Canada and Canada in India
  • Create Option Value for our members
  • Generate unexpected outcomes in future industries

Mission

How We Do It

slide5

India Opportunity

Drivers

  • Global Economic Re-alignment Makes India Inevitable for Canada
  • Relationships between BRICS that will be transformative - Triangles
  • 3rd Largest Economy by 2050
  • Market Access
  • Bottom Billion Innovation
  • Demographics
    • Rich before Old
  • Urbanization
    • 250M moving to cities
  • Globalization & Googlization
  • Domestic Consumption
  • Entry of Bottom Billion
slide6

“Asia is returning to its natural “half share” of the world economy”

Dominic Barton , Global Managing Partner, McKinsey

slide11

Indian aspiring middle classes are growth drivers

Deprived: Less than $2,250 in annual income

Aspirers: $2,250 to $5,000

Seekers (Middle Class): $5,000 to $12,500

Strivers (Middle Class): $12,500 to $25,000

Globals: > $25,000

slide14

Anatomy of the Growth Story

  • Indian Reforms Started Almost 30 Years ago - Hour of Necessity
  • Accelerated in 1991 Liberalization of the License Raj and Re-opening to the world (on Indian Terms)
  • Gains were Consolidated and Sent over the Tipping Point in 2000 - Y2K Dividend - IT leads the way
  • Cross Party Consensus - Question is Pace Now
economic crisis is forcing reform sept 2012
Economic Crisis is Forcing Reform: Sept 2012
  • Permit foreign investment of up to 49% in power trading exchanges.
  • Disinvestment (or privatization) of India’s government corporations has moved into a new progressive phase with a target of over $5 billion.
  • India's government has approved the Insurance Amendment Bill, which proposes raising the level of Foreign Investment allowed in the Insurance Sector to 49% (up from current 26%)
  • The cabinet also cleared up to 49% Foreign Investment in Pension Companies – a sector previously closed to foreign investment.
  • Relaxation of Restriction on Single Brand Retail (IKEA & WalMart)
  • Reducing Fuel Subsidies: It also announced a 14% rise in the price of diesel, which is heavily subsidised in India, and reduced the subsidy on cooking gas cylinders.
  • Civil Aviation: foreign carriers allowed to buy a 49% stake in Indian private airlines – opportunity to be part of India's remarkable growth in passenger traffic.
  • FDI in all broadcast-carriage services has been raised to 74% from 49% previously – could help fund India's digitization plan.

Indian Farmers Fertiliser Cooperative (IFFCO) and La Coop fédérée announced a $1.2 Billion investment to establish a urea production nitrogen fertiliser plant in Bécancour. (octobre 2012)

= new partnerships

slide16

Growth Drivers

  • US$ 311 B in Reserves
  • Attracted over 100B in FI
  • P/E Deals of over 10B in 221 Transactions (ave. deal size up 19m-44m)
  • Stable Banking System
  • 25% Savings Rate
  • Bad Loans are 2% (vs 20% in China)
  • Domestic Driven Growth (Consumption is 64% of GDP vs 42% in China)
  • “Bottom Billion” Opportunities - Bringing 500m into the Consumptive Economy in 10 Years
  • Services and Capital Intensive Industries Lead Growth
  • 300M English Speakers by 2015
  • Exports are only 13% of GDP (vs 40-130% in other Asia)
  • Only 20% of Exports are to the US
slide17

Challenges to Growth - What Can Stop the Train?

Why it’s Likely to Stay on the Rails

Governance

Education

Poverty Amidst Urbanization

Infrastructure Gap

Adapting to Climate Change

Regional Instability

Black Swans

Tipping Point in Growth

Demographic Dividend

China Example

Attitude of New India

Democratic Dividend

“Syncretic Gradualism” / Diversity

Management Talent

slide18

What are the Government’s Key Challenges in India?

Steps to Overcoming Them

Brand Canada Confusion - Lack of Visibility

Limited Focus / Little Knowledge / Limited Travel

Overcoming our Federal System

Differences in Cultural Styles

Brand Canada Strategy - New Public Diplomacy – New Strategic Plan

Senior Government / CEO Travel and Forums

Start Where We are Globally Excellent

Focus on Education

Harnessing the Diaspora Dividend and our Weapons of Mass Attraction - Gen 1, 1.5 and beyond

Capturing the Symbolic focus - Tactics Towards Mindshare - Using Events and Popular Culture

slide19

Common Mistakes to Avoid for Business – more to come from subsequent presentations

  • Don’t Get Distracted by the 100,000 foot view
  • Not Doing Your Homework
    • Wrong Plan, People, Partners and (No) Patience
    • Not Getting Over There: Out of Sight / Out of Mind
    • Not Knowing Your Strengths
  • Unrealistic Time Horizons
  • Getting Overwhelmed
slide20

Which Sectors Should We Focus On? Focus on Need & Expertise

Energy & Resources

Clean Tech

Infrastructure

Global Excellence Capability

Agriculture

Financial Services

Automotive

Life Sciences

Mining

slide21

What to Do:

  • Know Your Strengths
  • Pinpoint Your Targets
  • 4 Ps
      • Plan
      • Partners
      • People
      • Patience
  • Focus on the Needs of the Bottom Billion
  • Use the Networks - DFAIT, EDC, C-IBC, BT Metro Mtl., STEP etc.
  • Go there – Episodic to the Strategic