INDIA : THE NEW OPPORTUNITIES [power-point presentation ]
This presentation was made at the Manipal University in the context of India – Kuwait Roundtable held on 15-16 January 2007.
2. The paper aims at exploring the new opportunities opening up in India and to identify a few areas in which India – Kuwait cooperation (includes commercial/business activities as well) can take a new direction.
3.Slide – 1 is just the title and the context of the talk.
4.Slide – 2 presents the key features of the Indian Economy. Sustainable and robust GDP growth and continuing economic reforms are presenting new opportunities. Indian economy is no longer closed and there is a large amount of externalisation. Some of these data are presented in the next few slides.
5.Slide – 3 Data on Indian Economy 2005-2007.
6.Slide – 4 is the desegregation of growth in terms of sectors and years (Slides 2, 3, 4, 5, 6 & 7 are taken from CII sources, such as its websites, India Brand Equity Foundation (IBEF) documents, etc.)
7.Slide – 5 shows the shift of the Indian economy say from 1990-91 and 2005-06. There is a remarkable shift towards the services sector. However, this does not mean that Agriculture & Manufacturing are fading away. On the contrary, the economy is shaking out its inefficiencies. For example even while Agriculture may remain at 20% or may increase to 25% (most likely hover around 20%) of the overall GDP, there will be lots of efforts in increasing the yield, productivities and efficiencies in the use of the natural resources (water, energy, fertiliser, marine etc). [Agriculture mentioned here includes other primary productive items like cattle, fisheries etc]. There will be demands for value addition and emphasis on phytosanitary conditions and concern for environmental impact.
8. Thus Indian Agriculture will be lifting itself to absorb much higher levels of science and technology inputs. Investments in water management, energy sources and other infrastructure to assure phytosanitarty conditions, will be on the rise. Improved equipment, testing systems (soil, chemical, biological etc.) will be introduced in the primary agriculture, dairy, meat industry, poultry fishing etc. There are many business opportunities in this sector – mostly adaptation of known science and available technologies in the Indian context. Perhaps a large manufacturing of these equipment infrastructure items may be a big opportunity.
9. As a corollary to the increasing value addition, technology levels and investment, it will be necessary to grow a Agro-Food Processing sector much beyond the present levels of its being primarily in the cottage industry status. While a few major high end plants are welcome, noting the distributed nature of agriculture, milk etc., production and with a need to spread employment all around the country, high-tech but small volume Agro Processing units have to come around village clusters and Tier 3 towns in India. These units can be under big corporates as a part of their chains. Technically these units will not be called Agriculture in economic classification and appear in Manufacturing. But this sector will be a great business opportunities in the coming decade.
10. Of course now coming to Indian Manufacturing Sector, it is in its great renaissance period. Many existing units are upgrading themselves with new equipment, so much so that capital goods (mother of manufacturing) sector is growing at about 34%. Now about 2/3rd of CNC machines are imported. So with many capital goods for other industries, Construction Industry demands a large amount of new mechanised and articulated equipment. There is a large such list not to mention the automobile sector.
(Kuwaiti joint ventures or fully Kuwaiti companies can take advantage of these opportunities).
11. Services sectors will have mind boggling developments from tourism, hospitality, media, financial services, IT, ITES, BPO, KPO etc to many other creative industries. (Kuwaiti companies can try to have many joint ventures in India to serve a global market).
12.Slide – 6 indicates FDI and FII investments into India. They are growing Investors getting good returns.
13.Slide – 7 The story does not just end in the above. Indian companies are so buoyant and confident that they invest abroad as well in a steadily increasing way. During 2005-06 outward FDI from India equaled the inward FDI.
14.Slide – 8 To be balanced in understanding India, one cannot stop in the above. While numbers will look big since India is a large country, when reduced to per capita numbers, Indian figures have problems. The reason to understand it is not only to solve India’s problems but also to find new business opportunities in that process.
15.Slide – 9 & Slide – 10 have appeared in a number of places in YSR’s writings and presentations. They are crucial to understand Indian economy and society. Hence we will be giving brief here.
Slide 9 shows that benefits of globalisation are not uniform. The two red arrows show the problem areas : URBAN SLUMS, and POORLY CONNECTED VILLAGE which are not being given investment, knowledge and skills. They suffer from low productive agriculture, low value artisan products etc.
Slide 10 presents in a different form and identifies the poverty zone (in which the people are trapped in low knowledge – skill – low – productivity syndrome. To raise them to higher level is the whole challenge of India’s development. At least 2/3rd of the population is in the syndrome or close to it. To unleash them creates new opportunities.
16.Slides 11, 12, 13, 14 show the high end HUMAN CAPITAL of India – fairly large investment by Govt. in S&T.
15.Slide – 15 describes the Demographic Dilemma. See this in the website (www.ysrajan.com) while the Gross Enrolment Ratio (GER) in Higher Education is currently around 7 to 8% it needs to increase to 40%. There is a plenty of scope for private actors (including foreign ones).
16.Slide – 16 shows some Higher Education statistics. While IIT’s, & IIM’s have done well, they are miniscule in numbers. Also they are well funded. If foreign / private investors target small (upcoming) colleges as per the experience of TIFAC – REACH benefits will be greatly amplified. Such investments – say a few tens of lakhs of rupees – need not always be for returns in ROI sense. They can be used to gain a great goodwill in a local area which later can be a entry place for bigger business ventures.
17.Slide – 17 There are many more opportunities such as in Health Sectors. Joint Kuwaiti – Indian hospitals in India and Kuwait can be a great service provider for many clients from Arab world and mid West. (Also a good business).
18. Similarly utilising the large number of high science, high engineering Human Capital in India, Kuwait may even establish fully owned or joint venture type R&D centres in India to own Intellectual Property of world class (which can be sold or commercialised later).
….. Many more
19.Slide – 18 : India – Kuwaiti relation need not be versus somebody else. The author believes Technology as a Binding Force in an Interdependent World. (More can be seen in the book).
20.Slide 18 : (second bullet) Also all the above opportunities do not just appear as market driven. Most items will require various forms of Knowledge Intermediation (KI) which can accelerate many potentials into real possibilities and move them towards implementation (see elsewhere in the website [ysrajan.com] while various e-tools are useful in knowledge exchange for KI intelligent networking between people from different perspectives is crucial.
21. Since India – Kuwait meeting has a component Strategic Partnership and issues such as terrorism last two Slides 19 & 20 address these issues very briefly. They are self-explanatory.