4. Most polarized verdict given by the Indian population since 1991, bringing Congress backed UPA into power with an almost majority. Congress had its best show since 1991.
6. The New Government to have more policy headroom as it would have more bargaining power due its dominant position in the coalition.
7. Since the Communist Left front is not a part of the Government, the current Government can go in for reforms which were stuck due to Left’s opposition in the last term3
36. Stated intention to execute “Fiscal prudence and disinvestment of public sector units, all these issues will be tackled by the Finance Minister in the Budget” Prime Minister Manmohan Singh “The government would speed up its rural electrification programme under which it has brought electricity to over 61,000 villages against targeted 1.18 lakh” Power Minister Sushilkumar Shinde “In the past, there has been enough planning. Now thoughts have to be transformed into action. In a few weeks, a new model will be found so that India can build the highest number of road kilometers. We have to see that all the outlays are utilized” KamalNath - Union Minister for Road Transport and Highways “The issue of deregulation is being discussed and would be put up before cabinet for a decision” Petroleum & Natural Gas Minister Murli Deora “India will intensify its global economic engagement in sync with the country's profile and the Government will take "every possible step" to give a fillip to the industry.” Commerce and Industry Minister Anand Sharma “By the end of this year, process for auctioning 3G spectrum would be completed. Mobile Number Portability, which would allow users to switch operators without changing numbers will begin in October.” Communication & IT Minister A Raja 6
44. Progressive reform process “Indian economy is now ranked 12th largest in the world in terms of GDP……It is projected that it will be the 8th largest economy in the next 20 years with a GDP larger than that of Italy, France and Germany by 2025” CII-AT Kearney ‘MNC Survey’:70% MNCs surveyed say “high likelihood” of making additional medium and long term investments in India 3 out of every 4 MNCs state performance in India ‘met’ or ‘exceeded’ expectations(Source: IBEF) 8
45. StrengthsAdapting to Local Conditions 9 Workable solutions to investing in physical infrastructure McDonald's: unique cold chain network ensures food products move from farms to fork absolutely fresh and at the lowest possible cost Reverse osmosis water treatment plant in every restaurant to provide pure water Developing processes and allocating resources for clearances and approvals (Source: IBEF)
46. StrengthsAbility to Leverage Opportunities In India 10 Opportunity Suzuki: India remained the only major market to grow and saw first half sales moving up by as much as 24% at 4.7 lakh units (Oct 2009) ABB: Parent sales growth 11 per cent while in India subsidiary grew by 15 per cent (FY 2008) Using Indian operations to boost global revenues Colgate: worldwide sales rose by 4.5 per cent, subsidiary in India recorded 26 per cent growth
47. StrengthsUtilising In-born Strengths 11 Well- trained sales force Pfizer: Sales force automation tool ‘Optima’ implemented across entire sales organisation to plan customer contacts and implement marketing programmes ‘Leaders Academy’- comprehensive management development programme Novartis: Dedicated sales force for targeting disease segments more prevalent Corporate Social Responsibility Novartis: Joint Effort to Eradicate Tuberculosis, “Glivec International Patient Assistance Programme,” Comprehensive Leprosy Care Programme Leveraging brand strengths Pfizer: Corex and Becosules are leaders in respective segments Customer care initiatives Volvo: Provides driver training, preventive maintenance and service agreements Works closely with customers to improve vehicle utilisation and returns (Source: IBEF)
48. StrengthsUtilising In-born Strengths 12 Launching high quality, best in design, technology rich products Volvo: FM range of trucks launched recently in India are already Euro III compliant Quality conscious Whirlpool India: initiated Six-Sigma program in 1999 Initiative extended from sales and marketing to customer focus Innovative promotion and advertising initiatives Pfizer: OTC segment brand-building supported by good ads. Campaign for Gelusil tablets won award for Creative Excellence at 36th ABBY Creation of effective distribution network/dealer network Novartis: Process of expanding business into new markets. Planning to enter Tier-II and Tier-III cities and rural markets Wide product portfolio Whirlpool India: Shift in strategy from premium-player to a mass-player. Has introduced products in all price categories (Source: IBEF)
50. However threats remain…Infrastructure India's infrastructure need in next few years is estimated at over US$ 340 billion Power: Total investment opportunity of about US$ 150 billion to generate an additional 78,000 MW in the next five years Road infrastructure: To develop 8,737 km of highways Urban infrastructure: Expected spend of US$ 50 bn over next 5 years Ports: Need of US$ 12.4billion in major ports in the next 9 years (Source: Deloitte Report on Infrastructure Opportunities in India) 14
51. Threats…Operational Issues 15 Time Delays Delays in project implementation for Mittal Steel in Jharkhand Delays in providing Posco a mining license (Source: World Bank, ISI Emerging Markets)
53. Threats…Regulatory Issues 17 India: Industrial Disputes Act (IDA), 1947: requires firm employing more than 100 workers to get state government permission before retrenching workers 45 laws at national level and close to four times that at state government level to monitor functioning of labour markets Labour Laws (Source: BBC) World Bank: India Rigidity of Hiring and Firing Rank: 48. China: 30, Korea: 34, Norway: 30, Singapore: close to 0 In 2004, 482 cases of major work stoppages in India, for China is close to zero (Source: World Bank)
96. Funding options 27 Apart from the above, local borrowing by the Indian company is also an option. This may be done either by securing local assets or under a parent company guarantee. However, the rate of interest under the local borrowings tends to be higher than the rate of interest on an ECB.
128. 150% deduction for all capital & revenue expenditure (excluding Land & Building)Note:Eligibility conditions ,as set out under Income Tax Act ,are required to be complied with to claim the above benefits 30
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Hinweis der Redaktion
Issues in R&D JV in IndiaIndian partners think foreign companies withhold important knowledge and technology.Protection of intellectual property is an advantageIn India, IP is, on the whole, respected, and lawful rights are enforced. Major violators of IP rights are prosecuted. Our interviewees feel that India understands the value of IP and honors it by paying royalties or licensing fees, and they believe that this is an advantage India has over China.Developing India’s own R&D capabilitiesIndia’s ability to perform its own automotive R&D is perceived as a gap between India’s domestic companies and the international automotive companies they compete with, especially in the areas of powertrain and alternative fuels. Indian executives report that this gap is large and may take more than five years to overcome.The cost of running full-scale R&D programs is beyond the grasp of some Indian original equipment manufacturers (OEMs) and many suppliers. Also many Indian OEMs and suppliers have relied on their foreign partners for technology for so long that they have not developed their own competencies.Strengthening India’s supply baseIf India is to compete with established global manufacturers and suppliers on the world stage, then it needs to get on par with those competitors in terms of scale, quality, and delivery capability. Right now India is still catching up to the global multinationals.
