INDIA s EMERGENCE AS A GLOBAL ECONOMIC POWER and implications for Canada

Transcription

1 INDIA s EMERGENCE AS A GLOBAL ECONOMIC POWER and implications for Canada Peter L. Nesbitt Chief Representative, India Export Development Canada pnesbitt@edc.ca 1

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10 Tharoor on Being Indian What does it mean to be an India? Our nation is such a conglomeration of languages, cultures, ethnicities that it is tempting to dismiss the question as unanswerable. How can one define a country that has 2,000 castes and subcastes, 22,000 languages and dialects and 300 different ways of cooking the potato? Shashi Tharoor April 22, 2007, Times of India

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13 Why India?

14 Which One?

15 The New India Mumbai s Domestic Terminal

16 MERCHANDISE EXPORTS TO INDIA ( (E)) (CAD$M) Cdn Exports vs. EDC s Business Volumes ,

17 Let s Talk Exports Canada's Exports to Asia Pacific ( ) % Change (Ave. Ann) Exports Australia 1,463,931 1,471,535 1,659, % Bangladesh 105,830 97, , % China 6,041,453 6,598,284 7,183, % Hong Kong, SAR 1,213,238 1,165,854 1,309, % India 811,355 1,023,963 1,533, % Indonesia 646, , , % Japan 8,408,416 8,912,029 9,221, % Malaysia 393, , , % New Zealand 429, , , % Exports to Asia closing in on $30bln a year Pakistan 321, , , % Philippines 399, , , % Singapore 538, , , % South Korea 2,213,699 2,727,287 3,188, % Sri Lanka 44, , , % Taiwan 1,175,126 1,266,699 1,308, % Thailand 456, , , % Vietnam 101, , , % Total 24,763,432 26,494,267 29,433, %

18 Let s Talk Exports Canada's Exports to Asia Pacific ( ) % Change (Ave. Ann) Exports Australia 1,463,931 1,471,535 1,659, % Bangladesh 105,830 97, , % China 6,041,453 6,598,284 7,183, % Hong Kong, SAR 1,213,238 1,165,854 1,309, % India 811,355 1,023,963 1,533, % Indonesia 646, , , % Japan 8,408,416 8,912,029 9,221, % Malaysia 393, , , % New Zealand 429, , , % Pakistan 321, , , % Philippines 399, , , % Exports to Asia growing at just over 9% a year Singapore 538, , , % South Korea 2,213,699 2,727,287 3,188, % Sri Lanka 44, , , % Taiwan 1,175,126 1,266,699 1,308, % Thailand 456, , , % Vietnam 101, , , % Total 24,763,432 26,494,267 29,433, %

19 Let s Talk Exports Canada's Exports to Asia Pacific ( ) % Change (Ave. Ann) Exports Australia 1,463,931 1,471,535 1,659, % Bangladesh 105,830 97, , % China 6,041,453 6,598,284 7,183, % Hong Kong, SAR 1,213,238 1,165,854 1,309, % India 811,355 1,023,963 1,533, % Indonesia 646, , , % Japan 8,408,416 8,912,029 9,221, % India is Canada s 5th largest Export market in Asia Malaysia 393, , , % New Zealand 429, , , % Pakistan 321, , , % (* Was 7th in 2004) Philippines 399, , , % Singapore 538, , , % South Korea 2,213,699 2,727,287 3,188, % Sri Lanka 44, , , % Taiwan 1,175,126 1,266,699 1,308, % Thailand 456, , , % Vietnam 101, , , % Total 24,763,432 26,494,267 29,433, %

20 Let s Talk Exports Percentage of overall Exports to Asia Percentage of Overall Exports to Asia % Change China 24.4% 24.9% 24.4% 0.0% India 3.28% 3.86% 5.21% 29.5% Exports to India (as a percentage of overall exports to Asia) have increased by 30% in 2 years No change with exports to China

21 Let s Talk Imports Canada's Imports from Asia Pacific ( ) % Ann Imports Australia 1,771,845 1,746,582 1,594, % Bangladesh 491, , , % China 24,099,876 29,477,435 34,485, % Hong Kong, SAR 719, , , % India 1,577,129 1,785,747 1,918, % Indonesia 931, , , % Japan 13,511,164 14,459,515 15,345, % Malaysia Imports 2,633,547 are 2.5x more 2,607,649 than 2,940, % New Zealand Exports 537,881 Trade Deficit 561,683 with 492, % Pakistan 244, , , % Asia is approx CDN $45bln Philippines 956, , , % Singapore 1,189, , , % South Korea 5,825,699 5,356,434 5,763, % Sri Lanka 113, , , % Taiwan 3,930,635 3,894,043 3,877, % Thailand 2,014,539 1,980,485 2,251, % Vietnam 449, , , % Total 60,998,723 66,682,385 73,689, %

22 Let s Talk Imports Canada's Imports from Asia Pacific ( ) % Ann Imports Australia 1,771,845 1,746,582 1,594, % Bangladesh 491, , , % China 24,099,876 29,477,435 34,485, % Hong Kong, SAR 719, , , % India 1,577,129 1,785,747 1,918, % Indonesia 931, , , % Japan 13,511,164 14,459,515 15,345, % Malaysia 2,633,547 2,607,649 2,940, % New Zealand 537, , , % Pakistan 244, , , % Philippines 956, , , % Singapore 1,189, , , % Imports growing faster at South Korea 5,825,699 5,356,434 5,763, % Sri Lanka 113, % 109,109 vs. Exports 113,339 at 9.4% -0.3% Taiwan 3,930,635 3,894,043 3,877, % Thailand 2,014,539 1,980,485 2,251, % Vietnam 449, , , % Total 60,998,723 66,682,385 73,689, %

23 Canadian Companies in India BC Instruments Bell Helicopters Bombardier CAE CGI Fraco Mastclimbers GL&V Hatch Associates Husky Injection Molding Int l Road Dynamics Kryton Buildmart Leggat and Pratt Magic Woods Magna McCains Foods Minaean Building Solutions Newsco Niko Resources Nortel Networks Pratt & Whitney Redknee Royal Bank of Canda RV Anderson Samco-Gallium Sandwell Engineering Scotiabank Senes Consulting SNC Lavalin SunLife Teknion Furniture Transworld Garnet Tundra Semiconductors Wesley Clover India (e.g. Mitel) Woodbridge

24 STRONG ECONOMIC FUNDAMENTALS Growth is driven by domestic demand Population of 1.1 billion (18% of world total) 5 th largest economy in the world (PPP basis) GDP Growth Rate: 9.4% (FY07) ave. 8.6% over last 4years GDP = USD 923bn (FY07) Total Trade / GDP: 32% Moody's Investment Grade Baa1 Surging capital flows (tripled between 2002 and 2006 to $23 billion), FDI inflows of $19bln in 2006 Strong balance of payments position (over 10 months import cover) Declining foreign debt burden (14% of GDP in 2006)

25 INDIA AND THE US ECONOMY Large foreign exchange reserves + Low level of external debt + Domestic consumption = Limited vulnerability to an external shock

26 INDIA s Middle Class Fueling Growth

27 POLITCAL Complex Yet Manageable General elections in 2009 The Father of India s Economic Reforms United Progressive Alliance (UPA), a coalition headed by the Indian National Congress (INC) has been in power since Risks present, but generally not viewed as exceptionally high Prime Minister Man Mohan Singh

28 Supporting Trade & Investment between Canada and India for more than 40 years

29 India s Corporate Titans Confident Vijay Malya of Kingfisher Anil and Mukesh Ambani of the Reliance Groups Kumar M. Birla of the Birla Group Cash Rich Going Global Naresh Goyal of Jet Airways Sunil Mittal of the Bharti Group Ratan Tata of the Tata Group

30 India s Automotive Sector OPPORTUNITY

31 India s Automotive Sector 2 nd Largest two-wheeler (growing at 14.2%) 4 th Largest manufacturer of commercial vehicles (growing at 33%) 10 mln vehicles manufactured in 2007 Auto Parts - A $15billion industry growing at 15% per year Auto exports growing by more than 25% a year

32 GOING GLOBAL Mahindra and Mahindra (M&M) in Brazil & Egypt TVS Motors in Indonesia? Maruti Udyog in Indonesia Tata Motors in South Korea & South Africa

33 Opportunities in AUTOMOTIVE $

34 Tata Nano

35 On building the Nano Innovate, Innovate, Innovate. Redefine your processes and Drive down costs Joe Repovs Chairman, Samco Machinery

36 Opportunities around INNOVATION COST + PROFIT = PRICE PRICE - PROFIT = COST INNOVATION

37 Opportunity? at the Bottom of the Pyramid Prof. C. K. Prahalad 4 Billion People How strategy guru C.K. Prahalad is changing the way CEOs think

38 Fortune at the Bottom of the Pyramid for companies with the resources and persistence to compete at the bottom of the world economic pyramid, the prospective rewards include growth, profits and incalculable contributions to humankind Prof. C. K. Prahalad

39 Opportunities in TELECOM

40 Explosive Growth in Wireless (Million) Wireless Subscribers in India (Projected) 12.5% penetration 40% penetration India = 233 million wireless subscribers as of 12/2007 (12.5% penetration) Canada = million wireless subscribers in Q (52% penetration) Source: COFI, CWTA, Global Insight

41 THE MAJORS No. of Subscribers (mlns) Bharti Airtel * Reliance Comm * Vodafone Essar * BSNL (WLL) IDEA Cellular 55mln 41mln 39mln 31mln 18mln Opportunities: Application Solutions, 3G, WiMax, Multi-media offerings, network performance improvement solutions * EDC Customers

42 IT AND BPO a $64bln business Software and Service Exports - $40bln Challenges talent, manpower and infrastructure issues 5% of GDP (as oppossed to 1.2% - 10 years ago)

43 Opportunities in Media & Entertainment

44 The Faces of Bollywood

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50 INFRASTRUCTURE

51 INDIA needs new Airports Roads Sea Ports Improved passenger and cargo rail systems Public transportation Systems (e.g. MetroRail Systems) Power Water & Waste Water Solutions

52 FRACO MASTCLIMBERS Selling equipment to India s construction firms

53 Bombardier Moving India

54 International Road Dynamics

55 Water & Waste Water Treatment Canadian Playe GE Zenon Eco-Tec Ltd RV Anderson

56 Opportunities in POWER GENERATION

57 INSTALLED CAPACITY Energy Type MW Percentage Total Thermal 86, Coal 71, Gas 13, Oil 1, Hydro 34, Nuclear 4, Renewable 10, Total 135, %

58 Opportunity in RETAILING Country of Consumers

59 EDC CLIENTS IN INDIA

60 How Can EDC Help Canadian Firms Face the Challenges 1. Accounts Receivable Insurance Protection against the non-payment by international buyers due to commercial or political reasons 2. Bonding Services Wide variety of instruments to support bid bonds, performance bonds and warranty bonds 3. Financing Based on corporate risk, sovereign risk and project risk Pre-export financing for exporters 4. Political Risk Insurance (PRI) Coverage against expropriation, inconvertibility and civil disturbance Can be provided to equity investors and/or banks

61 Corporate Mandate At EDC our mandate to support and develop, directly or indirectly, Canada s export trade and Canadian capacity, to engage in that trade, as well as to respond to international business opportunities, guides everything we do.

62 Mandate Test Q- What is the benefit to Canada in participating in this transaction?

63 The Question of Work-Life Balance? K.V. Kamath, CEO of ICICI Bank Sunil Mittal, CEO of Bharti Airtel

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65 Our Team in India THANK YOU Peter Nesbitt Chief Representative India Rajesh Sharma Regional Manager Mumbai Leena Subramanian Admin Assistant New Delhi