REALITIES, MYTHS & PERCEPTIONS
ANMOL SOOD JALTEK GROUP 18TH MARCH 2010
DOING BUSINESS WITH INDIA INTRODUCTION
Talk will focus on doing business in India keeping in mind 4 perspectives: 1. INVESTOR 2. TRADE ACQUIRER 3. TRADE DIVESTMENT 4. TRADING RELATIONSHIP I will show a slightly different perspective to TCS! Controversial – POI perspective!
No IST (Indian Standard Time!) – will keep to strict timings (hopefully!) www.jaltek-group.com
JALTEK GROUP INTRODUCTION
Integrated Electronic Design & Manufacturing Solutions
Advanced Vehicle Monitoring and Data Remote Asset Tracking, Acquisition Telemetry Solutions
Integrated Technology Services & Solutions Complementary technology services…. Providing an end to end technology service, from concept, product design and project management through to manufacturing, test and support Design Consultancy & Medical Systems – EquivitalTM Life Monitoring
Leading edge wireless technology solutions….
Providing a range of synergistic wireless products – telematic tracking and monitoring of people and assets and outdoor wireless communications systems
Outdoor Wireless and Fibre Communications Solutions for Data, Voice and Video
Software Design, Development and Validation Services ERP Solution Development and Implementation
DOING BUSINESS WITH INDIA ANALYSIS
Will be in the form of a PEST analysis
Definition of a PEST analysis:
“It is a part of the external analysis when conducting a strategic analysis or doing market research, and gives an overview of the different macroenvironmental factors that the company has to take into consideration. It is a useful strategic tool for understanding market growth or decline, business position, potential and direction for operations.” (Source: Wikipedia) Definition of PEST: Political Economic Social Technological
DOING BUSINESS WITH INDIA POLITICAL
Indian market open to foreign investment.
More open than previously but still some sectors require government approval and some not open to FDI. New Joint Ventures have to meet onerous laws. Court delays, corruption (92nd out of 159 countries), different interpretations of laws in different regions, rampant bureaucracy. Coalition government means smaller, regional parties have greater influence. Decisions therefore harder to make as power spread amongst more parties (think of UK financial market reaction to potential hung parliament in UK).
Stable, equitable political & legal system.
India is an emerging economy but does not have the political risks of African counterparts.
DOING BUSINESS WITH INDIA ECONOMIC
8-10% growth rate encourages foreign investment.
Huge variations in growth rates from region to region. Go to market strategy and commercial viability differs for each region. Must unravel to minimise tax liability through offshore set ups (Mauritius) and SEZ’s.
Confusing tax regime.
India is cheap country with cheap labour meaning cheaper investments.
Appreciating rupee along with double digit wage inflation increases costs. But cheap labour not only to outsource but satisfy local demand. Highly indebted country due to political decision to grow GDP continually. Junk status sovereign debt with public debt to GDP ratio of nearly 70%.
BRIC economy with high growth prospects so has come through unscathed from credit crunch.
DOING BUSINESS WITH INDIA SOCIAL
Cheap, highly skilled workforce.
40% illiteracy in country, only 15% of population attend High School or above, less than 20% of job seekers have had any vocational training. Agreed but still not good enough; unpaved roads, inefficient airports and ports. Inadequate power generation adds huge costs to manufacturing. Some of the most complex and restrictive in the world. Have hampered growth of...