Buy Property In India

India and the Indians have undergone a paradigm shift. There have been fundamental and irreversible changes in the economy, government policies, outlook of business and industry, and in the mindset of the Indians in general.

• From a shortage economy of food and foreign exchange, India has now become a surplus one.
• From an agro based economy it has emerged as a service oriented one.
  From the low-growth of the past, the economy has become a high-growth one in the long-term.
• After having been an aid recipient, India is now joining the aid givers club.
• Although India was late and slow in modernization of industry in general in the past, it is now a front-runner in the emerging Knowledge based New Economy.
• The Government is continuing its reform and liberalization not out of compulsion but out of conviction.
• Indian companies are no longer afraid of Multinational Companies. They have become globally competitive and some of them have started becoming MNCs themselves.
• Fatalism and contentment of the Indian mindset have given way to optimism and ambition.
• Introvert and defensive approach have been replaced by outward-looking and confident attitude.
• In place of denial and sacrifice, the Indian value system has started recognizing seeking of satisfaction and happiness
• The Indian culture, which looked down upon wealth as a sin and believed in simple living and high thinking, has started recognizing prosperity and success as acceptable and necessary goals.
• Graduates no longer queue up for safe government jobs. They prefer and enjoy the challenges and risks of becoming entrepreneurs and global players.

Goldman Sachs Report of 1 October, 2003 "Dreaming with BRICs: The path to 2050" says the following about the future of Indian economy

• India's GDP will reach $ 1 trillion by 2011, $ 2 trillion by 2020, $ 3 trillion by 2025, $ 6 trillion by 2032, $ 10 trillion by 2038, and $ 27 trillion by 2050, becoming the third largest economy after USA and China.
• In terms of GDP, India will overtake Italy by the year 2016, France by 2019, UK by 2022, Germany by 2023,and Japan by 2032. Chinese GDP could overtake Germany by 2007, Japan by 2016, and the US by 2041.
• Among the BRIC group India alone has the potential to show the highest growth (over 5 percent) over the next 50 years. The Chinese growth rate is likely to reduce to 5% by 2020, 4% by 2029, and 3% by 2046.

Stable country and institutions

• Largest democracy with stable, mature, vibrant and exemplary democratic governance and institutions.
• Strong and transparent legal and accounting system.
• Primacy of rule of law and independent judiciary.
• Numerous watchful and proactive NGOs.
• Free, vocal, alert and quality media. 5600 dailies with a combined circulation of 60 million, nearly 15000 weeklies and 20000 periodicals in 21 languages.
• Legal protection for intellectual property rights.

• Large and growing market of 1 billion people of which 300 million are middle class consumers.
• India offers a vibrant market of youth and vigor with 54% of population below 25 years of age. These young people will work harder, earn more and demand more from the market and thereby sustaining growth in the long-term.
• Every month, there is an addition of one million cell phone subscribers. By December 2005, the total number is expected to reach 100 million from 29 million in December, 2003.
• The domestic demand is expected to double over the ten-year period from 1998 to 2007. The number of households with "high income" is expected to increase by 60% in the next four years to 44 million households.
• PC sales in 2003-04 is expected to reach 3 million units from 2.3 million in the previous year.

• The fundamentals of the Indian economy have become strong and sustainable. The macro-economic indicators are at present the best in the history of independent India with high growth, foreign exchange reserves, and foreign investment and robust increase in exports and low inflation and interest rates.
• India is the second fastest growing economy of the world at present.
• The GDP growth in 2003-04 is estimated to be around 7%. The growth rate in the second quarter July-Sept.2003 reached 8.4%. India has recorded one of the highest growth rates in the 1990s. The target of the 10th Five Year Plan (2002-07) is 8%. While the agricultural and industrial sectors have continued to grow, the services sector has grown at a significantly higher pace, and is currently contributing to nearly half of the total GDP. India's services sector growth of 7.9% over the period 1990-2001 is the second highest in the world.
• A unique feature of the transition of the Indian economy has been high growth with stability. The Indian economy has proved its strength and resilience when there have been crises in other parts of the world including in Asia in recent years.
• The foreign exchange reserves have reached a record level of US$ 100 billion as on 22nd December 2003. India is the sixth largest foreign exchange holder in the world. This is remarkable considering the fact that the Forex reserves went under US$ one billion in 1991 before the economic reforms started. This comfortable situation has facilitated further relaxation of foreign exchange restrictions and a gradual move towards greater capital account convertibility.
• Given the large foreign exchange reserves, the Government has made premature repayment of US$ 3 billion of 'high-cost' loans to World Bank and Asian Development Bank and is considering further premature payment of other loans.
• The Government has decided to (i) discontinue receiving aid from other countries except the following five: Japan, UK, Germany, USA, EU, and the Russian Federation and (ii) to make pre-payment of all bilateral debt owed to all the countries except the five mentioned above.
• Since July this year, India has become a net creditor to IMF, after having been a borrower in the past.
• The Government has written off debts of 30 million US dollars due from seven heavily indebted countries as part of the "India Development Initiative" announced in this year's budget speech.
• The external debt to GDP ratio has improved significantly from 38.7% in 1992 to 20% in 2003. This is one of the lowest among developing economies. External debt in September, 2003 was 112.5 billion US dollarges. Of this long-term NRI deposits is $ 27 billion, commercial borrowings $ 24 billion, multilateral debt $ 31 billion, and bilateral debt $ 18 billion.
• The interest rate continues to be reduced and is around 6%. This is the lowest in the last thirty years and this is stimulating consumption and investment.
• After reaching an all-time low of Rs.49.06 per US dollar in May, 2002, the rupee has strengthened against the dollar reaching a rate of US$ 1 = Rs.45.5 in December 2003.

The inflation rate has been contained to 3.4% in 2002-03 and is likely to be 4% in 2003-04.

For more information: www.finmin.nic.in Agriculture

• One of the world's largest food producers (600 million tones).
• World's largest producer of milk, sugarcane and tea.
• Second largest exporter of rice, wheat, fruits, and vegetables. India produces 30 million tones of fruits and 59 million tones of vegetables.
• Food grain production expected to reach 220 million tons in 2003-4. The buffer stock of food grains has reached a record volume of 59 million tones in December, 2001 and stood at 25 million tones in December, 2003.

• Diversified and large industrial base, which is becoming globally competitive. Examples, Tata Steel and NALCO are the lowest cost manufacturers of steel and aluminium in the world. Moser Baer is one of the top three manufacturers of CD Roms in the world. Bharat Forge is one of the leading suppliers to auto giants, such as Ford, General Motors, and Toyota.
• India's Hero Honda is the world's largest motorcycle manufacturer with 2002 production of 1.7 million units.
• The Indian companies have drawn up ambitious plans for expanding and diversifying their manufacturing activities with about 12 billion dollars in the next three years. Most of the companies have been able to generate the funds from their own operations. The areas whose output is being scaled up are automobiles, auto parts, metals, chemicals, pharmaceuticals and electronics.
• The pharma industry's turnover is expected to increase to US$ 12 billion by 2008 from US$ 6.3 billion in 2002.
• The pharma industry of India has become a knowledge-based one and has gained global recognition as a producer of low cost high quality bulk drugs and formulations. Their turnover is expected to increase from US $ 6.3 billion in 2002 to US $ 12 billion by 2008. Some of the Indian companies have gone global with presence in 60 countries, including USA, Europe and China. India is one of the top ten producers of bulk drugs in the world and 60% of India's bulk drugs production is exported. India has the highest number of annual bulk drugs filings (77) with USFDA. India is home to the largest number of pharma plants (61) approved by USFDA outside US.
• The chemical industry is becoming competitive and has very high growth potential for production for local market as well as exports. Bayer AG, the German chemical and pharmaceutical company has identified India as the outsourcing hub for basic and specialty chemicals.
• There are 150 biotechnology companies whose business is growing exponentially.
• The auto parts industry has emerged as one of the country's fastest-growing manufacturing sectors and a globally competitive one with a turnover of US$ 5.1 billion in 2002. This is expected to reach US$ 6.5 billion in 2005. 'Bharat Forge' of India is the world's largest manufacturer of front axles for trucks. India has emerged as an outsourcing center for auto parts. Visteon and Dellphi, the world's largest component manufacturers have entered India for production. Toyota is opening a transmission parts unit in India. Volvo and GM have set up purchasing offices. A rising share of Indian auto parts exports goes to original equipment manufacturers (OEMs).
• Tata Motors have developed cars based on indigenous design and 100 per cent of Indian parts and have established themselves as one of the leaders in Indian automobile industry. It is creditable that they have got a four-year contract for supply of 100,000 cars to UK under the brand "City Rover". Tata is opening a manufacturing plant in Germany for supply of auto parts to Ford.
• Hyundai has made India as the hub for their worldwide exports of small cars.
• India's Hero Honda is the world's largest motorcycle manufacturer with 2002 production of 1.7 million units.
• India is the second largest cement producer in the world with 110 million tons.
• India is the world's premier center for diamond cutting and polishing. Nine out of every 10 stones old in the world pass through India.
• India has a large entertainment industry which produces 800 movies per year overshadowing Hollywood. The turnover is expected to reach US$6.7 Billion in 2005 from US$5.7 billion in 2002.

The number of foreign tourists who visited India in 2003 was 2.75 million. The foreign exchange earnings from tourism reached US$ 3.7 billion. Capital Market

• Vibrant capital market comprising 23 stock exchanges with over 9000 listed companies. Bombay Stock Exchange is the second largest after NYSE. Stock market trading and settlement system are of world class. Indian stock market considered as having the greatest long-term potential in India.
• Sound banking system with a network of 70,000 branches, among the largest in the world. Bank deposit is roughly half of GDP - among the highest in the world.
• According to Credit Lyonnais (CLSA), India is the stock market with the greatest short-term and long-term potential in Asia.
• Market capitalization of stocks traded on the Indian bourses touched an all-time high of US$ 270 billion. Of this, the holding by promoters is about fifty per cent. The number of companies with a market capitalization of over US$1 billion is 48. Of these, 24 companies have reached market caps of US$ 2 billion in 2003.
• India is the best performing market among major countries since the current boom started in May 2003.
• BSE Sensex increased by 70% from January to December 2003 and it is widely expected to repeat this performance in 2004.
• India has the third largest investor base in the world.
• India's stock market trading and settlement systems are world class.
• There are 70,000 bank branches in India - among the highest in the world.
• There are 186 branches of foreign banks operating in India.

• India has emerged as a global player in Information Technology with software exports of 9.8 billion US Dollars in 2002-03. The revenue from exports of IT and related services is expected to reach US$ 57 billion by 2008, according to a Me Kinsey report.
• Of the Fortune 5000 companies 220 outsource their software from India.
• 80 out of world's 117 SEI CMM level-5 companies are from India.

• The domestic BPO sector has been growing at 60-70% annually and its turnover in 2002-03 reached US$2.4 billion from US$565 million in 1999-00. It is projected to increase to US$4billion in 2004 and US$ 12.3 billion by 2006 and provide employment to about a million people from its current level of 200,000. Offshore outsourcing from USA to India is expected to reach US$ 5.8 billion by 2005, US$ 15.9 billion by 2010 and US$ 33.2 billion by 2015. The outsourcing includes a wide range of services including design, architecture, management, legal services, accounting and drug development. Indian companies offer contract research in development of new molecules and clinical research trails.
• India's IT and IT-enabled services exports go to 133 countries. Indian IT companies train people in 55 countries. NIIT alone has 100 training centers in China.
• Business Week of 8th December 2003 quotes Chris Disher of Booz Allen Hamilton Inc as saying "There is just no place left to squeeze costs in the US and that is why every CEO is looking at India and every Board is asking about it.
• The BPO operations of GE capital in India save the company US$340 million a year.

Call Centers

• There are about 200 call centers in India with a turnover of US$ 2 billion and a workforce of 150,000. Two third of this are captive centers run by foreign firms, such as GE Capital, and American Express.

• Well-organized educational system, with internationally recognized excellence in some areas of higher education. 250 universities and over 10000 higher educational institutions producing a million graduates including 200,000 engineers per year.
• Second largest reservoir of knowledge resource- engineers, scientists, managers and skilled personnel and the largest pool of IT manpower in the world. It is estimated that there are 150000 IT professionals in Bangalore as against 120,000 in Silicon Valley.
• The Indian Institute of Technology and Indian Institute of Management have acquired global recognition for their talents and high quality. Multinational corporations do campus recruitment at these institutions.
• Foreign universities and business schools have started thinking about opening branches and research centers in India. Michigan Business School of Economics in exploring possibility of offering courses in India in collaboration with our Indian institutions.
• Well-developed R&D infrastructure with 1,500 research facilities. The Indian Council of Scientific and Industrial Research (CSIR) won 145 US patents in 2002.
• India has joined the select club of countries with advanced technologies in some areas such as space research, atomic energy, supercomputing and oceanography. One among the six countries which have capabilities of satellite launching, production and use of these technologies for development.
• Indian companies and labs filed for 1700 patents in 2003 (from 1200 in 2002) with the US Patent and Trade Mark Office. The number filed in India has reached 15,000 in 2003.
• Other than USA and Japan, the only other country, which has built super computer indigenously, is India.
• According to OECD India has spent US$ 19 billion in 2000-01, putting it among the top ten countries with the highest R&D spend.
• India has become a major provider of biotech information to clients around the world. Sequencing genes and delivering genomic information for big Pharma companies is the next boom industry. India has become one of the prime forces in the development and manufacture of genomic drugs. There are about 170 biotech companies in India.
• India has become a major provider of biotech information to clients around the world. Sequencing
• There are over 100 MNCs who have set up R&D centers in India, including GE, Bell Labs, Du Pont, Daimler Chrysler, Eli Lilly, Intel, Monsanto, Texas Instruments, Caterpillar, Cummins, GM, Microsoft and IBM. The R&D Centre of GE in Bangalore is the largest outside USA employing 1600 researchers and investment of US$ 80 million. The number of patents in USA by the Indian entities of some of the MNCs (upto September, 2002) are as follows: Texas Instruments - 225, Intel - 125, Cisco Systems - 120, IBM - 120, Philips - 102, GE - 95.
• Cummins of USA use its R&D Centre in Pune to develop the sophisticated computer models needed to design upgrades and prototypes electronically and introduce 5 or 6 new engine modes a year.
• Business Week of 8th December 2003 has said "Quietly but with breathtaking speed, India and its millions of world-class engineering, business and medical graduates are becoming enmeshed in America's New Economy in ways most of us barely imagine". It has quoted Paul Saffo of the Institute For the Future in Menlo Park, California as saying "Now Indians are taking the lead in colonizing cyberspace". The magazine has concluded that Indian brainpower is already reshaping corporate America.
• CNBC TV of USA in a series of commentaries on India on 20th October 2003 had the following to say, "For American CEOs trying to grow their companies, the issue is whether they embrace globalisation. If they do, they must have a presence in India".

"Scott R.Baymam President & CEO of GE India in an interview to NBC TV on 20th October 2003 has said "we are using India to maintain GE's global competitiveness through India's huge intellectual talent" Quality of Indian products

• It is not just the low-cost which is driving India's exports. Quality of Indian products has come to be recognized globally. Apart from the ISO certification got by over 5000 companies, some Indian companies have won special recognition for excellence in quality. For example, 5 Indian companies have won the Deming Prize for total quality management while 8 more are preparing for the honour next year. Another 18 manufacturing plants of 10 Indian companies have been recognized by the Japanese Institute of Plant Management for excellence.
• 80 Indian software companies of India have attained the "SEI-CMM (Software Engineering Institute's Capability Maturity Model) Level-5" out of the total of 117 global companies.
• India has the largest number of annual bulk drug filings (77) with USFDA. India is home to the largest number of pharma plants approved by USFDA outside USA. Indian pharma companies have also got certification from European and Australian drug authorities.

• India registered the third highest growth (14%) in exports in the world after China (22%) and Czech Republic (15%) in 2002. Despite the appreciation of Rupee, the exports in the period April-March 2003 increased by 8.8% in dollar terms reaching US$36.5 billion. Imports for the same period increased by 21% to US$47.7 billion.
• Indian pharma exports are expected to increase five fold from US$ 1.5 billion in 2002 when patents expire for drugs worth US$ 55 billion in the next five years.
• Garment exports are expected to increase from the current level of US$6 billion to US$25 billion in seven years.
• India's exports grew by 19.2% in 2002, in a subdued year for the world economy.
• India exported 126,000 motorcycles and 53,000 passenger cars in the first six months of 2003-04.
• Exports of auto parts are expected to increase from US$ 800 million in 2002 to US$ 1.3 billion in 2005.
• Trade with China is expected to reach US$ 10 billion in the next three years from less than US$ 1 billion in 2000. India exports to China increased by 85% in the first nine months of 2003 to US$2.95 billion and imports US$1.59 billion.
• There are 16 companies whose exports are over US$ 40 million, 15 companies over US$ 10 million and 150 companies over US$ 2 million.
• Indo-ASEAN trade has increased from US$2.9 billion in 1993 to billion in 2002-2003. India's goal is to take this to US$30 billion by 2007.
• European Union is the largest trading partner of India with 11.3 of exports from India and 12.5 billion dollar of inputs in 2002-3. USA is the second largest partner, accounting for 10.8 billion dollars of exports and 4.4 billion dollars of imports of India in 2002-2003.

More information on trade on: www.commerce.nic.in

Project exports

• As of 1 December 2003, Indian construction companies are executing overseas projects worth US$ 4 billion. Two thirds of this is turnkey projects.
• In 2003, Indian contractors got 110 contracts worth US$ 1100 million.
• The projects being undertaken by Indian companies includes power, oil, and gas pipeline, LNG terminals and transmission lines besides civil construction. One of the major ongoing projects is a gas pipeline project of US$ 105 million in Tanzania being done by L&T.

• FDI approved in 2003 (January-November) is US$ 5 billion as against US$ 4.66 billion in 2002-03.
• FDI inflows approved in the period April 1991-April 2003 stood at US$ 76.8 billion, of which US$ 33.37 billion has already been realized. USA accounted for $ 16 billion (24.9%). The other major investor countries are Maldives, UK, Japan, South Korea, Germany, Netherlands, Australia, France, Malaysia, and Singapore.
• FII investment increased by almost ten times in 2003 to US$ 7.59 billion, of which US$ 6.5 billion went into equities. In 2002, FII investment was US$739 million. Cumulative FII investment since the equity market was opened in the early 1990s is $ 21 billion. The number of registered FIIs in India is 517.
• According to FDI Confidence Index of AT Kearney (September, 2003) global investors upgraded India from 15th to sixth most attractive FDI destination worldwide in 2003. Manufacturing investors rank India among the top six most preferred investment locations, while service sector investors ranked India as the fourth most attractive destination. India remains as the leading global hub for offshore business processing.
• FIIs are buying into the equities of Indian companies. For example 40% of the stock of Infosys is held by global investors.

• Indian companies have started venturing into other countries for production, acquisitions, and even research and development. Investment abroad by Indian companies in 2002-03 was US$ 1048 million.
• Indian firms have about 440 investments/joint ventures in UK, mostly tech-oriented. India is the eighth largest investor in UK.
• Indian companies have acquired 120 foreign firms in the period 2001- 2003 worth US$ 1.6 billion.
• Seven Indian companies are listed in NYSE and three in NASDAQ. There are over 15 companies listed in LSE.

While the acquisition of foreign companies started off in the IT and related services sector, it has now spread to other areas. Some of the important recent acquisitions are:

• A.V. Birla group has presence in 18 countries and has overseas revenue of US$ 1.8 billion excluding their exports of US$ 900 million. Their overseas employees total 12,000 in 20 countries. They have announced purchase of two copper mines in Australia for US$ 80 million. They have recently acquired a Carbon black manufacturing unit in China.
• ONGC Videsh has invested $ 720 million or a 25% stake in the Greater Nile Oil Project in Sudan, and US$ 1.74 billion in the Sakhalin project in Russia. The company has investments/plans for investment in Vietnam, West Africa, Angola, Myanmar, Libya, Indonesia, etc.
• Tata Motors paid $ 118 million to buy Daewoo commercial vehicle Company of Korea. Tatas are negotiating acquisition of a steel mill in Korea.
• Ranbaxy, the largest Indian pharma company, gets 70 percent of its one billion dollar revenue from overseas operations and 40 percent from USA. It exports to 70 countries, has ground operations in 25 markets and manufacturing in seven countries including China. Recently it has bought a French Pharma Company RPG Aventis for US$80 million. It has earlier acquired companies in UK and Germany.
• Workhardt derives 55% of its revenue from international business.
• Bharat Forge acquired German firm Carl Dan Peddinghaus Gmbh for US$ 28 million. Sundaram Fasteners is buying a precision forging unit in UK.
• Reliance has paid US$ 207 million for the acquisition of Flag Telecom.
• TVS group has set up a motorcycle plant in China and is planning to set up two units in ASEAN region.
• Mahindra & Mahindra has established a subsidiary in USA and is producing 8,000 tractors per year. They have a 20% market share in 25 States ion the 20-60 HP segment.
• Videocon is planning to set up a compressor unit in China, with an investment of US$ 30 million.
• Indorama which already has resins in Indonesia, Thailand, USA and Romania is planning to set up another plant in Lithuania with an investment of US$ 80 million.
• Aurobindo Pharma has bought a pharma unit in China. Cadilla has bought the formulations business of a French company.
• WIPRO has acquired a USA-based consulting company Nerve Wire for $ 18.7 million.
• Tata Tea has bought Tetley of UK for 260 million pounds.
• Amtek is negotiating purchase of a UK auto parts GWK for US$ 40 million.
• Tata Consultancys has set up a software development center in Shanghai. Tatas are keen to set up hotels in China. They have set up a software development centre in Uruguay with an investment of US $ 30 million.
• Infosys is buying an Australian Software firm for US$23 million.
• Taj and Oberoi are expanding their overseas presence including in Dubai, Marrakech, Shanghai and Beijing.

• While India is being globalized, there is also a quiet Indianisation of the Globe. There are about 20 million people of Indian origin outside India. Some of them have become Presidents and Prime Ministers and many have become CEOs of top MNCs particularly in USA. One third of Microsoft employees, one quarter of IBM and one sixth of scientists of Intel are Indians. Four out of 10 Silicon Valley start-ups are run by Indians. The Indians are among the richest immigrant group in USA. The Indians are no longer content to work as employees, they are becoming entrepreneurs. The second largest producer of steel in the world is an Indian Mr. L. N. Mittal. Mittal'smLNM group has units in 11 countries, including USA, Canada, Germany and France and employs 120,000 people from 45 nationalities. It is among the largest steel producers in USA, the second largest in EU and the largest in Central and East Europe. The founder of hotmail is a young Indian, Sabeer Bhatia.
• The success of these overseas Indians has inspired those in India and made them more confident, ambitious and outward looking.
• Indian students are the largest in number among foreign students in USA.