A BRIEF ECONOMIC OVERVIEW OF INDIA

India is clearly becoming a more and more important player on the world stage in G20 context, in terms of its role in the global economy. It is very useful for us to exchange ideas and build the basis for future collaboration," according to Mr Ben Bernanke, Chairman, US Federal Reserve.India is the fifth best country in the world for dynamic growing businesses, according to the Grant Thornton Global Dynamism Index. The index gives a reflection of how suitable an environment it offers for dynamic businesses.In addition, India's economic confidence registered an increase of 8 points, to reach 68 per cent in August 2012 as compared to the previous month, according to the 'Ipsos Economic Pulse of the World' survey. This makes India the fourth most economically confident country in the world.India ranks fourth on Ernst & Young's (E&Y) renewable attractiveness index. India ranks second on the solar index, and third on the wind index, as per the latest study by E&Y and UBM India Pvt Ltd.Moreover, Indian firms took pride at the 2012 Platts Top 250 Global Energy Company Rankings. Six of the 12 Indian companies which were in the ranking, also made it to the list of top 50 fastest growing companies.
India is expected to be the second largest manufacturing country in the next five years, followed by Brazil as the third ranked country, as per Deloitte Touche Tohmatsu Ltd (Deloitte).

The Economic Scenario

India is expected to be the second largest manufacturing country in the next five years, followed by Brazil as the third ranked country, as per Deloitte Touche Tohmatsu Ltd (Deloitte).
Some of the other important economic developments in the country are as follows:

• The cumulative amount of foreign direct investments (FDI) equity inflows into India were worth US$ 179,025 million between April 2000 to August 2012, of which US$ 8,166 million was recorded during the April 2012 to August 2012 period, according to the latest data published by Department of Industrial Policy and Promotion (DIPP)
• Total exports from the Indian services sector stood at US$ 11.94 billion in September 2012, up 6.3 per cent from US$ 11.23 billion in September 2011, as per data released by the Reserve Bank of India (RBI)
• Foreign institutional investors (FIIs) remain substantially bullish on Indian markets and have invested over US$ 13 billion into Indian stocks so far in 2012
• Mergers & acquisitions (M&A) and private equity (PE) deal activities witnessed an increase in October 2012 with cumulative value worth US$ 3.1 billion from 90 transactions
• PE firms have invested US$ 2.5 billion in India across 97 deals in the third quarter (Q3) of 2012, registering four per cent increase in terms of value, as compared to US$ 2.4 billion in Q3 of 2011, according to a study by PricewaterhouseCoopers (PwC)
• Foreign institutional investors (FIIs) made a net investment of Rs 11,364 crore (US$ 2.05 billion) in the equity market and of Rs 7,851.70 crore (US$ 1.41 billion) in the debt market upto October 12, 2012 in the current year, according to data released by the Securities and Exchange Board of India (SEBI)
• Foreign investments in Indian markets through Participatory Notes (P-Notes) peaked to a seven month high of Rs 1,46,600 crore (US$ 26.41 billion) in September 2012, sustained by expectations of fresh initiatives by the Government on policy reforms as well as the QE3 in the US boosting investor sentiment
• India is expected to receive remittances worth US$ 70 billion in 2012, emerging on top of the list of developing countries which are expected to receive a total of US$ 406 billion remittances in 2012, according to the World Bank

• Growth Potential Story

  • The Indian pharmaceutical industry is expected to be amongst the top 10 global markets in value terms by 2020, according to a joint report prepared by Confederation of Indian Industry (CII) and PricewaterhouseCoopers (PwC). The Indian pharma industry has been growing at a compound annual growth rate (CAGR) of more than 15 per cent over the last five years and has significant growth opportunities
  • India is one of the leading offshore destinations in delivering engineering research and development (ER&D) services with a market share of 22 per cent. The market in India is expected to grow to US$ 42 billion by 2020, as per a Zinnov study titled, 'Engineering R&D: Advantage India'
  • India would take its new and renewable energy capacity to 54,000 megawatt (MW) by 2017, as per Mr Gireesh B Pardhan, Secretary, Ministry of New and Renewable Energy (MNRE). Currently, the country has a renewable energy capacity of around 27,000 MW
  • The information technology (IT) and business process outsourcing (BPO) sector of India is expected to register a growth of 11 per cent and revenue of US$ 75 billion-US$ 77 billion during 2012-13, according to National Association of Software and Services Companies (Nasscom)
  • The public cloud services market in India is projected to grow to US$ 326.2 million, registering 32.4 per cent growth in 2012, highlighted a report by Gartner
  • As per Venture Intelligence data, the healthcare and life sciences sector has received the maximum investment from private equity (PE) and venture capital (VC) players, attracting US$ 817 million across 29 investments till August 2012, as compared to US$ 421 million worth 38 deals in 2011
  • The specialty chemicals industry of India is estimated to grow from US$ 22 billion to US$ 80-US$ 100 billion by 2020, as per a McKinsey study
  • The entertainment and media industry in India is expected to reach Rs 1,750 billion (US$ 31.53 billion) by 2016, according to a joint study by CII and PwC. In India, internet access and gaming segments have also emerged as the fastest-growing at 57 per cent and 33 per cent CAGR, respectively
  • The Indian food services industry is worth nearly Rs 75,000 crore (US$ 13.51 billion) and is growing at a healthy CAGR of 17 per cent. It is expected to reach Rs 137,000 crore (US$ 24.68 billion) by 2015, according to a report released at the Indian Restaurant Congress

  Road Ahead

  The Government of India plans to make India a teleport hub, enabling it to become an up-linking/ down-linking centre. The Ministry of Information and Broadcasting (I&B) will hold consultations with the industry to explore modalities and finalise the road map for the same, as per Mr Uday Kumar Verma, Secretary, Ministry of I&B, Government of India.
  In addition, India has become a key contributor in global research and of growth in the Asia-Pacific (APAC) region, playing host to one-third of top 1,000 R&D spenders in the world, according to a Zinnov study titled 'Global R&D Benchmarking Study'.
  "The Indian financial markets have witnessed favouritism among the investing diaspora compared to its Asian counterparts such as South Korea, Taiwan, Thailand and Indonesia," a report by Mecklai Financial highlighted.
  Exchange Rate Used: INR 1 = 0.01802 as on November 27, 2012