India

 

• Language:  India has 22 official languages and over 22,000 different dialects.   People from one part of the country might not understand people from another.   English is spoken by about 300 million (elites), and is the common langage (official language of India) that facilitates communication.
• Democracy:  India is the worlds largest democracy
• India is more like the European Union than the United States...with vastly different langages / people in each region.
• China = major trading partner (not USA anymore)
• updated info:  http://www.economist.com/countries/india/

 

Consumers & Web:

many VCs will tell you today that India—where only 50 million people are online and just two million have broadband connections— is still not ready for the consumer Web.

 

Silicon Valley:

Indians who migrated to the U.S. now start nearly one in six of Silicon Valley’s tech firms

 

 

Table of Contents:

India Consumers & Web: Silicon Valley: Places in India: Mumbai (Bombay) Doing Business in Mumbai (Bombay): Macroeconomic profile Central Bank: Inflation targeting? Currency Foreign workers & repatriation: FDI - foreign direct investment in India: Trade data: India vs China - a comparison A growing middle class Business Outsourcing Real Estate India Car Industry India Telecom in India Industrial companies in India: Banking in India: Stock Market Index's Oil & Gas: Commodities in India Challenges Poverty in India Investing Venture Capital in India Private Equity in India PE Deals in India: Religion Muslims in India More info about India: More News A flourishing slum  The uncomfortable rise of the rupee  Entrepreneurial push  Gravity's pull  Too hot to touch  Full-spectrum dominance  The capitalist communist  Links from KookyPlan:

 

 

 

Places in India:

 

Mumbai (Bombay)

 

Read more: World's Greatest City: 50 reasons Mumbai is No. 1 | CNNGo http://www.cnngo.com/mumbai/none/worlds-greatest-city-50-reasons-why-mumbai-no-1-809212#ixzz0VKyi0eIf

 

 

Doing Business in Mumbai (Bombay):

 

As India's largest, most multicultural city, Mumbai is a fairly liberal place and its business culture tends to be professional, but informal and friendly. Mumbaikars are famous for their chalta hain (laid-back) attitude, but traditions still hold in many areas of behaviour so it's wise to be prepared. These tips should help you. read more»

 

 

 

City guide

• Mumbai

 

 

 

 

Macroeconomic profile

 

Central Bank:

Reserve Bank of India may cut interest rates further

 

Inflation targeting?

India is one of the countries that don't target inflation: see a link here where a reputable economist argues that India doesnt need to target inflation due to cultural contraints that will keep infation in line without it.  (controversial)

 

Currency

 

The rupee will weaken almost 10 percent to a record low of 54 to the dollar by the end of the year as the worldwide credit crisis curbs foreign direct investment, HSBC Holdings Plc said.    Last year (2008), the Rupee fell T19 percent slide vs. the dollar.

 

 

Foreign workers & repatriation:

Many indians work abroad and repatriate money back to India.  the credit crisis is exected to hurt this money flow...weakening the rupee  (why?   well...because remittances are people from abroad sending money home...but to do so, they must first BUY home currency...pushing currency value up.  But, if that flow slows down, then currency will fall).   The same is true of FDI....

 

 

FDI - foreign direct investment in India:

expected to fall with credit crisis....should have downward pressure on currency

 

 

Overseas direct investment in India averaged $3.1 billion a month in 2008, compared with $1.3 billion in the previous year, government data show.

“The boom in FDI is long overdue, but cannot last, given the state of corporate finances globally,” Yetsenga wrote.

 

Trade data:

India's trade deficit widened to US$79.1bn in 2007 in balance-of-payments terms, from US$62.1bn in 2006. Exports performed strongly in 2007, rising by 23% to US$151.3bn, but imports jumped by 25% to US$230.5bn, largely owing to higher international oil prices and strong demand for industrial inputs and consumer goods. China overtook the US as India's largest trade partner in 2007/08

 

 

 

India vs China - a comparison

The Indian private sector is more efficient and entrepreneurial than its Chinese counterpart. But China has been very successful in creating infrastructure and delivering essential services, while the Indian state's effectiveness has deteriorated over the last four decades. Since it is easier to create markets than to improve state capacity, China's task—improving the private sector—is more likely to succeed than is India's task of arresting institutional decline.

 

 

A growing middle class

India has about 300 million "middle class" (bigger than all of Brazil combined).

 

see : Rise of purchasing power in emerging markets

 

The middle class currently numbers some 50 million people, but by 2025 will have expanded dramatically to 583 million people—some 41 percent of the population. These households will see their incomes balloon to 51.5 trillion rupees ($1.1 billion)—11 times the level of today and 58 percent of total Indian income.  McKinsey reportmore:  http://en.wikipedia.org/wiki/Standard_of_living_in_India

 

Business

 

Outsourcing

 

India IT market

 

India Tries Outsourcing its Outsourcing

http://www.iht.com/articles/2007/09/24/business/outsource.php

As the world looks to India for its outsourcing solutions, the south Asian nation is looking back for the same reason. In an attempt to better meet evolving global business needs, Indian outsourcing giants are venturing abroad, outsourcing their clients' outsourcing. Stemming from a theory that suggests the eventual spread of outsourcing around the world, India is hoping this bold and novel concept will keep it ahead of countries seeking to imitate its success.

 

Real Estate India

 

Forbes magazine recently ran an interesting article about the creative ways in which an international investor could invest in the "closed" India real estate market

 

 

Car Industry India

 

India car industry - the 2000 dollar car

 

* As of October, 2008 - Tata decided to abandon the plan in West Bengal, and to relocate to the state of Gujarat, a state with a large industrial base and pro-business administration.  The violence threats vs workers in West Bengal were too high. 

*  Planned production in Gujarat will be 250,000- 300,000

*  West Bengal (near Calcutta) will loose 10,000 + jobs , and suffers reputation as anti-business for FDI

*  Note that West Bengal was (before the 60's), one of the most industrialized parts of India -steel, coal, machinery and power production were large industries.

 

 

 

 

Telecom in India

 

Wireless 3G auctions: coming in 2008/09?

 

India's Department of Telecommunications said it would hold electronic auctions to sell space on the airwaves (spectrum) for "third-generation" (3G) mobile-phone networks. The government hopes to raise almost $10 billion from the auctions, which will be open to new entrants, including foreign bidders.

 

More India telecom news:

 

BUSINESS: India's telecoms boom  Talk is cheap 

India leads the world in mobile-phone subscriber growthDec 7th 2006

 

 

Industrial companies in India:

• Reliance Infrastructure Ltd. (RELI IN)
• Mahindra & Mahindra Ltd. - India’s biggest maker of sport- utility vehicles said its board today approved moving its defense business into a separate company

 

 

 

Banking in India:

 

 

1. State Bank of India, the biggest
2. ICICI Bank is the country’s second-largest lender
3. HDFC Bank Ltd., the third-largest

 

 

Stock Market Index's

 

• The Bombay Stock Exchange’s Sensitive Index, or Sensex
• The S&P CNX Nifty Index on the National Stock Exchange
• The BSE 200 Index
• S&P CNX Nifty futures 

 

 

Oil & Gas:

• Oil & Natural Gas Corp the nation’s biggest explorer

 

 

Commodities in India

 

Cotton:

world’s second-biggest cotton producer..."Production may total 29 million bales in the year ending September compared with 32.2 million bales estimated in October, the Cotton Advisory Board said in Mumbai today. Exports may drop to 5 million bales from 8.5 million bales last year."...An Indian bale weighs 170 kilograms (375 pounds)....Domestic demand may be 28 million bales, more than the 24.1 million consumed last year, the board said. The country may have an opening stock of 6 million bales on Oct. 1, the board said. Production last year was a record 31.5 million bales last year. ...nation’s 10 million cotton farmers. ...government-owned companies to procure large quantities from farmers.  Genetic engineere crop:  Farmers planted cotton to 9.37 million hectares this year, of which 7 million is BT cotton, a genetically modified strain

 

Mining and Metals:

 

• Tata Steel, India’s largest maker of the steel alloy
• Steel Authority of India Ltd., the second-biggest producer
• Hindalco Industries Ltd., India’s biggest aluminum producer
• Sterlite Industries (India) Ltd., India’s largest copper producer

 

see more on mining and metals

 

 

 

 

 

 

 

Challenges

Poverty in India

 

see article in the economist: 

 

The residents of Dharavi, allegedly Asia's biggest slum, are thriving in hardship 

 

 

Investing

Venture Capital in India

• Accel India Venture Fund Closes $60 Million Seed And Early Stage Fund

 

 

Private Equity in India

 

Trend 2008:  Private equity is gaining greater acceptance in India where rising borrowing costs and a tanking stock market have shut down other means of funding, forcing family-owned businesses to tap a source they had once shunned.  Indian companies have in recent years embarked on ambitious expansion plans, bolstered by plentiful cash and low interest rates as the economy grew nearly 9 percent annually.  But a global credit crunch and soaring commodity prices have taken a toll of late.  Inflation has climbed to its highest in more than 13 years, driving interest rates to seven-year peaks. Economic growth is expected to moderate this year, while the stock market has fallen nearly 30 percent in 2008, beating down company valuations.  "The tough times are forcing firms to evaluate their business plans and look for help to ride out the storm," Sharma said.

 

Private equity investing in India and China held steady in the first half of the year, the Asia Venture Capital Journal said, with India seeing a 3.2 percent rise to $6.8 billion, and China registering a 3 percent gain to $5.8 billion.

 

Indian private equity deals typically involve little leverage, and private equity (PE) firms have often done growth capital deals and late-stage investments, buying small stakes in private and listed firms.    Still, private equity firms have had a tough time convincing family-owned businesses to surrender some control in return for cash, especially as a six-year bull run meant these companies could get generous valuations from the stock market.

 

With easy IPOs a thing of the past, firms are coming around.  "When the markets recover, firms will choose to tap the market again, but they may now also go to PE, as they are recognizing the value-add that PE brings," said Arun Natarajan, chief executive of research firm Venture Intelligence.

 

Emerging markets' share of private equity deals this year may go beyond the 10 percent it got in 2007, or about $57 billion, according to London-based Emerging Markets Venture Capital Association.

 

Indian family-owned firms tend to be sprawling entities with diversified interests and lacking clear succession plans, which makes smaller firms particularly vulnerable at this time. "Even speaking to a private equity firm was unheard of a couple of years ago for a family-owned business," Natarajan said.  "They see the merit now in selling non-core assets or a stake to PE. It is seen as a better option to selling out to a rival."  Tuscan's Sharma said companies in India were also realizing they want the expertise that private equity brings along: "They want more than just a check. They now want smart money."

 

PE Deals in India:

 

Investment in Ports:  Private-equity firm 3i Group Plc plans to invest up to $229 million for a 26% stake in south Indian port operator Krishnapatnam Port Co. The firm awaits approval from the Foreign Investment Promotion Board, which must greenlight overseas investments into India's market. Reuters (08/27)

 

 

 

 

Religion

Muslims in India

 

Islam in India is the second-most practiced religion after Hinduism. There are approximately 154 million Muslims in India's population as of 2008 (according to government census 2001), i.e., 13.4% of the population.^{[1][2][3][4][5]} Currently, India has the third largest population of Muslims in the world.^[6][7] .  Read more: http://en.wikipedia.org/wiki/Islam_in_India

 

 

 

More info about India:

 

From The Economist

• Business and caste in India

  Oct 4th 2007

• Indian business

  Oct 4th 2007

• Education and caste in India

  May 25th 2006

• Recycling in Asia's biggest slum

  Dec 19th 2007

• India's ragpickers

  Nov 15th 2007

   

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Country briefing

• India

 

More articles about...

• India's economy

 

Websites

National Geographic has photographs of Dharavi.

 

 

 

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