EDITORIAL
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EDITORIAL |
| Taming the Golden Eagle, the Dragon and the Tiger - Part III |
 An Overview Of IndiaIndia is one of the largest economies of the world. It is a fast growing, free market democracy that has come to the global forefront as a hub for the manufacturing and services industries. It is the fourthlargest economy in the world in terms of purchasing power parity, and the 10th most industrialized country in the world. Its diversified natural and human resource base; a vast consumer market; a well connected infrastructure; sound macro-economic foundation; and other factors, places it in a competitive position on the world platform. Moreover, the process of reforms and the consequent deregulation, liberalization and globalization of the economy has unleashed the enormous growth potential of the country. This has made India a preferred destination for domestic and foreign investments. It has become the second most attractive investment destination among the transnational corporations (UNCTAD’s World Investment Report, 2005), and is among the top three investment hot spots for 2004 to 2007 (UNCTAD’s Corporate Location, April 2004). As a result, India is attracting increased foreign investment, both through foreign institutional investment and foreign direct investment. For instance, the cumulative FDI inflows since August 1991 to September 2006 have amounted to Rs.1,81,566 crore (US$43.29 billion). While, during April 2006 to September 2006, total FDI inflows (excluding reinvested earnings and other capital components) stood at Rs.20,155 crore (US$4.38 billion). The sectors attracting high cumulative FDIs have been electrical equipment, followed by services and telecommunications. Similarly, New Delhi, Mumbai, Bangalore and Chennai are the first four spots recognized as destinations for FDI inflows. India is a federal republic with a central government. It features 28 states, seven union territories, whose capital is Delhi.  Here is the history of the evolution of India’s industrial site selection process. From 1990 to 2000, India’s historical market evolved. Unlike China, India traditionally hosted its own “homegrown” domestic industries; it already has petrochemical, steel, pharmaceutical, and the automotive sectors. India also had “Conservative Rules.” It had few industrial parks, no Special Economic Zones, foreign direct investment was restricted, there were no foreign law firms, and few accounting/consultants were allowed.From 2000 to 2007 India has gone through a market evolution. In 2000, India opened foreign investment and JVs; it promoted a new image for WTO and; it established a basic Special Economic Zone. In 2005, India created a new Special Economic Zone policy; and established export zones without duties. Also in 2005, foreign direct investment opened for infrastructure and construction; however, there is not real estate speculation. In regard to the Special Economic Zones, since 2000, there are 14 established zones. With the new zone policy established in 2005, 61 zones have been approved through 2006. Thirty-six zones were approved this June. The total number of zones in the country stands at 339; with 170 zones pending approval. Leading Locations and Industries  Delhi, the capital, is well suited for automotive, garments, pharma, IT and IT enabling services. The infrastructure of the area has improved in the last four years. Corporations entering this market include Honda, Denso, Baxter Healthcare, Mitsubishi, Suzuki Steel, Maruti and Ranbaxy.Pune is the country’s oldest industrial manufacturing region. It is home to the country’s most engineering schools. It features an automotive cluster of trucks, tractors, cars and parts, and companies include Bajaj Auto and Tata Motors. Pune is located two hours from the new road from Mumbai. It also offers low costs of conducting business. Another auto cluster is found in Chennai, which is considered the Detroit of India, home to Hyundai, BMW and Ford. In addition to auto, it is well suited for textile and IT operations. Another advantage includes its port infrastructure. In Bangalore, the Silicon Valley of India, the high-tech, aerospace, textiles, biotech and call center industries are well suited for the area. Business process outsourcing and knowledge process outsourcing functions are also carried out in the area. Bangalore is home to companies such as Siemens, Hindustan Aeronautics, HMT and BEL. Mumbai is the financial center of India. It is well suited to auto parts companies, textile companies and petrochemical companies. It is also a port city. It is home to companies such as Century Mills, Fiat and Reliance Group, a conglomerate of real estate/SEZ development. Additional industrial destinations in India include Hyderabad, Nasik, Jamshedpur, Nagpur, Visha-Kapataman. Most of these cities are home to traditional domestic Indian sectors. The main players in the Indian real estate market include developers: local, Singapore, Middle Eastern, which are focused on office, retail, and residential. The country is also seeing global investors in development JVs. Starting industrial projects are Tishman, ICICI, Blackstone, Edelweiss and Ascendas. Final Impressions of India India is still an emerging market. Foreign direct investment is wide open for the construction, hospitality and infrastructure sectors. New developers are global based, especially Asian. The country is home to a better bunch of service providers. It features available labor pools in skilled and semi-skilled jobs. It has a growing base of industrial engineers, as well as those involved with business process outsourcing and knowledge process outsourcing functions. The low-down: India will be a favored location if you:
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Source: NAI Mexico, Global Corporate Xpansion Magazine |
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