The Indian Scenario

The Indian scenario By Prem Behl Chairman Exhibitions India Group

Index •

The Indian Economy: An Overview

•

History of the Indian exhibitions industry

•

Exhibitions Venues in India

•

Doing business in India

1.

The Indian Economy: An Overview

The Indian Economy: An Overview The fastest rise in incomes….

70

36 20

1950s

13 1960s

7 1970s

1980s

% rise in per capita income

1990s

The Indian Economy: An Overview The biggest drop in inflation… 9.1

9.5

7.4

4

1970s

1980s

1990s

% decrease in inflation

2000-4

The Indian Economy: An Overview Have prompted a spending boom…

11.4 9.5 6.5

5.9

2000-01

2001-02

2002-03

2003-04

% growth in consumption expenditure

The Indian Economy: An Overview …as well as the highest level of savings

26.6 19.3

21.9

13.8

1980-81

1990-91

2000-01

2003-04

Household savings as % of GDP

The Indian Economy: An Overview The economy is riding high

8.5 7*

6.9 4.4

2002-03

2003-04

2004-05

2005-06

% annual growth in GDP

The Indian Economy: An Overview Additional economic indicators: • India is the 4th largest economy in the world as measured by purchasing power • Between 1980 and 2003, India’s economy grew at an average rate of 5.7% • During the same period, India’s real income per head grew by 125% • Dr. Manmohan Singh, Finance Minister in 1991 and architect of India’s economic reforms, is the current Prime Minister

The Indian Economy: An Overview • India has a consumer base of 1.2 billion people, and   • The youngest population of the world – hence sustainable, long term growth is assured • Modern (organised) retail converging with the consumption boom will open up many opportunities for small and mid-size consumer companies • With upper income and rich classes growing rapidly and deprived classes actually falling, India’s income demographics will actually be unrecognizable by the end of the decade

The Indian Economy: An Overview • Home ownership is on the rise with 5 Million homes added every year, approximately 1.5 Million new homes added in urban areas • Mobile telephone subscriber base has grown from 0.3 Million in 1996 to over 55 Million currently; expected to grow to 200 Million by 2008 • 13 Million credit card holders currently & growing at 40% p.a. • Passenger car sales of USD 5 Billion in 2004, more than twice the level of sales five years earlier

The Indian Economy: An Overview Consumption share of GDP Per Capital Consumption

70

Population Dependency Ratio 5

60

4

40

3

30

2

20 1

10 0

China

India

Growth at the margin US $ Thousands

Percent

50

will close the gap between India’s per capita consumption and China’s

0

•

Private consumption currently accounts for 64% of Indian GDP – higher than Europe(58%), Japan (55%) and China (42%)

•

Emerging consumerism from one of the world’s youngest population

Population Dependency Ratio = Ratio of Pop aged 65 years or over to the population aged 15-64 (Source: Morgan Stanley)

The Indian Economy: An Overview Indians are Younger than the World…

Median age in years

50 45

44

44 40

37

36

35

31

30 24

39

39

38

30

24 India

USA

China

Russia

UK 2000

2025

The Indian Economy: An Overview

India in 2050

BRICs = Brazil, Russia, India, China Source: Goldman Sachs, “Dreaming with the BRICs”

…..with the highest growth rate of BRICs 5-Ye ar Period Av e rage Perce nt Pe r Annum

ly It a

ce an

Fr

G

er

m

an

y

UK

sia

n

il

Ru s

az Br

pa Ja

di a In

Ch in

US

50,000 45,000 40,000 35,000 30,000 25,000 20,000 15,000 10,000 5,000 a

US 2003 $ billions

India will be the 3rd largest economy….

8 7 6 Brazil

5

China

4

India

3

Russia

2 1 0 2005-10

2015-20

2025-30

2035-40

2045-50

The Indian Economy: An Overview Analysts’ View of the Indian Economy •

“India is on the cusp of something big….[I] am as enthusiastic about India as I was about China in the late 1990s. What excites me most is the potential for an increasingly powerful internal consumption dynamic – the missing link in most development models.” Stephen S. Roach, Chief Economist, Morgan Stanley Equity Research Global, October 31, 2005

•

“A dynamic and open India would have an important impact on the world economy. If India continues to embrace globalization and reform, Indian imports could increasingly operate as a driver of global growth as it is one of a handful of economies forecast to have a growing working-age population over the next 40 years.” IMF, World Economic Outlook, September 2005

2.History of the Indian exhibitions industry

History of the Indian exhibitions industry • The history of Indian exhibitions dates back hundreds of years • Take, for example, India’s huge Pushkar Mela – now a great tourist attraction • Thousands of camels are traded on the sands of Rajasthan annually, even today

History of the Indian exhibitions industry • Soon after independence, in the late 1940’s, the Government set up the Directorate of Exhibitions under the Ministry of Commerce • An exhibition ground in New Delhi was developed to host the Railways exhibition in 1952 to mark the centenary of railways in India

History of the Indian exhibitions industry 1970 • The Trade Development Authority (TDA) was set up in 1970 under the Ministry of Commerce

1972 • The fair ground was christened “Pragati Maidan” • Pragati Maidan hosted “Asia’72: third Asian International Trade Fair” coinciding with India’s Silver Jubilee Year of Independence

History of the Indian exhibitions industry 1977 • The Trade Fair Authority of India (TFAI) is formed by an Act of Parliament with the aim of organising trade shows

1992 • The India Trade Promotion Organisation (ITPO) is formed by merging the Trade Development Authority (TDA) with the Trade Fair Authority of India (TFAI)

3.

Exhibitions Venues in India

Exhibitions Venues in India

• Exhibition ExhibitionVenues Venues • International InternationalAirports Airports

Exhibitions Venues in India New Delhi Name

Area (in sqm.)

Pragati Maidan Owned and managed by the Indian Trade Promotion Organisation (ITPO)

60,000

Outdoor Area

Additional facilities

(in sqm.)

10,000

2 Conference Halls (capacity – 200 each), 4 theaters

Exhibitions Venues in India New Delhi • Pragati Maidan is a massive venue of 149 acres in the heart of India’s capital city • The venue’s 16 exhibition halls and other facilities are ageing and far from being world class • The ITPO has proposed to completely modernize and revamp the venue by 2010 (subject to approval by the Commerce Ministry)

Exhibitions Venues in India Greater Noida Name

Area

Additional facilities

(in sqm.)

India Expo Center Owned by the Export Promotion Council for Handicrafts (EPCH)

7,500

1st phase of construction complete. Another 20,000 sqm., as well as a 5 star hotel, to be built by 2008

Exhibitions Venues in India Mumbai Name

Expo Center Owned by the World Trade Center Bandra Kurla Complex Owned by the Maharashtra Dev. Co. Bombay Exhibition Center Owned by Nesco Ltd.

Area

Outdoor Area (in sqm.)

Additional facilities

2,500

n/a

n/a

n/a

50,000

Organisers typically set up air conditioned hangars

60,000

n/a

Non air-conditioned halls

(in sqm.)

Exhibitions Venues in India Chennai Name

Chennai Trade Center Owned by the Indian Trade Promotion Organisation (ITPO) and the Govt. of Tamil Nadu

Area (in sqm.)

Outdoor Area (in sqm.)

6,800

3,000

Additional facilities

Opened in 2001, 1st phase complete Conference Room (Capacity – 200 people)

Exhibitions Venues in India Bangalore Name

KTPO Exhibition Complex Owned by the ITPO and the Karnataka Industrial Area Development Board (KIADB)

Area

Outdoor Area

(in sqm.)

(in sqm.)

5,500

4000

Additional facilities

Opened in 2004, 1st phase complete Conference Room (capacity – 200)

Exhibitions Venues in India Hyderabad Name

Hitex Exhibition Center Jointly owned by the Govt. of Andhra Pradesh and the private sector

Area

Outdoor Area

(in sqm.)

(in sqm.)

10,000

30,000

Additional facilities

Opened in 2003 1st phase complete

Opportunities Aplenty • The need for quality trade shows and venues is apparent • If India and China are Asia’s emerging giants, then India is falling terribly behind in its trade fair development • China has approximately 150 exhibition centers and 3 million square meters of exhibition space • India, according to our calculations, has 6 dedicated exhibition venues and 90,000 square meters of indoor exhibition space – this is estimated to increase by 40% in 3 years

4.

Doing business in India

Doing business in India • There exists a myth that doing business in India is difficult. With the right Indian partners, this is not at all the case United Nations World Investment Report 2005 • A TNC (transnational corporations) survey has ranked India as the third most attractive investment destination • In the same report, a UN expert opinion group ranked India as the second most attractive investment destination

Doing business in India Indian Trade Promotion Organisation (ITPO) • In order to organise a trade show in India, an organiser must gain approval from the ITPO • For leading trade show organisers, this is a straight forward and simple process • This approval consists of a Customs Notification allowing the duty free temporary import of goods to be displayed

Doing business in India Customs • In line with international practices, there exists a well established system allowing foreign participants the facility of duty free temporary imports for exhibitions • India is a signatory to the ATA convention. ATA Carnets are accepted at all major exhibition destinations in India

Doing business in India Freight Handling • There are professional and experienced exhibition logistics companies that provide a full range of services • The scope of services range from customs clearance to on site handling with modern mechanical handling equipment and a skilled work force • These logistic service providers have an extensive international network

Doing business in India The following is a brief list of leading freight forwarders

• • • •

RE Rogers India Pvt. Ltd. Translink Express (I) Pvt. Ltd. Schenker India Pvt. Ltd. Orient Marine Lines Pvt. Ltd.

The following is a brief list of leading stand constructers

• • • •

Pavilions & Interiors India Pvt. Ltd. PICO International Exhibitions Pvt. Ltd. Meroform (India) Pvt. Ltd. Kingsmen Fairtech International Pvt. Ltd.

Doing business in India Reforms in Exchange Control & Taxation Exchange Control •

All investments can be on a repatriation basis

•

Original investment, profits and dividends can be freely repatriated

•

Foreign investors can acquire immovable property incidental to or required for their activity (Source: Ministry of Commerce & Industry, Government of India)

Doing business in India Reforms in Exchange Control & Taxation Taxation • Companies incorporated in India are treated as Indian companies for taxation • There exists a Double Taxation Avoidance Agreement with 65 countries • Peak Custom duty has been reduced to 15% • Corporate Tax has been reduced to 30% • Tariff to be aligned with ASEAN levels • Value Added Tax introduced in some States from 1st April 2005 • Transparency in Tax Structure: Online/ ICT Applications (Source: Ministry of Commerce & Industry, Government of India)

Thank You

The Indian Economy: An Overview