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Success stories in India

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Success stories in India

A steady and growing market size, abundant availability of natural resources for manufacturing, cost attractiveness, reliable business community, high levels of intellectual manpower, engineering expertise and a reform process that has brought about impressive economic liberalization, has made India a very attractive destination for Foreign investment.

A CII survey of foreign companies doing business in India to chart out the success of their operations in India echoed the following opinion:

• It was profitable doing business in India

• The investment policies were among the best in the world and conducive to attracting FDI

• The demand for their products was very good and they were increasing their production and production capacity

• Their companies would like to be the ambassadors of future FDI in India.

Automotive sector

Ford India

• Ford Motor Company is the world’s second largest automotive company. Vehicles produced by Ford are sold in over 200 countries. The company employs over 300,000 people and have sold over 7 million vehicles in 2001.

• In November 1995, Ford established a joint venture company with Mahindra & Mahindra (M&M). The company was re-christened Ford India Limited in February 1999, following a change in equity pattern with Ford holding the majority stake.

• The company has made an investment of over US$ 350 million and has the capacity to manufacture over 50,000 vehicles per annum.

• Ford India has exported over 28,000 CKDs (completely knocked down kits) to South Africa and Mexico in 2001, constituting over 66 per cent of total car exports from India.

• Among the other initiatives launched by the company, it unveiled Ford Assured in 2000 to buy, recondition and sell various models of used cars. It introduced Quality Care, a branded service initiative in India, the first country outside of the United States to implement this initiative. Ford Credit has been set up to provide financial solutions and services to consumers of Ford cars. The Ford Business Services Centre services the accounting requirements of Ford Motor Company globally.

• It has entered into a strategic tie-up with Hindustan Motors to manufacture engines and transmission units for its cars.

• Mr. Vinay Piparsania, Ford India said, “The company has received very good response from the Indian market. It feels that the investment climate in India and the policies of the government were very conducive to attract FDI.” The company feels that further rationalisation of taxes and further growth of infrastructure could stimulate the domestic market.

Daimler Chrysler India

• Mercedes was not just looking at the cars market in India but has started tapping into the auto components market too. The company has been manufacturing auto components in India and export them leveraging the cost advantages. The company has recorded significant turnover of US$ 35 million in a period of one year. Mr. Suhas Kadlaskar, Head, Corporate Affairs and finance, Diamler Chrysler India commenting about market response said, “There was a clear shift in customer preferences from price to comfort and life time asset value and that was the reason the company would be bringing latest technology and latest models to the Indian market. The company manufactured 1350 cars in 2001 and would increase it by 15-20 per cent in 2002.”

Hyundai Motors India

• Hyundai is South Korea’s top automobile manufacturer. Hyundai Motor India Limited, a wholly owned subsidiary set up operations in India in 1996. The company entered India with significant investments and a long term business plan, evident from the fact that it set up its largest production base outside Korea in India. The company also brought rigorous quality standards and technology innovation.

• The company has sold over 350,000 cars in a record time of 50 months since commencement of commercial production. Hyundai Motor India has set up a fully integrated state-of-the-art manufacturing plant near Chennai. The plant has one of the most advanced production, quality and testing capabilities in the world. The company has recently announced a US$ 350 million expansion plan aimed at making the company’s Indian operations a global export hub.

• Hyundai India recorded a sales revenue of over US$ 714 million for the financial year 2002. The company registered a 13 per cent growth in revenues and a 59.6 per cent growth in profits over the previous financial year.

Successes in the two wheeler segment

• ‘Honda Motorcycles & Scooter India’ was incorporated in 1999. The company manufactured 40,000 units in 2001-02 and looking at the response and the demand for the products, has increased its target by 40 per cent for 2002-03 and preponed its plan to increase production capacity.

• Yamaha Motor India is positive about the response that Yamaha received in India. The company started its operations in India in 2001 and hopes to break-even in 2002 and make profits from the next year. The company is the only 100 per cent Yamaha company in Asia, outside Japan.

Consumer electronics

Samsung India

• In a short span of six years since its entry into the Indian market in December 1995, Samsung India has positioned itself as a leader in the high-tech consumer electronics and home appliances market in the country.

• It holds significant market share in the colour television, frost free refrigerators, washing machines, air conditioners and micro wave ovens segments. Samsung India has set up an R&D Centre at NOIDA which serves as the regional R&D hub for India, Middle East and South East Asian region.

• Samsung Electronics India Information and Telecommunications limited formed in May 2000 has product portfolio that constitutes of PC monitors, hard disk drivers, laser printers, multifunctional products and mobile phones. Samsung has also set up its software operations unit in Bangalore.

Food processing

PEPSICO India

• Pepsi is one of the most well known brands in the world today available in over 160 countries. The company has an extremely positive outlook for India. “Outside North America two of our largest and fastest growing businesses are in India and China, which include more than a third of the world’s population.” (Pepsico’s annual report, 1999)

• This reflects that India holds a central position in Pepsi’s corporate strategy. India is a key market for Pepsico, and at the same time the company has added value to Indian agriculture and industry. PepsiCo entered India in 1989 and is concentrating in three focus areas – Soft drink concentrate, snack foods and vegetable and food processing.

• Faced with the existing policy framework at the time, the company entered the Indian market through a joint venture with Voltas and Punjab Agro Industries. With the introduction of the liberalisation policies since 1991, Pepsi took complete control of its operations. The government has approved more than US$ 400 million worth of investments of which over US$ 330 million have already flown in.

• One of PepsiCo’s key strategies was to develop a completely local management team. Pepsi has 19 company owned factories while their Indian bottling partners own 21. The company has set up 8 greenfield sites in backward regions of different states. PepsiCo intends to expand its operations and is planning an investment of approximately US$ 150 million in the next two-three years.

Coca Cola India

• The Coca Cola company started operations in India in 1993 after an absence of 16 years. To reach India’s 300 million soft-drink consumers, the company distributes its products through over 700,000 retail outlets.

• Coca Cola India directly employs over 7000 workers. Over the past nine years , the company has invested over US$ 827 million in India with over US$ 800 million in its bottling subsidiary.

• Significant growth has come from Kinley, its packaged water brand, which claims to have around 35 per cent share of the packaged drinking water market. The company regards India as a strong growth market along with China and the Philippines.

Telecommunications

Motorola India

• Motorola, a US$ 40 billion company, is global leader in providing integrated communications solutions and embedded electronic solutions.

• Motorola India first entered India through a joint venture with Blue Star to manufacture modems. It then went on to become a wholly owned subsidiary.

• In 1991, Motorola set up its first software centre in Bangalore. In 1994, it set up a Pager manufacturing unit in Bangalore. With the Pager market not taking off in the country, the company has since shifted strategy and the unit is changed into a cellular phone manufacturing facility.

• In 1999, Motorola set up two chip designing units around Delhi, and a third one in Hyderabad. All of these units including the software centre are 100 per cent export units meeting the company’s global requirements.

• India is now well-established as a source of software and chip design, and as a source of excellent capital for Motorola globally. The number of software engineers employed by Motorola in India has gone up from 100 to a current level of 2000 engineers.

Singapore Telecom

• Singapore Telecom is a leading provider of international, local and mobile telecom services in Singapore. The company has invested over US$400 million for a 17.7 per cent stake in Bharti Televentures and 20 per cent in Bharti Telecom.

• This is the largest investment by an international investor in the Indian telecom sector and Singapore Telecom’s second largest investment overseas. Singapore Telecom has also entered into a joint venture with Bharti Telesonic to build, operate and maintain a cable landing station.

• Global telecom equipment manufacturers like Motorola, Ericsson, Nokia are also active in the Indian telecom industry.

Financial services

GE Capital

• GE Capital India, a wholly owned subsidiary of GE, was set up in 1993. It began operations in India through its financing activities, primarily serving the local market. In the years, a deeper understanding of the market has enabled GE to reach out and leverage the local market strengths to service global markets.

• GE Capital has been very satisfied with the handling of FDI approvals and applications by the Central government as well as by the telecom authorities and other government agencies. GE Capital is set to become one of GE’s largest service centre in the world providing back office services for a whole range of activities including credit cards, finance, etc.

• GE capital has grown rapidly in India over the last 2-3 years at 50-100 per cent per annum. Its current strength is about 6000 employees and a hiring rate of about 400 new people every month. GE Capital is currently doing business to the order of about US$ 750 million to US$ 1 billion per annum. GE Capital expects to double in size over the next 3 years.

Infrastructure

P&O Ports

• P&O (Peninsular & Oriental) Ports of Australia and Port of Singapore Authority International (PSA International) are among the largest investors in the port sector in India.

• P&O received the first container terminal (near Jawaharlal Nehru Port) in the country to be offered for private participation. The project is called the Nava Sheva International Container Terminal. The terminal started operations in 1999 and within one year, it had surpassed JNPT in handling container traffic. P&O holds 95 per cent equity in the project.

• P&O is also operating and managing the Chennai container terminal. The company will invest US$ 100 million in the first five years. P&O is confident of being able to increase the productivity from the current 350,000 TEUs to 800,000 TEUs.

• P&O Ports has recently invested in the new container terminal at Mundra port in Gujarat.

British Gas

• British Gas, British Petroleum, Shell, Unocal, Cairn Energy have been among the biggest foreign investors in India and are planning to build a significant integrated gas business in the country.

• British Gas (BG) has invested US$ 350 million to buy out the entire share of Enron Oil & Gas. The company’s assets included 30 per cent stake in the lucrative Panna & Mukta oil and gas and Tapti gas fields. It also has a 62.6 per cent interest in an exploration block.

• BG has acquired a majority stake in Gujarat Gas, which distributes gas within the state. The company has also set up a 50:50 joint venture with GAIL to supply gas in Mumbai.

CMS Energy

• CMS holds around 20 per cent stake in 235 MW gas/naphtha fuelled combined cycle power project promoted by GVK Reddy group at Jegurupadu in Andhra Pradesh. This was the first fast track Independent Power Producers project to start operations in India.

• CMS Energy and ABB are the major promoters of the 250 MW lignite-based power project at Neyveli, Tamil Nadu. The project has achieved financial closure and is under construction.

• CMS Energy, along with Unocal, Woodside Petroleum and Siemens are part of a consortium which plans to set up a 1,885 MW LNG-based power project at Ennore, Tamil Nadu.

Jet Airways

• Jet Airways started operations in May 1993 with a fleet of four aircrafts serving 12 destinations. By March 2002, it has grown to over 38 aircrafts flying to about 44 destinations and has over 245 daily flights. Its fleet comprises of modern aircrafts including B 737-800, B 737-400 and ATR 72-500.

• Jet Airways’ current market share stands at around 44 per cent of the country’s domestic passenger air traffic.

• The airline uses the training facilities of Ansett (Australia) to train its pilots and engineers. Jet Airways has marketing tie ups with British Airways, KLM Royal Dutch Airlines and Northwest Airlines.

• The airline was awarded the prestigious Air Transport World Award 2001 for Market Development.

Engineering

Rolls-Royce India

• Rolls-Royce one of the most famous names in engineering has been doing business in India for over 60 years with more than 1000 aero engines in service with the military and civil operators. The company has a strong and evolving partnership with Hindustan Aeronautics Limited (HAL).

• On the industrial side, the company has more than 100 gas turbines engaged in off-shore oil and gas pumping and more than 140 diesel engines powering the marine crude oil pipelines in India. The marine division of the company also provides marine power equipment and designs for the commercial marine sector in India.

• The company feels that significant future potential exists in the scope for new partnerships in manufacturing, design, analysis and software development as well as in traditional engineering.

Information technology

Oracle India

• Oracle India started its Indian operations in August 1993 and today has software development facilities in Bangalore & Hyderabad with over 600 people. Oracle is the world’s second largest software company with annual revenues of more than US$ 10.9 billion. The company has operations in more than 145 countries around the world.

• Oracle India has achieved a CAGR of about 40 percent since its inception and has a market share in excess of 50 percent in the Random Database Management System (RDMS) segment

• Oracle sells more call-centre software in India than the rest of Asia Pacific combined.

Biotechnology

Monsanto

• Monsanto India Ltd, a subsidiary of Monsanto Co. USA was incorporated in December 1949 as a private limited company in Mumbai and was converted into a public limited company on 1 July 1978. Monsanto India, which has a strong presence in herbicides and seeds business segments, made a net profit of US$ 6 million on sales of US$ 67 million in 2001-2002.

• Monsanto India is very active in the biotechnology sector, and sells genetically modified Bt cottonseeds. The company has been working with the University of Agricultural Sciences (UAS), Bangalore to work on identifying drought tolerant genes, even as its scientists intensify research on drought-tolerant crops.

Entertainment

Star TV

• STAR TV invested US$ 80 million in building up its Indian operation, broke even in 2001 and has been growing at 40-50 per cent per annum for the last 3 years. In 1999, India contributed more than US$ 100 million of News Corp’s 111 million revenues from the Asia-Pacific region. Star TV India is valued at over US$ 2 billion by Communications Equity Associates, an American investment bank, and rated as the most valuable and profitable investment of Star TV group in all of Asia. It presently employs 450 people in India.

• Its channels cover 300 million people in 53 countries in Asia and the Middle East.

• In India, Star reaches 90 per cent of the 30 million cable and satellite homes and operates half a dozen satellite television channels in the country, covering news, entertainment and sports in English as well as in India’s national language, Hindi. It commands a 30 per cent share in viewership and 50 per cent share of advertising revenues.

• Star TV has lined up additional investments of over US$ 300 million in India and hopes to generate 15% of revenues from non-satellite TV sources (FM and internet). Rupert Murdoch, CEO of News Corp has said “Star TV in India presents a much healthier picture than China”.

Retail

Marks and Spencer

• Marks and Spencer, the UK based global retail major, has entered India with an exclusive 7,000 sqft franchisee outlet at Crossroads, a leading mall in Mumbai and as an outlet at the up market Ansal Plaza shopping mall in New Delhi. The objective is to participate in the growing retail business as the Indian retail sector witnesses significant changes. Marks & Spencer’s garment collection in India has been designed to build an everyday wardrobe and the garments will be sourced from all over the world.

Argyle Diamonds

• Argyle Diamonds is the world’s single biggest producer, with 40 million carats. India is the largest processor of diamonds, with over 70% of the world trade in diamonds being cut & polished in the country. The Indo Argyle Diamond Council® (IADC) was started in 1994 with the aim of making a name for Indian diamond jewellery manufacturers through promotions and EVS (Exclusive Viewing Show) events.

• IADC also helped Indian diamond manufacturers improve productivity and product quality, through better cutting techniques for their goods developed by Argyle and training for Indian cutters. Argyle also introduced new diamond-impregnated scaifes to Indian diamond factories, setting a new standard for quality. IADC has helped Indian manufacturers understand the needs of the US market. As a result, since 1994, IADC member jewellery sales have grown from a few million dollars to over US$100 million.

• “The Indo Argyle Diamond Council is the flagship for Argyle’s market support activities” Source: Argyle Diamonds Industry Review – 2001.

Healthcare

Max Healthcare

• Max healthcare is an alliance between Harvard Medical International and Max India. The vision is to deliver world-class healthcare with a service focus, by creating an institution committed to the highest standards of medical and service excellence, patient care, scientific knowledge and medical education.

• Max Healthcare intends to be the first truly integrated system in India, offering within one model, all three levels of care – Primary Consultation Services (Dr Max™ Clinics), Secondary ambulatory care and diagnostic centers, (Max Medcentre™) and Tertiary care hospitals (Max Hospitals). The company plans to complete this multi-facility model in Delhi with a targeted investment of US$ 92 million by 2005, before expanding to other parts of India.

Parkway Group

• The Parkway Group manages hospitals under the brand names Gleneagles and Mt. Elizabeth and accounts for 70% of the private healthcare market in Singapore. The group has its operations in Singapore, Malaysia and Brunei. To bring healthcare of international standards to Kolkata and the region, they have, in partnership with the Apollo group, set up Apollo Gleneagles Hospital. The Apollo Gleneagles Hospital, Kolkata is a 325-bed (Phase 1) multi-specialty hospital, built at a cost of US$ 29 million. This is proposed to be the first in a series of hospitals to be managed by the two groups.

Higher Education

India’s higher education sector successes are the envy of the world and attracting foreign universities to develop linkages with Indian Institutions of higher learning. Foreign students are keen to avail India’s low cost advantage without compromising on quality. The Indian School of Business (ISB), Hyderabad, set up three years ago, is one such research-oriented, independent, management Institution, offering high quality Post Graduate, Executive and Doctoral Programmes for students from all over the world. It has been promoted by India’s corporate sector in partnership with the best educational institutions in the US and UK. The expenses on education in ISB are nearly one-tenth of the cost of education in USA. ISB offers intensive programme courses of much shorter duration. The course duration of ISB Post Graduate Programme in Management is one year compared to the two-year duration for the same course in USA. ISB has formal affiliations with The Wharton School at the University of Pennsylvania, The Kellogg School of Management at Northwestern University and London Business School (LBS). The degrees given by ISB enjoy high reputation as they bear the signatures of the Deans of these Institutions.

Higher Education

India’s higher education sector successes are the envy of the world and attracting foreign universities to develop linkages with Indian Institutions of higher learning. Foreign students are keen to avail India’s low cost advantage without compromising on quality. The Indian School of Business (ISB), Hyderabad, set up three years ago, is one such research-oriented, independent, management Institution, offering high quality Post Graduate, Executive and Doctoral Programmes for students from all over the world. It has been promoted by India’s corporate sector in partnership with the best educational institutions in the US and UK. The expenses on education in ISB are nearly one-tenth of the cost of education in USA. ISB offers intensive programme courses of much shorter duration. The course duration of ISB Post Graduate Programme in Management is one year compared to the two-year duration for the same course in USA. ISB has formal affiliations with The Wharton School at the University of Pennsylvania, The Kellogg School of Management at Northwestern University and London Business School (LBS). The degrees given by ISB enjoy high reputation as they bear the signatures of the Deans of these Institutions.

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List of MEA Publications

Ministry of External Affairs, India

Written by Bhushan Kulkarni

December 29, 2006 at 10:52 am

Posted in Uncategorized

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  1. Reblogged this on kiaralynn25.

    kiaralynn25

    September 2, 2014 at 8:30 am


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