hsbc doing business in india

7/31/2019 HSBC Doing Business in India

1/25

Doing business in India


2/25

2

Contents

Section 1 India An Overview

Section 2 Trade

Section 3 Doing Business In India

Section 4 HSBC In India

Disclaimer: This presentation pertains to investment issues, fnancial markets

and other related areas and is or inormation purpose only. Investors andinterested parties should seek to get relevant business related inormationdirectly rom the concerned government body


3/25

3

Section 1 India An Overview


4/25

4

Population: 1.17 billion (Est. 2009)

Average literacy rate is 65%

Land area: 1.27 million square miles (1/3 o US)

Languages: 18 Languages (English widely used)

About India Snapshot

2005

785877

India GDP (USD Bn)

11151175 1175

1381

16381800

1600

1400

1200

1000

0

200

400

600

800

2006 2007 2008 2009 2010e 2011e

Source: HSBC Research

Did you know India is the worlds

largest democracy


5/25

5

Investment Climate

Favourable demographics (Rise o the Great Indian Middle Class)

More than 35% o the Indian population is between 15 35 (Working population to rise to 70% by 2030) 2nd astest growing HNWI market (20.5%) with over 100k HNWIs (Merrill Lynch Report)

Access to labour and skills (Cost Advantage)

Over 380 universities, 11,200 colleges and 1,500 research institutions

Worlds largest pool o English speaking scientists & engineers

Labour cost (US$ p.a.) @ 2200, as against 3600 China, 6600 Brazil, 8500 Poland

Less than US$ 7,500 p.a. or a call center agent in India (US$ 19,000 in US, US$ 17,000 in Australia)

Financing (Credit Growth 30%+)

Credit ratings o SMEs introduced

Firms new investments fnanced by commercial bank credit: 27.7% (India) v.s 14.7% (globally)*

Inrastructure

Largest road network in the world (3.85Mn kms)

12 major & 187 minor ports over 7,500 kms o coastline

5th largest installed power capacity o 123GW Privatization o airports, ports, road projects

* World Bank survey

Did you know India is 1 o only 3

counntries to make itsown supercomputers


6/25

6

Section 2 Trade


7/25

7

GDP to touch USD 1,600 Bn by 2011 rom USD 785Bn in 2005

(over 100% growth in 6 years)

GDP growth rate in the 7% - 10% range over the last 5 years

Growing trade relations and wider diversifcation across countries

Share o US in total trade down rom 14.1% in 1991 to 11.4% in 2008-09

Share o China up rom 0.9% in 1991 to 5% in 2008-09

ASEAN, WANA and South Asian economies account or 37% o Indianexports and 39% o imports

Foreign trade growing at a rate more than twice the growth rate o GDP

India in the global context


12th largest, 2nd astestgrowing economy


8/25

8

Trade fows India

Source: Ministry o Commerce, Govt. o India (2008-09)

4.6% share in exports and 2.5% share in imports

Amongst top 5 export destinations or India

Rank Imports (Top 10) %Growth %Share

1 China 19.7 10.7

2 UAE 76.5 7.8

3 Saudi Arabia 2.6 6.6

4 USA (11.9) 6.1

5 Iran 13.1 4.1

6 Germany 21.5 3.9

7 Switzerland 21.6 3.9

8 Australia 42 3.6

9 Kuwait 24.5 3.2

14 Singapore (5.7) 2.5

Rank Exports (Top 10) %Growth %Share

1 UAE 56.5 13.2

2 USA 2.0 11.4

3 China (13.9) 5.0

4 Singapore 14.4 4.6

5 Hongkong 5.4 3.6

6 UK (0.8) 3.6

7 Germany 24.7 3.4

8 Netherlands 20.9 3.4

9 Saudi Arabia 37.7 2.8

10 Belgium 6.5 2.4


9/25

9

Trade fows and FDI India/Singapore

Major items o trade

Exports rom India:

Mineral oils & uels

Jewellery, precious stones

Electrical machinery

Aluminium and products

Imports into India:

Products o mineral oils

Electrical equipment

Organic chemicals

Optical/Medical instruments

FDI rom Singapore to India:

Exports rom India:

FDI rom Singapore to India:

Cumulative FDI : USD 9.5Bn (9% share)

Highest inows rom any country apart rom Mauritius

2006

5.30%

4.80% 4.50%

4.60%

5.43

Exports from India (USD Bn) % Share

6.05 7.38 8.44

6%

5%

4%

3%

2%

1%

0%

9

8

7

6

5

0

1

2

3

4

2007 2008 2009

2006

2.3%

3.0%3.2%

2.5%

3.35

Imports into India (USD Bn) % Share

5.48 8.12 7.65

3.5%

2.5%

3%

2%

1%

0.5%

1.5%

0%

9

8

7

6

5

0

1

2

3

4

2007 2008 2009

Source: Ministry o Commerce, Govt. o India


10/25

10

Section 3 Doing Business in India


11/25

11

What can you do in India?

Did you know In area terms, India

is 70% the sizeo Europe

Tap theconsumer base

Tap thecost advantage

Tap thetrade opportunity Access India

Tap industryexpertise

Tap thetalent pool

Tap the nancialopportunity


12/25

12

How can you access India

Foreign Direct Investment: Automatic Route - Equity limits

Insurance (26%) Airlines (Domestic/cargo)/ Telecom services/Private sector banks (74%) Pharmaceuticals, Non banking fnancial companies, Food processing (100%)

Foreign Direct Investment: With Prior Permission (Foreign Investment Promotion Board)

News & current aairs (26%) Broadcasting - Cable, DTH (49%) Trading (100%)

Development o airports (100%)

Foreign Portolio Investment: Investment in primary and secondary markets Registration with Securities and Exchange Board o India

Own up to 10% o the paid-up capital o an Indian company Foreign Institutional Investors can cumulatively hold up to 24% o paid-up capital o a company

Did you know India is 1 o only 3

countries to make itsown supercomputers


13/25

13


Indian Company

Joint Venture

Strategic alliances with Indian partners where sectoral caps exist

Advantages:

Established distribution / marketing set up o the Indian partner

Available fnancial resource & contacts o the Indian partners

Wholly Owned Subsidiary Treated as a domestic company (limited liability) or tax purposes

Advantages:

Provides exibility o operations

Did you know 100 o Fortune 500have R&D acilities

in India


14/25

14


Foreign concern

Liaison Ofces, Representative Ofces

No commercial or industrial activity may be undertaken

Branch Ofces

Manuacturing and Trading companies may open branch ofces

Specifc Central Bank approval required

Indian transer pricing applies

Advantages:

Can acquire immovable property Post-tax profts reely repatriable

Project Ofces

For those that have been awarded an Indian project

Treated as a branch ofce or tax purposes

No prior permission required rom RBI

Did you know India has the worlds

second largest pharmaindustry ater China


15/25

15

Key success actors or doingbusiness in India

Understanding the diversity o the Indian market

Picking the right locations Inrastructure

Skill Customers

Constant innovation: Investment in R&D Patience: Harvest the opportunities


16/25

16

Accessing India A case study

Key objective Sustainability

Business model

Access India:

Plotting theroadmap

Inrastructure

Legal rameworkFinancial

investment


second largestsmall car market


17/25

17

Accessing India A case study

Key Objective Source quality raw materials at a low cost

Manuacture at a low cost or existing customers

Export goods to tap consumer base in India

Manuacture in India & tap the Indian consumer base

Business Model JV with Indian company

Setup Indian company

Part outsourced

Franchise model

Legal ramework - Starting business Registrar o Companies (ROC)

MoA & Certifcate o incorporation

PAN & Tax Account number

Mumbai Shops & Establishment Act registration

Registration or VAT, Proession tax, Employee PF

ESIC (medical insurance) registration

Sustainability Capacity expansion: Rapid growth

Tackling diversity: Local markets

Improving cost efciency: High volume - Low value

Investment in R&D: Local innovation

Inrastructure Location: Government policy Property: Lease v/s buying Supply chain & logistics: Trusted partnership Resourcing: Skill matching

Distribution & Marketing: Market knowledge

Financial InvestmentIf government approval required

Approval by Foreign Investment Promotion Board (FIPB)

Post which below procedure applies

If automatic approval

Notiy RBI within 30 days o receipt o inward remittances

File documents within 30 days o issue o shares30days(Mumbai)


18/25

18

Some attractive sectors

Market sectors with the most upside potential in India in the next three years

Source: Investment Climate in BRIC Nov06: Survey o CFA institute members

Basic Materials

Other

Media & Publishing

Transportation

Oil & gas, energy, utilities

Travel, hotel & tourism

Automotive

Health care, biotech & pharmaceuticals

Agriculture, food processing

Capital goods & industrials

Consumer goods & services & retailing

Real Estate

Construction

Communications, technology & telecoms

Banking, finance & insurance

3%

5%

6%

10%

10%

12%

14%

16%

18%

22%

29%

32%

38%

41%

57%

Did you know India is one o six

countries that launchesits own satellites


19/25

19

Section 4 HSBC in India


20/25

20

HSBC in India

Coverage with 50 branches

Presence in 29 cities

Plan or over 30 new branches*

The Leading International Bank in India

*Subject to approvals

Kolkata

iabmuM

Chennai

Coimbatore

New Delhi

Ahmedabad

Vadodara

Chandigarh

Pune

Nagpur

Visakhapatnam

Trivandrum

Kochi

Noida

Gurgaon

Bangalore

Mysore

Jaipur

Ludhiana

Hyderabad

Indore

Patna

Raipur

Nashik

Surat Guwahati


21/25

21

Trade Services

Export/Import Financing

Documentary Credit

Structured Trade Finance

Instant@dvice

Documentary Collection

9.6% & 9.3% o Indias exports

and imports throughput

Business Finance

Financing o fxed assets andworking capital

Local and oreign currency loans

Channel fnancing

Bill Discounting

Domestic and export actoring

Treasury and Capital Market

Foreign Exchange products

Interest rate products

Customised/ structured solutions

Transaction Banking

Payments & Cash Management

Global e-banking package - HSBCnet

Host to Host solution - HSBC Connect

End-to-end supply-delivery chain solutions

Coverage o 4000 locations - Over 500 top

tier clients

Flexible MIS/Automated ReconciliationServices

A ull servicing oering

Did k


22/25

22

Our Approach

We understand that no two businesses are the same

We understand that each one o you have your unique operating environment

We ollow the Solutions Approach ater thoroughly understanding your business

We strive to provide a unique solution o a bundle o products and services on thebasis o the lie stage o your business

Did you know India is the largestproducer o milk,2nd largest o ood


23/25

23

Providing the right solution at eachstage o the business

Current Accounts

Internet Banking

Access to over 23,000 VISA ATMs

Trade Services

Cash Management

Factoring Solutions

Unsecured Business overdrat

Loans against Property

Relationship Manager

Transaction Banking

Forex management / Treasury

Lending lines or Trade /

Working capital Escrow Services

IPO Services

Term Loans

Commodities Financing

Growth unding (PE / Capital Mkts)

Multi currency accounts

Outsourcing (Payroll / Payments)

Seamless cross border banking

Growth unding

(PE / capital markets)

Aquisition Funding /Investment Banking

Risk management

Initial Stage Growth Stage Consolidation

Start up Stable Business Rapid Growth Niche Market Position Market Leader (Global / Local)Time Scale

BankingR

equirements


24/25

24

A success story

An international IT consulting company, started in 1999, delivering aordable business and technology

solutions. HSBCs total exposure stands at $100M, growing rom $7M our years ago

HSBCFacilities Checking accounts

FX limits

Working Capital

Fex limits

Facilities - $7m

Term loan

PCM and Trade

HSBCnet

Corporate cards (2k)

Cross border

(SGH, UAE, GER, UK)

Derivatives

Collecting bankers

Aquisition unding

Dividend payment

Capex unding ($18m)

Cross border

(Netherlands, AUS, Dubai)

Total Facilities - $60m+

C

orporateEvolves Aggressive growth 2 new centers Acquisition o $10M Goes Public $ 54M

2 new acilities

Acquisition o $6.5M

2004-05

$55m2003-04

$20m

2005-06

$102m

2006-07

$130m

2007-08

$180m


25/25

25

Key achievements

Best Global Supply Chain Finance Provider 2008

Best Pre-Shipment Financing Solution 2008

Best Internet Trade Finance Bank in Central and Eastern Europe 2008Best Supply Chain Finance Provider in the Middle East 2008

Best Trade Finance Provider in the UK 2006 - 2009

Best Trade Finance Provider in HK 2002 - 2009

Best Trade Finance Provider in Saudi Arabia 2009 (SABB)

Best Overall Bank or Cash Management in Asia 2008

Best Overall Bank or Cash Management in Middle East 2008

Best Bank or Payments & Collections in Asia 2008

Best Bank or Payments & Collections in Middle East 2008

Best Global Trade Finance Bank 2008

Best Islamic Trade Finance Bank 2008

Best Trade Finance Bank in the Middle East and North Arica 2008

Leading Trade Services Bank in Asia-Pacifc 2008

Leading Trade Services Bank in the Middle East and North Arica 2008

Best Online Trade Finance Bank 2007 2008

Best Factoring House 2003-2008

Best Trade Finance Bank in the Middle East & North Arica 2006 - 2008

Best International Trade Bank in China 2008

Best International Trade Bank in Malaysia 2008

Best International Trade Bank in Pakistan 2008

Best Factor provider Poland 2008

Best Factor provider UK 2008

Best Debt House Turkey

Best Domestic Cash Management Bank in India, Indonesia, Malaysia, Brunei,

Taiwan and Sri Lanka, 2008

Overall Customer Satisaction Rated No 1 in Asia, 2008Best Cash Management House in Asia, 2008

Best Bank in Hong Kong 2001-2008

Best Cash Management Bank in Middle East, & Arica 2008

Best Bank in Asia or Cash Management, 2008

Best Trade Finance Bank in Asia 1999 - 2008Best Trade Finance Bank in Hong Kong 2008

Best Trade Finance Bank in Taiwan 2008

Best Trade Finance Bank in Vietnam 2008

Most Innovative Trade Solution 2008

Best Transaction Bank in Asia, 2008

Best Transaction Bank in Hong Kong, 2008

Best Cash Management Hong Kong, 2008

Best Cash Management Bank in Southeast Asia, 2008

Best Bank or Payments and Receivables, 2008

Best Trade Finance Bank in Asia 1997 - 2008

Best Trade Finance Bank in Hong Kong 2008

Best Cash Management Bank in Hong Kong, 2008Best Foreign Commercial Bank in China

Best Foreign Commercial Bank in Vietnam

Best Foreign Commercial Bank in Malaysia

Hong Kong Best Local Cash Management Bank

Indonesia Best Foreign Cash Management Bank

Taiwan - Best Foreign Cash Management Bank

Best Trade Finance Bank 2003 - 2008

Cargonews Asia

The Most Innovative Cash Management Provider in Asia, 2008

Best Trade Bank in Asia 2008 Trade and Foraiting Review

hsbc doing business in india

Documents