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Business Unit
India - Japan A winning partnership
August 2014
Strictly Private and Confidential
India and Japan: A winning partnership
India is one of the fastest developing economies in the world and ranks among the most sought after investment destinations
• 3rd largest economy in terms of purchasing power1
• The 9th Global Capital Confidence Barometer, October 2013, has reported India among one of the top five investment destination among emerging and developed markets2
• India is ranked as the most attractive investment destination, ahead of Brazil & China2. India accounts for 5.5% of global FDI in terms of value and 6.3% in terms of projects2
• India is the fourth most attractive location for FDI for 2014-2016 as per UNCTAD Report 2014
• India ranks 2nd Most Promising Country for Overseas Business Operations in the Medium Term4;
• India has been rated as Top Investment Destination for the Long Term5
4 India - Japan • A winning partnership
Source: UNCTAD, World Investment Report 2014
Sources: 1World Bank ; 2Ernst & Young Attractiveness Survey 2014; 3UNCTAD’s World Investment Report, 2013; 4JBIC survey report on Overseas Business
Operations by Japanese Manufacturing Companies, 2013; 5JBIC 2011 Survey;
Top 10 prospective host economies for 2014-16
0 10 20 30 40 50
10 Russian Federation
9 Vietnam
8 Thailand
7 UK
6 Germany
5 Brazil
4 India
3 Indonesia
2 USA
1 China
Increase in foreign investments and industrial growth during the May-July period shows the restored confidence in the economy and the new government
5 India - Japan • A winning partnership
Source: DIPP
1444
1927
0
500
1000
1500
2000
2500
June 2013 June 2014
M-o-M FDI Equity Inflows (in USD million)
33%
-1.7 -1.8
1.8
3.4
-3
-2
-1
0
1
2
3
4
Manufacturing IIP
Monthly growth of Manufacturing and overall IIP (%)
Jun-13 Jun-14
• FDI inflows have increased 80% in the months of May-June 2014 (combined) over the same time period in the preceding year
• M-o-M FDI equity inflows have increased 33% in June 2014 compared to June 2013
• Overall Index of Industrial Production (IIP) has grown by 3.4% in June 2014 as compared to 1.8% in June 2013
• Growth rate of Capital goods in IIP has shot up from -6.6% in June 2013 to +23% in June 2014
• Purchasing Managers Index (PMI) as on 1st August 2014 was at 17-month high
• Manufactured exports have recorded 6.6% growth in July 2014 as compared to July 2013
18%
29%
53%
Agriculture Industry Service
GDP at PPP USD 4.62 trillion (4th largest in the world) Nominal GDP USD 4.90 trillion (3rd largest in the world)
GDP at PPP USD 6.77 trillion (3rd largest in the world) Nominal GDP USD 1.87 trillion (10th largest in the world)
Developed country with 1.5% average growth rate One of fastest growing countries with GDP growth rate projections of ~6.5% till 2020
1.2%
27.5%
71.4%
Agriculture Industry Service
GDP Composition
Japan and India share a long history of mutual trust and India offers an array of opportunities for Japanese investors
7 India - Japan • A winning partnership
Source: IMF; World Bank Databank, 2013, India Economic Survey Report 2013-14
Japan-India are Natural Partners
Japan: labour-scarce, abundant capital and technology complementing India’s human capital assets
87% of deposits in India < 5 years thus Japanese long-term savings can be used for Infrastructure development
In the next 30 years India is going to build more than it has in the last 5000 years
India fits in with Japan’s growth
plan thus a partnership is a
“win-win” for both
Japan is the 4th largest FDI contributor to India, with major interests in pharmaceuticals, automobiles and services sectors
Japan accounts for 7.46% of total FDI equity
inflows into India
9 India - Japan • A winning partnership
Source: DIPP
0
10
20
30
40
50
60
70
80
90
US
D b
illi
on
Trend of country wise total FDI of key contributors (during April 2000- June 2014)
Drugs & Pharmaceutic
als 28%
Automobiles 16%
Services sector 15%
Metallurgy 9%
Electrical equipments
4%
Others 28%
Share of top sectors attracting FDI equity from Japan
Top Japanese companies investing in India between 2000-14
1. Daiichi Sankyo 2. JFE Steel Corporation 3. Nippon Life insurance 4. Nissan Motors 5. Matsushita Electrics Works 6. Sumito Mitsui Banking Corp 7. Honda Motor 8. Hitachi Construction 9. Suzuki Motor 10. Mitsui Sumitomo Insurance
Note: Services sector includes Financial, Banking, Insurance, Non-Financial/Business, Outsourcing, R&D, Courier, Tech. testing and analysis
India is the 2nd most promising region for Japanese business operations as per JBIC survey (2013)
As per the JBIC survey report on Overseas Business Operations by Japanese
Manufacturing Companies, ~90% of the respondents voted “future growth
potential of local market” as the top reason for India’s attractiveness
10 India - Japan • A winning partnership
Source: JBIC survey report on Overseas Business Operations by Japanese Manufacturing Companies, 2013
1. Future growth potential of local market”
2. Inexpensive source of labour
3. Current size of local market
4. Supply base for assemblers
5. Base of export to third countries
Top 5 factors identified in favour of investments in India
Bilateral trade between India and Japan has consistently grown over the last decade and remained unaffected by the global economic slowdown
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
2003-04 2005-06 2007-08 2009-10 2011-12
US
$ b
illi
on
Imports by India Exports By India
Japan is one of India’s largest trading partners
India’s Current Imports from Japan India’s Current Exports to Japan
• Boilers, machinery and mechanical appliances, parts
• Electrical machinery, equipment, parts • Iron, steel and alloys • Electronic Products • Photography & Cinematography equipment • Chemicals & Allied Products
• Mineral fuels, mineral oils and products of their distillation
• Ores, slag and ash • Diamonds, jewellery and pearls • Marine Products • Petroleum, Inorganic & Organic Chemicals • Cotton Garments and Textiles
Source: Department of Commerce, GoI
11 India - Japan • A winning partnership
Significance for Japan – Trade
Trade in Service
To be promoted and greater transparency of rules
India: Telecommunication Services, Distribution Services, Financial Services
Natural Person Movement
Social security agreement: Consultations started
Nurses and care-workers: Negotiations for acceptance into Japan
Generic medicine: national treatment provided for approvals of release
Mutual Recognition Arrangements TBT/SPS
Tariff elimination on 94% of bilateral trade
Approximately 97% by Japan and 90% by India Bilateral trade
India: 200 million middle class people, growing market potential Increased
access to large markets
Japan-India Comprehensive Economic Partnership Agreement (CEPA)
12 India - Japan • A winning partnership
Japan-India Comprehensive Economic Partnership Agreement (CEPA)
Significance for Japan – Other Areas
Business environment improvement
India: committed to liberalize its telecom, financial and distribution sectors
Facilitate more investment flow from Japan to India as it provides an atmosphere conducive for Japanese companies to establish their manufacturing base in India
Enhanced Cooperation
Various areas including environment, trade and investment promotion
No discrimination between suppliers
Transparency in procurement measures
National level information exchange on policies and practices
Government Procurement
Possibility of patent protection
Protection of well known trademarks
Trademark applicant can file for accelerated examination
Intellectual Property
Pre-Investment: National treatment provided, prohibition of performance requirements
Post-Investment: All basic provisions of an investment treaty, Additionally national treatment
Investment
This experience should be positive to move cooperation up the Value Chain to manufacturing
13 India - Japan • A winning partnership
Source: Survey on “Number of Japanese Affiliated Companies in India 2013
Delhi (175) Hitachi, SONY, Sharp, Yakult, Rohot、Banks, Trading Firms etc.
Maharashtra(397) Kagome, Shiseido, Asahi Kasei, Bank, Insurance, Security, Shipping,etc. (in Mumbai) Mitsubishi Elec, Ymazaki Mazac, Kawasaki , Bridgestone, etc (in Pune)
Haryana(325) SUZUKI, HONDA, Auto parts suppliers , Manufacturing, Sales companies, etc.
Gujarat(84) Hitachi, Yazaki, TOTO, Toray, Mitsubishi Heavy Indu. etc.
Rajasthan(79) HONDA, Daikin, Uni Charm , Otsuka Chemical, Auto parts Suppliers, etc.
Uttar Pradesh(72) HONDA, YAMAHA, Auto Parts Suppliers etc.
W・Bengal(96)
Mitsubishi Chem., Hitachi Construction Machine., NRI, NSSC, Trading firms etc.
Andhra Pradesh(229) Toshiba Plant Systems, Aishin, Eisai Ajinomoto, Isuzu, KOBELCO, etc.
Tamil Nadu(523) NISSAN, Toshiba, Komatsu, Panasonic, Auto Pats Suppliers, etc.
Karnataka(299) TOYOTA, HONDA, Fanac, NISSIN Foods, CICHIZEN, Fujitsu, Auto Parts Suppliers, etc.
Legend: Name of State (Number of business bases)
Over the last decade, the number of Japanese establishments in India have increased by ~11 times, reflecting the positive sentiments of Japanese investors for Indian market
India is an attractive investment destination for Japanese companies, with 1,072 Japanese companies having 2,542 business bases in India
14 India - Japan • A winning partnership
The new Government has prepared a five pillar strategy to drive India’s growth, which offer multiple avenues of collaboration and investments for Japanese investors
16 India - Japan • A winning partnership
Infrastructure development
Manufacturing growth, Employment creation
and promoting entrepreneurship
Energy sufficiency
Skill development Business environment improvement
Government is focused on improving both the industrial infrastructure as well as the urban infrastructure of the country and has announced several high impact projects in the sector
17 India - Japan • A winning partnership
Urban infrastructure
1. Smart Cities
2. Affordable housing
3. Swachha Bharat project
4. Digital India
Industrial infrastructure
1. Industrial corridors
• Delhi Mumbai Industrial Corridor (DMIC)
• Chennai Bengaluru Industrial Corridor (CBIC)
• Vizag Chennai Industrial Corridor (VCIC) as first phase of East Coast Economic Corridor (ECEC)
• Bengaluru Mumbai Economic Corridor (BMEC)
• Amritsar – Kolkata Industrial Corridor (AKIC)
2. Transport connectivity to North East India
The upcoming industrial corridors provide potential opportunities for Japanese investments across different infrastructure sub-sectors
18 India - Japan • A winning partnership
East Coast Industrial Corridor
• To promote manufacturing in India, five new Industrial Corridors are being planned.
• Each Industrial Corridor will have at least 6 – 8 key nodes developed on Smart City principles measuring more than 200 sq. Km
• DMICDC is the apex authority that is planning these corridors.
DMIC is being developed as a flagship project of partnership & collaboration with Government of Japan and offers several opportunities for investors from Japan
19 India - Japan • A winning partnership
GoI is developing DMIC as a global manufacturing and
investment destination utilizing the 1,483 km-long, high-capacity
western Dedicated Railway Freight Corridor (DFC) as the
backbone.
Nodes Area (sq km)
Ahmedabad Dholera Investment Region 920
Manesar-Bawal Investment Region, Haryana 402
Khushkhera-Bhiwadi-Neemrana Investment Region, Rajasthan
165
Pithampur-Dhar-Mhow Investment Region, M. P. 372
Dadri-Noida-Ghaziabad Investment Region, U.P. 200
Dighi Port Industrial Area, Maharashtra 253
Shendra Bidkin Industrial Park, Maharashtra 84
Key early bird projects Budgetary Support by GoI (Rs mn.)
Vikram Udyogpuri, near Ujjain, Madhya Pradesh 595
Integrated Industrial Township at Greater Noida, UP 6,172
Water Supply Project, Madhya Pradesh 704
Construction of New Rail Line between Bhimnath and Dholera SIR, Gujarat
243
Logistic Data Bank 372
Model Solar Power Project, Neemrana, Rajasthan 353
CBIC is the second corridor project under Japanese Government partnership; aimed at improving the industrial infrastructure and increasing the Japanese investments across multiple sectors in the region
20 India - Japan • A winning partnership
Key nodes identified State
Bidadi Township Area, Ramanagara KAR
Vasanthnarasapura area in Tumkur KAR
Mulbagal in Kolkar KAR
Ponneri Industrial Area TN
Hosur Industrial Area TN
Hindupur Industrial Area AP
Chittoor NIMZ AP
Krishnapatnam Industrial Area AP
A total of 25 priority projects across various sectors have been identified for debottlenecking infrastructure bottlenecks in the region in the preliminary study conducted by the Japan International Cooperation Agency (JICA). The progress on these projects is being regularly monitored at the level of PMO.
The corridor between Chennai – Bengaluru – Chitradurga (around 560 km) would have an Influence Area spread across the states of Karnataka, Andhra Pradesh and Tamil Nadu.
The Vizag Chennai Industrial Corridor is a part of the East Coast Economic Corridor, aligned to the Golden Quadrilateral and is envisaged to play a key role in India’s Look East Policy
21 India - Japan • A winning partnership
1
2
3 4
5
6
7 8
9
10 11
Successor state of AP*
Tamil Nadu
NH 5 alignment
1.Visakhapatnam
2. East Godavari
3.West Godavari
4. Krishna
5. Guntur
6. Prakasam
8. Kadapa
9.Chittoor 11.Chennai
10.Tiruvallur
7.Nellore
In view of the commitment made by the central government under the Andhra Pradesh Reorganisation Act, 2014, in the first phase of the study the ADB will focus on the Vizag-Chennai Section so that a final view on the Vizag-Chennai Industrial Corridor may be taken within the timeline prescribed in the Act and further action taken accordingly.
Key attributes of the corridor
• The Corridor contributes to 5% of national GDP
• Influence area of the corridor is over 110,000 sq. km which is 3.5% of India’s area
• Industrialization will be supplemented by natural resources available in the region (natural gas, minerals, agriculture products).
• The major ports are well connected and in close proximity to many of the East Asian economies (~80% of AP’s coastline) The corridor between Vizag - Chennai (around
800 km) would have an Influence Area spread across the states of Andhra Pradesh and Tamil Nadu.
GoI has announced 100 Smart City projects across 21 states with a view to provide a fillip to the urban infrastructure in the country
22 India - Japan • A winning partnership
New Delhi
Chennai (Madras)
Shvassa Daman Diu Raipur
Bhopal Gandhinager
Bhubaneshwar
Lucknow
Delhi
Chandigarh
Srinagar
Mumbai (Bombay)
Panaji
Trivandrum
Kavaratti
Cuddalore
JAMMU AND KASHMIR
TAMIL NADU
LAKSHADWEEP
GOA
KARNATAKA
ANDHRA
PRADESH
MAHARASHTRA
ODISHA
CHHATTISGARH MADHYA PRADESH
DAMAN AND DIU DADRA AND
NAGAR HAVELI
RAJASTHAN
WEST
BENGAL
JHARKHAND
BIHAR UTTAR
PRADESH
DELHI NCT HARYANA
PUNJAB
UTTARAKHAND
SIKKIM
MEGHALAYA
TRIPURA MIZORAM
MANIPUR
ASSAM NAGALAND
ARUNACHAL PRADESH
GUJARAT
HIMACHAL PRADESH
KERALA
PUDUCHERRY
PUDUCHERRY
BHUTAN
NEPAL
3
5
7 5
6
7
7
4
5 TELANGANA
6
7
4
5
4
5
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3
• The Government has allocated Rs. 70.60 billion in the General Budget to develop the 100 Smart Cities in the country.
• To encourage development of smart cities, with respect to FDI in the construction development sector, the condition for built up area reduced from 50,000 sq. m to 20,000 sq. m and minimum capitalisation norms reduced from USD 10 million to USD 5 million, with three years lock-in.
Source: GoI General Budget, 2014-15
Smart Cities in India is a potential opportunity in the urban infrastructure space for the Japanese investors
GoI is also focused around other urban infrastructure aspects of Affordable housing and Sanitation, and has set definitive goals in these areas
23 India - Japan • A winning partnership
• The Government has announced to set up a Mission on Low Cost Affordable Housing anchored in the National Housing Bank
• A sum of Rs. 4,000 crore for NHB is provided with a view to increase the flow of cheaper credit for affordable housing
• Projects which commit at least 30% of total project cost for low cost affordable housing to be exempted from the built-up and capitalization conditions
The Government intends to cover every household by total sanitation by the year 2019, the 150th year of the Birth anniversary of Mahatma Gandhi through Swatchh Bharat Abhiyan.
Source: GoI General Budget, 2014-15
Source: GoI General Budget, 2014-15
Government is committed to promote manufacturing and employment. The NMP lays the foundation for larger contribution of manufacturing sector in GDP
24 India - Japan • A winning partnership
Objectives of National Manufacturing Policy (NMP):
• To promote investments in the manufacturing sector and make the India a hub for both domestic and international markets
• To increase the sectoral share of manufacturing in GDP to 25% by 2022 (from about 15% presently)
• To double the current employment level in the manufacturing sector
• To enhance global competitiveness of India’s manufacturing sector
• NMP proposes setting up of National Investment and Manufacturing Zones (NIMZs), which would be much larger than SEZs in area (can be viewed as a cluster of smaller industrial areas . SEZs, EoUs etc.)
• A comparison of SEZ and NIMZ Policy reflects Government’s willingness to ease the overall burden on a private developer
Sectors of Strategic Importance
Defence Equipment
Aerospace
Ship-building & Repair
Capital Goods & Engineering
Sectors of Basic Inputs
Steel
Mineral Exploration and Development
Fertilizer
Cement
Sectors for Depth and Value Addition
Automotive
Electronics
Drugs & Pharma
Chemical
Petrochemicals
Paper
Sectors for Employment Generation
Textlies
Food Processing
Leather & Leather Goods
Gems and Jewellery
Source: NMP 2011
25
Auto Auto components Defence
Overview Likely to become 3rd largest auto
market in the world by 2016,
accounting for >5% of the global
vehicle sales
India’s is 2nd largest two wheeler
manufacturer, largest motor
cycle manufacturer and 5th
largest commercial vehicle
manufacturer
Expected size by 2016 is USD
145 billion.
Worth USD 39.7 billion in
FY2012–13
India’s exports of auto
components increased at a
CAGR of 17% during 2008-
13; Exports have risen to
USD 9.7 billion in 2012-13
3rd largest armed forces in the
world.
Largest importer of conventional
defence equipment
70% of defence requirements are
met through imports
Defence budget in 2014-15 is
~USD 38 billion, expected to
reach USD 50 billion by 2018
Investment opportunities
Passenger Vehicles
Two Wheelers
Three Wheelers
Commercial Vehicles
low cost electric vehicles
Engine & Engine Parts
Transmission & Steering
Parts
Suspension & Breaking Parts
Electrical parts
Manufacturing of defence
equipment
Maintenance, repair and overhaul
segment
Engineering services outsourcing
FDI policy 100% FDI is allowed under the automatic route
100% FDI is allowed under the automatic route
Up to 49% under the government
route and beyond 49% through
CCS (in case of transfer of
technology)
Key Japanese investors
Suzuki, Nissan, Toyota, Isuzu, Mitsubishi
Aisin Seiki, Denso, Toray, Shiroki, Mitsui metal, Kikuwa
-
India has the potential to offer myriad of opportunities for the Japanese investors across a wide gamut of manufacturing sectors (1)
India - Japan • A winning partnership
26
Electrical Equipments ESDM Pharmaceutical
Overview Estimated output by 2022 to be
USD 100 billion
The market expanded at a
CAGR of 10.5 per cent over
(FY07–12).
Worth USD 68.31 billion in
2012; anticipated to be USD
94.2 billion by 2015; CAGR of
9.88% between 2011 and 2015
• Accounts for about 2.4 % of the global pharma industry in value terms and 10% in volume terms
• Expected to grow at 12.1% during 2012–20
• Expected to reach USD250 billion by 2020 from the current USD65 billion
Investment opportunities
Generation Machinery: Boilers,
Turbines, Generators
Transmission Machinery
Consumer electronics
Strategic electronics
Medical electronics
Avionics
Fabless manufacturing
Automotive electronics
Electronic Manufacturing
Services
EMCs
• Active pharmaceutical ingredients (APIs)
• Contract research and manufacturing services (CRAMS)
• Formulations
FDI policy 100% FDI is allowed under the
automatic route subject to all the
applicable regulations and laws.
100% FDI through automatic route for ESDM except for defence electronics
• 100% FDI is allowed under the automatic route for Greenfield projects.
• For brownfield project investment up to 100% is under the government route.
Key Japanese investors
Toshiba, Hitachi, MHI Panasonic • Nipro Corporation, Otsuka, Sankyo Daichi, Yoshindo
India - Japan • A winning partnership
Opportunities
27
Construction Food Processing Leather
Overview Second largest employer and
contributor to economic activity,
after agriculture sector.
Accounts for 2nd highest FDI
inflow after the services sector
Worth ~USD 78.5 billion in
FY13; expected to grow to USD
140 billion in FY17.
Industry size is Rs 845 billion
in 2012-13, growing at 8.4%
for the last five years ending
2012-13
Value addition of sector as
share of GDP manufacturing
was 9.8% in 2012-13
Industry size ~USD 11 billion
(exports - USD 6 billion and
domestic market - USD 5
billion)
Exports projected to grow at
24% pa in next five years.
Domestic market expected to
double in next five years.
Investment opportunities
Residential, retail, commercial
and hospitality sectors
Technologies and solutions for
sustainable cities, low cost and
affordable housing, Green
building solutions, environment
friendly building materials
Training and skill development
of construction sector workers
Smart cities
Urban water supply; urban
sewerage & sewage treatment
Fruits and Vegetables
Fermentation products
Beverages
Dairy
Food additives, nutraceuticals
Confectionary and bakery
Meat & poultry
Fish and sea foods processing
Grain Processing
Food packaging
Food processing equipment
Consumer food
Tanning and finishing of leather
products
Manufacturing of leather
garments
Manufacturing of leather
footwear and footwear parts
Manufacturing of leather goods,
such as harness and saddlery
FDI policy 100% FDI is allowed under the automatic route subject to conditions
100% FDI through automatic route for most of the food products except for items reserved for MSME
100% FDI is allowed under the
automatic route subject to all the
applicable regulations and laws.
Key Japanese investors
- Nissin, Kagome, Toyo Suisan -
Opportunities
India - Japan • A winning partnership
28
Chemicals Petrochemicals
Oil & Gas Textile
Overview Size of the industry (2012-
13) is around USD 144
billion
India accounts for
approximately 16% of the
world production of
dyestuff and dye
intermediated
The polymer demand is
expected to grow by 8-10%
with a healthy growth in
clothing, automobiles, etc.
4th largest consumer of crude
oil and petroleum products in
the world (2013)
Oil imports constitute 80% of
India’s total domestic oil
consumption (May 2014).
At the end of 2013, India had
215.066 MMTPA of refining
capacity, making it the
second-largest refiner of
crude oil in Asia.
• 2nd largest textile manufacturing capacity globally
• Sector contributes 14% to industrial production and 4% to GDP and 13% of country’s export earnings
• Domestic textile and apparel industry is estimated to reach USD 100 bn by 2017 from USD67 bn in 2014.
• Exports are expected to increase to USD 65 bn by 2017 from USD 40 bn in 2014
Investment opportunities
Petrochemicals
Specialty chemicals
Agrochemicals
Colorants
Technical training
Underground coal
gassification
E&P services and equipments
City gas distribution
Refinery
Technology partnerships in
upstream sector
• Entire value chain of Synthetics • Values added and speciality
fabrics • Technical Textiles • Garment • Retail Brands
FDI policy 100% FDI is allowed under
the automatic route subject
to all the applicable
regulations and laws.
FDI is subject to the existing sectoral policy and regulatory framework and varies across the value chain
• 100% FDI is allowed under the automatic route in textile sector
Key Japanese investors
Toyo Ink, JX Nippon - • Nissinbo • Marubeni
India - Japan • A winning partnership
Opportunities
Energy Sufficiency through Thermal Power and Renewable Power are high on Government’s agenda
29 India - Japan • A winning partnership
Source: Ministry of Power; Council of Power Utilities; Bureau of Energy Efficiency; India Brand Equity Foundation
0
1000
2000
3000
4000
5000
World’s leading electricity producers in 2012 (TWh)
68%
18%
12% 2%
Sources of Power with shares in total installed
capacity
Thermal Hydro Renewable Nuclear
Fifth largest producer and consumer globally
• With a production of 1,006 TWh, India is the fifth
largest producer and consumer of electricity in the
world
Power generation and installed capacity has grown rapidly over the years
• Over FY07–13, electricity production expanded at a
CAGR of 5.5%
• Installed capacity increased steadily over the years,
posting a CAGR of 10.9 per cent in FY09–13
Strong policy support to further incentivize power sector
• Policies such as Electricity Act, 2003, National Tariff
Policy, 2006, Ultra Mega Power Projects (UMPPs),
R-APDRP and fuel supply agreement are aiding
growth of the sector
The energy sector is one of the most developed and organised sectors in India
The energy sector is full of varied opportunities in the thermal and renewable energy sector
30 India - Japan • A winning partnership
Source: Ministry of Power; Ministry of New and Renewable Energy; India Brand Equity Foundation
Growing demand
• Expansion in industrial activity to boost demand for electricity
• Growing population and increasing penetration and per-capita usage to provide further impetus
• Power consumption is estimated to increase from 821.2 TWh in 2013 to an estimated 1433.2 TWh in 2022
Attractive opportunities
• Large capacity additions (189GW) targeted in the 12th and 13th Five-Year Plans
• Ambitious projects and increasing investments across the value chain
• Diversification into renewable sources increasing growth avenues
Policy Support
• Elimination of Licensing for various segments; removal of entry barriers
• Cost reduction and rationalization of tariffs; development of UMPP
• Fuel supply agreement of power producers with Coal India
Higher Investments
• FDI inflows touched USD7.8 billion between April 2000-March 2013
• Major investments earmarked by public as well as private sector companies across the value chain
Advantage India
Industry responsive skill development is one of the key focus areas of Government
As the economy races ahead, the need for skilled and qualified labour will only escalate. To bridge this gap and to impart industry specific learning, GoI (through DMICDC) will be setting up training centres across all manufacturing cities. The modules will be designed as per industry standards and will broadly cover automobile and auto-components, general manufacturing, chemicals, garments, petrochemical and pharmaceutical sector.
To support the auto component, IT/ITES and Biotechnology sectors and offer training in Maritime/ ship engineering courses, a Knowledge Hub/skill upgradation center would be imperative at Dholera. To support the engineering, ceramics, chemicals, IT/ITES and Biotechnology sectors, a Knowledge Hub/skill upgradation center is proposed to be developed with integrated infrastructure facilities.
Gujarat
To support the IT/ITES/Biotech Hubs as well as the other industries in the investment region, a Knowledge Hub/skill up gradation centre would be imperative. It is advisable to set it up in the area, which is close to the National Capital Region and has a substantial "trainable" population. Potential sectors could include Agro Processing, Engineering, Leather/ Handicraft and IT/ITES/Biotechnology sectors
Uttar Pradesh
To support the auto component, IT/ITES and Biotechnology sectors, a Knowledge Hub/skill up gradation centre would be imperative at Nimarana Rajasthan
Social sector engagement of Japan will instill the trust and confidence in the younger population
31 India - Japan • A winning partnership
The new Government has proactively taken multiple steps to bring about process improvements….
Process improvement initiatives
• Process of applying for IL/IEM made completely online and 24X7
• ESIC/EPFO registration made on-line and real time, need for submission of hard copies removed
• States advised to introduce self certification and third party inspection for the Boilers Act
• All security clearances will be given by MHA within 3 months.
• Need for affidavit from entrepreneur obviated with issue of ‘Security Manual for Licensed Defence Industry’
• Requirement of License on a number of Defence List products removed
• Validity of Industrial License extended from 2 years to 3 years.
• Questionnaires on ‘Enforcing Contract’ and ‘Resolving Insolvency’ filled by Government of first time.
• Advisory sent to Ministries/State Governments:
• All returns to be made online
• Check list of all compliances to be put on web-site
• All registers to be replaced with one single electronic register
• No inspection without approval from Head of the Department
• Self-certification for non-hazardous/non-risk businesses
32 India - Japan • A winning partnership
33 India - Japan • A winning partnership
Labour related initiatives
• Unified Single Web Portal for Labour Law Compliance
• Initiated amendment of Factories Act, 1948 to allow for:
• Night shift for women
• Increased hours of overtime
• Compounding of Offences
• Rationalization of Returns and Register requirements
• Initiated amendment of Apprentices Act, 1961 to increase the percentage of workforce as apprentice and restrict inspections
• Single labour law for MSME to be introduced in December, 2014
• Evidence based inspections through Central Analysis and Intelligence Unit
Sector specific initiatives
• Defence sector
• Raised FDI limit in the Defence sector to 49%
• Railways sector
• Allowed 100% FDI in railway infrastructure sector, in areas such as high-speed train systems, sub-urban corridors and dedicated freight line projects implemented in PPP mode
….and labour & sector related initiatives to improve the overall “Ease of doing business” in India
eBiz Mission will transform e-governance beyond online transactions to delivering services to investors and businesses
• Offers a Single Window for businesses and investors and transparency in processing of requests
• Entrepreneurs to submit one integrated application for multiple licenses
• Single consolidated payment for the various licenses required by entrepreneurs
• Reduction in the number of procedures and correspondingly the cost and time taken for obtaining approvals
• 24 X 7Facility for Information and Services for businesses
• Eventually it will offer coverage of Entire Business Life Cycle
34 India - Japan • A winning partnership
Source: DIPP