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India

Indian Investment Centre

A growing middle class?

see : Rise of purchasing power in emerging markets

The middle class currently numbers some 50 million people, but by 2025 will have expanded dramatically to 583 million people—some 41 percent of the population. These households will see their incomes balloon to 51.5 trillion rupees ($1.1 billion)—11 times the level of today and 58 percent of total Indian income.  McKinsey reportmore:  http://en.wikipedia.org/wiki/Standard_of_living_in_India

Creative-Class Meccas

Mumbai, India

Doing Business in Mumbai (Bombay):

As India's largest, most multicultural city, Mumbai is a fairly liberal place and its business culture tends to be professional, but informal and friendly. Mumbaikars are famous for their chalta hain (laid-back) attitude, but traditions still hold in many areas of behaviour so it's wise to be prepared. These tips should help you. read more»

Macroeconomic profile

India vs China

The Indian private sector is more efficient and entrepreneurial than its Chinese counterpart. But China has been very successful in creating infrastructure and delivering essential services, while the Indian state's effectiveness has deteriorated over the last four decades. Since it is easier to create markets than to improve state capacity, China's task—improving the private sector—is more likely to succeed than is India's task of arresting institutional decline.

Inflation targeting?

India is one of the countries that don't target inflation: see a link here where a reputable economist argues that India doesnt need to target inflation due to cultural contraints that will keep infation in line without it.  (controversial)

2008 trouble on the horizon...

India's fiscal, monetary, and exchange rate policies have not just been inadequate, they have gone in the wrong direction. The fiscal position is deteriorating substantially at a time of accelerating inflation. Monetary and exchange rate policies of late have both been mystifyingly inadequate. From an inflation perspective, India has destabilizing rather than stabilizing fiscal and monetary policies.  read more here

Outsourcing

India IT market

India Tries Outsourcing its Outsourcing

http://www.iht.com/articles/2007/09/24/business/outsource.php

As the world looks to India for its outsourcing solutions, the south Asian nation is looking back for the same reason. In an attempt to better meet evolving global business needs, Indian outsourcing giants are venturing abroad, outsourcing their clients' outsourcing. Stemming from a theory that suggests the eventual spread of outsourcing around the world, India is hoping this bold and novel concept will keep it ahead of countries seeking to imitate its success.

Investing in Indian Real Estate (booming market)

Forbes magazine recently ran an interesting article about the creative ways in which an international investor could invest in the "closed" India real estate market

Car Industry in India

India car industry - the 2000 dollar car

* As of October, 2008 - Tata decided to abandon the plan in West Bengal, and to relocate to the state of Gujarat, a state with a large industrial base and pro-business administration.  The violence threats vs workers in West Bengal were too high. 

*  Planned production in Gujarat will be 250,000- 300,000

*  West Bengal (near Calcutta) will loose 10,000 + jobs , and suffers reputation as anti-business for FDI

*  Note that West Bengal was (before the 60's), one of the most industrialized parts of India -steel, coal, machinery and power production were large industries.

Telecom in India

Wireless 3G auctions: coming in 2008/09?

India's Department of Telecommunications said it would hold electronic auctions to sell space on the airwaves (spectrum) for "third-generation" (3G) mobile-phone networks. The government hopes to raise almost $10 billion from the auctions, which will be open to new entrants, including foreign bidders.

More India telecom news:

BUSINESS: India's telecoms boom  Talk is cheap 

India leads the world in mobile-phone subscriber growthDec 7th 2006

Poverty in India

see article in the economist: 

The residents of Dharavi, allegedly Asia's biggest slum, are thriving in hardship 

Private Equity in India

Trend 2008:  Private equity is gaining greater acceptance in India where rising borrowing costs and a tanking stock market have shut down other means of funding, forcing family-owned businesses to tap a source they had once shunned.  Indian companies have in recent years embarked on ambitious expansion plans, bolstered by plentiful cash and low interest rates as the economy grew nearly 9 percent annually.  But a global credit crunch and soaring commodity prices have taken a toll of late.  Inflation has climbed to its highest in more than 13 years, driving interest rates to seven-year peaks. Economic growth is expected to moderate this year, while the stock market has fallen nearly 30 percent in 2008, beating down company valuations.  "The tough times are forcing firms to evaluate their business plans and look for help to ride out the storm," Sharma said.

Private equity investing in India and China held steady in the first half of the year, the Asia Venture Capital Journal said, with India seeing a 3.2 percent rise to $6.8 billion, and China registering a 3 percent gain to $5.8 billion.

Indian private equity deals typically involve little leverage, and private equity (PE) firms have often done growth capital deals and late-stage investments, buying small stakes in private and listed firms.    Still, private equity firms have had a tough time convincing family-owned businesses to surrender some control in return for cash, especially as a six-year bull run meant these companies could get generous valuations from the stock market.

With easy IPOs a thing of the past, firms are coming around.  "When the markets recover, firms will choose to tap the market again, but they may now also go to PE, as they are recognizing the value-add that PE brings," said Arun Natarajan, chief executive of research firm Venture Intelligence.

Emerging markets' share of private equity deals this year may go beyond the 10 percent it got in 2007, or about $57 billion, according to London-based Emerging Markets Venture Capital Association.

Indian family-owned firms tend to be sprawling entities with diversified interests and lacking clear succession plans, which makes smaller firms particularly vulnerable at this time. "Even speaking to a private equity firm was unheard of a couple of years ago for a family-owned business," Natarajan said.  "They see the merit now in selling non-core assets or a stake to PE. It is seen as a better option to selling out to a rival."  Tuscan's Sharma said companies in India were also realizing they want the expertise that private equity brings along: "They want more than just a check. They now want smart money."

PE Deals in India:

Investment in Ports:  Private-equity firm 3i Group Plc plans to invest up to $229 million for a 26% stake in south Indian port operator Krishnapatnam Port Co. The firm awaits approval from the Foreign Investment Promotion Board, which must greenlight overseas investments into India's market. Reuters (08/27)

More info about India:

From The Economist

• Business and caste in India

  Oct 4th 2007

• Indian business

  Oct 4th 2007

• Education and caste in India

  May 25th 2006

• Recycling in Asia's biggest slum

  Dec 19th 2007

• India's ragpickers

  Nov 15th 2007

   

City guide

• Mumbai

Country briefing

• India

More articles about...

• India's economy

Websites

National Geographic has photographs of Dharavi.

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