Infant Wear

The Rise of India in World TradeChris Callen, Country Manager, DHL Express - Jan 28, 2004

Agenda

India‘s International Trade Situation

DHL Trade Confidence Index

Building “Brand India “

Becoming World Class in India

International Logistics

India’s International Trade 2002/03 Exports

– US $51.7 billion – Growth 18%

• next only to that of China at 22% • second highest among world’s 30 leading exporters in world

merchandise trade during the year 2002

Imports– Growth 17.03%

Share of world trade – 0.8%

Getting Ahead

“If the present trend continues, we may reach our

often stated goal of achieving 1% of world

merchandise trade ahead of the year 2007…”

Arun JaitleyUnion Minister of Commerce & Industry31 March, 2003

With the rupee rising against the With the rupee rising against the dollar and the global slowdown in dollar and the global slowdown in

world trade over the past few world trade over the past few months, is there cause for concern? months, is there cause for concern?

GDP – Regional comparison

India has recorded one of the highest growth rates in the 1990s

Among the largest economies in the world, its GDP is close to US$ 500 billion

Only China has had GDP growth higher than India

71

86

88

115

145

162

282

357

422

485

1,180

4,146

- 200 400 600 800 1,000 1,200 1,400

PH

SG

MY

TH

ID

HK

TW

AU

KR

IN

CN

JP

GDP (in USD Billion)

GDP growth, 1990-2001

China 10.0India 5.9S. Korea 5.7Indonesia 3.8Thailand 3.8Pakistan 3.7Philippines 3.3Mexico 3.1Brazil 2.8

Merchandise Exports vs GDP

Thailand, Malaysia, Indonesia all export more than India !

- 200 400 600 800 1,000 1,200 1,400

PHSGMY

THID

HKTWAUKR

INCNJP

(USD Billion)GDP Exports

23%

10%

9%

36%18%

117%44%

57%

39%

101%

45%

142%

India Rising -- Challenges

WTO, Asean Free Trade Agreement (AFTA), Bi-lateral FTAs

Ground Infrastructure Golden Quadrilateral Highway network New FTZs and enhanced transhipment facilities Liberalised air traffic rights Duty structures – among the world’s highest Air Express self-handling – elimination of

monopolies in statutory service providers

Agenda






How do exporters view the situation?How do exporters view the situation?

All India The DHL Trade Confidence Index (TCI) at an all-India level is 61 (Q2’-

Sep03), up from 58 (Q1- Jun03), driven by a very optimistic 72 points in general demand conditions.

Factors contributing to this movement include optimistic demand conditions, better domestic conditions & optimism about the macro-economic state

The factors where no significant change is seen include Attitude of US Customers, Impact of WTO, Exim Policy & Order Expectations

53

36

72

2111

70

102030405060708090

100

Favourable Neutral Less Favourable

Q1

Q2


The Exporter view on General Demand conditions, has become more optimistic, with almost 72% rating them as favourable as compared to 53% in the last quarter

Apparel Sector Confidence among Textile / Garment exporters is even higher: The DHL

Apparel Trade Confidence Index has moved up to 63 (Q2 - Sep03), from 58 (Q1-Jun03)

Factors contributing to this upward movement include optimistic Demand conditions, better Domestic conditions, optimism about macro-economic state & Policy context

…DHL Trade Confidence Index

60

33

80

157

50

102030405060708090

100

Favourable Neutral Less Favourable

Q1

Q2

Factors that seem to have moved down on confidence include Attitude of US Customers & Impact of NTMs

Optimism in Exporter view of the General Demand Conditions, shown here, has moved up to 80% from 60% in the previous quarter

Analysis So, the DHL Trade Confidence Index moved up by 5% in Q2-Sep03, despite

the fact that month on month, export growth began to slacken. Dr Debroy’s view of the possible reasons for this apparently paradoxical finding include:

- Time lag in perceptions reacting to objective reality- Better domestic conditions biasing the results- Exporters are unduly optimistic about seasonal demand conditions

The upward movement in our Index can be ascribed more to better domestic economic conditions & this has negated the impact of certain negative developments internationally

But there is no reason to despair… even if we get 8% growth in 2003-04 it will be respectable… and the target of 1% share of global trade appears fairly modest

…DHL Trade Confidence Index

Agenda






Emerging Trends

Growing cross-border trade – More cross-border production to take advantage of lower

costs/new markets– Greater liberalisation of trade policies & tariffs through WTO– Major shift by global companies to source, produce and

distribute from emerging economies like India Greater need for dedicated air express freighters

– Less reliance on under- floor space of passenger aircraft & dictated schedules

– Enhanced schedules to meet shortened transit times

Courier Air Express

…Emerging Trends

Challenge of Breaking the Time Barrier Further – Businesses demanding faster and more time-definite

deliveries– Need shortest “Time- to- Market”– Shorter Product life cycle

JIT processes and express transport key to supply chain logistics– Lower inventory holdings– Greater outsourcing of logistics services to integrators,

3PL/ 4PLs

Air Express Logistics Solutions

Agenda






The Path Ahead

Is India is at a point of inflection where it can take a significant share and role in world trade?

“There is no better time to be an Indian in this world” Two things critical for India to go forward strongly :

– Position India as a good place to do business in– Position India as a place for manufacturing excellence

These two are not easy-wins since the task is not one of positioning alone – at least in many key sectors

In marketing terms – India is not at the stage for aggressive ‘branding’ – but a stage for solid ‘product development’

But brand is very important – not at the country level but at the individual company level

Branding What came first : Sony or Japan, LG or Korea ? Building world-class brands is the responsibility of each and

every business – and the country has a smaller role in it The country responsibility is In making India an easy and

good place to do business with ! (whether it is for Indian companies or MNCs)

Infrastructure, labour reforms, primary education, borderless states, debilitating levels of corruption – all of them need to be managed with a far greater urgency.

Individual companies will get enormous opportunities in the world market – as trade barriers topple around the world.

Quotas in Apparel & textile Trade

China’s growth has been spectacular in areas where quotas have recently been removed by USA (Source : US Intl. Trade Commission)

For example :– Bras & foundation garments (Category 349/649) : 232 %– Knit Fabrics (Category : 222) : 21,976 % – Infant wear (Category : 239) : 826 %– Robes and dressing gowns (Category : 350 /650) : 540 %

Clearly, as trade regimes liberalise worldwide, new opportunities will open up for businesses which have world class manufacturing excellence with vertically integrated skills!

Don’t bother too much about ‘Brand India’, focus on building world class manufacturing excellence in our individual businesses – grow your own brand!

Agenda






Asia-Pacific Logistics OverviewM

arke

ts

Hong KongSingaporeJapanAustraliaNew ZealandKoreaTaiwan

MatureChina

UniqueMalaysia

Thailand

Indonesia

Philippines

India

Mid-LevelSub-ContinentVietnamCambodiaLaosMyanmarEtc

Developing

Developed Logistics

High Competition High Service

levels Lead time

pressure Lower Growth

Rapid Development

Undeveloped domestic

Increasing service levels

High Growth

Developing sophistication

Increasing competition

Increasing service levels

Varied Growth

Poorer infrastructure

Lower competition

Customs Ownership

Issues High Growth

Cha

ract

eris

tics

Building a Strong Infrastructure

Four Gateway Strategy – four state-of-the-art Express Handling Units for seamless self-handling of Air Express shipments at major airports– First 26,000 sq ft facility now operational in New Delhi; only

dedicated facility of its kind in India – Similar facilities planned in Mumbai, Chennai and

Bangalore 12 Spare Parts Centres across major cities Modern, technologically superior Service Centres 300-strong fleet of new vehicles, the largest of its kind in

India, linked in real time to our data network. Globally integrated sophisticated IT infrastructure for real time

supply chain management and tracking. 24-hour country-wide toll-free customer service call centre.

Building a Strong Infrastructure Like you, many challenges we face are regulatory or

bureaucratic – some we have overcome, some we are still battling, most of are unique to India:– On-board-courier– Gateways at Airports– 24-hour Customs in-premise– Indian Post Office (Amendment) Bill, 2002

Our investments are significant and we hope to provide the kind of logistics support which is truly world class. We’re getting there.

We are leading the way – we have 70% of the international air express market in India, and over 20,000 exporters and importers in our customer base here !

Invest, excel, promote.

THANK YOU