Embed Size (px)
Citation preview
Enabling the prospects
EY’s 2014 attractiveness surveyIndia
Page 2
MethodologyEY’s 2014 India attractiveness survey is based on ...
2013 rapid-growth markets attractiveness surveys
►2013 Africa attractiveness survey
►2013 Turkey attractiveness survey
►2013 Russia attractiveness survey
►2013 Kazakhstan attractiveness survey
1. The real attractiveness of India to foreign investors based on based on thefDi Markets database, which tracks new greenfield and expansion foreigndirect investment (FDI) projects but excludes portfolio investments and M&A.
2. The perceived attractiveness of India by foreign investors, based ontelephone interviews with 502 international business leaders.
Page 3
A multi-speed worldIndia in context
Set for amodest recovery
2012 2013E 2014E 2015E
2.8% 1.6% 2.6% 3.4%
Moving out of recession, butdownside risks remain
2012 2013E 2014E 2015E
Eurozone -0.6% -0.5% 0.9% 1.4%
UK 0.2% 1.4% 1.9% 2.0%
Enjoying a short-termrebound
2012 2013E 2014E 2015E
2.0% 1.9% 1.2% 1.1%
Sources: World Economic Outlook, International Monetary Fund (IMF), October 2013; EY Rapid-Growth Markets Forecast, October 2013; EY EurozoneForecast, December 2013.
Drivers of world economybut external pressures weigh
on growth2012 2013E 2014E 2015E
4.6% 4.3% 4.7% 5.3%
IndiaGeared for the long term
2012 2013E 2014E 2015E
5.1% 4.1% 4.5% 5.9%
Page 4
India’s competitive positionThe FDI story in India
732
1.023
761 776945
744
2007 2008 2009 2010 2011 2012
Project numbers
229,3
341,4
194,1222,0256,8
152,3
2007 2008 2009 2010 2011 2012
Job creation (in ‘000)
56,5
80,6
57,2 52,0 48,9
30,9
2007 2008 2009 2010 2011 2012
Capital investment (US$b)
4,981 US$326.1b1.4m
2007-2012
Projects Jobs Capitalinvestment
Source: fDI Intelligence
FDI in India (2007-2012)
Page 5
Fourth most attractive destination in 2012India’s share of global FDI
World’s top five FDI destinations
515
945
1.002
1.432
1.700
Number of FDIprojects (2011)
459
744
921
1.083
1.549
Number of FDIprojects (2012)
US
China
UKIndia
Brazil
India’s share in global FDI (2012)
6.3% projects 9.4% jobs5.5% valueSource: fDi Markets, from the Financial Times Ltd.
Page 6
Manufacturing and servicesIndia’s key activities
52.2%61.3%
31.2%24.3%
9.9% 7.8%6.7% 6.6%
2007-12 2012
Projects Jobs
Services Retail, construction,recycling and extraction
Manufacturing Strategicfunctions
31.7% 38.6%
50.2% 41.5%
15 % 16.8%
3.1% 3.1%
2007-12 2012
Note: Strategic functions include Education & training; Research & development; and Headquarters
Page 7
Increasing interest from the west and beyondIndia’s sources of FDI
123% project rise from Middle East in 2012
Primary sector: Financial services
Main origin: The UAE and Bahrain
FDI by region/countries (2007-2012)
38.6%
40.5%
Western Europe US
19.7%
30.2%
10%
10.4%
Japan
3.5%
5.1%
1.9%
10.2%
UAE SouthKorea
1.6%
1.8%1.5%
4.1%
Singapore ChinaProjects Inflows
Source: fDI Intelligence
Page 8
Where to?India’s FDI destinations
Projects Value US$b Jobs
602 19.9 1,03,210
Projects Value US$b Jobs
556 15.3 63,977
Projects Value US$b Jobs
291 11.1 76,367
Projects Value US$b Jobs
561 24.5 1,24,210
Projects Value US$b Jobs
380 25.1 1,17,952
Projects Value US$b Jobs
235 10.8 70,464
*NCR includes New Delhi and surrounding regions.Source: fDI Intelligence
Page 9
Investments delayed but prospects brighten upFDI in India in 2013
310 projects 72,928 jobsUS$12.3b
Top five sectorsSectors No. of
projects Share
TMT 78 25.2%
Industrials 39 12.6%
Infrastructure 34 11.0%
Consumer goods 30 9.7%Financial Services 29 9.4%
FDI snapshot in 9M13
Source: fDI Intelligence
Top five sourcesCountries No. of
projects Share
US 95 30.6%
Japan 29 9.4%
UK 29 9.4%
UAE 24 7.7%Germany 21 6.8%
Page 10
Occupying a prominent spot within emerging marketsCapital allocation in India
What is the approximate investment capital allocation for India ?
24% 15% 10.5% 19.5% 31%% of respondents
EY's 2014 India attractiveness survey Total respondents: 314
Capital allocation range:
EY's 2014 India attractiveness survey Total respondents: 502
0.5% 5-10% 10-20% >20% Can’t say
Emerging market strategy and capital allocationDoes your company have an emerging market strategy?
Yes 62.6% No 25.3% Can’t say 12.1%
Page 11
Current investors remain certainImmediate plans in India
Is your company considering entering/increasing existing operations inIndia over the next year?
EY's 2013 India attractiveness survey Totalrespondents: 502
13%2.1%
1.6%3.4%
4.4%5%5%
14.8%30.8%
42.5%
Can't sayOthers
Education and trainingWarehouse / logistics center
Off shoring/outsourcingResearch center/ design unit
Regional headquartersSales and marketing office
Manufacturing for global marketManufacturing/services for the Indian market
53.2% 31.8% 15,0%Yes No Can't say
What is the nature of the business activity you are planning in India ?
Source: EY's 2014 India attractiveness survey Total respondents: 267 (group considering entering/expanding existing operations in India overthe next year); respondents selected more than one possible answer; 100% have international presence
Page 12
New destinations emergingNext wave of competitors
7.6%0.5%
5.5%0.6%0.7%0.7%0.7%1.0%1.0%1.2%1.3%1.5%2.9%4.0%
70.8%
Can’t sayNone
OthersMexico
UAEThailand
PolandVietnamMalaysia
PhilippinesIndonesia
South KoreaUSA
BrazilChina
From a general point of view, in your opinion, which country is India’s maincompetitor in terms of attractiveness ?
Source: EY’s 2014 India attractiveness survey (Total respondents 502).
USA and Brazil have interchanged positionsfrom 2012 India attractiveness survey from 8%and 4%, respectively.
India’s new competitors
Page 13
Labor, skills and a lucrative marketIndia’s competitive advantages
72.4%
74.6%
77.6%
79.1%
80.4%
82.1%
86.1%
16.6%
18.6%
15.4%
14.4%
13%
13.4%
10.1%
Entrepreneurial culture
Sound telecommunications infrastructure
Local labor skills
Availability of educated workforce
Strong business and management educationsystem
Domestic market
Local labor costs
Attractive Not attractive
Please rate the following parameters for investment in India as attractiveor not attractive.
Source: EY’s 2014 India attractiveness survey (Total respondents 502).
Page 14
Infrastructure opportunities expected to riseIndia’s top FDI sectors
5.9%
6.6%
7.7%
8.4%
11.4%
16.6%
21.6%
Infrastructure
Financial services
Consumer goods
Automotive
Business services
Industrials
TMT
Source: EY’s 2014 India attractiveness survey (Total respondents 502); fDi Intelligence.
Reality Perception
93% project rise in 2012 in financial services from 2011.
3.8%
4.7%
8.4%
8.6%
11.2%
11.3%
29.9%
Business services
Life sciences
Automotive
Retail
Industrials
Infrastructure
TMT
In the next two years…% share of projects 2007-2012
Page 15
Beyond the metropolisIndia’s emerging cities
There is asignificantawareness gapabout second-tierand third-tier Indiancities.
Most attractivecities
% share in number ofprojects 2007-2012
(Reality)
% of surveyresponses
(Perception)
Mumbai 14.8% 51.2%Bengaluru 15.0% 37.8%New Delhi/NCR* 16.1% 37.4%Chennai 10.1% 14.6%Pune 7.8% 13.1%
Source: EY’s 2014 India attractiveness survey (Total respondents 502); fDi Intelligence - Respondents selected more than one possible answer.
Reality andperception matchesfor top FDI cities inIndia.
However…
43.1%3.0%3.7%4.4%4.7%5.8%5.9%6.1%6.5%
8.9%20.7%
Can't sayIndoreNashik
AurangabadNagpur
KochiSurat
CoimbatoreChandigarh
JaipurAhmedabad
What are the emerging Indian cities for investment?Emerging cities
Top FDI choices
*NCR for reality and New Delhi for perception.
Page 16
Great expectationsIndia in 2020
Responses 2013 survey 2012 survey
Among top three growing economies* 28.6% |||||||||||||||||||||||||||| 29% |||||||||||||||||||||||||||||
Among leading three manufacturing destinations 23.6% ||||||||||||||||||||||| 25% |||||||||||||||||||||||||
Country with substantially improved infrastructure 18.3% |||||||||||||||||| 24% ||||||||||||||||||||||||
R&D & innovation hub 15.4% ||||||||||||||| 19% |||||||||||||||||||
Competing directly with developed economies 14.5% |||||||||||||| n/a
Among leading three shared services destinations 14.3% |||||||||||||| 27% |||||||||||||||||||||||||||
With one of the best business education and higher learningsystems
10.8% |||||||||| 20% ||||||||||||||||||||
A regional and global hub operations hub 9.4% ||||||||| 19% |||||||||||||||||||
* 2012 response was phrased as "Achieved double-digit growth rates".Sources: EY's 2014 India attractiveness survey (Total respondents 502); EY's 2012 India attractiveness survey (Total respondents 506) - Only 382 had aninternational presence - Respondents in both the surveys selected more than one possible answer.
How do you see India in 2020?
Page 17
Improvement in six stepsIndia’s action plan
Source: EY’s 2014 India attractiveness survey (Total respondents 502) - Respondents selected more than one possible answer.
Enhance thebusinessenvironment
Developinfrastructure
Advance thefactors ofproduction
Improve thetaxationsystem
EliminateFDI-relatedbarriers
Increaseawarenessaboutemergingcities
122% demand improvementin effectiveness of the rule oflaw; increased transparencyof business regulation andincreased consistency inregulatory policy.
42% feel upgradingthe infrastructurewill increase India’sappeal.
31.8% demandimprovement in laborlaws, labor skills andaccess to capital
21.8% want animprovement in thetaxation system.
12.8% demandeasing FDI limits.
43.1% could notname any emergingcity in India.
Page 18
Belgian contact details
Geert GemisITS Partner – Operational leader Asia-Pacific Desk Belgium
Tel +32 3 270 14 57Mobile+32 475 58 28 81Email [email protected]
Jos ReniersITS Director
Tel +32 3 270 1238Mobile+32 476 50 65 79Email [email protected]
Page 19
About EY
EY | Assurance | Tax | Transactions | Advisory
About EYEY is a global leader in assurance, tax, transaction andadvisory services. The insights and quality services wedeliver help build trust and confidence in the capitalmarkets and in economies the world over. We developoutstanding leaders who team to deliver on our promises toall of our stakeholders. In so doing, we play a critical role inbuilding a better working world for our people, for ourclients and for our communities.
EY refers to the global organization, and may refer to oneor more, of the member firms of Ernst & Young GlobalLimited, each of which is a separate legal entity. Ernst &Young Global Limited, a UK company limited by guarantee,does not provide services to clients. For more informationabout our organization, please visit ey.com.
© 2014 EYGM Limited.All Rights Reserved.
This material has been prepared for general informationalpurposes only and is not intended to be relied upon asaccounting, tax, or other professional advice. Please refer toyour advisors for specific advice.
The opinions of third parties set out in this publication are notnecessarily the opinions of the global EY organization or itsmember firms. Moreover, they should be seen in the context ofthe time they were expressed.
ey.com
