I N D I ACountry Report

Current News

Rail Minister Suresh Prabhu will walk the tightrope as he presents the Railway Budget at noon today. With elections due in five states, he has to balance populist measures with the cash-strapped Railways urgent need for finances to fund modernisation and better passenger facilities.

The question being asked hours before the Railway Minister presents his annual budget - will he bite the bullet and raise passenger fares and freight?

Junior Rail Minister Manoj Sinha would only say on Thursday morning, This is the budget to transform the Indian Railways. You have to wait for some time.

This will be the second Railway Budget presented by Mr Prabhu, a 62-year-old Chartered Accountant hand-picked by Prime Minister Narendra Modi to script a turnaround for the Indian Railways, the worlds fourth largest.

Last year, he did not raise fares but made headlines by announcing not a single new train.

Two senior government officials told Reuters that raising freight tariffs significantly is not on the cards today, and that a steep rise in passenger fares in Thursdays railway budget is also un-likely as fewer-than-expected travellers catch the train and an industrial slowdown crimps the growth of freight.

-Shuchi Shukla

Railway Budget 2016: In Poll Season, A Tough Balancing Act for Minister Suresh Prabhu

Government: Federal Repbulic

Country Traits

India: Located in South Asia

Population: 1,276,267,000

Prime Minister: Narendra Modi Minimum Wage: 93.75 Rupees/Hr

Capital: New Dehli

Birth - 1.12 Male/Female01-14 - 1.14 Male/Female15-24 - 1.09 Male/Female25-64 - 1.06 Male/Female

65 - Up - 0.908 Male/FemaleTotal: 1.08 Male/Female

Gender Breakdown Ratio:

Religions:

Hindu - 80.5%Muslim - 13.4%

Christian - 2.3%Sikh - 1.8%

Buddhists - 0.8%Jains - 0.4%

Others - 0.8%

Main Languages:

Hindi - 41.03%Bengali - 8.11%Tamil - 5.91%Urdu - 5.01%

Gujarati - 4.48%Nepali - 0.28%Sindhi - 0.25%

Ethnic Composition:

Indo-Aryan 72%Dravidian 25%

Mongoloid & Other 3%

Median Age:

25.1 Years

Import and Export Volume

Exports: $311 BillionImports: $448 Billion

Countries India Exports To:

United States, United Arab Emirates, Singapore, China, Hong Kong, Saudi Arabia, Netherlands, United Kingdom, Germany, Brazil

What does India Export?

Petrolium, Gems & Jewelry, Pharma Products, Machinery & Instruments, Readymade Garments, Electronics, Rubber/Glass Products, Cotton, Yarn &

Fabrics.

Countries India Imports From:

China, United Arab Emirates, Saudi Arabia, United States, Switzerland, Iraq, Qatar, Kuwait, Germany, United Kingdom

What does India Import?

Petrolium Crude, Gold & Silver, Electronics, Pearls & Precious Stones, Organic & Inorganic Chemicals, Coal/Coke/Briquettes, Iron & Steel

Economic Overview

GDP Per Capita: 1,820

Labor Force: 502.3 Million-Agriculture: 495

-Industry: 20%-Services: 31%

Unemployment: 4.90%

Inflation Rate: 2.0%

Budget Deficit: 3.9% of GDP

Public Debt: 64.9% of GDO

Exchange Rate: 1 Indian Rupee = 0.015 USD

Main Industries of India:

Software, Petroleum Products, Chemicals, Pharmaceuticals, Agriculture, Transporation Equipment, Machinery, Leather,

Cement, Mining, Construction

Country StabilityPolitical

Narendra Modis win as Prime Minister was a major win for the Bharatiya Janata Party. Young Indians are very frustrated with the poor government in India and Modis goal is to ensure the minorities that they will be safe, secure,

and successfu in his India.

Economic

In the year 2015, Indias economy grew at an even faster pace than Chinas. The rupee has gained value against the US dollar while other countries, like

South Africa and Brazil, have lost value. Oil imports are rising and prices falling, which proves to be a big win for businesses and consumers.

SocialIndia increased the attendance rate and expanded the literacy rate of the

7-10 age group over the last few years. As far as healthcare, Narendra Modi is

working to grow the pharmaceutical sector in the healthcare industry.

TechnologyIndias IT industry cost competitiveness is 3-4 times cheaper than the US. India is gaining prominence in the IT world by setting up global firm centres

throughout the country. This has gained the attention of major countries that want to make investments in Indias IT industry.

Environmental

Transportation and fuel economy standards need major attention in India as road, air, and railway travel is heavily used throughout the country. Also

energy costs are high so they are developing mini-power stations to address the situation.

India and the US

India and the United States hold a strong relationship. In 2015, President Barack Obama became the first US President to be the chief guest of the 66th Republic Day celebrations of India. India and the US held their first

ever bilateral dialogue on the UN and multilateral issues in the spirit of the Delhi Declaration of Friendship that strengthens and the expands the

relationship between these two countries.

Political Stability Factors

Future Government Plans

Prime Minister Narendra Modi has many plans to improve India. Modi plans to revamp Indias restrictive business regulations and plans to improve the

national infrastructure. If all goes well with Modis plan, India could become the next leading player economicaly, financially, and politically.

India is one of the worlds largest producers of the textiles and apparel industries.

India is the largest cotton producer in the world and the second largest textile manufacturing capacity globally.

The Indian textile industry accounts for about 20% of the worlds spindle capacity and 10% of global rotor capacity.

India accounts for about 13% of the worlds production of textile fiber and yarn and is the largest producer of jute and cotton, and the largest producer of silk.The Textile Association of India expects textile and apparel exports to reach $80 billion by the year 2020.

In India, the textiles sector is teh second largest provider of employment after agriculture.

India has a significant lead in terms of labor cost per hour over countries like the US, Hong Kong, Taiwan, South Korea, and China.

India and China are currently competing the same premium segment of apparel and home textiles. Given Indias established prescence in the segment, this could gain India a large market share in US apparel imports.

State of the Textile and Apparel Industry

Trade Agreements

APTA 07/31/1975 06/17/1976

India-Sri Lanka FTA 12/28/1998 12/15/2001

Indo-Nepal Trade Treaty 12/06/1991 03/06/2002

India-Afghanistan PTA 03/06/2003 05/13/2003

India-Singapore CECA 06/29/2005 08/01/2005

SAFTA 01/06/2004 01/01/2006

India-Bhutan Trade Agreement 07/28/2006 07/29/2006

India-Chile PTA 03/08/2006 09/11//2007

India-MERCOSUR PTA 01/25/2004 06/01/2009 India-Republic of Korea CEPA 03/23/2006 01/01/2010

ASEAN-India CECA 08/13/2009 01/01/2010

Malaysia-India CECA 02/18/2011 07/02/2011

Japan-India EPA 01/31/2011 08/01/2011

Signed and In Effect Date Signed Entry into Force

Trade Agreements

India-Egypt PTA 10/01/2002

India-Israel PTA 01/01/2006

India-EU FTA 06/28/2007

India-SACU PTA 10/06/2007 India-EFTA FTA 01/26/2008

New Zealand-India FTA 04/07/2010

India-Canada EPA 11/16/2010

India-Austrailia FTA 07/28/2011

India-Indonesia CECA 10/04/2011 India-Customs Union of Russia, Belarus, and 04/03/2013 Kazakhstan FTA

RCEP 05/09/2013

Signed and In Effect Negotiations Launched

BY SEA:

India has 13 majors ports and 199 minor and intermediate ports along the coastline. These ports play a significant role in improving foreign trade in a growing economy. Ships transporting cargo from India to North America generally has a lead time ranging from three to five weeks.

BY AIR:

India has 128 airports throughout the country. The growth of passenger and cargo air traffic has caused a strain on the major airports throughout India. The aviation industry in India is currently the 9th largest in the world.

BY LAND:

In India, roads are the most dominant mode of transportation. 85 percent of the countrys passenger traffic and 60 percent of freight is moved via the roads. Along with Indias highways, there is also a major railway.The Indian railways plays a leading role in carrying passengers and cargo across India.

Country Transportation

Orit Apparels Lanka (Pvt) Ltd.

07-02, East Tower, WTC, Echelon Square, Colombo, Sri Lanka, India

Telephone: +91 9411234670

Customers:Levi Strauss & Co.Goodys Ms, L.P.Jones Jeanswear Group Inc.

Top Products:Pants, womens wvoven, woven denim pants, mens woven denim pants

Damco India Pvt, Ltd.

Peetal Basti Rampur Rd Moradabad U P 244001

Telephone: +91 912233088200

Customers:Damco Usa Inc.Homegoods Inc.JC Penny Purchasing Corp.

Top Products:Cotton, glass, bottles

Classic Knits

Alangadu Mangalam Rd Tirupur Tamil Nadu 6410604 Teindia

Telephone: +91 914212247488

Customers:Hanesbrands Inc.Espirit US Distribution Ltd.Hanesbrands Inc. Outerwear Division

Top Products:Cotton, knitted mens boxers, mens boxer briefs

Eastman Exp. Global Clothing (P)

591, Sri Lakshmi Nagar, Pitchampalayam Pudur, Tirupur, Tamil Nadu, India 64603

Telephone: +91 914214301234

Customers:The Gap Inc.Old Navy, LicBen Sherman Clothing

Top Products:Womens clothing, mens clothing, kids clothing

Main Suppliers

Asia Pacific Logisitcs

Kukreja Plaza, Office No-107, A-Wing, 1st Floor, Sector 11, CBD Belapur, Navi Mumbai, India 400614

+91 9320204477

Lead Time - India to Savannah: 29 Days

Cost: $3,962 - $4, 2,40

Shipping Resources

Maersk Line India Pvt. Ltd

Building 9 A Cybercity, DLF Phase 3,Gurgaon, Haryana, 122002

+91 783852448

Lead Time - India to New York: 33 Days

Cost: $3,045 - $3, 460

ZIM World Freight Pvt. Ltd

1211, 12th Floor, Ansal Tower, 38,Nehru Place, New Dehli, Dehli, 110019

+91 1151674046

Lead Time - India to LA: 21 Days

Cost: $2,975 - $3,340

Jumbo Shipping VOF, India

S57 Vatika Business Centre, SupremeBusiness Park, Mumbai, Maharashtra, India 400076

+91 2242019139

Lead Time - India to Seattle: 23 Days

Cost: $3,155 - $3,780

Lead Time

Independce Day - January 1stRepublic Day - January 26thMahshivratri - March 7thHoli - March 22ndGood Friday - March 25thEaster Monday - March 28thMahavir Jayanti - April 20thBuddha Purnima (Buddhas Birthday) - April 21stEid al-Fitr (End of Ramadan) - July 7thKrishna Janmashtami - August 25thEid al-Adha (Feast of Sacrifice) - September 13thMahatma Gandhis Birthday - October 2ndMuharram (Islamic New Year) - October 3rdDussehra (Vijaya Dashami) - October 11thDiwali (Festival of Lights) - October 30thGuru Nanak Jayanti - November 14thMilad un Nabi (Birth of the Prophet Muhammad) - December 12thChristmas Day - December 25thBoxing Day - December 26th

Holidays

Climate

India has a wide variety of climatic regions that range from tropical wet, tropical dry, subtropical humid, and mountain climate. Winter lasts from December to March and this is when India has its coldest weather. Summer, or pre-monsoon season, lasts from April to June. Monsoon season is from July to September and humid temperatures go along with the monsoon weather. Post-monsoon season lasts from October to November. Along with the intense, varietys of climate changes, India does endure climate-related natural disasters throughout the year. Floods and landslides are common disasters in India. These mainly happen during the monsoon season. During the summer, cyclones can be a problem. The intense heat and rising humidity and unstable air cause these cyclones. Also, India is known to endure droughts and heat waves. These are mainly in the desert regions of India but have caused many deaths, ruined crop fields, and caused water shortages.

Conducting BusinessIn India, it is seen as respectful to do a handshake as a way of greeting. However, Indians typically use the namaste (bowing of the head while the hands are palm facing at chest level). It is better for those doing business in India to use the namaste because it shows that they have knowledge of Indian business ettiquette.

When dining with potential business partners in India, it is important to remember to wash your hands before the meal, do not sit until you are instructed, never use your left hand, only eat with your right hand, and leave food on your plate.

When conducting business meetings in India, they should be planned well in advance but also be done in writing and confirmed over the phone. Remember to not plan meetings on our around any of the national holidays.

When entering a meeting, puntuality is expected and always greet the senior figure first. It is best to start off meetings with casual conversation but be sure to avoid talking about personal matters or commenting on the poverty and beggars in India.

As far as negotiations go, it is important to know that Indians must feel like that can trust you before they agree to any kind of negotiation. Make sure to avoid high pressure tactics, avoid confrontation, and do no be forceful.

It is rude to just say no in India, so if they use the terms possibly or well see, it is more than likely their way of saying no.

Risks and Benefits

Risks

Lower productivity and cost competitivenessFragmented industry

Flucuation in rupee valueCompetition from global players

Benefits

Low cost skilled laborAbundant raw material availability

Growing domestic marketPresence across value chain

http://www.facts-about-india.com/transportation-in-India.php

http://www.cci.in/pdfs/surveys-reports/textile-indus-try-in-india.pdf

http://www.makeinindia.com/sector/textiles-and-garments

http://web.worldbank.org/archive/website01291/WEB/0__CO-21.HTM

http://fortune.com/2015/01/25/india-the-next-superpow-er/

https://www.equitymaster.com/research-it/sector-info/tex-tiles/Textiles-Sector-Analysis-Report.asp

https://aric.adb.org/fta-country

https://panjiva.com/Damco-India-Pvt-Ltd/28295076?q=-Women+Apparel

https://panjiva.com/Orit-Apparels-Lanka-Pvt-Lt-d/1336729?q=Women+Apparel

http://www.freightnet.com/directory/p2/cIN/s1.htm

Works Cited

Works Citedhttp://www.indexmundi.com/india/demographics_profile.html

https://en.wikipedia.org/wiki/Demographics_of_India#Eth-nic_groups

https://www.jahajee.com/shipping-companies/MUMBAI_INDIA/

http://www.thehindu.com/data/what-do-indias-latest-ex-port-and-import-figures-tell-us/article7326453.ece

http://www.tradingeconomics.com/india/exports

http://www.theguardian.com/news/datablog/2013/feb/22/cameron-india-trade-exports-imports-partners

http://www.focus-economics.com/countries/india

http://www.ibef.org/industry.aspx

https://en.wikipedia.org/wiki/Economy_of_India

http://profit.ndtv.com/news/budget/article-railway-bud-get-a-tough-balancing-act-for-minister-suresh-pra-bhu-1281060?pfrom=home-lateststories

Global SourcingChelsea Baldwin