INDIA-TURKEY - India in Istanbul Trade and...India and Turkey have been engaging each other in the past. ... business and cultural relations. 2 | INDIA-TURKEY Trade and Economic

Trade and Economic RelationsProspects for the Future

INDIA-TURKEY

August 2014

A Knowledge Report

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Year

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: India-Turkey Trade and Economic Relations: Prospects for the Future

: August 2014

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FICCI do not accept any liability whatsoever for any direct or

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Contact Address:

Federation of Indian Chambers of Commerce and Industry (FICCI) Federation House, 1

Tansen Marg, New Delhi-110001

The emerging global economic imperatives have directly impacted the way

India and Turkey have been engaging each other in the past. Last few years

have brought a qualitative shift in terms of widening and deepening of our

economic engagements.

Presidential and ministerial visits from both countries and over eight FICCI business delegations visiting

number of business centres across Turkey in last two years and the resultant Turkish sectoral delegation

visits to India are some of the positive indicators which augur well for our bilateral relations.

Despite Turkey being 17th largest global economy and 6th when compared to EU countries and India

well on its path to become a USD 2 trillion economy soon, our trade volume that stood at over USD6

billion in 2013-14, is well short of the actual potential. The enhanced people-to people and B2B

interactions have been necessitated to re-vitalise our trade and investment relations. The vigour would

ably support the cause of Turkish companies to actively evaluate the Indian market and vice-versa at a

time when economic scenario has begun to look up. The fact that Indian economy is projected to

stabilise and grow by over 6% by next fiscal, significantly higher than what would be achieved by the

western economies, makes the efforts timely and pertinent.

Moving beyond the perception of a services-led economy, India's manufacturing sector, with SMEs

playing a pivotal role, is gradually scaling high standards in several segments. All major sectors namely,

automobiles, food processing, textiles, pharmaceuticals, infrastructure, new and renewable energy; to

highlight a few, beckon enhanced cooperation between Indian and Turkish companies.

The organisation of India Show in Turkey which, FICCI is partnering with Ministry of Commerce and

Industry, GoI, constitutes one of the largest well-calibrated efforts to take India-Turkey commercial

relations to a next plane.

To fully capitalize on the momentum generated by the initiative and to further deepen our relationship,

will require vision, new ideas, innovation and active dialogue from both sides. This publication is

intended to become the backdrop to such synergies that can ignite partnership between India and

Turkey.

We are confident that this publication will be a useful enabler in triggering new ideas and perspectives

among stakeholders on both sides along which new Indo-Turkish partnerships will emerge. FICCI remain

committed to assisting all stakeholders in developing strategic economic and knowledge partnerships

and are confident that the government, private sector and citizens will benefit greatly from this report.

Foreword

Sincerely,

(Dr. A Didar Singh)

Secretary General

FICCI

Executive Summary 1

Turkey Today: An Economic Update 3

India Today: An Economic Update 9

Introduction: India-Turkey Bilateral 19Trade & Investment Relations

Major Sectors of Mutual Interest 27

Table of Contents

1. India and Turkey enjoy a historical connect that goes back over a two millennia. At a time when Turkey and India have emerged as economic force to reckon with in their respective regions and beyond, the time has come for both the countries to aggressively reach out to each other for mutual gains.

2. This report and today's forum is to establish and cement existing opportunities and also find newer aspects of furthering the relations, business and people to people interaction between India and Turkey. This report has attempted to give a brief insight into the potential industries depicting avenues that are available to business communities of India and Turkey.

3. India is one of the fastest growing free market economies with a sustainable development model built on a solid foundation of entrepreneurial energy, youthful dynamism and creativity. India and Turkey will be benefited by stronger ties in the background of inherent and complementary economic strengths of each other.

4. While Turkey and India have a long history of doing business with each other, as a percentage share of national data, this is minimal on both sides and there is huge potential to increase the bilateral engagement. There may be cooperation in facilitating FDI inflows not only between large corporate but also between small and medium enterprises (SMEs) on both sides. More foreign investment flow from Turkey would lead to more jobs and skill development in India. At the same time Turkish global competitiveness will improve. Enhanced economic activities will also lead to job expansion in Turkey.

5. India has made enormous strides in its economic development in

the past two decades. India is also well positioned to leverage

strengths in today's knowledge-based global economy; to capture

1 | INDIA-TURKEY Trade and Economic Relations: Prospects for the Future

Executive Summary

the Knowledge Process Outsourcing (KPO) space which is the next

wave in global outsourcing. The growth of the IT sector in India

symbolizes the potential of Indian industry to perform according to

world-class standards.

6. Current focus on energy security is timely, with the vast majority of

the global population spread in marginal and emerging economies,

the challenges of energy demand and its affordability has become

fundamental to the quality of life. Turkey, India as well as other

countries require ensuring global energy security on sustainable

basis. This challenge also opens new vistas for global business

opportunities both for developed nations and also for emerging

economies like India and Turkey.

7. The fact that India has a strong and stable political system, based

on parliamentary democracy and a fast and modern economy that

attracts foreign investors reveals the potential for establishing a

strategic partnership and international cooperation. This represents

a unique opportunity also for Turkey to develop joint initiatives aimed

at fostering trade, business and cultural relations.


Turkey Today: An Economic Update

Turkey has four main industrial zones. They are Istanbul and the area around the

Sea of Marmara, the Aegean coast around Izmir, the Adana basin, and the region

around Ankara.

Turkey has weathered the credit crunch better than other emerging economies.

Partly thanks to tough regulation, not a single Turkish bank has gone under. That

is also because, unlike many Western banks, they have few toxic assets and

limited mortgage exposure. So the government has not had to divert public

money into rescuing banks.

As the GDP levels increased to USD 820 billion in 2013, up from USD 305 billion

in 2003, GDP per capita soared to USD 10,782, up from USD 4,565 in the given

period. According to the OECD, Turkey is expected to be the fastest growing

economy of the OECD members during 2012-2017, with an annual average

growth rate of 5.2 percent.

The visible improvements in the Turkish economy have also boosted foreign

trade, while exports reached USD 152 billion by the end of 2013, up from USD 47

billion in 2003. Similarly, tourism revenues, which were around USD 14 billion in

2003, exceeded USD 32.3 billion in 2013.

While this is good news in all respects, some residents are still afraid that these

might lead to an economic overheating as policy makers have failed to reduce

domestic demand that has gone on to become quite rampant.

However, Turkey's uncertainty related to policy-making, and fiscal imbalances

leave the economy vulnerable to destabilizing shifts in investor confidence. The

economy continues to be burdened by a high current account deficit and remains

dependent on often volatile, short-term investment to finance its trade deficit.

The stock value of FDI stood at USD174 billion at year-end 2010, but inflows have

slowed considerably in light of continuing economic turmoil in Europe, the

source of much of Turkey's FDI. Major structural imbalances remain and could

yet jeopardize a largely positive outlook for the emerging economy.


Turkey Today: An Economic Update

Rampant growth, a low savings rate and increased dependence on flows of "hot

money" have driven Turkey's external deficits to critical highs.

Turkey's increased wealth has also not been spread evenly. The country's

Anatolian heartland and the predominantly Kurdish southeast are still much

poorer and lacking in investment.

Unemployment is stubbornly high and economic growth has not so far translated

into sustained job creation.

By 2015, experts believe a significant change will occur, putting the GDP at

USD852.379 billion.

Turkey has attracted tremendous amount of foreign direct investment (FDI) in

recent years. By attracting more than USD135 billion over the past decade,

whereas it only had attracted USD15 billion FDI in the eight decades between

1923 and 2003, Turkey has developed into an attractive destination for FDI in the

world. The country attracted a record high over USD22 billion FDI in 2007. As

such the country continues to be one of the most attractive FDI destinations in

the world.

According to Mr Mustafa Alper, former secretary general of the International

Investors Association of Turkey (YASED),“Turkey has the potential of attracting

five percent of its GNP, around USD 25 billion, in foreign investment every year”.

Foreign Investments


20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

201

0

201

1

201

2

201

3

5,66,78.8

11.715

18,721

23,725,5

29,433,8

37,3

Number of Companies with Foreign Capital

40

35

30

25

20

15

10

5

0

'000

125

100

75

50

25

0

135

17

1923-2003 (81 years) 2004-2013 (10 years)

FDI Inflows($ billions)

Soaring FDI Inflows

Turkish authorities are approaching FDI without discriminating about the sector

or origin, but give special attention to investments that will bring new jobs, know-

how and generate value-added to the economy. Investments in information and

communications technology, machine tools, machinery, metal processing,

logistics and automotive industry, food processing, pharmaceuticals, energy,

services and infrastructure are being particularly encouraged.

Consumer-oriented service companies are pouring into the country, mesmerized

by the country's young population and rapidly changing shopping habits. Turkey

presents its compatibility with global business environment, but the country is

also receiving more and more Greenfield investments in different sectors.

According to Investment Support and Promotion Agency of Turkey(ISPAT)“The

expansion of already installed companies (as in the automotive industry,

household appliances, etc.) presents also an important domain for Turkey's

economy. Turkey is enjoying seeing that the investors strongly believe in the

future of the country and its competitive advantages.”

FDI in Turkey

Increasing Confidence in the Turkish Economy

China

India

Brazil

Unied States

Germany

Australia

Singapore

United Kingdom

Indonesia

Malaysia

South Africa

Russia

Turkey

Vietnam

United Arab Emirates

Thailand

France

Taiwan

South Korea

Canada

Japan

Switzerlan

Poland

Spain

The Netherlands

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

1

3

4

2

5

7

24

10

20

21

-

18

23

12

11

-

13

-

-

9

-

-

6

-

-

1

5

6

3

10

11

7

4

21

16

18

9

20

12

8

-

13

-

24

22

15

-

22

-

-

1.87

1.73

1.60

1.52

1.52

1.52

1.47

1.47

1.45

1.41

1.40

1.39

1.39

1.38

1.38

1.37

1.37

1.36

1.35

1.34

1.31

1.30

1.30

1.29

1.27

Maintained ranking

Moved up

Moved down

Low confidence Values calculated on a 0 to 3 scale High confidence

Ranking

2007 2010 2012 Foreign Direct Investment Confidence Index 2012

Source: A.T. Kearney


Turkish Investments Abroad

According to the Central Bank of Turkey report in January 2011, some 3,500

Turkish companies have invested a total USD23.6 billion in 103 countries until

October 2010. The biggest investment areas of Turkish companies abroad are in

energy, banking, financial services, chemical products, airport operations and

textiles.

Major Turkish Investors Abroad

Company Sector

AdvansaSasa Synthetic Fiber

Kordsa Global Tire Fabric and Industrial Yarns

Temsa Global Commercial Vehicles

Turkish Petroleum Corporation (TPAO) Oil & Gas

TAV Holding Airport Operator

Turkcell Mobile Phone Services

Top reasons to invest in Turkey

• Dynamic, Stable &

Attractive Economy

•

•

•

•

•

GDP & Income

Key numbers

Population

International Hub

Structural Reforms

Benchmarking Performance of the Turkish Economy

800

700

600

500

400

300

200

100

0

786 772

490 478

384304

268196 169

126 9251

Ma

aysi

al

Sth

ica

ou A

fr

Pola

nd

Nhe

raet

lnd

s

Tur

eyk

enAr

gtin

a

Chile

zh

Rp-

Cec

e

a

Rom

ani

Huga

ryn

Slov

kia

a

Bulg

eria

2012 GDP (Current Prices, $Billion)

Average Annual Real GDP Growth (%) 2002-2012

6

5

4

3

2

1

0

5,04,7 4,5

4,33,6 3,5 3,5 3,3

2,92,5

1,61,1 1,0 0,8

Turk

ey

Chile

Sk

alo

vai

aPo

lnd rB

azil

Bulg

eria

Sth

ic

a

ouAf

r

oma

Ran

iCz

ec R

elic

hpu

b

exic

o

M

USHu

ngar

yEu

ro A

re(1

7)a Ja

pan

Source: OECO, Eurostart and National Sources



TAV Holding’s is one of the biggest Turkish investments abroad. Turkey’s top 19

non-financial multinationals held more than USD31 billion in foreign assets as of

December 2009, according to a study carried out jointly by Kadir Has University

(KHU), KPMG Turkey, the Foreign Economic Relations Board of Turkey (DEÝK) and

Vale Columbia Centre on Sustainable International Investment (VCC). The foreign

sales of these companies in 2009 stood at USD14.725 billion. They employed

89,946 persons abroad.

Yildiz

India Today: An Economic Update

India Today: An Economic Update

The prospects of a possible rebound inIndian economy have clearly strengthened

this year. The Prime Minister's pledge to put India back on the high growth

trajectory is supported by an ambitious economic agenda. Within first 30 days

after assuming office and the ensuing union budget, has firmly put the focus on

economic revival – be it measures to tackle inflation or addressing the issue of

black money or undertaking steps to move ahead towards improved

governance.These have certainly lifted the mood of the investors.

In the fiscal year 2013-14economy grew by 4.7 percent y-o-y, which was the

second consecutive year of sub 5.0 percent growth. The lackluster industrial

performance, subdued investment scenario, policy hurdles made the situation

difficult.Besides, uncertainty on the external front further added to the woes.

Thestrong show by the farm sector was the only saving grace last year.The

economy is all set to regain its verve and is expected to cross 5.0%mark in 2014-

15.

Latest numbers for industry and export growth indicate an improvement reviving

the hope of a possible bounce back; however, one will have to be watchful of the

trend. IIP registered a thirteen month high growth rate of 3.4 percent in April

2014. And exports recorded a double digit growth rate in May 2014 after a

prolonged period of low growth.

However, elevated inflation remains a key challenge. Headline WPI inched up in

May 2014 to a five month high of 6.01 percent driven primarily by food and fuel

prices. Inflation remains a key impeding factor to the overall growth prospects of

the economy. The government has clearly indicated that handling inflation will be

a top priority and we hope to see concrete action on this soon.

The upcoming budget, first one for the new government is surrounded with high

expectations. The industry looks forward to a pro growth and pro reforms

budget. The budget provides a good opportunity to give a positive signal to the

industry and the investors.



• GDP growth rate for the year 2013-14 was primarily supported by agricultural

sector output with a good harvest reported in both the Kharif and the Rabi

seasons. With a GDP growth of 4.6 percent y-o-y in Q4, the fiscal year 2013-

14 rounded up an annual growth of 4.7 percent y-o-y. Bland show in industrial

activity persisted throughout the year due to dismal consumer sentiment in

the domestic as well as external economy. Also lack of resolution with regard

to pertinent issues like land acquisition, environmental clearances, mining

activities added to the woes.

Gross Domestic Product (GDP)

-2

0

2

4

6

8

10

12

I II III IV I II III IV I II III IV

% YoY

GDP growth FY12 Agriculture FY13 Industry Services FY14

GDP FY12: 6.7% GDP FY13: 4.5% GDP FY14: 4.7% 4.7%

% Growth

Year PFCE GFCE GCF GFCF

Q1 FY13 5.0 10.2 -2.3 -4.1

Q2 FY13 4.7 9.9 0.8 -0.6

Q3 FY13 5.1 4.5 6.6 4.4

Q4 FY13 5.1 1.8 4.3 3.3

Q1 FY14 5.6 12.9 -5.1 -2.8

Q2 FY14 2.8 -0.1 0.3 3.1

Q3 FY14 2.8 3.6 -3.2 0.2

Q4 FY14 8.2 -0.4 -2.2 -0.9

Source: CMIE


• In Q4 2013-14, farm sector recorded a growth of 6.3 percent y-o-y, up from

3.7 percent y-o-y growth in the previous quarter. In the last two quarters of

2013-14, vis-a-vis the previous year, mining (-0.4 percent in Q4 FY14/ -1.2

percent in Q3 FY14) and manufacturing (-1.4 percent in Q4 FY14/ -1.5 percent

in Q3FY14) sectors witnessed contraction. Infrastructure activity remained

subdued and the construction sector growth rate witnessed considerable

moderation. Service sector growth also decelerated marginally reporting a

growth of 6.4 percent y-o-y in Q4 2013-14, vis-a-vis 7.2 percent y-o-y growth

in Q3 2013-14.

• Private final consumption expenditure (PFCE) noted a sudden jump in growth

rate in the last quarter of 2013-14. This was quite surprising given the passive

performance of consumer durables segment and elevated retail inflation.

PFCE rose by 8.2 percent y-o-y in Q4 2013-14 as against 2.8 percent y-o-y

and 5.1 percent y-o-y growth in Q3 2013-14 and Q4 2012-13 respectively.

With regards to investment, GCF and GFCF declined by 2.2 percent y-o-y and

0.9 percent y-o-y in Q4 2013-14 respectively.

• The outlook for 2014-15 has improved with nascent signs of recovery in sight.

Various assessments expect GDP growth to go beyond 5.0% and the same

has also come across in FICCI’s latest Economic Outlook Survey. However,

sub par monsoons might act as a dampener.

Index of Industrial Production (IIP)

-10

-8

-6

-4

-2

0

2

4

6

8

10

12

Jan-1

2

Mar

-12

May

-12

Jul-1

2

Sep-1

2

Nov-

12

Jan-1

3

Mar

-13

May

-13

Jul-1

3

Sep-1

3

Nov-

13

Jan-1

4

Mar

-14

% YoY

Manufacturing Mining IIP

Industrial performance –Trend (% YoY)

• Index of Industrial Production (IIP) for the month of April 2014 increased by

3.4 percent y-o-y, which was a thirteen month high. IIP growth had

contracted by 1.8 percent and 0.5 percent in February and March 2014

respectively. All the three main sub segments (mining, manufacturing and

electricity) recorded positive growth in April 2014 which is noteworthy and

revives the hope of a bounce back in industrial activity. Nonetheless, it will

be crucial to watch the trend going ahead.

• The manufacturing sector growth in April 2014 rose to a nine month high of

2.6 percent y-o-y as against 1.2 percent y-o-y contraction in March 2014. This

was supported by a turnaround in merchandise exports in April 2014.

Fourteen out of twenty two manufacturing sub groups recorded a positive

growth in the month of April 2014 as compared to the same month previous

year. Major sub-sectors which contributed to the overall manufacturing

growth included electrical machinery & apparatus (66.0 percent), machinery

& equipment (9.6 percent), tobacco products (9.1 percent).

• As per use-based classification, capital goods which recorded a sharp decline

of (-) 11.6 percent y-o-y in March 2014 reported a growth rate of 15.7 percent

y-o-y in April 2014. Basic goods and intermediate goods growth rate

increased by 6.8 percent y-o-y and 4.4 percent y-o-y in April 2014

respectively, up from 4.4 percent y-o-y and 1.6 percent y-o-y in March 2014.

Consumer goods declined for the seventh consecutive month and

contracted by 5.1 percent in April 2014.Although business sentiment seems

to have improved as reflected by a rise in the capital goods output, consumer

sentiment is still to witness an improvement with a dip noted in both durable

and non-durable goods segment.

• The slew of announcements made recently definitely indicate government’s

endeavor to restore confidence among investors and reignite investment

inflows in the country. Going ahead, it will be important to focus on speedy

and timely implementation.



Foreign Trade

-25

-15

-5

5

15

25

-25

-15

-5

5

15

25

May

-13

Jun-1

3

Jul-1

3

Aug-1

3

Sep-1

3

Oct

-13

Nov-

13

Dec-

13

Jan-1

4

Feb-1

4

Mar

-14

Apr-14

May

-14

USD Bn% YoY

Trade balance (RHS) Exports growth

Imports growth

Indicators (USD Bn) Apr- May 2013-14 Apr- May 2014-15

Exports 49.2 53.6

Imports 86.3 75.0

Trade deficit 37.0 21.3

Time period Oil Non-oil Oil Non-oil

May-13 14.1 30.2 -3.2 11.1

May-14 14.5 24.8 2.4 -17.9

Apr-May 2013-14 27.2 59.1 -3.3 15.1

Apr-May 2014-15 27.4 47.5 1.0 -19.6

Imports (USD Billion) Growth rate (YoY %)

• Trade deficit in the month of May 2014 contracted by 42.0 percent y-o-y to

USD 11.2 billion from USD 19.4 billion in May 2013 as exports rebounded and

recorded a six month high double digit growth rate. Overall exports grew by

12.4 percent y-o-y in May 2014 after witnessing a growth of 5.3 percent y-o-y

in April 2014 and a contraction of 4.8 percent y-o-y in March 2014.

• In absolute terms, exports during April-May 2014 rose to USD 53.6 billion

from USD 49.2 billion during the same period previous year, growing by 9.0

percent y-o-y. Strong export growth in May 2014 was aided by increase in

shipment of commodities like engineering goods, petroleum products,

readymade garments and pharmaceuticals.

• Imports continued to be on a declining trend, dipping by 11.4 percent y-o-y in

May 2014 to USD 39.2 billion. This was the eleventh consecutive month of

decline from July 2013 onwards. Cumulative imports dipped by 13.1 percent

y-o-y during April-May 2014 as against growth of 6.6 percent y-o-y during the

same period of the previous year. The continuous decline in gold imports has

contributed to the plunge in overall imports. It is reported that inbound gold

shipment declined by almost 72 percent y-o-y in May 2014. However, non-oil

imports excluding gold rose for the first time in ten months to USD 22.57

billion in May 2014, hinting towards some improvement in industrial

performance.

• After a prolonged period of low growth, the recovery in exports in May 2014

point towards the fact that there is some improvement in global demand. The

economic growth in the advanced economies is slowly picking up. The trend

if con-tinues will have a favorable impact on the exports in the coming

months. However, it is too soon to term it as a rebound.


Foreign Investments

(Net) Foreign Direct Investment

(USD Million)

(Net) Portfolio Investment

(USD Million)

Total Foreign Investment Inflows

(USD Million)

Apr-13 2788 1621 4409

May-13 1866 6782 8648

Jun -13 1835 -8628 -6793

Jul-13 1930 -4716 -2785

Aug-13 1661 -2031 -370

Sep-13 4511 145 4655

Oct-13 2040 -414 1626

Nov-13 2165 –83 2082

Dec-13 1861 2887 4747

Jan-14 -559 2528 1969

Feb-14 -666 1421 755

(Net) Foreign Direct Investment

(USD Million)

(Net) Portfolio Investment

(USD Million)

Total Foreign Investment Inflows

(USD Million)

Mar-14 2133 5309 7442

Apr-14 2203 -121 2082

Apr’12- Mar -13 19819 26891 46710

Apr’13-Mar-14 21564 4822 26386

% changeFY 14 over FY 13 8.8 -82.1 -43.5

Source:RBI

• A considerable decline was noted in the total foreign in-vestment inflows in

April 2014. The total foreign inflows stood at USD 7.4 billion in March 2014,

which came down to USD 2.1 billion in April 2014, anm-o-m contraction of

72.0 percent. This was primarily owing to a sharp fall in net portfolio

investments inflows.

• Net portfolio investments stood at USD (-) 0.12 billion in April 2014 vis-à-vis

USD 5.4 billion inflows in March 2014.

• However, the daily data for FIIs put out by SEBI points towards a turnaround

in the month of May 2014. The election results announced in May have

brought in a wave of optimism. The investors are once again reposing their

faith in India’s economy.

• Net foreign direct investment in April 2014 amounted to USD 2.2 billion, a

decline by 21 percent on a y-o-y basis. However, net FDI increased by 3.3

percent when compared with March 2014.

Exchange Rate

Rupee Exchange Rate

54.3859.73

83.2100.98

70.7781.24

0

20

40

60

80

100

120

Apr-13

May

-13

Jun-1

3

Jul-1

3

Aug-1

3

Sep-1

3

Oct

-13

Nov-

13

Dec-

13

Jan-1

4

Feb-1

4

Mar

-14

Apr-14

May

-14

Jun-1

4

Rupee/US dollar Rupee/Pound Sterling Rupee/Euro

Source: CMIE


• The Rupee Dollar exchange rate witnessed some ap-preciation in May 2014.

The Rupee value averaged 59.3 for a dollar in May 2014 vis-à-vis the average

value of 60.4 in April 2014. However, it once again slipped to 59.7 in June

2014.

• The election results did bring in a sentiment of optimism leading to an influx

of foreign investment inflows in both debt and equity markets boosting the

Rupee value.

• However, the pressure on Rupee value remains. The developments in Iraq

and Ukraine might weigh heavy on the currency movements.

• The Rupee USD exchange rate as on July 1, 2014 was 60.14.


Key Policy Announcements – June 2014

• Monetary Policy announced on June 3, 2014 –Reserve Bank of India kept the

repo rate unchanged in the monetary policy announced on June 3, 2014. The

SLR, however, was brought down from 23.0 percent to 22.5 percent.

• Forest clearance to go online from July 1, 2014–The forest clearance process

has been made on line and is likely to ex-pedite the process of green

clearances bringing in greater transparency.

• Hon’ble President Pranab Mukherjee puts across the new government’s road

map – The Hon’ble President presented a comprehensive road map of the

new government focusing on growth with equity and human development.

• Government proposes to enhance FDI in defence subject to strategic

safeguards.

• Government increases rail fares – government announced an increase in rail

fares by around 14.0 percent across all classes, while the freight fares were

increased by 6.5 percent.

• Government announces measures for improving coal availability and quality -

Mr. Piyush Goyal, Minister of State for Power, Coal and New & Renewable

Energy (I/C) announced measures to address concerns of power producers

pertaining to coal availability and quality. While moves like reducing coal for e-

auction could ramp up supplies in the short- term, streamlining the

processes of environmental and forest clearances with time-bound approvals

and ensuring better coordination with railways will help the sector in

increasing coal supplies in the medium term.


• Government extends reduced excise duty rates till December 31, 2014 for

auto industry.

• Labor ministry has introduced a web portal where enterprises can file their

compliance returns for 16 of the 44 central labor laws in the country. This

portal will be applicable only to establishments operating under the Central

sphere and by October this year it will be operational at the national sphere.

It was also informed that in due course of time the Labor Ministry will come

up with a single return format for the 16 labor laws after due amendments in

the rules.

• Central Bank reduces export credit re finance limit - The Reserve Bank of

India’s has reduced the availability of funds under the export credit refinance

(ECR) window to 32 per cent from 50 per cent of export credit outstanding.

However, the RBI, in its second bi-monthly monetary policy, proposed to

“fully compensate’’ for the reduction in liquidity under the scheme through a

special term repo (borrowing) facility of 0.25 per cent of net demand and

time liabilities.

• Government draws a plan for national waterway grid – government has

drawn a Rs 25000 crore plan to create a national waterway grid connecting

Ganga, Brahmputra, Mahanadi and Godavari rivers.

• RBI tightens money laundering rules - Reserve Bank of India has tightened

the money laundering rules for money transfer companies and has

empowered their designated directors to penalizeoffenders who fail to

comply with the Prevention of Money Laundering Act, 2002.

• Government provides clarity on CSR activities under Companies Act - The

government has said that "one off events" such as marathons and

sponsorships of television programmes would not be considered towards

CSR expense and CSR activities should be undertaken only in

‘project/programme’ mode.

• To tackle high food inflation - new government has imposed export restriction

on certain commodities. It is also likely to release 5 million tonnes of rice

from state stock piles and announced to offer a line of credit to the states to

directly import pulses and edible oils to meet shortages. The center had

advised the states to freely allow movement of fruits and vegetables by

delisting those from Agricultural Produce Market Committee (APMC) Act and

has urged states to crack down on hoarders.

Introduction: India-Turkey Bilateral Trade & Investment Relations

Bilateral relations are friendly and cordial and are steadily improving. Indian

economic progress and technological advancement have been instrumental in

the recent upsurge in Turkish interest towards India also given that both are G-20

members with progressive economies.

Institutional arrangements in terms of Joint Commission for Economic and

Technical Cooperation (JCETC), Joint Business Council (JBC) exist between the

two countries. Last meetings of JCETC and JBC were held in India and Turkey in

January 2014 and September 2009 respectively. Turkey and India are signatories

to agreements such as avoidance of double taxation (DTA), reciprocal protection

and promotion of investments (BIPA), S&T, maritime, agricultural and tourism

cooperation.

Economic and commercial relations between India and Turkey have been

growing steadily, though last year saw a significant decline in Turkish exports to

India. Turkey is India's 40thlargest trading partner globally and the 42ndlargest

investor in India.

The last few years have seen substantial growth in trade relations between the

two countries. The balance of trade has been in India's favour. Bilateral trade was

impacted negatively as a result of the financial/economic crisis of 2009. The trade

which was showing signs of healthy growth, contracted by 16% in 2008-2009,

but for 2012-13 it registered a volume of USD 5.99 billion (+ 31.27 % yoy

growth).

Recent Bilateral Trade and Investment Trends

Trade


Introduction: India-Turkey Bilateral Trade & Investment Relations


India-Turkey Bilateral Trade (figures in USD Million)Source: Ministry of

Commerce and Industry, GoI

2009-2010 2010-2011 2011-2012 2012-2013 2013-2014

India’s Exports 1,539.20 2,749.15 3,547.26 3,963.66 4,432.48

%Growth 8.64 78.61 29.03 11.74 11.83

India’s Imports 1,603.64 821.06 1,021.91 2,034.18 760.74

%Growth 6.6 -48.8 24.46 99.06 -62.60

Total Trade 3,142.84 3,570.21 4,569.17 5,997.84 5193.22

%Growth 7.59 13.6 27.98 31.27 -13.41

India’s exports to Turkey include cotton and synthetic yarn, organic dyes,

organic chemicals, denim, steel, granite, antibiotics, carpets, unwrought zinc,

sesame seed, TV CRTs, mobile handsets, clothing and apparel.

Turkey’s exports to India include auto components, marble, textile machinery,

handlooms, denim, carpets, cumin seed, minerals (vermiculite, perlite and

chlorites), and fittings and steel products.

Turkey ranks 42ndoverall in terms of FDI Inflows to India with cumulative direct

investment into India amounting to USD 87.23 million (April 2000 – May 2014)

accounting for 0.04% of total FDI inflows.

Turkish companies having presence in India include LÝMAK Construction, SARAR,

SOKTAÞ and IZOPOLI-KINGSPAN.

• LÝMAK has been in India since 2001 and has so far participated, in

collaboration with an Indian company-Soma in construction, widening and

strengthening of National Highway segments measuring 135 kms and in

collaboration with another Indian company – Gammon India Ltd in laying

of cross country pipeline and associated facilities on a 274 kms long

segment.

Investments

Turkish Investments in India

Turkish companies in India


• SARAR, a high-end garment manufacturer entered the Indian market

through its franchisee partners in 2003. SOKTAÞ, a leading garment

manufacturer in the European Customs Union – Turkey registered itself in

India in early 2007 and has also started work on a proposed garment

factory to be set up in Maharashtra.

• IZOPOLI-KINGSPAN, a leading manufacturer of fire retardants, has

already opened an office in India in 2007 and they are looking at the

possibility of putting in investment for manufacturing of the fire

retardants to cater to the Indian market.

• Hidromas – manufacturer of heavy earth movers are in the process of

setting up a manufacturing unit in Chennai.

• A consortium formed by the Nas Aviation Services India Ltd and the

Turkish airport ground services provider Celebi won a tender to provide

ground services for 10 years at Mumbai international airport in India.

Celebi has a 51% stake in the venture while the Indian company has a

49% stake. In yet another development, Celebi won another tender for

modernization of the cargo terminal at Delhi’s IGIA and managing it for 25

years.

• Fernas, a Turkish infrastructure company mainly operating in pipeline

sector, has won a contract for laying and commissioning a segment the

GAIL pipeline in Gujarat.

More than 150 companies with Indian capital have registered businesses in

Turkey in the form of joint ventures, trade and representative offices. They

include M/s Polyplex, GMR Infrastructure, TATA Motors, Mahindra & Mahindra,

Reliance, Ispat, Aditya Birla Group, Tractors and Farm Equipment Ltd., Jain

Irrigation, Wipro and Dabur.

• The Indian Railway Construction Company (IRCON) executed two railroad

electrification projects worth USD 35 million awarded by the Turkish State

Railway Authority (TCDD) in nineties. Since then, there have been some

forward movements in cooperation in this sector.

• Kalpataru, Gujarat along with BARMEK participated in power transmission

line projects for TEAS in 2003.

• Punj Lloyd along with LIMAK had undertaken construction work in the

prestigious Baku-Tbilisi-Ceyhan Pipeline Project. It was the first foreign

company to do such a project in Turkey.

Indian Investments in Turkey


• An Indian company Polyplex set up a polyplex film manufacturing factory

in Chorlu, Turkey in 2005 with a total capital investment of USD 60

million. The production from the factory is utilized mostly for exporting to

West European countries and partly to Turkish market.

• In 2002, Indo-Rama Group started a production unit for polyester fiber.

• TATA Motors have an existing tie-up with Mesin Limited of Isotlar Group

for marketing and after sale service for TATA vehicles in Turkey. For past

few years, they have been selling TATA Pickup vehicles in Turkey. In

February 2005, TATA Motors launched their Passenger Vehicles in Turkey.

This included TATA Indica and TATA Indigo models. TATA Motors has

started an Assembly Unit in Adana for assembly of TATA buses primarily

for export to Middle East.

• Mahindra & Mahindra has formed a joint venture marketing network with

ILCE OtomotivServisve Ticaret A.S. for its utility vehicles and tractors in

Turkey. Approval for utility vehicles has been obtained.

• Industrial houses such as Reliance, Ispat, Aditya Birla Group etc. have

established their trading offices in Turkey to look for opportunities in the

market here.

• Tractors and Farm Equipment Ltd (TAFE), a Chennai-based company of

the Amalgamations group, announced in October 2008 that it plans to set

up a tractor manufacturing plant in Turkey. With an investment of

aroundUSD 20 million,the plant went on stream in 2010 and

manufactures a range of tractors for distribution in Turkey through

AGCO's dealer network.

• The Indian Oil Corporation Limited (IOCL), in collaboration with ÇalikEnerji

of Turkey, was granted license for establishing an oil refinery with a

capacity of 15 million tons a year in Ceyhan, envisaging a total investment

of approximatelyUSD 5 billion. However, the two partners in this project

are yet to agree on details and no work on the ground has started so far.

• National Building Construction Corporation (NBCC) provided consultancy

services for the Marmara Engineering Emergency Reconstruction Project.

• Jain Irrigation Systems has invested aroundUSD20 million in two major

projects in the southern province of Adana. The manufacturing facility

produces irrigation systems. They have plans to invest in a food

processing plant at a later stage.


• Arcelor Mittal has acquired significant business interests in two steel

plants in Turkey, operated by Erdemir and Borusan respectively.

• CRI Pumps have set up an assembly unit in Izmir.

• Dhanus Technologies, a Chennai based IT company had concluded an

agreement to acquire Borusan Telekom - Turkey’s first alternative telecom

operator with “A” type license in January 2008 with an investment of

USD 77 million.

• Some of the Indian companies have invested in mining sector in Turkey,

including in iron ore, marble and boron.

• In July 2010, Indian IT major WIPRO signed a joint service provider

agreement with AS/Nexia of Turkey to provide consultancy services on

energy issues and risk management in the context of the deregulation

and privatization in Turkey.

• Dabur India Limited has acquired 100% stake in HobiKozmetik Group, a

Turkish personal care products company, through its international arm –

Dabur International Limited for Rs 323.78 crores (approximately USD69

million).

• Pioneer WinconPvt. Ltd has installed and commissioned 250 KW capacity

wind turbine in Turkey in July 2010.

• India and Turkey on February 9, 2010 desired to develop and expand

cooperation in science and technology and in other areas of common

interest and launched an Advanced Science and Technology Dialogue,

besides offering to actively study the possibilities of working together in

mutually identified projects in areas such as telecommunications,

computerization, non-technology space research, bio-technology and

environmental technology.

India and Turkey have signed many Agreements over the years to strengthen and

deepen their economic cooperation.

• The Bilateral Trade Agreement between India and Turkey was signed in

1973.

Recent Trade and Investment breakthroughs

Major Bilateral Agreements


• This was followed by an Agreement on setting up an India–Turkey Joint

Committee on Economic and Technical Cooperation (JCETC) in 1983.

Under this Agreement, JCETC meetings are held alternately in India and

Turkey. The 10th session of the JCETC was held in New Delhi in January,

2014.

• Establishment of a Joint Study Group (JSG) to explore the possibility of

concluding a bilateral FTA was announced during 9th JCETC meeting in

2009.

• India-Turkey Joint Business Council (JBC) between Federation of Indian

Chambers of Commerce and Industry (FICCI) and Foreign Economic

Relations Board of Turkey (DEIK) was set up in 1996. The last session of

JBC was held in Istanbul on September 9, 2009.

• During the visit of the Turkish Foreign Minister Ali Babacan in February

2008, FICCI and TOBB signed a memorandum of understanding to

enhance cooperation.

• During visit of the Indian Prime Minister Vajpayee to Turkey in September

2003, it was also decided to set up an Indo-Turkish Joint Working Group

on Trade and Economic Issues (JWG). The first meeting of JWG was held

in New Delhi in October 2004. The second meeting of JWG was held in

Ankara on September 7, 2009.

• During the Turkish Prime Minister TurgutÖzal’s visit to India in 1986, the

bilateral Civil Aviation agreement was signed.

• Two Agreements – one regarding avoidance of double taxation and the

second on tourism – were signed during the Turkish President Demirel’s

visit to India in 1995.

• During President K.R. Narayanan’s visit to Turkey in September 1998,

Agreements on Reciprocal Promotion and Protection of Investment;

Prevention of Illicit Trafficking in Narcotics and Psychotropic Substances;

Memorandum of Understanding between the Council for Scientific and

Industrial Research (CSIR) and Turkish Scientific and Technological

Research Institute (TUBITAK) and Memorandum of Understanding

between the National Centre of Trade Promotion (NCTP) and Export

Promotion Centre of Turkey (IGEME) were signed. Upon exchange of

Instrument of Ratification, the agreement between India and Turkey

concerning the Reciprocal Promotion and Protection of Investment

entered into force on October 18, 2007.


• A Memorandum of Understanding for Cooperation in agriculture was

signed during visit of the Turkish Prime Minister Bülent Ecevit in 2000.

• Another Memorandum of Understanding for cooperation in the Railway

sector was signed during the visit of Turkish Minister for Transport to India

from 21 September to 26 September, 2000.

• During Prime Minister Vajpayee’s visit to Turkey in September 2003, an

Agreement on Cooperation in the field of Science & Technology and a

Protocol on Cooperation in the fields of Information Technology and

Computer Software were signed.

• Cooperation in hydrocarbon sector got a boost when a MoU was signed

during the visit of Turkish Minister of Energy & Natural Resources to India

in November 2005. In pursuance of the MoU, the first meeting of India-

Turkey Joint Working Group (JWG) on cooperation in Hydrocarbons was

held in New Delhi at the time of the referred visit. The second meeting

took place in Ankara on May 21, 2008. The 3rd meeting is to take place in

India on a mutually convenient date.

• A bilateral Memorandum of Understanding in the field of agriculture was

signed on March 31, 2000.

• During the visit of Rashtrapati ji Shri Pranab Mukherjee to Turkey during

October 5-7, 2013, five inter-governmental agreements were signed along

with six agreements in the education sector viz., MoU between NSIC and

Small and Medium Enterprises Development Organization (KOSGEB);

Protocol between All India Radio & Turkish Radio & TV Corporation (TRT);

Protocol between Department of Science & Technology (DST) & Scientific

& Technological Research Council of Turkey (TUBITAK); Protocol between

Doordarshan & TRT; Protocol in the field of Archives between Govt. of

India & Govt. of Turkey ; MoU between Jamia MilliaIslamia & Kadir Has

University, Turkey; MoU between Delhi University &Kadir Has University,

Turkey; MoU between Mevlana University, Turkey & University of

Hyderabad; MoU between Jamia MilliaIslamia & Istanbul University; MoU

between Delhi University & Ataturk University, Turkey; MoU between

JNU & Kadir Has University, Turkey.

Major Sectors of Mutual Interest

Automotive Sector

Turkey

Turkey, according to provisional statistics of the Paris-based International Motor

Vehicle Manufacturers’ Association (OICA), ranked 6thbiggest motor vehicle

manufacturer in Europe and 16th largest in the world in 2012.

Turkey is Europe’s largest producer of commercial vehicles and stands

8thbiggest manufacturer on the planet. In Europe, only Germany, Spain, France,

Russia, United Kingdom manufactured more motor vehicles than Turkey in 2010.


The automotive industry has developed spectacularly since the launching of

Turkey's customs union with the European Union (EU) in 1996, with most of

world's major manufacturers deciding to establish production bases in Turkey for

sales both to domestic and export markets. Production increases have been

export-driven.

Major Sectors of Mutual Interest

Development in the Turkish Automotive Market (2002-2010)

Source: Automotive Manufacturers Association (OSD)

(000 Units)

Production

Exports

Sales

Imports

Share of Exports (%)

2002

357

262

175

83

73

2003

562

360

401

223

64

2004

862

518

754

436

60

2005

914

561

763

438

61

2006

1,024

706

670

384

69

2007

1,132

828

641

359

73

2008

1,171

920

526

306

79

2009

884

637

575

267

72

2010

1,124

763

793

465

68


Today, 14 out of every 1,000 motor vehicles produced in the world are

manufactured in Turkey. In 2009, the nation became Europe’s biggest producer of

commercial vehicles, surpassing Spain and France in output.

All major foreign automotive companies have operations in Turkey, including Ford,

Toyota, Mercedes Benz, Hyundai, MAN, Renault and Fiat. Turkey has 15 large

motor vehicle manufacturers. Most of the companies in the sector are either

foreign-owned or joint ventures with foreign manufacturers. Some produce

under license agreements with foreign manufacturers.

A record 793,172 motor vehicles were sold in Turkey in 2010, up 38% from 2009.

The previous record in sales of motor vehicles in the country was in 2005, when

763,163 units were sold. Some 59% of all motor vehicles sold in Turkey in 2010

were imports.

In addition to passenger cars, farm tractors, trailers, light and heavy-duty trucks,

pick-up trucks, passenger buses, mini and midi buses are produced in Turkey.

Timeline of the Development of the Turkish Automotive Industry

1960-1970 1971-1980 1981-1990 1991-1995 2005-20151996-2004

Development of automotive supply

industry

Development of automotive supply

industryStarting of exports

Fully integratedproduction centers,Sustainable global

competition

Growth in R&D. Design and Technology

Management

Assembly plantsreached concrete

capacity

Protected Market-Import Substitution Transition Period-Export Oriented Production

Free Market-Perfect Competition Opportunities

Source: Automotive Manufacturers Association

Companies Passenger Commercial Agricultural

Cars Vehicles Tractors Total

Tofas 115,720 196,525 312,245

Oyak-Renault 307,083 307,083

Ford Otosan 242,070 242,070

Toyota 83,286 83,286

Hyundai Assan 77,000 77,000

Turk Trator 28,277 28,277

Karsan 24,719 24,719

Honda Turkey 20,305 20,305

Turkish Motor Vehicle Production in 2010 by Companies

(In Units)


With more than 800 manufactures the country also has thriving components,

parts and tyre industries. 80% of the components used are locally manufactured.

Some of the foreign companies with investments in the auto components

industry include Bosal Holding (Belgium), Arcelor Auto (France), H.P. Chemie

Pelzer (Germany), Magnetti Marelli (Italy), Mecaplast (Monaco), Autoliv (Sweden),

Gestamp Automocion and Bamesa Group (Spain), Robert Bosch (Germany), Hanil

E Hwa (South Korea), and Federal Mogul (U.S.), Cummins Inc.(U.S.), Teksid (Italy),

Heyes Lemmerz (U.S.), Arvin Meritor (U.S.), Exide Corp (U.S.), Faurecia (France),

Sango Co. (Japan), Yazaki (Japan), Michelin Kronprinz, Groupe Plastic Omnium

(France),Goodyear (U.S.), Bridgestone (Japan), Toyoda Iron Works (Japan), ZF

Lemförder (Germany), ZF Friedrichshafen (Germany) Mando Corp. (South Korea).

Many of the vehicles produced in Turkey are domestically designed and

manufactured only locally and nowhere else. But Turkey doesn’t have its own

brand automobile. Prime Minister Recep Tayyip Erdogan has urged the country’s

leading businessmen to come together to produce Turkey’s first international

brand automobile.

The industry is largely export oriented with nearly 80% of all automobiles and

69% of all commercial vehicles sold abroad. About 70% of all of its vehicle

exports are destined to the nations of European Union. Prime Minister Recep

Tayyip Erdogan’s conservative government set a target for USD 75 billion in

annual automotive exports for the country by 2023, the 100th anniversary of the

Republic.

Production of low-cost, small, hybrid or electrically charged models, the real need

of the nation’s consumers, is just in its incipient stages in Turkey. The government

in early 2011 introduced tax incentives to encourage the country’s foreign

dominated manufacturers to produce electric models for domestic and export

markets to revive the industry.

Companies Passenger Commercial Agricultural

Cars Vehicles Tractors Total

M. Benz Tork 14,480 14,480

Temsa 3,367 3,367

B. M. C. 3,342 3,342

Anadolu Isuzu 3,292 3,292

Otokar 2,236 2,236

Hattat Tarim 2,148 2,148

MAN Turkey 1,132 1,132

TOTAL 603,394 491,163 30,425 1,124,982

Source: Automotive Manufacturers' Association (OSD)


Sales taxes on electrical model cars would be a fraction of cars running on

gasoline and other fossil fuels with the Ministry of Finance, in February 2011,

slashing the special consumer tax (ÖTV) on electrical automobiles to as low as

3% from 37%. Buyers of automobiles operating on gasoline, diesel or liquefied

petroleum gas will pay anywhere between 37% to 84% ÖTV on cars depending

on the engine capacity. The developments came as Turkish-designed electrical

automobiles were the stars of the March2011 Geneva Automobile Show.

The high quality of the Turkish industry in terms of production technology,

innovation capacity and human resources is appreciated worldwide.

Geographical position and logistic opportunities make Turkey an attractive

location for automotive investments. Turkish companies are aware of the

importance of these factors for global competition. Turkey is also showing good

progress in harmonizing its legislation and regulations on the automotive sector

with those of the EU in matters such as fair competition, consumers, patents,

machinery directives etc. The country’s legislation is generally in line with

international rules of free trade within the context of the Customs Union and the

World Trade Organization.

The Indian automobile market is estimated to become the 3rd largest in the

world by 2016 and will account for more than 5% of the global vehicle sales;

India is expected to become the 4th automobiles producer globally by 2020 after

China, US and Japan.

India

10,000*

5,100*

3,2343,1462,9872,357

1,838

2008-09 2009-10 2010-11 2011-12 2012-13 2015-16 2020-21

Figures for financial year - April to March

(*Estimates)

• CAGR 2008-12: 14%

• CAGR 2012-21: 13%*

('000 units)

10,000

7,500

5,000

2,500

Passenger Vehicles Prodution


The turnover of the Indian auto component sector stood at USD 39.7 billion in

FY2012–13. The growth is likely to remain robust in coming years with the auto

component industry expected to reach USD 115 billion by 2020/21.

Holding immense promise, India’s exports of auto components increased at a

CAGR of 17% during 2008-13; Exports have further risen to USD 9.7 billion in

2012-13. India is emerging as global hub for auto component sourcing. Relative

to competitors, India is geographically closer to key automotive markets like the

ASEAN, Japan, Korea & Europe.

One of the key factors driving the sector’s growth is the cost advantage enjoyed

for the sector vis-a-via Europe and Latin America. Another factor is India being

the 4th largest producer of steel in the world and among the lowest-cost ones; ndthe country is slated to become the 2 largest steel producer by 2015. Buoyed

by the future potential, major global OEMs are planning to make India a

component sourcing hub for their global operations.

Growing working population and expanding middle class are expected to remain

key demand drivers. Presence of a large pool of skilled and semi-skilled

workforce amidst a strong educational system is only going to extend needed

support to log impressive growth in coming years. Increased investments in

R&D operations and laboratories, which are being set up to conduct activities

Eicher Maruti SuzukiEscorts New HollandHero Moto Corp MahindraHonda Motorcycle Suzuki MotorcyclesHonda SIELCars Swaraj MazdaICML Tata MotorsJCB Yamaha

Bajaj Auto Man ForceFlat Marcedes BenzForce Mators PSAGM SkodaJohn Deere Tata HitachiMahindra Tata MotorsMahindra Navistar Volkswagen

Volvo Eicher

*New Hub: SanandTata Motors, Maruti, Ford India,

Ashok Leyland RenaultBMW ROyal EnfieldCaterpiller Same DeutzDaimler TAFEFord Tata MotorsHindustan Motors Toyota KirloskarHyundai TVSNissan VOlvo Buses

Hindustan Motors

(Illustrative List)

Automotive Clusters in India

Singficant Manufacturing base of OEMs-Indian & Global

North

West

South

East


such as analysis and simulation, and engineering animations. Reduction in excise

duties in motor vehicle sector will spur demand for auto components. Several

global Tier-I suppliers have therefore announced plans to increase procurement

from their Indian subsidiaries.

The growth of global OEM sourcing from India and the increased in digenisation

of global OEMs is turning the country into a preferred designing and

manufacturing base. Investment opportunities are emerging in engine & engine

parts. The entry of global players is expected to intensify competition in sub-

segments such as gears, clutches and shock absorbers.

Foreign Investors in Auto Component Sector

Bosch (Germany) Delphi, UK

Aisin Seiki Company (Japan) GrazianoTrasmissioni (Italy)

Denso (Japan) ZF (Germany)

Valeo, (France) FAG (Germany)

TRW (USA) Magna (Canada)

Japan 58%

Korea 17%

Local 17%

US 6%

Europe 2%

Korea 26%

Japan 53%

Europe 5%US

7%

Local 9%

Mercedes BenzFordToyotaHondaGMFlatHyundaiMaruti SuzukiTata MotorsMahindraHindustan Motors

BMW

VW

Skoda

Renault Nissan

Mercedes Benz

Ford

Toyota

Honda

GM

Flat

Hyundai

Maruti Suzuki

Tata Motors

Mahindra

Force Motors

Hindustan Motors

Maruti SuzukiTata MotorsMahindraHindustan MotorsPremier

MahindraHindustan MotorsPremier

Rapidly growing presence of Global OEMS

Passenger Vehicle market share by OEM parent country

2007 2011

1980 1990 2000 2011

Illustrative List

Loca

lFore

ian


It is estimated that there will be excellent demand in India for low cost xEVs that

are suited for safe short-distance urban commute (average 50-100 km/trip), and

are rugged enough to perform reliably in the most hot climatic conditions that

also see torrential monsoon rains for 3-4 months of the year. It is estimated that

the total xEV sales would be about 6-7 million units by 2020.

100% FDI is allowed under the automatic route in auto components sector

subject to all the applicable regulations and laws.

The textile industry, combining cotton and synthetic yarns, fibers and fabrics,

home textiles, ready-wear and apparel, continues to be the largest economic

sector of Turkey, employing an estimated 2.5 million people and providing indirect

jobs for 6.5 million others. The industry contributes to around 10% of the GNP.

Turkey’s textile industry is the world’s 10th biggest and the European Union’s

number one supplier. The clothing industry until recent times was characterized

by small, low-capital family-run operations, many of which were simple cut and

paste operations with no original designs and products.

The country has around 180,000 clothing producers. The country has around

2,000 textile manufacturers, which are large-scale, heavily mechanized

operations, employing more than 150persons each and having more than USD 15

million in annual sales each. About 60% of the nation’s textile and clothing are

exported.

Textile and Apparel Sector

Turkey

Turkey Textile, Clothing, Leather and Carpet Exports in 2009 and 2010

(In 1,000 U.S. Dollars)

*Textile and raw materials: cotton yam, gray cloth, fabrics, home taxtiles, synthetics fibers and yarns andfabrics, accassories, and technical textiles.

Source: Turkish Exporters' Assembly(TIM)

Products 2009 2010 Change in % Over 2009

Ready wear and apparel 13,297,909 14,644,153 10.7

Textile and Raw Materials 5,514,480 6,528,299 18.4

Leather and leather products 1,064,715 1,272,305 19.5

Carpets 1,086,205 1,286,389 20.8

Total 20,963,349 23,732,144 13.2


Turkey is the world’s 6th biggest ready wear and apparel manufacturer and the

European Union’s 2nd largest supplier after China. According to the Turkish

Clothing Manufacturers’ Association and the Centre for the Promotion of Exports

(ÝGEME) the nation controls a 4.3% share in the global export trade in clothing, a

6.4% share in foreign sales of apparel in the European Union, and a 1.7% of

exports of apparel to the U.S.

The industry is undergoing a major restructuring because of increased

competition from low cost products from China in the European Union and the

U.S., Turkey’s principal markets for textiles. Particularly hard hit have been Turkish

ready-wear manufacturers, who are seeing their profits decline and markets

shrink.

Nevertheless, Turkey’s vast clothing and apparel industry is changing its image

from a mass producer of ready wear for manufacturers, fashion houses and

department stores in western Europe and the United States to a creator and

retailer of new designs, fashions and quality labels, turning out higher end and

higher priced products for upper income families.

The conditions are ripe for foreign investment and partnerships in aspects of

quality design and production, management, marketing and distribution. Co-

production of European and Turkish firms is now a general fact. Some 294

foreign-owned firms operate in the sector. Many western manufacturers, such as

Hugo Boss and Levi Strauss have manufacturing operations in Turkey. Foreign

department stores and hypermarkets, such as Marks and Spencer, JC Penny, and

Sears have purchasing offices in Turkey or have agents that make purchase

orders on behalf of them. Companies such as GAP, Next and Nike also buy direct

from Turkish producers for their (world-wide networks). The existence of these

companies has to some extent protected Turkey from the progressive loss of

competitiveness due to the over-valued Turkish Lira.

Turkey's Main Textile Exports Are

• Cotton weaves including, cotton apparel and weaves

• Woolen yarns and weaves

• Silk and synthetic yarns, weaves and chord fabrics

• Linen, hemp and jute, including sisal yarn and sisal weaves

• Floor covering, hand made and machine made carpets, tuftring, felt and kilims

• Knit wear

• Ready wear garments

• Leatherwear and footwear


Turkey has been producing garments and ready wear for a wide range of

European and American fashion houses and clothing manufacturers and retailers

from Versace to Benetton to Wal-Martand Carrefour for the past two decades.

The country’s demographics with 50% of Turkey’s 73.711 million people are

under the age 28 and its closeness to heavily populated markets in Western and

Eastern Europe, the Middle East, and Africa make it an excellent base for foreign

investment.

The top five foreign markets for Turkish exports are Germany, the USA, the

Russia, the UK and France.

Turkey also imports clothing and textiles mainly gray cloth, cotton yarn, fabrics,

synthetic fibers and yarns. Most of its imported clothing comes from Italy, Spain,

China, England, Germany, France, Bulgaria, India, Greece and the Netherlands.

Most of its textile imports originate from the U.S., Italy, Germany, China, India,

South Korea, Pakistan, Indonesia and Greece. According to a report by TÜÝK

Turkey imported2.557 billion in textile and apparel in 2010.The country is also a

major importer of cotton. In 2010, it paid USD 3.385 billion for cotton imports.

Turkey also imports chemical dyes. Turkey’s clothing manufacturers are also

hoping to be admitted to planned special industrial zones that will be able to sell

products to the U.S. without any quotas and tariffs.

Textile imports were around USD10.179 billion in 2010, including cotton and

synthetic fibers and leather products and accessories. Clothing imports

increased rapidly between 1999 and 2005,with a CAGR of 25.4%, reaching

USD2.562 billion in 2010. Around 70% of the total textile and apparel imports are

textile materials like cotton, fibers, yarns and fabrics, and the rest are ready made

garments and articles.

Size of Textile and Apparel Industry

2000 2005 2010 2015 2020

16

30

23 26

52

45

89

89

140

Domestic Exports

42


India

India is 2ndlargest exporter of textile and apparel in the world. The sector

contributes 14% to industrial production and 4% to GDP and 13% of country’s

export earnings. With over 45 million people, the industry is one of the largest

sources of employment generation in the country. The domestic textile and

apparel industry in India is estimated to reach USD100 billion by 2016-17 from

USD67 billion in 2013-14.

Total fabric production in India is expected to grow to 112 billion square metres

by 2016-17 from 64 billion square metres in 2013-14.India’s fibre production is

expected to reach an estimated 10 million tonnes in 2016-17 compared to 7

million tonnes in 2013-14.

Indian textile industry accounts for about 24% of the world’s spindle capacity

and 8% of global rotor capacity. India has the highest loom capacity (including

hand looms) with 63% of the world’s market share. India accounts for about

14% of the world’s production of textile fibers and yarns. India’s manufacturing

spans the entire value chain-from fiber to finished goods. Indian handicrafts and

handlooms provide unparalleled design and product diversity.

The fundamental strength of the textile industry in India is its strong production

base of wide range of fiber/yarns from natural fibers like cotton, jute, silk and

wool to synthetic/man-made fibers like polyester, viscose, nylon and acrylic.India

is largest producer of Jute, 2ndlargest producer of Silk and Cotton.

India enjoys a comparative advantage in terms of skilled manpower available at

reasonable wages. Increased penetration of organized retail and favourable

demographics are driving textile demand. Changing lifestyle and increasing

demand for quality products is set to fuel demand for apparel.

Total Produce of Indian Textile Industry in Fabric Sector

0

5000

10000

15000

20000

25000

30000

35000

40000

45000

50000

55000

2002-2003 2003-2004 2004-2005 2005-2006 2006-2007


Increasing disposable income of Indian consumer along with brand awareness is

expected to lead branded segment of apparel market to grow in double digits in

foreseeable future. Indian retail market with 1.2 billion consumer base is one of

the most attractive destinations for all global brands and retailer today.

Indian Government has introduced favourable policies to support the industry

including-promotion of textile parks, processing parks, apparel parks, interest

subvention under TUFS, skill development. Special central and state government

incentives are available to technical textile sector investment in order to promote

this sector. With a high expected market growth rate, technical textile sector

offers immense opportunity to investors.

India domestic consumption and exports are both are on a high growth

trajectory. At this point in time, investment in large scale, efficient garment

factories is a good proposition for investors.

With manufacturing costs rising in China and its internal demand also growing,

China is vacating space in international trade. India is the only credible alternative

sourcing base and hence there is an expansion in export market for Indian goods.

Foreign investors in India

Hugo Boss, Germany Liz Claiborne, USA

Marzotta, Italy Marks & Spencer, UK

JC Penny, USA Gap, USA

Rieter, Switzerland Trutzschler, Germany

Soktas, Turkey Zambiati, Italy

Bilsar, Turkey Monti, Italy

CMT, Mauritius E-land, South Korea

Skaps, USA Ahlstorm, USA

Terram, UK Strata Geosystems, USA

Nissinbo, Japan Marubeni, Japan

Benetton, Italy Esprit, USA

Benetton, Italy Levi’s, USA

Zara, Spain Mango, Spain

Jockey, USA Levi Strauss, USA

100% FDI is allowed under the automatic route in textile sector subject to all the

applicable regulations and laws.


Marble, Ceramics & Sanitary Products and Glassware Sector

Turkey

Marble

Ceramics & Sanitary Products

Turkey is one of the world’s oldest and biggest producers of marble.The natural

stone has been produced in Anatolia for 4,000 years with mining having started

on Marmara Island, from which it is believed marble (mermerininTurkish) got its

name.

The nation has the world’s largest marble reserves with 13.9 billion tons (5.2

billion cubic meters),controlling one-third of global reserves. In 2009, some 2.715

million cubic meters of marble and 15.322 million tons of other naturalstones

were mined in Turkey, the 7thbiggest producer and 8thlargest exporter of

thenatural stone in the world.

As per a report by General Directorateof Mining,Turkey’s exports of marble and

other natural stones (travertine, granite, limestone, dolomite, esiteand onyx)

stood at 6,640,908 tons worth USD1.568 billion in 2010, up 28.3% from

USD1.222billion in 2009, accounting for 42.9% of the country’s mineral and ore

exports.

More than 1,500 marble quarries, 1,500 marble processing plants and 7,500

workshops exist inthe country, employing 250,000 persons.

The ceramics industry is one of Turkey’s most competitive sectors. The industry

expanded its output three-fold during the 1990s and the early 2000s, as a result

of investments in technology, research and development and gigantic increases

in capacity. Turkey today is the world’s 6thbiggest producer of ceramic tiles and

the 3rdin terms of exports.

The nation is also Europe’s biggest producer of sanitary ware. Turkey produces

floor and wall tiles, porcelain, and ceramic bathroom sinks, water closets,

bathtubs, bidets and accessories. One-third of Turkish production is exported.

According to the Turkish Statistical Institute (TUIK), Turkish ceramic exports to

talled USD644,706 million in 2010, a 21.7% increase from 2009. Turkish ceramic

tile exports go to 113 countries, while its sanitary ware products are sold in 95

nations.


Inheriting a rich tradition, Turkish ceramic producers have combined the

multicultural and multi-coloured historical riches of Anatolia with modern designs.

The Turkish ceramics industry employs an estimated 220,000 people. Seven

producers Kale Group, Söðüt, Toprak, Seramiksan, Graniser, Eczacibaþi,

Yurtbayand Tamsa control about 60% of production capacity in ceramic tiles.

There are 26 large and mid-sizefirms producing ceramic tiles and 40 firms

manufacturing sanitary ware in Turkey.In sanitary ware, Eczacibaþi has the largest

production capacity in the world with 6.2 millionunits and, at the same time, the

largest capacity available under one roof. Another major globalproducer is

SerelSeramik. The nation’s produces around 17 million items annually, according

tothe Turkish Ceramics Federation, a trade group.The top seven companies

control 67% of productive capacity in the ceramics sanitary ware sub-sector.

As per Turkish Ceramics Federation report,by the end of 2010, Turkey had a

407.375 million-square meter ceramic tile production capacity,as a result of new

investments and capacity increases. A thriving housing and real estate market in

Turkey has driven enormous increases in production, particularly for wall and

floor coverings and sanitary ware.

The country’s biggest ceramics manufacturer is the Kaleseramik, which has an

annual 72 millionsquaremeter ceramic tile production capacity. Turkish production

in ceramic tiles in 2010 wasaround 260 million square meters while production in

sanitary ware was 230,000 tons.

“The language of stone surpasses the language of man”- Rabindranath Tagore,

Nobel Laureate

India is a treasure trove of stones, possessing a wide spectrum of dimensional

stones viz. granite, marble, sandstone, limestone, slate, quartzite etc. spread out

India

Exports of the Ceramic Industry 2008 - 2010

(In Million U.S. Dollars)

Ceramic Tiles 517,116 390,849 487,798

Ceramic Sanitary Ware 176,516 139,036 156,908

Total Ceramic Exports 693,632 529,885 644,706

2008 2009 2010

Source : Undersecretariat of Foreign Trade


all over the country. The nation is one of the largest producers of stones in the

world. The Indian stone industry has been growing steadily at an annual rate of

around 10% per year for the past few years.

The quality of deposits is outstanding and Indian stones are known for their

strength and vibrancy.Indian Stones conform to the highest International

Standards and provide excellent uniformity and consistency and have been used

in several well-known buildings all over the world.

India is also amongst the largest producer of raw stone material and the sector is

quite developed and vibrant in South as well as in Rajasthan and Gujarat, with a

dedicated resource of entrepreneurs. India also has an indigenous resource of

machinery & tool manufacturers, which cater well to the demands of this sector.

The Indian stone industry has evolved into the production and manufacturing of

blocks, flooring slabs, structural slabs, calibrated - ready to fix tiles, monuments,

tomb stones, sculptures, artefacts, cobbles, cubes, kerbs, pebbles and

landscape garden stones.

While being the 3rdlargest exporter of stones in the world, India is also amongst

the largest consumers of stones and stone products. With a well-established

distribution network within India, the Indian stone industry caters well to the

domestic demand and rising aspirations of the burgeoning middle class of India.

Dimensional Stone Exports From India (Million Rupees)

*estimates

Indian Stone Exports comprise mainly Granite Cut Blocks, Granite Slabs and Tiles, The Share of marble, state

and sandstone are steadily increasing for the past few years. The major importers of Indian stones are USA

Italy, Taiwan, Japan, Germany and China.

Capexil Description 2004-05 2005-05 2006-07 2007-08 2008-09 2009-10*

Granite and Products 27257.99 34904.91 47248.42 42874.85 48149.00 50508.00

Marble and Products 1766.00 1668.91 1784.73 2914.21 2293.40 1889.00

Slatestone 1931.25 2107.40 2350.41 2110.10 2072.05 2417.00

Other stones products 5505.63 6937.57 10640.45 12816.68 9776.56 8989.00

Grand Total 3641.20 45619.79 62024.01 60715.84 62291.01 63800.00

Export trends India is amongst the leading exporter countries of the world, bieng a close

copetitor to China and Italy who are the leader.


Marble Deposits in India

State Total (In million tons)

All India Total 2216

Rajasthan 1144

Jammu & Kashmir 405

Madhya Pradesh (estimated) 400

Gujarat 95

Chhattisgarh 83

Maharashtra 59

Haryana 22

Uttaranchal 6

Sikkim 2

Marble

Marble deposits are widespread in India with deposits of economic importance

being concentrated in the states of Rajasthan, Gujarat, Madhya Pradesh, Haryana

and Andhra Pradesh. Newer varieties are gradually being developed for economic

exploitation in the states of Bihar, Jammu & Kashmir, Maharashtra, Sikkim, Uttar

Pradesh and West Bengal.

Rajasthan is the main depository of marble with reserves spread over the

districts of Nagaur, Udaipur, Rajsamand, Banswara, Dungarpur, Jaipur, Sirohi,

Bhilwara, Ajmer, Bundi, Alwar and Pali. The main varieties in Rajasthan are Green,

Makrana Albeta White, Makrana Kumari White, Makrana Dungri White, Jhiri

Onyx, Phalodi Pink, Ambaji White, Indo-Italian, Babarmal Pink, Bhainslana Black,

Forest Green, Forest Brown, Agaria White, Morwar White etc.

Next to Rajasthan, Gujarat has vast reserves of marble in Banskantha, Bharuch,

Vadodara, Kachchh and Panchmahals districts. Of these, Ambaji area in

Banaskantha district and Chunchupura area in Vadodara district are the main

quarrying centres for marble. Deposits of marble in Andhra Pradesh are spread

over Guntur, Khammam, Cuddapah, Kurnool and Anantapur districts. Marble

rocks of Bhedaghat, Katni, Majholi near Jabalpur in Madhya Pradesh are the

latest discoveries.

Marble reserves in India were assessed by Indian Bureau of Mines in the year

2000. Subsequently, extensive deposits spread over 65 sq. km. area was

discovered in Madhya Pradesh and are now being actively exploited.


Granite

India is endowed with one of the best granite deposits in the world having

excellent varieties comprising over 200 shades. India accounts for over 20% of

the world resources in granite. Granite reserves in India have now been

estimated by Indian Bureau of Mines at over 42,916 million cubic metres.

Splendid black and multicolour varieties of granite are available in the states of

Karnataka, Andhra Pradesh, Tamil Nadu and Uttar Pradesh. Granite deposits are

also widespread over the provinces of Rajasthan, Bihar, West Bengal and Gujarat.

India is the largest exporter of granite and granite products in the world.

Granite Deposits in India

State Total (In million tons)

All India Total 42916

Karnataka 9740

Jharkhand 8847

Rajasthan 8479

Andhra Pradesh 2788

Orissa 2135

Maharashtra 878

Tamil Nadu 713

Assam 584

Uttar Pradesh 495

Gujarat 420

Meghalaya 286

Chhatisgarh 50

Haryana 34

West Bengal 33

Kerala 4

Ceramics & Sanitary Products

According to the Indian Council of Ceramic Tiles and SanitarywareIndian tile

industry, despite an overall slowdown of the economy, continues to grow at a

healthy 15% per annum. Investments in the last 5 years have aggregated over

Rs 5000 crores. The overall size of the Indian ceramic tile industry is


approximately Rs 18,000 crore (FY12). The production during 2011-12 stood at

approximately 600 million square meters. India ranks in the top 3 list of countries

in terms of tile production in the world.

Ceramic tiles as a product segment have grown to a sizeable chunk today at

approximately 680 millions square meters production per annum.The key drivers

for the ceramic tiles in India are the boom in housing sector coupled by

government policies fuelling strong growth in housing sector. The retail boom in

the Indian economy has also influenced the demand for higher end products.

The main product segments are the Wall tile, Floor tile, Vitrified tile and Industrial

tile segments. The market shares (in value terms) are 20%, 23% 50%, and 7%

respectively for Wall, Floor, Vitrified, and Industrial tiles. Both, traditional methods

of manufacturing (tunnel) and the latest single fast firing methods are deployed in

manufacturing. Some of the latest trends in manufacturing methods can be seen

in India.

The industry also enjoys the unique distinction of being highly indigenous with an

abundance of raw materials, technical skills, infrastructural facilities despite being

fairly capital intensive. A total of over 5,50,000 people are employed in the

sector. The potential is huge considering the per capita consumption of ceramic

tiles in India. Currently it is at 0.50 square meters per person in comparison to

over 2 square meters per person for like countries like China, Brazil and Malaysia.

Turkey, one of the world’s fastest growing tourism markets, is the 6th most

visited holiday destination in the world (2012), attracting more than 30 million

tourists each year. The Turkish tourism industry’s energetic and continuous

growth remains unhindered by the negative effects of the recent global

economic crisis, while retaining immense untapped potential.

The robustly growing industry is enriched by its wide variety of tourist

attractions, such as breathtaking coastlines along the Aegean and Mediterranean

seas with long sandy beaches and pristine bays. Construction is continuing on

hundreds of new luxury hotels and holiday villages along the Turquoisecoast, the

highly indented southwest corner of Anatolia, which will cement the

nation’splace in the big league of world tourism in the next five years. In addition

to the hotel and resort construction boom, drinking water and sewage systems

Tourism Sector

Turkey


arebeing overhauled, and new marinas and golf courses are being built to attract

rich foreign tourists to coastal areas, characterized by miles of long, unpolluted

beaches, ruins of magnificent cities of antiquity, and long warm summers and

mild winters. New hotels are also springing up in Istanbuland other big cities to

encourage convention and business tourism across Turkey.

According to a report by the Turkish Statistical Institute (TUÝK) the number of

tourists visiting Turkey swelled 21.7-fold in the past three decades, from

1.523million in 1979 to a record 33.027 million in 2010, including 28.632 million

foreign nationals and 4.395 million Turks living abroad but visiting the country.

Turkey’s tourism earnings also grew from a modest USD 280 million in 1979 to a

record USD 21.2 billion in 2009, according to the Ministry of Culture and Tourism.

In 2008, the country had a 3.34% share in the global tourism market share,

upfrom 2.7% in 2005.By 2023, the centennial of the republic, Turkey aims to

attract 60 million foreign tourists annually and earn USD60 billion a year from

tourism, according to the State Planning Organization (DPT).

In 2013 Travel & Tourism Competitive Index report by World Economic

Forum,Turkey averaged 4.44 out of 6.The Travel & Tourism Competitive Index

measures the investment attractiveness of the travel and tourism industry in a

country.Turkey improved both its air transport and tourism infrastructure from

2011 to 2013. Nine airports were built from 2003 to 2013, which increased the

total number of airports to more than 50.

Year Tourists (million) Revenues (billion dollars)

2004 17.6 15.9

2005 21.1 18.2

2006 19.8 16.9

2007 23.3 18.5

2008 26.3 21.9

2009 27.0 21.2

2010 28.6 20.8

Foreign Tourist Arivals in Turkey 2003-2009

France

Spain

Italy

Turkey

Brazil

Thailand

Serbia

Russia

Romania

Bulgaria

6

5.5

5

4.5

4

3.5

3

T&T Regulatory Framework

Business Environment and infrastructure

T&T Human, Cultural and Natural Resources

Source : World Economic Forum; The Travel and Tourism

Competitive Index Report

Note: Scores from 1-6


At the end of 2009, Turkey had 3,379 hotels and holiday villages with a total bed

capacity of840,241, according to the Association of Turkish Travel Agencies. This

is an enormous expansion since 1966, when the country had only 456 hotels

with a bed capacity of just under 40,000.As per Tourism Investors’ Association

investors are pouring USD 3 billion into the construction of 124 new hotels,

including 22 five-star and36 four-star facilities, across the country.

The contribution of the travel and tourism industry to Turkey’s GDP has a higher

growth forecast compared to that of Europe. From 2013 to 2023 average growth

is expected to remain around 3% for Turkey which higher than what is projected

for Europe in the same period (around 2%). The contribution of the industry to

employment is projected to increase from USD 2.1 billion to USD 2.5 billion,

which is a 17% increase from 2013 to 2023.

The Travel and Tourism Competitive Index, 2013


Some 255 foreign hotel operators have direct investments in Turkey, including

America’s Hilton, the Ritz Carlton Hotels and Resorts and the Sheraton, and

Canada’s Four Seasons Hotels andResorts, Germany’s Kempinski and Iberote,

the Marriottl and France’s Novotel Hotels and ClubMediterranean.

According to the World Travel and Tourism Council the nation has theopportunity

to develop alternatives including ecological tourism, incentive and convention

tourism,adventure travels, ski holidays, religious and culture tours, and there is

almost immeasurablepotential for growth and profit in the travel and tourism

industry in Turkey.

Travel & Tourism Employment, 2007-2023

Source : World Travel & Tourism Council

-6%

-3%

-1%

2%

5%

7%

10%

12%

15%

17%

20%

22%

20

07

20

08

20

09

201

0

201

1

201

2

201

3*

201

4*

201

5*

201

6*

201

7*

201

8*

201

9*

2020*

2021*

2022*

2023*

Contribution to GDP of Turkey

Contribution to GDP of Europe

Chan

ge

Source : World Travel & Tourism Council

Travel & Tourism Growth, 2007-2023

0

500

1,000

1,500

2,000

2,500

007

2 008

2 009

2012

001

12 012

201

*

23

2023

*

Contribution to Employment Growth

US

D B

illio

n

-10%

-5%

0%

5%

10%

15%

Gro

wth

17. 41 %


India

The direct contribution of travel and tourism to the Indian GDP in 2013 was Rs.

2,178.1 billion (USD 35.71 billion approx.) (2% of GDP); this is forecasted to rise

by 7.5% to Rs. 2,341.45 billion (USD 38.38 billion approx.) in 2014. Number of

domestic tourist visits in India during 2012 was 1,036.3 million (provisional) as

compared to 864.53 million in 2011, with a growth rate of 19.9%.

rdTourism is the 3 largest foreign exchange earner for India after gems and

jewellery and readymade garments. In 2013 foreign exchange earnings (FEE)

from tourism were USD18.13 billion as compared to USD17.74 billion in 2012,

registering a growth of 2.2%. Tourism is a big employment generator; every one

million invested in tourism creates 78 jobs. Foreign tourist arrivals during 2013

were 6.97 million with a growth of 5.9% as compared to 6.31 million during 2011.

India ranks 42nd in the United Nations World Tourism Organization (UNWTO)

rankings for foreign tourist arrivals. With a share of 1.56% in the world’s tourism

receipts, India occupies the 16th rank.

UNWTO has forecast that the travel and tourism industry in India will grow by

8% per annum, in real terms, between 2008 and 2016. Foreign exchange

earnings from tourism are likely to show annualized growth of 14% during the

same period.

Growing recognition of tourist’s contribution to employment and economic

growth, availability of better infrastructure, focused marketing and promotion

efforts, liberalization of air transport, growth of online travel portals, growing

intraregional cooperation and more effective PPPs are seen as key drivers for

tourism in the next decade.

More than half of the Ministry of Tourism, Govt.of India’s Plan budget is

channelized for funding the development of destinations, circuits, mage projects

as also for rural tourism infrastructure projects. The ministry also ensured that

10% and 2.5% of its total annualplan 2013-2014 outlay went to the tourism

projects in the north- eastern region and tribal areas, respectively. Recently, the

India government has also released a fresh category of visa referred to as

medical visa or ‘M’ visa; it is especially designed to encourage medical tourism

in India.

100% FDI is allowed under the automatic route in tourism and hospitality,

subject to applicable regulations and laws; 100% FDI allowed in tourism

construction projects including development of hotels, resorts and recreational

facilities.


Foreign Investors In India

Accor, France Four Seasons,Canada

Starwood, USA Thomas Cook, UK

Marriott ,USA Expedia , UK

Premier Travel Inn, UK Cox & Kings, UK

Mandarin Oriental, Hong Kong Jumeirah, UAE

The National Tourism Policy, 2002 has a vision to enhance employment potential

within the tourism sector as well as to foster economic integration through

developing linkages with other sectors; policy objectives include positioning

tourism sector as a major engine of economic growth, positioning India as a

global brand, acknowledging the Critical role of private sector and creating

integrated tourism circuits.

Construction and Real Estate Sector

Turkey

Housing Market

As per a report by the Turkish StatisticalInstitute (TÜÝK) Turkey’s construction

industry grew 17.5% in 2010 after slumping 16.3% in 2009. The industry has run

parallel to Turkey’s recovery from the global recession, during which the housing

market sharply declined, government spending on infrastructure projects,

ranging from urban transport and intercity motor ways to hydro electricdams and

sewerage systems, fell. The Real Estate Investment Trusts’ Association

(GYODER), a trade group, estimated that market size of the construction industry

was USD43.6 billion in 2010.

The sector grew 21.5% in 2005 and 19.4% in 2006, and 5.7% in 2007, after a flat

average annual2.4% growth from 1990 to 2004.The construction industry

accounted for 3.8% of Turkey’s GDP in2009, down from 5.3% in 2006. The

industry’s share in theeconomy is predicted to grow in the coming years.

Demand for public housing is continuing in Turkey’s urban centres, particularly

Istanbul, its largestcity, because of an influx of rural migrants displaced from the

countryside, rising income levels amongmetropolitan residents, a booming

young population and the availability of low-cost mortgages.The country’s

population is rising 1.6% a year, but in the cities of western and southern

Turkey,the population is growing 4% annually because of the migration from the

rural areas,according to Turkish Statistical Institute (TÜÝK).


GYODER in a report published in 2011 estimated that Turkey would need to build

3.4 million housing units by 2015. The requirement for housing loans will be

around USD80.103 billion a year in 2015, a more than two-fold increase from

2010, the report said. In 2000, housing loans stood at a mere USD961,654, the

Banks Association reported.

A surge is taking place in the construction of new office buildings and shopping

centres in citiesthroughout Turkey, where new American-style suburbs are

mushrooming.Turkey had 270 modern shopping centres as of March 2011 and

some 74 others were underconstruction, according to Jones Lang LaSalle, a

global real estate services group. Even oncesleepyeastern Anatolian cities, like

Elazi ð, Diyarbakir, Tatvan, Karabük, Kastamonu and Sivasnow have thriving

shopping malls.

Shopping Centres and Commercial Buildings

Shopping Centres in Turkey as of March 31, 2011

Istanbul Anatolia Total

96

28

124

174

46

220

270

74

344

Existing

Under Construction

Total*

* Total projected for and 2013

Source: Jones Lang Lasalle

2Rentable Space in Turkish Shopping Centers (M )

2009 2010 2011MARCH

UNDERCONSTRUCTION

END OF 2013 TOTAL

Istanbul 2.280.000 2.650.000 2.850.000 1.020.000 3.870.000

Source: Jones Lang Lasalle

Anadolu

Total

3.410.000

5.690.000

3.870.000

6.520.000

3.930.000

6.780.000

1.270.000

2.290.000

5.200.000

9.070.000

Some 6,780,000 square meters of rentable space was available at Turkish

shopping centres as of the end of March 2011, up from 4,858,280 million square

meters at the end of 2007. As per Jones Lang La Salle Turkey will have a total

344 shopping centres with available rentable space of 9,070,000 square meters

by the end of 2013.

All this isn’t strange in a country that introduced the concept of shopping centres

to the world. The 15th century Covered Bazaar is still the world’s biggest


emporium with more than 4,000shops on 58 streets in a labyrinthine structure of

connecting markets in central Ýstanbul, sellingmainly jewellery, furniture,

garments, leather wear, ceramics, carpets and other home textiles. As a result of

a building spree that began 22 years ago, Istanbul with its population

approaching14 million now has more modern shopping centres than in any other

European city.

Foreign developers, such as Coldwell Banker of Parsippany, New Jersey, and

Emaar of Dubai, haveen tered the construction market in Turkey. Coldwell Banker,

the biggest U.S. real estate company, in 2008 began to invest USD5 billion in

Turkishreal estate, including construction of studio apartment flats in Istanbul’s

Beylikdüzü district. Emaar, which has developed the USD700 million “Toskana

Valley” villas in Istanbul’s Büyükçek mecedistrict, acquired the Libadiye

Properties, on the Asian side of the city, from the Savings Deposits Insurance

Fund, a state banking receivership fund, in February 2008. It announced that it

would build new residential homes, business offices and a shopping centre at

the site near the Çamlica hilltop park. Emaar also said it was looking at investing

in housing projects in other fast growing Turkish cities.

The real estate sector is the 2ndlargestemployment-generating sector after

agriculture. Growing at a rate of about 20% per annum, this sector has been

contributing about 5-6% to India’s GDP. Not only does it generate ahigh level of

direct employment, but it also stimulates the demand in over 250

ancillaryindustries such as cement, steel, paint, brick, building materials,

consumer durables and so on.

The Indian real estate industry has been on a roller coaster ride since 2005.

Consequent to the Government’s policy to allow 100% Foreign Direct

Investment (FDI) under the‘automatic route’ in townships, housing, built-up

infrastructure and construction development projects, there was a boom

ininvestment and developmental activities. The sector not only witnessed the

entry of many new domestic realty players but also the arrival of many foreign

real estate investment companies including private equity funds, pension funds

and development companies who entered the sector lured by the high returns

on investments. The real estate sector has been riding through many highs and

lows since then. The industry achieved new heights during 2007 and early

2008,characterised by a growth in demand, substantial development and

increased foreign investments. However, by mid-2008, the effects of the global

economic slowdown were evident here as FDI inflow into real estate dropped

India


significantly and what had emerged as one of the most promising markets for

foreign investments experienced a down turn.

India has huge potential to attract large foreign investments into real estate. With

real estatereaching a point of saturation in developed countries and the demand

and prices falling, global real estate players are looking at emerging economies

such as India for tapping opportunities in real estate.

Indian real estate will stay attractive due to its strong economic fundamentals

and demographic factors. While developed economies are still struggling to

regain their growth momentum, developing countries including India and China

are expected to grow at a reasonably high rate. Investments in Indian real estate

will fetch higher returns for investors as compared to other global markets. In the

coming years, the opportunities in the real estate sector will attract more global

players to India and hence will help the industry to mature, become more

transparent, improve management and adopt advanced construction techniques.

Turkey has become one of the fastest growing energy markets in the world in

parallel to its economic growth registered over the last ten years. The

successfully implemented privatization program in the said period – power

distribution is now completely in private sector hands, while the privatization of

power generation assets is set to be completed within the next few years – has

given the country’s energy sector a highly competitive structure and new

horizons for growth.

Turkey’s production of primary energy supplies increased in 2009 to 30.125

million tons oilequivalent from 23.7 million tons in 2003, as a crash program in

production of hard and lignitecoal, natural gas, crude oil, wind and geothermal

electricity and solar energy was underway.The country’s energy exports, mainly

refined oil products and electricity, rose to USD 4.511 billion in 2010from USD

3.902 billion in 2009. Turkey exported a record USD 7.532 billion in energy

products in 2008.

Energy and Renewable Sector

Turkey


Economic expansion, rising per capita income, positive demographic trends and

the rapid pace of urbanization are the main drivers of the energy demand,

estimated to increase around 7% per annum until 2023.

Hydro 33%

Lignite 19%

Hardcoal 8%

Gas 29%

Fueloil 3%Nuclear 5%

Wind 3%

Source : Ministry of Energy and Natural Resources

Installed Capacity By Resources, 2020 (MW)

0

100

200

300

400

500

600

2010 2015 2020 2010 2015 2020

Low Low Low High High High

180

224

248

299

338

406199

245

362

302

414

491

776046675145

Source : State Planning Organization (SPO)

Thermal

Hydro

Demand

Electricity Production and Demand, 2020

The Turkish electricity market is one of the fastest growing in the world, with an

average of approx. 9%annual growth in 2010 and 2011.Turkey will need a large

infusion of foreign capital to double its generating capacity to 96,348MW by the

year 2020.As of December 9, 2010, Turkey’s total installed power production


capacity reached an estimated48,435.7 MW, according to the Ministry of Energy

and Natural Resources.

The government is exploring alternatives for adding significant amounts of

capacity in order to meet the probable shortage of supply in the medium term.

Considering the projects under construction, an additional capacity requirement

of about 52,000 MW will be needed. State Planning Organization economists

calculate that this will require a total investment amount of USD 84 billion.

Investment requirement would be USD 20 billion during 2011-15 and USD 51

billion during 2016-20. Deloitte breaks down the financing needed by 2015 for an

additional capacity generation of 23,981 MW as USD 31.9 billion. To meet the

shortfall, the government is seeking private investors to build and operate new

hydro electric dams, thermal energy power plants and rehabilitate existing ones.

More than USD 2.3 billion of electricity generation investments were realized

between 2004 and 2012.The countries that invested the most were the USA,

Canada, Japan and various European countries.

Natural gas consumption in Turkey reached approx. 46 billion cubic meters in

2012 demonstrating an increase of 4.7%compared to the previous year. Natural

gas demand is expected to grow by 2.9% annually until 2020according to the

Ministry of Energy and Resources. The state Petroleum Pipeline

Corporation(BOTAÞ) estimated that gas consumption will be 53 billion cubic

meters in 2015 and 61 billion cubic in 2020.Distribution sales of gasoline, diesel

oil and fuel oil products increased by 3.8%, which corresponds to18.2 million

tons in 2012. Crude oil importsincreased by 7% and reached 19.5 million tons

in2012.Import is the most critical component in the value chain as Turkey’s natural

2000

1000

0

3000

4000

5000

USD Million

2008 2009 2010 2011 2012

Total FDI Inflows for the Electricity and Gas Sector

Source : YASED


gas production is very limited. There are ample opportunities for investment in

the import market.

One of the latest steps the Turkish government has taken towards a more

competitive energy sector, the establishment of an energy stock exchange, is in

its final stage of planning. The energy stock exchange will not only enhance the

liberalization of the market but will also ensure transparency and help maintain a

healthy balance between supply and demand once it has become operational in

2014.

In addition to having a huge domestic market, Turkey is strategically located

between major energy consumers and suppliers, thus serving as a regional

energy hub. Having a position central to the regions of Europe, the Balkans, the

Aegean, the Black Sea, the Caucasus-Caspian Basin and Central Asia, Turkey is a

natural transit country for maritime and pipeline transportation of gas and oil.

The existing and planned oil/gas pipelines, the critical Turkish straits and

promising finds of hydrocarbon reserves in the country itself give Turkey

increased leverage over energy prices and reinforce its gateway status.

The renewable forms of energy -hydro, wind, solar, geothermal and others - are

abundant in Turkey and encouraging policies backed by favourable feed-in tariffs

are expected to increase their share in the national grid in the coming years.

Renewables including waste, geothermal and wind accounted for only 5% of the

installed capacity in 2012, wing energy being the highest with 2,261 MW.

Renewable Energy

Turkey's Installed Capacity Including the Share of Renewables, 2012

88%

6%6%

36%

34%

14%

9% 2%5%

Hydro

Fuel Oil

RenewablesLignite

Natural GasHard Coal

Waste

Geothermal

Wind

HydroNatural

Gas*

Hard Coal**(Local &

Imported)Lignite Fuel Oil Wind Geothermal

Other Renewables

Total

19,609 20,439 5,058 8,143 1,227 2,261 162 159 57,058

34.37% 35.82% 8.87% 14.27% 2.15% 3.96% 0.28% 0.28% 100%Share

*Including dual fuel plants

**Including local and imported coal plants & asphaltite plants

Installed

Capacity

(MW)


Major steps are being taken in various renewable energy fields in Turkey,

including wind, solar, hydro, geothermal, and nuclear and hydrogen energy for

electricity and for space and water heating, as viable environmentally friendly

alternatives to fossil fuels, which cause no pollution and produce no greenhouse

gasses.

The Turkish government has made it a priority to increase the share of renewable

sources in the country's total installed power to a remarkable 30 percent by

2023, while taking the energy efficiency concept to realization by enacting laws

that set principles for saving energy, both at the individual and corporate levels.

As of December 31, 2010, Turkey ranked 17thin the world and 11thin Europe in

wind energy production capacity, according to the World Wind Energy

Association.By 2013, Turkey will have a power generating capacity of 2,163 MW

from wind energy, meeting 4.1% of Turkey's total energy demand from wind

power, according to the State Planning Organization.

Turkey intends to increase its wind energy capacity 16-fold to 20,000 MW by

2020 from 1,265.5 MW in 2010, Turkey's Wind Power and Hydropower Plants

Businessmen's Association reported.

A half a dozen foreign companies are selling wind energy technology to Turkey,

including General Electric, Venisys (Costa Rica), Furlander, Conergy, Nordex and

Enercom of Germany and Vestas of Denmark. Turkey's Demirer Group, which

constructed the country's first two wind farms in Alaçati, near the resort town of

Çesme in western Turkey, and in the Aegean island of Bozcada, says it plans to

invest in wind blades in Turkey, possibly with European partners.

According to the Izmir-based Aegean Technology Association Turkey could install

40,000 MW of renewable energy power generating capacity by 2023, including

30,000 MWs of wind farms. This would represent 40% of all generating capacity

to be added to the Turkish power grid in the next 15 years.

With an average 2,640 hours of sunny weather throughout the year, or 7.2 hours

a day, “Turkey is luckier than many countries because of its location and its

higher potential for solar energy,” the state Electricity Affairs Research

Administration (EÝEÝ) reported.

Wind Energy

Solar Energy


Turkey has been increasing its solar energy output every year since 1998. In

2009, it produced 429 tons oil equivalent of solar energy, an increase of 12%

from 2004 and 110% more than in 1998. Solar energy panels (collectors) are

widely used in the Aegean and Mediterranean regions of Turkey, which have the

most sunshine in the country.

Geothermal Energy

Turkey has the richest geothermal resources in Europe and 7thbiggest in the

world, with the “theoretical potential” for 31,000 MW of electricity generation

capacity a year, according to the state Mineral Technical Exploration Agency

(MTA).

Turkey has 1,000 known geothermal wells and mineral springs. Of these 184

have temperatures of over 104 degrees Fahrenheit. Some 13 have temperatures

averaging anywhere between 266 degrees Fahrenheit and 467.6 degrees

Fahrenheit and are suitable for electricity production, the EÝEÝ reported.

Currently, geothermal energy is harnessed in producing electricity in Kizildere,

Denizli (20 MWe) and Salavatli, Aydin (7.9 MWe). The Energy Market regulatory

Agency issued production licenses for another 5.5 MW geothermal plant in

Kizildere and a 7.5 MW plant in Tuzla, Çanakkale. A 10 MW geothermal plant in a

project phase in Simav, Afyon, in western Anatolia is also in the pipeline.

Turkish Solar Energy Output in Tons Oil Equivalent (TOE)

Year Amount

1998 200

1999 236

2000 262

2001 290

2004 375

2008 420

2009 429

Source : EIEI


Major joint ventures with domestic companies to invest in renewable

energy projects in Turkey:

• France’s Perfect Wind Co. is building Turkey’s biggest wind farm in

Kirþehir province in central Turkey. The 150 MW wind farm will cost Euro

210 million. Perfect Wind Co. is planning Euro 550 million investments in

wind energy projects in Turkey totaling 400 MW by 2011.

• In 2007, Izmir-based ALKE Construction and German SSC Montage

formed a joint venture, AESSC Ltd., which installs wind farms throughout

Turkey and Europe.

• Model Enerji announced it will begin producing wind tower and wind

blades in 2009 under a license from American Superconductor Corp. A

separate factory producing wind turbines is being constructed in

Adapazari, in northwest Anatolia Nett Enerji Elektrik Üretim A.Þ. is

establishing the factory.

• France’s Areva is investing Euro 66 million to produce power transformers

in a plant in Gebze, 40 km east of Ýstanbul.

• The Turkish company Tunçmatik and Japan’s Kyocera announced that they

will co-produce solar energy systems for homes.

• Italy’s Saif Enerji Kaynaklari A.Þ. has begun production of organic fuels

from waste edible oils in a plant in Mersin’s Organized Industrial Zone.

• Norway’s Statkraft acquired 95% of Turkish energy company YeþilEnerji

from Global Investment Holding of Istanbul for an undisclosed sum.

YeþilEnerji owns the majority shares of seven hydroelectric dams with a

total 630MW capacity.

• Turkey’s Saran Group and Spain’s Fersa Group signed an agreement in

Ankara on November 13, 2009, to invest USD 1 billion in renewable

energy projects in the eastern and southern Turkey.

• Turkey’s Borusan Group and Germany’s EnBW AG in April 2009 formed a

partnership to invest in Euro 2.5 billion in energy projects in Turkey.

All these developments provide opportunities for international companies to

cooperate and develop energy technology in Turkey.The total amount of

investments required to meet the energy demand in Turkey by 2023 is estimated

to be around USD 120 billion, more than double the total amount invested in the

last decade. Turkey’s ambitious vision for 2023, the centennial foundation of the

Republic, envisages grandiose targets for the energy sector in Turkey.


Energy Sector in India

India is one of the fastest growing economies in the world, with current

electricity generation capacity of about 230 GW to meet the needs of over 1.25

billion population. India's per capita annual consumption of energy at

approximately 600 kWh is one of the lowest in the world, even when compared

to developing countries like Brazil and China. This is a decade where India needs

a clean energy revolution for transforming the electricity infrastructure to provide

energy access to over 400 million of households that still lack basic access to

electricity.

At the same time, India currently boasts a middle class population exceeding 300

million (almost the size of USA) that is looking for the same level of energy

access and power quality that is taken for granted in developed countries

through movement towards green cities and sustainable living.

The newly elected government in India has taken number of steps in past couple

of months to fast track development of the energy infrastructure and set

aggressive targets for continued renewable energy deployments in India.

Policy makers have taken some key initiatives that can drive grown of storage

and microgrids:

• India is looking for rapid adoption of clean energy technologies with

anticipated addition of 30-50 GW of new wind capacity and 20-30 GW of

solar capacity by 2020.

Investment Needs of the Turkish Energy Sector, 2005-2020

Sector Investment, $ Mn

Coal exploration 5,109

Oil 16,000

Natural resources 2,700

Water (DSI) 6,093

Generation (EUA$) 458

New Generation facilities 91,276

Transmission 938

Distribution 6,000

Total 128,574

Source: Ministry of Energy (MENR)


• India has various initiatives for providing energy access where

government of India provides up to 90% of the capital funding for

building microgrids in rural areas with no access to electricity.

• Telecom Regulatory Authority of India has mandated use of renewable

power for telecom towers in India that are currently utilizing diesel power

as primary source of energy.

These policy initiatives have resulted in tremendous opportunities for integration

of energy storage technologies for variety of applications. Advanced energy

storage market in India is in its infancy however it carries significant market

potential. A recent market assessment by India Energy Storage Alliance

suggests a potential of 15-20 GW by 2020 in India.

India has also recently launched a National Mission on Electric Mobility with a

target of 6 million electric vehicles (4 million two-wheelers and 2 million four-

wheelers) by 2020. For efficient roll out of the EV program, electrical distribution

infrastructure upgrades and smarter systems are required which will control or

limit simultaneous charging of hundreds of EVs from the same feeder.

The oil and gas industry is amongst the six core industries in India. India was the

4thlargest consumer of crude oil and petroleum products in the world in 2013,

after the United States, China, and Japan. India held nearly 800 MMT of proved

oil reserves at the beginning of 2014, mostly in the western part of the country.

About 44% of reserves are onshore resources, while 56% are offshore. India is

heavily dependent on imports to meet its energy needs. Hence, oil imports

constitute 80% of India’s total domestic oil consumption (May 2014). Oil and gas

contribute 39.2% to the primary energy consumption.

During 2013-14, natural gas constituted about 7.8% of the energy mix. India had

47 Tcf of proved natural gas reserves at the beginning of2014. About 34% of

total reserves are located onshore, while 66% are off shore. The country’s

natural gas pipeline network to talled over 15,340 km in 2013, and it is proposed

to expand the network to 30,000 km by 2018-19.

Investments worth USD 70 billion are envisaged across the oil and gas value

chain under the 12th Plan (2012–17).At the same time, India was the 4thlargest

LNG importer in 2013 and accounted for 5.5% of global imports. India’s crude oil

pipeline network spans over 9460 km and has a total capacity of 129.4 MMTPA.

Oil and Gas



British Petroleum, UK Cairn Energy India

Shell, UK BG Group, Scotland

Niko Resources, Canada

In the International Energy Outlook 2013, India and China are projected by EIA to

account for about half of global energy demand growth through 2040, with

India’s energy demand growing at 3% per year.

• Shale gas has transformed the landscape of the energy industry in the

US with the country becoming a net exporter of natural gas. India has

nearly 96 Tcf of technically recoverable shale gas resources.

• Underground coal gasification represents another interesting area of

opportunity in the oil and gas sector. Coal gasification has been notified

as one of the end uses under the government’s captive mining policy.

• Opportunities for E&P services and equipment companies: 48% of the

country’s sedimentary area is yet to be appraised.

• City Gas & Distribution sector offers opportunities for both incumbents

and new companies.

• Opportunities for pipeline transportations as Compared to advanced

economies like the US, where more than 60% of petroleum product

movements happen by pipeline, in India, currently, only 35% of product

movement happens over pipelines.

• In the Refining sector expansions are planned for tapping foreign

investment in export-oriented infrastructure, including product pipelines

and export terminals.

• Opportunities for foreign investments and technology partnerships in the

upstream sector are plenty since securing supplies is expected to remain

on top of India’s energy agenda for the foreseeable future. While a lot of

exploration activity has taken place in the on-land and shallow basins of

the country, deep water and ultra-deep water oil and gas resources hold

the key to substantially increasing domestic production. This provides

opportunities for strategic investors having technical expertise and

financial muscle.

Investment opportunities


Renewable Energy

India is endowed with vast potential for solar energy and is fast developing as a

major manufacturing hub for solar power plants. India’s installed solar capacity

increased to 1,686 MW at the end of FY 13 from barely 2647 MW in FY 13-

14.Besides, it is expected that the annual PV-installed capacity will grow at a

CAGR of around 49.5% during 2010–14 to reach 1,500 MW by the end of 2014.

Wind accounts for nearly 70% (21.1 GW) of installed capacity, thereby making

India the world’s 5thlargest wind energy producer.The Government of India has

set a renewable energy capacity addition target of 30.0 GW for the 12th Five-

Year Plan to take the total renewable capacity to almost 55GW by the end of FY

17.This includes 15 GW from wind, 10 GW from solar, 2.9 GW from biomass and

2.1 GW from small hydro.Small hydro has installed capacity of 3.8 GW as against

estimated potential of 19.7 GW. Bio-power (including biomass and bagasse

cogeneration) has an installed capacity of 4.1 GW against estimated potential of

22.5 GW. Solar power (billion GWh) has installed capacity of 1.7 GW against 6

GW.

India has the 5th largest power generation portfolio worldwide with a generation

capacity of 245 GW. This growth can be attributed to several factors such as

economic growth and increasing prosperity; growing rate of urbanization; rising

per capita energy consumption; widening access to energy in the country.

Current renewable energy contribution stands at 31.70 GW out of the total

installed capacity of 245 GW in the country as on March 2014.

Projects such as the Jawaharlal Nehru National Solar Mission (aims to generate

20,000 MW of solar power by 2022) are creating a positive environment among

investors keen to tap into India’s potential. The country offers unlimited growth

potential for the solar photovoltaic (PV) industry.

Wind Energy Production Capacity by Countries in 2010

(In Mw)

Country MW Production Capacity

1 China 42.227

2 United States 40,100

3 Germany 27,214

4 Spain 20,676

5 India 13,065


India ranks as the 4thlargest importer of oil and the 6thlargest importer of

petroleum products and LNG globally. The increased use of indigenous

renewable resources is expected to reduce India’s dependence on expensive

imported fossil fuels. The government is playing an active role in promoting the

adoption of renewable energy resources by offering various incentives, such as

generation-based incentives (GBIs), capital & interest subsidies, viability gap

funding, concessional finance, fiscal incentives, as well as through the

instruments like Renewable Purchase Obligation/Renewable Energy Certificates,

bundling of conventional power with solar power, etc.

• Investment in RE sector in 2013 in India was around USD 6 billion.

• Achieving 12thFive Year Plan (2012-17) targets requires investment ofUSD

50 billion.

• Of total investment institutional finance requirement is ofUSD 35 bill.

• As of March 2013, share of PSBs in RE finance - 5 % of lending to power

sector.

• Indian Renewable Energy Development Agency (IREDA) has USD 1.4

billion LOCs over 2014-17 from ADB, JICA, AFD, KfW, EIB etc.

• Around USD 2 billion low cost finance to be made available from National

Clean Energy Fund (NCEF), over 2013-17 for co-financing to

Banks/Financing Institutions.

• The recently notified Solar Policy, 2011, of Rajasthan envisages of setting

solar manufacturing facilities in the proposed solar parks.

• Gujarat solar park also makes special provisions for encouraging on-site

manufacturing facilities to provide equipment to projects coming up

within the park, as well as adequate repairs and maintenance, as well as

skilled manpower to service projects within the park.

FDI up to 100% under the automatic route is permitted in renewable energy

generation and distribution projects subject to provisions of Electricity Act, 2003.

Up to 100% FDI is allowed under the automatic route for:

üExploration activities of oil and natural gas fields

Investment opportunities


üInfrastructure related to marketing of petroleum products and natural gas

üMarketing of natural gas and petroleum products

üPetroleum product pipelines

üNatural gas/pipelines

üLNG regasification infrastructure

üMarket study and formulation

üPetroleum refining in the private sector

üFDI is subject to the existing sectoral policy and regulatory framework in

the oil marketing sector and the policy of the government on private

participation in exploration of oil and the discovered fields of national oil

companies.

Up to 49% FDI is allowed under the automatic route into petroleum refining by

public sector undertakings (PSUs), without any disinvestment or dilution of

domestic equity in the existing PSUs. It means a public sector company has to

incorporate a new JV for setting up refinery business.

Turkey’s mining sector has grown in parallel with the country’s robust economy.

The sector’s total production value soared to USD 12 billion in 2012, up from

USD 2.6 billion in 2003.Although Turkey ranks 10thin the world in terms of

mineral wealth, it stands in 28thplace in theworld mineral production.Turkey is

richly endowed in mineral resources, but the importance ofmining in the

country’s economic life has steadily declined since the 1940s, when it

accountedfor 40% of the GDP. In 2008, it accounted for only 1.37% of the GDP.

The Turkish government is attempting to revive mining, by encouragingprivate

and foreign investment.

The nation has privatized or leased out most of the mines and mineral

processing plants owned by EtiMaden, including chromate mines in Elazið, in

eastern Turkey, and Muðla, on the Aegean Coastand a modern ferrochromium

complex in the Mediterranean resort city of Antalya. It also sold itsinterests in an

aluminium complex in Seydiþehir, central Turkey.

Mining Sector

Turkey


Some 710 known chromite deposits exist in Turkey. The nation also has Boron

reserves, a chemical element, used in the metal industries. Boron compounds

are also used in the manufacture of glass, detergent, ceramics, paper, plastics

and leather. Some Turkish researcher sare experimenting with boron compounds

to produce zero emission hydrogen energy, the energy of the 21stcentury which

will eventually replace fossil fuels.

The country also has large reserves of iron ore, bauxite, meerschaum, wolfram,

manganese, mercury, zinc, magnetite, perlite, cinnabar and emery. Excluding oil

and coal resources, the country has about 4,400 mineral deposits. Some 53

different kinds of minerals and rocks are commercially mined in Turkey. The nation

exports mainly boron minerals, natural stone (marble, travertine, granite),

magnetite, chromium ores and concentrates, copper and concentrates, feldspar,

zinc ores, pumice stone, kaolin, barite, and other clays and perlite.

In 2010, Turkey’s total mineral and metal exports stood at USD3.608 billion,

accounting for 3.2% of the nation’s total foreign sales, according to the Turkish

Exporters’ Assembly (TÝM). The biggest importers of Turkish mineral and metals

are the United States, Italy, Japan, Austria, China, Germany, Belgium, England,

Holland, Spain, Norway, France, Russia, South Korea and Ukraine.

With its location in the Tethyan-Eurasian Metallogenic Belt, one specific kind of

ophiolite extending from the western Mediterranean via the Alps to South-

Eastern Europe through Turkey, the Lesser Caucasus, Iran, and the Himalayas to

China, Turkey harbors much proven potential for mining investors. As the least

explored portion of the belt, Turkey stands out as a very promising region for

miners and explorers. In addition, as mining in Turkey has been limited to surface

excavations, huge potential with deep drilling is awaiting international investors.

India produces 88 minerals (4 fuel, 10 metallic, 50 non-metallic and 24 minor

minerals). In 2012-13, number of operating mines (excluding minor minerals,

petroleum (crude), natural gas and atomic minerals) in India was 3108. India’s

mineral output in 2011-12 was around USD 13.4 billion.

India is slated to become the 2ndlargest steel producer by 2015. Crude steel

production increased at a CAGR of 8.2 per cent over 2008–11 to 70.67 million

metric tonnes. India has vast mineral potential, mining lease granted for a long

duration of minimum 20 years and up to 30 years. The demand for various metals

and minerals will grow substantially over the next 15 years. Power and cement

industries also aiding growth in the metals and mining sector.

India


India’s strategic location enables convenient exports. India’s per capita steel

consumption is much lower than global average.India has the world’s 6thlargest

reserve base of bauxite and 5thlargest base of iron ore respectively, and

accounts for about 5% and 8% respectively, of total world production.

With the Indian economy expected to grow by approximately 7% in the years to

come, the sectors like infrastructure and automobile will receive a renewed

thrust, which would further generate demand for power & steel in the country.

This is expected to provide a major thrust to the demand of minerals like coal &

iron ore.

Minerals like manganese, lead, copper and alumina are expected to witness

significant growths in the years ahead. There is significant scope for new mining

capacities in iron ore, bauxite, and coal. India holds a fair advantage in cost of

production and conversion costs in steel and alumina. Sustained growth in India’s

automotive sector has been driving demand for steel and aluminium.

The power sector accounts for a large share of the consumption of aluminium

and coal in the country. Infrastructure projects continue to provide lucrative

business opportunities for steel, zinc and aluminium producers. Iron and steel

being a core component of the real estate sector, demand for these metals is

set to continue given strong growth expectations for the residential and

commercial building industry.

India has 301.564 billion tonnes of coal resources as on April2014. Production of

coal stood at 540 million tonnes and 557.7 million tonnes in FY12 and FY13,

respectively. India ranks 4thglobally in terms of iron ore production. In FY13, the

country produced 136.02 million tonnes of iron ore.

FDI up to 100% is allowed in exploration, mining, mineral processing and

metallurgy under the automatic route for all non-fuel and non-atomic minerals

including diamonds and precious stones.

Mining and mineral separation of titanium bearing minerals and ores, its value

addition and integrated activities is under the government route.FDI in coal

mining is allowed for captive consumption only.


Rio Tinto, Australia BHP Billiton, Australia

Indian Resources Limited, Australia Vedanta Resources, UK

Australian Indian Resources, Australia JFE Steel Corp, Japan

NSL Consolidated, Australia China Steel Corporation,

Kolar Gold, Guernsey


Healthcare Sector

Turkey

With a CAGR of 3.35% between 2008 and 2012,Turkey stands just below high

income countries and the world average. However, according to Economic

Intelligence Unit (EIU) forecasts, the health care sector in Turkey is set to boom

by a CAGR of 5.6% between 2013 and 2017, while most developed countries will

be experiencing relatively lower growth rates. Turkey is also expected to surpass

the forecasted world average with this growth rate.

Although per capita healthcare expenditure has increased four-fold since 2002,

health indicators show that there is much room for growth in Turkey. Public

health expenditures, totalledUSD38billion in 2009, representing 6.2% of GDP,

compared to 8-18% for the European Union (EU), the Economic Intelligence Unit

reported. About one-third of health spendingis related to drug expenditures. Total

annual healthcare spending in Turkey, according to Deloitte Turkey’s forecast, will

reach USD63 billion by 2014.

The private sector, taking a 26% share in total health expenditure compared to

an averageof38% in OECD countries, still has room for growth. A substantial

portion of healthcare services is provided by the public sector. As of May 2011,

The Ministry of Health operated 842 of Turkey’s1,439 hospitals with 120,535 of

200,678 total beds. Turkey has a generous incentive system for health

investments. Hospitals can import all required machinery and equipment listed

on their incentive certificate free of customs duty and related charges and can

make deferred payments on value-added tax. The private sector began to take

advantage of the incentive system in recent years. Supported by the increasing

Medical Hospitals and Bed Capacities in Turkey in 2011*

Organization Number of Hospitals Number of Beds

Ministry of Health 842 120,535

Private 490 28,147

Universities 62 35,001

Ministry of Defense 42 15,900

Municipalities 3 1,095

Total 1,439 200,678

* As of May 30

Source: Istanbul Health Admistrators' Assication, Ministry of Health, TUIK


demand for private healthcare services, the number of private hospitals

increased from 1993 onwards, rising from141 in 1995 to 365 in 2007 and 490 in

spring 2011. The private sector operates 34.1% of Turkey’s hospitals and accounts

for 14% of its beds.

In the past decade, investment in healthcare in Turkey has averaged around

USD5 billion a year, with around 75 percent carried out by the private sector,

Istanbul Health Administrators’ Association, reported. Several healthcare groups

own multiple hospitals around Turkey. As of the end of 2010, some 66 of Turkey’s

81 provinces had private hospitals. Some 76% of the private hospitals and 80%

of the beds of private health care institutions were concentrated in 20 provinces,

led by Istanbul.

The medical equipment market has gained the status of an industry in the last

two decades, in line with the increased investment in total health facilities, and

the trend towards privatization. The market grew an estimated 12-14% annually

in recent years, and reaching around USD 2.1 billion in2010. It is expected to

reach USD 3.12 billion by 2015. The growth has been mainly fuelled by the

increase in imports rather than production.

Turkey was able to attract an impressive level of FDI for its health and social work

sector. FDI inflows to the industry increased at a CAGR of39% from 2008 to

2012, reaching USD 545 million in 2012.

Numerous foreign companies and private equity funds have acquired interests in

private Turkish healthcare concerns since 2004.In 2006, Citibank Venture Capital

Ltd bought Biopharma Pharmaceuticals Company for USD200million. Bermuda-

based Eastpharma Holding purchased a 96% stake in pharmaceuticals

manufacturer SabaÝlaç Sanayiive Ticaret A.Þ. for USD10 million.

In 2007 and 2008, Abraaj Limited of the United Arab Emirates acquired a total

57.86% stake in Acibadem Healthcare Services for USD605.3 million; the Global

Environment Fund of the U.S. purchased dental care company Dent Istanbul for

an undisclosed amount; Greece’s Hygeia purchased50% of the private Þafak

Hospitals for USD48 million. In 2009, the U.S. Carlyle Group acquired a40%

stake in Medical Park Hospitals for USD100 million. In 2010, Luxembourg-based

Swan Holding bought a 30% stake in Dunya Göz Hastanesi for an undisclosed

sum and United Kingdom-based Argus Capital Partners and the Qatar

Investment Authority purchased a 40% interest in the Memorial Health Group for

USD120 million.


Major multinationals with manufacturing facilities in medical equipment sector

include GE Healthcare and Siemens. In June 2009, GE Healthcare Turkey said it

would invest in a new plant in Ankara. Siemens openeda new production site in

Gebze, 40 km east of Istanbul with a USD76 million investment. The Turkish

government is encouraging foreign companies to invest in this field. Germany’s

MAQUET, for instance, produces sophisticated surgical operating tables and

cardiopulmonary equipment, including catheters, in the Antalya Free Zone, along

the southwest Mediterranean coast of Turkey.

In addition Turkish hospitals enjoy costs one-third to one-fifth of those in the

European Union. The Turkish Statistical Institute (TUIK) recently estimated that

165,000 foreigners visit Turkey annually for healthcare purposes. The country,

TUIK said, earns USD 360 million a year from health tourism. One of the biggest

markets for Turkey’s medical tourism market is the UK. By 2020, Turkey aims to

attract 500,000 foreign patients each year and earn USD 10 billion from health

tourism, according TOBB, Turkey’s largest business organisation.

The demand for health care services and equipment is expected to continue

expanding in the next several years. The trend toward privatization of health

services coupled with increasing demand of private hospitals for advanced

technology paves the way for modern and specialized health facilities and alarger

healthcare market. Private sector healthcare services are expanding, with its

share in total fixed capital health investments on the rise - from 48% in 1993 to

over 75% in recent years.

As growth in the healthcare sector is expected to continue and restructuring of

the health financing system is on the agenda, Turkey will remain an attractive

market for investment in equipment and supplies, as well as medical consulting

services and knowledge transfers. In addition to its growing internal market,

Turkey also offers opportunities for healthcare services and equipment providers

as a stepping-stone to the markets in the Central Asia and North Africa.

Developments in the healthcare policy will have further positive effects on the

growth of private healthcare services. As a result of successive health reforms

partly supported by the World Bank, the health sector has been undergoing a

significant restructuring, whereby a greater reliance is being put on private sector

funding.

The Indian healthcare industry was estimated at USD 40 billion in 2010 is

expected to reach USD 280 billion by 2020. Large investments by private sector

Healthcare Sector in India


players are likely to contribute significantly to the development of India’s hospital

industry, which comprises around 80% of the total market, according to the

report ‘Indian Hospital Services Market Outlook’ by consultancy RNCOS. As per

estimates by ratings agency Fitch, the sector is poised to grow to USD 100

billion by the year 2015 and further to USD 275.6 billion by 2020.

The Indian healthcare sector comprises the sub-sectors of hospitals, medical

infrastructure, medical devices, clinical trials, outsourcing, telemedicine, health

insurance and medical equipment.

India presently has 0.5 million doctors, 0.9 million nurses and around 1.37 million

beds, and has the highest number of medical and nursing colleges, at 303 and

3,904, respectively. In addition, the cost of medical treatment in India is one-

tenth that compared to costs in the US and Europe.

The Indian government is encouraging the growth of this market through policies

such as a reduction in import duties on medical equipment, higher depreciation

on life-saving medical equipment (40%, up from 25%), and a number of other

tax incentives.

India’s foreign investment policy is very liberal for hospitals. Since January 2000,

FDI is permitted up to 100% under the automatic route for the hospitals sector in

India. Approval from the Foreign Investment Promotion Board (FIPB) is required

only for foreign investors with prior technical collaboration, but allowed up to

100%.The government also allots priority to proposals of greater social relevance

such as hospitals, lifesaving drugs and equipment.

Many foreign players have entered the Indian healthcare market due to the large

size. Some of these foreign players are Pacific Healthcare of Singapore, which is

a JV with Vital Healthcare in Hyderabad; Columbia Asia Group, a Seattle-based

hospital services company; Wockhardt Hospitals; Steris, a US-based medical

equipment company that has set up a wholly-owned arm in India; and Amcare

Labs, an affiliate of Johns Hopkins International of the US, which has set up a

diagnostic laboratory in Hyderabad through a JV with the Apollo Group.

Besides hospitals, foreign players have also evinced interest in establishing

research and development (R&D) centres in India; for example, Abbot

Laboratories has announced plans to set up an R&D centre in collaboration with

Syngene, a contract research subsidiary of Biocon Ltd., to develop nutrition

products in India; US pharma company Merck, which is known as MSD outside

of the US and Canada, plans to set up a laboratory in New Delhi for developing

vaccines at an estimated cost of USD 133.93 million.


The total FDI inflow into India in the hospitals and diagnostics sector for the

period April 2000–April 2011 was USD 1 billion, according to the Department for

Industrial Policy and Promotion (DIPP), which is part of the Ministry of

Commerce and Industry and which is responsible for formulating the FDI policy

in the country.

In addition, India is now acknowledged as the premier destination for medical

tourism, owing to cheaper costs and treatments in the country. According to

industry estimates, the market size of medical tourism in India is growing at over

25% annually at over USD 2.5 billion. The segment’s growing business potential

prompted the ITC Group to set up the 58-room Fortune Park Lake City business

hotel at the Jupiter LifeLine Hospitals complex in Thane, near Mumbai, to serve

medical tourists.

Most international patients are from Africa, SAARC and West Asia. Patients

requiring higher-end tertiary care are now coming to India for cardiology,

orthopaedics, neurology, oncology and organ transplants. Affordability of

treatment is a big pull factor as treatment in India costs just 10% to 20% of what

it costs abroad.

The main areas where a number of market opportunities exist for both domestic

and foreign players in the Indian healthcare domain include medical tourism,

healthcare insurance, telemedicine and medical equipment.

The main drivers of growth in the healthcare sector are India’s booming

population; growing middle class; increasing purchasing power; growth in

infectious, chronic degenerative and lifestyle diseases; and rising awareness of

personal healthcare.

Turkey has a thriving chemical products industry (CPI), but is heavily dependent

on imports of chemical raw materials, many basic chemicals and finished

products. Chemical imports are the second biggest import item of the country

after fossil fuels. Imports exceed exports by three times.The foreign trade in

chemical products has increased threefold in the past four years.

The country’s CPI is roughly divided into manufacturers of petrochemicals and

basic chemicals, syntheticfibers, plastic products, agricultural chemicals,

industrial gases, abrasives, explosives, chemical fertilizers, textile chemicals,

pharmaceuticals, paint, soda, rubber, adhesives, chromiumchemicals, boron

Chemical and Petrochemical Sector

Turkey


chemicals, sodium sulphate, personal care products, soap and detergent,

essential oils and cosmetics.

Turkey’s substantial economic growth combined with industry’s strong

positioning offer ample growth opportunities for Turkey’s chemicals industry.

Production value soared increasing by a CAGR as high as 9% between 2006 and

2011, reaching nearly USD 37 billion in 2011. The increase from 2010 to 2011 was

a staggering 11%, showing great promise for the future.

Turkey’s export growth reached double digits as it increased from USD 12 billion

in 2007 to more than USD 20billion in 2012.Proximity to neighbouring markets

and increasing demand in these markets placed Turkey in a very strategic

vantage point. Egypt was Turkey’s largest export market constituting 9.4% of

total exports, followed by Iraq with almost 6% and Germany with approximately

5%.

Turkey exports to 180 nations with the European Union as the main market,

followed by the former Soviet Union, Eastern Europe and the Middle East.

Plastics and plastic products combined was the biggest export item with a 37%

share. Flexible intermediate bulk containers, sacks and bags made polyethylene

or polypropylene traps and bags made of ethylene polymers, plates, sheets, film

foil and plastic packaging materials lead these. Rubber products, including tyres

and tire tubes, are Turkey’s second largest chemical products exports, accounting

for about 19% of CPI exports. Other major CPI exports include soap, detergent,

organic and inorganic chemicals, pharmaceuticals, dyes, pigments, synthetic

fibers, essential oils and cosmetics.

Manufacture of Rubber and Plastic Products

Manufacture of Chemicals, Chemical Products and Basic Pharmaceutical Products and Materials

FDI In the Chemical Manufacturing Industry in Turkey

Source : CBRT

2007 2008 2009 2010 2011

0

200

400

600

800

1,000

1,200

1,400

US

D M

illio

n

2012


Turkey’s chemical imports increased from more than USD 55 billion in 2007 to

more than USD 90 billion in2012, indicating a CAGR 10% growth during these

years. Turkey’s primary import partner is Russia with a 36%share, followed by

Iran with 21% and Italy and Germany with 8% and 7%, respectively. Total

imports retractedto USD 88 billion in 2013.Raw materials and semi-finished

products accounted for almost 90% of Turkey’s chemical imports.

Turkey has ambitious 2023 targets for thechemical industry which include

reaching USD50 billion in chemical exports, thus capturing0.79% share of the

global chemicals market.The government has also launched a strategicaction plan

for the chemical industry in order toreduce the industry’s import dependency.

Turkey had the highest amount of FDI in chemicalmanufacturing in 2007 with

more than USD 1.1billion. FDI inflows to the industry increased CAGR 27%from

2008 to 2012 nearing almost USD 1 billion in2012. M&A’s in Turkish chemicals

industry from 2010 to 2013 accounted for more than USD 800 million.

Demand for petrochemicals is steadily rising in Turkey, increasing an average 11%

a year. Totallocal demand for petrochemicals, which was 2 million tons in 1991,

doubled to 4.100 milliontons in the year 2003 and increased more than five-fold

to an estimated 9.500 million tons in2009.

Demand for thermoplastics is expected to exceed Turkey’s production capacity

seven-fold by2015, leading to a boom in imports, the Istanbul Chamber of

Industry (ÝSO) said in a report onthe chemical industry. A supply shortage of tire

raw materials was around 272,000 tons a year in2010. Since the economic life

span of existing facilities will come to an end in 2015, thermoplastic

productionwill cease to exist in Turkey, and major new investments will be

needed, the ÝSO report said.

Turkey has become a big importer of petrochemicals since its entry into a

customs union withthe European Union in 1996. Producers in the EU meet

shortages in ethylene, caprolactum, andpolyvinyl chloride, polypropylene, low-

density polyethylene and other products, for which demandis rapidly rising in

Turkey.

The Turkish government earmarked the chemical industry for extensive

incentives in the comingyears to allow companies to make new investments and

make the industry competitive. WithTurkey now a candidate for full membership

in European Union, small and medium-size Turkishchemical companies stand to

benefit from EU funds to develop research and development programs.

Petrochemicals


India

In terms of volume of production of chemicals, India is positioned as the

3rdlargest producer in Asia, next to China and Japan, and the 12thlargest in the

world. The estimated value of output of the Indian chemical industry (2012-13) is

around USD 144 billion (Rs 782,949 crore). India accounts for approximately 16%

of the world production of dye stuff and dye intermediated. Total production of

major chemicals in India was 19,308 thousand metric tonnes in FY2013-14. One

of the most diversified sectors, covering more than 70,000 commercial products,

the sector provides chemicals for various end products such as textiles, paper,

paints and varnishes, leather, etc.

In terms of sub-sectors, the Indian chemicals industry is composed of base

chemicals that account for 53% share, pharmaceuticals contributing 24%,

specialty chemicals 18%, biotech 3% and agro chemicals 2% share.

Indian is currently the world’s 3rdlargest consumer of polymers and 3rdlargest

producer of agrochemicals.The current production of polymers is around 9 million

tons with import of around 2.8 million tons.The polymer demand is expected to

grow by 8-10% with a healthy growth in clothing, automobiles, etc.

The size of the Indian chemicals industry was estimated to be around USD 83

billion in 2009-10. It contributes around 5% to India’s total GDP. The chemical

industry also accounts for 13% share in total exports and 8% share in total

imports of India. The sector contributes around 20% to national revenue by way

of taxes and levies.

Indian companies are attracting foreign equity investments in the chemicals

sector based on their strong fundamentals. For example, Standard Chartered

Bank’s private equity segment has invested USD 19 million in Mumbai-based

Privi Organics. Similarly, global asset manager, The Carlyle Group, has invested

USD 25 million in emulsion manufacturer Visen Industries through an affiliate,

First Carlyle Ventures III.

Foreign players are also strengthening their presence through the expansion

route. For instance, over-the-counter (OTC) Russian brands of Mumbai-based JB

Chemicals & Pharmaceuticals (JBCPL) have been acquired by Johnson &

Johnson (J&J) for about USD 260 million. Another example is the Shanghai Baijin

Chemical Group of China, which has formed a joint venture with Indofil

Industries Ltd, the INR 5,000 crore K. K. Modi Group company. The venture will

set up a carbon di-sulphide (CS {-2}) plant at Dahej in Gujarat at an investment of

USD 40 million. The plant, Indo Baijin Chemicals Pvt Ltd, and will have an annual

capacity of 50,000 tonnes of CS {-2}.


The Indian government allows 100% FDI in the chemicals sector. No licenses are

required for production of most of the chemicals, including organic, inorganic,

dyestuff and pesticides. Only a few hazardous chemicals need licenses for

production.

The total FDI inflow into India in the chemicals sector was USD 2,927 million

from April 2000 to April 2011, according to the Department of Industrial Policy

and Promotion (DIPP), which is a part of the Ministry of Commerce and Industry

and is responsible for FDI policy in the country. Today, India has a significant

presence in the production of basic organic and inorganic chemicals, pesticides,

paints, dyestuffs and intermediates, petrochemicals, fine and specialty

chemicals, cosmetic and toiletry product segments.

India has huge potential for value addition in chemicals and petrochemicals

sectors. Currently, investments are planned by integrating petroleum refining

with downstream petrochemical plants.Polymers, specialty chemicals,

agrochemicals and dyes industries in India present immense growth

opportunities. Potential exists for putting up manufacturing plants for Engineering

Polymers. Currently, engineering polymers are imported and tailored for specific

endue applications by compounding with various additives.India can be a

manufacturing hub of plastic processing sector as OEMs for automobiles/

electronics/ telecommunications etc. due to availability of skilled manpower for

the sector.Retail industry boom is helping consumption of various plastics

packaging material growth.

Large population with huge domestic market, dependence on agriculture, retail

sector and export demand are the key growth drives for the chemicals industry

in India.Demand for plastic processing articles will increase due to high

disposable income, packaging needs, growing young population.Growing

construction industry and adoption of advanced coating, ceiling & polymer-based

reinforcing material in construction; plastics, paints and coatings usage in

automotive sector will add to the demand.

Turkey’s pharmaceutical market became the 6thlargest market in Europe and the

16thlargest in the world in terms of sales in 2012. Pharmaceutical sales reached

USD 12.5 billion, which means a CAGR of nearly 10% between 2003 and 2012.

Domestic and international investors are ramping up their new investments in

the pharmaceutical sector to take advantage of Turkey’s attractive market where

Pharmaceuticals Sector

Turkey


the pharmaceutical sector grew by 8.9 percent from 2012 to 2013, while the

growth in real GDP was 3.5 percent for the same period.

Turkey’s foreign-dominated pharmaceuticals industry accounts for about 10% of

the chemicalindustry’s production. Some 300 companies operate in the sector,

including 43 manufacturersof pharmaceuticals and of pharmaceutical raw

materials. Sixty-seven multinationals have investmentsin the Turkish

pharmaceuticals industry, with 13 having their own production facilities.Leading

local pharmaceutical producers are Abdi Ýbrahim, BilimÝlaç, Eczacibaþi

Pharmaceuticals(now owned by Zentiva), Ýbrahim EthemUlugay (now owned by

Menarini), Mustafa Nevzat,Fako (now owned by Actavis) and Deva (now part of

EastPharma).Major multinational pharmaceutical companies with investments in

Turkey include Roche, GlaxoSmithKline,Novartis, Bayer, Hoechst Marion Roussel,

Sanofi-Aventis, BoehringerIngelheim,Johnson and Johnson, Baxter and Pfizer.

National expenditure on pharmaceuticals in 2010 stood at Euro 6.960 billion,

according to the PharmaceuticalManufacturers’ Association (ÝEÝS).The Turkish

market had 7,672 pharmaceutical products in 2010, of which 61.7% were

locallymanufactured and 38.3% imported, the ÝEÝS reported. Twenty companies

accountfor 74.3% of sales in pharmaceuticals in Turkey. The industry employs

25,000 persons.

In 2010, Turkish pharmaceutical imports totalled USD4.410 billion. About 47% of

the imports werefor raw materials and 53% for finished products, the Turkish

Statistics Institute reported. Exportsin 2010 reached a record high of USD558.2

million, with about 20% in raw materials and 80% infinished products.

US

D B

illio

n

Top 20 Countries According to Pharmaceutical Sales in 2012

450

400

350

300

250

200

150

100

50

0

USA

Japa

n

China

Fran

cer

l

Baz

i

mGer

any

anCad

aIta

lyUK

Spain

South

orea

K India

Austr

liaa

Mex

ico

Rs

usia

urTke

y

Poland

rin

Net

hea

d

Belgumi

Vene

zuela

12.5

Turkey

Emerging Countries

Developed Counrties


Major suppliers of pharmaceuticals include England, Germany, France,

Switzerland, the U.S., andItaly. Germany is the main recipient of Turkish

pharmaceutical exports, followed by Spain, Switzerland,the U.S., Poland and

England.

In contrast to the European and North American markets, where cardiovascular

drugs lead consumption,antibiotics, cardiovascular, antirheumatic drugs, nervous

systemics and oncologicalpreparations are the most widely consumed drugs in

Turkey, accounting for about 47.4% of thetotal market in 2008.Cardiovascular

drugs totalled only 11.4% of total consumptionin the Turkish market.Turkey

hasone the lowest per capita consumption figures among European countries,

the European Federationof Pharmaceutical Industries’ Associations reported.

Despite aspiring for membership in the European Union, Turkish compliance with

patent protectionand intellectual property rights, particularly in pharmaceuticals,

remains an issue of contention.

A recent government decree allows for data protection and data exclusivity.

Under this decree, setup in compliance with the World Trade Organization’s

TRIPS agreement, generic drugs similarto patented medicines can only be

produced 6 to 10 years after the original product has beenintroduced on the

market. Patents are protected for 20 years.

The pharmaceutical market is expected to rapidly grow, driven by rising income

levels and populationgrowth and greater importance given to healthcare.The

pharmaceutical industry is one of the few sectors in Turkey where the

government has significantcontrol over prices. All drugs have to be registered

with the Ministry of Health, whichdetermines the rates by which pharmaceutical

companies can increase their prices - often lower than increases in the

wholesale and consumer price indexes.

Indian pharmaceutical industry is 3rdlargest in the world and is one of the most

developed industries.The industry accounts for about 2.4% of the global

pharmaceutical industry in value terms and 10% in volume terms.The Indian

pharmaceutical industry revenue is expected to expand at a CAGR of 12.1%

during 2012–20 and reach USD45 billion.

India’s generic drugs account for 20% of global exports in terms of volume,

making India the largest provider of generic medicines globally.Between 2011

and 2016 patent drugs worth USD255 billion are estimated to go off-patent

leading to a huge surge in generic product. The newly available market will be

India


filled by generics, which would provide great opportunity to the Indian

companies.The generics market is expected to grow to USD26.1 billion by 2016

from USD11.3 billion in 2011.

In 2011, India’s OTC drugs market stood at USD3 billion; it is expected to rise at a

CAGR of 16.3% to USD6.6 billion during 2008-16. Increased penetration of

chemists, especially in rural regions of India, would make OTC drugs easily

available.Pharmaceutical companies have increased spending to tap rural

markets and develop better medical infrastructure.

Technologically strong and totally self-reliant, the pharmaceutical industry in India

has low costs of production, low R&D costs, innovative scientific manpower,

strength of national laboratories and an increasing balance of trade. Indian

pharmaceutical industry today is ranked world class, in terms of technology,

quality and range of medicines manufactured. From simple headache pills to

sophisticated antibiotics and complex cardiac compounds, almost every type of

medicine is now made indigenously.

The industry today can boast of producing the entire range of pharmaceutical

formulations, i.e., medicines ready for consumption by patients and about 350

bulk drugs, i.e., chemicals having therapeutic value and used for production of

pharmaceutical formulations.

Per Capita Pharmaceutical Consumption in Turkey by Years

(in U.S. Dollar)

Year Per Capita Consumption

1990 17

1995 25

1996 26

1997 32

1998 35

1999 38

2000 42

2001 38

2002 68.6

2003 85

2006 81.4*

2007 136

2009 132

* in euros

Source : Pharmaceutical Industry Employers Association, Istanbul Chamber of Industry


The pharmaceutical industry in India is stated to be valued at approximately USD

12.26 billion as per industry estimates. This industry is growing at 10-11% per

annum on compounded growth rate basis. Although total turnover of

pharmaceutical industry is estimated at USD 21.04 billion, about 65% of this

revenue is from exports. It spends around 18 % of this revenue on research and

development (R&D) activities. Additionally, India’s clinical research industry is

estimated to be a USD 2.2 billion with a high growth rate of 23%. Moreover,

Indian pharmaceutical off-shoring industry is slated to become a USD 2.5 billion

opportunity by 2012, due to low R&D costs and a high-talent pool.

Through the introduction of a system of product patents since 2005, Indian

industry has today become very a worldwide exporter of high quality generic

drugs. India exports pharmaceuticals to many countries across the world,

including the U.S., Germany, France, Russia and UK.

The Indian Government is very proactive for boosting growth and investment in

Indian pharmaceutical sector. It allows 100 per cent FDI under the automatic

route in the drugs and pharmaceuticals sector.

The DIPP data suggests that the drugs and pharmaceuticals sector has attracted

an impressive level of FDI worth USD 1,882.76 million during April 2000 to March

2011. Industrial licenses are not required in India for most of the drugs and

pharmaceutical products. Manufacturers are free to produce any drug duly

approved by the Drug Control Authority.

This patent regime has led to the investment from many pharmaceutical

multinationals in India. Now they are looking at India not only for its traditional

strengths in contract manufacturing but also as a highly attractive location for

research and development (R&D), particularly in the conduct of clinical trials and

other services. Indian and foreign companies are continuing with patented drug

launches in India and between 2005 and 2010, the Indian Patent Office has

granted 3,488 product patents, as per a KPMG report.

Indian Pharmaceutical sector is slated to grow to USD 55 billion by 2020,

becoming 6thlargest market globally in absolute size, based on projections by a

McKinsey report on Pharma 2020. While pharmaceutical MNCs already present

in India are further consolidating their presence through acquisitions, many

MNCs have staged a re-entry after 2005. The share of pharmaceutical MNCs in

the domestic pharmaceutical market is estimated to increase to 35% by 2015.

India rates higher than other countries on cost efficiency. This is visibly reflected

in the manufacturing costs of US FDA-approved plants in India, wherein the

costs are 65% lower than that in the US and 50% lower than that in Europe.



Teva Pharmaceuticals, Israel Nipro Corporation, Japan

Procter & Gamble, USA Pfizer, USA

Glaxo Smith Kline, UK Johnson & Johnson, USA

Otsuka Pharmaceutical, Japan AstraZeneca, Sweden-UK

Going forward, there is immense scope for growth. The per capita consumption

of drugs in India, stands at USD 3, is amongst the lowest in the world, as

compared to Japan- USD 412, Germany- USD 222 and USA- USD 191.

Apparently, this huge gap indicates the underlying opportunities.

Outsourcing in the fields of R&D and manufacturing is the next best event in the

pharmaceutical industry. Spiralling cost, expiring patents, low R&D cost and

market dynamics are driving the MNCs to out source both manufacturing and

research activities. India with its apt chemistry skills and low cost advantages,

both in research and manufacturing coupled with skilled manpower will attract a

lot of business in the days to come.

Information and Communication Technologies (ICT) Sector

Turkey

Breakdown of the ICT Market in Turkey 2007-2010

(in Billion$)

Market 2007 2008 2009 2010

Telecommunications 19.3 20.9 19.6 20.0

IT 6.5 7.2 5.7 7.3

ICT total 25.7 28.1 26.3 27.3

Source : Turkish Informatics Industrialsts' Association (Tubisad) and Marketing Services and Research Group

Turkey’s information and communication technologies (ICT) market reached a size

of USD27.3 billion in 2010, an increase of 3.8% from 2009, as the industry pulled

out of the global recession, according to Inter Pro Marketing Services and

Research Group. The market, which more than doubled from 2003, had 14%

compound annual growth rate (CAGR) between 2005 and 2009,in contrast to the

single digit expansion in the U.S. and the European Union. Telecommunications

accounted for USD20.0 billion of the market, while information technologies (IT)

corresponded toUSD7.3 billion.


Although great momentum has been gained in recent years, the share of ICT in

GDP remains around 4.2% compared with 8% to 10% in the European Union.

ICT imports widely exceed exports and average spending per person on ICT is

around USD40 compared to USD500 in Western Europe and USD1,200 in the

USA.

Though relatively small with a USD7.3 billion market size in 2010, Turkey has one

of the fastest growing IT markets of the world. The IT market is dominated by

hardware sales, with over 50%of the market. Some 3.604 million computers

were sold in Turkey in 2010, a 20% increase from 2009 anda six-fold rise from

2002, when only 600,000 PCs were sold. Around 70% of the sales are in

notebook computers.

Internet Service Users in Turkey by Years

Years Number of Subscribers

1999 2,000,000

2000 2,500,000

2001 3,500,000

2002 4,000,000

2003 6,000,000

2004 11,279,000

2005 14,844,000

2006 16,406,000*

2007 17,851,000*

2008 19,052,000*

2009 20,104, 000*

2010 20,957,000*

*Estimated

Source : Ministry of Transportation and telecommunications, SPO and Pyramid Research, and Economicst

Intelligence Unit

There has been a remarkable increase in notebook sales in recent years due to

the high in terest in use of wireless internet, and third generation

telecommunications (3G) services and sustained growth of the economy. When

compared to developed countries, Turkey still has an internet users ratio of

around 49%, bringing it close to rates in other countries, such as Italy, Bulgaria

and Romania, the Economic Intelligence Unit reported. The population segment

ages 15 to 44 offers a high potential in terms of consumption of technology


products and accessories. Accordingly, growth of computer sales in Anatolian

cities has been remarkable over the recent years.

The IT market is expected to continue its expansion triggered by investments

both in public and private sector. Currently, finance and public sectors are top

two main sectors in terms of IT services expenditures. Turkey’s IT equipment

manufacturing capability is modest and software is largely imported. Local

manufacturing activity is limited to assembly. The current share of software in

total market is15%, which is far below worldwide averages. The IT sector views

software as its strategic growth. In 2008, the total value of registered software

exports stood at around USD250 million. This figure, however, does not reflect

the real value of sector exports, because software products are often apart of

other products and services such as machinery, electronics, electronic

machinery, engineering, medical equipment, etc. The main export markets for

Turkish-made software are the USA, Germany, Iraq, Kazakhstan, the Netherlands,

Ukraine and Greece.

One major development was the August 6, 2010, opening in western Turkey of a

Foxconn factoryto turn out 2.4 desk top computers a year. A Hewlet-Packard (HP)

affiliate based in China, Foxconn opened the factory in the industrial town of

Corlu, in Thrace, 200 km west of Istanbul, with a USD60 million investment. The

products are for both the domestic market and for exports. In 2009, San Jose,

California-based secure electronic payments systems company Verifone acquired

the Turkish ICT companies Teknosis and Lipman Elektronik for an undisclosed

sum.

The Turkish ICT market will be shaped by stronger and more global players in the

comingperiods. All the new entrants in 2005 including Oger Telecoms and

Vodafone as well as Turk Telekom unveiled significant amount of investment

plans for the next few years.

The sector is far from being saturated. The penetration rate of 26% in fixed line

telephony services in Turkey is one of the lowest in Europe. The Internet

penetration rate as of end-2007is a low 25.3%. Although Turkey shows a

doubling of broadband lines from 2003 to 2004and further on, it is still well

behind most European countries. With the introduction of 3G,in 2009, the range

of telecommunication services is diversifying to a great extent to include

broadband communications services, WiFi, Wimax and value added services.

Given that and continuing progress in deregulation and commercialization

activities, the Turkish wireless market provides plenty of room for growth,

offering opportunities for exporters and existing and new players.


E-Transformation Turkey and e-government projects, which are being executed as

part of the convergence with the European Union (EU), will create a lucrative

demand for ICT companies, paving the way for large e-Government projects with

large amounts of public funding and fuelling internet use and content creation.

Cisco’s investment plans worth USD275 million, which was announced in

September 2006, involves supporting Turkey’se - transformation agenda by

providing networking technology and prototypes to support pilot programs

targeted towards rural broadband for education, as well as connectivity for

smalland medium businesses, municipalities and local communities.

There are long-term prospects for Turkey becoming strong in software exports.

The IT sector views software as its strategic growth segment for exports and a

great deal of Turkish software companies is on the way to obtain CMMI, SPICE:

ISO 15504, ITIL, and COBIT. The Silicon Valley Project, which started under the

Ministry of Industry, is expected to givea push to these efforts. Meanwhile,

Oracle opened its “Istanbul ISV Migration Centre” in mid-2006 to meet the

software requirements of the Europe Middle East and Africa region. YASAD

(Software Industrialists Association) has set its target as software exports worth

USD2 billion during the next five years.

In addition to the mounting demand from local companies, Turkey has substantial

strengths to be the location for offshore outsourcing services, including

European calls. Growth of technology supermarkets, such as Smile, Darty,

Bimeks, Vatan Bilgisayar and Teknosa are also fuelling retail sales.

India is regarded as the premier destination for global IT and ITeS outsourcing,

accounting for almost 55% of the global sourcing market in 2010, according to

the Ministry of Communications and Information Technology. The Indian IT

industry's (including hardware) share in the global market stands at 7% and

growth has been largely due to exports. The ITeS sector includes IT hardware,

software and services.

India boasts of a robust sector comprising of more than 15,000 firms; of which

1000+ are large firms. Sector accounts for largest share in total services exports

(38%). 600 offshore development centres (ODCs) of 78 countries.

Indian IT companies have, in recent years, started expanding their global

footprint through the global delivery model to seamlessly service their clients’

needs worldwide. Industry analysts expect the top IT firms to grow between

India


23% and 27% in 2012 on the basis of an increased number of discretionary

projects, improved pricing and robust business volumes.

The Indian IT-BPO sector is estimated to have aggregated revenues of USD 88.1

billion in 2010–2011, with the IT software and services sector (excluding

hardware) accounting for USD 76.2 billion of revenues. During this period, direct

employment is expected to have reached nearly 2.5 million, an addition of

240,000 employees, while indirect job creation is estimated at 8.3 million. As a

proportion of national GDP, the sector revenues have grown from 1.2% in

1997–1998 to an estimated 6.4% in 2010–2011. Its share of total Indian exports

(merchandise plus services) has increased from less than 4% in 1997–1998 to

26% in 2010–2011, as per the report of the working group on the IT sector for

the 12th Five-Year Plan (2012–17).

The main growth drivers of the IT and ITeS industry are cost efficiencies,

utilization rates, diversification into new verticals, and shifting business and

pricing models. India is a preferred destination for companies that are seeking to

offshore IT and back-office functions. It also retains its low-cost advantage and is

a financially attractive location when viewed in combination with the business

environment it offers and the availability of skilled people. The country is also

known across the world for its successful export-led software industry.

Software and services exports (including ITeS-BPO), excluding hardware exports,

were estimated at USD 59 billion in 2010–11, as per NASSCOM, India’s premier

association in the IT sector. Software and services exports constituted more than

half of the electronics and IT-ITeS industry’s revenues in 2010–11.

As per the report of the task force set up by Ministry of Communications and

Information Technology (MoC&IT), the demand for electronics hardware in the

country is projected to increase from the USD 45 billion in 2009 to USD 400

billion by 2020. The task force has been set up to suggest measures to stimulate

the growth of the IT-ITeS and the electronics hardware manufacturing industry in

India.

According to the executive summary report published by the Department of

Electronics and Information Technology, MoC & IT, the sector has grown to

become the biggest employment generator in the country. As per NASSCOM

estimates, the workforce in the Indian IT sector will touch 30 million by 2020.

Global companies such as Accenture, HP Enterprise Services, IBM and

Capgemini have a strong presence in India. These companies already have a

large number of India-based employees — Accenture (40,000+), IBM (130,000+),

HP Enterprise Services (15,000+) and Cap Gemini (26,000+); global players are


aiming to develop onshore service providers who can deliver seamless hybrid

onshore-offshore services at low costs.

Between April 2000 and March 2011, the computer software and hardware

sector received cumulative FDI of USD 10,723 million, according to the

Department of Industrial Policy and Promotion (DIPP), which is part of the

Ministry of Commerce and Industry and which is responsible for formulating the

country’s FDI policy.

IT and ITeS has played a major role in the overall growth and development of

India. In the electronics and IT sector, 100% FDI is permitted under the

automatic route. The major fiscal incentives provided by the Government of India

in this sector have been for export-oriented units (EOU), software technology

parks (STP) and special economic zones (SEZ).

According to NASSCOM, the Indian IT industry is poised to become a USD 225

billion industry by 2020.According to a McKinsey report titled ‘Perspective 2020:

Transform Business, Transform India,’ the exports component of the Indian IT

industry is expected to reach USD 175 billion in revenue by 2020. Over 80%

growth is expected from non-traditional sectors such as public sector, media and

utilities; in addition, strong demand is expected from emerging countries that

currently account for only 20% of global IT spending. At the same time, the

domestic component will contribute USD 50 billion in revenue by 2020 as India is

considered to be the global hub as far as the availability of skilled talent is

considered. Moreover, the growing talent pool of India has the ability to drive the

R&D and innovation business in the IT-BPO space.


Accenture (Ireland) Cognizant (USA)

HP (USA) Capgemini (France)

IBM (USA) Atos (France)

Microsoft (USA) CDNS (USA)

Intel (USA) Dell International (USA)

Agilent Technologies (USA) Mentor Graphics (USA)

Oracle Corporation (USA) Qualcomm (USA)

Steria (France) Ricoh (Japan)

SAP (Germany) TIBCO (USA)

Applied Materials (USA) Philips (Netherlands)


Food and Agriculture Sector

Turkey

With its favourable geographical conditions and climate, Turkey,the 7thbiggest

agricultural economy in the world, is considered to be one of the leading

countries in the world in the field of food and agriculture.The restructuring efforts

that began in the early 1980s, alongside a series of reforms such as privatizations

and the reduction of trade barriers in the agriculture sector, resulted in a

domestic market that is an integral part of the world economy today.

Turkey has a large and growing food and agriculture industry that corresponds to

9% of the overall gross value-added (GVA) and 25 percent of the employment

levels in the country.Turkey’s agricultural production is equivalent to 40% and

20% of EU-25 production of fruits andvegetables respectively.In arable crops, it

is a major producer (in EU terms), while in other crops it is a competitive

producer(in EU and world terms) of certain grain legumes such as chickpeas and

lentils, of cotton, and of somequalities of tobacco and olive oil.

About 39 million hectares devoted to agriculture represents 23% of the EU-25

agricultural area. Turkeyhas a far richer endowment of agricultural resources in

terms of cultivable land and availability ofwater than any Middle Eastern

country.Although the Turkish agricultural sector employed 5.2 million people as of

March 2010, or 24% of the country’s workforce, agricultural output constituted

only 8.3% of the GDP.

Agricultural output has ranged between USD50 billion to USD55 billion in recent

years. The bulk isaccounted by plant products. According to the Food and

Agriculture Organization of the UnitedNations, Turkey ranks among the top 10

countries in terms of vegetable and fruit production percapita as well as in total

output. Turkey’s great advantage is the conjunction of ample land with avariety of

climatic conditions. All temperate-zone and Mediterranean climate crops can be

grownin the country, as can a number of subtropical crops.

Production 2008 2009 2010

000 tons 000 tons 000tons

Cereals 31,132 33,553 32,700

Wheat 17,782 20,600 19,600

Barley 5,923 7,300 7,200

Maize 4,274 4,250, 4,300

Rice 753 750 860

Others 1,200 653 800

Agricultural Production 2007-2010


In 2010, Turkey’s most important agricultural products were cereals (32.7 million

tons), followed by various types of vegetables (26 million tons) and fruit (16.6

million tons). The bulk of cereals is wheat with 19.6 million tons and barley (7.2

million tons), while grapes ranked first in fruits(4.103 million tons), followed by

citrus fruits and apples. Cereals and cereal–based products accounted for 8% of

food production according to the latest analysis by the State Planning

Organization. Turkey is also an important producer in the following areas: It ranks

5th in olive oil production just after Spain, Italy, Greece and Tunisia, while it isa

top contender in dairy production with a milk market of about 11 million tons.

Turkey is a significant agricultural exporter. In fruit and vegetables in particular,

which account for around 46% of all Turkey’s processed food and agricultural

exports, it is a major world producer and net exporter. The shares of vegetable

oils and confectionary and chocolate products are increasing in total exports. The

country exports 1,530 agricultural and food products to 177 nations.

In 2010, Turkish agricultural and processed food exports stood at USD12.055

billion, the Turkish Exporters Assembly reported. A large part of its food and

agricultural exports go to the European Union countries. Food and agricultural

imports, including residues and wastes from the food industry, stood at an

estimated USD7.2 billion in 2010. Oil seeds, fruit, animal fats and vegetable

oilswere the biggest import items, accounting for 34% of imports.

Production 2008 2009 2010

000 tons 000 tons 000tons

Pulses ua ua ua

Cotton 1,820 1,725 2,100

Tobacco 100 85 55

Sugar beet 15,488 17,274 17,996

Potatoes 4,225 4,425 5,751

Sunflower Seeds 854 992 1,058

Fruits 15,600 16,600 16,600

Grapes 3,918 4,264 4,260

Olives 1,464 1,290 1,410

Hazelnuts 800 500 630

Tea 1,100 1,103 1,300

Vegetables 27,200 26,400 26,000

Source : Turkish Statistics Institute


The government aims to raise agricultural and food exports to USD39.9 billion by

2023, the 100th anniversaryof the Turkish Republic.The size of the Turkish agro

industry market, as a combination of demand for food, beveragesand tobacco, is

estimated around USD51 billion, according to the Turkish Statistical Institute

(TÜÝK).

Turkey attracted USD43 million in foreign direct investment (FDI) in its

agriculture, hunting, forestryand fisheries industries in 2009, a mere 0.8% of

total FDI inflows to the country in the year,theUndersecretariat of Treasury

reported. This was because of “continued structural problems, risksand

uncertainties in the sector and the faster growth in the service sector,” Deloitte

Turkey said.

Turkey is reshaping its agriculture in preparation for European Union (EU)

membership as wellas in line with its commitments to the IMF, and the sector

holds the promise of making Turkey amajor player in EU and world terms. The

comprehensive agricultural reform being executed since2000 creates a more

competitive agricultural sector and reduces state involvement. The WorldBank

contributes to these projects with USD600 million in loans.

The sector is developing fast in volume as well as in product variety and quality.

Domesticdemand is driven by increasing income levels and the changing

demand patterns of the newgenerations. Integration with the EU as well as

Turkey’s increasing globalization is spurringexports. In the longer term Turkish

accession can be expected to lead to an increase of tradein both directions as

the EU membership would mean an end to the protectionist measuresagainst

EU products.

Foreign investors’ success with merchandising the same products that dominate

Turkish agriculturaloutput means that there are major opportunities for

companies interested in thelow-cost output possible in Turkey. Opportunities

exist in animal products (meat and milk),fishery products, fruit and vegetable

processing, confectionery products, pasta and pastry production,herbal foods,

processed organic foods as well as vegetable oil (especially olive oil)and

viticulture.

There is a new focus on organic farming techniques and the government

isespecially very supportive of organic food manufacturing projects. Turkey

boasts the largestorganically grown area in the Mediterranean region. The

impressive advantage it has is thatorganic agriculture can easily be applied with

low cost in the country.


It is a gateway to the Middle East which represents an import marketof over

USD200 billion. The GAP region, with its 210.3 million sqm area particularly

available for organic farming, presents unprecedented advantages for organic

agriculture and hence for organic textile and an excellent location for the food

and beverages manufacturing industries.

India boasts of a rich agriculture resource base. In 2012, India ranked No. 1 in the

world in production of bananas, mango, papaya, chick-peas, ginger, okra, milk

(fresh & whole of buffalo and goat) and buffalo meat. Further; India ranks No. 2 in

the world in production of sugarcane, rice (paddy), potato, wheat, garlic,

groundnuts (with shell), dry onion, green peas, pumpkins, gourds, cauliflowers,

tea, tomatoes, lentils, wheat and cow milk.

The gross cropped area is 199 million hectares and the cropping intensity is

140%. The net irrigated area is 89.9 million hectares. A total of 127 agro-climatic

zones have been identified in India.

Strategic geographic location and proximity to food importing nations, makes

India favorable for export of processed foods. The Indian food processing

industry accounts for 32% of the country’s total food market. Estimated to be

worth USD 121 billion, it is one of the largest industries in India, and is ranked

5thin terms of production, consumption and exports. The industry employs 13

million people directly and 35 million people indirectly. It accounts for 14% of

manufacturing GDP, nearly 13% of India’s exports and 6% of total industrial

investment. Currently growing at more than 10% per annum, it is expected to

touch USD 194 billion by 2015.

Liberalization and growth of organized retail have made the Indian market more

attractive for global players. FDI in the sector has been increasing significantly

with a cumulative inflow of USD 5.89 billion between April 2000 and May

2014.Major global players in the food domain are already present in India. Major

MNCs already present in India include Nestle, Pepsi, Coke, Kellogg's, Delmonte,

Conagro, Unilever, Wal-Mart, Perfetti, Glaxo Smith Kline, Heinz, Wyeth

Ajinomoto, Nissin Met, Le Bon Griffith Laboratories, and many others are in

pipeline.

There are a number of foreign players operating in India, either directly or in

collaboration with Indian partners. For instance, McDonald’s is present in India

through two collaborations, one which involves a Development Licensee for the

southern and western regions, and the other a joint venture for operations in the

north and east.

India


The US-based private equity fund, New Vernon Private Equity Limited (NVPEL),

has decided to invest Rs 45 crore in Kochi-based spice major, Eastern

Condiments, which is the flagship company of the Eastern Group. Another

example is America’s largest chocolate and confectionery-maker, Hershey, which

is acquiring a 51% stake in Godrej Beverages and Foods for US$ 54 million.

With a large agriculture sector, abundant livestock, and cost competitiveness,

India is fast emerging as a sourcing hub of processed foods. Exports of

processed food and related products have also been rising steadily - Main export

destinations are Middle East and South East Asia.

The Indian food processing industry is divided into agri-products, milk and milk

products, and meat, poultry and marine products. Major industries constituting

food processing sector are grain mill, sugar, edible oils, beverages and dairy

products.

In agri-products, India is the largest producer of several fruits, such as banana,

mango and papaya. It is also the 2ndlargest producer of vegetables such as

brinjal, cabbage and onion. The country is also the 2ndlargest producer of rice,

wheat, sugar and cotton. In milk and milk products, India is the largest producer,

accounting for 20% of global production. In terms of livestock, the country has

the largest livestock population in the world, with 98.7 million buffaloes and 176

million cows, as per 2008 estimates.

There are 12 products reserved for manufacturing by the small-scale sector.

These products include bread, pastries, confectioneries, rapeseed oil, mustard

oil, sesame oil, groundnut oil, sweetened cashewnut products, ground and

processed spices other than spice oil and oleo resin spice, tapioca sago and

tapioca flour.

UNIDO has identified over 60 food processing clusters, consisting of small and

medium enterprises, across India. The state-wise distribution of the clusters

shows the largest concentration of companies in Maharashtra and Gujarat

followed by Andhra Pradesh, Punjab and Orissa.

Forty two Mega Food Parks are being set up in public-private partnership at an

investment of INR 98 billion. The parks have around 1200 developed plots and

enabling basic infrastructure that the entrepreneurs can take on lease for setting

up of food processing and ancillary units.121 Cold chain projects are being set up

to develop Supply Chain infrastructure in India.

The Government of India allows 100% FDI under the automatic route in the food

processing sector, in agri-products, milk and milk products, and marine and meat

products.


• The Republic of Turkey Prime Ministry Investment Support and Promotion

Agency (ISPAT)

• Foreign Economic Relations Board (DEIK)

• ISPAT’s – Turkish Business Outlook 2012

• Invest India

• The Automotive Components Manufacturers Association of India (ACMA)

• http://chemicals.nic.in

• http://www.cci.in

• www.dipp.nic.in

• www.rbi.org.in

` • http://www.fipbindia.com/

• http://www.mca.gov.in/

• http://finmin.nic.in/

• http://www.sebi.gov.in/

• http://moia.gov.in/

• http://mofpi.nic.in/

• http://www.mca.gov.in/

• http://www.nasscom.in/

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

• http://www.mit.gov.in/

Reference


• http://www.sezindia.nic.in/writereaddata/pdf/Sector-wise%

20distribution-...

• http://mit.gov.in/

• http://deity.gov.in

• http://www.whoindia.org/

• http://mohfw.nic.in/

• http://www.cci.in/pdf/surveys_reports/indias_pharmaceutical_industry.pd

• http://www.clustercollaboration.eu/documents/10147/101938/

Biotechnology+...

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

• http://dipp.nic.in/fdi_statistics/india_FDI_April2011.pdf

• http://www.in.kpmg.com/pdf/Indian%20pharma%20outlook.pdf

• http://www.clustercollaboration.eu/documents/10147/101938/

Biotechnology+...

• http://online.wsj.com/public/resources/documents/McKinsey

Pharma2020Execu...

• http://dipp.nic.in/fdi_statistics/india_FDI_April2011.pdf

• http://www.sezindia.nic.in/writereaddata/pdf/Sector-wise%

20distribution-...

• http://www.ibef.org/download/Textiles_Apparel_270111.pdf

• http://www.ibef.org/artdispview.aspx?art_id=29199&cat_id=123&in=73

• http://texmin.nic.in/annualrep/ar_10_11_english.pdf

N O T E S

N O T E S

Federation of Indian Chambers ofCommerce and Industry (FICCI)

Federation House, 1 Tansen Marg,New Delhi-110001

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