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The Rise of India in World Trade. Chris Callen, Country Manager, DHL Express - Jan 28 , 200 4. Agenda. India‘s International Trade Situation. DHL Trade Confidence Index. International Logistics. Building “Brand India “. Becoming World Class in India. India’s International Trade 2002/03. - PowerPoint PPT Presentation
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The Rise of India in World TradeChris Callen, Country Manager, DHL Express - Jan 28, 2004
Agenda
India‘s International Trade Situation India‘s International Trade Situation
DHL Trade Confidence Index DHL Trade Confidence Index
Building “Brand India “ Building “Brand India “
Becoming World Class in India Becoming World Class in India
International Logistics International Logistics
India’s International Trade 2002/03
Exports
– US $51.7 billion
– Growth 18%
• next only to that of China at 22%
• second highest among world’s 30 leading exporters in world
merchandise trade during the year 2002
Imports
– Growth 17.03%
Share of world trade
– 0.8%
Getting Ahead
“If the present trend continues, we may reach our
often stated goal of achieving 1% of world
merchandise trade ahead of the year 2007…”
Arun JaitleyUnion Minister of Commerce & Industry31 March, 2003
With the rupee rising against the With the rupee rising against the dollar and the global slowdown in dollar and the global slowdown in
world trade over the past few world trade over the past few months, is there cause for concern? months, is there cause for concern?
GDP – Regional comparison
India has recorded one of the highest growth rates in the 1990s
Among the largest economies in the world, its GDP is close to US$ 500 billion
Only China has had GDP growth higher than India
71
86
88
115
145
162
282
357
422
485
1,180
4,146
- 200 400 600 800 1,000 1,200 1,400
PH
SG
MY
TH
ID
HK
TW
AU
KR
IN
CN
JP
GDP (in USD Billion)
GDP growth, 1990-2001
China 10.0India 5.9S. Korea 5.7Indonesia 3.8Thailand 3.8Pakistan 3.7Philippines 3.3Mexico 3.1Brazil 2.8
Merchandise Exports vs GDP
Thailand, Malaysia, Indonesia all export more than India !
- 200 400 600 800 1,000 1,200 1,400
PH
SG
MY
TH
ID
HK
TW
AU
KR
IN
CN
JP
(USD Billion)GDP Exports
23%
10%
9%
36%
18%
117%
44%
57%
39%
101%
45%
142%
India Rising -- Challenges
WTO, Asean Free Trade Agreement (AFTA), Bi-
lateral FTAs Ground Infrastructure Golden Quadrilateral Highway network New FTZs and enhanced transhipment facilities Liberalised air traffic rights Duty structures – among the world’s highest Air Express self-handling – elimination of
monopolies in statutory service providers
Agenda
India‘s International Trade Situation India‘s International Trade Situation
DHL Trade Confidence Index DHL Trade Confidence Index
Building “Brand India “ Building “Brand India “
Becoming World Class in India Becoming World Class in India
International Logistics International Logistics
How do exporters view the situation?How do exporters view the situation?
All India The DHL Trade Confidence Index (TCI) at an all-India level is 61 (Q2’-
Sep03), up from 58 (Q1- Jun03), driven by a very optimistic 72 points in
general demand conditions. Factors contributing to this movement include optimistic demand conditions,
better domestic conditions & optimism about the macro-economic state The factors where no significant change is seen include Attitude of US
Customers, Impact of WTO, Exim Policy & Order Expectations
53
36
72
2111
70
1020
3040506070
8090
100
Favourable Neutral Less Favourable
Q1
Q2
DHL Trade Confidence Index
The Exporter view on General
Demand conditions, has become
more optimistic, with almost 72%
rating them as favourable as
compared to 53% in the last quarter
Apparel Sector Confidence among Textile / Garment exporters is even higher: The DHL
Apparel Trade Confidence Index has moved up to 63 (Q2 - Sep03), from 58 (Q1-Jun03)
Factors contributing to this upward movement include optimistic Demand conditions, better Domestic conditions, optimism about macro-economic state & Policy context
…DHL Trade Confidence Index
60
33
80
157
50
10
20304050
607080
90100
Favourable Neutral Less Favourable
Q1
Q2
Factors that seem to have moved down on confidence include Attitude of US Customers & Impact of NTMs
Optimism in Exporter view of the General Demand Conditions, shown here, has moved up to 80% from 60% in the previous quarter
Analysis So, the DHL Trade Confidence Index moved up by 5% in Q2-Sep03, despite
the fact that month on month, export growth began to slacken. Dr Debroy’s view of the possible reasons for this apparently paradoxical finding include:
- Time lag in perceptions reacting to objective reality
- Better domestic conditions biasing the results
- Exporters are unduly optimistic about seasonal demand conditions The upward movement in our Index can be ascribed more to better domestic
economic conditions & this has negated the impact of certain negative developments internationally
But there is no reason to despair… even if we get 8% growth in 2003-04 it will be respectable… and the target of 1% share of global trade appears fairly modest
…DHL Trade Confidence Index
Agenda
India‘s International Trade Situation India‘s International Trade Situation
DHL Trade Confidence Index DHL Trade Confidence Index
Building “Brand India “ Building “Brand India “
Becoming World Class in India Becoming World Class in India
International Logistics International Logistics
Emerging Trends
Growing cross-border trade – More cross-border production to take advantage of lower
costs/new markets– Greater liberalisation of trade policies & tariffs through WTO– Major shift by global companies to source, produce and
distribute from emerging economies like India Greater need for dedicated air express freighters
– Less reliance on under- floor space of passenger aircraft & dictated schedules
– Enhanced schedules to meet shortened transit times
Courier Air Express
…Emerging Trends
Challenge of Breaking the Time Barrier Further – Businesses demanding faster and more time-definite
deliveries– Need shortest “Time- to- Market”– Shorter Product life cycle
JIT processes and express transport key to supply chain logistics– Lower inventory holdings– Greater outsourcing of logistics services to integrators,
3PL/ 4PLs
Air Express Logistics Solutions
Agenda
India‘s International Trade Situation India‘s International Trade Situation
DHL Trade Confidence Index DHL Trade Confidence Index
Building “Brand India “ Building “Brand India “
Becoming World Class in India Becoming World Class in India
International Logistics International Logistics
The Path Ahead
Is India is at a point of inflection where it can take a significant share and role in world trade?
“There is no better time to be an Indian in this world” Two things critical for India to go forward strongly :
– Position India as a good place to do business in
– Position India as a place for manufacturing excellence These two are not easy-wins since the task is not one of
positioning alone – at least in many key sectors In marketing terms – India is not at the stage for aggressive
‘branding’ – but a stage for solid ‘product development’ But brand is very important – not at the country level but at
the individual company level
Branding
What came first : Sony or Japan, LG or Korea ? Building world-class brands is the responsibility of each and
every business – and the country has a smaller role in it The country responsibility is In making India an easy and
good place to do business with ! (whether it is for Indian companies or MNCs)
Infrastructure, labour reforms, primary education, borderless states, debilitating levels of corruption – all of them need to be managed with a far greater urgency.
Individual companies will get enormous opportunities in the world market – as trade barriers topple around the world.
Quotas in Apparel & textile Trade
China’s growth has been spectacular in areas where quotas have recently been removed by USA (Source : US Intl. Trade Commission)
For example :
– Bras & foundation garments (Category 349/649) : 232 %
– Knit Fabrics (Category : 222) : 21,976 %
– Infant wear (Category : 239) : 826 %
– Robes and dressing gowns (Category : 350 /650) : 540 %
Clearly, as trade regimes liberalise worldwide, new opportunities will open up for businesses which have world class manufacturing excellence with vertically integrated skills!
Don’t bother too much about ‘Brand India’, focus on building world class manufacturing excellence in our individual businesses – grow your own brand!
Agenda
India‘s International Trade Situation India‘s International Trade Situation
DHL Trade Confidence Index DHL Trade Confidence Index
Building “Brand India “ Building “Brand India “
Becoming World Class in India Becoming World Class in India
International Logistics International Logistics
Asia-Pacific Logistics OverviewM
ark
ets
Hong KongSingaporeJapanAustraliaNew ZealandKoreaTaiwan
MatureChina
UniqueMalaysia
Thailand
Indonesia
Philippines
India
Mid-LevelSub-Continent
Vietnam
Cambodia
Laos
Myanmar
Etc
Developing
Developed Logistics
High Competition High Service
levels Lead time
pressure Lower Growth
Rapid Development
Undeveloped domestic
Increasing service levels
High Growth
Developing sophistication
Increasing competition
Increasing service levels
Varied Growth
Poorer infrastructure
Lower competition
Customs Ownership
Issues High Growth
Ch
ara
cte
ris
tic
s
Building a Strong Infrastructure
Four Gateway Strategy – four state-of-the-art Express Handling Units for seamless self-handling of Air Express shipments at major airports– First 26,000 sq ft facility now operational in New Delhi;
only dedicated facility of its kind in India – Similar facilities planned in Mumbai, Chennai and
Bangalore 12 Spare Parts Centres across major cities Modern, technologically superior Service Centres 300-strong fleet of new vehicles, the largest of its kind in
India, linked in real time to our data network. Globally integrated sophisticated IT infrastructure for real
time supply chain management and tracking. 24-hour country-wide toll-free customer service call centre.
Building a Strong Infrastructure
Like you, many challenges we face are regulatory or bureaucratic – some we have overcome, some we are still battling, most of are unique to India:– On-board-courier– Gateways at Airports– 24-hour Customs in-premise– Indian Post Office (Amendment) Bill, 2002
Our investments are significant and we hope to provide the kind of logistics support which is truly world class. We’re getting there.
We are leading the way – we have 70% of the international air express market in India, and over 20,000 exporters and importers in our customer base here !
Invest, excel, promote.
THANK YOU