Introduction CII© Confederation of Indian Industry Foreign Investment Inflows Improved after FDI Reforms 34.3 36.0 45.1 55.6 60.2 61.0 27.6 5.0 40.9-4.0 7.6 22.1 FY13 FY14 FY15 FY16

© Confederation of Indian Industry

Introduction CII

Confederation of Indian Industry ( CII), The Apex Chamber ofcommerce, CII charts change by working closely with Governmenton policy issues, interfacing with thought leaders, and enhancingefficiency, competitiveness and business opportunities for industrythrough a range of specialized services and strategic globallinkages. It also provides a platform for consensus-building andnetworking on key issues.

CII has extensive experience in organizing and enabling Trade Fairsand product / service exhibitions and can provide necessary hostingsupport and marketing of such events through various informationdissemination channels.


Advantage India

• Fast growing economy • Stable Government • Government focus on “Make in India” and “Ease of doing

business”• Tax reforms and focus on good Governance • Rapidly growing industrial and logistics infrastructure

(ports, rail, road and air)• Skilled labor and talent • World’s largest young population • Buoyancy in local demand


India: A Large Middle Income Economy

India’s nominal GDP is about $2.6 trillion in 2017

India’s GDP is has surpassed France to become the sixth largest economy.

India has doubled its per capita income in the last ten years (2006 to 2016)

In purchasing power parity terms, India is the 3rd largest economy

23.2

19.4

9.5

5.44.2 4.0 3.2 3.2 2.9 2.8 2.5 2.3 2.2 2.0

Chin

aU

S

India

Japan

Germ

any

Russ

ia

Indonesi

a

Bra

zil

UK

France

Mexi

coItaly

Turkey

Kore

a

GDP at purchasing power parity, 2017

(Trillion US$)

59

50

1

50

42

5

44

11

8

43

76

1

42

83

2

27

83

4

16

66

0

15

60

3

13

54

5

71

83

US

Ge

rma

ny

UK

Fra

nce

Jap

an

Ru

ssi

a

Ch

ina

Bra

zil

So

uth

Afr

ica

Ind

ia

GDP Per Capita at PPP, 2017 (US$)

Source: IMF WEO April 2018 database


India’s Trade in Services..

Source: Ministry of Commerce and Industry, RBI

14

5.7

15

1.8

15

8.1

15

4.3

16

4.2 1

95

.1

80

.8

78

.7

81

.6

84

.6 95

.9 11

7.5

226.4 230.6239.7 238.9

260.1

312.6

0.0

50.0

100.0

150.0

200.0

250.0

300.0

350.0

FY2013 FY2014 FY2015 FY2016 FY2017 FY2018

Foreign services trade – Exports and Imports (USD Billion)

Exports Imports Total Trade

Software

Services, 40%

Business Services, 19%

Travel, 14%

Transport, 9%

Financial

Services, 3%

Insurance, 1%

Construction, 1% Others, 13%

Exports of services, 2017-18

Software Services, 4%

Business Services,

31%

Travel, 17%Transport, 15%

Financial Services,

5%

Insurance, 2%

Construction, 1%

Others, 25%

Imports of Services, 2017-18


Foreign Investment Inflows Improved after FDI Reforms

34.3 36.0

45.1

55.660.2 61.0

27.6

5.0

40.9

-4.0

7.6

22.1

FY13

FY14

FY15

FY16

FY17

FY18

Foreign Investments- FDI and FPI(USD Billion)

Foreign Direct Investment

Foreign Portfolio Investment

• The government has increased FDI limits in sectors like Defence, railways, insurance, construction, pharmaceuticals and medical devices.

Increased FDI Limits

• Sourcing norms have been relaxed for companies engaging in single brand retail trade of products having cutting edge and state-of-the-art technology.

Eased sourcing norms

• Investment in most sectors is under the automatic route, except a small negative list, making India one of the most open economies in the world for FDI.

Automatic approval for most sectors


• IETF – CII’s Flagship event held every alternate yearsince 1975 at New Delhi, India

• First Business Show in India by CII• Initially held with engineering as major focus• Attracted overseas Participation = 1983 onwards• Partner Country Concept = 1985• Groomed as the comprehensive International B2B show • Covers wide range of industry sectors as focused shows• Large overseas participation• Presence of decision makers from Government & Industry• Concurrent Events – Summits/Seminars/Networking gatherings• Special programme by Partner Country (Exclusive Partner Country Day)

IETF – the B2B Technology Event


Meeting Place for a Better Market Access

MANUFACTURING

SERVICESINNOVATION &

FUTURE TECHNOLOGIES

START UP

GOVERNMENT & POLICY

MAKERSINDUSTRY/TRADE

BODIES

IETF



IETF 2019 SHOWS:1. GREEN MOBILITY XPO2. INDIA POLLUTION PREVENTION EXPO3. IIARE-2019 2ND INDIA INDUSTRIAL AUTOMATION AND ROBOTICS EXPO4. THE LOGISTICS EVENT OF INDIA-LOGISTICS5. METAL & METALLURGY-20196. REAL ESTATE & BUILDING TECHNOLOGY

CONCURRENT SHOWS:1. AI-INDIA EXPO-2019 (INDIA’S MEGA ARTIFICAL INTELLIGENCE SHOW)2. INDIA GAMING SHOW-20193. KNOWLEDGEXPO-20194. HEALTHTECH INDIA-2019

IETF-201923RD INTERNATIONAL ENGINEERING & TECHNOLOGY FAIR


Industry Perspective onIndia’s Logistics, Material

Flow, Supply Chain


Recent Developments in Logistics Sector• 2018

• Logistics Department was established under Ministry of Commerce and Industry to oversee development of National logistics policy

• Infrastructure status granted for elements of Logistics such as warehouses, Cold Chains, Logistics Parks etc.,

• Logistics Ease Across Different States index was published • GST and e way bill were implemented • Initiated integrated logistics portal development with a vision to

create transactional marketplace • Sustained skill development initiatives through Logistics Sector

Skill Council


Logistics Development in India

• Estimates indicate that Indian logistics sector has grown at ~1-1.5x India’s GDP growth and will continue growing

• India’s World Bank Logistics Performance Index (LPI) indicates that India moved up from LPI rank 54 in 2014 to 35 in 2016.


Logistics Sector & Employment

• Logistics sector is considered to be among the top 5 employers in the nation

• The Indian logistics industry provides employment to more than 22 million people


Transportation…

Warehousing25%

Freight Forwardi

ng10%

Distribution5% The country's logistics industry

which is worth around USD 160billion is likely to touch USD 215billion in the next two years withthe implementation of GST. It isestimated at a CAGR of 10.5%.

Logistics Market Segments


Warehousing Market Agricultural

WarehousingIndustrial

Warehousing

For storage of Rice, Wheat, Fruits, Vegetables, Cotton etc.

For storage of Cement, POL, Fertilizer, FMCG, Auto components etc.

Cold Storage Bulk Storage Public/PrivateWarehouse

CFS/ICS

Warehousing market is expected to grow at CAGR 10% till 2020 in India


8 Top Warehousing Hubs


Warehouse Growth

Increasing need for mechanization and automation


Warehousing Investments• Sectors like Agriculture and Food Supply Chain will seea dramatic shift going forward– More than USD 33 billion need to be invested in thissector to set up warehousing.

• Warehousing growth will be supported by growth ine-Commerce and logistics parks and the rising demandfor modern warehouses.

• Post GST, manufacturers are likely to consolidatewarehouses to improve efficiency.


Key Players in MHE Market • Action Construction Equipment• BEML

• Bevcon Wayors• Demag Cranes & Components

(India)

• Elecon Engineering Company• Escorts Construction Equipment

• Godrej & Boyce Manufacturing Company

• JCB India• ElectroMech Material Handling

Systems (India)• McNally Bharat Engineering

Company• Saico Group• Tata Hitachi Construction

Machinery Company• ThyssenKrupp Industries India• Tractors India• Voltas Material Handling

(KION).


Golden Quadrilateral (NHAI)• Connecting Chennai,

Kolkata, Delhi &

Mumbai

• Encouragement to

truck transport

• Faster transport

• Industrial and job

development

• Reduce logistics

wastage


The ambitious highwaysdevelopment projectsubsuming all road projectsin the first phase will see theconstruction of 20,000 km ofhighways

Bharat Mala


The Growing Indian Maritime Sector

Seaborne trade has grown at twice the

global growth rate of 3.3%

Cargo traffic at Indian ports has doubled to 1

billion tonnes per annum from FY 2005 - 2015

Container trade has grown at 6.5% - higher than world average of

5.4%

USD 2.6 Bn invested in Ports and Shipping

sector between 2011 and 2014

150 + projects for investment identified in Indian maritime sector

Opportunities for investment of USD 19 Billion in Inland Waterway development and USD 50 Billion in Port-led

Development under ‘Sagarmala’Source: Maritime summit 2016


Inland Waterways

• Reduce logistics cost of inland transport, relieve congestion on roads and railways

• Support manufacturing activities in hinterland states

• 4 waterways currently under development: Ganga, Brahmaputra, Mahanadi, Buckingham Canal

• NW1 already in use for coal transport from Haldia to Farakka


The Opportunity

• Cost for coastal shipping is US 0.3 centsper tonne km compared to US 2.3 centsfor railways and US 3.8 cents for road

• Coal, cement, POL, food grains, steel andfertilizers are the key commodities withsignificant growth potential

• Potential to lower logistics cost in theeconomy by USD 33 bn – USD 42 bn by2025

• Coastal shipping can be a catalyst forcoastal industrial clusters

Coastal Shipping


Prominent Ports of India


SagarmalaPort Led Development − Undertake development ofCoastal Economic Zones with projects like- port basedindustrialization, coastal tourism, Logistics parks,warehousing, fisheries etc.

Port Infrastructure Enhancement − Action points ontransforming existing ports into world class ports bydeveloping deep drafts, mechanization of existing berths,creation of new capacity & greenfield ports

Efficient Evacuation − Expansion of rail / road network /inland waterways connected to ports & identification ofcongested routes − Find optimized transport solution forbulk and container cargo


Sagarmala Vision

Reduction of logistics cost for EXIM & domestic

trade with minimal infrastructure

investment

Lowering logistics cost of bulk commodities by locating

future industrial capacities near the coast

Reducing the cost of transporting domestic

cargo through optimizing modal mix

Optimizing time/cost of EXIM container

movement

Improving export competitiveness by developing

port proximate discrete manufacturing clusters


• Mega project worth USD 12 bn• Will decrease unit cost of freight,currently at 2-3x that of developedcountries

• Separation of passenger and freighttraffic to result in higher speeds (75km/ hour) and improve efficiency(cut travel time by 66%)

• Expected commissioning• Dec 2017 to Dec 2019excluding PPP stretch

Dedicated Freight Corridors (Railways)


Elements of Logistic Cost in India

Inventories, 25%

Transportation, 35%

Losses, 14%

Packaging, 11%

Customer Shopping, 6%

Handling & Warehousing, 9%

Minimizing Losses

Effective Planning of WH positioning

Reducing transportation cost

Effective inventory management

•Efficient storage facilities - warehouses•Unbroken Cold chain

• Locating warehouse in optimal locations keeping in mind both supply and distribution networks.

• Efficient transportation fleet• Shifting to cost efficient transportation mode

• Extensive use of RFID Tagging• Professional Management of inventory

Optimization might be achieved by:

Optimization of Logistics Cost


Transport Modal Mix (%)

Source: CII & CARE


3PL Growth Estimates

The Indian manufacturing sector spends 2-20%of its revenue on logistics

About 40 % of the logistics activities outsourced currently


MMLP – Multi Modal Logistics Park

Key Benefits • Transportation cost

reduction

• Pollution reduction

• Congestion

reduction

• Warehousing cost

reduction


Agri and Cold Chains

• Food processing industry, is largest industry sector in the country – Estimated worth of USD 121 billion

• Market structure – Organized segment (25%)– Small scale segment (33%) – Unorganized segment (42%) - contributes to 32% of

the country’s total food processing market


Cold Chain Requirement & Gap

Source: All India Cold-chain Infrastructure Capacity Assessment of Status & Gap, 2015, NCCD


Govt. Support (Cold Chains)• Financial assistance of 35% to 50% of admissible cost of projects • Low interest loan from warehousing infrastructure fund (NABARD)• 100% FDI through the automatic approval route, and ECB route

open• Credit linked Subsidy to projects @ 35% to 50% of admissible costs

(MIDH)• Rewards of endless Demand, Smart-Bridge between rural & urban,

reduce Food loss• Growing market for Fresh Fruits and Vegetables, domestic and

international• Option to avail of Negotiable Warehousing Receipts as per WDRA

norms• Investment Linked 150% Tax Deduction (Section 35-AD of IT Act)


DP World pledged USD 1 Billion, this will be in addition to existing USD 1 Billion to tap opportunities in infrastructure space in India

Few PE investments (2016-17)

Ecommerce and Packaging opportunity

Ecommerce retail logistics • Ecommerce industry is expected to

cross $100 billion mark by 2020

• Ecommerce retail logistics is estimated to be USD 1.35 billion market

• 36% CAGR (5 years)

• 1.9 million shipments a day

• Market share– Captive logistics arms: 49%– Traditional LSPs: 23%– Ecommerce retail focused LSPs:

28%

Packaging• India is considered world’s 4th largest

packaging industry

• USD 24.6 billion revenues and a growth rate of 13% to 15% annually. Expected to reach USD 32 billion by 2020

• The growing organized retail sector has been a significant driver of the growth of the Food & Beverage industries, which in turn drives the growth of Indian packaging industry (flexible packaging).

• In terms of packaging material, Glass and Rigid Plastics will be among the major share gainers, with share growth of 0.7% and 0.6% respectively during 2016-2021

Source: CII – KPMG report, 2018 Source: Research and Markets


Indo Japan RelationsAdministrative Relations

Diplomatic ties between Japan and India were established in April 1952

when the peace treaty was signed between the two countries post World

War-II.

The 60th anniversary of the signing of the Cultural agreement between

the two nations was celebrated in 2017.

Japan announced its Country Assistance Policy in 2016,

Providing Official Development Assistance(ODA)to build India’s Critical

Infrastructure and address social and environmental issues resulting from

rapid growth.

Special strategic and Global Partnership between the two countries aim

to build a deep and broad-based collaboration in areas like defence,

power, biotechnology and security and connectivity in the Indo-Pacific

region.


Opportunities for Joint Initiatives with CII • Establishment of Logistics Academies to promote

nationwide ‘logistics literacy’

• Establishment of ‘Indo-Japan Supply Chain Centre of Excellences” in industrial corridors§ Delhi Mumbai Industrial Corridor Project

§ Chennai Bangalore Industrial Corridor§ Mumbai-Bangalore economic corridor

• Drive logistics standards (equipment, services and facilities) to promote competitiveness in foreign trade


THANK YOU

Documents

Introduction CII© Confederation of Indian Industry Foreign Investment Inflows Improved after FDI Reforms 34.3 36.0 45.1 55.6 60.2 61.0 27.6 5.0 40.9-4.0 7.6 22.1 FY13 FY14 FY15 FY16