Make in IndiaA Doorway to Business Opportunities

R.Kuppanna, General Manager, Kuwait India Int’l Exchange Co.

Customers’ Trust – Kuwait India’s Pre-eminence

Make in IndiaImproving Fundamentals

India - - world’s fastest growing major economy in 2015(7.3% growth in 2015; IMF)Third largest economy (PPP) in the world after USA & ChinaInflation under control (2Q 2015: CPI 5.1%; WPI -2.4%)Monetary Policy Easing (Repo reduced thrice in 2015; from 8.0 to 7.8 to 7.5 to 7.3)Current Account Deficit (CAD) contained (2Q 2015: CAD/GDP 1.2%)Rise in Foreign Exchange (2Q 2015: US$355b)Youngest country in the world by 2020 (median age 29)475 million middle class Indians by 203032% of investors ranked India as the most attractive investment destination, while 60% placed the country among the top three investment destinations (2015 survey by E & Y)India emerged as the # 1 FDI destination in the world during the first half of 2015 (inflows of US$30.8b)

Customers’ Trust – Kuwait India’s Pre-eminence

Make in IndiaFundamentals

Customers’ Trust – Kuwait India’s Pre-eminence

Make in IndiaFundamentals

Customers’ Trust – Kuwait India’s Pre-eminence

Make in IndiaExchange Risk – A View

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Customers’ Trust – Kuwait India’s Pre-eminence

Make in IndiaA Game Changer

Flagship program of GOI to make India a global manufacturing hub

Aims to:Promote the manufacturing of low-cost, eco-friendly and zero-defect productsFoster innovation, enhance skill development & protect intellectual propertyBuild best-in-class manufacturing infrastructure

Initiatives taken:A new trade policy (some taxes abolished, incentives for EOUs and EPZs)New labor laws (single-window compliance, simpler PF/inspection procedures)Ease of doing business: licenses/environmental approvals onlineImprovement in management of natural resources (bauxite, coal, iron ore etc.)Focus on skill development (Skill India Initiative): 500 million to be trained by 2020 for greater employability in manufacturing sector.

Customers’ Trust – Kuwait India’s Pre-eminence

Make in IndiaE&Y Survey

Customers’ Trust – Kuwait India’s Pre-eminence

Make in India FDI in India: V-shaped Recovery

Two-year decline in FDI inflows reversed in 2014No. of Projects up 37% ( 496 in 2013; 680 in 2014)FDI Capital (US $ b) up 32% ( 18.9 in 2013; 25 in 2014)62% rise in FDI capital into Manufacturing22% of FDI capital from US-based firmsJobs created by FDI (thousands) up 39% (104 in 2013; 145 in 2014)Investor confidence up- - economic growth & investor-friendly movesIn 1H 2015: 338 FDI projects, investments US$30.8 b(235% increase y-o-y), jobs created up 37% y-o-y; of this, manufacturing activity US$24.8b(221% growth y-o-y)Top Sources: US, China, UKTop FDI destinations: Bengaluru, Mumbai, Delhi NCR, Hyderabad, Pune, Chennai

Customers’ Trust – Kuwait India’s Pre-eminence

Make in IndiaSurge in Manufacturing

Customers’ Trust – Kuwait India’s Pre-eminence

KEY COMMITMENTS

AustraliaFive agreements in place, including a civil nuclear deal to selluranium to India

Canada

US$1.4b committed by Canadian and Indian companies16 commercial agreements signed in defense, energy, miningand infrastructure

China

Plans to invest over US$20b in India’s infrastructure overthe next five years

JAPANUS$35b in Indian infrastructure projectsUS$4.5b in Delhi Mumbai Industrial Corridor

South KoreaPlans to invest US$10b in India for infrastructure-related projects

UAEPartnership in major areas such as trade, investment, defense,security, maritime security and intelligence sharingPropose to invest US$75b in India

USBilateral trade of US$100b expected from bilateralinvestment treatyUS$42b over the next two to three yearsSource: Government of India website

Bombardier has achieved a high level of localization at both itsSavli and Maneja plants, in line with the Make in India program.Savli facility to be hub for exports to Australia, Brazil andSaudi Arabia. US$228m contract for the Delhi Metro, won in June 2015,Being executed from the Savli facility.

Cummins currently houses eight plants at the CumminsMegasite in Phaltan, Maharastra, including a manufacturingplant for engines opened in 2014. The company isalso setting up its largest ever technical center in Kothrud inPune, Maharashtra.

Foxconn intends to establish 10 to 12 facilities in India,including factories and data centers, by 2020. In August 2015,it pledged to invest US$5b in Maharashtra to set up anelectronics manufacturing plant and an R&D center, expectedto create 50,000 jobs. Manufacturing agreements with a number of technologymega players to invest US$20b in solar projects.

General Motors (GM) announced in July 2015 that it willinvest US$1b in India as part of a move to strengthen itsbusiness in global growth markets, aiming to double itsmarket share in India by 2020. The new investment is expectedto create approximately 12,000 new jobs

Very recently KIA has invested US$300m in GMR Infrastructure viaa 60-year-long (due 2075) FCCB

Make in IndiaInvestments Made - Examples

Customers’ Trust – Kuwait India’s Pre-eminence

Investment, Administrative and Tax-related reforms and a simplification of approval processes (Fast track clearance of stalled projects; infrastructure projects; plans for 100 Smart Cities, Digital India; Schemes for Financial Inclusion; Reduction in Corporate Tax, over four years, from 30% to 25%, Favourable tax regime for REITs and AFIs, Deferment of GAARs)

Some Major Reforms:

Construction: 100% FDI under automatic route; exit rules relaxed (3-year lock-in removed) Defense: Up to 49% (from 26%) subject to government approval Lock-in of 3 years for equity transfer removed Equity greater than 49% for ‘state of the art technology’Insurance: Foreign ownership up from 26% to 49%Railways: 100% ownership under ‘automatic route’ for - - >High-speed train projects & dedicated freight lines > Rolling stocks, locomotives or coaches manufacturing

Make in IndiaReforms Aiding Business Sentiments

Customers’ Trust – Kuwait India’s Pre-eminence

Make in India

Customers’ Trust – Kuwait India’s Pre-eminence

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