ANALYSIS OF FOREIGN MARKET CONDITIONS OF FEW PRODUCTS

Part of a nation's internal market, representing the mechanisms for issuing and trading securities of entities domiciled outside that nation. Compare external market and domestic market.

FOREIGN MARKET

HERBAL PRODUCTS IN FOREIGN MARKET

Traditional systems of medicine have recognized and used over 7500 species of medicinal plants out of which Ayurveda uses about 1769 species.

Export of our valuable resources to foreign countries, particularly the western countries, is supposed to be a major means through which globalization or the global trend can affect us.

On the other hand, there are other means also for exercising control over our resources by the western corporate sector. It may so happen that some of our own resources lose importance in the market by some propaganda against their efficacy.

Similarly, it may also happen that we ignore our resources and give priority to those from outside but promoted by market forces. Hence, the adverse impact may either cause overexploitation, or under exploitation.

Ginseng and Viagra, drugs(crude/synthetic) from other countries, seem to have accelerated the marketing of aswagandha and safed musli; and the local equivalent satavari remained ignored under this fog of glamorous marketing, for several years in Orissa.

Medicinal raw materials are exported from India under two categories: specified and unspecified.

In 1947 the Indian herbal industries had an annual turnover of over 50 crores which has increased to about 4200 crores in 2004. Out of 4200 crores, 880 crores i.e., 20.95% come from export (Darshan Sankar in ICMHHP) and hence about 79% of the turnover is confined to the domestic market.

The domestic market being the largest consumer of Indian herbs, the status of top 20 herbs in demand seems to reflect basically the increasing trend in the demand/production of traditional products or products based on traditional formulations. For instance, amla is the key ingredient in chyavanprash and several other important formulations. Similarly, the demand of satavari is not of recent origin

Demand status verses growth rate of select Indian medicinal plant products by 2004-05

Indian herbal market is registering an extremely significant growth and is likely to reach Rs.14,500 crore (Rs 145,000 million) by 2012 and exports to Rs.9,000 crore (Rs 90,000 million) with a CAGR of 20% and 25% respectively, according to findings of the Associated Chambers of Commerce and Industry of India (Assocham).

In a Chamber Study on `Herbal Industry Biz Potential' has revealed that currently, the Indian herbal market size is estimated at Rs.7000 crore (Rs 70000 mn) and over Rs.3600 crore (Rs 36000 mn ) of herbal raw materials and medicines are exported by India.

The study also revealed that out of 700 plant species commonly used in India, only 20% were earlier being cultivated on commercial scale and 90% of medicinal plant used by the industries are collected from the wild.

SOFTWARE PACKAGES IN FOREIGN MARKETS

In a global economy fraught with the difficulties of recession, Thai software companies are continuing to expand their export markets.

Local companies have successfully entered two markets - Japan and the Philippines - this year and in 2010 their sights will be set on Indonesia and Turkey. Their strategy, planned by the association and called "global niche cluster", groups software companies and some of their leading products into industry-based clusters, so that comprehensive packages can be offered to overseas industries.

Even though the Thai software industry has been established for decades, a tangible presence in overseas markets has been established only over the past few years, under TSEP's brand.

Association president Chalermpon Punnotok said TSEP aimed to become a regional player in the global software market, as a brand offering Thai software clusters. After two years of operations, it has succeeded in exporting Thai software to three markets: Vietnam, Japan, and the Philippines. From these markets it is now earning Bt400 million per year.

India's software and services exports are seen rising 16-18% in the year to March 2012, an industry body said on Wednesday, as demand for outsourcing services by Western clients is expected to remain strong.

The National Association of Software & Services Cos (NASSCOM) forecast export revenue of USD 68 billion to USD 70 billion for India's showpiece outsourcing sector in fiscal 2012.

India's IT sector, whose clients include General Electric and Citigroup, would see export revenue rise 18.7% to USD 59 billion in fiscal 2011, NASSCOM said.It had estimated export revenue of USD 56- USD 57 billion last February.

"Pent-up demand for IT-BPO services, return of discretionary spending, new business models that encouraged first time buyers, and re-invented value proposition for existing ones, were the key drivers for the industry performance," Som Mittal, president of NASSCOM said in a statement.

Last month, India's top two software services exporters Tata Consultancy Services and Infosys Technologies said business remains good in 2011 but were worried Europe's debt crisis and rising domestic inflation could weigh on growth.

A straightforward application of this model may seem to explain the recent rise of the Indian software industry. Simply put, the Indian government has devoted many resources to university technical education which produced a large amount of technical talent.

This drove down the equilibrium wage in India, and foreign companies took advantage of this differential to increase profits. Although this may explain the industry on a superficial level, it does not help us understand deeper questions regarding the evolution of the industry.

We still need to examine how the current industry structure evolved and why some companies grew and gained large degrees of market power while others did not. To understand these questions, one must explicitly reexamine thefundamental assumptions of these models.

These traditional economic models assume zero transaction costs when trading internationally. However, transaction costs seem to play a large role in the success of firms in the industry. These costs involve asymmetric information between the foreign customers and the Indian firms. Asymmetric information

AUTO COMPONENTS MARKET IN FOREIGN COUNTRIES

The Indian auto component industry is expected to reach a turnover worth US$ 113 billion by 2020-21 from US$ 43.4 billion in 2011-12, according to a Automotive Component Manufactures Association (ACMA) report titled, 'Auto Component Industry in India: Growing Capabilities & Strengths'.

The exports from the industry are expected to grow at a compound annual growth rate (CAGR) of 17 per cent during 2012-21, the ACMA report highlighted.

India has emerged as one of the world's most competitive tyre markets due to vast availability of raw material (natural rubber) and ultramodern production facilities. The radial tyre market is expected to reach Rs 393 billion (US$ 7.33 billion) by FY 2015 growing at a CAGR of more than 21 per cent during FY 2011-FY 2015.

The automotive plants of global automakers in India rank among the top across the world in terms of their productivity and quality. Top auto multinational companies (MNCs) like Hyundai, Toyota and Suzuki rank their Indian production facilities right on top of their global pecking order.

The Indian automobile and auto components industry can be expected to surpass China's growth path by 2021, according to a research report by Espirito Santo Securities.

Market Structure

The tyre production in India is anticipated to reach 191 million units by the end of FY 2016, according to a RNCOS research report titled, 'Indian Tyre Industry Forecast to 2015'. The manufacturers are expected to invest huge amount into the industry over the next few years, with a major proportion of this investment directed towards the radial tyre capacity expansion.

In addition, with a significant increase in the number of CNG vehicles, the CNG vehicle market is witnessing a strong growth pattern. According to a RNCOS report titled, "India CNG Vehicle Market Analysis", the CNG kit market is expected to reach around INR 30 Billion in FY 2014, growing at a CAGR of around 22 per cent during FY 2011-2014.

India: The Global Auto Hub

The amount of cumulative foreign direct investment (FDI) inflow into the automobile industry during April 2000 to January 2013 was worth US$ 8,061 million, accounting to 4 per cent of the total FDI inflows (in terms of US$), as per data published by Department of Industrial Policy and Promotion (DIPP), Ministry of Commerce.

A delegation of Japanese auto component companies visited Tamil Nadu (TN) to explore investment opportunities and scout for partnerships with Indian auto component makers. The State houses over 300 Japanese companies and these tier 1 companies would need support from tier 2 component makers and other micro, small and medium enterprise (MSME) suppliers.

Apollo Tyres plans to expand its reach in Association for South East Asian Nations (ASEAN). The company will set up a subsidiary to explore market opportunities in the region.

Honda Cars India Ltd (HCIL) plans to export diesel engine components to Asian and European markets from India.

Key Developments and Investments

Supportive government policies, positive business environment, availability of reasonably priced talented workforce and stable outlook for the industry has made India a global hub for the international manufacturers to set up their facilities in the country. The auto components manufacturers are also reaping the benefits.

• Federal-Mogul has announced the launch of Ferodo commercial-vehicle (CV) brake lining in the Indian market. The product is being manufactured at the company's spanking new plant in Chennai

• Alten will set up an automotive testing facility at its labs in Chennai, Tamil Nadu. The facility will help automobile manufacturers in and around Chennai to outsource testing of components such as diesel engines and suspension system

• Toyota Kirloskar Auto Parts has commenced production at a new engine and transmission plant for the Etios range of sedans and hatchback cars in India. Production at the new plant involves an investment of about Rs 500 crore (US$ 92.59 million)

Government Initiatives

The Government of India plans to introduce fuel-efficiency ratings for automobiles to encourage sale of cars that consume less petrol or diesel, as per Mr Veerappa Moily, Union Minister for Petroleum and Natural Gas.

The Government's electric vehicle (EV) policy calls for a plan worth Rs 23,000 crore (US$ 4.26 billion), to promote the production of electric and hybrid vehicles over the next eight years, and set a sales target of 6 million units by 2020.

In a bid to improve safety features of vehicles, the Government has asked automobile manufacturers to develop a gadget which would be similar to the 'black box' installed in planes. The owner would not be able to turn the instrument off or on and the snapshot could be viewed by legal bodies, insurance companies and automakers.

Moreover, Mr C P Joshi, Minister of Road Transport and Highways, Government of India, has also asked manufacturers to contemplate on the option of fixing such IT-enabled instrument to improve safety and security of the vehicles.