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2ND ANNUAL U.S.-INDIA BUSINESS OPPORTUNITIES SUMMIT

Friday 24 September, 2010

The Chicago Council on Global Affairs hosted this event 2ND ANNUAL U.S.-INDIA BUSINESS OPPORTUNITIES SUMMIT, which featured an interesting array of speakers & companies visiting from India. I’ll hit the highlights here.

Marshall Bouton led off by noting that President Barack Obama named the US-India relationship the defining relationship of the 21st century & he will visit there in November.  50 Illinois companies operate in India while 15 Indian companies work in Illinois.  Illinois exported $1B to India in 2009.

Meera Shankar, Ambassador of India to the US, summed up the Indian economy.  India’s economy grew 9% annually before the crisis,  6.7% in 2008, & is expected to grow 8.5% this year.  Foreign investment is still robust @ $34B & $20B foreign institutional investment.  While trade with the US dropped in 2009, it’s up 33% this year.  Growth has come from all sectors, not just services.  Indian companies are moving up the value chain.  Booz Allen Hamilton noted that 10 of the top engineering services companies were Indian. India is also different from other emerging economies in that their growth is not export-led, rather by expansion of domestic demand & investment.  Infrastructure is a priority.

Hari Bhartia, President of Confederation of Indian Industry spoke to the opportunities with & for MSE’s (medium sized enterprises).  They employ 15% of the workforce & comprise 80% of the formal economy.  1 challenge is 40% of the population lives below the poverty line, so they must train their youth.  20M enter the job force every year, so 10% growth is needed.  He noted India is investing faster in India than the US is investing in India.

Panel discussions

Dr. Rahul Khullar, Commerce Secretary, Ministry of Commerce & Industry of India explained India’s growth, which was fueled by imports as exports from western countries grew 25-30%/year.  Reforms dropped tariffs from 100% to 5-10%.  Depending on consumption demand, growth will be $40-80B annually based on a $1.6TR economy in 2014-15.  1% growth in the US results in $50B increase in consumption demand.  At its upper end, India will beat that.  India exports $200B & imports $330B worth of goods.  Opportunities lie in collaboration on R&D, clean energy, agriculture, markets, & infrastructure. 2 Korean companies entered the market 20 years ago & are now household names.  Ignore this market at your own peril.

Manufacturing

  • Rik Geiersbach, VP-Corporate Strategy @ Boeing  let us know they helped India enter the jet age 60 years ago.  In 2006 Air India placed the largest order ever.  India is seeking to reach the moon by the end of this decade.
  • Deep Kapuria, Chairman Hi-Tech Gears, Ltd talked about manufacturing in India.  It comprises only 15% of India’s GDP & employs 12% of the workforce.  Their aspiration is for manufacturing to become 25% of GDP by 2022, (when India turns 75 years old).  Automobiles are growing @ 20% & 12M cell phones were sold last month.  India has $300M in manufacturing assets, but needs investment in 3-4X that.  Indian state governments are receptive to offering incentives for foreign MSE manufacturers to set up shop.

Innovation

  • Dr. Pravinray Gandhi, Director of Global Corporate Research @ Underwriters Laboratories said UL was founded in 1892 @ the Columbian World’s Fair to create international standards.  They’ve been in India for 15 years.
  • Anpama Arya, Co-founder of Mobera Systems lived in the US for 14 years & moved back to India to do contract research & development.  She proposed that India has moved from a cost arbitrage location to innovation center.  Their telecom industry has figured out how to make a profit with an RPU (revenue per user) of $8, so her lesson was don’t settle for American price points.  Although collaboration is difficult, a middle class of 350M is hungry for products.  The legal system which protects intellectual property is slow, but it works.

Keynote Anand Sharma, Minister of Commerce & Industry of India said India needs higher growth rates & the IMF is revising them upwards.  India will be implementing $1.7TR of infrastructure in the next decade.  They are setting up 10,000 skills training centers to invest in their human resources because India will need 500M skilled workers by 2020.  US investment in India has dropped from $1.9TR in 2008 to $1TR in 2009 as its 2nd favorite destination for foreign direct investment, but supposedly returns in India are highest.  India is an ancient population, but 2/3 of its population is young.  In the next decade, India’s GDP will quadruple.

Here are the firms visiting from India

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