India
Country Report
OVERVIEW Courtry and Captal: Full namme: Republic of India
Capitalk city: New Delhi
Government:
Type: Democracy Head of state President: Pranab Mukherjee Head of government Prime: Minister Narendra Modi
Location: India is located at Southern Asia, bordering the Arabian Sea and the Bay of Bengal, between Burma and Pakistan.
Coutry Size:
3.287 million square kilometers Country comparison to the world: 7
Population:
1,251,695,584 (July 2015 est.) Country comparison to the world: 2
Language:
Source from CIA- The World Factbook
Hindi 41%, Bengali 8.1%, Telugu 7.2%, Marathi 7%, Tamil 5.9%, Urdu 5%, Gujarati 4.5%, Kannada 3.7%, Malayalam 3.2%, Oriya 3.2%, Punjabi 2.8%, Assamese 1.3%, Maithili 1.2%, other 5.9% English enjoys the status of subsidiary official language but is the most important language for national, political, and commercial communication.
Ethnic composition (2000 data): Indo-Aryan (72%), Dravidian (25%), Mongol and other (3%
Religions: Source from CIA- The World Factbook
Hindu 79.8%, Muslim 14.2%, Christian 2.3%, Sikh 1.7%, other and unspecified 2% (2011 est.)
Level of Education: A large welle-ducated and English-speaking population has made India the foremost hub for IT and ITes. Education Expenditrures: 3.8% of GDP (2012) Country comparison to the world: 134
COUNTRY STABILITY Political Status of Country India is the largest democratic nation in the work and principle of democracy are deeply entrenched in the Indian political system. India also is high rank in voice and accountability in the world, which is in the 61. 14% in 2013 based on the World Bank’s Worldwide Governance Indicators. At aspect of the foreign policy, India builds a great relationship to the Western Europe, the United States and Canada by signed number of agreements. According to the report of India, In depth PESTLE insights 2015, the US president has backed the idea of India’s permanent membership in the United Nations Security Council, which underscores India’s strong bilateral ties with the US. At same time, India is also working on free-trade agreements with Canada and the EU to liberalize trade further and reinforce its good relations of cooperation between two countries. India is also seeking to develop strong relationships with the South East Asian countries and oil-rich Gulf Cooperation Council nations to gain the trade advantage. The relationship with its neighbor countries remain volatile and terrorism continues to be a high tense problems in India. The first unsteady factor is the terrorism threat that is posed by religious extremist groups, violence by Naxalites, and insurgent activities in the northeast dominate Indian security concerns. India faces terrorist threats both internally and externally. For example, Islamic terror groups gains supported from Pakistan’s Directorate for Inter- Services Intelligence that would help them expanded their network across the country. They often bomb attacks in the in the states of Maharashtra, Uttar Pradesh, and Andhra Pradesh . The second is India lacking a comprehensive peace deal with Pakistan. India had stained reactions with Pakistan about the disputed region of Kashmir since the 1947 partition. For the future, the government trying to working on these aspects, includes building a strong and stable government, better relations with its smaller immediate neighbors, stronger relations with Japan and China, and improved accountability of government. These policy will be led by Prime Minister Narendra Modi. He has been very pro- active in building foreign relations with immediate neighbors since mid-2014. Mr. Modi also visits both Nepal and Bhutan, to try build better relationship with them by signed assistance projects and announced measures related to trade and education. In the aspect of corruption, the government mandatory for candidates to disclose their wealth and sources income to try to avoid the action of corruption.
Technology
India has made significant progress in the technology sector, includes telecom, IT, and IT-enabled services sectors, and the country has received global recognition in these areas. India also established a strong globe reputation in the biotech sector. The country is also witnessing rapid growth in areas such as data mining, modeling, and market and equity research. Strong English language skills and cost advantage gives a competitive edge in areas such as process outsourcing and business process outsourcing. For the future, India offers several advantages for biotechnology research. The country has the largest number of US Food and Drug Administration-approved manufacturing plants in the world.
Society
India is the second most populous nation in the world, but it still to perform poorly on several social indicators. Growing proportion of young people, 65.70% of the population was estimated to be in the working-age group of 15-64, which results in a low number of dependents on the working-population. Launched the Mahatma Gandhi National Rural Employment Guarantee Scheme by the government to tackle the problem of unemployment in rural areas. Rising polulation and low expendicture on healthcare cause severe problems in India’s healthcare system. Moreover, India’s HDI rank is lower than many poor African nations. India placed 135th out of 187 countries in terms of human development as per the UNDP’s Human Development Report 2014. The reason of low HDI rank is that India lack attention in poor development in social infrastructure in area of health and education. There are several unstable factors comes from the communist rebellion organization, the Naxral. Naxalite movement’s violent activities included the sabotage of government installations such as schools, gram panchromatic buildings, telecommunication towers and railway tracks, as well as attacks on police and politicians. For the future, the government launched the Jan Dhan Yojana (Scheme for People’s Wealth) as a part of its ambitious financial inclusion program in 2014, and purpose of the scheme is uplift the poor by bringing them into the financial mainstream, and giving them freedom from the controls of usurious moneylenders. Raising life expectancy and falling infant mortality is another aspect that the government working on.
Economy India is developing into an open-market economy, yet traces of its past autarkic policies remain. Economic liberalization measures, including industrial deregulation, privatization of state-owned enterprises, and reduced controls on foreign trade and investment. India also is the world’s second most populous country and one of the fastest growing economies. India’s economic growth began slowing in 2011 because of a decline in investment caused by high interest rates, rising inflation, and investor pessimism about the government’s commitment to further economic reforms and about the global situation. The country registered a GDP of $5.07 trillion in 2013 following a further improved GDP growth rate of 5% in 2014 as compared to 4.35% in 2013. The outlook for India’s long-term growth is moderately positive due to a young population and corresponding low dependency ratio, healthy savings and investment rates, and increasing integration into the global economy. GDP( Purchasing power parity): $7.376 trillion GDP( official exchange rate): $2.05 trillion GDP - real growth rate: 7.2% Inflation rate: 6% Exports: $342.5 billion Imports: $508.1 billion Currency: Rupee Reserves of Foreign Exchange and Gold: $309.2 billion Exchange Rate (India Rupees ( INR) per US Dollar): 60.3
Life Expectancy: 67.8 Population Below Poverty line: 29.8% Taxes and Other Revenues: 9.1% GDP Labor Force: 502.2 million Unemployment Rate: 8.6% Minimum Wage: 0.31/hour,Varied from $2.40/ day in Bihar to $5.80/ day in Delhi Working Hours: 48/ week Child Labor: 12% of Children ages 5 -14s
Communication India has emerged as one of the fastest-growing telecom markets in the world; total telephone subscribership base exceeded 900 million in 2011. Wireless service also is expanding rapidly at the same time.
Country Code: - 91 Telephone in use: 27 million Mobile phone in use: 944 million Internet users: 237.3 million
BUSINESS ETIQUETTE Family value are important throughout India , with privileges and obligations often defined by an individual’s position within the family. Religion usually lends a further familial identity. Many Indian businesses have been traditionally run as an extension of the family model, with loyalty and longevity rewarded. Reputation is the first consideration because they do expect to be treated with dignity and the level of deference commensurate with their station in life. They have an expectation that one should be treated with the level of respect they deserve due their status or position. Establishing a face to face rapport with your business partners, and try to keep in steady contact in between visit or using technology such as videoconferencing, social media and Skype. Indians may be saying ‘yes’ but are expecting you to pick up on the context of the message, which may be something all together different. To minimize misunderstanding, try to ask for clarification if you are not sure which ‘yes’ you just heard Do Show respect for people, including, religion, cluture, status, job titles and education Be prepared to field personal questions, including family, Show your valure of family. Learn about general dietary rules for India’s major religions. For example, beef and pork are off the menu for nearly all Indians. Learn about important Indian holidays. Start with Diwali and Holi as they are great celebrations. You will endear yourself to many Indians if you learn a little bit about Bollywood DON’T Discuss difficult political topics, especially to do with Pakistan or Kashmir Refuse gestures of hospitality, including invitations to meals or to visit local temples or other important cultural sites. These are opportunities to build business relationships and should be regarded as important as transactional business tasks Show frustration if things take longer than they do back home. Many Indians are more fatalistic about time related matters, including schedules and deadlines. Assume that modern or Westernised Indian people have the same values as you. Beneath the surface, traditional cultural values may prevail.
ENVIRONMENTAL FACTORS India comprises a wide range of weather conditions across a vast geographic scale. The variegated climate also will often cause severe natural disasters in India, which case massive losses of Indian life and property. Natural disasters also will cause damage to transaction. For example, droughts, flash floods, cyclones, avalanches, landslide. These are brought on by torrential rains, and snow storms posed the greatest threats. A natural disaster might be cause by earthquakes, flooding, volcanics eruption, landslides, hurricanes. Barren Island in the Andaman Sea has been active in recent years. Floods are the most common natural disaster in India, which is cased by the heavy southwest monsoon rains. Moreover, Flash floods and torrential rains have become increasingly common in the central India over the past several decade. Summer dust storms also is another dangers, which usually track from north to south. They cause extensive property damage in North India, and deposit large amounts of dust from arid regions. Hail is also common in parts of India, causing severe damage to standing crops such as rice and wheat.
INFRASTRUCTURE India ‘s economic growth rapidly over the past 10 years, and it also get a lot improvement in city infrastructure. There are two program has successfully executed, which is the Golden Quadrilateral road program and the expansion of ports in the country. India recognizing that infrastructure is key to enable economic growth, the government has also committed massive investments of close to USD 500 billion in the infrastructure sector in the Eleventh Plan period (2008 to 2012). This plan follows several progressive initiatives taken in recent years, including the Electricity Act 2003, the National Highways Development Project (NHDP), the National Maritime Development Program (NMDP), and Dedicated Freight Corridors (DFCs). However, there are much more needs to be done to accelerate the implementation of infrastructure in India. There are a cruel reality is that India infrastructure still doesn’t meet the rapid growing population in the country. Moreover, the Golden Quadrilateral road program and the expansion of ports in the country do not totally save the situation of poor infrastructure. The factories still suffers from daily power cuts, and roads are complete disarray. India infrastructure still need to be strengthened.
THE APPAREL & TEXTILE INDUSTRY Key Facts on the India’ Garment Industry Employment in garment industry : 8 million (2014: 45 million in textiles and vlothing ‘T&C’ (approximately 60% women, but this varies from region to region). Textiles and Clothing % of GDP: 4% Garment % of export (T&C) : 12% Industry (General) % of GDP: 25.8% Value garment export: $15.7billion(apparel only), $40billion(textiles and apparel) Percentage of the world market for apparels: 3.7% Minimum wage : $ 65.42/month Living wage calculation by Asia Floor Wage: $247.12
Overview India is the one of the world’s largest producers of tetxiles and garments, with abundant availability of raw material such as cotton, silk and as well as skilled workforces have made the coontry a sourcing hub. The textiles industry accounts about 24% of the world’s spindle capacity. Industry accounts for 4% of Indian GDP and 12% of the total export value. Textiles sector is one of the largest contributors to India’s exports with approximately 11% of total exports. The Indian T&A industry experienced substantial growth after the end of the Multi Fiber Agreement; this growth is demonstrated by the fact the industry experienced a growth of 25% in the year 2005-2006. The industry continues to grow, and indeed the export figure could reach $82 billion by as early as 2021. India has high levels of both textile and garment production taking place within it borders. Most of garments are produced in factories and then usually distributed to the retail brands via agents. Exports are normally handled by Export House or Procurement/Commissioning House of large retailers. The Handloom and Power Loom sectors are two important parts in the garment sector.
Market Size The indian textile industry estimated at arount US$108 billion cureetly, and it also is expected to reach US$233 billion by 2021. It providing employment to over 45million people directly and 60 million people indirectly. Its contributes approcimately 5% to India’s GDP.
Overview of The Textile Indusry The indian textile industry has the capacity to produce a wide varity of prodycts suitable to different market segements. It is one of the largest contributors to India’s exports with approximately 11% of total Others (SIlk, Wool, Jute) exports. The textiles industry is also intensive Manlabour Made Textile Ready Made Garments Others Jute) and is one of the largest employers. Base(SIlk, on Wool, the report Man Made Textile of The Cotton Textiles Export Promotion Council Ready Made Garments (Texprocil), the industry realised export earnings worth US$ 41.4 billion in 2014-15, a growth of 5.4%. It is extremely varied, with the hand-spun and handwoven textiles sectors at one end of the spectrum, while the capital intensive sophisticated mills sector at the other end of the spectrum. The decentralised power looms/ hosiery and knitting sector form the largest component of the textiles sector.
India’s Textile Exports( FY15) Others (SIlk, Jute) Others( Silk,Wool, Wool, Jute)
Handicrafts ( Carpet, handloom, Coir, Handicrats excluding Carpets) Handicrafts( Carpet, Handloom,Coir, Handicrafts Cotton Txtile
excluding Carpets)
Handicrafts ( Carpet, handloom, Coir, Handicrats excluding Carpets) Cotton Txtile Cotton textile
Others (SIlk, Wool, Jute) Man Made Textile Ready Made Garments
Handicrafts ( Carpet, handloom, Coir, Handicrats excluding Carpets) Cotton Txtile
3%
3% 3% 3%
10%
40%
16%
3% 31%
3%
40% 10% 40% 40% 10%
Source: Ministry of Textile, Budget 2015, TechSeiResearch
40%
Governments Supports
Handicrafts ( Carpet, handloom, Coir, Cotton Txtile( Carpet, handloom, Coir, Handicrafts Handicrafts Cotton Txtile( Carpet, handloom, Coir, Cotton Txtile
Man Made Textile Others (SIlk, Wool, Jute) Others (SIlk, Wool, Jute) Man Made Textile Ready Made Garments Man Made Textile Man Made Textile Ready Made Garments Ready MadeGarments Garments Ready Made
40%
16% 16%
The T&C industry is one of the “ mainstays of the India economy”, the government has devoted an entire ministry to this industry. The government has actively pursued bilateral agreements with other nations in order to increasing market access. The growth is expected to continues in the coming years. Foreign and domestic investments continues grow, and investment conditions are favorable to foreign investors. 31% India has ambitious plans to attract investors and revamp the country’s textile and apparel 31%India wants to manufacturing sector under the lead of Prime Minister Narendra Modi, a senior India official. give more value to the country’s textile and apparel manufacturing, specially focus on textile. To encourage and facilitate foreign investment, the government has established a scheme called, ‘Make in India.’ This scheme was launched by Prime Minister Narendra Modi on 25 September 2014. Moreover, 100% FDI is allowed under the automatic route in the textile sector. Foreign Direct Investment in the Textiles Sector approx. $1.5 billion between April 2000 to September 2014. According to government and industry estimates, India’s textiles and apparel sector employs more than 45 million people, which is estimated to reach sales of $100 billion in 2016-17, up from $67 billion in 2013-14. For exports, it moves from the sector in the same period are projected to reach $65 billion, up from $40 billion. Fabric production is also projected to nearly double to 112 billion square meters from 64 billion in the same period.
31% 31% 31%
Workers There are an estimated 35 million Textile and Clothing workers in India, and 8 million in Garments sector. India is the second large number of workers in the world. Despite the implementation of a minimum wage law, which is $65.42 per month, but most informal workers are not receive the protection of the law. Most of workers are not aware of their rights, even there are Social insure Laws could protect their benefits or legal protection. Housing, healthcare and food are three main problems in factories. Workers movement is tightly controlled by factories, and the informal sector tend to be more poor. Child labor is still an issue in India cross different sectors, includes agriculture, Industry and serives. The 2011 NationL Census data was relased a report that shows 4,353,247 children ages 5 to 14 work for 6 or more months during the year.
LIST OF TRADE UNION IN INDIA There are generally low levels of TU membership, and the union membership is growing. Indian National Trade Union Congress (INTUC) Bharatiya Mazdoor Sargh (BMS) All India Trade Union Congress
TRADE AGREEMENT India doesn’t sign the Free Trade Agreement with the United States, but they still keep a well trading relationship that is called U.S.-India Bilateral Trade and Investment.
WTO The World Trade Organization is the only international organization dealing with the global rules of trade between. The goal is to help producers of goods and services, exports and importers conduct their business. India has been a WTO member since 1 January 1995.
GATT The General Agreement on Tariffs and Trade (GATT) was a multilateral agreement regulating intern trade and the purpose of it is the substantial reduction of tariffs and other trade barriers and the elimination of preferences, on a reciprocal and mutually advantageous basis. India is a member of GATT since 8 July 1948.
Lead- Time Production 17 export days; 20 import days
HOLIDAYS Gazetted holiday Miladun - Nabi/Id-e- Milad Jan 4 Republic Day Jan 26 Maha Shivaratri/Shivaratri Feb 17 Rama Navami Mar 28 Mahavir Jayanti Apr 2 Good Friday Apr 3 Buddha Purnima/Vesak May4 Independence Day Aug 15 Janmashtami Sep 5 Bakr Id/Eid ul-Adha Sep 25 Mahatma Gandhi Jayanti Oct 2 Dussenhra ( Maha Navami) Oct 22 Muharram/ Ashura Oct 24 Diwali/ Deepavali Nov 11 Guru Nanak Jayanti Nov 25 Christmas Dec 25 Note: During a gazetted holiday, government offices and most businesses are closed so people have a day off work.
Carries:
CMA CGM Phone: +33 (0)4 88 91 90 00 Fax: +33 (0)4 88 91 90 95
AMERICAN MULTIMODEL INTERNATIONAL DELIVERIES Phone: 267-721-0412 Fax: 386-868-0360 OM FREIGHT FORWARDERS PVT. TO Phone: +91 (22) 2565 7999 Fax: +91 (22) 2565 7907
TRANSIT TIMES ( From the port of Mumbail, India)
To New York: 37 ~ 50 days To Long Beach: 38 ~ 52 days To Savannah: 41~55 days
CONTAINTER COST ( From the port of Mumbail, India)
To New York: $3,170.99 ~ $3,503.79 To Long Beach: $4,005.30 ~ $4,426.91 To Savannah: $3.395.99 ~ $3,753.46
SUPPLIERS Ruchi International Website: http://www.ruchimenthol.com Bhadohi 221401 U P Bhadohi 221401 India Customers: Loloi Inc., Spex Clothing Co. Inc., Fred Hall & Associates Inc. Products: Rain Boots, Carpet, etc Primex Clothings Private Limited Websited: http://www.primex.in/ No.37, Bridgeway Colony Extention, 2nd Street, Tiruppur - 641607, Tamil Nadu (India) Customers: Manhattan Beachwear Inc., Apparel Ventures Inc., Stony Apparel Corp. Products: Mean’s wear, Beach wear, Ladies wear, Kid’s wear, Sports wear, Casual Wear Formal wear, Undergarments, Sleep Wears, Home Textiles. Linea Aqua (Pvt) Ltd Website: www.lineaaqua.com Thanahenpitiya Estate Giridara Kapugoda India Customers: PVH Canada Inc. Products: Ladies Knit, Swimwear, Mens Knit , Swimwear with high neck East Wind Footwear Co., Ltd. Phone: +91 41823 06300 India Branch Unit 1 Plot No 3d Sipcot Industrial Park Mangal Village Mathur Post Customers: Converse Inc., Converteam, Converse Canada Inc Products: Converse Sports Footwear, Textile Shoes, Uppers of textile, Outer soles of rubber
Improving infrastructure by the government leader, prime minister - Narendra Modi. Thousands of miles of new roads are being built every year, and the power situation is being slowly and gradually improved. With a business friendly prime minister in power, many of the obscurantist laws, rules and regulations are being simplified, especially those in land acquisition and corporate taxation.
Poor infrastructure Unsteady social and political environment The threat of a terrorist organization from inside and outside of country Serious corruption, and maze legal system
A large number of the youngest populations in the world.
Only a small percentage of India’s army of graduates are good enough to be employed for important jobs by Western businesses.
Most of Indians are hungry, desperate for work, willing to work really hard through low income.
Poor education system
Most Indians speak English very well, and there is a high level of professionalism in cities like Bangalore, Hyderabad and Mumbai. Strong USD against India rupees, a single US dollar gets you 60 Indian rupees Full Integrated textile & apparel industry High capable and innovative textile industry Policy promotes investment and
Severe flooding and droughts. The Cost Advantage may be diminishing fast as the best and most skilled Indian workers are increasingly demanding high salaries at par with that in the US.
EASE OF DOING BUSINESS RANKING IN THE WORLD COUNTRY
RANKING
THALAND
26
CHINA
90
INDIA
142
BANGLADASH
172 Source: www. doingbusiness.org
REFORMS MAKING IT EASIER TO DO BUSINESS IN THE 11 LARGE ECONOMIES IN 2013/14
Economy
Reforms reducing regulatory complexity and cost
Bangladesh
1
0
Brazil
0
0
China
2
0
India
2
1
Indonesia
3
0
Japan
0
0
Mexico
0
2
Nigeria
0
0
Pakistan
1
0
Rassian Federation
2
0
2
0
United States
Reforms strengthening legal institutions
Source: www. doingbusiness.org
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Qiaoning Gu Global Sourcing and Import Buying