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International Finance

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Disha Vaghasiya

on 10 February 2013

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Transcript of International Finance

Growth of Manufacturing and Service Sector in India Before
1991 2013 1991 to Date The Forecast After
1991 Manufacturing Industry
Post-Independence Four distinct phases since independence

Increase in share of manufacturing in GDP

Ascendancy of organised sector

Rise of intermediate products and capital goods Restrictions On Manufacturing Market share reserved for public sector.

Capacity restrictions and industrial licensing.

Investments were monitored by MRTP Act 1969.

High import tariffs on capital goods and technology.

Restrictions on foreign direct investment (FDI). The 1980's Break Industrial growth averaged 7.1 %

Manufacturing sector witnessed strongest growth

Significant relaxation of industrial controls

Failed to keep pace with growth in other countries Pre-Liberalization Period Today's manufacturers – efficient and prudent

India compared to china

Future of India is bright with changing mindsets

Initiatives that need to be taken to help manufactures reach the global market

India today after the British rule Service Sector Pre-Liberalization Period After
1991 1991 to Date The Forecast 2013 Before
1991 Post Independence India focused on industrial and agricultural sector.

Nationalization of banks in 1969 -3rd five year plan.

Increased rate of growth in 1980’s.

Balance of payment crisis – IMF asked for reforms.

Shift from agricultural to service sector. Global Analysis and
International Comparison Service sector preceded and supports manufacturing sector.

GDP grows above emerging developed countries.

Ranked 11th in services GDP .

Rapid increase in service GDP over the years.

China and India increasing world export of services Foreign Direct Investments Infrastructure
4% FDI projects and 9% jobs
FDI grows by 90%

10% FDI projects
Inflow increased by 31% Financial Services
75% FDI projects
21% growth in industry

Seen rapid growth all over the world
Exports have increased from 8% to 25% The Future of Service Sector in India The Future of Service Sector in India (Cont.) HSBC Market index jump

Foriegn investments

Future Innovations

Large scale expansion plans •Privatization

•Future of services in the rural markets

•Future changes in the industry

•Employment in services

•Challenges faced by the sector Present Growth of service sector exports

Rise in share of employment

Contribution to FDI flows

Liberalization reforms Sectors Telecommunication sector Banking Sector Retail & Distribution Sector IT & ITeS Sector Hospitality &Tourism Sector Foreign Direct Investments First Phase – NTP, TRAI, FDI
(upto 49%)

Second Phase – Private operators

Outcome – Good & Bad Key liberalization measures
BASEL norms

FDI introduced and raised gradually

Entry of private sector banks &
foreign banks

Outcome Nature and extent of liberalization varied across the different segments

Retail segment – single brand retailing

Non-retail segments far more liberalised

FDI Multi-brand retailing IT & ITeS sector - four major components

Domestic sector

IT & ITeS sector Export

Challenges Significant growth in recent years

Growth of FTA and FEE

Domestic tourism Manufacturing Sector Present Key to Economic development.

Potential to elevate the economy.

Reforms of 1948, 1956 and 1991.

Sectors coped well worth changes. Current Scenario Contribution to GDP is 15.4%

Employed only 12% of workforce

National Manufacturing Policy

Multiplier Effect

FDI added $72.9 Million Reforms, Trade & Growth Main Economic Reforms of 1991.

Manufactured Exports increased at 20%.

Engineering and Chemical Products.


50 Sectors grew by 39%.

National Manufacturing & Investments Zones. Investment Projects Investment of $58,261 Million in 2011

Attractiveness Profile of India has evolved

Targeting industrial machinery, equipment and tools & automotive sectors

Top Sectors

Growth to be made Sustainable Advanced Technology

Highest Rates of Industrial Growth

Expansion in to services Singapore Korea Taiwan Administrative Measures

Export Incentives

Human Capital Formation


Restricted FDI inflows China Well-sturctured Industrial Policy

Privatization and FDI


High Technology India Closed the inflow of foreign goods


Inefficiency & Technology Stagnation Credits

Nivedita Chandra
Shivani Chhapgar
Devaki Patil
Shruti Surendran
Disha Vaghasiya
Ananya Pandeya 11
Full transcript