Gems and jewellery

Phases Of Manufacturing
• Gone through various phases of development.
• 1947 - Initial phase of building the industrial
foundation .
• 1950’s and early 1960’s -To the license–permit
Raj.
• 1965–1980, to a phase of liberalization of
1990’s.
• 1990- emerging into the current phase of
global competitiveness.
11/30/2011 Source CII website 1

Facts Of Manufacturing
• Contributes about 15% of India’s GDP
• 50% to the country’s exports.
• Employed 58 million people (about 12% of the
workforce) in 2008.
• By 2012, This sector will employ a further 12–
13 million out of nearly 89 million additional
people who will enter the workforce.


Gems and Jewellery
• One of the fastest growing segments in the
Indian economy.
• Annual growth rate of approximately 16 %.
• Country is also the largest consumer of gold
in the world.
• It consumes in excess of 800 tonnes of gold
that accounts for 21 % of world gold
consumption, of which nearly 620 tonnes go
into making jewellery .

Continued
• India is also emerging as the world's largest trading
centre for gold targeting US$ 17 billion by 2011.
• Industry has the best skilled manpower for designing

• Producing high volumes of exquisite jewellery at low
labour costs.

• Largest diamond cutting and polishing centre in the
world—the industry enjoys 60 per cent value share, 82
per cent carat share and 95 per cent share of the world
market in terms of number of pieces.


Continued
• The Indian Gems and Jewellery market continues to be
dominated by the unorganized sector.
• with the Indian consumer becoming more aware and
quality conscious, branded jewellery is becoming very
popular and the market for branded jewellery is likely
to be worth US$ 2.2 billion by 2010, according to a
McKinsey report.
• the government allows 51 per cent FDI in single brand
retail outlets, attracting both global and domestic
players to this sector. The World Gold Council recently
estimated the size of India's gold coin market at about
US$ 2.11 billion.


Auto components
• The Indian auto component industry is one of
India's sunrise industries with tremendous
growth prospects.

• India is now a supplier of a range of high-
value and critical automobile components to
global auto makers such as General
Motors, Toyota, Ford and Volkswagen
amongst others.


Continued
• As per an Automotive Component Manufacturers
Association of India (ACMA) report, the turnover
of the auto component industry was estimated at
over US$ 18 billion in 2007-08, an increase of
27.2 per cent since 2002.
• It is likely to touch US$ 40 billion by 2015-16. In
2006-07, the auto component sector saw sales
worth around US$ 15 billion, with US$ 2.8 billion
as exports.
• Investments in the auto component industry
were estimated at US$ 7.2 billion in 2007-08.


Aerospace
• India is poised to become a large commercial and defence aircraft market.
• Boeing expects a demand of between 900 to 1,000 commercial aircraft
worth USD100 billion approximately in the next 20 years. ted offsets. The
defence offset policy has been under implementation and a formal civil
offset policy is also expected to follow shortly. The total spending in the
next 5 years is expected to be between USD25 billion (assuming uniform
demand) for commercial aircrafts and USD100 billion as defence
expenditure. Out of the defence expenditure, approximately 15-20
percent (USD15-20 billion) is expected to be spent on military aircrafts.
Assuming an offset of 30 percent for the civil sector too, the total offset
opportunity for the aerospace sector is valued to be at least USD10-15
billion. As Indian manufacturing capabilities mature over the years, it is
expected to capture a large share of this opportunity.The Indian aerospace
industry is one of the fastest-growing aerospace markets in the world with
an expanding consumer base comprising airlines, businesses and High Net
Worth Individuals. All segments in the aerospace industry, including civil
and military aviation and space, are showing a significant level of growth..


Automobiles
• The growth of the Indian middle class along with the growth of the
economy over the past few years has attracted global auto majors
to the Indian market. Moreover, India provides trained manpower
at competitive costs making India a favoured global manufacturing
hub. The attractiveness of the Indian markets on one hand and the
stagnation of the auto sector in markets such as Europe, US and
Japan on the other have resulted in shifting of new capacities and
flow of capital to the Indian automobile industry. According to the
International Yearbook of Industrial Statistics 2008 released by
United Nations Industrial Development Organisation (UNIDO), India
ranks 12th in the list of the world’s top 15 automakers. Indian
original equipment manufacturers (OEMs) are making their mark
today with Tata and Mahindra & Mahindra as leading Indian OEMs
emerging on the global scene. With increasing competition from
the global players, Indian OEMs have upgraded their technology .


Capital goods
• Capital Goods refer to products that are used in the production of other products but are not incorporated into the new product. These include
machine tools, industrial machinery, process plant equipment, construction & mining equipment, electrical equipment, textile machinery, printing &
packaging machinery etc. The Capital Goods industry is the “mother” of all manufacturing industry and is of strategic importance to the National
security and economic independence. It is in the interest of the User Sectors that the Capital Goods industry should be strengthened since it is a
known fact that the presence of a strong domestic industry increases competition and helps in reducing the capital cost of the project and most
important, the maintenance of plant and machinery can be done economically. The imported plants come at the lowest cost but the importers make
up for that in their high priced maintenance contracts & spares. The Capital Goods Sector was on an upswing since March 2002, due to investments
having taken place in the infrastructure, oil & gas sector, power sector, steel plants, automobile industries etc. The capital goods industry has evolved
over these years in terms of competitiveness by consolidating. Hence the number of players are few. Due to its strategic importance for the
country, it is essential to encourage manufacturing of capital goods rather than import and enhance the value addition and technology transfer. The
annual sales of the capital goods industry was about Rs.110,000 crores during 2008-09 though the market is more than Rs 300,000 crores with
between 60 to 70 % of equipment across all categories being imported, with the drastic fall in customs duty and the inherent dis-advantages faced by
domestic manufacturers thereby making them cost un-competitive and reducing them to be traders and assemblers, instead of manufacturers. Its
contribution to the exchequer has been in excess of Rs.20,000 crores in terms of customs, sales tax and excise collections and which will be higher if
corporate taxes are added. The capital investments made in this sector has registered a healthy CAGR of close of 10% for a period from 1995 to 2005.
The industry currently employs 6 million skilled and semi-skilled workers. It needs to be highlighted that this sector generates the much needed
employment for less educated persons like fitters, welders, machine operators and ITI graduates and employs all collared people.
• Capital Goods Industry: Policy Intervention for Sustaining Growth
• Few sectors of the capital goods sector, which have a lower gestation period & are off the shelf products has been witnessing a downturn since
October 2008. The performance of the capital goods companies are expected to lower in 2009 - 2010 as compared to 2008 - 2009 as the order in
flow had slowed down since the global recession. It is expected that the industry will foresee an upswing either in the last quarter of the current
financial year or first quarter of next financial year as order inflows have picked up.


Chemicals
• The chemical industry in India is poised for explosive growth in the
coming years. India’s population has grown nearly as large as that
ofChina , with its consuming middle class accounting for about a
third of its population. Disposable income inIndia is
rising, potentially driving growth of chemicals consumption at
exponential rates.India’s GDP growth exceeded 9% for the last fiscal
year, fueling double-digit growth of its chemicals industry. India’s
government has set in place policies and special economic zones to
promote investment in its petrochemical sector, and several key
domestic companies have unveiled ambitious expansion plans for
the next few years. The Indian Chemical Industry Outlook is the only
chemical conference inIndia organized specifically to address a
broad range of issues impacting the industry. The conference will
take a look at different segments of the Indian chemical
industry, and explore the growth opportunities and challenges in
each segment.


Climate change
• Climate change is increasingly becoming a central topic of debate and strategic decision making by
Governments and businesses all over the world. The warming of the climate system is
unequivocal, as is now evident from observations of increases in global average air and ocean
temperature, widespread melting of snow and ice, and rising global mean sea level. It impacts all
countries, but is particularly severe for developing countries like India, given their
vulnerabilities, inadequate means and limited capacities to adapt to its effects. The present plan of
Government of India constitutes one of the strongest responses to global climate change by any
developing country. India has already achieved emission intensity reduction by 17.6% between
1990 and 2005. Going forward, given the recent successes of Indian industry in energy
efficiency, renewable energy and green buildings and enhanced commitment to address climate
change issues, the 20-25% emission intensity reduction goals, set out by the Indian
Government, should be achievable. As India reduces emission intensity of its economy by 20-25%
by 2020, numerous investment opportunities are likely to emerge in the key sectors. These include
(a) Industrial energy efficiency: An investment opportunity of Rs 82575 million exist in industrial
energy efficiency leading to annual saving potential of Rs 37510 million (b) Renewable energy:
20,000 MW target of solar energy capacity by 2022 and pipeline of other renewable energy
projects such as biomass, wind and small hydro present huge investment opportunity in the sector
in coming years (c) Green Buildings: One billion sq. ft. of green buildings is being targeted to be set-
up in India by the year 2012, leading to significant investment requirement in the sector and (d)
Cleaner Conventional Energy Technologies: Indian Government has set a target of having upto 50%
of new thermal power generation capacity based on clean coal technologies. The investment
requirement in clean conventional energy technologies is relatively higher, at present.


Defence
• The opening up of the Indian economy during the early nineties heralded an era of unprecedented industrial
growth in India. The growth rates seen match those of the fastest growing economies. A confident and resurgent
Indian Industry is making forays into almost all the sectors of manufacturing. Lately, the huge opportunities for
growth within the domestic and global defence and aerospace industries have attracted the attention of Indian
industry. The current profile of equipment held by the Indian Armed Forces with regards to ‘State of the
Art’, ‘Matured’ and ‘Obsolescent’ equipment is 15, 35 and 50 percent respectively. This suggests that the
Government will have to make serious efforts towards upgrading its defence resources either by developing or
procuring defence equipment and systems. Moreover, modernization, upgradation and maintenance of the
existing equipment will also provide immense opportunities to the industry. India is one of the largest global
military spenders. The defence budget for 2009-10 has increased by 34.19 percent over the previous year’s budget
estimate (BE) of INR 1,056 Bn. The huge opportunity has attracted the attention of not only a few large players but
also a large number of Micro, Small and Medium Sized Enterprises (MSMEs) which visualise this unprecedented
opportunity as a gateway towards entering into the domain of defence production. The slowing down/saturation
of markets in other sectors has also been responsible for the directing their interest towards the unexplored
defence sector which promises sustained business opportunities. The private sector is enthusiastic about its ability
to play a larger role in contributing to the total defence related production both within the country, as well as
looking at export markets once sufficient experience has been gained in particular areas. The need of the hour is
to combine the skills of Public and Private sector, developing this into a partnership with the aim of achieving self-
reliance in defence production. CII believes in creating an environment where both public and private sector grow
together and partner with each other, thereby contributing towards the national growth. CII has supported this
endeavour and has been working with the armed forces and the Ministry of Defence towards achieving maximum
indigenisation. At the policy level as well, there is a clear support for achieving the long cherished goal of self
reliance in defence sector. The Government has been receptive to suggestions and has been willing to make the
required policy changes whenever required. Initially promulgated in December 2002, Defence Procurement
Procedure has already undergone five revisions. The recent amendments in DPP 2008 (Amendments 2009) are a
welcome step. Various provisions have been laid down to ensure industry participation at various levels.


Drugs & Pharmaceuticals
• The Indian pharmaceutical industry is driving product
development and breaking new grounds in medicine
research worldwide. The Indian domestic pharmaceutical
market was estimated to be US$ 10.76 billion in 2008 and is
expected to grow at a high compound annual growth rate
(CAGR) of 9.9 per cent till 2010 and thereafter at a CAGR of
9.5 per cent till 2015. Currently, the Indian pharmaceutical
industry is one of the world's largest and most
developed, ranking 4th in volume terms and 13th in value
terms. The country accounted for 8 per cent of global
production and 2 per cent of world markets in
pharmaceuticals in 2008. The Indian pharmaceutical
offshoring industry is slated to become a US$ 2.5 billion
opportunity by 2012, thanks to lower R&D costs and a high-
talent pool in India.

Fast Moving Consumer Goods (FMCG)
• Fast Moving Consumer Goods (FMCG) goods are popularly named as consumer packaged goods.
Items in this category include all consumables (other than groceries/pulses) people buy at regular
intervals. The most common in the list are toilet soaps, detergents, shampoos, toothpaste, shaving
products, shoe polish, packaged foodstuff, and household accessories and extends to certain
electronic goods. These items are meant for daily of frequent consumption and have a high return.
The Indian FMCG sector is the fourth largest sector in the economy with a total market size in
excess of US$ 13.1 billion.It has a strong MNC presence and is characterised by a wellestablished
distribution network, intense competition between the organised and unorganised segments and
low operational cost. Availability of key raw materials, cheaper labour costs and presence across
the entire value chain gives India a competitive advantage. The FMCG market is set to treble from
US$ 11.6 billion in 2003 to US$ 33.4 billion in 2015. Penetration level as well as per capita
consumption in most product categories like jams, toothpaste, skin care, hair wash etc in India is
low indicating the untapped market potential. Burgeoning Indian population, particularly the
middle class and the rural segments, presents an opportunity to makers of branded products to
convert consumers to branded products. Growth is also likely to come from consumer 'upgrading'
in the matured product categories. With 200 million people expected to shift to processed and
packaged food by 2010, India needs around US$ 28 billion of investment in the food-processing
industry.


Micro, Medium & Small Scale Industry
• Micro, Small and Medium Enterprises have been recognized as one
of the key sector for employment generation and overall economic
development of our country. The Micro, Small and Medium
Enterprises development Act, 2006, was enacted to expand our
focus to the entire gamut of micro, small and medium enterprises
(MSMEs) both in manufacturing and service enterprises. This sector
now provides employment to nearly 60 million persons and account
for nearly 45 % of India’s manufacturing output. CII accords a high
priority to the development of MSMEs, the dynamic segment of
Indian Economy. The CII National MSME Council is the apex council
for the SME members, and represents 69% of the total membership
(approx. 8000). The council ensures involvement of the MSME
members, and influences CIIs decision making on all issues of
concern to the industry. The National council is supported by the
MSME Sub-committees in the four regions and MSME Panels across
all State & Zonal Offices.


India's IT Industry

• Information Technology is one of the most important industries in the Indian economy. The IT industry of India has registered huge
growth in recent years. India's IT industry grew from 150 million US Dollars in 1990-1991 to a whopping 50 billion UD Dollars in
2006-2007. In the last ten years the Information Technology industry in India has grown at an average annual rate of 30%.
• The liberalization of the Indian economy in the early nineties has played a major role in the growth of the IT industry of India.
Deregulation policies adopted by the Government of India have led to substantial domestic investment and inflow of foreign capital to
this industry. In 1970, high import duties had forced IBM to leave India. However, after the early nineties, many multi national
IT companies, including IBM, have set up their operations in India. During the ten year period 1992-2002, the Indian software industry
grew at double the rate as the US software industry.
• Some of the major reasons for the significant growth of the IT industry of India are -
• Abundant availability of skilled manpower
• Reduced telecommunication and internet costs
• Reduced import duties on software and hardware products
• Cost advantages
• Encouraging government policiesSome of the major companies in the IT industry of India are -

•
• Tata Consultancy Services (TCS)
• Infosys
• Wipro
• IBM
• HP
• HCL
• Cognizant Technology Solutions (CTS)
• Patni
• Satyam
• NIITIndia's IT industry caters to both domestic and export markets. Exports contribute around 75% of the total revenue of the IT
industry in India. The IT industry can be broadly divided into four segments -

• IT services
• Softwares (includes both engineering and Research and Development)
• ITES-BPO
11/30/2011
• Hardware Source CII website 17

Textiles & Apparel
• India Textile Industry is one of the largest textile industries in the world.
Today, Indian economy is largely dependent on textile manufacturing and exports.
India earns around 27% of the foreign exchange from exports of textiles.
Further, India Textile Industry contributes about 14% of the total industrial
production of India. Furthermore, its contribution to the gross domestic product of
India is around 3% and the numbers are steadily increasing. India Textile Industry
involves around 35 million workers directly and it accounts for 21% of the total
employment generated in the economy. The Indian Textile Industry contributes
approximately 12 percent to industrial production, 15 per cent to the
manufacturing sector, 4 percent to the GDP and 12 per cent to the country's total
export earnings. The sector provides direct employment to over 35 million
people, the second largest provider of employment after agriculture. This fact
makes a call that says that textiles sector is a labor intensive one. There are
another 55 million people who are engaged in its allied services. The Indian textile
industry is estimated to be around US$ 52 billion and is likely to reach US$ 115
billion by 2012. The domestic market is likely to increase from US$ 34.6 billion to
US$ 60 billion by 2012. It is expected that India's share of exports to the world
would also increase from the current 4 per cent to around 7 per cent during this
period. India's textile exports have shot up from US$ 19.14 billion in 2006-07 to
US$ 22.13 billion in 2007-08, registering a growth of over 15 per cent.


Steel & Non-Ferrous Metals
• The Indian steel industry entered into a new
development stage from 2005–06, resulting in India
becoming the 5th largest producer of steel globally.
Producing about 53 million tonnes (MT) of steel a
year, today India accounts for a little over 7 per cent of
the world's total production. India is the only country
worldover to post a positive overall growth in crude
steel production at 1.01 per cent for the January-March
period of 2009. The recovery in steel production has
been aided by the improved sales performance of steel
companies. According to a report from Barclays
Capital, China and India are going to provide the
impetus for steel demand for the next few years.


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