Skip navigation


Current DateTime: 07:08:15 11 Nov 2009
LinksList Documentid: 24355697

FEATURED QUIZZES


Current DateTime: 07:08:15 11 Nov 2009
LinksList Documentid: 33793611
  • The Billionaire BFF's

      These billionaire's have led undeniably exceptional lives. In the following quiz, can you tell which responses are based on facts from Buffett's and Gates' real lives?

  • The Many Myths of Coca-Cola

      Can you tell which statements are true, and which ones are just rumors?

  • Think You Understand Markets?

      We've selected some questions from the Financial Industry Regulatory Authority's test of investor knowledge. See how you do ...


Current DateTime: 07:08:15 11 Nov 2009
LinksList Documentid: 24890560
  • Winterizing Your Portfolio

      If 2009 was the winter of our discontent, will 2010 be a winter wonderland for investors? A lot depends on the recovery—or lack thereof.

  • Investor's Guide to Real Estate

      Some even say the long-awaited recovery is here. Regardless, buyers and sellers alike can profit from our guide.

  • Alternative Investing

      Stocks and bonds? Sure. But it's a big world out there for investors.

powered by digg
Back to Going Global Main Page
Text Size
Oct.23
4:25 PM ET
Tuesday, 23 Oct 2007
International Investing: India
Sectors:Retail

Economic Overview: India possesses a diverse economy that ranges from traditional village farming to advanced technology. Its major challenge is a huge and growing population, posing social, economic and environmental problems.

Services are the major source of economic growth, and the country has become a major exporter of software services, using large numbers of well-educated, English-speaking professionals. About three-fifths of the work force is in agriculture, and the government has launched an economic reform program that includes developing basic infrastructure in rural areas.

The government has scaled back controls on foreign trade and investment, raising the limits on foreign direct investment in a few key sectors such as telecommunications. Growth of more than 8 percent in each of the last three years has raised inflation concerns. Privatization of government-owned industries is stalled in political debate.

What to Watch: Mumbai has 1.2 billion potential customers — the world's largest democratic market — but less than 5 percent of its retail business is in the organized sector.

No wonder large players like Wal-Mart and Tesco want to enter the Indian market.

Even as India is poised for a retail revolution, it’s causing some social disturbances.

Traders in the northern city of Bhubaneshwar recently vandalized a newly opened store, their anger directed toward the entry of big companies into the country's largely unorganized retail sector.

By contrast, organized retail has been the livelihood for 600 workers in a factory in Karur in southern India. For the last six years, the factory has been making kitchen linen for export to Wal-Mart stores.

In those years their wages have more than doubled. And now, the proprietor wants to double his company's production capacity, with a new division making linen for stores in India.

In fact, by 2011, thousands of stores are expected to open across India. Global giants like Wal-Mart, and Indian companies like the Future Group and Reliance plan to invest about $25 billion. The big attraction: The country’s organized retailing sector is expected to grow from roughly $12.5 billion now to $55 billion. That growth is expected to add about 25 million new jobs to the Indian economy. But if India is to embrace the retail revolution, the opposing voices will first need convincing there is a benefit.

New Delhi: Real estate here is the largest sector for foreign investment. While mature housing markets are not an investor's favorite bet, India still promises high returns — but not without the hiccups of an emerging market.

The first realty company to be included in India's National stock exchange's “Nifty Fifty” index has set a revenue target of $750 million for 2007. It’s just one example of the booming Indian realty market, which is fueled by demand for retail and office space, but mainly housing.

The country is facing a shortage of 22 million housing units, and the realty market is expected to grow at 33 percent for the next five years to $90 billion.

Indian regulations allow foreign investors to have a slice of the action only through an institutionalized fund — Greenfield projects with a lock-in period of at least three years.

More than $5 billion in foreign investment has found its way into the Indian real estate market over the last year. Funds like Morgan Stanley, Merrill lynch and Tricon Capital are projecting returns of better than 25 percent to their investors.

Sanjay Verma, executive managing director, South Asia, for Cushman Wakefield, said investors are interested in the market because of the potential for high returns, but also because other developed markets are not offering as much in returns in the current market.

There is a flip side to the real estate business in India, though. The country began to get organized only a few years ago and still leaves much to be desired in the area of transparency. This has held back several funds from fully investing the money raised. This year the Jones Lang Lasalle global transparency report has rated India ahead of China  -- from opaque to semi-opaque -- as big developers are now getting their act together to draw in the dollars.

  India
By The Numbers
20002006
Population1.0 billion1.1 billion
Economy
GNI, Atlas method (current US$)456.8 billion906.5 billion
GNI per capita, Atlas method (current US$)450.0820.0
GDP (current US$)460.2 billion906.3 billion
GDP growth (annual %)4.09.2
Inflation, GDP deflator (annual%)3.55.3
Agriculture, value added (% of GDP)23.417.5
Industry, value added (% of GDP)26.227.7
Services, etc., value added (% of GDP)50.554.7
Exports of goods and services (% of GDP)13.2N/A
Imports of goods and services (% of GDP)14.2N/A
Gross capital formation (% of GDP)24.8N/A
Revenue, excluding grants (% of GDP)11.9N/A
Cash surplus/deficit (% of GDP)-3.9N/A
States and Markets
Time required to start a business (days)N/A35.0
Market capitalization of listed companies (% of GDP)32.290.4
Military expenditure (% of GDP)3.1N/A
Fixed line and mobile phone subscribers (per 1,000 people)35.4N/A
Internet users (per 1,000 people)5.4N/A
Roads, paved (% of total roads)47.5N/A
High-technology exports (% of manufactured exports)5.0N/A
Global Links
Merchandise trade (% of GDP)20.432.5
Net barter terms of trade (2000 = 100)100.0N/A
Foreign direct investment, net inflows (BoP, current US$)3.6 billionN/A
Long-term debt (DOD, current US$)95.6 billionN/A
Total debt service (5 of exports of goods, services and income)14.5N/A
Official development assistance and official aid (current US$)1.5 billionN/A
Workers' remittances and compensation of employees, received (US$)12.9 billion25.7 billion
Source: World Development Indicators database, April 2007


Tools:
PrintEmailAdd This share icon
Next Post
  • digg share

CNBC HIGHLIGHTS

  • Bernard Madoff's Baseball Jacket
  • Bernard and Ruth Madoff's personal possessions will be auctioned this weekend. Click ahead to see.
  • US real estate prices have fallen dramatically, but some places are still doing well. See the best-performing zip codes this year.
  • An Italian cashmere maker aims to make profits while creating ideal conditions for his workers.
  • Just in time for the holidays, the Triumph company of Japan offers the latest innovation in women’s undergarments.
  • The real result of health care reform will be bloated government and higher deficits, says Larry Kudlow.
  • Vote and suggest your own, and remember--there's a fine line between a hero and a zero.
ADD COMMENTS
Remaining characters


Current DateTime: 03:37:26 11 Nov 2009
LinksList Documentid: 29778428

Current DateTime: 01:05:48 11 Nov 2009
LinksList Documentid: 29779196

Current DateTime: 06:57:57 11 Nov 2009
LinksList Documentid: 29779199

Current DateTime: 01:02:04 11 Nov 2009
LinksList Documentid: 29779198
  Data is a real-time snapshot  *Data is delayed at least 15 minutes
Global Business and Financial News, Stock Quotes, and Market Data and Analysis

© 2009 CNBC, Inc.  All Rights Reserved.
A Division of NBC Universal
Thomson ReutersThomson Reuters