India by fionan



                                         By Sanjeet Narain CIPS, CRES, SIOR, TRC

                                         The global market has set sail         $7.5 billion, is expected to reach
                                         toward India to benefit from the       $21.5 billion by 2010. The num-
                                         country’s commercial boom. The         ber of malls is expected to
                                         forth largest economy in the           increase from 45 today to 250 by
                                         world, India is poised for rapid       2010. An additional 50 million
                                         growth with a GDP of 8.9 percent       square feet of space is projected to
                                         in June 2006.                          be developed for retail over the
Sanjeet Narain, CIPS, CRES,                 Retail, information technology      next five years.
SIOR, TRC, is the Managing               (IT) and information technology
Director of Commercial Properties        related services (ITES), automo-       Information Technology
for Narains Corp., Mumbai, India,        bile, pharmaceutical, and manu-        Another industry that has changed
founded in 1971. Sanjeet also is a       facturing industries are among         the shape of India’s economy is
founding member of the India             those with the highest rate of         the IT/ITES sector. More than 150
Institute of Real Estate (IIRE), a       growth. Multinational companies        Fortune 500 companies outsource
nationally renowned accreditation        are pouring into cities like           their software requirement to
institute which strives to enhance       Mumbai, New Delhi, Noida,              Indian software companies, mainly
the standard of real estate practice     Gurgaon, Pune, Hyderabad, and          to save on costs and at the same
in India. The institute is affiliated    Bangalore to benefit from India’s      time get skilled professional
the NATIONAL ASSOCIATION       OF        booming economy.                       employees. Revenues in fiscal year
                                                                                2005-2006 jumped to $29.6 bil-
                                         Retail                                 lion, with revenue from exports
                                         With 11 retail shops for every         accounting for $23.6 billion. In
                                         1,000 people, India has the high-      keeping with this trend, it is pre-
                                         est shop density in the world. It is   dicted that by 2010, exports will
                                         currently the world’s ninth largest    reach the $60 billion milestone.
                                         retail market. This explains why       Companies such as Intel,
                                         Wal-mart has partnered with            Microsoft, Cisco, Nokia, Google,
                                         India’s Bharti Group and is gear-      and Ericsson have ambitious
                                         ing up for its launch in India.        expansion plans for India. The
                                         With a three year compounded           FDI (Foreign Direct Investment)
                                         annual growth of 46.64 percent,        commitment in the telecom and IT
                                         retail is the fastest growing sector   sectors have produced $17.82
                                         in the Indian economy. Organized       billion over the last 20 months.
                                         retailing, currently amounting to
   Today there are several software technology
Parks (STPs) in cities like Bangalore, Hyderabad,
Noida (35 percent share in the industry), Mumbai,
Pune, and Chennai. International giants like HCL,
Cadance, and HCL Parrot are already present in
Noida. Dell has opted to set up its operations at an
IT Park in Hyderabad. The leaders of the IT/ITES       IT PARK AT MUMBAI, INDIA
world have set up or are setting up their centers in
India. Estimated demand from the IT/ITES sector        global automotive players. Further, India has a
alone is expected to be 150 million square feet of     well-developed, globally competitive ancillary auto
space across the major cities by 2010.                 industry and has established automobile testing
                                                       and R&D centers. The country is among the low-
Pharmaceuticals                                        est cost producers of steel in the world.
A highly organized sector, the Indian Pharmaceuti-        The automobile industry grew 19.35 percent
cals Industry is estimated to be worth $4.5 billion.   between April/July 2005 and April/July 2006.
Currently, growing at about eight to nine percent      Companies planning further expansion in India
annually, it is poised for rapid expansion. Around     include General Motors, Ford, Honda, and Toyota.
250 large and around 8,000 small scale units form      General Motors has established an Indian Science
the core of the Indian pharmaceutical industry.        Laboratory (ISL), which focuses on vehicle design
There are 74 U.S. FDA-approved manufacturing           tools, enterprise modeling and virtual manufactur-
facilities in India, more than in any other country    ing, embedded control systems, infrastructure and
outside the United States. Many multinational          automotive materials, and chemical systems. The
companies have penetrated India with an aim to         ISL was set up two years ago at Bangalore, with an
market drugs and conduct clinical trails. Among        initial investment of $21 million. Toyota is plan-
them, Wockhardt Ltd. has emerged as one of the         ning to invest about $340 million pursuing its goal
top 10 pharmaceutical companies in India.              of capturing 10 percent of India’s market by 2010.
Globally, the Indian pharmaceutical market is the      Honda Motors Co. is planning to increase its pro-
15th largest individual market by sales, but the       duction capacity by adding $159 million to their
fourth largest by volume of product. The industry      existing investment of $182 million through
is expected to reach $47 billion by 2012. Also,        Honda Siel Cars India Ltd. It is further expanding
India ranks 11th in biotechnology. The Indian          by setting up a fifth company in India, Honda
biotech market is dominated by biopharmaceuti-         Motor India, that will cost about $682 million.
cals which saw a 30 percent growth in 2005.
                                                       Special Economic Zones (SEZs)
Automotive                                             The biggest boon to India’s economic growth is the
As a result of the government’s continuous eco-        development of SEZs (Special Economic Zones).
nomic liberalization over the years and thanks to      This policy, introduced in 2005, allows develop-
India’s technology and manpower costs, India is        ment of an internationally competitive, undis-
one of the prime business destinations for many        turbed environment designed to encourage exports.
                                                       Units in SEZs are available for manufacturing of
goods as well as services.                                                        nications, power, petrole-
Nearly 200 SEZ establish-                                                         um, etc., along with the
ments have gained formal                                                          influx of new multination-
approval. Reliance Ventures,                                                      al companies entering the
Ltd. (RVL) and The Har-                                                           Indian economy. Real
yana State Industrial and                                                         estate transactions in India
Infrastructure Develop-                                                           can be complex, hence it is
ment Corporation (HSI-                                                            advisable to use the servic-
IDC) are jointly setting up                                                       es of a professional local
the country’s largest SEZ,                                                        expert for any real estate
spread across 25,000 acres,                                                       requirements.
at an overall investment of
$9 billion. Reliance Ventures                                                     SIOR – Advantage
plans to use this SEZ for                                                         India
the development of indus-                                                          Sooner or later most inter-
tries like nanotechnology                                                          national companies will
and biotechnology.                                                                 come into India. They will
                                                                                   be unable to ignore the
Real Estate                                                                        fastest developing country
The real estate industry in                                                        in the world, with a popu-
India grew by 150 percent                                                          lation of more than 1.5
in the last two years. It is                                                       billion people. This is a
one of the fastest growing                                                         great opportunity for
industries in the world.                                                           SIOR members to benefit
India will witness more                                                            from India’s boom. Just
than two billion square           Office Building at Gurgaon (New Delhi) India     ask your clients—“Are
feet of new construction in the                                                    you looking to expand
next seven years. Most of the space will be               into India?” For any assistance or information on
absorbed by the ever increasing demands of IT,            India, write me or check our Web site at
retail, pharmaceutical, entertainment, telecommu-


                                                           • GDP $576 billion (GDP rate 8% +)
     • 5,000 years-old civilization                        • Parliamentary form of Government
     • 325 languages spoken-1,652 dialects                 • World’s largest democracy.
     • 18 official languages.                              • World’s 4th largest economy.
     • 29 states, 5 union territories                      • World-class recognition in IT,
     • 3.28 million square kilometers-Area                   Biotechnology, and Space.
     • 7,516 kilometer Coastline                           • Largest English-speaking nation in the world
     • 1.5 billion population                              • 3rd largest standing army force, more than
                                                             1.5 million strong
     • 5,600 dailies, 15,000 weeklies and 20,000
       periodicals in 21 languages with a                  • 2nd largest pool of scientists and engineers
       combined circulation of 142 million                   in the world

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