INDIA - COUNTRY OVERVİEW - MARKETING
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INDIA 1. MARKET OVERVIEW The market potential of India over the medium- to long-term is second only to China’s. Since 1991, the Indian economy has been transformed from its protectionist “Licence Raj” system into a competitive, open economy with leadership in a wide variety of sectors. When one thinks of India today, one thinks of Information Technology (IT). Indian IT and IT Enabled Services (ITES) firms such as Infosys, Wipro and Tata Consultancy Services (TCS) are in the vanguard of global innovators that are revolutionizing how information is used and processed to create value for their clients around the world. the Bharatiya Janata Party (BJP)-led and Congress-led coalitions accelerate economic reforms that have seen a progressive liberalization of India’s trade and investment regimes. As India continues to liberalize its economy, foreign direct investment (FDI) and domestic investment (especially in infrastructure sectors) alone will likely drive up India’s potential growth rates to the 7-8% level in the medium term. India is also becoming an important player in global trade. During the 1994-2003 period, Indian exports grew on average by 12.8% annually (in nominal terms). This compares TABLE 1 Population GDP (US$ billion) GDP per capita INDIA IN 2004 1,070 million US$617.24 US$577 6.2% 6.1% GDP Growth, 1993-2004 BC Export Growth, 2000-2004 Source: International Monetary Fund, Ministry of Commerce (India) and Statistics Canada. With a GDP growth rate averaging 6.2% in the last 10 years, many economists have argued that India’s potential rate of GDP growth is in the 6-7% range. We expect India to maintain this potential rate of GDP growth in the medium term with some slowdown expected in the next two years due primarily to a global slowdown. One of the most important features of Indian policy-making is a commitment on all sides of the political spectrum on the need to continue India’s economic reforms begun in 1991. We have seen both favourably with export growth rates of 10.2% and 6.9% respectively experienced by exporting powerhouses like South Korea and Malaysia. In its New Foreign Trade Policy (NFTP), the Indian government has set a target of more than doubling India’s share in world trade to about 2% by 2010. Instrumental in this will be the IT/ITES sector. According to the National Association of Software and Service Companies (NASSCOM), India’s ITITES sector has experienced an explosive 28% growth since 1998, with revenues expected to reach US$28 billion in 2005. 1 India’s stock of inward FDI was US$30.8 billion in 2003 — a sharp increase of 21.3% from the previous year but still far below mainland China’s inward FDI stock of US$501.5 billion. While India has not been a major destination of FDI in Asia in the past, recent global surveys have suggested that it is increasingly becoming one of the most attractive investment destinations in the world. For example, A.T. Kearney’s 2004 FDI confidence index put India as the third most attractive FDI destination (after China and the United States). On some factors such as India’s highly educated workforce, management talent, rule of law, transparency and regulatory environment, India was ranked more favourably than China. Despite India’s sometimes difficultto-understand political landscape, we view India’s internal political outlook as being stable over the medium-term, one factor in the rising level of inward FDI. The one issue that may arise from time to time to disturb investor confidence is India’s foreign relations with neighbouring Pakistan and the two countries’ dispute over Kashmir. While the two countries have made significant progress in furthering peace talks in the recent past, it is not clear what the end game in this dispute could be. Positions of both sides are deeply entrenched and as frustrations in Pakistan grow with the time that it is taking to resolve the Kashmir dispute, we will likely see a ramping up of tensions that will affect overall investor confidence in India, as happened in 1998 after tit-for-tat nuclear explosions on the South Asian subcontinent in 1998. At US$913 million in 2003, India’s stock of outward FDI is lower than that of many other Asian economies. However, recent announcements in the oil and gas, pharmaceuticals, biotechnology and IT sectors are likely the beginning of a trend that will see Indian conglomerates make acquisitions, greenfield investments, or sign partnership agreements in markets like Canada’s to take advantage of the unique value propositions offered by Canadian and British Columbia firms and assets. 2. BRITISH COLUMBIA’S RELATIONSHIP WITH INDIA British Columbia firms have benefited from India’s IT advantage with firms like Pivotal Corporation and Momentum Technologies establishing software development centres in India. While BC firms are engaged in India’s IT/ITES sector, there are other sectors in which British Columbia firms are playing an increasingly prominent role. BC’s largest exports to India have been in the forest products sector with all of the large BC forest companies — AbitibiConsolidated, Canfor Corporation, Howe Sound Pulp & Paper, West Fraser Timber Co. Ltd., and Weyerhauser Canada — engaged in the India market through agency relationships. Other sectors in which BC companies are increasingly involved in the India market include 2 education services (e.g., University College of the Fraser Valley, Malaspina University College), construction and real estate (e.g., The Kryton Group, Minaean International Corporation, Royal Indian Raj International Corporation), and Oil & Gas (e.g., Terasen Inc. and Westcoast Drilling Supplies, Inc.). Further, small and large BC-based consulting firms are also involved in the Indian market with services ranging from export market consulting (IPCS Project Coordination Services) to consulting engineering services (e.g., Lea International Ltd.). MERCHANDISE TRADE 1 exports represented 15.9% of Canadian exports to India in 2004. There are no significant structural differences in BC exports to India compared to other provinces. Like BC, Canadian merchandise exports to India also tend to be concentrated in raw material exports. However, it is significant that BC is the primary Canadian source to India for three of its top-five Canadian-sourced products — 99.6% of ore, slag, and ash exports; 97.1% of mineral fuel, oils, and wax exports and 43.6% of wood pulp. BC’s top-five exports to India are sectors of opportunity for BC, given that they represent BC’s comparative advantage in the Indian market. As we outline below, India’s demand for forest products, ores, mineral fuels, and infrastructure (more broadly) will increase substantially as the country continues to grow. In Raw material exports have traditionally formed the vast majority of BC exports to India. In 2004, the top-five exports from BC to India accounted for 89% of all BC exports to India (see Table 2). BC each of these sectors and in a wide range of associated services sectors, there will continue to be significant opportunities for BC-based companies to provide value-added services to BC’s portfolio of exports to India. Forest Products Forest products, including rolled and sheeted newsprint and wood pulp of various types have traditionally been the largest export from BC to India. In 2004, products in these two categories accounted for 63.3% of BC shipments to India. Rolled and/or sheeted newsprint (HS 480100) was the largest export from BC to India in 2004 at $46.3 million (36.2% of BC exports to India). All of the major BC forest products Canfor brand panel woods in the Indian market. Howe Sound Pulp & Paper Ltd. is represented by J.N. Ravanuss (India) Pvt. Ltd. based out of Gurgaon, Haryana where it has sold bleached kraft pulp. West Fraser Timber Co. Ltd. also has a liaison office in India with Stora Enso India out of Gurgaon near New Delhi. Weyerhaeuser Canada has also been engaged in the Indian market over the years with contracts announced for the sale of hemlock, Douglas-fir, alder, western maple, western red cedar, and white birch in the last two years through its Agent in India, LS Sundher Ltd. Mining, Minerals and Fuels is today the single largest private sector manufacturer of high grade, special high grade and super special high grade zinc in India, was actually formed as a joint venture between Cominco Ltd. and Binani Metals in 1962, with a capacity to produce 14,000 tonnes of electrolytic zinc per annum. Cominco withdrew as financial collaborators of the company in 1991 as part of its global strategy. Mineral fuels and oils have not traditionally been major exports from BC to India. In 2004, however, they formed the third-largest category of exports from BC to India with shipments of bituminous coal accounting for $6.4 million (5.0% of total BC exports to India) Copper ore and concentrate has traditionally been the second most TABLE 2 BC’S MERCHANDISE TRADE WITH INDIA, 2004 BC IMPORTS FROM INDIA Rank 1 2 3 4 5 Merchandise Classification Knitted or crocheted apparel Woven clothing and apparel Other textile articles Fish, crustaceans, molluscs Pearls, precious stones/metals, etc. Total BC Imports from India Indian Imports as % of BC’s Total: ($M) 26.0 17.3 13.1 12.1 11.6 177.2 % 15 10 7 7 7 100 0.5 Rank 1 2 3 4 5 BC-ORIGIN EXPORTS TO INDIA Merchandise Classification Paper and paperboard Wood pulp and other pulp Ores, slag and ash Mineral fuels, oils and waxes Electrical machinery and parts Total BC Exports to India Indian Exports as % of BC’s Total: ($M) 46.4 34.7 14.6 12.4 5.6 128.1 % 36 27 11 10 4 100 0.4 Note: Canadian import statistics are collected in terms of the province of clearance, not province of final destination. Source: Trade Data Online. Industry Canada. 24 August 2005. <http://strategis.ic.gc.ca/sc_mrkti/tdst/engdoc/tr_homep.html>. companies have ongoing relationships with partners in the India market. Abitibi-Consolidated Inc. is a major BC exporter of newsprint to India with the Times of India (India’s largest-selling English language daily) printed on Abitibi paper. Canfor Corporation has also been engaged in the India market with its Mumbai-based distributor, Pratik Panels Ltd., which supplies important export from BC to India. In 2004, BC exported $14.2 million of copper ore and concentrates to India, making up 11.1% of BC exports to that market. Most of this ore and concentrate is sourced from TeckCominco’s copper and molybdenum operations at Highland Valley. Teck-Cominco has an interesting history in India. Binani Zinc, which with a further $6 million in calcined petroleum coke (4.7% of BC exports to India). Three BC coal mining companies — Teck-Cominco, Fording Coal, and Luscar — visited India and presented technical results to the Steel Authority of India Ltd. (SAIL) in 2002-03. As a result of those visits, the pilot shipments of low ash content coal took place in 2004 (although it has not 3 been revealed which of these companies exported coal to India in 2004). Advanced Manufacturing Technologies energy management system from Power Measurement. Other firms producing advanced manufactured goods (and services) and engaged in the India market include: Langley-based Knelson Concentrators (precious metals processing technology); Mission-based Interwrap Industries Corp. (packaging solutions); Richmond-based ComNav Marine Ltd. (marine navigation and automation systems); Ebco Industries Ltd. (metal fabrication), Minaean International Ltd. (specialty construction and services); Spectrum Signal Processing, Inc. (wireless equipment and services); the Kryton Group (construction materials); and Syndel Laboratories, Inc. (pharmaceutical and animal health products). SERVICES TRADE each represented about 30% of Canadian services exports to India over the last decade (see Chart1). The structure of Canadian services exports to India is similar to Canadian services exports to other emerging markets. Analysis by APF Canada has found that over the past decade, the share of commercial services exports to India was no different from its share in other significant emerging markets of importance to Canada like China, Brazil, Mexico and Malaysia. However, when we look at growth rates of commercial services, India stands out. In work done by APF Canada for International Trade Canada2, it was found that at 27.6% average annual growth rates, India was one of the fastest growing markets for Canadian commercial services exports to the world with growth exceeding China and Russia and at par with more advanced markets like Singapore, Mexico and Thailand. More significantly, the variability of this growth of commercial services to India was the lowest among the ten emerging markets studied. This finding is significant because it means that growth in commercial services exports to India is certainly more stable than in markets like Brazil, Malaysia, Mexico, Thailand, Singapore, Russia and Indonesia. It could also mean that commercial services exports to India were likely distributed more widely than in other emerging markets. Contrary to our findings on Canadian and BC merchandise exports to India (which tend to be concentrated), this signals that a wide range of commercial services form a solid base of Canadian services exports to India. It is widely recognized that even if official data on BC’s services exports Advanced manufacturing technologies encompass a wide variety of goods (and services) with several BC-based firms already engaged in the India market. While most activity may not register in the official trade data, there is significant evidence to indicate that BC-based firms are providing a wide array of goods and services in the Indian market. In October 2004, Vancouverbased Cummins Westport Inc. and Cummins India Limited (CIL) completed their licence and supply agreement that grants CIL an exclusive licence to manufacture, sell and service Cummins Westport’s natural gas engines. Manufacture of these engines began in mid-2005. Applied Microsystems Ltd., a Sidney-based manufacturer of oceanographic instruments, recently sold one of its Argus II Geothermal heat probes to India’s National Geophysical Research Institute based out of Bangalore. Saanichton-based Power Measurement Ltd. is a leading provider of enterprise energy management systems for energy suppliers and consumers. Through its agents in Mumbai, CMS Computers Ltd., Power Measurement provides web-ready software, metering and control devices that help manage complex energy contracts, improve power quality, reduce energy costs and keep operations running enterprise-wide. In 2003, Tata Power Company Limited (TPCL), India’s oldest and largest private generating and distributing company, upgraded its Jojobera Power Plant located in Jamshedpur with an ION(R) enterprise 4 It is in services trade that BC’s relationship with India is most dynamic and will see the greatest growth in the medium- to long-term. Official statistics for BC’s trade in services with India are not available. The overall Canadian data together with work done on services by the Asia Pacific Foundation of Canada (APF Canada) provide an indicator of likely BC services trade activity with India. In 2003, total Canadian services exports to India was $254 million, down from $283 million in 2002 — representing a –10.2% annual decline. Commercial services formed the most important component of Canadian services exports to India. For the 10-year period 1994-2003, commercial services exports represented 40% of Canadian services exports to India. In 2003, commercial services exports to India were $116 million. Travel services and government/transportation services to India were to become available, this data would continue to underestimate both the scope and volume of services transactions. There are two important reasons for this. First, unlike merchandise exports, a BC services firm can deliver its services from anywhere in the world. Second, most service delivery can only occur if there is close and regular contact with customers that in turn often requires some form of physical presence and investment. The implication of this servicesinvestment linkage is that BC services firms may be very active in the Indian market but most of it would not be recorded in Canadian statistics. An example will clarify this point. Pivotal Corporation, a leading customer relationship management (CRM) software firm with a focus on mid-sized enterprises, started operations in Bangalore, India in November 2002 with a development centre. This development centre is fully integrated with Pivotal’s global operations and forms the base for Pivotal’s sales strategy in not only India but regionally as well. However, internal transactions between Pivotal (Vancouver) and Pivotal (Bangalore) would go unrecorded in official services data because they are internal to a Canadian firm. However, such transactions would be recorded in official trade data had they occurred between Pivotal (Vancouver) and an outsourced service provider in India. Further, transactions between Pivotal (Bangalore) and a third-party in India would go unrecorded in BC services export data even though the actual service is being performed by a company beneficially owned in BC. In an attempt to capture these types of services transactions, APF Canada was contracted by International Trade Canada to provide estimates of total commercial services sales by Canadian firms in India. In that study3 we found that in 2002, Canadian firms sold $336 million in commercial services in the Indian market. This was about 2½ times greater than commercial services exports reported by Statistics Canada. For this report, we have gone back into our database to capture the share of BC-based firms in Canadian commercial services exports. As we can see in Table 3, we estimate that total BC commercial services exports to India were about $27.8 million with about 40% focused in two areas — ICT services and consulting services. In the consulting area, there were a wide variety of firms engaged in providing services including legal services, engineering consulting services, travel and immigration services, and trade market consulting. The other important sector was the housing and building products sector with firms engaged in areas ranging from real estate development to specialized construction services. This sector made up a significant 11.2% of total services transactions by BC firms in the Indian market. TABLE 3 SERVICES SALES BY BC FIRMS IN INDIA, 2002 ($M, imputed) Sector Information & Communication Technology Consulting Services Mining, Minerals Equipment & Services Housing & Building Products Other Total Value 11.9 11.3 0.4 3.1 1.1 27.8 Share of total, % 42.8 40.6 1.4 11.2 4.0 100 Source: Asia Pacific Foundation of Canada CHART 1 CANADA’S SERVICES EXPORTS TO INDIA Transportation and Government Services Commercial Services Travel 300 250 200 $M (67) (83) (64) (57) 150 (97) (128) (146) (116) 100 (31) (35) (50) (85) (40) (74) (72) (81) 50 0 (17) (32) 1990 1995 2000 2001 2002 2003 Source: Adapted from Statistics Canada, Canada’s International Trade in Services with Selected Countries, CANSIM Database Table 376-0036. 19 August 2005. <http://www.dfait-maeci.gc.ca/eet/pdf/intern_trade_in_services_2005-en.pdf>, <http://cansim2.statcan.ca>. 5 Information and Communications Technology There are several BC-based ICT firms involved in India-related services activities. On the outsourcing side, Vancouver-based Pivotal Corporation established its development centre in Bangalore in 2002, as noted. Pivotal’s first entré into the India market was in partnership with GrapeCity Inc., a Noida-based systems integrator. Vancouver-based Momentum Technologies, Inc. (recently acquired by UK-based Newell & Budge) established its development centre in Noida in 2000. In the wireless sector, Vancouverbased Sierra Wireless, Inc. announced in June 2004 that it had selected Adino Telecom Limited, India’s premier broadband solutions company, to distribute the AirCard 750 wide area wireless PC Card and the MP 750 GPS modem, for use on GSM (Global System for Mobile Communication) and GPRS (General Packet Radio Services) networks, and the new AirCard 775 PC Card for EDGE (Enhanced Data rates for Global Evolution) networks, to customers in India. This agreement marked Sierra Wireless’ first entry into the Indian market. Subsequently, Sierra Wireless also announced an agreement with Tirumala Seven Hill Pvt Ltd. to distribute its AirCard 555 wide area wireless network card to enterprises in remote areas in India. Richmondbased Empower Technologies, Inc. signed a distribution agreement with India’s Experience Wireless Fidelity for distribution of Empower’s PowerPlay series of PDAs and upcoming mobile smart communication devices. In 2002, Vancouver-based IntraCoastal System Engineering Corporation signed an agreement with Wireless Nova of Mumbai to install automatic 6 meter reading (AMR) systems in several states in India. Wireless Nova currently manufactures, distributes and supplies a GSM-based AMR solution for industrial utility consumers and now has IntraCoastal’s PLC AMR system to address the larger market of residential consumers in India. This followed a piloting of IntraCoastal’s offering with the Karnataka Power Transmission Corporation of Bangalore in 2001. Other BC-based ITC firms involved in India-related activities include: Sierra Systems Group (IT consulting), and MidNet (Canada), Inc. (communications). Several BC-based software developers have been successful at placing orders in the Indian market. Vancouver-based S.C.S. Solars Computing Systems Inc., a provider of reservation systems for the travel industry, established its operations in India in 2001. Vancouver-based Datawest Solutions Inc., a provider of banking and payment technology solutions, sold its ConCentre software system to India Switch Company (ISC) and HMA STARware Ltd. ConCentre is a value-added product that is designed to monitor applications running on various platforms in a transaction processing network. Under the contract, Datawest provided installation, project management and training of personnel during the on-site implementation of ConCentre in Mumbai and also monitors the 150 ATMs and the connections of ISC’s 10 member banks. Datawest Solutions Inc. has also sold its proprietary ATM network monitoring system to IDBI Bank Ltd. in India. In 2002, Surrey-based Serebra Learning Corporation, a provider of e-learning software, signed a franchise agreement with India-based Indata Com Pvt Ltd. through which Serebra will provide key e-learning solutions to the Indian education sector. Indata will use Serebra’s courses as well as its Serebra.Net Hosted Learning Management Solution in order to produce teaching packages on IT skills and improve training offered to students in India. Engineering Consulting Services Engineering consulting services are also an important element of services activity by BC-based firms in India. Surrey-based Aplin & Martin Consultants Ltd. was contracted to provide a master plan schematic design and design development for a new upscale, state-of-the-art 10,000 population township in Haryana state. The firm was also contracted to provide project management and engineering services for the town’s wastewater treatment facility. In 2003, Vancouver-based AldrichPears Associates, along with its consortium partners, received funding from the Canadian International Development Agency’s Industrial Cooperation Program to undertake a feasibility study to provide professional services to Pushpa Gujral Science City project in Punjab. Vancouver-based IPCS International, a project management and marketing company, led the Canadian consortium for an initial concept-planning workshop in Chandigarh to support the Punjab government’s initiative to develop a world-class Science Centre. AldrichPears provides planning and creative services for museums, science centres and interpretive centres. Vancouver-based CMC Engineering and Management Ltd. has extensive experience in India dealing with foodgrains production, storage, handling, transport, distribution and value-added processing. In 2003, the company signed a Memorandum of Understanding with India’s Central Ware Housing Corporation (CWC) under the Ministry of Consumer Affairs, Food and Public Distribution for the construction of modern cold storages for various agricultural and poultry products and studies and design adaptations in technology for the construction of a cold corridor from Jammu and Kashmir and Himachal Pradesh to Mumbai. The cold corridor is part of the Indian government’s plan to preserve horticultural and agricultural products for export. Toronto-based Lea Consulting Ltd. specializes in transportation and urban infrastructure projects with an emphasis on transportation planning, traffic operations, and highway, bridge and municipal design. With a major office in Vancouver, Lea Consulting Ltd. established Lea Associates South Asia Ltd. (LASA) in 1993. LASA has won over 100 projects in various disciplines across India and now has 15 branch offices covering almost every major city in India and a total staff strength of 520 employees in India. Another Vancouver-based firm that has undertaken considerable engineering consulting work in India CASE STUDY 1 DELIVERING ENGINEERING SERVICES IN THE INDIAN MARKET: EXPERIENCES OF LEA INTERNATIONAL, LTD. Established in 1993, Lea Associates South Asia Pvt. Ltd. (LASA), part of the Canada-based LEA Group of Companies, is an infrastructure development and management consultancy firm. LASA provides specialized services in highway planning, engineering, design and supervision; traffic engineering and transportation planning; bridge and structural engineering, design and supervision; environmental and social planning and engineering; urban, regional and tourism development and planning; irrigation and water resource management; and training and technology transfer. LASA is headquartered in New Delhi and has branch offices in almost every major city in India. An example of services delivered by LASA includes its recently completed Strategic Options Study (SOS) for the state of Gujarat. As the result of the massive earthquake in Gujarat on January 6, 2001, LASA was awarded a contract, funded by the World Bank, to carry out services such as assessment of existing bridges, ranking of bridges, detailed topographical survey and sub-soil investigation, preparation of detail design/drawings, finalization of repair and rehabilitation strategy, preparation of BOQ, specifications, cost estimation and bid documents. LASA has also been actively involved in a complex tourism project in the state of Kerala, which required the balancing of the development of tourism along with ecology, fishing and the environment. LASA considers its entry into India in 1993 and its continued commitment to quality as its biggest strengths in the market. Since India is a vast market and its infrastructure resources have been stretched to the limit, there is considerable need for improvement. LASA foresees huge opportunities for itself in road infrastructure development and it also expects opportunities in the railway and general infrastructure development sectors. LASA considers its commitment to quality as its primary strategy for its future and current success. LASA invests substantial time in evaluating a project to determine its feasibility and quality commitment from the client before agreeing to work on a project. The firm’s project offices in India are the most important and critical avenue of service delivery. LASA also undertakes numerous programs to train its customers by bringing them to Canada. 7 is ND Lea Consulting Ltd. With offices in Kamloops and Williams Lake, ND Lea specializes in management, planning and design of transportation infrastructure, urban development and environmental assessments. In India, the firm has undertaken several projects in the roads sector including work for the Asian Development Bank, the states of Gujarat and Madhya Pradesh and a wide variety of feasibility studies, particularly for the key Faizabad-Noida-Ghaziabad expressway. Environmental Goods and Services An important sector for BC-based SMEs in the India market will continue to be environmental services with several BC firms engaged on a variety of projects in India. Victoria-based Hydroxyl Systems Inc. has provided its offering of full spectrum wastewater services including scientific investigation, in-house treatability testing, design and construction. North Vancouver-based Aqua-Guard Spill Response Inc. and Richmondbased Versatech Products Inc. provide a complete range of oil spill containment and oil spill recovery equipment. These offerings have been sold in the Indian market. There are also several BC-based environmental consulting firms that have engaged in contract work in India. These include: EVS Environment Consultants Ltd. (engaged in environmental policy consulting work with the Confederation of Indian Industries as part of a Canadian International Development Agency project), and PN Enterprises Ltd. (waste management services). 8 There is also significant potential in the India market in the area of clean energy. As noted, Vancouver-based Cummins Westport, Inc. has begun manufacturing its natural gas engines in India. Vancouver-based Palcan Power Systems, a developer and manufacturer of proton exchange membrane fuel cell systems under 5 kilowatts, sold its hydrogen storage systems in 2004 to Bharat Petroleum Corp Ltd. to be tested by Bharat Petroleum Corp. in three-wheel and small vehicle configurations. Questair Technologies, Inc. and Ballard Power Systems are actively looking at entering the Indian market with distribution and joint venture agreements. In 2000, BC Hydro International entered into an alliance with DSCL Energy Services Company of India to work on energy conservation projects. DSCL Energy is a division of DCM Shriram Consolidated. The alliance began with projects in the building sectors, specifically hotel, hospital, and commercial complexes, and now works on projects in the powerintensive paper and sugar industries. INVESTMENT FDI in India are likely between $251 million and $834 million. It is important here to provide some context on FDI definitions used by Statistics Canada and how these might have an impact on recorded BC investments in India. Statistics Canada applies internationally accepted definitions of FDI. There are two significant elements to this definition. First, is the 10% rule — if a Canadian firm has ownership of at least 10% of the voting equity in an Indian firm, then the FDI relationship is recorded in Canada’s balance of payments statistics. The second element is the book value rule — Canadian direct investment abroad is measured from the books of the associated firm and not from the books of the Canadian investing firm. While these definitions are commonly applied internationally, they do create perverse FDI statistics. For example, Canada’s FDI stock in Barbados in 2002 was $23.9 billion — 2½ times Canada’s FDI stock in Germany and Japan, 1½ times Canada’s FDI stock in the entire continent of Asia, 36 times Canada’s FDI stock in China and 166 times Canada’s FDI stock in India, probably because of the 10% rule. On the Indian side, proposed FDI approvals from the Sub-Saharan African country of Mauritius were four times larger than approvals from Germany, three times larger than approvals from Japan, and 12 times larger than approvals from Canada. This is likely due to the book value rule. In fact, if we go by Indian approval data, Mauritius was the second-largest source of FDI in India by a wide margin! To get at the current state of play, APF Canada was contracted by Like services data, there are no official investment data at the provincial level available. On a Canada-wide basis, the total stock of Canadian direct investment in India in 2004 was $251 million while the stock of Indian direct investment in Canada was $62 million. Like statistics on trade in services, these estimates of FDI underestimate the total stock of Canadian (and BC) investment in India. By Indian accounts, total approved FDI in India from Canada from 1991 to 2003 was Rs. 28.8 billion or $834 million. Therefore, the broadest estimates of Canadian International Trade Canada to take a closer look at Canadian Investments in India. In that study, we estimated that for a very limited sample of only 43 Canadian firms, total Canadian FDI stock in India was $284 million. It should be noted that our sample of firms did not include some significant Canadian investors, particularly in the oil and gas, telecommunications and health care sectors. Further, we were able to obtain Foreign Investment Promotion Bureau data on the basis of approvals by company for Canadian (and BC) firms invested in India between 1999 and 2003. As can be seen from Table 4, the total approved Canadian FDI in India between 1999 and 2003 was $216 million. Investments in the ICT sector accounted for the largest chunk at $121 million or 56% of approved investments. It is interesting to note that FDI approvals in the health care and transportation sectors were larger than in financial services. This is likely because Indian FDI approval data does not account for reinvested earnings and short- and long-term claims of foreign investors that tend to be a large component of investments by financial services firms. Also noteworthy is that there were no approvals of FDI in the oil and gas sector which we believe from anecdotal evidence is not accurate. The one important conclusion from this approval data is that Canada’s FDI stock in India in the ITC sector is likely much larger than indicated by official Canadian statistics. The stock of FDI in the IT sector was a tiny $4 million by official measures (in 2003). However, the FDI approvals data suggests that the likely figure is at least an order of magnitude larger. Table 5 shows investment approvals in India by Canadian province. BC’s share of Canadian investment was 12.9% or $28 million in 2003. The top destination of intended investments by BC firms in India was New Delhi ($21.5 million by the Verus Group in the transportation infrastructure and services sector). This is followed by the mining sector at $4.9 million. We note that important investments by BC firms that we know established operations in India after 1999 are not included in this FDI listing (e.g., Pivotal Corp., Momentum Technologies). TABLE 4 CANADIAN FDI APPROVALS IN INDIA, 1999-2003 (IN 2003 $)* # of suppliers 11 1 3 4 4 3 2 16 3 8 2 22 79 Sector Advanced Manufacturing Technologies Aerospace & Defence Agriculture & Food Products Consulting Services Consumer Products Drugs, Pharmaceuticals & Health Care Electric Power Equipment & Services Environmental Goods & Services Housing & Building Products Information & Communications Technology Insurance, Banking & Financial Services Mining, Minerals Equipment & Services Oil & Natural Gas Transportation Infrastructure & Services Other Total FDI ($M) 1.96 0.08 0.27 0.72 37.1 0.08 0.06 121 18.8 10.2 21.6 4.0 215.9 Share of total, % 0.9 0.04 0.1 0.3 17.2 0.04 0.03 56.0 8.7 4.7 10.0 1.8 100.0 * Figures are based on approval data only and do not include reinvested earnings, shortand long-term claims and exits from the Indian market. Data includes FIPB approvals for 1998. Exchange rate: 1 Indian Rupee = $0.02863 as at December 30, 2003. Source: Asia Pacific Foundation of Canada TABLE 5 INDIAN FDI APPROVALS OF BC-BASED COMPANIES, 1999-2003 (2003 $) Name of Firm Proam Explorations Private Ltd. Can Achieve Consultings Ltd. S.C.S. Solar Computing Systems Inc., M/S Meridian Peak Resources Verus Group, Canada. Pebble Creek Resources Ltd., Canada Kryton Holdings Inc, Canada BHP World Exploration Inc, Canada Destination in India Chennai New Delhi New Delhi New Delhi New Delhi Pithoragarh (Uttar Pradesh) Rewari (Haryana) Sector Mining, Minerals Equipment & Services Consulting Services ICT Mining Transportation Mining Other Mining $ $42,945 $715,750 $35,215 $2,175,880 $21,544,075 $254,807 $239,919 $2,462,180 Source: Foreign Investment Promotion Bureau (FIPB), 1999 – 2003 data. 9 IMMIGRATION According to the 2001 Census, India was the third largest source of immigrants to British Columbia after the United Kingdom and Mainland China. In 2001, BC was home to 92,430 immigrants from India or about 29% of the 315,000 immigrants who had come to Canada from India. It is significant that 77% of these immigrants to BC from India arrived after 1990. Immigrants from the Punjab state are the main source of Indian immigrants to BC. In fact, British Columbia is home to the largest Punjabi-speaking community in the country (see Chart 2). Punjabispeakers were the third-largest community after English-speakers and Chinese-speakers in the province. One of the important effects of the high-level of immigrants from India to BC is the significant development of education services in BC catered to the needs of Indo-Canadian students. In the coming years, we expect to see a number of university colleges and other institutions actively establish programs in India and/or recruit Indian students to attend BC institutions. Abbotsford-based University College of the Fraser Valley (UCFV) will be offering its Applied Business Administration degrees at Punjab University in Chandigarh starting in September 2006. Students enrolled in the Business Administration program have the option of completing the entire program at Punjab University or complete the first two years in Chandigarh and finish the program at UCFV or at other Canadian institutions. UCFV also signed an agreement with Punjab University in November 2004 to establish a Canadian Studies Centre where both institutions would collaborate in research and promote faculty exchanges. In addition, Kwantlen University College, the British Columbia Institute of Technology (BCIT), and Malaspina University College all have active recruitment efforts in the India market and undertake coursework for students in India. In 2001, the Vancouver Film School (VFS) announced that it signed a joint venture agreement with India’s Modi Enterprises to open a school in Mumbai. According to that announcement, the nine fulltime programs and 60 part time programs of VFS focus on industries that use moving images, graphics, sound and text as fundamental components for communicating information and story. The Modi VFS Institute planned to offer courses in new media and 3D animation. It is not clear whether this project is currently underway. It is also noteworthy that for the immigrants from India who arrived in BC in the last decade, more than 80% were in the Family Class (see Chart 3). Skilled workers and business category immigrants to BC made up 15.3% and 0.8% respectively of immigrants from India to BC in the past decade (1994-2004). CHART 2 BC IS HOME TO THE LARGEST PUNJABI COMMUNITY IN CANADA 160,000 (121,740) 120,000 80,000 40,000 0 BC (110,545) (22,540) (9,900) (5,415) Ontario Alberta Quebec Manitoba Source: Detailed Mother Tongue. Ottawa: Statistics Canada. 2001 Census of Canada. Catalogue number 97F0007XCB01001. 11 December 2002. <http://www12.statcan.ca/english/census01/products/standard/themes/index.cfm>. CHART 3 INDIAN IMMIGRANTS TO BC BY CATEGORY 100 80 Percent Other Family Class Business Skilled Workers 60 40 20 0 1994 1996 1998 2000 2002 2004 Source: Citizenship and Immigration Canada (2005). 10 3. SECTORAL OPPORTUNITIES FOR BC BUSINESS FOREST PRODUCTS India’s per capita consumption of paper is around 4.00 kg, which is one of the lowest in the world. With the expected increase in literacy rates and continued growth of the economy, an increase in per capita consumption of paper is expected in the medium- and long-term. The demand for upstream market paper products, like, tissue paper, tea bags, filter paper, light weight online coated paper, medical grade coated paper, etc., is also growing rapidly. Further, the associated services related to the paper industry are likely to see an upswing in India as Indian manufacturers ramp up production. Vancouver-based Sandwell Engineering, Inc. is currently performing a detailed study for the planned expansion and modernization of the Nagaon and Cachar paper mills operated by Hindustan Paper Corporation (HPC). Despite these growing opportunities, due to India’s high tariff rates for value-added paper and wood products, we expect that primary wood products will continue to dominate the BC merchandise trading relationship with India in the short- to medium- term. Further, because of the high degree of fragmentation and commoditization in the global paper and pulp industry, the highly cyclical nature of supply and demand, and multiple distribution steps in the supply chain, almost all BC exporters rely on representatives in the region that are responsible for sourcing raw materials and have extensive industry contacts on the demand side. Therefore, while we can expect demand to be cyclical, the relative ranking of BC wood product exporters to India is not likely to change dramatically. Besides newsprint and wood pulp, Canadian secondary forest product firms are increasingly looking at the Indian market for sales of various types of value-added wood products. CASE STUDY 2 SECONDARY WOOD PRODUCTS MARKET IN INDIA: The role of BC Wood Specialty Group BC Wood is a not-for-profit trade association dedicated to growing British Columbia’s secondary wood-products manufacturing industry. Established in 1989 as a partnership between industry and government, BC Wood provides marketing programs to over 600 registered value-added manufacturers, which includes cost-shared participation in international tradeshows and events, out-going and incoming trade missions, lead generation through the World Wide Inquiry System (WWIS) and networking opportunities. BC Wood’s India program is focused on three major cities — Mumbai, Bangalore and Delhi. BC Wood’s business strategy is to focus on making successful introductions of “Made in BC” finished wood products by supporting its members in trade shows and by facilitating inquiries from Indian industry. In 2003, as part of a project contracted to APF Canada, we interviewed Bill Downing — CEO at BC Wood — on the opportunities and constraints faced by BC forest products firms in the India market. According to Mr. Downing, BC firms wanting to engage in the secondary wood products market in India face stiff competition from low-value Chinese producers and high value European manufacturers. On the regulatory side, India’s high import tariffs on finished wood products and its multi-layered bureaucracy continue to remain a problem for BC-based firms. As an example of this regulatory issue, the container carrying BC Wood’s Lifestyle Showcase, which was shipped to India late 2002 was not released until mid-2003 — a significant delay for BC Wood’s marketing campaign in India. In terms of business practices, brand familiarity with BC wood products was rated by Mr. Downing as the number one factor restricting BC value-added wood exports into the Indian market. Finding reliable partners was also rated high as a constraint to continued operations in India. 11 The BC Wood Specialty Group — a public-private partnership is a dedicated resource to provide market information and assistance to BC wood products firms looking to enter the lucrative but competitive Indian wood products sector. Cascadia Forest Products Ltd. (which was established as a result of Brascan Corporation’s May 2005 acquisition from Weyerhaeuser of certain assets) and Coast Clear Wood Ltd. (a division of the Probyn Group which has Tom Sundher — a principal at LS Sundher Ltd.— as its general manager) are thought to have sold value-added wood products to India in the recent past. Here too, however, interviews revealed a number of constraints facing BC value-added wood exporters in the Indian market. As we show in the Case Study on the previous page, India’s high tariff rates for value-added wood products, the emphasis of BC industry on softwood (rather than hardwood which is popular in India), and lack of brand equity are all important constraints for BC value-added wood exporters in the Indian market. MINING, MINERALS AND FUELS this restricts the quantity and quality of ore produced. Further, supportive infrastructure for a growing metals industry — such as roads, logistics, ports, etc. — is sorely lacking. A number of BC-based firms are engaged in the mining sector in India both on the exploration side and in providing mining-related services. On the exploration side, Pebble Creek Resources, Ltd. has been long engaged in the India market through its Indian subsidiary, Adi Gold Mining Private Limited, which holds 100% of mineral rights covering the Askot deposit of copper, gold, silver, zinc and lead in Uttaranchal State in Northern India. North Vancouverbased Proam Explorations Corp. has also invested in India, in Chennai, for mineral exploration rights in Tamil Nadu, Andhra Pradesh, Madhya Pradesh and Kerala states. Other firms involved in mining exploration in India include Meridian Peak Resources Corp. and BHP World Explorations, Inc. (while BHP Billiton is an Australian company, BHP’s Indian venture is recorded in Indian approval data as a Canadian investment out of Vancouver). Vancouver-based Golden Patriot Mining Inc. announced the signing of an agreement with Binani Industries Ltd. and RBG Minerals Industries Ltd., for the development of the Ambaji copper-zinc-lead project located in the states of Rajasthan and Gujarat in 2004. Under this agreement, Golden Patriot will have the right to earn a 32.5% interest in the Ambaji project. Its equity contribution will amount to US$3.7 million, and it must identify and arrange US$11.6 million in debt financing for the project. In addition to these exploration companies, BC-based firms have also benefited from mining-related goods and services demand from India. Langley-based Knelson Concentrators produces a wide array of precious metals processing equipment that has been sold in the Indian market. Richmond-based Seabulk Systems Inc. installed a self-unloading sea bulk transhipper in Marmagao, Goa, where it is being used to transfer iron ore into cape size ocean-going vessels. Delta-based Westcoast Drilling Supplies Ltd. has also supplied the Indian oil and gas exploration market with drilling fluids, equipment, and accessories. A review of recent mineral forecasts by BC-based mining firms point to the expectation that rising demand for minerals from India (and China) together with supply constraints will continue to benefit BC firms engaged in non-ferrous metal and mineral mining in BC. However, the most important positive impact will likely be indirect price effects. More significantly, there are some structural constraints in the Indian mining sector that spell opportunity for BC-based firms. Most Indian mines have very little automation and 12 4. CHALLENGES AND PROSPECTS India represents an increasingly important market for BC and this market is bound to grow in the medium- to long-term. While BC merchandise exports to India have been dominated by forest products and mineral ores, our past analyses have shown that official trade data do not effectively capture the dynamic nature of Canadian business activity in India. The same is the case for commercial activity by BC-based firms in India. In Annex 1 we provide a listing of about 80 BC-based firms and institutions that have been involved in India-related trade and investment, including some of BC’s largest and most dynamic firms. The implication of our analysis is that BCbased firms are fully aware of India’s market potential and have taken steps to ensure that they tap into this opportunity. At the same time, an analysis of current business activity may not reveal future potential areas in which BC-based firms can participate in India’s growth. Here, we identify three sectors in which we feel that there may be further potential for BC-based firms to engage in the India market. TELECOMMUNICATIONS million land-lines and mobile subscribers in the next five years. Growth in the mobile telephone market and investments by India’s business process outsourcing (BPO) industry catered to the telecom industry will be particularly rapid. India will soon be the third-largest mobile phone market in the world. The total mobile subscriber base in India touched 43.3 million in May 2005 according to the Cellular Operators Association of India (COAI) with 1.3-1.5 million new subscribers signed up each month. At present, the Indian market is ranked sixth after US, Britain, Germany, China and Japan. Responding to this large investment and demand requirements, India has increased the FDI limit in the telecom sector to 74% from 49%. Mergers and acquisitions in telecommunications are expected to gather momentum after the government’s decision to hike FDI caps and the likely sale of Reliance InfoComm, India’s largest GSM operator. In practice, many telecom operators actually have 74% overseas equity since India already allowed 49% direct foreign stake and another 25% through a complex holdingcompany route. Import duties totaling 15% on mobile switching centres were eliminated in last year’s budget and specified items used in the manufacture of mobile handsets have also been exempted from import duties. Pending regulatory changes will further encourage increasing domestic and foreign investment in this sector. On the demand side, the telecom industry lobbied hard for the recommendations of Telecom Regulatory Authority of India (TRAI) last year to reduce charges on domestic leased lines by as much as 62%, in order to boost Internet and broadband usage in India. On the supply side, the telecom industry welcomed the government’s move to slash licence fees for national telecom infrastructure providers to 6% of their gross revenues from the previous 15%. The hotly competitive telecom sector is heavily taxed by the government, which collects close to a third of the industry’s revenue as various taxes, including permit and spectrum costs. These changes are expected to boost demand for telecom services. As noted, there are several BC-based firms engaged in this sector that will likely see increased demand for their goods and services, including Sierra Wireless, Empower Technologies and IntraCoastal System Engineering Corporation. However, the sheer size of demand and growth in India’s telecom space provides significant opportunities for firms ranging from systems integrators to software developers to hardware manufacturers to invest in and supply the Indian telecom market. Simply put, the list of BC-firms engaged in this sector needs to be much longer. ENTERTAINMENT By 2010, India’s investment requirement in its telecom sector is estimated to be around US$ 70 billion. The stated objective of India’s National Telecom Policy is to increase India’s tele-density to 15% by 2010 (from the current 7% land-line density and 3.5% mobile density). This translates roughly into infrastructure and service requirements for an additional 90 When one thinks of India, Bollywood is as much an icon of India’s image overseas as the Taj Mahal or the Bengal tiger. India leads the world in the output of movies, with more than 800 produced annually. These films command a religious following within India and are increasingly becoming popular abroad, particularly in West Asia, Europe and North America. But the entertainment sector in India is much 13 larger than just films and the highest growth potential exists in emerging sectors like television and animation in which BC-based firms are considered to be industry leaders. In 2003, revenue of the Indian entertainment industry grew by 15% to an estimated US$4.3 billion. According to a study by Ernst & Young, revenues in India’s entertainment sector are projected to increase by over 120% by 2008 with some of the largest increases occurring in the film (124%) and television (124%) segments. Underlying this growth are some key trends that bode well for BC companies and institutions. The way in which Bollywood films and Indian television is funded has changed significantly since the first Indian movie was filmed in 1896. Long the domain of India’s underworld, there is a significant trend toward new and transparent sources of financing. These include equity financing; financing by cable and satellite television networks; venture capital financing; financing by foreign institutional investors (including Canadian); and film insurance. One of the first foreign financing arrangements in the Indian entertainment industry was the Caisse de dépôt et placement du Québec’s (CDPQ) 31% equity stake in UTV two-and-a-half years ago valued at US$ 9.4 million. UTV is considered to be a leader in the Indian entertainment sector and is involved in TV content, movies, and animation. This move toward corporatization of India’s film and television segments has led to other important trends that will continue to have an impact 14 on BC suppliers and investors. One of these is the so-called “multiplex phenomenon.” Starting with one multiplex in Delhi in 1997, it is estimated that there are now over 115 multiplexes in India today with another 45 planned for the years to come. Feeding into this trend is a Canadian firm, the IMAX Corporation, that expects six IMAX theatres to be open in India by 2006. In April 2003, IMAX signed an agreement for three theatres which represented the largest international multiple theatre deal that IMAX has made in the last three years. Another trend that will have an impact on BC firms is the advent of digital technology for the projection of films in theatres. In 2002, the Indian government reduced the basic duty on certain studio equipment following which it is estimated that roughly 90 cinemas have been converted to digital projection. Digital projection provides distributors faster time to market, a wider release of films, anti-piracy technology and significantly lower costs. A final trend that will have an impact on Canadian firms and educational institutions is in India’s high growth animation sector. A recent survey by India’s National Association of Software and Service Companies (NASSCOM) suggests that the size of the Indian animation industry is only about US$500 million with an estimated 3,000 trained animators. This can be compared to an estimated 40,000 trained animators in South Korea and the Philippines and about 8,000 trained animators in China. As Indian animation houses begin to evolve from the traditional model of low-value added outsourced animation work to animation coproduction, they will be looking for established international partners and trained technicians capable of delivering creative animation services to international standards. Here again, BC is at the leading edge. Not only is Canada’s co-production framework viewed as an opportunity by Indian industry analysts; BC’s animation educational institutions are highly regarded in India and around the world. Our industry analysis suggests that a number of educational institutions are actively looking at establishing partnerships with Indian institutions to deliver animation training in India. An active and sustained BC governmentindustry-educational institution collaboration in the animation sector will yield significant dividends for BC’s commercial ties in a fastgrowing sector of the Indian market. BIOTECHNOLOGY If trade shows, industry reports, and newspaper articles are any indication of growth prospects, India’s nascent biotechnology sector is at the cusp of what has been described by many as India’s “gene revolution.” According to a report published recently by India’s Association of Biotechnology Led Enterprises (ABLE), the biotechnology sector in India achieved a 39% growth rate in 200304 with a turnover of US$700 million. This finding is confirmed by Ernst & Young’s 2004 Global Biotechnology Report in which analysts expect India’s biotechnology sector to register US$5 billion in annual revenues by 2010. The Indian biotech industry is expected to cross the psychological US$1 billion mark in 2004-05. Biopharma continues to be the largest sub-sector within India’s biotech industry, with 76% of total sales. Bio-services was the next biggest segment (8%), followed by bio-industrials (8%), bio-agriculture (5.5%) and bio-informatics (2.5%). Industry sources suggest that Indian biotechnology firms have the potential to follow in the footsteps of India’s IT firms to become the next growth engine for Indian exports. For example, Indian firms were responsible for submitting nearly 21% (73 of 350) of all abbreviated new drug application to the US Food and Drug Administration (FDA) last year. Indian companies also accounted for 25% of submission to FDA’s Drug Master File (DMF) in the fourth quarter of 2003. DMF approval is a prerequisite for exporting a drug to the US, providing details about a company’s facilities for manufacturing, processing and storing drugs. India also has 70 FDA-approved plants and 200 manufacturing facilities certified as having good manufacturing practices, more than any other country outside the US. To be sure, there are three important secular trends taking shape in India that point toward an increasing role for the country in the global biotechnology value chain. First, India is gradually building the critical mass in terms of the human capital crucial for this sector. It has a large scientific talent pool of some 15,000 bio-scientists employed in 40 National Research Laboratories. Further, it has 300 college-level institutes offering degrees and diplomas in biotechnology, bioinformatics and the biological sciences. Second, India has a relatively low cost base. Salaries of skilled professionals and PhDs are as much as 90% lower in India than in the US. This low cost base has a particularly important impact on the cost of drug development, which is largely attributable to the expense of conducting clinical trials and research. Here, Indian Clinical Research Organizations (CROs) have been actively developing partnerships with global pharmaceutical firms in anticipation of policy changes that will enable clinical trials to be carried out in India on equivalent lines to those conducted elsewhere. Third, the Indian biotech sector is poised to benefit from some significant regulatory changes currently underway in this sector. The recently announced Foreign Trade Policy provides for the setting up of Biotechnology Parks (BTPs) across the country. Firms located in these parks would have the advantage of being treated as Export-Oriented Units and would be exempt from paying the service tax (which was raised to 10% in the most recent budget). Biotechnology firms in these parks would also be eligible to import capital equipment on a selfcertification basis, and biotech exporters with a minimum turnover of about US$1 million and a good track record are exempted from showing bank guarantees. Further, changes in clinical trial regulatory policies are promoting, in one executive’s words, a “clinical research culture” in India. These include: regulatory changes to promote Good Clinical Practice training, removal of India’s import duties for clinical-trial related equipment, freeing of restriction on simultaneous global clinical trials, and speedy study start- up times. To address lengthy study approval times, India’s Drug Controller General, a division of the Ministry of Health is also streamlining its trial approval process. What this means for BC-based biotech firms is that India offers not only a market for exports of pharmaceutical products but a source to reduce costs involved in drug research and development. Few BC-based biotech firms have yet looked at the Indian market in this manner, and again, focusing on this sector will be an important strategic issue for the province in its efforts to promote BC as a knowledge economy. 15 ANNEX 1: BRITISH COLUMBIA COMPANIES ACTIVE IN INDIA COMPANY NAME Global Fruits Inc. Okanagan Similkameen Cooperative Growers Intrusion Prepakt BC Ltd. Kryton Holdings, Inc. Ram-Pac Industries Ltd Power Measurement, Ltd. Cummins Westport, Inc. Ebco Industries Ltd. Minaean International Corporation Applied Microsystems Ltd. ComNav Marine Ltd. Knelson Concentrators Interwrap Industries Corp. Spectrum Signal Processing Inc. Cranberry Construction Services Ltd Pacific Institute of Holistic Living TTA Technology Training Associates Ltd Campbell AgriBusiness Strategists Maradadi Pacific Canadian International College Kwantlen University College Malaspina University College School District #42 (Maple Ridge – Pitt Medows) University College of the Fraser Valley Vancouver Community College Terasen Inc. AldrichPears Associates Aplin & Martin Consultants Ltd CMC Engineering Group Lea International, Ltd. ND Lea Consulting Ltd. Sandwell Engineering, Inc. Seabulk Systems, Inc. Trow Consulting Engineering Ltd Aqua-Guard Spill Response Inc. EVS Environment Consultants Ltd Hydroxyl Systems Inc. NORAM Engineering & Constructors Ltd. PN Enterprises Ltd. Versatech Products Inc. Rogers Foods Ltd. Abitibi-Consolidated Inc. Canfor Corporation Cascadia Forest Products Ltd. Coast Clear Wood Ltd. Howe Sound Pulp & Paper Ltd. CORPORATE HQ LOCATION Davao City, Philippines Oliver Mission Vancouver New Berlin, Wisconsin Saanichton Vancouver Richmond Surrey Sidney Richmond Langley Mission Burnaby Powell River Vancouver Vancouver Vancouver Powell River North Vancouver Surrey Nanaimo Maple Ridge Abbotsford Vancouver Vancouver Vancouver Surrey Vancouver Toronto/Vancouver Vancouver Vancouver Richmond Burnaby North Vancouver North Vancouver Victoria Vancouver Surrey Richmond Armstrong Montreal Vancouver Vancouver New Westminster Port Mellon INDUSTRY SECTOR Agriculture - Fruits Agriculture - Fruits AMT AMT AMT AMT— Energy Management AMT— Engines AMT— Equipment AMT— Housing/Construction AMT— Marine Instrumentation AMT— Marine Instrumentation AMT— Metal Processing Technology AMT— Packaging Solutions AMT— Wireless Networks Construction Consulting Consulting — Human Resources Consulting — Management Diversified Education Services Education Services Education Services Education Services Education Services Education Services Energy Engineering Consulting Services Engineering Consulting Services Engineering Consulting Services Engineering Consulting Services Engineering Consulting Services Engineering Consulting Services Engineering Consulting Services Engineering Consulting Services Environmental Goods & Services Environmental Goods & Services Environmental Goods & Services Environmental Goods & Services Environmental Goods & Services Environmental Goods & Services Food — Consumer Goods Forest Products Forest Products Forest Products Forest Products Forest Products 16 ANNEX 1: Norske Skog West Fraser Timber Co. Ltd. Weyerhaeuser Company Ansatel Communications Inc. Sierra Systems Group, Inc. Momentum Technologies Pivotal Corporation Datawest Solutions Inc S.C.S. Solars Computing Systems Inc. Midnet (Canada), Inc. Empower Technologies, Inc. Sierra Wireless, Inc. Can Achieve Consultants Ltd. Royal Indian Raj International Corp Borden Ladner Gervais BHP World Exploration Inc. Golden Patriot Mining, Inc. Meridian Peak Resources Corp. Proam Explorations Corporation Teck-Cominco Pebble Creek Resources Ltd. Westcoast Drilling Supplies Ltd. International Play Company, Inc. Singh, Abrahams and Joomratty (SAJ) Syndel Laboratories, Inc. IPCS International Inc Quester Tangent Verus Group Uniglobe Travel (International) Inc. Lysaker, Norway Vancouver Federal Way, Washington— USA Vancouver Vancouver Vancouver Vancouver Vancouver Reno, Nevada / Vancouver Richmond Richmond Vancouver Vancouver Vancouver Vancouver Vancouver Vancouver North Vancouver Vancouver Vancouver Delta Langley Surrey Vancouver Surrey Sidney Vancouver Vancouver Forest Products Forest Products Forest Products ICT — Telecommunications ICT— Consulting ICT— Outsourcing ICT— Outsourcing ICT— Software ICT— Telecommunications ICT— Wireless ICT— Wireless Immigration Consulting Infrastructure Technology Legal Services Mining Mining Mining Mining Mining— Copper Mining— Exploration Oil & Gas Other (Play Structures) Other Services (Legal) Pharmaceuticals and Animal Health Products Project Management and Marketing Transportation Infrastructure & Services Transportation Infrastructure & Services Travel Services Portland, Oregon— USA / Vancouver ICT— Software ANNEX 2: BUSINESS-FOCUSED INDIA-CANADA ORGANIZATIONS IN BC CONTACT Valli Chettiar, President Andy Sidhu, President Ab Berar, President Vivek A. Savkur, Chairman Ken Dhillon, President Daljit Sidhum, President Hardev Bal, Director Randy Garg, President Ted Singh, President PHONE 604-661-1006 604-852-2288 604-266-8073 604-303- 0509 604-377-9015 604-515-5771 604-324-5711 604-327-5696 604-878-1843 604-785-5023 ASSOCIATION NAME Canada India Business Council (BC Chapter) Fraser Valley Indo-Canadian Business Association Indo Canada Chamber of Commerce (BC) Indo Canadian Business Chamber Indo-Canadian Business Association Punjabi Market Association Sino-Indo-Canadian Business Association The Indus Entrepreneurs (Vancouver) The Society of Punjabi Engineers And Technologists of British Columbia North American Association of Asian Professionals - Vancouver Bernard Seo, President 17 NOTES 1. Merchandise trade statistics are adapted from Trade Data Online. Industry Canada. 24 August 2005. <http://strategis.ic.gc.ca/sc_mrkti/tdst/ engdoc/tr_homep.html>. 2. Assanie, N. and Woo, Y.P (2003). . Maturing Canada-India Services and Investment Linkages. APF Canada: Vancouver. 3. See Assanie, N. and Woo, Y.P (2003). . What Works, What Doesn’t in the Indian Market. APF Canada: Vancouver. 18
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