Introduction CII. Confederation of Indian Industry

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2 Introduction CII Confederation of Indian Industry ( CII), The Apex Chamber of commerce, CII charts change by working closely with Government on policy issues, interfacing with thought leaders, and enhancing efficiency, competitiveness and business opportunities for industry through a range of specialized services and strategic global linkages. It also provides a platform for consensus-building and networking on key issues. CII has extensive experience in organizing and enabling Trade Fairs and product / service exhibitions and can provide necessary hosting support and marketing of such events through various information dissemination channels.

3 Advantage India Fast growing economy Stable Government Government focus on Make in India and Ease of doing business Tax reforms and focus on good Governance Rapidly growing industrial and logistics infrastructure (ports, rail, road and air) Skilled labor and talent World s largest young population Buoyancy in local demand

4 India: A Large Middle Income Economy GDP at purchasing power parity, 2017 (Trillion US$) China US India Japan Germany Russia Indonesia Brazil UK France Mexico Italy Turkey Korea India s nominal GDP is about $2.6 trillion in US Germany GDP Per Capita at PPP, 2017 (US$) UK France Japan Russia China Brazil South Africa 7183 India India s GDP is has surpassed France to become the sixth largest economy. India has doubled its per capita income in the last ten years (2006 to 2016) In purchasing power parity terms, India is the 3 rd largest economy Source: IMF WEO April 2018 database

5 India s Trade in Services Foreign services trade Exports and Imports (USD Billion) FY2013 FY2014 FY2015 FY2016 FY2017 FY2018 Exports Imports Total Trade Construction, 1% Others, 13% Insurance, 1% Financial Services, 3% Transport, 9% Travel, 14% Construction, 1% Insurance, 2% Financial Services, 5% Exports of services, Software Services, 40% Business Services, 19% Imports of Services, Others, 25% Transport, 15% Software Services, 4% Business Services, 31% Travel, 17% Source: Ministry of Commerce and Industry, RBI

6 Foreign Investment Inflows Improved after FDI Reforms Foreign Investments- FDI and FPI (USD Billion) Increased FDI Limits Eased sourcing norms The government has increased FDI limits in sectors like Defence, railways, insurance, construction, pharmaceuticals and medical devices. Sourcing norms have been relaxed for companies engaging in single brand retail trade of products having cutting edge and state-ofthe-art technology. FY FY14 FY15 FY16 FY17 Foreign Direct Investment Foreign Portfolio Investment FY18 Automatic approval for most sectors Investment in most sectors is under the automatic route, except a small negative list, making India one of the most open economies in the world for FDI.

7 IETF the B2B Technology Event IETF CII s Flagship event held every alternate year since 1975 at New Delhi, India First Business Show in India by CII Initially held with engineering as major focus Attracted overseas Participation = 1983 onwards Partner Country Concept = 1985 Groomed as the comprehensive International B2B show Covers wide range of industry sectors as focused shows Large overseas participation Presence of decision makers from Government & Industry Concurrent Events Summits/Seminars/Networking gatherings Special programme by Partner Country (Exclusive Partner Country Day)

8 Meeting Place for a Better Market Access MANUFACTURING SERVICES IETF GOVERNMENT & POLICY MAKERS INDUSTRY/TRADE BODIES INNOVATION & FUTURE TECHNOLOGIES START UP

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10 IETF RD INTERNATIONAL ENGINEERING & TECHNOLOGY FAIR IETF 2019 SHOWS: 1. GREEN MOBILITY XPO 2. INDIA POLLUTION PREVENTION EXPO 3. IIARE ND INDIA INDUSTRIAL AUTOMATION AND ROBOTICS EXPO 4. THE LOGISTICS EVENT OF INDIA-LOGISTICS 5. METAL & METALLURGY REAL ESTATE & BUILDING TECHNOLOGY CONCURRENT SHOWS: 1. AI-INDIA EXPO-2019 (INDIA S MEGA ARTIFICAL INTELLIGENCE SHOW) 2. INDIA GAMING SHOW KNOWLEDGEXPO HEALTHTECH INDIA-2019

11 Industry Perspective on India s Logistics, Material Flow, Supply Chain

12 Recent Developments in Logistics Sector 2018 Logistics Department was established under Ministry of Commerce and Industry to oversee development of National logistics policy Infrastructure status granted for elements of Logistics such as warehouses, Cold Chains, Logistics Parks etc., Logistics Ease Across Different States index was published GST and e way bill were implemented Initiated integrated logistics portal development with a vision to create transactional marketplace Sustained skill development initiatives through Logistics Sector Skill Council

13 Logistics Development in India Estimates indicate that Indian logistics sector has grown at ~1-1.5x India s GDP growth and will continue growing India s World Bank Logistics Performance Index (LPI) indicates that India moved up from LPI rank 54 in 2014 to 35 in 2016.

14 Logistics Sector & Employment Logistics sector is considered to be among the top 5 employers in the nation The Indian logistics industry provides employment to more than 22 million people

15 Logistics Market Segments Freight Forwardi ng 10% Distribut ion 5% The country's logistics industry which is worth around USD 160 billion is likely to touch USD 215 billion in the next two years with the implementation of GST. It is Warehou sing 25% Transport ation estimated at a CAGR of 10.5%.

16 Warehousing Market Agricultural Warehousing Industrial Warehousing For storage of Rice, Wheat, Fruits, Vegetables, Cotton etc. For storage of Cement, POL, Fertilizer, FMCG, Auto components etc. Cold Storage Bulk Storage Public/Private Warehouse CFS/ICS Warehousing market is expected to grow at CAGR 10% till 2020 in India

17 8 Top Warehousing Hubs

18 Warehouse Growth Increasing need for mechanization and automation

19 Warehousing Investments Sectors like Agriculture and Food Supply Chain will see a dramatic shift going forward More than USD 33 billion need to be invested in this sector to set up warehousing. Warehousing growth will be supported by growth in e-commerce and logistics parks and the rising demand for modern warehouses. Post GST, manufacturers are likely to consolidate warehouses to improve efficiency.

20 Key Players in MHE Market Action Construction Equipment BEML Bevcon Wayors Demag Cranes & Components (India) Elecon Engineering Company Escorts Construction Equipment Godrej & Boyce Manufacturing Company JCB India ElectroMech Material Handling Systems (India) McNally Bharat Engineering Company Saico Group Tata Hitachi Construction Machinery Company ThyssenKrupp Industries India Tractors India Voltas Material Handling (KION).

21 Golden Quadrilateral (NHAI) Connecting Chennai, Kolkata, Delhi & Mumbai Encouragement to truck transport Faster transport Industrial and job development Reduce logistics wastage

22 Bharat Mala The ambitious highways development project subsuming all road projects in the first phase will see the construction of 20,000 km of highways

23 The Growing Indian Maritime Sector Seaborne trade has grown at twice the global growth rate of 3.3% USD 2.6 Bn invested in Ports and Shipping sector between 2011 and 2014 Container trade has grown at 6.5% - higher than world average of 5.4% projects for investment identified in Indian maritime sector Cargo traffic at Indian ports has doubled to 1 billion tonnes per annum from FY Opportunities for investment of USD 19 Billion in Inland Waterway development and USD 50 Billion in Port-led Development under Sagarmala Source: Maritime summit 2016

24 Inland Waterways Reduce logistics cost of inland transport, relieve congestion on roads and railways Support manufacturing activities in hinterland states 4 waterways currently under development: Ganga, Brahmaputra, Mahanadi, Buckingham Canal NW1 already in use for coal transport from Haldia to Farakka

25 Coastal Shipping The Opportunity Cost for coastal shipping is US 0.3 cents per tonne km compared to US 2.3 cents for railways and US 3.8 cents for road Coal, cement, POL, food grains, steel and fertilizers are the key commodities with significant growth potential Potential to lower logistics cost in the economy by USD 33 bn USD 42 bn by 2025 Coastal shipping can be a catalyst for coastal industrial clusters

26 Prominent Ports of India

27 Sagarmala Port Led Development Undertake development of Coastal Economic Zones with projects like- port based industrialization, coastal tourism, Logistics parks, warehousing, fisheries etc. Port Infrastructure Enhancement Action points on transforming existing ports into world class ports by developing deep drafts, mechanization of existing berths, creation of new capacity & greenfield ports Efficient Evacuation Expansion of rail / road network / inland waterways connected to ports & identification of congested routes Find optimized transport solution for bulk and container cargo

28 Sagarmala Vision Reducing the cost of transporting domestic cargo through optimizing modal mix Optimizing time/cost of EXIM container movement Reduction of logistics cost for EXIM & domestic trade with minimal infrastructure investment Lowering logistics cost of bulk commodities by locating future industrial capacities near the coast Improving export competitiveness by developing port proximate discrete manufacturing clusters

29 Dedicated Freight Corridors (Railways) Mega project worth USD 12 bn Will decrease unit cost of freight, currently at 2-3x that of developed countries Separation of passenger and freight traffic to result in higher speeds (75 km/ hour) and improve efficiency (cut travel time by 66%) Expected commissioning Dec 2017 to Dec 2019 excluding PPP stretch

30 Optimization of Logistics Cost Elements of Logistic Cost in India Handling & Warehousing, 9% Customer Shopping, 6% Optimization might be achieved by: Minimizing Losses Efficient storage facilities - warehouses Unbroken Cold chain Packaging, 11% Losses, 14% Transportation, 35% Effective Planning of WH positioning Locating warehouse in optimal locations keeping in mind both supply and distribution networks. Reducing transportation cost Efficient transportation fleet Shifting to cost efficient transportation mode Effective inventory management Extensive use of RFID Tagging Professional Management of inventory Inventories, 25%

31 Transport Modal Mix (%) Source: CII & CARE

32 3PL Growth Estimates The Indian manufacturing sector spends 2-20% of its revenue on logistics About 40 % of the logistics activities outsourced currently

33 MMLP Multi Modal Logistics Park Key Benefits Transportation cost reduction Pollution reduction Congestion reduction Warehousing cost reduction

34 Agri and Cold Chains Food processing industry, is largest industry sector in the country Estimated worth of USD 121 billion Market structure Organized segment (25%) Small scale segment (33%) Unorganized segment (42%) - contributes to 32% of the country s total food processing market

35 Cold Chain Requirement & Gap Source: All India Cold-chain Infrastructure Capacity Assessment of Status & Gap, 2015, NCCD

36 Govt. Support (Cold Chains) Financial assistance of 35% to 50% of admissible cost of projects Low interest loan from warehousing infrastructure fund (NABARD) 100% FDI through the automatic approval route, and ECB route open Credit linked Subsidy to 35% to 50% of admissible costs (MIDH) Rewards of endless Demand, Smart-Bridge between rural & urban, reduce Food loss Growing market for Fresh Fruits and Vegetables, domestic and international Option to avail of Negotiable Warehousing Receipts as per WDRA norms Investment Linked 150% Tax Deduction (Section 35-AD of IT Act)

37 Few PE investments ( ) DP World pledged USD 1 Billion, this will be in addition to existing USD 1 Billion to tap opportunities in infrastructure space in India

38 Ecommerce and Packaging opportunity Ecommerce retail logistics Ecommerce industry is expected to cross $100 billion mark by 2020 Ecommerce retail logistics is estimated to be USD 1.35 billion market 36% CAGR (5 years) 1.9 million shipments a day Market share Captive logistics arms: 49% Traditional LSPs: 23% Ecommerce retail focused LSPs: 28% Packaging India is considered world s 4 th largest packaging industry USD 24.6 billion revenues and a growth rate of 13% to 15% annually. Expected to reach USD 32 billion by 2020 The growing organized retail sector has been a significant driver of the growth of the Food & Beverage industries, which in turn drives the growth of Indian packaging industry (flexible packaging). In terms of packaging material, Glass and Rigid Plastics will be among the major share gainers, with share growth of 0.7% and 0.6% respectively during Source: CII KPMG report, 2018 Source: Research and Markets

39 Indo Japan Relations Administrative Relations Diplomatic ties between Japan and India were established in April 1952 when the peace treaty was signed between the two countries post World War-II. The 60 th anniversary of the signing of the Cultural agreement between the two nations was celebrated in Japan announced its Country Assistance Policy in 2016, Providing Official Development Assistance(ODA)to build India s Critical Infrastructure and address social and environmental issues resulting from rapid growth. Special strategic and Global Partnership between the two countries aim to build a deep and broad-based collaboration in areas like defence, power, biotechnology and security and connectivity in the Indo-Pacific region.

40 Opportunities for Joint Initiatives with CII Establishment of Logistics Academies to promote nationwide logistics literacy Establishment of Indo-Japan Supply Chain Centre of Excellences in industrial corridors Delhi Mumbai Industrial Corridor Project Chennai Bangalore Industrial Corridor Mumbai-Bangalore economic corridor Drive logistics standards (equipment, services and facilities) to promote competitiveness in foreign trade

41 THANK YOU