ecgc - d&b india's leading exporters 2015

Saturday, 7th March 2015Trident Hotel, Nariman Point, Mumbai

(L-R): Shri Kaushal Sampat, President & Managing Director India, Dun & BradstreetSmt. Geetha Muralidhar, Executive Director (CMD-additional charge), ECGC Limited

Smt. Nirmala Sitharaman, Honble Minister of State (Independent Charge) for Commerce & Industry, Government of IndiaShri Arvind Mehta, IAS, Joint Secretary, Department of Commerce, Ministry of Commerce & Industry, Government of India

Shri Ranjan Dhawan, Managing Director & CEO, Bank of Baroda

Launch of ECGC - D&BIndias Leading Exporters 2015

IndiasLeading

Exporters2015

Dun & Bradstreet

Risk Management Solutions

Sales & Marketing Solutions

Learning Solutions

Economic Analysis Group

IndiasLeading

Exporters2015

Dun & Bradstreet

Risk Management Solutions

Sales & Marketing Solutions

Learning Solutions

Economic Analysis Group

Indias Leading Exporters 2015Published in India by Dun & Bradstreet Information Services India Pvt Ltd. (D&B) Registered OfficeICC Chambers, Saki Vihar Road,Powai, Mumbai - 400072.CIN: U74140MH1997PTC107813Tel: +91 22 6676 5555, 2857 4190 / 92 / 94Fax: +91 22 2857 2060Email: [email protected]: www.dnb.co.in

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Editor Pawan Bindal

Sub-Editor Naina Acharya, Rohit Singh, Yogesh Jambhale

Editorial Team Arun Singh, Karishma Desai, Mihir Shah, Sneha Talreja, Swatti Mathur, Omesh Kandalkar, Seema Nair, Christopher DSouza, Ankit Kemmu, Amol Lad, Rohit Pawar

Sales Head Jayesh Bahadur

Sales Team Nittin Maheshwari, Pankaj Sharma, Sunena Jain, Vini Saluja, Sarita Sharma, Surabhi Koul, Tanya Bedi, Apoorwa Tyagi, Aloka Chatterjea, Rakesh Goyal, Pooja Arya, Rashmi Shetty, Sindhu Ravi

Operations Team Nadeem Kazi, Prem Kumar, Ankur Singh, Sumit Sakhrani, Rajesh Gupta, Parmeshwar More, Saadat Shaikh

Design Team Mohan Chilvery

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Indias Leading Exporters 20153rd EditionISBN No.: 978-93-82060-64-2

Contents

Key Messages ..................................................................................I-V

Foreword ....................................................................................... VII

Preface .............................................................................................IX

Methodology ...................................................................................XI

Overview of Exports ..................................................................... XVII

Trends in Commodity Exports .................................................... XXIX

Make in India, Make for the World ............................................ XXXIX

Experts View and Interviews .....................................................E1-E6

Listings ...................................................................................... L1-L71

Profiles of Award Winners .......................................................... 1-59

Advertorial ................................................................................. 61-84

Abbreviations ........................................................................... 86-91

Index ...............................................................................................93

Contents

MESSAGE

It gives me great pleasure to announce the launch of the publication ECGC-D&B Indias Leading Exporters 2015. In fact, the theme for this years awards and publication - i.e. Make in India, Make for the World could not be more apt.

The Make in India program is designed to encourage and develop the Indian manufacturing sector on the strength of innovation, skills and world-class infrastructure. In doing this, our objective is to produce goods and services of high quality, and to enhance our competitiveness in the global arena. Even as we do so, there is a need for creating more national and international platforms where the achievements of Indian exporters can be highlighted.

In this context, I compliment ECGC and Dun & Bradstreet for producing this publication which will serve as a useful compendium of high performing exporters in India. The publication and the corresponding awards would serve to narrate the success stories of these exporters and also encourage young Indians to take up entrepreneurship.

Within the exports sector, the role of MSMEs is crucial. MSMEs account for ~43% of the countrys total exports. I am glad to note that the publication and the awards have special emphasis on the MSME sector.

The Government is focused on enabling our entrepreneurs to do better nationally as well as globally. We are undertaking a range of initiatives that would make doing business easier and also help enhance our competitiveness through focused investments in infrastructure i.e. ports, railways, roads, power and industrial zones. We have also setup portals such as indiantradeportal.in, where the entrepreneurs can access information about our foreign trade policies, FTAs, and other trade related matters. We are confident that working together, the Government, Institutions and Industry can leverage on exports as a prime driver of economic growth, employment and social progress.

Through this publication, I extend my best wishes to exporters across the country and my congratulations to the award winners. Importantly, I would appeal to the youth of the country to pursue their dreams with passion and focus on excellence. I am confident that todays aspiring exporters will be tomorrows leading exporters.

MESSAGE

I am glad to know that ECGC in association with Dun & Bradstreet, have launched the 3rd edition of the Indian Exporters Excellence Awards. The awards and the associated publication ECGC-D&B Indias Leading Exporters 2015 are a testimony to the contribution of the export sector to Indias economic growth. I compliment ECGC and D&B for taking up this initiative.

The Government is committed to supporting Indian exporters, especially the MSMEs through a variety of policies and programmes. The Make in India initiative makes a special mention of 25 sectors, and exports are a significant dimension in most of these sectors.

We encourage Indian exporters to adopt advanced technologies, acquire high-end skills, and also to reach out to the global market through a variety of marketing channels. It is to the credit of the exporting community that Indias merchandise exports as a proportion of GDP have increased from 4.3% in 1998 to 20.7% in 2014.

An important aspect of the growing share of exports to GDP is the diversification in Indias exports. We have seen that the share of exports to non-traditional markets such as Africa, Asia and Latin America have been growing steadily. On the product side, Engineering Goods, IT & Business Services, and Petroleum Products have shown significant growth in contribution to the export basket.

I am informed that the publication and the awards have tracked these trends and recognized exporters excelling in focus markets and in focus products.

I congratulate all the award winners on their achievements and extend my best wishes to all aspiring entrepreneurs. I am confident that the export sector will continue its forward march and contribute to our countrys economic development in years to come.

MESSAGE

I congratulate ECGC and D&B on successfully conducting the 3rd edition of Indian Exporters Excellence Awards. The awards programme and the publication ECGC-D&B Indias Leading Exporters 2015 will go a long way in highlighting the crucial role played by the countrys exports sector. Such initiatives help enhance the profile of Indian exporters on a global platform and also serve the mission of Brand India.

I am also informed that ECGC and D&B have instituted Export Risk Management Conclaves a series of workshops to educate exporters about the best practices in risk management. The conclaves have already been organized in 13 centres such as Ahmedabad, Varanasi, Madurai, Coimbatore, Ludhiana, Faridabad, Kolkata etc. and over 2000 exporters have benefited from these workshops. I compliment ECGC and D&B for these initiatives, since having the right information and management tools will enable our exporters to be well-prepared to capitalize on opportunities, while minimizing risks.

As readers would know, the Government has launched a national programme Make in India which is focused on transforming India into a global manufacturing hub. This programme will succeed with the concerted efforts of all stakeholders involved i.e. the Government, industry, investors and banks & financial institutions. Exporters will have to play a special role in this initiative given that success in exports is an important barometer of product excellence and competitiveness on the global stage. In this context, the theme for this years award and publication i.e. Make in India, Make for the World is very apt. Accordingly, I urge Indian businesses, investors and entrepreneurs to come forward and look at exports as an important dimension of their growth plans over the next few years.

I congratulate all the award winners on their success and my best wishes to all exporters who participate in this awards programme. I am sure that the next edition of the awards and publication will bring forth many more success stories from the vibrant exporter community of our great nation.

Foreword

VII

Emerging and developing countries are estimated to account for over 70% of the world economic expansion over the next three years. It is believed that the future growth in global GDP is going to be powered by horizontal trade among emerging markets. Trade among emerging countries often referred to as South-South trade would balloon to 43% of world trade by 2020 more than twice the current level with Asia at the centre. In Asia, India is the leading growth hotspot for the world with its growth forecast having been raised even by multilateral agencies.

India will be the key source of manufacturing exports ably aided by the governments Make in India initiative. The campaign is designed to make India a manufacturing hub and attract companies to invest and make in India. It will roll out initiatives across 25 sectors and across India so that global and domestic manufacturers invest and set up facilities to serve domestic and export market.

Exports contribute around 25% of Indias GDP and are relevant for ensuring sustainable economic growth. However, all export transactions are exposed to a precarious and volatile risk landscape. Risks also mutate as seen when forex risk becomes a credit risk, commercial risk becomes a sovereign risk etc. while prima facie the risks seemed originally uncorrelated.

Risk prevailing in the context of geo-politics and geo-economics are of serious concern to businesses. Various financial and social crises in the world are leading to a weakening of trust between parties thus affecting the ability to do business. In this context, support by ECGC through credit and political risk covers comes in handy. It not only enables protection against losses but also enables easy access to bank finance.

MSMEs contribute almost 45% to the countrys manufacturing output and 40% to exports and provide employment to 70% of urban workforce. The proposed Trade Receivables Discounting System (TReDS) will facilitate discounting of invoices/bills of exchange without recourse to the MSMEs and TReDS will not assume any credit risk. Credit risks in export trade receivables are insured by ECGC and around 85% of the insured exporters and those covered for banks by ECGC, constitute MSMEs.

Indias long term strength with its huge underlying potential will catapult the country to the top exporting nations of the world by 2030 and the esteemed exporters who are going to make it happen deserve all credit for their relentless efforts. ECGC-D&B Indian Exporters Excellence Awards 2015 is a proud gesture from both organisations in honouring the winners and in appreciating all the participating companies.

Geetha MuralidharExecutive Director (CMD-addl. charge)ECGC Ltd.

Foreword

Preface

IX

The past decade has witnessed immense transformation in terms of the changing dynamics of global trade. Global economic integration and greater mobility of goods and services have redefined the boundaries of international trade. The role of developing economies, such as India, has accentuated to a large extent making them a key player in international trade. The Indian economy has showed strong resilience growing at a CAGR of 7.9% during FY04 FY14. Concurrently, India has undergone transformation in global trade too. Indias total merchandise trade as a proportion of GDP increased from 29% in FY05 to nearly 42% in FY14. With the aftermath of the prolonged crisis of the global crisis gradually subsiding, economic activity has started reviving globally. Indias merchandise exports reached c.US$ 313 billion during 2013-14 (P) registering a growth of c.4% as compared to a negative growth of c.1.8% during the previous year.

India has embarked on a focused strategy for expanding its export trade with respect to product basket and regional diversification. The export share of manufactured goods has reduced from 76% in FY04 to 61% in FY14. During the same period, services trade has grown more than five times indicating the potential of Indian exporters in service areas. A striking feature of Indias exports is the major shift in export destinations from the traditional developed economies to the emerging markets in Asia, Latin America and Africa. The UAE is also emerging as an important destination for Indias exports which have surged by over four times in FY14.

To explore the full potential of Indian Exporters significant initiatives need to be taken. The development agenda of the Government is anchored on the creation of a conducive business climate to support global competitiveness for a thriving export trade. The government has already started taking measures in the right direction by launching of the India Trade Portal and online filing, processing and issue of Importer Exporter Code (IEC) applications in digital format among others.

ECGC-D&B Indian Exporters Excellence Awards 2015 and Indias Leading Exporters 2015 will provide the right platform for exporters to share their achievements and provide encouragement to the entire export community to enhance the image of Brand India on the global map. We are confident that Indias Leading Exporters 2015 will prove to be an authoritative source of information on the performance of Indian exporters. We congratulate the award winners of the ECGC-D&B Indian Exporters Excellence Awards 2015 whom we have profiled in the publication.

I look forward to receiving your valuable feedback and suggestions.

Kaushal SampatPresident & Managing Director - IndiaDun & Bradstreet

Preface

Methodology

XI

The publication, Indias Leading Exporters 2015, is presented in conjunction with the ECGC-D&B Indian Exporters Excellence Awards 2015. The basic criteria for participation being that the participating company should derive a minimum of 10% of its total income from the export market in FY14.

The 33 awards were classified into two broad categories Theme-based Awards and Special Awards. Theme-based categories included awards in areas of corporate social responsibility, diversification, innovation, risk management practices, rural, SEZ, woman entrepreneur, focus products and focus markets. A winner and runner-up was chosen in each of the theme-based award category.

For special awards category, companies have been classified into four revenue categories based on total income of FY14 micro (less than ` 100 mn), small (` 100 mn - ` 1,000 mn); medium (` 1,000 mn - ` 5,000 mn) and large (above ` 5,000 mn). Further an overall winner was chosen across each of the revenue categories. Awards winners were chosen in individual revenue categories of each operational group, namely; manufacturing, trading and services.

To invite nominations across various categories, nomination forms were sent out to a large universe of companies. The database of companies was compiled from various sources, including ECGC customers, D&B databases, members of different export promotion councils (EPCs) and various other industry associations. Additionally, mass media channels such as advertisements in leading business news dailies were used to invite participation. It was a self-nomination process wherein every effort was made to ensure that companies respond to the nomination form.

For the purpose of the awards, the initial set of responses were screened to exclude companies that did not fulfill the basic 10% export revenue contribution criteria, or lacking mandatory information details, or were financially sick companies that come under purview of the BIFR. A D&B proprietary model based on financial and operational parameters was used to shortlist companies in each of the award categories. For each award category, a different set of parameters relevant to each category was used to arrive at the shortlist. The final set of award winners was chosen by an independent jury.

This publication, Indias Leading Exporters 2015, profiles the award winners and runners up of theme-based award categories and winners of the special award categories. Additionally, the publication lists participating companies on selected parameters. Through this, all participating and eligible companies have been provided coverage in this publication. A separate section comprising of advertorials is included in the publication.

A standardised format has been used for reporting the information on the companies. Each company profiled in the publication has been allotted its unique identification number (D-U-N-S - Data Universal Numbering System). This will help readers locate and obtain full-fledged information reports on these companies from the Dun & Bradstreet database.

The editorial team is confident that this edition of ECGC-D&B Indian Exporters Excellence Awards 2015 and the publication, Indias Leading Exporters 2015 will encourage other emerging exporters to showcase their contribution by active participation in future editions.

Methodology

Exports are going through a challenging phase today. Uncertainty looms large in the wake of disturbances in the Middle East. A weakening of Euro zone due to drop in trade and collapse of the Russian economy are a serious threat to the International trade.

Despite these challenges, Godrej Industries continues to cater over 80 countries and we have not only been able to maintain our presence in the International markets, but also forayed in newer markets. We export to both developed and emerging economies and this has been made possible with the support from ECGC. With their backup, we are able to concentrate on business, while they take care of our risk.

Godrej Industries has been associated with ECGC over three decades, and appreciate the professionalism and their pro-trade approach. We acknowledge ECGCs efforts in helping us grow our International trade.

Mr. Nitin Nabar,Executive Director & President (Chemicals)Godrej Industries Limited

You are aware that the business relationship between HEG and ECGC is over 25 years old.

The support provided by ECGC to Indian exporters is commendable and it has helped Indian exporters to reach out confidently to various countries across the globe.

The introduction of Multibuyer / Customised policy has been an innovative idea with less procedural formalities, simplicity of operation and cost effectiveness.

We appreciate regular visits and personal contact by ECGC officials in keeping us updated about the latest developments on policies and global scenarios as well.

We wish ECGC all the best in their endeavors to promote Indias exports by cost effective insurance.

Mr. Manish GulatiVice President MarketingHEG Limited

Customer Speak Customer Speak

We, Apar Industries Ltd., have been dealing with ECGC Ltd for over a decade now; enjoy the privilege of best of their services.

ECGC being pioneer in Export Credit Insurance in India is a Partner of First Choice for exporters like us, in risk mitigation especially for the business emanating from countries of Developing & Underdeveloped world.

Their services and knowledge sharing on the risk perception on such countries, is indeed a boon for us. Their tech savvy website is one of the best knowledge sharing platform for the exporters.

In the ever challenging competitive world, ECGCs role on risk coverage helps us to concentrate on business front. Improvement is always to be looked out for growth and hence we wish to suggest to ECGC to improve their focus on the long term credit insurance as well.

We wish them all the success in the years to come.

Mr. R. HariharanGM FinanceApar Industries Ltd

Being one of the major exporters of home textiles and line pipes, we have dealt with several credit risk insurers in the Indian market. Our experience with ECGC has been encouraging in a true sense to help cover various credit related risks.

The ability of ECGC to offer customized products based on exporters requirements along with an efficient client servicing team assures long lasting relationship.

Mr. Lal Hotwani,DirectorWelspun Group

Customer Speak Customer Speak

Indias Leading Exporters 2015

XVIII

Global Exports

Developing economies - drivers for global trade Developing economies comprising countries such as China, India, Brazil, Indonesia, Russia, and Thailand have proven to be the key drivers for the growth and development of global trade. According to World Trade Organisation (WTO), developing economies account for almost half of the global trade gaining fast momentum from 32% in early 2000s. Further, these countries now absorb more than half of the global FDI flows, which stood at about 20% in 2000. However, despite their growing economic powers, developing countries continue to face setbacks such as macroeconomic volatility.

Globally, 2013 was a challenging year with slow economic recovery in the EU and huge CADs in emerging nations. GDP growth in developed countries slowed to 1.1% while developing nations saw it drop to 4.4% y-o-y in 2013.

World merchandise trade expanded 2.2% y-o-y in 2013 (2.5% export growth and 1.9% import growth). In 2013, trade growth in developed countries such as US, UK, France, Germany, Australia, Canada, and Italy was slow paced at 1.5% y-o-y. However, during the same period, trade growth in developing countries outpaced that of the developed countries standing at 3.6% y-o-y. Notably, 44% of the world merchandise trade originated from developing economies.1

Growing prominence of developing nations in world merchandise trade (% Share)According to WTO, emerging economies raised their share in global output to 48% in 2012. The increase is mainly attributed to G-20 developing economies such as countries in the BRICS, Malaysia, Thailand, and Indonesia increasing their share from 13.5% in 1995 to 27.5% in 2012.

Developed, 71.5

G-20 Developing, 13.5

LDCs, 0.5

Other developing, 14.5

1995

Developed, 51.8

G-20 Developing, 27.5

LDCs, 1.1

Other developing, 19.5

2012

Source: World Trade Report 2014, World Bank

China, US, and Germany became the largest exporters of 2013 with exports aggregating to USD 5.24 trillion. Collectively, they accounted for 27.8% of the total world exports in 2013. Overall exports for EU grew 1.7% in 2013. However, if the intra-EU trade is excluded, its share in global exports was ahead of China at 15.3%.

India emerging hub for global trade and investmentIn the past couple of years, the Indian economy experienced some moderation after a high growth trajectory achieved in early 2000s. Slow demand, financial crisis in developed nations and domestic economy slowdown appeared to be some of the major setbacks for the country. However, prudent regulatory and fiscal policies have helped in slow pick-up in growth. Moreover, India continues to be a favorable investment and trade destination globally. Indias share in global GDP climbed from 4% in 2000 to 6% in 2012.2 In the last decade, net capital inflows in the country grew at a CAGR of 14.4%, reaching nearly USD 50 bn in 2013. On a CAGR basis, between 2003-2012, FDI in the country grew 20.6% while portfolio equity grew 9.2%.

1 International Trade Stats, WTO2 World Trade Report 2014


XIX

According to WTO rankings, India ranked among the top 20 biggest exporters in 2013. In the last decade, Indias exports grew at a CAGR of 18.8%, which was the fastest compared with other BRICS countries. Moreover, its share in global merchandise trade grew from 0.7% in 2003 to 1.7% in 2013. India stood strong in export of commercial services as well with a 3.2% share and attained 6th rank in 2013.

Indias Trade Strength Inflows in India

- 1.7% share in worlds merchandise trade in 2013; 3.2% share in world commercial services trade in 2013

- Ranked 19th biggest exporter in 2013, improving from 26th rank in 2008

- Ranked 3rd among the top five attractive destinations for FDI as perUNCTADs World Investment Prospects Survey 20132015

-20

-10

0

10

20

30

40

50

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

In U

SD B

n

Portfolio Equity FDI

Ten Year Merchandise trade trends in BRICS

Country NameExports (In USD Bn) Share in Exports(%)

CAGR (%)2003 2013 2003 2013

Brazil 73.1 242 1 1.3 12.7Russia 134.4 523 1.8 2.9 14.6India 56 313 0.7 1.7 18.8China 437.9 2209 5.8 12.1 17.6South Africa 36.5 96 0.5 0.5 10.2

Source: International Trade Statistics, WTO

Indias strong presence in exports can also be estimated from an increasing contribution of exports to its GDP. This ratio has doubled from 14.7% in 2003 to 24.8% in 2013. Chinas export contribution to its GDP saw wide fluctuations from 29.6% in 2003 which later peaked at 39.1% in 2006 and started a downward journey to 26.4% in 2013. While its export share in its own GDP dropped, China appeared to have almost doubled its share in world GDP from 7% in 2000 to 15% in 2013, demonstrating a strong domestic growth.

Share of Exports to GDP (%)

0

5

10

15

20

25

30

35

40

452003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

% s

hare

Brazil China India Russian Federation South Africa

Source: World Bank Indicators

As per projections from IMF, global trade is expected to expand 5.3% in 2015. Emerging markets and developing economies are expected to perform well with exports growing by 6.2% while exports from advanced economies are expected to expand by 4.8%.


XX

IntroductionExports have been a significant component of Indias growth story. In the last decade, the contribution of Indias exports to its GDP (at market prices) has grown from 11.1% in 2003-04 to 17% in 2013-14. Several variables including FDI (Foreign Direct Investment), FTAs (Free Trade Agreements), and supportive fiscal and monetary policies have led to the rapid growth of Indias exports. Impressive growth in all the areas of exports has helped achieve a CAGR of 17.2% between 2003-04 and 2013-14.

Share of Exports in GDP

Source: Handbook of Indian Economy, RBI

Five Year Review of Indias ExportsPerformance of Indias exports in the past five years has been largely affected by contraction in global demand. During FY09-14, growth in exports has been largely uneven. FY10 stood as the weakest year for exports seeing deterioration to the extent of nearly 6% due to demand recession across major target markets of the country. This was followed by a strong comeback in the subsequent year FY11 with nearly 40% growth in merchandise exports. The growth momentum continued until FY12, followed by a slag in FY13, as the countrys major export destination EU struggled to recover from an economic downturn. The following chart indicates the trend of Indias exports (both merchandise and services) in the past five years.

Five Year Export Trend

Source: Ministry of Commerce & Industry, GoI

Overview of Indias Exports


XXI

In FY14, Indias exports saw modest improvement of 4% with overall exports reaching USD 464.1 bn. Merchandise exports grew around 4.1% to USD 312.6 bn compared with a decline of 1.8% in the previous year. Further, export of services grew about 4% to USD 151.4 bn compared with 2.4% in FY13. The share of merchandise and services in overall exports has been largely consistent over the past few years. Merchandise exports continued to dominate overall exports in FY14 as well with 67.4% share while services accounted for the balance 32.6%. In the past five years, merchandise exports from the country grew at a CAGR of 11% while services grew at a CAGR of 7.4%.

Exports grew 9.4% in the Q2FY14, after declining by about 11.4% in Q1FY14. Growth remained largely sluggish throughout the rest of the quarters leading to a below expected closure of FY14. The government set an export target of USD 325 bn for FY14 while the actual achievement stood at USD 312.6 bn. However, despite a shortfall in 2014, exports bounced back in Q1FY15 with 7% growth compared with Q1FY14.

Exports (apr 13-jun14)


Export Components

Major CommoditiesIn FY14, engineering, petroleum, and agriculture and allied products together contributed nearly 56% to the total merchandise exports, up from around 47% in FY10. This increase was largely driven by faster growth in agriculture and allied products at a CAGR of 19.4% between FY10-FY14.

Engineering goods was the largest product group in Indias export basket in FY14, contributing around 22.2% of the total merchandise exports at USD 69.5 bn. The handicrafts sector, which accounted for the least share in the export basket, interestingly saw the fastest y-o-y growth at 38.8% in FY14. Leather and manufactures saw the second fastest y-o-y growth at 16.7% in FY14.

Oil exports from the country grew at a CAGR of 33.1% in the past ten years. Its share in exports has increased significantly from 5.6% in 2003-04 to 20% in 2013-14. Non-oil exports balanced out to 79.9% in FY14 from 94.4% in FY04. Despite a decline in share, non-oil exports grew at a healthy CAGR of 15.3% during the same period.


XXII

Oil / Non-oil Share in Exports


Export of gems and jewelry noted a sharp drop of 5.4% owing to lower exports of gold jewelry, which was linked to lower imports of gold bar and jewelry. The government imposed restriction on gold imports leading to shortfall of gold required by the jewelry makers. Further, exports of ores and minerals fell by around 0.4% due to continued mining uncertainties in the country.

22.2%

20.1%

13.6%

13.2%

13.1%

10.1%

3.1% 1.8% 1.8% 0.9% 0.1%

Engineering Goods Petroleum ProductsAgriculture and Allied Products Chemicals and Related ProductsGems and Jewellery Textile and Textile ProductsOthers (All Commodities) Leather and ManufacturesOres and Minerals Other Manufactured GoodsHandicrafts (excluding Handmade Carpets)

Source: RBI

Transformation of Indias export basket

Commodity Share in FY10 (%) Share in FY14 (%)Agriculture and Allied Products 9.9 13.6Chemicals and Related Products 12.8 13.2Engineering Goods 21.4 22.2Gems and Jewellery 16.2 13.1Handicrafts (excluding Handmade Carpets) 0.1 0.1Leather and Manufactures 1.9 1.8Ores and Minerals 4.8 1.8Other Manufactured Goods 0.9 0.9Others (All Commodities) 5.0 3.1Petroleum Products 15.8 20.1Textile and Textile Products 11.1 10.1

Source: RBI


XXIII

Service ExportsAs per Nasscom estimates, in FY14, Indias IT-BPM exports grew approximately 13% y-o-y to USD 86bn and contributed a major share towards Indias service exports. While IT services accounted for a major chunk of around USD 52 bn, Business Process Management (BPM) services accounted for USD 20 bn and engineering services and R&D, software products, and hardware accounted for the balance.

In terms of verticals, BFSI continued to account for a major share in IT-BPM exports at more than 40% valued at USD 35 bn, growing 14% y-o-y. The emerging verticals such as retail, healthcare, and utilities grew nearly 16% y-o-y contributing USD 22 bn worth of exports to the total IT-BPM exports.

Exports by service line

60% 23%

16% 1%

Exports by service line IT Services BPM ER&D, Software Products Hardware

Source: Nasscom

The US continues to be the key market for exports with USD 53 bn worth of exports estimated in FY14 by Nasscom growing approximately 13% y-o-y. The European market (excluding UK) is estimated to grow more than 14% y-o-y in FY14.

Export DestinationsOver the past few years, there has been a shift in Indias export from the traditional markets such as the US and EU to emerging countries across Asia, Africa, and other continents. In FY14, developing countries accounted for a major 41.5% of total exports and grew at a CAGR of 16.6% during FY10-14. Moreover, exports to African countries grew at a CAGR of 26.1%, with exports to Tanzania and Zambia growing by 39.2% and 43.7% on a CAGR basis respectively.

The US being a primary market for Indias export accounted for as much as 12.5% of the total merchandise exports worth an estimated USD 39.1bn in FY14. UAE stood as the second highest export destination accounting for 9.8% of the total exports. Other emerging markets for Indias exports include Saudi Arabia, Switzerland, Iran, and Kenya.

Top 10 Export Destinations of FY14

2009-10 2010-11 2011-12 2012-13 2013-14 Share to exports in FY14 (%) Countries (In USD Bn)

U.S.A 19.5 25.3 34.7 36.2 39.1 12.5U.A.E. 23.9 33.8 35.9 36.4 30.5 9.8Peoples Republic of China 11.5 15.5 18.3 13.6 15.0 4.8Hong Kong 7.9 10.3 12.9 12.3 12.8 4.0Singapore 7.6 9.8 16.8 13.6 12.4 4.0Saudi Arabia 3.9 4.7 5.7 9.8 12.2 3.9U.K. 6.2 7.3 8.6 8.7 9.8 3.1Netherlands 6.4 7.7 9.2 10.5 8.1 2.6Germany 5.4 6.7 7.9 7.3 7.5 2.4Japan 3.6 5.1 6.4 6.1 6.8 2.2Total 49.3

Source: RBI, Handbook of Indian Economy


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Export Promotion MeasuresThe above mentioned evidence in the form of facts and figures are clear indications of Indias competitiveness as a global trading hub. Policies undertaken under the Foreign Trade Policy 2009-14 have played a key role in revival of Indian exports. Several policies and measures have been announced in the recent past to help the export community achieve the targeted growth.

Assistance to States for Developing Export Infrastructure and Allied Activities (ASIDE) Scheme

The scheme was launched in 2002 for the purpose of creation of export infrastructure. During the Eleventh Five year plan, the government spent ` 30.5 bn under this scheme. In 2013-14, a budget of ` 7.5 bn (RE) has been allocated under ASIDE scheme.

Market Access Initiative (MAI) Scheme

MAI Scheme is formulated to act as a catalyst to promote Indias exports on a sustained basis, based upon focus product and focus market concept. In 2013-14, 170 projects/studies including 13 India Shows were approved for receiving assistance under the scheme. During the same period, expenditure on this scheme stood at ` 1.8 bn.

Marketing Development Assistance (MDA) Scheme

MDA Scheme aims at stimulate and diversify the countrys export trade by assisting exporters for their participation in approved EPC/Trade Promotion Organization, assisting Export Promotion Council (EPCs), Assisting Focus export promotion programmes in specific regions and other marketing promotion efforts abroad.

Incremental Export Incentivisation scheme

This was launched in Jan 2013 whereby exports made during the period January-March 2013 over the base period January-March 2012 would be eligible for benefits. The above scheme was extended for 2013-14 also on an annual basis.

Interest Subvention scheme

The 2% Interest subvention scheme was extended to labor intensive sectors, namely, Toys, sports goods, processed agricultural products and readymade garments. Further from Aug 2013, Government has enhanced the rate of subvention from 2% to 3%.

Special Economic Zone (SEZ) & Export Oriented Units (EOUs)

SEZs & EOUs have been crucial for the growth and development of exports in the country. Exports from SEZs and EOUs have been to the tune of ` 4.9 trillion and ` 0.8 trillion in FY14. During the same period, 2154 units were operational under the EOU scheme and about 3799 units are operational under 185 SEZs making exports.

Apart from the measures mentioned above, the Foreign Trade policy (2014-19) is expected to enhance exports further with a strong thrust on the manufacturing sector. The policy will be synchronized with the Prime Ministers Make in India plan. As India competes on a global scale, these initiatives are planned to ensure that the countrys infrastructure, policies and regulations are benchmarked to best standards.


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Chemicals & Petrochemicals

ChemicalsThe Indian chemical industry, including petrochemicals, acts a backbone of the agricultural and industrial development of India. In the Indian chemical industry, alkali chemicals enjoy the highest contribution in the total production, accounting for a share of 70%, followed by organic chemicals at around 19%. The share of dyes and dyestuffs and pesticides, on the other hand, remain low at 2%; however, the production of dyes and dyestuffs has been increasing steadily and growing at a CAGR of 6.4% between FY10 to FY14. This is due to its growing significance in sectors such as textiles, leather, plastics and foodstuffs.

PetrochemicalsThe petrochemical industry mainly comprises synthetic fibres, polymers, elastomers, synthetic detergents intermediates and performance plastics. Today, petrochemical products infuse the entire spectrum of items of daily use, ranging from clothing, housing, furniture, automobiles, household items, agriculture, irrigation and packaging to medical appliances.

The production of major petrochemicals is also growing in line with the growth of major chemicals, registering a CAGR of 5.9% during FY10 to FY14. The key sub-segment driving this growth is Polymers which grew at a CAGR of around 9.1% followed by performance plastics which grew at a CAGR of 4.9% during the same period. Production of Synthetic fibres, accounting for a share of 28%, has been sluggish since FY11. During FY10-FY14, production of synthetic fibres has grown at a CAGR of 1.8%.

International TradeThe chemicals and petrochemical sector combined exports registered a CAGR of 20.6% during FY10 to FY14, whereas the collective imports registered a CAGR of 21% during the same period. In FY14, imports grew by 15.8% whereas and exports grew slightly higher by 17.6%. Exports of major chemicals in FY14 grew 22.4% whereas imports recorded a lower growth of 16.2%.

Organic chemicals have a dominant share in total chemical imports. Domestic production of organic chemicals has not kept pace with growing demand. This widening of demand supply gap has been primarily bridged through imports. In FY14, organic chemicals contributed over 65% to the total volume of imports and around 56% in the total value of imports.

In case of composition of total exports, dyes and pigments has been the leading contributor to chemical exports with a share of 49% in value terms in FY14. Besides dyes and pigments, pesticides & insecticides and organic chemicals also form a significant part of the total exports. In the case of petrochemicals, imports have grown at a CAGR of 25.1% between FY10 and FY14 whereas exports have grown at a higher CAGR of 28.5% in the same period.

Exports and Imports - Major Chemicals and Major Petrochemicals

Source: Department of Chemicals and Petrochemicals


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Indias share in World Exports and Imports of Chemicals-2013

Commodity % of World ExportRank in the

World% of World

ImportRank in the

World

Inorganic chemicals 1.41 16 4.52 7

Organic chemicals 3.52 11 4.03 7

Pharmaceutical products 2.57 10 0.38 37

Fertilisers 0.13 48 8.63 3

Tanning or dyeing 3.61 10 2.27 15

Miscellaneous chemical products 2.06 16 2.45 15

Plastic and articles thereof 1.28 17 1.97 16

Synthetic rubber and factice 0.18 28 5.3 4

Man-made filaments 6.45 3 2.49 13

Man-made staple fibres 6.22 4 2.26 14Source: Department of Chemicals and Petrochemicals

Engineering Goods

The engineering industry is the largest segment of the overall industrial sectors in India. It is diverse with a number of segments and can be broadly categorised into two segments: heavy engineering and light engineering.

The engineering industry in India manufactures a variety of products, with heavy engineering goods accounting for majority of the production. Most of the leading players in the heavy engineering goods segment manufacture high-value heavy engineering goods using high end technology. On the other hand, manufacturers of light engineering goods use medium to low-end technology. The entry barrier is low, owing to relatively lower requirement of capital and technology. This segment is characterised by dominance of small and unorganised players, which manufacture low value-added products. However, a few medium and large scale firms produce high value-added products. This segment is also characterised by small capacities and high level of competition.

International TradeEngineering goods are one of the major items that have driven growth in Indias overall exports. The share of engineering exports in Indias total exports has remained at around 20% over the last decade. However, in global engineering trade Indias share is at an abysmal 1.2%. This is because India primarily exports low and medium technology intensive engineering goods. The share of high tech goods is less than 6% of the overall engineering export basket. The nature of Indian engineering exports is undergoing a change as India is fast moving from exporting low-value goods to exporting high-value goods to developed countries.

Indian engineering exports grew at CAGR of 16.1% to US$ 69.5 bn in FY14 from US$ 38.2 bn in FY10. Two major items namely; machinery & instruments and transport equipments besides residual engineering items have contributed largely towards the overall growth.


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Composition of Engineering Exports

Source: RBI

The major markets for Indian engineering exports in FY14 were the US, UAE and Singapore.

Region-wise Export Share

Source: RBI

Indian engineering exports to Sri Lanka has seen a significant rise during the period FY10-FY14. Engineering exports to Sri Lanka has registered 25% growth in FY14, with its share growing from 1.6% in FY10 to 3.1% in FY14.

Food and Agro Products

The food and agro industry is amongst the prominent sectors in India in terms of production, consumption and export. It involves any type of value addition to agricultural or horticultural produce and includes processes such as grading, sorting and packaging which enhance the shelf life of food products.

In the last few years, the food processing sector has been growing at a faster rate than agriculture sector. The sector constitutes as much as 9.8% and 12.2% of GDP in manufacturing and agriculture sector respectively. The sector generated employment to the tune of 1.8 mn people in FY12, increasing at an annual average growth rate of 3.8% since FY08.

India is a major producer of many agricultural commodities; it is the largest producer of milk, pulses and the second largest producer of fruits and vegetables in the world after China. India accounts for about 15% of the worlds production of vegetables. However, level of processing and value addition is very low. The wastage of fresh horticultural produce is upto


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18% due to poor post harvest management practices. Hardly 2% of perishable horticultural produce is processed to value added products compared to 65% in the US, 23% in China and 78% in Philippines. Low level of processing and inadequate storage of fruits and vegetables results in huge wastages. With adequate processing facilities, much of this waste can be reduced thus increasing remunerative wage to the producer as well as ensuring greater supply to the consumer.

International TradeOverall exports of food and agro products grew at a five-year CAGR of 33% during FY10FY14 to US$ 22.7 bn in FY14. This growth was driven largely by strong growth of cereals which accounts for a sizeable share of nearly 47%. After witnessing some moderation in growth during FY10, exports from this category have been on a rise over the last four years ending FY14. Exports of animal products have been on an ascent in recent years and has contributes 23% overall exports of food and agro products. Exports of animal products grew at CAGR of 37% to US$ 5.3 bn in FY14 from US$ 1.5 bn in FY10 with buffalo meat being the dominant category within this segment.

Exports of Processed Food Products

Source: APEDA

The main markets for Indian animal products are Vietnam, Egypt, Malaysia, and Saudi Arabia.

Segment- wise export destinations (FY14) Major Markets

Floriculture US, Netherland, Germany, Pakistan, UK

Fresh Fruits & Vegetables UAE, Bangladesh, Pakistan, Malaysia, Netherlands, UK

Processed Vegetables and Fruits US, Saudi Arabia, Pakistan, Netherlands, UK

Animal Products Vietnam, Malaysia, Egypt, Saudi Arabia, Algeria, Philippines

Cereals Iran, Saudi Arabia, Bangladesh Source: APEDA

Textiles

The Indian textiles industry plays an important role in the countrys economic growth. It contributes about 14% to industrial production, 4% to the GDP, and 11% to the countrys export earnings. The textile sector is the second largest provider of employment after agriculture. India continues to be the second largest producer of silk in the world and a major producer of both raw jute and jute products.

The Indian textile industry is fragmented, with only a few large players and numerous small and medium-size companies. The textiles industry is classified as the hand-spun & hand-woven sector and the capital intensive, organized mill sector which consists of spinning and composite mills. The decentralized powerlooms / hosiery and knitting sector form the largest section of the textiles sector.


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The major sub-sectors that comprise the textiles sector include the organized cotton/man-made fibre textiles mill industry, man-made fibre/filament yarn industry, wool and woollen textiles industry, sericulture and silk textiles industry, handlooms, handicrafts, jute and jute textiles industry and textiles exports.

International TradeTextile exports play an important role in overall exports from India. The Indian textiles and clothing industry is one of the largest contributors to the countrys exports. Exports of textiles have increased steadily over the last few years, particularly after 2004 when textiles exports quota stood discontinued. The slowdown the global economy has however had a bearing on Indias textile exports. During FY13, textile exports declined by around 5% (in US$ terms) after witnessing an average growth of 22% in the previous two years. However in FY14, textiles export grew by around 13% even as Indias overall exports recorded a lower growth of 4%.

Indias Textile Exports

Source: Economic Outlook, CMIE

India has become a popular destination for many big global retailers due to its strength of vertical and horizontal integration. The quality of the countrys products is seen in the repeat orders from these global companies and the significant growth in their outsourcing from India.

Readymade Garments accounts for a share of 40% in total textile exports. Exports of Readymade Garments have grown at a CAGR of 9.4% during FY10 to FY14.

Composition of Textile Exports

Source: Economic Outlook, CMIE


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The major apparel exporting destinations were the US and the European Union. A steady improvement in demand in the US economy, a progressive decline in Chinese exports to the US has led to a pick-up in Indias apparel exports to the US. A series of problems encountered by India competitors such as labour unrest in Cambodia and safety concerns after a major factory fire in Bangladesh has also led to some orders being diverted to India.

Moreover, larger domestic cotton supplies also fostered Indian textile and apparel exports. The slew of reforms introduced by the new Government is expected revive the domestic economy and in turn boost demand for garments and fabrics. Cotton Textiles, accounting for a share of 35% in total textile exports, have grown at a CAGR of 22% during FY10 to FY14.

Gems and Jewellery

Gems and jewellery has been an important industry for the Indian economy. It is one of the fastest growing industries and a leading earner of foreign exchange for India. The gems and jewellery sector covers a wide range of items which include diamonds, precious and semi-precious stones, in addition to gold, silver, studded and costume jewellery. The gems and jewellery industry in India is mostly concentrated in the unorganized sector and employs around 2 mn workers.

International TradeAn important feature of this industry is that it contributed about 15% to Indias total exports during FY14. The main component of Indias gems and jewellery export is cut and polished diamonds. Rough and uncut diamonds are imported and processed in India and finally exported in the form of diamond jewellery for final consumption. It is this feature that makes the industry highly import-intensive in nature.

Exports of the gems and jewellery sector have been on a descent during the last two fiscal years. After a decline of 9% in FY13, exports of Gems and Jewellery declined further by 11% in FY14 to US$ 34.7 bn. The decline was mainly due to lower exports of gold jewellery and medallions, which in turn were linked to lower imports of gold bar and jewellery. The government had introduced restrictions on gold imports last year to curb the current account deficit (CAD), which had widened to a record high in FY13.

Composition of Gems & Jewellery Exports Composition of Gems & Jewellery Imports

Source: CMIE, IAS Source: CMIE, IAS

FY14 saw imports of gold bar and gold jewellery decline by 51% and 87% respectively. Softening of global prices of precious metals (e.g. gold) which are used as basic input in gems and jewellery sector added to the woes of Gems and Jewellery exports. Gold prices declined by about 20% during FY14.


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Exports of cut and polished diamonds was estimated at US$ 19.6 bn in FY14, up from US$ 17.4 bn in FY13, indicating 12.9% YoY growth. Increase in exports of cut and polished diamonds with a corresponding increase in the imports of rough diamonds bodes well for the segment. It indicates an increase in cutting, polishing, and other manufacturing activities in India. Silver jewellery exports also increased by a whopping nearly 58% totalling US$ 1,455 mn.

Gold jewellery and gold medallion exports declined from US$ 18.3 bn in FY13 to an estimated US$ 11.1 bn in FY14, indicating nearly 40% decline YoY. This has been the segments first decline since FY10 owing to the non-availability of the gold following import curbs.

Key export destination for gems and jewellery in FY14 were UAE, Hong Kong and the US. The future prospects of Gems and Jewellery exports appears bright following the dilution of the 80- 20 scheme and revival of demand in the global market.


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Overview of Indias ExportsExports play a significant role in driving Indias growth story. In the last decade, the contribution of Indias exports to its GDP (at market prices) has grown from 11.1% in 2003-04 to 17% in 2013-14. However, the years 2009-10 and 2012-13 have been challenging for the Indian exporters; as a result of aftershock of global financial crisis in 2008 and euro zone crisis and global slowdown in 2012-13. During 2013-14, Indias merchandise exports grew by 4.06% to reach a level of US $312.6 bn, as against a negative growth of 1.82% in the previous year. Despite the setback faced by the Indias export sectors due to crisis in 2008 and 2012-13, the merchandise exports still recorded a Compounded Annual Growth Rate (CAGR) of 15.8% from 2004-05 to 2013-14.

Despite the impressive growth rates of Indias exports before the global financial crisis and moderate to low post the crisis period, the share of Indias merchandise exports in worlds exports is still 1.7% as of 2013. A comparison between BRICS economies indicate that India accounts for the third largest share in the merchandise exports amongst BRICS countries (Fig 1).

Share of BRICS economies in the global merchandise trade

South Africa 0.5%

Brazil 1.3%

India 1.7%

Russian Federation 2.9%

China 12.1%

South Africa Brazil India Russian Federation China

Source: World Trade Organisation, International Trade Statistics 2014

For India to increase its share in world merchandise exports from current 1.7% in 2013 to atleast over 4% in next five years, lots of measures need to be taken to drive fuel the expansion and demand of Indian products in the overseas markets.

Make in India, Make for the WorldMake in India is the current governments catch phrase and Indian embassies across the world and every state of India are chanting these three words ever since the campaign was launched in September, 2014. Build on the four pillars of new processes, new infrastructure, new sectors and new mindset (Fig 2), the Make in India campaign aims to facilitate investment in the economically important sectors, foster innovation, enhance skill development, build and protect intellectual property and build best-in class manufacturing infrastructure. One of the primary objectives of the campaign is to improve ease of doing business in India and make India in to a global manufacturing hub. Currently, as per the World Bank survey, India ranks 142 among 189 countries in ease of doing business.

Four Pillars of Make in India Initiative

New Processes New Infrastructure New Sectors New Mindset

Special Focus on Ease of Doing BusinessDe-Licensing & Deregulation

Industrial Corridor Industrial Cluster Smart Cities Nurturing Innovation Skill development

Opening of critical sectors like Defence, Construction and Railways for FDI

Dedicated teams that will guide and assist first-time investors from time of arrivalFocussed targetting of companies across sectors

Source: Department of Industrial Policy and Promotion

Make in India, Make for the World


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With the focus on reaching out to global CEOs and basing it on four pillars of the imitative, the Government of India has taken several measures to make India a better place to do business. These measures include:

Use of technology, convergence and integration of departments across the sectors

Opening up a vast range of sectors for Foreign Direct Investment (FDI)

Identification and focus on 25 sectors in which India can be world leader

Building partnership with states

Focus on improving and enhancing infrastructure

Use of technology, convergence and integration of departments across the sectors will provide boost to the production, improve productivity, create jobs and wealth and make India a much better place to invest. Opening of sectors for FDI, has opened railways for 100% FDI, deregulated the defense manufacturing to the extent of 49% and 100% FDI in the construction sector through the automatic route.

Few of the 25 sectors on which Make in India initiative aims to focus and make India in to a global leader are automobiles, automotive, space, food processing, pharmaceuticals, chemicals and number of labour intensive sectors such as textiles and leather where India has competitive advantage of becoming the world leader. Few other sectors that have been brought under the ambit of the campaign are biotechnology and renewable energy, where India is gradually gaining competitiveness.

Highlights of Key Sectors covered under Make in India Initiative

Automobiles

Contributes to 7% of GDP by volume 7th largest producer in the world 4 large auto-manufacturing hubs across India 3rd largest automobile market by 2016

Automobile Components2nd largest steel producer by 2015 Exports of auto components increased at a CAGR of 17% during 2008-13 Growth is expected to reach US $9.7 bn

Chemicals3rd largest producer in Asia and 6th largest in the world 3rd largest producer of agro-chemicals 16% of worlds dye production

ConstructionContributes to 10% of Indias GDP 100% of FDI permitted through automatic route for townships and cities US $650 bn investment in urban infrastrucure estimated over next 20 years

Food ProcessingRanks 5th in the world for exports, production and consumption 192 mn hectares of gross cropped area 42 maga food parks being set-up with an investment of ` 98 bn

Leather

10% of worlds leather production US $11 bn industry US $6 bn worth of exports in 2013-14 24% growth projected in the next five years

Renewable Energy

5th largest power generation portfolio 5th largest wind energy producer 20,000 MW of solar power by 2022 243 GW of installed capacity as of March 2014

By working in partnership with states, the government aims to make the states as the change agents for driving Indias overall competitiveness. By focusing on enhancing infrastructure, the government aims to develop new industrial corridors, manufacturing cities and industrial corridors. Delhi Mumbai Industrial Corridor (DMIC) is one such example of industrial corridor which is being built with the objective to enhance Indias industrial competitiveness.

These initiatives will definitely serve as the driving factors for improving Indias competitiveness and improve the ease of doing business in India, thereby attracting global manufacturing companies to set up their manufacturing units in India.

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BackgroundBank of Baroda (BoB) was incorporated in 1908 as The Bank of Baroda Ltd. In 1910, the bank opened its first branch in the city of Ahmedabad and in 1953, opened its first international branch at Mombasa, Kenya. In 1969, the bank was nationalized by GoI, thereby acquiring its current name and came out with its IPO in 1996.

BoB is amongst the top notch public sector banks with a business of more than ` 9.65 tn. The bank operates through a wide network spread across more than 5,000 branches including 104 overseas branches/offices located in 24 countries spanning across the US, Europe, Africa, Asia and Australia.BoB has diversified its business through a strong network of various subsidiaries like BOBCARDS Ltd, BOB Capital Markets Ltd, and joint ventures viz.India First Life Insurance Co Ltd & Baroda Pioneer Asset Management Co Ltd.

BoB has always nurtured enduring relationships with all its stakeholders since its inception which reflects its commitment towards inclusive growth, fulfilling entrepreneurial dreams and meeting aspirations of generations around the globe. The bank has always adopted a customer centric approach and innovative ways for delivery of speedy and effective service to its customers through its 25,000+ touch points including branches, ATMs, E-lobbies, Retail Loan Factories, SME Loan Factories, Agri Loan Factories and Corporate Financial Services. The bank is also constantly engaged in reinventing its host of products, services and facilities.

With BoBs strong international presence in 24 countries across the globe and its dominance in industrially advanced states like Maharashtra and Gujarat, BOB has managed to retain its unique position in the banking industry by offering a wide range of products and state of the art technology for superior customer experience.

Major Challenges FacedThough the sentiments were positive in FY15 which began on a buoyant note following the formation of a stable government at the centre on expectations of better growth, the economic growth continued to remain subdued. The banking sector has been facing a number of challenges because of this slowdown in the domestic economy along with the mixed environment in the global economy.

In FY15, both the agriculture sector and the services sectors demonstrated signs of slowdown. The growth of Index of Industrial Production (IIP) for the period Apr-Nov 2014 also stood at a low level of 2.2%. The lead indicators such as tractor and motorcycles sales and slowdown in the rural wage growth indicated subdued rural demand.Further, a mixed outlook on the global economy affected the external sectors adversely. As a result, the banking sector continued to remain under pressure as its profitability declined, on account of higher provisions due to asset quality concerns and lacklustre credit growth. It is therefore expected that the performance of the banking sector would remain muted as the credit growth and deposit growth would remain at low levels in the remaining part of the financial year.

However, the developments such as easing of commodity prices, crude oil prices in particular, shrinking of current account deficit and a credible inflation fighting regime of the RBI are supporting the positive sentiments. Number of initiatives taken by the Central Government in the field of mining, defence, land acquisitions, railways etc would further boosts the confidence of the sector. But the pace of recovery is bound to be slow due to sharp slowdown in investment and demand indicators.

Way Forward for BoBThe main focus of BoB in FY16 would be consolidating its balance sheet, improving asset quality and maintaining the ongoing healthy capital adequacy and liquidity ratios.BoB would also ensure a mix of optimum level of business between its various verticals such as retail, MSME, corporates and others as well as between its domestic and overseas operations.

Thus with the Customer Centricity and Growth with quality philosophy, BoB will continue to yield rich dividends to all its stakeholders year after year, besides meeting ever growing aspirations of its customers.

Banking Expectations for FY16As per the projections of International Monetary Fund (IMF), Indian economy is expected to grow at 6.3% in 2015 and 6.5% in 2016. IMF further said that boost in trade due to lower oil prices and pickup in industrial and investment activity after policy reforms has offset the weaker external demand.

As the manufacturing sector is showing signs of haul up, it is expected that the green shoots which are now visible would strengthen going forward. The advance indicators of industrial activity are indicating a modest improvement in the months ahead. The enhancement in

business confidence is also visible with the pick-up in new investment intentions, especially in transportation, power and manufacturing. Also as per CMIE, the stalling of projects has dropped significantly in the quarter ended Dec 2014 as compared to the corresponding quarter in the previous year.

Budget implication on BankingMoreover, the Union Budget announced on February 28, 2015 has ushered in a slew of measures which will have positive impact on the banking industry. The Budget has called for setting up of autonomous Bank Board Bureau to improve the governance in the public sector banks. This Bureau will search and select heads of Public Sector banks and helps them in developing differentiated strategies and capital raising plans through innovative financial methods and instruments. This is an interim step towards establishing a holding and investment Company for Banks. Further, the Budget has set forth the goal of housing for all by 2022. This would entail 2 crore houses in urban areas and 4 crore houses in rural areas. This will provide a boost to the banks retail lending portfolio. Also, the other measures announced in the Budget such as higher focus on infrastructure and adoption of plug-and-play mode for power projects and introduction of gold monetisation schemes are some of the positive announcements for the banking industry.

Outlook for FY16As the inflation declined below the expected trajectory due to sharper decline in vegetable and fruit prices and hefty fall in international commodity prices and weak demand conditions, the RBI on Jan 20, 2015 reduced the policy repo rate by 25 basis points from 8% to 7.75%, introducing a downward bias in the interest rates. However, the transmission of the same cut in the banks lending rates would be dependent on various factors affecting the banks respective balance sheets. Also, projecting interest rates beyond six months would be difficult due to several uncertainties like normality of monsoon in FY16, future trajectory of global crude oil prices etc.

RBI also reduced the statutory liquidity ratio (SLR) rate by 50 basis points from 22% to 21.5% effective from Feb 7, 2015 which would provide banks more liberty to increase their lending to productive sectors on competitive terms so as to support investment and growth.

As the growth picks up, the banks would see a better credit growth and a broad based economic revival would bring about a sharp improvement in the asset quality of the banks. With the bond yields cooling off, the trading gains from bond portfolio of the bank would also improve providing a boost to the non-interest earnings. However, the overall gains in their trading portfolio would also depend on the dynamics of the other markets such as forex and equity.

Shri Ranjan DhawanMD & CEO

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BackgroundBank of Baroda (BoB) was incorporated in 1908 as The Bank of Baroda Ltd. In 1910, the bank opened its first branch in the city of Ahmedabad and in 1953, opened its first international branch at Mombasa, Kenya. In 1969, the bank was nationalized by GoI, thereby acquiring its current name and came out with its IPO in 1996.

BoB is amongst the top notch public sector banks with a business of more than ` 9.65 tn. The bank operates through a wide network spread across more than 5,000 branches including 104 overseas branches/offices located in 24 countries spanning across the US, Europe, Africa, Asia and Australia.BoB has diversified its business through a strong network of various subsidiaries like BOBCARDS Ltd, BOB Capital Markets Ltd, and joint ventures viz.India First Life Insurance Co Ltd & Baroda Pioneer Asset Management Co Ltd.

BoB has always nurtured enduring relationships with all its stakeholders since its inception which reflects its commitment towards inclusive growth, fulfilling entrepreneurial dreams and meeting aspirations of generations around the globe. The bank has always adopted a customer centric approach and innovative ways for delivery of speedy and effective service to its customers through its 25,000+ touch points including branches, ATMs, E-lobbies, Retail Loan Factories, SME Loan Factories, Agri Loan Factories and Corporate Financial Services. The bank is also constantly engaged in reinventing its host of products, services and facilities.

With BoBs strong international presence in 24 countries across the globe and its dominance in industrially advanced states like Maharashtra and Gujarat, BOB has managed to retain its unique position in the banking industry by offering a wide range of products and state of the art technology for superior customer experience.

Major Challenges FacedThough the sentiments were positive in FY15 which began on a buoyant note following the formation of a stable government at the centre on expectations of better growth, the economic growth continued to remain subdued. The banking sector has been facing a number of challenges because of this slowdown in the domestic economy along with the mixed environment in the global economy.

In FY15, both the agriculture sector and the services sectors demonstrated signs of slowdown. The growth of Index of Industrial Production (IIP) for the period Apr-Nov 2014 also stood at a low level of 2.2%. The lead indicators such as tractor and motorcycles sales and slowdown in the rural wage growth indicated subdued rural demand.Further, a mixed outlook on the global economy affected the external sectors adversely. As a result, the banking sector continued to remain under pressure as its profitability declined, on account of higher provisions due to asset quality concerns and lacklustre credit growth. It is therefore expected that the performance of the banking sector would remain muted as the credit growth and deposit growth would remain at low levels in the remaining part of the financial year.

However, the developments such as easing of commodity prices, crude oil prices in particular, shrinking of current account deficit and a credible inflation fighting regime of the RBI are supporting the positive sentiments. Number of initiatives taken by the Central Government in the field of mining, defence, land acquisitions, railways etc would further boosts the confidence of the sector. But the pace of recovery is bound to be slow due to sharp slowdown in investment and demand indicators.

Way Forward for BoBThe main focus of BoB in FY16 would be consolidating its balance sheet, improving asset quality and maintaining the ongoing healthy capital adequacy and liquidity ratios.BoB would also ensure a mix of optimum level of business between its various verticals such as retail, MSME, corporates and others as well as between its domestic and overseas operations.

Thus with the Customer Centricity and Growth with quality philosophy, BoB will continue to yield rich dividends to all its stakeholders year after year, besides meeting ever growing aspirations of its customers.

Banking Expectations for FY16As per the projections of International Monetary Fund (IMF), Indian economy is expected to grow at 6.3% in 2015 and 6.5% in 2016. IMF further said that boost in trade due to lower oil prices and pickup in industrial and investment activity after policy reforms has offset the weaker external demand.

As the manufacturing sector is showing signs of haul up, it is expected that the green shoots which are now visible would strengthen going forward. The advance indicators of industrial activity are indicating a modest improvement in the months ahead. The enhancement in

business confidence is also visible with the pick-up in new investment intentions, especially in transportation, power and manufacturing. Also as per CMIE, the stalling of projects has dropped significantly in the quarter ended Dec 2014 as compared to the corresponding quarter in the previous year.

Budget implication on BankingMoreover, the Union Budget announced on February 28, 2015 has ushered in a slew of measures which will have positive impact on the banking industry. The Budget has called for setting up of autonomous Bank Board Bureau to improve the governance in the public sector banks. This Bureau will search and select heads of Public Sector banks and helps them in developing differentiated strategies and capital raising plans through innovative financial methods and instruments. This is an interim step towards establishing a holding and investment Company for Banks. Further, the Budget has set forth the goal of housing for all by 2022. This would entail 2 crore houses in urban areas and 4 crore houses in rural areas. This will provide a boost to the banks retail lending portfolio. Also, the other measures announced in the Budget such as higher focus on infrastructure and adoption of plug-and-play mode for power projects and introduction of gold monetisation schemes are some of the positive announcements for the banking industry.

Outlook for FY16As the inflation declined below the expected trajectory due to sharper decline in vegetable and fruit prices and hefty fall in international commodity prices and weak demand conditions, the RBI on Jan 20, 2015 reduced the policy repo rate by 25 basis points from 8% to 7.75%, introducing a downward bias in the interest rates. However, the transmission of the same cut in the banks lending rates would be dependent on various factors affecting the banks respective balance sheets. Also, projecting interest rates beyond six months would be difficult due to several uncertainties like normality of monsoon in FY16, future trajectory of global crude oil prices etc.

RBI also reduced the statutory liquidity ratio (SLR) rate by 50 basis points from 22% to 21.5% effective from Feb 7, 2015 which would provide banks more liberty to increase their lending to productive sectors on competitive terms so as to support investment and growth.

As the growth picks up, the banks would see a better credit growth and a broad based economic revival would bring about a sharp improvement in the asset quality of the banks. With the bond yields cooling off, the trading gains from bond portfolio of the bank would also improve providing a boost to the non-interest earnings. However, the overall gains in their trading portfolio would also depend on the dynamics of the other markets such as forex and equity.

Shri Ranjan DhawanMD & CEO


E2

Bank of Baroda

Could you please share the major products & services offered by BOB for exporters: Project Loan /Term Loans (Domestic /ECB) to Exporters for setting up of the Units /Financing Machinery /Equipment etc. Arranging for Credit Report on the buyers of the Exporters. LC /BG Advising, Adding Confirmation, Issuance of Back to Back LC:BoBundertakesadvisingofLC/BG issuedbyOverseas

ImportersBanksinfavourofdomesticexporters.Asperrequirement,BankundertakestoaddconfirmationtoLC/BGorissuanceofBacktoBackLCorissuanceofBankGuaranteescounterguaranteedbyimportersbanks.

Facilitating Receipt of Advance Remittance against Export Order Rupee Export Credit (Pre-Shipment & Post-Shipment):BOBoffersbothpreandpost-shipmentcredittotheIndianexporters

throughRupeeDenominatedLoansinIndia.Rupeeexportcreditisavailableforamaximumperiodof360daysfromthedateoffirstdisbursement.Thecorporate,ifrequiredcanbookforwardcontractsinrespectoffutureexportcreditdrawls.

Pre-Shipment Credit in Foreign Currency (PCFC): BOB provides Packing Credit and/or Bill Purchase/Discounting in ForeignCurrency to the exporters enabling them to fund their procurement,manufacturing/ processing andpacking requirements.Theseloansareavailableatverycompetitiveinternationalinterestratescoveringthecostofbothdomesticaswellasimportcontentoftheexports.ThePCFCcanbeavailedinUS$,Euro,GBPandJapaneseYen.

Export Bill Negotiation / Discounting in Fgn Ccy:BOBoffersfinancingofexportbywayofbilldiscountingofexportbillsinFgnCCYtoprovidepostshipmentfinancetotheexportersatcompetitiveinternationalrateofinterest.ExportersareeligibletocoverthebillsdrawnunderL/C,non-creditbillsundersanctionedlimits.Thefacilityisalsoavailablein4currenciesi.e.US$,PoundSterling,EuroandJPY.

Collection of Bills /ReceivablesfortheExportersinrespectofexportsmadeoncollectionbasiswith/withoutLC. Booking of Forward Contract for hedging their Fgn Ccy Exposure by the Exporters Maintenance of EEFC Accounts Baroda Gold Card:Allexporters,includingthoseinsmallandmediumsectors,havingagoodtrackrecordandcreditworthiness

dependingonthecreditratingdoneasperbanksnorms.TheaccountshouldbeStandardcontinuouslyforthreeyearsandshouldnotbeinthecautionlistofECGCorRBI.However,exportfirmsmakinglossesforthepastthreeyearsorhavingoverdueexportbillsinexcessof10%ofthecurrentyearsturnoverarenoteligibleforGoldCard.

Correspondent Banking Service:BankofBarodaoffersCorrespondentBankingRelationshipServicestotheBankersofbuyersofExporterstofacilitateeaseofbusinessamongstbuyerandtheExporter.Similarly,BoBthroughitswideownnetworkandcorrespondentbanksworld-wide,facilitatesthebusinessdealingsoftheexporters&theirbuyer.BoBhasitspresenceinallthemajorMoneyCentresintheWorldsuchasNewYork,Brussels,London,Dubai,Singapore,HongKong,Sydney,Mauritius,etc.BranchesoftheBankareequippedwithlatesttechnologyandarehavingtrainedandexperiencedstaff.TheoverseaspresenceoftheBankisfurthersupportedbyalargenumberofcorrespondentBanks(morethan500)whichgivesBankofBarodaaccesstoeverycorneroftheGlobe.

Over the past 5 years have you observed any major trends in the growth of exporters (new accounts/growth in transactions)? Have we observed any new addition of products/commodities added?TopexportingsectorshaveshownadecliningtrendinexportfiguresduringthisFiscalYear.TheseincludeEngineering,Pharma,Gemsandjewellery,Cottonyarn/fabricsandPetroleumproducts.

What are the key risk mitigations undertaken by the bank in terms of exports?Un-hedged Foreign Currency Exposure of the exporter is one of themajor areas of concern for exporters. Tomitigate theprobabilityofdefaultintimesofhighcurrencyvolatilityexportersareinsistedtohedgetheirforeigncurrencyexposurethroughourderivativeproductsi.e.forwardsetc.

ShriRanjanDhawanMD&CEO


E3

CreditDefaultRiskfornon-paymentbythebuyersofExporters:i)FacilitatingcreditcheckonthebuyersthroughCreditOpinionsfromtheempanelledCreditRatingAgencies/InformationBureaus.ii)ObtainingExportCredit(Pre&Post)GuaranteeCover.CreditDefaultRiskofExporters:Morestringentduediligenceandappraisal.

Are there some key mandates /caution areas /advise you would like to share with exporters?TheglobalenvironmentatpresentisnotveryconducivefortradeasmanyofthebigmarketsliketheEuropeanUnion,Japan,RussiaandMiddleEast,whichaccountforover20%ofthetotalIndianexports,arenotdoingwell.Indianexportersneedtofocusmoreonquality,standards,servicessectorandenhancingtheirproductcompetitivenessintheglobalmarket.

With Make in India campaign gradually gaining momentum and companies aligning themselves to the Make in India initiative, what measures according to you will truly make the campaign successful and put India on to high growth trajectory? For long, ithasbeenbelievedthat,asaneconomy, Indianeglectedmanufacturingandreliedmoreontheservicesectorfor

growth.Inthiscontext,theMakeinIndiacomesasawelcomemove. The formationofastablegovernmenthasalready led to tremendousoptimismforprogress,andwearealreadywitnessing

animprovementinmacro-economicfactorsincludingtheimprovingGDP,surgeofthestockmarket,andmeasurestocontrolinflation.TheMakeinIndiaprogramwillonlyhelpbuildthismomentumtowardsmakingIndiaamanufacturingpowerhouse.

To make Make in India campaign successful, hurdles such as infrastructure bottlenecks, environmental clearances andunfriendlytaxregime,uncertaintiesoverpolicymatters(e.g.retrospectivechanges,cancellationoflicenses,de-allocationsofpriorallotments,non-makingavailablethefueletc))neededtoberemovedtoinstillconfidenceandprovidealevel-playingfieldformanufacturinginthecountryvis-a-visimports.Indiaiscurrentlyranked134thintheWorldBanksEaseofDoingBusinesslist.

Corruptionandredtapismneedstobecurbed. Toboostmanufacturing,thesupplybaseofcomponentandmaterialsneededtobe improved,demandaccelerated,besides

overcoming challenges like developing adequate infrastructure, providing skilled manpower and removing procedural andregulatoryformalities.

EarlyimplementationoftheGST(GoodsandServicesTax)willcertainlysendoutpositivesignalsthattheintentisgoingtobetranslatedtoactioninrightearnest.

UnionBudgethasmadeamoveinthisdirectionbygivingtimelinesforimplementationofGST(GoodsandServicesTax)tobeimplementedfromApril1,2016andadoptingplugandplaymodeforpowersector.

Theproposedphasedreductionincorporatetaxratefrom30%to25%infouryearswillmakeIndiamorecompetitiveinattractinginvestmentsandcreatingjobs.

As a banker, what additional role do you envisage for your bank to play in order to contribute towards the success of the Make in India Campaign?WeasoneoftheleadingBankinthecountrywithlargeOverseaspresenceandconsideredtobeIndiasInternationalBank,arewellpoisedandcommittedtocontributemaximumtothesuccessofMakeinIndiacampaign.WeshallbeactivelytakingpartinfacilitatingtheBankingFacilitiesatcompetitivepricings,timelyandinefficientwaytotheDomestic&Internationalentrepreneursinterestedinsettingupnewprojectsorincreasingtheirexistingcapacities.However,astheFinancialSectorisalreadystressedwiththedelinquencies,wewouldbeselectiveforBankableprojectsandthoroughonduediligence.


E4

Arjuna Natural Extracts Limited

Could you please share your thoughts on role of Indian players in the area of innovations, especially in niche areas such as botanical extracts?Therehascertainlybeenanupwardtrendintheareaofinnovationinnicheareaslikebotanicalextractsandiflookedintodeeply,onewouldfindthattheIndiancontributiontowardsthesamehasbeenphenomenal.Thefocusofinnovationhasseenaphaseofmajorevolution.Backin1993whenweforayedintothesectorwithaninnovativeproductlikeEssentialOilofMustarditwasconsideredpathbreaking.WhiletheobjectiveofHerbalSupplementIndustrythenwastodelivergenericextractstodayouraimistodevelopinnovativeproprietaryproductsthatarescientificallyvalidatedanddocumentedforefficacy.AndthemostwelcomingpartisthatthefocusoftheindustrygloballyiscurrentlyonIndianbasedspices.

Which factors have played a major role in your success, especially as a company which is extensively involved in R&D practices? What challenges have you faced and the steps you took to overcome them? AtArjunaweareledbyourvisionwhichistoremainasaninnovationdrivencompany.Webelieveinsettingnewbenchmarksbyintroducingnewrangeofproductsthanfollowingexistingtrends.OurpassionforresearchhelpsusinachievingthatandourflagshipproductBCM-95 isatestimonytothat.Whilenormalturmericextractsfacestheproblemofpoorabsorptioninthehumanbody,ArjunasBCM-95,apatentedturmericextractformulationoffers10timesmorebioavailabilitycomparedtomostofthebrandsinthemarket.Thegreatestchallengeforushasbeeninidentifyingrighttechnologyplatforms,whichcanonlybeovercomebykeepingourselvesupdatedthroughextensivetravellingandresearch.

What would you as a business want in terms of support from the government & other sector bodies?Oursincereappealtogovernmentistoputstressonthefollowingkeyaspectsthataffectourindustry StreamlineImportPoliciespertainingtorawmaterialswithfocusonprovidingclarityontestingparametersandcertifications

likePhytosanitaryetc. StreamlineexportpolicieswithregardtoprovidingclarificationonHScodes. ProvideClarityinregulatoryaffairs. LookintotheseriousfinancialimplicationofrecentlyintroducedNationalBioDiversityAct

What are your thoughts on the potential of Indias exports? What steps would help your business to export on a larger scale?NutraceuticalsectorhasimmensepotentialinleadingIndiawithitspromisinggrowthintheexportarena.Theneedofthehourisapro-activeapproachfromgoverningbodiesinprovidinglegislativesupporttoourindustry.Indiaisaresourcefulcountrywithalegacyofrichtraditionalknowledgeofherbsandspicesanditsbenefitscanonlybecommercializedunlessweseeanactivemovementfromourgovernmentinpromotingcontractfarmingandtimelyagriculturesupporttherebyconnectingindustryandfarmersformutualgrowthanddevelopment.

With Make in India campaign gradually gaining momentum and companies aligning themselves to the Make in India initiative, what measures according to you will truly make the campaign successful and put India on to high growth trajectory?TheMakeinIndiacampaigniscertainlyanovelinitiativethatdeservessupportandappreciationfromallofus.Themovementcangainanobviousmomentumonceouragriculturesectorisgivenitsdueimportancethroughproactivesupportfromourgovernment.ConnectingfarmersandIndustriesthroughcontractfarmingisjustoneofthemanywayswethinkwillboosttheexportgrowthofNutraceuticalIndustry.Weneedhigherlevelofawarenessamongourselvesabouttheumpteenpossibilitieswehavewithustogrowsymbiotically.

Dr.BennyAntonyJointManagingDirector


E5

Gislen Software Private Limited

Could you please share your thoughts on how Indian service providers, primarily those involved in providing IT solutions and services, enhance the quality of their services an

ecgc - d&b india's leading exporters 2015

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