SECTOR PROFILE

WHY INDIA?01

CHAMPION SECTORS02

PROFILE03

INVESTMENT OPPORTUNITIES04

BUSINESS & REGULATORYENVIRONMENT IN INDIA

05

WHY INDIA?01

ADVANTAGE INDIA

World’s largest democracy with

1.3 billionpeople

Expertise acrossa spectrum of

services

Largecompetitively-priced skilled

talent pool

Large andgrowing domestic

consumermarket

Demonstratedcapability to deliver

high-quality,cost-effective

solutions

Integrated taxstructure

Enablingbusiness

environment

Focus oninfrastructuredevelopment

Access totechnology

INDIA - A FAVORED INVESTMENT DESTINATION

Fastestgrowing major economy in the world in 2018 and 2019

6th largest economy in the world by nominal GDP and 3rd largest economy globally by PPP

1st rankglobally in inward greenfield FDI inflows in 2016

India ranks 8thin global services exports accounting for 3.4% ofworld trade incommercialservices

Services,

57%

Automobile, 5%

Pharma, 4%

Power, 4%

Others,

26%

Chemic %als, 4

Agriculture17%

Industry22%

Services61%

6.1

60.1Mauritius, 34%

Singapore, 17%

Japan, 8%

UK, 7%

USA, 6%

Netherlands, 6%

Others,22%

India’s GDP is likely to touch US$ 5 trillion by 2025

2.6

4.7

2017 2023

GDP in current prices (US$ Trillion) GVA share of sectors in FY18

43.2

163.1

27.8

95.7

2004-05 2016-17

Exports

Imports

Services Trade (US$ Billion)

14%

10%

1%

1%74%

Category-wise Services Export (2016-17, % share)

17%

15%

1%1%

66% Travel

Transport

Insurance

G.n.i.e

Miscellaneous*

Category-wise Services Import(2016-17, % share)

Gross Foreign Inflows-FDI (US$ Billion) Top FDI source countries (% share in inflows- Apr’00 to Mar’17)

G.n.i.e- Government not included elsewhere; * includes software, business, financial and communication services

20

04

-05

20

05

-06

20

06

-07

20

07

-08

20

08

-09

20

09

-10

20

10

-11

20

11

-12

20

12

-13

20

13

-14

20

14

-15

20

15

-16

20

16

-17

Sector-wise FDI inflows (% share in inflows-Apr ‘00 to Mar’17)

75

60

45

30

15

0

Source: IMF, FDi intelligence report 2017, RBI, WTO

GROWTH ENABLERS

Growing domestic consumer base Large, young human capital base

Rising disposable income and urbanization More than 800 million people under the age of 34 years

Urb

an p

op

ula

tio

n (%

of

tota

l)

Pe

r-c

ap

ita I

nc

om

e (

INR

)

18,523

61,855

27.8

31.270000

60000

50000

40000

30000

20000

10000

0

32.0

31.0

30.0

29.0

28.0

27.0

26.0

2001 2011

Urban Population and Per-capita Income

Per capita income Urban population

Per-capita Income data pertains to 2001-02 and 2011-12Source: Census 2011, MOSPI

Size of the workforce (millions)*

37

35

27

1400

1200

1000

800

600

400

200

0

Korea Thailand Japan US Europe China India

2015 2025 (Projected) 2050 (Projected)

49

47

36 77

71

55

213

217

235

492

466

405

1008

984

795 860

985

1145

* Population aged 15-64 yearsSource: United Nations population statistics

CHAMPIONSECTORS

02

Transport

& Logistics Healthcare Accounting

& Finance

Construction

& Related

Engineering

Services

Media &

Entertainment

Education

Services Financial

Services

Environmental

Services

Tourism

& Hospitality

IT & ITeS Legal

Services

Communication

Services

((( (((

INVESTMENT ANNOUNCEMENTS

Source: https://www.ibef.org/download/Infrastructure-Report-April-2018.pdf

In January 2018, the National Investment and Infrastructure Fund (NIIF) partnered with UAE-based DP World to create a platform that will mobilize investments worth US$ 3 billion into ports, terminals, transportation, and logistics businesses in India.

Squared Capital, a global infrastructure investment company, plans to raise up to US$ 4 billion through its second infrastructure fund, which will be invested in infrastructure assets in India and across the globe.

Government announced plans to invest US$ 6.98 billion in Northeast States.

In October 2017, the Government of India announced that highway projects worth Rs 1.45 trillion (US$ 22.6 billion) would be undertaken in the north-east region of the country in the coming two to three years.

The development of Navi Mumbai airport has been approved. The project will be developed on 74:26 per cent partnership between MIAL and Cidco and airport’s phase 1 with annual handling capacity of 10 million passengers each year rephrasing it from the origin

The Airport Authority of India (AAI) plans to spend over Rs 21,000 crore (US$ 3.2 billion) between 2018-22 to build new terminal and expand capacity of existing ones.

The sector witnessed 33 deals worth US$ 3.49 billion during FY2016-17 with 4 PE deals worth US$ 666 million and 29 M&A deals worth US$ 2.82 billion.

In, April 2017, companies in Malaysia and India signed deals for infrastructure projects worth US$ 3.86 to be implemented in India.

About US$ 50 billion (Rs 3,28,000 crores) invested so far by Government and Private companies in building world class infrastructure (in 2017)

PROFILE:INFRA ANDCONSTRUCTION

03

GLOBAL SCENARIO & FUTURE OUTLOOK

Source: Oxford Economics, InfraIC - Global infrastructure outlook

US$ 4.2 trillion global Infrastructure market in 2020

Electricity and roads together account for more than two-thirds of global investment needs

Electricity and roads together account for more than two-thirds of global investment needs

40%

35%

30%

25%

20%

15%

10%

5%

0%

2007-2015

Sectoral share of global infrastructure investment, 2007-2040

2016-2040 (Current trends) 2016-2040 (Investment need)

Electricity Road Telecoms Rail Water Port Airport

60

50%

40%

30%

20%

10%

0%

%

Regional share of global infrastructure investment, 2007-2040

Asia Americas Europe Africa Oceania

2007-2015 2016-2040 (Current trends) 2016-2040 (Investment need)

Total forecast infrastructure gaps

>S200 billion

S150-S200 billion

S100-S150 billion

S50-S100 billion

S0-S50 billion

N/A

China and India and other emerging Asian countries have been driving much of the growth in infrastructure spending

INDIA: A LARGE MARKET FOR INFRASTRUCTURE & CONSTRUCTION MARKET

Ramped up activity in the roads, buildings, irrigation, urban infrastructure, railways, housing, smart cities and low cost housing

US$ 738.5 Billion, 2017

One Trillion

3rd largest

7-8% p.a

Indian Construction Market

Construction Sector Market Size in 2025

Market of the World by 2025

Fastest growing market in the World

th thInfrastructure spending during 11 and 12

Five-Year Plan (US$ Bln)

75

.7

69

.4

89

.5

1

01

.6

1

01

.9

15

7.4

18

1.2

1

73

.8

21

0.6

2

60

.2

th11 Five Year Plan

th12 Five Year Plan

FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17

Infrastructure spending as% of GDP

9%

7.2%

9.0%

8.4%

7.9%

7.6%

7.4%

8.4%

7.9%

7.5%

7.2%

6.4%

5.2%

12th Five Year Plan

11th Five Year Plan

FY17

FY16

FY15

FY14

FY13

FY12

FY11

FY10

FY09

FY08

10th Five Year Plan

Revenue (U

S$ B

illio

n)

India Infrastructure Market, 2015-2021 (US$ Bln)

2015 2016 2017 2018 2019 2020 2021

US$ 2552 billion market in FY21

1,365.6

2,552.4

Source: IBEF, Economic Survey, Business Wire, KPMG Infrastructure Report

Rising private investments for infrastructure development

80

70%

60%

50%

40%

30%

20%

10%

0%

% 75%

65%

53%

47%

35%

25%

10th plan 11th plan 12th plan

Public Private

EXPORTS - INDIAN COMPANIES HAVE ESTABLISHEDPRESENCE ACROSS THE WORLD

Source: EY, Making India Brick by Brick, company websites

EPC Player Geography of expansion Focus areas

Larsen & Tourbo Ltd. The UAE, Saudi Arabia, Kuwait, Oman, Qatar, Singapore, Malaysia, Indonesia, Kenya, Mozambique, Algeria, Russia, Bahrain, Sri Lanka, Bangladesh, Jordan, Thailand

Engineering and construction projects in power transmissions and distribution, metro rail, expressways and highways, railway infrastructure(civil and track, electrical and mechanical, signalling and telecom packages) as well as residential construction

Engineers India Ltd. The UK, the UAE, Saudi Arabia, Malaysia, China, Italy Oil and Gas, petrochemicals, solar power, water and waste management, fertilizer plants

Gammon India Ltd. The US, Canada, Malaysia, Oman, Bangladesh, Bhutan, Nepal, Libya, Iraq, the UAE, Nigeria and Sri Lanka

Water supply, power plants, highways, desalination plant, bridge and jetty construction

IVRCL Nepal, Sri Lanka, the Middle East, the UAE, Kenya and Africa Hydroelectric power plant, residential project, water reservoirs, canals and non-residential buildings

AFCONS Infrastructure Ltd. Mauritius, Oman, Indonesia, Kuwait, Qatar, Madagascar, Jordan, Liberia, Yemen, the UAE, Bahrain

Industrial EPC, chemical plants, cement plants, mining projects, highway construction

Tata Projects Ltd. South Africa, Mauritius, Kenya, Qatar, the UAE Third-party inspection services for power T&D projects, power transmission line, oil and gas terminals

Ramky Infrastructure Singapore, the UAE and Gabonese Republic Infrastructure development, waste management, environment and property development

Shapoorji Pallonji & Co. Ltd. The UAE, Kuwait, Ghana, Qatar, Saudi Arabia, Algeria, Gambia, Nigeria, Sri Lanka and Kenya

Contracting services for residential, commercial, industrial, hospitality, healthcare and mixed use buildings

Punj Lloyd Indonesia, Malaysia, Qatar, Kazakhstan, Oman, Turkey, Singapore Offshore platforms, gas field development, oil and gas pipelines, storage tanks and terminals

Essar Projects Ltd. Singapore, the UAE, Zimbabwe, the US, Papua New Guinea Marine facilities and storage terminals, industrial plants, pipelines, steel plant, roads, water and hydroelectric power and airport projects

IRCON International Limited

Malaysia, Nepal, Bangladesh, Ethiopia, Afghanistan, Alegria, Sri Lanka, Mozambique

Railways and highways construction, EHP sub-station and MRTS

NBCC (India) Limited Oman, Mauritius, Maldives, Yemen, Turkey, Botswana, Libya, Iraq, Nepal

Project Management Consultancy (Roads, Hospitals, Institutions, Offices, Airports, Bridges, Industrial & Environmental Structures, etc), Real Estate Development, EPC (Chimneys, Cooling Towers, various types of Power Plant Works)

22.08

FY13

23.30

FY14

24.06

FY15

24.18

FY16

24.29

FY17

24.67

FY18*

Cumulative FDI inflow in Construction activities (US$ billion)

US$ 24.67 billion cumulative FDI inflows in construction activities till Dec 2017

Construction activities sector includes infrastructure

US$ 12.36 billion cumulative FDI inflows in construction development sector till Dec 17

Construction Development sector includes townships, built-up infrastructure and construction- development projects

Cumulative FDI inflow in Construction development (US$ billion)

2.09

FY13

2.58

FY14

3.43

FY15

7.96

FY16

9.82

FY17

12.36

FY18*

NDSECTOR WITH 2 HIGHEST FDI INFLOW

2nd highest FDI receiving sector

100% FDI allowed in Infrastructure and construction sector

AGRICULTURE/ ANIMAL HUSBANDRY

MINING

PHARMACEUTICALS

AVIATION

MEDIA

Pisciculture, aquaculture and animal husbandry include on June 20: already existing in floriculture, horticulture

Coal, lignite, precious ores, coal processing, titanium

Extended to brownfieldprojects; 100 per cent FDI already in greenfield

Brownfield airports included. ground handling Service, non Scheduled air transport already open to full FDI

Cable, DTH, non-news uplinking technical-scientific magazine publishing

PETROLEUM

CONSTRUCTION DEVELOPMENTTownship, housing, built-up infrastructure, industrial parks

SATELLITES

FINANCIAL SERVICES

TELECOM

Exploration, pipeline, regasification infrastructure

Establishment and operation, subjects to ISRO and government guidelines

Asset reconstruction companies, NBFCs,ATM operations

All services, including telecom infrastructure providers

THE 100% CLUBSECTORS WHERE 100 PER CENT FOREIGN INVESTMENT WAS ALREADY PERMITTED

Source: IBEF 2018, EEPC, doing business in India 2017

Serv

ices

Co

nstr

uctio

n -

To

wnsh

ip,

Ho

usi

ng

, B

uilt

-

UP,

Infr

ast

ructu

re

Tele

co

mm

unic

atio

ns

Co

mp

ute

r S

oft

ware

&

Hard

ware

Auto

mo

bile

In

dust

ry

Dru

gs

&

Pharm

aceuticals

Trad

ing

Chem

icals

(O

thers

th

en F

ert

ilize

rs)

Po

wer

Meta

llurg

ical

Ind

ust

ries

18

16

14

12

10

8

6

4

2

0

18% share

8share

% 7share

% 7share

% 5share

% 4share

% 4share

% 4share

% 4share

% 3share

%

FDI & ACQUISITION ACTIVITIES IN THE SECTOR

33 deals in FY 2016-17 with US$ 3.49 billion investment in power, roads and renewable sectors

NIIF* with DP World(UAE): investment of US$ 3 billion into ports, terminals, transportation, and logistics businesses in Jan 2018

Squared Capital: US$ 4 billion invested in infrastructure assets in India and across the globe

US$ 2.39 billion investment in development of Navi Mumbai airport

US$ 453 million by Gamma Group (UAE) in the infrastructure, health & education sectors of Kerala

US$ 550 million joint investment by IL&FS and Lone Star

Renewable Energy

Source: Press Information Bureau (PIB), EEPC, doing business in India 2017*National Investment and Infrastructure Fund (NIIF)

Acquirer Portfolio size Approx. value

2016Welspun Renewables

Tata Power Renewable Energy

1,140 $1,380 mn

SunEdison India

Greenko Group

1,500-1,600 $400-500 mn

2017

KCT Renewable

ReNew Power

103MV $154mn

Inox Renewables

Leap Green

260MW NA

GLOBAL INTEREST IN INDIA

Region Sector Focus EPC Strategy

Europe · Highways

· Oil and gas

· Thermal power

· Power transmission

· Ports

· Airports

· Buildings

· Focused on civil contracting for highways and dredging

· Focused on design and project management in Oil and gas EPC

· Undertakes entire construction work including civil work for thermal power and solar power projects

· Strong presence in supply of power transmission and distribution equipment

· Expressed interest in participation in construction of greenfield airports

China/ Taiwan/ Hong Kong/ Singapore/ Malaysia

· Railways

· Thermal power

· Solar power

· Power transmission

· MRTS

· Waste water management

· Real Estate

· Undertake entire construction activity and O&M services for thermal power projects

· Key supplier of power equipment including BTG, solar modules and transmission equipment

· Focused on construction of metro station, tunnelling works and supply of metro coaches

· Considering to partner with Indian companies for development of high speed rail projects

· Waste water management - complete services from design, engineering, construction and installation of facilities

Middle East · Buildings

· Power

· Executing building contracts in partnership with Indian players

· Undertake entire construction work including civil, mechanical, electrical etc. for thermal power projects

Japan · Railways/ high-speed rail

· MRTS

· Thermal power

· Solar power

· Power transmission

· Undertakes entire construction works and O&M services for thermal power projects

· Operating through owned subsidiaries or formed a JV with Indian companies for supply of BTG and T&D related

equipment

· Railways-Engaged in electrification works, civil works, track works, signalling supply of railways and metro coaches

· Considering to participate in development of high-speed rail projects

Source: EY, making India Brick by Brick, http://www.ey.com/Publication/vwLUAssets/EY-making-india-brick-by-brick/$FILE/EY-making-india-brick-by-brick.pdf

EMPLOYMENT TREND

The construction sector has accounted for more than a third of new jobs post liberalisation

However, due to technology influx, the labour intensity is decreasing as compared to other sectors

Source: NCAER, RBI report, CRISIL

Sectors

Construction

Trade

Miscellaneous service(includes real estate brokerage)

Transport and storage

Education

Business services

Hotels and restaurants

Gems, jewellery andmisc. manufacturing

Food products,beverages and tobacco

Financial services

Health and social work

20.13

24.84

7.38

9.78

3.13

1.47

2.49

3.02

4.92

2.42

0.81

14.40

10.04

5.02

4.29

3.22

2.18

1.89

1.43

2.42

1.11

1.08

Sharein total

workforcein 2015-16

(in%)

1980-81and

1990-91(in %)

1990-1991and

2015-16(in %)

35.74

14.56

8.43

7.44

6.26

5.99

3.75

2.46

2.28

2.26

2.07

The fastest growing sectors are least labour intensive

25.0

20.0

15.0

10.0

5.0

0.0

Size of bubble represents labour intensity of the sector

Agriculture

Construction

TransportStorageCommunicationBroadcasting services

Manufacturing

Trade HotelsRestaurant

MiningUtilities

FinancialservicesReal estateProfessionalservices

Public administrationDefenceCommunity services

0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 9.0 10.0 11.0 12.0

Source: CRISIL Research Average % output growth FY15 to FY17%

share

of

secto

r in

to

tal o

utp

ut

35.26Other

3.77%Sales, shop, shopkeeper

4.04%Drivers

7.56%Other labourers 14.29%

Agri labour

35.08%Construction

Sector has highest share in employing immigrant low wage manpower

Source: Press Information Bureau (PIB)

GOVERNMENT FOCUS AREAS IN THIS SECTOR

100% FDI permitted across various infrastructure sectors.

Transportation: Roads, Railways, airports and ports

Affordable Housing: Target to build 5 crore homes over 5 years

24x7 Power: US$ 300 billion investment in the next 10 years

Urban Infra: Investment of US$ 31,650 billion has been proposed by 99 cities under their Smart City plans

Housing for All

Smart Cities Mission

Clean India

Clean Drinking Water

Rural Electrification

ENGINEERING SERVICES MARKET

Source: iBEF 2018, http://www.business-standard.com/article/companies/india-will-be-the-global-hub-for-engineering-services-going-ahead-113100800801_1.html

India’s outsourcing industry is

pegged at US$ 150 billion and

has been hailed as an engine

of job creation

The engineering research and

development (ER&D) industry to

touch US$ 40 billion by 2020 from

the current US$ 10-11 billion

Advantage India

India has natural and acquired advantage in terms of talent availability, and a destination for high-quality and competitive technology skills.

Growth of engineering services is linked to investments in other sectors such as power, infrastructure, automobile and auto components

FY17 2020F

24

45

50

40

30

20

10

0

Outsourcing due to cost reason

More backend work & minimum R&D

Outsourcing due to skills

More high-end technology work

Evolution of Indian Engineering Outsourcing Service

In 2000 In 2017

THE REAL ESTATE MARKET

Source: IBEF; EY

Indian Real estate sector in India is expected to reach a market size of US$ 180 billion by 2020.

0

50

100

150

200

2015 2020F

126

180

The government also launched 10 key policies for real estate sector in 2016, namely:

• Real Estate Regulatory Act

• Benami Transactions Act

• Boost to affordable housing construction

• Interest subsidy to home buyers

• Change in arbitration norms

• Service tax exemption

• Dividend Distribution Tax (DDT) exemption

• Goods and Services Tax

• Demonetisation

• PR for foreign investors

4th largest sector in terms of FDI inflows

FDI in the sector is estimated to grow to US$ 25 billion by Fy22

Government of India’s Housing for All initiative is expected to bring US$ 1.3 trillion investments in the housing sector by 2025.

By 2022, real estate and construction sector in India is expected to generate 75 million jobs and emerge as the largest employer in the country

Growth Drivers

• Urban Housing

• Tourism

• Retail/Commercial space

• Easier Finance

12.00%

10.00%

8.00%

6.00%

4.00%

2.00%

0.00%

Fy2

011

FY

2012

FY

2013

FY

2014

FY

2015

FY

2016

FY

2017

FY

2018F

FY

2019F

Advanced Economies Emerging Economies

India China

Fy2

010

HOUSING DEVELOPMENT

* Pradhan Mantri Awas Yojana-Gramin/ UrbanSource: IBEF, 2018, Ministry of Rural Development, PMAY

West, 7%North East, 1%

Others, 0%

Central, 12%

South, 8%

North, 20%

East, 52%

Housing for All by 2022, the government’s flagship scheme PMAY-G/U* launched in June 2015 aims to build 20 million urban homes and 30 million rural houses by 2022

Approx. 60 million new homes are expected to be built in India between 2018 and 2024 with social and affordable housing rising almost 70% to 10.5 million by 2024

In March 2018, construction of additional 3,21,567 affordable houses was sanctioned under PMAY

35.0

30.0

25.0

20.0

15.0

10.0

5.0

0.0

(ho

use

s in

lakh

s)

60

40

20

0

(lakh

s )

ho

use

s

10.4 10.3 11.718

32

51 51

FY13 FY14 FY15 FY16 FY17 FY18E FY19E

Strong traction tocontinue in ruralhousing construction overnext 2 years

FY17A* FY18E FY19E FY20E FY21E FY22E

1.5

12

26 26

30 29.8

URBAN INFRASTRUCTURE DEVELOPMENT

Source: Ministry of Urban Development

US$ 1200 Billion Urban Investment requirement

US$ 1000 Billion O&M cost

BY Year 2030

Under Operation

Under Construction

Planned

311 Kms 532 Kms 386 Kms

9 Cities 13 Cities 11 Cities

METRO rail core focus in urban mobility infra development – planned expansion across 11 cities

50% India to be urban by Year 2050; currently above 31%

Key global partnership areas in Urban infra development

1951 1961 1971 1981 1991 2001 2011 2050

Census of IndiaSource:

The growingurban footprintUrbanization share (%)

>50.031.16

27.81

25.71

23.34

19.9117.97

17.29

Finance

Construction

Capacity Building

Technology

100 SMART CITIES

Source: Ministry of Urban Development, www.thehindubusinessline.com, www.smartcite, ourstory.coms, conomic Times-10-Apr-2018, Geospatial World (press release) (blog)-12-Apr-2018

Urban areas are expected to house 40% of India’s population and contribute 75 % of India’s GDP by 2030

Smart Cities Inviting International Interest

Russia’s Russoft Association of Software entered into a formal partnership with NASSCOM. Areas of collaboration would include smart cities and mega infrastructure

In 2017 India and Sweden agreed to further deepen their cooperation in the Smart Cities initiative, transport and energy sectors- including transit-oriented urban development, air pollution control, waste management, waste-to-energy, waste-water treatment, district cooling and circular economy.

A number of Chinese companies met the Industry representatives in Hyderabad to explore the possibility of working on projects in the upcoming smart cities projects in India.

Real Estate Sector Share in GDP Will increase from 6% to 10-12% due to the smart cities

The real estate sector contributes about 6% to India’s GDP

With the vision of building 100 smart cities, this share to increase to 10-12% by 2022

SMART CITIES FUELLING THE CONSTRUCTION SECTOR

Source: Ministry of Urban Development

Total Winning Proposals- 99 cities

Total cost of Projects- US$ 30 billion

Total Pan city solution cost- US$ 5.7 billion

Total Urban population impacted- 99 million

Total area based development cost- US$ 24.32 billion

E-Governance and Citizen Services

1. Public Information, Grievance Redressal

2. Electronic Service Delivery3. Citizen Engagement4. Citizens - City's Eyes and Ears5. Video Crime Monitoring

Waste Management

6. Waste to Energy & Fuel7. Waste to Compost8. Waste water to be Treated9. Recycling and Reduction of

C&D Waste

Water Management

10. Smart Meters and Management

11. Leakage Identification, Preventive Maint.

12. Water Quality Monitoring

Energy Management13. Smart Meters and Management14. Renewable Sources of Energy15. Energy Efficient & Green

Buildings

Urban Mobility

16. Smart Parking17. Intelligent Traffic Management18. Integrated Multi-Modal

Transport

Others

19. Tele-Medicine & Tele Education20. Incubation/ Trade Facilitation

Centres21. Skill Development Centers

POWER SECTOR FUELING CONSTRUCTION MARKET

Source: IBEF, 2018

Power generation capacity of 334.15 GW in Feb 2018

• 10.57% CAGR of Capacity from FY 09–17

• 326 GW by the end of FY17

• Annual growth rate of renewable energy at 27% and conventional energy at 18%

Indian energy sector is expected to offer investment opportunities worth US$ 300 billion over the next 10 years.

% Share of power sources in India

Renewable10.80%

Hydro - 20.76%

Nuclear 2.55%

Thermal - 66%

US$ 589 Mnto provide continuos powersupply to rural India

US$ 756 MnStrengthening of sub-transmission network in the urban areas

US$ 648 Mnwind power, solar powerand green energy corridor project

US$ 2.47 Bnfor last mile connectivity to rural households

132.3 143.1 148.0 159.4173.6

199.9223.3

237.7

272.5 280.3

326.8

FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17

Installed electricity generation capacity (GW)

GW - Gigawatt

CONSTRUCTION EQUIPMENT REVENUES ON AN UPTREND

Source: IBEF 2018

•

• 40% growth rate

• US$ 7 billion by FY20

US$ 4.2 billion value in FY17

Rising demand for construction equipment in accordance with Infrastructure investments spends & needs of the country

• Excavators• Backhoe• Loaders• Bull Dozers• Wheeled loading

shovels

Constructionprojects and

Mining activities

Construction- RealEstate, Infra.,

Irrigation projects

• Batching Plants• Transit Mixers• Concrete Pumps• Stone Crushers

Earth Moving Equipment

ConcreteEquipment

19%

13%3%

65%

Earth Moving Equipment

Concrete Equipment

Material Handling Equipment

Material Processing Equipment

Source: NBM & CW

Constructionand Industrial

sectors

• Cranes• Hoists• Conveyors• Fork Lifts• Feeders• Bucket Elevators

Material Handlingand processing

Equipment

Key Driving Sectors

Construction Equipment IndustryConstruction Equipment

Segment-wise MarketShare

3.7 3.94.3

4.64.2

5.1

3.9

6.5

2.9 3

4.2

5

FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY20

Construction equipment industry revenue (US$ billion)

KEY PLAYERS IN THE SECTOR – PAN INDIA FOCUS

Source: PIB

Mumbai–Pune BOT Project

Pune–Nashik BOT Project,

Bharuch–Surat BOT Project,

Thane–Bhiwandi by-pass 4 Lane Project,

Thane Ghodbunder BOT Project,

Ahmedabad–Baroda NH-8

6 laning of Agra - Etawah bypass

North Karnataka Expressway

West Gujarat Expressway

Noida Toll Bridge,

Ahmedabad - Mehsana Toll Road

East Coast Road

Kotakata Kurnool Road Project

East Coast Road

Hazaribagh Ranchi Expressway Ltd Karnataka Toll Bridges

NH6 Dhankuni to Kharagpur

Sambalpur Baragarh

NH4 Belgaum Dharwad

NH-3 Pimpalgaon – Nashik – Gonde Road (JV with L&T)

Jaora – Nayagaon Road

Chennai Outer Ring Road,

Bandra–Worli Sea Link

Badarpur Elevated Highway Project,

Delhi Faridabad Elevated Expressway

Breakwater construction for new port at Ennore, Chennai,

Hyderabad-Vijayawada Road Project, Sikkim’s Greenfield Airport,

The Medanta (Medicity),

Bangalore Metro Rail Project,

Elevated Viaduct, Delhi Metro

Hyderabad Metro Rail, 6-lane bridge over the Ganges river, Mechanise

Track Laying for India's first 626 km Dedicated Freight Corridor,

Monorail in Mumbai, Railway electrification works and Rigid Overhead

Contact System for the Delhi Metro, Kakrapar nuclear power project

and Srinagar Hydel Power Project, Uttaranchal

SEGMENT WISE INDIAN AND INTERNATIONAL PLAYERS IN THE SECTOR

Source: EY, making India brick by Brick, http://www.ey.com/Publication/vwLUAssets/EY-making-india-brick-by-brick/$FILE/EY-making-india-brick-by-brick.pdf

Segment Major domestic players Major foreign players Insight

Infrastructure/ General Contracting Larsen & Toubro Ltd., Hindustan Construction Co. Ltd., Gammon India, IVRCL, Simplex Infrastructure Ltd., Gayatri Projects Ltd., Patel Engineering Ltd., Era Infra Engineering Ltd., Sadbhav Engineering Limited, Nagarjuna Construction Company Ltd.

Isolux Corsan, ITD Cementation India Limited. IJM (India) Infrastructure Limited, Leighton, ACS Construction Group Ltd., Vinci Construction, CEC

Increasing Opportunities in the infrastructure sector have attracted many new domestic as well as new entrants to this space

Building construction- Residential and Commercial Segments

Larsen & Toubro Ltd., Shapoorji Pallonji & Co. Ltd., Ahluwalia Contracts (India) Ltd., B L Kashyap & Sons Ltd., B.G. Shirke Construction Technology Private limited, B. E. Billimoria & Co. Ltd., BSEL Infrastructure Realty Limited, Consolidated Construction Consortium Ltd., Mackintosh Burn Ltd., Man Infraconstruction Limited, Supreme Infrastructure India Ltd., Unity Infraprojects Ltd., Vascon Engineers Ltd.

Arabian Construction Company, Leighton, Samsung Engineering

Space is organised in nature and is dominated primarily by local contractors

Oil & Gas EPC Larsen & Toubro Ltd., Punj Lloyd Ltd., Petron Engineering Construction Limited, Essar Projects (India) Limited, McNally Bharat Engineering Co. Ltd., Leighton, Engineers India Limited, Fabtech Projects & engineering Ltd., Jaihind Projects Ltd.

Aker Solutions, Leighton, Welspun Contractors Pvt. Ltd., Bechtel Corporation,Linde Engineering India Pvt. Ltd., Tecnimont ICB, Samsung Engineerin, Uhde India Limited

Significant competition from foreign participants, especially for offshore contracts; business model focused on project management rather than direct execution

INVESTMENTOPPORTUNITIES

04

Rising budget allocation of road sector

Growing private sector involvement

Recent investment & plans

GOI Budget allocation of US$ 10.97 billion in 2018-19 for National highways

Share of Road projects - 48.4% of total PPP projects in India

Investment of US$ 31 billion is expected in PPP by 2020 for national highways

Upgradation of 2 lane to 4 lane highways: US$ 65 billion allocated

Monetisation of 105 highway projects, worth US$ 21.57 billion

US$ 107.64 billion investment in road network of 83,677 km over the next five years

Total Winning Proposals

99 cities

Total cost of Projects

US$ 30 billion

US$ 1200 Billion Urban Investment requirement

US$ 1000 Billion O&M cost

BY

Year

2030

2032 (Estimated) 2017 (Total)

Passenger traffic: 11.81%

Freight traffic: 6.8%

Aircraft Movement: 5.77%

224MN

2.7MT

1.86MN

500MN

11.4MT

5.8MN

Domestic International

8% 6.1%

50% India to be urban by Year 2050; currently above 31%

1951 1961 1971 1981 1991 2001 2011 2050

Source: Census of India

The growingurban footprintUrbanization share (%)

>50.031.16

27.81

25.71

23.34

19.9117.97

17.29

WHY INVEST IN INDIA

DRIVERS FOR GROWTH

Source: PWC 2017

In recent years, India has emerged as one of the most attractive destinations for doing business and making investments; India ranks among the top 10 FDI destinations globally.

Public Private partnerships (PPP) in the infrastructure space have increased and are expected to grow even further.

Investment worth 60 billion US$ in urban infrastructure are estimated over the next 20 years

100 smart cities and 500 cities are likely to invite investments worth 2 trillion INR in the next 5 years.

Various Infrastructure projects are proposed for the development of highways, modernisation and development of railway lines, modernisation and setting up of ports, etc. - Many are proposed to be undertaken through PPP models.

INVESTMENT OPPORTUNITY IN INFRASTRUCTURE

Source: IBEF, 2018, PWC 2017

Urban Infrastructure

• 100 Smart Cities are to be developed as part of the Smart Cities Mission, which is aimed at sustainable and inclusive development.

• 100 smart cities and 500 towns are to be developed under PPP models. This is likely to invite an investment of 31 billion US$.

• 20 million houses across 4,041 towns are to be built by 2022 as part of the Housing for All Scheme, for which the government has approved 6.7 billion US$.

• 9.54 billion US$ is to be invested across 4,041 towns under the Clean India Campaign in urban areas.

• The National Investment and Infrastructure Fund(NIIF) was set up to maximise economic impact through infrastructure development.

100% FDI allowed in the construction development sector under the automatic route, subject to certain conditions. 100% tax deduction on profits to an undertaking in a housing project approved from June 2016 to March 2019 and completed in 3 years, subject to certain conditions.

Roads and highways

• In Union Budget 2017, the budget allocation for highways increased to 10 billion US$.

• As on 31 March 2016, there were 136 PPP projects underway.

• There were proposals to develop 63,591 km of national highways under various programmes.

• There exist investment opportunities in various expressway projects, highway projects and tunnel projects.

• The Bharatmala Project proposed a long-term development initiative for the development of 44,000 km of national highways at an estimated cost of 97.2 billion US$.

• Current length of national highways: 1,01,010 km

100% FDI allowed, subject to laws and regulations and certain conditions.

Airports

• Greenfield airports at Navi Mumbai and Goa are expected to have an investment opportunity of 3 billion US$

• Brownfield airports and 50 low-cost airports are to be developed across India

• The number of operational airports is to be increased from 125 as on 31 March 2016 to 250 by 2020

• Agartala, Imphal and Dibrugarh are to be developed as intraregional hubs, and Guwahati is to be developed as an interregional hub.

• The government plans to spend 3 billion US$ on modernisation and upgradation of existing airports.

• It also plans to develop new airports in Tier II and Tier III cities.

100% FDI allowed under the automatic route for greenfield airport projects and brownfield airport projects, subject to certain conditions.

Railways

• The Indian Railways is expected to have a prospective investment of 130.76 billion US$ in the next 5 years.

• It also aims to boost passenger amenities by involving PPP investments at all major stations

• Port connectivity to be taken up on Priority; SPVs floated under PPP models are to strengthen rail connectivity with various ports.

• International facilities are proposed to be developed at identified stations through PPP models

• To develop a network of freight terminals, the policy of Private Freight Terminals based on PPP models is being further refined

• Private Investment in railway logistics is being encouraged, and the set-up of logistics parks is being proposed.

• Mass Rapid Transit System (MRTS) projects have been planned under PPP models.

100% FDI allowed in the railway infrastructure segment, subject to certain conditions.

Technologies and solutions for the promotion of low cost and affordable housing

Green/ Energy efficient building material and technology

Sustainable and environmentally friendly building materials

Technologies for smart sustainable cities and integrated townships

1

2

3

4

GOVERNMENT INITIATIVES

Source: IBEF 2018*public private partnership

For 2018-19, the total capital expenditure of Railways will be US$ 22.55 billion

As per Union Budget 2018-19, capacity constraints in the railways network will be eliminated through doubling of 18,000 km of tracks, third and fourth lines and conversion of 5,000 km of tracks into broad gauge.

A new Metro Rail Policy was approved in August 2017 mandating PPP* component in new projects.

Railways &Metro Rail

Budget allocation for road sector increased to US$ 10.07 billion in 2017-18 from US$ 8.99 billion in 2016-17.

2 , 0 0 0 k m s o f c o a s t a l connectivity roads have been identified for construction and development .

Select airports in Tier 2 cities will be taken up for operation and maintenance in the PPP mode in the coming years.

Road projects worth US$ 107.64 billion approved in October 2017.

Roads &Airport

In 2017, government announced plans to faci l i tate higher inves tment in a f fo rdab le housing.

“Housing for All” programme, launched in June 2015 aims to build 20 million urban homes and 30 million rural houses by 2022.

In March 2018, construction of additional 3,21,567 affordable houses was sanctioned

60 million new homes are expected to be built in India between 2018 and 2024.

Housing

In December 2017, the North East Special Infrastructure D e v e l o p m e n t S c h e m e (NESIDS) was approved by GOI with 100% funding from the central government for infrastructure projects in the region.

Highway projects worth US$ 2 2 . 6 b i l l i o n w o u l d b e undertaken in north-east region of the country.

Region Development –North East

GOVERNMENT INITIATIVES

Source: IBEF 2018

The Airports Authority of India aims to bring 250 airports under operation across the country by 2020.

The AAI has developed and upgraded over 23 metro airports in the last 5 years.

AAI plans to develop city-side infrastructure at 13 regional airports across India, with help from private players for building of hotels, car parks and other facilities, and thereby boost its non-aeronautical revenues.

Metro Airports

The AAI plans to spend over US$ 3.2 billion between 2018-22 to build new terminal and expand capacity of existing ones.

22 airports to get connected under regional connectivity scheme of AAI.

30 airport development projects are under progress across various regions in Northeast India.

AAI plans to develop over 20 airports in tier II and III cities in next 5 years.

Around 55 new airports are required in India by 2030 with an investment of US$ 36-45 billion.

Non-metroAirports

Planned investment by Government of India in 2018-19.

Infrastructure sector allocation: US$ 92.22 million.

National Highway: US$ 10.97 million

Road sector: US$ 18.69 billion

Railways: US$ 22.86 billion

Universal household electrification in the country: US$ 2.47 billion

Wind and solar power: US$ 648.75 billion

Budget 2018-19

INDUSTRY TESTIMONIALS

Source: PIB

All 11 road projects of

~1,000 km are revenue

generating. We are planning

to monetise the entire road

portfolio and the due

diligence process is in an

advanced stage.

Lalit Jalan

Acting CEO

Reliance Infrastructure

Affordable Housing space

offers plenty of

opportunities with the

government’s initiatives

such as Housing for All by

2022, Smart Cities, etc.

Deep Vadodaria

COO

Nila Infrastructure Ltd

The requirement for

renewable energy is going

to go up. The market is in

a nascent stage. With

government policies, the

growth will be tremendous.

Dhimant J Shah

Director

Veer Energy and Infrastructure Ltd

BUSINESS &REGULATORY ENVIRONMENTIN INDIA

05

REFORMS FOCUS

Fiscalprudence andaccountability

Integratedtax

regime

Enabling Ecosystem

Servicespush

Job creation and inclusive

growth

REGULATORY ENVIRONMENT - INDIA

Foreign Investment Framework

• Governed by Foreign Exchange Management Act, 1999

• Progressive liberalization in the policies

• Automatic route (No prior approval requirement) such as railway and road infrastructure

• Approval route (Prior government approval required before setup) such as multi brand retail trading

Foreign Direct Investment (FDI) in India

Evolution of foreign investment regulations

FDI INVESTMENT ROUTE

Under Automatic Route Prior Approval Route

No requirement of any prior regulatory approval

Filing an intimation with RBI in prescribed format within 30

days of investment

Filing particulars of issue of shares within 30 days of issue

of shares to foreign investors

Filing an intimation with RBI in prescribed format within 30

days of investment

Filing particulars of issue of shares within 30 days of issue

of shares to foreign investors

Required approval from Govt. of India – Considered by respective Administrative Ministry/Department.

BUSINESS PRESENCE IN INDIA - FORM OF ENTITIES

Establishes local presence

Operates as a foreign company

Foreign Company

Liaison Office Project Office Branch Office Joint Ventures Limited Liability Partnership

Wholly Owned Subsidiary

Key considerations for choosing

investment vehicles

• Commercial considerations

• Regulatory framework (prior approval requirements for Chinese companies)

• Tax considerations

• Cost of operations{

This Report has been prepared by CII.

IT & ITES