Presentation at International Institute of Studies, University of Chile, Santiago

(Friday, May 16, 2014, 0930-1130 hrs)

Indian Economy

Factors for Growth of Indian Economy

India-Chile Relations

General ProfileWorld's 2nd fastest growing major economy 2nd & 3rd largest in Asia in term of PPP and

Nominal GDP, respectively16th largest exporter and 8th largest

importerEconomy till 1991 based on a mixed economy Since 1991, liberalization measures were

adopted

GDP (Nominal): US$1.87  trillion (10th largest in the world)  GDP (PPP): US$5.07 trillion (3rd largest in the world) GDP Growth Rate: 5.0% (2012-13) GDP Per Capita: US$1,504 (Nominal:130th) &

US$4,077(PPP: 127th) GDP by Sector: agriculture (16.9%), industry (17%), services

(66.1%) Consumer Price Index: 8.79% Below Poverty Line: 37.2%(2004-05), 11.8%(2013-14) Labour Force: 487.3 million Labour Force by Occupation: agriculture (49%), industry

(20%), services (31%) Unemployment: 3% Urban, 2% Rural Main Industries: textiles, chemicals, food processing, steel,

transportation equipment, cement, mining, petroleum, machinery, software, pharmaceuticals

Exports: US$313.2 billionMain Items of Exports: software, petrochemicals,

pharmaceuticals, precious stones, textiles, machinery, iron ore, chemicals, automobiles

Main Destinations of Exports: UAE (12.3%), USA (12.2%), China (5.0%), Singapore (4.9%), Hong Kong (4.1%)

Imports: US$467.5 billionMain Items of Imports: crude oil, raw precious stones,

machinery, fertilizer, coal, steel, chemicalsMain Sources of Imports: China (10.7%), UAE (7.8%),

Saudi Arabia (6.8%), Switzerland (6.2%), United States (5.1%)

FDI Stock: US$47 billionGross External Debt: US$412.2 billion

Public Debt - 67.59% of GDPBudget Deficit - 2% of GDPRevenues - US$181.3 billionExpenses - US$281.6 billion Economic Aid - US$2.107 billionForeign Exchange Reserves – US$311.85

billion

FACTORSAgriculture & Allied Sectors largest economic sector accounted for 17% of GDP in 2012 employed 51% of the total workforce 2nd worldwide in farm output largest producer of milk, jute and pulses 2nd largest cattle population with 175 million animals.  2nd largest producer of rice, wheat, sugarcane, cotton

and peanuts 2nd largest fruit and vegetable producer 2nd largest producer and largest consumer of silk 3rd largest fishing industry

accounts for 26% of GDP employed 22% of the total workforce 10th in terms of nominal factory outputTextiles, chemicals, pharmaceuticals,

machineries, cement, steel, mining, engineering, automobiles, motorcycles, electrical and electronics

Micro, Small and Medium Enterprises

2nd largest source of employment after agriculture

contributes about 14% to industrial production

4% to the country’s GDP 17% to export earnings provides direct employment to over

35 million people

• 13th in services output • provides employment to 27% of the work force • growth rate of 7.5% in 1991–2000 • 57%: largest share in GDP in 2012

• 7% share in GDP • generates US$118 billion • contributes to 25% of exports • 7 Indian firms among top 15 outsourcing

companies in the world

• accounts for 15% of GDP. • estimated to be US$500 billion. • Organised retail supermarkets account for 4% of the market, as of 2008.

• contributes 6.23% of GDP• 8.78% of total employment • presents heritage and cultural tourism along with medical, business and sports tourism.

producing 79 different minerals (excluding fuel and atomic resources) iron ore, coal, manganese, bauxite, zinc, mica, lignite, copper, gold, lead, gypsum, limestone etc.25% of GDP contributes 10% of Industrial sectorLargest producer of Mica, largest producer of bauxite third largest producer of Iron ore, fourth largest producer of coal, Estimated to be US$107 billion in 2010

• branches reached at 72,170 in 2007. • bank deposits reached at US$640 billion in 2009. • Gross domestic saving stood at 32.8% of GDP.• public sector banks hold over 75% of total assets private banks hold 18.2% of assets

foreign banks hold 6.5% of assets

• 4th largest producer of electricity and oil products • 4th largest importer of coal and crude oil • Coal and oil account for 66% of consumption• oil reserves meet 25% of the country's demand• power generation capacity of 233.929

GW• rich in alternative sources of energy

• 3rd largest road network, covering more than 4.3 million kilometers and carrying 60% of freight and 87% of passenger traffic• 4th largest rail network in the world, on track of with 114,500 kilometers • 13 major ports, handling cargo of 850 million tonnes in 2010 • national teledensity rate of 74.15% with 926.53 million telephone subscribers, two-thirds of them in urban areas• Real Estate and Housing

• Literacy rate grown to 74.04% in 2011. • Right to Education, a Fundamental Right• Scientific and technical education• Vocational training• One of the largest reserves of scientific and technological talents in the world.

• Poverty eradication• Economic disparities• Employment generation• Education• Women and child development• Health and nutrition• Infrastructure• Housing and Sanitation

Relevance of Chile

• Chile has large reserves of copper, lithium and other minerals. • It has a large coastline with huge ocean resources and port

facilities. • Its central plateau is excellent for cultivation, exports of fruits and wine.• It has opened up its economy and has become a OECD member. • Its strategic location provides access to Asia Pacific markets. • It lays emphasis on developing relations with Asia-Pacific

region. • Chile is an active member of regional and international organizations.

• Both countries enjoy friendly and cooperative relations, without any irritants. • Both countries share similar perception about development and democracy. • Both have collaborated in UN and international organizations.• High level visits have been exchanged between the two countries.

• Prime Minister Mrs. Indira Gandhi (1968) • President Mr. Shankar Dayal Sharma (1995) • President Mrs. Pratibha Devisingh Patil (April 2008)

• Mr. Jyotiraditya Scindia, Minister of State (C&I) (September 2010) • Mr. Dinsha J. Patel, Minister of State(Mines) (April 2011) • Dr. S.Y. Quraishi, Chief Election Commissioner of India

(July 2011) • Mrs. Meira Kumar, Speaker of the Lok Sabha (January 2012) • Mr. Sachin Pilot, Minister of State (Comm&IT) (April 2012) • Mr. Salman Khurshid, Minister of External Affairs (February 2013) • Dr. Farooq Abdullah, Minister of New and Renewable

Energy (Sept 2013) • Mr. J. D. Seelam, Minister of State (Revenue) (March 2014).

• President Ricardo Lagos Escobar (2005) • President Dr. Michelle Bachelet (March 2009) • Dr. Michelle Bachelet (as the Head of the UN Women) (October 2012)

• Mr. Alfredo Moreno Charme, Minister of Foreign Affairs (August 2012)• Mr. Luis Mayol, Minister of Agriculture (June 2013)

• Agreement for Cooperation in Science &

Technology• MOU on Cooperation in Sports• Air Services Agreement• MOU on Antarctica Cooperation• Renewal of Phytosanitary Agreement

• MOU on Co-operation in the field of New and Renewable Energy• Agreement on Cooperation in Exploration and Utilization of Outer Space for Peaceful Purposes • MOU on Co-operation in the field of Geology and Mineral Resources• Exchange Programme on Cooperation in the field of Education

• Partnership Framework Agreement between M. S. Swaminathan Research Foundation, Chennai and La Fundacion para La Innovacion Agraria • Agreement on Reciprocal Collaboration between NASSCOM and ACTI (Chilean Association of Information Technology Companies) • MOU between Confederation of Indian Industry (CII) and Chile-India Chamber of Commerce (CAMINDIA) • MOU between Avesthagen Limited, Chennai and Uxmal S.A., Chile for promoting R&D in Heath and Cosmetics Sector.

• Growth of economies has led to increased economic and commercial relations. • Indian business companies have been looking at new

markets in Latin America.• Chile has become a platform or gateway for Indian businesses. • Indian investments have been limited in Chile, but trade is on the rise.• Chile is the second largest trading partner of India in Latin America.• In 2012, India was the 10th largest trading partner of Chile.• However, India shares only 2% of Chile’s global trade.

• PHARMEXCIL delegation (March 2012) • Apparels Exports Promotion Council (AEPC)

(March 2012, March 2013 and March 2014) • Export Promotion Council for Handicrafts (EPCH) (November 2013)• Sports Goods Export Promotion Council delegation (SGEPC) (November 2013)• Electronics and Computer Software Export

Promotion Council of India (ESC) (March 2014).

• Chilean exports to India have grown steadily from 2009 to 2012. • Indian exports to Chile have also grown by 36.9%, 22.6% and 40.9% respectively over the same period. • Balance of trade has been in favour of Chile, due to bulk imports of copper ores and copper concentrates.

Year Exports from India (CIF)

Imports by India (FOB)

Total Trade

2009 278.07 908.35 1186.42

2010 380.91 1581.95 1962.86

2011 467.03 1964.99 2432.02

2012 658.45 2636.82 3295.27

2013 693.90 2182.70 2876.60

• Above trade figures do not include India’s exports to the Free Trade Zone of Iquique.• India’s exports amounted to US$39.2 million in 2010, US$42.9 million in 2011, US$60.8 million in 2012, and US$45.4 million in 2013. • India’s service exports too amount to some US$20 million. • 6% of companies working in Zofri Zone in Iquique are of Indian origin.

Item Amount (in US$ million)

Motor Cars (less than 1000 cc) 71.76Motor Cars (exceeding 1500 cc) 56.30 Motor Cars (exceeding 1000 cc) 55.64Transport vehicles for goods 45.59Industrial leather gloves 34.14Medicaments 31.31Motorcycles 14.54Generators 10.59Tractors 9.78Yarn & fibres 8.14

Item Amount (in US$ million)

Copper ores & concentrates 1909.16Iodine 67.14Blister copper 52.95Chemical wood pulp (coniferous) 46.88Petroleum coke 19.91Other coal 16.59Molybdenum concentrate 7.93Chemical wood pulp (unbleached) 6.98Chemical wood pulp (eucalyptus) 6.00Fresh apples 5.66

2012 Amount (in US$ million)

China 30,242.00USA 24,631.10Japan 10,535.60Brazil 9,564.90South Korea 7,091.90Argentina 6,488.00Mexico 3,820.30Germany 3,814.50Peru 3,631.30India (10th) 3,295.50

2013 Amount (in US$ million)

China 32,968.90USA 24,716.80Brazil 9,628.60Japan 9,438.80South Korea 6,852.50Argentina 5,305.10Mexico 3,749.20Peru 3,393.20Spain 3,211.20Ecuador 3,071.70The Netherlands 3,062.10Italy 2,919.90Canada 2,903.80India (14th) 2,876.60

• Re-introduction of 4 slots under ITEC since 2005

• Slots reached at 40 in 2013

ITEC Training Programmes cover diverse subjects starting from accounting to remote sensing.

Yoga, meditation, classical and modern dance and music popular in Chile

A large number of Chileans follow Indian spiritual and philosophical traditions.

In 2013, more than 2,800 visas to Chilean nationals.

• Around 1500 Indians and people of Indian origin are living here. • About 40% of them have obtained Chilean

nationality. • Half of them live in the northern free port of Iquique and the rest are in Santiago and Punta Arenas. Their main occupation is trading. • Number of professionals and expatriates working in sectors such as ICT, BPO and KPO, has been increasing, of late.

Preferential Trade Agreement (PTA): Expansion and discussions leading towards a Comprehensive Economic Partnership Agreement (CEPA). Double Taxation Avoidance Agreement (DTAA): In February 2012, the Indian side conveyed its readiness to sign the Agreement. Convenience of the Chilean side has been sought to sign the DTAA. Bilateral Investment Protection Agreement (BIPA): A draft of the Indian Text of BIPA has been forwarded. Establishment of a Joint Commission: A draft of the Indian Text of the Agreement has been forwarded. Foreign Office Consultations: Last round of FOCs took place in Santiago in October 2010.

Science & TechnologyRenewable EnergyInformation TechnologyMiningAgricultureEducationHealthcare