A Global / Country Study and Report on Argentina

A GLOBAL / COUNTRY STUDY AND REPORT ON ARGENTINA

SUBMITTED TO

Gujarat Technological University

IN PARTIAL FULFILLMENT OF THE REQUIREMENT OF THE AWARD FOR THE DEGREE OF MASTER OF BUSINESS ASMINISTRATION

Under the Faculty Guide: Dr Mehul Shah, Mrs. Falguni Puwar and Ms Sashikala Munka

Submitted by: Enrollment Numbers: 107550592001 to 107550592060 MBA SEMESTER -IV

SARDAR PATEL COLLEGE OF ADMINISTRATION & MANAGEMENT (SPCAM-MBA)

May 2012

1 STUDENTS DECLARATION

We 107550592001 to 107550592060 Students of SARDAR PATEL COLLEGE OF ADMINISTRATION & MANAGEMENT (SPCAM-MBA) Bakrol,, hereby declare that the report for A GLOBAL / COUNTRY STUDY AND REPORT ON ECONOMIC POLICY OF ARGENTINA is a result of our own work and our indebtedness to other work publications, references, if any, have been duly acknowledged.

Place : .. Date :

2 PREFACE

In today’s competitive environment, survival of the fittest is the new motto. That is why it’s necessary that the theoretical knowledge is accompanied by practical knowledge. In an MBA programmer, project study forms an important and an integral part. It helps in bridging the gap between the two main important aspects the theoretical as well practical knowledge.

“Knowledge and Human Power are synonyms”, once said the great philosopher Francis Bacon. However based on the experience within today’s global markets, he would probably say, “The ability to capture, communicate & leverage knowledge to solve problems is human power”. This raises the question how exactly one can best capture, communicate & leverage knowledge, especially within world of system engineering.

With the help of the county report we can get the information about the both country and the position of the both country and make compare both the country so we can say that which country is good and which country are linked with which country.

So the country report is also helpful to show the country’s economy and all the rank like GDP and all that. With help of the country we get the information about the import and export of that country with other country and which things are more import and export form the country.

3 ACKNOWLEDGEMENT

We have the pleasure to present herewith the study work on economic policy of Argentina. Working on this project has been a great learning experience. Numerous individuals helped us a lot with all sort of queries that we had and without the help of them, we would never be able to complete this Country Project. We would like to use this opportunity to thank them. We are extremely indebted to our guides (Dr Mehul Shah, Mrs Falguni solanki puwar and Ms Sashikala Munka) who have taken great pains to provide us guidance to make this project. She is always there to help us a lot by giving her valuable guidelines and suggestions to complete this study from start to end. She is the person who inspired us to explore such an emerging sector of economy. She inspired us to be systematic in our work. She explained that how to go ahead for studying such topic and also explained the technical and other dimensions of the same. We want to thank our Director General- SPEC, Dr. T. D. Tiwari for giving us an opportunity to work on this task. Lastly, we express our gratitude to the faculty of SPCAM and want to thanks GTU for giving us a chance to work on such practical task. We are aware that there are a number of people who have helped us to do this project but we may have failed to make a mention of them. We take this opportunity to express our sincere gratitude to all those for their assistance and support. Thanking All,

4 Executive summary

The economic history of Argentina is one of the most researched, owing to the "Argentine paradox", its unique condition as a country which had achieved advanced development in the early 20th century but experienced a drawback, which inspired a wealth of literature and analyses on the causes of its decline.

Argentina has a market-oriented economy with a lot of natural resources, a well-educated population, an export-oriented agricultural sector and a relatively diversified industrial basic exposure.

The nation's services sector accounts for around 59% of the economy and 72% of employment, manufacturing is 21% of GDP and 13% of employment, and agriculture is 9% of GDP, with 7% of employment; construction, mining, and public utilities divide the rest. Agriculture, including processed goods, provided 54% of export earnings in 2010; however, while industrial manufactures accounted for 35% (energy staples and metal ores were most of the remainder).

As Argentinean society is very status conscious, it is important to address colleagues with the proper title followed by only his or her father’s surname, unless invited to do so otherwise.

Many Argentinean women are well educated and more are entering the workforce. However, women tend to leave the workforce upon having children, but a common Practice with many Argentinean women is to hire a nanny so that they may return to work.

The Economy of India is the 11th largest in the world by nominal GDP and the third largest by purchasing power parity (PPP). The country is one of the G-20 major economies and a member of BRICS. In 2011, the country's per capita income stood at $3,694 IMF, 129th in the world, thus making a lower-middle income economy.

The human development index in the Argentina is 0.86 while in the India it is 0.609.

The GDP per capita in the Argentina is $14700 US while in India it is $3500 US.

The Argentina exports the soybeans and derivatives, petroleum and gas, vehicles, corn, wheat etc.while the India exports petroleum products, textile goods, gems and jewelry, engineering goods, chemicals, leather manufacturers.

Finally study of global country report shows that the life expectancy, human development index, literacy rate, GDP per capita, unemployment rate, political system, exchange rate and export import policy of both the countries and their comparison.

5 INDEX

Sr. No Particular Total page no Semester Part I ECONOMIC OVERVIEW 05-23 III OF THE SELECTED COUNTRY 1 Argentina Demographics Profile 2011 III PART – II INDUSTRY / SECTOR 23-202 IV Banking Sector Economic Sector Transportation Sector Advertising And Media Entrepreneurship Export Import Sector Rural Sector Management Information Retail Sector Logistic Sector Bibilography 203-205 IV

6 Part-I

7 BRIEF INTRODUCTION ABOUT THE ARGENTINA

Argentina has a population of 33 Million with an ethnic composition of 85 percent European descent, primarily Spanish or Italian. Indians, mestizos (people of mixed Indian and Spanish ancestry), and blacks together make up the remaining 15 percent. The Republic of Argentina is a democracy for now, but has had a long history of military power.

Spanish is the official language, although many people speak English, Italian, or other languages. Argentine Spanish is heavily influenced by Italian and is unlike Spanish spoken anywhere in Latin America. Church and state are officially separate, but about 90 percent of the population considers itself Roman Catholic. Jews and Protestants account for 2 percent each. Eighty percent of the population resides in cities or towns of more than 2,000, and over one-third lives in the greater Buenos Aires area.

Comprising almost the entire southern half of South America, Argentina is the world's eighth largest country, covering an area of 2.8 million square km. Argentina possesses some of the world's tallest mountains, expansive deserts, and impressive waterfalls, with the diversity of the land ranging from wild, remote areas in southern Patagonia to the bustling metropolis of Buenos Aires in the north.

POPULATION Argentina: 41,769,726 (July 2011 est.) World Population 7 Billion

MEDIAN AGE

Total:30.5years Male:29.5years Female: 31.6 years (2011 est.

8 POPULATION GROWTH RATE

Argentina: 1.017% (2011 est.) India: 1.41%, Birth rate 17.54 births/1,000 population (2011 est.)

Nationality: - Argentine(s) ETHNIC GROUPS

White (mostly Spanish and Italian) 97%, mestizo (mixed white and Amerindian ancestry), Amerindian, or other non-white groups 3%

RELIGIONS nominally Roman Catholic 92% (less than 20% practicing), Protestant 2%, Jewish 2%, other 4%

LANGUAGES

Spanish (official), Italian, English, German, French

LITERACY

Definition: age 15 and over can read and write.

Total population: 97.2%

Male: 97.2%

Female: 97.2% (2001 census) SCHOOL LIFE EXPECTANCY (PRIMARY TO TERTIARY EDUCATION)

Total: 16 years

Male: 15 years

Female: 17 years (2007)

EDUCATION EXPENDITURES

4.9% of GDP (2007)

MATERNAL MORTALITY RATE

70 deaths/100,000 live births (2008)

9 CHILDREN UNDER THE AGE OF 5 YEARS UNDERWEIGHT

2.3% (2005) Official Name:República Argentina (Spanish)Argentine Republic

Capital (largest city) Buenos Aires 34°20′S, 58°30′W

Official languages Spanish

ARGENTINA GDP GROWTH RATE

The Gross Domestic Product (GDP) in Argentina expanded 2.50 percent in the second quarter of 2011 over the previous quarter. Historically, from 1993 until 2011, Argentina's average quarterly GDP Growth was 0.96 percent reaching an historical high of 3.70 percent in March of 2003 and a record low of -5.70 percent in December of 2001. Argentina is the third largest national economy in Latin America. Argentina has abundant natural resources, a well-educated population, an export-oriented agricultural sector and a relatively diversified industrial base.

10 STANDARD OF LIVING IN ARGENTINA

Standard of Living in Argentina promises a fulfilling life in a beautiful, diverse and culturally rich country. It is the second largest country in South America and the 8th largest in the world. It is divided into four main parts: the Pampas, a flat area of land in the centre; Patagonia; a large area of expanse in the south; the sub tropical North and the Andes mountain range.

ECONOMIC OVERVIEW

Argentina's economy is one of the richest and most diversified in Latin America. The nation has a variety of natural and other resources which have combined to produce an economy that is based on a strong industrial base, an export-oriented agricultural sector, and a growing service sector. The Argentine population is highly educated and skilled, and the country has a variety of natural resources including lead, zinc, copper, iron petroleum, uranium, and rich agricultural areas.

However, after repeated periods of military dictatorship, the nation faced a variety of economic problems when the first sustained period of civilian control of the government began in 1983. By 1989, the nation had an enormous external debt, and inflation had reached a level of 200 percent per month. In response, the government undertook a variety of programs to reform and reinvigorates the economy.

The economy bottomed out that year, with real GDP 18% smaller than in 1998 and almost 60% of Argentines under the poverty line. Real GDP rebounded to grow by an average 8.5% annually over the subsequent six years, taking advantage of previously idled industrial capacity and labor, an audacious debt restructuring and reduced debt burden, excellent international financial conditions, and expansionary monetary and fiscal policies. Inflation also increased, the rapid economic growth of previous years

11 began to slow sharply the following year as government policies held back exports and the world economy fell into recession.

Real economy: Reviving economic activity, the government’s aggressive fiscal stimulus, and an increase in external demand has facilitated Argentinean growth which is forecast to continue over the next year. Forecast calls for GDP to grow 5.0% y/y in 2011. Inflationary pressures are expected to remain high.

External sector: Strong domestic demand and the real appreciation of the peso contributed to strong import growth so far this year. Export growth mainly driven by soya exports was not enough to offset the import boom, resulting on a smaller trade surplus.

Fiscal sector: The government has completed the bond swap with commercial creditors, and although it has not yet attempted to access international capital markets, we anticipate it will do so at some point next year. Fiscal spending is anticipated to remain strong in face to the 2011 elections, which will exacerbate the overheating of the economy.

Monetary sector: The Central Bank has also been adopting expansionary monetary policy to instigate growth. The CB will soon be forced to tighten monetary policy in order to contain inflation.

Growth Rate: The Gross Domestic Product (GDP) in Argentina expanded 2.50 percent in the second quarter of 2011 over the previous quarter. Historically, from 1993 until 2011, Argentina's average quarterly GDP Growth was 0.96 percent reaching an historical high of 3.70 percent in March of 2003 and a record low of -5.70 percent in December of 2001. Argentina is the third largest national economy in Latin America. Argentina has abundant natural resources, a well-educated population, an export-oriented agricultural sector and a relatively diversified industrial base. Domestic instability and global trends, however, contributed to Argentina's decline from its noteworthy position as the world's 10th wealthiest nation per capita in 1913 to the world's 47th wealthiest in 2008.

12 Nominal GDP (2010): 310 bil USD. GDP to grow 5.0% in 2011.

Total Trade/GDP (2010): 37 % Currency: Argentine Peso (ARS) Exchange regime: Managed float

GENERAL INFORMATION: - INDUSTRIAL TRADE AND COMMERCE

Argentina is located in the South and West Hemisphere. Its relative position in South America gives the country a diversity of land and culture. Argentina is grouped into six geographical regions:  Northwest, the fertile valleys concentrate most of the population of the area, and the economic activities.  Gran Chaco, the Chaco offers soil fertility and topography that are favorable for agricultural development, but in combination with aspects that are challenging for farming :  Mesopotamia, maté and tobacco is the most important product for the north of the region, although farmers have increasingly cultivated tea, tung trees (from which tung oil is derived), and citrus crops.  Cuyo, viticulture is one of the main activities of the area. The wine production of the region represents almost 80% of national production, and the wines are highly considered in the world.  Pampas, is located in Central Argentina, a successful agricultural region with crops grown on the Pampas south and west of the Buenos Aires.  Patagonia, principal economic activities have been mining, whaling, livestock (notably sheep throughout) agriculture (wheat and fruit production near the Andes towards the north), and oil.

Argentina has following main industries for trade and commerce,  Food processing,

13  Motor vehicles and Auto parts,  Appliances and electronics,  Petrochemicals and pharmaceuticals,  Steel and Aluminum,  Textiles.

EXPORT GOODS

Soybeans and byproducts, 25.3%; motor vehicles and parts, 11.8%; cereals (mainly maize and wheat), 6.9%; chemicals, 6.7%; natural gas and petroleum, 5.3%; refined fuel, 4.1%; aluminum and steel, 3.9%; fruit and vegetable products, 3.9%; electric machinery, 3.2%; gold, 3.0%; other industrial products, 6.5%; all other (mainly processed

Export Goods

Soybeans and byproducts motor vehicles and parts 19% cereals 25% chemicals natural gas and petroleum 7% refined fuel

3% aluminum and steel 3% 12% fruit and vegetable products 4% electric machinery 4% gold 4% 7% 5% 7% industrial products processed agricultural goods agricultural goods), 19.4%. (2010)

14 Major Trade partners: Brazil, China, Chile, United States and Germany.

IMPORT GOODS Capital goods and parts, 36.0%;intermediate goods, 31.3%; automobiles and parts, 8.7%; refined fuel and lubricants, 7.9%; consumer durables (except auto), 4.9%; freight vehicles, 4.9%; all other (mostly consumer non-durables), 6.3%. (2010)

Import Goods

6% 5% Capital goods and parts 5% intermediate goods 36% 8% automobiles and parts refined fuel and lubricants 9% consumer durables freight vehicles other 31%

15 OVERVIEW OF DIFFERENT SECTORS

1) Agriculture

Argentina is one of the world's major agricultural producers, ranking among the top producers and, in most of the following, exporters of beef, citrus fruit, grapes, honey, maize, sorghum, soybeans, squash, sunflower seeds, wheat, and mate. Agriculture accounted for 9% of GDP in 2010, and around one fifth of all exports (not including processed food and feed, which are another third). Commercial harvests reached 103 million tons in 2010, of which over 54 million were oilseeds (mainly soy and sunflower), and over 46 million were cereals (mainly maize, wheat, and sorghum). Soy and its byproducts, mainly animal feed and vegetable oils, are major export commodities with one fourth of the total; cereals added another 7%. Cattle-raising is also a major industry, though mostly for domestic consumption; beef, leather and dairy were 5% of total exports. Sheep-raising and wool are important in Patagonia, though these activities have declined by half since 1990.

Fruits and vegetables made up 4% of exports: apples and pears in the Río Negro valley; rice, oranges and other citrus in the northwest and Mesopotamia; grapes and strawberries in Cuyo (the west), and berries in the far south. Cotton and tobacco are major crops in the Gran Chaco, sugarcane and Chile peppers in the northwest, and olives and garlic in the west. Yerba mate tea (Misiones), tomatoes (Salta) and peaches (Mendoza) are grown for domestic consumption. Argentina is the world's fifth-largest wine producer, and fine wine production has taken major leaps in quality. A growing export, total viticulture potential is far from having been met. Mendoza is the largest wine region, followed by San Juan.

2) Natural resources

Mining is a growing industry, increasing from 2% of GDP in 1980 to nearly 4% today. The northwest and San Juan Province are the main regions of activity. Coal is mined in Santa Cruz Province. Metals mined include copper, zinc, magnesium, sulfur, tungsten, uranium silver, and particularly, gold, whose production was boosted by recent

16 investments from Barrick Gold in San Juan. Metal ore exports soared from US$ 200 million in 1996 to US$ 1.2 billion in 2004, and to over US$ 3 billion in 2010.

3) Industry

Manufacturing is the largest single sector in the nation's economy (19% of GDP), and is well-integrated into Argentine agriculture, with half the nation's industrial exports being agricultural in nature.[7] Leading sectors by production value are: food processing, chemicals and pharmaceuticals, motor vehicles, farming equipment and auto parts, iron, steel and aluminum, petroleum, as well as industrial machinery and home appliances. These latter include over three million big ticket items, as well as an array of electronics, kitchen appliances and cellular phones, among others. Beverages are another significant sector, and Argentina has long been among the top five wine producing countries in the world, though in 2000, beer overtook wine production, and today leads by nearly two billion liters a year to one.

4) Services

The service sector is the biggest contributor to total GDP, accounting for over 60%. Argentina enjoys a diversified service sector, which includes well-developed social, corporate, financial, insurance, real estate, transport, communication services, and tourism.

The telecommunications sector has been growing at a fast pace, and the economy benefits from widespread access to mobile telephony (more than 75% of the population having access to mobile phones), Internet (more than 16 million people online), and broadband services. Regular telephone services with 9.5 million lines and mail services are robust.

5) Banking

Argentine banking, whose deposits exceeded US$90 billion in November 2010, developed around public sector banks, but is now dominated by the private sector. The private sector banks account for most of the 85 active institutions (4,000 branches) and

17 holds nearly 60% of deposits and loans, and there are as many foreign-owned banks as local ones. The largest bank in Argentina by far, however, has long been the public Banco de la Nación Argentina. Not to be confused with the Central Bank, this institution now accounts for about a fourth of the total deposits and a seventh of its loan portfolio.

During the 1990s, Argentina's financial system was consolidated and strengthened. Deposits grew from less than US$15 billion in 1991 to over US$80 billion in 2000, while outstanding credit (70% of it to the private sector) tripled to nearly US$100 billion.

The banks largely lent US dollars and took deposits in Argentine pesos, and when the peso lost most of its value in early 2002, many borrowers again found themselves hard pressed to keep up. Delinquencies tripled to about 37%.[50] Over a fifth of deposits had been withdrawn by December 2001, when Economy Minister Domingo Cavallo imposed a near freeze on cash withdrawals. The lifting of the restriction a year later was bittersweet, being greeted calmly, if with some umbrage, at not having these funds freed at their full U.S. dollar value. Some fared worse, as owners of the now-defunct Velox Bank defrauded their clients of up to US$800 million.

6) Tourism

The World Economic Forum estimated that, in 2008, tourism generated around US$25 billion in economic turnover, and employed 1.8 million. Tourism from abroad contributed US$ 4.3 billion, having become the third largest source of foreign exchange in 2004. Around 4.6 million foreign visitors arrived in 2007, yielding a positive balance vis-à-vis the number of Argentines traveling abroad.

18 INDIA – ARGENTINA RELATIONS – BUSINESS

Bilateral Trade figures for 2011 (in million dollars)

Argentina Jan-Sep 2011 Jan-Sep 2010 India´s Exports 408 341 India´s Imports 1112 1650

Argentina 2010 2009 India´s Exports 496 342 India´s Imports 2032 876

Year 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 2000 India’s exports 496 342 492 384 303 261 160 136 85 151 143 India’s imports 2032 876 836 859 929 739 567 558 404 446 442

The trade is very much below the potential. During the visit of the President of Argentina to India in October 2009, the two Governments set a target of 3 billion dollars of bilateral trade by 2012.

IMPORTS OF INDIA FROM ARGENTINA (2010) ITEMS IN MILLION US $ SOYBEAN OIL 1843 SUNFLOWER OIL 36 LEATHER 30 AIR PUMPS AND COMPRESSORS 16 SUGAR 15 CORN 13

19 MAJOR ARGENTINE EDIBLE OIL EXPORTERS TO INDIA  CARGIL  MOLINOS RIO DE LA PLATA  VICENTIN  LUIS DREYFUS  AGD  BUNGE

Business Basics Success in the Argentine market depends on everything from understanding government regulations and tariffs and knowing the right labeling and packaging to use in shipments, to working in accordance with local business practices. Getting the basics down can prepare you for market entry and success.

The International Federation of Trade Associations, (FITA), whose members include more than 450,000 trade-related organizations, created this resource, which provides an introduction to the market in Argentina. There are the economy and political structure, business environment and rules for buying, selling and operating a business in Argentina.

Cultural Issues Business success abroad depends not only on the quality of your products and services, but also on the knowledge and respect you show for the customs and manners of business people in your host country. These will help the country to ensure that your business conduct in Argentina makes a positive impression.

Business etiquette Although Argentine business people are time-conscious and are convinced that time is money, a sense of urgency may be viewed with mistrust or as rudeness.

20 It is not uncommon for meetings to be held in an informal environment, such as a bar or restaurant. Many Argentines will not try new things until they have been thoroughly tested and accepted.

Business commitments and promises made in a social context need to be verified in a work environment.

TARIFF BARRIERS On January 1, 1995, Argentina implemented the Mercosur Common Nomenclature (MCN), consistent with the Harmonized System. Most duties are ad valorem (%) assessed on the CIF value. Tariff rates depend on whether the same goods are produced in Argentina and also on the stage of manufacture. Rates range from 2.5 per cent to 20 per cent for virtually all finished goods, with an average of 14 per cent. Certain non-competing capital goods and medicines are admitted duty free. Basic food items and raw materials: 2.5 per cent; most capital goods 14 per cent; consumer goods such as clothing, motor cars and home appliances 20 per cent.

Certain primary and intermediary goods used in the manufacture of exports are exempt from duty if the final product is exported within a year. Importers should obtain approval for duty exemption from the National Institute of Technology and Industry.

NON-TARIFF BARRIERS Although there are almost no prohibitions for imports, certain products require an import license or approval of the appropriate ministry. Some of the products requiring licenses are pharmaceuticals, foodstuffs, insecticides, medical devices, defense materials, etc. Importers must be listed with the National Tax Authority and obtain an importer license number. A quota on motor cars is still in effect. However, the quota has been gradually increasing in recent years. There are also quotas on paper, pulp and footwear. Insurance If the transport risk is borne by the Argentine importer, goods must be insured in Argentina with a licensed insurance company.

21 Taxation The Australian-Argentine Double Taxation Agreement came into effect in 1999, and is for the avoidance of double taxation to income flowing between Australia and Argentina. This Agreement assists Australian companies with subsidiaries or branches in Argentina to be taxed in Argentina and in Australia for the incomes generated by their foreign operations, and vice-versa.

22 Part –II

23 Banking Sector

Introduction of Banking sector

India Argentina Gujarat Reserve Bank of In India is The Central Bank of Gujarat is one of the most Indian Central Bank and Argentina, was established prosperous states in the currently resides in Mumbai on May 28th, 1935 to act as Indian Republic. The as opposed to its original country’s financial agent. banking and financial home of Calcutta. Central Bank is also known institutions of Gujarat are Established in 1935 and like as the “BCRA”. The Bank also well developed and it most central banks its main is run by a board containing provides financial services focus is to maintain a Governor, two Deputy to its customers and it is the monetary stability of Governors, and eight under the regulatory country. directors. The head authority of the government governor is responsible for which include banks, stock Banks in India were managing affairs with third brokers, asset management established in the pre- parties, while the deputy firms and similar function independence era to offer governors are attributed businesses. financial aid to with an assistant position. agriculturists, traders and In case that the head The Gujarat State budding industrialists. governor is temporarily Cooperative Bank (GSCB) unavailable, one of the and district cooperative There are private banks, Deputy Governors can take banks have decided to public sector banks and his/her place. All of the implement core banking foreign banks. The oldest is Governors and directors are solutions (CBS) for the State Bank of India members of the board of providing efficient banking existing in India from 1806 directors, which is services to their customers. and is the largest responsible for assuring The 11 co-operative banks commercial bank today. financial growth for the in Gujarat - GSCB and 10 economy of Argentina. district cooperative banks in Later, between the periods Leadership positions within Ahmedabad, Vadodara, of 1969 to 1980, twenty the bank are appointed Bharuch, Bhavnagar, commercial banks became position rather than an Jamnagar, Kodinar, Rajkot, nationalized. However, elected one, therefore the Sabarkantha, Surendranagar private banking was also Executive branch of the and Valsad — signed the entertained. government has virtual agreement for CBS with. control of the banking The structure of banking in and currency system. Industrial powerhouse of India comprises of western India is Gujarat. scheduled and unscheduled When it was formed the banks. The schedule bank had replaced the The banks of Gujarat commercial banks are those country’s Currency Board, include both government that satisfy the criteria laid which was flawed in many and private sector banks by RBI. ways – predominately in the like Citi Bank, State Bank The Indian money market is fact that credit was given of India, Allahabad Bank,

24 classified into the organized out too freely and the HDFC Bank among others. sector, comprising private, system was being abused. public and foreign owned Many regulations are The primary function of the commercial banks and related to credit, credit banking and financial cooperative banks, together cannot be given out to those institutions in Gujarat is known as scheduled banks, without merit; there must be to act as intermediaries and the unorganized sector, strict agreements in place between the capital and debt which includes individual about the payment markets. The banking and or family owned indigenous timetable. financial institutions bankers or money lenders transfer funds from the and non-banking financial Argentine banking was retail or institutional companies. initially developed through investor to those companies indigenous bankers or public sector banks but now which require funding. The money lenders and non- it is dominated by private presence of banking and banking financial sector banks. The private financial institutions in companies. The sector banks account for Gujarat ensure the proper unorganized sector and most of the 80 active flow of money through the microcredit are still institutions (over 4,000 regional economy. preferred over traditional branches) and holds nearly banks in rural and 60% of deposits and loans, and as many foreign-owned Sub-urban areas are banks as local ones operate especially for non- in the country. Any how the productive purposes like largest bank in Argentina so ceremonies and short far, has long been the public duration loans. sector bank, Banco de la Nación Argentina. This Prime Minister Mrs. Indira institution now accounts for Gandhi Nationalized 14 about one fourth of the total banks in 1969 followed by deposits and one seventh of 6 others in 1980 & made it its loan portfolio. mandatory for banks to provide 40% of their net During the 1990s, credit to priority sectors like Argentina's financial system (1) agriculture (2) small- was consolidated and scale industry (3) retail strengthened. Deposits grew trade (4) small businesses & from less than US$15 etc. to ensure that the banks billion in 1991 to over fulfill their social and US$80 billion in 2000, developmental goals. Since while outstanding credit then, the number of bank (70% of it to the private branches has increased from sector) tripled to nearly 8,260 in 1969 to 72,170 in US$100 billion. 2007 and the population covered by a branch Argentine population has decreased from 63,800 to made more deposits

25 15,000 during the same overseas than in Argentina period. The total bank Banks. The major reason deposits increased from for this is found out to be 5,910 cr. (US $1.18 billion) because of past instability in 1970–71 to 3,830,922 of argentine economy. The cr. (US $764.27 billion) in estimated deposits in 2008–09. Despite an overseas account are increase of rural branches, US$156 billion and from 1,860 or 22 percent of investment exceeded the the total number of domestic monetary base branches in 1969 to 30,590 (M3) by nearly US$20 or 42 percent in 2007, only billion in 2011. 32,270 out of 5 lakhs villages are covered by a scheduled bank

Major banks india Argentina Gujarat  Abu Dabhi  Banco de la Nacion  The Social Coop Bank Commercial Bank Argentina Ltd.,  Andhra bank Bank  Banco Provincia  The Sutex Co operative of Baroda  Santander Río Bank Ltd.  Bank of Maharashtra (formerly Banco Río de  The Vardhman Co-  Central Bank Of la Plata operative Bank Ltd., India  BBVA Banco Francés  Udhana Citizen Co-  Corporation Bank  Banco de Galicia operative Bank Ltd.  Dena bank  Banco Macro  Uma Cooperative Bank  UCO Bank  HSBC Argentin Ltd.,  Union Bank of India  Ciudad  Umreth Urban Co op  UTI Bank  Citibank n.a. Bank Ltd.  Yes Bank  Hipotecario  Una Peoples' Co-op.  Federal Bank  Credicoop Bank Ltd  HSBC Bank  Standard Bank  Unava Nagrik Sahakari  IDBI bank Argentina Bank Ltd.  Indian Overseas  Banco Patagonia  Union Co op Bank Bank  uevo Banco de Santa Limited  IndusInd Bank Fen  United Coop Bank Ltd  ING Vysya Bank  De Cordoba  Unjha Nagarik  Karnataka bank  Comafi Sahakari Bank Ltd  Karur Vysya Bank  Supervielle  Uttarsanda Peoples Coop Bank Ltd;  Punjab National Bank  Nuevo Banco Bisel Vadali Nagrik Sahakari  South Indian Bank  Itau Buen Ayre  Bank Ltd.

26  Standard Chartered  Waghodia Urban Coop Bank Bank Ltd.  State Bank of  Vadnagar Nagrik Saurashtra Sahakari Bank Limited  Allahabad Bank  Vallabh Vidhyanagar  ABN AMRO Bank Commercial Co op  Bank of India BaShree  Canara Bank  Valsad Mahila Nagrik  Citibank Sahakari Bank Ltd.  DBS Bank  Varachha Co-operative  Dhanalakshmi Bank bank Ltd  HDFC bank  Vejalpur Nagarik  ICICI Bank Sahakari bank Ltd.  Indian Bank  Vepar Udhyog Vikas  Kotak Mahindra Bank Sahakari Bank Limited Veraval Mercantile  State bank of India Coop Bank Limited.  State Bank of Patiala Veraval Peoples Coop  Syndicate Bank Bank Limited.  Vijapur Nagrik Sahakari Bank Limited.  Vijay Commercial Coop Bank Limited.  Vijay Coop Bank Limited. Near -  Viramgam Mercantile Coop Bank Limited.

Functions

India Argentina 1. The primary role of RBI Regulating the 1. The primary role of the bank is to have issue of bank notes and preserving reserve an influential hold over the country’s to maintain monetary stability of the exchange rate, especially with the United country especially with Indian Rupees. States Dollar. 2. It operates currency and credit system of 2. To avoid massive inflation or deflation the country. due to the high volume of trade, the bank 3. It Acts as Monetary authority in India. will buy other currencies to convert into 4. It is Regulator and supervisor of Argentinean Dollars. financial system. 3. To release monthly reports with 5. It Manages foreign exchange in country. macroeconomic effects and any signs of 6. It is Issuer of currency in the country harmful inflation. 7. It plays Developmental role in the 4.Central bank is Responsible for the issue economy. of banknotes and coins. Argentinean

27 banknotes are distributed in the typical scale seen in stronger currencies such as the Euro and the USD, despite the slightly depreciated value of the Argentinean Peso. 5. It issues bank notes in the country. 6. It manages the foreign exchange and gold reserves of the country. 7. It decides official interest rate for managing inflation in the country. 8. Acting as the banker to the Government and the banker's bank. 9. It regulates and supervises the banking industry in the economy. 1. Accepting deposits from people. 2. Giving loans. 3. Overdraft 4. Discounting of Bills of Exchange 5. Investment of Funds 6. Agency Functions 7. Miscellaneous Functions

Types of Accounts

India Argentina

Current Account Demat account Savings Account NRE A/c NRO A/C (Ordinary Non-Resident Rupee) FCNR A/c Sb a/c -Savings bank account CC a/c - Cash credit account CA a/c - Current account Salary Account Recurring deposit account Overdue account - OD a/c Fixed deposit account Propreitorship account Partnership account Firm account Company account

28 Branches in Overseas

India Argentina  Punjab National Bank  Citibank  Allahabad Bank  Bank of New York  State Bank of India  HSBC  Bank of India  Bank of Baroda  Indian Bank  Indian Overseas Bank  UCO Bank  Canara Bank  Syndicate Bank  ICICI Bank  AXIS Bank

There are many foreign banks operating there system in Argentina such as Citibank and Bank of New York have several branches, particularly in Buenos Aires & also HSBC is another foreign bank that has a lot of branches over there. It will be easier if anyone wish to use a bank from his/her country of origin to open the account before he/she arrives in the country if his/her own bank is able to take care of that for them. However, they will still require the same amount of documentation in order to open the account. But there is not even single bank belonging India.

Indians in Argentina : 1,200 People of Indian Origin 400 Non Residential Indians.

Foreign banks are entering in Argentina's domestic banking sector in the mid-1990s did not merely follow their clients abroad. They exerted competitive pressure on domestic Argentine banks, especially those focused on mortgage lending or manufacturing. Overhead, profitability, and interest margins were affected least in home banks focused on customers lending, an cluster in which foreign investors showed little interest. Domestic banks with greater consumer lending - an area in which foreign banks have not been heavily involved - had higher net margins and greater before - tax profits. Domestic banks that focused on mortgage lending - an area foreign banks experienced falling net margins and increasing overhead. There were many domestic bank failures in the mid- 1990s, but the banks that failed were not heavily concentrated in the types of lending favored by foreign banks.

29 List of Representative offices of Indian Banks as on November 30, 2007

Name of Banks Name of Centers Allahabad Bank Shenzen (China) Andhra Bank Dubai, UAE Bank of Baroda Guang Zhou (China) Bank of Baroda Malaysia (Kuala Lumpur) Bank of Baroda Thailand (Bangkok) Bank of India Jakarta [Indonesia] Bank of India Ho Chi Minh City [Vietnam] Bank of India China, (Beijing) Canara Bank China (Shanghai) Centurian Bank of Punjab Ltd. Mississauga, Ontario [Canada] HDFC Bank Dubai [UAE] ICICI Bank New York [USA] ICICI Bank Dubai [UAE] ICICI Bank Shanghai [China] ICICI Bank Dhaka (Bangladesh) ICICI Bank Johannesburg (South Africa) ICICI Bank Ltd Bangkok, Thailand ICICI Bank Ltd . Kuala Lumpur, Malaysia ICICI Bank Ltd Jakarta, Indonesia Indian Overseas Bank Guang Zhou (China) Indian Overseas Bank Malaysia (Kuala Lumpur) IndusInd Bank London (UK) IndusInd Bank Ltd Dubai [UAE] Punjab National Bank Almaty [Kazakhstan] Punjab National Bank London [UK] Punjab National Bank Shanghai (China) Punjab National Bank Dubai (UAE) State Bank of India Tehran [Iran] State Bank of India Cairo [Egypt] State Bank of India Washington [USA] State Bank of India Milan [Italy] State Bank of India Manila [Philippines] State Bank of India Luanda (Angola) State Bank of India Turkey, (Istanbul) UCO Bank Malaysia Kuala Lumpur UTI Bank Ltd China (Shanghai) UCO Bank China (Guangzhou) Union Bank of India China Shanghai Bank of Baroda Australia, Sydney

30 Currency

India rupee Argentine peso United state dollars

11.65 1 0.23

Repo rate

India Argentina Gujarat 8.50%(oct-2011) 9%(oct 2009) 8.50%

Polices India Argentina  General or specific permission is  economic situation a monetary policy necessary from the RBI for all foreign can be expansionary or contractionary. exchange transactions.  An expansionary monetary policy aims  Once if foreign money enter after that to expand the money supply in order to they are restricted to go out of India combat recession and unemployment.  Foreign employees, liaison offices,  In contrast the goal of a contractionary project offices and branches of foreign monetary policy is to decrease the companies may open and use a resident money supply, in order to fight bank account in Indian currency inflationary pressures. provided that they have approval by the  The BCRA continues to intervene in the RBI exchange market, usually buying dollars,  Exporters who have net foreign though occasionally selling small exchange earnings of a certain level can amounts . maintain a foreign currency account  Argentina offered a favorable climate for outside of India. The sale of foreign foreign investment and the basic exchange or rupee transfers to non- development of the nation's resident accounts in payment for transportation system and shipping imports may be made by authorized facilities was financed with British dealers. Persons, firms and banks (other capital. than authorized banks) must apply to an  2001–02, the Argentina economy went authorized dealer on form A1 through the worst implosion in its "Application for remittance in foreign history, much of it connected with the currency" to pay for imported goods. In government's effort to attract foreign certain cases, additional questionnaire investment. forms or supporting letters may be  argentina's borrowing costs and export required along with form A1. prices uncompetitive, and then from  he rupee was made fully convertible on 2001, when the dollar tie served a

31 the current account. Rupee means of importing the US recession convertibility on the trade account is into Argentina's already contracting and restricted by the negative list of imports heavily indebted economy. and exports and limited to those  Although Argentina remains a net involved in trade recipient of FDI, Argentinean firms  All export and import transactions are have recently begun making substantial conducted at the market rate of outward investments regionally, in exchange. This applies as well to other Brazil, Paraguay, and Uruguay. transactions, such as inflow of foreign equity for investment, outflows in the case of disinvestment, payments in respect of repatriation of dividends, fees and royalties for technical know- how and for foreign travel. 

Trade barriers

India Argentina  The U.S. goods trade deficit with India was  The U.S. goods trade surplus with $7.1 billion in 2008, an increase of $611 Argentina was $1.7 billion in 2008, an million from $6.5 increase of $348 million from billion in 2007. U.S. goods exports in 2008 $1.4 billion in 2007. U.S. goods exports in were $18.7 billion, up 6.1 percent from the 2008 were $7.5 billion, up 28.7 percent previous year. from the previous Corresponding U.S. imports from India year. Corresponding U.S. imports from were $25.8 billion, up by 7.0 percent. India Argentina were $5.8 billion, up 29.7 is currently the 17th largest export market percent. Argentina is for U.S. goods. currently the 32nd largest export market for  The stock of U.S. foreign direct investment U.S. goods. (FDI) in India was $13.6 billion in 2007  The stock of U.S. foreign direct (latest data investment (FDI) in Argentina was $14.9 available), up from $9.2 billion in 2006. billion in 2007 (latest data U.S. FDI in India is concentrated largely in available), up from $13.9 billion in 2006. the information, U.S. FDI in Argentina is concentrated manufacturing, and banking sectors largely in the nonbank holding companies, mining, and manufacturing sectors.

32 Exports India Argentina  Exporting - 25347 Million USD (January,2012.)  Exporting - 5909 Million USD  Gems and jewelry is the largest exporting (January,2012.) item which accounting for 16 % of  Growth in foreign trade has been one of the exports. main factors driving the Argentine economy.  India is also lead in export of textile goods, engineering goods, chemicals, leather  Mainly export the agricultural type, mostly manufactures and services. processed goods (54% of the total).i.g of  India’s main export partners some main export items soybean products,  European Union cereals, beef, motor vehicles and parts,  United States chemicals and medicine.  United Arab Emirates  Argentine’s main export markets  China  Brazil  European  Union  China  United Sates  Chile

GDP

India Argetina 6.9% (2011-2012) 6%(2011-2012)

33 Imports India Argentina

 Imports - 40108 Million USD (January-  Imports- 5358 Million USD (January – 2012.) 2012)

 India is poor in oil resources and is  Growth in foreign trade, especially trade currently heavily dependent on coal and with MERCOSUR partners, has been one of foreign oil imports for its energy needs. the main factors driving the Argentinean economy.  Other imported products are: machinery, gems, fertilizers and chemicals.  Argentina is a major importer of industrial and computing machinery and parts,  Main import partners industrial supplies, automobiles and other  European Union consumer durables, refined fuels and  Saudi Arabia lubricants.  United States  Main import partner  Brazil,  European Union,  United States  China

Interest Rate

India Argentina

 The benchmark interest rate (reverse repo) in  The benchmark interest rate in Argentina India was last reported at 7.5 percent the was last reported at 9 percent. In official interest rate is the benchmark Argentina, interest rate decisions are taken repurchase rate. by The Central Bank of Argentina (Banco  From 2000 until 2010, India's average Central de la República Argentina, interest rate was 5.82 percent reaching an BCRA). historical high of 14.50 percent in August of 2000 and a record low of 3.25 percent in  From 1995 until 2010, Argentina's average April of 2009 interest rate was 9.77 percent reaching an historical high of 125.00 percent in August of 2002 and a record low of 0.95 percent in April of 2004. This page includes: Argentina Interest Rate chart, historical data and news.

34 Monetary value

India Argentina

 India has the 4th highest amount of  The primary role of the bank is to have an foreign exchange reserves in the world, influential hold over the country’s exchange amounting around $297 Billion. rate, especially with the United States Dollar.   Argentina’s financial infrastructure runs in A lot of regulation in regards to such a way that foreign currency trade is domestic banks include: highly encouraged, perhaps inadvertently; • strengthening of the role of statutory this is mainly because the currency has been auditors slowly increasing in value since the 1980s. • introduction of off-site surveillance  To avoid massive inflation or deflation due • strengthening of the internal defenses to the high volume of trade, the bank will of supervised institutions. buy other currencies to convert into • restructuring of the system of bank Argentinean Dollars. inspections  In fact, inflation has been a very traditional issue, and the bank is required by law to release monthly reports with macroeconomic effects and any signs of harmful inflation.

Currency

India Argentina

 Reserve bank is the official issuer of  Currency used in Argentina is the peso Rupee currency in India. ($).  RBI is also responsible for making  Paper money is available in values of 2, available an adequate supply of good 5,10,20,50 and 100 pesos. quality currency to the public as well as  One peso equals 100 centavos and coins taking in and destroying coins or notes are available in values of 1, 5, 10, 25 and that are not up to standards due to age or 50 centavos and one peso. wear.  The following are in frequent use: 10, 20, 50, 100, 500, 1000 rupee bank notes and 5, 10, 20, 25, 50 Paisa coins in a subdivision of 100.

35 Income Tax India Argentina Personal tax rates in India are progressive up to In Argentina, 2 types of taxes are currently 30%, plus the applicable cess of 3 % (2% for levied on individual (calendar year): Primary Education Cess and 1% for Secondary 1) Personal Income Tax Education Cess). Year (2012-2013) 2) Personal Assets Tax (Wealth Tax)

For resident men below the age of 65 yrs: 1) Argentina Income Tax Rates

Income Tax rates Argentina residents are liable to a progressive Up to 160,000 Nil tax on their worldwide income ranging between 160,001 - 300,000 10% 9% - 35%. There are 7 income tax scales: 300,001 - 500,000 Rs 14,000 plus 20% Above 500,000 Rs 54,000 plus 30% Taxable Income (ARS) / Tax Rate %

For resident women below the age of 65 years: ARS 0 to 10,000 9% ARS 10,001 to 20,000 14% Income Tax rates ARS 20,001 to 30,000 19% Up to 190,000 Nil ARS 30,001 to 60,000 23% 190,001 - 300,000 10% ARS 60,001 to 90,000 27% 300,001 - 500,000 Rs 11,000 plus 20% ARS 90,001 to 120,000 31% Above 500,000 Rs 51,000 plus 30% ARS 120,001 and above 35%

For senior citizens (men or women who are 65 Non-Taxable income is ARS 10,800 / year years or more at any time during the Previous Year) 2)Argentina Personal Assets Tax (Wealth Tax) Argentina Personal Assets Tax (Wealth Tax) is Income Tax rates levied on: Up to 240,000 Nil - all assets located in Argentina or in foreign 240,001 - 300,000 10% countries that belong to individuals resident in 300,001 - 500,000 Rs 6,000 plus 20% Argentina Above 500,000 Rs 46,000 plus 30% - all assets located in Argentina that belong to individuals resident in foreign countries India company tax is levied as follows: - shares issued by Argentine companies. In this case, the company pays the tax on behalf of the Domestic companies 33.99% shareholders. Foreign companies 42.23% Argentina. The standard VAT rate in India is 12.5%, with lower rates of 4% and 1%, except in some states The standard rate of Value Added Tax in where certain higher rates have been prescribed. Argentina is 21%. A refund of input tax is available for exporters. Argentina corporate income tax rate is 35%.

36 Foreign Direct Investment

India Argentina  During 2000–10, the country attracted  Foreign direct investment in Argentina is $178 billion as FDI. divided nearly evenly between manufacturing  India's recently liberalized FDI policy (2005) (36%), natural resources (34%), and services allows up to a 100% FDI stake in ventures. (30%). The chemical and plastics sector  In March 2005, the government amended the (10%) and the automotive sector (6%) lead rules to allow 100% FDI in the construction foreign investment in local manufacturing; sector, including built-up infrastructure and oil and gas (22%) and mining (5%), in construction development projects natural resources; telecommunications (6%), comprising housing, commercial premises, finance (5%), and retail trade (4%), in hospitals, educational institutions, services. recreational facilities, and city- and regional- level infrastructure.  The total FDI equity inflow into India in 2008–09 stood at 122,919 crore (US$24.52 billion), a growth of 25% in rupee terms over the previous period.

(NRI Investment)

37 Few similar problems

India Argentina  have stubborn fiscal deficit.  have stubborn fiscal deficit.  have problems getting the tax/GDP  have problems getting the tax/GDP ratio beyond 15-20%. ratio beyond 15-20%.

 Fiscal problems of (provincial) state  Fiscal problems of (provincial) state governments. governments.  have problems with a framework  Both countries have problems with of labor law that stifles the labor a framework of labor law that market. stifles the labor market.  low trade-GDP ratio.  have a low trade-GDP ratio.

38 Economic Sector of Argentina

Introduction Of Economy Of Argentina:

Argentina has a market-oriented economy with a lot of natural resources, a well- educated population, an export-oriented agricultural sector and a relatively diversified industrial basic exposure.

The nation's services sector accounts for around 59% of the economy and 72% of employment, manufacturing is 21% of GDP and 13% of employment, and agriculture is 9% of GDP, with 7% of employment; construction, mining, and public utilities divide the rest. Agriculture, including processed goods, provided 54% of export earnings in 2010, however, while industrial manufactures accounted for 35% (energy staples and metal ores were most of the remainder).

High inflation has been a drawback of the Argentine economy for decades. Officially spreading around 9% since 2006, inflation has been privately estimated at over 20%,becoming a contentious issue again. The urban income poverty rate has dropped to 18% as of mid-2008, a third of the peak level observed in 2002, though still above the level prior to 1976.Income distribution, having improved since 2002, is still considerably unequal.

Argentina ranks 105th out of 178 countries in the Transparency International's Corruption Perceptions Index for 2010. Reported problems include both government and private- sector corruption, the latter of which include money laundering, trafficking in narcotics and contraband, and tax evasion. The Kirchner administration with a record public-works program, new tax cuts and subsidies,and the transfer of private pensions to the social security system. Private pension plans, which required growing subsidies to cover, were nationalized to shed a budgetary drain as well as to finance high government spending and debt obligations.

Argentina has, after its neighbour river Chile, the second-highest Human Development Index, and the highest GDP per capita in purchasing power terms in Latin America. Argentina is one of the G-20 major economies, with the world's 27th largest nominal GDP, and the 22nd largest by purchasing power. The country is classified as upper- middle income or a secondary emerging market by the World Bank.

39 ECONOMIC HISTORY OF ARGENTINA:

Argentina possesses definite comparative advantages in agriculture, as the country is involved with a vast amount of highly fertile land. Before the arrival of Spanish explorers, present-day Argentina was populated by Indigenous peoples. Those natives were still hunter-gatherer societies, so there was no economic system in their societies. Between 1860 and 1930, exploitation of the rich land of the pampas strongly pushed economic growth. During the first 3 decades of the 20th century, Argentina outgrew Canada and Australia in population, total income, and per capita income. By 1913, Argentina was the world's 10th wealthiest nation per capita.

Beginning in the 1930s, however, the Argentine economy diminished notably.The single most important factor in this decline has been political instability since 1930, when a military junta took power, ending seven decades of civilian constitutional government. In macroeconomic terms, Argentina was one of the most stable and conservative countries until the Great Depression, after which it tuned into one of the most unstable. Successive governments from the 1930s to the 1970s pursued a strategy of import substitution to achieve industrial self-sufficiency, but the government's encouragement of industrial growth diverted investment from agricultural production, which fell dramatically.

The era of import trades and its use ended in 1976, but the same time growing government spending, large wage raises and inefficient production created a chronic inflation that rose through the 1980s.The measures enacted in 1976 also produced a huge foreign debt by the late 1980s, which became equivalent to three-fourths of the GNP.

In the early 1990s the government reined in inflation by making the peso equal in value to the U.S. dollar, and privatized numerous state-run companies, using part of the proceeds to reduce the national debt. However, a sustained recession at the turn of the 21st century culminated in a default, and the government again devalued the peso.there was considerable GNP growth, renewed foreign investment, and a significant drop in the unemployment rate.

40 Structure & Business Activity of Argentina:

*Working practices in Argentina:

 Business hours are normally from 9am - 7pm Monday to Friday. It is not uncommon however for businesses to remain open until 9 - 10 pm. Business lunch hours vary but are normally between 1 - 3pm. Business dinner events usually begin late evening around 10pm.

 Argentina people have a much more flexible attitude towards time. Therefore, do not be surprised if business meetings or social events begin late.

*Structure and hierarchy in companies of argentina:  Business organizations in Argentina tend to be systematic. Decisions and ideas are generated at the top. Status is important in Argentinian society and respect should be given to supervisors and work colleagues.

 As Argentinian society is very status conscious, it is important to address colleagues with the proper title followed by only his or her father’s surname, unless invited to do so otherwise.

 Many Argentinian women are well educated and more are entering the workforce. However, women tend to leave the workforce upon having children, but a common practice with many Argentinian women is to hire a nanny so that they may return to work.

*Working relationships in Argentina:

 Business relationships in Argentina are based on trust and familiarity. Personal contacts and networks are important in making business deals. developing friendships will improve your success in the business world in Argentina.

Argentinians prefer to mix their private and professional lives together. They may be hesitant to trust people at first so it is important to take the time to develop interpersonal relationships with your Argentinian counterparts before conducting business.

41 *Business practices:

 Business in Argentina is conducted entirely in Spanish. Most Argentinians do have a working knowledge of English, but it is wise, however, to bring an interpreter to meetings if you do not have a proficient knowledge of Spanish.

 Negotiations can be quite continued as Argentinians are very detail-oriented and want to examine everything thoroughly before reaching an agreement. Although generally very informal, they rely on a clear, work-related structure and value rules and procedures.

 Initial introductions in Argentinian business are informal. A handshake while maintaining strong eye contact is the normal greeting and should also be exchanged upon leaving. Once a relationship has developed into friendship, a kiss on the cheek or the handshake.

Economy of India

After the independence Indian economy (before and a little after 1947) was inspired by the Soviet model of economic development, with a large public sector, high import duties combined with interventionist policies, leading to massive inefficiencies and widespread corruption. However, later on India adopted free market principles and liberalized its economy to international trade under the guidance of Manmohan Singh, who then was the Finance Minister of India under the leadership of P.V.Narasimha Rao the then Prime Minister. Following these strong economic reforms, the country's economic growth progressed at a rapid pace with very high rates of growth and large increases in the incomes of people.

India recorded the highest growth rates in the mid-2000s, and is one of the fastest- growing economies in the world. The growth was led primarily due to a huge increase in the size of the middle class consumer, a large labour force and considerable foreign investments. India is the nineteenth largest exporter and tenth largest importer in the world. Economic growth rates are projected at around 7% for the 2011-12 fiscal year.

42 ECONOMIC SECTORS OF INDIA:

(a)Industry and services

Industry accounts for 28% of the GDP and employ 14% of the total workforce. In absolute terms, India is 12th in the world in terms of nominal factory output. The Indian industrial sector underwent significant changes as a result of the economic reforms of 1991, which removed import restrictions, brought in foreign competition, led to privatisation of certain public sector industries, liberalised the FDI regime, improved infrastructure and led to an expansion in the production of fast moving consumer goods. Post-liberalisation, the Indian private sector was faced with increasing domestic as well as foreign competition, including the threat of cheaper Chinese imports. It has since handled the change by squeezing costs, revamping management, and relying on cheap labour and new technology. However, this has also reduced employment generation even by smaller manufacturers who earlier relied on relatively labour-intensive processes.

Textile manufacturing is the second largest source of employment after agriculture and accounts for 20% of manufacturing output, providing employment to over 20 million people. As stated in late January, by the then Minister of Textiles, India, Shri Shankersinh Vaghela, the transformation of the textile industry from a degrading to rapidly developing industry, has become the biggest achievement of the central government. After freeing the industry in 2004–2005 from a number of limitations, primarily financial, the government gave the green light to the flow of massive investment – both domestic and foreign. During the period from 2004 to 2008, total investment amounted to 27 billion dollars. By 2012, still convinced of the government, this figure will reach 38 billion as expected; these investments in 2012 will create an additional sector of more than 17 million jobs. But demand for Indian textiles in world markets continues to fall. According to Union Minister for Commerce and Industries Kamal Nath, only during 2008–2009 fiscal year (which ends 31 March) textile and clothing industry will be forced to cut about 800 thousand new jobs – nearly half of the rate of two million, which will have to go all the export-oriented sectors of Indian economy to soften the impact of the global crisis. Ludhiana produces 90% of woollens in India and is known as the Manchester of India. Tirupur has gained universal recognition as the leading source of hosiery, knitted garments, casual wear and sportswear.

India is 13th in services output. The services sector provides employment to 23% of the work force and is growing quickly, with a growth rate of 7.5% in 1991–2000, up from 4.5% in 1951–80. It has the largest share in the GDP, accounting for 55% in 2007, up from 15% in 1950. Information technology and business process outsourcing are among the fastest growing sectors, having a cumulative growth rate of revenue 33.6% between 1997–98 and 2002–03 and contributing to 25% of the country's total exports in 2007–08. The growth in the IT sector is attributed to increased specialisation, and an availability of a large pool of low cost, highly skilled, educated and fluent English-speaking workers, on the supply side, matched on the demand side by increased demand from foreign consumers interested in India's service exports, or those looking to outsource their

43 operations. The share of the Indian IT industry in the country's GDP increased from 4.8 % in 2005–06 to 7% in 2008.[70] In 2009, seven Indian firms were listed among the top 15 technology outsourcing companies in the world.

Mining forms an important segment of the Indian economy, with the country producing 79 different minerals (excluding fuel and atomic resources) in 2009–10, including iron ore, manganese, mica, bauxite, chromite, limestone, asbestos, fluorite, gypsum, ochre, phosphorite and silica sand. Organised retail supermarkets accounts for 24% of the market as of 2008. Regulations prevent most foreign investment in retailing. Moreover, over thirty regulations such as "signboard licences" and "anti-hoarding measures" may have to be complied before a store can open doors. There are taxes for moving goods from state to state, and even within states. Tourism in India is relatively undeveloped, but growing at double digits. Some hospitals woo medical tourism.

(b)Agriculture

India ranks second worldwide in farming. Agriculture and allied sectors like forestry, logging and fishing accounted for 15.7% of the GDP in 2009–10, employed 52.1% of the total workforce, and despite a steady decline of its share in the GDP, is still the largest economic sector and a significant piece of the overall socio-economic development of India.. Yields per unit area of all crops have grown since 1950, due to the special emphasis placed on agriculture in the five-year plans and steady improvements in irrigation, technology, application of modern agricultural practices and provision of agricultural credit and subsidies since the Green Revolution in India. However, international comparisons reveal the average yield in India is generally 30% to 50% of the highest average yield in the world. Indian states Uttar Pradesh, Punjab, Haryana, Madhya Pradesh, Andhra Pradesh, Bihar, West Bengal and Maharashtra are key agricultural contributing states of India.

India receives an average annual rainfall of 1,208 millimetres (47.6 in) and a total annual precipitation of 4000 billion cubic metres, with the total utilisable water resources, including surface and groundwater, amounting to 1123 billion cubic metres. 546,820 square kilometres (211,130 sq mi) of the land area, or about 39% of the total cultivated area, is irrigated. India's inland water resources including rivers, canals, ponds and lakes and marine resources comprising the east and west coasts of the Indian ocean and other gulfs and bays provide employment to nearly six million people in the fisheries sector. In 2008, India had the world's third largest fishing industry.

India is the largest producer in the world of milk, jute and pulses, and also has the world's second largest cattle population with 175 million animals in 2008. It is the second largest producer of rice, wheat, sugarcane, cotton and groundnuts, as well as the second largest fruit and vegetable producer, accounting for 10.9% and 8.6% of the world fruit and vegetable production respectively. India is also the second largest producer and the largest consumer of silk in the world, producing 77,000 million tons in 2005.

44 (c)Banking and finance:

The Indian money market is classified into the organised sector, comprising private, public and foreign owned commercial banks and cooperative banks, together known as scheduled banks, and the unorganised sector, which includes individual or family owned indigenous bankers or money lenders and non-banking financial companies. The unorganised sector and microcredit are still preferred over traditional banks in rural and sub-urban areas, especially for non-productive purposes, like ceremonies and short duration loans.

Prime Minister Indira Gandhi nationalised 14 banks in 1969, followed by six others in 1980, and made it mandatory for banks to provide 40% of their net credit to priority sectors like agriculture, small-scale industry, retail trade, small businesses, etc. to ensure that the banks fulfill their social and developmental goals. Since then, the number of bank branches has increased from 8,260 in 1969 to 72,170 in 2007 and the population covered by a branch decreased from 63,800 to 15,000 during the same period. The total bank deposits increased from 5,910 crore (US$1.18 billion) in 1970–71 to 3,830,922 crore (US$764.27 billion) in 2008–09. Despite an increase of rural branches, from 1,860 or 22% of the total number of branches in 1969 to 30,590 or 42% in 2007, only 32,270 out of 500,000 villages are covered by a scheduled bank.

India's gross domestic saving in 2006–07 as a percentage of GDP stood at a high 32.7%.More than half of personal savings are invested in physical assets such as land, houses, cattle, and gold. The public sector banks hold over 75% of total assets of the banking industry, with the private and foreign banks holding 18.2% and 6.5% respectively. Since liberalisation, the government has approved significant banking reforms. While some of these relate to nationalised banks, like encouraging mergers, reducing government interference and increasing profitability and competitiveness, other reforms have opened up the banking and insurance sectors to private and foreign players.

(d)Energy and power:

As of 2009, India is the fourth largest producer of electricity and oil products and the fourth largest importer of coal and crude-oil in the world.[91] Coal and oil together account for 66 % of the energy consumption of India.[92]

India's oil reserves meet 25% of the country's domestic oil demand. As of 2009, India's total proven oil reserves stood at 775 million metric tonnes while gas reserves stood at 1074 billion cubic metres. Oil and natural gas fields are located offshore at Mumbai High, Krishna Godavari Basin and the Cauvery Delta, and onshore mainly in the states of Assam, Gujarat and Rajasthan. India is the fourth largest consumer of oil in the world and imported $82.1 billion worth of oil in the first three quarters of 2010, which had an adverse effect on its current account deficit. The petroleum industry in India mostly consists of public sector companies such as Oil and Natural Gas Corporation (ONGC),

45 Hindustan Petroleum Corporation Limited (HPCL) and Indian Oil Corporation Limited (IOCL). There are some major private Indian companies in the oil sector such as Reliance Industries Limited (RIL) which operates the world's largest oil refining complex.

As of December 2011, India had an installed power generation capacity of 185.5 Giga Watts(GW), of which thermal power contributed 65.87%, hydroelectricity 20.75%, other sources of renewable energy 10.80%, and nuclear power 2.56%.. India meets most of its domestic energy demand through its 106 billion tonnes of coal reserves. India is also rich in certain renewable sources of energy with significant future potential such as solar, wind and biofuels (jatropha, sugarcane). India's huge thorium reserves – about 25% of world's reserves – are expected to fuel the country's ambitious nuclear energy program in the long-run. India's dwindling uranium reserves stagnated the growth of nuclear energy in the country for many years. However, the Indo-US nuclear deal has paved the way for India to import uranium from other countries.

(e)Infrastructure:

India has the world's third largest road network, covering more than 4.3 million kilometers and carrying 60% of freight and 87% of passenger traffic. Indian Railways is the fourth largest rail network in the world, with a track length of 114,500 kilometers .India has 13 major ports, handling a cargo volume of 850 million tonnes in 2010.

India has a national rate of 74.15% with 926.53 million telephone subscribers, two-thirds of them in urban areas, but Internet use is rare, with around 13.3 million broadband lines in India in December 2011. However, this is growing and is expected to boom following the expansion of 3G and wimax services.

46 (6)Comparision of Argentina & India:

Country

Argentina India

Leader

President: Cristina Fernandez President: Pratibha Patil

Population

41,769,726 1,189,172,906

Life Expectancy

76.950 years 66.800 years

Capital City

Buenos Aires New Delhi

Largest city

Buenos Aires (population: Mumbai (population: 13,076,300) 12,691,800)

Human Development Index

0.86 0.609

GDP per capita

$14,700 US $3,500 US

Literacy Rate

97.2% 61%

47 Corruption Perception Index

2.9 3.4

Percentage of Women in Parliament

39.8% 9.2%

Wealthiest Citizens

Gregorio Perez Companc & Mukesh Ambani ($19.5bn US) family ($1.8bn US)

Unemployment Rate

7.900% 10.800%

Death Penalty

Abolished Legal

Political System republic federal republic

Independence date

9 July 1816 (from Spain) 15 August 1947 (from UK)

Religions nominally Roman Catholic Hindu 80.5%, Muslim 13.4%, 92% (less than 20% Christian 2.3%, Sikh 1.9%, other practicing), Protestant 2%, 1.8%, unspecified 0.1% (2001 Jewish 2%, other 4% census)

Languages

Spanish (official), Italian, Hindi 41%, Bengali 8.1%, English, German, French Telugu 7.2%, Marathi 7%, Tamil 5.9%, Urdu 5%, Gujarati 4.5%, Kannada 3.7%, Malayalam 3.2%, Oriya 3.2%, Punjabi 2.8%, Assamese 1.3%, Maithili 1.2%, other 5.9%

48 Exports soybeans and derivatives, petroleum products, textile petroleum and gas, vehicles, goods, gems and jewelry, corn, wheat engineering goods, chemicals, leather manufactures

External Debt

$128,000,000,000 $ $238,000,000,000 US

Exchange Rate

Argentine pesos (ARS) per Indian rupees (INR) per US US dollar - 3.1636 (2008 dollar - 43.319 (2008 est.), est.), 3.1105 (2007), 3.0543 41.487 (2007), 45.3 (2006), (2006), 2.9037 (2005), 44.101 (2005), 45.317 (2004) 2.9233 (2004)

Military Budget as percentage of GDP

0.800% 2.500%

Beijing Olympics Medal Count

6 3

Location

Southern South America, Southern Asia, bordering the bordering the South Atlantic Arabian Sea and the Bay of Ocean, between Chile and Bengal, between Burma and Uruguay Pakistan

Area

2,780,400 km sq 3,287,263 km sq

Coastline

4,989 km 7,000 km

49 (7) India and Argentina export import:

Argentina 2010 2009 India´s Exports 496 342 India´s Imports 2032 876 (source: http://www.indembarg.org.ar/en/gbvar_guide.htm)

(USD in million)

2011 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 2000 India’s 560 496 342 492 384 303 261 160 136 85 151 143 exports India’s 1214 2032 876 836 859 929 739 567 558 404 446 442 imports (source: http://www.indembarg.org.ar/en/gbvar_guide.htm)

Exports from India to Argentina (2011)

Items In million US $ Organic chemicals 155 Vehicles and autoparts 68 Lubricants 38 Machinery 36 Sound and image divices 35 Synthetic Fibers 24 Garments 21 Plastic products 19 Dyes 15 Iron and steel 14

(source: http://www.indembarg.org.ar/en/gbvar_guide.htm)

Imports of India from Argentina (2011)

Items In million US $

50 Soybean oil 1070 Sunflower oil 42 Leather 32 Wool 9 Ferroalloys 9 Valves 7 Air pumps and compressors 6 Cosmetics 5 Precision instruments 4 Corn 4 (source: http://www.indembarg.org.ar/en/gbvar_guide.htm)

Major Argentine edible oil exporters to India

 Cargil  Molinos Rio de la Plata  Vicentin  Luis Dreyfus  AGD  Bunge

(8) Export Import policies of Argentina:

(a)Exports:

Indian exporters are invited to explore the potential for exports to Argentina. There is scope for increasing the volume of items already exported as well as for new items. These are: vehicles, two-wheelers, auto parts, machinery including for sugar industry and railways, solar and wind energy, chemicals, inputs for agriculture, agrochemicals, bulk drugs, dyestuff, textiles and handicrafts. Indian brands have started making their mark in Argentina.

Mahindra Tractors and Royal Enfield Motorcycles were launched in Argentine market in March 2009. Bajaj motor cycles are sold in Argentina.

(b)Imports:

India’s imports of soy and sunflower oil as well as copper are expected to increase steadily in the years to come. Wheat would be an import item as and when there is

51 shortfall in Indian production. Argentine companies have been supplying CNG kits to India, wine, wool, leather, olives and dried vegetables and fruits.

Argentina has the potential for contributing to India’s food security in future. At present, Argentina is a major source of edible oils for India. According to the Solvent Extractors Association of India (SEA), the requirement of edible oils in 2006 was 12 million tons of which 7 million were produced domestically and 5 million was imported. Imports shot up to over 7 million tons in 2009. In 2010, the requirement of edible oils is expected to increase to 15 million tons and more in the years to come. But the production of oilseeds in India cannot match the demand and India will continue to be a long term importer of edible oils. In this respect, India can count on Argentina as a reliable source. Argentina is the world’s largest exporter of soya oil and sunflower oil. Argentina has the third largest capacity for edible oil processing after China and USA.

India has imported wheat from Argentina from time to time, including purchase of 44 million dollars in 2008. Besides edible oil and wheat, Argentina can be a new source of pulses. India imports about 3 million tons of pulses from countries such as Myanmar, Australia, Turkey and Canada. Although. India does not import any pulses from Argentina at present, the Argentine soil is suitable for cultivation of pulses of interest to India. The Argentine agribusiness companies are willing to grow these, attracted by the large and growing market in India.

In India, the subsistence farmers with their average land holding of just a few acres are unable to invest and increase productivity significantly. But the Argentine farmers who hold thousands of hectares of land do farming commercially and professionally and are able to invest in innovation and productivity.

Argentina can also contribute, to a small extent, to India´s energy security. Argentine oil resources are under-explored. They have 2 billion barrels of discovered reserves and are currently producing 800,000 bpd. They are just starting off-shore exploration and the land area has not been fully explored. Indian oil companies in public and private sector could make entry here. Reliance has formed a joint venture with an Argentine private company Pluspetrol (along with an Australian company Woodside) and their consortium has won concessions in Peru and Bolivia for oil and gas exploration. They are also exploring opportunities in Argentina and in other countries of the region. ONGC Videsh Ltd. (OVL) has signed an MOU with their Argentine counterpart ENARSA and jointly seek opportunities in Argentina and in this region.

52 Argentina is the third largest exporter of bio-diesel in the world. They exported over 1.5 million tons in 2011 and are increasing production capacity to 3.5 million tons by 2012. India can also consider imports from Argentina.

There are thousands of hectares of land available in the warmer northern parts of Argentina where jatropha can be grown and used to produce bio-diesel. The Indian companies can also invest in commercial forestry in Argentina to take back to India wood and paper pulps which are imported by India regularly.

(c)Argentine Companies in India:

*Techint, the 18 billion dollar Argentine Group (steel, energy, engineering) has an office in Thane employing 200 Indian engineers for their projects in Middle East, Asia and Europe.

*IMPSA, the Argentine engineering company, specializing in hydroelectric projects, has opened an office in Gurgaon. They are exploring opportunities for projects as well as supply of power generation equipments such as turbines. They have a manufacturing unit in Malaysia.

*Biosidus, an Argentine pharma company, has a proposal to set up a plant in India for production of biotech pharmaceuticals for Indian and Asian markets. They are already exporting over 3 million dollars a year to India.

*Bago, the leading Argentine pharma company has an office in Hyderabad for sourcing of bulk drugs run by Vikram Beri. They have a joint venture opeartion with Ranbaxy to market their products in Thailand. Some Argentine companies have shown interest in investments and joint ventures in India in food processing and autoparts.

*Entertainment business:

Illusion Studios of Buenos Aires in collaboration with Toonz Animation Ltd of Trivandrum produced a cartoon film ¨Gaturro¨ which was a box office hit in Argentina in 2010. The Argentine musician, Gustavo Santaolalla composed music for the Amir Khan film ¨Dhobi Ghat¨ which was released in January 2011. The Director of the film Kiran Rao is visiting Argentina in March 2011 for the Argentine screenings. An Argentine director Pablo Cesar is working on a coproduction film ¨Thinking of Him¨ based on the romantic story of Tagore´s encounter with Victoria O´Campo in Buenos Aires. He is looking for an Indian producer.

(d)Indian companies in Argentina:

1) TCS 2) Cognizant

53 3) Action Line (Aegis Group) 4) CRISIL / IREVNA 5) Copal Partners 6) CELLENT 7) GLOBAL SOURCING

(9)Export Import policies of India:

IMPORT POLICIES:

The following items can be freely imported into the country by travellers from Bolivia, Brazil, Chile, Paraguay or Uruguay or by residents returning to Argentina after more than a year away. • 1 litre of alcoholic beverages; • 200 cigarettes and • 25 cigars; • 2 k food products Travellers entering Argentina from other countries than the ones mentioned above can import the following. • 2 litres of alcoholic beverages; • 400 cigarettes and 50 cigars; • 5 kgs food.

Prohibited: • Illegal drugs • Weapons and ammunition – permission required • Explosives • Knives and deadly weapons • Meat or meat products from any animal species i.e. sausages, cold cuts, ham • Milk and dairy products • Fresh fruit and vegetables • Trees, plants and plant products • New Computers • Colour and new TV’s • Soil • Counterfeit money and goods • Pornographic material

54 Restricted • Firearms and ammunition being imported into the country will require authorization by the Registro Nacional de Armas (RENAR) (National Firearms Bureau). The application will need to be supported by the appropriate firearms certificate of the country of residence and will need to be declared at the customs department. An additional ARS 200 fee per firearm will likely have to be paid at this point. • Dogs and cats require an official veterinary health and vaccination certificate to be presented by the owner on arrival. However, pets less than three months of age do not require a rabies vaccination certificate. • Mobile phones being imported into the country will need permission from the customs department before being granted entry

Export Policies:

55 TRANSPORTATION SECTOR OF ARGENTINA

MODES OF TRANSPORTATION IN ARGENTINA

The following are the various modes at Argentina:

 Road Transport

 Bus

 Taxi

 Commuter rail

 Metro

 Tram

 Rail Transport

 Long-distance passenger service

 High-speed rail

 Freight service

 Tourist railways

3) Air Transport

4) Merchant Marine

56  Road Transport:

Since Argentina is almost 4,000 kilometres long and more than 1,000 km wide, long distance transportation is of great importance. Several toll expressways spread out from Buenos Aires, serving nearly half the nation's population. The majority of Argentine roads, however, are two-lane national and provincial routes and, though they are spread throughout the country, less than a third of Argentina's 230,000 km (145,000 mi) of roads

are currently paved.

Expressways have been recently doubled in length (to nearly) and now link most (though not all) important cities. The most important of these is probably the Panamerican National Route 9 Buenos Aires–Rosario–Córdoba freeway. The longest continuous highways are National Route 40, a 5000-km stretch along the Andes range and the 3000- km sea-side trunk road National Route 3, running from Buenos Aires to Ushuaia.

57 Statistics:

 Total: 230,137 km (2007) - country comparison to the world: 23

 Paved: 72,047 km (including 1,575 km of expressways)

 Unpaved: 158,090 km

Total 230,137 km (2007) country comparison to the world 23

Paved 72,047 km (including 1,575 km of expressways)

Unpaved 158,090 km

 Bus:

The Colectivo (urban bus) cover the cities with numerous lines. Fares might be fixed for the whole city, or they might depend on the destination. Colectivos often cross municipal borders into the corresponding metropolitan areas. In some cases there are diferenciales (special services) which are faster, air-conditioned versions, and notably more expensive. Bus lines in a given city might be run by different private companies and/or by the municipal state, and they might be painted in different colours for easier identification. The quality of the service varies widely according to the city, line, and time of the day.

58  Taxi:

Taxis are very common and relatively accessible price-wise. They have different colours and fares in different cities, though a highly contrasted black-and-yellow design is common to the largest conurbations. Call-taxi companies (radio-taxis) are very common and safe; illegal taxis are common in big cities, and robberies have been reported in those cases. The remisse is another form of hired transport: they are very much like call-taxis, but do not share a common design, and trip fares are agreed beforehand, although there are often fixed prices for common destinations.

 Commuter rail:

Suburban trains connect Buenos Aires city with the Greater Buenos Aires area, (see: Buenos Aires commuter rail network). Every weekday, more than 1.3 million people commute to the Argentine capital for work and other business. These suburban trains work between 4 AM and 1 AM. Many of the lines are electric, several are diesel powered, while some of these are currently being converted to electric.

59  Metro:

As of 2008, Buenos Aires is the only Argentine city with an underground metro system, nonetheless there is a project to build a system in the city of Córdoba (Córdoba Metro) making it the second metro system in Argentina. The Buenos Aires Metro (Subterráneo de Buenos Aires) has currently six lines, each labelled with a letter from A to H. Daily ridership is 1.3 million and on the increase. Most of the lines of the Buenos Aires Metro connect the city centre (Micro-centro) with areas in the outskirts.



Tram:

Trams (streetcars), once common, were retired as public transportation in the 1960s but are now in the stages of a slow comeback. In 1987 a modern tram line was opened as a

60 feeder for the subway system. A modern light rail line between the Bartolomé Mitre suburban railway station and Tigre (Tren de la Costa) inaugurated in 1996 operates in the northern suburbs. A 2 kilometre tram known as the Tranvía del Este (Eastern Tram) was inaugurated 2007 in the Puerto Madero district in Buenos Aires using French Citadis trams.

 Rail Transport:

The railroad net constitutes one of the main means of transport between the City of Buenos Aires and the metropolitan area, and also connects the capital city with some cities of the interior of the country. The tourist circuits offer visitants a different way to travel around our country. A five-year railroad modernization and rationalization plan was initiated by the military government in 1976, but the general decline of the railway system was not halted, and the number of passengers carried dropped from 445 million in 1976 to about 300 million in 1991. The subway system in Buenos Aires, completely state owned since 1978, consists of five lines totaling 36 km (22 mi).

Statistics:

 31,902 km - country comparison to the world: 9

 Passengers annually: 2 billion

 Freight: 26 million metric tons

Total km 31,902 km country comparison to the world 9

Passengers annually 2 billion

Freight 26 million metric tons

 Long-distance passenger service:

Services on Argentina's passenger railway system, once extensive and prosperous, were greatly reduced in 1993 following the break-up of Ferrocarriles Argentinos (FA), the now-defunct state railroad corporation Since that date, however, several private and provincial railway companies have been created and have resurrected some of the major

61 passenger trains that FA once operated. The railway network is, however, far smaller than it once was Trenes de Buenos Aires, Ferrocentral, Ferrobaires, and Tren Patagónico are some of the private companies that now manage Argentina's long distance passenger rail network

 High-speed rail:

A high-speed rail between Buenos Aires, Rosario and Córdoba with speeds up to 320 km/h is in the design stages, construction will begin by early-2009 until the end of 2012 for the first segment to Rosario. In 2007 bids were called for a turnkey contract for a second high speed line, linking Buenos Aires and Mendoza In February 2008 national government announced another call for bid, this time for construction of a high speed train linking Buenos Aires and Mar del Plata; The Mar del Plata TAVe

 Freight service:

Over 25 million tons of freight were transported by rail in 2007. Currently, five carriers operate freight rail services in Argentina:

 Nuevo Central Argentino

 Ferroexpreso Pampeano

 Ferrosur Roca

 América Latina Logística

 Belgrano Cargas

62  Tourist railways:

A number of steam powered heritage railways (tourist trains) are in operation; the Old Patagonian Express (locally known as “La Trochita”) in Patagonia, the Train of the End of the World (Southern Fuegian Railway) in Ushuaia, Tierra del Fuego and a short run Tren Histórico de Bariloche. A diesel-electric Tren a las Nubes in the province of Salta runs from the city of Salta to San Antonio de los Cobres, (at present this service is being restored).

 Air Transport:

63 Though expensive in comparison with the other means of transportation, air travel is becoming increasingly common. Every provincial capital has its own airport, and there are many others, specially in tourist areas such as Bariloche and El Calafate (see list of airports in Argentina). Buenos Aires is the most important air terminal in South America. The four principal airports include Aeroparque and Ezeiza, both at Buenos Aires, Catarata Iguazu at Iguazu, and El Plumerillo at Mendoza. In 2001, there were 1,369 total airports and landing fields, of which only 145 had paved runways. The government line is Aerolíneas Argentinas; however, there are other major Argentine airlines and many foreign lines operating in the country. In 1997, the total scheduled civil aviation services flew 124 million freight ton-km (77 freight ton-mi) and carried 5,738,600 passengers on domestic and international flights.

Airports

Total (including airstrips): 1,272 (2007) - country comparison to the world: 7

With paved runways: With unpaved runways:

 Total: 154  Total: 996

 Over 3,047 m: 4  Over 3,047 m: 1

 2,438 to 3,047 m: 26  2,438 to 3,047 m: 1

64  1,524 to 2,437 m: 65  1,524 to 2,437 m: 45

 914 to 1,524 m: 50  914 to 1,524 m: 526

 under 914 m: 9 (2008)  under 914 m: 423 (2008)



 Merchant Marine:

River traffcic is mostly made up of cargo, especially on the Paraná River, which is navigable by very large ships (Panamax kind) downstream from the Greater Rosario area. There is a total of 10,950 km (6,800 mi) of navigable waterways, offering vast possibilities for efficient water transportation. The river system reaches Paraguay, northeastern Argentina, and regions of Brazil and Uruguay.

The Paraná is easily navigable up to Rosario, but the 171-km (106-mi) stretch between Rosario and Santa Fe has considerably less depth and is less suitable for oceangoing vessels.

Statistics:

 Waterways

 10,950 km navigable (2008) - country comparison to the world: 12

 Freight: 28 million metric tons

65 Total km 10,950 km navigable (2008) country comparison to the world 12

Freight 28 million metric tons

 Merchant Marine

 By type: bulk carrier 3, cargo 9, chemical tanker 2, container 1, passenger 1, passenger/cargo 3, petroleum tanker 24, refrigerated argo 2, roll on/roll off 1

 Registered in other countries: 19 (Liberia 3, Panama 8, Paraguay 5, Uruguay 3)

bulk carrier 3 cargo 9 chemical tanker 2 container 1 passenger 1 passenger/cargo 3 petroleum tanker 24 refrigerated Argo 2 roll on/roll off 1

Registered in other countries 19(Liberia 3, Panama 8, Paraguay 5, Uruguay 3

 Ports and harbors:

 Bahía Blanca  Necochea

66  Buenos Aires  Río Gallegos

 Comodoro Rivadavia  Rosario

 Concepción del Uruguay  Santa Fe

 La Plata  San Antonio Oeste

 Mar del Plata  Ushuaia

Indian Transportation Sector Overview

 Road sector in India

Second largest road system in the world at 3.3mn km

NH Density on Area at 3.7 km vis-à-vis 6.5 km and 26.1 km of Total Road Network per 1000sqkm of land area in China and US respectively

NH Density on Population at 0.01 km vis-à-vis 0.05 km and 0.84 km of Total Road Network per1000 people in China and US respectively

Quality of roads at 87th position in the world, way below China, Pakistan & SriLanka

67 Ports in India

Growth in Cargo traffic at a CAGR of ~10% in the past five years

~80% of the total traffic comprises dry & liquid bulk, remaining being general including containerized cargo

12 Major ports and ~187 non-major ports in India

Major ports handle ~70% of total volume of cargo

Capacity expansion plan of Rs.558 bn till FY14 under the NMDP, 2005

Capacity expected to increase 2.14x from 736.9 mn tons to 1.5 bn tons by 2014

Airports in India

Rapidly Expanding market

At ~25% p.a one of the fastest growing aviation markets in the world despite global slowdown

Airlines are competitive and consolidation is bearing fruit

68 Over 400 new aircrafts have been ordered since 2005

Airport Infrastructure

Govt encouraging Pvt Sector participation to augment infrastructure to meet increasing air traffic

Bangalore & Hyderabad airports now fully operational

Delhi/ Mumbai Airports are still under development by private developers

 5 greenfield airports planned under BOT –yet to take off

 Modernization of non-metro airports by AAI –flip-flops on bids seen

Railways in India

Remarkable turnaround by Indian Railways has breathed new life–into this life line of Indian transportation

Railway intends to spend USD 55 bn into various development schemes

Safety–37% Capacity increase–24%, Roling stock–18%, Dedicated freight corridor–10%, Metro rail projects–9%

Surplus land utilization will also bring in more funds for investment

Inland Waterway Transport in India

India has 14,500 km of navigable waterways comprising of rivers, canals, backwaters, creeks

5,700 km out of 14,500 km of IW is navigable by mechanized vessels

Presently, navigation restricted to only a few stretches such as

~45 MT of cargo (2.5 bn tonnes-km of traffic)

~70% of traffic in terms of tonne-km contributed by iron ore export through rivers in Goa

Central Inland Water Transport Corporation (CIWTC) has been a Principal operator of vessels (barges) on IWs

69 IWT modal share 0.3% in transport

New Draft Maritime Policy vision–IWT Modal share of 2% by 2025

ADVERTISING AND MEDIA SECTOR OF ARGENTINA

BASIC DATA

Official Country Name: Argentine Republic Region (Map name): South America Population: 37,384,816 Language(s): Spanish (official), English, Italian, Germany, French Literacy rate: 96.2% Area: 2,766,890 sq km GDP: 284,960 (US$ millions) Number of Daily Newspapers: 106 Total Circulation: 1,500,000

Circulation per 1000 61 Television Sets per 1,000 212.7 Radio Receivers per 1,000 650.0 Computers per 1,000 50.8 Cable Subscribers per 1,000: 163.1 Internet Access per 1,000: 66.9

70 Total Newspaper Ad Receipts: 1,136 (US$ millions) As % of All Ad Expenditures: 35.00 Number of Television Stations: 42 Number of Television Sets: 7,950,000

Number of Cable Subscribers: 6,034,700

Number of Radio Receivers: 24,300,000

Number of Individuals with Computers: 1,900,000

Number of Individuals with Internet Access: 2,500,000

ADVERTISING OVERVIEW

ADVERTISING OVERVIEW ADVERTISING OVERVIEW INDIA ARGENTINA  The Latin American model of commercial  Indian advertising industry is well broadcasting superficially is quite similar recognized all over the world for its to that developed in the United States. This creative output and high quality model consists of privately owned, advertisements. The performance of commercially-financed radio and television Indian agencies and advertisement & stations with one or more large companies marketing campaigns has been well controlling a significant market share. noted and awarded at various global Early American investments in Latin stages such as Cannes Lions. The American radio and television stations industry is continually evolving to facilitated the adoption of this commercial give better returns to clients and broadcasting model, and the region’s media memorable ads for the target audience. were internationalized many decades Such is the power of Indian before globalization became a buzzword in advertisement – that these ads have political and academic circles. become true legends, and will remain  Paradoxically, the Latin American media etched in the minds of viewers and

71 were both unregulated and highly readers for a long, long time. The controlled. The ruling elite demanded Indian advertising industry has also economic growth and political stability, given such worthies as Alyque satisfied by a docile commercial Padamsee (the man behind Lalitaji and broadcasting system under their political Liril campaigns) and Piyush Pandey. thumb (Fox 1997). In some countries,  The Indian market is also unique in alongside precocious commercialization, the sense that TV advertising is nationalism also shaped how the media actually increasing and set to overtake developed. Factions within governments print advertisements over the coming and progressive social movements pushed years. Leading ad planners believe for increased state control of domestic that the Indian audience still loves radio and television in order to ensure watching TV, and is very receptive to domestic content and national, rather than TV ads. In addition, the TV ads are foreign, ownership. These nationalist very audio visual in nature, and can measures were largely successful when easily overcome any barriers of motivated by the need for increased illiteracy, which is a major political control of the media but largely impediment for print advertising and unsuccessful when motivated by marketing in India. considerations of public service or  Another notable trend on a global preserving national culture (Waisbord level that still evades the Indian 1995). advertising industry is the mass migration of ad spending to online and digital media. In highly developed ad markets such as US and UK, the ad spending on digital and online media has increased exponentially, and has actually exceeded ad spending on print advertising. Now, online ad spending constitutes almost 15% of overall ad spending in these markets. In India, online advertisements are still to take

72 off. This trend will continue for at least the medium term, unless something on the lines on the mobile phone revolution happens, and more Indian get access to reliable internet access.

ADVERTISING FACTS AND FIGURES OF INDIA

 The turnover of Indian ad industry is less than 1% of the national GDP of India. In contrast, the share of US ad industry in national GDP of USA is 2.3%. This indicates a tremendous growth potential for the Indian advertisement and marketing industry.  The Indian ad industry is still evolving, as far as the scale of operations and scope are concerned. The global ad industry turnover is close to USD 450 billion annually, while India contributes less than 1.5 % of that figure. However, Indian ad industry is one of the fastest growing all over the world, perhaps next only to China and Russia.  The global ad industry is expected to clock a growth of about 2% in 2010, which is a major recovery over 2009. The Indian ad industry, in contrast, will grow by an estimated 10% to reach a figure of about Rs 23,700 crores. The major growth factors for 2010 will be the increase in ad spends focused on events such as IPL and football World Cup.  In 2009, the Indian ad industry had suffered a major setback, and had shrunk, primarily due to a drastic decrease in print advertising spending – which suffered a massive cut of Rs 2,000 crores.  The leading advertisement medium is newspapers and television, with an almost equal share totaling 75% of the total pie. Magazine advertising constitutes a very small 3%, while online and digital advertising spend is substantially less than 1% of the total ad industry turnover. Nevertheless, the spending on digital and online advertisements is increasing at a fast rate of 25%.

73  In addition to print and television, the other popular advertisement and marketing media are radio, cable TV, direct mail and outdoor advertisements and publicity.  The biggest ad spenders are FMCG companies such as Unilever, P&G, ITC and PepsiCo and automotive companies such as Maruti and Hero Honda. These companies have huge ad budgets running into hundreds of crores of rupees, and therefore, wield tremendous bargaining power over their ad agencies.  The biggest ad agencies in India are the subsidiaries and arms of their foreign principals, such as Ogilvy, JWT and Lowe. Very few indigenous ad agencies have managed to make a mark, and most of them have been acquired or merged by foreign ad agencies.  The emerging advertisement and marketing media in India are mobile advertisements, internet, direct calling (especially for financial services) and FM radio (for local businesses).  Figures of INDIA:-

Particular Current Size Projected Size

Television 148 Billion 427 Billion

Print Media 109 Billion 195 Billion

Filmed Entertainment 68 Billion 153 Billion

Radio 03 Billion 12 Billion

Music 07 Billion 7.4 Billion

Live Entertainment 08 Billion 18 Billion

Out-of-Home Advertising 09 Billion 17.5 Billion

Internet Advertising 1.6 Billion 7.5 Billion

74 ADVERTISING FACTS OF ARGENTINA

Media Environment in Argentina

There has been a 36 percent increase in all forms of advertising over the last 12 months.TV is the most important medium in terms of advertising, concentrating 53 percent of all ad spend.

Argentineans spent 50 percent of their time outside of the home so it’s important to take advantage of all advertising media. Like many other countries, Argentina’s Advertising is saturated. On average, each person receives over 2,500 ad messages per week. We can see how this is distributed among all Media:

Share of Media Share of Media Out-of-House 14.80% Open TV 4.60% News Papers 5.20% 44% Cable TV 6.40% Magazines 25% Radio

Argentina’s Top Advertisers 1. Danone Argentina 2. Unilever Argentina 3. SC Johnson & Son Argentina

75 4. Presidencia de la Nación (national government) 5. GlaxoSmithKline

INDIA ADVERTISING MARKET

Total Advertising expenditure in local currency at current prices

300000 284774

250035 250000 227579 213801

200000 179879 149396 150000 123770 106858 100000

50000

0 Expenditure

2004 2005 2006 2007 2008 2009 2010 2011

ADVERTISING MARKET IN ARGENTINA

76 ATTITUDE TOWARDS ADVERTISING

Attitude towards Media in India Attitude towards Media in Argentina

 To be able to work inside governmental  Advertising, “the business of encouraging buildings such as the National Congress people to buy products and services using or the president's office and residence, a the channel as a medium to deliver the special accreditation provided by the advertising message” (Leppaniemi et al, respective institutions is required. 2005). However it can be said that the According to this foreign press minimum scope of this new phenomenon is association, in Argentina there are around “advertising that uses terminals” (Bulander 150 foreign correspondents, half of which et al, 2005) and the maximum scope is are Argentines working for foreign media using advertising as a interactive and companies. ubiquitous marketing medium to provide  The current government of Argentina consumers with personalized information

77 does not review or censor cables or news according to where they are and their needs, sent abroad by foreign journalists thereby persuading the receiver to take working in the country. The last time some action, now or in the future, about some type of censorship mechanism was goods, services and ideas. However the imposed was during the last military minimum scope of mobile advertising is government (1976-83), when the state more suitable for this study, as SMS-based checked on foreign correspondents' mobile advertisements are more usual in activities as part of their overall objective Iran and other forms of mobile advertising of controlling the news flow. There are rarely used. no established procedures for government  Attitude is an important concept in relations with the foreign press. marketing. Kotler and Keller (2006) stated  Foreign ownership of media companies that “an attitude is a person’s enduring started to increase with the withdrawal of favorable or unfavorable evaluations, state companies and the slow emotional feelings, and action tendencies deregulation of the market that began toward some object or idea”. Therefore, after the election of Menem to the positive attitude toward advertising refers to presidency. In regard to the newspaper favorable evaluations and willingness business, companies from Spain have toward it. As noted above, more recent made important inroads in the market. An researchers have found that consumers Argentine investor sold the first generally have negative attitudes toward privatized television channel, Canal 9, to advertising and also mobile advertising. the Australian company Prime Television  There are factors that affect attitude towards for $150 million in 1997. Two years later advertising. In the following sections, we the Spanish company Telephonic bought identify the factors that may influence it for $120 million. And in 2002 it was attitude toward advertising and then bought by an Argentine consortium. develop a number of hypotheses that are Another foreign player in broadcasting is examined in the remainder of the paper. the Mexican group CIE Rock & Pop, which currently owns eight radio stations.  In light of the serious financial situation faced by the local news media, Congress

78 is discussing a law limiting the share of foreign companies in cultural enterprises.

Company Overview of Leo Burnett Worldwide, Inc. Operating in both the countries India as well as Argentina

Leo Burnett Worldwide, Inc. operates as an advertising agency. Its services include quantitative research, context planning, strategic planning, optimization, segmentation and targeting, digital strategy, and specialty insights; film and television, mobile, press/print/editorial, promo, digital, media, radio, design, ambient/outdoor, integrated and direct; media buying, event sponsorship and management, database marketing, direct marketing, promotions, and shopper marketing; and brand navigation, and digital workflow. The company was founded in 1935 and is based in Chicago, Illinois. Leo Burnett Worldwide, Inc. operates as a subsidiary of Publicist Grouped SA.

Leo Burnett is among the world's best-known agency brands, responsible for creating what has become known as the "Chicago School" of advertising, which made a virtue of simplicity and clarity, and was most strongly defined by the use of brand mascots, fictional characters who were used to personify individual brands. Uncle Ben, the Jolly Green Giant, Tony the Tiger, the Pillsbury Dough-Boy and the Marlboro Man were all Burnett inventions. The agency capped the 1990s with a show stopping deal which combined the forces of three major agency groups. In 1999, Burnett's acquired D'Arcy parent MacManus, stealing that business from under Interpublic's nose for $1bn; then sold a 20% stake in the combined group to Japanese giant Dentsu for a rumored $400m to create one of the world's biggest marketing groups, named Bcom3. The final twist came in 2002 with capture of Bcom3 by Publicist, and the subsequent merger of the D'Arcy network into Burnett. In 2007, Leo Burnett merged with below-the-line unit Arc Worldwide under a single management team, although it continues to use both brand names.

79 This company has come up with some great ideas to promote brands. The #2 ad agency in the US (behind WPP Group's JWT), Leo Burnett has helped create some of the top consumer brands, including Kellogg's Frosted Flakes cereal and its Tony the Tiger icon. It offers creative development and campaign planning services through about 95 offices in almost 85 countries. Its Arc Worldwide subsidiary provides promotional and direct marketing services, as well as multimedia and interactive marketing development.

LEO BURNETT IN INDIA LEO BURNETT IN ARGENTINA

 The agency had a good run with new  Leo Burnett is one of the senior brands business wins including Iodex, Hero, within the middle tier of international Asia Motor Works, Coke Studio and agency networks, with a balanced Samsung’s refrigerators, retail business reputation for good (and sometimes and some mobile projects. Campaigns great) creative work underpinned by for McDonald’s, Reliance Digital TV, skilled account management. It ranks Kaun Banega Crorepati and HDFC Life among the leading agencies on its home were some of the more visible work turf, but sits within the middle tier or from the agency during the year. below in most international Though the agency did not get much markets. The network enjoyed another recognition at Cannes Lions 2011 for successful year during 2011, ending up their Gandhiji Font, the agency won a as the 4th most awarded network bronze at Spikes Asia 2011. The worldwide, according to Gunn Report agency led the Indian tally at Ad fest global rankings. The year ended with 2011 with six metals, Also it the capture of the US Sprint Nextel was recognized for their work at New account, one of its biggest new business York Fest, D&AD and Clio. In the gains for several years. domestic awards circuit, the agency  Now firmly part of the Publicist Group, won three Gold, eight Silver and nine Leo Burnett operates a network of more Bronze metals at Goa-fest. than 200 operating units around the  Overall, though the agency has world, including 96 full-service managed to win new businesses, the advertising agencies in 84 countries. It jury felt that it hasn’t been an is positioned as an agency which

80 outstanding year for Leo Burnett and specializes in "icon brands", or "ideas hopes to see truly great work next year. that inspire enduring belief", and  Leo Burnett India is a full service indeed, more even than that other advertising agency that offers end to founder-created advertising brand end solutions to clients for their brands. Ogilvy, Burnett's leans heavily on its This includes campaigns across mass own iconic heritage. It makes media and below the line (including considerable use of its own icon brand, digital and activation). It is part of the Leo Burnett himself, his various Leo Burnett Group worldwide. aphoristic sayings, his black mark-up  Leo Burnett India also has Arc pencils, and the much-quoted story Worldwide (our below the line arm) about apples (see below). Including and Orchard Advertising (our second marketing services subsidiaries, agency). We have offices in Mumbai, Advertising Age estimated consolidated Delhi and Bangalore. revenues of $1.2bn in 2010.  Leo Burnett India is rated among top 5  Leo Burnett's main US agency is still agencies in the country, has created located in its traditional home city of memorable campaigns for several Chicago, although there are also service brands in its portfolio. It has been offices in New York, Los Angeles and building insightful campaigns for Detroit. McDonald’s, Complan, Glucon D,  Leo Burnett New York is primarily an Thums Up, Maaza, Perfetti, Tide, administrative centre, coordinating Whisper, Samsung, Uninor, Tata international network accounts such as Capital, Tata Salt, HDFC Life Samsung. However that unit is Insurance, General Motor, and Bacardi expected to grow in stature following among others. recent new account wins. The Los  Leo Burnett India has won International Angeles office offers a similar service and National awards year on year at for entertainment industry accounts. Cannes Festival, Adfest, D&AD, Clio, Advertising Age estimated advertising One Show, London International revenues for Leo Burnett USA of Awards, Spikes Asia, Lotus Awards, $441m (or 36% of global revenues) in Andys, New York Festival, Goafest and

81 Mirchi Kaan Awards. Leo Burnett 2010. India has also been declared the ‘Global Agency of the Year’, across Burnett’s 86 nation network twice.  We are a truly integrated creative agency and strongly believe that a great idea can come from anywhere.

82 Leo Burnett creates campaign in India and Argentina

 Thumbs Up gets all new star cast and tagline

 Singapore Tourism Board rolls out new campaign for India

 Maaza pitches itself as the "Har mausam aam" in new TVC

 HDFC Life's new campaign says 'Click 2 Protect' your family

 Looking Back: 2011, Going ahead: 2012 - Arvind Sharma

 McDonald's promotes its 'Happy Price Menu' in new campaign

 Goafest 2012: Event to be held from 19 to 21 April

 Looking back: 2011, Going ahead: 2012 - KV Sridhar (Pops)

 Campaign India Agency Report Card 2011: Leo Burnett

 Tata Capital’s new TVC highlights its home loans

 McDonalds asks you to slow down a bit with its new TVC

 Reliance Digital TV refreshes brand image with a new campaign

 Pops' iCannes 2011

 Cannes 2011: Predict and win contest

 Leo Burnett and Campaign India present ‘Cannes 2011 Prediction Reel’ contest

 Minute Maid Nimbu Fresh launches ‘First Love’ campaign

 Stunts galore in new Thumbs Up TVC featuring Akshay Kumar

 HDFC Life urges parents to start financial planning early for child's future

83 ENTREPRENEURSHIP SECTOR IN ARGENTINA

INTRODUCTION OF COMPANY PROFILE

ADECOAGRO (ARGENTINA)

1.1 HISTORY OF ADECOAGRO

In September 2002, we commenced our operations with the acquisition of 100% of the equity interests of Pecom Agropecuaria S.A. (“Pecom”), an Argentine corporation (sociedad anónima), and the we rapidly became one of the largest agricultural companies in Argentina. Involving more than 74,000 hectares of farmland, this acquisition represented one of the largest stock purchase transactions in South America in 2002. In connection with the acquisition, Pecom changed its name to Adeco Agropecuaria S.A.

Adeco Agropecuaria was the platform from which we executed our expansion plans, including the acquisition of additional land and the diversification of our business activities.

We were incorporated, in Luxembourg, on June 11, 2010 and on October 30, 2010; the members of IFH LLC transferred pro rata approximately 98% of their membership interests in IFH LLC to Adecoagro S.A. in exchange for common shares of Adecoagro S.A.

84 1.2 CORPORATE PROFILE

We are a leading agricultural company in South America. Adecoagro owns over 295 thousand hectares of farmland and several industrial facilities spread across the most productive regions of Argentina, Brazil and Uruguay, where it produces over 1 million tons of agricultural products including corn, wheat, soybeans, rice, dairy products, sugar, ethanol and electricity among others.

Our sustainable business model is focused on (i) a low-cost production model that leverages growing or producing each of ours agricultural products in regions where Adecoagro believes to have competitive advantages, (ii) reducing the volatility of the Company´s returns through product and geographic diversification and use of advanced technology, (iii) benefiting from vertical integration in key segments of the agroindustrial chain, (iv) acquiring and transforming land to improve it´s productivity and realizing land appreciation through strategic dispositions; and (v) promoting sustainable agricultural production and development.

1.3 BUSINESS

Adecoagro is one of the largest owners of productive farmland in South America. As of September 30, 2010, Adecoagro owned 274,663 hectares (excluding sugarcane farms) of farmland in Argentina, Brazil and Uruguay, of which 121,723 hectares are croppable, 18,909 hectares are being evaluated for transformation, 79,645 hectares are suitable for raising beef cattle and are mostly leased to a third party beef processor, and 54,387 hectares are legal land reserves pursuant to local regulations or other land reserves.

 Crop business: Adecoagro produces a wide range of agricultural commodities including soybeans, corn, wheat, sunflower and cotton, among others.  Rice business: Adecoagro owns a fully-integrated rice operation in Argentina. The Company produces irrigated rice in the northeast provinces of Argentina,

85 where the availability of water, sunlight, and fertile soil results in one of the most ideal regions in the world for producing rice at low cost. Adecoagro is one of the largest producers of rough (unprocessed) rice in Argentina, producing 91,000 tons during the 2009/2010 harvest year, which accounted for 8% of the total Argentine production according to Conmasur. Adecoagro owns three rice mills that process its own production as well as rice purchased from third parties.  Coffee business: Adecoagro´s integrated coffee operation is located in the western part of the state of Bahia, Brazil, where conditions are well-suited for producing “Specialty Coffee” due to the availability of water for irrigation, the absence of frosts, and the flat topography that allows for a fully mechanized harvest.  Dairy business: Adecoagro is one of the leading dairy producer in South America in terms of its utilization of cutting-edge technology, productivity per cow and grain conversion efficiencies.  Cattle business: Adecoagro´s cattle business primarily consists of leasing approximately 74,000 hectares of grazing land located in the Argentine provinces of Corrientes, Formosa, Santa Fe and Santiago del Estero.

86 ENTREPRENEUR - MARIANO BOSCH Director and Chief Executive Officer Adecoagro SA

Mr. Bosch is a co-founder of Adecoagro and has been the Chief Executive Officer for all operations in Argentina, Brazil and Uruguay since inception and a member of the Company’s board of directors since 2011. From 1995 to 2002, Mr. Bosch served as the founder and Chief Executive Officer of BLS Agribusiness, an agricultural consulting, technical management and administration company. Mr. Bosch is also currently a member of the advisory board of Teays River Investments LLC, a farmland investment management firm in North America. Mr. Bosch has over 18 years of experience in agribusiness development and agricultural production. He actively participates in organizations focused on promoting the use of best practices in the sector, such as the Argentine Association of Regional Consortiums for Agricultural Experimentation (AACREA) and the Conservational Production Foundation (Producir Conservando). He graduated with a degree in Agricultural Engineering from the University of Buenos Aires. Mr. Bosch is an Argentine citizen.

PROSPECTS FOR BUSINESS Adecoagro is focused on producing food and renewable energy to supply the world. We believe the demand for food and renewable energy will continue growing, driven by the constant growth of the global population and the income in Brazil, China, and India and also in other undeveloped countries. In the short term, we expect demand to remain stable, since the demand for this type of basic goods is inelastic. However, we are very cautions and do not discard a scenario where commodity prices fall. We are focused on maximising liquidity and the risk-return profile of every dollar we spend.

CHALLENGES . Adecoagro’s greatest challenge for growth is recruiting the right people to manage operations. . In large cities, this is relatively simple but it is not so easy in the interior of the countries, where our farms and agroindustrial operations are located.

87 . To continue growing, we need human capital. It is a difficult task to find people who understand efficiency and focused on return on investment and sustainable production, and are good leaders who can motivate teams. . We spend a lot of time and money in training our people, but it is a process that cannot be done from one day to the next. . Cultural differences are always hard to learn and manage, but in time they can be overcome. The advantages of new countries relate to volume and large orders and, once trust is in place, the market opens and opportunities start to grow. STRATEGY Our strategy has not changed. Following our IPO on January 28 of this year, where we raised over 423 million dollars, we continue strengthening and growing our three main business lines. We continue focusing our growth decisions based on maximising the return on invested capital. GOVERNMENT SUPPORT One of the key things that we hope the Government will allocate resources to strengthen of education, especially in the interior of the country. In fact, we are having discussions with several governmental agencies promoting that rural schools should train their students in the theory of knowledge, as well as helping them to develop an entrepreneurial spirit. This is essential for both the young people who work with us and for those who will set up their own businesses to sell us products and services.

ENVIRONMENTAL RISK We manage and operate natural resources such as land and water that are key for our business and our operations. Therefore, taking care of these resources with a long term view is part of our core business strategy and is discussed and evaluated by the board of directors. Environmental risk is constantly assessed by external consultants and our managers who are guided under the highest sustainability criteria.

A clear example is how we manage our land. By applying a sustainable production model based on No-Till and other best practices we achieve our environmental goals of protecting the quality of soil and our business targets of increasing crop yields, reducing production costs and increasing the value of the land.

88 ENTREPRENEUR -KARAN A CHANANA AMIRA FOODS INDIA LIMITED

The Amira Group was founded in 1915 and has evolved from Trading into Processing, Branding and Distribution of Rice and Agro Commodities to become India's Largest privately held Rice Company. Today taking this business legacy forward under the stewardship of Shri Karan a Chanana, Chairman The Amira Group received the prestigious status of 'Global Growth Company' from the World Economic Forum. . This accreditation is based on parameters including demonstrated leadership, outstanding execution and acknowledged operating experience. . Amira Foods has set another benchmark in the industry with Brand Amira being honored with this prestigious title THE INDIAN POWER BRANDS; THE GLOBAL SUPER POWER EDITION chosen by the Indian Consumer. The parameters of this recognition are based on the most powerful companies of India that have the potential to be "SUPERPOWERS". . Chairman the Amira Group Mr. Karan a Chanana was awarded Power Brands Hall Of Fame Corporate icon/Leader Award 2011 at the Power brands Hall of Fame Awards for his contribution in Food Industry and demonstrated Leadership & Excellence in establishing an International Brand Identity and in turn become an Indian media vehicle globally. . A Family owned Brand since 1915 . A category focus on rice is well rounded through a commitment to other agro- Commodities and Bulk Commodity Trading in pulses, sesame seeds, sugar, onion, potatoes, maize, soybean extract, edible oil, palm oil, wheat, wheat flour, rapeseed, millets and spices. . The Amira brand has established a reputation for fair trade practices. Quality products, honest pricing and the assurance of customer satisfaction have been the guiding philosophy to grow the brand.

89 AMIRA FOODS SET TO CAPTURE UAE MARKET WITH CHOITHRAMS: Amira Foods India Ltd, a leading rice company, is set to capture the UAE market with its recent strategic collaboration with Choithrams, a UAE-based supermarket chain. With this collaboration, Choithrams will distribute and place Amira premium Basmati brands – Amira Pure Basmati Rice, Traditional Basmati, Amira Indigo Extra-long Grain Basmati Rice and Amira Good length Basmati Rice – in the UAE market.

90 Karan A Chanana, group managing director, Amira Group, says, “We see exponential growth in the Middle East, as the region has refined culture. We also foresee a successful venture in this tie-up, as visitors from all over the world visit Dubai.”

Choithrams is a successful group with associates in diverse fields, including wholesale, commodity brokerage and manufacture of edible and non-edible items.

Today, Dubai is a destination market and show window for premium and luxury brands. Keeping this at the back of the mind, Amira Foods has launched its top-end three Basmati brands in the UAE market with the aim to achieve at least 10-12 per cent market shares in the first year of operations. Moreover, Dubai is also a gateway to re-export to other destinations like Iran in non-branded segment.

Karan A Chanana Group Managing Director Amira Foods India Limited

Under his stewardship, Karan A Chanana has steered th e Group from a family-run operation into a professionally managed business unit. Today the company, "Amira Foods (India) Ltd." has attained a turnover of USD$ 240 million in last financial year.

The flagship of the "The Amira Group" has established itself as the largest privately owned rice exporter in the country.

Rice is an important part of the staple diet of billions across Asia. It s no mere accident that the companies that deal with rice growing and milling form one of the most profitable ventures on our continent. We spoke to Karan A Chanana from Amira Foods (India) Ltd which is one of the largest rice companies in India to learn more about the humble food grain and its incredible entrepreneurial possibilities.

91 Passion & Vision

A man with dynamic leadership abilities. An effective team builder with sound communication skills. A strategic thinker and pragmatic in his approach, he is set about his vision of growing the business with single-minded purpose. Innovative in his marketing skills and astute in managing a complex supply chain. His dedications stems from a firm belief that we must give back to society in some measure, what we have received in abundance.

FACTORS LEADS TO GROWTH

Amira’s plan is to minimize our dependence on externalities as much as possible through a process of vertical integration. Thus scaling up entails integrating at every step of the value chain from the farm to the fork. Moreover, the vision is to scale up not only vertically, but also horizontally, in terms of the sheer no. of countries where Amira establishes its footprints, thus building a truly world class brand.

CHALLENGES

When took reign of the Amira leadership, what is inherited was an inward looking and rigid culture. But it’s a moot point that the only way to survive in today’s dynamic world is to be nimble footed, which requires a robust process driven company which has capable people at the helm who have the caliber to use their discretion to make critical decisions, and not a place where the entire management is top down. Making this transition required a sustained commitment, and mobilizing our own people to make them instruments of change – a metamorphosis which Amira has experienced beautifully.

TIP FOR ASPIRING ENTREPRENEURS

The only tip which can give is the credo they believe in, which is ‘Everyday is the first day of the rest of your life’. Hence whatever setbacks life throws your way, take them in your stride, and keep moving ahead, because everyday presents itself with a new

92 opportunity for you, which is just waiting to be explored. So just seize the day! And also on a more prudent note – ‘Always have a Plan B’. This does not mean that you do not have faith in your plan A, it just means that you are prepared to give the market and the environment the respect that it deserves.

THOUGHTS ON INDIAN ENTREPRENEURS

They truly believe that Indian entrepreneurs have an edge over those from other nationalities as, if they can do business in India, than you can do business anywhere! But on a technological front, it’s very critical to keep abreast of the latest technology, and quickly inculcate the same in your system before the market inevitably forces you to do so.

93 AGRICULTURE IN ARGENTINA AMD INDIA

Table 1: AGRICULTURE IN ARGENTINA

In Yr. 1900 1/3 Labor were consumed by Agriculture

In Yr. 1959 Portion of was Agriculture 20% of GDP

In Yr.2011 Its about 10% of GDP

Foreign owned

10 to 15% Farmland

Export in 2011 about $86 Export of unprocessed Agriculture, Billion ( Which was ¼ Primary goods, mainly soybeans, wheat & Portion of total export) maize

Other Export was( Which processed agricultural products, such as was 1/3 Portion of total animal feed, flour and vegetable oils. export)

Table 1: AGRICULTURE IN INDIA

Agricultural India at 2Nd Position all over world production

In 2007 Agriculture 16.6% of GDP and secured 52% of Provides manpower

94 Table 2: Rice production in India

Year In million tones

2008- 99.18 2009

2009- 89.13 2010

2010- 100 2011

Table 2: Rice production in Argentina

Region in which Production Total Amount of Total Area of Production done Portion

Entre Rios 57% 150 Lots

Corrientes, 33% 927 Lots

Santa Fe, Chaco and Formosa. 10% 1672 Lots

Total Production ( Million tons) Amount of export (%) Estimated value in $

1.3 every yr. 50 175

95 RICE PRODUCTION

Graph 1: ARGENTINA MILLED RICE PRODUCTION BY YEAR

Table 3: ARGENTINA MILLED RICE PRODUCTION BY YEAR

Market Growth Market Growth Market Growth Prod. Prod. Prod. Year Rate year rate year rate 1960 97 NA 1978 203 1.00 % 1996 783 22.15 % -14.78 1961 118 21.65 % 1979 173 1997 673 -14.05 % % 1962 116 -1.69 % 1980 186 7.51 % 1998 1078 60.18 % 1963 124 6.90 % 1981 230 23.66 % 1999 588 -45.45 % -21.74 1964 174 40.32 % 1982 180 2000 567 -3.57 % % 1965 107 -38.51 % 1983 309 71.67 % 2001 463 -18.34 % -15.86 1966 141 31.78 % 1984 260 2002 467 0.86 % % 1967 184 30.50 % 1985 283 8.85 % 2003 742 58.89 % -19.08 1968 224 21.74 % 1986 229 2004 683 -7.95 % % 1969 265 18.30 % 1987 247 7.86 % 2005 764 11.86 % 1970 187 -29.43 % 1988 291 17.81 % 2006 691 -9.55 % -26.12 1971 191 2.14 % 1989 215 2007 810 17.22 % % 1972 169 -11.52 % 1990 299 39.07 % 2008 867 7.04 %

96 1973 205 21.30 % 1991 425 42.14 % 2009 706 -18.57 % 1974 228 11.22 % 1992 395 -7.06 % 2010 1118 58.36 % 1975 201 -11.84 % 1993 395 0.00 % 2011 975 -12.79 % 1976 208 3.48 % 1994 602 52.41 % 1977 201 -3.37 % 1995 641 6.48 %

Source: http://www.indexmundi.com/agriculture

Graph 2: INDIA MILLED RICE ROUGH PRODUCTION BY YEAR

Table 4: INDIA MILLED RICE ROUGH PRODUCTION BY YEAR

Mark Growth Market Growth Market Growth et Prod. Prod. Prod. Rate Year Rate Year Rate Year 1960 52011 NA 1978 80740 2.20 % 1996 122607 6.17 % 1961 53548 2.96 % 1979 63559 -21.28 % 1997 123822 0.99 % 1962 49875 -6.86 % 1980 80527 26.70 % 1998 129133 4.29 % 1963 55553 11.38 % 1981 79952 -0.71 % 1999 134533 4.18 % 1964 59021 6.24 % 1982 70681 -11.60 % 2000 127483 -5.24 % 1965 45929 -22.18 % 1983 90155 27.55 % 2001 140024 9.84 %

97 1966 45703 -0.49 % 1984 87514 -2.93 % 2002 107741 -23.06 % 1967 56474 23.57 % 1985 95747 9.41 % 2003 132808 23.27 % 1968 59701 5.71 % 1986 90633 -5.34 % 2004 124707 -6.10 % 1969 60706 1.68 % 1987 85302 -5.88 % 2005 137699 10.42 % 1970 63401 4.44 % 1988 105744 23.96 % 2006 140039 1.70 % 1971 64667 2.00 % 1989 110371 4.38 % 2007 145050 3.58 % 1972 58926 -8.88 % 1990 111448 0.98 % 2008 148785 2.57 % 1973 66143 12.25 % 1991 112031 0.52 % 2009 133648 -10.17 % 1974 59428 -10.15 % 1992 109313 -2.43 % 2010 143984 7.73 % 1975 73183 23.15 % 1993 120462 10.20 % 2011 154140 7.05 % 1976 62938 -14.00 % 1994 122727 1.88 % 1977 79005 25.53 % 1995 115482 -5.90 %

Source: http://www.indexmundi.com/agriculture

INDIA SIGNS AGRICULTURE PACT WITH ARGENTINA

BUENOS AIRES: India has signed an agreement with Argentina on conducting research in agriculture and other allied sectors, in line with its plans to tap natural and other resources in South America to boost its food security.

Agriculture Minister Sharad Pawar signed a memorandum of understanding on cooperation in agriculture and allied sectors with his Argentine counterpart Julian Andres Dominguez here this weekend.

Pawar is on a two-week long visit to Argentina, Brazil and Mexico to study the best practices in agriculture in these countries.

The South American countries have emerged as main exporters of commodities, especially to emerging markets, significantly denting the US- Europe domination in agribusiness sector. They have overtaken the US in soya production, accounting for 50 percent of global production,

98 India this April replaced China as the biggest importer of Argentine soybean oil. Argentina is the world’s largest exporter of sunflower and soybean oil; world’s second largest exporter of corn; and world’s third largest producer soybeans.

With large swathes of land in a sparsely populated region, which accounts for 26 percent of global freshwater reserves, South American nations have the highest yields per hectare.

“The memorandum of understanding provides a framework for exchange of information on best practices and technologies, cooperation in research and development and promotion of trade, investment and joint ventures,” said an official release.

India is looking to replicate the success of Argentina in turning agriculture into a high- technology sector.

The Indian delegation led by Pawar will also explore the possibility of increasing the supply of edible oil and pulses to the subcontinent as domestic output has not been able to meet galloping demand.

A recent report of the Inter-American Development Bank said India, given its rising needs and buying power, would be a buyer of agricultural and mineral products of South America.

SIGN MOU ON COOPERATION OF INDIA AND ARGENTINA IN AGRICULTURE The Union Minister for Consumer Affairs, Food and Public Distribution and Agriculture, Shri Sharad Pawar and Argentine Agriculture Minister, Mr. Julian Andres dominguez exchanging the signed documents of an MoU on Agricultural Cooperation, at Buenos Aires on September 11, 2010. Argentina agreed to step up technical and professional cooperation in the agricultural sector and foster trade in plants and animal products between the two countries.

99 A study by the Inter-American Development Bank (IDB) released last Tuesday stressed the great integration potential between India and Latin America and called for closer economic ties to tap into "massive" trade and investment opportunities.

With 1.1 billion people and a scarcity of natural resources, relative to other continent-size nations, India has the potential to be a large buyer of agricultural and mineral goods, Latin America's main exports, said the study.

In a joint statement, the ministers drew attention to the "benefits of cooperation in the field of agriculture and the allied sectors including the agro industrial sector".

. The MOU provides a framework for exchange of information on best practices and technologies, cooperation in research and development and promotion of trade, investment and joint ventures. . Argentina is the largest source of import of soya oil by India. In the first seven months of this year, India has imported soya oil worth US$1.4 billion. India is also importing from Argentina sunflower oil and other agro-products. Argentina is the largest exporter of soya and sunflower oils in the world. . There are 14 Indian companies which have invested about one billion dollars in IT, agrochemicals, steel, pharmaceuticals and cosmetics in Argentina. United Phosphorus and Punjab Chemicals & Crop Protection Ltd have invested 100 million dollars in Argentina in the production and export of agrochemicals and seeds. . A number of Indian companies have shown interest in investment and joint ventures in agribusiness in Argentina, which has one of the most advanced and competitive agriculture sectors in the world.

100 EXPORT IMPORT SECTOR OF ARGENTINA

Trade Group Member

Free trade agreements to which Argentina is a member to include:

Generalized System of Preferences (GSP)

This system of preferences helps developing countries improve financially and economically through exports to certain developed countries by providing duty-free status to numerous products that would normally not be.

MERCOSUR

This agreement calls for a gradual elimination of tariffs on goods originating in and traded among member states, and the formation of a Common External Tariff (CET).

Additionally, Argentina is a participant to:

The Cartagena Agreement whose aim is to strengthen integration not only in terms of trade, but also in other spheres such as the political, social, scientific, technological and cultural areas.

The Free Trade Area of the Americas (FTAA) whose effort is to unite the economies of the Western Hemisphere into a single free trade agreement where barriers to trade and investment will be progressively eliminated, and to complete negotiations for the agreement by 2005.

Multilateral organizations Argentina is a member to include the United Nations (founding member) and numerous UN agencies such as the Food and Agricultural Organization (FAO), United Nations Educational, Scientific and Cultural Organization (UNESCO), United Nations Conference on Trade and Development (UNCTAD), United Nations Industrial Development Organization (UNIDO), the World Trade Organization (WTO), the International Monetary Fund (IMF), International Finance Corporation (IFC), International Fund for Agricultural Development (IFAD), International Atomic Energy Agency (IAEA), International Civil Aviation Organization (ICAO), International

101 Maritime Organization (IMO), International Telecommunication Union (ITU), World Health Organization (WHO), World Intellectual Property Organization (WIPO), World Customs Organization (WCO) and the World Meteorological Organization.

Hemispheric and regional organizations include the Organization of American States (OAS), Inter-American Development Bank (IDB), Latin-American Economic System (LAES), Economic Commission for Latin America and the Caribbean (ECLAC), Latin- American Integration Association (LAIA), Agency for the Prohibition of Nuclear Weapons in Latin America and the Caribbean (OPANAL).

Environmental agreements honoured include:

 The Antarctic Treaty

 The Protocol on Environmental Protection to the Antarctic Treaty

 The Convention on Biological Diversity

 The United Nations Framework Convention on Climate Change

 The Kyoto Protocol to the United Nations Framework Convention on Climate Change

 The United Nations Convention to Combat Desertification in Those Countries Experiencing Serious Drought and/or Desertification, Particularly in Africa

 The Convention on the International Trade in Endangered Species of Wild Flora and Fauna (CITES)

 The Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and Their Disposal

 The Treaty Banning Nuclear Weapon Tests in the Atmosphere, in Outer Space, and Under Water

 The Montreal Protocol on Substances That Deplete the Ozone Layer

 The Protocol of 1978 Relating to the International Convention for the Prevention of Pollution From Ships, 1973 (MARPOL)

 The Convention on Wetlands of International Importance Especially as Waterfowl Habitat (Ramsar) 102  The International Convention for the Regulation of Whaling.

103 General Import Clearance Information

Clearance Process

FedEx Clearance

Working with Customs officials throughout the world, FedEx has developed innovative technology to eliminate many steps of the paperwork-handling process and expedite the movement of international shipments. An example in Argentina is the FedEx Expressclear Electronic Customs clearance system. Starting at the origin location, state- of-the-art technology allows the processing of shipment paperwork and electronic transmission of documents to the designated FedEx hub and destination clearance location. The Expressclear system also keeps a database of regulatory information, which includes; importers' numbers, broker designations, corporate contact names and telephone numbers. At a FedEx hub, international shipments are sorted, scanned and loaded onto an international flight. Vital shipment information is keyed into a worldwide manifest database, which is linked to computer systems operated by brokers and Customs officials in many countries. Even before the plane has taken off, or while it is in the air, Customs agents and brokers at the destination airport of entry can begin examining shipping manifests, querying air waybill data if they need more details, assessing duties and taxes and selecting the shipments they wish to examine. By the time the plane arrives at its destination, many packages have already been cleared by Customs. As the plane is unloaded, the Expressclear system identifies packages to be examined and prints "cleared" Customs labels for all others. Cleared shipments are transferred to trucks for immediate delivery. International shipments are scanned at all key points throughout the process and this allows for up-to-date status reports including when Customs clearance is obtained.

Customs Clearance

In Argentina the Bureau of Customs is the governmental agency charged with the enforcement of the tariff and Customs laws and regulations.

Importation of goods into Argentina is governed by a myriad of import regulations, which are not much different from those prescribed in other countries. These regulations and documentation requirements must be observed and complied with by shippers and consignees as well as air carriers to expedite the Customs clearance of imported goods.

104 In general, all articles imported into Argentina are subject to Customs duty and/or internal revenue taxes and enter through a customhouse at a port or airport where Customs examination, tariff classification and appraisals are made. Taxes and other charges due shall be paid (or secured for payment) prior to release from Customs custody.

All importations are entered under Informal Entry or Formal Entry except the following, which may be entered duty and tax- free:

1. Importations for the official use of foreign embassies, legations and other agencies of foreign governments 2. Importations for the personal and family use of the members and attaches of foreign embassies 3. Miscellaneous articles that are exempt by law or process

Decree 161/99 and Resolution AFIP 503/99 established a Simplified Importation System and to import merchandise under this optional clearance method. It must not be over 50 kg as maximum weight. Under the AFIP General Resolution 1811, dated 01/11/2005, the FOB value must not exceed the sum of $1,000 USD per day. Goods that are entered under this system must:

 Be new, unused and not require reconditioning  Not be prohibited for import, nor be subject to quotas or be regulated under other agencies  Not be protected by a regulation that implies any type of exemption or tariff preferences

Document Requirements

Air Waybill - An air waybill or carriers certificate (naming the consignee for customs purposes) as evidence of the consignee's right to make entry.

Commercial Invoice - Required for all non-document shipments to help prevent

105 clearance delays. It should be presented in Spanish, however if in English, the Spanish translation should appear right below the English text.

Packing List - Required for most goods and should preferably be in Spanish. The import of some goods in bulk form (i.e. Coal, sand etc.) Do not require this document.

Certificate of Origin - A Certificate of Origin is required by the Government of Argentina for certain products such as textiles and footwear as well as for products and parts produced in countries that are not members of the World Trade Organization (WTO).

Additional documentation is required in the form of permits, licenses or product certification for goods such as (and not limited to) food, pharmaceuticals, chemical products, cosmetics, agricultural products, textiles and defence material.

Customs Valuation

All goods shipped to Argentina must have a value and description. The value is usually based on the transaction value between the shipper and the importer, what the sale values of the goods were. If no actual transaction has taken place, such as with samples or a no charge shipment, a value must still be assessed; this would be the fair market value or replacement value. Non-tangible items such as a business documents, accounting documents, etc. must also be assessed a value, but this should be based on the value of the paper.

Import Duties

All imported goods are subject to an ad valorem duty that is based on the cost of the goods, plus insurance and freight (CIF).

106 Antidumping

Customs will assess antidumping duties on imported goods sold in Argentina at less than the normal price of the goods in the manufacturer's home market (also called fair market value). Specific information regarding commodities that are subject to anti-dumping duties can be found at the Commission National de Comercio Exterior website at http://www.mecon.gov.ar/cnce/

Excise Duties

Alcoholic beverages, tobacco, soft drinks, syrups, extracts, concentrates and consumer electronic products are subject to luxury and excise taxes.

Additional Duties

Countervailing duties are assessed to some goods to counter the effects of subsidies provided by the foreign government for goods exported to Argentina resulting in artificially low prices that have a detrimental impact on Argentine industries. Specific information regarding commodities that are subject to countervailing duties can be found at the Comision Nacional de Comercio Exterior website at http://www.mecon.gov.ar/cnce/

Import Taxes

In addition to the tariffs, imported goods are subject to additional fees and taxes such as:

 0.5 percent statistics fee on the CIF value (except capital goods). This tax is not levied on trade between MERCOSUR member countries.  Depending on the product, either 21 or 10.5 percent value added tax (VAT) on the sum of the CIF value, tariff and statistics fee.  Depending on the product, either 10 or 5.5 percent advanced VAT on the sum of the CIF value and statistics fee on all goods imported for resale (goods imported by the end-user are exempt).  3 percent anticipated profits tax on all retail goods (goods imported by the end- user are exempt).

107 Customs Fees

A $10.00 USD single fixed customs fee is assessed per transaction entered using the Sistema Informatico Maria (SIM). Merchandise imported using the Simplified Import System is exempt from this fee.

Exchange Controls

Exchange controls are currently imposed by the government of Argentina.

Technical Barriers to Trade (TBT's)

Technical barriers or non-tariff barriers to trade, as they are sometimes known as, can cause many problems for exporters looking for new markets for their products. These barriers can be in the form of regulations, standards, testing and certification procedures. The World Trade Organization (WTO) Agreement on Technical Barriers to Trade tries to ensure that these barriers do not create unnecessary obstacles. To obtain further information on Technical Barriers to Trade as well as Notifications on technical regulations and conformity assessment procedures, go to the WTO website at http://www.wto.org/english/tratop_e/tbt_e/tbt_e.htm

Consular Fees

Legalization of shipping documents is generally not required as a condition of entry of goods into Argentina.

108 General Import Clearance Information

Inspection

Minimum import prices replaced the pre-shipment inspection requirement in its entirety on December 25, 2001 under Resolution 1004/2001.

Registration Requirements

Companies wishing to import products into Argentina must be registered in the National Registry of Importers and Exporters.

Companies wishing to import through an optional customs clearance method established by Decree 161/99 and Resolution AFIP 503/99 called the "Simplified Importation System" must provide the companies tax payer number known as the Clave Unica de Identification Tributaria [CUIT]. Commercial shipments consigned to, or shipped from [when exporting from Argentina] private individuals must provide the Clave Unica de Identification Laboral [CUIL] number.

Tariff classification

On January of 1995, Argentina implemented the MERCOSUR Common Nomenclature, which is aligned with the Harmonized System of Nomenclature and is utilized for tariff classification.

109 Argentina Import Prohibition

The following commodities are prohibited into Argentina:

 Used products such as (and not limited to): o Spare parts o Medical supplies o Automobiles o Motorcycles and Velocipedes o Clothing o Tires o Boats  Dangerous residues (chemicals)  Certain toxic substances contained in pharmaceutical products, cosmetics and toys  Certain food additives and colorants  Products containing polychlorinated biphenyl's (PCB's)  Asbestos fibres of the Amphibole and Chrysotile variety (Crocidolite, Amosite, Actinolite, Antofilite and Trimolite) and products containing these fibres.

110 General Import Restriction

The following items are not acceptable for carriage to any international destinations unless otherwise indicated. (Additional restrictions may apply depending on destination. Various regulatory clearances in addition to customs clearance may be required for certain commodities, thereby extending the transit time.)

1. APO/FPO addresses. 2. C.O.D. shipments. 3. Human corpses, human organs or body parts, human and animal embryos, or cremated or disinterred human remains. 4. Explosives (Class 1.4 explosives are acceptable for carriage to Canada, Germany, France, Japan, United Arab Emirates and United Kingdom. Note: United Arab Emirates only allows Class 1.4 explosives to be shipped hold-for-pickup to the FedEx Express facility in Dubai). 5. Firearms, weaponry and their parts (acceptable between the U.S. and Puerto Rico). 6. Perishable foodstuffs and foods and beverages requiring refrigeration or other environmental control. 7. Live animals including insects, except as provided in the Live Animals section in the FedEx Service Guide. (Call the FedEx Live Animal Desk at 1.800.405.9052). 8. Plants and plant material, including cut flowers (cut flowers are acceptable from the U.S. to selected points in Canada and from Colombia, Ecuador and the Netherlands to the U.S.). 9. Lottery tickets and gambling devices where prohibited by law. 10. Money (coins, cash, currency, paper money and negotiable instruments equivalent to cash such as endorsed stocks, bonds and cash letters). 11. Pornographic and/or obscene material. 12. Shipments being processed under: a. Duty drawbacks claim unless advance arrangements are made. b. Temporary Import Bonds – acceptable under the FedEx International Broker Select option, for initial import only. c. U.S. State Department licenses d. Carnets e. U.S. Drug Enforcement Administration export permit. f. Letters of Credit. Shipments subject to Letters of Credit are generally prohibited, with the exception of shipments subject to Letters of Credit calling for a “courier receipt”, as defined by Article 25 of UCP 600, shipped using the FedEx Expanded Service International Air Waybill.

111 g. Certificate of Registration shipments (CF4455).

13. Hazardous waste, including, but not limited to, used hypodermic needles or syringes or other medical waste. 14. Shipments that may cause damage to, or delay of, equipment, personnel or other shipments. 15. Shipments that require us to obtain any special licenses or permit for transportation, importation or exportation. 16. Shipments or commodities whose carriage, importation or exportation is prohibited by any law, statute or regulation. 17. Shipments with a declared value for customs in excess of that permitted for a specific destination. 18. Dangerous goods except as permitted under the Dangerous Goods section of these terms and conditions. 19. Processed or unprocessed dead animals, including insects and pets. Taxidermy- finished hunting trophies or completely processed (dried) specimens of whole animals or parts of animals are acceptable for shipment into the U.S. 20. Packages that are wet, leaking or emit an odor of any kind. 21. Wildlife products that require U.S. Fish and Wildlife Service export clearance by FedEx prior to exportation from the U.S. 22. In-bond shipments destined to or being withdrawn from a Foreign Trade Zone or bonded warehouse, unless the FedEx International Broker Select option is selected for U.S. import shipments or the FedEx International Controlled Export service option is selected for U.S. export shipments.

Notwithstanding any other provision of the FedEx Service Guide, we are not liable for delay of, loss of damage to a shipment of any prohibited item. The shipper agrees to indemnity FedEx for any and all costs, fees and expenses FedEx incurs as a result of the shipper’s violation of any local, state or federal laws or regulations or from tendering any prohibited item for shipment.

112 Argentina Restriction

Currently the Government of Argentina imposes quotas for the importation of peaches, white glasses for corrective spectacles, automobile parts, paper, pulp and footwear.

Pharmaceuticals, chemical products, insecticides, veterinary products, medical devices, cosmetics, agricultural products, textiles and defence material require various approvals prior to import from various regulatory agencies.

The following commodities are prohibited via FedEx International Priority (IP) services into Argentina. However, you may be able to use another FedEx service for shipping these items. For additional shipping options, please contact your local FedEx customer service representative.

 Airline tickets, blank stock  Antiques  Bearer bonds  Collectable coins  Blank credit cards  Credit cards, other than telephone cards  Firearms, parts  Poisons (toxics)  Non-negotiable stocks  Blue ice  Radioactive and explosive material

113 Special Import Provisions

Free Trade Zones

Argentine Law authorizes the Federal Government to create one Free Trade Zone (FTZ) in each province and it delegates to the executive branch the authority to create the foreign trade or export processing zones.

There are currently 10 FTZ's in Argentina:

 La Plate Free Trade Zone (ZFLP)  San Luis Free Trade Zone  Cordoba Free Trade Zone  Tucuman Free Trade Zone  Mendoza Free Trade Zone  Santa Fe Free Trade Zone  Comodoro Rivadavia Free Trade Zone  Salta Free Trade Zone  Misiones Free Trade Zone  La Pampa Free Trade Zone

In addition to the free trade zones, Tierra del Fuego has a Special Customs Area regime, which allows duty-free entry of cap goods not produced in Argentina with an end use in designated high-priority industry as well as for assembly in local plants and sale in Argentina. Other imports through this area receive a 50 percent reduction on normal tariff rates. This area will continue to function until 2013 for non-bloc goods.

Personal Effects

Personal working items such as computers or tools of the trade must be registered with customs at the time of entry and again upon departure from Argentina.

114 Samples

Samples sent by parcel post or in other ways are treated the same as any other commercial shipment and have the same documentary requirements. The services of customhouse brokers are generally not necessary to clear shipments of samples with or without value.

Gifts

Articles imported as gifts may be subject to duties and taxes (donations to duly registered relief organizations may enter free of duties and taxes when accompanied by a Certificado de Donacion obtained from the Argentine Consulate prior to shipping).

115 General Export Clearance Information

Clearance Process

Exporting from Argentina requires knowledge of the commodity, the proper documentation and export compliance. The value of the goods, destination of the shipment and if the goods are controlled, prohibited or regulated will determine the specific export requirements.

Export Duties

Commodities exported from Argentina are subject to duties, which range from 5% to 20% (they vary per product type) of the FOB value of the commodity.

Embargoed Countries

Argentina has been a member state of the United Nations since October 24, 1945, and as such honours any import or export sanctions imposed against designated countries under the United Nations Act 1946.

Registration requirements

Exporters should be registered with the Department of Trade and Industry (DTI) or the Securities and Exchange Commission (SEC): with the city or the municipality where the business will operate, as well as with the Bureau of Internal revenue.

Document Requirements

Export documentation requirements vary on the type of goods being exported. Goods that are controlled or restricted for export may require licenses or specific certifications in addition to an air waybill and commercial invoice.

116 Argentina Export Prohibitions

The following commodities are prohibited out of Argentina:

 Logs  Certain works of art  Certain products of endangered species

117 General Export Restriction

1. APO/FPO addresses. 2. C.O.D. shipments. 3. Human corpses, human organs or body parts, human and animal embryos, or cremated or disinterred human remains. 4. Explosives (Class 1.4 explosives are acceptable for carriage to Canada, Germany, France, Japan, United Arab Emirates and United Kingdom. Note: United Arab Emirates only allows Class 1.4 explosives to be shipped hold-for-pickup to the FedEx Express facility in Dubai). 5. Firearms, weaponry and their parts (acceptable between the U.S. and Puerto Rico). 6. Perishable foodstuffs and foods and beverages requiring refrigeration or other environmental control. 7. Live animals including insects, except as provided in the Live Animals section in the FedEx Service Guide. (Call the FedEx Live Animal Desk at 1.800.405.9052). 8. Plants and plant material, including cut flowers (cut flowers are acceptable from the U.S. to selected points in Canada and from Colombia, Ecuador and the Netherlands to the U.S.). 9. Lottery tickets and gambling devices where prohibited by law. 10. Money (coins, cash, currency, paper money and negotiable instruments equivalent to cash such as endorsed stocks, bonds and cash letters). 11. Pornographic and/or obscene material. 12. Shipments being processed under: a. Duty drawbacks claim unless advance arrangements are made. b. Temporary Import Bonds “acceptable under the FedEx International Broker Select option, for initial import only. c. U.S. State Department licenses d. Carnets e. U.S. Drug Enforcement Administration export permit. f. Letters of Credit. Shipments subject to Letters of Credit are generally prohibited; with the exception of shipments subject to Letters of Credit calling for a courier receipt as defined by Article 25 of UCP 600, shipped using the FedEx Expanded Service International Air Waybill. g. Certificate of Registration shipments (CF4455).

13. Hazardous waste, including, used hypodermic needles or syringes or other medial waste.

118 14. Shipments that may cause damage to, or delay of, equipment, personnel or other shipments. 15. Shipments that require us to obtain any special licenses or permit for transportation, importation or exportation. 16. Shipments or commodities whose carriage, importation or exportation is prohibited by any law, statute or regulation. 17. Shipments with a declared value for customs in excess of that permitted for a specific destination. 18. Dangerous goods except as permitted under the Dangerous Goods section of these terms and conditions. 19. Processed or unprocessed dead animals, including insects and pets. Taxidermy- finished hunting trophies or completely processed (dried) specimens of whole animals or parts of animals are acceptable for shipment into the U.S. 20. Packages that are wet, leaking or emit an odour of any kind. 21. Wildlife products that require U.S. Fish and Wildlife Service export clearance by FedEx prior to exportation from the U.S. 22. In-bond shipments destined to or being withdrawn from a Foreign Trade Zone or bonded warehouse, unless the FedEx International Broker Select option is selected for U.S. import shipments or the FedEx International Controlled

Export service option is selected for U.S. export shipments.

Not withstanding any other provision of the FedEx Service Guide, we are not liable for delay of, loss of damage to a shipment of any prohibited item. The shipper agrees to indemnity FedEx for any and all costs, fees and expenses FedEx incurs as a result of the shipper violation of any local, state or federal laws or regulations or from tendering any prohibited item for shipment

119 Argentina Export Restriction

The following commodities are prohibited via FedEx International Priority (IP) services out of Argentina. However, you may be able to use another FedEx service for shipping these items. For additional shipping options, please contact your local FedEx customer service representative.

Certain commodities may be subject to export controls, which may require additional documentation such as:

 Export Licensing for Dual Use Goods (goods that may be used in either military or civilian application) which are controlled by the Commission Nacional de Control de Exportaciones Sensitivas y Material Belico (CONCESYMB). The commission consists of an integration of the Foreign Ministry, the Ministry of Defence and Argentine Customs.

 Sanitary, phytosanitary or safety standard certification for products such as meat, seeds, fruit, vegetables and marine goods.

 Additional products that are controlled for export include psychotropic substances and endangered fish and wildlife species.

120 Comparison of Argentina and India Export of Goods and Services

Exports of goods and services represent the value of all goods and other market services provided to the rest of the world. They include the value of merchandise, freight, insurance, transport, travel, royalties, license fees, and other services, such as communication, construction, financial, information, business, personal, and government services. They exclude compensation of employees and investment income (formerly called factor services) and transfer payments.

Year India Argentina 2002 14.5 27.7 2003 15.7 25 2004 17.6 25.3 2005 19.1 24.8 2006 21.1 24.6 2007 20.4 24.5 2008 23.8 24 2009 19.8 21.4 2010 21.5 21.7

121 30

15 India Argentina 10

0 2002 2003 2004 2005 2006 2007 2008 2009 2010

Comparison of Argentina and India Import of Goods and Services

Imports of goods and services represent the value of all goods and other market services received from the rest of the world. They include the value of merchandise, freight, insurance, transport, travel, royalties, license fees, and other services, such as communication, construction, financial, information, business, personal, and government services. They exclude compensation of employees and investment income (formerly called factor services) and transfer payments.

Year India Argentina 2002 15.5 12.8 2003 16.1 14.2 2004 19.3 18.2 2005 22.0 19.2 2006 24.2 19.2 2007 24.4 20.3 2008 28.9 20.7 2009 25.1 16.0 2010 24.8 18.4

122 35

20 India 15 Argentina

0 2002 2003 2004 2005 2006 2007 2008 2009 2010

Comparison of Argentina and India GDP growth (Annual %)

Annual percentage growth rate of GDP at market prices based on constant local currency. Aggregates are based on constant 2000 U.S. dollars. GDP is the sum of gross value added by all resident producers in the economy plus any product taxes and minus any subsidies not included in the value of the products. It is calculated without making deductions for depreciation of fabricated assets or for depletion and degradation of natural resources.

123 Year India Argentina 2002 3.8 10.9 2003 8.4 8.8 2004 8.3 9 2005 9.3 9.2 2006 9.3 8.5 2007 9.8 8.7 2008 5.2 6.8 2009 9.1 0.9 2010 8.8 9.2

6 India Argentina 4

0 2002 2003 2004 2005

124 RURAL SECTOR OF ARGENTINA

Introduction

Argentina benefits from rich natural resources, a highly literate population, an export- oriented agricultural sector, and a diversified industrial base. Although one of the world's wealthiest countries 100 years ago,

125 the country has a variety of natural resources including lead, zinc, copper, iron petroleum, uranium, and rich agricultural areas.

In the early 1990s Argentina underwent an economic boom period.

By 1997, GDP growth had reached 8 percent per year. Reforms in the economy led to increased competition and output. These reforms also attracted significant new foreign investment.

However, after repeated periods of military dictatorship, the nation faced a variety of economic problems when the first sustained period of civilian control of the government began in 1983.

By 1989, the nation had an enormous external debt, and inflation had reached a level of 200 percent per month..

Between 1992 and 1999, exports more than doubled from US$12 billion to US$25 billion. In overall terms, international trade remains only a small part of the Argentine economy.

In 1998, the nation began a severe recession that ended in 2000. In 1999, GDP fell by 3 percent, but by 2000 growth had returned at a 2 percent annual rate. However, unemployment in the nation continues to be problematic. Unemployment peaked in 1995 at 18.4 percent. The strongest areas of the Argentine economy are telecommunications, food processing, banking, energy production, and mining. Food processing alone accounted for 23 percent of GDP in industry in 1998 and is one of the few areas in which Argentina has a trade surplus.

In 1995 Argentina, Brazil, Chile, and Uruguay created a free trade area named MERCOSUR. The trade organization has dramatically lowered tariffs between the member nations with reductions in some tariffs of 100 percent. Argentina accounts for 27 percent of MERCOSUR's total GDP. Brazil is now Argentina's largest trading partner. Argentina's exports to MERCOSUR countries are expected to continue to increase and to help spur the economy.

GDP growth (8.5 pct) recovered strongly in 2010 and is expected to continue albeit more moderately (5.3 pct) in 2011, with strong demand from Argentina's main markets, Brazil and China, supporting export-oriented activity.

Tension between Argentina and the IMF - particularly due to the unresolved issue of the debt renegotiation - led to the postponement of the stand-by agreement in August 2004.

126 Negotiations with the IMF resumed following a successful debt swap in February 2005 and the US$9.5 billion owed to the IMF was repaid in January 2006.

Argentina successfully renegotiated its large debt with the majority of private creditors in 2005 and 2010.

Argentina – Rural Sector

The rural life in the country that outstands for its huge lands and agricultural and cattle breeding tradition. Every region features rural establishments, although the highest concentration is found in Buenos Aires, Mendoza and Patagonia, mainly in the province of Santa Cruz. Each one has characteristics and options closely related to its physical environment, offering visitors the chance of enjoying natural landscapes mingled with typical food and rural culture.

The rural sector is important for the macro economy and micro economy in Argentina. Agriculture and agro based industry account for 57 percent of all exports, 36 percent of employment, and 18 percent of GDP. The rural poor and non poor receive the largest share of their total income—54 and 68 percent respectively—from agricultural activities such as farming and agricultural labor. The rural nonfarm sector is also important for income and employment. The poor and non poor in dispersed rural areas receive less than 20 percent of their total income nonfarm. Some of the important aspects of rural sectors are as follows :-

1) Poverty 2) Literacy 3) Agriculture 4) Population

127 Poverty

In Argentina

Poverty rate for middle income class 33 %

Poverty in rural according to UBN 19 %

% of rural population out of total 11 %

Year % of poverty Year % of poverty 1991 30 1992-96 37 2001 33 2000 30 2003 19 2004-08 28

In 2001, rural poverty is significantly higher in rural areas than in urban areas. One poverty indicator such as unmet basic needs (UBN) reveals that; 33 percent of the rural population in Argentina have UBN—compared 14 percent in urban areas. By the income measure of extreme poverty nearly 40 percent of rural households are in extreme poverty, compared to just over 30 percent in urban areas.2 The rural extreme poor account around 1.2 million people or around 200,000 households.

0 2003 2001 1991

In India

The Indian family unit is often large, which can amplify the effects of poverty. Also, the caste system still prevails in India, and this is a major reason for rural poverty - people from the lower casts are often deprived of the most basic facilities and opportunities. The

128 government has planned and implemented poverty eradication programs, but the benefits of these programs are yet to bear fruits. Since its independence, the issue of poverty within India has remained a prevalent concern.

% of population living below poverty line 37 %

% rural population in difficult physical and financial predicament. 22 %

% urban population in difficult physical and financial predicament. 15 %

40 35 30 25 20 15 10 5 0 jan 92-96 Jan-00 jan 04-08

Conclusion: Poverty data of both countries on 2003 shows data India had less poverty than Argentina. But during 1990-1996 Argentina was in better position.

Literacy literacy has been commonly defined as the ability to read and write at an adequate level of proficiency that is necessary for communication. More recently however, literacy has taken on several meanings. Technological literacy, mathematical literacy, and visual literacy are just a few examples. While it may be difficult to gauge the degree to which literacy has an impact on an individual’s overall happiness, one can easily infer that an increase in literacy will lead to the improvement of an individual’s life and the

129 development of societies. A survey recently published by UNICEF stated that 9.2% of children in Argentina are born to an illiterate or severely undereducated mother. The findings, from their annual study ‘The State of the World’s Children’, seem shocking for a country which supposedly has the highest literacy rate in the continent.

Year Literacy Year Literacy (Argentina) (India) 1940 77 1990 41 1960 82 1998 42 1990 87 2001 58 2011 62

While in developed nations, the majority of the population over the age of 17 possesses basic literacy skills in reading and writing,

Below diagram shows the literacy rate of rural Argentina in 20th century

In Argentina

90 85 80 75 70 1990 1960 1940

In India

 Literacy rate of India has shown as improvement of almost 9 percent, As per Population Census of India 2011. It has gone up to 74.04% in 2011 from 65.38% in 2001, thus showing an increase of 9 percent in the last 10 years. Bihar with 63.08% literacy rate is the last in terms of literacy rate in India.

130 Male literacy rate 82.14 % Female literacy rate 65.46 % % of rise in literacy rate in 2011 from 2001 8.66 % State having top literacy rate Kerala (93.9 %) Lakshadweep and Mizoram are at second and third position 92.3 & 91.06 %

100

0 1990 1998 2001 2011

Conclusion: In literacy rate India was always behind Argentina and presently also Argentina has literacy rate of more than 90%.

Agriculture

In Argentina

. Argentine agriculture is relatively capital intensive, today providing about 7% of all employment, and, even during its period of dominance around 1900, accounting for no more than a third of all labour. Having accounted for nearly 20% of GDP as late as 1959, it adds, directly, less than 10% today. Agricultural goods, however, whether raw or processed, still earn over half of Argentina's foreign exchange and, arguably, remain an indispensable pillar of the country's social progress and economic prosperity.

Employment provided by agriculture 7 % Contribution to GDP in 1959 20 % Foreign owned farmland 10 -15 % Amt of exports (one fourth amount), were composed of US 86 billion (2011) unprocessed agricultural primary goods, mainly soybeans, wheat and maize.

131 Year Agriculture Year Agriculture (Argentina) (India) 1960-64 - 1950-51 51 1965-69 9 1965 42 1970-74 11 1976 38 1975-79 7 1985 32

0 1960-64 1965-69 1970-74 1975-79

In India

. Agriculture in India is a major economic sector and it creates plenty of employment opportunities as well.

 India agriculture has an extensive background which goes back to 10 thousand years.  At present, in terms of agricultural production, the country holds the second position all over the world.  In 2007, agriculture and other associated industries such as lumbering and forestry represented around 16.6% of the Gross Domestic Product of the country. In addition, the sector recruited about 52% of the entire manpower.  Regardless of the fact that there has been a gradual slump in its contribution to the gross domestic product of the country, India agriculture is currently the biggest industry in India.

132 Contribution to GDP

60 40 20 0 1950/51 1965 1976 1985

Conclusion: so the above data shows that contribution Indian agriculture is far more than the Argentina’s. Population

It refers to the total number of people living within a defined area, or it can refer to a group of people from defined areas that have similar characteristics The structure of a population describes the relative numbers of people with similar characteristics within a population, for example, age groups, sex, and ethnicity. The structure of a population shows how the subgroups within it affect its composition and characteristics. For example, it shows the percentages making up the different age groups of the population.

Year Population Year Population (Argentina) (India) 2001 9.64 2001 72.10 2002 9.38 2002 71.90 2003 9.12 2003 71.70 2004 8.86 2004 71.50 2005 8.6 2005 71.30 2006 8.4 2006 71.02 2007 8.2 2007 70.74 2008 8 2008 70.46 2009 7.8 2009 70.18 2010 7.7 2010 69.90

Population structure changes over time as people age, but also because of births, deaths

133 and migration. Changes to social, environmental and economic conditions can also influence population structure. Total population of Argentina as estimated in the year 2006 in the month of July was about 39,921,833 persons. Majority of the population resides in the Buenos Aires province. Only 0.5 5 of the total population comprises of the indigenous population of Argentina. These people are the Collas, Mapuches, Tobas, Chiriguanos and Matacos. The current population of Argentina is around 36 million of which almost half live in the province of Buenos Aires

In Argentina

Population as per % of total population 12.00

10.00

8.00

6.00

4.00

2.00

0.00 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

In India

India, with 1,220,200,000 (1.22 billion) people is the second most populous country in the world. While China is on the top with over 1,350,044,605 (1.35 billion) people. The figures show that India represents almost 17.31% of the world's population, which means one out of six people on this planet live in India. Although, the crown of the world's most populous country is on China's head for decades, India is all set to take the numero-uno position by 2030. With the population growth rate at 1.58%, India is predicted to have more than 1.53 billion people by the end of 2030.

 More than 50% of India's current population is below the age of 25.  And over 65% below the age of 35.  About 72.2% of the population lives in some 638,000 villages and the rest 27.8% in about 5,480 towns and urban agglomerations.

134 Population as per % of total population 72.50 72.00 71.50 71.00 70.50 70.00 69.50 69.00 68.50 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Conclusion: Major issue of India was always been its population, it is world’s second most populated country.

 Overview of Trade & Commerce:

Argentina benefits from rich natural resources, a highly literate population, an Export- oriented agricultural sector, and a diversified industrial base. Although one of the world's wealthiest countries 100 years ago, Argentina suffered during most of the 20th century from recurring economic crises, persistent fiscal and current account deficits, high inflation, mounting external debt, and capital flight. A severe depression, growing public and external indebtedness, and a bank run culminated in 2001 in the most serious economic, social, and political crisis in the country's turbulent history. Interim President Adolfo RODRIGUEZ SAA declared a default - the largest in history - on the government's foreign debt in December of that year, and abruptly resigned only a few days after taking office. His successor, Eduardo DUHALDE, announced an end to the peso's decade-long 1-to-1 peg to the US dollar in early 2002. The economy bottomed out that year, with real GDP 18% smaller than in 1998 and almost 60% of Argentines under

135 the poverty line. Real GDP rebounded to grow by an average 8.5% annually over the subsequent six years, taking advantage of previously idled industrial capacity and labor, an audacious debt restructuring and reduced debt burden, excellent international financial conditions, and expansionary monetary and fiscal policies. Inflation also increased, however, during the administration of President Nestor KIRCHNER, which responded with price restraints on businesses, as well as export taxes and restraints, and beginning in early 2007, with understating inflation data. Cristina FERNANDEZ DE KIRCHNER succeeded her husband as President in late 2007, and the rapid economic growth of previous years began to slow sharply the following year as government policies held back exports and the world economy fell into recession. The economy has rebounded strongly from the 2009 recession, but the government's continued reliance on expansionary fiscal and monetary policies risks exacerbating already high inflation.

Definition: This entry briefly describes the type of economy, including the degree of market orientation, the level of economic development, the most important natural resources, and the unique areas of specialization. It also characterizes major economic events and policy changes in the most recent 12 months and may include a statement about one or two key future macroeconomic trends

136 Present Trade Relations and Business Volume of different products with India

Argentina has world's third largest shale gas reserves.

IFFCO of India has invested 25 million dollars in a Canadian company Americas Petrogas which has a shale gas block in Argentina. They are looking for financial and technological partners for exploration and production.

Energy

Argentina is a pioneer and largest user of CNG technology. Argentine companies have been exporting CNG conversion kits and technology to many countries. Galileo, a leader in Argentina in CNG sector has supplied technology and equipments to India.

Industry

The Argentine manufacturing industry is relatively large and diversified. It is strong in food processing, automobiles, auto parts, consumer goods, pharmaceuticals, paper and metallurgy. Argentina ’s industrial production include :

o 660,000 automobiles o 5.1 million tons of steel o 465,000 tons of aluminium o 1.2 million tons of paper o 1.9 million tons of sugar o 170,000 tons of PVC o 540,000 tons of polyethylene

In 2008, 743,000 motorcycles were sold in Argentina, 9% more than in 2007 . Only 50,000 units (7%) were of national production, another 33% (245,000) were locally assembled and the other 447,000 were imported complete from China (most of them), Brazil, Japan and Taiwan

Autoproduction by companies in 2010

 Peugeot –Citroen 140000  General Motors - 110000  Ford - 95000  Toyota - 85000  Volkswagen - 72000

137  Fiat – 57000

60 percent of automobiles produced in Argentina are exported.

Forty percent of parts used in vehicle manufacturing plants in Argentina are locally made.

Pharmaceuticals

The Argentine pharmaceutical market is valued at 4.2 billion dollars. There are 110 laboratories in the country, of which 17 are international laboratories and the rest are national. Market leaders are Bayer, Bagó and Roemmers. Foreign companies have a share of 54% of the market while the local companies control 46%. Exports in 2010 were 800 million dollars. Most of the exports go to Latin America.

The top ten pharma companies are : Roemmers, Bagó, Ivax Argentina, Gador, Elea, Sanofi Aventis, Bayer, Montpellier, Pfizer and Phoenix.

The Argentine regulatory agency ANMAT allows import of pharmaceuticals only from 26 countries mentioned in the Presidential Decree 150 of 1992. Since India is not in this list, imports are not possible. The Government of Argentina has been requested to include India in their list. However, Argentine companies import substantial quantities of bulk drugs from India.

Textile Industry

Latest information on Argentine Textle Industry and Argentine imports of Indian Textiles.

Banking

The banking sector of Argentina after having gone through the turmoil during the crisis in 2002 is now on a more stable foundation through better regulatory measures, reforms and mergers.

Top ten banks (in the order of their ranking)

1. BANCO DE LA NACION ARGENTINA www.bna,com,ar 2. BANCO DE LA PROVINCIA DE BUENOS AIRES www.bapro.com.ar 3. BANCO GALICIAwww.bancogalicia.com.ar 4. BANCO SANTANDER RIOwww.bancorio.com.ar 5. BANCO FRANCÉSwww.bancofrances.com.ar 6. BANCO CIUDAD DE BUENOS AIRESwww.bancociudad.com.ar 7. BANCO MACROwww.bansud.com.ar 8. BANCO HSBCwww.hsbc.com.ar

138 9. BANCO HIPOTECARIOwww.bancohipotecario.com.ar 10. BANCO CREDICCOPwww.crediccop.com.ar

India - Argentina Business

Bilateral Trade figures for 2011

(in million dollars)

Argentina Jan-Sep 2011 Jan-Sep 2010 India´s Exports 408 341 India´s Imports 1112 1650

Argentina 2010 2009 India´s Exports 496 342 India´s Imports 2032 876

USD in million)

Year 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 2000 India’s 496 342 492 384 303 261 160 136 85 151 143 exports India’s 2032 876 836 859 929 739 567 558 404 446 442 imports

The trade is very much below the potential. During the visit of the President of Argentina to India in October 2009, the two Governments set a target of 3 billion dollars of bilateral trade by 2012.

Exports from India to Argentina (2010)

Items In million US $ Organic chemicals 164 Lubricants 49 Vehicles and autoparts 42

139 Machinery 30 Sound and image divices 24 Synthetic Fibers 18 Garments 16 Bulk drugs 15 Dyes 13 Iron and steel 12 Plastics 11 Cotton yarn 11 Rubber manufactures 9 Optical instruments 5 Minerals and gems 4 Handicrafts 3.5 Carpets and rugs 3 Saddlery 2.5 Leather products 2.2 Artificial jewellery 1.5 Inorganic chamicals 1.2

Imports of India from Argentina (2010)

Items In million US $ Soybean oil 1843 Sunflower oil 36 Leather 30 Air pumps and compressors 16 Sugar 15 Corn 13 Ferroalloys 9 Wool 7 Cosmetics 5.2 Photography products 5 Water pumps 4.5 Salt and derivates 4 Dyes for leather industry 3.8 Precision instruments 3.6 Pharmaceuticals 2 Iron and Steel 1.7 Candies 1.4

140 Major Argentine edible oil exporters to India

 Cargil  Molinos Rio de la Plata  Vicentin  Luis Dreyfus  AGD

Exports

Mahindra Tractors and Royal Enfield Motorcycles were launched in Argentine market in March 2009. Bajaj motor cycles are sold in Argentina.

Imports

India’s imports of soy and sunflower oil as well as copper are expected to increase steadily in the years to come. Wheat would be an import item as and when there is shortfall in Indian production. Argentine companies have been supplying CNG kits to India, wine, wool, leather, olives and dried vegetables and fruits.

141 India. The Argentine agribusiness companies are willing to grow these, attracted by the large and growing market in India.

It is advisable for Indian companies to think beyond imports and go in for acquisition of land in Argentina to grow oil seeds, wheat and pulses. There is no restriction on foreign investment in land in Argentina. A number of foreign companies and individuals own thousands of hectares of land. Sterling Group of NRI Sivasankaran has acquired an olive farm of 1700 hectares in the Catamarca province of Argentina. A Non-Resident Indian company ‘Olam’ has leased 17,000 hectares of land in Argentina to produce peanuts. Encouraged by the success of this venture, they are now planning to grow wheat, soya and pulses with additional leasing of land. Land is available in lots of hundreds and thousands of hectares. SEA had sent two delegations to Argentina (also Uruguay, Paraguay and Brazil) in 2006 and 2007 to study the possibility of acquisition of land for production of oilseeds. They have already formed a consortium of 14 companies which proposes to invest in agricultural land in the region. To start with, they have a plan to invest 40 million dollars in Uruguay. Besides SEA of India and STC, private sector groups have also shown interest in acquisition of land in Argentina.

India is going to be under more pressure for agricultural land in future. India´s population increases by 15 million every year and it adds a new Argentina (40 million) every 32 months. On the other hand, agricultural land is diminishing because of the increasing use for residential, industrial and commercial purposes. This is in contrast with Argentina which has a small population of 40 million with an area almost equal to that of India. Besides the large area, the Argentine productivity of grains and oilseeds are three times that of India. For example, average yield per hectare of soya in India is 900 kg while the Argentine average is 3 tons. In India, the subsistence farmers with their average land holding of just a few acres are unable to invest and increase productivity significantly. But the Argentine farmers who hold thousands of hectares of land do farming commercially and professionally and are able to invest in innovation and productivity.

Argentina is the third largest exporter of bio-diesel in the world. They exported over one million tons in 2008 and are increasing production capacity to 1.6 million tons by 2010. India can also consider imports from Argentina.

142 There are thousands of hectares of land available in the warmer northern parts of Argentina where jatropha can be grown and used to produce bio-diesel. The Indian companies can also invest in commercial forestry in Argentina to take back to India wood and paper pulp which are imported by India regularly.

Shipping

Freight Rates from

Mumbai to Buenos Aires:

20 foot container: USD 1200 40 foot container: USD 1900

Goods can also be transhipped through Durban in South Africa

143 History

Five phases in the development of computing technology:

Sr.no Phases Detail 1. Mainframe and The first most area was ruled by IBM and their minicomputer computing. mainframe computers and these computers take whole room and teams are required to run them,IBM supplied the hardware and software 2. Personal computers Personal computers began in 1965 as microprocessor started to compete with mainframe and mini computer and the process of decentralizing computing power from large data centers to smaller offices 3. Client/server networks Client/server in which computers on a common network were able to access shared information on a server 4. Enterprise computing Enterprise area enabled by high speed networks, tied all aspects of the business enterprise together offering rich information access encompassing the complete management structure.

5. Cloud computing Cloud computing area of information systems employs networking technology to deliver applications as well as data storage independent of the

144 configuration, location or nature of the hardware.

145 MANGEMENT INFORMATION OF ARGENTINA

INTRODUCTION

Argentina is the nation among the richest in the world, with the largest middle class in Latin America, yet that entered the twenty-first century seething with economic crisis and frustration.

Argentina is a beautiful country that contains stunning natural wonders- desert, mountains, lakes, glaciers, falls and oceans; a country that is refreshingly European with a passionate culture, not as European as it looks but offers a European-flavored sophistication.

It is a country of misery and squalor surrounded by large extensions of fertile land- the other Argentina. For most of us, Argentina is the birthplace of football legend Diego Maradona - a country where an interest in soccer may be all one to make friendship with local locations.

Argentina is a constitutional republic and representative democracy. The government is regulated by a system of checks and balances defined by the Constitution of Argentina, which serves as the country's supreme legal document.

The seat of government is the city of Buenos Aires, Argentina is regulated by the Congress. Suffrage is universal, equal, secret and mandatory.

The armed forces of Argentina comprise an army, navy and air force, and number about 70,000 active duty personnel, one third fewer than levels before the return to democracy in 1983. The President is commander-in-chief of the armed forces, with the Defense Ministry exercising day-to-day control.

There are also two other forces; the Naval Prefecture (which patrols Argentine territorial waters) and the National Gendarmerie (which patrols the border regions); both arms are controlled by the Interior Ministry but maintain liaison with the Defense Ministry.

146 Sr. No. Particular India Argentina Gujarat

Demographic Comparison of India, Argentina & Gujarat

147 1 Cristina Dr Kamla President Pratibha Patil Fernandez Beniwal 2 Population 1,189,172,906 41,769,726 60,383,628 3 Capital City New Delhi Buenos Aires Gandhi agar 4 Largest city Mumbai Buenos Aires Ahmadabad 5 Life Expectancy 66.8 76.95 64.1 6 Human Development 0.60 0.86 0.62 Index 7 Literacy Rate 61% 97.2% 79.31% 8 GDP per capita $3500 US $14700 US $1350 9 Corruption 3.4 2.9 Perception Index Gregorio Perez 10 Wealthiest Mukesh Ambani Company & Mukesh Ambani Citizens ($19.5bn US) family ($1.8bn ($19.5bn US) US) 11 Unemployment 10.8 7.9 6.5 Rate 12 Independence date 15 August 1947 9 July 1816 15 August 1947 HINDU 89.09% MUSLIM Hindu 80.5%, nominally Roman 13 9.06% Muslim 13.4%, Catholic 92% Jain Christian 2.3%, (less than 20% 1.04% Religions Sikh 1.9%, other practicing), Christian 1.8%, unspecified Protestant 2%, 0.56% 0.1% (2001 Jewish 2%, other Sikh 0.09 census) 4% % Buddhist 0.04% Hindi 41%, Bengali 8.1%, Telugu 7.2%, Marathi 7%, Tamil 5.9%, Urdu 5%, Gujarati Spanish (official), 14 Gujarati 4.5%, Hindi Languages Italian, English, Kannada 3.7%, English German, French Malayalam 3.2%, Oriya 3.2%, Punjabi 2.8%, Assamese 1.3%, Maithili 1.2%, other 5.9%

148 15 Area 3,287,263 km sq 2,780,400 km sq 196,024 km2 16 Coastline 7,000 km 4,989 km 1600 km 17 External Debt $238,000,000,000 $128,000,000,000 $334.9 billion

149 DATA OF 2012

Sr.no Topic India Argentina 1 Capital cities New Delhi Buenos Aires 2 Head of the state President Pratibha President Cristina PATIL FERNANDEZ DE KIRCHNER 3 Head of Government Prime Minister President Cristina Manmohan SINGH FERNANDEZ DE KIRCHNER 4 Birth rate 20.97% 17.54% 5 Death rate 7.48% 7.38% 6 Unemployment rate 10.80% 7.90% 7 Labor force 4,78,300,000 16,620,000 8 Inflation rate 11.70% 22.00% 9 Import annual (us $) 327,000,000,000 56,440,000,000 10 Budget 170,700,000,000 87,630,000,000 11 GDP(US $) 4,060,000,000,000 596,000,000,000 12 Export annual (us $) 201,000,000,000 68,500,000,000 13 Population growth 1.34% 1.02% 14 Population 1,173,108,018 41,769,726 15 Literacy total per. 61.00% 97.20% 16 Currency Indian rupee (INR) Argentine peso (ARS) 17 Boarder country Pakistan, Brazil, Paraguay, Bangladesh, Uruguay China 18 GDP BY SECTOR Agriculture: 19% Agriculture: 5% industry: 26.3% industry: 28% Services:54.7 % Services: 67% 19 Industrial Growth 7.9 8% Rate 20 Currency Code INR ARS 21 Independence 15th Aug 1947 9th July 1816 (from England) (from Spain)

150 COMPARISON OF INDIA & ARGENTINA GDP BY SECTOR

ARGENTINA GDP BY SECTORS

28%

indusries services agriclture

67%

151 INDIAN GDP BY SECTORS

19% 26%

indusries services agriclture

55%

152 List of leading Companies of India, Argentina & Gujarat

Sr. No. India Argentina Gujarat

1 Cognizant Telefonica De Wipro Limited

Aegis Group 2 Nortal Inversora Trinity Infotech Crisils Erevna VB Soft India 3 Mercadolibre Limited Copal Partners ACE software 4 IMPSAT Export Limited Ctellen 5 El Sitio Vadhvan Infosys Wipro 6 Boldt Tirth Infotech TICS Technology 7 TCS India Pvt Ltd

Advantages and Disadvantages of Management Information System

ADVANTAGES DISADVANTAGES Companies are able to highlight their While information technology may have strengths and weaknesses due to the streamlined the business process it has also presence of revenue reports, employees' created job redundancies, downsizing and performance record etc. outsourcing The availability of the customer data and Though information technology may have feedback can help the company to align made communication quicker, easier and their business processes according to the more convenient, it has also bought along needs of the customers. privacy issues Information is considered to be an Industry experts believe that the internet has made job security a big issue as since important asset for any company in the technology keeps on changing with each modern competitive world. day

153 SWOT Analysis of Management Information System in INDIA, ARGENTINA, And GUJARAT

Sr.No PATICULARS ARGENTINA INDIA 1. STRENGTH boom of information Following Quality technology Standards such as ISO 9000, SEI CMM etc. 2. WEAKNESS low security Contribution of IT sector to India 's GDP is still rather small 3. OPPORTUN-ITY More effecient and High quality IT more user, friendly education market interferences 4. THREATS Security concerns Lack of data security system

Types of Information System in Argentina

 Management Information System (MIS)

It produces fixed, regularly scheduled reports based on data extracted and summarized from the firm’s underlying transaction processing systems to middle and operational level managers to identify and inform structured and semi- structured decision problems.

 Decision Support System (DSS)

It is a computer program applications used by middle management to compile information from a wide range of sources to support problem solving and decision making.

154  Executive Information System (EIS)

It is a reporting tool that provides quick access to summarized reports coming from all company levels and departments such as accounting, human resources and operations.

 Marketing Information System

It is a Management Information System designed specifically for managing the marketing aspects of the business.

 Office Automation System (OAS)

It supports communication and productivity in the enterprise by automating work flow and eliminating bottlenecks.

 School Management Information systems (SMIS)

It covers school administration, often including teaching and learning materials related to school.

Five module of decentralized approach

MODULE TOPIC personnel management module recruitment, legal and administrative decisions, salaries, pension, etc. academic management module registration, courses, examinations, classrooms, etc student management module follow up of newcomers, continuing students and graduates, etc.

155 financial management module accounting, budgeting, payments, cash flow, cost analysis, etc Infrastructure management module buildings, laboratories, workshops, equipment, etc.

Argentine Companies in India

Sr. No. Company Information The Argentine engineering company, specializing in hydroelectric projects, has an office in Gurgaon. They IMPSA 1 are exploring opportunities for projects as well as supply of power generation equipments such as turbines. They have a manufacturing unit in Malaysia An Argentine pharma company has plans to set up a Biosidus plant in India for production of biotech pharmaceuticals 2 for Indian and Asian markets. They are already exporting over 3 million dollars a year to India. The Argentine multinational company manufacturing Arcor 3 chocolates and candies is opening an office in India in 2012 and plans to set up a plant in future. The leading Argentine pharma company has an office in Hyderabad. They have a joint venture operation with Ranbaxy to market their products in Thailand. Some Bago Argentine companies have shown interest in investments 4 and joint ventures in India in food processing and auto parts.

Joint Ventures with India

There are 12 Indian Companies which have established operations in Argentina. They provide employment to 7000 Argentines. Seven of them are in IT, two in agro-chemicals, one in pharma, one in cosmetics and one in electrical lighting.

 TCS has a unit employing 350 Argentines in Buenos Aires and has plans to increase the staff strength to about 1000.

 Cognizant has IT and BPO operations employing 300 staff.

156  Aegis Group from India has acquired Argentine BPO Company Actionline in 2010 which employs 5,000 people in Buenos Aires, Cordoba, Tucuman and Bahia Blanca.

 CRISIL’s IREVNA has set up a KPO (Knowledge Process Outsourcing) unit in Buenos Aires for financial and investment research services employing 70 Argentine staff.  Copal Partners an Indian Financial Research company has established an office in Buenos Aires in the second half of 2010. They have plans to hire 50 staff.

 Ctellen a Mumbai-based IT company, has bought an Argentine start-up company "Net People" which specializes in software for mobile phones.

 Wipro opened an IT centre in Buenos Aires since 2010.

Competitive advantages for BPO, KPO and Software Development

 Argentina has one of the highest literacy rates in Latin America with ample availability of qualified and skilled manpower, some of whom are proficient in English.

 The cost of operations and salaries are much below to those in Mexico, Brazil and Chile. The local salaries are somewhat closer to Indian salaries in some cases.

 Indian IT, BPO and KPO companies can offer services to their North American clients in the same time zone to avoid night shift operations in India.

 The Buenos Aires City Government as well as other city and provincial governments are developing new technology parks and are giving incentives and facilities for IT companies.

157 Argentina companies acquired by India  Havells Sylvania of India has operations in Argentina in distribution and sale of their lighting products.

 Godrej has acquired two Argentine cosmetic companies in 2010: Issue Group and Argencos. They produce hair colour and other cosmetic products. They also export to other countries in the region.

 Reliance has formed a joint venture with an Argentine oil company Pluspetrol (The consortium includes Westwood of Australia) and they have won a concession in Peru for oil exploration and production.

 Srishti Group of Kolkata has signed (in 2009) a MoU with the provincial government of Misiones to build a “Vedic Hotel” in the tourist resort of Iguazu.

 Ashok Leyland has signed a MoU with Plaza Group of Argentina for joint venture in production of buses and trucks.

 Tata Motors is exploring possibilities of joint ventures in vehicle production in Argentina.

 Sonalika Tractors has signed a MoU with an Argentine company for tractors and agricultural machinery.

 ONGC (OVL) has signed MoU With ENARSA, Their Argentine Counterpart for possible joint ventures in Argentina For oil exploration.

 Kirloskar is planning to put up assembly plant In Argentina For manufacture of pumps.

158  IFFCO is the Gujarat Based fertilizer cooperative company in talks with Americas Petrogas of Canada to set up a urea plant using gas produced in Lapampa Region of Argentina.

IT Companies in India

Sr. No. Company Turnover Growth Rate Work Force

1 Aegis Group $50 Million 65% 50000

2 Cognizant $6.2 Billion 40% 137700

3 Wipro $290 Million 45% 120000

4 TCS $6.3 Billion 18.37% 226751

5 Copal Partners $3.8 Billion 20% 30000

IT Companies in Argentina

Sr. No. Company Turnover Growth Rate Work Force

1 Telefonica De $1.21 Million 14% 161029

2 Nortel Inversora $1.37 Million 19.20% 47000

3 Mercadolibre $11.49 Billion 25.01% 1633

4 Impsat $10 Million 12.9% 1251

5 Hexacta $9 Million 10.32% 25

159 Scope of Indian industries in Argentina

 IT Sector

The IT sector has started growing in recent years. It employed about 50,000 people and had a turnover of 2.5 billion dollars in 2009 increased from 300 million dollars in 2006 to over 500 million dollars in 2009.

The Argentine software industry´s ambition is to increase turnover to 7 billion dollars by 2016 including exports of one billion dollars and employment to 150,000 peopleThe IT sector has started growing in recent years. It employed about 40,000 people and had a turnover of 2 billion dollars in 2011.

The Argentine software industry´s ambition is to increase turnover to 7 billion dollars by 2016 including exports of one billion dollars and employment to 150,000 people.Indian companies have shown interest in investment in the shale gas resources of Argentina.

Argentina is the third largest exporter of bio-diesel in the world. They exported over 1.5 million tons in 2011 and are increasing production capacity to 3.5 million tons by 2012.India can also consider imports from Argentina. The Indian companies can also invest in commercial forestry in Argentina to take back to India wood and paper pulps which are imported by India regularly.

 Pipe industry

The lower penetration levels Offer a Huge Scope for Indian Pipe Companies. The Indian pipe industry with presence across all categories of pipes like steel, cement, PVC, is a among top three manufacturing hub after Japan &Europe Pipes can be classified into steel pipes, saw pipes, seamless pipes, ERW pipes, concrete pipes, cement pipes, cylinder pipes.

160 Here is a list of some of the leading Pipe companies of India:

1 Welspun Gujarat 2 Man Industries 3 Jindal 4 Finolex 5 Indian Hume Pipes 6 Maharashtra Seamless

 Textile industries

The textile and apparel sector has shown significant growth since 2002. During 2004, the textile sector grew 75 percent, the highest growth recorded for any industry sector in the Argentine economy that year.

The total Argentinean textile market is estimated to be worth US$ 12 Billion. The clothing industry of Argentina is expected to grow steadily in the coming years in view of the growing demand for high fashion garments and its exports and the dynamic local retail sector consisting of local and foreign players. Argentina’s clothing preferences have leaned towards designs and brand names which are important, especially to the younger generation who are influenced by the US life styles and friends.

The Apparel industry is fragmented and more than 65% is run by small family units employing on an average 50 people.

According to the Argentine Apparel Industrial Chamber, annual production of clothing items is valued at US$2.27 billion. The sector boasts about 11,600 manufacturing and design companies and 30,100 retail stores.

161 In terms of supplying the domestic market, there is a mix of methods applicable to the industry. Lower production costs have led companies from Brazil to install plants in Argentina.

Most local firms carry out their manufacturing activity (raw materials and labor) in Argentina; other companies import fabrics, and/or send their designs overseas for manufacturing and receive the finished product .

Argentina has traditionally had a strong middle class segment. However, since the end of the last decade, due to a changing socio-economic scenario, the composition of the population has changed in terms of purchasing power and lifestyle.

According to CCR Market Consultants, the Argentine population (39 million approximately) can be segmented as follows:

1. Upper Class: 5% 2. Upper Middle Class: 5% 3. Middle-Middle Class: 20% 4. Lower Middle Class: 30% 5. Lower Class: 40%

Since Argentina’s economy is expected to continue growing in the coming years due to rising consumption, increased general purchasing power and rapidly growing inflows of tourists buying Argentine textile and apparel products, there is good scope for Indian textile companies to increase exports to this country.

Argentines are tough negotiators and personal relationships are important to develop before business is done. In addition, it should also be remembered that the pace of business in Argentina is slow and Argentines often need several meetings and extensive discussion to finalize deals.

162 RETAIL SECTOR OF ARGENTINA

Economic Overview of Argentina

Overview:

In 1991, it initiated a series of programs which provided a fixed exchange rate between the peso and the U.S. dollar and ultimately reformed the banking system. This dramatically lowered inflation and helped stabilize the economy. The government in 2001 continued an economic program which raised taxes and cut government spending in an effort to lower the nation's budget deficit and overall debt. Argentina suffered during most of the 20th century from recurring economic crises, persistent fiscal and current account deficits, high inflation, mounting external debt, and capital flight.

A severe depression, growing public and external indebtedness, and a bank run culminated in 2001 in the most serious economic, social, and political crisis in the country's turbulent history. Interim President Adolfo RODRIGUEZ SAA declared a default - the largest in history - on the government's foreign debt in December of that year, and abruptly resigned only a few days after taking office. His successor, Eduardo

163 DUHALDE, announced an end to the peso's decade-long 1-to-1 peg to the US dollar in early 2002.

The economy has rebounded strongly from the 2009 recession, but the government's continued reliance on expansionary fiscal and monetary policies risks exacerbating already high inflation.

Monetary sector: The Central Bank has also been adopting expansionary monetary policy to instigate growth. The CB will soon be forced to tighten monetary policy in order to contain inflation.

164 Growth Rate: The Gross Domestic Product (GDP) in Argentina expanded 2.50 percent in the second quarter of 2011 over the previous quarter. Historically, from 1993 until 2011, Argentina's average quarterly GDP Growth was 0.96 percent reaching an historical high of 3.70 percent in March of 2003 and a record low of -5.70 percent in December of 2001. Argentina is the third largest national economy in Latin America. Argentina has abundant natural resources, a well-educated population, an export-oriented agricultural sector and a relatively diversified industrial base. Domestic instability and global trends, however, contributed to Argentina's decline from its noteworthy position as the world's 10th wealthiest nation per capita in 1913 to the world's 47th wealthiest in 2008. This page includes: Argentina GDP Growth Rate chart, historical data, forecasts and news. Data is also available for Argentina GDP Annual Growth Rate, which measures growth over a full economic year.

Nominal GDP (2010): 310 bil USD. GDP to grow 5.0% in 2011.

Population: 41,769,726 (July 2011 est.) Total Trade/GDP (2010): 37 %

Currency: Argentine Peso (ARS)

Exchange regime: Managed float

165 Economic Indicators- 1.1

Particulars 05-09 Avg. 2009 2010 2011

GDP (% growth, real) 8.4 0.8 8.6 5.0

Inflation (% chg, pa avg.) 8.5 6.3 11.0 12.5

Fiscal Balance (% of 1.7 -0.6 -2.5 -3.1 GDP) Exports (%, comp. annual 18.5 -20.5 18.9 8.3 growth)

Imports (%, comp. annual 33.0 -32.0 36.6 16.0 growth)

Current Account (% of 2.7 3.7 2.1 1.3 GDP) Reserves (months of curr. 6.9 9.4 8.0 7.2 debits) External Debt (% of 63.2 38.3 34.4 31.9 GDP) Debt Service Ratio (due) 26.6 14.5 12.9 11.3

Exchange Rate (to USD; 3.1 3.8 3.9 4.1 eoy)

166 PESTLE ANALYSIS OF ARGENTINA

POLITIC

A. Christina Fernandez De Kirchner- President since 2007, she decided to enforce a strong state control on:

1. transports (railway, national air lines, aerospace company) 2. price of food, water and energy 3. service and industrial sector (like banks, steel maker and media). This involved in a big inflation and withdrawal of foreign investments.

B. Lack of discipline on fiscal policy and lack of reliability of inflation data

C. importers are subject to tax on income gained in Argentina. The tax applicable to resident companies and branches set up in this country is 35% of total earnings. The VAT is 21 %, Moreover importers have to pay: Statistics Duty (0.5% on cost, insurance and freight - CIF up to USD 1,750) and in some cases, Destination Confirmation Tax (2% of CIF) and Income Tax (usually 3% in most cases).

D. the government actually is stable but the request of markets (for the future) for less state interventionism and the recent health conditions of Kirchner open scenarios of uncertainty.

ECONOMIC

A. Argentina recorded a strong economic recovery in 2010, driven by renewed consumer and private investor confidence spurred by accommodating policies and the rise of prices for exported raw materials and farm sector.

B. High inflation Rate (22% in 2010 against a world average of 2.2%), the 3rd highest rate after Venezuela and Congo.

167 SOCIAL

A. health expenditures: since 2008 is increased from 7.4 to 9.5% of GPA

B. Football has a fundamental role in Society: all the activities are stopped during world cup or national big matches, moreover

Argentineans concede 2-3 hours during the day to have siesta.

C. High level of crimes and rapes (15th. In the world)

D. high level of corruption in public and private sector

The Company need to take into consideration aspects like these if wants avoid delays or problems with delivers.

TECHNOLOGICAL

A. % Expenditure R&D/GDP: 0.51 that is lower than other countries like Brazil (1.1), China (1.44) and India (0.8) (weakness)

B. Argentina is one of the main agricultural producers in the world and need clear and healthy water; farm production is expected to continue to rise, especially in the case of cur...

Argentina has enjoyed an international respect since the turn of the 1900's, when Dr. Luis Agote devised the first safe and effective means of blood transfusion as well as René Favaloro who has been a pioneer in the improvement of the bypass surgery. Argentina has since then had three Nobel Prize winners in the sciences.

Argentine scientists are still on the cutting edge in fields such as nanotechnology, physics, sciences and cardiology, the latter of which Dr. Domingo Liotta revolutionized with the first purely artificial heart, in 1969.

168 They have likewise contributed to bioscience in efforts like the Human Genome Project, where Argentine scientists have successfully mapped the genome of a living being, a world first.

Argentina has its own satellite programme, nuclear power station designs (4th generation) and public nuclear energy company INVAP, which provides several countries with nuclear reactors.

Other projects are focusing on IT, nanotechnology, biotechnology, helicopters, farming machinery and military defensive systems. Space research has also become increasingly active in Argentina. Established in 1991, the CONAE has since launched two satellites successfully.

INTRODUCTION OF RETAIL SECTOR OF ARGENTINA

The retail sector in Argentina has experienced a period of decline since 1998. The country's economic slowdown has constrained consumer spending. However, some segments have undergone continued growth. Small markets and family-owned retail outlets have gradually been replaced by larger chain stores. By 2000, about 80 percent of the nation's food and beverage sales were through supermarkets and large chain outlets. Argentina now has a number of major international hypermarkets.

But, Argentina is back on the list. Argentina dropped off the Index in 2010 but returns this year (2011) in 25th place. It experienced strong 9-plus percent GDP growth in 2010, but its rising inflation rates may be distorting this growth as it leads consumers to make advance purchases. The country of 40.5 million has not experienced significant changes in the inflow or outflow of foreign retailers, with Carrefour, Cencosud and Wal-Mart still the leading international retailers in the country.

Argentina Retail Sales- 3.1

169 Interpretation: Retail Sales in Argentina declined 1.6 percent in January of 2012 over the previous month. From 2008 until 2011, Argentina's average Retail Sales was 1.58 percent reaching an historical high of 14.10 percent in August of 2009 and a record low of -12.70 percent in July of 2009.

PERCENTAGE RETAIL SALES- 3.2

Interpretation: From july-06 to july-2011 percentage change in the sales of retail shows the better results as compare to previous and it is increased by 3% to 8.5% or more but also we seen the highly slow down in the retail sector or bearish trend from july-08 to july-09, when all economy faces the fear of recession also European Union faces the financial crisis, it might be affected and adversely the retail sector of the country in this

170 year and face higher decrease in mid jul-08 to jul-09 more than 11% . On the above seeing we can say about Argentina retail sector grow better in the recent years after facing a high socked.

STRUCTURE, FUNCTION & BUSINESS ACTIVITIES OF RETAIL SECTOR

The organizational structure of a retail sector will vary by the size and type of the business. Most tasks involved with operating a retail business will be the same. However, small or independent retail stores may combine many sectors together under one division, while larger stores create various divisions, while larger stores create various divisions for each particular function along with many layers of management.

Structure of Indian retail sector

The retail sector is classified broadly into two:

1. ORGANISED RETAIL: Organized retailing refers to trading activities undertaken by licensed retailers, that is, those who are registered for sales tax, income tax, etc. these include the corporate-backed hypermarkets and retail chains, and also the privately owned large number of retailers, greater enforcement of taxation mechanisms and better labor law monitoring system.

2. UNORGANIZED RETAIL: Unorganized retailing, on the other hand, represents 97 per cent of the total retail market is mainly characterized by typically small retailers, traditional formats of low-cost retailing, more prone to tax evasion and lack of labor law supervision. The local kirana shops, owner manned general stores, paan/beedi shops, convenience stores, hand cart and pavement vendor, etc.

171 RETAIL IN ARGENTINA, INDIA AND GUJARAT

Major Retailers- 5.1

Argentina India Gujarat  Falabella  Central  Brand Factory  Jumbo  Debenhams  Pantaloons  Castellanas  Lifestyle  Vishal Mart  Balbi  Brand Factory  Reliance Mart  Wal-Mart  Marks & Spencer  Shoppers Stop  Carrefour  Pantaloons  Central  Ahold Casino  Reliance Trends  Globus  Makro  Vishal Mart  Life Style  Shoppers' Stop  Westside  Star Bazaar  Pantaloons  E-Mall  Reliance Trends  D Mart  Star Bazaar  Globus  D Mart  Westside  Easy day  TATA star  Big Bazaar  Spar  Dailymart  Ezone  Reliance Fresh  Landmark

172 COMPARATIVE POSITION OF RETAIL SECTOR OF ARGENTINA WITH INDIA AND GUJARAT

Percentage of Retail Sector for Different Sector- 6.1

Retail Sector Argentina (In %) India (In %) Gujarat (In %) Food & Grocery 44 12 15 Clothing 14 40 46 Furniture & Decoration 7 9 5 Foot ware 14 12 4 Watch & Jewellary 6 10 13 Toys, Games & Music 2 5 4 Mobile 8 6 10 Consumer Durable 5 6 3

Chart of Percentage of Retail Sector for Different Sector- 6.1

50 45 40 35 30 25 20 Argentina (In %) 15 10 India (In %) 5 Gujarat (In %) 0

Interpretation: In Argentina Food & Grocery has grown a lot while in comparison it is less in India as well as in Gujarat also. In the same way clothing sector India and

173 Gujarat has developed while Argentina has not much developed and in Consumer durable goods and Toys, Games and Music sector all has to improve.

Numbers of Retailers per Sector- 6.2

Retail Sector Argentina India Fashion & Clothing 8 13 Food 9 16 Consumer Electronics 5 5 Die & Gardening 1 3 Furniture & Decoration 0 3 Home Ware 3 5 Footwear & Lather 4 8 Personal Care 2 6 Baby Ware 0 1 Sport & Leisure 1 1 Toys, Games & Music 1 1 Books & Magazine 5 7 Jeweler & Watches 1 2 Optical 2 6 Telecom 1 2 Petrol 2 3

Chart of Number of Retailers per Sector in Argentina- 6.2

18 16 14 12 10 8 6 4 Argentina 2 India 0

174 Interpretation: In India Fashion & clothing sector has more retailers compared to Argentina while in Argentina Food sector has more retailers compared with India But India and Argentina both have very less or near about zero retailers of baby ware, pet care and very few of sports & Leisure and Games and Music.

RETAIL SALE

Share in GDP- 7.1

Argentina India In 2011, the retail trade in India had a share In 2011, the retail trade in India had a share of 15-25% in the GDP (Gross Domestic of 20-22% in the GDP (Gross Domestic Product) of the country. Product) of the country.

Current Sales- 7.2

Argentina India Gujarat

The index that tracks sales The BMI India Retail With the recent layoffs at a at Buenos Aires’ largest Report for the fourth quarter city-based mall, the retail shopping centers increased of 2011 forecasts that total sector in Ahmadabad and in just 4.7% y/y in March, retail sales will grow from Gujarat overall, has begun a after 20.9% in the previous US$ 411.28 billion in 2011 reality check. According to month (revised figure). to US$ 804.06 billion by industry players, retail Meanwhile, retail sales in 2015 sector is currently nominal terms increased witnessing reduction in 14.6% y/y, after 32.2% in sales by 30 per cent, apart the previous month. from layoffs.

175 RETAIL FORMATS

 Hyper marts/supermarkets: large self-servicing outlets offering products from a variety of categories.  Mom-and-pop stores: they are family owned business catering to small sections; they are individually handled retail outlets and have a personal touch.  Departmental stores: are general retail merchandisers offering quality products and services.  Convenience stores: are located in residential areas with slightly higher prices goods due to the convenience offered.  Shopping malls: the biggest form of retail in India, malls offers customers a mix of all types of products and services including entertainment and food under a single roof.  E-trailers: are retailers providing online buying and selling of products and services.  Discount stores: these are factory outlets that give discount on the MRP.  Vending: it is a relatively new entry, in the retail sector. Here beverages, snacks and other small items can be bought via vending machine.  Category killers: small specialty stores that offer a variety of categories. They are known as category killers as they focus on specific categories, such as electronics and sporting goods. This is also known as Multi Brand Outlets or MBO's.  Specialty stores: are retail chains dealing in specific categories and provide deep assortment. Mumbai's Crossword Book Store and RPG's Music World are a couple of examples.

176 INDIA - ARGENTINA BUSINESS

Bilateral Trade (in million dollars) - 9.1

Argentina 2011 2010 India´s Exports 560 496 India´s Imports 1214 2032

Exports from India to Argentina (2010) - 9.2

Items In million US $ Organic chemicals 164 Lubricants 49 Vehicles and auto parts 42 Machinery 30 Sound and image devices 24 Synthetic Fibers 18 Garments 16 Bulk drugs 15 Dyes 13 Iron and steel 12 Plastics 11 Cotton yarn 11 Rubber manufactures 9 Optical instruments 5 Minerals and gems 4 Handicrafts 3.5 Carpets and rugs 3 Saddler 2.5 Leather products 2.2

177 Artificial jeweler 1.5 Inorganic chemicals 1.2

Imports of India from Argentina (2010) - 9.3

Major Argentine edible oil exporters to India

Argentina has the third largest capacity for edible oil processing after China and USA.

178  Cargil  Molinos Rio de la Plata  Vicentin  Luis Dreyfus  AGD  Bunge

Argentina Unemployment Rate- 9.1

Interpretation: The unemployment rate in Argentina was last reported at 6.7 percent in the fourth quarter of 2011. From 2002 until 2010, Argentina's Unemployment Rate averaged 11.32 percent reaching an historical high of 20.80 percent in December of 2002 and a record low of 7.30 percent in December of 2008.

179 India Unemployment Rate 9.2

Interpretation: The unemployment rate in India was last reported at 9.4 percent in 2009/10 fiscal year. From 1983 until 2000, India's Unemployment Rate averaged 7.20 percent reaching an historical high of 8.30 percent in December of 1983 and a record low of 5.99 percent in December of 1994.

Job Trends for Retail Argentina 9.3 :

Interpretation: Since August 2010, the following has occurred:

 Argentina jobs decreased 2%

180 Job Trends for Retail India: 9.4

Interpretation: Since August 2010, the following has occurred:

 Retail India jobs increased 111%

Job Trends for Retail Argentina Pay: 9.5

Interpretation: Since August 2010, the following has occurred:

181  Argentina Pay jobs increased 13,812% Job Trends for Retail Argentina Pay: 9.6

Interpretation: Since August 2010, the following has occurred:

 India Pay jobs increased 461%.

Shipping

Freight Rates from Mumbai to Buenos Aires:

20 foot container: USD 1200 40 foot container: USD 1900

Investment and joint ventures

There are 13 Indian Companies which have established operations in Argentina. They provide employment to 7000 Argentines. Eight of them are in IT, two in agro-chemicals, one in pharma, one in cosmetics and one in electrical lightning.

182 TRADE SUMMARY

-10.1

Argentina India According to ‘Global Retail Development According to ‘Global Retail Development Index- 2011’ Argentina 25th largest in Index- 2011’ India the 4th largest in retail retail sector. sector.

Argentina is currently the 29th largest India is currently the 17th largest export export market for U.S. goods market for U.S. goods manufacturing, and banking sectors.

183 Argentina Balance of Trade 10.1

Interpretation: Argentina reported a trade surplus equivalent to 1077 Million USD in March of 2012. Growth in foreign trade, especially trade with MERCOSUR partners, has been one of the main factors driving the Argentine economy. Its main trading partners are: Brazil, Chile, European Union and The United States.

India Balance of Trade 10.2

Interpretation: India reported a trade deficit equivalent to 15164 Million USD in February of 2012. Other imported products are: machinery, gems, fertilizers and chemicals. Main trading partners are European Union, The United States, China and UAE .

184 Argentina Inflation Rate 10.3

Interpretation: The inflation rate in Argentina was last reported at 9.8 percent in March of 2012. From 1944 until 2010, the average inflation rate in Argentina was 215.46 percent reaching an historical high of 20262.80 percent in March of 1990 and a record low of -7.00 percent in February of 1954.

India Inflation Rate 10.4

185 Interpretation: The inflation rate in India was last reported at 9.5 percent in March of 2012. From 1969 until 2010, the average inflation rate in India was 7.99 percent reaching an historical high of 34.68 percent in September of 1974 and a record low of -11.31 percent in May of 1976.

Chapter 11: TRADE BARRIES

USE OF VARIOUS Argentina India EXPORT RESTRICTIVE MEASURE

Common external tariff 11.6% 14.5% Non-tariff Inspections, port-of-entry Import licensing , custom restrictions, expanded use procedure, cabinet of reference prices, approval, automatic and non- Also other relating automatic licenses, and procedure of the import- requirements for importers export. to have invoices notarized by the nearest Argentine diplomatic mission when

186 imported goods are below reference prices. Anti- dumping, import licensing.

BUSINESS OPPORTUNITY IN FUTURE

Trade sectors contributing especially to Argentina exports are:

 Machinery and tools  Organic chemicals  Lubricants  Oil  Chemicals  Automobiles

In general, businesses across all sectors may face more problems in the future if they strongly depend on:

 Public buyers/state investment and consumption.  Household consumption

Retail/services:

 Sectors mainly depending on consumer spending and consumer credit are most vulnerable.

187  Small retail commerce in general is suffering from overall weak domestic demand.

LOGISTIC SECTOR OF ARGENTINA

Introduction:

Globalization and Best Practices have been keywords of the managerial world for the past several years. In Argentina, global competition, liberalization of the economy, and “dollarization” of the currency have increased pressure on local businesses to perform at world- class levels. Argentine logistics managers have responded to this challenge enthusiastically. Sanchez and Herrero (1997) present some of the results that have occurred in the food industry. This paper emphasizes evidence of a clear trend toward the transference of Best Practices from World Class companies in the most developed countries to leading Argentine concerns.

The results presented are based on a study done in a leading Argentine university, where four major companies based in Latin America participated in a multicompany-benchmarking consortium. From a list of 20 issues (see Appendix A, Key Subjects), the following subjects were chosen by the companies for intercompany comparison and benchmarking.

188 SWOT ANALYSIS OF LOGISTIC MANAGEMENT.

STRENGTH WEAKNESS

 Highly equipped transportation  Prices vary through competition in facility. these segments, Law margins.

 Better infrastructure.  Customer expectations in terms of delivery, discount and  Reputation in delivering goods and customization are very high. services on time.  No focus from regional offices. All  Provide better services in accordance enquires and subsequent follow up with customer requirement. By taking divert to HEAD OFFICE. just in time delivery approach

 Service caters to all requirements in  Delivery adherence all fields

OPPORTUNITY THREATS

 Vast potential in the market.  Small scale , low cost competitors are Pneumatic valves are increasingly thronging in the market and eroding becoming a part of every process our share with product of comparable module as the market moves towards performance automation.  Different competitors for different  After superior services and segments. complaint management  Market driven by prices and delivery  Establishing a dealer network shall of goods. enable better focus on this delivering service.

189 Top 5 logistic Companies financial data

1) DHL Revenue FINANCIAL YEAR11: Rs 33,112 crore Revenue FINANCIAL YEAR10: Rs 26,576 crore Growth FINANCIAL YEAR11: 25% DHL is the largest provider of logistic services in Asia and second largest provider of business process outsourcing services in India. Headquartered in Mumbai, DHL has over 198,500 employees. 2) FEDEX Revenue FINANCIAL YEAR11: Rs 25,997 crore Revenue FINANCIAL YEAR10: Rs 21,355 crore Growth FINANCIAL YEAR11: 22% FedEx is the second largest first Company in India with 133,560 employees as of March 2011. FedEx is ranked 5th globally in the list of logistic services providing firms. It has offices in 33 countries and development centers in India, China, Australia, UK, Canada, and Brazil and all over the world.

3) CAT Revenue FINANCIAL YEAR11: Rs 9,766 crore (Rs 97.66 billion) Revenue FINANCIAL YEAR10: Rs 7,234 crore (Rs 72.34 billion) Growth FINANCIAL YEAR11: 35% CAT is the world's 4th largest logistic distributor, providing sales, marketing and logistics services for the IT industry worldwide. CAT India is a subsidiary of this company, which operates in 34 countries.

4) BLUE DART Revenue FINANCIAL YEAR11: Rs 9,274 crore (Rs 92.74 billion) Revenue FINANCIAL YEAR10: Rs 7,024 crore (Rs 70.24 billion) Growth FINANCIAL YEAR11: 32%

190 India commenced the operations in 1993 distributing information technology products. The company gradually expanded its operations across India covering a broad range of logistic with offices in India, West Asia and Africa

5) GEFCO Revenue FINANCIAL YEAR11: Rs 14,132 crore (Rs 141.32 billion) Revenue FINANCIAL YEAR10: Rs 12,388 crore (Rs 123.88 billion) Growth FINANCIAL YEAR11: 14% GEFCO in New York, GEFCO is a multinational logistic and transportation consulting corporation. GEFCO has been present in India since 1992. It’s India's solutions and services span all major industries including financial services, government, automotive, and telecommunications.

191 COMPARISION of countries and state Table no: 1

Argentina India Gujarat COMPANIES 559 370 45 MAIN TOP 10 CAT, CELSOUR DHL, BLUE DERT, DHL, BLUE DERT, COMPANIES LOGISTICA, DHL, GATI, DTDC, DTDC, ASHOK GEFCO, FEDEX… FIRST FIGHT… LAYLOND… TOTAL 25930 51436 4524 BRANCHES OF ALL COMPANIES SERVICES HIGH & SPEEDLY MODERATE MODERATE IMPORT & IMPORT-99546€ IMPORT-24522 Rs IMPORT-3824 Rs EXPORT EXPORT-538894€ EXPORT-5143 Rs EXPORT-630 Rs REVENUE 3122 € crore 15,356 Billion 2059 Billion POLICY BESED ON GOV. & BESED ON GOV. & BSED ON GOV. CO. CO. TAX RATE As per government As per slab system As per slab system rate. (Appx. 30%) (10%, 20%, 30%) (10%, 20%, 30%) EXCISE DUY 20% 12% 12% POSITION HIGH MODERATE GDP GROWTH 56.25% 45.87% 23.19% RATE BUSINESS HIGH HIGH HIGH OPPORTNITIES RANK 19 172 -

192 COMPARISION of countries and state Revenue Table no: 2

Argentina India Gujarat Year euro in % RS in % RS in Billions % Growth crore Growth Billions Growth 2005 8.1 - 40.56 - 11.4 - 2006 8.6 6.17 46.21 13.92 11.7 2.60 2007 8.7 6.24 48.58 14.64 12 2.69 2008 9 6.45 51.47 15.52 12 2.69 2009 9 6.45 52 15.67 12.2 2.74 2010 9.1 6.52 55.60 16.76 12.3 2.76 2011 9.3 6.66 57.74 17.4 12.5 2.81

193 Revenue of Argentina Table no: 3

Year euro in crore % Growth 2005 8.1 - 2006 8.6 6.17 2007 8.7 6.24 2008 9 6.45 2009 9 6.45 2010 9.1 6.52 2011 9.3 6.66

Revenue of Argentina Graph no: 1

5 Euro in Millions % Growth 4

0 2005 2006 2007 2008 2009 2010 2011

Revenue of India Table no: 4

194 Year RS in Billions % Growth 2005 40.56 - 2006 46.21 13.92 2007 48.58 14.64 2008 51.47 15.52 2009 52 15.67 2010 55.60 16.76 2011 57.74 17.4 Revenue of India Graph no: 2

40 Rs in Billions 30 % Growth

0 2005 2006 2007 2008 2009 2010 2011

Revenue of Gujarat Table no: 5

Revenue of Gujarat Graph no: 3

195 Country Argentina India Gujarat Growth 56.25% 45.87% 23.19% 14

8 Rs in Billions 6 % Growth

0 2005 2006 2007 2008 2009 2010 2011

GDP Growth rate in Percentage Table no: 6

196 Growth rate in Percentage Graph no: 4

Sales

Argentina India Gujarat

COMPARISON BETWEEN ARGENTINA & INDIA ARGENTINA

 logistic industry has the 10th highest productivity of any other major industrial sector in the country  During 2006, estimates indicate that Argentina firms exported $2 billion in transportation, a figure expected to grow to $12 to14 billion by 2011. It seems that 80% growth rates in foreign delivery.

197  Argentina logistic market saw a growth 14.6% in 2011 ,15.8% in 2012 and 18.1% in 2013(expected)  Currently this sector provide 1% of global market of services, worth roughly $16 to 20 billions  World economic forum rates 24th in the world for growth in information and communications technology.

INDIA

 The logistic sector has been one of the impressive sectors of Indian economy. The Indian it growth considerably over the last decade to contribute over 8% of the country`s GDP  The Indian Services export is estimated to grow at 8.5% and to generate export revenue of $52.5 billion in year 2009-10. The services exports are estimated to be $27.3 billion in 2009-10 as compared to US $ 27.8 billion in 2008-09, showing a growth of 5.8%. Its- BPO exports are estimated to grow from $15.7 billion in 2008-09 to $12.4 billion in 2009-10, a year-on-year growth of 8%.  India is regarded as the premier destination for the global sourcing of logistic, accounting for almost 51% of the global sourcing market size of $94 billion in 2009. India now has a 62% share of the global logistic services market (IT Services, Engineering Services and R&D) of about $58 billion and a 32% share of the Global Business Outsourcing Market of about $37 billion.  FedEx is the largest provider of logistic services in Asia and second largest provider of business process outsourcing services in India. AND in India the 2nd largest is DHL  The Indian top ten logistic companies growth over financial year10-financial year11 is between 15.10% to 20.40%.over financial years.

ARENTINA OFFERS SCOPE FOR INDIAN LOGISTIC SECTOR

CHENNAI, MARCH 21. Indian logistic companies with their creative technology are a boon to the Argentina market. Argentina wants to tap its human resources potential and develop the country as a hi-tech nation. The Russian economy is also diverse financial yearning away from the core business of oil into other industries. So it has chosen logistic sector to develop,

First flight Indian logistic company to do businesses in Argentina, Mr. Kuepper said that Indian companies had enormous opportunities in Argentina. The very low cost structure and high literacy rates in Argentina were added advantages.

Mr. Kuepper, who was in Chennai to attend the seminar, told presspersons that Argentina’s industries were willing to grow both organically and inorganically.

198 Argentina wanted Indian companies set up offices there and also acquire companies in their host land. He said the cost of acquisition was generally 30 per cent below the global evaluation rate.

He said experienced global players could enter the Argentina market and develop the outsourcing services industry.

The Argentina transport market was estimated at around $ 6 billion in 2003. It had projected a 24 % growth in 2004. It had relatively a low goods penetration of less than 11 per cent. Goods distribution revenues with 60 per cent, which is followed by system integration, dominated the current market and logistic segments.

Mr. Kuepper said Argentina had drawn up a three-point development programmed for developing logistic sector in its country. First, it wanted to set up a delivering facility and provide a special economic zone for dispatch exports.

Second, it wanted to be called as "E- Argentina ". Under E- Argentina programmed, the country planned to invest $ 2.4 billion. The third programmed would include lowering overall tax burden on the IT companies and enable the Argentina IT market reach $ 40 billion by 2010.

On the language issue, he said, on an average, Argentina did speak English. But no country could survive only with English as a main language. He urged the Indian logistic companies to slowly look into other languages as well.

A few Indian companies had set up their offices in CIS countries. Among them are Sun Group, Ranbaxy, Agro and Mittal Steel.

INDIAN TRANSPORTATION SECTOR OVERVIEW

 Road sector in India  Second largest road system in the world at 3.3mn km  NH Density on Area at 3.7 km vis-à-vis 6.5 km and 26.1 km of Total Road Network per 1000sqkm of land area in China and US respectively  Ports in India  12 Major ports and ~187 non-major ports in India  Major ports handle ~70% of total volume of cargo  Airports in India  At ~25% p.a one of the fastest growing aviation markets in the world despite global slowdown  Over 400 new aircrafts have been ordered since 2005

199  5 Greenfield airports planned under BOT –yet to take off  Railways in India  Railway intends to spend USD 55 bn into various development schemes  Safety–37% Capacity increase–24%, Rolling stock–18%, Dedicated freight corridor– 10%, Metro rail projects–9%  Inland Waterway Transport in India  India has 14,500 km of navigable waterways comprising of rivers, canals, backwaters, creeks  5,700 km out of 14,500 km of IW is navigable by mechanized vessel  Trade Opportunities for India:  Potential for the export of various vehicles, two wheelers, auto parts,  Strong potential for a few trans shipment hubs  Rising need of infrastructure of jetties and cargo handling equipments  Potential for Eco-tourism  Increasing demand for the machinery including for sugar industry and railways.

The press in Argentina has undergone significant changes over the last three decades. After suffering under a repressive military regime for seven years, it emerged as one of the institutional building blocks of democracy. As the country struggles with the difficult task of building a free society, journalists have consistently put themselves at risk in order to bring news to Argentine homes. As a profession, journalism has grown stronger in both political and economic influence. Many individual journalists, also the victims of a depressing economic panorama, have excelled in their professional achievements, winning international awards and helping locally to uncover government fraud, mafia activities, and human rights violations.

Media companies have also grown economically stronger under favorable legislation. The move to a more business friendly set of regulations started under President Menem. These changes allowed for a growth in private ownership of media companies never seen before. Many critics have lamented the decreasing role of state intervention and have accused big media conglomerates of monopolizing the market. Unions and the left have also protested what they see as excessive political influence of big media conglomerates.

The difficult economic situation in Argentina in mid-2002 leads most analysts to conclude that the short-term prospects for the country are bleak. This will seriously affect the press, not only as it suffers from the general malaise, but also for the consequences of possible violent social conflict on press freedom. For small media companies and provincial newspapers the panorama appears to be even worse. On the legal front, the slow erosion of norms benefiting

200 press workers and the constant use of presidential decrees to undertake major changes in media regulation have opened the door to policy volatility in the next few years.

The rapid growth of electronic media and instant access to information also pose new challenges to old fashioned newspapers that have to adapt to a rapidly changing professional environment. The accelerated growth of Internet sites and availability of broadcasting media online will probably continue to grow in the near future, despite economic hardships.

Overall the future of the press seems complex and uncertain. Many important legal and economic issues that affect the profession are now being debated in Congress. Under the currently difficult state of affairs, the role of the Argentine press has, if anything, grown even more important.

The Data comprising the two countries regarding the Export-Import of Argentina and India state that India has made more of Import of goods and services of last decade as compare to Argentina who has Higher import in 2008 which were 20.7 and India at that time was at 28.9 which means more and more of India’s revenue is going out of India

While the Export data of Argentina were strong than that of India .In the last decade the Argentina export level reduced while India made little progress. The data of 2010 shows the proportion of both the countries which stand at 21.7

While the GDP of Argentina at earlier time was minimum which stand at 10.9 were India was at 3.8. Over a period of time India made good progress in production area. In 2010 India stood closer to Argentina .the data were 8.8 for India and 4.2 for Argentina

India’s export to the Argentina has increased over time but import to India is decreasing. The India is mainly exporting the Organic Chemicals to the Argentina and in 2010 it was 164 US$ million and Lubricants was of 49 US$ million.

So By this report we can say that the Argentina has a good market for Organic Chemicals and Lubricants.

201 For the purpose of business Argentina is good country and the market in the Argentina is developing over time. Argentina is the third largest capacity for edible oil processing after China and USA. So the Argentina is well developed country for the business.

202 Biblography

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CentralBanksGuide.com http://www.mapsofindia.com/gujarat/economy/banking-and-financial-institutions.html

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 tmhttp://www.aneki.com/comparison.php?country_1=Argentina&country_2=India

 http://www.communicaid.com/access/pdf/library/culture/doing-business-in/Doing Business in Argentina.

 http://www.indembarg.org.ar/en/gbvar_guide.h

 COHA (Council Of Hemispheric Affairs) Research Associate Ashton Farmanara Analysis.

203  Profile of the Indian Transport Sector, Narendra Singru, Operations Evaluation Department, Asian Development Bank  Indian Embassy report at Argentina.  Pamela Sumner Coffey for Development Alternatives, Inc. (DAI), USAID (United States Agency for International Development.  Transportation sector overview, Suneet K. Maheshwari (CEO) L&T Infrastructure Finance Company Ltd, Fitch Ratings.  Embassy of the Republic of Paraguay in India, http://www.paraguayembassy.in

 http://en.wikipedia.org/wiki/Communications_in_Argentina

 http://www.justargentina.org/

 http://www.leoburnett.com/

http://www.justargentina.org/argentina/argentina-media.asp

http://en.wikipedia.org/wiki/Rice

http://irri.org

http://www.mapsofindia.com/indiaagriculture/

http://www.usda.gov/oce/weather/pubs/Other/MWCACP/Graphs/Argentina/ArgentinaRice .pdf

http://oryza.com/Latin-America/Argentina-Market/argentina.html

 http://www.countryreports.org  http://www.list-of-companies.org/Argentina/  http://www.indembarg.org.ar/en/gbvar_guide.htm#indiaargentina  http://www.list-of-companies.org/Argentina/Keywords/IT_COMPANY/  http://www.countryreports.org/data-tables/index.htm  http://www.indexmundi.com/argentina/gdp_composition_by_sector.html  www.thehindubusinessline.com/industry-and.../article2453426.ece

 en.wikipedia.org/wiki/Department_store

204  Krafft, Manfred; Mantrala, Murali K. (eds.) (2006). Retailing in the 21st century: current and future trends. New York: Springer Verlag. ISBN 3-540-28399-4  en.wikipedia.org/wiki/Retail  en.wikipedia.org/wiki/Retailing_in_India  www.indembarg.org.ar/guia%20interior%202011  http://www.census.gov/retail/index.html  www.economywatch.com/.../argentina/industry-sector-industries.html  finance.yahoo.com/.../research-markets-argentina-retail-... - United States  www.financialexpress.com/news/indiaargentina-trade-to.../529097/  articles.economictimes.indiatimes.com › Collections  www.retail-index.com/.../CalculateNumberofRetailerspercountrysecto  http://www.scribd.com/doc/51205673/9/STRUCTURE-OF-INDIAN-RETAIL-SECTOR  www.tradingeconomics.com  www.atkearney.com/GRDI  www.simplyhired.com

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