OPENING DOORS TO INDIA NEW ZEALAnd’s 2015 VISION Opening Doors to India 1 OPENING DOORS TO INDIA FOREWORD FROM NEW ZEALAND’S 2015 VISION PRIME MINISTER KEY I’m delighted to introduce the New Zealand Inc India Strategy. Our future prosperity as a country depends on our ability to overcome the tyranny 01 Foreword from Prime Minister Key of distance, connect with the world, and build our exports. 03 India in perspective 07 India’s commerce A stronger export market will help us build legal system, business language, democratic 08 New Zealand and India a stronger economy, which will, in turn, create traditions, sporting passions, and people-to- 12 The NZ Inc India Strategy jobs, boost incomes, and raise living standards people links. for New Zealand families. 13 Goals We strongly value our strong bilateral ties with 13 Grow merchandise exports That’s why New Zealand is taking a whole- India. We look forward to building on our ties of-government approach to building exports in the years ahead, and learning more about – 16 Grow services trade and opening up new markets. This includes and from – India. 18 Improve the bilateral investment framework directing government agencies’ efforts towards key countries and regions over I believe we can build an enduring and 19 Attract and retain skilled migrants the next five years. successful partnership with India that will bring in huge rewards for both our countries 20 Engage more deeply with India This strategy, the NZ Inc India Strategy, is the in the years to come. 21 Raise the profile of New Zealand’s value proposition first. India is emerging as an Asian superpower This NZ Inc Strategy is our first step, 27 Sectors of focus and New Zealand needs to make the most of the opportunities it provides for the future. and I encourage New Zealanders to find 27 Food and beverage, and agritechnology out more by visiting www.mfat.govt.nz Similar strategies for China, the United States, 31 High value manufacturing and technologies (ICT, healthcare) and Australia are also underway. Strategies for For more information about doing business 31 Construction and interiors (including value-added wood products) ASEAN, the Middle East, and the European in India, including market intelligence reports Union are planned. and information about business culture, visit 33 High value services (agriculture, forestry, infrastructure, aviation) www.nzte.govt.nz 34 Tourism The NZ Inc India Strategy outlines why New Zealand exporters should be doing business Rt Hon John Key 36 Education in India and gives them the information they Prime Minister 39 Doing business in India need to get started. The Government’s vision is for India to become a core trade, economic, and political partner for New Zealand by 2015. This is a bold aim, but one which all of Government is working towards. For example, we are working hard to complete the India New Zealand Free Trade Agreement (FTA) in 2012. This FTA has huge potential to benefit both our countries. New Zealand and India already have much in common. We share a Commonwealth heritage, Opening Doors to India 3 INDIA IN PERSPECTIVE With more than 1.2 billion people, India is one of the world’s largest economies. In nominal terms it is currently the world’s 10th largest economy (US$1,685 billion). India is a country of diversity. It has 28 states, There are 2.65 children in India for every seven union territories, and numerous official woman of child-bearing age and with 64 percent languages. It is also a country of significant of the population currently aged between 15 and change, growth, and urbanisation – by 2030 it 65, India has the world’s largest working age is expected that India will have 68 cities with population pool. According to the International populations of more than one million people. Monetary Fund, this demographic dividend could add about two percentage points per annum to India’s per capita GDP growth over “ By 2012, [India] will have overtaken the next two decades. Japan to become the world’s third largest Indian people are becoming more widely educated and the liberalisation of the economy economy, with GDP accounting for 5.8% has given rise to a vast collection of self-made millionaires. This is a nation where staggering of the world total in PPP terms. In the wealth and prosperity thrive side-by-side long-term, India could grow even faster with a rural economy. Around 60 percent of the population lives rurally but there is rapid than China due to its younger and faster urbanisation and special economic zones in major cities have proved pivotal to development. growing population.” Euromonitor India is using some of its newfound wealth Even during the global recession India fared to invest in the education of its young people. well, with annual growth of over five percent, While only 63 percent of adults are literate, and it is projected to return to more than nine among India’s youth this figure is 78 percent. percent, in line with its performance over most Already there have been striking advances in of the past decade. addressing literacy. There are now around 350 tertiary institutions in India, including the In August 2007, the McKinsey Global Institute Indian School of Business which was ranked predicted that “over the next two decades, the number 12 in global MBA rankings by the country’s middle class will grow from about Financial Times of London in 2010. India’s 100 five percent of the population to more than million-plus English speakers are a huge asset 40 percent and create the world’s fifth-largest as it develops into a global economy. consumer market.” So far, that prediction is proving sound. Education constitutes 20 percent of India’s current budget for economic development, India’s greatest asset is its youthful and with a total outlay of about $81 billion. This increasingly educated population. substantial investment is improving the Clockwise from top: Taj Mahal (photo courtesy of WG-ST), spice market, Prime Minister Key in India with Stephen Fleming. CITIES ON THE MOVE: THE TRANSFORMatION OF PUNE AND HYDERABAD India is simply too large a market to approach in anything other than small sections, whether it be politically, institutionally, or geographically. Opportunities in India abound beyond the sprawling mega-cities of New Delhi and Mumbai and New Zealand companies should be looking at other tier one, two, or three cities as part of their market entry strategy. Some of India’s more ambitious cities offer healthy prospects for savvy businesses; two examples of upcoming cities are Pune and Hyderabad. PUNE The transformation of India’s eighth companies such as Tata Motors, Mahindra largest city into a major industrial hub and Force Motors (Firodia-Group) have also has attracted attention around the world. set up in Pune. Known as a centre of education, Pune is located 150 kilometres from Mumbai, in A number of IT parks have been the western state of Maharashtra, and is established to accommodate the city’s home to 5.5 million people. The city boasts swelling software industry, which employs the second highest per capita income in more than 70,000 people. Major software companies such as Infosys, Symantec, Clockwise from top left: the country. Tech Mahindra and IBM Global all have a Charminar in Hyderabad, Pune’s growth can be attributed to three presence in Pune, and Microsoft is planning The Ganges near Varanasi, areas: ICT, small and medium engineering a US$156 million project in Hinjewadi, on the and a Mughal tomb component manufacturing, and automobiles. outskirts of the city. (photo courtesy of WG-ST). All sectors of the automotive industry are In addition, a high-speed train is being built represented, from two-wheelers and auto- to connect Pune to Mumbai which will reduce rickshaws to cars, excavators and trucks. travelling time to just one hour, and the The Independent once dubbed Pune India’s state of Maharashtra is reportedly planning “Motor City” thanks to the proliferation of a 1000MW power plant to exclusively big-name international auto companies, cater for Pune’s rapid expansion. There is a such as Daimler, Chrysler, Volkswagen, strong New Zealand link with Pune as well, Fiat, and Mercedes Benz, that have set with BLACKCAPS Jesse Ryder and Nathan up manufacturing or greenfield facilities McCullum playing for the Pune Warriors in in and around the city. Indian automotive the 2011 Indian Premier League (IPL) series. HYDERABAD quality of elementary education, recruiting additional teachers (particularly in science “ India is one of the world’s best-performing With a population of about six million with the likes of Kellogg and Wharton and mathematics), upgrading ICT in schools, people in the Greater Hyderabad Municipal and attracts local students and and using technical assistance to strengthen economies for a quarter century. In the region, the capital of the state of Andhra international talent. educationally fragile states. The next Five past two decades, the size of the middle Pradesh offers numerous opportunities Year Plan (2012-2017) is expected to further With a new airport, Hyderabad is for New Zealand companies. Hyderabad increase government spending on education becoming a regional aviation hub and class has quadrupled… and one percent is home to a sizeable “Tollywood” Telugu and continue to promote the public-private is developing this sector as one of its film industry which has shot some films in partnership model of education infrastructure of the country’s poor have crossed the specialisations. Dairy, meat processing, New Zealand, and the largest studio complex and capacity building. biotechnology and agritechnology also in the world, Ramoji Film City, is located on poverty line every year.” offer a good fit with New Zealand the outskirts of Hyderabad.