Definition and scale of sector
The sector covers:
Why the sector is strong in the West Midlands
The Indian passenger car industry is expected to grow to 3 million by year 2015 with Multi Utility Vehicles constituting 20 per cent of this market. Two wheelers are expected to grow to over 13 million units a year. There are 453 active collaboration in the component industry, 45 of these involve UK companies.
India needs assistance in developing its component industry, framing emission control and other regulations, with design and engineering and in developing its infrastructure - in fact, the total package required to develop and sustain a modern automotive industry. UK companies have much to offer, and can potentially be at the forefront of these developments during the current 'window of opportunity'.
AAI are drawing up plans to introduce this system in Mumbai airport Terminal II-B. The system that AAI are looking at is on-line detection system with common control in the baggage making area. Similar to one that is in Paris Airport. Global tender expected in a month time.)
Passenger Baggage Trolleys
Indian economy and aerospace sector is growing at an unprecedented rate. However, despite all the hype and noise, Indian aerospace spend, even after a decade, would be a very small percentage (2%) of global aerospace turnover. Therefore, the most preferred approach for UK Aerospace Industry (UKAI) companies, is to not remain a distant seller, but form strategic alliances combining UK's inventiveness with India's knowledge pool and low cost platform to sell competitively into global aerospace market and raise share of UKAI global aerospace market above 15%.
India has been identified as low cost sourcing destination for low-batch precision machined parts & assemblies. Cost-lowering needs of the world aerospace programs are forcing Indian participation to grow from USD 20 million to over USD 2 billion by 2015. However, with India's current level of preparedness and through its organic growth pattern, Indian industry can only meet one-fourth of this demand, at the most. An opportunity exists for UKAI to fill this gap.
India will buy more than 500 jet airliners by 2010. However, the infrastructure to support such a growth does not exist. Hence, an investment of USD 7 billion has been planned by 2010 for development of Airports & Airport Services. Also, to maintain the aircraft fleets acquired, the cumulative value of MRO services during the same period will be USD 2 billion. UKAI has immediate opportunities to sell their products & services in these areas
PRIVATISATION OF PORTS
The port privatisation policy announced by the Government Of India in October 1996 offers a number of opportunities for British companies engaged in port consultancy, construction, management and turnkey contracts. The general layout of the facilities in the older ports is outdated and the facilities are not suitable for modern cargo handling. The civil works at these ports are mostly in poor condition and the water depth is not sufficient for large vessels. There is ample scope to increase the capacity of existing facilities through modernisation and improvements in productivity and construction of new berths. The value of such projects would range from £2million to £700 million.
Adequate infrastructure is an essential factor in the economic growth of any country. India is the seventh largest country in the world and the second largest in Asia with a landmass of 3.29 million square km and a population of over one billion. The need for adequate transport infrastructure is therefore vital. The Indian government has attached a high priority to building and investing in the transport infrastructure sector, particularly in roads, ports, rail and airports.
The importance of multi-modal transport for passengers and commodities can not be over estimated in India given the sheer size of the country and the existing varied network. The needs of an increasingly urban population, coupled with significant increases in industrial, trade and commercial demands have placed immense strain on the existing transport infrastructure.
Primary responsibility for development and management of transport infrastructure - roads, ports, railways and airports rests with the Central/State governments. Traditionally characterised by public sector management and investment, the transport infrastructure sector is now increasingly opening up to the private sector, as the GoI recognises that substantial investment is needed if India is to realise its ambitious growth plans. Private sector participation is an integral part of these plans.
Foreign investment in 16 identified areas is now permitted (with up to 49% equity). These include:
IR has also suggested allowing foreign players to operate and maintain the Kalka-Shimla, Darjeeling Hill railway sections. There are ongoing discussions to allow private investment/participation in the mechanical maintenance of railway tracks and freight companies.
In terms of the major projects, opportunities exit for UK companies in the following areas:
The automobile sector in India is one of the major sectors where 100% FDI is allowed. Most major automobile manufacturers like Ford, GM, Toyota, Suzuki, Hyundai, Skoda, BMW, Mercedes, Peugeot, and Mitsubishi have already entered the market while other major manufacturers like Volkswagen are aggressively looking at market entry strategies. The BRICs report by Goldman Sachs predicts that India will be the 5th largest car market in the world by 2025 and car ownership in India could grow at 10% pa for the next 20 years.
Sector Overview (India)
Sector Overview (Britain)
Ports & Logistics
The infrastructure sector in India has seen impressive transformation in the last few years - more significant in some sectors (such as telecom, roads and highways) than in others such as ports, airports, railways etc. The most important development in the sector has been the steady progress in privatization, though not without bottlenecks and policy debates over the extent and content of the same.
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