Be desi, buy phoren: India's way to keep the West busy

ANUSRI SAHU :: INDIATIMES NEWS NETWORK - The Economic Times: "All those gora doomsayers can eat crow! Indians are not stealing Western jobs . In fact, because of rising Indian demand for a range of goods, jobs are being created in a number of countries across the globe, the US included. Manufacturing units in foreign countries are buzzing with activity producing aircrafts to computer hardware, all to match the growing demand amongst Indians.

Emerging as one of the biggest spenders in recent times, the Indian aviation sector has placed orders for over 350 aircrafts with a list price of about $26 bn. Currently there are 156 large carriers in service. India's booming aviation sector and the growing number of passengers has led to this huge demand.

The greatest surprise order has been by Delhi-based Interglobe Airlines for a hundred planes with a catalogue price of $6 bn. Kingfisher Airlines has ordered for five A380s ($1.4 bn) and Coimbatore-based Paramount Airline has ordered five Embrayer 170/175 aircraft.

In the technology sector, the IT service market is around $600 bn and India gets only about 3 per cent of that. However leading global companies have realised the vast potential of this sector and are planning for a bigger share. According to Vinnie Mehta, executive director, Manufacturers Association of Information Technology, "In the PC segment almost 55-60 per cent of the products are branded while the rest come from the unorganised sector."

Among the big-name brands, Dell is a major player who supplies to Indian consumers. Dell does not manufacture in India and imports its products from Malaysia. Mehta says components are imported by-and-large from Taiwan, China, Singapore, South Korea and Malaysia. The size of the PC market in India in 2004-05 was close to 4 mn units and is expected to grow at 30 per cent in 2005-06.

Western manufacturers are also eyeing India's growing wireless telephony market. And for good reason. Some of the major global players - Nokia, LG, Samsung, Motorola and Sony Ericsson -- are present in India. The booming wireless sector, the world's fastest growing major mobile market, added 1.7 mn new users in May taking the total wireless base to 55.87 mn customers. This is just the tip of the iceberg as Indian cellphone service providers are busy expanding into rural areas.

Analysts estimate that between 30 mn and 35 mn handsets will be sold in the $3-bn handset market during 2005, compared with 17 mn last year. Back of the envelope calculations show that Nokia, with about 31 per cent share and the second leading, Motorola with about 19 per cent share in the market will sell about 9 mn and 6 mn handsets respectively.

Indian lakhpatis, growing every year, are pushing the demand for expensive top of the line cars. You name it and it is sold here in India. Including the Rs 5 crore Maybach from DaimlerChrysler (only 1,000 of these are manufactured every year). And if you are slightly poorer then opt for Rs 2.5 crore Bentley's Arnage RL Limo.

The Indian automobile industry has witnessed a positive growth in recent years. The two primary factors for this rise, is the improvement in the living standards of the middle class and an increase in its disposable incomes.

Moreover, liberalisation steps, such as, relaxation of the foreign exchange and equity regulations, reduction of tariffs on imports, and refining the banking policies, initiated by the government of India, have played an important role in attracting several foreign players in this market. The institutionalisation of automobile finance has also made way for sustaining a long-term high growth for the industry

According to the Society of Indian Automobile Manufacturers (SIAM), the industry has maintained a growth of 20 per cent till May 2005, with passenger cars and utility vehicles growing around 13.32 per cent and 15.80 per cent respectively.

Giving Indian auto manufacturers a stiff competition are foreign manufacturers such as DaimlerChrysler, Fiat, Ford, General Motors, Honda, Hyundai, Skoda, Toyota and Volvo.

Hyundai imports two of its popular car brands -- Terracan and Tucson -- from its mother company in Korea. Terracan, launched in 2003, saw its import leap from 188 cars in 2003 to 392 in 2004. Till May, 2003 it has already imported 103 cars. Tucson was launched in April 2005 and already 298 cars have been imported to India by May end.

India's growing middle class, with its finger on the global pulse, has pushed the demand for foreign goods. So, the next time your foreign collaborator cribs about Indians stealing jobs, tell them about how our fancy lifestyles and appetite for consumer goodies keep Western manufacturing humming. "