This paper provides us the evidence of the business between two of the biggest economic giant of Asian Continent. This paper aims to investigate the relationship between trade flows and Import- Export between India and Taiwan. This paper also provides new evidence on the long run convergence between import and export with these two countries. It will be helpful for the new business and to understand the growth of the imports and exports between India and Taiwan. You will find great opportunity to start a new business in Imports and Exports in different products according to their demands and supply. We have a latest and detailed study of Import – Export of different products according to the Category in different years. The result suggests that the business is growing so fast between India and in Taiwan.
Based on the research finding people might identify the new opportunities in India & Taiwan.
The Purpose of this paper is to discover much more about the India and Taiwan’s economic development in the past four years. And, even more importantly, you will learn about specific ways that you can share in this success, regardless of whether you are the president of a large multinational or the owner of a small trading concern. The Bilateral trade reached $2.26 billion between January and November 2005, a meager 0.67% of Taiwan's total foreign trade during the period. This paper also provides the genuine data collected from all the government bodies located in India and Taiwan.
Keywords: Economy, Trade, Trading, India-Taiwan, Import-Export, New
Opportunity, Development, Economic growth.
It is the matter of great pleasure and privilege to be able to present this thesis report on The Growing trends of India-Taiwan Import-Export & Trade: An Empirical Study.
The Compilation of the thesis will be able to find the new paths and way to do business in these two countries. I wish to record a deep sense of respect and gratitude to my thesis Guide Mr. James Yeh for his encouragement to course of my work. It is due to the enduring effort and guidance of my Guide that ultimately made it success.
I also take this opportunity to express my deep regards and gratitude to the Mr. Tsai Ming Chun the head of the department and would like to thank the head of the college Mr. Chen Wu Zhen who gave us the guidance to take up and pursue the thesis.
I cannot just condone the valuable opportunity give to me by Chunghwa University for compiling and submitting the thesis, which I feel is an opportunity I acknowledge my indebtness to various authors and for making use of valuable information liberally. It is my proud privilege to express my deep sense of appreciation and gratitude to my Parents and friends for their support and cooperation in this course of the project either directly or indirectly involved in time with their valuable contribution.
Vineet Kumar Sharma
List of Table………..5
List of Figures………...6
1. Chapter One: Introduction………..7
1.2 Literature review………...8
1.3 Methodology and Approach……….8
2. Chapter Two: Introduction of Taiwan & India’s Economy……….9
2.1 Taiwan perspective 2.1.1 Taiwan Economic trends and Branches of Industries…………9
2.1.2 International trade……….11
2.1.3 EXIM (Export & Import) regulations and custom & duties …11 2.1.4 Distribution of work………..12
2.1.5 Standards & Patents………..13
2.2 India Perspective 2.2.1 Taiwan Economic trends branches of Industry……….13
2.2.2 International trade………..16
2.2.3 EXIM (Export & Import) regulations and custom & duties ….16 2.2.4 Distribution & Transportation………...18
2.2.5 Standards & Patents………..19.
3. Chapter Three: Trends of Import-Export between India & Taiwan……….20 3.1 India-Taiwan Commercial and Economic Relations…………20 3.2 Taiwan’s Perspective
3.2.1 Taiwan’s Export-Import to India………...22 3.2.2 List of Taiwanese products Exported to India………..25 3.2.3 Commercial Service in Taiwan………..25 3.3 India’s Perspective
3.3.1 List of Indian Products Exported to Taiwan…………..29 3.3.2 Commercial Settings & Industry Participation………..30 3.3.3 Commercial Service in India……….31 4. Chapter Four: The Importance of Taiwan-India Trading Amounts………..34
4.1 Taiwan Perspective
4.1.1 Taiwan’s ranking among World Export………34 4.1.2 Taiwan’s Trade with India & BRIC Countries………..36
4.2 India Perspective
4.2.1 India’s ranking among World Export ………..37 4.2.2 Taiwan’s Participation in India’s Export………..39 .
4.2.3 Taiwan’s Participation in India’s Imports……….40 5. Chapter Five: Summary & Conclusion………..42 References……….44
List of Tables
Table 2.1 Taiwan………..10
General Economic Indicators………...10
Table 2.2 India………..14
General Economic Indicators………14
Table 2.3 Trade by partner Countries………15
CHAPTER 3 Table 3.2.1 Exports to India……….23
Table 3.2.2 Exports to Mainland China/ Hong Kong………..24
Table 3.2.3 List of Products Exported to India………..………..25
Table 3.3.1 List of Products Exported from India to Taiwan………...29
CHAPTER 4 Table 4.1.1 Taiwan Export to world major countries………..35
Table 4.1.2 Taiwan’s trade with BRIC markets………..36
Table 4.2.1 India’s ranking among world Export & Import………...38
Table 4.2.2 Taiwan’s participation in India’s Export………..39
Table 4.2.3 Taiwan’s participation in India’s Import………...40
CHAPTER 5 Table 5.1 Export & Import Value………...42
List of Figures
Figure 2.1 India’s Economic Fund: India: Past, present and Future……….14 CHAPTER 3
Figure 3.1 Economic Structure……….21 Figure 3.2 Full Functioning of Industrial Information about Taiwan…………...26
Chapter I: Introduction
The relationships between India & Taiwan have improved since 1990. So, in this paper we decided to work on the analysis and understanding of the import and export between these two countries. There has been much discussion on the topic of globalization of the world economy (e.g., Levitt, 1983; Yip, 1989; Held et al., 1999)
【 1 】 . Globalization reflects a state of affairs in which a country becomes more interconnected with the rest of the world (e.g., Levitt, 1983; Bordo, 2002). 【2】 Some studies, such as Husted (1992) 【3】, which use US quarterly data for the period 1967–
1989, have shown that there is a long-run relationship between imports and exports and that the sign on the estimated co-integrating coefficient is positive. In the area of international trade, the long-run equilibrium relationship between imports and exports has received some attention; see, for example, Fountas and Wu (1999), Granger (1986), Gould and Ruffin (1996), and Husted (1992) 【 4 】 among others. The drivers of globalization include elimination of trade barriers and free flow of products and services across countries (e.g., Levitt, 1983; Yip, 1989; Hill, 1997).The purpose of this paper is to explain all kinds of Imports and Exports between the two Giant Economies of Asian Continent. 【5】
Most of the Data and information is collected from the Different Financial and economical websites of both countries and the different economical Journals. The contribution of this study is the extension of the analysis of these two countries using recent advances in time series econometrics.
That paper conceptualized globalization in terms of the free flow of four major components: (1) goods and services, (2) people, (3) capital, and (4) information.
The current paper focuses on the free flow of goods and services, one of the four major components of globalization. 【6, 7】
Our main motive of writing this paper is to encouraging more and more people for business, encouraging more firms and companies to Import and Export.
n the Chapter 1, we give a brief introduction about the paper. As such we have not so much literature review for this paper so we take most of the references from Indian and Taiwan Government official websites. In this paper we are not using value test. In this paper we tried to provide the Qualitative data for the study about the India & Taiwan Export-Import.
In the Chapter 2, we explain the economical, political, geographical overview of Taiwan and India. In this section we tried to cover all the information related to both countries like the economical trends, economic indicators, branches and the share of the industry in their economy. We also focus on the International trade and their rules and regulations on the import-export policies. How effective is the transportation and the different means of the transportation in both the countries. Later in the Chapter 2, we explained the different standards, Patents and the brands information.
In the Chapter 3, we focused on the different trends of Import-Export between India & Taiwan on their different perspectives. We also showed the list of the different
products which are exported and imported to and fro India and Taiwan. Later on in the same section we discussed about the commercial settings, industry participation and size of companies participation in both the countries.
In the Chapter 4, we discussed about the Importance of Taiwan and India in world market on both country’s perspective. The share of India & Taiwan in the World economy and discussed how world export-import market is increasing year by year. The data shows us that the business between these two countries is very promising in the future and will grow faster in these few years.
In the Chapter 5, the summary and conclusion part is covered. In this chapter we explained the last 5 years with a table. The table shows the total import and exports have been made between Taiwan and India.
The main motivation behind this paper is to know about the market growth and the level of business between India & Taiwan. The economy of India is growing at the rate of 9% per year so there are more opportunities of doing business with India.
Increasing integration of the Asian Tigers with the world economy through trade has exposed their income and trade to greater uncertainty and volatility. In this Paper, we aim to evaluate the relative importance of different determinants of international trade and economy, namely economies of scale, infrastructure and locations in India and Taiwan and their Import Exports of different scales. We present here the latest data of year 2005, 2006 and 2007.Our main motivation for this paper is to increase the productivity of business between these countries in the field of import and export.
1.2 Literature review
In this paper we collect most of the data with the help of Internet and the Government recognized data from the different organizations in Taiwan like TAITRA, CENTRA, and WORLD TRADE ORGANIZATION OFFICE, in Taipei and the Central Reference Library, Taipei. As such we don’t have any reference study for this paper and we collect our data from the Internet and different Journals and Papers.
1.3 Methodology and Approach
In this study we didn’t test any value and using no T-value testing for our data.
Our data is very Qualitative and useful for the further studies. This data is collected from the different government based Organizations and websites held by government in Taiwan. The Information we are using here for India is from some Journals and the website of Ministry of Commerce, India and some trading websites based in India.
This study will be helpful for the further studies to know the relationship between India and Taiwan and their trends of Trading.
Chapter II: Introduction of Taiwan & India’s Economic Overview
Taiwan has a dynamic capitalist economy with gradually decreasing guidance of investment and foreign trade by the government. Real growth in GDP has averaged about 8% during the past three decades. Exports have grown even faster and since World War II, have provided the primary impetus for industrialization. Inflation and unemployment are low; the trade surplus is substantial; and foreign reserves are the world's fourth largest.
Agriculture contributes 3% to GDP, down from 35% in 1952, and the service sector makes up 73% of the economy. 【8, 51】
The economy of India, measured in USD exchange-rate terms, is the twelfth largest in the world, with a GDP of around $1 trillion (2008). It recorded a GDP growth rate of 9.0% for the fiscal year 2007–2008 which makes it the second fastest big emerging economy, after China, in the world. 【9】At this rate of sustained growth many economists forecast that India would, over the coming decades, have a more pronounced economic effect on the world stage. 【10, 11】. India's economy is diverse, encompassing agriculture, handicrafts, textile, manufacturing, and a multitude of services.
Although two-thirds of the Indian workforce still earns their livelihood directly or indirectly through agriculture, services are a growing sector and play an increasingly important role in India's economy【12, 49】. The advent of the digital age, and the large number of young and educated populace fluent in English, is gradually transforming India as an important 'back office' destination for global outsourcing of customer services and technical support. India is a major exporter of highly-skilled workers in software and financial services, and software engineering. Other sectors like manufacturing, pharmaceuticals, biotechnology, nanotechnology, telecommunication, shipbuilding, aviation , tourism and retailing are showing strong potentials with higher growth rates.
2.1 Taiwan’s Economic Overview
2.1.1 Taiwan Economic trends and branches of Industries.
This section we will discuss about the economic value and economic state of Taiwan. Through nearly five decades of sound economic management, Taiwan has transformed itself from an underdeveloped, agricultural island to an economic power that is a leading producer of high-technology goods. The GDP growth rate reached 4.7% in 2006 and 4.1% in 2007. It is forecasted of 3.8% for 2008 by IMF. Depletion of public funds is the main weak spot of the economy. Consumer price inflation are weak (1.2% in 2007). The current-account surplus will narrow an average of 4.7% of GDP in 2008.【14, 51】.
Indicators 2007 2008
GDP (USD billion) 375.645 398.408
GDP (constant prices, annual % change) 4.1 3.8
GDP per capita ( USD) 16 274 17 106
Inflation rate (consumer prices, annual % change) 1.2 1.5 Source IMF- World Economic Outlook Database.
General Economic Indicators
Indicators 2004 2005 2006
GDP (USD billion) 331.13 355.187 364.563
GDP (constant prices, annual % change) 6.2 4.1 4.7 GDP per capita ( USD) 14594.204 15598.626 15936.094 Inflation rate (consumer prices, annual % change) 1.6 2.3 0.6
Unemployment rare (%) 4.4 4.1 3.9
External debt (USD billion) 909.621 1022.149 ….
Official exchange rate per USD ( period average)
Source IMF- World Economic Outlook Database.
Foreign Direct Investments 2004 2005 2006 World rank(*) 2006 FDI inflows (USD million) 1,898 1,625 7,424 119/141
Source: UNCTAD- World Investment Repot
Foreign Trade General indicators
Indicators (USD billion) 2004 2005 2006 Imports of goods
Exports of goods Trade balance Current account
Source: World Bank- World Development Indicators
The table above is taken from the World Bank Website. The table above shows a rough data of the Taiwan’s economic forecast, Economic Indicator, Investments and Foreign Trade. Further In the paper, we will show you the complete data. The Economic
forecast shows the GDP rate and the inflation rate of the Taiwan economy. In the Table you can find the Economic Indicator, in which you can see the GDP, Unemployment rate, external debt and the Official exchange rate for the year 2004, 2005, and 2006. In the Investment table, shows the FDI inflows of the three different years and the world ranking of the Taiwan. 【15】
The agriculture sector contributes nearly 2% to the GDP. Taiwan's main crops are rice, sugarcane, fruit, and vegetables. Taiwan has limited natural resources. The manufacturing industry accounts for 50% of the GDP. Even though traditional industries such as iron and steel, chemical, mechanical still account for almost half the industrial production, but new industries are most dynamic. Taiwan is one of the largest suppliers of semi-conductors, computers and mobile phones in the world. Taiwan is world's largest supplier of computer monitors. Faced by a continuous relocation of labour-intensive industries to countries with cheaper work forces (especially China), Taiwan's future development will rely on further transformation to an advanced technology and service- oriented economy. 【14】
2.1.2 International trade
Taiwan's economy remains highly export-oriented. Hence it depends on an open world trade regime and remains vulnerable to downturns in the global economy. Taiwan is a member of the Asian Development Bank, the WTO, and the Asia-Pacific Economic Cooperation (APEC) forum. Taiwan is also an observer at the OECD. Taiwan's top three export partners are: China, the USA, and Hong-Kong. Taiwan mainly exports electrical, electronic and computing equipment. Its top three import partners are: Japan, the USA and China. It mainly imports mineral fuels & oils, electric & electronic components, and raw materials. China (including Hong Kong) accounts for over 25% of Taiwan's total trade and almost 40% of Taiwan's exports. Trade with the EU accounts for less than 15%
of the country’s total trade. 【14】
The Asian financial crisis had a major impact on Taiwan’s economic growth in 1998, with the growth rate only reaching 4.8%; however, the island still achieved the second highest economic growth behind China among Asian countries. The consumer price index increased at a moderate rate and unemployment increased slightly to 2.7%, owing to sluggish exports and decline in the real estate and stock markets (Council for Economic Planning and Development, 1999a). For the first time since 1983, exports suffered a negative growth and imports recorded a serious drop for the first time since 1985. In 1998, the island’s total trade was $215.4 billion, a decline of 8.9% from the that of 1997. Exports for the year accounted for $110.6 billion, of which minerals were valued
$49.0 million. Imports declined to $104.8 billion 【16】
2.1.3 Exim (Export & Import) regulations and custom & duties
This section is about the export import policies of Taiwan. At present, imported goods are classified into two categories: the authorized goods, and the controlled goods. The authorized goods category mostly comprises raw materials, capital goods,
semi-manufactured and consumer goods. The category of controlled goods includes definite products, subject to economical and strategic limitations (mainly products manufactured locally such as agricultural products, chemicals, iron and steel products and luxuries). For the import of certain products, a general import license must be obtained from the authorized bank. Sometimes, specific licenses issued by certain organizations are necessary (tobacco, wine, medicines). The import of controlled goods must be carried out along with state agents, certain specific organizations or public companies, such as the Trust exchange of China and the Taiwan Supply Bureau. The Taiwanese tariffs are based on the Nomenclature of the Harmonized system of Name and Codification of Goods. 【17】
2.1.4 Distribution of Work & Transportation
Apart from distinct opportunities offered to foreign companies thanks to modernization of the Taiwanese economy, Taiwan evolved into a centre of operation for Asia for several Western companies, by means of collaboration and joint venture agreements with Taiwanese partners. Thus Taiwan presented itself as an important investor in the countries of the zone (mainly in the Fujian's Chinese coastal provinces and Guangdong). The most important opportunities in terms of business are in the motorcar, aeronautics, telecommunication, railway industries and various labour and machinery industry sectors. Most purchases from governmental bodies are carried out by the Central Trust of China, a financial institution where the information about international tender openings can be obtained. The minority business is dominated by more than 400,000 small family-run businesses, although there are various state co-operatives. There is a recent development of commercial hypermarkets and self-service stores. In 1990, 137 supermarkets were opened. Taiwanese consumers are very much conscious of the price and quality of the products they buy【18】.
The transportation system of Taiwan is very well connected to all the metropolitan and small cities, which makes the transportation system very effective. The means of transport in Taiwan are as follows:-
Taiwan's road network is 20,156 km long, with the major part being tarred The roads which extend all over the coast with ramifications towards inland and main highway connecting the Taiwanese island from North ( Calling) to South ( Cashing) along the West coast. The network is currently expanding to the Western part of the island. Road transport is the most used way of transportation: in 1994 , 313.436 million tons of goods were transported by road.
Taiwan has a circular network of 1,108 km around the island, of which 500 km are electrified. One of the main objectives of the Six Years National Development Plan
1991-96, was the improvement of the rail network and also total electrification and construction of double track for 1999. There is also an expressway project which would connect the main zone of population of the West coast. This is planned to be achieved by 2003. In 1994, the rail traffic was 2,007 tons km.
In 1994, sea traffic reached 402,619 million tons of which 251,378 million tons (62.4 %) were transported through Kaohsiung's port. The other important ports are Keelung, Hualien, Taichung and Suao. Kaohsiung is the third most important port of the world in terms of volume of transportation. 【 19, 52 】
2.1.5 Standards & Patents
The organization in charge of the process of standardization, ratification and certification in Taiwan is the National Office of Standards, which is under the Ministry of Economy. This institution periodically publishes a brochure of standards (Chinese National Standards). The companies established in Taiwan can use the Cheng symbol, mark of quality, corresponding to the standards that are published by the National Office of Standards. In order to register a patent, a trademark or a technical design, it is necessary to present it beforehand to the Intellectual Property Office, and apply to an expert in Taiwanese patents recognized by the authorities. It is recommended to use the services of a competent legal adviser before applying for patent or trademark registration. The protection of a foreign trademark is allowed on reciprocal basis with the trademark's country of origin. 【19,53】
2.2 India’s Economic Overview
2.2.1 India’s Economic trends and branches of Industries.
India is continuing to move forward with its market-oriented economic reforms program that started in 1991. India is the world's 12th largest economy and the 3rd largest in Asia, after China and Japan. The GDP growth rate was 8.0% in 2004, 9.0%, 9.7% and 8.9% in 2005, 2006 and 2007 respectively. Strong domestic demand will lead to a significant widening of the merchandise trade deficit in 2007 & 2008; however current- account deficit will remain less than 3% of GDP because of growing export of services.
Inflationary pressures will be difficult to control (estimated at 6.2% in 2007). Public funds are the economy's main difficulty: public debt accounts for 90% of the GDP.
Government has launched major investments programs to improve the country’s infrastructure especially roads, ports & airports. Despite good economic results, India remains a poor country with 25% of its population still living below the poverty line.
Indicators 2007 2008
GDP (USD billion) 1089.944 1249.439
GDP (constant prices, annual % change) 8.9 8.4
GDP per capita ( USD) 956 1089
Inflation rate (consumer prices, annual % change) 6.2 4.4 Source IMF- World Economic Outlook Database.
General Economic Indicators
Indicators 2004 2005 2006
GDP (USD billion) 666.305 778.666 873.659
GDP (constant prices, annual % change) 7.9 9 9.7
GDP per capita ( USD) 617.521 710.461 784.962
Inflation rate (consumer prices, annual % change) 3.8 4.2 6.1 Unemployment rare (%)
External debt (USD billion) 139723.1 138300.2 ….
Official exchange rate per USD ( period average) 45.31647 44.09998 45.30701 Source IMF- World Economic Outlook Database.
GDP per activity sector 2004 2005 2006
Agriculture and fishing (%) 18.79 18.39 17.55
Industry and mining (%) 24.47 27.33 27.71
Services 53.74 54.37 54.74
Foreign Direct Investments 2004 2005 2006 World rank(*) 2006 FDI inflows (USD million) 5,771 6,676 16,881 113/141
Source: UNCTAD- World Investment Repot
Trade by Partner Countries
Main Customers (% of Exports) Percentage
United Arab Emirates 9,50
United Kingdom 4,40
Main Suppliers (% of Imports)
Saudi Arabia 7,20
USA 6,30 Switzerland 4,90
United Arab Emirates 4,70
Source: Comtrade 2006
In the table above you can see the rough data of Indian Economic Forecast and economical Indicators, Investment and The Import and Export by Partner countries.
Further in this paper you can see the detailed data of Import and Export of India.
This topic shows the main branches of the various industries of India. India is the world's fourth agricultural power. Agriculture contributes 20% to the GDP and employs almost two-third of the active population. With the largest livestock in the world, India is one of the world leaders in production of milk, fruits, vegetables, wheat, rice, tea, cotton and sugar. There are considerable mineral deposits in the country. Coal is the country's main energy source (India is the fourth largest world producer of coal). In the manufacturing industry, textile plays a predominant role. Chemical industry is the second largest industrial sector (12% of the GDP). New technologies sector is also expanding.
The participation of the Indian IT industry is growing very fast. The rapidly growing
software sector is boosting service exports and modernizing India's economy. The software export revenues generate in financial year 2005/06 reached USD 17.2 billion.
The telecommunication sector is also in full boom.
2.2.2 International trade
The share of India in global trade is not so high but still India is a growing power Economy. India’s share in global trade still remains less than 1%. The main hurdles are inadequate infrastructure, a cumbersome bureaucracy, corruption, labor market rigidities, and reservation of key products for small-scale industries. Its top three export partners are:
the USA, United Arab Emirates and China. The commodities mainly exported are jewels (nearly 80% of diamonds sold in the world are cut in India), mineral fuels, clothes &
fabrics, and organic chemicals. India’s top three import partners are: China, the USA, and Switzerland. It mainly imports mineral fuels & oils, precious stones, electric &
mechanical machinery & equipment, computer equipment, and iron & steel.
The manufacturing sector has been the key driving force for Taiwan’s economic development. Over the past 50 years, the government and the private sector in Taiwan have been working together to continuously enhance industrial competitiveness and to achieve steady economic growth. As a result of these efforts, Taiwan has become the global center for IC foundry services as well as a manufacturing powerhouse for many high-tech products. After many years of promoting internationalization and liberalization, Taiwan’s infrastructure, industrial parks, human resources, technological capability, and taxation system are all on a par with those of the major industrialized countries. In response to the keen competition in the world market stemming from globalization, the Taiwan government has made great efforts to develop key industries, particularly the so- called “Two-Trillion and Twin-Star Industries.” These are the semiconductor, flat panel display, digital content, and biotechnology industries. Meanwhile, we encourage enterprises to establish their operational headquarters, R&D centers, and international logistics centers in Taiwan. 【20,】
2.2.3 Exim (Export and Import) regulations and customs duties
In this section, the import regulations and the custom duties are been discussed.
To carry out imports, importers should be registered in the Directorate General of External Trade, which sets up the Export and Import Policy (the last "Exim Policy" sets the rules for the period 1997-2002). There are still some non-tariff barriers, especially a system of license concerning 40% of the imports, and covering all customs rules. There are two lists: the negative list (for about 3000 items including textiles) for which the licensing may be from a simple licensing to a complete prohibition of the item (for example second hand machines) and a second list, the "Open General License"
concerning the rest of the products, that are not subject to a license. Furthermore, 44
products, (such as loose food-processing products) can be imported only by State monopolies and are subject to a preliminary licensing of the government (alcohol, for instance). 【21】
Another system of license was also set up to develop exports: the "Special Import License" (SIL), granted to exporters. These exporters are classified into 4 categories:
Export House, Trading House, Star Trading House, Great Star Trading House, depending on their turnover from their exports. They are authorized to obtain special Import licenses that are proportional to their export turnover.
It is difficult nowadays to export textile and clothes and also a certain number of consumer goods (such as farm products for instance) to India because of the numerous administrative constraints, despite several liberalizations. Furthermore, despite the absence of Import quotas, some products, normally subject to license, are not authorized to enter the country when the authorities feel that the quantities bought were too huge.
Finally, there are certain special zones (Free Trade zones, Export Processing Zones, Electronic Technology Area and Jewelers Areas). Within these zones, companies benefit from exemptions of customs duty and local taxes under certain conditions (in proportion to the percentage of their exports). It may however be pointed out that the big commercial "blocks" such as the European Union and the USA have begun some bilateral negotiations to soften these conditions. India therefore agreed to reduce the number of products of the negative list and according to the origin of products; it is more or less easy to obtain this license.
In India the custom duties are very high. India applies the Harmonized Customs System. Customs duties are calculated Ad valorem on the CIF value of goods. The Administration of customs and Excises is in charge of imposing import duties.
Despite a general decline of customs tariffs within the framework of their WTO participation, India remains one of the countries where the customs duty is the highest.
There are 4 basic rates: 5%; 15%; 25% and 35%. However customs duty on some products such as wines and spirits is 245% and over 100% for petrol.
To these basic duties, a 10% surcharge can be added. India also applies some
"countervailing duties" to compensate for the loss of excise duty, which it would have earned on raw materials, components and ingredients if the product had been made in India.
In order to know the exact amount of the applicable customs duty on a product, it is therefore necessary to add: the basic customs duty surcharge + countervailing duties.
Moreover, it is necessary to note that an Additional Special duty of 4 % on the sum of the first 3 taxes can also apply to a certain number of imported products. 【23,】
2.2.4 Distribution & Transportation
The main economic zones in India are Andhra Pradesh in the South East, Rajasthan in the North, Maharashtra (Bombay region) in the South West, Haryana (New Delhi region) in the North and Punjab, also in the North.
(a)The Business to Consumer (B to C) market: One of the main characteristics of this market is the lack of organization, with a clear domination of small structures. There are more than 5 million retailers, for the greater part family-run businesses with an average size of 60 square meters area. However, certain reforms starting in 1991 modified the consumers' habits, which are now looking for diversified and branded products. Some structures like Ebony or Shoppers stop departmental stores appeared inspired by Occidental models and who favors choice of products and the brands.
Franchising also appeared because it enlaces having a wide distributive network with lesser costs in a country with strong regional disparities. However, the Indian cultural, structural and regulation characteristics tend to slow down a sharper evolution of the distribution sector.
(b)The Business to Business (B to B) market: The size of the market and its growth rate in recent years encouraged lots of investors to invest in India. In 1991 an open policy concerning FDI (Foreign Direct Investment) with an annual "target of USD 10 billions of FDI" was set up by the government.
The Transportation of India is not that much effective but still has the largest railway network in the world. The Transportation is one of the biggest factors in the development of a country. Here are some means of transport which are mainly used in India
The road network exceeds 3 million km of roads, of which 52,000 km of highways is in a bad state but handles 60% of interurban ground traffic of goods and passengers.
Various projects for the improvement of road infrastructure are currently in process with the support of the World Bank which is one of the main money providers of India as well as the Bank for Asian Development.
There is a rail network of 107,000 km length, of which 12,000 km is electrified. It connects all Indian cities, but the capacity to transport goods is weak. A project for the development of the rail network is in progress. The national company, which runs the whole rail network, is Indian Railways. They transported 410 Mt of goods in 1997. The main goods transported by rail are coal, cement, iron ore and cereals.
The sea transport handles 90% of the international transportation of goods from or to India. There are 11 important ports along the 5,560 km of Indian coasts (181 ports in total) which handle about 215 million tons of goods a year. The main ports are: Bombay,
Calcutta, Chennai and Kulpi in West Bengal.
The river traffic is important, in particular on the Ganges, Brahmaputra, Narmada and Godavari.
The main international airports of the country are Delhi, Calcutta, Bombay and Madras. Bombay's airport ranks 64th in the world, and handled 283,539,000 tons of freight in 1999. The main Indian company is Air India for international flights. As far as Sahara airline and Jet airways is concerned, they handle only regional, domestic and few International flights. 【23, 24】
2.2.5 Standards & Patents
In this topic we discuss about the standards of India and how it is works. The central organization in the Indian system of normalization is the Bureau of Indian Standards (BIS), a private and non-profit body that issues the license to use the BIS mark (Certification Mark) on the products. It ensures compliance of the conditions of normalization of the products. The standards are rather similar to the American and English ones. In case of absence of an Indian standard, American or English standards are used. The organization in charge of trademark patents and technical designs is the Indian Patent Design and Trademarks Office. Trademarks and foreign patents do not benefit from any protection in India. The Indian rule on intellectual property is not compatible to the international rule. In most cases, local laws only recognize patents concerning the manufacturing process. 【25】
Chapter III: Trends & Prospects of Import-Export between India & Taiwan
Taiwan’s economic strength is rooted in its industrial base, which started with a manufacturing boom in basic-level exported goods and progressed to technology- intensive industries, such as electrical goods and chemicals. Today Taiwan is one of the world’s largest producers of computer-related products, and boasts an extensive, well- established network of industrial zones and a growing number of high-technology industry clusters, which are supported by high-quality human resources and fully integrated supply-chain networks. 【26】 If we talk about Indian then Exports are the major focus of India's trade policy. The export sector is a core sector in the economic growth of the country and is important for addressing macro economic concerns. The incentives offered by the export promotion package are comparable to that of any other country. The focus remains on inducing the foreign investors to set up export oriented units in India. India offers a production base for foreign markets around the world for sourcing components and products manufactured at a low cost.
3.1 India-Taiwan Commercial and Economic Relations
India does not have diplomatic relations with Taiwan (Republic of China). India has non-governmental economic, commercial, cultural and people-to-people exchanges and contacts with Taiwan within the framework of India's "One-China" policy. The India Taipei Association (ITA) Office has been established in Taipei since 1995 to promote non-governmental interactions between India and Taiwan, and to facilitate business, tourism, cultural and people-to-people exchanges. India-Taipei Association has also been authorized to provide all consular and passport services. India’s bilateral trade with Taiwan is only about US$2 billion (less than 1 percent of the total). Unlike South Korea, Japan, Singapore and China, Taiwan has not made significant direct investments in India.
For India, the benefits of greater engagement with Taiwan are also high. Taiwan has proven global competitiveness in manufacturing, particularly in electronics hardware, which India wants to develop. Its technological research capabilities can provide synergies with India’s needs and capabilities in this area. Combining Taiwan’s hardware expertise with India’s software capabilities, particularly in Knowledge Process Outsourcing (KPO) could be mutually beneficial’s Major Indian exports to Taiwan include unwrought Aluminum, Copper, Cotton yarn, Chemicals, Granite, Iron Ore and non-industrial diamonds. Major Taiwanese exports to India include Digital mobile phones, Integrated circuits, Tyre cord fabric, Pigments, PVC and Compact Disks.
India's share in Taiwan's total imports is slightly more than 0.5%.
In order to coordinate the bilateral trade activities, China International Economic Cooperation Association (CIECA), Taiwan and FICCI, India have set up India Taiwan Business Cooperation Committee (BCC). The 9th Joint meeting of BCC was held in October 2003 in New Delhi. Taiwan's Ministry of Economic Affairs and Bureau of Foreign Trade have designated Year 2004 as a Focus India year, and are organizing
several trade and investment delegations to India, including in the chemical, textile, IT, medical appliances and auto-components sectors. Taiwanese investment approved by the Secretariat of Industrial Approvals (SIA), India over last decade account for Rs.495.2 crores. Taiwanese companies that have already invested in India include Winny Electronics, China trust Commercial Bank, Acer, D-Link (listed on Bombay Stock Exchange), Hotline Glass Limited and Lanner Electronics. Taiwanese Investment to India in 2002 totaled Rs.356.8 crores. In 2004 some Taiwanese companies are looking into establishment of Liaison or \branch Offices in India. An Agreement on Promotion and Protection of Investment was signed by the Directors General of India Taipei Association, Taipei and Taipei Economic and Cultural Center, New Delhi on October 17, 2002.【27, 28】
In the table above you can see the countries and the economies listed in order of their world S&E article share in 2003. In this table, Hong Kong is including in china. In this data you can see India and Taiwan are on 3rd and 4th place respectively. These two countries have a promising growth rate in different years. Later you can see that how strongly they are heading to the great business relationship. Basically the Figure above shows the BRIC countries and their economic growth. As Taiwan is not a part of BRIC countries but it has a strong presence in the world Export-Import Business. Taiwan is one of the largest suppliers of IT products to these BRIC countries.
3.2 Taiwan’s Perspective
3.2.1 Taiwan’s Export-Import to India
In this section we will discuss about the Taiwan’s Export- Import to India.
According to the Table, we can see that India is one of the biggest Emerging market for Taiwan Export-Import Industry. India is another bright spot on Taiwan’s trade map.
Capitalizing on India’s booming economy, Taiwanese exports to that country shot up 66.4% to US$1.57 billion in the Jan.-Aug. period, ranking India at 18th place among Taiwan’s overseas markets. Partly due to the strong demand among Indian automakers and auto-parts makers, exports of Taiwanese machinery and mechanical appliances to the market leapt 30% to US$267 million in the period to become the largest category of Taiwan exports to that market. Other top export categories were mineral fuels and mineral oils, skyrocketing 421% to US$252 million; plastic products, up 48% to US$241 million; electrical machinery and home appliances, up 85.4% to US$221 million; organic chemicals, up 68.6% to US$187 million; and iron and steel, soaring 225.5% to US$109.7 million.
The brisk export growth is also partially attributed to mounting Taiwanese investment in that country. Hon Hai Precision launched its first plant for printed circuit boards, cell phone components, and connectors in Chennai, capital of the Tamil Nadu state, as part of its US$1 billion project to build a high-tech park there. In mid-2007, Hon Hai signed a letter of intent with the Indian government to erect a similar facility in Sriperumdur at a cost of US$ 1 Billion【29, 55】
Exports to India, Jan- Aug 2006/2007
Products Jan- Aug 2006 Jan- Aug 2007 Rank Change
Total 946,724,698 1,574,998,476 66.363
Chapter 84 nuclear reactors, boilers machinery and mechanical appliances; parts thereof
205,544,404 266,991,370 1 29,895
Chapter 2 mineral fuels, mineral oils and products of their distillation, bituminous substance, mineral waxes
48,197,611 251,234,358 2 421,259
Chapter 39 plastics and articles thereof
163,178,431 241,467,987 3 47,978 Chapter 85 electrical
machinery and equipment and parts thereof; sound recorders and reproducers, television image and sound recorders and reproducers, and parts and accessories of such articles
119,046,249 220,665,269 4 85,361
Chapter 29 Organic chemicals 110,869,646 186,927,266 5 68,601 Chapter 72 iron and steel 33,697,178 109,697,050 6 225,538
Source: Bureau of Foreign trade Ministry of Economic affairs
As you can see in the table above you the biggest markets are nuclear reactors, machinery and machinery appliances. The second biggest market for Taiwanese business man is mineral fuels, mineral oils and products of their distillation. Plastics are also in great demand so it comes to number three with their demands. Electrical Machinery and equipments comes to number four and the industry is in the all time high of the growth in India. There are great expectations from Taiwanese Exporters to grow the industry level in different countries. Organic chemicals and Iron and steel are on the fifth and sixth position respectively. In India machinery industry is the biggest shipments for Taiwan.
Despite high expectation among Taiwanese exporters, Taiwanese exports to India dropped 7% to US$1.47 billion in 2006, with shipments of machinery and mechanical appliances rising 16% to US$310 million, the largest item, followed by plastic products with a 5.62% decline to US$230 million, electrical machinery/equipment and home appliances remaining virtually unchanged at US$202.8 million, and organic chemicals growing 14.6% to U$217.3 million. One main reason for the overall export decline to India is 70% plunge of mineral fuel and mineral oil exports to U$88 million. Several items, though, still racked up exceptional performance, including iron and steel, which gained 67.5% to US$30.3 million, rubber products, up 74% to US$25.7 million, and optical products, improving 35% to US$22.3 million. 【29, 30】
Exports to Mainland China/Hong Kong, Jan- Aug, 2007
Products Jan- Aug 2006 Jan- Aug 2007 Rank Change
Total 57,158,800,444 62,571,955,327 9,470
Chapter 85 electrical machinery and equipment and
parts thereof; sound recorders and reproducers, television image and sound recorders and reproducers and parts and
accessories of such articles
21,666,377,038 24,389,135,118 1 11.537
Chapter 90 optical Photographic,
cinematographic, measuring, checking, precision, medical or surgical instruments and
apparatus; parts and accessories thereof
8,517,618,597 9,322,648,064 2 9.451
Chapter 39 plastics and articles thereof
5,135,105,443 5,810,477,096 3 13.152 Chapter 84 nuclear reactors,
boilers machinery and mechanical appliances; parts
5,44,,195,209 5,444,276,902 4 0.057
Chapter 29 organic chemicals 2,481,558,579 3,352,833,321 5 35.110 Chapter 72 iron and steel 2,251,596,589 2,432,720,994 6 8.044
Source: Bureau of Foreign trade Ministry of Economic affairs Table 3.2.2
Fortunately, Taiwanese exporters have been making major inroads in emerging markets other than China this year, especially for industrial materials and machinery equipment, enabling the island’s overall exports to grow by 8% to US$156.5 billion, in the Jan.-August period. Vietnam has emerged a star overseas market for Taiwanese goods, as Taiwanese exports to that country jumped 28.6% to US$4.2 billion in the first eight months this year, making it the seventh largest overseas market for Taiwanese exporters, up from ninth place in 2006.Taiwan’s exports witnessed a sharp annual growth of 22.8%
to reach US$24.25 billion in March of this year; while imports jumped by 37.3% to US$24.08 billion, according to the statistics released by the Ministry of Finance (MOF).
【29, 31, 56】Taiwan posted an annual growth of more than 23% in exports to Hong Kong & China, India, South Korea, and six member nations of the Association of Southeast Asian Nations (ASEAN), namely, the Philippines, Singapore, Thailand, Indonesia, Malaysia, and Myanmar.
3.2.2 List of Taiwanese products Exported to India
Here is the data related to the Taiwan’s Export to India. 【32】
Taiwan - Exports to India
January – December, Billions of Taiwan Dollars
Description 2006 2007 Share(%)
Chang e %
India 1,447.513 2,302.367 0.68 0.98 59.06
Machinery 302.636 407.091 20.91 17.68 34.52
Plastic 230.085 355.094 15.90 15.42 54.33
Electrical Machinery 199.052 350.116 13.75 15.21 75.89 Mineral Fuel, Oil Et 88.102 324.019 6.09 14.07 267.78 Organic Chemicals 166.630 264.824 11.51 11.50 58.93 Iron And Steel 62.715 149.475 4.33 6.49 138.34 Manmade Filament,
51.300 52.627 3.54 2.29 2.59
Impregnated Text Fabre
52.604 51.986 3.63 2.26 -1.17
Tanning, Dye, Paint 31.634 36.992 2.19 1.61 16.94 Iron/Steel Products 30.303 32.347 2.09 1.41 6.74
Rubber 25.702 32.230 1.78 1.40 25.40
Optic,Nt 8544;Med In
21.469 23.625 1.48 1.03 10.04
Vehicles, Not Railway
15.386 18.169 1.06 0.79 18.09
Source of data: Taiwan Directorate General of Customs
3.2.3 Commercial Service in Taiwan
Key factors for doing business successfully in Taiwan include finding good partners who have knowledge of the local market, Local Language and procedural issues;
good planning; due diligence and follow-up; and perhaps most importantly, patience and commitment. Taiwan. Companies, particularly small and medium-sized enterprises, should consider approaching India’s market on a local level, as good localized information is a key to success in small country.
Taipei: As the capital of Taiwan, Taipei has been at the centre of rapid economic development in the country and has now become one of the global cities in the production of high technology and its components. This is part of the so called Taiwan miracle which has seen dramatic growth in the city following foreign direct investment in the 1960s. Taiwan is now a creditor economy, holding one of the world's largest foreign exchange reserves of more than $500 billion (100 G$) in 1999. Despite the Asian financial crisis, the economy continues to expand at about 5% per year, with virtually full employment and low inflation.
Taipei and its environs have long been the foremost industrial area of Taiwan. Most of the country's important factories producing textiles and wearing apparel are located there; other industries include the manufacture of electronic products and components, electrical machinery and equipment, printed materials, precision equipment, and foods and beverages. Services, including those related to commerce, transportation, and banking, have become increasingly important. Tourism is a small but significant component of the local economy. 【33】
Fu F ul ll l Fu F un nc ct t io i o ni n in ng g o of f th t he e I In nd du us st t ri r ia a l l I In nf f or o rm ma at ti io on n a a bo b ou ut t T Ta ai iw wa an n
Hsinchu Science Park
Electronics and Information
Nankang Software Park
Central Science Park
Aerospace Yunlin Technology Industrial
Optoelectronics Southern Science Park
Hsinchu: The city is the base for high technology industry in Taiwan. Hsinchu Science and Technology Industrial Park is home to 420 high tech companies including TSMC, Philips, United Microelectronics Corporation, Holtek and AU Optronics. As the result, the city has the highest income level. Hsinchu Science Park was established by the government of Taiwan, ROC on December 15, 1980 with investment from the Kuomintang. It straddles Hsinchu City and Hsinchu County on the island of Taiwan. A total of 420 high-tech companies, mainly involved in the semiconductor, computer, telecommunication, and optoelectronics industries, have been established in the park at the end of December 2003.
Hsinchu Science Park is now one of the world's most significant areas for semiconductor manufacturing. It is home to the world's top two semiconductor foundries, Taiwan Semiconductor Manufacturing Company (TSMC) and United Microelectronics Corporation (UMC), both of which were established at the nearby Industrial Technology Research Institute and Taiwan is the only country that possesses a professional division- of-labor system in the semiconductor industry and also has the highest density of 12-inch wafer-producing fabs, most of which are based in the park. The purpose of the park was to attract high technology investment to Taiwan and to make the area the economic center for the information industry. The park was designed to cater for high quality R&D, production, work, life and also recreation. From its establishment in 1978, the government had invested 30.8 billion NTD on software and hardware ventures. In 2001, it developed 625 acres (2.53 km²) of land in the Park and 118 acres (0.48 km²) in southern Hsinchu, attracting 312 high-tech companies' investments. Viewing the performance of Hsinchu Science and Industrial Park in the past 21 years, it can be said that it holds a decisive position in the economic development in Taiwan, with international acclaim.
Although, the semi-conductor and related electronic business have been doing well, they have fierce competition from Japan, Korea, United States and Singapore. This has resulted in lower profits and over-supply of some electronic products such as memory and semi-conductors. Therefore manufacturers, government, academia, and the R&D sectors all recognized the challenges faced by Taiwan high-tech development. The government has endeavored to upgrade Hsinchu Science and Industrial Park into a global manufacturing and R&D center of high-end products. They also planned to intensify the cooperation among the manufacturing, academic, and research sectors, by introducing incubation centers, in order to elevate the technological standard in the park. Further, through the development of the northern, central, and southern industrial park and its satellite sites, it is hope to sow the seeds of high tech business in all of Taiwan, leading into the real high tech development era. There is also a science-themed amusement park nearby. 【34】
Kaoshiung: Kaoshiung is a city located in southern Taiwan. Kaohsiung City is also the most dense and the second largest city in Taiwan, with a population around 1.51 million.
Today as a major international port and industrial city in the southwest of the country, Kaohsiung is the most rapidly developing urban center of Taiwan. With an area of 154
km2, it has a large natural harbor, with the entrance in recent years being expanded, rock- excavated, and dredged.
As an exporting center, Kaohsiung serves the rich agricultural interior of southern Taiwan, as well as the mountains of the southeast. Major raw material exports include rice, sugar, bananas, pineapples, peanuts (groundnuts), and citrus fruits. The 2,200 hectare Linhai Industrial Park, on the waterfront, was completed in the mid-1970s and includes a steel mill, shipyard, petrochemical complex, and other industries. The city has a petroleum refinery, aluminum and cement works, fertilizer factories, sugar refineries, brick and tile works, and salt-manufacturing and papermaking plants. Designated an export-processing zone in the late 1970s, Kaohsiung has succeeded in attracting foreign investment to process locally purchased raw materials for export. There is also a large canning industry that processes both fruit and fish. 【35】
Taichung : Taichung is a city located in west-central Taiwan with a population of just over one million people, making it the third largest city on the island, after Taipei and Kaohsiung.Taichung has a vibrant, diverse economy that incorporates traditional businesses, small family-run shops and factories, large industrial areas, and a thriving commercial sector. The small business sector still thrives in the city and is in most evidence in the downtown area with small eateries, traditional markets, and other various family businesses. Xitun District is the home of Taichung’s Industrial Zone. Taichung’s World Trade Center Building is the symbolic heart of the zone, where various trade shows and exhibitions are held throughout the year. Most of Taichung’s traditional manufacturing base is in this area, which is the area of Taichung City that is nearest the port. In the northeast part of Xitun District, along the border with neighboring Taichung County, a new Science-based Industrial Park is under construction and is partially open.
This is expected to bring in thousands of additional quality jobs into the city.
The growing prosperity of Taichung residents has resulted in the explosive growth of the upscale retail sector, with the opening of massive up-market department stores, as well as the construction of more luxurious condo complexes in the rapidly growing areas near the new government complex, as well as the growth of up-market neighborhoods in Beitun District. 【36】
Tainan: Tainan is the fourth largest city in Taiwan after Taipei, Kaohsiung, and Taichung. It is officially administrated as a provincial city of Taiwan Province in the Republic of China. Tainan has been historically regarded as one of the oldest cities in Taiwan, and its former name, Tainan, has been claimed to be the source of the name Taiwan. It is also one of Taiwan's cultural capitals, as it houses the First Confucian School/Temple built 1665 on the island, the remains of the Northern and Southern gates of the old city, and countless other historical monuments. 【37】
3.3 India’s Perspective
3.3.1 List of Products Exported from India to Taiwan
Report on--India Export Statistics-Country Directory Value in Rs. Lakh
Qty in MT.
Country : TAIWAN Product Qty(2004-
Value(2006- 2007) Other cereals 11214.01 776.41 935.55 138.50 6256.00 599.06 Guar gum 775.22 390.78 1784.04 914.23 928.50 579.80 Poultry
Products 14.00 22.31 931.50 254.55 205.00 435.64
499.55 134.39 162.12 104.57 806.79 343.26
Ground Nuts 1014.07 346.02 791.45 233.58 1013.50 333.95 Dairy
products 101.78 101.50 171.00 150.11 125.13 297.65
Mango Pulp 0 0 273.00 106.68 384.00 158.74
Other Processed Fruits and vegetables
515.40 131.39 1195.57 418.12 379.53 126.48
Preparations 3317.49 148.89 221.80 88.31 311.35 115.48 Fresh Grapes 325.15 157.16 95.22 43.44 113.00 43.42
(walnuts) 161.30 180.29 145.20 200.93 11.50 28.07
Floriculture 22.57 41.86 26.77 40.44 16.49 27.74
Buffalo meat 0 0 0 0 25.00 25.58
Basmati rice 0 0 18.00 6.10 47.00 18.75
Confectionary 18.00 4.45 0 0 57.18 16.12
Fresh Onions 191.00 18.67 130.00 11.76 128.00 13.01 Cocoa
Products 0 0 0 0 6.00 8.75
Pulses 8.24 2.30 86.50 27.89 20.00 7.96
Vegetables 194.50 10.11 24.00 4.84 23.50 7.20
non alcoholic 17.00 3.46 13.00 3.29 15.00 3.42
beverages Dried and preserved vegetables
4.15 3.07 30.60 14.68 5.40 2.86
Fruits 0 0 10.00 3.86 4.00 1.92
products 26.00 5.07 81.20 12.38 0.67 0.12
Preparations 37.40 24.92 22.00 6.11 0.15 0.05
mangoes 0 0 23.41 9.84 0 0
Rice 22.10 2.67 200.00 20.47 0 0
Wheat 17350.00 746.46 0 0 0 0
Total 35828.93 3252.18 7371.93 2814.68 10882.69 3195.03
The above table show that the Export of India to Taiwan is agricultural based. The products which are exported from India are related to Food, vegetables, cereals, rice and Fruits. Machinery components are also imported from India. The Chemical products are in high demands these days. 【38】
3.3.2 Commercial Settings & Industry Participation
The India-Taiwan relationship is in the midst of a remarkable transformation. The two countries, politically and economically distant for much of the late twentieth century, now find their national interests converging on many points. The Indian market, and its one billion plus population, presents lucrative and diverse opportunities for Taiwan exporters with the right products, services, and commitment.
For calendar year 2005, Taiwan.-India two-way merchandise trade reached an all- time high of over 1 Billion USD, with Taiwan merchandise exports to India almost reaching a billion. India’s infrastructure, transportation, energy, environmental, health care, high-tech, and defense sector requirements for equipment and services will exceed tens of billions of dollars in the mid-term as the Indian economy globalizes and expands.
India’s gross domestic product (GDP), currently growing at over 8 percent annually (according to the International Monetary Fund), makes it one of the fastest growing large economies in the world. Construction of nearly everything from airports to container ports to teleports is setting the stage to remake India. 【39】 India’s entrepreneurs and technologists have the dynamism and knowledge to make their country a global economic power. While high tariffs and poor infrastructure present the biggest obstacles
to foreign investment and growth, India’s infrastructure requirements also present trade and investment opportunities for Taiwanese companies. 【40, 41】
Here you can see the industry participation on India in the Economy. The industry is divided in such a way that it will help the India to grow with a very strong base. The trade mission represents a diverse range of industry sectors, with the greatest participation from Medical/Healthcare companies, Information Technology companies, Energy/Power/Oil & Gas companies, and Telecommunications companies.
With more than 16 industry sectors represented, the overall breakdown of companies by industry sector includes: Medical/Healthcare (14%), Information Technology (11%), Energy/Power/Oil & Gas (10%), Telecommunications (10%), and Business Consulting Services (8%), Construction/Design/Engineering (7%), Chemicals and Materials (6%), Safety and Security (5%), Aerospace/Defense (5%), Other/Miscellaneous (5%), Industrial Machinery (4%), Legal Services (3%), Environmental Products & Services (3%), State Development Organizations (3%), Financial Services (3%), and Franchising (3%). There is also diversity in terms of the size of companies represented, with small, medium, and large businesses all participating. For example, 68% of participants represent small companies (1-500employees), 3% represent medium-size companies (500-1000 employees), and 29% represent large companies (1000+ employees)【40, 41, 54】
3.3.3 Commercial Service in India
Key factors for doing business successfully in India include finding good partners who have knowledge of the local market and procedural issues; good planning; due diligence and follow-up; and perhaps most importantly, patience and commitment. U.S.
companies, particularly small and medium-sized enterprises, should consider approaching India’s market on a local level, as good localized information is a key to success in such a large and diverse country. U.S. Commercial Service posts in Bangalore, Calcutta, Chennai, Hyderabad, Mumbai, and New Delhi will provide delegation members with indispensable information and advice based on their close contacts with local business and economic leaders.
Bangalore: With a population of 7 million, Bangalore is the capital of the State of Karnataka and the Silicon Valley of India. Also known as the Knowledge Capital and Biotechnology Capital, the city is India’s high profile Information Technology (IT) center.
In addition to its thriving IT and biotech sectors, Bangalore is the hub to India’s aerospace, electronics, machine tools, automation and food processing industries.
Opportunities also abound in and around Bangalore in infrastructure development projects, including airports, ports, roads, hardware/biotechnology industrial parks and townships.
Calcutta: With a metropolitan population of 13 million, Calcutta (known officially as Kolkata since 2001) is the capital of the state of West Bengal. Calcutta is the main commercial and financial hub of eastern India, which is home to a population of 280 million, who live in 12 states, contributing 22 percent of India’s annual net domestic product. The Communist party-led state government has in recent years adopted more investor friendly policies, which has led to a spurt in the city’s growth. Over 25 U.S.
companies currently have a presence in Calcutta in sectors such as IT, chemicals and petrochemicals, financial services, consumer goods, and engineering. American fast food companies such as Pizza Hut, Subway, McDonalds, and KFC are among the favorite anchor stores in many shopping malls. IT and IT Enabled Services (ITES), real estate, retail, food-processing, banking and insurance, chemicals and petrochemicals, and healthcare are burgeoning sectors in West Bengal that are receiving investment from India and abroad. Additional opportunities are emerging in infrastructure development projects, including power generation and airport and port development.
Chennai: With a population of over 4 million, Chennai (formerly called Madras), the capital of the State of Tamil Nadu, is fast becoming the “Detroit of India,” with Ford, Hyundai, and Mitsubishi manufacturing outside the city for both the local Indian and export markets. Other notable companies, such as Nokia, Motorola, and Flextronics, also have manufacturing facilities just outside Chennai, as do many IT and ITES companies.
Chennai has a good and growing medical infrastructure and new hospitals are being planned, creating opportunities for medical equipment and technology sales. Other promising sectors include chemicals, petrochemical processing, pharmaceuticals, education, entertainment, financial services, food processing, renewable energy, safety and security, and environmental technologies. Chennai has a well developed major port and an international airport.
Hyderabad: With a population of 7 million, Hyderabad is the capital city of the state of Andhra Pradesh and home to a number of prestigious institutions, such as the Indian School of Business, and key Indian public sector and defense enterprises. The city is also home to many major Indian pharmaceutical/biotechnology companies, including Dr.
Reddy Labs, Shanta Biotech, Aurobindo Biotech, and Bharat Biotech. A number of U.S.
companies have set up key operations in Hyderabad, such as Microsoft’s India Development Center and Google’s India Center. In and around Hyderabad there are good opportunities in a broad range of sectors, including IT, ITES, biotechnology, pharmaceuticals, textiles, food processing, safety and security, and defense. Hyderabad is well connected nationally and internationally with an international airport. To underscore its growing importance, both President George W. Bush and President Clinton visited Hyderabad during their visits to India.
Mumbai: With a population of over 17 million, Mumbai (formerly known as Bombay) is the capital of the State of Maharashtra and the commercial, financial and entertainment capital of India. The city is headquarters to almost all of India’s financial institutions, which handle over 35 percent of check clearances in terms of number and 60 percent in terms of value, for the entire country. It is also home to the country’s two largest stock exchanges (the Bombay Stock Exchange and the National Stock Exchange), its securities