WHY INDIA? CHAMPION SECTORS PROFILE INVESTMENT OPPORTUNITIES BUSINESS & REGULATORY ENVIRONMENT IN INDIA

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1 SECTOR PROFILE

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3 WHY INDIA? CHAMPION SECTORS PROFILE INVESTMENT OPPORTUNITIES BUSINESS & REGULATORY ENVIRONMENT IN INDIA

4 01 WHY INDIA?

5 Focus on infrastructure development Large and growing domestic consumer market Demonstrated capability to deliver high-quality, cost-effective solutions Large competitivelypriced skilled talent pool Worlds largest democracy with 1.3 billion people Integrated tax structure ADVANTAGEINDIA Enabling business environment Expertise across a spectrum of services Access to technology

6 INDIA - A FAVORED INVESTMENT DESTINATION GDP in current prices (US$ Trillion) GVA share of sectors in Fy18 Fastest growing major economy in the world in 2018 and Services 61% Agriculture 17% Industry 22% India s GDP is likely to touch US$ 5 trillion by th largest economy in the world by nominal GDP and 3rd largest economy globally by PPP Services Trade (US$ Billion) Exports Imports Category-wise Services Export ( , % share) 14% 10% Category-wise Services Import ( , % share) 17% 1st rank globally in inward greenfield FDI inflows in % 1% 1% 66% 15% Travel 1% 1% Transport Insurance G.n.i.e G.n.i.e- Government not included elsewhere; * includes software, business, financial and communication services Miscellaneous* India ranks 8th in global services exports accounting for 3.4% of world trade in commercial services Source: IMF, FDi intelligence report 2017, RBI, WTO Gross Foreign Inflows-FDI (US$ Billion) Others, 26% Power, 4% Chemicals, 4% Sector-wise FDI inflows (% share in inflows-apr 00 to Mar 17) Pharma, 4% Automobile, 5% Services, 57% USA, 6% Others, 22% Netherlands, 6% Top FDI source countries (% share in inflows- Apr 00 to Mar 17) UK, 7% Japan, 8% Mauritius, 34% Singapore, 17%

7 35 GROWTH ENABLERS Growing domestic consumer base Large, young human capital base Rising disposable income and urbanization More than 800 million people under the age of 34 years Urban Population and Per-capita Income Size of the workforce (millions)* Urban population (% of total) , , Per capita income Urban population Per-capita Income (INR) (Projected) 2050 (Projected) Korea Thailand Japan US Europe China India Per-capita Income data pertains to and Source: Census 2011, MOSPI * Population aged years Source: United Nations population statistics

8 02 CHAMPION SECTORS

9 ((( Healthcare Transport & Logistics Accounting & Finance Construction & Related Engineering Services ((( Tourism & Hospitality Environmental Services Communication Services Media & Entertainment IT & ITeS Financial Services Legal Services Education Services

10 INVESTMENT ANNOUNCEMENTS In 2016, The Chan Zuckerberg Initiative, the philanthropic body launched by Facebook CEO Mark Zuckerberg, invested USD 50 million in Byju s, an Indian education-tech startup. In 2016, Byju s Classes Think and Learn Pvt. Ltd. secured two deals worth USD 125 million from Sequoia Capital, Times Internet Ltd. and others. In 2017, private equity investor KKR has invested around USD 97.1 million in coaching firm Resonance Eduventures Ltd. Helion Venture Partners, a USD 605 million Venture Capital firm based in India, invested USD 10 million in Toppr, the online test preparation platform. Lightbox, a USD 100 million Venture Capital firm based in Mumbai, is helping in building Indian Tech companies. It has invested in startups like Embibe, one of the most popular EdTech companies. In 2017, Dabur India Ltd. opened a skill development centre for women in Dhekidol village in the state of Assam that will provide rural women with improved employment and self-employment opportunities. Source: Media reports

11 03 PROFILE: EDUCATION SERVICES

12 EDUCATION SERVICES IN INDIA The education industry in India is estimated to reach USD 144 billion by 2020 from USD 97.8 billion in India has become the 2nd largest market for e-learning after the US. Approximately 28.1% of India s population is in the age group of 0-14 years. This provides a good opportunity for growth in the Education sector. Source: India Brand Equity Foundation (IBEF)

13 BASIC INSTITUTION INFRASTRUCTURE IN TERTIARY EDUCATION IN INDIA Enrollment (in million) No. of Universities and Enrolment No. of Universities Govt. expenditure per student (% of GDP per capita) Government expenditure per student (as % of GDP per capita) and revenue expenditure (as % of GDP) Revenue expenditure (% GDP) Year Government expenditure per student (% of GDP per capita) No. of Universities Enrollment Revenue expenditure (% of GDP) Gross Enrolment Ratio (in %) Pupil - Teacher ratio (in %) Gross Enrollment Ratio (in %) Year Pupil -Teacher ratio (in %) Year Pupil - Teacher ratio Source: Ministry of Human Resource Development (Government of India), OECD, World Bank and All India Survey on Higher Education (AISHE, 2018).

14 INBOUND MOBILE TERTIARY STUDENTS TO INDIA AND FOREIGN EXCHANGE (FOREX) EARNINGS (TOP 10, PER YEAR IN ) Average Inbound mobile tertiary students - Top 10 source countries 10,000 9,000 9,144 8,000 Inbound students 7,000 6,000 5,000 4,000 3,000 2,000 1,000 4,404 2,756 2,088 1,896 1,479 1,459 1,236 1,185 1,116 0 Nepal Afghanistan Bhutan Nigeria Malaysia United Arab Emirates Iran, Islamic Rep. Yemen Sri Lanka Iraq Source : UNESCO ( Students abroad: Total number of mobile students abroad : 278,383 Students hosted: Total number of mobile students hosted: 44,766 In volume terms, India attracts highest number of students from Nepal, followed by Afghanistan and Bhutan.

15 TOP TEN INDIAN UNIVERSITIES IN TERMS OF FOREIGN STUDENTS ENROLLMENT (AS PER NIRF SCORECARD) S.No Institutes State Total Number of Foreign students as per NIRF scorecard 1 Manipal Academy of Higher Education Karnataka Amity University Uttar Pradesh Symbiosis International University Maharashtra S.R.M. Institute of Science and Technology Tamil Nadu Vellore Institute of Technology Tamil Nadu National Institute of Technology Tiruchirappalli Aligarh Muslim University Uttar Pradesh National Institute of Technology Warangal Anna University Tamil Nadu Bharati Vidyapeeth Maharashtra 470 Source : NIRF

16 IMPORTANT OBSERVATIONS ABOUT EDUCATION SERVICES IN INDIA Ministry of Human Resource Development is actively encouraging foreign students to come to India for higher education. A portal has been launched recently by the Government of India to connect international students with Indian institutions. The website url is In order to promote exports in education services, network, advertisement, internationally recognized accreditation, and periodic revision of pedagogy are important considerations in attracting foreign students to India.

17 04 INVESTMENT OPPORTUNITIES

18 WHY INVEST IN EDUCATION SECTOR? India is in a demographic sweet spot, with a population of about 500 million in the age bracket of 5 to 24 years (IBEF, 2018). This demands huge investment in education services. Education infrastructure is a necessity good. There exists stable demand for education services. Therefore, investment in education is likely to offer higher returns.

19 INVESTMENT AVENUES IN EDUCATION SERVICES Online platforms for learning are gaining popularity due to increasing internet penetration. This is an important avenue for investment in the education sector. Vocational training institutions contribute to human-capital development in the country. Investment in such institutions will augment the development process. India s relative advantages lie in Bachelor s degree programmes and in Engineering and Science/Technology stream. Further investment in the tertiary education can attract greater foreign students to India. India also posits an advantage in various traditional medicine related research and development courses as well as Hindi and Sanskrit programmes. Investment in increasing popularity of such courses seems to be an important growth driver for India s education sector.

20 05 BUSINESS & REGULATORY ENVIRONMENT IN INDIA

21 REFORMS FOCUS Job creation and inclusive growth Services push Fiscal prudence and accountability Integrated tax regime Enabling Ecosystem

22 REGULATORY ENVIRONMENT - INDIA Foreign Investment Framework Foreign Direct Investment (FDI) in India Governed by Foreign Exchange Management Act, 1999 Progressive liberalization in the policies Automatic route (No prior approval requirement) such as railway and road infrastructure Approval route (Prior government approval required before setup) such as multi brand retail trading Evolution of foreign investment regulations

23 FDI INVESTMENT ROUTE Under Automatic Route Prior Approval Route No requirement of any prior regulatory approval Required approval from Govt. of India Considered by respective Administrative Ministry/Department. Filing an intimation with RBI in prescribed format within 30 days of investment Filing an intimation with RBI in prescribed format within 30 days of investment Filing particulars of issue of shares within 30 days of issue of shares to foreign investors Filing particulars of issue of shares within 30 days of issue of shares to foreign investors

24 BUSINESS PRESENCE IN INDIA - FORM OF ENTITIES Foreign Company Operates as a foreign company Establishes local presence Liaison Office Project Office Branch Office Joint Ventures Limited Liability Partnership Wholly Owned Subsidiary Key considerations for choosing investment vehicles Commercial considerations Regulatory framework (prior approval requirements for Chinese companies) Tax considerations { Cost of operations

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28 This Report has been prepared by CII. IT & ITES