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Beyond Virginia
 
Who Can Make China Look Over Her Shoulder? India—Ready or Not Here She Comes!

India is the world’s largest democracy, with the world’s largest and fastest growing middle class! Despite headlines, the news is not all bad for the U.S. India is eager to play and compete on the global playing field. In order to fuel core industries and keep them competitive with China, India is aggressively reducing tariffs and improving intellectual property protection. This opens the door to new opportunities and has vastly improved the ability of Virginia companies to sell goods in India!

Why India?
India has a GDP of around $570 billion making it the world's 12th largest economy—and the third largest in Asia behind Japan and China. It is predicted that China and India will dominate world trade in the later half of the 21st century. Services, manufacturing and agriculture account for approximately 50%, 27% and 23% of GDP respectively. Nearly two-thirds of the population depend on agriculture for their livelihood.

Thanks to its low-cost labor, educated work force and central location, India has burgeoning automotive, textile and pharmaceutical sectors. India’s imports in 2003 totaled $76 billion. Items that India sourced from the world included petroleum, machinery and transport equipment, electronic goods, edible oils, fertilizers, chemicals, gold, textiles, iron and steel. Source: U.S. State Department Background Notes: India 11/2004 http://www.state.gov/r/pa/ei/bgn/3454.htm

These items are very similar to Virginia’s major exports. Virginia companies are well positioned to provide products and services to India’s expanding information technology, textile, automotive and pharmaceutical sectors. Our shared experience with agriculture, mining, coal, environmental technologies, high-tech, manufacturing and textile technologies makes Virginia a superior supplier.

India's population is estimated at nearly 1.07 billion and is growing at 1.7% a year. While 25% of the population still lives below the poverty level, its middle class— estimated to be between 320-340 million people—is larger than the entire U.S. or EU populations. Source: U.S. State Department Background Notes: India 11/2004

The large middle class has a rapidly growing disposable income and a rising demand for consumer goods. And, U.S. and Virginia exports to India are steadily rising in tandem.
  • U.S. exports to India reached $5 billion in 2003, a 25% increase over 2002.
  • Virginia exports to India reached nearly $45 million in 2003, up 34% from 2002.
  • Year to date (Jan. - Aug. 2004) Virginia exports are $65 million, well ahead of 2003!
    Source: World Trade Atlas www.gtis.com


In early 2004, India reduced peak tariff rates by 5-20 % which has created new export opportunities for U.S. and Virginia firms. In particular there were sharp reductions on electric transmission and distribution equipment, medical drugs and equipment, equipment for development projects and information technology and electronic equipment including cell phones and computers. The reductions have yielded dramatic increases in both U.S. and Virginia exports to India.

The Proof is in the Numbers:
U.S. exports to India have steadily risen in the first half of 2004:
  • Year to date (Jan. - June 2004 vs. Jan.- June 2003) U.S. exports to India are up 12%
  • Year to date (Jan .- June 2004 vs. Jan.- June 2003) Virginia exports to India are up 198%!
    Source: World Trade Atlas


2004 U.S. Exports to India in millions of U.S Dollars

Month 2004

 VA Exports

 U.S. Exports
January 2004

 2.9

 342.3
February 2004

 4.1

 389.2
March 2004

 9.2

 466.7
April 2004

 9.2

 439.0

May 2004

 8.9

 453.7
June 2004

 17.6

 529.7


Source: U.S. Census Bureau http://www.census.gov/foreign-trade/balance/c5330.html#2004


The State of Virginia will lead a delegation of Virginia firms interested in pursuing or expanding trade in India on Virginia's First Trade Mission to India: February 25 – March 7, 2005. Companies that join us on the mission will meet one-on-one with potential Indian buyers and distributors that meet their company’s unique market objectives. Make the most of this mission and begin developing your itinerary now.

In India, The VEDP-IT Trade Mission will visit three cities as follows:
February 25, 2005 Companies depart Virginia for Mumbai, India.
February 28, 2005 Mumbai Appointments Start
March 2, 2005 Chennai Appointments
March 4, 2005 Bangalore Appointments
March 7, 2005 Depart Bangalore to Virginia


You are free to join us in any or all of these cities.

What Exactly Is a Trade Mission?
First we determine your unique market objectives and then based on those objectives, we find prospects for you to meet with in India. Each mission is customized to meet each individual company participants’ unique objectives.

For example:
  • One company may sell transformers and desire to sell direct. They may want to meet with sub contractors of major engineering firms like Bechtel or consulting companies.
  • Another company may offer HR resource management software and may wish to meet with colleges and government purchasing managers.
  • A third company may make compressors and wish to meet with OEM manufacturers of industrial refrigeration equipment.
  • Another company may make mining communication equipment and may need to find a representative with engineering and service capabilities.


For each participating company we pre-arrange appointments with potential buyers, distributors or agents. We also arrange market briefings and host receptions with local government whenever possible in each city. You pay the mission fee, air travel and hotel based on our recommendations. We arrange appointments, provide market and prospect briefings, arrange and host receptions, provide ground transport within country in mission cities, and provide translation when needed.

If you are interested in pursuing or expanding trade with India, the Trade Mission to India February 25 – March 7, 2005 is a great fast track to results. Click here to register online for this event. Or for more information, contact Joe Robinson, International Trade Manager at (434) 582-5182 jrobinson@yesvirginia.org.

For a full list of VEDP-IT sponsored Trade Events, open to all Virginia companies, visit our website at: www.ExportVirginia.org and select the EVENTS tab.

 

DISCLAIMER – The contents of this article are intended to provide pertinent inform-ation for Beyond Virginia subscribers interested or already involved in international trade. While every effort is made to convey accurate and timely information, the contents of this article are not intended as specific advice to its readers. Our intent is solely to convey information.