India: The new magnet for

global investment

Contents
Overview.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Global Metrics: India Scores Well.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Global Economic Landscape.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Goods and Services Tax (GST).. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. 7
FDI - A Leap of Faith .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. . 10
Sectors Powering Indias Growth.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Key Warehousing Destinations .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
About Embassy Industrial Parks.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

Back in 1991, India embarked on the path of globalization

and 25 years later it has not only been embraced by the
globalized economy, it has drawn world attention for
its resilience and growth rate. Global agencies such as
Standard & Poor (S&P) and the International Monetary
Fund (IMF) have offered glowing reviews of Indias
economy.

From the Wall Street Journal

to the Economist, everyone
is hailing India as the new
investment destination the
world is making a beeline for.

Doing business in India has just become better. Global

investors and local business alike are excited by the
passing of the historic amendment to The Constitution
of India. Labelled Goods and Services Tax (GST), the new
taxation system is expected to make it easy for businesses
to operate and drive growth. (See the discussion on GST
on Page 7). With the GDP growth rate pegged at 7.7% for
2016-17, India is the only country which is growing even
faster than its neighbour China.
According to Standard & Poor (S&P), India is seen as
having better economic fundamentals than many of
its emerging market peers, thanks to foreign exchange
reserves of around $350 billion and efforts to keep its
current account and budget deficits in check.

Overview | 3

Standard & Poor (S&P) said Indias rating reflected

its sound external profile and improved monetary
credibility, including the adoption of inflation targeting
and the move to set up a monetary policy committee to
decide on interest rates.
Global ratings agency Moodys Investors Service
estimates Indias economic growth at 7.5% in both 2016
and 2017.
Moody said, Indias economy was powered by sustained
growth in consumer spending, fostered by moderate
inflation and still favourable demographics, and
strengthening investment, in foreign direct investment.

Source: Firstpost

Overview | 4

Global Metrics
India Scores Well
Here are key indicators that help us put a finger on
how the government is ensuring India becomes an
attractive destination for businesses.

Ease of doing business in India:

India improved its position on three

count
ACCESS TO ELECTRICITY .. . . . . . . . .70 (UP 29 SPOTS)
STARTING A BUSINESS.. .. .. .. .. .. .155 (UP FROM 164)

Out of 189 countries ranked, India moved up to 130

from 134 in just two years between 2013 and 2015

Current:

130

Previous:

Source: Indian Express

/189

DEALING WITH
CONTRSTRUCTION
PERMITS.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .183 (UP ONE SPOT)

The Confederation of Indian Industrys Business

Confidence Index rose to 57.2 from 54.1 for the three
months ended June 30.

134/189
Global metrics | 5

Global Economic Landscape

International Monetary Fund (IMF)
trims World growth forecast by
0.1% but India is safe
India, Asias third-largest economy, has the
fastest growing economy even China lags
marginally behind. China, for instance, is
predicted to grow 6.6% in 2016. Although thats
marginally stronger than IMFs April forecast of
6.5%, its growth is expected to slow to 6.2% in
2017.
The other emerging markets, economies of
Brazil and Russia, are expected to contract in
2016, according to the International Monetary
Fund (IMF).

Standard & Poor (S&P)

forecast:
US based credit ratings and research
company S&P Global Ratings said that top
Indian companies are set to outperform their
Chinese peers driven by increased spending
by the Indian government through the Make
in India programme and improvement in the
transportation sector despite the infrastructural
bottlenecks. While Chinese companies might
get bogged down with government influence
and increasing credit risk.

Global economic landscape | 6

Goods and Services Tax (GST)

The Great Unified Taxation Regime
The new unified taxation regime is the toast
of the Industry. Though it will take another
year for the country to put all the pieces in
place starting from state level legislation,
technology, staff training etc. GST is now
a reality. With this movement of goods
from one state to another becomes easy
and attracts one time single tax rate (there
are exceptions). This is expected to drive a
consolidation in warehousing by businesses.
Heres a birds eye view of the salient stage
the new tax system will go through before
coming into force.

GST Bill, 2014

amends
the constitution
to introduce GST

Passage of GST Bill

The GST council, comprising state finance minister and the Union finance minister, will be set up.It
will decide on what the tax rate will be under GST, the revenue threshold below which traders will be
exempted from the levy and also the administrative processes under GST.
The model central GST law and the integrated GST law will be tabled in Parliament for its approval.
All state legislatures will also need to get the state GST law passed.
Subsequent to the passage of the bills, the rules will be notified for finalizing the processes under
GST. Simultaneously, the information technology network will also have to be readied to ensure a
seamless registration, tax payment return filing and refund system across all states.

The Bill amends the Constitution to

introduce the goods and services tax (GST).
Parliament and state legislatures will have
concurrent powers to make laws on GST.
Only the centre may levy an integrated GST
(IGST) on the interstate supply of goods
and services, and imports.
The GST Council will recommend rates
of tax, period of levy of additional tax,
principles of supply, special provisions to
certain states etc. The GST Council will
consist of the Union Finance Minister, Union
Minister of State for Revenue, and State
Finance Ministers.
The Bill empowers the centre to impose an
additional tax of up to 1%, on the inter-state
supply of goods for two years or more. This
tax will accrue to states from where the
supply originates.
Parliament
may,
by
law,
provide
compensation to states for any loss of
revenue from the introduction of GST, up to
a five year period.
The GST Amendment Bill was passed by the
Union. Now individual States have to pass
the bill paving the way for the GST roll out.
The roll out is expected in the second or
third quarter of 2017.

GST | 7

What Goes?
e GST
h
t
t
a
h
t
taxes
l
a
r
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e
replac
ty

will

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ilet
and to
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r
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xcise (
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l Dutie e)
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and
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xtiles
Ad ial importan
e
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Exci
spec
ties of
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dition
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(comm
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m
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f Cus
uties o
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ditio
ms (SA
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Ad n as CVD)
s
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of C
know
l Duty
a
n
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t
i
dd
ecial A
ey
Sp
r as th
x
a
a
f
T
o
s
e
vic
es
es in
Ser
rcharg ds or servic
u
s
d
n
sses a pply of goo
Ce
to su
relate

State taxes
th
GST will sub at the
sume

Special Purpose
Vehicle (SPV)
for GST
Goods and Services
Tax Network
(GSTN) is an onlin
e system
envisaged to cover
the entire
country in a unified taxati
on system.
The government of
India holds
24.5% stake in GSTN
while state
governments, including
National
Capital Region (NCR) of
Delhi and
Puducherry, and the Em
powered
Committee of State
Finance
Ministers, together ho
ld another
24.5%. Balance 51%
equity is
with non-government
financial
institutions.

State VA
T
Central S
ale

s Tax

Purchase
Ta

Luxury T
ax
Entry Ta
x (a

ll forms)

GST | 8

GST Impact on Various Sectors

Real Estate

Financial
Services

Travel, Tourism Health Care

and Hospitality

Education

Big gain for cost

reduction in all
players

Larger number
of state level
compliances

Simplification of
taxation

May not change

much from the
existing situation

Increases
transparency

Services may get Simplification

costlier to the end of compliance
users
procedures

Free up resources Cost may come

for import of
down
machinery

Question marks
on transfer
of properties,
exemption of real
estate outputs

Passes lot of
challenges

Services may cost Consumers may

more to end users pay less

Question mark on
input benefits

May allow refund

of accumulated
credit

GST | 9

FDI - A Leap of Faith

India saw a record 53 per cent increase in foreign direct investment (FDI) in the last two years owing to steps taken
to foster growth, investment climate, price stability and fiscal prudence.

The Big Bang effect

In sweeping reforms to FDI norms, the Centre has opened up defence, civil aviation,
single-brand retail and pharma sectors to more investments
DEFENCE
Earlier, FDI beyond 49%
was permitted through
approval route in cases

of acces to modern and
state-of-the-art
technology

Now, the govt. has done

away with
state-of-the-art
technology clause

AVIATION

100% FDI under
automatic route in
brownfield airports
(where funds are
pumped into an
existing airport) has
been permitted

RETAIL

PHARMA

Single brand retail:

Local sourcing norms
eased for three years
and a relaxed sourcing
regime introduced for
five years

It has been decided to

permit up to 74% FDI
under automatic route
in brownfield projects;
approval route beyond
74%

Earlier, it was 74% for

this category

FDI continues to be prohibited in Lottery, Gambling, Atomic Energy,

Real Estate Investments Trusts and Railway operations.
Source: The Hindu

FDI | 10

Foreign Direct Investment (FDI) in India

by Activity
FDI projects (share)
6.6

6.0

7.9

12.7

24.3

23.8

FDI capital (share)

4.2

2.7

7.9

13.5

2.8
23.1

Jobs created by FDI (share)

2.6

3.1

3.5

15.1

13.2

18.1

2.1
11.6

28.2

Strategic

45.5

37.0

45.5

44.3

46.4
39.4

Retail
Manufacturing

61.2

2012

57.5

2013

59.7

2014

Services

38.3

37.1

36.8

39.4

39.0

39.9

2012

2013

2014

2012

2013

2014

FDI | 11

Sectors Powering Indias Growth

Construction

Defense

Insurance

Railways

E-commerce

100% FDI
permitted under
an automatic route
in construction
development

Up to 100% stake
allowed, subject
to government
approval (up from
49%)

Foreignownership
ceiling raised to
49%, from 26%

100% ownership allowed

under an automatic
investment regime for:

100% automatic
FDI in online
retail applies to

Minimum floor
area reduced
from 50, 000 sqm
to 20,000 sqm

Indian single
ownership of
controlling
51% no longer
required

Construction, operation
and maintenance of
suburban corridor
projects public-private
partnership

Online retail
of goods and
services under
the marketplace
model

High speed train

projects and dedicated
freight lines

The marketplace
e-commerce
companies will
be allowed to
provide support
services to
sellers such as
warehousing,
logistics, order
fulfilment,
call centre
and payment
collection

Minimum capital
requirement
reduced from
US$10m to
US$5m

Lock-in period
of three years on
equity transfer
removed

Relaxed exit
rules, wherein
the Government
has removed the
three-year lock-in
period

Condition for
state-of-the-art
technology has
been done away
with

Boost liquidity
in debt- laden
sector

Facilitate
technology
transfer and
reduce heavy
burden of
imports

Attract funds
in affordable
housing sector

Automatic
trigger of higher
FDI limit in the
pension sector,
as the clause
under the
Pension Fund
Regulatory and
Development
Authority
Act (PFRDA)
stipulates a
similar foreign
investment limit
for the pension
sector as for the
insurance sector

Access to funds
for cash-strained
insurance firms
from overseas
partners

Rolling stock,
locomotive or coaches
manufacturing and
maintenance
Electrification and
signalling systems
Mass rapid transport
systems

Help modernize and

expand railway projects
Boost infrastructure and
job creation

Manufacturers
producing and
selling their
products in India

Encourage PPPs

Key Sectors | 12

Key Warehousing Destinations

AHMEDABAD

BANGALORE

Major hub for pharmaceutical industry in India

State capital of Karnataka, strategically located in

South India

Has now emerged as a major manufacturing

destination in the automobile, engineering and
FMCG sectors
Excellent infrastructure, including the availability
of natural gas, reliable power and excellent road
connectivity
Ahmedabad has well-developed infrastructure,
conducive to the growth of manufacturing industries
Submarkets are well connected by road, rail and air
transport system with the rest of the country and
other parts of the state
With access to well developed infra within and to
the rest of the country, Ahmedabad is the place for
chemicals, engineering and manufacturing units

Heavy industries and knowledge-based production

facilities in Bangalore
Bangalore evolved as a favorite destination for IT
and IT-enabled services
Steady rise as a global manufacturing hub,
supported by presence of leading education and
research institutions; large number public sector
industries; highly proficient English-speaking; stable
and liberal socio-political environment.
Government developing more industrial areas to
attract investments
Emerged as a favorite destination for the automotive
industry
Apart being called the Silicon Valley of India,
Bangalore is emerging as a global hub for
manufacturing and heavy industries

Population

Density

Temperature

6.3 11,000 32.3-27.4

million

per sq. km.

C (max - min)

Population

Density

Temperature

8.4 11,470 38.9-10.6

million

per sq. km.

C (max - min)

Key Destinations | 13

CHENNAI
Fourth most populous metropolitan area in India
Broad industrial base, spanning the automobile,
computer, technology, hardware manufacturing,
financial services and health-care industries Detroit of Asia
Economic development closely tied to ports and
transport infrastructure (Chennai Port and Ennore
Port)
Industrial locations of Sriperumbudur and Oragadam
receive investment from major MNCs, such as
Renault Nissan, Daimler and Yamaha.
Availability of cheap government-subsidised land
in and around Chennai is limited, government is
acquiring additional land to meet the growing
demand
Dubbed as the Detroit of Asia, the southern city is
developing into a great desitnation for a broad-base
of industries

DELHI NCR
Important manufacturing sector for economic
development
Wide variety of industrial products
Markets regulated under the development norms
of nodal authorities, including the Department of
Industries, the Delhi Development Authority (DDA),
Delhi State Industrial Development Corporation
(DSIDC)
Many manufacturing companies present in NCR
Attractive to investors from multinational
companies, large business houses, foreign investors,
non-resident Indians and small-scale entrepreneurs
Skilled, motivated and relatively low-cost workers good infrastructure
With it being close to the seat of the countrys
governance, the region is much sought after by a
wide variety of industries from tech and knowedge
to manufacturing

Population

Density

Temperature

8.6 11,000 45-32.8

million

per sq. km.

C (max - min)

Population

Density

Temperature

16.3 11,297 31.4-18.8

million

per sq. km.

C (max - min)

Key Destinations | 14

HYDERABAD
Diversified economic zone with varied industries
Premier public enterprises established there, giving
traditional manufacturing
The Andhra Pradesh Government emphasizes on
creation of quality infrastructure; promotion of
manufacturing investment zones; industrial corridors

MUMBAI

Has greatly benefitted from setting up world-class

infrastructure

Manufacturing activity primarily concentrated in the

MIDC areas, and the non-MIDC areas

New policy is good sign for Hyderabad, more

industries would provide a perfect balance to the
IT boom in Hyderabad, where IT is the dominant
industry

Most of these areas are the first MIDCs that were

developed in the early 1960s to promote chemical,
engineering and other auxiliary industrial units.

Manufacture would provide employment

Home to the IT and premium public sector units,

Hyderabad, it is now emerging as the global hub
for manufacturing

Population

Density

million

per sq. km.

State industry body, MIDC, has been proactive and is

in the process of acquiring more land parcels

The economic capital of India and one of the

busiest ports of Asia, Mumbai is home to a wide
variety of industries

Temperature

7.7 18,480 31.4-18.8

Some areas changed into real estate developments

C (max - min)

Population

Density

Temperature

18.4 22,937 31.4-18.8

million

per sq. km.

C (max - min)

Key Destinations | 15

PUNE
Favorite industrial destination since the inception
of the Pimpri-Chinchwad Municipal Corporation
(PCMC) in the 1960s.
Maharashtra Industrial Development Corporation
(MIDC) stimulated growth of industries
Talegaon and Chakan are home to automotive giants
Ranjangaon hosts all kinds of industries, such as
automotive, white goods, jewellery, paints, food
products and chemicals
Growth supported by trained manpower
Low cost of real estate and proximity to the business
capital of Mumbai and the port
Hailed as the automotive mecca and engineering
hub, Pune is emerging as Indias R&D and
manufacturing base for the world

Population

5.0

million

Density

Temperature

7,113 42.3-31.6
per sq. km.

C (max - min)

Key Destinations | 16

About Embassy Industrial Parks

Embassy Industrial Parks is a joint venture between the Embassy Group and Warburg Pincus,
formed to address the challenges of companies grappling with building and managing industrial
and warehousing spaces. We are committed to bringing quality Grade A industrial, light
manufacturing and warehousing spaces in close proximity to leading consumer and industrial
centres across India. These modern well planned, technology-enabled industrial and warehousing
solutions are targeted at industry verticals like E-Commerce, 3PL, Automobile Ancillaries, FMCG
and Retail.

Planned development of 15 20 million Sq.

ft. of modern industrial and warehousing
spaces

7 key markets - Ahmedabad, Bangalore,

Chennai, Delhi NCR, Hyderabad, Mumbai &
Pune

Strategically located with good

connectivity to Highways, Consumption
Centres & Airports

Parks spread over 50 200 acres in each

location

About Embassy | 17

MAPPING
THE FUTURE
EMBASSY INDUSTRIAL PARKS ARE
STRATEGICALLY LOCATED IN PROXIMITY
TO 7 KEY COMMERCIAL INDUSTRIAL AND
FREIGHT CORRIDORS ACROSS INDIA.

DELHI NCR

D
CO EDIC
RR AT
ID ED
OR F
- W REI
ES GH
TE T
RN

DEVELOPMENT HAS COMMENCED AT TWO HUBS;

CHAKAN, PUNE AND ORAGADAM, CHENNAI.

DED
ICA
TED
FRE
IGH
TC
OR
RID
OR
-

AHMEDABAD

EAS
TER
N

MUMBAI
UNDER DEVELOPMENT
CHAKAN, PUNE
ORAGADAM, CHENNAI
PLANNED
DELHI NCR
AHMEDABAD
MUMBAI
BANGALORE
HYDERABAD

PUNE
HYDERABAD

BANGALORE

CHENNAI

About Embassy | 18

Embassy Industrial Parks Pvt. Ltd.,

Embassy Point, 150 Infantry Road, Bangalore-560 001
Tel: +91-80-4039 9999
www.embassyindustrialparks.com