J
Increasing ( or sustaining, without Diesel) Indian market share of Brazilian trade
Final Summary Report
November 22, 2012
The Jai Group
Business Services for the BRICs Economies
J
The project looked at which sectors are worth betting on in the India- Brazil corridor to improve trade and investment
PROJECT FLOW
Identification of Key Sectors
Activities
• Top Down, data intensive, quantitative analysis of
Key Sectors Identified in Trade Industry, vision
document with respect to Brazil
• Empirical Analysis of current Brazilian Trade
and Investment with other countries to spot
opportunities
• Economic Factor Analysis, to identify deeper
trade patterns that have still not occurred
• Strategic assessment of sectors where trade
is happening today to determine an index of
saturation
• Analysis of PTA between India and Brazil
• Scenario Analysis
• Fact based defensible short list of sectors and a
clear rationale on why they are better than others to
focus in the India-Brazil Corridor
Detailing Selected Sector Potential
• Market sizing of potential trade and investment
• Strategic analysis of
• Current Competitors and their strategy (who is Brazil
Importing these products from currently ? For instance)
• Why India stands a chance ? What are the sources of
India’s competitive advantage ?
• Barriers to entry and ways to overcome them
• Incentives offered by the government
• Type of companies that can address these segments, with
examples from India.
• Prioritization of Sectors
• Business case for each sector identifying key
challenges and potential
Deliverables
Source:Jai Group Analysis.
The Jai Group
Business Services for the BRICs Economies
1
J
AGENDA
•
Executive Summary
•
Indo Brazil Trade Today
•
Sourcing From India
•
Sourcing From Brazil
•
Services Imports
•
Investment Study
•
Strategies for Trade Promotion for the Consulate
The Jai Group
Business Services for the BRICs Economies
J
India needs to focus on a larger basket of products to achieve top 5 position among Brazilian imports
EXECUTIVE SUMMARY (1/6)
•
Brazilian imports are growing at a steady clip over the last decade though three year CAGR ( ~ 9.36 % p.a.) is more modest
•
Indian exports to Brazil are growing twice as faster than overall Brazil imports whether over the long term or the short term
•
India is focusing on a limited variety of items and currently has a respectable share in a limited set of items. Many of these items are
small volume items and growth potential is limited beyond a point
•
To achieve growth India must:
•
•
•
Focus on larger volume items
•
Achieve significant share in as many items as possible
•
Consolidate items where it already has significant share
We have identified three groups of products for the consulate to focus on
•
Group A are products where India has a significant competitive advantage and ease of entry is relatively higher, either due to
regulatory or market barriers being lesser
•
Group B are products where growth potential is limited due to either, already high market share, despite huge competitive
advantage or where while growth potential is high and India can make some headway, there are not major competitive
advantages for India
•
Group C are products where there is neither growth potential nor major competitive advantage
We recommend the consulate to focus promotional efforts on Group A products for biggest bang for the buck and to a limited extent on
those products in group B where growth potential is high. No money should be spent on Group C products
The Jai Group
Business Services for the BRICs Economies
3
J
In goods exports, India needs to push engineering and chemicals in a big way
EXECUTIVE SUMMARY (2/6)
Area
Status
Examples
Why ?
Potential
Key issues
beneficiaries
Next Steps
Goods
exports
Petroleum,
Organic
chemicals, Yarn ,
some steel
products India
has significant
positions in
areas where it
has no
competitive
advantage (
Petroleum) or
products where
share of
Brazilian import
basket for that
product is small
1. Tractor
Parts
2. Bags and
Trunks
3. Heat
treatment
machinery
4. Valves and
Taps and
Boiler
fittings
5. Electrical
equipment
and
componen
ts
6. Insecticide
s
7. Sulphates
1.
Kirloskar
brothers,
Crompton
Greaves, EMCO
transformers,
Kalpataru,
Welspun
Gujarat, Pricol,
Shanti Gears,
Motherson,
Mahindra &
Mahindra, Tata
Motors, Royal
Enfield, Jaishree
insulators
1.
2.
3.
4.
These occupy a
large share of
current Brazilian
imports and are
growing
India today
exports them to
other countries
Currently Brazil is
importing them
from high cost
geographies that
are distant (
Europe, Japan)
Local
manufacturing in
strategic
locations within
Brazil , a high ROI
opportunity
India has a
neutral image on
manufacturing
Some local
assembly,
distribution
required,
financing needed
in some areas,
brand building
needed
2.
3.
4.
5.
6.
Establish India Brand as an
engineering powerhouse, alternate
to low quality China and high cost
Europe
Establish financing package with
BNDES for project supply
Actively pursue a partnership/ local
manufacturing approach as it eases
the difficulties of sourcing from
India, if led by a Local
Tie up with states, especially in the
North East where a new
manufacturing hub is opening up and
no one is present yet
Work with customs/ ministry of
commerce to facilitate the supply
chains
Set up web based mechanisms of
collecting feedback and
distinguishing who is a credible and
not so credible importer/ agency
The Jai Group
Business Services for the BRICs Economies
4
J
Despite an acknowledged bottleneck on engineers to support its infrastructure boom, India does not export services
to Brazil, because, it does not shape a public debate in a country that is unaware of benefits / paranoid about jobs
EXECUTIVE SUMMARY ( 3/6)
Area
Status
Ideal
Focus
Opportunity
Services
Exports
IT
services,
but
miniscule
Shipping ,
1.
Tourism,
Engineering,
IT services,
E-learning
2.
Brazil is a big
consumer of
Tourism and
Shipping
Brazil currently
faces a huge
shortage of
engineering and
IT talent but is
importing the
unemployed
from Europe at
high prices
Potential
Key Issues
Beneficiaries
Next Steps
Punj Lloyd, Tata
Consulting
Engineers, SITA
Travels, Jet
Airways, India
Tourism
Development
Corporation
1.
India is seen
widely as a
strategic
competitor
globally, and
local industry
wants to block
India out
2.
3.
4.
5.
Through a widely publicized economic
benefits study through a well reputed
economist / agency, start a National debate on
the merits of engaging with India in service
imports
Promote Joint Ventures between Indian and
Brazilian companies
Promote India as a main stream destination
for tourism, by emphasizing the new
infrastructure ( airports and hotels) and nature
spots
Promote courses on India together with
Airlines
Tie up with large trade houses for contracting
shipping services and insurance of Indian
origin, where possible in Asia, and mandatorily
when cargo is destined for India
The Jai Group
Business Services for the BRICs Economies
5
J
Except for Oil, no Governmental focus for strategic sourcing from Brazil, lack of bargaining power , lack of capital
clout to obtain access through investment in infrastructure and absence of transparent platform s deters
sourcing efforts
EXECUTIVE SUMMARY ( 4/6)
Area
Status
Sourcin Semi
g from precious
Brazil
stones,
Sugar,
some
iron ore
Ideal
Focus
Opportunity
Wood
1.
Pulp/
Celulose,
Pig Iron,
Petroleum,
pulses,
2.
3.
India is currently
importing wood and
cellulose from other
countries, whose
environmental practices
are not sustainable
and/or volumes are not
sufficient.
India could become a
net iron ore importer as
its steel industry grows.
Indian agriculture is
suffering the impact of
reducing land, stagnant
productivity and
dropping water table
Potential
Beneficiaries
Key Issues
Aditya Birla, JK 1.
Group, Tata
Steel, Jindal
Steel, several
small steel
mills, India’s
2.
vegetarian
protein
consumers,
Sugar
companies,
NMDC
What steps should India take?
Iron ore, is a big
1.
players game, railway
constraints are easing,
but port is becoming a 2.
bottleneck
Many of these
commodities are still
not an urgent items
3.
4.
5.
Set up a sourcing cell in the
consulate to help Indian investors
who want to source from Brazil
Work with agencies in the mining
and agricultural ministries, to
identify a list of opportunities for
investment in Brazil
Think about involving Public
Sector of India in port
infrastructure investments in
Brazil as it is likely to be a big
bottleneck
Develop a strategic partnership
with Petrobras , by tying to
objectives in goods exports
Create transaction platforms for
commodities such as sugar and
ethanol where sellers and buyers
are fragmented and informal/
integrate commodity exchanges
The Jai Group
Business Services for the BRICs Economies
6
J
A conscious partnering strategy, in areas where Brazil is seeking advantage, will increase comfort levels to
facilitate exports to Brazil in other areas
EXECUTIVE SUMMARY (5/6)
Area
Status Ideal
Focus
Opportunity
Potential
Issues
Beneficiaries
Next Steps
Partnering
with Brazil
Not
much
with
Private
sector
1.
Indian
1.
construction
companies
working in Africa,
Indian
2.
investment
banks, service
providers,Indian
Pharma
companies,
3.
Indian seed
companies
4.
1.
Several,
Construction
projects in
Africa
Innovation
partnerships
Star Alliance
Opportunitie
s, Building
Brands and
distribution
channels
together,
collaborating
in the seed
industry,
urbanization
know-how
2.
3.
4.
5.
6.
Allows India to
articulate a more
inclusive vision that
increased Brazilian
trust levels
Geographical
complementarity
New surplus funds due
to natural discoveries
but not enough PhDs
Lack of vertical
integration in many
commodities resulting
in low value addition
Interest in BRICS
economies by
overseas investors
Complementary knowhow ( seeds: rice +
wheat versus orange,
soy and cane) ,
urbanization
technologies
5.
India sees Brazil as a market
only and little merit in
partnerships ( whatever these
guys can do, we can do better )
Brazilians see Indians as
competitors come to rob their
jobs, leading to suspicion even
at highest levels of private
sector and public sector
Beneficiaries of such mutual
mis trust and dis respect are
rich countries
Prevents India from achieving
full potential in trade
Like Jack Welch of GE obtained
significant in roads in to Indian
market by furthering Indian
ambitions, India can achieve a
lot in Brazil by being seen as
facilitating Brazilian private
sector ambitions where
possible
2.
3.
4.
5.
6.
7.
Sensitivity training for Indian
Managers
Create a media relations
strategy that would talk/ write
about these themes in the media
Promote work-shops, webinars
Start discussions on a joint
innovation fund with the
Brazilian Government to fund
joint R& D projects
Create a mechanism for
periodic collaboration for areas
where both countries are large
commodity exporters such as
coffee + tea, cashews, granite,
leather products, sugar etc
Create a common data base
together with National statistical
agencies of market data on
various sectors, for example:
a. Economic Classes
b. Urban Development
Start the process of integrating
the commodity exchanges
The Jai Group
Business Services for the BRICs Economies
7
J
China is a good benchmark to aspire to for India, but achieving Chinese performance would require a different set
of levers
EXECUTIVE SUMMARY ( 6/6)
China
Strategy
Scale
What ?
China engages Brazil on a large
scale as a market
It has impact on entire country,
through iron ore, Soy, power
project
China invests in large projects of
Competitive infrastructure in Brazil, disarming
Capital
Brazilian resistance to Chinese
imports
Cost
China has not succeeded in
building brands in Brazil except in
high-tech ( Huawei) or Consumer
Durables ( Car)
Potential
answer by
India
What ?
Why ?
Focus
Instead of spreading thin, India can
create a special partnership with one
state per region,.
At the state level India can become a big
enough player as a market and a source
of investment
Smart Capital
Establish a India- Brazil joint innovation
fund, Participate in joint innovation
projects with Brazilians, innovation is a
pet theme for Brazil
While India will invest in resources, India
can never match Chinese infrastructure
investments, but it can fund joint
innovation
Brand
Establish an India Brand fund to
promote whole product categories from
India such as tea, ayurvediccosmetics,
basmati rice, snacks, apparel, tourism
etc. through showrooms, kiosks, select
magazine advertisements
India has greater soft power through
culture and being a democracy, this
power can be channeled in to and
consolidated as a brand, brand building
as a country is good when the exporter
is small and the product category is
where India has strengths
The Jai Group
Business Services for the BRICs Economies
8
J
AGENDA
•
Executive Summary
•
Indo Brazil Trade Today
•
Sourcing From India
•
Sourcing From Brazil
•
Services Imports
•
Investment Study
•
Strategies for Trade Promotion for the Consulate
The Jai Group
Business Services for the BRICs Economies
J
Brazilian economy is growing steadily and rapidly …
GROSS DOMESTIC PRODUCT EVOLUTION
PURCHASE POWER PARITY IN USD TRILLION IN BRAZIL
Highlights
CAGR**: 8%
2.4
2.2
2.0
2.0
• Brazil is benefiting from deep reforms from the 90’s that consolidated
democracy, privatized state-controlled companies, and integrated the
local markets/industries into the global economy
• Brazil is ranked number 9th as an economy in PPP terms. Nominal GDP
is USD 2.4 trillion which puts Brazil in the 10th position
1.8
1.7
1.5
1.2
1.3
1.3
1.6
1.4
• Only China, India, Japan, and US have grown faster over the last century
• Economy is pushed by increase in population and particularly
investments in infrastructure in selected industries which will create a
demand for connectivity
• biofuels, oil & gas
• wood pulp, agribusiness
• real estate, credit markets
• energy transmission
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
* PPP rate equalizes the purchasing power of different currencies in their home countries for a given basket of goods..
Using a PPP basis is arguably more useful when comparing differences in living standards on the whole between
nations because PPP takes into account the relative cost of living and the inflation rates of different countries, rather
than just a nominal gross domestic product.
** Compound annual growth rate.
The Jai Group
Business Services for the BRICs Economies
Source: Central Bank of Brazil
10
J
… and all major macroeconomic indicators seem positive
MACROECONOMIC INDICATORS
PURCHASE POWER PARITY IN USD TRILLION IN BRAZIL
Brazil is growing …
… and trading more …
… and despite the appreciation of
… as the economy becomes stable
the exchange rate, reserves are
growing …
250
400
Imports
USD Trillions
CAGR**: 8%
2.2
35%
Reserves US$
350
2.4
3.5
Exchange R$/US$
Interest Rate
3
30%
Inflation Rate** (IGPM)
200
150
Dollar reserves
in
December
2011
reached
USD 354 bi
25%
300
2.5
20%
250
2
1.6
15%
200
1.2
1.5
100
10%
150
1
100
5%
50
0.5
50
0
0
2000
2005
2010
2011
1996 1998 2000 2002 2004 2006 2008 2010 2011
0
2003 2004 2005 2006 2007 2008 2009 2010 2011
0%
-5%
2002
2004
2006
2008
2011
* PPP rate equalizes the purchasing power of different currencies in their home countries for a given basket of goods.. Using a PPP basis is arguably more useful
when comparing differences in living standards on the whole between nations because PPP takes into account the relative cost of living and the inflation rates of
different countries, rather than just a nominal gross domestic product. Brazil is ranked number 9th as an economy in PPP terms. Nominal GDP is USD 1.6 trillion
which puts Brazil in the 10th position. Only China, India, Japan, and the US have grown at higher pace over the last hundred years
** Compound annual growth rate. *** Annualized 12 month moving average.
The Jai Group
11
Business Services for the BRICs Economies
Source: Central Bank of Brazil
J
Brazil was even the first preferred investment destination in the world a couple of years ago ……
INVESTMENT TRENDS
OCTOBER, 2010
FDI Destination Ranking
Driving forces
FDI* (USD billion)
Favorable macroeconomic conditions
evolution
forecast
• Credit is growing
• Interest rate lowering
Growing demand
• Growing population with rising income and huge
Brazil
housing deficit
China
• Emerging Middle Class
India
Growing supply
• Specific investment-heavy projects
• World cup (2014)
US
• Olympic Games (2016)
3o
1o
2o
• Government-led programs and state-controlled
4o
company investments
• Luz para Todos (Energy)
Bloomberg provides a quarterly
insight into how business men
perceive markets for FDI*.
31% of the investment goes to heavily regulated
industry (Electrical, Transport, Metallurgy, Mining, and
Telecom)
• Minha Casa Minha Vida (Housing)
• PAC (Civil Infrastructure)
• Petrobras oil platforms
• Private sector investments, specially in agro
commodities and logistics
* Poll is carried out among investors, analysts, and traders.
Source: Bloomberg, BACEN (Central Bank of Brazil), Link Investimentos
The Jai Group
Business Services for the BRICs Economies
12
J
Brazil is one of the few large countries with whom India runs a goods trade surplus
India’s Trade Balance 2011
US $ Bn
9.0
5.5
4.0
2.7
0.3
0.9
1.4
1.6
1.7
5.9
3.2
-1.0
-3.7
-6.0
-3.4
-3.2
JAPAN
SOUTH
AFRICA
-3.4
-3.2
-2.6
-2.3
-5.1
-6.4
-9.1
-8.5
-8.4
-8.3
-8.2
-6.3
-11.0
-16.0
-15.2
-21.0
-26.0
ade Balance
-24.1
-23.9
SWITZERLA
CHINA P RP
ND
-24.1
-23.9
SAUDI
ARAB
AUSTRALIA
NIGERIA
KUWAIT
IRAQ
IRAN
QATAR
-15.2
-9.1
-8.5
-8.4
-8.3
-8.2
-6.4
Source : MDIC, DGFT, Jai Group Analysis
KOREA RP GERMANY INDONESIA
-6.3
-5.1
-3.7
MALAYSIA BELGIUM
-2.6
-2.3
Country With Economy >= $1 Trillion and Population >= 100 Mn
ITALY
HONG
KONG
FRANCE
U ARAB
EMTS
UK
BRAZIL
SINGAPORE
USA
NETHERLA
ND
0.3
0.9
1.4
1.6
1.7
2.7
3.2
5.5
5.9
The Jai Group
Business Services for the BRICs Economies
13
J
Indo-Brazilian trade has grown significantly in the last decade, more than double of overall Brazil
trade
BRAZIL TRADE WITH INDIA AND WORLD
Total Brazilian Imports v/s Exports (World) 20002011
Total Brazilian Imports v/s Exports (India) 2000-2011
10
600
9
8
500
Export
Export
32.6%
Import
400
6
US$ Billion
US$ Billion
7
Import
5
4
3
13.5%
300
200
14.9%
27.7%
2
100
1
0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
No of
74
Items
Overall
Share( 0.5
%)
74
73
73
78
79
76
79
79
78
80
84
1
1.2
1
0.9
1.6
1.6
1.8
2.1
1.7
2.3
2.7
Source : MDIC, DGFT, Jai Group Analysis
0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
The Jai Group
Business Services for the BRICs Economies
14
J
India Still a Minority Trade Partner, but with an export share of 2.7% ,
looks all set to meet target of USD 15 B in 2015, just going with the flow
Major Markets for Brazilian Exports in 2011
COUNTRY
VALUE (US$ Bn)
SHARE (%)
1. China
44.3
17
2. United
States
25.8
3. Argentina
Total Brazil Exports
(2011)
US$ 256 Bn
Total Brazil Imports
(2011)
US$ 226 Bn
Major Supplier Markets to Brazil in 2011 (Imports)
VALUE (US$ Bn)
SHARE (%)
1. United
States
33.9
15
10
2. China
32.7
14
22.7
9
3. Argentina
16.9
7
4. Netherlands
13.6
5
5. Japan
4. Germany
15.2
7
9.4
4
6. Germany
9.1
4
5. South Korea
10.1
4
7. Italy
5.4
2
6. Nigeria
8.3
4
8. Chile
5.4
2
7. Japan
7.8
3
9. United
Kingdom
5.2
2
2
8. Italy
6.2
3
9. India
6.1
3
10. France
5.4
2
11. Mexico
5.1
2
10. South
Korea
18. India
4.6
3.2
Source : MDIC, DGFT, Jai Group Analysis
1
COUNTRY
The Jai Group
Business Services for the BRICs Economies
15
J
Total Brazil Exports
(2011)
US$ 256 Bn
However If Diesel is pulled out, India market share falls
significantly
Major Markets for Brazilian Exports in 2011
VALUE (US$
Bn)
SHARE
(%)
1. China
44.3
17
2. United States
25.8
10
3. Argentina
22.7
9
4. Netherlands
13.6
5
COUNTRY
Total Brazil Imports
(2011)
US$ 226 Bn
Major Supplier Markets to Brazil in 2011 (Imports)
VALUE
(US$ Bn)
SHARE
(%)
1. United
States
33.9
15
2. China
32.7
3. Argentina
COUNTRY
11.CHILE
4.6
12.CANADA
3.6
14
13. TAIWAN
3.5
16.9
7
14. UNITED
KINGDOM
3.4
15. SPAIN
3.3
15.2
7
16. ALGERIA
3.1
5. Japan
9.4
4
4. Germany
6. Germany
9.1
4
10.1
4
7. Italy
5.4
2
5. South
Korea
17. SAUDI
ARABIA
3.1
6. Nigeria
8.3
4
18. RUSSIAN
FEDERATION
2.9
7. Japan
7.8
3
19. BOLIVIA
2.9
8. Italy
6.2
3
20.SWITZERLAND
2.8
9. France
5.4
2
10. Mexico
5.1
2
21. India
2.6
1
8. Chile
5.4
2
9. United
Kingdom
5.2
2
10. South
Korea
4.6
2
18. India
3.2
1
Source : MDIC, DGFT, Jai Group Analysis
The Jai Group
Business Services for the BRICs Economies
16
J
Diesel has already started declining, despite non-diesel Indian exports share up slightly in 2012, 2015 trade target:
USD 15 Bi ( export target USD 9.7 Bn) , requires a huge jump by India, assuming Diesel will continue to fall
INDIA BRAZIL TRADE EVOLUTION 2011- 2015
12
Export Target
2015:
USD 9.7 Bn
Projections
10
USD B
8
2.7%
Exports
6
Exports without Diesel
2.4%
Imports
?
4
1.2%
1.3%
2011
2012 ytd
Indian exports as
a % of total
Brazilian imports
%
2
0
We have assumed that the trade target will be split in to exports and imports in the same ratio as 2011.
2015
The Jai Group
Business Services for the BRICs Economies
17
J
AGENDA
•
Executive Summary
•
Indo Brazil Trade Today
•
Sourcing From India
•
Sourcing From Brazil
•
Services Imports
•
Investment Study
•
Strategies for Trade Promotion for the Consulate
The Jai Group
Business Services for the BRICs Economies
J
India and Brazil already trade in a lot of products, and in most of them there is no conflict
# of Items at HS 2 Level
World
Brazil
India Export
98
84
India Import
98
75
Net Export
21/50
41
Net Import
19/48
43
Brazil Net Importer
50
Brazil Net Exporter
48
# of Items at HS 2 Level
World
India
Brazil Export
97
75
Brazil Import
96
84
Net Export
48
40
Net Import
49
35
The Jai Group
Source: MDIC, DGFT, Jai Group Analysis
Business Services for the BRICs Economies
19
J
India hardly present in key Brazilian imports, even where India is a significant or Net exporter to Rest of
World
Brazil’s Import Basket for 2011
49
45
CAGR % (2009-11)
of Brazilian Imports
from the World
42
India Share
> 3% of total
Brazilian Imports
40
27
35
30
34
30
US $ Bn
26
25
41
23
20
15
10
16
53
9
9
5
30
8
20
14
6
6
49
5
34
25
23
4
4
4
45
7
16
19
3
3
2
2
26
60
32
102
30
27
31
53
32
47
90
88
17
2
2
1
1
1
1
1
1
1
1
1
1
1
0
No Exports By India
Brazil Net Importer and India Is Significant Exporter i.e > US$1Bn
Products for Which Brazil is a Net Importer and India is Net Exporter
Source: MDIC, DGFT, Jai Group Analysis
The Jai Group
Business Services for the BRICs Economies
20
J
To become a top 5 exporter to Brazil, India needs significant share in larger items like South Korea
or achieve respectable share in lots of items like China
TOTAL PRODUCTS TRADED AND SHARE OF KEY TRADED ITEMS
80
100%
90%
No of Items where Brazilian Imports >=3%
70
80%
60
72%
70%
69%
66%
50
60%
40
53%
50%
71
30
50%
66
40%
25%
44
20
38
30%
27%
36
17%
21
10
17
16
Japan
South Korea
13
0
20%
10%
Cumulative Share of Product Where Brazilian Imports
>=3%
93%
0%
China
US
Germany
France
Italy
Total No of Items
Traded
92
Average Share in
Brazil’s Import
Basket of
Products with
>=3% Share
1%
96
95
95
92
84
82
80
81
1%
2%
1%
1%
1%
3%
4%
1%
Source : MDIC, DGFT, Jai Group Analysis
India
Mexico
The Jai Group
Business Services for the BRICs Economies
21
J
Current Indian trade performance achieved through a significant share in a limited basket of goods in Brazil
DIVISION OF BRAZIL IMPORTS BY INDIA SHARE
# of products = 20
Products with > 15 % = 4
Yes
84
Items
India market
share above 3
% or above ?
Yes
Products with 3-15 % share = 16
# of Products= 64
No
Plastics, Fertilizers, Inorganic
Chemicals, Furniture,
Suitcases, Iron Steel,
Footwear
Currently
Traded between
India and Brazil ?
# of Products = 12
No
14
Items
Is Brazil
importing/
India
exporting to
other
countries ?
Yes
Live Animals, Meat, Dairy,
Fruits, Cocoa, Malts,
Vinegar, Prep of cereal, Pulp
of wood, Ships/Boats
# of products = 2
No
Project
goods,
Miscellaneo
us Articles
The Jai Group
Source: Jai Group Analysis
Business Services for the BRICs Economies
22
J
Missing Commodities of Previous Slide Explained
2 Level HS Codes 01 to 99
Code 77 is reserved for
classification of future
commodities
99-1 = 98
total
Brazil does not trade 98,99
which are misc articles of
waste, samples and other
returned articles
98 - 2 =
96 total
96 Commodities
84 Traded
Source : Jai Group Analysis
12 Not Traded
The Jai Group
Business Services for the BRICs Economies
23
J
Overall Share
in the Category
India holds significant share in small and relatively insignificant items in Brazil import
basket
No Of Items
India Share >3%
DIVISION OF BRAZIL IMPORTS BY SIZE OF IMPORTS AND INDIA SHARE
Brazils Imports From the World
4
2%
5
>1Bn
India's
Exports to
the World
4%
1%
2
500-900Mn 100-500Mn
71 (Pearls)
<100Mn
No of Items
-
4
>10Bn
(3)
1-10Bn
(19)
(5)
(4)
(3)
31
<1Bn
(2)
(7)
(5)
(5)
19
<300Mn
-
20(veg/fruit
prep)
No of Items
24
14
Detail Back up
Source : MDIC, DGFT, Jai Group Analysis
-
10%
8
(2)
11
67(feathers/
human hair)
4
9
58
The Jai Group
Business Services for the BRICs Economies
24
J
Three ways to increase market- share, we have focused on new items
THREE WAYS
Broad strategy on
many commodities
to achieve 3 %
share in many
•What to Eliminate from a large set
of items ?
Up Brazil
Market Share
Dominate current
products where
India has significant
share
•Polyester Filament Yarn
•Organic Chemicals
•Pharmaceuticals
Focus on few large
import items to
achieve significant
market share
•Which are the items Brazilian
imports are being dominated by ?
The Jai Group
Business Services for the BRICs Economies
25
J
Going forward, India could follow Chinese strategy of a broad based attack, which could potentially
be ambitious ……
China
Total Exports to Brazil 2000-2011
35
30
US$ Billion
25
34.8%
20
15
10
5
0
2000
2001
2002
No of Items
With Share >=
3%
33
39
44
No of Items
91
91
Overall
Share(%)
2.2
2.4
2004
2005
2006
2007
2008
2009
2010
2011
46
52
56
58
62
66
67
70
71
92
89
91
91
93
93
93
93
93
92
3.3.
4.4.
6
7.3
8.7
10.5
11.6
12.4
14.0
14.5
Source : MDIC, DGFT, Jai Group Analysis
2003
The Jai Group
Business Services for the BRICs Economies
26
J
Or south Korean strategy of focusing on large import items from Brazil
South Korea
Total Exports to Brazil 2000-2011
12
10
US$ Billion
8
19.3%
6
4
2
0
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
No of Items
With Share >
3%
17
18
14
11
14
11
15
15
15
14
18
16
No of Items
80
80
81
76
80
79
79
78
77
83
82
80
Overall
Share(%)
2.6
2.8
2.2
2.2
2.7
3.1
3.4
2.8
3.1
3.8
4.6
4.5
Source : MDIC, DGFT, Jai Group Analysis
The Jai Group
Business Services for the BRICs Economies
27
J
Both strategies require some kind of focus, and we started a filtering process to identify key items
The Filtering Process Explained
84
58
96 Items Traded
By Brazil
• Brazil does not
•
trade 98 and 99
77 is reserved for
future classification
38 HS2 Level
Commodities
• 12 Items Not
• 26 Items India
Traded With
India
is a small
exporter
<300Mn to the
World
• 20 Items removed
• Petroleum and other where India
cannot compete
• Items for which Brazil is actually a
• For which we
then did a 4
level study
net exporter
• Items where Brazils Imports from
world are less than 15% of India’s
exports to the world.
Source : Jai Group Analysis
The Jai Group
Business Services for the BRICs Economies
28
J
Out of the 58 we removed the below 20 because :
HS Code
Description
Comments
9
COFFEE, TEA, MATE AND SPICES.
Too Small Imports by Brazil
10
CEREALS.
17
SUGARS AND SUGAR CONFECTIONERY.
23
RESIDUES AND WASTE FROM THE FOOD INDUSTRIES; PREPARED ANIMAL FODER.
Brazil is a small importer
24
TOBACCO AND MANUFACTURED TOBACCO SUBSTITUTES.
Brazil is a small importer
27
MINERAL FUELS, MINERAL OILS AND PRODUCTS OF THEIR DISTILLATION; BITUMINOUS SUBSTANCES
40
RUBBER AND ARTICLES THEREOF.
41
RAW HIDES AND SKINS (OTHER THAN FURSKINS) AND LEATHER
48
PAPER AND PAPERBOARD; ARTICLES OF PAPER PULP, OF PAPER OR OF PAPERBOARD.
50
SILK
52
COTTON.
53
OTHER VEGETABLE TEXTILE FIBRES; PAPER YARN AND WOVEN FABRICS OF PAPER YARN.
Brazil is a small importer
57
CARPETS AND OTHER TEXTILE FLOOR COVERINGS.
Brazil is a small importer
63
OTHER MADE UP TEXTILE ARTICLES; SETS; WORN CLOTHING AND WORN TEXTILE ARTICLES; RAGS
Brazil is a small importer
69
CERAMIC PRODUCTS.
70
GLASS AND GLASSWARE.
71
NATURAL OR CULTURED PEARLS,PRECIOUS OR SEMIPRECIOUS STONES,PRE.METALS,
No - Brazil mainly import from Argentina
Distance to much + India unlikely to do sugar exports
India will not be able to compete
Distance / Mostly Exports are local
Brazil is a small importer
India doesn’t have much paper, India net Importer
Brazil is a small importer
Brazil is exporter
Brazil is Net exporter
Energy is required for glass
Brazil is net exporter
72,73
Iron Steel and Iron Steel Articles
India Growth probability low, India Net importer
74
COPPER AND ARTICLES THEREOF.
India itself has shortage of copper + distance barrier
76
ALUMINIUM AND ARTICLES THEREOF.
Source : Jai Group Analysis
Al requires electricity - India energy cost are high, India net Importer
The Jai Group
Business Services for the BRICs Economies
29
J
For the 38 HS2 Level code we listed all possible 4 level HS codes and filtered them once more
4 Level Short listing Reasons
•
We removed
– Commodities where Brazil is a net exporter
– Commodities that have share less than 15% share in exports currently reaching America (69000 mile radius)
– Commodities where India has exports to world less than 150 Mn
– Clothes and apparel(61,62) as a sector since Brazil is protective of the industry – as it is job
generating, except t-shirts
– Commodities whose value of imports by Brazil is less than 15% of India’s total Exports.
– Items where Brazils current sources are >=150Mn from Latin America and Mercosul
– Filtered items which were primarily exported by countries which may have technical or
distance advantage over India.
• Internal Jai Analysis on Probability and Unlikelihood of certain articles and sectors.
Source : Jai Group Analysis
The Jai Group
Business Services for the BRICs Economies
30
J
We identified 46 items that can power Indian exports to Brazil over the next three years
Sourcing From India
Total Imp From India – US $ 6
Bn
Top 10 Imports From India
(US $ 4.2 Bn)
Currently traded large value
(Total, Brazilian Imports), but low
Indian market share
Currently Traded Small
Value(Total Brazilian Imports)
<US $ 200 Mn
Future Items
Source : Jai Group Analysis
High Potential for further growth
3004, Medicaments
8708, Parts and Accessories of Motor Vehicle
2933, Heterocyclic Compounds
3902, Polymers of Propylene
3808, Insecticides
8419, Plant and Lab machinery
4202, Trunks suitcases
3921, Plastic Plates, Film, Sheets, Film
Moderate Potential for further growth
High Imports But Low Potential Because Indian share already 20-25% :
2710, Petroleum
5402,Synthetic Filament
2704, Coke of Coal
2934, Nucleic Acids
5509, Yarn
5205, Cotton Yarn
3204, Synthetic Organic Coloring Matter
8502, Eletric Gensets
5510, Yarn of artificial fibres
8504 Electrical Transformers
8536, Electrical Apparatus for protecting circuits
8481, Taps and Cocks
8421, Centrifuges
3811, Antiknock Preparations
8532, Capacitors
9032, Automatic Regulating
3824, Binders for Foundry
8535, Electrical apparaturs for protecting circuits
2833, Sulphates and Alums
5503, Synthetic Staple Fibres Not Carded Combed
6109, Tshirts
8547, Insulating Fitting for Electrical
3303, Perfumes and Toilet water
9001, Optical Fibres
4901, Printed Books
9608, Ballpoint Pens
9404, Mattress supports
8204, Hand Operated Spanners
8205, Hand Tools,
1302, Vegetable Saps and extracts
9405, Lamps and Lighting including Searchlights
3823, Industrial Mono Carboxlyic Acids
3924, Plastic Tableware
3212, Pigments for Paints
3302, Mixtures of Odiferous Substances
8803, Parts of Helicopter
8484, Gaskets and similar
9603, Brooms, brushes, hand operated sweepers
3002, Human Blood for therapeutic
The Jai Group
Business Services for the BRICs Economies
31
J
Sourcing From India (Reasoning)
High Potential for further growth
Low Potential for further growth
• High Growth >15%
• India Share Low t< 15%
• Low Growth <15%
• India Share High Already >15%
• High Growth >15%
• India Share Low <15%
• India to America Share > 15%
• Low Growth <15%
• India Share Already High >15%
• India to America Share < 15%
Future Large Value
• Imports by Brazil Greater than US $ 200Mn
• India Share Low < 15%
• India Share to US Significant
• Also products that are almost zero in terms of value
exported to Brazil.
•
•
•
•
Future Small Value
• Imports by Brazil Lesser than US $ 200 Mn
• High Growth > 15%
• Imports by Brazil Lesser than Cutoff
• Low Growth < 15%
Top 10 Imports From India
Currently traded
Source : Jai Group Analysis
Imports by Brazil Greater than Cutoff
Import Growth Not High
India Share High Already > 15%
India to US Limited
The Jai Group
Business Services for the BRICs Economies
32
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We then evaluated ease of entry in to Brazil based on scoring difficulty of individual barriers
DESCRIPTION OF BARRIERS TO ENTRY
Categories
Description of Attributes
Import Duties
Technical Barriers
Regulatory Barriers
Phyto- sanitary Barriers
Reflect chemistry
between Natura and the
Potential Partner
Brand Sensitivity
4. How important is brand to sell in to
Brazil ?
Country Image
5. How important is country image and its
impact on perceived quality ?
Registration Time + Cost
6. How long does registration with key
customers such as Petrobras ?
7. How important is having an established
distribution channel ?
8. How concentrated is the market ?
Image
Market Related Barriers
Describe adherence to
strategic objectives of
Natura
Market Access
Distribution Channels
Market Concentration
Preference to Locals
Protectionism
Local Manufacturing
a Pre-condition
Key Success Factors
Source: Jai Group Analysis
1. Common External Tariff
2. Technical standards that are rigorously
checked
3. Barriers related to health and sanitary
conditions
9. Are there strong Brazilian incumbents,
who will increase protectionism if they
are seriously threatened ?
10. Is there a specific preference for local
manufacturing through credit / quotas ?
The Jai Group
Business Services for the BRICs Economies
J
Even if the selected products other than Diesel grow at 25 %, if Diesel imports decline too rapidly, meeting export target
will be unrealistic
Indian Exports to Brazil in 2015- USD bi
Projected Indian share
of Brazilian Diesel Imports ( 2015)
19%
15%
10 %
8%
20 %
11.8
10.4
8.7
8.0
10 %
9.9
8.5
6.7
6.0
0%
8.3
7.0
5.2
4.5
Projected
annual growth
Rate of
Diesel imports
( 2012-2015)
Target
Not met
Met
The Jai Group
Business Services for the BRICs Economies
34
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Some of the top 10 categories today hold potential, some do not
Sourcing From India
High Potential
Top 10 with
potential
Moderate Potential
3004 Medicaments
147
2934 Nucleic Acid
11
8708 Auto parts
162
5510, Yarn of artificial fibres
37
2933 Bulk Drugs and Heterocyclic compounds
54
3823, Industrial Mono Carboxlyic Acids
32
3902 Polymers of Propylene
46
3204, Synthetic Organic Coloring Matter
30
5402 Synthetic Filament
89
2710 Diesel
37 *
9405, Lamps and Lighting including
Searchlights
8484, Gaskets and similar
5509 Synthetic Yarn
Cotton Yarn
Coke of Coal
30
30
39
(10)
(43)
Top 10 that will
decline in sales
The Jai Group
Business Services for the BRICs Economies
35
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As a result, we arranged each heading items in decreasing order of their ease of entry and grouped them
in to A , B and C (Total Score =45) We did not score top 10 traded items
Sourcing From India
Total Imp
From India
– US $ 6 Bn
High Potential for further growth
Moderate Potential for further growth
4202, Trunks suitcases
3921, Plastic Plates, Film, Sheets, Film
Currently 8419, Plant and Lab machinery
traded large 3808, Insecticides
value (Total,
Brazilian
Imports),
but low
Indian
market
share
62
12
63
117
A
B
B
A
32
30
26
22
5510, Yarn of artificial fibers
3204, Synthetic Organic Coloring Matter
3824, Binders for Foundry
3811, Antiknock Preparations
8532, Capacitors
8421, Centrifuges
8502, Eletric Gensets
8504 Electrical Transformers
9032, Automatic regulating or controlling instruments and apparatus
8536, Electrical Apparatus for protecting circuits
8481, Taps and Cocks
21
22
11
11
9
24
214
66
48
83
152
A
A
B
C
C
B
A
A
B
B
B
37
30
28
27
24
23
22
21
19
18
18
5503, Synthetic Staple Fibers Not Carded Combed
4901, Printed Books
9001, Optical Fibres
Currently
2833, Sulphates and Alums
Traded
8547, Insulating Fitting for Electrical
Small
Value(Total 6109, Tshirts
Brazilian 8204, Hand Operated Spanners
Imports) 8205, Hand Tools,
<US $ 200 9608, Ballpoint Pens
Mn
3303, Perfumes and Toilet water
8
17
9
11
3
32
9
33
11
B
B
B
B
B
B
B
B
C
37
34
30
27
27
24
21
21
19
3823, Industrial Mono Carboxlyic Acids
9405, Lamps and Lighting including Searchlights
1302, Vegetable Saps and extracts
2
18
10
C
B
C
32
30
19
20
B
15
9404, Mattress supports
15
C
15
3924, Plastic Tableware
41
B
3302, Mixtures of Odiferous Substances
3212, Pigments for Paints
7
5
B
B
9603, Brooms, brushes, hand operated sweepers
8484, Gaskets and similar
3002, Human Blood products for therapeutic usage
5
13
61
C
B
A
30
27
Future
Items
33
30
The Jai Group
Business Services for the BRICs Economies
36
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We evaluated each of these items individually and made reasonable assumptions to gauge potential ( I)
>100 M of additional annual growth in exports possible
2011 Brazil
Exports
3 year CAGR
( 08-11)
Expected
Expected
Growth Rate
Growth Rate (11-15) %
Sales due
Current
Additional to
Indian
Current Projecte sales due increased
Exports to Market d Market to market market
Brazil
Share Share
growth
share
Expected
annual
Jump in
2015
HS code
Description
8502
Electric Generating Sets
and Rotary ( principally
wind powered)
Converters
918
55%
18,72%
66
7%
10%
65
149
214
8708
Parts and Accessories of
Vehicles ( mainly tractor
parts, gear boxes,
suspension systems,
brakes)
6318
8%
8,00%
96
2%
3%
76
86
162
8481
valves and similar
appliances for pipes,
boiler shells, tanks, vats 1193
8%
8,00%
10
1%
10%
4
149
152
3004
Medicaments and
Pharma
3490
10%
9,36%
105
3%
5%
45
102
147
3808
Insecticides and
Pesticides
1959
16%
9,36%
44
2%
5%
19
98
117
The Jai Group
Business Services for the BRICs Economies
J
We evaluated each of these items individually and made reasonable assumptions to gauge potential ( II)
>50 M of additional growth in exports is possible
CAGR (
20082011)
Current
Indian
Expected Current Market Expected
CAGR (
Indian
Share of Market Sales due Sales due Additional
2012Exports to Commodit share
to market to share Exports in
2015)
Brazil
y
2015
growth growth 2015
HS Code
Description of commodity
2011
Brazil
imports
from
World
5402
Synthetic Filament
798
9%
9,00%
204
26%
26%
84
5
89
8536
Electrical Apparatus for Switching or
Protecting Electrical Circuits (
principally less than 1000 volts)
1301
10%
9,36%
12
1%
5%
5
78
83
8504
Electric Transformers ( Principally static
converters)
1161
12%
12,00%
25
2%
5%
14
52
66
The Jai Group
Business Services for the BRICs Economies
J
We evaluated each of these items individually and made reasonable assumptions to gauge potential (III)
>25 M in additional growth in annual exports in possible
HS Code
Description of
commodity
2011 Brazil
imports CAGR (
from
2008World
2011)
Expected
CAGR (
20122015)
Current
Indian
Exports to
Brazil
Current
Indian
Market
Share of
Commodity
Expected
Market Sales due Sales due Additional
share
to market to share Exports in
2015
growth
growth
2015
913
519
3%
12%
3,00%
9,36%
3
65
0%
15%
5%
15%
0
46
48
-
48
46
86
16905
25%
20%
9,36%
10,00%
0,3
3244
0%
19%
20%
15%
0
1506
41
-1.469
41
37
21%
61%
3%
9,36%
18,72%
3,00%
1
7
114
1%
7%
24%
20%
10%
26%
0
7
14
32
25
11
33
32
25
3924
2710
Automatic Regulating and
Controlling instruments and
apparatus ( all kinds of
process instrumentation)
Propylene Polymers
Tableware and other
household articles and
hygienic or toilet articles, of
plastics.
Diesel
8205
6109
2934
Keys and wrenches
(including torque wrenches);
interchangeable spanner
sockets, with or without
handles
80
T-Shirts
107
Nucleic Acid
475
9032
3902
The Jai Group
Business Services for the BRICs Economies
J
We evaluated each of these items individually and made reasonable assumptions to gauge potential ( IV)
<25 M in additional annual growth in Exports
Current
Indian
Market
Expected Sales due Sales due
Share of
Market
to market to share
Commodity share 2015 growth
growth
Additional
Exports in
2015
HS Code
Description of commodity
Current
2011 Brazil
Expected Indian
imports from CAGR (
CAGR (
Exports to
World
2008-2011) 2012-2015) Brazil
8421
Centrifuges for liquids and gases
839
5%
5,00%
7
1%
3%
2
22
24
3204
5510
3303
9405
4901
Synthetic Organic Coloring Matter
Yarn of Artificial Staple Fibers
Perfumes and Toilet Waters
Lamps and fittings
Printed booked
311
275
117
181
180
4%
16%
24%
22%
11%
4,00%
9,36%
9,36%
18,72%
9,36%
69
21
4
2
2
22%
8%
3%
1%
1%
25%
10%
10%
5%
7%
12
9
2
2
1
10
12
18
16
16
22
21
20
18
17
9404
Support for beds (somiês); mattresses,
duvets, pillows, ottomans, pillows and the
like, fitted with springs or stuffed or
internally fitted with any material
comprising these articles of rubber or
plastics, whether or not covered.
60
37%
18,72%
4
7%
12%
4
11
15
27%
9,36%
0
0%
3%
0
13
13
9%
9,00%
5
2%
5%
2
10
12
3824
Gaskets and similar joints of Metal
171
Other plates, sheets, film, foil and strip, of
plastics.
237
Prepared binders for foundry moulds or
cores
475
5%
5,00%
6
1%
3%
1
10
11
2833
Sulphates; alums; peroxosulphates
8%
8,00%
7
4%
7%
3
8
11
8484
3921
186
The Jai Group
Business Services for the BRICs Economies
J
We evaluated each of these items individually and made reasonable assumptions to gauge potential ( V)
<25 M in additional annual growth in Exports
HS Code
Description of commodity
Current
Current
Indian
2011 Brazil
Expected
Indian
Market
Expected Sales due to Sales due to Additional
imports from
CAGR (
CAGR (
Exports to Share of
Market
market
share
Exports in
World
2008-2011) 2012-2015)
Brazil
Commodity share 2015 growth
growth
2015
8421Centrifuges for liquids and gases
839
5%
5,00%
7
1%
3%
2
22
24
3204Synthetic Organic Coloring Matter
5510Yarn of Artificial Staple Fibers
3303Perfumes and Toilet Waters
9405Lamps and fittings
4901Printed booked
311
275
117
181
180
4%
16%
24%
22%
11%
4,00%
9,36%
9,36%
18,72%
9,36%
69
21
4
2
2
22%
8%
3%
1%
1%
25%
10%
10%
5%
7%
12
9
2
2
1
10
12
18
16
16
22
21
20
18
17
60
37%
18,72%
4
7%
12%
4
11
15
Support for beds (somiês); mattresses,
duvets, pillows, ottomans, pillows and the
like, fitted with springs or stuffed or
internally fitted with any material
comprising these articles of rubber or
9404plastics, whether or not covered.
The Jai Group
Business Services for the BRICs Economies
J
We evaluated each of these items individually and made reasonable assumptions to gauge potential ( VI)
<25 M in additional annual growth in Exports
HS Code
Description of commodity
Current
Indian
Current
Market
2011 Brazil
Expected Indian
Share of Expected Sales due Sales due Additional
imports from CAGR (
CAGR (
Exports to Commodit Market
to market to share Exports in
World
2008-2011) 2012-2015) Brazil
y
share 2015 growth
growth
2015
3811
Anti-knock preparations
222
12%
9,36%
6
3%
5%
3
8
11
1302
Juice and Vegetable Extract
87
4%
4,00%
10
12%
20%
2
8
10
8204
hand operated spanners
46
19%
9,36%
9
20%
25%
4
5
9
8532
Electrical Capacitors
286
6%
6,00%
2
1%
3%
1
8
9
9001
Optical fibres and optical fibre bundles;
optical fibre cables
114
21%
18,72%
3
3%
5%
3
6
9
5503
Synthetic staple fibers, not carded,
combed or otherwise processed for
spinning
9%
9,00%
5
4%
7%
2
5
8
3302
Odorific Substances for making perfume
and for food industry
119
21%
9,36%
0,2
0%
3%
0
7
7
9608
Pens and Pencils
63
12%
9,36%
5
8%
12%
2
4
6
3212
Pigments for Paints
49
1%
1,00%
0,2
0%
10%
0
5
5
9603
Brooms, Brushes and Hand Operated
Sweepers
90
15%
9,36%
0
0%
3%
0
4
5
8547
Insulate Fitting for electrical
95
8%
8,00%
1
1%
3%
0
3
3
3823
Fatty Acids, Industrial Carboxyclic Acids 150
5%
5,00%
14
9%
9%
2
-
2
5509
Yarn, Synthetic Staple Fibres
338
17%
9,36%
87
26%
20%
37
-36
1
5205
Cotton Yarn
134
-10%
0,00%
82
61%
50%
0
-10
-10
2704
Coke and Lignite
937
1%
1,00%
189
20%
15%
8
-50
-43
127
The Jai Group
Business Services for the BRICs Economies
J
AGENDA
•
Executive Summary
•
Indo Brazil Trade Today
•
Sourcing From India
•
Sourcing From Brazil
•
Services Imports
•
Investment Study
•
Strategies for Trade Promotion for the Consulate
The Jai Group
Business Services for the BRICs Economies
J
Total Indian Exports
(2011)
251 US$ Bn
Brazil is even less important to India as a
source
Major Supplier Markets to India in 2011 (Imports)
Major Markets for Indian Exports in 2011
COUNTRY
Total Indian Imports
(2011)
369 US$ Bn
VALUE (US$
Bn)
SHARE
(%)
COUNTRY
VALUE (US$
Bn)
SHARE
(%)
1
U ARAB EMTS
34
14
1
CHINA P RP
43
12
2
USA
26
10
2
U ARAB EMTS
33
9
3
CHINA P RP
20
8
3
SWITZERLAND
25
7
4
HONG KONG
10
4
4
SAUDI ARAB
20
6
5
SINGAPORE
10
4
5
USA
20
5
6
NETHERLAND
8
3
6
GERMANY
12
3
7
UK
7
3
7
IRAN
11
3
8
GERMANY
7
3
8
AUSTRALIA
11
3
9
BELGIUM
6
3
9
NIGERIA
11
3
10
INDONESIA
6
2
10
KOREA RP
10
3
18
BRAZIL
4
2
31
BRAZIL
4
1
Source : MDIC, DGFT, Jai Group Analysis
The Jai Group
Business Services for the BRICs Economies
44
J
Imports from Brazil are however growing only slightly faster over overall imports
INDIAN TRADE WITH BRAZIL AND WORLD
Total Indian Imports v/s Exports (World) 20002011
Total Indian Imports v/s Exports (Brazil) 2000-2011
10
700
9
600
8
Export
Import
27.7%
500
Export
Import
22.1%
6
US$ Billion
US$ Billion
7
5
4
400
300
3
32.6%
2
18.8%
200
100
1
0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Source : MDIC, DGFT, Jai Group Analysis
0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
The Jai Group
Business Services for the BRICs Economies
45
J
Brazilian share is dominant in sugar and slag, but much lesser in most other commodities
DIVISION OF INDIAN IMPORTS BY BRAZIL SHARE
# of products = 18
Yes
75
Items
Yes
Of the items
currently
imported
Brazils’ Share
is >= 1%
< 8% Share:
Live animals, trees, coffee, gum,
tobacco, salt, crude oil, raw
hides, wood, pulp, iron and steel
Vinegars and Ores(slag) 8-9%
Share
Sugar 18% Share
# of Products=
No
Plastics, Fertilizers, Inorganic
Chemicals, Furniture,
Suitcases, Iron Steel,
Footwear
Currently
Traded between
India and Brazil ?
# of Products = 23
No
23
Items
Is India
Importing
these Items
from Rest of
World
Yes
Meat, Fish, Fertilizers,
Cereal, Dairy Produce, Malt,
Fur, Cork, Stra, Carpets,
Headgear, Umbrellas, Lead
Zinc, Tin,
No
# of products = 0
The Jai Group
Source: Jai Group Analysis
Business Services for the BRICs Economies
46
J
Out of 99 HS 2 Level Commodities India’s Imports of 30 are above US$ 1 Bn
India’s Import Basket for 2010-11
140
120
116
US $ Bn
100
80
77
60
40
29
20
27
13
11
8
7
6
6
5
5
4
4
4
4
3
3
3
3
2
2
2
2
2
2
1
1
1
1
0
Source: Jai Group Analysis
Products for Which Brazil is a Net Exporter and India is Net Importer
The Jai Group
Business Services for the BRICs Economies
47
J
We used a similar filtering process as used for Indian exports
The Filtering Process Explained
38
17
10 HS2 Level
Products with
India Imports
from World >
US$1 Bn
75 Common
Trade Products
7 HS2 Level
Products with
India Imports
from World
Moderate
38 Products Where India Net
Importer
Source : Jai Group Analysis
Removed
Product where
Brazil Net
Importer
We did distance
analysis and also
checked at HS 4
level if opportunity
presents itself
The Jai Group
Business Services for the BRICs Economies
48
J
Wood, Pulp, currently untraded items with potential for growth
Sourcing From Brazil
Tot Imp From Brazil –
US $ 3.5 Bn
High Potential for growth
Low Potential for growth
2603 Copper Ores
1507 Soyabean Oil
7204, Ferrous Waste
2903 Halogenated derivative of Hydrocarbon
High Value But Subjective to Market Needs
2709 Petroleum and Oils
1701 Cane and Beet Sugar
2926 Nitrile Function
2524 Asbestos
2207 Undenatured Ethyl Alcohol
7208 Flat rolled > 600mm widtb
7502, Unwrought Nickel
3901, Polymers of Ethylene
4407,Wood Sawn
2922, Oxygen Function Amino Compunds
8802, Helicopter Parts
8523, Prepared Unrecorded Media
2602, Mn Ores and Concentrates
8501, Electric Motors Excluding Gensets
7225, Flat Rolled Prd of Steel and other alloy
4104, Tanned Crusted Skin of Bovine
7207, Semi Finished Prd of Iron and Steel
7227, Bars and rods irregularly wound of Iron and steel
2849, Carbides
Future Large Value
4703, Chemical Wood Pulp Soluble
7601, Unwrought Aluminium
8302, Base Metal Mountings
4702, Chemical Wood Pulp Insoluble
4403, Rough Wood
7404, Copper Wastes
8406, Steam Turbines
2901, Acyclic Hydrocarbons
7213, Coils of steel
Future Small Value
4410, Particle Board
907, Cloves
1806, Chocolate /cocoa
5004, Silk yarns,
4408, vener sheets for wood,
2009, Fruit Juices
2909, Ethers and their derivatives
2825, Hydrazine
2507, Kaolin and Other Kaloinic Clay
4813, Cigarette Paper
1520, Glycerol
7103, Precious Stones
1521, Vegetable Wax
Top 10 Imports From Brazil
Currently Traded
(US $ 2.9 Bn)
Currently traded
Source : Jai Group Analysis
The Jai Group
Business Services for the BRICs Economies
49
J
Sourcing From Brazil (Reasoning)
High Potential for further growth
Top 10 Imports From Brazil • High Growth > 10 %
Currently Traded
• Brazil Share Moderate
Currently traded
• High Growth >10%
• Brazil to India Share Low < 5%
• Brazil to Asia Significant >15%
Low Potential for further growth
• Low Growth <10%
• Dependant
• Brazil Share High >15%
• Low Growth <10%
• Brazil to India Share Already High > 5%
• Export to Asia Limited <15%
Future Large Value
• Imports by India Greater than US $ 150 Mn
• Brazil Share Low <5%
• Brazil to Asia Significant >15%
• Also products that are almost zero in terms of value
imported from Brazil.
•
•
•
•
Future Small Value
• Imports Lesser than US $ 150 Mn
• High Growth
• Imports Lesser than Cutoff
• Low Growth
Source : Jai Group Analysis
Imports by India Greater than Cutoff
Import Growth Not High <10%
Brazil Share High Already >5%
Export to Asia Limited <15%
The Jai Group
Business Services for the BRICs Economies
50
J
Assuming India wants to source ( ignoring Government related barriers), we generated a
questionnaire for scoring the sourcing opportunities
Scoring Mechanism – Sourcing From Brazil
Strategic, industry related barriers
When do
you
Score ?
Long term sustainability
Logistics
Asset Price Multiples
Payment terms
Trading culture
Price to cost difference:
Predominance of
does one need to own
Brazilian players as
assets to access
against multi-nationals
competitive cost ?
No logistics access is
available
The sector is in great
demand and buying a
company or the
Payment is very informal
underlying productive
with very high risk of non
assets such as land/
performance.
mines/ trees very
expensive versus
revenue / profit potential
Trading culture is very
unorganized. People go
back on their word very
easily. Very few people
speak English in the
industry.
Brazil has some structural
advantage, so does India
Logistics exists, but is
locked up by
oligopolistic operators
The sector is a sector
with long term
fundamentals well
recognized, though at
present it is not in the
midst of a bubble
Payment terms are better
than most informal sectors,
but is largely based on trust
without any documentary
hold.
People speak some
English. While not every
Owning assets
trader is untrustworthy, It is
improves the ability to
possible to identify good
access lower costs
versus bad traders. Trading
culture is more formal
3
Brazil has a structural
advantage stronger than
India
The sector is a sector
with long term
Logistics exists but if
fundamentals well
prohibitively expensive
recognized, and
currently is fairly valued
Payment terms are
international , but are
relatively high cost
alternatives. Letter of credit
required from a class 1 bank
of American / European
origin.
Most traders are reliable
and trust worthy. Easy to
communicate. Trading
culture is very formal.
4
Brazil has structural
advantage that India cannot
match but some of its
neighbors can attempt to
compete with Brazil
Good logistics options
exists, but requires
planning
The sector is currently
undervalued.
Trading is very
Payment terms are standard
international. Multinational
international payment and
traders dominate. Very
letter of credit from Indian
organized and formal
banks are accepted.
culture.
5
Brazil has significant
structural advantage, which
Logitics is not a big
India or its neighbors cannot
issue at all
achieve due to factors that
cannot be changed
The sector’s assets are
available very cheap.
Payment terms are open
credit. They are better than
international standards
avoiding huge transaction
costs.
1
2
Brazil has no structural
advantage
Most trading is done
transparently on an
electronic trading platform.
Impersonality lends
credibility
One needs to own
assets to have access
to better than market
prices..
Multinationals are predominant and they
control both sourcing
and markets in Asia.
Multinationals and
Brazilians share the
ownership of key
privileged assets
connected with
sourcing.
Sourcing is largely
Owing assets allows
dominated by larger
improves reliability and Brazilian companies
lowers hidden costs
with an international
presence
Owing assets is not
required , a good
sourcing contract ( by
volume, time or
payment variables) can
lower costs
significantly.
Owning assets is not
required. It is a easily
traded commodity and
prices in Brazil are
among the lowest even
under fair market
conditions.
Sourcing dominated by
Brazilian companies
who trade
internationally, also with
India.
Sourcing dominated by
Brazilian companies,
who trade
internationally, but have
not traded with India
yet.
The Jai Group
Business Services for the BRICs Economies
51
J
As a result, we arranged each heading items in decreasing order of their ease of export (Total Score =45)
We did not score top 10 traded items. Also, we point out the category that each product belong
Sourcing From Brazil
Tot Imp
From
Brazil –
US $ 3.5
Bn
High Potential for further growth
Low Potential for further growth
2922, Oxygen Function Amino Compounds
7502, Unwrought Nickel
3901, Polymers of Ethylene
4407,Wood Sawn
A
A
A
A
39
35
33
30
8802, Helicopter Parts
4104, Tanned Crusted Skin of Bovine
2849, Carbides
7225, Flat Rolled Prd of Steel and other alloy
7207, Semi Finished Prd of Iron and Steel
7227, Bars and rods irregularly wound of Iron and steel
8523, Prepared Unrecorded Media
8501, Electric Motors Excluding Gensets
2602, Mn Ores and Concentrates
A
A
A
B
B
B
B
B
B
37
36
35
34
33
33
32
31
30
8302, Base Metal Mountings
7601, Unwrought Aluminium
4702, Chemical Wood Pulp Insoluble
4703, Chemical Wood Pulp Soluble
A
A
B
B
32
31
26
25
2901, Acyclic Hydrocarbons
7213, Coils of steel
7404, Copper Wastes
8406, Steam Turbines
4403, Rough Wood
B
B
B
B
B
33
33
31
31
29
1806, Chocolate /cocoa
5004, Silk yarns,
907, Cloves
4410, Particle Board
4408, vener sheets for wood,
2009, Fruit Juices
A
A
A
B
B
C
36
36
35
33
30
29
7103, Precious Stones
2909, Ethers and their derivatives
2825, Hydrazine
1520, Glycerol
2507, Kaolin and Other Kaloinic Clay
4813, Cigarette Paper
1521, Vegetable Wax
C
C
C
C
C
C
GroupC
32
31
31
31
30
27
Currently
traded
Future
Large
Value
Future
Small
Value
The Jai
Business Services for the BRICs Economies
52
J
AGENDA
•
Executive Summary
•
Indo Brazil Trade Today
•
Sourcing From India
•
Sourcing From Brazil
•
Services Imports
•
Investment Study
•
Strategies for Trade Promotion for the Consulate
The Jai Group
Business Services for the BRICs Economies
J
There are 20 Common Services Traded By India and Brazil with the world where Brazil’s Imports >= US $ 100 Mn
Brazil’s Service Imports Basket
US $ Mn
18000
16000
14000
CAGR % (2008-10)
of Brazilian Service
Imports
23
15844
33
13806
US $ Mn
12000
10000
8000
3
14
0
12
3501
3414
12
6000
4110
4000
3825
-5
2000
21
8
17
2917
1907
1679
1119
855
-4
114
14
-30
34
7
6
-4
851
756
650
642
521
488
299
270
-17
123
0
Brazil is Net Importer and India Is Significant Exporter i.e > US$1Bn
Services for Which Brazil is a Net Importer and India is Net Exporter
Source: Trade Map, Jai Group Analysis
The Jai Group
Business Services for the BRICs Economies
54
J
Like Products have HS Code Services Have EBOPS Code which are 3 Digit Numbers, EBOPS level is most detailed level i.e.
similar to HS8 and BPM5 which similar to HS2 in terms of Hierarchy.
The Filtering Process Explained
9
28 Common
Services at
Detailed Level
• India Total Services
•
Traded = 39
Brazil Total Service
Traded = 46
7 Services With
Probable
Opportunity
Removed
• Brazil Service Imports <$ 100Mn
and
• India Services Exports <$ 100Mn
EBOPS : Extended Balance of Payments Services Classification
Source : Jai Group Analysis
Removed Services
• Where India is a Net Importer
• Where Brazil is a Net Exporter
The Jai Group
Business Services for the BRICs Economies
55
J
There are 19 Common Services Traded By India and Brazil with the world but for some of these India itself is a Net Importer
India Net Importer
All Values – Total Brazilian Imports (US $ Bn)
Overview of Service Exports
3
53
Computer
Services
1
Workers
Remittances
16
India’s Total Exports (US $ Bn))
Personal
Travel
16
14
12
10
Sea
Transport
and
Frieght
4
8
Misc Business and
Proffessional Services
6
4
2
Operational Leasing
Services
2
Freight Insurance
14
Other Direct Ins
4
0
0 1
Sea Transport and auxiliary
services
3
Air Transport
-0.1
Reinsurance
-2
Source : Trade Map, Jai Group Analysis
2
0.4
Other Govt Service
1
1
1
Legal Services
Advertising, Market
Research
0.9
Architectural
Engg Services
Merchanting
Financial
Services
1
4
1
0
Embassies and 1.4
Consulates
0
Telecommunica
tion Services
4
Export / Import Ratio Of Brazil
The Jai Group
Business Services for the BRICs Economies
56
J
Travel , Transport , Engineering and Computer Services are Main Targets
List Of Services With Opportunity for Export from India to Brazil
India
EBOPS
Code
Brazil
Export
Description
2009
2010
Import
Growth
(05-10)
Import
Export
2009
2010
2009
2010
Growth
(05-10)
2009
2010
243
Other personal travel
11,136
14,160
14%
3,706
4,235
10,457
15,844
30%
5,191
5,780
208
Sea transport – Freight
7,508
9,502
17%
2,910
5,577
2,906
4,110
19%
1,161
1,517
280
Architectural, engineering and
other technical consultancy
1,412
1,971
-6%
3,584
5,565
3,200
3,825
19%
5,583
5,591
263
Computer services
46,233
56,286
21%
1,616
2,176
2,709
3,414
16%
192
195
275
Legal services
603
474
4%
212
160
628
650
42%
273
317
256
Other direct insurance
99
119
19%
110
102
1,042
642
4%
269
366
255
Freight insurance
979
1,240
18%
0
0
133
123
4%
5
9
Source : Trade Map, Jai Group Analysis
The Jai Group
Business Services for the BRICs Economies
57
J
As a result, we classified the products in to four different categories
Sourcing of Services From India
High Potential
Relatively Easier
to Enter
(Score >= 30)
More difficult to
enter Brazil
(Score < 30)
Low Potential
208, Sea transport – Freight
33
243, Other personal travel
30
263, Computer services
27
256, Other direct insurance
15
280, Architectural,
engineering and other
technical consultancy
24
255, Freight insurance
19
275, Legal services
19
The Jai Group
Business Services for the BRICs Economies
58
J
AGENDA
•
Executive Summary
•
Indo Brazil Trade Today
•
Sourcing From India
•
Sourcing From Brazil
•
Services Imports
•
Investment Study
•
Strategies for Trade Promotion for the Consulate
The Jai Group
Business Services for the BRICs Economies
J
Brazil receives two times as much and invests outside slightly less than India
Country
Total Inward FDI(US $ Bn)
Total Outward FDI (US $ Bn)
2009
2010
2011
2009
2010
India
25.8
19.5
36.5
15.9
14.6
Brazil
25.94
48.4
66
10
11.5
Source : DIPP, UNCTAD, Jai Group Analysis
The Jai Group
Business Services for the BRICs Economies
60
J
Brazil mainly invests abroad in Europe, India’s main investors are from Anglo-saxon geographies
and Japan
Where India is Sourcing FDI and where Brazil is directing its FDI Globally
US $ Billion
India’s Main Sources Of Inward FDI
Brazil’s Main Destinations For Outward FDI
Country
2009
2010
2011
Cumulative
00-11
% Share of
Total
Inward
Cumulative
Country
2008
2009
2010
Cumulative
01-10
% Share of
Total
Outward
Cumulative
Mauritius
10.3
6.9
9.9
64.1
38
Europe
-1
53
4
87
48%
Singapore
2.3
1.7
5.2
17,1
10
Austria
0
43.2
-5.2
40
22%
UK
0.6
0.7
9.2
15.8
9
Cayman
Islands
11
-44
9
32
18%
Japan
1.1
1.5
2.9
12.3
7
British Virgin
Islands
-2
3
-1
16
9%
USA
1.9
1.1
1.1
10.5
6
United States
4
-1
2
14
8%
Netherlands
0.8
1.2
1.4
7.1
4
Bahamas
-1
1
0
13
7%
Cyprus
1.6
0.9
1.5
6.4
4
Netherlands
0
1
8
12
7%
Germany
0.6
0.2
1.6
4.6
3
Denmark
-3
5
-2
10
6%
France
0.3
0.7
0.6
2.9
2
Spain
1
0
3
10
6%
UAE
0.6
0.3
1.7
2.2
1
Argentina
1
1
1
6
3%
The Jai Group
Source: UNCTAD, Central Bank of Brazil, DIPP, Jai Group Analysis
Business Services for the BRICs Economies
61
J
Brazilian companies have invested in India …..
Brazilian Companies Invested and Present in India
Who ?
When Entered ?
What did they invest in and
how much ?
Quantitative Indicator of Returns
Gerdau
2007
USD 71 million
Gerdau agreed to a second wave of investments (USD 50
millon) to increase production in India
Marcopolo
2008
USD 44 million
Marcopolo is producing 11000 business in India. Local plant
is expected to beat Brazil in the next years in terms of the
number of buses produced in a year, Delhi Government has
given an order of 600 buses and they are already plying the
streets of New Delhi.
WEG
2006 for commercial
sales, 2011 for
investment
USD 170 million
Have tasted India selling over USD 100 million from Brazil
COFAP
2009
USD 14 million
Business grew to USD 10 to USD 15 million in 2011
Vulcabras
2011
USD 20 million
Too soon to say as the deal has just closed
The Jai Group
Source: Jai Group Analysis
Business Services for the BRICs Economies
62
J
Some of the investments have been in the top 30 sectors where India invites FDI
US $ Billion
Top 30 Sectors for FDI Inflow into India Cumulative(2000-2012)
35
32
30
25
COFAP,
Endurance,
Marco Polo
20
15
13
11
11
11
10
10
Gerdau
9
Petrobras
7
5
7
WEG
Perto
6
3
3
3
3
3
3
2
2
2
2
1
1
1
1
1
1
1
1
1
1
0
The Jai Group
Source: DIPP, Jai Group Analysis
Business Services for the BRICs Economies
63
J
Indian investments have been more wide spread and several Indian companies function in Brazil
US $ Billion
35
30
Top 30 Sectors for FDI Inflow into Brazil Cumulative (2001-10)
Aditya Birla
Novelis,
L&T
30
26
25
Wipro, Infosys,
TCS, Hcl, Mahindra
Satyam, Genpact
25
Renuka
Sugars
24
21
20
Torrent Pharma, Dr Reddys
Labs,Glenmark, Zydus Cadila,
Neelam America,Pidlite,
Aurobindo Pharma, Stride
Arcolab,
21
20
Mahindra
Automotive,
TVS, Motherson
Sumi, Minda
20
15
13
Vijai Electrical,
Crompton Greaves,
KEC, Kalpataru
13
11
10
5
ONGC
7
6
CRI Pumps,
Thermax
Aditya Birla
Carbon Black
6
4
4
3
3
2
United
Phosphorus
2
2
1
1
1
1
1
0.9 0.7 0.4 0.3
0
The Jai Group
Source: Central Bank Of Brazil, Jai Group Analysis
Business Services for the BRICs Economies
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Common Only Brazil Only India
Brazilian outflow strong in Finance, Food and Beverages, Mining and Metals, Petroleum and Gas and,
Indian track record in these areas attracting investments has been limited
India FDI Inflow
Average
2010 & 2011
Average Share of
Sector
Brazil FDI Outflow
Average
2009 & 2010
Average Share of
Sector
Agriculture
323
1%
0
0%
Mining
153
1%
24782
47%
Petroleum and gas
617
2%
2312
14%
Food, beverage
371
1%
2176
8%
Chemicals
2608
9%
48
0%
Construction
1251
5%
27
0%
Textiles
215
1%
62
1%
Metallurgy
1773
5%
1090
5%
Rubber
104
0%
0
0%
10441
36%
968
6%
Trade retail + wholesale
645
2%
496
3%
Finance and Insurance
0
0%
2530
15%
Services to Companies
7311
27%
0
0%
Others services
4133
15%
800
5%
Other Manufacturing
The Jai Group
Source: UNCTAD, Central Bank of Brazil, DIPP, Jai Group Analysis
Business Services for the BRICs Economies
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AGENDA
•
Executive Summary
•
Indo Brazil Trade Today
•
Sourcing From India
•
Sourcing From Brazil
•
Services Imports
•
Investment Study
•
Strategies for Trade Promotion for the Consulate
The Jai Group
Business Services for the BRICs Economies
J
Traditional initiatives of trade promotion have significant limitations
TRADITIONAL INITIATIVES
Traditional
Initiatives
Useful when ?
Limitations
Exhibitions and
Trade Fairs
Use funding lines available
Good excuse to make a trip
General purpose India fair probably makes less sense
than specialized industry fair
Buyer Seller meets New product, where Brazil imports and India
exports to ROW
If not backed by research could be wasteful
expenditure
Funding
Journalists to go
to India
Cheap way to get attention to India
Often journalists are badly briefed and do a poor job
Sending students
for free to India
Relatively inexpensive
Wrong kind of students could go
General purpose
credit lines for
exports
Easy, plain vanilla credit, that relies on local bank Banks do not push Indian credit lines which give them
for targeting sectors
low returns
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Several new initiatives could be utilized instead (1)
INITIATIVE PROS AND CONS ( 1/3)
New Initiatives
Intensity of
Examples/ What is it Exactly ?
Why and when to use ?
Effort
Money
Relations
Webinars and Databases on
trade that can be searched
High
Low
Moderat
e
Recent Webinars , Cheat sheets
Improve awareness and knowledge
that are being prepared as part of
this project
CEO Dinners
High
Moderate
High
CEO dinner on Banking and
Telecom for IT services firms
Close connection to
Low
Investment Banks and Private
Equity Shops
Low
High
India- Brazil innovation fund, large Open to new ideas,influential players with capital,
Pharma deals which may need
having access to deals
Govt support, Telecom deals,
Infrastructure deals, where
Government can be a catalyst/
investor
“ Culture in Workplace”
Workshops
Moderate
Moderat
e
Inhouse workshops for large
companies who can buy Indian IT
services
High
B2B sales is key , India needs investment in these
sectors, keep high level connections alive
Confront fear of the unknown : “ working with
Indians who are aliens and strange people” in a
corporate setting and with comfort
Sensitize Indians on how to deal with Brazilians
Press Relations
High
Moderate
Low
Press articles, interviews to help
Brazilians think about India on
friendly terms
Constantly create an agenda in collective psyche
that suits Indian interests, confront fears and false
propaganda at the idea level among Brazilian
elites, crusade on specific issues of visas, imports
of services, anti dumping etc, in sophisticated
The Jai Group
Business Services for the BRICs Economies
ways
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Several new initiatives could be utilized instead (2)
INITIATIVE PROS AND CONS ( 2/3)
Strong Feedback
High
and Analysis System
Low
Low
Understand what do visa applicants actually do in Provide a fact based index of performance and
India and where they needed help, also track
a way to measure impact of multiple initiative
whether they were influenced by any of the
programs of the consulate
Guided Tour with
the Consul
High
High
Low
High powered and select set of Executives
chaperoned through India / Brazil
Annual tour where the Consul General and his
consultants show the lay of the land to visitors,
whether Indian or Brazilian
Big Initiatives with
Government
Support
High
High
High
•
Set a bold agenda for industry ( Pharma and
BPO) , a publicly visible program where India
and Brazil work together where commercial
objectives of both are met
•
•
On Line
communities
Modera Moder Low
te
ate
Sao Paulo- Mumbai Modera Low
CEO roundtable
te
video webinar
High
Indian Pharma to reduce health care costs ,
through direct distribution
India teaches Brazilian tourism professionals
English for Olympics/ World Cup
India provide expertise for bottom of
pyramid goods
• A place on line, for specific sectors of the
industry, where Indian and Brazilian
businessmen could chat / compare notes,
qualify/ black list business practices, where
content is created in a collaborative manner.
• A place where manufacturers can advertise
their products, creating supply chain
integration
Useful for new industries, where mutual
knowledge is limited and terms of trade,
reliable suppliers etc are difficult, instead of
consulate being responsible for content, it just
provides a space for people to post comments,
it can add as a moderator and remove bad
comments, something like Amazon book
review, e-bay credibility rating
Periodically beating the tyranny of distance using
tools of technology, to connect decision makers,
real time, who may not travel to Brazil often, to
Every three months, good way to distribute
ideas among the powerful
The Jai Group
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Several new initiatives could be utilized instead (3)
INITIATIVE PROS AND CONS ( 3/3)
Innovation Fund
High
High
High
Using small budgets, unlike China, Engage India and Brazil
productively in a value creating activity that is highly coveted
by Brazilian Industry, which could convert India’s image as a
friend
Areas such as seeds, bio tech, medical
devices, urbanization, renewable energy
etc, where India and Brazil have
significant expertise and needs, but have
not really worked together
Engage the Diaspora
to connect to Brazil
High
Low
Moderate
Use silicon valley and other parts of the world with active
Diaspora to connect to Brazil with greater glamor
Work together with the Overseas Indian
ministry to open eyes of Brazilian business
to the power of India abroad and through
them open more doors
Personal Letter to
Buyers with facts and
figures/ Direct Mailing
done tastefully
Moderate
Low
Low
Use the high office of consulate to bring attention of powerful Useful for new industries where Brazilians
decision makers to the benefits of trading in specific items
are not aware of Indian strengths
with India, elevating a commercial promotion message in the
rank of attention, through the symbol of state power
delivered in a personal, written communication
Industry / Specialized
Newsletter
High
Low
Moderate
Generate a Portuguese news letter by specific industry, rather Useful for new industries, a better way to
than general purpose news, for industries which India wants get attention of practical people who are
to push in Brazil among buyers
interested in specifics of an industry than
global trends
Kiosks/ Showrooms/
Store in store display
High
High
Moderate
Create display space for B2C products to attract attention of
Brazilian consumer, even raffle a trip to India, like Pao de
Acucar is doing for Portugal
State specific
partnerships, “ Adopt
a Brazilian State”
High
Moderate High
Useful to show case Indian products and
very effective if combined with
promotional activity for tourist season to
India
Compensate for size through focus, by adopting and investing Allows India a larger than life presence in
in a specific state, channeling Indian investment , such
small geographical entity
adoption could change every 3-4 years
The Jai Group
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Consulate should tailor specific measures for specific product niches, helping define bold
initiatives at Government to Government level, involving Indian private sector is one good idea
What can the Consulate do
Segments
Examples
Problem
Description
“ Boldness and
Creativity”
We risk
plateauing
Products
where India Pharmaceuticals despite high
already has , Synthetic Yarn, potential,
significant Organic
because
Chemicals
strategies are
market
share
too me-too, and
need bold
innovation and
big moves
Drivers for
Solution
1.
2.
3.
Types of Government initiatives that Specific Actions the Consulate can
will work
take
No bold
1.
moves at
an industry
level
New
2.
strategies
Greater
depth of
alliances
1.
Government level alignments with
Federal and State Governments
to solve a Brazilian problem say
in healthcare
Start engaging bigger banks
actively, and connecting them
2.
with Indian CEOs , catalyzing
interaction
Work with Sao Paulo
Government health care to
identify key problems in
Brazilian health care I that India
can help solve, involve local
firms to dis-arm protectionist
tendencies
Start cultivating relationships
with strong Brazilian investment
banks and private equity shops
The Jai Group
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Consulate can promote crowd learning, on line communities and study groups to attack
common problems, identifying what they are is a good first step
What can the Consulate do
Segments
Products
where India
is beginning
to make an
entry
Examples
Problem
Description
Insecticides,
transformers
“ Lack of broad
awareness”
We risk not
capitalizing on
some initial
victories, because
not many Indian
firms know that
others have
succeeded and
the firms who
have succeeded
may not know
how much more
they can succeed
if they can
continue
investing
Drivers for
Solution
Types of Government initiatives that Specific Actions the Consulate can
will work
take
1.
2.
1.
2.
3.
Lack of
knowledge
of existing
victories
Additional
investment
s
Broadening
the product
portfolios
3.
4.
5.
Publicize the success of Indian firms
in specific industries through a new
letter/ webinar
Identify key issues and show how
Indian companies have solved them
Find ways to stimulate co-operative
behavior that could benefit every
one
a. Common problems every
one faces
b. Lobbying
c. Sharing leads and
consortiums ( way the
Spanish did)
EXIM Bank and other sources of
capital
Promote small groups within the
Chamber to share experiences
1.
2.
3.
4.
5.
Industry specific webinars
News Letters that are specific to
industry
Regular industry specific work
sessions on line
Community building on line
a. Who are the bad creditors
?
b. Which companies do not
honor commitments
c. What are the upcoming
tenders in the sector etc
Targeted credit lines to stimulate
adoption
The Jai Group
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Detailed market knowledge can help in specific sectors
What can the Consulate do
Segments
Examples
Problem
Description
Drivers for
Solution
1.
Products
where India
has not even
started, but
has
strengths
bags and trunks,
gen sets, Tourism
“ Lack of
knowledge on “
low hanging fruit”
Indians have
been selling to
the rest of the
world, but not to
Brazil, it is new
and unknown
2.
3.
Lack of
industry
understand
ing/
customer
segmentati
on
Who are
the first
customers
for India ?
Which are
the first
suppliers
from India
Types of Government initiatives that Specific Actions the Consulate can
will work
take
1.
2.
3.
4.
5.
Build awareness about Indian
alternatives among Brazilian buyers
Collect market intelligence on what
sells in Brazil, under what terms and
why ?
Create an atmosphere of comfort
and trust for first deals to happen
Transfer credibility of consulate to
worthy Indian businessmen
Assistance on logistics, trade terms
1.
2.
3.
4.
5.
6.
7.
Webinars to Brazilians
Personalized Letters to buyers
Customized marketing campaigns,
direct mailing
Select dinner meetings on product
categories that involve B2B selling
Buyer seller meets
Guided Tours of Brazil and India
Specific fairs
The Jai Group
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Trust building is needed in some sectors, Press relations is one specific area which the
consulate is underutilizing today
What can the Consulate do
Segments
Examples
Problem
Description
Drivers for
Solution
Types of Government initiatives that Specific Actions the Consulate can
will work
take
1.
1.
1.
2.
Products
where India
has potential
but there is/
will be
resistance
IT services
Brazilians know
Indians are
good, Indians
are here, but
business is not
just happening
“ Trust needed,
concrete winwin
opportunities
and multicultural comfort
needs to be
built
3.
4.
Lack of Trust
Focus on
competition
rather than
co-opetition
Indian
success
elsewhere
has made
them less
flexible and a
wee bit
arrogant
Brazilian
worries has
made them
over
protectionist
2.
3.
4.
5.
Articulate 2-3 platforms where
Brazil and India can work together
Communications to the wider media
that India is not a threat, but a
friend
Actively promote real time, hands
on interaction between Indian and
Brazilian executives under a
comfortable and trusting
environment, institutionalize a “
introduction to Brazilians/ Indians at
the work place ” training module
together with schools like FGV
Actively court Brazilian Government
to provide Indian solutions for
Brazilian problems
Engage the Indian diaspora in
United States as a way to bridge
main land India with Brazilian selfperception of a “Western Society”
2.
3.
4.
5.
6.
Use the cultural center to
organize Workshops that involve
Indian and Brazilian senior
executives to build cultural
connect, using professional
coaches, organized through the
chamber of commerce, subsidized
by Indian IT companies/ Nasscom,
without having to explicitly state
it
Sponsor in-house workshops in
Banks, Telecom and Retail
companies on working with India
Hire a Press relations agency and
re-define national debate in press
and Television
CEO round table between
Mumbai and Sao Paulo involving
IT , Banking, Telecom executives
and clients
India- Brazil, innovation fund
Guided tour to Silicon Valley
The Jai Group
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