ASSIGNMENT

Marketing

SUBMITTED TO: SUBMITTED BY:

Mr.Vishal Agarwal (Associate Professor) Jai Shankar Kumar

BLS Institute of Management Ghaziabad PGDM-III

Roll No. 0800142128
Industries in India

Various large and small scale Indian Industries augment the country`s economy and bring radical
improvement in the society.

Industries play a vital role in shaping the economy of a society. All most all the countries of the
world are depended on their industries. An industry is the place that manufactures goods or
provides services and contributes to the economic production of a country. India is a developing
nation and the subcontinent has shows her zeal is rising various industries. Though, India is
basically an agrarian nation, yet Indian industries provide a financial support to the country.
Industries can be of various categories; in India four key industrial economic sectors are
identified. The primary sector, largely extract raw material and they are mining and farming
industries. In the secondary sector, refining, construction, and manufacturing are categorised.
The tertiary sector deals with services and distribution of manufactured goods.

The period from the late 18th and early 19th

centuries saw a radical change in the agriculture,
manufacturing, production, and transportation. In
India, the concept of industries was introduced in
the country with the coming of the British. The
inception of Indian industries influenced the
socioeconomic and cultural conditions in the
subcontinent. Thus the onset of the Industrial
Revolution marked a major turning point in Indian
society also. Tea industry in India is said to be the
beginning of industrial development of India. Industries of India can be divided into large scale
and small scale.

Among the Indian industries, Large scale industries are those which involve huge infrastructure,
man power and a have influx of capital assets. The heavy industries of India include the Iron and
steel industry, textile industry, Indian diamond industry, Indian food industry, automobile
manufacturing industry. Petrochemicals in India create a huge affect on the fiscal planning of the
country. Indian economy is greatly dependent on these large industries for its economic growth,
generation of foreign currency as well as for providing job opportunities. Large scale industries
make urbanization desirable in the society. However, the small-scale industries are another major
contribution to the Gross Domestic Product (GDP) of India. These Small scale sectors are termed
as traditional sectors and are referred to have huge growth prospect. The primary concern of the
small-scale industries is that capital resources are invested for the development of machineries.

Indian industries thus effect the economic development of the country. With an assortment of
large and small scale industries in the country, India has opened its doors to economic
opportunities. The industries such as Chemical Industry in India, Vegetable Oil Industry in
India, are among the contributing lot.

Iron and Steel Industry in India

With the establishment of the steel plant in Jamshedpur the iron and steel industry gained a
dimension.

A humble beginning of the modern steel industry was reached in India at Kulti in Bengal in
1870. But the conception of larger production became visible with the establishment of a steel
plant in Jamshedpur in Bihar in 1907. It started production in 1912. The new township was
named after Jamshedji Tata. Then came Burnpur and Bhadrawati Steel plants in 1919 and 1923
respectively. It was, however, only after Independence that the steel industry was able to find a
strong foothold. Excluding the Jamshedpur plant of the Tatas, all are in the public sector and
looked after by Steel Authority of India Ltd. (SAIL).

Bhilai and Bokaro plants were set up with Soviet collaboration. Durgapur and Rourkela came up
with British and West German technical expertise, respectively.

Iron and steel industry characteristically is a heavy industry. All its raw materials are heavy and
colossal. They encompass iron-ore, coking coal and limestone. Location of this industry is thus
governed by its proximity to raw materials, predominantly coking coal. The finished products in
turn are also heavy and need efficient transport system for their distribution. The Chhotanagpur
plateau bordering West Bengal, Bihar, Orissa, and Madhya Pradesh, therefore has been the
natural nerve-centre of this industry. Iron and Steel industry is also a basic or key industry. It
forgoes the heavy machines and tools industry. Umpteen light, medium, small and cottage
industries depend on it, as a reindex of modernisation and industrialisation of a country. The
industry also necessitates enormous investment, staple infrastructure, principally able means of
up-to-date transport and communication, not leaving out plentiful fuel or power supply. However
it does not directly create enough jobs, adjusting with the huge investment. It demands incessant
updation of technology, "R and D" (Research and Development) support, and most importantly a
long-awaiting time before it begins to produce dividends. All these contemplations made the
government to enter this key industry in a large scale on its own, notwithstanding its natural
shortcomings or limitations. Visakhapatnam Steel plant has the advantage of importing quality
coking coal from abroad and is at ease in exporting its products straight to the world market. In
1997-98 it had produced 2.2 million tones of pig-iron. The plant has been able to uphold
international standards of competence. In the same year it had exported almost 0.8 million tones
of steel and pig-iron, fetching foreign exchange of Rs. 600 crore.

Mini Steel Plant - As the name suggests, these plants are of rather smaller size. They produce
steel in electric furnaces, using scrap and sponge iron. They produce both mild steel and alloy
steel of given specifications. In 1997-98 they had yielded 8.5 million tones of crude steel.
Virtually 200 mini plants have been working day-in and day-out in the country.

In comparison to China, India had an excellent headstart, with the country producing 1.7 million
tones of pig-iron and 1.5 million tones of steel in 1950-51. By now China has overpowered India
a number of times. Its steel production was 59 million tones in 1988.

With 7.2 million tonnes, progress of iron and steel industry has been fairly sluggish. It was only
in the last decade that the production had really gained vigour. It was over 23 million tonnes in
1997-98.

Electronics Industry In India

In India, this industry has quite a vast range.

If one can direct his/her attention to the times of the manufacture of radio receiving sets in
private sector, in late forties, the electronics industry has achieved very quick progress. In 1983
its total production was worth Rs. 1.360 crores. This illustrates virtually a five times growth. In a
single year of 1987-88, growth was 37.7%. The industry has a very vast range of production, like
consumer electronics, principally radio and television sets, control instruments and industrial
electronics, computer system, communication and broadcasting equipment, aerospace and
defence equipment, and electronic components. India has surfaced as one of the leading
exporters of electronic goods. Besides hardware, India has garnered high reputation in the
production of software and has impressive international market. Electronics is the fastest
growing sector of Indian economy. In 1997-98 its production was worth Rs. 32,070 crores, 92 %
increase from the previous year. Exports in the same year had reached Rs. 9,500 crores. By the
end of 9th Five Year Plan, it is expected to surpass 49,000 crores of rupees. Similar to industrial
estates, Electronic Technology parks are being developed in various centres.
Paper Industry in India

Machine-made paper was first manufactured in India in 1812.

Machine-made paper was first manufactured in India in 1812. There were 15 mills with a total
production of lakh tonnes. With rising population and broadening of education, the demand for
paper has been escalating since. Owing to very narrow forest resources, wood pulp is in a
shortage. Therefore, bamboo, sabai grass and sugarcane bagasse are being used more and more.
Waste paper and rags are also recycled as raw materials. By 1997-98 there were 380 mills. From
these, 28 were large ones and the rest were small units of 33,000 tonnes each. In 1997-98,
production of paper and paper board had surpassed the 4 million tonne mark. The country has to
meet 10% of the demand through imports.

The paper utilised for newspapers is called newsprint. Its requirement is bound to grow
noticeably. The Nepanagar Newsprint plant in Madtiya was set up to meet these aforementioned
demands. Its capacity has been raised to 75,000 tonnes a year. West Bengal and Maharashtra are
the leaping states in this industry. But plants have come up in other parts of the country also. The
total newsprint production has now reached well over 400,000 tonnes. However, imports of
approximately 500,000 tonnes are still obligatory.

Petrochemicals In India

Due to their better-quality properties, petrochemicals have started replacing traditional raw
materials In India. Raw materials like wood, glass and metal. They have usage in domestic,
industrial and agricultural fields. For example, plastics have given rise to revolutionary changes.
A long list of by-products derived from raw petroleum has already been listed. The industry is
located near Mumbai and Vadodara. Now it is broadening to other parts of the country.

Consumption of major petrochemicals was 3 million tonnes in 1995-96 and by 2002 it had risen
to 6.8 million tonnes. Now there are as many as 14 mineral oil refineries in India - 3 in Assam, 2
in Maharashtra and one each in Gujarat, Karnataka, Kerala, Tamil Nadu, Andhra Pradesh, West
Bengal, Bihar, Uttar Pradesh and Haryana.
Cement Industry

Cement business is quite a boom and is called as the infrastructural core industry. In regard to its
key role in building and constructional activities, the cement business is now called an
infrastructural core industry. The housing industry is sure to gain in impetus, because a
remarkable backlog needs to be finished up- both in urban and rural sectors. The inaugural
cement factory built up in Chennai in 1904. At present, there are 115 large and 310 mini cement
plants with an installed capacity of more than 110 million tonnes. In 1997-98 the total production
was of the order of 83 million tonnes, of which 4.25 million tonnes were exported to South-east
Asia, Middle-east and Africa.

Engineering Industry In India

Reasonably vast ranges of engineering goods are produced in India targeted for both national and
international market. There was period when India was wholly dependent on other countries for
all kinds of refined goods. Then the country started manufacturing articles in its own land. Even
for this India had to import the total machinery from overseas. But now, the situation has altered
extensively. The country now manufactures the entire machinery for textile, sugar, paper, tea,
cement, mining and petrochemical plants. She has wrapped up numerous "turnkey" projects in
many other countries of the world. The heavy engineering plant at Ranchi has been designing and
manufacturing enormous machines required for iron and steel industry. Reasonably vast ranges of
engineering goods are produced not only for domestic but for international market also. The
industry earns the hard-needed foreign exchange.

Hindustan Machine Tools (HMT) produces an extensive variety of machines and precision tools,
preserving extremely lofty international standards. It has umpteen production centres in the
country.

In light engineering, the country tops the developing world. It has set up "Industrial Estates" in
several Afro-Asian countries too.

Sugar Industry In India

India is the largest producer of sugarcane so the sugar industry is pretty booming in India. India is
the largest producer of sugarcane. Placing sugar khandsari and gur or jaggery together, India
stands first in the world production. In 1950-51 there were 138 sugar mills in the country. Their
number has now escalated to 460. Since it deals with a consumable raw material, it is extensively
scattered and is fundamentally a rural-based industry. The production of sugar has also risen
gradually, though with ample fluctuations- from 1.13 million tonnes to 12.8 million tonnes by
1997-98. In 1998-99 sugar production had surpassed the 15 million tonne mark. In 1996 it was 13
million tonnes. But at the same time, its take-off in the domestic market has climbed further.

The industry still follows the dual-pricing system and compulsory levy to the public distribution
sector. However, the line between the two sets of prices is now pretty low.

The industry had commenced in the private sector and was mostly limited to Uttar Pradesh and
Bihar. Now it is reasonably extensive. As many as 256 mills are within the cooperative sector.
The pockets of sugar industry are well irrigated and have also become pockets of rural opulence
to a certain degree. It is a seasonal industry and as such is befitted with the co-operative sector.
The sugar content in cane is higher i.e. about 10.5% in Maharashtra and other southern states. The
industry therefore has been amplifying speedily in these parts.

Indian Diamond Industry

India has always been center stage in the dramatic history of some of the world`s most famous
mesmerizing diamonds. India has been the earliest known source of diamonds. Conversely, today
India is precursor in the gem industry and a world leader in the manufacturing of cut and refined
diamonds. Diamonds used in jewelry worldwide, nine out of every ten come from India.

Diamond industry of the Indian market is mainly

involved with cutting, polishing and exporting
diamonds. Diamonds cut and polished in India are
universally prized, and India has emerged as the
largest diamond-cutting center in the world.
Although India pioneered in the cutting of small
diamonds yet today, its craftsmen are equally
skilled at cutting all shapes and sizes of stones, and
even at faceting colored diamonds. Mumbai, Surat,
Ahmedabad, Bhavnagar and many small towns in
Gujarat are the main polishing centres of the
country. The industry employs one million people,
accounting for 95 per cent of the workforce of the
world`s diamond industry.

The Indian diamond industry today is a result of perseverance and hard work. After India became
independent in 1947, for several years, the nation`s economy was in the depression. Several views
for business and commerce opened up as new policies came into place, journey towards progress
and development also began for the diamond industry.

The Indian diamond industry was a scattered cottage industry only three decades ago. Now it
gradually evolved into a modern, mechanized, large-scale operation. Today, with state of the art
laser machines, lathes and diamond-impregnated scaives, most of the medium- and large-sized
diamond factories are well operational.
In the world of jewelry industry, this structured and rapid growth of the Indian diamond industry
has a long-lasting impact. The Indian exports of diamonds increased and in turn it reflected
greater than before in the export of designed jewelry. There is an evident fact that the Indian
jewelry designs have for centuries spell bounded everyone, from the Indian maharajas to the
monarchs of faraway lands.

Indian jewelry was made scrupulously by hand and was traditionally crafted by family jewelers
skilled in a particular style. Large exports directed to the establishment of factories, prepared with
the latest modern machinery. It is the newest methods in the manufacturing process that were
employed. India`s artisans along with their traditional skills dominated contemporary techniques
to provide the world with jewelry that conformed to international standards. There is a new
generation of young designers dominating the world market, apart from a host of established
houses that design the fashion jewelry. Today across India there are several jewelry design
institutes, encouraging fresh ideas and talent.

The Gem and Jewelry Export Promotion Council (GJEPC) is the zenith body of this dazzling and
growing industry. In 1966 the council was set up under the patronage of the Ministry of
Commerce and has helped to form a better understanding between the diamond industry and the
government. The chief function of the council is to develop and promote the export of gems and
jewelry from India and to contribute towards establishing a code of ethics to ensure that fair trade
practices are followed in the jewelry arena.

The Indian diamond industry is again at the doorstep of expansion. In order to enable diamonds to
be brought into the country to be sold, the government has legitimated the setting up of bonded
warehouses. The unsold diamonds can then be exported without any duty or tax. The government
is also constantly slackening its policies. Creating the Export Promotion Zones (EPZ) and Special
Economic Zones (SEZ) in order to help and promote the export of gems and jewelry from the
country is undoubtedly a new step for the betterment of the industry.

Chemical Industry In India

Rapid growth can be witnessed in the fields of organic and inorganic chemicals in India. It is 4th
in size, next only to (i) iron and steel, (ii) engineering, and (iii) textiles. Here too rapid growth can
be witnessed in the fields of organic and inorganic chemicals. These heavy chemicals aid down-
stream products such as drugs, dyestuffs, pesticides, plastics, paints etc.

Pesticides which include insecticides, weedicides, fungicides, rodenticides, have become

immensely significant for agricultural and for public health purposes. A DDT plant came up in
1954 in Delhi. In 1996-97 turnover of the industry was Rs. 900 billion and accounted for 10% of
exports, 20% of customs and excise earnings.

Pharmaceuticals is yet another arena in which India gives tough competition to the third world
countries. It is highly diversified and simultaneously vertically structured. The country is nearly
self-reliant in basic and bulk drugs. However, imports are still indispensable. But these are
compensated for, through exports to a specific degree. In 1996-97 total turnover of the industry
was Rs. 12,680 crores.
Fertilizer Industry In India

India stands 3rd in the production of nitrogenous fertilizers in the world. In 1950-51, the per
hectare consumption of fertilizer in India was not even 1/4th of the global average. Now,
however, India stands 3rd in the production of nitrogenous fertilizers in the world. In 1998-99, the
country had produced 10 million tonnes of nitrogenous fertilizers and 3 million tonnes of
phosphates. However, the entire consumption was 16.5 million tonnes. Thus India had to import
about three and a half million tonnes to meet the rising requirements.

Production is for the most part in the hands of public sector and co-operative sector. Prices of
fertilizers have been partly liberalised. However, the government has been paying huge subsidy to
farmers, as it is a critical input in meeting the rising food demands. There are 63 fertilizers units
in the country at present. So far fertilizer plants were inclined to be situated near the stockpiles of
raw materials. Now natural gas is being used more and more as worthy raw material. As it can be
channelised any where through pipelines, fertilizer plants are now being built close to potential
markets. Fertilizer plants are located in public, private, joint, and co-operative sectors. Some
fertilizer plants have also set up mutually by Indian and local collaborators in some west Asian
countries. Guaranteed amount of the production would be available for India in a way with fairly
reduced transport costs. India falls short in potassium and has to import it from abroad.

Vegetable Oil Industry In India

Extracting oil from oilseeds is an age-old village custom in India. Extracting oil from oilseeds is
an age-old village custom in India. The country is the largest oilseeds and vegetable oil producing
country in the world. It is also the biggest consumer of vegetable oil, due to it being the most
popular cooking medium. Even with a bumper crop of oilseeds India imports edible oil. The most
widespread sources of oil are groundnut, mustard and rape seed, sunflower seed, soyabean and
coconut. To supplement all these sources, lately palm oil had to be imported on a big scale. In
1950-51 the production of edible oil was 170,000 tonnes. By 1995-96 it had shot up to 6.42
million tonnes. During this period, demand rose up to 7.2 million tonnes and hence the need for
imports.

Ordinary oil was replaced in a big way by hydrogenated oils, bearing resemblance with ghee. In
fact, hydrogenated ghee is less nutritious compared to natural vegetable oil. Now it is possible to
be replaced by refined vegetable oils, available in preserved packs. Gujarat tops all other states in
vegetable oil, especially groundnut oil The industry is extensively spread, owing to the universal
nature of market and availability of different types of oilseeds in different parts of the country.
Like sugar vegetable oil has been escalating quite speedily, despite its exorbitant prices during the
last few years. This makes clear the need for setting up oilseeds technology mission. Within a
short time it has started demonstrating results.
Indian Food Industry

The Indian Food Industry developed rapidly and presently, it is one of the highest profiting
sectors of the nation. In the World, India is the second largest producer of food after China. The
country has achieved the potential of being the biggest with the food and agricultural sector.
Indian Food Industry is considered to be occupying about two thirds of the total Indian retail
market. Food and food processing technologies are developing gradually. In addition to that
modern skills and equipment have taken place in industries such as Canning, Dairy and Food
Processing, Specialty Processing, Packaging, Frozen Food, Refrigeration and Thermo Processing.

India is an agriculture based country. The country is concentrated in the production of various
types of fruits and vegetables which indeed contours the structure of the Indian food industry.
Among the sub-sectors of Indian Food Industry, fruits and vegetables industry have achieved the
second largest producer of vegetables in the world next to China and accounts for about 15
percent of the world`s production of vegetables. Vegetables are typically grown in India in field
conditions. The current production level in the Indian subcontinent is over 71 million MT and the
total area under vegetable cultivation is around 6.2 million hectares. Vegetables such as potato,
tomato, onion, cabbage and cauliflower report for around 60 percent of the total vegetable
production in the country. These fruits and vegetable industries manufacture health food as well
as health food supplements are rapidly improving segment of this industry, which is gaining vast
popularity amongst the health conscious population of the country.

Meat and poultry is one of the fastest growing segments of the agricultural sector in India at
present. In this industry, the production of eggs and broilers has been rising at a rate of 8 to 10
percent per annum. India is the fifth largest egg producer and the eighteenth largest producer of
broilers in the world. Fisheries also have gained popularity as a major Indian Food Industry. India
is the third largest producer of fish in the world. Milk and milk products have also gained
popularity. India is the largest producer of milk in the world. In India both the production and
consumption of milk and its derivatives are traditionally high in the country. Amul is regarded to
be the largest food product business in the country

Plantation Industry is among the prominent Indian Food Industry. There are about 9500 spices
from medicinal and aromatic plants that are produced in the country. India is the largest producer,
consumer and exporter of spices and the major spices being produced include black pepper,
cardamom, ginger, garlic, turmeric and chili. In the Indian food industry, the consumer product
groups like confectionery, chocolates and cocoa products, Soya-based products, mineral water,
high protein foods are also on a high rise. They form the most promising sub-sectors of Indian
food industry. Beverages are also included in the industries. Besides these, grain processing and
Grain-milling has a position. Inspite being one of the major food producers in the world, India is
credited for less than 1.5 per cent of international food trade. Furthermore, the Indian food
industry sales turnover is Rs 140,000 crore (1 crore = 10 million) annually as at the start of year
2000. The Indian food industry has the highest number of plants approved by the US Food and
Drug Administration (FDA) outside the USA.
Tourism Industry

According to the World Travel and Tourism Council, by 2020, the tourism industry will
contribute close to Rs 8, 50,000 crores to India’s GDP. The WTTC also says that the travel and
tourism industry in India employs 17.7 million jobs which is 5.6% of the total number of people
employed in India. This figure is expected to go up to 24.8 million by 2010. The Ministry of
External Affairs says that the tourism industry is the second highest foreign exchange earner in
the economy. This is the very reason why the government of India has been compelled to grant
organizations in this industry export house status.

In spite of all this though, India figures nowhere in the list of the world’s top twenty tourist
destinations published by the World Tourism Organization.

God’s Own Country

Incredible India (!) is one of the very few countries that offer different categories and kinds of
Tourism. A little bit of history, a dash of medical, a pinch of adventure and a lot of soul- the
Indian tourism thali offers it all. Thus the tourist visiting India has a variety of choices among
spiritual tourism, historical tourism, medical tourism, adventure tourism etc.

The Indian tourism industry is going great guns and has never had it so good since the early 90s.
With a growth rate of 8 % and increased disposable income, more number of people are going on
holiday trips within the country and abroad. So yes, if you are wondering, things are indeed
shining for the Indian tourism industry. The steady influx of industry players like hotels, tour
operators, airlines, shipping lines etc are pushing up revenues for this industry.

Conde Nast ranked India among the top ten tourist destinations (yes some people did!). JBIC
went so far as to rank the country as one the top five investment destinations. Some of the biggest
expos and conferences of the world have picked India to conduct their annual programs. These
include The World Social Forum, AdAsia, World Bamboo Congress, Commonwealth Games,
Laureus World Sports Academy Global Summit and F1.

Other factors that are adding to India’s marketability are its high growth rate (a growth rate
nearing 9% in the last quarter), it’s geographically strategic location, booming IT and ITES
sector, rising Sensex, growing consumer markets etc.

But Things Could Have Been Better

Major international events like the 9/11, the SARS scare, the Gujarat riots affected the tourism
industry adversely in the past few years. The adverse travel advisories given out by various
foreign embassies related to theses were another causative factor.

On top of all that tourism in SE Asian countries was cheaper. During the SE Asian currency crisis
an overnight stay in those countries would cost an affordable $35-40 whereas in India the same
would cost around $100. This discrepancy though now bridged to some extent still exists. The
main reason behind this was the high luxury and entertainment tax and the landing charges levied
in the Indian airports.

Another factor behind the high costs is that tourism is a state subject in India. Tourism and related
activities in each state is under the purview of the state governments. Thus each state in India is
showcased as a unit tourist destination. What would perhaps be more effective is a central agency
which would advertise India as a holistic tourist destination and not focus on one particular state
in entirety.

Atithi Deva Bhava

That the government is looking to spruce up the tourism sector by upgrading the infrastructural
facilities in India is good news indeed. The airports of even major metros of India fall short of
expectations when it comes to its infrastructure and human relations. For a rapidly growing
economy like India it is but essential that its gateway points are made at par with global standards.

The government plans on developing Metro and Greenfield airports through Public Private
Partnership with total investment of Rs 40,000 crore pf which the PPP’s share will be Rs 31,000
crore.

Another step that will further boost the Indian tourism industry is that of introducing long term
visas with multiple entry facility for tourists. These visas would be granted for a period of five
years and will be available with 16 countries. Another facility forwarded by the Tourism Ministry
called Advance Passenger Information System (APIS) will also help reduce delay in clearance of
passengers.

Another measure that the Government could look into is that of appointment of tourist police in
all major tourist destinations in India. Efforts to make the major metros dust and pollution free
should also be made, in order to boost India’s image as a tourist destination.

Atithi Deva Bhava, a saying in Sanskrit that roughly translated means that your guest is like God
has been part of the Indian culture since long. This saying has been used in advertising campaigns
by the Tourism Ministry aiming at creating awareness about India’s culture of extending warmth
and hospitality to outsiders.

It is not enough to just mouth platitudes such as these to increase revenues through tourism. What
is essential is infrastructural upgradation in the aviation industries, provision of tourist police in
metros, reducing or curtailing levies on the hospitality industry and easing legal hassles for
tourists in order to make India a more tourist-friendly destination.
Aviation Industry

The history of civil aviation in India started with its first commercial flight on February 18, 1911.
It was a journey from Allahabad to Naini made by a French pilot Monseigneur Piguet covering a
distance of about 10 km. Since then efforts were on to improve the health of India's Civil Aviation
Industry. The first domestic air route between Karachi and Delhi was opened in December 1912
by the Indian State Air Services in collaboration with the Imperial Airways, UK as an extension
of London-Karachi flight of the Imperial Airways.

The aviation industry in India gathered momentum after three years with the opening of a regular
airmail service between Karachi and Madras by the first Indian airline, Tata Sons Ltd. However
this service failed to receive any backing from the Indian Government.

At the time of independence nine Air Transport Companies were operational in the Indian
Territory. Later the number reduced to eight when the Orient Airways shifted its base to Pakistan.
The then operational airlines were Tata Airlines, Indian National Airways, Air service of India,
Deccan Airways, Ambica Airways, Bharat Airways and Mistry Airways.

With an attempt to farther strengthen the base of the aviation sector in India, the Government of
India together with Air India (earlier Tata Airline) set up a joint sector company, Air India
International, in early 1948. With an initial investment of Rs. 2 crore and a fleet of three
Lockheed constellation aircrafts, Air India started its journey in the Indian aviation sector on June
8, 1948 in Mumbai (Bombay)-London air route.

For many years since its inception the Indian Aviation Industry was plagued by inappropriate
regulatory and operational procedures resulting in either excessive or no competition.
Nationalization of Indian Airlines (IA) in 1953 brought the domestic civil aviation sector under
the purview of Indian Government. Government's intervention in this sector was meant for
removing the operational limitations arising out of excess competition.

Air transportation in India now comes under the direct control of the Department of Civil
Aviation, a part of the Ministry of Civil Aviation and Tourism of Government of India.

Aviation by its very nature constitutes the elitist part of our country's infrastructure. This sector
has substantial contribution towards the development of country's trade and tourism, providing
easier access to the areas full of natural beauty. It therefore acts as a stimulus for country's growth
and economic prosperity.
Outsourcing Industry

The concept of outsourcing was first given shape by the economist Adam Smith in 1776 in his
book The Wealth of Nations. His theory propagated that economies should specialize in
producing that commodity or service that the economy had more resources for. Then the theory
was applied to "outsourcing" manufacturing services to countries that provide cheap labor. This
term has now taken on a totally different connotation: in the face of the IT revolution the term
now implies the process of handing over part of its work , like that of designing, implementation
of the business process in adherence to a strict set of guidelines and criteria set by the client
company. This process is mutually beneficial for the outsourcer and the service provider as it
helps the company to cut costs and specialize in other things while providing business to the
other.

Although the IT industry in India has existed since the early 1980s outsourcing emerged only in
the mid 90s. One of the first services to be outsourced was medical transcription and data
processing, billing and customer support too caught on by the late 90s when MNCs had started
establishing subsidiaries which served the off-shoring requirements of parent companies. Some
the earliest entrants in to the outsourcing scenario were American Express, GE Capital, and
British Airways.

The ITES industry in India is still in its nascent stage and is a little more than a half a decade old.
In spite of this, the industry has grown enormous growth and has become a key part of the export
oriented IT software and services industry.

Inspired, the success of India's IT industry the GoI is trying to attract more FDI in this sector by
Establishing Software Technology Parks and Export Processing Zones. Benefits like tax holidays
were also extended to this sector. Various state governments have also extended assistance to
theses companies by helping them overcome roadblocks they face in recruitment, retention and
training their manpower. The National Association of Software and Service Companies
(NASSCOM) has eased free flow of information of this industry by conducting surveys and
conferences about this industry. The NASSCOM acts as the advisor, consultant and coordinating
body for the ITES/BPO industry and acts as the link between central and state government
committee and the industry.

NASSCOM postulated the following factors as the key reasons behind India's success in this
industry

Abundant, skilled, labor who are fluent in the English language,

Improving telecom and other infrastructure which is in keeping with worldwide standards.
Emphasis on quality among players and their focus on measuring and monitoring quality targets
Fast turnaround times and the ability to offer 24x7 services based on the country's unique
geographic location that allows for leveraging time zone differences.
Proactive and positive policy environment which encourages ITES/BPO investments and
simplifies rules and procedures. An agreeable tax structure, which places the ITES/BPO industry
on par with IT services companies

Despite being relatively new to the global ITES/BPO industry, the Indian ITES industry recorded
a growth rate in excess of 50% in 2002-03. This very fact and the superior rankings and
headcount statistics indicate the immense possibilities in store for this industry. According to
estimates by the International Data Corporation worldwide the global ITES/BPO industry is
worth US$773 billion (as on 2002) and is growing at a rate of 9% CAGR. The following
achievements are listed by the NASSCOM as indicating the growth potential of this sector

The ITES-BPO segment is estimated to have achieved a 54 percent growth in revenues as in 2003
-04.
ITES exports accounted for US$ 3.6 billion in revenues, up from US$ 2.5 billion in 2002-03
The ITES-BPO sector has created employment for around 74,400 additional personnel in India
during 2003-04
The number of Indians working for this sector jumped to 245,500 by March, 2004.
By the year 2008, the segment is projected to employ over 1.1 million Indians, according to
studies conducted by NASSCOM and leading business Intelligence Company, McKinsey & Co.
Market research shows that in terms of job creation, the ITES-BPO industry is growing at over 50
percent.