COLOMBIA

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VIVEK MORJARIA 11BSP2007 PRIYANKA VIDESH 11BSP0747 KRUNAL GANDHI 11BSP2140 ROHIT SHARMA 11BSP1850 KANCHAN GUPTA 11BSP2116 ABHINAV SINGH 11BSP1482 HIRANYA PANDYA 11BSP19517 KRISHNA GOHEL 11BSP1388 DEEPA BALWANI 11BSP1936

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COLOMBIAColombia, officially the Republic of Colombia, is a unitary constitutional republic comprising thirty-two departments. Colombia was one of the three countries that emerged from the collapse of Gran Colombia in 1830 (the others are Ecuador and Venezuela).

Total Population: 46,927,125 Natural Increase: 1.4% Density: 42 Inhabitants/km² Urban Population: 75.3% Population of main cities including suburbs: Bogotá (8,250,000);Medellín

(3,400,000); Cali (2,700,000); Barranquilla (1,800,000);Bucaramanga (1,050,000). Ethnic Origins: 64% mixed ethnic origins, 11% Afro-Colombians, 20% white, 3%

Amerindians. Official Language: Spanish. Other Languages Spoken: There are still approximately 60 Amerindian

languages in Colombia, and palenquero which is spoken by the Afro-descendants of the Palenque region.

Business Language(s): Spanish, English. Religion: Catholics 95.2%, Others 4.8%. Literacy Rate: 92.8%

CONTD… National Currency: Colombian Peso (COP) 

1 COP = 0.0036 EGP, 1 EGP = 274.7516 COP 1 COP = 0.0006 USD, 1 USD = 1,765.1 COP 1 COP = 0.0004 EUR, 1 EUR = 2,318.1 COP 

Area: 1,141,750 km² Type of State: Republic based on parliamentary democracy. Type of Economy: Lower-middle-income economy, Emerging

Financial Market. Rich in mineral resources; the underground economy is very active.

Computers: 4.2 per 100 Inhabitants Telephone Lines: 15.2 per 100 Inhabitants Internet Users: 40.4 per 100 Inhabitants Access to Electricity: 93.6% of the Population

ECONOMY OF COLOMBIA

GDP – COMPOSITION BY SECTOR, 2011

56%37%

7%

Series 1

SERVICEINDUSTRYAGRICULTURE

GDP (purchasing power parity):

$471.9 billion (2011 est.)country comparison to the world: 29 $445.5 billion (2010 est.)$428.4 billion (2009 est.)note: data are in 2011 US dollars

GDP (official exchange rate):$322.4 billion (2011 est.)

GDP - real growth rate:

5.9% (2011 est.)country comparison to the world: 47 4% (2010 est.)1.7% (2009 est.)

GDP - per capita (PPP):

$10,200 (2011 est.)country comparison to the world: 110$9,800 (2010 est.)$9,500 (2009 est.)note: data are in 2011 US dollars

Labor force:

22.45 million (2011 est.)country comparison to the world: 29

Labor force - by occupation:

agriculture: 18%industry: 13%services: 68% (2011 est.)

Unemployment rate:

10.8% (2011 est.)country comparison to the world: 11611.8% (2010 est.)

Population below poverty line:

37.2% (2010 est.)

GDP - composition by sector:

agriculture: 7%industry: 37.5%services: 55.5% (2011 est.)

Budget:

revenues: $92.64 billionexpenditures: $94.82 billion (2011 est.)

Taxes and other revenues:

28.7% of GDP (2011 est.)country comparison to the world: 106

Public debt:

43.4% of GDP (2011 est.)country comparison to the world: 7646.2% of GDP (2010 est.)note: data cover general government debt, and includes debt instruments issued (or owned) by government entities other than the treasury; the data include treasury debt held by foreign entities; the data include debt issued by subnational entities

Inflation rate (consumer prices):

3.4% (2011 est.)country comparison to the world: 822.3% (2010 est.)

CONTD… According to a recent World Bank report, doing business is easiest

in Cali, Manizales, Ibague and Pereira, and more difficult in Medellín and Cartagena. Reforms in custom administration have helped reduce the amount of time it takes to prepare documentation by over 60% for exports and 40% for imports compared to the previous report. Colombia has taken measures to address the backlog in civil municipal courts. The most important result was the dismissal of 12.2% of inactive claims in civil courts thanks to the application of Law 1194 of 2008 (Ley de Desistimiento Tácito).

The following are the most important Colombian companies: Eco petrol: The fourth largest oil company in Latin America. Suramericana de Inversiones: The largest retirement

plan management company in Latin America. Avianca: The third largest airline in Latin America. Coomeva: The third largest cooperative in Latin America. Grupo Aval: One of Colombia's largest holding company. It is owned

by Luis Carlos Sarmiento Angulo.

COLOMBIA IMPORTS

Imports in Colombia increased to 5.22 USD Billion in October of 2012 from 4.62 USD Billion in September of 2012. Imports in Colombia is reported by the Banco Central de la Republica. Historically, from 1980 until 2012, Colombia Imports averaged 1.33 USD Billion reaching an all time high of 5.45 USD Billion in May of 2012 and a record low of 0.28 USD Billion in March of 1986. Colombia's major imports are industrial and transportation equipment, consumer goods, chemicals, paper products, fuels, and electricity. Colombia’s main imports partners are: United States, European Union, China, Mexico and Brazil. This page includes a chart with historical data for Colombia Imports.

COLOMBIA IMPORTS

PRODUCTCIF (USD)SHARE OF IMPORTS (%)

Airplanes and other aircraft, of an unloaded weight > 15000Kg$ 1.774.554.489,794,41

Gas Oil$ 1.521.442.201,21 3,78

Other vehicles of Engine displacement > 1500cm3 <= 3000cm3$ 1.110.748.977,282,76

Other light oils and their preparations$ 904.721.485,952,25

Tlephones for cellular networks or for other wireless networks$ 565.669.694,451,40

Portable automatic data processing machines, of weight < 10Kg, consisting of at least a central processing unit, a keyboard and a display$ 499.688.366,551,24

Road tractors for semi-trailers$ 475.789.310,001,18

Telecommunication devices using carrier current or digital telecommunications$ 424.417.406,411,05SOURCE:

www.dataexim.com/en

TOP IMPORTS OF COLOMBIA FOR 2011 UNTIL NOW

COLOMBIA–INDIA RELATIONS

Indo-Colombian relations entails the diplomatic relations between the Republic of Colombia and the Republic of India. Both countries established diplomatic ties on January 19, 1959. Colombia is currently the commercial point of entry into Latin America for Indian companies.

In 2006, Oil India invested US$425 million dollars in oil production in Colombia. The company plans to participate in contract adjudications with the intention of exploring the Colombian land for gas.

On August 23, 2007 the Colombian government reported that trade between Colombia and India was increasing. India gained from the exports to Colombia some US$346 million dollars while Colombia exported to India some US$62 million dollars.

Main cooperation areas1. Use of solar energy in country border areas.2. Technical cooperation agreements.3. Development of scholarships including in military areas.4. Functioning of the Joint Task Force of the understanding of technologies

memorandum.

BUSINESS ENVIRONMENT

ACCOUNTING RULES Tax Year : The fiscal year begins on January 1st and ends on December

31st. Accounting Standards : Colombian GAAP. On 13 July 2009, the

Congress of the Republic of Columbia enacted Law No. 1314 concerning accounting, financial reporting and assurance. This law is called the "Law of Convergence" and states an intention to converge Colombian GAAP with international standards beginning from the year 2014 (proposed start year).

Accounting Regulation Bodies : Contaduria Accounting Reports : The accounting structure should include:

- The balance sheet: Assets (current assets, liquid assets, bad debt allowance, salaries, other, income tax, inventories, expenses incurred, Total current assets), equipment (machinery property, Depreciation), and other assets ;- The income statement: Revenues, Gross profit, Operating costs, Operating earnings, Total operating costs, Earnings before income taxes, Net income ;- The operational balances; and - The annexes.

IProfessional Accountancy Bodies : NCP , National Institute of Expert Public Accountants.

INDIVIDUAL TAXES Income Tax

Up to UVT 1,090 UVT 1,091 to 1,700 UVT 1,701 to 4,100 Over UVT 4,100

Progressive tax rate from 0% to 33%. The Colombian tax system is expressed on Tax Value Units, UVT.

0% 19% 28% 33%

STANDARDS National Standards Organizations : ICONTEC, National Institute

of Technical Standards and Certification. Integration in the International Standards Network : The

organization responsible for the choice of standards and standardization of production is the Colombian Institute of Technical Standards ( Instituto Colombiano de Normas Técnicas y Certificación ; ICONTEC ). This organization is an active member of the International Organization of Standardization ( ISO), the International Electrotechnical Commission ( IEC), and the Pan American Standards Commission ( COPANT).

Classification of Standards : NTC/ISO Online Consultation of Standards : To consult the national

technical standards visit the  ICONTEC website. Certification Organizations :ICONTEC Colombian Institute of

Technical Standards.

PEST ANALYSIS

POLITICAL FACTOR Executive Power : The president is both the head of state and the

head of government. He holds executive power. The president and vice president are both elected by universal suffrage for a term of four years.

Legislative Power : The Colombian legislature is bicameral. The parliament called "Congress", consists of: the Senate (upper house) and the Chamber of Deputies (lower chamber). Members of both houses are elected for a period of four years by universal suffrage. The political rights of Colombians are limited.

Main Political Parties : The main political parties in Colombia are: PC (Conservative Party), the PDA (Alternative Democratic Pole), the PL (Liberal Party), the PSUN (Social National Unity Party), CR (Radical Change), Colombia First. Colombia has about 60 political parties with formal recognition. Most of them are not represented in the Chamber of Deputies.

Current Political Leaders President:  Juan Manuel Santos - Social Party of National Union

Next Election Dates Presidential election: May 2014.Senatorial and the Chamber of Deputies Election: March 2014.

ECONOMIC FACTOR Unemployment : The 10.8% in August of 2011

Colombia Inflation Rate : The inflation rate in Colombia was last reported at 3.7 percent in

September of 2011

Colombia Interest Rate : The unemployment rate in Colombia was last reported at 10.1

benchmark interest rate in Colombia was last reported at 4.5 percent

GDP Real Growth : The Gross Domestic Product (GDP) in Colombia expanded 5.7 percent

in the second quarter of 2011 over the previous quarter.

Electricity – production : 51.01 billion kWh (2008 est.)

Electricity – consumption : 38.82 billion kWh (2008 est.)

Oil – production : 800,100 bbl/day (2010 est.)

Oil – consumption : 296,000 bbl/day (2010 est.) Labour force : 22.45 million (2011 est.)

SOCIAL FACTOR

Population : 44,725,543 (July 2011 est.)

Ethnic groups : Mestizo 58%, white 20%, mulatto 14%, black 4%,

mixed black-Amerindian 3%,Amerindian 1%

Religions : Roman Catholic 90%, other 10%

Languages : Spanish (official),Literacy

Total fertility rate : 2.15 children born/woman (2011 est.)

Rate of urbanization : 1.7% annual rate of change (2010-15est.)

CONTD… Distribution of Income or Consumption by Percentage Share: Colombia Lowest 10% -1.1 Lowest 20% - 3.0 Second 20% - 6.6 Third 20% - 11.1 Fourth 20% - 18.4 Highest 20% -60.9 Highest 10% - 46.1

Note: This information refers to income shares by percentiles of the population and is ranked by per capita income.

TECHNOLOGICAL FACTOR

The IT sector, maintained a healthy growth rate of 7.5 percent in 2009 (according

to a report by Fedesoft), and is expected to present growth of 3.5% in 2010.

Overall investment in Information Technology and Communications (ICT) is

expected to reach US$10,870.6 million in 2010, slightly up from US$10,521.7

million in 2009. It is estimated that this figure will reach US$11,119 million dollars

in 2011.

Colombia represents the third largest IT market in South America.

The patent regime in Colombia provides for a 20 year protection period for patents

and 10 year term for industrial designs; protection is also provided for new plant

varieties.

MARKET CHALLENGES Colombia has struggled with the requirements of the existing

government procurement framework, which calls for open bidding in public tenders. As such there can be a lack of transparency, fairness, and truly competitive bidding conditions in many tenders.

Only firms licensed under Colombian law may provide legal services. Foreign law firms can operate in Colombia by forming a joint venture with a Colombian law firm and operating under the licenses of the Colombian lawyers in the firm.

Economic needs tests are required when foreign providers of professional services operate temporarily; and residency requirements restrict trans-border trade of certain professional services, such as accounting, bookkeeping, auditing, architecture, engineering, urban planning, and medical and dental services.

A commercial presence is required to provide information processing services or to bid on Colombian government contracts.

Telecommunications barriers to entry include cross subsidies, the requirement for a commercial presence in Colombia, and an economic needs tests.

CONTD…

For firms with more than ten employees, no more than 10 percent of the general workforce and 20 percent of specialists may be foreign nationals.

International banking institutions are required to maintain a commercial presence in Colombia through subsidiary offices.

Insurance companies are restricted from offering policies to underwrite risk on government sponsored infrastructure projects due to Colombian regulations that do not recognize insurance policies as equivalent to bank guarantees.

Customs duties have been consolidated into four tariff levels: 0 to 5 percent on capital goods, industrial goods and raw materials not produced in Colombia, 10 percent on manufactured goods with some exemptions, and 15 to 20 percent on consumer and “sensitive” goods. Exceptions include automobiles, which are subject to a 35 percent duty. A group of agricultural products is protected by a price band mechanism that offers variable duties as high as 100 percent

MARKET OPPORTUNITIES

Colombia's extensive, planned infrastructure projects will require: project financing, public works subcontracting, logistics, construction equipment for public roads and airports; water treatment, water supply, electric power generation, oil and gas exploration and pollution control equipment, air navigational and port security aids, railway construction, transportation equipment, security and defense items and services, mass transit systems.

Awarded to OPAIN in 2006, Bogotá’s El Dorado International Airport still requires massive upgrades. The Medellin/Rio Negro airport upgrade is underway and the Northeast airports concession has been awarded. All concessionaires are seeking equipment to modernize their facilities.

CONTD… The United States Trade and Development Agency (USTDA) and EXIM Bank

support U.S. companies as they craft solutions to development challenges and make inroads in key sectors such as oil and gas, petrochemicals, renewable energy, telecommunications, and ports. USTDA grants have resulted in big U.S. company wins at the country’s two refineries. EXIM’s preliminary commitment of USD 1 billion to Ecopetrol and USD 2.8 billion to Reficar for its refinery project will provide a myriad of export opportunities for U.S. exporters of oil and gas equipment and services. USTDA grants for customs security and operational enhancements at the ports in Cartagena, Buenaventura, and Puerto Salgar should also increase prospects for U.S. exporters.

Significant U.S. export opportunities not already mentioned include: cotton, wheat, corn soy products, automotive parts and accessories, tourism, computer hardware and software services, IT equipment and services, plastics materials and resins, electrical power systems, safety and security equipment, food and beverage processing and packaging equipment and medical equipment.

MARKET ENTRY STRATEGIES

Secure an agent, representative, or distributor in Colombia, which requires a contract that meets the provisions of the Colombian Commercial Code.

Focus on formality, personal relationships, and trust when negotiating agreements and contracts.

Communicate with the U.S. Commercial Service and the Economic sections of the U.S. Embassy in Bogotá regarding specific concerns.

Offer excellent after-sales service arrangements and maintain the sales relationship. Warranties or guarantees on imports are critical for supporting after sales service in Colombia.

Provide high quality products and/or services, affordable financing and competitive pricing.

Support your local partner’s marketing efforts with advertising campaigns or by participating in trade shows. Do not be hands off; visit often.

Spanish-language sales collateral and service manuals are essential, and may be required in certain sectors, like medical products. U.S.-based staff with a strong knowledge of Spanish is certainly helpful.