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Doing Business with India Presented by Francis Vayalumkal - President, Indo-US Chamber Candor Resources, LLC – Effective

Doing Business with India Presented by Francis Vayalumkal - President, Indo-US Chamber Candor Resources, LLC – Effective Technology, Increased Profitability Suleman Makhani – Vice President, Indo-US Chamber Vice President, United Central Bank – Commercial/Residential Lender.

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Doing Business with India Presented by Francis Vayalumkal - President, Indo-US Chamber Candor Resources, LLC – Effective

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  1. Doing Business with India Presented by Francis Vayalumkal - President, Indo-US Chamber Candor Resources, LLC – Effective Technology, Increased Profitability Suleman Makhani – Vice President, Indo-US Chamber Vice President, United Central Bank – Commercial/Residential Lender

  2. Fastest Growing free market democracy

  3. Why Invest in India? India has among the highest returns on foreign investment India is among the three most attractive FDI destinations in the world US Department of Commerce A T KearneyFDI Confidence Index 2005 By 2032, India will be among the three largest economies in the world BRIC ReportGoldman Sachs, October 2003 “India is a developed country as far as intellectual capital is concerned.” “We came to India for the costs, stayed for the quality and are now investing for innovation.” Jack WelchGeneral Electric - Dan Scheinman, Cisco System Inc. as told to Business Week, August 2005

  4. India - Fastest Growing free market democracy At-a-glance Capital : New Delhi 28 States and 7 Union Territories Parliamentary form of Government Population : 1.15+ Billion (2009 est) Labor Force: 523.5 million (2008 est.) GDP (March 2009): $1.25 Trillion

  5. INDO-US Bilateral Trade • Bilateral trade between India and US amounted to USD 41.75 billion in 2007-08. • India imports • aircraft and aviation machinery, • nuclear reactors, • optical and medical instruments, • precious stones and metals, • fertilizers and organic chemicals • Indian imports from the US grew by an astonishing 79.33 per cent to reach US$ 21.02 billion in 2007-08 against US$ 11.72 billion in 2006-07.

  6. INDO-US Bilateral Trade • India mostly exports • Gems and jewellery, • Organic chemicals and engineering goods • Textiles • During 2007-08, merchandise exports from India to US went up by 9.81 per cent to reach US$ 20.72 billion against US$ 18.85 billion in 2006-07. • For the period April-December 2008, India exported goods worth US$ 15.71 billion to the US. • The Indo-US services trade is likely to grow to an ambitious US$ 150 billion in the next six years, according to a Confedaration of Indian Industry estimate. • Last fiscal year , the services exports to the US touched US$22 billion.

  7. US – Direct Investment in India The overall foreign direct investment (FDI) equity flow into India from the US during April 2000-March 2009 was US$ 6.3 billion. During 2008-09, FDI inflow from the US was US$ 1.8 billion. After companies like Microsoft, Intel, IBM, Dell, Citigroup, J P Morgan and Morgan Stanley, many other US companies are also planning to enter the Indian market with big investments. Backoffice work to a large number of US companies and industries, such as Medical Transcription (MT). It is estimated the size of the US MT industry would reach US$ 16.8 billion by 2010. The work offshored is expected to be in the region of US$ 860 million in 2010, of which India is expected to capture US$ 647 million

  8. India - Fastest Growing free market democracy Economic, Ideological, and Strategic Partners • Coherent democracy; Pluralist; Secular • 1/5th World’s Population • 2nd largest military in the world • Common Values: Anti-Terrorism, Anti-Human Trafficking, Anti-Narcotics • Common Law Judicial System • 2nd largest number of doctors, engineers and PhDs in the world • 100,000 Students to U.S. Each Year • 1.8 mil Americans of Indian Origin • Politically significant; Politically integrated • 54% of Indian Population is under the Age of 35 India is Rising, Becoming Vital to U.S. Interests

  9. India: Growth Sectors Trends in coal production Trends in steel production Trends in power transformer production 500 50 80 400 40 60 300 30 40 200 20 20 100 10 0 0 0 FY81 FY91 FY01 FY05 FY81 FY91 FY01 FY05 FY81 FY91 FY01 FY05 Growth in life insurance business Mobile subscriber base (as of March Trends in automobile production every year) 30000 3 1500 1000 Crore (nos) Rs crore 22500 2.75 20 500 0 2001 2002 2003 2004 2005 2006 15000 2.5 0 FY04 FY05 FY81 FY91 FY01 FY05 Metros Other circles New premium income Number of policies Source: Economic Survey Rising consumer demand is manifested in growth of key sectors of capital and consumer goods and services 60 40

  10. India: Stable Economic Platform 60 40 India's foreign exchange reserves now stand roughly at USD 285 bn (Jan 2010) and are well in excess of total external debt of the country, which has fallen significantly since 1995. At this level it is adequate to cover close to 12 months of imports.

  11. India: Road Ahead Investment opportunities include Communication infrastructure IT sector Telecom sector IT-enabled services Data centers Software development other knowledge industries such as pharmaceuticals and biotechnology.

  12. India: Opportunities Source: finmin.nic.in

  13. Success Stories spread across some key sectors.. Automobiles Healthcare Consumer Electronics Information Technology Food Processing / Bio-technology Infrastructure Telecom Financial Services For MNCs operating in India, India has turned into a critical market for their global growth platforms; demonstrated across automobiles, telecom, etc.

  14. Highlights Sector to grow as much as USD 25 billion by 20102 India ranked 4th in terms of volume and 13th in terms of value2 Outsourcing hub for clinical trials and manufacturing1 Attracting FDI in Pharma and BioTechnology • www,yahoo.com • www.ibef.org

  15. Highlights Largest three wheeler market in the world 2nd largest two wheeler market in the world 4th largest passenger vehicle market in Asia 4th largest tractor market in the world 5th largest commercial vehicle market in the world Future Growth Drivers Higher GDP growth Increasing road development Increasing disposable income Cheaper and easier finance schemes Attracting FDI in Auto and Auto Components Sector Source: Indian Auto

  16. Highlights 10-12% growth predicted by experts Growing Indian middle class Peak customs duty slashed to 15% Consumer electronic manufacturers to benefit from the government’s focus on rural electrification program Attracting FDI in Consumer Goods Sector

  17. Investing in India’s Real Estate Real estate development market size - US$ 22 billion – growing at 30% annually India ranks 5th amongst 30 emerging retail markets Return on investment in Indian metros : Shopping Malls :10-12%; Office segment : 9-11% Residential Segment : 4-8% 100% FDI permitted in Integrated Townships Development of serviced plots and construction of built up residential premises b. Investment in real state covering construction of residential and commercial premises including business centres and offices c. Development of townships d. City and regional level urban infrastructure facilities, including both roads and bridges e. Investment in manufacture of building materials, which is also open to FDI f. Investment in housing finance institutions, which is also open to FDI as an NBFC Property Management – New Avenues for Foreign Companies

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