Indo American Chamber Of Commerce Of Greater Houston

November 16th 2006

Jagdip Ahluwalia.

Executive Director, IACCGH

Honorary Executive Director,Alliance of Indo American Chambers of Commerce

Indo-American Chamber of Commerce of Greater Houston (IACCGH)

We thank Dr Abdul Shaikh, Senior International Economist, US Department of Commerce, and the IBEF (www.ibef.org) for generously sharing their material and slides regarding India.

Doing Business with India Jagdip Ahluwalia November 16, 2006

Today’s Discussion

Why India?

Export Opportunities for U.S. Companies

Individual Indian Cities and Sectors

Support and Resources Available

Questions & Answers


About India

World’s Largest Democracy

Over One billion people

250-300 million middle class

10th largest global economy

4th in Purchasing Power Parity

Strong Sustained GDP growth

Attractive and diverse market for product and services

Easier access to capital


$849 billion GDP (2006, current price)1

4th largest economy in PPP

$3.7 trillion in 20052

World’s Fastest Growing Democracy 3

8.9% growth rate in Q2 20064

India – World’s Fastest GrowingFree Market Democracy

Source: www.ibef.org

GDP GROWTH RATE AT CONSTANT PRICE

4.4

5.8

4.0

8.57.5

8.4

0.0

2.0

4.0

6.0

8.0

10.0

2000/01 2001/02 2002/03 2003/04 2004/05 2005/06

in %

1. IMF - www.imf.org 2. World CIA Fact book Online3. India Resource Center - www.ibef.org4. www. financialexpress.com


India has among the highest returns on foreign

investment

- Dan Scheinman, Cisco System Inc. as told to Business Week, August 2005

“We came to India for the costs, stayed for the quality

and are now investing for innovation.”

A T KearneyFDI Confidence Index 2005

India is among the three most attractive FDI destinations in the

world

Jack WelchGeneral Electric

“India is a developed country as far as

intellectual capital is concerned.”

US Department of Commerce

By 2032, India will be among the three largest economies in the world

BRIC ReportGoldman Sachs, October 2003

Why Invest in India?


India ahead of Brazil, China and Russia in the World Economic Forum’s Global Competitiveness Index rankings for 2006-071

India : 43rd Russia: 62nd

Brazil: 66th China: 54th

India: BRIC Ranking

1. www.ibef.org

Trends in growth in per capita GDP (1980 - 02)

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

Chi

na

Kor

ea S

Tai

wan

Indo

nesi

a

Indi

a

Spai

n

Aus

tral

ia UK

Japa

n

USA

Net

herl

ands

Ital

y

Can

ada

Fran

ce

Ger

man

y

Mex

ico

Bra

zil

Goldman Sachs report on BRIC

countries (2003) estimates that among

the BRIC countries (Brazil, Russia,

India and China) India may have the

highest growth rate (5% + over the

next 50 years)


U.S. Exports to India (2005)

$7.96 Billion Merchandise Exports

30% increase over 2004

$4.16 billion Services Exports

(travel, education, business services)

$27 Billion in Bilateral Trade

Merchandise Exports 2005$ 7.96 billion

19%

13%

12%9%

47%

Hi-tech Machinery/Mechanical Appliances

Electrical Machinery & Eqpt.

Organic Chemicals & Fertilizers

Aircraft/Spacecraft and Parts

All others


Drivers of Increased Exports by U.S. Companies

Changes in Indian Governmental Policies

Indian Market and Demographics

Indian Economic Growth

U.S. Export Support


Government of India (GOI) Policy Trends

Liberalized import policy

Lower import tariffs, simplified regs

Removal of quantitative restrictions (QR’s)

Lower customs duties for projects (from 25% to 10%)

Duty free imports on certain items

Major tariff reductions on chemicals, pharma, textiles, packaging

machinery

Strong focus on infrastructure development

Simplified documentation procedures (e-filing)

FDI allowances and limits raised

Opening of FDI in mining, retail, and pensions under review

Import of second hand capital goods without age restrictions

Aggressive telecom policies


India: Attractive Demographics

0-14 yrs32%

60 yrs and above

5%

15-59 yrs63%

Growth in the higher income categories of

India’s population, has lead to a burgeoning

affluent section of society, which has significant

level of purchasing power


GDP Continues Rapid Growth

GDP has grown 7% plus for the last 9 quarters(except Q2 2004-05)1

8.9% Growth for Q2 20061

Growth is Occurring Across Sectors1:

1. www. financialexpress.com

-2.0%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

2003 2004 2005 2006

Service

Total

Industry

Agriculture


Growth is Across Sectors

40

60

Coal Production

0

100

200

300

400

500

FY81 FY91 FY01 FY05

Steel Production

0

10

20

30

40

50

FY81 FY91 FY01 FY05

Power Transformers

0

20

40

60

80

FY81 FY91 FY01 FY05

Automobiles

0

500

1000

1500

FY81 FY91 FY01 FY05

Life Insurance

15000

22500

30000

FY04 FY05

Rs

cror

e

2.5

2.75

3

Cro

re (

nos)

New premium income Number of policies

Mobile Subscribers

0

20

2001 2002 2003 2004 2005 2006

Metros Other circles

Source: Economic Survey

Rising consumer demand is manifested in growth of key sectors of capital and consumer goods and services


Key Indian Cities

Karnataka is a Top 5 Industrialized State

One global corporation moves in each week

India’s‘Knowledge

Capital’

Bangalore (Karnataka)

Bangalore ranked 4th by UNDP as ‘Global hub of technological

innovation’


Bangalore Information Technology

20% of Indian Electronics production

Over 354 units with Revenues over $2 Billion

One new IT company is set up in each week

India’s IT Capital with Over $8.5 B Software Exports Est $10 Billion by 2008

35% of India’s Software Exports

. Over 50% of the worlds SEI CMM level 5 companies


Bangalore Biotechnology

No.of Companies

110 (>65% of India’s Biotech

companies)

Employment

8000 (50% Scientific

Personnel)

Export Turnover

USD 188 Million

National Centers of Excellence

2 of 6 are in Bangalore

Venture Capital Funding

Highest in Karnataka


Chennai or Madras (Tamil Nadu)

India’s Eastern Gateway

to the world


Chennai Business Opportunities

• Software development & related Services (BPO)

• Automobiles & components

• Textiles, garments and home furnishings

• Leather based products

• Agro / food Processing

• Bio-Technology, Pharma & Herbal based products

• Software & Electronics

• Chemicals & Petrochemicals

• Roads & minor Port development


Chennai Automobile Sector

Ford, Hyundai, Mitsubishi (Passenger Cars)

Ashok Leyland(Heavy Vehicles, Trucks)

TAFE (Tractors)

Eicher (Motor Cycles)

Over 3 Billions in Sales

Over 100 Automobile Component (ACMA)

Ventures

Total ACMA 2015 Revenue Projected at $35-40 Billion*


Hyderabad – Key Strength Areas

IT/ITES

Agriculture & Food Processing

Textiles & Apparel

Pharma

Hardware & Manufacturing

The fastest growing State in

India

The only State to

achieve a growth rate of over 8% per annum

Capital of Maharashtra

Commercial, trading, financial and services capital.

Hosts most top Indian business houses and many global multinationals.

Hosts headquarters of the Reserve Bank of India (RBI) and of most other financial institutions.

Home of the Bombay Stock Exchange (BSE). Oldest Stock Exchange in Asia, founded in 1875.

Contributes over one-third of India’s income-tax revenues and over 30% customs revenue.

Also movie (Bollywood) and e-biz capital.

Mumbai – India’s Business Capital


Maharasthra Sectoral Strengths

Sector Maharashtra’s Share

Financial services/Equities market 95%

Pharmaceuticals 40%

Automobiles and auto components 38%

IT/ITES 30%

Chemicals, petrochemicals, oil and gas 27%

Engineering 23%

Textiles 10%


Mumbai Business Opportunities

Education

Energy

Entertainment

Environment

Financial Services

Infrastructure

Machine Tools

Medical/Healthcare

Retail

6th Largest Metropolis in the World

All EmbassiesAll Federal

Governmental Headquarters

All major political/strategic decisions

New Delhi – The Capital City


New Delhi – Key Industries

Aerospace/Defense

Energy

IT/Telecom

Health Care

Environment

Infrastructure


Overall Best Export Prospects

Airport and Ground Handling Equipment

Computers and Peripherals

Education Services

Electric Power Generation, Distribution and Transmission

Equipment

Food Processing & Cold Storage Equipment

Machine Tools

Medical Equipment

Mining and Mineral Processing Equipment

Oil and Gas Field Machinery

Pollution Control Equipment

Safety and Security Equipment

Telecommunications Equipment

Textile Machinery

Water Treatment


Keys to Success in India

• Good local partners knowledgeable regarding the local market and procedural issues.

• Study the Market & Competition.

• Good planning.

• Aggressive due diligence and follow up.

• Patience and commitment.

• Obtain Export Counseling.

• Understand the rules, standards and regulations.


The US Department of Commerce Can Lend a Helping Hand

Nov 2006 Trade Delegationwww.export.gov/indiamission

Led by Under Secretary for International Trade Franklin L. Lavin

In Coordination with the U.S. Commercial Service in the U.S.

and India


Intellectual Property IssuesBeing Resolved

India and the United States are working closely to help improve the IPR situation there.

The two governments have conducted over a dozen intellectual property training programs and exchanges.

Forums such as the U.S-India Commercial Dialogue and the US-India Trade Policy Forum allow for the continue

exchange of ideas which enable India to gain the information needed to make reforms in the IPR sector.


Business Chambers

www.ciionline.orgwww.ficci.com

www.amchamindia.comwww.uschamber.com

www.usibc.comwww.nasscom.org www.indous.orgwww.iaccgh.com

U.S. Government

newdelhi.usembassy.govwww.ita.doc.govwww.export.gov

www.tda.govwww.exim.govwww.opic.gov

www.buyusa.gov

Important Online Resources


We thank

Consul General S M Gavai,

Consul General of India in Houston

&

The Indian Embassy in Washington DC for their support of IACCGH and the

Alliance of Indo American Chambers

IACCGH


We are here to help your Business with India Succeed

Contact:Jagdip Ahluwalia, Executive Director

IACCGH1535 West Loop South, Suite 200

Houston TX 77027Tel: 832 746 8372

Email: [email protected]

100,000+ Indo Americans in the Greater Houston Area

Member of the Alliance of Indo American Chambers

IACCGH

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