Doing Business in India

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Doing Business in India

• Pankaj Agarwal
• CEO - Momentum Technologies, Inc.
• pankaja_at_momentum-tech.com

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Engagement With India

• Momentum Technologies
• India as Delivery Center
• From 175 to 1000 persons in 18 months
• Business from all continents
• Drivers Cost, Ramp-up, Quality

• Momentum Infocare
• India as market
• SI Services Focus
• gt 100 Annual Growth
• Channel to add products / services

• How do we operate
• Strong local management
• Frequent visits (10-12 per annum)
• Focus on numbers
• Respect for local culture
• Partnerships
• Long term investment

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India Economy Snapshot
Self-sufficient in food grain growth Among the
top 5 global producers of rice, wheat, milk,
poultry products, fruits and vegetables,
coconuts, tea, spices and marine products.
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Services Sector Growth
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India Outsourcing Destination

• Case Study IT Services

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Indian IT Industry Transformation
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Indian IT-ITES Growth
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Favorable Demographics Helping Growth
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Government doing right things

• New generation of politicians
• Setting up export promotion zones, special
  economic zones
• 35 new SEZs got a green signal in 2005
• Financial incentives
• Income tax exemptions and tax holiday under
  Section 10 A / 10 B
• Zero customs duty on items bound under the
  Information Technology Agreement
• Service tax exemptions
• Concessions on excise duties
• Concessions on foreign exchange regulations
• Others
• Incentives under foreign trade policy
• Providing advance licenses for import of inputs
  and mandatory spares
• Providing post export replenishment benefits to
  exporters for import of inputs used in the
  exports, without payment of basic customs duty

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The India Lead
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India An emerging market

• Case Study Wireless

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Telecom

• Among top 10 countries in telecom network
• An estimated investment potential of USD 37
  billion by 2005 and USD 69 billion by 2010.
• At the end of April 2005
• Total mobile subscriber base of around 54 million
• A fixed line base of 46 million
• More than 100 million telecom subscribers
• From Aug 1991 to Oct 2003 FDI inflow of more than
  USD 2.1bn
• Vodafone Group Plc spent 1.5 billion on a
  near-10-percent stake in Bharati Tele-Ventures
  Ltd.
• Maxis Communications Bhd. , Malaysia's biggest
  cellular firm, and an Indian partner bought
  mid-size operator Aircel Ltd. for 1.08 billion
• Nokia, Alcatel, Motorola and others setting up
  manufacturing facilities in India

• Liberalization in the Telecom Sector
• Private participation permitted in all segments
• Separate License for internet based telephony
  introduced
• FDI limit hiked from 49 to 74
• Special incentives and tax breaks in the sector
• No foreign equity cap for manufacturing

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Wireless

• 4,000 towns and up to a third of India's more
  than 600,000 villages connected by wireless
  services
• Mobile phone penetration of 40 in Metro cities
• Revenue 6.5 bn (15 from Value Added
  Services)
• A mobile number for life for 20
• Per minute call rates less than 2 cents
• By end 2006 - 5,200 towns and 300,000 will go
  wireless
• Mobile base expected to double in 2006 to 140
  million
• About 6 million new additions per month in 2006
• By Dec 2006 India expected to be worlds third
  largest mobile market by number of users

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Hot Sectors

• Outsourcing - IT, Biotech, Software, Gaming,
  Design, Manufacturing
• India as market
• IT ITES
• Retail
• Telecom
• Aviation
• Infrastructure
• Real-Estate
• Financial services - insurance and banking
• (Not covered here - MA Opportunities)

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India Challenges

• Infrastructure
• Volatility in stock and currency market
• Variance in quality of education
• Rising costs
• High employee turnover
• Social Disparity
• Bureaucracy
• Oil Factor
• Question of risk - reward

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Useful local contacts

• TIE (www.tie-vancouver.org)
• Indian Consulate (www.cgivancouver.com)
• Industry Canada (www.ic.gc.ca)
• BCTIA (www.bctia.org)
• ITAC (www.itac.ca)
• NASSCOM (www.nasscom.org)
• Visit India (www.incredibleindia.org)

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Recommended Reading

• The world is flat
• Three billion new capitalists
• The Fortune at the bottom of pyramid
• India Unbound
• Financial Times (India coverage)
• The Mckinsey Quarterly (India articles)

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• Thank you