INDIA

1
INDIAS PROMISE Challenges Opportunities
APBO March 2007
2
Political Uncertainty
Delhi, Capital City POP 13 million
COALITION GOVERNMENTS TO STAY
ECONOMIC REFORMS SECURE
Cong
219 Seats
BJP
189 Seats
Left
61 Seats
Others
70 Seats
Bangalore Silicon Valley of India POP 7 million
3
UNITED PROGRESSIVE ALLIANCE
13 Constituents
Indian National Congress
Congress Allies
Left Front
UPA COMMON MINIMUM PROGRAM Agriculture - A New
Deal For Rural India Infrastructure - Building
World Class Employment - Rozgar Badhao
Education - Improving Access and Excellence
Health Care - Creating Capabilities Water -
Better Access, Better Utilization Urban
Renewal - Humane and Modern
Sonia Gandhi
Pranab Mukherjee
Sharad Pawar
Karunakaran
Prakash Karat
Kamal Nath
Praful Patel
Bhattacharyajee
Nirpuam Sen
DMK
4
UPCOMING STATE ASSEMBLY ELECTION
80 Parliamentary Constituencies
4 Phase Poll April / May
Population 179,000,000
5
Transparency

• BELL HELICOPTER
• MOTOROLA

Procurement Challenges
6
RED TAPISM
July 2006
1500 KM 8 Days
RED TAPE / TAX ANOMALIES / POOR INFRASTRUCTURE
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Challenges in Infrastructure

• 48 new road projects worth 12 bn are presently
  under construction
• Indian Railways require 22 bn investment
• Indias port upgrades require a total investment
  of 22 billion
• Domestic aircraft movements have shot up by 40
• Modernization requires upgrading 25 of the
  countrys national airports

100,000 MW required by 2012
8
LAND ACQUISITION-SEZs
NANDIGRAM
16 KILLED
WEST BENGAL
68 WOUNDED
TOTAL BANDH
5000 POLICE
HIGHLY POLITICIZED SEZs ON HOLD
9
HUMAN RESOURCE CONSTRAINT

• ITES/BPO INDUSTRY GROWING _at_ 45 Qtr
• QUALIFIED HELP IN SHORTAGE
• ATTRITION RATES gt 30
• FINISHING SCHOOLS REQUIRED
• CONTRACT LABOR LABOR REFORMS A MUST

10
INDIAS ECONOMIC LEADERSHIP

• Considered the Father of Indias Economic
  Reforms
• Economist by training, Strong free-market
  advocate
• Excellent rapport with President Bush

Manmohan SinghPrime Minister
Montek Singh AhluwaliaPlanning Commission Deputy
Chairman
P. ChidambaramMinister of Finance

• Private / Public Sector Interlocutor
• Economist by training, Oxonian
• World Bank background / Easily accessible

• Inclusive Budget
• Supreme Court Advocate, Harvard MBA
• Pragmatic reformer

11
SCORECARD ON REFORMS

• Progress
• Insurance FDI up to 26
• Telecom up to 74
• Oil/Gas, Roads, Ports up to 100
• Real estate opened to 100
• Open Skies Boeing Sales
• Patents Act -IPR Protection Re-entry of Merck
• Retail (Single Product) Wal-Mart Entry
• Civilian Nuclear Cooperation 123 Agreement
• 15 Special Economic Zones (SEZs) at present

GDP Growth Rate gt 8
6 Million New Cell Phones Registered Last Month!
12
IT/ BPO Boom
More than 300 of the Fortune 500 are in India
IBM 53,000 employees Cognizant 48,000
employees General Electric 20,000
employees Oracle 18,000 employeesHewlett-Pack
ard 11,000 employeesHoneywell 7,000
employees American Express 4,000
employeesDell 3,800 employees
13
MANUFACTURING

• Automobile Components - Worth 15 bn
• 20 Annual Growth in Exports
• Ford Producing 30,000 units
• Doubling Capacity in 2006-2009 timeframe
• General Motors Expecting to sell 30,000
• units in 2006 output to be doubled
• Boeing - 12.1 bn sale of civilian aircraft to
  Air India with significant co-production
  recognition of Indias manufacturing prowess

14
OPPORTUNITIES IN AGRICULTURE

• Blue Diamond Growers India is 4th
• largest and fastest growing market

• Pepsi is a major player
• with sales 700 mn

• 15 bn investment
• opportunity in storage,
• transportation,
• and refrigeration facilities.

• Coca Cola has major presence
• throughout the country

• McDonalds has introduced the McVeggie
• burger and Veg Pizza McPuff

Domino Pizza, Pizza Hut and Kentucky Fried
Chicken have all established restaurants in
India.
15
U.S. DEFENSE COMPANIES
Fremont Group
16
DEFENSE TRADE
Next Steps in U.S.-India Strategic
Partnership Major Opportunities in Defense
Cooperation - 30 billion
F-18 Super Hornet
C-131 Transport
P-3 Orion
GE-404 Engine
Bell 407 Helicopter
F-16 Fighting Falcon
Boeing 737 Countermeasure Equipment
Pac-3 Antimissile System
FireFinder PAC III
17
US-INDIA SPACE PARTNERSHIP
An Important Component of Strategic Partnership

• Indian Space Program 5th largest after U.S.,
  Russia, Europe, China
• 450 mn annual budget, but due to lower wages is
  equivalent to multi-billion dollar program in
  U.S.
• Space Exploration Chandrayan I India plans to
  launch its first unmanned mission to the moon by
  2008
• NASA agreement with ISRO to send scientific
  instruments into space aboard Indias Chandrayan
  I
• Export Control Regimes Strategic Partnership
  Challenges

18
NEXT WAVE PHARMACEUTICALS

• 6.5 bn and growing at 8-10
• 4th largest pharmaceutical
• industry in the world
• Expected by 2008 to be
• worth 12 billion
• Private Hospitals firmly entrenched Apollo,
  Manipal, Escorts, Max Healthcare
• Medical Tourism

19
INNOVATION FRONTIER R D
Labs India, Bangalore
India Development Centre, Bangalore, Hyderabad
RD Centre, Bangalore
RD Centre, Bangalore and Mumbai
Bangalore
Software Lab, Bangalore, Pune
India Engineering Centre, Bangalore
RD Centre, Bangalore
Innovation Campus, Bangalore
20
INDIA LOOKS OUTWARD

• Tata Group - 12 BN
• Reliance - 22 BN
• Essar - 9 BN
• Birla - 6 BN

• VideoconDaewoo Electronics-650
• Dr. Reddys LabBetapharm - 570
• RanbaxyTerpia - 324
• VSNL Tyco Global-130

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WHY INDIA ?
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ECONOMIC, IDEOLOGICAL, AND STRATEGIC PARTNERS

• Coherent democracy Pluralist/Secular
• 1/5th Worlds Population 2nd largest military in
  the world
• Common Values Against Terrorism, Trafficking,
  Narcotics
• Ideological Partner re Nepal, Sri Lanka,
  Bangladesh, China
• Common Law Judicial System
• 2nd largest number of Doctors, Engineers, 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 25

India is Rising, Becoming Vital to U.S. Interests
23
BARBOUR GRIFFITH ROGERS
eMR Technology Ventures
U.S.-INDIA BUSINESS COUNCIL 32 YEARS of GROWING
ENTERPRISE
Steptoe Johnson LLP
Griffith Rogers
Accenture Adobe Systems, Inc. Akin Gump
LLP Altria Group, Inc. AM General LLC Amas
Investment Project Services Amway
Corporation Andrews Kurth LLP Baker McKenzie
LLP Bank of America Bloomberg Boeing
Company Cargill Caterpillar, Inc.CBay Systems
Chevron CMS Energy The Coca-Cola Company Computer
Associates Covanta Energy Dell Computer
Corp. Deloitte Touche Discovery
CommunicationsDow AgroSciences Dow Jones DuPont,
Inc. eBay Inc.Estee LauderFord Motor
Company Fremont Group Limited
General Dynamics General Motors Gerson Lehrman
Group Guardian Life Insurance Gerson
Lehrman Guardian Life Insurance Hughes Network
Systems IBM, Corporation IDFC Ltd. Johnson
Johnson J.P. Morgan Chase K. Raheja
Universal Kotak Mahindra L-3 Communications Lockhe
ed Martin
McGraw-Hill Merck Co. Microsoft
Corporation Monsanto Motorola, Inc News
Corporation Ltd. Northrop Grumman Oracle
CorporationPanAmSat Paul Weiss LLP Pfizer
Inc. Pratt Whitney/United Technologies Sony
Pictures Entertainment Standard Chartered Bank
Target Corporation Tata, Inc. Texas
Instruments Textron Inc. Time Warner
Inc. Thomson Financial United Parcel
Service Vickery International Wal-Mart
Inc. Watson Wyatt Worldwide Xerox Corporation
24
INDIAS ENERGY SECURITY CHALLENGE
Oil discovery by Cairn Energy in 2004 Indias
demand will outstrip supply
Hydro-Electric Dam at Narmada constrained by
problems with environment
Gas pipeline from Turkmenistan, through Pakistan,
but questionable reserves
Coal supplies for 200 years, but high/ash, low
calorie value
Gas pipeline from Iran, discouraged by U.S.
Gas pipeline from Myanmar through Bangladesh
discouraged by U.S.
Kakrapar- Worlds first thorium-based nuclear
reactor
Gas discovery by Reliance in 2003 but will
service only fraction of Indias power needs
Tarapur- Indias civilian nuclear reactor
requires refueling