Doing Business in India CIBER Conference, East Lansing, MI - November 2011

Key Statistics GDP of $ 1.7 trillion (4 th largest economy in the world) GDP of $ 1.7 trillion (4 th largest economy in the world) GDP growth rate of 8% ( year ending March 2012) GDP growth rate of 8% ( year ending March 2012) Population 1.1 billion ( 70% rural) Population 1.1 billion ( 70% rural) 27% of the population below the poverty line in 2005 vs. 53% in % of the population below the poverty line in 2005 vs. 53% in % literacy rate in 2006 vs. 53% in % literacy rate in 2006 vs. 53% in major languages and more than 2000 ethnic groups 29 major languages and more than 2000 ethnic groups

History Indus Valley Civilization flourished during the 3 rd and 2 nd millennia B.C. Indus Valley Civilization flourished during the 3 rd and 2 nd millennia B.C. The Classical Indian culture dates from around 1500 B.C. The Classical Indian culture dates from around 1500 B.C. British rule from the 19 th century till 1947 British rule from the 19 th century till 1947 Parliamentary system, based on the Constitution, with power divided between the Center and the States Parliamentary system, based on the Constitution, with power divided between the Center and the States Economic Liberalization began in the early 1990’s and has served to accelerate the country’s growth and spread the benefits Economic Liberalization began in the early 1990’s and has served to accelerate the country’s growth and spread the benefits

The Economy Sector% of GDP% of the Labor Force Agriculture18.5%52% Industry26.3%14% Services55.2%34 % AgricultureIndustry Rice,Wheat,Cotton, Lentils Sugarcane,Tea,Onions, Potatoes, Dairy,Poultry,Fruit Textiles,Chemicals, Steel,Mining,Cement, Transport,Pharma, Machinery

Economic Prospects Private consumption as a % of GDP is closer to that of Japan and the United States than it is to China Private consumption as a % of GDP is closer to that of Japan and the United States than it is to China India will see further reduction in poverty India will see further reduction in poverty Middle class is expected to grow tenfold-merit based achievement Middle class is expected to grow tenfold-merit based achievement Urban areas will continue to grow-there are already 20 cities with more than 1.6 million inhabitants – potential consumers, entrepreneurs and industrial/service workers Urban areas will continue to grow-there are already 20 cities with more than 1.6 million inhabitants – potential consumers, entrepreneurs and industrial/service workers

American presence in India Citibank since 1902 Citibank since 1902 Colgate since 1937 Colgate since 1937 P&G (predecessor) since 1951 P&G (predecessor) since 1951 IBM since 1951(left in mid-70’s and came back in 1997) IBM since 1951(left in mid-70’s and came back in 1997) Bank of America since 1964 Bank of America since 1964 Unilever, Nestle, Siemens, HSBC, Bosch Unilever, Nestle, Siemens, HSBC, Bosch

Indo-US ties US-India Business Council US-India Business Council Silicon Valley and other networks Silicon Valley and other networks Five US Consulates in India Five US Consulates in India Rotary, Lions, Alumni groups Rotary, Lions, Alumni groups NGO’s: Ford, Rockefeller and Gates Foundations NGO’s: Ford, Rockefeller and Gates Foundations Cooperation in defense, scientific research, education Cooperation in defense, scientific research, education

Michigan in India Ford Ford GM GM Delphi Delphi Flint Flint Haworth Haworth How about a Michigan in India “team effort”? How about a Michigan in India “team effort”?

Strengths Pharmaceuticals/ Health Care Pharmaceuticals/ Health Care IT IT Auto components Auto components Other services Other services

Weaknesses Electronics manufacturing Electronics manufacturing Infrastructure/Transportation/Power/Water Infrastructure/Transportation/Power/Water Green technologies Green technologies Education Education

How to go in Liaison office Liaison office Through an Agent/Distributor Through an Agent/Distributor Assembly or Manufacture in India Assembly or Manufacture in India Technology licensing Technology licensing

Why go to India Growing economy and large numbers of wealthy and middle-class people Growing economy and large numbers of wealthy and middle-class people Diversified economy, with educated business people looking for new technologies and opportunities Diversified economy, with educated business people looking for new technologies and opportunities Established set-up for doing business: English speaking, Banking & Trade Finance, Law firms, Media ( print, television, social media), Insurance Established set-up for doing business: English speaking, Banking & Trade Finance, Law firms, Media ( print, television, social media), Insurance International airports accessible from East and West, international standard hotels, communication and health care. International airports accessible from East and West, international standard hotels, communication and health care.

Unique Reasons to go to India Laboratory to develop products for developing markets and a supply base Laboratory to develop products for developing markets and a supply base Export location for Middle East, Africa, Russia and SE Asia Export location for Middle East, Africa, Russia and SE Asia Americans can provide systems, procedures and efficiencies Americans can provide systems, procedures and efficiencies Large population of educated young people- welcome a chance to work in a professional environment Large population of educated young people- welcome a chance to work in a professional environment India is a Democracy! India is a Democracy!

CULTURAL FACTORS National pride and confidence in their education, background and culture National pride and confidence in their education, background and culture Awareness of global issues Awareness of global issues Interest in discussing political and other current issues Interest in discussing political and other current issues