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Andrew N. LiverisChaIrman am! (;t1lf;1E~ecl1liveOf/Ice'

The Dew Chemical Company2030 Dow Cent!:r

Midland. M,ctllgan 48674-2030989- 636-4147

FAX 989 - 638-9468

October 1, 2008

Mr. ChidambaramFinance MinisterGovernment of IndiaA.No.134, North blockFax - 011 23093289Email-fm@finance.nlc.in

Dear Honorable Minister:

Subject: Dow's growth Initiatives and challenges in India

As a follow-up to discussions with the Prime Minister in New York, I am writing to you to seek your urgentaction in support of a positive investment climate for Dow India's stated projects as well as to highlight to youmy company's commitment to growth as a local investor in India.

As you know, Dow Chemical International Pvt. ltd. (DCIPl I Dow India) has recently announced initiatives todouble its investment in India to approximately As- 1000 crores ($250 million) within the next year. Theseinvestments are primarily focused on bringing new and innovative technologies to market in India, which willin-turn grow downstream industries and jobs to further diversify the Indian economy. Dew India already hasnearly 1000 high-skilled employees and operations in seven .Iocations across the country.

Dow India has also substantially increased our presence in Indian society through multiple Corporate SocialResponsibility (CSA) activities, including funding the Jaipur foot initiative, providing water systems inGujarat, and contributing to the Bihar relief effort and infrastructure development (schools, etc.) in Pune. Wewill continue to partner with communities to further enhance the quality of life around Dow India's areas ofoperations. Unfortunately, even with such success, we are facing barriers for our two largest investments todate: the Dew India research center in Pune and Dow Europe's joint venture with GACl in Dahej.

These are two investments that the government publicly endorsed, but that now face barriers due to lack ofconsistent application of government support:

The Fle,B~'ch. BfJ.d,_Deve/opment Centre In Pune was formally announced by the Honorable ChiefMinister, Shri' Vilasrao 'Deshmukh in October 2007, and has been under construction on 100 acres 01industriar"lar;d- allotted by. the MIDC in Pune. This global research and innovation center will conductfundamental, high-skilled research as well as application development in renewable and conservation ofenergy, water and allied areas. We have already hired over 180 scientists, and anticipate 400 additionalhires once construction is completed. This project has faced many delays over the past six months and hasbeen vandalized on multiple occasions. This week the state Government again stopped the construction,announcing a second committee to evaluate the project. We are cooperating with the Government ofMaharashtra, but urge that this review be completed within the 30-day time/ine, and that construction beallowed to continue at the site simultaneously. The potential implications of continued costly disruptions andgovernment bureaucratic barriers - when companies halle complied with local laws and regulations andcommittedto be an active communitycontributor- are potentially devastating examples of lack of supportfor foreign investors.

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Page TwoOctober " 2008

.IGACUDow Europe joint venture in Dahej. In April2008, an MOU was signed between the two parties toset up Chloromethane production lacility in Gujarat. The proposed investment was announced byHonorable Chief Minister of Gujarat, Shri Narender Modi, and would rely on the use 01 Dow's advancedchloromethane manufacturing technolpgy. The innovative technologies Irom Dow Europe that willbe usedin this project willenable improved industrial competitiveness and compliance with the Montreal Protocol forenvironmental emissions. The downstream markets that willbenefillrom these technologies are the rapidlygrowing pharmaceutical intermediates and the electronics segments. However, the Chemical Ministry hasreportedly sent a communication to the FIPB confirming the value of the technology, but recommending adelay in the project. That message contradicts eartier discussions, before signing the MOU, when Dow Indiahad met with the Ministry 01 Chemicals and Fertilizers, and was advised. that the Govemment wouldwelcome this investment. The business has chosen to pull its application and willwork with GAGLand thenapproach the FIPB with a revised proposal. Again, clarity from the government, and specilically the Ministryof Chemicals and Fertilizers, is needed in support 01 Dow India's investment plans. Specifically, we alsoneed confidence that this application willbe approved based on the merits of the application.

Ultimately, it is critical that the Government of India speaks with one voice on issues 01 foreign directinvestment and sustained domestic economic growth. We value your direct assistance in ensuring that allMinistries operate on the basis of the messages we have received from the Prime Minister himself thatwelcome the opportunities for cooperation, partnership and contribution to India's domestic economy withhigh-skilled job creation as well as commitment of problem-solving technologies and funding lor social needsof local communities.

As said at the beginning of my tetter -we remain committed to exploring further investment in India but needyour support and actions to resolve these issues. We look for tangible evidence of government action in thenext 30 days. f look forward to meeting you at the upcoming CEO Forum in New York, NY, to discuss nextsteps in support of an open, transparent and welcoming investment climate in India.

Sincerely yours,

Andrew LiverisChairman and Chief Executive OfficerThe Dow Chemical Company

"

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CC: Dr. Montek Singh Ahluwalia, Vice Chairman, Planning CommissionDr. Ramesh Ramachandran, President, Dow India

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Andrew N. LlverlsGhctl[man and Chilli Executive OfficeI

The Oow Chemical Company2030 Dow Center

Midland. Mic/"dgan 48674.2030989- 636-4147

FAX 989 - 638-9468

October 1, 2008

Mr. Kamal NathMinister of Commerce & IndustryGovernment of IndiaUdyog BhawanNew Delhi -110011Fax -011 . 23062223/947Email -cim@nic.in

Dear Honorable Minister:

Subject: Dow's growth initiatives and challenges in India

As a follow-up to discussions with the Prime Minister in New York, I am writing to you to seek your urgentaction in support of a positive investment climate for Dow India's stated projects as well as to highlight to youmy company's commitment to growth as a local investor in India.

As you know, Dow Chemicallntemational Pvt. Ltd. (DCIPl/ Dow India) has recently announced initiatives todouble its investment in India to approximately Rs. 1000 crores ($250 million) within the next year, Theseinvestments are primarily focused on bringing new and innovative technologies to market in India, which willin-turn grow downstream industries and jobs to further diversify the Indian economy. Dow India already hasnearly 1000 high-skilled employees and operations in seven locations across the country-

Dow India has also substantially increased our presence in Indian society through multiple Corporate SocialResponsibility (CSR) activities, including funding the Jaipur fool initiative, providing water systems inGuJarat, and contributing to the Bihar relief effort and infrastructure development (schools, etc.) in Pune. Wewill continue fo partner wilh communities to further enhance the quality of life around Dow India's areas 01operations. Unfortunately. even with such success, we are facing barriers for our two largest investments todate: the Dew India research center in Pune and Dow Europe's joint venlure with GACl in Dahej.

These are two investments that the government publicly endorsed, but that now face barriers due to lack of,consistent application:'of govel'J"tmentsupport: .

The Reullrch snd Development Centre in Pune was formally announced by the Honorable ChiefMinister, Shri Vilasrao Deshmukh in October 2007, and has been under construction on 100 acres ofindustrial land allotted by the MIDC in Pune. This global research and innovation center will conductfundamental, high-skilled research as well as application development in renewable and conservation 01energy. water and allied areas. We have already hired over 180 scientists, and anticipate 400 addilionalhires once construction is completed, This project has laced many delays over the past six months and ~asbeen vandalized on multiple occasions. This week the state Government again stopped the construction,announcing a second committee to evaluate the project. We are cooperating with the Government 01Maharashtra, but urge that this review be completed within the 30-day timeline, and that construction beallowed to continue at the site simultaneously. The potential implications of continued cosily disruptions andgovernmentbureaucraticbarriers- when companies have complied with local laws and regulations andcommitted to be an active communitycontributor- are potentiallydevastating examples of lack of supportfor foreign investors.

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Page TwoOctober 1, 2008

JGACUDow Europe joint venture in Dahej. In April2008, an MOU was signed between the two parties toset up Chloromethane production facility in Gujarat. The proposed investment was announced byHonorable Chief Minister of Gujarat, Shri Narender Modi, and would rely on the use of Dow's advancedchloromethane manufacturing technology. The innovative technologies from Dow Europe that willbe usedin this project willenable improved industrial competitiveness and compliance with the Montreal Protocol forenvironmental emissions. The downstream markets that willbenefit from these technologies are the rapidlygrowing pharmaceuticaJ intermediates and the electronics segments. However, the Chemical Ministry hasreportedly sent a communication to the FIPB confirming the value of the technology, but recommending adelay in the project. That message contradicts eartier discussions, before signing the MOU, when Dow Indiahad met with the Ministry of Chemicals and Fertilizers, and was advised that the Govemment wouldwelcome this investment. The business has chosen to pull its application and willwork with GAGL and thenapproach the FJPB with a revised proposal. Again, clarity from the government, and specifically the Ministryof Chemicals and Fertilizers, is needed in support of Dow India's investment plans. Specifically, we alsoneed confidence that this application willbe approved based on the merits of the application.

Ultimately, it is critical that the Government of India speaks with one voice on issues of foreign directinvestment and sustained domestic economic growth. We value your direct assistance in ensuring that allMinistries operate on the basis of the messages we have received from the Prime Minister himself thatwelcome the opportunities for cooperation, partnership and contribution to India's domestic economy withhigh-skilled job creation as well as commitment of problem-solving technologies and funding for social needsof local communities.

As said at the beginning of my letter - we remain committed to exploring further investment in India but needyour support and actions to resolve these issues. We look for tangible evidence of government action in thenext 30 days. I look forward to meeting you at the upcoming CEO Forum in New York, NY, to discuss nextsteps in support of an open, transparent and welcoming investment climate in India.

Sincerely yours,

Andrew LivensChairman and Chief Executive OfficerThe Dow Chemical Company

"

CC: Dr. Montek Singh Ahluwalia, Vice Chairman, Planning CommissionDr. Ramesh Ramachandran, President, Dow India

I ,

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Dow India: Request for an appointment"Chitkara, Rakesh (K)" <RChitkara@dow.com>Fri, October 3,2008 12:08 pmtka.nair@pmo.nic.inNormal'yj~w FyJlli_~d.~ I Y~w Priru~Ne_YJ~[~i9.!l1AddJo Addre~!!.IJ!!9kI View as HTMI.,J3JQcICS_~lldet:

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~nri T K A Nair,

Principal Secretary to Prime Minister,Prime Minister's Office, Government of India,South Block, New Delhi - 110011

Subject:New York

Mr. Andrew Liveris's meeting with Honorable Prime Minister in

Dear Mr. Nair,

As you are aware that Mr. Andrew Liveris, CEO, The Dow Chemical Companyhad an opportunity to meet Prime Minister during his recent visit to NewYork. Mr. Liveris discussed the challenges being faced by Dow India inour recent projects in Maharashtra and Gujarat. Mr. Liveris has alsowritten to Mr. P Chidambaram and Mr. Kamal Nath early this week. I amenclosing the copies of both letters for your reference.

I

I would request for a~ appointment with you for Dr. Ramesh Ramachandran,President, Dow India ~nd Y to update the current situation at anyronvenient time and date. We seek your intervention to get the

solution of both the issues.

Kind regards,, , \...,,,"-<.5V~

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Truly yours,

Rakesh Chitkara

Director - Corporate AffairsDow Chemical International Pvt LimitedG Block, Raheja Towers, 2nd floor,Bandra-Kurla Complex, Bandra(E) ,Mumbai - 400 051 INDIATel: 91 22 6783 2311 (Dir)Fdx:91 22 26525691Mobile: 91 9820159634

Email ID - ~_cJ1.i-j:!<_~il_tLd~,w._.c;om

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«Mr. Chidambaram.pdf» «Mr. Kamal Nath.pdf» ,

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