Ch

apte

r: G

ener

al P

rofi

le

1

India Country Profile

General Profile

Total area 3,287,263 sq km

Population 1,205,073,612 (July 2012 est.)

World Population (in billions)

2007 2008 2009 2010 2011 Growth YoY

6.6 6.7 6.8 6.9 7.0 1%

Government type federal republic

Chief of state Mr Pranab Mukherjee

Head of government

Mr. Manmohan SINGH

Capital New Delhi

Climate varies from tropical monsoon in south to temperate in north

Language

Hindi 41%, Bengali 8.1%, Telugu 7.2%, Marathi 7%, Tamil 5.9%, Urdu 5%, Gujarati 4.5%, Kannada 3.7%, Malayalam 3.2%, Oriya 3.2%, Punjabi 2.8%, Assamese 1.3%, Maithili 1.2%, other 5.9%

Major City

NEW DELHI (capital) 21.72 million; Mumbai 19.695 million; Kolkata 15.294 million; Chennai 7.416 million; Bangalore 7.079 million (2009)

Economy Profile

2009 2010 2011

World GDP Real Growth

-0.8% 5% 3.6%

World GDP (in Trillions)

58.1 63.3 70.2

IndiaGDP Real Growth

6.8% 10.1% 7.8%

GDP $1.843 trillion (2011 est.)

GDP – Per capita $3,700 (2011 est.)

Country Profile

Politics

Economy

Trade & Industries

INDIA

Ch

apte

r: E

con

om

y P

rofi

le

2

GDP – Composition by sector

agriculture: 18.1%

industry: 26.3%

services: 55.6% (2011 est.)

Inflation 6.8% (2011 est.)

Exchanges Rates

Indian rupees (INR) per US dollar -

44.64 (2011 est.)

Primary Economy Sector

Information Technology

Information Technology Enabled Services

Telecommunications

Electronics and hardware

Automobiles

Pharmaceuticals and biotechnology

Consumer durables

Retail

Textiles

Infrastructure

Construction

Airlines

Hospitality

Power

Oil and natural gas

Fertilizers and chemical

Unemployment Rate

9.8% (2011 est.)

Ch

apte

r: P

ort

s an

d T

erm

inal

s

3

Ports and

Terminals

Chennai, Jawaharal Nehru Port, Kandla, Kolkata (Calcutta), Mumbai (Bombay), Sikka, Vishakhapatnam

International

Airports

Indira Gandhi International Airport (Delhi), Chennai International Airport

(Chennai), Chhatrapati Shivaji International Airport (Mumbai), Netaji

Subhash Chandra Bose International Airport (Calcutta)

Election results

People's Assembly - percent of vote by party - NA; seats by party - INC 206, BJP 116, SP 23, BSP 21, JD (U) 20, AITC 19, DMK 18, CPI-M 16, BJD 14, SS 11, AIADMK 9, NCP 9, other 61, vacant 2; note - seats by party as of December 2011 - INC 208, BJP 115, SP 22, BSP 21, JD(U) 20, AITC 18, DMK 18, CPI(M) 16, BJD 14, SS 14, AIADMK 9, NCP 9, TDP 6, RLD 5 other 49, vacant 1

Ministry Name

Menteri/ Departemen Nama Pejabat

Prime Minister and also In-Charge

of the Ministries/Departments viz:

Ministry of Personnel, Public

Grievances and Pensions

Ministry of Planning

Department of Atomic Energy

Department of Space

: Dr. Manmohan Singh

Minister of Finance : Shri Pranab Mukherjee

Minister of Agriculture and Food

Processing Industries

: Shri Sharad Pawar

Minister of Defence : Shri AK Antony

Minister of Home Affairs : Shri P. Chidambaram

Minister of Railways : Shri Dinesh Trivedi

Minister of External Affairs : Shri SM Krishna

Minister of Micro, Small and

Medium Enterprises

: Shri Virbhadra Singh

Minister of Earth Sciences

Minister of Science and

Technology

: Shri Vilasrao Deshmukh

Minister of Health and Family

Welfare

: Shri Ghulam Nabi Azad

Minister of Power : Shri Sushil Kumar Shinde

Minister of Corporate Affairs : Shri M. Veerappa Moily

Minister of New and Renewable

Energy

: Dr. Farooq Abdullah

Minister of Petroleum and Natural

Gas

: Shri S. Jaipal Reddy

Minister of Urban Development : Shri Kamal Nath

Minister of Overseas Indian

Affairs

: Shri Vayalar Ravi

Ministry of Steel : Shri Beni Prasad Verma

Minister of Drinking Water and

Sanitation

Minister of Rural Development

: Shri. Jairam Ramesh

Minister of Information and

Broadcasting

: Smt. Ambika Soni

Minister of Labour and

Employment

: Shri Mallikarjun Kharge

Minister of Human Resource

Development,

: Shri Kapil Sibal

Ch

apte

r: M

inis

try

Nam

e

4

Minister of Communications and

Information Technology

Minister of Textiles

Minister of Commerce and

Industry

: Shri Anand Sharma

Minister of Road Transport and

Highways

: Shri CP Joshi

Minister of Housing and Urban

Poverty Alleviation and Minister

of Culture

: Kum. Selja

Minister of Tourism : Shri Subodh Kant Sahay

Minister of Shipping : Shri GK Vasan

Minister of Water Resources and

Minister of Parliamentary Affairs

: Shri Pawan K. Bansal

Minister of Panchayati Raj and

Minister of Tribal Affairs

: Shri V. Kishore Chandra

Deo

Minister of Chemicals and

Fertilizers

: Shri MK Alagiri

Ministry of Coal : Shri Sriprakash Jaiswal

Minister of Minority Affairs and

Minister of Law and Justice

: Shri Salman Khursheed

Ministry of Heavy Industries &

Public Enterprises

: Shri Praful Patel

Minister of Civil Aviation : Shri Ajit Singh

Ch

apte

r: P

olit

ical

par

ties

an

d le

ader

s

5

Political parties and leaders

All India Anna Dravida Munnetra Kazhagam or AIADMK [J.

JAYALALITHAA]; All India Trinamool Congress or AITC [Mamata

BANERJEE]; Bahujan Samaj Party or BSP [MAYAWATI]; Bharatiya Janata

Party or BJP [Nitin GADKARI]; Biju Janata Dal or BJD [Naveen PATNAIK];

Communist Party of India or CPI [A.B. BARDHAN]; Communist Party of India-

Marxist or CPI-M [Prakash KARAT]; Dravida Munnetra Kazhagam or DMK

[M.KARUNANIDHI]; Indian National Congress or INC [Sonia GANDHI];

Janata Dal (United) or JD(U) [Sharad YADAV]; Nationalist Congress Party or

NCP [Sharad PAWAR]; Rashtriya Janata Dal or RJD [Lalu Prasad YADAV];

Rashtriya Lok Dal or RLD [Ajit SINGH]; Samajwadi Party or SP [Mulayam

Singh YADAV]; Shiromani Akali Dal or SAD [Parkash Singh BADAL]; Shiv

Sena or SS [Bal THACKERAY]; Telugu Desam Party or TDP [Chandrababu

NAIDU]

India Economy

Overview

India is developing into an open-market economy, yet traces of its past autarkic

policies remain. Economic liberalization, including industrial deregulation,

privatization of state-owned enterprises, and reduced controls on foreign trade

and investment, began in the early 1990s and has served to accelerate the

country's growth, which has averaged more than 7% per year since 1997. India's

diverse economy encompasses traditional village farming, modern agriculture,

handicrafts, a wide range of modern industries, and a multitude of services.

Slightly more than half of the work force is in agriculture, but services are the

major source of economic growth, accounting for more than half of India's output,

with only one-third of its labor force. India has capitalized on its large educated

English-speaking population to become a major exporter of information

technology services and software workers. In 2010, the Indian economy

rebounded robustly from the global financial crisis - in large part because of

strong domestic demand - and growth exceeded 8% year-on-year in real terms.

However, India's economic growth in 2011 slowed because of persistently high

inflation and interest rates and little progress on economic reforms. High

international crude prices have exacerbated the government's fuel subsidy

expenditures contributing to a higher fiscal deficit, and a worsening current

account deficit. Little economic reform took place in 2011 largely due to

corruption scandals that have slowed legislative work. India's medium-term

growth outlook is positive due to a young population and corresponding low

dependency ratio, healthy savings and investment rates, and increasing

integration into the global economy. India has many long-term challenges that it

has not yet fully addressed, including widespread poverty, inadequate physical

and social infrastructure, limited non-agricultural employment opportunities,

scarce access to quality basic and higher education, and accommodating rural-to-

urban migration.

Trade Policy

1. Maintaining fiscal discipline

2. Orientation of public expenditure towards sectors in which India is

faring badly such as health and education.

3. Introduction of reforms in labour laws to generate more employment

opportunities for the growing population of India.

4. Reorganization of agricultural sector, introduction of new technology,

reducing agriculture's dependence on monsoon by developing means of

irrigation.

5. Introduction of financial reforms including privatization of some

public sector banks.

Investment Policy

Investments in Bank Fixed Deposits (FD)

Fixed Deposit or FD is accrues 9.25% of annual returns for non-senior citizen,

Ch

apte

r: In

vest

men

t P

olic

y

6

depending on the bank's tenure and guidelines, which makes it's widely sought

after and safe investment alternative. The minimum tenure of FD is 15 days

and maximum tenure is 5 years and above. Senior citizens are entitled for

exclusive rate of interest on Fixed Deposits, current rate of return is average

10% annual.

Insurance features among the best investment alternative as it offers services

to indemnify your life, assets and money besides providing satisfactory and

risk free profits. Indian Insurance Market offers various investment options

with reasonably priced premium. Some of the popular Insurance policies in

India are Home Insurance policies, Life Insurance policies, Health Insurance

policies and Car Insurance policies.

Some top Insurance firm in India under whom you can buy insurance scheme

are LIC, SBI Life, ICICI Prudential, Bajaj Allianz, Birla Sunlife, HDFC

Standard Life, Reliance Life, Max NewYork Life, Metlife, Tata AIG, Kotak

Mahindra Life, ING Life Insurance, etc.

)

National Saving Certificate (NSC) is subsidized and supported by government

of India as is a secure investment technique with a lock in tenure of 6 years.

There is no utmost limit in this investment option while the highest amount is

estimated as ` 100. The investor is entitled for the calculated interest of 8%

which is forfeited two times in a year. National Saving Certificate falls under

Section 80C of IT Act and the profit accrued by the investor stands valid for

tax deduction up to ` 1, 00,000.

estments in Public Provident Fund (PPF)

Like NSC, Public Provident Fund (PPF) is also supported by the Indian

government. An investment of minimum ` 500 and maximum INR. 100,000 is

required to be deposited in a fiscal year. The prospective investor can create it

PPF account in a GPO or head post office or in any sub-divisions of the

nationalized bank.

PPF also falls under Section 80C of IT Act so investors could gain income tax

deduction of up to ` 1, 00,000. The rate of interest of PPF is evaluated yearly

with a lock in tenure of maximum 15 years. The basic rate of interest in PPF is

8%.

ments in Stock Market

Indian Stock market is very fluctuating. A smart portfolio positioned for long-

term growth includes strong stocks from different industries. Before investing

in stock market one should be prepared to assume risk equivalent to sum

invested in the market. Investing in share market yields higher profits.

Influenced by unanticipated turn of market events, stock market to some

extent cannot be considered as the safest investment options. However, to

accrue higher gains, an investor must update himself on the recent stock

market news and events.

Mutual Fund firms accumulate cash from willing investors and invest it in

share market. Like stock market, mutual fund investment are also entitled for

various market risks but with a fair share of profits. One should select mutual

fund schemes based on all or some of the following criteria:

Long term and Short Term Performance

Consistency in Returns

Performance during bullish and bearish phases

Fund Managers performance with the fund's operations

Ch

apte

r: In

vest

men

t P

olic

y

7

A simple way to select a mutual fund scheme to invest in is to select a 5 star

or 4 star rated fund from one of the following rating agencies:

ICRA Ratings

Value Research Online

Moneycontrol

eme

Controlled by SBI, Gold Deposit Scheme was instigated in the year 1999.

Investments in this scheme are open for trusts, firms and HUFs with no

specific upper limit. The investor can deposit invest minimum of 200 gm in

exchange for gold bonds holding a tariff free rate of interest of 3% - 4% on the

basis of the period of the bond varying with a lock in period of 3 to 7 years.

Moreover, Gold bonds are not entitled of capital gains tax and wealth tariff.

The sum insured can be accrued back in cash or gold, as per the investor's

preference.

Indian real estate industry has huge prospects in sectors like commercial,

housing, hospitality, retail, manufacturing, healthcare etc. Calculated realty

demand for IT/ITES industry in 2010 is estimated at 150mn sq.ft. around the

chief Indian cities. Termed as the "money making industry", realty sector of

India promises annual profits of 30% to 100% through real estate investments.

Private equity is a type of asset consisting of equity securities in private

companies that are not publicly traded on stock exchange.

A private equity investment will generally be made by a private equity firm, a

venture capital firm or an angel investor.

Private Equity is expanding at a fast pace. India acquired US $13.5 billion in

2008 under equity shares and featured among the top 7 nations in the world. In

2010, the total equity investment is predicted to increase upto USD 20 billion.

Indian equities promise satisfactory returns and have more than 365 equity

investments firms functioning under it.

As ranked by the PEI 300, the 10 largest private equity firms in the world are:

1.TPG Capital

2.Goldman Sachs Principal Investment Area

3.The Carlyle Group

4.Kohlberg Kravis Roberts

5.The Blackstone Group

6.Apollo Global Management

7.Bain Capital

8.CVC Capital Partners

9.First Reserve Corporation

10.Hellman & Friedman

Ordinary (NRO) funds

Investing in domestic (NRO) is one of the best investment alternatives for

NRIs who wish to deposit their income accrued abroad and maintain it in

Indian rupees. The deposited amount along with the interest is completely

repatriable. Investment can be done in Indian financial institutions including

the Non Banking Finance Companies which are listed with RBI. The interest

Ch

apte

r: In

vest

men

t P

olic

y

8

returns accrued on in this account is entitled under IT Act and is subject to

30% tax reduction at source including the appropriate surcharge and education

cess. The NRI investor can repatriate upto USD 1 million every year, for

genuine reasons, by forfeiting valid tariffs.

Ch

apte

r: N

atio

nal

Pri

ori

ty

9

National Priority

Development Goals 2015 Vision

Achieve universal primary education

Reduce child mortality

Improve maternal health

Combat HIV/AIDS, Malaria and other diseases

Ensure environmental sustainability

Develop a global patnership for development

Eliminate gender disparities in primary and secondary education, preferably

by 2005, and in all levels of education by 2015

Halve the proportion of the people suffering from Hunger

International organization participation

ABEDA, ADB, AfDB (nonregional member), ARF, ASEAN (dialogue partner),

BIMSTEC, BIS, BRICS, C, CD, CERN (observer), CICA, CP, EAS, FAO,

FATF, G-15, G-20, G-24, G-77, IAEA, IBRD, ICAO, ICC, ICRM, IDA, IFAD,

IFC, IFRCS, IHO, ILO, IMF, IMO, IMSO, Interpol, IOC, IOM, IPU, ISO, ITSO,

ITU, ITUC, LAS (observer), MIGA, MONUSCO, NAM, OAS (observer),

OECD, OPCW, PCA, PIF (partner), SAARC, SACEP, SCO (observer), UN,

UNCTAD, UNDOF, UNESCO, UNHCR, UNIDO, UNIFIL, UNISFA,

UNITAR, UNMISS, UNMIT, UNOCI, UNSC (temporary), UNWTO, UPU,

WCO, WFTU, WHO, WIPO, WMO, WTO

India Potential

Developing a basic understanding or potential of the Indian market The Indian middle class is large and growing; wages are low; many workers are well educated and speak English; investors are optimistic and local stocks are up; despite political turmoil, the country presses on with economic reforms.But there is still cause for worries-

Infrastructural hassles The rapid economic growth of the last few years has put heavy stress on India's infrastructural facilities. The projections of further expansion in key areas could snap the already strained lines of transportation unless massive programs of expansion and modernization are put in place. Problems include power demand shortfall, port traffic capacity mismatch, poor road conditions (only half of the country's roads are surfaced), low telephone penetration (1.4% of population).

Indian Bureaucracy Although the Indian government is well aware of the need for reform and is pushing ahead in this area, business still has to deal with an inefficient and sometimes still slow-moving bureaucracy.

Diverse Market The Indian market is widely diverse. The country has 17 official languages, 6 major religions, and ethnic diversity as wide as all of Europe. Thus, tastes and preferences differ greatly among sections of consumers. Therefore, it is advisable to develop a good understanding of the Indian market and overall economy before taking the plunge. Research firms in India can provide the information to determine how, when and where to enter the market. There are also companies which can guide the foreign firm through the entry process from beginning to end --performing the requisite research, assisting with configuration of the project, helping develop Indian partners and financing, finding the land or ready premises, and pushing through the paperwork required.

Ch

apte

r: T

rad

e O

pp

ort

un

itie

s

10

Trade Opportunities

1. Indian Business Environment and Climate. India is traditionally a mixed economy. Many of the important sectors especially in the infrastructure and Industrial Sectors were in the hands of the government and other sectors were in the hands of private sector. But with the liberalization of the economy since 1991.India has really understood the importance of the global players and the relevant growth affects on the local suppliers and customers of India. The government previously had a considerable control over the private sector through licensing for additional manufacturing, Import of capital goods, Raw material and technology but with after liberalization & considerable chages and government has rationalised the norms for many licensing activities and even abolished completely in certain cases. These economic reforms have changed the business environment in India and a new economic freedom is in the process of bringing the change. Regular economic reforms are aimed to de regulate the country and stimulate the foreign Investment. So the overall environment is improving but it need to be speeding up in order to attract more foreign investment and high growth rate. "Business environment in India is improving and will be beneficial for the foreign investors"

2. Political Stability India is the largest democracy. It has really been long journey for the Indian politics and it has changed a lot as compared to the initial years. India has not seen any single party government since 1989. which indicates that the politically it is not stable but over the past twenty years the transformation of Indian politics from a stable single party government to a stable collation government has given some confidence to the international market as the last two governments were collation governments but have completed their full term. Further in the near terms it seems difficult to have a single party government. Even after having the collation government the main political parties in these governments were successful in taking the economic reforms ahead. India has set itself as an example to form and successfully complete terms of collation governments and equally doing impressive economic reforms in the past decade.

3. Availability of Buyers The most important factor for a successful market is that it should have the buyers who are willing to purchase. This plays a most important role in making India a very attractive market. India have huge and varied customer base which is the second largest population base in the world. The availability of all types of religion,cast and creed and the diversified culture makes it a more complicated market and hard to understand behaviors of buyer. But as far as huge population is concerned we can be sure that the potential exists for the various types of consumer goods therefore many foreign countries have been successful so far in establishing them self in India. In the presence of the huge population it gives scope to all other sectors also such as education , medical , agriculture and various other industries. Further as India is one of the fastest growing economy it also give

Ch

apte

r: T

rad

e O

pp

ort

un

itie

s

11

scope for various other heavy industries such as shipping, bulk Machinery, refineries, infrastructure and real estate etc. Hence with an increasing education level and economic development India promises to be a great source of buyer for all types of industry and attraction for the foreign investors.

4. Regulatory framework In order to develop a market and maximize its reach the market should be well regulated, In India the markets are generally regulated by the demand and supply of the goods, but at the same time government is regularly involved in the regulating the market and take efforts that the market is not suffered. For the foreign investor there are many regulation involved which makes some hurdle for the investors to invest in India but the government is regularly reviewing them and as per the market requirement they are being amended and proper care is taken for the domestic market also so that the local business community is not effected. Regulatory framework in India is very complicated and time consuming and the foreign investors are generally not satisfied with the various registrations and formalities involved in setting up the business. As the investment generally comes from the developed nations where the regulatory framework is simple and strong hence the investors feel that the regulatory framework need a lot of improvement. The various laws and regulations involved for industries to be setup in India further it takes a long time to get the approval from government organizations. For each registration one has to contact different departments. Further not only registration but the company has to comply regularly comply with the various other monthly , quarterly and annual filling with various government departments. The above regulation and filling make the regulatory frame work more complicated. But the government is regularly working towards improvement of this framework which will help to boost the confidence of investor. Following are some of the recent improvement done by the government. * Online registration of companies. * Online payment of taxes * Online filling of tax return. * Online filling of Income Tax Return. * Online payment of services tax. * Online filling of sales tax returns. Hence the government is working towards the improvement of the framework and the in future we can expect the same to be streamlined.

5. Infrastructure Developments. In the development process of a country the most important factor is to have strong infrastructure development. Infrastructure includes the development of the Airport, Railway, power, ports, bridges, Highways and dams etc. India has always been on the weak side in respect of the infrastructure development process. But in the past one decade great efforts are being taken in development of these infrastructures and there was boom in the infrastructure and real estate sector.

Ch

apte

r: M

ain

Ind

ust

ry

12

There are many projects still going in the infrastructure sector which will change the face of the India infrastructure sector. The still lacking point is the slow execution of projects. But looking at the current reforms and the development process it looks that India will be very sound in relation to the infrastructure availability.

Main Industry textiles, chemicals, food processing, steel, transportation equipment, cement, mining, petroleum, machinery, software, pharmaceuticals

Biggest Company

Industry Type Name of the company

Oil & Gas Operation Reliance Industries Ltd

Oil & Natural Gas Coop

Indian Oil

Capital Good

Tata Motor

Sterlite Industries

Bajaj Auto

Materials Steel Authority of India

Tata Steel

Hindalco Industries

Foot Drink & Tobacco ITC

Utilities National Thermal Power

Gail (India)

Telecomunication Bharti Airtel

Trading Company MMTC Adani Export

Household & Personal Product Hindustan Lever Limited

Construction Grasim Industries

Business Service & Supplier Wipro

Infosys Technologies