India: Past, Present, and Future

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IndiaPast, Present, and Future
New York, NY 13 November, 2006
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BARBOUR GRIFFITH ROGERS
eMR Technology Ventures
Steptoe Johnson LLP
Griffith Rogers
U.S.-INDIA BUSINESS COUNCIL 31 YEARS of GROWING
ENTERPRISE
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
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Delhi, Capital City POP 13 million
Cong
219 Seats
BJP
189 Seats
Left
61 Seats
Others
70 Seats
Bangalore Silicon Valley of India POP 7 million
Political Consensus in Favor of Reforms
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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

• Dream Budget visionary
• Supreme Court Advocate, Harvard MBA
• Pragmatic reformer

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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
• Patents Act IPR Protection
• Retail (Single Product)
• Next Steps?
• Civilian Nuclear Cooperation

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Proof is in the Pudding

• GDP
• 8
• Foreign Direct Investment (91-06)
• 70 billion
• 8.5 billion in FDI expected in fiscal 2006-2007
• 2006 Trade Between U.S. India
• 32 billion 20 annual growth
• To reach 50 billion over next two years
• BPO- 49 billion by 2009
• Forex Reserves
• 160 billion

5 Million New Cell Phones Registered Last Month!
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Transformation of the Indo-US Partnership

• After September 11
• India pledged support for the US war in
  Afghanistan, offering America use of its airspace
  and airports
• A terrorist attack on Indias Parliament on
  December 13, 2001 moved India closer to the US
• Since 2001...a common enemy in international
  terrorism

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The Architects of the Strategic Partnership
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IT/ BPO Boom
200 call centres in India with a turnover of 2
bn and a workforce of 150,000. 100 of the
Fortune 500 are now present in India compared to
33 in China. IBM 40,000 employees General
Electric 17,800 employees Oracle 17,000
employeesHewlett-Packard 11,000
employeesAmerican Express 4,000
employeesDell 3,800 employees
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Manufacturing
Impediment Infrastructure Shortfall

• Automobile components - worth 15 bn
• 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 - 11 bn sale of civilian aircraft to Air
  India with significant co-production recognition
  of Indias manufacturing prowess

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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.
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U.S. Defense Companies with Presence in India
Fremont Group
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U.S. Defense Opportunities
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
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U.S.-India Space 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

Space Cooperation Important Component of
Strategic Partnership
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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

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Innovation Frontier R D
RD Centre, Bangalore
RD Centre, Bangalore
India Development Centre, Bangalore, Hyderabad
Software Lab, Bangalore, Pune
India Engineering Centre, Bangalore
Labs India, Bangalore
Innovation Campus, Bangalore
RD Centre, Bangalore and Mumbai
Bangalore
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India Outward Bound Investments (in millions)

• Tata TeaEnergy Brands Inc.-677
• VideoconDaewoo Electronics-650
• Dr. Reddys LabBetapharm - 570
• RanbaxyTerpia - 324
• VSNL Tyco Global-130

VSNL-Teleglobe International-254
Scandent-Cambridge Services- 120 S.
Kumars-American Pacific-100-120 Rain
Commodities GLC Corp- 104 S.K.
Technologies-Cirilium Holdings-90 Patni
Computer-Cymbal Corp-68 GHCL Dan River
Inc.-54
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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
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Steel Suppressed Demand

• 25 Billion Ton Iron-Ore Reserves in India
• Iron Ore Exports to China _at_ 83 Mn Tons

Indian per capita Consumption in KG 29
U.S. per capita Consumption in KG 400
vs.
Indian Current Steel Production Capacity 35 MT
U.S. Current Steel Production Capacity 125 MT
vs.
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Projected Expansion Plans
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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
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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
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BARBOUR GRIFFITH ROGERS
eMR Technology Ventures
Steptoe Johnson LLP
Griffith Rogers
U.S.-INDIA BUSINESS COUNCIL 31 YEARS of GROWING
ENTERPRISE
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
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India Outward BoundTATA takeover of Corus Group

• 8 billion acquisition of the British Corus
  Group by Tata Steel
• Creates the 5th largest steel producer in the
  world
• Presence in 25 markets worldwide and estimated
  annual revenues of 24 billion