The Path Towards India

1
The Path Towards India

• Indias Growing Presence in the Global Stage
• Vikram Kochar
• Universal Metals, Inc
• New York and Washington DC
• 516 829 0896 / 703 598 7007
• Vikram.Kochar_at_universalmetals.us
• www.universalmetals.us
• Buyer and Seller
• Stainless Steel Seconds and Usables
• Non Ferrous Scrap

2
Quote from Dwight Eisenhower

• We who are free -- and who prize our freedom
  above all other gifts of God and nature --must
  know each other better trust each other more,
  support each other.
• Dwight Eisenhower uttered hope in New Delhi in
  1959
• Irksome.that only it is now that a stronger
  relationship is being forged
• USA - Worlds most powerful democracy
• India - Worlds most populous democracy

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Contents

• Introduction
• Indias Current State
• Necessary Growth of India
• Indian Policies for 2006 and Beyond
• US and India
• Conclusion

4
Introduction

• India is one of the fastest growing free
  economies of the world (7 to 8 growth rate)
• Currently the 12th largest economy
• 3rd largest in Asia
• Likened their emergence to the emergence of
  America in the 20th century, with impacts
  potentially as dramatic
• Trade and Economic Importance
• Infrastructure Development
• Defense Policies
• World has taken notice
• Davos Conference (World Economic Forum)
• Dignitary Visits

5
Introduction (cont.)

• Many Analysts from the west state that
• India is set to become the office of the world
• Strategic partner to balance Asian power
• Each Passing Day
• Indian businesses opening in the USA
• American businesses opening up in India
• Many US Companies have a household name in India
• McDonalds
• Coca Cola
• Microsoft
• Many of the worlds business people are convinced
  It is on the brink of replicating the astonishing
  burst of growth that transformed China
• Booming High-Tech Service Sector
• Tens of Millions of Affluent Consumers

6
Current State

• Population - 1.1 Billion
• US - 298 Million
• World - 6.4 Billion
• It occupies 2.4 of worlds land mass, but
  supports more than 15 of the worlds population
• 2005 GDP - 3.678 Trillion
• 4th Biggest GDP in the world
• 50 Services / Transportation
• 22.7 Agriculture
• Wheat, Rice, Grains, Oil, Seeds, Sugar, Jute, and
  Cotton
• 26.6 Manufacturing / Industry
• Textiles, jutes, processed foods, steel,
  machinery, transport equipment, cements,
  aluminum, fertilizers, mining, petroleum,
  computer software

7
Current State

• Various sectors of Indias economy have grown in
  2005
• Agriculture - 11
• Manufacturing - 9
• Electricity - 8
• Total GDP up 7
• Booming economy has increased foreign /
  commercial presence in India
• BMW invested 23M in a new plant
• Cisco has planned 1.1B investment over the next 3
  years
• McDonald's, Coca Cola, Benetton, MTV are an
  established part of culture in Indias youth
• Fidelity Investments have launched an Indian
  Focused Fund

8
Current State

• Driving the super cycle along with China
• Refocus of Infrastructure and Manufacturing
• India has passed the US as the second most
  preferred spot to invest in (After China)
• 5.3B Invested in India
• Indias growth is spurred by vast and growing
  number of entrepreneurs who want to make money

9
Current State - Indias Roadblocks

• Crumbling Infrastructure
• Pollution
• Needs help in energy and does not want to rely on
  dirty coal
• Heavily layered and complex government system
• Tremendous amount of bureaucracy
• Idea development have become a major source of
  political and bureaucratic corruption
• No process to strengthen an entrepreneurial idea

10
Current State - Indias Roadblocks

• Basic Culture
• India has 17 major languages, and 27,000
  different dialects
• Female Illiteracy Rate at 55
• 216 Million Undernourished
• 25 of the worlds population
• 25 of the world lives below the poverty line
• 1/3 of the population contributes to 80 of the
  wealth
• Overall Cultural Paradox
• India is a society that is open, eager,
  confident, and ready to take on the world. But
  its state, its ruling, conservative, class, is
  far more hesitant, cautious, suspicious, of the
  changes around it

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The Growth of India

• Coinciding with its current state
• Set to leave third world status
• Further elevate it as an economic power house
• Growth is a necessity
• If not, bring rise in unemployment due to its own
  growing population
• Balances Chinas Power in the Region

12
The Growth of India

• Indias government realizes that the way to
  growth is through
• Redevelop its Infrastructure
• Increase Manufacturing / Industrialization
• Stronger role from Central Government
• Alleviate Tax policies
• Increasing Trade
• Globalization
• Capitalism
• Strengthen its Relationship with the US
• It was essentially US road map to growth during
  its early stages

13
Indias Path to Growth

• India realizes that a major driver for their
  future growth is the modernization of their
  current infrastructure
• Re-Developing their infrastructure
• India needs 150B of investment in ports, roads,
  power plants, etc.
• Economic growth of 8 drives uses of metals
• I.e. - houses, cars, appliances
• It is getting better as its being funded through
  public and private funds

14
Indias Path to Growth

• Bharat Nimran Program
• Government Program with 15B dollar investment to
  strengthen infrastructure
• Roads, Electrification, Telecommunication lines,
  water, agriculture, bridges, seaports, airports,
  growth poles
• Major funding coming from Privatization
• 2 Major Airports are being Privatized

15
Indias Path to Growth

• Reintroducing the path to manufacturing /
  industrialization
• Agricultural to Industrial to Service Economy
• US is Example At Service Phase
• China is Example At Industrial Phase
• Current output of major Indian mills and
  recycling facilities have increased
• 21B spent in developing steel plants by Mital and
  Posco
• Steel consumption will rise to 160M tons from 35M
  tons (5-7 years)
• Need more raw commodities to meet the increased
  demand
• Overall increase in manufacturing
• Highly Engineered / Precisioned Items
• Opportunities for investment

16
Indias Path to Growth

• Indian Government Helping
• Setup economic zones in which companies dont pay
  taxes or duties on imported goods needed for
  manufacturing
• Completed 10 Billion Dollar National Highway
  project connecting the countries four major
  cities
• Investment Expenditures up 25 (1.1B)
• Easing Foreign Investment and Privatization
  Policies
• Industries have benefited from eased policies
• Automobile, Software, Telecom, Electronics
• Government to focus on following industries
• Mining, Trade, Pensions
• Government getting better every week as set of
  regulations have been eased or permissions have
  been eliminated

17
Indias Tax Policies for 2006

• Lowering Import duties from 15 to 12.5
• Raw Metals and Manufacturing Inputs
• Alloy Steel and Primary and secondary non-ferrous
  metals reduced from 10 to 7.5
• Import on steel melting scrap and mineral
  products is at 5
• Ore and Concentrates from 5 to 2
• Major Bulk Plastics from 10 to 5
• Custom Duties have been lowered from 10 to 7.5
  on
• Refractories and Graphite electrodes
• Raw Materials for refractories such as graphite
  powder, aluminous cement, boron carbide, reactive
  alumina, silicon metal, and micro fumed silica
• Tax on small cars to decrease from 24 to 16

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Indias Global Trade

• Infrastructure, Industrialization, Easing Tax
  Policies are primary drivers for an increased
  global presence of India
• Reaching towards market oriented economic reform
• Liberalized Foreign Investment and Exchange
  Regimes
• Industrial Decentralization
• Significant Reduction in Tariffs and other trade
  barriers
• Reform and Modernization of the Financial Sector
• Significant Adjustments in Government Monetary
  and Fiscal Policies
• Safeguarding Intellectual Property Rights

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US and India

• Indias and US growing relationship
• Strong relationship has already existed
• US is Indias Largest Trading Partner
• Total Bilateral Trade is 21.66B
• Exports to India is 6.1B (Up 22.4)
• Imports from India is 15.56 B (Up 19.2)
• Of all FDI Into India, US contributes one of the
  largest (11)
• 401M in 2004
• 11.3M in 1991

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President Bush Visits India

• Three year deadline set to double trade
• Conducted Joint Commission Sessions
• Science and Technology
• Cooperation in Cyber-Security
• Development of low cost drugs to fight AIDS
• How India can draw more investment from America
• INFRASTRUCTURE PROJECTS
• Requires 150B infrastructure development to
  sustain growth rate

21
New Patterns of Globalization

• For growth and success to continue
• India
• Recognition of leaders that developing countries
  must open their markets to imports and
  manufactured goods and services
• At the Same Time
• USA
• Wealthy Countries Need to Reduce their
  Agricultural Tariffs and Subsidiaries
• Both Governments need to seek
• Liberalization of Investment Restrictions
• Regulatory Transparency
• Reducing or Eliminating Tariff Barriers
• Lead to Increased Trade and Investment

22
US Interest in India

• Indias requirement for equipment and services
  will exceed tens of billions of dollars in the
  mid term as the economy globalizes and expands
• Infrastructure
• Transportation
• Energy
• Environment
• Health Care
• High Tech
• Defense

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Indian Investment Opportunities

• Best Prospects for Investment in India
• Telecom Equipment
• Computers and Peripherals
• Electrical Power Generation, Transmission,
  Distribution Equipment
• Pollution Control Equipment
• Oil and Gas Field Machinery
• Mining Industry Equipment
• Medical Equipment
• Defense Industry Equipment
• Textile Machinery
• Machinery Tools
• Food Processing
• Cold Storage Equipment
• Removable Energy Equipment

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Facts and Figures of India
Total Exports from India - 76.3 B Total Imports to India - 99.8B
Agricultural Products Petroleum
Engineered Goods Machinery
Precious Stones Electronic Goods
Cotton Apparel Transport Equipment
Fabrics Edible Oils
Handicrafts Fertilizers
Gems Jewelry Chemicals
Tea Iron Steel
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Facts and Figures of India
Principal US Exports Principal US Imports
Diagnostic or Lab Reagents Textiles / Ready Made Garments
Aircraft and Parts Internet Enabled Services
Advanced Machinery Agriculture Related Products
Cotton Gems / Jewelry
Fertilizers Leather Products
Computer Hardware Chemicals
Ferrous Waste / Scrap Metal Iron Steel
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Indian Attractions

• Short Term Attraction
• American Businesses to other Indian Attractions
• Economy growing more than 7 for the fourth
  straight year
• Fast Expanding Middle Class
• Indias main stock index was up by more than 50
  last year
• Tremendous Potential as population move towards
  urban areas
• Indias boom has yet to reach 2/3 of its
  population

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Indian Attractions

• Long Term Attraction
• Stability
• Proven mechanism for peaceful transfer of power
  in government and corporations
• Ability to Withstand terrible internal conflicts
  without danger to its integrity
• Democracy
• Demographics
• Chinas one child policy ensures that it will
  grow old before it gets rich
• India will remain younger and more dynamic

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Long Lost Brothers?

• According to the Pew global attitudes study,
• India is the most pro-America country in the
  world
• 71 of Indians have a favorable impression of the
  US
• Worried about outsourcing to India?
• Through all the outsourcing of goods and services
  over, American incomes have actually risen faster
  than those of other major industrial countries
• More than half the fortune 500 companies source
  some IT work to India

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Long Lost Brothers?

• Indians Understand Americans
• Noisy open society with a chaotic democratic
  government
• English speaking
• Familiar world view
• Growing fascination with each other in bringing
  together businessmen, non-governmental activists,
  journalists, and writers
• Similar political, social and economic
  counterparts
• I.e. - China, Middle East

30
India Already Doing Well

• India is doing very well in terms of growth and
  establishing its place in the Global Economy
• India is a very self reliant country
• Domestic Consumption is 85
• Recognition that India has a lot of potential is
  beginning to sink in
• India will be the number one knowledge production
  center of the world
• Many companies are opening RD outfits in India
• It is growing faster and lifting more people out
  of poverty than ever before

31
Indias Modest Growth

• 3 Million new mobile Connections each month
• Second Fastest Growing Market (After China)
• Well Ahead of Targets
• 1 Million vehicles a year by 2005-2006
• Heavy Manufacturing Items such as TVs and Fridges
  will grow to 9.5 M and 4.7 M respectively
• 70,000 Bank Branches, 200,000 ATMs by 2009
• BPO and Software will have a turnover of 80
  Billion by 2007

32
Indias Economic Transformation

• 2003 Study by Goldman Sachs
• Over the next 50 years, India will be the fastest
  growing of the world economies
• Per capita income will be 35 times higher than
  today
• Indian Companies are growing at an extraordinary
  rate of 15-20
• Will become a knowledge economy and an even
  bigger player than it is today on the global stage

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Indias Economic Transformation

• India will also be the drug factory of the world
• Tools and Production Facilities will be built to
  ensure it can help Foreign Multinationals take
  advantage of the cost savings
• Indian Companies themselves will be spending a
  lot in R D for development of drugs
• Strong Vehicle for Equity Investing
• Indian National Stock Exchange and Bombay Stock
  Exchange are 3rd and 5th largest in the world in
  terms of investment

34
Indias Bright Future

• Unlike China, many Indians residing in foreign
  land are returning in huge numbers because
  salaries and quality of life has been greatly
  improving
• Convey Western Philosophies for economic growth
• Its Finance Minister attended the G-7 rich
  countries treasury meeting for the first time in
  London
• Indias National Income will overtake that of
  Italy by 2014, France by 2020, Germany in 2023,
  and Japan by 2033
• India, like China, still has starving millions,
  but its high-tech all stars have become world
  beaters

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Summary

• What is happening today is the birth of India as
  an independent society, boisterous, colorful,
  open, and ready for change
• Jawaharlal Neru, Indias first prime minister
• India, even with its issues, is a tremendously
  growing economy, and is being noticed by business
  and foreign dignitaries around the world
• Multiples opportunities for investment
• US and India relations getting stronger based on
  similar goals and challenges
• Any questions????

36
UNIVERSAL METALS, INC. 98 CutterMill Road, Suite
428 N 1600 North Oak Street
Suite 824 Great Neck, NY 11021
Arlington, VA 22209 Phone 516
829 0896 Phone [phone] Fax 516
829 0955 Fax 703 807
2196 Vikram.Kochar_at_universalmetals.us www.univers
almetals.us Universal Metals was founded in 1991
as a secondary and excess prime exporter of non
ferrous items, focusing specifically on stainless
and electrical steel. We are an exporter of
secondary stainless steel products in a form used
prior to manufacturing. We sell stainless steel
sheets, stainless steel coils, pipes and tubes,
and bars and rods. Once a manufacturer has this
product, they then produce the final end product
with it. We also export various non ferrous
scrap items, including ISRI specifications from
the copper, brass, stainless steel, and aluminum
family. In recent years, there has been a surge
in demand for these products in the overseas
market. Universal Metals has taken advantage and
demonstrated tremendous growth during those
years. Industries around the world that utilizes
the unique chemical properties of stainless steel
secondaries and other non ferrous scrap including
chemical and power, food and beverage,
pharmaceutical, and transportation. Other major
uses are in architecture, domestic appliances,
household items, and electronic appliances. Our
end users all serve the industries mentioned. In
fact, the demand of stainless has become so
evident that the secondary market continues to
grow just to keep pace with the growth of all
industries and the expanding markets around the
world. This is a niche that Universal Metals have
helped develop and leverage in order to serve the
growth. Universal Metals, inc. with its
experience in the non ferrous industry, and the
overseas markets, will continue to help
facilitate the growth of industries throughout
the world. Our international operations are
further facilitated by our offices in
India. Most importantly, as recognized by our
suppliers and our customers, what we bring is not
only a renowned reputation, but a personal
relationship to ensure we accommodate our
customers needs to the absolute best of our
abilities. Our renowned reputation and continued
growth comes from our fast, efficient, and
dependable service. Our experience with exporting
throughout the globe gives us a competitive
advantage that is passed on to our customers. We
look forward to hearing, and working with you, as
your ultimate Non Ferrous / Stainless Steel buyer
and seller. Sincerely, Vikram Kochar,