1. - 0 - PRESENTATION ON INDIAN ECONOMY February 2010

2. - 1 - STRONG MACRO FUNDAMENTALS World’s fourth-largest economy in terms of PPP* and ranked 12th in US$ terms. GDP has increased rapidly over the past 15 years from $250 billion to over US$ 1 trillion currently. Per Capita Income in 2008-09: - US$ 2,563 in PPP terms - US$ 831 in nominal terms * PPP : Purchasing Power Parity terms – – –

3. - 2 - GROWING SAVINGS RATE Year Household savings Public sector Private corporate sector 2000-0121.6-1.83.9 2001-0222.1-2.03.4 2002-0322.9-0.64.0 2003-0424.11.14.6 2004-0522.82.26.7 2005-0624.12.47.7 2006-0724.13.38.3 2007-0824.34.58.8 Savings and Investments Savings Breakup: Households, public and private sector (% GDP) Recent increase in savings-to-GDP ratio has been due to improved savings of all three categories – households, public and private sector India’s dependence on foreign savings for financing domestic investments is limited

4. - 3 - GDP growth (%) CONSISTENT GROWTH… 8.5 per cent average GDP growth from 2004 to 2009

5. - 4 - Source: IMF India is set to grow faster than other regions (Annual Percentage change) Economies20082009Projections 2010 2011 World 3.0-0.83.94.3 Advanced Economies 0.5-3.22.12.4 United States 0.4-2.52.72.4 Euro Area 0.6-3.91.01.6 Japan -1.2-5.31.72.2 Developing Asia 7.96.58.4 China 9.68.710.09.7 India 7.35.67.77.8 Brazil 5.1-0.44.73.7 …OUTPACING THE WORLD

6. - 5 - GDP Composition: 1990-91 and 2009-10 RISE OF SERVICES AND INDUSTRY

7. - 6 - FDI and Portfolio Inflows (US$ bn) *Apr-Dec 2009 CAPITAL INFLOWS ARE RISING Foreign Direct Investment (FDI) in Jan 2010 grew 13.2 per cent over the previous month, to touch US$ 1.54 billion Private equity investments in India doubled in Jan 2010, with deals of over US$ 386 mn being announced. The recent recovery in capital inflows has lead to a 5-6% recovery in the value of the Rupee, which is currently trading at levels of Rs 46-47 /US$.

8. - 7 - RESILIENT ECONOMY OPPORTUNITY INDIA TRENDS

9. - 8 - DEMOGRAPHIC ADVANTAGE India’s Biggest Advantage: One of the youngest populations in the world Percentage of population aged 65 and older Source: United Nations, 2008

10. - 9 - 50 per cent of the population under 25 Among top three of 30 nations in availability of skilled labour 7.7 mn new entrants to the workforce every year Dependency ratio expected to fall from current 60 per cent to 48 per cent by 2025 STRONG DEMOGRAPHI C DIVIDEND BOOSTING INCREDIBLE ASPIRATIONS

11. - 10 - US$ billion RELENTLESS ENTREPRENEURSHIP Emergent Indian enterprises across sectors ranging from engineering to financial services. Market capitalisation of top-500 companies in excess of $800 bn or about 70% of GDP

12. - 11 - 11 INDIA INC. GOING GLOBAL US$ 2.8 billion ONGC acquired Imperial Energy PLC in 2008 US$ 44.44 million Spice Group acquired 20 per cent stake in MediaRing Ltd. in 2009 US$ 82 million Shree Renuka Sugars Ltd. acquired Vale Do Ivai S.A. Acucar E Alcool sugar and ethanol company in Brazil in 2009 Sources: 1. Tribune IndiaTribune India 2. The First ReporterThe First Reporter Bharti Airtel has acquired a 70 per cent stake in Warid Telecom in 2010 Planned investment - US$ 300 million

13. - 12 - 12 Abundant Natural Resources Fifth-largest bauxite reserves in the world, fourth-largest coal reserves, sixth-largest iron ore deposits Low-cost Skilled Talent India offers skilled and trained human resource at low cost Huge Demand Large population base and surging middle class with high disposable income Easy Access to Other Markets India’s strategic geographical location offers an opportunity to access neighboring South Asian markets Gains in Productivity India's productivity growth was 5.5 per cent in 2008, as compared with 2.3 per cent globally India: Manufacturing Hub Sources: The Conference Board; CIAThe Conference BoardCIA INDIA: GROWING MANUFACTURING HUB

14. - 13 - INDIA: FAVOURED R&D HUB Sources:: 1. Asia Times; 2. Business StandardAsia TimesBusiness Standard Vast pool of manpower According to the IMD World Competitiveness Year Book, India ranks among the top three of 30 nations in terms of availability of skilled labour Higher productivity Indian graduates, on an average, work 2,350 hours a year as compared with 1,900– 1,700 hours in the US Tax benefits Companies engaged in scientific R&D projects in India are entitled to a 100 per cent tax relief on profits for 10 years Growing domestic market The growing demand for technologically-advanced products in the Indian market is increasingly drawing MNCs to set up R&D centres here India: R&D Hub

15. - 14 - INFRASTRUCTURE OPPORTUNITY – THE PPP MODEL Planned investment for NHDP - USD 49,301 mn, excluding port connectivity and other NHAI projects, for 7 phases. Private sector investment needed for USD 25,371 mn through BOT/SPV mode, and USD 17,273 mn through Cess and Market Borrowings. Public private partnership (PPP) approach for highways development has been successful in India. As on date, 102 projects have been awarded to private sector covering 7188 kms involving an investment of almost USD 12,167 million. No of ConcessionsTotal LengthTotal cost (Rs. Crores) Investment committed (US$ million) BOT Toll Awarded76573745930.999985 Awards under process 29 154610356.192251 BOT Annuity Awarded26 145110036.952182 Awards under process 10 6383341.7726 Total Awarded102718855,96812167 Total Awards under process 39218413,6982978

16. - 15 - BIOTECHNOLOGY  India is among the top-12 biotech markets globally.  India ranks third in the Asia-Pacific region, after Japan and Korea.  Expected to touch US$ 5 billion by 2010 and US$ 25 billion by 2015. *Source: Top 20 biotech companies, Biospectrum industry survey, June 2009, p.14; Ernst & Young analysis Segment2008-09 Revenue (in US$ mn) Contribution (in per cent) Biopharma1734.2664.95 Bioservices453.6416.99 Bioagri328.6812.31 Bioindustrial105.163.94 Bioinformatics48.41.81

17. - 16 -  Low-cost operations Significantly lower R&D costs; outsourcing to India can save up to US$ 200 million. Cost of clinical trials 50 percent lower in phase I and 60 percent lower in phase II compared to global markets. Clinical trials take significantly lesser time. BIOTECHNOLOGY - ADVANTAGE INDIA  Large pool of talented human resources Large talent pool of science students pursuing higher education. 5000 PhDs and 1000 post-doctorals in biosciences-related fields. Top-notch life science education and research institutes.  Favourable IP climate Adherence to the TRIPS agreement with regard to the Patent Protection Act implemented in 2005 has increased the confidence of innovator companies in India.

18. - 17 - PHARMACEUTICALS  Among the fastest growing pharmaceutical markets in the world; worth US$ 16.6 billion in 2007–08  Domestic retail market expected to cross US$ 10 billion mark in 2010 and reach an estimated US$ 12 billion to US$ 13 billion by 2012.  Outsourcing opportunity set to grow to US$ 53 billion in 2010 from US$ 26 billion in 2006. Key Multinational Companies in India

19. - 18 - PHARMACEUTICALS - ADVANTAGE INDIA The basic production cost in India is almost 50 per cent lower than costs in the US. 85 per cent to 90 per cent manpower cost savings 40 per cent to 50 per cent savings in raw materials 30 per cent to 50 per cent lower depreciation Around 1,000 biotech and biochemistry postgraduates pass out every year Around 10,000 chemistry postgraduate students graduate every year India: Growing pharma market

20. - 19 - IT & ITeS India topped the A.T. Kearney Global Services Location Index 2009, beating 49 other countries of the world, emerging to be the destination of choice as an offshoring location of global IT/ITeS powerhouses Revenues by segment – Indian IT industry

21. - 20 - India’s share in the global market has increased to four per cent in the IT segment and close to 12 per cent in ITeS in 2008-09. India has maintained its position as the preferred outsourcing destination; Indian IT/ITeS companies are now offering a global delivery model, at par with leading global standards. India offers low costs, technical and language skills, abundant skilled pool, mature industry players and supportive government policies. Sources: ITeS: Industry profile, April 2009, CRIS INFAC IT & ITeS - ADVANTAGE INDIA Financial attractiveness of top 5 global services locations CountryIndex on a scale of 4 India3.13 China2.59 Malaysia2.76 Thailand3.05 Indonesia3.23 Source: A T Kearney Global Service Location index 2009

22. - 21 -  The processed food market in India is at an early stage with low penetration and offers huge opportunities.  In the 2004-2007 period: – Value of food processing grew from US$57 bn to US$75 bn – Number of registered operating units increased from 24,000 to 25,725. Source: Flavors of incredible India, Ernst & Young, 2009 FOOD PROCESSING Growth in output of processed food (US$ billion)

23. - 22 - FOR INFORMATION ON INDIAN BUSINESS AND ECONOMY, PLEASE VISIT www.ibef.org