1. Shortage of Natural Resources The Scientific Innovative Power coming from India Dr. Brian W Tempest Chief Mentor & Executive Vice Chairman of the Board Ranbaxy Laboratories Limited, Delhi, India St. Gallen Symposium, St. Gallen, Switzerland Friday, 1 st June 2007

2. Asia’s Share of the World GDP (at PPP in %) Year 1870 1913 1950 1973 2001 China 17% 9% 5% 5% 12% India 12% 8% 4% 3% 5% Japan 2% 3% 3% 8% 7% Rest of Asia 7% 5% 7% 9% 13% Total Asia 38% 25% 19% 25% 37% Source – WEF - was 59% in 1820 with India 16%, China 33%

3. Davos Source – FT

4. The Productivity Advantage Indiaa usa Pharma view USA 1 chemist Better education x 1.3 1 chemist 70 hours/week Longer working time x 1.3 50 hours/week $ 800 monthly Lower cost x 20 $ 12,000 monthly Sources: IPHMR Conferences, New Delhi August 2004

5.  Japan - by 2050 36% > 65 years from 19% in 2005  China - one child families, get older before becoming wealthy - labour costs will rise owing to labour shortage  India - India already has the youngest labour force in the world - source of the extra needed global workforce - India will pass China in total population in 2030 - By 2013 India will have more young workers 20-24 than China The Ageing Advantage Working Population, 15-64 years In millions

6. The R&D Investment Advantage Most attractive R&D Investment locations: Ranked 3 rd - China, USA, India, Japan & UK Source – UNCTAD 2005 Reasons why India:  Qualified Scientists & Engineers  Global India players with Alliances  English speaking  TRIPs compliant – first patent March 2006  IIT, IIM & other scientific institutions Source – UNCTAD 2005

7.  4 th largest reservoir of Scientific Manpower (2 nd largest English speaking)  3m graduates pa, 115k MSc Chemistry (3.5k UK), 215k Eng (222k USA) Physics the most popular subject  Lead by a Nuclear Scientist as President – remote sensing satellite technology, 1/6 countries  PCT application ranked 3 rd – Kor, Chi, Ind, Sin, RSA  “US & Europe will not dominate Science, Maths, IT industries” – Mr. Bill Gates The Science Natural Resources Advantage

8. Science Natural Resources in EU “This means that when pupils are in a science laboratory their experience is unsafe, unsatisfactory or uninspiring for 65% of the time.” Source: Royal Society of Chemistry, Policy Bulletin – Spring 2006 UK “A” Level entries:Closed UK University 2000 2005 % change Chemistry Departments: Physics : 32,059 28,119 -12% Dundee Kings Chemistry: 40,856 38,851 -5% Surrey Exeter Maths: 67,036 52,897 -21% Lancaster Queen Mary Computing: 19,099 7,242 -62% Source: Daily Mail – 11 August 2006 Only pupils at private schools can take physics, chemistry & biology separately Source: Times, 9 th November 2006

9. Number of Higher Education Institutions 05/06 18,123 +59% 00/01 11,412 90/01 5,932 80/01 4,861 Source: Indian University Grants Commission Science Natural Resources in India Number of Students enrolled in Higher Education Institutions 05/06 10,500 +40% 00/01 7,500 90/01 4,000 80/01 3,000 Source: Indian University Grants Commission Number of Institutions courses 05/06 99/00 Pharmacy 1478 669 +120% Medicine 229 174 +32% Physiotherapy 205 52 +294% Source: Pavan Agarwal (2006) based on data from professional councils PhD Degree awarded in Science 03/045408+44% 00/013734 90/012950 (USA 03/04 25,000) Source: Indian University Grants Committee

10. The Science Natural Resources Advantage Engineers/Science graduates p.a – India 0.7m, China 0.5m, EU 0.5m, USA 0.4m, Japan 0.3m

11.  Microsoft Global Development Centre (GDCI)  Microsoft Global Services (MGSI)  Microsoft Global Technical Support Centre (GTSC)  Microsoft Systems Research (MSRI)  Microsoft India Development Centre (MIDC) Investment by Microsoft in India

12. The Pharma Plants Advantage Active Pharmaceuticals Facility, MohaliDosage Forms Facility, Paonta Sahib

13. Generics – API’s USA DMF filings by India 1990 1 1995 4 2000 36 2004 187 2005 262 Source: Crisil / US FDA / J P Morgan % Share of USA DMF filings India China 2004 27% 9% 2005 37% 10% 2006 44% 14% Q1’07 48% 17% Source: US FDA / J P Morgan, 2 nd May 2007 Source: US FDA, Credit Suisse

14. Generics Rankings Source: UBS, Businessworld, 30 th October 2006

15. Discovery – Local vendors available in India to Support Discovery Research Vendor Availability India China Analog preparation4125 Combinatorial chemistry377 Analytical chemistry377 Structural chemistry265 Assay development262 Computer drug design2613 High throughput Screening112 Bio informatics137 Genetically modified animals03 Basic molecular biology1325 Source – BCG, ‘Looking Eastwards, September 2006’ * Out of 90 vendors in October 2005

16. A race to prosperity

17. The Tempest Crystal Ball – India & China Post TRIPs new products will dry up in India by 2008. Under this pressure Indian companies will adopt different business models The global generic industry will be dominated by India Discovery companies will continue to be attracted to India China will be perceived to be stronger in biology/ toxicology Alliances between Western Biotech and Indian companies will expand It will be India & China - and not India or China.

18. Potential Challenge – Asian Flu* *50% of world chickens bred in Asia

19. Potential Challenge – Infrastructure Source – Manmohan Singh “Our greatest potential will be realised only if we can ensure that our Infrastructure does not become a severe and critical handicap”

20. CO 2 emission - % of World total in 1990-2000 USA23% EU 2517% China14% Russia7% Japan5% India4% – source: WRI, EIA Potential Challenge – Climate Change

21. Asia economic strength is returning to levels seen in the past Many advantages for India – Demographics, Education India is a global strategic asset for developed markets Some “Challenges” – infrastructure, climate change The current feeling in Indian Boardrooms is that a turning point has been reached, a tipping point has been passed and India’s time has arrived India is a rich location for future alliances MNCs will dip in& out of India & China, using their individual strengths “China & India represent the future of Asia and quite possibly the future for the global economy” – Steve Roach, Morgan Stanley Summary The Scientific Innovative Power coming from India

22. Thank You