India Country Profile

INDIA

Country Profile

Politics

Economy

Trade & Industries

General Profile Total area 3,287,263 sq km Population 1,205,073,612 (July 2012 est.) 2007 2008 2009 2010 2011 Growth World Population YoY (in billions) 6.6 6.7 6.8 6.9 7.0 1% Government type federal republic Chief of state Mr Head of Mr. government Capital New Climate varies from tropical monsoon in south to temperate in north Hindi 41%, Bengali 8.1%, Telugu 7.2%, Marathi 7%, Tamil 5.9%, Urdu 5%, Language Gujarati 4.5%, Kannada 3.7%, Malayalam 3.2%, Oriya 3.2%, Punjabi 2.8%, Assamese 1.3%, Maithili 1.2%, other 5.9% (capital) 21.72 million; Mumbai 19.695 million; Major City 15.294 million; Chennai 7.416 million; Bangalore 7.079 million (2009)

Economy Profile 2009 2010 2011

World GDP Real -0.8% 5% 3.6% Growth World GDP (in 58.1 63.3 70.2 Trillions) IndiaGDP Real 6.8% 10.1% 7.8%

Growth Profile General GDP $1.843 trillion (2011 est.)

GDP – Per capita $3,700 (2011 est.) Chapter: Chapter:

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agriculture: 18.1% GDP – Composition industry: 26.3% by sector services: 55.6% (2011 est.) Inflation 6.8% (2011 est.) Indian rupees (INR) per US dollar - Exchanges Rates 44.64 (2011 est.)  Information Technology  Information Technology Enabled Services  Telecommunications  Electronics and hardware  Automobiles  Pharmaceuticals and biotechnology  Consumer durables  Retail Primary Economy  Textiles Sector  Infrastructure  Construction  Airlines  Hospitality  Power  Oil and natural gas  Fertilizers and chemical

Unemployment 9.8% (2011 est.)

Rate

Economy Profile Economy Chapter: Chapter:

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Ports and Chennai, Jawaharal Nehru Port, Kandla, Kolkata (Calcutta), Mumbai (Bombay), Terminals Sikka, Vishakhapatnam International International Airport (Delhi), Chennai International Airport (Chennai), Chhatrapati Shivaji International Airport (Mumbai), Netaji Airports Subhash Chandra Bose International Airport (Calcutta) 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 Election results 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

Menteri/ Departemen Nama Pejabat Prime Minister and also In-Charge : Dr. Manmohan Singh of the Ministries/Departments viz: Ministry of Personnel, Public Grievances and Pensions Ministry of Planning Department of Atomic Energy Minister of Finance : Shri Pranab Mukherjee Minister of Agriculture and Food : Shri Processing Industries Minister of Defence : Shri AK Antony Minister of Home Affairs : Shri P. Chidambaram Minister of Railways : Shri Minister of External Affairs : Shri SM Krishna Minister of Micro, Small and : Shri Medium Enterprises Minister of Earth Sciences : Shri Vilasrao Deshmukh Minister of Science and Technology Ministry Name Minister of Health and Family : Shri Welfare Minister of Power : Shri Sushil Kumar Shinde Minister of Corporate Affairs : Shri M. Minister of New and Renewable : Dr. Energy Minister of Petroleum and Natural : Shri S. Gas Minister of Urban Development : Shri Minister of Overseas Indian : Shri Affairs

Ministry of Steel : Shri

Minister of Drinking Water and : Shri. Sanitation Minister of Rural Development Minister of Information and : Smt. Broadcasting Minister of Labour and : Shri

Employment Ports and Terminals Ports and Minister of Human Resource : Shri

Development, Chapter: Chapter:

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Minister of Communications and Information Technology Minister of Textiles : Shri Minister of Commerce and Industry Minister of Road Transport and : Shri CP Joshi Highways Minister of Housing and Urban : Kum. Selja Poverty Alleviation and Minister of Culture Minister of Tourism : Shri Minister of Shipping : Shri GK Vasan Minister of Water Resources and : Shri Pawan K. Bansal Minister of Parliamentary Affairs Minister of Panchayati Raj and : Shri V. Kishore Chandra Minister of Tribal Affairs Deo Minister of Chemicals and : Shri MK Alagiri Fertilizers : Shri Minister of Minority Affairs and : Shri Salman Khursheed Minister of Law and Justice Ministry of Heavy Industries & : Shri Public Enterprises Minister of Civil Aviation : Shri

Ministry Name Ministry Chapter: Chapter:

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All India Anna Dravida Munnetra Kazhagam or AIADMK [J. JAYALALITHAA]; All India Trinamool Congress or AITC []; or BSP [MAYAWATI]; Bharatiya or BJP []; Biju or BJD []; Communist Party of India or CPI [A.B. BARDHAN]; Communist Party of India- Marxist or CPI-M [Prakash KARAT]; Dravida Munnetra Kazhagam or DMK Political parties [M.KARUNANIDHI]; or INC []; and leaders Janata Dal (United) or JD(U) []; Nationalist Congress Party or NCP [Sharad PAWAR]; or RJD []; Rashtriya 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 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 India 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. Overview 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. 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. Trade Policy 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. Political parties and leaders and parties Political Investment Investments in Bank Fixed Deposits (FD)

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

5 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 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 Policy Investment Performance during bullish and bearish phases

Fund Managers performance with the fund's operations Chapter: Chapter:

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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 Investment Policy Investment repatriable. Investment can be done in Indian financial institutions including

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

7 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.

Investment Policy Investment Chapter: Chapter:

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National

Priority . Achieve universal primary education . Reduce child mortality . Improve maternal health . Combat HIV/AIDS, Malaria and other diseases Development . Ensure environmental sustainability Goals 2015 . Develop a global patnership for development Vision . 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

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, International IFC, IFRCS, IHO, ILO, IMF, IMO, IMSO, Interpol, IOC, IOM, IPU, ISO, ITSO, organization ITU, ITUC, LAS (observer), MIGA, MONUSCO, NAM, OAS (observer), participation 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 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 India Potential 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 rity 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 Prio National paperwork required.

Chapter: Chapter:

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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 Trade 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 Opportunities 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.

Opportunities Trade In the presence of the huge population it gives scope to all other sectors also such as education , medical , agriculture and various other industries. Chapter: Further as India is one of the fastest growing economy it also give 1

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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 Opportunities Trade 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. Chapter: 1

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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. textiles, chemicals, food processing, steel, transportation equipment, cement, Main Industry mining, petroleum, machinery, software, pharmaceuticals Industry Type Name of the company Reliance Industries Ltd Oil & Gas Operation Oil & Natural Gas Coop Indian Oil Tata Motor Capital Good Sterlite Industries Bajaj Auto

Steel Authority of India Materials Tata Steel Biggest Hindalco Industries Company Foot Drink & Tobacco ITC National Thermal Power Utilities Gail (India) Telecomunication Bharti Airtel MMTC Trading Company Adani Export Household & Personal Product Hindustan Lever Limited Construction Grasim Industries Wipro Business Service & Supplier Infosys Technologies

Main Industry Main Chapter: Chapter: 1

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