Navigating Your Way to Business Success in India


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"Navigating Your Way to Business Success in India" is a seminar hosted by the Columbus, Ohio, law firm of Kegler, Brown, Hill & Ritter on March 10, 2011.

Topics included:
Legal Issues
Cultural Considerations
Case Studies

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Navigating Your Way to Business Success in India

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  2. 2. Central ohio business development Mission to india<br />
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  18. 18. Photos Courtesy of James Schimmer, Director, Franklin County Economic Development & Planning Department<br />
  19. 19. GAME CHANGERS <br />INDIA’S SECOND DECADE OF THE 21ST CENTURY<br /> Kegler Brown, Columbus, Ohio – March 2011<br />
  20. 20. Afghanistan<br />POK<br />China<br />Pakistan<br />Nepal<br />Bhutan<br />Bangladesh<br />India<br />Myanmar<br />
  21. 21. 26/11 Terrorist Attack on Mumbai<br />
  22. 22. $1.7 Trillion in Infrastructure Required Over Next 5 Years<br />20,000 Km of road projects<br />150,000 MW of new power plants<br />Upgrade of 25 existing airports<br />A new air force<br />Greenfield development of 25 new airports<br />A deep water navy<br />12 new port/container projects<br />20,000 MW of nuclear power<br />
  23. 23. The Next North SeaKrishna-Godavari Gas Discovery<br />Largest Refinery in the World Jamnagar<br />
  24. 24. The Next North SeaKrishna-Godavari Gas Discovery<br />
  25. 25. Organized Retail Enters IndiaUnshackling India’s Farm-to-Market Supply Chain<br />
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  32. 32. 300 Million Middle Class<br />
  33. 33. Manufacturing Hub of South AsiaSkilled Manpower and a Massive Domestic Market<br />
  34. 34. Special Economic Zones (SEZs)<br />
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  36. 36. Can India Sustain its Competitive Edge ?<br />PHARMACEUTICALS<br /> #1 in Generic Pharmaceuticals <br /> IPR Protections will need strengthening if India is to become the Innovation Nation of the 21st Century <br />
  37. 37. TELECOM<br />10 million new cell phone users each month!<br />But can transparency issues be overcome as new spectrum is allocated?<br />
  38. 38. INFORMATION TECHNOLOGY<br /><ul><li>ICT is still growing at impressive growth rates.
  39. 39. But will India adopt Intercept Policies that balance security and commercial interests? </li></li></ul><li>India’sCentury<br />
  40. 40. WHYINDIA ?<br />Coherent democracy; Pluralist/Secular<br /><ul><li>1/5th World’s Population; 2nd largest military in the world
  41. 41. Common Values: Ainst Terrorism, Trafficking, Narcotics
  42. 42. Ideological Partner re: Nepal, Sri Lanka, Bangladesh, China
  43. 43. Common Law Judicial System
  44. 44. 2nd largest number of Doctors, Engineers, PhDs in the world
  45. 45. 100,000 Students to U.S. Each Year
  46. 46. 1.8 mil Americans of Indian Origin
  47. 47. Politically significant; Politically integrated
  48. 48. 54% of Indian Population is under the Age of 25</li></ul>Indo-U.S. Relations will Shape the Destiny of the 21st Century<br />
  49. 49. History in the Making <br /> Kegler Brown, Columbus, Ohio – March 2011<br />
  50. 50. Legal Intelligence andPractical Advice – India<br />Presented by Vinita Bahri-Mehra, Esq.March 10, 2011<br />
  51. 51. India-US: “Pas-Pas”<br />A “Star-Bucks” in Goa, India<br />
  52. 52. India-US: “Pas-Pas”<br />Self-Service<br />
  53. 53. India-US: “Pas-Pas”<br />You’re safe here, pal!<br />
  54. 54. India-US: “Pas-Pas”<br />Just do it.<br />
  55. 55. India’s FDI Regime<br />100% foreign investment permitted in most sectors on automatic basis except: <br />Banking (74%).<br />Telecom services (74%).<br />Civil Aviation (49%).<br />Insurance (49%).<br />Retail trading – Single Brand up to 51% with prior approval.<br />Certain sectors where FDI is prohibited:<br />Atomic Energy.<br />Lottery business.<br />Gambling and Betting.<br />Certain sectors where there are minimum capitalization requirements:<br />Non-banking financial services activity (certain activities – fee based and fund based).<br />Real estate construction and development projects.<br />
  56. 56. Entry Strategies For US Investors: As an Indian Company<br />A U.S. company can commence operations in India by incorporating a company under the Indian Companies Act, 1956, through:<br />(1) Joint Ventures; or<br /> (2) Wholly-Owned Subsidiaries.<br />Acquisition of shares/business assets of an existing Indian company.<br />Consider RBI’s pricing restrictions.<br />
  57. 57. As an Indian Company<br />“Private Limited Company” is the most preferred option.<br /> Subject to fewer regulatory compliances.<br /> Charter documents can be made adaptable to shareholders’ requirements.<br /> However, restrictions on transfer of shares and borrowings.<br />
  58. 58. As a Foreign Company<br />U.S. companies can set up their operations in India through:<br />(1) Liaison/Representative Office<br />(2) Project Office<br />(3) Branch Office<br />Each can undertake only specified activities.<br />Some other variants:<br />(1) Build-Operate-Transfer (BOT)<br />(2) Third-Party Outsourcing (BPO or KPOs)<br />Franchising/Distributions/Agency<br />Unincorporated Joint Ventures – “Association of Persons”<br />
  59. 59. Are non-compete and non-solicitation clauses applicable?<br />Contract Enforcement?<br />What is the tax incidence on profits and gains and whether any tax breaks are provided by government? Are repatriation of investments and profits allowed?<br />Are there any Labor issues to consider?<br />What should be done to protect one’s IP?<br />What law should govern the contract and which courts should have jurisdiction to adjudicate on disputes?<br />What mechanism of dispute resolution is preferable?<br />Key Legal Issues For Doing Business In India<br />
  60. 60. A. Non-compete/Non-solicitation<br />Every agreement by which anyone is restrained from exercising a lawful profession, trade or business is void. (Section 27 of the Indian Contract Act, 1872).<br />Non-compete and non-solicitation are such restrictive covenants.<br />Exception: Restrictive covenants that reasonably protect a party’s proprietary or commercial interest post-acquisition of a business with goodwill.<br />
  61. 61. Exception: A partial restriction, reasonable in terms of time, geography or other limitations.<br />Indian Courts tend to enforce a restrictive covenant operating “during term of employment” and not those “after the term of employment”.<br />Non-compete/Non-solicitation, cont. <br />
  62. 62. B. Contract Enforcement<br />Legal Jurisdiction: Drafting Choice of Law and Forum provisions is crucial. <br />Remedies: It’s advisable to negotiate and provide for a liquidated damages and/or penalty clauses in contracts as a safeguard.<br />Damages is the primary remedy for breach of contract. <br />
  63. 63. Contract Enforcement, cont. <br />Performance Guarantees and Bonding<br />Contract performance guarantee: Depending on the nature of the contract, your Indian customer/counterpart may request some kind of guarantee to ensure performance obligations.<br />Different Forms: These guarantees can be of different forms – usually referred to as bonds. Can include – standby irrevocable LOC, Bank guarantee, and contract surety bonds. <br />Clear Obligations: If a performance bond is provided, important to ensure that contract clearly states the performance obligations as well as note the specific conditions under which the bond can be enforced. <br />
  64. 64. Contract Enforcement, cont. <br />Practical Tips<br />Negotiations: Contracts negotiations can be expected to go more slowly in India – particularly if dealing with the Indian bureaucracy.<br />Different approaches to communication: Indian parties may not disagree with you directly about contractual issues. Instead they may suggest that matter can be discussed at another time or find some way to avoid an outright negative response. <br />Flexibility: It is recommended that US Co., build considerable flexibility into their approach so that prices and other contract conditions can be adjusted. <br />
  65. 65. C.Taxation in India<br />Dividends declared can be repatriated freely through an authorized Indian bank. <br />Dividends are tax-free in the hands of shareholders.<br />A distribution tax of 16 % is payable by company.<br />Corporate tax rate for foreign companies is 41.2%. For domestic companies, 30.99%.<br />Withholding tax on royalties/technical fees/interest income.<br />Domestic tax law – 10%.<br />Indo-US DTAA – 10% for right to use of any industrial, commercial or scientific equipment.<br />– 20% in any other case.<br />
  66. 66. The tax rate provision of domestic law could be utilized as it is less than DTAA.<br />Service tax rate is 10.3%.<br />Computed on the “Gross Amount” charged by the service provider. <br />Sales tax rate (CST & VAT). Varies from state to state, depending upon classification of goods. Varies from 0% to 12.5%.<br />Tax incentives are available during a limited time for 100% Export-Oriented Unit, under Software Technology Park Scheme and Special Economic Zones Units, etc.<br />Taxation in India, cont.<br />
  67. 67. Important Taxation Issues<br />India’s tax code has elaborate Transfer Pricing Regulations.<br />Introduced in 2000/ 2001 for regulating prices at which the international transactions between two related enterprises are undertaken.<br />Applicable only to international transactions wherein at least one party is a non-resident of India unlike UK and US where transfer pricing is applicable even to domestic transactions.<br />Onerous documentation requirements prescribed under Rule 10D of the Transfer Pricing Rules.<br />All entities having an aggregate value of international transactions in a financial year exceeding INR 15 crs (i.e. approx. US $3.3 mn) subject to compulsory transfer pricing scrutiny by the Indian tax authorities.<br />
  68. 68. Important Taxation Issues, cont.<br />The following methods prescribed for benchmarking international transactions:<br />Comparable Uncontrolled Price Method (“CUP”)<br />Cost Plus Method (“CPM”)<br />Resale Price Method (“RPM”)<br />Profit Split Method (“PSM”)<br />Transactional Net Margin Method (“TNMM”)<br />
  69. 69. Important Taxation Issues, cont.<br />Avoidance of Permanent Establishment (“PE”)status is critical.<br />PE Concept: A US company’s business profits that are deemed to accrue in India could be subject to Indian taxes, if such business, in part or whole, is carried through a PE in India. If the US company is liable to Indian taxes by virtue of having a PE, the extent of taxation would be confined to profits that can be attributed to such a PE. <br />
  70. 70. Important Taxation Issues<br />Circumstances that could include a PE are broadly classified under the following heads: <br />Basic Rule: Activities done through a fixed place of business. <br />Construction Rule: Performance of construction/installation/assembly activities or supervisory activities in connection with such activities for more than 120 days in any twelve month period.<br />Service Rule: Where a foreign enterprise through its employees or other personnel renders services in India for a period of 90 days or more.<br />Agency Rule: A dependent agent of a foreign enterprise through whom the business of the enterprise in whole or in part, is carried out in India. <br />
  71. 71. D. Employment Issues<br />Employment Agreement – Advisable to have a detailed document (not a one pager!), read in conjunction with the existing employment policies of the Company.<br />Compliance required of both Federal and State laws.<br />Important to identify locational advantages; Indian States have restrictions and relaxations.<br />
  72. 72. “Without cause” termination for “Workmen” may become subject to:<br />“Last come, first go”;<br />Some level of compensation based on years of service;<br />Sufficient notice to employee; and,<br />Employer issuing a release certificate. However, consider the following while issuing release:<br />Is there a possibility of breach of confidentiality?<br />Is there a possibility of a breach of a non-compete covenant?<br />Otherwise “At-Will”employment is recognized. <br /> Employment Issues, cont.<br />
  73. 73. E. Intellectual Property Enforcement<br />India is a member of the WIPO; signatory to major harmonization conventions and member of WTO.<br />Remedies for IP violation: Civil remedies (injunctions, damages, or accounts) as well as criminal penalties. However, criminal prosecution is available on in trademark and copyright cases, not in ones involving patents or designs. <br />Provisional Measures: Injunctions and ex-parte search warrants and seizes orders, known as “Anton Piller”orders, are available through the Indian Courts to stop infringements and to contain damages. <br />Fast-track System (specialized forums): Intellectual Property Appellate Board – Appeals on IP prosecution (patents). <br />
  74. 74. Intellectual Property Enforcement<br />Minimize IP Risks<br />“Airtight” Contractual provisions:<br />Explicit obligations to ensure that the “receiving” party will protect “disclosing” party’s IP.<br />Business practices:<br />From the beginning, have a method in place to ensure controlled use of IP rights by the local associates.<br />Define IP violation clause.<br />Conduct Regular IP Audit.<br />
  75. 75. Indian IP Laws do not provide for automatic assignments.<br />Golden Rule: Advisable to have a covenant to assign IP in contracts and to obtain Deed of Assignment where required.<br />Intellectual Property Rights.<br />
  76. 76. Intellectual Property Rights, cont.<br />Specific IP issues and related law:<br />Patent and Design: Inventor/Author is owner.<br />Formal assignment is necessary.<br />Term: 20 years from date of filing.<br />Registration of “Product Patents” allowed.<br />Copyright: IP work is made in course of author’s employment under contract of service, employer is the first owner of copyright therein.<br />Subtle difference from the U.S. concept of “works for hire”.<br />Term: 60 years from date of publication.<br />Possible Dispute: Work made in course of the author’s employment as against work made outside the course of employment.<br />Therefore, emphasis is on “scope of employment”.<br />
  77. 77. Trademarks and Service Marks:<br />Trademark protection extends to shape of goods, packaging and combination of colors.<br />Statutory infringement and common law remedy of passing off is available.<br />Trade Secrets:<br />No specific Indian legislation for statutory protection of trade secrets or confidential information. However, Courts (several precedents) specifically enforce confidentiality agreements through mandatory injunctions.<br />Intellectual Property Rights, cont.<br />
  78. 78. Indian Courts follow customary Private International Law rules.<br />Choice of law made by parties is acceptable.<br />Parties may also choose which court will have jurisdiction.<br />Subject to public policy, courts recognize and enforce foreign laws.<br />It is possible to split contract, to allow different parts to be governed by different laws.<br />Absent choice, courts determine proper law of contract.<br />Law with the closest connection to transaction.<br />G. Jurisdiction and Laws Governing Contract<br />
  79. 79. Caveat:<br />However, certain issues may be subject to a law different from one agreed upon by parties.<br />For example: IP transfer, registration, protection in vendor territory, real estate, labor laws, bankruptcy, enforcement of foreign judgment/award.<br />Jurisdiction and Laws Governing Contract, cont.<br />
  80. 80. H. Dispute Resolution <br />Litigation vs. Arbitration<br />(i) Litigation-Enforcement of Foreign Judgment.<br />Judgments from courts in “reciprocating territories” can be enforced directly by filing before an Indian Court an Execution Decree.<br />The United Kingdom of Great Britain and Canada are noted as “reciprocating territories”.<br />Presently, U.S.A. is not declared as a “reciprocating territory”.<br />
  81. 81. Dispute Resolution, cont.<br />Judgments from “non-reciprocating territories”, such as the U.S.A, can be enforced only by filing a law suit in an Indian Court for a Judgment based on the Foreign Judgment.<br />The foreign judgment is considered only as evidence.<br />Such a law suit is to be brought within 3 years of foreign judgment.<br />Likely a long and slow procedure as the Indian Courts are overburdened. <br />
  82. 82. Dispute Resolution, cont.<br />(ii) Arbitration-Enforcement of Foreign Arbitral Award.<br />India is a party to the New York Convention, 1958.<br />U.S. arbitral awards on commercial disputes are directly enforceable in India through foreign award being made a Decree of the court.<br />Indian Courts may grant preliminary injunctions and other protective orders pending international commercial arbitration.<br />An arbitration clause can avoid the time consuming and sometimes ineffective process of seeking damages through the civil courts in India. <br />
  83. 83. There are some internal barriers that might provide obstacles in doing business or establishing business in India. It is necessary to be cognizant about them in order to be well prepared. For example:<br />Corruption.<br />Poverty.<br />Infrastructure mess. <br />Understanding the changes in real estate.<br />Surfacing of stringent Corporate Governance.<br />Bureaucracy.<br />Negotiating style differences.<br />Practical Advice: Identify the Obstacles<br />
  84. 84. Things to Ponder<br />Analyze your long-term objectives and accordingly decide on Entry Strategies and related tax structuring.<br />Analyze and identify the region/state most appropriate for your business needs.<br />Do Business in India…the Indian Way: ‘Think Global, Act Local’<br />The Indianized Chinese<br />Kellogg's – no to cold cereals?<br />KFC – Tandoori Chicken preferred to the ‘KFC experience’<br />McDonalds – ‘McVeggie Burger’ & ‘McAloo Tikki’<br />Domino’s – ‘Pepper Paneer’ & ‘Chicken Chettinad’<br />Pizza Hut/Pizza Express – spicing it up<br />Due Diligence is the Key<br />Knowledge of Indian business and legal environment leads to steady growth.<br />
  85. 85. Legal Advice<br />This presentation is designed to provide an overview of a number of legal principles and considerations.<br />As each legal issue is fact dependent, this presentation should not be used or viewed as legal advice, and your legal counsel should be consulted on the application of your particular factual situation to the current law.<br />Copyright: 2010 Kegler, Brown, Hill & Ritter<br />
  86. 86. Thank You<br />Vinita Bahri-Mehra, Esq.<br />Kegler, Brown, Hill & Ritter Co., L.P.A.<br />65 E. State Street, Suite 1800<br />Columbus, Ohio 43215, USA<br />Direct Dial: 1 614 225 5508<br />Fax: 1 614 464 2634<br />Email:<br />Web Address:<br />
  87. 87. N A V I G A T I N G   Y O U R   W A Y   T O   B U S I N E S S   S U C C E S S   I N   I N D I A<br />March 2011<br />Anil Bhalla<br />Vice Chairman, Investment Banking<br /><br />T: 212 622 4605<br />S T R I C T L Y   P R I V A T E   A N D   C O N F I D E N T I A L<br />
  88. 88. English_General<br />This presentation was prepared exclusively for the benefit and internal use of the J.P. Morgan client to whom it is directly addressed and delivered (including such client’s subsidiaries, the “Company”) in order to assist the Company in evaluating, on a preliminary basis, the feasibility of a possible transaction or transactions and does not carry any right of publication or disclosure, in whole or in part, to any other party.This presentation is for discussion purposes only and is incomplete without reference to, and should be viewed solely in conjunction with, the oral briefing provided by J.P. Morgan.Neither this presentation nor any of its contents may be disclosed or used for any other purpose without the prior written consent of J.P. Morgan.<br />The information in this presentation is based upon any management forecasts supplied to us and reflects prevailing conditions and our views as of this date, all of which are accordingly subject to change.J.P. Morgan’s opinions and estimates constitute J.P. Morgan’s judgment and should be regarded as indicative, preliminary and for illustrative purposes only.In preparing this presentation, we have relied upon and assumed, without independent verification, the accuracy and completeness of all information available from public sources or which was provided to us by or on behalf of the Company or which was otherwise reviewed by us.In addition, our analyses are not and do not purport to be appraisals of the assets, stock, or business of the Company or any other entity.J.P. Morgan makes no representations as to the actual value which may be received in connection with a transaction nor the legal, tax or accounting effects of consummating a transaction.Unless expressly contemplated hereby, the information in this presentation does not take into account the effects of a possible transaction or transactions involving an actual or potential change of control, which may have significant valuation and other effects.<br />Notwithstanding anything herein to the contrary, the Company and each of its employees, representatives or other agents may disclose to any and all persons, without limitation of any kind, the U.S. federal and state income tax treatment and the U.S. federal and state income tax structure of the transactions contemplated hereby and all materials of any kind (including opinions or other tax analyses) that are provided to the Company relating to such tax treatment and tax structure insofar as such treatment and/or structure relates to a U.S. federal or state income tax strategy provided to the Company by J.P. Morgan. J.P. Morgan's policies on data privacy can be found at <br />J.P. Morgan’s policies prohibit employees from offering, directly or indirectly, a favorable research rating or specific price target, or offering to change a rating or price target, to a subject company as consideration or inducement for the receipt of business or for compensation.J.P. Morgan also prohibits its research analysts from being compensated for involvement in investment banking transactions except to the extent that such participation is intended to benefit investors.<br />IRS Circular 230 Disclosure: JPMorgan Chase & Co. and its affiliates do not provide tax advice. Accordingly, any discussion of U.S. tax matters included herein (including any attachments) is not intended or written to be used, and cannot be used, in connection with the promotion, marketing or recommendation by anyone not affiliated with JPMorgan Chase & Co. of any of the matters addressed herein or for the purpose of avoiding U.S. tax-related penalties.<br />J.P. Morgan is a marketing name for investment banking businesses of JPMorgan Chase & Co. and its subsidiaries worldwide. Securities, syndicated loan arranging, financial advisory and other investment banking activities are performed by a combination of J.P. Morgan Securities Inc., J.P. Morgan plc, J.P. Morgan Securities Ltd. and the appropriately licensed subsidiaries of JPMorgan Chase & Co. in EMEA and Asia-Pacific, and lending, derivatives and other commercial banking activities are performed by JPMorgan Chase Bank, N.A.J.P. Morgan deal team members may be employees of any of the foregoing entities.<br />This presentation does not constitute a commitment by any J.P. Morgan entity to underwrite, subscribe for or place any securities or to extend or arrange credit or to provide any other services.<br />N A V I G A T I N G   Y O U R   W A Y   T O   B U S I N E S S   S U C C E S S   I N   I N D I A<br />
  89. 89. India – Economic Profile<br />1<br />India – A Glass Half Full?<br />11<br />Opportunities for Foreign Companies in India<br />12<br />Best Practices for Foreign Companies doing Business in India<br />15<br />India’s Financial Framework<br />18<br />N A V I G A T I N G   Y O U R   W A Y   T O   B U S I N E S S   S U C C E S S   I N   I N D I A<br />Basic Regulations in India<br />20<br />J.P.Morgan in India<br />22<br />
  90. 90. India at a glance<br />Overview<br />Key statistics<br /><ul><li>Located in South Asia, it is seventh largest country by geographical area and the second most populous country
  91. 91. India is the world’s largest democracy
  92. 92. World’s twelfth largest economy at market exchange rates
  93. 93. Fourth largest economy in the world on purchasing power basis after USA, China and Japan
  94. 94. Strong legal system with a fair and independent judiciary. Largely based on English law
  95. 95. Well developed capital markets — Bombay Stock Exchange is Asia’s oldest stock exchange
  96. 96. Strong domestic consumption with a personal disposable income growth CAGR of 13.8% (2009-14E)
  97. 97. Important cities in India:
  98. 98. Mumbai (Key commercial center / financial capital)
  99. 99. New Delhi ( Political capital)
  100. 100. Bangalore, Hyderabad, Chennai, Pune and Calcutta (other important cities)
  101. 101. These cities account for over 80% of business establishments in India
  102. 102. There are over 3,000 MNCs operating in India including a number of small companies in the IT/BPO space
  103. 103. Indian banking sector was not affected during the recent credit crisis and has emerged much stronger and efficient than before</li></ul>I N D I A   –   E C O N O M I C   P R O F I L E<br />1<br />
  104. 104. Huge growth potential with opportunities across sectors<br />A young population<br />Savings & capital formation<br />Rising per capita income (US$)<br />(Median Age–2010)<br />(as % of GDP)<br />I N D I A   –   E C O N O M I C   P R O F I L E<br />Source: CSO, UN<br />2<br />
  105. 105. India has evolved dramatically over the last two decades…<br />Country Overview<br />Real GDP growth of India (% y-o-y)<br /><ul><li>11th largest economy in terms of GDP. 4th largest on PPP basis after US, China and Japan
  106. 106. Stable and institutionalized democratic political system
  107. 107. Established administration, commercial, legal, accounting & banking systems
  108. 108. Third largest English speaking manpower base in the world
  109. 109. R&D base for over one hundred Fortune 500 companies
  110. 110. Vibrant capital market with more than 5,000 listed Companies</li></ul>V-Shaped recovery<br />8%<br />6.1%<br />…but exports have become increasingly important<br />Domestic demand remains the key driver for GDP growth<br />I N D I A   –   E C O N O M I C   P R O F I L E<br />GDP (US$bn)<br />The vast majority of manufacturing output is now exported<br />Domestic demand % GDP<br /> Source: Global Insight, IMF<br />Source: RBI<br />3<br />
  111. 111. Tracing the Growth– 1500 to 2050<br />I N D I A   –   E C O N O M I C   P R O F I L E<br />Source: Angus Maddison (OCDE)<br />4<br />
  112. 112. % of India’s imports in 2009-10<br />% of India’s exports in 2009-10<br />India’s trade has grown 16% annually since 2005<br />Current trade flows<br />EU<br />18%<br />EU<br />15%<br />US<br />11%<br />UAE<br />7%<br />China & HK<br />12%<br />UAE<br />13%<br />US<br />6%<br />China & HK<br />10%<br />Singapore<br />4%<br />Singapore<br />2%<br />I N D I A   –   E C O N O M I C   P R O F I L E<br />India trade volumes (US$ bn)<br />5<br />
  113. 113. Services and Industrial Production constitute a dominant share of the GDP<br />GDP by industry–Services driven economy<br />Industrial production growth<br />I N D I A   –   E C O N O M I C   P R O F I L E<br />Index sa, Sep 2008 =100<br />Index sa, Sep 2008 =100<br /> Source: Global Insight, IMF<br />6<br />
  114. 114. Other key financial metrics<br />Forex reserves are very healthy<br />FDI flows have been very robust<br />FDI Inflow ($Bn)<br />Forex Reserves ($Bn)<br />Source: Department of Industrial Policy & Promotion, India Govt<br />India’s debt remains relatively low<br />I N D I A   –   E C O N O M I C   P R O F I L E<br />Total external debt to foreign exchange reserves (%)<br />Total external debt as of Dec-10 (US$bn)<br />Source: Ministry of Finance, Government of India and Reserve Bank of India, Moody’s Statistical Handbook<br />* India’s external debt is as of Mar-09, Mar-10 and Mar-11E<br />7<br />
  115. 115. Fiscal Deficit - an area of concern<br />The government seems committed to tackling India’s Achilles heel<br />Central Government Fiscal Deficit<br /> % of GDP<br />I N D I A   –   E C O N O M I C   P R O F I L E<br />Refers to fiscal year; forecasts for 2012 and 2013 are as per the 13th finance commission which the government has pledged to implement<br />8<br />
  116. 116. Congress and Third Front Coalition <br />1991–1998<br />BJP led NDA coalition<br />1998–2004<br />Liberalization has become invariant to political formulation<br />FDI Inflows ( $MM)<br />Congress led UPA coalition<br />2004–till date <br />I N D I A   –   E C O N O M I C   P R O F I L E<br /><ul><li>Focus on speeding up reforms : Disinvestment
  117. 117. Opening up more sectors for investments
  118. 118. Public- Private partnerships
  119. 119. Infrastructure a key area
  120. 120. Boost to regional trade
  121. 121. Opening up of Insurance and telecom sectors further
  122. 122. Rapid growth in key infrastructure sectors through private sector participation
  123. 123. Privatization of large state owned enterprises
  124. 124. FDI caps raised for the key sectors
  125. 125. Opening of most sectors to majority foreign holding, except defense and railways
  126. 126. De-licensing of industry and foreign trade
  127. 127. Foreign investment limits raised in key sectors
  128. 128. De-regulation of the petroleum sector
  129. 129. Opening up of the insurance sector to domestic and foreign competition</li></ul>9<br />
  130. 130. Infrastructure will be a key enabler of future growth<br />Infrastructure investment required<br /><ul><li>Indian economy has capacity to continue to expand significantly
  131. 131. Investment in infrastructure required to sustain India’s economic progress
  132. 132. Major government focus in Energy and Transportation
  133. 133. Investment in infrastructure growing due to:
  134. 134. Increased political commitment
  135. 135. Linking of economic benefits from infrastructure
  136. 136. Encouraging private sector participation
  137. 137. Private sector actively involved in telecommunications, commercial and industrial investments
  138. 138. Significant opportunity for U.S. companies
  139. 139. U.S. is one of India’s largest trading partners
  140. 140. Bilateral merchandise trade greater than $40bn
  141. 141. However hurdles remain...</li></ul>Future infrastructure investment<br />I N D I A   –   E C O N O M I C   P R O F I L E<br />Projected spending from FY07-FY12<br />Expect US$500bn+ in selected infrastructure segments<br />Source: PwC–“Infrastructure in India”<br />Source: 11th 5 year Plan–Indian Government and PwC<br />10<br />
  142. 142. India – Economic Profile<br />1<br />India – A Glass Half Full?<br />11<br />Opportunities for Foreign Companies in India<br />12<br />Best Practices for Foreign Companies doing Business in India<br />15<br />India’s Financial Framework<br />18<br />N A V I G A T I N G   Y O U R   W A Y   T O   B U S I N E S S   S U C C E S S   I N   I N D I A<br />Basic Regulations in India<br />20<br />J.P.Morgan in India<br />22<br />
  143. 143. India – A Glass Half Full ?<br />Positives<br />Challenges<br /> Strong democratic institutions<br /> Demographic profile<br /> Sustainable reforms agenda<br /> High growth rates<br /> Balanced economy – domestic <br /> consumption and exports<br /> High domestic savings<br /> Large manufacturing as well as R&D base<br /> Well regulated banking sector<br /> Fiscal deficit<br /> High inflation<br /> Weak infrastructure<br /> Slow pace of reforms<br /> Legal system & labor laws <br /> need more focus<br /> Complex regulations<br /> Improvement in education system<br />I N D I A   –   A   G L A S S   H A L F   F U L L ?<br />11<br />
  144. 144. India – Economic Profile<br />1<br />India – A Glass Half Full?<br />11<br />Opportunities for Foreign Companies in India<br />12<br />Best Practices for Foreign Companies doing Business in India<br />15<br />India’s Financial Framework<br />18<br />N A V I G A T I N G   Y O U R   W A Y   T O   B U S I N E S S   S U C C E S S   I N   I N D I A<br />Basic Regulations in India<br />20<br />J.P.Morgan in India<br />22<br />
  145. 145. Active promotion of foreign investments<br />FDI in India<br />FDI policy<br /><ul><li>The government came out with ‘Consolidated FDI Policy’ document in March 2010, to ensure a more transparent regulatory framework
  146. 146. With the liberalization of the foreign investment restrictions, the emphasis is now shifting to accelerating investments by reducing bureaucratic hurdles and regulatory uncertainties
  147. 147. Sectors such as services, IT, telecom, housing and construction have attracted maximum FDI over the last 10 years</li></ul>100% FDI through automatic route<br /><ul><li>Power generation
  148. 148. Highways, ports, new airports & harbours
  149. 149. Townships, residential, construction & SEZs/ Industrial Parks
  150. 150. Hotels & tourism, roads
  151. 151. Technology
  152. 152. Petroleum & natural gas
  153. 153. Metals & mining
  154. 154. Coal (for steel, iron, cement and for captive mining)</li></ul><100% FDI through automatic/ approval route<br />Up to 74%<br />Up to 49%<br />Up to 26%<br />Distribution of FDI across sectors (FY00–FY10)<br /><ul><li>Private sector banking
  155. 155. Telecom
  156. 156. Airlines
  157. 157. Insurance
  158. 158. Print media</li></ul>O P P O R T U N I T I E S   F O R   F O R E I G N   C O M P A N I E S   I N   I N D I A<br />Others 29%<br />Services 22%<br />Electrical equipments 2%<br />Computer hardware& software 9%<br />Chemicals 2%<br />Prohibited sectors<br /><ul><li>Real estate
  159. 159. Retail trading (multi-brand)
  160. 160. Agriculture
  161. 161. Atomic energy
  162. 162. Gambling & betting
  163. 163. Lottery business</li></ul>Petroleum & natural gas 2%<br />Telecom 8%<br />Metallurgical inds. 3%<br />Housing/Real estate 8%<br />Automobile 4%<br />Construction activities 7%<br />Power 4%<br />Total = US$113bn<br />Source: Reserve Bank of India<br />Notes: Figures for FY10 includes data till Jan-10 <br />12<br />
  164. 164. Health Care<br />IT/ITES<br />Retail<br />Media<br /> Infrastructure<br />Auto<br />Financial Services<br />Telecom<br />Opportunities for Business<br />O P P O R T U N I T I E S   F O R   F O R E I G N   C O M P A N I E S   I N   I N D I A<br />13<br />
  165. 165. Entry strategy for an MNC<br />Options<br />As a Foreign Company<br /><ul><li>Liaison / Representative Office: Liaison offices can be set up to play a limited role of information exchange, to promote export/import from/to India & also facilitate technical/financial collaboration between parent company and Indian companies
  166. 166. Project Office: Foreign companies planning specific projects can set up temporary project/site offices. No RBI approval required. Cannot undertake or carry on any activity which is not related to the execution of the project
  167. 167. Branch Office: Foreign companies engaged in trading or manufacturing can setup branch offices post obtaining RBI approval. Scope of activities are defined by RBI in its approval
  168. 168. Joint Venture or technical/trademark license: Foreign company with an Indian joint venture requires a no objection certificate from such Indian company and FIPB approval
  169. 169. Purchase of Shares or Direct Investment in Local Company: Approval required from Foreign Investment Promotion Board excluding sectors permitted to proceed via Automatic Approval Route
  170. 170. Wholly Owned Subsidiary (WOS): i.e. private limited company. FIPB approval needed
  171. 171. Public limited company: Recent norm of minimum 25% public holding in all listed Indian entities. To be implemented over the next 3 years</li></ul>As an Indian Company<br />O P P O R T U N I T I E S   F O R   F O R E I G N   C O M P A N I E S   I N   I N D I A<br /><ul><li>Bank Accounts - Only Onshore Indian Rupee (INR) non interest bearing checking accounts allowed and Resident Indian Companies having export proceeds can open Onshore Foreign Currency Accounts
  172. 172. Foreign Currency – INR not convertible on Capital Account but fully convertible on Current Account</li></ul>14<br />
  173. 173. India – Economic Profile<br />1<br />India – A Glass Half Full?<br />11<br />Opportunities for Foreign Companies in India<br />12<br />Best Practices for Foreign Companies doing Business in India<br />15<br />India’s Financial Framework<br />18<br />N A V I G A T I N G   Y O U R   W A Y   T O   B U S I N E S S   S U C C E S S   I N   I N D I A<br />Basic Regulations in India<br />20<br />J.P.Morgan in India<br />22<br />
  174. 174. Industry Best Practices<br />Credit & Surplus Cash<br /><ul><li>Optimum level of capital – Identify sources for borrowings on shore and off shore for working capital / capex/ imports and exports
  175. 175. Credit- Reliance on intercompany for Capex (ECB) and local borrowings for working capital – combination of Short term loans , overdrafts and FX lines.
  176. 176. Identify exact requirements before borrowing – export loans and import buyers credit are available in foreign currency with pricing pegged to libor – hence , works out cheaper than local INR borrowing. Overall blended cost can be reduced substantially.
  177. 177. Surplus funds : there is no interest on current account, however, banks are permitted to offer short terms deposits starting from 7 days.
  178. 178. Other alternatives for parking short term funds- liquid funds/ treasury funds investing in AAA rated securities.
  179. 179. USD balances cannot be placed as deposits</li></ul>B E S T   P R A C T I C E S   F O R   F O R E I G N   C O M P A N I E S   D O I N G   B U S I N E S S   I N   I N D I A<br />15<br />
  180. 180. … Industry Best Practices<br />Local Banking<br /><ul><li>No interest on current accounts
  181. 181. No notional pooling/ netting off
  182. 182. Usually, companies open an INR account and a Foreign currency – EEFC account for export proceeds
  183. 183. Park funds in EEFC and convert as and when required
  184. 184. Use the INR account for effecting local payments- vendor, tax, payroll, others
  185. 185. Huge shift towards electronic – high and low value platforms
  186. 186. Visibility and control through internet banking platforms
  187. 187. Use of ERP/ other systems to integrate with JPM Access and use for reconciliation/ generation of payments
  188. 188. FX exposures- most companies are using simple forward contracts to hedge their exposures
  189. 189. Identify banks with electronic capabilities and a comprehensive product/ services</li></ul>B E S T   P R A C T I C E S   F O R   F O R E I G N   C O M P A N I E S   D O I N G   B U S I N E S S   I N   I N D I A<br />16<br />
  190. 190. Bilateral funding options for Corporates<br />Local currency<br /><ul><li>Working capital funding (i.e. 364 days or lesser tenors)
  191. 191. Short term loans: Can be availed for various tenors up to 1 year (eg. 1 week, 3 months, 9 months etc)
  192. 192. Overdrafts: Dynamic funding account to meet temporary cash flow mismatches
  193. 193. INR term loans
  194. 194. To meet capital expansion or project funding needs. Typically from 3-7 years</li></ul>External Commercial Borrowings (ECB)<br /><ul><li>Regulated form of foreign currency borrowing for Indian companies
  195. 195. Refers to commercial loans in specified forms availed from non-resident lenders, including parent company
  196. 196. Forms of ECB: Bank loans, buyers’ credit, suppliers’ credit and securitized instruments (e.g. floating rate notes and fixed rate bonds, non-convertible, optionally convertible or partially convertible preference shares)
  197. 197. Minimum average maturity of 3 years for amounts upto US$20mm and 5 years for amounts above US$20mm and up to US$500mm
  198. 198. Subject to Reserve Bank of India (RBI) guidelines & restrictions on aspects such as end use, amount ($500mm per year) and tenor
  199. 199. ECB proceeds can be used for
  200. 200. Investment in certain sectors, overseas direct investment in Joint Ventures (JV)/ Wholly Owned Subsidiaries and is also permitted for first stage acquisition of shares in the disinvestment process and also in the mandatory second stage offer to the public
  201. 201. Use of ECB proceeds not permitted for on-lending, investment in capital market or acquisition of a domestic company, working capital, general corporate purpose and repayment of existing Rupee loans. Also cannot be used for real estate sector and issue of guarantees / SBLCs
  202. 202. Short Term Loans, Overdraft products and Term Funding
  203. 203. Can be availed from local financial institutions </li></ul>B E S T   P R A C T I C E S   F O R   F O R E I G N   C O M P A N I E S   D O I N G   B U S I N E S S   I N   I N D I A<br /><ul><li>Buyer’s Credit (Post Import Financing) : Up to 364 days for raw materials and 3 years for capital imports
  204. 204. Pre & Post Shipment Export Financing: Up to 364 days
  205. 205. Negotiation & Discounting of Export LC Bills
  206. 206. Letters of Credit / Bank Guarantees
  207. 207. Receivables Purchase: Both with and without recourse to the seller
  208. 208. Domestic Supply Chain Financing
  209. 209. Structured trade finance</li></ul>Trade finance (both local & foreign currency)<br />17<br />
  210. 210. India – Economic Profile<br />1<br />India – A Glass Half Full?<br />11<br />Opportunities for Foreign Companies in India<br />12<br />Best Practices for Foreign Companies doing Business in India<br />15<br />India’s Financial Framework<br />18<br />N A V I G A T I N G   Y O U R   W A Y   T O   B U S I N E S S   S U C C E S S   I N   I N D I A<br />Basic Regulations in India<br />20<br />J.P.Morgan in India<br />22<br />
  211. 211. India’s Financial Framework<br />PLAYERS<br />40 Foreign banks<br />(295 Branches)<br />SEBI<br /> 30 Private Banks<br />(~ 9,000 branches)<br />Banks<br />27 Public Sector <br />Banks<br /> (> 58k branches)<br />Ministry of Finance<br />196 Regional Rural<br /> Banks<br /> (> 15k branches)<br />I N D I A ’ S   F I N A N C I A L   F R A M E W O R K<br />Financial<br />institutions<br />RBI<br />Non-bank financial<br />companies (> 7000)<br />Source:,<br />18<br />
  212. 212. Financial landscape & banking sector<br />Capital market and Foreign direct investment (FDI)<br />Banking sector<br /><ul><li>Equity market indices: Sensex (Bombay Stock Exchange) and NIFTY (National Stock Exchange)
  213. 213. 4,900+listed companies–Equity market cap of over US$1,200bn
  214. 214. 1,698 FIIs & 4,800+sub-accounts
  215. 215. Quantum of FDI permitted varies by sector; Sectors such as technology & power generation allow 100% FDI while real estate & agriculture prohibit FDI – Net FDI in 2009-10 was US$19.7bn (US$17.5bn in 08-09)
  216. 216. Over 55,000 bank branches of total 70,000 branches support electronic clearing
  217. 217. Base rate: Each bank declares a regulatory mandated base rate which is the lowest rate at which a bank can offer loans to any of its customers</li></ul>Types of clearing systems<br /><ul><li>Real Time Gross Settlement System (RTGS)
  218. 218. High value, urgent electronic clearing (within 2 hours)
  219. 219. National Electronic Funds Transfer (NEFT)
  220. 220. Low value electronic clearing
  221. 221. MICR
  222. 222. Paper-based clearing
  223. 223. Evolution of payments landscape
  224. 224. Volumes still pre-dominantly led by paper based clearing (~80%) but moving rapidly towards electronic modes</li></ul>Debt markets<br /><ul><li>Fixed income–G-Sec, T-Bills, Corporate bonds, CPs
  225. 225. Corporate bond markets under developed and low volumes. Appetite only for AA rated and above paper
  226. 226. Average daily turnover: Corporate Debt: $250mm; G Secs: $4bn</li></ul>I N D I A ’ S   F I N A N C I A L   F R A M E W O R K<br />80% of clearing by value has shifted to electronic systems<br />Foreign exchange<br /><ul><li>INR freely convertible on current account
  227. 227. Capital account convertibility not in the short term agenda
  228. 228. US$ weakness and domestic fundamentals (relatively strong growth & improvement in trade deficit and strong US$ flows) support a stronger rupee</li></ul>Key regulatory bodies<br />Reserve Bank of India (RBI)<br /><ul><li>Monetary Authority: Formulates, implements & monitors monetary policy
  229. 229. Regulator/Supervisor: Prescribes parameters of banking operations
  230. 230. Foreign Exchange Management, issuer of currency and banker to the Government and other banks</li></ul>FIPB and SIA<br /><ul><li>The Foreign Investment Promotion Board (FIPB) and Secretariat for Industrial Assistance (SIA) are responsible for overseeing and approving, as required, any foreign direct investment into India</li></ul>19<br />
  231. 231. India – Economic Profile<br />1<br />India – A Glass Half Full?<br />11<br />Opportunities for Foreign Companies in India<br />12<br />Best Practices for Foreign Companies doing Business in India<br />15<br />India’s Financial Framework<br />18<br />N A V I G A T I N G   Y O U R   W A Y   T O   B U S I N E S S   S U C C E S S   I N   I N D I A<br />Basic Regulations in India<br />20<br />J.P.Morgan in India<br />22<br />
  232. 232. Key regulatory guidelines applicable for capital flows, borrowings & investments<br />Indian Rupee (INR) fully convertible on Current Account but not convertible on Capital Account which leads to several restrictions on repatriation<br />of capital (equity investments, debt repayment & trapped cash). Available repatriation options are as summarized<br /><ul><li>Royalty payment
  233. 233. Payment can be made under the automatic route
  234. 234. Liberalized policy for payment of royalties under Foreign </li></ul> Technology Collaboration <br /><ul><li>Dividend payment
  235. 235. Preferred option, as repatriation is easy. Tax applicability </li></ul> for dividend payment needs to be evaluated. Current rate of dividend<br /> distribution tax is 16.61% (15% plus surcharge on tax)<br /><ul><li>Investment in JV in India
  236. 236. Investment by resident Indian entities could comprise of both </li></ul> resident and non-resident investment<br /><ul><li>Needs compliance with govt. regulations</li></ul>Repatriation of capital and trapped cash<br /><ul><li>Investment in JV/WOS (Joint venture/Wholly owned subsidiary) </li></ul> overseas<br /><ul><li>Cap of 400 per cent of the net worth of the Indian party
  237. 237. Not really relevant from an MNC perspective
  238. 238. Buyback of share capital
  239. 239. Buyback cannot exceed 25% of company’s paid up capital
  240. 240. Reduction of share capital
  241. 241. Time consuming process, repatriation of proceeds requires RBI approval</li></ul>Foreign Direct Investment (FDI), offshore borrowings & trade finance<br /><ul><li>FDI in India is governed by the provisions of the Foreign Exchange Management Act
  242. 242. FDI is approved by the Government of India (GoI) under 2 routes
  243. 243. Automatic route
  244. 244. No specific approval from the Foreign Investment Promotion Board (*“FIPB”) is required provided the foreign investment is within the prescribed limits specified for each sector. Liberal policy except in sectors affecting national security or local population
  245. 245. 100% in infrastructure sectors, 74% in banking & telecom, 49% in airlines and 26% for insurance & print media. Prohibited sectors include real estate, retail, agriculture, atomic energy, gambling & betting and lottery business
  246. 246. Government approval route
  247. 247. Where specific FIPB approval is required, an application needs to be made to the FIPB
  248. 248. FIPB approval takes about 4-6 weeks
  249. 249. Foreign currency borrowings through the ECB (external commercial borrowings) route is a regulated form of foreign currency borrowing for Indian companies and refers to commercial loans in specified forms availed from non-resident lenders
  250. 250. Foreign currency trade finance borrowings are also subject to tenor restrictions</li></ul>B A S I C   R E G U L A T I O N S   I N   I N D I A<br /><ul><li>Investments
  251. 251. LCY investments: Several options from deposits to capital market instruments
  252. 252. FCY surpluses cannot be invested onshore
  253. 253. LCY deposits, money market funds, high yielding derivatives structure
  254. 254. Foreign Currency Risk Management
  255. 255. All instruments such as Forwards, Options and swaps are available for managing FX risk</li></ul>Treasury management<br /><ul><li>Bank Accounts - Only Onshore INR non interest bearing accounts allowed and Resident Indian Companies having export proceeds can open Onshore Foreign Currency Accounts
  256. 256. Regulation of interest rates on deposits
  257. 257. Restrictions on Current Accounts held with banks
  258. 258. No interest on Current Accounts
  259. 259. Minimum seven day tenor for sweeps/deposits
  260. 260. Foreign Currency - INR not convertible on Capital Account but fully convertible on Current Account</li></ul>¹ Explained in detail in later slide; LCY = Local currency, FCY = foreign currency<br />20<br />
  261. 261. Other basic regulations<br />Repatriation of funds<br />Funds In/Out<br />Other Funding Options<br /><ul><li>Bringing in equity –Allowed within FDI norms
  262. 262. Off shore long term loan–Allowed with regulatory approval
  263. 263. Advance against future receivables–Allowed from parent to the sub in India
  264. 264. Local INR/FCY funding–backed by parent guarantee , SBLC, standalone–allowed
  265. 265. Overdraft line, bill discounting, onshore trade loans–allowed on short term basis
  266. 266. Dividends/royalty/capital gains can be repatriated subject to payment of local taxes
  267. 267. Share buyback
  268. 268. Investment in JV/wholly owned subsidiary
  269. 269. Investment in rated paper of the parent of listed Indian subsidiary
  270. 270. Equity: Based on Foreign Investment Promotion Board approval. Need to be converted to INR
  271. 271. Debt or External Commercial Borrowings: Regulated
  272. 272. Outward remittances regulated– Documentary evidence required to be submitted to banks</li></ul>Investment options<br />B A S I C   R E G U L A T I O N S   I N   I N D I A<br /><ul><li>Term deposits with banks
  273. 273. Money market mutual funds
  274. 274. Onshore inter - company loans (Tax implications)
  275. 275. Other investment options (CPs, T-bills)
  276. 276. Bank Accounts–Only Onshore INR non interest bearing accounts allowed. Resident Indian Companies having export proceeds can open Onshore Foreign Currency Accounts
  277. 277. Foreign Currency–INR not convertible on Capital Account but fully convertible on Current Account</li></ul>21<br />
  278. 278. India – Economic Profile<br />1<br />India – A Glass Half Full?<br />11<br />Opportunities for Foreign Companies in India<br />12<br />Best Practices for Foreign Companies doing Business in India<br />15<br />India’s Financial Framework<br />18<br />N A V I G A T I N G   Y O U R   W A Y   T O   B U S I N E S S   S U C C E S S   I N   I N D I A<br />Basic Regulations in India<br />20<br />J.P.Morgan in India<br />22<br />
  279. 279. Presence in India through multiple entities enables J.P. Morgan to be a one stop shop for any structured financing needs<br />India Franchise<br />JPMorgan Chase Bank, N.A., Mumbai Branch<br />J.P. Morgan Securities India Private Limited<br />J.P. Morgan India Private Limited<br />J.P. Morgan Advisors India Private Limited<br />Banking license (RBI)<br />Authorized Dealer for FX<br />Non-banking Finance Company registration (RBI)<br />Merchant Banker registration (SEBI)<br />Non-banking Finance Company registration (RBI)<br />Underwriting Ability<br /><ul><li>Given our banking, NBFC and merchant banking licenses we possess the ability to underwrite any kind of funding transaction
  280. 280. Backed by robust capital commitment we have one of the largest single borrower limit and group borrower limit in the industry</li></ul>Efficient execution<br /><ul><li>Internal processes fine tuned to the global best industry standards enable us to execute transactions in the most efficient manner</li></ul>Our value proposition<br />J . P . M O R G A N   I N   I N D I A<br /><ul><li>J.P. Morgan is one of India’s premier investment banks having extensive client relationships with corporates, government and institutional investors</li></ul>Industry Relationships<br /><ul><li>Besides being one of the strongest global banks with a fortress balancesheet, we also have un-paralleled access to the offshore investor base </li></ul>Ability to access to offshore funds<br /><ul><li>J.P. Morgan in India has one of the most experienced and best in class advisory team, giving us the ability to provide structuring solutions to address any kind of funding need in the most efficient way</li></ul>Customized structuring solutions<br />22<br />
  281. 281. Navigating Your Way to Business Success in India<br />OSU Initiatives<br />Chris Carey<br />Director – Global Gateways<br />110<br />
  282. 282. 111<br /> Global Gateways<br />Agenda<br />OSU Global Strategy<br />OSU Strategy for India<br />Challenges <br />Questions and Answers<br />
  283. 283. 112<br /> Global Gateways<br />
  284. 284. Global Gateways<br />Global Gateways<br />To enhance the university’s teaching, research, and service.<br />Facilitation for faculty research/teaching and international partnerships<br />Portal for study abroad and international internships<br />Alumni Affairs<br />Academic programming and executive education/training for institutional partners both corporate and government<br />International student recruitment and distribution of OSU information <br />Partnerships with Ohio-based companies and International corporations looking to establish operations in Ohio<br />113<br />
  285. 285. Locations<br />Countries where OSU already has significant collaborations through Study Abroad Programs, Faculty Teaching and Research, University Partnerships, Alumni, International Students, Business Interests<br />Implementation<br />Gateways offices consist of leased space in two phases starting with China, India and Brazil<br />114<br /> Global Gateways<br />Global Gateways<br />
  286. 286. 115<br /> Global Gateways<br />Global Gateways<br />
  287. 287. Phase II<br />Istanbul<br />Eastern Europe<br />Sub-Saharan Africa<br />London<br />116<br /> Global Gateways<br />Global Gateways<br />
  288. 288. Global Gateways<br />Global Gateway - India<br />Representative student contingent <br />Great number of faculty connections<br />Need in India for higher education<br />Strong connections and partnerships with prestigious Indian Universities<br />Growing world power and hub for innovation<br />Support Ohio region’s development<br />Underdeveloped education abroad potential<br />117<br />
  289. 289. International Students – Country of Origin<br />118<br /> Global Gateways<br />India<br />800+ Students<br />>12% of Total<br /><2% of Study Abroad<br />
  290. 290. Will locate in Mumbai business district with aim to establish in 2011<br />Will serve greater central Ohio to promote region<br />Will capitalize on OSU core strengths<br />Engineering<br />Food, Agriculture, and Environmental Sciences<br />Health Sciences<br />119<br /> Global Gateways<br />Global Gateway - India<br />
  291. 291. 120<br /> Global Gateways<br />Global Gateways: Challenges<br />
  292. 292. Global Gateways<br />Global Gateways: Challenges<br />Governmental Regulations<br />Establishment of appropriate legal entity<br />Foreign Universities Bill<br />Initial funding and revenue generation<br />Focus on core OSU strengths and activities<br />Sustaining long-term faculty, student, alumni, and friends commitment and engagement<br />121<br />
  293. 293. Questions<br />122<br /> Global Gateways<br />
  294. 294. Ohio and India<br />March 10, 2011<br />
  295. 295. Global Markets Division<br />
  296. 296. Ohio – India Office<br />Opened in 2008 in New Delhi <br />Satellite offices in Mumbai, Bangalore, Hyderabad and Chennai<br />Managing Director - Mr. Prem Behl<br />
  297. 297. Ohio exports by country 2010<br />Canada 17.2 billion<br />Mexico 3.5 billion<br />China 2.3 billion<br />France 1.9 billion<br />Brazil 1.3 billion<br />Japan 1.3 billion<br />UK 1.2 billion<br />Germany 1.1 billion<br />9. Australia 841 million<br />10. South Korea 640 million<br />11. Italy 610 million<br />12. India 570 million<br />13. Netherlands 542 million<br />14. Belgium 521 million<br />15. Singapore 461 million<br />16. Hong Kong 407 million<br />
  298. 298. Ohio Exports to India 2010<br />Total all commodities 570 million<br />Industrial Machinery/Computers 252 million<br />Electric Machinery 49 million<br />Optic / Photo/ Medical Equip. 41 million<br />Plastics 36 million<br />Aircraft/Spacecraft 29 million<br />Pearls, Precious Metals, Stones 24 million<br />Misc. Chemical Products 17 million<br />Articles of Iron and Steel 14 million<br />Iron and Steel 13 million<br />Tanning and Dye 8 million<br />
  299. 299. Ohio-India Relationship<br />HISTORY<br />Formal relationship began – 1987 – Gov. Celeste signs MOU with the PHD Chamber of Commerce in New Delhi<br />Sister-cities – Cleveland & Bangalore and Columbus & Ahmedabad<br />Between 1985 & 1996 – lays foundation for future work between 1996 & 2007<br /><ul><li>Gov. Celeste & Voinovich in total lead 6 trade missions to India
  300. 300. Ohio hosts several in-bound missions from India</li></ul>Throughout the 22 year history<br /><ul><li>At least on an annual basis, interactions and visits to / from the Indian Ambassador & Consul General from New York occur.</li></ul>Former Governor Richard Celeste serves as U.S. Ambassador to India from 1997 to 2001 – the second Ohioan to serve in the post after William Saxbe who served in the mid-1970’s.<br />Significant exchanges over the years between OSU & the Ohio Aerospace Initiative with many different organizations in India.<br />
  301. 301. Ohio-India Relationship<br />RECENT PROJECTS<br />Unofficial list of over 140 Ohio companies with operations or major known exports to India (PG, Babcock Wilcox / Eaton / Battelle, etc.)<br />Have assisted well over 30 companies with major export projects to India since office’s inception<br />Several high-profile, in-going investment prospects from India – many in the advanced and renewable energy sectors<br />High profile investment win for Ohio in March 2008 from Tata Consultancy Services – North American Delivery Center in Milford, OH – 200,000+ sq. feet, plans to house over 1,000 locally hired SW engineers. <br />Ohio Business Mission to India in May 2011.<br />
  302. 302. Indian Automotive Delegation to ColumbusApril 2010<br />
  303. 303. Ohio Companies with Offices in India<br />The Timken Company, Canton <br /> --- Produces highly engineered anti-friction bearings; alloy steel; related products<br /> --- 17,000 employees<br /> --- Operations in 26 countries<br /> --- technology center on Bangalore, India<br />
  304. 304. Ohio Companies with Offices in India<br />Proctor & Gamble, Cincinnati<br />---largest consumer packaged goods company in the world<br />--- offices in 80+ countries<br />--- 135,000 employees<br />--- general office in Mumbai, India;<br /> also a manufacturing plant<br />
  305. 305. Contact Information<br />Alex Kohls<br />Global Trade Development Manager<br />Global Markets Division<br />Tel: 614-466-0262<br /><br />