India 2020: What India will Look Like in the Future Today’s Corporate Trends – Where is India beginning to steal China’s Thunder?

2. Preface: What Does India Look Like from Space? At Night? Why? Source: NASA (United States – National Aeronautics and Space Administration)

3. INTRODUCTION: India Structural Framework and Forward Trends . . .

4. The FUTURE (2020): World Bank Projects India as #3 Economy in World GDP* PPP-adjusted 2009 GDP* France EU-27 UK 6,4 trillionsde $ 3,6 trillionsde $ US Germany Japan India Japan China $14.2 tr $4.1 tr $3.8 tr $9.1 tr $14.1 tr 2020 GDP* GDP* PPP-adjusted France UK EU-27 China US Germany India Japan $28.8 tr $30.0 tr $13.4 tr $6.8 tr $29.6 tr Source: World Bank

5. India’s Middle Class: 45 million (2010) … 100 million (2025) Wealth Trend: Forward Trend in Growing Middle Class Middle Class Income Bands for Urban Household Urban Household Income ( US $ - PPP - Adjusted ) Global >= US$ 22,158 Upper Middle Class >= US$ 11,079 - 22,158 Urban Population (millions) Lower Middle Class >= US$ 4,431 – 11,079 Poor <= US$ 4,431 Upper Middle Class Lower Middle Class Sources: Urbanization Rates, Population based on UN, World Urbanization Prospects 2007; MGI Consumer Demand 2008

6. Urbanization Trend: Forward Trend in Mass Migration into Cities India’s Urban Population: 340 million (2010) … 465 million (2020) India’s Urban Population Growth 1.5 billion 1.3 billion 1.2 billion 1.04billion Rural Population (million) 0.86 billion Urban Population (million) Urbanization Source: World Urbanization Prospects 2007

7. Infrastructure Trend: Can New Infrastructure Catalyze R&D & Manufacturing? Large-Scale Transportation Upgrades Catalyze Full Range of Investments Golden Quadrilateral North-South Corridor East-WestCorridor Srinagar Jammu Pathankot Ludhiana Chandigarh New Delhi Jaipur Agra Guwahati Lucknow Gwalior Kanpur Allahabad Kota Varanasi Udaipur Silchar Gandhinagar Ahmedabad Rajkot Vadodara Kolkata Porbandar Surat Baleshwar Nagpur Cuttack Mumbai Bhubaneshwar Pune Hyderabad Vishakapatnam Vijayawada Chennai Bangalore Coimbatore Kochi Madurai Source: Exolus Research

8. Framework: Resulting A-Cities (Highest Population / Foreign Investment) India’s Strengthening A-Cities Golden Quadrilateral North-South Corridor East-WestCorridor A-Cities – Highest Population and FDI Srinagar Jammu Pathankot Ludhiana Chandigarh New Delhi Jaipur Agra Guwahati Lucknow Gwalior Kanpur Allahabad Kota Varanasi Udaipur Silchar Gandhinagar Ahmedabad Rajkot Vadodara Kolkata Porbandar Surat Baleshwar Nagpur Cuttack Mumbai Bhubaneshwar Pune Hyderabad Vishakapatnam Vijayawada Chennai Bangalore Coimbatore Kochi Madurai Source: Exolus Research

9. Corporate Trends: Structural Optimization – Innovation, Markets, Production

10. The Past: OffshoringNon-CoreBusiness Processes to India Human Resources … Finance & Accounting … Procurement … IT 3. Markets 2. Knowledge REVENUE R&D INNOVATION Sales Engineering IT HR Service 1. BPO/ITO Manufacturing F&A Procure Distribution Sourcing Sales Production /Assembly R&D COST Back Office BPO/ITO 4. Resources DRIVING Shareholder Value

11. 1. BPO/ITO: India Global Leader in BPO / ITO Success in BPO Leads to Oversubscription of Key Cities Leading BPO Cities A-Cities – Highest Population and FDI Next Tier BPO Cities Chandigarh Delhi Noida Faridabad Lucknow Gurgaon Jaipur Ahmedabad Vadodara Indore Kolkata Nagpur Bhubaneswar Mumbai Visakhapatnam Pune Hyderabad Bangalore Mangalore Chennai Coimbatore Tiruchirappalli Kochi Madurai Trivandrum Source: NASSCOM

12. 1. BPO/ITO: … Explosive Growth of BPO and ITO Projected through 2020 IT-BPO Growth Rate @ 11.9% CAGR India IT-BPO Projected Growth (2010 – 2020F) Export Domestic 100% Increase USD Billion 96 bn 88 bn 81 bn 73 bn Source: NASSCOM

13. 1. BPO/ITO: … and Drives Emergence of 25 New Cities for BPO New 2nd and 3rd Cities roughly 28% Cheaper than 1st Tier Cities Leading BPO Cities A-Cities – Highest Population and FDI Next Tier BPO cities Srinagar Follower Cities Shimla Ludhiana Aspirant Cities Chandigarh Dehradun Delhi Noida Gangtok Faridabad Lucknow Gurgaon Guwahati Jaipur Kanpur Patna Siliguri Gwalior Varanasi Allahabad Ahmedabad Bhopal Ranchi Durgapur Vadodara Indore Kolkata Surat Nagpur Raipur Bhubaneswar Nashik Aurangabad Mumbai Visakhapatnam Pune Hyderabad Vijayawada Goa Hubli-Dharwad Bangalore Mangalore Chennai Pondicherry Mysore Salem Coimbatore Tiruchirappalli Kochi Madurai Trivandrum Source: NASSCOM

14. The Transition: Offshoringnow up Value Chain to Core Business Processes Research & Development … Sales / Marketing … Production / Manufacturing 3. Markets 2. Knowledge REVENUE R&D INNOVATION Sales Engineering IT HR Service Manufacturing F&A Procure Distribution Sourcing Sales Production /Assembly R&D COST Back Office BPO/ITO 4. Resources DRIVING Shareholder Value

15. The Future: … and Outsourcing Core Processes to 3rd Party Providers Contract Outsourcing: R&D (CRO/KPO) … Sales (CSO) … Manufacturing (CMO) 3. Markets 2. Knowledge CSO R&D CRO/KPO Sales Engineering IT HR Service Virtually Integrated Model CMO F&A Procure Distribution Sourcing CSO Production /Assembly CRO/KPO CMO Back Office BPO/ITO 4. Resources DRIVING Shareholder Value

16. 2. Innovation: Big Pharma Deploying Upstream R&D Functions to India Evolving Biopharmaceutical Innovation Clusters A-Cities – Highest Population and FDI Jammu / Kashmir Himachal Pradesh Punjab Uttarakhand Haryana Arunachal Pradesh New Delhi New Delhi Sikkim Uttar Pradesh Gurgaon Rajasthan Assam Meghalaya Bihar Manipur Tripura Jharkhand Mizoram Madhya Pradesh Gujarat West Bengal Kolkata Chhattisgarh Orissa Maharashtra Mumbai Pune Hyderabad Andhra Pradesh Goa Karnataka Bangalore Tamil Nadu Kerala Source: Centre for International Trade in Technology of IIFT, Companies Website

17. 2. Innovation: Technology Deploying Upstream R&D Functions to India Evolving Technology Innovation Clusters A-Cities – Highest Population and FDI Jammu / Kashmir Himachal Pradesh Punjab Uttarakhand Haryana Arunachal Pradesh New Delhi Sikkim Noida Rajasthan Assam Uttar Pradesh Meghalaya Bihar Tripura Jharkhand Mizoram Madhya Pradesh Gujarat West Bengal Kolkata Chhattisgarh Maharashtra Pune Hyderabad Andhra Pradesh Karnataka Bangalore Tamil Nadu Kerala Source: Centre for International Trade in Technology of IIFT, Companies Website

18. 2. Innovation: Automotive Deploying Upstream R&D Functions to India Evolving Automotive Innovation Clusters A-Cities – Highest Population and FDI Jammu / Kashmir Himachal Pradesh Punjab Uttarakhand Haryana Arunachal Pradesh New Delhi Sikkim Rajasthan Assam Uttar Pradesh Meghalaya Bihar Tripura Jharkhand Mizoram Madhya Pradesh Gujarat West Bengal Kolkata Chhattisgarh Maharashtra Mumbai Hyderabad Andhra Pradesh Karnataka Bangalore Chennai Tamil Nadu Kerala Source: Centre for International Trade in Technology of IIFT, Companies Website

19. 2. Innovation: Chemical-Based Deploying Upstream R&D Functions to India Evolving Chemical Innovation Clusters A-Cities – Highest Population and FDI Jammu / Kashmir Himachal Pradesh Punjab Uttarakhand Haryana Arunachal Pradesh New Delhi Sikkim Gurgaon Rajasthan Assam Uttar Pradesh Meghalaya Bihar Tripura Jharkhand Mizoram Madhya Pradesh Gujarat West Bengal Kolkata Chhattisgarh Vadodara Maharashtra Mumbai Pune Hyderabad Andhra Pradesh Karnataka Bangalore Tamil Nadu Kerala Source: Centre for International Trade in Technology of IIFT, Companies Website

20. 3. Market/Revenues: Car Sales Proxy for Directional Market Sizing? Car Penetration Highest in India Risking Steeply India Car Penetration in BRIC (units per 1,000 people) Russia Car Penetration in India (units per 1,000 people) Brazil China Sources: Association of European Business; Autostat;; Other

21. USD28 billion Market by 2015 … 9th in World 3. Market: India Projected to be World’s 9th Largest Pharma Market by 2015 Pharmaceutical Market Size Country Ranking (USD billion) Sources: IMS; GSK, “Assessment of Opportunity for Pharmaceutical Manufacturers in Emerging Markets” JMCP; Monitor Analysis; Exolus

22. 3. Market: High Spending Continues through Global Economic Crisis Sales Growing at 8.7% CAGR Retail Sales (2003 – 2015F) USD Billion CAGR = 8.7% Source: EIU; Business Monitor International

23. 3. Market: Significant Income Stratification Trends across India Wealth Bands Emerging across Country India Per Capita GDP (USD, PPP-Adjusted) Per Capita GDP (USD, PPP-Adjusted) Jammu/Kashmir Himachal Pradesh Uttarakhand Punjab Haryana Sikkim Arunachal Pradesh Uttar Pradesh Rajasthan Assam New Delhi Bihar Meghalaya Nagaland Jharkhand Tripura Gujarat West Bengal Madhya Pradesh Manipur Chhattisgarh Mizoram Orissa Maharashtra Andhra Pradesh Goa Karnataka Tamil Nadu Kerala Source: Ministry of Statistics and Programme Implementation: CIA World Factbook; Exolus Research

24. 4. Production: … but can India’s Infrastructure Support Manufacturing? India’s Major Investment in Transportation Infrastructure Golden Quadrilateral North-South Corridor East-WestCorridor A-Cities – Highest Population and FDI Srinagar Jammu Pathankot Ludhiana Chandigarh New Delhi Jaipur Agra Guwahati Lucknow Gwalior Kanpur Allahabad Kota Varanasi Kota Udaipur Silchar Gandhinagar Ahmedabad Rajkot Vadodara Kolkata Porbandar Surat Baleshwar Nagpur Cuttack Mumbai Bhubaneshwar Pune Hyderabad Vishakapatnam Vijayawada Chennai Bangalore Coimbatore Kochi Madurai Source: Exolus Research

25. 4. Production: India FDI Soars through Crisis, Strong Vote of Confidence FDI has Spiked in India … Sustained through Global Economic Crisis Foreign Direct Investment Inflows (1990 – 2010) USD Billion Source: World Bank Database

26. 4. Production: Explosive Automotive Production Deployment to India Automotive Production Clusters Cities within cluster: New Delhi, Gurgaon, Noida, Ghaziabad, Ludhiana, Haridwar A-Cities – Highest Population and FDI Srinagar Jammu Pathankot Ludhiana Chandigarh New Delhi Cities within cluster: Baroda, Halol, Mumbai, Pune, Nasik, Aurangabad Jaipur Agra Guwahati Lucknow Gwalior Kanpur Allahabad Kota Varanasi Udaipur Silchar Gandhinagar Ahmedabad Cities within cluster: Kolkata Rajkot Vadodara Kolkata Porbandar Surat Baleshwar Nagpur Cuttack Mumbai Bhubaneshwar Pune Hyderabad Cities within cluster: Bangalore, Chennai, Hosur Vishakapatnam Vijayawada Mangalore Chennai Bangalore Coimbatore Kochi Madurai Sources: All Publically Available Information, Company Websites

27. 4. Production: Big Pharma Production Deploying to India Biotechnology and Biopharmaceutical Production Clusters A-Cities – Highest Population and FDI Srinagar Jammu Pathankot Ludhiana Chandigarh New Delhi Jaipur Agra Guwahati Lucknow Gwalior Kanpur Allahabad Kota Varanasi Udaipur Silchar Gandhinagar Ahmedabad Rajkot Vadodara Kolkata Porbandar Surat Baleshwar Nagpur Cities within cluster: Bangalore, Chennai Cities within cluster: Goa, Mumbai, daman, Nasik, Thane, Aurangabad Cities within cluster: Baroda, Ankleshwar Ahmedabad, Cities within cluster: Manesar, Jammu, Baddi, Pantnagar Cuttack Mumbai Bhubaneshwar Pune Hyderabad Vishakapatnam Vijayawada Mangalore Chennai Bangalore Coimbatore Kochi Madurai Sources: All Publically Available Information, Company Websites

28. 4. Production: Technology Production Deploying to India Technology Hardware Production Clusters A-Cities – Highest Population and FDI Cities within cluster: Kolkata Srinagar Cities within cluster: Bangalore, Chennai Jammu Cities within cluster: Baddi, Mansear Pathankot Ludhiana Chandigarh New Delhi Jaipur Agra Guwahati Lucknow Gwalior Kanpur Allahabad Kota Varanasi Udaipur Silchar Gandhinagar Ahmedabad Rajkot Vadodara Kolkata Porbandar Surat Baleshwar Nagpur Cities within cluster: Pune, Hyderabad Cuttack Mumbai Bhubaneshwar Pune Hyderabad Vishakapatnam Vijayawada Mangalore Chennai Bangalore Coimbatore Kochi Madurai Sources: All Publically Available Information, Company Websites

29. Future: Where are Pareto-Optimal Market/Resource/Innovation Envelopes? Intersection of Wealth + Production Clusters + R&D Hubs + A-Cities Per Capita GDP (USD, PPP-Adjusted) Per Capita GDP (USD, PPP-Adjusted) A-Cities – Highest Population and FDI Jammu / Kashmir Himachal Pradesh Uttarakhand Punjab Arunachal Pradesh Haryana New Delhi Sikkim Noida Gurgaon Rajasthan Assam Uttar Pradesh Nagaland Innovation Hub Bihar Manipur Meghalaya Production Cluster Jharkhand Tripura Gujarat Mizoram Madhya Pradesh West Bengal Chhattisgarh Orissa Maharashtra Andhra Pradesh Goa Karnataka Tamil Nadu Kerala Source: Ministry of Statistics and Programme Implementation: CIA World Factbook; Exolus Research

30. India’s Economic Health

31. Senior Executives Select India as Attractive Destination India Top-3 Investment Destination in World Top 14 Most Attractive Destinations for Future Investment (2009 – 2011) % Percent of Responses Source: World Investment Prospects 2009 - 2011

33. In 2011 the Central Bank has accumulated over USD 316 billion in foreign reserves, from USD 38 billions in year 2000 at CAGR 23.6%.

34. The accumulation of large external surplus means financial system enjoys abundant liquidity.

35. Low Bank Non-Performing Loans to Total Gross Loans

36. Bank non-performing loans decreased to 2% in 2010, from 13% in 2000.

37. Robust Growth in India’s Banking System

38. Commercial bank deposits in India increased at CARG 18.5% from 2001 to 2009.

39. Commercial bank credit in India grew at CARG at 23% from 2001 to 2009 Source: RBI

40. For a Comparative Perspective with the other BRIC Countries Please Refer to the Following Research Reports Found on Slideshare @ http://www.slideshare.net/contest/worlds-best-presentation-contest-2010/entries http://www.slideshare.net/Exolus/brazil-2020-what-will-brazil-look-like-in-the-future http://www.slideshare.net/Exolus/russia-2020-what-will-russia-look-like-in-the-future Download Reports @ www.exolus.com/en/knowledge/research.html Russia 2020 Brazil 2020 China 2020

41. Global Expansion Strategy & Cross-Border Investment Execution (Greenfield, M&A, Joint Ventures, Outsourcing) About Exolus: Exolus is a hybrid management consulting and transaction advisory firm. We work with management teams in the development of their global expansion strategies, across the range of investment formats: Greenfield, M&A, Joint Ventures and Outsourcing. As well, we deploy against global strategies by providing program management across all phases of cross-border investment projects, from candidate searches and evaluation, through investment structuring and negotiations. The founders of Exolushave spent the past two decades in the global service space and have direct experience operating in nearly all of the major investment destinations in the world (40+ countries). The team has served clients of all sizes, both public and private, on projects that ranged in investment size from USD10 million to greater than USD1 billion. We have served clients across all of the following industry segments: Life Sciences, Manufacturing, Automotive, Technology, Retail, Consumer Business, Real Estate, Public Sector. Follow Exolus at: www.exolus.com Need Further Information: info@exolus.com Want Copies of our Reports: www.exolus.com/en/knowledge/research.html

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