India has experienced unprecedented economic growth over the past decade with GDP growth averaging around 8% annually. Key factors driving growth include a booming services sector, rising consumer spending, increased foreign investment, and strong industrial and infrastructure development. Looking ahead, India is well-positioned to continue its rapid economic expansion due to favorable demographics including a large, young workforce and a growing middle class population.

1. Indian Economy
Opportunities Unlimited

2. India: Fastest Growing Free Market Democracy 2

3. India: Among the Top-15 Countries in terms of GDP at constant prices 3
The Indian economy has witnessed an unprecedented growth…. Booming Indian services and
industry sector are providing the required impetus to the economic growth
India’s GDP
witnessed high
India's GDP: 2002-07 9.4%
growth and was the 8.4%
700
second fastest
8.5% 7.5%
growing GDP after 600 Fastest GDP growth of 9.4
China percent in 2006-07, since last 18
500
years
400
300 4% 631
590
USD Billion 484 534
200 424
Indian economy is
the 4th largest in 100
terms of PPP – USD
4.1 trillion in 2006 0
2002-03 2003-04 2004-05 2005-06 2006-07
GDP at Constant Prices
Contribution
The sound of Services -
increased
performance of each from 49
industry segment is 700 percent to 55
leading to the overall percent
robust performance 600
of the Indian 168
500 155
economy Growth in sectors (2006-07):
400 117 Industry: 10.9%
104 109 116
Services: 11%
300
USD Billion 103 91 Agriculture: 2.7%
200
319 347
100 205 223
0
1999-00 2002-03 2005-06 2006-07
Services Agriculture Industry

4. India: Robust Economic Platform 4
India's Forex Reserves: 2001-07 (Till 22 June 2007)
India’s enhanced 250
economic 213
199
performance has 200
been the major 152
141 …at present level of Forex
contributor towards 150
112 reserves, the country has
increased Forex
adequate cover for 12 months of
reserves 100 75 imports
USD Billion54
50
Steadily increasing
Forex reserves offer 0
adequate security 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08
against any possible (Till 22
currency crisis or June)
monetary instability
India’s Forex
External Debt-to-GDP Ratio reserves are in
22 21.1 excess of
Forex reserves 20.4 Falling Dollar inflates external debt…
witnessed an the India’s external debt
increase of 200 19
percent for the 17.8
17.3
period 1990-2007 16.4
15.8
16
Ratio
Increased
confidence of
13 …the decreasing external debt to
investors in Indian
GDP ratio indicates that India has
companies have led
a sound economic platform
to a surge in cross
border borrowing by 10
the corporate 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07
houses

5. India: Surging Exports 5
India's Exports: 2002-07 (till February 2007)
Services sector has 112.40
120 103.42
been a major
contributor to 100 83.81
increased exports 80 63.95
from India 60
52.81 Quality and cost advantage are the two
40 important parameters leveraged by the
USD Billion
20 Indian producers to increasingly
Acceptance of 0 market their products and services
Indian products 2002-03 2003-04 2004-05 2005-06 2006-07
along with the cost (upto Feb.
advantage has 07)
provided an edge to
Indian companies
Indian companies India's Import: 2002-07 (till February 2007)
have chalked out
180 162.30
extensive plans to 160 149.65
increase their 140
presence abroad 111.89
120
100 78.28
80 61.52
60
USD Billion
Petroleum products are the major
40 contributors towards India’s growing
Imports of products
by India mainly
20 imports
0
includes petroleum
2002-03 2003-04 2004-05 2005-06 2006-07
products and
(upto Feb.
minerals
07)

6. India: Attractive Investment Destination 6
With improved performance on PE ratio and ROE, Indian markets have attracted
India is ranked
second in AT large investments
Kearney FDI
confidence index FDI Inflow - India: 2001-07
18,000
15,730
16,000
14,000
12,000 180 percent
Telecom and
Increase
Electronics topped 10,000
Return on the Investments in India (2006 Q1)
the list of inward FDI 8,000
Market PE Ratio P/B Ratio RoE (%) 5,546
USD Million4,222
6,000
3,755
India 16.1 4.53 22 4,000 3,134 2,634
China 10.62 2.06 17 2,000
FDI inflow for the
0
period 2006-07 Indonesia 10.26 3.09 NA
2001-02 2002-03 2003-04 2004-05 2005-06 2006-07
witnessed a growth
Korea 9.85 1.84 16
of 180 percent over
the same period last Malaysia 13.21 1.82 16
year Net FII into India: 2001-07
Taiwan 12.17 2 11 12
10.00 10.20
Thailand 9.84 2.32 23 9.40
10
EM Asia 11.19 2.12 15
Mauritius has been 8
Latin America 9.35 2.46 18 6.72
the largest
6
contributor towards EM Europe 10.9 2.39 15
FDI into India….. USD Billion
4
1.80
2
0.60
0
2001-02 2002-03 2003-04 2004-05 2005-06 2006-07

7. India: Vibrant Capital Market 7
Sensex – The Bombay stock exchange index has risen 15 times from 1990s to
India is among the reach 15,000 mark in July 2007
major destinations
across the globe for
inflow of US Dollar
i.e. FIIs 7/9/2007
Crossed
15,000
mark FIIs augmented
1/12/2007 support by infusing
16,000 Crossed 14,000 mark large investments
Sensex risen 15 in Indian stock
times in the period market
14,000
1990-2007
2/7/2006
12,000 Crossed 10,000 mark
10,000
8,000 12/30/1999 Exorbitant
INR Crossed 5,000 mark industry
Emergence of performance
6,000
industry and
confidence of local
4,000
investors along with
the FIIs has led to
2,000
increased movement Increased local
of sensex investors’
- confidence
7/1/1997 7/1/1998 7/1/1999 7/1/2000 7/1/2001 7/1/2002 7/1/2003 7/1/2004 7/1/2005 7/1/2006 7/1/2007

8. India: Vibrant Economy Driving M&A Activities 8
Number of Deals and Values USD USD
Growth Drivers: SECTOR SECTOR
28.2 (Mn) (Mn)
30 900
 Globalisation of
782 800 Automotive 518 Manufacturing 933
competition 25
700
 Concentration of 20 18.3 600
Banking and Financial 1,375 Media 630
companies to 500
467 Chemicals and 1,133 Oil & Gas 384
achieve 15 12.3 Plastics
400
economies of 10 306 300 Electrical and 896 Pharma & 2,520
scale Number of deals
Electronics biotech
USD Billion 200
 Lower interest 5
100 Energy 1,484 Telecom 2,198
rates and vibrant 0 0
global markets FMCG, Food and 1,327 Others 4,006
2004 2005 2006 Beverages
 Cash Reserves
Deal Values No. of Deals
with Corporates IT and ITES 2,903 Total 20,305
Trends: In 2006, there were a
 Ratio of the Size of
acquisition to the total of 480 M&A deals
size of acquirer and 302 private equity
has grown from 10 deals…
percent in 2004 to
25 percent in 2006. … Average deal size close
 Cross-border
deals are growing
to USD 36 million…
faster than
domestic deals
…Contribution of private
 Private Equity (PE) equity deals to total
houses have number of deals have
funded projects as
well as made a few
increased from nearly 9
acquisitions in percent in 2004 to 28
India percent in 2006

9. Major M&A Deals Undertaken Abroad by India Inc. 9
Tata Steel buys Corus Plc USD 12.1 billion
Hindalco acquired Novelis Inc. USD 6 billion
Essar Steel acquired Algoma Steel USD 1.58 billion
Suzlon Energy Ltd. acquires REpower USD 1.6 billion
Videocon Industries acquired Daewoo USD 730 million
Electronics Corporation Limited

10. Major M&A and Investments Announcements in India 10
Vodafone buys Hutch USD 11 billion
Plans to spend on its development operations USD 1.7 billion
in India over the next four years
Plans investment in private equity, real estate, USD 1 billion
and private wealth management
Aditya Birla Group increased its stake in Idea USD 0.98 billion
Cellular by acquiring 48.14-percent stake
Renault, Nissan and Mahindra & Mahindra
has initiated a Greenfield automobile plant USD 0.905 billion
project in Chennai.
Mylan Laboratories acquired a majority stake USD 0.74 billion
in Matrix Laboratories

11. India: Pacing Ahead to Emerge as a Major Economy in the World 11
2007 Global Retail Development Index (GRDI) 2007 Global Services Location Index
India has been 100
ranked superior to India 3.2 2.3 1.4
other major 80
countries by many China 2.9 2.3 1.4
prominent surveys… 60 Malaysia 2.8 1.3 2
Thailand 3.2 1.2 1.6
40
AT Kearney placed GRDI Score Brazil 2.6 1.8 1.5
India among the top 20
three in its FDI Indonesia 3.3 1.5 1.1
confidence index… 0 Financial structure People and skill availablity
India Russia Vietnam Ukraine China Chile Latvia Business environment
… the retail market
along with the
Projected GDP Growth Rates for Select Upcoming Economies
services sector has 8
been attracting the
interest of major
players
6
India is expected to
4
outperform its rivals
in the BRIC, in terms
of GDP growth rates,
from 2015 2
GDP Growth Rate (%)
onwards…
0
2005-10 2010-15 2015-20 2020-25 2025-30 2030-35 2035-40 2040-45 2045-50
Brazil China India Russia

12. India: Astounding Demographics 12
DEMOGRAPHIC TRANSFORMATION OF INDIA
Growth in the higher
income categories of Annual Household Income
India’s population (in USD)
has created an
2 9 20 Rich (Above 115,000)
affluent section of Population (million)
society, which has 9 17 33 High Income (57,000 – 115,000)
significant level of
purchasing power 48 74 120 Consuming class (23,000 – 57,000)
221 285 404 Working class (10,200 – 23,000)
726 710 613 Needy (Below 10,200)
2001-02 2005-06 2009-10(E)
* In PPP terms
Per Capita Income
700 651
Increasing per capita 583
income and large 600
519 Increasing per capita income
population moving 500 461 coupled with an emerging middle
into middle class 393 class has provided the necessary
has led to high level 400
impetus to consumerism in India
of consumerism in USD
300
India
200
100
0
2002-03 2003-04 2004-05 2005-06 2006-07

13. India: Increasing Working Population 13
Growth in Global Working Age Population (15-64)
Stock Position 2005 Addition to Working Age Population by 2010
314
World 4,168
71
India 691
64
Africa 500
44
China 934
33
South East Asia 362
31
Latin America 359
17
Southern Asia 132
10
USA 200
0
Europe 497
-3
Japan 85
-5 45 95 145 195 245 295 345
In Million
Countries worldwide are anticipating a shortage of working population in the future. India is expected to emerge as a
clear winner, and by 2050, it will have the largest working age population.

14. Growth Expected in India 14
To sustain the GDP growth of more than 8 percent, India requires an investment of USD 1.5 trillion in the
next five years
2010
 GDP – USD 900 billion
 GDP growth rate – 9%
2008  Services contribution – 60-65 %
 GDP – USD 750 billion  FDI limit is expected to be 100
percent in major industry sectors
 GDP growth rate – 9.5%
such as Telecom,
2006  Services contribution – 60 % Semiconductors, Automobiles,
etc.
 GDP – USD 590 billion  FDI limit is expected to be close to
100 percent in major industry  Balance of Trade – Should be
 GDP growth rate – 9 % positive with increased level of
sectors such as Telecom,
 Services contribution – 54 % Semiconductors, Automobiles, exports as compared with imports
etc.  Investment goal – USD 370 billion
 FDI limit not 100 percent in major
industry sectors such as Telecom,  Balance of Trade – Should
Semiconductors, Automobiles, increase with surging exports as
etc. compared with imports
 Balance of Trade – USD (-)46.2  Investment goal – USD 305 billion
billion
 Investment goal – USD 250 billion

15. Why India? – Quote Unquote 15
“India has evolved into
India is among the one of the world's
three most attractive leading technology India has among the
FDI destinations in the centers“. highest returns on
world.
foreign investment.
Craig Barrett
Intel Corporation
A T Kearney
FDI Confidence Index 2005 By 2032, India will be US Department of
among the three Commerce
largest economies in
the world.
“The Indian market has two
BRIC Report, Goldman Sachs
core advantages - an
increasing presence of
“We came to India for multinationals and an upswing
the costs, stayed for the in the IT exports”.
quality and are now
investing for innovation”. “India is a developed
country as far as Travyn Rhall,
ACNielsen
intellectual capital is
concerned”.
- Dan Scheinman, Cisco System Inc. as told
to Business Week, August 2005
Jack Welch
General Electric

16. 16
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