INDIAEMERGING ECONOMY & VIBRANT MARKET

Amit Narang -20091016Presentation to TAITRA Seminar on Indian Food Processing Industry

ContentsOverview of Indian EconomyThe 5 D Framework5DThe Why India MatrixIndia-Taiwan Trade & Eco. Relationship The India Deal

Area: 3.3 Million Sq. Kms3307th Largest Country28 States 28Coastline: 7500 km 7500: , , , , : : , 21 : (82.6%), (11.4%), (2.4%), (2.0%), (0.7%)

: (US$1 = INR 49)Chennai

New Delhi

Mumbai

Southern Golden Triangle

India: Location

Democracy Worlds Largest democracy

Largest digital elections

10 major parties 50+state parties1050

3 MN elected representatives 3DiversityHighly diverse

23 Official languages23

6 major religions6

Diaspora Over 20 MN Indians outsideIndia2

Indian companies outboundM&A > US$15 BN in 2006

>2006150Demographics

Youngest Nation in the world112,

442 MN population < 20 Yrs Age44220

6 MN graduates p.a / English Speaking6Demand 5th largest consumer market in the worldby 2025.

20255

350 MN growing middle class > 583 MN by 202535> 2025583The 5 D Framework5D

Business Friendly

Emerging Economic Powerhouse Strong Economic Fundamentals

Human Dividend

Huge Consumer Market

Attractive Investment Destination Reliable Trade Partner

Why India

GDP grew at an average annual growth rate of 6% between 1980-2003 198020036%

2nd Fastest Major Economy in the world2

GDP growth :2005-06: 9.4%2006-07: 9.6%2007-08: 9.0%2008-09: 6.7%

Growth of over 8% for 14 successive quarters from 2005-06 to 2007-082005-08148%

Sustained double digit growth likely2Growth in sectors at Current Prices (2007-08)

Industry: 10.7%Services: 8.9%Agriculture: 2.6%Emerging Economic Powerhouse

INDIA in 2050 | 2050 (Source: Goldman Sachs: BRICs Report) | ::4)India will be the 3rd Largest economy, with the Fastest rate of Growth ..3

Goldman Sachs Later Revised the Forecast: India to cross US economy before 2050 to become 2nd Largest:2050,2

Emerging Economic Powerhouse

Over 65% of GDP from Private Consumption (Japan:55%, China: 40%):65%(55%,40%)

Low Export Dependency of 16%,16%

Steady Reserves of Foreign Exchange: From US$ 5.8 BN in March 1991 to US$ 341 BN in May 2008:199135820072,850200853,410

Indias Forex Reserves are in excess of the External DebtExternal Debt-to-GDP RatioStrong Economic Fundamentals

Market Cap up from US$ 140 BN in 2001 to over US$ 1 TN 20011,400,1

Domestic Investment rate as a %age of GDP up from 27.6% in 2003-04 to 39% in 2007-082003-0427.6%2007-0839%

Domestic Savings rate: More than 30%:30%

As % of GDPIndian Banking & Financial System is healthy and Robust Proportion of poor quality assets is on the decline (%)Capitalization ratios are strong (%)Strong Economic Fundamentals

Free-market democracy with a legal and regulatory framework that rewards free enterprise, entrepreneurship and risk taking , Long history of entrepreneurship & private enterprise Bombay Stock Exchange (1875) Oldest Stock Exchange in Asia 1875-Third largest investor base in the world In 2007, there were a total of 676 M&A deals and 405 private equity dealstotal value of over US$ 70 BN > In 2008 = 454 Deals/ US$ 42 BN 2007676405,700.2008454,420

World Competitiveness Ranking (Lower the better)Business Friendly Environment

Youngest Population in the World: More than half of Indiaspopulation is below 25 yrs age:,25

Over the next 5 years, India alone will account for more than1/4th of the increase in worlds workforce,4,1

Worlds Largest Pool of English Speaking Scientists and Engineers

Least Old-Age Dependency rate in Asia,

Implications: : Strong Consumption pattern to continue

Long term and Stable Growth

Availability of Skilled Labor Force Assured over Long Term

Every year 6 million graduates 6 600,000 Engineers 60 150,000 IT professionals 1512,000 PHDs 12Human Dividend

350 million strong Middle Class35

Rs. 55 Trillion worth of new market to be created by 2025 -20255.5

India will become worlds 5th largest consumer economy by 2025,20 ,202 5*Mckinsey

Fastest Growing Mobile Subscriber base in the worldAdding over 10 million new Mobile Subscribers Each MonthJanuary 09: 15 Million | Feb 09: 13.5 MN :1.20091:15. 20092:1350

Total No of Mobile Connections = 403MN: 43

Every Year, India adds: :150 million new mobile phones 7.3 million new Personal Computers 1.6 million Cars 7.4 million Two-wheelers

2007 Global Retail Development Index (GRDI) India is the top destination in the AT Kearney Global Retail Development Index (2007)AT Kearney 2007Huge Consumer Market

India is ranked second in AT Kearneys FDI confidence index (2007) AT Kearney20072

India has the highest returns on Foreign Capital (-US Department of Commerce)()

FDI on the up: Year 2006: US$ 11.1 BN ; 2007-08: US$ 32.4 BN | April-Nov 2008: US$ 16.58 BN (Up 90%): 2006: 111 ; 2007-08: 324, 2008 4-11 165 (90%)

100% FDI permitted in manufacturing (except atomicenergy) ,100%

Investments, dividends, fees are freely repatriable,,

Foreign investments allowed in capital markets

State Government compete for Investor Friendly ImageRank Country 1 China 2 India 3 US 4 UK 5 Hong Kong 6 Brazil 7 Singapore 8 The UAE 9 Russia10 Germany

Top 10 FDI Investment Destinations 10 Investment Friendly Destination

Exports growth at over 23%23%

Total trade in 2006-07: US$ 330 Billion /2007-08: US$ 390 BN2006-07: 3300 / 2007-08: 3900

2007-08: Exports Growth: 23%/ ImportsGrowth: 27%2007-08 :: 23%/ : 27%

Manufactured Goods Exports growing at 38%38%

Main Exporting Destinations: EU, US, Gulfand China:,,

Open Trade Regime: Between 2001 and 2007,Avg MFN Tariff down from 32.3% to 15.8%: 2001 2007: 32.3%15.8%

Reliable Trade Partner

Economic Powerhouse of the Future

Strong Economic Fundamentals

Vibrant Financial Market

Solid Framework for Business: Democracy, Independent Judiciary, Global Outlook: ,,

Strong Entrepreneurial Spirit

Demographic Advantage: Long term growth prospects:

Strong Domestic Consumption Market

Valuable Manufacturing Destination: Favorable Policies, Skilled & Abundant labor:,

Rapidly Improving Infrastructure

Why INDIA: In Sum :

Taiwanese Investment in India: Over US$ 1 Billion: 10

Promising Sectors for Taiwan

Infrastructure Auto-Components Food Processing IT/ Electronics Manufacturing Leather/ Footwear Textiles Machinery/ Machine Tools ..etcIT = India + Taiwan IT

Bilateral Investment Protection Agreement signed

Double Taxation Avoidance Agreement & ATA Carnet expected this year

TAITRA Offices in Mumbai & Chennai

III Office in Chennai

TAITRONICS in Chennai

Regular Dialogue

Exchange of Delegations

MOUs between Industry Organizations

India-Taiwan: Institutional Framework -:

2002 = US$ 1.19 BN 2007 = US$ 4.8 BN2008 = US$ 5.3 BN200211.9200748200853

In 2008, Indian Exports to Taiwan Declined, Taiwanese Exports to India grew 29%2007165%

India-Taiwan Trade

INDIAN EXPORTS TAIWANESE EXPORTS Mineral Fuel, Oil EtcMineral fuels, Oils etc.CerealsElectrical MachineryOrganic chemicalsMachineriesCottonPlastics and its articlesIron and steelOrganic ChemicalsCopper and its articlesIron and SteelAluminium and its articlesMan-made FilamentsFood residuesImpregnated Text FabricsSalt,sulphur, earth,stone Articles of Iron and SteelElectrical MachineriesTanning / dyeing extracts

Chart2

1.206

1.401

1.945

2.442

2.716

4.879

5.346

India-Taiwan Trade (US$ Billions)

Sheet1

YearTotal

2002

2003

2004

2005

2006

2007

2008

2002200320042005200620072008

Total1.2061.4011.9452.4422.7164.8795.346

Sheet1

India-Taiwan Trade (US$ Billions)

Sheet2

Sheet3

Branding and Brand Positioning Key to Long term Success

Market Highly Price and Quality Sensitive

Focus on Innovation and New Products

Strategic Partners & Local Management can add Value

Act Local but Think Global: Urban Indian highly In-tune with Global Trends:

India One Market for Branding; Multiple Markets for sourcing/ manufacturing,;,

Made in Taiwan Enjoys Prestigean advantage ,

Be Future Oriented, but Build NOW,The India Deal

Elections 20092009 More than 700 million Voting Population | 7

Elections spread over 1 month | Fully electronic Results out in One Day1 | 1

Elections 2009: Congress led Coalition gets comfortable majority2009:

A Vote for Stability: Continued Economic Reform expected:

And a Vote for Investor Confidence:

Net Inflows of Foreign Institutional Investors (FIIs) increased from US$ 100 MN in March 09 to US$ 1.3 BN in April 09 | 200931413

Mumbai Stock Index has gained 46.3% this year | 46.3%

Indian Rupee has strengthened 5% in May 09 | 55%

India ranked as the most promising country to survive the Economic Crisis by Servcorp International Business Confidence Survey in April 09 | Servcorp4

Elections 20092009IMPLICATIONS

Strong fundamentals + +

Dynamic Growth in the last few years + +

Stable and Reform Oriented Government in place

= Sustained and Strong Growth Assured=

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