India: Huge Opportunities for U.S. Firms

The Indian market and its one billion plus population, presents lucrative and diverse opportunities for U.S. exporters with the right products, services, and commitment. In recent times, the declining value of the dollar, vis-à-vis competitors’ currencies, is expanding and accelerating these opportunities. India’s infrastructure, transportation, energy, environmental, health care, high-tech, and defense sector requirements for equipment and services will exceed tens of billions of dollars in the mid-term as the Indian economy globalizes and expands. India’s GDP, currently growing at around 7 percent, makes it one of the fastest growing economies in the world. Construction of nearly everything from airports to container ports to teleports is setting the stage to remake India.

Key Economic Indicators

• GDP: $691 billion
• Growth: Estimated 7-8 percent or higher in 2005-06; 7 percent in 2004-05
• Breakdown: Services equal 50 percent of the GDP; industry and agriculture equal 50 percent
• Ranking: 10th largest economy in the world and one of its fastest growing; fourth largest in purchasing-power parity terms
• Per capita income: $640 in 2004-05, (almost double the figure of two decades ago). Of the 1.1 billion people, 39 percent live on less than $1 per day
• Purchasing power: In 2005, approximately 170-300 million people had growing purchasing power, thus creating a growing middle-class consumer population
• Youth Power: Over 58 percent of the Indian population is under the age of 20. That is over 564 million people, nearly twice the total population of the United States

U.S. – India Trade

• Total Trade: Total bilateral trade in 2005 was $26.77 billion
• U.S. Exports to India in 2005 increased to $7.96 billion, a 30.3 percent increase from the previous year
• Imports from India in 2005 totaled $18.81 billion, a 20.8 percent increase from the previous year

India At A Glance

• Population: 1.1 billion (Urban population - 28.4 percent)
• Retail Mkt. Size: $286 billion (only 3.9 percent is organized retail). Retail trade is booming in the country due to increasing disposable incomes of middle and upper middle class
• Growth of Malls: 375 shopping malls by 2007 from 25 in 2003; Estimated space: 90 million sq.ft.
• Growing Middle-class: 300 million and estimated to be growing at 5 percent annually
• Did you know that India.....
  - is the world's second largest small car market
  - is one of only three countries that makes its own supercomputers
  - is one of six countries that launches its own satellites; one hundred of the Fortune 500 have R & D facilities in India
  - has the second largest group of software developers after the U.S.
  - lists 5,000 companies on the Bombay Stock Exchange; only the NYSE has more
  - is the world's largest producer of milk, and second largest producer of food, including fruits and vegetables

More on India.....¹

Doing Business in India

²The Indo-U.S. relationship is in the midst of a remarkable transformation. The two countries, politically and economically distant for much of the late twentieth century, now find their national interests converging at many points. Indian tariffs have been reduced progressively since the early 1990’s. Tariffs and poor infrastructure present the biggest obstacles to foreign investment and growth, but India’s infrastructure requirements also present trade and investment opportunities for American companies. Key factors to doing business successfully in India include: finding good partners who have knowledge of the local market and procedural issues; good planning; aggressive due diligence and follow up; and patience and commitment.

The U.S. Commercial Service in India offers customized solutions to help your business enter and succeed in the Indian market. Our India-wide network of trade specialists will work one-on-one with you through every step of the exporting process, helping you to:

• Target the best markets
• Promote your products and services to qualified buyers
• Meet the best distributors and agents for your products and services

Click here³ to learn more about our services available for U.S. companies.

Have your company listed on our website through our Featured U.S. Exporters program⁴.

Market Entry Strategy

• Finding partners and agents:⁵ New businesses must address issues of sales channels, distribution and marketing practices, pricing and labeling and protection of intellectual property. Relationships and personal meetings with the potential agents are extremely important. Due diligence⁶ is strongly recommended.
• Geographic diversity: U.S. companies, particularly small and medium-sized enterprises, should consider approaching India’s market on a local level. Good localized information is a key to success in such a large and diverse country. U.S. Commercial Service posts ⁷in New Delhi⁸, Mumbai⁹, Chennai¹⁰, Ahmedabad¹¹, Bangalore¹², Hyderabad¹³, and Calcutta¹⁴ provide indispensable local information and advice and are well plugged in with local business and economic leaders. Often multiple agents are required to serve each geographic market in the country.
• Market entry options: Options include using a subsidiary relationship, a joint venture with an Indian partner, or using a liaison, project, or branch office.

Best Prospects

¹⁵Ranked on the basis of estimated Indian imports from the U.S. for 2005, the best prospect sectors for U.S. exports are:

• Airport & Ground Handling
• Computer and Peripherals
• Education Services
• Electrical Power Generation, Transmission & Distribution Equipment
• Food Processing & Cold Storage Equipment
• Machine Tools
• Medical equipment
• Mining & Mineral Processing Equipment
• Oil & Gas Field Machinery
• Pollution Control Equipment
• Safety and security equipment
• Telecommunication Equipment
• Textile Machinery
• Water

For more information on each of the current best prospect sectors, refer to Leading Sectors for U.S. Exports of the India Country Commercial Guide¹⁶. The most promising investment opportunities exist in healthcare services, retailing and biotechnology.

Market Research

For market research reports on Indian industry sectors, visit our Market Research library at: http://www.export.gov/marketresearch.html¹⁷

Upcoming Events

¹⁹UNDER SECRETARIAL BUSINESS DEVELOPMENT MISSION TO INDIA, Nov 29 - Dec 5, 2006... Learn More¹⁸

The U.S. Commercial in India has an active trade events program in India and in the U.S. Visit our trade events section²⁰ for more information on upcoming events.

Important Websites

¹⁹Indian Ministry of Commerce & Industry^21
19Central Board of Excise & Customs^22
19Indian Government Website Directory^23
19Credit Rating Information Service of India^24
19Business Standard^25
19Economic Times^26
19Financial Express^27
19Business World²⁸

More helpful business and government weblinks.....²⁹

To Contact Us

U.S. Commercial Service⁷
The American Center
24 Kasturba Gandhi Marg
New Delhi 110 001
India
Tel: (91-11) 2331 6841-48
Fax: (91-11) 2331 5172
Email: New.Delhi.Office.Box@N0SPAM.mail.doc.gov³⁰