Why India?

India is currently the 11th largest economy in the world with a nominal GDP of US$1.2 trillion versus Canada's GDP of US$1.3 trillion. Compared to the developed nations ahead in the list, India's strong growth rate is expected to propel the country into the top 10 in coming years. According to a report published by Edelweiss Capital in March 2010, India's GDP is set to quadruple over the next ten years and the country is likely to be a US$ 4 trillion economy by 2020. Analysts around the world conservatively forecast India's GDP will grow by >8% annually over the next decade.

India's growth is broadly based, illustrated by figures in key sectors for clients represented by Indocan Capital.

Healthcare
Growth in healthcare has been driven by rising income levels, increasing affordability, gradual penetration of health insurance, and the rise in chronic disease associated with longer lifespans.

         Pharmaceuticals
         • Expected 12-15% CAGR for 2008-2013, compared with global growth of 4-7% (IMS)
         • Total market size (domestic and exports) recently reached >US$21B
         (September 2008- September 2009)
         • Domestic sales alone are forecasted to reach US$20B by 2015

         Biotechnology
         • Currently accounts for only 2% of the global market but grew 18% during fiscal 2008
         with sales of US$2.7B
         • One of only 6 countries in the world to decode the human genome
         (September 2008- September 2009)
         • Revenues forecasted to quadruple to >US$10B by 2015

Clean Technology
Growth in Clean Technology has been driven by Government and private initiatives to meet the demand of delivering electricity to >500,000 mn people who do not have access to continuous power without significantly increasing carbon emissions. In 2008, the Government instituted the Renewable Portfolio Obligation (RPO) for utilities to purchase a minimum of 5% of their portfolio from renewable energy sources starting in 2010. Every year, this demand increases by 1% up to a level of 15% by 2020.

         Solar
         • National Solar Mission design to establish India as global leader in solar
         • 3 Phase plan:
                   o 2012-2013. Initial solar power generation for off-grid use to serve limited
                      access communities
                   o 2013-2017. Ramp up capacity and increase penetration based on lessons
                      learned from Phase I
                   o 2017-2022. Achieve 22,000 MW of installed solar generation

         Wind
         • Currently 5th in the world with 11,753 MW installed capacity with sales of US$2.7B
         • 2003 – Installation incentives include 80% depreciation benefits in the first year and
         tax exemptions up to 10 years
         (September 2008- September 2009)
         • 2008 – Generation Based Incentives (GBI) for projects between 5 to 49MW – recently
         increased up to 4GW now
         • Other state specific incentives are found in Tamil Nadu, Gujarat, Haryana, Rajasthan
          and others

         Biomass and Biofuels
         • India has the potential to generate up to 19,500 MW (3,500MW biogas based
         cogeneration and 16,000MW from surplus biomass)
         • Currently has 537MW commissioned and 536 MW under construction
         • National Biodiesel mission
                   o Phase I. US $300mn investment in land to produce Jathropa over 400,000
                      hectares of land
                   o Phase 2. Harvest 0.5mn tonnes of diesel from the land

Tech, Media, Telecom
Collectively, this industry has played a key role in putting India on the global map. Driven by an entrepreneurial spirit, globalization, and the world's largest talent pool, India has become a leader in the tech sector.

         Information Technology
         • The IT-BPO sector grew to US$71.7B in 2009, a 12% increase over 2008
         • Software and service accounted for US$59.6B of the sector
         • Since 2002, the software and services industry has grown at an average rate of 27% CAGR
         increased up to 4GW now

         Media & Entertainment
         • KPMG forecasts a 13% CAGR from US$12.9B to US$24B, driven by the gaming and
         animation subsectors
         • India is poised to become the world's largest direct-to-home TV market by 2012 with
         36mn subscribers
         • Cinema is forecasted to grow by 9% CAGR over the next five years to achieve sales
         of >US$3B

         Telecommunications
         • As of March, 2010, there were >621mn telecom subscribers in India; wireless
         accounting for >584mn
         • To date Value-Added-Services (VAS) market has been driven by the SMS market;
         however, with introduction of 3G networks, expectations are non-SMS services will dominate
         VAS revenue
         • From April to February 2010, FDI in telecommunications was US$2.5Bn

Infrastructure
There is no greater area of development than that of India’s nascent infrastructure. The government has estimated total infrastructure spending during 2007-2012 will exceed US$500B, while the following five year plan is estimated to exceed US$1T.

         Cement
         • Currently the second largest producer of cement in the world, with capacity of 219mn
         tonnes in 2009
         • Fitch estimates capacity to reach 300mn tonnes by the end of 2010
         • Cumulative FDI of US$1.7B from April 2000 to February 2010

         Steel
         • India is currently the fifth largest produce of steel with expectations of becoming number
         two in the world by 2016
         • Steel production reached 60 MT in F2009
         • Domestic consumption of steel reached 56.3 MT in F2009
         • Significant FDI estimated at US$238B, capacity to reach 278 MT