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

INTRODUCTION: India Structural Framework and Forward Trends . . .

Source: World Bank The FUTURE (2020): World Bank Projects India as #3 Economy in World GDP* PPP-adjusted GDP* PPP-adjusted

India’s Middle Class: 45 million (2010) … 100 million (2025) Wealth Trend: Forward Trend in Growing Middle Class

Urbanization Trend: Forward Trend in Mass Migration into Cities India’s Urban Population: 340 million (2010) … 465 million (2020) Source: World Urbanization Prospects 2007

Source: Exolus Research Large-Scale Transportation Upgrades Catalyze Full Range of Investments Infrastructure Trend: Can New Infrastructure Catalyze R&D & Manufacturing?

Source: Exolus Research India’s Strengthening A-Cities Framework: Resulting A-Cities (Highest Population / Foreign Investment)

Corporate Trends: Structural Optimization – Innovation, Markets, Production

The Past: Offshoring Non-Core Business Processes to India Human Resources … Finance & Accounting … Procurement … IT

Success in BPO Leads to Oversubscription of Key Cities 1. BPO/ITO: India Global Leader in BPO / ITO Source: NASSCOM

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

New 2nd and 3rd Cities roughly 28% Cheaper than 1st Tier Cities 1. BPO/ITO: … and Drives Emergence of 25 New Cities for BPO Source: NASSCOM

The Transition: Offshoring now up Value Chain to Core Business Processes Research & Development … Sales / Marketing … Production / Manufacturing

The Future: … and Outsourcing Core Processes to 3rd Party Providers Contract Outsourcing: R&D (CRO/KPO) … Sales (CSO) … Manufacturing (CMO)

Source: Centre for International Trade in Technology of IIFT, Companies Website 2. Innovation: Big Pharma Deploying Upstream R&D Functions to India Evolving Biopharmaceutical Innovation Clusters Bangalore Pune Mumbai Gurgaon New Delhi Goa Manipur Orissa Haryana New Delhi

Source: Centre for International Trade in Technology of IIFT, Companies Website 2. Innovation: Technology Deploying Upstream R&D Functions to India Evolving Technology Innovation Clusters

Source: Centre for International Trade in Technology of IIFT, Companies Website Evolving Automotive Innovation Clusters 2. Innovation: Automotive Deploying Upstream R&D Functions to India

Source: Centre for International Trade in Technology of IIFT, Companies Website Evolving Chemical Innovation Clusters 2. Innovation: Chemical-Based Deploying Upstream R&D Functions to India

3. Market/Revenues: Car Sales Proxy for Directional Market Sizing? Car Penetration Highest in India Risking Steeply Sources: Association of European Business; Autostat;; Other

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

3. Market: High Spending Continues through Global Economic Crisis Sales Growing at 8.7% CAGR Source: EIU; Business Monitor International

India Per Capita GDP (USD, PPP-Adjusted) 3. Market: Significant Income Stratification Trends across India Wealth Bands Emerging across Country Per Capita GDP (USD, PPP-Adjusted) Source: Ministry of Statistics and Programme Implementation: CIA World Factbook; Exolus Research

Source: Exolus Research India’s Major Investment in Transportation Infrastructure 4. Production: … but can India’s Infrastructure Support Manufacturing? Kota

Source: World Bank Database FDI has Spiked in India … Sustained through Global Economic Crisis 4. Production: India FDI Soars through Crisis, Strong Vote of Confidence

4. Production: Explosive Automotive Production Deployment to India Automotive Production Clusters Cities within cluster: Baroda, Halol, Mumbai, Pune, Nasik, Aurangabad Cities within cluster: Kolkata Sources: All Publically Available Information, Company Websites

4. Production: Big Pharma Production Deploying to India Biotechnology and Biopharmaceutical Production Clusters Sources: All Publically Available Information, Company Websites

4. Production: Technology Production Deploying to India Technology Hardware Production Clusters Sources: All Publically Available Information, Company Websites

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) Source: Ministry of Statistics and Programme Implementation: CIA World Factbook; Exolus Research New Delhi Gurgaon Noida Innovation Hub Production Cluster

India’s Economic Health

Senior Executives Select India as Attractive Destination India Top-3 Investment Destination in World Source: World Investment Prospects 2009 - 2011

India Economic Outlook: Large Forex Reserves, Healthy Banking System World’s 7th Largest Forex Reserves … Low Non-Performance Loan … Healthy CAGR India Holds The World’s 7th Largest Foreign Exchange Reserves: USD 316 billion 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%. The accumulation of large external surplus means financial system enjoys abundant liquidity. Low Bank Non-Performing Loans to Total Gross Loans Bank non-performing loans decreased to 2% in 2010, from 13% in 2000. Robust Growth in India’s Banking System Commercial bank deposits in India increased at CARG 18.5% from 2001 to 2009. Commercial bank credit in India grew at CARG at 23% from 2001 to 2009 Source: RBI

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 China 2020 Brazil 2020 Russia 2020

Disclaimer In writing we benefit from standing on the shoulders of others and, in the process, we strive to make our own contributions to the market of ideas. As well, we are always tremendously grateful for the many, often selfless, contributions that are availed in the process. The opinions represented herein were prepared for information purposes only, at the time of publication. The information represented herein is believed to be reliable, at the time of publication, and was obtained by various public sources also believed to be reliable. The opinions were considered to be accurate at the point of creation, and further, any views, forecasts, or estimates contained herein may be subject to change at anytime without notice. The opinions expressed or implied herein may not be the opinions of the author, also Exolus, or any associated affiliates. This report and the information contained herein collectively, is not offered as, and should not be regarded as, used or relied upon as advice on any matter. It shall not constitute or be construed as a recommendation or solicitation on behalf of the author, and no legal commitment or obligation shall arise by reason of this document. Thus, the reader shall make an independent assessment of opinion’s stated herein that shall not be considered a substitute for obtaining advise from the readers’ advisors. The author shall not accept responsibility, express or implied, with regards to the accuracy and completeness of the information herein, and the author shall not be liable whatsoever and howsoever arising in connection to this publication. The author shall not accept, and hereby disclaim, all responsibility and liability to all persons, entities, or organizations for all consequences arising out of any use or reliance on the whole or any part of this publication. This publication should not be reproduced or distributed without the author’s consent and is not intended for distribution in any jurisdiction in which this would be prohibited.

Copyright © 2011 Exolus. All rights reserved.