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# ![](media/image1.jpeg){width="0.7395833333333334in" height="0.78125in"}  Doing Business In India: A Country Commercial Guide for U.S. Companies

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# INTERNATIONAL COPYRIGHT, U.S. & FOREIGN COMMERCIAL SERVICE AND U.S. DEPARTMENT OF STATE, 2006. ALL RIGHTS RESERVED OUTSIDE OF THE UNITED STATES.

-   [Chapter 1: Doing Business In India](#section-4)

-   [Chapter 2: Political and Economic Environment](#ch2)

-   [Chapter 3: Selling U.S. Products and
    Services](#_Chapter_3:_Selling)

-   [Chapter 4: Leading Sectors for U.S. Export and Investment](#ch4)

-   [Chapter 5: Trade Regulations and Standards](#ch5)

-   [Chapter 6: Investment Climate](#ch6)

-   [Chapter 7: Trade and Project Financing](#ch7)

-   [Chapter 8: Business Travel](#ch8)

-   [Chapter 9: Contacts, Market Research and Trade
    Events](#chapter-9-contacts-market-research-and-trade-events)

-   [Chapter 10: Guide to Our Services](#ch10)

#   {#section-3 .unnumbered}

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# Chapter 1: Doing Business In India

-   [Market Overview](#market-overview-return-to-top)

-   [Market Challenges](#market-challenges-return-to-top)

-   [Market Opportunities](#market-opportunities-return-to-top)

-   [Market Entry Strategy](#market-entry-strategy-return-to-top)

## Market Overview [**Return to top**](#section-4)

The 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 on many points. 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.
For calendar year 2005, U.S.-Indo two-way merchandise trade reached an
all-time high of over \$26 billion, with U.S. merchandise exports to
India almost reaching \$8 billion, up 30 percent over 2004 \--almost
double our exports in 2002. 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, with some
projections for 2006 climbing to over 8 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. However, much bureaucratic reform is needed, and
extensive barriers to trade still remain in place. Although Indian
tariffs have been reduced progressively since the early 1990's, much
progress still needs to be made. 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 for doing business
successfully in India include: finding good partners who have knowledge
of the local market and procedural issues; good planning; due diligence
and follow-up; and perhaps most importatnly, patience and commitment.

**KEY ECONOMIC INDICATORS**

-   **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.** 10^th^ largest economy in the world in 2004, and fourth
    largest in purchasing-power parity terms

-   **Per capita income.** \$603 in 2004-5, (double the figure of two
    decades ago). Of the 1.065 billion people, 39 percent live on less
    than \$1 per day.

-   **Purchasing power.** In 2005, approximately 170-200 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, representing over 564 million people, nearly twice
    the total population of the United States.

**U.S. -- INDIA TRADE**

-   **Trade Balance**. 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 over 2004.

-   **Imports from India** in 2005 totaled \$18.81 billion, a 20.8
    percent increase over 2004.

-   **The 2005 trade deficit** with India was \$10.85 billion, a 14.7
    percent increase over 2004.

## Market Challenges [**Return to top**](#section-4) 

**SLOW REFORM PROCESS**

As India gradually opens up its markets, many tariff and non-tariff
barriers remain. Multiparty coalition governments since the mid-1990s
have made only slow progress in this regard. For example, India\'s
customs tariff and excise tax system is confusing and laden with
exemptions. In addition, heavily bureaucratic investment processes, poor
IPR enforcement, government inefficiency, and corruption have also
discouraged foreign investors. As a result, FDI has not grown beyond the
annual \$3-5 billion level.

**INFRASTRUCTURE**

Problems with the country\'s roads, railroads, ports, airports, power
grid, and telecommunications may be the biggest obstacle for India's
economy to grow to its full potential. Nonetheless, a slow process of
liberalization in these areas has been underway, led by a more liberal
environment in the information technology, airline and telecom sectors,
with increasing roles for the private sector in ports, roads and other
key sectors. However, the absence of a clear policy framework has
hindered critical private investment in infrastructure overall.

## Market Opportunities [**Return to top**](#section-4)

**Best prospect sectors and business opportunities.** Ranked on the
basis of estimated Indian imports from the U.S. for 2005, the best
prospects (in alphabetical order) for U.S. exports follow. For details,
please refer [Chapter 4](#_Chapter_4:_Leading) of this report.

-   [Airport and Ground Handling](#airport-and-ground-handling)

-   [Computers and Peripherals](#computers-and-peripherals)

-   [Education Services](#education-services)

-   [Electric Power Generation, Distribution and Transmission
    Equipment](#electric-power-generation-distribution-and-transmission-equipment)

-   [Food Processing & Cold Storage
    Equipment](#food-processing-cold-storage-equipment)

-   [Machine Tools](#machine-tools)

-   [Medical Equipment](#medical-equipment)

-   [Mining and Mineral Processing
    Equipment](#mining-and-mineral-processing-equipment)

-   [Oil and Gas Field Machinery](#oil-and-gas-field-machinery)

-   [Pollution Control Equipment](#pollution-control-equipment)

-   [[Safety and Security
    Equipment]{.underline}](#safety-and-security-equipment)

-   [Telecommunications Equipment](#_Telecommunications_Equipment)

-   [Textile Machinery](#textile-machinery)

-   [Water](#water)

## Market Entry Strategy [**Return to top**](#section-4)

-   **Finding partners and agents.** New business 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 diligence 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 in
    New Delhi, Mumbai, Chennai, Ahmedabad, Bangalore, Hyderabad and
    Calcutta 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. ***It is strongly urged that
    U.S. companies consider a regional plan, focusing on multiple
    locations and markets within India and finding the appropriate
    partners and agents within each region.***

[Return to table of
contents](#doing-business-in-india-a-country-commercial-guide-for-u.s.-companies)

[[]{#ch2 .anchor}Return to table of
contents](#doing-business-in-india-a-country-commercial-guide-for-u.s.-companies)

# Chapter 2: Political and Economic Environment

For the most current background information on the political and
economic environment of India, please click on the link below to the
U.S. Department of State Background Notes:
<http://www.state.gov/r/pa/ei/bgn/3454.htm>.

[Return to table of
contents](#doing-business-in-india-a-country-commercial-guide-for-u.s.-companies)

# Chapter 3: Selling U.S. Products and Services 

-   [Using an Agent or
    Distributor](#using-an-agent-or-distributor-return-to-top)

-   [Establishing an Office](#establishing-an-office-return-to-top)

-   [Franchising](#franchising-return-to-top)

-   [Direct Marketing](#direct-marketing-return-to-top)

-   [Joint Ventures/Licensing](#joint-ventureslicensing-return-to-top)

-   [Selling to the
    Government](#selling-to-the-government-return-to-top)

-   [Distribution and Sales
    Channels](#distribution-and-sales-channels-return-to-top)

-   [Selling
    Factors/Techniques](#selling-factorstechniques-return-to-top)

-   [Electronic Commerce](#electronic-commerce-return-to-top)

-   [Trade Promotion and
    Advertising](#trade-promotion-and-advertising-return-to-top)

-   [Pricing](#pricing-return-to-top)

-   [Sales Service/Customer
    Support](#sales-servicecustomer-support-return-to-top)

-   [Protecting Your Intellectual
    Property](#protecting-your-intellectual-property-return-to-top)

-   [Understanding Indian Business
    Law](#understanding-indian-business-law-return-to-top)

-   [Due Diligence](#due-diligence-return-to-top)

-   [Local Professional
    Services](#local-professional-services-return-to-top)

-   [Web Resources](#web-resources-return-to-top)

## Using an Agent or Distributor [**Return to top**](#_Chapter_3:_Selling)

A company choosing to sell its products or services in India prior to
establishing a branch office or a subsidiary can enter the market by
appointing an agent, representative, or distributor. If the product has
a wide market appeal, it is advised that regional
representatives/distributors be appointed.

**Terms Defined:**

Agent, representative, and distributor are used interchangeably
throughout India, although it is generally understood that an agent will
only procure business and will be paid through a commission. This is the
case for an indenting agent, where the foreign company deals directly
with an Indian importer and then an agent consolidates all the imports
taking commission from the foreign company. Conversely, a distributor
acts as an importer and stocks the products before selling it to the end
user. Due to the risk of stocking the products, the distributor's
commission is higher than that of an agent. Having agents of one sort or
another on the ground locally is strongly advised.

With the gradual opening of the market as required by India\'s WTO
commitments, U.S. exporters will find strong interests from potential
representatives and distributors for a broad range of products. However,
because establishing a relationship with distributors and agents locally
is so important to success in the Indian economy, several aspects of
choosing these representatives must be considered

**The Indian Distributor/Agent and U.S. Companies:** U.S. companies
selecting a distributor or agent must exercise caution. A thorough due
diligence study is required before establishing a relationship. When
evaluating a distributor or agent, the Indian firm's business
reputation, financial resources, willingness and ability to invest,
marketing strength, regional coverage industry expertise and credit
worthiness should be considered. An ideal distributor should have an
extremely good banking relationship to enable the extension of credit
and also have the capacity to market a full range of products and
services. It is important that the agent or distributor have modern
infrastructure and facilities such as warehouses, service workshops,
showrooms, and trained staff as required to meet and exceed the expected
volume of business.

U.S. companies should be careful not to be influenced by the enthusiasm
and persistence of the distributor or his representative. Sometimes
Indian firms represent so many companies that they have little time or
interest in developing new markets. The Indian firm may not have the
vision to go beyond the existing list of contacts that they have
nurtured over time. Therefore it is important to objectively measure the
ability, willingness and aggressiveness of the firm in developing new
networks, contacts and areas of business. By checking multiple
professional references, a U.S. company can gain broad insight into an
Indian counterpart.

**The long list syndrome:** U.S. companies should also exercise
pragmatic skepticism when the potential representative offers a long
list of foreign clients. These lists may be outdated and the
relationships may no longer exist. If the relationships exist, the
distributor or agent may not be able to fulfill all obligations and
commitments because of time, financial, managerial, or logistical
constraints to building the new relationship. The U.S. companies should
confirm that the distributor or agent is able to represent the product
along with the products of current clients.

**The no follow-through syndrome:** Finally, U.S. companies should
ensure that their distributor or agent is fully committed to promoting
their product. Very often the distributors or the agents project a
professional image backed by a qualified staff, widespread distribution
network and a countrywide presence. The U.S. company should make sure
that such representatives do not leave the distribution of their
products or services to the network. Hence it is imperative that U.S.
companies carefully consider all factors prior to making the final
selection of a distributor or agent.

**Advantages of a small distributor:** A small distributor may be ideal
for implementing a flexible distribution strategy. India being a vast
nation of diverse states poses a logistical challenge to a distributor
or an agent. A distributor handling similar or related products of a
U.S. firm may be unable to deliver the products as needed. A small
distributor having presence within that region of India where the
customers live may be more advantageous as knowledge of the local market
may be a competitive advantage. A small distributor with good product
knowledge and marketing skills is often times more desirable than a big
distributor who leaves the marketing of the product to a section or
department of their larger organization. U.S. companies should consider
appointing multiple representatives for different products when this is
possible.

**Due diligence checks:** As India has a new and rapidly growing
economy, simple and traditional methods of validating the credentials of
a potential partner may be less reliable, thus requiring a thorough due
diligence study. The U.S. firm should check with the distributor or
agent's bank to determine the potential partner's financial health,
reputation and credit worthiness. If necessary, additional details
should be sought. Based on the data provided by the bank, chartered
accountants, lawyers, industrial associations, and other sources, the
U.S. firm can select a suitable distributor or agent. For technical
products, U.S. companies should also ensure the technical expertise of
the distributor, the condition of the facilities, the experience of the
technical staff, etc. Before signing a representative's agreement, a
credit check of the proposed partner is imperative. Due care should be
taken in finalizing the contract details and/or memorandum of
understanding. (For more on this, see [Due
Diligence](#due-diligence-return-to-top) section below)

To identify agents and distributors, U.S. companies can take advantage
of the [International Partner Search
(IPS)](http://www.buyusa.gov/india/en/ips.html) and [Gold Key Service
(GKS)](http://www.buyusa.gov/india/en/goldkey.html) programs offered by
the U.S. Commercial Service through its seven offices in India. To
conduct a background check on local agents and distributors, U.S.
companies can take advantage of the [Commercial Service's International
Company Profile (ICP)](http://www.buyusa.gov/india/en/icp.html) service.

## Establishing an Office [**Return to top**](#_Chapter_3:_Selling)

Overseas companies are required to obtain general or special permission
of the [Reserve Bank of India (RBI)](http://www.rbi.org.in/) for
carrying out any activity relating to agriculture or plantation.

A foreign company or individual planning to set up business operations
in India -- but choosing not to establish a subsidiary or to form a
joint venture with an Indian partner -- can do so by establishing
Liaison, Project and Branch offices in India. Approval from the
[RBI](http://www.rbi.org.in/) is required for opening such offices.
Application for setting up such offices may be submitted to RBI in form
FNC 1 (forms can be downloaded from
<http://www.rbi.org.in/scripts/BS_ViewFemaForms.aspx>). Such companies
also have to register themselves with the Registrar of Companies (ROC --
for contact information check
<http://www.namasthenri.com/shares/ROC.HTM>) within 30 days of setting
up a place of business in India.

**Liaison or representative office:** Many foreign companies initially
establish a presence in India with a liaison or representative office
that is not directly engaged in commercial transactions in India.
Foreign companies usually open representative/liaison offices to oversee
their networking efforts, to promote awareness of their products and to
explore further opportunities for business and investment. A Liaison
office is not allowed to undertake any commercial activity and cannot
therefore earn any revenue in India. As no revenue is generated, there
are no tax implications to the office in India. Such offices are not
allowed to charge any commission or receive other income from Indian
customers for providing liaison services. All expenses are to be borne
by remittances from the head office abroad. A foreign company
establishing a liaison office cannot repatriate money out of India.

India's [Foreign Exchange Management
Act](http://www.rbi.org.in/index.dll/25?sectionhomepage) (FEMA)
regulates the establishment and operation of a liaison office.
[RBI](http://www.rbi.org.in/) permission to establish liaison offices is
initially granted for a period of 3 years and this may be extended.
While registering with the
[ROC](http://www.namasthenri.com/shares/ROC.HTM), along with the
application form, the foreign company is required to submit copies of
its memorandum and articles of association, its balance sheet and copies
of any contracts that it has entered into in India. Under now-eased
accounting requirements of the Department of Company Affairs, foreign
companies with liaison offices in India will not be required to file a
full balance sheet and a profit and loss account with the
[ROC](http://www.namasthenri.com/shares/ROC.HTM), under section 594 of
the Companies Act, 1956. Every year a certificate from the auditors must
be submitted to the Regional Office of RBI. The certificate should state
that the liaison office has complied with the terms and conditions
stipulated in the letter of approval issued by the RBI, and that all
expenses of the liaison office are met from remittance funds.

**Branch Office:** A branch office, like a liaison office, is not an
incorporated company but an extension of the foreign company in India. A
branch of a foreign company is limited to the following activities by
the RBI: representing the parent company and acting as buying/selling
agent; conducting research for the parent company, carrying out import
and export trading activities; promoting technical and financial
collaborations between Indian and foreign companies, rendering
professional or consulting services, rendering services in Information
Technology and development of software in India, and rendering technical
support to the products supplied by the parent/group companies. A branch
office actually does business in India and is subject to tax in India.
However, a branch office is not allowed to carry out manufacturing and
processing activities directly although it can sub-contract such
activities to an Indian manufacturer. Under the Banking Regulation Act,
1949, opening of branches in India by foreign banks requires RBI
permission. Remittance of net profits/surplus by Indian branches of such
banks to their head offices abroad, however, require prior approval of
the Exchange Control Department of the Reserve Bank.

Also under the Indian Companies Act, prescribed documents need to be
filed with the ROC in the state where the branch is situated, and also
with the main office in New Delhi. After initial registration, every
year the accounts of the branch must be submitted to the registrar of
companies. The branch office is allowed to repatriate the profits
generated from the Indian operations to the parent company after payment
of taxes.

**Project office:** Foreign companies sometimes set up a temporary
project office to undertake projects in India awarded to the parent
company. It is essentially a branch office set up for the limited
purpose of executing a specific project. Approval for project offices is
generally accorded for executing government-supported construction
projects or where the projects are financed by Indian and international
financial institutions and multilateral organizations. In exceptional
cases, approval is also given for private projects. A project office is
allowed to return surplus funds to the foreign country upon completion
of the project.

None of these entities are permitted to acquire real estate without
prior RBI approval. However, they are allowed to lease property in India
for a maximum period of 5 years.

**Basic Guidelines:** There are some key practical guidelines that new
companies establishing offices in India should consider: identify the
right decision-makers; keep these decision-makers and other key players
briefed about your project; avoid getting into the land acquisition
process from private sources; handle local labor issues carefully,
because Indian laws essentially prohibit firing workers; and take the
opposition seriously, whether it is local politicians or residents.

According to a detailed survey sponsored by "Business Today" and
undertaken by Gallup-MBA (India), the most important parameters in
choosing a location in India are: (1) physical infrastructure; (2) state
government support and flexibility; (3) cost and availability of power;
and (4) the law & order situation. Other factors to take into account
include labor availability and cost; labor relations and work culture;
and proximity to resources and/or markets. In the area of labor law, an
employer with more than 100 workers cannot fire them without permission
from a government labor commissioner \-- something usually impossible to
obtain.

Given the shortage of good commercial office space at reasonable prices
in major Indian cities, business centers are a viable option for new
companies wanting to establish a physical presence. Business centers are
facilities that are ready to move in, wired for communications, and
air-conditioned. Billing is normally done on a monthly basis. For
long-term use, discounts are generally available. Many state governments
are creating special Technology Parks For selected industry sectors like
software, biotechnology, and automotive.

State governments eager to attract investments to such locations often
provide special support and incentives. While some foreign companies
have ventured into smaller cities, the numbers are increasing slowly.

Given their large size in terms of population and middle/high income
households, many foreign companies have traditionally focused on Mumbai
and Delhi. During the past decade or so, foreign companies have
discovered other places to set up base, such as Bangalore, Chennai and
Hyderabad. Pune is also catching up fast, especially for software
companies.

## Franchising [**Return to top**](#_Chapter_3:_Selling)

As a result of the rapidly growing spending power of a large segment of
the country, Indian consumers are changing their tastes, preferences and
lifestyles. Increasingly, they are demanding the standards of service
offered overseas. A large number of Indians are now eager to purchase
international products and services.

Consequently, India's \$330 billion retail sector is witnessing an
evolution as traditional markets are beginning to make way for new
models such as department stores, supermarkets, hypermarkets and
specialty stores. Western-style malls have begun appearing in both large
and second-tier cities, introducing the Indian consumer to a new
shopping and entertainment experience. According to a study conducted by
management-consulting firm A.T. Kearney, India tops the list of the 30
most attractive emerging markets for investment opportunities by mass
merchants and food retailers.

Franchising retail outlets is emerging as a popular model for reaching
the Indian consumer, and has grown in popularity as this marketing
format helps overcome the difficulties associated with having a chain of
company-owned outlets. Though current investment regulations of the
Indian government restrict foreign investment in the retail sector, many
international companies have chosen the franchising route to grab a
share of the enormous market that India offers.

Franchising in some form has existed in India for several decades. One
well-known example of this is the Bata shoe chain, started in the
1960\'s. However, franchising in its current form has become popular in
India only in recent years. The industry is still very much in an
evolutionary stage. New franchise business concepts span such diverse
sectors as education, specialized food services, healthcare, garments
and apparel, entertainment, fitness and personal grooming clinics,
stationery and gift shops, and courier services to name a few.

Some of the features of the Indian franchising industry are as follows:

-   Wide spread sectors (from education to hospitality)

-   Over 40,000 franchisees currently

-   Annual turnover from franchising -- approximately \$2.2 billion

-   Total investments made by franchisees -- approximately \$1.1 billion

-   Over 300,000 people directly employed by franchised businesses

-   Variety of hybrid formats in practice

-   Numerous international franchises already existing and rapidly
    expanding

Following the economic liberalization of 1991, several foreign companies
with strong brand names established a presence in India through
franchising. In the hospitality and food service industries, this has
been the preferred method for starting operations in

India. Some international companies that operate through franchises
include: Hertz, Avis and Budget car rental; Radisson, Best Western and
Quality Inn hotels; Kentucky Fried Chicken, Domino's Pizza, TGI Friday,
Ruby Tuesday, Subway, and Baskin Robbins for food. Pizza Hut and
Domino's Pizza have opened many outlets while McDonald\'s has been open
for business since 1996. Similarly, Indian companies with strong brand
recognition are also using the franchising route to expand business
volume. For example, Archies for giftware, MRF for automotive tires,
NIIT for computer training schools and Apollo Hospitals for healthcare.

The current business and social climate in India holds good potential
for foreign franchisers, however, careful and extensive planning and due
diligence are needed before entering the market. Some important points
to consider before entry:

\- A thorough understanding of the laws related to the business of
franchising is crucial for the U.S. franchiser. In addition, signing a
good local tax consultant to provide guidance to avoid pitfalls is
recommended.

\- It is also vital to conduct a thorough financial and legal due
diligence and preferably a feasibility study on a prospective
franchisee. Again, a professional agency can be employed to conduct such
a check of the owners and directors, as well as and the entities'
financial status and investment capacity for the new venture.

\- Due to the geographical size of India, the franchiser will face a
choice of whether to appoint a master franchisee for the entire country
or to divide the country into 2 to 4 zones, appointing a master
franchisee in each zone. Ideally, franchisers will divide the country
into at least two zones, which will provide better control of the
franchisees.

\- Sensitivity to local culture and tastes is also important to success.
For example - Indians are predominantly vegetarian. Innovative
strategies like 'Indianization' of products and marketing techniques may
be employed to successfully access the sizable Indian market. A classic
example of successful 'Indianization' is the fast food sector. Several
American companies such as McDonald's, Pizza Hut and Domino's have
developed a special India menu to cater to the Indian palate.

Recent changes in Indian laws now permit lump sum and royalty payments
made by Indian franchisees to their foreign counterparts for the use of
foreign technology, such as manuals, systems, etc. Before this change
came into effect, this was a major deterrent to U.S. franchisers
considering India as a possible market for expansion. But now, lump sum
payments up to \$2 million are permitted and royalties of 5% on domestic
sales and 8% on exports can be paid to the foreign franchiser. In
addition, foreign companies can now enter into consulting agreements and
receive up to \$1 million per project. Amounts in excess of this can
also be received but only with the permission of the Indian government.

Another remaining challenge for U.S. franchisers is real estate. In the
metro cities of India, retail space is extremely expensive and the
quality is relatively poor. Antiquated rent control laws make finding a
suitable and affordable location difficult.

U.S. franchisers should also be prepared to face stiff resistance from
prospective Indian franchisees toward the franchisee fees/royalty
payments, which are considered high. The potential franchisee must be
made to understand that the fees are not only for the brand value but
also for the well-researched, "tried and true" systems that will help
them to run their operations smoothly and profitably.

It is also important to understand that unlike in the U.S. and other
western countries, India does not have any specific law on franchising.
Franchising is covered within the broad definition of transfer of
technology. Thus, the legal framework for new franchisers interested in
setting up master franchises in India exists in terms of brand
protection and rules regarding payment of franchise fees. However there
is a growing need to improve this regulatory framework.

[The Franchising Association of India (FAI),](http://www.fai.co.in/)
established in 1999, through the efforts of the Indo American Chamber of
Commerce, is the first organization of its kind in India. It represents
the interests of franchisers, franchisees, vendors, consultants and
other interested individuals and bodies. The FAI's objectives include
improving the business environment for franchising; acting as a resource
center for current and prospective franchisers and franchisees, media
and the government; promoting the concept of franchising and its use as
a healthy business practice; establishing a discussion forum for
franchising matters; and promoting the interests of members by
organizing seminars, conferences and meetings. The FAI is in the process
of establishing appropriate international linkages, and was admitted as
a member of the World Franchising Council in early 2000.

The FAI can publicize updated information on American franchisers that
are interested in expanding their business in India. It can advise
potential franchisers about the current legislative framework, and lobby
with the government for changes. It can also help to identify
high-quality potential Indian franchisees.

## Direct Marketing [**Return to top**](#_Chapter_3:_Selling)

Direct Selling is one of the fastest growing industries in India and is
an unusually good income generator for entrepreneurs from all walks of
life. In addition, direct selling offers consumers a convenient and more
informed way to buy, along with money-back guarantees and refund
policies. According to the Indian Direct Selling Association, the direct
selling industry reported a total turnover of \$545 million (Rs. 24
billion) during fiscal year 2004-05.

In India, direct selling traditionally meant contracting of outside
agencies by manufacturers to move surplus or promotional products or
small manufacturers resorting to door-to-door selling because of their
inability to compete in the retail market. It has also meant deploying
direct sales employees to demonstrate products with the objective of
making a spot sale. The traditional view of direct selling is changing.
One of the first Indian companies to practice direct selling in India
was Eureka Forbes, which sells a range of household appliances through
direct selling. Though some form of direct selling had been in practice
in India, a new wave of interest to sell in the Indian market through
the modern concept of direct selling has begun only during the last
decade.

Currently, the direct selling industry employs more than 1.3 million
people, an increase of 100,000 from 2003-04 to 2004-05. There are about
750,000 active direct sales executives (including both men, women and
couples working as a team) who buy or sell products at least once every
two months. The total number of product offerings increased to 380 with
2,100 variants and product categories ranging from cosmetics to
kitchenware, education, home care and natural products.

According to industry estimates, there are roughly 20 direct selling
companies in India with nation-wide coverage and approximately100
smaller companies with localized city specific presence. Many Indian and
multinational companies like Amway, Aero Pharma, Avon, Herbalife,
Sunrider, Tupperware, Lotus Learning, Oriflame, AMC Cookware, and Time
Life Asia have started operations in India through joint ventures or
wholly-owned subsidiaries. Amway, with more than 200,000 distributors
spread across 26 cities servicing more than 306 locations is perhaps the
largest direct selling company in India today. Tupperware entered India
in 1996 and currently has more than 40,000 dealers in 40 Indian cities.
Established retail companies in India have also started direct selling
operations, the most prominent being Hindustan Lever Limited of the
Unilever group.

Since their launch, many direct selling companies have had to rework
their strategies with emphasis on the three critical Ps of marketing -
product, pricing, and packaging.

Once considered as the medium for sales of premium products, direct
selling in India today is moving towards lower priced products to meet
the demands of the price sensitive Indian consumer. Package sizes are
being reduced to bring down the psychological price barrier and make the
products sold through the direct selling channel more affordable. Some
multinational direct selling companies have also customized products to
meet the needs of Indian consumers. Major foreign direct selling
companies have also established manufacturing facilities in India.

Direct selling companies follow different plans of compensation for
their sales force. Some follow the single level plan under which sales
people earn commission on sales made by them alone, and do not earn
anything on sales made by people they have introduced in the business.
They may earn a one-time reward for people they help recruit. There are
still some others who also compensate a sales person for the sales made
by persons recruited by the first sales person, and from the sales of
the group or network recruited by the first sales person's personal
recruits.

The recommended retail margins on products range from 20 to 30 percent.
The manufacturer provides initial training on product knowledge and use.
This kind of distribution channel does not mean less expense, either on
the products or on the channel. It is labor-intensive and the products
retailed are not low cost/low value. Rather, they are high
involvement/high value products. There is no system of credit. For all
goods purchased, the distributor has to make a complete payment.

In recent years, thousands of Indian women and, increasingly, men are
taking to direct selling in India to supplement salaried incomes. Rather
than sales people they call themselves consultants, book advisors,
dealers and beauty advisors. Other than a minimum age requirement by
law, no qualifications are needed. Training is critical element of
direct selling and most companies do offer some training. The dropout
rate in this method of selling is high.

India has strong potential for direct selling because unemployment and
underemployment is perennial. Multinational direct sellers have been
quick to sense an opportunity in India's post-liberalization economy.
Due to the industry's high growth potential, the direct selling industry
association is already gearing up to get systems in place to protect
consumer interest and respond to inquiries. It has released a code of
ethics that member-companies have to adhere to.

In the absence of advertising in the direct selling industry, to
increase penetration and facilitate direct access to their products,
some direct selling companies have established lifestyle centers and
kiosks at major retail stores. Promotions by direct selling companies
are common. A lifestyle store is basically like a large store that
carries the entire product range of the marketer but is not meant for
retailing. Instead, it is a place for consumers to come and experience
the brands and for distributors to conduct their business and impart
training. To increase brand awareness, some direct selling companies set
up temporary kiosks at leading retail stores to display and sell their
products. These strategies have helped to enhance recruitment, create
brand awareness and reach out to consumers who may not be aware how and
where to buy the products from.

## Joint Ventures/Licensing [**Return to top**](#_Chapter_3:_Selling)

A joint venture company is generally formed under the Indian Companies
Act of 1956 and is jointly owned by an Indian company and a foreign
company. This type of arrangement is quite common because India
encourages foreign collaborations to facilitate capital investments,
import of capital goods and transfer of technology.

India is a market that requires a careful approach because mistakes can
be quite costly and local entrepreneurs yield to no one in terms of
business acumen. Once a decision to go with a joint venture is made, the
following practical tips will be of use to U.S. firms: define each
partner\'s roles and expectations because equality and trust will help
keep partners together; experience is a key ingredient; there is no
substitute for thorough research; and look at the long term.

A foreign company invests in India either through automatic approval by
the [Reserve Bank of India (RBI)](http://www.rbi.org.in/) or through the
Foreign Investment Promotion Board (FIPB). Automatic approval by the RBI
is available if the foreign direct investment in the equity of the joint
venture company does not exceed 51 percent in Annexure III and IIIB
industries; 50 percent in Annexure IIIA industries; and 74 percent in
Annexure IIIC industries. FIPB approval is required for all investment
proposals that are not eligible for automatic approval. The rules
regarding equity limits are being constantly liberalized and revised.

**High-priority (Annexure III) industries:** India has identified 35
industries (called Annexure III industries) where investment is sought
on a priority basis. These 35 industries, as defined by the Government
in Annexure III to its statement on Industrial Policy of July 24, 1991,
include: metallurgical industries; boilers and steam generating plants;
prime movers (other than electrical generators); electrical equipment;
transportation equipment; industrial machinery and equipment;
agricultural machinery; earth-moving machinery; industrial instruments;
scientific instruments; fertilizers; chemicals; drugs and
pharmaceuticals; paper, pulp and paper products; heavy-duty rubberized
and plastic products; plate glass; ceramics for industrial use; cement;
high-technology reproduction equipment; carbon and carbon products;
pre-tensioned high pressure RCC pipes; rubber machinery; printing
machinery; welding electrodes; industrial synthetic diamonds; equipment
for biotechnology applications; extraction and upgrading of minor oils;
prefabricated building materials; soya products; high-yield seeds and
live plants; food processing; food packaging; hotels and tourism;
software development.

**Annexure III Part A:** The following is a list of industries and items
where approval for foreign equity up to 50 percent is automatic: mining
of iron ore; mining of metal ores other than iron ore and uranium ores;
mining of non-metallic minerals not elsewhere classified.

**Annexure III Part B industries:** The following is a list of
additional industries and items where approval for foreign equity up to
51 percent is automatic. Manufacture of food products; cotton textiles;
wool, silk & man-made fibers; water-proof textile fabrics; basic
chemicals & chemical products except products of petroleum & coal;
rubber, plastic, petroleum & coal products; metal products & parts
except machinery and equipment; non-metallic mineral products; machinery
and equipment other than transport equipment; land and water transport
support services and services incidental to transport not elsewhere
classified; renting & leasing; business services not elsewhere
classified; health and medical services; tourism related industry.

**Annexure III Part C industries:** The following is a list of
additional industries and items where approval for foreign equity up to
74 percent is automatic: mining services; basic metals & alloy
industries; manufacture of medical, surgical, scientific and measuring
appliances and equipment; industrial process control equipment; meters
for electricity, water and gas; laboratory and scientific equipment;
photographic, cinematographic and optical goods; construction of
electricity generation, transmission and distribution projects;
construction of hydroelectric power and industrial plants;
non-conventional energy generation & distribution; construction and
maintenance of ocean and inland and water transport; refrigerated
cold-storage and warehousing of agricultural products.

**Industries reserved for the Small Scale Sector:** About 506 items are
reserved for manufacture by the small-scale sector (please visit

<http://www.laghu-udyog.com/publications/reserveditems/resvex.htm> for
the list). A small-scale unit is defined by an investment limit of
\$222,222 (Rs.10 million) in plant and machinery. These industries and
investment requirements may be revised from time-to-time. Ice cream,
biscuits, farm tools, automobile component and corrugated paper and
board are examples of products which have recently been de-reserved and
opened up for manufacture by non-small scale units

Foreign equity in a small-scale undertaking is permissible up to 24
percent. However there is no bar on a higher foreign equity holding if
the unit is willing to give up its small-scale status. Non-small scale
units can also manufacture items reserved for the small-scale sector. In
cases where (a) a non small-scale unit and (b) a small-scale unit with
foreign investment beyond the 24 percent manufactures small scale
reserved item(s), an industrial license carrying a mandatory export
obligation of 50 percent of their production within a specified time
frame is required.

**Industries subject to compulsory licensing:** All industrial
undertakings are exempt from obtaining an industrial license to
manufacture, except for (i) industries reserved for the Public Sector,
(ii) industries retained under compulsory licensing, (iii) items of
manufacture reserved for the small scale sector and (iv) if the proposal
attracts location restriction.

Industrial units exempt from obtaining an industrial license are
required to file an Industrial Entrepreneur Memoranda (IEM) with the
[Secretariat of Industrial Assistance (SIA)](http://dipp.nic.in/) in the
[Ministry of Commerce and Industries](http://commin.nic.in/).

Only five industries are subject to compulsory licensing in India. The
need for licensing is attributed to safety, environmental and defense
related considerations. The licensing authority in this case is the
Ministry of Industrial Development and the industries are: distillation
and brewing of alcoholic drinks; cigars and cigarettes of tobacco and
manufactured tobacco substitutes; electronic aerospace and defense
equipment of all types; industrial explosives including detonating and
safety fuses, gun powder, nitrocellulose and matches and hazardous
chemicals.

**Industries reserved for the public sector:** Some industries are
reserved exclusively for the public sector. The following industries are
not available for private investment unless a specific approval is
obtained: arms and ammunition and allied items of defense equipment,
defense aircraft and warships, atomic energy, and railway transport.

**Foreign Investment Promotion Board:** The Foreign Investment Promotion
Board (FIPB) in the Ministry of Finance is a high-level central agency
that deals and clears proposals for investment in India. The chairman of
the Board is the Secretary of the Department of Economic Affairs. Other
Board members consist of the Secretaries in the Ministries of Commerce &
Industries, and the Economic Relations Secretary in the Ministry of
External Affairs. Other members can be co-opted from senior government
officials, and professional experts from industry, commerce and banks,
as and when required.

Applications are received by the FIPB through the Secretaries for
Industrial Assistance (SIA). The SIA was established within the
Department of Industrial Policy & Promotion in the Ministry of Industry.
It provides a single window for entrepreneurial assistance, investor
facilitation, processing of all applications that require Government
approval, assisting entrepreneurs and investors in setting up projects
(including liaison with other organizations and State Governments) and
monitoring the implementation of projects. Applications can also be made
with Indian missions abroad. Applications received by SIA are placed
before the FIPB within 15 days of receipt. The Board has the flexibility
to negotiate with investors. The FIPB\'s decisions are communicated by
SIA, normally within 6 weeks of receipt of the application.

**Investment in the following areas is expected to be accorded priority
in considering investment applications:** items listed in the automatic
approval list, where conditions for automatic approval are not met;
infrastructure; items with export potential; projects with large
employment potential, particularly in rural areas; items which have a
direct or backward linkage with the agricultural sector; socially
relevant projects such as hospitals and life saving drugs; and projects
which induct new technology or infuse capital. If the U.S. investor has
written a comprehensive proposal, provided details, and the FIPB is
fully satisfied that the investment meets India\'s industrial
development goals, approval can be granted in as little as three weeks.
Proposals that are badly formulated, do not meet FIPB goals, and invite
objections on political, environmental or public health or welfare
grounds are likely to be denied.

For more details please refer:
<http://dipp.nic.in/manual/manual_11_05.pdf>

## Selling to the Government [**Return to top**](#_Chapter_3:_Selling)

Indian government procurement practices and procedures often lack
transparency, and standardization, which can frustrate foreign
suppliers. The process is improving under the influence of fiscal reform
policies such those set down in their newly revised Defence Procurement
Procedure--2005 (Capitol Procurements) guidance.
(<http://mod.nic.in/dpm/welcome.html>). Specific price and quality
preferences for local suppliers were largely abolished in 1992.
Recipients of preferential treatment are now supposedly limited to the
small-scale industrial and handicrafts sectors, which represent a very
small share of total government procurement. There are occasional
reports of government-owned companies calling in the performance bonds
of foreign companies, even when there was no dispute over performance.
It is not unusual for negotiations to drag on for months and be held up
at more than one of the sundry levels within the Indian bureaucracy for
long periods with no discernible movement or reason given for lack of
progress. With this in mind some firms seek out local representatives
who are familiar with the culture and customs of India, and are familiar
with ways to expedite their product or service through the maze of
bureaucracy in Government ministries. When foreign financing is
involved, principal government procurement agencies tend to follow
multilateral development bank requirements for international tenders.
However, in other purchases, current procurement practices can result in
discrimination against foreign suppliers when goods or services of
comparable quality and price are available locally. The Government of
India regularly advertises its requirements for the purchase of supplies
and new equipment. These foreign government tenders are reported by the
U.S. Department of Commerce, which then publishes them in its Economic
Bulletin Board and in the National Trade Data Bank. For more information
about these information services, including subscription prices, please
call the U.S. Department of Commerce Trade Information Center at
USA-TRADE, or 1-800-872-8723.

**DEFENSE SALES**

While most of India's defense equipment was previously purchased from
non-U.S. sources, and largely still is, India has recently expressed
increased interest in U.S. weapons systems. The Indian defense sales
market today offers great potential for defense suppliers but U.S.
businesses desiring to make defense related sales to India should be
aware that the process can be a daunting one.

U.S. defense suppliers should assess the merits of having some
representation in India to assist in market assessments, logistical
support, and after-sales contact. Those firms that have used such
personnel have often found them invaluable. This representation can
either be through the supplier's own office presence in India (see above
section "Establishing an Office"), or through an authorized
representative. Caution must be exercised when seeking local expertise
because unless strict guidelines are followed, Indian law may be broken.
In November 2001, the Government of India lifted the ban on agents in
defense purchases. Regulatory provisions were announced for Indian
authorized representatives and agents, where permissible, in defense
purchases. Details of these provisions are posted on the web site of the
Ministry of Defense see,
(<http://mod.nic.in/newadditions/repagent.htm>). The regulations require
both the principal as well as the potential local representative to meet
the provisions stipulated -- it is the foreign supplier that has to make
an application to the Ministry to register the relationship reached with
the agent. The regulations also call for complete disclosure of the
principal agent relationship in all its aspects.

The process for gaining clearance from the Government of India (GOI) to
hire such a representative can also be very slow. These requirements
have discouraged many established local representatives in the defense
business from registering as agents for new defense deals. The Office of
Defense Cooperation (ODC) within the U.S. Embassy in New Delhi is a good
point of contact for U.S. defense firms. The ODC will assist by
providing contact details of Military Service offices that are the main
purchasers of foreign defense goods for India and offer advice on
strategies for defense related sales. ODC may also accompany U.S.
defense suppliers to an initial meeting with GOI officials as an
impartial observer. The offices of the U.S. Commercial Service in New
Delhi and Chennai are also good points of contact for U.S. defense firms
initiating sales efforts in India. The tender process that the GOI uses
to acquire new defense equipment is relatively slow and complex, with
the average time between initial release of a request for proposal and
the final contract award often taking several years. The most successful
firms are those with the endurance to follow the process through and the
situational awareness that comes from local representation or from
contact with GOI officials. Tenders are not generally posted to the
Internet, but are instead provided to those firms that are registered
with the GOI. Selected tenders can be found at:
<http://mod.nic.in/tenders/welcome.html>. One way to become registered
is to meet with a representative of the appropriate Ministry of Defense
office. Additional detail on the Indian acquisition process can be found
in the document located at:

<http://mod.nic.in/newadditions/dpp02.pdf>

## Distribution and Sales Channels [**Return to top**](#_Chapter_3:_Selling)

Following the 1991 economic reforms, India\'s international trade
environment has been liberalized. Gaining access to India\'s markets
requires careful analysis of consumer preferences, existing sales
channels, and changes in distribution and marketing practices, all of
which are continually evolving.

India is a subcontinent, nearly 2,000 miles from north to south and
1,800 miles from east to west. Its coastline is 3,800 miles long and its
area is 1.3 million square miles. Vast distances separate the most
populous cities. The urban population centers are widely dispersed and
nationwide distribution is imperative for many classes of consumer
products. For instance, a leading manufacturer of cosmetics and personal
care products sells to 250 million Indians through a network of 100,000
retail outlets across the country.

Rural India constitutes approximately 70 percent of the country's
population. Although in terms of buying power urban India would rate
higher, the rural market has been showing rapid growth in recent years.
The main reason for such growth, apart from awareness created by various
media, has been the increased availability of products in rural areas.

The adaptation of distribution channels to the needs of the rural market
has been the major factor contributing to the growth of the rural
market. A good example of innovative distribution has been the
availability of products in the traditional weekly market, which often
caters to multiple villages.

India. Population of major cities, 2001

##### City Population

Mumbai 16,368,084

Calcutta 13,216,546

Delhi 12,791,458

Chennai 6,424,624

Bangalore 5,686,844

Hyderabad 5,533,640

Ahmedabad 4,519,278

Pune 3,755,525

Source: India 2001 Census

Note: India's total population exceeds 1 billion. The urban population
is approximately 300 million, and rural population exceeds 741 million.

**The tree-tier system:** Most Indian manufacturers use a three-tier
selling and distribution structure that has evolved over the years:
redistribution stockists, wholesalers and retailers. As an example, a
Fast Moving Consumer Goods (FMCG) company operating on an all-India
basis could have between 40 and 80 redistribution stockists (RS). The RS
will sell the product to between 100 and 450 wholesalers. Finally, both
the RS and wholesalers will service between 250,000-750,000 retailers
throughout the country. The RS will sell to both large and small
retailers in the cities as well as interior parts of India. Depending on
how a company chooses to manage and supervise these relationships, its
sales staff may vary form 75 to 500 employees. Wholesaling is profitable
by maintaining low costs with high turnover, with typical FMCG product
margins anywhere from 4-5%. Many wholesalers operate out of wholesale
markets. According to a recent study, India has approximately 12 million
retail outlets, mostly family owned or run businesses. In urban areas,
the more enterprising retailers provide credit and home-delivery. Now,
with the advent of shopping malls impacting the retail sector, companies
talk of direct delivery and discounts for large retail outlets.

**Outsourcing logistics:** In recent years, there has been an increased
interest by companies to improve their distribution logistics in an
effort to address a fiercely competitive market. This in turn has led to
the emergence of independent distribution and logistics agencies to
handle this important function. Marketers are increasingly outsourcing
some of the key functions in the distribution and logistics areas to
courier and logistics companies and searching for more efficient ways to
reach the consumer. The courier network in India now spreads to smaller
Class IV towns (towns with populations less than 50,000).

**Clearing and Forwarding:** Most FMCG and pharmaceutical companies use
clearing and forwarding (C&F) agents for distribution and each C&F agent
services stocks in an area, typically a state. It is also important to
note that duty structures vary among states for the same product, thus
creating disparate pricing. But with the introduction of VAT at every
stage from producer to end consumer, retail prices are now the same
throughout India. With the cost of establishing warehouses extremely
high, C&F agents are fast becoming the norm. Recently companies have
been utilizing the same distribution channels for products with
complementary characteristics.

**Where is the market?** There is a slow but steady change to the
dynamics of the Indian retail market. While presently there are no major
national store chains, several branded stores, specialty stores, malls
and supermarkets are emerging in many large and medium-sized cities.
Most cities have well-known market districts. Retail sales outlets are
almost always locally owned. The current trend for shopping centers in
major Indian cities is integration of shopping with entertainment and
leisure activities. Buying and selling is often a process of bargaining
and negotiation. Outside the major metropolitan areas, India is an
intricate network of rural villages. Poor roads make many rural
districts inaccessible. Although villages may have satellite TV, moving
goods to rural markets can present real challenges.

**Market Size:** According to a recent study on retailing carried out by
a leading international consulting firm on behalf of the Federation of
Indian Chambers of Commerce and Industry (FICCI), the Indian retail
market size is estimated at \$180 billion. Recent market studies on
retailing in India indicate that organized retailing (as compared to
traditional markets) is likely to grow rapidly. The organized Indian
retail industry business is expected to grow between 30-50 percent
annually during the next five years, from a present volume of \$2.8
billion to \$9.75 billion by 2005. In light of the retail market size
however, the current volume of organized retailing is very small. Large
industry groups in India are now pursuing organized retailing as a
business opportunity. Dairy Farm of Hong Kong along with RPG Enterprises
of India are joint promoters of the FoodWorld and MusicWorld chain of
stores in India. Foodworld has more than 45 stores in 5 cities across
South India. Many leading retail chains from Europe are studying plans
to enter the Indian retail market. In spite of the size and scope,
retailing as an industry is not yet fully developed. India as yet does
not allow foreign direct investment in retailing. During the past year
however, the government announced that it intends to review FDI in
retailing, and suggested that certain product categories could be opened
up to FDI.

**The Black market:** India has both organized and unorganized (or
traditional) channels

for selling goods. Smuggled goods such as food items, computer parts,
cellular telephones, gold and a vast range of imported consumer goods
are routinely sold through the thriving \"unorganized\" sector or black
market. By avoiding taxes and customs duties and using cash
transactions, unorganized merchants offer better prices than those
offered by the organized sector. However, with liberalization and more
and more foreign companies coming into India, the volume of business in
smuggled goods has fallen significantly. Most products sold on the black
market previously, are now sold through direct channels.

**The Gray Market:** The Gray Market, an unofficial market in which new
issues of shares are bought and sold before they formally become
available for trading on the Stock Exchange and new hardware is bought
and sold before it becomes legally available, is a significant threat to
the legitimate Indian computer hardware and mobile phone industries. The
Gray Market in India has seen significant expansion in recent years.
According to the Manufacturers Association of Information Technology
(MAIT), Gray Market operations as a proportion of the total PC market in
India, are likely to be the highest in the world. Though statistics on
this issue are currently not scientific, the immense size of the Gray
Market the PC market is likely mirrored in most tech industries in the
country.

**Distribution:** India has recently seen the emergence of mature
channels of distribution and support for products such as computer
hardware, software, and peripherals, ranging from commodity products to
high-end IT equipment. The typical distribution structure has been
two-tiered with a distributor (for the entire country) servicing dealers
and retailers. Improvements in packaging technology have also had a
significant influence on the models of distribution adopted by companies
in India for marketing perishable and processed food items.

There has been a significant expansion in distribution channels in India
during the past few years. The total number of retail distribution
outlets in the country is estimated at over 12 million. A firm can take
its products to the user through a variety of channels. It can use
different types of marketing intermediaries. It can structure its
channel into a single-tier or a three-tier outfit. After deciding on the
broad design of the distribution channel and the number of tiers in the
channel, the number of members required in each tier and their
locations, suitable dealers must then be selected.

India has eleven major seaports and 139 minor working ports along its
two coasts, but in terms of gross weight tonnage conveyed annually,
Mumbai, Marmagao on the west coast, and Vishakhapatnam and Chennai along
the east coast are the most important ports in India. Mumbai, the
financial capital of the country is very important for the international
cargo trade.

## Selling Factors/Techniques [**Return to top**](#_Chapter_3:_Selling)

At first glance, the bulk of the purchasing power in India would appear
to be concentrated in its urban markets. However, a majority of the
Indian population lives in rural areas distributed over some 627,000
villages. The balance lives in 3,700 towns of which approximately 300
have a population of more than 100,000 inhabitants.

It is said that the real India lives in the villages. All marketers,
both Indian and foreign, have benefited by paying attention to the
marketing potential of rural India.

Analysis of consumer purchase data over the last several years by
various research agencies has shown that rural markets in India are
growing as disposable income and literacy levels increase and television
access stimulates demand. Due to the influence of the media, consumption
patterns in rural households have also changed significantly in recent
years. Indians in rural areas are far more brand conscious, and this is
generating demand for some products that were previously unfamiliar.
Growing brand awareness is the reason most of American companies
entering the Indian market must register their brand name with the
Indian trademark office. For more information on this visit:
<http://patentoffice.nic.in/>. For the country's mega-marketers, rural
reach is on the rise. Poor infrastructure, however, is a major problem
that makes distribution difficult and reduces demand for some products
in rural areas. Significantly, most purchases are made from the
household's own income as rent/hire purchase plans and loans account for
only 10 percent of rural purchases.

In order for the sales techniques to be successful, distribution
coverage is of prime importance. Indian consumers are serviced by an
efficient, but highly fragmented, trade system consisting of over 12
million retail and wholesale outlets, spread over many urban and rural
population centers. India has the largest retail outlet density in the
world, but the majority of these stores are very small in size and
unorganized. Over the next few years, however, hundreds of malls will be
built, many based on Western models. Thus, access to a broad,
well-managed efficient distribution network is a source of significant
competitive advantage.

Although India's rapidly growing population appears to present limitless
opportunities, many Indian and foreign companies have discovered that
for many product categories, only a fraction of India's population can
be regarded as potential customers. Many companies have been
disappointed with the response to products launched in India over the
past few years. Initially, these companies grossly overestimated the
depth and size of the Indian market for their products. Projections for
the growing Indian middle-class range from 150-200 million but these
figures have proven to be off the mark for certain products as marketed
to the typical Western middle class consumer. Another mistake was to
offer global brands at global prices, without any customization.
Transposing brands and products from other markets did not work.
Suitability and adaptation to Indian preferences and conditions are
regarded as a significant benefit to Indian consumers and is therefore
an important factor to be considered while designing a sales strategy. A
final mistake was to enter India without an efficient distribution
network, forgetting that India is a market with poor infrastructure and
logistics.

A successful sales strategy will recognize and deal with the existence
of strong local competition - this exists in many products and service
categories and should not be underestimated. U.S. firms must also
carefully compare customer needs and the quality of latent demand with
the level of service that they want to offer in India. Even among the
affluent middle class, much of their money is spent on need-based
consumption rather than on luxury goods.

While selling in the Indian market can be a complicated and difficult
experience for new entrants, this can be avoided if, at the outset, the
market opportunity is assessed accurately and the capabilities of local
competition are not underestimated. Only in unusual circumstances should
new foreign entrants create a new and independent sales infrastructure,
because it is very expensive in the short run, and requires sustained
investment to build over the long run, even if the product is
successful.

## Electronic Commerce [**Return to top**](#_Chapter_3:_Selling)

In addition to traditional selling techniques, the Internet is also
gaining importance as a selling method. As the number of Internet users
continues to increase with the reduction in cost of Internet access, the
Indian e-tailing market also expands. E-commerce is growing at a rapid
pace in India. The latest data from the Internet and Mobile Association
of India (IAMAI) estimates e-commerce turnover at \$268 million (Rs 11.8
billion) in 2005, and this number is expected to double to \$522 million
(Rs 23 billion) in 2006. Over 440,000 B2C (business-to-consumer)
transactions are made per month through the internet. Besides buying
goods, these deals include booking hotels, net banking, bill payments,
stock trading, job searches and matrimonial searches.

According to IAMAI, e-ticketing for railways and airlines is the biggest
contributor to B2C transactions, followed by gift items like books and
videos, flowers, jewelry, watches and apparels. Other products traded
through e-commerce include: Consumer electronics including mp3 players,
digital cameras, DVD players and home appliances.

The growth in E-Commerce is due in part to the increasing number of
broadband users. According to the Telecom Regulatory Authority of India
(TRAI\'s) quarterly performance indicators, the internet user base has
grown 15 percent from 2004 to 2005, with private operators accounting
for 2.6 million users. Broadband usage has, however, had slow growth
with just over 600,000 subscribers against a target of 3 million by the
end of 2005. TRAI pointed out that the minimum monthly tariff for
broadband had come down to that of dial-up Internet charges for a month
of similar usage. The demand for broadband services had increased, but
the supply was still a cause of concern.

The global technology research firm IDC is also upbeat on the potential
for online shopping in India. Similarly, industry experts believe that
online business-to-business (B2B) commerce will increase substantially
in India because it meets a genuine need and portals offering such
services are built on strong revenue models.

**E-commerce related websites:**

Export assistance website for U.S. companies to locate overseas buyers
and international business partners; <http://www.buyusa.gov/matchmaking>

Agribusiness trade within, to and from India;
<http://www.agriwatch.com/>

Chemicals; <http://www.chemicalhouse.com/>

Commodity intelligence; <http://www.commodityindia.com/>

Food; <http://www.efoodcommerce.com/>

Marketplace for multiple industry sectors;
<http://www.indiamarkets.com/>

Medical industry; <http://www.onhospitals.com/>

Oil industry; [http://www.oilmandi.com](http://www.oilmandi.com/)

Indian packaging industry;
[http://www.packagingindia.com](http://www.packagingindia.com/)

## Trade Promotion and Advertising [**Return to top**](#_Chapter_3:_Selling)

Over the years, the Indian economy has moved from being a controlled,
sellers' market to a buyers' market. In the former, whatever was
produced was sold easily, and advertising was hardly necessary. The
government began dismantling production controls in the mid 1980\'s, and
opened up the economy in 1991. With these developments came increased
competition, and increased advertising. According to the Advertising and
Marketing (A&M) magazine, a leading trade journal, advertising is a \$3
billion industry in India today. In its recent report on the advertising
industry, Hong Kong-based Media Partners Asia (MPA) said that India is
expected to register 12-13 percent growth in advertising expenditures,
next only to Indonesia's 16-18 percent and China's 16-17 percent. The
Indian industry grew 11.5 percent in 2004-05.

Media availability has increased exponentially, competition is
unlimited, budgets are large and expectations of advertising are high.
Practically every aspect of media is available for advertising, from
print to outdoor advertising to satellite channels to movie theaters.

India has a diverse and growing number of daily newspapers. According to
the National Readership Survey (NRS) 2000, the print media reaches 70
percent of urban adults.

According to the National Readership Survey (NRS) 2005, the number of
readers in rural India is now roughly equal to that in urban India
despite the much higher percentage of rural adults overall. The NRS is a
biannual survey of media habits amongst Indians.

U.S. companies have a choice of many advertising and trade promotion
channels in India. The print media, almost completely controlled by the
private sector, is well developed and advertising and promotional
opportunities are available in a large number of newspapers including
daily, weekly or monthly business publications, news magazines and
industry-specific magazines.

[The Times of India](http://timesofindia.indiatimes.com/?) and the
[Hindustan Times](http://www.hindustantimes.com/) are the largest
selling English-language newspapers, with a readership base across
India. Leading business newspapers include the [Business
Standard](http://www.business-standard.com/) and [the Economic
Times](http://economictimes.indiatimes.com/?). Leading magazines include
[India Today](http://www.india-today.com/), Business India, [Business
Today](http://www.business-today.com/btoday/index.jsp), [Business
World](http://www.businessworldindia.com/jan1005/index.asp) and [the
Outlook](http://www.outlookindia.com/). Advertising opportunities are
also available on satellite and cable television channels. Doordarshan,
the government-owned television network, can reach of almost 90 percent
of the population. In addition, more than 80 satellite and cable
television channels, including many U.S. and international channels such
as STAR TV, CNN, NBC, Discovery, National Geographic and BBC, are
available for advertising.

Satellite TV has grown explosively from 134 million viewers in an
average week in 2002 to as many as 190 million viewers in 2005 According
to the National Readership Survey 2000, television reaches 75 percent of
all homes in India. Satellite and cable television penetration is
approximately 85 percent of all urban homes.

Another advertising media is radio, by which the government-owned [All
India Radio](http://allindiaradio.org/) (AIR) reaches over 90 percent of
the population. Private radio channels are restricted to the FM music
channels and are currently available only in a few cities. Radio
improved its performance in urban India (23 percent listen to the
medium, up from 20 percent three years ago) primarily due to FM. Today,
net access is estimated at over 20 million people. Internet advertising
is expected to grow exponentially over the next several years. All the
above media are available in English, Hindi, and a variety of regional
languages.

U.S. companies interested in advertising in any of the above media can
work through the many advertising agencies in India. Many large and
reputable U.S. and other international advertising agencies are present
in India in collaboration with local advertising agencies. The
advertising sector in India is technologically advanced.

In addition to advertising, established public relations firms are also
available to U.S. companies that require such services. In public
relations too, a few U.S. and other international companies are present
in collaboration with local partners.

In India, advertising is no different from other businesses - local
advertising companies that need to have access to the best global
technologies and practices in their industry have global collaborations.
Most major U.S. advertising firms have chosen local Indian partners for
their work in this market. Mumbai remains the center of the advertising
industry in India.

The key to gaining rural market share is increased brand awareness,
complemented by a wide distribution network. Rural markets are best
covered by mass media - India's vast geographical expanse and poor
infrastructure pose problems for other media to be really effective.

U.S. companies can select from a number of quality international trade
fairs, both industry-specific and horizontal, to display and promote
their products and services. The U.S. Department of Commerce (USOC)
certifies a number of Indian trade shows as good venues for U.S.
companies; and the [U.S. Commercial Service
(CS)](http://www.buyusa.gov/india/en/) offices in India directly
organize U.S. participation in a number of selected trade shows every
year. Visit <http://www.buyusa.gov/india/en/135.html> for a list of
trade events supported or organized by CS in India.

Trade development offices of the USOC, U.S. industry associations, and
individual U.S. states organize [trade delegations and
missions](http://www.buyusa.gov/india/en/82.html) to visit India to
explore prospects for doing business with local firms in the private and
public sectors. Participation in such trade missions, whose programs in
India are managed by the U.S. Commercial Service, will be useful for
American companies interested in doing business in India.

The CS in India offers online company listings to U.S. exporters on its
website under its [Featured U.S. Exporters
(FUSE)](http://www.buyusa.gov/india/en/fuse.html) program. FUSE is a
free promotional vehicle, particularly helpful for small and medium
new-to-market U.S. companies. Another promotional option available,
particularly to new-to-market companies, is low cost advertising in
[Commercial News USA (CNUSA)](http://www.export.gov/cnusa/welcome.html).
Although this monthly catalog magazine is circulated world-wide through
[U.S. Commercial Service
offices](http://www.buyusa.gov/india/en/150.html) and is not
country-specific, over 3,000 copies are circulated to selected buyers,
agents/distributors, chambers of commerce and trade associations in
India. The CS also offers business promotional services to U.S.
exporters through [Single Company
Promotions](http://www.buyusa.gov/india/en/bfs.html). U.S. firms
offering services to U.S. exporters and investors interested in India
can sign up for the online CS [Business Service
Providers](http://www.buyusa.gov/india/en/47.html) directory for
business.

## Pricing [**Return to top**](#_Chapter_3:_Selling)

When formulating key strategies and making decisions about product
pricing for the Indian market, it is important to remember that simple
conversion of U.S. dollar prices to Indian rupees will not work in most
cases. Also, the assumption that a latent niche market for premium
products exists, has often resulted in low sales volumes and negligible
returns for some foreign companies. A U.S. company which prices its
products in India rupee equivalent to U.S. dollar prices may fail to
attract the mass consumer and end up with a niche market. For example,
refrigerators offered by a U.S. manufacturer did not sell well because
they were priced 40 percent above Indian brands.

If the product can be imitated easily in terms of quality and service,
international pricing will not work in India because local entrepreneurs
will quickly adopt the same business opportunity. To reduce product
import duties or other local costs and ensure a stable market share,
several U.S. and other foreign companies have set up product assembly
shops in India. Pricing decisions have some bearing on product
packaging. Many consumer product suppliers have found it helpful to
package smaller portions at reduced prices rather than \"economy\"
sizes. While the Indian consumer will pay a little extra to ensure that
he gets quality and value for money, he may not be able to afford the
higher prices of attractive packaging which many multinational companies
have developed.

Although some Indian consumers are aware of quality differences and
insist on world-class products, many customers can sacrifice quality
concerns for price reductions. In East Asia, Europe, and North America
for example, laser printers and ink jet printers have almost eliminated
the dot matrix printer from homes and offices. In India, dot matrix
printers are still used in business correspondence by some industrial
groups. The price advantage of this older technology has extended its
lifetime in this market.

Bargaining for the best price is a routine process of the buyer and
seller in India. For consumer goods, especially for durables, the
sellers often give discounts on the listed prices, during festive
seasons, to attract more customers. Trade-ins of old products for new
items are also increasingly popular among consumers. A pricing strategy
must consider all these factors.

Another key consideration in pricing is Indian import tariffs. These are
high for most products, especially consumer products. There are pockets
of affluent Indians who can afford to buy a variety of luxury branded
goods. However, in general, consumer consumption patterns are very
different from those in many other countries. The middle class is
growing exponentially, providing a fertile market for moderately priced
items, but the prohibitive import tariffs may serve to move some items
out of the reach of the Indian Middle Class consumer.

The new ruling Congress government has made implementing Value Added Tax
(VAT) one of its key priorities. VAT at a rate of 12.5 percent is in
effect from April 1, 2005 in many States. The tax is designed to make
accounting more transparent, cut trade barriers and boost tax
revenues**.**

Since January, 2001, under Indian law, it is mandatory for all
pre-packaged goods intended for direct retail sale imported into India
to bear labeling declarations. (For more information, see Chapter 5,
[Labeling and Marking Requirements](#_Hlk93466472))

## Sales Service/Customer Support [**Return to top**](#_Chapter_3:_Selling)

An important consideration during a purchase decision is the quality of
after-sales service by the seller. To retain customer loyalty, local and
multinational companies are increasingly focusing on after-sales service
and customer support as a means of offering their consumers more value.
India has a diversified industrial base. Indian consumers are familiar
with a variety of locally available products and services. Domestic
manufacturers have the added advantage of knowing their territories
well. This makes it important for U.S. companies in this market to
highlight their superior quality, innovative product features and after
sales service in their selling efforts.

Engineering support for manufacturing technologies, medical equipment,
state-of-the-art products and processes are required for successful
sales to private firms, or to the Government of India, or one of its
public enterprises. There are plenty of technically qualified workers in
India available at reasonable rates to undertake customer support
services, but these technicians must be properly trained. Most foreign
companies doing business in India either have their own maintenance
service centers or appoint well-trained service agents in the major
Indian cities.

Call centers are burgeoning with overseas and Indian firms setting up
centers for both domestic and international clients. In the face of
intensifying competition, call centers are becoming an effective way to
improve customer service.

Indian consumers are now getting increasingly aware of their rights and
are demanding more from manufacturers. Several web sites on consumer
rights have been launched to create such awareness, one of which is
<http://www.planetcustomer.com/>. Several Indian consumer awareness
magazines exist to inform Indian consumers of their rights, and provide
a comprehensive source of independent, objective information.

## Protecting Your Intellectual Property [**Return to top**](#_Chapter_3:_Selling)

Intellectual property protection in India is improving in the patent
area as a result of expanded patent coverage effective January 1, 2005.
However, large-scale copyright piracy, especially in the software,
optical media, and publishing industries continues to be a major
problem.

**Patents:** On December 27, 2004, the GOI issued a Patent Amendment
Ordinance just ahead of India's January 1, 2005 WTO Agreement on
Trade-Related Aspects of Intellectual Property Rights (TRIPS) deadline
to enact product patent protection. On March 23, 2005, the Indian
Parliament approved legislation to make permanent the change to India\'s
patent law that the GOI had introduced by temporary ordinance in
December 2004. The implementing regulations to enact the changed law
came into effect January 1, 2005. The new law extends product patent
protection to pharmaceuticals and agricultural chemicals. However, the
new law lacks specificity in several important areas such as compulsory
license triggers and defining the scope of inventions with patent
potential. There is also a large backlog in pending patent applications
resulting in long waiting periods for patent approval. The GOI is
currently reviewing legislation and implementing regulations to address
these deficiencies.

India provides protection for plant varieties through the Plant
Varieties and Farmers' Rights Act.

Indian law does not provide for protection against unfair commercial use
of test or other data that companies submit to the government in order
to obtain marketing approval for their pharmaceutical or agricultural
chemical products. The GOI is currently reviewing legislation for
submission to Parliament in 2006 to provide for some form of data
protection. Without specific protection against unfair commercial use of
clinical test data, companies in India are able to copy certain
pharmaceutical products and seek immediate government approval for
marketing based on the original developer\'s data. Recognizing the role
that TRIPS-consistent protection plays in fostering innovation and
investment, a small, but growing, domestic Indian constituency,
comprised of Indian pharmaceutical companies, technology firms and
educational and research institutions, favors changes to improve
protection of data.

**Copyrights:** U.S. industry estimates that, in 2004, lost sales
resulting from piracy in India of U.S. motion pictures, sound recordings
and musical compositions, computer programs, and books totaled about
\$484 million.

The Information Technology Act of 2000 includes penalties for the
unauthorized copying of computer software. Penalties of up to \$240,000
can be applied to unauthorized copying. Also, the penalty affords no
immunity from prosecution under other laws.

The GOI is not a party to either the 1996 WIPO Copyright Treaty (WCT) or
the WIPO Performances and Phonograms Treaty (WPPT). A "core group" of
GOI officials, local industry representatives, academics and lawyers has
been discussing amendments to the Indian Copyright Act that would enable
India to implement these treaties. It has yet to introduce the necessary
amending legislation.

The Indian Constitution delegates enforcement responsibility to the
state governments. The central government can pass laws but the states
are responsible for implementing them. The Central Bureau of
Investigation (CBI), for example, which has inter-state jurisdiction,
does not pursue IPR-related cases. The state, municipal or local police
forces - although untrained - are charged with enforcing IPR laws.

Piracy of copyrighted materials (particularly software, films, popular
fiction works and certain textbooks) remains a problem for both U.S. and
Indian producers. India has not adopted an optical disc law to deal with
optical media piracy, although inter-ministerial consultations to
examine this option are now underway. Classification of copyright and
trademark infringements as \"cognizable offenses\" has expanded police
search and seizure authority. The law provides for minimum criminal
penalties, including mandatory minimum jail terms. If implemented, these
penalties could effectively deter piracy. Due to backlogs in the court
system and documentary and other procedural requirements, few cases
recently have been prosecuted. U.S. and Indian industry report that
piracy levels in all sectors remain high.

Cable television piracy continues to be a significant problem, with
estimates of tens of thousands of illegal systems in operation in India.
Copyrighted U.S. product is transmitted over this medium without
authorization, often using pirated videocassettes, VCDs, or DVDs as
source materials. This widespread copyright infringement has a
significant detrimental effect on all motion picture market segments in
India - theatrical, home video and television. For instance, pirated
videos are available in major cities before their local theatrical
release. The proliferation of unregulated cable TV operators has led to
cable piracy.

**Trademarks:** The Government of India has pledged to upgrade its
trademark regime. Upgrades include national treatment for the use of
trademarks owned by foreign proprietors, statutory protection of service
marks, and clarification of the conditions under which the cancellation
of a mark due to non-use is justified. India's trademark legislation
provides protection for service marks. Although enforcement is
improving, protection of foreign marks in India remains difficult.

The required registration of a trademark license (described by U.S.
industry as highly bureaucratic and time-consuming) can be refused on
such grounds as \"not in the public interest,\" \"will not promote
domestic industry,\" or for \"balance of payments reasons.\" The Foreign
Exchange Management Act 1999 (FEMA) restricts the use of trademarks by
foreign firms unless they invest in India or supply technology.

**Enforcement:** India's criminal justice system does not effectively
support the protection of intellectual property. India's criminal IPR
enforcement regime, including border protection against counterfeit and
pirated goods, remains weak. There have been few reported convictions
for copyright infringements resulting from raids, including raids
against recidivists. Adjudication of cases is extremely slow. Police
action against pirates of motion pictures has improved somewhat since
2003. Obstruction of raids, leaks of confidential information, delays in
criminal case preparation and the lack of adequately trained officials
have further hampered the criminal enforcement process.

(For additional information, go to Chapter 6, [Protection of Property
Rights](#_Protection_of_Property))

## Understanding Indian Business Law [**Return to top**](#_Chapter_3:_Selling)

In no way is the following information meant to satisfy the need to hire
competent and local legal counsel. Rather it is meant only to assist in
asking the right questions.

###### **THE ROLE OF THE INDIAN LAWYER**

The role of the attorney in India is much the same as that in the United
States. India shares the Common Law System with the U.S., U.K. and
Australia. Many Indian statutes and procedures are drawn from those
legal Codes. In fact, there are many Indian attorneys with LLM degrees
from U.S. and internationally recognized programs. In addition, several
U.S. law firms have begun partnering with Indian firms, although they
are currently prohibited from directly practicing in India. In addition,
Indian attorneys are prohibited from direct advertising although the
U.S. Foreign Commercial Service and U.S. Embassies and Consulates do
maintain lists of suggested attorneys. Although the Indian legal system
is effective and the rule of law is strong, case backlogs can create
lengthy delays. As in the U.S., Indian attorneys are governed by rules
of ethics that include requiring confidentiality to a client. Indian
attorneys may also be held liable to a client for professional
malpractice.

Unless otherwise noted, all Statutes and Rules can be found online at:

<http://www.indialawinfo.com/bareacts/mainbare.html>

**KEY BUSINESS LAW PROVISIONS:**

###### **Indian Contract Act, 1872**

-   Fundamental principles are very similar to U.S. contract law and
    include such requirements as offer, acceptance, consideration and
    privity of contract.

-   Specific Performance can be granted under the terms of the Specific
    Relief Act, 1963.

###### **Companies Act, 1956, Amended 2000**

-   Governs entities incorporated in India or foreign entities with a
    physical presence in India.

-   Principal forms of business entities are sole proprietorships,
    partnerships and corporations.

###### **Intellectual Property Protections** 

-   Signatory of the General Agreement on Tariffs and Trade (GATT) and
    the TRIPS agreement of the WTO. The Government of India is working
    hard for full compliance with these agreements.

#### Copyright Protection

-   Copyright Act, 1957, amended 1999 -- reflects the Berne Convention
    on Copyrights.

##### Trademark Protection

-   Trade and Merchandise Marks Act, 1958. Repealed and replaced by the
    Trade Marks Act, 1999. Effective September 2003.

**Patent Protection**

-   Patents Act, 1970, amended 1999.

-   India is a party to the Paris Convention, GATT and TRIPS agreements.

**INDIAN LABOR LAWS (India is a member of the International Labour
Organisation.)**

###### **Industrial Disputes Act, 1947**

-   Governs labor issues and prohibits unfair labor practices.

###### **Maternity Benefit Act, 1961**

-   Provides leave and other benefits to qualifying women both during
    and after pregnancy.

###### **Payment of Bonus Act, 1965**

-   Requires the payment of an annual bonus to qualifying workers even
    if the company is not profitable in the given year.

###### **Payment of Gratuity Act, 1972**

-   Requires the payment of a gratuity to qualifying workers upon
    retirement, resignation or disability. Gratuity is paid at a
    statutory minimum rate.

###### **Workmen's Compensation Act, 1923**

-   Like the U.S. Act, requires the payment of a statutory minimum
    amount upon the injury or death of a qualifying employee when the
    injury or death is suffered during the course of employment.

###### **Industrial Employment (Standing Orders) Act, 1946**

-   Requires employers clearly define the conditions of employment to
    qualifying employees.

-   Employers falling under the Act that have not certified the terms of
    employment may fall temporarily under Model Standing Orders of the
    Industrial Employment (Standing Orders) Central Rules, 1946.

-   http://www.labour.nic.in/act/acts/IndustrialEmploymentAct.doc

###### **Minimum Wages Act, 1948**

-   Qualifying employees must be a paid minimum wage. The amount is
    determined by the Central Government.

###### **Payment of Wages Act, 1936**

-   Proscribes the terms of payment of wages for qualifying low income
    employees.

#### 

###### **Employees Provident Fun and Misc. Provisions Act, 1952**

-   Creates a system of compulsory savings for qualifying employees.

###### **ANTI-TRUST REGULATIONS**

#### Monopolies and Restrictive Trade Practices Act, 1969

-   Act is being repealed by the Competition Act, 2002 (No. XII, 2003)
    which was signed into law on 13 January 2003, though the Central
    Government has only put into effect certain provisions of the new
    Act.

-   Prohibits restrictive trade practices, unfair trade practices and
    monopolistic trade practices.

-   Regulated by the Monopolies and Restrictive Trade Practices
    Commission.

###### **Competition Act, 2002**

-   Will replace the Monopolies and Restrictive Trade Practices Act.

-   Prohibits anti-competitive agreements, abuse of dominant position,
    and regulates corporate combinations, while establishing the powers,
    functions and duties of the Competition Commission of India, a
    quasi-judicial regulatory body.

###### **Consumer Protection Act, 1986**

-   Any entity providing goods or services must avoid unfair or
    restrictive trade practices as defined by the Act.

-   Establishes councils among other mechanisms to settle consumer
    disputes.

###### **MERGERS AND ACQUISITIONS**

-   Governed by the Substantial Acquisition of Shares and Takeovers
    Regulations, 1997 which is administered by Securities and Exchange
    Board of India and is also known as the Takeover Code.

-   Provides a regulatory framework and protection to small investors.

###### **CORPORATE TAXATION**

-   Governed by the Ministry of Finance, Central Board of Direct Taxes.

-   Corporate tax rate of 40 percent as of 2004.

-   Special deductions and incentives are available for many industries
    particularly those associated with products for export.

#### 

#### ARBITRATION AND CONCILIATION ACT, 1996

-   Consolidates laws related to domestic arbitration, international
    commercial arbitration, and enforcement of foreign arbitration
    awards. Based on the Model Law on International Commercial
    Arbitration adopted by the United Nations Commission on
    International Trade Law (UNCITRAL) in 1985.

## Due Diligence [**Return to top**](#_Chapter_3:_Selling)

It is prudent to exercise normal business caution when dealing with
Indian entities. The

Embassy recommends performing due diligence checks on Indian agents,
business partners, contractors, subcontractors and customers. The
Commercial Service can assist due diligence efforts through its
International Company Profile (ICP) service.

The International Company Profile (ICP) service helps U.S. companies
evaluate potential business partners by providing a detailed report on
overseas companies. A standard ICP report includes information on the
local firm's size and revenue, organization, background, imports,
financial information and key customers. It also provides advice on the
reliability and relative strength of the company in the Indian market.
The ICP service keeps the name of the U.S. client confidential. The
report is prepared on the basis of a personal visit to the local firm's
office facility. The credibility of the local firm is checked through
client, bank, and trade association affiliations. The ICP report is
available in 7 Indian cities where the Commercial Service maintains
offices: [New Delhi, Mumbai, Chennai, Calcutta, Bangalore, Hyderabad and
Ahmedabad.](http://www.buyusa.gov/india/en/150.html)

An ICP report can be requested from a U.S. Export Assistance Center in
the U.S. An

ICP can also be requested from Ms. Renie Subin, country-wide ICP
coordinator for India

(Tel: 91-11-2331 6841; Fax: 91-11-2331 5172; e-mail:
<renie.subin@mail.doc.gov>).

Prior to confirming an ICP request, the U.S. client needs to provide
complete contact information for the local firm to facilitate clear
identification and contact. The ICP report is delivered within ten
working days from the date of acceptance. The cost of a standard ICP
report is \$400.

For local firms located in Indian cities where The U.S. Commercial
Service does not have a presence, U.S. clients can conduct due diligence
through the following private firms:

[Dun & Bradstreet India Private
Limited](http://www.dnb.co.in/default.asp)

703/704, 7th Floor,

International Trade Tower,

Nehru Place,

New Delhi- 110019

Tel: 91-11-51497900 / 01

Fax: 91-11-51497902

The cost of a standard background report on an Indian entity is
approximately \$300.

Kroll Associates conducts pre-transaction research and assesses critical
information on potential joint venture partners.

[Kroll Background Worldwide
India](http://www.krollworldwide.com/regions/asia/)

U&I Corporate Centre

Suite no. 25

U&I Corporate Centre

Plot No. 47, Sector 32

Gurgaon, Haryana 122 002

Tel: 91-124-510 9075

Fax: 91-124-510 9077

[BLS Detectives Ltd.](http://www.blsdetectives.com/)

Mr. R. Pratap/Ms. Charu

Sr. Vice President (Business Promotion/Sr. Vice President)

912 Indra Prakash

21, Barakhamba Road, New Delhi 110 021

Tel: 91-11-23715283; 23716531; 23755263; 23310658

Fax: 91-11-23755264

Email: <charu@blsdetectives.com>[; blsdet@touchtelindia.net]{.underline}

## Local Professional Services [**Return to top**](#_Chapter_3:_Selling)

The U.S. Commercial Service maintains an online [Business Service
Providers](http://www.buyusa.gov/india/en/47.html) directory to help
U.S. firms locate experienced Indian and U.S. firms offering services to
U.S. exporters and investors interested in doing business in India.

Since the Indian government controls inbound investments, it is useful
to have a local attorney who can advise on investment options,
structuring of the Indian operations and how best to establish a
business presence in India, whether by way of subsidiaries, joint
ventures, branch offices or liaison offices. In most cases, the
investor, in order to do business in India, will have to deal with a
number of government departments/ officials and to comply with many
rules, regulations and procedures that invariably lead to delays.

Doing business in India is difficult because the Indian market is a
complex one, with some laws dating back to the 1900's, and some enacted
or amended as a result of the economic liberalization process that began
in 1991. Like the U.S., India has adopted the British common law system.

Court delays are common and often lengthy. Firms undertaking complex
projects must consider this in developing project timelines and factor
in the costs of legal expenses and project delays.

Following economic liberalization, there has been increased inflow of
investment in power, telecommunications, banking, institutional
investments, oil and gas, construction and capital markets. Due to the
substantial nature of many of these projects, standard agreements have
given way to legally sophisticated and specialized agreements.

Several local law firms are well equipped to serve multinational and
foreign companies.

They offer the full range of legal and tax services and have the
expertise to work with international law firms as needed.

Billing for legal services has become extremely flexible in India.
Attorneys are proposing a combination of discounted fees, blended hourly
rates, partly deferred fees, overall caps and/or lump sum fees.

For large-scale projects, U.S. developers will encounter public interest
litigation and media reaction among the most challenging variables. They
must be prepared to furnish substantial information, and patiently
refute misleading allegations. It is imperative to have a capable local
attorney to help manage these situations, and an effective public
relations effort to maintain an objective, positive image.

In India, there are an increasing number of agreements that provide for
arbitration, in the event of disputes between the parties, as litigation
in the country is a time consuming, cumbersome and expensive process.
Local attorneys can assist in litigation but also have developed the
expertise to handle international arbitration. The more progressive
local attorneys are developing additional expertise in specific areas by
hiring industry professionals and professionals from other law and
accounting firms. Many spend considerable non-billable time in research,
to increase their knowledge and information base and to shorten their
response time.

Most major U.S. international law firms have existing correspondent or
informal relationships with leading solicitors and advocates in India.
Several U.S. law firms have partner offices in India with local law
firms. Indian bar associations regard the entry of foreign law firms as
a competitive threat to their existing business. Local law firms
advocate that the Government of India should restrict entry only to
firms from nations that grant reciprocal treatment to Indian law firms.
The U.S. Embassy may not recommend any specific individual or firm to
supply legal services to U.S. companies. However, the U.S. Commercial
Service does maintain a list of such firms who are used by the local
offices of U.S. corporations. **This list is available on request.**

## Web Resources [**Return to top**](#_Chapter_3:_Selling)

-   U.S. Commercial Service: <http://www.buyusa.gov/india/en/>

-   U.S. Government Export Portal: <http://www.export.gov/comm_svc/>

-   American Chamber of Commerce, India:
    <http://www.amchamindia.com/amcham/home/home.xml>

-   U.S. India Business Council: <http://www.usibc.com/>

-   Confederation of Indian Industry: <http://www.ciionline.org/>

-   Federation of Indian Chambers of Commerce and Industry:
    <http://www.ficci.com/ficci/index.htm>

-   The Franchising Association of India,
    [www.Fai.co.in](http://www.Fai.co.in/)

-   Reserve Bank of India: <http://www.rbi.org.in/>

-   Government of India Directory: <http://goidirectory.nic.in/>

-   Government of India Ministry of Finance: <http://finmin.nic.in/>

-   Government of India Ministry of Commerce and Industry:
    [http://commin.nic.in](http://commin.nic.in/)

-   Foreign Exchange Management Act:
    <http://www.rbi.org.in/index.dll/25/sectionhomepage>

-   CRISIL online (similar to Better Business Bureau in U.S.):
    <http://www.crisilonline.com/RatingsSite/Brochureware/index.jsp>

-   The Times of India: <http://timesofindia.indiatimes.com/>

-   The Economic Times: <http://economictimes.indiatimes.com/>

-   Business Standard: <http://www.business-standard.com/>

-   The Financial Express: <http://www.financialexpress.com/index.php>

-   Ministry of Defence, Instruction on Agents of Foreign Sellers:
    <http://mod.nic.in/newadditions/repagent.htm>

[Return to table of
contents](#doing-business-in-india-a-country-commercial-guide-for-u.s.-companies)

[[]{#ch4 .anchor}Return to table of
contents](#doing-business-in-india-a-country-commercial-guide-for-u.s.-companies)

# Chapter 4: Leading Sectors for U.S. Export and Investment 

**Commercial Sectors**

-   [Airport and Ground Handling](#airport-and-ground-handling)

-   [Computers and Peripherals](#computers-and-peripherals)

-   [Education Services](#education-services)

-   [Electric Power Generation, Distribution and Transmission
    Equipment](#electric-power-generation-distribution-and-transmission-equipment)

-   [Food Processing & Cold Storage
    Equipment](#food-processing-cold-storage-equipment)

-   [Machine Tools](#machine-tools)

-   [Medical Equipment](#medical-equipment)

-   [Mining and Mineral Processing
    Equipment](#mining-and-mineral-processing-equipment)

-   [Oil and Gas Field Machinery](#oil-and-gas-field-machinery)

-   [Pollution Control Equipment](#pollution-control-equipment)

-   [[Safety and Security
    Equipment]{.underline}](#safety-and-security-equipment)

-   [Telecommunications Equipment](#_Telecommunications_Equipment)

-   [Textile Machinery](#textile-machinery)

-   [Water](#water)

> [**Agricultural Sectors**](#agricultural-sectors-return-to-top)

-   [Cotton](#cotton-return-to-top)

-   [Tree Nuts and Dry Fruit](#tree-nuts-and-dry-fruits-return-to-top)

-   [Wood Products](#wood-products-return-to-top)

-   [Fresh Fruits](#fresh-fruits-return-to-top)

-   [Pulses](#pulses-return-to-top)

-   [Vegetable Oil](#vegetable-oil-return-to-top)

-   [Planting seeds](#planting-seeds-return-to-top)

-   [[Snack foods]{.underline}](#snack-foods-return-to-top)

-   [Hides and skins](#hides-and-skins-return-to-top)

**COMMERCIAL SECTORS**

  --------------------- ---------- ---------- ---------- ---------- ------- ---------
  **Overall U.S. Trade                                                      
  with India, 2001 --                                                       
  2004 (\$ million)**                                                       

                        Total                                       %Chg.   

                        2001       2002       2003       2004               04/03

  EXPORTS, FAS by value 3,757.0    4,101.1    4,979.7    6,095.0            22.4%

  IMPORTS, Customs      9,737.2    11,818.3   13,055.3   15,562.2           19.2%
  value                                                                     

  BALANCE, Customs      -5,980.1   -7,717.3   -8,075.6   -9,467.2           17.2%
  value                                                                     

  TURNOVER              13,494.2   15,919.4   18,035.0   21,657.2           20.1%
  --------------------- ---------- ---------- ---------- ---------- ------- ---------

Source: U.S. International Trade Commission, Dataweb, revised Feb 2005.

(Following are the top 15 leading sectors for U.S. exports and
investment in alphabetical order)

## Airport and Ground Handling

### Overview [**Return to top**](#ch4)

  ------------------------ -------------- ------------ -------------------
                           **2003**       **2004**     **2005
                                                       (estimated)**

  Total Market Size        228            239          255

  Total Local Production   159            167          175

  Total Exports            33             38           40

  Total Imports            102            110          120

  Imports from the U.S.    47             51           60
  ------------------------ -------------- ------------ -------------------

(Note: These are unofficial estimates. Exchange rate: \$1=INR 45; Figure
in \$ Millions)

The civil aviation sector has witnessed substantial developments in the
last couple of years. However, on the crucial issues of privatization,
the federal government continues to delay decisions primarily because of
political compulsions of coalition politics. So, while the federal
government has finally recognized the importance of sector reform, it
does not have the legislative muscle to push through such reforms.

The present market size for airport equipment and ground handling
services is estimated to be \$230 million. Successful privatization of
airport maintenance and ground handling services will lead to \$50
million or more in market growth over the next three years.

Although privatization is a sensitive issue, the government has managed
to bring about significant changes in the framework that governs sector
investments. For example, the foreign investment limit has been raised
from 40 percent to 49 percent and NRI (non-resident Indian) investments
up to 100 percent are now allowed in domestic airlines without any
government approval. In addition, the international airline sector has
recently opened up to Indian private sector airlines.

The Federal Ministry of Civil Aviation is the governing Indian agency
for this sector. The 2005-2006 interim budget grants civil aviation
\$528 million. The Airports Authority of India (AAI), which governs all
Indian airports, is budgeted an additional \$200 million. AAI manages
126 airports, which include 11 international airports, 89 domestic
airports and 26 civil enclaves at defense airfields.

In the near future, investment revenue will be used not just for the
purchase of aircraft, but will also include the development of airport
infrastructure. Among the scheduled projects:

**Mumbai airport:**

Construction of four additional domestic parking bays

Construction of a new taxiway parallel to the secondary runway

Expansion and upgrade of terminal 1B

**Delhi airport:**

Construction of a new rapid taxi track, connecting runway 10/28 and P
taxi track

Modification and expansion of terminal 1B arrival block

Provision for a visual docking guidance system

**Chennai airport:**

Construction of an apron for Bay 35

Extension of the canopy on the city side of Kamraj domestic terminal

Creation of aero links for bays 24, 25 and 29

**Kolkata airport:**

Renovation of Bays 11 and 12

Construction of a new hangar

Construction of a cargo apron

The AAI also controls the ground-handling sector and provides Air
Traffic Management Services for the entire Indian Air Space and
adjoining oceanic areas, with ground operations at all airports and 25
other locations to ensure flight safety.

Statistics for Indian airports (April to March 2004-05)

  ----------------- ------------------- ------------------ ---------------
  Particulars       International       Domestic           Total

  Aircraft movement 158,191             571,827            730,018

  Passengers        19,451,146          40,095,663         59,546,809

  Cargo (in tons)   824,876             465,036            1,289,912
  ----------------- ------------------- ------------------ ---------------

### Best Products/Services [**Return to top**](#ch4)

The most promising sub-sectors in the airport equipment and
ground-handling services continue to be technology-driven communication
and ground services. The AAI has an annual budget of approximately \$60
million for procurement of equipment that are dependent on foreign
technology.

As part of the ongoing modernization and expansion of some airports, new
state-of-the-art Instrument Landing Systems/ Air Traffic Management
(ATM) systems have been installed or upgraded and passenger and cargo
terminals have been expanded. In addition, various
civil/aerodrome/passenger facilitation works have now been completed at
the following airports: Delhi, Mumbai, Kolkata, Chennai,
Thiruvananthapuram, Bangalore, Jabalpur, Pathankot, Ahmedabad, Calicut,
Dibrugarh, Gaggal, Lucknow, Bhavnagar, Porbandar, Nagpur, Imphal,
Rajamundry, Amritsar, Agartala, Hyderabad, Varanasi, Kullu, Jaipur,
Lilabari, Leh, Srinagar, Rajkot, Madurai, Dimapur and Vishakhapatnam.

### Opportunities [**Return to top**](#ch4)

The Indian Ministry of Civil Aviation is also addressing other important
issues that will result in long-to-medium term opportunities for U.S.
companies. These opportunities include decreasing the systematic cost in
the sector and determining the appropriate mechanism for providing air
services to remote and commercially unviable sectors as part of a
comprehensive long-term civil aviation policy. Also, an independent
regulatory authority is being planned for the sector. This measure will
increase competition, and bring about level-playing field in the sector
that has traditionally been dominated by the federal government.

### Resources [**Return to top**](#ch4)

**Ministry of Civil Aviation:**

Mr. Praful Patel

Minister of State (Independent charge)

Ministry of Civil Aviation,

Rajiv Gandhi Bhawan,

Safdarjung airport

New Delhi 110003

Telephone: +91-11-24610350

Fax: +91-11-23713344

E-mail: <praful@sansad.nic.in>

<webdesk@civilav.delhi.nic.in>

Website:
[http://www.civilaviation.nic.in](http://www.civilaviation.nic.in/)

**Airports Authority of India:**

K. Ramalingam

Chairman

AAI

Rajiv Gandhi Bhawan,

Safdarjung airport

New Delhi 110003

Telephone: +91-11-24632930

Fax: +91-11- 24641088

E-mail: <aaichmn@nda.vsnl.net.in>

Website:
[http://www.airportsindia.org.in](http://www.airportsindia.org.in/)

**Director General of Civil Aviation:**

Aurbindo Marg,

Opp. Safdarjung Airport,

New Delhi 110 003

Telephone: +91-11-24622495

Fax: +91-11-24629221

E-mail: <dri@dgca.delhi.nic.in>

Website: <http://dgca.nic.in/sitemap.htm>

## Computers and Peripherals

### Overview [**Return to top**](#ch4)

  ------------------------ -------------- ------------ -------------------
                           **2003**       **2004**     **2005
                                                       (estimated)**

  Total Market Size        5,610          6,300        6,400

  Total Local Production   4,830          5,600        5,900

  Total Exports            600            700          980

  Total Imports            1,380          1,400        1,480

  Imports from the U.S.    550            750          900
  ------------------------ -------------- ------------ -------------------

(Note: These are unofficial estimates. Exchange rate \$1=INR 45; Figure
in \$ Millions)

The Indian computer and peripherals market is expected to continue to
expand to meet local demands. The high growth in the industry can be
attributed to an increase in consumption in the telecommunication,
banking and financial services, manufacturing, retail, and Business
Process Outsourcing (BPO)/IT-enabled services. This highly price
sensitive market has responded positively to the drop in prices,
especially at the

entry-level. Private sector firms, government offices, small and
medium-sized enterprises (SME's), and small office home office (SOHO)
users also continued to computerize their operations, contributing to
the growth of the computer hardware market.

The Indian Information Technology industry is expected to grow 34
percent to \$28 billion in 2005-2006, and both the domestic market and
exports will share the same growth. The next two years are expected to
be extremely positive for the Indian IT sector. Over 150 small, medium
and large firms will manufacture computers in India during this period.
Many multi-national companies (MNCs) such as HP, IBM, Siemens, Dell, and
ACER already have a strong manufacturing presence in India. Lesser-known
companies assembled PC and these Indian branded PCs now also compete
with MNC products. MNC brands still accounted for 37 percent of the
market but the remainder was locally assembled.

In the first half of 2005, the desktop PC market registered a growth of
five percent over the same period in 2004. Notebooks sales touched a
record 123 percent growth during the last half-year of 2005 over 2004.
The high growth is attributed to the steep drop in the notebook prices,
as the prices are now even comparable to many desktops in certain cases.

Server sales were also buoyant in the first quarter of 2005-2006
recording sales of over 21,500 units. The laser printers market also
grew at the same time by 89 percent and dot matrix printers by 21
percent.

### Best Prospects/Services [**Return to top**](#ch4)

The market size of the various segments is given below:

**Sub Sectors Market Size in 2005 (Estimates in \$million)**

Desktops 2,100

Notebooks 360

Total Servers 560

Total Peripherals 1,300

### Opportunities [**Return to top**](#ch4)

Significant opportunities exist for the American companies to supply
high-end computers, servers, and peripherals to India. U.S. companies
such as HP, Dell, Cisco, GE, Lucent Technologies, Hughes, and Motorola
are already in India selling computers and peripherals. Major Indian and
U.S. software and services companies such as Microsoft, Cisco, Cognizant
Technologies, IBM, GE, Oracle, Infosys, Wipro, and Texas Instruments
import and use high performance computer systems for their development
projects. In addition, opportunities exist in major Indian and
international banks, insurance companies, the Indian stock markets,
Indian railways, and airlines where high performance computers,
including mainframes and mid-sized computers are used.

### Resources [**Return to top**](#ch4)

Source: Estimates are based on the literature from the following
sources:

-   Manufacturers Association of Information Technology (MAIT),
    [http://www.mait.com](http://www.mait.com/)

-   National Association of Software and Service Companies (NASSCOM),
    [http://www.nasscom.org](http://www.nasscom.org/)

-   The Hindu, Survey of Indian Industry.

-   India Infoline,
    [http://www.indiainfoline.com](http://www.indiainfoline.com/)

-   Data Quest and IDC statistics

-   Newspapers and other media reports.

## Education Services

### Overview [**Return to top**](#ch4)

  ------------------------ -------------- ------------ -------------------
                           **2003**       **2004**     **2005
                                                       (estimated)**

  Total Market Size        5162           5699         6016

  Total Local Production   3042           3346         3509

  Total Exports            N/A            N/A          N/A

  Total Imports            2120           2353         2507

  Imports from the U.S.    1607           1622         1703
  ------------------------ -------------- ------------ -------------------

(Note: These are unofficial estimates. Exchange rate \$1=INR 45; Figure
in \$ Millions)

In 2004-05, India remained the largest source of international students
in U.S. universities, for the fourth consecutive year. There are
currently 80,466 Indian students in the U.S representing 14.2 percent of
all international students. While overall foreign student enrollment
remained fairly steady, Indian student enrollment increased 1 percent
during 2004-2005. Nonetheless, this rate of growth is considerably lower
than the prior year's 7 percent growth. Misperceptions about access to
U.S. universities and visas are the primary reasons for this decline

Majority of the Indian students study in the United States at the
graduate level. In 2004/05, their breakdown was as follows:

  ----------- -------------------- --------------------------------------
  72.0%       Graduate students    57976

  20.0%       Undergraduate        16443

  7.5%        Other                6047
  ----------- -------------------- --------------------------------------

Source: Open Doors: Report on International Educational Exchange, Nov
2005

According to the Executive Director, U.S. Educational Foundation in
India (USEFI), Indian students continue to enroll in the U.S. in record
numbers. They recognize that higher education in the U.S. enhances their
career prospects. That the growth in Indian student enrollments was 1
percent this year is not surprising after the double-digit increases of
the last three years, as there are bound to be fluctuations. With 80,466
Indian students, that 1 percent increase is still a sizeable figure.

Combining the magnitude of demand for higher education in India, the
value Indian families place on U.S. higher education, and the
availability of student loans, there will continue to be steady interest
by Indian students to enroll in U.S. universities. Students find that
the investment they make in U.S. education is a good value given future
career opportunities. Student loans are more readily available in India
than ever before.

India has one of the largest and oldest systems of higher education.
There are 320 universities, of which 131 have affiliated universities.
In addition, there are private and accredited universities, institutions
of national importance, independent institutes and over 15,500 colleges.
Together they offer a wide range of degree and diploma programs.

However, despite such large numbers, demand outstrips supply by a wide
margin. There are approximately 9.5 million students enrolled in higher
education in India. This number is projected to rise to 11 million over
the next three years. Competition is fierce for limited seats in
competitive engineering and management programs. Reservation policies, a
quota system designed to promote education opportunities for
underprivileged groups in India, further limits enrollment opportunities
for many Indians. These, combined with other factors, help make a
foreign education an attractive option for Indian students, particularly
those from affluent, English-speaking sections of Indian society.

More than half of all Indian students studying overseas choose U.S.
universities. The attraction of a U.S. education can be attributed to:

1\. The variety and flexibility of the U.S. education system

2\. U.S. educational system's grounding in practical and career-focused
training.

3\. Post graduation career opportunities in the U. S.

NAFSA (Association of International Educators) estimates that all
foreign students and their dependents contributed more than \$13.3
billion to the U.S. economy during the academic year 2004-2005. It is
estimated that the average annual expenditure of an Indian student
studying in the United States is \$20,000. By this estimate, the Indian
student population contributed approximately \$1.6 billion to the U.S.
economy in 2004.

With India fast emerging as a dynamic economy focusing on
knowledge-based activities, there is a surge in demand for professionals
who are in tune with modern business practices. However, not all of the
students can afford the high cost of education overseas and living
abroad. Home delivery of foreign education is gaining popularity among
this sector of students. Foreign universities with campuses in India or
"tie-ups" of educational institutions with foreign universities are now
offering an alternative to studying abroad. In addition, new "twinning"
programs, or cooperative programs between Indian and foreign
institutions have also increased the availability of a lower cost
education for this segment.

According to a report by the National Institute of Educational Planning
and Administration (NEIPA) there are six types of operations by foreign
education providers in India:

1\. **Twinning**: Students undertake a part of their study in India and
part abroad in a foreign university

2\. **Franchisee**: A foreign institution grants permission to an
institution in India to execute their programs with their name,
curriculum and evaluation methods

3\. **Study and examination centers**: The foreign education partner
establishes and agreement with the Indian-institution to deliver its
courses and also conduct examinations

4\. **Multiple collaborations**: An Indian institution establishes
relationships with multiple degree providers abroad

5\. **Link programs**: Partial credits are given for courses conducted
in India while the balance of the courses are taken abroad. The
difference between a Link program and Twinning is that Link programs
grant a degree by the foreign university. Twinning programs do not.

6\. **Program collaboration**: the Indian institution and the foreign
education partner give a joint degree. Internet learning is another
avenue with rapid growth. Students in India now have the opportunity to
acquire an internationally recognized degree without leaving the
country. E-learning sales in India are estimated to grow to about \$15.5
million by 2005, having increased at 17 percent per year since 2000.

### Best Prospects/Services [**Return to top**](#ch4)

The promising sub-sectors with the estimated market size for the year
2003-2005 are as

follows:

**Sub Sectors Market Size (Estimates in \$million)**

IT education 270 (2003-2004)

E-learning 15.5 (by 2005)

Source: National Association of Software and Service Companies

### Opportunities [**Return to top**](#ch4)

2005-06 U.S. University fairs in India

  ----------- ---------------------------- -------------------------------
  City        2006 Linden Fair             2006 The MBA Tour

  Bangalore   February 28                  February 8

  Hyderabad   \-                           February 6

  Mumbai      February 25                  February 11

  New Delhi   March 2                      February 4
  ----------- ---------------------------- -------------------------------

Source: USEFI:
[http://www.fulbright-india.org](http://www.fulbright-india.org/)

### Resources [**Return to top**](#ch4)

United States Educational Foundation in India:
[http://www.fulbright-india.org](http://www.fulbright-india.org/)

-   NAFSA:
    [http://opendoors.iienetwork.org/?p=69736](http://opendoors.iienetwork.org/?p=69736%0D)

## Electric Power Generation, Distribution and Transmission Equipment

### Overview [**Return to top**](#ch4)

  ------------------------ -------------- ------------ -------------------
                           **2003**       **2004**     **2005
                                                       (estimated)**

  Total Market Size        5140           5550         6150

  Total Local Production   4300           4500         5000

  Total Exports            310            250          450

  Total Imports            1150           1300         1600

  Imports from the U.S.    265            300          370
  ------------------------ -------------- ------------ -------------------

(Note: These are unofficial estimates. Exchange rate \$1=INR 45; Figure
in \$ Millions)

The total market demand for electric power is expected to grow from
\$5.5 billion in 2004, to over \$6 billion in 2005. This growth will
occur due to the plans to build new power plants and to develop the
transmission and distribution sectors.

Total import of electric power equipment will reach \$1.6 billion in
2005. The U.S. import market share will be close to \$300 million in
2005. This should continue to grow at an average annual rate of 15-20
percent over the next two years. India imports most of its electric
power equipment from the U.S., Japan, Germany, and the U.K. With an
import share of 23 percent during 2004, U.S. is one of the largest
exporters of power to India.

The power sector in India is largely state-owned and unable to meet the
increasing electricity demand. The current supply of locally produced
power at 112,000 Mega Watts is about 30 percent below demand. India\'s
power sector is plagued by capacity shortages, frequent blackouts, poor
reliability, and deteriorating physical and financial conditions.
National surveys of industrialists consistently rate power supply as one
of their most critical constraints.

With responsibility for electricity supply shared constitutionally
between the central government and the states, the Government of India
(GOI) has placed increased emphasis on improving the efficiency of
supply, consumption, and pricing of electricity. However, economic
growth in India will continue to be hampered as long as the country\'s
power supply constrains industrial development and the financial losses
of the power sector remain a burden on public sector finances.

The source of the state power sectors\' ailments is poor operational
efficiency of the State Electricity Boards (SEBs). The SEBs are
continually in severe financial distress and have been unable to provide
quality supply and efficient service to their customers. SEBs and State
Generating Companies together generate almost 70 percent of India\'s
electricity supply. However, in most of India\'s states, the power
sector is still a major drain on already limited state budgets.

The sector\'s heavy reliance on increasingly tight state budget
resources has been the key obstacle to expanding access to electricity
to consumers and upgrading systems. SEB losses and power subsidies are
also a major drain on state budgets and crowd out public spending on
critical sectors such as health and education. Power sector reforms are
critical for providing the impetus to states\' economic growth and for
redirecting public spending to priority areas.

The GOI, with [World Bank](http://www.worldbank.org/) assistance, has
been encouraging the states to undertake in-depth power sector reforms.
This involves distancing the state government from operation of the
power sector, establishing an independent regulatory framework for the
sector, progressively reducing subsidies and restoring the
creditworthiness of the utilities through financial restructuring and
cost-recovery based tariffs, and divesting existing distribution assets
to private operators. The GOI seems now focused to lead the Transmission
and Distribution (T&D) oriented reforms, because it believes that
without a proper T&D network, generation becomes meaningless.

The demand for T&D equipment will grow, given GOI\'s commitment to push
to through reforms and recent policy initiatives to encourage T&D.
American power equipment suppliers will find significant sales
opportunities in power distribution transformers, high voltage power
cables, relays, conductors, capacitors and circuit breakers. There are
excellent prospects in Supervisory Control and Data Acquisition (SCADA)
and Energy Management System (EMS) to effectively integrate distribution
automation with demand side management. Indian T&D companies are
seriously exploring their right-of-way to establish fiber-optic and
telecommunication networking for new commercial opportunities in the
cable Internet and e-commerce operations.

According to the Indian Ministry of Power (MOP) 107,000 MW power
capacity needs to be added before 2012 to bridge the demand gap and
about one-fourth to one-third of this growth will come from Independent
Power Producers (IPPs), with the rest coming from the public sector. It
is estimated that for building 100,000 MW additional power capacities
and associated transmission & distribution infrastructure, \$170 billion
investments would be needed.

### Best Prospects/Services [**Return to top**](#ch4)

Numerical Code Description\
8504.00.00 Electrical transformers\
8532.21.00 Tantalum Capacitors\
8532.22.00 Fixed Tantalum Capacitors

8533.00.00 Electrical resistors\
8535.29.00 Automatic SF6 Circuit Breakers\
8536.00.00 Relays/Switchboards

8544.00.00 Insulating Cable

902830.00 Electronic/electromechanical Meters

8402110000 Watertube boilers steam production exc 45 t per hr

8402120000 Watertube boilers steam production \<45 t per hour

8402190000 Vapor generating boilers, nesoi, including hybrid

8402200000 Super-heated water boilers

8402900010 Heat exchangers

8404100010 Economizers for use with boilers

8404100050 Aux plant for use with boilers

8404200000 Condensers for steam or other vapor power units

8406110000 Steam & other vapor turbines for marine propulsion

8406199000 Vapor turbines, exc steam, exc marine propulsion

8410110000 Hydraulic turbines

8411828000 Gas turbine

8411994000 Parts of non-aircraft gas turbines

8502120000 Generating sets, elc, diesel, \> 75kva but =\<375kva

8502130020 Generating sets, elc, diesel,\>375kva but =\<1000kva

8502130040 Generating sets, elc, diesel, \> 1000 kva

8481809020 Valves, w/electrical or electro hydraulic actuators

8481809025 other valves, electrically actuated

9032810040 Hydraulic/pneumatic industrial process control inst

9032896030 Process control inst & apprts for complete systems

9032896075 Other process control inst & apparatus

9032896085 Automatic regulating/controlling inst

8414802015 Compressors, centrifugal and axial

8414802055 Compressors, nesoi, includ recip & rot =\< 186.5kw

8414802065 Compressors, nesoi, inc rec & rot exc186.5kw\>746kw

8414802075 Compressors, nesoi, inc rec & rotary, exceed 746kw

8414809000 Air or vacuum pumps, nesoi

### Opportunities [**Return to top**](#ch4)

Given GOI\'s commitment to push through reforms and recent policy
initiatives to encourage T&D, the demand for T&D equipment is expected
to grow. American power equipment suppliers will find significant sales
opportunities in power distribution transformers, high voltage power
cables, relays, conductors, capacitors and circuit breakers. There are
excellent prospects in Supervisory Control and Data Acquisition (SCADA)
and Energy Management (EMS) systems to effectively integrate
distribution automation with demand side management. Indian T&D
companies are seriously exploring their right-of-way to establish
fiber-optic and telecommunication networking for new commercial
opportunities in the cable Internet and e-commerce operations.

### Resources [**Return to top**](#ch4)

(Sources: CEA development plan details, Economic Times, Business Line,
The

Hindu's Industrial Survey and Power Line)

## Food Processing & Cold Storage Equipment

### Overview [**Return to top**](#ch4)

  ----------------------- -------------- ------------ --------------------
                          **2003**       **2004**     **2005 (estimated)**

  Total Market Size       1,739          2,028        2,358

  Total Local Production  1,691          1,971        2,291

  Total Exports           43             49           57

  Total Imports           91             106          124

  Imports from the U.S.   27             32           39
  ----------------------- -------------- ------------ --------------------

(Note: These are unofficial estimates. Exchange rate \$1=INR 45; Figure
in \$ Millions)

Since the liberalization of the Indian Economy in August 1991, the food
processing industry has shown rapid growth in almost all its segments.
This has become possible due to the policy initiatives taken by the
Government of India (GOI) with regard to regulation and controls, fiscal
policy, export and import, export promotion and industry incentives. As
India's food processing industry is one of the largest domestic
industries in terms of production, consumption, export and growth
prospects, the GOI has accorded it a high priority. The food processing
industry is given a number of important subsidies and incentives by the
GOI, which have helped this industry grow.

For example, many processed food items are totally exempt from excise
duty. In addition, the GOI has reduced corporate taxes and added tax
incentives for new manufacturing units in select sectors of the food
processing industry. Finally, free trade and export processing zones
have been established with all required infrastructure in place. The GOI
is also encouraging the development of 100 percent export-oriented
facilities.

India has diverse agro-climatic conditions and has a large and diverse
raw material base suitable for food processing companies. At present a
very small percentage of food production is processed into value added
products. Factors like rapid urbanization and rising per capita incomes
have caused rapid growth and changes in demand patterns. It is to be
noted that an average Indian spends about 50 percent of his household
budget on food items. This has created a demand for processed food. As a
result, a good investment opportunity exists in the food processing
industry, particularly for those food products based on rice and marine
products that have a 46 percent and 34 percent respective share of the
total processed food export market.

India ranks second in the world in the production of fruits and
vegetables but hardly 2 percent of this produce is processed. India also
produces almost all varieties of spices amounting to 25 percent to 30
percent of world production. India grows 22 million tons of oil seed in
addition to other important cash crop products like tea, coffee, cashew
nuts and cocoa.

India has a long coastline of 8,041 kilometers. Hence there is an
excellent opportunity for the marine product processing industry. India
is the largest milk producer in the world but only 15 percent of the
milk production is processed through the organized sector.

Considering all these factors, the GOI in 1986 established the
Agricultural & Processed Food Products Export Development Authority
(APEDA). APEDA has contributed to the development of physical
infrastructure, grading and packaging standards, modernization of
packinghouses and financial assistance for infrastructure development.
The main goal is to curtail wastage of food products, and remove
logistical bottlenecks in the food processing industry.

### Best Prospects/Services [**Return to top**](#ch4)

The cold storage equipment sector provides an excellent opportunity for
U.S. companies to invest because the GOI has accorded a high priority to
stop the wastage of food products. India is one of the world's largest
producers of fruits and vegetables but nearly 30 percent of this
production is lost due to inadequate cold chain facilities. Moreover,
other segments like dairy products, seafood, and processed meat, also
require cold storage facilities. The GOI is taking steps to develop the
cold chain infrastructure, pushing a steep rise in demand for cold
storage equipment. Currently, the commercial and industrial
refrigeration market has an estimated value of \$212 million. There are
significant opportunities for U.S. companies to partner with Indian
counterparts to provide cold storage and refrigeration equipment. U.S.
engineering companies can provide the latest technology of international
standards to their Indian partners.

The latest in food processing technology equipment is in great demand in
India particularly for those food products that require high-tech
processing. The U.S. companies have a great opportunity to export
equipment for processing meat, seafood, vegetables, fruits, cereals, oil
seeds, etc.

Other kinds of food processing equipment/technology that have promising
prospects in India include: technologies for the extension of shelf life
for perishable foods (especially those made out of milk, fruits,
vegetables and meat products); de-shelling/de-husking machines to
speed-up the oilseed process and to reduce contamination due to
microbial growth; processing equipment/technologies for honey;
biosensors for the food processing industry; and fruits and vegetable
driers that allow a uniform drying temperature. Industrial baking,
cooking and heating equipment also have promising prospects.

### Opportunities [**Return to top**](#ch4)

There is a great opportunity for the equipment required in the ready to
serve snack and convenience foods segment, which has had steady and
significant growth. The Indian market for food processing machinery has
been growing steadily with domestic demand for food and beverage
products growing significantly in the last few years. This pattern is
likely to continue as more food processing units are commissioned in
India. The most promising areas of growth are fruit and vegetable
processing, meat, poultry, dairy and seafood.

### Resources [**Return to top**](#ch4)

Ministry of Food Processing Industries

Telephone: +91-11-26492475

Fax: +91-11-26493228

Website: <http://mofpi.nic.in/>

All India Food Processors' Association

206, Aurobindo Place, Haus Khas,

New Delhi 110016

Telephone: +91-11-26510860 / 26518848

Fax: + 91-11-26510860

Website: <http://www.aifpa.com/index.asp>

Refrigeration and Air-conditioning Manufacturers Association (RAMA)

Website: [http://www.ramaindia.org](http://www.ramaindia.org/)

Agricultural and Processed Food Products Export Development Authority
(APEDA)

3^rd^ floor, NCUI Building

3, Siri Institutional Area

August Kranti Marg

New Delhi 110016

Tel: +91-11-26513219/26513204

Fax: + 91-11-26534870

Email: <headq@apeda.com>

## Machine Tools

### Overview [**Return to top**](#ch4)

  ------------------------ -------------- ------------ -------------------
                           **2003**       **2004**     **2005
                                                       (estimated)**

  Total Market Size        354            569          770

  Total Local Production   115            225          303

  Total Exports            11             12           13

  Total Imports            250            356          480

  Imports from the U.S.    50             71.2         96
  ------------------------ -------------- ------------ -------------------

Source: Indian Machine Tool Manufacturers Association
([http://www.imtma.org](http://www.imtma.org/))

(Note: These are unofficial estimates. Exchange rate \$1=INR 45; Figure
in \$ Millions)

The Indian manufacturing sector, particularly the automotive, auto
components and consumer durables sector, witnessed a speedy growth of 9
percent during 2004-05. The Indian machine tool industry, the foundation
for the multi-billion dollar engineering sector, has also seen a revival
in its fortunes triggered by an investment boom in manufacturing.

The Indian machine tool market reached \$569 million in CY 2004, an
increase of over 60 percent over the previous year. Given the rapid
growth of end users of machine tools, both existing and new projects,
the machine tool market is expected to record at least 35-40 percent
growth during the CY2005 to reach \$770 million. However, the Indian
Machine Tool Manufacturers Association (IMTMA) projected that the
machine tool demand will record around 73 percent growth over 2004 to
reach \$986 million during

CY 2005.

Domestic production of machine tools also witnessed impressive growth in
the past several years. Local production reached \$225 million during
2004, an increase of 95 percent over the previous year. Metal cutting
turning centers, machine centers, grinding centers and the metal forming
segment all contributed to the expedited growth of the Indian machine
tool market. Indian firms also manufacture CNC machine tools for local
and export sales.

Approximately 200 medium and large companies and over 300 small firms
manufacture machine tools in India. Of these, small and medium units
account for just 10 percent of output and ten ISO 9000 certified large
units account for another 50 percent of output. Most of the machine
tools industry is concentrated in the South and West regions of India.
The Indian company, HMT is the single largest unit in the industry with
around 40 percent market share.

Indian end users and agents continued to import machine tools to meet
with local demand. Indian imports of machine tools reached \$356 million
during CY2004. Imports of machine tools are expected to record at least
35 percent growth during CY2005 to reach \$480 million. However, IMTMA
projected that the Indian imports of machine tool will reach \$666
million recording an impressive 86 percent growth over the previous
year. The bulk of the imports comprise of metal-cutting machine tools.
Within the machine-cutting tools, machining centers, turning centers,
grinding centers, and presses formed the large chunk of imports.

Indian exports of machine tools increased marginally in CY2005 over the
previous year. Indian firms exported \$12 million worth of machine tools
during CY2004 and provisional estimate for CY 2005 was \$13 million.
Indian firms exported machine tools to over 50 countries including
Germany, United Kingdom, Australia, Japan and the USA.

Some U.S. companies and the U.S. Association for Manufacturing
Technology (AMT) are active in the Indian market; however, European
countries, Korea, Japan, Taiwan and China are more aggressive in
marketing their products to India. According to IMTMA, U.S. presently
only enjoys 20 percent of the total market share of India's imports of
machine tools.

### Best Products/Services [**Return to top**](#ch4)

The most promising sub-sectors for U.S. exports with estimated market
sizes for the year 2005 are provided below:

**Sub-sectors Market size in 2005 (US \$ million)**

Metal curing machine 238

Metal forming machine 78

CNC machine / tools 258

### Opportunities [**Return to top**](#ch4)

The Government of Karnataka had initiated the International Airport
Project at Devenahalli and Metro Rail Project and these two major
projects are underway and there is enough scope for import of hi-tech
machine tools, which could be used in these two mega projects. Please
visit [http://www.karnataka.com](http://www.karnataka.com/) for further
details.

### Resources [**Return to top**](#ch4)

-   Ministry of Commerce and Industry, GOI
    --<http://commerce.nic.in/eidb.htm>

-   Indian Machine Tool Manufacturers' Association (IMTMA) -- Website:
    [http://www.imtma.org](http://www.imtma.org/)

-   Centre for Machine Tools Industry (CMTI)

-   Bangalore International Airport --
    <http://www.karnataka.com/watch/blr-airport/>

-   Bangalore Metro Rail Project --
    <http://www.karnataka.com/watch/infrastructure/>

-   Bureau of Census, U.S. Government --
    <http://www.census.gov/foreigntrade/statistics/product/enduse/exports/c5330.html>

## Medical Equipment

### Overview [**Return to top**](#ch4)

  ------------------------ -------------- ------------ -------------------
                           **2003**       **2004**     **2005
                                                       (estimated)**

  Total Market Size        1845           1925         2085

  Total Local Production   810            890          996

  Total Exports            105            165          231

  Total Imports            1140           1200         1320

  Imports from the U.S.    190            200          237
  ------------------------ -------------- ------------ -------------------

(Note: These are unofficial estimates. Exchange rate \$1=INR 45; Figure
in \$ Millions)

According to the World Health Report, India spends about 5 percent of
its Gross Domestic Product (GDP) on the healthcare sector. This figure
will rise to between 6.2 and 7.5 percent of GDP by 2012. In real dollar
terms, 2002 healthcare spending was \$25 billion, which is expected to
increase to \$47 billion by 2012. About 50 percent is spent on curative
and primary care and another 40 percent on secondary care, including
medical specialists in major hospitals with expensive diagnostic
equipment. The remaining 10 percent of the market is left to preventive
care such as health education, and weight reduction plans.

The medical infrastructure in India is far from adequate. The country
has about 525,000 doctors (0.52 per thousand people), 737,000 nurses
(0.72 per thousand people), and about 870,000 hospital beds (0.9 per
thousand people). Despite government efforts, the demand for hospitals
and beds far surpasses availability. The problem is most acute in rural
India, which accounts for over half of India's population. About 80
percent of available hospital beds are located in the urban centers,
leaving only 20 percent for the larger rural population. The Government
of India (GOI) is aware of the acute shortfall in medical services in
rural areas and is targeting many of these hospitals for future
upgrades.

The Indian population of one billion people is growing at a rate of 2.5
percent per year though only about 100-150 million have the demand for,
and the discretionary income to afford, private health care services. In
addition, less than 1 percent of the Indian population had any health
insurance coverage in 2004 though this number is expected to rise to 10
percent by 2010 as the private sector continues to aggressively market
health insurance.

Nonetheless, many in the growing \"middle income\" segment look for
international quality medical services in private and specialized
hospitals, and this trend is expected to continue for the next five
years and beyond. The establishment of a number of super-specialty
hospitals and diagnostic centers was due in part to favorable government
policies including a reduction in import duties on medical equipment.
Successful medical insurance programs have also contributed to the
increased use of specialists and advanced medical facilities. Many
members of the middle-income group are now looking for better health
insurance programs with higher insurance limits. The new dynamic in the
health insurance sector will create increase demand for high-end medical
facilities and equipment.

New specialty and super-specialty hospital facilities being planned for
the government and private sectors depend on the import of high-end
medical equipment. Several international companies have established
manufacturing facilities in India to assemble equipment such as
ultrasound scanners and mobile X-ray units for the domestic market and
for export sales. These companies also import products and components as
needed for sales or manufacturing.

Medical tourism is fueling additional growth in the Indian healthcare
sector. In 2003, private hospitals attracted over 100,000 medical
tourists who spent approximately \$333 million. The cost of most major
surgeries in India is much less than the cost for the same surgery in a
developed economy. The healthcare industry is now proactively creating
standards for the medical tourism industry with the help of credit
rating agencies, insurance companies and others involved in the
self-regulation of the sector.

### Best Products/Services [**Return to top**](#ch4)

The most promising sub-sectors in the medical equipment industry, with
estimated market sizes for the year 2005-2006, are presented below:

**Sub-sectors Market size in 2005 (\$ million)**

General Surgery 677

Medical Imaging Equipment 312

Cardiology Equipment 417

Cardiac Surgery 198

Ophthalmology 96

### Opportunities [**Return to top**](#ch4)

India's disease profile is changing. Treatment for lifestyle diseases is
expected to become a major market in the future and will require a heavy
investment in equipment and technology.

A proper supply of equipment and medical consumables will also be an
area with significant opportunity for American companies. Several
leading U.S. purveyors of hospital equipment and supplies have opened
Indian operations to cater to this growing market.

Health insurance and hospital administration is another area in which
U.S. companies can make a difference. This opportunity includes
introducing and maintaining industry standards, and also classifying and
certifying health care centers.

Building, equipping and managing super specialty hospitals is another
area for future growth.

### Resources [**Return to top**](#ch4)

Dr. Anbumani Ramadoss

**Union Minister for Health & Family Welfare**

Ministry of Health & Family Welfare

Nirman Bhawan

New Delhi -- 110011

Telephone: +91-11-23014647, 23014751, 23010661

Fax: +91-11-23016648

E-mail: <secyhlth@nb.nic.in>

Website: <http://mohfw.nic.in/>

Mr. Ashwani Kumar

Drugs Controller General

**Drugs Controller General India**

Union Minister for Health & Family Welfare

Ministry of Health & Family Welfare

Nirman Bhawan, New Delhi -- 110011

Telephone: +91-11-23018806

E-mail: <dci@nb.nic.in>

Dr. S. P. Agarwal

Director General of Health Services

**Directorate General of Health Services**

Union Minister for Health & Family Welfare

Ministry of Health & Family Welfare

Nirman Bhawan, New Delhi -- 110011

Telephone: +91-11-23018438, 91-11-23019063

E-mail: <dghs@nb.nic.in>

## Mining and Mineral Processing Equipment

### Overview [**Return to top**](#ch4)

  ------------------------ -------------- ------------ -------------------
                           **2003**       **2004**     **2005
                                                       (estimated)**

  Total Market Size        1650           1800         2000

  Total Local Production   1050           1200         1350

  Total Exports            220            290          360

  Total Imports            820            890          1010

  Imports from the U.S.    270            320          330
  ------------------------ -------------- ------------ -------------------

(Note: These are unofficial estimates. Exchange rate \$1=INR 45; Figure
in \$ Millions)

India is endowed with significant mineral resources. India produces 89
minerals out of which 4 are fuel minerals, 11 metallic, 52 non-metallic
and 22 minor minerals. The metallic production is accounted for by
iron-ore, copper-ore, chromite and/or zinc concentrates, gold, manganese
ore, bauxite, and lead concentrates. Amongst the non-metallic minerals,
more than 90 percent of the aggregate value is shared by limestone,
magnesite, dolomite, barytes, kaolin, gypsum, apatite & phosphorite,
steatite and fluorite. India is the world's largest producer of mica
blocks and mica splittings. Besides, India ranks 3^rd^ in production of
coal & lignite and barytes, 4^th^ in iron ore, 6^th^ in bauxite and
manganese ore, 10th in aluminum and 11^th^ in crude steel in the World.

The public sector contributes over 85 percent of the total value of
mineral production.  However, it is the avowed policy of the Government
to withdraw from the non-strategic sectors and accordingly the public
sector undertakings are being privatized in a phased manner. Also, since
1993, the Mineral Policy encourages private investments in mining and
processing of most minerals. Therefore, privatization not only increases
productivity at the mines, but also brings in much needed fresh
investments for new mining equipment and technology.

The total Indian market for mining and mineral processing equipment is
estimated at \$2 billion. India is anticipated to become a major market
for advanced mining equipment and technology from the U.S. and other
foreign countries in the next few years. Although the country has a
fairly large domestic manufacturing base supplying about 60 percent of
the requirement, the scope for direct imports of advanced equipment and
technology will grow. Moreover, the domestic manufacturers usually have
foreign licensing agreements, which allow indirect import of the
critical components for local assembly and incorporation in the
indigenous equipment.

Earlier the GOI used to get equipment under tied loans or bilateral aid
programs offered by the U.K., Germany, or Japan. Now, given the recently
liberalized Mineral Policy of the government, and with private
entrepreneurs investing in mining industry here, the opportunity for
U.S. firms to enter the Indian market through joint ventures and
technical collaborations has grown immensely. U.S.- equipment suppliers,
with their undoubted technological edge, should also be well placed to
win an increasing number of contracts funded by the World Bank, ADB and
other multilateral financing agencies.

Mining has been classified as a manufacturing activity under the Export
Promotion Capital Goods (EPCG) Plan. Capital goods imported for mining
would qualify for reduced rates of customs duty subject to certain
export obligations. Tubs, winding ropes haulage ropes, stowing pipes and
safety lamps use in mines and quarries are allowed 100 percent
depreciation. Environment protection equipment, pollution control
equipment, energy saving equipment also qualify for 100 percent
depreciation.

### Best Products/Services [**Return to top**](#ch4)

Additional to below best products list, it is worth noting that Indian
private developers of mines will be willing to explore the possibility
of getting used or reconditioned equipment in good working order at a
reasonable cost.

The most promising sub sectors, with the corresponding market sizes
(Year 2005 estimate):

**Sub-sectors Market size in 2005 (\$ million)**

Longwall Loaders & Draglines 180

Excavators, Shovels & coal/rock cutters 250

Mineral Screening, Washing, Crushing,

and Grinding Equipment 450

### Opportunities [**Return to top**](#ch4)

Coal India Ltd. (CIL) is the largest coal producing company in the
world. The company offers both investment and export opportunities for
U.S. companies in the mining sector. For details of various CIL tenders
and investment opportunities, please visit
<http://www.coalindia.nic.in/>.

National Aluminum Company Limited (Nalco) is Asia\'s largest integrated
aluminum complex, encompassing bauxite mining, alumna refining, aluminum
smelting and casting, power generation, rail and port operations. To
review opportunities with NALCO, please visit
<http://www.nalcoindia.com/Tender/default.HTM>

In the Eastern Indian state of Orissa, projects worth \$27 billion are
likely to be implemented in the next five to ten years. The majority
will be mining projects linked to steel and aluminum industries. There
is an unprecedented flow of capital into the State. Besides iron ore
(32.9 percent of the country\'s reserves), Orissa has large deposits of
bauxite (59.95 percent), chromite (98.4 percent), coal (24.8 percent)
and manganese (67.6 percent). To review opportunities in Orissa, please
visit <http://orissagov.nic.in/> and other related websites.

### Resources [**Return to top**](#ch4)

Upcoming Trade Events:

ELECTRA MINING INDIA 2006: This is a large trade show for the Mining
sector in India and will be held in March 22-24, 2006 in Pragati Maidan,
New Delhi, India. Details on IMME 2004 are available at
<http://www.electramining-india.com/>

MINERALS, METALS, METALLURGY & MATERIALS (MMMM) 2006: The 6th edition of
MMMM2006 will be held from September 11-14, 2006 at Pragati Maidan, New
Delhi. For more details, please visit
<http://www.tafcon.com/metal206/index.htm>

**Key websites:**

-   Ministry of Coal and Mines
    [http://www.coal.nic.in](http://www.coal.nic.in/);
    [http://mines.nic.in](http://mines.nic.in/)

-   Coal India Limited
    [http://www.coalindia.nic.in](http://www.coalindia.nic.in/)

-   National Aluminum Company Ltd. <http://www.nalcoindia.com/>

-   Hindustan Zinc Limited <http://www.hzlindia.com/>

-   Mineral Exploration Corporation Ltd. <http://www.meclindia.com/>

-   Indian Institute of Coal Management, Ranchi
    <http://www.iicm-india.com/>

-   [Bharat Coking Coal Ltd.](http://bccl.cmpdi.co.in/)\
    [Central Coalfields Ltd.](http://ccl.cmpdi.co.in/)\
    [Northern Coalfields Ltd.](http://ncl.nic.in/)\
    [Western Coalfields Ltd.](http://westerncoal.nic.in/)\
    [Eastern Coalfields Ltd.](http://www.easterncoal.co.in/)\
    [South Eastern Coalfields Ltd.](http://www.secl.nic.in/)\
    [Mahanadi Coalfields Ltd.](http://mahanadicoal.nic.in/)\
    [Central Mine Planning & Design Institute
    Ltd](http://www.cmpdi.co.in/)

-   Orissa <http://orissagov.nic.in/posco/POSCO-MoU.htm>

**Contact E-mail Ids:**

Arup Kumar Mitra, Commercial Specialist, U.S. Commercial Service,
Calcutta, India: <arup.Mitra@mail.doc.gov>

Yash Kansal, Commercial Specialist, U.S. Commercial Service, New Delhi,
India: <yash.kansal@mail.doc.gov>

## Oil and Gas Field Machinery

### Overview [**Return to top**](#ch4)

  ------------------------ -------------- ------------ -------------------
                           **2003**       **2004**     **2005
                                                       (estimated)**

  Total Market Size        1900           2050         2200

  Total Local Production   1300           1400         1500

  Total Exports            200            250          300

  Total Imports            800            900          1000

  Imports from the U.S.    250            300          350
  ------------------------ -------------- ------------ -------------------

(Note: These are unofficial estimates. Exchange rate \$1=INR 45; Figure
in \$ Millions)

The Indian Petroleum industry is one of the oldest in the world, with
oil being struck at Assam in 1867, nine years after Col. Drake\'s
discovery in Titusville. The industry has come a long way since then. In
recent years the sector has been characterized by rising consumption of
oil products, stagnant crude production, and low reserve accretion. With
the liberalization of the Indian economy and the initiation of economic
reforms, the Indian Government has been moving towards inviting foreign
investment in capital-intensive oil and gas projects.

Against a crude oil production of about 35 million tons per annum
(MTPA), India's consumption currently exceeds 120 million tons. To
provide energy security, the GOI is seeking investments in excess of
\$100 billion in both the upstream and the downstream sectors during the
next 15 years. India's petroleum product consumption has grown by 6.3
percent over the past 10 years and the oil demand in India is expected
to rise to 368 MTPA by 2025.

With the widening gap between demand and supply, both for oil and gas,
the outlook for the upstream sector is extremely positive. While oil and
gas will continue to play a substantial role in the total energy mix,
the need for harnessing alternate energy sources like Coal Bed Methane
(CBM) and gas hydrates will become crucial to balance the demand and
supply.

The government of India will announce the sixth round of bidding under
the New Exploration Licensing Policy in early 2006. Indian government
officials will be visiting Houston and other U.S. cities in February
2006 to encourage U.S. companies to participate in oil exploration
opportunities in India. Government expects that big multinationals will
look towards India following discovery of over 14 trillion cubic feet of
gas reserves by Reliance Industries in Bay of Bengal and Cairn Energy of
the UK in Barmer district of Rajasthan.

The focus of oil refining companies has shifted to clean fuels as per
current environmental standards. Clean fuel technology supplied by
companies like UOP, Chevron and Axens is in great demand. Also, with
greater liberalization and ensuing competition, oil-marketing companies
are wooing the retail customer with more and more value-added services
being provided at retail outlets. In addition to new outlets, existing
retail outlets are being modernized with refreshing signage, and
establishment of mini-malls. U.S. companies engaged in design of gas
stations, vending machines and development of concessionaires will find
clients among the downstream oil companies.

The Indian oil and gas industry has traditionally been more open to
imports than other segments of the economy. To procure major equipment,
the government oil companies float public tenders. The U.S. is the
leader in the import market segment, with close competition from the
U.K., Japan and Korea. Traditionally, the Indian oil and gas sector has
been dependent on U.S. technology and equipment. Also, since India uses
American Petroleum Institute (API) specifications, U.S. manufacturers
have an edge over their foreign competitors.

### Best Products/Services [**Return to top**](#ch4)

The total market for oil and gas field equipment is estimated at over
\$2 billion, with imports constituting about 40 percent of the total
market. The following is a list of the promising sub-sectors for the
next 2-3 years, with estimated market size for each sub sector:

**Sub sector Market Size (\$ million)**

Seismic & drilling equipment and services 500

Refinery and clean fuels equipment 450

Pipelines and gas-field equipment 350

### Opportunities [**Return to top**](#ch4)

In early 2006, the Government of India is expected to invite bids for
about 50 exploration blocks under the sixth round of New Exploration
Licensing Policy (NELP). These blocks are expected to attract over \$1
billion investments in the next 10-15 years. Once the bids are
announced, U.S. companies interested in bidding or seeking additional
information should visit: <http://www.dghindia.org/>

India's first Fortune 500 company Indian Oil Corporation Limited (IOC),
India's largest upstream company Oil and Natural Gas Corporation Limited
(ONGC) and India's largest gas company are implementing projects in
excess of \$3 billion. For more details on opportunities with these
companies, please visit:

<http://www.indianoilcorp.com/business_major.asp>

<http://www.ongcindia.com/tenders/index.asp>

<http://www.gailonline.com/aboutgail/projectplan.htm>

### Resources [**Return to top**](#ch4)

**Upcoming trade events:** The 13th Annual India Oil & Gas Review
Symposium & International Exhibition, IORS-2006, will be held on
September 4-6 at Hotel Taj Lands End, Mumbai, India. For more
information, please visit: <http://www.oilasia.com/iors2006.htm>

[**Key websites:**](http://www.oilasia.com/iors2006.htm)

-   Ministry of Petroleum and Natural Gas
    [http://petroleum.nic.in](http://petroleum.nic.in/)

-   Indian Oil Corporation Limited <http://www.indianoilcorp.com/>

-   Oil and Natural Gas Corporation Limited <http://www.ongcindia.com/>

-   Directorate General of Hydrocarbons <http://www.dghindia.org/>

-   Gas Authority of India Limited <http://www.gailonline.com/>

## Pollution Control Equipment

### Overview [**Return to top**](#ch4)

  ------------------------ -------------- ------------ -------------------
                           **2003**       **2004**     **2005
                                                       (estimated)**

  Total Market Size        3180           3660         3850

  Total Local Production   1910           2200         2310

  Total Exports            N/A            N/A          N/A

  Total Imports            1270           1460         1540

  Imports from the U.S.    408            425          508
  ------------------------ -------------- ------------ -------------------

(Note: These are unofficial estimates. Statistics don't include
municipal solid waste management (estimated market size is \$2 billion).
Exchange rate \$1=INR 45; Figure in \$ Millions)

It is estimated that 30-40 percent of India's industrial units produce
sizeable quantities of pollutants. There are about 3 million small-scale
units in the country and most of these are not using any pollution
control equipment. The Government of India has classified 17 industrial
sectors as highly polluting. India is one of the largest and one of the
fastest growing producers of greenhouse gases.

With a market size of around \$3 billion, India's pollution control
equipment industry is growing at 10-12 percent annually, thanks largely
to government initiatives and a proactive judiciary. The biomedical
waste management segment has been growing at a rate of 20 percent per
year due to enforcement of the Bio-medical Waste (Management and
Handling) Rule, of 1998. Some of the advanced equipment required for
treatment of biomedical waste must be imported from developed countries,
as they are not manufactured domestically, which creates significant
opportunities for U.S. providers.

The pollution control equipment industry is unorganized and dominated by
small-scale industrial firms lacking the resources to invest in research
and development (R & D). There are a few Indian engineering companies
offering services and equipment as part of turnkey consulting services.

The Ministry of Environment and Forests is the governing agency for
pollution control standards, legislation, and initiatives. A third of
its annual budget is allocated for pollution abatement. However, the
market is not restricted to the government sector. Thanks to government
initiatives aimed at taking pollution control beyond end-of-the-pipe
issues, the private sector has recently been investing substantially in
environmentally friendly production processes. The private sector
accounts for nearly 40 percent of segment demand.

The supply side of the market is comprised of three segments: imports;
domestically manufactured equipment of international quality; and
domestically manufactured equipment of substandard quality. The market
for end-of-the-pipe equipment is price sensitive, so consumers generally
favor equipment with low life cycle costs.

Imports have nearly 40 percent of the total market share due to two main
factors:

1\. Unlike other sectors, multi-lateral and bi-lateral agreements on
ecology and the environment play a major role in this sector. This fuels
the demand for imported pollution control equipment, because donor-led
investments normally require international quality equipment that is not
manufactured in India.

2\. Multinational corporations with manufacturing facilities in India
insist on the replication of technology for pollution control. This
almost always requires imports.

The United States has traditionally enjoyed a dominant position in the
market, with nearly 33 percent of market share. In some segments such as
air pollution control equipment, imports from the U.S. constitute almost
40 percent of the total imports.

### Best Products/Services [**Return to top**](#ch4)

Private sector demand is growing for increased energy efficiency and
renewable energy, vehicular and industrial air pollution control,
bio-medical waste disposal, and water-recycling technologies.

India has a large potential in the renewable energy (RE) segment - an
estimated current aggregate of over 100,000 MW of which, as a medium
term goal, 10 percent should be achieved by 2012. In addition, there is
a huge potential market for generating power, and thermal applications
using solar, wind and biomass energy. Exploitation of chemical sources
of energy, geothermal energy, tidal energy and bio-fuels for automotive
applications is also envisioned.

Implementation of even a fraction of the suggested measures in the
National Environment Policy 2004 would create a huge opportunity for
international players in this sector.

Major investments will be required by the automobile industry to comply
with Euro IV norms in India's 11 largest cities, where vehicular
population is worsening (Euro III norms will become mandatory across
India by 2010).

The most promising sub-sectors in pollution control equipment:

##### Sub-sectors Estimated market size in \$billion

Energy efficiency and renewable energy 2.50

Water and wastewater management 1.24

Solid waste management 2.00

Vehicular pollution control 0.06

Air pollution control 0.05

Note: These are broad industry estimates.

### Opportunities [**Return to top**](#ch4)

Event: Trade show: Chemtech World

Dates: 02-06-07 to 02-10-07

Venue: Mumbai, India

Event Profile: CHEMTECH WORLD EXPO 2007, the International Exhibition
and Conference encompassing the Chemicals, Pharmaceuticals & Environment
sectors

Highlights: Over 650 exhibitors from India and abroad, over 100 overseas
exhibitors targeted, includes technical conferences, workshops and
buyer-seller meetings, over 30,000 sq. meters of exhibition space,
visitor promotion covering South East Asia, Europe & Gulf countries,
country pavilions.

Visitor Profile: Industry professionals, decision-makers and senior
managers who have the authority to recommend the purchase of equipment.

Exhibitor Profile: State-of-the-art technologies, equipment, accessories
and services from national and international players in each sector.

Organizer: Chemtech Foundation

26, Maker Chambers VI Nariman Point,

Mumbai, India.

Tel: +(91)-(22)-22874758

Fax: +(91)-(22)-22870502

### Resources [**Return to top**](#ch4)

-   Ministry of Environment and Forest: <http://envfor.nic.in/>

-   Ministry of Non-Conventional Energy Sources:
    <http://www.mnes.nic.in/>

-   Federation of Indian Chambers of Commerce and Industries'
    environment initiative:
    <http://www.cleantechindia.com/eicnew/index.htm>

-   The Energy & Resources Institute: <http://www.teriin.org/>

-   Everything About Water: <http://www.eawater.com/>

## Safety and Security Equipment

### Overview [**Return to top**](#ch4)

  ------------------------ -------------- ------------ -------------------
                           **2003**       **2004**     **2005
                                                       (estimated)**

  Total Market Size        206            254          312

  Total Local Production   85             102          122

  Total Exports            8              9            11

  Total Imports            129            161          201

  Imports from the U.S.    45             56           70
  ------------------------ -------------- ------------ -------------------

(Note: These are unofficial estimates. Exchange rate \$1=INR 45; Figure
in \$ Millions)

A rapid industrialization and an increased population have significantly
changed the Indian perception of safety of people and properties. Indian
corporate and government entities seek sophisticated, world-class
technology and services to meet the expanding safety concerns of the
country. Enhanced security requirements at airports, airlines,
government and commercial buildings, malls, embassies, multinational
companies, public facilities, oil/gas fields, and mining operations have
all led to an increased demand for safety and security products.

The Indian safety and security market offers excellent growth
opportunities to U.S. companies. The market size of Indian security
market is increasing due to the realization that security pays in terms
of reducing losses against theft, espionage, vandalism and terrorism.
There are several Indian and international security agencies offering
security products and services.

The Indian safety and security market is estimated at \$312 million
during 2005. It is expected to grow at 20-25 percent per year for the
next three to five years. In 2005, imports from the U.S. was \$70
million reflecting a 35 percent share of the Indian imports of safety
and security products. Indian electronic security equipment is still
largely supplied by imports. Indian imports of safety and security
products will continue to grow at 25 percent per year for the next three
years.

The major end users of sophisticated security equipment are the armed
forces, VIP security agencies, paramilitary and police, banks,
multinational corporations, and private agencies. Awareness among
residential, commercial, and industrial sectors has also grown rapidly
due to the easy availability of electronic "gadgets" used in preventing
theft and fire. To guard their investments and technical intellectual
property, multinational companies have also introduced highly
sophisticated security systems in their facilities.

However, the safety and security sector is still largely unorganized as
there is no major industry association. Though electronic gadgets and
other hi-tech security equipment are extensively used in the country,
very few security systems integrators offer holistic solutions to the
varied security and safety related issues. Domestic production only
accounts for nearly 40 percent of the total market size. Many Indian
companies have collaborated with foreign companies to manufacture and
sell their products in the domestic market.

Several U.S. companies including SAIC and L-3 Com are exporting security
equipment to India and several U. S. companies have established agency
arrangements in the country to market their products and technologies in
India. UK, Israel, Taiwan, Italy and Japan have an active presence in
the country promoting their products, including monitoring equipment,
interceptors, and other electronic devices.

Most of the security related products fall under Chapter 83
(Miscellaneous Articles of Base Metals), Chapter 85 (Electrical
Machinery and Equipment), and Chapter 90 (Project Inputs) of the HS
Codes.

### Best Products/Services [**Return to top**](#ch4)

##### Sub-sectors Estimated market size in \$billion

Fire protection equipment 125

(Includes alarms, extinguishers, public

address systems)

Police 80

(Includes detection and training equipment)

Security Forces 100

(Government and Corporate)

### Opportunities [**Return to top**](#ch4)

**Ministry of Home Affairs** (MHA) is responsible for Indian national
security and it allocates budget for upgrading the safety and security
products and technologies in the country. MHA procures these products
via tender process and all tender notifications are published on its web
site (Ministry of Home Affairs is
[http://mha.nic.in](http://mha.nic.in/)).

**Ministry of Civil Aviation Sector** (MCA) monitors the Indian airports
and approves airport modernization programs. Green field airports in
Bangalore and Hyderabad have been cleared and several other airports are
likely to be upgraded during the next couple of years. All these
projects will continue to support the demand for safety and security
products and technologies.

**Ministry of Defense** (MOD) continues to source latest safety and
security products/ technologies for Armed Forces, Indian Navy, and Air
force. MOD's Defense Research and Development Organization (DRDO) also
import S&S products.

**Ministry of Petroleum and Natural Gas** (MPANG) manages the petroleum
refineries and natural gas exploration and production programs. Refining
capacities of several existing refineries are likely to expand and new
green field refineries are expected to be to approved by the Ministry.
All these projects require the latest safety and security technologies.

Major MNC projects, both in the manufacturing and the services sector
continue to drive demand for safety and security technologies as well.
Large technology parks are being built to meet the ever-expanding demand
from the computer software and IT enabled service ventures.

[]{#_Telecommunications_Equipment .anchor}

## Telecommunications Equipment

### Overview [**Return to top**](#ch4)

  ------------------------ -------------- ------------ -------------------
                           **2003**       **2004**     **2005
                                                       (estimated)**

  Total Market Size        1975           2450         2670

  Total Local Production   1300           1250         1375

  Total Exports            180            230          280

  Total Imports            855            1430         1575

  Imports from the U.S.    330            650          550
  ------------------------ -------------- ------------ -------------------

(Note: These are unofficial estimates. Exchange rate \$1=INR 45; Figures
are in

\$ million)

India's 125 million-line telephone network (fixed plus cellular) is
among the top 10 networks in the world and the second largest among the
emerging economies, after China. India has one of the fastest growing
telecommunications systems in the world, with system size (total
connections) growing at an average of more than 20 percent per annum
over the last 4 years. The network consists of more than 28,300
telephone exchanges, equipped with a capacity of nearly 57 million.
According to the Government of India (GOI) telecom plan (1997-2007)
prepared by the Bharat Sanchar Nigam Limited (BSNL), the demand for new
telephone lines during the period up to 2007 is estimated at 81.8
million. This projected demand will generate a requirement of
approximately 54 million telephones during the next four years. The BSNL
and Mahanagar Telephone Nigam Limited (MTNL) will provide about 36
million telephones, while private operators will provide 18 million
telephones. The industry is considered as having the highest potential
for investment in India. The growth in demand for telecom services in
India will be highest in the basic telecom service, followed by national
long distance, international long distance and the cellular services
sector.

India has a relatively low tele-density of 11.43 per 100 persons, with
plans of increasing to 15 by 2010. Tele-density in India rural areas is
1.94 per 100 people and the government plans to increase this to 4 per
100 by 2010. A total of 530,000 out of 607,491 villages have been
provided with village public telephone (VPT), i.e. one telephone per
village. Considering India's population of 1 billion, it is estimated
that to achieve these objectives, approximately 175 million telephone
connections by the year 2010 need to be established. At current prices,
this translates to an additional investment of approximately \$68
billion by 2010.

The total subscriber base of cellular subscribers is currently at 75
million, up by 58.1 percent from the previous year. The subscriber base
is estimated to reach 100 million by 2010 (Source: Cellular Operators
Association of India), thus resulting in huge opportunities for U.S.
telecom equipment vendors.

India has created a strong manufacturing base for producing telecom
products. Indian firms typically manufacture telecom switches with
technical and financial collaboration from foreign firms. Around 19
Indian firms manufacture small and medium sized switches and 7 joint
ventures produce large capacity switches. The government-owned BSNL and
MTNL are the largest end users of telecom switches.

Value-added service providers are growing by the day, and are demanding
good infrastructure. E-mail, Internet services, frame relay services,
video conferencing, electronic data interchange and voice mail have been
accorded value-added services status. These value-added services
interface with basic telecom services and increased telecom traffic
several fold. With the increased investment in the value-added services,
the demand for other switching products such as cellular switches, ISDN
switches, gateway switches, ATM switches, is bound to grow sharply.

Digital switching system technologies of multinational companies --
Alcatel, Siemens, Fujitsu, Lucent, Ericsson and NEC -- have been
introduced in India. In addition, switching systems based on the
indigenous technology developed by state-owned Center for Development of
Telematics (C-DoT) are also used.

The other promising sub-sectors, are listed below:

### Best Products/Services [**Return to top**](#ch4)

The following is a list of the promising sub-sectors:

**Sub sector**

Mobile Headsets

Switching Equipment

Transmission Equipment

Enterprise Equipment

Optical Cables

T&M Instruments

VSAT

### Opportunities [**Return to top**](#ch4)

Several market players are planning to upgrade their telecom networks
and are planning to source transmission equipment, switches, fiber
communications network, and VSATs Following is a list of these projects

**Buyer Project Name Value (\$ Million)**

Bharat Sanchar Nigam Limited Fixed and Mobile Network 2,200

Expansion

Mahanagar Telephone Nigam Fixed and Mobile Network 140

Limited Expansion

Reliance Infocomm Reliance CDMA & Optic Fiber 1700

Network

Bharti Televentures Broadband 350

Idea Cellular GSM Rollout 200

Hutchison GSM Network Expansion 300

Tata Teleservices Expansion of CDMA network 2200

### Resources [**Return to top**](#ch4)

**Upcoming trade events:** The 5th International Telecommunications
Conference & Exhibition **GLOBALCOMM INDIA 2006** is being held at
Pragati Maidan, New Delhi from February 20-22, 2006. For more details,
please refer
[http://www.globalcomm-india.com](http://www.globalcomm-india.com/)

The 14th Annual Exhibition and Conference on Telecom, Broadcast, and
networking **CONVERGENCE INDIA 2006** will be held from March 21-23,
2006 at Pragati Maidan, New Delhi. For more information, please refer
[http://www.convergenceindia.org](http://www.convergenceindia.org/)

**Key websites:**

Indian Department of Telecom;
[http://www.dotindia.in](http://www.dotindia.in/)

Telecom Regulatory Authority of India;
[http://www.trai.gov.in](http://www.trai.gov.in/)

Cellular Operators Association of India;
[http://www.coai.com](http://www.coai.com/)

Telecom Equipment Manufacturers Association;
[http://www.temetelecom.org](http://www.temetelecom.org/)

Association of Unified Telecom Service Providers of India;
[http://www.auspi.org](http://www.auspi.org/)

**Contact Email ids:**

Sandeep Maini, Commercial Specialist, Commercial Service, New Delhi,
India; <Sandeep.maini@mail.doc.gov>

## Textile Machinery

### Overview [**Return to top**](#ch4)

  ------------------------ -------------- ------------ -------------------
                           **2003**       **2004**     **2005
                                                       (estimated)**

  Total Market Size        743            920          1,242

  Total Local Production   300            370          450

  Total Exports            85             111          147

  Total Imports            528            661          939

  Imports from the U.S.    17             29           50
  ------------------------ -------------- ------------ -------------------

(Note: These are unofficial estimates. Exchange rate \$1=INR 45; Figures
are in

\$ millions)

The Indian textile industry occupies a unique position in the Indian
economy, in terms of its contribution to industrial production,
employment, and foreign exchange earnings. At present the contribution
of the textile industry to the Gross Domestic Product (GDP) is about 4
percent, to industrial production it is about 14 percent, and accounts
for over 35 percent of India's export earnings. The textile industry
provides direct employment to about more than 30 million people and is
the second largest employment provider in India after agriculture.

The growth in the textile sector has been inspiring. Production of
fabric has increased from 39,844 million square meters in 2001-2002 to
43,498 million square meters in 2004-2005. The per capita availability
of cloth has also increased from 22.9 square meters in 1991-92 to 31.0
square meters in 2003-04. As per the latest export figures available for
April to August 2005, most of the segments of the textile industry
indicate positive growth. The segments and the growth rate -- Ready-made
garments (12.3%), Cotton textiles (0.3%), Wool (30.5%), Silk (2.1%),
Handicrafts (17.8%), Coir and Coir manufactures (16.0%), and Jute Goods
(13.7%), except for Man made textiles (-16.4%).

Today, the Indian textile industry, which is valued at \$27 billion, was
once on the verge of extinction. In order to revive the industry, a
brand new textile policy was announced in 2000. The new policy totally
removed the reservation of the garment segment to the small-scale
industry and allowed 100 percent foreign investment. The Technology
Up-gradation Fund Plan (TUFS) was also introduced to modernize the
textile industry. Under TUFS, soft loans at very cheap interest rates
were offered. The latest estimates indicate that about \$4 billion worth
of projects have been provided support in the form of subsidy to invest
in modernization of plant and machinery.

The Government of India (GOI) allows direct imports of textile
machinery. The GOI has simplified import procedures and has been
reducing import duties to encourage imports of capital goods and raw
materials. Imports of textile machinery are listed under the \"open
general\" category of the import regulations, which does not require any
government approvals. 

> Imports constitute approximately 71 percent of the total textile
> machinery industry in India. The demand for textile machinery is
> estimated to grow from \$661 million in 2004 to \$939 million in 2005.

U.S. firms such as Tubular Textile Machinery, Morrison Technologies,
Gaston Dyeing, McCoy Ellison, Coker International, Lectra, International
Textile Machinery, Bowers Fibers, CTE International Inc., Gibbs
International Inc., and Radici Spandex Corporation have established
presence in India either by directly selling to the end users or by
establishing distribution network.  Other foreign firms include,
Japanese firms such as Fukuhara, Tajima, Siruba, Yamoto, Juki, Brother,
European companies such as Truetz Schler Gmbh, Thies Gmbh, Terrot, Mayer
& CIE, Maxim S.A., Veit, Muller, Santex; Taiwan companies such as Acme
Machinery, Palung, AKM, Siruba; and Italian companies such as Marzoli,
Gigliotti and Gualchieri, Giesse, Comez, Shuelzer, Ferraro also have a
presence in the Indian market. 

### Best Products/Services [**Return to top**](#ch4)

The most promising sub-sectors for U.S. exports for the year 2005 are
machineries for the following sectors of the textile industry:

Spinning

Cotton ginning & pressing

Silk reeling & twisting

Wool scouring & combing

Synthetic filament yarn, texturising, crimping, and twisting

Manufacturing of viscose filament yarn (VFY) / viscose staple fiber
(VSF)

Weaving/knitting including non-woven and technical textiles, Garments

Made-up manufacturing

Processing of fibers, yarns, fabrics, garments and made-ups

Jute sector

This is because these sectors are eligible to avail loans at concession
rates for their technology up-gradation requirements under TUFS. 

### Opportunities [**Return to top**](#ch4)

Technology Up-gradation Fund Plan (TUFS) was launched on April 1, 1999
for a period of 5 years, with the objective to upgrade technology in
different segments of the textile industry. The implementation period of
TUFS has been extended up to March 31, 2007 and according to industry
sources it is likely to be further extended to 2010. The main feature of
this plan is that the GOI provides 5 percent reimbursement on the
interest rate charged by the lending agency. There is no limit on the
funding under this plan. Technology levels are bench marked in terms of
specified machinery for each sector of the textile industry. Machinery
with technology levels lower than that the specified level will not be
permitted for funding under the TUFS.

The World Trade Organization's Multi-Fibre Agreement came to an end on
January 1, 2005. As a result of this the import restrictions on textiles
and clothing from developing countries has been removed. The barriers on
Chinese textile exports to European Union and the USA, which are the key
markets for India will continue till year 2008. Both these reasons
provide immense growth opportunity to the Indian textile industry.
Taking advantage of this situation many textile companies have drawn up
major capacity expansion and modernization plans and will invest more
than \$210 million in the next

18-24 months. The demand for the textile machinery has jumped manifold
and is growing at the rate of 20-25 percent per annum. According to
industry sources the Indian domestic textile machinery manufacturers
will not be able to meet this increased demand and hence the only way to
fill the difference is through imports.

### Resources [**Return to top**](#ch4)

Dr. KJS Ahluwalia

Secretary General

Northern India Textile Mills Association

PHD House, 4/2 Siri Institutional Area

August Kranti Marg

New Delhi 110016

Tel: 91-11-26529784

Fax: 91-11-26863276

Email: <nitma@vsnl.net>

Website for United States International Trade Commission --
[http://dataweb.usitc.gov](http://dataweb.usitc.gov/)

Website of Office of Textile Commissioner -
[http://www.txcindia.com](http://www.txcindia.com/)

## Water

### Overview [**Return to top**](#ch4)

  ------------------------ -------------- ------------ -------------------
                           **2003**       **2004**     **2005
                                                       (estimated)**

  Total Market Size        425            500          600

  Total Local Production   355            425          510

  Total Exports            7              10           10

  Total Imports            77             85           100

  Imports from the U.S.    7              9            11
  ------------------------ -------------- ------------ -------------------

(Note: These are unofficial estimates. Figures are in \$ million)

Industry sources estimate that the total Indian water market is worth
more than \$1 billion -- consisting of approximately one-third for water
provisioning, one-third for municipal water treatment and one-third for
industrial water treatment. The overall water market is growing at 15-20
percent per annum. The wastewater treatment market segment is highly
fragmented and unorganized. Imports constitute approximately \$100
million of the \$600 million market for municipal and industrial water
treatment equipment. The U.S. is India's principal source of imports of
water treatment equipment, with an estimated share of 40 percent. U.S.
companies will find the best opportunities in sanitation, urban water
supply improvement and municipal waste treatment. Additional
opportunities exist in providing consulting and design services to the
Indian water industry.

A growing population has increased the demand for drinking water and
rapid urbanization has required increasing sewage treatment. Many
industries have been forced to adopt water-recycling systems due to
scarcity of water. Growing public concern, media pressure and renewed
legislation has left industries with no option but to install water
treatment equipment. The Indian economy has witnessed some of the
highest growth rates in the world. This growth has led to increased
water usage, especially in the food, textile, pharmaceutical, chemical
and power industries.

### Best Products/Services [**Return to top**](#ch4)

India's National Water Policy allocates water use priorities in the
following order: drinking, irrigation, hydroelectric power, ecology,
agricultural and non-agricultural industries, navigation and other uses.

U.S. companies will find the best opportunities in sanitation, urban
water supply improvement and municipal waste treatment. Additional
opportunities exist in providing consulting and design services to the
Indian water industry.

Industry sources estimate that imports constitute approximately \$100
million of the \$600 million market for municipal and industrial water
treatment equipment. Such equipment includes both equipment components
and instrumentation. Complete packaged treatment plants are not
price-competitive and their imports are estimated at \$11 million per
annum. Imports of bottled water are made mainly by service industries
such as hotels and resorts, and are estimated at no more than \$500,000.

### Opportunities [**Return to top**](#ch4)

Imports constitute approximately \$100 million of the \$600 million
market for municipal and industrial water treatment equipment. The U.S.
is India's principal source of imports of water treatment equipment,
with an estimated share of 40 percent.

The wastewater treatment market is moving gradually from chemical
treatment and demineralization plants to membrane technology. However,
several large user segments such as refineries and power plants continue
to use demineralization technology. Zero discharge systems and
wastewater recycling are becoming increasingly popular in India.

In 2003, the government announced a \$100 billion project to interlink
all major river networks in India. This initiative would connect
water-deficit areas to water-abundant ones by interlinking 37 Indian
rivers. One of the largest projects anywhere in the world, it would
transfer water through 30 links across 9,600 kilometers. It would
connect 32 dams and use 56 million tons of cement and 2 million tons of
steel. It would bring with it a huge requirement for water management,
transmission and distribution.

India's water transmission and distribution networks are outdated and
poorly maintained. The government has recently viewed privatization of
these networks as the only option. Water companies from all over the
world have established a presence in India to pursue an estimated 70
projects worth several billion dollars in 20 Indian cities spread over
several states.

In the area of water treatment, U.S. companies can joint venture with
Indian firms to offer integrated solutions in water treatment. These
solutions could include performing feasibility studies, designing,
technical consulting and providing operation and on-line maintenance
services.

Indian companies have limited capabilities and technology for the design
of water treatment plants. There is a distinct opportunity for U.S.
companies to offer technical consulting through contractual and/or joint
venture arrangements.

### Resources [**Return to top**](#ch4)

The Ministry of Water Resources is responsible for laying down policy
guidelines and programs for the development and regulation of water
resources. More information on this is available at
<http://wrmin.nic.in/policy/nwp2002.pdf>

The [World Bank](http://www.worldbank.org/) currently operates four
projects in water supply and two in sanitation and sewage improvement
with a total commitment of \$700 million.  In the past few years, The
World Bank has funded water resources consolidation projects in Haryana,
Tamil Nadu and Orissa, aimed at improving productivity and
sustainability of irrigation and multi-sector water planning,
development and management. In addition, The Bank's commitment in
India's water sector amounts to more than \$1.3 billion.

## Agricultural Sectors [**Return to top**](#ch4)

Agriculture contributes approximately 21 percent to India's GDP, and
nearly two-thirds of the population depends on agriculture for their
livelihood. Overall economic growth would be improved by a better
performing agricultural sector, which is why it is a priority of the
Indian government. The government maintains a costly price support
system for wheat and rice, and also subsidizes fertilizer. State
governments provide farmers with free or subsidized electricity and
irrigation water. The cumulative effect of these interventions has been
to distort prices, planting patterns, and marketing. The agriculture
sector suffers from declining public, and relatively small private,
investments. There is a shortage of warehouses and cold storage
facilities, causing losses due to spoilage. Infrastructures such as
roads, telecommunications, and electricity are inadequate in rural
areas, impeding agricultural growth. The agricultural sector is expected
to register a slightly better growth of around 2 percent in 2005
compared to 2004, due to better monsoon rains.

## Cotton [**Return to top**](#ch4)

**PS+D Commodity Code: 2631000**

India is a growing import market for extra long staple (ELS) cotton and
high quality long staple cotton (28-32 mm). India imports medium staple
cotton when local supplies are tight and/or when world prices are
favorable. Although India is typically a price sensitive market, there
has been an increasing demand for quality in recent years. Cotton was
the single largest agricultural export item from the United States to
India from CY 2001 through CY 2003, valued at \$194 million, \$86
million, and \$148 million, respectively. Due to larger Indian cotton
production, U.S. exports to India declined to \$58 million in CY 2004.
The United States has emerged as the largest cotton supplier to India.
Other major suppliers are West Africa, Australia, Commonwealth of
Independent States (CIS) countries, Egypt, Turkey, Greece, and South
America. Most mills using ELS are familiar with U.S. Pima and its
superior fiber characteristics. Many mill owners importing U.S. upland
cotton are appreciative of its quality and higher spinning out-turn.

## Tree Nuts and Dry Fruits [**Return to top**](#ch4)

**PS+D Commodity Code: 0802110000, 080212, 0802320000, 0802502100**

Dry fruits and nuts (primarily almonds) have been one of the leading
U.S. agricultural exports to India in the past, with exports in CY 2004
valued at a record \$96.5 million. The United States is the largest
supplier of almonds (mostly in-shell) to India, with a market share of
85-90 percent. India also imports small quantities of dates, pistachios,
hazel nuts, prunes, and raisins, mainly from Iran, Afghanistan,
Pakistan, and the Middle East.

## Wood Products [**Return to top**](#ch4)

**PS+D Commodity Code: 4401**

India has removed virtually all non‑tariff trade barriers on wood
product imports, although tariffs remain high. The domestic market is
highly price sensitive. Scarce supplies and high prices have limited the
use of wood in construction and other sectors. Dwindling domestic
supplies and restrictions on tree felling due to environmental concerns
are likely to result in a more liberal import regime over the coming
years. U.S. wood exports to India in CY 2004 were valued at \$2.9
million.

## Fresh Fruits [**Return to top**](#ch4)

**PS+D Commodity Code: N/A**

India provides market access for most fresh fruits, although tariffs are
high. With a growing segment of consumers insisting on world standards
and year-round availability, there is an increasing demand for imported
fresh fruits. U.S. exports of fresh fruit to India in CY 2004 were
valued at a record \$18.2 million, mostly apples and table grapes.
Market sources expect imports to show double-digit growth over the
coming years, with new products expected to enter the Indian market.

## Pulses [**Return to top**](#ch4)

**PS+D Commodity Code: 0542100, 0542200, 0542300, 0542400**

India is the world's largest importer of pulses (peas, lentils, and
beans). Imports totaled 1.3 million tons, valued at Rs. 17.2 billion
(\$382 million), in Indian Fiscal Year 2004-05 (April- March), and are
forecast at 1.5 million tons in 2005-06. India is primarily a price
(rather than quality) market. Imports are sourced largely from Canada,
Myanmar, Australia, and France, because of relatively lower prices.
However, with increasing U.S. production and lower prices over recent
years, U.S. pulses, particularly dry peas, are becoming competitive in
the Indian market. U.S. exports in CY 2005 are likely to increase
dramatically to over \$10 million. Pulses attract a relatively modest 10
percent import tariff.

## Vegetable Oil [**Return to top**](#ch4)

**PS+D Commodity Code: 4240000**

India remains the world's largest edible oil importer, with 2004-05
(Oct-Sep) imports estimated at 5 million tons. While cheap palm oil has
traditionally dominated this price-sensitive market, exporters with
competitively priced supplies of other oils, such as soybean oil,
cottonseed oil, corn oil, and sunflower seed oil, should find buyers in
India. While the import duty on most oils ranges from 65 to 75 percent,
soybean oil enjoys a preferential duty of 45 percent, due to India's WTO
commitments. Although India has now emerged as a major commercial buyer
of soybean oil, imports from the United States are limited due to higher
prices vis-à-vis oils of South American origin.

## Planting seeds [**Return to top**](#ch4)

**PS+D Commodity Code: N/A**

Indian imports of planting seeds, mostly for vegetables and flowers, are
growing, and were valued at \$21.4 million during Indian Fiscal Year
2004/05, with a U.S. share of 17 percent. The Indian seed industry is
undergoing a transformation, which includes an increasing role for
private seed companies, the rising presence of multinational seed
companies, and wide-ranging changes in regulatory frameworks. All of
these will likely affect seed research, marketing, and trade in coming
years. With demand for high quality fruits and vegetables growing from
domestic consumers and the food processing industry, India's seed
imports are likely to grow.

## Snack foods [**Return to top**](#ch4)

**PS+D Commodity Code: N/A**

With consumers' changing life styles and the increasing disposable
income of the middle class, there is rising demand for imported snack
foods, despite competition from local players. January through October
2005 exports of U.S. snack foods to India reached a record \$2 million.

## Hides and skins [**Return to top**](#ch4)

**PS+D Commodity Code: N/A**

India imported hides and skins worth about \$47 million during Indian
fiscal year 2004-05 to cater to its booming leather goods exports
sector. Imports were mainly from Europe, as it is also a major market
for Indian finished leather products. Indian importers are now looking
for sources other than Europe to supply new product categories and new
markets. Imports of hides and skins from United States suppliers have
been limited due to a lack of awareness among Indian tanners regarding
the various selections of hides and skins from them. However, with
increased promotional efforts, U.S. suppliers should be able to compete
in the Indian market. Raw hides imports attract a zero tariff in India;
wet blues attract a tariff of 15.3 percent.

**WEB RESOURCES**

-   Ministry of Agro and Rural Industries; <http://ari.nic.in/>

-   Ministry of Commerce and Industry; <http://commin.nic.in/>

-   Ministry of Consumer Affairs, Food & Public Distribution;
    <http://fcamin.nic.in/>

-   Ministry of Food Processing Industries; <http://mofpi.nic.in/>

-   Foreign Agricultural Service (FAS), United States Department of
    Agriculture; [http://www.fas.\$a.gov](http://www.fas.usda.gov/)

[Return to table of
contents](#doing-business-in-india-a-country-commercial-guide-for-u.s.-companies)

[[]{#ch5 .anchor}Return to table of
contents](#doing-business-in-india-a-country-commercial-guide-for-u.s.-companies)

# Chapter 5: Trade Regulations and Standards

-   [Import Tariffs](#import-tariffs-return-to-top)

-   [Trade Barriers](#trade-barriers-return-to-top)

-   [Import Requirements and
    Documentation](#import-requirements-and-documentation-return-to-top)

-   [U.S. Export Controls](#u.s.-export-controls-return-to-top)

-   [Temporary Entry](#temporary-entry-return-to-top)

-   [Labeling and Marking
    Requirements](#labeling-and-marking-requirements-return-to-top)

-   [Prohibited and Restricted
    Imports](#prohibited-and-restricted-imports-return-to-top)

-   [Customs Regulations and Contact
    Information](#customs-regulations-and-contact-information-return-to-top)

-   [Standards](#standards-return-to-top)

-   [Trade Agreements](#trade-agreements-return-to-top)

-   [Web Resources](#web-resources-return-to-top-1)

## Import Tariffs [**Return to top**](#ch5)

From 1947 to 1991, India\'s import and export policies were such that a
vast majority of goods could be imported only under license from the
central government\'s Controller of Imports & Exports (CCI&E). In 1991,
India initiated economic reforms to tide over the budget deficit,
balance of payments problems and structural imbalances in several
industry sectors of the economy. In successive years, India has made the
trade regime increasingly more transparent. However, India\'s tariffs
are still high by international standards. These high tariffs and import
restrictions have constrained U.S. firms from selling in this market and
U.S. investors from importing competitive inputs in several industries.

India\'s policy relating to the general provisions regarding exports and
imports is guided by the Export Import (EXIM) Policy of 2002-2007.
Imports are now permitted in most cases without a license. Exceptions to
this arise where items are prohibited or restricted (import permitted
under license) or where imports are allowed only through a state-owned
enterprise. A new 8-digit commodity classification based on ITC-
Harmonized System of coding for imports was adopted in April 2002.

Since April 2001, India removed quantitative restrictions (QR) on a
final batch of 715 items, completing the process of phased trade policy
liberalization that was started in 1991. Out of these 715 items 342 were
textile products, 147 were agricultural products including alcoholic
beverages and 226 were other manufactured products including
automobiles.

While India has removed some tariff barriers, it has introduced other
curbs such as adjustment of tariffs and anti dumping duties.
Approximately 300 items comprise a \'sensitive\' list of imports that
the Government monitors. A \'war room\' group has been created to
closely monitor the import trends for these items.

India has appealed to the Appellate Body of the World Trade Organization
against the recommendations of a WTO panel report on its quantitative
restrictions on import of agricultural, textile, and industrial
products. India has challenged the panel's authority to determine
whether the balance of payments can be used to justify imposition of
import restrictions and the overall compatibility of regional trade
agreements with WTO norms. The removal of QRs and the prospect of
further reduction in tariffs to the Asian levels are likely to lead to a
high degree of import competition.

##### TARIFF RATES

Despite the economic reforms program adopted by India in 1991 and the
measures taken thereafter to open the market, Indian tariffs remain high
compared to international standards, especially in the agricultural
sector. U.S. companies face tariff and non-tariff barriers that impede
their exports. For non-agricultural goods however, India has made
considerable progress in restructuring tariffs. In February 2005, the
Government of India (GOI) reduced the peak applied non-agricultural duty
by another 5 percentage points to 15 percent from 20 percent.

Classification: The basic legislation is the Indian Customs Act, 1962,
ant the Customs Tariff Act, 1975. Section 12 of the Customs Act,\'62
empowers levy of duties on goods imported into or exported from India.
However, the rates at which the different import export duties which are
levied have been specified in the First and Second Schedule to the
Customs Tariff Act, 1975-called the import Tariff and Export Tariff
respectively. The Indian customs classification on tariff items follows
the Harmonized Commodity Description and Coding System (Harmonized
System or HS). India has fully adopted HS through the Customs Tariff
Amendment Act, 1985. There has been some modification of HS as
appropriate to the Indian environment concerning excise taxes.

It is pertinent to note that the excise authorities also use the HS
codes for classifying the goods for levying the excise duty
(manufacturing taxes) on the goods produced in India.

**CUSTOMS DUTIES**

Customs duties are levied in three ways:

-   Specific rate: At the rate prescribed per unit of item i.e. weight
    or number of length

-   Ad-valorem: duty-levied on the value of the item

-   Both of the above levied simultaneously

The Customs Act was formulated in 1962 to control the imports through
preventing illegal imports and exports of goods. The Customs Tariff Act
specifies the tariffs rates and provides for the imposition of
anti-dumping and countervailing duties. With some exceptions, most
tariffs are ad-valorem. Tariff rates, excise duties, regulatory duties,
and countervailing duties are revised in each annual budget.

From February 1, 2003, Indian Customs uses the 8-digit customs
classification code based on Harmonized System of Nomenclature (HSN).
Currently, Indian Customs, the [Directorate-General of Commercial
Intelligence and Statistics](http://www.dgciskol.nic.in/), and the
[Directorate General of Foreign Trade](http://dgft.delhi.nic.in/) use
different nomenclatures and codes for classification of imports and
exports.

While Customs use six-digit codes, DGCI&S uses eight-digit codes for
statistical purposes. The DGFT has broadly extended the eight-digit
DGCI&S codes up to 10 digits.

##### TYPES & LEVY OF CUSTOMS DUTIES

**Basic duty:** All goods imported into India are chargeable to duty as
prescribed in the 1st Schedule of Customs Tariff Act. This Schedule is
amended from time to time of Customs Tariff Act. This duty can be levied
either as a percentage of value of goods or at a specified rate. Indian
government assesses a one percent customs handling fee on all imports in
addition to the applied customs duty.

**Surcharge:** It is levied at the rate of 10 percent of the basic rate
on all commodities except crude oil and petroleum products, GATT-bound
items, gold and silver.

**Additional Duty:** Popularly known as the countervailing duty or CVD,
is levied on the cost of imported goods and is equivalent to the excise
duty levied on like goods when manufactured in India. The objective is
to ensure that the protection provided by the import duty to domestic
industry is not eroded.

**Education Cess:** Effective July 2004, India introduced a new
education cess (duty) assessment at the rate of two percent of the
aggregate duty of customs (except safeguard duty, countervailing duty,
and anti-dumping duty) levied on such goods. Goods bound under
international commitments have been exempted from this cess.

**Anti-dumping Duty:** This is levied on specified goods imported from
specified countries, including the U.S., to protect indigenous industry
from injury.

**Safeguard Duty:** The Indian government after conducting an enquiry if
satisfied that any article is imported into the country in such
increased quantities and under such conditions so as to cause or
threatening to cause serious injury to domestic industry, then it may by
notification impose a safeguard duty on that article.

##### COMPUTATION OF TOTAL TARIFF 

Total duty payable = Landed cost including CIF of the item concerned +
Basic customs duty under the Customs Tariff Act + Surcharge thereon +
Additional duty + Education cess.

In order to give a broad guide as to classification of goods for the
purpose of duty liability, the [Central Board of Excises Customs
(CBEC)](http://www.cbec.gov.in/) periodically publishes a book called
the \"Indian Customs Tariff Guide\" which contains various tariff
rulings issued by the CBEC. The Act also contains detailed provisions
for warehousing of the imported goods and manufacture of goods is also
possible in the warehouses.

The Indian government publishes customs tariffs rates on imports but
there is no single official publication that has all information on
tariffs and tax rates on imports. Moreover, each Indian State levies
taxes on interstate trade and commerce, which creates confusion.
Effective April 2005, the Indian government implemented a Value-Added
tax (VAT) system meant to replace the inter-state taxes, but
implementation is not yet universal in all the States.

**Duty exemption plan:** The Duty Exemption Plan enables duty free
import of inputs required for export production. An advance license is
issued under the duty exemption plan. The Duty Remission Plan enables
post export replenishment remission of duty on inputs used in the export
product. Duty Remission plan consists of (a) DFRC and (b) DEPB. DFRC
permits duty free import charges on inputs used in the export product.
The government has wide discretionary power to declare full or partial
duty exemptions "in the public interest" and to specify conditions such
as end-use provisions. Almost half of India's total inputs enter under
concessional tariffs, though the use of exemptions is falling in tandem
with the tariff-reduction program.

While reduced tariffs have assisted several U.S. export industries,
further reductions in basic tariff rates would benefit a wide range of
U.S. exports. Industries that might benefit from reduced tariff rates
include the following: consumer products, processed food, footwear, toys
and telecommunications products. Fertilizers, mining equipment, wood
products, jewelry, camera components, paper and paperboard, ferrous
waste and scrap, computers, office machines and spares, textile
machinery and spare parts, hand tools, soft drinks, cling peaches,
vegetable juice and canned soup would also benefit.

## Trade Barriers [**Return to top**](#ch5)

Any restriction imposed on the free flow of trade is a trade barrier.
Trade barriers can either be tariff barriers (the levy of ordinary
negotiated customs duties in accordance with Article II of GATT) or
non-tariff barriers (any trade barriers other than the tariff barriers).

**Import Licensing:** One of the most commonly known non-tariff barriers
is the prohibition or restrictions on imports maintained through the
import licensing requirements. Though India has eliminated its import
licensing requirements for most consumer goods, certain products face
licensing related trade barriers. For example the Indian government
requires special import license for motorcycles and vehicles that are
very restrictive. Import license for motorcycles are provided to only
foreign nationals permanently residing in India, working in India for
foreign firms that hold greater than 30 percent equity or to foreign
nations working at embassies and foreign missions. Some domestic
importers are allowed to import vehicles without a license provided the
imports are counterbalanced by exports attributable to the same
importer.

**Standards, testing, labeling & certification:** Indian government has
identified 109 commodities that must be certified by its National
Standards body, which is the [Bureau of Indian
Standards](http://www.bis.doc.gov/) (BIS). These requirements are
insisted upon for ensuring quality of goods seeking an access into the
domestic markets but many countries use them as protectionist measures.
The impact of these requirements is felt more by the purpose and the way
in which these are used to regulate the trade. For more on labeling, see
the section on [Labeling and Marking
Requirements](#_Labeling_and_Marking) in this chapter.

Two of the covered agreements under the WTO, namely the Agreement on the
Application of Sanitary & Phyto-sanitary Measures (SPM) and the
Agreement on Technical Barriers to Trade (TBT), specifically deal with
the trade related measures necessary to protect human, animal or plant
life or health, to protect environment and to ensure quality of goods.

**Anti-dumping and countervailing measures:** Anti-dumping and
countervailing measures are permitted to be taken by the WTO Agreements
in specified situations to protect the domestic industry from serious
injury arising from dumped or subsidized imports. India imposes these
from time-to-time to protect the domestic manufacturers from dumping.
India's implementation of its antidumping policy has, in some cases,
raised concerns regarding transparency and due process. In recent years,
India seems to have aggressively increased its application of the
antidumping law. In 2005, India initiated 13 antidumping reviews, which
according to WTO is the third highest among all its members.

**Export subsidies and domestic support:** Export earnings are exempt
from taxes and exporters also need not pay local manufacturing tax.
Several export subsidies and domestic support is provided to several
industries to make them competitive internationally. While export
subsidies tend to displace exports from other countries into the third
country markets, the domestic support acts as a direct barrier against
access to the domestic market.

**Procurement:** Indian government allows a price preference for local
suppliers in government contracts and generally discriminates against
foreign suppliers. In international purchases and International
Competitive Bids (ICB's) domestic companies gets a price preference in
government contract and purchases.

**Service barriers:** There has been tremendous growth in this sector
with the share of this sector increasing the GDP of India. Services in
which there are some restrictions include: insurance, banking,
securities, motion pictures, accounting, construction, architecture and
engineering, retailing, legal services, express delivery services and
telecommunication.

**IPR:** As of January 1, 2005 the Indian government has a new patent
law in place that is expected to be in line with international norms. It
is too early to predict how the implementation of the new patent law
will be in India. The amendments to the local IPR law make it compatible
with the provisions of WTO and TRIPS. With the Indian patent regime in
par with international level, government sources are hopeful that more
investment will be flow in to this sector. However, industry sources
confirm that it is too early to predict how the Indian patent regime
will be effective under this new law. (for more information, see Chapter
6, [Protection of Property
Rights](#protection-of-property-rights-return-to-top))

**Other barriers:** Equity restrictions and other trade-related
investment measures are in place to give an unfair advantage to domestic
companies. The GOI continues to prohibit FDI in sensitive sectors such
as retail trade and agriculture. Additionally there is an unpublished
policy that favors counter trade. Several Indian companies both
government-owned and private companies conduct a small amount of counter
trade.

## Import Requirements and Documentation [**Return to top**](#ch5)

**Import licensing requirements:** In the last decade, India has
steadily replaced licensing and discretionary controls over imports with
deregulation and simpler import procedures. The majority of import items
fall within the scope of India's EXIM Policy regulation of the Open
General License (OGL). This means that they are deemed to be freely
importable without restrictions and without a license, except to the
extent that they are regulated by the provisions of the Policy or any
other law for the time being in force.

Imports of items not covered by OGL are regulated, and fall into three
categories: banned or prohibited items; restricted items, requiring an
import license; \"canalized\" items importable only by government
trading monopolies and subject to Cabinet approval regarding timing and
quantity.

# IMPORT CATEGORIES 

# Actual user condition: Capital goods, raw materials, intermediates, components, consumables, spares, parts, accessories, instruments and other goods, which are importable without any restriction, may be imported by any person. However, if such imports require a license, the actual user alone may import such goods unless the licensing authority specifically dispenses with the Actual User Condition.

# Second hand goods: All second hand goods are restricted for imports and may be imported only in accordance with the provisions of the Policy. ITC (HS), Handbook (Vol.1), Public Notice or a license issued in this behalf applies.

# Import of gifts: Imports of gifts are permitted where such goods are otherwise freely importable under the Policy. In other cases, a Customs Clearance Permit (CCP) is required.

# Passenger baggage: Household goods and personal effects can be imported as part of passenger baggage. Samples of such items that are otherwise freely importable under the Policy may also be imported as part of passenger baggage without a license. Exporters coming from abroad are also allowed to import drawings, patterns, labels, price tags, buttons, belts, trimming and embellishments required for export, as part of their passenger baggage, without a license.

# Import on export basis: New or second hand jigs, fixtures, dies (including contour roller dies), moulds (including molds for die-casting), patterns, press tools and lasts, construction machinery, containers/ packages meant for packing of goods for export and other equipment, can be imported for export without a license by furnishing a Legal Undertaking/Bank Guarantee with the Customs Authorities.

# Re-Import of goods repaired abroad: Capital goods, aircraft including their components spare parts and accessories, whether imported or indigenous, can be sent abroad for repairs, testing, and quality improvement or upgrading of technology and re-imported without a license.

# Import of machinery and equipment used in projects abroad: After completion of the projects abroad, project contractors may import, without a license, used construction equipment, machinery, related spares up to 20 percent of the CIF value of such machinery, tools and accessories. Used office equipment and vehicles may also be imported after completion of the projects abroad without a license provided they have been used for at least one year.

# Sale on high seas: Sale of goods on high seas for import into India may be made subject to the EXIM Policy or any other law for the time being in force.

# Import under lease financing: Permission from the licensing authority is not required for import of new capital goods under lease financing.

# THE FOLLOWING ARE DESIGNATED IMPORT CERTIFICATE ISSUING AUTHORITIES: 

# The Department of Electronics for import of computer and computer related systems

# The Department of Industrial Policy and Promotion for organized sector firms except for import of computers and computer based systems

# The Ministry of Defense for defense related items

# The Director General of Foreign Trade for small-scale industries not covered in the foregoing. 

# Capital goods can be imported with a license under the Export Promotion Capital Goods plan (EPCG) at reduced rates of duty, subject to the fulfillment of a time-bound export obligation. The EPGC plan now applies to all industry sectors. It is also applicable to all capital goods without any threshold limits, on payment of 5 percent custom duty.

# A duty exemption plan is also offered under which imports of raw materials, intermediates, components, consumables, parts, accessories and packing materials required for direct use in products to be exported may be permitted free of duty under various categories of licenses. The actual user, non-transferable advance license is one such license. For those who do not wish to go through the advance-licensing route, post-export duty-free replenishment certificate is available. 

# Advance License: An advance license is issued to allow duty free import of inputs, which are physically incorporated in the export product (making normal allowance for wastage). In addition, fuel, oil, energy, catalysts etc. that are consumed in the course of their use to obtain the export product, may also be allowed under the plan. 

# Duty free import of mandatory spares up to 10 percent of the CIF value of the license, which are required to be exported/ supplied with the resultant product, may also be allowed under Advance License. 

# ADVANCE LICENSE CAN BE ISSUED FOR: 

# Physical exports. An advance license may be issued for physical exports to a manufacturer exporter or merchant exporter tied to supporting manufacturer(s) for import of inputs required for the export product. 

# Intermediate supplies. An advance license may be issued for intermediate supply to a manufacturer-exporter for the import of inputs required in the manufacture of goods to be supplied to the ultimate exporter/deemed exporter holding another Advance License. 

# Deemed exports. An advance license can be issued for deemed exports to the main contractor for import of inputs required in the manufacture of goods to be supplied to the categories mentioned in paragraph 8.2 (b), (c), (d) (e) (f), (g), (i) and (j) of the Policy. An advance license for deemed exports can also be availed by the sub-contractor of the main contractor to such project provided the name of the sub contractor(s) appears in the main contract. Such license for deemed export can also be issued for supplies made to United Nations Organizations or under the Aid Program of the United Nations or other multilateral agencies and paid for in foreign exchange.

# Import Declaration: Importers are required to furnish an import declaration in the prescribed bill of entry format, disclosing full details of the value of imported goods. 

# Import Licenses (if applicable): All import documents must be accompanied by any import licenses. This will enable the customs to clear the documents and allow the import without delay.

# Ex-factory invoice, freight and insurance certificates: These must be attached so that the customs can verify the price and decide on the classification under which the import tariff can be calculated. 

# Letter of Credit: All importers must accompany a copy of the L/C to ensure that the payment for the import is made. Normally this document is counter-checked with the issuing bank so that outflow of foreign exchange is checked. 

Not all consignments are inspected prior to clearance, and inspection
may be dispensed with for reputable importers. In the current customs
set-up, an appointment with the clearing agents for clearance purposes
will avoid delays. In general, documentation requirements, including
ex-factory bills of sale, are extensive and delays are frequent. These
cost investors time and money, including additional detention and
demurrage charges, making it more expensive to operate and invest in
India. For delayed clearances, importers seek release of shipments
against a performance bond; furnishing a bank guarantee for this purpose
is a more expensive proposition. Customs have recently extended
operations to 24 hours a day to ensure timely clearance of export cargo.

## U.S. Export Controls [**Return to top**](#ch5)

The Indian and the U.S. government-formed a High Technology Cooperation
Group (HTCG) in November 2002 to facilitate and promote high technology
bilateral trade. The Bureau of Industry and Security (BIS) (formerly
known as the Bureau of Export Administration, BXA) is the American
government agency responsible for implementing and enforcing the Export
Administration Regulations (EAR), which regulate the export and
re-export of most commercial items. BIS often refer to the items that
they regulate as \"dual-use\" -- items, since these items have both
commercial and military or proliferation applications - but purely
commercial items without an obvious military use are also subject to the
EAR. For further inquiries regarding the list of items requiring U.S.
export clearance contact:

The Director, Office of Strategic Trade and Foreign Policy Controls 14th
Street and Constitution Avenue, NW U.S. Department of Commerce,
Washington DC 20230 Telephone: 202-482-4196 Fax 202-482-4094 Website:
<http://www.bis.doc.gov/>

## Temporary Entry [**Return to top**](#ch5)

The Indian Customs Act, 1962 allows import of goods on a temporary basis
into India. Section 74 of the Act provides for drawback on goods that
are imported for a temporary period into India and exported out of the
country.

As per the Section 74, drawback is allowable on re-export of duty paid
goods. When the goods are re-exported out of India, the exporter will be
entitled to a drawback of a specified percentage of the duty paid at the
time of import. The procedure for claiming duty drawback under Section
74 is governed by provisions of the Re-Export of Imported Goods
(Drawback of Customs Duties) Rules, 1995.

The rate of drawback available depends upon the time period for which
the goods are stored in India or put to use. If goods are re-exported
without being put to use in India, 98 percent of the customs duty would
be available as duty drawback, provided that the exports have taken
place within 24 months from the date of import.

However, under section 75 of the Act, where the goods are used in India
subsequent to their import, the drawback is determined on the basis of
the duration of use of the goods in India (the length of period from the
date of clearance for home consumption and the date goods are placed
under customs control for export). The procedure for claiming duty
drawback under Section 75 is governed by provisions of the Customs and
Central Excise Duties Drawback Rules 1995.

In addition, General Exemption No 14 of the Customs Tariff allows import
of goods for display or use at fair, exhibition, demonstration, seminar,
congress and conferences, subject to specified conditions. The [U.S.
Commercial Service](http://www.buyusa.gov/india/en/) of the American
Embassy assists U.S. companies with temporary entry of their product and
other display items for trade events enter India duty free for up to 6
months through its [Customs Clearance
Guarantee](http://www.buyusa.gov/india/en/83.html) service. The products
have to be re-exported within six months.

## Labeling and Marking Requirements [**Return to top**](#ch5)

Labeling is an important element for products being exported to India.
English is the favorable language for labeling. All packets or even
containers should carry information depending upon the consignment. The
Indian Customs are strict and ensure that imported items have the
legally required information before these enter the retail market or are
sold for consumption, excluding those products that fall under the EOU
segment.

As per a Notification issued by the Ministry of Commerce on November 24,
2000, **all pre-packaged commodities (intended for direct retail sale)
imported into India must carry the following declarations on the
label:**

-   Name and address of the importer

-   Generic or common name of the commodity packed

-   Net quantity in terms of standard unit of weights and measures. All
    units of weight or measure are to be reported in metric. If the net
    quantity of the imported package is given in any other unit, its
    equivalent of standard units shall have to be declared by the
    importer

-   Month and year of packing in which the commodity is manufactured,
    packed or imported, and

-   The maximum retail sales price (MRP) at which the commodity in
    packaged form may be sold to the end consumer. The MRP includes all
    taxes, freight transport charges, commission payable to dealers, and
    all charges towards advertising, delivery, packing, forwarding and
    the like.

Compliance of the above-stated requirements has to be ensured before the
import consignments are cleared by Customs in India. The import of
pre-packaged commodities such as raw materials, components, bulk import
etc., that need to undergo further processing before they are sold to
end consumers are not included under this labeling requirement.

Labeling requirements for packaged food products as laid down in the
Part VII of the [PFA Rules](http://mohfw.nic.in/pfa.htm), 1955, and the
[Standards of Weights and Measures (Packaged Commodities) Rules of
1977](http://fcamin.nic.in/wm_pkrules.htm) requires that the labels
contain the following information:

-   Name, trade name or description

-   Name of ingredients used in the product in descending order of their
    composition by weight or volume

-   Name and complete address of manufacturer/packer, importer, country
    of origin of the imported food (if the food article is manufactured
    outside India, but packed in India)

-   Net weight, number or volume of contents

-   Distinctive batch, lot or code number

-   Month and year of manufacture and packaging

-   Month and year by which the product is best consumed

-   Maximum retail price

**Wherever applicable, the product label also has to contain the
following:**

-   The purpose of irradiation and license number in case of irradiated
    food

-   Extraneous addition of coloring matter

-   Non-vegetarian food -- any food which contains whole or part of any
    animal including birds, fresh water or marine animals, eggs or
    product of any animal origin as an ingredient, not including milk or
    milk products -- must have a symbol of a brown color-filled circle
    inside a brown square outline prominently displayed on the package,
    contrasting against the background on the display label in close
    proximity to the name or brand name of the food.

-   Vegetarian food must have a similar symbol of green color-filled
    circle inside a square with a green outline prominently displayed

**All declarations may be:**

-   Printed in English or Hindi on a label securely affixed to the
    package, or

-   Made on an additional wrapper containing the imported package, or

-   Printed on the package itself, or

-   May be made on a card or tape affixed firmly to the package and
    bearing the required information prior to customs clearance

Products displaying only the standard U.S. label cannot enter. As
regards the shelf life of imported food items, a Notification issued by
the Ministry of Commerce on July 30, 2001, states that: "Imports of all
food products, domestic sale and manufacture of which are governed by
the [Prevention of Food Adulteration Act
(PFA)](http://mohfw.nic.in/pfa acts and rules.pdf) shall also be subject
to the condition that, at the time of importation, these products are
having a valid shelf life of not less than 60 percent of its original
shelf life. Shelf life of the product is to be calculated, based on the
declaration given on the label of the product, regarding the date of
manufacture and the due date of expiry."

## Prohibited and Restricted Imports [**Return to top**](#ch5)

For the most current information on India's Prohibited Import List,
please see <http://exim.indiamart.com/freedlist/prohibited.html>. At the
time of publication, there were 58 items prohibited for import into
India.

**HS code/ExIm Code / Item Description / Sub Heading Description**

0106000120 [Wild animals as specified under Wild Life Protection Act,
1972](http://exim.indiamart.com/freedlist/prohibited-0106.html#120)
([Other live
animals](http://exim.indiamart.com/freedlist/prohibited-0106.html#120) )

0106000220 [Wild animals as specified under Wild Life Protection Act,
1972](http://exim.indiamart.com/freedlist/prohibited-0106.html#220)
([Other live
animals](http://exim.indiamart.com/freedlist/prohibited-0106.html#220) )

0106000320 [Bees and other insects as specified under Wild Life
Protection Act,
1972](http://exim.indiamart.com/freedlist/prohibited-0106.html#320)
([Other live
animals](http://exim.indiamart.com/freedlist/prohibited-0106.html#320) )

0106000920 [Wild animals as specified under Wild Life Protection Act,
1972](http://exim.indiamart.com/freedlist/prohibited-0106.html#920)
([Other live
animals](http://exim.indiamart.com/freedlist/prohibited-0106.html#920) )

0208900010 [Meat and edible meat offal, fresh, chilled or frozen of wild
animals](http://exim.indiamart.com/freedlist/prohibited-0208.html)
([Other meat and edible meat offals, fresh, chilled or
frozen](http://exim.indiamart.com/freedlist/prohibited-0208.html) )

02090000 [Pig fat, free of lean meat, and poultry fat, not rendered or
otherwise extracted, fresh, chilled, frozen, salted, in brine, dried or
smoked](http://exim.indiamart.com/freedlist/prohibited-0209.html) ([Pig
fat, free of lean meat, and poultry fat, not rendered or otherwise
extracted, fresh, chilled, frozen, salted, in brine, dried or
smoked](http://exim.indiamart.com/freedlist/prohibited-0209.html) )

0210900910 [Of wild
animals](http://exim.indiamart.com/freedlist/prohibited-0210.html)([Meat
and edible meat offal, salted, in brine, dried or smoked; edible flours
and meals of meat or meat
offal](http://exim.indiamart.com/freedlist/prohibited-0210.html) )

0410000110 [Of wild animals as defined in Wild Life Protection Act,
1972](http://exim.indiamart.com/freedlist/prohibited-0410.html#110)
([Edible products of animal origin, not elsewhere specified or
included](http://exim.indiamart.com/freedlist/prohibited-0410.html#110)
)

0410000910 [Of wild animals as defined in Wild Life Protection Act,
1972](http://exim.indiamart.com/freedlist/prohibited-0410.html#910)
([Edible products of animal origin, not elsewhere specified or
included](http://exim.indiamart.com/freedlist/prohibited-0410.html#910)
)

0504000310 [Of wild animals as specified in Wild Life Protection Act,
1972](http://exim.indiamart.com/freedlist/prohibited-0504.html#310)
([Guts, bladders and stomachs of animals (other than fish), whole and
pieces thereof, fresh, chilled, frozen, salted in brine, dried or
smoked](http://exim.indiamart.com/freedlist/prohibited-0504.html#310) )

0504000410 [Of wild animals as specified in Wild Life Protection Act,
1972](http://exim.indiamart.com/freedlist/prohibited-0504.html#410)
([Guts, bladders and stomachs of animals (other than fish), whole and
pieces thereof, fresh, chilled, frozen, salted in brine, dried or
smoked](http://exim.indiamart.com/freedlist/prohibited-0504.html#410) )

0504000510 [Of wild animals as specified in Wild Life Protection Act,
1972](http://exim.indiamart.com/freedlist/prohibited-0504.html#510)
([Guts, bladders and stomachs of animals (other than fish), whole and
pieces thereof, fresh, chilled, frozen, salted in brine, dried or
smoked](http://exim.indiamart.com/freedlist/prohibited-0504.html#510) )

0505100010 [Of wild birds as specified in Wild Life Protection Act,
1972](http://exim.indiamart.com/freedlist/prohibited-0505.html#010)
([Skins and other parts of birds, with their feathers or down, feathers
and parts of feathers (whether or not with trimmed edges) and down, not
further worked than cleaned, disinfected or treated for preservation;
Powder and Waste of feathers or parts of
feathers](http://exim.indiamart.com/freedlist/prohibited-0505.html#010))

0505900210 [Of wild birds specified in Wild Life Protection Act,
1972](http://exim.indiamart.com/freedlist/prohibited-0505.html#210)
([Skins and other parts of birds, with their feathers or down, feathers
and parts of feathers (whether or not with trimmed edges) and down, not
further worked than cleaned, disinfected or treated for preservation;
Powder and Waste of feathers or parts of
feathers](http://exim.indiamart.com/freedlist/prohibited-0505.html#210))

0505900310 [Of wild birds specified in Wild Life Protection Act,
1972](http://exim.indiamart.com/freedlist/prohibited-0505.html#310)
([Skins and other parts of birds, with their feathers or down, feathers
and parts of feathers (whether or not with trimmed edges) and down, not
further worked than cleaned, disinfected or treated for preservation;
Powder and Waste of feathers or parts of
feathers](http://exim.indiamart.com/freedlist/prohibited-0505.html#310))

0505900910 [Of wild birds as specified in Wild Life Protection Act,
1972](http://exim.indiamart.com/freedlist/prohibited-0505.html#910)
([Skins and other parts of birds, with their feathers or down, feathers
and parts of feathers (whether or not with trimmed edges) and down, not
further worked than cleaned, disinfected or treated for preservation;
Powder and Waste of feathers or parts of
feathers](http://exim.indiamart.com/freedlist/prohibited-0505.html#910))

0506100110 [Of wild animals as specified in Wild Life Protection Act,
1972](http://exim.indiamart.com/freedlist/prohibited-0506.html#110)
([Bones and horn-cores, unworked, defatted, simply prepared (but not cut
to shape), treated with acid or degelatinised; powder and waste of these
products](http://exim.indiamart.com/freedlist/prohibited-0506.html#110))

0506100210 [Of wild animals as specified in Wild Life Protection Act,
1972](http://exim.indiamart.com/freedlist/prohibited-0506.html#210)([Bones
and horn-cores, unworked, defatted, simply prepared (but not cut to
shape), treated with acid or degelatinised; powder and waste of these
products](http://exim.indiamart.com/freedlist/prohibited-0506.html#210))

0506100310 [Of wild animals as specified in Wild Life Protection Act,
1972](http://exim.indiamart.com/freedlist/prohibited-0506.html#310)
([Bones and horn-cores, unworked, defatted, simply prepared (but not cut
to shape), treated with acid or degelatinised; powder and waste of these
products](http://exim.indiamart.com/freedlist/prohibited-0506.html#310))

0506100410 [Of wild animals as specified in Wild Life Protection Act,
1972](http://exim.indiamart.com/freedlist/prohibited-0506.html#410)([Bones
and horn-cores, unworked, defatted, simply prepared (but not cut to
shape), treated with acid or degelatinised; powder and waste of these
products](http://exim.indiamart.com/freedlist/prohibited-0506.html#410))

0506900110 [Of wild animals as specified in Wild Life Protection Act,
1972](http://exim.indiamart.com/freedlist/prohibited-0506.html#9-110)
([Bones and horn-cores, unworked, defatted, simply prepared (but not cut
to shape), treated with acid or degelatinised; powder and waste of these
products](http://exim.indiamart.com/freedlist/prohibited-0506.html#9-110))

0506900910 [Of wild animals as specified in Wild Life Protection Act,
1972](http://exim.indiamart.com/freedlist/prohibited-0506.html#9-910)
([Bones and horn-cores, unworked, defatted, simply prepared (but not cut
to shape), treated with acid or degelatinised; powder and waste of these
products](http://exim.indiamart.com/freedlist/prohibited-0506.html#9-910))

05071001 [Ivory, unworked or simply
prepared](http://exim.indiamart.com/freedlist/prohibited-0507.html#001)
([Ivory, tortoise-shell, whalebone and whale-bone hair, horns, antlers,
hooves, nails, claws and beaks, unworked or simply prepared but not cut
to shape; Powder and waste of these
products](http://exim.indiamart.com/freedlist/prohibited-0507.html#001))

05071002 [Powder & waste of
ivory](http://exim.indiamart.com/freedlist/prohibited-0507.html#002)
([Ivory, tortoise-shell, whalebone and whale-bone hair, horns, antlers,
hooves, nails, claws and beaks, unworked or simply prepared but not cut
to shape; Powder and waste of these
products](http://exim.indiamart.com/freedlist/prohibited-0507.html#002))

0509000010 [Of wild life as specified in Wild Life Protection Act,
1972](http://exim.indiamart.com/freedlist/prohibited-0509.html)
([Natural sponges of animal origin
a](http://exim.indiamart.com/freedlist/prohibited-0509.html))

0510000910 [Of wild animals as specified in Wild Life Protection Act,
1972](http://exim.indiamart.com/freedlist/prohibited-0510.html)
([Ambergris, castoreum, civet and musk; Cantharides; Bile, whether or
not dried; Glands and other animal products used in the preparation of
pharmaceutical products, fresh, chilled, frozen or otherwise
provisionally
preserved](http://exim.indiamart.com/freedlist/prohibited-0510.html) )

0511910110 [Of wild life as specified in Wild Life Protection Act,
1972](http://exim.indiamart.com/freedlist/prohibited-0511.html#110)
([Animal products not elsewhere specified or included; Dead animal of
Chapter 1 or 3, unfit for human
consumption](http://exim.indiamart.com/freedlist/prohibited-0511.html#110))

0511910210 [Of wild life as specified in Wild Life Protection Act,
1972](http://exim.indiamart.com/freedlist/prohibited-0511.html#210)([Animal
products not elsewhere specified or included; Dead animal of Chapter 1
or 3, unfit for human
consumption](http://exim.indiamart.com/freedlist/prohibited-0511.html#210))

0511910410 [Of wild life as specified in Wild Life Protection Act,
1972](http://exim.indiamart.com/freedlist/prohibited-0511.html#410)
([Animal products not elsewhere specified or included; Dead animal of
Chapter 1 or 3, unfit for human
consumption](http://exim.indiamart.com/freedlist/prohibited-0511.html#410))

0511910510 [Of wild life as specified in Wild Life Protection Act,
1972](http://exim.indiamart.com/freedlist/prohibited-0511.html#510)([Animal
products not elsewhere specified or included; Dead animal of Chapter 1
or 3, unfit for human
consumption](http://exim.indiamart.com/freedlist/prohibited-0511.html#510))

0511910910 [Of wild life as specified in Wild Life Protection Act,
1972](http://exim.indiamart.com/freedlist/prohibited-0511.html#9-910)
([Animal products not elsewhere specified or included; Dead animal of
Chapter 1 or 3, unfit for human
consumption](http://exim.indiamart.com/freedlist/prohibited-0511.html#9-910))

0511990210 [Of wild life as specified in Wild Life Protection Act,
1972](http://exim.indiamart.com/freedlist/prohibited-0511.html#9-210)
([Animal products not elsewhere specified or included; Dead animal of
Chapter 1 or 3, unfit for human
consumption](http://exim.indiamart.com/freedlist/prohibited-0511.html#9-210))

0511990920 [Of wild animals as specified in Wild Life Protection Act,
1972](http://exim.indiamart.com/freedlist/prohibited-0511.html#920)
([Animal products not elsewhere specified or included; Dead animal of
Chapter 1 or 3, unfit for human
consumption](http://exim.indiamart.com/freedlist/prohibited-0511.html#920))

15020001 [Mutton
tallow](http://exim.indiamart.com/freedlist/prohibited-1502.html#1501)
([Fats of bovine animals, sheep or goats, other than those of heading
number
15.03)](http://exim.indiamart.com/freedlist/prohibited-1502.html#1501)

15020002 [Fats unrendered (excluding mutton
tallow)](http://exim.indiamart.com/freedlist/prohibited-1502.html#1502)
([Fats of bovine animals, sheep or goats, other than those of heading
number
15.03](http://exim.indiamart.com/freedlist/prohibited-1502.html#1502) )

15020003 [Rendered or solvent extracted
fats](http://exim.indiamart.com/freedlist/prohibited-1502.html#1503)
([Fats of bovine animals, sheep or goats, other than those of heading
number
15.03](http://exim.indiamart.com/freedlist/prohibited-1502.html#1503) )

15030000 [Lard stearin, lard oil, oleostearin, oleo-oil and tallow oil,
not emulsified or mixed or otherwise
prepared](http://exim.indiamart.com/freedlist/prohibited-1503.html)
([Lard stearin, lard oil, oleostearin, oleo-oil and tallow oil, not
emulsified or mixed or otherwise
prepared](http://exim.indiamart.com/freedlist/prohibited-1503.html) )

1504100990
[Other](http://exim.indiamart.com/freedlist/prohibited-1504.html#990)
([Fats and oils and their fractions, of fish or marine mammals, whether
or not refined, but not chemically
modified](http://exim.indiamart.com/freedlist/prohibited-1504.html#990)
)

1504200190
[Other](http://exim.indiamart.com/freedlist/prohibited-1504.html#190)
([Fats and oils and their fractions, of fish or marine mammals, whether
or not refined, but not chemically
modified](http://exim.indiamart.com/freedlist/prohibited-1504.html#190)
)

15042002 [Sperm
oil](http://exim.indiamart.com/freedlist/prohibited-1504.html#002)
([Fats and oils and their fractions, of fish or marine mammals, whether
or not refined, but not chemically
modified](http://exim.indiamart.com/freedlist/prohibited-1504.html#002)
)

1504200990
[Other](http://exim.indiamart.com/freedlist/prohibited-1504.html#9-990)
([Fats and oils and their fractions, of fish or marine mammals, whether
or not refined, but not chemically
modified](http://exim.indiamart.com/freedlist/prohibited-1504.html#9-990)
)

15043000 [Fats and oils and their fractions, of marine
mammals](http://exim.indiamart.com/freedlist/prohibited-1504.html#000)
([Fats and oils and their fractions, of fish or marine mammals, whether
or not refined, but not chemically
modified)](http://exim.indiamart.com/freedlist/prohibited-1504.html#000)

1506000010 [Neats foot oil and fats from bone or
waste](http://exim.indiamart.com/freedlist/prohibited-1506.html#010)
([Other animals fats and oils and their fractions, whether or not
refined, but not chemically
modified](http://exim.indiamart.com/freedlist/prohibited-1506.html#010)
)

1506000090
[Other](http://exim.indiamart.com/freedlist/prohibited-1506.html#090)
([Other animals fats and oils and their fractions, whether or not
refined, but not chemically
modified](http://exim.indiamart.com/freedlist/prohibited-1506.html#090)
)

15161000 [Animal fats and oils and their
fractions](http://exim.indiamart.com/freedlist/prohibited-1516.html#000)
([Animal or vegetable fats and oils and their fractions, partly or
wholly hydrogenated, interesterified, reesterified or elaidinised,
whether or not refined, but not further
prepared](http://exim.indiamart.com/freedlist/prohibited-1516.html#000)
)

1517100010 [Margarine of animal
origin](http://exim.indiamart.com/freedlist/prohibited-1517.html#100010)
([Margarine; Edible mixtures or preparations of animal or vegetable fats
or oils or of fractions of different fats or oils of this Chapter, other
than edible fats or oils or their fractions of heading No
15.16](http://exim.indiamart.com/freedlist/prohibited-1517.html#100010)
)

1517900910 [Imitation lard of animal
origin](http://exim.indiamart.com/freedlist/prohibited-1517.html#900910)
([Margarine; Edible mixtures or preparations of animal or vegetable fats
or oils or of fractions of different fats or oils of this Chapter, other
than edible fats or oils or their fractions of heading No
15.16](http://exim.indiamart.com/freedlist/prohibited-1517.html#900910)
)

15180011 [Animal oils &
fats](http://exim.indiamart.com/freedlist/prohibited-1518.html) ([Animal
or vegetable fats and oils and their fractions, boiled, oxidised,
dehydrated, sulphurised, blown, polymerised by heat in vacuum or in
inert gas or otherwise chemically modified, excluding those of heading
No. 15.16; Inedible mixtures or preparations of animal or vegetable fats
or oils or of fractions of different fats or oils on this Chapter, not
elsewhere specified or
included](http://exim.indiamart.com/freedlist/prohibited-1518.html) )

15220001
[Degras](http://exim.indiamart.com/freedlist/prohibited-1522.html#0001)
([Degras](http://exim.indiamart.com/freedlist/prohibited-1522.html#0001)
)

15220009 [Residues from treatment of fatty substances, animal or
vegetable waxes
(Degras)](http://exim.indiamart.com/freedlist/prohibited-1522.html#0009)

3507100110 [Animal
rennet](http://exim.indiamart.com/freedlist/prohibited-3507.html#100110)
([Enzymes; Prepared enzymes not elsewhere specified or
included](http://exim.indiamart.com/freedlist/prohibited-3507.html#100110)
)

3507100190
[Other](http://exim.indiamart.com/freedlist/prohibited-3507.html#100190)
([Enzymes; Prepared enzymes not elsewhere specified or
included](http://exim.indiamart.com/freedlist/prohibited-3507.html#100190)
)

3507100910 [Animal
rennet](http://exim.indiamart.com/freedlist/prohibited-3507.html#100910)
([Enzymes; Prepared enzymes not elsewhere specified or
included](http://exim.indiamart.com/freedlist/prohibited-3507.html#100910)
)

3507100990
[Other](http://exim.indiamart.com/freedlist/prohibited-3507.html#100990)
([Enzymes; Prepared enzymes not elsewhere specified or
included](http://exim.indiamart.com/freedlist/prohibited-3507.html#100990)
)

43021912 [Tiger-cat
skins](http://exim.indiamart.com/freedlist/prohibited-4302.html)
([Tanned or dressed furskins (including heads, tails, paws and other
pieces or cuttings); unassembled, or assembled (without the addition of
other materials) other than those of heading No.
43.03](http://exim.indiamart.com/freedlist/prohibited-4302.html))

4303100010 [Of Wild animals covered under Wild Life Protection Act,
1972](http://exim.indiamart.com/freedlist/prohibited-4303.html#100010)
([Articles of apparel, clothing accessories and other articles of
furskin](http://exim.indiamart.com/freedlist/prohibited-4303.html#100010))

4303900010 [Of Wild animals covered under Wild Life Protection Act,
1972](http://exim.indiamart.com/freedlist/prohibited-4303.html#900010)
([Articles of apparel, clothing accessories and other articles of
furskin](http://exim.indiamart.com/freedlist/prohibited-4303.html#900010))

96011000 [Worked ivory and articles of
ivory](http://exim.indiamart.com/freedlist/prohibited-9601.html)
([Worked ivory, bone, tortoise-shell, horn, antlers, coral, mother-of
pearl and other animal carving material, and articles of these materials
(including articles obtained by
moulding)](http://exim.indiamart.com/freedlist/prohibited-9601.html) )

## Customs Regulations and Contact Information [**Return to top**](#ch5)

THE FOLLOWING ARE DESIGNATED IMPORT CERTIFICATE ISSUING AUTHORITIES:

-   The Department of Electronics for import of computer and computer
    related systems

-   The [Department of Industrial Policy and
    Promotion](http://dipp.nic.in/) for organized sector firms except
    for import of computers and computer based systems

-   The [Ministry of Defense](http://mod.nic.in/) for defense related
    items

-   The [Director General of Foreign Trade](http://dgft.delhi.nic.in/)\`
    for small-scale industries not covered in the foregoing.

Until March 2001, Special Import Licenses (SIL\'s) were granted to
companies with Export Trading House status based on a percentage of
their FOB export values. These could be traded on the open market and
were fully transferable. SIL\'s were discontinued on March 31, 2001. All
items that were imported under SIL\'s are now importable on surrender of
SIL\'s equivalent to 5 times the CIF value of the imported goods.

Capital goods can be imported with a license under the Export Promotion
Capital Goods plan (EPCG) at reduced rates of duty, subject to the
fulfillment of a time-bound export obligation. The EPGC plan now applies
to all industry sectors. It is also applicable to all capital goods
without any threshold limits, on payment of 5 percent custom duty.

**A duty exemption plan** is also offered under which imports of raw
materials, intermediates, components, consumables, parts, accessories
and packing materials required for direct use in products to be exported
may be permitted free of duty under various categories of licenses. The
actual user, non-transferable advance license is one such license. For
those who do not wish to go through the advance-licensing route,
post-export duty-free replenishment certificate is available.

> **Advance License:** An advance license is issued to allow duty free
> import of inputs, which are physically incorporated in the export
> product (making normal allowance for wastage). In addition, fuel, oil,
> energy, catalysts etc. that are consumed in the course of their use to
> obtain the export product, may also be allowed under the plan. Duty
> free import of mandatory spares up to 10 percent of the CIF value of
> the license, which are required to be exported/ supplied with the
> resultant product, may also be allowed under Advance License. Advance
> License can be issued for:

**Physical exports:** An advance license may be issued for physical
exports to a manufacturer exporter or merchant exporter tied to
supporting manufacturer(s) for import of inputs required for the export
product.

**Intermediate supplies:** An advance license may be issued for
intermediate supply to a manufacturer-exporter for the import of inputs
required in the manufacture of goods to be supplied to the ultimate
exporter/ deemed exporter holding another Advance License.

**Deemed exports:** An advance license can be issued for deemed export
to the main contractor for import of inputs required in the manufacture
of goods to be supplied to the categories mentioned in paragraph 8.2
(b), (c), (d) (e) (f), (g), (i) and (j) of the Policy.

In addition, in respect of supply of goods to specified projects
mentioned in paragraph 8.2 (d) (e) (f), (g) and (j) of the Policy, an
Advance License for deemed export can also be availed by the
sub-contractor of the main contractor to such project provided the name
of the sub contractor(s) appears in the main contract. Such license for
deemed export can also be issued for supplies made to United Nations
Organizations or under the Aid Program of the United Nations or other
multilateral agencies and paid for in foreign exchange.

## Standards [**Return to top**](#ch5)

-   [Overview](#overview-return-to-top-14)

-   [Standards Organizations](#standards-organizations-return-to-top)

-   [Conformity Assessment](#conformity-assessment-return-to-top)

-   [Product Certification](#product-certification-return-to-top)

-   [Accreditation](#accreditation-return-to-top)

-   [Publication of Technical
    Regulations](#publication-of-technical-regulations-return-to-top)

-   [Labeling and Marking](#labeling-and-marking-return-to-top)

-   [Contacts](#contacts-return-to-top)

### Overview [**Return to top**](#standards-return-to-top)

Standards setting as a trend is gaining momentum in India. India
generally has been making efforts to match national standards in line
with international norms, and most Indian standards are harmonized with
ISO standards. Nonetheless, some Indian standards are not matched with
international standards, and several recent standards-related
regulations have created barriers to trade and posed challenges to
expanding U.S. exports in certain sectors. India has also frequently
failed to notify the WTO of new standards and allow time for discussion
with its trading partners prior to implementation.

Because of pressure from consumer rights groups, NGOs, and environmental
activists there is a growing emphasis on product standards in India in
various industry sectors. The proactive role of the judiciary in
formulating legal framework and regulations for better standards and
control in sectors such as the environment has also contributed to the
increasing awareness and emphasis for product standards in general in
India. India food safety laws are outdated or in some cases more
stringent than international norms, but enforcement is weak.

### Standards Organizations [**Return to top**](#standards-return-to-top)

Unlike in the U.S., where voluntary standards are developed in several
organizations and there is no national standards developing body, in
India voluntary standards are developed only by the national standards
body. The Bureau of Indian Standards (BIS, see
[http://www.bis.org.in](http://www.bis.org.in/)), established under the
Bureau of Indian Standards Act of 1986 is the national standards body of
India responsible for development and formulation of standards. BIS's
bureau responsible for formulating the policy guidelines of BIS
comprises of representatives of the industry, consumer organizations,
scientific and research bodies, professional organizations, technical
institutions, Indian government ministries, and members of parliament.

Besides development and formulation of Indian Standards,
[BIS](http://www.bis.org.in/) is involved with product certification,
quality system certifications and testing, and consumer affairs.

[The Ministry of Commerce](http://commin.nic.in/), Government of India
(GOI) has designated [[]{#_Hlk93466008 .anchor}BIS](#_Hlk93466008) as
the National WTO-TBT Enquiry Point in accordance with its obligations to
the agreement on Technical Barriers to Trade of the WTO. According to
the agreement, BIS in liaison with the Indian Ministry of Commerce
issues notifications on proposed technical regulations and certification
systems in India to WTO. BIS's Technical Information Services Center
responds to domestics and foreign requests for information about Indian
standards, technical regulations and conformity assessment rules. U.S.
companies that wish to make comments on any notifications can obtain
copies of the text from BIS from the WTO-TBT Enquiry Point, Technical
Information Services Center, Bureau of Indian Standards, Manak Bhavan, 9
Bahadur Shah Zafar Marg, New Delhi 110 002 (Tel: 91-11-2323 0910/2323
0131; Fax: 91-11-2323 7995; Email: bisinfo@vsnl.com). Comments received
are communicated to the Ministry of Commerce.

[BIS](http://www.bis.org.in/) is the only organization in India, which
is authorized to operate quality certification plans under an Act of
parliament. It serves as the official member and sets policy for Indian
participation in the International Organization for Standardization
(ISO) and International Electro technical Commission (IEC).

#### NIST Notify U.S. Service

Member countries of the World Trade Organization (WTO) are required
under the Agreement on Technical Barriers to Trade (TBT Agreement) to
report to the WTO all proposed technical regulations that could affect
trade with other Member countries. **Notify U.S.** is a free, web-based
e-mail subscription service that offers an opportunity to review and
comment on proposed foreign technical regulations that can affect your
access to international markets. Register online at Internet URL:
[http://www.nist.gov/notifyus/](http://www.nist.gov/notifyus/%0D)

### Conformity Assessment [**Return to top**](#standards-return-to-top)

A list of testing organizations spread through out the country providing
conformity testing against relevant Indian standards are available from
the BIS website at: <http://www.bis.org.in/lab/lab.htm>

In association with technical GOI agencies, NGOs, BIS carries out
periodic surveillance inspections of products under mandatory
certification. Provision exists for sub-contracting certification
surveillance activities to relevant competent agencies in specific
areas. Certain types of steel, rubber, and electronic products are
presently under such surveillance agreements.

### Product Certification [**Return to top**](#standards-return-to-top)

BIS's product standards are basically voluntary in nature, but
subsequent to the removal of quantitative restrictions (QRs) on imports
by India in 2000, the GOI in order to provide protection to domestic
producers in certain sectors promulgated regulations dictating that
imports of 109 products are subject to mandatory compliance with
specified Indian quality standards. For compliance, all
exporters/manufacturers of the 109 products are required to register
with, and obtain certification from the Bureau of Indian Standards
before exporting such goods to India.

The list of 109 products includes various food preservatives and
additives, milk powder, infant milk food, certain kinds of cement,
household and similar electrical appliances, several types of gas
cylinders, and multi-purpose dry batteries. A copy of the list of the
109 products can be made available by [the U.S. & Foreign Commercial
Service](http://www.buyusa.gov/india/en/contact.html) office of the
American Embassy, New Delhi upon request.

These 109 products generally must be tested and certified by
[BIS](http://www.bis.org.in/) in India. BIS now however, also has a
system for foreign companies to receive automatic certification for
products not manufactured in India. The system is based on a
self-certification basis, under which a foreign manufacturer is
permitted to apply the standards mark on the product after ascertaining
its conformity to the Indian Standard licensed for. At the foreign
manufacturer's expense BIS inspectors travel to the manufacture's
country to inspect their production facility to pre-certify the company
and its production system, and then authorizes subsequent monitoring and
compliance by an independent inspector to ensure that the company
maintains the specified standards.

Information on the application procedure for BIS Product Certification
Plan for foreign companies is available through the [BIS
website](http://www.bis.org.in/).

Exporters/manufacturers of these products also are required to maintain
a presence in India. This requirement does not apply if the foreign
manufacturer nominates an authorized representative in India who agrees
to be responsible for compliance with the provisions of BIS on behalf of
the foreign manufacturer as per an agreement signed between the
manufacturer and BIS. Under separate arrangements some products have
been placed under special certification plans of lot or batch
inspections carried out by BIS inspecting officers. A majority of gas
cylinders, deep well hand pumps and valves are certified through such
plans.

India generally has been making efforts to match national standards in
line with international standards. In sectors where differences exist,
India is trying to match national standards with international norms. To
facilitate international trade and cooperation, India also has plans
towards harmonizing its standards with other countries, primarily with
its main trading partners. A serious effort is being made by BIS to have
mutual recognition of standards with various countries so that other
countries provide recognition of the Indian standards on certain
products and vice versa. The BIS has expressed interest in having mutual
recognition agreements with U.S. organizations.

### Accreditation [**Return to top**](#standards-return-to-top)

The National Accreditation Board for Testing and Calibration
Laboratories (NABL) established in 1985 as an autonomous body under the
Department of Science & Technology is authorized by the GOI as the sole
accreditation body for testing and calibration laboratories. More than
200 testing and calibration laboratories have been accredited till date.
A list of accredited laboratories is available from NABL's website at:
[http://www.nabl-india.org](http://www.nabl-india.org/)

For international mutual acceptance of test results in order to be
compliant with the WTO/Technical Barriers to Trade (TBT) regulations,
NABL is a member of international organizations such as **International
Laboratory Accreditation Co-operation (ILAC) and Asia Pacific Laboratory
Accreditation Co-operation (APLAC)**. NABL is a signatory to ILAC as
well as APLAC Mutual Recognition Arrangements (MRA)**,** based on mutual
evaluation and acceptance of other MRA Partner laboratory accreditation
systems.

More and more Indian manufacturing companies are investing in standards
accreditation. The number of plants in India with ISO 9000 and ISO 14000
accreditation increased from a negligible figure in the early nineties
to more than 8000 in 2003. Five Indian companies have won the Deming
prize for total quality management in FY 2002-03, while eight more are
preparing for the honours this year. 18 manufacturing plants of 10
Indian companies have been recognised by the Japanese Institute of Plant
Management for excelling in total productive management in 2003.

### Publication of Technical Regulations [**Return to top**](#standards-return-to-top)

Electronic version of Indian Standards is now available on CD-ROM with
the Bureau of Indian Standards. Further information is available at
<http://www.bis.org.in/other/iscd.htm>

The Ministry of Commerce, Government of India (GOI) has designated BIS
as the National WTO-TBT Enquiry Point in accordance with its obligations
to the agreement on Technical Barriers to Trade of the WTO. According to
the agreement, BIS in liaison with the Indian Ministry of Commerce
issues notifications on proposed technical regulations and certification
systems in India to WTO. BIS's Technical Information Services Center
responds to domestics and foreign requests for information about Indian
standards, technical regulations and conformity assessment rules. U.S.
companies that wish to make comments on any notifications can obtain
copies of the text from BIS from the WTO-TBT Enquiry Point, Technical
Information Services Center, Bureau of Indian Standards, Manak Bhavan, 9
Bahadur Shah Zafar Marg, New Delhi 110 002 (Tel: 91-11-2323 0910/2323
0131; Fax: 91-11-2323 7995; Email: <bisinfo@vsnl.com>).

Comments received are communicated to the Ministry of Commerce.

### Labeling and Marking [**Return to top**](#standards-return-to-top)

As per a Notification issued by the Ministry of Commerce on November 24,
2000, all pre-packaged commodities (intended for direct retail sale)
imported into India must carry the following declarations on the label:

-   Name and address of the importer

-   Generic or common name of the commodity packed

-   Net quantity in terms of standard unit of weights and measures. All
    units of weight or measure are to be reported in metric. If the net
    quantity of the imported package is given in any other unit, its
    equivalent of standard units shall have to be declared by the
    importer

-   Month and year of packing in which the commodity is manufactured,
    packed or imported, and

-   The maximum retail sales price (MRP) at which the commodity in
    packaged form may be sold to the end consumer. The MRP includes all
    taxes, freight transport charges, commission payable to dealers, and
    all charges towards advertising, delivery, packing, forwarding and
    the like.

Compliance of the above-stated requirements has to be ensured before the
import consignments are cleared by Customs in India. Import of
pre-packaged commodities such as raw materials, components, bulk import
etc., that need to undergo further processing before they are sold to
end consumers are not included under this labeling requirement.

All declarations may be:

-   Printed in English or Hindi on a label securely affixed to the
    package, or

-   Made on an additional wrapper containing the imported package, or

-   Printed on the package itself, or

-   May be made on a card or tape affixed firmly to the package and
    bearing the required information prior to customs clearance

Products displaying only the standard U.S. label cannot enter. As
regards the shelf life of imported food items, a Notification issued by
the Ministry of Commerce on July 30, 2001, requires that: "Imports of
all food products, domestic sale and manufacture of which are governed
by the Prevention of Food Adulteration Act (PFA) shall also be subject
to the condition that, at the time of importation, these products are
having a valid shelf life of not less than 60 percent of its original
shelf life. Shelf life of the product is to be calculated, based on the
declaration given on the label of the product, regarding the date of
manufacture and the due date of expiry".

### Contacts [**Return to top**](#standards-return-to-top)

[Bureau of Indian Standards](http://www.bis.org.in/)

Manak Bhavan, 9 Bahadur Shah Zafar Marg\
New Delhi 110 002, India\
Tel : 91-11-2323 0131, 2323 3375, 2323 9402 (10 lines)\
Fax : 91-11-2323 4062, 2323 9399, 2323 9382\
Email : [info@bis.org.in[\
]{.underline}](mailto:info@bis.org.in)Web:
[http://www.bis.org.in](http://www.bis.org.in/)

[NABL](http://www.nabl-india.org/)

Department of Science and Technology\
Technology Bhawan, New Mehrauli Road\
New Delhi -- 110 016\
Tel no.: 91-11-2686 4642 / 2685 7661\
Fax no.: 91-11-2686 4642 / 686 3866\
E-mail : <akc@alpha.nic.in>

[Director General of Foreign Trade](http://dgft.delhi.nic.in/)

Ministry of Commerce & Industries

Udyog Bhawan, New Delhi 110 011

Tel: 91-11-2301 1777

Fax: 91-11-2301 8613

[Department of Consumer Affairs](http://fcamin.nic.in/wm_ind.htm)

Office of the Additional Secretary (Weights & Measures)

Krishi Bhawan, New Delhi 110 001

Tel: 91-11-2338 3027

Fax: 91-11-2338 6575

## Trade Agreements [**Return to top**](#ch5)

The preferential arrangement/plans under which India is receiving tariff
preferences are Generalized System of Preferences (GSP) and Global
System Of Trade Preferences (GSTP). Presently, there are 46 member
countries of GSTP and India has exchanged tariff concessions with 12
countries on a limited number of products.

Other such preferential arrangement includes SAARC Preferential Trading
Agreement (SAPTA), Bangkok Agreement and India--Sri Lanka Free Trade
Agreement (ISLFTA). These arrangements/ agreements prescribe Rules of
Origin that have to be fulfilled for the exports to be eligible for the
tariff preference.

The Indian Ministry of Commerce has projected recently that 60 percent
of India\'s future trade would be accounted for by free trade agreements
(FTAs), and with such countries as Paraguay, Argentina, Brazil, Pakistan
and even China. Indian government is in talks with the Mercusor (a trade
association comprising Argentina, Brazil, Chile, Paraguay and Uruguay)
and SACU (South African Customs Union) and looking to increase bilateral
engagements with more countries.

In a major policy shift, the government has decided to convert all
Preferential/Free Trade Agreements (PFA/FTA) into Comprehensive Economic
Cooperation Agreements (CECA). This goes beyond the Indian government's
bid in recent months to embrace bilateralism aggressively.

The decision seems to be aimed at mollifying the World Trade
Organization (WTO), which cautioned India against going the whole hog
with PFAs/FTAs.

PTAs/FTAs usually involve structured reduction in tariffs between two
countries. CECAs would cover preferential relaxation of FDI rules
vis-à-vis the partner country, tax holidays on investment and income,
easing of visa restrictions etc. Trade in services too would come under
the purview of CECA.

The proposed free trade agreements (FTAs) with Thailand, Mercosur and
Asean would now be made CECAs. This has already been done with Sri
Lanka. The preferential trade agreement (PTA) with the South Africa
Customs Union (SACU) would be merged with new CECA with South Africa.
The Minister added that efforts were on to convert the SAARC
Preferential Trade Area into a full-fledged FTA to be called SAFTA. This
came into effect in January 2006.

Other proposed alliances with Russia, China and Israel would also be
CECAs, rather than mere FTAs. The proposed agreement with the Gulf
Cooperation Council (GCC) is envisaged to be a CECA. So is the
India-Singapore agreement.

The Indian government has also nominated certain authorized agencies to
issue Non Preferential Certificate of Origin in accordance with Article
II of International Convention Relating to Simplification of Customs
formalities, 1923. These Certificates of Origin evidence the origin of
goods and do not bestow any right to preferential tariffs.

India and the U.S. are not part of any specific free trade conglomerate
of nations, and this, experts feel, is an imperative to bolster both
trade and partnership between the two countries.

## Web Resources [**Return to top**](#ch5)

**Trade regulations:**

Import tariffs

<http://dgft.delhi.nic.in/>

<http://dgftcom.nic.in/exim/2000/policy/contents.htm>

<http://www.dgciskol.nic.in/>

<http://dgft.delhi.nic.in/>

<http://www.cbec.gov.in/>

Trade barriers

<http://www.ustr.gov/assets/Document_Library/Reports_Publications/2004/2004_National_Trade_Estimate/2004_NTE_Report/asset_upload_file973_4773.pdf>

<http://mkaccdb.eu.int/cgi-bin/stb/mkstb.pl>

<http://commerce.nic.in/medium_term/contents.htm>

<http://www.ustr.gov/>

Import requirements and documentation

<http://www.cbec.gov.in/cae/customs/cs-manual/manual_idx.htm>

<http://www.cbec.gov.in/cae/customs/cs-act/cs-regu-mainpg.htm>

[http://dgftcom.nic.in](http://dgftcom.nic.in/)

<http://dipp.nic.in/>

US export controls

<http://www.bis.doc.gov/>

<http://www.access.gpo.gov/bis/ear/ear_data.html>

<http://www.bxa.doc.gov/policiesandregulations/index.htm#ear>

<http://www.cbp.gov/>

Temporary entry

<http://dgftcom.nic.in/exim/2000/policy/chap-02.htm>

<http://www.buyusa.gov/india/en/83.html>

Labeling and marking requirements

<http://www.bis.org.in/cert/man.htm>

<http://www.bis.org.in/cert/prooth.htm>

[Prohibited and Restricted
Imports](#prohibited-and-restricted-imports-return-to-top)

<http://commerce.nic.in/qr/default.asp>

Customs regulations and contract information

<http://www.cbec.gov.in/cae/customs/cs-act/cs-rules-mainpg.htm>

<http://www.cbec.gov.in/cae/customs/cs-act/cs-regu-mainpg.htm>

<http://www.cbec.gov.in/cae/customs/cs-tariff-main.htm>

<http://www.cbec.gov.in/cae/helpmail.htm>

**Standards:**

Overview

<http://www.bis.org.in/bs/index.htm>

<http://www.bis.org.in/org/obj.htm>

Standards Organizations

<http://www.bis.org.in/sf/powork.htm>

Conformity Assessment

<http://www.bis.org.in/lab/lab.htm>

<http://www.bis.org.in/sf/nrstd.htm>

Product Certification

<http://www.bis.org.in/cert/fm.htm>

<http://www.bis.org.in/cert/procert.htm>

<http://www.bis.org.in/sf/nrstd.htm>

Accreditation

[http://www.nabl-india.org](http://www.nabl-india.org/)

[Publication of Technical
Regulations](#publication-of-technical-regulations-return-to-top)

<http://www.bis.org.in/other/iscd.htm>

Labeling and Marking

<http://www.bis.org.in/cert/man.htm>

<http://www.bis.org.in/cert/prooth.htm>

Trade agreements

<http://commerce.nic.in/>

<http://commerce.nic.in/india_rta_main.htm>

[Return to table of
contents](#doing-business-in-india-a-country-commercial-guide-for-u.s.-companies)

[[]{#ch6 .anchor}Return to table of
contents](#doing-business-in-india-a-country-commercial-guide-for-u.s.-companies)

# Chapter 6: Investment Climate

-   [Openness to Foreign
    Investment](#openness-to-foreign-investment-return-to-top)

-   [Conversion and Transfer Policies](#thirtytwo)

-   [Expropriation and
    Compensation](#expropriation-and-compensation-return-to-top)

-   [Dispute Settlement](#dispute-settlement-return-to-top)

-   [Performance Requirements and
    Incentives](#performance-requirements-and-incentives-return-to-top)

-   [Right to Private Ownership and
    Establishment](#right-to-private-ownership-and-establishment-return-to-top)

-   [Protection of Property
    Rights](#protection-of-property-rights-return-to-top)

-   [Transparency of Regulatory
    System](#transparency-of-regulatory-system-return-to-top)

-   [Efficient Capital Markets and Portfolio
    Investment](#efficient-capital-markets-and-portfolio-investment-return-to-top)

-   [Political Violence](#political-violence-return-to-top)

-   [Corruption](#corruption-return-to-top)

-   [Bilateral Investment
    Agreements](#bilateral-investment-agreements-return-to-top)

-   [OPIC and Other Investment Insurance
    Programs](#opic-and-other-investment-insurance-programs-return-to-top)

-   [Labor](#labor-return-to-top)

-   [Foreign-Trade Zones/Free
    Ports](#foreign-trade-zonesfree-ports-return-to-top)

-   [Foreign Direct Investment
    Statistics](#foreign-direct-investment-statistics-return-to-top)

-   [Web Resources](#web-resources-return-to-top-2)

## Openness to Foreign Investment [**Return to top**](#ch6)

India controls foreign investment with limits on equity and voting
rights, mandatory government approvals, and capital controls. Since
1991, as it has slowly implemented a program of economic reform, the GOI
has gradually relaxed many of these constraints. Nonetheless, a complex
array of restrictions remains, along with an undercurrent of hostility
towards foreign investment from some quarters. Foreign direct investment
(FDI) is still prohibited in some sectors or sub-sectors.

**FDI:** Since the mid 1990s, India has allowed \"automatic\" FDI
approvals in many sectors, gradually expanding the list over time. Where
applicable, foreign investors do not need government licenses or
approvals and simply notify the Reserve Bank of India (RBI) of their
investments. Other sectors require approval by either the Foreign
Investment Promotion Board (FIPB) or the Cabinet Committee on Foreign
Investment. The rules vary from industry to industry and are frequently
changed.

Although the changes have tended toward greater liberalization, the
investment process is not always transparent or straightforward. In
January 2005, for example, the GOI relaxed restrictions on new FDI in
India by foreign partners of joint ventures. The previous rules, issued
in Press Note 18 in 1998, had required a release by the Indian partner
and GOI approval for any new investment, a provision often subject to
abuse. The new rules maintain restrictions on the majority of existing
joint ventures, but leave new ones to negotiate their own terms on a
commercial basis. A local firm\'s ability to restrict its foreign
partner\'s business strategy has been reduced, but the way out of a
current joint venture remains uncertain.

**Equity caps:** Equity caps for foreign portfolio investment are
sometimes included in FDI caps. There are no set rules specifying the
combination of FDI and foreign portfolio investment allowed in share
holding of a particular company. In some cases, the portfolio investment
is included within the FDI cap; in others, foreign portfolio investment
is not subject to the FDI cap.

**Voting Rights:** A recent amendment to the Companies Act denies voting
rights to foreign investors holding preferred stock in Indian companies
if their holdings exceed the FDI limit. This means that if the foreign
equity participation is at the maximum permissible level in a company,
the preference shareholder will not have any voting rights.

**Prohibitions on FDI:** Foreign investment is prohibited in real estate
(with limited exceptions), retailing, legal services, agriculture and
plantations (except tea), security services, and railways. Non-Resident
Indians (NRIs), however, are allowed to invest in housing and real
estate development. They are also allowed to hold up to 100 percent
equity in civil aviation companies, where foreign equity is otherwise
limited to 49 percent. In January 2005 the Prime Minister announced that
NRI\'s would be allowed to claim dual citizenship, a change which would
enable NRI\'s new investment opportunities in India as citizens. Capital
outflow restrictions for India citizens, however, remain in place.

**NRI Overseas Corporate Bodies Restrictions:** To curb the flow of
funds by Indian residents through their NRI counterparts overseas, the
Indian government in 2003 banned all investments by Overseas Corporate
Bodies (OCBs \-- a company or other entity owned by NRIs directly or
indirectly to the extent of at least 60 percent) in Indian companies
through the portfolio as well as FDI routes. The GOI also withdrew the
facility of opening and maintaining new Non-Resident External accounts,
foreign currency non-resident accounts and non-resident ordinary
accounts in India by OCBs. A ban on OCB investment in the stock market
under the portfolio investment plan remains in place.

**Privatization:** The GOI's privatization policy permits foreign
investors to bid for the sale of the state-owned units. Its
privatization program, however, stalled after a change in government in
May 2004. Foreign investors are given national treatment at the time of
initial investment or after the investment are made. In sectors where
licensing is required, procedures do not discriminate against foreign
companies. However, in certain consumer goods industries export
obligations and local content requirements are imposed on foreign
investors.

Existing companies can also use automatic FDI approval to obtain foreign
equity for FDI/NRI investment, provided the sector falls under the
\"automatic\" route. Requirements are (i) the equity increase must
accompany an expansion of the company\'s equity base (i.e., the
NRI/foreign investors cannot simply acquire existing shares); (ii) the
investment must involve a foreign currency remittance; and (iii) the
Indian company\'s Board of Directors must give its approval.

**SECTOR-SPECIFIC GUIDELINES FOR FDI IN KEY INDUSTRIES (alphabetical
order):**

**\-- Advertising and Films:** 100 percent FDI with automatic approval
is allowed, but certain conditions apply in film industry.

**\-- Agriculture:** No FDI is permitted in farming, nor may foreigners
or OCBs own farmland. FDI in the seed industry is permitted without any
limits. FDI up to 100 percent is also permitted in tea plantations, but
proposals require prior government approval. There is compulsory
divestment of 26 percent equity of the company in favor of an Indian
partner or the Indian public within five years.

**\-- Airport Infrastructure:** FDI is allowed up to 74 percent. That
limit was reduced to 49 percent, however, for privatization of the Delhi
and Mumbai airports; the state-owned Airport Authority of India will
hold 26 percent equity, while the remaining 25 percent equity is
reserved for Indian private investors. To participate in a ground
handling business at the airports, foreign companies can form joint
ventures with the three state-owned companies, but their holding is
limited to a 49 percent (i.e., minority) share and subject to government
approval.

**\-- Alcoholic beverages:** No FDI limit is applicable but prior
government approval is required.

**\-- Atomic energy:** FDI is limited to 74 percent for mining and
mineral separation, integration, and value addition in mining and
mineral separation. FDI beyond 74 percent is approved on a case-to-case
basis. There are no automatic approvals.

**\-- Automobiles:** In 2002, the GOI abolished FDI caps as well as
local content requirements and export obligations. FDI of 100 percent is
allowed with automatic approval.

**\-- Banking:** The GOI increased the FDI limit for private banks to 74
percent in 2005. For state-owned banks the FDI limit remains at 20
percent. The 74 percent cap includes all foreign portfolio investments.
At all times, at least 26 percent of the paid up capital must be held by
residents. Wholly-owned subsidiaries of foreign banks are exempt from
this requirement. The Foreign Institutional Investment (FII) limit
remains at 49 percent. Foreign banks in India have the option to operate
as branches of their parent banks or as subsidiaries. Shareholders of
banking companies may exercise their voting rights to a maximum of 10
percent.

**\-- Broadcasting:** FDI (including the NRI and portfolio investments)
is limited to 20 percent in FM terrestrial broadcasting, with prior
government approval, subject to certain conditions. For direct-to-home
broadcasting and up-linking hubs, foreign investment from all sources is
limited to 49 percent (with a maximum FDI component of 20 percent),
again with prior government approval. In satellite broadcasting, FDI is
also limited to 49 percent with prior government approvals. TV channels,
irrespective of the ownership or management control, have to up-link
from India provided they comply with the broadcast code. FDI is limited
to 26 percent (including portfolio investment) in news channels
up-linking from India. Entertainment channels face no FDI limit. Under
the revised Up-linking policy announced by the GOI in December 2005 FDI
up to 49 percent will be permitted with prior approval of the Government
for setting up Up-linking HUB/Teleports. The GOI has recently formulated
policy for down-linking for all satellite TV channels
down-linked/received/transmitted in India, according to which
registration with the GOI ministry of information and broadcasting is
mandatory for a channel to down-link.

**\-- Cable Network:** FDI is limited to 49 percent (inclusive of both
FDI and portfolio).

**\-- Cigars/cigarettes of tobacco:** There is no FDI limit but prior
government approval is required.

**\-- Civil Aviation (domestic airlines): In** November 2004, the GOI
increased the FDI limit to 49 percent (from 40 percent) and permitted
\"automatic route\" investment. No foreign airline, however, may make
either a direct or indirect investment in an Indian domestic airline.
Nonetheless, a US-India \"Open Skies\" agreement signed in April 2005
provides other means for U.S. carriers to enter the Indian market. NRIs
and domestic companies may own 100 percent of a domestic airline.
Although frequently debated, India has yet to open its state-run
international airlines to outside investment.

**\-- Coal/Lignite:** FDI is allowed up to 100 percent in coal
processing plant/power projects, but limited to 74 percent for
exploration and mining for captive consumption. Proposals for up to 50
percent FDI in private sector companies are approved automatically. FDI
is limited to 49 percent in state-owned units.

**\-- Construction:** Construction and maintenance of roads, highways,
vehicular bridges, tunnels, ports and harbors is allowed at 100 percent
FDI, with automatic approval, up to a ceiling of \$345 million. FDI is
limited to 74 percent with automatic approval for construction and
maintenance of waterways, rail beds, hydroelectric projects, power
plants and industrial plants. FDI is not allowed in housing or office
construction.

**\-- Defense and strategic industries:** FDI is limited to 26 percent,
subject to a license from the Defense Ministry. There are no automatic
approvals.

**\-- Drugs/Pharmaceuticals:** FDI is allowed up to 100 percent for drug
manufacturing. Automatic approval is permitted at all levels of FDI.

**\-- E-commerce:** FDI up to 100 percent is allowed in
business-to-business e-commerce with the condition that foreign
investors divest at least 26 percent to the Indian public within 5
years. FDI is limited to 49 percent under the automatic approval route.
No FDI is allowed in retail e-commerce.

**\-- Food Processing:** FDI is limited to 51 percent with automatic
approval for most products with the exception of malted foods, alcoholic
beverages including beer, and in a protected category reserved for
\"small scale industries\" where foreign equity ownership up to 24
percent is allowed. Higher FDI is allowed on case-to-case basis on prior
approval basis. However, 100 percent FDI is allowed with automatic
approval to NRI. FDI up to 74 percent is allowed with automatic approval
for cold storage facilities.

**\-- Health and Education Services:** FDI is limited to 51 percent with
automatic approval. Higher equity proposals need FIPB approval.

**\-- Hotels, Tourism and Restaurants:** FDI at 100 percent is allowed
with automatic approval.

**\-- Housing/Real Estate:** No FDI is permitted in the retail housing
sector. NRIs, however, may invest up to 100 percent. FDI up to 100
percent, on prior government approval, is permitted for projects such as
the manufacture of building materials and the development of integrated
townships, including housing, commercial premises, resorts, and hotels.

**\-- Information Technology:** FDI at 100 percent is allowed with
automatic approval in software and electronics, except in the aerospace
and defense sectors.

**\-- Insurance:** FDI is limited to 26 percent in the insurance and
insurance brokering. While FDI approval is automatic, a license must
first be obtained from the Insurance Regulatory and Development
Authority. In July 2004, the GOI announced its intention to increase the
FDI cap to 49 percent, but this change first requires parliamentary
approval of an amendment to the Insurance Regulatory and Development
Authority Act.

**\-- Legal services:** No FDI is allowed.

**\-- Lottery, Gambling, Betting:** No FDI in any form is allowed.

**\-- Manufacturing:** FDI at 100 percent FDI is allowed, with automatic
approval, in the manufacture of textiles, paper, basic chemicals,
rubber, plastic, non-metallic mineral products, metal products, ship
building, machinery and equipment. FDI is limited to 24 percent in a
protected category reserved for \"small scale industries\" (SSI). The
SSI reservation applies to 550 goods or services and enterprises with a
capital investment of less than \$206,000. Higher percentages of foreign
equity may be approved if the company obtains a license and undertakes
to export 50 percent or more of its product.

**\-- Mining:** FDI is limited to 74 percent, with automatic approval,
for diamond and precious stone mining. FDI at 100 percent, with
automatic approval, is allowed for exploration and mining metallurgy,
and processing of gold, silver, and other minerals.

**\-- Non-Banking Financial Companies:** (Merchant banking,
underwriting, portfolio management, financial consulting,
stock-brokerage, asset management, venture capital, credit rating,
housing finance, leasing & finance, credit card business, foreign
exchange brokerage, factoring and custodial services, investment
advisory services): FDI is allowed up to 100 percent with automatic
approval. Capital norms are as follows: if FDI is less than 51 percent,
\$500,000 needs to be provided up front; if FDI is between 51 percent
and 75 percent, \$5 million must be invested up front; and if FDI
exceeds 75 percent, \$50 million is needed, out of which \$7.5 million
must be fronted and the balance invested in two years. Approvals may not
be used to undertake holding company operations pertaining to downstream
investments.

**\-- Petroleum:** FDI limits (along with tax incentives, production
sharing and other terms and conditions) vary according to the
sub-sector. Foreign Investment Promotion Board (FIPB) approval is
required for all activities other than private sector oil refining.

\- Discovered small fields 100 percent

\- Unincorporated joint venture 60 percent

\- Incorporated joint venture 51 percent

\- Refining with domestic private 100 percent

\- Refining with public company 26 percent

\- Petroleum product/pipeline (auto-approval) 100 percent

\- Marketing and marketing infrastructure (auto-approval) 100 percent

\- LNG Pipeline (auto-approval) 100 percent

\- Exploration (auto-approval) 100 percent

**\-- Pollution Control:** FDI up to 100 percent is allowed with
automatic approval for equipment manufacture and for consulting and
management services.

**\-- Ports and harbors:** FDI up to 100 percent with automatic approval
is allowed in construction and manufacturing of ports and harbors.

**\-- Postal/courier services:** FDI up to 100 percent is permitted in
courier services, subject to prior government approval. FDI in letter
delivery is not allowed.

**\-- Power:** FDI up to 100 percent is permitted with automatic
approval in projects relating to electricity generation, transmission
and distribution, other than atomic reactor power plants.

**\-- Print Media:** Foreign investment is restricted to 26 percent for
news publications with editorial/management control in the hands of
resident Indians. 74 percent cap is applied to non-news publications.
FDI is permitted up to 100 percent in printing science and technology
magazines/journals, subject to prior government approval.

**\-- Professional services:** FDI is limited to 51 percent in most
consulting and professional services, with automatic approval. Legal
services, however, are not open to foreign investment.

**\-- Railways:** FDI is not allowed.

**\-- Retailing:** FDI is not allowed.

**\-- Roads, Highways, and Mass Rapid Transport Systems:** FDI up to 100
percent is allowed with automatic approval for construction and
maintenance.

**\-- Satellites:** FDI is limited to 49 percent for the establishment
and operation of satellites.

**\-- Shipping:** FDI is limited to 74 percent with automatic approval
for water transport services.

**\-- Telecommunications:** FDI limits are listed below. The FDI can be
made directly or indirectly in the operating company or through a
holding company subject to licensing and security requirements.

\- National and International (license required) 74 percent

\- Long Distance 74 percent

\- Equipment manufacturing 100 percent

\- Global Mobile Communication 74 percent

\- Radio paging, Internet Service Providers (ISP) with int\'l gateways

and End-to-End Bandwidth (above 49 requires GOI approval) 74 percent

\- ISP without int\'l gateways, voice-mail and e-mail (above 49

requires GOI approval, 25 percent divestment within five years) 100
percent

**\-- Trading:** FDI is not allowed in the retail business.

For the export sector, FDI is allowed up to 51 percent with automatic
approval. FDI at 100 percent is allowed, subject to FIPB approval, for
activities like bulk imports with export warehouse sales, as well as
cash and carry wholesale trading.

**\-- Venture Capital:** FDI is allowed up to 100 percent in venture
capital funds (VCF) and venture capital companies (VCC) through the
automatic route, subject to Securities and Exchange Board of India
(SEBI) regulations and sector specific FDI limits. VCFs and VCCs may own
up to 40 percent of unlisted Indian companies. Investment in a single
company by a VCF or VCC may not exceed five percent of the paid up
corpus of a domestic VCF or VCC.

## Conversion and Transfer Policies [**Return to top**](#ch6)

There are no restrictions on remittances for debt service or payments
for imported inputs. In some sectors, like investments in the
development of integrated townships and NRI investment in real estate,
may be subject to a \"lock-in\" period. Profits and dividend remittances
are permitted without approval from the [Reserve Bank of
India](http://www.rbi.org.in/) (RBI). Income tax payment clearance is
required, but there are generally no delays beyond 60 days. RBI approval
is required to remit funds from asset liquidation. Foreign partners may
sell their shares to resident Indian investors without approval of RBI,
provided shares were held on a repatriation basis. GDR/ADR proceeds from
abroad may be retained without restrictions except for an end-use ban on
investment in real estate and stock markets. FIPB approval is required
for converting non-repatriable shares to repatriable ones. Up to \$1
million may be remitted for transfer of assets into India. Individual
professionals including journalists and lawyers are allowed to keep

100 percent of their earnings from consultancy services rendered abroad
in foreign currency accounts.

The Indian rupee is fully convertible for current account transactions.
Current account transactions are regulated under the Foreign Exchange
Management Rules, 2000. Prior RBI approval is required for acquiring
foreign currency above certain limits for specific purposes (foreign
travel, consulting services, foreign studies). Capital account
transactions are open for foreign investors, subject to various
clearances. Since 2004, with growing foreign exchange reserves, the
Indian government has taken additional steps to relax foreign exchange
and capital account controls for Indian companies and individuals. For
example, individuals are now permitted to transfer abroad for any
purpose up to \$25,000 without approval. The GOI now allows all NRI
proposals for conversion of non-patriable equity into repatriable equity
under the automatic approval route. At the end of 2005, the exchange
rate was Rs.44.60 to \$1, compared to Rs.43.58 at the end of 2004.

Foreign Institutional Investors (FIIs) may transfer funds from rupee to
foreign currency accounts and vice versa at the market exchange rate.
They may also repatriate capital, capital gains, dividends, interest
income, and any compensation from the sale of rights offerings, net of
all taxes without approval.

The RBI accords automatic approval to Indian industries for foreign
collaboration agreements but caps lump-sum payments at \$2 million. For
technology-transfer agreements with foreign companies, Indian firms may
remit royalties up to 5 percent for domestic sales and 8 percent for
exports without approval; but recurring royalty payments, such as patent
licensing, are normally limited to eight percent of the selling price
over a ten-year period. Royalties and lump sum payments are taxed at 20
to 30 percent. Where technology transfer is not involved, royalty
payments for the use of trademarks and brand names are limited to 2
percent on exports and 1 percent on domestic sales. In case of
technology transfer, payment of royalty includes the payment of royalty
for use of trademark and brand name of the foreign collaborator.

Foreign banks may remit profits and surpluses to their headquarters,
subject to the banks compliance with the Banking Regulation Act, 1949.
Banks may also issue credit cards without RBI approval. Banks are
permitted to offer foreign currency-rupee swaps without any limits to
enable customers to hedge their foreign currency liabilities. They may
also offer forward cover to non-resident entities on FDI deployed after
1993.

## Expropriation and Compensation [**Return to top**](#ch6)

There have been few instances of direct expropriation since the 1970s.
While a program of privatization of state-owned enterprises stalled
since 2004 with a change in the ruling government, there has been no
reversal in the overall movement away from public ownership of industry.

In 2004, the U.S. Overseas Private Investment Corporation (OPIC) filed
for arbitration in a claim for repayment by the Government of India due
to expropriation. This resulted from OPIC having to pay out over \$130
million to U.S firms who successfully established before an independent
U.S. arbiter that GOI actions derailed the Dabhol power project and
amounted to expropriation. The dispute was finally settled among OPIC,
the Indian lenders, and offshore lenders in July 2005. Several other
U.S. companies with investments in India's power sector are involved in
contractual disputes with various State governments or local electricity
boards. Most of these disputes are close to being resolved.

At least two U.S. pharmaceutical companies with production and
distribution facilities in India have yet to resolve long-standing
disputes with the GOI (dating from the 1980s) resulting from India\'s
drug price-control regime.

## Dispute Settlement [**Return to top**](#ch6)

Foreign investors frequently complain about a lack of \"sanctity of
contracts.\" Although Indian courts are independent, they are backlogged
with unsettled dispute cases. Critics say that liquidating a bankrupt
company may take as long as 20 years. In an attempt to unify its
adjudication of disputes over commercial contracts with the rest of the
world, India enacted the Arbitration and Conciliation Act of 1996, based
on the UNCITRAL (United Nations Commission on International Trade Law)
Model Law. Foreign awards are enforceable under multilateral conventions
like the Geneva Convention. The International Center for Alternative
Dispute Resolution (ICADR, see
[http://www.icadr.org](http://www.icadr.org/)) has been established as
an autonomous organization under the Ministry of Law and Justice and
Company Affairs to promote settlement of domestic and international
disputes through different modes of alternate dispute resolution. India
is not a member of the International Center for the Settlement of
Investment Disputes, but is a member of the New York Convention of 1958.

## Performance Requirements and Incentives [**Return to top**](#ch6)

Local sourcing is generally not required, but has been mandated for
certain sectors in the past. In some consumer goods industries, the GOI
requires the foreign party to ensure that the inflow of foreign exchange
and foreign equity covers the foreign exchange requirement for imported
goods. In 2002, the GOI removed measures previously requiring local
content and foreign exchange balancing in automobile industry.

**Plant Location:** Industrial undertakings are free to select the
location of a project; in cities with a population of more than a
million, the proposed location should be at least 25 kilometers away
from the Standard Urban Area limits of that city. Electronics, computer,
and printing as well as other non-polluting industries are exempt from
such location restrictions. Environmental regulations and local
government zoning policies can delay projects.

**Employment:** There is no requirement to employ Indian nationals.
Restrictions on employing foreign technicians and managers have been
eliminated, though companies complain that hiring and compensating
expatriates is time-consuming and expensive. The RBI has raised the
remittable per-diem rate from \$500 to \$1000, with an annual ceiling of
\$200,000 for services provided by foreign workers payable to a foreign
firm. Employment of foreigners in excess of 12 months requires approval
from the Ministry of Home Affairs.

**Taxes:** The GOI provides a 10-year tax holiday for knowledge-based
start-ups. Most state governments also offer fiscal concessions. Large
state and central government fiscal deficits, along with attempts to
reform both the direct and indirect tax regimes throughout Indian, have
increased uncertainty over tax liability for investors. The general
trend, however, has been toward simplification of the tax code, a
reduction in tax rates and exceptions, and greater transparency in tax
administration.

The Foreign Trade Policy introduced in 2005 continued tax-relief
incentives for export-oriented industries and other targeted sectors.
For example, the policy allows exporting firms duty-free import of
inputs and capital goods, exemption from excise taxes on capital goods,
textile machinery, components and raw materials, as well as exemption on
sales tax at the federal and state level. Import of consumables,
professional equipment, and spare parts in the service sector are
allowed duty-free up to 10 percent of the average foreign exchange
export earnings in the preceding three years. Tax holidays are available
in the form of deductions for priority sectors. Deduction of 100 percent
of the profits from business for a period of 10 years is available for
infrastructure industries. Income by way of dividend, interest or long
term capital gains in respect of infrastructure capital company is 100
percent tax exempt.

## Right to Private Ownership and Establishment [**Return to top**](#ch6)

Subject to certain sector-specific restrictions, foreign and domestic
private entities may establish and own businesses in trading companies,
subsidiaries, joint ventures, branch offices, project offices and
liaison offices. The GOI does not permit investment in real estate by
foreign investors, except for company property used to do business. NRIs
are permitted 100 percent equity investment in real estate.

To establish a business, various approvals and clearances are required
such as: incorporation of the company; registration and allotment of
land; permission for land use in case of industry located outside an
industrial area; environmental site approval; sanction of power and
finance; approval for construction activity and building plan;
registration under State Sales Tax Act and Central and State Excise
Acts; and consent under Water and Air Pollution Control Acts. Industries
such as petrochemicals complexes, petroleum refineries, cement thermal
power plants, bulk drugs, fertilizers, dyes, and paper (among others)
need to obtain environment clearance from the Ministry of Environment
and Forest.

The GOI passed the Securitization Act in 2002 to introduce bankruptcy
laws. The requirement to obtain government permission before shutting
down some businesses, however, makes it difficult to dispose of company
assets.

## Protection of Property Rights [**Return to top**](#ch6)

The legal system puts a number of restrictions on the transfer of land,
making titles unclear, often making buying and selling transactions
difficult. There is no reliable system for recording secured interest in
property, making it difficult to use property as collateral or to
foreclose against such property.

India has generally adequate copyright laws, but enforcement is weak and
piracy of copyrighted materials is widespread. India is a party to the
Geneva Convention for the Protection of Rights of Producers of
Phonograms and the Universal Copyright Convention, and a member of the
World Intellectual Property Organization (WIPO) and UNESCO. India has
not yet ratified and incorporated into domestic law the WIPO Internet
treaties. Efforts to update its copyright act have been stalled in
inter-ministerial debate for several years.

Trademark protection is good and was raised to international standards
with the passage in 1999 of a new Trademark Bill that codified the use
and protection of foreign trademarks and service marks. Implementing
regulations were not issued, however, until September 2003. The law now
accords national treatment for trademark owners and statutory protection
of service marks. Although U.S. firms report few trademark related
problems, India\'s weak judicial system can make it difficult to
exercise rights established by the law.

Effective January 1, 2005, India expanded product patent coverage to
include pharmaceuticals and agro-chemicals, sectors of significant
interest to U.S. firms. Embedded software may also now be patented. The
GOI introduced these changes through presidential ordinance in order to
meet on time India\'s commitments under the Agreement on Trade Related
Aspects of Intellectual Property Rights (TRIPS). On March 23, 2005, the
Indian Parliament approved legislation to make permanent the change to
India\'s patent law that the GOI had introduced by temporary ordinance.
The new law extends product patent protection to pharmaceuticals and
agricultural chemicals. However, the new law lacks specificity in
several important areas such as compulsory license triggers and defining
the scope of patentable inventions. There is also a large backlog in
pending patent applications resulting in long waiting periods for patent
approval. The GOI is currently reviewing legislation and implementing
regulations to address these deficiencies.

India provides protection for plant varieties through the Plant
Varieties and Farmers' Rights Act.

Indian law does not provide for protection against unfair commercial use
of test or other data that companies submit to the government in order
to obtain marketing approval for their pharmaceutical or agricultural
chemical products. The GOI is currently reviewing legislation for
submission to Parliament in 2006 to provide for some form of data
protection. A small but growing domestic constituency of Indian
pharmaceutical companies, technology firms, and educational institutions
favors improved patent protection.

Indian law provides no protection of trade secrets. The government has
prepared legislation that would appear to be TRIPS compliant, but has
not yet introduced it in Parliament. In 2000, India passed legislation
(Designs Act 2000) to meet its obligations under the TRIPS Agreement for
industrial designs. The GOI also passed the Semiconductor Integrated
Circuits Layout Designs Act 2000, based on standards developed by WIPO.
Only enacting regulations for the former have been published, leaving
the latter law inoperative.

## Transparency of Regulatory System [**Return to top**](#ch6)

Even though India has made much progress on economic reform since 1991,
the economy is still hobbled by excessive rules and a powerful
bureaucracy with broad discretionary powers. Moreover, India has a
decentralized federal system of government in which the state
governments possess broad regulatory powers. Regulatory decisions
governing important issues such as zoning, land-use and environment can
vary from one state to another. Opposition from labor unions and
political constituencies has slowed reform in such areas as exit policy,
bankruptcy, and labor law reform.

Despite these shortcomings, central government efforts to establish
independent and effective regulators in some sectors, such as
telecommunications, securities, and insurance, have shown positive
results. In December 2004, the GOI also created an independent pension
regulator as part of its larger program to reform India\'s pension
system. It also established a Competition Commission and has indicated
its intention to strengthen the commodities futures markets. Lack of
oversight on corporate governance and financial disclosure remain an
obstacle to transparent and stable markets.

## Efficient Capital Markets and Portfolio Investment [**Return to top**](#ch6)

The Indian capital market has grown in recent years, but remains
relatively small compared to other emerging markets and developed
economies. Spot prices for index stocks are usually market-driven and
settlement mechanisms are close to international standards. India\'s
debt and currency markets lag behind its equity markets. Although
private placements of corporate debt have been increasing, the daily
trading volume remains insignificant. The ratio of daily trading volume
to total debt outstanding is less than one percent in India, compared to
about 7 percent in U.S. The Indian stock markets lack broad liquidity,
although high transaction costs and systemic risk have come down with
recent regulatory and administrative improvements. Currently, about 50
Indian stocks, out of more than the 9,000 listed, make up over 75
percent of trading. The proportion of stock available for trading is
limited. Institutional improvements have helped to reduce episodes of
market manipulation, which have led to a lack of confidence by retail
investors who invest primarily in public sector debt instruments. The
GOI has yet to implement \"second-generation\" financial market reforms
to promote liquidity and a broader domestic investor base.

In 2004, the GOI announced its intentions to integrate the commodities
and securities markets and to revamp taxes on securities transactions.
The GOI eliminated the tax on long-term capital gains on stocks and
reduced the tax on short-term capital gains to 10 percent. At the same
time, it put in place a securities transaction tax of 0.15 percent.

Foreign Institutional Investors (FIIs) have a relatively small (compared
to their global portfolios) but growing presence in India with net
inflows for India totaling around \$10.8 billion for the calendar year
2005. While FIIs are allowed to invest in all securities traded on
India's primary and secondary markets, in unlisted domestic debt
securities, and in commercial paper issued by Indian companies, the GOI
imposes several restrictions that vary by type of investment. For
example, the GOI caps the amount of FII investment in the debt market at
\$1.75 billion, except for corporate debt where the limit is \$500
million in a single fiscal year. FII equity holdings in a single company
are also capped at a level below the overall sector-specific foreign
investment limits unless specifically authorized by that company\'s
board of directors.

FIIs investing in India\'s capital markets must register with the
Securities and Exchange Board of India (SEBI). They are divided into two
categories: (a) Regular FIIs \-- those which are required to invest not
less than 70 percent of their Indian exposure in equity-related
instruments, and (b) 100 percent debt-fund FIIs \-- those which are
permitted to invest only in debt instruments. The list of eligible FIIs
has been expanded to include endowment and university funds,
foundations, and charitable trusts. SEBI allows foreign brokers to work
on behalf of registered FIIs. The FIIs can also bypass brokers and deal
directly with companies in open offers. FII bank deposits are fully
convertible and their capital, capital gains, dividends, interest
income, and any compensation from the sale of rights offerings, net of
all taxes, may be repatriated without prior approval.

Non-resident Indians (NRIs) are subject to separate investment
limitations. They can repatriate dividends, rents and interest earned in
India and their specially designated bank deposits are fully
convertible. A special government bond issuance, the Foreign Currency
Convertible Bonds Plan, is available to NRIs only. Purchases up to \$500
million are allowed without prior approval.

The National Stock Exchange (NSE) in Mumbai uses a screen-based trading
system. Computers and reliable telecommunications links permit automated
buy/sell transactions. Other regional exchanges and the National
Over-the-Counter Exchange in Delhi also have computer-trading systems.
The efficiency of the capital market has improved because of the
compulsory depository system for most of the stocks, abolition of the
traditional speculative \"badla\" system of carry forward trades, and
introduction of derivatives trading by way of stock options and index
trading. SEBI regulates all market intermediaries. Securities can be
transferred through electronic book entry. The National Securities
Depository Limited commenced operation in 1996 as part of the NSE. The
other market with national reach, the Bombay Stock Exchange (BSE), has
also set up a depository system. Together, the NSE and BSE account for
96 percent of total turnover in the stock markets. India\'s turnover
ratio (annual value of stock traded over market capitalization), a
measure of liquidity, is higher than those of many developed (e.g., UK,
Japan, and Germany) and emerging markets (e.g., China and Singapore).

Companies incorporated outside India can raise resources in India\'s
capital market through the issuance of Indian Depository Receipts
(IDRs), subject to certain conditions established and monitored by SEBI.
Companies are required to have pre-issue paid-up capital and free
reserves of least \$100 million, as well as an average turnover of \$500
million during the three financial years preceding the issuance.

India's banking industry (with total assets of about \$478 billion in
March 2005) is split into three categories \-- 27 public sector banks
(80 percent of total assets in the banking system), 30 regional private
banks (6 percent), and 36 foreign banks (about 8 percent). According to
official figures, the ratio of non-performing loans to total assets for
public sector banks was 7.2 percent in 2004 compared to 8.8 percent the
previous year despite tightened loan classification standards (from 180
days to 90 days). A Board for Financial Supervision ensures compliance
with guidelines on loan management, capital adequacy, and asset
classification. All banks operating in India are regulated through the
Reserve

Bank of India (RBI) whose authority the GOI has limited gradually as
part of the economic reform process.

Domestic banks are mandated to extend 40 percent of their loans to
\"priority\" borrowers (agriculturists, exporters, and small
businesses). A similar requirement for foreign banks is 32 percent of
loans to exporters and small businesses. In April 2003, the lending
commitment for regional rural banks in priority sectors was raised to 60
(from 40) percent. In addition to imposing sector lending requirements,
the dominance of state-owned banks in the market also allows the GOI to
exert influence over individual lending decisions.

The GOI allows external commercial borrowing (ECB) under the automatic
route up to \$500 million with minimum average maturity of 5 years, and
up to \$20 million for three-five years average maturity. ECB for
financing equipment imports and infrastructure projects can go as high
as \$500 million. All companies except banks, financial institutions and
non-banking financial companies are eligible to pursue ECB or provide
guarantees for such loans. ECB funds cannot be used for investment in
the stock market or real estate.

Takeover regulations require disclosure on acquisition of shares
exceeding five percent of total capitalization. In case of acquisition
of over 10 percent, the buyer must make a public offer for a minimum of
20 percent from the remaining shareholders at a fixed price. Companies
may buy back their shares in the market to make inter-corporate
investments. RBI and FIPB clearances are required to acquire a
controlling stake in Indian companies. Cross shareholding and stable
shareholding are not prevalent in the Indian market. The Hostile
Takeover Code and the SEBI Takeover Committee regulate hostile
takeovers. The Committee makes ad hoc decisions on takeovers, and tends
to protect the target firm when takeover bids come from foreign
entities.

## Political Violence [**Return to top**](#ch6)

In general, there have been few incidents of politically motivated
attacks on foreign projects or installations in recent years. There are
violent separatist movements in Kashmir and some northeastern states.
There were no politically motivated attacks on U.S. companies operating
in India in 2004.

## Corruption [**Return to top**](#ch6)

Corruption is a major concern. In the past, the government procurement
system, especially for telecommunications, power and defense, has been
particularly subjected to allegations of corruption. Several government
employees and public figures have been indicted or convicted under
anti-corruption laws over the last five years.

The legal framework for fighting corruption is provide in the following
laws: the Prevention of Corruption Act, 1988; the Code of Criminal
Procedures, 1973; the Companies Act, 1956; and the Indian Contract Act,
1872. The GOI is introducing legislative changes to its anti-corruption
laws that would give additional powers to vigilance departments in
government bodies and to make the Central Vigilance Commission (CVC) a
statutory body.

U.S. firms have identified corruption as one obstacle to foreign direct
investment. Indian businessmen agree that red tape and wide-ranging
administrative discretion serve as a pretext to extort money. According
to some foreign business representatives in India, the deluge of
corruption lies in the lack of transparency in the rules of governance,
extremely cumbersome official procedures, and excessive and unregulated
discretionary power in the hands of politicians and bureaucrats.

## Bilateral Investment Agreements [**Return to top**](#ch6)

The GOI states that it has concluded 57 bilateral investment treaties.
These included agreements with the United Kingdom, France, Germany,
Malaysia, and Mauritius. Negotiations are underway with other countries.
The United States does not have a bilateral investment treaty with
India, but the two countries do have a double taxation avoidance treaty.
Several tax disputes are pending which are addressed during regular
meetings between the two countries\' Competent Authorities.

## OPIC and Other Investment Insurance Programs [**Return to top**](#ch6)

The U.S. and India signed an Investment Incentive Agreement in 1987 that
covers the Overseas Private Investment Corporation (OPIC) programs. OPIC
is currently open in India for all its programs, specifically supporting
three regional private equity funds and five global funds. OPIC projects
in India are in the following sectors: energy and power,
telecommunications, manufacturing, and services. India is a member of
the World Banks Multilateral Investment Guarantee Agency (MIGA).

## Labor [**Return to top**](#ch6)

India has a very large pool of scientific and technical personnel.
Around 20 percent of the Fortune 500 companies have research and
development operations in India. Most managers and technicians, and many
skilled workers, speak English. Most multinationals recruit managerial
and engineering staff locally for their Indian operations. Nonetheless,
illiteracy acts as a brake on labor productivity in the workforce as a
whole.

India is a member of the International Labor Organization (ILO) and
adheres to 37 ILO conventions that protect workers\' rights. The
Industrial Disputes Act of 1947 governs industrial relations. Workers
may form or join unions of their choice. The Factories Act regulates
working conditions. Other laws regulate employment of women and children
and prohibit bonded labor.

Although there are more than 7 million unionized workers, unions
represent less than one-fourth of the workers in the organized sector
(primarily in state-owned concerns), and less than two percent of the
total work force. Most unions are linked to political parties.
Worker-days lost to strikes and lockouts have dropped 50 percent during
the decade 1991-2000 from the previous decade.

The payment of wages is governed by the Payment of Wages Act 1936, and
the Minimum Wages Act, 1948. Industrial wages range from about \$3 per
day for unskilled workers, to over \$150 per month for skilled
production workers. Retrenchment, closure and layoffs are governed by
the Industrial Disputes Act, which requires prior government permission
to layoff workers or close businesses employing 100 or more workers.
Permission is not easily obtained. Private firms have successfully
downsized using voluntary retirement plans. Foreign banks are also
required to get the RBIs approval for closing branches.

Comprehensive draft legislation on labor reforms is pending approval in
Parliament. It contains stringent provisions for strikes and lockouts.
The amendment to the Industrial Disputes Act, if approved, would
increase the threshold limit to 300 employees for seeking government
approval before laying-off workers.

## Foreign-Trade Zones/Free Ports [**Return to top**](#ch6)

The GOI has established several foreign trade zone plans to encourage
export-oriented production. These provide a means to bypass many of the
domestic economy\'s fiscal and infrastructural obstacles that otherwise
make Indian goods and services less competitive in international
markets. The most recent of the plans is the Special Economic Zone
(SEZ), a duty-free enclave with separately developed industrial
infrastructure. Other plans include the Export Processing Zone (EPZ) and
the Software Technology Park (STP), both of which are designated areas
for export-oriented activities. In addition, India allows an individual
firm to be designated an Export Oriented Unit (EOU). All of these plans
are governed by separate rules and granted different benefits. In May
2005, the GOI passed new legislation called the \"Special Economic Zones
(SEZ) Bill 2005\" endorsing its commitment to a long-term and stable
policy for the SEZ structure which had previous been only an
administrative construct. In addition to tax breaks, the law provides a
one-stop clearance and approval mechanism for setting up SEZ units.

SEZs are regarded as foreign territory for the purpose of duties and
taxes, and operate outside the domain of the custom authorities. SEZ
units are allowed to retain 100 percent of their foreign exchange
earnings in special Export Earners Foreign Currency Exchange accounts.
They are free to sell goods in the domestic tariff area (DTA) on payment
of applicable duties. Sales from DTA firms to SEZ units are on par with
regular trade transactions and hence eligible to benefit from all export
incentive and foreign currency exemption plans. In addition, many state
governments have granted a sales-tax exemption for DTA-SEZ sales. SEZ
units are also exempt from the central government\'s service and excise
tax regimes.

SEZ businesses are expected to be a positive foreign exchange earner
within five years from the commencement of production. None of the FDI
equity caps are applicable to units in SEZs, including those sectors
reserved for small-scale industries. SEZs are exempted from the
requirements of industrial licensing.

The new law increased the tax holiday period (phased out over time) from
10 years to 15-years for both SEZ developers and SEZ production units.
The SEZ legislation also provides for the establishment of an
International Financial Services Centre to facilitate financial services
for SEZ units. Offshore banking units (OBUs) will be permitted to
operate in SEZs, virtually like a foreign branch of a bank, to make
available financing at international rates. The OBUs will enjoy
exemption from certain Reserve Bank (central bank) of India
requirements.

Four SEZs have started operation since 2001 (Kandla, Mumbai, Cochin, and
Surat). There are eight state-promoted, and 13 private and state
government promoted SEZs in various stages of implementation. Seven
EPZs, located in Mumbai, Calcutta, Kochin, NOIDA near Delhi, Kutch,
Chennai, and Vishakhapatnam, have been converted into Special Economic
Zones (SEZs). Although the SEZs benefit from many tax incentives and
relaxed regulatory requirements, they are still governed by India\'s
restrictive labor law, which some observers say is a disincentive to
investors, both foreign and domestic.

EPZs are industrial parks with incentives for foreign investors in
export-oriented business. STPs are special zones with similar incentives
for software exports. EPZ/STP units may import intermediate goods
duty-free. The minimum net foreign exchange earning as a percentage of
exports by EPZ/STP units is required to be at least 3 percent. EPZ/STP
units may sell up to 50 percent of their level of exports on the
domestic market after payment of taxes, with the exception of motor
cars, alcoholic beverages, tea, books, and refrigeration units.

EOUs are industrial companies established anywhere in India that export
their entire production. There are approximately 2,300 fully operational
EOUs in India. They are granted: duty-free import of intermediate goods
duty-free; a ten-year income tax holiday; exemption from excise tax on
capital goods, components, and raw materials; and waiver of sales taxes.
EOUs may sell up to five percent of \"seconds\" on the domestic market
after paying appropriate taxes.

## Foreign Direct Investment Statistics [**Return to top**](#ch6)

**Table A: Inflow of FDI by country (in \$ millions)**

  ------------ --------------- ---------- ---------- ---------- ---------- ----------
  **Year       **1991-2000**   **2001**   **2002**   **2003**   **2004**   **2005**
  (Jan-Sept                                                                
  only)**                                                                  

  Total:       18,893          3,728      3,791      2,525      3,753      2,831

  US           2,906           347        280        418        648        257

  MAURITIUS    4,589           1,573      1,502      568        1,004      860

  N'RLANDS     779             216        154        255        495        55

  U.K.         718             269        350        190        143        235

  FDI/GDP(%)   0.3             0.7        0.7        0.8        0.9        N/A
  ------------ --------------- ---------- ---------- ---------- ---------- ----------

Note: The 2005 figures are for Jan-September (9 months) only.

Source: Secretariat for Industrial Approvals Newsletters, Ministry of
Commerce and Industry, GOI

##### Table B: Major U.S. and other FDI APPROVED in 2004

+------------------------+------------------------+--------------------+
| **Company**            | **Project**            | **Equity           |
|                        |                        | (\$million)**      |
+------------------------+------------------------+--------------------+
| Matrix Labs Ltd.       | Drugs/Pharmaceutical   | 118                |
|                        |                        |                    |
| Mauritius              |                        |                    |
+------------------------+------------------------+--------------------+
| FE Holdings Mauritius  | Infrastructure         | 115                |
|                        |                        |                    |
| Mauritius              |                        |                    |
+------------------------+------------------------+--------------------+
| India Newbridge Ltd.   | Pharmaceuticals        | 78                 |
|                        |                        |                    |
| Mauritius              |                        |                    |
+------------------------+------------------------+--------------------+
| Hughes Software        | Software               | 63                 |
| Systems                |                        |                    |
|                        |                        |                    |
| Mauritius              |                        |                    |
+------------------------+------------------------+--------------------+
| Dr. Mohan Velagapadi   | Pharmaceuticals        | 62                 |
|                        |                        |                    |
| U.S.                   |                        |                    |
+------------------------+------------------------+--------------------+
| Al Amin Invests Ltd.   | Telecom                | 61                 |
|                        |                        |                    |
| Mauritius              |                        |                    |
+------------------------+------------------------+--------------------+
| Dubai Ports Intl. FZE  | Infrastructure         | 52                 |
|                        |                        |                    |
| U.A.E.                 |                        |                    |
+------------------------+------------------------+--------------------+
| Haldia Petrochemicals  | Refined Petroleum      | 51                 |
|                        |                        |                    |
| U.S.A.                 |                        |                    |
+------------------------+------------------------+--------------------+
| AIDQUA Holdings        | Water Supply Project   | 50                 |
|                        |                        |                    |
| Mauritius              |                        |                    |
+------------------------+------------------------+--------------------+
| Thyssenkrupp Electric  | Iron and Steel         | 35                 |
| Steel                  |                        |                    |
|                        |                        |                    |
| Germany                |                        |                    |
+------------------------+------------------------+--------------------+
| J.P. Morgan Securities | Financial services     | 35                 |
|                        |                        |                    |
| U.S.A.                 |                        |                    |
+------------------------+------------------------+--------------------+

Note: The Indo-Mauritius investment agreement provides tax advantages
that have attracted U.S. and businesses of other countries to make FDI
into India from Mauritius, rather than the headquarter country.

##### Table C: FDI Inflows by Sector -- 2004 -- Top 5

  ----------------------------------------- -----------------------------
  **Sector**                                **FDI (\$ millions)**

  Electrical Equipment                      862

  Drug and Pharmaceuticals                  342

  Consultancy services                      258

  All other services                        249

  Chemicals (other than fertilizer)         189
  ----------------------------------------- -----------------------------

Source: Secretariat for Industrial Approvals, Ministry of Commerce and
Industry, GOI

## Web Resources [**Return to top**](#ch6)

-   RESERVE BANK OF INDIA: <http://www.rbi.org.in/>

-   GOVERNMENT OF INDIA DIRECTORY: <http://goidirectory.nic.in/>

-   GOVERNMENT OF INDIA MINISTRY OF FINANCE: <http://finmin.nic.in/>

-   GOVERNMENT OF INDIA MINISTRY OF COMMERCE AND INDUSTRY:
    <http://commin.nic.in/>

-   FOREIGN EXCHANGE MANAGEMENT ACT:
    <http://www.rbi.org.in/index.dll/25?sectionhomepage>

-   INTERNATIONAL CENTER FOR ALTERNATIVE DISPUTE RESOLUTION;
    [http://www.icadr.org](http://www.icadr.org/)

[Return to table of
contents](#doing-business-in-india-a-country-commercial-guide-for-u.s.-companies)

[[]{#ch7 .anchor}Return to table of
contents](#doing-business-in-india-a-country-commercial-guide-for-u.s.-companies)

# Chapter 7: Trade and Project Financing

-   [How Do I Get Paid (Methods of
    Payment)](#how-do-i-get-paid-methods-of-payment-return-to-top)

-   [How Does the Banking System
    Operate](#how-does-the-banking-system-operate-return-to-top)

-   [Foreign-Exchange
    Controls](#foreign-exchange-controls-return-to-top)

-   [U.S. Banks and Local Correspondent
    Banks](#u.s.-banks-and-local-correspondent-banks-return-to-top)

-   [Project Financing](#fiftyseven)

-   [Web Resources](#web-resources-return-to-top-3)

## How Do I Get Paid (Methods of Payment) [**Return to top**](#ch7)

Import financing procedures adhere to western business practices. The
safest method of receiving payments for a U.S. export is through an
irrevocable letter of credit (L/C). The L/C should be payable in favor
of the supplier against presentation of shipping documents through the
importer's bank. Importers open L/C's valid for three to six months
depending upon the terms of the agreement. The GOI does not generally
allow advance payment for goods to be imported. Banks in India require
the importer to deposit funds prior to issuance of a L/C. Typically
L/C's are opened for a period of time to cover production and shipping,
and they are normally paid within seven working days of the receipt of
goods. There are several lines of credit available to U.S companies.

The most important source for finance for the corporate sector continues
to be the capital markets. However, the Indian capital markets,
particularly the primary market, continue to be fluctuating with small
investors cautiously watching trends. Companies are not required to
obtain prior permission from the GOI to access capital markets, but it
is compulsory for companies to obtain Reserve Bank of India's permission
before issuing any shares to a non-resident investor. Indian companies
can also issue American Depository Receipts (ADR) and Global Depository
Receipts (GDR) without any value limits. Several steps have been taken
to improve liquidity in the ADR / GDR market abroad. Two-way fungibility
in ADR/GDR issues has been introduced, subject to sector caps, wherever
applicable. Indian companies are increasingly accessing overseas markets
to raise finances through these instruments.

Commercial banks continue to be the main source of short-term finance
and working capital requirements of Indian firms. Indian Companies also
raise funds by issuing commercial paper and debentures, from
inter-corporate borrowings, and by accepting public deposits. Several
term-lending public financial institutions provide local and foreign
exchange loans for new capital investment projects. They also provide
deferred payment loans, long-term working capital finance, export credit
and stock underwriting services. Lending banks secure their loans with
company assets, corporate guarantees from a parent company, and, in some
cases, by personal guarantees from company directors.

Venture capital financing has been very active in select sectors and
this is having a substantial impact on mobilization of finances for
nascent, high growth sectors such as information technology and
biotechnology.

Local and resident foreign companies are permitted to raise
medium-to-long-term loans in foreign currency for projects requiring
capital equipment, technology imports, or the purchase of aircraft or
ships. The Indian government permits borrowing through suppliers'
credits, buyers' credits, syndicated loans, floating-rate notes,
revolving underwriting facilities and bonds. The RBI permits loans,
which mature within one year, to be repaid from net foreign exchange
earnings without prior government approval.

Loans in foreign currencies can be obtained through foreign commercial
banks, overseas financial institutions (e.g., the International Finance
Corporation and the Asian Development Bank), and foreign export-credit
agencies, in addition to Indian development and commercial banks. Indian
companies can also raise foreign currency loans in accordance with the
guidelines for External Commercial Borrowings (ECB\'s), issued by the
Ministry of Finance. There are no restrictions on the use of such loans,
except that they cannot be used for stock market speculation. Once the
RBI and Ministry of Finance have approved a loan and its terms, no
limitations are placed on interest and principal payments. A firm,
however, must report to the RBI through its designated banker every time
an interest payment is effected.

The RBI encourages and permits, on a specific approval basis, Indian
subsidiaries to receive interest-free loans from their parent companies.
In addition, permission is given to receive advance share subscriptions
from foreign collaborators, to be adjusted against the company's share
capital for meeting pre-operative expenses in India.

## How Does the Banking System Operate [**Return to top**](#ch7)

India has an extensive banking network, in both urban and rural areas.
The banking system has three tiers. These are: the scheduled commercial
banks; the regional rural banks, which operate in rural areas, not
covered by the scheduled banks; and the cooperative and special purpose
rural banks. Timely availability of adequate credit is of utmost
importance for the development of the Indian rural economy and
agriculture. At present Regional Rural Banks, commercial banks and
credit cooperatives, encouraged mainly by the Government, undertake this
function. The Government of India, during the recent budget, announced
that it would encourage private banks to open branches in rural areas,
to service both farm and non-farm sectors.

There are approximately 80 scheduled commercial banks, Indian and
foreign; almost 200 regional rural banks; more than 350 central
cooperative banks, 20 land development banks; and a number of primary
agricultural credit societies. Large Indian banks, and most Indian
financial institutions are in the public sector. Though public sector
banks (27 of them) currently dominate the banking industry, numerous
private and foreign banks exist. Several public sector banks are being
restructured, and in some cases the government either has already
reduced, or is in the process of reducing its ownership. In terms of
business, the state-owned banks account for more than 70 percent of
deposits and loans. Private banks handle 17 percent of the market, and
foreign banks located in metropolitan area account for approximately 13
percent of the market.

[The Reserve Bank of India](http://www.rbi.org.in/) (RBI) is the central
banking institution. It is the sole authority for issuing bank notes and
the supervisory body for banking operations in India. It supervises and
administers exchange control and banking regulations, and administers
the government\'s monetary policy. It is also responsible for granting
licenses for new bank branches. The Deposit Insurance and Credit
Guarantee Corporation, an organization promoted and fully funded by the
RBI, offers deposit insurance facilities. The RBI directs banks to meet
Bureau of Indian Standards guidelines. Indian banks must also adhere to
the prudential norms laid down by the Basel Group.

Based on the recommendations made by the committee on banking sector
reforms, the face of the Indian banking system has undergone a sea
change as compared to a decade ago. The Indian banking system is
subjected to highest level of prudential regulations, accounting
standards and disclosures, which are almost comparable to the
international best practices. Entry of more foreign banks and emergence
of new private banks has made the banking environment more competitive.
The reform has ensured that banking enterprise/technology competence
exist in the market to provide healthy competition and wider choice to
the clients. A policy announcement has been made to allow foreign banks
to set up banking subsidiaries in India. FDI is now allowed up to 74
percent of equity in private banks.

There are more than 40 foreign banks operating in India with more than
200 branches, most of which are located in metropolitan centers. The
entry of foreign banks is based on reciprocity, economic and political
bilateral relations. Foreign banks in India are subject to the same
regulations as scheduled banks. These banks finance trade and lend to
large business groups. They have also diversified into merchant and
retail banking, deposit mobilization from non-resident Indians, security
operations, and consulting services. They account for approximately 13
percent of total deposits, and have a small exposure in the RBI's
priority lending sectors. Most Indian banks are well behind foreign
banks in the areas of customer funds transfer and clearing systems. They
are hugely over-staffed and are unlikely to be able to compete with the
new private banks that are now entering the market. While these new
banks and foreign banks still face restrictions in their activities,
they are well capitalized, use modern equipment and attract high-caliber
employees.

The entry of new private sector banks has led to greater competition in
the market, with these banks gaining significant market shares. The
private banks are highly automated and offer quality client service.
Branches of the private banks are well connected and offer ATM\'s and
other delivery interfaces. They interface with corporate customers
through branches, mobile relationship managers, electronic banking and
telephone banking, and also ATM\'s and web banking for retail customers.
Competition from private sector banks has stimulated nationalized banks
to become more customer-oriented.

Indian banking financial statements conform to internationally
recognized standards, but, in some cases, are modified to suit Indian
conditions. The RBI issues circulars to all banks in this regard and
advises banks to follow these guidelines. Banks are free to choose their
auditors. Most foreign banks and the more progressive private Indian
banks work with international auditing firms. Many private and GOI banks
continue to work with local auditing firms whose audit reports do not
conform to international standards.

Most public sector banks meet the [RBI](http://www.rbi.org.in/)'s
guideline of 9 percent capital to risk assets ratio (CAR). The CAR is a
measure of the amount of a bank\'s capital expressed as a percentage of
its risk weighted credit exposures. An international standard, which
recommends minimum capital adequacy ratios, has been developed to ensure
banks can absorb a reasonable level of losses before becoming insolvent.

Branches of foreign banks must also meet the above requirements on the
basis of locally held capital as well as achieve the specified levels of
capital to risk assets ratio. A separate Board at the RBI, with the RBI
Governor as its Chairman, performs the supervisory function in this
regard. It is proposed to hike the CAR to 12 percent based on the Basle
Committee recommendations.

As of March 2003, 25 out of 27 public sector banks had CAR above the
prescribed level of 9 percent. Of these, as many as 23 banks had CAR
exceeding 10 percent. Of the 30 private banks only two of them could not
attain the minimum CAR.

The diminishing CAR of foreign banks indicates that their assets have
grown faster than their liabilities. Also the New Private sector banks
have kept their CAR well above the statutory limit to protect themselves
against future tighter prudential norms relating to capital adequacy.
Other banks have their CAR marginally above the others indicating low
growth or higher capital requirement in the coming years.

All commercial banks face stiff restrictions on the use of both their
assets and liabilities. The RBI requires that domestic Indian banks make
40 percent of their loans at concessional rates to priority sectors\'
selected by the government. These sectors consist largely of
agriculture, exporters, and small businesses. Since July 1993, foreign
banks have been required to make 32 percent of their loans to this
priority sector. Within the target of 32 percent, two sub-targets for
loans to the small-scale sector (minimum of 10 percent) and exports
(minimum of 12 percent) have been fixed.

Foreign banks, however, are neither required to open branches in rural
areas nor to extend loans to the agricultural sector. The rate of
non-performing loans in priority sector lending is about 30 percent
higher than in non-priority lending. Over 10 percent of non-priority
loans are non-performing. Further, most Indian banks lend approximately
30-40 percent of their funds to the GOI. A high demand from the GOI for
credit, and the Indian banking sector's relative lack of experience in
market-based lending, continues to support lending for the Government.

The high level of bad debts and non-performing assets (NPA),
particularly in public sector banks, continues to cause concern for the
GOI and the banking system. The Indian budget for 2002-2003 has proposed
to set up a pilot asset reconstruction company (ARC) to conduct auctions
of NPA in the banking sector, and also to develop a market for secure
loans. Currently there are 3 ARCs in India, two in Mumbai and one in New
Delhi. Recent landmark legislation empowers the take-over of collateral
assets of defaulting borrowers, thereby enabling banks to further
curtail non-performing loans.

The method of asset classification, capital adequacy norms, method of
income recognition and classification, interest rate determination etc
that were in deplorably poor standards has undergone a sea change since
1991. Unfortunately, much of the reforms were based on the implicit
assumption that regulatory reforms would automatically usher structural
reforms as well. In practice however this has not taken place. The
strong preference for investing in government securities by banks, the
aversion to take on risky investments has been the adverse outcomes.

The blurring distinction between Development Financial Institutions
(DFIs) and Banks is yet another issue that requires serious attention in
the Indian Banking system. Bank loans still account for over 75 percent
of capital expansion of industrial India, which speaks of the importance
of term loans. The market needs to be structured to take care of
longer-term loans. Further, the entry of more new private insurance
companies would bring in changes in lending practices requiring a
harmonious synthesis between DFIs, banks and insurance companies to
cater to the needs of industry, agriculture and other priority sectors.

Enhanced overall competitiveness of Indian economy depends on the
efficiency of the financial sector. Acceleration in the economic growth
will depend both on achieving higher investment levels in the public and
private sectors and also on achieving higher investment efficiency. A
large part of the expenditure of Indian states is financed from the
small savings. A reduction in interest rates would immediately shrink
the states' pool of expendable resources. Excessive government borrowing
requirements have impeded financial sector reforms since the government
has to maintain adequate controls on the sources of savings to finance
it. The high government borrowing results in higher interest rates. This
imposes high cost on whole economy.

Three broad areas that are critical for reform would be fiscal deficit,
legislative changes and structural issues affecting public sector banks.
Undoubtedly, Indian Government has devoted some attention in regard to
all the three areas. The budgets over the last three years have
contained larger and wider reference to reforms in the financial sector.
However, several governmental initiatives, significant changes in legal
and institutional framework are necessary for further progress in reform
of financial sector.

Infrastructure investment requires long-term funds. It is essentially
insurance funds, pension funds, provident funds and the like, which have
funds that can be invested in long-term securities. It is for this
reason that it is essential that the pension and provident fund sector
must be opened up to new participants.

## Foreign-Exchange Controls [**Return to top**](#ch7)

[The Reserve Bank of India](http://www.rbi.org.in/) (RBI) sets India's
exchange-control policy and administers foreign exchange regulations in
consultation with the GOI. India\'s foreign exchange control regime is
governed by the
[FEMA](http://www.rbi.org.in/index.dll/25?sectionhomepage) (Foreign
Exchange Management Act), enacted with the objective of facilitating
external trade and payments and for promoting the orderly development
and maintenance of foreign exchange market in India, and to give effect
to the liberalization announced in the economic policies. This Act came
into force from June 1, 2000.

FEMA extends to the whole of India. It applies to all branches, offices
and agencies outside India owned or controlled by a person resident in
India and also to any contravention there under committed outside India
by any person to whom this Act applies.

The Act also re-defines the term \'resident Indian\'. Under the new
definition, any person who has lived in the country for more than 182
days during the previous financial year is considered to be a resident,
but persons who have traveled to and from India for the purpose of
vacation, business or employment are excluded from this definition.
Foreign companies operating in India fall under the purview of
[FEMA](http://www.rbi.org.in/index.dll/25?sectionhomepage). Since 1992,
all foreign companies have been on par with Indian companies.

Foreign exchange controls have been substantially relaxed. Effective
from August 20, 1994, India announced its acceptance of Article VIII
status in the International Monetary Fund. The Indian Rupee is fully
convertible on the current account and convertibility on capital account
with unified exchange rate mechanism is foreseen in coming years.

The Indian foreign exchange market is developing fast, with banks
offering a variety of instruments to companies to hedge foreign exchange
risks. The level of activity in the Indian foreign exchange market is
expected to increase once the Rupee becomes fully convertible on the
capital account.

Firms may make advance payments in foreign currency without prior RBI
approval for importing certain products such as machinery and capital
goods when foreign manufacturers require down payments. Where the amount
of advance remittance exceeds \$15,000, such payments are permitted only
if the importer obtains a bank guarantee from an international bank
covering the advance remittance amount. The physical import of goods
should then normally be completed within three months of advance payment
to the foreign exporter.

The RBI permits short-term credits up to 180 days only. Longer periods
are allowed for deferred-payment credits, especially for capital goods,
but permission must be obtained and a deferred import license is
required from the Director General of Foreign Trade.

Since April 1997, companies have been able to forward cover from
authorized dealers in foreign exchange for periods exceeding six months.
Documentation requirements of banks for arranging such cover have also
been drastically reduced and replaced with business projections and past
performance criteria to gauge the level of exposure that is prudent. As
a result of these measures, the RBI has enabled banks to arrange swaps
between two borrowers without obtaining prior RBI approval.

In March 1993, India abolished its two-tiered exchange rate regime,
moving to a single, market-determined exchange rate for trade
transactions and inward remittances. The Rupee is convertible on current
account transactions, with limits remaining on foreign exchange for
travel and tourism. Capital account transactions carried out by foreign
investors, both portfolio and direct, are fully convertible. However,
Indian firms and individuals remain subject to capital account
restrictions.

Measures initiated by the Reserve Bank to integrate the Indian foreign
exchange market with the global financial system include: permitting
banks to fix their own position limit and aggregate gap limits; to
borrow from and invest abroad up to 15 percent of capital; and to
arrange hedge risks for corporate clients through derivative
instruments.

Indian companies are allowed to employ foreign nationals and make
payments in foreign currency. Indian companies are also allowed to bid
in foreign currencies for major projects such as oil exploration
contracts and multilateral funded projects.

## U.S. Banks and Local Correspondent Banks [**Return to top**](#ch7)

**LIST OF U.S. BANKS**

American Express Bank Ltd.

Mr. Shrikant Rege

Chief Executive Officer

221 Dr. D. N. Road

Fort House, Fort, Mumbai 400001, India

Telephone: 91-22-5632 1111

Fax: 91-22-5632 1023

Bank of America

Mr. Vishwavir Ahuja

Managing Director and Country Manager

Express Towers

16th Floor, Nariman Point

Mumbai 400 021

Telephone: 91-22-5632 3001

Fax: 91-22-2287 0981

Chase Manhattan Bank

Mr. Dominic Price

Chief Executive Officer

Mafatlal Center, 9th Floor

Nariman Point, Mumbai 400 021, India

Telephone:91-22- 2281-6110 (D)

Fax: 91-22-22855666 (D)

Citibank N.A.

Mr. Sanjay Nayar

Chief Executive Officer- Citi Group

Citi Group Center, 5th Floor, Plot C-61

G Block, Bandra Kurla Complex

Bandra (East), Mumbai 400 051, India

Telephone: 91-22-2653-5858; 2653-5888(D)

Fax: 91-22-2653-5859

Email: <sanjay.nayar@citigroup.com>

**LIST OF U.S. FINANCIAL/LENDING INSTITUTIONS**

Mr. Mark Garfinkel

Vice President and General Counsel

Overseas Private Investment Corporation

1100 New York Avenue, N.W.

Washington, DC 20527

Tel: 202-336-8799

Fax: 202-336-8700

Website: [http://www.opic.gov](http://www.opic.gov/)

Mr. John Richter

Director- Africa, Asia & Middle East

Export-Import Bank of the United States

811 Vermont Avenue, N.W., Office 911

Washington, DC 20571

Tel: 202-565-3946

Fax: 202-565-3931

Website: [http://www.exim.gov](http://www.exim.gov/)

Mr. Carl B. Kress

Regional Director

U.S. Trade and Development Agency

1000 Wilson Boulevard, Suite-1600

Arlington, VA 22209 - 2131

Tel: 703-875-4357

Fax: 703-875-4009

Website: [http://www.tda.gov](http://www.tda.gov/)

Or:
[http://www.ustda.gov/USTDA/USTDA%20By%20Region/menasa.htm](http://www.ustda.gov/USTDA/USTDA By Region/menasa.htm)

**LIST OF REGIONAL MBD/IFI OFFICES**

Ambassador Ashok Saikia

Executive Director- India

Asian Development Bank

4, San Martin Marg

P.O. Box 5331, Chanakyapuri

New Delhi 110 021, India

Tel: 91-11-24107200

Fax: 91-11-26870955

E-mail: [adbinrm@adb.org]{.underline}

Website: [http://www.adbindia.org](http://www.adbindia.org/)

Mr. C. Franklin Foster

Senior Commercial Officer

U.S. Commercial Liaison Office for ADB (CS/ADB)

American Business Center

25th Floor, Ayala Life-FGU Building

6811 Ayala Avenue,

Makati City, Philippines 1226

Tel: 63-2- 887-1345

Fax: 63-2- 887-1164

Email: frank.foster@mail.doc.gov

ADB North American Representative Office

815 Connecticut Ave, NW

Suite 325, Washington, D.C. 2006

Tel: 202-728-1500

Fax: 202-728-1505

http://www.adb.org

Email: [naro@.adb.org]{.underline}

Mr. Iyad Malas

Director- South Asia

International Finance Corporation

1 Panchsheel Marg, Chanakyapuri

New Delhi 110 001

Tel: 91-11-53111000

Fax:91-11-51111001

Email: southasia@ifc.org

Mr. Sudip Mazumdar

Country Director

The World Bank

70 Lodi Estate

New Delhi 110 003

Tel: 91-11-2461-7241

Fax: 91-11-2461-9393

Email: <smozumder@worldbank.org>

[http://www.worldbank.org](http://www.worldbank.org/)

Benjamin S. Crow

Senior Commercial Officer

Commercial Liaison office

The World Bank

1818 H Street, N.W.

Washington, DC 20433

Tel: (202) 473-5105

Fax: (202) 477-2967

Email: <bcrow@worldbank.org>

## Project Financing [**Return to top**](#ch7)

**THE EXPORT-IMPORT BANK OF THE UNITED STATES (EXIMBANK)**

The Export-Import Bank of the United States (Ex-Im Bank) is the official
export credit agency of the United States. Ex-Im Bank\'s mission is to
assist in financing the export of U.S. goods and services to
international markets. Ex-Im Bank enables U.S. companies --- large and
small --- to turn export opportunities into real sales that help to
maintain and create U.S. jobs and contribute to a stronger national
economy. Ex-Im Bank does not compete with private sector lenders but
provides export-financing products that fill gaps in trade financing. It
assumes credit and country risks that the private sector is unable or
unwilling to accept.

Ex-Im Bank provides working capital guarantees (pre-export financing);
export credit insurance (post-export financing); and loan guarantees and
direct loans (buyer financing). No transaction is too large or too
small. On average, 85 percent of EX-IM transactions directly benefit
U.S. small businesses. With nearly 70 years of experience, Ex-Im Bank
has supported more than \$400 billion of U.S. exports, primarily to
developing markets worldwide.

Ex-Im Bank provides a level playing field for U.S. exporters by
countering the export credit subsidies of other governments. It also
provides financing to creditworthy private and sovereign foreign buyers
when private financing is unavailable. To qualify for Ex-Im Bank
support, the product or service must have at least 50 percent U.S.
content and must not affect the U.S. economy adversely. Although Ex-Im
Bank supports the sales of U.S. exports worldwide. In recent years, its
focus has shifted to the developing nations whose economies are growing.
Ex-Im Bank will finance the export of all types of goods or services,
including commodities, as long as they are not military-related (certain
exceptions exist). Two of its major goals are to increase the export of
environmental goods and services, which are in strong demand among the
developing nations, and to expand the number of U.S. small businesses
using Ex-Im Bank programs.

In February 2004, Mr. Philip Merrill, Chairman, U.S. EXIM visited India
and traveled to New Delhi, Chennai and Mumbai. Merrill met with Indian
and U.S. business leaders as well as leaders of the Reserve Bank of
India, Indian Ex-Im Bank, the Industrial Development Bank of India,
information technology executives and with India\'s finance minister.

Ex-Im Bank has more than \$1 billion in exposure in India. The Bank\'s
financing has helped Indian companies such as Jet Airways purchase
commercial aircraft, Indian Oil Corporation buy equipment and services
for a petrochemical refinery, and a number of Indian information
technology companies purchase U.S.-made software.

Ex-Im\'s outstanding loans in India are much lower than other developing
countries like China and Indonesia. To better serve the Indian market,
Ex-Im has announced up to \$1 billion of support for rupee loans aimed
at small and medium-sized Indian companies. Ex-Im has signed a
memorandum of understanding with India\'s Power Finance Corporation for
up to \$500 million in Ex-Im support for transactions involving U.S.
exports of energy-related technologies.

U.S. exporters can obtain an Ex-Im Bank Letter of Interest *(*LI) to
assist in negotiations with a potential foreign buyer. The LI indicates
ExIm's willingness to consider a financing offer if a sale is completed.
A LI can be issued within seven days of a request for financing and
remains in effect for six months. The following are descriptions of the
main Ex-Im Bank programs:

**Working Capital Guarantee Program:** Ex-Im Bank\'s Working Capital
Guarantee Program encourages commercial lenders to make loans to U.S.
businesses for various export-related activities. The program
facilitates the expansion of U.S. exports. It helps small and
medium-sized businesses that have exporting potential but need funds to
buy or produce goods, and/or to provide services, for export. It may be
used to cover working capital loans to a U.S. business if the lender
shows that the loan would not have been made without Ex-Im Bank\'s
guarantee, and Ex-Im Bank determines that the exporter is creditworthy.
Ex-Im Bank\'s working capital guarantee covers 90 percent of the loan\'s
principal and accrued interest. Guaranteed loans must be fully
collateralized. Exporters must demonstrate a successful track record of
past performance including at least one full year of operations and a
positive net worth. Financial statements must show sufficient strength
to accommodate the requested debt. Exporters may apply directly to Ex-Im
Bank for a preliminary commitment for a guarantee. If approved, the
exporter may then approach various lenders to secure the most attractive
loan package. A preliminary commitment is valid for six months. The
lender must apply for the final commitment. Ex-Im Bank imposes no
interest rate ceilings or maximum fee limitations; however, lenders
should take into account that 90 percent of the risk is covered by an
agency of the U.S. Government and price their loans accordingly.

**The Export Credit Insurance program:** The Export Credit Insurance
program helps U.S. exporters develop and expand their overseas sales by
protecting them against loss should a foreign buyer or other foreign
debtor default for political or commercial reasons. To encourage the
export of U.S. goods and services, Ex-Im Bank has tailored its policies
to meet the insurance needs of exporters and financial institutions. For
example, insurance policies may apply to shipments to one buyer or to
many buyers, insure comprehensive (commercial and political) credit
risks or only specific political risks, or cover short-term as well as
medium-term sales. Three policies, the Small Business Policy, the Small
Business Environmental Policy and the Umbrella Policy, are geared
specifically to small businesses just beginning their export sales
program. Eligibility criteria differ for each type of policy.

**Medium- and Long-Term Loans and Guarantees:** Under the Medium-Term
Guarantee Program, Ex-Im Bank guarantees the lender's loan to the
foreign buyer. Because Ex-Im Bank approves the documentation before the
guarantee is effective; the lender is assured that a claim will be paid
if presented within the time allowed. The interest rate charged is
negotiated between the lender and the buyer. Ex-Im Bank\'s guarantee
includes accrued interest. Usually the lender or the foreign buyer makes
the approach to Ex-Im Bank. In very rare situations, usually at the
insistence of the foreign buyer, Ex-Im Bank will use its Direct Loan
Program to make a loan from its own resources to the foreign buyer. All
such loans have a fixed interest rate, which is based on U. S. Treasury
securities and is the lowest allowed under international agreement.
Under Ex-Im Bank\'s standard repayment terms, exporters of capital goods
can obtain 2-year repayment terms for their buyers with a U.S. contract
value up to \$80,000. Once the level reaches \$350,000, 5-year repayment
terms can be offered. For exporters that are facing competition from
other exporters backed by foreign-aid type financing from their
governments, Ex-Im Bank may match their financing. Exporters of
environmental goods and services are eligible for additional benefits in
the financing to the foreign buyer.

**Credit Guarantee Facility (CGF) Program:** In order to facilitate the
sale of U.S. capital goods and related services, Ex-Im Bank has
established the Credit Guarantee Facility (CGF) Program. Credit
guarantee facilities are lines of credit between a bank in the U.S. and
a foreign bank (or occasionally a large foreign buyer). Ex-Im Bank
guarantees the repayment of the foreign bank\'s obligations. The foreign
bank then makes credit available to the end user of the U.S. exports and
takes the repayment risk of that local company. Financing is restricted
to repayment terms of two to five years. Exports typically sold on
shorter terms are not covered under such facilities. U.S. exporters do
not need to go through the Ex-Im Bank application process. They should
direct their buyers to an on-lending bank in their country to obtain the
credit. The U.S.-based bank will disburse to the U.S. exporter. Since
the lines are pre-approved and individual transactions do not require
Ex-Im Bank\'s review, the process can move very quickly.

**Project Finance Program:** Ex-Im Bank offers limited recourse project
finance support to assist U.S. exporters competing in international
growth industries. The Limited Recourse Finance Program provides
financing for projects that are dependent on the cash flows of the
project for repayment rather than on the credit strength of a purchaser.
Combinations of either direct loans and guarantees for commercial bank
loans with political risk only or comprehensive coverage are available
for a given project. During the construction period, Ex-Im will provide
guarantees to cover only political risk and will finance up to 85
percent of the export value. Ex-Im offerings also include: the financing
of interest accrued during construction; the financing of host country
local costs of up to 15 percent of the U.S. contract value; and the
provision of maximum repayment terms under OECD guidelines.

**Aircraft Finance Program:** Ex-Im Bank offers financial support for
the export of new and used U.S. manufactured commercial and general
aviation aircraft, including helicopters, under its direct loan,
guarantee, and insurance programs. The terms and conditions of Ex-Im
Bank\'s aircraft programs are governed by the OECD Sector Understanding
on Export Credits for Civil Aircraft. Ex-Im Bank typically provides
guaranteed loans that have been extended by a financial institution to
either the borrower directly or to facilitate a finance lease. In India,
this program assumes an added significance since aircraft finance
accounts for bulk of the Ex-Im Bank\'s exposure in India.

**THE OVERSEAS PRIVATE INVESTMENT CORPORATION
([OPIC](../../../../../../../../C:/Documents%20and%20Settings/pvaidy/Local%20Settings/Temporary%20Internet%20Files/Content.IE5/8TMZ8TUZ/ml))**

OPIC\'s mission is to mobilize and facilitate the participation of
United States private capital and skills in the economic and social
development of less developed countries and areas, and countries in
transition from non-market to market economies, thereby complementing
the development assistance objectives of the United States. OPIC
accomplishes this mission by assisting U.S. investors through four
principal activities designed to promote overseas investment and reduce
the associated risks:

\- Insuring investments overseas against a broad range of political
risks;

\- Financing of businesses overseas through loans and loan guaranties;

\- Financing private investment funds that provide equity to businesses
overseas; and

\- Advocating the interests of the American business community overseas.

As part of its overall mission, OPIC advocates on behalf of U.S.
business clients that have made long-term investments in emerging
markets and developing nations. OPIC also works with host country
governments to help create economic climates that attract U.S.
investment, facilitating the entry of hundreds of U.S. businesses into
new markets abroad. The Overseas Private Investment Corporation's
political risk insurance and loans help U.S. businesses of all sizes
invest and compete in developing nations and emerging markets and
worldwide. OPIC is a self-sustaining agency. By charging user-fees, OPIC
operates at no net cost to U.S. taxpayers.

OPIC programs are available for new and expanding business enterprises
in more than 150 countries. Since 1971, OPIC-supported projects have
made a difference by:

\- Facilitating \$145 billion worth of investments in hundreds of
projects that have helped developing countries to generate over \$11
billion in host-government revenues and to create more than 680,000
host-country jobs.

\- Supporting 254,000 American jobs and \$65 billion in exports; and
expanding economic development, encouraging political stability and
promoting free market reforms.

OPIC offers several programs to insure U.S. investments in emerging
markets and developing countries against the following risks: 1)
currency inconvertibility - the inability to convert profits, debt
service, and other investment remittances from local currency into U.S.
dollars; 2) expropriation\--the loss of an investment due to
expropriation, nationalization, or confiscation by a foreign government;
and 3) political violence\--the loss of assets or income due to war,
revolution, insurrection, or civil strife. Coverage is available for new
investments and for investments to expand or modernize existing
operations. Equity, debt, loan guarantees, leases and most other forms
of long-term investment can be insured. Special programs are also
available for contractors, exporters, and oil and gas projects.

Medium-to-long-term financing for sound overseas investment projects is
available through loan guarantees and direct loans. Direct loans
generally range from \$2 million to \$30 million and are reserved
exclusively for projects significantly involving U.S. small businesses
and cooperatives. Loan guarantees generally range from \$10 million to
\$200 million. OPIC\'s financing commitment may range from 50 percent of
total project costs for new ventures up to 75 percent for the expansion
of existing successful operations, with final maturities of five to 12
years or more. OPIC also supports a family of privately managed
direct-investment funds in various regions and business sectors.

OPIC has a current profile of over \$900 million in India, which is
helping to leverage an additional \$7.3 billion in investment. OPIC has
not made any recent investments in India and made a settlement on the
Dabhol power project in July 2005.

**U.S. TRADE AND DEVELOPMENT AGENCY (USTDA)**

The U.S. Trade and Development Agency (USTDA) advances economic
development and U.S. commercial interests in developing and middle
income countries. The agency funds various forms of technical
assistance, feasibility studies, training, orientation visits and
business workshops that support the development of a modern
infrastructure and a fair and open trading environment.

USTDA\'s strategic use of foreign assistance funds to support sound
investment policy and decision-making in host countries creates an
enabling environment for trade, investment and sustainable economic
development. Operating at the nexus of foreign policy and commerce,
USTDA is uniquely positioned to work with U.S. firms and host countries
in achieving the agency\'s trade and development goals. In carrying out
its mission, USTDA gives emphasis to economic sectors that may benefit
from U.S. exports of goods and services.

USTDA funds project planning activities that directly influence the
procurement decisions related to major industrial or infrastructure
projects in developing and middle-income countries - projects that
typically represent millions of dollars in U.S. export potential. From
radar for airports in Asia to process controls for refineries in Latin
America, hundreds of goods and services are required to implement a
project. USTDA works to ensure that the services and products needed for
projects will of U.S. origin.

U.S. firms carry out all USTDA activities. The following is a brief
summary of the activities that USTDA funds:

**Definitional missions & desk studies** - Before USTDA provides
specific grant assistance, it requires independent evaluation of the
proposal. Teams of technical specialists, all of whom are small U.S.
businesses, are hired by USTDA to gather additional information on a
project and provide these reports. Desk studies provide quick analysis
and are conducted in the United States. By contrast, definitional
missions provide a more detailed evaluation and involve traveling to the
region in question.

**Technical assistance** - USTDA funds technical assistance to project
sponsors related to the evaluation or implementation of projects. In
some instances, USTDA also offers funding to foreign governments for
technical assistance that supports capacity building initiatives and the
implementation of trade agreements that may lead to increased U.S.
exports.

**Feasibility studies** - Feasibility studies evaluate the technical,
financial, legal, and economic aspects of a development project in the
pre-investment stage. Since this information is required to assess the
credit worthiness of a project before it can proceed, USTDA feasibility
studies provide American firms with the opportunity to get in on the
\"ground floor.\" USTDA-funded feasibility studies also advise project
sponsors of specific U.S. equipment and services. This information may
lead to U.S. exports.

**Orientation visits** - Orientation visits, sometimes referred to as
reverse trade missions, offer U.S. suppliers an opportunity to showcase
their products to foreign procurement officials. USTDA sponsors visit to
the United States by foreign officials interested in purchasing American
goods and services for specific projects.

**Conferences** - USTDA conferences provide U.S. firms with face-to-face
contact with key procurement officials and decision makers. These
results driven events build business relationship by familiarizing
project sponsors with U.S. goods and services, and informing U.S.
companies about specific upcoming export opportunities.

USTDA activities cover a wide range of sectors of high priority to host
governments and international development efforts. U.S. technological
expertise can help accelerate the development process in all these
sectors. They include, but are not limited to Energy (Power, Oil and
Gas), Telecommunications, Transportation (Aviation, Urban Transit, Rail)
and Environment (Hazardous and Solid Waste, Industrial Remediation).
Additionally, USTDA has statutory authority to facilitate access to
natural resources of interest to the United States. USTDA projects
contribute to: industrial restructuring and modernization; creating a
modern infrastructure for private development; improving the
environment; developing strong trade linkages.

Increasingly in recent years, as Asian public decision-makers have
recognized the financial and operational benefits of private
infrastructure development, USTDA has played a role in facilitating the
development of priority private projects with U.S. export potential.

**USTDA OPERATING PROCEDURES**

Public and private sector project prospects come to USTDA in a variety
of ways. A foreign government or private sector entity may approach
USTDA directly with a funding request. The commercial staff of U.S.
Embassies or Consulates also frequently plays a crucial role in project
identification. U.S. firms are invited to refer prospective projects to
USTDA. In all cases, USTDA\'s review of the request begins only with an
official request for assistance from the host country project sponsor,
and will ultimately require the endorsement of the U.S. Embassy in the
originating country.

A full description of the anticipated project and the anticipated study
scope submitted with the official letter of request may facilitate and
expedite the USTDA review process (a project information outline is
available upon request). USTDA normally conducts a preliminary internal
review of the proposal to verify that: (1) the project represents a
development priority for the sponsoring country; (2) project financing
has been identified and/or is likely if the study suggests project
feasibility; (3) the potential for U.S. exports during project
implementation is significant; and (4) that strong foreign competition
mandates USTDA\'s involvement in the project.

Before USTDA funds a project plan, it requires an independent evaluation
of the project itself. These reports are provided by a team of technical
specialists contracted by USTDA to gather additional information on a
project.

Typically, USTDA sends a mission of technical specialists (the
Definitional Mission) to the country to gather additional information on
the project, work with local authorities to develop a scope of work and
budget for an appropriate feasibility study or consultancy, and make a
recommendation concerning USTDA support of the study. Desk Studies are
utilized by USTDA when there is sufficient project information available
and an overseas visit to evaluate the project is not necessary. In these
situations, USTDA hires a technical specialist to perform a review of
the proposed project and to answer specific questions without leaving
the U.S. If USTDA determines that all funding criteria have been met, it
may make a grant offer to the applicant for support of the study. If the
offer is accepted, USTDA signs the grant agreement with the relevant
host government agency or organization (the Grantee).

The Host Country Grantee (rather than USTDA) selects the U.S. firm to
conduct the study under approved competitive bidding procedures.
Normally, this entails advertisement of a request for qualifications in
the Commerce Business Daily, and invitation to the top ranked firms to
submit detailed proposals. The successful U.S. firm negotiates a
contract governing study services directly with the Grantee. Up to 20
percent of the grant is available, when needed, to enlist the
participation of host country private sector expertise through
sub-contractors. As the study is implemented, the U.S. contractor
submits its invoices to the Grantee for endorsement and transmittal back
to USTDA for direct payment.

Costs associated with feasibility studies of private sector projects are
shared between USTDA and the U.S. firm developing the project. Cost
sharing also is required on certain public sector projects. In addition,
in private sector projects, USTDA has adopted a policy that requires
reimbursement of the agency\'s investment in the project. This \"success
fee\" is collected when the project is implemented and the U.S. firm
involved in the study obtains a \"significant economic benefit.\"

In cases where neither a feasibility study nor a consultancy is
appropriate, USTDA may provide funding for tender-related training
programs, bidders briefings, technical seminars, technical assistance,
conferences, or technology related orientation visits to the United
States. USTDA frequently presents the results of positive feasibility
studies to U.S. industry at USTDA-sponsored bidders briefings.

Manufacturers, service providers, engineers and consultants may best
monitor USTDA\'s project pipeline in all regions through the USTDA
Biweekly (subscription information: 703-875-4246). Definitional mission
and desk study consulting opportunities are listed weekly on the USTDA
Definitional Mission Hotline (703-875-7447). Questions related to USTDA
Asia programs may be addressed at 703-875-4357 to Country Manager Marian
Basset.

**INDIA PROJECTS**

**2003**

Pulp and Paper OV - USTDA approved \$124,485 for an Orientation Visit by
Indian public- and private-sector officials to visit the United States
to view pulp and paper technology and practices of U.S. paper companies.
Decision Analysis/Partners was chosen to manage OV logistics.

Water and Wastewater Treatment OV - USTDA provided \$124,997 for an
Orientation Visit by Indian officials to visit the United States to
become familiar with U.S. water and wastewater treatment equipment and
practices. Princeton Energy Resources International, LLC was chosen to
manage OV logistics.

Coal Bed Methane Development OV - USTDA provided \$49,997 for an
Orientation Visit by Indian officials to visit the United States to view
U.S.-made coal bed methane (CBM) technology. The OV focused on matching
U.S. equipment and services with specific near term procurements at a
critical juncture in the development of CBM in India. Power Tech
Associates was chosen to manage OV logistics. It has produced millions
of dollars worth success stories.

**2004**

National Gas Grid Project - USTDA is funding \$690,000 for a \$920,000
feasibility study that will assist GAIL (India) Ltd to evaluate
technologies and practices for the construction, operation and
management of a proposed natural gas transmission pipeline network. The
proposed \$4.3 billion network will eventually reach all major energy
consuming areas in India. The Government of India has identified this
project as a major component of its long-term energy policy and has
designated GAIL as the implementing agency to develop this network. The
project will involve construction of about 7,900 km of line along with a
number of compressor stations and metering stations, gas storage,
control systems and communications. A U.S. company will be competitively
selected to perform the feasibility study.

Gurgaon Specialty Medical Hospital - USTDA provided a grant to Umkal
Medical Institute Private Limited of India to partially fund a
feasibility study on the Gurgaon Specialty Medical Hospital Project. The
study will evaluate the financial, technical and economic feasibility of
constructing a specialized hospital in Gurgaon to meet India\'s growing
health-care needs. KUPS International, Inc. was competitively selected
to perform the study.

Tamil Nadu Sub-Sovereign Finance for Water and Sanitation
Infrastructure - USTDA has financed a grant for technical assistance to
the Tamil Nadu Urban Development Fund to improve its sub-sovereign
financing operations for water and sanitation infrastructure projects in
the state of Tamil Nadu. The Grantee for the project is Tamil Nadu Urban
Infrastructure Financial Services Ltd. Centennial Group was
competitively selected to perform the technical assistance.

Training Grant for Wireless Infrastructure Project - USTDA signed a
Training Grant with Reliance Infocomm Ltd. for \$750,000 after Lucent
Technologies World Services, Inc. was awarded contracts for over \$100
million from Reliance for CDMA telecommunications infrastructure
equipment. The training program will be performed by Lucent and will
focus on training Reliance in various aspects of CDMA mobile phone
technology.

**ASIAN DEVELOPMENT BANK (ADB)**

Asia\'s premier non-profit financial institution, the Asian Development
Bank (ADB), is headquartered in Manila, Philippines. ADB was founded in
1966 and is owned by 63 member countries, including India, which is the
third largest shareholder among the bank\'s regional members, and fourth
largest overall. The United States and Japan are the largest
shareholders, currently with 13 percent voting power each. The Bank\'s
regional membership extends from South Asia to the Far East, through the
Pacific Islands up to Central Asia. Under its Long-Term Strategic
Framework (2001--2015), ADB takes into account in its activities three
crosscutting themes: private sector development, regional cooperation,
and environmental sustainability.

The ADB's major objective is the promotion of the social and economic
well being of its developing member countries in Asia and the Pacific.
This is achieved by lending funds to projects involving agriculture,
energy, industry, transportation, and communication, as well as for
social infrastructure projects such as water supply, sewage and
sanitation, education, health and urban development. The ADB also
invests in, and lends to, the private sector for Build-Own-Operate (BOO)
and Build-Operate-Transfer (BOT) infrastructure, industrial and capital
market development projects and mobilizes additional resources through
co-financing arrangements, including the bank's credit enhancement
instruments such as guarantees and complementary financing plans.

In 2004, ADB approved six loans amounting to \$1,254 million covering
five projects for upgrading national highways, an interstate power
transmission system, reconstruction work in the states of Jammu and
Kashmir, a policy loan for implementing fiscal reforms and improving
governance in the state of Assam, and one private sector loan for a
power generation plant involving an equity investment of \$20.6 million.

Sixteen technical assistance projects for \$11.2 million were also
approved along with two private sector projects for a power generation
plant and a liquefied natural gas terminal involving equity financing of
\$30.3 million, debt of \$54.4 million, and a partial credit guarantee
facility for \$65.3 million. An investment of \$20 million in a private
sector equity fund was also approved in 2004. ADB launched its first
local (rupee) currency bond issue for Rs5 billion (about \$110 million)
in February 2004---the first such issue by ADB in a developing member
country. This will enable ADB to offer rupee loans to private sector
borrowers thus protecting them against exchange rate risks since most
ADB-financed projects generate revenues in local currency.

Cumulative ADB lending to India as of 31 December 2004 was \$14.6
billion.

ADB assistance has had a major development impact on the National
Highway Development Program (NHDP) as trade and traffic have grown
enormously along the major corridors. The Indian financial sector has
been significantly reformed, partly due to a series of ADB loans and
TAs. However, an agenda of unfinished reforms remains, requiring further
assistance. ADB has significantly promoted public-private partnerships
through lines of credit to domestic financial intermediaries for private
investment in physical and social infrastructure. The impact has been
mixed in the power sector. Although the physical investment projects
have been successfully implemented, reforms have lagged behind. ADB is
now helping the Government step up power sector reforms, especially at
the state level.

ADB\'s lending portfolio generates commercial opportunities in borrowing
countries for consultants, equipment suppliers, contractors, banks and
project sponsors from the bank\'s member countries. Thirty-three loans
to India are proposed for 2003-2006, for a total amount of \$7.5
billion, or approximately \$1.9 billion per year. The loan pipeline will
increase moderately from \$1.67 billion in 2003, to \$1.84 billion in
2004, \$1.96 billion in 2005, and \$2.05 billion in 2006. For many
American companies, ADB projects represent an attractive opportunity for
business in Asia. ADB projects are especially appealing because they are
fully financed and bid according to international competitive
guidelines. In addition, participation in an ADB-funded project often
leads to other related work in that country. The U.S. maintains its
number one ranking in total procurement awards among donor countries.
Cumulatively, U.S. companies have won over \$5 billion worth of
contracts since the bank began its operations. (Please visit:
[http://www.adb.org](http://www.adb.org/) for more information).

Aside from its public sector operations, ADB also lends directly to the
private sector where its participation serves to mobilize further
investments for projects that have a high developmental impact. ADB
maintains a resident office in New Delhi as well as a field office in
Gujarat. ADB maintains other resident and field offices in Bangladesh,
Cambodia, China, Indonesia, Laos, Kyrgyztan, Nepal, Pakistan, Sri Lanka,
Vietnam, Vanuatu, Uzbekistan, Kazakhstan and Mongolia. The bank also
maintains representative offices in Tokyo, Washington D.C., and
Frankfurt.

The U.S. Department of Commerce maintains a Congressionally mandated
Commercial Liaison Office for the ADB (CS ADB). The Office\'s mission is
to help American firms access, enter and expand in Asian markets that
benefit from ADB assistance. The office provides counseling, advocacy,
project information, and conducts outreach programs in the region as
well as in the U.S. to help U.S. firms take advantage of commercial
opportunities in countries borrowing from the ADB. To perform its
mandate, the office cooperates with the U.S. Director\'s Office at ADB
and works closely with Commercial Service posts in the region. An
American Senior Commercial Officer heads the office, assisted by two
Commercial Specialists.

**THE WORLD BANK**

The [World Bank Group](http://www.worldbank.org/) is one of the world\'s
largest sources of development assistance. One of the world's largest
sources of development assistance, the World Bank supports the efforts
of developing country governments to build schools and health centers,
provide water and electricity, fight disease, and protect the
environment.

The \"World Bank\" is the name that has come to be used for the
International Bank for Reconstruction and Development (IBRD) and the
International Development Association (IDA). Together these
organizations provide low-interest loans, interest-free credit, and
grants to developing countries.

Higher-income developing countries---some of which can borrow from
commercial sources, but generally only at very high interest
rates---receive loans from the IBRD. Countries that borrow from the IBRD
have more time to repay than if they borrowed from a commercial
bank---15 to 20 years with a three-to-five-year grace period before the
repayment of principal begins. Developing country governments borrow
money for specific programs, including poverty reduction efforts,
delivery of social services, protection of the environment, and
promotion of economic growth that will improve living standards.

The IBRD raises almost all its money in the world's financial markets.
With an AAA credit rating, it issues bonds to raise money and then
passes on the low interest rates to its borrowers. The World Bank, with
184 member countries is currently involved in more than 1,800 projects
in virtually every sector and developing country.

India joined the World Bank in 1944 and is one of its oldest members. In
accordance with the Bank's strategy, lending to the country touched
\$2.9 billion in FY 05 -- more than double the \$1.4 billion lent a year
earlier -- making India the world's largest recipient of Bank
assistance.

As part of this total, India received IDA credits totaling \$1.1
billion - the largest in the world - and IBRD loans totaling \$1.8
billion, the fourth highest in the world. IFC financing also rose to
over \$400 million in this period.

At end-July 2005, the Bank group had 64 active projects with a net
commitment of about \$13 billion. Of this, \$6 billion was from IDA,
\$5.7 billion from IBRD, and \$0.1 billion under the GEF/Montreal
Protocol.

The increase in Bank support to India reflects the rapid growth in
India\'s economy with the bulk of the new lending going to much-needed
infrastructure and human development projects.

The establishment of a World Bank Resident Mission in New Delhi in 1957
was a sign of the importance that the Bank attached to its relations
with India. The New Delhi Office is today the oldest, continuously
functioning local office. The Delhi-based India country director is
responsible for the Bank\'s strategy in India and manages the annual
budget for the country program. To better support the Bank\'s program in
country, the number of professional staff in the New Delhi office has
been increased. About one-third of the Bank\'s operations in India are
now task-led by Delhi-based staff, of which more than half are managed
by national staff.

The World Bank\'s New Delhi office has an active public information
center with a large collection of World Bank and other publications on
India and international development, and documents on projects financed
by the Bank. In recent years, the World Bank's IBRD has been giving
support for India's economic policy reforms and expanded social and
environmental programs. Please visit
[http://www.worldbank.org](http://www.worldbank.org/) for more
information.

The U.S. Department of Commerce maintains a Commercial Liaison Office at
the World Bank. The Office\'s mission is to help American firms access,
enter and expand in markets that benefit from World Bank assistance. The
office provides counseling, advocacy, project information, and conducts
outreach programs in the region as well as in the U.S. to help U.S.
firms take advantage of commercial opportunities in countries borrowing
from the World Bank.

**INTERNATIONAL FINANCE CORPORATION (IFC)**

The International Finance Corporation (IFC) promotes sustainable private
sector investment in developing countries as a way to reduce poverty and
improve people\'s lives. IFC is a member of the [World
Bank](http://www.worldbank.org/) Group and is headquartered in
Washington, DC. It shares the primary objective of all World Bank Group
institutions: to improve the quality of the lives of people in its
developing member countries. Established in 1956, IFC is the largest
multilateral source of loan and equity financing for private sector
projects in the developing world. It promotes sustainable private sector
development primarily by financing private sector projects located in
the developing world; helping private companies in the developing world
mobilize financing in international financial markets; providing advice
and technical assistance to businesses and governments.

IFC has 176 member countries, which collectively determine its policies
and approve investments. To join IFC, a country must first be a member
of the IBRD. IFC\'s corporate powers are vested in its Board of
Governors, to which member countries appoint representatives. Its member
countries provide IFC's share capital. IFC\'s authorized capital is
\$2.45 billion.

Although IFC coordinates its activities in many areas with the other
institutions in the World Bank Group, IFC generally operates
independently as it is legally and financially autonomous with its own
Articles of Agreement, share capital, management and staff.

IFC resumed new business in India in 1999, after a lull in project
approvals stemming from the international economic sanctions imposed
after nuclear testing in May 1998. Since 1956, IFC has invested in 153
companies in India, providing nearly \$2.8 billion in financing for its
own account and \$525 million for the accounts of participants in IFC's
loan syndication program.

IFC held portfolio of \$1.2 billion (as of March 2005) makes India our
third largest country of operations. In recent years, IFC have grown its
business substantially, with new commitments reaching \$284 million in
FY 2004. Currently IFC focuses on activities on supporting: private
sector involvement in infrastructure financing; restructuring and
modernization of the manufacturing and services sectors and the
development of new financial institutions and product

Please visit [http://www.ifc.org](http://www.ifc.org/) for more
information.

**THE MULTILATERAL INVESTMENT GUARANTEE AGENCY (MIGA)**

MIGA, a member of the World Bank group, supplements the activities of
the IBRD, IFC and other international development finance institutions.
It complements the activities of national and regional development
insurance through co-insurance and reinsurance agreements with these
institutions, bilateral exchanges of information, and its membership in
the Berne Union. MIGA issues guarantees against noncommercial risks for
investments in its developing member countries. MIGA guarantees cover
the following risks: currency transfer, expropriation, war and civil
disturbance and breach of contract by a host government.

Since its inception in 1988, MIGA has issued nearly 800 guarantees worth
more than \$14.7 billion for projects in 91 developing countries. MIGA
is committed to promoting socially, economically, and environmentally
sustainable projects that are above all, developmentally responsible.
The agency mobilizes additional investment coverage through its
Cooperative Underwriting Program (CUP), encouraging private sector
insurers into transactions they would not have otherwise undertaken, and
helping the agency serve more clients. Please visit
[http://www.miga.org](http://www.miga.org/) for more information.

## Web Resources [**Return to top**](#ch7)

**U. S. Government web resources:**

Overseas Private Investment Corporation
[http://www.opic.gov](http://www.opic.gov/)

Export-Import Bank of the United States
[http://www.exim.gov](http://www.exim.gov/)

Country Limitation Schedule:
<http://www.exim.gov/tools/country/country_limits.html>

U.S. Trade and Development Agency
[http://www.tda.gov](http://www.tda.gov/)

Small Business Administration Office of International Trade
<http://www.sba.gov/oit/>

\$A Commodity Credit Corporation
[http://www.fsa.\$a.gov/ccc/default.htm](http://www.fsa.usda.gov/ccc/default.htm)

U.S. Agency for International Development
[http://www.usaid.gov](http://www.usaid.gov/)

**Multilateral Development Bank web resources:**

Asian Development Bank
[http://www.adbindia.org](http://www.adbindia.org/)\
The World Bank [http:/www.worldbank.org](http://www.worldbank.org/)

Multilateral Investment Guarantee Agency
[http://www.miga.org](http://www.miga.org/)

International finance Corporation
[http://www.ifc.org](http://www.ifc.org/)

#### State Bank of India and associates

State Bank of Bikaner and Jaipur (SBBJ)
[http://www.sbbjbank.com](http://www.sbbjbank.com/)

State Bank of Hyderabad (SBH)
[http://www.sbhyd.com](http://www.sbhyd.com/)

State Bank of India (SBI) )
[http://www.sbi.co.in](http://www.sbi.co.in/)

**Nationalized banks**

Bank of India) [http://www.bankofindia.com](http://www.bankofindia.com/)

Bank of Maharashtra)
[http://www.marashtrabank.com](http://www.marashtrabank.com/)

Central Bank of India)
[http://www.centralbankofindia.co.in](http://www.centralbankofindia.co.in/)

Corporation Bank [http://www.corpbank.com](http://www.corpbank.com/)

Indian Bank
[http://www.centralbankofindia.co.in](http://www.centralbankofindia.co.in/)

Indian Overseas Bank
[http://www.india-bank.com](http://www.india-bank.com/)

Oriental Bank of Commerce [http://www.iob.com](http://www.iob.com/)

United Bank of India [http://www.obc.com](http://www.obc.com/)

Canara Bank <http://www.canbankindia.com/>

Syndicate Bank <http://www.syndicatebank.com/>

**Financial Institutions**

Credit Guarantee Fund Trust for Small Industries (CGTSI)
[http://www.cgtsi.org.in](http://www.cgtsi.org.in/)

Economic Development Corporation Limited, Goa --
[http://www.edc-goa.com](http://www.edc-goa.com/)

Export-Import Bank of India --
[http://www.eximbankindia.com](http://www.eximbankindia.com/)

Himachal Pradesh Financial Corporation (HPFC) -
[http://hpfc.nic.in](http://hpfc.nic.in/)

Indian Renewable Energy Development Agency Limited (IREDA) -
[http://ireda.nic.in](http://ireda.nic.in/)

Industrial Development Bank of India (IDBI) --
[http://www.idbi.com](http://www.idbi.com/)

Industrial Investment Bank of India Limited (IIBI) --
[http://www.iibiltd.com](http://www.iibiltd.com/)

Power Finance Corporation Limited --
[http://www.pfcindia.com](http://www.pfcindia.com/)

#### Insurance Companies

Agriculture Insurance Company of India Limited
<http://aicofindia.nic.in/>

Export Credit Guarantee Corporation of India Limited (ECGC)
<https://www.ecgcindia.com/Portal/Welcome.aspx>

Insurance Regulatory and Development Authority
<http://www.irdaindia.org/>

Life Insurance Corporation of India (LIC) <http://www.licindia.com/>

Oriental Insurance Company Limited (OICL)
<http://orientalinsurance.nic.in/>

SBI Life Insurance Company Limited (SBI LIFE)
<http://www.sbilife.co.in/>

#### Securities and Exchanges

Securities and Exchange Board of India <http://www.sebi.gov.in/>

Inter-connected Stock Exchange of India Limited (ISE)
<http://www.iseindia.com/>

National Securities Depository Limited (NSDL) <http://www.nsdl.co.in/>

National Stock Exchange (NSE), India <http://www.nse-india.com/>

Stock Exchange, Kolkata <http://www.cse-india.com/>

Stock Exchange, Mumbai (BSE) <http://www.bseindia.com/>

#### Others [**http://india.gov.in/citizen/nationalisedbank.php**](http://india.gov.in/citizen/nationalisedbank.php)

[Return to table of
contents](#doing-business-in-india-a-country-commercial-guide-for-u.s.-companies)

[[]{#ch8 .anchor}Return to table of
contents](#doing-business-in-india-a-country-commercial-guide-for-u.s.-companies)

# Chapter 8: Business Travel

-   [Business Customs](#business-customs-return-to-top)

-   [Travel Advisory](#travel-advisory-return-to-top)

-   [Visa Requirements](#visa-requirements-return-to-top)

-   [Telecommunications](#telecommunications-return-to-top)

-   [Transportation](#transportation-return-to-top)

-   [Language](#language-return-to-top)

-   [Health](#health-return-to-top)

-   [Local Time, Business Hours and
    Holidays](#local-time-business-hours-and-holidays-return-to-top)

-   [Temporary Entry of Materials and Personal
    Belongings](#temporary-entry-of-materials-and-personal-belongings-return-to-top)

-   [Web Resources](#web-resources-return-to-top-4)

## Business Customs [**Return to top**](#ch8)

One of the most striking features about India is the size and diversity
of the country. Given its vastness and variety, there is no single way
to understand India. The population of India is more than 1 billion,
which makes it the second most populous country in the world \[after
China\]. There is a wide urban-rural divide in India. Indian society is
primarily agrarian. More than 70 percent of India\'s population lives in
villages, and subsists on agriculture. However, the contribution of
agriculture is only 23 percent.

The standard six-day working week is Monday through Friday, 9:30 a.m. to
5:30 p.m., with a half-day on Saturday. However, the trend in the
corporate sector is to work a five-day week. Central Government offices
are closed on Saturdays. Banking hours are 10:00 a.m. and 2:00 p.m. on
weekdays and 10:00 a.m. to 12:00 noon on Saturdays. In Mumbai, however,
banks are open weekdays from 11:00 a.m. to 3:00 p.m., Saturdays from
11:00 a.m. to 1:00 p.m. In major metropolitan cities, several foreign
and Indian-owned banks are beginning to provide 24-hour banking
services. Stock exchange trading hours in Mumbai is 10:00 a.m. to 3:30
p.m., Monday to Friday.

India is a secular, democratic nation without a state religion. The
Indian Constitution protects the freedom of religion, although some 80
percent of the population consider themselves living in accordance with
Hindu beliefs. It is considered polite in India to inquire about dietary
preferences, since Hindus abstain from beef, Muslims abstain from pork,
and Indians of many religions practice vegetarianism. U.S. visitors can
learn more about social attitudes and dietary preferences by watching
Indian movies and reading guidebooks and novels. English-language
guidebooks include:

South Asia. Lonely Planet Guides, 1993 (and later editions)

Fodor\'s India. Fodor, 1994 (and later)

The South Asia Handbook, 1997.

Indian authors writing in English provide U.S. reader's insights into
life and society in India. Some recent novels and travel narratives
include:

Naipaul, V.S., A Million Mutinies Now, 1990.

Seth, Vikram, A Suitable Boy, 1993.

Mehta, Geeta, Karma Cola, 1995.

Mistry, Rohinton, A Fine Balance, 1996.

Mehta, Geeta, Snakes and Ladders, 1997.

## Travel Advisory [**Return to top**](#ch8)

**COUNTRY DESCRIPTION:** India is the world\'s largest democratic
republic.  It is a country with a very diverse population, geography and
climate.  Tourist facilities varying in degree of comfort and amenity
are widely available in the major population centers and main tourist
areas.  See the Department of State Background Notes on India at
<http://www.state.gov/r/pa/ei/bgn> for additional information. 

**SAFETY AND SECURITY:** Some terrorist groups are active in India. In
recent years, there have been occasional terrorist bombing incidents in
various parts of India. These bomb blasts have occurred in public places
as well as on public transportation, such as trains and buses, in
markets and in other public areas, resulting in deaths or injuries. 
There were two significant terrorist incidents in northern India in July
2005, and coordinated bombings in Delhi in October 2005.  On July 5,
suspected Islamic militants attacked a disputed religious site at
Ayodhya in the state of Uttar Pradesh, resulting in the deaths of five
persons, and on July 28, unidentified terrorists exploded a bomb on a
train in Uttar Pradesh bound for New Delhi, killing thirteen
passengers.  In October 2004, over 35 people were killed in separate
bombing incidents in a train station and market in Dimapur, capital of
the Northeastern state of Nagaland.  In 2003, terrorists set off several
bombs in Mumbai (Bombay), including on public transportation, at a
public market and at the Gateway of India, a popular tourist
destination, leaving over 50 people dead and 160 injured.  The motive
for these blasts has not been clearly established.  U.S. citizens were
not specifically targeted or injured in any of these attacks. However,
U.S. citizens have been killed and injured during past acts of
indiscriminate violence. Anti-Western terrorist groups, some of which
are on the U.S. government\'s list of foreign terrorist organizations,
are believed to be active in India. Therefore, U.S. citizens should
exercise particular vigilance when in the vicinity of government
installations, visiting tourist sites, or attending public events
throughout India. In particular, the disputed region of Kashmir in the
state of Jammu and Kashmir has experienced an inordinate number of
terrorist incidents, including several bombings in the capital city of
Srinagar. 

Visitors should exercise caution when swimming in open waters along the
Indian coastline, particularly during the monsoon season.  Every year,
several people in Goa, Mumbai and other areas drown due to the unusually
strong undertow.  It is important for visitors to heed warnings posted
or advised at beaches and avoid swimming altogether during the monsoon
season.

Demonstrations can occur spontaneously and pose risks to travelers\'
personal safety and disrupt transportation systems and city services. 
In response to such events, Indian authorities occasionally impose
curfews and/or restrict travel.  Political rallies and demonstrations in
India have the potential for violence, especially immediately preceding
and following elections. U.S. citizens are urged to avoid demonstrations
and rallies.  In addition, religious and inter-caste violence
occasionally occurs unpredictably.  In early 2002, violent clashes
between Hindus and Muslims in Gujarat resulted in at least 950 deaths
according to official figures.  While such violence rarely targets
foreigners, mobs have attacked Indian Christian workers.

Missionary activity has aroused strong reactions in some areas \--
usually rural \-- and in January 1999, a mob murdered an Australian
missionary and his son in the eastern state of Orissa.  In January 2003,
a visiting U.S. citizen was attacked in Kerala by Hindu activists who
accused him of preaching to the local community.  The principal risk for
foreigners is that they could become inadvertent victims.  A similar
incident occurred in June 2005, when residents of a Mumbai suburb
attacked three American tourists participating in a Christian prayer
meeting.

U.S. citizens should read local newspapers and contact the U.S. Embassy
or the nearest U.S. Consulate for further information about the current
situation in areas where they wish to travel.

During the Dassera and the Diwali festivals, U.S.-citizen travelers to
Calcutta and Eastern India should exercise additional caution.  Large
and sometimes unruly crowds gather on these holidays, especially in the
immediate vicinity of the Pandals (elaborately decorated temporary
structures).  Such concentrations heighten the risk of petty theft,
accidental injury, groping, and crowd disturbances.  Transportation,
even for emergency purposes, is more difficult during the holiday
season, and travelers may become disoriented amidst large, flowing
crowds.  The United States Consulate General in Calcutta is available to
assist U.S. citizens in emergencies, should they arise.

**AREAS OF INSTABILITY:**

**Jammu and Kashmir:** The Department of State recommends that U.S.
citizens avoid travel to the state of Jammu and Kashmir, with the
exception of visits to the Ladakh region and its capital, Leh.  A number
of terrorist groups operate in the state, and security forces are active
throughout the region, particularly along the Line of Control (LOC)
separating Indian and Pakistani-controlled Kashmir, and are visible in
the primary tourist destinations in the Kashmir Valley -- Srinagar,
Gulmarg and Pahalgam.

Since 1989, as many as 60,000 people (terrorists, security forces, and
civilians) have been killed in the Kashmir conflict, including
approximately 700 civilians in 2004 alone.  Many terrorist incidents
take place in the state's summer capital of Srinagar, but the majority
occurs in rural areas. Foreigners are particularly visible, vulnerable,
and definitely at risk. 

Occasionally, even the Ladakh region of the state has been affected by
terrorist violence, but incidents there are rare.  The last such case
was in 2000, when terrorists in Ladakh\'s Zanskar region killed a German
tourist.  The Indian government prohibits foreign tourists from visiting
the Kargil area of Ladakh along the LOC.  U.S. Government employees are
prohibited from traveling to the state of Jammu and Kashmir without
permission from the U.S. Embassy in New Delhi.

In 1999, the terrorist organization Harakat-ul Mujahideen issued a ban
on U.S. citizens, including tourists, visiting Kashmir, but has not
followed up on this threat.  In 1995, the terrorist organization Al
Faran kidnapped six Western tourists, including two U.S. citizens, who
were trekking in Kashmir valley.  One of the hostages was brutally
murdered, another escaped, and the other four \-- including one U.S.
citizen \-- have never been found.  Srinagar has also been the site of a
great deal of violence, including car bombings, market bombings,
hand-grenade attacks that miss their targets and kill or injure innocent
bystanders, and deaths resulting from improvised (remote-controlled)
explosive devices (IEDs).  In the early to mid-1990s, several tourists,
including at least one U.S. citizen, were fatally shot or wounded in
Srinagar.  The 2002 state elections were marred by multiple terrorist
attacks that killed some 800 people, a large percentage of whom were
innocent civilians.  Some terrorist violence also marred the national
parliamentary polls in April/May 2004.

**India-Pakistan Border:** The State Department recommends that U.S.
citizens avoid travel to border areas between India and Pakistan,
including within the states of Gujarat, Punjab, and Rajasthan, and the
entire state of Jammu and Kashmir.  A ceasefire along the Line of
Control (LOC) in Kashmir began on November 26, 2003 and a dialogue
between the two countries aimed at easing tensions continues.  Both
India and Pakistan maintain a strong military presence on both sides of
the LOC.  The only official India-Pakistan border crossing point is in
the state of Punjab between Atari, India, and Wagah, Pakistan.  A
Pakistani visa is required to enter Pakistan.  The border crossing is
currently open. However, travelers are advised to confirm the current
status of the border crossing prior to commencing travel.

Both India and Pakistan claim an area of the Karakoram mountain range
that includes the Siachen glacier.  The ceasefire in Kashmir that took
effect in November 2003 has also been in effect on the glacier. U.S.
citizens traveling to or climbing peaks in the disputed areas face
significant risks.  The disputed area includes the following peaks: Rimo
Peak; Apsarasas I, II, and III; Tegam Kangri I, II and III; Suingri
Kangri; Ghiant I and II; Indira Col; and, Sia Kangri.

Travelers may check with the U.S. Embassy in New Delhi for information
on current conditions.

**Northeast States:** Sporadic incidents of violence by ethnic insurgent
groups, including the bombing of buses and trains, are reported from
parts of Assam, Manipur, Nagaland, Tripura, and Meghalaya, most recently
in October of 2004 when over 35 people were killed in separate bombing
incidents in a train station and market in Dimapur, capital of the state
of Nagaland. While U.S. citizens have not been specifically targeted,
visitors are cautioned not to travel outside major cities at night.
Security laws are in force, and the central government has deployed
security personnel to several Northeast states. Travelers may check with
the U.S. Consulate in Calcutta for information on current conditions.
(Please see the section on Registration/Embassy and Consulate Locations
below.)

**East Central and Southern India:** Left-wing Maoist extremist groups
called \"Naxalites\" are active in the region and U.S. citizens should
exercise appropriate caution.  The Naxalites have a long history of
conflict with state and national authorities, including attacks on
police and government officials.  The Naxalites have not specifically
targeted U.S. citizens, but have attacked symbolic targets that have
included American companies. Groups claiming to be Naxalites have
blackmailed American organizations, and in one instance a small bomb
that exploded at an American corporation\'s production site was thought
to have been part of an extortion plot.  Two Naxalite groups, The Maoist
Communist Center of India (MCCI), and the People's War Group (PWG) were
added to the list of "Other Terrorist Organizations" in the U.S. State
Department Publication, "Patterns of Global Terrorism 2003."  They
merged in October 2004 into one organization under one leadership, and
regional affiliates are active in the states of Andhra Pradesh, Orissa,
Chhattisgarh, Bihar and West Bengal.

Restricted Area: Advance permission is required from the Indian
Government (from Indian diplomatic missions abroad) or for U.S. citizens
currently in India, from the Ministry of Home Affairs (MHA) in New
Delhi, to visit the states of Mizoram, Manipur, Nagaland, Arunachal
Pradesh, Sikkim, parts of Kulu district and the Spiti district of
Himachal Pradesh, border areas of Jammu and Kashmir, some areas of
Uttaranchal, the area west of National Highway No. 15 running from
Ganganagar to Sanchar in Rajasthan, the Andaman and Nicobar Islands, and
the Union Territory of the Laccadives Islands (Lakshadweep).  In
addition, U.S. citizens who visit the Tibetan Colony in Mundgod,
Karnataka, must obtain a permit from MHA before visiting. U.S. citizens
may contact the MHA at: +91-11-2469-3334 or 2301-3054 (begin by dialing
011 if calling from the United States).  Tourists should exercise
caution while visiting Mahabillipuram. The Indira Gandhi Atomic Research
Center, Kalpakkam, is located directly adjacent to the site and is not
clearly marked as a restricted and dangerous area.

For the latest security information, Americans traveling abroad should
regularly monitor the Department's Internet web site at
[http://travel.state.gov](http://travel.state.gov/index.html) where the
current [Travel Warnings and Public
Announcements](http://travel.state.gov/travel/cis_pa_tw/cis_pa_tw_1168.html),
including the [Worldwide Caution Public
Announcement](http://travel.state.gov/travel/cis_pa_tw/pa/pa_1161.html),
can be found.

Up-to-date information on safety and security can also be obtained by
calling 1-888-407-4747 toll free in the U.S., or for callers outside the
U.S. and Canada, a regular toll-line at 1-202-501-4444.  These numbers
are available from 8:00 a.m. to 8:00 p.m. Eastern Time, Monday through
Friday (except U.S. federal holidays).

The Department of State urges American citizens to take responsibility
for their own personal security while traveling overseas.  For general
information about appropriate measures travelers can take to protect
themselves in an overseas environment, see the Department of State's
pamphlet [A Safe Trip
Abroad](http://travel.state.gov/travel/tips/safety/safety_1747.html) at
<http://travel.state.gov/travel/tips/safety/safety_1747.html>.

**CRIME:** Petty crime, especially theft of personal property, is
common, particularly on trains or buses throughout the country. 
Pickpockets can be very adept, and women have reported having their bags
snatched, purse-straps cut or the bottom of their purses slit without
their knowledge.  Theft of U.S. passports is quite common, particularly
in major tourist areas and on overnight trains.  Violent crime,
especially directed against foreigners, has traditionally been at
relatively low levels, although in recent years there has been an
apparent increase in violent attacks directed against foreign tourists,
including robbery, murder, and sexual assault.  These attacks have
mainly been directed at women traveling alone, but men have also been
victimized.  U.S. citizens, particularly women, are cautioned not to
travel alone in India.  So-called "Eve Teasing" or verbal and sometimes
physical harassment of single Indian women is not unusual.  There have
been more reports in the past year of foreign women being harassed in
this manner.  Because U.S. citizens\' purchasing power is comparatively
large relative to that of the general population, travelers also should
always exercise modesty and caution in their financial dealings in India
to reduce the chance of being a target for robbery or other serious
crime.  Gangs and criminal elements operate in several major cities in
India and have sometimes targeted unsuspecting businessmen for ransom. 
Visitors are strongly cautioned not to travel alone and to be aware of
their environment and belongings, especially when taking night trains or
buses.

Major airports, train stations and tourist sites are often used by touts
(confidence men) and scam artists looking to prey on visitors, often by
creating a distraction.  Taxi drivers and others, including train
porters, may solicit travelers with \"come-on\" offers of cheap
transportation and/or hotels.  Travelers accepting such offers have
often found themselves the victims of scams, including offers to assist
with "necessary" transfers to the domestic airport, disproportionately
expensive hotel rooms, unwanted \"tours\" to houseboats in Kashmir,
unwelcome \"purchases,\" and even threats when the tourists try to
decline to pay.

Visitors to Mumbai should be extremely vigilant when traveling along the
roads leading from the domestic and international airports.  Locals and
foreigners alike, including American citizens, have reported being
robbed while traveling along these roads.  In most cases, the victim
took a taxi whose driver was complicit in the robbery.  In other cases,
men traveling on motorcycles stopped the traveler's vehicle or taxi
while en route from the airport, demanding money and/or the traveler's
luggage before driving off.

There are several ways a traveler arriving at a major airport in India
can avoid these incidents:  (1) While it may be common in other
countries, travelers in India should never board a taxi holding existing
passengers, nor should the traveler allow the taxi driver to pick up
additional passengers while en route.  If a taxi driver tells you that
the other passenger is a personal friend or family member, exit the taxi
and seek another taxi before departing the airport grounds.  (2)  Many
hotels offer free and secure transportation to/from the airport.  Take
advantage of this service when possible.  (3)  If traveling for
business, ask your company to arrange a private car to transport you
between the airport and your hotel.  (4)  If you must travel to/from the
airport by taxi, arrange a fixed-price taxi with one of the private taxi
services that have offices inside the airport terminal.  Travelers are
encouraged to ask for the taxi's registration number and compare it with
the number of the actual vehicle being used.  The murder and robbery of
an Australian woman traveling alone in a pre-paid taxi contracted at the
New Delhi airport in early 2004 demonstrates the need to exercise
caution and to be sure that such taxis are properly licensed.

Travelers should also exercise care when hiring transportation and/or
guides and use only well-known travel agents to book trips.  Some scam
artists have lured travelers by displaying their name on a sign when
they leave the airport.  Another popular scam is to drop money or to
squirt something on the clothing of an unsuspecting traveler and during
the distraction to rob them of their valuables.  Individual tourists
have also been given drugged drinks or tainted food to make them more
vulnerable to theft, particularly at train stations.  Even food or drink
purchased in front of the traveler from a canteen or vendor could be
tainted.  To protect against robbery of personal belongings, it is best
not to accept food or drink from strangers.

Some vendors sell rugs or other expensive items that may not be of the
quality promised.  Travelers should deal only with reputable businesses
and should not give their credit cards or money unless they are certain
that goods being shipped to them are the goods they purchased.  If a
deal sounds too good to be true, it is best avoided.  Most Indian states
have official tourism bureaus set up to handle travelers' complaints. 
The internet addresses for these offices are available at
<http://www.tourismofindia.com/foot/links.htm>.

Travelers should be aware of a number of other scams that have been
perpetrated against foreign travelers, particularly in Goa and the
Jaipur area.  The scams generally target younger travelers and involve
suggestions that money can be made by privately transporting gems or
gold (both of which can result in arrest) or by taking delivery abroad
of expensive carpets, supposedly while avoiding customs duties.  The
scam artists describe profits that can be made upon delivery of the
goods. 

Most plans require that the traveler first put up a \"deposit\" to
either show \"sincerity\" or as a \"down payment\" or as the \"wholesale
cost.\"  In other cases, the scam artists stage phone calls to the
traveler from persons posing as "customs agents," claiming that the
package has been intercepted and that the traveler must pay an
exorbitant customs fee in order to avoid arrest.  All travelers are
strongly cautioned that the plans invariably result in the traveler
being fleeced.  The \"gems\" or \"gold\" are always fake, and if they
were real, the traveler could be subject to arrest.  Such plans often
pull the unsuspecting traveler in over the course of several days and
begin with a new \"friend\" who offers to show the traveler the sights
so that the \"friend can practice his English.\"  Offers of cheap
lodgings and meals also can place the traveler in the physical custody
of the scam artist and can leave the traveler at the mercy of threats or
even physical coercion.

While violent crime involving U.S. citizens is relatively rare in India,
in recent years two U.S. citizens were murdered in the
Haridwar/Rishikesh region of Uttaranchal state.  Several other
foreigners have also been attacked in Uttaranchal. In addition, an
American citizen was found murdered in 2003 on the Ahmedabad-Mumbai
highway.  Crime and violence have also increased in the popular hiking
and rafting destination of Kulu/Manali, where the number of foreign
backpackers and tourists has been growing and where drugs are readily
available, but can occur in any part of India. Foreigners are the
targets of criminal activities primarily because of the
disproportionately large sums of money they are thought to carry.

U.S. citizens should be aware that there have been unconfirmed reports
of inappropriate sexual behavior by a prominent local religious leader
at an ashram or religious retreat located in Andhra Pradesh.  Most of
the reports indicate that the subjects of these approaches have been
young male devotees, including a number of U.S. citizens.

**INFORMATION FOR VICTIMS OF CRIME:**  If you are the victim of a crime
while overseas, in addition to reporting to local police, please contact
the nearest U.S. Embassy or Consulate for assistance.  The
Embassy/Consulate staff can, for example, assist you to find appropriate
medical care, contact family members or friends and explain how funds
could be transferred.  Although the investigation and prosecution of the
crime is solely the responsibility of local authorities, consular
officers can help you to understand the local criminal justice process
and to find an attorney if needed.  Victims of a crime in India,
including loss or theft of a passport, should obtain a copy of the
police report (called an "FIR" or "First Incident Report") from local
police at the time of reporting the incident.  A copy of this report is
helpful for insurance purposes in replacing lost valuables, and is
required by the Indian Government in order to obtain an exit visa to
leave India in the event of a lost or stolen passport. See our
information on Victims of Crime at
<http://travel.state.gov/travel/tips/emergencies/emergencies_1748.html>

## Visa Requirements [**Return to top**](#ch8)

**ENTRY/EXIT REQUIREMENTS:** U.S. citizens require a passport and visa
to enter and exit India for any purpose.  Visitors, including those on
official U.S. government business, must obtain visas at an Indian
Embassy or Consulate abroad prior to entering the country, as there are
no provisions for visas upon arrival.  Those arriving without a visa are
subject to immediate deportation.  The U.S. Embassy and Consulates in
India are unable to assist when U.S. citizens arrive without visas. 
Each visitor should carry photocopies of the face page of the traveler's
U.S. passport and the page which contains the Indian visa in order to
facilitate obtaining new U.S. passports from the U.S. Embassy or
Consulate and exit visas from the Indian government, in the event of
theft or loss of the passport.

Foreign citizens whose primary purpose of travel is to participate in
religious activities should obtain a missionary visa rather than a
tourist visa.  Indian immigration authorities have deported American
citizens who were conducting religious activities while holding a
tourist visa.

Foreign citizens who visit India to study, do research, work or act as
missionaries, as well as all travelers planning to stay more than 180
days are required to register within 14 days of arrival with the
Foreigners Regional Registration Office where they will be staying. FRRO
maintains offices in New Delhi, Mumbai (Bombay), Chennai (Madras),
Kolkata (Calcutta), and Amritsar.  In smaller cities and towns, the
local police headquarters will normally perform this function. The
address and telephone number of each major FRRO office can be found at
<http://www.airportsindia.org.in/aai/immigration/immigration.htm>. 
General information regarding Indian visa and immigration rules can be
found at the Indian Ministry of Home Affairs website for its Bureau of
Immigration at
[http://www.immigrationindia.nic.in](http://www.immigrationindia.nic.in/)
.

For the most current information on entry and exit requirements, please
contact the Embassy of India at 2536 Massachusetts Avenue NW,
Washington, D.C. 20008, telephone (202) 939-9849 or 939-9806 or the
Indian Consulates in Chicago, New York, San Francisco, or Houston or
[http://www.indianembassy.org](http://www.indianembassy.org/).  Outside
the United States, inquiries should be made at the nearest Indian
embassy or consulate.  A list of Indian consulates and embassies can be
found at <http://passport.nic.in/missions.htm>.  See our [Foreign Entry
Requirements
brochure](http://travel.state.gov/travel/tips/brochures/brochures_1229.html)
for more information on India and other countries.

**Dual Nationality:** India recently passed a bill that allows persons
of Indian origin in eight countries, including the United States, to
apply for a form of dual citizenship known as "Overseas Citizens" which
does not confer political rights. Although the regulations have not yet
been formalized, persons who have dual nationality as citizens of both
India and the U.S. are subject to all Indian laws. Moreover, dual
nationals also may be subject to other laws and regulations that impose
special obligations on Indian citizens, such as taxation. In some
instances such as arrest, dual nationality may hamper U.S. Government
efforts to provide assistance abroad. For additional information, please
see the Bureau of Consular Affairs home page on the Internet at
[http://travel.state.gov](http://travel.state.gov/) for our Dual
Nationality flyer.

**Consular access:** U.S. citizens are encouraged to carry a copy of
their U.S. passports with them at all times, so that proof of identity
and U.S. citizenship are readily available if they are questioned by
local officials. In accordance with the Vienna Convention on Consular
Relations, Indian authorities must allow U.S. citizens to contact a U.S.
Consular Officer if arrested or detained in India.

**Children\'s issues:** For information on international adoption of
children and international parental child abduction, please refer to the
Internet site at <http://travel.state.gov/children's_issues.html> or
telephone 1-888-407-4747.

**Registration/embassy and consulate locations:** Americans living in or
visiting India are encouraged to register at the U.S. Embassy in New
Delhi or at one of the U.S. consulates in India. They may also obtain
updated information on travel and security in India and request a copy
of the booklet "Guidelines for American Travelers in India."

\-- The U.S. Embassy in New Delhi is located at Shantipath, Chanakyapuri
110021; telephone (91)(11)2419-8000; fax (91)(11)2419-0017. The
Embassy\'s Internet home page address is
<http://usembassy.state.gov/delhi/html>

\-- The U.S. Consulate General in Mumbai (Bombay) is located at Lincoln
House, 78 Bhulabhai Desai Road, 400026, telephone (91)(22) 2363-3611;
fax (91)(22) 2363-0350. Internet home page address is
[http://mumbai.usconsulate.gov](http://mumbai.usconsulate.gov/)

\-- The U.S. Consulate General in Calcutta (now often called Kolkata) is
at 5/1 Ho Chi Minh Sarani, 700071; telephone (91)(33) 2282-3611 through
2282-3615; fax (91)(33)2282-2335. The Internet home page address is
[http://calcutta.usconsulate.gov](http://calcutta.usconsulate.gov/)

\-- The U.S. Consulate General in Chennai (Madras) is at 220 Anna Salai,
Gemini Circle,600006, telephone (91) (44) 2811-2000; fax
(91)(44)2811-2027. The Internet home page address is
[http://chennai.usconsulate.gov](http://chennai.usconsulate.gov/)

U.S. Companies that require travel of foreign businesspersons to the
United States should be advised that security options are handled via an
interagency process. Visa applicants should go to the following links.

State Department Visa Website: <http://travel.state.gov/visa/index.html>

United States Visas.gov: <http://www.unitedstatesvisas.gov/>

United States Embassy, New Delhi, India -Consular Section Website:
<http://newdelhi.usembassy.gov/nonimmigrant_visas.html>

Indian Embassy's Consular section website:
<http://www.indianembassy.org/New_Template/passport&visa.asp>

## Telecommunications [**Return to top**](#ch8)

Telecommunications is one of the prime support services needed for rapid
growth and modernization of various sectors of the economy. It has
become especially important in recent years because of enormous growth
of Information Technology (IT) and its significant impact on the rest of
the economy. India is perceived to have a special comparative advantage
in IT and in IT-enabled services.

Telephone, telex, facsimile and electronic mail (Internet) services are
available in India. The Indian telecommunications sector is equipped to
handle approximately 48 million lines. The telecommunications network is
growing at an annual rate of 20 percent.

India has more post offices than any country in the world. The country
is divided into 19 postal circles under the Postal Services Board and is
supported by a network of more than 152,792 post offices with over
136,000 of the offices in rural areas. India is a member of Universal
Postal Union (UPU), the Asian Postal Union (APPU), and the Conference of
Commonwealth Postal Administration (CCPA). An International Speed Post
Service operated by public-sector postal authorities connects 39
countries. Major international courier companies are also well
represented in India.

## Transportation [**Return to top**](#ch8)

India is the 7th largest country in the world and the second largest in
Asia with a landmass of 3.29 million square km and a population of over
one billion. The need for adequate transport infrastructure is therefore
vital. The needs of an increasingly urban population, coupled with
significant increases in industrial, trade, tourism, and commercial
demands have increased the already crucial role of the aviation sector.
The Country's official international Air carrier is [Air
India](http://www.airindia.com/). India's major domestic airline,
[Indian Airlines](http://indian-airlines.nic.in/), also operates on
certain international routes. India is also gradually moving towards an
"open skies" policy. The liberalization of the Indian civil aviation
market should bring rapid increases in aviation capacity and
improvements in service quality to the country. Indian private airlines
[Jet Airways](http://www.jetairways.com/) and [Air
Sahara](http://www.airsahara.net/) are already on major trunk routes.
India has bilateral air-service agreements with nearly 60 countries and
about 42 foreign airlines operate nearly 260 services to and from India.

Public transportation is available seven days a week in India. The most
developed intra-city network is available in Mumbai with an elaborate
railway and bus network in addition to private taxicabs and
auto-rickshaws in the suburbs. Calcutta, Chennai and Delhi are among the
other major cities with public transportation facilities.

The Indian Railways is virtually the lifeline of the country, catering
to both freight and passenger traffic on a gigantic scale. Everyday, on
an average, more than 8,350 trains ply some, 50,000 miles (80,000
kilometers) of running track, carrying over 12.5 million passengers.
Freight trains hauls goods in excess of 1.3 million tons. The Indian
railways employ about 1.6 million people. It is Asia's largest, and the
world's fourth-largest railway system under a single management.

The central government is responsible for the upkeep and development of
an elaborate national highway system and state governments maintain
state highways, district roads and rural roads. Road transport in the
country is fairly well developed, with nearly 60 state
surface-mass-transportation systems deploying a fleet of about 100,000
vehicles. Freight traffic on the roads is also fairly high. The private
sector almost entirely prefers using roads to using the railways.

India has a fairly well developed maritime transportation industry, with
the sixteenth-largest fleet in the world. The growth of coastal shipping
was, in the past, hindered by poor port or landing infrastructure.
However, with the advent of economic liberalization, the industry is now
growing and the government is ambitiously developing coastal shipping.
India currently has 12 major ports and 184 minor /intermediate ports
spread across the vast coastline of 7517 kms, including the technically
up-to-date ports in Chennai and Mumbai. They handle almost 90 percent of
India\'s total foreign trade. The major ports in Mumbai, Chennai, and
Calcutta are strategically located near the major east-west shipping
lanes.

**TRAFFIC SAFETY AND ROAD CONDITIONS:** While in a foreign country, U.S.
citizens may encounter road conditions that differ significantly from
those in the United States.  The information below concerning India is
provided for general reference only, and may not be totally accurate in
a particular location or circumstance.

Travel by road in India is dangerous.  A number of U.S. citizens have
suffered fatal traffic accidents in recent years.  Travel at night is
particularly hazardous. Buses, patronized by hundreds of millions of
Indians, are convenient in that they serve almost every city of any
size.  However, they are usually driven fast, recklessly, and without
consideration for official rules of the road.  Accidents are quite
common.  Trains are somewhat safer than buses, but train accidents still
occur more frequently than in developed countries.

In order to drive in India, one must have either a valid Indian drivers'
license or a valid international drivers' license.  Because of difficult
road and traffic conditions, many Americans who visit India choose to
hire a local driver.

On Indian roads, the safest driving policy is to assume that other
drivers will not respond to a traffic situation in the same way you
would in the United States.  For instance, buses and trucks often run
red lights and merge directly into traffic at yield points and traffic
circles.  Cars, auto-rickshaws, bicycles and pedestrians behave only
slightly more cautiously.  Indian drivers tend to look only ahead and
often consider themselves responsible only for traffic in front of them,
not behind or to the side.  Frequent use of one\'s horn or flashing of
headlights to announce one's presence is both customary and wise.  It is
usually preferable to have a licensed experienced driver who has a
\"feel\" for road and driving conditions.

Outside major cities, main roads and other roads are poorly maintained
and congested.  Even main roads often have only two lanes, with poor
visibility and inadequate warning markers.  On the few divided highways
one can expect to meet local transportation traveling in the wrong
direction, often without any lights on.  Heavy traffic is the norm and
includes (but is not limited to) overloaded trucks and buses, scooters,
pedestrians, bullock and camel carts, horse or elephant riders en route
to weddings, and free-roaming livestock.  Traffic in India moves on the
left. It is important to be alert while crossing streets and
intersections, especially after dark as traffic is coming in the "wrong"
direction (i.e., from the left).  Travelers should remember to use
seatbelts in both rear and front seats where available, and to ask their
drivers to maintain a safe speed.\
If a driver hits a pedestrian or a cow, the vehicle and its occupants
are at risk of being attacked by pedestrians.  Such attacks pose
significant risk of injury or death to the vehicle\'s occupants or at
least of incineration of the vehicle.  It can thus be unsafe to remain
at the scene of an accident of this nature, and drivers may instead wish
to seek out the nearest police station. [Please refer to our Road Safety
page for more
information](http://travel.state.gov/travel/tips/safety/safety_1179.html)
at <http://travel.state.gov/travel/tips/safety/safety_1179.html>.  Visit
the website of India's national tourist office at
[http://www.tourismofindia.com](http://www.tourismofindia.com/) for
information concerning Indian driver's permits, vehicle inspection, road
tax and mandatory insurance.

**Emergency Numbers:** The following emergency numbers work in New
Delhi, Mumbai, Chennai and Calcutta:

Police 100\
Fire Brigade 101\
Ambulance 102 (Note that this number often does not work in Calcutta).

**AVIATION SAFETY OVERSIGHT:**  The U.S. Federal Aviation Administration
(FAA) has assessed the Government of India as being in compliance with
ICAO international aviation safety standards for oversight of India's
air carrier operations. For more information, travelers may visit the
FAA's internet web site at <http://www.faa.gov/>.

Civil aircraft have been detained a number of times for deviating from
approved flight plans.  U.S. citizens piloting civil aircraft in India
must file any changes to previous flight plans with the appropriate
Indian authorities and may not over-fly restricted airspace.

**SPECIAL CIRCUMSTANCES:**   In 2003, India passed a bill that allows
persons of Indian origin in sixteen countries (subsequently extended to
almost all countries), including the United States, to apply for a form
of dual citizenship known as "Overseas Citizens of India" (OCI).  The
government recently announced that the process for a person to become an
OCI will be launched on August 15, 2005 or shortly thereafter.  However,
many specific details regarding what rights and obligations apply to a
person who applies for OCI status have yet to be clarified.  Presently,
the Government of India offers a special visa for "Persons of Indian
Origin" (PIO).  It is contemplated that OCI status will be similar to
PIO status.  At present, the PIO card allows a person to enter and exit
the country without a visa for almost any purpose for any period of
time, without the requirement of registering with immigration
authorities.  However, PIOs cannot vote in Indian elections, and are
also subject to other restrictions, such as the ability to own certain
types of real property in India.  The Embassy understands that similar
restrictions may apply to OCIs.  The Indian government has indicated
that a person who applies for OCI status will not be required to take an
oath of allegiance to India.  Accordingly, at this time, it is not clear
whether an OCI would legally be considered a "national" of India. 
Information on how to apply for PIO or OCI status can be found on the
Indian Embassy's website at
<http://www.indianembassy.org/consular/index.htm.>

Any person who is considered to have dual nationality as a citizen of
both India and the U.S is subject to all Indian laws.  Moreover, a dual
national also may be subject to other laws and regulations that impose
special obligations on Indian citizens, such as taxation.  In some
instances such as arrest, dual nationality may hamper U.S. Government
efforts to provide assistance abroad.  Additional general information
about dual nationality is available at
[http://travel.state.gov/travel/cis_pa_tw/cis/cis_1753.html.](http://travel.state.gov/travel/cis_pa_tw/cis/cis_1753.html)

A number of U.S.-citizen men who have come to India to marry Indian
nationals have been arrested and charged with crimes related to dowry
extraction. Many of the charges stem from the U.S. citizen\'s inability
to provide an immigrant visa for his prospective spouse to travel
immediately to the United States.  The courts sometimes order the U.S.
citizen to pay large sums of money to his spouse in exchange for the
dismissal of charges.  The courts normally confiscate the American's
passport, and he must remain in India until the case has been settled. 
There are also cases of U.S.-citizen women of Indian descent whose
families force them against their will into marriages to Indian
nationals.

Foreign visitors planning to engage in religious proselytizing are
required by the 1956 Foreigners Act to have a \"missionary\" visa.  A
1995 Central Government order defines \"inappropriate\" religious
activity to include speaking at religious meetings to which the general
public is invited.  Foreigners with tourist visas who engage in
missionary activity are subject to deportation and possible criminal
prosecution.  The states of Tamil Nadu, Orissa, Arunachal Pradesh, and
Madhya Pradesh have additional legislation regulating conversion from
one religious faith to another.  U.S. citizens intending to engage in
missionary activity may wish to seek legal advice regarding this
legislation.

**CRIMINAL PENALTIES:** While in a foreign country, a U.S. citizen is
subject to that country\'s laws and regulations, which sometimes differ
significantly from those in the United States and may not afford the
protections available to the individual under U.S. law.  For example,
certain comments or gestures towards women or about religion that are
legal in the United States may be considered a criminal violation in
India, subjecting the accused to possible fines or imprisonment.

Penalties for breaking the law can be more severe than in the United
States for similar offenses.  Persons violating Indian laws, even
unknowingly, may be expelled, arrested or imprisoned. Penalties for
possession, use, or trafficking in illegal drugs in India are severe,
and convicted offenders can expect long jail sentences and heavy fines. 
Engaging in illicit sexual conduct with children or using or
disseminating child pornography in a foreign country is a crime,
prosecutable in the United States.   For more information, please refer
to <http://travel.state.gov/travel/cis_pa_tw/cis/cis_1467.html>.

**CHILDREN\'S ISSUES:** For information on international adoption of
children and international parental child abduction, see the Office of
Children's Issues website at
<http://travel.state.gov/family/family_1732.html>.

## Language [**Return to top**](#ch8)

[India](http://en.wikipedia.org/wiki/India) has a diverse list of spoken
[languages](http://en.wikipedia.org/wiki/Language) among different
groups of people. At least 30 different languages and around 2000
[dialects](http://en.wikipedia.org/wiki/Dialects) have been identified.
The [Constitution of
India](http://en.wikipedia.org/wiki/Constitution_of_India) has
stipulated the usage of [Hindi](http://en.wikipedia.org/wiki/Hindi) as
the official language and
[English](http://en.wikipedia.org/wiki/English_language) as the
associate official language for official communication for the national
government. Additionally, it contains a list of 22 scheduled languages.

## Health [**Return to top**](#ch8)

India has a fairly widespread and reasonably well-developed network of
medical facilities, but services are hampered by a shortage of doctors,
midwives, nurses, and laboratory technicians, especially at primary
health centers functioning in rural areas. Government statistics (1999)
show that the number of registered doctors per 100,000 persons is
approximately 50, and that there are more than 15,000 hospitals and
28,000 dispensaries. According to estimates, India has approximately
22,000 primary health centers and 2,600 community health centers.
Private enterprises and trusts operate a well-developed infrastructure
of hospitals and polyclinics in major metropolitan areas and in small
and medium-size towns. These facilities are equipped with modern
equipment and know-how.

**MEDICAL FACILITIES AND HEALTH INFORMATION:** Adequate to excellent
medical care is available in the major population centers, but is
usually very limited or unavailable in rural areas.  Visitors to India
should pay special attention to safe food and water precautions, and
steps the traveler can take to avoid contracting malaria.  Visitors
planning to hike in the mountainous areas of northern India should pay
attention to the risk of altitude illness.

Indian health regulations require all travelers arriving from
Sub-Saharan Africa or other yellow-fever areas to have evidence of
vaccination against yellow fever.  Travelers who do not have such proof
are subject to immediate deportation or a six-day detention in the
yellow-fever quarantine center.  U.S. citizens who transit through any
part of sub-Saharan Africa, even for one day, are advised to carry proof
of yellow fever immunization.

Information on vaccinations and other health precautions, such as safe
food and water precautions and insect bite protection, may be obtained
from the Centers for Disease Control and Prevention's hotline for
international travelers at 1-877-FYI-TRIP (1-877-394-8747) or via the
CDC's Internet site at <http://www.cdc.gov/travel>.  For information
about outbreaks of infectious diseases abroad consult the World Health
Organization's (WHO) website at <http://www.who.int/en>.  Further health
information for travelers is available at <http://www.who.int/ith>.

**MEDICAL INSURANCE:** The Department of State strongly urges Americans
to consult with their medical insurance company prior to traveling
abroad to confirm whether their policy applies overseas and whether it
will cover emergency expenses such as a medical evacuation.  [Please see
our information on medical insurance
overseas](http://travel.state.gov/travel/cis_pa_tw/cis/cis_1470.html) at
<http://travel.state.gov/travel/cis_pa_tw/cis/cis_1470.html>.

**Other health information:** Information on vaccinations and other
health precautions, such as safe food and water precautions and insect
bite protection, may be obtained from the Centers for Disease Control
and Prevention\'s international traveler\'s hotline at telephone
1-877-FYI-TRIP (1-877-394-8747); fax 1-888-CDC-FAXX (1-888-232-3299), or
via CDC\'S internet home page at <http://www.cdc.gov/travel>. For
information about outbreaks of infectious diseases abroad, consult the
World Health Organization's website at <http://www.who.int/en>. Further
health information for travelers is available at
<http://www.who.int/ith>.

**Food:** Special care should be taken while eating food in India. It is
most safe to consume food at five star hotels. If well-cooked, hot food
is eaten, most food borne infections can be avoided. Raw fruits should
be eaten only when they have unbroken skin and are peeled. Raw
vegetables and salads should be avoided, because they are often
contaminated with parasite cysts or worm eggs. Scrubbing green leafy
vegetables, soaking them in a proper chlorine solution, and then rinsing
them in boiled water should eliminate most, but perhaps not all,
parasites. Potassium permanganate (Pinky\'s solution) and quaternary
ammonium compounds such as Roccal are not recommended for soaking
vegetables. Unless dairy products are known to be hygienically prepared
and properly refrigerated, they should be avoided. Even if refrigerated,
custards, cream pastries, potato salads, and shellfish should be
avoided. These are all excellent vehicles for growth of pathogenic
organisms that cause food poisoning. When fresh fruits and vegetables
cannot be obtained or eaten, multivitamin supplementation should be
taken. Eating raw or undercooked local beef, pork, or fish can lead to
trichinosis, tapeworm, or fluke infections. Smoking, salting, pickling,
or drying meat or fish alone is not effective in killing parasites.
Heating meat or fish to at least 55 degrees Centigrade for 1 hour or
freezing at minus 10 degree Centigrade for 20 days will kill parasites.)

## Local Time, Business Hours, and Holidays [**Return to top**](#ch8)

India is five and one-half hours ahead of Greenwich Mean Time (GMT). It
has not adopted summer time (daylight saving time) and uses standard
time countrywide throughout the year.

Time difference between India and the United States:

  --------------------------- --------------------- ---------------------
  **Eastern Standard**        **Eastern Daylight**  **India**

  8:00 a.m.                   7:00 a.m.             4:30 p.m.

  12:00 noon                  11:00 a.m.            8:30 p.m.

  10:30 p.m.                  9:30 p.m.             7:00 a.m.
  --------------------------- --------------------- ---------------------

New Delhi is nine hours thirty minutes ahead of Washington, D.C., during
daylight savings time and 10 hours 30 minutes ahead of Washington, D.C.,
during standard time. Due to the uncomfortable time difference, many
business executives find communication via e-mail, automatic fax
machines or the Internet a practical and convenient alternative to real
time voice communications

The standard six-day working week is Monday through Friday, 9:30 a.m. to
5:30 p.m., with a half-day on Saturday. Normally, lunch is for one hour,
between 12:00 p.m. and 2:00 p.m. However, in some large cities \[e.g.,
Mumbai\], some places of business start working earlier to avoid
congested traffic while commuting. Increasingly, among the business
organizations, there is also a trend towards a longer working day, which
can start as early as 7:30 a.m. and last till 8:00 p.m. The trend in the
corporate sector is to work five-day a week. Central Government offices
are closed on Saturdays. Banking hours are 10:00 a.m. and 2:00 p.m. on
weekdays and 10:00 a.m. to 12:00 noon on Saturdays. In Mumbai, however,
banks are open weekdays from 11:00 a.m. to 3:00 p.m., Saturdays from
11:00 a.m. to 1:00 p.m. In major metropolitan cities, several foreign
and Indian-owned banks are beginning to provide 24-hour banking
services.

## American Embassy New Delhi Authorized Holidays for 2006

+----------------+-------------+-------------------------+-------------+
| **[Date]       | **[Day]{.s  | **                      | **[Type]{.s |
| {.smallcaps}** | mallcaps}** | [Holiday]{.smallcaps}** | mallcaps}** |
+================+=============+=========================+=============+
| January 2      | Monday      | New Year's Day\*\*      | American    |
+----------------+-------------+-------------------------+-------------+
| January 11     | Wednesday   | Idu\'Z Zuha (Bakrid)    | Indian      |
+----------------+-------------+-------------------------+-------------+
| January 16     | Monday      | Martin Luther King's    | American    |
|                |             | Birthday                |             |
+----------------+-------------+-------------------------+-------------+
| January 26     | Thursday    | Republic Day            | Indian      |
+----------------+-------------+-------------------------+-------------+
| February 20    | #           | Presidents' Day         | American    |
|                | #### Monday |                         |             |
+----------------+-------------+-------------------------+-------------+
| March 15       | Wednesday   | Holi                    | Indian      |
+----------------+-------------+-------------------------+-------------+
| April 6        | Thursday    | Ram Navami              | Indian      |
+----------------+-------------+-------------------------+-------------+
| April 14       | Friday      | Good Friday             | Indian      |
+----------------+-------------+-------------------------+-------------+
| May 29         | Monday      | Memorial Day            | American    |
+----------------+-------------+-------------------------+-------------+
| July 4         | Tuesday     | Independence Day        | American    |
+----------------+-------------+-------------------------+-------------+
| August 9       | Wednesday   | Raksha Bandhan          | Indian      |
+----------------+-------------+-------------------------+-------------+
| August 15      | Tuesday     | Independence Day        | Indian      |
+----------------+-------------+-------------------------+-------------+
| August 16      | Wednesday   | Janmashtami             | Indian      |
+----------------+-------------+-------------------------+-------------+
| September 4    | Monday      | Labor Day               | American    |
+----------------+-------------+-------------------------+-------------+
| October 2      | Monday      | Mahatma Gandhi's        | Indian      |
|                |             | Birthday/ Dussehra      |             |
+----------------+-------------+-------------------------+-------------+
| October 9      | Monday      | Columbus Day            | American    |
+----------------+-------------+-------------------------+-------------+
| October 25     | Wednesday   | Idu'l Fitr              | Indian      |
+----------------+-------------+-------------------------+-------------+
| November 10    | Friday      | Veterans' Day\*         | American    |
+----------------+-------------+-------------------------+-------------+
| November 23    | Thursday    | Thanksgiving Day        | American    |
+----------------+-------------+-------------------------+-------------+
| December 25    | Monday      | Christmas Day           | American    |
+----------------+-------------+-------------------------+-------------+

## Temporary Entry of Materials and Personal Belongings [**Return to top**](#ch8)

Indian customs authorities enforce strict regulations concerning
temporary importation into or export from India of items such as
firearms, antiquities, electronic equipment, currency, ivory, gold
objects, religious materials, and other prohibited materials.  Even
transit passengers require permission from the Government of India to
bring in such items.  Those not complying risk arrest and/or fine and
confiscation of these items.  If charged with any alleged legal
violations by Indian law enforcement, it is recommended that an attorney
review any document prior to signing.  The Government of India requires
the registration of antique items with the local police along with a
photograph of the item.  It is advisable to contact the Embassy of India
in Washington or one of India\'s consulates in the United States for
specific information regarding customs requirements.  In many countries
around the world, counterfeit and pirated goods are widely available. 
Transactions involving such products are illegal and bringing them back
to the United States may result in forfeitures and/or fines. A [current
list of those countries with serious problems in this regard can be
found
here](http://www.ustr.gov/Document_Library/Reports_Publications/2004/2004_Special_301/Section_Index.html)
. The U.S. Customs Service may impose corresponding import restrictions
in accordance with the Convention on Cultural Property Implementation
Act.  (Contact the Customs Service at 202 927-2336 or Internet
http://exchanges.state.gov/education/culprop for further information.

Indian customs authorities encourage the use of an ATA (Admission
Temporaire/Temporary Admission) Carnet for the temporary admission of
professional equipment, commercial samples, and/or goods for exhibitions
and fair purposes.  ATA Carnet Headquarters, located at the U.S. Council
for International Business, 1212 Avenue of the Americas, New York, NY
10036, issues and guarantees the ATA Carnet in the United States.  For
additional information call (212) 354-4480, e-mail
<atacarnet@uscib.org>, or visit
[http://www.uscib.org](http://www.uscib.org/) for details.

[Please see our information on customs
regulations](http://travel.state.gov/travel/cis_pa_tw/cis/cis_1468.html)
at <http://travel.state.gov/travel/cis_pa_tw/cis/cis_1468.html>.

## Web Resources [**Return to top**](#ch8)

[http://www.buyusa.com](http://www.buyusa.com/)

[http://www.state.gov](http://www.state.gov/)

[http://travel.state.gov](http://travel.state.gov/)

[http://www.indianembassy.org](http://www.indianembassy.org/)

<http://www.unitedstatesvisas.gov/>

<http://www.tourisminindia.com/>

<http://immigrationindia.nic.in/frro_delhi_address.htm>

[http://www.airindia.com](http://www.airindia.com/)

[http://indian-airlines.nic.in](http://indian-airlines.nic.in/)

[http://www.jetairways.com](http://www.jetairways.com/)

[http://www.airsahara.net](http://www.airsahara.net/)

<http://www.tourismofindia.com/foot/links.htm>

[Return to table of
contents](#doing-business-in-india-a-country-commercial-guide-for-u.s.-companies)

[Return to table of
contents](#doing-business-in-india-a-country-commercial-guide-for-u.s.-companies)

# Chapter 9: Contacts, Market Research, and Trade Events

-   [Contacts](#contacts-return-to-top-1)

-   [Market Research](#market-research-return-to-top)

-   [Trade Events](#trade-events-return-to-top)

## Contacts [**Return to top**](#chapter-9-contacts-market-research-and-trade-events)

Ms. Thelma Askey

Director

U.S. Trade and Development Agency

1000 Wilson Boulevard, Suite 1500

Arlington, VA 22209

Tel: 703-875-4357

Fax: 703-875-4009

**Website:** [http://www.tda.gov](http://www.tda.gov/)

Mr. Robert A. Mosbacher, Jr.

President & Chief Executive Officer

Overseas Private Investment Corporation\
1100 New York Avenue Chapter 9, N.W.\
Washington, D.C. 20527\
Tel: 202-336-8400\
Fax: 202-408-9859

**Website:** [http://www.opic.gov](http://www.opic.gov/)

Mr. James H. Lambright\
Chairman & President (Acting)\
Export-Import Bank of the United States\
811 Vermont Avenue, N.W.\
Washington, D.C. 20571\
Tel: 202-565-3579\
Fax: 202-565-3584\
**Website:** [http://www.exim.gov](http://www.exim.gov/)

Mr. Ron Somers

President

U.S.-India Business Council\
U.S. Chamber of Commerce\
1615 H. Street, N.W.\
Washington, D.C. 20062-2000\
Tel: 202-463-**5323**\
Fax: 202-463-3173\
Email: india@us-india.org\
**Website:** [http://www.usibc.com](http://www.usibc.com/)

Trade Information Center (Room 7424)\
U.S. Department of Commerce\
14th and Constitution Avenue, NW\
Washington, D.C. 20230\
Tel: 1-800-872-8723 or 202-482-0543\
Fax: 202-482-4473

**Website:** <http://www.trade.gov/td/tic>**\
**

INDIA SANCTIONS HOTLINE\
Tel (202)-482-2955

<http://www.mac.doc.gov/sanctions>

**INDIA SANCTIONS WEBSITE\
**\
Bureau of Industry & Security

(formerly Bureau of Export Administration)\
Exporter Counseling Division\
Tel (202) 482-4811

<http://www.bis.doc.gov/entities>\
\
**IMPORTANT WEB SITES OF U.S. ORGANIZATIONS\
**\
U.S. Department of Commerce;
[http://www.mac.doc.gov](http://www.mac.doc.gov/)**\
**Bureau of Industry and Security Administration (BXA);
[http://www.bis.doc.gov](http://www.bis.doc.gov/)\
Department of Treasury;
[http://www.ustreas.gov](http://www.ustreas.gov/)\
State Department; [http://www.state.gov](http://www.state.gov/)\
Export-Import Bank of the United States;
[http://www.exim.gov](http://www.exim.gov/)**\
**Overseas Private Investment Corporation (OPIC);
[http://www.opic.gov](http://www.opic.gov/)\
United States Agency for International Development;
[http://www.info.usaid.gov](http://www.info.usaid.gov/)\
U.S. Trade & Development Agency;
[http://www.tda.gov](http://www.tda.gov/)\
The U.S. Commercial Service;
[http://www.export.gov](http://www.export.gov/);
[http://www.buyusa.com](http://www.buyusa.com/)

**U.S. EMBASSY CONTACTS\
**\
John E. Peters\
Minister Counselor for Commercial Affairs\
The Commercial Service

U.S. Embassy\
The American Center\
24, Kasturba Gandhi Marg\
Connaught Place\
New Delhi 110 0001\
Tel: 91-11-2331-6841-49; 2419-8000\
Fax: 91-11-2331-5172\
Email: <New.Delhi.Office.Box@mail.doc.gov>\
\
Donald G. Nay\
Deputy Counselor for Commercial Affairs\
The Commercial Service

U.S. Embassy\
The American Center\
24, Kasturba Gandhi Marg\
Connaught Place\
New Delhi 110 0001\
Tel: 91-11-2331-6841-49; 2419-8000\
Fax: 91-11-2331-5172\
Email: <New.Delhi.Office.Box@mail.doc.gov>\
\
Artina Davis\
Commercial Attache\
The Commercial Service

U.S. Embassy\
The American Center\
24, Kasturba Gandhi Marg\
Connaught Place\
New Delhi 110 0001\
Tel: 91-11-2331-6841-49; 2419-8000\
Fax: 91-11-2331-5172\
Email: <New.Delhi.Office.Box@mail.doc.gov>

Meg Drazek\
Commercial Attache\
The Commercial Service

U.S. Embassy\
The American Center\
24, Kasturba Gandhi Marg\
Connaught Place\
New Delhi 110 0001\
Tel: 91-11-2331-6841-49; 2419-8000\
Fax: 91-11-2331-2214\
Email: <New.Delhi.Office.Box@mail.doc.gov>\
\
Lee Brudvig\
Minister Counselor for Economic Affairs\
U.S. Embassy\
Shantipath, Chanakyapuri\
New Delhi 110 021\
Tel: 91-11-2419-8000\
Fax: 91-11-2419-0017, 2419-0067\
\
George Deikun

Director\
American Embassy\
United States Agency for\
International Development (USAID)\
Shantipath, Chanakyapuri\
New Delhi 110 021\
Tel: 91-11-2419-8000\
Fax: 91-11-2419-8612

Jim Cunningham\
Commercial Consul\
The Commercial Service

American Center\
4 New Marine Lines\
Mumbai 400 020\
Tel: 91-22-2265-2511\
Fax: 91-22-2262-3850\
Email: <Mumbai.Office.Box@mail.doc.gov>\
\
Mark Russell\
Commercial Consul\
The Commercial Service\
American Consulate General\
220 Mount Road, Chennai 600 006\
Tel: 91-44-2811-2034\
Fax: 91-44-2811-2036\
Email: <Chennai.Office.Box@mail.doc.gov>\
\
Arup Mitra

Commercial Specialist\
The Commercial Service\
American Center\
38-A, Jawaharlal Nehru Road\
Calcutta 700071\
Tel: 91-33-288 1200-1206\
Fax: 91-33-288-1207\
Email: <Calcutta.Office.Box@mail.doc.gov>\
\
Leonard Roberts\
Commercial Specialist\
The Commercial Service

S2, II Floor, Red Cross Bhawan

No. 26, Racecourse Road

Bangalore 560001

Tel: 91-80-220-6401; Fax: 91-80-220-6405\
Mobile: 9880102199

Email: <Bangalore.Office.Box@mail.doc.gov>

Sangeeta Taneja

Commercial Specialist\
The Commercial Service\
401/402, JMC House

Ambawadi, Near Parimal Garden

Ahmedabad 380 001\
Tel:91-79-2656 5210/16\
Fax:91-79-2656 0763\
Email: <Ahmedabad.Office.Box@mail.doc.gov>

P. Radhakishore

Commercial Specialist

The Commercial Service

Taj Residency Hotel

#555, E Level,

Road No. 1, Banjara Hills, Hyderabad 500 034

Tel: 91-40-23305000, 23393939

Fax: 91-40-23300130

Email: <Hyderabad.office.box.@mail.doc.gov>

Capt. D.W. Harris

Chief, Office of Defense Cooperation

Office of Defense Cooperation\
U. S. Embassy New Delhi\
Shantipath, Chanakyapuri\
New Delhi 110 021\
Tel: 91-11-2419-8000, ext. 8690\
Fax: 91-11-2419-0066

**CHAMBERS OF COMMERCE\
**

Mr. Ramesh Bajpai

Executive Director

American Chamber of Commerce (AMCHAM)

Room No. 1262, Maurya Sheraton Hotel

Sardar Patel Marg

New Delhi 110 021

Tel: 91-11-23023102, 24102690

Fax: 91-11-23023109

Email: <amcham@amchamindia.com>

[http://www.amchamindia.com](http://www.amchamindia.com/)

Mr. Srinivasan\
Director General\
Confederation of Indian Industry (CII)\
23-26 Institutional Area\
Lodi Road\
New Delhi 110003, India\
Tel: 91-11-2462-9994; 2463-3168\
Fax: 91-11-2463-3168; 2462-6149\
Email: <ciico@ciionline.org>

[http://www.ciionline.org](http://www.ciionline.org/)

Dr. Amit Mitra\
Secretary General\
Federation of Indian Chambers of Commerce & Industry (FICCI)\
Federation House, Tansen Marg\
New Delhi 110001, India\
Tel: 91-11-2373-8760-65; 2331-5442\
Fax: 91-11-2372-1504; 2332-0714

<http://www.ficci.com/ficci/index.htm>\
\
Mr. D. S. Rawat

Secretary General\
The Associated Chambers of Commerce\
& Industry of India (ASSOCHAM)\
Corporate House, 147 B Gautam Nagar\
Gulmohar Enclave, New Delhi-110 049\
Tel: 91-11-26512477-79, 91-11-51643407-10\
Fax: 91-11-26512154\
E-mail: <assocham@nic.in>

[http://www.assochem.org](http://www.assochem.org/)

Ms. Madhvi Kataria

Resident Director

Indo-American Chamber of Commerce (IACC)

PHD House (4^th^ Floor), Opp. Asian Games Village

New Delhi 110 016

Tel: 91-11-26963387, 26531965, 26518201

Fax: 91-11-26531954

Email: <indo-american@eth.net>

[http://www.indous.org](http://www.indous.org/)

Mr. Vivek Debroy\
Secretary General\
PHD Chamber of Commerce & Industry\
PHD House (1^st^ & 2^nd^ Floor), Opp.Asian Games Village\
New Delhi 110016, India\
Tel: 91-11-2686-3801, 26863135, 26857747(D)\
Fax: 91-11-2686-3135; 2685-7747\
E-mail: <phdcci@phdccimail.com>

[http://www.phdccimail.com](http://www.phdccimail.com/)

Mr. R.K. Chopra\
Secretary General\
Indo-American Chamber of Commerce\
1-C Vulcan Insurance Building\
Veer Nariman Road, Churchgate\
Mumbai 400020, India\
Tel: 91-22-2282-1413, 2282-1485

Mobile: 9833044267\
Fax: 91-22-2204-6141\
Email: <rk.chopra@indous.com>

[http://www.indous.org](http://www.indous.org/)

Mr. Prasad Menon

President

Bombay Chamber of Commerce & Industry\
Mackinnon Mackenzie Building, 3^rd^ Floor\
Ballard Estate, Mumbai-400001\
Tel: 91-22-2261-4681\
Fax: 91-22-2262-1213\
E-Mail: <bcci@bombaychamber.com>

[http://www.bombaychamber.com](http://www.bombaychamber.com/)

Mr. Rajesh Kapadia\
President\
Indian Merchants'Chamber, IMC Building\
Indian Merchants' Chamber Marg\
Churchgate\
Mumbai-400020\
Tel: 91-22-2204-6633, 2204-1919\
Fax: 91-22-2204-8508, 2283-8281\
Email: <imc@imcnet.org>\
[http://www.incnet.org](http://www.incnet.org/)

**TRADE ASSOCIATIONS\
**\
Mr. Kiran Karnik\
President\
National Association of Software\
and Service Companies (NASSCOM)\
International Youth Centre\
Teen Murti Marg\
Chanakyapuri\
New Delhi - 110021, India\
Tel: 91-11-2301-0199\
Fax: 91-11-2331- 5452\
**Website:** [http://www.nasscom.org](http://www.nasscom.org/)\
\
Mr. Vinnie Mehta\
Executive Director\
Manufacturers\'\' Association\
for Information Technology (MAIT)\
PHD House, 4th Floor\
Opp. Asian Games Village\
New Delhi 110 016, India\
Tel: 91-11-2685-5487; 2685-4284; 2687-6976\
Fax: 91-11-2685-1321\
E-mail: <mait@vsnl.com>**\
Website:** [http://www.mait.com](http://www.mait.com/)\
\
Mr. V. Anbu\
Secretary General/Executive Director\
Indian Machine Tool Manufacturers' Association (IMTMA)\
Plot 249 F, Phase IV, Udyog Vihar, Sector 18\
Gurgaon 122 015, Haryana (INDIA)\
Phone : +91-124-4014101/2/3/4\
Fax : +91-124-4014108\
Email : <imtmahq@vsnl.in>, <imtma@del2.vsnl.net.in>**\
**[http://www.imtma.org](http://www.imtma.org/)

Mr. Vishnu Mathur\
Executive Director\
Automotive Component Manufacturers\
Association of India (ACMA)\
6th Floor The Capital Court,\
Olof Palme Marg, Munirka,\
New Delhi 110 067.\
Tel.: +91 11 2616 0315, 2617 5873, 2618 4479\
Fax: +91 11 2616 0317\
E-mail: <acma@vsnl.com>, <acma@vsnl.net>

[http://www.acmainfo.com](http://www.acmainfo.com/)

Mr. G.C. Modgil

President - India Chapter\
American Society of Heating, Refrigerating and\
Airconditioning Engineers (ASHRAE) and\
Indian Society of Heating, Refrigerating and\
Airconditioning Engineers (ISHRAE)\
K-43 Kailash Colony\
New Delhi 110048, India\
Tel: 91-11-516-35655, 2642-4925

Fax: 91-11-51635655

E-mail: <ashraeic@touchtelindia.net>

[http://www.ashraeindia.org](http://www.ashraeindia.org/)

Mr. V. N. Gopalakrishnan\
Secretary General\
All India Instrument Manufacturers\
and Dealers Association (IMDA)\
A-32, Navyug Niwas, Opp. Minerva Theatre

167, Dr. Bhadkamkar Marg,

Mumbai - 400007 \
Tel: 91-22-2307-1868

Fax: 91-22-2230-71868

Email: <imda@vsnl.net>

Mr. D.L. Desai Shankarbhai

Secretary General\
Builders Association of India\
G-I/G 20 Commerce Centre 7th Floor\
J. Dadajee Road Tardeo\
Mumbai 400034, India\
Tel: 91-22-2351-4134, 2351-4802

Fax:91-22-2352-0507\
Email: <bai@vsnl.com>, <bai@bom5.vsnl.net.in>

[http://www.baidc.com](http://www.baidc.com/)

Mr. K. Bhusan\
Executive Director\
Project Exports Promotion Council of India

Formerly known as Overseas Construction Council of India\
Flat No.H-118, Himalaya House, 11th Floor\
23 Kasturba Gandhi Marg\
New Delhi 110 001, India\
Tel: 91-11-2373-8377; 2372-2425\
Fax: 91-11-2331-2936

E-mail: <info@projectsexports.com>

[http://www.projectsexports.com](http://www.projectsexports.com/)

Mr. Dara B. Patel\
Secretary General\
Indian Drug Manufacturers\'\' Association (IDMA)\
102 B Poonam Chambers, A Wing, First Floor\
Dr. A. Besant Road, Worli\
Mumbai 400 018, India\
Tel: 91-22-2497-4308, 2494-4624

Fax: 91-22-2495-0723\
Email: <idma@vsnl.com>, <idma@idma-assn.org>

[http://www.idma-assn.org](http://www.idma-assn.org/)

Mr. A.K. Bhagat

President

Indian Electrical & Electronics\
Manufacturers Association (IEEMA)\
501 Kakad Chambers - 5th Floor\
132 Dr. Annie Besant Road, Worli\
Mumbai 400 018, India\
Tel: 91-22-2493-0532/6528/6529\
Fax: 91-22-2493-2705\
Email: <mumbai@ieema.org>\
[http://www.ieema.org](http://www.ieema.org/)

Mr. Ranjit Shahani

President

Organization of Pharmaceutical Producers of India (OPPI)\
Peninsula Chambers, Ground Floor,\
Ganpatrao Kadam Marg,\
Lower Parel,\
Mumbai 400 013

Tel: 91-22-24918123, 24912486, 56627007\
Fax: 91-22-24915168\
Email: <indiaoppi@vsnl.com>

[http://www.indiaoppi.com](http://www.indiaoppi.com/)

Mr. R.K. Gupta

Joint Director

Consulting Engineers Association of India\
East Court, Zone 4, Core 4B\
2nd Floor, India Habitat Center\
Lodi Road, New Delhi 110 003\
Tel: 91-11-2460-1068\
Fax: 91-11-2464-2831\
E-Mail: <cengr@del2.vsnl.net.in>\
[http://www.ceaindia.org](http://www.ceaindia.org/)

Mr. Deepak Agarwal\
Director General\
Consultancy Development Centre\
East Court, Zone 4, Core 4B\
2nd Floor, India Habitat Center\
Lodi Road\
New Delhi 110 003\
Tel: 91-11-2460-2915, 26602601, 24601533, 2464-8268(D)\
Fax: 91-11-2460-2602

E-mail: cdc@vsnl.com

[http://www.cdc.org.in](http://www.cdc.org.in/)

Mr. S. Sen**\
**Head - CII Defence Division\
National Committee on Defence\
Confederation of Indian Industry\
23, Institutional Area, Lodi Road\
New Delhi - 110 003, India\
Phone: 91 11 24629994 - 7\
Fax: 91 11 24601298, 24633168, 24626149

E-mail: s.sen@ciionline.org\
[http://www.ciidefence.com](http://www.ciidefence.com/)

**COUNTRY GOVERNMENT OFFICES\
**\
Mr. S. N. Menon

Secretary - Commerce\
Ministry of Commerce & Industry\
Government of India\
Udyog Bhavan, Rafi Marg\
New Delhi 110001, India\
Tel: 91-11-2306-3664, 2306-3617

Fax: 91-11-2306-1796\
E-Mail: comind@gias.d101.vsnl.net.in\
[http://www.commerce.nic.in](http://www.commerce.nic.in/)\
\
Mr. K.T. Chacko

Director General

Director General of Foreign Trade\
Ministry of Commerce\
Government of India\
Udyog Bhavan, Maulana Azad Road\
New Delhi 110001, India\
Tel: 91-11-2306-1562\
Fax: 91-11-2306-8613\
[http://www.dgft.delhi.nic.in](http://www.dgft.delhi.nic.in/)

Mr. S. Krishnan\
Private Secretary\
Ministry of Finance\
Government of India\
North Block\
New Delhi 110001, India\
Tel:91-11-2309-4399\
Fax:91-11-2309-3289\
E-mail: <finsecy@delhi.finance.nic.in>

[http://www.finmin.nic.in](http://www.finmin.nic.in/)

Dr. A.K. Dua\
Secretary\
Dept. of Industrial Policy & Promotion\
Ministry of Commerce & Industry\
Government of India\
Udyog Bhavan, Rafi Marg\
New Delhi 110 011, India\
Tel: 91-11-2306-1815/2306-1667\
Fax: 91-11-2306-1598

E-mail: commerce@hug.nic.in

[http://commerce.nic.in](http://commerce.nic.in/),
[http://www.dipp.nic.in](http://www.dipp.nic.in/)

Mr. Shekhar Dutt

Secretary

Ministry of Defence

Government of India

South Block

New Delhi 110 001, India

Tel: 91-11-2301-2380, 2301-1976

Fax: 91-11-23010044\
[http://mod.nic.in](http://mod.nic.in/)

Mr. T.K.A. Nair\
Principal Secretary to the Prime Minister\
Prime Minister's Office\
Government of India\
South Block\
New Delhi 110 011, India\
Tel: 91-11-2301-3040\
Fax: 91-11-2301-6857; 2301-9545

Email: <tk.nair@pmo.nic.in>

[http://pmindia.nic.in](http://pmindia.nic.in/)

Mr. Shyan Saran\
Foreign Secretary\
Ministry of External Affairs\
Government of India\
South Block, New Delhi 110011, India\
Tel: 91-11-2301-2318; 2196\
Fax: 91-11-2301-6781

[http://www.meaindia.nic.in](http://www.meaindia.nic.in/)

Mr. Brijesh Kumar

Secretary\
Department of Information Technology, Ministry of Communication\
Government of India\
Electronics Niketan, 6 CGO Complex\
New Delhi 110003, India\
Tel: 91-11-2436-4041\
Fax: 91-11-2436-3134

E-mail: <secretary@mit.gov.in>, <webmaster@mit.gov.in>

[http://mit.gov.in](http://mit.gov.in/)

**\
**Mr. Ajay Prasad\
Secretary\
Ministry of Civil Aviation\
Rajiv Gandhi Bhavan\
Safdarjung Airport\
Government of India\
New Delhi 11 0003, India\
Tel: 91-11-2461-0368, 2461-0358\
Fax: 91-11-2460-2397

E-mail: <webdesk@civilav.delhi.nic.in>

[http://civilaviation.nic.in](http://civilaviation.nic.in/)

Mrs. Uma Pillai\
Secretary\
Ministry of Tourism\
Government of India\
Transport Bhawan\
1, Parliament Street, New Delhi, India\
Tel: 91-11-2371-1792\
Fax: 91-11-2371-7890\
[http://tourismindia.com](http://tourismindia.com/)

Ms. Satwant Reddy

Secretary\
Department of Chemicals & Petrochemicals\
Ministry of Chemicals and Fertilizers\
Government of India\
Shastri Bhavan\
Dr. Rajendra Prasad Marg\
New Delhi 110001, India\
Tel: 91-11-2338-2467\
Fax: 91-11-2338-7892

[http://chemicals.nic.in](http://chemicals.nic.in/),
[http://fert.nic.in](http://fert.nic.in/)

Dr. Prodipto Ghosh

Secretary\
Ministry of Environment & Forests\
Government of India\
Paryavaran Bhavan\
CGO Complex, Phase-II, Lodi Road\
New Delhi 110003, India\
Tel: 91-11-2436-0721\
Fax: 91-11-2436-1896

E-mail: <secymenf@nic.in>

[http://envfor.nic.in](http://envfor.nic.in/)

Dr. J.S. Sarma\
Secretary\
Department of Telecommunications

Ministry of Communications\
Government of India\
Sanchar Bhavan, Ashoka Road\
New Delhi 110001, India\
Tel: 91-11-2371-9898\
Fax: 91-11-2371-1514

E-mail: <jssarma@nic.in>

[http://www.dotindia.com](http://www.dotindia.com/)

Mr. Anupam Dasgupta

Secretary\
Ministry of Small Scale Industries and

Agro and Rural Industries\
Government of India\
Room No 170, Udyog Bhawan\
New Delhi 110001, India\
Tel: 91-11-2306-2107\
Fax: 91-11-2306-3045

Email: <adasgupta@nic.in>

[http://ssi.nic.in](http://ssi.nic.in/)

Mr. Prasanna Hota\
Secretary\
Ministry of Health & Family Welfare\
Government of India\
Nirman Bhavan, Maulana Azad Marg\
New Delhi 11001, India\
Tel: 91-11-2306-1863\
Fax: 91-11-2306-1252

E-mail: <secyfw@nb.nic.in>

[http://mohfw.nic.in](http://mohfw.nic.in/)

Mr. S.K. Arora\
Secretary\
Ministry of Information and Broadcasting\
Government of India\
Room 654, A Wing

Shastri Bhavan, Dr. Rajendra Prasad Road\
New Delhi 110001, India\
Tel: 91-11-2338-2639\
Fax: 91-11-2338-3513

E-mail: skarora@nic.in\
[http://mib.nic.in](http://mib.nic.in/)

Mr. A.M. Gokhale\
Secretary\
Ministry of Non-Conventional Energy Sources\
Government of India\
Block 14, CGO Complex\
Lodhi Road, New Delhi 110003, India\
Tel: 91-11-2436-1481, 2436-2772\
Fax: 91-11-2436-7329

[http://mnes.nic.in](http://mnes.nic.in/)

Mr. M.S. Srinivasan

Secretary\
Ministry of Petroleum & Natural Gas\
Government of India\
Shastri Bhavan\
Dr. Raiendra Prasad Road\
New Delhi 110001, India\
Tel: 91-11-2338-3562, 2338-1626\
Fax: 91-11-2338-3585, 2307-0723

E-mail: srinivasan2k@nic.in\
[http://petroleum.nic.in](http://petroleum.nic.in/)

Mr. P.S. Rana

Secretary\
Ministry of Statistics & Programme Implementation\
Government of India\
Sardar Patel Bhavan, Parliament Street\
New Delhi 110001, India\
Tel: 91-11-2334-4689, 2374-2150\
Fax: 91-11-2374-2067

E-mail: secpi@nic.in

[http://www.mospi.nic.in](http://www.mospi.nic.in/)

Mr. R.V. Shahi\
Secretary\
Ministry of Power\
Government of India\
Shram Shakti Bhavan\
Rafi Marg, New Delhi 110001, India\
Tel: 91-11-2371-0279, 2371-1316\
Fax: 91-11-2372-1487\
[http://powermin.nic.in](http://powermin.nic.in/)

Mr. J.P. Batra

Chairman, Railway Board\
Ministry of Railways\
Government of India\
Rail Bhavan, Rafi Marg\
New Delhi 110001, India\
Tel: 91-11-2338-4010, 2338-2753

Fax: 91-11-2338-1453\
E-mail: <crb@del2.vsnl.net.in>

[http://www.indianrailways.gov.in](http://www.indianrailways.gov.in/)\
\
Dr. V. S. Ramamurthy\
Secretary\
Department of Science & Technology\
Ministry of Science & Technology\
Government of India\
Technology Bhavan\
New Mehrauli Road\
New Delhi 110 016, India\
Tel: 91-11-2656-7373, 2696-2819

Fax: 91-11-2686-4570, 2686-2418

E-mail: dstinfo@nic.in\
[http://mst.nic.in](http://mst.nic.in/)

Dr. Mano Ranjan

Secretary\
Ministry of Steel\
Government of India\
Udyog Bhavan, Maulana Azad Marg\
New Delhi 11 0011, India\
Tel: 91-11-2306-3912

Fax: 91-11-2306-3489\
[http://steel.nic.in](http://steel.nic.in/)

Mr. Ashok Kumar Mahapatra

Secretary\
Ministry of Shipping\
Government of India\
Parivahan Bhavan, Parliament Street\
New Delhi 110001, India\
Tel: 91-11- 2371 4938\
Fax: 91-11-2371-6656**\
**[http://shipping.nic.in](http://shipping.nic.in/)

Mr. L.K. Joshi\
Secretary

Ministry of Road Transport & Highways\
Transport Bhawan\
Room No. 509\
1 Parliament Street\
New Delhi\
Tel:91-11-2371 4104

Fax: 91-11-2335-6669

[http://morth.nic.in](http://morth.nic.in/)

Mr. D.P. Singh\
Secretary\
Ministry of Textiles\
Government of India\
Udyog Bhavan\
Maulana Azad Marg\
New Delhi 110011, India\
Tel: 91-11-2301-1769\
Fax: 91-11-2306-3681\
[http://texmin.nic.in](http://texmin.nic.in/)

Mr. J. Harinarayan

Secretary\
Ministry of Water Resources\
Government of India\
Shram Shakti Bhavan\
Rafi Marg\
New Delhi 110001, India\
Tel: 91-11-2371-5919\
Fax: 91-11-2371-0305, 2371-0305

E-mail: <secy@mowr.nic.in>

[http://wrmin.nic.in](http://wrmin.nic.in/)

Ms. Sunita Basant

Secretary

Department of Drinking Water Supply

Ministry of Rural Development

Government of India

247, A Wing, Nirman Bhawan

New Delhi 110 001, India

Tel: 91-11-2306-1245

Fax: 91-11-2301-2715

E-mail: secydws@nb.nic.in\
[http://ddws.nic.in](http://ddws.nic.in/)

**MULTILATERAL DEVELOPMENT BANK OFFICES IN INDIA\
**

Mr. Tadashi Kondo

Country Director

Asian Development Bank

No. 4, San Martin Marg

Chanakyapuri, New Delhi 110 021

Tel: 91-11-24107200

Fax: 91-11-26870955

E-mail: <adbinrm@adb.org>

[http://www.adb.org](http://www.adb.org/)

Mr. Iyad Malas

Director South Asia

International Finance Corporation

50M, Shantipath, Chanakyapuri

New Delhi 110 021, India

Tel: 91-11-4711-1000

Fax:91-11-4711-1001/2

Email: <SouthAsia@ifc.org>

[http://www.ifc.org](http://www.ifc.org/)

Mr. Michael F. Carter

Country Director

The World Bank

70 Lodi Estate, New Delhi 110 003 India

Tel: 91-11-2461-7241/2461 9491Ext. 271

Fax: 91-11-2463-2372(D), 2461-9393/2462-8074

[http://www.worldbank.org](http://www.worldbank.org/)

**U.S. DEPARTMENT OF COMMERCE LIAISON WITH THE MULTILATERAL DEVELOPMENT
BANKS\
**\
Asian Development Bank\
Frank Foster

Senior Commercial Officer\
Commercial Liaison to the ADB\
Commercial Service\
U.S. Embassy, Manila\
Tel: +1-632-887-1345/46\
Fax: +1-632-887-1164\
<http://www.buyusa.gov/worldbank>

The World Bank

Will Center

Director, Business Liaison

U.S. Executive Director\'s Office

The World Bank

1818 H Street, N.W.

Washington, D.C. 20433

Tel. +1-202-458-0120

Fax. +1-202-477-2967

<http://www.buyusa.gov/worldbank>

**OTHER USEFUL CONTACTS\
**\
U.S. Department of Agriculture\
Foreign Agricultural Service\
Trade Assistance and Promotion Office\
1400 Independence Avenue, S.W.\
Washington, D.C. 20250\
Tel: +1-202-720-3631\
Fax: +1-202-720-2166\
[http://www.\$a.gov](http://www.usda.gov/)**\
**\
U.S. Department of State\
Office of the Coordinator for Business Affairs\
2201 C St. NW\
Washington, D.C. 20520\
Tel: +1-202-647-4000, 201-647-5225\
Fax: +1-202-647-5939\
E-mail: [\$osweb@uic.edu](mailto:usdosweb@uic.edu)\
[http://www.state.gov](http://www.state.gov/)\
\
TPCC Trade Information Center\
Washington, D.C.\
Tel: 1-800-USA-TRADE\
\
United States Trade Representative\
600 17th street, N.W.\
Washington, D.C. 20506\
Tel: +1-202-395-4720, +1-202-395-7360

[http://www.ustr.gov](http://www.ustr.gov/)

U.S. Department of Energy\
Energy Information Administration\
1000 Independence Avenue, SM

Washington, D.C. 20585-0601\
Tel: (202) 586 8800\
[http://www.eia.doe.gov](http://www.eia.doe.gov/)

Manager, Private Sector Group\
Asian Development Bank\
P.O. Box 789\
0980 Manila, Philippines\
Tel: (63-2)-632-6400\
Fax: (63-2)-636-2346\
[http://www.adb.org](http://www.adb.org/)

Mr. S.P. Sharma\
Director General\
Bureau of Indian Standards\
Manahk Bhavan

9 Bahadurshah Zafar Marg\
New Delhi 110 002\
Tel: 91-11-2323-7991, 2323-6980\
Fax: 91-11-2323-5414

E-mail: <info@bis.org.in>

[http://www.bis.org.in](http://www.bis.org.in/)**\
**\
Dr. S.K. Pal

Assistant Controller of Patents & Designs

The Patent Office

Nizam Place, 2nd M.S. O. Building, (5-7) floors

234/4 Acharya Jagdish Bose Road

Kolkata 700 020

Tel: 91-33-2247-4401; 2247-4402; 2247-4403

Fax: 91-33-2247-3851

E-mail: [patentin@vsnl.com]{.underline};
[patindia@giascl01.vsnl.net.in]{.underline}

## Market Research [**Return to top**](#chapter-9-contacts-market-research-and-trade-events)

To view market research reports produced by the U.S. Commercial Service
please go to the following website:
[http://www.export.gov/marketresearch.html](http://www.export.gov/marketresearch.html )
and click on Country and Industry Market Reports.

Please note that these reports are only available to U.S. citizens and
U.S. companies. Registration to the site is required, but free of
charge.

**COUNTRY MARKET RESEARCH FIRMS\
**\
Mr. Vivek Srivastava -- Senior Director\
A.F. Ferguson & Co.\
4th Floor, Hansalaya Building\
Barakhamba Road\
New Delhi 110 001, India\
Tel: 91-11-2331-3543; 2331-5256, 2331-5266\
Fax: 91-11-2332-5437

[http://www.afferguson.com](http://www.afferguson.com/)

Mr. Roopen Roy

Managing Director

Price Waterhouse Coopers\
Sucheta Bhawan

Ist Floor, 11A, Vishnu Digamber Marg

New Delhi 110 002

Tel: 91-11-2323-2916, 2321-0891-99, 5115-0000

Fax: 91-11-2321-0594/96

E-mail: <roopen.roy@in.pwc.com>

[http://www.pwcglobal.com](http://www.pwcglobal.com/)

Mr. Pradeep Dadlani - Director\
Sycom Projects Consultants (P) Ltd.\
6/101 Kaushalya Park\
Hauz Khas, New Delhi 110 016, India\
Tel: 91-11-2651-3097; 2696-9452, 4167-4051\
Fax: 91-11-2696-9452

E-mail: <sycomprojects@rediffmail.com>

Mr. P.A. Vandrevala\
Executive Vice President\
Tata Consultancy Services\
12 Hailey Road, New Delhi 110 001, India\
Tel: 91-11-2372-1523; 2332-9696\
Fax: 91-11-2331-1735

[http://www.tcs.com](http://www.tcs.com/)

Mr. K. Mukhtyar\
Frost & Sullivan\
1st Floor, DC Business Center\
5, Chunawala Estate\
Kondivitta Road, Andheri (East)\
Mumbai - 400059, India\
Tel: 91-22-2832-4705; 832-4706\
Fax: 91-22-2832-4713\
Email : <frost@bom3.vsnl.net.in>

Mr. Thomas Puliyal - President\
Indian Market Research Bureau (IMRB)\
A-Wing, Mhatre Pet Bldg\
Senapati Bapat Marg, Dadar (W)\
Mumbai - 400 028\
Tel: 91-22-2432-3500\
Fax: 91-22-2432-3600\
\
Mr. Shiloo Chattopadhyay, Chairman\
Mode Research Private Limited\
210 Neelam Buildings\
108 Worli Seaface Road, Mumbai 400 018\
Tel: 91-22-2493-4768; 2494-9623\
Fax: 91-22-2495-0432.

Mr. Satish Kulkarni

Director

Corporate Catalysts (India) Pvt. Ltd.

118 Shah-pur-jat

New Delhi 110049

Phone: 91-11-5100-9999

Fax: 91-11-5100-9990

Email: <info@ccindia.com>

[http://www.ccindia.com](http://www.ccindia.com/)

Mr. Rajiv Memani

C.E.O. & Country Manager

Ernst & Young

B-26, Qutab Institutional Area

New Delhi 110016

Tel: 91-11-2661-1004

Fax: 91-11-2661-1012

[http://www.ey.com](http://www.ey.com/)

Mr. M.P.S. Puri

Managing Consultant

Synergy International

B-17, Defence Colony

New Delhi 110 024

Tel:91-11-2464-0962; Fax:91-11-2464-0845

Cell: 98111-61662

Email: <synergypuri@hotmail.com>

[http://www.business-consultant-india.com](http://www.business-consultant-india.com/)

## Trade Events [**Return to top**](#chapter-9-contacts-market-research-and-trade-events)

Please click on the link below for information on upcoming trade events.

<http://www.buyusa.gov/india/en/tradeevents.html>

<http://www.export.gov/trade_events/index.asp>

[Return to table of
contents](#doing-business-in-india-a-country-commercial-guide-for-u.s.-companies)

[[]{#ch10 .anchor}Return to table of
contents](#doing-business-in-india-a-country-commercial-guide-for-u.s.-companies)

# Chapter 10: Guide to Our Services

The U.S. Commercial Service offers customized solutions to help your
business enter and succeed in markets worldwide. Our global 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 with our world-class research

-   Promote your products and services to qualified buyers

-   Meet the best distributors and agents for your products and services

-   Overcome potential challenges or trade barriers

For more information on the services the U.S. Commercial Service offers
U.S. businesses, please click on the link below.

<http://www.buyusa.gov/india/en/services.html>

[Return to table of
contents](#doing-business-in-india-a-country-commercial-guide-for-u.s.-companies)

# 

U.S. exporters seeking general export information/assistance or
country-specific commercial information should consult with their
nearest **Export Assistance Center** or the **U.S. Department of
Commerce\'s Trade Information Center** at **(800) USA-TRADE**, or go to
the following website: [http://www.export.gov]()\
\
To the best of our knowledge, the information contained in this report
is accurate as of the date published. However, **The Department of
Commerce** does not take responsibility for actions readers may take
based on the information contained herein. Readers should always conduct
their own due diligence before entering into business ventures or other
commercial arrangements. **The Department of Commerce** can assist
companies in these endeavors.